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Karl Kristian   

Comments by CEO - Karl Kristian Bergman Jensen

2016-10-31

We had an excellent 3rd quarter. The organic growth in local sales exceeded 15 percent. The execution of our strategy was effective and mainly due to increased marketing efforts and product innovations we reached record sales and record earnings per share.

For the first nine month of the year we had a growth of more than seven percent in local currencies. Converted to Swedish kroner sales grew five percent the first nine months. It is particularly in Canada, Denmark, Germany, Sweden and USA that we reached significant growth. For different reasons we experienced a decrease in sales this year in the Baltic’s, Norway, Italy and the UK. However, Norway and the UK was already back on track in the third quarter where it had great growth again. Actions have been taken to turn Italy and the Baltic’s around and bring them back on a sound growth track. We expect to see the result of this in 2017.

Our gross margin is still a few percent below target and we are working hard to recover from higher manufacturing costs earlier this year. We managed to bring the gross margin up to 65.2 percent for the first nine months. Our total selling and administration costs increased by six percent from January to September. The higher cost is a reflection of higher marketing efforts and higher cost of personnel. The number og employees for the first nine months increased from 41 to 45 persons. We increased personnel to help us grow our assortment and geographical presence the coming years.

In the quarter we made an EBITDA margin of close to nine percent bringing the nine months EBITDA margin up to 5,4 percent. This is still not satisfactory but we are convinced that we will improve it further in the near future. Depreciations and financial costs were significantly reduced the first nine months of the year resulting in a nine month record profit after tax of 9.3 million SEK. The return on equity amounted to nearly 22 percent for the first nine months.

As planned we managed to reduce our inventory from earlier this year so the total of raw material and finished goods inventory now amounts to 51 million SEK equal to 170 days of inventory.

During the quarter we have been very active in building local relations in the markets where we operate. This include retailer staff presentations and exhibitions at national health and pharmacy shows. For the first time also in ASIA at the Natural Products Hong Kong exhibition. In Scandinavia we introduced the first products in our Sports Nutrition range targeted people who exercise more then 3 times weekly and need support for optimal performance and restitution. The herbal Sports Nutrition supplements are the first of it’s kind in the market. The first reactions from the trade has been very positive.

In the coming period we will continue to focus on growth in sales, improvement of our gross margins while we keep administration costs down. We are all dedicated and fully committed to deliver excellent results and I am looking to the future with great enthusiasm and joy.

 

Karl Kristian Bergman Jensen, CEO
New Nordic Healthbrands AB
Södra Förstadsgatan 3 C
SE-211 43 Malmö
Sweden