Beltton-Group Plc STOCK EXCHANGE RELEASE 7 February 2007 9:00 a.m.
BELTTON-GROUP PLC FINANCIAL STATEMENTS BULLETIN FOR FINANCIAL PERIOD 1 January
31 December 2006
Beltton-Groups net sales increased in 2006 and operating profit improved
clearly over the previous year. Net sales for 2006 were up 3.2 per cent and
operating profit 40.3 per cent. The Groups net sales amounted to EUR 62.0
million (EUR 60.1 million) and operating profit to EUR 2.42 million (EUR 1.72
million). Profit before extraordinary items increased by 42.6% to EUR 2.22
million (EUR 1.55 million). Profit for the period rose by 15.1% to EUR 1.30
million (EUR 1.13 million). Earnings per share (EPS) were up to EUR 0.20 (EUR
0.17). The Board of Directors proposes a dividend of EUR 0.12 (EUR 0.10) per
share.
NET SALES AND PROFIT DEVELOPMENT
Belttons net sales increased by 3.2% over the previous year, amounting to EUR
62.0 million (EUR 60.1 million). Of the Groups product groups, especially
corporate promotional products increased their sales. The companys business
was profitable in all operating countries (Finland, Sweden, Norway and
Estonia).
Beltton-Groups sales and profit improved over the previous year. Says Managing
Director Heikki Vienola: Our performance in the third and fourth quarters in
2006 was clearly better than the previous year. Our net sales in the last
quarter were 10% up on the comparable period the year before. Operating profit
also increased in the last quarter. Our inputs targeting cost-effectiveness led
to good results in the whole Group. Both Wulff Oy Ab, vendor of office and
computer supplies, and KB-tuote Oy, specialist in business and advertising
gifts, acquired many important contract customers over the year. The new
customers contributed to our performance in the form of sales growth. I expect
positive development to continue in 2007.
Operating profit was EUR 2.42 million (EUR 1.72 million), representing 3.9%
(2.9%) of net sales. Profit before extraordinary items increased by 42.6% to
EUR 2.22 million (EUR 1.55 million). Earnings per share rose to EUR 0.20,
compared to EUR 0.17 the year before. Equity per share amounted to EUR 2.66, up
from EUR 2.58 the previous year. Profit for the period rose by 15.1% compared
to the previous year, amounting to EUR 1.30 million (EUR 1.13 million).
Return on investment (ROI) amounted to 9.4% (6.5%) and return on equity (ROE)
to 7.8% (7.2%).
FINANCING AND INVESTMENTS
Operating cash flow amounted to EUR 2.09 million (EUR 1.72 million) in the
review period.
The consolidated balance sheet total on 31 December 2006 was EUR 40.7 million
(EUR 38.1 million). The Groups equity ratio at the end of the review period
totalled 45.0% (46.7%). The Groups liquid assets amounted to EUR 5.88 million
(EUR 4.47 million), while net gearing was 45.9% (46.3%).
The investments in fixed assets entered in the balance sheet amounted to EUR
1.12 million (EUR 0.96 million), or 1.8% (1.6%) of net sales. They mainly
targeted vehicles and IT systems development.
OFFICE SUPPLIES MARKETS
The office supplies market has been growing at a steady annual rate of a few
per cent. Growth remained much the same in 2006. Market growth in Finland was
approximately two per cent, in Sweden three per cent, in Norway two per cent
and in Estonia ten per cent. The Estonian market is expected to grow faster
than the Scandinavian market also in the future.
The centralisation trend continued in Beltton's line of business. In autumn
2006 Buhrmann N.V., a Dutch office supplies company, acquired the share capital
of Andvord Tybring-Gjedde ASA from Norway. Andvord Tybring-Gjedde is the
Norwegian market leader in the field. In Sweden Frans Svanström & Co AB
strengthened its position on the office supplies market by acquiring
Wettergrens i Göteborg AB and Killbergs Kontorsvaruhus AB.
Beltton-Group reinforced its position as the Finnish market leader in its
field.
PERSONNEL
Beltton employed 412 (434) people at the end of 2006, and an average of 423
(460) over the review period. A total of 82 (68) employees worked in Sweden,
Norway and Estonia. The number of employees dropped as a result of 21 of Wulff
Oy Abs logistics employees being relocated to Finland Post in compliance with
Wulffs and Finland Posts cooperation agreement in November 2006.
Some 70% of the Groups personnel is employed in various sales tasks, while the
remaining 30% work in administration and logistics. Fifty-two per cent of the
staff are men and 48 per cent women. Nearly half of Belttons employees are
under 35 years of age.
Beltton-Group will continue to emphasise recruiting in 2007. The company is
prepared for recruiting at all times and is able to provide training to dozens
of new sales representatives simultaneously.
