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Wulff-Yhtiöt Oyj — Interim / Quarterly Report 2020
Feb 22, 2021
3350_rns_2021-02-22_d351af2e-c075-4cdd-aa17-2a4288bf2c0b.pdf
Interim / Quarterly Report
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WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
WULFF GROUP PLC'S FINANCIAL STATEMENTS RELEASE JANUARY 1–DECEMBER 31, 2020
Excellent result from the sales company and a proposal for a growing dividend
1.10.–31.12.2020 BRIEFLY
- Net sales totalled EUR 15.3 million (15.1), increased by 1.5%
- EBITDA and comparable EBITDA were EUR 1.5 million (1.1), 10.0% of net sales (7.6)
- Operating profit (EBIT) and comparable operating profit (EBIT) were EUR 1.2 million (0.8)
- Earnings per share and comparable earnings per share (EPS) were EUR 0.14 (0.09)
1.1.–31.12.2020 BRIEFLY
- Net sales totalled EUR 57.5 million (56.3), increased by 2.1% (0.8)
- EBITDA was EUR 5.2 million (3.1), 9.0% of net sales (5.4) and comparable EBITDA was EUR 5.2 million (3.2), 9.0% of net sales (5.7)
- Operating profit (EBIT) was EUR 3.5 million (1.6) and comparable operating profit (EBIT) was EUR 3.5 million (1.7). Comparable operating profit (EBIT) grew 109.9% (11.9)
- Earnings per share (EPS) were EUR 0.32 (0.15) and comparable earnings per share were EUR 0.32 (0.17)
- Equity-to-assets ratio was 41.9% (39.2)
- The Board proposes to the Annual General Meeting to be held on April 8, 2021 that a dividend of EUR 0.12 per share to be paid
- Wulff estimates that the net sales will grow from 2020 (EUR 57.5 million) and the comparable operating profit of 2021 will remain at a good level in 2021.
WULFF GROUP PLC'S CEO ELINA PIENIMÄKI
"Year 2020 was one of the most special – and finest – in Wulff's 130-year history. We managed to grow profitably and make an excellent result in 2020. In the exceptional circumstances, the nature of the culture and sales community built with over 100 years of work, was tested. I am very grateful and appreciative of our personnel, customers, and partners. The market and operational environment changed rapidly. We adapted, anticipated, and acted and trusted our strategy to make the world a better place, one workplace at a time. Our customers trusted that we are the right partner to ensure safe work environments and take care of proficient workplace product service, even in exceptional circumstances. The quality of both the customer and employee experience developed positively in 2020: Wulff was rated the best in its field according to an external independent survey conducted in September-October 2020, and the Group's personnel survey said that satisfaction with Wulff as an employer was increased. We have updated our strategy to be even more responsible according to our customers' and personnel's wishes. As a responsible, local, and multi-channel company we are a suitable partner by both our values and service methods to a continuously increasing number of companies. When this is combined with the best sales expertise in Nordic countries, and an active new customer acquisition, and international network of partners, growth is possible even in demanding times."
GROUP'S NET SALES AND RESULT PERFORMANCE
In January-December 2020 net sales totalled EUR 57.5 million (56.3), and EUR 15.3 (15.1) million in the final quarter. Net sales increased by 2.1% (0.8) during the whole financial year and 1.5% (1.7) in the final quarter. Due to the development of the product portfolio and the sales of hygiene, cleaning and protective products nets sales increased during the whole financial year and in the final quarter even though due to restrictions on traveling and gathering international fair events were mostly cancelled or postponed and the sales of printing solutions decreased.
In January-December 2020 the gross margin amounted to EUR 20.7 million (19.8) being 36.1% (35.2), and EUR 5.3 million (5.5) in the final quarter being 34.9% (36.3). Sales of hygiene, cleaning, and protective products as well as IT and remote workplace products to current and new customers increased the gross margin for the whole financial year and the final quarter.
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
The gross margin for the final quarter decreased from comparison period due to cancelled fair events. The gross margin for the final quarter was affected by changes in market price and demand in hygiene, cleaning, and protective products. Due to the market change, a write-down provision of EUR 0.4 million was made for slow-moving products, of which EUR 0.2 million was accounted for in the result in the last quarter of the year.
In January-December 2020 employee benefit expenses amounted to EUR 11.6 million (11.9), 20.1% (21.2) of net sales and EUR 2.8 million (3.2), 18.3% (20.9) of net sales in the fourth quarter. In the exceptional circumstances the operations were adjusted by temporarily laying off personnel in the operations, where the coronavirus situation affected due to restriction on traveling and gathering, diminishing the demand a lot. This decreased the Group's salary expenses by more than EUR 1.0 million during the whole financial year of which EUR 0.8 million were actualized during the second quarter. All segments focused on selling hygiene, protective and cleaning products. The Group's Expertise Sales segment grew rapidly, which increased the salary expenses for the whole financial year. The Contract Customers segment and its back-office operations were reorganized and streamlined. There were fewer employees than in the comparison period. Due to reorganization and continued lay offs in the fair services personnel costs decreased in the final quarter.
Other operating expenses were to EUR 4.6 million (5.0) in January-December 2020 being 8.0% (9.0) of net sales and respectively EUR 1.4 million (1.2) in the fourth quarter, being 9.3% (8.2) of net sales. Other operating expenses decreased for the whole financial year among other things, due to less travel. Because of the continued restrictions the credit loss provision was increased by EUR 0.1 million for possibly increasing bankruptcy proceedings. Wulff is constantly developing its operations to be more sustainable and cost-efficient. That is why the company has, for example, invested in energy production with its own solar system at its premises in Kilo, Espoo.
