Financial Statement Jøtul Holdings S.A 31. December 2018

Jøtul Group Holdings S.A. – Q4 2018

Comments related to the financial statements 

Group net sales ended at MNOK 912 in 2018, compared to MNOK 906 in 2017. For 2018, this is MNOK 10 less than earlier communicated due to reclassification after IFRS15. This reclassification results in increased discounts of MNOK 10, and sales commissions decreased accordingly.

EBITDA ended at MNOK 87 in 2018, compared to MNOK 61 in 2017. For 2018, this is MNOK 4,7 less than communicated earlier. This is due to reclassification of a sales leaseback agreement from 2006. Jøtul Group entered a sales leaseback agreement related to the premises at Kråkerøy in 2006. Jøtul Group booked a profit from this transaction, but given the difficulty of deciding a fair market price for the property, management then decided to amortize the gain over 20 years. Since 2006, the yearly amortizing of MNOK 4,7 has been offset against lease expenses. The reclassification has no cash flow effect. For correct comparison the income statement for 2016 and 2017 have been reclassified accordingly.

The sales growth comes mainly from higher sales in North America and Norway. The growth in these markets was partly offset by a sales decline in France. The Group’s order backlog stood at MNOK 41 at the end of 2018, compared with MNOK 34 at the end of 2017.

Jøtul Group’s three largest markets are Norway, France and North America where Jøtul Group has a significant market position and enjoys strong brand recognition. These markets are currently experiencing a gradual transition towards modern products that will meet Ecodesign requirements for 2022, which is expected to have a positive impact on the key players in the industry included Jøtul. In France, demand for wood-fired products continues to decline, while the pellet market continues to grow. In Norway, the market momentum is good with increased demand during the last half of 2018 partly driven by high electricity prices. In North America demand has been strong throughout the year, driven by increased demand for gas products, as well as wood-fired products.

The Group’s gross margin increased in Q4 2018 compared with Q4 2017, mainly due to productivity improvements at the Kråkerøy factory in Norway. This margin improvement is partly offset by higher raw material costs related to metals and energy. Fixed costs have fallen substantially compared to 2017 due to reduced indirect headcount and the effect of the closure of the operations in Halden (Norway).

LTM non-recurring costs of MNOK 51,4 are related primarily to Project Craft, the acquisition by OpenGate Capital of Jøtul in February 2018 (MNOK 23,8), relocation of manufacturing from Scandinavia to Poland (MNOK 14,6), management fees (MNOK 5,7) and miscellaneous external charges (MNOK 7,3). In January 2019, Jøtul Group performed a successful tap issue of MNOK 90 to finance the relocation project. The project is running in accordance with plan and is planned to be finalized Q1 2020.

Total cash flow from operating activities fell from MNOK 58 in 2017 to MNOK 1 in 2018, mainly due to high inventory build-up in 2018 in preparation of the relocating of manufacturing, and other changes in operating assets and liabilities.

The Group’s capital investments in the year 2018 amounted to MNOK 33, which is the same level as in 2017.

The statement is unaudited.

For further information, please contact:
Jotul Group
Nils Agnar Brunborg
Tel: +47 906 05 578
E-mail: Nils.Brunborg@jotul.no