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Magnet: Q2 Sales Up 97% On 2020

Magnet store 725 x 500

Nobia, the Swedish parent company of Magnet Kitchens, has reported on second quarter and half year trading, covering the six months ended June 2021.

Second quarter 2021

  • Net sales increased to SEK 3,622m (2,741) corresponding to an organic sales growth of 35%.
  • Operating profit increased to SEK 347m (-43), corresponding to an operating
    margin of 9.6% (-1.6). 
  • Changes in exchange rates negatively impacted operating profit by SEK 5m.
  • Profit after tax amounted to SEK 258m (-56), corresponding to earnings per share after dilution of SEK 1.52 (-0.33).
  • Operating cash flow amounted to SEK 618m (716).

During the quarter we saw a gradual ease of restrictions in all markets and on April 12 we could finally reopen our retail stores in the UK. That meant that all our stores and manufacturing facilities across the Group were in full operation again after more than a year of hampered conditions.

Spending more time at home in the kitchen, coupled with a strong home refurbishment trend, has clearly impacted the market conditions favourably. We continue to have strong demand in the Nordics which resulted in organic growth of 13% (11% compared to 2019) and Central Europe of 29% (9% compared to 2019). The growth was predominantly driven by strong retail sales whilst project sales were flat in the Nordics and slightly growing in the Netherlands.

In the UK we are rebuilding the retail order book after having been closed during the very important Winter Sales in the first quarter. Organic growth in the region was 97% versus last year, however that corresponds to a decline of 15% compared to 2019. We expect retail sales to normalize in Q3, assuming no further lockdowns, whilst we anticipate it will take longer for the social housing segment and London property market to recuperate. On a positive note the growth in Magnet trade continues to perform well. We will continue to invest to strengthen the trade proposition further.

The global surge in demand for material has resulted in higher direct material cost also in our industry. As a consequence, we have adjusted our pricing already during the quarter, and anticipate further increases during the second half of the year.

As we are heading towards a new normal, we are really excited about the future. We have a strong underlying market, and the eased restrictions allow us to operate more efficiently to cater for the demand. We are also pushing on with several initiatives from our Tomorrow Together strategy. Initiatives such as trade growth in the UK, process harmonization and the K2020 aligned assortment are already starting to pay off. In June we partnered up with the construction company Wästbygg for the building of our state-of-the-art kitchen factory in Jönköping, which is progressing according to plan. Sustainability aspects are vital in designing the new factory and we continue to drive towards our Science Based Targets which were approved in December last year. We are also in the starting block of launching new beautiful kitchen designs. Exciting indeed!

President and CEO, Jon Sintorn

UK region

Net sales in the UK region rose to SEK 1,274m (645) compared with the second quarter 2020 which was heavily impacted by corona lockdowns. The organic growth was 97% (-56) with strong growth across most segments. Sales to London property developers and social housing continued to be hampered by slow recovery after the corona lock downs.

Gross margin increased to 36.8% (14.6). Operating profit increased to SEK 31m (-239) and the operating margin was 2.4% (-37.1). Currency impact on operating profit was positive SEK 10m. Furlough support amounted to SEK 18m (105). Prior year’s second quarter was charged with one-time restructuring costs and bad debt provisions totalling SEK -57m.

Source : Nobia 

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28 July 2021

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