WULFF GROUP PLC
INTERIM REPORT November 10, 2010 at 9:00 A.M.
WULFF GROUP PLC'S INTERIM REPORT FOR JANUARY 1 - SEPTEMBER 30, 2010
- Net sales in the third quarter totalled EUR 20.4 million with an increase of
16.3 percentages from the comparable period last year (EUR 17.6 million). Net
sales for the first nine months increased strongly by 34.6 percentages up to
EUR 66.0 million from last year's comparable period (EUR 49.1 million). The
sales increase was due to the acquisition of Wulff Supplies Ab which operates in
Sweden, Norway and Denmark and since the end of July 2009 is part of Wulff
Group.
- The integration of Wulff Supplies with Wulff Group has been managed with
success. The Nordic cooperation and the synergies in e.g. purchases give the
customers even more competitive products and services. Wulff Supplies has
managed to increase its market share and win new customers.
- EBITDA in the third quarter was EUR 0.23 million being EUR 0.16 million
higher than in the comparable period (EUR 0.07 million). In January-September
2010, the EBITDA was EUR 0.29 million (EUR 0.42 million).
- In the third quarter, the operating loss of EUR 0.41 million including the
one-time impairment expense (EUR -0.35 million) was at the comparable period's
level (EUR 0.43 million). The operating loss totalled EUR 0.86 million for the
nine-month period compared to the operating loss of EUR 0.50 million a year
ago.
- Loss before taxes totalled EUR 0.33 million (EUR 0.49 million) in
July-September and EUR 0.57 million (EUR 0.66 million) in the first nine
months.
- After deducting the minority shareholders' profit share, the net loss
attributable to the equity holders of the parent company was at last year's
level for the nine months and for the quarter. Earnings per share were EUR
-0.14 (EUR -0.14) for the nine-month period and EUR -0.09 (EUR -0.09) for the
third quarter.
GROUP'S NET SALES AND PERFORMANCE
Net sales in the third quarter totalled EUR 20.4 million with an increase of
16.3 percentages from the comparable period last year (EUR 17.6 million). Net
sales for the first nine months increased strongly by 34.6 percentages up to
EUR 66.0 million from last year's comparable period (EUR 49.1 million). The
sales increase was due to the acquisition of Wulff Supplies Ab which operates
in Sweden, Norway and Denmark and since the end of July 2009 is part of Wulff
Group.
Wulff Group's CEO Heikki Vienola: “All our strategic and operative decisions aim
to serving our customers even better and to making profitable business. The
sales growth proves that our decisions and actions have been good. We focus
strongly on sales and its improvement also in the future. Closer co-operation
between our Nordic companies and utilizing new synergies constantly are key
factors in the future performance. Along the economic growth and our customers'
success, the demand for our services and products will increase. We expect the
increase of the markets to affect quickly our sales growth.”
EBITDA in the third quarter was EUR 0.23 million being EUR 0.16 million higher
than in the comparable period (EUR 0.07 million). In January-September 2010, the
EBITDA of EUR 0.29 million i.e. 0.4 percentage of net sales was lower than in
the comparable period last year (EUR 0.42 million; 0.9 %). The Group continues to review its cost structure and performance efficiency with a focus on
improving the profitability of all its operations.
In the third quarter, the operating loss of EUR 0.41 million including the
one-time impairment expense (EUR -0.35 million) was at the comparable period's
level (EUR 0.43 million). The operating loss totalled EUR 0.86 million for the
nine-month period compared to the operating loss of EUR 0.50 million a year ago.
The operating loss was 1.3 percentage (1.0 %) of the net sales in the first nine
months. The fair and event marketing company Entre Marketing Oy has made a loss
this year and the goodwill arising from its acquisition was impaired by EUR 0.35
million as of September 30, 2010. In the comparable period last year, the
operating loss was impacted by a one-time impairment (EUR 0.28 million) related
to the divestment of the subsidiaries Everyman Oy and Officeman Oy.
The financial income and expenses totalled (net) EUR +0.29 million (EUR -0.16
million) including dividend income of EUR 0.15 million, interest expenses of EUR
0.19 million and other financial items (net) of EUR +0.33 million. For the third
quarter, the net financial income and expenses were EUR +0.08 million (EUR
-0.06 million).
Loss before taxes totalled EUR 0.33 million (EUR 0.49 million) in July-September
and EUR 0.57 million (EUR +0.66 million) in January-September. After deducting
the minority shareholders' profit share, the net loss attributable to the equity
holders of the parent company was at last year's level for the nine months and
for the quarter. The net loss attributable to the equity holders of the parent
company totalled EUR 0.93 million (EUR 0.95 million) in January-September and
EUR 0.56 million (EUR 0.58 million) in July-September. Earnings per share were
EUR -0.14 (EUR -0.14) for the nine-month period and EUR -0.09 (EUR -0.09) for
the third quarter.
The return on investment (ROI) was -1.34 percentage (-1.32 %) for
January-September and -1.17 percentage (-1.31 %) for July-September. The return
on equity (ROE) was -4.18 percentage (-4.58 %) for January-September and -2.88
percentage (-2.73 %) for the third quarter.
CONTRACT CUSTOMERS DIVISION
The Contract Customers Division is a comprehensive partner for customers in the
field of office supplies, business and promotional gifts as well as fair and
event marketing services. In January-September, the segment's net sales
(EUR 54.9 million) increased by EUR 19.2 million i.e. 54 percentages
year-on-year (EUR 35.6 million) due to Wulff Supplies which has been
consolidated since the beginning of August 2009 and is part of the Contract
Customer Division. In July-September, the division's net sales totalled EUR 17.3
million (EUR 14.3 million).
