Wulff-Yhtiöt Oyj — Earnings Release 2017

Feb 22, 2018

WULFF GROUP PLC'S FINANCIAL STATEMENTS RELEASE JANUARY 1 – DECEMBER 31, 2017

WULFF GROUP PLC'S FINANCIAL STATEMENTS RELEASE JANUARY 1 – DECEMBER 31, 2017

FINANCIAL STATEMENTS RELEASE      FEBRUARY 22, 2018 at 9.00 A.M.

EBITDA and operating profit grew in the final quarter of the financial year

This is a summary of Wulff Group Plc's Financial Statements Release January 1 -
December 2017. The complete report is attached to this stock exchange release as
a pdf-file. The report is also available at the website www.wulff-group.com.

1.10. – 31.12.2017 BRIEFLY

· Net sales totalled EUR 15.8 million (15.8), up 0.1%
· EBITDA and comparable EBITDA were EUR 0.4 million (0.3), up 20.6%
· Operating profit (EBIT) and comparable operating profit (EBIT) were EUR 0.3
million (0.2), up 32.6%
· Earnings per share (EPS) were EUR 0.04 (0.04)

1.1.  – 31.12.2017 BRIEFLY

· Net sales totalled EUR 56.9 million (59.3), down 4.0%
· EBITDA was EUR 0.4 million (1.0). Comparable EBITDA was EUR 0.4 million
(0.8)
· Operating profit (EBIT) was EUR -0,0 million (0.6). Comparable operating
profit (EBIT) was EUR -0,0 million (0.4)
· Earnings per share (EPS) were EUR -0.03 (0.05)
· Equity-to-assets ratio was 47.0 % (31.12.2016: 50.5)
· The Board proposes to the Annual General Meeting to be held on April 5, 2018
that a dividend of EUR 0.05 per share be paid
· Wulff estimates that the comparable operating profit will grow in 2018

WULFF GROUP PLC’S CEO HEIKKI VIENOLA

“Investing in our competitiveness and renewal shows in our result for 2017:
EBITDA and operating profit are down from the previous year – and the last
quarter of the financial year was positive regarding our net sales, EBITDA and
operating profit. The final quarter of the year gives us a good starting point
for 2018. We are especially delighted how our personnel, customers, and
cooperation partners have received our new and updated strategy that we worked
on last year: our mission is to make this world better one workplace at a time.
We will bring more and more environmentally friendly and sustainable products to
our customers. Better workdays are made by creating more pleasant, healthier,
safer, more relaxing, more versatile, and more active workplaces; wherever
people work now and in the future. We will ensure that everyday life and
purchasing at the workplace run smoothly and people feel well at work.”

GROUP’S NET SALES AND RESULT PERFORMANCE

In 2017 net sales totalled EUR 56.9 million (59.3), and EUR 15.8 (15.8) million
in the final quarter. Net sales decreased by 4.0% in January-December and grew
0.1% in the final quarter. The decline in net sales was a result of lost
contracts and trimming of the product range, especially in the case of those
products whose demand has diminished. Wulff will continue to invest strongly in
the development of a new range of products for the workplace.

In January-December 2017 the gross margin amounted to EUR 19.2 million (20.5)
being 33.8% (34.6), and EUR 5.3 million (5.3) in the final quarter being 33.6%
(33.5). The gross margin percent decreased due to the concentration of demand on
low margin products during the first half-year period. The continuous
streamlining of procurement processes is one of Wulff’s most important measures
to improve profitability.

In January-December 2017 employee benefit expenses amounted to EUR 12.2 million
(12.6), 21.5% (21.2) of net sales and EUR 3.2 million (3.2), 20.2% (20.1) of net
sales in the fourth quarter. Other operating expenses amounted to EUR 6.8
million (7.4) in January-December 2017 being 11.9% (12.5) of net sales, and EUR
1.8 million (1.9), 11.2% (12.1), of net sales in the final quarter. Employee
benefit and other operating expenses were still affected by the implemented cost
-saving measures and development projects.

In January-December 2017 EBITDA was EUR 0.4 million (1.0) being 0.6% (1.7) of
net sales, and EUR 0.4 million (0.3) in the final quarter. In January-December
2017 the comparable EBITDA amounted to EUR 0.4 million (0.8), and EUR 0.4
million (0.4) in the fourth quarter. 2016 EBITDA included a profit of EUR 0.2
million from the sales of car stock in January-December. 2017 EBITDA did not
include items affecting comparability.