EVENTS IN 2006
In April 2006 Beltton boosted its market position in Norway by acquiring a
majority shareholding in Nordisk Profil A/S. All of the companys 14 employees
transferred to Beltton. The deal enhanced Beltton-Group's purchasing synergies,
as Beltton sells the same office and computer accessory products in Finland,
Sweden and Norway.
Recruiting was developed by setting up Vendiili Oy, a company focused on sales
recruiting, in June 2006. The company is led by Juha Sinisalo, BBA, who
previously worked as Belttons HR manager. Vendiili brings together employers
in the sales sector looking for top-performing employees. The Pimp My Life
campaign resulted in a number of contacts and good recruits. The campaign
continued in December 2006.
Belttons subsidiary Wulff Oy Ab signed a cooperation agreement in November
with Itella Logistics Oy. The logistics agreement for office and computer
supplies is an important investment in Wulffs competitiveness and enables
growth in line with Belttons strategy. Beltton believes that the new logistics
concept will strengthen the Groups position in the market for office supplies.
KB-tuote Oy, in charge of the Groups promotional products, acquired a
controlling interest in IM Inter-Medson Oy in September. The deal will further
boost Beltton-Groups market position in corporate promotional products. KB-
tuote had a successful year in 2006: it acquired 20 new contract customers over
the year. The new customers are expected to continue to increase the net sales
of KB-tuote in 2007.
Successful recruits in direct sales and emphasis on the acquisition of new
customers resulted in positive sales development in the latter part of the
year. Belttons direct sales business consists of eight sales companies in
Finland, which sell computer accessories, office supplies, corporate
promotional products and ergonomic products.
The telemarketing activities launched in Sweden in 2005 gave promising results
also in 2006. Telesales support activities especially in direct sales.
Telemarketing started in Norway in 2006 and has had a positive impact on
business development in the country.
SHARES AND SHAREHOLDERS
The closing value of the companys share on 31 December 2006 was EUR 4.59 (EUR
4.40). In 2006 the trading volume of Belttons share amounted to 679,666 shares
(729,800 shares), or 10.4% (11.2%) of shares outstanding, which corresponds to
EUR 2,839,617 (EUR 3,631,461). The market value of the companys share at the
end of the year was EUR 29.9 million (EUR 28.5 million). Its share capital
totalled EUR 2.60 million (EUR 2.60 million) and equity per share was EUR 2.66,
compared to EUR 2.58 the previous year.
Beltton-Group Plc has no option schemes currently in force.
At the end of December 2006 Beltton had 664 (647) shareholders. The ten biggest
shareholders were:
Heikki Vienola 2,518,055 shares 38.7%
Ari Pikkarainen 1,381,745 shares 21.2%
Varma Mutual Pension Insurance Company 450,000 shares 6.9%
Tapiola Mutual Pension Insurance Company 350,000 shares 5.4%
Tapiola General Mutual Insurance Company 283,900 shares 4.4%
EQ Pikkujättiläiset/EQ Rahastoyhtiö Oy 247,540 shares 3.8%
Nordea Nordic Small Cap equity fund 110,700 shares 1.7%
Tapiola Mutual Life Assurance Company 100,000 shares 1.5%
Hietala Pekka 84,100 shares 1.3%
Sundholm Göran 50,000 shares 0.8%
No changes in holdings that would have merited a notice of change took place in
2006.
BOARD OF DIRECTORS DIVIDEND PROPOSAL
Earnings per share were EUR 0.20 (EUR 0.17). The Board of Directors will
propose at the Annual General Meeting that a dividend of EUR 0.12 (EUR 0.10)
per share be distributed for 2006, corresponding to 60.2% of the per-share
profit for the financial period.
OUTLOOK FOR 2007
Beltton expects the market for office supplies to show moderate growth in 2007.
Beltton believes that the successfully implemented contract customer model will
enable the company to outpace market growth. Beltton faces positive prospects
in 2007, and company management believes that both net sales and profit will
increase this year. Growth in line with the companys strategy will be boosted
by acquisitions, which Beltton is prepared for at all times.
ANNUAL GENERAL MEETING AND FINANCIAL STATEMENTS
The Annual General Meeting of Beltton-Group Plc will be held on 4 April 2007.
The company will send out invitations to shareholders in week 11, and the
companys annual report for 2006 will be published the same week. The Groups
interim report for 1 January31 March 2007 will be published on 9 May 07.
