Componenta Interim Report 1 January - 30 June 2013: Net sales and operating profit improved from previous quarter, the company is preparing to strengthen its balance sheet

April - June 2013 in brief

• The Group’s order book at end of June increased 6% to MEUR 95 (89) compared to the end of the previous quarter, but remained 5% lower than in the corresponding period in the previous year when it stood at MEUR 100.
• Second quarter net sales rose 10% from the previous quarter to MEUR 140 (128). Net sales were down, however, on the corresponding period in the previous year, when the net sales totalled MEUR 156.
• The Group’s structural efficiency programme has progressed according to plan. Some 60% of the total annual savings of MEUR 25 are expected to affect the result already this year.
• EBITDA excluding one-time items was MEUR 13.1, which was higher than the figure of MEUR 8.2 in the previous quarter and also slightly higher than the MEUR 12.8 of the corresponding period in the previous year.
• Operating profit excluding one-time items improved from the previous quarter to MEUR 8.5 (3.8), although it was slightly down on the corresponding period in the previous year when it was MEUR 8.9. The improvement in the operating profit from the previous quarter was due to higher volumes and the cost savings achieved in the structural efficiency programme.
• The result after financial items excluding one-time items turned positive in the second quarter, standing at MEUR 2.9 (-2.2). It was also higher than in the corresponding period in the previous year, when it totalled MEUR 1.4.
• Earnings per share excluding one-time items was EUR 0.09, when it was EUR -0.09 in the first quarter of 2013 and EUR -0.04 in the second quarter of the previous year.
• Net cash flow from operations turned also positive in the second quarter, totalling MEUR 12.1, when it was MEUR -3.0 in the first quarter of 2013 and MEUR 0.3 in the second quarter in the previous year. It improved mainly due to changes in working capital.
• At the end of June cash funds and unused committed credit facilities totalled MEUR 41, which is MEUR 4 more than at the end of the previous quarter (MEUR 37). The corresponding figure in the previous year was MEUR 38.
• Componenta plans to strengthen shareholders’ equity by at least MEUR 20 through an increase in share capital and a hydrid bond. In addition, at the same time the company is planning a bond issue that would be larger than the previous bond.

January - June 2013 in brief

• Net sales were MEUR 268 (307).
• Capacity utilization rate was 62 % (72%).
• EBITDA excluding one-time items was MEUR 21.3 (27.3).
• Operating profit excluding one-time items was MEUR 12.3 (19.1).
• One-time items totalled MEUR -1.1 (-0.2), mostly relating to ongoing restructuring of business operations.
• Net financial costs were MEUR -11.6 (-14.8).
• Result after financial costs excluding one-time items was MEUR 0.7 (4.3) and including one-time items MEUR -0.4 (4.0).
• Earnings per share excluding one-time items was EUR 0.00 (0.07) and including one-time items EUR     -0.04 (0.06).
• Return on investment excluding one-time items was 7.7% (12.2%) and including one-time items 7.1% (12.0%).
• Return on equity excluding one-time items was 3.4% (7.0%) and including one-time items 1.0% (6.5%).

Business environment

The demand outlook for the Group remains uncertain, although there are signs of a turn for the better in certain customer sectors.

At the end of June the order book for Componenta’s heavy trucks customer sector was 13% higher than at the end of the previous quarter. Demand for heavy trucks is expected to continue to rise in the second half of the year.

The order book for Componenta’s construction and mining customer sector was 2% lower at the end of June than at the end of the previous quarter. Demand for construction and mining machinery is expected to pick up in the customer sector during the second half of 2013 compared to the first half mainly due to normalization of customers’ inventory levels.   

At the end of the review period, the order book for Componenta’s machine building customer segment was similar to that at the end of the previous quarter. Prospects in the machine building industry for the rest of 2013 remain uncertain.

The order book for Componenta’s agricultural machinery customer sector was 2% higher at the end of June than at the end of the previous quarter. Demand for agricultural machinery started to pick up after the first quarter and is expected to improve further in the second half of 2013.

The order book for Componenta’s automotive customer sector was 17% higher at the end of June than at the end of the previous quarter. Componenta’s deliveries to the automotive industry are expected to increase during the latter part of the year.

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 sectors. Componenta’s order book, however, increased 6% from the end of the previous quarter to EUR 95 (89) million.

Full year prospects remain unchanged. Net sales in 2013 are expected to remain at the same level as in the previous year and, in consequence of the structural efficiency measures being carried out, the operating profit excluding one-time items is expected to improve from the previous year.

Key figures

President and CEO Heikki Lehtonen comments on the second quarter of 2013:

“The encouraging developments in Componenta’s operations at the start of the year continued in the second quarter. The Group’s net sales increased 10% in the April - June period, and the operating profit improved considerably. The improvement in the operating profit was due to higher volumes and to the cost savings obtained through the efficiency programme underway in all the countries where we have operations.

At the end of June the Group’s order book was 6% higher than at the end of the previous quarter. Although demand prospects remain uncertain, in some customer sectors we have seen a turn for the better. For example the order book for the Heavy Trucks customer sector started to rise and at the end of June was 13% higher than at the end of the first quarter. Similarly, at the end of June our order book for automotive customers was 17% up on the end of the previous quarter. The increase in orders is reflected in growth in volumes and net sales particularly for the Machine Shop and Aluminium divisions.

The Group-wide programme to raise efficiency has made progress as expected. The measures carried out have already improved productivity at the Orhangazi foundry and at our foundries in the Netherlands. The transfer of products between the Group’s business units also raises efficiency, since components are cast and machined at the most suitable unit at any particular time. The structural efficiency programme is targeting annual cost savings of EUR 25 million and some 60% of them are expected to affect the result already this year.”

Componenta’s Interim Report 1 January - 30 June 2013 in PDF format is attached to this release. The report is also available on the Componenta website at www.componenta.com.

Helsinki, 16 July 2013

COMPONENTA CORPORATION
 

Heikki Lehtonen
President and CEO

ENCL. Interim Report 1 January - 30 June 2013

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.