Interim Management Statement: January-September 2016

Rettig Group today announces the following Interim Management Statement for the period from 1 January to 20 October 2016. Unless otherwise stated, the figures refer to 1 January-30 September 2016 and the corresponding period last year. All figures are unaudited and according to International Financial Reporting Standards (IFRS).

Financial highlights January-September 2016
– Turnover increased by 13% to EUR 712 million (630)
– EBITDA grew by 8% to EUR 98 million (90)
– EBIT improved by 2% to EUR 65 million (64)
– Net result improved by 9% to EUR 42 million (38)
– Net debt declined by 21% to EUR 239 million (301)
– Free cash flow improved by 624% to EUR 153 million (21)

In July to September 2016 turnover improved by 10% to EUR 248 million (224), EBITDA declined by 3% to EUR 34 million (36), the EBITDA-margin was at 14% (16%), EBIT declined by 7% to EUR 24 million (25), net result improved by 17% to EUR 18 million (15) and free cash flow declined by 123% to EUR -9 million (41) compared to the same period last year.

Despite continued generally weak demand in the markets of Rettig ICC and Nordkalk, Rettig Group’s turnover improved during the first nine months of 2016 compared to the previous year. The improvement was driven by Rettig ICC, where turnover improved compared to the previous year mainly thanks to the contribution of Emmeti, the Italian business that has been part of Rettig ICC since December 2015. However, weaker UK, Russian and Polish markets as well as the weaker British pound, had a negative effect on the turnover of Rettig ICC. Nordkalk’s turnover was slightly below the corresponding period last year. Finland developed positively for Nordkalk, especially in the agriculture and construction segments, whereas sales in Sweden were generally weaker compared to the year before.

During the first nine months of the year, total EBITDA continued to improve mainly thanks to the positive impact of Emmeti on Rettig ICC despite increasing raw material costs. EBITDA of Nordkalk declined in line with the turnover for the period. The Group EBITDA-margin remained almost unchanged at around 14 per cent. The improved EBIT was mainly driven by the better performance of Rettig ICC which was, however, offset by higher depreciations compared to the corresponding period last year. The positive development of net result was also mainly driven by Rettig ICC.

The strong free cash flow of Rettig Group was supported by the divestment of Bore. Although slightly below the corresponding period last year, the free cashflow of both Rettig ICC and Nordkalk remained on a generally good level during the nine month period. Investments of around EUR 31 million in Anchor during the third quarter had a negative impact on total free cash flow of the Group during that period.

Key events since 1 July 2016
In October, Matts Rosenberg started working for Rettig Group as Chief Operating Officer (COO). In this new role, he focuses on investment origination and execution as well as value creation in the Core Investments. He will also be responsible for developing Rettig Group’s strategy and investment process, and heads up Group Treasury.

At the end of August Rettig Group announced its increased holding in eQ Plc, the Finnish asset management and corporate finance firm, from an initial approximately 8 per cent to circa 10 per cent. Rettig Group considers eQ a long-term investment and has therefore decided to include eQ as a portfolio company among its Core Investments. Other Core Investments are Rettig ICC, Nordkalk and the 25 per cent holding in Alandia.

As a step in its ambitions to reach an A-rating, Alandia’s credit rating was in July raised by Standard & Poor’s from BBB+ “stable outlook” to BBB+ “positive outlook”.

In September Rettig ICC announced a restructuring of its organisation in order to achieve greater profit focus, accountability and more effective decision making. Four new regional Group Managing Directors were appointed. They report to the CEO of Rettig ICC and are in charge of legal entities including sales, marketing and operations in their respective regions.

In September Anders Moliis-Mellberg announced his resignation from the Board of Directors of the Rettig Group.

A recruitment process is under way to appoint a new permanent CEO of Nordkalk. Nordkalk’s Board of Directors appointed Tarmo Tuominen as Acting Chief Executive Officer for Nordkalk in September 2016 as his predecessor, Jarkko Kaplin, stepped down. Tarmo Tuominen has worked for the company in various roles since 1982. Currently he is also Supply Chain Officer of Nordkalk.

Unchanged outlook for 2016
Despite weak signs of recovery in the European market, we expect business activity to remain at a similar level in 2016 as in the year before. We will continue to focus on profitability improvement.

Financial calendar 2017
Rettig Group will publish its annual report for 2016, including its full year financial result, on 29 March 2017. The January-March Interim Management Statement will be published on 21 April 2017, January-June interim report on 10 August 2017 and January-September Interim Management Statement on 19 October 2017.

Further information:
Josefina Tallqvist, Rettig Group, Director, Corporate Communication and Investor Relations
Tel: +358 40 7455276, email: josefina.tallqvist@rettig.fi

Rettig Group is a Finnish family held investment company that creates value for generations through active and responsible ownership. Our holdings include Rettig ICC (indoor climate comfort), Nordkalk (limestone), Alandia (insurance), eQ (asset management and corporate finance) and Anchor (financial investments). Through these businesses Rettig Group is active in about 28 countries globally and employs over 4,000 people.