Salcomp Plc Interim Report 12 August 2010 at 8:15 a.m. Finnish time Salcomp Plc Interim Report 1 January - 30 June 2010 NET SALES CONTINUED STRONG GROWTH April-June 2010: -Net sales grew by 18% to EUR 72.2 million (EUR 61.1 million in April-June 2009). -Number of chargers delivered increased by 17% to 68.6 million pieces (58.7 million pieces). -Market share in mobile phone chargers increased by one percentage unit to some 23% (22%). -Operating profit weakened by 38% to EUR 2.3 million (EUR 3.8 million). -Operating profit, excluding the exchange rate gains/losses, was EUR 1.8 million (EUR 2.8 million). -Earnings per share weakened by 43% to EUR 0.04 (EUR 0.07). -Cash flow from operating activities, excluding the change in selling of receivables, was EUR 5.1 million positive (EUR 5.1 million positive). January-June 2010: -Net sales grew by 21% to EUR 131.8 million (EUR 108.7 million in January-June 2009). -Number of chargers delivered increased by 28% to 134.5 million pieces (105.4 million pieces). -Operating profit improved by 36% to EUR 3.8 million (EUR 2.8 million). -Operating profit, excluding the exchange rate gains/losses, was EUR 2.8 million (EUR 2.9 million). -Earnings per share improved by 300% to EUR 0.08 (EUR 0.02). -Cash flow from operating activities, excluding the change in selling of receivables, was EUR 6.3 million positive (EUR 6.5 million negative). -Group's net interest-bearing debt at the end of June was EUR -1.5 million (EUR 10.2 million). -Cash and cash equivalents at the end of June were EUR 17.8 million (EUR 19.5 million). Outlook for 2010 unchanged: -Both Salcomp's net sales and operating profit in 2010 are expected to improve compared with the 2009 level. Markku Hangasjärvi, President and CEO: ”The mobile phone and mobile phone charger market seem to continue recovering from the global financial crisis quicker than many other industries. According to Salcomp's estimate, some 297 million mobile phones with registered trade marks were globally sold during the second quarter of the year, up by some 11% compared with the corresponding quarter in 2009. Due to the market growth, higher average sales prices by virtue of the stronger US dollar, coupled with an increase in our market share, both the number of chargers we delivered and our net sales in the second quarter in 2010 continued to strongly grow compared with the second quarter in 2009 and the first quarter in 2010. Along with the increase in net sales, our operating profit also clearly improved compared with the first quarter of this year. However, the operating profit remained lower than in the second quarter in 2009, mainly due to more expensive materials and components, as well as a rise in labor costs. Furthermore, the fixed costs increased compared with the second quarter in 2009 because of our accelerated efforts in broadening the product range and customer base, among others. We also took the next step in achieving our strategic targets by introducing a medium power range Matrix product platform. The 24-65 watt power adapters produced according to the Matrix platform are suitable, among others, for point-of-sales devices, netbooks, modems and routers, as well as for industrial applications and consumer electronics devices. The first step outside the low power range chargers was the 9-18 watt Nova product platform introduced last year.” Financial development in April-June 2010 In April-June, Salcomp's net sales increased by 18% to EUR 72.2 million (EUR 61.1 million in April-June 2009) due to the increase in the number of chargers delivered by 17% to 68.6 million (58.7 million) pieces. In addition, the average sales prices of chargers rose due to the stronger US dollar in relation to euro. Salcomp's market share in mobile phone chargers was approximately 23% (approximately 22%). Salcomp's operating profit weakened by 38% to EUR 2.3 million (EUR 3.8 million) due to a rise in material and component prices and labor costs, among others. In addition, accelerated efforts in broadening the product range and customer base increased fixed costs. Operating profit was improved by realized and unrealized exchange rate gains of EUR 0.6 million (EUR 1.0 million of gains). The operating margin in the second quarter of the year was 3.2% (6.2%). The Group's net finance expenses were EUR 0.4 million (EUR 0.1 million positive). The finance expenses for the second quarter of the year include EUR 0.2 million of gains (EUR 0.6 million of gains) due to the exchange rate differences in intragroup loans. Renewing the Group's financial package in June involved a one-off cost of approximately EUR 0.2 million. Taxes for the quarter totaled EUR 0.4 million (EUR 1.2 million). Taxes in the comparison period include a deferred tax of EUR 0.7 million, resulting from the parent company's tax-deductible goodwill amortization. The goodwill was fully amortized in October 2009. The profit for the period amounted to EUR 1.5 million (EUR 2.6 million). Earnings per share were EUR 0.04 (EUR 0.07), and diluted earnings per share were EUR 0.04 (EUR 0.07). Cash flow from operating activities in April-June amounted to EUR 4.7 million positive (EUR 2.1 million positive). The cash flow from operating activities, excluding the change in selling of receivables, was