2014-10-29 08:00:03 CET
2014-10-29 08:00:10 CET
REGULATED INFORMATION
Scanfil Oyj - Interim report (Q1 and Q3)
SCANFIL GROUP’S INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2014
SCANFIL PLC INTERIM REPORT 29 OCTOBER 2014 9.00 A.M.
SCANFIL GROUP'S INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2014
July - September
- Turnover totalled EUR 56.7 million (Q3 2013: 50.4), up to 12.6%
- Operating profit EUR 5.2 million (4.2), 9.2% (8.4%)of turnover, up to 22.4%
- Profit was EUR 3.8 million (3.0), up to 25.9%
- Earnings per share amounted EUR 0.07 (0.05)
January - September
- Turnover totalled to EUR 164.9 million (1-9 2013: 143.1), up to 15.2%
- Operating profit EUR 12.9 million (9.3), 7.8% (6.5%) of turnover, up to 38.9%
- Profit for the review period was EUR 9.8 million (6.3), up to 55.2%
- Earnings per share were EUR 0.17 (0.11)
Due to better-than-expected profitability development in the third quarter,
Scanfil plc revised its operating profit guidance for 2014 on 15 September
2014. The company estimates that its operating profit will be EUR 14.5-16.0
million. Turnover is expected to increase by 11-18%, in line with the previous
guidance.
Scanfil previously estimated that its turnover would increase by 11-18% and its
operating profit would be EUR 13.0-15.0 million in 2014.
Petteri Jokitalo, CEO of Scanfil plc:
“I'm pleased with Scanfil's performance in the third quarter. Its profitability
developed strongly overall, and its operating profit grew by approximately 22%.
In addition to increased turnover, development measures launched to improve
operational performance had a positive effect on the operating profit. Many of
the results of our development efforts are already visible. For this, we owe
thanks to our employees.”
BUSINESS TRENDS
Scanfil's turnover for January-September 2014 was EUR 164.9 million, which
represents an increase of approximately 15% year-on-year. The breakdown of
turnover by regional segment was as follows: Europe 60% (60%), Asia 40% (40%).
In January-September, professional electronics customers represented 81% (82%)
of total sales, and telecommunications customers accounted for 19% (18%) of
total sales.
The demand for telecommunications products remained strong throughout the
review period. In January-September, telecommunications sales increased by
approximately 21% year-on-year. Professional electronics sales increased by
approximately 14%, of which the acquisition of Scanfil GmbH represented
approximately 50%. Scanfil GmbH's business operations were consolidated into
Scanfil's consolidated financial statements as of 1 April 2014.
The implementation of the new ERP system has progressed as planned. The system
is currently in use in Finland, Hungary and China, and will be rolled out in
Estonia next.
FINANCIAL DEVELOPMENT
The Group's turnover for January - September was EUR 164.9 (143.1) million.
Operating profit for the Group during the review period was EUR 12.9 (9.3)
million, representing 7.8% (6.5%) of turnover. The turnover includes EUR 0.2
(0.3) million of non-recurring expenses.
Earnings for the review period amounted to EUR 9.8 (6.3) million. Earnings per
share were EUR 0.17 (0.11) and return on investment was 17.3% (11.3%).
Turnover amounted to EUR 56.7 (50.4) million in July-September and operating
profit for the third quarter was EUR 5.2 (4.2) million, or 9.2% (8.4%) of
turnover. Profit for the quarter was EUR 3.8 (3.0) million.
FINANCING AND CAPITAL EXPENDITURE
The Group enjoys a strong financial position.
The consolidated balance sheet totalled EUR 139.5 (132.6) million. Liabilities
amounted to EUR 48.6 (53.7) million, EUR 33.5 (30.2) million of which were
non-interest-bearing and EUR 15.1 (23.5) million interest-bearing. The equity
ratio was 65.2% (59.5%) and gearing -5.8% (-1.3%). The equity per share was EUR
1.57 (1.37).
