Yeah, ladies and gentlemen, welcome to the Nimbus audiocast teleconference Q1 2022. For the first part of this call, all participants will be in listen-only mode, and afterwards there will be a question and answer session. Today, I'm pleased to present CEO Jan-Erik Lindström. Speaker, please begin.
Okay, thank you. It has been a good start, as we say, on page one, despite the supply chain disturbances. Important to understand is that the quarter one is a small quarter for us, so together with the quarter four. For us it's important because that is in line with our ambition to actually grow the weaker quarters to get a better balance over the year and get less seasonality. This is a good step for us. If we switch to page three, please. I'll give you some highlights on the first quarter. We have done this sales increase by 46%. We had the EBITDA margin of 2.2%.
There again, it's important to when you follow us to actually then look upon us on a rolling 12 basis. If we look at the last 12 months, the figure is 10.8%, but Rasmus will talk more about that a little bit later. We have order book up now SEK 1.2 billion, roughly. That is actually an all-time high, a new all-time high, and of course we're very proud of that. Even if you then look at the order book, because we had had some delays during the quarter one for deliveries, but even if you deduct that, it's still an all-time high. That is important to bear in mind.
During the quarter, we have bought then a Norwegian dealer, Harald Andersen, located in a very good interesting boating district. I will actually come back to that a little bit later. As I've said in the beginning, the supply chain disturbances continues, more or less two years now. Again, it in a way you can say it's the new normal. It's a lot of people doing very good job in the team to actually handle this. We have handled it quite well then so far. The capacity increase well underway. Actually, it is so that we now have opened up the North American market again, so we will actually then take on more dealers.
We haven't been able to do that for a period of time now because we didn't have the right capacity. As I say there, the next step in North America then is initiated. It's both the capacity, but also to build up a proper organization. We had to put that on hold when the pandemic hit us early 2020. That was a good decision at that point, but now we need then to actually improve the organization in North America to be able to take care of the market in a good way. Also worth mentioning, even if it was after the first quarter, is that we have now launched our first sustainability report, and we did so late April, the twenty-eighth of April.
If we then switch the page, and I will then get back to Norway. Norway is a really interesting boating market of course. Actually, I think they are the world champions of owning boats per capita. We have done quite well during the years in Norway, and we know that they like our boats, but we hadn't really had the real focus. As we say, as a part of our strategy to buying dealers located in big boating districts, where we think then that our product portfolio can have success.
This is an important thing because if you look at the picture there inside the circle, you have more or less in value, you have more or less approximately 50% of the Norwegian market. This is a really strategic location, and we're of course looking forward to support them and to follow this progress in Norway. An important step for us. If we switch the page to five. A recap. I think that most of you have heard me say this and actually seen it, but maybe if it's a new listener, it can be good to know that we have a long history, founded in 1968. More or less already from the start, we begin to do international sales.
The international trading is you can say daily business for us, and it's important to know because our ambition is then to be a global player. We have a true House of Brands and this is then all of the brands is well known Scandinavian brands. This is Scandinavian House of Brands. Listed on Nasdaq February 2021. We bought then Marine Store at that time, the biggest dealer network in Sweden in May 2021. As I said before then we then started then our journey on in Norway in February this year with the acquisition of Harald Andersen. If we then switch the page to number six, a little bit about our operations. We have the same number of factories, of course. We have grown the direct employees.
We are now roughly slightly above 400 in the blue collars. We also then have some outsourced production units, and the biggest unit we have is actually in Poland, and that is an outsourced one. There you can have approximately around 200 external production people and blue collar people. In the middle there of this page, we talk about the scalable, and it's about scaling up and also scaling down. We talk a lot about to have as big part as possible as a variable cost. The variable cost is one thing, but it's also important then to actually then add the time frame.
We want to be fully variable, more or less fully variable on six-month time, because we need this six-month time to be proper if we now need to scale down, for example. Also then, of course, scale up, and that is more important today, maybe. We work with our production efficiency, and on the right side of this slide, you see the WTC 9 series, and you see three different models. They share the same hull, they share the same cabling and things like that. But for the customer, it's three different solutions, three different boats. This is the way we work then. We work with what you call a technical platform.
