2014-10-21 08:00:02 CEST
2014-10-21 08:00:05 CEST
REGULATED INFORMATION
Ponsse Oyj - Interim report (Q1 and Q3)
PONSSE’S INTERIM REPORT FOR 1 JANUARY – 30 SEPTEMBER 2014
Vieremä, Finland, 2014-10-21 08:00 CEST (GLOBE NEWSWIRE) --
PONSSE PLC, STOCK EXCHANGE RELEASE, 21 OCTOBER 2014, 9:00 a.m.
PONSSE'S INTERIM REPORT FOR 1 JANUARY - 30 SEPTEMBER 2014
- Net sales amounted to EUR 270.0 (Q1-Q3/2013 211.3) million.
- Q3 net sales amounted to EUR 86.4 (Q3/2013 66.0) million.
- Operating result totalled EUR 27.5 (Q1-Q3/2013 12.7) million, equalling 10.2
(6.0) per cent of net sales.
- Q3 operating result totalled EUR 9.5 (Q3/2013 4.2) million, equalling 11.0
(6.4) per cent of net sales.
- Profit before taxes was EUR 27.4 (Q1-Q3/2013 7.5) million.
- Cash flow from business operations was EUR 13.8 (21.7) million.
- Earnings per share were EUR 0.80 (0.15).
- Equity ratio was 38.9 (32.5) per cent.
- Order books stood at EUR 155.5 (97.2) million.
PRESIDENT AND CEO JUHO NUMMELA:
The demand for Ponsse's forest machines continued to be very strong during the
quarter. The monthly order volumes of new machines rose to new record figures
and our order books increased strongly to EUR 155.5 (97.2) million. The order
books grew by 60 per cent compared with the comparable period. International
business operations accounted for 73.5 (68.7) per cent of net sales.
Current year has been a strong one in terms of both net sales and operating
profit. The company's cumulative net sales amounted to EUR 270.0 (211.3)
million and operating profit was EUR 27.5 (12.7) million. Net sales have
increased by 28 per cent, while operating profit has increased by 116 per cent
compared with the comparable period. The operating profit equalled 10.2 (6.0)
per cent of net sales for the period under review. The equity ratio continued
to develop favourably, amounting to 38.9 per cent.
The situation in the Russian forest machine market has continued to be positive
in spite of the uncertainties. The sanctions have not had a direct effect on
the sales or financing of forest machines for the time being. Spare part
deliveries to Russia are also working normally. The forest machine market
situation in North America continues to be good, and the situation is improving
in Europe. In Latin America, the focus is on developing service operations and
fulfilling the contractual obligations with major customers.
The serial production of the PONSSE Scorpion harvester range has become well
established. During the past quarter, Ponsse launched the PONSSE Scorpion
range and the PONSSE Bear harvester of the new product range in the United
States. Ponsse launched the new PONSSE 2015 product range at the FinnMETKO
fair, and these products will enter serial production gradually during 2015.
The new product range is a continuum of the PONSSE Scorpion and Bear products.
The ergonomics, serviceability and productivity of the machines have been
developed and the design has been updated. At the same time, forest machines
delivered in Europe will have new engines compliant with the EU Stage IV
emission level meeting the new environment requirements.
Service operations grew at a strong rate during the period under review. The
accelerated growth in service operations is associated with the growing machine
fleet as well as the adoption of new service business concepts. The sales of
new machines increased strongly from the comparison period and the net sales in
the past quarter were EUR 86.4 (66.0) million. The net sales increased by 31
per cent from the corresponding period.
The operating result amounted to EUR 9.5 (4.2) million during the third
quarter, equalling 11.0 (6.4) per cent of net sales.
Cash flow from business operations amounted to EUR 13.8 (21.7) million in the
period under review. The capital temporarily tied up in inventories resulted
from the strong growth impaired the cash flows. The stock of used machines
continued to be at a normal level.
Construction investments at the Vieremä factory and in the maintenance service
network proceeded according to plan.
