Wulff Group Plc’s Interim Report for January 1 – June 30, 2013

INTERIM REPORT                 August 6, 2013 at 9:00 A.M.

WULFF GROUP PLC’S INTERIM REPORT FOR JANUARY 1 – JUNE 30, 2013

Market Situation Remained Difficult, Net Sales and Operating Result below last year’s level

  • Net sales totalled EUR 43.5 million (EUR 45.4 million) in January-June and EUR 20.7 million (EUR 22.0 million) in the second quarter.
  • In January-June, EBITDA was EUR -0.08 million (EUR 0.84 million) being -0.2 percentages (1.9 %) of net sales. In the second quarter, EBITDA was EUR -0.49 million (EUR 0.36 million) being -2.3 percentages (1.7 %) of net sales. 
  • In January-June, operating result (EBIT) was EUR -0.65 million (EUR 0.32 million) being -1.5 percentages (0.7 %) of net sales. In the second quarter, operating result (EBIT) was EUR -0.77 million (EUR 0.11 million).
  • Earnings per share (EPS) were EUR -0.11 (EUR 0.03) in January-June and EUR -0.12 (EUR 0.00) in the second quarter.
  • Equity-to-assets ratio was 42.6 percentages (December 31, 2012: 44.3 %).
  • Equity per share amounted to EUR 2.30 (December 31, 2012: EUR 2.51).
  • In spring 2013 Wulff established its fair service sales in the Swedish markets.

GROUP’S NET SALES AND RESULT PERFORMANCE

Net sales totalled EUR 43.5 million (EUR 45.4 million) in January-June and EUR 20.7 million (EUR 22.0 million) in the second quarter. Net sales decreased by four percentages from last year. In January-June, EBITDA was EUR -0.08 million (EUR 0.84 million) being -0.2 percentages (1.9 %) of net sales. In the second quarter, EBITDA was EUR -0.49 million (EUR 0.36 million) being -2.3 percentages (1.7 %) of net sales.  In January-June, operating result (EBIT) was EUR -0.65 million (EUR 0.32 million) being -1.5 percentages (0.7 %) of net sales. In the second quarter, operating result (EBIT) was EUR -0.77 million (EUR 0.11 million). The general economic situation remained difficult which impacted the demand in the office supply markets. The Group continues to review its expense structure and optimise its operations to improve the profitability of its businesses.

Wulff Group’s CEO Heikki Vienola: “The difficult market situation has decreased the demand for our products and services. It is probable that we will not reach the operating profit level of year 2012. Large companies and groups adjust their operations with personnel layoffs and diminishing their operations, which has had a direct impact on our sales. It has been essential to react quickly to the market situation and we have adjusted our own operations and cost structure. Our organizational changes and cost saving programs will affect our result positively during the second half of the year. We strongly believe that focusing on key issues brings results. Following our strategy, we focus on constant improvement of Wulff’s competitiveness and the most cost-conscious operations. When the markets get more active we are in a good position as the industry pioneer and the most professional partner to serve the customers as broadly and versatile as possible. In the times of a weak general economy, the customers seek especially for partners with cost-saving solutions – and this is something Wulff can offer. For instance, our web shop Wulffinkulma.fi is a quick and cost-efficient purchasing channel of office products for small and mid-sized companies as well as consumers.”

In January-June the financial income and expenses totalled (net) EUR -0.29 million (EUR -0.04 million) including dividend income of EUR 0.01 million (EUR 0.02 million), interest expenses of EUR 0.09 million (EUR 0.13 million) and mainly currency-related other financial items (net) EUR -0.21 million (EUR +0.07 million). In the second quarter the financial income and expenses totalled (net) EUR -0.24 million (EUR -0.05 million).

