Rejlers AB (STO:REJL)
Focus on efficiency
» Sales increased by 32 percent to SEK 500.3 million (380.1)
» Operating profit/loss was SEK 4.9 million (18.9), which corresponds to an operating margin of 1.0 percent (5.0)
» The profit/loss after tax was SEK 1.1 million (13.9)
» Cash flow from operating activities totalled SEK -24.4 million (-23.3)
» Earnings per share before and after dilution amounted to SEK 0.12 (1.12)
» Sales increased by 29 percent to SEK 1,667.7 million (1,288.8)
» Operating profit/loss was SEK 21.5 million (61.9), which corresponds to an operating margin of 1.3 percent (4.8)
» Operating profit/loss adjusted for restructuring costs was SEK 31.2 million, which corresponds to an operating margin of 1.9 percent
» The profit/loss after tax was SEK 14.0 million (46.0)
» Cash flow from operating activities totalled SEK -27.0 million (21.4)
» Earnings per share before and after dilution amounted to SEK 1.06 (3.73)
Comments from the CEO and Group President, Peter Rejler
Development during the third quarter was poorer than anticipated in Rejlers Sweden and Rejlers Norway. The operating profit of SEK 4.9 million has been adversely affected by a billable hours ratio that is clearly lower than in the previous year. The holiday period, July and August, was significantly worse than expected. We did note some recovery in September.
The reorganisation of the business through streamlining, phasing out unprofitable areas and increasing the focus on the digitalisation of processes and IT solutions has not yet produced the desired effect. We have therefore initiated a further package of measures encompassing more sales activities, cost savings and improved monitoring of the business. We have also increased our focus on ensuring good employee utilisation and a good cash flow throughout the business.
Growth has remained good, with an increase in sales in the Group of 32 percent, of which 2 percentage points of the growth is organic. The acquisitions of Embriq in Norway and Orbion Consulting in Sweden have been well integrated into the business and have added new skills in the areas of IT solutions and ICT. Both of these acquisitions are contributing positively to the operating margin.
The market and demand for our services are generally good in Sweden and Norway, except within parts of the industrial segment in Sweden, where demand for nuclear power expertise has declined significantly. In Finland, we are delivering good results despite a difficult market. During the quarter, we have entered into major agreements with e.g. Serneke, Svenska Kraftnät, JM Norge, the Swedish Transport Administration and Lindbäcks Bygg.
In parallel with the package of measures, we are working with the digitalisation of the business and of our assignments. We are anticipating considerable growth in markets such as energy, the retail sector and transport. We are therefore now investing strategically in the digitalisation of infrastructure and smart handling of large volumes of data. At the same time as gathering all our expertise in the fields of IT and energy metering services under Rejlers Embriq, with a joint Nordic management, we are also launching Connected Stores, a new concept comprising IT solutions for the retail trade.
Our objective remains the same. We aim to improve the operating margin to 8 percent over time and to achieve our growth objective of 2020-3030-4040. Our focus is on becoming more efficient and more profitable.
Rejlers is one of the largest engineering consultancy firms in the Nordic region. Our 2,000 experts work with projects in the areas of Building and property, Energy, Industry and Infrastructure. At Rejlers, you will meet specialist engineers with the knowledge, cutting edge expertise and energy to achieve results. We are still experiencing rapid growth and can now be found in 80 locations in Sweden, Finland and Norway. Rejlers recorded revenue of SEK 1.9 billion in 2015 and its class B share is listed on Nasdaq Stockholm.
Rejlers AB (publ) is obliged by the EU market abuse directive and the law on the securities market to publish the information contained in this interim report. The information was provided by the above contact person for publication on 25 October 2016, at 08.00 CET. This report is also available in Swedish. This English report is a translation from Swedish. If there are any differences, the Swedish language report shall prevail.
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