Wulff Group Plc’s Financial Statements Release January 1–December 31, 2022
FINANCIAL STATEMENTS RELEASE | 20.2.2023 AT 9.30 A.M.
This is a summary of Wulff Group Plc’s Financial Statements Release January 1–December 31, 2022. 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.
2022 is a year of profitable growth and a proposal for a growing dividend
1.10.-31.12.2022 BRIEFLY
- Net sales totalled EUR 27.7 million (27.6), increased by 0.1%
- EBITDA was EUR 1.8 million (1.4), and comparable EBITDA was EUR 1.8 million (2.1)
- Operating profit (EBIT) was EUR 1.2 million (0.8) and comparable operating profit (EBIT) was EUR 1.2 million (1.5)
- Earnings per share (EPS) was EUR 0.16 (0.09) and comparable earnings per share (EPS) was EUR 0.16 (0.19)
1.1.-31.12.2022 BRIEFLY
- Net sales totalled EUR 102.2 million (90.4), increased by 13.0%
- EBITDA was EUR 6.2 million (9.1), 6.1% (10.1) of net sales, and comparable EBITDA was EUR 6.2 million (6.1), 6.1% (6.7) of net sales
- Operating profit (EBIT) was EUR 4.0 million (6.9), and comparable operating profit (EBIT) was EUR 4.0 million (3.9)
- Comparable operating profit increased by 2.7%
- Earnings per share (EPS) were EUR 0.45 (0.87), and comparable earnings per share were EUR 0.45 (0.42)
- The equity ratio was 40.5 % (38.1)
- The Board of Directors proposes to the Annual General Meeting to be held on April 5, 2023 that a dividend of EUR 0.14 per share will be paid
- Wulff estimates that net sales and comparable operating profit 2023 will increase compared to 2022
WULFF GROUP PLC’S CEO ELINA RAHKONEN
What made the year 2022 especially great for Wulff, was the wonderful feedback we received from our customers about the growth and development of our product and service selection. For us and our customers, responsibility is increasingly important both in the selection of products and services to be purchased for the workplace and in the partner's own operations. We succeeded both in increasing our offering to new product areas and in developing the selection to be more responsible. We also achieved important sustainability goals in 2022: all the properties we own in all our operating countries now have their own solar power plant. The additional energy consumed is 100% renewable. In Finland, we achieved a carbon-neutral supply chain by compensating all emissions from the supply chain.
The integration of the operations of Wulff Solutions Oy, which was acquired in the spring of 2021, is progressing as planned and successfully since the profitability improvement of the purchased business has realized. The acquisition of the company doubled our turnover and strengthened Wulff as the operator offering the widest selection and the most versatile sales channels in our field. With the deal, we have gained a lot of significant new customers from, for example, the care sector. In Scandinavian Contract Customers Segment, we won new customers and increased our share of customers’s purchases. The acquisition of financial administration service specialist Carpentum Oy, made at the beginning of 2022, expanded our service selection into a stable and profitable sector. In business acquisitions, synergies are sought from combining operating models and cost efficiency in, for example, shared systems and offices. The most important synergy is created by adopting Wulff's strong sales culture. By continuing this work - and working hard to develop the best and most responsible customer experience in the industry - we have a good chance of making 2023 a great year of growth. In line with our strategy, we will continue to pursue growth through acquisitions.
GROUP NET SALES AND PERFORMANCE
In January–December 2022, net sales totalled EUR 102.2 million (90.4), and EUR 27.7 million (27.6) in the last quarter. Net sales increased by 13.0% (57.1) during the whole financial year, and 0.1% (80.5) in the last quarter. Sales growth in the Contract Customers Segment continued, especially in Scandinavia. The turnover of Contract Customers Segment in Finland was affected by the emphasis on profitability and the resulting policies in customer selection, as well as the expected continued contraction of sales of protective products. Wulff increased its offering of financial management services with the acquisition of Carpentum Oy's entire capital stock on January 4, 2022. Due to the acquisition, the sales of the financial administration services business have grown in line with expectations. Sales of Wulff Entre's international exhibition services and remote meeting solutions increased clearly during the reporting period. In Expertise Sales Segment, the decrease in demand for hygiene and protective products was reflected in a contraction in turnover, as expected.
