Wulff Group Plc’s Financial Statements Release January 1–December 31, 2021
FINANCIAL STATEMENTS RELEASE 21.2.2022 AT 10 A.M.
This is a summary of Wulff Group Plc’s Financial Statements Release January 1–December 31, 2021. The complete report is attached to this stock exchange release as a pdf-file. The report is also available at the website www.wulff.fi.
Sales company records profitable growth and proposes increased dividend
1 January – 31 December 2021 IN BRIEF
- Net sales totalled EUR 27.6 million (15.3), increasing by 80.5%
- EBITDA was EUR 1.4 million (1.5), and comparable EBITDA was EUR 2.1 million (1.5)
- Operating profit was EUR 0.8 million (1.2) and comparable operating profit (EBIT) was EUR 1.5 million (1.2)
- Earnings per share (EPS) was EUR 0.09 (0.14) and comparable earnings per share was EUR 0.19 (0.14)
1 January – 31 December 2021 IN BRIEF
- Net sales totalled EUR 90.4 million (57.5), increasing by 57.2%
- EBITDA was EUR 9.1 million (5.2), 10.1% (9.0) of net sales, and comparable EBITDA was EUR 6.1 million (5.2), 6.7% (9.0) of net sales
- Operating profit was EUR 6.9 million (3.5), and comparable operating profit (EBIT) was EUR 3.9 million (3.5). Comparable operating profit increased by 9.7%
- Earnings per share (EPS) were EUR 0.87 (0.32), and comparable earnings per share were EUR 0.42 (0.32)
- The equity ratio was 38.1 % (41.9)
- The Board of Directors proposes to the Annual General Meeting to be held on 8 April 2022 that a dividend of EUR 0.13 per share will be paid.
- Wulff estimates that net sales in 2022 will increase clearly and comparable operating profit will increase compared to 2021
WULFF GROUP PLC’S CEO ELINA PIENIMÄKI
2021 was a year of agency, action and profitable growth for Wulff. The most significant event of the year was the acquisition of Staples Finland Oy for our group. The acquisition raised us into a clear market leader position in Finland. The acquisition broadened our portfolio of products and services, increased our procurement capacity and brought several highly skilled experts to our team of colleagues. For example, our increased expertise and product offering in the care sector has already secured successful tenders for Wulff! Our results were fantastic, with positive growth in our net sales and profitability. The growth and new customers from the acquisition were especially strong contributors to the sales growth. The growth in profitability is a result of our own actions and choices: in 2021, we found it important to reorganise overlapping functions in Finland as soon as possible after the acquisition. During the pandemic, our strong sales DNA helps us succeed. We have the will to take proactive measures, we’re determined, we recognise the things that we can affect ourselves, and we ensure that we have the power to take action. I want to thank everyone at Wulff, our customers and partners – working with every one of you has made 2021 a fantastic year for work!
GROUP NET SALES AND PERFORMANCE
In January–December 2021, net sales totalled EUR 90.4 million (57.5), and EUR 27.6 million (15.3) million in the last quarter. Net sales increased by 57.1% (2.1) during the whole financial year, and 80.5% (1.5) in the last quarter. The growth in net sales resulted particularly from the acquisition of Wulff Solutions (Staples Finland Oy and EMO Finland Oy) on 3 May 2021 in the Contract Customers Segment. The Expertise Sales Segment’s net sales of hygiene and protective products decreased from the previous financial year, when the demand for products related to the Covid-19 pandemic hit its peak.
A price of EUR 6.0 million was paid for the acquisition of Wulff Solutions. The final acquisition price of EUR 6.0 million is less than the net assets of the company at the acquisition date of May 3, 2021, approximately EUR 10.5 million. The goodwill gain of EUR 4.5 million resulting from the completed acquisition has been recognised in other operating income. This negative goodwill reversal has been treated as a non-recurring item affecting comparability.
In January–December 2021, the gross margin amounted to EUR 28.7 million (20.7), 31.7% (36.1) of net sales, and EUR 8.9 million (5.3) in the last quarter, 32.1% (34.9) of net sales. The gross margin increased by EUR 13.4 million in the entire reporting period and EUR 2.9 million in October–December because of the acquisition of Wulff Solutions on 3 May 2021 The gross margin growth was affected by the increased net sales’ strong focus on the Contract Customers Segment. The gross margin level of the Contract Customers Segment is lower than that of the Expertise Sales Segment. The relative decrease in gross margin from the comparison period was affected by the stabilisation of hygiene product prices to a lower level from the pandemic year 2020.
