2009-08-04 07:30:00 CEST
2009-08-04 07:30:02 CEST
REGULATED INFORMATION
Scanfil - Interim report (Q1 and Q3)
SCANFIL GROUP'S INTERIM REPORT 1 JANUARY - 30 JUNE 2009
SCANFIL PLC INTERIM REPORT 4 AUGUST 2009 8.30 a.m.
SCANFIL GROUP'S INTERIM REPORT 1 JANUARY - 30 JUNE 2009
January - June
- Turnover for the first six months of 2009 totalled EUR 99.5 million
(108.7 in the corresponding period 2008)
- Operating profit was EUR 9.2 (11.4) million, which is 9.3 (10.5) % of
turnover
- Profit before taxes was EUR 10.8 (12.7) million
- Profit for the review period was EUR 7.9 (9.8) million
- Earnings per share were EUR 0.13 (0.17)
April - June
- Turnover for the second quarter totalled EUR 49.9 million (58.7 in the
corresponding period in 2008)
- Operating profit was EUR 5.0 (6.6) million representing 10.0 (11.3)% of
turnover
- Profit before taxes was EUR 8.5 (7.8) million
- Earnings per share amounted EUR 0.11 (0.11)
Harri Takanen, President of Scanfil plc:
”Despite the difficult market situation, Scanfil managed to maintain its
profitability at a very satisfactory level, and even slightly increase its net
sales compared to the first quarter of the year. Sales to industrial electronics
customers increased thanks to new customers and products.
The current economic situation can also be viewed as a challenge and an
opportunity to prepare for the future. As a financially stable company, Scanfil
can continue to develop its operations and production according to plan, with
the focus on a more cost-effective business and an improved competitive edge
once the economic situation takes a turn for the better. Despite the uncertainty
of the contract manufacturing market, the basic tone of the company's operations
remains positive, and we are confident of the company's potential and ability to
expand its business.”
DEVELOPMENT OF OPERATIONS
Scanfil plc
During the review period, Scanfil plc's investment activities have been largely
focused on the investment of cash in hand. No strategic investments were made
during the period.
Scanfil EMS Oy's general meeting has decided on a return of capital to its
parent company Scanfil plc by decreasing the reserve for invested non-restricted
equity so that the equity ratio of the company will be approximately 40%. The
return of capital will not exceed EUR 50 million, and, of this sum, EUR 15
million were paid by 30 June 2009. The return of capital is an internal Group
transaction.
Scanfil EMS Group
Demand development by Scanfil's telecommunications and industrial electronics
customers varied by sector in the first six months of the year. Sales to
industrial electronics customers developed positively during the review period,
and the share of industrial electronics customers of the total sales in
January-June increased to 45% (36% in the corresponding period in 2008) thanks
to new customers and products. The company's continued efforts to diversify its
customer base produced good results. As a result of the weakened market
situation, the demand by telecommunications customers decreased markedly
compared to the corresponding period last year.
Even though Scanfil maintained its market share in the telecommunications
products market and managed to significantly increase its market share with one
customer, the company's turnover decreased by 8.4% in the first six months of
2009 compared to the corresponding period last year due to the decreased demand
for telecommunications products. This year, changes in demand have been rapid,
but overall demand remained at the level of the first six months, and the
turnover for the second quarter remained at the same level as during the first
quarter.
Operating profit for the first six months of 2009 decreased slightly compared to
the corresponding period last year, but the company managed to maintain its
profitability at a very satisfactory level. Scanfil's measures to make its
production and activities more efficient will continue as planned. The uncertain
market situation provides financially strong and cost-efficient companies with a
good opportunity to take actions and make investments that will ensure the
profitability of the company's operations in the present situation and prepare
the company for future changes in the market.
FINANCIAL DEVELOPMENT
The Group's turnover for January - June was EUR 99.5 (108.7) million, down 8.4 %
year-on-year. Distribution of turnover based on the location of customers was as
follows: Finland 45 (51) %, rest of Europe 18 (18) %, Asia 36 (29) %, USA 1 (1)
% and others 1 (1) %.
During the review period, the Group's income from customers that constitutes a
minimum of 10 % of the Group's income in accordance with IFRS 8 was as follows:
the biggest customer EUR 35.0 (47.6) million, 36 % (43 %) of the Group's
turnover, the second biggest EUR 13.9 (8.1) million, 14 % (7 %) of the Group's
turnover and the third biggest customer EUR 13.5 (13.1) million, 14 % (12 %) of
the Group's turnover.
The Chinese subsidiaries' sales accounted for 39 % (35 %) of the Group's sales
during the review period including deliveries to the Group's other plants.