Liquid cash assets totalled EUR 20.4 (24.5) million. Cash and cash equivalents
of the comparison period included EUR 9.7 million of time deposits with
maturity exceeding three months.
Net cash flow from operating activities for the review period January-September
was EUR 6.2 (4.5) million. The change in net working capital during the period
amounted to EUR -6.3 (-6.8) million. More capital has been tied up in working
capital due to higher turnover compared to the turn of the year. This year, the
investment cash flow of EUR -7.4 million (EUR -3.4 million) consists mainly of
the acquisition of the subsidiary. Cash flow from financing was EUR -7.5 (-6.8)
million, including dividends, loan instalments and use of the bank's credit
limit.
Gross investments in fixed assets in January-September totalled EUR 7.5 (3.8)
million, which is 4.6% (2.6%) of turnover. Investments include EUR 5.8 million
acquisition cost of shares of Schaltex Systems GmbH. Other investments are
mainly investments in machines and equipment. Depreciations were EUR 3.3 (3.3)
million.
BOARD OF DIRECTORS' AUTHORISATION
The Annual General Meeting authorised the Board of Directors on 8 April 2014 to
decide on the acquisition of the Company's own shares with distributable assets
and on the disposal of own shares in accordance with the Board of Directors'
proposal.
The Board of Directors' proposals to the Annual General Meeting are available
on the company website at www.scanfil.com.
The Board of Directors has no existing share issue authorisations or
authorisations to issue convertible bonds with warrants.
OPTION SHEME
Based on the authorisation given by the General Meeting on 18 April 2013, the
Board of Directors decided on 25 September to grant the CEO and Director of
Finanace of Scanfil plc and three key persons at the company's subsidiary
Scanfil EMS Oy option rights in all for 225,000 shares. The option rights
shall be marked "2013B". Each option right entitles its holder to subscribe for
one (1) of the company's new shares or shares in its possession. The
subscription period for option right 2013B is 1 May 2017 - 31 April 2019. The
subscription period for the option rights included in the option plan will not
begin, unless the production and financial goals and conditions, set separately
by the Board of Directors for exercising the option rights, are met. The option
rights whose goals are not met will expire as determined by the Board. The
subscription price of option right 2013B is EUR 1,41, which is the
trading-volume weighted average share price in the NASDAQ OMX Helsinki of the
period 1 - 31 March 2014.
The complete terms and conditions of the options plan 2013 (A) - (C) are
presented on Scanfil plc's website.
SHARE TRADING AND SHARE PERFORMANCE
The highest trading price during the review period was EUR 2.74 and the lowest
EUR 1.30, the closing price for the period standing at EUR 2.68. A total of
3,878,592 shares were traded during the period, corresponding to 6.7% of the
total number of shares. The market value of the shares on 30 September 2014 was
EUR 154.7 million.
PERSONNEL
Scanfil Group's personnel averaged 1,763 (1,674) employees during the review
period. At the end of the period, the Group employed 1,781 (1,685) people, of
whom 237 (240) worked in the company's Finnish units and 1,544 (1,445) in the
company's units outside Finland. In all, 87% (86%) of the Group's personnel
were employed by subsidiaries outside Finland on 30 September 2014.
EVENTS AFTER THE REVIEW PERIOD
Partially decreased demand by a significant customer, and demand postponed
until the second half of 2015 by the same customer, has created a need to
adjust production at the Sievi plant of Scanfil EMS Oy, a subsidiary of Scanfil
plc.
On 22 October 2014, Scanfil EMS launched statutory employee negotiations
concerning all employees at the Sievi plant. According to initial estimates
made by the company, the statutory employee negotiations may lead to temporary
lay-offs of no more than 90 days between 1 December 2014 and 30 April 2015. A
total of 25-45 employees at a time are projected to be affected. The Sievi
plant has approximately 200 employees.