Wulff Supplies, which operates in Scandinavia, has managed to both increase its
market share and win new customers constantly. The new efficient logistic center
opened in Ljungby, Sweden, in the summer 2010, enables serving the customers
even better and is an investment in the future growth. Also several development
initiatives bring cost savings in the Group's operations. The Group has good
possibilities to serve even more Nordic customers in the future which makes the
development of pan-Nordic operational concept important. The integration of
Wulff Supplies with Wulff Group has been managed with success. The Nordic
cooperation and the synergies, in purchases for example, give the customers even
more competitive products and services.
During the past 120 years, the Finnish Wulff Oy is known for being a pioneer in
its branch. In 2010, Wulff has invested remarkably in the launch, development
and marketing of the new webstore Wulffinkulma.fi. Constantly during the year,
the webstore has brought new customers which will support the Group's growth. To
strengthen its status as the industry's e-commerce pioneer, Wulff continues to
take strong efforts in the constant development and marketing of the webstore
also in the fourth quarter of 2010. The webstore serves its customers with a
product range of nearly 4,000 products.
The financial performance of the Contract Customers Division was not as good as
in the comparable period last year. The nine-month operating result excluding
the one-time goodwill impairment (EUR 0.35 million) of the fair and event
marketing company Entre Marketing Oy, was slightly negative (EUR -0.02 million)
compared to the operating profit of EUR 0.19 million a year ago. For the third
quarter, the division's operating result excluding the non-recurring impairment
was a profit of EUR 0.04 million whereas a loss of EUR 0.15 million was incurred
in the comparable period last year. The reported operating loss including the
non-recurring impairment amounted to EUR 0.37 million (EUR +0.19 million) in the
nine-month period and EUR 0.31 million (EUR -0.15 million) in the third quarter.
The fair and event marketing company Entre Marketing Oy has made a loss this
year and based on its goodwill impairment testing, an impairment of EUR 0.35
million was made impacting the division's operating result in the third quarter.
Along the changes made in the subsidiary's financial management during the
summer 2010, the parent company acquired the minority shares (1 %) from the
employee leaving the Group. Now the Group's ownership in Entre Marketing Oy is
84 percentages.
The economic slowdown has impacted especially the demand for business and
promotional gifts. The business has made losses in 2010 but historically the
demand for business and promotional gifts has been greatest during the Christmas
season in the fourth quarter. The improvement of the economic situation
increases also the demand for business and promotional gifts.
DIRECT SALES DIVISION
The Direct Sales Division aims to improve its customers' daily operations with
innovative products and the industry's most professional personal, local
service. In the third quarter, the division's net sales (EUR 3.1 million) were
at last year's level (EUR 3.1 million) although the comparable period's sales
included the business of the subsidiaries Everyman Oy and Officeman Oy. In the
nine-month period, the division's net sales (EUR 11.3 million) were lower than a
year ago (EUR 13.7 million) due to the divestment of former group companies
Everyman Oy and Officeman Oy which were sold to the minority shareholders in
September 2009.
The Direct Sales Division's operating result turned up to an operating profit of
EUR 0.09 million this year (EUR -0.54 million). In the third quarter, the
division's operating loss was EUR 0.02 million whereas in the comparable period
last year, the operating loss of EUR 0.19 million was impacted by a one-time
impairment (EUR 0.28 million) related to the divestment of the subsidiaries
Everyman Oy and Officeman Oy.
The division's organizational changes in 2009 have been managed well and the
improvement of the management practices continues, which has affected positively
the profit of the Finnish direct sales companies. In order to achieve a good
profitability level and financial result, the cost efficiency improvement
initiatives will continue in all direct sales companies. The division focuses in
improving the sales and supporting it with new methods, e.g. with e-marketing.
In Lithuania, the small direct sales operations started last year were closed in
summer 2010.
For a sales company, the most important asset is its personnel. Capable persons
make the growth possible and one of the most significant challenges for the
Direct Sales division is to be able to recruit talented sales professionals. The
Group invests in visibility and recruitment marketing in different media and
aims to recruit several new direct sales employees in the Nordic countries. The
recruiting cooperation with the governmental employment agency is developed
constantly.
FINANCING, INVESTMENTS AND FINANCIAL POSITION
The cash flow from operating activities totalled EUR -1.49 million (EUR -0.63
million) in July-September and EUR -1.63 million (EUR +0.23 million) in the
whole nine-month period. Historically the operating cashflow is negative in the
third quarter due to the summer holiday season when product deliveries and sales
invoicing are small. In addition to the profitability improvement initiatives,
the Group aims to improve the working capital management and increase the cash
flow from operating activities significantly.
In January-September 2010, a total of EUR 1.26 million was used in investing
activities including investments in intangible and tangible assets (EUR 1.20
million), payment of the additional acquisition price debt related to subsidiary
Ibero Liikelahjat Oy (EUR 0.19 million), payment for the acquisition of the
subsidiary Entre Marketing Oy's minority shares (EUR 0.03 million) and proceeds
from the sale of intangible and tangible assets (EUR +0.15 million). During the
period, investments were made in e.g. Wulff Supplies' new logistics center in
Ljungby, Sweden. Investments in the third quarter totalled EUR 0.59 million.
