Interim Report Rejlers AB January - June 2018
Positive development after completion of changes
• Net sales amounted to SEK 602.3 million (621.5)
• EBITA (adjusted) amounted to SEK 23.1 million (1.7) and the adjusted EBITA margin amounted to 3.8% (0.3)
• Operating profit (EBIT) amounted to SEK -15.4 million (-14.4) and the operating margin was -2.5% (-2.3)
• Profit after tax was SEK -16.2 million (-10.5)
• Earnings per share before and after dilution were SEK -0.93 (-0.89)
• Cash flow from operating activities totalled SEK -1.1 million (-16.0)
• The total cost of restructuring amounted to SEK 40.0 million (13.0)
January - June
• Net sales amounted to SEK 1,205.5 million (1,251.1)
• EBITA (adjusted) amounted to SEK 44.6 million (34.7) and the adjusted EBITA margin amounted to 3.7% (2.8)
• Operating profit (EBIT) amounted to SEK -10.3 million (15.3) and the operating margin was -0.9% (1.2)
• Profit after tax was SEK -14.7 million (10.7)
• Earnings per share before and after dilution were SEK -0.86 (0.71)
• Cash flow from operating activities totalled SEK 69.6 million (-26.2)
• The total cost of restructuring amounted to SEK 53.4 million (13.0)
Statement by the President and CEO
Rejlers’ second quarter has been marked by a high operational focus and structural changes. We have reorganised both the Swedish and the Norwegian operations in the form of a new organisation and streamlining by means of divestment and reducing the number of management positions. In total, sales decreased slightly, while profitability is weighed down by non-recurring costs related to this reorganisation. The underlying profitability has improved, thanks to the structural changes that have been made and strong development in the Finnish operation. Today, Rejlers has an established position in the Nordic market with a broad range and clear potential to strengthen both its market position and its earnings.
During the second quarter, we have taken new steps on the path of creating a more efficient, profitable and sustainable Rejlers. Earnings have been affected by restructuring costs totalling SEK 40 million in respect of provisions for lease contracts where colocation is being implemented, the disposal of unprofitable units in Sweden and Norway and a considerable reduction in the number of management positions. The rationalisation affects all three Rejlers countries and is estimated to provide annual savings of SEK 30 million with full effect as of 2019. A significant event during the quarter was the divestment of Rejlers Telecom AS. During the quarter we have also completed the key recruitments of CFO, Communications Director and Recruitment Manager.
New organisation in Sweden and Norway
The objective is to create an operationally efficient Rejlers with greater focus on the market, profitability and growth. We have therefore introduced a new organisation in both Sweden and Norway during the second quarter. The Swedish organisation now consists of the five divisions Energy, Buildings, Industry, Infrastructure and Telecom, with a clear mandate that gives greater focus on industry sector specialisation rather than geography. The reorganisation has gone according to plan and creates greater efficiency in the operation in that the matrix organisation is disappearing and the size of the Swedish management group is halved. During the quarter, we performed corresponding changes in the Norwegian operations, where Rejlers Embriq and Rejlers Norway have been combined into one operation. The Norwegian operation can now focus on the areas where we see the greatest potential for growth; Energy, Buildings, IT and Digitalisation Services. Finland delivered a satisfactory second quarter with good growth in both sales and profit.
Sales and profitability
In the company’s second quarter, net sales decreased by 3.1 per cent to SEK 602.3 million (621.5), as a consequence of disposal and closure of unprofitable operations. Adjusted EBITA increased to SEK 23.1 million (1.7) and benefitted from the positive effects of a higher billable hours ratio and the structural changes that have been made.
It has been an inspiration to have been able, together with the company’s managers and employees, to have set in motion during my first five months such a sweeping transformation that will take Rejlers into the future. Our aim is to establish the industry’s most attractive workplace with a clear focus on employees, customer benefit and shareholder value. Rejlers has a strong foundation, with 75 years of history, almost 2,000 qualified engineers, a growing network of partners and high customer satisfaction. With such a strong platform, my assessment is that we can and have the ability to play a more active role in the digital development of business and society. I can see that it is in the border zone between customers, technology and our operations that the future’s digital winners will be created.
Stockholm, July 2018 Viktor Svensson
For further information:
Viktor Svensson; President and CEO, tel. +46 (0)70 657 20 26, e-mail: email@example.com
Mikael Lingefelt; acting CFO, tel. +46 (0)70 929 09 55, e-mail: firstname.lastname@example.org
Rejlers is one of the Nordic region’s largest technical consultants. Two thousand experts who work on projects in Energy, Buildings, Industry, Infrastructure and Telecom. At Rejlers, you will meet specialist engineers with the knowledge, cutting edge expertise and energy to achieve results. We are still experiencing growth and can now be found in 75 locations in Sweden, Finland and Norway. Rejlers had sales of SEK 2.5 billion in 2017 and its class B share is listed on Nasdaq Stockholm.
The information in this interim report is such that Rejlers AB (publ) is obliged to publish under the EU Market Abuse Directive and the Swedish Securities Market Act. The information was submitted by the abovementioned contact person above for publication on 26 July 2018 at 08.00 CET. This report is also available in Swedish. The English version is a translation of the Swedish original. If there are any differences, the Swedish version takes precedence. The interim report has not been reviewed by the company’s auditor.