Panostaja Oyj Financial Statement Bulletin December 11, 2020 at 10.00 a.m.
The coronavirus weakens net sales but streamlining measures support the result
August 1, 2020-October 31, 2020 (3 months)
- Net sales increased in two of the seven segments. Net sales for the Group as a whole weakened by 15% to MEUR 40.7 (MEUR 47.8).
- Net sales improved in two of the seven segments. The entire Group’s EBIT declined from the reference period, standing at MEUR -0.7 (MEUR 1.7). The profit/loss for the review period is encumbered by the MEUR 3.3 goodwill impairment loss of the Carrot segment. The reference period’s profit/loss includes a cost provision of MEUR 1.3.
- Grano’s net sales for the review period declined by 13% from the reference period in the previous year. EBIT strengthened to MEUR 3.2 (MEUR 1.8).
- Earnings per share (undiluted) were -4.7 cents (-0.5 cents).
November 1, 2019-October 31, 2020 (12 months)
- Net sales increased in two of the seven segments. Net sales for the Group as a whole weakened by 13% to MEUR 159.0 (MEUR 182.9).
- The Group’s operational EBIT remained at the level of the reference period, despite the drop in net sales.
- EBIT improved in five of the seven segments. The entire Group’s EBIT declined from the reference period, standing at MEUR 0.8 (MEUR 3.8). The profit/loss for the review period is encumbered by the MEUR 3.3 goodwill impairment loss of the Carrot segment. The reference period’s EBIT includes sales profit for Ecosir Group in the amount of MEUR 1.6, Grano’s MEUR 1.0 cost provision related to employer-employee negotiations and the MEUR 0.9 impairment related to restructuring measures related to ERP systems.
- Grano’s net sales for the review period declined by 15% from the reference period in the previous year. EBIT totaled MEUR 4.8 (MEUR 4.1). The net sales were particularly affected by the drop in demand due to the coronavirus pandemic. However, the decline in net sales was successfully compensated for with significant cost adaptations that took the form of lay-offs and cutbacks.
- In the review period, Panostaja made an agreement on selling the majority of Tilatukku Group Oy’s share capital to the acting management. Panostaja Group recorded a sales loss of about MEUR 0.5 for the trade.
- Earnings per share (undiluted) were -8.3 cents (3.1 cents).
Proposal for the distribution of profits: The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.03 per share be paid for the past financial period.
CEO Tapio Tommila:
“During the twelve-month review period, the total net sales dropped by 13% from the reference period. However, the operational EBIT for the segments remained at the level of the reference period. Despite the coronavirus pandemic that began in the spring, profitability was maintained thanks to the quick reactions of the segments and the streamlining measures performed.
In the fourth quarter of the financial period, the total net sales of Panostaja’s segments dropped by 15%. The most significant drop in net sales took place at Grano and Carrot, which have continued to suffer from the impacts of the coronavirus pandemic on demand. Due to the persistent drop in Carrot’s net sales, we recorded a MEUR 3.3 impairment on the goodwill assigned to Carrot, which dragged Panostaja’s reported EBIT for the fourth quarter down to MEUR -0.7. Despite the clear drop in its net sales, Grano was the segment to achieve the highest increase in net sales during the fourth quarter. Oscar Software also improved its EBIT significantly over the reference period as net sales continued to grow.
Grano’s result was supported by significant streamlining and adaptation measures, which were continued until the end of the financial period. The decline in the traditional printing business was partially evened out with new business opportunities, which generated net sales since spring. In the fourth quarter, Grano initiated employer-employee negotiations that aimed at improved structural efficiency in operations and an increase in customer orientation. The negotiations were finished at the beginning of November, and the operational restructuring and streamlining measures target about MEUR 3.4 in annual cost savings, about MEUR 1.0 of which are estimated to be realized in the 2021 financial year.
In the fourth quarter, Carrot’s net sales dropped by 40% from the reference period, and the loss in operational EBIT stood at MEUR -0.2 (MEUR 0.1). The goodwill impairment dragged the reported EBIT loss down to MEUR -3.5. The coronavirus pandemic and the related restrictions are still evident in business, but the company also continued the development project it began in spring with the aim of revitalizing the company’s operations and restore it to a path of growth.
The corporate acquisitions market, which recovered after the summer season, remained active in the period under review, and the availability of new opportunities has been high. The markets continue to provide opportunities for both new select acquisitions and divestments, and we will continue to actively explore new corporate acquisition opportunities.
