WULFF GROUP PLC’S INTERIM REPORT FOR JANUARY 1 – SEPTEMBER 30, 2016:   OPERATING PROFIT REMAINED AT THE SAME LEVEL DESPITE THE DECLINE IN NET SALES

INTERIM REPORT           November 3, 2016 at 9:00 A.M.

This is a summary of Wulff Group Plc’s interim report for January-September 2016. Wulff Group’s interim report for January-September 2016 is attached to this stock exchange release and is also available on the company’s website.

JANUARY – SEPTEMBER 2016 BRIEFLY

  •  Net sales totalled EUR 43.5 million (EUR 50.2 million). Net sales decreased by 13.4 percent from the previous year.
  •  EBITDA was EUR 0.7 million (EUR 1.2 million). Comparable EBITDA was EUR 0.5 million (EUR 1.4 million).
  •  Operating profit (EBIT) was EUR 0.4 (EUR -0.0 million). Comparable operating profit (EBIT) amounted to EUR 0.2 million (EUR 0.9 million).
  •  Earnings per share (EPS) were EUR 0.01 (EUR -0.11).

JULY – SEPTEMBER 2016 BRIEFLY

  •  Net sales totalled EUR 13.4 million (EUR 14.8 million). Net sales decreased by 9.4 percent from the previous year.
  •  EBITDA was EUR 0.4 million (EUR 0.6 million). Comparable EBITDA was EUR 0.4 million (EUR 0.6 million).
  •  Operating profit (EBIT) was EUR 0.4 million (EUR 0.4 million). Comparable operating profit (EBIT) was EUR 0.3 million (EUR 0.4 million).
  •  Earnings per share (EPS) were EUR 0.02 (EUR 0.03). 

WULFF GROUP’S CHAIRMAN OF THE BOARD OF DIRECTORS HEIKKI VIENOLA

“Our customers’ expectations of the future are brighter than in a long time. The pick-up in economic growth will affect Wulff’s products and services with a lag. It is important to develop our product range to meet the needs of today and the future. Our strengths are in one-to-one encounters with customers and multi-channel operations. We will concentrate on refining the information we acquire in these meetings and the feedback we get from our customers into new products and services. For example, the share of facility management products, cafeteria products, and hygiene and cleaning products of our sales and supply has risen constantly. We are an agile, reliable, and environmentally friendly option for acquiring everything for the workplace. According to our customers, Wulff is the best-known, most reliable, and has the best customer service in the field.“

GROUP’S NET SALES AND RESULT PERFORMANCE

In January-September 2016 net sales totalled EUR 43.5 million (EUR 50.2 million), decreasing by -13.4 percent from the previous year. The decline in net sales without the sold business gifts business was -10.3 % in January-September 2016. Net sales totalled EUR 13.4 million (EUR 14.8 million) in the third quarter, decreasing by -9.4 percent from the previous year. The decline in net sales without the sold business gifts business was -8.3 percent in the third quarter. 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 January-September 2016 EBITDA was EUR 0.7 million (EUR 1.2 million) being 1.6 percent (2.4 %) of net sales, and EUR 0.4 million (EUR 0.6 million) in the third quarter. In January-September 2016 the comparable EBITDA amounted to EUR 0.5 million (EUR 1.4 million). The comparability of January-September 2016 EBITDA was affected by the sale of company cars of EUR 0.2 million. The comparability of January-September 2015 EBITDA was affected by write-downs of inventories of EUR 0.2 million relating to the business gifts business.

In January-September 2016 the operating profit (EBIT) amounted to EUR 0.4 million (EUR -0.02 million). In January-September 2016 the comparable operating profit (EBIT) was EUR 0.2 million (EUR 0.9 million). The comparability of the January-September 2016 operating profit (EBIT) was affected by the sale of company cars of EUR 0.2 million. The comparability of January-September 2015 operating profit (EBIT) was affected by write-downs of inventories and fixed assets of EUR 0.2 million and a write-down of goodwill of EUR 0.7 million relating to the business gifts business. The comparable operating profit (EBIT) declined by EUR 0.7 million in January-September 2016 which was mainly formed during the first half year period. The comparable operating profit (EBIT) was EUR 0.3 million (EUR 0.4 million) in the third quarter, remaining at the same level as in the previous year despite the decline in net sales. The comparability of the third quarter operating profit (EBIT) was affected by the sale of company cars of EUR 0.1 million. The 2015 third quarter EBIT did not include items affecting the comparability. The group continues to focus on sales development, the acquisition of new customers and optimizing its operations.

