INTERIM REPORT | OCTOBER 24, 2022 AT 9.30 A.M.
This is a summary of Wulff Group Plc's Interim Report for January-September
2022. 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 (https://www.wulff.fi/en/).
Operating profit increased due to profitability measures
1.7.-30.9.2022 BRIEFLY
· Net sales totalled EUR 24.0 million (24.2), decreased by 1.0%
· EBITDA and comparable EBITDA were EUR 1.7 million (1.7)
· Operating profit (EBIT) and comparable operating profit (EBIT) were EUR 1.2
million (1.0)
· Earnings per share (EPS) and comparable earnings per share were EUR 0.13
(0.10)
· The outlook remains unchanged; Wulff estimates that net sales in 2022 will
increase clearly and the comparable operating profit will increase compared to
2021
1.1-30.9.2022 BRIEFLY
· Net sales totalled EUR 74.5 million (62.8), increased by 18.6%
· EBITDA was EUR 4.4 million (7.7) and comparable EBITDA was EUR 4.4 million
(4.0)
· Operating profit (EBIT) was EUR 2.8 million (6.2) and comparable operating
profit (EBIT) was EUR 2.8 million (2.4)
· Earnings per share (EPS) was EUR 0.29 (0.78) and comparable earnings per
share was EUR 0.29 (0.23)
WULFF GROUP PLC'S CEO ELINA PIENIMÄKI
The energy crisis and rising prices affect us all: general consumption as well
as company purchasing and investments. In Wulff's operations, this can be seen
as a strong focus on profitability and in the selective guidelines for new
customer acquisitions. We trust that a competitive advantage can be found now
and in the future from our strategy "a better world, one workplace at a time".
Especially at the time of changes and in an uncertain economic situation, it is
important to work long-term to achieve our strategic goals. Our results have
developed positively in a challenging time, and in the review period, sales
growth has been achieved especially in our Scandinavian operations. It is
especially thanks to our top-class sales expertise. Thank you to all our
customers for choosing Wulff as your partner. Just as valuable as getting a new
customer, is being able to serve the customer again and again and extend the
contract. Your choices show that you value a local, domestic, and responsible
partner. The climate crisis is an issue whose solution is shared by the whole
world and every better choice has an impact. Regarding workplace products and
services, it is possible to make a green transition easily with Wulff.
GROUP NET SALES AND PERFORMANCE
In January-September 2022, net sales totalled EUR 74.5 million (62.8), and EUR
24.0 million (24.2) in July-September. Net sales grew by 18.6% (48.7) in
January-September and decreased by 1.0% (-95.1) in the third quarter. Sales of
the Contract Customers Segment increased especially in Scandinavia. In Finland,
Contract Customers Segment's turnover was affected by the emphasis put on
profitability and the resulting policies in customer selection, as well as the
expected continued contraction in sales of protective products. At the beginning
of the year, Wulff invested in strengthening the offering of its accounting and
financial management services by purchasing Carpentum Oy on January 4, 2022. The
sales of the financial administration services business have increased as
expected due to the transaction. Sales of Wulff Entre's international exhibition
services and remote meeting solutions have been growing during the review
period. In Expertise Sales Segment, the decrease in demand of hygiene and
protective products was, as expected, reflected in a decrease in turnover.
In January-September 2022 the gross margin amounted to EUR 22.5 million (19.8)
being 30.2% (31.5) of net sales, and EUR 7.2 million (7.4) in the third quarter
being 29.8% (30.5) of net sales. The acquisition of Wulff Solutions on 3 May
2021 contributed EUR 7.1 million to the gross margin in January-September 2022.
The integration of the purchased company into Wulff is progressing as planned.
In the review period, the relative development of the sales margin was
particularly affected by the emphasis on demand for workplace products and
services that preceded the Coronavirus pandemic. In addition to price inflation,
these most demanded products are still subject to availability challenges and an
accelerated increase in logistics costs during July-September. The proportion of
net sales in the Contract Customers Segment continued to grow while diminished
in the Expertise Sales Segment, e.g. with the decrease in sales of hygiene and
protective products.
In January-September 2022, employee benefit expenses amounted to EUR 12.7
million (11.2) being 17.0% (17.9) of net sales, and EUR 3.7 million (3.7) being
15.6% (15.4) of net sales in the third quarter. 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 5.6 million (5.9) in January-June 2022,
being 7.6% (9.4) of net sales, and EUR 1.8 million (2.1), being 7.4% (8.8) of
net sales, in the third quarter. As planned, the group used fewer external
services than in the comparison period.
