Vacon - Interim report (Q1 and Q3)

Vacon Plc Interim report 1 January - 31 March 2014

Vacon Plc, Stock Exchange Release, 23 April 2014 at 9.30 am (EET)

In this stock exchange release Vacon is publishing information included in the
interim report that has a significant impact on the value of securities. The
full interim report is in the appendix to this release and can be downloaded
from the company's website in Finnish at www.vacon.fi and in English at
www.vacon.com.

January-March highlights:

  * Order intake totalled MEUR 104.8 (MEUR 100.2, an increase of 4.6% on the
    corresponding period in the previous year.
  * Revenues totalled MEUR 89.3 (MEUR 91.3), a decline of 2.3% from the
    corresponding period in the previous year.
  * Operating profit was MEUR 6.7, or 7.5% of revenues (MEUR 5.8 and 6.3%).
  * Net cash flow from operating activities was MEUR -0.6 (MEUR 16.6).
  * Earnings per share were EUR 0.16 (EUR 0.12).
  * The Annual General Meeting resolved to increase the number of shares in the
    Company by issuing new shares without payment to the shareholders in
    proportion to their holdings, so that one (1) share is given for each
    existing share. The figures presented in the interim report, apart from the
    dividend, have been adjusted to bring them in line with the situation after
    the issue of shares without payment (share split). The new shares registered
    in connection with the share split did not entitle holders to the dividend
    for the 2013 fiscal year decided on at the AGM.
  * The AGM adopted the proposal of the Board of Directors to pay a dividend of
    EUR 1.30 a share, in total MEUR 19.8. The dividend was paid on 8 April 2014.
  * At its organizational meeting after the AGM, the Board of Directors elected
    Panu Routila as Chairman and Jari Eklund as Vice Chairman of the Board.

January-March key indicators:

+---------------------------------------+--------+--------+---------+---------+
|MEUR                                   |1-3/2014|1-3/2013|Change, %|1-12/2013|
+---------------------------------------+--------+--------+---------+---------+
|Order intake                           |   104.8|   100.2|     4.6%|    399.8|
+---------------------------------------+--------+--------+---------+---------+
|Order book                             |    62.4|    58.9|     5.9%|     46.8|
+---------------------------------------+--------+--------+---------+---------+
|Revenues                               |    89.3|    91.3|    -2.3%|    403.0|
+---------------------------------------+--------+--------+---------+---------+
|Operating profit                       |     6.7|     5.8|    16.0%|     40.6|
+---------------------------------------+--------+--------+---------+---------+
|% of revenues                          |    7.5%|    6.3%|         |    10.1%|
+---------------------------------------+--------+--------+---------+---------+
|Profit before taxes                    |     6.7|     6.0|    10.7%|     39.7|
+---------------------------------------+--------+--------+---------+---------+
|Net cash flow from operating activities|    -0.6|    16.6|         |     46.7|
+---------------------------------------+--------+--------+---------+---------+
|Earnings per share, EUR                |    0.16|    0.12|    27.9%|     0.92|
+---------------------------------------+--------+--------+---------+---------+
|Interest-bearing net liabilities       |   -10.0|   -21.1|   -52.4%|    -17.2|
+---------------------------------------+--------+--------+---------+---------+
|Gearing, %                             |  -10.0%|  -22.2%|         |   -14.7%|
+---------------------------------------+--------+--------+---------+---------+
|Gross capital expenditure              |     4.8|     4.2|    14.2%|     19.7|
+---------------------------------------+--------+--------+---------+---------+



President and CEO Vesa Laisi: Order intake increased in the first quarter"I am particularly satisfied with the way Vacon personnel succeeded in getting
order intake back on a growth track during the first quarter. This places us in
a good position for increasing revenues in 2014.

The volume of orders received increased in the January-March 2014 period 4.6%
from the corresponding period in the previous year and 19.6% from the final
quarter in 2013. We cannot be satisfied with how revenues developed in the first
quarter. The main reason for the slight fall in revenues was the low order
intake in the final quarter of 2013. Profitability improved from the
corresponding period in the previous year. The low level of revenues did however
have a negative impact on profitability.

In January 2014 we launched the new VACON(®) NXP System Drive product range,
which expands our product offering for system integrators. The new product range
of standardized AC drives offers customers cost-efficiency, reliability and
uniform quality. Our strong, continuously upgraded product offering creates
outstanding potential for further raising our market share.

Early in 2014 we had the honour of welcoming special guests to Vacon, when
President Barack Obama and US Secretary of Energy Ernest Moniz visited our R&D
center in Research Triangle Park in North Carolina. The visit was part of the
president's tour of North Carolina. This brought Vacon excellent visibility in
North America.

Vacon's new vision, The Drives Family, was created together with personnel in
2013. We have started to introduce the new vision within our own organization
and stakeholders. Our unique corporate culture is one of our success factors and
nurturing this is one of our most important goals."