EUR 5.1 million positive (EUR 5.1 million positive). Financial development in January-June 2010 The net sales grew by 21% in January-June to EUR 131.8 million (EUR 108.7 million in January-June 2009). The number of chargers delivered increased by 28% to 134.5 million (105.4 million) pieces. The operating profit improved by 36% to EUR 3.8 million (EUR 2.8 million) in January-June. The profitability was improved by the increase in the number of chargers delivered compared with the first half of 2009, when charger sales volumes were exceptionally low due to the global financial crisis. In addition, the operating profit was increased by some EUR 1.0 million in realized and unrealized exchange rate gains (EUR -0.1 million). The operating profit in January-June was burdened by a rise in material and component prices and labor costs, as well as an increase in fixed costs. The operating margin was 2.9% (2.6%) in the first half of the year. The Group's net finance expenses were EUR 0.2 million (EUR 0.1 million positive). The finance expenses for the period include EUR 0.9 million of gains (EUR 1.0 million of gains) due to the unrealized exchange rate differences in intra-group loans. Taxes for the period totaled EUR 0.5 million (EUR 2.2 million). Taxes in the comparison period include a deferred tax of EUR 1.5 million resulting from the parent company's tax-deductible goodwill amortization. The goodwill was fully amortized in October 2009. The profit for the period amounted to EUR 3.2 million (EUR 0.7 million). Earnings per share were EUR 0.08 (EUR 0.02) and diluted earnings per share EUR 0.08 (EUR 0.02). R&D and capital expenditure The Group's R&D expenditure was EUR 3.3 million (EUR 2.7 million) in January-June, or 2.5% (2.5%) of net sales. R&D focused on developing new products for current and new customers, and constant improvement in the cost structure of existing products. In July, Salcomp introduced the Matrix product platform, and power adapters produced according to this platform are suitable, among others, for point-of-sales devices, netbooks and data communications devices, such as modems and routers. Capital expenditure in January-June amounted to EUR 4.0 million (EUR 0.4 million). The capital expenditure involved increasing the capacity in the low and medium power range chargers. Financing Cash flow from operating activities in January-June amounted to EUR 6.5 million positive (EUR 7.6 million negative) mainly due to the decline in working capital. The cash flow from operating activities, excluding the change in selling of receivables, was EUR 6.3 million positive (EUR 6.5 million negative). Cash and cash equivalents at the end of June were EUR 17.8 million (EUR 19.5 million). The Group's equity ratio at the end of June was 42.2% (38.9%) and gearing was -2.0% (15.2%). Net interest-bearing debt totaled EUR -1.5 million (EUR 10.2 million) at the end of the period. In June, Salcomp signed an agreement concerning the renewal of the company's financing arrangements. This amended the loan arrangements that were signed in June 2009. The amendments to the loan arrangements improve the Group liquidity and reduce the interest expenses. The syndicated loan of EUR 25 million agreed with Nordea Bank Finland Plc and Merchant Banking, Skandinaviska Enskilda Banken AB (publ) is divided in a EUR 15 million long-term loan and a EUR 10 million long-term revolving credit limit. The loan period is 3 years. The terms and conditions of the Facilities contain market customary covenants and undertakings and security cover for the Group. On 31 May 2010, Salcomp repaid the capital loan of EUR 3 million agreed in December 2008 and the capital loan of EUR 7 million agreed in June 2009, as well as the interests related to them totaling EUR 1.3 million. The capital loans, in accordance with chapter 12 of the Finnish Companies Act, were granted by Nordstjernan AB, the majority shareholder of Salcomp. Renewing the Group's financial package involved a one-off cost of approximately EUR 0.2 million. The Group had an unused revolving credit limit of EUR 10 million at the end of the period. Personnel The number of Group personnel at the end of June totaled 9,830 (6,993): 6,086 were employed in China, 1,452 in Brazil, 2,223 in India, and 69 in Finland and other countries. The number of personnel increased due to the rise in production volumes. Shares and shareholders Salcomp's registered share capital amounts to EUR 9,832,735.12, divided into 39,023,840 fully paid outstanding shares and 337,000 shares in the possession of the company. The company has one series of shares, and all the shares entitle the shareholder to equal rights in the company. Salcomp's share price fluctuated between EUR 1.85 and EUR 2.19 in January-June. The average share price during the period was EUR 2.00, and the closing price at the end of June EUR 1.87. Share trading amounted to EUR 2.9 million and 1.4 million shares, including the shares subscribed in the directed issue in June, a total of 385,650 shares. According to the book-entry system, Salcomp had 1,091 shareholders at the end of the period. Foreign ownership at the end of June was 78.1% and the market value EUR 73.6 million. In May, the Board of Directors of Salcomp approved two new