2014-10-22 13:00:00 CEST
2014-10-22 13:01:06 CEST
REGULATED INFORMATION
Vaisala - Interim report (Q1 and Q3)
Vaisala Corporation Interim Report January-September 2014
Vaisala Corporation
Interim Report
October 22, 2014 at 2.00 p.m. (EET)
Vaisala Corporation Interim Report January-September 2014
January-September 2014 net sales and order book increased. Operating result
decreased due to investments in new businesses. Business outlook for 2014
unchanged.
July-September 2014 highlights
* Orders received EUR 68.8 (76.0) million, decrease 10%
* Order book EUR 137.7 (115.1) million, increase 20%
* Net sales EUR 77.9 (61.9) million, increase 26%
* Gross margin 52.7% (48.5%)
* Operating result EUR 12.6 (4.9) million, increase 156%
* Earnings per share EUR 0.62 (0.14)
* Cash and cash equivalents EUR 34.4 (47.0) million
* Business outlook for 2014: Vaisala estimates its full year 2014 net sales to
be in the range of EUR 290-305 million and the operating result (EBIT) in
the range of EUR 20-30 million.
January-September 2014 highlights
* Orders received EUR 207.9 (200.2) million, increase 4%
* Net sales EUR 204.0 (192.7) million, increase 6%
* Gross margin 50.4% (49.4%)
* Operating result EUR 11.5 (15.1) million, decrease 24%
* Earnings per share EUR 0.57 (0.50)
* Cash flow from operating activities EUR 8.8 (16.2) million
Vaisala's President and CEO Kjell Forsén comments on the third quarter"The preceding four consecutive quarters were characterized by strong order
intake for Vaisala. In the third quarter of 2014 this turned into net sales
showing growth year-on-year with 26% from EUR 61.9 million to EUR 77.9 million.
Order intake in the third quarter is slightly down from the previous year to EUR
68.8 million from EUR 76.0 million. The order book, however, remained strong at
EUR 137.7 million as compared to EUR 115.1 million at the end of September 2013.
As a result of the increased top line Vaisala's operating result in the third
quarter grew from EUR 4.9 million to EUR 12.6 million. This was achieved despite
being burdened by integration costs for the acquired companies 3Tier and Second
Wind related to Vaisala entering the weather dependent renewable energy market.
Vaisala's Weather Business Area showed a healthy growth of net sales from EUR
42.9 million to EUR 57.3 million, a growth of 34% coming from all geographical
areas. The relative share of project business kept growing reaching 42%. The
growing topline and improved gross margin increased operating result from EUR
1.6 million to EUR 8.4 million.
In renewable energy the selected focus markets remained active and Vaisala is
strengthening its presence in those markets. Also building and renewal of the
portfolio for the renewable energy market is progressing as well as gaining of
industry acceptance.
Also the Information Service strategy implementation is progressing well with
e.g. the first contracts for aircraft deicing optimization signed. Investments
in new product development and novel technologies are continuing as planned.
For Vaisala's Controlled Environment Business Area the positive trend from the
end of the second quarter carried into the third quarter as net sales grew in
all geographical areas with 8% from EUR 19.0 million to EUR 20.6 million year-
on-year. The growth was especially strong in Life Science customer group. The
growing topline and improved gross margin increased operating result from EUR
3.6 million to EUR 4.5 million.
I want to take the opportunity to thank all of Vaisala's skilled and committed
staff for making the good result described above possible. In today's volatile
global markets with several severe crises ongoing your agility, speed and
professionalism are the best guarantee for the continued success of Vaisala.
True leaders in this field are using their sustainability information to become
stronger in businesses and to make better decisions based on what they have
learned.
For Vaisala sustainability is more than just reducing our own carbon footprint.
It is about giving our customers tools to succeed in their sustainability
actions. On a grander scale Vaisala provides means for assessing the state of
the environment and climate. Based on this strategic approach Vaisala was
awarded a position on CDP's prestigious A list of the Global Climate Performance
Leadership Index (Global CPLI) and on the Nordic Climate Disclosure Leadership
Index (CDLI). The performance score assesses the level of action on climate
change mitigation, adaptation and transparency. Vaisala was assessed under
Information technology sector, which is widely understood to be one of the
fundamental driving forces of change in the business and consumer societies.
Delivering innovation to meet product efficiency regulations is another well-
reported opportunity which Vaisala is demonstrating through its technology,
solution and product offering.
Despite the increased risk picture on the global markets and a highly competed
environment Vaisala holds on to the guidance of net sales in the range of EUR
290-305 million and the operating result (EBIT) in the range of EUR 20-30
million."
Key Figures
7-9/2014 7-9/2013 1-9/2014 1-9/2013 2013
-------------------------------------------------------------------------------
Orders received, EUR million 68.8 76.0 207.9 200.2 282.9
Order book, EUR million 137.7 115.1 137.7 115.1 122.0
Net sales, EUR million 77.9 61.9 204.0 192.7 273.2
Gross profit, EUR million 41.1 30.0 102.9 95.1 134.3
Gross margin, % 52.7 48.5 50.4 49.4 49.2
Operating expenses, EUR million 28.5 25.4 91.7 82.0 113.6
Operating result, EUR million 12.6 4.9 11.5 15.1 18.1
Operating result, % 16.2 7.9 5.6 7.8 6.6
Profit (loss) before taxes, EUR 14.6 4.4 13.5 14.3 17.2
million
Profit (loss) for the period, EUR 11.1 2.6 10.3 9.1 10.9
million
Earnings per share, EUR 0.62 0.14 0.57 0.50 0.60
Cash flow from operating activities, 10.3 10.9 8.8 16.2 28.2
EUR million
Capital expenditure, EUR million 2.1 1.7 5.8 5.8 7.1
Depreciation, EUR million 3.7 3.8 11.2 11.1 14.8
Return on equity, % 8.7 7.0 6.3
Cash and cash equivalents, EUR 34.4 47.0 34.4 47.0 45.8
million
-------------------------------------------------------------------------------
Market situation in July-September 2014
Reasonably good weather observation market conditions continued. Market
conditions for industrial measurement and life science solutions developed
positively especially in Americas.
