2014-07-23 13:00:00 CEST
2014-07-23 13:01:00 CEST
REGULATED INFORMATION
Vaisala - Interim report (Q1 and Q3)
Vaisala Corporation Interim Report January-June 2014
Vaisala Corporation
Interim Report
July 23, 2014 at 2.00 p.m. (EET)
Vaisala Corporation Interim Report January-June 2014
January-June 2014 net sales and operating result decreased, order book increased
by 48%. Business outlook for 2014 net sales range narrowed.
April-June 2014 highlights
* Orders received EUR 70.6 (65.6) million, increase 8%
* Order book EUR 146.8 (99.0) million, increase 48%
* Net sales EUR 68.7 (65.2) million, increase 5%
* Gross margin 49.8% (50.8%)
* Operating result EUR 2.1 (5.1) million
* Earnings per share EUR 0.08 (0.20)
* Cash and cash equivalents EUR 25.6 (61.5) million
* Business outlook for 2014 net sales range is narrowed: Vaisala estimates its
full year 2014 net sales to be in the range of EUR 290-305 million and the
operating result (EBIT) in the range of EUR 20-30 million. Previous business
outlook for 2014 was: Vaisala estimates its full year 2014 net sales to be
in the range of EUR 290-320 million and the operating result (EBIT) in the
range of EUR 20-30 million.
January-June 2014 highlights
* Orders received EUR 139.1 (124.2) million, increase 12%
* Net sales EUR 126.2 (130.9) million, decrease 4%
* Gross margin 49.0% (49.8%)
* Operating result EUR -1.1 (10.2) million
* Earnings per share EUR -0.05 (0.36)
* Cash flow from operating activities EUR -1.5 (5.3) million
Vaisala's President and CEO Kjell Forsén comments on the second quarter"During the second quarter 2014 orders received continued to develop favorably,
8% above last year, and boosting order book to EUR 146.8 million. No single
exceptionally large orders were received but instead there was a stream of small
to midsize orders with a global spread. Europe and China continued good
development and also North American market showed signs of increased activity.
In the second quarter 2014, net sales grew with 5% and all regions showed growth
despite the negative currency effects. Towards the end of the quarter the
Controlled Environment business picked up with especially the North American
market being strong. Delivery project revenue recognition was high as several
projects were successfully finalized. Weather Business Area's net sales decrease
during the first half of 2014 was a result of weak first quarter delivery
volumes. However, the second quarter net sales increased and were 27% higher
than the first quarter.
Vaisala's operating result weakened due to the consolidation of the companies
acquired last year. Also R&D investment is increased to ensure new offering
development and renewal of existing portfolio.
We continue the implementation of our long-term strategy based on the three
strategic themes: creation of customer value, reliability, and simplification.
We are pushing for growth through regional expansion in our Controlled
Environment Business Area and first new distributor agreements have already been
signed. In Weather Business Area we are implementing the renewable energy growth
strategy. This is complemented by capabilities acquired from Second Wind and
3TIER which are integrated in to our operations in order to ensure long-term
profitability of the weather dependent renewable energy business. Our investment
in product development will bring new offering and renewed products to the
market in the future as well.
We narrow our 2014 business outlook for net sales based on the delivery schedule
of order book and soft product sales during the first half of this year. We now
estimate that our full year 2014 net sales is in the range of EUR 290-305
million and the operating result (EBIT) in the range of EUR 20-30 million."
Key Figures
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2014 2013 2014 2013 2013
------------------------------------------------------------------------------
Orders received, EUR million 70.6 65.6 139.1 124.2 282.9
Order book, EUR million 146.8 99.0 146.8 99.0 122.0
Net sales, EUR million 68.7 65.2 126.2 130.9 273.2
Gross profit, EUR million 34.2 33.1 61.8 65.1 134.3
Gross margin, % 49.8 50.8 49.0 49.8 49.2
Operating expenses, EUR million 32.5 28.0 63.2 56.6 113.6
Operating result, EUR million 2.1 5.1 -1.1 10.2 18.1
Operating result, % 3.0 7.8 -0.9 7.8 6.6
Profit (loss) before taxes, EUR million 2.2 4.7 -1.1 9.9 17.2
Profit (loss) for the period, EUR million 1.4 3.6 -0.8 6.5 10.9
Earnings per share, EUR 0.08 0.20 -0.05 0.36 0.60
Cash flow from operating activities, EUR million -1.5 5.3 28.2
Capital expenditure, EUR million 2.0 2.4 3.7 4.1 7.1
Depreciation, EUR million 3.8 3.6 7.5 7.3 14.8
Return on equity, % -1.1 7.1 6.3
Cash and cash equivalents, EUR million 25.6 61.5 45.8
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Market situation in April-June 2014
Macroeconomic environment has been improving since the first half of 2013, but
demand for industrial measurement equipment has not significantly improved.
Reasonably good weather observation market conditions continued. Strong euro
continued to impact negatively on Vaisala's financial performance.
In EMEA weather observation market conditions remained solid, although
depreciation of currencies of Russia and its neighboring countries weakened
demand in the area. Demand for industrial measurement solutions remained slow in
EMEA.
In Americas weather observation market conditions expressed signs of improvement
towards the end of the quarter after several challenging quarters, driven by the
U.S. governmental customers. Also demand for industrial measurement solutions
improved.
In APAC weather observation market remained active. Market environment for
industrial measurement solutions was static.
