VAAHTO GROUP PLC OYJ STOCK EXCHANGE RELEASE 19.4.2007 at 10.00 a.m. VAAHTO GROUP INTERIM REPORT FOR SEPTEMBER 1, 2006 - FEBRUARY 28, 2007 Vaahto Group's turnover for the period under review was 37.6 million euros (29.0 million euros), with an operating profit of 1.0 million euros (0.1 million euros). The turnover increased of 29.9% from that of the reference period. Although the group's profitability improved thanks to increased turnover, it did not meet the targets set for the period. Vaahto Group's order backlog increased during the period under review; it was 49.7 million euros at the beginning of the period under review and 54.7 million euros at the end. Pulp & Paper Machinery Despite the tough competition, the Pulp & Paper Machinery division achieved fair sales figures in the period under review. Significant new orders included, e.g., a glass nonwovens production line for Ahlstrom Tver in Russia, the modernization of a board machine for Corenso (a subsidiary of Stora Enso) in the U.S., and headbox projects for Lee & Man and Anhui Shanying in China. The order backlog has developed in accordance with the division's targets toward ever more technologically advanced key components of paper and board machines. The division's roll sales have been good, and the order backlog increased in the period under review. Also, the order backlog for roll servicing was high at the end of the period. The Pulp & Paper Machinery division's turnover increased from that of the reference period, and the division saw positive results. Continued, focused product development work has improved the division's strategic competitive position further and thus strengthened its position as one of the leading suppliers of technology and services in the demanding paper and board machine market. Process Machinery The Process Machinery division's pressure vessel, reactor, and column sales were good during the period under review. The most significant order was for vessels and agitators, received from Belgium by Japrotek Oy Ab, part of the division. The order backlog for vessel business was high at the end of the period under review, and thus the prospects for the latter half of the fiscal year are good. The spiral heat exchanger business was clearly behind the goals set for the period. The order backlog increased toward the end of the period, and the prospects for the second half of the fiscal year have improved. The market situation for agitators has shown signs of improvement, and sales were moderate in the period under review. Stelzer Rührtechnik International GmbH, a German company in the division, clearly increased its turnover from that of the reference period, and continued growth is expected for the second half. The Process Machinery division's turnover was higher than the equivalent figure for the reference period, and the result was profitable. Thanks to the savings in costs and the rationalization activities, the division is well set to improve its profitability further. Research and development The group's research and development activities concentrate for the most part on improving the competitiveness of the Pulp & Paper Machinery division's key components for paper and board machines, and that of roll servicing. The scope of the group's R&D activities remained the same as in the previous fiscal period. Investments The group's gross investment for the review period came to 0.8 million euros (0.8 million euros). The most significant investment was a new heating system for Vaahto Oy's production facilities. Other investments consisted mainly of machinery and equipment acquisitions. Financing The group's liquidity remained at a satisfactory level. Net financial expenses came to 0.3 million euros (0.4 million euros), which is 0.7% of the turnover. The equity ratio increased slightly from that of the reference period, to 34.5% (33.9%). Personnel The number of group personnel averaged 408 (411) over the period. Share issue authorizations The Board of Directors has no authority to issue new shares, convertible bonds, or bonds with warrants, nor the authorization to obtain or surrender shares. International financial reporting standards The interim report was drawn up in accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting. Forecast of developments Vaahto Group's operating environment is highly challenging due to the demanding market and competitive situation for the group's main products. However, determined product development and rationalization activities have improved the group's competitiveness markedly. A good order backlog and an advanced product range enable profitable business in the future as well. -------------------------------------------------------------------------------- | CONSOLIDATED INCOME | Interim | Interim | Annual | | STATEMENT, IFRS | Report | Report | Report | | 1000 EUR | 1.9.2006- | 1.9.2005- | 1.9.2005- | | | 28.2.2007 | 28.2.2006 | 31.8.2006 | | | 6 months | 6 months | 12 months | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 