INTERIM REPORT OCTOBER 25, 2021 AT 9.30 A.M.
This is a summary of Wulff Group Plc’s interim report for January-September
2021. Wulff Group’s interim report as a whole is attached as a PDF file to this
stock exchange release and it is also available on the company’s website
www.wulff.fi.
The acquisition boosted growth and the positive earnings trend continued
July 1–September 30, 2021 IN BRIEF
· Net sales totalled EUR 24.2 million (12.4), increased by 95.1%
· EBITDA and comparable EBITDA were EUR 1.7 million (1.3)
· Operating profit (EBIT) and comparable operating profit (EBIT) were EUR 1.0
million (0.9)
· Earnings per share (EPS) and comparable earnings per share were EUR 0.10
(0.09)
· Wulff estimates that net sales will grow to more than EUR 90 million in 2021
(EUR 57.5 million in 2020), operating profit will grow significantly from the
previous year, and comparable operating profit will remain at a good level in
2021.
January 1–September 30, 2021 IN BRIEF
· Net sales totalled EUR 62.8 million (42.2), increased by 48.7%
· EBITDA was EUR 7.7 million (3.7) and comparable EBITDA was EUR 4.0 million
(3.7)
· Operating profit (EBIT) was EUR 6.2 million (2.4) and comparable operating
profit (EBIT) was EUR 2.4 million (2.4)
· Earnings per share (EPS) was EUR 0.78 (0.19) and comparable earnings per
share was EUR 0.23 (0.19)
· The equity ratio was 35.9% (41.5)
WULFF GROUP PLC’S CEO ELINA PIENIMÄKI
“The transformation of working life is here now, and we at Wulff are ready to
serve our customers in the new situation. We strongly believe that people look
forward to returning to work and encounters, while multi-location and
teleworking has become a permanent part of our daily lives. As a market leader
in our field and as a multi-channel company, we reach comprehensively and
personally companies of different sizes in different industries in our operating
countries. We get real-time information about companies' needs - and we can
respond to them quickly. Our market position is strengthened, and growth and the
positive development of profitability are supported by the acquisition of
Staples Finland to the Wulff Group in May. We have implemented the measures to
combine Contract Customers in a determined and prompt manner. As a result of the
co-operation negotiations between Wulff Solutions (formerly Staples Finland) and
Wulff Oy Ab, which ended in September, we have an efficient organization in
Finland that focuses on sales and customer experience. Although it was necessary
to terminate employment relationships to eliminate duplication, the Wulff family
as a whole grew in Finland with new top professionals. We also gained new
partners and customers. I am glad to be able to work with both familiar and new
people, as well as people who are important to Wulff.”
GROUP NET SALES AND PERFORMANCE
In January–September 2021, net sales totalled EUR 62.8 million (42.2), and EUR
24.2 million (12.4) in July–September. Net sales grew by 48.7% (2.3) in
January–September and by 95.1% (3.2) in the third quarter. The increase was
driven by the acquisition of Wulff Solutions on May 3, 2021. The sales of the
Expertise Sales segment’s hygiene and protective products decreased from the
pandemic year 2020.
A price of EUR 6.0 million was paid for the acquisition of Wulff Solutions. The
final acquisition price of EUR 6.0 million is less than the net assets of the
company, approximately EUR 10.5 million, at the acquisition date of May 3, 2021.
The goodwill gain of EUR 4.5 million resulting from the completed acquisition
has been recognised in other operating income. This negative goodwill
recognition has been treated as a non-recurring item affecting comparability.
In January–September 2021 the gross margin amounted to EUR 19.8 million (15.4),
accounting for 31.5% (36.5) of net sales, and EUR 7.4 million (4.4) in the third
quarter, equal to 30.5% (35.5) of net sales. Thanks to the acquisition of Wulff
Solutions on May 3, 2021, the margin increased by EUR 5.5 million for the full
reporting period and by EUR 3.1 million in July-September. The gross margin
level of the increased Contract Customers segment in relation to net sales is
lower than the gross margin level of Expertise Sales segment. In addition, the
gross margin level fell short of the comparison period after the price level of
hygiene products stabilized from the peak of 2020.