Operating profit during the review period was at very satisfactory level EUR 9.2
(11.4) million, representing 9.3 (10.5)% of turnover. Profit for the review
period amounted to EUR 7.9 (9.8) million. Earnings per share were EUR 0.13
(0.17) and return on investment was 14.6 (18.3)%.
Turnover in April - June was EUR 49.9 (58.7) million. Operating profit in the
second quarter totalled EUR 5.0 (6.6) million, representing 10.0 (11.3)% of
turnover. Profit for the quarter was EUR 6.6 (6.2) million. The profit
improvement is due to revenues from investment activities. Earnings per share
were EUR 0.11 (0.11).
FINANCING AND CAPITAL EXPENDITURE
The Group enjoys a strong financial position.
The consolidated balance sheet totalled EUR 191.7 (191.0) million. Liabilities
amounted to EUR 47.1 (54.0) million, EUR 35.1 (42.0) million of which were
non-interest-bearing and EUR 12.0 (12.0) million interest-bearing. The equity
ratio was 75.4 (71.7)% and gearing -46.7 (-34.1)%.
Financial assets totalled EUR 79.5 (58.4) million, of which EUR 45.0 (37.4)
million has been deposited in bank accounts and in time deposits with maturity
of three months or less. Deposits of over three months amounted to EUR 3.1 (0.5)
million.
An additional EUR 31.4 (20.6) million has been invested in financial
instruments, mainly in bonds, credit linked notes as well as bond and index
funds. In compliance with the IFRS, the investments have been measured at fair
value. Net profit for the period of January -June 2009 includes EUR 1.2 million
in investment revenues and EUR 0.7 million in increases in the fair value of
investments. A loss of EUR 1.2 million, which was recorded as an expense in the
fiscal year 2008, was realised during the review period.
In line with the Group's investment policy, half of the investment portfolio is
in risk-free interest rate investments and around one third in low-risk
investments, while around one fifth can be invested in non-capital guaranteed
moderate risk investments. No strategic investments were made in the accounting
period.
Cash flows from operating activities in review period of January - June was
EUR 19.4 (12.9) million positive. A total of EUR 10.5 (2.1) million was released
from working capital. The change in working capital consists of decreases of EUR
4.5 million in inventory and EUR 3.5 million in short-term non-interest bearing
receivables, and an increase of EUR 2.5 million in short-term non-interest
bearing liabilities.
Gross investments in fixed assets totalled EUR 0.7 (2.1) million, which is 0.7
(1.9)% of turnover. Depreciations were EUR 2.6 (3.2) million.
BOARD OF DIRECTORS' AUTHORISATION
The Annual General Meeting decided on 26 March 2009 according to the Board of
Directors' proposal to authorize the Board of Directors to decide on the
acquisition of the Company's own shares with distributable assets.
The Board of Directors has no existing share issue authorisations or
authorisations to issue convertible bonds with warrants.
OWN SHARES
On 30 June 2009, the company owned a total of 2,960,735 of its own shares that
represented 4.9 % of the company's share capital and votes. Between January -
June 2009 the company acquired 695,230 of its own shares, average price per
share was EUR 2.03.
During the review period, the company disposed of 5,687 of its own shares in
conjunction with the share-based profit-sharing scheme of the Group's Management
Team.
SHARE TRADING AND SHARE PERFORMANCE
The highest trading price during the review period was EUR 2.20 and the lowest
EUR 1.82, the closing price for the period standing at EUR 1.95. A total of
4,227,664 shares were traded during the period, corresponding to 7.0 % of the
total number of shares. The market value of the shares on 30 June 2009 was EUR
117.8 million.
PERSONNEL
Scanfil Group's personnel averaged 2,033 (2,104) employees during the review
period and the company employed 2,058 (2,157) employees at the end of the review
period, of whom 1,518 (1,619) were employed in the company's foreign plants. In
all, 74 (75) % of the Group's personnel were employed by subsidiaries outside
Finland on 30 June 2009.
EVENTS AFTER THE REVIEW PERIOD
Scanfil plc has decided to deliver to the Supreme Court a petition for leave of
appeal concerning the verdict given by the Helsinki Court of Appeal on 18 June
2009, which orders the company to pay a corporate fine of EUR 25,000 in the
matter concerning a delayed profit warning at the turn of 2005-2006.
FUTURE PROSPECTS
Scanfil plc
As an investment company, Scanfil plc is actively seeking new growth
opportunities for the Group. The ongoing weak overall economic situation
provides a financially strong company with a good opportunity for strategic
investments and expansion into new business areas, as well as for strengthening
its current business area.
