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2017-02-09

Rejlers: Year-end Report Rejlers AB January - December 2016

Rejlers strengthens its financial platform

Fourth quarter
» Sales increased by 15 per cent to SEK 673.7 million (586.7)
» Organic growth was 7 per cent, adjusted for exchange rate effects
» Operating profit was SEK 6.0 million (9.1), corresponding to an
operating margin of 0.9 per cent (1.6)

» Restructuring costs amounted to SEK 11.8 million (-)
» Operating profit adjusted for restructuring costs amounted to SEK
17.8 million (9.1), providing an adjusted operating margin of 2.6 per
cent (1.6)

» Profit after tax was SEK 0.0 million (5.2)
» Cash flow from operating activities totalled SEK 68.2 million (21.1)
» Earnings per share before and after dilution were SEK -0.03 (0.40)
» The Board of Directors proposes a rights issue of SEK 200 million.
An Extraordinary General Meeting is scheduled for 13 March 2017

January-December
» Sales increased by 25 per cent to SEK 2,341.4 million (1,875.5)
» Organic growth was 0 per cent, adjusted for exchange rate effects
» Operating profit amounted to SEK 27.5 million (71.0), corresponding
to an operating margin of 1.2 per cent (3.8)

» Restructuring costs amounted to SEK 21.5 million (-)
» Operating profit adjusted for restructuring costs amounted to SEK
49.0 million (71.0), providing an operating margin of 2.1 per cent
(3.8)

» Profit after tax was SEK 14.0 million (51.2)
» Cash flow from operating activities totalled SEK 41.2 million (42.5)
» Earnings per share before and after dilution were SEK 1.03 (4.15)
» The Board of Directors proposes that no dividend be paid
Comments from the President and CEO, Peter Rejler
The growth rate during the quarter reached 15 per cent and is mainly
attributable to acquisitions, which developed according to plan.
Organic sales growth, adjusted for currency, amounted to 7 per cent.
Operating profit amounted to SEK 6.0 million with a margin of 0.9 per
cent. The quarter's weak earnings trend is mainly related to
continued losses in the ICT and railway area in Norway and cut-backs
in the processing and nuclear power operations in Sweden as a result
of lower demand. The earnings trend is of course not satisfactory and
we have been working for some time on several initiatives to again
achieve our long-term margin target of 8 per cent over time.
Operating profit adjusted for restructuring costs increased to SEK
17.8 million (9.1) during the quarter, corresponding to an operating
margin of 2.6 per cent (1.6).

Greater efficiency
Since the summer, the coverage rate has increased and several of the
steps we have taken are gradually contributing to greater efficiency
and profitability. It is also pleasing that we recently renegotiated
an important ICT agreement in the Norwegian market, which will have a
significant effect on earnings in this business.

Successful acquisitions
Embriq and Orbion, which were both acquired at the end of 2015, have
been integrated well and are delivering according to plan.Through
Embriq, we can now supply services, solutions and systems for the
smart electrical grids of the future and handle and analyse large
amounts of data, which opens new business opportunities. As of
year-end, we have gathered our range of IT services and energy
services in the Rejlers Embriq segment. With Orbion as a base, we are
well positioned in the ICT area in every country in which we have a
presence and with good profitability in Sweden and Finland.

Strong demand in construction and energy
Our Construction and Property segment generally shows a good coverage
rate and is experiencing a positive trend in all countries in terms
of profitability. We see continued potential for growth in the energy
business where the industry is facing extensive investments in energy
efficiency improvements, power supplies and sustainable electricity
generation. In the Industry segment, general price pressure is a
contributing cause of our reduced profitability. During the year, we
adapted the business to prevailing market conditions, and are
continuously working to achieve the right efficiency.

In the Infrastructure segment, there has been a positive trend in
Sweden and Finland. Rejlers Sweden has recruited for continued
organic growth and, in Rejlers Finland, the acquisition of CMN Oy
complemented the offering in the railway area. Rejlers and the energy
and environmental specialist Entro entered a strategic partnership
for energy efficiency improvements in the construction, industrial
and infrastructure area. The collaborative agreement strengthens both
of the companies' positions as energy and environmental consultants
in Norway, Sweden and Finland.

New share issue for operational and financial flexibility
The on-going transformation of the Group's operations through
efficiency enhancements, overhauls of unprofitable areas and greater
focus on the digitisation of processes and IT solutions is
continuously showing a higher order volume. We follow an overall
strategy and have the intention of further intensifying this
transition to secure and strengthen our market position. We continue
to expand in the Nordic region, as well as pursue selective strategic
acquisitions. As a result of this and with the aim of strengthening
the company's financial position and increasing operating
flexibility, the Board proposes a rights issue comprising
approximately SEK 200 million for existing shareholders.

Rejlers' dividend-policy, that around 50 per cent of the company's
profit after tax should be distributed as dividend, remains
unchanged. However, in view of the fact that the company is
conducting a rights issue, the Board is proposing to the Annual
General Meeting that no dividend be paid for the financial year. Our
long-term goal to improve the operating margin to 8 per cent over
time stands fast, as does achieving the growth target of
2020-3030-4040 by focusing on selected areas and on becoming more
efficient and more profitable.

For further information, please contact:
Peter Rejler, President and CEO, tel. +46 (0)70 602 34 24, e-mail:
peter.rejler@rejlers.se

Mats Åström, CFO, tel. +46 (0)72 050 22 40, e-mail:
mats.astrom@rejlers.se

Rejlers is one of the largest engineering consultancy firms in the
Nordic region. Our 2,000 experts work with projects in the areas of
construction and property, energy, industry and infrastructure. At
Rejlers, you will meet specialist engineers with the knowledge,
cutting edge expertise and energy to achieve results. We are still
experiencing rapid growth and can now be found in 80 locations in
Sweden, Finland and Norway. Rejlers had sales of SEK 2.3 billion in
2016 and its class B share is listed on Nasdaq Stockholm.

The information in this interim report is such that Rejlers AB (publ)
is obliged to publish under the EU Market Abuse Directive and the
Swedish Securities Market Act. The information was submitted through
the care of the contact person above for publication on 9 February
2017 at 8:00 a.m. CET. This report is also available in Swedish. The
English version is a translation of the Swedish original. If there
are any differences, the Swedish version takes precedence.

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http://mb.cision.com/Main/6235/2184010/625900.pdf

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