Componenta - Inside information

Componenta Dökümcülük’s consolidation according to IFRS into the Componenta Group ends

Componenta Corporation Stock Exchange Release on 15.2.2017 at 9.50

Componenta announced on 7 October 2016 that Componenta Corporation plans to
sell its shareholding in Componenta Dökümcülük. It was stated in Componenta’s
interim report Q3/2016 that Componenta Corporation’s application for corporate
restructuring on 1 September 2016 gave the Turkish club loan banks the right to
use the voting rights of the Componenta Dökümcülük shares which the company
owns and gave the banks in August 2016 as collateral, as well as the right to
begin the process of selling the shares. Componenta has not received any
requests from the club loan banks relating to the use of these rights. 

Since the end of 2016, the Turkish club loan banks have actually assumed a more
active role in the sales process of the Componenta Dökümcülük shares owned by
Componenta, and in practice, the negotiations are underway in Turkey under the
lead of the club loan banks. In addition, the opportunities of Componenta’s
representatives to take part in Componenta Dökümcülük’s management are more
limited than previously. The company sees that the above-mentioned factors
limit the company’s opportunity to exercise control as stated in IFRS in the
Turkish company. As a result, the Turkish company and its UK subsidiary’s
balance sheet will not be consolidated in the Group’s financial statements on
31 December 2016. The operations of the Turkish company and its UK subsidiary
will be classified as discontinued operations according to IFRS, and the income
statements and cash flows of these companies for 2016 will be presented in the
Group’s financial statements of 31 December 2016 under discontinued operations.
If control according to IFRS is later returned to Componenta, the Turkish
subgroup will be consolidated to the Group as of that moment. Ending the
consolidation does not affect judicial ownership and Componenta still holds
approximately 93.6% of Componenta Dökümcülük’s shares. 

The value of Componenta Dökümcülük’s shares is presented as Componenta Group’s
external shareholding. Componenta’s loans and receivables from Componenta
Dökümcülük will be presented as Componenta Group’s external loans and
receivables. 

The effects of the end of consolidation are demonstrated below with some key
figures. The effects of ending the consolidation of the Turkish subgroup on the
consolidated net sales of continuing operations of 2015 was approximately EUR
219 million and on the net sales of continuing operations of January–September
2016 approximately EUR 145 million. It was stated in Componenta’s interim
report Q3/2016 that at the end of September, approximately EUR 232 million were
consolidated from the Turkish subgroup to the balance sheet of the Group as
non-current and current assets and around EUR 247 million as current
liabilities. At the end of September 2016, the Turkish subgroup had group
internal net receivables amounting to approximately EUR 135 million. In
addition, Componenta Corporation has given a guarantee of up to EUR 80 million
as security for the club loan of Componenta Dökümcülük. As the consolidation
ends, the liabilities and assets consolidated from the Turkish subgroup are
removed from the balance sheet and the remaining Group’s net liabilities to the
Turkish subgroup are added to the consolidated statement of financial position.
Majority of the Group’s payables to the Turkish subgroup were subject to the
corporate restructuring proceedings. 

The number of personnel at the Turkish subgroup was 2,650 at the end of 2015
and 2,554 at the end of September 2016. The corresponding personnel numbers of
the Group were 1,080 and 902. The comparison figure at the end of 2015 also
includes the personnel of businesses sold in 2016, Suomivalimo and Pistons. 

In the tables below, the Dutch and the Turkish sub-groups are presented as
discontinued operations in accordance with IFRS 5. The Dutch sub-group was
classified as discontinued operation already during the third quarter of the
year 2016. The business units Suomivalimo and Pistons that were sold in 2016
are presented as continuing operations in accordance with IFRS until the date
of the sale. The tables are unaudited. 

Reconciliation of net sales, Group                     
                                                       
Reconciliation of net sales, MEUR   1-9/2016  1-12/2015
-------------------------------------------------------
Continued operations                   139.4      210.1
-------------------------------------------------------
Discontinued operations                216.1      342.3
-------------------------------------------------------
Internal items/eliminations            -37.2      -57.6
-------------------------------------------------------
Componenta total                       318.2      494.8
-------------------------------------------------------



Group continued operations development excluding items affecting comparability
                                                                              
MEUR                                              1-9/2016           1-12/2015
------------------------------------------------------------------------------
Net sales                                            139.4               210.1
---------------------------------------                    -------------------
Operating profit                                      -5.0                 0.4
---------------------------------------                    -------------------
Net financial items                                   -9.2               -16.6
---------------------------------------                    -------------------
Profit after financial items                         -14.2               -16.2
------------------------------------------------------------------------------



Reconcilaition of continued operations, MEUR                 1-9/2016  1-12/2015
--------------------------------------------------------------------------------
Operating profit excluding items affecting comparability         -5.0        0.4
--------------------------------------------------------------------------------
Items affecting comparability in operating profit *)            -12.3      -18.9
--------------------------------------------------------------------------------
Operating profit of continued operations, IFRS                  -17.3      -18.5
--------------------------------------------------------------------------------
Net financial items excluding items affecting comparability      -9.2      -16.6
--------------------------------------------------------------------------------
Items affecting comparability in net financial items **)         43.5        0.0
--------------------------------------------------------------------------------
Profit after financial items, IFRS                               17.0      -35.1
--------------------------------------------------------------------------------

*) Items affecting comparability in 1-9/2016 operating profit of continued
operations relate to capital loss of divestment in Suomivalimo (EUR -6.1
million), the writedowns of production machinery in Sweden Iron business (EUR
-4.2 million), the sales profit of Pistons business unit (EUR +1.0 million).
Restructuring measures related expenses and other items affecting comparability
as a net totalled EUR -3.0 million. 

**) Net financial items affecting comparability of continued operations
1-9/2016 includes (EUR 43.3 million) gain, since the secured debt of the parent
company was discharged at an amount lower than the balance sheet value. Other
items affecting comparability in net financial items were EUR -0.2 million. 

Group development, IFRS                                               
                                                                      
MEUR                                               1-9/2016  1-12/2015
----------------------------------------------------------------------
Net sales, continued operations                       139.4      210.1
----------------------------------------------------------------------
Operating profit, continued operations                -17.3      -18.5
----------------------------------------------------------------------
Net financial items, continued operations *)           34.2      -16.6
----------------------------------------------------------------------
Profit after financial items, continued oerations      17.0      -35.1
----------------------------------------------------------------------
Income taxes, continued operations                     -1.8      -27.1
----------------------------------------------------------------------
Net profit of continued operations                     15.2      -62.2
----------------------------------------------------------------------
Net profit of discontinued operations                 -35.8      -20.4
----------------------------------------------------------------------
Net profit, group                                     -20.6      -82.7
----------------------------------------------------------------------

*) Net financial items of continued operations 1-9/2016 includes (EUR 43.3
million) gain, since the secured debts of the parent company were discharged at
an amount lower than the balance sheet value. 


Helsinki, 15 February 2017


COMPONENTA CORPORATION


Harri Suutari
President and CEO


For further information, please contact:

Harri Suutari
President and CEO
tel. +358 10 403 2200

Marko Karppinen
CFO
tel. +358 10 403 2101


Componenta is a metal sector company with international operations and
production plants located in Finland, Turkey and Sweden. The net sales of
Componenta were EUR 495 million in 2015 and its share is listed on Nasdaq
Helsinki. The Group employs approx. 3,500 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.