PONSSE PLC STOCK EXCHANGE RELEASE 24 APRIL 2007, 1:00 P.M.
PONSSE'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2007
- Turnover: EUR 78.4 million (EUR 52.3 million in Q1/2006)
- Operating profit: EUR 9.4 million (EUR 6.7 million)
- Operating profit accounted for 12.0 per cent of turnover (12.8 per cent)
- Earnings per share: EUR 0.23 (EUR 0.16)
Arto Tiitinen, President and CEO:
The demand for forest machines developed positively in almost all our main
market areas in the beginning of the year: our turnover grew by 50 per cent
compared to the previous year. The demand for timber developed and forest
machine utilisation rates were high. The demand for the environmentally friendly
and timber-saving cut-to-length method forest machines is growing. The trade in
used machines was also active.
The global area organisation taken into use at the end of 2006 has proven to be
functional: our sales power is stronger than previously and closeness to the
customer is more prominent in our operations. At the end of March, our order
books were at a higher level than in the previous year.
Due to capital expenditures we are able to respond to our customers' needs
quicker than previously. The Europe-wide road show tour of our new product
models was launched during the period under review and we have met with
thousands of customers on the tour.
TURNOVER
Ponsse's turnover increased during the period under review compared to the first
quarter of the previous year. Turnover stood at EUR 78.4 million (EUR 52.3
million), showing growth of 49.9 per cent year on year.
PROFIT PERFORMANCE
Ponsse recorded an operating profit of EUR 9.4 million (EUR 6.7 million) for the
period under review, representing 12.0 per cent of turnover (12.8 per cent).
Return on capital employed (ROCE) stood at 40.6 per cent (33.9 per cent).
Staff costs for the period under review totalled EUR 10.1 million (EUR 9.2
million), and other operating expenses were EUR 6.9 million (EUR 5.1 million).
Net financial expenses were EUR -0.4 million (EUR -0.4 million). Income and
expenses resulting from currency risk hedging were included in the financial
items. Profit for the period totalled EUR 6.5 million (EUR 4.6 million).
Earnings per share (EPS) were EUR 0.23 (EUR 0.16).
BALANCE SHEET AND FINANCIAL POSITION
At the end of the period under review, the consolidated balance sheet total
amounted to EUR 138.8 million (EUR 114.1 million). The balance sheet total was
particularly increased by the higher amount of stocks, ordinary trade
receivables and liquid assets compared to the previous year. Trade receivables
totalled EUR 26.3 million (EUR 17.4 million), and liquid assets stood at EUR
14.9 million (EUR 7.2 million). The consolidated capital and reserves also stood
at a higher level year on year at the end of the period under review.
Interest-bearing liabilities totalled EUR 31.1 million (EUR 34.5 million). Net
liabilities amounted to EUR 15.6 million (EUR 26.8 million). Equity ratio stood
at 48.9 per cent (39.4 per cent) at the end of the period under review.
The improvement of operational result and the working capital reduction during
the period under review improved the cash flow from consolidated business
operations, which totalled EUR 8.1 million (EUR -1.7 million). Cash outflow from
investing activities stood at EUR -1.9 million (EUR -2.2 million).
ORDER INTAKE AND ORDER BOOKS
The order intake for the period totalled EUR 77.6 million (EUR 52.9 million),
while period-end order books were valued at EUR 58.1 million (EUR 55.4 million).
The order books included dealers' minimum purchase commitments, based on
previous practice.
SUBSIDIARIES
Ponsse Plc and Lako Oy, its fully-owned subsidiary, approved a merger plan
during the period under review, according to which Lako Oy will merge with its
parent company on 31 August 2007. The arrangement will simplify the Group
structure and improve competitiveness.
CAPITAL EXPENDITURE AND R&D
Capital expenditure totalled EUR 1.9 million (EUR 2.2 million).
R&D expenses totalled EUR 1.2 million (EUR 0.8 million).
PERSONNEL
The Group had an average staff of 826 (781) during the period and employed 829
(779) people at the end of the period. The number of personnel was particularly
increased by the increase in the demand for maintenance services and the
expansion of the business operations of the new foreign subsidiaries and Epec
Oy.