In EMEA weather observation market remained solid, although economic weakness
and currency depreciation in Russia and some neighboring countries are weakening
demand in the region. Also conflicts in Middle East have had an unfavorable
impact on local weather observation market activity. Demand for industrial
measurement and life science solutions trended slightly upwards.
In Americas weather observation market continued to pick up, driven by the U.S.
governmental customers. Market environment for industrial measurement and life
science solutions was favorable.
In APAC weather observation market remained active. Market environment for
industrial measurement and life science solutions improved after stagnant first
half of the year.
July-September 2014 performance
Orders received
EUR million 7-9/2014 7-9/2013 Change, % 2013
---------------------------------------------------------
Weather 47.3 56.6 -16 208.3
Controlled Environment 21.5 19.3 11 74.6
---------------------------------------------------------
Total 68.8 76.0 -10 282.9
---------------------------------------------------------
Order book
EUR million 7-9/2014 7-9/2013 Change, % 2013
---------------------------------------------------------
Weather 131.7 109.9 20 116.2
Controlled Environment 6.1 5.2 17 5.8
---------------------------------------------------------
Total 137.7 115.1 20 122.0
---------------------------------------------------------
In July-September 2014, orders received were EUR 68.8 (76.0) million and
decreased by 10% compared to the previous year and the decline came from
Americas and EMEA. Decrease was due to both fewer project orders and large
service contracts. Weather Business Area's orders received were EUR 47.3 (56.6)
million and decreased by 16%. The decline came from New Weather Markets,
Meteorology and Roads and Rail customer groups. Controlled Environment Business
Area's orders received were EUR 21.5 (19.3) million and increased by 11%. The
growth came from both customer groups.
After strong orders received during the preceding four quarters the order book
was EUR 137.7 (115.1) million at the end of September and increased by 20%
compared to end of September 2013. The order book includes EUR 12 million of
orders, which were consolidated from 3TIER Inc., acquired in December 2013. Of
the order book EUR 86.3 million will be delivered in 2015 or later.
Net sales by business area
EUR million 7-9/2014 7-9/2013 Change, % 2013
-----------------------------------------------------------------
Weather 57.3 42.9 34 200.0
Controlled Environment 20.6 19.0 8 73.2
-----------------------------------------------------------------
Total 77.9 61.9 26 273.2
-----------------------------------------------------------------
Net sales by geographical area
EUR million 7-9/2014 7-9/2013 Change, % 2013
-----------------------------------------------------------------
EMEA 29.5 22.5 31 98.6
Americas 28.4 25.2 13 107.8
APAC 20.0 14.1 42 66.9
-----------------------------------------------------------------
Total 77.9 61.9 26 273.2
-----------------------------------------------------------------
In July-September 2014, Vaisala's net sales were EUR 77.9 (61.9) million and
increased by 26% compared to the previous year. Weather Business Area's net
sales were EUR 57.3 (42.9) million and increased by 34%. The growth came from
all customer groups except Roads and Rail. Weather Business Area's net sales
increased in all geographical areas and project revenue recognition was
especially strong. Controlled Environment Business Area's net sales were EUR
20.6 (19.0) million and increased by 8%. The growth came mainly from Life
Science customer group. Controlled Environment Business Area improved its net
sales in all geographical areas.
In July-September 2014, net sales in EMEA was EUR 29.5 (22.5) million and
increased by 31% compared to the previous year, in the Americas EUR 28.4 (25.2)
million and increased by 13% and in APAC EUR 20.0 (14.1) million and increased
by 42%.
At comparable exchange rates the net sales would have been EUR 78.3 (61.9)
million and increase would have been EUR 16.4 million or 27% from previous year.
The negative exchange rate effect was EUR 0.5 million, which was mainly due to
changes in USD and JPY exchange rates.
Gross margin was 52.7% (48.5%). The increase was mainly due to increased net
sales and related decrease in unit costs due to improved scale economies.
Operating result
EUR million 7-9/2014 7-9/2013 Change, % 2013
--------------------------------------------------------
Weather 8.4 1.6 411 14.5
Controlled Environment 4.5 3.6 24 4.0
Eliminations and other -0.3 -0.4 -17 -0.4
--------------------------------------------------------
Total 12.6 4.9 156 18.1
--------------------------------------------------------
In July-September 2014, operating result was EUR 12.6 (4.9) million. The
increase was due to improved net sales and gross margins of both business areas.
Operating expenses were EUR 28.5 (25.4) million and increased by 12% compared to
the previous year. The increase was mainly due to the consolidation of operating
expenditures of 3TIER Inc. and Second Wind Systems Inc., which were acquired
during the second half of 2013 as well as investments in R&D related to new
offering development and renewing instrument portfolio.
Profit (loss) before taxes was EUR 14.6 (4.4) million for the period of July-
September 2014. Income taxes were EUR -3.4 (-1.8) million. Net result was EUR
11.1 (2.6) million.
Earnings per share for July-September 2014 were EUR 0.62 (0.14).
