Wulff-Yhtiöt Oyj
Wulff Group Plc’s Interim Report for January 1 – September 30, 2013
Wulff-Yhtiöt Oyj 05.11.2013 08:00 --------------------------------------------------------------------------- Result Impacted by Goodwill Impairment together with Difficult Market Situation WULFF GROUP PLC INTERIM REPORT November 5, 2013 at 9:00 A.M. WULFF GROUP PLC'S INTERIM REPORT FOR JANUARY 1 - SEPTEMBER 30, 2013 Result Impacted by Goodwill Impairment together with Difficult Market Situation -- Net sales totalled EUR 61.0 million (EUR 65.1 million) in January-September and EUR 17.5 million (EUR 19.8 million) in the third quarter. Compared to 2012, net sales decreased by six percentages cumulatively and 12 percentages in the third quarter. -- In January-September, EBITDA was EUR -0.33 million (EUR 1.31 million) being -0.5 percentages (2.0 %) of net sales. In the third quarter, EBITDA was EUR -0.25 million (EUR 0.47 million) being -1.4 percentages (2.4 %) of net sales. -- The operating result was also impacted by an impairment of EUR 0.6 million in the Group's business gifts' goodwill. The reported operating result including the impairment was EUR -1.79 million (EUR 0.5 million) in January-September and EUR -1.14 million (EUR 0.17 million) in the third quarter. -- Earnings per share (EPS) were EUR -0.27 (EUR 0.05) in January-September and EUR -0.16 (EUR 0.02) in the third quarter. -- Equity-to-assets ratio was 40.2 percentages (December 31, 2012: 44.3 %). -- Equity per share amounted to EUR 2.14 (December 31, 2012: EUR 2.51). -- With the co-operational personnel negotiations held in October-November 2013, Wulff aims to gain savings of EUR 1.0 million which are estimated to impact the result mainly in 2014. GROUP'S NET SALES AND RESULT PERFORMANCE Net sales totalled EUR 61.0 million (EUR 65.1 million) in January-September and EUR 17.5 million (EUR 19.8 million) in the third quarter. Compared to 2012, net sales decreased by six percentages cumulatively and 12 percentages in the third quarter. In January-September, EBITDA was EUR -0.33 million (EUR 1.31 million) being -0.5 percentages (2.0 %) of net sales. In the third quarter, EBITDA was EUR -0.25 million (EUR 0.47 million) being -1.4 percentages (2.4 %) of net sales. The general economic situation remained difficult which impacted the demand in the office supply markets. The operating result was also impacted by an impairment of EUR 0.6 million in the Group's business gifts' goodwill. In January-September, operating result (EBIT) excluding the non-recurring goodwill impairment of EUR 0.6 million totalled EUR -1.16 million (EUR 0.50 million) being -1.9 percentages (0.8 %) of net sales. In the third quarter, operating result (EBIT) excluding the impairment was EUR -0.51 million (EUR 0.17 million) being -2.9 percentages (0.9 %) of net sales. The reported operating result including the impairment was EUR -1.79 million (EUR 0.5 million) in January-September and EUR -1.14 million (EUR 0.17 million) in the third quarter. The Group continues to review its expense structure and optimise its operations to improve the profitability of its businesses. Wulff Group's CEO Heikki Vienola: 'We continue to increase our operational efficiency in order to improve our profitability. It is essential to react to the changes in the economic and financial situations as quickly as possible. We have renewed and reduced our organization together with cost-cutting. Despite our actions the Group's operating result will be negative in 2013. The cost-saving actions of 2013 are estimated to affect our result mainly in 2014. In order to ensure our competitiveness and ability to be the pioneer in our industry also in the future, we need to focus on issues which are most valuable to our customers. Customer focus has been in our values already for more than 120 years - and we will also continue that way in the future. Success will be built by developing our operations with long-term partnerships together with our customers. Even though the operational environment is challenging and we do not expect the markets to increase next year yet, we have focused in personal customer service: we launched our international fair service sales in Sweden, Wulff Store Helsinki moved into modern and well-functioning premises along good traffic routes in Konala Helsinki, and the new Wulff Kuopio office serves well the Group's all customers.' In January-September the financial income and expenses totalled (net) EUR -0.36 million (EUR -0.03 million) including dividend income of EUR 0.01 million (EUR 0.02 million), interest expenses of EUR 0.15 million (EUR 0.20 million) and mainly currency-related other financial items (net) EUR -0.22 million (EUR +0.15 million). In the third quarter the financial income and expenses totalled (net) EUR -0.07 