WULFF GROUP PLC’S ANNUAL ACCOUNTS JAN 1 – DEC 31, 2016: Net sales and comparable operating profit declined, dividend remains at the same level

WULFF GROUP: KEY POINTS JANUARY – DECEMBER 2016

  • In 2016, net sales totalled EUR 59.3 million (EUR 68.8 million). Net sales decreased by -13.8 percent (-7.3 %).
  • In 2016, EBITDA was EUR 1.0 million (EUR 2.0 million). In 2016, EBITDA included a sale of company cars of EUR 0.2 million affecting the comparability. In 2015, EBITDA included write downs of inventories and fixed assets of EUR 0.2 million affecting the comparability.
  • In 2016, comparable EBITDA was EUR 0.8 million (EUR 2.2 million).
  • In 2016, the operating profit (EBIT) amounted to EUR 0.6 million (EUR 0.5 million). In 2016, EBIT included a sale of company cars of EUR 0.2 million affecting the comparability. In 2015, EBIT included write downs of EUR 1.0 million regarding goodwill impairment and inventory and fixed assets write downs affecting the comparability.
  • In 2016, the comparable operating profit (EBIT) amounted to EUR 0.4 million (EUR 1.5 million).
  • Earnings per share (EPS) was EUR 0.05 (EUR -0.03) in 2016.
  • Equity-to-assets ratio increased to 50.5 percent (31.12.2015: 46.4 %).
  • Group CEO Topi Ruuska’s employment ended on September 2016. Wulff Group Plc’s Board of Directors named CFO Elina Rahkonen as an interim CEO while the recruiting process of a permanent CEO is going on.
  • The Board of Directors proposes to the Annual General Meeting to be held on April 6, 2017 that a dividend of EUR 0.10 per share will be paid. 
  • Wulff estimates the comparable operating profit to increase in 2017. 
1-12/2016 1-12/2015 10-12/2016 10-12/2015
Net sales, EUR million 59,3 68,8 15,8 18,6
EBITDA, EUR million 1,0 2,0 0,3 0,8
Comparable EBITDA, EUR million 0,8 2,2 0,3 0,8
Operating profit (EBIT), EUR million 0,6 0,5 0,2 0,5
Comparable operating profit (EBIT), EUR million 0,4 1,5 0,2 0,7
EPS, EUR 0,05 -0,03 0,04 0,08

WULFF GROUP’S CHAIRMAN OF THE BOARD OF DIRECTORS

Wulff Group’s Chairman of the Board of Directors:

In a constantly changing operating environment, it is more and more important for companies to develop their operations in the desired direction rapidly reacting. At Wulff, we are ready for change, renewal, and reform. I believe that in the future we will be recognized for creating workplaces. We enable working in environments where companies and entrepreneurs operate. Already, people work a lot away from the traditional office environment. New working environments and mobile work offer Wulff a possibility to grow in a novel market.

In 2016 we focused on our core business and ensuring its positive development in the future. The development of our net sales and profitability was however less successful than foreseen even though we managed to advance our business activities as planned. In 2017, we will focus on growing together. That means we will all strive to improve and grow personally and together as a company. And above all, it means growth and development by increasing our competitive advantage with our products and services to our customers. Brave renewal, hard work, developing our operations in cooperation with our customers and global economic recovery give us a solid starting point for a better result in 2017. 

GROUP’S NET SALES AND RESULT PERFORMANCE

In 2016 net sales totalled EUR 59.3 million (EUR 68.8 million). Net sales decreased by -13.8 percent (-7.3 %). The decrease in net sales without the effect of sold businesses was -11.5 percent. In the last quarter net sales totalled EUR 15.8 million (EUR 18.6 million) and decreased by -14.9 percent (-9.2 %). The last quarter’s net sales decrease was -13.7 percent without the effect of sold businesses. The good work in our customer interface and investments in our sales’ development have not yet shown as expected in the development of net sales. In Finland, the office supplies industry has begun to show signs of stimulation.