In January-September 2021, employee benefit expenses amounted to EUR 11.2
million (8.8) being 17.9% (20.8) of net sales, and EUR 3.7 million (2.3) being
15.4% (18.4) of net sales in the third quarter. Wulff’s personnel increased by
114 employees as a result of the acquisition. The increase in employee benefit
expenses in relation to net sales was lower than the increase in net sales. In
the second quarter of 2021, non-recurring personnel expenses arising from the
completion of the acquisition and termination of employment amounted to
approximately EUR 0.2 million.
Other operating expenses amounted to EUR 5.9 million (3.2) in January–June 2021,
being 9.4% (7.5) of net sales, and EUR 2.1 million (0.9), being 8.8% (7.3) of
net sales, in the third quarter. In the second quarter of 2021, non-recurring
expenses arising from the completion of the acquisition amounted to
approximately EUR 0.5 million.
In January–September 2021 EBITDA amounted to EUR 7.7 million (3.7), being 12.3%
(8.7) of net sales, and EUR 1.7 million (1.3), being 7.1% (10.7) of net sales,
in July–September. Goodwill recognition of EUR 4.5 million due to the favourable
acquisition during the second quarter and EUR 0.7 million of costs arising from
the implementation of the acquisition have been deducted from the comparable
results. The reporting period 2020 did not include items affecting
comparability. In January–September 2021 comparable EBITDA amounted to EUR 4.0
million (3.7), being 6.3% (8.7) of net sales, and EUR 1.7 million (1.3), being
7.1% (10.7) of net sales, in the third quarter.
Operating profit (EBIT) amounted to EUR 6.2 million (2.4), 9.8% (5.7) of net
sales, and EUR 1.0 million (0.9), or 4.3% (7.2), in the third quarter. The
comparable operating profit (EBIT) amounted to EUR 2.4 million (2.4), 3.8% (5.7)
of net sales, and EUR 1.0 million (0.9), 4.3% (7.2), in the third quarter.
In January-September 2021, the financial income and expenses totalled (net) EUR
-0.3 million (-0.5), including interest expenses of EUR -0.2 million (-0.1), and
mainly currency-related other financial items (net) totalled EUR -0.1 million
(-0.4). In the third quarter, the financial income and expenses (net) totalled
EUR -0.1 million (-0.1).
In January–September 2021, the result before taxes was EUR 5.9 million (1.9),
while the result before taxes was EUR 0.9 million (0.8) in the third quarter. In
January–September 2021, the comparable result before taxes was EUR 2.1 million
(1.9), while the comparable result before taxes was EUR 0.9 million (0.8) in the
third quarter.
In January–September 2021, the net profit was EUR 5.5 million (1.6) and EUR 0.8
million (0.7) in the third quarter. The comparable net profit for the reporting
period was EUR 1.8 million (1.6), while the comparable net profit was EUR 0.8
million (0.7) in the third quarter.
Earnings per share (EPS) were EUR 0.78 (0.19) in January–September 2021 and EUR
0.10 (0.09) in the third quarter. Comparable earnings per share (EPS) were EUR
0.23 (0.19) in January–September 2021 and EUR 0.10 (0.09) in the third quarter.