Prospects for 2014

Market research institute IHS estimates that the AC drive market is growing at
an average rate of 7% in the period 2012-2017. Global megatrends, such as
urbanisation, increase in industrial automation, energy efficiency, developing
markets and renewable energy, all support growth in the AC drive market. Growth
in the AC drive market varies from year to year, and even from one quarter to
another, but as a general rule it is estimated that the AC drive market grows
much faster than global average growth in gross national product.

There are uncertainties relating to general developments in the market in 2014.
Vacon estimates that the AC drive market will grow some 5-10% in 2014, depending
on general developments in the market. During the past few years the Company has
expanded and renewed its product offering, which places the Company in a strong
position to grow faster than the AC drive market in 2014. The orders received in
the January-March period support growth in the Company's revenues during the
remainder of the year.

Vacon's goal is to improve profitability in 2014. Key factors contributing to an
improvement in profitability are the cost benefits from transferring material
sourcing to lower cost countries and raising overall efficiency in operations.

Market guidelines for 2014

Vacon is retaining the market guidelines it published earlier and estimates that
its revenues will increase 5-15% and its operating profit percentage excluding
one-time items will be 11-13% in 2014.

Revenues in 2013 totalled EUR 403.0 million and the operating profit percentage
excluding one-time items was 10.1%.

Vacon's financial targets for the period 2014-2020

Growth: The target is to achieve an average annual revenue growth of over 10%.
The growth target is based on growing the business organically in a market
environment where the AC drives market grows clearly faster than the average
Gross Domestic Product (GDP). Selective acquisitions can be used to further
accelerate the growth.

Profitability: The long-term profitability target is to achieve a sustainable
EBIT margin level of 14%. Vacon focuses on growth and on measures that improve
the company's efficiency in the long term and thus deliver a higher absolute
EBIT and shareholder value.

Vacon does not consider the long term financial targets as market guidance for
any given year during the period 2014-2020. It will issue separate market
guidance annually.

Financial reports in 2014

Vacon is publishing two interim reports in 2014 as follows:

  * January-June: Wednesday, 30 July at 9.30 am
  * January-September: Wednesday, 22 October at 9.30 am

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 provide customers with efficient product
lifecycle services. Our AC drives offer optimum process control and energy
efficiency for electric motors. Vacon inverters play a key role when energy is
produced from renewable sources. Vacon has production and R&D facilities in
Europe, Asia and North America, and sales offices in 30 countries. Further,
Vacon has sales representatives and service partners in nearly 90 countries. In
2013, Vacon's revenues amounted to EUR 403.0 million, and the company employed
globally approximately 1,600 people. The shares of Vacon Plc (VAC1V) are quoted
on the main list of the Helsinki stock exchange (NASDAQ OMX Helsinki).

Driven by Drives, www.vacon.com

Vaasa, 23 April 2014

VACON PLC

Board of Directors

For more information please contact:

  * Vesa Laisi, President and CEO, Vacon Plc, phone +358 (0)40 8371 510,
    vesa.laisi(at)vacon.com
  * Ann-Louise Brännback, CFO, Vacon Plc, phone +358 40 8371 376,
    ann-louise.brannback(at)vacon.com
  * Sebastian Linko, Director, Corporate Communications and Investor Relations,
    Vacon Plc, phone +358 (0)40 8371 634, sebastian.linko(at)vacon.com

Conference for media and analysts

A briefing for the financial analysts and media will be held on 23 April 2014 at
Pörssitalo, Fabianinkatu 14 A, 2nd floor, Helsinki (entrance via NASDAQ OMX
Helsinki's reception) at 11:30 am Finnish time (EET).

Dial-in conference for investors and investment analysts

A dial-in conference for investors and investment analysts will be held at 3.00
pm on 23 April 2014. President and CEO Vesa Laisi, CFO Ann-Louise Brännback and
Director, Corporate Communications and Investor Relations Sebastian Linko will
participate in the conference. Please call (Finland Toll +358(0)9 6937 9543) or
(UK Toll +44(0)20 3427 1901) and request to be connected to the Vacon call
(Confirmation code 3132678). A recording of the conference will be available for
seven days at (Finland Toll +358 (0)9 2310 1650) or (UK Toll +44 (0)20
3427 0598) and access code 3132678#.

  * Webcast URL: http://www.media-server.com/m/p/koxa3h3h

The presentation material will be available before the start of the briefing at
the Vacon's website www.vacon.com > Investors > Reports and presentations.

Distribution:

NASDAQ OMX Helsinki
Financial Supervisory Authority
Main media

ATTACHMENTS


[HUG#1778884]

Attachments:

Vacon Plc Interim Report January-March 2014 with tables.pdf

Vacon Interim Report Q1/2014 Results Presentation.pdf