There were no items affecting the comparability in the reporting period 2020. In September 2019 Wulff moved to its own premises in Kilo, Espoo, Finland. The relocation arrangements resulted in additional operating expenses of EUR 0.1 million and employee costs of EUR 0.1 million. The relocation arrangements have presented as items affecting comparability in 2019, which impact has been recognised in EBITDA, operating profit (EBIT) and earnings per share (EPS).
In January-December 2020 EBITDA amounted to EUR 5.2 million (3.1), being 9.0% (5.4) of net sales, and EUR 1.5 million (1.1) in the fourth quarter, being 10.0% (7.6) of net sales.
The operating profit (EBIT) amounted to EUR 3.5 million (1.6), being 6.2% (2.8) of net sales and respectively EUR 1.2 million (0.8), 7.5% (5.1) in the fourth quarter. The comparable operating profit (EBIT) for the whole year amounted to EUR 3.5 million (1.7), being 6.2% (3.0) of net sales. Comparable operating profit (EBIT) grew 109.9% (11.9) in January-December 2020.
In January-December 2020 the financial income and expenses totalled (net) EUR -0.4 million (-0.4) including interest expenses of EUR -0.2 million (-0.2) and mainly currency-related other financial items and bank expenses (net) EUR -0.2 million (-0.2). In the fourth quarter, the financial income and expenses (net) totalled EUR 0.1 million (-0.1) due to valuation of financial items.
In January-December 2020 the result before taxes was EUR 3.1 million (1.2), and EUR 1.2 million (0.7) in the fourth quarter. The comparable result before taxes for the financial year was EUR 3.1 million (1.3).
The net profit was EUR 2.5 million (1.0) in January-December 2020 and in the fourth quarter EUR 1.0 million (0.6). The comparable result was EUR 2.5 million (1.2) in January-December 2020.
Earnings per share (EPS) were EUR 0.32 (0.15) in January-December 2020, and EUR 0.14 (0.09) in the fourth quarter. Comparable earnings per share (EPS) were EUR 0.32 (0.17) in January-December 2020.
CONTRACT CUSTOMERS SEGMENT
Wulff's Contract Customers Segment is the customer's expert partner in the field of workplace services and products, Canon printing and data management solutions as well as international fair services in Finland and Scandinavia. For the company it is important to better the customer experience constantly and to develop its operations as efficient as possible and sustainable. The Contract Customers Segment's theme for 2020 was the best customer experience and to integrate the service concepts and back-office operations.
In January-December 2020 the segment's net sales totalled EUR 42.5 million (47.2), and EUR 12.4 million (12.6) in the fourth quarter. In January-December 2020 the operating profit (EBIT) was EUR 1.5 million (1.8), and EUR 0.9 million (0.9) in the fourth quarter. The net sales and the profitability were impacted especially by the international fair services: fair events were cancelled or postponed even by years due to the traveling and gathering restrictions. Wulff's Contract Customers include several large companies and corporations which purchased less traditional workplace related products, such as coffee and property maintenance products as well as office supplies to their premises during the reporting period. Current hygiene and protective products were sold to offices and work environments. These products are believed to remain as a part of everyday business, and Wulff develops the quality, features and variety of the product range, as well as ways to deliver products to customers to
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
where the work is done. In Finland, the Contract Customers segment was renewed to make a more coherent customer experience and more sufficient internal services. Torkkelin Paperi Plc, a company responsible for Wulff's contract sales and store operations in the Lahti region, was merged into the parent company, Wulff Oy Plc. Local services continue stronger and more efficient in all sales channels in the area. Due to reorganization and continued lay offs in the fair services personnel costs decreased in the final quarter. The profitability of the Contract Customer segment was also affected by the compensations of ending employment relationships.
In Finland, Wulff is the industry's strongest and in Scandinavia one of the top actors in the industry, and a remarkable number of large companies in the Nordics trust its services. One of the most popular cost and time saving supply solutions in Finland is Wulff's MiniBar, and in Scandinavia, the Cabinet Service, which can be found in hundreds of companies and groups. The MiniBar and Cabinet Service work like their hotel namesakes. The automated refilling services house on their shelves ready-to-use current and traditional products. The share of traditional office products has decreased over the years as other work-place products have been added to the assortment. The exceptional circumstances also affect the contents of the Minibar: hygiene and cleaning products have become popular together with IT, coffee, maintenance products and office supplies. The new normal means investing in cleanliness and safety in the future as well.
The share of knowledge work, remote work and mobile work of all work done has been increasing for a long time. In the exceptional circumstances the policies and guidelines given by the government and the Finnish Institute for Health and Welfare during the exceptional time shifted working from office to homes and for example to summerhouses. An increasing share of work is done remotely and in different changing environments in the future as well. That's why Wulff invests in a product portfolio, which enables safe, ergonomic and ambient way of working in home offices and while moving from one place to another in addition to business premises.
