2014-02-10 13:25:22 CET
2014-02-10 13:26:24 CET
REGULATED INFORMATION
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Componenta - Company Announcement
Preliminary information on Componenta’s Financial Statements 1 January - 31 December 2013.Operating profit improved clearly, demand outlook improved but still uncertain for 2014
Componenta Corporation Stock Exchange Release 10.2.2014 at 14.25
-- Order book rose 5% to MEUR 87 (MEUR 83).
-- Consolidated net sales in the financial year totalled MEUR 511 (MEUR 545).
-- Operating profit excluding one-time items was MEUR 18.2 (MEUR 10.0) and
after one-time items MEUR 14.9 (MEUR 4.0). The operating profit improved
clearly thanks to greater efficiency in operations and the weakening of the
Turkish lira, despite 6% lower net sales than in the previous year.
-- Result after financial items, excluding one-time items was MEUR -6.2 (MEUR
-17.6) and after one-time items MEUR -9.6 (MEUR -25.4).
-- Earnings per share excluding one-time items were EUR -0.55 (EUR -0.92) and
after one-time items EUR -0.75 (EUR -1.22).
-- Capacity utilization rate weakened to 59% (63%).
-- Net cash flow from operations was MEUR 2.2 (MEUR -8.7).
-- The Board of Directors proposes to the Annual General Meeting that no
dividend be paid for the 2013 financial year.
Summary of Componenta's Q4/2013 interim report
Net sales in October - December totalled EUR 124 million, which is 5% more than
in the same period in the previous year (EUR 117 million).
The fourth quarter operating profit excluding one-time items improved from the
previous year to EUR 3.7 million, or 3.0% of net sales (EUR -3.5 million;
-3.0%). The operating profit after one-time items was EUR 2.1 million or 1.7%
of net sales (EUR -9.2 million; -7.9%). The fourth quarter operating profit
improved as the result of higher volumes than in the previous year, through the
cost savings obtained in the efficiency improvement program, and through the
weakening of the Turkish lira.
The one-time costs of EUR -1.5 million included in the fourth quarter operating
profit relate to the current reorganization of operations at the Pietarsaari
foundry and at the Wirsbo forges.
The fourth quarter result after financial items excluding one-time items
improved from the corresponding period in the previous year to EUR -2.5 million
(EUR -9.5 million). The result after financial items after one-time items was
EUR -4.0 million (EUR -16.9 million).
The loss attributable to shareholders for the fourth quarter excluding one-time
items was EUR -8.1 million (EUR -10.0 million) or EUR -0.31 (EUR -0.47) per
share, and after one-time items EUR -9.8 million (EUR -16.2 million) or EUR
-0.37 (EUR -0.75) per share.
Net cash flow from operations in the October - December period was EUR 14.8
million (EUR 3.8 million).
Events in 2013 - Summary
In February Componenta's Board of Directors decided to set up a new share-based
incentive scheme for key personnel in the Group. The scheme had one earnings
period, the 2013 calendar year.
In March Componenta announced that the Board of Directors had confirmed the new
financial targets for 2015 and revealed the company's new dividend policy.
In April Componenta appointed Furio Scolaro as Senior Vice President, Sales and
Product Development, and member of the Corporate Executive Team as from 1 June
2013.
In the middle of July Componenta's Board of Directors decided to call an
Extraordinary General Meeting of Shareholders on 16 August. Componenta's
Extraordinary General Meeting held on 16 August decided in accordance with the
proposal of the Board of Directors to authorize the Board to decide on a share
issue and an issue of special rights entitling to shares as referred to in
Chapter 10, Section 1 of the Limited Liability Companies Act in one or more
instalments, either against payment or without payment. The aggregate number of
shares to be issued, including the shares to be received based on the special
rights, could not exceed 2,500,000 shares. Under this authorization the Board
decided on the same day on a share issue and on offering a hybrid bond and a
new senior unsecured bond in order to strengthen the company's financial
position.
At the end of August Componenta strengthened its balance sheet and financial
position by carrying out a share issue and issuing a hybrid bond and two notes,
raising altogether EUR 77.3 million.
At the end of September Componenta decided to expand the efficiency improvement
program it began in October 2012, aiming to improve profitability by a further
EUR 10 million by the end of 2015, in addition to the earlier improvement
target of EUR 25 million. The new projects focus in particular on raising
capacity utilisation at the foundries, on developing processes and on improving
profitability.