share-based incentive programs for the Group key personnel: a Matching Share Program targeted at the members of the Extended Global Management Team, as well as a Performance Share Program targeted at 53 key employees including also the members of the Extended Global Management Team. Both incentive programs include one earning period, calendar years 2010-2012. Based on the resolutions on the new incentive programs, the Board resolved, pursuant to the authorization by the Annual General Meeting on 24 March 2010, to offer new shares for subscription for the Group's key personnel. A total of 48,650 new shares in Salcomp were subscribed for in the directed issue, corresponding to approximately 0.12 per cent of the company's share capital. The new shares were entered in the Trade Register on 24 June 2010. The subscription price of the shares, i.e. EUR 1.98 per share totaling EUR 96,327, has been placed in the company's invested free equity. In addition, the company itself has subscribed for 337,000 new shares in accordance with the terms and conditions of the share issue to the company itself. The said shares may be used to fulfill the commitments related to the key employees' incentive programs. The admittance of the new shares to trading at the NASDAQ OMX Helsinki Ltd took place on 24 June 2010. The number of Salcomp Plc's all shares and shares admitted to trading is, after the registration of the new shares, 39,360,840 shares, of which 337,000 shares are in the possession of the company. The number of outstanding shares is 39,023, 840 shares. Risks and uncertainties in the near future Salcomp's business involves uncertainty factors that may affect the company's financial development in the near future. These include the general development of the mobile phone markets, substantial changes in the purchase prices and availability of materials and charger components and changes in the competition in the mobile phone charger markets. Furthermore, consolidation of the customer base and deterioration in the financial position of a major customer may have a negative effect on Salcomp's business. Major changes in exchange rates can be considered as one of the other short- term uncertainty factors, especially the exchange rate of the US dollar in relation to the euro and to currencies in those countries in which Salcomp has production. In addition, the impact of the global economy on the stability of the financial market, as well as accessibility of financing, has an influence on Salcomp's business. In the medium term, Salcomp's business may be affected by standardization projects concerning mobile phone chargers in the different market areas. Due to the standardization, it is possible that in the future, in some market areas, part of mobile phone kits will not include a separate mobile phone charger. Risks are managed to the extent that the company has influence over them. Further details on risks and risk management are available in the Annual Report 2009. Events after the reporting period There are no events after the reporting date which would have a significant influence on the figures presented in the Interim Report. Outlook for 2010 According to the estimates published by some of Salcomp's key customers and by various market research companies, the mobile phone market is expected to grow during 2010, compared with 2009. Measured by the number of units, this would mean approximately 1.2 billion mobile phones and, therefore, mobile phone chargers, to be sold in 2010. This lays a solid base for increasing the number of chargers delivered by Salcomp, as well as the net sales, in 2010. On the other hand, labor costs and prices of materials and components used in chargers are expected to rise somewhat during the second half of 2010, creating challenges in improving the operating profit. However, Salcomp's outlook for 2010 remains unchanged. Both Salcomp's net sales and operating profit in 2010 are expected to improve compared with the 2009 level. Helsinki 12 August 2010 Salcomp Plc Board of Directors Further information: Markku Hangasjärvi, President and CEO, tel. +358 40 7310 114 Jari Saarinen, CFO, tel. +358 40 5004 206 The Finnish briefing for analysts and media will be held on 12 August 2010 at 11:00 a.m. Finnish time at Hotel Scandic Simonkenttä, Simonkatu 9, Helsinki. The Interim Report slide show presentation will be available at Salcomp's web page, www.salcomp.com > Investors after the disclosure of the stock exchange release. Salcomp's Interim Report for January-September will be published on 11 November 2010. -------------------------------------------------------------------------------- | STATEMENT OF COMPREHENSIVE INCOME | | (EUR 1 000) | -------------------------------------------------------------------------------- | | 1-6/2010 | 1-6/2009 | Change % | 1-12/2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 131 805 | 108 678 | 21.3% | 239 455 | -------------------------------------------------------------------------------- | Cost of sales | -118 722 | -97 869 | 21.3% | -213 167 | -------------------------------------------------------------------------------- | Gross margin | 13 083 | 10 809 | 21.0% | 26 288 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Other operating income | 