Quarterly Report • Oct 25, 2016
Quarterly Report
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Rejlers is one of the largest engineering consultancy firms in the Nordic region. Our 2,000 experts work with projects in the areas of Building 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 recorded revenue of SEK 1.9 billion in 2015 and its class B share is listed on Nasdaq Stockholm.
25 October 2016
Development during the third quarter was poorer than anticipated in Rejlers Sweden and Rejlers Norway. The operating profit of SEK 4.9 million has been adversely affected bya billable hours ratio that is clearly lower than in the previous year. The holiday period, July and August, was significantly worse than expected. We did note some recovery in September.
The reorganisation of the business through streamlining, phasing out unprofitable areas and increasing the focus on the digitalisation of processes and IT solutions has not yet produced the desired effect.
We have therefore initiated a further package of measures encompassing more sales activities, cost savings and improved monitoring of the business. We have also increased our focus on ensuring good employee utilisation and a good cash flow throughout the business.
Growth has remained good, with an increase in sales in the Group of 32 percent, of which 2 percentage points of the growth is organic. The acquisitions of Embriq in Norway and Orbion Consulting in Sweden have been well integrated into the business and have added new skills in the areas of IT solutions and ICT. Both of these acquisitions are contributing positively to the operating margin.
The market and demand for our services are generally good in Sweden and Norway, except within parts of the industrial segment in Sweden, where demand for nuclear power expertise has declined significantly. In Finland, we are delivering good results despite a difficult market. During the quarter, we have entered into major agreements with e.g. Serneke, Svenska Kraftnät, JM Norge, the Swedish Transport Administration and Lindbäcks Bygg.
In parallel with the package of measures, we are working with the digitalisation of the business and of our assignments. We are anticipating considerable growth in markets such as energy, the retail sector and transport. We are therefore now investing strategicallyin the digitalisation of infrastructure and smart handling of large volumes of data. At the same time as gathering all our expertise in the fields of IT and energy metering services under Rejlers Embriq, with a joint Nordic management, we are also launching Connected Stores, a new concept comprising IT solutions for the retail trade.
Our objective remains the same. We aim to improve the operating margin to 8 percent over time and to achieve our growth objective of 2020-3030-4040. Our focus is on becoming more efficient and more profitable.
Peter Rejler, CEO and Group President, tel.: +46 (0)70-602 34 24, e-mail: [email protected] Mats Åström, CFO, tel.: +46 (0)72-050 22 40, e-mail: [email protected]
| Sales, SEK million | Operating profit, SEK million | Operating margin, % | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jul | Jul | Jan | Jan | Full | Jul | Jul | Jan | Jan | Full | Jul | Jul | Jan | Jan | Full | |
| Sep | Sep | Sep | Sep | year | Sep | Sep | Sep | Sep | year | Sep | Sep | Sep | Sep | year | |
| 2016 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2016 | 2015 | 2015 | |
| Rejlers Sweden | 252.9 | 233.9 | 892.0 | 777.8 | 1,099.0 | 2.1 | 14.1 | 18.5 | 44.2 | 51.4 | 0.8 | 6.0 | 2.1 | 5.7 | 4.7 |
| Rejlers Finland | 85.4 | 70.5 | 274.5 | 240.1 | 336.4 | 5.4 | 2.0 | 8.8 | 11.3 | 18.9 | 6.3 | 2.8 | 3.2 | 4.7 | 5.6 |
| Rejlers Norway | 74.8 | 64.2 | 247.5 | 225.3 | 298.5 | -1.5 | 4.5 | -7.2 | 5.0 | 3.5 | -2.0 | 7.0 | -2.9 | 2.2 | 1.2 |
| IT Solutions | 99.1 | 14.8 | 272.8 | 51.1 | 151.3 | 2.1 | 1.2 | 12.9 | 7.6 | 9.3 | 2.1 | 8.1 | 4.7 | 14.9 | 6.1 |
| Group-wide | 5.9 | 4.2 | 17.1 | 18.9 | 27.1 | -3.2 | -2.9 | -11.5 | -6.2 | -12.1 | - | - | - | - | - |
| Eliminations | -17.8 | -7.5 | -36.2 | -24.4 | -36.8 | - | - | - | - | - | - | - | - | - | - |
| Consolidated total | 500.3 | 380.1 | 1,667.7 | 1,288.8 | 1,875.5 | 4.9 | 18.9 | 21.5 | 61.9 | 71.0 | 1.0 | 5.0 | 1.3 | 4.8 | 3.8 |
Sales amounted to SEK 500.3 million (380.1), which represents an increase of 32 percent compared to the same period in the previous year. 2 percentage points of the growth is organic and 30 percentage points is through acquisition.
