2009-04-22 08:30:00 CEST
2009-04-22 08:31:23 CEST
REGULATED INFORMATION
Vacon - Interim report (Q1 and Q3)
Vacon Plc Interim Report 1 January - 31 March 2009
Vacon Plc, Stock Exchange Release, 22 April 2009 at 9.30 am:
January-March summary:
- Order intake totalled MEUR 69.0, a decline of 11.8 % from
the corresponding period
in the previous year (MEUR 78.2).
- Revenues totalled MEUR 70.0, growth of 6.2 % (MEUR 65.9).
- Operating profit was MEUR 7.1, a decline of 6.6 % (MEUR
7.6).
- Cash flow from operations was MEUR 6.3 (MEUR 4.6).
- Earnings per share were EUR 0.29 (EUR 0.34), a decline from
the previous year of 14.7 %.
The global recession has weakened demand for AC drives in many market
segments. Some customers seem to be postponing their purchasing
decisions and individual orders are in average smaller than in the
past. Vacon estimates that the market for AC drives in 2009 will be
somewhat smaller than in 2008.
Vacon sees the current challenging state of the market as an
opportunity and aims to strengthen its market position in all major
market areas. AC drive investments to improve energy efficiency and
in renewable energy generation also support the development of
Vacon's business in difficult economic conditions. Vacon maintains
its previous assessment of its financial performance in 2009.
Vacon's first quarter performance in current market conditions is
good. Praise for this is due to Vacon's personnel, who with their
competence and attitude have strengthened the company's position in
all major market areas.
The value of orders received by Vacon in the first quarter totalled
EUR 69.0 million. The value of orders received in the last quarter
2008 totalled 67.2 million. Revenues totalled EUR 70.0 million, or
6.2 % higher than in the previous year. Operating profit was EUR 7.1
million, which was 6.6 % lower than in the corresponding period in
the previous year. The reason for the decline in operating profit was
an increase of EUR 1.7 million in fixed costs from the year before.
Fixed costs in the first quarter of 2009 were 3.9 % lower than in the
final quarter of 2008.
The balance sheet remained strong. The company has paid particular
attention to the management of working capital, to ensure the Group
has cost-effective financing in the near future. The cash flow from
operations was EUR 6.3 million in January - March 2009.
January - March result and equity structure
MEUR 1-3/ 1-3/ Change, 1-12/
2009 2008 % 2008
Revenues 70.0 65.9 6.2 293.2
EBITDA 9.4 9.3 1.1 41.9
Depreciation - tangibles -1.0 -0.8 25.0 -3.5
EBITA 8.3 8.5 -2.4 38.4
Amortization - intangibles -1.2 -0.9 33.3 -3.8
Operating profit 7.1 7.6 -6.6 34.6
Profit before tax 6.6 7.3 -9.6 32.6
Profit for period 4.5 5.2 -13.5 23.9
The first quarter operating profit was 6.6 % lower than in the
previous year. The operating profit as a percentage of net sales fell
from 11.5 % last year to 10.1 %. The EBITA margin was 11.9 %,
compared to 12.9 % one year ago. Investments in growth, such as
establishing new sales companies and the increasing number of
personnel, have weakened profitability. The earnings per share was
EUR 0.29, a decline of EUR 0.05 from the previous year.
The balance sheet total was EUR 149.6 (135.9) million. The equity
ratio was 54.3 %. The Group's cash flow from operations for the
January - March period was EUR 6.3 (4.6) million.
The Group's equity structure and liquidity remained strong.
Interest-bearing net debt at the end of the period totalled EUR 9.7
(5.7) million, and gearing was 12.1 % (9.9 %).
The Annual General Meeting was held in April, so the dividend paid
(EUR 0.65 per share) was not entered as a dividend payment liability
in the interim financial statement for the first quarter. The
dividend was paid on 15 April 2009 in accordance with the decision of
the AGM.
The Group's order book stood at EUR 47.0 (47.1) million. The order
book declined EUR 1.0 million from the beginning of the year.
