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2007-04-26 12:00:00 CEST 2007-04-26 12:00:00 CEST REGULATED INFORMATION Rocla Oyj - Quarterly reportROCLA OYJ INTERIM REPORT JANUARY 1 - MARCH 31, 2007GROWTH IN SALES CONTINUES - Net sales were EUR 30.3 million showing a first quarter growth of 21% over last year. Operating profit was EUR 0.9 million (EUR 1.2 million). - Production capacity of trucks was boosted close to the target level. Delays in deliveries were significantly reduced. - The shortages in subcontracted materials that troubled the operations during the second half of 2006 subsided significantly. The operating profit improved from EUR 0.4 million in the last quarter of 2006 to EUR 0.9 million in the first quarter of 2007. - Product success continued on the market and the order book strengthened further. - Rocla and Transpoint, part of the Finnish State Railways Group, concluded a long-term rental and service agreement according to which Transpoint outsources its truck fleet to Rocla. This service agreement is one of Rocla´s biggest ever. - Rocla´s Humanic reach truck won the first prize of the Fennia design competition, The Fennia Grand Prize, in February 2007. BUSINESS ORGANIZATION AND REPORTING The integration process of Rocla´s warehouse trucks and automated guided vehicles businesses will be concluded within 2007. Tailored automated guided vehicles will be replaced by standardized deliveries and the operating principles of the order to delivery process of warehouse trucks will be adopted. The company is managed as a one product line business and consolidated reporting is based on the reporting of one business segment as of the beginning of 2007. The automated guided vehicles company Rocla Robotruck Oy was merged with its parent company Rocla Oyj at the turn of the year. GENERAL DEVELOPMENT Rocla started off the new fiscal year with a record-level order book. The subcontracting and component delivery problems that hampered deliveries during 2006 were for the most part brought under control towards the end of the first quarter of this year. The boosting of truck assembly capacity speeded up through-put and cut down delivery times. The catching up with the delivery shortcomings of 2006 required efforts that, combined with the general cost and price developments of the business, held back profit development to an unsatisfactory level. Despite this the result rose above the level of the last quarter of 2006. NET SALES, OPERATING RESULT AND ORDER BOOK The key business indicators of Rocla developed as follows: Meur 1-3 1-3 Change 1-12 2007 2006 2006 Net sales 30.3 25.1 20.8% 104.4 Operating result 0.9 1.3 -31.2% 1.5 Orders received 25.2 22.7 11.2% 87.6 Order book at end of period 27.8 17.8 56.1% 26.8 MARKETS The good market demand for warehouse truck that prevailed in 2006 carried over into the first quarter of 2007. Rocla's sales developed as expected across all distribution channels, i.e. the Rocla customer service organization, dealer network and contract manufacturing. In the first quarter Rocla concluded one of its biggest rental and service agreements ever with Transpoint Oy Ab, a member of the Finnish State Railways Group. Similar agreements have been concluded earlier with i.e. Hartwall, DHL and Metsä Tissue. The Transpoint trucks will be replaced by Rocla operated rental trucks. The delivery includes Rocla warehouse trucks and CAT counter-balance trucks as well as driver training. The value of this long-term agreement rises to several million euros. The Humanic truck, rewarded as the most impressive product at the Sklad trade fair in Moscow in the fall of 2006, won the Grand Prize of the Finnish Fennia Prize design competition in February 2007. In the same competition that was entered by some 70 products, Rocla was also awarded honorary mention for its TP20ac truck. RESULTS Net sales in the first quarter of 2007, EUR 30.3 million, rose one fifth above sales in the first quarter the year before (EUR 25.1 million). The operating result, on the other hand, weakened and was EUR 0.9 million (EUR 1.3 million). The tough market competition imposes constraints to price hikes. The increases made in early 2007 will have delayed effects on results that come only through the build-up of new order backlog. The good market situation has also caused cost