Silmäasema Oyj
Stock Exchange Release
16 August 2019 at 8:00 a.m. EET
Silmäasema Oyj half-year financial report 1 January –30 June 2019
Silmäasema’s net sales and profitability continued to develop strongly
Silmäasema arranges today news conference and conference call for media and analysts at 10:30 am Finnish time. Details of the events can be found at the end of this release.
This is a summary Silmäasema's half year financial report for January-June 2019. The complete report is attached to this release and also available at https://company.silmaasema.fi/en/
April–June 2019 in brief
- Net sales increased by 5.4% compared with April–June 2018, amounting to EUR 34.5 million (32.8). The like-for-like net sales grew by 5.3%.
- The adjusted EBITDA* increased by 74.6% and was EUR 5.7 million (3.3), or 16.6% of net sales (10.0%). Without the impact of IFRS 16, the adjusted EBITDA would have been 11.2% of net sales (10.0%).
- The adjusted operating result* increased by 32.6% to EUR 2.4 million (1.8).
January–June 2019 in brief
- Net sales increased by 4.9% compared with January–June 2018, amounting to EUR 66.7 million (63.6). The like-for-like net sales grew by 3.6%.
- The adjusted EBITDA* increased by 80.6% and was EUR 11.0 million (6.1), or 16.5% of net sales (9.6%). Without the impact of IFRS 16, the adjusted EBITDA would have been 10.9% of net sales (9.6%).
- The adjusted operating result* increased by 34.9% to EUR 4.3 million (3.2).
- Cash flows from operating activities* developed strongly and amounted to EUR 9.5 million (4.0).
- Net debt* was EUR 51.5 million (35.0) at the end of the period.
- The net debt to adjusted EBITDA ratio* on 30 June 2019 was 3.1 (3.2).
- Basic earnings per share improved to EUR 0.15 (0.08).
The figures for 2018 are from the audited financial statements. The quarterly figures are unaudited. Figures in parentheses refer to the comparable period in 2018, and “comparison period” refers to the comparable period in the previous year, unless otherwise mentioned.
Outlook for 2019 (unchanged)
Silmäasema expects its full-year, like-for-like net sales to be at the previous year’s level and its adjusted EBITDA margin to be at the previous year’s level or slightly better (2018: 9.6%), excluding the effect of the IFRS 16 standard, which was adopted at the beginning of 2019.
*IFRS 16 affects the comparability of the reported figures
At the beginning of the year, Silmäasema adopted the IFRS 16 Leases standard, which entered into force on 1 January 2019. The figures reported for April–June and January–June 2019 are not comparable with the previous year’s figures, as they include items based on the adoption of the IFRS 16 standard. The impact of the adoption of the IFRS 16 standard on the key figures is presented in the “Impact of IFRS 16 on the key figures” table. The data in parentheses for the comparison period have not been adjusted for the IFRS 16 standard. There is more information on the adoption of the standard in Note 5.3 to the half year financial report on pages 32-33.
Key figures
| EUR thousand, unless otherwise stated | 4–6/2019 | 4–6/2018 | Change, % | 1–6/2019 | 1–6/2018 | Change, % | 1–12/2018 |
| Net sales | 34,542 | 32,757 | 5.4% | 66,732 | 63,627 | 4.9% | 122,873 |
| Comparable net sales growth, % | 5.3% | -0.9% | 3.6% | -1.6% | -1.6% | ||
| EBITDA* | 5,583 | 2,752 | 102.8% | 10,770 | 5,273 | 104.3% | 11,443 |
| Adjusted EBITDA*,** | 5,737 | 3,286 | 74.6% | 10,985 | 6,082 | 80.6% | 11,765 |
| - Adjusted EBITDA*, % | 16.6% | 10.0% | 16.5% | 9.6% | 9.6% | ||
| Operating result | 2,170 | 1,277 | 69.9% | 4,044 | 2,395 | 68.9% | 5,492 |
| Adjusted operating result*,** | 2,410 | 1,818 | 32.6% | 4,349 | 3,224 | 34.9% | 5,844 |
| - Adjusted operating result*, % | 7.0% | 5.5% | 6.5% | 5.1% | 4.8% | ||
| Basic earnings per share, EUR* | 0.08 | 0.05 | 0.15 | 0.08 | 0.23 | ||
| Net debt / Adjusted EBITDA* | 3.1 | 3.2 | 2.4 | ||||
| Investments – operational | 611 | 4,947 | -87.7% | 6,716 | |||
| Investments – acquisitions | 1,024 | 1,053 | -2.7% | 1,775 | |||
| Investments – total | 1,635 | 6,000 | -72.7% | 8,491 | |||
| Number of locations, Silmäasema chain | 172 | 180 | -4.4% | 181 |
* The key figure is not comparable due to the adoption of the IFRS 16 standard at the beginning of 2019.
** Silmäasema presents both its adjusted EBITDA and adjusted operating result, which have been adjusted for significant extraordinary items. It is the company’s view that the adjusted EBITDA best illustrates the profitability development of its business operations.