million (EUR 0.01 million). The result before taxes was EUR -2.15 million (EUR 0.47 million) in January-September and EUR -1.21 million (EUR 0.18 million) in the third quarter. The net result after taxes was EUR -1.80 million (EUR 0.40 million) in January-September and EUR -1.09 million (EUR 0.17 million) in the third quarter. Earnings per share (EPS) were EUR -0.27 (EUR 0.05) in January-September and EUR -0.16 (EUR 0.02) in the third quarter. Return on investment (ROI) was -7.9 percentages (2.5 %) in January-September and -4.6 percentages (3.4 %) in the third quarter. Return on equity (ROE) was -11.0 percentages (2.3 %) in January-September and -7.0 percentages (4.7 %) in the third quarter. CONTRACT CUSTOMERS DIVISION The Contract Customers Division is the customer's comprehensive partner in the field of office supplies, IT supplies, business and promotional gifts as well as international fair services. The division's net sales totalled EUR 52.3 million (EUR 55.1 million) in January-September and EUR 15.6 million (EUR 17.1 million) in the third quarter. The general economic situation and the decrease in the products' demand have led to the decrease in net sales. The division's operating result was also impacted by an impairment of EUR 0.6 million in the Group's business gifts' goodwill. Operating result (EBIT) excluding the non-recurring goodwill impairment of EUR 0.6 million totalled EUR -0.18 million (EUR 1.29 million) in January-September and EUR -0.16 million (EUR 0.43 million) in the third quarter. The reported operating result including the impairment was EUR -0.81 million (EUR 1.29 million) in January-September and EUR -0.79 million (EUR 0.43 million) in the third quarter. International fair services are an even more significant part of Wulff's business. In spring 2013 Wulff Entre established its fair service sales in the Swedish markets by opening its own operations in the Southern Sweden. Wulff Entre's investments in sales and its development have resulted in both stronger customer relationships and an increase in clientele in Finland, Russia and Germany. Also in Sweden Wulff Entre has won new customers who have already given good feedback on Wulff Entre's services and know-how. In 2013 Wulff Entre exports Finnish companies' know-how to more than 30 countries. Wulff Entre is the market leader in its field in Finland and the customers have had a solid trust in Wulff Entre's ability to find the right international venues for over 90 years already. The net sales and profitability of Wulff's Scandinavian operator Wulff Supplies AB decreased during the reporting period. Today almost 50 percent of the Group's net sales come from Scandinavia. Office supply markets have decreased in Finland and also some in Scandinavia. Wulff's position in the market is strong. Wulff Supplies serves the Group's Scandinavian and pan-Nordic customers. The Group's web store Wulffinkulma.fi has increased its net sales. According to the strategy, Wulff has developed the Wulff brand, its sales channels and its whole service range to be more versatile and ecological. Wulff stores serve locally small and mid-sized corporate customers, entrepreneurs and consumers. In summer 2013 Wulff Helsinki store moved to new premises in Konala, Helsinki. The new store is located along excellent traffic routes in a business centre which enables to attract plenty of new customers. This year for the first time, the stores exhibit the Group's entire product range, Wulff's Green products and recycling centres. The stores exhibit also seasonal business gifts. Traditionally the Contract Customers Division's result is affected by the cycles of the business and promotional gift market: the majority of the products are delivered and the majority of the annual profit is generated in the second and the last quarter of the year. The markets have not improved as expected and the demand for Wulff's products has decreased from last year. In September 2013, Wulff reports an impairment of EUR 0.6 million from its business gift goodwill which decreases down to EUR 0.7 million. As the industry pioneer and the most professional partner Wulff believes to have a good position to serve its customers as broadly and versatile as possible when the markets start turning up again. In a poor general economic situation companies search for cost saving solutions and Wulff is the partner capable of offering such savings. DIRECT SALES DIVISION The Direct Sales Division aims to improve its customers' daily operations with innovative products as well as the industry's most professional personal and local service. In January-September the division's net sales totalled EUR 8.7 million (EUR 10.0 million) and operating result was EUR -0.3 (EUR -0.1 million). In the third quarter the net sales totalled