January-September 2014 performance
Orders received
EUR million 1-9/2014 1-9/2013 Change, % 2013
---------------------------------------------------------
Weather 149.8 144.2 4 208.3
Controlled Environment 58.1 56.0 4 74.6
---------------------------------------------------------
Total 207.9 200.2 4 282.9
---------------------------------------------------------
Order book
EUR million 1-9/2014 1-9/2013 Change, % 2013
---------------------------------------------------------
Weather 131.7 109.9 20 116.2
Controlled Environment 6.1 5.2 17 5.8
---------------------------------------------------------
Total 137.7 115.1 20 122.0
---------------------------------------------------------
In January-September 2014, orders received were EUR 207.9 (200.2) million and
increased by 4% compared to the previous year. The growth came mainly from
Europe and China. Weather Business Area's orders received were EUR 149.8 (144.2)
million and increased by 4%. The growth came from all other customer groups
except Airports and Meteorology. Controlled Environment Business Area's orders
received were EUR 58.1 (56.0) million and increased by 4%. Orders received
increased in both customer groups.
After strong orders received during the preceding four quarters the order book
was EUR 137.7 (115.1) million at the end of September and increased by 20%
compared to end of September 2013. However, Weather Business Area's third
quarter 2014 orders received decreased by 16% compared to previous year. The
order book includes EUR 12 million of orders, which were consolidated from
3TIER Inc., acquired in December 2013. Of the order book EUR 86.3 million will
be delivered in 2015 or later.
Net sales by business area
EUR million 1-9/2014 1-9/2013 Change, % 2013
-----------------------------------------------------------------
Weather 146.2 137.5 6 200.0
Controlled Environment 57.8 55.2 5 73.2
-----------------------------------------------------------------
Total 204.0 192.7 6 273.2
-----------------------------------------------------------------
Net sales by geographical area
EUR million 1-9/2014 1-9/2013 Change, % 2013
-----------------------------------------------------------------
EMEA 76.0 69.6 9 98.6
Americas 75.8 73.9 3 107.8
APAC 52.2 49.1 6 66.9
-----------------------------------------------------------------
Total 204.0 192.7 6 273.2
-----------------------------------------------------------------
In January-September 2014, Vaisala's net sales was EUR 204.0 (192.7) million and
increased by 6% compared to the previous year. Weather Business Area's net sales
were EUR 146.2 (137.5) million and increased by 6%. The growth came mainly from
New Weather Markets customer group but net sales increased also in Meteorology
and Airports. Weather Business Area improved its net sales in project and
services businesses and in all geographical areas. Controlled Environment
Business Area's net sales were EUR 57.8 (55.2) million and increased by 5%. The
growth came from both customer groups and from all geographical areas.
In January-September 2014, net sales in EMEA was EUR 76.0 (69.6) million and
increased by 9% compared to the previous year, in the Americas EUR 75.8 (73.9)
million and increased by 3% and in APAC EUR 52.2 (49.1) million and increased by
6%.
At comparable exchange rates the net sales would have been EUR 208.2 (192.7)
million and increase would have been EUR 15.5 million or 8% from previous year.
The negative exchange rate effect was EUR 4.2 million, which was mainly due to
changes in USD, JPY and AUD exchange rates.
Operations outside Finland accounted for 98% (97%) of net sales.
Gross margin was 50.4% (49.4%). The increase was mainly due to decreased unit
costs, contributed by increased net sales and related scale economies as well as
further optimized supply chain.
Operating result
EUR million 1-9/2014 1-9/2013 Change, % 2013
--------------------------------------------------------
Weather 4.3 6.9 -37 14.5
Controlled Environment 8.2 7.5 9 4.0
Eliminations and other -1.0 0.7 - -0.4
--------------------------------------------------------
Total 11.5 15.1 -24 18.1
--------------------------------------------------------
In January-September 2014, operating result was EUR 11.5 (15.1) million. The
decrease was mainly due to increase in operating expenses. Operating expenses
were EUR 91.7 (82.0) million and increased by 12% compared to the previous year.
The increase was mainly due to the consolidation of operating expenditures of
3TIER Inc. and Second Wind Systems Inc., which were acquired during the second
half of 2013 as well as investments in R&D related to new offering development
and renewing instrument portfolio.
Financial income and expenses were EUR 2.0 (-0.8) million for the period of
January-September 2014. The increase is mainly due to foreign exchange gains
related to valuation of USD denominated receivables.
Profit (loss) before taxes was EUR 13.5 (14.3) million for the period of
January-September 2014. Income taxes were EUR -3.2 (-5.2) million. Effective tax
rate for January-September 2014 were 23.5% (36.5%) and reflects the estimated
effective tax rate for the financial year 2014. Net result was EUR 10.3 (9.1)
million.
Earnings per share for January-September 2014 were EUR 0.57 (0.50).
Statement of financial position and cash flow
Vaisala's financial position remained strong at the end of the September 2014.
Cash and cash equivalents amounted to EUR 34.4 (47.0) million at the end of
September 2014 and Vaisala did not have any material interest bearing
liabilities.
The statement of financial position total was EUR 227.2 (217.3) million. The
solvency ratio at the end of the September 2014 was 70% (74%).
In January-September 2014, Vaisala's cash flow from operating activities was EUR
8.8 (16.2) million. The decrease was mainly due to cash tied in working capital
but also lower business profitability.
