Vacon Plc, Stock Exchange Release, 25 October 2007 at 10.00 am
Need to raise efficiency in use of energy maintains Vacon's growth
July-September summary:
* Order intake totalled MEUR 58.4, growth of 22.7 % from
the corresponding period in the previous year (MEUR
47.6).
* Revenues totalled MEUR 58.7, growth of 23.3 % (MEUR 47.6).
* Operating profit was MEUR 7.8, an increase of 34.5 % (MEUR
5.8).
* Cash flow from operations was MEUR 7.9 (MEUR 6.6).
* Earnings per share was EUR 0.34 (EUR 0.28), growth from
the previous year of 21.4 %.
January-September summary:
* Order intake totalled MEUR 174.5, growth of 23.5 % from
the corresponding period in the previous year (MEUR
141.3).
* Revenues totalled MEUR 170.8, growth of 26.1 % (MEUR
135.4).
* Operating profit was MEUR 21.7, an increase of 26.9 %
(MEUR 17.1).
* Cash flow from operations was MEUR 14.1 (MEUR 13.3).
* Earnings per share was EUR 0.97 (EUR 0.78), growth from
the previous year of 24.4 %.
The growth in demand for AC drives which has continued for several
years shows no sign of slowing down. Public discussion of climate
change and efficient use of energy is increasing the AC drive market,
which according to the latest market survey is growing at a rate of
nine per cent.
Vacon's operations continued according to plan in the third quarter.
Orders as well as revenues grew strongly, by more than 20 per cent.The company's profitability also improved from the corresponding
period in the previous year. By market area, growth in revenues in
Europe was 31 per cent and in Asia 19 per cent. Revenues in North
America were at the same level as one year ago. Revenues in North
America were hit by the weakening of the US dollar against the euro
and by low market growth.
Operating profit in the third quarter was more than 34 per cent
higher than a year ago and the operating profit as a percentage of
revenues increased from 12.2 per cent last year to 13.3 per cent,
despite the weakening of the US dollar. Earnings per share rose to
EUR 0.34, an increase from the previous year of EUR 0.06.
Result in January-September and equity structure
MEUR 7-9/ 7-9/ 1-9/ 1-9/ Change, 1-12/
2007 2006 2007 2006 % 2006
Revenues 58.7 47.6 170.8 135.4 26.1 186.4
EBITDA 8.9 6.9 25.2 20.2 24.8 27.3
Depreciation -1.1 -1.1 -3.5 -3.1 12.9 -4.2
Operating profit 7.8 5.8 21.7 17.1 26.9 23.1
Profit before tax 7.5 5.8 21.2 16.8 26.2 22.7
Profit for period 5.4 4.3 15.2 12.1 25.6 16.1
Revenues in the first nine months of 2007 totalled EUR 170.8 million
and operating profit was EUR 21.7 million. The operating profit as a
percentage of revenues after nine months was 12.7 per cent, compared
with 12.6 per cent in the corresponding period in the previous year.
Profitability improved considerably from the previous year in both
the second and the third quarter.
The balance sheet total was EUR 97.8 (88.1) million. The equity ratio
was 60.5 per cent. The Group's cash flow from operations for the
January-September period was EUR 14.1 (13.3) million. Total
receivables increased EUR 8.3 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 -8.0
(-8.8) million and gearing was -13.8 per cent (-18.0 per cent).
The Group's order book stood at EUR 33.4 (24.6) million. The order
book has risen by EUR 3.7 million since the beginning of the year.
Market position
Vacon Group revenues by market area were as follows:
MEUR 7-9/ % 7-9/ % 1-9/ % 1-9/ % 1-12/ %
2007 2006 2007 2006 2006
Europe 42.5 72.5 32.4 68.1 124.3 72.8 94.3 69.6 129.7 69.6
North
America 10.2 17.4 10.3 21.6 27.9 16.3 27.4 20.2 37.9 20.3
Asia and
Australia 5.0 8.5 4.2 8.8 14.6 8.6 11.6 8.6 15.8 8.5
Other
countries 0.9 1.6 0.7 1.5 4.0 2.3 2.1 1.6 3.0 1.6
Total 58.7 100.0 47.6 100.0 170.8 100.0 135.4 100.0 186.4 100.0
Vacon's revenues in the January-September period grew in Europe by 32
per cent. In Asia and Australia revenues grew 26 per cent, but in
North America growth in revenues was just 2 per cent.