ANNUAL GENERAL MEETING AND ADMINISTRATION
The Annual General Meeting was held on 12 April 2007. A decision was made to pay
a dividend of EUR 0.40 per share, totalling EUR 11.2 million. The dividends will
be paid on 24 April 2007.
Maarit Aarni-Sirviö, Nils Hagman, Ilkka Kylävainio, Seppo Remes, Einari Vidgrén
and Juha Vidgrén were elected Board members. The term of office of those elected
will last until the end of the next Annual General Meeting.
Ernst & Young Oy were re-appointed as the company auditors with Eero Huusko,
Authorised Public Accountant, as the principal auditor.
The Board of Directors held its constituent meeting on 23 April 2007, electing
Einari Vidgrén Chairman of the Board and Juha Vidgrén Vice Chairman.
SHARE PERFORMANCE
The trading volume of Ponsse Oyj shares between 1 January - 31 March 2007 was
823,985, accounting for 2.9 per cent of the total number of shares. Share
turnover came to EUR 10.9 million, with the period's lowest and highest share
price amounting to EUR 11.27 and EUR 14.10, respectively.
At the end of the period under preview, the share closed at EUR 13.00 and the
market capitalisation totalled EUR 364.0 million.
The company's Board of Directors is authorised to decide on the acquisition and
assignment of at most 250,000 treasury shares. The authorisations are valid
until 30 June 2008.
Neither the company nor its subsidiaries own treasury shares.
BUSINESS UNCERTAINTIES
General economic fluctuations affect the company's product demand and its
economic position. The effect of cyclical fluctuations is partly balanced by the
location of the company's business operations in a number of different areas.
The availability of raw materials and components and risks related to the
operation of the subcontractor and supplier network are significant from the
company's point of view. To enhance the management of these risks, the company
continues the supplier network development programme initiated in 2005. One of
the programme's aims is that strategically important suppliers will be located
in the immediate vicinity of the company's Vieremä factory. In addition, the aim
is to manage risks related to components by manufacturing a number of key
components by ourselves. Raw material and component suppliers' possible delivery
problems may increase the prices of raw materials used in the company's products
and lengthen their delivery times. The company has improved the management of
these risks by making the terms and conditions of supplier contracts more
specific. Changes to the customs legislation of export countries may increase
costs related to the export of the company's products.
OUTLOOK FOR THE FUTURE
The company estimates that the demand for forest industry products will develop
positively in most main markets during the current year. The global
mechanisation rate of wood harvesting is also estimated to increase with the
increase in the utilisation rate of the cut-to-length method. The harvesting
volumes of forest energy and small wood will increase globally. This is
estimated to increase the demand for the company's current products.
The expanded product range creates the preconditions for delivering more
comprehensive solutions for the needs of forest companies and wood harvesting
companies than at present. The company continues to develop its maintenance
service and distribution network. This creates the preconditions for profitable
growth of business operations. The rapid growth of the machine base increased
the company's maintenance service operations.
The company estimates that the good demand and order books create a sound basis
for positive development.