Market position
Vacon Group revenues by market area were as follows:
MEUR 1-3/ % 1-3/ % 1-12/ %
2009 2008 2008
Europe,
Middle East,
Africa 50.4 72.0 47.1 71.5 210.5 71.8
North
and South
America 12.1 17.3 13.0 19.7 55.9 19.1
Asia and
Pacific 7.5 10.7 5.8 8.8 26.8 9.1
Total 70.0 100.0 65.9 100.0 293.2 100.0
During the first quarter of 2009 Vacon strengthened its global
position. Based on market surveys, the company estimates that it has
about four per cent of the global market.
Developments in Vacon's revenues by market region were as follows:
Europe, Middle East and Africa in total +7.0 %, North and South
America -6.9 % and Asia and Pacific +29.3 % from the corresponding
period in the previous year.
Breakdown of Vacon Group revenues by distribution channel
MEUR 1-3/ % 1-3/ % 1-12/ %
2009 2008 2008
Direct
sales 41.9 59.9 29.0 44.0 146.4 49.9
Distribu-
tors 6.3 9.0 8.7 13.2 34.4 11.7
OEM 12.0 17.1 17.0 25.8 60.0 20.5
Brand
label 9.8 14.0 11.2 17.0 52.4 17.9
Total 70.0 100.0 65.9 100.0 293.2 100.0
Sales via several sales channels declined; OEM -29.4 %, distributors
-27.6 % and brand label customers -12.5 %. Revenues from direct sales
(including sales to system integrators) increased 44.5 % from the
previous year. This was supported especially by the sales to system
integrators.
Vacon Group structure
During the first quarter the recently established subsidiaries in
South Korea, Denmark and Canada started operations.
Research and development
R&D expenditure during the first quarter totalled EUR 4.4 (4.1)
million, and EUR 0.9 (0.3) million of this was capitalized as
development costs. R&D costs accounted for 6.3 % of the Group's
revenues (6.2 %).
Work on developing new products continued in accordance with the
company's plans. The company's goal in 2009 is to increase the
product offering in the new AC drive family. R&D focuses on improving
cost-efficiency, functionality, use of space, visual properties, user
friendliness and energy efficiency.
Investments
Gross investments by the Group during the first three months totalled
EUR 3.4 (1.3) million. Expenditure focused on R&D, information
systems, raising production testing capacity, and expanding
production capacity for new products.
Organization and personnel
The number of Vacon Group personnel has decreased by 7 since the
beginning of the year. At the end of March the Group employed 1,190
(1,068) people, of whom 639 (591) were in Finland and 551 (477) in
other countries. The table below shows the average number of Vacon
employees during the review period:
1-3/2009 1-3/2008 1-12/2008
Office personnel 758 628 687
Factory personnel 442 427 444
Total 1,200 1,055 1,131
Shares and shareholders
Vacon had a market capitalization at the end of March of EUR 273.6
million. The closing share price on 31 March 2009 was EUR 18.01. The
lowest share price during the January-March period was EUR 15.30 and
the highest EUR 21.50. A total of 1,650,992 Vacon shares were traded
during the January-March period, in monetary terms EUR 27.5 million.
Vacon's main shareholders on 31 March 2009 were:
Number of Holding, %
shares
Ahlström Capital Oy 2,297,996 15.0
Tapiola Mutual Pension
Insurance Company 584,500 3.8
Vaasa Engineering Oy 424,433 2.8
Ilmarinen Insurance Company 403,017 2.6
Koskinen Jari 360,670 2.4
Holma Mauri 347,171 2.3
Ehrnrooth Martti 333,000 2.2
Tapiola Group companies 325,300 2.1
Niemelä Harri 309,840 2.0
OP-Delta fund 303,998 2.0
Nominee registered
and in foreign ownership 4,321,501 28.3
Others 5,181,762 33.8
Vacon Plc's own shares 101,812 0.7
Total 15,295,000 100.0
Shares outstanding 15,193,188
On 31 March 2009 members of Vacon's Board of Directors, the President
and CEO, and the Deputy to the CEO held directly a total of 574,276
shares or 3.8 % of Vacon's share stock.
