2014-02-13 10:30:00 CET
2014-02-13 10:30:38 CET
REGULATED INFORMATION
Okmetic Oyj - Financial Statement Release
Okmetic Oyj: FINANCIAL STATEMENTS FOR 1 JANUARY - 31 DECEMBER 2013: STRONG CASH FLOW IN A CHALLENGING MARKET SITUATION
OKMETIC OYJ FINANCIAL STATEMENTS RELEASE 13 FEBRUARY 2014 AT 11.30 A.M.
FINANCIAL STATEMENTS FOR 1 JANUARY - 31 DECEMBER 2013: STRONG CASH FLOW IN A
CHALLENGING MARKET SITUATION
Unless otherwise stated, figures in parenthesis refer to the corresponding
period in the previous year.
OCTOBER-DECEMBER IN BRIEF:
* Net sales amounted to 16.8 (20.7) million euro, down 18.6%.
* Silicon wafer shipments amounted to 16.2 (18.1) million euro, down 10.5%.
* Operating profit was 0.3 (1.0) million euro corresponding to 1.6% (4.9%) of
net sales.
* Profit for the period was 0.4 (0.2) million euro.
* Basic earnings per share was 0.03 (0.01) euro.
* Net cash flow from operations amounted to 4.9 (3.6) million euro.
JANUARY-DECEMBER IN BRIEF:
* Net sales amounted to 68.5 (83.1) million euro, down 17.5%.
* Net sales of silicon wafers amounted to 66.1 (70.9) million euro, down 6.7%.
* Operating profit was 5.0 (8.0) million euro corresponding to 7.3% (9.7%) of
net sales.
* Profit for the period was 3.8 (5.1) million euro.
* Basic earnings per share was 0.23 (0.31) euro.
* Net cash flow from operations amounted to 9.7 (9.4) million euro.
* The Board of directors does not propose a dividend to be distributed for the
financial year 2013 to the annual general meeting (stock exchange release on
27 November 2013).
* In December 2013, the company distributed an additional dividend of 0.19
euro per share as well as a capital repayment of 0.07 euro per share.
The financial statement figures presented in this report are derived from the
audited financial statements of the company.
SHORT-TERM OUTLOOK
In 2014, the demand for semiconductors is expected to continue on its growth
track, which started in the second half of 2013. Volume growth is also expected
for the silicon wafer market in 2014, but the average price level of wafers is
expected to further decline.
Demand for Okmetic's sensor wafers is estimated to grow from the previous year,
and the sales and price level of sensor wafers are expected to be fairly stable
throughout the year. Prices of semiconductor wafers are hit by the weakened
Japanese yen. The demand is expected to pick up compared to 2013.
In accordance with normal seasonal fluctuation, the demand for semiconductor
wafers is strongest in the second and third quarters of the year. Other business
sales are not expected to materially differ from the low level of 2013.
In 2014, net sales and operating profit are estimated to exceed the level of
year 2013.
PRESIDENT KAI SEIKKU:"In the challenging market conditions of year 2013, Okmetic's business
operations remained well in control, even though the long-term operating profit
target of 10% was not met. Fixed costs were adjusted by approximately 10
percent. Considerable cost savings were achieved in productivity and yield. Due
to released working capital, cash flow from operations was strong towards the
year-end. Changes in valuation practices and non-recurring items reduced
operating profit in the second half of the year, particularly in the last
quarter.
Market situation continued to be challenging. The average market prices in the
silicon wafer industry, which have been declining since 2011, decreased by more
than 10 percent per year for the second year in a row. The declined price level
in the solar cell industry did not enable profitable growing of solar crystals,
which cut net sales expectedly by nearly EUR 10 million.
Sales of sensor wafers, which are key to the company's strategy, continued to
grow, and the growth is expected to accelerate in the upcoming years. Sensor
wafers already accounted for approximately 60 percent of Okmetic's net sales.
The price and margin level of these advanced wafers are clearly higher and more
stable than those of other silicon wafers. Therefore, growth in the sales of
sensor wafers will improve the company's profitability. In its core business as
a manufacturer of silicon wafers, Okmetic outperformed the overall market
development in 2012-2013: the company's silicon wafer business decreased by 5.5
percent during the period, whereas the market plummeted by an average of 24
percent (in US dollars).
Other business was at a very low level, as forecasted at the beginning of the
year. The long-term polysilicon purchase agreements will burden the company's
working capital until the end of 2015. In terms of other items, working capital
was effectively released in the second half of the year.
In the upcoming years, growth in the demand for Okmetic's sensor and
semiconductor wafers will be focused on 200 millimeter wafers. This means that
the company's own and subcontracted production capacity will gradually move to
larger wafer size. In crystal growing and in sensor wafer production,
particularly in SOI wafers, there are several interesting product development
projects for future applications ongoing. These projects are carried out in
cooperation with our key customers.
Among the geographical market areas, Europe was by far in the best shape. There
is plenty of sensor manufacturing industry important for Okmetic in Europe.
Sales in Asia and Japan decreased clearly due to the economic cycle and exchange
rates, but also due to weakened technology sales to Asia.
Okmetic's business operations are going through a structural change in which
sensor wafer sales are growing fairly steadily throughout economic cycles. The
role of technology business, which generated considerable growth and
profitability for approximately ten years, seems to be smaller in the future.New products developed for silicon wafers used in manufacturing of single and
power semiconductors are expected to bring Okmetic back to a growth path."
KEY FIGURES
1,000 euro 1 Oct- 1 Oct- 1 Jan- 1 Jan- 1 Jan-
31 Dec, 31 Dec, 31 Dec, 31 Dec, 31 Dec,
2013 2012 2013 2012 2011
Net sales 16,837 20,685 68,516 83,074 83,186
Operating
profit
before
depreciation
(EBITDA) 1,881 2,409 10,905 13,864 18,069
Operating
profit 263 1,007 5,031 8,018 11,817
% of net sales 1.6 4.9 7.3 9.7 14.2
Profit for
the period 447 211 3,842 5,089 10,235
Basic earnings
per share,
euro 0.03 0.01 0.23 0.31 0.61
Net cash flow
from operating
activities 4,915 3,565 9,726 9,425 11,691
Net interest-
bearing
liabilities 6,530 -1,688 6,530 -1,688 -10,257
Equity ratio, % 68.2 72.2 68.2 72.2 78.9
Average number
of personnel
during the period 355 364 363 368 363
MARKETS
Sensor industry
According to different estimates, the sales value of sensor industry increased
by 6-12 percent in 2013 compared to the previous year. The increasing use of
micro sensors in many consumer electronics products has accelerated sensor sales
growth. In 2014, the sales value of sensor industry is estimated to grow by
8-11 percent, and annual growth of 8-13 percent is forecasted for the next few
years. In terms of volume, sensor shipments are likely to clearly rise to a new
record in 2014. (IHS, Yole)
Certain silicon-based microelectromechanical (MEMS) products within the sensor
segment have higher sales growth than the others. The shipment volumes of
silicon-based microphones experienced particularly strong growth in 2013 (IHS).
