2016-10-18 08:00:02 CEST
2016-10-18 08:00:02 CEST
REGULATED INFORMATION
Ponsse Oyj - Interim report (Q1 and Q3)
PONSSE’S INTERIM REPORT FOR 1 JANUARY – 30 SEPTEMBER 2016
Vieremä, Finland, 2016-10-18 08:00 CEST (GLOBE NEWSWIRE) --
PONSSE PLC, STOCK EXCHANGE RELEASE, 18 OCTOBER 2016, 9:00 a.m.
PONSSE’S INTERIM REPORT FOR 1 JANUARY – 30 SEPTEMBER 2016
– Net sales amounted to EUR 349.9 (Q1-Q3/2015 310.2) million.
– Q3 net sales amounted to EUR 112.7 (Q3/2015 103.6) million.
– Operating result totalled EUR 37.0 (Q1-Q3/2015 34.2) million, equalling 10.6
(11.0) per cent of net sales.
– Q3 operating result totalled EUR 10.8 (Q3/2015 12.2) million, equalling 9.6
(11.7) per cent of net sales.
– Profit before taxes was EUR 38.5 (Q1-Q3/2015 28.5) million.
– Cash flow from business operations was EUR 14.9 (13.3) million.
– Earnings per share were EUR 1.08 (0.85).
– Equity ratio was 47.4 (41.4) per cent.
– Order books stood at EUR 163.2 (173.7) million.
PRESIDENT AND CEO JUHO NUMMELA:
Demand for PONSSE forest machines continued to be good. Order intake was good
during the third quarter and the order books were strong, totalling EUR 163.2
(173.7) million at the end of the period under review. International business
operations accounted for 77.4 (75.0) percent of net sales.
The company's net sales for the third quarter were EUR 112.7 (103.6) million
and the growth in net sales was 8.8 percent compared with the comparable
period. Compared with the comparable period, the growth in net sales for the
first three quarters was 12.8 percent. Net sales of service operations
continued to grow, but the net sales of the trade-in machine business took a
downward turn in the third quarter.
The operating profit for the quarter amounted to EUR 10.8 (12.2) million and
for the first three quarters of the year EUR 37.0 (34.2) million, representing
an increase of 8.2 percent. The operating result equalled 9.6 (11.7) percent of
net sales for the period under review and 10.6 (11.0) percent for the first
three quarters of the year. In terms of invoicing, the quarter fell short of
the expectations with regard to both new and trade-in machines, which
contributed to the increase in capital tied up in business operations. However,
cumulative cash flow amounted to EUR 14.9 (13.3) million.
Our investments in the service network and the Vieremä factory are progressing
nicely. Investments have been made in new service centres in France, Uruguay
and the United States, and the expansion of the Iisalmi logistics centre is
complete. Earthwork and piling are in progress at the expansion of the Vieremä
factory. The expansion is due for completion in late 2017.
NET SALES
Consolidated net sales for the period under review amounted to EUR 349.9
(310.2) million, which is 12.8 per cent more than in the comparison period.
International business operations accounted for 77.4 (75.0) per cent of net
sales.
Net sales were regionally distributed as follows: Northern Europe 37.7 (38.8)
per cent, Central and Southern Europe 21.3 (18.9) per cent, Russia and Asia
14.4 (10.6) per cent, North and South America 25.1 (31.5) per cent and other
countries 1.5 (0.3) per cent.
PROFIT PERFORMANCE
The operating result amounted to EUR 37.0 (34.2) million. The operating result
equalled 10.6 (11.0) per cent of net sales for the period under review.
Consolidated return on capital employed (ROCE) stood at 27.6 (25.5) per cent.
Staff costs for the period totalled EUR 52.7 (47.3) million. Other operating
expenses stood at EUR 32.2 (29.3) million. The net total of financial income
and expenses amounted to EUR 1.4 (-5.7) million. Exchange rate gains and losses
with a net effect of EUR 1.9 (-4.6) million were recognised under financial
items for the period. Result for the period under review totalled EUR 30.3
(23.7) million. Diluted and undiluted earnings per share (EPS) came to EUR 1.08
(0.85).