Capital expenditure and divestments
Gross capital expenditure totaled EUR 5.8 (5.8) million for January-September
2014. Depreciation was EUR 11.2 (11.1) million.
Weather Business Area
EUR million 7-9/2014 7-9/2013 Change, % 1-9/2014 1-9/2013 Change, % 2013
-------------------------------------------------------------------------------
Orders received 47.3 56.6 -16 149.8 144.2 4 208.3
Order book 131.7 109.9 20 131.7 109.9 20 116.2
Net sales, total 57.3 42.9 34 146.2 137.5 6 200.0
Products 20.1 20.2 -1 61.7 69.9 -12 97.3
Projects 24.0 15.6 54 54.0 45.7 18 70.0
Services 13.2 7.1 86 30.4 22.0 39 32.7
Operating result 8.4 1.6 411 4.3 6.9 -37 14.5
-------------------------------------------------------------------------------
In January-September 2014, orders received were EUR 149.8 (144.2) million and
increased by 4% compared to the previous year. Orders increased in all other
customer groups except in Airports and Meteorology.
After strong orders received during the preceding four quarters the order book
was EUR 131.7 (109.9) million at the end of September and increased by 20%
compared to end of September 2013. However, Weather Business Area's third
quarter 2014 orders received decreased by 16% compared to previous year. The
order book includes EUR 12 million of orders, which were consolidated from
3TIER Inc., acquired in December 2013. Of the order book EUR 85.2 million will
be delivered in 2015 or later.
In January-September 2014, Weather Business Area's net sales was EUR 146.2
(137.5) million and increased by 6% compared to the previous year. The growth
came mainly from New Weather Markets customer group but net sales increased also
in Meteorology and Airports. Weather Business Area improved its net sales in
project and services businesses and in all geographical areas. At comparable
exchange rates the net sales would have been EUR 148.4 (137.5) million and
increase would have been EUR 10.9 million or 8% from previous year. The negative
exchange rate effect was EUR 2.2 million, which was mainly due to changes in USD
and AUD exchange rates.
In January-September 2014, Weather Business Area's operating result was EUR 4.3
(6.9) million and decreased by 37% compared to the previous year. The decline
was mainly due to increased operating expenses. The increase in operating
expenses was mainly due to the consolidation of operating expenditures of 3TIER
Inc. and Second Wind Systems Inc., which were acquired during the second half of
2013 as well as investments in R&D related to new offering development and
renewing instrument portfolio.
Controlled Environment Business Area
EUR million 7-9/2014 7-9/2013 Change, % 1-9/2014 1-9/2013 Change, % 2013
------------------------------------------------------------------------------
Orders received 21.5 19.3 11 58.1 56.0 4 74.6
Order book 6.1 5.2 17 6.1 5.2 17 5.8
Net sales, total 20.6 19.0 8 57.8 55.2 5 73.2
Products 18.2 16.9 8 51.0 48.7 5 64.2
Services 2.4 2.1 12 6.9 6.5 6 9.0
Operating result 4.5 3.6 24 8.2 7.5 9 4.0
------------------------------------------------------------------------------
In January-September 2014, orders received were EUR 58.1 (56.0) million and
increased by 4% compared to the previous year. Orders received increased in both
customer groups. At the end of September 2014 the order book was EUR 6.1 (5.2)
million and increased by 17% compared to the previous year. Of the order book
EUR 1.2 million will be delivered in 2015 or later.
In January-September 2014, Controlled Environment Business Area's net sales was
EUR 57.8 (55.2) million and increased by 5% compared to the previous year. Net
sales increased in both customer groups and in all geographical areas. At
comparable exchange rates the net sales would have been EUR 59.8 (55.2) million
and increase would have been EUR 4.6 million or 8% from previous year. The
negative exchange rate effect was EUR 2.0 million, which was mainly caused by
USD and JPY exchange rate fluctuations.
In January-September 2014, Controlled Environment Business Area's operating
result was EUR 8.2 (7.5) million and increased by 9% compared to the previous
year. The increase was mainly due to improved net sales and gross margins.
Operating expenses increased compared to the previous year mainly due to
investments in R&D related to new offering development.
Research and Development
In January-September 2014, research and development expenses totaled EUR 24.6
(20.9) million, representing 12.1% (10.8%) of net sales. The increase was mainly
due to R&D expenses of the acquired companies, as well as investments in new
offering development and renewing instrument portfolio.
7-9/ 7-9/ Change, 1-9/ 1-9/ Change,
EUR million 2014 2013 % 2014 2013 % 2013
----------------------------------------------------------------
Weather 5.9 4.9 20 18.5 16.3 13 22.4
Controlled Environment 1.7 1.3 34 6.1 4.6 35 6.5
----------------------------------------------------------------
Total 7.7 6.2 23 24.6 20.9 18 28.9
----------------------------------------------------------------
In January-September 2014, Weather Business Area R&D expenses were 12.6% (11.9%)
of net sales. Controlled Environment Business Area R&D expenses were 10.6%
(8.3%) of net sales.
In the second quarter 2014, Vaisala launched an entirely new Road Weather
Station, RWS200. Combined with software, this new station is able to offer an
enhanced Road Weather Information System called iRWIS. The system consists of
intelligent roadside hardware, sophisticated decision support software and
improved measurement reliability.
Information about Vaisala's products and services can be found at
www.vaisala.com.
Personnel
The average number of personnel employed in Vaisala during January-September,
2014 was 1,618 (1,476). The number of employees at the end of September 2014 was
1,616 (1,510). At the end of 2013, the number of employees was 1,563.
At the end of September 2014, 44% (42%) of the personnel was based outside
Finland.
Vaisala 2014-2018 strategy and long-term financial targets
Vaisala's Board of Directors confirmed the 2014-2018 strategy in May 12, 2014.
