Wulff Group Plc’s Interim Report for January 1 – March 31, 2020
INTERIM REPORT April 27, 2020 at 9.00 A.M.
This is a summary of Wulff Group Plc’s Interim Report for January – March 2020. Wulff Group’s Interim Report as a whole is attached as a PDF file to this stock exchange release and it is also available on the company’s website www.wulff.fi.
Netsales increased and profitability grew further
1.1.-31.3.2020 BRIEFLY
- Net sales totalled EUR 14.7 million (13.8), increased by 6.4%.
- EBITDA and comparable EBITDA were EUR 0.7 million (0.6).
- Operating profit and comparable operating profit (EBIT) amounted to EUR 0.3 million (0.2).
- Earnings and comparable earnings per share (EPS) were EUR 0.00 (0.01).
- Equity-to-assets ratio was 38.6% (39.7).
- Kari Juutilainen, Lauri Sipponen, Jussi Vienola, and Kristina Vienola were elected as members to the Board of Directors. Kari Juutilainen was elected as the Chairman of the Board by the Board of Directors.
- Wulff adjusted the outlook for the comparable operating profit during the financial period; Wulff estimates that the comparable operating profit 2020 will decrease from year 2019.
WULFF GROUP’S CEO ELINA PIENIMÄKI
Wulff’s first quarter’s net sales growth was positive 6%. The growth was mainly built on succeeding in new customer acquisition, daily sales and serving customers. Of our strategic projects, sales were positively impacted by Wulff Lab - especially new, environmentally friendly and sustainable products and services - as well as Wulff Digital, in which our open online store wulffinkulma.fi, is developed.
Wullf’s profitability also improved positively before the coronavirus pandemic. The corona situation affects the global economy and Wulff’s operations providing us both challenges and opportunities. Most significantly it has impacted our fair trade services. International exhibitions have either been postoned or cancelled. The downturn caused by Corona virus has not yet had a major impact in the office supply sales in the first quater, however, the demand will inevitably fall in some of the products. We managed to react to current situation immediately by procuring new products to our selection to meet the current demand. We believe that the hygiene and protection products will remain as a part of our product portfolio.
Wulff is a remarkable player in its field and can acquire products in its product portfolio quickly and with competitive prices from both home country and abroad. The company’s administration, management and operations work closely together, decision are made fast and those are implemented in daily actions quickly. The coronavirus situation, adapting to it and great commercial success have shown the sigificance of our top class sales competence and having multichannels in our operations.
People’s health and security are most important during the exceptional circumstances. The best we can do as a company is to operate as normally as possible – taking in consideration the authorities’ regulations and adjusting our actions. The continuance of the business operations is in the benefit of the whole society. While the future is challenging to predict at the moment and we may face unexpected situations in our operating enviroment, thanks to our strong strategy, long lasting customer and partner relationships and Wulff’s attitude and commitment, I believe that 2020 will be a year of growth and development for us.
GROUP’S NET SALES AND RESULT PERFORMANCE
In January-March 2020 net sales totalled EUR 14.7 million (13.8). Net sales increased by 6.4% (-2.9) in January-March. The increase in net sales resulted from contract sales both in Finland and Scandinavia.
In January-March 2020 gross margin amounted to EUR 5.2 million (4.9) being 35.1% (35.7) in January-March. The increase in gross margin resulted from contract sales both in Finland and Scandinavia.
In January-March 2020 employee expenses amounted to EUR 3.3 million (3.2) compared to net sales, 22.1% (22.8).
Due to the exceptional conditions and especially restrictions in traveling and gathering resulting from the coronavirus, international fair events from the beginning of the year. have been postponed to the fall of 2020 or even the following year. A part of the fair events were fully cancelled. The company which provides trade fair services have adjusted their operations according to the current situation.
Other operating expenses amounted to EUR 1.3 million (1.3) in January-March 2020 being 9.1% (9.2) of net sales.
In January-March 2020 EBITDA and the comparable EBITDA amounted to EUR 0.7 million (0.6), 4.4% (4.0) of net sales.
The operating profit (EBIT) and the comparable operating profit (EBIT) amounted to EUR 0.3 million (0.2), 1.8% (1.4) of net sales. The first quarters of 2020 and 2019 did not include items affecting comparability.
The depreciations of the properties were EUR -0.1 million (-0.0) in the reporting period. The depreciations within the reporting period grew from acquiring premises in Kilo, Espoo on April 15, 2019.
In January-March 2020 the financial income and expenses totalled (net) EUR -0.2 million (-0.1) including interest expenses of EUR -0.0 million (-0.0) and mainly currency-related other financial items and bank expenses EUR -0.2 million (-0.0).
In January-March 2020 the result before taxes was EUR 0.1 million (0.1), and the operating result EUR 0.0 million (0.1). Earnings per share and comparable earnings-per-share (EPS) were EUR 0.00 (0.01) in January-March 2020.