In the comparable period January-September 2009, a total of EUR 2.32 million was
used in investing activities including investments in intangible and tangible
assets (EUR 0.51 million), the acquisitions of subsidiaries (EUR -2.14 million),
proceeds from the divestment of subsidiaries (EUR +0.24 million) and proceeds
from the sale of intangible and tangible assets (EUR +0.09 million). In
July-September 2009, the net investments totalled EUR 1.86 million.
During the nine-month period, the cash flow used in financing activities
totalled EUR -0.67 million (EUR +1.47 million). The withdrawals and repayments
of long- and short-term loans totalled net EUR 0.21 million whereas new funding
was raised net of EUR 2.10 million for financing the acquisition of Wulff
Supplies a year ago. The acquisition of own shares totalled EUR 0.09 million
(EUR 0.05 million) and the net change in short-term investments amounted to EUR
0.06 million (EUR 0.19 million). Dividends of EUR 0.15 million (EUR 0.01
million) were received. The parent company shareholders were paid dividends of
EUR 0.33 million (EUR 0.33 million) and the minority shareholders of the
subsidiaries were paid dividends of EUR 0.14 million (EUR 0.06 million). During
the third quarter, the financing cash flow received was EUR 0.50 million (EUR
2.17 million).
In general, the net decrease in cash and cash equivalents was EUR -3.55 million
in January-September (EUR -0.63 million) and EUR -1.58 million (EUR -0.31
million) in July-September.
The equity attributable to the equity holders of the parent company totalled EUR
2.48 per share (EUR 2.66) and the equity-to-assets ratio was 39.1 percentage
(41.8 %).
DECISIONS OF THE ANNUAL GENERAL MEETING
Wulff Group Plc's Annual General Meeting held on April 23, 2010 decided to pay a
dividend of EUR 0,05 per share and authorised the Board of Directors to decide
on the repurchase of the company's own shares. The Annual General Meeting
accepted also the Board's proposal concerning the authorisation to perform share
issues.
The Annual General Meeting adopted the financial statements for the financial
year 2009 and discharged the members of the Board of Directors and CEO from
liability.
Due to a change in the legislation, the Annual General Meeting decided to amend
the Articles of Association in a way that the invitations to the General
Meetings are delivered at least 21 days prior to the General Meeting, but not
later than nine days before the General Meeting record date. The amendment of
the Articles of Association was entered in the Finnish Trade Register on June 8,
2010 which was announced in a stock exchange release on the same day. The
current Articles of Association are available on the Group's website
www.wulff-group.com.
The previous Board members Ere (Erkki) Kariola, Ari Pikkarainen, Pentti
Rantanen, Saku (Sakari) Ropponen and Heikki Vienola were re-elected and Andreas
Tallberg was elected as a new member of the Board. The organising meeting of the
Board of Directors, held after the Annual General Meeting, decided that the new
Chairman of the Board is Saku (Sakari) Ropponen.
The shareholders attending the Annual General Meeting held on April 23, 2010
were informed that Nexia Tilintarkastus Oy, Authorised Public Accountants, and
Juha Lindholm, Certified Auditor, continued operating as the Company's auditors
and Seppo Tervo, Authorised Public Accountant, started as the new lead auditor.
Due to Nexia Tilintarkastus Oy's organizational changes in September 2010, Wulff
Group Plc's new lead auditor is now Christer Antson, Authorised Public
Accountant.
SHARES AND SHARE CAPITAL
Based on the authorization of the Annual General Meeting held on April 24, 2009,
the acquisition of own shares continued in 2010. In the end of December 2009,
the parent company held a total of 69 022 own shares and in the first quarter of
2010, 2 807 own shares were repurchased and 5 000 own shares were allocated to
the Group's key person as a part of the share-based incentive plan decided in
2008. In the end of March 2010, the Group held a total of 66 829 own shares
(24 956 as of March 31, 2009) representing 1.0 percentage (0.4 %) of the total
number and voting rights of Wulff shares. The average price for the own shares
repurchased in January-March was EUR 3.25 per share.
Authorized by the Annual General Meeting held on April 23, 2010, the Board of
Directors decided in its organizing meeting to continue buying back a maximum of
300,000 own shares by the next Annual General Meeting. The reacquisition of own
shares continued in May and in the end of September 2010 the Group held 90 056
own shares (36 583 shares as of September 30, 2009) which represents 1.4
percentage (0.6 %) of the total number and voting rights of Wulff shares. The
average price for the own shares repurchased in January-September was EUR 3.27
per share.
The shares are acquired through public trading on NASDAQ OMX Helsinki in a
proportion other than that of current shareholder holdings. The shares are
acquired at the market price quoted at the time of the repurchase in accordance
with the rules regarding the acquisition of company's owns shares. According to
the authorisation, the treasury shares can be acquired to carry out acquisitions
or other business related arrangements, to improve the company's capital
structure, to support the implementation of the company's incentive scheme or to
be cancelled or disposed of.
The Group does not have any option schemes currently in force.
The parent company's share capital (EUR 2.65 million) consists of 6 607 628
shares with one vote each. There have been no changes in share capital in 2009
and 2010. There have been no disclosed notifications on changes in major
holdings during 2009 and 2010.
Wulff Group Plc' share is listed on NASDAQ OMX Helsinki in the Small Cap segment
under the Consumer Discretionary sector. The company's trading code is WUF1V. In
the end of September 2010, the share was valued at EUR 2.76 (EUR 3.65 as of
September 30, 2009) and the market capitalization of the outstanding shares
totalled EUR 18.0 million (EUR 24.0 million as of September, 2009).