The coronavirus conditions impacted the sales of international fair services the most in the Wulff group. Due to the traveling and gathering restrictions most of the international fair events were cancelled. Some events have been postponed even by years. Wulff Entre, the company which provides trade fair services adjusted its operations especially by temporarily laying off personnel. Wulff Entre received Government business cost support by the Finnish State Treasury EUR 0.3 million. Wulff Entre's new CEO as of August 2020, Tomi Hilvo, started the development of the Group's international fair services. Wulff Entre renewed the trade show and event industry at Wulff with Hilvo's lead, who has made an extensive international career in fair services. Wulff Entre launched new service concepts Exhibition On Demand and My Remote Studio for new ways to encounter customers and other interest groups safely in a virtual fair-like or in other inspiring settings. The new concept has been well received among Wulff Entre's customers; companies have a need to meet customers even in these exceptional circumstances. In addition to Finland, Wulff Entre serves customers in e.g. Germany, Sweden, Norway, Russia and the United States. In normal circumstances Wulff Entre exports Finnish know-how to over 30 countries.
Printing services are nowadays more and more outsourced. Wulff group's Canon Business Center offers high quality solutions for office and professional printing and database handling. The printing services business was stable despite the pandemic. Canon Business Center serves customers in the Helsinki metropolitan area. The company has been within the Wulff Group since 2018.
Wulff's open web shop Wulffinkulma.fi managed to grow its sales and visitors during the exceptional circumstances. The web shop geared towards particularly small companies and self-employed people also focused on serving also consumers in 2020. A product range that is more diverse than what its traditional competitors, expanded its assortment even more. The assortment has now got more than 4,000 products. In addition to hygiene and protective products the web shop is equipped with plentiful healthy snacks, salty dry foods, sweet treats, and animal food products.
Wulffinkulma web shop is known for its fast and reliable deliveries. The versatile and mobile friendly web shop's advantages are safe accurate deliveries. To the business premises, home and summerhouse office and self-employed person's desk in the social shared offices: the Wulffinkulma.fi web shop delivers products where the customer wants at the chosen time. The same daily products are in use in home offices as in traditional office spaces: soft tissue papers, hand towels, soap, coffee, and snacks. Wulff is appreciated for its local, sustainable, and environmentally sound assortment. What the customers appreciate will show in the assortment when it is developed in the future. The web shop is continuously being developed to offer even more sustainable options and information on the environmental impact of its products.
EXPERTISE SALES SEGMENT
The Expertise Sales segment makes everyday life at the workplace easier by offering the best workplace products and novelties in the market with the most professional, personal, and local service.
In January-December 2020 the Expertise Sales Segment's net sales totalled EUR 16.0 million (9.1), and EUR 4.0 million (2.5) in the fourth quarter. In January-December 2020 the operating profit was EUR 2.4 million (0.2) and EUR 0.4 million (0.1) in the final quarter. In the exceptional circumstances, personal service and solid expertise were greatly appreciated. The Expertise Sales segment quickly adopted new ways to meet customers and communicate current solutions. The procurement and sales
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
renewed its assortment agilely: new products and product areas as well as new suppliers were acquired rapidly, as Wulff, known as an efficient and sales-driven distribution channel, is a desired partner for suppliers. As the result of Wulff-like efficiency and way of doing things the net sales and operating profit for the whole reporting period as well as the fourth quarter grew. The Expertise Sales segment acquired plenty customers for example in the health care sector. Thanks to excellent sales power, the Expertise Sales segment increased net sales and operating profit strongly in the exceptional circumstances.
Expertise Sales is an expert service that requires knowledge of the customer, the customer's business and operating environment, and it emphasises the importance of personal contact. Wulff stands out from the competition due to its locality and domesticity. The Expertise Sales segment offers customers novelties and favourites, and a broad range of workplace wellbeing and ergonomic products, first aid, and products improving work safety. Sustainability, locality and environmentally friendly are even more important grounds for choices. During the exceptional circumstances it has been vital to secure hygiene, protection and safe ways of working. Due to the aging workforce, Nordic companies are increasingly investing in ergonomics and first aid products for the workplace. Knowledge work will continue to account for an ever-increasing part of all labour and that is why companies are also proactively investing in good workplace ergonomics. With good workplace ergonomics, it is possible to achieve significant savings due to diminution of sick leaves. The Expertise Sales segment offers personal service to its clients and the product concept is always tailored together with the customers to meet their needs. Expertise Sales actively brings solutions that make workdays better to the awareness of customers.
During the exceptional circumstances the Expertise Sales strength was to take over the sales of current topics fast and to contact regional customers quickly offering individually suitable products to them. Wulff's sales expert is a trusted contact, whose sales expertise is highly valued. Preparing for the coronavirus and the changes it brought in the actions of companies and people created additional sales opportunities to Wulff. The demand for cleaning and hygiene products as well as equipment used in remote work increased and indoor air conditions are seen important as well. Expertise sales serves personally and locally; identifying the specifics of customer actions.
Wulff is known for being the workplace of successful salespeople. An increasing number of executive leaders and company managers have a background in sales, and there is growing appreciation of sales skills in our society today. Successful recruiting and the number of the sales personnel have a significant effect especially on the performance of the Expertise Sales Segment. New talents and future sales experts are welcome to Wulff! Wulff's own introduction and training programs ensure that not only does every salesperson get a comprehensive training and an exciting start to their career, but also further education on how to improve one's own expertise.