At the same time Componenta announced that it was starting statutory personnel
negotiations in Pietarsaari, as stipulated in the Finnish Act on Cooperation in
Undertakings, at the end of September, with the objective of transferring the
small DISA production line from Pietarsaari to the Group's foundry in Pori and
in consequence of closing down the Pietarsaari foundry.
As part of the efficiency improvement program, it was decided in September, to
invest a total of EUR 5.5 million in developing production processes and
reducing waste at the Orhangazi foundry in Turkey and in reducing environmental
emissions at the Heerlen foundry in the Netherlands. The investments will be
carried out by the end of summer 2014.
A decision was made in September to expand the production capacity at the
Pistons business unit. Through an expansion investment a total of EUR 3.7
million the unit's manufacturing capacity will be doubled and Componenta's
position as a global supplier of pistons will be reinforced.
In October Componenta published the listing prospectus for the Componenta
notes, with the intention of applying to have the loan units of the unsecured
notes that were issued at the end of August listed for trading on the regulated
market on the NASDAQ OMX Helsinki Ltd stock list. The loan units of the
unsecured notes were listed on the NASDAQ OMX Helsinki Ltd stock list on 17
October 2013.
In November Componenta announced that it had concluded the statutory
negotiations that began at the end of September in Pietarsaari and in
consequence that it would be transferring the small DISA production line from
Pietarsaari to the Pori foundry and would be closing down the Pietarsaari
foundry by the end of October 2014. One-time costs and write-downs in the
balance sheet are expected to be total some EUR 2 million during 2013 and 2014
and the annual savings achieved will be about EUR 2 million. Capital
expenditure during the project will be about EUR 1 million.
Efficiency Improvement Program
Componenta's group-wide efficiency improvement program made progress in 2013
according to plan. The program's goal is to improve the company's profitability
by EUR 25 million by 2014. At the end of September 2013 the efficiency
improvement program was broadened with new development projects targeted at an
additional improvement in profitability by EUR 10 million by the end of 2015.
Some of the new measures will already help improve the result in 2014.
The run rate impact of the development projects and measures included in the
efficiency improvement program in EBITDA is estimated to be in total EUR 26.8
million.
At Orhangazi in Turkey, the efficiency program made progress as planned through
organization renewed at the end of 2012. Many measures were carried out to
improve efficiency through the production process and the overall productivity
of the foundry developed in accordance with the targets. In September 2013, itwas decided to make improvements to the casting sand system and smelting plant
process to further improve productivity and quality at the unit and make more
efficient use of raw materials in production. The Group's best practices are
being utilized in these measures. The result improvement target of the quality
and productivity development projects in the Orhangazi foundry is EUR 9
million. EUR 3 million out of that realized already in 2013. The EBITDA run
rate improvement based on the measures carried out in the foundry by now are
estimated to be EUR 6 million.
The restructuring of the production units in the Netherlands and the cutting of
55 jobs were finalized already during the first quarter of 2013. The job
reductions brought annual cost savings of EUR 2.6 million, corresponding to
half of the original total target for the program in the Netherlands.
Productivity rose in all production lines. The efficiency improvement program
was expanded during the second and third quarters, and the additional
efficiency improvement measures will continue until the end of 2014. Some of
the new savings will be achieved during 2014 and the full amount in 2015. In
September 2013 it was decided to invest in the Heerlen foundry to decrease
environmental emissions. The result improvement target of the development
projects in the Netherlands is in total EUR 5 million, and EUR 3 million out of
that realized in 2013. Based on the efficiency improvement measures carried out
by now, the run rate EBITDA improvement is EUR 4.3 million.
The machining operations for long series at the Främmestad machine shop in
Sweden are being concentrated to the Orhangazi machine shop in Turkey. The
construction work on the expansion at the Orhangazi machine shop and the
installation of machinery were completed in September 2013. Transfer of the
long series products is mainly taking place during the final quarter of 2013
and the first quarter of 2014.
In September 2013 it was decided to further continue internal product transfers
from the Främmestad machine shop to the Orhangazi machine shop. At the same
time additional measures were taken to raise productivity at the Orhangazi
machine shop, to ensure the cost benefits are obtained from the extra volumes
transferred there. The result improvement target of the production changes in
Främmestad is EUR 3 million, and EUR 1 million of that realized in 2013. The
run rate EBITDA improvement based on the measures already carried out, is EUR
3.4 million.
