2012-02-21 10:30:00 CET
2012-02-21 10:30:20 CET
REGULATED INFORMATION
Sievi Capital Oyj - Financial Statement Release
SIEVI CAPITAL GROUP’S FINANCIAL STATEMENTS FOR 1 JANUARY – 31 DECEMBER 2011
SIEVI CAPITAL PLC FINANCIAL STATEMENTS RELEASE 21 FEBRUARY 2012 11.30 A.M.
SIEVI CAPITAL GROUP'S FINANCIAL STATEMENTS FOR 1 JANUARY - 31 DECEMBER 2011
Continuing operations
January-December
- No turnover generated by continuing operations
- Operating profit EUR 0.1 (3.4) million
- Result for the review period EUR -4.8 (4.1) million
- Earnings per share EUR -0.08 (0.07)
- The Board of Directors proposes a dividend of EUR 0.06 per share to the
Annual General Meeting
October-December
- Operating loss EUR -0.1 (0.3) million
- Profit was EUR 0.2 (-0.2) million
- Earnings per share EUR 0.00 (0.00)
Discontinued operations, result from operating activities
(Scanfil EMS Subgroup)
January-December
- Turnover EUR 210.8 (219.3), million, down 3.9%
- Operating profit EUR 9.1 (11.0) million, 4.3% (5.0%) of turnover
October-December
- Turnover EUR 38.8 (62.2) million
- Operating profit EUR -0.9 (2.9) million, -2.4% (4.7%) of turnover
Jorma J. Takanen, President of Sievi Capital plc:
”During 2011, the demerger of Sievi Capital plc into the investment company
Sievi Capital plc and the contract manufacturing company Scanfil plc was
implemented. The demerger took effect on 1 January 2012. The aim of the
demerger is to clarify the corporate structures, enhance operational
transparency and hence promote the value appreciation for shareholders in the
long term. In accordance with the demerger plan approved by the extraordinary
general meeting on 22 November 2011, Jorma J. Takanen was appointed as
President of Sievi Capital plc and Harri Takanen was appointed as President of
the new company Scanfil plc.
With regard to investment activity, 2011 was a challenging year. The fair
values of investments decreased considerably, and the IFRS-compliant result was
negative. On the other hand, Sievi Capital plc has not been forced to realise
the losses; instead the company was able to make gains from investment
instruments divested in the difficult market situation.
With regard to contract manufacturing, the year was marked by dual trends. The
favourable development of the demand for telecommunications products early in
the year came to a halt towards the end of the year, and the decrease in sales
was significant. Also, the demand for products related to renewable energy
decreased considerably during the latter half of the year. The demand for
professional electronics products continued to be good throughout the year for
the most part, substituting for part of the decrease in the sales of
telecommunications products.
The Scanfil EMS group centralised its production activities in Europe, and the
Vantaa plant was closed down. The Suzhou subsidiary in China moved into new
premises during the first quarter. Combined with the machine and equipment
investments made at the plants in Hungary and Hangzhou, these measures aim to
improve the competitiveness of contract manufacturing in the global market.”
DEMERGER
The extraordinary general meeting of Sievi Capital plc held on 22 November 2011
approved the demerger plan signed by the company's Board of Directors on 11
August 2011. The demerger was implemented as a partial demerger, and in its
execution the contract manufacturing business (Scanfil EMS Oy group) was
demerged into a new publicly listed company. The name of the new contract
manufacturing company is Scanfil plc.
In the demerger, the assets and liabilities related to investment activity
remained with Sievi Capital plc. The shareholders of Sievi Capital plc received
shares in Scanfil plc in proportion to their holdings as consideration for the
demerger so that one (1) share in Scanfil plc was conveyed for each share in
Sievi Capital plc. The execution of the demerger was entered in the Trade
Register on 1 January 2012.
GROUP STRUCTURE
Group structure in 2011
The Sievi Capital plc Group includes the investment and parent company Sievi
Capital plc, its wholly owned subgroup Scanfil EMS Oy and associated companies.
Sievi Capital plc's associated companies are Kitron ASA (share of ownership
32.96%), IonPhasE Ltd (39,15%), iLOQ Ltd (22.96%) and Panphonics Ltd (40.0%).
Scanfil's wholly owned Belgian subsidiary Scanfil N.V. has not engaged in any
production activities since 2006.
The Scanfil EMS Ltd subgroup is comprised of subsidiaries and the associated
company Greenpoint Oy (share of ownership 40%). Scanfil EMS Ltd's subsidiaries
are Scanfil (Suzhou) Co., Ltd. and Scanfil (Hangzhou) Co., Ltd. in China,
Scanfil Kft. (Budapest) and real-estate company Rozália Invest Kft. (Budapest)
in Hungary and Scanfil Oü (Pärnu) in Estonia. The Scanfil EMS group has a 100%
holding in all of its subsidiaries.
The group structure since 1 January 2012
Following the demerger that took effect on 1 January 2012, the Sievi Capital
group comprises the associated companies Kitron ASA, IonPhasE Ltd, iLOQ Ltd and
Panphonics Ltd as well as the subsidiary Scanfil N.V.
The new Scanfil plc group comprises the parent company Scanfil plc, the Scanfil
EMS Ltd subgroup (with subsidiaries) and the associated company Greenpoint Ltd.
DEVELOPMENT OF OPERATIONS
Sievi Capital plc
The associated company Kitron ASA, listed on the Oslo Stock Exchange, has
released its financial statements on 9 February 2012. Kitron ASA's revenue
amounted to EUR 213.6 million in the 2011, a 0.7 per cent increase compared
with 2010. EBIT in 2011 was EUR 5 million (EUR 1.0 million). Adjusting for
start up cost and restructuring provision EBIT was EUR 4.0 million in the
fourth quarter reflecting a significant improved underlying profitability. The
profit before tax and discontinued operations in 2011 was EUR 2.3 million (EUR
3.3 million loss in 2010).