On 9 February 2009 Vacon announced that the holding of Ameriprise
Financial, Inc and its companies in Vacon Plc's share capital and
votes had fallen below 5 %. Following this announcement, Ameriprise
Financial, Inc. and its companies held directly or indirectly
altogether 761,841 shares or 4.981 % of the shares and votes.
On the 22 February 2009 Vacon announced that the holding of
Ameriprise Financial, Inc. and companies belonging to it in Vacon
Plc's share capital and votes had exceeded 5 %. Following this
announcement, Ameriprise Financial, Inc. held directly or indirectly
altogether 783,288 shares, or 5.121 % of the shares and votes.
Own shares
On 31 March 2009 Vacon Plc held a total of 101,812 of its own shares.
Annual General Meeting of Shareholders
Vacon Plc's Annual General Meeting of Shareholders was held in Vaasa
on 1 April 2009. The AGM approved the 2008 financial statements and
discharged the Board members and Managing Director from liability for
the 2008 fiscal year.
The AGM adopted the Board's proposal of paying a dividend of EUR 0.65
per share, or EUR 9,875,572.20 in total. The AGM decided on 6 April
2009 as the record date for the dividend payment and 15 April 2009 as
the payment date.
The AGM confirmed that the number of Board members is seven (7).
Pekka Ahlqvist, Jari Eklund, Mauri Holma, Jan Inborr, Veijo Karppinen
and Riitta Viitala were re-elected as Board members and Mika
Vehviläinen was elected as a new member to the Board.
The AGM decided that KPMG Oy Ab would continue as the company's
auditor, with Pekka Pajamo as principal auditor.
The AGM decided to amend Article 8 of the Articles of Association so
that the invitation to a general meeting of shareholders shall be
sent no later than three (3) weeks before the general meeting.
The AGM adopted the Board's proposal to authorize the Board to decide
on purchasing the Company's own shares. The Board's proposal is
reported in the stock exchange release of 19 February 2009. The
decisions of the Annual General Meeting of Shareholders were
supported by all the shareholders at the AGM, unless otherwise stated
in the minutes of the meeting.
Jan Inborr was re-elected Chairman and Veijo Karppinen was re-elected
Vice Chairman of the Board of Directors at the Board's organization
meeting. Jan Inborr was re-elected Chairman of the Board's
Remuneration and Nomination Committee and Pekka Ahlqvist and Veijo
Karppinen were re-elected members of the committee.
Dividend policy
The dividend policy of Vacon's Board of Directors is to propose for
approval by the Annual General Meeting of Shareholders a dividend in
line with the company's financial performance. The goal is to pay a
dividend of about 50 % of the profit for the period. The level of
dividend takes into account the financing required to expand
operations.
Risks and uncertainties in the near future
The global economic crisis came to a head in the final quarter of
2008 and the uncertainty continued in the first quarter of 2009. On
the other hand, in difficult market conditions in particular
companies have a need to improve the cost-efficiency of their
operations, which in turn encourages them to invest in solutions that
improve energy efficiency, such as AC drives.
The most significant risks for Vacon in the near future are the
weakening of general demand, and intensifying competition on price.
Other major risks relate to the availability of certain raw materials
and components and to developments in their prices. Purchase
agreements for raw materials and components are mainly annual
agreements, which contain price and exchange rate clauses for changes
in the global market prices of raw and other materials. The global
recession may harm the business opportunities for certain component
suppliers.
The company's profitability is also affected by the standing of the
euro against other invoicing currencies. The most important of these
are the US dollar and the Chinese renminbi.
Prospects for 2009
It is difficult to estimate developments in AC drive markets in 2009
in the current state of the global economy, and the estimates given
contain uncertainties.
Vacon expects the AC drive market in 2009 to decline to a certain
extent from 2008. Investments to improve the energy efficiency of
electric motor drives and in renewable energy generation are
increasing, but investments to improve industrial processes and in
new building are falling.