100 | 11 | 809.1% | 90 | -------------------------------------------------------------------------------- | Sales and marketing | -1 461 | -964 | 51.6% | -2 063 | | expenses | | | | | -------------------------------------------------------------------------------- | Administrative expenses | -4 593 | -4 219 | 8.9% | -8 685 | -------------------------------------------------------------------------------- | Research and development | -3 315 | -2 729 | 21.5% | -5 283 | | expenses | | | | | -------------------------------------------------------------------------------- | Other operating expenses | -7 | -109 | -93.6% | -131 | -------------------------------------------------------------------------------- | Operating result | 3 807 | 2 799 | 36.0% | 10 216 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Finance income | 749 | 1 016 | -26.3% | 1 228 | -------------------------------------------------------------------------------- | Finance expenses | -929 | -949 | -2.1% | -2 325 | -------------------------------------------------------------------------------- | Result before tax | 3 627 | 2 866 | 26.6% | 9 119 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Income tax expenses | -468 | -2 218 | -78.9% | -3 861 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Result for the period | 3 159 | 648 | 387.5% | 5 258 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Other comprehensive | | | | | | income for the period | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Exchange differences on | 3 482 | 2 176 | 60.0% | 3 069 | | translating foreign | | | | | | operations | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Other comprehensive | 3 482 | 2 176 | 60.0% | 3 069 | | income for the period, | | | | | | net of tax | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL COMPREHENSIVE | 6 641 | 2 824 | 135.2% | 8 327 | | INCOME FOR THE PERIOD | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Basic earnings per | 0.08 | 0.02 | 300.0% | 0.13 | | share, EUR | | | | | -------------------------------------------------------------------------------- | Diluted earnings per | 0.08 | 0.02 | 300.0% | 0.14 | | share, EUR | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF COMPREHENSIVE | | | | | INCOME | | | | | (EUR 1 000) | | | | -------------------------------------------------------------------------------- | | 4-6/ | 4-6/ | Change | | | 2010 | 2009 | % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 72 170 | 61 145 | 18.0% | -------------------------------------------------------------------------------- | Cost of sales | -64 962 | -53 210 | 22.1% | -------------------------------------------------------------------------------- | Gross margin | 7 208 | 7 935 | -9.2% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Other operating income | 100 | 8 | 1 150.0% | -------------------------------------------------------------------------------- | Sales and marketing | -872 | -476 | 83.2% | | expenses | | | | -------------------------------------------------------------------------------- | Administrative expenses | -2 301 | -2 106 | 9.3% | -------------------------------------------------------------------------------- | Research and development | -1 803 | -1 472 | 22.5% | | expenses | | | | -------------------------------------------------------------------------------- | Other operating expenses | -5 | -109 | -95.4% | -------------------------------------------------------------------------------- | Operating profit | 2 327 | 3 780 | -38.4% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Finance income | 87 | 681 | -87.2% | -------------------------------------------------------------------------------- | Finance expenses | -484 | -611 | -20.8% | -------------------------------------------------------------------------------- | Profit before tax | 1 930 | 3 850 | -49.9% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Income tax expenses | -402 | -1 218 | -67.0% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Profit for the period | 1 528 | 2 632 | -41.9% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Other comprehensive income for | | | | | the period | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Exchange differences on | 2 418 | 519 | 365.9% | | translating foreign operations | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Other comprehensive income for | 2 418 | 519 | 365.9% | | the period, net of tax | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL COMPREHENSIVE INCOME FOR | 3 946 | 3 151 | 25.2% | | THE PERIOD | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Basic earnings per share, EUR | 0.04 | 0.07 | -42.9% | -------------------------------------------------------------------------------- | Diluted earnings per share, | 0.04 | 0.07 | -42.9% | | EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF FINANCIAL POSITION | | (EUR 1 000) | -------------------------------------------------------------------------------- | | 30.6.2010 | 30.6.2009 | Change % | 31.12.2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | | | | | -------------------------------------------------------------------------------- | Property, plant and | 24 446 | 20 993 | 16.4% | 19 886 | | equipment | | | | | -------------------------------------------------------------------------------- | Goodwill | 66 412 | 66 412 | 0.0% | 66 412 | -------------------------------------------------------------------------------- | Other intangible | 635 | 404 | 57.2% | 405 | | assets | | | | | -------------------------------------------------------------------------------- | Deferred tax assets | 3 257 | 3 009 | 8.2% | 3 180 | -------------------------------------------------------------------------------- | | 94 750 | 90 818 | 4.3% | 89 883 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Current assets | | | | | -------------------------------------------------------------------------------- | Inventories | 26 550 | 21 829 | 21.6% | 20 329 | -------------------------------------------------------------------------------- | Trade and other | 43 357 | 40 072 | 8.2% | 32 623 | | receivables | | | | | -------------------------------------------------------------------------------- | Cash and cash | 17 815 | 19 539 | -8.8% | 18 872 | | equivalents | | | | | -------------------------------------------------------------------------------- | | 87 722 | 81 440 | 7.7% | 71 824 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Total assets | 182 472 | 172 258 | 5.9% | 161 707 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity and liabilities | | | | | -------------------------------------------------------------------------------- | Share capital | 9 833 | 9 833 | 0.0% | 9 833 | -------------------------------------------------------------------------------- | Invested unrestricted | 19 401 | 22 035 | -12.0% | 22 035 | | equity | | | | | -------------------------------------------------------------------------------- | Retained earnings | 47 603 | 35 021 | 35.9% | 40 741 | -------------------------------------------------------------------------------- | | 76 837 | 66 889 | 14.9% | 72 609 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Non-current | | | | | | liabilities | | | | | -------------------------------------------------------------------------------- | Deferred tax | 17 303 | 16 311 | 6.1% | 17 313 | | liabilities | | | | | -------------------------------------------------------------------------------- | Capital loans | 0 | 10 000 | - | 10 000 | -------------------------------------------------------------------------------- | Interest-bearing | 13 853 | 16 467 | -15.9% | 5 882 | | liabilities | | | | | -------------------------------------------------------------------------------- | | 31 156 | 42 778 | -27.2% | 33 195 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Current liabilities | | | | | -------------------------------------------------------------------------------- | Trade and other | 72 054 | 59 358 | 21.4% | 52 671 | | payables | | | | | -------------------------------------------------------------------------------- | Interest-bearing | 2 425 | 3 233 | -25.0% | 3 232 | | current liabilities | | | | | -------------------------------------------------------------------------------- | | 74 479 | 62 591 | 19.0% | 55 903 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Total equity and | 182 472 | 172 258 | 5.9% | 161 707 | | liabilities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF CHANGES IN EQUITY | | (EUR 1 000) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to equity holders of the parent | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | Share | Invested | Translati | Retained | Total | | | | capital | unrestrict | on | earnings | equity | | | | | ed equity | differenc | | | | | | | | es | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity on 1 Jan | 9 833 | 22 035 | -784 | 32 695 | 63 779 | | 2009 | | | | | | -------------------------------------------------------------------------------- | | Total | 0 | 0 | 2 176 | 648 | 2 824 | | | comprehensi | | | | | | | | ve income | | | | | | | | for the | | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | | Incentive | 0 | 0 | 0 | 286 | 286 | | | plan | | | | | | -------------------------------------------------------------------------------- | Equity on 30 | 9 833 | 22 035 | 1 392 | 33 629 | 66 889 | | June 2009 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity on 1 Jan | 9 833 | 22 035 | 2 285 | 38 456 | 72 609 | | 2010 | | | | | | -------------------------------------------------------------------------------- | | Total | 0 | 0 | 3 482 | 3 159 | 6 641 | | | comprehensi | | | | | | | | ve income | | | | | | | | for the | | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | | Share issue | 0 | 96 | 0 | 0 | 96 | -------------------------------------------------------------------------------- | | Repayment | 0 | -2 730 | 0 | 0 | -2 730 | | | of capital | | | | | | -------------------------------------------------------------------------------- | | Incentive | 0 | 0 | 0 | 221 | 221 | | | plans | | | | | | -------------------------------------------------------------------------------- | Equity on 30 | 9 833 | 19 401 | 5 767 | 41 836 | 76 837 | | June 2010 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF CASH FLOWS | | (EUR 1 000) | -------------------------------------------------------------------------------- | | 1-6/2010 | 1-6/2009 | Change % | 1-12/2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow before change