Also, the demand for pressure sensors, accelerometers, gyroscopes, and
micromechanical filters increased. Silicon-on-insulator (SOI) technology is
increasingly used in the manufacture of these products, among others. Okmetic is
a pioneering supplier of SOI wafers for the sensor industry.
Semiconductor industry
The global semiconductor industry's sales in US dollars continued to grow in the
last quarter of 2013. Sales in October-December exceeded those of the
corresponding period in 2012 by seven percent (SIA). Annual sales in 2013
reached a new record. The estimates settle between 304 - 318 billion US dollars,
corresponding to an annual growth of 4.4-4.9 percent (WSTS, SIA, IHS, Cowan
LRA).
Semiconductor industry is estimated to continue on a clear growth track. The
market is forecasted to grow 5-8 percent in 2014, and the growth is anticipated
to continue in 2015 (WSTS, Gartner, IHS, IC Insights). In particular, portable
wireless applications play a key role in the growth of semiconductors. For the
market that is key to Okmetic, semiconductors for wireless applications and
automotive electronics, among others, the outlook is more positive than the
market average (WSTS).
Silicon wafer market
According to the estimate published by SMG, the group of silicon wafer suppliers
in SEMI (a global umbrella organisation for semiconductor materials and
equipment industry), the surface area of silicon wafer shipments grew 0.4
percent in 2013. In the fourth quarter, shipments were 5.7% lower than in the
third quarter, but 2.2% higher than in the fourth quarter of 2012 (in surface
area). In years 2014-2016, surface area is estimated to grow around 6 percent
annually (Infiniti Research, SEMI).
Total value of the silicon wafer market in US dollars decreased by 13 percent in
2013 (SMG) due to declined average sales prices and weakening of the Japanese
yen.
The key customer areas for Okmetic in the silicon wafer market
In line with its strategy, Okmetic seeks niches in the silicon wafer market,
where growth exceeds market average and in which the company has special
expertise. Okmetic supplies primarily 150mm and 200mm wafers. The sensor/MEMS
industry is a key growth area for Okmetic. MEMS market grows as portable
consumer products, automotive electronics, and industrial process control
increase.
In the semiconductor market, Okmetic's growth areas include wafers for
production of discrete and power semiconductors. In these wafer markets, areas
for growth include, among others, components used in the production of renewable
energy, increasing automotive electronics, portable consumer products, as well
as different solutions related to power supply and efficiency improvement.
SALES
In 2013, Okmetic's net sales decreased by 17.5 percent (down 0.1 %) from the
previous year amounting to 68.5 (83.1) million euro. Other business sales
diminished significantly and amounted to 2.4 (12.3) million euro in year 2013.
Value of sensor wafer shipments grew by 2.5 percent, while shipment value of
semiconductor wafers decreased by 18.4 percent.
Sales per customer area
1 Oct- 1 Oct- 1 Jan- 1 Jan- 1 Jan-
31 Dec, 31 Dec, 31 Dec, 31 Dec, 31 Dec,
2013 2012 2013 2012 2011
Sensors 60% 53% 59% 47% 46%
Semiconductors 35% 34% 37% 38% 35%
Technology 5% 13% 4% 15% 19%
Sensor wafer sales grew in 2013 compared to the previous year. The demand for
sensor wafers was at a good level throughout the whole year. The rise in
production and shipment volumes of the strategically important SOI wafers in the
second half of the year was particularly positive. The use of sensors and their
requirement level are expected to continue growing. Sensor applications are
increasing in the automotive industry, and especially in consumer electronics
products like smartphones, cameras, game consoles, and other mobile devices.
The sales of Okmetic's semiconductor wafers decreased in 2013 in line with the
general market development. The demand was weak in the first quarter, but
improved in the second as well as in third quarter. In the fourth quarter, the
semiconductor wafer sales declined, in line with the normal seasonal
fluctuation. The third quarter was the best in sales, which is typical of the
industry.
Other business sales dropped clearly in 2013 from the level in the previous
year. The declined price level in the solar cell industry did not enable
profitable growing of solar crystals.
Sales per market area
1 Oct- 1 Oct- 1 Jan- 1 Jan- 1 Jan-
31 Dec, 31 Dec, 31 Dec, 31 Dec, 31 Dec,
2013 2012 2013 2012 2011
North America 44% 33% 42% 37% 37%
Europe 42% 30% 40% 27% 30%
Asia 14% 36% 18% 35% 33%
In Europe, Okmetic's sales saw strong growth in 2013, thanks to solid demand for
sensor wafers. North American and Asian sales decreased. The decrease of sales
in Asia was largely due to the drop in Other business sales (earlier, technology
sales formed a significant portion of sales in Asia), but also silicon wafer
sales were weak in Asia.
PROFITABILITY
October-December
In October-December, Okmetic's operating profit was 0.3 (1.0) million euro.
Operating profit accounted for 1.6 (4.9) percent of net sales. Profit for the
period was 0.4 (0.2) million euro. The result for October-December was reduced
by changes in valuation practices and non-recurring items. Basic earnings per
share was 0.03 (0.01) euro. Diluted earnings per share was 0.03 (0.01) euro.
January-December
In January-December, Okmetic's operating profit was 5.0 (8.0) million euro and
accounted for 7.3 (9.7) percent of net sales. Diminished operating profit was
due to lower sales and price level in Other business. Solid demand for sensor
wafers and adjustment of fixed costs softened the impact of declined sales on
operating profit and profitability. Profit for the period was 3.8 (5.1) million
euro.
