Interim report Rejlers AB January - June 2017
Norwegian business puts pressure on profitability
• Sales increased by 2 % to SEK 623.0 million (608.2)
• Organic sales growth excluding exchange rate fluctuations was 0 %
• EBITA (adjusted) amounted to SEK 1.7 million (29.2) and the adjusted EBITA margin amounted to 0.3 % (4.8)
• Operating profit/loss amounted to SEK -14.4 million (22.6) and the operating margin was -2.3 % (3.7).
• Profit/loss after tax was SEK -10.5 million (18.4)
• Earnings per share before and after dilution were SEK -0.89 (-1.39)
• Cash flow from operating activities totalled SEK -16.0 million (10.7)
January - June
• Sales increased by 7 % to SEK 1,253.0 million (1,167.4)
• Organic sales growth excluding exchange rate fluctuations amounted to 4 %
• EBITA (adjusted) amounted to SEK 34.7 million (32.3) and the adjusted EBITA margin amounted to 2.8 % (2.8)
• Operating profit/loss amounted to SEK 15.3 million (16.6) and the operating margin was 1.2 % (1.4).
• Profit after tax was SEK 10.7 million (12.9)
• Earnings per share before and after dilution were SEK 0.71 (0.93)
• Cash flow from operating activities totalled SEK -26.2 million (-2.6)
Statement by the President and CEO
The billing ratio increased in all segments during the second quarter, compared with both the first quarter and the previous year. However growth was marked by weak development for Rejlers Norway, fewer working days and continuing reorganisation of activities. Profits reduced compared with the corresponding quarter the previous year, but viewed over the first six months the profit position improved somewhat. Profit development in the quarter were considerably affected by SEK 12.1 million in restructuring costs, most of which are related to Rejlers Norway, as well as the quarter’s negative calendar effects. During the quarter, we initiated a programme of powerful measures for Rejlers Norway’s operations, so as to reduce the cost base and increase efficiency in current projects.
We show a sales increase of about 2 per cent. The growth in the second quarter of the year is a result of having fewer working days and the continuing reorganisation of activities, with less profitable areas being wound up. We see robust growth in Rejlers Finland, where market conditions now look brighter in a number of business areas. Rejlers Embriq increases sales from operating agreements, while growth in Rejlers Sweden was affected by previous years’ reorganisation of industrial activities. Development in Rejlers Norway has been weak, as a result of a generally low utilization and a low level of activity in a number of large projects.
Pressure on profits
Adjusted EBITA fell to SEK 1.7 million (29.2), which is mainly explained by continuing profitability problems for Rejlers Norway, and the calendar effect of having fewer working days during the quarter. In spite of the poorer profit position, it is pleasing that the ongoing reorganisation is resulting in a higher general level of efficiency in activities and that the billing ratio continued to grow in all segments during the quarter. Rejlers Sweden and Rejlers Finland improved operating profit for the first half-year compared to the same period previous year.
Measures in Norway
At the start of the quarter, Thomas Pettersen assumed responsibility for Rejlers’ entire Norwegian operation. Through this change we are creating both business and administrative synergies between the operations of Rejlers Norway and Rejlers Embriq. We have also initiated a powerful programme of measures to reduce the cost base and increase efficiency in current assignments. I am convinced that this will improve profitability at Rejlers Norway in the longer term.
Improved financial position
We now have a strong financial position following the new share issue and we are well equipped to continue the reorganisation work. Strategic initiatives including the area of energy are providing us with the right conditions to secure and further strengthen our market position in the Nordic region. The rights issue was completed during the second quarter and brought the company SEK 192.1 million. We have a negative cash flow from operating activities mainly due to losses in Rejlers Norway and the uneven cash flow in Rejler Embriq.
Good market conditions
Demand for our services remains good in all segments and we are continuously strengthening our position in the market. We are continuing the transformation into a more efficient organisation and operation with the goal of increasing the operating margin to 8 per cent over time at the same time that we achieve our growth target.
Stockholm, July 2017 Peter Rejler
For more information contact:
Peter Rejler, President and CEO tel. +46 (0)70-602 34 24, e-mail: firstname.lastname@example.org
Mikael Lingefelt, acting CFO tel. +46 (0)70-929 09 55, e-mail: email@example.com
Rejlers is one of the Nordic region’s largest technical consultants. Our 2,000 experts work with projects in the areas of construction and property, energy, industry and infrastructure. At Rejlers, you will meet specialist engineers with the knowledge, cutting edge expertise and energy to achieve results. We are still experiencing rapid growth and can now be found in 80 locations in Sweden, Finland and Norway. Rejlers had sales of SEK 2.3 billion in 2016 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 through the care of the contact persons above for publication on 19 July 2017 at 8:00 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.