The result before taxes was EUR -0.94 million (EUR 0.28 million) in January-June and EUR -1.01 million (EUR 0.06 million) in the second quarter. The net result after taxes was EUR -0.72 million (EUR 0.23 million) in January-June and EUR -0.77 million (EUR 0.05 million) in the second quarter. Earnings per share (EPS) were EUR -0.11 (EUR 0.03) in January-June and EUR -0.12 (EUR 0.00) in the second quarter.

Return on investment (ROI) was -3.4 percentages (1.6 %) in January-June and -3.7 percentages (0.4 %) in the second quarter. Return on equity (ROE) was -4.2 percentages (1.3 %) in January-June and -4.5 percentages (0.3 %) in the second quarter.

CONTRACT CUSTOMERS DIVISION

The Contract Customers Division is the customer’s comprehensive partner in the field of office supplies, IT supplies, business and promotional gifts as well as international fair services. In January-June the division’s net sales totalled EUR 36.6 million (EUR 38.0 million) and operating result was EUR -0.03 (EUR 0.9 million). In the second quarter the net sales totalled EUR 17.1 million (EUR 18.4 million) and operating result was EUR -0.5 million (EUR 0.4 million). The general economic situation and the decrease in the products’ demand have led to the decrease in net sales.

International fair services are an even more significant part of Wulff’s business. In spring 2013 Wulff Entre established its fair service sales in the Swedish markets by opening its own operations in the Southern Sweden. Wulff Entre’s investments in sales and its development have resulted in both stronger customer relationships and an increase in clientele in Finland, Russia and Germany. Also in Sweden Wulff Entre has won new customers who have already given good feedback on Wulff Entre’s services and know-how. In 2013 Wulff Entre exports Finnish companies’ know-how to more than 30 countries. Wulff Entre is the market leader in its field in Finland and the customers have had a solid trust in Wulff Entre’s ability to find the right international venues for over 90 years already.

The net sales and profitability of Wulff’s Scandinavian operator Wulff Supplies AB have remained at a good level and the company has managed to attract new contract customers constantly. Today almost 50 percent of the Group’s net sales come from Scandinavia and Wulff’s position in the Scandinavian market continues to strengthen. Wulff Supplies serves the Group’s Scandinavian and pan-Nordic customers.

The Group’s webstore Wulffinkulma.fi has shown good growth and profit. According to the strategy, Wulff has developed the Wulff brand, its sales channels and its whole service range to be more versatile and ecological. Wulff stores serve locally small and mid-sized corporate customers, entrepreneurs and consumers. In summer 2013 Wulff Helsinki store moved to new premises in Konala, Helsinki. The new store is located along excellent traffic routes in a business centre which enables to attract plenty of new customers. This year for the first time, the stores exhibit the Group’s entire product range, Wulff’s Green products and recycling centres. The stores exhibit also seasonal business gifts.

Traditionally the Contract Customers Division’s result is affected by the cycles of the business and promotional gift market: the majority of the products are delivered and the majority of the annual profit is generated in the second and the last quarter of the year. The business and promotional gift markets have not recovered back to the previous years’ level. Wulff’s customers’ own cost-savings and efficiency improvement initiatives have impacted negatively the demand for the Group’s business and promotional gifts.

DIRECT SALES DIVISION

The Direct Sales Division aims to improve its customers’ daily operations with innovative products as well as the industry’s most professional personal and local service. In January-June the division’s net sales totalled EUR 6.9 million (EUR 7.4 million) and operating result was EUR -0.1 (EUR -0.1 million). In the second quarter the net sales totalled EUR 3.7 million (EUR 3.7 million) and operating result was EUR -0.04 (EUR 0.01 million).

The Division’s profitability is improved by concentrating on profitable product and service fields and by optimising the operations’ efficiency. Wulff invests strongly in the development of the product and service range and aims to increase the synergy of the purchasing operations by group-wide competitive bidding and cooperation. Unifying the sales support systems improve the sales operations.

