Reports

3rd Quarter of 2018

Net sales for the third quarter of 2018 amounted to MSEK 148 (188), a decrease by 21 percent compared with the corresponding quarter of the previous year.

Operating profit for the quarter amounted to MSEK -2 (1). Operating margin was -1 percent (1).

Result for the period during the quarter amounted to MSEK -5 (-3), which corresponds to earnings per share of MSEK -0.02 (-0.02).

Cash flow from operating activities during the quarter amounted to MSEK 8 (37).

A WORD FROM THE CEO

Positive development in Logistics despite losing Opel contract

During the quarter, one of Orio’s customers in the Logistics business area – PSA / Opel – has terminated a contract for logistics services from Orio with effect from 1 November 2018. As a consequence, 36 people were notified of redundancies in Nyköping. The trade-union negotiations were terminated on September 29, resulting in 22 people being made redundant due to lack of work. However, the underlying trend in logistics is positive and we see increased demand for our services as well as a growing customer base. The long-term venture in Logistics will be further intensified in coming periods.

The business area Parts reports a continued decline in net sales on Saab spare parts, especially in the US. This is partly explained by the fact that the recall campaign that gave a significant contribution to revenues in 2017 now no longer has the same positive impact. Net sales of Orio Parts continue to grow, but we still see challenges in the market and increased competition, which means that the growth rate does not meet the decline in Saab sales.

Market trends and results

Net sales for the third quarter of 2018 amounted to MSEK 148, which is a decrease by 21 percent compared to the corresponding quarter of the previous year. Adjusted for currency exchange rate effects, the decrease was 26 percent.

Gross profit decreased during the third quarter of 2018 by 16 percent compared to the corresponding quarter of the previous year and amounted to MSEK 59. Gross margin during the quarter was 40 percent, compared with 37 percent during the corresponding quarter of 2017.

For the third quarter of 2018, Orio reports an operating profit of MSEK -2 (1), and a net result of MSEK -5 (-3). During the quarter, cash flow from operating activities was MSEK 8 (37), and equity ratio at 30 September 2018 was 75 percent (77).

The business and our strategy

The group’s strategy is to expand product and service range within spare parts as well as within logistics, in parallel with broadening the customer base. Orio now offers, aside from the complete Saab Original assortment, a wide range of parts for 26 of the most common car makes in Sweden. From the outset of Orio’s existing structural capital, we have recently taken several important development steps to execute on the strategy and strengthen our competitiveness. Examples of these are the establishment of the two parts distribution centres in Europe, structural changes in the USA, the launch of a broader product range, the expansion of the dealership network and smarter customer solutions in digital platforms. We will continue with this development work, aiming at creating new values for existing and newly acceding customers of our network.

Nyköping, 31 October 2018
Jonas Tegström, CEO