Componenta - Interim report (Q1 and Q3)

Componenta Interim Report 1 January - 30 June 2015: Operating profit fell from previous year, restructuring proceeds as planned

Componenta Corporation  Stock Exchange Release 15.7.2015 at 14.45

January - June 2015 in brief

  -- The Group's order book at the beginning of July was 2% higher than in the
     previous year, standing at MEUR 97 (MEUR 95).
  -- Net sales in the review period were at a similar level as in the previous
     year, standing at MEUR 265 (MEUR 265).
  -- EBITDA excluding one-time items and exchange rate differences of balance
     sheet items declined from the previous year to MEUR 18.9 (MEUR 24.7).
     EBITDA was significantly impacted by Turkish lira and local wage inflation,
     MEUR -5, strikes in Turkish automotive industry, MEUR -2, and problems
     arising from the change of the resource planning system at Främmestad, MEUR
     -2. In addition, loss of Dutch operations increased MEUR 1 from previous
     year. The efficiency improvement program had a positive impact of MEUR 4 on
     EBITDA.
  -- Operating profit excluding one-time items and exchange rate differences of
     balance sheet items (“profit on business operations”) declined from the
     previous year to MEUR 9.7 (MEUR 15.3).
  -- The result after financial items excluding one-time items and exchange rate
     differences of operative balance sheet items was MEUR -1.8 (MEUR 0.8).
  -- One-time items and exchange rate differences of operative balance sheet
     items that had an impact on the result after financial items for the review
     period totalled MEUR 0.4 (MEUR -3.3).
  -- The result for the review period was MEUR -1.6 (MEUR -2.1) and basic
     earnings per share were EUR    -0.02 (EUR -0.16).
  -- New orders received during the review period totalled MEUR 52.7

April - June 2015 in brief

  -- Net sales were at a similar level as in the previous year, standing at MEUR
     132 (MEUR 133).
  -- EBITDA excluding one-time items and exchange rate differences of balance
     sheet items was MEUR 8.6 (MEUR 12.6). EBITDA was significantly impacted by
     wage inflation in Turkey, MEUR -1.5, strikes in Turkish automotive industry
     MEUR -2, and problems arising from the change of the resource planning
     system at Främmestad, MEUR -2. In addition, loss of Dutch operations
     increased MEUR 0.5 from previous year. The efficiency improvement program
     had a positive impact of MEUR 2 on EBITDA.
  -- Operating profit excluding one-time items and exchange rate differences of
     balance sheet items was MEUR 3.9 (MEUR 7.9).
  -- The result after financial items excluding one-time items and exchange rate
     differences of operative balance sheet items was MEUR -2.3 (MEUR 0.9).
  -- One-time items and exchange rate differences of operative balance sheet
     items that had an impact on the result for the April - June period totalled
     MEUR 1.8 (MEUR -2.4).
  -- The result for the April - June period was MEUR 0.1 (MEUR -0.8) and basic
     earnings per share were EUR 0.00 (EUR -0.07).

Componenta's guidance for 2015 unchanged

The prospects for Componenta in 2015 are based on general external economic
indicators, delivery forecasts given by customers, and on Componenta's order
intake and order book. 

Componenta's order book at the beginning of July stood at MEUR 97 (MEUR 95).
Componenta expects the 2015 operating profit excluding one-time items and
exchange rate differences of operative balance sheet items to improve from the
previous year, as a result of the efficiency improvement program being carried
out. 

President and CEO Heikki Lehtonen comments on the review period and events
after end of period: 

“For Componenta, the second quarter of 2015 did not go in every aspect
according to expectations. The order book increased 2% from the previous year
to EUR 97 million. Net sales remained the same compared to the previous year,
standing at EUR 132 million, but the operating profit fell clearly short of the
previous year's figure. Strikes in Turkish automotive industry combined with
local wage inflation and cost based on solving the problems arising from the
change of the resource planning system at Främmestad negatively impacted
operating profit more than EUR 5 million. These problems burdened the result of
the second quarter have mainly been solved and they are not expected to have
material impact during the second half of the year. 

During the review period Componenta signed a contract to supply aluminium
components with a value of more than EUR 100 million to the European market,
and to safeguard these deliveries Componenta is building a new aluminium
foundry in Manisa in Turkey. To secure the construction of the new foundry and
to ensure the company has sufficient working capital, Componenta's subsidiary
Componenta Dökümcülük A.S. signed a new EUR 30 million long-term credit
facility agreement with Turkish banks in June. 

