Wulff Group Plc’s Financial Statements Release January 1–December 31, 2020
FINANCIAL STATEMENTS RELEASE 22.2.2021 at 10 A.M.
This is a summary of Wulff Group Plc’s Financial Statements Release January 1–December 31, 2020. The complete report is attached to this stock exchange release as a pdf-file. The report is also available at the website www.wulff.fi.
Excellent result from the sales company and a proposal for a growing dividend
1.10.–31.12.2020 BRIEFLY
- Net sales totalled EUR 15.3 million (15.1), increased by 1.5%
- EBITDA and comparable EBITDA were EUR 1.5 million (1.1), 10.0% of net sales (7.6)
- Operating profit (EBIT) and comparable operating profit (EBIT) were EUR 1.2 million (0.8)
- Earnings per share and comparable earnings per share (EPS) were EUR 0.14 (0.09)
1.1.–31.12.2020 BRIEFLY
- Net sales totalled EUR 57.5 million (56.3), increased by 2.1% (0.8)
- EBITDA was EUR 5.2 million (3.1), 9.0% of net sales (5.4) and comparable EBITDA was EUR 5.2 million (3.2), 9.0% of net sales (5.7)
- Operating profit (EBIT) was EUR 3.5 million (1.6) and comparable operating profit (EBIT) was EUR 3.5 million (1.7). Comparable operating profit (EBIT) grew 109.9% (11.9)
- Earnings per share (EPS) were EUR 0.32 (0.15) and comparable earnings per share were EUR 0.32 (0.17)
- Equity-to-assets ratio was 41.9 % (39.2)
- The Board proposes to the Annual General Meeting to be held on April 8, 2021 that a dividend of EUR 0.12 per share to be paid
- Wulff estimates that the net sales will grow from 2020 (EUR 57.5 million) and the comparable operating profit of 2021 will remain at a good level in 2021.
WULFF GROUP PLC’S CEO ELINA PIENIMÄKI
“Year 2020 was one of the most special – and finest – in Wulff’s 130-year history. We managed to grow profitably and make an excellent result in 2020. In the exceptional circumstances, the nature of the culture and sales community built with over 100 years of work, was tested. I am very grateful and appreciatitive of our personnel, customers, and partners. The market and operational environment changed rapidly. We adapted, anticipated, and acted and trusted our strategy to make the world a better place, one workplace at a time. Our customers trusted that we are the right partner to ensure safe work environments and take care of proficient workplace product service, even in exceptional circumstances. The quality of both the customer and employee experience developed positively in 2020: Wulff was rated the best in its field according to an external independent survey conducted in September-October 2020, and the Group's personnel survey said that satisfaction with Wulff as an employer was increased. We have updated our strategy to be even more responsible according to our customers’ and personnels’ wishes. As a responsible, local, and multi-channel company we are a suitable partner by bouth our values and service methods to a continuously increasing number of companies. When this is combined with the best sales expertise in Nordic countries, and an active new customer acquisition, and international network of partners, growth is possible even in demanding times.”
GROUP’S NET SALES AND RESULT PERFORMANCE
In January-December 2020 net sales totalled EUR 57.5 million (56.3), and EUR 15.3 (15.1) million in the final quarter. Net sales increased by 2.1% (0.8) during the whole financial year and 1.5% (1.7) in the final quarter. Due to the development of the product portfolio and the sales of hygiene, cleaning and protective products nets sales increased during the whole financial year and in the final quarter even though due to restrictions on traveling and gathering international fair events were mostly cancelled or postponed and the sales of printing solutions decreased.
In January-December 2020 the gross margin amounted to EUR 20.7 million (19.8) being 36.1% (35.2), and EUR 5.3 million (5.5) in the final quarter being 34.9% (36.3). Sales of hygiene, cleaning, and protective products as well as IT and remote workplace products to current and new customers increased the gross margin for the whole financial year and the final quarter. The gross margin for the final quarter decreased from comparison period due to cancelled fair events. The gross margin for the final quarter was affected by changes in market price and demand in hygiene, cleaning, and protective products. Due to the market change, a write-down provision of EUR 0.4 million was made for slow-moving products, of which EUR 0.2 million was accounted for in the result in the last quarter of the year.
In January-December 2020 employee benefit expenses amounted to EUR 11.6 million (11.9), 20.1% (21.2) of net sales and EUR 2.8 million (3.2), 18.3% (20.9) of net sales in the fourth quarter. In the exceptional circumstances the operations were adjusted by temporarily laying off personnel in the operations, where the coronavirus situation affected due to restriction on traveling and gathering, diminishing the demand a lot. This decreased the Group’s salary expenses by more than EUR 1.0 million during the whole financial year of which EUR 0.8 million were actualized during the second quarter. All segments focused on selling hygiene, protective and cleaning products. The Group´s Expertise Sales segment grew rapidly, which increased the salary expenses for the whole financial year. The Contract Customers segment and its back-office operations were reorganized and streamlined. There were fewer employees than in the comparison period. Due to reorganization and continued lay offs in the fair services personnel costs decreased in the final quarter.
