Espoo, Finland, 2012-08-30 08:03 CEST (GLOBE NEWSWIRE) --
EFORE PLC Interim Report August 30, 2012 9 a.m.
Period under the review in brief (November 1, 2011 — July 31, 2012)
- Net sales totaled EUR 55.4 million (EUR 66.8 million)
- Results from operating activities amounted to EUR -1.9 million (EUR 3.3 million)
- Profit before taxes was EUR -2.5 million (EUR 4.0 million)
- Profit for the period was EUR -2.2 million (EUR 3.0 million)
- Earnings per share was EUR -0.05 (EUR 0.08)
Third quarter in brief (May 1, 2012 — July 31, 2012)
- Net sales totaled EUR 21.2 million (EUR 24.3 million)
- Results from operating activities amounted to EUR 0.3 million (EUR 1.8 million)
- Profit before taxes was EUR 0.2 million (EUR 2.3 million)
- Profit for the period was EUR 0.2 million (EUR 2.0 million)
- Earnings per share was EUR 0.00 (EUR 0.05)
Vesa Vähämöttönen, Efore’s President and CEO:
“After the challenging start of the fiscal year I am satisfied that results from the operating activities have returned to positive figures. Net sales increased about 10 % from the previous quarter. As expected the second half of the fiscal year has started stronger than the first one.”
NOVEMBER – JULY NET SALES AND FINANCIAL DEVELOPMENT
Net sales for the period under the review totaled EUR 55.4 million (EUR 66.8 million). Net sales by customer group was as follows: Telecommunication 79.0 % (80.0 %) and industrial electronics 21.0 % (20.0 %). Geographically Efore’s deliveries were to the following areas: EMEA EUR 29.7 million (EUR 23.7 million), APAC EUR 18.1 million (EUR 32.0 million), Finland EUR 6.8 million (EUR 9.0 million) and the Americas EUR 0.9 million (EUR 2.1 million) which totaled EUR 55.4 million (EUR 66.8 million).
Final geographical distribution of Efore’s products deviates from the before mentioned as Efore’s customers distribute further the products from the logistics centres to other markets.
The results from operating activities amounted to EUR -1.9 million (EUR 3.3 million).
Results from operating activities improved clearly towards the end of the period under review even though it was negatively affected by low demand and unfavorable product mix during the first half of the fiscal year.
Results from operating activities include one-time net income of approximately EUR0.1 million related to discontinued operations of Estonia factory. Efore estimates the total one-time costs related to Estonia factory closure to be approximately EUR 1.5 million and these will be reported for the fourth quarter when final costs can be reliably estimated.
NET SALES AND FINANCIAL DEVELOPMENT FOR THE THIRD QUARTER
Net sales for the third quarter totaled EUR 21.2 million (EUR 24.3 million). Net sales by customer group was as follows: Telecommunication 81.3 % (81.5 %) and industrial electronics 18.7 % (18.5 %). Geographically Efore’s deliveries were to the following areas: EMEA EUR 12.6 million (EUR 9.3 million), APAC EUR 6.0 million (EUR 10.8 million), Finland EUR 2.4 million (EUR 3.4 million) and the Americas EUR 0.2 million (EUR 0.8 million) which totaled EUR 21.2 million (EUR 24.3 million). Final geographical distribution of Efore’s products deviates from the before mentioned as Efore’s customers distribute further the products from the logistics centres to other markets.
The results from operating activities amounted to EUR 0.3 million (EUR 1.8 million).
The results from operating activities improved significantly compared to the previous quarter due to net sales increase and more favorable product mix. However although product mix was not yet optimal during the third quarter.
BUSINESS DEVELOPMENT
Investment in product and technology development during the period under review was EUR 5.6 million (EUR 5.1 million) representing 10.1 % (7.7 %) of net sales.
Strong demand of network market especially in North America increased net sales of Efore’s telecom sector.
Demand for Efore’s industrial electronics continued on the same level as previously.
Efore negotiates with Chinese companies in electric vehicles (EV) industry about cooperation models to reach the access to the market. Development of EV power electronics product family is progressing as planned. During the period under review investments in EV business were EUR 0.3 million and operating costs were EUR 0.6 million.