In 2016, Wulff Group’s EBITDA was EUR 1.0 million (EUR 2.0 million) being 1.7 percent (2.9 %) of net sales. In 2016, EBITDA included a sale of company cars of EUR 0.2 million affecting the comparability. In 2015, EBITDA included write downs of inventories and fixed assets from business gifts business of EUR 0.2 million. In 2016, comparable EBITDA was EUR 0.8 million (EUR 2.2 million) being 1.4 percent (3.2 %) of net sales.

In the fourth quarter, Wulff Group’s EBITDA was EUR 0.3 million (EUR 0.8 million) being 1.9 percent (4.3 %) of net sales. EBITDA did not include items affecting the comparability in 2016 and 2015.  

In 2016, the operating profit (EBIT) amounted to EUR 0.6 (EUR 0.5 million) being 1.0 percent (0.7 %) of net sales. In 2016, EBIT included EUR 0.2 million of sale of company cars affecting the comparability. In 2015, EBIT included a write of goodwill, inventories and fixed assets of EUR 1.0 million affecting the comparability. In 2016, the comparable operating profit was EUR 0.4 million (EUR 1.5 million) being 0.7 percent (2.2 %) of net sales. The comparable operating profit declined by EUR 1.1 million, half of which was created during the first half year period and half in the second half year period 2016. The development of the comparable operating profit was affected by the drop in net sales and investments in new customer acquisition. The Group will continue to invest in sales development, new customer acquisition and improving the efficiency of the business.

In the fourth quarter Wulff Group’s operating profit (EBIT) was EUR 0.2 million (EUR 0.5 million) being 1.3 percent (2.8 %) of net sales. The 2016 fourth quarter operating profit (EBIT) did not include items affecting the comparability. The 2015 fourth quarter operating profit included impairment of goodwill of EUR 0.1 million. In the fourth quarter the comparable operating profit (EBIT) was EUR 0.2 million (EUR 0.7 million) being 1.3 percent (3.6 %) of net sales. Typically in the industry and in the Group, the annual profit is made in the last quarter of the year.

In 2016 Wulff Group’s employee benefit expenses amounted to EUR 12.6 million, being 21.2 percent of net sales, and in 2015 EUR 13.5 million, being 19.6 percent of net sales. Employee benefit expenses amounted to EUR 3.2 million in the fourth quarter 2016, being 20.1 percent of net sales, and EUR 3.6 million in the fourth quarter 2015, being 19.3 percent of net sales. Other operating expenses amounted to EUR 7.4 million in 2016, being 12.5 percent of net sales, and EUR 8.0 million in 2015, being 11.7 percent of net sales. Other operating expenses were EUR 1.9 million in fourth quarter 2016, being 12.1 percent of net sales, and EUR 2.1 million in the fourth quarter 2015, being 11.1 percent of net sales. Employee benefit and other operating expenses were affected by divesting unprofitable businesses and improving efficiency of the operations. In 2017, Wulff Group continues to examine its cost structure to improve its profitability as part of ongoing reforms.

In 2016, the financial income and expenses totalled (net) EUR -0.2 million (EUR -0.2 million) including interest expenses of EUR 0.2 million (EUR 0.2 million) and mainly currency-related other financial items (net) EUR -0.0 million (EUR -0.0 million). In the fourth quarter the financial income and expenses totalled (net) EUR 0.0 million (EUR 0.0 million).

In 2016, the result before taxes was EUR 0.4 million (EUR 0.4 million). In 2015 the net profit after taxes was EUR 0.3 million (EUR -0.2 million). The net profit after taxes was EUR 0.2 million (EUR 0.5 million) in the fourth quarter.

Wulff Group’s earnings per share (EPS) was EUR 0.05 (EUR -0.03) in 2016. Earnings per share (EPS) was EUR 0.04 (EUR 0.08) in the fourth quarter.