Other operating expenses were to EUR 4.6 million (5.0) in January-December 2020 being 8.0% (9.0) of net sales and respectively EUR 1.4 million (1.2) in the fourth quarter, being 9.3% (8.2) of net sales. other operating expenses decreased for the whole financial year among other things, due to less travel. Because of the continued restrictions the credit loss provision was increased by EUR 0.1 million for possibly increasing bankruptcy proceedings. Wulff is constantly developing its operations to be more sustainable and cost-efficient. That is why the company has, for example, invested in energy production with its own solar system at its premises in Kilo, Espoo.
There were no items affecting the comparability in the reporting period 2020. In September 2019 Wulff moved to its own premises in Kilo, Espoo, Finland. The relocation arrangements resulted in additional operating expenses of EUR 0.1 million and employee costs of EUR 0.1 million. The relocation arrangements have presented as items affecting comparability in 2019, which impact has been recognised in EBITDA, operating profit (EBIT) and earnings per share (EPS).
In January-December 2020 EBITDA amounted to EUR 5.2 million (3.1), being 9.0% (5.4) of net sales, and EUR 1.5 million (1.1) in the fourth quarter, being 10.0% (7.6) of net sales.
The operating profit (EBIT) amounted to EUR 3.5 million (1.6), being 6.2% (2.8) of net sales and respectively EUR 1.2 million (0.8), 7.5% (5.1) in the fourth quarter. The comparable operating profit (EBIT) for the whole year amounted to EUR 3.5 million (1.7), being 6.2% (3.0) of net sales. Comparable operating profit (EBIT) grew 109.9% (11.9) in January-December 2020.
In January-December 2020 the financial income and expenses totalled (net) EUR -0.4 million (-0.4) including interest expenses of EUR -0.2 million (-0.2) and mainly currency-related other financial items and bank expenses (net) EUR -0.2 million (-0.2). In the fourth quarter, the financial income and expenses (net) totalled EUR 0.1 million (-0.1) due to valuation of financial items.
In January-December 2020 the result before taxes was EUR 3.1 million (1.2), and EUR 1.2 million (0.7) in the fourth quarter. The comparable result before taxes for the financial year was EUR 3.1 million (1.3).
The net profit was EUR 2.5 million (1.0) in January-December 2020 and in the fourth quarter EUR 1.0 million (0.6). The comparable result was EUR 2.5 million (1.2) in January-December 2020.
Earnings per share (EPS) were EUR 0.32 (0.15) in January-December 2020, and EUR 0.14 (0.09) in the fourth quarter. Comparable earnings per share (EPS) were EUR 0.32 (0.17) in January-December 2020.
KEY FIGURES
| IV | IV | I-IV | I-IV | |
| EUR 1000 | 2020 | 2019 | 2020 | 2019 |
| Net sales | 15 341 | 15 081 | 57 541 | 56 344 |
| Change in net sales, % | 1.5% | 1.7% | 2.1% | 0.8% |
| Gross profit | 5 345 | 5 477 | 20 748 | 19 825 |
| Gross profit, % | 34.9% | 36.3% | 36.1% | 35.2% |
| EBITDA | 1 528 | 1 148 | 5 204 | 3 067 |
| EBITDA margin, % | 10.0% | 7.6% | 9.0% | 5.4% |
| Operating profit/loss | 1 150 | 763 | 3 541 | 1 570 |
| Operating profit/loss margin, % | 7.5% | 5.1% | 6.2% | 2.8% |
| Profit/Loss before taxes | 1 201 | 703 | 3 101 | 1 194 |
| Profit/Loss before taxes margin, % | 7.8% | 4.7% | 5.4% | 2.1% |
| Net profit/loss for the period attributable to equityholders of the parent company | 914 | 605 | 2 174 | 1 039 |
| Net profit/loss for the period, % | 6.0% | 4.0% | 3.8% | 1.8% |
| Earnings per share, EUR (diluted = non-diluted) | 0.14 | 0.09 | 0.32 | 0.15 |
| Return on equity (ROE), % | 7.0% | 4.9% | 19.1% | 8.5% |
| Return on investment (ROI), % | 5.7% | 4.5% | 15.2% | 7.9% |
| Equity-to-assets ratio at the end of period, % | 41.9% | 39.2% | 41.9% | 39.2% |
| Debt-to-equity ratio at the end of period | 57.3% | 66.2% | 57.3% | 66.2% |
| Equity per share at the end of period, EUR * | 2.00 | 1.76 | 2.00 | 1.76 |
| Investments in non-current assets | 331 | 290 | 719 | 7 359 |
| Investments in non-current assets, % of net sales | 2.2% | 1.9% | 1.2% | 13.1% |
| Treasury shares held by the Group at the end ofperiod | 144 260 | 79 000 | 144 260 | 79 000 |
| Treasury shares, % of total share capital and votes | 2.1% | 1.1% | 2.1% | 1.1% |
| Average number of outstanding shares | 6 763 368 | 6 828 628 | 6 791 043 | 6 828 628 |
| Number of total issued shares at the end of period | 6 907 628 | 6 907 628 | 6 907 628 | 6 907 628 |
| Personnel on average during the period | 180 | 200 | 189 | 198 |
| Personnel at the end of period | 176 | 200 | 176 | 200 |
* 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
General economic and market developments as well as the employment rate have a significant impact on the demand for workplace products and services. The general uncertainty in the global economy also impacts Wulff's operations. The effects of the coronavirus pandemic, its preparedness and the constraints associated with virus management have a broad impact on the needs of both the global and local economy and customers. In addition, megatrends in the global economy, such as digitalisation and responsibility, are affecting market change. There are both risks and opportunities involved in developing a range of products and services in line with changing markets and needs. Typical business risks include the successful implementation of Wulff's strategy and operational risks arising from the personnel, logistics and IT environment. Intense competition in the workplace products and services industry can affect the profitability of the business. Changes in exchange rates affect the Group's net result and balance sheet, as approximately half of the Wulff Group's net sales come from non-euro countries.