Many measures were taken during 2013 to improve capacity utilization and cut
fixed costs at the foundries in Finland. The operations of the large DISA
production line at the Pietarsaari foundry were terminated as planned and the
products were transferred for production at the Group's foundries in Orhangazi,
Turkey and Pori, Finland. The product transfers are expected to improve the
Group's operating profit by EUR 3 million by the end of 2014.
Statutory personnel negotiations were conducted at the Pietarsaari foundry, and
as a result in November 2013 it was decided to transfer the small DISA
production line from Pietarsaari to the Pori foundry and close down the
Pietarsaari foundry by the end of October 2014. The result improvement target
due to the production changes in the Finnish foundries is in total EUR 3
million. EUR 0.5 million of that realized in 2013, and based on the measures
already carried out, the run rate EBITDA improvement is EUR 1.5 million. The
result improvement due to the close down of the Pietarsaari foundry will
realize in 2015.
The forging business is managed as a separate business, and the measures in the
efficiency program affected all forges of Componenta Wirsbo in Sweden. The
running down of the forge in Smedjebacken and the transfer of products to the
Arvika forge were started in the first quarter of 2013. Altogether 41 jobs were
cut in the forge business during 2013. The result improvement target of the
efficiency improvement measures at Wirsbo is EUR 2 million. EUR 0.5 million
realized in 2013, and based on the measures already carried out the run rate
EBITDA improvement is EUR 1.5 million.
Measures were taken to improve efficiency and cut fixed costs in the Group's
administration and sales and planning organization during the first quarter of
2013. The measures resulted in cost savings of altogether EUR 2.9 million in
2013.
Other efficiency improvement measures carried out in 2013 resulted in profit
improvement of EUR 3.9 million. Based on all the measures already carried out
the run rate EBITDA improvement is EUR 5.2 million.
Net sales and order book
The Group's net sales in 2013 declined 6% from the previous year to EUR 511
(545) million. The Group's capacity utilization rate during the financial year
was 59% (63%). The order book at year end rose 5% from the corresponding period
in the previous year, to EUR 87 (83) million. The order book reported comprises
orders confirmed to customers for the next two months.
Componenta's net sales in the financial period by customer sector were as
follows: heavy trucks 31% (28%), construction and mining 19% (24%), machine
building 18% (19%), agricultural machinery 17% (15%), and automotive 15% (14%).
Result
The Group's EBITDA for the fiscal year excluding one-time items was EUR 36.1
(26.1) million.
Analysis of changes in income statements excluding one-time items.
Q1/13 Q1/12 Change Q2/13 Q2/12 Change Q3/13 Q3/12 Change
Q4/13 Q4/12 Change
% % %
%
--------------------------------------------------------------------------------
----------------------
Net 127.7 150.4 -15% 140.3 156.4 -10% 119.0 120.7 -1%
123.5 117.3 5%
sales
--------------------------------------------------------------------------------
----------------------
Value 130.4 154.3 -16% 145.1 158.5 -8% 117.9 119.9 -2%
118.8 113.4 5%
of
produ
ction
--------------------------------------------------------------------------------
----------------------
Materi -53.9 -64.0 -16% -57.0 -66.1 -14% -49.9 -50.9 -2%
-48.3 -51.6 -7%
als
--------------------------------------------------------------------------------
----------------------
Direct -29.0 -31.8 -9% -33.0 -35.5 -7% -26.9 -29.3 -8%
-25.0 -25.5 -2%
wages
and
exter
nal
servi
ces
--------------------------------------------------------------------------------
----------------------
Other -39.3 -44.1 -11% -41.9 -44.1 -5% -34.4 -41.8 -18%
-37.4 -35.5 5%
varia
ble
and
fixed
costs
--------------------------------------------------------------------------------
----------------------
Total -122.2 -139.8 -13% -132.0 -145.7 -9% -111.3 -121.9 -9%
-110.6 -112.6 -2%
costs
--------------------------------------------------------------------------------
----------------------
EBITDA 8.2 14.5 -44% 13.1 12.8 3% 6.6 -2.0 n/m
8.1 0.9 851%
--------------------------------------------------------------------------------
----------------------
The consolidated operating profit for the year, excluding one-time items, was
EUR 18.2 (10.0) million and after one-time items EUR 14.9 (4.0) million. The
one-time items included in the operating profit relate to the current
reorganization of operations, in total EUR -2.7 million, and to compensation
for cases involving problems with quality in previous years, in total EUR -0.7
million.