Scanfil EMS Subgroup
The development of the market situation in Scanfil's business environment is
very difficult to predict, and it is not possible to provide an estimate on the
development of the telecommunications and industrial electronics markets during
the current year. Achieving the turnover and operating profit levels of 2008 in
2009 is challenging in the present market situation.
New customers in the industrial electronics sector have had a positive effect on
sales in the first six months of the year, but it is very difficult to predict
how the continuing market uncertainty will affect demand in the sector as a
whole toward the end of the year.
Scanfil believes it will maintain its market share in the telecommunications
technology sector. The market decline forecasted for 2009 and the increase in
service business for telecommunications customers are expected to decrease
Scanfil's sales of telecommunications products from last year.
Scanfil's strong financial position provides the company with a good opportunity
to strengthen its competitive position on the market. Customers can rely on the
proven abilities of a financially sound and cost-effective company also in
uncertain financial and demand circumstances.
OPERATIONAL RISKS AND UNCERTAINTIES
The risks facing Scanfil's business have remained essentially the same. The most
significant 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.
The still ongoing uncertainty in the global financial situation and the constant
strong fluctuations in demand in Scanfil's business sectors pose an operational
near-term risk to the company's business area that is difficult to estimate. The
continuing low level of investment reduces demand in the markets of Scanfil's
customers, and this may weaken Scanfil's sales and profitability.
ACCOUNTING PRINCIPLES
Interim reports have been prepared in accordance with the recognition and
measurement principles of the IAS 34 Interim reports standard.
As of January 1, 2009, the Group has applied the following new and revised
standards: IFRS 8 Operating Segments and IAS 1 Presentation of Financial
Statements. IFRS 8 has an effect on the segment information in the notes and
IAS 1 has an effect on the presentation of the income statement. The company
reports the operating segments according to geographical locations, which are
Europe and Asia. The company follows profits according to geographical
locations. Otherwise the same accounting principles have been applied as in the
2008 Financial Statement. Calculation principles and formulas of the Key
Financial Indicators remain unchanged and have been presented in the 2008
Financial Statements.
Individual figures and grand totals of tables have been rounded to the nearest
million euros, so they will not always add up. The figures are unaudited.
CONSOLIDATED INCOME STATEMENT
EUR million
2009 2008 2009 2008 2008
4 - 6 4 - 6 1 - 6 1 - 6 1 - 12
TURNOVER 49.9 58.7 99.5 108.7 218.9
Changes in inventories of finished
goods and work in progress - 1.9 0.6 - 2.5 - 0.0 - 0.1
Other operating income 0.2 0.1 0.4 0.3 2.5
Expenses - 41.9 - 51.2 - 85.6 - 94.4 - 193.4
Depreciation - 1.3 - 1.6 - 2.6 - 3.2 - 6.8
Operating profit 5.0 6.6 9.2 11.4 21.1
Financial income and expenses 3.5 1.2 1.6 1.3 - 1.7
PROFIT BEFORE TAXES 8.5 7.8 10.8 12.7 19.4
Income taxes - 1.9 - 1.6 - 3.0 - 2.9 - 3.7
NET PROFIT FOR THE PERIOD 6.6 6.2 7.9 9.8 15.6
Attributable to:
Equity holders of the parent 6.6 6.2 7.9 9.8 15.6
Earnings/share (EPS), EUR 0.11 0.11 0.13 0.17 0.27
The company does not have items that might dilute the earnings per share.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million
2009 2008 2009 2008 2008
4 - 6 4 - 6 1 - 6 1 - 6 1 - 12
NET PROFIT FOR THE PERIOD 6.6 6.2 7.9 9.8 15.6
Other comprehensive income
Translation differences - 1.9 2.0 - 1.1 0.6 4.6
Other comprehensive income,
net of tax - 1.9 2.0 - 1.1 0.6 4.6
TOTAL COMPREHENSIVE INCOME 4.6 8.2 6.8 10.4 20.2
Attributable to:
Equity holders of the parent 4.6 8.2 6.8 10.4 20.2
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million 30.6. 30.6. 31.12.