KEY FIGURES
| I | I | I-IV | |
| EUR 1000 | 2020 | 2019 | 2019 |
| Net sales | 14 730 | 13 844 | 56 344 |
| Change in net sales, % | 6.4% | -2.9% | 0.8% |
| Gross profit | 5 176 | 4 946 | 19 825 |
| Gross profit, % | 35.1% | 35.7% | 35.2% |
| EBITDA | 655 | 556 | 3 067 |
| EBITDA margin, % | 4.4% | 4.0% | 5.4% |
| Operating profit/loss | 270 | 191 | 1 570 |
| Operating profit/loss margin, % | 1.8% | 1.4% | 2.8% |
| Profit/Loss before taxes | 56 | 134 | 1 194 |
| Profit/Loss before taxes margin, % | 0.4% | 1.0% | 2.1% |
| Net profit/loss for the period attributable to equityholders of the parent company | 21 | 99 | 1 039 |
| Net profit/loss for the period, % | 0.1% | 0.7% | 1.8% |
| Earnings per share, EUR (diluted = non-diluted) | 0.00 | 0.01 | 0.15 |
| Return on equity (ROE), % | 0.4% | 0.9% | 8.5% |
| Return on investment (ROI), % | 0.5% | 1.0% | 7.9% |
| Equity-to-assets ratio at the end of period, % | 38.6% | 39.7% | 39.2% |
| Debt-to-equity ratio at the end of period | 77.7% | 65.2% | 66.2% |
| Equity per share at the end of period, EUR * | 1.75 | 1.72 | 1.76 |
| Investments in non-current assets | 214 | 3 727 | 7 359 |
| Investments in non-current assets, % of net sales | 1.5% | 26.9% | 13.1% |
| Treasury shares held by the Group at the end ofperiod | 79 000 | 79 000 | 79 000 |
| Treasury shares, % of total share capital and votes | 1.1% | 1.1% | 1.1% |
| Average number of outstanding shares | 6 828 628 | 6 828 628 | 6 828 628 |
| Number of total issued shares at the end of period | 6 907 628 | 6 907 628 | 6 907 628 |
| Personnel on average during the period | 199 | 197 | 198 |
| Personnel at the end of period | 197 | 200 | 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
The demand for office supplies is strongly affected by the general economic development and the industry’s tight competition. Business operations are also affected by normal business risks such as the success of the Group’s strategy and operative risks stemming from the personnel, logistics and IT environments. Approximately half of the Group’s net sales come from other than euro-currency countries. Fluctuation of the currencies affects the Group’s net result and balance sheet. Risks relating to fair service business have increased due to international epidemic, which restricts traveling. Wulff anticipates rapid changes in demand also in work product sales due to coronavirus.
SUBSEQUENT EVENTS
The Group has not had any significant subsequent events.
MARKET SITUATION AND FUTURE OUTLOOK
The spread of the coronavirus and measures to prevent the spread of the virus are affecting the world economy. The exceptional circumstances have increased risks and reduced predictability.
The demand for our contract sales’ design and project management Wulff Entre’s fair services has diminished due to corona situation. Fair events have been postponed and cancelled. This will decrease Wulff group’s comparable operating profit in 2020. At the same time the situation offers sales opportunities to Wulff: its more than 100 000 customers in the Nordic countries will need workplace products for their use also during the crisis.
Wulff is the most significant Nordic player in its field. Its aim is to lead the way, renew the field and be at the forefront of change. Wulff believes that the role of values and sustainability will come to have an increasingly important part in sourcing decisions and companies’ business partner selections in the future. With its new strategy, Wulff will build its competitiveness and make sure that it can offer customers what they want: solutions for making the everyday work life smoother and the world better one workplace at a time. The market traditionally understood as the office environment changes and develops rapidly. Competition is tough in the traditional market and the new market has a lot of opportunities. Wulff believes that the future is bright due to the strong, constantly developing new strategy, its active customer and partner networks, and its professional, committed personnel. The Group has an ongoing readiness to carry out new strategic acquisitions and as a listed company, Wulff is in a good position to be a more active player than its competitors.
Wulff estimates that the comparable operating profit of 2020 will decrease from 2019 caused by the exceptional situation resulting from the coronavirus. In the industry, it is typical that the result and cash flow are generated in the last quarter. Thanks to the strong strategy, long lasting customer and partner relationships, and Wulff’s attitude and commitment in Wulff we believe that we will get through the corona crisis and build profitable growth in the near future. Economical success is possible to build, as long as people’s health and security is taken care of first.
WULFF GROUP PLC’S FINANCIAL REPORTING
Wulff Group Plc will release the following financial reports in 2020:
Half-Year Report January-June 2020 Monday July 27, 2020
Interim Report January-September 2020 Monday October 26, 2020
In Espoo on April 27, 2020
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/.