2008-04-25 07:30:00 CEST
2008-04-25 07:30:01 CEST
REGULATED INFORMATION
Scanfil - Interim report (Q1 and Q3)
SCANFIL PLC'C INTERIM REPORT 1 JANUARY - 31 MARCH 2008
SCANFIL PLC INTERIM REPORT 25 APRIL 2008 8.30 a.m.
SCANFIL PLC'C INTERIM REPORT 1 JANUARY - 31 MARCH 2008
- Turnover for the first quarter of 2008 totalled EUR 50.0 million
(52.2 in the corresponding period 2007)
- Operating profit was EUR 4.7 (3.6) million, which is 9.5 (6.8) % of
turnover.
- Profit for the review period was EUR 3.6 (3.1) million
- Earnings per share were EUR 0.06 (0.05)
DEVELOPMENT OF OPERATIONS
Scanfil plc President Harri Takanen:
”Sales are off to a satisfactory start in 2008. Maintaining profitability is a
sign of effectiveness of operations and personnel and provides Scanfil with good
opportunities for competing successfully in the markets also in the future. The
strategic decisions made by the Annual General Meeting and the Board of
Directors together with the ability to operate profitably support the further
development of our operations and the enhancement of our market position.”
The positive development in the operating environment of our industrial
electronics customers has continued in the first quarter. The global
environmental concerns, rising energy prices and urbanisation have a positive
effect on the markets of Scanfil's industrial electronics customers. The sales
and production amounts of industrial electronics products have been good during
the review period. Scanfil has focused on industrial electronics to even out the
distribution of sales and is actively exploring new opportunities for increasing
the sales of industrial electronics products.
The total demand from telecommunications customers has been lower than during
the corresponding period last year. This is mainly due to product structure
changes implemented by one of the customers. These changes in particular have
affected the sales of the Chinese units. Telecom customers accounted for
approximately 63 (70)% and industrial electronics customers for approximately 37
(30)% of the review period's turnover.
The Chinese subsidiaries' sales accounted for 32% of the Group's sales during
the review period (34% in the corresponding period in 2007) including deliveries
to the Group's other plants. Of the Group's personnel, 53 (49)% worked in China
at the end of 2007, and a total of 74 (71)% worked in the international
subsidiaries on 31 March 2008.
The Scanfil Board of Directors decided on 27 February 2008 to propose to the
Annual General Meeting that the company be split up with a business transfer to
an investment company and a sub-concern engaged in the contract manufacturing
business. The Board also confirmed the new business strategy.
With the business transfer, Scanfil plc's electronics contract manufacturing
business will be turned into a sub-concern owned in its entirety by Scanfil.
Scanfil plc will remain the parent company and will act as the owner in other
business areas, too.
The electronics contract manufacturing business will be developed as a strong
Nordic operator, and the objective is to structure the contract manufacturing
business in a way, which will enhance the company's global market position. The
Scanfil EMS Oy concern created by the business transfer is a competitive and
profitable company in its own sector.
Scanfil plc will focus on its ownership role in contract manufacturing and other
new sectors. The aim is to invest the company assets profitably in selected
companies that operate in the chosen sectors. Scanfil will strive to acquire an
ownership share, which will allow it to have a say in the operations of the
selected companies. In addition, the company can own shares and invest assets in
other targets.
The Annual General Meeting that convened after the review period on 3 April 2008
approved the Board of Director's proposal unanimously. The planned
implementation date of the business transfer is 1 May 2008.
On 21 January 2008, the District Court of Helsinki dismissed all charges against
the Chairman of Scanfil plc's Board of Directors and against Scanfil plc's
former CEO in legal proceedings that concerned a delayed profit warning at the
turn of 2005-2006. The District Court of Helsinki also dismissed the
prosecutor's claim for sentencing Scanfil plc to a fine imposed on a corporation
of EUR 25,000. The prosecutor has appealed against the district court's decision
to the court of appeal.
Negotiations on cooperation between Scanfil plc's Hungarian subsidiary Scanfil
Kft and Helkama Forste Oy continue.
FINANCIAL DEVELOPMENT
The Group's turnover for January-March fell a bit compared with the previous
year, amounting to EUR 50.0 (52.2) million, down 4% year-on-year. Distribution
of turnover based on the location of customers was as follows: Finland 47 (41)
%, rest of Europe 25 (28) %, Asia 26 (29) %, USA 1 (1) % and the others 1 (1) %.