Impact of IFRS 16 on the key figures
| EUR thousand, unless otherwise stated | Reported 4–6/2019 | Without IFRS 16 4–6/2019 | IFRS 16 change | Reported 4–6/2018 | Reported 1–6/2019 | Without IFRS 16 1–6/2019 | IFRS 16 change | Reported 1–6/2018 |
| EBITDA | 5,583 | 3,659 | 1,924 | 2,752 | 10,770 | 6,985 | 3,786 | 5,273 |
| Adjusted EBITDA | 5,737 | 3,870 | 1,867 | 3,286 | 10,985 | 7,256 | 3,729 | 6,082 |
| Adjusted EBITDA, % | 16.6% | 11.2% | 5.4% points | 10.0% | 16.5% | 10.9% | 5.6% points | 9.6% |
| Operating result | 2,170 | 2,097 | 73 | 1,277 | 4,044 | 3,899 | 146 | 2,395 |
| Adjusted operating result | 2,410 | 2,337 | 73 | 1,818 | 4,349 | 4,203 | 146 | 3,224 |
| Profit before taxes | 1,632 | 1,730 | -98 | 909 | 3,013 | 3,213 | -200 | 1,684 |
| Profit (loss) for the period | 1,185 | 1,263 | -78 | 646 | 2,194 | 2,354 | -160 | 1,163 |
| Basic earnings per share, EUR | 0.08 | 0.09 | -0.01 | 0.05 | 0.15 | 0.17 | -0.01 | 0.08 |
| Cash flow from operating activities | 9,466 | 6,082 | 3,384 | 4,005 | ||||
| Net debt | 51,463 | 24,149 | 27,314 | 35,047 | ||||
| Net debt / Adjusted EBITDA (leverage) | 3.1 | 1.9 | 1.2 | 3.2 | ||||
| Gearing, % | 120.2% | 56.1% | 64.1% points | 87.5% | ||||
| Equity ratio | 34.4% | 44.2% | -9.8% points | 42.0% | ||||
| Return on capital employed, % (ROCE) | 3.7% | 5.6% | -1.9% points | 3.1% | ||||
| Return on equity, % (ROE) | 5.2% | 5.5% | -0.4% points | 3.0% |
CEO Jussi Salminen:
“During the first half of the year, we continued to focus on the cornerstones of our chain-based business, as launched last year: building the operating conditions, developing our network of sites and profitable growth. Reviewing the first half of the year, we are delighted to see that our profitability has continued to develop in the right direction. This was the third consecutive quarter in which Silmäasema’s adjusted EBITDA has improved year-on-year.
In January–June 2019, Silmäasema’s net sales and adjusted EBITDA improved strongly during both the first and second quarters. In addition, the cashflow from operations developed strongly. The favourable development is based on an overall improvement in the performance of optical retail, which plays a decisive role with regard to the Group’s net sales. With regard to the eye clinics, we still have work to do.
In line with what we announced earlier, we have identified opportunities outside our personnel expenses to streamline our operations and optimise our cost structure. We are seeking to reduce costs gradually by around EUR 2 million by the end of 2020. The implementation of these measures has progressed faster than planned during the first half of the year.
The Optical Retail and Eye Healthcare segment improved its net sales and result markedly. The number of customers visiting our stores increased and we succeeded in serving them expertly and profitably. We will continue to actively develop our network, and we will systematically revise our store locations, opening times and the services they offer. The continuous improvement of the knowledge and skills of our experts and customer service personnel is at the core of our development efforts.
I am not satisfied with the performance of the Eye Clinics segment. Net sales and EBITDA were especially burdened by the lower sales of other services than refractive and cataract surgeries. In addition, the adjusted EBITDA was burdened by the measures implemented to increase volumes. These measures have an immediate effect on expenses, but their impact on the result typically becomes visible only over the longer term.
We have today published Silmäasema’s updated strategy and financial targets for the period 2020-2022. Silmäasema’s goal is to renew the eyesight market and grow profitably. We seek to develop into customers’ preferred good eyesight partner that comprehensively responds to their changing needs and offers the most suitable solutions for good eyesight for people of different ages, in various environments and situations and for all eye healthcare issues.
Company’s growth and profitability will be based on becoming customers’ preferred choice and the leading expert in eye healthcare, renewing and growing the eyesight market, and improving performance and profitability.
We will present the strategy and its implementation towards the end of the year, both at our Capital Markets Day on 18 September 2019, and at other investor meetings and private investor events.
I started as CEO at the beginning of 2019. Now that the first half-year has passed, I would like to take this opportunity to thank our employees for the results we have achieved together so far and our customers for their trust Silmäasema was selected as the most widely trusted optician store in Finland for the second consecutive time. Overall, we are satisfied with our first-half result and our progress in terms of our priorities for 2019.”
Audiocast and conference call for analysts and media
A briefing for investment analysts and the media will be arranged on Friday 16 August 2019 at 10:30 a.m. EET through a live audiocast combined with a conference call. The briefing will be hosted by CEO Jussi Salminen and CFO Sari Nordblad.
Follow the live audiocast at https://silmaasema.videosync.fi/2019-q2-results
Conference call numbers:
Finland +358 (0) 981 710 310
UK +44 333 300 0804
USA +185 585 706 86
Sweden +46 856 642 651
The participants joining the conference call will be asked to provide the following PIN code: 20923375#
Recording of the audiocast and conference call as well as Finnish audiocast presentations will be later available on the company’s website.
Silmäasema’s Financial Reporting in 2019
Interim Report January – September 8 November 2019
SILMÄASEMA OYJ
Board of Directors
Additional information
CEO Jussi Salminen, tel. +358 40 834 5818, jussi.m.salminen(a)silmaasema.fi
CFO Sari Nordblad, tel. +358 50 552 7247, sari.nordblad(a)silmaasema.fi
Head of Communications and Investor Relations Mikko Merisaari, tel. +358 50 521 4055, mikko.merisaari(a)silmaasema.fi
Silmäasema is a Finnish company, which offers all products and services for optical retail and eye healthcare nationwide. Silmäasema is the largest private eye clinic provider offering eye surgeries and the second largest optical retail chain in Finland. The Silmäasema chain has nearly 150 stores and 14 eye clinics in Finland as well as nine stores in Estonia. The Silmäasema chain employs over 700 eye healthcare professionals. Silmäasema's Group net sales were EUR 122,9 million in 2018 and adjusted EBITDA was EUR 11.8 million.
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