FINANCING, INVESTMENTS AND FINANCIAL POSITION
In January-December 2020 the cash flow from operating activities was EUR 2.8 million (3.8). In the industry, it is typical that the result and cash flow are generated in the last quarter. At the end of the financial year prepayments from hygiene products were EUR 0.7 million higher than in the comparison period. The procurement of hygiene products increased the value of inventory in 2020 and tied up more funds compared to 2019.
Investments during the reporting period were EUR 0.7 million (7.4). During the comparison period Wulff invested in its own premises in Finland and in Sweden.
Wulff Group Plc raised a new one-million-euro loan on May 8, 2020 to cover additional financing needs during the Corona period. The loan was paid back before the end of the reporting period. During the second quarter the company agreed to transfer two instalments of long-term loans in 2020 to the loan principal of future instalments. Due to the payment arrangement, the amount of long-term loan repayments was EUR 0.4 million lower than in the previous payment plan for the whole reporting period.
Long-term loans were repaid in total of EUR 0.5 million (0.8) during the reporting period. Short-term loans were withdrawn amounting to EUR 0.3 million (1.0) during the reporting period. In the comparison period of 2019, two new long-term loans were raised, one in January in Swedish kronor of approximately EUR 2.9 million to finance the acquisition of a Swedish logistics center and the other in April EUR 2.0 million to finance the acquisition of Espoo's Kilo premises. The repayment period of both financial loans is 10 years.
The lease liabilities payments were EUR 0.8 million (0.9). Recognition of lease agreements within the balance sheet increased group assets EUR 1.2 million (1.0) and liabilities EUR 1.3 million (1.0) at the end of reporting period.
In November 2020 a dividend of EUR 0.7 million in total was paid to the owners of the parent company. In April 2019 a dividend of EUR 0.7 million in total was paid to the owners of the parent company.
The cash flow of financing activities was EUR -1.8 million (3.5) in January-December 2020.
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
The Group's cash balance increased by EUR 0.2 million (-0.1) in January–December. The Group's bank and cash funds totalled EUR 0.3 million (0.5) at the beginning of the year and EUR 0.5 million (0.3) at the end of the reporting period.
At the end of December 2020 equity attributable to the equity holders of the parent company was EUR 2.00 per share (1.76).
SHARES AND SHARE CAPITAL
Wulff Group Plc's share is listed on NASDAQ OMX Helsinki in the Small Cap segment under the Industrial Goods and Services sector. The company's trading code is WUF1V. At the end of the reporting period, the share was valued at EUR 3.24 (1.77) and the market capitalization of the outstanding shares totalled EUR 21.9 million (12.1). In 2020, 3,538,157 shares (736,299) were traded and the total number of shareholders on 31 December 2020 was 1,867 (934).
During the second quarter the Board of Directors of Wulff Group Plc decided to start buy back its own shares in accordance with the authorization granted by the Annual General Meeting. The repurchases started on May 25, 2020 and ended on June 11, 2020. Wulff Group Plc repurchased 65,260 shares at the market price quoted through public trading on NASDAQ OMX Helsinki, in accordance with the rules regarding the acquisition of company's owns shares. The acquired shares are intended to be used to finance acquisitions and other arrangements according to the company's growth strategy. In January-December 2019 no own shares were reacquired.
At the end of December 2020, the Group held 144,260 (79,000) own shares representing 2.1% (1.1) of the total number and voting rights of Wulff shares.
DECISIONS OF THE ANNUAL GENERAL MEETING AND BOARD OF DIRECTORS
Wulff Group Plc's Annual General Meeting was held in the Wulff House in Espoo on April 23, 2020. The Annual General Meeting adopted the financial statements for the financial year 2019 and discharged the members of the Board of Directors and CEO from liability for the financial period 1.1.–31.12.2019. Wulff Group Plc's Annual General Meeting decided to authorize the Board of Directors to decide according to their own consideration on a dividend distribution of a maximum of EUR 0.11 for the financial year 2019. The Board of Directors decided to use the authorization to its entirety in October 2020 and a dividend of EUR 0.11 per share was paid on November 11, 2020.
Kari Juutilainen, Jussi Vienola, Kristina Vienola and as a new member Lauri Sipponen were elected as members of the Board. The organizing meeting of Wulff Group Plc's Board of Directors, held after the Annual General Meeting, decided that the Chairman of the Board is Kari Juutilainen. It was confirmed that the members of the Board of Directors will receive a monthly fee of EUR 1,250.
BDO Oy, a company of Authorized Public Accountants, with Authorized Public Accountant Juha Selänne as the lead audit partner, was chosen as the auditor of Wulff Group Plc.
The Annual General Meeting adopted the remuneration policy proposed by the Board of Directors.
The Annual General Meeting authorised the Board of Directors to resolve on the acquisition of maximum 300,000 own shares. The authorization is effective until April 30, 2021. The Board of Directors decided to continue buying back own shares in accordance with the authorization granted by the Annual General Meeting on April 23, 2020.
The Annual General Meeting authorised the Board to decide on the issue of new shares, disposal of treasury shares and/or the issue of special rights. The authorisation entitles the Board to issue a maximum of 1,300,000 shares, representing approximately 20% of the company's currently outstanding stock, based on a single decision or several decisions. The authorisation remains in force until April 30, 2021.
PERSONNEL
In January-December 2020 the Group's personnel totalled 189 (198) employees on average. At the end of December, the Group had 176 (200) employees of which 60 (67) persons were employed in Sweden, Norway or Denmark. The majority, 57% (57) of the Group's personnel works in sales operations and 43% (43) of the employees work in sales support, logistics and administration. 48% (48) of the personnel are women and 52% (52) are men.
