Wulff Group Plc’s Interim Report for January 1 – September 30, 2020
INTERIM REPORT OCTOBER 26, 2020 at 9.00 A.M.
This is a summary of Wulff Group Plc’s interim report for January-September 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.
Ability to adapt, active sales and profitably growing business
1.7. – 30.9.2020 BRIEFLY
- Net sales totalled EUR 12.4 million (12.0), increased by 3.2%
- EBITDA was EUR 1.3 million (0.4), 10.7% of net sales (3.6) and comparable EBITDA was EUR 1.3 million (0.6), 10.7% of net sales (4.6)
- Operating profit (EBIT) was EUR 0.9 million (0.1) and comparable operating profit (EBIT) was EUR 0.9 million (0.2)
- Earnings per share (EPS) were EUR 0.09 (-0.01) and comparable earnings per share (EPS) were EUR 0.09 (0.00)
- Wulff updated the outlook for the comparable operating profit on September 21, 2020; Wulff estimates the comparable operating profit 2020 to grow clearly from 2019
1.1. – 30.9.2020 BRIEFLY
- Net sales totalled EUR 42.2 million (41.3), increased by 2.3%
- EBITDA was EUR 3.7 million (1.9), 8.7% of net sales (4.7) and comparable EBITDA was EUR 3.7 million (2.0), 8.7% of net sales (4.9)
- Operating profit (EBIT) was EUR 2.4 million (0.8) and comparable operating profit (EBIT) was EUR 2.4 million (0.9)
- Earnings per share (EPS) were EUR 0.19 (0.06) and comparable earnings per share were EUR 0.19 (0.08)
- Equity-to-assets ratio was 41.5% (36.0)
WULFF GROUP PLC’S CEO ELINA PIENIMÄKI
“These exceptional circumstances have affected the world economy and all the people and businesses in Finland this year. Accountability and safety have become important themes for us and our customers and partners. We adapted to the situation by renewing our product portfolio and acquiring new partners. The sale of hygiene and safety products has been especially topical so far during the year. Our sales shifted the focus from the emptying offices to making workplaces safe and we succeeded very well in growing our net sales and profit. Strong salesmanship, listening to the customers and the ability to renew and be renewed are embedded in the Wulff DNA. We are a Finnish, and nowadays also in Sweden, Norway and Denmark operating company, serving strongly strong locally. That's why our company turned 130 this autumn this fall, and that's why our company, which started as a small paper shop and is known for its office supplies, is today a company that offers a wide range of workplace products and services. It is wonderful to make the world a better place – one workplace at a time, wherever that workplace might be. Thank you to our customers, partners, investors and personnel. Working with you is great, because we share the same values and goals.”
GROUP’S NET SALES AND RESULT PERFORMANCE
In January-September 2020 net sales totalled EUR 42.2 million (41.3), and in July-September EUR 12.4 million (12.0). Net sales increased between January-September by 2.3% (0.5) and by 3.2% (-7.8) in the third quarter. Agile development of the product portfolio, especially with topical hygiene products, and active sales work increased net sales during the whole reporting period and the third quarter.
In January-September 2020 the gross margin amounted to EUR 15.4 million (14.3) being 36.5% (34.8) of the net sales, and EUR 4.4 million (4.1) in the third quarter being 35.5% (34.2) of the net sales. New products were added to the portfolio quickly with features and quality that the customers appreciate. The development of the product portfolio and active sales work increased the gross margin for the reporting period and the third quarter.
In January-September 2020 employee benefit expenses amounted to EUR 8.8 million (8.8) and 20.8% (21.3) of net sales, and respectively, in the third quarter EUR 2.3 million (2.5), being 18.4% (21.0) of net sales. In exceptional circumstances, operations were adjusted by laying off personnel in the operations where the coronavirus situation affected diminishing the demand due to restrictions on traveling and gathering. This decreased the salary expenses by EUR 0.8 million. In addition, some permanent personnel reductions were made, and the salary expenses included compensation of ending employment relationships, that were actualized particularly in the second quarter. The personnel were encouraged to work actively in sales, particularly selling hygiene products. Especially the Group’s Expertise Sales segment grew rapidly, so the result-based compensations increased the salary expenses for the whole reporting period.
Other operating expenses were to EUR 3.2 million (3.8) in January-September 2020 being 7.5% (9.2) of net sales and respectively EUR 0.9 million (1.2) in the third quarter, being 7.3% (10.1) of net sales. 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. The other operating expenses decreased during the reporting period also as a result of adjustment measures taken due to the exceptional circumstances.
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-September 2020 EBITDA amounted to EUR 3.7 million (1.9), being 8.7% (4.7) of net sales, and EUR 1.3 million (0.4) in the third quarter, being 10.7% (3.6) of net sales.
The operating profit (EBIT) amounted to EUR 2.4 million (0.8), being 5.7% (2.0) of net sales and respectively EUR 0.9 million (0.1), 7.2% (0.5) in the third quarter. The comparable operating profit (EBIT) amounted to EUR 2.4 million (0.9), being 5.7% (2.2) of net sales, and respectively EUR 0.9 million (0.2), being 7.2% (1.5) of net sales in the third quarter.
In January-September 2020 the net of financial income and expenses totalled EUR -0.5 million (-0.3) including interest expenses EUR -0.1 million (-0.1) and mainly the net of currency-related other financial items and bank expenses EUR -0.4 million (-0.2). In the third quarter, the financial income and expenses totalled (net) EUR -0.1 million (-0.1).