The operating profit improved considerably from the previous year, even though
volumes declined 6%. Factors contributing to the improvement in the operating
profit were the cost savings achieved in the efficiency improvement program and
the weakening of the Turkish lira.
The Group's net financial costs for the financial year, excluding one-time
items, were EUR -24.4 (-27.7) million and after one-time items EUR -24.5
(-29.4) million. Net financial costs declined from the previous year because of
lower interest costs and significantly lower refinancing costs.
The Group's result for the period after financial items, excluding one-time
items, was EUR -6.2 (-17.6) million and after one-time costs EUR -9.6 (-25.4)
million.
Income taxes for the financial year excluding one-time items totalled EUR -4.5
(0.1) million and after one-time costs EUR -6.0 (1.4) million. The increase in
tax costs in the fiscal year is mainly due to the cut in Finland's corporate
tax rate in 2014 from 24.5% to 20.0%, which has resulted in a reduction in the
value of deferred tax assets in Finland. Other factors that increased tax costs
were the supplementary taxes imposed following the tax audit in Turkey and the
increase in deferred tax liabilities arising from the weakening of the Turkish
lira.
The net result for the financial period excluding one-time items was EUR -10.7
(-17.6) million and after one-time items EUR -15.5 (-24.0) million.
Basic earnings per share for the period excluding one-time items was EUR -0.55
(EUR -0.92) and after one-time items EUR -0.75 (EUR -1.22).
The Group's return on investment excluding one-time items was 5.9% (4.0%) and
after one-time items 4.9% (2.0%). The return on equity excluding one-time items
was -12.8% (-24.8%) and after one-time items -18.6% (-32.9%).
Balance sheet, financing and cash flow
In August Componenta strengthened its balance sheet and financial position with
a share issue, hybrid bond and two notes, raising in total EUR 77.3 million.
The company issued 7,038,051 new shares, corresponding to EUR 11.3 million at
the subscription price of EUR 1.60. The company raised a total of EUR 33.7
million in capital through the hybrid bond and altogether EUR 32.3 million
through the two notes. Holders of the company's 2009 and 2010 capital notes,
2010 bond and 2012 hybrid bond were able to use the assets receivable from the
company pertaining to the principals of the capital notes and the bonds to pay
their subscriptions. After payment of the subscriptions and of the instalment
due in the repayment scheme at the end of September, at the end of the review
period the remaining amount of the company's 2009 capital notes was EUR 0.6
million and of the 2010 capital notes EUR 2.3 million. EUR 18.0 million of the
2010 bond was converted into a new bond and the remainder was paid off. At the
end of the review period some EUR 4.5 million remained of the 2012 hybrid bond.
New funds invested in the company, excluding the capital conversions, totalled
some EUR 22.6 million, which includes altogether EUR 4 million invested in the
company in June by the two largest shareholders.
Componenta will pay the instalments due in 2014 on the syndicated bond and the
2009 capital notes, in total EUR 10.6 million, with operational cash flow.
Componenta plans to refinance the repayment instalments on the loans from
Turkish banks due for payment in 2014 with new bilateral or similar long-term
loans from Turkish banks. In addition, the company has started preparations to
re-finance the company's interest bearing debts with new long-term financing
instruments. As a consequence, the average maturity of the interest bearing
debt portfolio will be lengthened significantly from the current maturity. The
company aims to finalise the re-financing in the course of spring 2014.
At the end of the financial year, Componenta's cash and bank receivables
totalled EUR 10.2 (20.6) million. In addition, Componenta's Turkish subsidiary,
Componenta Dökümcülük A.S., had unused committed credit facilities from Turkish
banks totalling EUR 3.0 (23.3) million on the closing date. Particular factors
affecting liquidity at the end of the year were the repayments of interest
bearing loans in Turkey.
Interest-bearing net debt, including the outstanding capital notes of EUR 2.9
(23.4) million as defined in IFRS, totalled EUR 230 (236) million at the end of
the year. Net gearing was 270% (284%).
At the end of the financial year the Group's equity ratio was 18.9% (18.1%).
