Interim Report
26.10.2012
Interim report, 1 January – 30 September 2012
– The Tulikivi Group’s third-quarter net sales were EUR 13.1 million (1 July – 30 September 2011: EUR 15.1 million), the operating result was EUR 0.4 (0.5) million and the result before taxes was EUR 0.2 (0.3) million. – The Group’s net sales for 1 January – 30 September 2012 were EUR 37.0 million (1 January – 30 September 2011: EUR 43.3 million), the operating result was EUR -0.4 (-1.3) million and the result before taxes was EUR -1.1 (-1.9) million. – Earnings per share amounted to EUR -0.02 (-0.04) for 1 July – 30 September 2012, and EUR 0.00 (0.00) for the third quarter. – Net cash flow from operating activities during the reporting period was EUR -3.7 (-1.5) million. – Order books at the end of the period were at EUR 5.9 million (30 September 2011: EUR 6.7million). – Future outlook: Like-for-like net sales in 2012 are expected to remain about 5 per cent lower than the previous year. The company has carried out centralisation and adjustment measures, and these will create significant savings during 2012. The full-year operating result is expected to be profitable.
Summary of the interim report 01-09/2012. The full interim report is attached to this release.
Key financial ratios
2012
2011
%
Managing Director’s comments:
“The demand for Tulikivi products in the third quarter was about the same as in the first quarter.
The demand for fireplaces on the Finnish market was down on the previous year, due to the decrease in new housing construction and the caution shown by consumers. Particularly in recent weeks, demand has been weaker than before.
Despite the challenging economic situation, the volume of fireplace exports was higher than predicted. The trends in fireplace exports were most favourable in Germany, Russia and the USA. In Germany, demand for fireplaces is being boosted by an increase in the price of electricity resulting from subsidies for renewable energies.
The Hiisi fireplace range and design fireplaces that were launched on the market were also positively received in Central Europe.
Lining stone product customers continued to be cautious and to keep their stocks low. The demand for sauna products continued as planned.
The Group’s measures to achieve cost savings of EUR 3 million in 2012 have proceeded as planned. These measures include the discontinuing of unprofitable operations, making savings in fixed costs, and taking measures to improve production efficiency.”
Net sales and result
The Group’s net sales amounted to EUR 37.0 million (1 January – 30 September 2011: EUR 43.3 million). Net sales of the Fireplaces Business were EUR 33.8 (39.1) million, and net sales of the Interior Stone Products Business were EUR 3.2 (4.2) million. The 2011 figures include net sales in discontinued operations, which amounted to EUR 1.2 million in the Fireplaces Business and EUR 1.4 million in the Interior Stone Products Business.
Net sales in Finland accounted for EUR 18.7 (23.5) million, or 51.2 (54.4) per cent, of total net sales. Exports amounted to EUR 18.3 (19.8) million in net sales. The principal export countries were France, Sweden, Germany, Belgium and Russia.
The consolidated operating result was EUR -0.4 (-1.3) million. In the segment reporting, the corresponding operating result for the Fireplaces Business was EUR 1.1 (0.6) million, and for the Interior Stone Products Business EUR -0.1 (-0.5) million. The expenses under ‘Other items’ were EUR -1.4 (-1.4) million. The third-quarter operating non-recurring items from restructuring, amounting to a net total of EUR -0.6 million. EUR -0.4 million of these items was allocated to the Fireplaces Business and EUR -0.2 million to the Interior Stone Products Business.
The consolidated result before taxes was EUR -1.1 (-1.9) million, and the result for the reporting period was EUR -0.8 (-1.4) million. Earnings per share amounted to EUR -0.02 (-0.04).
The Group’s third-quarter net sales were EUR 13.1 million (1 July – 30 September 2011: EUR 15.1 million), the operating result was EUR 0.4 (-0.5) million and profit before taxes was EUR 0.2 (0.3) million. Earnings per share amounted to EUR 0.00 (0.00).
Financing and investments
Cash flow from operating activities before investments was EUR -3.7 (-1.5) million.
Working capital increased by EUR 5.5 million in the period and came to EUR 11.0 million (30 September 2011: EUR 9.3 million). Interest-bearing debt was EUR 26.0 (27.7 million, and the Group’s net financial expenses were EUR 0.7 (0.6) million. The equity ratio was 33.2 per cent (30 September 2011: 33.3 per cent). The ratio of interest-bearing net debt to equity, or gearing, was 130.3 (101.0) per cent. The current ratio was 1.6 (1.7). The equity per share amounted to EUR 0.49 (0.53).
At the end of the reporting period, the Group’s cash assets were EUR 2.6 (7.7) million and unused credit limits amounted to EUR 1.0 (1.0) million. The Group’s interest-bearing debt includes covenants which are tied to the Group’s equity. The covenant conditions were met at the close of the reporting period. In addition, the Group has an annual covenant condition that is tied to the ratio between its interest-bearing debt and EBITDA.
The Group’s investments in production, quarrying and development were EUR 1.9 (3.3) million in the reporting period. Research and development expenditure was EUR 1.2 (1.8) million, i.e. 3.3 (4.1) per cent of net sales. EUR 0.4 (0.5) million of this was capitalised in the balance sheet.
A new range of woodburning stoves was launched in the first half of 2012, along with the new Hiisi fireplaces, which are well-suited to modern, low-energy construction projects. The design fireplace collection was updated.
Personnel
The Group employed an average of 370 (437) people during the reporting period. Salaries and bonuses during the period totalled EUR 10.3 (12.3) million.
Near-term risks and uncertainties
Unexpected fluctuations in the economy which could weaken demand are seen as near-term risks for the Group. Consumer demand in the final part of the year is uncertain in Finland in particular.
More information on risks can be found in the Board of Directors’ report on 2011 and the notes to the financial statements.
Future outlook
Consumers in the company’s main markets are still cautious and are considering their investment decisions carefully.
Like-for-like net sales in 2012 are expected to remain about 5 per cent lower than the previous year. The company has carried out centralisation and adjustment measures, and these will create significant savings during 2012. The full-year operating result is expected to be profitable.
Order books at the end of the reporting period amounted to EUR 5.9 million (30 September 2011: EUR 6.7 million).
TULKIVI CORPORATION
Board of Directors
Matti Virtaala, Chairman of the Board
Distribution: NASDAQ OMX Helsinki Ltd Central Media
Additional information: Tulikivi Corporation, 83900 Juuka, www.tulikivi.com -Chairman of Board of Directors Matti Virtaala, +358 207 636 666 -Managing Director Heikki Vauhkonen, +358 207 636 555