Componenta Corporation Financial Statements 1 January - 31 December 2012: Result weakened significantly, demand outlook uncertain in 2013

October - December 2012 summary

• Net sales in October – December fell 17% from the previous year to MEUR 117 (MEUR 142).
• The fourth quarter operating profit excluding one-time items declined compared to the previous year to MEUR -3.5 (MEUR 6.8).
• Factors that affected the fourth quarter operating profit excluding one-time items were significantly lower volumes than in the previous year and the resulting inefficiency, higher costs for materials and the strengthening of the Turkish lira.
• The fourth quarter result after financial items excluding one-time items declined from the corresponding period in the previous year to MEUR -9.5 (MEUR 0.1).
• The loss attributable to shareholders for the fourth quarter excluding one-time items was MEUR -10.0 (MEUR -1.3), or EUR -0.47 (EUR -0.07) per share.
• Net cash flow from operations in the October – December period was MEUR 3.8 (MEUR 6.7).

January - December 2012 summary

• Consolidated net sales declined 5% in the financial year and totalled MEUR 545 (MEUR 576).
• EBITDA excluding one-time items was MEUR 26.1 (MEUR 47.2).
• Operating profit excluding one-time items was MEUR 10.0 (MEUR 29.8) and after one-time items MEUR 4.0 (MEUR 22.5).
• Result after financial items, excluding one-time items was MEUR -17.6 (MEUR 3.9) and after one-time items MEUR -25.4 (MEUR -3.4).
• Earnings per share excluding one-time items was EUR -0.92 (EUR 0.09) and after one-time items EUR -1.22 (EUR -0.25).
• Order book fell 17% to MEUR 83 (MEUR 100).
• Capacity utilisation rate weakened to 63% (68%).
• Net cash flow from operations was MEUR -8.7 (MEUR 3.6).
• Cash funds and unused credit commitments totalled MEUR 44 (MEUR 42) at end of year.
• Componenta’s efficiency programme is expected to bring annual cost savings of MEUR 25 by the end of 2014.
• The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the 2012 financial year.

Business environment

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

Demand prospects in the truck industry are uncertain. At the beginning of 2013 the order book for Componenta’s heavy trucks customer sector was at the same level as in the previous year. Demand in the first quarter of 2013 will be weaker than in the previous year, but demand is expected to improve from the second quarter onwards.

The order book for Componenta’s construction and mining customer sector was 37% lower at the beginning of 2013 than in the previous year. Customers reduced their stock levels significantly during the second half of 2012. Demand is, however, expected to improve during the second half of 2013.

At the beginning of 2013, the order book for Componenta’s machine building customer segment was 3% lower than at the same time in the previous year. Prospects for 2013 in the machine building industry are uncertain.

The order book for Componenta’s agricultural machinery customer sector was 17% lower at the beginning of 2013 compared to the previous year. Demand for agricultural machinery is expected to pick up in the first half of the year since food prices have remained at a relatively high level.

The order book for Componenta’s automotive customer sector was 21% lower at the beginning of 2013 than at the same time in the previous year. Demand in the automotive industry declined 8% in Europe in 2012.

Demand in 2013 is estimated to stay at the same level as in 2012.

Prospects for Componenta

The prospects for Componenta in 2013 are based on general external economic indicators, delivery forecasts given by customers, and on Componenta’s order intake and order book.

The continuing uncertainty in the European and global economy has weakened demand for investment in Componenta’s customer industries. Componenta’s order book at the beginning of 2013 was EUR 83 (100) million. Based on the order book and production forecasts given by customers, Componenta’s net sales in the first quarter of 2013 will be less than in the corresponding period in the previous year. As the result of improving demand towards the end of the year, full year net sales in 2013 are expected to remain at the same level as in the previous year.

The efficiency programme launched in October 2012 is expected to bring annual cost savings of EUR 25 million by the end of 2014. A significant portion of these cost savings should be achieved already in 2013. As a result, the operating profit excluding one-time items is expected to improve from the previous year.

Key figures

*) 12 January 2012  **) 13 January 2013

President and CEO Heikki Lehtonen comments on 2012:

“Componenta’s financial performance in 2012 was poor. Net sales were 5 % down on the previous year and the operating profit excluding one-time items was just 1.8 % of net sales. Factors in the low operating profit were the sharp decline in volumes that began in the second half of the year and the resulting fall in productivity, and the strengthening of the Turkish lira. The Group’s financial costs were also high in 2012. They rose from the previous year mainly because of exchange rate losses and higher financial arrangement costs.

Demand developed positively at the start of the year, but declined in almost all our customer business sectors after the summer. This weak trend continued for the remainder of the year, and as a result Componenta’s order book at the beginning of 2013 was 17 % smaller than at the corresponding time in the previous year.

Adjusting costs to the volume of operations and efficient operating methods and processes are essential requirements for competitive business operations. After the order book and production volumes had taken a downward turn, in October we launched an efficiency programme affecting all the Group’s operations. The measures in the programme to improve productivity and at the same time to cut fixed costs are now in progress, and we expect them to bring annual cost savings of EUR 25 million by the end of 2014.”

Dividend proposal

The Board of Directors proposes to the Annual General Meeting to be held on 22 March 2013 that, in accordance with the current dividend policy, no dividend be paid for the 1 January - 31 December 2012 financial period. On 31 December 2012 the parent company had distributable equity of EUR 87.6 million.

Componenta’s 2012 Financial Statements Bulletin in PDF format is attached to this release. The Bulletin is also available on the Componenta website at www.componenta.com.

Press conference for analysts and media representatives at 13.00 (EET)

A press conference will be held at 13.00 (EET) on 28 February 2013, 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, 28 February 2013

COMPONENTA CORPORATION

Heikki Lehtonen
President and CEO

ENCL. Financial Statements Bulletin 1 January - 31 December 2012

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 545 million in 2012 and its share is listed on the NASDAQ OMX Helsinki. The Group employs approx. 4,300 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.