The order intake in fourth quarter was EUR 54.3 million and the order backlog
was EUR 103.1 million, a decrease of 4.9 per cent and 4.4 per cent
respectively. The order intake is at a higher level than in Q3 2011 and the
demand from customers remains stable.
All of Sievi Capital plc's unlisted associated companies are innovative
start-ups with an interesting and promising global potential. The companies
have technological competence, strong patent portfolios and new commercial
applications.
The self-operated electronic iLOQ S10 locking solution developed by iLOQ Ltd
has achieved rapid growth and significant customer accounts in the Finnish and
Swedish lock markets during 2011. The growth was based on sales of the iLOQ S10
product, which increasingly replaced conventional mechanical serial locking
systems among public and private customers and housing corporations. The
company has a network of distributors covering growth centres and major cities
in Finland and Sweden and resellers in other countries. iLOQ Ltd is seeking
rapid growth through international expansion, first into the Nordic countries,
followed by the Central European market. Subsidiaries were established in the
Netherlands and Germany during autumn 2011. The reseller network expanded and
the company's position in the distribution chain strengthened. A DIN-compliant
lock cylinder and related locking solutions have been developed for the Central
European market.
PanPhonics Ltd was selected as the audio supplier for the 7-ELEVEN retail
chain's in-shop TV system in North America. Project deliveries commenced in
2011, continuing in 2012. Deliveries have proceeded as planned and on schedule.
During 2011, the company invested in a new production line and moved into new
premises in Tampere. The line investment supports Panphonics Ltd's growth
strategy and enables the simultaneous manufacture of several product models and
a significant increase in capacity. The company specified its strategy during
the year and shifted its marketing communications from product-oriented
marketing to solution- and added value-oriented marketing.
Sales of IonPhasE Ltd's product versions that received technical customer
approval in 2010 started in 2011, although behind the original schedule.
IonPhasE Ltd made a significant innovation in its polymer technology during
2011. The company will seek strong growth and improve its competitiveness in
several product applications with this innovation. The company received several
technical approvals for its products in summer and autumn 2011. In summer 2011,
the company received food industry qualification approvals for plastic used in
polyolefin films according to the EU directive. IonPhasE Ltd was approved for
inclusion on the supplier list of a major European car manufacturer in autumn
2011. Pilot customers include several well-known multinational corporations in
the packaging, chemical, electronics and automotive industries. In order to
make the European sales channels more effective, two significant agency and
distribution agreements were signed with significant European companies in the
plastic industry, Eukem and Velox.
In the investment market, 2011 was marked by dual trends. The year began with
an almost continuous upswing, until the concerns of other cascade effects
brought along by the earthquake in Japan ended the favourable development.
Finally, during the summer the development of the equity market in particular
worsened clearly with fears of a downturn in the global economy spreading in
the market and news of the European debt crisis reaching everybody. Increased
uncertainty in the market resulted in clearly increased fluctuations in the
market during the latter half of the year, and there was occasionally an
atmosphere of panic in the market in autumn 2011, similarly to the 2008 crisis.
Sufficient corrective measures were sought to solve the debt problems of the
public sector in Europe, but their effectiveness and implementation fell short.
In the extremely sensitive situation, 2011 became a weak year in terms of
investments, and the HEX25 index, for example, decreased by approximately 30%
during the year. The first months of the year were also marked with increased
optimism in the private equity market, and the prices of executed transactions
were increasing. The situation changed by the end of the year, and activity
slowed down.
Sievi Capital plc investigated various growth capital investment targets during
2011, but no capital investments meeting the criteria were found. Sievi Capital
plc is actively developing the operations of its growth capital investments in
the long term and secures the growth of the involved companies.
Lännen Tehtaat plc (Sievi Capital plc share of ownership 8.6%) has released its
financial statements on 16 February 2012.
Scanfil EMS Subgroup
The descriptions of the business operations, financial development and other
activities of the Scanfil EMS group in this release concern 2011, when Scanfil
EMS group was a subgroup of Sievi Capital plc. The operations of the Scanfil
EMS group were transferred to the new company Scanfil plc as a result of the
partial demerger of Sievi Capital plc on 1 January 2012. In the financial
statements, Scanfil EMS Ltd group is treated as a discontinued operation.
The favourable development of sales seen during the first two quarters of 2011
was over in the latter half of the year. The demand for telecommunications
products in particular slowed down already in the third quarter and decreased
significantly during the fourth quarter compared to the fourth quarter of 2010.
As for professional electronics products, the development was positive
throughout the year. Only the sales of certain products related to renewable
energy decreased clearly compared to the previous year. However, sales of
professional electronics products as a whole increased by approximately 24%
compared with the previous year, thereby compensating much of the decrease in
the sales of telecommunications products.
Due to the positive development of the demand for professional electronics
products, the company's sales only decreased by 3.9% compared to the previous
year, amounting to EUR 210.8 million. Scanfil EMS Ltd's systematic work to
expand the customer base and decrease the customer-specific risk succeeded
well. Professional electronics customers accounted for 62% of total sales in
2011 (48% in 2010) and telecommunications customers for 38% (52%). The share of
professional electronics customers of full-year sales was higher than that of
telecommunications customers for the first time.
The Suzhou subsidiary in China moved into its own modern premises with a floor
area of more than 21,000 square metres during the first quarter. The premises
have been built for electronics production and will facilitate growth of
operations. At the same time, the plant's production capacity was significantly
increased through procurement of equipment and the assembly capacity of
electronics components, for example, was doubled. The plant was officially
inaugurated on 6 April 2011.