In January–December 2021, employee benefit expenses amounted to EUR 16.4 million (11.6), 18.1% (20.1) of net sales, and EUR 5.1 million (2.8), 18.6% (18.3) of net sales in the last quarter. Wulff’s personnel increased by 114 employees as a result of the acquisition. Personnel costs relative to net sales decreased. In the 2021 financial year, non-recurring personnel expenses arising from the completion of the acquisition and termination of employment amounted to approximately EUR 0.9 million.
Other operating expenses amounted to EUR 8.3 million (4.6) in January–December 2021, 9.2% (8.0) of net sales, and EUR 2.5 million (1.4), 8.9% (9.3) of net sales in the last quarter. The non-recurring costs related to the completion of the acquisition during the financial year were approximately EUR 0.5 million.
In January–December 2021, EBITDA amounted to EUR 9.1 million (5.2), or 10.1% (9.0) of net sales, and EUR 1.4 million (1.5) in the last quarter, or 5.0% (10.0) of net sales. Goodwill recognition of EUR 4.5 million due to the favourable acquisition during the second quarter and EUR 1.4 million of costs arising from the implementation of the acquisition have been deducted from the comparable results. The reporting period 2020 did not include items affecting comparability. In January–December 2021, comparable EBITDA amounted to EUR 6.1 million (5.2), or 6.7 % (9.0) of net sales, and in October–December, it amounted to EUR 2.1 million (1.5), or 7.6% (10.0) of net sales.
In January–December 2021, operating profit (EBIT) amounted to EUR 6.9 million (3.5), or 7.7 % (6.2) of net sales, and EUR 0.8 million (1.2), or 2.8% (7.5) of net sales in the last quarter. The comparable operating profit (EBIT) for the entire reporting period amounted to EUR 3.9 million (3.5), or 4.3% (6.2) of net sales, and EUR 1.5 million (1.2), or 5.3% (7.5) of net sales in the last quarter. In October–December, the comparable operating profit (EBIT) increased by 9.7% (109.9%).
In January–December 2021, the financial income and expenses totalled (net) EUR -0.4 million (-0.4), including interest expenses of EUR -0.3 million (-0.2), and mainly currency-related other financial items (net) totalled EUR -0.2 million (-0.2). In the fourth quarter, the financial income and expenses (net) totalled EUR -0.1 million (0.1).
In January–December 2021, the result before taxes was EUR 6.6 million (3.1), and EUR 0.7 million (1.2) in the last quarter. The financial year’s comparable result before taxes was EUR 3.5 million (3.1), while the comparable result before taxes was EUR 1.4 million (1.2) in the last quarter.
Net profit in the reporting period was EUR 6.1 million (2.5) in January–December 2021, and EUR 0.6 million (1.0) in the last quarter. In January–December 2021, the comparable profit was EUR 3.1 million (2.5), and EUR 1.3 million (1.0) in the last quarter.
Earnings per share (EPS) were EUR 0.87 (0.32) in January–December 2021, and EUR 0.09 (0.14) in the last quarter. Comparable earnings per share (EPS) for the entire reporting period were EUR 0.42 (0.32), and EUR 0.19 (0.14) in the last quarter.
