Componenta Interim Report 1 January - 30 September 2013: Net sales declined in review period, but operating profit improved from previous year, prospects for rest of year unchanged

July - September 2013 in brief

• The Group’s third quarter net sales declined one per cent from the previous year to MEUR 119 (121).
• EBITDA excluding one-time items improved significantly from the previous year, to MEUR 6.6 (-2.0) and to MEUR 6.0 (-2.1) after one-time items.
• Operating profit excluding one-time items turned positive from the previous year, standing at MEUR 2.2 (-5.5) and at MEUR 1.5 (-5.6) after one-time items. The considerable improvement in the operating profit from the previous year is due to the cost savings achieved in the efficiency program and the weakening of the Turkish lira.
• The result after financial items excluding one-time items was MEUR -4.4 (-12.4) and after one-time items MEUR -5.2 (-12.5).
• Basic earnings per share excluding one-time items were EUR -0.18 (-0.46) and after one-time items EUR -0.27 (-0.46).
• Third quarter net cash flow from operations was MEUR -21.7 (-18.0). The increase in working capital during the third quarter was exceptionally high. The company has taken measures that aim to normalize the need for working capital during the final quarter of the year.

January - September 2013 in brief

• The Group’s order book at the end of the review period was 4% lower than at the corresponding time in the previous year, standing at MEUR 84 (87).
• Net sales in the review period declined 9% from the previous year to MEUR 387 (427).
• The Group has carried out its efficiency improvement program as planned and will achieve the targeted annual savings of MEUR 25 during 2014. The company expanded the efficiency program with new development projects, aiming to improve profitability by a further MEUR 10 by the end of 2015.
• Operating profit in the review period excluding one-time items improved from the previous year to MEUR 14.6 (13.6).
• The result after financial items excluding one-time items was MEUR -3.7 (-8.2).
• Earnings per share in the period excluding one-time items were EUR -0.19 (-0.43).
• At the end of September cash funds and unused committed credit facilities totalled MEUR 12.2 (11.9).

Business environment

At the end of September the order book for Componenta’s heavy trucks customer sector was 3% down on the corresponding time in the previous year. Demand for heavy trucks is expected to be higher in the final quarter of the year than in the same period in the previous year.

The order book for Componenta’s construction and mining customer sector was 13% lower at the end of September than at the same time in the previous year. Demand for construction and mining machinery is expected to decline slightly during the final quarter of 2013 as customers prepare for end of year stoppages.

At the end of the review period, the order book for Componenta’s machine building customer segment was 4% higher than at the same time in the previous year. Prospects in the machine building industry are expected to improve in the final quarter compared to the same period in the previous year.

The order book for Componenta’s agricultural machinery customer sector was 3% lower at the end of September than at the same time in the previous year. Demand for agricultural machinery is expected to remain stable in the final part of 2013.

The order book for Componenta’s automotive customer sector was 3% higher at the end of September than at the same time in the previous year. Componenta’s deliveries to the automotive industry are expected to increase in the final quarter from the previous year.

Prospects for Componenta

The prospects for Componenta for the rest of 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 declined 4% from the corresponding time in the previous year to EUR 84 (87) million.

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 third quarter of 2013:

“Although the net sales in the review period remained slightly lower compared to the previous year, the operating profit improved clearly.  Reasons for that were the cost savings by the efficiency improvement program launched in the Group a year ago and the weakening of the Turkish lira.

The uncertainty in the European and global economy is still affecting the demand in our customer sectors, which could be noticed as a modest decline in our order book from the same time in the previous year. Outlook for the rest of year is, however, varying by customer industry. Demand in heavy trucks industry, machine building industry and automotive industry is expected to develop favourably. Demand prospects for agricultural machinery are stable and demand for construction and mining machinery is expected to decline slighty. Our new sales in 2013 have developed as expected, and amount of offers in January - September this year has been on higher level than in the previous years.

The group-wide efficiency improvement program launched in October 2012 has made progress in accordance with expectations and the Group is set to achieve the target of improving the Group’s profitability by EUR 25 million by 2014. Restructuring, product transfers and several different development measures have made progress as planned. As a result of them efficiency of the operations has increased and total productivity has improved. 

In September we expanded the efficiency program with the new projects that particularly focus on raising foundry capacity utilization rates, developing processes and improving profitability further by EUR 10 million by the end of 2015. As part of the efficiency improvement measures, we will invest in developing production processes and cutting the amount of waste and reducing emissions to the environment in Turkey and the Netherlands.“

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

Press conference for analysts and media representatives at 14.30 (EEST)

A press conference will be held at 14.30 (EEST) on 21 October 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, 21 October 2013

COMPONENTA CORPORATION
 

Heikki Lehtonen
President and CEO

ENCL. Interim Report 1 January - 30 September 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.