Wulff’s sales growth is fuelled most importantly by the sales personnel. Successful recruiting affects especially the performance of Direct Sales. New sales personnel are being actively hunted by the recruitment professionals. Wulff’s own introduction and training programmes ensure that every sales person gets both a comprehensive starting training and further education on how to improve one’s own know-how. Wulff is prepared to employ even 100 new sales persons in Finland and in Scandinavia.

FINANCING, INVESTMENTS AND FINANCIAL POSITION

The cash flow from operating activities was EUR -1.6 million (EUR 0.4 million) in January-June and EUR 0.3 million (EUR 0.7 million) in the second quarter. Typically in this industry the result and cash flow are generated in the last quarter. A total of EUR 0.8 million less working capital was tied in the inventories than a year ago.

For its fixed asset investments the Group paid a net of EUR 0.51 million (EUR 0.32 million) in January-June and EUR 0.07 million (EUR 0.16 million) in the second quarter. The parent company shareholders were paid dividends of EUR 0.52 million (EUR 0.46 million) and the subsidiaries’ non-controlling shareholders were paid dividends of EUR 0.11 million (EUR 0.07 million). The Group paid EUR 0.03 million for the acquisition of non-controlling interests in Wulff Supplies AB to the subsidiary’s key person. The Group raised loans of net EUR 1.11 million (EUR 0.53 million, net) in January-June. Loans of EUR 0.17 million net (EUR 0.64 million net) were paid back in the second quarter.

In general the Group’s cash balance decreased by EUR 1.7 million in January-June (EUR -1.0 million). The Group’s bank and cash funds totalled EUR 2.7 million in the beginning of the year and EUR 1.1 million in the end of the reporting period.

In the end of June 2013 the Group’s equity-to-assets ratio was 42.6 percentages (December 31, 2012:
44.3 %). Equity attributable to the equity holders of the parent company amounted to EUR 2.30 per share (December 31, 2012: EUR 2.51).

SHARES AND SHARE CAPITAL

Wulff Group Plc’s share is listed on NASDAQ OMX Helsinki in the Small Cap segment under the Industrials sector. The company’s trading code is WUF1V. In the end of the reporting period the share was valued at EUR 1.77 (EUR 1.90) and the market capitalization of the outstanding shares totalled EUR 11.6 million (EUR 12.4 million).

In January-June 2013 no own shares were reacquired. As a part of Wulff Group’s key personnel’s share-based incentive plan introduced in February 2011, the Board of Directors decided in May 2013 to grant 6,000 treasury shares without compensation to the Group’s key person who may not transfer the shares during a restriction period of two years. In the end of June 2013, the Group held 79,000 (June 30, 2012: 85,000) own shares representing 1.2 percentage (1.3 %) of the total number and voting rights of Wulff shares. According to the Annual General Meeting’s authorisation on April 10, 2013, the Board of Directors decided in its organizing meeting to continue the acquisition of its own shares, by acquiring a maximum of 300.000 own shares by April 30, 2014.

 
 

PERSONNEL

In January-June 2013 the Group’s personnel totalled 321 (333) employees on average. In the end of June the Group had 315 (321) employees of which 118 (121) persons were employed in Sweden, Norway, Denmark or Estonia.

The majority, approximately 60 percentages, of the Group’s personnel works in sales operations and approximately 40 percentages of the employees work in sales support, logistics and administration. The personnel consists approximately half-and-half of men and women.

Wulff’s themes for 2013 are “Professional care for customers and personnel alike” and “Becoming the masters in giving and utilizing feedback”. Wulff has received plenty of positive feedback on the renewing of its training and development programs. The coaching-style leadership and the ‘100-percent-responsibility’ working attitude have a significant role in building a well-being, developing and successful organization. Wulff’s culture means that everyone understands the significance of their own work: each and everyone at Wulff can influence a customer’s unique Wulff experience in a positive way.

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 general uncertainty may still continue which will most likely affect the ordering behaviour of some corporate clients.