April-June 2014 performance
Orders received
EUR million 4-6/2014 4-6/2013 Change, % 2013
---------------------------------------------------------
Weather 52.1 46.7 12 208.3
Controlled Environment 18.4 18.9 -3 74.6
---------------------------------------------------------
Total 70.6 65.6 8 282.9
---------------------------------------------------------
Order book
EUR million 4-6/2014 4-6/2013 Change, % 2013
---------------------------------------------------------
Weather 141.7 94.1 51 116.2
Controlled Environment 5.2 4.9 7 5.8
---------------------------------------------------------
Total 146.8 99.0 48 122.0
---------------------------------------------------------
In April-June 2014, orders received were EUR 70.6 (65.6) million and increased
by 8% compared to the previous year and the growth came from North America,
Europe and China. Weather Business Area's orders received were EUR 52.1 (46.7)
million and increased by 12%. The growth came mainly from Meteorology and New
Weather Markets customer groups. Controlled Environment Business Area's orders
received were EUR 18.4 (18.9) million and decreased by 3%. The decline came from
both customer groups.
At the end of June 2014 the order book was EUR 146.8 (99.0) million and
increased by 48% compared to the previous year. The increase in order book was
due to continued good orders received of Weather Business Area since the third
quarter of 2013. Further, the order book includes EUR 17 million of orders,
which were consolidated from 3TIER Inc. and Second Wind Systems Inc., acquired
during the second half of 2013. Of the order book EUR 72.6 million will be
delivered in 2015 or later.
Net sales by business area
EUR million 4-6/2014 4-6/2013 Change, % 2013
----------------------------------------------------------
Weather 49.8 47.1 6 200.0
Controlled Environment 18.9 18.1 4 73.2
----------------------------------------------------------
Total 68.7 65.2 5 273.2
----------------------------------------------------------
Net sales by geographical area
EUR million 4-6/2014 4-6/2013 Change, % 2013
----------------------------------------------------------
EMEA 24.4 21.8 12 98.6
Americas 25.6 24.7 4 107.8
APAC 18.7 18.7 0 66.9
----------------------------------------------------------
Total 68.7 65.2 5 273.2
----------------------------------------------------------
In April-June 2014, Vaisala's net sales were EUR 68.7 (65.2) million and
increased by 5% compared to the previous year. Weather Business Area's net sales
were EUR 49.8 (47.1) million and increased by 6%. The growth came mainly from
Meteorology and New Weather Markets customer groups. Weather Business Area
improved its net sales in project and services business. Controlled Environment
Business Area's net sales were EUR 18.9 (18.1) million and increased by 4%. The
growth came from both customer groups. Controlled Environment Business Area
improved its net sales in Americas and EMEA.
In April-June 2014, net sales in EMEA was EUR 24.4 (21.8) million and increased
by 12% compared to the previous year, in the Americas EUR 25.6 (24.7) millionand increased by 4% and in APAC EUR 18.7 (18.7) million and was at previous
year's level.
At comparable exchange rates the net sales would have been EUR 71.0 (65.2)
million and increase would have been EUR 5.8 million or 9% from previous year.
The negative exchange rate effect was EUR 2.3 million, which was mainly due to
changes in USD, AUD and JPY exchange rates.
Gross margin was 49.8% (50.8%). The decrease was mainly due to less favorable
sales mix and foreign exchange rates.
Operating result
EUR million 4-6/2014 4-6/2013 Change, % 2013
--------------------------------------------------------
Weather 0.8 3.2 -76 14.5
Controlled Environment 1.5 2.2 -28 4.0
Eliminations and other -0.3 -0.3 11 -0.4
--------------------------------------------------------
Total 2.1 5.1 -59 18.1
--------------------------------------------------------
In April-June 2014, operating result was EUR 2.1 (5.1) million. The decrease was
mainly due to increase in operating expenses. Operating expenses were EUR 32.5
(28.0) million and increased by 16% compared to the previous year. The increase
was mainly due to the consolidation of operating expenditures of 3TIER Inc. and
Second Wind Systems Inc. which were acquired during the second half of 2013 as
well as investments in R&D related to new offering development and renewing
instrument portfolio.
Profit (loss) before taxes was EUR 2.2 (4.7) million for the period of April-
June 2014. Income taxes were EUR -0.8 (-1.1) million. Net result was EUR 1.4
(3.6) million.
Earnings per share for April-June 2014 were EUR 0.08 (0.20).
January-June 2014 performance
Orders received
EUR million 1-6/2014 1-6/2013 Change, % 2013
---------------------------------------------------------
Weather 102.5 87.6 17 208.3
Controlled Environment 36.6 36.7 0 74.6
---------------------------------------------------------
Total 139.1 124.2 12 282.9
---------------------------------------------------------
Order book
EUR million 1-6/2014 1-6/2013 Change, % 2013
---------------------------------------------------------
Weather 141.7 94.1 51 116.2
Controlled Environment 5.2 4.9 7 5.8
---------------------------------------------------------
Total 146.8 99.0 48 122.0
---------------------------------------------------------
In January-June 2014, orders received were EUR 139.1 (124.2) million and
increased by 12% compared to the previous year. The growth came mainly from
Europe. Weather Business Area's orders received were EUR 102.5 (87.6) million
and increased by 17%. The growth came from all other customer groups except
Airports. Controlled Environment Business Area's orders received were EUR 36.6
(36.7) million and stayed at previous year's level.
At the end of June 2014 the order book was EUR 146.8 (99.0) million and
increased by 48% compared to the previous year. The increase in order book was
due to continued good orders received of Weather Business Area since the third
quarter of 2013. Further, the order book includes EUR 17 million of orders,
which were consolidated from 3TIER Inc. and Second Wind Systems Inc., acquired
during the second half of 2013. Of the order book EUR 72.6 million will be
delivered in 2015 or later.
