Wulff-Yhtiöt Oyj - Interim report (Q1 and Q3)

WULFF GROUP PLC’S INTERIM REPORT FOR JANUARY 1 – SEPTEMBER 30, 2016:   OPERATING PROFIT REMAINED AT THE SAME LEVEL DESPITE THE DECLINE IN NET SALES

INTERIM REPORT           November 3, 2016 at 9:00 A.M.

This is a summary of Wulff Group Plc’s interim report for January-September
2016. Wulff Group’s interim report for January-September 2016 is attached to
this stock exchange release and is also available on the company’s website.

JANUARY – SEPTEMBER 2016 BRIEFLY

  ·  Net sales totalled EUR 43.5 million (EUR 50.2 million). Net sales decreased
by 13.4 percent from the previous year.
  ·  EBITDA was EUR 0.7 million (EUR 1.2 million). Comparable EBITDA was EUR 0.5
million (EUR 1.4 million).
  ·  Operating profit (EBIT) was EUR 0.4 (EUR -0.0 million). Comparable
operating profit (EBIT) amounted to EUR 0.2 million (EUR 0.9 million).
  ·  Earnings per share (EPS) were EUR 0.01 (EUR -0.11).

JULY – SEPTEMBER 2016 BRIEFLY

  ·  Net sales totalled EUR 13.4 million (EUR 14.8 million). Net sales decreased
by 9.4 percent from the previous year.
  ·  EBITDA was EUR 0.4 million (EUR 0.6 million). Comparable EBITDA was EUR 0.4
million (EUR 0.6 million).
  ·  Operating profit (EBIT) was EUR 0.4 million (EUR 0.4 million). Comparable
operating profit (EBIT) was EUR 0.3 million (EUR 0.4 million).
  ·  Earnings per share (EPS) were EUR 0.02 (EUR 0.03).

WULFF GROUP’S CHAIRMAN OF THE BOARD OF DIRECTORS HEIKKI VIENOLA

“Our customers’ expectations of the future are brighter than in a long time. The
pick-up in economic growth will affect Wulff’s products and services with a lag.
It is important to develop our product range to meet the needs of today and the
future. Our strengths are in one-to-one encounters with customers and multi
-channel operations. We will concentrate on refining the information we acquire
in these meetings and the feedback we get from our customers into new products
and services. For example, the share of facility management products, cafeteria
products, and hygiene and cleaning products of our sales and supply has risen
constantly. We are an agile, reliable, and environmentally friendly option for
acquiring everything for the workplace. According to our customers, Wulff is the
best-known, most reliable, and has the best customer service in the field.“

GROUP’S NET SALES AND RESULT PERFORMANCE

In January-September 2016 net sales totalled EUR 43.5 million (EUR 50.2
million), decreasing by -13.4 percent from the previous year. The decline in net
sales without the sold business gifts business was -10.3 % in January-September
2016. Net sales totalled EUR 13.4 million (EUR 14.8 million) in the third
quarter, decreasing by -9.4 percent from the previous year. The decline in net
sales without the sold business gifts business was -8.3 percent in the third
quarter. The good work in our customer interface and investments in our sales’
development have not yet shown as expected in the development of net sales. In
Finland, the office supplies industry has begun to show signs of stimulation.

In January-September 2016 EBITDA was EUR 0.7 million (EUR 1.2 million) being 1.6
percent (2.4 %) of net sales, and EUR 0.4 million (EUR 0.6 million) in the third
quarter. In January-September 2016 the comparable EBITDA amounted to EUR 0.5
million (EUR 1.4 million). The comparability of January-September 2016 EBITDA
was affected by the sale of company cars of EUR 0.2 million. The comparability
of January-September 2015 EBITDA was affected by write-downs of inventories of
EUR 0.2 million relating to the business gifts business.