Employees' job satisfaction is measured annually with a personnel survey conducted in cooperation with Varma. Wulff employees actively respond to the survey. Job satisfaction has been at an excellent level, and it increased in 2020 compared to
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
the previous year. In addition to general job satisfaction, the company's values were reflected in the work routine, opportunities to develop one's own skills and experience as a professional as well as leadership.
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, its preparedness and the constraints associated with virus management 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 digitalisation 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 strategy and operational risks arising from the personnel, logistics and IT environment. Intense competition in the workplace products and services industry can affect the profitability of the business. Changes in exchange rates affect the Group's net result and balance sheet, as approximately half of the Wulff Group's net sales come from non-euro countries.
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 1.4 million (1.6). The Group's net result attributable to the parent company shareholders was EUR 2.2 million (1.0), i.e. EUR 0.32 per share (0.15). The Board of Directors proposes to the Annual General Meeting to be held on April 8, 2021 that a dividend of EUR 0.12 per share, i.e. EUR 0.8 million, be paid for the financial year 2020, and the remaining distributable funds be left in retained earnings in the shareholders' equity.
MARKET SITUATION AND FUTURE OUTLOOK
Megatrends play a role in Wulff's operations. The company's operating environment is positively affected by the growing share of information work in all work performed. On the other hand, demographic developments are actively reducing the number of people in employment at present. The integration of technology into products and services is an opportunity for Wulff. Digitalisation already brings new ways for a multi-channel company to reach and serve customers and streamline its own operations. Of the megatrends, the most significant for Wulff's operations and future is responsible operations and, in particular, consideration for the environment: whether it treats the environment as a resource or whether the goal is to improve the state of the environment. Future success is strongly built on these themes and their growing importance in business and consumer decision-making. Wulff has chosen responsibility and especially positive climate action and increasing equality as important elements of his strategy.
Demand for products is significantly affected by general economic and market developments as well as the employment rate. In recent years, the market for workplace products and services in the Nordic countries has remained stable. Teleworking has increased and increased the number of workstations and the demand for products needed in workstations. The coronavirus pandemic increased demand for hygiene, protection, and cleaning products. Wulff estimates that the overall market for workplace products and services will remain stable in 2021: although the coronavirus pandemic has had a negative impact on the general economy and employment, the company expects demand for hygiene, cleaning, security, and IT supplies to continue to grow slightly, as at the same time demand for office supplies is decreasing.
Consolidation of the market for workplace products and services is expected to continue, and Wulff is well placed to be a more competitive player in M&A.
Demand for Wulff Entre's services, which provides planning and project management for international trade fairs, has declined due to the coronavirus pandemic, which will weaken Wulff's net sales and operating profit in 2021.
Changes in the operating environment weaken the predictability of the whole year. Wulff estimates that the comparable operating profit of 2021 will decrease from 2020 but will be at a good level in 2021. Wulff's medium-term financial targets remain unchanged. Wulff targets in the medium-term an average annual growth of 5-10% of the netsales, a growing comparable operating profit per cent and an increasing dividend per share.
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
WULFF GROUP PLC'S FINANCIAL REPORTING AND ANNUAL GENERAL MEETING 2021
Wulff Group Plc will release the following financial reports in 2021:
Annual Report 2020
Wednesday March 10, 2021
Interim Report January-March 2021
Monday April 26, 2021
Half-Year Report January-June 2021
Monday July 26, 2021
Interim Report January-September 2021
Monday October 25, 2021
Wulff Group Plc's Annual General Meeting will be held on Thursday April 8, 2021. A separate notice to the Annual General Meeting will be published prior to the meeting.
In Espoo on February 22, 2021
WULFF GROUP PLC
BOARD OF DIRECTORS
Further information:
CEO Elina Pienimäki
tel. +358 40 647 1444
e-mail: [email protected]
DISTRIBUTION
NASDAQ OMX Helsinki Oy
Key media
www.wulff.fi/en
A better world – one workplace at a time. Wulff's goal is a perfect workday! We enable better working environments and create workplaces, wherever you are. More comfortable, healthier, safer, more enjoyable, more active and more diverse? How do you want to better you workday and working environment? Wulff has the solution. We offer our customers office supplies, facility management products, catering solutions, IT supplies, ergonomics, first aid, air purifiers, 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/en.
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1.1.–31.12.2020
The information presented in the report has not been audited.
