WULFFGROUP PLC’S HALF-YEAR FINANCIAL REPORT FOR JANUARY 1 – JUNE 30, 2017
HALF-YEAR FINANCIAL REPORT August 3, 2017 at 9:00 A.M.
Net sales declined and profitability decreased – the outlook for the comparable operating result remains unchanged
This is a summary of Wulff Group Plc’s half-year financial report for January-June 2017. Wulff Group’s half-year financial report for January-June 2017 is attached as a PDF file to this stock exchange release and is also available on the company’s website at the address www.wulffyhtiot.fi.
JANUARY – JUNE 2017 BRIEFLY
- Net sales totalled EUR 28.9 million (EUR 30.1 million). Net sales decreased by 4.1 percentages from the previous year.
- EBITDA was EUR 0.0 million (EUR 0.3 million). Comparable EBITDA was EUR 0.0 million (EUR 0.1 million).
- Operating profit (EBIT) was EUR -0.2 (EUR 0.1 million). Comparable operating profit (EBIT) amounted to EUR -0.2 million (EUR -0.1 million).
- Earnings per share (EPS) were EUR -0.05 (EUR -0.01).
- Equity-to-assets ratio was to 44.5 percentages (December 31, 2016: 50.5 %).
- The outlook for the 2017 comparable operating profit remains unchanged. Comparable operating profit 2017 is estimated to grow.
APRIL – JUNE 2017 BRIEFLY
- Net sales totalled EUR 13.5 million (EUR 14.6 million). Net sales decreased by 7.3 percentages from the previous year.
- EBITDA was EUR -0.2 million (EUR 0.5 million). Comparable EBITDA was EUR -0.2 million (EUR 0.4 million).
- Operating profit (EBIT) was EUR -0.3 million (EUR 0.4 million). Comparable operating profit (EBIT) was EUR -0.3 million (EUR 0.3 million).
- Earnings per share (EPS) were EUR -0.06 (EUR 0.04).
WULFF GROUP’S CEO KIMMO LAAKSONEN
“I believe that the developing economic situation will affect Wulff’s business positively during the rest of the year even though the market situation has remained challenging. Typically for the industry, a significant portion of the annual profit is made in the last quarter of the year. Wulff’s aim is to further improve the profitability of its operations and its competitiveness. Among other things, strengthening our competitiveness requires significant investments in building a winning strategy for the future, developing our sales and customer service, reacting quickly in our customer interface, and utilizing digitalization to our benefit.
Investing in tomorrow’s growth businesses is important for us, and renewal also requires that we sharpen our strategy. The initiated development projects are investments that will affect our result as expenses in 2017. Digitalization, automatization, new working environments and mobile work are a chance for Wulff to grow in a new market. Due to our own strong performance and our development projects, I believe that 2017 will be a year of positive development for us that will also lay a strong foundation for the upcoming years.”
GROUP’S NET SALES AND RESULT PERFORMANCE
In January-June 2017 net sales totalled EUR 28.9 million (EUR 30.1 million), and EUR 13.5 million (EUR 14.6 million in the second quarter. Net sales decreased by 4.1 percentages in January-June and 7.3 percentages in the second quarter. The decline in net sales is a result of lost contracts and trimming of the product range, among other things. Wulff has invested significantly in developing its range of products for the workplace which is believed to have a positive effect on the net sales during the rest of the year.
In January-June 2017 gross margin amounted to EUR 9.7 million (EUR 10.7 million) being 33.7 percentages (35.4 percentages), and EUR 4.5 million (EUR 5.6 million) in the second quarter being 33.4 percentages (38.2 percentages). The gross margin% decreased due to write-downs of inventories that were larger than during the previous year. Furthermore, the gross margin was affected by the concentration of demand on low margin products during the first half-year period. The continuous streamlining of procurement processes is one of Wulff’s most important measures to improve profitability.
In January-June 2017 employee benefit expenses amounted to EUR 6.4 million (EUR 6.8 million) being 22.0 percentages (22.7 percentages) of Net Sales, and EUR 3.1 million (EUR 3.4 million) in the second quarter being 23.2 percentages (23.1 percentages) of Net Sales. Other operating expenses amounted to EUR 3.4 million (EUR 3.8 million) in January-June 2017 being 11.9 percentages (12.7 percentages) of Net Sales, and EUR 1.6 million (EUR 1.9 million) in the second quarter being 12.0 percentages (12.8 percentages) of Net Sales. Employee benefit and other operating expenses were still affected by the implemented successful cost-saving measures. To improve its profitability, Wulff Group continues to examine its cost structure as part of ongoing reforms.
In January-June 2017 EBITDA was EUR 0.0 million (EUR 0.3 million) being 0.1 percentages (1.1 %) of net sales, and EUR -0.2 million (EUR 0.5 million) in the second quarter. In January-June 2017 the comparable EBITDA amounted to EUR 0.0 million (EUR 0.1 million) and EUR -0.2 million (EUR 0.4 million) in the second quarter. 2016 EBITDA included a car sales profit of EUR 0.2 million in January-June and of EUR 0.1 million in the second quarter that affected comparability. 2017 EBITDA did not include items affecting the comparability.
