2012-02-02 08:30:00 CET
2012-02-02 08:30:46 CET
REGULATED INFORMATION
Vacon - Financial Statement Release
Vacon Plc Financial Statement Bulletin 1 January - 31 December 2011
Vacon Plc, Stock Exchange Release, 2 February 2012 at 9.30 am
In this stock exchange release Vacon is publishing information that has a
significant impact on securities included in the financial statements. The full
financial statements are in the appendix to this release and can be downloaded
from the company's website in English at www.vacon.com and in Finnish at
www.vacon.fi.
October-December summary:
* Order intake totalled MEUR 76.9 million, a decline of 6.7 % from the
corresponding period in the previous year (MEUR 82.4).
* Revenues totalled MEUR 87.6, which was 15.1 % down on the previous year
(MEUR 103.2).
* Operating profit was MEUR -3.9, or -4.4 % of revenues, a decline of 142.5 %
(MEUR 9.1 and 8.8 %).
* Operating profit excluding one-time items was MEUR 5.7 and 6.5 % of revenues
(MEUR 12.6 and 12.2 %). One-time items totalling MEUR 9.6 comprise an
overdue receivable from one of Vacon's solar energy customers and
compensation that the court sentenced Vacon's company in China to pay.
* Net cash flow from operating activities was MEUR 6.2 (MEUR 1.6).
* Earnings per share were EUR -0.18 (EUR 0.46), a decline of 139.7 %.
January-December summary:
* Order intake totalled MEUR 365.3, growth of 2.0 % from the corresponding
period in the previous year (MEUR 358.2).
* Revenues totalled MEUR 380.9, an increase of 12.7 % (MEUR 338.0).
* Operating profit was MEUR 24.7, or 6.5 % of revenues, a decline of 13.4 %
(MEUR 28.6 and 8.5 %).
* Operating profit excluding one-time items was MEUR 34.8, or 9.1 % of
revenues (MEUR 32.4 and 9.6 %). One-time items totalling MEUR 10.1 comprise
an overdue receivable from one of Vacon's solar energy customers and
compensation that the court sentenced Vacon's company in China to pay.
* Net cash flow from operating activities was MEUR 26.8 (MEUR 15.9).
* Earnings per share were EUR 1.10 (EUR 1.22), a decline of 9.3 %.
* The Board of Directors proposes to the Annual General Meeting of
Shareholders that a dividend of EUR 0.90 per share be paid from the profit
in 2011.
Key indicators
+-----------------------------------------+----------+----------+---------+
|MEUR |10-12/2011|10-12/2010|Change, %|
+-----------------------------------------+----------+----------+---------+
|Order intake |76.9 |82.4 |-6.7 % |
+-----------------------------------------+----------+----------+---------+
|Revenues |87.6 |103.2 |-15.1 % |
+-----------------------------------------+----------+----------+---------+
|Operating profit |-3.9 |9.1 |-142.5 % |
+-----------------------------------------+----------+----------+---------+
|% of revenues |-4.4 % |8.8 % | |
+-----------------------------------------+----------+----------+---------+
|Operating profit excluding one-time items|5.7 |12.6 |-54.7 |
+-----------------------------------------+----------+----------+---------+
|% of revenues |6.5 % |12.2 % | |
+-----------------------------------------+----------+----------+---------+
|Profit before taxes |-1.4 |9.5 | |
+-----------------------------------------+----------+----------+---------+
+-----------------------------------------+---------+---------+---------+
|MEUR |1-12/2011|1-12/2010|Change, %|
+-----------------------------------------+---------+---------+---------+
|Order intake |365.3 |358.2 |2.0 % |
+-----------------------------------------+---------+---------+---------+
|Order book |36.6 |52.1 |-29.9 % |
+-----------------------------------------+---------+---------+---------+
|Revenues |380.9 |338.0 |12.7 % |
+-----------------------------------------+---------+---------+---------+
|Operating profit |24.7 |28.6 |-13.4 % |
+-----------------------------------------+---------+---------+---------+
|% of revenues |6.5 % |8.5 % | |
+-----------------------------------------+---------+---------+---------+
|Operating profit excluding one-time items|34.8 |32.4 | |
+-----------------------------------------+---------+---------+---------+
|% of revenues |9.1 % |9.6 % | |
+-----------------------------------------+---------+---------+---------+
|Profit before taxes |27.0 |27.5 | |
+-----------------------------------------+---------+---------+---------+
|Net cash flow from operating activities |26.8 |15.9 | |
+-----------------------------------------+---------+---------+---------+
|Earnings per share, EUR |1.10 |1.22 | |
+-----------------------------------------+---------+---------+---------+