Although the business gifts are seen increasingly as a part of the corporate communications as a whole and they are utilized also in the off-season, some cost savings may be sought after by decreasing the investments in the brand promotion. The ongoing economic uncertainties impact especially the demand for business and promotional gifts. During the uncertain economic periods, the corporations may also minimize attending fairs.

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 financial position.

MARKET SITUATION AND FUTURE OUTLOOK

Wulff is the most significant Nordic player in its industry. 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. The markets have been consolidating in the past few years and the Nordic markets are expected to consolidate in the future as well. Wulff is prepared to carry out new strategic acquisitions.

The markets have not improved as expected and the demand for Wulff’s products has decreased from last year. Based on the Group management’s outlook for 2013, it seems probable that the last year’s operating profit level will not be reached. The cost-efficiency improvement actions have been taken as planned and the Group concentrates on the internal actions with the strongest effect on profitability. The Group continues taking actions for enhancing profitability. The Group focuses on sales activities and the development of its sales operations. The Group expects to win new customers and gain growth especially along with Wulff Supplies AB in Scandinavia and with the webstore Wulffinkulma.fi in Finland. Typically in the industry, the annual profit is made in the last quarter of the year.

FINANCIAL REPORTING 2013

Wulff Group Plc will release its interim report for January-September 2013 on Tuesday November 5, 2013.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

INCOME STATEMENT II II I-II I-II I-IV
EUR 1000 2013 2012 2013 2012 2012
Net sales 20 743 22 039 43 485 45 365 90 238
Other operating income 14 34 55 122 200
Materials and services -13 800 -14 078 -28 452 -28 962 -58 260
Employee benefit expenses -4 626 -4 867 -9 474 -9 939 -18 755
Other operating expenses -2 817 -2 764 -5 692 -5 747 -11 155
EBITDA -486 364 -79 840 2 269
Depreciation and amortization -283 -258 -570 -519 -1 136
Operating profit/loss -769 106 -649 321 1 132
Financial income -44 28 64 126 272
Financial expenses -191 -75 -356 -167 -413
Profit/Loss before taxes -1 005 58 -941 281 990
Income taxes 240 -10 224 -54 -100
Net profit/loss for the period -765 47 -717 227 890
           
Attributable to:          
   Equity holders of the parent company -760 25 -731 198 717
   Non-controlling interest -5 23 14 28 173
           
Earnings per share for profit          
attributable to the equity holders          
of the parent company:          
Earnings per share, EUR -0,12 0,00 -0,11 0,03 0,11
(diluted = non-diluted)          
           
           
STATEMENT OF COMPREHENSIVE INCOME II II I-II I-II I-IV
EUR 1000 2013 2012 2013 2012 2012
Net profit/loss for the period -765 47 -717 227 890
Other comprehensive income which may be reclassified to profit or loss subsequently (net of tax)          
Change in translation differences -222 22 -122 89 181
Fair value changes on available-for-sale investments -17 -33 -31 -5 -22
Total other comprehensive income -239 -11 -153 84 159
Total comprehensive income for the period -1 003 37 -870 311 1 049
           
Total comprehensive income attributable to:          
   Equity holders of the parent company -953 13 -857 252 839
   Non-controlling interest -50 24 -13 59 210

STATEMENT OF FINANCIAL POSITION     June 30 June 30 Dec 31
EUR 1000     2013 2012 2012
ASSETS          
Non-current assets          
Goodwill     9 491 9 500 9 546
Other intangible assets     1 343 1 218 1 308
Property, plant and equipment     1 757 2 137 1 890
Non-current financial assets          
   Interest-bearing financial assets     35 78 43
   Non-interest-bearing financial assets     277 361 327
Deferred tax assets     2 358 1 835 1 972
Total non-current assets     15 260 15 129 15 085
           
Current assets          
Inventories     9 293 10 060 10 236
Current receivables          
   Interest-bearing receivables     20 52 16
   Non-interest-bearing receivables     14 548 15 085 13 350
Financial assets recognised at fair value through profit/loss     3 60 78
Cash and cash equivalents     1 056 1 469 2 749
Total current assets     24 919 26 725 26 429
           