Componenta has on 14 July 2015 agreed to start cooperation on sales and
production of large furan castings with Belgian company Ferromatrix NV.
Ferromatrix belongs to Van de Wiele Group, a worldwide leader in carpet and
textile machines, and has a highly automated furan foundry in Kortrijk in
Belgium, where Componenta is transferring the furan casting production of
Componenta's Heerlen foundry by the end of 2015. Componenta will be responsible
for sales of furan castings and customer cooperation from the beginning of 2016
through a joint venture that is to be set up. It is planned to carry out the
agreed changes in the ownership of the sales company to be set up now and of
production company Ferromatrix NV in 2017. 

In consequence of starting this cooperation, the furan line at the Heerlen
foundry in the Netherlands will be closed down by the end of 2015. The
greensand line at the Weert foundry in the Netherlands is down by the end of
2016. As a consequence of these actions, the operating profit of Dutch
operations is expected to improve annually EUR 6 million. Write-downs and
one-time items are estimated to total EUR 12 million. 

At the same time the Group is improving efficiency in its DISA production at
the Orhangazi foundry in Turkey, where two smaller DISA lines will be replaced
by a single efficient, modernized DISA line transferred from the Pietarsaari
foundry that was closed down in 2014. This is expected to improve operating
profit annually EUR 1 million. Related investments amount to EUR 1.5 million. 

The measures to concentrate production in larger units and more efficient
production plants will improve capacity utilization in production, reduce costs
and at the same time improve Componenta's competitiveness and profitability.
The measures taken are part of the Group's efficiency improvement program that
began in 2012 but which did not in all respects made progress according to plan
during the second quarter. The Group has already carried out measures
accounting for EUR 38 million of the targeted savings in the program. EUR 31
million of these savings had a visible impact by the end of the second quarter.
Finalizing the efficiency improvement program will decrease costs corresponding
to the amount of more than EUR 14 million in total, and half of that is
estimated to be achieved by the end of this year and rest during the next
year.” 

Key figures

                                           Q1-Q2  Q1-Q2  Change   2014   Rolling
                                            2015   2014                   12 mth
--------------------------------------------------------------------------------
Order book, MEUR                            96.8   94.8      2%   88.9      96.8
--------------------------------------------------------------------------------
Net sales, MEUR                              265    265      0%    495       496
--------------------------------------------------------------------------------
EBITDA*), MEUR                              18.9   24.7    -23%   35.8      30.0
--------------------------------------------------------------------------------
Operating profit*), MEUR                     9.7   15.3    -37%   17.8      12.2
--------------------------------------------------------------------------------
Operating profit*), %                        3.6    5.8     n/m    3.6       2.5
--------------------------------------------------------------------------------
Result after financial items *), MEUR       -1.8    0.8     n/m   -9.5     -12.1
--------------------------------------------------------------------------------
One-time items and exchange rate             0.4   -3.3     n/m  -19.2     -15.4
 differences of operative balance sheet                                         
 items, MEUR                              
--------------------------------------------------------------------------------
Taxes, MEUR                                 -0.2    0.4     n/m    0.2      -0.5
--------------------------------------------------------------------------------
Net result for the review period, MEUR      -1.6   -2.1    -25%  -28.6     -28.0
--------------------------------------------------------------------------------
Earnings per share, EUR                    -0.02  -0.16    -85%  -0.63     -0.35
--------------------------------------------------------------------------------
Net gearing, %                               207    282    -27%    194       203
--------------------------------------------------------------------------------
Return on investment*), %                    5.8    9.7    -41%    5.6       3.7
--------------------------------------------------------------------------------
Return on equity*), %                       -6.5    1.7     n/m  -12.1     -16.2
--------------------------------------------------------------------------------
Number of personnel at period end, incl.   4,320  4,523     -4%  4,238     4,320
 leased personnel                                                               
--------------------------------------------------------------------------------

*) Excluding one-time items and exchange rate differences of operative balance
sheet items 

News conference

Due to the summer holiday season Componenta is not arranging a separate news
conference or webcast regarding the Interim Report 1 January - 30 June 2015.
The slide presentation related to the interim report is available on the
company's website www.componenta.com. 

Helsinki, 15 July 2015

COMPONENTA CORPORATION


Heikki Lehtonen
President and CEO



For further information, please contact:

Heikki Lehtonen
President and CEO
tel. +358 10 403 2200

Mika Hassinen
CFO
tel. +358 10 403 2723





Componenta is a metal sector company with international operations and
production plants located in Finland, Turkey, the Netherlands and Sweden. The
net sales of Componenta were EUR 495 million in 2014 and its share is listed on
Nasdaq Helsinki. The Group employs approx. 4,250 people. Componenta specializes
in supplying cast and machined components and total solutions made of them to
its global customers, who are manufacturers of vehicles, machines and
equipment.

Attachments:

Componenta Q2 2015 Interim Report.pdf