Net sales by business area
EUR million 1-6/2014 1-6/2013 Change, % 2013
----------------------------------------------------------
Weather 89.0 94.7 -6 200.0
Controlled Environment 37.2 36.2 3 73.2
----------------------------------------------------------
Total 126.2 130.9 -4 273.2
----------------------------------------------------------
Net sales by geographical area
EUR million 1-6/2014 1-6/2013 Change, % 2013
----------------------------------------------------------
EMEA 46.5 47.1 -1 98.6
Americas 47.5 48.7 -2 107.8
APAC 32.2 35.0 -8 66.9
----------------------------------------------------------
Total 126.2 130.9 -4 273.2
----------------------------------------------------------
In January-June 2014, Vaisala's net sales was EUR 126.2 (130.9) million and
decreased by 4% compared to the previous year. Weather Business Area's net sales
were EUR 89.0 (94.7) million and decreased by 6%. The decline came from all
customer groups except New Weather Markets. Weather Business Area's net sales
decrease during the first half of 2014 was result of weak first quarter delivery
volumes. However, the second quarter net sales increased and were 27% higher
than the first quarter. Controlled Environment Business Area's net sales were
EUR 37.2 (36.2) million and increased by 3%. The growth came from both customer
groups.
In January-June 2014, net sales in EMEA was EUR 46.5 (47.1) million and
decreased by 1% compared to the previous year, in the Americas EUR 47.5 (48.7)
million and decreased by 2% and in APAC EUR 32.2 (35.0) million and decreased by
8%.
At comparable exchange rates the net sales would have been EUR 129.9 (130.9)
million and decrease would have been EUR 1.0 million or 1% from previous year.
The negative exchange rate effect was EUR 3.7 million, which was mainly due to
changes in USD, JPY and AUD exchange rates.
Operations outside Finland accounted for 98% (97%) of net sales.
Gross margin was 49.0% (49.8%). The decline in gross margin was mainly caused by
decreased net sales of Weather Business Area and related increase in unit costs
due to weaker scale economies.
Operating result
EUR million 1-6/2014 1-6/2013 Change, % 2013
--------------------------------------------------------
Weather -4.0 5.2 - 14.5
Controlled Environment 3.7 3.9 -6 4.0
Eliminations and other -0.8 1.0 - -0.4
--------------------------------------------------------
Total -1.1 10.2 - 18.1
--------------------------------------------------------
In January-June 2014, operating result was EUR -1.1 (10.2) million. The decrease
was mainly due to increase in operating expenses and decreased net sales of
Weather Business Area. Operating expenses were EUR 63.2 (56.6) million and
increased by 12% compared to the previous year. The increase was mainly due to
the consolidation of operating expenditures of 3TIER Inc. and Second Wind
Systems Inc. which were acquired during the second half of 2013 as well as
investments in R&D related to new offering development and renewing instrument
portfolio.
Profit (loss) before taxes was EUR -1.1 (9.9) million for the period of January-
June 2014. Income taxes were EUR +0.3 (-3.4) million. Net result was EUR -0.8
(6.5) million.
Earnings per share for January-June 2014 were EUR -0.05 (0.36).
Statement of financial position and cash flow
Vaisala's financial position remained strong at the end of the June 2014. Cash
and cash equivalents amounted to EUR 25.6 (61.5) million at the end of June
2014 and Vaisala did not have any material interest bearing liabilities.
The statement of financial position total was EUR 213.6 (234.1) million. The
solvency ratio at the end of the June 2014 was 68% (78%), the decrease was
mainly caused by capital return of EUR 22.2 million in August 2013.
In January-June 2014, Vaisala's cash flow from operating activities was EUR -1.5
(5.3) million. The decrease was mainly due to lower business profitability.
Capital expenditure and divestments
Gross capital expenditure totaled EUR 3.7 (4.1) million for January-June 2014.
Depreciation was EUR 7.5 (7.3) million.
Weather Business Area
EUR million 4-6/2014 4-6/2013 Change, % 1-6/2014 1-6/2013 Change, % 2013
-------------------------------------------------------------------------------
Orders received 52.1 46.7 12 102.5 87.6 17 208.3
Order book 141.7 94.1 51 141.7 94.1 51 116.2
Net sales, total 49.8 47.1 6 89.0 94.7 -6 200.0
Products 22.7 25.5 -11 41.7 49.6 -16 97.3
Projects 19.0 14.6 30 30.0 30.1 0 70.0
Services 8.2 7.0 17 17.3 14.9 16 32.7
Operating result 0.8 3.2 -76 -4.0 5.2 - 14.5
-------------------------------------------------------------------------------
In January-June 2014, orders received were EUR 102.5 (87.6) million and
increased by 17% compared to the previous year. Orders increased in all other
customer groups except in Airports. At the end of June 2014 the order book was
EUR 141.7 (94.1) million and increased by 51% compared to the previous year. The
increase in order book was due to continued good orders received since the third
quarter of 2013. Further, the order book includes EUR 17 million of orders,
which were consolidated from 3TIER Inc. and Second Wind Systems Inc., acquired
during the second half of 2013. Of the order book EUR 72.1 million will be
delivered in 2015 or later.