The company centralised its production activities during the year. The Vantaa
plant was closed down and the majority of the plant's production was
transferred to the group's Chinese plants, with some production moved to the
Sievi plant. The reason for closing the Vantaa plant was that a significant
share of the demand for the products manufactured by the plant was centralised
in lower-cost countries. The electronics production of the Sievi plant was
transferred to the Suzhou plant in China and the Pärnu plant in Estonia, with
the Sievi plant focusing on sheet metal mechanics and assembly of demanding
products. Machine and equipment investments were made at the Hangzhou and
Hungary plants during the year.
Sales of Scanfil EMS Ltd's associated company Greenpoint Ltd developed
positively, especially towards the end of the year. The company delivered,
among others, products required by new tobacco legislation in Finland and
products pursuant to fast-moving consumer goods impulse sales concepts to
various customer target groups.
SIEVI CAPITAL GROUP'S FINANCIAL DEVELOPMENT
In the financial statements of the Sievi Capital group, the Scanfil EMS group
is treated as a discontinued operation.
The continuing operations of the Sievi Capital group include investment
activity that generates no turnover. The gains and losses from investment
activities are recognised under financial income and expenses in the income
statement. Other operating income for the financial period amounted to EUR 1.8
(4.6) million. Other operating income comprises mainly rental revenue; in 2010,
other operating income additionally included a sales gain from a property sale
in the amount of EUR 2.5 million. Operating profit from continuing operations
was EUR 0.1 (3.4) million and the result for the period was EUR -4.8 (4.1)
million. The loss of the period is mainly due to a decrease in the fair values
of investments. In addition, the result was burdened by expenses related to the
demerger of the company, exceeding of EUR 0.3 million.
The turnover of the Sievi Capital group's discontinued operations, contract
manufacturing, for the financial period was EUR 210.8 (219.3) million. The
result from the discontinued operations for the financial period was EUR 6.1
(6.8) million.
The Scanfil EMS group has been treated as a discontinued operation following
the demerger of Sievi Capital plc. In accordance with IFRS 5 (Non-current
Assets Held for Sale and Discontinued Operations) and IFRIC 17 (Distributions
of Non-cash Assets to Owners), discontinued operations should be measured at
the lower of the carrying amount of market value. In the demerger, shares in
Scanfil EMS Ltd were distributed to Scanfil plc, which was established in order
to execute the demerger. This company was listed at the beginning of January
2012, and the volume-weighted average share price for the first five days of
trading was EUR 0.96 per share. With this share price, the fair value of the
Scanfil EMS group was EUR 13.7 million lower than the carrying amount of 31
December 2011. The difference between the carrying amount and market value has
been expensed to the discontinued operations as an impairment loss, and
translation differences of EUR 9.2 million related to the discontinued
operation have been recognized as income.
Following these entries, the profit from the discontinued operations for the
financial period was EUR 1.7 million.
The group's profit for the financial period from continuing and discontinued
operations totalled EUR -3.1 (10.9) million combined.
Earnings per share from continuing operations were EUR -0.08 (0.07), earnings
per share from discontinued operations were EUR 0.03 (0.12) and the group's
total earnings per share were EUR -0.05 (0.19).
Investment activity, continuing operations
The investment activity of the Group's parent company, Sievi Capital plc, is
divided into financial investments and capital investments. The gains and
losses from investment activities are recognised under financial income and
expenses in the income statement.
During the financial period, recognised dividend and interest income and
capital gains amounted to EUR 3.0 (5.5) million, financial costs 0.1 (0.1)
million, realised sales losses amounted to EUR 0.0 (0.9) million, and value
changes of investments at fair value through profit or loss amounted to EUR
-7.4 (-0.5) million, resulting in a total recorded value of EUR -4.6 (4.1)
million. Interest income in 2010 includes interest income from Scanfil EMS
Group amount of 1.0 million.
In September-December, recognised income from investment activity amounted to
EUR 0.4 (1.3) million, realised sales losses amounted to EUR 0 (0.3) million,
and value changes of financial assets at fair value through profit or loss
amounted to EUR 0.4 (-0.3) million, resulting in a total recorded value of EUR
0.8 (0.7) million for the quarter.
Sievi Capital plc's investment allocation on 31 December 2011 was as follows:
financial investments 64% and capital investments 37%. The financial
investments were divided into ETF and equity investments 13% and money market
investments 51%. The money market investments were divided as follows:
risk-free interest investments 20%, low-risk investments 20% and moderate risk
investments 60%. The value of the financial investments in the investment
portfolio on 31 December 2011 has decreased by almost ss% compared to
acquisition prices during the year.
The target allocation is financial investments 30%-50% and capital investments
50%-70%.
The average remaining term of the structured instruments in the investment
portfolio is less than three years, and they account for approximately
one-fifth of the financial investments.
EUR 0.1 million was used in subscribing for more shares in the associated
company IonPhasE Ltd during the review period. This is part of IonPhasE Ltd's
share issue programme that continued in January 2012. No other new capital
investments were made during the period under review.
The Sievi Capital group's share of the associated companies' losses and
goodwill amortisation totalled EUR -1.7 (-1.8) million.
Of the capital investments, Lännen Tehtaat plc that does not fulfil the
definition of an associated company, is measured at fair value, and the change
in the value, EUR -1.5 million (1.0 million), is recognised in the fair value
reserve under equity, adjusted with tax liabilities, net EUR -1.1 (0.7)
million.
The profit from investment activities, including all financial and capital
investments, totalled EUR -6.2 (1.3) million for the financial period.
Scanfil EMS subgroup, discontinued operation
Contract manufacturing business turnover for January-December amounted to EUR
210.8 (219.3) million, down 3.9% compared with the previous year. The operating
profit from operational activity for the period under review was EUR 9.1 (11.0)
million, or 4.3% (5.0%) of turnover. The result from operational activity was
EUR 6.3 (6.8) million, which is 3.0% (3.1%) of turnover.