|Return on equity, % |18.7 % |22.1 % | |
+-----------------------------------------+---------+---------+---------+
|Interest-bearing net liabilities |12.4 |9.8 | |
+-----------------------------------------+---------+---------+---------+
|Gearing, % |12.7 % |10.7 % | |
+-----------------------------------------+---------+---------+---------+
|Gross capital expenditure |18.7 |15.9 |17.5 % |
+-----------------------------------------+---------+---------+---------+
General review
According to Vacon's assessment, growth in the global AC drive market slowed
down especially in Europe in the fourth quarter of 2011 compared to the strong
first half of the year and the corresponding period in the previous year. Looked
at as a whole, for Vacon 2011 had two very distinct phases. In the first half of
the year demand was strong in all market areas and almost all industrial
sectors. In the second half of the year demand weakened especially for wind
power products. During the final quarter it could also be clearly seen that
demand for products for controlling electric motors declined in Europe from its
level early in the year in consequence of the debt crisis. However, the order
intake for these products increased from the level in the final quarter of 2010.
Vacon's revenues declined 15.1 % in the October-December period to EUR 87.6
million (EUR 103.2 milion in October-December 2010). In January-December
revenues increased 12.7 % to EUR 380.9 million (EUR 338.0 million in 2010). In
2011 13 % of Vacon's revenues came from products for renewable energy generation
(18 % in 2010).
Factors contributing to the slow down in the growth in revenues were the poor
order intake for products for renewable energy generation in the second half of
the year and the weakening in demand in Europe in the final quarter for Vacon's
products for controlling electric motors from the level in the first quarter. In
China new regulations imposed on wind power have temporarily reduced wind power
investments in that country. One positive aspect, however, is that Vacon's
European clients who sell wind power solutions to China are able to comply with
the new official regulations. This ensures Vacon's customers a strong
competitive position when wind power investments in China pick up.
The operating profit declined in October-December to EUR -3.9 million, or -4.4 %
of revenues (EUR 9.1 million and 8.8 %). Operating profit excluding one-time
items in October -December was EUR 5.7 million, or 6.5 % of revenues (EUR 12.6
million and 12.2 %) The operating profit declined in January-December to EUR
24.7 million, or 6.5 % of revenues (EUR 28.6 million and 8.5 %). The operating
profit excluding one-time items in January-December was EUR 34.8 million, or
9.1 % of revenues (EUR 32.4 million and 9.6 %).
There were three causes that contributed to the weakening in Vacon's
profitability in 2011 and in particular in the final quarter of the year.
Firstly, one of Vacon's solar energy clients is still arranging financing to pay
a substantial overdue debt. Vacon is continuing with measures to safeguard its
receivables, but has made provisions for a possible credit loss. Secondly, the
court proceedings involving Vacon's subsidiary in China relating to the
company's customs procedures ended in December. The court sentenced Vacon to pay
compensation totalling EUR 5.5 million, consisting of unpaid customs dues and a
fine. Vacon made a provision of EUR 3.2 million in its 2010 financial statements
in connection with the court case in China. Three parties accused in the same
court case have appealed against the court's ruling and it is possible that the
sentence imposed on Vacon may also change in the higher court. So some
uncertainty still remains in this matter.
In December 2011 Vacon made provisions totalling EUR 10 million in the income
statement in connection with the receivable from the solar energy client and the
court case in China as mentioned above.
The third factor weakening the company's profitability was the decline in sales
in the second half of the year. Vacon has started measures to save costs and
safeguard the profitability of its operations globally. As part of the company's
broader, global cost cutting plan, in December Vacon began statutory personnel
negotiations concerning white collar personnel working in Finland at the Group's
parent company Vacon Plc. The goal is to achieve annual savings in 2012 - 2013
corresponding to 60 man-years in the parent company and 10 man-years at the
subsidiaries.
