Neo Industrial Oyj - Interim Management statement

NEO INDUSTRIAL PLC’S INTERIM MANAGEMENT STATEMENT FOR 1 JANUARY TO 5 MAY 2015

NEO INDUSTRIAL PLC          STOCK EXCHANGE RELEASE        5 May 2015 at 1.00 pm

NEO INDUSTRIAL PLC'S INTERIM MANAGEMENT STATEMENT FOR 1 JANUARY TO 5 MAY 2015

Neo Industrial's turnover for the period between 1 January and 31 March 2015
was EUR 18.0 million (17.5 million 1.1. - 31.3.2014). Its operating result was
-0.7 million (-0.6 million). 

CABLE SEGMENT

The operating result of the Cable Segment for the first months of the year is
typically low due to seasonality, with low net sales in relation to operating
costs. The high season runs from the spring until late in the autumn. 

The Cable segment's turnover for the period between 1 January and 31 March 2015
was EUR 18.0 million (17.5 million). The operating result was EUR -0.5 million
(-0.2 million). 

In the review period (1 January to 5 May 2015), the sales volume in the cable
market of Nordic countries, the main market area of Reka Cables Ltd, was on the
same level as the year before. However, there were regional differences. The
sales volume to other countries increased slightly. 

The raw material prices of aluminium increased and copper decreased slightly
during  the review period. The world market prices of plastics decreased in the
beginning of the year but price levels have turned to a raise. 

Reka Kaapeli Ltd got substantial underground power cable order in January. The
value of the order is EUR 6.0 million. The deliveries are made during 2015 and
2016. The underground power cables are used when building grids that are not
vulnerable to weather conditions. 

Reka Kaapeli Ltd invested EUR 1.5 million in cable manufacturing technology in
Hyvinkää Factory. With the investment the productivity of cable manufacturing
is enhanced and developing and manufacturing of new products is enabled. The
investment will be ready by mid May 2015. 

Good financial situation of Cable industry has enabled additional installment
of EUR 1.5 million to the financing agreement signed in March 2014. The payment
was made in January 2015. 

The managing director of Reka Cables Ltd was changed. Mr. Ralf Sohlström, M.Sc.
(Eng.) started as Managing Director of Reka Cables Ltd. In the beginning of May
2015. 

The turnover of Nestor Cables, an associated company of the Cable Segment, were
EUR 5.5 million (4.1 million) for the period between 1 January and 31 March
2015. The operating result was negative, but better than in the previous year. 

RISKS AND UNCERTAINTY FACTORS

Neo Industrial´s financial risks include currency, interest rate, commodity,
liquidity, credit and investment risks. Financial risks and the related
protection measures are described in more detail in notes to the financial
statements. The company´s future risk factors are related to the business
development of its portfolio companies. The uncertainty of the international
economy and financial markets poses a risk to the Group´s financial
arrangements. 

Due to the significant financial arrangements carried out in 2014 the financial
situation got better. However, Neo Industrial continues to pay extra attention
to ensure the sufficient funding and ensuring liquidity situation. The
financial negotiations are continued and to assure liquidity, company
intensifies the working capital management and negotiates adjustments to
payment terms and agreements. 

In the Cable segment, the most significant risks are related to market
development, fluctuations of raw material prices and currencies as well as
working capital management in various situations. During considerable seasonal
changes, suppliers' terms of payment effect significantly on the ability to
ensure competitive delivery times through sufficient inventories. 

NEAR-TERM OUTLOOK

The construction has not been picking up in Nordic countries nor in
neighbouring areas. Also the market situation in Europe does not show any signs
of picking up. However, the management believes that grid constructors will
boost ground cabling projects to ensure distribution reliability. The turnover
of the Cable segment is believed to slightly exceed the turnover in 2014 and
the operating result of the Cables segment is believed to be positive. 

Neo Industrial continues to pay extra attention to ensure the sufficient
funding and ensuring liquidity situation. The measures are negotiations on
financing and payment terms as well as boosting inventory turnover and freeing
up capital assets. 

The information presented in this statement is unaudited.

Hyvinkää, 5 May 2015

Neo Industrial Plc
Board of Directors

Further information:
Jari Salo, Managing Director, tel. +358 20 720 9196

All comments in this report that do not refer to actual facts are future
estimates. Such estimates include expectations concerning market trends, growth
and profitability as well as statements including the words “believe”, “assume”
or “will be” or a similar expression. Since these estimates are based on
current plans and estimates, they involve risks and uncertainty factors that
may cause the actual results to differ substantially from current statements. 

Among other things, such factors include 1) operating conditions, such as
continued success in production and the ensuing efficiency benefits,
availability and cost of production inputs, demand for new products and changes
in circumstances affecting the acquisition of capital under acceptable
conditions; 2) sector-specific circumstances, such as the intensity of demand
for products, the competition, current and future market prices for the Group's
products and related pricing pressures, the financial situation of the Group's
customers and competitors and competitors' possible new products; and 3) the
general economic situation, such as economic growth in the Group's main market
areas and changes in exchange rates and interest rates.