KEY FIGURES
III III I-III I-III I-IV
EUR 1000 2021 2020 2021 2020 2020
Net sales 24 12 62 42 57
246 425 788 227 541
Change in net sales, % 95.1% 3.2% 48.7% 2.3% 2.1%
Gross profit 7 392 4 408 19 15 20
806 403 748
Gross profit. % 30.5% 35.5% 31.5% 36.5% 36.1%
EBITDA 1 714 1 327 7 738 3 677 5 204
EBITDA margin, % of net 7.1% 10.7% 12.3% 8.7% 9.0%
sales
Comparable EBITDA 1 714 1 327 3 981 3 677 5 204
Comparable EBITDA 7.1% 10.7% 6.3% 8.7% 9.0%
margin. % of net sales
Operating profit/loss 1 032 899 6 167 2 390 3 541
Operating profit/loss 4.3% 7.2% 9.8% 5.7% 6.2%
margin, % of net sales
Comparable operating 1 032 899 2 410 2 390 3 541
profit/loss
Comparable operating 4.3% 7.2% 3.8% 5.7% 6.2%
profit/loss, % of net
sales
Profit/Loss before 889 802 5 856 1 900 3 101
taxes
Profit/Loss before 3.7% 6.5% 9.3% 4.5% 5.4%
taxes margin, % of net
sales
Comparable profit 889 802 2 099 1 900 3 101
before taxes
Comparable profit 3.7% 6.5% 3.3% 4.5% 5.4%
before taxes, % of net
sales
Net profit/loss for the 661 619 5 292 1 260 2 174
period attributable to
equity holders of the
parent company
Net profit/loss for the 2.7% 5.0% 8.4% 3.0% 3.8%
period, % of net sales
Comparable net 661 619 1 535 1 260 2 174
profit/loss for the
period
attributable to equity
holders of the parent
company
Comparable net 2.7% 5.0% 2.4% 3.0% 3.8%
profit/loss for the
period, % of
net sales
Earnings per share, EUR 0.10 0.09 0.78 0.19 0.32
(diluted = non-diluted)
Comparable earnings per 0.10 0.09 0.23 0.19 0.32
share. EUR (diluted =
non-diluted)
Return on equity (ROE), 33.3% 5.0% 33.3% 12.1% 19.1%
%
Return on investment 21.8% 3.9% 21.8% 9.5% 15.2%
(ROI), %
Equity-to-assets ratio 35.9% 41.5% 35.9% 41.5% 41.9%
at the end of period, %
Debt-to-equity ratio at 63.8% 62.6% 63.8% 62.6% 57.3%
the end of period
Equity per share at the 2.64 1.95 2.64 1.95 2.00
end of period, EUR *
Investments in non 247 27 968 388 719
-current assets
Gross investments, % of 1.0% 0.2% 1.5% 0.9% 1.2%
net sales
Treasury shares held by 137 144 13 144 144
the Group at the end of 260 260 7260 260 260
period
Treasury shares, % of 2.0% 2.1% 2.0% 2.1% 2.1%
total share capital and
votes
Average number of 6 770 6 763 6 769 6 800 6 791
outstanding shares 368 368 009 335 043
Number of total issued 6 907 6 907 6 907 6 907 6 907
shares at the end of 628 628 628 628 628
period
Personnel on average 299 185 276 192 189
during the period
Personnel at the end of 297 182 297 182 176
period
* 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
General economic and market developments as well as the employment rate have a
significant impact on the demand for workplace products and services. The
general uncertainty in the global economy also impacts Wulff's operations. The
effects of the coronavirus pandemic and the restrictions in place to contain and
mitigate the virus have a broad impact on the needs of both the global and local
economy and customers. In addition, megatrends in the global economy, such as
digitalization and responsibility, are affecting market change. There are both
risks and opportunities involved in developing a range of products and services
in line with changing markets and needs. Typical business risks include the
successful implementation of Wulff's strategy, such as the integration of
operations from business acquisitions, and operational risks arising from the
personnel, logistics and IT environment. Intense competition in the workplace
products and services industry can affect the profitability of the business.
Changes in exchange rates affect the Group's net result and balance sheet.
SUBSEQUENT EVENTS
The Group has not had any significant events after the reporting period.
MARKET SITUATION AND FUTURE OUTLOOK
Megatrends play a role in Wulff’s operations. The company's operating
environment is positively affected by the growing share of knowledge work in all
work performed. On the other hand, demographic developments are actively
reducing the number of people in employment at present. The integration of
technology into products and services is an opportunity for Wulff.
Digitalization brings new ways for an already multi-channel company to reach and
serve customers and streamline its own operations. Of the megatrends, the most
significant for Wulff's operations and future is responsible operations and, in
particular, consideration for the environment: is the environment treated as a
resource or is the goal to improve the state of the environment. Future success
is strongly built on these themes and their importance is growing in business
and consumer decision-making. Wulff has chosen responsibility, particularly
positive climate action and increasing equality as important elements of its
strategy.