STATEMENT OF FINANCIAL POSITION AND FINANCING ACTIVITIES
At the end of the period under review, the total consolidated statements of
financial position amounted to EUR 287.7 (247.1) million. Inventories stood at
EUR 127.9 (110.0) million. Trade receivables totalled EUR 34.9 (31.2) million,
while liquid assets stood at EUR 18.4 (10.6) million. Group shareholders’
equity stood at EUR 133.4 (101.1) million and parent company shareholders’
equity (FAS) at EUR 127.0 (115.9) million. The amount of interest-bearing
liabilities was EUR 69.8 (72.3) million. The company has used 33 per cent of
its credit facility limit. The parent company's net receivables from other
Group companies stood at EUR 87.7 (79.4) million. The parent company’s
receivables from subsidiaries mainly consisted of trade receivables.
Consolidated net liabilities totalled EUR 51.3 (61.7) million, and the
debt-equity ratio (net gearing) was 38.5 (61.0) per cent. The equity ratio
stood at 47.4 (41.4) percent at the end of the period under review.
Cash flow from operating activities amounted to EUR 14.9 (13.3) million. Cash
flow from investment activities came to EUR -17.8 (-20.8) million.
ORDER INTAKE AND ORDER BOOKS
Order intake for the period totalled EUR 364.8 (333.0) million, while
period-end order books were valued at EUR 163.2 (173.7) million.
DISTRIBUTION NETWORK
No changes took place in the Group structure during the period under review.
The subsidiaries included in the Ponsse Group are Ponsse AB, Sweden; Ponsse AS,
Norway; Ponssé S.A.S., France; Ponsse UK Ltd, the United Kingdom; Ponsse North
America, Inc., the United States; Ponsse Latin America Ltda, Brazil; Ponsse
Uruguay S.A., Uruguay; OOO Ponsse, Russia; Ponsse Asia-Pacific Ltd, Hong Kong;
Ponsse China Ltd, China and Epec Oy, Finland. The Group includes also the
property company OOO Ocean Safety Center, Russia. Sunit Oy, Finland, is an
associate in which Ponsse Plc has a holding of 34 per cent.
R&D AND CAPITAL EXPENDITURE
Group’s R&D expenses during the period under review totalled EUR 8.9 (8.8)
million, of which EUR 2.5 (2.4) million was capitalised.
Capital expenditure totalled EUR 17.9 (20.8) million. It consisted in addition
to capitalised R&D expenses of investments in buildings and ordinary
maintenance and replacement investments for machinery and equipment.
MANAGEMENT
The following persons were members of the Management Team: Juho Nummela,
President and CEO, acting as the chairman; Petri Härkönen, CFO; Juha Inberg,
Technology and R&D Director; Tapio Mertanen, Service Director; Paula Oksman, HR
Director; Tommi Väänänen, Director of Delivery Chain Process and Jarmo Vidgrén,
Deputy CEO, Sales and Marketing Director. The company management has regular
management liability insurance.
The area director organisation of sales is led by Jarmo Vidgrén, the Group's
sales and marketing director, and Tapio Mertanen, service director. Area
directors and managing directors of subsidiaries report to Jarmo Vidgrén,
Ponsse Plc's sales and marketing director.
