Scanfil Oyj - Half Year financial report

SCANFIL GROUP’S HALF YEAR FINANCIAL REPORT 1 JANUARY – 30 JUNE 2016

SCANFIL PLC          HALF YEAR FINANCIAL REPORT     9 AUGUST 2016            
8.00 A.M. 

SCANFIL GROUP’S HALF YEAR FINANCIAL REPORT   1 JANUARY – 30 JUNE 2016

April – June
- Turnover totalled EUR 133.6 million (Q2 2015: 52.8), up to 152.8%
- Operating profit EUR -3.8 million (2.3), -2.8% (4.3%) of turnover,
  adjusted operating profit* EUR 4.6 (3.0) million, 3.5% (5.8%) of turnover
- Profit was EUR -6.1 million (1.7)
- Earnings per share amounted EUR -0.10 (0.03),
  earnings per share without adjustment items* EUR 0.04 (0.04)

January – June
- Turnover totalled to EUR 263.9 million (H1 2015: 98.8), up to 167.2%
- Operating profit EUR -3.4 million (5.0), -1.3% (5.0%) of turnover,
  adjusted operating profit* EUR 9.7 million (5.8), 3.7% (5.9%) of turnover
- Profit for the review period was EUR -7.7 million (4.4)
- Earnings per share were EUR -0.12 (0.08),
  earnings per share without adjustment items* EUR 0.09 (0.09)

* Adjustments (previously referred to as ”non-recurring items”) include costs
of reorganisation, sale and close-down of poorly profitable units of
PartnerTech AB's plant network and the Metal Precision business acquired the
previous year. In 2015, adjustments for corresponding period consisted of costs
related to the acquisition of PartnerTech AB. 

Pro forma comparison January–June
- Turnover H1 2016: EUR 263.9 (H1 2015 pro forma: 237.6) million, up 11.1%
- Operating profit excluding adjustments H1 2016: EUR 9.7 (H1 2015 pro forma:
5.0) million, up to 94.7% 
The pro forma comparison figures have been calculated to illustrate a scenario
in which Scanfil plc and PartnerTech AB were merged on 1 January 2015. 

Future prospects

Scanfil still estimates that its turnover for 2016 will be EUR 500–550 million
and the operating profit before adjustment items will amount to EUR 22–28
million. 

Petteri Jokitalo, CEO of Scanfil plc:

“Our turnover for the first half of 2016 was EUR 264 million, which represents
an increase of around 11 per cent in comparison with our pro forma turnover of
the previous year. Our adjusted operating profit totalled EUR 9.7 million,
marking an increase of 95 per cent year-on-year (pro forma). 

I am satisfied with the development of sales. It proves that our customers have
given their support and faith to the acquisition and new Scanfil. Our most
important task is to continuously develop our operations and competitiveness.
An example of this is our decision to double the capacity of the Sieraz
electronics plant in Poland. We aim to be the preferred contract manufacturing
partner for our customers. 

The integration of companies, elimination of overlap and restructuring of
loss-making plants proceeded well. Operations of the Norwegian plant ended in
June, and the English plant was closed down in July. PartnerTech Aerodyn AB and
PartnerTech Karlskoga AB, both located in Sweden, were divested. We streamlined
our operations in China, and as part of these measures, we decided to close
down the PartnerTech Dongguan plant. The operating loss of the above-mentioned
plants for 2015 amounted to approximately EUR 8.3 million. 

The restructuring has resulted in total of approximately EUR 14 million
negative effect on operating profit level, of which approximately EUR 6.5
million with cash effects. As a result Scanfil's cost structure is now much
lighter and fixed costs on a monthly basis at the moment are more than one
million euros lower level compared to the year before. The measures taken will
have a positive effect on the company's profitability from now on.” 