The cut in the corporate tax rate in Finland from 24.5 per cent to 20.0 per
cent in December 2013 reduced the equity ratio by one percentage point, and as
a consequence the values of Componenta's net tax receivables relating to
Finland and therefore also the shareholders' equity declined EUR 4.4 million.
Net cash flow from operations during the review period was EUR 2.2 (-8.7)
million, and within this the changes in working capital were EUR 2.6 (-1.0)
million. Net cash flow from operations improved from the previous year mainly
because of the improved EBITDA.
Componenta makes more efficient use of capital with a programme to sell its
trade receivables. Under this arrangement, some of the trade receivables are
sold without any right of recourse. At the end of December the company had sold
trade receivables totalling EUR 82.4 (76.5) million.
At the end of 2013, the invested capital of the company was EUR 325 (340)
million.
Loans, commitments and contingent liabilities given by the parent company to
Group companies classified as related parties on 31 December 2013 totalled EUR
87.5 (84.1) million. Loans, commitments and contingent liabilities given by the
company to private persons classified as related parties on 31 December 2013
totalled EUR 0.4 (0.4) million.
Investments
Componenta again restricted the volume of investments in production facilities
in 2013 due to the under-utilisation of current capacity. Investments in
production facilities during the year totalled EUR 18.9 (19.2) million, of
which finance lease investments accounted for EUR 2.5 (0.6) million. The net
cash flow from investments was EUR -15.7 (-19.2) million, which includes the
cash flow from the Group's investments in tangible and intangible assets, and
the cash flow from shares sold and purchased and from the sale of tangible and
intangible assets.
Research and development
At the end of the 2013 financial period 106 (112) people worked in research and
development at Componenta, which corresponds to 3% (3%) of the company's total
personnel. Componenta's research and development expenses in 2013 totalled EUR
2.6 (3.2) million, the equivalent of 0.5% (0.6%) of the Group's total net
sales.
Environment
The objectives of Componenta's quality, environmental, and occupational health
and safety policy are to fulfil customer requirements and to comply with all
essential legal requirements relating to the environment, occupational health
and safety. Componenta ensures that all its business locations have sufficient
competent resources and relevant knowledge to be successful and continuously
improves its own production processes to guarantee the best possible results.
The programmes implemented for continuous improvement aim at achieving the
principle of zero defects in quality, zero accidents and zero illness in health
and safety, and at meeting agreed environmental targets.
Componenta is committed to continuous improvement and to reducing the
environmental impact of its production. The most significant environmental
aspects have been identified as the use of energy, preventing the creation of
waste, and utilising waste instead of dumping it at waste disposal sites.
In 2013 the Group's production units used 671 GWh (695 GWh) of energy. Most of
the energy used, 67% (67%), was electricity. The foundries consume about 90% of
all the energy, since especially the melting processes at the foundries utilise
much energy. In 2013 energy consumption in proportion to output at Componenta's
iron foundries rose 2%, which was due to the lower capacity utilisation rate.
In 2013 Componenta's total volume of waste declined to 137,118 tonnes (145,805
tonnes). Of this, 63% (71%) went for beneficial reuse. Componenta's waste that
goes for beneficial reuse includes metals, slag, sand and dust. The proportion
of waste sent for beneficial reuse declined as the result of the lower
proportion of the waste at the Orhangazi foundry being reused.
Almost all waste generated at Componenta is sorted. The proportion of unsorted
waste in 2013 was at the same level as in the previous year, 0.5% (0.5%) of the
total amount of waste.
Personnel
The Group had on average 4,464 (4,642) employees during the financial year,
including 311 (393) leased employees. The number of Group personnel at the end
of the year was 4,431 (4,277), which includes 277 (173) leased employees. At
year end 60% (58%) of the personnel were in Turkey, 17% (20%) in Finland, 13%
(13%) in the Netherlands, and 10% (9%) in Sweden.
Performance of segments
Componenta changed its segment reporting model as from 1 January 2013 so that
from that date reporting is based on new business divisions instead of
geographical segments. Further information about the impact of the new segment
reporting model on Componenta's financial reporting was given in a separate
release on 18 April 2013.
Foundry Division
The production units in the Foundry Division are located in Orhangazi in
Turkey, in Heerlen and Weert in the Netherlands, and in Iisalmi, Karkkila,
Pietarsaari and Pori in Finland.
