Strong second quarter - investments in sales culture and synergies are paying
off
1.4.-30.6.2023 BRIEFLY
· Net sales totalled EUR 24.4 million (24.9), decreased by 2.0%
· EBITDA and comparable EBITDA was EUR 1.3 million (1.0)
· Operating profit and comparable operating profit (EBIT) were EUR 0.8 million
(0.4)
· Earnings and comparable earnings per share (EPS) were EUR 0.09 (0.02)
· The equity ratio was 42.1% (38.8)
· The outlook remains unchanged; Wulff estimates that net sales and comparable
operating profit 2023 will increase compared to 2022.
1.1.-30.6.2023 BRIEFLY
· Net sales totalled EUR 49.6 million (50.5), decreased by 1.7%
· EBITDA and comparable EBITDA were EUR 2.7 million (2.8)
· Operating profit and comparable operating profit (EBIT) were EUR 1.7 million
(1.6)
· Earnings and comparable earnings per share (EPS) were EUR 0.17 (0.16)
WULFF GROUP PLC'S CEO ELINA RAHKONEN
I am pleased with the positive earnings development in our first half of the
year. It reports that the integration of the acquisition of Staples Finland in
spring 2021: the integration of expertise, operating models, doing and systems,
progressed as planned and well. The realized synergy benefits are reflected
positively in our result. In all operating countries and business areas, it has
been possible to clarify the focus of operations after the pandemic period, and
necessary changes have also been made to operations. Our position as an expert
in the Nordic working life has also been strengthened in this respect in all our
businesses. It is important to know what is important to our customers now and
in the future - and we get this information effectively and in real time from up
to 200,000 personal customer encounters every year.
The positive development of profitability gives us the capabilities to build a
responsible future and develop our product and service selection in line with
our customers' wishes. Our results also show our customers' appreciation for our
top-class sales expertise. At Wulff, solution-oriented customer service is the
number one goal in both sales and support services. I believe we are the most
competitive company in the field in the Nordics thanks to our committed staff
and partners. What makes us a successful company is that we strongly share the
same values with our customers. That's why our customers choose us as their
partner again and again, and that's why we also win new ones.
GROUP'S NET SALES AND RESULT PERFORMANCE
In January-June 2023 net sales totalled EUR 49.6 million (50.5), and in April
-June EUR 24.4 million (24.9). Net sales decreased in the first half year period
by 1.7% (increased 31.0) and by 2.0% (increased 7.1) in the second quarter. In
the second quarter, the sales of the Contract Customers Segment increased in
Finland and almost equal to the comparison period in Scandinavia. The turnover
of the Contract Customers Segment was affected by the emphasis on profitability,
customer choices and the targeting of new customer acquisition activities.
Wulff's accounting and financial management service business grew with the
purchase of Carpentum Oy in 2022. The sales of the financial administration
service business have grown as expected and steadily. The sales of Wulff Entre's
international exhibition services and remote meeting solutions shrank from the
comparison period due to the event selections that affected sales targeting. The
development of Expertise Sales in Finland was positive compared to the
comparison period, in the Scandinavian market Expertise Sales shrank slightly.
In January-June 2023 the gross margin amounted to EUR 15.2 million (15.3)
being 30.7% (30.3) of net sales, and EUR 7.5 million (7.1) in the second quarter
being 30.8% (28.7) of net sales. The integration of Wulff Solutions Oy, which
was purchased in spring 2021, into Wulff's Contract Customers Segment proceeded
as planned during the review period. The relative development of the sales
margin was influenced by changes in demand for products sold by Wulff. The
demand for products in the care products area is livelier than during the
Coronavirus pandemic. Sales of more traditional workplace products and services
are recovering to follow the general economic and employment situation. During
the review period, the sales margin of workplace products has been affected by
price inflation, which significantly accelerated during the comparison period
and then became widespread. The purchase prices of the best-selling products
were higher compared to the comparison period. During the review period, the
availability of Wulff's range of products has normalized. The logistics cost
challenges have been answered with the synergy benefits implemented in the
Contract Customers Segment. The Contract Customers Segment's share of net sales
shrank compared to the comparison period, while the share of gross margin
increased. The sales value of the Expertise Sales Segment was almost the same as
the comparison period, with a balanced development of the gross margin.
In January-June 2023 employee benefit expenses amounted to EUR 9.0 million (9.0)
being 18.2% (17.7) of net sales, and respectively, in the second quarter EUR 4.5
million (4.5), being 18.3% (18.0) of net sales.