TOTAL ASSETS     40 179 41 854 41 513
           
EQUITY AND LIABILITIES          
Equity          
Equity attributable to the equity holders of the parent company:          
   Share capital     2 650 2 650 2 650
   Share premium fund     7 662 7 662 7 662
   Invested unrestricted equity fund     223 223 223
   Retained earnings     4 476 5 257 5 849
Non-controlling interest     1 110 1 135 1 283
Total equity     16 121 16 928 17 667
           
Non-current liabilities          
Interest-bearing liabilities     5 462 6 633 6 008
Deferred tax liabilities     92 121 102
Total non-current liabilities     5 554 6 754 6 109
           
Current liabilities          
Interest-bearing liabilities     3 342 2 378 1 685
Non-interest-bearing liabilities     15 162 15 794 16 052
Total current liabilities     18 504 18 172 17 737
           
TOTAL EQUITY AND LIABILITIES     40 179 41 854 41 513
STATEMENT OF CASH FLOW II II I-II I-II I-IV
EUR 1000 2013 2012 2013 2012 2012
           
Cash flow from operating activities:          
   Cash received from sales 20 800 22 918 42 293 46 369 93 018
   Cash received from other operating
   income
20 6 65 22 65
   Cash paid for operating expenses -20 328 -22 189 -43 508 -45 563 -89 063
Cash flow from operating activities before financial items and income taxes 491 736 -1 150 827 4 020
   Interest paid -30 -6 -84 -81 -169
   Interest received 11 1 19 32 39
   Income taxes paid -200 -55 -402 -415 -592
Cash flow from operating activities 273 676 -1 618 365 3 297
           
Cash flow from investing activities:          
   Investments in intangible and
   tangible assets
-76 -193 -566 -517 -946
   Proceeds from sales of intangible
   and tangible assets
7 37 53 202 269
   Disposal of other non-current
   investments
        12
   Loans granted -3 -6 -6 -6 -13
   Repayments of loans receivable   1 33 5 8
Cash flow from investing activities -72 -160 -485 -316 -670
           
Cash flow from financing activities:          
   Dividends paid -611 -491 -632 -531 -531
   Dividends received     7 20 20
   Payments for subsidiary share
   acquisitions
  -2 -33 -129 -129
   Payments received for subsidiary
   share disposals
  81   81 81
   Cash paid for (received from)
   short-term investments (net)
5 8 82 -3 -32
   Withdrawals and repayments of
   short-term loans
129 -79 1 890 156 -254
   Withdrawals of long-term loans       355 355
   Repayments of long-term loans -295 -557 -778 -1 044 -1 952
Cash flow from financing activities -772 -1 039 536 -1 096 -2 443
           
Change in cash and cash equivalents -571 -523 -1 566 -1 048 184
Cash and cash equivalents at the beginning of the period 1 747 1 973 2 749 2 464 2 464
Translation difference of cash -120 18 -127 52 101
Cash and cash equivalents at the end of the period 1 056 1 469 1 056 1 469 2 749

STATEMENT OF CHANGES IN EQUITY

EUR 1000 Equity attributable to equity holders of the parent company  
      Fund            
      for in            
      vested            
      non   Trans Re   Non  
    Share re   lation tai   cont  
    pre strict   diffe ned   rolling  
* net of tax Share mium ed Own ren Earn   inte  
  capital fund equity shares ces ings Total rest TOTAL
Equity on Jan 1, 2012 2 650 7 662 223 -283 -116 5 860 15 996 1 198 17 195
Net profit / loss for the period           198 198 28 227
Other comprehens. income*:                  
   Change in translation diff         58   58 31 89
   Fair value changes on
   available-for-sale inv.
          -5 -5   -5
Comprehensive income *         58 194 252 59 311
Dividends paid           -457 -457 -74 -531
Treasury share disposal       11   -11 0   0
Share- based payments           1 1   1
Changes in ownership             0 -48 -48
Equity on June 30, 2012 2 650 7 662 223 -272 -58 5 587 15 793 1 135 16 928
                   