Wulff adjusted its outlook for 2017 on September 20, 2017. Originally, the
comparable operating profit was estimated to increase from 2016. In January
-December 2017 the operating profit (EBIT) amounted to EUR -0.0 million (0.6)
being -0.1% (1.0) of net sales, and EUR 0.3 million (0.2) in the final quarter.
In January-December 2017 the comparable operating profit (EBIT) amounted to EUR
-0.0 million (0.4) and EUR 0.3 million (0.2) in the fourth quarter. The January
-December 2016 operating profit included a profit of EUR 0.2 million from the
sales of car stock that affected comparability.

In January-December 2017 the financial income and expenses totalled (net) EUR
-0.2 million (-0.2) including interest expenses of EUR -0.1 million (-0.2) and
mainly currency-related other financial items (net) EUR -0.2 million (-0.0). In
the final quarter, the financial income and expenses (net) totalled EUR -0.1
million (-0.0).

In January-December 2017 the result before taxes was EUR -0.2 million (0.4), and
EUR 0.2 million (0.2) in the final quarter.

In January-December 2017 the net profit was EUR -0.2 million (0.3), and 0.3
million (0.2) in the final quarter.

Earnings per share (EPS) were EUR -0.03 (0.05) in January-December 2017, and EUR
0.04 (0.04) in the final quarter.

KEY FIGURES

+-----------------------------------------+-----+----------+---------+---------+
| |IV  |IV  |I-IV  |I-IV |
+-----------------------------------------+-----+----------+---------+---------+
|EUR 1000  |2017 |2016 |2017 |2016 |
+-----------------------------------------+-----+----------+---------+---------+
|Net sales  |15 |15 811 |56 931 |59 304 |
| |829 | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Change in net sales, % |0.1% |-14.9%  |-4.0% |-13.8% |
+-----------------------------------------+-----+----------+---------+---------+
|EBITDA |372 |308  |354 |998 |
+-----------------------------------------+-----+----------+---------+---------+
|EBITDA margin, %  |2.3% |1.9%  |0.6% |1.7% |
+-----------------------------------------+-----+----------+---------+---------+
|Operating profit/loss  |274 |207  |-33 |583 |
+-----------------------------------------+-----+----------+---------+---------+
|Operating profit/loss margin, %  |1.7% |1.3%  |-0.1% |1.0% |
+-----------------------------------------+-----+----------+---------+---------+
|Profit/Loss before taxes  |170 |198  |-247 |351 |
+-----------------------------------------+-----+----------+---------+---------+
|Profit/Loss before taxes margin, %  |1.1% |1.3%  |-0.4% |0.6% |
+-----------------------------------------+-----+----------+---------+---------+
|Net profit/loss for the period |274 |231  |-193 |302 |
|attributable to equity holders of the | | | | |
|parent company | | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Net profit/loss for the period, %  |1.7% |1.5%  |-0.3% |0.5% |
+-----------------------------------------+-----+----------+---------+---------+
|Earnings per share, EUR (diluted = non |0.04 |0.04  |-0.03 |0.05 |
|-diluted) | | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Return on equity (ROE), % |2.4% |1.8%  |-2.0% |2.5% |
+-----------------------------------------+-----+----------+---------+---------+
|Return on investment (ROI), % |-1.1%|1.6%  |-1.1% |2.9% |
+-----------------------------------------+-----+----------+---------+---------+
|Equity-to-assets ratio at the end of |47.0%|50.5%  |47.0% |50.5% |
|period, % | | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Debt-to-equity ratio at the end of |19.8%|19.6%  |19.8% |19.6% |
|period  | | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Equity per share at the end of period, |1.64 |1.78  |1.64 |1.78 |
|EUR * | | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Investments in non-current assets  |16 |203 |429 |319 |
+-----------------------------------------+-----+----------+---------+---------+
|Investments in non-current assets, % of |0.1% |1.3%  |0.8% |0.5% |
|net sales  | | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Treasury shares held by the Group at the |79 |79 000  |79 000 |79 000 |
|end of period  |000 | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Treasury shares, % of total share capital|1.2% |1.2%  |1.2% |1.2% |
|and votes  | | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Number of total issued shares at the end |6 607|6 607 628 |6 607 628|6 607 628|
|of period  |628 | | | |
+-----------------------------------------+-----+----------+---------+---------+
|Personnel on average during the period |198 |207 |198 |214 |
+-----------------------------------------+-----+----------+---------+---------+
|Personnel at the end of period  |195 |203 |195 |203 |
+-----------------------------------------+-----+----------+---------+---------+

* 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 demand for office supplies is strongly affected by the general economic
development and the industry’s tight competition. Business operations are also
affected by normal business risks such as the success of the Group’s strategy
and operative risks stemming from the personnel, logistics and IT environments.
Approximately half of the Group’s net sales come from other than euro-currency
countries. Fluctuation of the currencies affects the Group’s net result and
balance sheet.

