WULFF GROUP PLC’S INTERIM REPORT FOR JANUARY 1 – JUNE 30, 2015

Operating result without non-recurring items turned positive

This is a summary of Wulff Group Plc’s interim report for January-June 2015. Wulff Group’s interim report for January-June 2015 is attached as a  PDF file to this stock exchange release and is also available on the company’s website at the addresshttp://www.wulff.fi/en/wulff+group+plc/home/

JANUARY – JUNE 2015 BRIEFLY

  • Net sales totalled EUR 35.4 million (EUR 37.3 million). Net sales decreased by 5.0 percentages from the previous year.
  • EBITDA without non-recurring items was EUR 0.8 million (EUR 0.1 million). EBITDA was EUR 0.6 million (EUR 0.1 million).
  • Operating profit (EBIT) without non-recurring items amounted to EUR 0.5 million (EUR -0.4 million). Operating profit (EBIT) without non-recurring items increased by EUR 0.9 million in the first half of the financial year. Operating profit (EBIT) was EUR -0.4 (EUR -0.4 million).
  • Earnings per share (EPS) without non-recurring items were EUR 0.07 (EUR -0.06). Earnings per share (EPS) were EUR -0.14.
  • Equity-to-assets ratio increased to 44.3 percentages during the first half of the financial year (December 31, 2014: 39.5 %).
  • Wulff Group sold its business and advertising gifts business in May 2015 to IDÉ House of Brands Finland Oy for the price of EUR 0.8 million. As a result of the sale the Group booked non-recurring write-downs of EUR -0.9 million.
  • The operating profit (EBIT) without non-recurring items for 2015 is estimated to be positive.

  January – June 2015 January – June 2014 April – June 2015 April – June 2014
Net sales, EUR million 35.4 37.3 16.3 17.5
Operating profit without non-recurring items, EUR million 0.5 -0.4 0.3 -0.4
Operating profit, EUR million -0.4 -0.4 -0.6 -0.4
Profit/loss before taxes, EUR million -0.5 -0.6 -0.7 -0.6
EPS, EUR -0.14 -0.06 -0.12 -0.07
EPS without non-recurring items, EUR 0.07 -0.06 0.04 -0.07

WULFF GROUP’S CEO HEIKKI VIENOLA

Wulff Group’s CEO Heikki Vienola:

“During the interim period, Wulff focused even more on its core business. As per its strategy, Wulff continued to sell operations that are not part of its core business and the business and advertising gifts business was sold. The negative effect of this action on the result in the second quarter of the year was approximately 0.9 million euros. In the long run, the sale of the business and advertising gifts business is expected to improve the Groups’ result and cash flow.                                                                                                                                                                                          

In an unstable economic environment, it is especially pleasing to achieve positive economic development. When the company’s course is steady and its operations strategic and developed with the customer in mind, the positive effects can also be seen in the result. Our cash flow from operating activities was positive during the second quarter. Our equity-to-assets ratio has risen and our net debt with interest is notably smaller than last year. Our financial position is also stronger than before and the successful cost-saving measures that were started in 2013 have created a good base for the continuous development of our business and strengthening our competitive position. 

August 23rd is a special day for Wulff, our customers, and cooperation partners. We will celebrate our 125th year then. Few companies can say that they have survived two world wars, a great depression, and numerous shifts in the markets. Wulff can. One of the most important reasons for our success is – and always has been – the easiness of buying. It is important to know your customers and know what goods and services they need and how they want to acquire them. Through our different sales channels, the Group is a flexible and efficient partner to businesses of all sizes: we have a non-exclusive webstore Wulffinkulma.fi, a Contract Customers Division, regional sales professionals and stores.”   

GROUP’S NET SALES AND RESULT PERFORMANCE

In January-June 2015 net sales totalled EUR 35.4 million (EUR 37.3 million), and EUR 16.3 million (EUR 17.5 million in the second quarter. In January-June EBITDA was EUR 0.6 million (EUR 0.1 million) being 1.8 percentages (0.3 %) of net sales, and EUR 0.3 million (EUR -0.2 million) in the second quarter. The second quarter EBITDA was affected by non-recurring inventory and fixed assets write-downs of EUR 0.2 million caused by the business and advertising gifts business sale in May 2015. In January-June 2015 EBITDA without non-recurring items was EUR 0.8 million (EUR 0.1 million), and EUR 0.5 million (EUR -0.2 million) in the second quarter.

In January-June 2015 the operating profit (EBIT) amounted to EUR -0.4 million (EUR -0.4 million) being -1.3 percentages (-1.0 percentages) of net sales, and EUR -0.6 million (EUR -0.4 million) in the second quarter. The first half year period EBIT was affected by non-recurring inventory and fixed assets write-downs of EUR 0.2 million related to the business and advertising gifts business sale and a non-recurring goodwill write-down of EUR 0.7 million related to the business and advertising gifts business sale. In January-June 2015 the operating profit (EBIT) without non-recurring items amounted to EUR 0.5 million (EUR -0.4 million). The operating profit (EBIT) without non-recurring items improved by EUR 0.9 million in January-June 2015, which was mainly achieved by systematically executing cost-saving measures. Typically in the industry and in the Group, the annual profit is made in the last quarter of the year.

