Interim report for January-June 2019: Focus on profitability improvement
This press release is a summary of Rettig Group’s Interim Report for the period from 1 January to 30 June 2019. Unless otherwise stated, the figures refer to 1 January to 30 June 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.
- Group turnover in the first half of 2019 was approximately at the same level as the corresponding period last year, down by 1 per cent. Rettig ICC’s turnover increased due to the acquisition of Sigarth AB at the end of 2018 as well as positive sales development particularly in Romania, China, Germany, Brazil and Denmark. Nordkalk’s turnover decreased due to lower sales in the region North East Europe.
- Group EBITDA in the first half of 2019 was lower than in the same period last year. EBITDA of Rettig ICC decreased mostly due to increased operating expenses and raw material costs. Nordkalk’s EBITDA decreased on lower sales. The first-time adoption of IFRS 16 Leases starting 1 January 2019 had a positive impact on EBITDA.
- Group EBIT decreased. 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, Rettig ICC being the main contributor to the improvement.
- Net debt and net debt / EBITDA increased mostly due to the impact of the adoption of IFRS 16 Leases starting 1 January 2019 as well as lower EBITDA.
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 15.25% 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 Q2/2019 was EUR 5.3 million and EUR 2.6 million respectively.
Matts Rosenberg, CEO of Rettig Group:
“During the first half of 2019 the turnover of Rettig Group was approximately at the same level as the corresponding period last year, down by 1 per cent. Rettig ICC’s turnover increased while the turnover of Nordkalk decreased. The Rettig Group EBITDA was lower than in the comparison period. While both Rettig ICC and Nordkalk showed lower profitability, performance improvement programs are progressing as planned. Terveystalo, Alandia and eQ performed well.”
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.
Financial calendar 2019
Rettig Group will publish the Interim Management Statement for January-September 2019 on 5 November 2019.
Matts Rosenberg, CEO, Rettig Group
Pia Dahlqvist, Head of Communications and HR, Rettig Group
Tel. +358 40 526 7813