The reduction in the Finnish corporate tax rate in 2014 decreased the Group's
deferred tax liabilities by 0.5 million euro, which had a positive impact on
profit for the period. The Group's effective tax rate in 2013 was 12.7 percent.
In addition to the reduction in the corporate tax rate in 2014, this was due to
the additional tax depreciations utilized in full on the 2013 machinery and
equipment investments and the additional tax deductions of R&D salary expenses.
Basic earnings per share was 0.23 (0.31) euro. Diluted earnings per share was
0.22 (0.30) euro.
FINANCING
The company's financial situation is solid. In 2013, net cash flow from
operations amounted to 9.7 (9.4) million euro. The net cash generated from
operating activities was especially good in the second half, totalling 8.4 (7.8)
million euro. Cash flow from operations improved by 4.9 million euro in the
second half of the year, as all items under working capital developed
favourably. For the whole year 2013, working capital increased by 2.1 million
euro.
On 31 December 2013, the company's interest-bearing liabilities amounted to
11.7 (5.6) million euro. In January 2013, Okmetic announced that it has signed a
five-year loan agreement for 10 million euro. The loan is used for the earlier
announced investments and general corporate purposes. At the end of the
reporting period, the amount of the loan outstanding was 9 million euro.
At the end of 2013, cash and cash equivalents amounted to 5.2 (7.3) million
euro. On 31 December 2013, the company's cash and cash equivalents totalled 6.5
million euro less than the interest-bearing liabilities (on 31 December 2012,
cash and cash equivalents were 1.7 million euro higher than interest-bearing
liabilities). The group has ensured liquidity with committed credit facilities
of 6.0 million euro. On 31 December 2013, the committed credit facilities were
unused.
Return on equity amounted to 6.4 (8.3) percent. At the end of the year, the
company's equity ratio was 68.2 (72.2) percent. Equity per share was 3.43 (3.72)
euro.
INVESTMENTS
In 2013, Okmetic's capital expenditure amounted to 7.6 (14.3) million euro. The
investments were directed to debottlenecking and automatisation of wafer
production lines as well as expansion of the Vantaa plant. The expansion
increases capacity for SOI and 200mm wafers in Vantaa.
PRODUCT DEVELOPMENT
In 2013, the company expensed 2.8 (2.3) million euro in product development
projects. Product development costs accounted for 4.1 (2.8) percent of net sales
and were not capitalised.
Okmetic's wafer range kept growing in 2013. The company focused, in particular,
on products used in the manufacture of MEMS sensors and power management
circuits by expanding the SOI product family and by improving the capability in
crystal growing to enable growing of crystals with higher and lower resistivity
than earlier. In epi-production, progress was made especially in wafers with a
thick epi layer.
In 2013, Okmetic continued its long-term research of silicon material with
universities and research institutions in Finland and abroad, and participated
in several national and EU-funded technology projects. The company collaborated,
among others, with VTT Technical Research Centre of Finland, Aalto University,
Institute of Microelectronics and Fraunhofer Institute, as well as participated
in member events of sensor and semiconductor associations. In Finland, Okmetic
worked actively in the MemsCat-cluster, in which the company is a founding
member.
PERSONNEL
Competent, motivated and content personnel is a prerequisite for Okmetic's
growth and success. This is described in the values as well as in the human
resources and quality policies of the company.
On average, Okmetic employed 363 (368) people in 2013. At the end of the year,
Okmetic employed 355 (364) people of which 310 worked in Finland, 39 in the US,
five in Japan, and one in Hong Kong.
Women accounted for 26 (26) percent and men 74 (74) percent of the personnel.
White-collar employees accounted for 38 (36) percent and blue-collar employees
for 62 (64) percent of the personnel. The average age of Okmetic's employees was
44 (43) years and the average length of employment was 11.6 (10.9) years.
Throughout the organization, salaries and bonuses are based on the level of
skills required in each position. In 2013, salaries and bonuses amounted to
20.3 (21.4) million euro including 0.2 (0.4) million euro expenses of the share
reward schemes. The group's parent company complies with the collective labour
agreements of the Technology Industries of Finland.
All employee groups at Okmetic are eligible for an incentive scheme. The
possible production bonuses for blue-collar employees are paid monthly according
to the achievement of set targets. White-collar employees are subject to a
profit-sharing scheme, which is based on annual targets set by the Board of
Directors relating to the group's profitability, financial situation, and
operative performance.
ENVIRONMENTAL ISSUES
Okmetic recognises the environmental risks associated with its operations. The
company devises both a universal risk management plan and plans for individual
processes. Ecologically sustainable operations support Okmetic's competitiveness
and profitability.
Measures devised for eliminating environmental risks are integrated to Okmetic's
operational processes. Environmental considerations are factored into the
development of products and operations in line with continuous improvement
principles. Planning of preventive measures is a fundamental part of
environmental risk management.
Okmetic follows the development of environmental legislation both in Finland and
internationally, and adjusts its operations to meet the regulations.
In October 2012, Okmetic submitted an application for the renewal of the Vantaa
plant's environmental permit, as scheduled. The environmental authority approved
the application in June 2013.
Okmetic's environmental programme had two objectives in 2013: saving silicon
material with the new wire saw in production and replacing chromium trioxide in
the laboratory. The first objective was reached, while work with the second
objective continues in 2014.
Okmetic follows the chemical regulations of the European Union (REACH) and all
Okmetic's products meet the requirements set in the RoHS-directive.
Okmetic has ISO 9001:2008, TS 16949:2009, and ISO 14001:2004 certified quality
and environmental systems both at Vantaa and Allen plants. Okmetic expects its
most important subcontractors and suppliers to comply with the ISO 9001 and ISO
14001 certifications.
Okmetic had no major environmental non-conformities in 2013. Okmetic's
environmental management methods were found to match the high requirement level
of international customer companies. The company is not subject to emissions
trading regulations.
The company has assessed its consumption of energy, use of polysilicon, amount
of acid waste as well as consumption of water and chemicals to have a
significant environmental impact. The development of these factors is monitored
regularly.
The key figures related to environmental protection at the Vantaa plant in 2013
are as follows:
Energy consumption (GWh) 2013 2012
Electricity 28.5 31.9
District heating 5.1 2.5
Water consumption (tm3)
Water 590 563
Waste water 496 473
Waste volumes (tn)
Hazardous waste 254 346
Landfill waste 0 0
Recycled waste 368 314
BUSINESS RISKS
There have been no significant changes in the company's near future business
risks and uncertainties.
