Componenta Corporation’s Half-year Financial Report 1 January – 30 June 2020: Net sales increased, EBITDA weakened and cash flow improved

Componenta Corporation, Stock Exchange Release, on 24 July 2020 at 8.00

The information presented in this Half-Year Financial Report relates to the development of Componenta Group in January - June 2020 and in the corresponding period in 2019, unless otherwise stated.

January - June, H1 2020

• Net sales increased to EUR 36.7 million (EUR 22.3 million).
• EBITDA decreased to EUR 1.3 million (EUR 2.6 million).
• Operating result was EUR -1.6 million (EUR 1.7 million). 

April - June, Q2 2020

• Net sales increased to EUR 17.1 million (EUR 11.3 million).
• EBITDA decreased to EUR 0.5 million (EUR 1.0 million).
• Operating result was EUR -0.9 million (EUR 0.6 million). 

Guidance for 2020

Componenta expects the net sales of continued operations to be EUR 65 - 80 million in 2020. EBITDA is expected to remain positive. Net sales of continued operations in 2019 was EUR 50.7 million and EBITDA was EUR 1.6 million.

Any increases in raw material prices, the general competitive situation and the development of customers’ sales volumes may have an impact on the future outlook. According to current estimate, the COVID-19 pandemic will have a somewhat negative effect on net sales and profitability, but there are significant uncertainties regarding the future outlook due to poor visibility.

President and CEO Sami Sivuranta:

“During the second quarter of 2020, the COVID-19 pandemic further increased uncertainty in the market, and this meant decreased sales volumes for us. However, our net sales were increased by Componenta Manufacturing Oy (previously Komas Oy) which was not part of the Componenta Group during the review period. While decreased volumes were the main reason for weakened profitability, we were also affected by a temporary decline in productivity caused by challenges with quality.

During the first half of the year, we reduced our management and downsized administrative personnel. In the future, these actions will continue to have a positive impact on the company’s fixed costs. Furthermore, the savings that we have sought through the acquisition and integration of Componenta Manufacturing Oy will materialize in our results with a delay. 

The COVID-19 pandemic had a somewhat negative impact on Componenta’s net sales and profitability during the second quarter of the year. In the future, several uncertainties will affect the development of sales volumes, especially in the short term, and it is estimated that the pandemic will continue to have a somewhat negative impact on the Group’s net sales and profitability during the second half of 2020.

During the outbreak of the pandemic, we acted early to ensure the health and safety of our personnel and to minimize any negative financial impacts. We aimed to manage costs and diminish negative impacts by taking measures such as restricting investments and minimizing travel and use of external advisory services. We also adjusted through cooperation negotiations in all our business units, including Group’s administration.

Despite the exceptional circumstances, we have been able to maintain our delivery capacity and good customer service. While restrictions due to the pandemic, issues in international procurement channels and financial uncertainties have taken their toll on our customers’ production, Componenta has been able to secure its own production and ability to deliver by, for example, employing alternative raw material procurement channels.

During the reporting period, we strengthened our sales by appointing a new sales and marketing director, and by further clarifying the responsibilities and operating model of our sales. Through these changes, we are seeking more defined ownership for the sales in our profit centres. As a result of these actions, we have gained significant new business during the first half of 2020, which in turn will support us in achieving the Group’s long-term growth and profitability targets. The new sales volumes will start to show in the Group’s net sales and profitability in the near future as the deliveries start. Our achievements in gaining new sales will, for their part, help compensate for the negative impact of the COVID-19 pandemic on the Group’s net sales and EBITDA.

Our liquidity remained on a good level during the reporting period. In April, we also signed a new revolving credit facility agreement of EUR 2.0 million. By the end of June, the Group had EUR 5.3 million in undrawn committed credit facilities.

We will continue to focus on securing new sales volumes, improving the profitability of our key operations, and keeping our liquidity in control. These measures will help us secure our company’s operations in the short term, recover rapidly after the pandemic and reach our long-term strategic goals.”

Key figures

Alternative performance measures

Componenta will continue to publish certain publicly available performance measures that can be derived from the IFRS financial statements. The calculations of these key financial figures were presented in Componenta’s annual review published on 17 March 2020.

Componenta’s Half-year Financial Report 1 January – 30 June 2020 in pdf format is in the appendix to this release. It is also available on the company’s website at www.componenta.com.

COMPONENTA CORPORATION

Sami Sivuranta
President and CEO
 

For further information, please contact:

Sami Sivuranta, President and CEO, tel. +358 10 403 2200
Marko Karppinen, CFO, tel. +358 10 403 2101

Componenta is a technology company which specializes in supplying cast and machined components to global manufacturers of vehicles, machines and equipment. The company’s share is listed on Nasdaq Helsinki.