The coronavirus pandemic and related impacts leveled out in Finland over the course of the fourth quarter. However, should it escalate, the second phase of the pandemic, which has strengthened in the country after the review period, may have significant impacts on the economy and Panostaja’s segments.”
Key Figures
| MEUR | Q4 | Q4 | 12 months | 12 months |
| 8/20- 10/20 | 8/19- 10/19 | 11/19- 10/20 | 11/18- 10/19 | |
| Net sales, MEUR | 40.7 | 47.8 | 159.0 | 182.9 |
| EBIT, MEUR | -0.7 | 1.7 | 0.8 | 3.8 |
| Profit before taxes, MEUR | -1.5 | 1.1 | -1.8 | 1.9 |
| Profit/loss for the financial period, MEUR | -1.5 | 0.4 | -3.4 | 2.5 |
| Earnings per share, undiluted (EUR) | -0.047 | -0.005 | -0.083 | 0.031 |
| Equity per share (EUR) | 0.82 | 0.96 | 0.82 | 0.96 |
| Operating cash flow (MEUR) | 4.5 | 3.2 | 23.6 | 10.8 |
| Division of the net sales by segment MEUR | Q4 | Q4 | 12 months | 12 months |
| Net sales | 8/20- 10/20 | 8/19- 10/19 | 11/19- 10/20 | 11/18- 10/19 |
| Grano | 29.0 | 33.3 | 109.9 | 129.7 |
| Helakeskus | 2.0 | 2.1 | 7.6 | 8.0 |
| Hygga | 1.1 | 1.1 | 4.1 | 4.7 |
| Heatmasters | 0.8 | 1.5 | 4.0 | 4.2 |
| CoreHW | 1.9 | 1.9 | 8.1 | 5.7 |
| Carrot | 3.1 | 5.4 | 14.5 | 20.8 |
| Oscar Software | 2.8 | 2.5 | 11.0 | 10.1 |
| Others | 0.0 | 0.0 | 0.0 | 0.0 |
| Eliminations | 0.0 | -0.1 | -0.2 | -0.3 |
| Group in total | 40.7 | 47.8 | 159.0 | 182.9 |
| Division of EBIT by segment MEUR | Q4 | Q4 | 12 months | 12 months |
| EBIT | 8/20- 10/20 | 8/19- 10/19 | 11/19- 10/20 | 11/18- 10/19 |
| Grano | 3.2 | 1.8 | 4.8 | 4.1 |
| Helakeskus | 0.1 | 0.2 | 0.5 | 0.5 |
| Hygga | -0.2 | -0.1 | -0.3 | -0.2 |
| Heatmasters | 0.0 | 0.3 | 0.3 | 0.2 |
| CoreHW | 0.1 | 0.3 | 0.5 | 0.4 |
| Carrot | -3.5 | 0.1 | -4.0 | -0.4 |
| Oscar Software | 0.2 | -0.1 | 1.1 | 0.2 |
| Others | -0.6 | -0.8 | -2.0 | -1.1 |
| Group in total | -0.7 | 1.7 | 0.8 | 3.8 |
Panostaja Group’s business operations for the current review period are reported in eight segments: Grano, Helakeskus, Heatmasters, Hygga, CoreHW, Carrot, Oscar Software and Others (parent company and associated companies).
Two associated companies, Gugguu Group Oy and Spectra Yhtiöt Oy, will issue reports for the review period. The profit/loss of the reported associated companies in the review period was MEUR 0.2 (MEUR 0.2), which is presented on a separate row in the consolidated income statement.
Prospects for the Next Financial Year
As regards the corporate acquisition market, plenty of opportunities are available and the market is active. The need to leverage ownership arrangements and growth opportunities will persist for SMEs, but the high market liquidity and increased price expectations of sellers are making the operating environment more challenging for corporate acquisitions. We will continue exploring new possible investment targets in accordance with our strategy and assess divestment possibilities as part of the ownership strategies of the investment targets.
It is thought that the demand situation for different investments will develop in the short term as follows:
- The demand for CoreHW and Oscar Software is good.
- The demand for Grano, Hygga, Helakeskus and Heatmasters is satisfactory.
- The demand for Carrot is poor.
The demand information presented above involves uncertainties relating to the possible escalation of the COVID-19 pandemic. This may impact the future development of Grano, Carrot and Hygga, in particular, and rapidly and dramatically change the estimate provided above.
Panostaja Oyj
Board of Directors
For further information, contact CEO Tapio Tommila, +358 (0)40 527 6311
Panostaja Oyj
Tapio Tommila
CEO
Attachment