| CONSOLIDATED STATEMENT OF INCOME (IFRS) | IV | IV | I-IV | I-IV |
|---|---|---|---|---|
| EUR 1000 | 2020 | 2019 | 2020 | 2019 |
| Net sales | 15 314 | 15 081 | 57 541 | 56 344 |
| Other operating income | 421 | 67 | 668 | 237 |
| Materials and services | -9 969 | -9 604 | -36 793 | -36 519 |
| Employee benefit expenses | -2 808 | -3 159 | -11 594 | -11 949 |
| Other operating expenses | -1 430 | -1 237 | -4 618 | -5 047 |
| EBITDA | 1 528 | 1 148 | 5 204 | 3 067 |
| Depreciation and amortization | -377 | -385 | -1 664 | -1 497 |
| Operating profit/loss | 1 150 | 763 | 3 541 | 1 570 |
| Financial income | 55 | 38 | 72 | 62 |
| Financial expenses | -5 | -99 | -512 | -438 |
| Profit/Loss before taxes | 1 201 | 703 | 3 101 | 1 194 |
| Income taxes | -245 | -96 | -558 | -151 |
| Net profit/loss for the period | 955 | 607 | 2 543 | 1 043 |
| Attributable to: | ||||
| Equity holders of the parent company | 914 | 606 | 2 174 | 1 039 |
| Non-controlling interest | 41 | 1 | 369 | 4 |
| Earnings per share for profit attributable to the equity holders of the parent company: | ||||
| (diluted = non-diluted) | 0.14 | 0.09 | 0.32 | 0.15 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS) | ||||
| EUR 1000 | ||||
| Net profit/loss for the period | 955 | 607 | 2 543 | 1 043 |
| Other comprehensive income which may be reclassified to profit or loss subsequently (net of tax) | ||||
| Change in translation differences | 217 | 66 | 181 | -17 |
| Total other comprehensive income | 217 | 66 | 181 | -17 |
| Total comprehensive income for the period | 1 172 | 673 | 2 724 | 1 027 |
| Total comprehensive income attributable to: | ||||
| Equity holders of the parent company | 1 107 | 663 | 2 333 | 1 021 |
| Non-controlling interest | 65 | 10 | 390 | 6 |
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS) | ||
|---|---|---|
| EUR 1000 | 31.12.2020 | 31.12.2019 |
| ASSETS | ||
| Non-current assets | ||
| Goodwill | 8 194 | 8 131 |
| Other intangible assets | 689 | 501 |
| Property, plant and equipment | 8 051 | 8 025 |
| Non-current financial assets | ||
| Non-interest-bearing financial assets | 105 | 105 |
| Deferred tax assets | 1 081 | 1 113 |
| Total non-current assets | 18 120 | 17 874 |
| Current assets | ||
| Inventories | 8 687 | 6 864 |
| Current receivables | ||
| Interest-bearing receivables | 17 | 15 |
| Non-interest-bearing receivables | 8 049 | 7 991 |
| Cash and cash equivalents | 480 | 348 |
| Total current assets | 17 233 | 15 219 |
| TOTAL ASSETS | 35 353 | 33 093 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Equity attributable to the equity holders of the parent company: | ||
| Share capital | 2 650 | 2 650 |
| Share premium fund | 7 662 | 7 662 |
| Invested unrestricted equity fund | 676 | 676 |
| Retained earnings | 2 529 | 1 041 |
| Non-controlling interest | 742 | 350 |
| Total equity | 14 260 | 12 380 |
| Non-current liabilities | ||
| Interest-bearing liabilities | 4 514 | 4 972 |
| Leasing liabilities | 683 | 480 |
| Non-interest-bearing liabilities | 421 | 646 |
| Deferred tax liabilities | 181 | 178 |
| Total non-current liabilities | 5 799 | 6 276 |
| Current liabilities | ||
| Interest-bearing liabilities | 2 888 | 2 539 |
| Leasing liabilities | 581 | 568 |
| Non-interest-bearing liabilities | 11 825 | 11 331 |
| Total current liabilities | 15 294 | 14 438 |
| TOTAL EQUITY AND LIABILITIES | 35 353 | 33 093 |
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
| CONSOLIDATED STATEMENT OF CASH FLOW (IFRS) | I-IV | I-IV |
|---|---|---|
| EUR 1000 | 2020 | 2019 |
| Cash flow from operating activities: | ||
| Cash received from sales | 57 747 | 56 735 |
| Cash received from other operating income | 279 | 222 |
| Cash paid for operating expenses | -54 907 | -52 975 |
| Cash flow from operating activities before financial items and income taxes | 3 119 | 3 982 |
| Interest paid | -181 | -171 |
| Interest received | 16 | 52 |
| Income taxes paid | -171 | -87 |
| Net cash flow from operating activities | 2 783 | 3 777 |
| Cash flow from investing activities: | ||
| Investments in intangible and tangible assets | -719 | -7 359 |
| Acquisition of subsidiary company shares | -216 | -120 |
| Proceeds from sales of intangible and tangible assets | 125 | 15 |
| Net cash flow from investing activities | -810 | -7 463 |
| Cash flow from financing activities: | ||
| Purchase of own shares | -100 | - |
| Dividends paid | -744 | -707 |
| Dividends received | - | 4 |
| Repayments of finance lease liabilities | -833 | -852 |
| Withdrawals and repayments of short-term loans | 343 | 996 |
| Withdrawals of long-term loans | - | 4 922 |
| Repayments of long-term loans | -451 | -815 |
| Net cash flow from financing activities | -1 785 | 3 546 |
| Change in cash and cash equivalents | 188 | -140 |
| Cash and cash equivalents at the beginning of the period | 348 | 476 |
| Translation difference of cash | -57 | 12 |
| Cash and cash equivalents at the end of the period | 480 | 348 |
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IFRS)
| 1000 EUR | Equity attributable to equity holders of the parent company | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Share capital | Share premium fund | Fund for invested non-restricted equity | Own shares | Translation differences | Retained earnings | Total | Non controlling interest | TOTAL | |
| Equity on January 1, 2020 | 2 650 | 7 662 | 676 | -260 | -601 | 1 902 | 12 029 | 350 | 12 380 |
| Net profit / loss for the period | 2 174 | 2 174 | 369 | 2 543 | |||||
| Net profit / loss for the period Total | 2 174 | 2 174 | 369 | 2 543 | |||||