In January-September 2016 employee benefit expenses amounted to EUR 9.4 million (EUR 9.9 million), and EUR 2.5 million (EUR 2.7 million) in the third quarter. Other operating expenses amounted to EUR 5.5 million (EUR 6.0 million) in January-September 2016, and EUR 1.7 million (EUR 1.8 million) in the third quarter. Employee benefit and other operating expenses were still affected by the implemented cost-saving measures. To improve its profitability, Wulff Group continues to examine its cost structure as part of ongoing reforms.

In January-September 2016 the financial income and expenses totalled (net) EUR -0.2 million (EUR -0.2 million) including interest expenses of EUR 0.1 million (EUR 0.2 million) and mainly currency-related other financial items (net) EUR -0.1 million (EUR -0.1 million). In the third quarter, the financial income and expenses (net) totalled EUR -0.1 million (EUR -0.2 million).

In January-September 2016 the result before taxes was EUR 0.2 million (EUR -0.2 million), and EUR 0.2 million (EUR 0.3 million) in the third quarter. In January-September 2016 the net profit was EUR 0.1 million (EUR -0.7 million), and EUR 0.2 million (EUR 0.2 million) in the third quarter.

Earnings per share (EPS) were EUR 0.01 (EUR -0.11) in January-September 2016, and EUR 0.02 (EUR 0.03) in the third quarter.  

KEY FIGURES

III III I-III I-III I-IV
EUR 1000 2016 2015 2016 2015 2015
Net sales 13 408 14 796 43 493 50 235 68 820
Change in net sales, % -9,4 % -10,3 % -13,4 % -6,6 % -7,3 %
EBITDA 365 579 690 1 212 2 019
EBITDA margin, % 2,7 % 3,9 % 1,6 % 2,4 % 2,9 %
Operating profit/loss 270 429 376 -16 505
Operating profit/loss margin, % 2,0 % 2,9 % 0,9 % -0,0 % 0,7 %
Profit/Loss before taxes 200 272 153 -204 354
Profit/Loss before taxes margin, % 1,5 % 1,8 % 0,4 % -0,4 % 0,5 %
Net profit/loss for the period attributable to equity holders of the parent company 158 172 71 -714 -195
Net profit/loss for the period, % 1,1 % 1,2 % 0,2 % -1,4 % -0,3 %
Earnings per share, EUR (diluted = non-diluted) 0,02 0,03 0,01 -0,11 -0,03
Return on equity (ROE), % 1,3 % 1,3 % 0,8 % -5,9 % -1,6 %
Return on investment (ROI), % 1,4 % 1,2 % 1,4 % -0,4 % 2,7 %
Equity-to-assets ratio at the end of period, % 48,0 % 44,7 % 48,0 % 44,7 % 46,4 %
Debt-to-equity ratio at the end of period 33,0 % 41,6 % 33,0 % 41,6 % 23,8 %
Equity per share at the end of period, EUR * 1,75 1,75 1,75 1,75 1,84
Net cash flow from operating activities -1 005 -235 -1 075 -271 1 693
Investments in non-current assets 114 34 116 158 161
Investments in non-current assets, % of net sales 0,9 % 0,2 % 0,3 % 0,3 % 0,2 %
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 213 232 218 236 233
Personnel at the end of period 211 232 211 232 226

* 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 strongly affected by the general economic development. During the economic downturn, organizations’ personnel lay-offs and cost-saving initiatives affect the purchasing behaviour of corporate customers. At a time of economic uncertainty, companies may also reduce participation to trade fairs. As the ongoing economic uncertainty continues, the cost saving measures will have an effect on the ordering behaviour of corporate customers and Wulff must adapt to the market situation.  

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’s Board of Directors appointed CFO Elina Rahkonen as the interim CEO beginning on 1 October, 2016. The contract of former Group CEO Topi Ruuska ended on 30 September, 2016. Wulff Group Plc continues to look for a new permanent CEO.

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 has an ongoing capacity to carry out new strategic acquisitions.

Possible growth in the economy affects Wulff’s business quickly. Wulff estimates the market situation to remain stable. It is important to continue to go through the cost structure and enhance the company’s operations. Wulff’s goal is to continue to improve the profitability of its business operations. Wulff estimates the 2016 result to be positive. In the industry, it is typical that the result and cash flow are generated in the last quarter.

In Vantaa on November 2, 2016

WULFF GROUP PLC
BOARD OF DIRECTORS

Further information:
Chairman of the Board of Directors Heikki Vienola
tel. +358 300 870 414 or mobile: +358 50 65 110
e-mail: heikki.vienola@wulff.fi

DISTRIBUTION
NASDAQ OMX Helsinki Oy
Key media
www.wulff-group.com