Vacon Group's revenues by distribution channel were as follows:
MEUR 7-9/ % 7-9/ % 1-9/ % 1-9/ % 1-12/ %
2007 2006 2007 2006 2006
Direct sales 24.6 42.0 19.1 40.1 71.9 42.1 55.5 41.0 76.4 41.0
Distribu-tors 7.9 13.5 6.0 12.6 23.0 13.5 18.0 13.3 24.8 13.3
OEM 14.5 24.7 10.9 22.9 43.6 25.5 32.0 23.6 43.9 23.6
Brand Label 11.6 19.8 11.6 24.4 32.3 18.9 29.9 22.1 41.4 22.2
Total 58.7 100.0 47.6 100.0 170.8 100.0 135.4 100.0 186.4 100.0
The Group's revenues by distribution channel increased in the first
nine months of the year as follows: OEM 36 per cent, direct sales 30
per cent, distributors 28 per cent and brand label customers 8 per
cent.
Vacon Group structure
No significant changes took place in the Group structure during the
third quarter.
Research and development
R&D expenditure during the first nine months of the year totalled EUR
10.1 (9.1) million, and EUR 1.1 (0.2) million of this was capitalized
as development costs. R&D costs accounted for 5.9 per cent (6.7 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 nine months of the
year totalled EUR 4.9 (6.5) million. Expenditure focused on
increasing and maintaining production capacity and on information
systems.
Work on enlarging Vacon's Vaasa factory is starting during 2007 with
a 1000 m² expansion of production. Work on the 5000 m² expansion of
office space and a further 6000 m² of production premises is planned
to start during 2008.
Organization and personnel
The number of Vacon personnel has increased by 134 since the
beginning of the year. At the end of September the Group employed 809
(626) people, of whom 515 (418) were in Finland and 294 (208) in
other countries. The table below shows the average number of Vacon
personnel during the review period:
1-9/2007 1-9/2006 1-12/2006
Office personnel 504 434 424
Factory personnel 241 169 194
TOTAL 745 603 618
Vacon is currently recruiting several dozen people in Vaasa during
2007.
Shares and shareholders
Vacon had a market capitalization at the end of September of EUR
533.9 million. The closing share price on 30 September 2007 was EUR
35.05. The lowest share price during the January-September period was
EUR 24.60 and the highest was EUR 36.01. A total of 6,050,187 Vacon
shares were traded in the January-September period, in monetary terms
EUR 177.8 million.
Vacon's main shareholders on 30 September 2007 were:
Number of shares Holding, %
Ahlström Capital Oy 2 297 996 15.0
Tapiola Mutual Pension Insurance Company 584 500 3.8
Vaasa Engineering Oy 426 433 2.8
Koskinen Jari 358 590 2.3
Holma Mauri 347 171 2.3
Ehrnrooth Martti 325 923 2.1
Tapiola Group companies 325 300 2.1
Niemelä Harri 309 840 2.0
Karppinen Veijo 209 349 1.4
Mutual Insurance Company Pension Fennia 185 000 1.2
Nominee registered 4 800 129 31.4
Others 5 124 769 33.5
Total 15 295 000 100.0
Vacon Plc's own shares -62 812
Shares in circulation 15 232 188
On 30 September 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 September 2007 Vacon Plc held a total of 62,812 of its own
shares that were 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.
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 are good. Based on market surveys Vacon
estimates that the AC drive market is currently growing at an annual
rate of about 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, any disruptions in Finland's labour market,
difficulties with the availability of key components, and the
weakening of the dollar.
Vacon forecasts that revenues in 2007 will grow by more than 20 per
cent and profitability will improve slightly from 2006.
Events after the end of the review period
Vacon announced on 11 October that it had signed a major contract
with Finnish company The Switch, which has operations in Vaasa and
Lappeenranta. The contract reinforces Vacon's position in the rapidly
growing wind power market and has a value of several million euros.
The wind power market has a value of EUR 15 billion today, but this
is expected to nearly double over the next two years. Global
investment in renewable forms of energy totalled USD 45 billion last
year.