FUTURE PROSPECTS
Due to better-than-expected profitability development in the third quarter,
Scanfil plc revised its operating profit guidance for 2014 on 15 September
2014. The company estimates that its operating profit will be EUR 14.5-16.0
million. Turnover is expected to increase by 11-18%, in line with the previous
guidance.
Scanfil previously estimated that its turnover would increase by 11-18% and its
operating profit would be EUR 13.0-15.0 million in 2014.
OPERATIONAL RISKS AND UNCERTAINTIES
Weakening of the global economy and the decrease in international demand for
investment commodities might have a negative impact on the development of the
business of Scanfil's customers and impair the demand in the contract
manufacturing market. This would have a negative impact on the development of
Scanfil's sales and profitability.
In other respects, the risks facing Scanfil's business have remained
essentially the same. The company's risks and risk management are described in
greater detail on the company's website under Corporate Governance and in the
notes to the consolidated financial statements.
ACCOUNTING PRINCIPLES
The interim report has been prepared in accordance with the IAS 34 Interim
Financial Reporting standard, applying the following accounting policies with
the financial statements for 2013.
All figures in the financial report have been rounded and consequently the sum
of the individual figures can deviate from the sum figure. The figures are
unaudited.
CONSOLIDATED INCOME STATEMENT
EUR million
7 - 9 7 - 9 1 - 9 1 - 9 1 - 12
2014 2013 2014 2013 2013
Turnover 56.7 50.4 164.9 143.1 188.5
Other operating income 0.1 0.1 0.2 0.2 0.3
Changes in inventories of finished goods
and work in progress -0.7 0.3 0.8 1.0 1.2
Manufacturing for own use 0.0 0.0
Expenses -49.7 -45.4 -149.7 -131.7 -173.8
Depreciation -1.1 -1.1 -3.3 -3.3 -4.4
Operating profit 5.2 4.2 12.9 9.3 11.8
Financial income and expenses 0.0 -0.3 -0.3 -0.7 -0.6
Share in the associated company´s profit -0.6 -0.6
Profit before taxes 5.2 4.0 12.7 8.0 10.6
Income taxes -1.4 -0.9 -2.9 -1.7 -2.4
Net profit for the period 3.8 3.0 9.8 6.3 8.2
Attributable to:
Equity holders of the parent 3.8 3.0 9.8 6.3 8.2
Earnings per share for profit attributable
to
shareholders of the parent:
undiluted and diluted
earnings per share ( EUR) 0.07 0.05 0.17 0.11 0.14
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million
7 - 9 7 - 9 1 - 9 1 - 9 1 - 12
2014 2013 2014 2013 2013
Net profit for the period 3.8 3.0 9.8 6.3 8.2
Items that may later be recognized in
profit or loss
Translation differences 4.0 -1.3 3.4 -0.3 -0.7
Derivative Financial Instrument 0.0 0.0 0.1 0.2 0.3
Other comprehensive income, net of tax 4.0 -1.2 3.5 -0.1 -0.4
Total Comprehensive Income 7.9 1.8 13.3 6.2 7.8
Attributable to:
Equity holders of the parent 7.9 1.8 13.3 6.2 7.8
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million
Assets 30.9.2014 30.9.2013 31.12.2013
Non-current assets
Property, plant and equipment 27.8 29.5 28.5
Goodwill 5.9 2.2 2.2
Other intangible assets 4.9 3.9 4.1
Available-for-sale investments 0.0 0.0 0.0
Receivables 0.2
Deferred tax assets 0.4 0.6 0.3
Total non-current assets 39.1 36.3 35.1
Current assets
Inventories 35.4 31.4 28.7
Trade and other receivables 44.4 40.2 33.5
Advance payments 0.2 0.2 0.1
Other financial assets 9.7
Cash and cash equivalents 20.4 14.8 28.2
Total current assets 100.3 96.3 90.5
Total assets 139.5 132.6 125.6
Shareholder's equity and liabilities 30.9.2014 30.9.2013 31.12.2013
Equity
Share capital 2.0 2.0 2.0
Translation differences 11.6 8.6 8.2
Other reserves 6.0 5.7 5.7
Reserve for invested unrestricted equity fund 10.7 10.7 10.7
Retained earnings 60.5 51.9 53.8
Total equity 90.9 78.9 80.5