in | 6 496 | 5 831 | 11.4% | 15 535 | | working capital | | | | | -------------------------------------------------------------------------------- | Change in working capital | 1 980 | -12 248 | - | -10 521 | -------------------------------------------------------------------------------- | Financial items and taxes | -1 929 | -1 220 | 58.1% | -1 852 | -------------------------------------------------------------------------------- | Net cash flow from | 6 547 | -7 637 | - | 3 162 | | operating activities | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Purchases | -3 968 | -359 | 1 005.3% | -1 592 | -------------------------------------------------------------------------------- | Sales | 81 | 11 | 636.4% | 64 | -------------------------------------------------------------------------------- | Cash flows from investing | -3 887 | -348 | 1 017.0% | -1 528 | | activities | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Cash flow before financing | 2 660 | -7 985 | - | 1 634 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Withdrawal of borrowings | 16 466 | 27 000 | -39.0% | 27 000 | -------------------------------------------------------------------------------- | Repayment of borrowings | -19 333 | -27 425 | -29.5% | -38 092 | -------------------------------------------------------------------------------- | Share issue | 96 | 0 | - | 0 | -------------------------------------------------------------------------------- | Dividends* | -2 730 | 0 | - | | -------------------------------------------------------------------------------- | Net cash flow from | -5 501 | -425 | 1 194.4% | -11 092 | | financing activities | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Change in cash and cash | -2 841 | -8 410 | -66.2% | -9 458 | | equivalents | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents | 18 872 | 26 590 | -29.0% | 26 590 | | at the beginning of the | | | | | | period | | | | | -------------------------------------------------------------------------------- | Translation difference | 1 784 | 1 359 | 31.3% | 1 740 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 17 815 | 19 539 | -8.8% | 18 872 | | at the end of the period | | | | | -------------------------------------------------------------------------------- *repayment of capital -------------------------------------------------------------------------------- | KEY FIGURES | | | | | -------------------------------------------------------------------------------- | | 1-6/ | 1-6/ | Change | 1-12/ | | | 2010 | 2009 | % | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sold chargers, Mpcs | 134.5 | 105.4 | 27.6% | 243.3 | -------------------------------------------------------------------------------- | Average sales price, | 0.98 | 1.03 | -5.0% | 0.98 | | EUR | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, MEUR | 131.8 | 108.7 | 21.3% | 239.5 | -------------------------------------------------------------------------------- | EBITDA, MEUR | 6.4 | 5.3 | 20.8% | 15.1 | -------------------------------------------------------------------------------- | EBITDA%, % | 4.9% | 4.9% | | 6.3% | -------------------------------------------------------------------------------- | Operating result, | 3.8 | 2.8 | 35.7% | 10.2 | | MEUR | | | | | -------------------------------------------------------------------------------- | Operating margin, % | 2.9% | 2.6% | | 4.3% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Basic earnings per | 0.08 | 0.02 | 300.0% | 0.13 | | share, EUR | | | | | -------------------------------------------------------------------------------- | Diluted earnings per | 0.08 | 0.02 | 300.0% | 0.14 | | share, EUR | | | | | -------------------------------------------------------------------------------- | Earnings per share | 0.08 | 0.05 | 60.0% | 0.20 | | excluding deferred | | | | | | tax, EUR | | | | | -------------------------------------------------------------------------------- | Equity per share, | 1.97 | 1.72 | 14.5% | 1.86 | | EUR | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on equity, % | 10.4% | 2.0% | | 7.7% | -------------------------------------------------------------------------------- | Return on capital | 13.2% | 8.0% | | 12.3% | | employed, % | | | | | -------------------------------------------------------------------------------- | Return on net | 51.6% | 30.5% | | 61.2% | | assets, % | | | | | -------------------------------------------------------------------------------- | Equity ratio, % | 42.2% | 38.9% | | 44.9% | -------------------------------------------------------------------------------- | Gearing, % | -2.0% | 15.2% | | 0.3% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital expenditure, | 4.0 | 0.4 | 1 005.3% | 1.6 | | MEUR | | | | | -------------------------------------------------------------------------------- | Capital expenditure, | 3.0% | 0.3% | | 0.7% | | % of net sales | | | | | -------------------------------------------------------------------------------- | Personnel on average | 8 841 | 6 882 | 28.5% | 7 312 | -------------------------------------------------------------------------------- | Personnel at the end | 9 830 | 6 993 | 40.6% | 7 900 | | of period | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Average number of | 38 