2009 2008 2008
ASSETS
Non-current assets
Property, plant and equipment 31.6 36.0 33.7
Goodwill 2.4 2.7 2.4
Other intangible assets 1.2 1.1 1.4
Available-for-sale investments 0.0 0.3 0.0
Financial assets at fair value
through profit or loss 8.5 8.6 7.7
Receivables 0.2 0.2
Deferred tax assets 0.4 0.2 1.0
Total non-current assets 44.1 49.1 46.4
Current assets
Inventories 25.5 32.5 30.2
Trade and other receivables 46.3 54.7 50.5
Advance payments 0.2 0.2 0.1
Financial assets at fair value
through profit or loss 22.9 12.0 12.2
Available-for-sale investments, liquid assets 3.1 0.5 3.2
Available-for-sale investments,
cash equivalents 30.5 21.4 34.0
Cash and cash equivalents 14.5 16.0 11.1
Total current assets 143.0 137.3 141.2
Non-current assets held for sale 4.6 4.6 4.6
TOTAL ASSETS 191.7 191.0 192.2
SHAREHOLDERS' EQUITY AND LIABILITIES
Equity
Share capital 15.2 15.2 15.2
Share premium account 16.1 16.1 16.1
Treasury shares - 8.8 - 6.9 - 7.4
Translation differences 0.9 - 2.0 2.0
Other reserves 4.0 3.5 3.5
Retained earnings 117.3 111.1 116.9
Total equity 144.6 137.0 146.2
Non-current liabilities
Deferred tax liabilities 1.1 1.0 1.0
Provisions 5.4 6.5 6.0
Interest bearing liabilities 12.0 12.0
Total non-current liabilities 6.5 19.5 19.1
Current liabilities
Trade and other liabilities 27.7 33.9 25.9
Current tax 0.9 0.6 1.0
Interest bearing liabilities 12.0
Total current liabilities 40.6 34.5 26.9
Total liabilities 47.1 54.0 46.0
TOTAL SHAREHOLDERS' EQUITY
AND LIABILITIES 191.7 191.0 192.2
STATEMENT OF CHANGES IN EQUITY
EUR million
A = Share capital
B = Share premium account
C = Treasury shares
D = Translation differences
E = Other reserves
F = Retained earnings
G = Equity total
SHAREHOLDER'S EQUITY A B C D E F G
1.1.2008 15.2 16.1 - 6.9 - 2.6 2.6 109.3 133.6
TOTAL COMPREHENSIVE INCOME 0.6 9.8 10.4
Payment of dividends - 7.0 - 7.0
Transfer to funds 1.0 - 1.0 0
Distribution of treasury shares 0.0 0.0
SHAREHOLDER' EQUITY
30.6.2008 15.2 16.1 - 6.9 - 2.0 3.5 111.1 137.0
SHAREHOLDER'S EQUITY A B C D E F G
1.1.2009 15.2 16.1 - 7.4 2.0 3.5 116.9 146.2
TOTAL COMPREHENSIVE INCOME - 1.1 7.9 6.8
Payment of dividends - 7.0 - 7.0
Transfer to funds 0.4 - 0.4 0
Distribution of treasury shares 0.0 0.0
Acquisition of treasury shares - 1.4 - 1.4
SHAREHOLDER' EQUITY
30.6.2009 15.2 16.1 - 8.8 0.9 4.0 117.3 144.6
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million
2009 2008 2008
1 - 6 1 - 6 1 - 12
Cash flows from operating activities
Net profit 7.9 9.8 15.6
Adjustments for the net profit 3.4 4.2 10.2
Change in net working capital 10.5 2.1 2.3
Paid interests and other financial expenses - 0.5 - 0.4 - 0.8
Interest received 0.5 0.6 1.4
Income taxes paid - 2.3 - 3.5 - 5.5
Net cash from operating activities 19.4 12.9 23.1
Cash flows from investing activities
Purchase of tangible and
intangible assets - 0.9 - 2.2 - 3.4
Proceeds from sale of tangible and
intangible assets 0.1 0.2 2.2
Purchase of investments - 22.2 - 21.3 - 29.1
Proceeds from sale of investments 11.5 0.5 3.5
Interest received 1.0 0.2 0.8
Proceeds from repayments of loans 0.0
Dividends received 0.0 0.0 0.0
Net cash used in investing activities - 10.5 - 22.6 - 26.0
Cash flows from financing activities
Purchase of own shares - 1.4 - 0.5
Proceeds from long-term borrowings 12.0 12.0
Repayment of short-term borrowings - 7.5 - 7.5
Dividends paid - 7.0 - 7.0 - 7.0
Net cash used in financing activities - 8.4 - 2.5 - 3.1
Net increase/decrease in cash and
cash equivalents 0.5 - 12.3 - 6.0
Cash and cash equivalents
at beginning of period 45.1 50.0 50.0
Changes in exchange rates - 0.6 0.1 1.0
Cash and cash equivalents
at end of period 45.0 37.8 45.1
KEY FINANCIAL INDICATORS 2009 2008 2008
1 - 6 1 - 6 1 - 12
Return on equity, % 10.8 14.9 11.2
Return on investment, % 14.6 18.3 13.7
Interest bearing liabilities, EUR million 12.0 12.0 12.0
Gearing, % - 46.7 - 34.1 - 38.4
Equity ratio, % 75.4 71.7 76.1
Gross investments in fixed assets, EUR million 0.7 2.1 3.9
% of turnover 0.7 1.9 1.8
Personnel, average 2 033 2 104 2 132
Earnings per share, EUR 0.13 0.17 0.27
Equity per share, EUR 2.50 2.33 2.50
Number of shares, 000's
at end of period 60 714 60 714 60 714
- not counting own shares 57 754 58 721 58 443
- weighted average 58 263 58 719 58 696
The company does not have any liabilities resulting from derivative instruments.