Key Indicators                                                                  
                                                                                
                                                    1 - 6       1 - 6     1 - 12
                                                     2016        2015       2015
                                                                                
Return on equity, %                                 -15,0         9,1        8,5
Return on investment, %                              -3,6        11,0       10,2
Interest-bearing liabilities, EUR million            74,8         7,0       83,4
Gearing, %                                           53,9       -12,7       60,3
Equity ratio, %                                      36,5        70,1       34,2
Gross investments, EUR million                        2,4         2,5       54,3
% of net turnover                                     0,9         2,6       14,4
Personnel, average                                  3 760       1 798      2 690
                                                                                
Earnings per share, EUR                             -0,12        0,08       0,15
Shareholders´ equity per share, EUR                  1,58        1,72       1,76
                                                                                
Number of shares at                                                             
the end of period, 000´s                                                        
- not counting own shares                          63 670      57 730     57 730
- weighted average                                 63 670      57 730     57 730
                                                                                
Owing to the nature of the sector, the company´s order book covers only a short 
 period of time and does not give an accurate picture of future development     


Financial development

The Group’s turnover for January - June was EUR 263.9 (98.8) million.  The
breakdown of turnover by regional segment was as follows: Europe and USA 80%
(58%), Asia 20% (42%). 

The Group's operating profit for January – June  was EUR -3.4 (5.0) million,
representing -1.3% (5.0%) of turnover. Adjusted operating profit was EUR 9.7
(5.8) million, representing 3.7% (5.9%) of turnover. The operating profit for
the period under review includes adjustments of EUR 13.1 million, consisting of
the restructuring and reorganisation costs of the plant network related to the
divestment and closing down of subsidiaries with low profitability. The
previous year, adjustments for the corresponding period consisted of EUR 0.9
million of costs related to the acquisition of PartnerTech AB. 

The Group's tax rate is high due to the losses of the divested and closed down
companies, closing down costs and the cancellation of the deferred tax
receivables of Scanfil Ltd and PartnerTech China (Dongguan) Ltd. 

The result for the period was EUR -7.7 million (4.4 million), and the result
before adjustment items was EUR 5.9 (5.3) million. 

The Group's turnover for April–June amounted to EUR 133.6 (52.8) million and
operating profit was EUR -3.8 (2.3) million, or -2.8% (4.3%) of turnover. The
second quarter includes a total of EUR 8.4 (0.8) million of adjustments.
Operating profit excluding adjustments was EUR 4.6 (3.0) million, representing
3.5% (5.8%) of turnover. 

Earnings per share were EUR -0.12 (0.08) for the period under review, and
earnings per share excluding adjustments were EUR 0.09 (0.09). The return on
investment was -3.6% (11.0%). 

Publication of financial releases

This stock exchange release is a summary of the Scanfil Group’s Half Year
Financial Report 1 January – 30 June, 2016 and includes the most relevant
information of the report. The complete report is attached to this release as a
pdf file and is also available on the company’s website at www.scanfil.com. 


SCANFIL PLC

Petteri Jokitalo
CEO



Additional information:
CEO Petteri Jokitalo
Tel +358 8 4882 111



Distribution         NASDAQ OMX, Helsinki
                           Major Media
                           www.scanfil.com



Scanfil is an international contract manufacturer and system supplier for the
electronics industry with 40 years of experience in demanding contract
manufacturing. Scanfil provides its customers with an extensive array of
services, ranging from product design to product manufacturing, material
procurement and logistics solutions. Vertically integrated production and a
comprehensive supply chain are the foundation of Scanfil’s competitive
advantages: speed, flexibility and reliability. 

Typical Scanfil products include mobile and communications network devices,
automation system modules, frequency converters, lift control systems,
analysers, various slot and vending machines, and devices related to medical
technology and meteorology. Scanfil services are used by numerous international
automation, energy, IT and health service providers, as well as companies
operating in the field of urbanisation. Scanfil’s network of factories consists
of 13 production units in Europe, Asia and North America. The total number of
employees is 3,800. 

Not to be published or distributed, directly or indirectly, in any country
where its distribution or publication is unlawful. Forward looking statements:
certain statements in this stock exchange release may constitute
"forward-looking" statements which involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements of Scanfil Oyj to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. When used in this stock exchange release, such statements use such
words as "may," "will," "expect," "anticipate," "project," "believe," "plan"
and other similar terminology. New risk factors may arise from time to time and
it is not possible for management to predict all of those risk factors or the
extent to which any factor or combination of factors may cause actual results,
performance and achievements of Scanfil Oyj to be materially different from
those contained in forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results. The forward-looking information
contained in this stock exchange release is current only as of the date of this
stock exchange release. There should not be an expectation that such
information will in all circumstances be updated, supplemented or revised,
except as provided by the law or obligatory regulations, whether as a result of
new information, changing circumstances, future events or otherwise.

Attachments:

SCANFIL PLC HALF YEAR REPORT 09082016.pdf