NET SALES
Consolidated net sales for the period under review amounted to EUR 270.0
(211.3) million, which is 27.8 per cent more than in the comparison period.
International business operations accounted for 73.5 (68.7) per cent of net
sales.
Net sales were regionally distributed as follows: Northern Europe 40.9 (45.8)
per cent, Central and Southern Europe 20.6 (14.7) per cent, Russia and Asia
14.6 (17.0) per cent, North and South America 23.8 (22.5) per cent and other
countries 0.1 (0.0) per cent.
PROFIT PERFORMANCE
The operating result amounted to EUR 27.5 (12.7) million. The operating result
equalled 10.2 (6.0) per cent of net sales for the period under review.
Consolidated return on capital employed (ROCE) stood at 28.4 (8.8) per cent.
Staff costs for the period totalled EUR 41.2 (35.1) million. Other operating
expenses stood at EUR 26.1 (22.3) million. The net total of financial income
and expenses amounted to EUR -3 thousand (-5.1 million). Exchange rate gains
and losses with a net effect of EUR 1.4 (-3.8) million were recognised under
financial items for the period. Profit for the period under review totalled EUR
22.3 (4.5) million. Diluted and undiluted earnings per share (EPS) came to EUR
0.80 (0.15). The interest on the subordinated loan for the comparison period,
less tax, has been taken into account in the calculation of EPS in the
comparison period.
STATEMENT OF FINANCIAL POSITION AND FINANCING ACTIVITIES
At the end of the period under review, the total consolidated statements of
financial position amounted to EUR 207.7 (191.6) million. Inventories stood at
EUR 98.1 (89.2) million. Trade receivables totalled EUR 26.6 (22.5) million,
while liquid assets stood at EUR 13.8 (15.7) million. Group shareholders'
equity stood at EUR 79.4 (61.5) million and parent company shareholders' equity
(FAS) at EUR 97.2 (81.1) million. The amount of interest-bearing liabilities
was EUR 64.6 (75.5) million. The company has used 22 per cent of its credit
facility limit. The parent company's net receivables from other Group companies
stood at EUR 78.4 (77.0) million. The parent company's receivables from
subsidiaries mainly consisted of trade receivables. Consolidated net
liabilities totalled EUR 50.8 (59.9) million, and the debt-equity ratio (net
gearing) was 64.0 (97.4) per cent. The equity ratio stood at 38.9 (32.5) per
cent at the end of the period under review.
Cash flow from business operations amounted to EUR 13.8 (21.7) million. Cash
flow from investment activities came to EUR -9.9 (-8.0) million.
ORDER INTAKE AND ORDER BOOKS
Order intake for the period totalled EUR 327.6 (266.8) million, while
period-end order books were valued at EUR 155.5 (97.2) million.
DISTRIBUTION NETWORK
No changes took place in the Group structure during the period under review.
The subsidiaries included in the Ponsse Group are: Epec Oy, Finland; OOO
Ponsse, Russia; Ocean Safety Center, Russia; Ponsse AB, Sweden; Ponsse AS,
Norway; Ponsse Asia-Pacific Ltd, Hong Kong; Ponsse China Ltd, China; Ponsse
Latin America Ltda, Brazil; Ponsse North America, Inc., the United States;
Ponssé S.A.S., France; Ponsse UK Ltd, the United Kingdom; and Ponsse Uruguay
S.A., Uruguay. Sunit Oy, based in Kajaani, Finland, is an affiliated company in
which Ponsse Plc has a holding of 34 per cent.
CAPITAL EXPENDITURE AND R&D
During the period under review, the Group's R&D expenses totalled EUR 8.3 (7.2)
million, of which EUR 1.9 (2.2) million was capitalized.
Capital expenditure totalled EUR 9.9 (8.0) million. It consisted in addition to
capitalised R&D expenses of investments in buildings and ordinary maintenance
and replacement investments for machinery and equipment.