PERSONNEL
During the nine-month period, the Group's personnel totalled 384 (397) employees
on average. In the end of September 2010, the Group had 391 (383) employees of
which 138 (110) persons were employed in Sweden, Norway, Denmark and Estonia.
The operations in Lithuania were closed down in summer 2010.
The majority, approximately 60 percentages of the Group's personnel works in
sales operations and 40 percentages work in logistics and administration. Wulff
employees equally both genders: in the end of September 2010, men represented 54
percentages and women 46 percentages of the employees.
In order to increase the organic growth, the Group focuses on recruiting sales
personnel. The Group continues the close cooperation with the employment
authorities and the educational institutions. Along with the web-based
recruitment methods, the Group participates different happenings and takes
personal contact with potential sales talents. The Group aims to increase its
sales personnel in all units still during 2010.
ORGANIZATION CHANGE
In August 2010, organizational changes were made in Contract Customers Division
when the management changed in Wulff Oy and its subsidiary Torkkelin Paperi Oy,
located in Lahti, Finland. The initiatives aim to utilize the management's
competencies even broader, to rationalize the operations and decrease the
administrational costs. Juha Broman, who has led Wulff Oy since 2005 and has a
three-decade-long experience in the industry, focuses his skills in the
development of Torkkelin Paperi's operations and started as its new managing
director in November. Wulff Oy is now led by the new managing director Jani
Puroranta, previously Head of Contract Customers Division. Torkkelin Paperi Oy's
previous managing director Pekka Lähde continues working as the company's sales
director.
RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
The economic downturn in the Nordic countries has clearly affected the demand
for office supplies. The general uncertainty may continue the entire year 2010
which will most likely affect the ordering behaviour of some corporate clients
also in the coming months. The improvement of the economic situation is expected
to affect quickly the demand for office supplies.
The possibly ongoing economic slowdown impacts especially the demand for
business and promotional gifts. 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. In the economic downturn, the
corporations also minimize attending fairs and decrease their event marketing
activities.
MARKET SITUATION AND OUTLOOK FOR 2010
Along with the global economic downturn, also the markets for office supplies
have decreased notably in the countries where the Group operates. In the Nordic
countries last year, the markets for office supplies decreased some 10
percentages and the markets for business and promotional gifts were impacted
with a decrease of nearly a third. The Estonian markets for corporate
promotional products decreased even more. In 2010, the markets are expected to
remain the same size as in 2009 or to grow slightly.
Wulff's mission is to help its corporate customers to succeed in their own
business by providing them with leading-edge products and services
cost-efficiently in a way best suitable to them. Being the front-runner in its
field, Wulff's latest acquisition was Strålfors Supplies Ab (Wulff Supplies
since January 1, 2010) in July 2009, which strengthened the Group's position in
the Nordic office supply markets and the Group became the most significant
Nordic player in office supplies. The industry consolidation continues and the
Group expects that the international operators continue increasing their market
shares. In summer 2010, internationally operating companies acquired Finnish
office supplies companies: Staples acquired Oy Lindell Ab in July 2010 and
Lyreco acquired Officeday Finland Oy from Arion bank in August.
Historically, Wulff Group's business experiences seasonal fluctuation and a
significant part of the Group's net sales and profit is generated in the fourth
quarter. In 2010, the Group continues to take action for enhancing
profitability. The Group focuses on the growth and development of its sales
operations. In 2010, the Group expects to win new customers and gain growth in
Scandinavia especially along with Wulff Supplies Ab and in Finland with the
webstore Wulffinkulma.fi.
The Group expects its net sales to grow remarkably from last year. Wulff is also
prepared to carry out new strategic acquisitions. The group management believes
that the financial result 2010 will be at last year's level.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
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| INCOME STATEMENT | III | III | I-III | I-III | I-IV |
--------------------------------------------------------------------------------
| EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 |
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| Net sales | 20 435 | 17 570 | 66 035 | 49 061 | 74 785 |
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| Other operating income | 108 | 136 | 373 | 340 | 402 |
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| Materials and services | -13 496 | -10 825 | -43 133 | -28 265 | -45 445 |
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| Employee benefit expenses | -3 792 | -3 494 | -13 546 | -11 489 | -15 980 |
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| Other operating expenses | -3 028 | -3 321 | -9 438 | -9 224 | -12 515 |
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| EBITDA | 228 | 66 | 291 | 423 | 1 247 |
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| Depreciation and | -289 | -214 | -802 | -645 | -940 |
| amortization | | | | | |
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| Impairment | -350 | -280 | -350 | -280 | -460 |
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| Operating profit/loss | -411 | -428 | -861 | -502 | -154 |
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| Financial income | 177 | 46 | 690 | 154 | 275 |
--------------------------------------------------------------------------------
| Financial expenses | -93 | -106 | -400 | -311 | -481 |
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| Profit/Loss before taxes | -327 | -488 | -571 | -659 | -360 |
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| Income taxes | -185 | -27 | -191 | -223 | -284 |
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| Net profit/loss for the | -513 | -515 | -762 | -882 | -644 |
| period | | | | | |
--------------------------------------------------------------------------------
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| Attributable to: | | | | | |