In January-June 2017 the operating profit (EBIT) amounted to EUR -0.2 million (EUR 0.1 million) being -0.6 percentages (0.4 percentages) of net sales, and EUR -0.3 million (EUR 0.4 million) in the second quarter. In January-June 2017 the comparable operating profit (EBIT) amounted to EUR -0.2 million (EUR -0.1 million) and EUR -0.3 million (EUR 0.3 million) in the second quarter. The January-June 2016 operating profit included a car sales profit of EUR 0.2 million and EUR 0.1 million in the second quarter that affected comparability.
In January-June 2017 the financial income and expenses totalled (net) EUR -0.1 million (EUR -0.2 million) including interest expenses of EUR 0.0 million (EUR 0.1 million) and mainly currency-related other financial items (net) EUR -0.1 million (EUR -0.1 million). In the second quarter, the financial income and expenses (net) totalled EUR -0.1 million (EUR -0.1 million).
In January-June 2017 the result before taxes was EUR -0.3 million (EUR -0.0 million), and EUR -0.4 million (EUR 0.3 million) in the second quarter.
In January-June 2017 the net profit was EUR -0.4 million (EUR -0.1 million), and EUR -0.4 million (EUR 0.3 million) in the second quarter. Earnings per share (EPS) were EUR -0.05 (EUR -0.01) in January-June 2017, and EUR -0.06 (EUR 0.04) in the second quarter.
KEY FIGURES
| II | II | I-II | I-II | I-IV | |
| EUR 1000 | 2017 | 2016 | 2017 | 2016 | 2016 |
| Net sales | 13 530 | 14 595 | 28 862 | 30 085 | 59 304 |
| Change in net sales, % | -7,3 % | -10,3 % | -4,1 % | -15,1 % | -13,8 % |
| EBITDA | -196 | 519 | 21 | 325 | 998 |
| EBITDA margin, % | -1,4 % | 3,6 % | 0,1 % | 1,1 % | 1,7 % |
| Operating profit/loss | -293 | 419 | -174 | 106 | 583 |
| Operating profit/loss margin, % | -2,2 % | 2,9 % | -0,6 % | 0,4 % | 1,0 % |
| Profit/Loss before taxes | -368 | 318 | -283 | -47 | 351 |
| Profit/Loss before taxes margin, % | -2,7 % | 2,2 % | -1,0 % | -0,2 % | 0,6 % |
| Net profit/loss for the period attributable to equity holders of the parent company | -395 | 280 | -345 | -81 | 302 |
| Net profit/loss for the period, % | -2,9 % | 1,9 % | -1,2 % | -0,3 % | 0,5 % |
| Earnings per share, EUR (diluted = non-diluted) | -0,06 | 0,04 | -0,05 | -0,01 | 0,05 |
| Return on equity (ROE), % | -3,7 % | 2,4 % | -3,2 % | -0,5 % | 2,5 % |
| Return on investment (ROI), % | -2,2 % | 3,1 % | -1,6 % | 0,1 % | 2,9 % |
| Equity-to-assets ratio at the end of period, % | 44,5 % | 48,6 % | 44,5 % | 48,6 % | 50,5 % |
| Debt-to-equity ratio at the end of period | 37,2 % | 24,7 % | 37,2 % | 24,7 % | 19,6 % |
| Equity per share at the end of period, EUR * | 1,62 | 1,73 | 1,62 | 1,73 | 1,78 |
| Net cash flow from operating activities | -541 | 587 | -858 | -62 | 679 |
| Investments in non-current assets | 179 | 0 | 317 | 26 | 319 |
| Investments in non-current assets, % of net sales | 1,3 % | 0,0 % | 1,1 % | 0,1 % | 0,5 % |
| 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 | 1,2 % | 1,2 % | 1,2 % | 1,2 % | 1,2 % |
| Number of total issued shares at the end of period | 6 607 628 | 6 607 628 | 6 607 628 | 6 607 628 | 6 607 628 |
| Personnel on average during the period | 197 | 217 | 201 | 221 | 214 |
| Personnel at the end of period | 199 | 216 | 199 | 216 | 203 |
RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
The demand for office supplies is strongly affected by the general economic development. Half of the Group’s net sales come from other than euro-currency countries. Fluctuation of the currencies affect the Group’s net result, however the effect of the fluctuation is expected to be moderate.
EVENTS AFTER THE REPORTING PERIOD
The Group has not had any significant events after the reporting period.
MARKET SITUATION AND FUTURE OUTLOOK
Wulff is the most significant Nordic player in its field. Wulff’s mission is to help its corporate customers to succeed in their own business by providing them with leading-edge products and services in a way best suitable to them. Wulff is prepared 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 affects Wulff’s business positively. Wulff’s aim is to further improve the profitability of its operations. Wulff estimates that its 2017 comparable operating profit will increase. 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 2017:
| Interim Report, January-September 2017 | Thursday November 2, 2017 |
In Vantaa on August 2, 2017
WULFF GROUP PLC
BOARD OF DIRECTORS
Further information:
CEO Kimmo Laaksonen
tel. 0300 870 414 or 050 469 3060
e-mail: kimmo.laaksonen@wulff.fi
DISTRIBUTION
NASDAQ OMX Helsinki Oy
Key media
www.wulff-group.com