At year end the order book for the Foundry Division was 8% down on the previous
year, standing at EUR 51.2 (55.6) million. The order book comprises confirmed
orders for the next two months. The order book for the Foundry Division
comprises orders from manufacturers of heavy trucks, construction and mining
machinery, and agricultural machinery, and from the machine building industry.
Net sales for the Foundry Division in the review period declined 10% from the
previous year to EUR 329 (367) million.
The operating profit in the twelve month review period, excluding one-time
items, was EUR 4.6 million, or 1.4% of net sales (EUR -2.9 million; -0.8%). The
operating profit rose significantly from the previous year thanks to greater
efficiency in operations, the cost savings and the weakening of the Turkish
lira.
October-December net sales were EUR 73.3 (74.7) million and the operating
profit excluding one-time items EUR -1.0 million, or -1.4% of net sales (EUR
-4.3 million; -5.8%). The operating profit for the fourth quarter improvedthanks to the efficiency improvement, cost savings and the weakening of the
Turkish lira.
The number of personnel on average in the Foundry Division, including leased
employees, was 8% less during the financial year than in the previous year,
standing at 2,875 (3,126).
Machine Shop Division
The production units in the Machine Shop Division are located in Orhangazi in
Turkey and in Främmestad in Sweden. The production unit for pistons in
Pietarsaari in Finland also belongs to the division.
At year end the order book for the Machine Shop Division was 10% higher than at
the same time in the previous year, standing at EUR 20.5 (18.7) million. The
order book comprises confirmed orders for the next two months. The order book
for the Machine Shop Division comprises orders from manufacturers of heavy
trucks, construction and mining machinery, and agricultural machinery, and from
the machine building industry.
Net sales in the twelve month review period declined 1% from the previous year
to EUR 116 (117) million. The operating profit for the year was EUR 2.7
million, or 2.3% of net sales (EUR 2.3 million; 2.0%). The operating profit
improved mainly due to more efficient production.
October-December net sales were EUR 30.2 (25.2) million and the operating
profit excluding one-time items EUR 0.8 million, or 2.7% of net sales (EUR -0.8
million; -3.4%). The operating profit for the Machine Shop Division improved
from the previous year thanks to higher volumes and the cost savings achieved
in the efficiency improvement program.
The number of personnel on average in the Machine Shop Division, including
leased employees, was 1% more during the financial year than in the previous
year, standing at 382 (377).
Aluminium Division
The production units in the Aluminium Division are located in Manisa, Turkey
and comprise an aluminium foundry and a production unit for aluminium wheels.
At year end the order book for the Aluminium Division was 6% higher than at the
same time in the previous year, standing at EUR 12.8 (12.1) million. The order
book comprises confirmed orders for the next two months. The order book for the
Aluminium Division comprises orders from the automotive and heavy truck
industries.
Net sales in the January-December review period declined 1% from the previous
year to EUR 72.8 (73.4) million. The operating profit for the year was EUR 9.7
million, or 13.4% of net sales (EUR 9.2 million; 12.5%). The operating profit
improved from the previous year mainly due to the weakening of the Turkish
lira.
October-December net sales were EUR 18.4 (16.9) million and the operating
profit excluding one-time items was EUR 2.9 million, or 15.6% of net sales (EUR
1.4 million; 8.4%). The operating profit for the Aluminium Division improved
from the previous year in consequence of higher volumes and the weakening of
the Turkish lira.
The number of personnel on average in the Aluminium Division, including leased
employees, was 4% more during the financial year than in the previous year,
standing at 744 (712).
Other Business
Other business comprises the Wirsbo forges in Sweden, the sales and logistics
company Componenta UK Ltd in Great Britain, service and real estate companies
in Finland, the Group's administrative functions and the associated company
Kumsan A.S. in Turkey. Other business recorded an operating profit of EUR 1.6
(0.3) million in the twelve month review period and EUR 0.6 (0.0) million in
October-December.
Shares and share capital
The shares of Componenta Corporation are quoted on NASDAQ OMX Helsinki. At the
end of the financial year the company had a total of 29,269,224 shares and the
company's share capital stood at EUR 21.9 (21.9) million. The quoted price on
31 December 2013 stood at EUR 1.63 (EUR 1.94). The average price during the
year was EUR 1.72, the lowest price was EUR 1.43 and the highest EUR 2.12. At
the end of the financial year the share capital had a market capitalization of
EUR 47.7 (42.9) million and the volume of shares traded during the period was
equivalent to 10.1% (7.2%) of the share stock.