KEY FIGURES
| IV | IV | I-IV | I-IV | |
| EUR 1000 | 2021 | 2020 | 2021 | 2020 |
| Net sales | 27 637 | 15 341 | 90 424 | 57 541 |
| Change in net sales, % | 80.5 % | 1.5% | 57.1 % | 2.1% |
| Gross profit | 8 879 | 5 345 | 28 685 | 20 748 |
| Gross profit, % | 32.1 % | 34.9% | 31.7 % | 36.1% |
| EBITDA | 1 390 | 1 528 | 9 128 | 5 204 |
| EBITDA margin, % | 5.0 % | 10.0% | 10.1 % | 9.0% |
| Comparable EBITDA | 2 092 | 1 528 | 6 073 | 5 204 |
| Comparable EBITDA margin, % | 7.6 % | 10.0% | 6.7 % | 9.0% |
| Operating profit/loss | 773 | 1 150 | 6 940 | 3 541 |
| Operating profit/loss margin, % | 2.8 % | 7.5% | 7.7 % | 6.2% |
| Comparable operating profit/loss | 1 475 | 1 150 | 3 885 | 3 541 |
| Comparable perating profit/loss margin, % | 5.3 % | 7.5% | 4.3 % | 6.2% |
| Profit/Loss before taxes | 695 | 1 201 | 6 552 | 3 101 |
| Profit/Loss before taxes margin, % | 2.5 % | 7.8% | 7.2 % | 5.4% |
| Comparable profit/Loss before taxes | 1 397 | 1 201 | 3 497 | 3 101 |
| Comparable profit/Loss before taxes margin, % | 5.1 % | 7.8% | 3.9 % | 5.4% |
| Net profit/loss for the period attributable to equityholders of the parent company | 604 | 914 | 5 896 | 2 174 |
| Net profit/loss for the period, % | 2.2 % | 6.0% | 6.5 % | 3.8% |
| Comparable net profit/loss for the period attributable to equity holders of the parent company | 1 306 | 914 | 2 841 | 2 174 |
| Comparable net profit/loss for the period, % | 4.7 % | 6.0% | 3.1 % | 3.8% |
| Earnings per share, EUR (diluted = non-diluted) | 0.09 | 0.14 | 0.87 | 0.32 |
| Comparable earnings per share, EUR (diluted = non-diluted) | 0.19 | 0.14 | 0.42 | 0.32 |
| Return on equity (ROE), % | 3.0 % | 7.0% | 36.3 % | 19.1% |
| Return on investment (ROI), % | 3.2 % | 5.7% | 25.0 % | 15.2% |
| Equity-to-assets ratio at the end of period, % | 38.1 % | 41.9% | 38.1 % | 41.9% |
| Debt-to-equity ratio at the end of period | 62.1 % | 57.3% | 62.1 % | 57.3% |
| Equity per share at the end of period, EUR * | 2.73 | 2.00 | 2.73 | 2.00 |
| Investments in non-current assets | 420 | 331 | 1 388 | 719 |
| Investments in non-current assets, % of net sales | 1.5 % | 2.2% | 1.5 % | 1.2% |
| Treasury shares held by the Group at the end ofperiod | 137 260 | 144 260 | 137 260 | 144 260 |
| Treasury shares, % of total share capital and votes | 2.0% | 2.1% | 2.0% | 2.1% |
| Average number of outstanding shares | 6 770 368 | 6 763 368 | 6 769 352 | 6 791 043 |
| 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 | 291 | 180 | 248 | 189 |
| Personnel at the end of period | 278 | 176 | 278 | 176 |
* Equity attributable to the equity holders of the parent company / Number of shares excluding the acquired own shares
RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
General economic and market developments as well as the employment rate have a significant impact on the demand for workplace products and services. The general uncertainty in the global economy also impacts Wulff's operations. The effects of the coronavirus pandemic and the restrictions in place to contain an mitigate the virus have a broad impact on the needs of both the global and local economy and customers. In addition, megatrends in the global economy, such as digitalization and responsibility, are affecting market change. There are both risks and opportunities involved in developing a range of products and services in line with changing markets and needs. Typical business risks include the successful implementation of Wulff's strategy, such as the integration of operations from business acquisitions, 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.
EVENTS AFTER THE FINANCIAL YEAR
Wulff Group Plc signed an agreement of sale on 4 January 2022 through which Wulff Group Plc acquired the share capital of Carpentum Oy. The transaction entered into force on the day of the agreement’s signing. Of the total purchase price of EUR 0.9 million, EUR 0.5 million was paid in cash, and the remaining EUR 0.4 million will be paid by transferring 82,488 of Wulff’s own shares to the seller of Carpentum Oy.
On January 17, 2022, Wulff Group Plc announced a change in the Group Executive Board. Elina Hanén, CFO and member of the Executive Board, resigned. The Group's CFO and member of the Executive Board will be Atte Ailio, M.Sc.Econ.
BOARD OF DIRECTORS’ PROPOSAL FOR THE ANNUAL RESULT
The Group’s parent company Wulff Group Plc’s distributable funds totalled EUR 1.7 million (1.4). The Group’s net result attributable to the parent company shareholders for the financial year was EUR 5.9 million, or EUR 0.87 per share (EUR 0.32 per share). The Board of Directors proposes to the Annual General Meeting to be held on 8 April 2022 that a dividend of EUR 0.13 per share be paid for the financial year 2021, totalling EUR 0.9 million, and the remaining distributable funds be transferred in retained earnings in the shareholders’ equity.
