Santa Fe Group Annual Report 2018 - Company announcement No 5/2019

Battling the market downturn

Consolidated revenue of the Santa Fe Group was EUR 214.2m in 2018 (EUR 248.6m), in line with the outlook published in connection with the sale of our activities in Australia in December 2018.Revenue in the continuing Moving and Relocation Services businesses decreased by 10.2% in local currencies to EUR 213.9m (EUR 243.3m).Revenue from Relocation Services grew by 2.6% in local currencies. Relocation Services constituted 24% (21%) of total revenue in 2018.EBITDA before special items reached EUR -1.0m (EUR 10.4m). The decline is mainly caused by the lower revenue, to some extent offset by fixed costs savings, in particular salary savings.Special Items was a cost of EUR -2.6m in 2018 containing primarily restructuring cost (income of EUR 13.1m). 2017 includes a non-recurring gain of EUR 17m from the divestment of the Records Management business.Impairment of goodwill and other intangibles reached EUR 41.6m (2017: reversal of EUR 0.9m) as goodwill and other intangibles, arising from the acquisition of Interdean in 2011, were fully impaired.The discontinued operations in Australia was a loss of EUR 13.9m (EUR 7.3m) including accumulated negative foreign exchange adjustments of EUR 6.1m, being recycled from other comprehensive income through the profit and loss.Net profit/loss in 2018 was a net loss of EUR 69.9m (2017: net profit of EUR 4.3m)

             
            Outlook for 2019

As a result of the declining overall market, we expect revenue for the continuing business to decline. The overall market for corporate moving is expected to decline 10-15%, countered by growth in our target segments.The adoption of IFRS16 as of 1 January 2019 will have an estimated positive impact of EUR 9m on reported EBITDA, as operating leases for our warehouses and offices are being capitalised in the financial reporting.The Group is embarking on a major restructuring programme, which can have a significant impact on revenue and EBITDA for the year. An Outlook for the year will be communicated once this restructuring programme has taken shape.

Santa Fe Group CEO Martin Thaysen comments on the results:

"2018 was a tough year for the global relocation industry, with declining activity levels across most markets. We did not meet our original financial objectives for the year, and the result for 2018 is clearly unsatisfactory.

We enter 2019 with a clear focus on securing immediate improvements to our financial performance. The sale of our activities in Australia in December 2018 has cleared the biggest challenge. We have launched a number of restructuring measures to reduce cost and enhance revenue in the very short term, and are seeing impact of these already in Q1.

We remain confident in our strategic direction and in our ability to deliver the turnaround in 2019, while meet the needs of our customers for high quality mobility solutions and service excellence."

Yours sincerely,

Santa Fe Group A/S

For additional information please contact:

Martin Thaysen, Group CEO, tel. +44 20 3691 8300, e-mail martin.thaysen@santaferelo.com

Christian Møller Laursen, Group CFO, tel. +44 20 8963 2514, e-mail Christian.laursen@santaferelo.com

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Santa Fe Group Annual Report 2018

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