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Wulff Group Plc’s Interim Report for January 1 – March 31, 2022

This is a summary of Wulff Group Plc’s Interim Report for January-March 2022. Wulff Group’s Interim Report as a whole is attached as a PDF file to this stock exchange release and it is also available on the company’s website www.wulff.fi.

The best Q1 in Wulff’s history: net sales increased by 67,2% and operating profit doubled

1.1.-31.3.2022 BRIEFLY

  • Net sales totalled EUR 25.6 million (15.3), increased by 67.2%.
  • EBITDA and comparable EBITDA were EUR 1.8 million (0.9).
  • Operating profit and comparable operating profit (EBIT) amounted to EUR 1.2 million (0.6).
  • Earnings and comparable earnings per share (EPS) were EUR 0.13 (0.04).
  • Equity-to-assets ratio was 39.8% (43.1).
  • Kari Juutilainen, Lauri Sipponen, Jussi Vienola, and Kristina Vienola were elected as members to the Board of Directors. Kari Juutilainen was elected as the Chairman of the Board by the Board of Directors.
  • The outlook remains the same; Wulff estimates that net sales in 2022 will increase clearly and comparable operating profit will increase compared to 2021.

WULFF GROUP’S CEO ELINA PIENIMÄKI

It’s been great to start this year and Wulff’s new strategy period 2022-2026 with great results, achieved together with skilled Wulff employees, partners and customers. We made the best Q1 result in our history. I thank our staff for their commitment, adaptation and change management: a number of projects are underway, for example in connection with the acquisition of Staples Finland in the spring of 2021 and the merger of organizations. All of those are progressing as planned and we have already achieved significant synergies. It is a great pleasure to work with people who make our values a reality in their job, every day.

The return to workplaces and the new model of doing work, where work is done both in shared environment and remotely, has begun. For us, it brings new opportunities to serve our customers more widely yet again. Wulff's future is bright: in a revolutionary working life, our multichannel sales make us a competitive and a winning team in the market. We serve in person and locally in the Nordic countries, supporting our operations with continuously advancing webservices and with the most comprehensive and diverse range of products and services in the field. Our new remote meeting solutions have been well received in the exhibition markets. Also, the traditional fairs and international exhibitions are also lining up for the calendar again. I believe we will continue to succeed in the future thanks to our strong sales DNA as well as our responsible and acquisition-driven strategy.

GROUP’S NET SALES AND RESULT PERFORMANCE

In January-March 2022 net sales totalled EUR 25.6 million (15.3). Net sales increased by 67.2% (4.0). The growth in net sales resulted particularly from the acquisition of Wulff Solutions (Staples Finland Oy and EMO Finland Oy) on May 3, 2021, as well as due to the strong development in the Contract Customers Segment in the Nordic countries. The Expertise Sales Segment’s net sales of hygiene and protective products decreased from the previous financial year, when the vivid demand for products related to the Covid-19 prevention prevailed.

The gross margin amounted to EUR 8.2 million (5.3) being 32.0% (34.8) of net sales in January-March 2022. The acquisition of Wulff Solutions on 3 May 2021 contributed EUR 2.6 million to the gross margin. The proportional gross margin development was affected by the increase in share of net sales by the Contract Customers Segment. Proportional gross margins of the Contract Customers Segment is lower than that of the Expertise Sales Segment. The impact of broadening price inflation was diminutive in January-March 2022.

In January-March 2022 employee expenses amounted to EUR 4.5 million (3.3) being 17.4% (21.3) of net sales. Wulff’s personnel increased by 114 employees because of the acquisition of Wulff Solutions. Personnel costs in proportion to net sales decreased.

Other operating expenses amounted to EUR 2.0 million (1.2) in January-March 2022 being 7.7% (7.9) of net sales. The group used fewer external services than in the comparison period.

In January-March 2022 EBITDA and the comparable EBITDA amounted to EUR 1.8 million (0.9), 7.0% (6.1) of net sales.

The operating profit (EBIT) and the comparable operating profit (EBIT) amounted to EUR 1.2 million (0.6), 4.7% (3.7) of net sales. The first quarters of 2022 and 2021 did not include items affecting comparability.

In January-March 2022 the financial income and expenses totalled (net) EUR -0.2 million (-0.1) including interest expenses of EUR -0.2 million (-0.0) and mainly currency-related other financial items and bank expenses EUR -0.1 million (-0.1). The financial expenses were EUR 0.1 million higher than in the comparison period due to interest expenses.

In January-March 2022 the result before taxes was EUR 1.0 million (0.5), and the net profit EUR 0.9 million (0.4).

Earnings per share and comparable earnings-per-share (EPS) were EUR 0.13 (0.04) in January-March 2022.