Beltton-Group PLC (1000 euro)
CONSOLIDATED INCOME STATEMENT 10-12/06 10-12/05 1-12/06 1-12/05
TURNOVER 18 864 17 087 62 045 60 101
Other operating income 124 118 329 271
Materials and services 9 873 9 470 32 874 31 807
Personnel expenses 4 667 3 809 15 347 15 016
Depreciation 326 305 1 214 1 219
Other operating expenses 3 089 2 701 10 519 10 606
OPERATING PROFIT 1 033 920 2 420 1 724
Financial items 22 -37 -203 -171
PROFIT BEFORE EXTRAORDINARY
ITEMS AND TAXES 1 054 883 2 216 1 554
Extraordinary items 0 0 0 0
PROFIT BEFORE TAXES 1 054 883 2 216 1 554
Income taxes 285 -33 807 287
Minority interest 110 64 113 142
NET PROFIT 659 853 1 296 1 126
CONSOLIDATED BALANCE SHEET (1000 euro)
Assets 12/2006 12/2005
FIXED ASSETS
Intangible assets 454 332
Consolidation goodwill 4 903 4 542
Tangible assets 4 913 5 127
Investments held for sale 235 265
Investments 149 149
TOTAL FIXED ASSETS 10 654 10 416
CURRENT ASSETS
Inventories 10 590 10 507
Sales receivables 8 933 7 255
Other receivables 3 654 4 142
Deferred tax assets 972 1 330
Cash and bank receivables 5 876 4 471
TOTAL CURRENT ASSETS 30 025 27 705
Total assets 40 679 38 121
Equity and liabilities 12/2006 12/2005
EQUITY
Share capital 2 603 2 603
Share premium fund 7 662 7 662
Retained earnings 5 740 5 386
Net profit 1 296 1 126
TOTAL EQUITY 17 302 16 777
Minority interest 889 1 021
LIABILITIES
Long-term liabilities 8 281 8 173
Short-term liabilities 14 207 12 149
TOTAL LIABILITIES 22 488 20 322
Total equity and liabilities 40 679 38 121
KEY RATIOS (1000 euro)
10-12/06 10-12/05 1-12/06 1-12/05
Turnover 18 864 17 087 62 045 60 101
Increase in turnover % 10,4 % -1,0 % 3,2 % -0,5 %
Operating profit 1 033 920 2 420 1 724
% of turnover 5,5 % 5,4 % 3,9 % 2,9 %
Profit before tax 1 054 883 2 216 1 554
% of turnover 5,6 % 5,2 % 3,6 % 2,6 %
Net profit 659 853 1 296 1 126
% of turnover 3,5 % 5,0 % 2,1 % 1,9 %
Equity ratio % 45,0 % 46,7 %
Return on equity (ROE) % 7,8 % 7,2 %
Return on investment (ROI) % 9,4 % 6,5 %
Gearing % 45,9 % 46,3 %
Investments in fixed assets 332 253 1 122 957
% of turnover 1,8 % 1,5 % 1,8 % 1,6 %
Average number of employees 423 460
Number of employees at end
of period 412 434
Earnings per share 0,10 0,13 0,20 0,17
Equity per share 2,66 2,58
CONSOLIDATED CASH FLOW (1000 euro)
1-12/06 1-12/05
Cash flow from operations
Payments received from sales 60 367 59 526
Payments received from other operating income 305 251
Amounts paid for operating expenses -58 186 -57 767
Cash flow from business operations before
financial items and taxes 2 487 2 011
Financial costs paid -410 -325
Interests received from operations 114 79
Direct taxes paid -98 -49
Cash flow from operations 2 093 1 716
Cash flow from investment activities
Investments in tangible and intangible assets -1 096 -957
Sale of tangible and intangible assets 274 56
Acquisition of shares in subsidiaries -302 0
Sale of shares in subsidiaries 75 0
Sale of other investments -107 518
Cash flow from investment activities -1 156 -383
Cash flow from financing activities
Share issue 0 0
Paid dividends -745 -1 041
Received dividends 195 57
Short-term investments 0 0
Loss from the sale of short -term investments 0 0
Loan withdrawals 1 615 1 715
Loan repayments -704 -336
Cash flow from financing activities 361 395
Change in liquid assets 1 298 1 728
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Jan 1st Dec 31st 2006
(1000 euro)
Retain- Minor-
Share ed ity
Share premium earn- inte-
capital fund ings Total rest Total
Equity Jan 1st 2006 2 603 7 662 6 512 16 777 1 021 17 798
Net profit 1 296 113 1 409
Dividends paid -651 -94 -745
Investments available for
sale: Valuation gains or
losses recognised under
shareholders equity -21 -21
Financial instruments
recognised under
shareholders equity -75 -75
Translation differences -24 -24
Changes in minority -151 -151
interest
Equity Dec 31st 2006 2 603 7 662 7 037 17 302 889 18 191
BELTTON-GROUP PLC
BOARD OF DIRECTORS
Further information:
Heikki Vienola, CEO
tel. +358 9 5259 0050 or +358 50 65 110
e-mail: heikki.vienola@beltton.fi
Sirpa Väisänen, IR Officer
Tel. +358 9 5259 0050 or +358 400 943 243
e-mail: sirpa.vaisanen@beltton.fi
DISTRIBUTION
www.beltton.com
The Helsinki Stock Exchange
Key media
Beltton-Group Plc Financial Statements Bulletin for Financial Period 1 January - 31 December 2006
| Source: Wulff-Yhtiöt Oyj