Vacon - Interim report (Q1 and Q3)

Vacon Plc Interim report 1 January - 31 March 2015

Vacon Plc, Stock Exchange Release, 28 April 2015 at 9.30 a.m. (EET)

In this stock exchange release Vacon is publishing information included in the
interim report that has a significant impact on the value of securities. The
full interim report is in the appendix to this release and can be downloaded
from the company's website in Finnish at www.vacon.fi and in English at
www.vacon.com.

January-March highlights:

  * Order intake totalled MEUR 106.4 (MEUR 104.8), an increase of 1.4% from the
    corresponding period in the previous year.
  * Revenues totalled MEUR 100.1 (MEUR 89.3), an increase of 12.2% from the
    corresponding period in the previous year.
  * Operating profit was MEUR 9.1 or 9.0% of revenues (MEUR 6.7 and 7.5%), an
    increase of 34.9% from the corresponding period in the previous year.
  * Net cash flow from operating activities was MEUR 10.5 (MEUR -0.6).
  * Earnings per share were EUR 0.21 (EUR 0.16).
  * The Board of Directors of Vacon Plc has decided to apply for the termination
    of trading in Vacon shares and for the delisting of the shares from NASDAQ
    OMX Helsinki Ltd. In the application submitted to NASDAQ OMX Helsinki on 2
    April 2015, Vacon requested that the delisting take effect as soon as
    possible after Oy Danfoss Ab has acquired the entire share capital of Vacon.

January-March key indicators:

+----------------------------------------+--------+--------+---------+---------+
|MEUR                                    |1-3/2015|1-3/2014|Change, %|1-12/2014|
+----------------------------------------+--------+--------+---------+---------+
|Order intake                            |   106.4|   104.8|     1.4%|    424.7|
+----------------------------------------+--------+--------+---------+---------+
|Order book                              |    68.4|    62.4|     9.6%|     62.2|
+----------------------------------------+--------+--------+---------+---------+
|Revenues                                |   100.1|    89.3|    12.2%|    409.4|
+----------------------------------------+--------+--------+---------+---------+
|Operating profit excluding one-time     |        |        |         |         |
|items                                   |     9.1|     6.7|    34.9%|     47.2|
+----------------------------------------+--------+--------+---------+---------+
|% of revenues                           |    9.0%|    7.5%|         |    11.5%|
+----------------------------------------+--------+--------+---------+---------+
|Operating profit                        |     9.1|     6.7|    34.9%|     39.7|
+----------------------------------------+--------+--------+---------+---------+
|% of revenues                           |    9.0%|    7.5%|         |     9.7%|
+----------------------------------------+--------+--------+---------+---------+
|Profit before taxes                     |     8.6|     6.7|    28.7%|     39.8|
+----------------------------------------+--------+--------+---------+---------+
|                                        |        |        |         |         |
|Net cash flow from operating activities |    10.5|    -0.6|         |     35.4|
+----------------------------------------+--------+--------+---------+---------+
|Earnings per share, EUR                 |    0.21|    0.16|    35.5%|     1.00|
+----------------------------------------+--------+--------+---------+---------+
|                                        |        |        |         |         |
|Interest-bearing net liabilities        |   -14.4|   -10.0|    43.6%|    -10.4|
+----------------------------------------+--------+--------+---------+---------+
|Gearing, %                              |  -11.0%|  -10.0%|         |    -8.3%|
+----------------------------------------+--------+--------+---------+---------+
|Gross capital expenditure               |     4.9|     4.8|     1.9%|     24.1|
+----------------------------------------+--------+--------+---------+---------+

President and CEO Vesa Laisi: All key financial indicators improved in the first
quarter of 2015"The first quarter of 2015 went very well for Vacon. All key financial
indicators improved in the first quarter of 2015 when compared with the first
quarter of 2014.

The volume of our orders increased reasonably well in the first quarter, taking
into account seasonal fluctuations at a few of our major customers.

Revenues increased in the first quarter from the period for comparison.
Geographically the region with strongest growth was Asia and Pacific (APAC),
where revenues increased 29.4% in January-March 2015 from the same period in the
previous year. In North and South America revenues rose 2.6%, and in the Europe,
Middle East and Africa (EMEA) region 9.1%.

