High energy prices boost AC drive sales
April-June summary:
* Order intake totalled MEUR 60.0, growth of 21.2 % from the
corresponding period in the previous year (MEUR 49.5).
* Revenues totalled MEUR 59.8, growth of 32.9 % (MEUR 45.0).
* Operating profit was MEUR 7.7, an increase of 35.1 % (MEUR 5.7).
* Cash flow from operations was MEUR 3.7(MEUR 4.2).
* Earnings per share was EUR 0.35 (EUR 0.26), growth from the
previous year of 34.6 %.
January-June summary:
* Order intake totalled MEUR 116.1, growth of 24.0 % from the
corresponding period in the previous year (MEUR 93.6).
* Revenues totalled MEUR 112.1, growth of 27.5 % (MEUR 87.9).
* Operating profit was MEUR 14.0, an increase of 23.9 % (MEUR
11.3).
* Cash flow from operations was MEUR 6.2 (MEUR 6.7).
* Earnings per share was EUR 0.63 (EUR 0.51), growth from the
previous year of 23.5 %.
The AC drive market continued to grow in the second quarter of 2007.
Demand for AC drives was strong in Europe and Asia. Demand in North
America, which had been weaker at the end of last year and the start
of this year, started to pick up during the second quarter. Market
prospects for the second half of the year are encouraging in all
market areas. High energy prices are boosting investments in
energy-saving equipment, and AC drives are one of the most important
of these.
Vacon's order intake, revenues and operating profit all increased
strongly in the second quarter compared to the corresponding period
in the previous year. Sales grew fastest in Europe and Asia. Sales in
North America fell short of its targets but performed better than in
the first quarter. Direct sales and OEM were the distribution
channels showing strongest growth.
Earnings per share rose to EUR 0.35, an increase of EUR 0.09 on the
previous year. The company improved its profitability through the
strong growth in revenues, even though the US dollar, important for
the company's markets, weakened against the euro.
In June Vacon launched the new Vacon 10 drive family. It is the first
product family of Vacon third product generation. Vacon 10 is one of
the smallest micro drives in size on the market. It can be flexibly
adapted to customer needs. The Vacon 10 gives excellent opportunities
to win new customers in the highly competitive and rapidly growing
micro drive market. The Vacon 10 supports the core issues in our
product leadership strategy: a wide product range, outstanding drives
knowhow, customer relations management, the latest technology and
mass customization.
Result in January-June and equity structure
4-6/ 4-6/ 1-6/ 1-6/ Change 1-12/
MEUR 2007 2006 2007 2006 % 2006
Revenues 59.8 45.0 112.1 87.9 27.5 186.4
EBITDA 8.9 6.6 16.3 13.3 22.6 27.3
Deprecia-
tion -1.2 -0.9 -2.3 -2.0 15.0 -4.2
Operating
profit 7.7 5.7 14.0 11.3 23.9 23.1
Profit
before
tax 7.5 5.5 13.7 11.1 23.4 22.7
Profit
For
period 5.4 4.0 9.8 7.8 25.6 16.1
Revenues in the first half of 2007 totalled EUR 112.1 million and
operating profit was EUR 14.0 million. Profitability improved during
the second quarter. The operating profit as a percentage of revenues
was 12.9 per cent, compared with 12.0 per cent in the first quarter
and 12.7 per cent in the second quarter in the previous year.
The balance sheet total was EUR 98.4 (81.3) million. The equity ratio
was 54.2 per cent. The Group's cash flow from operations for the
January-June period was EUR 6.2 (6.7) million. Total receivables
increased EUR 8.5 million from the beginning of the year.
The Group's equity structure and liquidity remained strong.
Interest-bearing net debt at the end of the period totalled EUR -2.0
(-3.7) million and gearing was -3.9 per cent (-8.4 per cent).
The Group's order book stood at EUR 33.7 (24.6) million.
The order book has risen by EUR 4.0 million since the start of the
year.
Market position
Vacon Group revenues by market area were as follows:
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
MEUR 2007 % 2006 % 2007 % 2006 % 2006 %
Eur-
ope 43.5 72.7 31.3 69.6 81.7 72.9 61.9 70.4 129.7 69.6
North
Ame-
rica 9.9 16.6 9.3 20.7 17.7 15.8 17.1 19.5 37.9 20.3
Asia
And
Aust-
ralia 5.2 8.7 3.8 8.4 9.6 8.5 7.5 8.5 15.8 8.5
Other
cou-
ntries 1.2 2.0 0.6 1.3 3.1 2.8 1.4 1.6 3.0 1.6
To
tal 59.8 100.0 45.0 100.0 112.1 100.0 87.9 100.0 186.4 100.0
Vacon's revenues in the January-June period grew in Europe by 32 per
cent. In Asia and Australia revenues grew 28 per cent, but in North
America the growth in revenues was 3.5 per cent. USD based growth was
about 7 per cent.
