Investors

Interim Report January – December 2018

Improved profitability

Fourth quarter

  • Net sales amounted to SEK 644.2 million (670.7)
  • EBITA amounted to SEK 35.4 million (12.3) and the EBITA margin was 5.5% (1.8)
  • Operating profit (EBIT) amounted to SEK 31.8 million (9.3) and the operating margin was 5.0% (1.4)
  • Profit after tax was SEK 17.5 million (6.7)
  • Earnings per share before and after dilution were SEK 0.98 (0.38)
  • Cash flow from operating activities totalled SEK 88.1 million (19.9)
  • Total cost of restructuring measures was SEK 0.0 million (5.6)

January - December

  • Net sales amounted to SEK 2,365.2 million (2,464.7)
  • EBITA (adjusted) amounted to SEK 97.5 million (55.2) and the adjusted EBITA margin amounted to 4.1% (2.2)
  • Operating profit (EBIT) amounted to SEK 36.1 million (25.1) and the operating margin was 1.5 % (1.0)
  • Profit after tax was SEK 16.2 million (11.7)
  • Earnings per share before and after dilution were SEK 0.85 (0.71)
  • Cash flow from operating activities totalled SEK 123.1 million (-41.3)
  • Total cost of restructuring measures was SEK 53.4 million (17.7)
  • The Board proposes a dividend of SEK 1.00 per share (0.50)

Statement by the President and CEO

We can confirm that the structural changes and efficiency enhancement measures implemented in 2018 are providing a positive outcome in our earnings in all markets. The first stage of our transition has been successfully navigated and the next step in our journey of change is beginning. A noteworthy event in the fourth quarter was the launch of our Rejlers Network digital business platform, which enables new collaborations with hundreds of independent consultants and companies that supplement our own base of expertise. The market for our services generally continued to be strong and with a partner network, we have the possibility of delivering both more and larger assignments. Altogether, we are entering 2019 with a more stable platform to continue to strengthen our market position and profitability.

Operations in change

In the past year, we took the first step towards the goal of establishing a more effective and profitable Rejlers. Partly through a new organisation and reduced fixed costs and partly by streamlining the business. In Sweden, we have had a good response to our new division
breakdown, where the customer’s appreciate our greater industry specialisation and that we speak the customer’s language already from the first contact. In addition, our Finnish operations are continuing to show strong growth both organically and through two acquisitions in the fourth quarter. The Norway segment implemented powerful profitability measures, providing a better outlook for 2019. We are now focusing on further increasing activity in the operations and see room for a higher utilisation in all segments.

Sales and profitability

Our market remains strong in all segments – although we note some levelling off in the construction industry. Sales during the fourth quarter fell by 4.0 per cent to SEK 644.2 million (670.7). The decline is attributable to the second quarter’s divestment in Norway of the unprofitable telecom operations that had sales of SEK 120 million per year and a generally lower share of hardware sales in Rejlers Embriq. In addition, nearly 50 employees left Rejlers in connection with the cost-savings programme implemented in the second quarter of last year. EBITA rose to SEK 35.4 million (12.3). Lower costs and a higher utilisation in large parts of the operations made positive contributions.

Strategic initiatives

In the fourth quarter, we launched our digital business platform, Rejlers Network, and have since registered more than 100 external consultants for our unique network. The network platform will become an important complement to Rejlers’ operations that will enable us to more efficiently find the right consultant resources for the right assignments. We will continue to invest in both system development and marketing of Rejlers Network in 2019 based on our conviction of the platform’s potential.

Digitalised working methods

Rejlers is investing significant resources in the transition to digital working methods. Using laser scanning, we create 3D models that considerably simplify the project planning methods for our customers. We are also on the forefront in terms of implementing “digital twins”, instead of a physical prototype, in our projects. Our reference portfolio in “digital twins” is growing quickly, particularly in the energy area.

Strategy and financial targets

At the end of the previous year, we gathered all managers in Rejlers to jointly lay out our continued direction and development. At this meeting, the foundation was laid for Rejlers’ revised strategy and vision, with its sights set on 2025, which we intend to communicate in the second quarter of this year. In connection with this, the Board of Directors adopted new long-term financial targets. By 2025, Rejlers will achieve an EBITA margin of 10 per cent over a business cycle with sales of SEK 4.5 billion.

Some personal reflections

It is with energy and joy that I, together with managers and employees, am making this journey of change to take Rejlers into the future. The change work primarily revolves around organisation, structure and culture, and it is culture that takes the most time. Our watchwords for value-adding change are leadership, business acumen and brand development.

Stockholm, February 2019
Viktor Svensson