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2021-10-25

Wulff-Yhtiöt Oyj: Wulff Group Plc's Interim Report for January 1 - September 30, 2021

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 strateg...

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