Vacon Group's revenues by distribution channel were as follows:
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
MEUR 2007 % 2006 % 2007 % 2006 % 2006 %
Direct
sales 24.6 41.1 17.9 39.8 47.2 42.1 36.4 41.4 76.4 41.0
Distri-
butors 7.7 12.9 6.4 14.2 15.1 13.5 12.0 13.7 24.8 13.3
OEM 16.1 26.9 10.9 24.2 29.1 25.9 21.2 24.1 43.9 23.6
Brand
Label 11.4 19.1 9.8 21.8 20.7 18.5 18.3 20.8 41.4 22.2
Total 59.8 100.0 45.0 100.0 112.1 100.0 87.9 100.0 186.4 100.0
The Group's revenues by distribution channel increased in the first
half of the year as follows: direct sales 30 per cent, distributors
26 per cent, OEM 37 per cent and brand label customers 13 per cent.
Vacon Group structure
No significant changes took place in the Group structure during the
second quarter.
Research and development
R&D expenditure during the first half of the year totalled EUR 6.6
(6.1) million, and EUR 0.7 (0.1) million of this was capitalized as
development costs. R&D costs accounted for 5.9 per cent (7.0 per
cent) of the Group's revenues. Work on developing new products
continues in line with the Company's plans.
Investments
Gross investments by the Group during the first six months of the
year totalled EUR 3.0 (4.9) million. Expenditure focused on
information systems and on increasing and maintaining production
capacity.
Planning has started for enlarging Vacon's factory premises in Vaasa.
The purpose of the expansion is to safeguard growth in production of
high-power drives and to build production space for the new
generation AC drives.
Organization and personnel
The number of Vacon personnel has increased by 87 persons since the
beginning of the year. At the end of June the Group employed 762
(611) people, of whom 494 (406) were in Finland and 268 (205) in
other countries. The table below shows the average number of Vacon
personnel during the review period:
1-6/2007 1-6/2006 1-12/2006
Office
personnel 493 433 424
Factory
personnel 232 164 194
TOTAL 725 597 618
Shares and shareholders
Vacon had a market capitalization at the end of June of EUR 483.6
million. The closing share price on 30 June 2007 was EUR 31.75. The
lowest share price during the January-June period was EUR 24.6 and
the highest was EUR 32.0. A total of 4,374,260 Vacon shares were
traded in the January-June period, in monetary terms EUR 122.9
million.
Vacon's main shareholders on 30 June 2007:
Number of shares Holding, %
Ahlström
Capital
Oy 2,297,996 15.0
Tapiola
Mutual
Pension
Insurance
Company 584,500 3.8
Vaasa
Engineering
Oy 436,433 2.9
Kosk-
inen
Jari 358,590 2.3
Holma
Mauri 347,171 2.3
Ehrn-
rooth
Martti 325,423 2.1
Tapiola
Group
companies 325,300 2.1
Niemelä
Harri 309,840 2.0
Karpp-
inen
Veijo 209,349 1.4
Mutual
Insur-
ance
Com-
pany
Pension
Fennia 185,000 1.2
Nominee
registered 4,665,745 30.5
Others 5,249,653 34.3
Total 15,295,000 100.0
Vacon
Plc's
own
shares -62,812
Shares
in circ-
ulation 15,232,188
On 30 June 2007 the members of Vacon's Board of Directors, the
President and CEO, and the Deputy to the CEO held directly a total of
568,296 shares or 3.7 per cent of Vacon's share stock.
Own shares
On 30 June 2007 Vacon Plc held a total of 62,812 of its own shares.
In accordance with the terms of Vacon's share bonus scheme, a total
of 18,760 shares were issued as a bonus to the key personnel in the
scheme on 12 April 2007. The shares issued were own shares held by
the Company. In consequence, as from 13 April 2007 the number of own
shares held by the Company has been 62,812 (purchased at an average
price of EUR 12.46). These own shares account for 0.4 % of the share
capital and voting rights, so they have no significant impact on the
distribution of ownership and voting rights.
Dividend payment
The Annual General Meeting of Shareholders decided on 28 March 2007
to pay a dividend of EUR 0.65 per share, a total of EUR 9.9 million.