The closing of Estonia factory and production transfer to China are proceeding as planned.
INVESTMENTS
Group investments in fixed assets during the period under review amounted to EUR 1.3 million (EUR 1.2 million) of which product development costs were EUR 0.3 million.
At the end of the period under review capitalized product development costs amounted to EUR 0.7 million (EUR 0.7 million).
FINANCIAL POSITION
The Group’s financial position during the period under review was good.
The consolidated interest-bearing cash reserves exceeded interest-bearing liabilities by EUR 1.8 million (EUR 2.3 million). The consolidated net financial expenses were EUR -0.1 million (EUR 0.4 million). The cash flow from business operations was EUR 1.8 million (EUR 1.6 million). The cash flow after investments was EUR 0.5 million (EUR -0.2 million).
The Group’s solvency ratio was 45.1 % (46.1 %) and the gearing was –8.5 % (-9.7 %).
Liquid assets excluding undrawn credit facilities totaled EUR 7.5 million (EUR 5.9 million) at the end of the period under review. The balance sheet total was EUR 47.4 million (EUR 50.4 million).
PERSONNEL
The number of the Group’s own personnel including temporary personnel averaged 895 (951) during the period under review and at the end of the period under review it was 949 (1055). At the end of July 2012 more than 91% of the personnel worked outside of Finland.
SHARES, SHARE CAPITAL AND SHAREHOLDERS
The total number of Efore Plc shares at the end of the period under review was 42.529.648 and the registered share capital was EUR 15.000.000.
In April-June 2012 the company acquired total 713 660 pcs of Efore shares according to the authorization of Annual General Meeting on 9 February 2012.
The amount of the Group's own shares was 1.218.544 at the end of the period under review. In addition to this Efore Management Oy, a company belonging to Efore group owned 2.358.242 pcs of Efore shares.
The highest share price during the period under review was EUR 0.94 and the lowest price was EUR 0.60. The average price during the period under review was EUR 0.75 and the closing price was EUR 0.60. The market capitalization calculated at the final trading price during the period under review was EUR 23.4 million.
The total number of Efore shares traded on the Nasdaq OMX Helsinki during the period under review was 7.4 million and their turnover value was EUR 5.6 million. This accounted for 19.0 % of the total number of shares. The number of shareholders totaled 3313 (3332) at the end of the period under review.
ACCOUNTING POLICIES
The report has been drawn up in accordance with IAS 34 Standard on Interim Financial Reporting and the Group's accounting principles presented in the 2011 annual report. The information in this release is unaudited.
Exchange rate differences have been reported in financial items from the beginning of the fiscal year. The figures for the previous year have been adjusted in accordance with the new practice.
All the figures in the report have been rounded up/down, for which reason the total of the individual figures when added together may be different from the total shown.
SHORT-TERM RISKS AND FACTORS OF UNCERTAINTY
The market typical fluctuation in demand can cause rapid changes in Efore’s business. The most significant business risks are related to the success of key customers in their markets and to Efore's delivery capability for the key customers.
Progress of the EV power electronics projects depends on the customers’ own project schedules and the establishment of the whole market.
It has been recognized that global economic development may effect negatively on Efore’s business environment
A more comprehensive report on risk management is presented on the company's web-sites.
EVENTS AFTER PERIOD UNDER REVIEW
In order to improve product development efficiency and processes Efore centralized the product development in China into Suzhou and closed Shenzhen office, which employed less than 20 persons, in August 2012. One-time costs related to closing of the Shenzhen office will be approximately EUR 0.1 million and these will be reported for the fourth quarter of the current fiscal year.
OUTLOOK
The fundamentals for long-term positive development of wireless network equipment industry are expected to remain unchanged and Efore estimates its position in this main market to remain strong.
FINANCIAL ESTIMATE FOR THE FISCAL YEAR 2012
The company estimates net sales for fiscal year 2012 to stay below the fiscal year 2011 level and result of operating activities without one-time costs to be slightly negative.