KEY FIGURES

IV IV I-IV I-IV
EUR 1000 2016 2015 2016 2015
Net sales 15 811 18 585 59 304 68 820
Change in net sales, % -14,9 % -9,2 % -13,8 % -7,3 %
EBITDA 308 807 998 2 019
EBITDA margin, % 1,9 % 4,3 % 1,7 % 2,9 %
Operating profit/loss 207 521 583 505
Operating profit/loss margin, % 1,3 % 2,8 % 1,0 % 0,7 %
Profit/Loss before taxes 198 558 351 354
Profit/Loss   before taxes margin, % 1,3 % 3,0 % 0,6 % 0,5 %
Net   profit/loss for the period attributable to equity holders of the parent   company 231 520 302 -195
Net   profit/loss for the period, % 1,5 % 2,8 % 0,5 % -0,3 %
Earnings   per share, EUR (diluted = non-diluted) 0,04 0,08 0,05 -0,03
Return on equity (ROE), % 1,8 % 4,3 % 2,5 % -1,6 %
Return on investment (ROI), % 1,6 % 3,4 % 2,9 % 2,7 %
Equity-to-assets   ratio at the end of period, % 50,5 % 46,4 % 50,5 % 46,4 %
Debt-to-equity   ratio at the end of period 19,6 % 23,8 % 19,6 % 23,8 %
Equity   per share at the end of period, EUR * 1,78 1,84 1,78 1,84
Net   cash flow from operating activities 1 730 1 965 679 1 693
Investments   in non-current assets 203 3 319 161
Investments   in non-current assets, % of net sales 1,3 % 0,0 % 0,5 % 0,2 %
Treasury   shares held by the Group at the end of period 79 000 79 000 79 000 79 000
Treasury   shares, % of total share capital and votes 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
Personnel   on average during the period 207 229 214 233
Personnel   at the end of period 203 226 203 226

* 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 still affected by the organizations’ personnel lay-offs and cost-saving initiatives made during the economic downturn. The personnel lay-offs and cost-saving initiatives carried out in different organizations during the economic downturn affect the purchasing behaviour of our corporate customers. As economic uncertainty continues, the cost-saving measures continue to affect the purchasing behaviour of our corporate customers. The decreased amount of internationalization funding and the changes in the key for granting it by the Ministry of Employment and The Economy affect the companies’ chances to attend international fairs. 

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 FINANCIAL YEAR

After the end of the financial year on 31.1.2017, the Group decided on a financial arrangement that will see the available limit rise from 4.1 million euros to 4.6 million euros and repayments of long-term debts decrease from 0.9 million euros to 0.5 million euros as the loan period increases in 2017. The aforementioned agreement was signed and is binding in February 2017.

The Group has not had any other events after the financial year which would have a material impact on 2016 financial statements.

BOARD OF DIRECTORS’ PROPOSAL FOR THE ANNUAL RESULT    

The Group’s parent company Wulff Group Plc’s distributable funds totalled EUR 2.6 million. The Group’s net result attributable to the parent company shareholders was EUR 0.3 million, i.e. EUR 0.05 per share (EUR -0.03 per share). The Board of Directors proposes to the Annual General Meeting to be held on April 6th, 2017 that a dividend of EUR 0.10 per share will be paid for the financial year 2016 that is EUR 0.65 million and the remaining distributable funds will be transferred in retained earnings in the shareholders’ equity.

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 suited to them. The Group is prepared to carry out new strategic acquisitions and as a listed company Wulff has a great opportunity to be a more active player than its competitors.

The possible economic recovery will affect Wulff’s business positively. Wulff estimates the market situation to remain unchanged. Wulff’s goal is to continue to improve the profitability of its business operations. Wulff estimates the comparable operating profit for 2017 to 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 AND ANNUAL GENERAL MEETING 2017   

Wulff Group Plc will release the following financial reports in 2017:

Statutory Financial Statements 2016 Week 11/2017
Interim Report, January-March 2017 Thursday May 4, 2017
Interim Report, January-June 2017 Thursday August 3, 2017
Interim Report, January-September 2017 Thursday November 2, 2017

Wulff Group Plc’s Annual General Meeting will be held on Thursday April 6, 2017. A separate notice to the Annual General Meeting will be published prior to the meeting. 

In Helsinki on February 22, 2017

WULFF GROUP PLC

BOARD OF DIRECTORS

Further information:

Chairman of the Board of Directors Heikki Vienola

tel. +358 9 5259 0050 or mobile: +358 50 65 110

e-mail: heikki.vienola@wulff.fi

DISTRIBUTION

NASDAQ OMX Helsinki Oy

Key media

www.wulff-group.com

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