Demand for products is significantly affected by general economic and market
developments as well as the employment rate. Before the pandemic, the market for
workplace products and services in the Nordic countries remained stable for
several years. Wulff estimates that the overall market for workplace products
and services will remain stable, despite rapid changes in work environments.
With the positive development in vaccine coverage, protection products will no
longer be as necessary as they were at the onset of the pandemic. However, safe
encounters will continue to be important. Wulff expects demand for hygiene,
cleansing, cleaning, and protection products to remain at a good level despite
the change. At the same time, the pandemic has brought lasting changes to the
way we work; teleworking has increased and increased the number of workstations
and the demand for products needed at workstations. Demand for IT supplies,
printing products and traditional office supplies is expected to stabilize at
pre-pandemic levels in the near future. This is due to the partial return to
work and the increased number of new workstations created by the pandemic-driven
change in working life in homes and leisure homes. The Group's net sales and
operating profit are weakened by the situation in the international exhibition
services, which is recovering slowly. Demand for Wulff Entre’s traditional
Premium Exhibition services remains low due to the coronavirus pandemic, even
though the market has finally opened.
Wulff renewed its Finnish Contract Customers organization. As a result of the co
-operation negotiations between Wulff Oy Ab and Wulff Solutions Oy (formerly
Staples Finland Oy) held in August-September, the functions in sales,
administration and support functions were merged. The negotiations were part of
developing operations and strategy to be more commercial, customer-centric, and
responsible. Synergy benefits will be sought in stages in all activities. During
the last quarter of 2021, non-recurring costs due to the termination of
employment will be approximately EUR 0.7 million. At the same time, the
restructuring will result in personnel and information system cost savings of
approximately EUR 0.7 million in the last quarter of 2021. As a result of the co
-operation procedures, the company will achieve annual cost savings of
approximately EUR 1.9 million. With the reorganization measures now implemented
and planned, such as the merging of software and IT systems, as wells as
logistics and operating processes, and the changes in premises, Wulff expects to
achieve a total annual cost synergy benefit of approximately EUR 3 million in
stages. A significant part of the cost synergies will be realized already in
2022.
Wulff aims to grow profitably, and it has the continuing ability to be a more
active player in M&A than its competitors.
Wulff maintains its guidance for operating profits and its outlook for net
sales. Wulff estimates that net sales will grow to more than EUR 90 million (EUR
57.5 million in 2020), operating profit will grow significantly from the
previous year, and comparable operating profit will remain at a good level in
2021. As previously stated, Wulff targets in the medium-term an average annual
growth of 5-10% of the net sales, a growing comparable operating profit per cent
and an increasing dividend per share. Wulff will update its strategy and
financial targets during 2021 and announce possible changes by the end of 2021.
In Espoo on October 25, 2021
WULFF-YHTIÖT OYJ
BOARD OF DIRECTORS
Further information:
CEO Elina Pienimäki
tel. +358 40 647 1444
e-mail: elina.pienimaki@wulff.fi
DISTRIBUTION
Nasdaq OMX Helsinki Oy
Key media
www.wulff.fi (https://www.wulff.fi/en/)
A better world – one workplace at a time. Wulff’s goal is a perfect workday! We
enable better working environments and create workplaces, wherever you may be.
More responsible, more comfortable, healthier, safer, more enjoyable, more
active, and more diverse? How would you like to improve your working day and
environment? Wulff has the solution. We offer our customers hygiene- and
protective products, air purifiers, office supplies, facility management
products, catering solutions, IT supplies, ergonomics, first aid, and innovative
products for worksites. Customers can also acquire international exhibition
services and solutions for remote encounters from Wulff. As the clear market
leader in Finland, we are constantly developing our offering and, according to
Taloustutkimus, we offer the best customer service in the industry. In addition
to Finland, Wulff operates in Sweden, Norway, and Denmark. More information at
wulff.fi (https://www.wulff.fi/en/)