In January-June 2014, Weather Business Area's net sales was EUR 89.0 (94.7)
million and decreased by 6% compared to the previous year. Net sales decreased
in all customer groups except in New Weather Markets. Weather Business Area's
net sales decrease during the first half of 2014 was result of weak first
quarter delivery volumes. However, the second quarter net sales increased and
were 27% higher than the first quarter. At comparable exchange rates the net
sales would have been EUR 91.0 (94.7) million and decrease would have been EUR
3.7 million or 4% from previous year. The negative exchange rate effect was EUR
2.0 million, which was mainly due to changes in USD and AUD exchange rates.
In January-June 2014, Weather Business Area's operating result was EUR -4.0
(5.2) million. The decline was mainly due to increased operating expenses and
decreased net sales. The increase in operating expenses was mainly due to the
consolidation of operating expenditures of 3TIER Inc. and Second Wind Systems
Inc. which were acquired during the second half of 2013 as well as investments
in R&D related to new offering development and renewing instrument portfolio.
Controlled Environment Business Area
EUR million 4-6/2014 4-6/2013 Change, % 1-6/2014 1-6/2013 Change, % 2013
------------------------------------------------------------------------------
Orders received 18.4 18.9 -3 36.6 36.7 0 74.6
Order book 5.2 4.9 7 5.2 4.9 7 5.8
Net sales, total 18.9 18.1 4 37.2 36.2 3 73.2
Products 16.5 15.8 4 32.7 31.8 3 64.2
Services 2.4 2.2 6 4.5 4.4 2 9.0
Operating result 1.5 2.2 -28 3.7 3.9 -6 4.0
------------------------------------------------------------------------------
In January-June 2014, orders received were EUR 36.6 (36.7) million and were at
previous year's level. Orders received increased in Targeted Industrial
Applications customer group. At the end of June 2014 the order book was EUR 5.2
(4.9) million and increased by 7% compared to the previous year. Of the order
book EUR 0.6 million will be delivered in 2015 or later.
In January-June 2014, Controlled Environment Business Area's net sales was EUR
37.2 (36.2) million and increased by 3% compared to the previous year. Net sales
increased in both customer groups. In EMEA and Americas net sales increased from
previous year. In APAC net sales decreased. At comparable exchange rates the net
sales would have been EUR 38.9 (36.2) million and increase would have been EUR
2.7 million or 8% from previous year. The negative exchange rate effect was EUR
1.7 million, which was mainly caused by USD and JPY exchange rate fluctuations.
In January-June 2014, Controlled Environment Business Area's operating result
was EUR 3.7 (3.9) million and decreased by 6% compared to the previous year.
This was mainly due to increased operating expenses. The increase in operating
expenses was mainly due to investments in R&D related to new offering
development.
Research and Development
In January-June 2014, research and development expenses totaled EUR 17.0 (14.7)
million, representing 13.5% (11.2%) of net sales. The increase was mainly due to
R&D expenses of the acquired companies.
4-6/ 4-6/ Change, 1-6/ 1-6/ Change,
EUR million 2014 2013 % 2014 2013 % 2013
----------------------------------------------------------------
Weather 6.4 5.4 19 12.6 11.4 10 22.4
Controlled Environment 2.3 1.6 42 4.4 3.2 36 6.5
----------------------------------------------------------------
Total 8.7 7.0 24 17.0 14.7 16 28.9
----------------------------------------------------------------
Weather Business Area R&D expenses were 14.1% (12.1%) of net sales. Controlled
Environment Business Area R&D expenses were 11.9% (9.0%) of net sales.
In the second quarter 2014, Vaisala launched an entirely new Road Weather
Station, RWS200. Combined with software, this new station is able to offer an
enhanced Road Weather Information System called iRWIS. The system consists of
intelligent roadside hardware, sophisticated decision support software and
improved measurement reliability.
Information about new product and software releases can be found at
www.vaisala.com/press.
Personnel
The average number of personnel employed in Vaisala during January-June 2014 was
1,607 (1,457). The number of employees at the end of June 2014 was 1,659 (1,502)
and it includes 53 summer trainees. At the end of 2013, the number of employees
was 1,563.
At the end of June 2014, 42% (40%) of the personnel was based outside Finland.
Vaisala 2014-2018 strategy and long-term financial targets
Vaisala's Board of Directors confirmed the 2014-2018 strategy in May 12 2014.
Vaisala's goal of profitable growth will be achieved through the implementation
of the strategic themes: creation of customer value, reliability, and
simplification.
In Weather Business Area additional customer value will be created by building
new business around decision support services that are offered to renewable
energy, aviation and roads customers. Controlled Environment Business Area will
focus on enhancing offering and developing the sales channel for life science
and industrial customers in order to create value for customers' operations.
Reliability will create customer satisfaction and loyalty. High quality of
products and services, well-functioning customer service and on-time actions
will deliver reliable customer experience.
Simplification will create operational efficiency. Optimized global networks,
streamlined supply chains, common capabilities and continual improvement in all
functions will ensure increased efficiency of Vaisala's operations.
Vaisala's long-term financial targets
Growth: Vaisala targets an average annual growth of 5%. In selected growth
businesses such as renewable energy and life science the target is to exceed
10% annual growth.
Profitability: Vaisala's objective is profitable growth and the target is to
achieve 15% operating profit (EBIT) margin towards the end of the period.
Vaisala does not consider the long-term financial targets as market guidance for
any given year.
Near-term risks and uncertainties
Vaisala's business is exposed to changes in the global economy, politics,
policies, regulations, Vaisala's supply chain, and accidents as well as natural
disasters, which may affect business e.g. through order cancellations,
disturbance in logistics, and loss of market potential. Vaisala's capability to
successfully complete investments, acquisitions, divestments and restructurings
on a timely basis and to achieve related financial and operational targets
represent a risk which may impact revenue and profitability.
