Componenta Corporation Financial Statements Bulletin 1 January - 31 December 2014: Operating profit from business operations improved from previous year despite fall in net sales

January - December 2014 in brief

  • Order book rose 2% from the previous year to MEUR 89 (MEUR 87).
  • Consolidated net sales in the financial year totalled MEUR 495 (MEUR 511).
  • EBITDA excluding one-time items and exchange rate differences of balance sheet items was MEUR 35.8 (MEUR 32.5).
  • Operating profit excluding one-time items and exchange rate differences of balance sheet items (“operating profit from business operations”) increased due to the cost savings achieved in the efficiency improvement program and was MEUR 17.8 (MEUR 14.5).
  • The result after financial items excluding one-time items and exchange rate differences of operative  balance sheet items during the year was MEUR -9.5 (MEUR -9.9).
  • One-time items and exchange rate differences of operative balance sheet items that had an impact on the result after financial items totalled MEUR -19.2 (MEUR 0.3). The above-mentioned figure includes write-downs of fixed assets MEUR -4.9, expenses related to the closure of the production units MEUR -3.9, refinancing related costs MEUR -3.7, restructuring expenses MEUR -2.7 and other one-time items MEUR -1.3 as well as exchange rate differences related to operative balance sheet items MEUR -2.7.
  • Basic earnings per share were EUR -0.63 (EUR -0.75).
  • The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the 2014 financial year.

October - December 2014 in brief

  • Net sales declined 3% from the previous year to MEUR 120 (MEUR 124).
  • EBITDA excluding one-time items and exchange rate differences of balance sheet items was MEUR 5.4 (MEUR 8.0). The decrease was due to the lower volumes MEUR -1, changes in the price of aluminium raw materials which the company could not charge from customers in the final quarter MEUR -1 Me, quality problems in Orhangazi MEUR -1.6, the decline of productivity in the Dutch operations MEUR -1 and increased costs caused by the strengthening of the Turkish lira MEUR -1. At the same time the measures of the efficiency improvement program improved EBITDA by MEUR +3.
  • Operating profit excluding one-time items and exchange rate differences of balance sheet items was MEUR 1.2 (MEUR 3.6) and including these items was MEUR -9.0 (MEUR 2.1).
  • The result after financial items excluding one-time items and exchange rate differences of operative  balance sheet items MEUR -4.9 (MEUR -2.5).
  • One-time items and exchange rate differences of operative balance sheet items that had an impact on the result for the October - December period totalled MEUR -10.5 (MEUR -1.5).
  • Basic earnings per share were EUR -0.18 (EUR -0.37).

Business environment in 2015

The demand outlook in all the Group’s customer sectors remains uncertain.

The order book for Componenta’s heavy trucks customer sector was at the end of the year 12% higher than at the same time in the previous year. Demand in the heavy truck industry in Europe is expected to stay at the same level as in the previous year or to improve slightly in 2015.  Componenta’s sales to heavy trucks industry customers are expected to increase more than the market due to growth in introduction of new products.

The order book for Componenta’s construction and mining customer sector was at the end of the year 19% lower than at the same time in the previous year. Demand in North America is expected to increase and in Europe to stabilize. Mining industry prospects are still weak due to low raw material prices. Cancellations of orders at the beginning of the previous year weaken the comparability of order books (impact approximately 10%). As a whole, the demand is expected to be lower than in previous year. Componenta’s sales to the customers in the construction and mining sector are expected to stay at the same level as in the previous year or to improve slightly as a result of new products.

At the end of the review period, the order book for Componenta’s machine building customer segment was on the same level as at the same time in the previous year. Componenta’s sales to the machine building industry are expected to rise during 2015.

The order book for Componenta’s agricultural machinery customer sector was at the end of the year 8% lower than at the same time in the previous year. Due to worldwide crop prospects and reciprocal economic sanctions by EU and Russia, the prices of the agricultural products in Europe have decreased clearly. Due to these reasons the demand is expected to decrease further in 2015. Componenta’s sales to manufacturers of agricultural machinery are expected to decline from previous year.

