WULFF GROUP PLC’S INTERIM REPORT FOR JANUARY 1 – SEPTEMBER 30, 2015

Operating result without non-recurring items increased in January-September

This is a summary of Wulff Group Plc’s interim report for January-September 2015. Wulff Group’s interim report for January-September 2015 is attached as a  PDF file to this stock exchange release and is also available on the company’s website at the address http://www.wulff.fi/en/wulff+group+plc/home/.

JANUARY – SEPTEMBER 2015 BRIEFLY

  • Net sales totalled EUR 50.2 million (EUR 53.8 million). Net sales decreased by 6.6 percentages from the previous year.
  • EBITDA without non-recurring items was EUR 1.4 million (EUR 0.03 million). EBITDA was EUR 1.2 million (EUR 0.03 million).
  • Operating profit (EBIT) without non-recurring items amounted to EUR 0.9 million (EUR -0.7 million). Operating profit (EBIT) without non-recurring items increased by EUR 1.6 million in the first half of the financial year. Operating profit (EBIT) was EUR -0.02 (EUR -0.7 million).
  • Earnings per share (EPS) without non-recurring items was EUR 0.09 (EUR -0.11). Earnings per share (EPS) was EUR -0.11 (-0.11).
  • Wulff Group sold its business and advertising gifts business in May 2015 to IDÉ House of Brands Finland Oy for the price of EUR 0.8 million. As a result of the sale, the Group booked non-recurring write-downs of EUR -0.9 million.

JULY – SEPTEMBER 2015 BRIEFLY

  • Net Sales totalled EUR 14.8 million (EUR 16.5 million) in the third quarter. Net Sales decreased by 10.3 percentages from the previous year.
  • EBITDA was EUR 0.6 million (EUR -0.1 million). EBITDA increased by EUR 0.7 million from the previous year. EBITDA did not include non-recurring items.
  • Operating profit (EBIT) was EUR 0.4 million (EUR -0.3 million) in the third quarter. Operating profit increased by EUR 0.7 million in the third quarter. Operating profit did not include non-recurring items.
  • Earnings per share (EPS) was EUR 0.03 (EUR -0.05).
January - September 2015 January – September 2014 July – September 2015 July – September 2014
Net sales, EUR million 50.2 53.8 14.8 16.5
Operating profit without non-recurring items, EUR million 0.9 -0.7 0.4 -0.3
Operating profit, EUR million -0.02 -0.7 0.4 -0.3
Profit/loss before taxes, EUR million -0.2 -1.0 0.3 -0.4
EPS, EUR -0.11 -0.11 0.03 -0.05
EPS without non-recurring items, EUR 0.09 -0.11 0.03 -0.05

WULFF GROUP’S CEO TOPI RUUSKA

Wulff Group’s CEO Topi Ruuska:

“I am pleased with the development of our profitability. We have enhanced our operation models even further and we can now serve our customers even more cost-effectively. We are renewing our strategy by focusing on our core strengths and investing in a multi-channel service model, customer orientation and sales know-how. Our customers appreciate the easiness of buying and saving both time and money. Wulff provides a suitable sales channel for all businesses: the non-exclusive webstore Wulff.fi, the Contract Customer model, a regional sales and service network and our stores. Digitalization also affects strongly the development of our operations – it is an increasingly important part of the competitiveness of companies now and in the future.

Companies’ business operations are affected by the ongoing economic downturn and changes in social structure. The demand for a part of Wulff’s products has diminished due to the fact that companies need less office supplies than before. For Wulff, changes in the market situation have always meant an opportunity to do things differently and stand out positively from its competitors. We react to changes fast and offer our customers solutions that are effective today and tomorrow. At the moment, for example, our product ranges are influenced by the increase in working from home and mobile work and a strong desire to invest in ergonomics – prevent and reduce sick leaves and increase the number of working years. I want to thank our customers for appreciating Wulff’s domestic option in these products and helping Finnish business by opting to buy domestic goods and services.”

