Wulff Group Plc’s Interim Report for January 1 – September 30, 2019
INTERIM REPORT OCTOBER 31, 2019 AT 9.00 A.M.
Relative profitability increased, net sales decreased
This is a summary of Wulff Group Plc’s interim report for January-September 2019. 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-group.com.
1.7. – 30.9.2019 BRIEFLY
- Net sales totalled EUR 12.0 million (13.0), decreased by 7.8%
- EBITDA was EUR 0.4 million (0.4), 3.6% of net sales (2.8) and comparable EBITDA was EUR 0.6 million (0.4), 4.6% of net sales (2.8)
- Operating profit (EBIT) was EUR 0.1 million (0.3) and comparable operating profit (EBIT) was EUR 0.2 million (0.3)
- Earnings per share (EPS) were EUR -0.01 (0.03) and comparable earnings per share (EPS) were EUR 0.00 (0.03)
- Wulff invested in its own premises and solar power in Kilo, Espoo in Finland, where the company moved in September
- Elina Pienimäki, 40, started as new Wulff Group Plc CEO and Chairman of Wulff Group Plc’s Executive Board
- Wulff Group Plc announced its new medium-term financial targets
- The outlook for the comparable operating profit remains the same; Wulff estimates the comparable operating profit 2019 to grow from the comparable operating profit 2018
1.1. – 30.9.2019 BRIEFLY
- Net sales totalled EUR 41.3 million (41.1), increased by 0.5%
- EBITDA was EUR 1.9 million (1.2), 4.7% of net sales (2.8) and comparable EBITDA was EUR 2.0 million (1.2), 4.9% of net sales (2.8)
- Operating profit (EBIT) was EUR 0.8 million (0.9) and comparable operating profit (EBIT) was EUR 0.9 million (0.9)
- Earnings per share (EPS) were EUR 0.06 (0.09) and comparable earnings per share were EUR 0.08 (0.09)
- Equity-to-assets ratio was 36.0% (45.4)
WULFF GROUP PLC’S CEO ELINA PIENIMÄKI
“I’m pleased that I can start my work in a positive situation: the third quarter was positive and included numerous successes. The relative profitability increased while net sales decreased. We succeeded in this, among other things, in developing the product group profitability. Successes are made by people: In Wulff Academy coaching sessions we have been focusing on increasing professional competence and personal growth.
I trust our strategy: to make the world better one work place at a time. Our target is to make it easier for our customers to make environmentally friendlier choices. We also want to increase the number of sustainable services in our portfolio. We better our competitiveness by investing on developing purchasing skills specially with a sustainable service and product portfolio and optimizing purchase prices. We have started a recruitement process for a new chief purchase officer in our group.
We have updated our financial targets: we are targeting for an average annual growth of net sales of 5-10%, growing comparable operating profit-% and growing dividend per share. We believe the growth will come from new product groups and services and new customers. In addition we are ready to well intentionally acquire new companies. Wulff has got a strong knowhow on acquisitions and also of selling of companies if needed. According to our strategy we concentrate on implementing profitable growth.
I started as the Group CEO in the end of September and I have been enjoying every single day. It has been great to meet many Wulff customers and motivated Wulff employees already during the first month. It’s fantastic to have the opportunity to work for generating the industry’s best customer and personnel experience here at Wulff.”
GROUP’S NET SALES AND RESULT PERFORMANCE
In January-September 2019 net sales totalled EUR 41.3 million (41.1), and in July-September EUR 12.0 million (13.0). Net sales increased between January-September by 0.5% (-0.1) and decreased by 7.8% (6.6) in the third quarter. In January-September the net sales increased specially due to the sales of Canon Business Center printing solution services. The Canon Business Center was acquired to the group in August 2018. The decrease in the net sales in the third quarter was mainly due to lower fair event sales.
In January-September 2019 the gross margin amounted to EUR 14.3 million (14.1) being 34.8% (34.4) of the net sales, and EUR 4.1 million (4.3) in the third quarter being 34.2% (33.0) of the net sales. In January-September the gross margin grew due to sales of the Canon Business Center printing solution services. In the third quarter the gross margin decreased as exhibition sales were lower than in the comparison season.