Vaisala's goal of profitable growth will be achieved through the implementation
of the strategic themes: creation of customer value, reliability, and
simplification.
In Weather Business Area additional customer value will be created by building
new business around decision support services that are offered to renewable
energy, aviation and roads customers. Controlled Environment Business Area will
focus on enhancing offering and developing the sales channel for life science
and industrial customers in order to create value for customers' operations.
Reliability will create customer satisfaction and loyalty. High quality of
products and services, well-functioning customer service and on-time actions
will deliver reliable customer experience.
Simplification will create operational efficiency. Optimized global networks,
streamlined supply chains, common capabilities and continual improvement in all
functions will ensure increased efficiency of Vaisala's operations.
Vaisala's long-term financial targets
Growth: Vaisala targets an average annual growth of 5%. In selected growth
businesses such as renewable energy and life science the target is to exceed
10% annual growth.
Profitability: Vaisala's objective is profitable growth and the target is to
achieve 15% operating profit (EBIT) margin towards the end of the period.
Vaisala does not consider the long-term financial targets as market guidance for
any given year.
Near-term risks and uncertainties
Vaisala's business is exposed to changes in the global economy, politics,
conflicts, policies, regulations, Vaisala's supply chain, and accidents as well
as natural disasters and epidemics, which may affect business e.g. through order
cancellations, disturbance in logistics, travel bans, and loss of market
potential. Vaisala's capability to successfully complete investments,
acquisitions, divestments and restructurings on a timely basis and to achieve
related financial and operational targets represent a risk which may impact
revenue and profitability.
The most significant near term risks and uncertainties that may affect both
revenue and profitability relate to the company's ability to maintain its
delivery capability, availability of critical components, interruptions in
manufacturing and associated IT systems, changes in the global economy, expanded
western sanctions against Russia, spreading of epidemics, continuing conflicts
in Middle East and North Africa, currency exchange rates, customers' financing
capability, changes in customers' purchasing or investment behavior, and delays
or cancellations of orders. Changes in the competition may affect the volume and
profitability of business through introduction of new competitors and price
erosion in areas which traditionally have been strong for Vaisala. Changes in
subcontractor relations, their operations or operating environment as well as
the quality of the deliverables may have a negative impact on Vaisala's
business.
A significant part of Vaisala's business is project business. Project business
performance and schedules have dependencies to third parties, which may impact
profitability and the timing of revenue recognition. Assumptions regarding new
project and service business opportunities constitute a risk for both revenue
and profitability.
Further information about risk management in Vaisala is available on the company
website at http://www.vaisala.com/investors, Corporate Governance.
Decisions by Vaisala Corporation's Annual General Meeting
Annual General Meeting was held on Wednesday, March 26, 2014 at Vaisala's head
office in Finland. The meeting approved the financial statements and discharged
the members of the Board of Directors and the President and CEO from liability
for the financial period January 1-December 31, 2013.
Dividend
The Annual General Meeting decided a dividend of EUR 0.90 per share,
corresponding to the total of EUR 16,253,292.60. The record date for the
dividend payment was March 31, 2014 and the payment date was April 7, 2014.
Remuneration of the members of the Board of Directors
The Annual General Meeting decided that the annual fee payable to the Board
members for the term until the close of the Annual General Meeting in 2015 is:
the Chairman of the Board of Directors EUR 45,000 and each Board member EUR
35,000. Approximately 40 percent of the annual remuneration will be paid in
Vaisala Corporation's A shares acquired from the market and the rest in cash.
In addition, the Annual General Meeting decided that the compensation per
attended meeting for the Chairman of the Audit Committee is EUR 1,500 and EUR
1,000 for each member of the Audit Committee for the term until the close of the
Annual General Meeting in 2015. The compensation per attended meeting for the
Chairman and each member of the Remuneration and HR Committee and any other
committee established by the Board of Directors is EUR 1,000 for the term until
the close of the Annual General Meeting in 2015.
Composition of the Board of Directors
The Annual General Meeting confirmed that the number of Board members is seven.
Mikko Niinivaara and Raimo Voipio were re-elected for the term until the close
of the Annual General Meeting in 2017. Petra Lundström and Pertti Torstila were
elected as new members of the Board of Directors. Due to stipulations of the
Articles of Association concerning the term of the members of the Board of
Directors Petra Lundström was elected for the term until the close of the Annual
General Meeting in 2015. Pertti Torstila was elected for the term until the
close of the Annual General Meeting in 2017.
Auditor and their remuneration
The Annual General Meeting elected Deloitte & Touche Oy, Authorized Public
Accountants, as auditor of the Company until the close of the Annual General
Meeting in 2015. Deloitte & Touche Oy has informed that APA Merja Itäniemi will
act as the auditor with the principal responsibility. The Auditor's fee is paid
according to their reasonable invoice presented to the company.
Authorization for directed acquisition of own A shares
The Annual General Meeting authorized the Board of Directors to decide on the
directed acquisition of a maximum of 160,000 of the Company's own A shares in
one or more instalments with funds belonging to the Company's unrestricted
equity. The new authorization replaces the previous one and is valid until the
closing of the Annual General Meeting in 2015, however, no longer than September
26, 2015.
Authorization to transfer Company's own shares
The Annual General Meeting authorized the Board of Directors to decide on the
transfer of a maximum of 319,150 own A shares. The transfer of own shares may be
carried out in deviation from the shareholders' pre-emptive rights and may be
transferred as a directed issue without payment as part of the Company's share
based incentive plan. The authorization can also be used to grant special rights
entitling subscription of own shares, and the subscription price of the shares
can instead of cash also be paid in full or in part as contribution in kind. The
new authorization replaces the previous one and is valid until March 26, 2019.