Part of the Group’s loan agreements have covenants that stipulate that the
equity-to-assets ratio must be at least 35 percent and the interest-bearing
liabilities/operating margin ratio at most 3.5 at the end of each reporting
period. Covenants are reported yearly. At the end of the reporting period
31.12.2017 the Group’s equity-to-assets ratio was 47.0% (50.5). At the end of
the reporting period the interest-bearing liabilities/operating margin covenant
was 6.8 and was therefore exceeded as per the loan terms due to the negative
result. The Group’s management negotiated with the financier at the end of 2017
and due to the breach of covenant the financier will collect a one-off
compensation. Interest-bearing liabilities have been divided into short-term and
long-term debts according to their repayment schedule that was in effect on
December 31, 2017.

SUBSEQUENT EVENTS

The Group has not had any significant subsequent events after the reporting
period.

BOARD OF DIRECTORS’ PROPOSAL FOR THE ANNUAL RESULT

The Group’s parent company Wulff Group Plc’s distributable funds totalled EUR
1.5 million. The Group’s net result attributable to the parent company
shareholders was EUR -0.2 million (0.3), i.e. EUR -0.03 per share (EUR 0.05 per
share). The Board of Directors proposes to the Annual General Meeting to be held
on April 5th, 2018 that a dividend of EUR 0.05 per share, i.e. EUR 0.3 million,
be paid for the financial year 2017, and the remaining distributable funds be
left in retained earnings in the shareholders’ equity.

MARKET SITUATION AND FUTURE OUTLOOK

Wulff is the most significant Nordic player in its field. Its aim is to lead the
way, renew the field and be at the forefront of change. Wulff believes that the
role of values and sustainability will come to have an increasingly important
part in sourcing decisions and companies’ business partner selections in the
future. With its new strategy, Wulff will build its competitiveness and make
sure that it can offer customers what they want: solutions for making the
everyday work life smoother and the world better one workplace at a time. The
market traditionally understood as the office environment changes and develops
rapidly. Competition is tough in the traditional market and the new market has a
lot of opportunities. Wulff believes that the future is bright due to the
strong, constantly developing new strategy, its active customer and partner
networks, and its professional, committed personnel. The Group has an ongoing
readiness to carry out new strategic acquisitions and as a listed company, Wulff
is in a good position to be a more active player than its competitors.

The developing economic situation will enable Wulff’s business to develop
positively. Wulff will improve the profitability of its operations and estimates
that the comparable operating profit for 2018 will grow. In the industry, it is
typical that the result and cash flow are generated in the last quarter.

WULFF GROUP PLC’S FINANCIAL REPORTING AND ANNUAL GENERAL MEETING 2018

Wulff Group Plc will release the following financial reports in 2018:

Statutory Financial Statements 2017 week 11/2018
Interim Report, January-March 2018 Thursday May 3, 2018
Interim Report, January-June 2018 Thursday August 2, 2018
Interim Report, January-September 2018 Thursday November 1, 2018

Wulff Group Plc’s Annual General Meeting will be held on Thursday April 5, 2018.
A separate notice to the Annual General Meeting will be published prior to the
meeting in 2018.

In Vantaa on February 21, 2018

WULFF GROUP PLC
BOARD OF DIRECTORS

Further information:
CEO Heikki Vienola
tel. +358 300 870 414 or  +358 50 65 110
email: heikki.vienola@wulff.fi

DISTRIBUTION
NASDAQ OMX Helsinki Oy
Key media
www.wulff-group.com

A BETTER WORLD – ONE WORKPLACE AT A TIME. Wulff enables working in environments
where companies and entrepreneurs operate. We offer the industry’s most
comprehensive product and service range that can help you create an office
wherever you want it. What would you like? We offer our customers office
supplies, facility management products, catering solutions, IT supplies,
ergonomics, first aid, and innovative products for worksites. Customers can also
acquire international exhibition services from Wulff. In addition to Finland,
Wulff operates in Sweden, Norway, and Denmark. Check out our products and
services at wulff.fi (http://www.wulff.fi/).

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