Interim Report Rejlers AB January-March 2018
Restructuring strengthens the market position and earnings
• Net sales amounted to SEK 603.2 million (629.6)
• Organic sales growth excluding exchange rate fluctuations amounted to -1.7%
• EBITA (adjusted) amounted to SEK 20.7 million (33.0) and the adjusted EBITA margin amounted to 3.4% (5.2)
• Operating profit (EBIT) amounted to SEK 5.1 million (29.7) and the operating margin was 0.8% (4.7)
• Profit after tax was SEK 1.5 million (21.2)
• Earnings per share before and after dilution were SEK 0.07 (1.59)
• Cash flow from operating activities totalled SEK 70.7 million (-10.2)
• Total costs for restructuring amounted to SEK 13.4 million in the first quarter
and are estimated to amount to SEK 40 million in the second quarter of 2018
Statement by the President and CEO
With a strong belief in the future, I am pleased to present the interim report for the first quarter of 2018 as the new President and CEO. Rejlers has an established position in the Nordic market with a broad range of services and clear potential to strengthen both its market position and earnings in the future. And we have begun the work of creating a more efficient, profitable and sustainable Rejlers through changes mainly in the Swedish and Norwegian operations. In total, sales decreased slightly in the first quarter while profitability is weighed down by non-recurring costs related to structural changes. The restructuring will also substantially encumber the second quarter earnings. Cash flow was strong during the first quarter.
Change is needed to achieve our full potential. We need to become more efficient internally and at the same time more specialized to better be able to challenge and support our customers. We need to revise our strategy and strengthen our brand. It is exciting work we have ahead of us that will be done in stages. The first stage will be to increase operational efficiency.
New organization in Sweden and Norway
We have already begun the change work by introducing a new organizational model for the Swedish operations. An organization that focuses on industry specialization rather than geography. Our new organization will enter into effect on 1 May and consists of five divisions with a clear mandate: Energy, Buildings, Industry, Infrastructure and Telecom. The reorganization means that the previous matrix organization is disappearing and that the Swedish operations will have a smaller management group. We are now also initiating corresponding changes in the Norwegian operations, where Rejlers Embriq and Rejlers Norway are being combined into one operation.
Sales and profitability
In the first quarter of the financial year, net sales decreased by 4.1 per cent to SEK 603.2 million (629.6) partly as a result of calendar effects. Adjusted EBITA decreased to SEK 20.7 million (33.0) and was negatively impacted by calendar effects, fewer consultants and a continued low billing ratio. The on-going change work entails restructuring costs, which are charged to the quarter’s profit in an amount of SEK 13.4 million (-). The change work will continue in the second quarter and are estimated to be charged to profit on a magnitude of SEK 40 million. The costs mainly consist of provisions for property contracts where co-location has occurred, closure of loss-generating operations and the discontinuation of several management positions. The rationalization affects all three Rejlers countries and is estimated to provide annual savings of SEK 30 million with full effect as of 2019. The objective is to create an operationally efficient Rejlers with greater focus on the market, profitability and growth.
It is inspiring to be on-site – since 22 February – to take Rejlers into the future together with the company’s managers and employees. Rejlers has a 75-year history, nearly 2,000 qualified engineers, a growing partner network and high customer satisfaction. With such a strong platform, my assessment is that we can and will play an even more active role in the digital development of business and society. We will take a position as the “digital innovator”. It is in the border zone between customers, technology and our operations that the future’s digital winners will be created. The aim is to establish the industry’s most exciting workplace with a clear focus on both customer benefit and shareholder value.
Stockholm, May 2018 Viktor Svensson
For further information:
Viktor Svensson; President and CEO, tel. +46 (0)70 657 20 26, 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. 2,000 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 80 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 through the care of the contact person above for publication on 7 May 2018 at 4:00 p.m. 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.