| Other comprehensive income (net of taxes): | |||||||||
| Change in translation difference | 159 | 159 | 22 | 181 | |||||
| Comprehensive income (net of taxes) | 159 | 2 174 | 2 333 | 390 | 2 724 | ||||
| Purchase of own shares | -100 | -100 | - | -100 | |||||
| Dividends paid | -744 | -744 | - | -744 | |||||
| Equity on December 31, 2020 | 2 650 | 7 662 | 676 | -360 | -443 | 3 332 | 13 518 | 742 | 14 260 |
| Equity on January 1, 2019 | 2 650 | 7 662 | 676 | -260 | -583 | 1 572 | 11 718 | 368 | 12 086 |
| IAS 17 adjustment 1.1.2019 to retained earnings | -26 | -26 | - | -26 | |||||
| Adjusted equity on January 1, 2019 | 2 650 | 7 662 | 676 | -260 | -583 | 1 546 | 11 692 | 368 | 12 060 |
| Net profit / loss for the period | 1 039 | 1 039 | 4 | 1 043 | |||||
| Net profit / loss for the period Total | 1 039 | 1 039 | 4 | 1 043 | |||||
| Other comprehensive income (net of taxes): | |||||||||
| Change in translation difference | -18 | -18 | 2 | -17 | |||||
| Comprehensive income (net of taxes) | -18 | 1 039 | 1 021 | 6 | 1 027 | ||||
| Dividends paid | -683 | -683 | -24 | -707 | |||||
| Equity on December 31, 2019 | 2 650 | 7 662 | 676 | -260 | -601 | 1 902 | 12 029 | 350 | 12 380 |
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
This financial report has been prepared in accordance with IAS 34 Interim Financial Reporting. The accounting principles used in the preparation of this report are consistent with those used in the 2019 financial statements, and taking into account the IFRS standard changes adopted as of Jan 1, 2020.
The Group complies with the Guidelines on Alternative Performance Measures (APM) issued by the European Securities and Markets Authority (ESMA) in its statutory reporting. These alternative performance measures, such as the gross margin, comparable EBITDA and comparable operating profit, are used to present the underlying business performance and to enhance comparability between financial periods. The comparable EBITDA and comparable operating profit do not include items affecting comparability. These are income and expenses that are not included in normal business activities, such as profits from sales of subsidiaries, and write-downs of goodwill and significant one-time expenses, such as the relocation expenses of Wulff's Finnish premises to Kilo, Espoo in the third quarter of 2019. The Alternative Performance Measures should not be taken as substitutes for the standards presented in the Generally Accepted Accounting Principles for IFRS.
In the industry, it is typical that the result and cash flow are generated in the last quarter. The seasonality of the international fair business and the timing of the same fair trades arranged yearly, and every other year have an impact on accumulation of the net sales and net profit.
The annual testing of goodwill for impairment was conducted as a part of the annual financial statements. The test showed no need for the write-down of goodwill.
The IFRS principles require the management to make estimates and assumptions when preparing financial reports. The pandemic caused by coronavirus has affected the groups business. Product and service portfolio was developed, and the number of personnel and business operations were adapted to correspond to the transformed operating environment in 2020. The business has bound more working capital because the product portfolio was expanded. Due to the market change, the valuation of inventories and trade receivables have been monitored more closely than before. The credit loss risk is estimated to have increased from earlier. The group has estimated that the credit loss risk has increased. Although these estimates and assumptions are based on the management's best knowledge of today, the outcome may differ from the estimated values presented in the financial statements.
The Group has no knowledge of any significant events after the end of the reporting period that would have had a material impact on this report in any other way that has already been presented in this financial report.
All figures in the tables are presented as thousands of euros and have been rounded to the nearest thousand euros.
The information presented in this financial report has not been audited.
This report has been translated from the Finnish financial report. In case of any differences, the Finnish financial report is the official one.
2. CHANGES IN GROUP STRUCTURE
Mergers
Torkkelin Paperi, a subsidiary selling office supplies and services in Finland, was merged to its parent company Wulff Oy Ab 31.10.2020. The goal for the merge was to attain even more efficient deliveries to customers and savings in personnel and other administrative costs. The property company Fastigheten Ljungby 13 AB merged to Wulff Supplies AB on February 28, 2020.
Acquisitions
There were no business acquisitions during the reporting period in 2020 or 2019.
Wulff invested on the acquisition of the office premises in Finland with EUR 2.2 million on April 15, 2019 and acquiring logistics property in Sweden with EUR 3.4 million on January 9, 2019. The valuation and acquisition of the property company have been prepared according to the IAS 16 Tangible Assets -standard, as the acquisition of the property company does not form a business with the Group's external clients according to the IFRS 3 Business combinations -standard.
Changes in the shares of minority shareholders
There were no changes in the shares of minority shareholders during the reporting period in 2020 or 2019.