EUR 1.8 million (EUR 2.6 million) and operating result was EUR -0.1 million (EUR -0.05 million). The Division's profitability is improved by concentrating on profitable product and service fields and by optimising the operations' efficiency. Wulff invests strongly in the development of the product and service range and aims to increase the synergy of the purchasing operations by group-wide competitive bidding and cooperation. Unifying the sales support systems improve the sales operations. Wulff's sales growth is fuelled most importantly by the sales personnel. Successful recruiting affects especially the performance of Direct Sales. Wulff is prepared to employ new sales talents also in the times of economic slowdown. Wulff's own introduction and training programmes ensure that every sales person gets both a comprehensive starting training and further education on how to improve one's own know-how. FINANCING, INVESTMENTS AND FINANCIAL POSITION The cash flow from operating activities was EUR -2.8 million (EUR -0.6 million) in January-September and EUR -1.2 million (EUR -0.9 million) in the third quarter. Typically in this industry the result and cash flow are generated in the last quarter. For its fixed asset investments the Group paid a net of EUR 0.7 million (EUR 0.6 million) in January-September and EUR 0.1 million (EUR 0.2 million) in the third quarter. In January-September the Group raised loans of net EUR 2.86 million (EUR 0.27 million, net) of which EUR 1.75 million (EUR 0.8 million net) during the third quarter. In general the Group's cash balance decreased by EUR 1.3 million in January-September (EUR -1.3 million). The Group's bank and cash funds totalled EUR 2.7 million in the beginning of the year and EUR 1.4 million in the end of the reporting period. In the end of September 2013 the Group's equity-to-assets ratio was 40.2 percentages (December 31, 2012: 44.3 %). Equity attributable to the equity holders of the parent company amounted to EUR 2.14 per share (December 31, 2012: EUR 2.51). SHARES AND SHARE CAPITAL Wulff Group Plc's share is listed on NASDAQ OMX Helsinki in the Small Cap segment under the Industrials sector. The company's trading code is WUF1V. In the end of the reporting period the share was valued at EUR 1.64 (EUR 2.00) and the market capitalization of the outstanding shares totalled EUR 10.7 million (EUR 13.0 million). In January-September 2013 no own shares were reacquired. As a part of Wulff Group's key personnel's share-based incentive plan introduced in February 2011, the Board of Directors decided in May 2013 to grant 6,000 treasury shares without compensation to the Group's key person who may not transfer the shares during a restriction period of two years. In the end of September 2013, the Group held 79,000 (September 30, 2012: 85,000) own shares representing 1.2 percentage (1.3 %) of the total number and voting rights of Wulff shares. According to the Annual General Meeting's authorisation on April 10, 2013, the Board of Directors decided in its organizing meeting to continue the acquisition of its own shares, by acquiring a maximum of 300.000 own shares by April 30, 2014. PERSONNEL In January-September 2013 the Group's personnel totalled 319 (345) employees on average. In the end of September the Group had 311 (330) employees of which 117 (132) persons were employed in Sweden, Norway, Denmark or Estonia. The majority, approximately 60 percentages, of the Group's personnel works in sales operations and approximately 40 percentages of the employees work in sales support, logistics and administration. The personnel consists approximately half-and-half of men and women. Wulff's themes for 2013 are 'Professional care for customers and personnel alike' and 'Becoming the masters in giving and utilizing feedback'. The coaching-style leadership and the '100-percent-responsibility' working attitude have a significant role in building a well-being, developing and successful organization. Wulff's culture means that everyone understands the significance of their own work: each and everyone at Wulff can influence a customer's unique Wulff experience in a positive way. RISKS AND UNCERTAINTIES IN THE NEAR FUTURE The demand for office supplies is still affected by the organizations' personnel lay-offs and cost-saving initiatives made during the economic downturn. The general uncertainty may still continue which will most likely affect the ordering behaviour of some corporate clients. Although the business gifts are seen increasingly as a part of the corporate communications as a whole and they are utilized also in the off-season, some cost savings may be sought after by decreasing the investments in the brand promotion. The ongoing economic uncertainties impact especially the demand for business and promotional gifts. During the uncertain economic periods, the corporations may also minimize attending fairs. 