Componenta Interim Report 1 January - 30 September 2015: Order book increased, net sales unchanged, operating profit fell from previous year

January - September 2015 in brief

• The Group’s order book at the beginning of October was 4% higher than in the previous year standing at MEUR 82 (MEUR 79).
• Net sales in the review period were at a similar level as in the previous year standing at MEUR 376 (MEUR 376).
• EBITDA excluding one-time items and exchange rate differences of balance sheet items declined from the previous year to MEUR 23.7 (MEUR 30.3). The impact of the Turkish lira and high local wage inflation was MEUR -5, of the strikes in Turkey MEUR -2, and of the operational difficulties in Främmestad MEUR -2. In addition, the loss from the Dutch operations increased some MEUR -1 from the previous year. The efficiency improvement program had a positive impact of MEUR 3 on EBITDA.
• Operating profit excluding one-time items and exchange rate differences of balance sheet items (“operating profit on business operations”) declined from the previous year to MEUR 10.2 (MEUR 16.6).
• The result after financial items excluding one-time items and exchange rate differences of operative balance sheet items was MEUR -7.8 (MEUR -4.7). The result after financial items excluding one-time items was MEUR -4.7 (MEUR -6.3). 
• One-time items and exchange rate differences of operative balance sheet items that had an impact on the result after financial items for the review period totalled MEUR 0.7 (MEUR -8.7).
• The net result for the period was MEUR -9.1 (MEUR -11.3) and basic earnings per share were EUR -0.10 (EUR -0.42).
• New contracts received during the review period totalled MEUR 62.
• Componenta confirms the guidance given on 19 October 2015.

July - September 2015 in brief

• Net sales were at a similar level as in the previous year standing at MEUR 110 (MEUR 111).
• EBITDA excluding one-time items and exchange rate differences of balance sheet items declined from the previous year to MEUR 4.8 (MEUR 5.6).
• Operating profit excluding one-time items and exchange rate differences of balance sheet items was MEUR 0.5 (MEUR 1.3).
• The result after financial items excluding one-time items and exchange rate differences of operative balance sheet items was MEUR -6.0 (MEUR -5.5). The result after financial items excluding one-time items was MEUR -4.9 (MEUR -6.2).
• One-time items and exchange rate differences of operative balance sheet items that had an impact on the result for the July - September period totalled MEUR 0.2 (MEUR -5.3).
• The net result for the July - September period was MEUR -7.5 (MEUR -9.2) and basic earnings per share were EUR -0.08 (EUR -0.21).

Componenta’s guidance for 2015 (announced by stock exchange release on 19 October 2015)

The prospects for Componenta in 2015 are based on general external economic indicators, delivery forecasts given by customers, and on Componenta’s order intake and order book.

Componenta’s order book at the beginning of October stood at MEUR 82 (MEUR 79). Componenta’s operating profit excluding one-time items and exchange rate differences of operative balance sheet items is expected to stay behind previous year. However, Componenta expects the 2015 result after financial items excluding one-time items to improve from previous year.

President and CEO Heikki Lehtonen comments on the review period and events after the end of period:

“Componenta’s performance in the third quarter of 2015 review period was weaker than expected. However, the order book increased 4% from the previous year to EUR 82 million. Net sales were on a similar level as in the previous year but operating profit excluding one-time items and exchange rate differences of operative balance sheet items fell from the previous year. The problems in operations continued during the summer, especially in the Foundry Division and at the Främmestad machine shop. Remedial measures are currently being carried out at both and due to them we expect the situation to improve during the final quarter.

Construction of Componenta’s new aluminium foundry in Manisa, Turkey, has made progress on schedule and according to plan. Construction work is expected to be finished by the end of the year, and after that we will be able to start installing machinery and equipment. Production is expected to begin at the new aluminium foundry during the latter part of spring 2016 and the whole production is expected to be transferred to the new factory at the beginning of year 2017.

Preparations to combine Componenta’s and Ferromatrix’s production of large furan cast components have also progressed according to plan. Products of Componenta’s furan line in Heerlen will be transferred to Ferromatrix’s Kortrijk foundry in Belgium by the end of this year, when the furan line in Heerlen will be closed down. Cooperation on sales and customers for furan castings will begin at the beginning of 2016.

In addition, we are continuing the measures planned to consolidate operations in the Netherlands. As from 1 November 2015 the Group’s current CFO Mika Hassinen will focus full-time on carrying out these strategically important projects and on leading the units in the Netherlands and the cooperation with Ferromatrix.  Progress has been made as announced previously on the planned closure of the Heerlen furan production line and in consequence of this the transfer of the green sand casting line in Weert to Heerlen and the closure of the Weert foundry by the end of 2016. After these measures all Componenta’s operations in the Netherlands will be consolidated in Heerlen.

Componenta’s group-wide efficiency improvement program, with its development projects and measures, has not in every respect made progress in accordance with plans during the review period. However, corrective measures have been started and the targeted cost savings will be reached during the year 2016. The efficiency improvement program has the target, by increasing productivity, to improve the company’s competitiveness and its profitability, including the changes being made in the Netherlands, by altogether EUR 50 million. Savings corresponding to EUR 35 million of this program have already been achieved and it is estimated that the remainder will be finalized by the end of 2016.” 

Key figures

*) Excluding one-time items and exchange rate differences of operative balance sheet items

Componenta’s Interim Report 1 January - 30 September 2015 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, investors and media representatives at 10.30 am on 26 October 2015

Componenta is holding a press conference for analysts, investors and media representatives at 10.30 am on 26 October 2015 in the Satotalo auditorium in Käpylä, at Panuntie 4, 00610 Helsinki. The event can also be watched in a direct webcast on the internet. The link to the webcast is given on Componenta’s website at www.componenta.com.

Helsinki, 26 October 2015

COMPONENTA CORPORATION

Heikki Lehtonen
President and CEO

ENCL. Interim Report 1 January - 30 September 2015

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 495 million in 2014 and its share is listed on Nasdaq Helsinki. The Group employs approx. 4,250 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.