Flagging notices
On 27 August 2013 Componenta Corporation received notification from Heikki
Lehtonen in accordance with Section 10 of Chapter 9 of the Securities Markets
Act that, in consequence of the Componenta Corporation 2013 share issue the
holding of Cabana Trade S.A., an enterprise in which Heikki Lehtonen exercises
control, had fallen below 15 per cent of the total number of shares and voting
rights in Componenta Corporation.
After the disclosure obligation arose, the holding and voting rights of Cabana
Trade S.A. totalled 3,501,988 shares, or 11.96% of the total number of shares
and voting rights. After the share issue Heikki Lehtonen and the companies in
which he exercises control owned in total 7,528,492 shares, or 25.72% of the
total number of shares and voting rights.
Share-based incentive scheme 2013
The Board of Directors of Componenta Corporation resolved on 11 February 2013
to set up a new share-based incentive scheme for key personnel. The objective
of the plan was to bring together the goals of the owners and key personnel so
as to raise the value of the company, to commit key personnel to the company,
and to offer them a competitive bonus scheme based on share ownership.
The scheme had one earning period, the 2013 calendar year. The earning
criterion for the 2013 earning period was Componenta Group's result after
financial items.
Any bonus for the 2013 earning period is paid as a combination of company
shares and cash. The part to be paid in cash is intended to cover the taxes and
tax-related costs incurred by key personnel from the bonus. The shares may not
be disposed of during a two-year restriction period. If the employment of a key
employee ends during this commitment period, they must return the shares given
as a bonus to the company without compensation.
The target group for the scheme contained 18 people at the end of 2013. The
bonuses to be paid for the 2013 earning period were the equivalent of at most
the value of 400,000 Componenta Corporation shares, including the part to be
paid in cash.
The Board of Directors decided not to allocate shares for the 2013 earning
period. The scheme's impact on the Group's result before tax at the end of 2013
was EUR 0.0 million.
Board of Directors and Management
After the AGM on 22 March 2013, the Board of Directors held its organization
meeting and elected Harri Suutari as its chairman and Matti Ruotsala as vice
chairman. The Board met 19 times in 2013. The average attendance rate of Board
members at its meetings was 97%. The Board assessed its performance in 2013,
under the leadership of its chairman, in December 2013.
At its organization meeting the Board elected Riitta Palomäki to be chairman of
the Audit Committee and Tommi Salunen as the other member of the committee. The
audit committee met 5 times in 2013 and its average attendance rate was 100%.
The Audit Committee assessed its performance in 2013, under the leadership of
its chairman, in December 2013.
Heikki Lehtonen is president and CEO of Componenta. At the end of 2013 the
Corporate Executive Team comprised: President and CEO Heikki Lehtonen; Juha
Alhonoja, Senior Vice President, Machine Shop Division; CFO Mika Hassinen; Olli
Karhunen, Senior Vice President, Foundry Division; Furio Scolario, Senior Vice
President, Sales and Product Development; Anu Mankki, Senior Vice President, HR
and Internal Communications; Pauliina Rannikko, Senior Vice President, Legal
and Risk Management; and Sabri Özdogan, Senior Vice President, Aluminium
Division.
Antti Lehto, Senior Vice President, Sales and Customer Services and a member of
the Corporate Executive Team left Componenta on 31 May 2013 to take up
employment elsewhere.
Risks and business uncertainties
Some of the most significant risks for Componenta's business operations are
risks related to the business environment (competition and price risk,
commodity and environmental risks), operational risks (customer and supplier
risks, productivity, production and process risks, labour market disruptions,
contract and product liability risks, personnel risks, and data security risks)
as well as financial risks (financing and liquidity risk, currency, interest
rate and credit risks).
In order to manage the Group's business operations it is essential to secure
the availability of certain raw materials, such as recycled metal and pig iron,
and of energy, at competitive prices. The cost risk relating to raw materials
is mainly managed with price agreements, under which the prices of products are
adjusted in line with the changes in raw material prices. Increases in prices
for raw materials may tie up more funds in working capital than estimated.
The financial risks relating to Componenta's business operations are managed in
accordance with the treasury policy approved by the Board of Directors. The
objective is to protect the Group against unfavourable changes in the financial
markets and through this to secure the Group's financial performance and
financial position.