Turnover amounted to EUR 38.8 (62.2) million in October-December. Operating
profit for the fourth quarter was EUR -0.9 (2.9) million, or -2.4% (4.7%) of
turnover. The result for the quarter was EUR 0.0 (1.8) million.
The development of profitability was particularly affected by the significant
decrease in the demand for telecommunications products in the fourth quarter.
The number of personnel was consequently adjusted by more than a hundred
employees in the Chinese Hangzhou subsidiary, resulting in non-recurring
expenses of approximately EUR 0.3 million. In addition, the closing down of the
Vantaa plant resulted in non-recurring expenses of approximately EUR 1.1
million.
The breakdown of turnover by customer location was as follows: Finland 40%
(31%), rest of Europe 23% (25%), Asia 36% (42%), USA 1% (1%) and others 1%
(1%).
The Chinese subsidiaries accounted for 43% of the Group's entire sales during
the period under review (47% in 2010), including deliveries to other Group
plants.
FINANCING AND CAPITAL EXPENDITURE
Continuing operations
The Sievi Capital group enjoys a strong financial position.
The consolidated balance sheet total was EUR 208.5 (249.1) million. The assets
of the continuing operations were EUR 92.8 million, and shareholders' equity
and liabilities amounted to EUR 148.4 million. Liabilities amounted to EUR 60.1
million, all of which consisted of non-interest-bearing liabilities. The
Group's equity ratio was 95,1% (64.6%) and net gearing was -10,9% (-26,2%).
The Sievi Capital group's financial assets amounted to EUR 51.7 (65.1) million.
Of the financial assets, EUR 9.6 (40.8) million was deposited in bank accounts
and as time deposits with less than three months' maturity. An additional EUR
42.1 (24.3) million of financial assets was invested in financial instruments,
mainly in bonds, credit linked notes, structured investment instruments and ETF
and equity investments. In compliance with the IFRS, the investments have been
recognised at fair value. The net result for January-December includes EUR -7.4
(-0.5) million of change in the fair value of the investments.
Net cash flow from operating activities was EUR 24.1 (-0.3) million, including
EUR 27.3 million of cash flow from discontinued operations in 2011. Excluding
the discontinued operations, the cash flow would have been EUR -3.2 million in
2011, comprising mainly taxes paid. Cash flow from investment activities
amounted to EUR -27.4 (-15.9) million, consisting of investments apart from the
EUR -3.6 million cash flow from the investment activities of the discontinued
operations. Net cash flow from financing activities was EUR -11.4 (21.1)
million. Net cash flow from financing activities includes dividend payments
amounting to EUR 6.9 million in 2010 and 2011 and cash flow of EUR -4.4 million
from discontinued operations in 2011. The comparison figures for 2010 are
figures from the Sievi Capital group's financial statements 2010.
No gross investments were made by continuing operations during the period under
review.
Discontinued operations
The assets of the discontinued operations were EUR 115.7 million, and the
discontinued operations' shareholders' equity and liabilities amounted to EUR
60.1 million.
Net cash flow from the operating activities of the discontinued operations was
EUR 27.3 (1.5) million. Working capital was released to the amount of EUR 17.7
million, while EUR 9.9 million was committed to working capital the previous
year. The release of working capital is due to the lower level of activity
towards the end of 2011 compared with the previous year. Cash flow from
investment activities was EUR -3.6 (-9.3) million, consisting of acquisitions
of machines and equipment, and for the previous year, the real estate
acquisition of the Chinese subsidiary. Cash flow from financing activities was
EUR -7.2 (-0.2) million, consisting of repayment of loans.
The gross investments of the discontinued operations in fixed assets were EUR
3.7 (10.1) million, or 1.8% (4.6%) of turnover. The investments were
acquisitions of machines and equipment. The acquisition of the property in
China accounted for much of the investments for the previous year. Depreciation
for the financial period amounted to EUR 4.2 (4.5) million.
Exchange rate gains and losses of a total of EUR -0.9 million were recognized
during the financial period, of which amount EUR -0.7 million was due to the
unrealized exchange rate loss related to the euro-denominated intra-group loan
of the subsidiary Rozália Invest Kft after the weakening of the local Hungarian
currency. In other respects, changes in exchange rates have not had a
significant effect on the result of operational activity due to the business
structure.
BOARD OF DIRECTORS' AUTHORISATION
The Annual General Meeting decided on 13 April 2011 according to the Board of
Directors' proposal to authorize the Board of Directors to decide on the
acquisition of up to 3,000,000 of the Company's own shares with distributable
assets. The authorization will remain in force for 18 months after it is
issued.
The Annual General Meeting on 8 April 2010 authorized the Board of Directors to
decide on the transfer of a maximum of 5,900,000 treasury shares held by the
company in compliance with the regulations of the Companies Act in force. The
authorization will remain in force for three years after it is issued.
The Board of Directors has no existing share issue authorisations or
authorisations to issue convertible bonds with warrants.
OWN SHARES
On 31 December 2011, the company owned a total of 2,983,831 of its own shares
that represented 4.9 % of the company's share capital and votes. No treasury
shares were purchased or conveyed during the financial period 2011.
SHARE TRADING AND SHARE PERFORMANCE
The highest trading price during the review period was EUR 3.15 and the lowest
was EUR 1.85, the closing price for the period standing at EUR 1.96. A total of
1,972,596 shares were traded during the period, corresponding to 3.2% of the
total number of shares. The market value of the shares on 31 December 2011 was
EUR 119.0 million.
Following the demerger, the volume weighted average share price for the five
first days of trading was EUR 1.48.
PERSONNEL
At the end of the period in continuing and discontinued operations there were
1,745 (2,070) people, of whom 296 (451) worked in the company's Finnish units
and 1,449 (1,619) in the company's units outside Finland. At the end of the
year 51% (51%) of the personnel were working in Chinese subsidiaries.
