Componenta Corporation’s Half-year Financial Report 1 January–30 June 2022 Net sales increased and EBITDA improved

Componenta Corporation stock exchange release, 22 July 2022 at 8 a.m. EEST

January–June 2022

• Net sales increased to EUR 54.4 million (EUR 43.5 million).
• EBITDA improved to EUR 3.8 million (EUR 3.3 million).
• Operating result was EUR 1.0 million (EUR 0.4 million).
• Cash flow from operating activities was EUR 2.1 million (EUR 4.3 million).

April–June 2022

• Net sales increased to EUR 28.9 million (EUR 23.1 million).
• EBITDA improved to EUR 2.4 million (EUR 1.8 million).
• Operating result was EUR 1.0 million (EUR 0.3 million).
• Cash flow from operating activities was EUR 2.0 million (EUR 3.4 million).

The information presented in this half-year financial report concerns Componenta Group’s performance in January–June 2022 and in the corresponding period of 2021, unless otherwise stated.

Componenta’s guidance for 2022 remains unchanged

Componenta expects the Group’s net sales to be EUR 90–105 million in 2022. EBITDA is expected to improve from the previous year. The Group’s net sales in 2021 were EUR 87.3 million, and its EBITDA was EUR 5.0 million.

Potential poor availability of raw materials, increases in the prices of raw materials and energy, the general economic situation and competitive climate, and the development of customers’ sales volumes may affect business outlooks. Due to the COVID-19 pandemic and the crisis in Ukraine, the development of sales and profitability involves uncertainties and poor predictability. An unfavourable development of the geopolitical situation related to Russia and Ukraine can have a negative impact on the financial market, sales volumes, the availability and price development of raw materials and energy and the availability of foreign labour, which increases uncertainty in terms of forecasts.

Sami Sivuranta, President and CEO:

“We managed well in a challenging operating environment during the first half of the year. Our net sales, EBITDA and market share continued to grow in line with our targets, and we are pleased with the result. Our liquidity remained in a good level throughout the review period.

Our profitability during the review period was burdened somewhat by the exceptional price development of raw materials, materials and energy, which has significantly increased our manufacturing costs. In terms of our main raw materials and electricity, the cost development is largely tied to our customer agreements through indices, which are reflected in our sales prices with a delay. We have also separately agreed with our customers on compensation for cost increases in material prices not tied to any indices. These price agreements entered into force during the second quarter.

In addition, quality and productivity challenges at the Karkkila foundry affected our profitability to some extent. In our Karkkila unit, the recovery in demand and very good success in new sales have led to an exceptionally rapid growth in production volumes. This has generated special needs and challenges both, in terms of increasing resources in the workforce and in terms of rapidly increased technical process capacity. However, our activities to remedy the situation in Karkkila are progressing according to plan.

Our half-year result was also burdened by costs of EUR 0.3 million in the first quarter related to an acquisition that was not realized.

The prolonged crisis in Eastern Europe has increased challenges in the availability of materials and cost development. Componenta has no operations of its own in Russia or Ukraine. The direct impacts through our customers’ and suppliers’ business operations have been minor, as have the indirect impacts of the crisis for the time being. We are actively monitoring developments in our business environment and seeking to ensure the availability of raw materials in all situations and circumstances.

Componenta’s delivery capability has remained good throughout the COVID-19 pandemic. In our own operations, we have successfully managed our supply chain and secured our production and deliveries to customers. Our entire personnel have shown flexibility in maintaining our production and delivery reliability during these challenging times.                                  

Our customers’ forecasts and expectations have remained generally positive throughout the review period, and our order book was very strong at the end of the review period.

The circular economy plays a significant role in Componenta’s production processes. We are committed to provide our customers high-quality and responsibly produced components. Our production operations are located close to our key customers, and we are able to respond quickly and flexibly to changes in the global market at the local level.

We will actively continue our efforts to strengthen our market position and further improve our profitability as part of our growth strategy. In addition, we are focusing on our service capability, close customer relationships, sustainability and highly competent personnel, as well as on expanding our offering. We are investing in close partnerships with our customers, aiming to be their preferred supplier with a sustainable and extensive offering.”

Alternative key financial ratios

Componenta publishes certain commonly used key financial ratios that can be derived from the IFRS financial statements. The calculation formulas for these key financial ratios are presented at the end of this report.

Webcast

President and CEO Sami Sivuranta will present the Business Review for investors, analysts and the media in a webcast on 22 July 2022 at 10 a.m. EEST. The webcast will be in Finnish. Please follow the webcast via the company pages at www.componenta.com or via this link: https://live.esf.fi/componenta072022.

Helsinki 22 July 2022

COMPONENTA CORPORATION

Board of Directors

For further information, please contact:

Sami Sivuranta, President and CEO, tel. +358 10 403 2200

Marko Karppinen, CFO, tel. +358 10 403 2101

Componenta Corporation is an international technology company and Finland’s leading contract manufacturer in the machine building industry. Sustainability and customers’ needs are at the core of the company’s extensive technology portfolio. Componenta produces components for its global customers, which are manufacturers of machinery and equipment. The company’s shares are listed on the Nasdaq Helsinki. www.componenta.com