TABLES
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||||
| EUR million | May/12- | May/11- | Nov./11- | Nov./10- | Nov./10- |
| July/12 | July/11 | July/12 | July/11 | Oct./11 | |
| 3 months | 3 months | 9 months | 9 months | 12 months | |
| Net sales | 21,2 | 24,3 | 55,4 | 66,8 | 88,0 |
| Change in inventories of | |||||
| finished goods and work in progress | 0,8 | 0,4 | 2,1 | 3,1 | 2,5 |
| Other operating income | 0,1 | 0,0 | 0,6 | 0,1 | 0,2 |
| Materials and services | -15,2 | -16,9 | -40,5 | -48,7 | -62,0 |
| Employee benefits expenses | -4,0 | -3,7 | -11,5 | -11,0 | -15,1 |
| Depreciation | -0,6 | -0,6 | -2,2 | -1,9 | -2,6 |
| Other operating expenses | -2,1 | -1,7 | -5,9 | -5,1 | -6,9 |
| RESULTS FROM OPERATING ACTIVITIES | 0,3 | 1,8 | -1,9 | 3,3 | 4,1 |
| % net sales | 1,2 | 7,5 | -3,5 | 5,0 | 4,6 |
| Financing income | 0,4 | 0,5 | 1,0 | 0,9 | 1,3 |
| Financing expenses | -0,5 | -0,1 | -1,6 | -0,3 | -1,0 |
| Share of profit of associated | |||||
| companies | 0,0 | 0,0 | 0,0 | 0,1 | 0,1 |
| PROFIT (-LOSS) BEFORE TAX | 0,2 | 2,3 | -2,5 | 4,0 | 4,5 |
| % net sales | 0,7 | 9,3 | -4,6 | 6,0 | 5,1 |
| Tax on income from operations | 0,0 | -0,3 | 0,3 | -1,0 | -1,0 |
| PROFIT (-LOSS) FOR THE PERIOD | 0,2 | 2,0 | -2,2 | 3,0 | 3,4 |
| OTHER COMPREHENSIVE INCOME: | |||||
| Translation differences | 0,9 | 0,6 | 1,9 | 0,0 | 0,4 |
| Total comprehensive income | 1,1 | 2,6 | -0,3 | 3,0 | 3,9 |
| NET PROFIT/LOSS ATTRIBUTABLE | |||||
| To equity holders of the parent | 0,2 | 2,0 | -2,2 | 3,0 | 3,5 |
| To non-controlling interests | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 |
| TOTAL COMPREHENSIVE INCOME | |||||
| ATTRIBUTABLE TO: | |||||
| Equity holders of the parent | 1,1 | 2,6 | -0,3 | 3,0 | 3,9 |
| Non-controlling interests | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 |
| EARNINGS PER SHARE CALCULATED ON PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT: | |||||
| Earnings per share, basic,eur | 0,00 | 0,05 | -0,05 | 0,08 | 0,09 |
| Earnings per share, diluted, eur | 0,00 | 0,05 | -0,05 | 0,08 | 0,09 |
| INFORMATION ABOUT GEOGRAPHICAL | May/12- | May/11- | Nov./11- | Nov./10- | Nov./10- |
| AREAS, EUR million | July/12 | July/11 | July/12 | July/11 | Oct./11 |
| 3 months | 3 months | 9 months | 9 months | 12 months | |
| Americas | 0,2 | 0,8 | 0,9 | 2,1 | 2,8 |
| EMEA | 12,6 | 9,3 | 29,7 | 23,7 | 32,9 |
| Finland | 2,4 | 3,4 | 6,8 | 9,0 | 11,7 |
| APAC | 6,0 | 10,8 | 18,1 | 32,0 | 40,7 |
| Total | 21,2 | 24,3 | 55,4 | 66,8 | 88,0 |
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||
| EUR million | July 31, | July 31, | change | Oct. 31, |
| 2012 | 2011 | % | 2011 | |
| ASSETS | ||||
| NON-CURRENT ASSETS | ||||
| Intangible assets | 1,1 | 1,2 | 1,4 | |
| Tangible assets | 6,9 | 5,4 | 6,8 | |
| Investments in associates | 0,0 | 0,0 | 0,0 | |
| Other long-term investments | 0,0 | 0,0 | 0,0 | |
| NON-CURRENT ASSETS | 8,0 | 6,6 | 20,3 | 8,2 |
| CURRENT ASSETS | ||||
| Inventories | 15,4 | 14,7 | 13,0 | |
