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Puuilo Plc, Financial Statements Release 2023 - A year of exemplary growth
PUUILO PLC, FINANCIAL STATEMENTS RELEASE, 27 MARCH 2024, at 8.30 a.m. (EET)
A year of exemplary growth
Highlights Q4/2023 -
Net sales increased by 12.4% (+9.7%) and were EUR 76.8 million (68.3)
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Like-for-like store net sales increased by 1.6% (+6.8%)
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Online store net sales decreased by 14.1%. (+12.0%)
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Gross profit was EUR 28.2 million (24.8) and gross margin was 36.7% (36.2%)
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Adjusted EBITA was EUR 10.7 million (9.7), which corresponds to an adjusted EBITA margin of 13.9% (14.2%)
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EBIT was EUR 10.2 million (9.4) which corresponds to 13.3% of net sales (13.8%)
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Operating free cash flow was EUR -1.4 million (3.9)
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Earnings per share were EUR 0.09 (0.08)
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Earnings per share excluding listing expenses were EUR 0.09 (0.08)
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Two new stores were opened during the fourth quarter (two new stores)
Highlights FY2023 -
Net sales increased by 14.2% (+9.7%) and were EUR 338.4 million (296.4)
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Like-for-like store net sales increased by 5.2% (+5.5%)
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Online store net sales decreased by 11.2% (+3.9%)
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Gross profit was EUR 123.9 million (107.2) and gross margin was 36.6% (36.2%)
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Adjusted EBITA was EUR 54.1 million (48.8), which corresponds to an adjusted EBITA margin of 16.0% (16.5%)
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EBIT was EUR 52.8 million (47.0) which corresponds to 15.6% of net sales (15.9%)
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Operating free cash flow was EUR 54.8 million (52.7)
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Earnings per share were EUR 0.46 (0.41)
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Earnings per share excluding listing expenses were EUR 0.46 (0.42)
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Five new stores were opened during the reporting period (three new stores)
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Board's dividend proposal EUR 0.38 per share, proposed to be paid in two instalments.
Figures are in millions of euros unless otherwise stated and have been rounded. Hence the sum of individual figures may differ from the total shown. Puuilo's financial year starts on 1 February and ends on 31 January the following year. The figures in parentheses refer to the comparison period the previous year, unless otherwise stated. The information in this report is unaudited.
Key figures |
EUR million
| Q4/2023 |
Q4/2022 |
2023 |
2022 | |
Net sales
|
76.8
|
68.3
|
338.4
|
296.4
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Net sales development (%)
|
12.4%
|
9.7%
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14.2%
|
9.7%
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Like-for-like store net sales development (%)
|
1.6%
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6.8%
|
5.2%
|
5.5%
| |
Online store net sales development (%)
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-14.1%
|
12.0%
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-11.2%
|
3.9%
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Gross profit
|
28.2
|
24.8
|
123.9
|
107.2
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Gross margin (%)
|
36.7%
|
36.2%
|
36.6%
|
36.2%
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Adjusted EBITA*
|
10.7
|
9.7
|
54.1
|
48.8
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Adjusted EBITA* margin (%)
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13.9%
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14.2%
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16.0%
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16.5%
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EBITA*
|
10.7
|
9.7
|
54.1
|
48.2
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EBITA* margin (%)
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13.9%
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14.2%
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16.0%
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16.2%
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EBIT
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10.2
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9.4
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52.8
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47.0
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EBIT margin (%)
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13.3%
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13.8%
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15.6%
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15.9%
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Net income
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7.3
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6.7
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38.7
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35.1
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EPS (EUR)
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0.09
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0.08
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0.46
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0.41
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EPS excl. listing expenses (EUR)
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0.09
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0.08
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0.46
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0.42
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Dividend (EUR per share)
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0.38**
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0.34
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Operating free cash flow
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-1.4
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3.9
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54.8
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52.7
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Net debt / adjusted EBITDA
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1.5
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1.5
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1.5
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1.5
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Number of stores (end of period)
|
42
|
37
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42
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37
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Number of personnel converted into full-time employees (FTE)
|
762
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669
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791
|
693
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Puuilo's financial year starts on 1 February and ends on 31 January the following year.
* Operating profit before the amortisation impairment of intangible rights
** Proposal of Board of Directors
Outlook for the financial year 2024
Puuilo forecasts that net sales will be EUR 380 - 410 million and the adjusted operating profit (adjusted EBITA) in euros will be EUR 60 - 70 million in the financial year 2024.