In January-September 2016 the operating profit (EBIT) amounted to EUR 0.4
million (EUR -0.02 million). In January-September 2016 the comparable operating
profit (EBIT) was EUR 0.2 million (EUR 0.9 million). The comparability of the
January-September 2016 operating profit (EBIT) was affected by the sale of
company cars of EUR 0.2 million. The comparability of January-September 2015
operating profit (EBIT) was affected by write-downs of inventories and fixed
assets of EUR 0.2 million and a write-down of goodwill of EUR 0.7 million
relating to the business gifts business. The comparable operating profit (EBIT)
declined by EUR 0.7 million in January-September 2016 which was mainly formed
during the first half year period. The comparable operating profit (EBIT) was
EUR 0.3 million (EUR 0.4 million) in the third quarter, remaining at the same
level as in the previous year despite the decline in net sales. The
comparability of the third quarter operating profit (EBIT) was affected by the
sale of company cars of EUR 0.1 million. The 2015 third quarter EBIT did not
include items affecting the comparability. The group continues to focus on sales
development, the acquisition of new customers and optimizing its operations.

In January-September 2016 employee benefit expenses amounted to EUR 9.4 million
(EUR 9.9 million), and EUR 2.5 million (EUR 2.7 million) in the third quarter.
Other operating expenses amounted to EUR 5.5 million (EUR 6.0 million) in
January-September 2016, and EUR 1.7 million (EUR 1.8 million) in the third
quarter. Employee benefit and other operating expenses were still affected by
the implemented cost-saving measures. To improve its profitability, Wulff Group
continues to examine its cost structure as part of ongoing reforms.

In January-September 2016 the financial income and expenses totalled (net) EUR
-0.2 million (EUR -0.2 million) including interest expenses of EUR 0.1 million
(EUR 0.2 million) and mainly currency-related other financial items (net) EUR
-0.1 million (EUR -0.1 million). In the third quarter, the financial income and
expenses (net) totalled EUR -0.1 million (EUR -0.2 million).

In January-September 2016 the result before taxes was EUR 0.2 million (EUR -0.2
million), and EUR 0.2 million (EUR 0.3 million) in the third quarter. In January
-September 2016 the net profit was EUR 0.1 million (EUR -0.7 million), and EUR
0.2 million (EUR 0.2 million) in the third quarter.

Earnings per share (EPS) were EUR 0.01 (EUR -0.11) in January-September 2016,
and EUR 0.02 (EUR 0.03) in the third quarter.