| Trade receivables and other receivables | 15,9 | 22,7 | 17,3 | |
| Tax receivable, income tax | 0,7 | 0,4 | 0,1 | |
| Cash and cash equivalents | 7,5 | 5,9 | 11,2 | |
| CURRENT ASSETS | 39,4 | 43,8 | -10,1 | 41,7 |
| ASSETS | 47,4 | 50,4 | -6,1 | 49,9 |
| EQUITY AND LIABILITIES | ||||
| EQUITY | ||||
| Share capital | 15,0 | 15,0 | 15,0 | |
| Treasury shares | -2,5 | -2,1 | -2,1 | |
| Other reserves | 19,8 | 21,9 | 21,9 | |
| Translation differences | 2,5 | 0,2 | 0,6 | |
| Retained earnings | -13,7 | -12,0 | -11,6 | |
| Equity attributable to equity holders of the parent | 21,1 | 23,0 | 23,8 | |
| Equity attributable to non-controlling interests | 0,3 | 0,3 | 0,3 | |
| EQUITY | 21,4 | 23,2 | -8,1 | 24,1 |
| NON-CURRENT LIABILITIES | ||||
| Deferred tax liabilities | 0,0 | 0,0 | 0,0 | |
| Interest-bearing liabilities | 1,8 | 2,6 | 3,3 | |
| NON-CURRENT LIABILITIES | 1,8 | 2,6 | -31,7 | 3,3 |
| CURRENT LIABILITIES | ||||
| Interest-bearing liabilities | 3,8 | 1,0 | 4,1 | |
| Trade payables and other liabilities | 20,2 | 22,8 | 17,9 | |
| Tax liabilities | 0,0 | 0,3 | 0,3 | |
| Provisions | 0,2 | 0,4 | 0,3 | |
| CURRENT LIABILITIES | 24,2 | 24,5 | 22,5 | |
| LIABILITIES | 26,0 | 27,2 | 25,8 | |
| TOTAL EQUITY AND LIABILITIES | 47,4 | 50,4 | -6,1 | 49,9 |
| GROUP KEY FIGURES, EUR million | May/12- | May/11- | Nov./11- | Nov./10- | Nov./10- |
| July/12 | July/11 | July/12 | July/11 | Oct./11 | |
| 3 months | 3 months | 9 months | 9 months | 12 months | |
| Earnings per share, basic,eur | 0,00 | 0,05 | -0,05 | 0,08 | 0,09 |
| Earnings per share, diluted, eur | 0,00 | 0,05 | -0,05 | 0,08 | 0,09 |
| Equity per share, eur | 0,54 | 0,58 | 0,54 | 0,58 | 0,60 |
| Solvency ratio,% | 45,1 | 46,1 | 45,1 | 46,1 | 48,3 |
| Return on equity-%(ROE) | 3,2 | 36,1 | -12,9 | 18,2 | 15,5 |
| Return on investment-%(ROI) | 3,7 | 37,3 | -10,1 | 22,2 | 17,5 |
| Gearing, % | -8,5 | -9,7 | -8,5 | -9,7 | -16,3 |
| Net interest-bearing liabilities | -1,8 | -2,3 | -1,8 | -2,3 | -3,9 |
| Investments (intangible and tangible assets) | 0,1 | 1,0 | 1,3 | 2,5 | 4,4 |
| as percentage of net sales | 0,5 | 4,1 | 2,3 | 3,7 | 5,0 |
| Average personnel | 947 | 1028 | 895 | 951 | 960 |
| CONSOLIDATED STATEMENT OF CASH FLOWS | Nov./11- | Nov./10- | change | Nov./10- |
| EUR million | Jul. /12 | Jul./11 | % | Oct./11 |
| Cash flows from operating activities | ||||
| Cash receipts from customers | 61,0 | 66,1 | 91,9 | |
| Cash paid to suppliers and employees | -58,8 | -63,5 | -86,4 | |
| Cash generated from operations | 2,3 | 2,5 | 5,5 | |
| Interest paid | 0,0 | -0,1 | -0,1 | |
| Interest received | 0,0 | 0,0 | 0,1 | |
| Other financial items | -0,5 | -0,2 | -0,5 | |
| Income taxes paid | 0,0 | -0,7 | -0,6 | |
| Net cash from operating activities (A) | 1,8 | 1,6 | 11,1 | 4,3 |
| Cash flows from investing activities | ||||
| Purchase of tangible and intangible assets | -1,3 | -2,3 | -4,3 | |
| Proceeds from sale of tangible and intangible assets | 0,1 | 0,0 | 0,1 | |
| Disposal of associated companies | 0,0 | 0,5 | 0,5 | |
