Interim Management Statement
Rettig Group today announces the following Interim Management Statement for the period from 1 January to 21 April 2016. Unless otherwise stated, the figures refer to 1 January to 31 March 2016 and the corresponding period last year. All figures are unaudited and for the first time according to International Financial Reporting Standards (IFRS).
Financial highlights (IFRS)
- Turnover improved by 13% to EUR 239 million (211)
- EBITDA improved by 17% to EUR 35 million (30)
- EBIT improved by 25% to EUR 20 million (16)
- Net result improved by 38% to EUR 11 million (8)
- Net debt increased by 14% to EUR 356 million (311)
- Free cash flow improved by 49% to EUR -18 million (-35)
The positive development in turnover was driven by Rettig ICC including Emmeti, which was acquired in 2015. Turnover of Nordkalk and Bore was almost flat. Whereas EBITDA improved in the three business areas, Rettig ICC represented the greatest improvement thanks to Emmeti. Group EBIT was positively impacted by strong performance in all the three business. Net result improved thanks to the favourable development of the operations. Free cash flow improved as a result of the stronger EBITDA and lower investments compared to the year before. Net debt increased primarily as a result of the Emmeti acquisition.
Key events of the period
Rettig Group has today, in a separate statement, announced the divestment of its shipping company Bore to the Dutch shipping company Spliethoff Bevrachtingskantoor B.V. All activities of the Bore business will transfer to Spliethoff including all of Bore’s employees, Bore’s entire fleet of nine RoRo (Roll-on/Roll-off) vessels and the strong Bore brand. The 24.8% stake in Försäkringsaktiebolaget Alandia is not included in the transaction and remains within Rettig Group. The all-cash deal is expected to close on 30 June 2016 and does not require any approval by competition authorities. The value of the deal has not been disclosed.
During the period, the Board of Directors of Rettig Group approved the repayment of the capital loan of EUR 26 million, which matures at the end of April 2016.
In the beginning of the year the Swedish Land and Environment Court of Appeal affirmed Nordkalk’s permit for the whole applied expansion of the existing quarry in Klinthagen on northern Gotland. The permit covers a continuation of the permit for the current quarry and secures supply of stone to customers until at least 2020.
The investment management team of Rettig Capital was moved under Rettig Group, to cement the operations of Anchor, the in-house investment operations established in 2015. The investment operations are run by Roger Lönnberg, CIO of Rettig Group and CEO of Anchor. He is also vice chairman of Försäkringsaktiebolaget Alandia and in charge of Rettig Group’s 24.8% holding in Alandia.
Transition to IFRS
Rettig Group’s Board of Directors have approved the proposal to transition from current Finnish Accounting Standards (FAS) to International Financial Reporting Standards (IFRS). IFRS is considered more suitable for Rettig Group as about 80% of the group’s turnover is generated outside of Finland. In line with Rettig Group pro-active funding strategy, IFRS reporting is also expected to improve access to a larger spectrum of funding sources. The estimated key impacts of the transition to IFRS are:
- EBITDA improves mainly as docking costs are capitalized and leasing costs are treated differently.
- EBIT improves mainly as the goodwill is no longer depreciated. The goodwill amount in the balance sheet is frozen at the current level and will go through an annual impairment test under IFRS.
- Total balance sheet increases mainly as financial leases, revaluation of assets, employee benefits, docking costs and spare parts are added to the balance sheet.
- The effect of IFRS is positive on ROCE, negative on the equity ratio, neutral on net debt/EBITDA and negative on net gearing. The effects on equity ratio and net gearing are estimated to be minor.
Unchanged outlook for 2016
We expect business activity to remain at a similar level in 2016 as in 2015 despite weak signs of recovery in the European market. During 2016 we will continue to focus on profitability improvement.
Financial calendar 2016
Rettig Group will publish its January-June interim report on 25 August 2016 and January-September Interim Management Statement on 20 October 2016.
For further information go to www.rettig.fi or contact:
Josefina Tallqvist, Rettig Group, Director, Corporate Communication and Investor Relations
Tel: +358 40 7455276, email: email@example.com
Rettig Group is a Finnish family business that creates value for generations. We aim for sustainable and long-term value growth through risk diversification and a strong balance sheet. Businesses of Rettig Group are Rettig ICC – indoor climate comfort; Nordkalk – limestone-based products; Bore – RoRo shipping services; insurance company Alandia – an associated company of Rettig Group; and Anchor – Rettig Group’s in-house investment operations. In 2015, Rettig Group had a turnover of EUR 891 million (IFRS) and about 4,200 employees in 28 countries.