In January-September 2019 employee benefit expenses amounted to EUR 8.8 million (8.4) and 21.3% (20.6) of net sales, and respectively, in the third quarter EUR 2.5 million (2.5), being 21.0% (19.0) of net sales. The employee benefit expenses grew with the acquisition of the Canon Business Center printing equipment and solutions business in 2018. The company employs 11 people.
Other operating expenses were to EUR 3.8 million (4.6) in January-September 2019 being 9.2% (11.2) of net sales and respectively EUR 1.2 million (1.5) in the third quarter, being 10.1% (11.4%) of net sales. In total the other operating expenses were less by EUR 0.8 million compared to previous reporting period. The reason for this is presenting the office premises rents and equipment leases in depreciations EUR -0.7 million and in interest expenses EUR -0.0 million instead of presenting them in other operating expenses according to the IFRS 16 Leases -standard. More information on the impact of the adaption of the IFRS 16 Leases standard has been presented in the notes of the Report.
In the third quarter Wulff moved to its own premises in Kilo, Espoo, Finland in September 2019. 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, which impact has been recognised in EBITDA, operating profit (EBIT) and earnings per share (EPS).
In January-September 2019 EBITDA amounted to EUR 1.9 million (1.2), being 4.7% (2.8) of net sales, and EUR 0.4 million (0.4) in the third quarter, being 3.6% (2.8) of net sales. The growth of EBITDA EUR 0.7 million and 1.6%-points was due to the implementation of IFRS 16 Leases standard. In January-September the comparable EBITDA amounted to EUR 2.0 million (1.2), being 4.9% (2.8) of net sales and EUR 0.6 million (0.4) in the third quarter, being 4.6% (2.8) of net sales.
The operating profit (EBIT) amounted to EUR 0.8 million (0.9), being 2.0% (2.1) of net sales and respectively EUR 0.1 million (0.3), 0.5% (2.0) in the third quarter. The comparable operating profit (EBIT) amounted to EUR 0.9 million (0.9), being 2.2% (2.1) of net sales, and respectively EUR 0.2 million (0.3), being 1.5% (2.0) of net sales in the third quarter.
The depreciations of the properties were EUR -0.2 million in the reporting period and EUR -0.1 million in the third quarter. The premises in Kilo, Espoo and Ljungby, Sweden were acquired during the reporting period, so there were no depreciations of properties in the comparison period.
In January-September 2019 the net of financial income and expenses totalled EUR -0.3 million (-0.2) including interest expenses EUR -0.1 million (-0.1) and mainly the net of currency-related other financial items and bank expenses EUR -0.2 million (-0.1). In the third quarter, the financial income and expenses totalled (net) EUR -0.1 million (-0.0).
In January-September 2019 the result before taxes was EUR 0.5 million (0.7), and in the third quarter EUR -0.1 million (0.3). The comparable result before taxes was EUR 0.6 million (0.7), and in the third quarter EUR 0.0 million (0.3). In January-September 2019 the net profit was EUR 0.4 million (0.6) and in the third quarter EUR -0.1 million (0.2). In January-September the comparable result was EUR 0.6 million (0.6) and in the third quarter EUR 0.0 million (0.2).
Earnings per share (EPS) were EUR 0.06 (0.09) in January-September 2019, and EUR -0.01 (0.03) in the third quarter. Comparable earnings per share (EPS) were EUR 0.08 (0.09) in January-September 2019 and 0.00 (0.03) in the third quarter.