This is one technical platform, but we can work with it in a lot of different segments. If we just quick recap of the IPO process, this is still valid. I think it's important to mention we see the four fundamental drivers. One of them is, of course, the overall wealth is increasing, actually 2.5 times, more money in our pockets if you compare year 2000 with year 2021. The wealth is increasing. We have also an increased popularity of staycation, and this is important. This is the outdoor trend that is behind it, but that started well before the pandemic, even if the pandemic in some places in the world accelerated this trend. We have an aging boat fleet.
You can say roughly around 45% of the Swedish boat fleet, as an example, is older than 20 years. That's also important thing to have bear in mind now. We have a technical development that is actually increasing in speed during the recent years. If we switch page again. We will talk about the order book. In the order book, you only find the planned production. There is in fact. That is not an order book, but we have orders that will be put into the order book when we can put them into the production schedule and when the prepayment is paid on. This is all prepaid in this short term.
If you look at that, you can see then the all-time high figure I talked about before, the quarter one 2022. If we then compare it then with the quarter one in year 2021, we actually see that we have an increase of 45% in the order book. The prepayment amounted then to 18%. Our target is 20. We are on the way. It's a good figure, so to say. It can never be 20 as a certain point. Of course, it can happen. Since we have the prepayment is divided in two installments, therefore we can never as an average have 20%.
Worth mention is that the order book, the boat order book from Harald Andersen amounts to SEK 49 million. Even then, again, if we deduct that and the delays we have in the deliveries of the quarter one, we actually have this all-time high regardless of that. I will leave the word to Rasmus, who will take the next slide.
Thank you, Jan-Erik. Now we flip to page number 10, please. We see a strong sales development of 80% in Europe and 52% on other markets compared with last year's first quarter. Also the Nordics performs well with the +61%, but good then to have in mind is that this has been affected by the Harald Andersen acquisition with SEK 70 million, as Jan-Erik mentioned. Excluding the acquisitions, the increase was 26%, which is still a very good figure. Smallest increase is seen in Sweden with +4%. Sweden has been affected by negative timing disturbances in terms of both the ice situation in Stockholm area and the delays in the supply chain.
This has led to some delayed deliveries in the quarter, which is expected to even out in the second quarter. Page 11, please. The sales in the quarter amounted to SEK 287 million, compared with SEK 196 million last year, which is an increase by 46%. Sales through own held dealers was 26%, which is slightly lower than last year's 29%. This effect is mainly caused by the negative timing disturbances in Sweden that I mentioned before in the quarter. The LTM sales amounted to SEK 1,546 million, which is an increase by 6% compared with the full year 2021 figure. The organic growth was 44% in the quarter. Page 12, please.
The first quarter is a small quarter for us in terms of sales, which affects the EBITDA results since our OPEX is fairly fixed on a 12-month basis. This effect was also seen in the fourth quarter. Compared with last year, we have also strengthened the organization, which has affected the OPEX level. In a small quarter like this, the first one, this puts some extra pressure on the EBITDA margin, which is natural. The EBITDA result in the quarter amounted to SEK 6.2 million compared with SEK 5.6 million last year. The EBITDA margin was 2.9% compared with the 2.2% last year. The gross margin is fairly stable and was 15% compared with 15.1% last year.
The margin is affected by the lower shares of sales of product with double margins. Both Marine Store and Harald Andersen have so far only sold external brands. Here we see a possibility for future to add our own brands as a complement to their present portfolios. Page 13, please. The net working capital in the quarter increased to SEK 258 million compared with SEK 113 million in the last quarter and SEK 210 million last year. The increase is expected due to the seasonality effects, but good to have in mind is that the supply chain disturbances has temporarily also built up the inventory in the quarter. This is an effect that is expected to also even out in the second quarter.
In the second quarter also, payment of the Harald Andersen shares will be made with about SEK 90 million, and this will have impact on the cash flow, of course. Net working capital in relation to last twelve months sales was 16.7% compared with 19.4% last year, which is a good improvement. Page 14, please. This slide is the same as you have seen before. It's to remind you about the financial targets and to compare with our actual figures. Firstly, we say that we should have an organic growth of +10% over business cycle, including acquisitions of dealers but not brands. For 2021, the growth was 59%, and in the first quarter it is 6% compared with the full year 2021 figure.