Operating profit for the third quarter amounted to SEK 4.9 million (18.9). The third quarter of the year had as many working days as the same period last year in Sweden, Finland and Norway. The weak results from the third quarter are due to reduced employee utilisation in the operations in Sweden and Norway compared to last year. In Norway, there have also been efficiency problems in ICT assignments. The billable hours ratio was 71.6 percent (74.8).
Sales amounted to SEK 1,667.7 million (1,288.8), which represents an increase of 29 percent compared to the same period in the previous year. Growth was entirely through acquisition.
Operating profit for the nine-month period amounted to SEK 21.5 million (61.9). To date this year, the restructuring costs for Sweden have amounted to SEK 9.7 million. Major start-up costs for projects in Norway and weak employee utilisation have had an adverse effect on operating profit. However, the calendar effect has had a positive impact on operating profit. The first nine months of the year had one more working day in Sweden and Norway and two more working days in Finland, compared with the previous year.
The billable hours ratio was 72.4 percent (75.0).
Cash flow from operating activities totalled SEK -27.0 million (21.4) for the nine-month period and SEK -24.4 million (-23.3) for the quarter. Consolidated cash and cash equivalents at the end of the quarter amounted to SEK 45.2 million compared to SEK 108.8 million on 31 December 2015. The change in cash and cash equivalents during the year has been affected by a dividend of SEK 25.8 million (24.6), investments in fixed assets totalling SEK 31.5 million (6.4) as well as new loans of SEK 55.5 million (-) and repayments of SEK 42.0 million (32.3).
Interest bearing liabilities increased from SEK 14.7 million from 31 December 2015 to SEK 295.4 million at the end of the period. Net indebtedness amounted to SEK 278.1 million compared to SEK 196.9 million as of 31 December 2015. The equity/assets ratio at the end of the period amounted to 40.5 percent compared to 41.7 percent as of 31 December 2015. Equity per share was SEK 41.44 at the end of the period compared to SEK 39.97 as of 31 December 2015. SEK 0.0 million (17.2) of the Group's overdraft facilities of SEK 50 million (50) has been used.
Revenue per quarter and rolling 12 months
Investments in property, plant and equipment during the nine-month period amounted to SEK 6.7 million (5.5) and investments in intangible assets totalled SEK 24.8 million (0.6). Investments in subsidiaries and operations amounted to SEK 0.2 million (13.8). Further information about investments in subsidiaries and operations is available on page 12. Depreciation and impairment charges amounted to SEK 31.2 million (20.2).
The number of employees at the end of the period totalled 2,001
(1,800). The number of full-year employees totalled 1,903 (1,730).
A total of 23 employees (9) in Finland and none (1) in Norway were laid off at the end of the period.
Net sales in the parent company during the period amounted to SEK 17.1 million (18.9)and earnings before tax totalled SEK -8.2 million (-6.7).
Number of employees at the end of the quarter
Further measures aimed at improving profitability in Rejlers Sweden were conducted during October. These measures entail cutbacks within unprofitable operations. Approximately 25 employees in Västerås in the Technology business area are being made redundant. This is a result of a significant decline in the demand for services within nuclear power production. The cost of these measures is expected to amount to approximately SEK 10 million, which will affect results in the fourth quarter.
Rejlers is making a strategicinvestment to utilise the potential that exists in the digitalisation of infrastructure and the smart management of large volumes of data. For this reason, we are now conducting an operational, marketoriented consolidation of the companies included within Rejlers IT Solutions, which in future will be assembled under the name Rejlers Embriq.
Rejlers Sweden has offices in around 40 locations. Our range of services includes areas such as automation, electrical power, installation, railways, mechanical engineering, processes and installations, as well as telecommunications. Segment Sweden accounts for around 53 percent of Rejlers' total sales.
Rejlers Sweden increased sales during the third quarter by 8 percent to SEK 252.9 million (233.9). 13 percent of the growth is acquired. The organic growth is 5 percent negative. The operating profit for the quarter amounted to SEK 2.1 million (14.1), which represents an operating margin of 0.8 percent (6.0). The profit has been affected by lower employee utilisation compared to the corresponding period in 2015. The postponement of three large construction projects has also had a negative impact on profit. The quarter contained the same number of working days as in the previous year.
The action programme in Sweden is being intensified and entails that we are continuing to phase out unprofitable areas and implement cost savings.
In order to improve profitability in Rejlers Sweden, cutbacks were conducted during October within the Technology business area in Västerås. Approximately 25 employees are being made redundant. This is a result of a significant decline in the demand for services within nuclear power production.
Within Rejlers Sweden, a reorganisation of the business is being conducted in which we are reducing the industrial segment and expanding within community building, energy, infrastructure and IT.
The market and demand for our services are generally good, apart from within parts of the industrial segment.
Rejlers' services are contributing to the digitalisation of the energy sector, which is leading to energy production and usage becoming more efficient and hence sustainable.