--------------------------------------------------------------------------------
| Equity holders of the | -557 | -581 | -931 | -947 | -782 |
| parent company | | | | | |
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| Minority interest | 45 | 66 | 169 | 65 | 138 |
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| Earnings per share for | | | | | |
| profit | | | | | |
--------------------------------------------------------------------------------
| attributable to the | | | | | |
| equity holders | | | | | |
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| of the parent company: | | | | | |
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| Earnings per share, EUR | -0,09 | -0,09 | -0,14 | -0,14 | -0,12 |
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| (diluted = non-diluted) | | | | | |
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--------------------------------------------------------------------------------
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| STATEMENT OF | III | III | I-III | I-III | I-IV |
| COMPREHENSIVE INCOME | | | | | |
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| EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Net profit/loss for the | -513 | -515 | -762 | -882 | -644 |
| period | | | | | |
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| Other comprehensive | | | | | |
| income, net of tax | | | | | |
--------------------------------------------------------------------------------
| Change in translation | 153 | 58 | 93 | 3 | 39 |
| differences | | | | | |
--------------------------------------------------------------------------------
| Fair value changes on | -1 | 12 | -15 | 62 | -4 |
| available-for-sale | | | | | |
| investments | | | | | |
--------------------------------------------------------------------------------
| Total other comprehensive | 152 | 70 | 78 | 65 | 35 |
| income | | | | | |
--------------------------------------------------------------------------------
| Total comprehensive | -360 | -445 | -684 | -817 | -609 |
| income for the period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive | | | | | |
| income attributable to: | | | | | |
--------------------------------------------------------------------------------
| Equity holders of the | -451 | -478 | -918 | -883 | -797 |
| parent company | | | | | |
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| Minority interest | 91 | 33 | 234 | 66 | 188 |
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| STATEMENT OF FINANCIAL | | | Sept 30 | Sept 30 | Dec 31 |
| POSITION | | | | | |
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| EUR 1000 | | | 2010 | 2009 | 2009 |
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| ASSETS | | | | | |
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| Non-current assets | | | | | |
--------------------------------------------------------------------------------
| Goodwill | | | 10 622 | 10 824 | 10 658 |
--------------------------------------------------------------------------------
| Other intangible assets | | | 1 266 | 1 347 | 1 257 |
--------------------------------------------------------------------------------
| Property, plant and | | | 2 267 | 2 073 | 1 952 |
| equipment | | | | | |
--------------------------------------------------------------------------------
| Non-current financial | | | | | |
| assets | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | | 79 | | |
| financial assets | | | | | |
--------------------------------------------------------------------------------
| Non-interest-bearing | | | 321 | 416 | 337 |
| financial assets | | | | | |
--------------------------------------------------------------------------------
| Deferred tax assets | | | 1 236 | 810 | 1 066 |
--------------------------------------------------------------------------------
| Total non-current assets | | | 15 791 | 15 470 | 15 274 |
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| Current assets | | | | | |
--------------------------------------------------------------------------------
| Inventories | | | 12 300 | 12 237 | 11 793 |
--------------------------------------------------------------------------------
| Current receivables | | | | | |
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| Interest-bearing | | | 7 | | |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Non-interest-bearing | | | 15 424 | 14 987 | 13 246 |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Financial assets | | | | 61 | 58 |
| recognised at fair value | | | | | |
| through profit and loss | | | | | |
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| Cash and cash equivalents | | | 1 785 | 4 002 | 5 337 |
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| Total current assets | | | 29 517 | 31 287 | 30 434 |
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| | | | | | |
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| TOTAL ASSETS | | | 45 308 | 46 757 | 45 708 |
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| 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 |
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| Invested unrestricted | | | 223 | 223 | 223 |
| equity fund | | | | | |
--------------------------------------------------------------------------------
| Retained earnings | | | 5 602 | 6 930 | 6 944 |
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| Minority interest | | | 1 448 | 1 153 | 1 364 |
--------------------------------------------------------------------------------
| Total equity | | | 17 584 | 18 618 | 18 843 |
--------------------------------------------------------------------------------
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| Non-current liabilities | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | | 8 443 | 9 623 | 8 266 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | | 144 | | 298 |
--------------------------------------------------------------------------------
| Total non-current | | | 8 587 | 9 623 | 8 564 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | | 2 018 | 1 095 | 2 305 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Non-interest-bearing | | | 17 119 | 17 421 | 15 996 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Total current liabilities | | | 19 136 | 18 516 | 18 301 |
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| | | | | | |
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| TOTAL EQUITY AND | | | 45 308 | 46 757 | 45 708 |
| LIABILITIES | | | | | |
--------------------------------------------------------------------------------
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| STATEMENT OF CASH FLOW | III | III | I-III | I-III | I-IV |