Donations
The Annual General Meeting authorized the Board of Directors to decide on
donations of maximum EUR 250,000. The authorization is valid until the close of
the Annual General Meeting in 2015.
The organizing meeting of the Board of Directors
At its organizing meeting held after the Annual General Meeting the Board
elected Raimo Voipio to continue as the Chairman of the Board of Directors and
Yrjö Neuvo to continue as the Vice Chairman.
The composition of the Board committees was decided to be as follows:
Audit Committee
Maija Torkko was elected as the Chairman and Petra Lundström and Mikko
Niinivaara as members of the Audit Committee. The Chairman and all members of
the Audit Committee are independent both of the Company and of significant
shareholders.
Remuneration and Human Resources Committee
Raimo Voipio was elected as the Chairman and Yrjö Neuvo and Maija Torkko as
members of the Remuneration and Human Resources Committee. Raimo Voipio is
independent of the Company. Yrjö Neuvo and Maija Torkko are independent both of
the Company and of significant shareholders.
Vaisala's shares
In January-September 2014, a total number of 751,225 (2,082,898) Vaisala A
shares with a value totaling EUR 17.4 (40.8) million were traded on the NASDAQ
OMX Helsinki Ltd. On September 30, 2014 the closing price was EUR 20.90 (19.30).
The highest quotation during January-September 2014 was EUR 24.98 (22.13) and
the lowest EUR 20.45 (16.04).
On September 30, 2014, Vaisala had 18,218,364 shares, of which 3,389,351 are
series K shares and 14,829,013 are series A shares. The K shares and A shares
are differentiated by the fact that each K share entitles its owner to 20 votes
at a General Meeting of Shareholders while each A share entitles its owner to 1
vote. The A shares represent 81.4% of the total number of shares and 17.9% of
the total votes. The K shares represent 18.6% of the total number of shares and
82.1% of the total votes.
The market value of Vaisala's A shares on September 30, 2014 was EUR 306.6
(283.1) million, excluding the Company's treasury shares. Valuing the K shares,
which are not traded on the stock market, at the rate of the A share's closing
price on the last day of September, the total market value of all the A and K
shares together was EUR 377.4 (348.5) million, excluding the Company's treasury
shares.
More information about Vaisala's share and shareholders are presented on the
website, www.vaisala.com/investors.
Treasury shares and parent company shares
At the end of September 2014, the Company held a total of 159,150 (159,150)
Vaisala A shares, which represented 0.9% (0.9%) of the share capital and 0.2%
(0.2%) of the votes. The consideration paid for these shares was EUR 2,527,160
(2,527,160).
Market outlook
After several consecutive quarters of favorable macroeconomic development, many
key cyclical indicators have lately softened especially in Europe. Still,
economic forecasts refer to moderate growth and Vaisala is expecting solid
short-term outlook for weather observation, industrial measurement and life
science markets. Markets are increasingly competitive. In weather observations
market it remains challenging to forecast customers' timing for decision making
and acceptance of larger customer projects, having potentially material impact
on overall Vaisala weather business.
In EMEA demand for weather observation solutions is expected to remain solid
overall, supported by European market. Economic weakness and currency
depreciation in Russia and some neighboring countries as well as conflicts in
Middle East weaken outlook locally. European economic conditions do not indicate
significant improvement in market environment for industrial measurement and
life science solutions.
In Americas short-term market outlook for weather observation, industrial
measurement and life science solutions is favorable, supported by the U.S.
customers. In Latin America weakened economic conditions shadow outlook.
Weather observation market outlook in APAC remains solid, although business
environment in China is expected to weaken due to ending of current five-year
plan next year. Market outlook for industrial measurement and life science
solutions in APAC is stable.
Business outlook for 2014
Vaisala estimates its full year 2014 net sales to be in the range of EUR
290-305 million and the operating result (EBIT) in the range of EUR 20-30
million.
Vantaa, October 22, 2014
Vaisala Corporation
Board of Directors
The forward-looking statements in this release are based on the current
expectations, known factors, decisions and plans of Vaisala's management.
Although the management believes that the expectations reflected in these
forward-looking statements are reasonable, there is no assurance that these
expectations would prove to be correct. Therefore, the results could differ
materially from those implied in the forward-looking statements, due to for
example changes in the economic, market and competitive environments, regulatory
or other government-related changes, or shifts in exchange rates.
Financial information and changes in accounting policies
This interim financial report has been prepared in accordance with IAS 34,
Interim Financial Reporting, following the same accounting policies and
principles as in the annual financial statements for 2013. All figures in the
interim report are Group figures. All presented figures have been rounded and
consequently the sum of individual figures may deviate from the sum presented.
The preparation of the financial statements in accordance with IFRS requires
Vaisala's management to make estimates and assumptions that affect the valuation
of the reported assets and liabilities and the recognition of income and
expenses in the statement of income. Although the estimates are based on the
management's best knowledge at the date of the interim report, actual results
may differ from the estimates.
The interim financial report is unaudited.