The EBITDA margin should reach 10% in the medium term, and our actual figure on LTM basis is 10.8%. We should have no senior debts except for real estate-related debts. Today we only have real estate-related debts, together with the check limit, which is not in use. We have a dividend policy to pay out 30% of our net earnings, taking into account financial position, cash flow, and growth opportunities of the company. For 2021, the board has decided to propose a dividend of SEK 1.50 per share, which is 22% of the net result. I hand over to you, Jan-Erik, again.
Thank you. If we then switch the page, and we have then in focus then going forward. As I said before, continued expansion in North America, important for us. We have worked hard with it for the last two years, and we will of course continue that work. I think it's proper to say that even then, if this problem still is there, we see that the picture is brightening up. It is more predictable today. Even if we are not happy, it's more predictable, and that is very important to mention. So we can see some light in the tunnel in that respect. We have talked a lot about the after-market sales. It's important for us.
We still have single digit, if you look at the revenue streams, it's still a single digit number. It is growing, we have started the journey, and of course, we will then continue this focus because it is an interesting part of the revenue streams. As a product owner, we should of course have control over our own aftermarket. Production efficiency, if you look at the last years now, more or less every boat we have built have taken a little bit longer than it's planned because of these disturbances we have talked about. That's also a thing that we will then focus more on now to get back the efficiency in our production, where it used to be.
Product development, we talk about four to five launches per year, and this will also then be a very interesting year, and we have a couple of interesting launches later on this year. Of course, we will make this happen and to have the right resources to actually achieve our targets there. Also, the journey continues even from a sustainability perspective. We have done that for many years. 2009, we had the launch of the E-Power Concept, and that is still valid, still lives, and we will continue that work. Also there, we can see a lot of possibilities. That was all for us for now, and then I think we leave the word to you, Gunilla.
Yes. When you look at the ownership, it's very stable. There's been a minor shift out of minority shareholders in R12, but no sale, which was press released earlier. OP Funds, the Finnish fund manager, has increased somewhat, but otherwise very stable. With this, we open up for questions.
Thank you. We will now begin the question and answer session. If you have a question for our speakers, please press zero and one on your telephone keypad. First question comes from Victor Hansen, Nordea. The line is now open. Please go ahead.
Thank you. Hi, Jan-Erik Lindström and Rasmus. A couple of questions from my side. I'll begin with, I'm wondering about, if you could provide some clarity on the reason behind your NA orders rising 150%, if this is mainly due to how you allocated your boat shipments, or how should we view this?
You said North America, the increase of the
Yes.
Order intake in North America? Yes.
Yes.
This is then actually it's a couple of different things. Of course, the dealers that we took on during the autumn have then started to sell boats, of course, and this is good. You should also remember that it's still quite low number where we start from, so to say. You get an high impact still, even if the number of orders isn't that big, but it's important. It is this new dealers that is starting, but also the present dealers is actually then increasing then the number of sales. It's two different ways, so to say.
All right. You've taken several actions to-
I should say that.
Yeah.
It's still only Nimbus brand we're talking about. We haven't started to sell the other brands yet then. That's also part of the next steps that we were talking about. This is the Nimbus brand.
Yeah. Understood. You've taken several actions to expand your capacity, both in-house and external. Perhaps if you could enlighten us, how much you've added now and what's left to come online, compared to the beginning of 2021. Basically here, what's your capacity potential now, and what was it in early 2021?
As I said, and Rasmus Alvemyr said that, it's the Nimbus brand that is increasing in North America. What we have done, it's a ramp up. We have a new building in Poland, where we actually then produce only the Nimbus brand for the moment. That is a big and important step for us. You can say that we doubled the capacity, but then you have to compare with 2020. We had a ramp up, pandemic and other things, as you know, that did this ramp up a little bit slower than we had planned, of course.
Now we are up and running, and now we then have the possibility then to increase the number of boats in North America. It's more located there than. Besides that, we have ongoing building projects in both Sweden and actually Finland, but that is still to come, so to say. That will be more later on. At the same time, we have increased, for example, one line more in Finland during 2021. We'll in this certain factory. It increases the capacity roughly 20%.