In January–December 2022, the gross margin amounted to EUR 31.0 million (28.7), 30.3% (31.7) of net sales, and EUR 8.6 million (8.9) in the last quarter being 30.8% (32.1) of net sales. The acquisition of Wulff Solutions on May 3, 2021 contributed EUR 8.9 million (8.2) to the gross margin in January-December 2022. The company's integration into Wulff's Contract Customers Segment progressed as planned during the reporting period. The development of the relative sales margin was influenced by changes in the priority areas of demand for the products sold by Wulff. After the pandemic, the share of sales of more traditional workplace products and services is returning towards the previous level. The sales margin of workplace products is strongly affected by widespread price inflation. In particular, the price inflation of the products in most demand and energy-intensity accelerated during the reporting period, while availability gradually normalized at the same time. The increase in logistics costs continued until the end of the reporting period, gradually leveling off. As the Contract Customers Segment continued to grow, it’s share of of turnover and gross margin increased. The sales of the Expertise Sales Segment decreased from the comparison period, e.g. with the decrease in sales of hygiene and protective products and the availability challenges of the products sold by the segment.
In January–December 2022, employee benefit expenses amounted to EUR 17.4 million (16.4), 17.0% (18.1) of net sales, and EUR 4.7 million (5.1), 16.9% (18.6) of net sales in the last quarter. In the financial year 2021, non-recurring personnel expenses arising from the completion of the acquisition and termination of employment amounted to approximately EUR 0.9 million.
Other operating expenses amounted to EUR 7.8 million (8.3) in January–December 2022, 7.6% (9.2) of net sales, and EUR 2.1 million (2.5), 7.7% (8.9) of net sales in the last quarter. The non-recurring costs related to the completion of the acquisition during the second quarter of 2021 were approximately EUR 0.5 million. As planned, the group used fewer external services than in the comparison period.
In January–December 2022, EBITDA amounted to EUR 6.2 million (9.1), or 6.1% (10.1) of net sales, and EUR 1.8 million (1.4) in the last quarter, or 6.4% (5.0) of net sales. Goodwill recognition of EUR 4.5 million due to the favourable acquisition during the second quarter of 2021 and EUR 1.4 million of costs arising from the implementation of the acquisition have been deducted from the comparable results 2021. In January–December 2022, comparable EBITDA amounted to EUR 6.2 million (6.1), or 6.1 % (6.7) of net sales, and in October–December, it amounted to EUR 1.8 million (2.1), or 6.4% (7.6) of net sales.
In January–December 2022, operating profit (EBIT) amounted to EUR 4.0 million (6.9), or 3.9 % (7.7) of net sales, and EUR 1.2 million (0.8), or 4.4% (2.8) of net sales in the last quarter. The comparable operating profit (EBIT) for the entire reporting period amounted to EUR 4.0 million (3.9), or 3.9% (4.3) of net sales, and EUR 1.2 million (1.5), or 4.4% (5.3) of net sales in the last quarter.
In January–December 2022, the financial income and expenses totalled (net) EUR -0.7 million (-0.4), including interest expenses of EUR -0.5 million (-0.3), and mainly currency-related other financial items (net) totalled EUR -0.2 million (-0.2). In the fourth quarter, the financial income and expenses (net) totalled EUR -0.2 million (-0.1).
In January–December 2022, the result before taxes was EUR 3.3 million (6.6), and EUR 1.0 million (0.7) in the last quarter. The financial year’s comparable result before taxes was EUR 3.3 million (3.5), while the comparable result before taxes was EUR 1.0 million (1.4) in the last quarter.
Net profit in the reporting period was EUR 3.1 million (6.1) in January–December 2022, and EUR 1.1 million (0.6) in the last quarter. In January–December 2022, the comparable profit was EUR 3.1 million (3.1), and EUR 1.1 million (1.3) in the last quarter.
Earnings per share (EPS) were EUR 0.45 (0.87) in January–December 2022, and EUR 0.16 (0.09) in the last quarter. Comparable earnings per share (EPS) for the entire reporting period were EUR 0.45 (0.42), and EUR 0.16 (0.19) in the last quarter.