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
- SEGMENT INFORMATION
| IV | IV | I-IV | I-IV | |
|---|---|---|---|---|
| EUR 1000 | 2020 | 2019 | 2020 | 2019 |
| Net sales by operating segments | ||||
| Contract Customers Segment | 12 359 | 12 569 | 42 537 | 47 231 |
| Expertise Sales Segment | 3 977 | 2 507 | 16 024 | 9 088 |
| Group Services | 394 | 299 | 1 126 | 1 076 |
| Intersegment reclassifications and eliminations | -1 415 | -293 | -2 145 | -1 051 |
| TOTAL NET SALES | 15 314 | 15 081 | 57 541 | 56 344 |
| Operating profit/loss by segments | ||||
| Contract Customers Segment | 948 | 869 | 1 497 | 1 774 |
| Expertise Sales Segment | 376 | 51 | 2 380 | 165 |
| Group Services and non-allocated items | -174 | -158 | -336 | -369 |
| TOTAL OPERATING PROFIT/LOSS | 1 150 | 763 | 3 541 | 1 570 |
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
- KEY FIGURES
| IV | IV | I-IV | I-IV | |
|---|---|---|---|---|
| EUR 1000 | 2020 | 2019 | 2020 | 2019 |
| Net sales | 15 341 | 15 081 | 57 541 | 56 344 |
| Change in net sales, % | 1.5% | 1.7% | 2.1% | 0.8% |
| Gross profit | 5 345 | 5 477 | 20 748 | 19 825 |
| Gross profit, % | 34.9% | 36.3% | 36.1% | 35.2% |
| EBITDA | 1 528 | 1 148 | 5 204 | 3 067 |
| EBITDA margin, % | 10.0% | 7.6% | 9.0% | 5.4% |
| Operating profit/loss | 1 150 | 763 | 3 541 | 1 570 |
| Operating profit/loss margin, % | 7.5% | 5.1% | 6.2% | 2.8% |
| Profit/Loss before taxes | 1 201 | 703 | 3 101 | 1 194 |
| Profit/Loss before taxes margin, % | 7.8% | 4.7% | 5.4% | 2.1% |
| Net profit/loss for the period attributable to equity holders of the parent company | 914 | 605 | 2 174 | 1 039 |
| Net profit/loss for the period, % | 6.0% | 4.0% | 3.8% | 1.8% |
| Earnings per share, EUR (diluted = non-diluted) | 0.14 | 0.09 | 0.32 | 0.15 |
| Return on equity (ROE), % | 7.0% | 4.9% | 19.1% | 8.5% |
| Return on investment (ROI), % | 5.7% | 4.5% | 15.2% | 7.9% |
| Equity-to-assets ratio at the end of period, % | 41.9% | 39.2% | 41.9% | 39.2% |
| Debt-to-equity ratio at the end of period | 57.3% | 66.2% | 57.3% | 66.2% |
| Equity per share at the end of period, EUR * | 2.00 | 1.76 | 2.00 | 1.76 |
| Investments in non-current assets | 331 | 290 | 719 | 7 359 |
| Investments in non-current assets, % of net sales | 2.2% | 1.9% | 1.2% | 13.1% |
| Treasury shares held by the Group at the end of period | 144 260 | 79 000 | 144 260 | 79 000 |
| Treasury shares, % of total share capital and votes | 2.1% | 1.1% | 2.1% | 1.1% |
| Average number of outstanding shares | 6 763 368 | 6 828 628 | 6 791 043 | 6 828 628 |
| Number of total issued shares at the end of period | 6 907 628 | 6 907 628 | 6 907 628 | 6 907 628 |
| Personnel on average during the period | 180 | 200 | 189 | 198 |
| Personnel at the end of period | 176 | 200 | 176 | 200 |
- Equity attributable to the equity holders of the parent company / Number of shares excluding the acquired own shares
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF
WULFF GROUP PLC
Financial Statements Release | 22.2.2021 at 10 A.M.
CALCULATION OF KEY FIGURES
| Gross profit | Net sales – Materials and services |
|---|---|
| Gross profit-% | (Net sales – Material and services) / Net sales x 100 |
| EBITDA | Operating profit before interest, taxes, depreciation, and amortization |
| EBITDA-% | Operating profit before interest, taxes, depreciation, and amortization / Net sales x 100 |
| Operating margin, EBIT-% | Operating profit / Net sales x 100 |
| Return on Equity (ROE), % | Net profit/loss for the period (total including the non-controlling interest of the result) x 100 |
| Shareholders’ equity total on average during the period (including non-controlling interest) | |
| Return on Investment (ROI), % | (Profit/loss before taxes + Interest expenses) x 100 |
| Balance sheet total - Non-interest-bearing liabilities on average during the period | |
| Equity-to-assets, % | (Shareholders’ equity + Non-controlling interest at the end of the period) x 100 |
| Balance sheet total - Advances received at the end of the period | |
| Net interest-bearing debt | Interest-bearing liabilities - Interest-bearing receivables - Cash and cash equivalents |
| Gearing, % | Net interest-bearing debt x 100 |
| Shareholders’ equity + Non-controlling interest at the end of the period | |
| Earnings per share (EPS), EUR | Net profit attributable to the equity holders of the parent company |
| Share issue adjusted number of outstanding shares on average during the period (without own shares) | |
| Equity per share, EUR | Equity attributable to equity holders of the parent company at the end of the period |
| Share issue-adjusted number of outstanding shares at the end of period (without own shares) | |
| Market capitalisation | Share issue-adjusted number of outstanding shares at the end of the reporting period (without own shares) x the closing price at the end of the reporting period |
Wulff Group Plc | Kilonkartanontie 3 02610 Espoo | tel. +358 300 870 414 | [email protected] | www.wulff.fi
WULFF