In all, 83% (78%) of the Group's personnel were employed by subsidiaries
outside Finland on 31 December 2011. The Group employed an average of
2,027(1,992) people during the year.
OTHER EVENTS DURING THE REVIEW PERIOD
On 25 March 2011, Sievi Capital plc announced that the General Meeting of
Ojala-Yhtymä Ltd has decided not to execute the merger of Scanfil EMS Ltd and
Ojala-Yhtymä Ltd.
Sievi Capital plc and Scanfil EMS Ltd decided on 27 April 2011 to initiate
arbitration proceedings against Ojala-Yhtymä Ltd and its shareholders and claim
two million (2,000,000) euro as contractual penalty on the basis of the merger
agreement.
Sievi Capital plc and Scanfil EMS Ltd consider the merger agreement signed on 1
November 2010 to be definitive and that it obligates the parties to execute the
merger with the terms agreed on in the merger agreement. Ojala-Yhtymä Ltd
unilaterally announced that its General Meeting had decided not to execute the
merger. The arbitration proceedings are still underway, and the progress or
result of the process will be announced separately.
FUTURE PROSPECTS
With regard to investment activity, the market uncertainty continues and the
investment environment is difficult. The year 2012 is expected to be very
turbulent due to the debt crisis, impaired employment rates and standstill of
growth, and strong share price fluctuations will continue in stock exchanges.
Interest and dividend income is expected to remain at a satisfactory level.
Outlook for the associated companies:
iLOQ Ltd forecasts clear growth of turnover for 2012. Growth is sought both in
the currently established Nordic market as well as the start of the sales of
DIN-compliant lock cylinder and locking solutions developed for the Central
European market. Operations of subsidiaries in charge of marketing in Germany
and the Netherlands will commence at the beginning of 2012.
As the result of Panphonics Ltd's product development work, the company will
publish three new products early in 2012. The delivery project for the 7-ELEVEN
retail chain will continue during the first months of the year, and the sales
forecast predicts increasing turnover for 2012.
The IonPhasE IPE product family will be complemented by at least three new
products in 2012. IonPhasE Ltd expects that with the products based on a new
innovation, the company will achieve a leading position in certain significant
product markets related to preventing static electricity. With regard to the
existing products, the company expects a significant increase in sales in 2012.
The company's customer base and number of sales projects have increased
considerably during the year, which will improve the company's chances of
reaching the growth targets.
The associated company Kitron ASA, Norway, evaluated its outlook in its
financial statements published on 9 February.
Contract manufacturing activity was transferred to Scanfil plc with the merger
executed on 1 of January 2012. Scanfil plc has announced its future outlook in
a stock exchange release published on 21 February 2012.
OPERATIONAL RISKS AND UNCERTAINTIES
The most significant short-term risks related to investment activity could be
realised if Europe and the global economy end up in a recession or a prolonged
period of below-average growth. Countries' debt problems can still become
escalated in Europe, and the consequences could become widespread. The European
bank sector is still vulnerable, in spite of extensive market operations by the
ECB. Looming economic growth in the United States can yet again come to a halt,
which would result in immediate problems in the imbalanced economy.
Economic growth has slowed down considerably in many sectors, and the global
economy can be driven into a recession. Fears of a recession have somewhat
given way in the United States in the last few weeks, but Europe is living on
the brink. Even if a recession was avoided, the growth figures of national
economies will weaken in every case because growth has weakened even in China.
Companies are currently preparing for the worst, and investments are made
cautiously, if at all. Stocks and production are being run down and a
self-propagating negative circle might emerge. The banking sector in particular
is facing challenging times, and banks' ability to maintain sufficient
liquidity in the credit market is uncertain in spite of the operations promised
by the ECB. It is still completely possible that some level of an investment
and credit crunch will begin. In a difficult economic environment, citizens'
discontent can be emphasised further around the world, causing completely new
extensive unrest. The slowness of political decision-making and the resulting
uncertainty has already clearly increased the risk premium required by the
capital market and volatility at times. The extreme fear is the realisation of
the systemic risk, which would result in chaos similar to the fall of Lehman
Brothers, at the least, in the capital market. The factors described above have
an effect on the capital market, and as long as they prevail, negative
development in the securities market may continue.
In other respects, the risks facing Sievi Capital plc's business have remained
essentially the same. Risks and risk management are described in greater detail
on the company's website under Corporate Governance and in the notes to the
consolidated financial statements.
Scanfil plc has announced its operational risks and uncertainties in a stock
exchange release published on 21 February 2012.
ANNUAL GENERAL MEETING 2011 AND BOARD OF DIRECTORS' PROPOSALS TO THE ANNUAL
GENERAL MEETING
Sievi Capital plc's Annual General Meeting will be held on 19 April 2012 at the
company's head office in Sievi, Finland, at 2.00 pm.
Dividend for 2011
The company aims to pay dividends amounting to approximately 1/3 of its annual
result on a regular basis.
The parent company's distributable funds are EUR 71.005.304,36.
The Board of Directors proposes to the Annual General Meeting that a dividend
of EUR 0.06 be paid from the unrestricted shareholders' equity per each
outstanding share, for a total of EUR 3,463,826.34. The dividend matching day
is 24 April 2012. The dividend will be paid to those shareholders who, on the
matching day, are entered in the Company's Register of Shareholders, kept by
Euroclear Finland Ltd. The dividend payment day is 3 May 2012.
The proposal of the nomination committee of the Boards of Directors of Sievi
Capital plc for the members of the company's Board will be announced later in
separate stock exchange release.
The financial statements have been prepared in accordance with the recognition
and measurement principles of the IAS 34 Interim reports standard. In Interim
Report the same accounting principles have been applied as in the 2009
Financial Statement.