Vacon has about a 4 % market share. The global sales network, the
renewal of the product offering, and the relatively low market share,
coupled with a flexible organization support the development of
Vacon's business even in difficult market conditions. Vacon will
adapt its investments in growth to the prevailing market situation so
as to secure its profitability.
Vacon forecasts that revenues in 2009 will remain at the same level
as in 2008. Profitability and the earnings per share are expected to
be slightly below their 2008 levels.
Financial reports in 2009
Vacon is publishing two more interim reports in 2009 as follows:
- January-June Wednesday, 5 August 2009 at 9.30 am
- January-September Tuesday, 27 October 2009 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 design, manufacture and sell only thebest AC drives on the planet - and nothing else. AC drives can be
used to control electric motors or to help generate power from
renewable sources. Vacon has R&D and production units in Finland, the
United States, China and Italy, and sales offices in more than 25
countries. In 2008, Vacon had revenues of EUR 293.2 million and
globally employed ca 1,200 people. Vacon's shares (VAC1V) are listed
and publicly traded on the Helsinki Stock Exchange.
Driven by Drives, www.vacon.com
Vaasa, 22 April 2009
VACON PLC
Board of Directors
For more information please contact:
Mr Vesa Laisi, President and CEO, phone: +358 (0)40 8371 510
Mr Mika Leppänen, CFO and Vice President, Finance & Control, phone:
+358 (0)40 8371 235
Conference for media and analysts
Vacon will hold a briefing for analysts and the media at 11.30 am on
22 April 2009 in the Vaakuna meeting room at the Sokos Hotel Vaakuna,
Kaivokatu 3, Helsinki.
Dial-in conference for investors and investment analysts
A dial-in conference in English for investors and investment analysts
will be held at 3.00 pm on 22 April 2009. President and CEO Vesa
Laisi and Mika Leppänen, 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 +44 207 162 0025.
The conference ID code is "Vacon Oyj". To hear a recording of the
conference, available for three working days, call +44 207 031 4064,
ID code 824277.
Conference link:
http://wcc.webeventservices.com/view/wl/r.htm?e=133672&s=1&k=B43706B466C94005A4D538A5A24B113C&cb=genesys
Distribution
NASDAQ OMX Helsinki
Financial Supervision Authority
Main media
Accounting principles
This interim report has been prepared in accordance with IFRS
(International Financial Reporting Standards) standard IAS 34 on
Interim Financial Reporting.
Vacon has prepared this interim report applying the same accounting
principles as those decribed in detail in its 2008 consolidated
financial statements.
The interim report is unaudited.
Consolidated income statement, IFRS, MEUR
1-3/ 1-3/ 1-12/
2009 2008 2008
Revenues 70.0 65.9 293.2
Other operating income 0.1 0.0 0.2
Change in inventories of
finished goods and work
in progress -1.2 2.1 0.2
Materials and services -34.0 -35.3 -150.8