In order to meet demand within the energy sector, Rejlers launched a power management group specialising in backbone networks during the quarter, as well as forming a new area of expertise for solar cell technology.
ICT operations are growing and there is a great need for ICT engineers, especially in information and IT security.
Rejlers is currently involved in a number of major assignments for the Swedish Transport Administration, such as the evaluation of high speed railways. Investments in large construction projects have increased greatly.
| Key figures – | Rejlers Sweden | |
|---|---|---|
| --------------- | -- | ---------------- |
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Full year | |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Sales, SEK million | 252.9 | 233.9 | 892.0 | 777.8 | 1,099.0 |
| Operating profit, SEK million | 2.1 | 14.1 | 18.5 | 44.2 | 51.4 |
| Operating margin, % | 0.8 | 6.0 | 2.1 | 5.7 | 4.7 |
| Number of employees | 1,089 | 1,022 | 1,089 | 1,022 | 1,173 |
Rejlers operates at 18 locations in Finland. Rejlers in Finland offers consultancy services within architecture, automation, energy, mechanical engineering, environmental technology, water and sewerage, as well as turnkey deliveries to customers in the construction and buildings, energy, industry and infrastructure sectors. Segment Finland accounts for 16 percent of Rejlers' total sales.
Rejlers Finland increased sales during the third quarter by 21 percent to SEK 85.4 million (70.5). 9 percentage points of the growth is organic and 12 percentage points is through acquisition. The growth amounted to 13 percent, adjusted for exchange rate effects. The operating profit for the quarter amounted to SEK 5.4 million (2.0), which represents an operating margin of 6.3 percent (2.8). The quarter contained the same number of working days as in the previous year.
The efficiency programme, which was initiated in the first quarter, has had an effect on profitability. In Finland, we are delivering good results despite a difficult industrial market. During the quarter major industrial customers have started ordering an increasing number of assignments from Rejlers.
In order to further improve profitability, the industrial operation has launched new measures in the form of a more efficient organisation and an improved customer structure. For example, a new CRM system has been implemented. Rejlers Finland has adapted its services according to market conditions, and is now also offering services in production efficiency, process design, security and digitising processes.
Rejlers is noting increased demand for services in energy production and energy management. We are packaging our services in order to facilitate sales in the energy sector. Demand for Rejlers' energy metering services and IT solutions for power grids is good.
Significant investments within infrastructure are planned in Finland, particularly within the transport sector. CMN Service Oy was acquired in October, with its 17 employees. This acquisition is supplying new expertise within superstructures as well a bridge and tunnel constructions for railways, thereby completing Rejlers' offer within the railway sector.
Rejlers assignments in network planning and network design for both fixed and mobile networks cover the entire Nordic region. Several of our ICTcustomers are demanding outsourcing contracts.
The building market continues to develop strongly and major building projects aimed at urban extension have begun. Rejlers has won several new assignments in Helsinki, Tampere and Turku.
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Full year | |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Sales, SEK million | 85.4 | 70.5 | 274.5 | 240.1 | 336.4 |
| Operating profit, SEK million | 5.4 | 2.0 | 8.8 | 11.3 | 18.9 |
| Operating margin, % | 6.3 | 2.8 | 3.2 | 4.7 | 5.6 |
| Number of employees | 497 | 502 | 497 | 502 | 482 |
In Norway, Rejlers offers expertise in the areas of electrical power, electrical safety, energy certification, installation, railways and telecommunications. There are operations at 10 locations in the country. Rejlers Norway accounts for around 15 percent of Rejlers' total sales.
In Rejlers Norway, sales during the quarter increased by 17 percent to SEK 74.8 million (64.2) The entire growth is organic. Sales increased by 16 percent, adjusted for currency effects. Norway is reporting a profit in the third quarter of SEK -1.5 million (4.5). The decline in profits is mainly due to poorer employee utilisation and efficiency problems in telecom assignments. The quarter contained the same number of working days as in the previous year.
Rejlers Norway is continuing to streamline the organisation and is making further cost savings, so as to improve profitability. These measures include organisational changes and new monitoring tools.
The market and demand for our services are generally good in Norway. Rejlers is in a development phase for services relating to digitalisation of processes for the infrastructure, energy and construction markets. Rejlers is actively participating in the development of the existing communications network and we have digitalised processes for electrical safety inspections.
Rejlers has recruited a new head of the ICT division and has implemented a new capacity planning tool. During the quarter, we had efficiency problems with subcontractors in some major ICTassignments.
ROC (Rejlers Operation Center for telecommunications) enables us, as the only company in Norway, to monitor operations and maintenance of communications networks for several customers at the same time from one operations centre in Trondheim.
The most important markets for Rejlers are energy, transport, railways and ICT, which are growing and undergoing comprehensive modernisation of technology and infrastructure.