Equity on Jan 1, 2012 2 650 7 662 223 -283 -116 5 860 15 996 1 198 17 195
Net profit / loss for the period           717 717 173 890
Other comprehens. income*:                  
   Change in translation diff         144   144 37 181
   Fair value changes on
   available-for-sale
   investments
          -22 -22   -22
Comprehensive income *         144 695 839 210 1 049
Dividends paid           -457 -457 -77 -534
Treasury share disposal       11   -11 0   0
Share- based payments           5 5   5
Changes in ownership             0 -48 -48
Equity on Dec 31, 2012 2 650 7 662 223 -272 28 6 093 16 384 1 283 17 667
                   
Equity on Jan 1, 2013 2 650 7 662 223 -272 28 6 093 16 384 1 283 17 667
Net profit / loss for the period           -731 -731 14 -717
Other comprehens. income*:                  
   Change in translation diff         -95   -95 -27 -122
   Fair value changes on
   available-for-sale
   investments
          -31 -31   -31
Comprehensive income *         -95 -762 -857 -13 -870
Dividends paid           -522 -522 -110 -632
Treasury share disposal       12   -12 0   0
Share- based payments           5 5   5
Changes in ownership             0 -49 -49
Equity on June 30, 2013 2 650 7 662 223 -260 -67 4 803 15 011 1 110 16 121

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION II II I-II I-II I-IV
EUR 1000 2013 2012 2013 2012 2012
           
Net sales by operating segments          
Contract Customers Division 17 124 18 380 36 611 37 953 76 250
Direct Sales Division 3 661 3 699 6 914 7 446 14 023
Group Services 192 295 394 588 1 079
Intersegment eliminations -234 -335 -435 -622 -1 114
TOTAL NET SALES 20 743 22 039 43 485 45 365 90 238
           
Operating profit/loss by operating segments          
Contract Customers Division -492 350 -26 854 2 041
Direct Sales Division -40 5 -127 -89 -38
Group Services and non-allocated items -237 -250 -496 -444 -872
TOTAL OPERATING PROFIT/LOSS -769 106 -649 321 1 132
KEY FIGURES II II I-II I-II I-IV
EUR 1000 2013 2012 2013 2012 2012
Net sales 20 743 22 039 43 485 45 365 90 238
Change in net sales, % -5,9 % -9,6 % -4,1 % -8,6 % -9,0 %
EBITDA -486 364 -79 840 2 269
EBITDA margin, % -2,3 % 1,7 % -0,2 % 1,9 % 2,5 %
Operating profit/loss -769 106 -649 321 1 132
Operating profit/loss margin, % -3,7 % 0,5 % -1,5 % 0,7 % 1,3 %
Profit/Loss before taxes -1 005 58 -941 281 990
Profit/Loss before taxes margin, % -4,8 % 0,3 % -2,2 % 0,6 % 1,1 %
Net profit/loss for the period attributable to equity holders of the parent company -760 25 -731 198 717
Net profit/loss for the period, % -3,7 % 0,1 % -1,7 % 0,4 % 0,8 %
Earnings per share, EUR (diluted = non-diluted) -0,12 0,00 -0,11 0,03 0,11
Return on equity (ROE), % -4,52 % 0,28 % -4,24 % 1,33 % 5,11 %
Return on investment (ROI), % -3,70 % 0,41 % -3,37 % 1,55 % 4,67 %
Equity-to-assets ratio at the end of period, % 42,6 % 42,9 % 42,6 % 42,9 % 44,3 %
Debt-to-equity ratio at the end of period 47,7 % 43,8 % 47,7 % 43,8 % 27,6 %
Equity per share at the end of period, EUR * 2,30 2,42 2,30 2,42 2,51
Investments in non-current assets 70 209 535 519 972
Investments in non-current assets, % of net sales 0,3 % 0,9 % 1,2 % 1,1 % 1,1 %
Treasury shares held by the Group at the end of period 79 000 85 000 79 000 85 000 85 000
Treasury shares, % of total share capital and votes 1,2 % 1,3 % 1,2 % 1,3 % 1,3 %
Number of total issued shares at the end of period 6607628 6607628 6607628 6607628 6607628
Personnel on average during the period 320 333 321 333 343
Personnel at the end of period 315 321 315 321 326