Scanfil plc has organised its logistics from material sourcing to delivery of
finished products into a flexible and cost-effective chain. Operating profit was
at very satisfactory level EUR 4.7 (3.6) million, representing 9.5 (6.8)% of
turnover. Earnings for the review period amounted to EUR 3.6 (3.1) million.
Earnings per share were EUR 0.06 (0.05) and return on investment was 14.2
(11.3)%.
Owing to the structure of the company's operations, the effects of change in
exchange rates on the result were minimal. The weakening US dollar has had a
minor positive effect on the operating income in Europe. On the other hand, if
the US dollar remains weak or continues to weaken, its main impact will be to
reduce the turnover and expenses of the Asian operations. Changes in the US
dollar exchange rate will not have a significant effect on the relative
profitability of the Asian operations.
FINANCING AND CAPITAL EXPENDITURE
The Group enjoys a strong financial position. Liabilities amounted to EUR 50.0
(47.7) million, EUR 38.0 (40.2) million of which were non-interest bearing and
EUR 12.0 (7.5) million interest bearing.
Liquid cash assets totalled EUR 48.0 (36.5) million.Liquid cash assets totalled
EUR 48.0 (36.5) million. An additional EUR 14.3 (0) million of cash assets has
been invested in financial instruments mainly to bonds, credit linked notes and
FX carry notes, EUR 9.5 million of which will mature in less than a year. Equity
ratio was 73.1 (73.3)% and net gearing -26.5 (-22.2)%.
Cash flow from operating activities totalled EUR 8.5 (1.6) million, and the
change in working capital was EUR 4.3 (-1.9) million. Parent company's long-term
loan of EUR 7.5 million has been settled. To hedge against the possible decline
in the value of the Estonian kroon, the Estonian subsidiary has obtained an EEK
loan with a counter-value of EUR 12 million.
Gross investments in fixed assets totalled EUR 0.3 (0.6) million, which is 0.6
(1.2)% of turnover. Depreciations were EUR 1.6 (2.0) million.
DECISIONS BY THE ANNUAL GENERAL MEETING AND BOARD OF DIRECTORS' AUTHORISATION
Scanfil plc's Annual General Meeting held on 3 April 2008 confirmed the
Financial Statements for 2007 and discharged the Board of Directors and the
President from liability.
According to Board of Directors' proposal The Annual General Meeting decided to
distribute a dividend of EUR 0.12 per share, or a total of EUR 7,045,898.52. The
record date for the payment of dividend was 8 April 2008 and the date of payment
of the dividend was 15 April 2008.
The Meeting resolved that the Board of Directors consists of five members.
Asa-Matti Lyytinen, Jorma J. Takanen, Reijo Pöllä, Jarkko Takanen and Tuomo
Lähdesmäki were re-elected as members of the Board of Directors. In it's
meeting, held after the General Meeting, the Board of Directors elected Jorma J.
Takanen as the Chairman of the Board of Directors and Asa-Matti Lyytinen as Vice
Chairman of the Board of Directors.
The Meeting decided according to the Board of Directors' proposal to authorize
the Board of Directors to decide on the acquisition of the Company's own shares
with distributable assets.
The Meeting approved the Board of Directors' proposal to split up the company
with a business transfer to an investment company Scanfil plc and sub-concern
Scanfil EMS Oy engaged in the contract manufacturing business. The meeting
authorised the Board to decide on all required measures to execute and implement
the business transfer.
The Meeting approved the Board of Directors' proposal to amend the Articles of
Association.
OWN SHARES
On 31 March 2008, the company owned a total of 1,993,146 of its own shares, the
counter-book value of which totalled EUR 498,287 and which represented 3.3% of
the company's share capital and votes.
During the review period, the company disposed of 5,303 of its own shares in
conjunction with the share-based profit-sharing scheme of the Group's Management
Team.
SHARE TRADING AND SHARE PERFORMANCE
The highest trading price during the review period was EUR 2.19 and the lowest
EUR 1.76, the closing price for the period standing at EUR 2.10. A total of
1,852,791 shares were traded during the period, corresponding to 3.1% of the
total number of shares. The market value of the shares on 31 March 2008 was EUR
127,5 million.