The most significant near term risks and uncertainties that may affect both
revenue and profitability relate to the company's ability to maintain its
delivery capability, availability of critical components, interruptions in
manufacturing and associated IT systems, changes in the global economy, expanded
western sanctions against Russia, currency exchange rates, customers' financing
capability, changes in customers' purchasing or investment behavior, and delays
or cancellations of orders. Changes in the competition may affect the volume and
profitability of business through introduction of new competitors and price
erosion in areas which traditionally have been strong for Vaisala. Changes in
subcontractor relations, their operations or operating environment as well as
the quality of the deliverables may have a negative impact on Vaisala's
business.
A significant part of Vaisala's business is project business. Project business
performance and schedules have dependencies to third parties, which may impact
profitability and the timing of revenue recognition. Assumptions regarding new
project and service business opportunities constitute a risk for both revenue
and profitability.
Further information about risk management in Vaisala is available on the company
website at http://www.vaisala.com/investors, Corporate Governance.
Decisions by Vaisala Corporation's Annual General Meeting
Annual General Meeting was held on Wednesday, March 26, 2014 at Vaisala's head
office in Finland. The meeting approved the financial statements and discharged
the members of the Board of Directors and the President and CEO from liability
for the financial period January 1-December 31, 2013.
Dividend
The Annual General Meeting decided a dividend of EUR 0.90 per share,
corresponding to the total of EUR 16,253,292.60. The record date for the
dividend payment was March 31, 2014 and the payment date was April 7, 2014.
Remuneration of the members of the Board of Directors
The Annual General Meeting decided that the annual fee payable to the Board
members for the term until the close of the Annual General Meeting in 2015 is:
the Chairman of the Board of Directors EUR 45,000 and each Board member EUR
35,000. Approximately 40 percent of the annual remuneration will be paid in
Vaisala Corporation's A shares acquired from the market and the rest in cash.
In addition, the Annual General Meeting decided that the compensation per
attended meeting for the Chairman of the Audit Committee is EUR 1,500 and EUR
1,000 for each member of the Audit Committee for the term until the close of the
Annual General Meeting in 2015. The compensation per attended meeting for the
Chairman and each member of the Remuneration and HR Committee and any other
committee established by the Board of Directors is EUR 1,000 for the term until
the close of the Annual General Meeting in 2015.
Composition of the Board of Directors
The Annual General Meeting confirmed that the number of Board members is seven.
Mikko Niinivaara and Raimo Voipio were re-elected for the term until the close
of the Annual General Meeting in 2017. Petra Lundström and Pertti Torstila were
elected as new members of the Board of Directors. Due to stipulations of the
Articles of Association concerning the term of the members of the Board of
Directors Petra Lundström was elected for the term until the close of the Annual
General Meeting in 2015. Pertti Torstila was elected for the term until the
close of the Annual General Meeting in 2017.
Auditor and their remuneration
The Annual General Meeting elected Deloitte & Touche Oy, Authorized Public
Accountants, as auditor of the Company until the close of the Annual General
Meeting in 2015. Deloitte & Touche Oy has informed that APA Merja Itäniemi will
act as the auditor with the principal responsibility. The Auditor's fee is paid
according to their reasonable invoice presented to the company.
Authorization for directed acquisition of own A shares
The Annual General Meeting authorized the Board of Directors to decide on the
directed acquisition of a maximum of 160,000 of the Company's own A shares in
one or more instalments with funds belonging to the Company's unrestricted
equity. The new authorization replaces the previous one and is valid until the
closing of the Annual General Meeting in 2015, however, no longer than September
26, 2015.
Authorization to transfer Company's own shares
The Annual General Meeting authorized the Board of Directors to decide on the
transfer of a maximum of 319,150 own A-shares. The transfer of own shares may be
carried out in deviation from the shareholders' pre-emptive rights and may be
transferred as a directed issue without payment as part of the Company's share
based incentive plan. The authorization can also be used to grant special rights
entitling subscription of own shares, and the subscription price of the shares
can instead of cash also be paid in full or in part as contribution in kind. The
new authorization replaces the previous one and is valid until March 26, 2019.
Donations
The Annual General Meeting authorized the Board of Directors to decide on
donations of maximum EUR 250,000. The authorization is valid until the close of
the Annual General Meeting in 2015.
The organizing meeting of the Board of Directors
At its organizing meeting held after the Annual General Meeting the Board
elected Raimo Voipio to continue as the Chairman of the Board of Directors and
Yrjö Neuvo to continue as the Vice Chairman.
The composition of the Board committees was decided to be as follows:
Audit Committee
Maija Torkko was elected as the Chairman and Petra Lundström and Mikko
Niinivaara as members of the Audit Committee. The Chairman and all members of
the Audit Committee are independent both of the Company and of significant
shareholders.
Remuneration and Human Resources Committee
Raimo Voipio was elected as the Chairman and Yrjö Neuvo and Maija Torkko as
members of the Remuneration and Human Resources Committee. Raimo Voipio is
independent of the Company. Yrjö Neuvo and Maija Torkko are independent both of
the Company and of significant shareholders.
Vaisala's shares
In January-June 2014, a total number of 621,649 (1,741,812) Vaisala A shares
with a value totaling EUR 14.5 (34.2) million were traded on the NASDAQ OMX
Helsinki Ltd. On June 30, 2014 the closing price was EUR 23.95 (19.77). The
highest quotation during January-June 2014 was EUR 24.98 (22.13) and the lowest
EUR 21.06 (16.04).