The forecast includes elements of uncertainty arising from change in purchase power and customer behaviour driven by inflation and interest rate levels. In addition, political strikes in Finland, geopolitical crises and tensions may have an impact on the availability and price level of goods.
Puuilo's long-term targets
There have been no changes in Puuilo's long-term financial targets or growth expectations, announced in connection with the listing.
Puuilo's long-term targets for the financial years 2021 - 2025:
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Growth: Net sales above EUR 400 million by the end of financial year 2025 with annual organic growth in excess of 10%.
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Profitability: Adjusted EBITA margin between 17 - 19% of net sales.
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Dividend policy: Puuilo aims to distribute at least 80% of net income for each financial year in dividends, depending on the company's capital structure, financial position, general economic and business conditions, and future prospects.
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Leverage: Net debt to adjusted EBITDA below 2.0x.
Puuilo will achieve the long-term net sales target clearly before the end of the strategy period. Updated strategy will be published at Investor Day on 23 April 2024.
CEO Juha Saarela's review
Puuilo's performance was strong during the financial year 2023. The year was challenging in the retail sector, but Puuilo's defensive concept proved its worth and grew significantly faster than the market in a challenging inflationary environment. We continued our growth according to the strategy and our performance holds up under comparison.
In Q4, Puuilo's net sales increased by 12.4% and was EUR 76.8 million. Like-for-like net sales grew by 1.6%. Similarly, the number of customers increased by over 12%. During Q4, we opened new stores in Konala, Helsinki, and Varisto, Vantaa. In Q4, the gross margin was 36.7%, and it increased notably by 0.5 percentage points. The increase in the gross margin can be credited to reduced logistics costs and strong sales growth of our private label products. Adjusted EBITA was EUR 10.7 million, which corresponds to 13.9% of net sales. Operating expenses increased, due rather significant growth in personnel expenses, mainly due to new stores and salary increases.
For the full financial year, the net sales increased by 14.2% to EUR 338.4 million. Like-for-like sales grew by 5.2%. During the Q4, we opened five new stores, which all have performed well since their opening. Cumulative gross margin was 36.6% (36.2%) and increased by 0.4 percentage points. We consider this a significant achievement, especially considering the current economic and competitive environment. The increase in cumulative gross margin was driven by reduced logistics costs, increased sales and share of our private label products, improved inventory turnover, and a shift in sales mix towards products in lower price points. For the financial year, our private label products accounted for 20.6% of the total revenue. Adjusted EBITA for the full financial year increased to EUR 54.1 million, which represents 16.0% of net sales. Last year's growth in net sales was driven by a rise in the number of customers. Puuilo is attracting new customers from both competitors and, naturally, through the opening of new stores. The growth in number of customers in like-for-like stores is a clear indication of strong demand and signals growth potential.
The financial year was a solid performance from us, although our relative profitability slightly decreased. High inflation affects Puuilo's cost structure through salaries, rents, energy, and other expenses. In the current financial year, we are paying even closer attention to costs and aim to increase efficiency, particularly by roll-outing of order replenishment (Relex) and work shift planning systems. The new systems are now in use, and the results will begin to show during this financial year. Additionally, we believe that significant focus in the sales of our private label products will bring us even better gross margin. Logistics efficiency will continue to improve due to the centralization of warehouses. The effect of the measures will be realized during the current financial year.
We approach the new financial year with great confidence. Last year Puuilo acquired three stores from Hurrikaani Oy, that have now progressed to the opening phase. Among these, the Nokia store was already opened in February with great excitement and the aroma of grilled sausages. The opening of the Ylöjärvi store will be celebrated on the day of this financial statement's release. The final store remaining for opening is Forssa. Following this, in the early summer, we will open the new store in Lahdesjärvi, Tampere. Further store openings later in the year will be announced separately. Thanks to the spring store openings, we are off to a flying start in the new financial year, and we believe that this financial year will be very successful as well.
We forecast, that our net sales for the financial year will fall within the range of EUR 380 - 410 million and expect adjusted EBITA to range between EUR 60 - 70 million. The Board of Directors proposes for the Annual General Meeting that a dividend of EUR 0.38 per share will be distributed, which corresponds approximately 83% of the earnings per share and exceeds previous year's dividend by more than 10%.
Thanks to Puuilo's solid growth rate, the company will achieve the long-term net sales target clearly before the end of the strategy period. Updated strategy will be published at Investor Day on 23 April 2024
To conclude this review of a strong year for Puuilo, I want to thank our customers, personnel and shareholders and wish everyone a happy and sunny spring!