The geographical distribution and the responsible persons are presented below:
Northern Europe:
Jani Liukkonen (Finland),
Carl-Henrik Hammar (Sweden, Denmark),
Jussi Hentunen (the Baltic countries) and
Sigurd Skotte (Norway),
Central and Southern Europe:
Janne Vidgrén (Austria, Poland, Romania, Germany, Slovakia, the Czech Republic
and Hungary),
Clément Puybaret (France),
Norbert Schalkx (Spain and Portugal) and
Gary Glendinning (the United Kingdom and Ireland)
Russia and Asia:
Jaakko Laurila (Russia, Belarus),
Norbert Schalkx (Japan, Australia and South Africa) and
Risto Kääriäinen (China),
North and South America:
Pekka Ruuskanen (the United States),
Eero Lukkarinen (Canada),
Jussi Hentunen (Chile),
Marko Mattila (Brazil) and
Martin Toledo (Uruguay).
PERSONNEL
The Group had an average staff of 1,428 (1,318) during the period and employed
1,456 (1,351) people at period-end.
SHARE PERFORMANCE
The company’s registered share capital consists of 28,000,000 shares. The
trading volume of Ponsse Plc shares for 1 January – 30 September 2016 totalled
2,077,160, accounting for 7.4 per cent of the total number of shares. Share
turnover amounted to EUR 45.4 million, with the period’s lowest and highest
share prices amounting to EUR 15.57 and EUR 28.40, respectively.
At the end of the period, shares closed at EUR 25.00, and market capitalisation
totalled EUR 700.0 million.
At the end of the period under review, the company held 33,092 treasury shares.
ANNUAL GENERAL MEETING
A separate release was issued on 12 April 2016 regarding the authorizations
given to the Board of Directors and other resolutions at the AGM.
GOVERNANCE
In its decision-making and administration, the company observes the Finnish
Limited Liability Companies Act, other regulations governing publicly listed
companies and the company’s Articles of Association. The company’s Board of
Directors has adopted the Code of Governance that complies with the Finnish
Corporate Governance Code approved by the Board of the Securities Market
Association in 2015. The purpose of the code is to ensure that the company is
professionally managed and that its business principles and practices are of a
high ethical and professional standard.
The Code of Governance is available on Ponsse’s website in the Investors
section.
RISK MANAGEMENT
Risk management is based on the company’s values, as well as strategic and
financial objectives. Risk management aims to support the achievement of the
objectives specified in the company’s strategy, as well as to ensure the
financial development of the company and the continuity of its business.
Furthermore, risk management aims to identify, assess and monitor
business-related risks which may influence the achievement of the company’s
strategic and financial goals or the continuity of its business. Decisions on
the necessary measures to anticipate risks and react to observed risks are made
on the basis of this information.
Risk management is a part of regular daily business, and it is also included in
the management system. Risk management is controlled by the risk management
policy approved by the Board.
A risk is any event that may prevent the company from reaching its objectives
or that threatens the continuity of business. On the other hand, a risk may
also be a positive event, in which case the risk is treated as an opportunity.
Each risk is assessed on the basis of its impact and probability. Methods of
risk management include avoiding, mitigating and transferring risks. Risks can
also be managed by controlling and minimising their impact.
SHORT-TERM RISK MANAGEMENT
The prolonged insecurity in the world economy and weak economic situation may
result in a decline in the demand for forest machines. The uncertainty may be
increased by the volatility of developing countries’ foreign exchange markets.
The geopolitical situation, in particular, will increase the uncertainty
through financial market operations and sanctions.
The parent company monitors the changes in the Group’s internal and external
trade receivables and the associated risk of impairment.
The key objective of the company’s financial risk management policy is to
manage liquidity, interest and currency risks. The company ensures its
liquidity through credit limit facilities agreed with a number of financial
institutions. The effect of adverse changes in interest rates is minimised by
utilising credit linked to different reference rates and by concluding interest
rate swaps. The effects of currency rate fluctuations are mitigated through
derivative contracts.
Changes taking place in the fiscal and customs legislation in countries to
which Ponsse exports may hamper the company’s export trade or its
profitability.
OUTLOOK FOR THE FUTURE
After the very strong performance in 2015, the Group’s euro-denominated
operating profit is expected to be on a par with 2015 in 2016.