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 financial position. In case of long-term economic slowdown and poor financial performance it is even more important to ensure the adequacy of financing. The group management have started finance agreement negotiations with the banks which have given loans to Wulff. MARKET SITUATION AND FUTURE OUTLOOK Wulff is the most significant Nordic player in its industry. Wulff's mission is to help its corporate customers to succeed in their own business by providing them with leading-edge products and services in a way best suitable to them. The markets have been consolidating in the past few years and the Nordic markets are expected to consolidate in the future as well. Wulff is prepared to carry out new strategic acquisitions. The markets have not improved as expected and the demand for Wulff's products has decreased from last year. Based on the Group management's forecast the operating result will be negative in 2013. Typically in the industry, the annual profit is made in the last quarter of the year. Also in 2013 the last quarter will be the strongest. Wulff continues to improve the efficiency of its operations along the continuous renewal in order to increase the Group's profitability and to reach its long-term financial targets. With the co-operational personnel negotiations held in October-November 2013, Wulff aims to gain savings of EUR 1.0 million which are estimated to impact the result mainly in 2014. The Group focuses strongly on sales activities, the development of its sales operations and new solutions offered to customers. Examples of new products and services, which have already received good customer feedback, are LED lights and lighting solutions as well as acoustic panels improving work environment, personnel well-being and ecological objectives. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) INCOME STATEMENT III III I-III I-III I-IV EUR 1000 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Net sales 17 474 19 768 60 958 65 133 90 238 Other operating income 17 25 72 147 200 Materials and services -11 791 -13 054 -40 243 -42 016 -58 260 Employee benefit expenses -3 573 -3 829 -13 048 -13 767 -18 755 Other operating expenses -2 372 -2 440 -8 064 -8 188 -11 155 -------------------------------------------------------------------------------- EBITDA -246 470 -325 1 310 2 269 Depreciation and amortization -266 -296 -836 -814 -1 136 Impairment -629 0 -629 0 0 -------------------------------------------------------------------------------- Operating profit/loss -1 141 174 -1 790 496 1 132 Financial income 22 126 85 252 272 Financial expenses -92 -116 -448 -283 -413 -------------------------------------------------------------------------------- Profit/Loss before taxes -1 212 184 -2 153 465 990 Income taxes 126 -13 350 -67 -100 ================================================================================ Net profit/loss for the period -1 086 171 -1 802 398 890 Attributable to: Equity holders of the parent -1 030 150 -1 761 348 717 company Non-controlling interest -55 21 -41 49 173 Earnings per share for profit attributable to the equity holders of the parent company: Earnings per share, EUR -0,16 0,02 -0,27 0,05 0,11 (diluted = non-diluted) STATEMENT OF COMPREHENSIVE INCOME III III I-III I-III I-IV EUR 1000 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Net profit/loss for the period -1 086 171 -1 802 398 890 Other comprehensive income which may be reclassified to profit or loss subsequently (net of tax) Change in translation differences 15 139 -107 228 181 Fair value changes on -8 1 -40 -4 -22 available-for-sale investments Total other comprehensive income 7 140 -146 224 159 -------------------------------------------------------------------------------- Total comprehensive income for the -1 079 311 -1 949 622 1 049 period Total comprehensive income attributable to: Equity holders of the parent -1 029 259 -1 886 510 839 company Non-controlling interest -50 52 -63 111 210 STATEMENT OF FINANCIAL POSITION Sept 30 Sept 30 Dec 31 EUR 1000 2013 2012 2012 -------------------------------------------------------------------------------- ASSETS Non-current assets Goodwill 8 883 9 574 9 546 Other intangible assets 1 285 1 310 1 308 Property, plant and equipment 1 687 2 030 1 890 Non-current financial assets Interest-bearing financial assets 35 69 43 Non-interest-bearing financial assets 266 362 327 Deferred tax assets 2 475 1 850 1 972 -------------------------------------------------------------------------------- Total non-current assets 14 630 15 195 15 085 Current assets Inventories 9 853 10 164 10 236 Current receivables Interest-bearing receivables 21 