The dividend was paid in accordance with the AGM's decision on 11
April 2007.
Prospects
AC drives are one of the most significant means of enhancing the
efficient use of energy. Improving energy efficiency is an important
factor in restricting greenhouse gas emissions, and AC drives play a
key role in this. The long-term demand factors for AC drives are
positive.
Vacon's market prospects for the final half of the year are good.
Based on market surveys Vacon estimates that the AC drive market is
currently growing at an annual rate of 7-9 %. Vacon is growing at a
much faster rate than the market. Vacon considers that potential
risks to its financial performance in 2007 are problems that material
suppliers may have with capacity, difficulties with the availability
of key components, and the weakening of the dollar.
Vacon forecasts that revenues in 2007 will grow by about 20 per cent
and profitability will improve from 2006.
Following interim reports
Vacon will publish its 2007 January-September interim report on
Thursday, 25 October 2007 at 10.00 am.
Formal statement
This release contains certain forward-looking statements that reflect
the current views of the company's management. Due to the nature of
these statements, they contain risks and uncertainties and are
subject to changes in the general economic situation and in the
company's business sector.
The interim report is unaudited.
Vacon was established in 1993 from a passion to create, develop and
produce unique AC drives for demanding needs, globally. We are driven
by a burning desire to serve our customers as they look for ever more
efficient, reliable and easy to use options to save energy and costs.
Vacon provides AC drives in the power range 0.25 kW - 5 MW.
Vaasa, 2 August 2007
VACON PLC
Board of Directors
For more information please contact:
Mr Vesa Laisi, President, phone: +358 (0)40 8371 510,
email: vesa.laisi@vacon.com
Mr Mika Leppänen, Vice President, Finance & Control, phone: +358
(0)40 8371 235, email: mika.leppanen@vacon.com
Conference for the media and analysts
Vacon will hold a briefing for analysts and the media on 2 August
2007 at 11.30 am in the Neptun meeting room at the Scandic Marski
Hotel, Mannerheimintie 10, Helsinki.
Dial-in conference for investors and investment analysts
A dial-in conference in English for investors and investment analysts
will be held on 2 August 2007 at 3.00 pm. President Vesa Laisi and
Mika Leppänen, Vice President, Finance and Control, will participate
in the conference. Lines can be booked ten minutes before the
conference by calling the service number +44 207 162 0025. The
conference ID code is "Vacon Oyj". Conference link:
http://wcc.webeventservices.
com/view/wl/r.htm?e=36279&s=1&k=
0911B13C1544BBFA738DF86B924445F7&cb=genesys
To hear a recording of the conference, available for two working
days, call +44 207 031 4064, ID code 735873.
Distribution:
Helsinki Exchanges
Financial Supervision Authority
Main media
Accounting principles
This interim report has been prepared in accordance with IFRS
(International Financial Reporting Standards) standard IAS 34 on
Interim Financial Reporting. The interim report does not contain all
the information required for annual financial statements.
Vacon has prepared this interim report applying the same IFRS
accounting principles as in its 2006 consolidated financial
statements.
The interim report is unaudited.
Consolidated income statement, MEUR
4-6/ 2007 4-6/ 2006 1-6/ 2007 1-6/ 2006 1-12/ 2006