* Equity attributable to the equity holders of the parent company / Number of shares excluding the acquired own shares

QUARTERLY KEY FIGURES II I IV III II I
EUR 1000 2013 2013 2012 2012 2012 2012
Net sales 20 743 22 742 25 105 19 768 22 039 23 326
EBITDA -486 407 959 470 364 476
Operating profit/loss -769 120 637 174 106 216
Profit/Loss before taxes -1 005 64 525 184 58 223
Net profit/loss for the period attributable to the equity holders of the parent company -760 29 369 150 25 174
Earnings per share, EUR (diluted = non-diluted) -0,12 0,00 0,06 0,02 0,00 0,03
RELATED PARTY TRANSACTIONS II II I-II I-II I-IV
EUR 1000 2013 2012 2013 2012 2012
Sales to related parties 46 37 108 91 203
Purchases from related parties 8 4 58 9 80
Current non-interest-bearing receivables from related parties 21 0 21 0 0
Non-current interest-bearing receivables from related parties 0 68 0 68 33
Current non-interest-bearing liabilities to related parties 0 0 0 0 0
COMMITMENTS     June 30 June 30 Dec 31
EUR 1000     2013 2012 2012
Mortgages and guarantees on own behalf          
   Business mortgage for the Group’s loan liabilities     7 550 7 550 7 550
   Real estate pledge for the Group’s loan liabilities     900 900 900
   Subsidiary shares pledged as security for
   group companies’ liabilities
    4 018 4 018 4 018
   Other listed shares pledged as security for
   group companies’ liabilities
    145 209 187
   Current receivables pledged as security for
   group companies’ liabilities
    254 265 272
   Pledges and guarantees given for the group companies’    
   off-balance sheet commitments
    219 227 232
Guarantees given on behalf of third parties     81 145 114
Minimum future operating lease payments     5 451 5 966 6 033
               

Accounting principles applied in the condensed consolidated financial statements

These condensed consolidated financial statements are unaudited. This report has been prepared in accordance with IAS 34 following the valuation and accounting methods guided by IFRS principles. The accounting principles used in the preparation of this report are consistent with those described in the previous year’s Financial Statement taking into account also the possible new, revised and amended standards and interpretations. Income tax is the amount corresponding to the actual effective rate based on year-to-date actual tax calculation.

The IFRS principles require the management to make estimates and assumptions when preparing financial statements. Although these estimates and assumptions are based on the management’s best knowledge of today, the final outcome may differ from the estimated values presented in the financial statements.

A part of the Group’s loan agreements include covenants, according to which the equity ratio shall be 35 percentages at minimum and the interest-bearing debt/EBITDA ratio shall be 3.5 at maximum in the end of each financial year. On December 31, 2012 the covenants were reached successfully. The equity ratio of 44.3 % exceeded the required level and the interest-bearing debt/EBITDA ratio was below 3.5 in accordance with the covenants. According to the loan agreements, the covenants are tested next time at year end December 31, 2013.

The Group has no knowledge of any significant events after the end of the financial period that would have had a material impact on this report in any other way that has been already discussed in the review by the Board of Directors.

In Vantaa on August 5, 2013

WULFF GROUP PLC

BOARD OF DIRECTORS

Further information:

CEO 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