Non-current liabilities
Provisions 0.4 0.5 0.4
Interest bearing liabilities 4.6 14.1 9.2
Total non-current liabilities 5.0 14.6 9.5
Current liabilities
Trade and other liabilities 31.9 28.7 26.0
Current tax 1.2 1.0 0.4
Interest bearing liabilities 10.5 9.4 9.2
Total current liabilities 43.6 39.1 35.6
Total liabilities 48.6 53.7 45.1
Total shareholder's equity and liabilities 139.5 132.6 125.6
CONSOLIDATED CASH FLOW STATEMENT
EUR million
1.1.-30.9.2014 1.1.-30.9.2013 1.1-31.12.2013
Cash flow from operating
activities
Net profit 9.8 6.3 8.2
Adjustments for the net profit 5.3 6.7 8.2
Change in net working capital -6.3 -6.8 -0.6
Paid interests and other -0.3 -0.4 -0.6
financial expenses
Interest received 0.1 0.2 0.5
Taxes paid -2.5 -1.5 -2.5
Net cash from operating 6.2 4.5 13.2
activities
Cash flow from investing
activities
Investments in tangible and -1.7 -3.6 -4.2
intangible assets
Sale of tangible and intangible 0.1 0.1 0.2
assets
Acquisition of Group company -5.8
Purchase of investments -0.0 -0.0
Receiving from other investments 9.8
Capital transfer tax refund 0.1 0.1
Repayment of loans receivable 0.0 0.0
Net cash from investing -7.4 -3.4 5.8
activities
Cash flow from financing
activities
Repayment of long-term loans -5.2 -4.4 -8.9
Proceeds from long term 0.7
borrowings
Dividends paid -2.9 -2.3 -2.3
Net cash from financing -7.5 -6.8 -11.2
activities
Net increase/decrease in cash -8.7 -5.6 7.9
and cash equivalents
Cash and cash equivalents at 28.2 20.5 20.5
beginning of period
Changes in exchange rates 1.0 -0.1 -0.2
Cash and cash equivalents at end 20.4 14.8 28.2
of period
STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
EUR million
Equity attributable to equity holders of the parent company
Reserve
for
invested
Share Translatio Other unrestrict Retaine Equity
n ed d
Equity capital difference reserve equity earning total
s s fund s
--------------------------------------------------------------------------------
1.1.2014 2.0 8.2 5.7 10.7 53.8 80.5
Transfer to funds 0.2 -0.2 0
Dividends paid -2.9 -2.9
Total comprehensive 3.4 0.1 9.8 13.3
income
Equity
--------------------------------------------------------------------------------
30.9.2014 2.0 11.6 6.0 10.7 60.5 90.9
Equity attributable to equity holders of the parent company
Reserve
for
invested
Share Translatio Other unrestrict Retaine Equity
n ed d
Equity capital difference reserve equity earning total
s s fund s
--------------------------------------------------------------------------------
1.1.2013 2.0 8.9 5.3 10.7 48.0 75.0
Transfer to funds 0.1 -0.1 0
Dividends paid -2.3 -2.3
Total comprehensive -0.3 0.2 6.3 6.2
income
Equity
--------------------------------------------------------------------------------
30.9.2013 2.0 8.6 5.7 10.7 51.9 78.9
KEY INDICATORS
1 - 9 1 - 9 1 - 12
2014 2013 2013
Return on equity, % 15.2 10.9 10.6
Return on investment, % 17.3 11.3 11.4
Interest-bearing liabilities, EUR million 15.1 23.5 18.3
Gearing, % -5.8 -1.3 -12.2
Equity ratio, % 65.2 59.5 64.1
Gross investments in fixed assets, EUR million 7.5 3.8 4.0
% of net turnover 4.6 2.6 2.1
Personnel, average 1 763 1 674 1 673
Earnings per share, EUR 0.17 0.11 0.14
Shareholders´ equity per share, EUR 1.57 1.37 1.39
Number of shares at
the end of period, 000´s
- not counting own shares 57 730 57 730 57 730
- weighted average 57 730 57 730 57 730
The company has a EUR 13.3 million loan in connection with which the company has
entered
into interest and currency swap agreements to convert the SEK-denominated
principal
and cash flows of instalments and interest payments into euros. The interest and
currency swap agreement fully hedges the instalments and interest payments
against
fluctuations in exchange and interest rates.