escalations. Prices on raw materials and subcontracting have risen clearly. In addition materials costs grew because of the needs to locate new suppliers in order to make up for delays in deliveries. Expenses for materials and supplies grew by 24% in the first quarter while the increase in net sales was 21%. The customer service concept in local markets has changed the earnings model of Rocla in comparison with previous years. The share of rental and maintenance agreements in net sales is significant and keeps growing. The need for skilled mechanics is urgent in this situation. Rocla has recruited new service personnel and makes continued investments in their training. At the same time the customer service process is continuously developed utilizing IT-technology. Consolidated profit before taxes was EUR 0.5 million (EUR 1.2 million) and net profit for the period EUR 0.3 million (EUR 0.8 million). PROFITABILITY Consolidated return on investment, ROI, was 6.3% p.a. (10.9%) in the first quarter of 2007. Return on equity, ROE, was 6.0% p.a. (14.2%). Earnings per share, EPS, in the first quarter were 0.09 euros as compared with 0.22 euros in the same period a year ago. Considering the dilution effect of option-rights earnings per share in the first quarter were 0.09 euros (0.21 euros). BALANCE SHEET AND FINANCING At the end of March 2007 the balance sheet total was EUR 82.0 million (EUR 72.2 million). At the end of 2006, the corresponding figure was EUR 82.3 million. The main driver of growth in the balance sheet over the past year was the increase in working capital and especially the sales receivables following the growth in net sales. The need for working capital was met by increasing liabilities which in turn was reflected in the gearing ratio. At the end of March 2007 the interest-bearing net debt of the Rocla Group was EUR 37.5 million (at the end of March 2006 EUR 30.6 million), net gearing was 160.8% (127.5%) and the equity to assets ratio 28.8% (33.6%). PRODUCTION, INVESTMENTS AND PRODUCT DEVELOPMENT The build-up of production capacity at the Järvenpää factory in line with the MP10000 program has proceeded according to plan. Production capacity will be further boosted by the installation of a welding robot for the mast production line during the ongoing fiscal year. Gross investments in fixed assets in the first quarter of 2007 were EUR 1.1 million (EUR 1.9 million). Out of this EUR 0.5 million (EUR 0.3 million) were carried forward in the balance sheet in line with IFRS accounting practices. Rocla continues its dedicated product development of intelligent truck solutions. The technology used in the warehouse truck range will be updated during the course of 2007. The first upgraded truck to be launched was T20ac pallet truck with a driver platform. This truck was equipped with AC-technology. The automated guided vehicle concept based on warehouse truck technology will be launched at the end of this year. PERSONNEL In the first quarter of 2007 the average number of personnel was 493 (450). At the end of the first quarter Rocla had 499 employees (451), of whom 93 (80) worked outside Finland. ANNUAL GENERAL MEETING Financial statements The AGM that was held on April 3 adopted the 2006 financial statements and discharged those accountable from liability. In line with the Board's proposal a dividend of 0.20 euros per share was declared (0.20 euros). The record-date for the dividend was April 10 and the pay-date April 17, 2007. Board of Directors and Auditors The number of Board Members was set at six. Ilkka Hakala, Eero Karvonen, Frans Maarse and Niilo Pellonmaa were re-elected to the Board. Jay N. Gusler and Vesa Puttonen were elected new Board Members. At its first meeting the Board elected Niilo Pellonmaa Chairman and Ilkka Hakala Deputy Chairman. The certified accountants firm KPMG Oy Ab was elected auditor with Lasse Holopainen, CA, as principal auditor. Authorizations The AGM authorized the Board to decide about acquiring 194,535 Rocla Oyj shares and a new share issue, the transfer of treasury shares and/or the rendering of special rights as defined in the Companies Act, Chapter 10, § 1. Based on the authorization the Board may issue a maximum of 565,000 shares in one or several tranches. Shares issued in a new share issue or based on special rights are limited to