The demand for Rejlers'services is increasing in the construction and property segment, and for assignments that aim to achieve more efficient and more sustainable energy use in properties and municipalities. A new concept, Engineer on demand, has been launched in Norway and covers all the divisions.
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Full year | |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Sales, SEK million | 74.8 | 64.2 | 247.5 | 225.3 | 298.5 |
| Operating profit, SEK million | -1.5 | 4.5 | -7.2 | 5.0 | 3.5 |
| Operating margin, % | -2.0 | 7.0 | -2.9 | 2.2 | 1.2 |
| Number of employees | 249 | 231 | 249 | 231 | 239 |
Rejlers IT Solutions segment offers IT services and products in the energy and infrastructure sectors. IT Solutions is also home to conventional IT services, cloud services and an advanced, modern centre for running customer IT environments. There are operations at 10 locations in Norway, Sweden and Finland. IT Solutions accounts foraround 16 percent of Rejlers' total sales.
The IT Solutions base is made up of operations in Rejlers Embriq, which designs, develops and manages IT solutions.
As from 1 January 2017, Rejlers Energitjänster, Rejlers Com IT and Rejlers Embriq will be gathered under Rejlers Embriq with a shared Nordic management. This will provide a wider-ranging, more complete range of services within IT and energy metering that is offered in all the Nordic countries.
Rejlers is now investing strategicallyin the digitalisation of infrastructure and smart handling of large volumes of data.
The digitalisation of physical infrastructure is an ongoing mega-trend. Smart electricity networks are being rolled out on a large scale. With smart electricity networks, you can manage a network digitally, control it and at the same time save resources.
Rejlers Embriq is anticipating significant growth in markets such as energy, the retail sector and transport. During the quarter we launched a new concept, Connected Stores, offering IT solutions to the retail sector.
From an operational perspective, the business has been characterised by a series of smart metering projects in the
energy sector during the third quarter, as well as by the implementation of advanced digital solutions. Rejlers Embriq has commenced the implementation of IT services for Elkjøp's operations in Norway, Sweden, Finland and Denmark. The agreement was entered into in April with L&T Infotech, which is the main contractor.
With strong growth on top of a large existing market share in Norway, Rejlers Embriq has a good basis for further development in the Nordic countries. Existing service platforms that support future needs for digitalisation, in combination with knowledge of the area, form the basis for such an expansion.
The market for energy metering services is expected to grow over the coming years, as many of the remote reading meters in the Nordic countries are replaced. The planned development of a central Swedish Elhub over the next few years is very positive for Rejlers' initiatives in this sector.
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Full year | |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Sales, SEK million | 99.1 | 14.8 | 272.8 | 51.1 | 151.3 |
| Operating profit, SEK million | 2.1 | 1.2 | 12.9 | 7.6 | 9.3 |
| Operating margin, % | 2.1 | 8.1 | 4.7 | 14.9 | 6.1 |
| Number of employees | 155 | 36 | 155 | 36 | 179 |
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Full year |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Net sales | 500.3 | 380.1 | 1,667.7 | 1,288.8 | 1,875.5 |
| Personnel expenses | -307.5 | -260.1 | -1,061.5 | -898.8 | -1,280.1 |
| Other external expenses | -177.2 | -95.5 | -553.7 | -308.4 | -493.1 |
| Depreciation and impairment | -10.8 | -5.7 | -31.2 | -20.2 | -32.2 |
| Shares in associated companies | 0.1 | 0.1 | 0.2 | 0.5 | 0.8 |
| Operating profit | 4.9 | 18.9 | 21.5 | 61.9 | 71.0 |
| Net financial income/expense | -4.9 | 0.6 | -2.7 | -0.3 | 0.8 |
| Profit after net financial income/expense | 0.0 | 19.5 | 18.8 | 61.6 | 71.8 |
| Tax | 1.1 | -5.6 | -4.8 | -15.6 | -20.6 |
| Profit for the period | 1.1 | 13.9 | 14.0 | 46.0 | 51.2 |
| Attributed to: | |||||
| Parent Company's shareholders | 1.5 | 13.9 | 13.6 | 46.0 | 51.2 |