GROUP’S NET SALES AND RESULT PERFORMANCE

In January-September 2015 net sales totalled EUR 50.2 million (EUR 53.8 million), and EUR 14.8 million (EUR 16.5 million in the third quarter. In January-September EBITDA was EUR 1.2 million (EUR 0.03 million) being 2.4 percentages (0.1 %) of net sales, and EUR 0.6 million (EUR -0.09 million) in the third quarter. The second quarter EBITDA was affected by non-recurring inventory write-downs of EUR 0.2 million caused by the business and advertising gifts business sale in May 2015. In January-September 2015 EBITDA without non-recurring items was EUR 1.4 million (EUR 0.03 million), and EUR 0.6 million (EUR -0.09 million) in the third quarter.

In January-September 2015 the operating profit (EBIT) amounted to EUR -0.02 million (EUR -0.72 million), and EUR 0.4 million (EUR -0.3 million) in the third quarter. The first half year period EBIT was affected by non-recurring inventory and fixed assets write-downs of EUR 0.2 million related to the business and advertising gifts business sale and a non-recurring goodwill write-down of EUR 0.7 million related to the business and advertising gifts business sale.

In January-September 2015 the operating profit (EBIT) without non-recurring items amounted to EUR 0.9 million (EUR -0.7 million). The operating profit (EBIT) without non-recurring items improved by EUR 1.6 million in January-September 2015, which was mainly achieved by systematically executing cost-saving measures and divesting unprofitable operations. Typically in the industry and in the Group, the annual profit is made in the last quarter of the year.

In January-September 2015 employee benefit expenses amounted to EUR 9.9 million (EUR 11.7 million), and EUR 2.7 million (EUR 3.3 million) in the third quarter. Other operating expenses amounted to EUR 6.0 million (EUR 7.0 million) in January-September 2015, and EUR 1.8 million (EUR 2.2 million) in the third quarter. The employee benefit and other operating expenses were still affected by the implemented successful cost-saving measures. To improve its profitability, the Wulff Group continues to examine its cost structure as part of ongoing reforms.

In January-September 2015 the financial income and expenses totalled (net) EUR -0.2 million (EUR -0.3 million) including interest expenses of EUR 0.2 million (EUR 0.2 million) and mainly currency-related other financial items (net) EUR 0.08 million (EUR -0.1 million). In the third quarter the financial income and expenses (net) totalled EUR -0.2 million (EUR -0.08 million).

In January-September 2015 the result before taxes was EUR -0.2 million (EUR -1.0 million), and EUR 0.3 million (EUR -0.4 million) in the third quarter. In January-September 2015 the result before taxes and non-recurring items was EUR 0.7 million (EUR -1.0 million), and EUR 0.3 million (EUR -0.4 million) in the third quarter.

In January-September 2015 the net profit was EUR -0.7 million (EUR -0.9 million), and EUR 0.2 million (EUR -0.4 million) in the third quarter. The net profit was impacted by a write down of deferred tax receivables of EUR 0.3 million in January-March 2015. In January-September 2015 the net profit without non-recurring items was EUR 0.4 million (EUR -0.9 million), and EUR 0.2 million (EUR -0.4 million) in the third quarter.

Earnings per share (EPS) was EUR -0.11 (EUR -0.11) in January-September 2015, and EUR 0.03 (EUR -0.05) in the third quarter. Earnings per share (EPS) without non-recurring items was EUR 0.09 (EUR -0.11) in January-September and EUR 0.03 (EUR -0.05) in the third quarter.