39 16 Non-interest-bearing receivables 14 053 15 684 13 350 Financial assets recognised at fair value through 3 71 78 profit/loss Cash and cash equivalents 1 407 1 135 2 749 -------------------------------------------------------------------------------- Total current assets 25 337 27 094 26 429 ================================================================================ TOTAL ASSETS 39 967 42 289 41 513 EQUITY AND LIABILITIES Equity Equity attributable to the equity holders of the parent company: Share capital 2 650 2 650 2 650 Share premium fund 7 662 7 662 7 662 Invested unrestricted equity fund 223 223 223 Retained earnings 3 449 5 519 5 849 Non-controlling interest 1 060 1 183 1 283 -------------------------------------------------------------------------------- Total equity 15 044 17 237 17 667 Non-current liabilities Interest-bearing liabilities 5 235 6 417 6 008 Deferred tax liabilities 90 122 102 -------------------------------------------------------------------------------- Total non-current liabilities 5 325 6 539 6 109 Current liabilities Interest-bearing liabilities 5 317 3 397 1 685 Non-interest-bearing liabilities 14 280 15 116 16 052 -------------------------------------------------------------------------------- Total current liabilities 19 598 18 513 17 737 ================================================================================ TOTAL EQUITY AND LIABILITIES 39 967 42 289 41 513 STATEMENT OF CASH FLOW III III I-III I-III I-IV EUR 1000 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Cash flow from operating activities: Cash received from sales 17 967 19 360 60 260 65 728 93 018 Cash received from other operating 6 16 71 38 65 income Cash paid for operating expenses -19 110 -20 165 -62 618 -65 729 -89 063 -------------------------------------------------------------------------------- Cash flow from operating activities -1 137 -790 -2 287 38 4 020 before financial items and income taxes Interest paid -27 -68 -110 -149 -169 Interest received 4 4 23 36 39 Income taxes paid -57 -67 -459 -482 -592 -------------------------------------------------------------------------------- Cash flow from operating activities -1 216 -921 -2 833 -557 3 297 Cash flow from investing activities: Investments in intangible and -179 -254 -745 -771 -946 tangible assets Proceeds from sales of intangible 33 14 86 216 269 and tangible assets Disposal of other non-current 12 investments Loans granted -1 -7 -6 -13 Repayments of loans receivable 3 34 8 8 -------------------------------------------------------------------------------- Cash flow from investing activities -148 -237 -633 -553 -670 Cash flow from financing activities: Dividends paid -632 -531 -531 Dividends received 7 20 20 Payments for subsidiary share -33 -129 -129 acquisitions Payments received for subsidiary 81 81 share disposals Cash paid for (received from) -5 -28 77 -32 -32 short-term investments (net) Withdrawals and repayments of 1 960 1 316 3 850 1 472 -254 short-term loans Withdrawals of long-term loans 355 355 Repayments of long-term loans -212 -512 -990 -1 556 -1 952 -------------------------------------------------------------------------------- Cash flow from financing activities 1 743 776 2 280 -321 -2 443 ================================================================================ Change in cash and cash equivalents 380 -383 -1 187 -1 431 184 Cash and cash equivalents at the 1 056 1 469 2 749 2 464 2 464 beginning of the period Translation difference of cash -28 49 -155 102 101 Cash and cash equivalents at the 1 407 1 135 1 407 1 135 2 749 end of the period STATEMENT OF CHANGES IN EQUITY EUR 1000 Equity attributable to equity holders of the parent company Fund for in vested non Trans Re Non Share re lation tai cont * net pre strict diffe ned rollin g of tax Share mium ed Own ren Earn inte capita fund equity shares ces ings Total rest TOTAL l -------------------------------------------------------------------------------- Equity on 2 650 7 662 223 -283 -116 5 860 15 996 1 198 17 195 Jan 1, 2012 Net 348 348 49 398 profit / loss for the period Other comprehe ns. income*: Change in 166 166 62 228 translat ion diff Fair -4 -4 -4 value changes on available -for-sale investmen ts -------------------------------------------------------------------------------- Comprehen 166 345 510 111 622 sive income * Dividends -457 -457 -78 -535 paid Treasury 11 -11 0 0 share disposal Share- 4 4 4 based payments Changes 0 -48 -48 in ownershi p -------------------------------------------------------------------------------- Equity on 2 650 7 662 223 -272 50 5 741 16 054 1 183 17 237 Sept 30, 2012 Equity on 2 650 7 662 223 -283 -116 5 860 15 996 1 198 17 195 Jan 1, 2012 Net 717 717 173 890 profit / loss for the period Other comprehe ns. income*: Change in 144 144 