The Company's operating profit also improved from the previous year. Efficient
material sourcing and the cost benefits from transferring material sourcing to
lower cost countries have been key factors in improving the company's
profitability. Changes in currency exchange rates contributed to the growth in
revenues and the improvement in the operating profit in the review period.

Vacon has been part of the Danfoss Group since 1 December 2014. Our responsible
task is now to merge two successful AC drive business operations to create one
of the leading players in the market. Combining two large organisations requires
thorough planning and it is necessary to take many different details into
account. We have started the work and the merger process is making progress
according to plan. I am pleased with the way our personnel have managed to focus
on meeting customer needs despite the changes taking place in our company."

Prospects for 2015

Global megatrends, such as urbanisation, increasing industrial automation,
energy efficiency, developing markets and renewable energy, all support growth
in the AC drive market in the long term.

In the assessment of market research institutions, the AC drive market has
hardly grown at all during the past three years. A major factor in this has been
the overall economic uncertainty, which has caused industrial investment to slow
down.

During 2015 Vacon and Danfoss will merge their AC drive business operations.
Combining Vacon and Danfoss creates one of the leading players in the global AC
drive sector, which can take advantage of the best features of both companies.

Market guidelines for 2015

Vacon estimates that its revenues will increase and its operating profit
percentage excluding one-time items will improve from 2014.

Vacon's revenues in 2014 totalled EUR 409.4 million and the operating profit
percentage excluding one-time items was 11.5%.

Vacon's financial targets until 2020

Vacon published new long-term financial targets and a revised strategy for the
period 2014-2020 in November 2013.

Growth: The target is to achieve an average annual revenue growth of over 10%.
The growth target is based on growing the business organically in a market
environment where the AC drives market grows clearly faster than the average
Gross Domestic Product (GDP). Selective acquisitions can be used to further
accelerate the growth.

Profitability: The long-term profitability target is to achieve a sustainable
EBIT margin level of 14%. Vacon focuses on growth and on measures that improve
the company's efficiency in the long term and thus deliver a higher absolute
EBIT and shareholder value.

Vacon does not consider the long term financial targets as market guidance for
any given year during the period 2014-2020. It will issue separate market
guidance annually.

Formal statement

This release contains certain forward-looking statements that reflect the
current views of the company's management. Due to the nature of these
statements, they contain risks and uncertainties and are subject to changes in
the general economic situation and in the company's business sector.

Vacon in brief

Vacon is driven by a passion to develop, manufacture and sell the best AC drives
and inverters in the world - and provide customers with efficient product
lifecycle services. Our AC drives offer optimum process control and energy
efficiency for electric motors. Vacon inverters play a key role when energy is
produced from renewable sources. Vacon has production and R&D facilities in
Europe, Asia and North America, and sales offices in 32 countries. Further,
Vacon has sales representatives and service partners in nearly 90 countries. In
2014, Vacon's revenues amounted to EUR 409.4 million, and the company employed
globally approximately 1,600 people. The shares of Vacon Plc (VAC1V) are quoted
on the main list of the Helsinki stock exchange (NASDAQ OMX Helsinki). Vacon is
part of Danfoss Group.

Driven by Drives, www.vacon.com

Vantaa, 28 March 2015

VACON PLC

Board of Directors

For more information please contact:

  * Vesa Laisi, President and CEO, Vacon Plc, phone +358 (0)40 8371 510,
    vesa.laisi(at)vacon.com
  * Ann-Louise Brännback, CFO, Vacon Plc, phone +358 40 8371 376, ann-
    louise.brannback(at)vacon.com
  * Sebastian Linko, Director, Corporate Communications and Investor Relations,
    Vacon Plc, phone +358 (0)40 8371 634, sebastian.linko(at)vacon.com

Distribution:

NASDAQ OMX Helsinki
Financial Supervisory Authority
Main media

ATTACHMENTS




[HUG#1915672]

Attachments:

Vacon Plc Interim Report January-March 2015.pdf