Neo Industrial Oyj - Company Announcement

NEO INDUSTRIAL PLC’S INTERIM MANAGEMENT STATEMENT FOR 1 JANUARY TO 21 APRIL 2016

TURNOVER AND PROFITABILITY INCREASED COMPARED TO PREVIOUS YEAR

NEO INDUSTRIAL PLC          Financial Statement Release      21 April 2016 at
10 am 

NEO INDUSTRIAL PLC’S INTERIM MANAGEMENT STATEMENT FOR 1 JANUARY TO 21 APRIL 2016

TURNOVER AND PROFITABILITY INCREASED COMPARED TO PREVIOUS YEAR

Neo Industrial’s turnover for the period between 1 January and 31 March 2016
was EUR 19.3 million (18.0 million 1.1. – 31.3.2015). Its operating result was
0.6 million (-0.8 million). 

CABLE SEGMENT

Both turnover and profitability of the Cable Segment increased compared to
previous year. 

The Cable segment’s turnover for the period between 1 January and 31 March 2016
was EUR 19.3 million (18.0). The operating result was EUR 0.8 million (-0.5
million). 

In the review period (1 January to 21 April 2016), the sales volume in the
cable market of Nordic countries, the main market area of Reka Cables Ltd,
increased clearly comparing to the year before. However, there were a lot of
regional differences. In other market areas the sales volumes decreased. 

In the end of the review period the raw material EUR prices of aluminium and
copper were close to the price level of the previous turn of the year. 

The loans of the Cable Segment were rearranged as part of the financing
agreement signed by Reka Group. According to the financing solution implemented
in March, the Cable Segment loans were rearranged as long-term financing plans. 

The turnover for Nestor Cables, an associated company of the Cable Segment, was
EUR 3.9 million (5.5 million) for the period between 1 January and 31 March
2016. The operating result was negative. 

RISKS AND UNCERTAINTY FACTORS

Neo Industrial’s financial risks include currency, interest rate, commodity,
liquidity, credit and investment market risks. Financial risks and the related
protection measures are described in more detail in the notes to the latest
financial statements. The company’s future risk factors are related to the
business development of its portfolio companies. The uncertainty of the global
economy and financial market poses a risk to the financial arrangements of the
Group. 

The Group has been rearranging its financing since 2014 and its financing
situation has improved. 

In the Cable segment, the most significant risks are related to market
development, fluctuations of raw material prices and currencies as well as
working capital management in various situations. During considerable seasonal
changes, suppliers’ terms of payment effect significantly on the ability to
ensure competitive delivery times through sufficient inventories. The effects
of seasonal changes on the capacity loads on factories are also aimed to be
evened out by developing operating models. 

NEAR-TERM OUTLOOK

Construction has been picking up in the Nordic Countries and Western Europe.
The Management believes that grid constructors will boost ground cabling
projects to ensure distribution reliability. The net sales of the Cable Segment
are expected to somewhat increase from 2015 and the operating result is
expected to be clearly positive. 

To ensure sufficient funding and liquidity, in addition to negotiations on
financing and payment terms, measures for boosting inventory turnover and
freeing up capital assets are taken into action. 

The information presented in this statement is unaudited.

In accordance with Section 5c of Chapter 2 of the Securities Markets Act, Neo
Industrial will publish interim management statements for the first three and
nine months of the year instead of interim reports. 

Hyvinkää, 21 April 2016

Neo Industrial Plc
Board of Directors

Further information:
Ralf Sohlström, Managing Director, tel. +358 40 770 2720


All comments in this report that do not refer to actual facts are future
estimates. Such estimates include expectations concerning market trends, growth
and profitability as well as statements including the words “believe”, “assume”
or “will be” or a similar expression. Since these estimates are based on
current plans and estimates, they involve risks and uncertainty factors that
may cause the actual results to differ substantially from current statements. 

Among other things, such factors include 1) operating conditions, such as
continued success in production and the ensuing efficiency benefits,
availability and cost of production inputs, demand for new products and changes
in circumstances affecting the acquisition of capital under acceptable
conditions; 2) sector-specific circumstances, such as the intensity of demand
for products, the competition, current and future market prices for the Group’s
products and related pricing pressures, the financial situation of the Group’s
customers and competitors and competitors’ possible new products; and 3) the
general economic situation, such as economic growth in the Group’s main market
areas and changes in exchange rates and interest rates.