Interim Management Statement: January – September 2019
This press release is a summary of Rettig Group’s Interim Management Statement for the period from 1 January to 30 September 2019. Unless otherwise stated, the figures refer to 1 January to 30 September 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.
Rettig Group’s turnover in January-September 2019 was approximately at the same level as in the corresponding period last year. Purmo Group’s (formerly known as Rettig ICC) turnover increased while the turnover of Nordkalk decreased. Rettig Group’s EBITDA was higher than in the comparison period. EBITDA of both Purmo Group and Nordkalk improved. The performance improvement programs at Purmo Group and Nordkalk are progressing as planned and we expect them to improve profitability of both companies in 2020. Terveystalo and eQ performed well.
- Group turnover in January-September 2019 was approximately at the same level as in the corresponding period last year. Purmo Group’s turnover increased due to positive sales development particularly in Germany, Romania and Brazil as well as due to the acquisition of Sigarth AB at the end of 2018. Nordkalk’s turnover decreased due to lower sales in the region North East Europe.
- Group EBITDA in January-September 2019 was higher than in the same period last year. EBITDA of both Purmo Group and Nordkalk improved. The first-time adoption of IFRS 16 Leases starting 1 January 2019 had a positive impact on EBITDA.
- Group EBIT increased. 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 favourable development in net working capital. All components of net working capital improved, Purmo Group being the contributor to the improvement.
- Net debt* and net debt / EBITDA* were at the same level as in September 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 consolidates 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 15.21% 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 January-September 2019 was EUR 7.6 million and EUR 4.9 million respectively.
Unchanged 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 the reporting period
Rettig ICC changed its name to Purmo Group in October 2019.
As part of the performance improvement program, Nordkalk announced a new operating model in September 2019. After the co-determination processes, and considering all retirements, resignations and redundancies this year, which have not led to replacements, Nordkalk will have a total of 163 less positions.
Financial calendar 2020
Rettig Group will publish its annual report for 2019, including its full year financial result, on 9 March 2020. The January-March Interim Management Statement will be published on 7 May 2020, January-June interim report on 19 August 2020 and January-September Interim Management Statement on 2 November 2020.
Matts Rosenberg, CEO, Rettig Group
Pia Dahlqvist, Head of Communications and HR, Rettig Group
Tel. +358 40 526 7813