Okmetic's business is confronted by risks, which can be derived from the
company's operations or changes in its operating environment. The risks that can
have an adverse effect on the company's business and valuation are described
below.
Okmetic's silicon wafer sales are targeted at the sensor and semiconductor
producers in the electronics industry. The demand for semiconductor wafers is
sensitive to economic fluctuations and changes in the market situation can be
sudden and dramatic. The demand for sensor wafers is more stable. The
proliferation of sensors in consumer electronics applications may, however,
increase the susceptibility of this market too to economic fluctuations. Other
business sales have in recent years been mainly sales of solar materials to the
solar cell industry. Okmetic has existing polysilicon purchasing obligations
partly until 2015. Since the price level of the solar cell market has dropped,
the validity of long-term polysilicon contracts typical of the industry may
cause a price risk.
Okmetic's share of the global silicon wafer market is around one percent and the
market prices have a notable effect on the price development of Okmetic's
products. The company has considerable pricing power only with its own special
products. The pricing of other wafers is mainly based on global market price.
Okmetic operates globally, and therefore the company's business is affected by
risks due to exchange rate fluctuations, consisting of the cash flows of
purchases and sales. A significant part of sales are conducted in US dollars.
Despite hedging, the company remains exposed to exchange rate fluctuations.
Substantial volumes of electricity are used in Okmetic's production. Despite
hedging, the company is exposed to fluctuations in the price of electricity.
SHARES AND SHAREHOLDERS
On 31 December 2013, Okmetic Oyj's paid-up share capital, as entered in the
Finnish Trade Register, was 11,821,250.00 euro. The number of shares was
17,287,500. The shares have no nominal value attached. Each share entitles its
holder to one vote at general meetings. The company has one class of shares. The
company's shares are included in the Finnish book-entry securities system.
Major shareholders
on 31 Dec 2013
Shares, Share,
pcs %
Ilmarinen Mutual Pension
Insurance Company 1,549,985 9.0
Oy Ingman Finance Ab 870,000 5.0
Mandatum Life Insurance
Company Limited 800,000 4.6
The State Pension Fund 600,000 3.5
Nordea Nordic Small
Cap Fund 528,810 3.1
Varma Mutual Pension
Insurance Company 477,175 2.8
Etra-Invest Oy Ab 400,000 2.3
Okmetic Management Oy 400,000 2.3
Taaleritehdas Arvo Markka Osake Fund 225,100 1.3
Kaleva Mutual Pension Insurance Company 212,700 1.2
Foreign investors and
nominee accounts held by
custodian banks 2,882,366 16.7
Others 8,341,364 48.3
Total 17,287,500 100.0
Shareholders by group
on 31 Dec 2013
Shares, Share,
pcs %
Corporations 3,374,889 19.5
Financial and insurance
institutions 1,811,506 10.5
Public organisations 2,627,160 15.2
Non-profit organisations 127,540 0.7
Households 6,464,039 37.4
Foreign investors and
nominee accounts held by
custodian banks 2,882,366 16.7
Total 17,287,500 100.0
Distribution of shareholdings
on 31 Dec 2013
% of
Shares, Number of % of Shares, share
pcs shareholders shareholders pcs capital
1-100 1,501 18.0 105,972 0.6
101-500 3,859 46.4 1,130,194 6.5
501-1,000 1,530 18.4 1,251,936 7.2
1,001-5,000 1,217 14.6 2,561,003 14.8
5,001-10,000 105 1.3 766,811 4.4
10,001-50,000 86 1.0 1,885,655 10.9
50,001-100,000 3 0.0 181,903 1.1
100,001-500,000 9 0.1 2,256,120 13.1
500,001- 6 0.1 7,147,906 41.3
Total 8,316 100.0 17,287,500 100.0
SHARE PRICE DEVELOPMENT AND TRADING
A total of 3.4 (3.3) million shares were traded between 1 January and 31
December 2013, representing 19.6 (19.3) percent of the weighted average of share
total of 17.3 (17.3) million during the period. The lowest quotation of the
reporting period was 4.25 (4.21) euro, and the highest 5.66 (6.01) euro, with
the average being 4.92 (5.25) euro. The closing quotation for the period was
4.82 (5.02) euro. At the end of the period, the market capitalisation amounted
to 83.3 (86.8) million euro.
Okmetic is listed on the Small Cap list of NASDAQ OMX Helsinki Ltd. under the
trading code OKM1V. According to the International Classification Benchmark
(ICB) of the exchange, Okmetic Oyj is listed under the Technology Industry.
DIVIDENDS PAID
In April 2013, the company distributed a dividend of 4.3 million euro for the
year 2012 (including dividends distributed to Okmetic Management Oy, a total of
0.1 million euro). The dividend was 0.25 euro per share.
In December 2013, the company distributed an additional dividend of 3.2 million
euro (including dividends distributed to Okmetic Management Oy, a total of 0.1
million euro). The dividend was 0.19 euro per share.
In April 2012, the company distributed a dividend of 4.8 million euro of the
profit accrued in 2011 (including the 0.1 million euro dividend paid for Okmetic
Management Oy). The dividend was 0.28 euro per share.
AUTHORISATION OF THE BOARD OF DIRECTORS TO DECIDE ON THE REPURCHASE AND/OR
ACCEPTANCE AS PLEDGE OF THE COMPANY'S OWN SHARES
On 10 April 2013, the annual general meeting authorised the Board of directors
to decide on the repurchase and/or acceptance as pledge of the company's own
shares in one or more tranches. The aggregate number of shares repurchased
and/or accepted as pledge shall not exceed 1,728,750 shares, which represents
approximately 10 percent of all the shares of the company. The company and its
subsidiaries together cannot at any time own and/or hold as pledge more than 10
percent of all the company's registered shares.
Only unrestricted equity can be used to repurchase the company's own shares
under the authorisation. Own shares can be repurchased at a price determined by
public trading on the day of repurchase or at another market-based price.
The Board of directors decides on the method of repurchasing and/or accepting as
pledge of the company's own shares as well as the other terms and conditions.