| Shareholders without a controlling influence | -0.4 | 0.0 | 0.4 | 0.0 | -0.1 |
| Average number of shares | 12,921,721 | 12,321,721 | 12,921,321 | 12,321,721 | 12,346,379 |
| Earnings per share before and after dilution, SEK | 0.12 | 1.12 | 1.06 | 3.73 | 3.96 |
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Full year |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Profit for the period | 1.1 | 13.9 | 14.0 | 46.0 | 51.2 |
| Items that may be reclassified to the income statement: | |||||
| Translation differences of foreign operations, net after tax | 15.5 | -3.9 | 31.3 | -8.8 | -22.4 |
| Items that will not be reclassified to the income statement | |||||
| Revaluation of net pension liability | - | - | 12.1 | ||
| Total other comprehensive income | 15.5 | -3.9 | 31.3 | -8.8 | -10.3 |
| Comprehensive income for the period | 16.6 | 10.0 | 45.3 | 37.2 | 40.9 |
| SEK million | 30 Sep | 30 Sep | 31 Dec |
|---|---|---|---|
| 2016 | 2015 | 2015 | |
| Assets | |||
| Non-current assets | |||
| Goodwill | 407.3 | 271.1 | 395.4 |
| Other intangible assets | 112.8 | 55.4 | 99.8 |
| Tangible assets | 36.9 | 33.0 | 36.2 |
| Other non-current assets | 53.6 | 21.8 | 48.7 |
| Total non-current assets | 610.6 | 381.3 | 580.1 |
| Current assets | |||
| Current receivables | 689.3 | 487.2 | 569.0 |
| Cash and cash equivalents | 45.2 | 29.5 | 108.8 |
| Total current assets | 734.5 | 516.7 | 677.8 |
| Total Assets | 1,345.1 | 898.0 | 1,257.9 |
| Equity and liabilities | |||
| Equity attributable to shareholdersin the parent company | 535.5 | 454.1 | 516.5 |
| Holdings without a controlling influence | 8.8 | 0.1 | 8.3 |
| Total equity | 544.3 | 454.2 | 524.8 |
| Non-current liabilities | |||
| Provision for pensions | 27.9 | 40.0 | 25.0 |
| Other non-current liabilities | 213.6 | 82.5 | 232.9 |
| Total non-current liabilities | 241.5 | 122.5 | 257.9 |
| Current liabilities | 559.3 | 321.3 | 475,2 |
| Total liabilities and equity | 1,345.1 | 898.0 | 1,257.9 |
| Of which interest-bearing liabilities | 295.4 | 76.7 | 280.7 |
| Contingent liabilities | 151.8 | 214.0 | 211.3 |
| SEK million | 30 Sep | 30 Sep | 31 Dec |
|---|---|---|---|
| 2016 | 2015 | 2015 | |
| Equity at start of period | 524.8 | 441.6 | 441.6 |
| Comprehensive income for the period | 45.3 | 37.2 | 40.9 |
| Acquisition of holdings without a controlling influence | - | - | -0.4 |
| The minority's share of acquired companies | - | - | 8.3 |
| Changes attributable to transactions with the owners | |||
| New share issue | - | - | 59.0 |
| Dividends | -25.8 | -24.6 | -24.6 |
| Total changes attributable to transactions with the owners | -25.8 | -24.6 | 34.5 |
| Equity at end of period | 544.3 | 454.2 | 524.8 |
| Attributed to: | |||
| Parent Company's shareholders | 535.5 | 454.1 | 516.5 |
| Holdings without a controlling influence | 8.8 | 0.1 | 8.3 |
| SEK million | 30 Sep | 30 Sep | 31 Dec |
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Full year |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Cash flow from operating activities before change in operating | |||||
| capital and tax paid | 21.0 | 18.5. | 58.3 | 68.4 | 83.0 |
| Tax paid | -11.5 | -8.0 | -36.7 | -17.9 | -9.6 |
| Change in working capital | -33.9 | -33.8 | -48.6 | -29.1 | -30.9 |
| Cash flow from operating activities | -24.4 | -23.3 | -27.0 | 21.4 | 42.5 |
| Cash flow from investment activities | -8.8 | -14.7 | -30.8 | -21.8 | -240.2 |
| Cash flow from financing activities | 39.5 | -13.0 | -12.7 | -57.0 | 221.9 |
| Cash flow for the period | 6.3 | -51.0 | -70.5 | -57.4 | 24.2 |
| Cash and cash equivalents at beginning of the period | 35.5 | 83.5 | 108.8 | 89.8 | 89.8 |
| Exchange rate differences in cash and cash equivalents | 3.4 | -3.0 | 6.9 | -2.9 | -5.2 |
| Cash and cash equivalents at end of the period | 45.2 | 29.5 | 45.2 | 29.5 | 108.8 |
| SEK million | 30 Sep | 30 Sep | 31 Dec |
|---|---|---|---|
| 2016 | 2015 | 2015 | |
| Loans and credit | 295.4 | 76.7 | 280.7 |
| Pension provisions | 27.9 | 40.0 | 25.0 |
| Cash and cash equivalents | -45.2 | -29.5 | -108.8 |
| Total | 278.1 | 87.2 | 196.9 |
On 1 January, Rejlers acquired the assets in Insplacon Oy. On 1 May, all shares in JS-Verkot Oy were acquired.