PERSONNEL
Scanfil Group's personnel averaged 2,074 (2,117) employees during the review
period and the company employed 2,116 (2,113) employees at the end of the review
period, of whom 1,571 (1,509) were employed in the company's foreign plants.
EVENTS AFTER THE REVIEW PERIOD
After the review period, the company has made a preliminary agreement on the
sale of the property of the Oulu plant. The preliminary agreement is valid until
the end of the year and may lead to a sales agreement during 2008.
FUTURE PROSPECTS
Demand in the industrial electronics sector is expected to continue growing in
2008. In addition, negotiations are in progress with potential new customers in
the industrial electronics sector.
According to recent forecasts, the value of the telecom equipment market is
expected to remain at the same level as in 2007. The net sales of telecom
equipment delivered by Scanfil is expected to remain at the same level as in
2007.
Scanfil expects its turnover in 2008 to be about the same as in 2007.
Profitability for the full year is estimated to be at a satisfactory level.
However, market predictability is still poor.
The company hopes to find new growth opportunities by splitting up into an
investment company called Scanfil plc and a sub-concern, Scanfil EMS Oy, which
engages in contract manufacturing business. With the new company structure, we
can utilise the Group's strengths even better and are better equipped for
monitoring the business development in different areas. Scanfil plc is also
actively looking for new business areas in which it can operate as an active
owner.
OPERATIONAL RISKS AND UNCERTAINTIES
Customer risk is one of the main operative risks in telecom contract
manufacturing. Extremely short visibility in the market makes it difficult to
forecast the success of our customers in the global market and the development
of customer demand. Other operative risks include intense price competition,
material availability and significant and quick fluctuations in demand.
In the industrial electronics sector, the demand looks more stable, with risks
and uncertainties mainly associated with global economic development and
subsequent changes in demand.
APPENDICES:
Appendix 1: Consolidated profit and loss statements and balance sheet
Appendix 2: Consolidated cash flow statement
Appendix 3: Key indicators
Appendix 4: Calculation of changes in shareholders' equity
Appendix 5: Segment information
Appendix 6: Changes in tangible non current assets
Appendix 7: Consolidated contingent liabilities
Appendix 8: Key indicators quarterly
This interim report has been prepared in accordance with the recognition and
measurement principles of the IFRS.
The accounting policies and methods for calculating key indicators are the same
as those published in the financial statements for 2007.
Individual figures and grand totals have been rounded to the nearest million
euros, so they will not always add up. The figures are unaudited.
APPENDIX 1
CONSOLIDATED PROFIT AND LOSS STATEMENT
EUR million
2008 2007 2007
1 - 3 1 - 3 1 - 12
NET SALES 50.0 52.2 224.6
Increase or decrease of inventory
of finished products - 0.7 - 0.6 - 0.6
Other operating income 0.2 1.0 2.1
Expenses - 43.2 - 47.0 - 200.3
Depreciation - 1.6 - 2.0 - 7.2
OPERATING PROFIT 4.7 3.6 18.6
Financial income and expenses 0.1 0.2 0.4
PROFIT BEFORE TAXES 4.9 3.8 19.0
Direct tax - 1.3 - 0.7 - 4.9
NET PROFIT FOR THE PERIOD 3.6 3.1 14.1
Attributable to:
Equity holders of the parent 3.6 3.1 14.1
Earnings/share (EPS), EUR 0.06 0.05 0.24
CONSOLIDATED BALANCE SHEET
EUR million 31.3. 31.3. 31.12.