KEY FIGURES
| III | III | I-III | I-III | I-IV | |
| EUR 1000 | 2019 | 2018 | 2019 | 2018 | 2018 |
| Net sales | 12 035 | 13 048 | 41 263 | 41 058 | 55 889 |
| Change in net sales, % | -7.8% | 6.6% | 0.5% | -0.1% | -1.8% |
| Gross profit | 4 120 | 4 311 | 14 348 | 14 112 | 19 670 |
| Gross profit, % | 34.2% | 33.0% | 34.8% | 34.4% | 35.2% |
| EBITDA | 435 | 366 | 1 919 | 1 170 | 1 920 |
| EBITDA margin, % | 3.6% | 2.8% | 4.7% | 2.8% | 3.4% |
| Operating profit/loss | 59 | 264 | 807 | 864 | 1 508 |
| Operating profit/loss margin, % | 0.5% | 2.0% | 2.0% | 2.1% | 2.7% |
| Profit/Loss before taxes | -78 | 251 | 492 | 695 | 1 243 |
| Profit/Loss before taxes margin, % | -0.6% | 1.9% | 1.2% | 1.7% | 2.2% |
| Net profit/loss for the period attributable to equity holders of the parent company | -101 | 221 | 433 | 600 | 1 025 |
| Net profit/loss for the period, % | -0.8% | 1.7% | 1.1% | 1.5% | 1.8% |
| Earnings per share, EUR (diluted = non-diluted) | -0.01 | 0.03 | 0.06 | 0.09 | 0.15 |
| Return on equity (ROE), % | -0.8% | 2.0% | 3.7% | 5.7% | 9.3% |
| Return on investment (ROI), % | -0.1% | 1.6% | 3.4% | 5.1% | 9.5% |
| Equity-to-assets ratio at the end of period, % | 36.0% | 45.4% | 36.0% | 45.4% | 49.1% |
| Debt-to-equity ratio at the end of period | 93.7% | 35.6% | 93.7% | 35.6% | 15.8% |
| Equity per share at the end of period, EUR * | 1.66 | 1.66 | 1.66 | 1.66 | 1.72 |
| Investments in non-current assets | 825 | 136 | 7 069 | 388 | 446 |
| Investments in non-current assets, % of net sales | 6.9% | 1.0% | 17.1% | 0.9% | 0.8% |
| 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 | 1.1% | 1.1% | 1.1% | 1.1% | 1.1% |
| Average number of outstanding shares | 6 907 628 | 6 685 150 | 6 907 628 | 6 581 375 | 6 643 696 |
| Number of total issued shares at the end of period | 6 907 628 | 6 907 628 | 6 907 628 | 6 907 628 | 6 907 628 |
| Personnel on average during the period | 197 | 191 | 196 | 191 | 191 |
| Personnel at the end of period | 201 | 194 | 201 | 194 | 191 |
* Equity attributable to the equity holders of the parent company / Number of shares excluding the acquired own shares
The adaption of the IFRS 16 Leases standard as of 1.1.2019 has been accounted for in the calculation of the key figures. More information on the impact of the adaption has been presented in the notes to the Interim Report.
RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
The demand for workplace products and office supplies is strongly affected by the general economic development and the market’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.
SUBSEQUENT EVENTS
The Board of Directors of Wulff Group Plc has chosen Elina Pienimäki, who started as Wulff Group Plc CEO on September 30, 2019, to the Wulff-Group Plc`s Executive Board. The former Chairman of the Executive Board and Group CEO, Heikki Vienola, will continue to support the growth of the company in a position outside the Executive Board.
On October 18, 2019 the Board Of directors of Wulff Group Plc decided the release dates of financial reports for 2020 and the Annual General Meeting to be held on April 2, 2020.The release dates of the financial reports for 2020 are presented in the section “Wulff Group Plc’s Financial Reporting”.
On October 18, 2019 Wulff Group Plc Board of Directors made a resolution of medium-term financial targets of average annual growth of net sales of 5-10%, growing comparable operating profit-% and growing dividend per share.
MARKET SITUATION AND FUTURE OUTLOOK
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.
The developing economic situation will enable Wulff’s business to develop positively. Wulff estimates that the comparable operating profit of 2019 will increase from 2018. In the industry, it is typical that the result and cash flow are generated in the last quarter.
WULFF GROUP PLC’S FINANCIAL REPORTING
Wulff Group Plc will release the following financial reports in 2020:
Financial statements release Monday February 17, 2020
Annual Report Monday March 9, 2020
Interim Report January-March 2020 Monday April 27, 2020
Half-Year Report January-June 2020 Monday July 27, 2020
Interim Report January-September 2020 Monday October 26, 2020
In Espoo on October 31, 2019
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
www.wulff-group.com
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.