Componenta - Company Announcement

Preliminary information on Componenta Corporation Financial Statements 1 January - 31 December 2015

Componenta Corporation    Stock Exchange Release 9.2.2016 at 8.15

January - December 2015 in brief

  -- Order book decreased 14% from the previous year to MEUR 77 (MEUR 89).
  -- The Group’s net sales in the review period were MEUR 495 (MEUR 495).
  -- EBITDA excluding one-time items and exchange rate differences of balance
     sheet items was MEUR 23.9 (MEUR 35.8).
  -- Operating profit excluding one-time items and exchange rate differences of
     balance sheet items (“operating profit on business operations”) was MEUR
     6.0 (MEUR 17.8).
  -- The result after financial items excluding one-time items and exchange rate
     differences of operative balance sheet items in the review period was MEUR
     -19.4 (MEUR -9.5). The result after financial items excluding one-time
     items was MEUR -18.3 (MEUR -12.2).
  -- Componenta announced on 5 February 2016 to postpone publishing of Financial
     Statements Bulletin to 11 March 2016 because of ongoing strategy process,
     restructuring of operations and financial negotiations.
  -- The company’s strategy will affect the production structure and so decline
     the balance sheet values of the company’s long-term assets, and thus the
     result for the financial period including one-time items is expected to
     remain lower than in the previous year.

October - December 2015 in brief

  -- Net sales were at a similar level as in the previous year standing at MEUR
     119 (MEUR 120).
  -- EBITDA excluding one-time items and exchange rate differences of balance
     sheet items was MEUR 0.2  (MEUR 5.4).
  -- Operating profit excluding one-time items and exchange rate differences of
     balance sheet items was MEUR -4.2 (MEUR 1.2).
  -- The result after financial items excluding one-time items and exchange rate
     differences of operative balance sheet items was MEUR -11.6 (MEUR -4.9).
     The result after financial items excluding one-time items was MEUR -13.7
     (MEUR -5.9).

The poor development of productivity in 2015 was visible also in profitability
decrease which led to the changes made at Componenta during the past two months
of the year. Changes of the top management and the strategy work started in
December are both targeting a clear improvement in profitabililty. In the
future, Componenta will focus from volume perspective on mid-size product
series in iron castings, in aluminium castings, and concentrate production to
Turkey. Work for the Group strategy related to the restructuring the company’s
business operations has not been finalized. The key focus in those strategic
measures will be improvement of efficiency, improvement of customer service, as
well as decrease of quality and fixed costs and thus, profitable business
operations. Overlapping in the organization will be removed and management
model simplified. 

The company’s strategy will affect the production structure and thus decline
the balance sheet values of the company’s long-term assets. Based on that the
result for the financial period including one-time items is expected to remain
lower than in the previous year. 

The negotiations started in December 2015 for a financing solution to support
new strategic alignments and secure the company’s liquidity position continue.
The standstill agreement signed with the Nordic counterparties of the
syndicated loan is valid until end of April 2016. 

Development of order book

Componenta’s order book at the beginning of the year was 14% less than in the
previous year standing at EUR 77 (89) million. The order book comprises
confirmed orders for the next two months. The decreased prices of recycled
steel, iron and aluminium in 2015 declined the order book by some EUR 3 million
because of the lower raw material surcharges compared to the same period in the
previous year. Especially, demand of the construction and mining industry and
the manufacturers of agricultural machinery industry continued on low level. 

Net sales

Componenta’s net sales remained at a similar level as in the previous year, at
EUR 495 (495) million. The Group’s capacity utilization rate in the financial
period was 58% (58%). Componenta’s net sales in the review period by customer
sector were as follows: heavy trucks 32% (32%), construction and mining 16%
(18%), machine building 21% (20%), agricultural machinery 13% (15%) and
automotive 18% (15%). 

Result

Componenta’s EBITDA for the financial period excluding one-time items and
exchange rate differences of balance sheet items declined from the previous
year to EUR 23.9 (35.8) million. EBITDA was strongly affected by the Turkish
lira and high wage inflation some EUR -5 million, the strikes in Turkish
automotive industry in the second quarter some EUR -2 million and the
production disturbances at the Främmestad machine shop mainly in the first and
second quarter some EUR -2 million. During the fourth quarter the Group faced
quality problems which had an estimated impact of some EUR -2 million on
EBITDA. In addition, the result of the last quarter of 2015 was weakened by the
write-offs of the raw material inventories due to decrease recycled steel
prices and material costs that were higher than estimated in the Foundry
division. Positive impact of the efficiency improvement program on production
efficiency and EBITDA remained lower than targeted. 

The Group’s net financial costs in the financial period, excluding one-time
items, totalled EUR -25.4 (-27.3) million. 

Key figures

                                         Q4     Q4  Change   2015   2014  Change
                                       2015   2014                              
--------------------------------------------------------------------------------
Order book, MEUR                       76.9   88.9    -14%   76.9   88.9    -14%
--------------------------------------------------------------------------------
Net sales, MEUR                         119    120      0%    495    495      0%
--------------------------------------------------------------------------------
EBITDA*), MEUR                          0.2    5.4    -97%   23.9   35.8    -33%
--------------------------------------------------------------------------------
Operating profit*), MEUR               -4.2    1.2     n/m    6.0   17.8    -66%
--------------------------------------------------------------------------------
Operating profit*), %                  -3.5    1.0     n/m    1.2    3.6    -66%
--------------------------------------------------------------------------------
Result after financial items          -13.7   -5.9    132%  -18.3  -12.2     50%
 excluding one-time items, MEUR                                                 
--------------------------------------------------------------------------------
Number of personnel at period end,    4,269  4,238      1%  4,269  4,238      1%
 incl. leased personnel                                                         
--------------------------------------------------------------------------------

*) Excluding one-time items and exchange rate differences of operative balance
sheet items 

The figures presented in this release are unaudited.

Componenta will publish the Financial Statements Bulletin on 11 March 2016.

Helsinki, 9 February 2016

COMPONENTA CORPORATION


Harri Suutari
President and CEO





For further information, please contact:

Harri Suutari
President and CEO
tel. +358 400 384 937

Markku Honkasalo
CFO
tel. +358 10 403 2710





Componenta is a metal sector company with international operations and
production plants located in Finland, Turkey, the Netherlands and Sweden. The
net sales of Componenta were EUR 495 million in 2015 and its share is listed on
Nasdaq Helsinki. The Group employs approx. 4,250 people. Componenta specializes
in supplying cast and machined components and total solutions made of them to
its global customers, who are manufacturers of vehicles, machines and
equipment.