Rev-
enues 59.8 45.0 112.1 87.9 186.4
EBITDA 8.9 6.6 16.3 13.3 27.3
Depr-
eciation -1.2 -0.9 -2.3 -2.0 -4.2
Operating
profit 7.7 5.7 14.0 11.3 23.1
Financial
income 0.1 0.1 0.2 0.1 0.3
Financial
expenses -0.3 -0.2 -0.4 -0.2 -0.7
Share
of result
of asso-
ciated
companies 0.0 -0.1 0.0 -0.1 0.0
Profit
Before
taxes 7.5 5.5 13.7 11.1 22.7
Income
taxes -2.1 -1.5 -3.9 -3.3 -6.6
Profit
for the
period 5.4 4.0 9.8 7.8 16.1
Attri-
butable
to:
Equity
holders
of
the
parent 5.3 3.9 9.6 7.7 15.8
Minority
interest 0.1 0.1 0.2 0.1 0.3
Earnings
per
share,
euro 0.35 0.26 0.63 0.51 1.04
Earnings
per
share
diluted,
euro 0.35 0.26 0.63 0.51 1.04
Consolidated balance sheet, MEUR
30.6.2007 30.6.2006 31.12.2006
ASSETS
Intangible
assets 8.4 5.1 7.8
Tangible
assets 12.9 14.7 13.3
Inves-
tments 1.8 1.2 1.4
Loans
Receivable
And
Other
Receiv-
ables 0.5 0.8 0.8
Deferred
Tax
assets 1.5 1.1 1.1
Total
non-
current
assets 25.1 22.9 24.3
Inven-
tories 13.7 9.9 11.7
Trade
and other
receiv-
ables 46.3 37.0 37.8
Cash and
Cash
Equival-
ents 13.2 11.5 13.0
Total
Current
assets 73.2 58.4 62.6
Total
assets 98.4 81.3 86.9
EQUITY
AND
LIA-
BILITIES
Equity
Attributable
to equity
holders
of the
parent
company 51.8 43.8 52.0
Minority
interest 0.9 0.6 1.0
Total
equity 52.7 44.4 53.0
Deferred
tax
liabilities 1.4 0.7 1.2
Employee
pension
benefits 0.8 0.7 0.7
Interest-
bearing
liabilities 1.7 2.0 1.8
Total non-
current
liabilities 3.9 3.4 3.7
Trade and
other
payables 29.5 25.2 25.6
Income
tax
liabilities 1.9 1.8 1.5
Provi-
sions 0.9 0.8 0.7
Interest-
Bearing
liabilities 9.5 5.7 2.4
Total
Current
Liabi-
lities 41.8 33.5 30.2
Total
Equity
And
liabilities 98.4 81.3 86.9
Q2/2007 Calculation of changes in shareholders' equity, MEUR
Minor-
ity
Attributable to equity holders of the parent inter- Total
est equity
Share Transla- Re-
Pre- tion Revalu- tained
Share mium Own diffe- ation earn-
capital reserve shares rence fund ings Total
Share
holders'
equity
31.
12.
2006 3.1 5.0 -1.2 -0.1 0.1 45.2 52.0 1.0 53.0
Cash
flow
hed
ging:
Hedging
Result
allo
cated
to
equity 0.0 0.0 0.0
Hedging
result
carried
to
income
state
ment -0.1 -0.1 -0.1
Trans
lation
diffe
rence 0.0 0.0 0.0
Profit/
loss
from
hedging
of net
invest
ment 0.0 0.0 0.0
Reco
gnized
tax 0.0 0.0 0.0
Other
changes 0.1 0.1 0.1
Net
income
re
corded
dir
ectly
in
equity 0.0 0.0 0.0 0.1 -0.1 0.1 0.1 0.0 0.1
Profit
for
the
peri-
od 9.6 9.6 0.2 9.8
Total
income
and
ex
penses
re
corded
for
the
period 0.0 0.0 0.0 0.1 -0.1 9.7 9.7 0.2 9.9
Divid-
ends
paid -9.9 -9.9 -0.3 -10.2
Share-
holders'
equity
30.6.
2007 3.1 5.0 -1.2 0.0 0.0 45.0 51.8 0.9 52.7
Q2/2006 Calculation of changes in shareholders' equity, MEUR Minor-
ity
Attributable to equity holders of the parent inter- Total
est equity
Share Transla- Re-
Pre- Tion Revalu- Tained
Share mium Own diffe- ation earn-
capital reserve shares rence fund ings Total
Share
holders'
equity
31.12
.2005 3.1 5.0 -1.2 -0.1 -0.1 35.6 42.3 0.5 42.8
Cash
Flow
Hed-
ging:
Hed-
Ging
result
allo
cated
to
equity 0.1 0.1 0.1
Hedgi-
ng
result
Carr-
ied
to
inco-
me
state
ment 0.1 0.1 0.1
Trans
lation
differ
ence 0.0 0.0 0.0
Reco
gniz-
ed
tax 0.0 0.0 0.0
Other
cha-
nges 0.0 0.0 0.0
Net
In-
come
reco-
rded
direct-
ly
in
equity 0.0 0.0 0.0 0.0 0.2 0.0 0.2 0.0 0.2
Profit
For
the
period 7.7 7.7 0.1 7.8
Total
Inco-
me
and
expen
ses
reco-
rded
for
the
per-
iod 0.0 0.0 0.0 0.0 0.2 7.7 7.9 0.1 8.0
Divi
Dends
paid -6.3 -6.3 -6.3
Share
repur
chase 0.0 0.0 0.0
Share
holders'
equity
31.6.
