Year-end Report Rejlers AB January – December 2017
Improved billing ratio, but insufficient profitability
• Sales amounted to SEK 672.2 million (673.7)
• Organic sales growth excluding exchange rate fluctuations amounted to 0.9%
• EBITA (adjusted) amounted to SEK 17.9 million (20.9) and the adjusted EBITA margin amounted to 2.7 % (0.6)
• Operating profit (EBIT) amounted to SEK 9.3 million (6.0) and the operating margin was 1.4 % (0.9)
• Profit after tax was SEK 6.7 million (0.0)
• Earnings per share before and after dilution were SEK 0.38 (-0.03)
• Cash flow from operating activities totalled SEK 19.9 million (68.2)
• Sales increased by 5 % to SEK 2,470.1 million (2,341.4)
• Organic sales growth excluding exchange rate fluctuations amounted to 4.1 %
• EBITA (adjusted) amounted to SEK 55.2 million (61.1) and the adjusted EBITA margin amounted to 2.2 % (2.6)
• Operating profit (EBIT) amounted to SEK 25.1 million (27.5) and the operating margin was 1.0 % (1.2)
• Profit after tax was SEK 11.7 million (14.0)
• Earnings per share before and after dilution were SEK 0.71 (1.03)
• Cash flow from operating activities totalled SEK -41.3 million (41.2)
• The Board of Directors proposes that no dividend be paid
Statement by the President and CEO
In the fourth quarter, we continued the change work to increase efficiency, lower the cost base and future-proof our operations. The billing ratio increased in all segments during the quarter, compared with the previous year. Sales for the fourth quarter decreased somewhat compared with the previous year while earnings were negatively impacted by significant impairment losses on projects and one working day less in our markets.
Continued change work
Change work has characterised the greater part of the financial year with the aim of increasing efficiency and creating a stable foundation for long-term, profitable growth. In the fourth quarter, we implemented a re-organisation of the Swedish operations where we are reducing the number of regions from nine to five to lower the cost base through administrative synergies in the long term.
Modest sales growth
The organic sales growth was somewhat modest and amounted to 0.9 per cent for the fourth quarter. It was the segments Rejlers Finland, Rejlers Norway and Rejlers Embriq that contributed positively, while Rejlers Sweden reports a slightly negative growth in the quarter, primarily related to the closure of less profitable areas in the Swedish operations.
Signs of improved efficiency
The quarter’s adjusted EBITA amounted to SEK 17.9 million (20.9) and was adjusted by SEK 5.6 million in restructuring costs. The EBITA for the quarter was also impacted by impairment losses on projects of SEK 17.7 million (7.9), mainly in the infrastructure operations in Sweden. We see an improvement in the operating profit in Rejlers Norway of SEK 5.9 million and in Rejlers Embriq of SEK 8.3 million over the previous quarter. The billing ratio increased in all segments in the quarter compared with the previous year and totalled 76.4 per cent (74.6), but we still suffer from weak profitability in some segments and individual contracts, which has a distinctly negative earnings impact. Profitability was also negatively impacted by having one working day less in the quarter.
Good equity/assets ratio
Cash flow from operating activities during the quarter amounted to SEK 19.9 million (68.2), where the change compared with the previous year is mainly attributable to the uneven cash flow in Rejlers Embriq. Rejlers has a good equity/assets ratio and is well equipped to continue the on-going efficiency improvement work. The demand for our services remains strong in all segments and we are continuing work towards our financial targets through a more efficient organisation and operations.
Viktor Svensson will take over the role of President and CEO on 22 February. Viktor has extensive experience and thorough expertise in the technical consulting industry and with this a significant understanding of Rejlers’ markets and surroundings, our strategy and our business areas.
Stockholm, February 2018