Other operating expenses amounted to EUR 3.6 million (3.9) in January-June 2023,
being 7.2% (7.7) of net sales and respectively EUR 1.8 million (1.9) in the
second quarter, being 7.4% (7.6) of net sales. The use of external services was
reduced from the comparison period, both absolutely and relatively, thanks to
the consolidation of the functions of the merging companies and Wulff's most
cost-effective operating models as possible.
In January-June 2023 EBITDA and comparable EBITDA amounted to EUR 2.7 million
(2.8) being 5.5% (5.5) of net sales, and EUR 1.3 million (1.0) in the second
quarter, being 3.4% (3.9) of net sales. Operating profit (EBIT) and comparable
operating profit (EBIT) amounted to EUR 1.7 million (1.6), 3.5% (3.2) of net
sales and respectively EUR 0.8 million (0.4), 3.4% (1.6) in the second quarter.
The first two quarters of 2023 and 2022 did not include items affecting
comparability.
In January-June 2023 the financial income and expenses totalled (net) EUR -0.5
million (-0.4) including interest expenses of EUR -0.4 million (-0.2) and mainly
currency-related other financial items and bank expenses EUR -0.1 million (
-0.1). In the second quarter financial income and expenses totalled (net) EUR
-0.3 million (-0.2). Financial expenses were EUR 0.1 million higher than the
comparison period due to the increase in interest expenses caused by the rise in
market interest rates.
In January-June 2023 the result before taxes was EUR 1.2 million (1.2), in the
second quarter the result before taxes was EUR 0.5 million (0.2).
The net profit for the reporting period was EUR 1.2 million (1.1) and in the
second quarter the net profit was EUR 0.6 million (0.2).
Earnings per share and comparable earnings per share (EPS) were EUR 0.17 (0.16)
in January-June 2023, and EUR 0.09 (0.02) in the second quarter.
KEY FIGURES
II II I-II I-II I-IV
EUR 1000 2023 2022 2023 2022 2022
Net sales 24 365 24 873 49 617 50 483 102 171
Change in net sales -2.0% 7.1% -1.7% 31.0% 13.0 %
%
Gross profit 7 494 7 127 15 247 15 318 30 986
Gross profit. % 30.8% 28.7% 30.7% 30.3% 30.3 %
EBITDA 1 308 971 2 725 2 770 6 213
EBITDA margin. % 5.4% 3.9% 5.5% 5.5% 6.1 %
Operating 832 398 1 741 1 605 3 988
profit/loss
Operating 3.4% 1.6% 3.5% 3.2% 3.9 %
profit/loss margin.
%
Profit/Loss before 541 224 1 218 1 224 3 273
taxes
Profit/Loss before 2.2% 0.9% 2.5% 2.4% 3.2 %
taxes margin. %
Net profit/loss for 598 163 1 159 1 077 3 052
the period
attributable to
equity holders of
the
parent company
Net profit/loss for 2.5% 0.7% 2.3% 2.1% 3.0 %
the period. %
Earnings per share. 0.09 0.02 0.17 0.16 0.45
EUR (diluted = non
-diluted)
Return on equity 2.8% 0.9% 5.5% 5.6% 15.5 %
(ROE). %
Return on investment 2.3% 0.9% 4.7% 4.4% 11.2 %
(ROI). %
Equity-to-assets 42.1% 38.8% 42.1% 38.8% 40.5 %
ratio at the end of
period. %
Debt-to-equity ratio 65.6% 65.9% 65.6% 65.9% 60.6 %
at the end of period
Equity per share at 3.08 2.82 3.08 2.82 3.02
the end of period.
EUR *
Investments in non 271 931 723 1 443 2 479
-current assets
Investments in non 1.1% 3.7% 1.5% 2.9% 2.4 %
-current assets. %
of
net sales
Treasury shares held 111 624 44 812 111 624 44 812 111 624
by the Group at the
end of period
Treasury shares. % 1.6% 0.6% 1.6% 0.6% 1.6 %
of total share
capital
and votes
Average number of 6 796 004 6 862 816 6 796 004 6 858 521 6 852 051
outstanding shares
Number of total 6 907 628 6 907 628 6 907 628 6 907 628 6 907 628
issued shares at the
end
of period
Personnel on average 269 285 273 287 286
during the period
Personnel at the end 267 287 267 287 280
of 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
The general economic and market development and the employment rate have a
significant impact on the demand for workplace products and services. Global
inflation trends have an impact on Wulff's operations. The rate of increase in
prices accelerated during the comparison period and gradually broadened since
then. During the review period, the development of costs related to energy
commodities and logistics has moderated, as have the least processed products.