37 612 | 28 963 | 65 414 | -------------------------------------------------------------------------------- | Change in finished goods and | 1 438 | 1 062 | -835 | | work in progress | | | | -------------------------------------------------------------------------------- | Production for own use | 251 | 98 | 359 | -------------------------------------------------------------------------------- | Other operating income | 30 | 202 | 602 | -------------------------------------------------------------------------------- | Material and services | -21 807 | -15 040 | -33 254 | -------------------------------------------------------------------------------- | Employee benefit expenses | -10 405 | -9 653 | -18 641 | -------------------------------------------------------------------------------- | Depreciations | -905 | -895 | -1 804 | -------------------------------------------------------------------------------- | Other operating expenses | -5 205 | -4 669 | -9 381 | -------------------------------------------------------------------------------- | Operating profit | 1 007 | 69 | 2 461 | -------------------------------------------------------------------------------- | Financing income and expenses | -278 | -387 | -948 | -------------------------------------------------------------------------------- | Profit or loss before taxes | 729 | -318 | 1 513 | -------------------------------------------------------------------------------- | Tax on income from operations | -184 | 42 | -451 | -------------------------------------------------------------------------------- | Profit or loss for the period | 545 | -276 | 1 062 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net profit or loss | | | | | attributable: | | | | -------------------------------------------------------------------------------- | To equity holders of the | 355 | -284 | 920 | | parent | | | | -------------------------------------------------------------------------------- | To minority interest | 190 | 8 | 143 | -------------------------------------------------------------------------------- | Total | 545 | -276 | 1 062 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share calculated | | | | | on profit attributable to | | | | | equity holders of the parent: | | | | | | | | | -------------------------------------------------------------------------------- | EPS undiluted, euros/share | 0.12 | -0.10 | 0.32 | -------------------------------------------------------------------------------- | EPS diluted, euros/share | 0.12 | -0.10 | 0.32 | -------------------------------------------------------------------------------- | Average number of shares | 2 872 | 2 872 | 2 872 | | (1000 shares) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET, | Interim | Interim | Annual | | IFRS | Report | Report | Report | | 1000 EUR | 28.2.2007 | 28.2.2006 | 31.8.2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Intangible assets | 654 | 546 | 599 | -------------------------------------------------------------------------------- | Goodwill | 1 702 | 1 702 | 1 702 | -------------------------------------------------------------------------------- | Investment properties | 299 | 316 | 308 | -------------------------------------------------------------------------------- | Tangible assets | 14 878 | 14 928 | 15 031 | -------------------------------------------------------------------------------- | Non-current trade and other | 14 | 3 | 3 | | receivables | | | | -------------------------------------------------------------------------------- | Other long-term investments | 46 | 236 | 46 | -------------------------------------------------------------------------------- | Deferred tax asset | 13 | 158 | 1 | -------------------------------------------------------------------------------- | Non-current assets | 17 608 | 17 889 | 17 690 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Inventories | 9 025 | 9 017 | 7 501 | -------------------------------------------------------------------------------- | Trade receivables and other | 16 689 | 13 905 | 11 695 | | receivables | | | | -------------------------------------------------------------------------------- | Tax receivable, income tax | 16 | 61 | 16 | -------------------------------------------------------------------------------- | Cash equivalents | 0 | 2 434 | 3 600 | -------------------------------------------------------------------------------- | Cash and bank | 1 302 | 1 554 | 2 391 | -------------------------------------------------------------------------------- | Current assets | 27 031 | 26 970 | 25 202 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 44 639 | 44 860 | 42 892 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity and liabilities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share capital | 2 872 | 2 872 | 2 872 | -------------------------------------------------------------------------------- | Share premium account | 6 | 6 | 6 | -------------------------------------------------------------------------------- | Other