Owing to the nature of the sector, the order book of company covers only a short
period of time and does not give an accurate picture of future development.
SEGMENT INFORMATION
EUR million
2009 2008 2008
1 - 6 1 - 6 1 - 12
TURNOVER
Europe 64.1 76.8 152.3
Asia 40.8 40.7 89.7
Turnover between segments - 5.3 - 8.8 - 23.1
Total 99.5 108.7 218.9
OPERATING PROFIT
Europe 2.9 6.3 10.0
Asia 6.3 5.0 11.1
Total 9.2 11.4 21.1
ASSETS
Europe 89.1 98.0 104.0
Asia 59.8 53.4 51.0
Goodwill 2.2 2.6 2.3
Unallocated assets 40.6 37.0 34.9
Total 191.7 191.0 192.2
CHANGES IN TANGIBLE NON CURRENT ASSETS
EUR million
2009 2008 2008
1 - 6 1 - 6 1 - 12
Book value at beginning of period 33.7 36.5 36.5
Additions 0.7 2.0 3.3
Deductions - 0.1 - 0.1 - 0.3
Depreciations - 2.4 - 3.0 - 6.4
Exchange rate differences - 0.3 0.6 0.6
Book value at end of period 31.6 36.0 33.7
CONTINGENT LIABILITIES
EUR million 2009 2008 2008
1 - 6 1 - 6 1 - 12
Given real estate mortgages 3.4 3.4 3.4
Given business mortgages 18.8 28.4 18.8
Pledged guarantees 0.1 0.1 0.1
Rental liabilities 0.3 0.6 0.5
Scanfil Oyj has arranged a EUR 6.0 million bank guarantee to secure the payment
of contributions related to restructuring of Scanfil NV. Balance sheet of
Scanfil NV includes a corresponding provision.
Scanfil EMS Oy has given a EUR 12.0 million counter guarantee for equal size
bank loan guarantee of Scanfil Oü.
KEY INDICATORS QUARTERLY
Q2/09 Q1/09 Q4/08 Q3/08 Q2/08 Q1/08 Q4/07 Q3/07
Turnover MEUR 49.9 49.6 54.2 56.0 58.7 50.0 54.4 59.1
Operating profit, MEUR 5.0 4.2 4.5 5.2 6.6 4.7 5.5 5.6
Operating profit, % 10.0 8.5 8.3 9.3 11.3 9.5 10.2 9.4
Net income, MEUR 6.6 1.3 2.3 3.5 6.2 3.6 3.4 4.5
EPS, EUR 0.11 0.02 0.04 0.06 0.11 0.06 0.06 0.08
SCANFIL PLC
Harri Takanen
President
Additional information:
President Harri Takanen
Tel +358 8 4882 111
Distribution OMX Nordic Exchanges, Helsinki
Major Media
www.scanfil.com
Scanfil Group comprises the investment and parent company Scanfil plc, and a
subgroup called Scanfil EMS Oy, which is engaged in contract manufacturing for
international telecommunications technology and industrial electronics
manufacturers. The objective of the investment activities is to make the
management of the company's funds more effective and productive by diversifying
the risks and finding new growth potential.
Scanfil has over 30 years of experience in demanding contract manufacturing.
Scanfil is a systems supplier that offers its products and services to
international telecommunications systems manufacturers and industrial
electronics customers. Typical telecommunications products include equipment
systems for mobile and public switched telephone networks. Automation systems,
frequency converters, lift control systems, equipment and systems for
electricity production and transmission, analysers, slot machines and different
meteorological instruments are just some examples of the industrial electronics
products we manufacture. The company has production facilities in China,
Estonia, Hungary and Finland.
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 Scanfil
Oyj 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 Scanfil Oyj 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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