the aforementioned maximum number. The authorization is for a paid new share issue and it remains in effect until the 2008 AGM. SHARES, OPTIONS AND SHARE CAPITAL Shares In the first quarter of 2007 a total of 106,130 Rocla Oyj shares were traded at the Helsinki Exchanges. This represents around 2.7% of the total number of shares. The highest share price in the first quarter was 12.49 euros and the lowest 10.75 euros. The average price was 11.62 euros and the closing price at the end of March 11.45 euros. The market capitalization of Rocla Oyj based on the closing share price at the end of March, excluding treasury shares, was EUR 44.8 million (EUR 50.3 million). Rocla Oyj holds 30,789 of its own shares which corresponds 0.8% of the total number of the shares. The number is the same as at year-end 2006. Option rights In the first quarter a total of 108,725 option-rights were traded. The average trading price was 3.54 euros. One option entitled the holder to subscribe one Rocla Oyj share in the period April 24, 2002 - April 24, 2007. The subscription price after the 2007 dividend was 7.60 euros. There were no subscriptions in the first quarter of 2007. The listing of the option-rights attached to the Rocla Oyj 1998 warrant bond ended on April 17, 2007. The right to share subscriptions based on the option-rights ended April 24, 2007. In April a total of 325,310 Rocla Oyj shares were subscribed based on the option-rights. The subscriptions will increase Rocla's equity by about EUR 2.5 million. The 1998 warrant bond, paid back by the company in 2001, had a total of 400,000 option-rights attached. The shares subscribed in 2007 have the same rights as the old shares and they will be publicly traded together with the old shares as soon as they have been registered. OWNERSHIP There were no major changes in the ownership of Rocla Oyj in the first quarter of 2007. ORDER BOOK At the beginning of 2007 the Rocla Oyj order-book stood at a record-level of EUR 26.8 million. It was at that time about twice the size of that a year earlier. The order book has continued to build up in 2007. At the end of the first quarter its value was EUR 27.8 million. At the same time a year ago it was EUR 17.8 million. The increase is 56.1%. OUTLOOK Demand for trucks and logistics services continues to look good on Rocla´s key markets. The company is facing the challenge of having to improve its profitability significantly. The rising costs on raw materials and manufacturing cause a need for new price increases in the nearest future as well as continued streamlining of processes and effective cost control. Consolidated net sales are expected to grow by over 10% this year in comparison with last year and results are estimated to improve from last year. A major improvement of results requires that strategic changes are made in the core business of the Rocla Group. Such changes are in the making but their results require time to materialize. Elements of these changes are i.e. expansion of the service business, boosted efficiency in sourcing and the use of capital and intelligent innovations of products and solutions. The new automated truck concept set to enter the market towards the end of the year is a case-in-point. FINANCIAL DATA ACCOUNTING PRINCIPLES The interim report has been prepared according to IFRS standards. However, all requirements of IAS 34 have not yet been adopted. INCOME STATEMENT (Meur) 1-3/2007 1-3/2006 Change % 1-12/2006 NET SALES 30.3 25.1 20.8 104.4 Change in finished goods and work in progress -0.3 0.4 2.3 Other operating income 0.0 0.1 0.3 Materials and services -18.7 -15.0 24.5 -65.9 Personnel expenses -5.8 -5.1 12.3 -21.2 Depreciation -1.8 -1.5 17.7 -6.6 Other operating expenses -2.9 -2.7 7.9 -12.0 OPERATING PROFIT 0.9 1.3 -31.2 1.5 Financial expenses (net) -0.4 -0.1 284.4 -1.1 PROFIT/LOSS BEFORE TAXES 0.5 1.2 -59.3 0.4 Income taxes -0.1 -0.3 -61.7 -0.1 PROFIT/LOSS FOR THE PERIOD 0.3 0.8 -58.4 0.3 Earnings per share, euros 0.09 0.22 0.07 Earnings per share, euros (diluted) 0.09 0.21 0.07 BALANCE SHEET (Meur) 3/2007 3/2006 12/2006 ASSETS NON-CURRENT ASSETS Intangible assets 7.1 6.8 7.2 Consolidated goodwill 2.1 2.1 2.1 Tangible assets 27.2 24.9 26.7 Receivables 0.2 0.4 0.1 NON-CURRENT ASSETS TOTAL 36.6 34.3 36.2 CURRENT ASSETS Inventories 21.7 19.5 21.4 Sales receivables and