Okay. Understood. Are you concerned that your backlog of orders here is fixed on a lower price level than what you would have normally due to the input materials rising in price?
That is a very good question, and that is a question we follow really closely. What we do when we're selling, if it's in we can say six months timeline, then it's not a problem really because doesn't happen that quick. If it's a longer period of time, then we have in our contracts with the dealers that the price list that is valid at that time that will be the price for the boat then. We're taking care of that already at the when you sign the order, so to say.
Okay. The pricing can be adjusted. How easy would you say that it is to raise prices now compared to last year's? Maybe since this consumer is having some problems here, maybe it's harder to raise your prices.
Yeah. Also a very good question. Actually, we haven't really seen any reaction on that because the customer understands. They read the papers. They follow the news. It seems like they understand the picture. Even if it's a lot of talk about the increase of aluminum, for example, that part is 25% of the cost in an aluminum boat, so it will not hit the total boat that severe, so to say. Still, we need to increase the prices, absolutely, but it's not that high level that you get the feeling of if you follow the news. So far, really no reactions. It's important, of course, to follow very, very closely.
Very, very closely. Good, good question.
Yeah. All right. On your financial expenses here, they increased quite a bit compared to Q4. Is there anything else here other than interest payments, that's impacted this?
We have costs from the acquisition of Harald Andersen, of course, but also the organization has been expanded a bit. We have strengthened our organization, which is part of our plan. This is a planned step that we have taken, so to say.
All right. Are these costs really in your financial expenses, like below EBIT? If you follow.
It, it-
You ask about finance.
Like the bigger organization shouldn't be below.
Aha, okay. I thought I was referring to our-
Rasmus was thinking notebooks.
I was referring to.
Yeah, yeah.
-to the...
Yeah, I follow.
Okay. Yes, in the financials, we have currency effects that has had impact, if that's what you're meaning.
Yeah. Do you know how large that was?
It was about SEK 1.9 million.
Okay. Got it. Yeah. Thanks. A final question here from me. If you could give some details on your organizational expansion in North America that you mentioned here, Jan-Erik, maybe in terms of head count or however you want to look at it.
So far, we have organized, actually from Sweden then, if you look from House of Brands perspective, from a Nimbus Group perspective. What we're doing now is that we are starting to, we have the company already there, but now we're starting to fill it with people. We are looking at four people to begin with, technicians and things like that, to be able then to support the dealer network to begin with technical matters, because it's a long way to U.S., as we know. But also with sales forces, to actually then work with the dealers that are interested to sell our products so we can get a good flow on it.
Three to four people to begin with, that is what we're talking about.
Okay. Thank you. That's all for me.
The next question comes from Gustav Österberg, Carnegie. Your line is now open. Please go ahead.
Thank you, operator, and good morning, Jan-Erik, Rasmus, and Gunilla. First a question on the development in North America. You were saying that you're presently only there with the Nimbus brands. I'm just curious to know, is the majority of the increase made up of the WTC series, or is it sort of very present with a broader range of Nimbus lines there? Can you give some more color on that?
Of course, the WTC series has been a great success, not only in North America. In North America, it's interesting because there we also have started to sell quite a lot of the old you can say Nimbus the Coupé range then. It's a mix. It's not only WTC, it's a mix, which is good then, of course.
Okay. Thank you. Just to sort of understand the full increase, how much is made up of dealers that you signed two years ago, and how much is made up of dealers that you signed this autumn? I mean, because I would guess that sort of initially the dealers order a small amount, but after a couple of years, if they see sales increasing, they step up. Are we seeing sort of the effect of step up from old dealers, or is it driven by addition of new dealers there?
It's more on the old dealers because they have, so to say, find the market in a good and proper way. The new ones is still suffering, even if we now, as I say, we are in balance now, or at least in a better way with the production capacity. We still haven't been able to provide them with the right number of boats at this point. It's more from, actually, more or less you can say it's a few dealers that have interesting markets, both in districts.
Got it. Thanks. Just to sort of circle back on sort of your initial expectations for these dealers, if we go back to sort of a year ago, are they delivering according to plan or are they delivering above or below?