2008 2007 2007
ASSETS
Non-current assets
Property, plant and equipment 34.8 42.0 36.5
Goodwill 2.5 2.6 2.5
Other intangible assets 1.0 1.0 1.1
Available-for-sale investments 4.9 0.3 0.0
Receivables 0.2 0.2 0.2
Deferred tax assets 0.3 0.2 0.4
Total non-current assets 43.6 46.2 40.8
Current assets
Inventories 32.0 38.3 33.6
Trade and other receivables 48.1 50.7 52.3
Advance payments 0.1 0.1 0.1
Available-for-sale investments 9.5
Financial assets with result
impact entered at current value 7.0
Cash and cash equivalents 48.0 29.5 50.0
Total current assets 137.6 125,5 136.1
Non current assets held for sale 4.6 6.5 4.6
TOTAL ASSETS 185.8 178.2 181.5
SHAREHOLDERS' EQUITY AND LIABILITIES
Equity
Share capital 15.2 15.2 15.2
Share premium account 16.1 16.1 16.1
Own shares - 6.9 - 6.9 - 6.9
Other reserves 3.2 2.3 2.6
Translation differences - 4.0 - 0.7 - 2.6
Fair value reserve 0.1
Retained earnings 112.2 104.4 109.3
Total equity 135.8 130.5 133.6
Non-current liabilities
Deferred tax liabilities 1.1 1.3 2.3
Reserves 6.7 7.9 7.0
Interest bearing liabilities 12.0 7.5
Total non-current liabilities 19.8 16.7 9.3
Current liabilities
Trade and other payables 29.1 30.1 30.4
Current tax 1.1 0.9 0.7
Interest bearing liabilities 0.0 7.5
Total current liabilities 30.2 31.0 38.6
Total liabilities 50.0 47.7 47.9
TOTAL SHAREHOLDERS' EQUITY AND
LIABILITIES 185.8 178.2 181.5
APPENDIX 2
CONSOLIDATED CASH FLOW STATEMENT 2008 2007 2007
EUR million 1 - 3 1 - 3 1 - 12
Cash flow from operations
Net profit 3.6 3.1 14.1
Adjustment for the net profit of the period 2.3 1.1 8.7
Change in net working capital 4.3 - 1.9 0.4
Interests paid and other financial expenses - 0.2 - 0.2 - 0.4
Interests received 0.4 0.1 1.3
Taxes paid - 1.9 - 0.5 - 4.0
Net cash flow from operations 8.5 1.6 20.2
Cash flow from investments
Investments in tangible and
intangible assets - 0.4 - 0.9 - 1.7
Proceeds from sale of tangible
and intangible assets 0.2 3.9 6.3
Investments in other investments - 14.3
Proceeds from other investments 0.2
Net cash flow from investments - 14.5 3.0 4.9
Cash flow from funding
Raising of long-term loans 12.0
Repayment of long-term loans - 7.5
Dividends paid - 5.9
Net cash flow from funding 4.5 - 5.9
Change in assets - 1.5 4.6 19.2
Liquid assets at the beginning
of the period 50.0 31.8 31.8
Effect of changes in currency exchange rates - 0.5 0.0 - 0.6
Effect of changes in the fair value of investments 0.0 0.1 - 0.3
Liquid assets at the end of the period 48.0 36.5 50.0
APPENDIX 3
KEY INDICATORS 2008 2007 2007
1 - 3 1 - 3 1 - 12
Return on equity, % 11.0 9.5 10.8
Return on investment, % 14.2 11.3 14.1
Interest bearing liabilities,
EUR million 12.0 7.5 7.5
Gearing, % - 26.5 - 22.2 - 31.8
Equity ratio, % 73.1 73.3 73.6
Gross investments in fixed
assets, EUR million 0.3 0.6 1.4
% of net turnover 0.6 1.2 0.6
Personnel, average 2 074 2 117 2 105
Earnings per share, EUR 0.06 0.05 0.24
Shareholders' equity per share, EUR 2.31 2.22 2.27
Number of shares at
the end of period, 000's 60 714 60 714 60 714
- not counting own shares 58 721 58 716 58 716
- weighted average 58 716 58 716 58 716
The company does not have any liabilities resulting from derivative instruments.
Owing to the nature of the sector, the company's order book covers only a short
period of time and does not give an accurate picture of future development.