PONSSE GROUP
CONSOLIDATED PROFIT AND LOSS ACCOUNT (EUR 1,000)
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| | | IFRS | IFRS | IFRS | |
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| | | 1-3/07 | 1-3/06 | 1-12/06 | |
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| TURNOVER | | 78,415 | 52,294 | 238,642 | |
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| Increase (+)/decrease (-) in | 1,671 | 4,690 | 5,774 | |
| stocks of finished goods and | | | | |
| work in progress | | | | |
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| Other operating income | | 277 | 542 | 2,132 | |
--------------------------------------------------------------------------------
| Raw materials and | | -52,877 | -35,489 | -150,621 | |
| services | | | | | |
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| Expenditure on employment | -10,123 | -9,177 | -37,612 | |
| related benefits | | | | |
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| Depreciation | | -1,035 | -1,051 | -4,256 | |
--------------------------------------------------------------------------------
| Other operating | | -6,885 | -5,123 | -24,469 | |
| expenses | | | | | |
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| OPERATING PROFIT | | 9,442 | 6,686 | 29,590 | |
--------------------------------------------------------------------------------
| Share of results of associated | 291 | 101 | 441 | |
| companies | | | | |
--------------------------------------------------------------------------------
| Financial income and | | -438 | -431 | -1,525 | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES | 9,295 | 6,356 | 28,505 | |
--------------------------------------------------------------------------------
| Income taxes | | -2,777 | -1,750 | -7,463 | |
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| Minority interest | | 0 | 0 | 0 | |
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| PROFIT FOR THE PERIOD | | 6,518 | 4,606 | 21,042 | |
--------------------------------------------------------------------------------
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| Earnings per share | | 0.23 | 0.16 | 0.75 | |
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CONSOLIDATED BALANCE SHEET (EUR 1,000)
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| | IFRS | IFRS | IFRS |
--------------------------------------------------------------------------------
| ASSETS | 31 Mar | 31 Mar | 31 Dec |
| | 2007 | 2006 | 2006 |
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| NON-CURRENT ASSETS | | | |
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| Intangible assets | 3,763 | 2,906 | 3,605 |
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| Goodwill | 3,777 | 3,831 | 3,791 |
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| Property, plant and equipment | 25,018 | 25,080 | 24,308 |
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| Financial assets | 39 | 36 | 39 |
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| Holdings in associated companies | 1,445 | 1,114 | 1,328 |
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| Non-current receivables | 163 | 135 | 165 |
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| Deferred tax assets | 821 | 828 | 972 |
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| TOTAL NON-CURRENT ASSETS | 35,025 | 33,930 | 34,206 |
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| CURRENT ASSETS | | | |
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| Stocks | 57,108 | 52,624 | 58,615 |
--------------------------------------------------------------------------------
| Trade receivables | 26,288 | 17,409 | 20,715 |
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| Income tax receivable | 495 | 0 | 349 |
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| Other current receivables | 4,958 | 2,946 | 2,568 |
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| Liquid assets | 14,890 | 7,197 | 8,564 |
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| TOTAL CURRENT ASSETS | 103,740 | 80,176 | 90,811 |
--------------------------------------------------------------------------------
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| TOTAL ASSETS | 138,766 | 114,106 | 125,017 |
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| CAPITAL AND RESERVES, AND LIABILITIES | | | |
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| CAPITAL AND RESERVES | | | |
--------------------------------------------------------------------------------
| Share capital | 7,000 | 7,000 | 7,000 |
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| Other reserves | 20 | 19 | 20 |
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| Translation differences | -781 | -504 | -750 |
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| Retained earnings | 61,376 | 38,256 | 54,888 |
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| CAPITAL AND RESERVES OWNED | | | |
--------------------------------------------------------------------------------
| BY PARENT COMPANY SHAREHOLDERS | 67,615 | 44,771 | 61,157 |
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| Minority interest | 0 | 0 | 0 |
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| TOTAL CAPITAL AND RESERVES | 67,615 | 44,771 | 61,157 |
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| NON-CURRENT LIABILITIES | | | |