--------------------------------------------------------------------------------
| EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
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| Cash flow from operating | | | | | |
| activities: | | | | | |
--------------------------------------------------------------------------------
| Cash received from sales | 19 043 | 13 396 | 63 941 | 45 780 | 73 880 |
--------------------------------------------------------------------------------
| Cash received from other | 90 | 106 | 292 | 201 | 320 |
| operating income | | | | | |
--------------------------------------------------------------------------------
| Cash paid for operating | -20 506 | -14 175 | -65 443 | -45 557 | -72 348 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Cash flow from operating | -1 373 | -673 | -1 210 | 424 | 1 852 |
| activities before | | | | | |
| financial items and | | | | | |
| income taxes | | | | | |
--------------------------------------------------------------------------------
| Interest paid | -66 | -37 | -226 | -275 | -408 |
--------------------------------------------------------------------------------
| Interest received | 43 | 47 | 62 | 107 | 151 |
--------------------------------------------------------------------------------
| Income taxes paid | -97 | 36 | -254 | -25 | -125 |
--------------------------------------------------------------------------------
| Cash flow from operating | -1 492 | -627 | -1 628 | 231 | 1 470 |
| activities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing | | | | | |
| activities: | | | | | |
--------------------------------------------------------------------------------
| Investments in intangible | -585 | -62 | -1 195 | -512 | -810 |
| and tangible assets | | | | | |
--------------------------------------------------------------------------------
| Proceeds from sales of | 29 | 33 | 151 | 93 | 173 |
| intangible and tangible | | | | | |
| assets | | | | | |
--------------------------------------------------------------------------------
| Acquisition of | -34 | -2 066 | -219 | -2 142 | -2 293 |
| subsidiaries, net of cash | | | | | |
--------------------------------------------------------------------------------
| Sale of subsidiaries, net | | 238 | | 238 | 426 |
| of cash | | | | | |
--------------------------------------------------------------------------------
| Repayments of loans | | | 4 | | |
| receivable | | | | | |
--------------------------------------------------------------------------------
| Cash flow from investing | -590 | -1 857 | -1 259 | -2 323 | -2 504 |
| activities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | | | |
| activities: | | | | | |
--------------------------------------------------------------------------------
| Acquisition of own shares | -1 | -19 | -85 | -54 | -126 |
--------------------------------------------------------------------------------
| Dividends paid | | -13 | -469 | -393 | -422 |
--------------------------------------------------------------------------------
| Dividends received | 26 | | 149 | 8 | 8 |
--------------------------------------------------------------------------------
| Cash paid for (received | 201 | -297 | -55 | -190 | -216 |
| from) short-term | | | | | |
| investments (net) | | | | | |
--------------------------------------------------------------------------------
| Withdrawals of long- and | 297 | 2 700 | 914 | 2 700 | 3 494 |
| short-term loans | | | | | |
--------------------------------------------------------------------------------
| Repayments of long- and | -19 | -200 | -1 119 | -605 | -995 |
| short-term loans | | | | | |
--------------------------------------------------------------------------------
| Cash flow from financing | 503 | 2 171 | -666 | 1 466 | 1 743 |
| activities | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Change in cash and cash | -1 579 | -313 | -3 553 | -626 | 709 |
| equivalents | | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 3 364 | 4 315 | 5 337 | 4 628 | 4 628 |
| at the beginning of the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 1 785 | 4 002 | 1 785 | 4 002 | 5 337 |
| at the end of the period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| STATEMENT OF CHANGES IN EQUITY | | | | | |
--------------------------------------------------------------------------------
| EUR 1000 | Equity attributable to equity holders | | |
| | of the parent company | | |
--------------------------------------------------------------------------------
| | Shar | Shar | Fund | Retai | Total | Minor | TOTAL |
| | e | e | for | ned | | ity | |
| | capi | pre- | inves | earni | | inter | |
| | tal | mium | ted | ngs | | est | |
| | | fund | non- | | | | |
| | | | restr | | | | |
| | | | icted | | | | |
| | | | equit | | | | |
| | | | y | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity on Jan 1, | 2 | 7 | 223 | 8 196 | 18 731 | 1 137 | 19 868 |
| 2009 | 650 | 662 | | | | | |
--------------------------------------------------------------------------------
| Comprehensive | | | | -883 | -883 | 66 | -817 |
| income * | | | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | | | | -329 | -329 | -93 | -422 |
--------------------------------------------------------------------------------
| Treasury share | | | | -54 | -54 | | -54 |
| acquisition | | | | | | | |
--------------------------------------------------------------------------------
| Divestment of | | | | | 0 | 43 | 43 |
| subsidiaries | | | | | | | |
--------------------------------------------------------------------------------
| Equity on Sept 30, | 2 | 7 | 223 | 6 930 | 17 465 | 1 153 | 18 618 |
| 2009 | 650 | 662 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity on Jan 1, | 2 | 7 | 223 | 8 196 | 18 731 | 1 137 | 19 868 |
| 2009 | 650 | 662 | | | | | |
--------------------------------------------------------------------------------
| Comprehensive | | | | -797 | -797 | 188 | -609 |
| income * | | | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | | | | -329 | -329 | -93 | -422 |
--------------------------------------------------------------------------------
| Treasury share | | | | -126 | -126 | | -126 |
| acquisition | | | | | | | |
--------------------------------------------------------------------------------
| Divestment of | | | | | 0 | -258 | -258 |
| subsidiaries | | | | | | | |
--------------------------------------------------------------------------------
| Changes in | | | | | 0 | 389 | 389 |
| ownership | | | | | | | |
--------------------------------------------------------------------------------
| Equity on Dec 31, | 2 | 7 | 223 | 6 944 | 17 479 | 1 364 | 18 843 |
