Componenta’s Financial Statements Release 1 January-31 December 2019: Net sales of continued operations increased but EBITDA weakened, cash flow from operating activities strengthened
Componenta Corporation Stock Exchange Release on 28 February 2020 at 8.00
The information presented in this Financial Statements Release concerns the development of Componenta Group’s continued operations in January-December 2019 and in the corresponding period in 2018, unless otherwise stated. In its stock exchange release dated 7 November 2019, Componenta announced previously published consolidated income statements and financial key indicators of continued operations, adjusted by the bankruptcy of Componenta Främmestad AB.
Continued operations during the review period included foundries in Pori and Karkkila, Finland, and metal product plants in Jyväskylä, Härmä, Kurikka, Leppävesi and Sastamala, Finland. The figures in this release are unaudited.
Componenta Finland Oy’s name was changed to Componenta Castings Oy and Komas Oy’s name to Componenta Manufacturing Oy as of 1 January 2020.
January–December 2019 in brief
- Net sales increased from the previous year to EUR 50.7 million (EUR 39.3 million).
- EBITDA decreased to EUR 1.6 million (EUR 3.2 million).
- Operating result was EUR -1.7 million (EUR 1.0 million).
- Net result including discontinued operations was EUR 14.6 million (EUR 1.0 million). Basic earnings per share was EUR 0.08 (EUR 0.01 ).
October–December 2019 in brief
- Net sales increased to EUR 18.4 million (EUR 8.9 million).
- EBITDA decreased to EUR -0.3 million (EUR 0.9 million).
- Operating result was EUR -1.8 million (EUR 0.1 million).
Dividend proposal
On 31 December 2019, the parent company's distributable assets amounted to EUR 22.6 million (15.2 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, because the company has reduced its share capital for loss coverage on 11 May 2017.
Componenta’s guidance for 2020
Componenta expects the net sales of continued operations to be EUR 65 - 80 million in 2020. EBITDA is expected to remain positive. Net sales of continued operations in 2019 was EUR 50.7 million and EBITDA was EUR 1.6 million.
Possible increase in raw material prices and the general competitive climate as well as the development of customers’ sales volumes may affect the business outlook.
President and CEO Marko Penttinen comments on the review period
“Uncertainty in the markets increased particularly during the last quarter of 2019, which was evidenced by a decrease in sales volumes. However, Componenta’s net sales increased due to the consolidation of Komas Oy (currently Componenta Manufacturing Oy) into Componenta Group as of 1 September 2019. In addition to decreasing volumes, the profitability was burdened by the advisory fees of EUR 0.4 million related to the acquisition of Komas Oy (currently Componenta Manufacturing Oy), recorded in profit and loss account. The Group’s administrative costs have increased in proportion to its continued operations’ net sales and operating result because of Componenta Främmestad AB’s bankruptcy. The administrative costs of Componenta Corporation, the parent company, have not changed due to Componenta Främmestad AB’s bankruptcy, but they continue to burden the result of continued operations, while Componenta Främmestad AB’s net sales and direct costs are no longer part of the continued operations’ result.
The measures for adjusting the expenses have started, and we will continue to systematically improve Componenta Group’s cost-efficiency and productivity and to increase the sales. To achieve synergy benefits and strengthen the Componenta brand, the name of Componenta Finland Oy was changed to Componenta Castings Oy and the name of Komas Oy to Componenta Manufacturing Oy as of 1 January 2020.
We worked for years to improve the profitability of the Swedish machine shop Componenta Främmestad AB. The profitability of its customer relationships was weak, and we could not significantly improve profitability through negotiations on renewing customer agreements. In addition, the products were low in added value, and most of the business consisted of refining and supplying of castings from outside the Group. Because we did not manage to make the operations permanently profitable, there was no point to continue them, and Componenta Främmestad AB filed for bankruptcy on 25 September 2019. Giving up the unprofitable customer accounts of the Swedish machine shop business released capital and allowed us to focus on the component and series sizes aligned with our core business and to diversify the range of services in Finland.
For a long time, our customers have expressed their wish that Componenta would be able to offer assembly-ready components. That is why we acquired Komas Oy (currently Componenta Manufacturing Oy), a machining company, in August 2019. The acquisition made Componenta the leading manufacturer of metal components in Finland and expanded our range of products and services. We are now capable of providing industries purchasing cast and machined components with a one-stop service, which has been received well among customers. We have already closed the first new deals on finished components.
The implementation of restructuring programmes progressed as planned in 2019, and the Group’s liquidity remained good.”
Key figures
| 2019 | 2018 | Change % | |
| Net sales, continued operations, MEUR | 50.7 | 39.3 | 29.0 % |
| EBITDA, continued operations, MEUR | 1.6 | 3.2 | -50.2 % |
| Operating result, continued operations, MEUR | -1.7 | 1.0 | -274.7 % |
| Operating result, continued operations, % | -3.3 | 2.4 | -235.4 % |
| Result after financial items, continued operations, MEUR | -2.1 | 0.9 | -322.9 % |
| Net result, continued operations, MEUR | -2.1 | 0.9 | -321.8% |
| Net result, including discontinued operations, MEUR | 14.6 | 1.0 | 1,295.6 % |
| Basic earnings per share, EUR | 0.08 | 0.01 | 1,278.7 % |
| Diluted earnings per share, EUR | 0.08 | 0.01 | 660.1 % |
| Cash flow from operating activities, continued operations, MEUR | 4.1 | 1.3 | 211.5 % |
| Interest-bearing net debt | 8.7 | -3.4 | 359.8 % |
| Return on equity, % | 83.0 | 5.6 | 1,392.5 % |
| Return on investment, % | 3.2 | 6.0 | -47.1 % |
| Equity ratio, % | 29.4 | 39.3 | -25.2 % |
| Gross investments incl. lease liabilities, continued operations, MEUR | 2.8 | 1.1 | 155.1 % |
| Group’s restructing debt | 12.3 | 16.0 | -23.2 % |
| Number of personnel at the end of the period, incl. leased workers, continued operations | 617 | 439 | 40.5 % |
| Average number of personnel during the period, incl. leased workers, continued operations | 508 | 473 | 7.4 % |
| Order book at the end of the review period, continued operations, MEUR | 9.0 | 5.8 | 56.0 % |
Componenta’s Financial Statements Release 2019 in pdf format is in the appendix to this release. It is also available on the company’s website at www.componenta.com.
COMPONENTA CORPORATION
Marko Penttinen
President and CEO
For further information, please contact:
Marko Penttinen, President and CEO, tel. +358 10 403 2200
Marko Karppinen, CFO, tel. +358 10 403 2101
Componenta is a technology company that specialises in supplying cast and machined components for its global customers manufacturing vehicles, machines and equipment. The company’s share is listed on the Nasdaq Helsinki.