Re-financing and liquidity risks
The Group aims to ensure the availability of financing by spreading the
repayment schedules, sources of funding and financial instruments in the loan
portfolio. The proportion of one source of funding may not exceed a limit set
in the Group Treasury Policy. The most important sources of finance used in the
Group are the syndicated credit facility dated 12 October 2012, which had a
nominal value at the end of 2013 of EUR 71.8 million and a maturity date of 30
June 2015, various capital notes and bonds, bilateral long-term loan
agreements, trade receivables financing without recourse, and lease financing.
The Group also has a commercial paper programme (EUR 150 million), but the
company had no debt from this at the end of the year.
Componenta will pay the instalments due in 2014 on the syndicated bond and the
2009 capital notes, in total EUR 10.6 million, with the operational cash flow.
Componenta plans to refinance the repayment instalments on the loans from
Turkish banks due for payment in 2014 with new bilateral or similar long-term
loans from Turkish banks.
In the opinion of the Board of Directors, the risk of not being able to
refinance the short-term loans maturing in 2014 is small. The Board believes
that the company meets the other conditions set for obtaining the finance.
More details about risks and risk management at Componenta are given in the
notes to the 2013 financial statements.
Events after end of period
Componenta announced on 6 February 2014 to postpone the publishing time of the
Financial Statements Bulletin for the year 2013 by one week and publish the
preliminary information on net sales and result for the fourth quarter and full
year 2013 and prospects for 2014 on 10 February 2014. The publishing times of
the Financial Statements Bulletin and the Financial Statements for the year
2013 changed, as the financial statements of Componenta's Turkish subsidiary
Componenta Dökümcülük A.S. were not finalized in accordance with the time
schedule.
Business environment in 2014
The demand outlook in all the Group's customer sectors remains uncertain.
At year end the order book for Componenta's heavy trucks customer sector was 9%
higher than in the previous year. Demand for heavy trucks in Europe is expected
to decrease in 2014. Componenta's sales to heavy trucks customer segment is
expected to increase due to the growing market share.
The order book for Componenta's construction and mining customer sector was 6%
higher at year end than at the same time in the previous year. Demand is
expected to remain at the same level as in the previous year. Customers reduced
their stocks during 2012 and 2013 due to weaker prospects in particular for
mining machinery industry. Demand prospects for Componenta are stable.
The order book for Componenta's machine building customer segment was 17%
higher at year end than at the same time in the previous year. Componenta's
sales outlook for machine building customer segment is expected to improve
during the first half of 2014.
The order book for Componenta's agricultural machinery customer sector was 2%
lower at year end than at the same time in the previous year. Demand for
agricultural machinery is expected to remain stable in 2014. Componenta's sales
to agricultural machinery customer sector is expected to remain at the same
level as in the previous year or to increase due to growing market share.
The order book for Componenta's automotive customer sector was 9% lower at year
end than at the same time in the previous year. The demand for automotive
industry improved towards the end of the year 2013 compared with the same
period a year earlier. In 2014, the demand for automotive industry is expected
to improve from the previous year. Componenta's sales are expected to increase
during the first half of the year even though the increased demand is not yet
visible in Componenta's order book.
Prospects for Componenta in 2014
The prospects for Componenta in 2014 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 year end was EUR 87 (83) million. Based on the order
book and production forecasts given by customers, Componenta's first quarter
net sales in 2014 are expected to be higher than in the corresponding period in
the previous year. Thanks to structural efficiency measures and cost savings
the the first quarter operating profit excluding one-time items is expected to
improve from the previous year.
In consequence of the higher volumes and the structural efficiency measures
being carried out, the operating profit for the full year excluding one-time
items is expected to improve from the previous year.
The tables relating to the preliminary information on the financial statements
2013 are enclosed to this release. They are also available on the company's
website at the address www.componenta.com.
The figures presented in this release are unaudited.
Helsinki, 10 February 2014
COMPONENTA CORPORATION
Board of Directors
Heikki Lehtonen
President and CEO
ENCL. The tables relating to the preliminary information on the financial
statements 2013
FOR FURTHER INFORMATION
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.
Componenta had net sales in 2013 of EUR 511 million and the Group employs
approx. 4,400 people. Componenta's shares are quoted on the NASDAQ OMX
Helsinki. Componenta supplies cast and machined components and total solutions
made from these to its customers, who are global manufacturers of vehicles,
machines and equipment.
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