Following financial review
Vacon will publish its financial statements for 2007 on Thursday, 7
February 2008 at 9.00 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 in Brief
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, 25 October 2007
VACON PLC
Board of Directors
For more information please contact:
* Mr Vesa Laisi, CEO, phone: +358 (0)40 8371 510
* Mr Mika Leppänen, CFO, phone: +358 (0)40 8371 235
Conference for the media and analysts
Vacon will hold a briefing for analysts and the media on 25 October
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 25 October 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. Theconference ID code is "Vacon Oyj". To hear a recording of the
conference, available for two working days, call +44 207 031 4064, ID
code 735874. Conference link:
http://wcc.webeventservices.com/view/wl/r.htm?e=36280&s=1&k=AEB9E13729168463DA5B20BE26019108&cb=genesys
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
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2007 2006 2007 2006 2006
Revenues 58.7 47.6 170.8 135.4 186.4
EBITDA 8.9 6.9 25.2 20.2 27.3
Depreciation -1.1 -1.1 -3.5 -3.1 -4.2
Operating profit 7.8 5.8 21.7 17.1 23.1
Financial income 0.1 0.2 0.3 0.4 0.3
Financial expenses -0.4 -0.2 -0.8 -0.5 -0.7
Share of result of associated companies 0.0 0.0 0.0 -0.1 0.0
Profit before taxes 7.5 5.8 21.2 16.8 22.7
Income taxes -2.1 -1.5 -6.0 -4.7 -6.6
Profit for the period 5.4 4.3 15.2 12.1 16.1
Attributable to:
Equity holders of the parent 5.3 4.2 14.8 11.9 15.8
Minority interest 0.1 0.1 0.4 0.2 0.3
Earnings per share, euro 0.34 0.28 0.97 0.78 1.04
Earnings per share diluted, euro 0.34 0.28 0.97 0.78 1.04
Consolidated balance sheet, MEUR
30.9.2007 30.9.2006 31.12.2006
ASSETS
Intangible assets 8.7 6.5 7.8
Tangible assets 13.2 13.7 13.3
Investments 1.8 1.3 1.4
Loans receivable and other receivables 0.4 0.8 0.8
Deferred tax assets 1.5 1.3 1.1
Total non-current assets 25.6 23.6 24.3
Inventories 14.3 11.8 11.7
Trade and other receivables 46.1 37.2 37.8
Cash and cash equivalents 11.8 15.4 13.0
Total current assets 72.2 64.4 62.6
Total assets 97.8 88.1 86.9
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent company 57.2 48.0 52.0
Minority interest 1.0 0.7 1.0
Total equity 58.2 48.7 53.0
Deferred tax liabilities 1.4 0.8 1.2
Employee benefits 0.8 0.7 0.7
Interest-bearing liabilities 1.6 2.0 1.8
Total non-current liabilities 3.8 3.5 3.7
Trade and other payables 30.2 28.7 25.6
Income tax liabilities 2.5 1.9 1.5
Provisions 0.9 0.6 0.7
Interest-bearing liabilities 2.1 4.7 2.4
Total current liabilities 35.7 35.9 30.2
Total equity and liabilities 97.8 88.1 86.9
Q3/2007 calculation of changes in shareholders' equity, MEUR
Minor Total
-ity equi-
Attributable to equity holders of the parent inter- ty
est
Share Share Own Trans- Revalu Re- Total
capi- pre- shares la- -ation tained
tal mium tion fund earn-
diffe- ings
rence
Shareholders'
equity
31.12.2006 3.1 5.0 -1.2 -0.1 0.1 45.2 52.0 1.0 53.0
Cash flow
hedging:
Hedging
result
allocated to
equity 0.1 0.1 0.1
Hedging
result
carried to
income
statement -0.1 -0.1 -0.1
Translation
difference 0.0 0.0 0.0
Profit/loss
of
from hedging
net
investment 0.1 0.1 0.1
Recognized
tax 0.0 0.0 0.0
Other
changes 0.2 0.2 0.0 0.2
Net income
recorded
directly
in equity 0.0 0.0 0.0 0.1 0.0 0.2 0.2 0.0 0.3
Profit
for the
period 14.8 14.8 0.4 15.2
Total income
and expenses
recorded for
the period 0.0 0.0 0.0 0.1 0.0 15.0 15.1 0.4 15.5
Dividends
paid -9.9 -9.9 -0.3 -10.2
Shareholders'
equity
30.9.2007 3.1 5.0 -1.2 -0.1 0.1 50.3 57.2 1.0 58.2