| Dividend received | 0,0 | 0,0 | 1,0 | |
| Net cash used in investing activities (B) | -1,2 | -1,8 | -33,4 | -2,8 |
| Cash flows from financing activities | ||||
| Capital investment by the minority | 0,0 | 0,0 | 0,0 | |
| Purchase of treasury shares | -0,4 | 0,0 | 0,0 | |
| Proceeds from short-term borrowings | 1,8 | 0,4 | 3,3 | |
| Repayment of short-term borrowings | -2,4 | 0,0 | 0,0 | |
| Proceeds from long-term borrowings | 0,0 | 0,5 | 1,1 | |
| Repayment of long-term borrowings | -1,5 | -0,5 | -0,5 | |
| Financial leasing repayment | -0,1 | -0,1 | -0,2 | |
|
Distribution of assets from the invested unrestricted reserve |
-2,1 | 0,0 | 0,0 | |
| Net cash used in financing activities (C) | -4,7 | 0,3 | 3,7 | |
| Net increase/decrease in cash and cash | ||||
| equivalents (A+B+C) | -4,2 | 0,0 | 5,3 | |
| Cash and cash equivalents at beginning of period on Nov.1 | 11,2 | 5,9 | 5,9 | |
| Net increase/decrease in cash and cash equivalents | -4,2 | 0,0 | 5,3 | |
| Effects of exchange rate fluctuations on cash held | 0,4 | 0,0 | 0,1 | |
| Cash and cash equivalents at end of period | 7,5 | 5,9 | 11,2 | |
| GROUP CONTINGENT LIABILITIES | July 31, | July 31, | Oct. 31, | |
| EUR million | 2012 | 2011 | 2011 | |
| Security and contingent liabilities | ||||
| For others | ||||
| Other contingent liabilities | 0,1 | 0,1 | 0,1 | |
| Operating lease commitments | ||||
| Group as lessee | ||||
| Non-cancellable minimum operating lease | ||||
| payments: | ||||
| Less than 1 year | 1,4 | 1,2 | 1,1 | |
| 1-5 years | 0,7 | 0,9 | 0,8 | |
| Fair values of derivate financial instruments | ||||
| Currency derivatives, not hedge | ||||
| Option contract | ||||
| Nominal amount | 3,3 | 2,8 | 5,2 | |
| Negative fair value | 0,0 | 0,0 | 0,0 | |
| THE FOLLOWING TRANSACTIONS WERE | July 31, | July 31, | Oct. 31, | |
| CARRIED OUT WITH RELATED PARTIES: | 2012 | 2011 | 2011 | |
| EUR million | ||||
| Associated companies | ||||
| Purchases | 0,0 | 0,0 | 0,0 | |
| Liabilities | 0,0 | 0,0 | 0,0 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
A Share capital
B Treasury shares
C Unrestricted equity reserve
D Other reserves
E Translation differences
F Retained earnings
G Equity holders of the parent
H Non-controlling interests
I Total
| EUR million | A | B | C | D | E | F | G | H | I |
| Equity | 15,0 | -2,1 | 20,9 | 1,0 | 0,1 | -15,0 | 19,9 | 0,3 | 20,2 |
| Nov.1, 2010 | |||||||||
| Comprehensive income | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 3,0 | 3,1 | 0,0 | 3,0 |
| Equity | 15,0 | -2,1 | 20,9 | 1,0 | 0,2 | -12,0 | 23,0 | 0,3 | 23,2 |
| July 31, 2011 | |||||||||
| EUR million | A | B | C | D | E | F | G | H | I |
| Equity | 15,0 | -2,1 | 20,9 | 1,0 | 0,6 | -11,6 | 23,8 | 0,3 | 24,1 |
| Nov.1, 2011 | |||||||||
| Comprehensive income | 0,0 | 0,0 | 0,0 | 0,0 | 1,9 | -2,2 | -0,2 | 0,0 | -0,3 |
|
Distribution of assets from the invested unrestricted reserve |
0,0 | 0,0 | -2,1 | 0,0 | 0,0 | 0,0 | -2,1 | 0,0 | -2,1 |
| Capital invest by the minority | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 |