KEY FIGURES
| IV | IV | I-IV | I-IV | |
| EUR 1000 | 2022 | 2021 | 2022 | 2021 |
| Net sales | 27 677 | 27 637 | 102 171 | 90 424 |
| Change in net sales, % | 0.1% | 80.5% | 13.0% | 57.% |
| Gross profit | 8 511 | 8 879 | 30 986 | 28 685 |
| Gross profit, % | 30.8% | 32.1% | 30.3% | 31.7% |
| EBITDA | 1 765 | 1 390 | 6 213 | 9 128 |
| EBITDA margin, % | 6.4% | 5.0% | 6.1% | 10.1% |
| Comparable EBITDA | 1 765 | 2 092 | 6 213 | 6 073 |
| Comparable EBITDA margin, % | 6.4% | 7.6% | 6.1% | 6.7% |
| Operating profit/loss | 1 218 | 773 | 3 988 | 6 940 |
| Operating profit/loss margin, % | 4.4% | 2.8% | 3.9% | 7.7% |
| Comparable operating profit/loss | 1 218 | 1 475 | 3 988 | 3 885 |
| Comparable perating profit/loss margin, % | 4.4% | 5.3% | 3.9% | 4.3% |
| Profit/Loss before taxes | 1 035 | 695 | 3 273 | 6 552 |
| Profit/Loss before taxes margin, % | 3.7% | 2.5% | 3.2% | 7.2% |
| Comparable profit/Loss before taxes | 1 035 | 1 397 | 3 273 | 3 497 |
| Comparable profit/Loss before taxes margin, % | 3.7% | 5.1% | 3.2% | 3.9% |
| Net profit/loss for the period attributable to equityholders of the parent company | 1 087 | 604 | 3 052 | 5 896 |
| Net profit/loss for the period, % | 3.9% | 2.2% | 3.0% | 6.5% |
| Comparable net profit/loss for the period attributable to equity holders of the parent company | 1 087 | 1 306 | 3 052 | 2 841 |
| Comparable net profit/loss for the period, % | 3.9% | 4.7% | 3.0% | 3.1% |
| Earnings per share, EUR (diluted = non-diluted) | 0.16 | 0.09 | 0.45 | 0.87 |
| Comparable earnings per share, EUR (diluted = non-diluted) | 0.16 | 0.19 | 0.45 | 0.42 |
| Return on equity (ROE), % | 5.5% | 3.0% | 15.5% | 36.3% |
| Return on investment (ROI), % | 3.6% | 3.2% | 11.2% | 25.0% |
| Equity-to-assets ratio at the end of period, % | 40.5% | 38.1% | 40.5% | 38.1% |
| Debt-to-equity ratio at the end of period | 60.6% | 62.1% | 60.6% | 62.1% |
| Equity per share at the end of period, EUR * | 3.02 | 2.73 | 3.02 | 2.73 |
| Investments in non-current assets | 620 | 420 | 2 479 | 1 388 |
| Investments in non-current assets, % of net sales | 2.2% | 1.5% | 2.4% | 1.5% |
| Treasury shares held by the Group at the end ofperiod | 111 624 | 137 260 | 111 624 | 137 260 |
| Treasury shares, % of total share capital and votes | 1.6% | 2.0% | 1.6% | 2.0% |
| Average number of outstanding shares | 6 828 557 | 6 770 368 | 6 852 051 | 6 769 352 |
| 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 | 282 | 291 | 286 | 248 |
| Personnel at the end of period | 280 | 278 | 280 | 278 |
* 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 intensity of the inflation trend has been affected first by the pandemic restrictions and then by Russia's attack on Ukraine. The development of both the global economy and local economies is strongly affected by rising prices and monetary policy decisions aimed at combating inflation. All of this also affects Wulff's operations. In addition, megatrends in the global economy, such as responsibility, digitalization, the sharing economy, and the aging of the population, 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, such as the integration of operations from business acquisitions, 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.
EVENTS AFTER THE FINANCIAL YEAR
The Group has not had any significant 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 1.7 million (1.7). The Group’s net result attributable to the parent company shareholders for the financial year was EUR 3.1 million (5.9), or EUR 0.45 per share (0.87). The Board of Directors proposes to the Annual General Meeting to be held on April 5, 2022, that a dividend of EUR 0.14 per share be paid in two equal installments during the second and last quarters of 2023, for the financial year 2022, totalling EUR 1.0 million, and the remaining distributable funds to be transferred in retained earnings in the shareholders’ equity.
STRATEGY
On 9 December 2021, Wulff Group Plc’s Board of Directors approved an updated strategy and medium-term targets for the company for 2022–2026. Profitable growth in the current business operations is at the heart of the strategy, which will be accelerated through acquisitions.
The company’s goal is to be the market leader for workplace products and services, and the most recommended and responsible partner in the sector – making a better world, one workplace at a time. The foundation of the growth strategy is an expansion of the product and service portfolio, and acquisitions in the Nordic countries.
The new medium-term financial targets approved by Wulff Group Plc’s Board of Directors seek to double net sales, reaching net sales of EUR 200 million by 2026:
• average net sales growth of 15–20% per year
• growth of comparable operating profit percentage and
• increasing dividend per share
MARKET SITUATION AND FUTURE OUTLOOK
Among the global megatrends, Wulff's operating environment is positively affected by the increase in the share of knowledge work in all work performed. The demographic development is currently reducing the number of people actively working, although at the same time working careers are getting longer, e.g. as the average retirement age rises. The integration of technology into products and services is an opportunity for Wulff. Digitalization brings new ways for an already multi-channel company to reach and serve customers and streamline its own operations. Of all megatrends, the most significant for Wulff's operations are responsible operations and consideration for the environment: is the environment treated as a resource or is the goal to improve the state of the environment. Future success is strongly built on these themes and their importance is growing in business and consumer decision-making. Wulff has chosen responsibility, particularly positive climate action, increasing equality and decent work and economic growth (UN Sustainable Development Goals 2030) as important elements of its strategy.