The development of global and local economies is affected by rising prices and
monetary policy decisions aimed at taming inflation. These also affect Wulff's
operations. In addition, megatrends in the global economy, for example
responsibility, digitalization, the sharing economy and the aging of the
population, affect the market change. The development of a product and service
selection in line with changing markets and needs involves both risks and
opportunities. Usual business risks include the successful implementation of
Wulff's strategy, for example the integration of operations related to a company
acquisition, as well as operational risks arising from the personnel, logistics
and IT environment. Tight competition in the workplace product and service
industry can affect business profitability. Changes in exchange rates affect the
group's net profit and balance sheet.
SUBSEQUENT EVENTS
The Group has not had any significant subsequent events.
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.
The development of the demographic structure is currently reducing the number of
people actively working, although at the same time working careers are getting
longer, e.g. as the average retirement age rises. The integration of technology
into products and services is an opportunity for Wulff. Digitization already
brings new ways for the multi-channel company to reach and serve customers and
increase the productivity of its own operations. The most significant of the
megatrends in terms of Wulff's operation and future is responsible operation and
the green transition: is the environment treated as a resource or is the goal to
improve the state of the environment. Future success will be strongly built on
these themes, and their importance will increase in the decision-making of
companies and consumers. Wulff has chosen responsibility and especially positive
climate actions, increasing equality and decent work and economic growth (UN
Sustainable Development Goals 2030) as important elements of his strategy.
The demand for products and services is essentially influenced by the general
development of the economy and the market, as well as the employment rate. The
market for workplace products and services has developed steadily in the Nordic
countries. Wulff estimates that the overall market for workplace products and
services remains relatively stable even when rapid changes occur in work
environments. The demand for hygiene, cleaning, and protective products seems to
have stabilized at a higher level than before the pandemic, as they are
perceived as important occupational health and safety products. Work performed
in multiple locations has increased and increased the number of workstations and
the demand for products needed at workstations. The demand for IT supplies,
printing products and traditional office supplies continues to develop post
-pandemic. This is affected by the return to jobs and the increased number of
new jobs. The group's turnover and operating profit are affected by the ongoing
recovery of the capacity of the international exhibition service industry from
the pandemic period.
The ongoing geopolitical crisis, Russia's attack on Ukraine and sanctions aimed
at Russia do not directly affect Wulff's operations, as Wulff has not had
operations or partnerships in countries involved in the crisis. The crisis has
had an impact on global supply chains, whose changes may still indirectly affect
Wulff's operations as well. The changes in the supply chains have intensified
and broadened the trend of price inflation. The availability challenges of many
product groups have subsided after the comparison period due to the
reorganization of global supply chains. As the inflation trend continues,
measures are needed to ensure a positive development of the sales margin. The
wide scope of price inflation and its effect on the costs of the services used,
as well as the related uncertainty, limit predictability.
As a result of the cooperation negotiations between Wulff Oy Ab and Wulff
Solutions Oy held in August-September 2021 in connection with the renewal of
Wulff's Finnish Contract Sales Organization, functions in sales, administration
and support functions were combined. As a result of the cooperation
negotiations, the company achieves annual cost savings of around 1.9 million
euros from personnel costs. In the same context, Wulff announced that it
believed in annual cost synergy benefits of a total of at least 3 million euros
that would be realized in stages, a significant part of which was expected to be
realized already in 2022. Wulff announced that it had achieved a total of
approximately 2.5 million euros in annual cost synergy benefits during the
financial year 2022 through reorganization measures, for example the integration
of information systems and logistics and operational processes and thanks to
changes in premises.
Thanks to the implemented reorganization measures, Wulff achieved a cost synergy
benefit of approximately EUR 0.4 million in January-June.
Wulff's goal is to grow profitably, and it is constantly ready to be a more
active player in business arrangements than its competitors.
Wulff estimates that net sales and comparable operating profit 2023 will
increase compared to 2022.
WULFF GROUP PLC'S FINANCIAL REPORTING
Wulff Group Plc will release the following financial report in 2023:
Interim Report, January-September 2023 Monday October 17, 2023
In Espoo on July 17, 2023
WULFF GROUP PLC
BOARD OF DIRECTORS
Further information:
CEO Elina Rahkonen
tel. +358 40 647 1444
e-mail: elina.rahkonen@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 make the workplace where you do
your work. Here you can find today's workplace products: e.g. cafe supplies,
real estate and cleaning maintenance products, office and IT supplies,
ergonomics, first aid, hygiene, protection and safety products, air purification
and innovative products for construction sites. Our selection also includes high
-quality Canon printing and document management services as well as financial
management services. Our customers also purchase international exhibition
services and solutions for remote meetings from us. It is important for us to
constantly develop our product range to be more and more sustainable and our
customer experience to be the best in the field. In addition to Finland, Wulff
Group operates in Sweden, Norway, and Denmark. Read more at
wulff.fi/en (https://www.wulff.fi/en/).