The order book for Componenta’s automotive customer sector was at the end of the year 26% higher than at the same time in the previous year. Demand in 2015 is estimated to improve from previous year. Componenta’s sales to automotive industry are expected to increase from previous year.

Prospects for Componenta

The prospects for Componenta in 2015 are based on general external economic indicators, delivery forecasts given by customers, and on Componenta’s order intake and order book.

Componenta’s order book at the end of the year 2014 was EUR 89 (87) million. Componenta expects the operating profit for 2015 excluding one-time items and exchange rate differences of operative balance sheet items to improve from the previous year due to the efficiency improvement program being carried out.

Key figures

  10-12/2014 10-12/2013 2014 2013
Order book, MEUR 89 87 89 87
Net sales, MEUR 120 124 495 511
Operating profit*), MEUR 1.2 3.6 17.8 14.5
Operating profit*), % 1.0 2.9 3.6 2.8
Result after financial items*), MEUR -4.9 -2.5 -9.5 -9.9
One-time items ja exchange rate differences of operative balance sheet items, MEUR -10.5 -1.5 -19.2 0.3
Taxes, MEUR -1.9 -6.0 0.2 -6.0
Net result for the period, MEUR -17.3 -10.0 -28.6 -15.5
Earnings per share, EUR -0.18 -0.37 -0.63 -0.75
Net gearing, %     194 270
Return on investment, excl. one-time items, %     4.8 5.9
Return on equity, excl. one-time items, %     -14.8 -12.8
Number of personnel at period end, incl. leased personnel     4,238 4,431

*) excluding one-time items and exchange rate differences of operative balance sheet items


President and CEO Heikki Lehtonen comments on the year 2014:

“Componenta’s group-wide efficiency improvement program has made progress in accordance with the plans in 2014.  Target of the measures in the program are cost savings of altogether EUR 45 million, and EUR 27.5 million were achieved by the end of 2014. EUR 10.5 million of the planned cost savings will be have a visible impact in 2015 and rest EUR 7.0 million in 2016.

In 2015 we will focus on boosting the production operations and common functions to strengthen profitability and competitiveness by increasing capacity utilization rates and further decreasing fixed costs. The refinancing arrangements of EUR 250 million finalized in September 2014 and the results gained through the Group’s efficency improvement program to enhance productivity and profitability are creating a strong basis for Componenta’s business and its development. The target is to continue improvement of profitability and competitiveness and grow together with our global customers.

The Ukraine situation and followed reciprocal economic sanctions by EU and Russia have changed the dynamics of the business environment and due to that the demand prospects in our customer sectors are still uncertain. However, we expect Componenta’s sales in most customer sectors to increase among others as a result of the growth in introduction of new products. Componenta’s order book at the beginning of 2015 was 2% higher than at the same time in the previous year.”

Componenta’s Financial Statements Bulletin 1 January - 31 December 2014 in PDF format is attached to this release. The report is also available on the Componenta website at www.componenta.com.

Dividend proposal

On 31 December 2014 the parent company had distributable equity of EUR 204.4 (102.3) million. The Board of Directors proposes to the Annual General Meeting to be held on 11 March 2015 that no dividend be paid for the 1 January - 31 December 2014 financial period.

Press conference for analysts and media representatives at 15.00 (EET)

A press conference will be held at 15.00 (EET) on 10 February 2015, in the auditorium of the SATO building in Käpylä, at Panuntie 4, 00610 Helsinki. The press conference will be webcast simultaneously via the internet. The link can be found on Componenta’s website at www.componenta.com.

Helsinki, 10 February 2015

COMPONENTA CORPORATION


Heikki Lehtonen
President and CEO

 

ENCL. Interim Report 1 January - 31 December 2014

 

For further information, please contact:

Heikki Lehtonen
President and CEO
tel. +358 10 403 2200

Mika Hassinen
CFO
tel. +358 10 403 2723

 

Componenta is a metal sector company with international operations and production plants located in Finland, Turkey, the Netherlands and Sweden. The net sales of Componenta were EUR 495 million in 2014 and its share is listed on Nasdaq Helsinki. The Group employs approx. 4,200 people. Componenta specializes in supplying cast and machined components and total solutions made of them to its global customers, who are manufacturers of vehicles, machines and equipment.