APPENDIX 4
CALCULATION OF CHANGES IN SHAREHOLDERS' EQUITY
EUR million
A = Share capital
B = Premium fund
C = Own shares
D = Other reserves
E = Translation differences
F = Fair value reserve
G = Retained earnings
H = Total
I = Shareholder's equity total
SHAREHODER'S A B C D E F G H I
EQUITY
1.1.2007 15.2 16.1 -6.9 1.9 - 0.7 0.1 101.7 127.4 127.4
Translation difference - 0.0 - 0.0 - 0.0
NET INCOME RECOGNIZED
DIRECTLY IN EQUITY - 0.0 - 0.0 - 0.0
Net profit for the period 3.1 3.1 3.1
TOTAL RECOGNIZED INCOME
AND EXPENCE - 0.0 3.1 3.1 3.1
Transfer to reserves 0.4 - 0.4 0 0
Distribution of own shares 0.0 0.0 0.0
SHAREHOLDER'S EQUITY
31.3.2007 15.2 16.1 - 6.9 2.3 - 0.7 0.1 104.4 130.5 130.5
SHAREHOLDER'S EQUITY
1.1.2008 15.2 16.1 - 6.9 2.6 - 2.6 0 109.3 133.6 133.6
Translation difference - 1.4 - 1.4 - 1.4
NET INCOME RECOGNIZED
DIRECTLY IN EQUITY - 1.4 - 1.4 - 1.4
Net profit for the period 3.6 3.6 3.6
TOTAL RECOGNIZED INCOME
AND EXPENCE - 1.4 3.6 2.3 2.3
Transfers to reserves 0.6 - 0.6 0 0
Distribution of own shares 0.0 0.0 0.0
SHAREHOLDER'S EQUITY
31.3.2008 15.2 16.1 - 6.9 3.2 - 4.0 0 112.2 135.8 135.8 APPENDIX 5
SEGMENT INFORMATION ACCORDING GEOGRAPHICAL AREA
EUR million 2008 2007 2007
1 - 3 1 - 3 1 - 12
TURNOVER
Europe 36.8 37.3 150.2
Asia 16.9 18.2 92.4
Turnover between segments - 3.6 - 3.3 - 18.0
Total 50.0 52.2 224.6
OPERATING PROFIT
Europe 3.0 2.0 7.5
Asia 1.8 1.5 11.1
Total 4.7 3.6 18.6
The Group operates in single sector.
APPENDIX 6
CHANGES IN TANGIBLE NON CURRENT ASSETS
EUR million 2008 2007 2007
1 - 3 1 - 3 1 - 12
Book value at the beginning of the period 36.5 43.1 43.1
Additions 0.3 0.5 0.9
Deductions - 0.0 - 0.1 - 0.2
Depreciations - 1.5 - 1.8 - 6.9
Translation differences - 0.5 0.1 - 0.5
Book value at the end of the period 34.8 42.0 36.5 APPENDIX 7
CONSOLIDATED CONTINGENT LIABILITIES
EUR million 2008 2007 2007
1 - 3 1 - 3 1 - 12
Real estate mortgages 6.2
Business mortgages 16.4 16.4 16.4
Guarantees pledged 0.1 0.7 0.7
Rental liabilities 0.6 0.4 0.7
The parent company has given a EUR 6.9 million bank guarantee to secure the
payment of contributions related to Scanfil NV's restructuring. Scanfil NV's
balance sheet includes a corresponding provision.
APPENDIX 8
KEY INDICATORS QUARTERLY
EUR million
Q1/08 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06
Turnover, MEUR 50.0 54.4 59.1 58.9 52.2 51.5 67.5 62.4
Operating
Profit, MEUR 4.7 5.5 5.6 4.0 3.6 2.7 7.0 5.1
Operating profit, % 9.5 10.2 9.4 6.7 6.8 5.2 10.4 8.2
Net income, MEUR 3.6 3.4 4.5 3.2 3.1 3.0 6.1 3.7
EPS, EUR 0.06 0.06 0.08 0.05 0.05 0.05 0.10 0.06
SCANFIL PLC
Harri Takanen
President
Additional information:
President Harri Takanen
Tel +358 8 4882 111
Distribution OMX Nordic Exchanges, Helsinki
Major Media
www.scanfil.com
Scanfil plc is a global contract manufacturer and systems supplier for
communication and industrial electronics with over 30 years experience in
demanding contract manufacturing
Scanfil offers contract-manufacturing services as a systems supplier to the
telecommunication industry, mainly to wireless communication sector, as well as
to the industrial electronics industry. Main telecommunication products are
among others integrated enclosure systems for mobile phone and ADSL networks and
assembly and testing of modules related to enclosure systems. Examples of
industrial electronics products include box-built tested devices, various
electronic modules, backplanes and assembled circuit boards as well as cable
assemblies. Production plants are situated in China, Hungary, Estonia and
Finland.
Not for release over US newswire services. 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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