Individual figures and grand totals have been rounded to the nearest million
euros, so they will not always add up.The figures are unaudited.
Consolidated Income Statement
EUR million
10 - 12 10 - 12 1 - 12 1 - 12
2011 2010 2011 2010
Continuing operations
Other operating income 0,4 0,4 1,8 4,6
Expenses -0,4 0,0 -1,2 -0,6
Depreciation -0,1 -0,1 -0,5 -0,5
Operating profit -0,1 0,3 0,1 3,4
Financial income and expenses 0,8 0,9 -4,6 4,1
Share in the associated company´s profit -0,4 -1,3 -1,7 -1,8
Profit before taxes 0,4 -0,1 -6,1 5,7
Income taxes -0,1 -0,1 1,4 -1,6
Net profit for the period, Continuing 0,2 -0,2 -4,8 4,1
operations
Discontinued operations
Net profit for the period, Discontinued -4,6 1,8 1,7 6,8
operations
Net profit for the period -4,4 1,6 -3,1 10,9
Attributable to:
Equity holders of the parent -4,4 1,6 -3,1 10,9
Earnings / share (EPS), EUR undiluted and
diluted
Continuing operations 0,00 0,00 -0,08 0,07
Earnings / share (EPS), EUR undiluted and
diluted
Discontinued operations -0,08 0,03 0,03 0,12
Earnings / share (EPS), EUR undiluted and
diluted
Net profit for the period -0,08 0,03 -0,05 0,19
The company does not have items that might dilute the earnings
per share.
Consolidated Statement of Comprehensive Income
EUR million
10 - 12 10 - 12 1 - 12 1 - 12
2011 2010 2011 2010
Net profit for the period -4,4 1,6 -3,1 10,9
Other comprehensive income
Discontinued operations
Translation differences -1,3 5,0
Derivative financial instrument -0,7 1,8 -0,7
Continuing operations
Available-for-sale investments 0,1 -0,4 -1,1 0,7
Translation differences 0,2 0,5 0,0 0,5
Other comprehensive income, net of tax -1,6 1,9 -1,8 6,3
Total Comprehensive Income -6,0 3,5 -4,9 17,2
Attributable to:
Equity holders of the parent -6,0 3,5 -4,9 17,2
Consolidated Statement of Financial Position
EUR million
Assets 31.12.2011 31.12.2010
Non-current assets
Property, plant and equipment 4,3 34,5
Goodwill 2,4
Other intangible assets 0,0 3,5
Shares in associated companies 22,8 25,7
Available-for-sale investments 8,0 9,5
Financial assets at fair value through profit or loss 19,9 16,6
Receivables 0,5 0,2
Deferred tax assets 1,8 0,3
Total non-current assets 57,3 92,8
Current assets
Inventories 36,8
Loan receivables from associates 0,4
Trade and other receivables 0,8 53,6
Advance payments 0,0 0,3
Financial assets at fair value through profit or loss 22,1 7,7
Available-for-sale investments, cash equivalents 41,0
Cash and cash equivalents 9,6 16,9
Total current assets 33,0 156,3
Non current assets held for sale 2,5
Discontinued operations 115,7
Total assets 208,5 249,1
Shareholder's equity and liabilities 31.12.2011 31.12.2010
Equity
Share capital 15,2 15,2
Share premium account 16,1 16,1
Treasury shares -8,9 -8,9
Translation differences 0,5 5,7
Other reserves 5,0 6,2
Retained earnings 60,3 126,5
Total equity 88,2 160,8
Non-current liabilities
Deferred tax liabilities 0,4 1,1
Provisions 3,4 4,4
Interest bearing liabilities 35,6
Other liabilities 1,0
Total non-current liabilities 3,8 42,0
Current liabilities
Trade and other liabilities 56,2 39,2
Current tax 0,1 2,6
Interest bearing liabilities 4,4
Total current liabilities 56,3 46,3
Discontinued operations 60,1
Total liabilities 120,2 88,3
Total shareholder's equity and liabilities 208,5 249,1
Consolidated Cash Flow Statement
EUR million
31.12.2011 31.12.2010
Cash flow from operating
activities
Net profit -4,8 10,9
Adjustments for the net profit 4,6 4,8
Change in net working capital -0,7 -12,3
Paid interests and other -0,1 -0,4
financial expenses
Interest received 0,2 0,5
Taxes paid -2,4 -3,7
Discontinued operations 27,3
Net cash from operating 24,1 -0,3
activities
Cash flow from investing
activities
Investments in tangible and 0,0 -9,0
intangible assets
Sale of tangible and intangible 7,6
assets
Purchase of investments -35,0 -25,8
Proceeds from sale of 10,4 33,4
investments
Purchase of associated companies -0,1 -24,1
Granted loans -0,9 -0,2
Interest received from 0,8 1,0
investments
Dividends received from 1,1 1,1
investments
Discontinued operations -3,6
Net cash from investing -27,4 -15,9
activities
Cash flow from financing
activities
Proceeds from short-term loans 5,0
Repayment of short-term loans -5,0
Proceeds from long-term loans 40,0
Repayment of long-term loans -12,0
Dividends paid -6,9 -6,9
Discontinued operations -4,4
Net cash from financing -11,4 21,1
activities
Net increase/decrease in cash -14,7 4,8
and cash equivalents
Cash and cash equivalents at 57,9 51,2
beginning of period
Changes in exchange rates 1,6 1,9
Cash and cash equivalents at end 44,8 57,9
of period
Statement of changes in
equity
EUR million
Equity attributable to equity holders of the parent company
Share
Share premium Treasury Translatio Other Retain Equity
n ed
capital account shares difference reserves earnin total
s gs
Equity
------------------------------------------------------------------------------
1.1.2011 15,2 16,1 -8,9 5,7 6,2 126,5 160,8
Total cemprehensive income 0,0 -1,8 -3,1 -4,9
Payment of dividends -6,9 -6,9
Liability of dividend -55,6 -55,6
distribution