STRATEGY
On 9 December 2021, Wulff Group Plc’s Board of Directors approved an updated strategy and medium-term targets for the company for 2022–2026. Profitable growth in the current business operations is at the heart of the strategy, which will be accelerated through acquisitions.
The company’s goal is to be the market leader for workplace products and services, and the most recommended and responsible partner in the sector – making a better world, one workplace at a time. The foundation of the growth strategy is an expansion of the product and service portfolio, and acquisitions in the Nordic countries.
The new medium-term financial targets approved by Wulff Group Plc’s Board of Directors seek to double net sales, reaching net sales of EUR 200 million by 2026:
• average net sales growth of 15–20% per year;
• growth of comparable operating profit percentage; and
• increasing dividend per share.
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 knowledge 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. Digitalization brings new ways for an already 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: is the environment treated as a resource or is the goal to improve the state of the environment. Future success is strongly built on these themes and their importance is growing in business and consumer decision-making. Wulff has chosen responsibility, particularly positive climate action and increasing equality as important elements of its strategy.
Demand for products is significantly affected by general economic and market developments as well as the employment rate. Before the Covid-19 pandemic, the market for workplace products and services in the Nordic countries had remained stable for several years. Wulff estimates that the overall market for workplace products and services will remain stable, despite rapid changes in work environments. As vaccination rates increase, protective products will no longer be essential, as they were during the breakout and spreading of the pandemic. However, safe encounters will continue to be important. Wulff expects demand for hygiene, cleaning, cleaning, and protection products to remain at a good level despite the change. At the same time, the Covid-19 pandemic has brought lasting changes to how we work; the growth of multi-local teleworking has increased the number of workstations and the demand for products needed at workstations. Demand for IT supplies, printing products and traditional office supplies is expected to stabilize at pre-pandemic levels in the near future. This is due to the partial return to work and the increased number of new workstations created by the pandemic-driven change in working life in homes and leisure homes. The Group’s net sales and operating profit are affected by the trends of the international convention services industry, as the industry is gradually recovering from the Covid-19 pandemic. Demand for Wulff Entre’s traditional Premium Exhibition services is recovering as the industry reopens, and the trends of the Covid-19 pandemic are affecting the amount of market activity taking place.
The reorganisation of Wulff’s contract sales organisation in Finland along with the cooperation negotiations conducted with Wulff Oy Ab and Wulff Solutions Oy (previously Staples Finland Oy) in August–September caused functions in sales, administration and support functions to be merged. As a result of the cooperation negotiations, the company will achieve annual cost savings of approximately EUR 1.9 million in personnel costs. With the implemented and planned restructuring measures such as the consolidation of information systems, logistical and operational processes, and facility changes, Wulff expects to achieve total annual cost synergies of approximately EUR 3 million in stages. A significant portion of these cost synergies will already be realised in 2022.
Wulff aims to grow profitably, and it has the continuing ability to be a more active player in M&A than its competitors.
Wulff estimates that net sales in 2022 will increase clearly and comparable operating profit will increase compared to 2021.
WULFF GROUP PLC’S FINANCIAL REPORTING AND ANNUAL GENERAL MEETING 2022
Wulff Group Plc will release the following financial reports in 2022:
Annual Report 2021 Thursday March 10, 2022
Interim Report January-March 2022 Monday April 25, 2022
Half-Year Report January-June 2022 Monday July 25, 2022
Interim Report January-September 2022 Monday October 24, 2022
Wulff Group Plc’s Annual General Meeting will be held on Friday April 8, 2022. A separate notice to the Annual General Meeting will be published prior to the meeting.
In Espoo on February 21, 2022
WULFF GROUP PLC
BOARD OF DIRECTORS
Further information:
CEO Elina Pienimäki
tel. +358 40 647 1444
e-mail: elina.pienimaki@wulff.fi
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 may be. More responsible, more comfortable, healthier, safer, more enjoyable, more active, and more diverse? How would you like to improve your working day and environment? Wulff has the solution. We offer our customers hygiene- and protective products, air purifiers, office supplies, facility management products, catering solutions, IT supplies, ergonomics, first aid, and innovative products for worksites. Customers can also acquire international exhibition services and solutions for remote encounters from Wulff. As the clear market leader in Finland, we are constantly developing our offering and, according to Taloustutkimus, we offer the best customer service in the industry. In addition to Finland, Wulff operates in Sweden, Norway, and Denmark. More information at wulff.fi
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