Ponsse's strongly reformed and competitive product range and new service
solutions have significantly grown the company. Our investments are focused on
developing the level of service and capacity of the supply chain and spare part
logistics and developing the service network in Finland and abroad.
The expansion of the Vieremä factory has begun, and the investment in the
Iisalmi logistics centre has been completed. The factory investment is
associated with the development of the Vieremä factory's safety, productivity,
product quality and capacity during the next two years. The total investment in
the factory is approximately EUR 32 million.
PONSSE GROUP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000)
IFRS IFRS IFRS
1-9/16 1-9/15 1-12/15
NET SALES 349,856 310,199 461,928
Increase (+)/decrease (-) in inventories of 14,080 9,471 -1,021
finished goods and work in progress
Other operating income 1,348 1,310 2,152
Raw materials and services -234,546 -202,998 -289,294
Expenditure on employment-related benefits -52,689 -47,265 -67,554
Depreciation and amortisation -8,824 -7,186 -9,890
Other operating expenses -32,223 -29,332 -40,335
OPERATING RESULT 37,001 34,199 55,987
Share of results of associated companies 87 -10 -50
Financial income and expenses 1,394 -5,733 -5,552
RESULT BEFORE TAXES 38,482 28,456 50,385
Income taxes -8,157 -4,714 -9,105
NET RESULT FOR THE PERIOD 30,324 23,742 41,280
OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE
RESULT:
Translation differences related to foreign units 561 1,584 880
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD 30,885 25,326 42,160
Diluted and undiluted earnings per share 1.08 0.85 1.48
IFRS IFRS
7-9/16 7-9/15
NET SALES 112,721 103,561
Increase (+)/decrease (-) in inventories of -3,159 -3,249
finished goods and work in progress
Other operating income 475 539
Raw materials and services -70,065 -62,835
Expenditure on employment-related benefits -15,844 -13,839
Depreciation and amortisation -3,007 -2,582
Other operating expenses -10,331 -9,445
OPERATING RESULT 10,789 12,150
Share of results of associated companies -9 36
Financial income and expenses -531 -4,920
RESULT BEFORE TAXES 10,249 7,266
Income taxes -2,852 -510
NET RESULT FOR THE PERIOD 7,396 6,757
OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE
RESULT:
Translation differences related to foreign units -144 -210
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD 7,252 6,547
Diluted and undiluted earnings per share 0.26 0.24
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000)
IFRS IFRS IFRS
ASSETS 30 Sep 16 30 Sep 15 31 Dec 15
NON-CURRENT ASSETS
Intangible assets 18,935 16,787 18,009
Goodwill 3,824 3,822 3,842
Property, plant and equipment 67,454 59,666 59,294
Financial assets 99 105 105
Investments in associated companies 844 857 817
Non-current receivables 2,393 3,101 2,134
Deferred tax assets 3,624 3,205 2,786
TOTAL NON-CURRENT ASSETS 97,173 87,542 86,988
CURRENT ASSETS
Inventories 127,865 110,003 104,584
Trade receivables 34,868 31,229 40,199
Income tax receivables 517 595 104
Other current receivables 8,867 7,167 9,288
Cash and cash equivalents 18,380 10,602 26,495
TOTAL CURRENT ASSETS 190,498 159,596 180,670
TOTAL ASSETS 287,671 247,138 267,658
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Share capital 7,000 7,000 7,000
Other reserves 2,452 2,452 2,452
Translation differences -235 -92 -796
Treasury shares -346 -346 -346
Retained earnings 124,544 92,064 109,602
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS 133,415 101,078 117,912
NON-CURRENT LIABILITIES
Interest-bearing liabilities 48,567 48,854 39,346
Deferred tax liabilities 659 710 905
Other non-current liabilities 2 2,436 7
TOTAL NON-CURRENT LIABILITIES 49,228 51,999 40,259
CURRENT LIABILITIES
Interest-bearing liabilities 21,258 23,421 23,056
Provisions 7,893 6,255 6,120