MANAGEMENT
The following persons were members of the Management Team: Juho Nummela,
President and CEO, acting as the chairman; Juha Haverinen, Factory Director;
Petri Härkönen, CFO; Juha Inberg, Technology and R&D Director; Tapio Mertanen,
Service Director; Paula Oksman, HR Director; Tommi Väänänen, Purchasing
Director and Jarmo Vidgrén, Deputy CEO, Sales and Marketing Director. The
company management has regular management liability insurance.
The area director organisation of sales is led by Jarmo Vidgrén, Group's Sales
and Marketing Director and Tapio Mertanen, Service Director. The geographical
distribution and the responsible persons are presented below:
Northern Europe: Jarmo Vidgrén (Finland), Eero Lukkarinen (Sweden, Denmark) and
Sigurd Skotte (Norway),
Central and Southern Europe: Janne Vidgrén (Austria, Poland, Romania, Germany,
the Czech Republic and Hungary), Clément Puybaret (France), Jussi Hentunen
(Spain, Italy, Portugal and Norrbotten/Sweden) and Gary Glendinning (the United
Kingdom),
Russia and Asia: Jaakko Laurila (Russia, Belarus), Norbert Schalkx (the Baltic
countries, Japan and Australia) and Risto Kääriäinen (China),
North and South America: Pekka Ruuskanen (the United States), Marko Mattila
(North American dealers and Chile), Teemu Raitis (Brazil) and Martin Toledo
(Uruguay).
PERSONNEL
The Group had an average staff of 1,186 (1,009) during the period and employed
1,226 (1,040) people at period-end.
SHARE PERFORMANCE
The company's registered share capital consists of 28,000,000 shares. The
trading volume of Ponsse Plc shares for 1 January - 30 September 2014 totalled
2,922,327, accounting for 10.4 per cent of the total number of shares. Share
turnover amounted to EUR 32.4 million, with the period's lowest and highest
share prices amounting to EUR 9.02 and EUR 13.32, respectively.
At the end of the period, shares closed at EUR 12.00, and market capitalisation
totalled EUR 336.0 million.
At the end of the period under review, the company held 212,900 treasury shares.
ANNUAL GENERAL MEETING
A separate release was issued on 15 April 2014 regarding the authorizations
given to the Board of Directors and other resolutions at the AGM.
GOVERNANCE
In its decision-making and administration, the company observes the Finnish
Limited Liability Companies Act, other regulations governing publicly listed
companies and the company's Articles of Association. The company's Board of
Directors has adopted the Code of Governance that complies with the Finnish
Corporate Governance Code approved by the Board of the Securities Market
Association in 2010. The purpose of the code is to ensure that the company is
professionally managed and that its business principles and practices are of a
high ethical and professional standard.
The Code of Governance is available on Ponsse's website in the Investors
section.
RISK MANAGEMENT
Risk management is based on the company's values, as well as strategic and
financial objectives. Risk management aims to support the achievement of the
objectives specified in the company's strategy, as well as to ensure the
financial development of the company and the continuity of its business.
Furthermore, risk management aims to identify, assess and monitor
business-related risks which may influence the achievement of the company's
strategic and financial goals or the continuity of its business. Decisions on
the necessary measures to anticipate risks and react to observed risks are made
on the basis of this information.
Risk management is a part of regular daily business, and it is also included in
the management system. Risk management is controlled by the risk management
policy approved by the Board.
A risk is any event that may prevent the company from reaching its objectives
or that threatens the continuity of business. On the other hand, a risk may
also be a positive event, in which case the risk is treated as an opportunity.
Each risk is assessed on the basis of its impact and probability. Methods of
risk management include avoiding, mitigating and transferring risks. Risks can
also be managed by controlling and minimising their impact.
SHORT-TERM RISK MANAGEMENT
The prolonged insecurity in the world economy and weak economic situation may
result in a decline in the demand for forest machines. The uncertainty may be
increased by the volatility of developing countries' foreign exchange markets.
The geopolitical situation, in particular, will increase the uncertainty
through financial market operations and sanctions.
The parent company monitors the changes in the Group's internal and external
trade receivables and the associated risk of impairment.