So far this year, the acquisitions have contributed SEK 6.5 million to sales and SEK 0.8 million to operating profit. If the companies and operations had been owned since 1 January they would have contributed sales of SEK 10.3 million and operating profit of SEK 1.0 million.
| SEK million | Jan-Sep | |
|---|---|---|
| Total | ||
| Non-current assets | 0.4 | |
| Current assets | 1.2 | |
| Cash and cash equivalents | 3.0 | |
| Non-current liabilities | - | |
| Other current liabilities | -1.9 | |
| Net identifiable assets and liabilities | 2.7 | |
| Goodwill | 0.4 | |
| Customer values | 0.2 | |
| Deferred tax on intangible assets | -0.0 | |
| Purchase price, cash | 3.2 | |
| Less: | ||
| Cash and cash equivalents in acquired companies | -3.0 | |
| Unadjusted purchase price previously paid | 1.0 | |
| Net cash outflow during the period | 1.2 |
Acquisition analyses for the acquired operations are preliminary because the assets have not been fully analysed. The goodwill value, which is not tax-deductible, includes the technical skills of staff, acquired customer relationships that are not separable and synergies. Otherwise, the fair value of the assets and liabilities at the time of acquisition corresponds to the carrying amount in the acquired companies. There are no uncertain receivables among the acquired assets. Acquisition-related costs were expensed as other external expenses when they were incurred.
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Full year |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| IFRS key figures | |||||
| Earnings per share, SEK | 0.12 | 1.12 | 1.06 | 3.73 | 4.15 |
| Average number of shares | 12,921 ,721 | 12,321,721 | 12,921 ,721 | 12,321,721 | 12,346,379 |
| Alternative key figures | |||||
| Operating margin, % | 1.0 | 5.0 | 1.3 | 4.8 | 3.8 |
| Billable hours ratio, % | 71.6 | 74.8 | 72.4 | 75.0 | 75.0 |
| Sales per full-time employee, SEK thousand | 261 | 219 | 876 | 745 | 1,046 |
| Operating income per full-time employee, SEK thousand | 3 | 11 | 11 | 36 | 40 |
| Equity/assets ratio, % | 40.5 | 50.6 | 40.5 | 50.6 | 41.7 |
| Equity per share at the end of the period | 41.44 | 36.85 | 41.44 | 36.85 | 40.0 |
| Net indebtedness, SEK million | 278.2 | 87.2 | 278.2 | 87.2 | 196.9 |
| Net liabilities/adjusted EBITDA rolling 12, times 1) | 3.8 | 0.7 | 3.8 | 0.7 | 1.9 |
| Number of shares at the end of the period | 12,921 ,721 | 12,321,721 | 12,921 ,721 | 12,321 ,721 | 12,921,721 |
| Operational key figures | |||||
| Number of working days | 66 | 66 | 187 | 186 | 249 |
| Number of full-time employees | 1,920 | 1,733 | 1,903 | 1,730 | 1,793 |
| Number of employees at the end of the period | 2,001 | 1,800 | 2,001 | 1,800 | 2,082 |
Definitions for key figures may be found in the company's latest annual report and on page 15.
1) During the quarter, the company has renegotiated financial terms for net indebtedness in relation to EBITDA.
| SEK million | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2014 | 2014 | 2014 | 2014 | 2015 | 2015 | 2015 | 2015 | 2015 | 2016 | 2016 | 2016 | |
| Sales | |||||||||||||
| Sweden | 278.5 | 277.3 | 217.8 | 285.8 | 1,059.4 | 267.2 | 276.7 | 233.9 | 321.2 | 1,099.0 | 309.2 | 329.9 | 252.9 |