| 2009 | 650 | 662 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity on Jan 1, | 2 | 7 | 223 | 6 944 | 17 479 | 1 364 | 18 843 |
| 2010 | 650 | 662 | | | | | |
--------------------------------------------------------------------------------
| Comprehensive | | | | -918 | -918 | 234 | -684 |
| income * | | | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | | | | -327 | -327 | -145 | -472 |
--------------------------------------------------------------------------------
| Treasury share | | | | -85 | -85 | | -85 |
| acquisition | | | | | | | |
--------------------------------------------------------------------------------
| Share-based | | | | 16 | 16 | | 16 |
| payments | | | | | | | |
--------------------------------------------------------------------------------
| Changes in | | | | -28 | -28 | -5 | -33 |
| ownership | | | | | | | |
--------------------------------------------------------------------------------
| Equity on Sept 30, | 2 | 7 | 223 | 5 602 | 16 137 | 1 448 | 17 584 |
| 2010 | 650 | 662 | | | | | |
--------------------------------------------------------------------------------
* net of tax
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
| SEGMENT INFORMATION | III | III | I-III | I-III | I-IV |
--------------------------------------------------------------------------------
| EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales by operating | | | | | |
| segments | | | | | |
--------------------------------------------------------------------------------
| Contract Customers | 17 307 | 14 336 | 54 856 | 35 610 | 57 346 |
| Division | | | | | |
--------------------------------------------------------------------------------
| Direct Sales Division | 3 092 | 3 091 | 11 288 | 13 724 | 17 985 |
--------------------------------------------------------------------------------
| Group Services | 292 | 431 | 1 008 | 1 440 | 986 |
--------------------------------------------------------------------------------
| Intragroup eliminations | -256 | -288 | -1 118 | -1 713 | -1 531 |
| between segments | | | | | |
--------------------------------------------------------------------------------
| TOTAL NET SALES | 20 435 | 17 570 | 66 035 | 49 061 | 74 785 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit/loss by | | | | | |
| operating segments | | | | | |
--------------------------------------------------------------------------------
| Contract Customers | 44 | -145 | -23 | 189 | 658 |
| business | | | | | |
--------------------------------------------------------------------------------
| Non-Recurring Impairment | -350 | | -350 | | -180 |
--------------------------------------------------------------------------------
| Contract Customers | -306 | -145 | -373 | 189 | 478 |
| Division Total | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Direct Sales business | -22 | 89 | 89 | -255 | 28 |
--------------------------------------------------------------------------------
| Non-Recurring Impairment | | -280 | | -280 | -280 |
--------------------------------------------------------------------------------
| Direct Sales Division | -22 | -191 | 89 | -535 | -252 |
| Total | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Group Services and | -83 | -92 | -577 | -156 | -380 |
| non-allocated items | | | | | |
--------------------------------------------------------------------------------
| TOTAL OPERATING | -411 | -428 | -861 | -502 | -154 |
| PROFIT/LOSS | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | III | III | I-III | I-III | I-IV |
--------------------------------------------------------------------------------
| KEY FIGURES (EUR 1000) | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Net sales | 20 435 | 17 570 | 66 035 | 49 061 | 74 785 |
--------------------------------------------------------------------------------
| Increase/Decrease in net | 16,3 % | 8,7 % | 34,6 % | -12,4 % | -1,8 % |
| sales, % | | | | | |
--------------------------------------------------------------------------------
| EBITDA | 228 | 66 | 291 | 423 | 1 247 |
--------------------------------------------------------------------------------
| EBITDA margin, % | 1,1 % | 0,4 % | 0,4 % | 0,9 % | 1,7 % |
--------------------------------------------------------------------------------
| Operating profit/loss | -411 | -428 | -861 | -502 | -154 |
--------------------------------------------------------------------------------
| Operating profit/loss | -2,0 % | -2,4 % | -1,3 % | -1,0 % | -0,2 % |
| margin, % | | | | | |
--------------------------------------------------------------------------------
| Profit/Loss before taxes | -327 | -488 | -571 | -659 | -360 |
--------------------------------------------------------------------------------
| Profit/Loss before taxes | -1,6 % | -2,8 % | -0,9 % | -1,3 % | -0,5 % |
| margin, % | | | | | |
--------------------------------------------------------------------------------
| Net profit/loss for the | -557 | -581 | -931 | -947 | -782 |
| period attributable to | | | | | |
| equity holders of the | | | | | |
| parent company | | | | | |
--------------------------------------------------------------------------------
| Net profit/loss for the | -2,7 % | -3,3 % | -1,4 % | -1,9 % | -1,0 % |
| period, % | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR | -0,09 | -0,09 | -0,14 | -0,14 | -0,12 |
| (diluted = non-diluted) | | | | | |
--------------------------------------------------------------------------------
| Return on equity (ROE), % | -2,88 % | -2,73 % | -4,18 % | -4,58 % | -3,32 % |
--------------------------------------------------------------------------------
| Return on investment | -1,17 % | -1,31 % | -1,34 % | -1,32 % | 0,19 % |
| (ROI), % | | | | | |
--------------------------------------------------------------------------------
| Equity-to-assets ratio at | 39,1 % | 41,8 % | 39,1 % | 41,8 % | 43,6 % |
| the end of period, % | | | | | |
--------------------------------------------------------------------------------
| Debt-to-equity ratio at | 48,8 % | 36,1 % | 48,8 % | 36,1 % | 27,8 % |
| the end of period, % | | | | | |
--------------------------------------------------------------------------------
| Equity per share at the | 2,48 | 2,66 | 2,48 | 2,66 | 2,67 |
| end of period, EUR * | | | | | |
--------------------------------------------------------------------------------
| Investments in | 585 | 29 | 1 195 | 512 | 915 |
| non-current assets | | | | | |
--------------------------------------------------------------------------------
| Investments in fixed | 2,9 % | 0,2 % | 1,8 % | 1,0 % | 1,2 % |
| assets, % of net sales | | | | | |
--------------------------------------------------------------------------------
| Treasury shares held by | 90 056 | 36 583 | 90 056 | 36 583 | 69 022 |