37 181 translat ion diff Fair -22 -22 -22 value changes on available -for-sale investmen ts -------------------------------------------------------------------------------- Comprehen 144 695 839 210 1 049 sive income * Dividends -457 -457 -77 -534 paid Treasury 11 -11 0 0 share disposal Share- 5 5 5 based payments Changes 0 -48 -48 in ownershi p -------------------------------------------------------------------------------- Equity on 2 650 7 662 223 -272 28 6 093 16 384 1 283 17 667 Dec 31, 2012 Equity on 2 650 7 662 223 -272 28 6 093 16 384 1 283 17 667 Jan 1, 2013 Net -1 761 -1 761 -41 -1 802 profit / loss for the period Other comprehe ns. income*: Change in -85 -85 -21 -107 translat ion diff Fair -40 -40 -40 value changes on available -for-sale investmen ts -------------------------------------------------------------------------------- Comprehen -85 -1 801 -1 886 -63 -1 949 sive income * Dividends -522 -522 -111 -633 paid Treasury 12 -12 0 0 share disposal Share- 8 8 8 based payments Changes 0 -49 -49 in ownershi p -------------------------------------------------------------------------------- Equity on 2 650 7 662 223 -260 -57 3 767 13 985 1 060 15 044 Sept 30, 2013 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEGMENT INFORMATION III III I-III I-III I-IV EUR 1000 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Net sales by operating segments Contract Customers Division 15 640 17 105 52 251 55 058 76 250 Direct Sales Division 1 816 2 573 8 730 10 019 14 023 Group Services 119 255 513 843 1 079 Intersegment eliminations -101 -165 -537 -787 -1 114 ================================================================================ TOTAL NET SALES 17 474 19 768 60 958 65 133 90 238 Operating profit/loss by operating segments Contract Customers business -157 431 -182 1 285 2 041 Goodwill Impairment -629 -629 -------------------------------------------------------------------------------- Contract Customers Division -786 431 -811 1 285 2 041 Direct Sales Division -129 -49 -256 -138 -38 Group Services and non-allocated items -226 -208 -722 -652 -872 ================================================================================ TOTAL OPERATING PROFIT/LOSS -1 141 174 -1 790 496 1 132 KEY FIGURES III III I-III I-III I-IV EUR 1000 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Net sales 17 474 19 768 60 958 65 133 90 238 Change in net sales, % -11,6 % -10,0 % -6,4 % -9,0 % -9,0 % EBITDA -246 470 -325 1 310 2 269 EBITDA margin, % -1,4 % 2,4 % -0,5 % 2,0 % 2,5 % Operating profit/loss (EBIT) -1 141 174 -1 790 496 1 132 Operating profit/loss margin, % -6,5 % 0,9 % -2,9 % 0,8 % 1,3 % Profit/Loss before taxes -1 212 184 -2 153 465 990 Profit/Loss before taxes margin, % -6,9 % 0,9 % -3,5 % 0,7 % 1,1 % Net profit/loss for the period -1 030 150 -1 761 348 717 attributable to equity holders of the parent company Net profit/loss for the period, % -5,9 % 0,8 % -2,9 % 0,5 % 0,8 % Earnings per share, EUR (diluted = -0,16 0,02 -0,27 0,05 0,11 non-diluted) Return on equity (ROE), % -6,97 % 4,69 % -11,02 % 2,31 % 5,11 % Return on investment (ROI), % -4,58 % 3,35 % -7,87 % 2,48 % 4,67 % Equity-to-assets ratio at the end 40,2 % 43,5 % 40,2 % 43,5 % 44,3 % of period, % Debt-to-equity ratio at the end of 60,4 % 49,7 % 60,4 % 49,7 % 27,6 % period Equity per share at the end of 2,14 2,46 2,14 2,46 2,51 period, EUR * Investments in non-current assets 160 233 695 752 972 Investments in non-current assets, 0,9 % 1,2 % 1,1 % 1,2 % 1,1 % % of net sales Treasury shares held by the Group 79 000 85 000 79 000 85 000 85 000 at the end of period Treasury shares, % of total share 1,2 % 1,3 % 1,2 % 1,3 % 1,3 % capital and votes Number of total issued shares at 6607628 6607628 6607628 6607628 6607628 the end of period Personnel on average during the 313 326 319 345 343 period Personnel at the end of period 311 330 311 330 326 * Equity attributable to the equity holders of the parent company / Number of shares excluding the acquired own shares QUARTERLY KEY FIGURES III II I IV III II I EUR 1000 2013 2013 2013 2012 2012 2012 2012 -------------------------------------------------------------------------------- Net sales 17 474 20 743 22 742 25 105 19 768 22 039 23 326 EBITDA -246 -486 407 959 470 364 476 Operating profit/loss -1 141 -769 120 637 174 -524 216 Profit/Loss before taxes -1 212 -1 005 64 525 184 -572 223 Net profit/loss for the -1 030 -760 29 369 150 25 174 period attributable to the equity holders of the parent company Earnings per share, EUR -0,16 -0,12 0,00 0,06 0,02 0,00 0,03 (diluted = non-diluted) RELATED PARTY TRANSACTIONS III III I-III I-III I-IV EUR 1000 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Sales to related parties 39 46 147 137 203 Purchases from related parties 38 55 47 80 Current non-interest-bearing receivables