KEY FIGURES

III III I-III I-III I-IV
EUR 1000 2015 2014 2015 2014 2014
Net sales 14 796 16 502 50 235 53 792 74 262
Change in net sales, % -10,3 % -5,6 % -6,6 % -11,8 % -11,1 %
EBITDA 579 -92 1 212 29 2 096
EBITDA margin, % 3,9 % -0,6 % 2,4 % 0,1 % 2,8 %
Operating profit/loss 429 -335 -16 -722 1 109
Operating profit/loss margin, % 2,9 % -2,0 % -0,0 % -1,3 % 1,5 %
Profit/Loss before taxes 272 -412 -204 -1 039 478
Profit/Loss before taxes margin, % 1,8 % -2,5 % -0,4 % -1,9 % 0,6 %
Net profit/loss for the period attributable to equity holders of the parent company 172 -312 -714 -724 696
Net profit/loss for the period, % 1,2 % -1,9 % -1,4 % -1,3 % 0,9 %
Earnings per share, EUR (diluted = non-diluted) 0,03 -0,05 -0,11 -0,11 0,11
Return on equity (ROE), % 1,3 % -3,3 % -5,9 % -7,5 % 4,4 %
Return on investment (ROI), % 1,2 % -1,6 % -0,4 % -4,1 % 3,5 %
Equity-to-assets ratio at the end of period, % 44,7 % 36,5 % 44,7 % 36,5 % 39,5 %
Debt-to-equity ratio at the end of period 41,6 % 77,1 % 41,6 % 77,1 % 36,9 %
Equity per share at the end of period, EUR * 1,75 1,75 1,75 1,75 1,95
Net cash flow from operating activities -235 -485 -271 -2 668 -205
Investments in non-current assets 34 74 158 320 488
Investments in non-current assets, % of net sales 0,2 % 0,5 % 0,3 % 0,6 % 0,7 %
Treasury shares held by the Group at the end of period 79 000 79 000 79 000 79 000 79 000
Treasury shares, % of total share capital and votes 1,2 % 1,2 % 1,2 % 1,2 % 1,2 %
Number of total issued shares at the end of period 6 607 628 6 607 628 6 607 628 6 607 628 6 607 628
Personnel on average during the period 232 289 236 289 268
Personnel at the end of period 232 283 232 283 240

* Equity attributable to the equity holders of the parent company / Number of shares excluding the acquired own shares

RISKS AND UNCERTAINTIES IN THE NEAR FUTURE

The demand for office supplies is strongly affected by the general economic development. During the economic downturn, organizations’ personnel lay-offs and cost-saving initiatives affect the purchasing behavior of corporate customers. During uncertain economic periods, corporations may also minimize attending fairs. As the ongoing economic uncertainty continues, the cost-saving measures will have an effect on the ordering behavior of corporate customers and therefore Wulff must adapt to the developing market situation if needed.

Half of the Group’s net sales come from other than euro-currency countries. Fluctuation of the currencies affects the Group’s net result, however the effect of the fluctuation is expected to be moderate.

EVENTS AFTER THE REPORTING PERIOD

The Group had no significant events after the reporting period.

MARKET SITUATION AND FUTURE OUTLOOK

Wulff is the most significant Nordic player in its field. Wulff’s mission is to help its corporate customers to succeed in their own business by providing them with leading-edge products and services in a way best suited to them. The markets have been consolidating in the past few years and the Nordic markets are expected to consolidate in the future as well. Wulff is prepared to carry out new strategic acquisitions.

Wulff estimates the market situation to remain unchanged. Therefore it is important to continue to implement the cost structure and improve the efficiency of the operations. Wulff’s goal is to further improve the profitability of its businesses. Wulff estimates the operating profit (EBIT) without non-recurring items for 2015 to be positive.

In Vantaa on November 5, 2015

WULFF GROUP PLC

BOARD OF DIRECTORS

Further information:

Chairman of the Board of Directors Heikki Vienola

tel. +358 9 5259 0050 or mobile: +358 50 65 110

e-mail: heikki.vienola@wulff.fi

DISTRIBUTION

NASDAQ OMX Helsinki Oy

Key media

www.wulff-group.com

About Us

WULFF – A BETTER WORLD ONE WORKPLACE AT A TIME Wulff enables working in environments where companies and entrepreneurs operate. Already, people work a lot away from the office: digitalization enables telework and at the same time, mobile work creates new requirements for working environments. How to ensure that people can work effectively, ergonomically, environmentally friendly – and exactly like they want to? Wulff has the answers. We offer the industry’s most comprehensive product and service range that can help you create an office wherever you want it. What would you like? We offer our customers office supplies, facility management products, catering solutions, IT supplies, ergonomics, first aid, and innovative products for worksites. Customers can also acquire international exhibition services from Wulff. Check out our products and services at wulff.fi.

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