Shares can be repurchased otherwise than in the shareholders' proportional
holding of shares (directed repurchase). The authorisation cancels the
authorisation given by the annual general meeting on 12 April 2012 to the board
of directors to decide on the repurchase and/or acceptance as a pledge of the
company's own shares. The authorisation is effective until the next annual
general meeting, however, no longer than until 10 October 2014.
AUTHORISATION OF THE BOARD OF DIRECTORS TO DECIDE ON THE ISSUANCE OF SHARES, THE
TRANSFER OF THE COMPANY'S OWN SHARES AS WELL AS THE ISSUANCE OF SPECIAL RIGHTS
ENTITLING TO SHARES
On 10 April 2013, the annual general meeting authorised the Board of directors
to decide on the issuance of shares, the transfer of the company's own shares,
and the issuance of special rights entitling to shares according to Chapter 10,
Section 1 of the Finnish Companies Act in one or more tranches. The aggregate
number of shares issued or transferred on the basis of the authorisation may not
exceed 5,200,000 shares.
The Board of directors decides on all the terms and conditions of the issuance
of shares, the transfer of the company's own shares, and the issuance of special
rights entitling to shares according to Chapter 10, Section 1 of the Finnish
Companies Act. The authorisation concerns both the issuance of new shares as
well as the transfer of the company's own shares. The issuance of shares, the
transfer of the company's own shares, and the issuance of special rights
entitling to shares according to Chapter 10, Section 1 of the Finnish Companies
Act may be carried out in deviation from the shareholders' pre-emptive rights
(directed issue).
The authorisation cancels the authorisation given by the annual general meeting
on 12 April 2012 to the Board of directors to decide on the issuance of shares,
the transfer of the company's own shares as well as the issuance of special
rights entitling to shares. The authorisation is effective until the next annual
general meeting, however, no longer than until 10 October 2014.
Board of directors decided on 17 December 2013 to grant stock options to the key
managers of Okmetic. The conditions of the stock option programme are presented
below under the title Stock option plans.
OWN SHARES AND DIRECTED SHARE ISSUES
On 12 February 2013, Okmetic's Board of Directors decided on a transfer of
18,540 own shares held by the company, as a part of the company's share-based
incentive scheme for the executive management group, of which the company has
given a stock exchange release on 18 February 2012. All the shares were issued
to the members of the executive management group in deviation from the
shareholders' pre-emptive rights (directed share issue). The rewards of the
share reward programme were paid in Okmetic shares and in a monetary amount
covering taxes.
In line with the decision of the annual general meeting, Okmetic Oyj transferred
a total of 15,283 shares to the Board members as payment of the annual
remuneration on 10 May 2013.
At the end of the year, the company held a total of 194,123 (227,946) own
shares, which is approximately 1.1 (1.3) percent of Okmetic's all shares and
votes.
OTHER EVENTS DURING THE FINANCIAL YEAR
Okmetic's board of directors decided on 11 February 2013 on the share reward
program for the Executive management group for 2013 as a part of the company's
incentive and commitment plan. The purpose of the program is to commit and
encourage the Executive management group to grow the shareholder value in the
long run. The possible rewards of the share reward program will be paid in
Okmetic shares and in a monetary amount covering taxes in accordance with
reaching the set targets. The amount of the rewards corresponds to a maximum of
150,000 shares. In addition, a monetary amount covering taxes will be paid.
On 27 November 2013, Atte Haapalinna, D. Sc. (Tech.), was appointed member of
the Executive management group, customer support and new business development as
areas of responsibility. Haapalinna assumed the role on 1 January 2014. He has
worked for Okmetic since 1998 in several positions.
Senior Vice President, Research, Okmetic Fellow Markku Tilli left the Executive
management group on 31 December 2013. Tilli continues in his role as head of
research at Okmetic.
Under the authorisation given by the annual general meeting, the Board of
Directors decided on 27 November 2013 to distribute an additional dividend of
0.19 euro per share (3,247,741.63 euro in total). The dividend was paid on 10
December 2013. No dividend was paid for Okmetic's own shares.
The extraordinary general meeting of Okmetic Oyj gathered on 19 December 2013.
The general meeting decided, in accordance with the proposal of the Board of
Directors, to distribute 0.07 euro per share to shareholders as a capital
repayment from the invested unrestricted equity reserve. The payment was made on
31 December 2013. No repayment was made for shares held by Okmetic.
EVENTS AFTER THE END OF THE FINANCIAL YEAR
On 15 January 2014, the Board of Directors decided to dissolve the ownership
arrangement of Okmetic Management Oy, owned by President Kai Seikku and Deputy
to the President Mikko Montonen, with an arrangement in which Okmetic Oyj
acquired the entire share capital of Okmetic Management Oy. Also 400,000 shares
of Okmetic Oyj were transferred to the group via Okmetic Management Oy, as well
as a loan receivable of Okmetic Oyj from Okmetic Management Oy. There were no
shareholders of Okmetic Management Oy in the Board of Directors of Okmetic Oyj.
The value of the arrangement for the part of shares owned by Okmetic Management
Oy was determined using the average trading price weighted by trading volume of
the company's share in NASDAQ OMX Helsinki Oy on 16 January 2014, 4.9969 euro.
In a directed share issue on 16 January 2014, Okmetic Oyj transferred a total of
150,000 own shares held by the company to President Kai Seikku (140,000 shares)
and Deputy to the President Mikko Montonen (10,000 shares). Subscription price
per share was determined using the average trading price of the company's share
weighted by trading volume in NASDAQ OMX Helsinki Oy on 16 January 2014, which
was 4.9969 euro. Total value of the deal was 749,535 euro. The decision to
transfer company's own shares is based on authorization of the Board of
Directors given by the annual general meeting on 10 April 2013.
NOTIFICATION OF CHANGES IN HOLDINGS
Holding of Oy Ingman Finance Ab (Trade Register number 2241895-0) in Okmetic
rose to 5.03 percent of the company's shares and votes on 12 March 2013.
STOCK OPTION PLANS
Okmetic Board of Directors decided on 17 December 2013 to grant stock options to
the key managers of Okmetic. As a precondition for being eligible to receive the
stock options, the key managers are required to invest in Okmetic shares.
According to the investment requirement, the key managers are required to hold
in the aggregate 262,600 Okmetic shares to be eligible to receive all of the
stock options.