No.
In terms of volumes.
Absolutely. I should say more according to plan. That is also the reason we're taking the next step. If we go back to the IPO process, we talked about roughly then, depending on size, on boats and things, but roughly 150 boats shipped to U.S., then we needed to take the next step, so to say. As we're now saying here that we are initiating the next step. We're starting with the organization, but we also have other things then to look upon during the year here. That is according to plan. We are absolutely happy with that.
Can I mention also that we have a limited number of boats in the previous year that has affected their possibility to expand also.
Yeah.
The possibility has actually been higher than what they have been able to sell.
Yeah. Got it. Thanks. This next step, does that sort of include the moving, sort of, towards a local production plant in the US or what does it mean more concretely?
Well, it is a part of the master plan, but it doesn't need to be done. We are not in a hurry, so to say. We need to find the right partners and things like that. Of course, we have started to look upon that question. We started a bit earlier in fact than. That is a part of the master plan, yes.
Okay. Thank you. Just to follow up, you mentioned sort of briefly in the report about sort of a slower spring season than normal in Sweden and some late deliveries and component issues. I mean, is that a smaller effect? Have you quantified that? Is that sort of something we should keep in mind for the reversal on the positive side in Q2, or is it smaller in size?
It's a good question. We have had this, you can say this, disturbances in the supply chain now for more than two years. We have, you can say every quarter, a number of boats that were planned to be delivered a bit earlier. What we see now, and that is a coincidence, nothing more, but we see that in quarter one, we have more boats waiting for something as planned. They will be delivered more or less, you can say, globally, but a certain number of them should have landed in the Nordic countries and maybe especially in Sweden. That affects of course the sales figures, and that will then show up in quarter two.
We're talking about roughly 20 boats. Then you can
Yeah. That's good. That's enough. I'm just trying to get a sort of quantification of the impact and that's good.
The ice situation is quite. It's more or less maybe funny to talk about that, but that is a fact. Depending on how long we will have ice in the Stockholm region, in the harbors then of course also affecting the quarter one. That could differ from year to year. We had a slightly longer ice period this year, and that has affected then deliveries from the dealers already from us rather than from us as a boat builder delivered boats. That is also then something to bear in mind.
Got it. Thanks.
Also that many boats were intended to be delivered to our own dealers at this time of year, then this puts extra pressure of course on our margin since this is, it was intended to be a double margin sales also.
Now you have the full picture.
You now have the full picture.
Yeah. I got it. Got it. Thank you very much. That's good. I mean, the overall impact sort of on H1 is then to be low, right? Because those orders are coming in Q2, those deliveries are coming in Q3 instead, right?
Yep. That's correct.
Yeah. Just a final question, given that sort of, it seems like production, finding production slots is the main bottleneck for sort of converting the non-reported order book into a reported one, sort of.
Are you working any differently now compared to a year ago in finding ways to sort of expand capacity within your current footprint?
Yes, we work continuously with that, of course. That's a part of the daily business. Again, these disturbances in the supply chain take a lot of efforts. I would like, of course, to see that we have finally, so to say, prolonged the production schedule. It's easy to say, but we are on it and we have started the journey, but we're not there yet. We still struggle with that. It's also one other thing important because it's easy to say or to see it maybe as the only question in this. We also have the fact that, as I said, we launched a couple of new models.
There, there's also a thing when you launch a new model, then you don't open up the order book until a certain point in this project, and we haven't reached that point in a couple of these launches. It's also important, though. That's normal business, but it's also important to bear in mind. It's not only the fact that we cannot prolong our production schedule on the current models.
Okay. Yeah, I got it, and that's a good color. Well, thank you very much, Jan-Erik, Rasmus and Gunilla. That's all questions for me.
Thank you.
Thank you.
Next question comes from Johan Dyrstad from Danske Bank. The line is now open. Please go ahead.
Yes, thanks. Good morning. Thanks for taking my questions. Just a few brief questions. Firstly, can you say anything regarding sort of average price increases on a sort of per unit basis for the season 2022 versus 2021? I appreciate, you know, it's difficult to say exactly, but is it 2%, 5%, 10%? Can you give any color there?