| Finland | 68.8 | 80.3 | 64.7 | 79.4 | 293.2 | 83.5 | 86.1 | 70.5 | 96.3 | 336.4 | 91.6 | 97.5 | 85.4 |
| Norway | 75.4 | 73.0 | 69.7 | 87.4 | 305.5 | 81.0 | 80.1 | 64.2 | 73.2 | 298.5 | 73.6 | 99.1 | 74.8 |
| IT Solutions | 18.0 | 17.0 | 17.4 | 18.4 | 70.8 | 19.9 | 16.4 | 14.8 | 100.2 | 151.3 | 87.8 | 85.9 | 99.1 |
| Group-wide etc. | -1.8 | -5.6 | -3.1 | -6.9 | -17.4 | 0.6 | -2.8 | -3.3 | -4.2 | -9.7 | -3.0 | -4.2 | -11.9 |
| Total | 438.9 | 442.0 | 366.5 | 464.1 | 1,711.5 | 452.2 | 456.5 | 380.1 | 586.7 | 1,875.5 | 559.2 | 608.2 | 500.3 |
| Operating profit | |||||||||||||
| Sweden | 24.8 | 7.6 | 5.8 | 21.7 | 59.9 | 14.5 | 15.6 | 14.1 | 7.2 | 51.4 | -1.4 | 17.8 | 2.1 |
| Finland | 0.3 | 3.1 | 4.6 | 6.2 | 14.2 | 4.6 | 4.7 | 2.0 | 7.6 | 18.9 | 0.3 | 3.1 | 5.4 |
| Norway | -3.8 | -11.9 | -12.6 | 2.7 | -25.6 | 0.3 | 0.2 | 4.5 | -1.5 | 3.5 | -7.8 | 2.1 | -1.5 |
| IT Solutions | 3.6 | 2.6 | 5.8 | 3.3 | 15.3 | 4.2 | 2.2 | 1.2 | 1.7 | 9.3 | 5.8 | 5.0 | 2.1 |
| Group-wide etc. | -11.5 | -1.2 | -1.1 | -0.6 | -15.2 | -0.7 | -2.5 | -2.7 | -3.7 | -12.1 | -2.9 | -5.4 | -3.2 |
| Total | 13.4 | 0.2 | 2.5 | 32.5 | 48.6 | 22.9 | 20.1 | 18.9 | 9.1 | 71.0 | -6.0 | 22.6 | 4.9 |
| Operating margin | |||||||||||||
| Sweden | 8.9 | 2.7 | 2.7 | 7.6 | 5.7 | 5.4 | 5.6 | 6.0 | 2.2 | 4.7 | -0.5 | 5.4 | 0.8 |
| Finland | 0.4 | 3.9 | 7.1 | 7.8 | 4.8 | 5.5 | 5.5 | 2.8 | 7.9 | 5.6 | 0.3 | 3.2 | 6.3 |
| Norway | -5.0 | -16.3 | -18.1 | 3.1 | -8.4 | 0.4 | 0.2 | 7.0 | -2.0 | 1.2 | -10.6 | 2.1 | -2.0 |
| IT Solutions | 20.0 | 15.3 | 33.3 | 17.9 | 21.6 | 21.1 | 13.4 | 8.1 | 1.7 | 6.1 | 6.6 | 5.8 | 2.1 |
| Group-wide etc. | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Total | 3.1 | 0.0 | 0.7 | 7.0 | 2.8 | 5.1 | 4.4 | 5.0 | 1.6 | 3.8 | -1.1 | 3.7 | 1.0 |
| Number of employees | |||||||||||||
| Sweden | 1,020 | 1,011 | 997 | 998 | 998 | 1,016 | 1,018 | 1,022 | 1,173 | 1,173 | 1,163 | 1,082 | 1,089 |
| Finland | 452 | 447 | 431 | 434 | 434 | 447 | 464 | 482 | 482 | 482 | 500 | 501 | 497 |
| Norway | 239 | 236 | 241 | 247 | 247 | 236 | 230 | 231 | 239 | 239 | 249 | 240 | 249 |
| IT Solutions | 55 | 55 | 53 | 55 | 55 | 57 | 57 | 56 | 179 | 179 | 155 | 147 | 155 |
| Group-wide etc. | 12 | 11 | 11 | 8 | 8 | 8 | 9 | 9 | 9 | 9 | 10 | 10 | 11 |
| Total | 1,778 | 1,760 | 1,733 | 1,742 | 1,742 | 1,764 | 1,778 | 1,800 | 2,082 | 2,082 | 2,077 | 1,980 | 2,001 |
| SEK million | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Full year |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Sales | 5.9 | 6.2 | 17.1 | 18.9 | 25.1 |
| Personnel expenses | -3.5 | -3.9 | -11.0 | -11.9 | -15.5 |
| Other external expenses | -5.1 | -4.9 | -15.9 | -14.0 | -19.9 |
| Depreciation | -0.1 | -0.3 | -0.6 | -0.8 | -1.1 |
| Operating profit | -2.8 | -2.9 | -10.4 | -7.8 | -11.4 |
| Net financial income/expense | -1.1 | 1.9 | 2.2 | 1.1 | 39.7 |
| Profit after net financial income/expense | -3.9 | -1.0 | -8.2 | -6.7 | 28.3 |
| Appropriations | - | - | - | - | 0.1 |
| Tax | - | - | - | - | -5.6 |
| Profit after tax | -3.9 | -1.0 | -8.2 | -6.7 | 22.8 |
The parent company has no items to report in other comprehensive income so this financial report is not included.