The key objective of the company's financial risk management policy is to
manage liquidity, interest and currency risks. The company ensures its
liquidity through credit limit facilities agreed with a number of financial
institutions. The effect of adverse changes in interest rates is minimised by
utilising credit linked to different reference rates and by concluding interest
rate swaps. The effects of currency rate fluctuations are mitigated through
derivative contracts.
Changes taking place in the fiscal and customs legislation in countries to
which Ponsse exports may hamper the company's export trade or its
profitability.
OUTLOOK FOR THE FUTURE
The Group's euro-denominated operating profit is expected to be significantly
higher than in 2013.
Ponsse's updated and competitive product range and new service solutions have
boosted the company's net sales significantly. The PONSSE 2015 product range
will enter serial production gradually during 2015.
Thanks to the strong order books, capacity will be increased at the factory.
We will continue to invest in the facilities of the Vieremä factory, R&D and
maintenance services, as well as in the development of production technology
and R&D. During 2014, the facility investments cover approximately 7,000 m2.
PONSSE GROUP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000)
IFRS IFRS IFRS
1-9/14 1-9/13 1-12/13
NET SALES 270,003 211,292 312,825
Increase (+)/decrease (-) in inventories of 5,849 8,098 5,832
finished goods and work in progress
Other operating income 972 675 1,053
Raw materials and services -176,201 -144,992 -210,146
Expenditure on employment-related benefits -41,163 -35,144 -49,022
Depreciation and amortisation -5,885 -4,920 -6,568
Other operating expenses -26,090 -22,264 -31,472
OPERATING RESULT 27,486 12,745 22,501
Share of results of associated companies -58 -138 -45
Financial income and expenses -3 -5,060 -8,208
RESULT BEFORE TAXES 27,426 7,547 14,248
Income taxes -5,173 -3,001 -5,150
NET RESULT FOR THE PERIOD 22,253 4,547 9,098
OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE
RESULT:
Translation differences related to foreign units -2,053 1,415 2,955
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD 20,200 5,962 12,053
Diluted and undiluted earnings per share 0.80 0.15* 0.31*
IFRS IFRS
7-9/14 7-9/13
NET SALES 86,384 66,007
Increase (+)/decrease (-) in inventories of 396 6,382
finished goods and work in progress
Other operating income 330 146
Raw materials and services -54,691 -49,512
Expenditure on employment-related benefits -12,206 -10,207
Depreciation and amortisation -2,035 -1,635
Other operating expenses -8,690 -6,941
OPERATING RESULT 9,487 4,240
Share of results of associated companies 10 -33
Financial income and expenses -84 -1,853
RESULT BEFORE TAXES 9,413 2,354
Income taxes -1,832 -1,042
NET RESULT FOR THE PERIOD 7,581 1,312
OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE
RESULT:
Translation differences related to foreign units -1,031 757
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD 6,550 2,069
Diluted and undiluted earnings per share 0.27 0.05*
* The interest on the subordinated loan for the period, less tax, was taken
into account in this figure.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000)
IFRS IFRS IFRS
ASSETS 30 Sep 14 30 Sep 13 31 Dec 13
NON-CURRENT ASSETS
Intangible assets 15,047 13,106 14,278
Goodwill 3,440 3,440 3,440
Property, plant and equipment 41,052 37,428 37,766
Financial assets 104 111 104
Investments in associated companies 888 938 1,031
Non-current receivables 868 887 914
Deferred tax assets 1,802 1,641 1,374
TOTAL NON-CURRENT ASSETS 63,201 57,550 58,908
CURRENT ASSETS
Inventories 98,050 89,166 85,767
Trade receivables 26,601 22,492 23,108
Income tax receivables 706 177 207
Other current receivables 5,327 6,571 6,100
Cash and cash equivalents 13,780 15,675 11,958
TOTAL CURRENT ASSETS 144,465 134,080 127,140