| Repurchase of own shares | 0,0 | -0,4 | 0,0 | 0,0 | 0,0 | 0,0 | -0,4 | 0,0 | -0,4 |
| Equity | 15,0 | -2,5 | 18,8 | 1,0 | 2,5 | -13,7 | 21,1 | 0,3 | 21,4 |
| July 31, 2012 |
|
CALCULATION OF KEY FIGURES AND RATIOS |
||||
| Return on investment (ROI), % | = |
Profit before taxes+interest and other financing expenses / (Equity + interest-bearing liabilities, average ) |
x 100 | |
| Return on Equity (ROE), % | = | Profit/loss for the period / Equity (average ) | x 100 | |
| Current ratio | = | Current assets / Current liabilities | ||
| Solvency ratio, % | = | Equity / (Total assets - advance payments received - own shares*) | x 100 | |
| Net interest-bearing liabilities | = | Interest-bearing liabilities - financial assets at fair value through profit or loss - cash and cash equivalents | ||
| Gearing, % | = | Net interest-bearing liabilities / Equity | x 100 | |
| Earnings per share | = | Profit or loss attributable to ordinary equity holders of the parent entity/ The weighted average number of ordinary shares outstanding | ||
| Dividend per share | = | Dividend for the financial year / (Number of shares - own shares*) | ||
| Dividend payout ratio, % | = | Dividend per share / Earnings per share | x 100 | |
| Effective dividend yield, % | = | Dividend per share /Adjusted share price at balance sheet date | x 100 | |
| Equity per share | = | Equity - own shares* /Number of shares at balance sheet date | ||
| P/E-ratio | = | Adjusted share price at balance sheet date / Earnings per share | ||
| Market capitalization = | = | Adjusted share price at balance sheet date x outstanding number of shares at balance sheet date | ||
| Average personnel | = | The average number of employees at the end of each calendar month during the accounting period | ||
| All share-specific figures are based on the issue-adjusted number of shares. | ||||
| Equity is the equity owned by the holders of the parent company's shares. | ||||
|
When calculating per share performance measures equity is the equity attributable to the shareholders of the parent company, when calculating other performance measures equity includes equity attributable to the shareholders of the parent company and non-controlling interests. * There were own shares held by company July 31, 2012. |
||||
EFORE PLC
Board of Directors
For further information please contact Mr.Vesa Vähämöttönen, President and CEO, on August 30, 2012 at 9 – 11 a.m., tel. +358 9 4784 6312
Efore Plc will hold a news conference regarding the report for analysts and media on August 30, 2012 at 11 a.m. in Helsinki World Trade Center, address Aleksanterinkatu 17.
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 in Estonia. Efore is present also in Sweden. In the fiscal year ending in October 2011, consolidated net sales totaled EUR 88,0 million and the Group’s personnel averaged 960. The company's share is quoted on the Nasdaq OMX Helsinki Ltd.
www.efore.com
Mr.Vesa Vähämöttönen, President and CEO, tel. +358 9 4784 6312