Transfer to funds 0,5 -0,5 0
Discontinued operations, translation -5,1 -5,1
difference
Equity
------------------------------------------------------------------------------
31.12.2011 15,2 16,1 -8,9 0,5 5,0 60,3 88,2
Emoyrityksen omistajille kuuluva oma pääoma
Share
Share premium Treasury Translatio Other Retain Equity
n ed
capital account shares difference reserves earnin total
s gs
Equity
------------------------------------------------------------------------------
1.1.2010 15,2 16,1 -8,9 0,1 4,7 123,3 150,5
Laaja tulos 5,5 0,7 10,9 17,2
Payment of dividends -6,9 -6,9
Transfer to funds 0,8 -0,8 0
Distribution of treasury 0,0 0,0
shares
Equity
------------------------------------------------------------------------------
31.12.2010 15,2 16,1 -8,9 5,7 6,2 126,5 160,8
Key Indicators
1 - 12 1 - 12
2011 2010
Return on equity, % -1,9* 7,0
Return on investment, % -6,9 8,7
Interest-bearing liabilities, EUR million 40,0
Gearing, % -58,6 -26,2
Equity ratio, % 95,1 64,6
Gross investments in fixed assets, EUR million 0,0 10,1
% of net turnover 4,6
Personnel, average 3 1 992
Earnings per share, EUR -0,05 0,19
Shareholders´ equity per share, EUR 1,53 2,78
Dividend per share, EUR 0,06 0,12
Dividend per earnings, % -1,1 63,7
Effective dividend yield, % 3,06 4,04
Price-to-earnings ratio (P/E) -36,8 15,77
Share price
Year´s lowest share price, EUR 1,85 2,40
Year´s highest share price, EUR 3,15 3,14
Average share price for year, EUR 2,53 2,88
Share price at year´s end, EUR 1,96 2,97
Market capitalisation at end of year, EUR million 119,0 180,3
Number of shares at
the end of period, 000´s 60 714 60 714
- not counting own shares 57 730 57 730
- weighted average 57 730 57 730
Related to Discontinued operations in 2010, the company had
a EUR 40 million loan in connection with which the company has
entered
into interest and currency swap agreements to convert the SEK-denominated
principal
and cash flows of instalments and interest payments into euros. The interest and
currency swap agreement fully hedges the instalments and interest payments
against
fluctuations in exchange and interest rates.
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.
* Equity before liability of dividend booking relating to the
demerger
Segment information
EUR million
1 - 12 1 - 12
2011 2010
Continuing operations,
Investment activities
Operating profit 0,1 3,4
Financial income 3,0 5,5 (*
Financial expenses -0,1 -0,1
Realized losses -0,0 -0,9
Value change of investments -7,4 -0,5
Share in the associated company´s profit -1,7 -1,8
Financial assets 92,8 249,1
(* includes EUR 1,0 million interest incomes from Scanfil EMS Group
Discontinued operations
Turnover
Europe 125,7 122,8
Asia 91,6 107,9
Turnover between segments -6,5 -11,4
Total 210,8 219,3
Operating profit
Europe 3,4 0,5
Asia 5,7 10,5
Total 9,1 11,0
Assets
Europe 62,4 70,1
Asia 63,6 69,6
Goodwill 2,2 2,2
Shares in associated companies 1,1 1,4
Total 129,4 143,4
Changes in tangible non-current assets
EUR million
1 - 12 1 - 12
2011 2010
Continuing operations,
Book value at the beginning of the period 34,5 31,1
Transfer, Discontinued operations -27,2
Transfer, non current assets held for sale -2,5
Additions 0,0 7,4
Deductions -0,1
Depreciations -0,5 -4,5
Exchange rate differences 0,7
Book value at the end of the period 4,3 34,5
1 - 12 1 - 12
2011 2010
Discontinued operations
Book value at the beginning of the period 27,2 23,4
Additions 3,4 7,3
Deductions 0,0 -0,1
Depreciations -3,8 -4,0
Exchange rate differences 0,3 0,7
Book value at the end of the period 27,0 27,2
Contingent liabilities
EUR million
1 - 12 1 - 12
2011 2010
Continuing operations,
Mortgages on property 3,4 3,4
Business mortgages 6,8 46,8
Guarantees given on behalf of own company 0,1
Guarantees given on behalf of associates 0,3
In addition to the business mortgages of its subsidiary Scanfil EMS Ltd,
Sievi Capital plc has given an absolute
guarantee for the payment of Scanfil EMS Ltd's EUR 40 million loan and
the resulting liabilities.
Nordea Bank Finland plc has exempt Sievi Capital plc from quarantee
liability in February 2012.
A bank guarantee was obtained from a financial institution as security
for the payment of pension premiums
relating to the reorganisation of Scanfil N.V., and Sievi Capital plc
has provided the financial institution with
a counter-guarantee of EUR 4.2 million to cover any liabilities that may
arise if the bank guarantee is realised
Equivalent provision is booked into Scanfil NV's balance
sheet.
1 - 12 1 - 12
2011 2010
Discontinued operations
Business mortgages 40,0 40,0
Guarantees given on behalf of own company 0,0 0,1
Guarantees given on behalf of associates 1,1
Transactions with related party
EUR million
1 - 12 1 - 12
2011 2010
Continuing operations,
Related party transactions
Associated companies
Interest income 0,0
Loan receivables 0,4
Interest receivables 0,0
Capital loan 0,5
Board members
Interest expenses 0,0
Associated company IonPhasE Ltd has been given a EUR 500,000 convertible
capital loan.
The loan will mature on 31 December 2012 and its interest rate is 5%.