Q3/2006 Calculation of changes in shareholders' equity, MEUR
Minor Total
-ity equity
Attributable to equity holders of the parent inter-
est
Share Share Own Transla- Revalu Re- To-
capital Pre- shares tion -ation tained tal
mium diffe- fund earn-rence ings
Shareholders'
equity
31.12.2005 3.1 5.0 -1.2 -0.1 -0.1 35.6 42.3 0.5 42.8
Cash flow
hedging:
Hedging
result
allocated
to equity 0.0 0.0 0.0
Hedging
result
carried to
income
statement 0.1 0.1 0.1
Translation
difference -0.1 -0.1 -0.1
Recognized
tax 0.0 0.0 0.0
Other
changes 0.1 0.1 0.1
Net income
recorded
directly
in equity 0.0 0.0 0.0 -0.1 0.1 0.1 0.1 0.0 0.1
Profit for
the period 11.9 11.9 0.2 12.1
Total income
and expenses
recorded
for the
period 0.0 0.0 0.0 -0.1 0.1 12.0 12.0 0.2 12.2
Dividends
paid -6.3 -6.3 -6.3
Share
repurchase 0.0 0.0 0.0
Shareholders'
equity
30.9.2006 3.1 5.0 -1.2 -0.2 0.0 41.3 48.0 0.7 48.7
Consolidated cash flow statement, MEUR
30.9.2007 30.9.2006 31.12.2006
Profit for the period 15.2 12.1 16.1
Depreciation 3.5 3.1 4.2
Other adjustments 6.7 4.8 6.9
Change in working capital -5.8 -2.3 -5.7
Cash flow from financial items and tax -5.5 -4.4 -6.4
Cash flow from operating activities 14.1 13.3 15.1
Investments in tangible and intangible
assets -4.4 -4.9 -7.0
Proceeds from disposal of tangible and
intangible assets 0.1 0.4 0.5
Loans granted 0.0 0.0 -1.4
Other investments -0.5 -1.7 -0.5
Repayment of loan receivables 0.2 0.0 0.0
Proceeds from disposal of other
investments 0.0 0.0 0.3
Change in long-term loan receivables 0.0 0.1 0.0
Cash flow from investing activities -4.7 -6.1 -8.1
Share issue 0.0 0.0 0.1
Proceeds from long-term borrowings 0.0 0.5 0.4
Repayment of long-term loans -0.1 -0.1 -0.2
Proceeds from short-term borrowings 2.0 5.0 5.0
Repayment of short-term loans -2.0 -2.1 -4.3
Financial leasing payments -0.3 -0.2 -0.3
Dividends paid -10.2 -6.3 -6.3
Cash flow from financing activities -10.6 -3.3 -5.5
Change in liquid funds -1.1 3.9 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
30.9.2007 30.9.2006 31.12.2006
Equity per share, EUR 3.75 3.15 3.42
Equity ratio, % 60.5 55.6 61.7
Gross capital expenditure, MEUR 4.9 6.5 8.5
Gross capital 2.9 4.8 4.6
expenditure as %
of revenues
Interest-bearing net liabilities,
MEUR -8.0 -8.8 -8.8
Net gearing, % -13.8 -18.0 -16.6
Order book, MEUR 33.4 24.6 29.7
Adjusted average
number of shares
during the period 15 225 247 15 207 913 15 209 303
Number of shares
at end of period 15 232 188 15 213 428 15 213 428
Average number
of personnel 745 603 618
Commitments and contingencies, MEUR
30.9.2007 30.9.2006 31.12.2006
Commitments and contingencies 1.2 2.4 1.8
Financing commitments 1.0 1.5 1.5
Currency derivatives, MEUR
30.9.2007 30.9.2006 31.12.2006
Forward exchange contracts
Fair value 0.4 0.0 0.1
Nominal value 13.4 15.8 14.9
Calculation of financial ratios
Profit for period attributable to equity
holders of parent company
Earnings per share = --------------------------------------------
Adjusted average number of shares
Equity attributable to equity
holders of parent company
Equity per share = ----------------------------------
Adjusted number of shares
at end of period
Shareholders' equity
(incl. minority interest) x 100
Equity ratio = ------------------------------------
Balance sheet total -
advances received
(Interest-bearing liabilities -
cash, bank balances and financial assets) x 100
Net gearing = ------------------------------------------
Shareholders' equity
(incl. minority interest)
VACON PLC FINANCIAL BULLETIN 1 JANUARY - 30 SEPTEMBER 2007
| Source: Vacon.
Attachments