In January-September 2020 the result before taxes was EUR 1.9 million (0.5), and in the third quarter EUR 0.8 million (-0.1). The comparable result before taxes was EUR 1.9 million (0.6), and in the third quarter EUR 0.8 million (0.0). In January-September 2020 the net profit was EUR 1.6 million (0.4) and in the third quarter EUR 0.7 million (-0.1). In January-September the comparable result was EUR 1.6 million (0.6) and in the third quarter EUR 0.7 million (0.0).
Earnings per share (EPS) were EUR 0.19 (0.06) in January-September 2020, and EUR 0.09 (-0,01) in the third quarter. Comparable earnings per share (EPS) were EUR 0.19 (0.08) in January-September 2020 and 0.09 (0.00) in the third quarter.
KEY FIGURES
| III | III | I-III | I-III | I-IV | |
| EUR 1000 | 2020 | 2019 | 2020 | 2019 | 2019 |
| Net sales | 12 425 | 12 035 | 42 227 | 41 263 | 56 344 |
| Change in net sales, % | 3.2% | -7.8% | 2.3% | 0.5% | 0.8% |
| Gross profit | 4 408 | 4 120 | 15 403 | 14 348 | 19 825 |
| Gross profit, % | 35.5% | 34.2% | 36.5% | 34.8% | 35.2% |
| EBITDA | 1 327 | 435 | 3 677 | 1 919 | 3 067 |
| EBITDA margin, % | 10.7% | 3.6% | 8.7% | 4.7% | 5.4% |
| Operating profit/loss | 899 | 59 | 2 390 | 807 | 1 570 |
| Operating profit/loss margin, % | 7.2% | 0.5% | 5.7% | 2.0% | 2.8% |
| Profit/Loss before taxes | 802 | -78 | 1 900 | 492 | 1 194 |
| Profit/Loss before taxes margin, % | 6.5% | -0.6% | 4.5% | 1.2% | 2.1% |
| Net profit/loss for the period attributable to equity holders of the parent company | 619 | -101 | 1 260 | 433 | 1 039 |
| Net profit/loss for the period, % | 5.0% | -0.8% | 3.0% | 1.1% | 1.8% |
| Earnings per share, EUR (diluted = non-diluted) | 0.09 | -0.01 | 0.19 | 0.06 | 0.15 |
| Return on equity (ROE), % | 5.0% | -0.8% | 12.1% | 3.7% | 8.5% |
| Return on investment (ROI), % | 3.9% | -0.1% | 9.5% | 3.4% | 7.9% |
| Equity-to-assets ratio at the end of period, % | 41.5% | 36.0% | 41.5% | 36.0% | 39.2% |
| Debt-to-equity ratio at the end of period | 62.6% | 93.7% | 62.6% | 93.7% | 66.2% |
| Equity per share at the end of period, EUR * | 1.95 | 1,66 | 1.95 | 1,66 | 1.76 |
| Investments in non-current assets | 27 | 825 | 388 | 7 069 | 7 359 |
| Investments in non-current assets, % of net sales | 0.2% | 6.9% | 0.9% | 17.1% | 13.1% |
| Treasury shares held by the Group at the end of period | 144 260 | 79 000 | 144 260 | 79 000 | 79 000 |
| Treasury shares, % of total share capital and votes | 2.1% | 1.1% | 2.1% | 1.1% | 1.1% |
| Average number of outstanding shares | 6 763 368 | 6 828 628 | 6 800 335 | 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 | 6 907 628 | 6 907 628 |
| Personnel on average during the period | 185 | 197 | 192 | 196 | 198 |
| Personnel at the end of period | 182 | 201 | 182 | 201 | 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 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. 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 the development of coronavirus conditions.
SUBSEQUENT EVENTS
The Group has not had any significant subsequent events.
MARKET SITUATION AND FUTURE OUTLOOK
The coronavirus pandemic and the changes it has brought have affected the actions of companies and people. Uncertainty about the development of the pandemic, measures to prevent the spread of the virus and the resulting exceptional circumstances have a significant and rapid impact on the world economy. These factors have increased business risks and weakened predictability.
For Wulff, the exceptional circumstances have both created additional sales opportunities and increased the risks of business operations. 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. The demand for workplace services and products is significantly impacted by employment rate, restrictions in meeting and gathering and alternation of locations of working. At the same time, the situation offers sales opportunities to Wulff: its more than 100 000 customers in the Nordic countries will need hygiene and workplace products for their use also during the changing conditions. Wulff’s strengths are sales expertise and adaptability which ensure that new product and service areas can generate sales and profit quickly. Supply range for the new products have increased as they have established their place in the product assortment. This will affect the generating of profit: for rest of the year, Wulff expects the development of the Expertise Sales segment to be more moderate than in the spring. In addition, the outlook assumes that the restrictions in Wulff’s operating countries will limit the number of people working in offices, so the sales of the basic office supplies during the last quarter will not reach the level of the comparison year.
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 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. Competition is tough in the traditional market and the new market has got a lot of opportunities. The market known as office world is developing and renewing itself as the market changes even more to workplace product and service marketplace, where work is done in several locations. In the future success requires especially for example product and service portfolio’s development further. Wulff believes that the future is bright due to the strong, constantly developing strategy, its way of working, 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 increase clearly from 2019 due to successful sales in the beginning of the year and adjustment measurements. In Wulff we believe that it is possible to build and make profitable business while people’s health and security are taken care of sustainably.
In Espoo on October 26, 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.