KEY FIGURES
 

I I I-IV
EUR 1 000 2022 2021 2021
Net sales 25 610 15 314 90 424
Change in net sales, % 67.2% 4.0% 57.1 %
Gross profit 8 191 5 327 28 685
Gross profit, % 32.0% 34.8% 31.7 %
EBITDA 1 799 929 9 128
EBITDA margin, % 7.0% 6.1% 10.1 %
Comparable EBITDA 1 799 929 6 073
Comparable EBITDA margin, % 7.0% 6.1% 6.7 %
Operating profit/loss 1 207 559 6 940
Operating profit/loss margin, % 4.7% 3.7% 7.7 %
Comparable operating profit/loss 1 207 559 3 885
Comparable perating profit/loss margin, % 4.7% 3.7% 4.3 %
Profit/Loss before taxes 1 001 476 6 552
Profit/Loss before taxes margin, % 3.9% 3.1% 7.2 %
Comparable profit/Loss before taxes 1 001 476 3 497
Comparable profit/Loss before taxes margin, % 3.9% 3.1% 3.9 %
Net profit/loss for the period attributable to equityholders of the parent company 914 263 5 896
Net profit/loss for the period, % 3.6% 1.7% 6.5 %
Comparable net profit/loss for the period attributable to equity holders of the parent company 914 263 2 841
Comparable net profit/loss for the period, % 3.6% 1.7% 3.1 %
Earnings per share, EUR (diluted = non-diluted) 0.13 0.04 0.87
Comparable earnings per share, EUR (diluted = non-diluted) 0.13 0.04 0.42
Return on equity (ROE), % 4.7% 2.7% 36.3 %
Return on investment (ROI), % 3.5% 2.2% 25.0 %
Equity-to-assets ratio at the end of period, % 39.8% 43.1% 38.1 %
Debt-to-equity ratio at the end of period 64.1% 59.1% 62.1 %
Equity per share at the end of period, EUR * 2.89 2.04 2.73
Investments in non-current assets 512 228 1 388
Investments in non-current assets, % of net sales 2.0% 1.5% 1.5 %
Treasury shares held by the Group at the end ofperiod 44 812 137 260 137 260
Treasury shares, % of total share capital and votes 0.6% 2.0% 2.0%
Average number of outstanding shares 6 857 623 6 766 246 6 769 352
Number of total issued shares at the end of period 6 907 628 6 907 628 6 907 628
Personnel on average during the period 288 177 248
Personnel at the end of period 285 179 278

* 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 recent inflationary development has intensified and broadened due to. e.g. measures taken to prevent the pandemic as well as Russia’s assault to Ukraine and the trade sanctions that followed. The general uncertainty in the global economy also impacts Wulff's operations. The effects of the coronavirus pandemic and the restrictions in place to contain and mitigate the virus have a broad impact on the needs of both the global and local economy and customers. In addition, megatrends in the global economy, such as digitalization and responsibility, are affecting market change. There are both risks, and opportunities involved in developing a range of products and services in line with changing markets and needs. Typical business risks include the successful implementation of Wulff's 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.

SUBSEQUENT EVENTS

The Group has not had any significant subsequent events.

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, increasing equality and decent work and economic growth (UN Sustainable Development Goals 2030) 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 are no longer 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, 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 development of the international exhibition 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 development of the Covid-19 pandemic are affecting the amount of market activity taking place.

The ongoing geopolitical crisis, the Russian invasion of Ukraine and the coercive measures against Russia do not directly affect Wulff's activities, as Wulff has not had any activities or partnerships in the countries involved in the crisis. The crisis is having an impact on global supply chains, the changes to which may also indirectly affect Wulff's industries. Changes into global supply chains have intensified and broadened the recent price inflation development. Continued inflation makes it necessary to secure the development of gross margin; However, Wulff estimates that the effects of inflation as a whole will remain moderate. The uncertainty concerning the intensity and broadening of inflation set a restraint into predictability.

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

Wulff Group Plc will release the following financial reports in 2022:

Half-Year Report January-June 2022                Monday July 25, 2022
Interim Report January-September 2022            Monday October 24, 2022

In Espoo on April 25, 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. We enable better and more sustainable work environments and a perfect working day. We do the workplace - where ever it is today. At Wulff you will find e.g. hygiene, protection and safety products, air purification, workplace products, coffee accessories, property and cleaning products, office and IT supplies, ergonomics, first aid, and innovative products for construction sites. Our range also includes high-quality Canon printing and document management services and, most recently, financial management services. Customers can also acquire international exhibition services and solutions for remote encounters from us. As a clear domestic market leader, we are constantly developing our range and, according to Taloustutkimus research, we offer the best customer service in the industry (shared number one, TEP 2021). In addition to Finland, Wulff Group operates in Sweden, Norway and Denmark. Read more at wulff.fi/en.

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