The agreement made on 12 March 2011 between the shareholders of AMSC (American
Superconductor Corporation) and of The Switch Engineering Oy for the purchase of
the shares of The Switch Engineering Oy was terminated in October. According to
AMSC, the agreement was terminated due to adverse market conditions for the
financing required to fund the acquisition. The Switch Engineering Oy
shareholders will retain the EUR 14.2 million advance payment paid by AMSC on
29 June 2011 as a break-up fee. Vacon's share of the break-up fee is EUR 2.6
million, which was included under financial items in the income statement.
Vacon has continued to invest heavily in developing AC drive technology for use
in controlling electric motors and in wind and solar power plants. Vacon's solar
energy inverter Vacon 8000 Solar has obtained a wide range of grid code
approvals that comply with the requirements for national grid operators. The
company also launched three new products in the final quarter of 2011 designed
for the needs of original equipment manufacturers (OEM). The Vacon 10, Vacon 20
and Vacon 20 Cold Plate products strengthen Vacon's foothold in this high-volume
market.
Dividend proposal for 2011
The Board of Directors proposes to the Annual General Meeting of Shareholders
that a dividend of EUR 0.90 per share be paid from the profit in 2011.
Prospects for 2012
Vacon considers that there are major uncertainties relating to general growth
prospects in the economy, and these uncertainties may affect demand for AC
drives especially in Europe and possibly globally as well. Vacon does not expect
demand for products for wind power generation to recover significantly in the
first part of 2012. Vacon is launching several new products in the first half of
2012, which enhances the company's competitive position even in a challenging
market environment.
Market guidelines for 2012
The company's estimates of developments in revenues and operating profit contain
many uncertainties, due to the prevailing state of the market where it is
difficult to predict future developments. Vacon estimates that its revenues will
increase and the operating profit percentage excluding one-time items will
improve from 2011. In 2011 revenues were EUR 380.9 million and the operating
profit percentage excluding one-time items was 9.1 %.
Vacon's target is to achieve revenues of EUR 500 million in 2014. The
profitability targets are an operating profit of 14 % and a return on equity of
more than 30 %.
Financial reports in 2012
Vacon is publishing three interim reports in 2012 as follows:
· January-March: 25 April 2012
· January-June: 1 August 2012
· January-September: 24 October 2012
Formal statement
This release contains certain forward-looking statements that reflect the
current views of the company's management. Due to the nature of these
statements, they contain risks and uncertainties and are subject to changes in
the general economic situation and in the company's business sector.
Vacon in brief
Vacon is driven by a passion to develop, manufacture and sell the best AC drives
and inverters in the world - and to provide efficient life-cycle services for
its customers. Our AC drives offer optimum process control and energy efficiency
for electric motors. Vacon inverters are a key component in producing energy
from renewable sources. We have R&D and production units in Finland, the USA,
China and Italy, and sales & service offices in 27 countries. In 2011, Vacon had
revenues of EUR 380.9 million and globally employed 1,500 people. The shares of
Vacon Plc (VAC1V) are quoted on the main list of the Helsinki stock exchange.
www.vacon.com
Vaasa, 2 February 2012
VACON PLC
Board of Directors
For more information please contact:
· Mr Vesa Laisi, President and CEO, phone: +358 (0)40 8371 510
· Ms Eriikka Söderström, CFO and Vice President, Finance & Control,
phone: +358 (0)40 8371 445
Conference for media and analysts
Vacon will hold a briefing for analysts and the media at 11.30 am on 2 February
2012 at the Scandic Simonkenttä Hotel, Simonkatu 9, 00100 Helsinki. The briefing
will be in Finnish.
Dial-in conference for investors and investment analysts
An international dial-in conference for investors and investment analysts will
be held at 3.00 pm on 2 February 2012. President and CEO Vesa Laisi and Eriikka
Söderström, CFO and Vice President, Finance and Control, will participate in the
conference. Lines can be booked ten minutes before the conference by calling the
service number +358 (0)9 6937 9543 (Finland) or +44 (0)20 3450 9987 (UK). The
conference ID code is 4504749. To hear a recording of the conference, available
for seven working days, call
+358 (0)9 2310 1650 (Finland) or +44 (0)20 7111 1244 (UK), ID code #4504749.
* Conference link: http://www.media-server.com/m/p/pwq7ak9w
The presentation material will be available before the media briefing on Vacon's
website at:
www.vacon.com > Investors
DISTRIBUTION:
NASDAQ OMX Helsinki
Financial Supervisory Authority
Main Media
[HUG#1582049]
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