Espoo, Finland, 2014-10-24 08:00 CEST (GLOBE NEWSWIRE) --
EFORE PLC Interim Report October 24, 2014 at 9.00
This release is a summary of Efore's January-September 2014 interim report. Efore Group’s interim report for January-September 2014 is a PDF file attachment to this stock exchange release and is available on the company’s website at the address www.efore.fi.
As a result of changing Efore’s financial year, FY 2013 figures in brackets have been changed to match with the periods of the financial year 2014. Furthermore, when comparing the figures it should be noticed that the last year acquired ROAL Electronics has been consolidated into Efore Group from the beginning of July 2013. FY 2013 Income Statements figures are shown at the end of this release in a separate table.
July – September 2014 (Q3) in brief:
- Net sales totalled EUR 22,1 million (EUR 22,0 million), up 0,4 % compared with the corresponding period last year
- Results from operating activities without one-time items were EUR 1,6 million (EUR -0,6 million)
- Results for the period including one-time items were EUR 1,6 million (EUR -1,3 million)
- Earnings per share were EUR 0,02 (EUR -0,03)
January – September 2014 in brief:
- Net sales totalled EUR 63,8 million (EUR 51,2 million), up 24,8 % compared with the corresponding period last year
- Results from operating activities without one-time items were EUR 0,6 million (EUR-3,2 million)
- Results for the period including one-time items were EUR -0,6 million (EUR -4,7 million)
- Earnings per share were EUR -0,04 (EUR -0,12)
| 7-9/14 | 7-9/13 | Change | 1-9/14 | 1-9/13 | Change | 11/12-12/13 | |
| Key indicators, EUR million | 3 mo | 3 mo | % | 9 mo | 9 mo | % | 14 mo |
| Net Sales | 22,1 | 22,0 | 0,4 | 63,8 | 51,2 | 24,8 | 82,5 |
| Telecommunication sector | 12,2 | 10,0 | 22,1 | 35,0 | 30,9 | 13,1 | 48,6 |
| Industrial sector | 10,0 | 12,0 | -17,0 | 28,9 | 20,3 | 42,5 | 33,9 |
| Results from operating activities without one-time items | 1,6 | -0,6 | 0,6 | -3,2 | -4,3 | ||
| Results from operating activities | 1,6 | -1,3 | -0,6 | -4,7 | 86,6 | -5,8 | |
| Result before taxes | 1,2 | -1,3 | -1,5 | -4,8 | 68,0 | -6,1 | |
| Net result | 1,1 | -1,2 | -1,7 | -4,6 | 63,3 | -6,2 | |
| Earnings per share, EUR | 0,02 | -0,03 | -0,04 | -0,12 | -0,15 | ||
| Solvency ratio, % | 38,5 | 32,6 | 18,1 | 38,5 | 32,6 | 18,1 | 39,7 |
| Gearing, % | 7,1 | 58,7 | 87,9 | 7,1 | 58,7 | 87,9 | 14,3 |
| Cash flow from business operations | 1,0 | 1,5 | 4,6 | -0,5 | 1,4 |
Financial estimate for the 2014
The Company estimates its net sales of financial year 2014 to be EUR 83-91 million and results from operating activities without one-time items to be EUR 0–2,0 million.
Vesa Vähämöttönen, Efore’s President and CEO:
“The effect of the product portfolio renewal as a result of long term R&D investments and the outcome of several actions to improve the competitiveness were visible as significant profitability improvement in the third quarter. Third quarter EBIT was 1,6 MEUR compared to -0,4 MEUR in previous quarter. During the same period last year EBIT was -0,6 MEUR even though net sales remained on same level. Fiscal year 2014 cumulative EBIT without one-time items is now 0,6 MEUR. Profitability improvement shows that the development work and efficiency improvement actions have been right. I believe that the continuous actions will improve the competitiveness also in the future.
Net sales of Efore's telecommunication sector remained on the same level with the second quarter of 2014, however the product portfolio changed because of new product introductions, which continue also during last quarter.
Net sales of industrial sector slightly improved compared to second quarter of 2014. Net sales in the second half of 2014 is forecasted to be at the same level with the first one despite of some price reductions which typically happen at the end of the year in certain segments. For enabling the future growth the sales & marketing organization of industrial sector has been strengthened. ROAL Electronics S.p.A., fully owned company of Efore Plc, was awarded with the highest recognition of Supplier of the Year by National Instruments in August. This is evidence of the high value add we bring to our customers.