Holder of a convertible capital loan has a right to subscribe new shares using
the amount of unpaid
capital as setting off the price of issue.
Associated company IonPhasE Ltd has been given a EUR 250,000 short term
loan, which
matured on 31 October 2011 and EUR 171.000 short-term loan which matured 14
November 2011.
The interest rate of loans is the 12-month Euribor + 3 %.
Loans were not repaid on 31 December 2011.
Negotiations of arranging finance to company by issuing shares were in progress
and took place in
January 2012. Loans mentioned were repaid.
An absolute guarantee in the amount of EUR 250,000 was given to the
associated company IonPhase Ltd
as security for its bank guarantee overdraft facility and EUR 50.000
delivery guarantee to suppliers.
1 - 12 1 - 12
2011 2010
Discontinued operations
Related party transactions
Associated companies
Sales income 0,6
Trade receivables 0,3
Interest income 0,0 0,0
Loan receivables 0,3 0,2
Interest receivables 0,0
Associated company Greenpoint Ltd has been given a loan of EUR 300.000.
Key indicators quarterly
Q4/11 Q3/11 Q2/11 Q1/11 Q4/10 Q3/10 Q2/10 Q1/10
Turnover, MEUR 38,8* 51,2 62,0 58,8 62,2 62,5 53,9 40,8
Operating profit, MEUR -0,1 2,3 4,2 3,7 3,2 3,5 6,2 1,5
Operating profit, % N/A 4,6 6,8 6,2 5,1 5,6 11,6 3,6
Net income, MEUR -4,4 -3,5 2,8 2,1 1,6 3,3 3,9 2,0
EPS, EUR -0,08 -0,06 0,05 0,04 0,03 0,06 0,07 0,03
* Distontinued operations' turnover
Calculation of key
indicators
Return on equity, % = Net profit for the period x 100
------------------------------------------------------
Shareholders' equity (average)
Return on investment, = (Profit before taxes + interest and other financial
% expenses) x 100
------------------------------------------------------
Balance sheet total - non-interest-bearing
liabilities (average)
Gearing (%) = (Interest-bearing liabilities - cash and other liquid
financial assets) x 100
------------------------------------------------------
Shareholders' equity
Equity ratio (%) = Shareholders' equity x 100
------------------------------------------------------
Balance sheet total - advance payments received
Earnings per share = Net profit for the period
------------------------------------------------------
Average adjusted number of shares during the year
Shareholders' equity = Shareholders' equity
per share
------------------------------------------------------
Adjusted number of shares at the end of the financial
period
Dividend per share = Dividend to be distributed for the period (Board's
proposal)
------------------------------------------------------
Number of shares at the end of year
Dividend per earnings = Dividend per share x 100
(%)
------------------------------------------------------
Earnings per share
Effective dividend = Dividend per share x 100
yield (%)
------------------------------------------------------
Share price at the end of year
Price-to-earnings = Share price at the end of year
ratio (P/E)
------------------------------------------------------
Earnings per share
Average share price = Total share turnover
------------------------------------------------------
Number of shares traded
Market capitalisation = Number of shares x last trading price of the
financial period
SIEVI CAPITAL PLC
Jorma J. Takanen
President & CEO
Additional information:
President Jorma J. Takanen
Tel +358 8 4882 502
Distribution NASDAQ OMX Helsinki
Major Media
www.sievicapital.com
Sievi Capital Group is an investment company which objective is to make the
management of the company's funds more effective and productive by diversifying
the risks and finding new growth potential.
The associated companies of Sievi Capital Group:
Kitron ASA (KIT) (Sievi Capital plc's share of ownership 32,96%) is a listed
Norwegian subcontractor, which operates in five different customer segments:
the marine and oil industry, basic industry, defence equipment industry,
hospital and healthcare equipment industry and data and telecommunications
industry. In addition to Norway, Kitron ASA has plants and production in
Sweden, Lithuania, Germany, China and the United States. Kitron ASA's turnover
in 2011 was NOK 1,656.1 million (about EUR 213.6 million). www.kitron.com
iLOQ Ltd (Sievi Capital plc's share of ownership 23%) develops, manufactures
and markets innovative, high security, electronic and battery-free locking
solutions that combine modern mechatronics with communications and software
technology. The functionality of the iLOQ S10 product concept developed by iLOQ
Ltd and the added customer value it generates has been shown to be good by
achieving significant growth and customer accounts in the Finnish lock market.
The company has built a Finnish distributor network that covers growth centres
and major cities. www.iloq.fi
IonPhasE Ltd (Sievi Capital plc's share of ownership 40%) develops and
manufactures high performance dissipative polymers that help to control static
electricity. IonPhasE products are utilized in wide range of industries like
chemical, automotive, telecommunication and consumer electronics. Based on
own-patented technology, IonPhasE manufactures polymers called IonPhasE IPE.
www.ionphase.fi
Panphonics Ltd (Sievi Capital plc's share of ownership 40%) is the world's
leading provider of directional audio solutions. Panphonics manufactures
directional audio solutions for acoustically demanding applications based on
its own patented technology. Panphonics Sound Shower directional audio speakers
can be found in banks, retail stores, digital signage projects, information
kiosks, theatres, and offices throughout the world. Panphonics is also
component manufacturer and licensor of plane wave technology for industrial
audio manufacturers and audio solution providers. www.panphonics.com
In addition Sievi Capital plc's share of ownership in Lännen Tehtaat plc is 8,6
%. Lännen Tehtaat Oyj is a food production company whose shares are quoted on
NASDAQ OMX Helsinki Oy. The business operations of the group consist of the
Frozen Food business, the Seafood business and the Grains and Oilseeds
business. Lännen Tehtaat operates in the northern Baltic Sea region.
www.lannen.fi
Not for release over US newswire services. 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 Sievi
Capital plc 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 Sievi Capital plc 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.
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