| the Group at the end of | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Treasury shares, % of | 1,4 % | 0,6 % | 1,4 % | 0,6 % | 1,0 % |
| total share capital and | | | | | |
| votes | | | | | |
--------------------------------------------------------------------------------
| Number of total issued | 6607628 | 6607628 | 6607628 | 6607628 | 6607628 |
| shares at the end of | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Personnel on average | 386 | 378 | 384 | 397 | 392 |
| during the period | | | | | |
--------------------------------------------------------------------------------
| Personnel at the end of | 391 | 383 | 391 | 383 | 372 |
| period | | | | | |
--------------------------------------------------------------------------------
* Equity attributable to the equity holders of the parent company / Number of
shares excluding the acquired own shares
--------------------------------------------------------------------------------
| QUARTERLY KEY | III | II | I | IV | III | II | I |
| FIGURES | | | | | | | |
--------------------------------------------------------------------------------
| EUR 1000 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Net sales | 20 | 24 | 21 | 25 | 17 | 14 746 | 16 745 |
| | 435 | 016 | 584 | 724 | 570 | | |
--------------------------------------------------------------------------------
| EBITDA | 228 | 2 | 61 | 824 | 66 | 275 | 82 |
--------------------------------------------------------------------------------
| Operating | -411 | -289 | -160 | 349 | -428 | 64 | -139 |
| profit/loss | | | | | | | |
--------------------------------------------------------------------------------
| Profit/Loss before | -327 | -200 | -43 | 300 | -488 | 45 | -217 |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
| Net profit/loss | -557 | -134 | -240 | 165 | -581 | -55 | -311 |
| for the period | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | -0,09 | -0,02 | -0,04 | 0,02 | -0,09 | -0,01 | -0,05 |
| share, EUR | | | | | | | |
| (diluted = | | | | | | | |
| non-diluted) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RELATED PARTY | III | III | I-III | I-III | I-IV |
| TRANSACTIONS | | | | | |
--------------------------------------------------------------------------------
| EUR 1000 | 2010 | 2009 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Sales to related parties | 16 | 1 | 48 | 13 | 17 |
--------------------------------------------------------------------------------
| Purchases from related | 92 | 0 | 112 | 3 | 8 |
| parties | | | | | |
--------------------------------------------------------------------------------
| Loan receivables from | 558 | 571 | 558 | 571 | 562 |
| related parties | | | | | |
| (management of | | | | | |
| subsidiaries) at the end | | | | | |
| of period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COMMITMENTS | Sept 30 | Dec 31 |
--------------------------------------------------------------------------------
| EUR 1000 | 2010 | 2009 |
--------------------------------------------------------------------------------
| Mortgages and guarantees on own behalf | | |
--------------------------------------------------------------------------------
| Business mortgage for the Group's loan liabilities | 6 850 | 6 850 |
--------------------------------------------------------------------------------
| Real estate pledge for the Group's loan liabilities | 900 | 900 |
--------------------------------------------------------------------------------
| Shares and other assets pledged as security for | 3 634 | 3 634 |
| group companies' liabilities | | |
--------------------------------------------------------------------------------
| Pledges and guarantees given for the group | 227 | 226 |
| companies' | | |
| off-balance sheet commitments | | |
--------------------------------------------------------------------------------
| Guarantees given on behalf of third parties | 280 | 280 |
--------------------------------------------------------------------------------
| Minimum future operating lease payments | 7 134 | 4 397 |
--------------------------------------------------------------------------------
Accounting principles applied in the condensed consolidated financial statements
These condensed consolidated financial statements are unaudited. This interim
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 interim report are consistent with those adopted in the
preparation of the Annual Report 2009 taking into account also the new, revised
and amended standards and interpretations. Adoption of the amended standards
IFRS 3 (Business Combinations) and IAS 27 (Consolidated and Separate Financial
Statements) impacted the accounting of minority shares acquired during the
financial period as well as the measurement of minority interests in loss-making
subsidiaries. Adopting the amendments in IFRS 2 and IAS 39 as well as the new
interpretations IFRIC 17 and IFRIC 18 did not have a material impact on the
information presented in this interim report.
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.
In June 2010, the parent company reacquired shares (1 %) in Wulff Supplies from
an employee leaving the group. In August, this one-percentage ownership was sold
to Wulff Supplies' new key employee. As these transactions were made based on
the share of the equity, they did not impact the Group's financial result.
Closing of the small direct sales operations in Lithuania in summer 2010 did not
have a material impact on the Group's net sales, profitability or financial
status.
The TyEL pension premium loans withdrawn in summer 2009 have a bank guarantee
which margin is linked to the covenants regarding the equity ratio and the
interest-bearing debt/EBITDA ratio. The equity ratio shall be 35 % at minimum in
the end of each year. In 2009, the interest-bearing debt/EBITDA ratio
requirement of 5 was not reached but the violation was agreed with the bank with
no consequences for the Group. Based on the result estimate, it is probable that
the interest-bearing debt/EBITDA covenant (ratio 3,5) will be breached also as
of December 31, 2010. The Group has negotiated with the bank in the autumn and
in case of a probable covenant breach, the Group would be required to pay a
one-off minor compensation to the bank which then will not have other
requirements based on the current result estimate.
The Group has no knowledge of any significant events after the end of the
interim period that would have had a material impact on this interim report in
any other way that has been already discussed in the interim review by the Board
of Directors.
In Vantaa on November 9, 2010
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