The main targets of Efore's strategy have been balancing business areas by creating a strong industrial sector alongside of the telecommunication sector and by developing the company structure to improve the profitability. Short term focus has been in profitability improvement and in the development of new products. According to our strategy the focus will move to profitable growth even though we also continue to improve the competitiveness of the company.
Efore's long term financial target is to reach 10% EBIT level and an average annual net sales growth of 5-10%. On short term Efore is focusing to improve its profitability. Target is to reach at least 6% EBIT level at the end of 2015. “
July – September net sales and financial development
Third quarter net sales totalled EUR 22,1 million (EUR 22,0 million) and remained at the same level with the previous quarter. Net sales of telecommunication sector was EUR 12,2 million and decreased 6,9 % compared to the previous quarter and net sales of industrial sector was EUR 10,0 million and improved 5,3 % compared to the previous quarter.
Results from operating activities without one-time items were EUR 1,6 million (EUR -0,6 million).
The effect of the product portfolio renewal as a result of long term R&D investments and the outcome of several actions to improve the competitiveness were visible as significant profitability improvement in the third quarter.
January – September net sales and financial development
Net sales totalled 63,8 million (EUR 51,2 million). Results from operating activities without one-time items were EUR 0,6 million (EUR -3,2 million). Results included EUR 1,3 million one-time items. Almost all of them were related to the structural changes in Italy due to production transfer to Tunisia. Cash effect of these items will be spread over the coming 24 months and the annual cost saving is approximately EUR 1,6 million.
During the period under review the total spend on R&D activities was EUR 6,5 million (EUR 4,8 million) out of which EUR 2,1 million were capitalized. R&D spend represented 10,1 % of net sales (9,5 %).
Business development
Net sales of Efore's telecommunication sector remained on the same level with the second quarter of 2014, however the product portfolio changed because of new product introductions, which continue also during last quarter.
Net sales of industrial sector slightly improved compared to second quarter of 2014. Net sales in the second half of 2014 is forecasted to be at the same level with the first one despite of some price reductions which typically happen at the end of the year in certain segments.
Telecom sector PCB assembly manufacturing will be transferred to an EMS partner by the end of this year according to the interim report published on August 12,2014 and project is progressing as planned.
Outlook
As a result of the acquisition the group has expanded into new markets which creates better opportunities for the growth. LTE (4G) technology is in a key role in network expansions and Efore has a strong position in this development. Several large network roll-outs have been published after two slow years creating base for demand growth. Power supplies for LED lighting, instrumentation, medical and infrastructure offer several growth areas for Efore in industrial sector.
During the last 18 months the group has started several new product development projects and especially telecom product portfolio is renewing significantly this year. New products make Efore’s product portfolio wider, which is expected to be visible as sales growth and as a decrease in demand fluctuations.
Getting new products into volume deliveries as forecasted is essential for the growth and profitability improvement of the company.
In the near future, Efore is focusing on introducing new products into volume production and on necessary actions to improve the competitiveness.
Long-term targets
Efore Group's long term financial target is to reach 10% EBIT level and an average annual net sales growth of 5-10%. Target is to grow especially in industrial sector. Market driven product platforms and better R&D investment utilization are key factors to support company's target to improve profitability.
On short term Efore is focusing to improve its profitability. Target is to reach at least 6% EBIT level at the end of 2015.
Efore does not consider the long term targets as market guidance for any given year. It will issue separate financial estimate.
Events after the period under review
Efore executive management team will change on 3rd of November 2014. The members and their global responsibilities will be as follows: Vesa Vähämöttönen (President and CEO), Mikael Malm (COO), Alexander Luiga (EVP, Telecommunication sector), Alessandro Leopardi (EVP, Industrial sector) and Riitta Järnstedt (CFO).
EFORE PLC
Board of Directors
For further information please contact Mr.Vesa Vähämöttönen, President and CEO, on October 24, 2014 at 10 – 11 a.m., tel. +358 9 4784 6312.
DISTRIBUTION
Nasdaq OMX Helsinki Oy
Principal media
Efore Group
Efore Group is an international company which develops and produces demanding power products. Efore's head office is based in Finland and its production units are located in China and Tunis. Sales and marketing operations are located in Europe, United States and China. In the fiscal year ending in December 2013, consolidated net sales totaled EUR 82.5 million and the Group's personnel averaged 836. The company's share is quoted on the Nasdaq OMX Helsinki Ltd. www.efore.com
Enclosure: EFORE GROUP INTERIM REPORT JANUARY-SEPTEMBER, 2014