SUBSEQUENT EVENTS
The Group has not had any significant subsequent events after the reporting period.
BOARD OF DIRECTORS’ PROPOSAL FOR THE ANNUAL RESULT
The Group’s parent company Wulff Group Plc’s distributable funds totalled EUR 1.4 million (1.6). The Group’s net result attributable to the parent company shareholders was EUR 2.2 million (1.0), i.e. EUR 0.32 per share (0.15). The Board of Directors proposes to the Annual General Meeting to be held on April 8, 2021 that a dividend of EUR 0.12 per share, i.e. EUR 0.8 million, be paid for the financial year 2020, and the remaining distributable funds be left in retained earnings in the shareholders’ equity.
MARKET SITUATION AND FUTURE OUTLOOK
Megatrends play a role in Wulff’s operations. The company's operating environment is positively affected by the growing share of information work in all work performed. On the other hand, demographic developments are actively reducing the number of people in employment at present. The integration of technology into products and services is an opportunity for Wulff. Digitalisation already brings new ways for a multi-channel company to reach and serve customers and streamline its own operations. Of the megatrends, the most significant for Wulff's operations and future is responsible operations and, in particular, consideration for the environment: whether it treats the environment as a resource or whether the goal is to improve the state of the environment. Future success is strongly built on these themes and their growing importance in business and consumer decision-making. Wulff has chosen responsibility and especially positive climate action and increasing equality as important elements of his strategy.
Demand for products is significantly affected by general economic and market developments as well as the employment rate. In recent years, the market for workplace products and services in the Nordic countries has remained stable. Teleworking has increased and increased the number of workstations and the demand for products needed in workstations. The coronavirus pandemic increased demand for hygiene, protection, and cleaning products. Wulff estimates that the overall market for workplace products and services will remain stable in 2021: although the coronavirus pandemic has had a negative impact on the general economy and employment, the company expects demand for hygiene, cleaning, security, and IT supplies to continue to grow slightly, as at the same time demand for office supplies is decreasing.
Consolidation of the market for workplace products and services is expected to continue, and Wulff is well placed to be a more competitive player in M&A.
Demand for Wulff Entre's services, which provides planning and project management for international trade fairs, has declined due to the coronavirus pandemic, which will weaken Wulff's net sales and operating profit in 2021.
Changes in the operating environment weaken the predictability of the whole year. Wulff estimates that the comparable operating profit of 2021 will decrease from 2020 but will be at a good level in 2021. Wulff's medium-term financial targets remain unchanged. Wulff targets in the medium-term an average annual growth of 5-10% of the netsales, a growing comparable operating profit per cent and an increasing dividend per share.
WULFF GROUP PLC’S FINANCIAL REPORTING AND ANNUAL GENERAL MEETING 2021
Wulff Group Plc will release the following financial reports in 2021:
Annual Report 2020 Wednesday March 10, 2021
Interim Report January-March 2021 Monday April 26, 2021
Half-Year Report January-June 2021 Monday July 26, 2021
Interim Report January-September 2021 Monday October 25, 2021
Wulff Group Plc’s Annual General Meeting will be held on Thursday April 8, 2021. A separate notice to the Annual General Meeting will be published prior to the meeting.
In Espoo on February 22, 2021
WULFF GROUP PLC
BOARD OF DIRECTORS
Further information:
CEO Elina Pienimäki
tel. +358 40 647 1444
e-mail: elina.pienimaki@wulff.fi
DISTRIBUTION
NASDAQ OMX Helsinki Oy
Key media
A better world – one workplace at a time. Wulff’s goal is a perfect workday! We enable better working environments and create workplaces, wherever you are. More comfortable, healthier, safer, more enjoyable, more active and more diverse? How do you want to better you workday and working environment? Wulff has the solution. We offer our customers office supplies, facility management products, catering solutions, IT supplies, ergonomics, first aid, air purifiers, and innovative products for worksites. Customers can also acquire international exhibition services from Wulff. In addition to Finland, Wulff operates in Sweden, Norway, and Denmark. Check out our products and services at wulff.fi/en.