In January-September 2022 EBITDA amounted to EUR 4.4 million (7.7), being 6.0%
(12.3) of net sales, and EUR 1.7 million (1.7), being 7.0% (7.1) of net sales,
in July-September. Goodwill recognition of EUR 4.5 million due to the favourable
acquisition and EUR 0.7 million of costs arising from the implementation of the
acquisition have been deducted from the comparable results 2021. In
January-September 2022 comparable EBITDA amounted to EUR 4.4 million (4.0),
being 6.0% (6.3) of net sales, and EUR 1.7 million (1.7), in the third quarter,
being 7.0% (7.1) of net sales.
Operating profit (EBIT) amounted to EUR 2.8 million (6.2), 3.7% (9.8) of net
sales, and EUR 1.2 million (1.0), 4.9% (4.3), in the third quarter. The
comparable operating profit (EBIT) amounted to EUR 2.8 million (2.4), 3.7% (3.8)
of net sales, and EUR 1.2 million (1.0), 4.9% (4.3), in the third quarter.
In January-September 2022, the financial income and expenses totalled (net) EUR
-0.5 million (-0.3), including interest expenses of EUR -0.3 million (-0.2), and
mainly currency-related other financial items (net) totalled EUR -0.2 million
(-0.1). In the third quarter, the financial income and expenses (net) totalled
EUR -0.2 million (-0.1). Financial expenses were EUR 0.1 million higher than the
comparison period due to exchange rate fluctuations and the rise of the market
interest rates.
In January-September 2022, the result before taxes was EUR 2.2 million (5.9),
while the result before taxes was EUR 1.0 million (0.9) in the third quarter. In
January-September 2022, the comparable result before taxes was EUR 2.2 million
(2.1), while the comparable result before taxes was EUR 1.0 million (0.9) in the
third quarter.
In January-September 2022, the net profit was EUR 2.0 million (5.5) and EUR 0.9
million (0.8) in the third quarter. The comparable net profit for the reporting
period was EUR 2.0 million (1.8), while the comparable net profit was EUR 0.9
million (0.8) in the third quarter.
Earnings per share (EPS) were EUR 0.29 (0.78) in January-September 2022 and EUR
0.13 (0.10) in the third quarter. Comparable earnings per share (EPS) were EUR
0.29 (0.23) in January-September 2022 and EUR 0.13 (0.10) in the third quarter.
KEY FIGURES
III III I-III I-III I-IV
EUR 1000 2022 2021 2022 2021 2021
Net sales 24 011 24 74 62 90
246 494 788 424
Change in net sales, % -1.0% 95.1% 18.6% 48.7% 57.1
%
Gross profit 7 157 7 392 22 19 28
475 806 685
Gross profit. % 29.8% 30.5% 30.2% 31.5% 31.7
%
EBITDA 1 677 1 714 4 447 7 738 9 128
EBITDA margin, % of net 7.0% 7.1% 6.0% 12.3% 10.1
sales %
Comparable EBITDA 1 677 1 714 4 447 3 981 6 073
Comparable EBITDA 7.0% 7.1% 6.0% 6.3% 6.7 %
margin. % of net sales
Operating profit/loss 1 166 1 032 2 770 6 167 6 940
Operating profit/loss 4.9% 4.3% 3.7% 9.8% 7.7 %
margin, % of net sales
Comparable operating 1 166 1 032 2 770 2 410 3 885
profit/loss
Comparable operating 4.9% 4.3% 3.7% 3.8% 4.3 %
profit/loss, % of net
sales
Profit/Loss before 1 013 889 2 238 5 856 6 552
taxes
Profit/Loss before 4.2% 3.7% 3.0% 9.3% 7.2 %
taxes margin, % of net
sales
Comparable profit 1 013 889 2 238 2 099 3 497
before taxes
Comparable profit 4.2% 3.7% 3.0% 3.3% 3.9 %
before taxes, % of net
sales
Net profit/loss for the 888 661 1 965 5 292 5 896
period attributable to
equity holders of the
parent company
Net profit/loss for the 3.7% 2.7% 2.6% 8.4% 6.5 %
period, % of net sales
Comparable net 888 661 1 965 1 535 2 841
profit/loss for the
period
attributable to equity
holders of the parent
company
Comparable net 3.7% 2.7% 2.6% 2.4% 3.1 %
profit/loss for the
period, % of
net sales
Earnings per share, EUR 0.13 0.10 0.29 0.78 0.87
(diluted = non-diluted)
Comparable earnings per 0.13 0.10 0.29 0.23 0.42
share. EUR (diluted =
non-diluted)
Return on equity (ROE), 4.4% 3.9% 10.0% 33.3% 36.3
% %
Return on investment 3.2% 4.3% 7.6% 21.8% 25.0
(ROI), % %
Equity-to-assets ratio 40.2% 35.9% 40.2% 35.9% 38.1
at the end of period, % %
Debt-to-equity ratio at 68.7% 63.8% 68.7% 63.8% 62.1
the end of period %
Equity per share at the 2.94 2.64 2.94 2.64 2.73
end of period, EUR *
Investments in non 416 247 1 859 968 1 388
-current assets
Gross investments, % of 1.7% 1.0% 2.5% 1.5% 1.5 %
net sales
Treasury shares held by 44 812 137 44 137 137
the Group at the end of 260 812 260 260
period
Treasury shares, % of 0.6% 2.0% 0.6% 2.0% 2.0%
total share capital and
votes
Average number of 6 862 6 770 6 859 6 769 6 769
outstanding shares 816 368 969 009 352
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 286 299 287 276 248
during the period
Personnel at the end of 284 297 284 297 278
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