reserves | 2 113 | 2 038 | 2 118 | -------------------------------------------------------------------------------- | Retained earnings | 5 256 | 4 271 | 5 479 | -------------------------------------------------------------------------------- | Equity attributable to equity | 10 247 | 9 187 | 10 475 | | holders of the parent | | | | -------------------------------------------------------------------------------- | Minority share | 1 308 | 1 080 | 1 215 | -------------------------------------------------------------------------------- | Shareholders' equity | 11 555 | 10 268 | 11 689 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Deferred tax liability | 880 | 721 | 803 | -------------------------------------------------------------------------------- | Long-term liabilities, | 3 623 | 4 894 | 4 313 | | interest-bearing | | | | -------------------------------------------------------------------------------- | Non-current provisions | 250 | 267 | 250 | -------------------------------------------------------------------------------- | Non-current liabilities | 4 754 | 5 881 | 5 367 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Short-term liabilities, | 4 848 | 4 763 | 3 826 | | interest-bearing | | | | -------------------------------------------------------------------------------- | Trade payables and other | 23 482 | 23 949 | 22 009 | | liabilities | | | | -------------------------------------------------------------------------------- | Current liabilities | 28 330 | 28 711 | 25 836 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | 33 084 | 34 593 | 31 203 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity and liabilities | 44 639 | 44 860 | 42 892 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FIGURES, IFRS | Interim | Interim | Annual | | | Report | Report | Report | | | 1.9.2006- | 1.9.2005- | 1.9.2005- | | | 28.2.2007 | 28.2.2006 | 31.8.2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share EUR | 0,12 | -0,10 | 0,32 | -------------------------------------------------------------------------------- | Shareholders' equity per | 3,57 | 3,20 | 3,65 | | share EUR | | | | -------------------------------------------------------------------------------- | Solidity % | 34,5 | 33,9 | 39,1 | -------------------------------------------------------------------------------- | Order backlog 1000 EUR | 54 697 | 52 815 | 49 723 | -------------------------------------------------------------------------------- | Gross investments 1000 EUR | 800 | 758 | 1 859 | -------------------------------------------------------------------------------- | Total average number of | 408 | 411 | 410 | | personnel | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED FLOW OF FUNDS | Interim | Interim | Annual | | STATEMENT, IFRS | Report | Report | Report | | 1000 EUR | 1.9.2006- | 1.9.2005- | 1.9.2005- | | | 28.2.2007 | 28.2.2006 | 31.8.2006 | | | 6 months | 6 months | 12 months | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit or loss before taxes | 729 | -318 | 1 513 | -------------------------------------------------------------------------------- | Adjustments | 1 175 | 1 265 | 2 731 | -------------------------------------------------------------------------------- | Change in working capital | -5 046 | 1 701 | 3 238 | -------------------------------------------------------------------------------- | Financial income and expenses | -398 | -389 | -1 012 | | and taxes | | | | -------------------------------------------------------------------------------- | Flow of funds from operations | -3 539 | 2 259 | 6 470 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments in tangible and | -800 | -758 | -1 859 | | intangible assets | | | | -------------------------------------------------------------------------------- | Income from sales of tangible | 0 | 18 | 54 | | and intangible assets | | | | -------------------------------------------------------------------------------- | Granted loans | -11 | 0 | 0 | -------------------------------------------------------------------------------- | Flow of funds from | -811 | -741 | -1 805 | | investments | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Increase of the | 1 380 | 67 | 650 | | interest-bearing liabilities | | | | -------------------------------------------------------------------------------- | Decrease of the | -1 048 | -1 989 | -3 715 | | interest-bearing liabilities | | | | -------------------------------------------------------------------------------- | Dividends | -671 | -418 | -418 | -------------------------------------------------------------------------------- | Flow of funds from financial | -339 | -2 340 | -3 483 | | items | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change of liquid funds | -4 689 | -822 | 1 181 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF | Share | Shar | Hedg | Other | Re- | Mino- | Total | | CHANGES IN | capi- | e | - | res- | tained | rity | | | SHAREHOLDERS' | tal | prem | ing | erves | earn- | inte- | | | EQUITY, IFRS | | - | res- | | ings | rest | | | 1000 EUR | | ium | erve | | | | | | | | acc- | | | | | | | | | ount | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interim Report | | | | | | | | | 1.9.2006 - | | | | | | | | | 28.2.2007 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' | 2 872 | 6 | 6 | 2 112 | 5 479 | 1 215 | 11 689 | | equity | | | | | | | | | 1.9.2006 | | | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | -1 | | | | -1 | | hedging: | | | | | | | | | amount | | | | | | | | | transferred to | | | | | | | | | the hedged | | | | | | | | | purchasing | | | | | | | | | price | | | | | | | | -------------------------------------------------------------------------------- | Change in | | | | | -7 | | -7 | | translation | | | | | | | | | difference | | | | | | | | -------------------------------------------------------------------------------- | Reclassificati | | | | -3 | 3 | | 0 | | ons between | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | Net | | | -1 | -3 | -4 | | -8 | | profits/losses | | | | | | | | | recognized | | | | | | | | | directly to | | | | | | | | | shareholders' | | | | | | | | | equity | | | | | | | | -------------------------------------------------------------------------------- | Profit/loss | | | | | 355 | 190 | 545 | | for the period | | | | | | | | -------------------------------------------------------------------------------- | Total profits | | | -1 | -3 | 352 | 190 | 537 | | and losses | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | -574 | -97 | -671 | | distribution | | | | | | | | -------------------------------------------------------------------------------- | Shareholders' | 2 872 | 6 | 4 | 2 109 | 5 256 | 1 308 | 11 555 | | equity | | | | | | | | | 28.2.2007 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF | Share | Shar | Hedg | Other | Re- | Mino- | Total | | CHANGES IN | capi- | e | - | res- | tained | rity | | | SHAREHOLDERS' | tal | prem | ing | erves | earn- | inte- | | | EQUITY, IFRS | | - | res- | | ings | rest | | | 1000 EUR | | ium | erve | | | | | | | | acc- | | | | | | | | | ount | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interim Report | | | | | | | | | 1.9.2005 - | | | | | | | | | 28.2.2006 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' | 2 872 | 6 | 0 | 2 119 | 4 897 | 1 146 | 11 039 | | equity | | | | | | | | | 1.9.2005 | | | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | -78 | | | | -78 | | hedging: | | | | | | | | | amount | | | | | | | | | transferred to | | | | | | | | | the hedged | | | | | | | | | purchasing | | | | | | | | | price | | | | | | | | -------------------------------------------------------------------------------- | Change in | | | | | 1 | | 1 | | translation | | | | | | | | | difference | | | | | | | | -------------------------------------------------------------------------------- | Reclassificati | | | | -3 | 3 | | 0 | | ons between | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | Net | | | -78 | -3 | 4 | | -78 | | profits/losses | | | | | | | | | recognized | | | | | | | | | directly to | | | | | | | | | shareholders' | | | | | | | | | equity | | | | | | | | -------------------------------------------------------------------------------- | Profit/loss | | | | | -284 | 8 | -276 | | for the period | | | | | | | | -------------------------------------------------------------------------------- | Total profits | | | -78 | -3 | -281 | 8 | -354 | | and losses | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | -345 | -74 | -418 | | distribution | | | | | | | | -------------------------------------------------------------------------------- | Shareholders' | 2 872 | 6 | -78 | 2 115 | 4 271 | 1 080 | 10 267 | | equity | | | | | | | | | 28.2.2006 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF | Share | Shar | Hedg | Other | Re- | Mino- | Total | | CHANGES IN | capi- | e | - | res- | tained | rity | | | SHAREHOLDERS' | tal | prem | ing | erves | earn- | inte- | | | EQUITY, IFRS | | - | res- | | ings | rest | | | 1000 EUR | | ium | erve | | | | | | | | acc- | | | | | | | | | ount | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Annual Report | | | | | | | | | 1.9.2005 - | | | | | | | | | 31.8.2006 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' | 2 872 | 6 | 0 | 2 119 | 4 897 | 1 146 | 11 039 | | equity | | | | | | | | | 1.9.2005 | | | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | 6 | | | | 6 | | hedging: | | | | | | | | | amount | | | | | | | | | transferred to | | | | | | | | | the hedged | | | | | | | | | purchasing | | | | | | | | | price | | | | | | | | -------------------------------------------------------------------------------- | Change in | | | | | 1 | | 1 | | translation | | | | | | | | | difference | | | | | | | | -------------------------------------------------------------------------------- | Reclassificati | | | | -6 | 6 | | 0 | | ons between | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | Net | | | 6 | -6 | 7 | | 7 | | profits/losses | | | | | | | | | recognized | | | | | | | | | directly to | | | | | | | | | shareholders' | | | | | | | | | equity | | | | | | | | -------------------------------------------------------------------------------- | Profit/loss | | | | | 920 | 143 | 1 062 | | for the period | | | | | | | | -------------------------------------------------------------------------------- | Total profits | | | 6 | -6 | 927 | 143 | 1 069 | | and losses | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | -345 | -74 | -418 | | distribution | | | | | | | | -------------------------------------------------------------------------------- | Shareholders' | 2 872 | 6 | 6 | 2 112 | 5 479 | 1 215 | 11 689 | | equity | | | | | | | | | 31.8.2006 | | | | | | | | -------------------------------------------------------------------------------- SEGMENT INFORMATION, IFRS The business of Vaahto Group is reported as two business segments: Pulp & Paper Machinery and Process Machinery. -------------------------------------------------------------------------------- | NET SALES BY BUSINESS | Interim | Interim | Annual | | SEGMENTS, IFRS | Report | Report | Report | | 1000 EUR | 1.9.2006- | 1.9.2005- | 1.9.2005- | | | 28.2.2007 | 28.2.2006 | 31.8.2006 | | | 6 months | 6 months | 12 months | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Pulp & Paper Machinery | 23 295 | 16 731 | 38 436 | -------------------------------------------------------------------------------- | Process Machinery | 14 323 | 12 240 | 26 989 | -------------------------------------------------------------------------------- | Other | 0 | 0 | 1 | -------------------------------------------------------------------------------- | Net sales between segments | -7 | -7 | -12 | -------------------------------------------------------------------------------- | Group total | 37 612 | 28 963 | 65 414 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT OR LOSS BY | Interim | Interim | Annual | | BUSINESS SEGMENTS, IFRS | Report | Report | Report | | 1000 EUR | 1.9.2006- | 1.9.2005- | 1.9.2005- | | | 28.2.2007 | 28.2.2006 | 31.8.2006 | | | 6 months | 6 months | 12 months | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Pulp & Paper Machinery | 816 | 332 | 1 927 | -------------------------------------------------------------------------------- | Process Machinery | 220 | -271 | 576 | -------------------------------------------------------------------------------- | Other | -22 | 16 | -21 | -------------------------------------------------------------------------------- | Operating profit or loss | -7 | -8 | -22 | | between segments | | | | -------------------------------------------------------------------------------- | Group total | 1 007 | 69 | 2 461 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | AVERAGE NUMBER OF PERSONNEL | Interim | Interim | Annual | | BY BUSINESS SEGMENTS | Report | Report | Report | | | 1.9.2006- | 1.9.2005- | 1.9.2005- | | | 28.2.2007 | 28.2.2006 | 31.8.2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Pulp & Paper Machinery | 238 | 220 | 226 | -------------------------------------------------------------------------------- | Process Machinery | 170 | 191 | 184 | -------------------------------------------------------------------------------- | Group total | 408 | 411 | 410 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES BY MARKET AREAS,, | Interim | Interim | Annual | | IFRS | Report | Report | Report | | 1000 EUR | 1.9.2006- | 1.9.2005- | 1.9.2005- | | | 28.2.2007 | 28.2.2006 | 31.8.2006 | | | 6 months | 6 months | 12 months | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finland | 10 656 | 9 911 | 20 796 | -------------------------------------------------------------------------------- | Other Europe | 16 772 | 10 928 | 28 646 | -------------------------------------------------------------------------------- | North America | 135 | 2 406 | 3 069 | -------------------------------------------------------------------------------- | Asia | 8 779 | 5 691 | 10 482 | -------------------------------------------------------------------------------- | Other | 1 270 | 27 | 2 421 | -------------------------------------------------------------------------------- | Group total | 37 612 | 28 963 | 65 414 | -------------------------------------------------------------------------------- Figures are in thousand euros unless stated otherwise. NOTES REQUIRED BY IAS 34 Accounting principles The interim report was drawn up according to the same accounting principles and calculation methods as the previous financial statement, for the fiscal period that ended on August 31, 2006. Dividends paid In the period under review, Vaahto Group Plc Oyj paid a dividend of 0.20 euros per share (for both A and K shares) - i.e., a total of 574,460.40 euros. Lahti, April 19, 2007 VAAHTO GROUP PLC OYJ Antti Vaahto CEO Information: Antti Vaahto CEO, Vaahto Group Plc Oyj tel. +358 40 8232835
VAAHTO GROUP INTERIM REPORT FOR SEPTEMBER 1, 2006 - FEBRUARY 28, 2007
| Source: Plc Uutechnic Group Oyj