977 082 | 38 975 190 | | 38 975 190 | | shares outstanding | | | | | -------------------------------------------------------------------------------- | Number of shares | 39 023 840 | 38 975 190 | | 38 975 190 | | outstanding at the | | | | | | end of period | | | | | -------------------------------------------------------------------------------- | Diluted number of | 38 806 885 | 37 597 129 | | 38 187 925 | | shares outstanding | | | | | | on average | | | | | -------------------------------------------------------------------------------- | Highest share price, | 2.19 | 1.94 | | 1.99 | | EUR | | | | | -------------------------------------------------------------------------------- | Lowest share price, | 1.85 | 1.15 | | 1.15 | | EUR | | | | | -------------------------------------------------------------------------------- | Average share price, | 2.00 | 1.44 | | 1.60 | | EUR | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Traded shares, Mpcs | 1.4 | 0.4 | | 1.9 | -------------------------------------------------------------------------------- | Traded shares, MEUR | 2.9 | 0.6 | | 3.1 | -------------------------------------------------------------------------------- NOTES TO THE INTERIM REPORT This Interim Report has been prepared in accordance with the international financial accounting standard IAS 34 Interim Reports. The same accounting principles are applied in this Interim Report as in the Financial Statements. Salcomp has, as of 1 January 2009, applied the revised IAS 1 Presentation of Financial Statements standard, as well as the new IFRS 8 Operating Segments standard. Other amended standards or interpretations have not affected this Interim Report. Adoption of IFRS 8 has no impact on the number of reported segments, but only on the notes presented in the Financial Statements. Salcomp has one business segment, chargers. Internal management reporting complies with the IFRS reporting and due to this, separate adjustments are not presented. -------------------------------------------------------------------------------- | LIABILITIES | | (EUR 1 000) | -------------------------------------------------------------------------------- | | 30.6.2010 | 30.6.2009 | Change % | 31.12.2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | For own dept | | | | | -------------------------------------------------------------------------------- | | Company and real | 82 000 | 82 000 | 0.0% | 82 000 | | | estate mortgages | | | | | -------------------------------------------------------------------------------- | | Others | 5 | 5 | 0.0% | 5 | -------------------------------------------------------------------------------- | Leasing and rental | 7 130 | 8 608 | -17.2% | 7 359 | | liabilities | | | | | -------------------------------------------------------------------------------- | | 89 135 | 90 613 | -1.6% | 89 364 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | QUARTERLY INFORMATION | -------------------------------------------------------------------------------- | | 4-6/10 | 1-3/10 | 10-12/0 | 7-9/09 | 4-6/09 | 7/09-6/1 | | | | | 9 | | | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sold chargers, | 68 586 | 65 941 | 69 817 | 68 040 | 58 662 | 272 384 | | kpcs | | | | | | | -------------------------------------------------------------------------------- | Net sales, | 72 170 | 59 635 | 62 699 | 68 078 | 61 145 | 262 582 | | kEUR | | | | | | | -------------------------------------------------------------------------------- | Operating | 2 327 | 1 480 | 3 032 | 4 385 | 3 780 | 11 224 | | result, kEUR | | | | | | | -------------------------------------------------------------------------------- | Operating | 3.2% | 2.5% | 4.8% | 6.4% | 6.1% | 4.3% | | margin, % | | | | | | | -------------------------------------------------------------------------------- | Average sales | 1.05 | 0.90 | 0.90 | 1.00 | 1.04 | 0.96 | | price, EUR | | | | | | | -------------------------------------------------------------------------------- OPTION RIGHTS During the financial year 2007, the General Meeting of Shareholders established an option program with a total of 2,047,500 option rights that entitle to subscribe the same amount of new shares of the company. The option program is divided to symbols 2007A, 2007B and 2007C. The Board of Directors has not granted option rights to Group key personnel during the financial year. The share based incentives are conditional. The vesting conditions are based on that the total shareholder return is at least 8 % per annum. Options are lost when a person is leaving the company before the settlement period begins. The Board of Directors can decide in these cases that the stock option owner is entitled to keep the options or a part of them. The fair value has been determined using the Cox-Ross-Rubinstein binomial model. -------------------------------------------------------------------------------- | Program symbol | 2007A | 2007B | 2007C | Total | | | | | | options | -------------------------------------------------------------------------------- | Number of options | 657 500 | 682 500 | 707 500 | 2 047 500 | -------------------------------------------------------------------------------- | Vesting period | 1.4.2007- | 1.4.2008- | 1.4.2009- | | | | 31.3.2010 | 