Cencorp - Company Announcement

Cencorp Corporation Stock exchange release 7 September 2011 at 09.30 Finnish time

Cencorp Corporation     Stock exchange release 7 September 2011 at 09.30
Finnish time 



PROFIT WARNING: CENCORP WEAKENS THE OUTLOOK FOR 2011 AND STARTS STATUTORY
NEGOTIATIONS CONCERNING LAY-OFFS IN FINLAND 



Cencorp estimates that the full-year net sales and result from operations will
remain lower than earlier forecast. According to the forecast updated due to
sharply weakened market situation, the net sales for 2011 are estimated to be
some EUR 25 million and the operating profit to remain lower than in 2010,
provided that the operating environment and the current economic landscape will
not substantially change. According to the earlier estimate, Cencorp expected
net sales for 2011 to amount to approximately EUR 35-39 million, provided that
no essential change takes place in the current economic landscape. The 12-month
result from operations was expected to improve from 2010. 



Recession threatening the global economy has postponed industrial investment
decisions and, therefore, significantly decreased the net sales and result
forecast for Cencorp' Laser and Automation Applications segment. The change has
been quicker than anticipated and led to a situation where investments by
customers related to this segment have been canceled or postponed by more than
EUR 5.5 million. 



Longer than estimated processes from tenders to orders in the renewable energy
applications had also a substantial impact on the weaker net sales estimate.
The company had earlier expected the first significant order to be finalized
during September 2011, but according to the current estimation, this timetable
is not going to materialize. The first order in this growing segment is still
possible during 2011, but as a prudence measure, the company will not include
this order in the updated 2011 forecast. 



The changes that are currently taking place in the competitive landscape for
mobile phones and a drop in the market share of one of the major customers have
further weakened the net sales development and profitability in the Special
Components segment. 



Cencorp's order stock was EUR 2.9 million on 15 August 2011, the publishing
date of the January-June interim report, and EUR 2.9 million on the publishing
date of this release. 



Measures that were launched already during the first quarter of the year in
order to rationalize the operations and improve profitability have stepped up
in the Special Components segment, among other things, by concentrating
manufacturing in China on two plants instead of the previous three. The
rationalization measures will be continued by focusing on those product groups
in which growth and profitability can be achieved without remarkable
investments. 

Furthermore, Cencorp responds to the changes in the market situation by
starting statutory negotiations in order to lay off the Finnish personnel in
phases, according to the demand, for no more than 90 days. The statutory
negotiations concern all employees in Finland, e.g. some 68 people. 

In 2011, Cencorp's net sales were EUR 12.8 million. The net sales were
increased by the integration of the Face business, i.e. the current Special
Components segment, into Cencorp by EUR 1.7 million. 

Alongside the electronics industry, Cencorp will actively focus on new emerging
markets, such as energy production and energy supply applications for mobile
equipment. In these selected areas, the company seeks a leading position as a
supplier of special technology in the long term. 

Cencorp will publish the January-September interim report on Monday, 7 November
2011. 



CENCORP CORPORATION



Mats Eriksson
President and CEO


Further information:
Mats Eriksson, President and CEO, tel. +358 400 358 982,
mats.eriksson@cencorp.com 


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