The company operates in a sector where order books typically span a short period
of time. For this reason, future sales development cannot be reliably
estimated.
SEGMENT INFORMATION
EUR million
1 - 9 1 - 9 1 - 12
2014 2013 2013
Turnover
Europe 101.5 87.6 112.2
Asia 66.5 58.2 79.6
Turnover between segments -3.2 -2.7 -3.3
Total 164.9 143.1 188.5
Operating profit
Europe 6.1 5.0 5.2
Asia 6.8 4.4 6.6
Total 12.9 9.3 11.8
Assets
Europe 70.0 64.4 67.8
Asia 63.7 66.0 55.5
Goodwill 5.9 2.2 2.2
Shares in associated companies 139.5 132.6 125.6
Total
CHANGES IN TANGIBLE NON-CURRENT ASSETS
EUR million
1 - 9 1 - 9 1 - 12
2014 2013 2013
Book value at the beginning of the 28.5 29.9 30.5
period
Additions 1.4 3.3 2.9
Consolidation of business operations 0.2
Deductions -0.0 -0.5 -0.5
Depreciations -3.0 -3.1 -4.2
Exchange rate differences 0.7 -0.1 -0.2
Book value at the end of the period 27.8 29.5 28.5
FINANCIAL ASSETS AND LIABILITIES, CARRYING AMOUNT AND FAIR VALUE
EUR million
30.9.2014 30.9.2014
Book values of Fair values of
balance sheet balance sheet
values values
Non-current assets
Available for sale investments 0.0 0.0
Non-current assets total 0.0 0.0
Current assets
Trade and other receivables 42.7 42.7
Cash and cash equivalents 20.4 20.4
Current assets total 63.1 63.1
Total financial assets 63.1 63.1
Non-current financial liabilities
Interest bearing liabilities from 4.4 4.4
financial institutions
Derivative 0.0 0.0
Financial leasing 0.1 0.1
Non-current financial liabilities total 4.6 4.6
Current financial liabilities
Interest bearing liabilities from 10.4 10.4
financial institutions
Derivative 0.1 0.1
Financial leasing 0.2 0.2
Trade and other payables 26.6 26.6
Current financial liabilities total 37.2 37.2
Total financial liabilities 41.8 41.8
The valuation of derivatives is based on market data (level 2).
The valuation of available for sale investments is based on the acquisition cost
(level 3) as the fair value
of the shares cannot be determined reliably.
CONTINGENT LIABILITIES
EUR million
1 - 9 1 - 9 1 - 12
2014 2013 2013
Given business mortgages 26.0 40.0 40.0
Pledged guarantees 0.8 1.2 1.2
Leasing liabilities and other lease 3.1 0.0 0.0
liabilities
In addition, Scanfil EMS Oy has provided a guarantee of any obligations arising
from the subsidiary's delivery contracts with its customers. The guarantee is
limited to a maximum of EUR 7.5 million and seven years after the expiry of the
last product agreement.