You can say, unfortunately, I don't have the updated figure, but a little bit historical figures then we are talking about 2%-4% from a component point of view then. Then we of course have some salary increases in part of the world, but at the same time, we have the currency exchange effect, so to say, that levels out that in a way. I think it's fair to say that we are around 3%-4%.
Yeah. So, so three to four percent-
At the mo-
For Nimbus offering to the market, 2022 versus 2021 on a sort of per unit basis. Is that your price increase?
The cost increase.
The question was on price, if you can give any color there.
Okay. Well, it's in the same neighborhood. We are
Okay
Succeeding in transporting the price increase.
Got you.
In some models, it's 5%, some models it's 3.8%, and et cetera. But as an average
That's very useful. Thanks so much. On the order book, I mean, it represents, what is it, nine months of sales, whatever. If you look on it, on that part of your sales that are sold on orders, i.e., excluding what goes to inventories among your dealers, can you talk about the duration in that order book? Is it, I mean, it should be more, I guess, than the nine months. How long is it? Is it one and a half years, two years, or less than that?
I would say that the present situation is that the dealers don't have much inventory themselves. So, the selling through is that figure is very high. So, what you see in our order book is actually most of it is actually end customer sold.
Basically, the question I'm asking is that SEK 1.2 billion in the order book, when was that on average priced? Was it in-
Okay.
Yeah.
We don't have any really exact figure on that.
If we're thinking about the question you're really asking, so to say, it's important to understand that. The deal with the dealer is that, if he's selling a boat in 2020. Well, we took the order in 2021, and he's selling it in 2022. It's the 2022 price list that is valid at that time.
When just so to get this correctly, I guess it's very important for the investment case. When you as a consumer sign up for purchasing a boat through a dealer in 2021, you're giving sort of a carte blanche for price increases. Is that the way we should view it?
Yes. Yes. Of course, we, since it's a sensitive question, you have to treat it very, very careful, of course. That's the way we look at it.
Yeah, no. Okay. The down payment that I make when I purchase the boat, I don't know what the final bill will be exactly. That's, you know, pretty much the conclusion, I guess.
No. You know it when you put the order, so to say, because it's important then, of course, to make that clear for the customer that price may be affected then of the cost increases and things like that.
Yeah. Is there any interval that you have to dictate with the end user here of potential price increase, or is that fully flexible from your point of view?
A very detailed question, but of course.
Yeah
There are dealers that call me and ask if they can put up a frame, so to say then.
Yeah.
That happens if it's a bigger boat, for example, then you know, we have to understand it's a lot of money. It happens, but it's not frequent. It happens that we put on a maximum 5%, for example. It may end up in 3.8%, and then it's 3.8% that is valid, of course.
Yeah.
That's with the rules, so to say, on the pricing.
Just finally on the traffic among the distributors which you own, what are the latest signals there in terms of the sort of consumer interest at the moment in Marine Store or what have you?
The interest is still high, and we follow that carefully, both how much visitors is on the internet, but also then of course in the showrooms. The interest is absolutely high, no doubt. It would be strange if, I mean, we all are hesitating a bit where we want to know, okay, what will happen in the future, and we're searching information and things like that. That, of course, is a topic that they are talking about, no doubt.
Okay.
The interest is very high.
Yeah. Just a final question. If you compare the first quarter compared to the second quarter, from just a seasonal pattern in Nimbus, are the shipments in the first quarter more to sort of dealers, I mean, non-order book shipments, and you have more sort of order book heavy shipments in Q2? Is that fair understanding or is that incorrect?
It's the old picture, you can say. The understanding in a way you can say it's correct, but it's not valid today. Exactly as Rasmus said, it's the order book is end user sold, so to say. It's more where they are located in the world.
Okay. Thank you so much.
It's more delivered to markets that actually is open during this period, quarter one.
Okay. Understand.
For example.
All right. Super. Thanks.
Yep. Thank you.
There are no further questions via the telephone lines. I hand back to you.
Okay. I just want to kindly remind you that we have our AGM on May 18th, so in Täby outside Stockholm. Very welcome to that. Our Q2 report is due on July 19th. Thank you so much, and thank you, Jan-Erik and Rasmus.
Okay. Thank you.
Thank you.