Componenta’s Financial Statements Release 1 January–31 December 2018: The net sales remained on par with the previous year and the adjusted operating profit improved slightly
Componenta Corporation Stock Exchange Release on 22 March 2019 at 8.00
The information presented in this Financial Statements Release concerns the development of Componenta Group’s continued operations in January–December 2018 and the corresponding period in 2017, unless otherwise stated. Continued operations in the review period were the foundry operations in Pori and Karkkila, Finland, and the machine shop in Främmestad, Sweden. In alternative performance measures, certain value adjustment items not related to the ordinary business, items related to the sold and discontinued operations and other items with impact on comparability have been adjusted. Net sales in the comparable period include administration service fees charged from Wirsbo sub-group, which was diluted from the Group in 2017 because of the filing for bankruptcy. The figures presented in this release are unaudited.
January–December 2018 in brief
- The net sales remained on par with the previous year at EUR 120.7 million (EUR 122.4 million). The adjusted net sales in the review period amounted to EUR 120.7 million and the comparable adjusted net sales for the corresponding period last year amounted to EUR 122.2 million.
- EBITDA decreased by 87.6%, and was EUR 3.7 million (EUR 29.8 million). The EBITDA of the comparison period was improved by the EUR 30.6 million cuts in the restructuring debts. The adjusted EBITDA increased by 6.5% in the review period, and was EUR 4.9 million, while the comparable adjusted EBITDA in the previous year was EUR 4.6 million.
- The operating result decreased by 95.3%, and was EUR 1.2 million (EUR 26.3 million). The operating result of the comparison period was improved by the EUR 30.6 million cuts in the restructuring debts. The adjusted operating result increased by 6.9%, and was EUR 2.9 million, while the comparable adjusted operating result in the previous year was EUR 2.7 million.
October–December 2018 in brief
- The net sales decreased by 6.7%, and was EUR 29.1 million (EUR 31.2 million). The adjusted net sales in the review period amounted to EUR 29.1 million and the comparable adjusted net sales for the previous year amounted to EUR 31.2 million.
- EBITDA decreased by 88.6%, and was EUR 0.3 million (EUR 2.5 million). The adjusted EBITDA decreased by 31.2%, and was EUR 0.8 million, while the comparable adjusted EBITDA in the previous year was EUR 1.1 million. During the last quarter of the year, the breakdowns of machinery and equipment as well as quality costs weighed down the profitability of the company by approximately EUR 0.3 million. Furthermore, volumes lower than initially forecast also affected the profitability.
- The operating result decreased by 210.5%, and was EUR -0.7 million (EUR 0.7 million). The adjusted operating result decreased by 85.1%, and was EUR 0.1 million, while the comparable adjusted operating result in the previous year was EUR 0.8 million.
The parent company’s distributable assets on 31 December 2018 amounted to EUR 15.2 million (EUR 14.2 million). Pursuant to Chapter 9, Section 58 of the Restructuring of Enterprises Act, Componenta cannot distribute dividend between the approval and the conclusion of the restructuring programme. Pursuant to Chapter 14, Section 2 of the Limited Liability Companies Act, the company cannot distribute the company’s unrestricted equity to shareholders during the next three years as the company has reduced the share capital for loss coverage on 11 May 2017.
Componenta’s profit guidance in 2019
The expiry of the terminated customer relationship contracts will decrease the net sales of the Group in 2019. The refining value decreases less in proportion to the net sales, since the Componenta products for the remaining customer relationships, which are classified as core business, are mainly made of the Group’s own castings.
Componenta expects the net sales of the continued operations in 2019 to amount to EUR 70–90 million. It is expected that the EBITDA without items affecting comparability will remain positive. The net sales of continued operations in 2018 was EUR 121.0 million and the adjusted EBITDA was EUR 4.9 million.
Potential fluctuations in exchange rates, higher raw material prices and the general competitive climate may affect the business outlook. Changes to new accounting principles are not estimated to have a significant impact on future financial statements.
President and CEO Harri Suutari comments concerning the review period
“Componenta’s restructuring programmes have progressed as planned. We continued to take measures to improve the profitability during the financial year that ended: we reduced costs, improved the productivity of our factories and increased prices as planned.
We also assessed our customer relationships during the financial year and terminated one significant unprofitable customer contract. The main reasons which justified the termination of the contract were the insufficient profit margin, high level of invested capital and low refining level of products. The impact of the measures will be visible during the financial year 2019, especially as reductions of our operations in Sweden. The measures will also have an impact on Pori foundry operations, since these deliveries represent 40% of the Pori unit’s volume. As part of the adjustment measures, we are planning to close the other line of the Pori foundry, the so-called Disa line, by the end of 2019.
The synergy significance of Componenta Främmestad AB, which conducts machining and painting operations, for the Group decreased when we sold the foundry operations in Turkey in 2017. Most of Componenta Främmestad AB’s operations consists of the refining and supplying of castings from outside the Group. The reactions of our main customers towards the operational model change has not delivered expected results. While the synergy benefits have decreased, we are considering giving up the operations. Divesting ourselves from the low-profitability machine shop customer relationships in Sweden frees up capital for our core business.
Due to our stabilised financial situation, we have started to receive new significant orders for our Finnish foundries.
We have negotiated with our key foundry customers on possibilities to offer them machining of their castings in Finland. We perceive this to be the most significant synergic growth direction of Componenta in the future.”
|Net sales, continued operations, EUR million||120.7||122.4||-1.4%|
|EBITDA, continued operations, EUR million||3.7||29.8||-87.6%|
|Operating result, continued operations, EUR million||1.2||26.3||-95.3%|
|Operating result margin, continued operations, %||1.0||21.5||-95.2%|
|Result after financial items, continued operations, EUR million||1.2||128.3||-99.0%|
|Result, continued operations, EUR million||1.0||128.8||-99.2%|
|Basic earnings per share, EUR||0.01||0.70||-99.2%|
|Diluted earnings per share, EUR||0.01||0.70||-99.2%|
|Cash flow from operations, continued operations, EUR million||3.5||2.8||22.9%|
|Interest-bearing net debt, EUR million||-3.4||-3.0||-13.3%|
|Equity ratio, %||39.3||34.8||13.1%|
|Investments in non-current assets including financial leasing, continued operations, EUR million||1.8||1.6||12.1%|
|The Group restructuring debt, EUR million||16.0||19.0||-16.1%|
|Personnel at the end of the period including leased personnel, continued operations||668||691||-3.3%|
|Personnel on average during the period including leased personnel, continued operations||703||680||3.4%|
|Order book, continued operations, EUR million||21.7||23.6||-7.8%|
Componenta’s Financial Statements Release 2018 in pdf format is in the appendix to this release. It is also available on the company’s website at www.componenta.com.
President and CEO
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President and CEO
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Componenta is an international technology company. Componenta specializes in supplying cast and machined components to its global customers, who are manufacturers of vehicles, machines and equipment. The company’s share is listed on Nasdaq Helsinki.