Consolidated Statement of Income
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
EUR million 2014 2013 2014 2013 2013
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Net sales 77.9 61.9 204.0 192.7 273.2
Costs of sales -36.8 -31.9 -101.1 -97.6 -138.9
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Gross profit 41.1 30.0 102.9 95.1 134.3
Sales, marketing and administrative costs -20.8 -19.0 -67.1 -60.9 -84.7
Research and development costs -7.7 -6.2 -24.6 -20.9 -28.9
Other operating income and expense 0.0 0.1 0.3 1.7 -2.6
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Operating profit (loss) 12.6 4.9 11.5 15.1 18.1
Share of result in associated companies - - - - 0.1
Financial income and expenses, net 2.0 -0.5 2.0 -0.8 -1.0
----------------------------------------------------------------------------
Profit (loss) before taxes 14.6 4.4 13.5 14.3 17.2
Income taxes -3.4 -1.8 -3.2 -5.2 -6.2
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Profit (loss) for the period 11.1 2.6 10.3 9.1 10.9
Earnings per share, EUR 0.62 0.14 0.57 0.50 0.60
Diluted earnings per share, EUR 0.61 0.14 0.56 0.50 0.60
Consolidated Statement of Comprehensive Income
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
EUR million 2014 2013 2014 2013 2013
-----------------------------------------------------------------------
Items that will not be reclassified to
profit or loss
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Actuarial loss on post-employment benefits 0.0 0.0 0.0 0.0 -0.1
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Total 0.0 0.0 0.0 0.0 -0.1
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Items that may be reclassified
subsequently to profit or loss
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Currency translation differences 2.1 -1.3 2.5 -2.3 -3.2
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Total 2.1 -1.3 2.5 -2.3 -3.2
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Total other comprehensive income 2.1 -1.3 2.5 -2.3 -3.3
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Total comprehensive income 13.2 1.4 12.8 6.9 7.6
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Consolidated Statement of Financial Position
EUR million
-------------------------------------------------------------------------------
September September December 31,
Assets 30, 2014 30, 2013 2013
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Non-current assets
Intangible assets 37.4 31.8 35.9
Property, plant and equipment 45.3 47.6 46.8
Investments 0.1 0.1 0.1
Investment in associated companies 0.8 0.7 0.7
Long-term receivables 0.3 1.0 0.9
Deferred tax assets 9.1 5.3 8.0
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Total non-current assets 93.0 86.4 92.5
Current assets
Inventories 36.7 34.2 28.6
Trade and other receivables 61.7 48.6 57.4
Income tax receivables 1.3 1.0 1.4
Cash and cash equivalents 34.4 47.0 45.8
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Total current assets 134.1 130.9 133.2
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Total assets 227.2 217.3 225.6
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Shareholders' equity and liabilities
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Shareholders' equity
Share capital 7.7 7.7 7.7
Other reserves 2.2 1.4 1.5
Cumulative translation adjustment -1.1 -2.8 -3.6
Treasury shares -2.5 -2.5 -2.5
Retained earnings 149.9 154.3 155.9
-------------------------------------------------------------------------------
Total shareholders' equity 156.1 158.1 158.9
Non-current liabilities
Interest-bearing liabilities 0.0 0.1 0.0
Post-employment benefit obligations 0.7 0.4 0.7
Deferred tax liabilities 5.2 1.4 5.2
Provisions for other liabilities and
charges - 0.1 -
Other long-term liabilities 3.4 2.4 2.1
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Total non-current liabilities 9.3 4.3 8.0
Current liabilities
Interest-bearing liabilities 0.0 0.4 0.0
Advances received 5.3 3.7 3.7
Income tax liabilities 0.9 0.7 0.3
Trade and other payables 55.5 50.2 54.8
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Total current liabilities 61.7 54.9 58.7
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Total shareholders' equity and liabilities 227.2 217.3 225.6
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Consolidated Statement of Changes in Shareholders' Equity
Share Share Other Treasury Translation Retained
EUR million capital premium reserves shares adjustment earnings Total
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Balance at Jan
1, 2013 7.7 22.3 0.7 -2.5 -0.5 161.4 189.2
Profit (loss)
for the period 9.1 9.1
Other
comprehensive
income -2.3 -2.3
Dividend paid -16.2 -16.2
Reclassification -22.3 22.3 0.0
Return of
capital -22.2 -22.2
Share-based
payment 0.5 0.5
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Balance at
September
30, 2013 7.7 1.4 -2.5 -2.8 154.3 158.1
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Share Other Treasury Translation Retained
EUR million capital reserves shares adjustment earnings Total
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Balance at Jan
1, 2014 7.7 1.5 -2.5 -3.6 155.9 158.9
Profit (loss)
for the period 10.3 10.3
Other
comprehensive
income 0.0 2.5 2.5
Dividend paid -16.3 -16.3
Share-based
payment 0.7 0.7
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Balance at
September
30, 2014 7.7 2.2 -2.5 -1.1 149.9 156.1
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Consolidated Cash Flow Statement
EUR million 1-9/2014 1-9/2013 1-12/2013
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Cash flows from operating activities
Cash receipts from customers 205.2 205.1 282.8
Other income from business operations 0.3 0.2 0.2
Cash paid to suppliers and employees -194.9 -181.8 -246.3
Financials paid, net 1.4 -0.9 -0.8
Income taxes paid, net -3.2 -6.3 -7.7
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Cash flow from operating activities 8.8 16.2 28.2
Cash flows from investing activities
Acquisition of subsidiary, net of cash
acquired - -1.2 -12.3