The maximum total number of stock options offered is 870,000, which entitle
participants to subscribe for a maximum number of 870,000 Okmetic shares (4.8%
of the company's shares on a fully diluted basis). Each stock option entitles
participants to subscribe for one share. The shares subscribed with the stock
options may either be new shares issued by the company or existing shares held
by the company. Of the stock options, 320,000 shall be marked with the symbol
2013 A and 550,000 with the symbol 2013 B. The stock options shall be issued
free of charge.
The share subscription price for the stock options 2013 A shall be euro 5.75 and
for the stock options 2013 B euro 6.00. Future dividends and capital repayments
from the invested unrestricted equity reserve distributed before the share
subscription shall be deducted from the share subscription price.
The share subscription period for 25 percent of the stock options 2013 A and
2013 B will commence on or about February 1, 2016 and for 75 percent of the
stock options 2013 A and 2013 B on or about February 1, 2017. The share
subscription period for all the stock options ends on March 31, 2018.
The stock options are intended to align the interests of the shareholders and
the key managers and to form a part of the incentive and commitment program of
the key managers. The purpose of the arrangement is to encourage the key
managers to invest in the company's shares and to work on a long-term basis to
increase the company's share value. The deliberation period for the selected key
executives concerning participation in the option plan will expire in the end of
February 2014.
No costs of the stock option plan are recorded in the financial statements for
year 2013.
MANAGEMENT AND AUDITOR
In 2013, Okmetic's Board of Directors comprised Henri Österlund as the chairman,
Tapani Järvinen as the vice chairman, and members of the Board Hannu Martola,
Mervi Paulasto-Kröckel and Mikko Puolakka.
Kai Seikku acts as President of Okmetic Oyj and Mikko Montonen, Executive Vice
President, Customers and Markets as Deputy to the President.
In addition to the president, the group's Executive management group includes
Mikko Montonen, Executive Vice President, Customers and Markets and Deputy to
the President; Petri Antola, Senior Vice President, Technology Projects and
Solar Materials; Juha Jaatinen, Senior Vice President, Finance, IT, and
Communications; Jaakko Montonen, Senior Vice President, Supply Chain; Markus
Virtanen, Senior Vice President, Human Resources, Quality, and Environment; and
Anna-Riikka Vuorikari-Antikainen, Senior Vice President, Products. Head of
Research Markku Tilli was a member of the Executive management group until 31
December 2013.
The company's auditor is PricewaterhouseCoopers Oy, Authorised Public
Accountants, with Mikko Nieminen, Authorised Public Accountant, acting as the
principal auditor.
THE BOARD OF DIRECTORS' PROPOSAL REGARDING THE USE OF DISTRIBUTABLE FUNDS
According to the financial statements dated on 31 December 2013, the parent
company's distributable earnings amount to 17,969,052.99 euro. No significant
changes have taken place in the company's financial position after the end of
the financial year.
The Board of Directors of Okmetic Oyj has decided to propose to the annual
general meeting that no dividend shall be paid for the financial year 2013 and
that the loss of the parent company for the financial year, -208,387.78 euro,
shall be recorded to the company's retained earnings.
CONDENSED FINANCIAL STATEMENTS AND TABLES 1 JANUARY - 31 DECEMBER 2013
ACCOUNTING POLICIES
This financial statements release has been prepared in accordance with IAS 34,
Interim Financial Reporting.
In preparing this financial statements release, Okmetic has followed the same
accounting policies as in the financial statements for 2012 except for the
effect of changes required by the adoption of the new or revised IFRS standards
and IFRIC interpretations as of 1 January 2013. The adoption of the
aforementioned standards and interpretations has not had an effect on the
figures presented from the reporting period.
The financial statements presented in this report are derived from the audited
financial statements of the company. The Auditor's report has been given on
February 13, 2014.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
1,000 euro 1 Oct- 1 Oct- 1 Jan- 1 Jan-
31 Dec, 31 Dec, 31 Dec, 31 Dec,
2013 2012 2013 2012
Net sales 16,837 20,685 68,516 83,074
Cost of sales -14,382 -17,017 -54,918 -65,995
Gross profit 2,455 3,668 13,598 17,079
Other income
and expenses -2,191 -2,661 -8,567 -9,061
Operating 263 1,007 5,031 8,018
profit
Financial
income and
expenses -231 -245 -630 -418
Profit before
tax 32 762 4,401 7,600
Income tax 415 -550 -559 -2,510
Profit for
the period 447 211 3,842 5,089
Other
comprehensive
income:
Items that may be reclassified to profit or
loss in subsequent periods
Cash flow
hedges
-41 8 -58 128
Translation
differences -33 458 -60 76
Other
comprehensive
income for the
period, net of
tax -74 467 -118 204
Total
comprehensive
income for
the period 373 678 3,724 5,293
Profit for the
period
attributable
to:
Equity holders
of the parent
company 447 211 3,842 5,089
Total
comprehensive
income
attributable
to:
Equity holders
of the parent
company 373 678 3 724 5 293
Basic earnings
per share,
euro 0.03 0.01 0.23 0.31
Diluted
earnings per
share, euro 0.03 0.01 0.22 0.30
CONDENSED CONSOLIDATED BALANCE SHEET
1,000 euro 31 Dec, 31 Dec,
2013 2012
Assets
Non-current assets
Property, plant and
equipment 45,295 43,433
Intangible assets 897 636
Other receivables 1,419 3,089
Total non-current
assets 47,611 47,159
Current assets
Inventories 16,634 13,526
Receivables 14,572 17,796
Cash and cash
equivalents 5,214 7,288
Total current
assets 36,420 38,610
Total assets 84,031 85,769
Equity and liabilities
