Silmäasema Oyj Interim Report 1 January–31 March 2019
Silmäasema Oyj
Stock Exchange Release
17 May 2019 at 8:00 a.m. EET
Silmäasema’s net sales and adjusted EBITDA increased in January-March
January–March 2019 in brief
The figures for 2018 are from the audited Financial Statements. The quarterly figures are unaudited. The figures in parenthesis 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 reported figures
Silmäasema adopted the IFRS 16 Leases standard that entered into force on 1 January 2019 at the start of the financial period. The figures reported for January-March 2019 are not comparable with the figures for the comparison period, as they include items based on the adoption of IFRS 16. The impact of the adoption of IFRS 16 on key ratios is presented in the key figures in the table “Impact of IFRS 16 on key figures”. Comparative period data in parenthesis have not been amended in accordance with IFRS 16 standard. There is more information on this in Note 5.3 to the Interim Report on pages 27-28.
Key figures
| EUR thousand, unless otherwise stated | 1–3/2019 | 1–3/2018 | Change, % | 1–12/2018 |
| Net sales | 32,191 | 30,870 | 4.3 % | 122,873 |
| Like-for-like net sales growth, % | 1.8 % | -2.4 % | -1.6 % | |
| EBITDA | 5,187 | 2,520 | 105.8 % | 11,443 |
| Adjusted EBITDA* | 5,248 | 2,797 | 87.6 % | 11,765 |
| - adjusted EBITDA, % | 16.3 % | 9.1 % | 9.6 % | |
| Operating result | 1,874 | 1,118 | 67.7 % | 5,492 |
| Adjusted operating result* | 1,939 | 1,406 | 37.9 % | 5,844 |
| - adjusted operating result, % | 6.0 % | 4,6 % | 4.8 % | |
| Basic earnings per share, EUR | 0.07 | 0.04 | 0.23 | |
| Net debt / adjusted EBITDA | 3.5 | 2.8 | 2.4 | |
| Investments – operational | 155 | 3,107 | -95.0 % | 6,716 |
| Investments – acquisitions | 496 | 694 | -28.5 % | 1,775 |
| Investments – total | 651 | 3,801 | -82.9 % | 8,491 |
| Number of locations, Silmäasema chain | 179 | 177 | 181 |
*) The key figure is not comparable due to the IFRS 16 standard that was adopted 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 key figures
| EUR thousand, unless otherwise stated | Reported 1-3/2019 | Excluding IFRS 16 1-3/2019 | Effect of IFRS 16 adoption | Reported 1-3/2018 |
| EBIDTA | 5,187 | 3,325 | 1,862 | 2,520 |
| Adjusted EBITDA | 5,248 | 3,386 | 1,862 | 2,797 |
| Adjusted EBITDA, % | 16.3 % | 10.5 % | +5,8 p.p. | 9.1 % |
| Operating result | 1,874 | 1,802 | 73 | 1,118 |
| Adjusted operating result | 1,939 | 1,867 | 73 | 1,406 |
| Profit before taxes | 1,381 | 1,483 | -102 | 775 |
| Profit for the period | 1,009 | 1,091 | -82 | 516 |
| Earnings per share (EPS) undiluted, EUR | 0.07 | 0.08 | -0.01 | 0.04 |
| Cashflow from operations | 6,970 | 5,283 | 1,687 | 4,386 |
| Net debt | 50,100 | 22,885 | 27,215 | 32,703 |
| Net debt / Adjusted EBITDA (leverage) | 3.5 | 1.9 | 2.8 | |
| Gearing | 116.4 % | 53.1 % | +63.4 p.p. | 83.1 % |
| Equity Ratio | 34.6 % | 44.3 % | -9.7 p.p. | 40.3 % |
| Return on Capital Employed, % (ROCE) | 1.7 % | 2.3 % | -0.5 % p.p. | 1.4 % |
| Return on equity, % (ROE) | 2.4 % | 2.6 % | -0.2 % p.p. | 1.3 % |
CEO Jussi Salminen:
“Silmäasema’s net sales and adjusted EBITDA improved on the previous year in January-March. In Optical retail we succeeded well throughout the network and group’s net sales increased overall by 4.3% to EUR 32.2 million, and our like-for-like net sales grew by 1.8%. Eye Clinics suffered from lower volumes than the previous year.
As part of our development programme we have identified opportunities to streamline our operations and optimise our cost structure outside our personnel expenses. We estimate the potential impact on profit of the identified opportunities to be approximately EUR 2 million. This would be achieved gradually by the end of 2020. In part, the impact can already be seen in the result for the first quarter.
Our financial reporting was updated at the beginning of the year to comply with the IFRS 16 Leases standard and this has had an impact on, among other things, the reported and adjusted EBITDA since the beginning of the year. Reported according to the new standard, the first-quarter adjusted EBITDA was EUR 5.2 million including the EUR 1.9 million impact of the adoption of the IFRS 16 standard. Excluding the impact of the adoption of IFRS 16 standard, the adjusted EBITDA improved by 21% on the comparison period.
The Group’s cash flows from operating activities developed exceptionally well and increased almost 60% to EUR 7.0 million. The impact of the adoption of the IFRS 16 standard was EUR 1.7 million. Despite the growth of net sales and the network, our fixed costs remained at the level of the comparison period excluding the impact of the IFRS 16 standard.
In Optical Retail net sales increased by 9.5% to EUR 23.2 million. We managed to increase our sales while retaining a good gross profit margin. The segment’s adjusted EBITDA improved by 58%, excluding the effect of the adoption of the IFRS 16 standard. As we have previously communicated, we develop our network in a customer-focused manner and as the year progresses, we systematically make changes to the locations of stores, their opening times and the services they offer. The development of the network includes the evaluation of our Estonian operations as a whole in addition to our Finnish operations. Active development of the network of locations also includes store closures and openings.
The Eye Clinics segment’s net sales declined 7.2% to EUR 8.9 million and this reflected directly on the segment’s profitability. The segment’s adjusted EBITDA declined 20%, excluding the effect of the adoption of the IFRS 16 standard. In our view there has not been any significant change in the size of the total refractive and cataract surgery market in Finland. We have analysed the reasons for the decline in the number of procedures and have launched our first steps to improve the volumes. These include, among others, boosting customer acquisition, strengthening cross-selling, and developing cooperation with our doctors.
In 2019, we will focus more on improving productivity. Our priorities for the current year are improving the operational preconditions, developing our network and improving profitable growth. In addition, we have launched a strategy process during the review period, the results of which we will report more in the second half of the year.
Our staff through the organization has done a lot of work and achieved good results together in the early part of the year. As a whole, we are pleased with both the results of the early part of the year and the progress of this year's priorities.”
Audiocast and conference call for analysts and media
A briefing for investment analysts and the media will be arranged on Friday 17 May 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 Anu Kankkunen.
Follow the live audiocast at https://silmaasema.videosync.fi/2019-q1-results
Conference call numbers:
Finland +358 (0) 981 710 310
UK +44 333 300 0804
USA +1 631 9131 422
Sweden +46 856 642 651
The participants joining the conference call will be asked to provide the following PIN code: 38780004#
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
Half Year Financial Report 16 August 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 Anu Kankkunen, tel. +358 50 669 69, anu.kankkunen(a)silmaasema.fi
Acting 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 over 150 stores and 14 eye clinics in Finland as well as ten 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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