In January-June 2015 employee benefit expenses amounted to EUR 7.2 million (EUR 8.4 million), and EUR 3.5 million (EUR 4.1 million) in the second quarter. Other operating expenses amounted to EUR 4.2 million (EUR 4.8 million) in January-June 2015, and EUR 1.9 million (EUR 2.4 million) in the second quarter. Employee benefit and other operating expenses were still affected by the implemented successful cost-saving measures. To improve its profitability, the Wulff Group continues to examine its cost structure as part of ongoing reforms.

In January-June 2015 the financial income and expenses totalled (net) EUR -0.03 million (EUR -0.2 million) including interest expenses of EUR 0.1 million (EUR 0.05 million) and mainly currency-related other financial items (net) EUR 0.07 million (EUR -0.1 million). In the second quarter the financial income and expenses (net) totalled EUR -0.03 million (EUR -0.2 million). 

In January-June 2015 the result before taxes was EUR -0.5 million (EUR -0.6 million), and EUR -0.7 million (EUR -0.6 million) in the second quarter. In January-June 2015 the result before taxes and non-recurring items was EUR 0.4 million (EUR -0.6 million), and EUR 0.2 million (EUR -0.6 million) in the second quarter.

In January-June 2015 the net profit was EUR -0.9 million (EUR -0.5 million), and EUR -0.7 million (EUR -0.5 million) in the second quarter. The net profit was impacted by a write down of deferred tax receivables of EUR 0.3 million in January-March 2015. In January-June 2015 the net profit without non-recurring items was EUR 0.2 million (EUR -0.5 million), and EUR 0.2 million (EUR -0.5 million) in the second quarter.

Earnings per share (EPS) was EUR -0.14 (EUR -0.06) in January-June 2015, and EUR -0.12 (EUR -0.07) in the second quarter. Earnings per share (EPS) without non-recurring items was EUR 0.07 (EUR -0.06) in January-June and EUR 0.04 (EUR -0.07) in the second quarter.

KEY FIGURES

  II II I-II I-II I-IV
EUR 1000 2015 2014 2015 2014 2014
Net sales 16 265 17 515 35 439 37 290 74 262
Change in net sales, % -7,1 % -15,6 % -5,0 % -14,2 % -11,1 %
EBITDA 252 -167 633 122 2 096
EBITDA margin, % 1,5 % -1,0 % 1,8 % 0,3 % 2,8 %
Operating profit/loss -631 -418 -446 -387 1 109
Operating profit/loss margin, % -3,9 % -2,4 % -1,3 % -1,0 % 1,5 %
Profit/Loss before taxes -656 -574 -475 -627 478
Profit/Loss before taxes margin, % -4,0 % -3,3 % -1,3 % -1,7 % 0,6 %
Net profit/loss for the period attributable to equity holders of the parent company -796 -425 -886 -412 696
Net profit/loss for the period, % -4,9 % -2,4 % -2,5 % -1,1 % 0,9 %
Earnings per share, EUR (diluted = non-diluted) -0,12 -0,07 -0,14 -0,06 0,11
Return on equity (ROE), % -5,7 % -3,8 % -7,2 % -4,2 % 4,4 %
Return on investment (ROI), % -4,0 % -2,5 % -2,0 % -2,5 % 3,5 %
Equity-to-assets ratio at the end of period, % 44,3 % 37,4 % 44,3 % 37,4 % 39,5 %
Debt-to-equity ratio at the end of period 39,3 % 70,2 % 39,3 % 70,2 % 36,9 %
Equity per share at the end of period, EUR * 1,74 1,79 1,74 1,79 1,95
Net cash flow from operating activities 1 287 -564 -36 -2 183 -205
Investments in non-current assets 44 162 138 400 488
Investments in non-current assets, % of net sales 0,3 % 0,9 % 0,4 % 1,1 % 0,7 %
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 247 282 236 282 268
Personnel at the end of period 233 269 233 269 240

 * 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 strongly affected by the general economic development. During the economic downturn, organizations’ personnel lay-offs and cost-saving initiatives affect the purchasing behavior of corporate customers. During uncertain economic periods, corporations may also minimize attending fairs. As the ongoing economic uncertainty continues, the cost saving measures will have an effect on the ordering behavior of corporate customers and therefore Wulff must adapt to the developing market situation if needed.

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

Wulff Group Plc board member Sakari (Saku) Ropponen has passed away on July 30, 2015. Due to the incident, Wulff Group Plc’s Board of Directors has convened and restructured. Sakari Ropponen’s responsibilities have been divided to the other board members for now.   

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. 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.

Wulff estimates the market situation to remain unchanged. Therefore it is important to continue to implement the cost structure and improve the efficiency of the operations. Wulff’s goal is to further improve the profitability of its businesses. 

Wulff updated the outlook for 2015 in May 18, 2015. Wulff estimates the operating profit (EBIT) without non-recurring items for 2015 to be positive. In the interim report January 1 – June 30, 2015 Wulff estimated the operating profit (EBIT) for 2015 to be positive.

Wulff estimates the 2015 operating profit to be positive. Typically, in the industry, the annual profit and cash flow are made in the last quarter of the year.

WULFF GROUP PLC’S FINANCIAL REPORTING 
 

Wulff Group Plc will release the following financial reports in 2015:

Interim Report, January-September 2015 Thursday November 5, 2015

In Vantaa on August 5, 2015

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