from 12 0 12 0 0 related parties Non-current interest-bearing receivables from 0 59 0 59 33 related parties COMMITMENTS Sept 30 Sept 30 Dec 31 EUR 1000 2013 2012 2012 ----------------------------------------------------------------------------- Mortgages and guarantees on own behalf Business mortgage for the Group's loan liabilities 7 550 7 550 7 550 Real estate pledge for the Group's loan liabilities 900 900 900 Subsidiary shares pledged as 4 018 4 018 4 018 security for group companies' liabilities Other listed shares pledged as 134 210 187 security for group companies' liabilities Current receivables pledged as 246 271 272 security for group companies' liabilities Pledges and guarantees given for the 214 232 232 group companies' off-balance sheet commitments Guarantees given on behalf of third parties 65 130 114 Minimum future operating lease payments 5 169 6 126 6 033 Accounting principles applied in the condensed consolidated financial statements These condensed consolidated financial statements are unaudited. This report has been prepared in accordance with IAS 34 following the valuation and accounting methods guided by IFRS principles. The accounting principles used in the preparation of this report are consistent with those described in the previous year's Financial Statement taking into account also the possible new, revised and amended standards and interpretations. Income tax is the amount corresponding to the actual effective rate based on year-to-date actual tax calculation. The IFRS principles require the management to make estimates and assumptions when preparing financial statements. Although these estimates and assumptions are based on the management's best knowledge of today, the final outcome may differ from the estimated values presented in the financial statements. The business gift markets have not improved as expected and Wulff Liikelahjat Oy's net sales and profitability have decreased from last year. In September 2013 Wulff reported an impairment of EUR 0.6 million from its business gift goodwill which decreases down to EUR 0.7 million in the consolidated statement of financial position. In goodwill impairment tests the carrying amount is compared to the unit's discounted present value of the recoverable cash flows i.e. the value in use, where the previous profit performance level, the next year's budget as well as the sales and profit estimates for future years are considered. The testing calculations' five-year estimate period consists of the budget year and the following four estimate years where a moderate, approximately two-percent annual growth is estimated in each business areas. After this five-year estimate period, the so-called eternity value is based on zero-growth assumption. The budgets and later years' estimates used in the testing are carefully estimated and the growth expectations are moderate considering also the impacts of economic slowdown. The technique and discount interest rate used in the impairment tests on September 30, 2013 were the same as in the financial statements as of December 31, 2012, and the testing methods have been described in detail in its consolidated notes. A part of the Group's loan agreements include covenants, according to which the equity ratio shall be 35 percentages at minimum and the interest-bearing debt/EBITDA ratio shall be 3.5 at maximum in the end of each financial year. On December 31, 2012 the covenants were reached successfully: the equity ratio of 44.3 % exceeded the required level and the interest-bearing debt/EBITDA ratio was below 3.5 in accordance with the covenants. According to the loan agreements, the covenants are tested only at year end i.e. the next time on December 31, 2013. Based on the Group management's forecast the operating result will be negative in 2013 and thus the loan covenants will breach on December 31, 2013. The group management have started finance agreement negotiations with the banks which have given those loans. The Group has no knowledge of any significant events after the end of the financial period that would have had a material impact on this report in any other way that has been already discussed in the review by the Board of Directors. In Vantaa on November 4, 2013 WULFF GROUP PLC BOARD OF DIRECTORS Further information: CEO Heikki Vienola tel. +358 9 5259 0050 or mobile: +358 50 65 110 e-mail: heikki.vienola@wulff.fi DISTRIBUTION NASDAQ OMX Helsinki Oy Key media www.wulff-group.com News Source: NASDAQ OMX 05.11.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: Wulff-Yhtiöt Oyj Finland Phone: Fax: E-mail: Internet: ISIN: FI0009008452 WKN: End of Announcement DGAP News-Service ---------------------------------------------------------------------------
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