January - March 2016 in brief
- Order book at the beginning of April was 10% down on the previous year, at MEUR 83 (MEUR 92).
- Net sales in the review period declined 11% from the previous year to MEUR 118 (MEUR 133).
- EBITDA excluding one-time items declined from the previous year to MEUR 4.3 (MEUR 9.9).
- Profitability in the period was weakened by lower production volumes than in the previous year, and by stoppages in production caused by the tight liquidity situation. Another factor was an increase in quality costs from the corresponding period in the previous year. Exchange rate differences had an impact of MEUR -0.8 (MEUR -0.3) on EBITDA.
- Operating profit excluding one-time items was down on the previous year, standing at MEUR -0.1 (MEUR 5.4). Operating profit for the period including one-time items was MEUR -2.2 (MEUR 4.4).
- The result after financing items excluding one-time items was MEUR -5.8 (MEUR 0.2) and including these items was MEUR -7.8 (MEUR -0.9).
- One-time items that had an impact on the result after financial items for the review period totalled MEUR -2.0 (MEUR -1.1).
- The net result for the period was MEUR -7.8 (MEUR -1.7) and basic earnings per share were EUR -0.08 (EUR -0.02).
- Financing arrangements to significantly strengthen the balance sheet are progressing according to plan. In the planned financing solution the company aims to issue a new convertible capital loan, negotiate arrangements for the parent company secured loan, negotiate financing for the Turkish subsidiary with Turkish banks, and sell Componenta’s pistons business. In addition the company is looking into the possibility of divesting non-core business operations and property.
- Componenta started to employ its new reporting segments - the Iron Business and the Aluminium Business - on 1 January 2016.
Componenta’s guidance for 2016
Due to the financial situation of the company and the structural changes currently taking place, giving earnings guidance is exceptionally challenging. Because of this, Componenta is not for the time being making forecasts about its financial performance when commenting on its prospects.
President and CEO Harri Suutari comments on the review period:
“Sales of Componenta’s iron products declined some 13% in the first quarter from the previous year, mainly due to weak developments in sales of mining, construction and agricultural machinery in our main market areas. Sales of aluminium products remained almost unchanged from the previous year.
EBITDA obtained from sales of iron products fell from EUR 6.0 million to EUR 1.0 million as the result of lower volumes, production stoppages caused by weak liquidity, and other special arrangements. Quality costs were exceptionally high in the first quarter due to problems in starting up production of several new foundry products. Capital expenditure of EUR 2.5 million was made in the iron business.
EBITDA obtained from aluminium products improved from EUR 3.1 million to EUR 3.5 million. Capital expenditure of EUR 4.6 million was made in the aluminium business. Installation of machinery and equipment at the new production plant in Manisa, Turkey has begun as planned.
The management model was renewed by eliminating the Group-wide matrix organization and restoring customer interface functions to the business units. At the same time the business units became responsible for profit and loss. In connection with these changes the number of personnel in management and administration was cut through various arrangements by 40 person-year, and annual fixed costs will fall by some EUR 3.5 million. The saving impact will be visible partly in 2016 and fully from the beginning of 2017. Group management and administration costs in 2015 totalled some EUR 21 million. We are trying to cut these costs to about half of what they have been.
During the first quarter the Group clarified its strategy. Componenta will in future continue to develop its aluminium business as previously planned, but in its iron business it will focus technically on automated green sand production lines. The aim is to raise the value added by increasing the proportion of services accounted for by machining and surface treatment.
The Group’s financial position has been difficult during the first quarter. I believe that the total financial package being negotiated will bring a solution that safeguards the continuity of the business. The Group’s profitability is still too weak, however, to bear the remaining debt burden, and measures to improve profitability will have to be continued with a rapid schedule. We will have to consider solutions based on the cash flow in the near future.”
Key figures
|
Q1 2016 |
Q1 2015 |
Change |
2015 |
|
| Order book, MEUR | 82.7 | 92.3 | -10% | 76.9 |
| Net sales, MEUR | 118.2 | 133.1 | -11% | 494.8 |
| EBITDA*), MEUR | 4.3 | 9.9 | -57% | 24.9 |
| Operating profit*), MEUR | -0.1 | 5.4 | n/m | 7.0 |
| Operating profit*), % | -0.1 | 4.1 | n/m | 1.4 |
| Result after financial items*), MEUR | -5.8 | 0.2 | n/m | -18.4 |
| One-time items impacting on result after financial items, MEUR | -2.0 | -1.1 | 91% | -30.5 |
| Taxes, MEUR | 0.0 | -0.8 | -96% | -33.8 |
| Net result, MEUR | -7.8 | -1.7 | 361% | -82.7 |
| Earnings per share, EUR | -0.08 | -0.02 | 297% | -0.86 |
| Net gearing, % | 2,410 | 208 | 1,061% | 1,273 |
| Return on investment*), % | -0.2 | 6.5 | n/m | 2.3 |
| Return on equity*), % | -165.2 | -2.7 | 5,973% | -20.4 |
| Number of personnel at end of quarter, incl. leased personnel | 4,272 | 4,253 | 0% | 4,269 |
*) excluding one-time items
Componenta’s Q1 2016 Interim Report in pdf format is in the appendix to this release. It is also available on the company’s website at www.componenta.com.
Helsinki, 22 April 2016
COMPONENTA CORPORATION
Harri Suutari
President and CEO
ENCL. Interim Report 1 January - 31 March 2016
For further information, please contact:
Harri Suutari
President and CEO
tel. +358 400 384 937
Markku Honkasalo
CFO
tel. +358 10 403 2710
Componenta is a metal sector company with international operations and production plants located in Finland, Turkey, the Netherlands and Sweden. The net sales of Componenta were EUR 495 million in 2015 and its share is listed on Nasdaq Helsinki. The Group employs approx. 4,250 people. Componenta specializes in supplying cast and machined components and total solutions made of them to its global customers, who are manufacturers of vehicles, machines and equipment.