Employee benefit costs -14.3 -12.7 -52.7
Other operating costs -11.2 -10.7 -48.2
Depreciation -1.0 -0.8 -3.5
EBITA 8.3 8.5 38.4
Amortization -1.2 -0.9 -3.8
Operating profit 7.1 7.6 34.6
Financial income
and expenses -0.5 -0.3 -2.0
Profit before taxes 6.6 7.3 32.6
Income taxes -2.1 -2.1 -8.7
Profit for period 4.5 5.2 23.9
Attributable to:
Equity holders of the parent 4.4 5.1 23.1
Minority interest 0.1 0.1 0.8
Earnings per share,
euro 0.29 0.34 1.51
Earnings per share
diluted, euro 0.29 0.34 1.51
Consolidated statement of comprehensive income, IFRS, MEUR
1-3/2009 1-3/2008 1-12/2008
Profit for the period 4,5 5,3 23,9
Other comprehensive income
Cash flow hedging 0,0 0,0 0,0
Translation difference 0,7 -0,6 0,4
Total comprehensive income 5,2 4,7 24,3
Attributable to:
Equity holders of the parent 5,0 4,5 23,5
Minority interest 0,2 0,1 0,8
Consolidated balance sheet, IFRS, MEUR
31.3.2009 31.3.2008 31.12.2008
ASSETS
Goodwill 8.5 7.6 8.3
Development costs 5.5 3.1 4.8
Intangible assets 14.7 13.0 14.9
Tangible assets 17.1 16.4 16.3
Loans receivable
and other receivables 0.2 0.2 0.2
Deferred tax assets 2.8 2.0 2.6
Other financial assets 3.5 2.2 3.3
Total non-current assets 52.2 44.5 50.3
Inventories 23.1 23.1 21.3
Trade and other receivables 60.4 52.5 61.7
Cash and cash equivalents 13.9 15.8 15.7
Total current assets 97.4 91.4 98.8
Total assets 149.6 135.9 149.1
EQUITY AND LIABILITIES
Share capital 3.1 3.1 3.1
Share premium reserve 5.0 5.0 5.0
Own shares -2.6 -1.2 -2.6
Translation difference 0.6 -1.0 -0.1
Retained earnings 73.2 50.3 68.7
Minority interest 1.3 1.0 1.4
Total equity 80.6 57.2 75.5
Deferred tax liabilities 3.6 3.1 3.5
Employee benefits 1.4 1.4 1.4
Interest-bearing liabilities 15.7 18.2 15.8
Total non-current liabilities 20.8 22.7 20.7
Trade and other payables 36.9 48.5 37.6
Income tax liabilities 1.8 3.0 1.5
Provisions 1.6 1.3 1.6
Interest-bearing liabilities 7.9 3.2 12.2
Total current liabilities 48.2 56.0 52.9
Total equity and liabilities 149.6 135.9 149.1
Q1/2008 Calculation of changes in shareholders' equity, IFRS, MEUR
Minor Total
-ity Equi-
inter- ty
est
Attributable to equity holders of the parent
Share Share Own Transla- Revalu Re- Total
capital pre- shares tion ation tained
mium differ- fund earn-
Reserve rence ings
Shareholders'
equity
31.12.2007 3.1 5.0 -1.2 -0.5 0.0 56.5 62.9 1.0 64.0
Other 0.1 0.1 0.0 0.1
changes
Net income
recorded
directly in
equity 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1
Total
Compre-
hensive
income -0.6 0.0 5.1 4.5 0.1 4.7
Income
and
expenses
recorded
during
period,
total 0.0 0.0 0.0 -0.6 0.0 5.2 4.7 0.1 4.8
Dividend -11.4 -11.4 -0.2 -11.6
paid
Shareholders'
equity
31.3.2008 3.1 5.0 -1.2 -1.0 0.0 50.3 56.1 1.0 57.2
Q1/2009 Calculation of changes in shareholders' equity, IFRS, MEUR
Mi- Total
nor- equity
ity
Attributable to equity holders of the parent -est
Share Share Own Transla Revalu Re- Total
capital pre- shares tion ation tained
Mium differ- fund earn-
Rese rence ings
erve
Share-
holders'
equity
31.12.