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| Interest-bearing liabilities | 22,229 | 18,821 | 22,408 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 848 | 886 | 869 |
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| Other non-current liabilities | 60 | 256 | 74 |
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| TOTAL NON-CURRENT LIABILITIES | 23,136 | 19,962 | 23,351 |
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| CURRENT LIABILITIES | | | |
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| Interest-bearing liabilities | 8,825 | 15,707 | 8,487 |
--------------------------------------------------------------------------------
| Provisions | 3,851 | 5,344 | 3,517 |
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| Tax liabilities for the period | 765 | 1,157 | 230 |
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| Trade creditors and other current | 34,574 | 27,166 | 28,275 |
| liabilities | | | |
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| TOTAL CURRENT LIABILITIES | 48,014 | 49,373 | 40,509 |
--------------------------------------------------------------------------------
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| TOTAL CAPITAL AND RESERVES, AND | 138,766 | 114,106 | 125,017 |
| LIABILITIES | | | |
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CONSOLIDATED CASH FLOW STATEMENT (EUR 1,000)
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| | | IFRS | IFRS | IFRS |
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| | | 1-3/07 | 1-3/06 | 1-12/06 |
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| BUSINESS OPERATIONS: | | | | |
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| Profit for the period | | 6,518 | 4,606 | 21,042 |
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| Adjustments: | | | | |
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| Financial income and | | 438 | 433 | 1,525 |
| expenses | | | | |
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| Share of the result of associated | -291 | -101 | -441 |
| companies | | | |
--------------------------------------------------------------------------------
| Depreciation | | 1,035 | 1,051 | 4,256 |
--------------------------------------------------------------------------------
| Income taxes | | 2,630 | 1,750 | 7,866 |
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| Other adjustments | | 387 | -318 | -424 |
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| Cash flow before change in working | 10,717 | 7,715 | 33,824 |
| capital | | | |
--------------------------------------------------------------------------------
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| Change in working capital: | | | | |
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| Change in current | | |
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| non-interest-bearing | | -7,967 | -1,975 | -4,551 |
| receivables | | | | |
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| Change in stocks | | 1,507 | -7,463 | -13,454 |
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| Change in current | | |
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| non-interest-bearing | | 6,219 | 3,208 | 4,542 |
| liabilities | | | | |
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| Change in provisions for | | 334 | -980 | -2,807 |
| liabilities and charges | | | | |
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| Interest received | | 18 | 37 | 269 |
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| Interest paid | | -410 | -293 | -1,273 |
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| Other financial items | | -108 | -265 | -527 |
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| Income taxes paid | | -2,241 | -1,733 | -9,201 |
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| NET CASH FLOW FROM BUSINESS | | 8,069 | -1,749 | 6,822 |
| OPERATIONS (A) | | | | |
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| INVESTMENTS | | | | |
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| Investments in tangible and intangible | -1,894 | -2,186 | -5,318 |
| assets | | | |
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| Investments in other assets | 0 | 0 | -2 |
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| Dividends received | | 0 | 0 | 126 |
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| CASH OUTFLOW FROM INVESTING | | -1,894 | -2,186 | -5,194 |
| ACTIVITIES (B) | | | | |
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| FINANCING | | | | |
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| Withdrawal/Repayment of | | | | |
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| current loans | | 409 | 10,338 | 2,729 |
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| Change in current | | | | |
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| interest-bearing liabilities | | 4 | -4 | -356 |
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| Withdrawal/Repayment of | | | | |
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| non-current loans | | -193 | -235 | 3,170 |
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| Payment of finance lease liabilities | -71 | -76 | 313 |
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| Change in non-current receivables | 2 | -32 | -61 |
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| Dividends paid | | 0 | -11,200 | -11,200 |
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| NET CASH OUTFLOW FROM | | 151 | -1,209 | -5,405 |
