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Preliminary information on Componenta Corporation Financial Statements 1 January - 31 December 2015

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January - December 2015 in brief

  • Order book decreased 14% from the previous year to MEUR 77 (MEUR 89).
  • The Group’s net sales in the review period were MEUR 495 (MEUR 495).
  • EBITDA excluding one-time items and exchange rate differences of balance sheet items was MEUR 23.9 (MEUR 35.8).
  • Operating profit excluding one-time items and exchange rate differences of balance sheet items (“operating profit on business operations”) was MEUR 6.0 (MEUR 17.8). 
  • The result after financial items excluding one-time items and exchange rate differences of operative balance sheet items in the review period was MEUR -19.4 (MEUR -9.5). The result after financial items excluding one-time items was MEUR -18.3 (MEUR -12.2).
  • Componenta announced on 5 February 2016 to postpone publishing of Financial Statements Bulletin to 11 March 2016 because of ongoing strategy process, restructuring of operations and financial negotiations.
  • The company’s strategy will affect the production structure and so decline the balance sheet values of the company’s long-term assets, and thus the result for the financial period including one-time items is expected to remain lower than in the previous year.

October - December 2015 in brief  

  • Net sales were at a similar level as in the previous year standing at MEUR 119 (MEUR 120).
  • EBITDA excluding one-time items and exchange rate differences of balance sheet items was MEUR 0.2  (MEUR 5.4).
  • Operating profit excluding one-time items and exchange rate differences of balance sheet items was MEUR -4.2 (MEUR 1.2).
  • The result after financial items excluding one-time items and exchange rate differences of operative balance sheet items was MEUR -11.6 (MEUR -4.9). The result after financial items excluding one-time items was MEUR -13.7 (MEUR -5.9).

The poor development of productivity in 2015 was visible also in profitability decrease which led to the changes made at Componenta during the past two months of the year. Changes of the top management and the strategy work started in December are both targeting a clear improvement in profitabililty. In the future, Componenta will focus from volume perspective on mid-size product series in iron castings, in aluminium castings, and concentrate production to Turkey. Work for the Group strategy related to the restructuring the company’s business operations has not been finalized. The key focus in those strategic measures will be improvement of efficiency, improvement of customer service, as well as decrease of quality and fixed costs and thus, profitable business operations. Overlapping in the organization will be removed and management model simplified.

The company’s strategy will affect the production structure and thus decline the balance sheet values of the company’s long-term assets. Based on that the result for the financial period including one-time items is expected to remain lower than in the previous year.

The negotiations started in December 2015 for a financing solution to support new strategic alignments and secure the company’s liquidity position continue. The standstill agreement signed with the Nordic counterparties of the syndicated loan is valid until end of April 2016. 

Development of order book

Componenta’s order book at the beginning of the year was 14% less than in the previous year standing at EUR 77 (89) million. The order book comprises confirmed orders for the next two months. The decreased prices of recycled steel, iron and aluminium in 2015 declined the order book by some EUR 3 million because of the lower raw material surcharges compared to the same period in the previous year. Especially, demand of the construction and mining industry and the manufacturers of agricultural machinery industry continued on low level.

Net sales

Componenta’s net sales remained at a similar level as in the previous year, at EUR 495 (495) million. The Group’s capacity utilization rate in the financial period was 58% (58%). Componenta’s net sales in the review period by customer sector were as follows: heavy trucks 32% (32%), construction and mining 16% (18%), machine building 21% (20%), agricultural machinery 13% (15%) and automotive 18% (15%).

Result

Componenta’s EBITDA for the financial period excluding one-time items and exchange rate differences of balance sheet items declined from the previous year to EUR 23.9 (35.8) million. EBITDA was strongly affected by the Turkish lira and high wage inflation some EUR -5 million, the strikes in Turkish automotive industry in the second quarter some EUR -2 million and the production disturbances at the Främmestad machine shop mainly in the first and second quarter some EUR -2 million. During the fourth quarter the Group faced quality problems which had an estimated impact of some EUR -2 million on EBITDA. In addition, the result of the last quarter of 2015 was weakened by the write-offs of the raw material inventories due to decrease recycled steel prices and material costs that were higher than estimated in the Foundry division. Positive impact of the efficiency improvement program on production efficiency and EBITDA remained lower than targeted.

The Group’s net financial costs in the financial period, excluding one-time items, totalled EUR -25.4 (-27.3) million.

Key figures

  Q4 2015 Q4
2014		  
Change		  
2015		  
2014		  
Change
Order book, MEUR 76.9 88.9 -14% 76.9 88.9 -14%
Net sales, MEUR 119 120 0% 495 495 0%
EBITDA*), MEUR 0.2 5.4 -97% 23.9 35.8 -33%
Operating profit*), MEUR -4.2 1.2 n/m 6.0 17.8 -66%
Operating profit*), % -3.5 1.0 n/m 1.2 3.6 -66%
Result after financial items excluding one-time items, MEUR  -13.7 -5.9 132% -18.3 -12.2 50%
Number of personnel at period end, incl. leased personnel 4,269 4,238 1% 4,269 4,238 1%

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

The figures presented in this release are unaudited.

Componenta will publish the Financial Statements Bulletin on 11 March 2016.

Helsinki, 9 February 2016

COMPONENTA CORPORATION
 

Harri Suutari
President and CEO

 

 

For further information, please contact:

Harri Suutari
President and CEO
tel. +358 400 384 937

Markku Honkasalo
CFO
tel. +358 10 403 2710

 

 

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 2015 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.