TOTAL ASSETS 207,667 191,630 186,048
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 7,000 7,000 7,000
Other reserves 30 30 30
Translation differences -636 -123 1,417
Treasury shares -2,228 -2,228 -2,228
Retained earnings 75,248 56,780 61,331
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS 79,414 61,459 67,550
NON-CURRENT LIABILITIES
Interest-bearing liabilities 43,510 49,719 38,810
Deferred tax liabilities 859 1,103 657
Other non-current liabilities 0 0 0
TOTAL NON-CURRENT LIABILITIES 44,369 50,822 39,466
CURRENT LIABILITIES
Interest-bearing liabilities 21,104 25,804 21,492
Provisions 3,802 4,854 4,618
Tax liabilities for the period 2,453 64 920
Trade creditors and other current liabilities 56,525 48,626 52,002
TOTAL CURRENT LIABILITIES 83,884 79,348 79,032
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 207,667 191,630 186,048
CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000)
IFRS IFRS IFRS 1-9/14 1-9/13 1-12/13
CASH FLOW FROM BUSINESS OPERATIONS:
Net result for the period 22,253 4,547 9,098
Adjustments:
Financial income and expenses 3 5,060 8,208
Share of the result of associated companies 58 138 45
Depreciation and amortisation 5,885 4,920 6,568
Income taxes 5,173 3,001 5,150
Other adjustments -379 2,042 2,637
Cash flow before changes in working capital 32,992 19,707 31,706
Change in working capital:
Change in trade receivables and other receivables -3,059 81 -81
Change in inventories -12,283 -7,529 -4,131
Change in trade creditors and other liabilities 3,419 12,032 15,557
Change in provisions for liabilities and charges -816 -123 -359
Interest received 111 169 227
Interest paid -712 -678 -1,143
Other financial items -1,317 -526 -1,063
Income taxes paid -4,544 -1,455 -2,260
NET CASH FLOW FROM BUSINESS OPERATIONS (A) 13,791 21,677 38,453
CASH FLOW FROM INVESTMENTS
Investments in tangible and intangible assets -9,941 -8,030 -11,188
NET CASH FLOW FROM INVESTMENT ACTIVITIES (B) -9,941 -8,030 -11,188
CASH FLOW FROM FINANCING
Hybrid loan 0 -19,000 -19,000
Interest paid, hybrid loan 0 -1,136 -1,136
Withdrawal/Repayment of current loans 3,000 -6,043 -14,500
Change in current interest-bearing liabilities 0 213 -136
Withdrawal of non-current loans 5,000 29,194 29,322
Repayment of non-current loans -3,591 -3,065 -10,668
Payment of finance lease liabilities -97 -1,521 -239
Change in non-current receivables -41 113 172
Dividends paid -8,336 -6,947 -6,947
NET CASH FLOW FROM FINANCING (C) -4,065 -8,192 -23,132
Change in cash and cash equivalents (A+B+C) -214 5,454 4,133
Cash and cash equivalents on 1 Jan 11,958 14,083 14,083
Impact of exchange rate changes 2,037 -3,863 -6,259
Cash and cash equivalents on 30 Sep/31 Dec 13,780 15,675 11,958
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR 1,000)
A = Share capital
B = Share premium and other reserves
C = Translation differences
D = Treasury shares
E = Retained earnings
F = Total shareholders' equity
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS
A B C D E F
SHAREHOLDERS' EQUITY 1 JAN 2014 7,000 30 1,417 -2,228 61,331 67,550
Translation differences -2,053 -2,053
Result for the period 22,253 22,253
Total comprehensive income for -2,053 22,253 20,200
the period
Dividend distribution -8,336 -8,336
Other changes 0
SHAREHOLDERS' EQUITY 30 SEP 7,000 30 -636 -2,228 75,248 79,414
2014
SHAREHOLDERS' EQUITY 1 JAN 2013 7,000 19,030 -1,538 -2,228 59,180 81,444
Translation differences 1,415 1,415
Result for the period 4,547 4,547
Total comprehensive income for 1,415 4,547 5,962
the period
Dividend distribution -6,947 -6,947
Other changes -19,000 -19,000
SHAREHOLDERS' EQUITY 30 SEP 7,000 30 -123 -2,228 56,780 61,459
2013
30 Sep 14 30 Sep 13 31 Dec 13
1. LEASING COMMITMENTS (EUR 1,000) 1,293 1,766 1,691
2. CONTINGENT LIABILITIES (EUR 1,000) 30 Sep 14 30 Sep 13 31 Dec 13
Guarantees given on behalf of others 503 503 487
Repurchase commitments 3,056 1,610 1,138