Demand for products and services is significantly affected by general economic and market developments as well as the employment rate. The market for workplace products and services has developed stably in the Nordic countries, except for fluctuations caused by the Coronavirus pandemic during the comparison period and the previous period. Wulff estimates that the overall market for workplace products and services will remain stable, even when there are rapid changes in work environments. Safe face-to-face meetings are taken care of even after the Coronavirus pandemic, and that is why Wulff estimates that the demand for hygiene, cleaning, sanitation and protection products will remain livelier in the future than it was before the pandemic. The pandemic has accelerated the upheaval on how we work; the growth of multi-local teleworking has increased the number of workstations and the demand for products needed at workstations. Demand for IT supplies, printing products and traditional office supplies continues to develop post-pandemic. This is due to the return to work and the increased number of new workstations. The Group’s net sales and operating profit are affected by the development of the international exhibition services industry, as the industry is gradually recovering from the Coronavirus pandemic.
The ongoing geopolitical crisis, the Russian invasion to Ukraine and the coercive measures against Russia do not directly affect Wulff's activities as Wulff has not had any activities or partnerships in the countries involved in the crisis. The crisis is having an impact on global supply chains, the changes to which may also indirectly affect Wulff's business. Changes into global supply chains have intensified and broadened the recent price inflation development. The availability challenges of many product groups have eased with the reorganization of global supply chains and the leveling off of the demand peak that followed the pandemic. Especially in Europe, the uncertainty related to the availability of energy commodities has caused an increase in logistics costs. Continued inflation makes it necessary to secure the development of gross margin. The uncertainty concerning the intensity and broadening of inflation sets a restraint into predictability.
The reorganisation of Wulff’s contract sales organisation in Finland along with the cooperation negotiations conducted with Wulff Oy Ab and Wulff Solutions Oy in August–September 2021 caused functions in sales, administration and support functions to be merged. As a result of the cooperation negotiations, the company will achieve annual cost savings of approximately EUR 1.9 million in personnel costs. In the same context, Wulff announced that they believed in annual cost synergy benefits totaling at least EUR 3 million to be realized in stages, a significant part of which was expected to be realized already in 2022.
Thanks to the implemented and planned reorganization measures, for example the integration of information systems and logistics and operational processes, and thanks to office space changes, Wulff achieved an annual cost synergy benefit of approximately EUR 2.5 million in total during the reporting period. The saving achieved from personnel costs was approximately EUR 1.7 million.
Wulff aims to grow profitably, and it has the continuing ability to be a more active player in M&A than its competitors.
Wulff estimates that net sales and comparable operating profit 2023 will increase compared to 2022.
WULFF GROUP PLC’S FINANCIAL REPORTING AND ANNUAL GENERAL MEETING 2023
Wulff Group Plc will release the following financial reports in 2023:
Annual Report 2022 Thursday March 9, 2023
Interim Report January-March 2023 Monday April 24, 2023
Half-Year Report January-June 2023 Monday July 17, 2023
Interim Report January-September 2023 Monday October 23, 2023
Wulff Group Plc’s Annual General Meeting will be held on Wednesday April 5, 2023. A separate notice to the Annual General Meeting will be published prior to the meeting.
In Espoo on February 20, 2023
WULFF GROUP PLC
BOARD OF DIRECTORS
Further information:
CEO Elina Rahkonen
tel. +358 40 647 1444
e-mail: elina.rahkonen@wulff.fi
DISTRIBUTION
Nasdaq Helsinki Oy
Key media
www.wulff.fi/en
A better world - one workplace at a time. We enable better and more sustainable work environments and a perfect working day. We make the workplace where you do your work. Here you can find today's workplace products: e.g. cafe supplies, real estate and cleaning maintenance products, office and IT supplies, ergonomics, first aid, hygiene, protection and safety products, air purification and innovative products for construction sites. Our selection also includes high-quality Canon printing and document management services as well as financial management services. Our customers also purchase international exhibition services and solutions for remote meetings from us. As a clear domestic market leader, we are developing our selection to become more and more responsible and our customer experience to be the best in the industry. In addition to Finland, Wulff Group operates in Sweden, Norway and Denmark. Read more at wulff.fi/en.