On June 30, 2014, Vaisala had 18,218,364 shares, of which 3,389,351 are series
K-shares and 14,829,013 are series A-shares. The shares have no counter book
value. The K-shares and A-shares are differentiated by the fact that each K-
share entitles its owner to 20 votes at a General Meeting of Shareholders while
each A share entitles its owner to 1 vote. The A-shares represent 81.4% of the
total number of shares and 17.9% of the total votes. The K-shares represent
18.6% of the total number of shares and 82.1% of the total votes.
The market value of Vaisala's A-shares on June 30, 2014 was EUR 351.3 (290.0)
million, excluding the Company's treasury shares. Valuing the K-shares - which
are not traded on the stock market - at the rate of the A-share's closing price
on the last day of June, the total market value of all the A- and K-shares
together was EUR 432.5 (357.0) million, excluding the Company's treasury shares.
More information about Vaisala's share and shareholders are presented on the
website, www.vaisala.com/investors.
Treasury shares and parent company shares
At the end of June 2014, the Company held a total of 159,150 (159,150) Vaisala
A-shares, which represented 0.9% (0.9%) of the share capital and 0.2% (0.2%) of
the votes. The consideration paid for these shares was EUR 2,527,160
(2,527,160).
Market outlook
Vaisala expects that decent macroeconomic conditions, customers' activity and
good order book indicate increasing weather observation and industrial
measurement solutions market. However, outlook still varies significantly
between customer groups and geographical areas and overall expectations do not
refer to significant upturn. Within reviving weather observations markets it
remains challenging to forecast customers' timing for decision making and
acceptance of larger customer projects, having potentially material impact to
overall Vaisala weather business.
In EMEA demand for weather observation solutions is expected to remain solid.
Enquiries from industrial measurement customers have showed a slightly positive
trend, but European economic conditions do not indicate significant improvement
in market conditions.
In Americas market outlook for weather observation and industrial measurement
solutions has been improving, supported by the U.S. governmental and industrial
customers.
Weather observation market in APAC is expected to remain active. Market outlook
for industrial measurement solutions in APAC is expected to be stable.
Business outlook for 2014
Business outlook for 2014 net sales range is narrowed: Vaisala estimates its
full year 2014 net sales to be in the range of EUR 290-305 million and the
operating result (EBIT) in the range of EUR 20-30 million.
Previous business outlook from February 10, 2014
Vaisala estimates its full year 2014 net sales to be in the range of EUR
290-320 million and the operating result (EBIT) in the range of EUR 20-30
million.
Vantaa, July 23, 2014
Vaisala Corporation
Board of Directors
The forward-looking statements in this release are based on the current
expectations, known factors, decisions and plans of Vaisala's management.
Although the management believes that the expectations reflected in these
forward-looking statements are reasonable, there is no assurance that these
expectations would prove to be correct. Therefore, the results could differ
materially from those implied in the forward-looking statements, due to for
example changes in the economic, market and competitive environments, regulatory
or other government-related changes, or shifts in exchange rates.
Financial information and changes in accounting policies
This interim financial report has been prepared in accordance with IAS 34,
Interim Financial Reporting, following the same accounting policies and
principles as in the annual financial statements for 2013. All figures in the
interim report are Group figures. All presented figures have been rounded and
consequently the sum of individual figures may deviate from the sum presented.
The preparation of the financial statements in accordance with IFRS requires
Vaisala's management to make estimates and assumptions that affect the valuation
of the reported assets and liabilities and the recognition of income and
expenses in the statement of income. Although the estimates are based on the
management's best knowledge at the date of the interim report, actual results
may differ from the estimates.
The interim financial report is unaudited.
Consolidated Statement of Income
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
EUR million 2014 2013 2014 2013 2013
----------------------------------------------------------------------------
Net sales 68.7 65.2 126.2 130.9 273.2
Costs of sales -34.5 -32.1 -64.3 -65.7 -138.9
----------------------------------------------------------------------------
Gross profit 34.2 33.1 61.8 65.1 134.3
Sales, marketing and administrative costs -23.7 -21.0 -46.3 -41.9 -84.7
Research and development costs -8.7 -7.0 -17.0 -14.7 -28.9
Other operating income and expense 0.3 0.0 0.3 1.6 -2.6
----------------------------------------------------------------------------
Operating profit (loss) 2.1 5.1 -1.1 10.2 18.1
Share of result in associated companies - - - - 0.1
Financial income and expenses, net 0.2 -0.4 0.0 -0.2 -1.0
----------------------------------------------------------------------------
Profit (loss) before taxes 2.2 4.7 -1.1 9.9 17.2
Income taxes -0.8 -1.1 0.3 -3.4 -6.2
----------------------------------------------------------------------------
Profit (loss) for the period 1.4 3.6 -0.8 6.5 10.9
Earnings per share, EUR 0.08 0.20 -0.05 0.36 0.60
Diluted earnings per share, EUR 0.08 0.20 -0.05 0.36 0.60
----------------------------------------------------------------------------
Consolidated Statement of Comprehensive Income
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
EUR million 2014 2013 2014 2013 2013