2006 3.1 5.0 -1.2 -0.1 0.1 37.0 43.8 0.6 44.4
Consolidated cash flow statement, MEUR
30.6.2007 30.6.2006 31.12.2006
Profit
for
the
period 9.8 7.8 16.1
Depre
ciation 2.3 2.0 4.2
Other
Adjust
tments 4.3 3.2 6.9
Change
in
working
capital -6.4 -3.4 -5.7
Cash
flow
from
financial
items
and tax -3.8 -2.9 -6.4
Cash
flow
from
oper-
ating
activ-
ities 6.2 6.7 15.1
Invest
ments
in
tangi-
ble
and
inta-
ngible
assets -2.6 -3.4 -7.0
Proc-
eeds
from
disp-
osal
of
tang-
ible
and
intan-
gible
assets 0.0 0.3 0.5
Loans
granted 0.0 0.0 -1.4
Other
Invest
ments -0.2 -1.6 -0.5
Proc
eeds
from
disp
osal
of
other
invest
ments 0.0 0.0 0.3
Change
in long-
term
loan
receiv
ables 0.0 0.1 0.0
Cash
flow
from
invest
ting
active
ties -2.8 -4.6 -8.1
Share
issue 0.0 0.0 0.1
Pro
ceeds
from
long-
term
borro
wings 0.0 0.5 0.4
Repay
ments
of long-
term
loans -0.1 -0.1 -0.2
Proc-
eeds
from
short-
term
borro
wings 9.3 5.0 5.0
Repay
ments
of
short-
term
loans -2.0 -1.0 -4.3
Finan
cial
leas
ing
paym
ents -0.3 -0.2 -0.3
Divid
ends
paid -10.2 -6.3 -6.3
Cash
flow
from
finan
cing
active
ities -3.3 -2.1 -5.5
Change
in
liquid
funds 0.2 0.0 1.6
Segment information
Reporting on Vacon Group's operations is firstly by business segment
and secondly by geographical segment.
Vacon has one business segment, AC drives. The figures for the
primary segment are identical with the figures for the whole Group.
Vacon's operations are organized in the following functions: Products
and Markets, Production, Research & Development, Finance and
Administration, Human Resources, IT and Process Development, and
Corporate Development. To ensure that the organisation is
customer-oriented, operations are controlled by customer segments
that are called business areas. These business areas are: Component
Customers, Solutions Customers, OEM and Brand Label Customers, and
Service and After-Market Services.
The secondary, geographical segment is divided into four sales areas:
Europe, North America, Asia and Australia, and Other Countries.
Key indicators
30.6.2007 30.6.2006 31.12.2006
Equity
per
share,
EUR 3.40 2.88 3.42
Equity
ratio, % 54.2 55.3 61.7
Gross
capital
expen-
diture,
MEUR 3.0 4.9 8.5
Gross
capital
expen-
diture
as
% of
revenues 2.7 5.6 4.6
Interest-
bearing
net
liabi-
lities,
MEUR -2.0 -3.7 -8.8
Gearing, % -3.9 -8.4 -16.6
Order
book,
MEUR 33.7 24.6 29.7
Adju-
sted
Average
number of
shares
during the
period 15,221,720 15,205,109 15,209,303
Number
of shares
at end
of
period 15,232,188 15,213,428 15,213,428
Average
number
of personnel 725 597 618
Commitments and contingencies. MEUR
30.6.2007 30.6.2006 31.12.2006
Commit-
ments
and
contin-
gencies 1.2 2.2 1.8
Financing
commi-
tments 1.1 1.6 1.5
Currency derivatives. MEUR
30.6.2007 30.6.2006 31.12.2006
Forward
exchange
contracts
Fair
value 0.1 0.3 0.1
Nominal
value 14.3 13.5 14.9
Events after end of review period
No events have taken place after the end of the review period that
will have an impact on the Company's result or financial position.
Calculation of financial ratios
Earnings per share = Profit for period attributable to equity
holders of parent company
-------------------------------------------------------
Adjusted average number of shares
Equity per share = Equity attributable to equity holders of
parent company
-------------------------------------------------------
Adjusted number of shares at end of period
Equity ratio = Shareholders' equity (incl. min. interest)
x 100
-------------------------------------------------------
Balance sheet total - advances received
Gearing = (Interest-bearing liabilities - cash, bank
balances and
financial assets) x 100
------------------------------------------------------------
Shareholders' equity (incl. minority interest)
ADDITIONAL TABLES INCLUDED: VACON PLC FINANCIAL BULLETIN 1 January - 30 June 2007
| Source: Vacon.
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