Equity
Equity attributable
to equity holders of
the parent company
Share capital 11,821 11,821
Other equity 45,451 50,038
Total equity 57,273 61,860
Liabilities
Non-current
liabilities 10,533 5,314
Current liabilities 16,226 18,595
Total liabilities 26,759 23,909
Total equity and
liabilities 84,031 85,769
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
1,000 euro 1 Jan- 1 Jan-
31 Dec, 31 Dec,
2013 2012
Cash flows from operating
activities:
Profit before tax 4,401 7,600
Adjustments 6,566 6,482
Change in working capital -2,091 -1,124
Financial items -126 -47
Tax paid 976 -3,486
Net cash from
operating activities 9,726 9,425
Cash flows from investing
activities:
Purchases of property,
plant and equipment -9,089 -10,983
Net cash used in
investing activities -9,089 -10,983
Cash flows from financing
activities:
Proceeds from long-term
borrowings 10,000 -
Proceeds from short-
term borrowings 1,024 3,043
Payments of long-term
borrowings -1,000 -
Payments of short-term
borrowings -4,043 -
Payments of finance
lease liabilities -478 -264
Other items 10 10
Dividends paid -6,763 -4,862
Capital repayment -1,169 -
Net cash used in
financing activities
-2,419 -2,072
Increase (+) /
decrease (-) in cash
and cash equivalents -1,782 -3,631
Exchange rate changes -292 -338
Cash and cash
equivalents at
the beginning
of the period 7,288 11,257
Cash and cash
equivalents at
the end of the
period 5,214 7,288
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to equity holders of parent company
Share Share Reserve Other Retained Total
capital pre- for in- re- earnings
mium vested serves
1,000 euro unre- 1)
stricted
equity
Balance at
31 Dec, 2012 11,821 20,045 1,200 1,874 26,919 61,860
Profit for
the period 3,842 3,842
Other com-
prehensive
income, net
of tax:
Cash flow
hedges -58 -58
Translation
differences -60 -60
Total com-
prehensive
income for
the period -118 3,842 3,724
Share-based
payments 199 199
Dividend
distribution -7,341 -7,341
Capital
repayment -1,197 28 -1,169
Balance at
31 Dec, 2013 11,821 20,045 3 1,756 23,647 57,273
Balance at
31 Dec, 2011 11,821 20,045 1,200 1,670 26,236 60,973
Profit for
the period 5,089 5,089
Other com-
prehensive
income, net
of tax:
Cash flow
hedges 128 128
Translation 76 76
differences
Total com-
prehensive
income for
the period 204 5,089 5,293
Share-based
payments
255 255
Dividend -4,661 -4,661
distribution
Balance at
31 Dec, 2012 11,821 20,045 1,200 1,874 26,919 61,860
1)"Other reserves" contains hedge reserve and translation differences.
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
1,000 euro 1 Jan- 1 Jan-
31 Dec, 31 Dec,
2013 2012
Carrying amount
at the beginning 43,433 34,887
of the period
Additions 7,648 14,342
Disposals -9 -
Depreciation -5,623 -5,739
Exchange differences -154 -56
Carrying amount
at the end of
the period 45,295 43,433
COMMITMENTS AND CONTINGENCIES
1,000 euro 31 Dec, 31 Dec,
2013 2012
Loans, secured with
collaterals 10,000 1,000
Collaterals 17,128 8,073
Off-balance sheet
lease commitments 395 451
Capital commitments 1,910 5,499
Nominal values of
derivative contracts
Currency forward
agreements 1,144 1,462
Currency options,
call 948 -
Currency options,
put 182 -
Electricity
derivatives 1,847 2,489
Fair values of
derivative contracts
Currency forward
agreements 20 21
Currency options,
call 12 -
Currency options,
put -1 -
Electricity
derivatives -350 -227
The contract price of the derivatives has been used as the nominal value of the
underlying asset.
HIERARCHY LEVELS OF DERIVATIVE CONTRACTS MEASURED AT FAIR VALUE
1,000 euro 30 Dec 2013 31 Dec 2012
Level Level Level Level Level Level
1 2 3 1 2 3
Financial
assets
Derivative
financial
instruments - 122 - - 67 -
Financial
liabilities
Derivative
financial
instruments - 441 - - 274 -
Fair value estimation
The group's financial instruments that are measured at fair value comprise
derivatives used for hedging and held for trading, and they are classified on
hierarchy level 2.
Fair values of level 2 instruments are based on other data than quoted prices in
active markets, but on the data from which the asset is observable, either
directly (i.e. price) or indirectly (i.e. derived from the prices).
Fair value determination
The fair values of currency derivatives are determined by using mark-to-market
method at the reporting date.
The fair values of electricity derivatives are determined on the basis of market
quotations and contract prices of the instruments at the reporting date.
RELATED PARTY TRANSACTIONS
In January-December, the key management compensation of the executive management
group and Board of directors amounted to 1,730,787 (1,915,939) euro. The
compensation includes share-based payments and the Board of directors'
remuneration paid as shares 310,559 (524,464) euro.
KEY FIGURES SHOWING FINANCIAL PERFORMANCE
1,000 euro 1 Jan- 1 Jan-
31 Dec, 31 Dec,
2013 2012
Net sales 68,516 83,074
Change in net sales
compared to the previous
year's period, % -17.5 -0.1
Export and foreign
operations share
of net sales, % 91.8 94.4
Operating profit before
depreciation (EBITDA) 10,905 13,864
% of net sales 15.9 16.7
Operating profit 5,031 8,018
% of net sales 7.3 9.7
Profit before tax 4,401 7,600
% of net sales 6.4 9.1
Return on equity, % 6.4 8.3
Return on investment, % 6.7 11.8
Non-interest-bearing
liabilities 15,014 18,309
Net interest-bearing
liabilities 6,530 -1,688
Net gearing ratio, % 11.4 -2.7
Equity ratio, % 68.2 72.2
Capital expenditure 7,648 14,342
% of net sales 11.2 17.3
Depreciation 5,874 5,846
Research and development
expenditure 2,779 2,331
% of net sales 4.1 2.8
Average number of
personnel during 363 368
the period
Personnel at the
end of the period 355 364
KEY FIGURES PER SHARE
When calculating equity per share, Okmetic's own shares and the Okmetic shares
owned by Okmetic Management Oy are deducted from the total number of shares.