-------------------------------------------------------------------------------
Items that will not be reclassified to profit or
loss
Actuarial loss on post-employment benefits 0.0 0.0 0.0 0.0 -0.1
-------------------------------------------------------------------------------
Total 0.0 0.0 0.0 0.0 -0.1
-------------------------------------------------------------------------------
Items that may be reclassified subsequently to
profit or loss
Currency translation differences 0.5 -1.7 0.5 -1.0 -3.2
-------------------------------------------------------------------------------
Total 0.5 -1.7 0.5 -1.0 -3.2
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total other comprehensive income 0.5 -1.7 0.5 -1.0 -3.3
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total comprehensive income 1.9 1.8 -0.4 5.5 7.6
-------------------------------------------------------------------------------
Consolidated Statement of Financial Position
EUR million
---------------------------------------------------------------------
June 30, June 30, December 31,
Assets 2014 2013 2013
---------------------------------------------------------------------
Non-current assets
Intangible assets 36.5 29.8 35.9
Property, plant and equipment 45.0 48.6 46.8
Investments 0.1 0.1 0.1
Investment in associated companies 0.7 0.7 0.7
Long-term receivables 0.3 1.0 0.9
Deferred tax assets 9.2 5.5 8.0
---------------------------------------------------------------------
Total non-current assets 91.7 85.6 92.5
Current assets
Inventories 34.9 30.8 28.6
Trade and other receivables 59.2 55.0 57.4
Income tax receivables 2.2 1.3 1.4
Cash and cash equivalents 25.6 61.5 45.8
---------------------------------------------------------------------
Total current assets 121.9 148.5 133.2
---------------------------------------------------------------------
Total assets 213.6 234.1 225.6
---------------------------------------------------------------------
June 30, June 30, December 31,
Shareholders' equity and liabilities 2014 2013 2013
-------------------------------------------------------------------------------
Shareholders' equity
Share capital 7.7 7.7 7.7
Share premium - 22.3 -
Other reserves 1.9 1.3 1.5
Cumulative translation adjustment -3.2 -1.4 -3.6
Treasury shares -2.5 -2.5 -2.5
Retained earnings 138.8 151.8 155.9
-------------------------------------------------------------------------------
Total shareholders' equity 142.6 179.0 158.9
Non-current liabilities
Interest-bearing liabilities 0.0 0.2 0.0
Post-employment benefit obligations 0.7 0.4 0.7
Deferred tax liabilities 5.0 0.4 5.2
Provisions for other liabilities and charges - 0.1 -
Other long-term liabilities 3.0 2.1 2.1
-------------------------------------------------------------------------------
Total non-current liabilities 8.7 3.3 8.0
Current liabilities
Interest-bearing liabilities 0.0 0.2 0.0
Advances received 4.1 3.2 3.7
Income tax liabilities 0.1 1.4 0.3
Provisions for other liabilities and charges - 0.1 -
Trade and other payables 58.0 46.9 54.8
-------------------------------------------------------------------------------
Total current liabilities 62.2 51.8 58.7
-------------------------------------------------------------------------------
Total shareholders' equity and liabilities 213.6 234.1 225.6
-------------------------------------------------------------------------------
Consolidated Statement of Changes in Shareholders' Equity
Share Share Other Treasury Translation Retained
EUR million capital premium reserves shares adjustment earnings Total
-------------------------------------------------------------------------------
Balance at
Jan 1, 2013 7.7 22.3 0.7 -2.5 -0.5 161.4 189.2
Profit (loss) for
the
period 6.5 6.5
Other
comprehensive
income -1.0 -1.0
Dividend paid -16.2 -16.2
Share-based
payment 0.5 0.5
-------------------------------------------------------------------------------
Balance at
June 30, 2013 7.7 22.3 1.3 -2.5 -1.4 151.8 179.0
-------------------------------------------------------------------------------
Share Other Treasury Translation Retained
EUR million capital reserves shares adjustment earnings Total
-----------------------------------------------------------------------------
Balance at
Jan 1, 2014 7.7 1.5 -2.5 -3.6 155.9 158.9
Profit (loss) for the
period -0.8 -0.8
Other comprehensive
income 0.0 0.5 0.5
Dividend paid -16.3 -16.3
Share-based payment 0.4 0.4
-----------------------------------------------------------------------------
Balance at
June 30, 2014 7.7 1.9 -2.5 -3.2 138.8 142.6
-----------------------------------------------------------------------------
Consolidated Cash Flow Statement
1-6/ 1-6/ 1-12/
EUR million 2014 2013 2013
-------------------------------------------------------------------------------
Cash flows from operating activities
Cash receipts from customers 134.7 138.6 282.8
Other income from business operations 0.3 0.1 0.2
Cash paid to suppliers and employees -134.7 -129.3 -246.3
Financials paid, net 0.2 -0.1 -0.8
Income taxes paid, net -2.1 -4.1 -7.7
-------------------------------------------------------------------------------
Cash flow from operating activities -1.5 5.3 28.2
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired - - -12.3
Capital expenditure on fixed assets -3.7 -4.1 -7.1
Divestments 1.0 2.5 2.6
-------------------------------------------------------------------------------
Cash flow from investing activities -2.6 -1.6 -16.8
Cash flows from financing activities
Return of capital - - -22.2
Dividends paid -16.2 -16.2 -16.2
Change in loan receivables 0.1 0.0 -0.1
Change in leasing liabilities 0.0 0.0 -0.6
-------------------------------------------------------------------------------
Cash flow from financing activities -16.2 -16.2 -39.1
Cash and cash equivalents at the beginning of period 45.8 74.8 74.8
Net increase (+) / decrease (-) in cash and cash
equivalents -20.3 -12.5 -27.7
Effect from changes in exchange rates 0.1 -0.8 -1.3
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of period 25.6 61.5 45.8