Tax liabilities for the period 1,976 2,315 1,906
Trade creditors and other current liabilities 73,902 62,069 78,405
TOTAL CURRENT LIABILITIES 105,028 94,060 109,487
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 287,671 247,138 267,658
CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000)
IFRS IFRS IFRS
1-9/16 1-9/15 1-12/15
CASH FLOWS FROM OPERATING ACTIVITIES:
Net result for the period 30,324 23,742 41,280
Adjustments:
Financial income and expenses -1,394 5,733 5,552
Share of the result of associated companies -87 10 50
Depreciation and amortisation 8,824 7,186 9,890
Income taxes 8,157 4,714 9,105
Other adjustments -229 -425 -26
Cash flow before changes in working capital 45,596 40,960 65,850
Change in working capital:
Change in trade receivables and other receivables 5,815 -8,318 -19,666
Change in inventories -23,281 -17,269 -11,850
Change in trade creditors and other liabilities -4,402 1,139 17,238
Change in provisions for liabilities and charges 1,773 1,508 1,373
Interest received 168 129 224
Interest paid -583 -712 -1,069
Other financial items -608 1,068 723
Income taxes paid -9,579 -5,230 -8,840
NET CASH FLOWS FROM OPERATING ACTIVITIES (A) 14,899 13,275 43,982
CASH FLOWS USED IN INVESTING ACTIVITIES
Investments in tangible and intangible assets -17,891 -20,785 -24,360
Proceeds from sale of tangible and intangible assets 88 0 193
NET CASH FLOWS USED IN INVESTMENT ACTIVITIES (B) -17,804 -20,785 -24,167
CASH FLOWS FROM FINANCING ACTIVITIES
Sales of treasury shares 0 1,882 1,118
Withdrawal/Repayment of current loans 10,000 7,936 3,000
Withdrawal of non-current loans 10 12,436 17,520
Repayment of non-current loans -2,143 -3,265 -9,659
Payment of finance lease liabilities 131 4,966 -167
Change in non-current receivables -361 237 216
Dividends paid -15,382 -12,586 -12,586
NET CASH FLOWS FROM FINANCING ACTIVITIES (C) -7,745 11,606 -558
Change in cash and cash equivalents (A+B+C) -10,650 4,096 19,257
Cash and cash equivalents on 1 Jan 26,495 12,719 12,719
Impact of exchange rate changes 2,534 -6,213 -5,481
Cash and cash equivalents on 30 Sep/31 Dec 18,380 10,602 26,495
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR 1,000)
A = Share capital
B = Share premium and other reserves
C = Translation differences
D = Treasury shares
E = Retained earnings
F = Total shareholders’
equity
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS
A B C D E F
SHAREHOLDERS’ EQUITY 1 JAN 7,000 2,452 -796 -346 109,602 117,912
2016
Translation differences 561 561
Result for the period 30,324 30,324
Total comprehensive income 561 30,324 30,885
for the period
Dividend distribution -15,382 -15,382
SHAREHOLDERS' EQUITY 30 SEP 7,000 2,452 -235 -346 124,544 133,415
2016
SHAREHOLDERS’ EQUITY 1 JAN 7,000 130 -1,676 -2,228 82,790 86,016
2015
Translation differences 1,584 1,584
Result for the period 23,742 23,742
Total comprehensive income 1,584 23,742 25,326
for the period
Dividend distribution -12,586 -12,586
Matching Share Plan 2,422 1,882 -1,882 2,422
Other changes -100 -100
SHAREHOLDERS' EQUITY 30 SEP 7,000 2,452 -92 -346 92,064 101,078
2015
30 Sep 30 Sep 31 Dec 15
16 15
1. LEASING COMMITMENTS (EUR 1,000) 1,102 857 914
2. CONTINGENT LIABILITIES (EUR 1,000) 30 Sep 16 30 Sep 15 31 Dec 15
Guarantees given on behalf of others 532 486 462
Repurchase commitments 2 164 3,518 4,290
Other commitments 225 26 276
TOTAL 2,921 4,030 5,028
3. PROVISIONS (EUR 1,000) Guarantee provision
1 January 2016 6,120
Provisions added 2,743
Provisions cancelled -970
30 September 2016 7,893
KEY FIGURES AND RATIOS 30 Sep 16 30 Sep 15 31 Dec 15
R&D expenditure, MEUR 8.9 8.8 12.2
Capital expenditure, MEUR 17.9 20.8 24.4
as % of net sales 5.1 6.7 5.3
Average number of employees 1,428 1,318 1,329
Order books, MEUR 163.2 173.7 158.1
Equity ratio, % 47.4 41.4 44.8
Diluted and undiluted earnings per share (EUR) 1.08 0.85 1.48