Capital expenditure on fixed assets -5.8 -5.8 -7.1
Divestments 1.1 2.5 2.6
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Cash flow from investing activities -4.7 -4.5 -16.8
Cash flows from financing activities
Return of capital - -22.2 -22.2
Dividends paid -16.2 -16.2 -16.2
Purchase of treasury shares - - -
Change in loan receivables 0.0 0.0 -0.1
Change in leasing liabilities 0.0 0.0 -0.6
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Cash flow from financing activities -16.2 -38.5 -39.1
Cash and cash equivalents at the beginning of
period 45.8 74.8 74.8
Net increase (+) / decrease (-) in cash and
cash equivalents -12.2 -26.8 -27.7
Effect from changes in exchange rates 0.8 -1.0 -1.3
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Cash and cash equivalents at the end of period 34.4 47.0 45.8
Notes for Interim Report
Orders Received by Business Area
EUR million 7-9/2014 7-9/2013 1-9/2014 1-9/2013 1-12/2013
-----------------------------------------------------------------------------
Weather 47.3 56.6 149.8 144.2 208.3
Controlled environment 21.5 19.3 58.1 56.0 74.6
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Total 68.8 76.0 207.9 200.2 282.9
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Net Sales by Business Area
EUR million 7-9/2014 7-9/2013 1-9/2014 1-9/2013 1-12/2013
-----------------------------------------------------------------------------
Weather
Products 20.1 20.2 61.7 69.9 97.3
Projects 24.0 15.6 54.0 45.7 70.0
Services 13.2 7.1 30.4 22.0 32.7
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Total 57.3 42.9 146.2 137.5 200.0
Controlled environment
Products 18.2 16.9 51.0 48.7 64.2
Services 2.4 2.1 6.9 6.5 9.0
-----------------------------------------------------------------------------
Total 20.6 19.0 57.8 55.2 73.2
Sales, eliminations and others 0.0 0.0 0.0 0.0 0.1
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Total Sales 77.9 61.9 204.0 192.7 273.2
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Operating Result by Business Area
EUR million 7-9/2014 7-9/2013 1-9/2014 1-9/2013 1-12/2013
-----------------------------------------------------------------------------
Weather 8.4 1.6 4.3 6.9 14.5
Controlled environment 4.5 3.6 8.2 7.5 4.0
Eliminations and other -0.3 -0.4 -1.0 0.7 -0.4
-----------------------------------------------------------------------------
Total 12.6 4.9 11.5 15.1 18.1
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Net Sales by Geographical Area
EUR million 7-9/2014 7-9/2013 1-9/2014 1-9/2013 1-12/2013
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EMEA 29.5 22.5 76.0 69.6 98.6
Americas 28.4 25.2 75.8 73.9 107.8
APAC 20.0 14.1 52.2 49.1 66.9
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Total 77.9 61.9 204.0 192.7 273.2
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Personnel
7-9/2014 7-9/2013 1-9/2014 1-9/2013 1-12/2013
-------------------------------------------------------------------------------
Average personnel 1,640 1,515 1,618 1,476 1,485
Personnel at the end of period 1,616 1,510 1,616 1,510 1,563
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Financial Instruments
7-9/2014 7-9/2013 1-9/2014 1-9/2013 1-12/2013
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Nominal value of financial
derivatives,
EUR million 19.5 20.1 19.5 20.1 19.7
Fair values of financial
derivatives,
assets, EUR million 0.0 0.5 0.0 0.5 0.6
Fair values of financial
derivatives,
liabilities, EUR million 1.3 0.0 1.3 0.0 0.0
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Financial derivatives consist solely of foreign currency forwards and they are
measured based on price information derived from active markets and commonly
used valuation methods (Fair value hierarchy 2). Financial contracts are
executed only with counterparties that have high credit ratings.
Share Information
7-9/2014 7-9/2013 1-9/2014 1-9/2013 1-12/2013
-------------------------------------------------------------------------------
Number of shares outstanding,
thousand 18,059 18,059 18,059 18,059 18,059
Number of treasury shares,
thousand 159 159 159 159 159
Number of shares, diluted,
thousand 18,249 18,197 18,249 18,197 18,187
Number of shares, weighted
average,
thousand 18,059 18,059 18,059 18,059 18,059
Number of shares traded,
thousand 129 341 751 2,083 2,877
Share price, highest, EUR 24.20 22.13 24.98 22.13 23.47
Share price, lowest, EUR 20.45 18.22 20.45 16.04 16.04
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Key Ratios
7-9/2014 7-9/2013 1-9/2014 1-9/2013 1-12/2013
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Earnings per share, EUR 0.62 0.14 0.57 0.50 0.60
Earnings per share, diluted, EUR 0.61 0.14 0.56 0.50 0.60
Equity per share, EUR 8.65 8.75 8.65 8.75 8.80
Cash flow from operating
activities per
share, EUR 0.57 0.60 0.49 0.89 1.55
Solvency ratio, % 70.4 74.0 70.4 74.0 71.6
Return on equity, % 8.7 7.0 6.3
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Further information
Kaarina Muurinen, CFO
Mobile +358 40 577 5066
Vaisala Corporation
Briefing and Audiocast
Briefing for analysts and media will be arranged in Hotel Kämp, Paavo Nurmi
meeting room, Pohjoisesplanadi 29, Helsinki starting at 4 p.m. (EEST) today. The
presentation of Kjell Forsén, President and CEO, at the briefing will be
audiocast live at www.vaisala.com/investors starting at 4 p.m. A recording of
the audiocast will be published at the same address at 6 p.m.
Distribution:
NASDAQ OMX Helsinki
Key media
www.vaisala.com
Vaisala is a global leader in environmental and industrial measurement. Building
on 78 years of experience, Vaisala contributes to a better quality of life by
providing a comprehensive range of innovative observation and measurement
products and services for chosen weather-related and industrial markets.
Headquartered in Finland, Vaisala employs approximately 1,500 professionals
worldwide and is listed on the NASDAQ OMX Helsinki stock exchange.
www.vaisala.com www.twitter.com/VaisalaGroup
[HUG#1864787]
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