Other commitments 136 1,617 1,512
TOTAL 3,695 3,730 3,137
3. PROVISIONS (EUR 1,000) Guarantee provision
1 January 2014 4,618
Provisions added 363
Provisions cancelled -1,180
30 September 2014 3,802
KEY FIGURES AND RATIOS 30 Sep 14 30 Sep 13 31 Dec 13
R&D expenditure, MEUR 8.3 7.2 9.7
Capital expenditure, MEUR 9.9 8.0 11.2
as % of net sales 3.7 3.8 3.6
Average number of employees 1,186 1,009 1,027
Order books, MEUR 155.5 97.2 99.8
Equity ratio, % 38.9 32.5 36.5
Diluted and undiluted earnings per share (EUR) 0.80 0.15 0.31
Equity per share (EUR) 2.84 2.19 2.41
FORMULAE FOR FINANCIAL INDICATORS
Return on capital employed, %:
Result before tax + financial expenses
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Shareholder´s equity + interest-bearing financial liabilities (average during
the year) * 100
Average number of employees:
Average of the number of personnel at the end of each month. The calculation
has been adjusted for part-time employees.
Net gearing, %:
Interest-bearing financial liabilities - cash and cash equivalents
--------------------------------------------------------------------------------
-----
Shareholders' equity * 100
Equity ratio, %:
Shareholders' equity + Non-controlling interests
---------------------------------------------------------------------------
Balance sheet total - advance payments received * 100
Earnings per share:
Net result for the period - Non-controlling interests - Interest on hybrid loan
for the period less tax
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Average number of shares during the accounting period, adjusted for share issues
Equity per share:
Shareholders' equity
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---------------
Number of shares on the balance sheet date, adjusted for share issues
ORDER INTAKE, MEUR 1-9/14 1-9/13 1-12/13
Ponsse Group 327.6 266.8 371.0
The stock exchange release for the interim report has been prepared observing
the recognition and valuation principles of IFRS standards, but not all of the
requirements of IAS 34 have been complied with. The same accounting principles
were observed for the interim report as for the annual financial statements
dated 31 December 2013.
The above figures have not been audited.
The above figures have been rounded and may therefore differ from those given
in the official financial statements.
This communication includes future-oriented statements that are based on the
assumptions currently made by the company's management and its current
decisions and plans. Although the management believes that the future
expectations are well founded, there is no certainty that these expectations
will prove to be correct. This is why the results may significantly deviate
from the assumptions included in the future-oriented statements as a result of,
among other things, changes in the economy, markets, competitive conditions,
legislation or currency exchange rates.
Vieremä, 21 October 2014
PONSSE PLC
Juho Nummela
President and CEO
FURTHER INFORMATION
Juho Nummela, President and CEO, tel. +358 20 768 8914 or +358 400 495 690
Petri Härkönen, CFO, tel. +358 20 768 8608 or +358 50 409 8362
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
www.ponsse.com
Ponsse Plc is a company specialising in the sales, manufacture, servicing and
technology of cut-to-length method forest machines and is driven by genuine
interest in its customers and their business. Ponsse develops and manufactures
sustainable and innovative harvesting solutions based on customers' needs.
The company was established by forest machine entrepreneur Einari Vidgrén in
1970, and it has been a leader in timber harvesting solutions based on the
cut-to-length method ever since. Ponsse is headquartered in Vieremä, Finland.
The company's shares are quoted on the NASDAQ OMX Nordic List.
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