-------------------------------------------------------------------------------
Notes for Interim Report
Orders Received by Business Area
EUR million 4-6/2014 4-6/2013 1-6/2014 1-6/2013 1-12/2013
-----------------------------------------------------------------------------
Weather 52.1 46.7 102.5 87.6 208.3
Controlled Environment 18.4 18.9 36.6 36.7 74.6
-----------------------------------------------------------------------------
Total 70.6 65.6 139.1 124.2 282.9
-----------------------------------------------------------------------------
Net Sales by Business Area
EUR million 4-6/2014 4-6/2013 1-6/2014 1-6/2013 1-12/2013
-----------------------------------------------------------------------------
Weather
Products 22.7 25.5 41.7 49.6 97.3
Projects 19.0 14.6 30.0 30.1 70.0
Services 8.2 7.0 17.3 14.9 32.7
-----------------------------------------------------------------------------
Total 49.8 47.1 89.0 94.7 200.0
Controlled Environment
Products 16.5 15.8 32.7 31.8 64.2
Services 2.4 2.2 4.5 4.4 9.0
-----------------------------------------------------------------------------
Total 18.9 18.1 37.2 36.2 73.2
Sales, eliminations and others 0.0 0.0 0.0 0.0 0.1
-----------------------------------------------------------------------------
Total Sales 68.7 65.2 126.2 130.9 273.2
-----------------------------------------------------------------------------
Operating Result by Business Area
EUR million 4-6/2014 4-6/2013 1-6/2014 1-6/2013 1-12/2013
-----------------------------------------------------------------------------
Weather 0.8 3.2 -4.0 5.2 14.5
Controlled Environment 1.5 2.2 3.7 3.9 4.0
Eliminations and other -0.3 -0.3 -0.8 1.0 -0.4
-----------------------------------------------------------------------------
Total 2.1 5.1 -1.1 10.2 18.1
-----------------------------------------------------------------------------
Net Sales by Geographical Area
EUR million 4-6/2014 4-6/2013 1-6/2014 1-6/2013 1-12/2013
-----------------------------------------------------------------------------
EMEA 24.4 21.8 46.5 47.1 98.6
Americas 25.6 24.7 47.5 48.7 107.8
APAC 18.7 18.7 32.2 35.0 66.9
-----------------------------------------------------------------------------
Total 68.7 65.2 126.2 130.9 273.2
-----------------------------------------------------------------------------
Personnel
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2014 2013 2014 2013 2013
-------------------------------------------------------------
Average personnel 1,631 1,470 1,607 1,457 1,485
Personnel at the end of period 1,659 1,502 1,659 1,502 1,563
-------------------------------------------------------------
Financial Instruments
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2014 2013 2014 2013 2013
-------------------------------------------------------------------------------
Nominal value of financial derivatives, EUR million 19.2 20.3 19.2 20.3 19.7
Fair values of financial derivatives, assets, EUR
million 0.0 0.2 0.0 0.2 0.6
Fair values of financial derivatives, liabilities,
EUR million 0.2 0.1 0.2 0.1 0.0
-------------------------------------------------------------------------------
Financial derivatives consist solely of foreign currency forwards and they are
measured based on price information derived from active markets and commonly
used valuation methods (Fair value hierarchy 2). Financial contracts are
executed only with counterparties that have high credit ratings.
Share Information
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2014 2013 2014 2013 2013
-------------------------------------------------------------------------------
Number of shares outstanding, thousand 18,059 18,059 18,059 18,059 18,059
Number of treasury shares, thousand 159 159 159 159 159
Number of shares, diluted, thousand 18,253 18,209 18,253 18,209 18,187
Number of shares, weighted average,
thousand 18,059 18,059 18,059 18,059 18,059
Number of shares traded, thousand 197 503 622 1,742 2,877
Share price, highest, EUR 24.98 22.13 24.98 22.13 23.47
Share price, lowest, EUR 21.26 18.22 21.06 16.04 16.04
-------------------------------------------------------------------------------
Key Ratios
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2014 2013 2014 2013 2013
-------------------------------------------------------------------------------
Earnings per share, EUR 0.08 0.20 -0.05 0.36 0.60
Earnings per share, diluted, EUR 0.08 0.20 -0.05 0.36 0.60
Equity per share, EUR 7.90 9.91 7.90 9.91 8.80
Cash flow from operating activities per
share, EUR -0.08 0.29 1.55
Solvency ratio, % 68.1 77.5 68.1 77.5 71.6
Return on equity, % -1.1 7.1 6.3
-------------------------------------------------------------------------------
Further information
Kaarina Muurinen, CFO
Mobile +358 40 577 5066
Vaisala Corporation
Briefing and Audiocast
Briefing for analysts and media will be arranged in Hotel Kämp, Paavo Nurmi
meeting room, Pohjoisesplanadi 29, Helsinki starting at 4 p.m. (EEST) today. The
presentation of Kjell Forsén, President and CEO, at the briefing will be
audiocast live at www.vaisala.com/investors starting at 4 p.m. A recording of
the audiocast will be published at the same address at 6 p.m.
January-September 2014 Interim Report
Vaisala will publish its January-September 2014 Interim Report on October
22, 2014 at approximately 2:00 p.m. Finnish time.
Distribution:
NASDAQ OMX Helsinki
Key media
www.vaisala.com
Vaisala is a global leader in environmental and industrial measurement. Building
on 78 years of experience, Vaisala contributes to a better quality of life by
providing a comprehensive range of innovative observation and measurement
products and services for chosen weather-related and industrial markets.
Headquartered in Finland, Vaisala employs approximately 1,500 professionals
worldwide and is listed on the NASDAQ OMX Helsinki stock exchange.
www.vaisala.com www.twitter.com/VaisalaGroup
[HUG#1835031]
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