Euro 31 Dec, 31 Dec,
2013 2012
Basic earnings
per share 0.23 0.31
Diluted earnings
per share 0.22 0.30
Equity per share 3.43 3.72
Capital repayment
per share 0.07 -
Dividend per share 1) - 0.44
Dividends/earnings, % - 141.9
Effective dividend
yield, % - 8.8
Price/earnings(P/E) 20.9 16.2
Share performance
(1.1.-)
Average trading price 4.92 5.25
Lowest trading price 4.25 4.21
Highest trading price 5.66 6.01
Trading price at the
end of the period 4.82 5.02
Market capitalisation
at the end of the
period, 1,000 euro 83,326 86,783
Trading volume (1 Jan-)
Trading volume,
transactions, 1,000 pcs 3,382 3,330
In relation to weighted
average number of
shares, % 19.6 19.3
Trading volume,
1,000 euro 16,647 17,496
The weighted average
number of shares during
the period under review
adjusted by the share
issue, 1,000 pcs 17,288 17,288
The number of shares at
the end of the period
adjusted by the share
issue, 1,000 pcs 17,288 17,288
1) For 2012 including the additional dividend of 0.19 euro per share distributed
in December 2013.
QUARTERLY KEY FIGURES
1,000 euro 10-12/ 7-9/ 4-6/ 1-3/ 2013 2013 2013 2013
Net sales 16,837 18,242 17,035 16,403
Compared to previous
quarter, % -7.7 7.1 3.9 -20.7
Compared to corresponding
period last year, % -18.6 -13.2 -24.2 -13.2
Operating profit 263 1,423 1,971 1,373
% of net sales 1.6 7.8 11.6 8.4
Profit before tax 32 1,280 1,812 1,277
% of net sales 0.2 7.0 10.6 7.8
Net cash flow generated
from:
Operating activities 4,915 3,481 519 811
Investing activities -1,304 -1,687 -1,966 -4,131
Financing activities -3,892 -1,155 -7,276 9,904
Increase/decrease in cash
and cash equivalents -281 639 -8,724 6,585
Personnel at the end
of the period 355 356 379 354
1,000 euro 10-12/ 7-9/ 4-6/ 1-3/
2012 2012 2012 2012
Net sales 20,685 21,017 22,469 18,902
Compared to previous
quarter, % -1.6 -6.5 18.9 4.2
Compared to corresponding
period last year, % 14.1 -1.1 3.3 -14.3
Operating profit 1,007 2,970 2,506 1,535
% of net sales 4.9 14.1 11.2 8.1
Profit before tax 762 2,873 2,736 1,229
% of net sales 3.7 13.7 12.2 6.5
Net cash flow generated
from:
Operating activities 3,565 4,209 2,616 -966
Investing activities -2,650 -3,057 -2,652 -2,624
Financing activities -91 -288 -1,493 -201
Increase/decrease in cash
and cash equivalents 825 864 -1,529 -3,791
Personnel at the end 364 365 390 352
of the period
DEFINITIONS OF KEY FINANCIAL FIGURES
Operating profit before = Operating profit + depreciation
depreciation (EBITDA)
Return on equity (ROE), % = Profit/loss for the period x 100/
-----------------------------------------
Equity(average for the period)
Return on investment (ROI), % = (Profit/loss before tax + interest and
other financial expenses) x 100/
-----------------------------------------
Balance sheet total - non-interest
bearing liabilities(average for the
period)
Equity ratio, % = Equity x 100/
-----------------------------------------
Balance sheet total - advances received
Net interest-bearing liabilities = Interest-bearing liabilities - cash and
cash equivalents
Net gearing ratio, % = (Interest-bearing liabilities - cash and
cash equivalents) x 100/
-----------------------------------------
Equity
Earnings per share = Profit/loss for the period attributable
to equity holders of the parent
company/
-----------------------------------------
Adjusted weighted average number of
shares in issue during the period
Equity per share = Equity attributable to equity holders of
the parent company/
-----------------------------------------
Adjusted number of shares at the end of
the period
Dividend per share = Dividend for the period/
-----------------------------------------
Adjusted number of shares at the end of
the period
Effective dividend yield, % = Dividend per share x 100/
-----------------------------------------
Trading price at the end of the period
Price/earnings ratio (P/E) = Last adjusted trading price at the end
of the period/
-----------------------------------------
Earnings per share
Average trading price = Total traded amount in euro/
-----------------------------------------
Adjusted number of shares traded during
the period
Market capitalisation at the end of = Number of shares at the end of the
the period period x trading price at the end of the
period
Trading volume = Number of shares traded during the
period/
-----------------------------------------
Weighted average number of shares during
the period
All figures of the financial tables are rounded, and consequently the sum of
individual figures can deviate from the presented sum figure.
The future estimates and forecasts in this financial statements release are
based on the company management's current knowledge. Actual events and results
may differ from the estimates presented here.
NEWS CONFERENCE
A briefing for analysts, investors and media will take place on Thursday, 13
February 2014 at 2.00 p.m. in Helsinki Stock Exchange building, Fabianinkatu
14, Helsinki, (entrance via NASDAQ OMX's reception, 2nd floor). In the event,
Okmetic's President Kai Seikku will present the group's performance in 2013 and
prospects for 2014.
FINANCIAL REPORTING IN 2014
Okmetic will publish the financial statements, board of directors' report and
auditor's report for 2013 as well as a separate corporate governance statement
on its website www.okmetic.com on 18 March 2014 at the latest.
Interim report 1-3/2014 (Q1) 24 April 2014
Interim report 1-6/2014 (Q2) 24 July 2014
Interim report 1-9/2014 (Q3) 23 October 2014
Annual general meeting will be held on 9 April 2014.
OKMETIC OYJ
Board of directors
For further information, please contact:
President Kai Seikku, Okmetic Oyj,
tel. +358 400 200 288, email: kai.seikku@okmetic.com
Senior Vice President, Finance, IT, and Communications
Juha Jaatinen, Okmetic Oyj, tel. +358 9 5028 0286,
email: juha.jaatinen@okmetic.com
Distribution:
NASDAQ OMX Helsinki
Principal media
www.okmetic.com
OKMETIC IN BRIEF
Okmetic is a technology company which supplies tailor-made silicon wafers for
sensor and semiconductor industries and sells its technological expertise.
Okmetic provides its customers with solutions that boost their competitiveness
and profitability.
Okmetic's silicon wafers are part of a further processing chain that produces
end products that improve human interaction and quality of life. Okmetic's
products are based on high-tech expertise that generates added value for
customers, innovative product development and an extremely efficient production
process.
Okmetic has a global customer base and sales network, production plants in
Finland and the US and contract manufacturers in Japan and China. Okmetic's
shares are listed on NASDAQ OMX Helsinki under the code OKM1V. For more
information on the company, please visit our website at www.okmetic.com.
[HUG#1761702]
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