other receivables 23.0 17.3 22.0 Cash and cash equivalents 0.6 0.9 2.7 CURRENT ASSETS TOTAL 45.3 37.9 46.2 ASSETS TOTAL 82.0 72.2 82.3 EQUITY AND LIABILITIES Share capital 3.9 3.9 3.9 Premium fund 4.6 4.2 4.6 Retained earnings 14.4 14.9 14.1 Net income for the period 0.3 0.8 0.3 EQUITY TOTAL 23.3 24.0 23.0 NON-CURRENT LIABILITIES Interest-bearing debt 19.1 13.4 19.2 Deferred taxes 1.2 1.3 1.1 NON-CURRENT LIABILITIES TOTAL 20.3 14.7 20.3 CURRENT LIABILITIES Interest-bearing debt 18.9 18.1 17.1 Provisions 0.4 0.4 0.4 Non interest-bearing debt 19.0 14.9 21.5 CURRENT LIABILITIES TOTAL 38.4 33.4 39.0 LIABILITIES TOTAL 58.6 48.2 59.3 EQUITY AND LIABILITIES TOTAL 82.0 72.2 82.3 CHANGE IN EQUITY A=Share capital, B=Premium fund, C=Translation differences D=Current value fund, E=Retained earnings, F=Net income for the period, G=Total 1-3/2007 A B C D E F G Beginning 3.9 4.6 0.0 0.0 14.4 - 23.0 Income for the period 0.3 0.3 Other changes -0.0 0.0 0.0 End 3.9 4.6 0.0 0.1 14.4 0.3 23.3 1-3/2006 A B C D E F G Beginning 3.9 4.2 0.1 0.1 14.9 - 23.1 Income for the period 0.8 0.8 Other changes -0.0 0.0 0.0 End 3.9 4.2 0.0 0.1 14.9 0.8 24.0 1-12/2006 A B C D E F G Beginning 3.9 4.2 0.1 0.1 14.9 - 23.1 Shares subscribed with option-rights 0.0 0.3 0.4 Dividend payment -0.8 -0.8 Income for the period 0.3 0.3 Transfer of treasury shares 0.0 0.0 0.0 Other changes -0.1 -0.0 0.0 End 3.9 4.6 0.0 0.0 14.1 0.3 23.0 FUNDS STATEMENT 1-3/07 1-3/06 1-12/06 Cash flow from operations Income for the period 0.3 0.8 0.3 Adjustments: -Depreciation 1.8 1.5 6.6 -Financial income and expenses 0.4 0.1 1.1 -Taxes 0.1 0.3 0.1 -Other adjustments -0.0 -0.1 0.0 Change in working capital -4.0 -0.3 0.2 Interests paid -0.4 -0.3 -1.5 Interests received 0.1 0.0 0.0 Taxes paid -0.1 -0.0 -0.3 NET CASH FLOW FROM OPERATIONS -1.7 2.2 6.5 NET CASH FLOW FROM INVESTMENTS -1.2 -1.5 -9.8 Cash flow from financing Loans withdrawn 2.7 1.0 11.6 Loans repaid -1.2 -0.6 -2.8 Increase in equity 0.0 0.0 0.4 Sale of treasury shares 0.0 0.0 0.0 Payment of leasing debts -0.7 -0.6 -3.0 Dividends paid 0.0 0.0 -0.8 NET CASH FLOW FROM FINANCING 0.7 -0.3 5.5 CHANGE IN LIQUID FUNDS -2.2 0.3 2.2 Liquid funds, beginning of period 2.7 0.6 0.6 Liquid funds, end of period 0.6 0.9 2.7 CONTINGENT COMMITMENTS (Meur) 03/07 03/06 12/06 For own debt: Mortgages on real estate 0.5 0.5 0.5 Corporate mortgages 9.4 9.4 9.4 Other own commitments: Leasing commitments 0.9 0.8 0.8 Rental commitments 0.0 0.3 0.0 Repurchase commitments 0.7 0.3 0.7 INCOME STATEMENT BY QUARTER 1-3 10-12 7-9 4-6 1-3 2007 2006 2006 2006 2006 NET SALES 30.3 30.8 22.5 26.0 25.1 Change in finished goods and inventories -0.3 0.6 0.5 0.8 0.4 Other operating income 0.0 0.0 0.1 0.1 0.1 Materials and services -18.7 -20.0 -14.5 -16.4 -15.0 Personnel expenses -5.8 -5.9 -4.8 -5.4 -5.1 Depreciation -1.8 -1.7 -1.8 -1.6 -1.5 Other operating expenses -2.9 -3.4 -2.7 -3.2 -2.7 OPERATING PROFIT 0.9 0.4 -0.6 0.5 1.3 Financial expenses (net) -0.4 -0.2 -0.6 -0.2 -0.1 PROFIT/LOSS BEFORE TAXES 0.5 0.2 -1.2 0.2 1.2 Income taxes -0.1 0.0 0.3 -0.1 -0.3 PROFIT/LOSS FOR THE PERIOD 0.3 0.2 -0.9 0.1 0.8 EARNINGS PER SHARE, euros 0.09 0.06 -0.24 0.03 0.22 EARNINGS PER SHARE, diluted 0.09 0.06 -0.23 0.03 0.21 KEY RATIOS 3/2007 3/2006 12/2006 Net sales, Meur 30.3 25.1 104.4 Operating profit, Meur 0.9 1.3 1.5 % of net sales 2.9 5.1 1.4 Profit before taxes, Meur 0.5 1.2 0.4 % of net sales 1.6 4.6 0.4 Equity/share, euros 5.97 6.22 5.88 Equity/assets ratio, % 28.8 33.6 28.4 Return on equity, % p.a. 6.0 14.2 1.2 Return on investment, % p.a. 6.3 10.9 3.3 Gross investment, Meur 1.1 1.9 5.9 Personnel, average 493 450 467 Personnel, end of period 499 451 489 OTHER DATA Order book, Meur 27.8 17.8 26.8 Shares, 1,000, average 3,909 3,857 3,860 Shares, 1,000, diluted, average 4,024 4,014 4,014 Shares, 1,000, end of period 3,909 3,860 3,909 Treasury shares are excluded from the total number of shares. (The figures are unaudited) FINANCIAL DISCLOSURE The Interim Report for January-June will be published on July 17 2007. Järvenpää, April 26 2007 ROCLA OYJ Board of Directors Jussi Muikku President and CEO For additional information, contact: Jussi Muikku, President and CEO, phone +358 20 778 1370 Hilkka Webb, CFO, phone +358 20 778 1316 Distribution: Helsinki Exchanges, The Main media |
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