31.3.2011 | 31.3.2012 | | -------------------------------------------------------------------------------- | Options granted | 497 500 | 545 000 | 627 500 | 1 670 000 | | before the current | | | | | | financial year | | | | | -------------------------------------------------------------------------------- | Options granted | 0 | 0 | 0 | | | during the current | | | | | | financial year | | | | | -------------------------------------------------------------------------------- | Options forfeited | -32 500 | -37 500 | 0 | -70 000 | | during the current | | | | | | financial year | | | | | -------------------------------------------------------------------------------- | Settlement (shares | 1 | 1 | 1 | | | / option) | | | | | -------------------------------------------------------------------------------- | Settlement period | 1.4.2010- | 1.4.2011- | 1.4.2012- | | | | 31.3.2012 | 31.3.2013 | 31.3.2014 | | -------------------------------------------------------------------------------- | Grant date | 02.05.07 | 07.05.08 | 11.08.09 | | -------------------------------------------------------------------------------- | Exercise price | 2.81 | 3.33 | 1.40 | | -------------------------------------------------------------------------------- | Share price at | 3.51 | 3.79 | 1.51 | | | grant date | | | | | -------------------------------------------------------------------------------- | The fair value of | 1.44 | 1.44 | 0.61 | | | option at grant | | | | | | date | | | | | -------------------------------------------------------------------------------- SHARE BASED INCENTIVE PROGRAM The Board of Directors of Salcomp Plc has approved two new share-based incentive programs for the Group key personnel. The new programs are a Matching Share Program targeted at the members of the Extended Global Management Team, as well as a Performance Share Program targeted at 53 key employees including also the members of the Extended Global Management Team. Both Programs include one earning period, from calendar year 2010 to 2012. The potential rewards from both the Matching and Performance Share programs will be paid partly in Company shares and partly in cash during 2013. The cash payment is intended to cover the personal taxes and tax-related costs arising from the reward. No reward will be paid to a key person, if his or her employment or service in a Group Company ends before the reward payment. The rewards to be paid on the basis of the earning period will correspond to the value of maximum 532,000 Salcomp Plc shares. Global Management Team can earn a total of 281,000 pcs of Salcomp Plc shares during the total earning period. Releases relating to the new incentive program have been issued in May 19 and June 21, 2010. -------------------------------------------------------------------------------- | RELATED PARTY INFORMATION | | (EUR 1 000) | -------------------------------------------------------------------------------- | Related party | 30.6.2010 | 30.6.2009 | Change % | 31.12.2009 | | transactions with | | | | | | Nordstjernan AB | | | | | -------------------------------------------------------------------------------- | Capital loans | 0 | 10 000 | - | 10 000 | -------------------------------------------------------------------------------- | Interest payable of | 0 | 176 | - | 787 | | capital loans | | | | | -------------------------------------------------------------------------------- | Sales of receivables | 0 | 83 | - | 0 | -------------------------------------------------------------------------------- | Interest expense of the | 553 | 176 | 214.2% | 787 | | period | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Salcomp has renewed the financing arrangements in May. In this connection, | | the capital loans have been repaid to Nordstjernan AB. Release on the issue | | has been published in May 25, 2010. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OWN SHARES | -------------------------------------------------------------------------------- | | 30.6.2010 | 30.6.2009 | -------------------------------------------------------------------------------- | Parent company own shares | 337 000 | 0 | | (pcs) | | | -------------------------------------------------------------------------------- CALCULATION OF FINANCIAL RATIOS Average personnel: Average number of personnel at end of each month Return on equity (%) = Result for the period x 100 : Equity on average Return on capital employed (%) = (Result before tax + interest charges and other financial expenses) x 100 : (Total liabilities less interest-free debt (on average)) Return on net assets (%) = Operating result x 100 : (Fixed assets less goodwill and deferred tax assets + inventory + short-term receivables less short-term interest-free debt on average) Equity ratio (%) = Equity x 100 : Total liabilities less received advance payments Gearing (%) = (Interest-bearing debt less cash and cash equivalents) x 100 : Equity Earnings per share = Result for the period : Weighted average number of shares outstanding during the period Equity per share = Equity : number of shares outstanding at the end of period Earnings per share, diluted = Result for the period : Weighted average number of shares outstanding during the period, adjusted for the share issue