Significant events of the reporting period
Members of Puuilo's Shareholders' Nomination Board
On 27 November 2023, Puuilo announced that representatives of the three largest shareholders registered in Puuilo Plc's shareholder register as of 2 October 2023, are elected to the Puuilo's Shareholders' Nomination Board along with the Chairman of the Board of Directors, Lasse Aho, as an expert member. Puuilo Plc's Shareholders' Nomination Board is a body of the Company's shareholders responsible for preparing proposals for the election and remuneration of the members and the Chairman of the Board of Directors as well as the remuneration of Board committee members to the Annual General Meeting 2024 and, when necessary, to the Extraordinary General Meeting.
The three largest shareholders have nominated following members to Puuilo's Shareholders Nomination Board: Puuilo Invest Holding AB (Adelis Equity Partners), represented by John-Matias Uuttana, Markku Tuomaala, represented by Toni Kemppinen, Keskinäinen Eläkevakuutusyhtiö Ilmarinen, represented by Esko Torsti.
Significant events after the end of the reporting period
Flagging notification
On 9 February 2024 Puuilo received a notification in accordance with the Chapter 9, Section 5 of the Finnish Securities Market Act from Evli Plc, according to which Evli Rahastoyhtiöt Ltd's (100% owned by Evli Plc) direct holdings in shares and votes of the Company fell below the flagging threshold of 5 percent and was 4.94% after the transaction.
Proposal for profit distribution
The Board of Directors of Puuilo Plc proposes for the Annual General Meeting to be held on 15 May 2024 that a dividend of EUR 0.38 per share be paid for the financial year 1 February 2023 - 31 January 2024 based on the adopted balance sheet on shares held outside the company. The remaining distributable assets will remain in equity. The Board of Directors proposes that the dividend be paid in two instalments.
The first instalment, EUR 0.19 per share, will be paid to shareholders registered in the company's register of shareholders kept by Euroclear Finland Ltd on the instalment's record date 22 May 2024. The board proposes that the first dividend instalment payment date be 29 May 2024.
The second instalment, EUR 0.19 per share, will be paid to shareholders registered in the company's register of shareholders kept by Euroclear Finland Ltd on the instalment's record date 17 October 2024. The board proposes that the second instalment payment date be 24 October 2024. The Board proposes it be authorised to decide, if necessary, on new dividend payment record dates and pay dates for the second instalment, if the rules and statutes of the Finnish book-entry system change or otherwise so require.
As at the date of the proposal for the distribution of profit, 26 March 2024, a total of 84,221,953 shares were held outside the company, and the corresponding total amount of dividends was EUR 32,004,342.14
The distributable assets of Puuilo Plc total EUR 116,453,046.29 which profit for the financial year is EUR 44,096 363.66 The proposed dividend corresponds to approximately 83% of Puuilo Group's net income for the financial year.
Financial statements
The Annual Reporting 2023 including the Financial statements and the Report by the Board of Directors, Sustainability Report, Corporate governance statement as well as Remuneration report will be published during week 16.
Annual General Meeting
Puuilo's Annual General Meeting is planned for Wednesday 15 May 2024. The meeting will be convened by the company's Board of Directors separately at a later date.
Next financial reports
Puuilo's financial year starts on 1 February and ends on 31 January the following year. The company publishes Business reviews for the first and third quarter, a Half-year financial report and a financial statements release.
Business review Q1 February - April 2024 on 12 June 2024
Half-year financial report February - July 2024 on 12 September 2024
Business review Q3 February - October 2024 on 11 December 2024
All financial reports are published in English and in Finnish and are available at: https://www.investors.puuilo.fi/en/investors/reports_and_presentations.
Conference call in English and webcast in Finnish
The report will be presented for analysts, investors, and the media on the publication date in English at 10:00 am EET (9:00 am CET) and in Finnish at 11.30 am EET (10:30 am CET).
The conference call in English can be followed live at https://puuilo.videosync.fi/q4-2023. Asking questions requires participation in the conference call. You can access the teleconference by registering on the linkhttps://palvelu.flik.fi/teleconference/?id=50048345. After the registration you will be provided phone numbers and a conference ID to access the conference. If you wish to ask questions, please, dial *5 on your telephone keypad to enter the queue.
The webcast in Finnish will begin at 11.30 am EET athttps://puuilo.videosync.fi/2023-q4-tulos.
Recordings of both events will be available later the same day at Puuilo's Investors website at https://www.investors.puuilo.fi/en/investors/reports_and_presentations.
For further information, please contact:
Juha Saarela, CEO, mobile phone: +358 50 409 7641
Ville Ranta, CFO, mobile phone: +358 40 555 4995
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PUUILO OYJ 