Scanfil plc has granted Nordea Bank Finland Plc an absolute guarantee for the
payment of Scanfil EMS Oy's loan of originally EUR 40 million and resulting
obligations to pay. The principal of the loan on Scanfil EMS Oy's balance sheet
(FAS) on 30 June 2014 is EUR 13.3 million.
Scanfil plc has a credit limit associated with the Group account for EUR 5.0
million, for which Scanfil plc has granted an absolute guarantee. Scanfil EMS
Oy may use this credit limit, for which it has also provided security.
Scanfil plc has provided Nordea Bank Finland plc with an absolute guarantee for
the EUR 1.0 million credit
limit of Scanfil Kft and EUR 2.0 million credit limit of Scanfil GmbH, and
Siemens Finance and Leasing GmbH for Scanfil GmbH's lease liabilities of EUR
0.4 million. A total of EUR 1.5 million of the credit limits were in use on 30
September 2014.
TRANSACTIONS WITH RELATED PARTIES
EUR million
1 - 9 1 - 9 1 - 12
2014 2013 2013
Related party transactions:
Associated companies
Sales income 0.0 0.0 0.1
Trade receivables 0.3
Interest income 0.0 0.0
Loan receivables 0.3
Interest receivables 0.0
Scanfil EMS Oy has rented an office space from Kiinteistö Oy Pilot 1, which is
owned by a company
whose head owners are Jorma Takanen, Harri Takanen, Jarkko Takanen and Reijo
Pöllä.
Rental costs were EUR 14 thousand by 30 September 2014 (EUR 10 thousand in
2013).
Administrative service income from Sievi Capital plc were EUR 33 thousand by 30
September 2014
(EUR 30 thousand in 2013)
KEY INDICATORS QUATERLY
Q3/14 Q2/14 Q1/14 Q4/13 Q3/13 Q2/13 Q1/13 Q4/12
Turnover, MEUR 56.7 60.6 47.6 45.4 50.4 48.7 44.0 40.8
Operating profit, MEUR 5.2 5.2 2.5 2.5 4.2 3.1 2.0 0.7
Operating profit, % 9.2 8.6 5.3 5.6 8.4 6.3 4.6 1.8
Net income, MEUR 3.8 4.3 1.7 1.9 3.0 2.1 1.1 0.3
SCANFIL PLC
Petteri Jokitalo
CEO
Additional information:
CEO Petteri Jokitalo
Tel +358 8 4882 111
Distribution NASDAQ OMX, Helsinki
Major Media www.scanfil.com
Scanfil Group is engaged in contract manufacturing for international
telecommunications technology and professional electronics manufacturers.
Scanfil has almost 40 years of experience in demanding contract manufacturing.
Scanfil is a systems supplier that offers its products and services to
international telecommunications systems manufacturers and professional
electronics customers. Typical products are equipment systems for mobile and
public switched telephone networks, automation systems, frequency converters,
lift control systems, equipment and systems for electricity production and
transmission, analysers, slot machines and different meteorological
instruments. The company has production facilities in China, Estonia, Germany,
Hungary and Finland.
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where its distribution or publication is unlawful. Forward looking statements:
certain statements in this stock exchange release may constitute"forward-looking" statements which involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements of Scanfil Oyj to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. When used in this stock exchange release, such statements use such
words as "may,""will,""expect,""anticipate,""project,""believe,""plan"
and other similar terminology. New risk factors may arise from time to time and
it is not possible for management to predict all of those risk factors or the
extent to which any factor or combination of factors may cause actual results,
performance and achievements of Scanfil Oyj to be materially different from
those contained in forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results. The forward-looking information
contained in this stock exchange release is current only as of the date of this
stock exchange release. There should not be an expectation that such
information will in all circumstances be updated, supplemented or revised,
except as provided by the law or obligatory regulations, whether as a result of
new information, changing circumstances, future events or otherwise.
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