KEY FIGURES

+-----------------------------------------+-----+-----+-----+-----+---------+
|                                         |III  |III  |I-III|I-III|I-IV     |
+-----------------------------------------+-----+-----+-----+-----+---------+
|EUR 1000                                 |2016 |2015 |2016 |2015 |2015     |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Net sales                                |13   |14   |43   |50   |68 820   |
|                                         |408  |796  |493  |235  |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Change in net sales, %                   |-9,4 |-10,3|-13,4|-6,6 |-7,3 %   |
|                                         |%    |%    |%    |%    |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|EBITDA                                   |365  |579  |690  |1 212|2 019    |
+-----------------------------------------+-----+-----+-----+-----+---------+
|EBITDA margin, %                         |2,7 %|3,9 %|1,6 %|2,4 %|2,9 %    |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Operating profit/loss                    |270  |429  |376  |-16  |505      |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Operating profit/loss margin, %          |2,0 %|2,9 %|0,9 %|-0,0 |0,7 %    |
|                                         |     |     |     |%    |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Profit/Loss before taxes                 |200  |272  |153  |-204 |354      |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Profit/Loss before taxes margin, %       |1,5 %|1,8 %|0,4 %|-0,4 |0,5 %    |
|                                         |     |     |     |%    |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Net profit/loss for the period           |158  |172  |71   |-714 |-195     |
|attributable to equity holders of the    |     |     |     |     |         |
|parent company                           |     |     |     |     |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Net profit/loss for the period, %        |1,1 %|1,2 %|0,2 %|-1,4 |-0,3 %   |
|                                         |     |     |     |%    |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Earnings per share, EUR (diluted = non   |0,02 |0,03 |0,01 |-0,11|-0,03    |
|-diluted)                                |     |     |     |     |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Return on equity (ROE), %                |1,3 %|1,3 %|0,8 %|-5,9 |-1,6 %   |
|                                         |     |     |     |%    |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Return on investment (ROI), %            |1,4 %|1,2 %|1,4 %|-0,4 |2,7 %    |
|                                         |     |     |     |%    |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Equity-to-assets ratio at the end of     |48,0 |44,7 |48,0 |44,7 |46,4 %   |
|period, %                                |%    |%    |%    |%    |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Debt-to-equity ratio at the end of period|33,0 |41,6 |33,0 |41,6 |23,8 %   |
|                                         |%    |%    |%    |%    |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Equity per share at the end of period,   |1,75 |1,75 |1,75 |1,75 |1,84     |
|EUR *                                    |     |     |     |     |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Net cash flow from operating activities  |-1   |-235 |-1   |-271 |1 693    |
|                                         |005  |     |075  |     |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Investments in non-current assets        |114  |34   |116  |158  |161      |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Investments in non-current assets, % of  |0,9 %|0,2 %|0,3 %|0,3 %|0,2 %    |
|net sales                                |     |     |     |     |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Treasury shares held by the Group at the |79   |79   |79   |79   |79 000   |
|end of period                            |000  |000  |000  |000  |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Treasury shares, % of total share capital|1,2 %|1,2 %|1,2 %|1,2 %|1,2 %    |
|and votes                                |     |     |     |     |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Number of total issued shares at the end |6 607|6 607|6 607|6 607|6 607 628|
|of period                                |628  |628  |628  |628  |         |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Personnel on average during the period   |213  |232  |218  |236  |233      |
+-----------------------------------------+-----+-----+-----+-----+---------+
|Personnel at the end of period           |211  |232  |211  |232  |226      |
+-----------------------------------------+-----+-----+-----+-----+---------+

* Equity attributable to the equity holders of the parent company / Number of
shares excluding the acquired own shares

RISKS AND UNCERTAINTIES IN THE NEAR FUTURE

The demand for office supplies is strongly affected by the general economic
development. During the economic downturn, organizations’ personnel lay-offs and
cost-saving initiatives affect the purchasing behaviour of corporate customers.
At a time of economic uncertainty, companies may also reduce participation to
trade fairs. As the ongoing economic uncertainty continues, the cost saving
measures will have an effect on the ordering behaviour of corporate customers
and Wulff must adapt to the market situation.

Half of the Group’s net sales come from other than euro-currency countries.
Fluctuation of the currencies affect the Group’s net result, however the effect
of the fluctuation is expected to be moderate.

EVENTS AFTER THE REPORTING PERIOD

Wulff Group Plc’s Board of Directors appointed CFO Elina Rahkonen as the interim
CEO beginning on 1 October, 2016. The contract of former Group CEO Topi Ruuska
ended on 30 September, 2016. Wulff Group Plc continues to look for a new
permanent CEO.

MARKET SITUATION AND FUTURE OUTLOOK

Wulff is the most significant Nordic player in its field. 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 has an ongoing capacity to
carry out new strategic acquisitions.

Possible growth in the economy affects Wulff’s business quickly. Wulff estimates
the market situation to remain stable. It is important to continue to go through
the cost structure and enhance the company’s operations. Wulff’s goal is to
continue to improve the profitability of its business operations. Wulff
estimates the 2016 result to be positive. In the industry, it is typical that
the result and cash flow are generated in the last quarter.

In Vantaa on November 2, 2016

WULFF GROUP PLC
BOARD OF DIRECTORS

Further information:
Chairman of the Board of Directors Heikki Vienola
tel. +358 300 870 414 or mobile: +358 50 65 110
e-mail: heikki.vienola@wulff.fi

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

Attachments:

11036399.pdf