Equity per share (EUR) 4.76 3.61 4.21
FORMULAE FOR FINANCIAL INDICATORS
Return on capital employed, %:
Result before tax + financial expenses
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Shareholder´s equity + interest-bearing financial liabilities (average during
the year) * 100
Average number of employees:
Average of the number of personnel at the end of each month. The calculation
has been adjusted for part-time employees.
Net gearing, %:
Interest-bearing financial liabilities – cash and cash equivalents
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---
Shareholders’ equity * 100
Equity ratio, %:
Shareholders’ equity + Non-controlling interests
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Balance sheet total - advance payments received * 100
Earnings per share:
Net result for the period - Non-controlling interests
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---------------------------
Average number of shares during the accounting period, adjusted for share issues
Equity per share:
Shareholders’ equity
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Number of shares on the balance sheet date, adjusted for share issues
ORDER INTAKE (EUR million) 1-9/16 1-9/15 1-12/15
Ponsse Group 364.8 333.0 469.4
The interim report has been prepared observing the recognition and valuation
principles of IFRS standards, but not all of the requirements of IAS 34 have
been complied with. The same accounting principles were observed for the
interim report as for the annual financial statements dated 31 December 2015.
In addition to the consolidated financial statements according to IFRS, the
interim report presents the above-mentioned indicators that aim to illustrate
the operational performance and profitability of the company. The Group has
applied ESMA's (the European Securities and Markets Authority) new Guidelines
on Alternative Performance Measures, which entered into effect on 3 July 2016,
and defined these indicators in accordance with the presented calculation
formulas. The alternative performance measures can be calculated directly from
the figures presented in the consolidated financial statements.
The above figures have not been audited.
The above figures have been rounded and may therefore differ from those given
in the official financial statements.
This communication includes future-oriented statements that are based on the
assumptions currently made by the company’s management and its current
decisions and plans. Although the management believes that the future
expectations are well founded, there is no certainty that these expectations
will prove to be correct. This is why the results may significantly deviate
from the assumptions included in the future-oriented statements as a result of,
among other things, changes in the economy, markets, competitive conditions,
legislation or currency exchange rates.
Vieremä, 18 October 2016
PONSSE PLC
Juho Nummela
President and CEO
FURTHER INFORMATION
Juho Nummela, President and CEO, tel. +358 20 768 8914 or +358 400 495 690
Petri Härkönen, CFO, tel. +358 20 768 8608 or +358 50 409 8362
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
www.ponsse.com
Ponsse Plc is a company specialising in the sales, manufacture, servicing and
technology of cut-to-length method forest machines and is driven by genuine
interest in its customers and their business. Ponsse develops and manufactures
sustainable and innovative harvesting solutions based on customers’ needs.
The company was established by forest machine entrepreneur Einari Vidgrén in
1970, and it has been a leader in timber harvesting solutions based on the
cut-to-length method ever since. Ponsse is headquartered in Vieremä, Finland.
The company’s shares are quoted on the NASDAQ OMX Nordic List.
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