2008 3.1 5.0 -2.6 -0.1 0.0 68.7 74.1 1.4 75.5
Other 0.1 0.1 0.1
changes
Net
income
recorded
directly
in equity 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1
Total
Compre-
hensive
income 0.6 0.0 4.4 5.0 0.2 5.2
Income
and
expenses
recorded
during
period,
total 0.0 0.0 0.0 0.6 0.0 4.5 5.1 0.2 5.3
Dividend
paid -0.2 -0.2
Share-
holders'
equity
31.3.2009 3.1 5.0 -2.6 0.6 0.0 73.2 79.3 1.3 80.6
Consolidated cash flow statement, IFRS, MEUR
31.3.2009 31.3.2008 31.12.2008
Profit for the period 4.5 5.2 23.9
Depreciation 2.3 1.7 7.3
Financial income and expenses 0.5 0.3 2.0
Taxes 2.1 2.1 8.7
Other adjustments 0.3 0.3 0.5
Change in working capital -1.0 -3.9 -10.1
Cash flow from financial
items and tax -2.4 -1.0 -10.4
Cash flow from operating
activities 6.3 4.6 21.9
Purchase of subsidiary 0.0 -20.2 -20.4
Investments in tangible and
intangible assets -3.2 -1.0 -9.2
Proceeds from disposal of
tangible and intangible assets 0.0 0.0 -0.1
Other investments -0.1 -0.1 -1.7
Proceeds from
disposal of other investments 0.0 0.0 0.6
Cash flow from
investing activities -3.3 -21.3 -30.8
Repayment of long-term loans -0.7 -0.3 -3.9
Proceeds from
short-term borrowings 0.0 0.0 7.9
Repayment of short-term loans -4.4 -1.0 0.0
Purchase of own shares 0.0 0.0 -1.5
Financial leasing payments 0.0 0.0 0.0
Dividends paid -0.2 -0.2 -11.9
Cash flow from financial activities -5.2 -1.5 -9.4
Change in liquid funds -2.2 -18.2 -18.3
Liquid funds at start of period 15.7 34.4 34.4
Translation differences
for liquid funds 0.4 -0.5 -0.4
Liquid funds at end of period 13.9 15.8 15.7
Segment information
Vacon has one operating segment, AC drives. The figures for the
operating segment are identical with the figures for the whole Group.
Vacon's operations are organized in the following functions: Products
and Markets, Production, Research & Development, Finance and
Administration, Human Resources, IT and Process Development. To
ensure that the organisation is customer-oriented, operations are
controlled by customer segments which are: Component Customers,
Solutions Customers, OEM and Brand Label Customers, and Service and
After-Market Services.
Key indicators
31.3.2009 31.3.2008 31.12. 2008
Orders received, MEUR 69.0 78.2 306.5
Increase in orders
received, % -11.8 39.4 29.2
Revenues, MEUR 70.0 65.9 293.2
Increase in revenues, % 6.2 26.0 26.3
Operating profit, MEUR 7.1 7.6 34.6
Increase in
operating profit, % -6.6 20.6 18.5
Operating profit,
% of revenues 10.1 11.5 11.8
Earnings per share, EUR 0.29 0.34 1.51
Equity per share, EUR 5.22 3.69 4.88
Equity ratio, % 54.3 42.9 51.1
Gross capital expenditure,
(exclud. TB Woods'
acquisition) 3.4 1.3 11.2
Gross capital expenditure,
% of revenues 4.9 2.0 3.8
Interest-bearing net
liabilities, MEUR 9.7 5.7 12.3
Gearing, % 12.1 9.9 16.3
Net working capital, MEUR 42.0 21.6 41.3
Order book, MEUR 47.0 47.1 48.0
Adjusted average
number of shares
during the period 15,193,188 15,232,188 15,238,236
Number of shares
at end of period 15,193,188 15,232,188 15,193,188
Number of personnel
at end of the period 1,190 1,055 1,197
Commitments and contingencies, MEUR
31.3.2009 31.3.2008 31.12.2008
Commitments and contingencies 2.2 1.1 2.2
Financing commitments 0.4 0.9 0.6
Calculation of financial ratios
Profit for the financial period attributable
to equity holders of the parent company
Earnings per ------------------------------------------------------
share =
Adjusted average number of shares
Shareholders' equity - minority holding
Equity per -------------------------------------------------
share =
Adjusted average number of shares at year end
Equity ratio Shareholders' equity x 100
=
-------------------------------------------------
Balance sheet total - advances received
(Interest-bearing liabilities - cash, bank balances and
financial assets) x 100
Gearing = -------------------------------------------------
Shareholders' equity
Net working Inventories + non-interest-bearing current receivables -
capital =
non-interest-bearing current liabilities
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