| FINANCING (C) | | | | |
--------------------------------------------------------------------------------
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| Change in liquid assets | | 6,326 | -5,144 | -3,777 |
| (A+B+C) | | | | |
--------------------------------------------------------------------------------
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| Liquid assets on 1 January | | 8,562 | 12,339 | 12,339 |
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| Liquid assets 31 March/31 | | 14,888 | 7,195 | 8,562 |
| Dec | | | | |
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RECONCILIATION OF CAPITAL AND RESERVES (EUR 1,000)
A = Share Capital
B = Share premium and other reserves
C = Translation differences
D = Retained earnings
E = Minority interest
F = Total capital and reserves
CAPITAL AND RESERVES OWNED BY PARENT COMPANY SHAREHOLDERS
A B C D E F
CAPITAL AND RESERVES
1 JANUARY 2006 7,000 20 -442 44,811 0 51,389
Translation differences 0 0 -63 39 0 -24
NET INCOME RECOGNISED 0 0 -63 39 0 -24
DIRECTLY IN CAPITAL AND RESERVES
Net profit for the period 0 0 0 4,606 0 4,606
TOTAL RECOGNISED INCOME 0 0 -63 4,645 0 4,582
AND EXPENSES
Dividend distribution 0 0 0 -11,200 0 -11,200
Change in minority interest 0 0 0 0 0 0
CAPITAL AND RESERVES
31 MARCH 2006 7,000 20 -505 38,256 0 44,771
CAPITAL AND RESERVES
1 JANUARY 2007 7,000 20 -750 54,887 0 61,157
Translation differences 0 0 -31 -29 0 -60
NET INCOME RECOGNISED
DIRECTLY IN CAPITAL
AND RESERVES 0 0 -31 -29 0 -60
Net profit for the period 0 0 0 6 518 0 6 518
TOTAL RECOGNISED INCOME
AND EXPENSES 0 0 -31 6 489 0 6 458
Dividend distribution 0 0 0 0 0 0
Change in minority interest 0 0 0 0 0 0
CAPITAL AND RESERVES
31 MARCH 2007 7 000 20 -781 61 376 0 67 615
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| | | | 31 Mar | 31 Mar | 31 Dec |
| | | | 2007 | 2006 | 2006 |
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| 1. LEASING COMMITMENTS (EUR | | 2,253 | 3,028 | 2,442 |
| 1,000) | | | | |
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2. CONTINGENT LIABILITIES (EUR 1,000)
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| Guarantees given on behalf of | | 440 | 512 | 537 |
| others | | | | |
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| Repurchase commitments | | | 3,756 | 7,724 | 3,275 |
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| Total | | | 4,196 | 8,236 | 3,812 |
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| 3. PROVISIONS (EUR | | | Guarantee provision | |
| 1,000) | | | | |
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| 31 December 2006 | | | 3,517 | | |
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| Increase | | | 467 | | |
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| Used provisions | | | -133 | | |
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| 31 March 2007 | | | 3,851 | | |
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| KEY FIGURES AND RATIOS | | | 31 Mar | 31 Mar | 31 Dec |
| | | | 2007 | 2006 | 2006 |
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| R&D expenditure, MEUR | | 1.2 | 0.8 | 4.0 |
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| Capital expenditure, MEUR | 1.9 | 2.2 | 5.3 |
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| as % of turnover | | | 2.4 | 4.2 | 2.2 |
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| Average number of | | | 826 | 781 | 795 |
| employees | | | | | |
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| Order books, MEUR | | | 58.1 | 55.4 | 59.2 |
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| Equity ratio, % | | | 48.9 | 39.4 | 49.1 |
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| Earnings per share, | | | 0.23 | 0.16 | 0.75 |
| EUR | | | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | | | 2.41 | 1.60 | 2.18 |
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Income taxes based on profit for the period are included in the Profit and Loss
Account and earnings per share.
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| ORDER INTAKE, MEUR | | | 1-3/07 | 1-3/06 | 1-12/06 |
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| Ponsse Group | | | 77.6 | 52.9 | 242.9 |
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The interim report was prepared observing the recognition and valuation
principles of IFRS standards, but all the requirements of IAS 34 were not
complied with.
The accounting policies for the interim report are compatible with those for the
financial statements prepared on 31 December 2006, except for the following new
changes in the interpretation of IFRS standards adopted on 1 January 2007, which
have no effect on the consolidated financial statements:
- IFRS 7
- IAS 1
- IFRIC 9
- IFRIC 10.
The comparison figures are Ponsse's figures presented in the adjusted financial
statements for the corresponding period in 2006. Reporting complies with the
International Financial Reporting Standards (IFRS).
The above figures have not been audited.
The above figures have been rounded and may therefore differ from those given in
the official financial statements.
Vieremä, 24 April 2007
Arto Tiitinen
President and CEO
FOR FURTHER INFORMATION, PLEASE CONTACT:
Arto Tiitinen, President and CEO, tel. +358 (0)20 768 8621 or +358 (0)400 566
875
Mikko Paananen, CFO, tel. +358 (0)20 768 8648 or +358 (0)400 817 036
DISTRIBUTION
Helsinki Stock Exchange
Principal media
www.ponsse.com
