Interim Management Statement: January – March 2019
This press release is a summary of Rettig Group’s Interim Management Statement for the period from 1 January to 31 March 2019. Unless otherwise stated, the figures refer to 1 January to 31 March 2019 and the corresponding period last year. All figures are unaudited and according to International Financial Reporting Standards (IFRS). The complete report is available here.
During the first quarter of 2019 the turnover of Rettig Group was approximately at the same level as previous year. The turnover of Rettig ICC increased and the turnover of Nordkalk decreased. The Group EBITDA was slightly lower than in the comparison period, and both Rettig ICC and Nordkalk showed lower profitability. In both companies, performance improvement programmes are progressing as planned. eQ, Terveystalo, Alandia and Anchor performed well.
Rettig Group’s Chairman of the Board Cyril von Rettig stepped down and Tomas von Rettig replaced him as the company’s Chairman of the Board. Consequently, Matts Rosenberg was appointed as CEO of Rettig Group, effective 1 March 2019.
Hannu Hautala left his duties as CEO of Nordkalk and Marcel Gestranius was appointed Acting CEO of Nordkalk in January 2019. Simultaneously a performance improvement programme was launched in the company, with the objective to elevate Nordkalk’s operational performance and improve profitability. In March, Paul Gustavsson was appointed Chief Executive Officer of Nordkalk as of 29 April 2019.
- Group turnover in the first quarter of 2019 was approximately at the same level as in the first quarter last year. Rettig ICC’s turnover increased following increased sales in several countries, particularly in Brazil, Germany, Romania and the UK. The increase was also supported by the acquisition of Sigarth AB at the end of 2018. Nordkalk’s turnover decreased due to a decrease in the market areas North East Europe and Scandinavia.
- Group EBITDA was slightly lower than in the comparison period. Both Rettig ICC and Nordkalk showed lower profitability. EBITDA of Rettig ICC decreased mostly due to increased operating expenses and unfavorable exchange rate fluctuations. EBITDA of Nordkalk decreased on lower sales. Rettig ICC’s acquisition of Sigarth AB in December 2018 and the first-time adoption of IFRS 16 Leases starting 1 January 2019 had a positive impact on Group EBITDA.
- EBIT decreased slightly. The change in accounting treatment of the investments in eQ Plc and Terveystalo Plc contributed positively to EBIT and net profit.
- Free cash flow improved following favorable development in net working capital.
- Net debt and net debt / EBITDA increased on comparable terms*) compared to last year due to the additional investments in Terveystalo and eQ in the second quarter of 2018.
The accounting treatment of Rettig Group’s investments in eQ Plc and Terveystalo Plc has been revised. Starting from 1 January 2019 Rettig Group will consolidate its investments in eQ Plc and Terveystalo Plc according to the equity method. Rettig Group assesses that it has significant influence over eQ Plc and Terveystalo Plc through its ownership interest of 15.25% and 16.52%, respectively, in addition to its representation in the board of directors of both companies. The impact of the change on Rettig Group’s EBIT and net profit, continuing operations, in Q1/2019 was EUR 3.2 million.
*Including adjustments as defined in the senior loan terms & conditions. Said adjustments were amended in April 2018; if reported pursuant to the amended adjustments, Rettig Group’s ‘net debt’ as of 31 March 2018 would have amounted to EUR 264 million and net debt / EBITDA to 2.4.
The outlook for 2019
The outlook for 2019 remains unchanged. Global economic uncertainty has increased and economic growth in Europe and Asia is expected to slow down in 2019. As a result, we do not expect economic conditions to materially help drive profitability in our private core investments. In 2019, we will focus on improving the cost competitiveness and growth prospects of these companies in order to support profitability and cash flow generation.
Events after reporting period
In April, a new role, Chief Investment Officer (CIO), was introduced in the management team to oversee all of Rettig Group’s investment operations. Matts Rosenberg is, for the time being, managing the role of CIO in addition to functioning as CEO of Rettig Group. Rettig Group intends to further develop its family office services, and therefore, Roger Lönnberg, previously Head of Financial Investments, took up a new role as Head of Family Office focusing full-time on developing these services. In his new position, Roger is no longer a member of Rettig Group’s management team.
Financial calendar 2019
Rettig Group will publish the January-June interim report on 26 August 2019 and the January-September Interim Management Statement on 5 November 2019.
Matts Rosenberg, CEO, Rettig Group
Pia Dahlqvist, Head of Communications and HR, Rettig Group
Tel. +358 40 526 7813