| SEK million | 30 Sep | 30 Sep | 31 Dec |
|---|---|---|---|
| 2016 | 2015 | 2015 | |
| Assets | |||
| Non-current assets | |||
| Intangible assets | - | 0.6 | 0.4 |
| Tangible assets | 0.4 | 0.7 | 0.6 |
| Financial assets | 402.4 | 303.7 | 396.0 |
| Total non-current assets | 402.8 | 305.0 | 397.0 |
| Current assets | |||
| Current receivables | 150.4 | 8.6 | 197.3 |
| Cash and cash equivalents | 22.7 | - | 36.5 |
| Total current assets | 173.1 | 8.6 | 233.8 |
| Total Assets | 575.9 | 313.6 | 630.8 |
| Equity and liabilities | |||
| Equity | 215.1 | 160.5 | 249.1 |
| Untaxed reserves | 30.8 | 30.9 | 30.8 |
| Non-current liabilities | 157.0 | 17.4 | 172.8 |
| Current liabilities | 173.0 | 104.8 | 178.1 |
| Total liabilities and equity | 575.9 | 313.6 | 630.8 |
The closing price for Rejlers' Class B shares on 30 September 2016 was SEK 92 per share, a reduction of 19 percent compared to 30 December 2015. On 24 October 2016, the closing price for Rejlers' Class B shares was SEK 94.25 per share. The Rejlers share is listed on Nasdaq Stockholm.
This interim report has been prepared for the Group in accordance with IAS 34 Interim Reporting and RFR 1, Supplementary Accounting Rules for Groups. The same accounting policies have been applied as in the most recent annual report for both the Group and the parent company. A number of changes in the standards have come into effect in 2016. None of these has a significant influence on the Group's accounts and reporting.
The parent company's reports are prepared in accordance with the Annual Accounts Act (ÅRL) and RFR 2, Accounting for Legal Entities.
Please refer to the Annual Accounts for 2015 for detailed information regarding the significant risks, uncertainties and accounting policies of the company.
ESMA's guidelines for Alternative Performance Measurements are applied with effect from the previous interim report.
The year-end report for 2015 incorrectly stated a figure for earnings per share after dilution that deviated from earnings per share before dilution. Rejlers had no dilution effects during these periods, which is why there must not be any difference between earnings per share before and after dilution. Executed corrections are set out below.
| Fourth quarter | Previously | Recount | Recalcu |
|---|---|---|---|
| 2015 | reported | lated | |
| Earnings per share after dilution |
0,40 | 0,02 | 0,42 |
| January-December | Previously | Recount | Recalcu |
|---|---|---|---|
| 2015 | reported | lated | |
| Earnings per share after dilution |
3,96 | 0,19 | 4,15 |
| Year-end report 2016 | 9 February 2017 |
|---|---|
| Annual General Meeting | 24 April 2017 |
| Interim report January-March 2017 | 9 May 2017 |
| Interim report January-June 2017 | 19 July 2017 |
| Interim report January-September 2017 | 25 October 2017 |
The company presents certain financial measurements in the interim reports that are not defined according to IFRS. The company considers that these measurements provide valuable supplementary information for investors and company management, since they permit an assessment of the company's performance. Since not all companies calculate financial measurements in the same way, these are not always comparable with measurements that are used by third companies. These financial measurements must not therefore be seen as a replacement for measurements that are defined according to IFRS.
The definition of the key figure Net liabilities/adjusted EBITDA rolling 12 is net liabilities in relation to operating profit before depreciation and impairment including acquired operations for the last 12-month period.
The carrying value for financial instruments reported at the accrued acquisition value corresponds to the fair value.
Transactions with related parties have taken place on market terms and have not significantly affected the Group's results.
Stockholm,25 October 2016 Rejlers AB (publ)
Peter Rejler Director, President and CEO
We have conducted a general review of the interim report for Rejlers AB (publ) for the period 1 January 2016 to 30 September 2016. The Board of Directors and the CEO are responsible for preparing and presenting this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express our conclusion about this interim report, based on our general review.
We have conducted our general review in accordance with the International Standard on Review Engagements ISRE 2410 Review of interim financial information performed by the independent auditor of the entity. A general review consists of making enquiries, in the first instance with individuals who are responsible for financial and accounting issues, for carrying out analytical reviews and for implementing other general review procedures. A general review has a different approach and is substantially less in scope than an audit conducted in accordance with ISA and good auditing practice in general. The review procedures that are implemented in conjunction with a general review do not enable us to acquire such assurance that we are aware of all important circumstances that might have been identified had an audit been carried out. The expressed conclusion based on a general review does not therefore have the same level of assurance as an expressed conclusion based on an audit.
Based on our general review, no circumstances have emerged that gives us grounds to consider that the interim report has not essentially been prepared on the Group's part in accordance with IAS 34 and the Annual Accounts Act, and on the Parent Company's part in accordance with the Annual Accounts Act.
Stockholm, 25 October 2016
Deloitte AB
Birgitta Lööf Authorised Public Accountant
Rejlers AB (publ) is obliged by the EU market abuse directive and the law on the securities market to publish the information contained in this interim report. The information was provided by the above contact person for publication on 25 October 2016, at 08.00 CET. This report is also available in Swedish. This English report is a translation from Swedish. If there are any differences, the Swedish language report shall prevail.
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