intensity of the inflation trend has been affected first by the pandemic
restrictions and then by Russia's attack on Ukraine. The development of both the
global economy and local economies is strongly affected by the energy crisis,
rising prices and monetary policy decisions aimed at combating inflation. All of
this also affects Wulff's operations. 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
Among the global megatrends, Wulff's operating environment is positively
affected by the increase in the 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, increasing
equality and decent work and economic growth (UN Sustainable Development Goals
2030) 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 Coronavirus pandemic,
the market for workplace products and services in the Nordic countries had
remained stable for several years. Wulff estimates that the overall market for
workplace products and services will remain stable, even when there are rapid
changes in work environments. Safe face-to-face meetings will be taken care of
even after the Coronavirus pandemic in the future, and therefore at Wulff, the
demand for hygiene, cleaning, and protection products is estimated to remain at
a good level. The pandemic has accelerated the upheaval on how we work; the
growth of multi-local teleworking has increased the number of workstations and
the demand for products needed at workstations. Demand for IT supplies, printing
products and traditional office supplies continues to develop post-pandemic.
This is due to the partial return to work and the increased number of new
workstations. The Group's net sales and operating profit are affected by the
development of the international exhibition services industry, as the industry
is gradually recovering from the Coronavirus pandemic.
The ongoing geopolitical crisis, the Russian invasion of Ukraine and the
coercive measures against Russia do not directly affect Wulff's activities, as
Wulff has not had any activities or partnerships in the countries involved in
the crisis. The crisis is having an impact on global supply chains, the changes
to which may also indirectly affect Wulff's industries. Changes into global
supply chains have intensified and broadened the recent price inflation
development and made it difficult for many product groups to be available.
Continued inflation makes it necessary to secure the development of gross
margin. The uncertainty concerning the intensity and broadening of inflation set
a restraint into predictability.
The reorganisation of Wulff's contract sales organisation in Finland along with
the cooperation negotiations conducted with Wulff Oy Ab and Wulff Solutions Oy
in August-September 2021 caused functions in sales, administration and support
functions to be merged. As a result of the cooperation negotiations, the company
will achieve annual cost savings of approximately EUR 1.9 million in personnel
costs. With the implemented and planned restructuring measures such as the
consolidation of information systems, logistical and operational processes, and
facility changes, Wulff expects to achieve total annual cost synergies of
approximately EUR 3 million in stages. A significant portion of these cost
synergies will already be realised 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 estimates that net sales in 2022 will increase clearly and comparable
operating profit will increase compared to 2021.
In Espoo on October 24, 2022
WULFF GROUP PLC
BOARD OF DIRECTORS
Further information:
CEO Elina Pienimäki
tel. +358 40 647 1444
e-mail: elina.pienimaki@wulff.fi
DISTRIBUTION
Nasdaq Helsinki Oy
Key media
www.wulff.fi/en
A better world - one workplace at a time. We enable better and more sustainable
work environments and a perfect working day. We do the workplace - where ever it
is today. At Wulff you will find e.g. hygiene, protection and safety products,
air purification, workplace products, coffee accessories, property and cleaning
products, office and IT supplies, ergonomics, first aid, and innovative products
for construction sites. Our range also includes high-quality Canon printing and
document management services and, most recently, financial management services.
Customers can also acquire international exhibition services and solutions for
remote encounters from us. As a clear domestic market leader, we are constantly
developing our range and, according to Taloustutkimus research, we offer the
best customer service in the industry (shared number one, TEP 2021). In addition
to Finland, Wulff Group operates in Sweden, Norway and Denmark. Read more at
wulff.fi/en (https://www.wulff.fi/en/).