Componenta Q1 2016 Interim Report

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INTERIM REPORT
1 January - 31 March 2016
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Net sales and operating
profit declined from previous
year, progress in financing
arrangements according to plan
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.
2
COMPONENTA VUOSIKERTOMUS 2015
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
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 Groupwide 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
-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
-0.2
6.5
n/m
2.3
-165.2
-2.7
5,973%
-20.4
4,272
4,253
0%
4,269
Net result, MEUR
Return on investment*), %
Return on equity*), %
Number of personnel at end of quarter, incl. leased personnel
*) 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.
3
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Componenta’s Interim Report 1 January - 31 March 2016
Net sales and operating profit declined
from previous year, progress in financing
arrangements according to plan
Developments in order book and sales
Componenta’s order book at the beginning of April was 10% lower
than in the previous year, standing at EUR 82.7 (92.3) million. The
order book comprises confirmed orders for the next two months.
Changes in the prices of recycled steel, iron and aluminium
reduced the order book by some EUR 3 million compared to the
same time in the previous year, because of lower raw material
surcharges.
The order book for the Componenta’s heavy trucks customer
sector was 5% lower than at the same time in the previous year.
Componenta sales to this customer sector were 9% lower than in
the previous year.
The order book for the construction and mining customer sector
declined 14% from the same time in the previous year. Componenta sales to this customer sector were 25% lower than in the
previous year.
The order book for the machine building customer sector declined
21% from the previous year. Componenta sales to this customer
sector were 14% lower than in the previous year.
The order book for Componenta’s agricultural machinery customer sector fell 6% from the previous year. Componenta sales to this
customer sector were 10% lower than in the previous year.
The order book for the automotive customer sector declined 8%
from the previous year. Componenta’s sales to this customer
sector were 2% lower than in the previous year.
Net sales
Componenta’s net sales in the January - March period fell 11%
to EUR 118 (133) million. Sales of Componenta’s iron products fell
some 13% in the first quarter from the previous year due mainly
to weak developments in sales of mining, construction and
agricultural machinery in the Group’s main market areas. Sales of
aluminium products remained at almost the same level as in the
previous year.
The Group’s capacity utilization rate in the review period was 61%
(62%).
Quarterly development of order book
Quarterly development of net sales
MEUR
MEUR
MEUR
120
175
100
150
600
125
500
100
400
80
60
700
75
300
50
200
20
25
100
0
0
4
Q1/16
Q3/15
Q4/15
Q1/15
Q2/15
Q3/14
Q4/14
Q1/14
Q2/14
Q3/13
Q4/13
Q1/13
Q2/13
Q3/12
Net sales, MEUR
Q4/12
Q1/12
Q2/12
Q3/11
Q4/11
Q1/11
0
Q2/11
Q1/16
Q3/15
Q4/15
Q1/15
Q2/15
Q3/14
Q4/14
Q1/14
Q2/14
Q3/13
Q4/13
Q1/13
Q2/13
Q3/12
Q4/12
Q1/12
Q2/12
Q3/11
Q4/11
Q1/11
Q2/11
40
Net sales rolling 12 months, MEUR
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Componenta’s net sales in the quarter by customer sector were
as follows: heavy trucks 33% (32%), construction and mining 15%
(17%), machine building 20% (21%), agricultural machinery 14%
(14%) and automotive 18% (16%).
in Heerlen, EUR -1.1 million, and costs for reorganizing Group
administration, EUR -0.3 million, other one-time costs net were
EUR -0.6 million.
Income taxes for the review period were EUR 0.0 (-0.8) million.
EBITDA excluding one-time items declined from the previous year
to EUR 4.3 (9.9) million. EBITDA 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. Operative exchange rate
differences weakened EBITDA by EUR -0.8 (-0.3) million.
The consolidated operating profit in the period excluding one-time
items declined from the previous year to EUR -0.1 (5.4) million. The
operating profit including these items was EUR -2.2 (4.4) million.
The Group’s net financial costs in the review period totalled EUR
-5.6 (­-5.3) million. Net financial costs were EUR 0.3 million higher
than in the previous year due to an increase in interest costs, and
the impact of these was reduced by foreign exchange gains.
*) Excluding one-time items
2
0
-2
-4
-6
-8
-10
-12
-14
Q1/16
Result
MEUR
8
6
4
2
0
-2
-4
-6
-8
Q4/15
Other Europe 5%
Result after financial items*)
Q3/15
Finland 7%
Operating profit*)
MEUR
Me
Q2/15
Other countries 6%
Q1/15
France 6%
Benelux 9%
Q1/16
Italy 6%
Turkey 13%
Q4/15
Sweden 18%
The result for the period was EUR -7.8 (-1.7) million. Basic earnings
per share were EUR -0.08 (-0.02).
Q3/15
UK 6%
Q2/15
Germany 24%
Q1/15
Net sales by market area
*) Excluding one-time items
The return on investment, excluding one-time items, was -0.2%
(6.5%) and after these items -3.3% (5.3%). Return on equity,
excluding one-time items, was -165.2 % (-2.7 %) and after these
items -220.1 % (-6.2%).
Balance sheet, financing and cash flow
The Group’s result for the period after financial items excluding
one-time items was EUR -5.8 (0.2) million, and after one-time
items EUR -7.8 (-0.9) million
During 2015 Componenta failed to meet certain conditions for its
syndicated loan agreement. For this reason at the end of December the company signed a standstill agreement with the Nordic
partners in the syndicated loan agreement, whereby the lenders
released Componenta from having to comply with certain terms of
the loan for a fixed period until the end of April 2016.
One-time items included in the operating profit for the quarter
totalled EUR -2.0 (-1.0) million. One-time costs in the operating
profit are mainly related to costs for closing down the Furan line
At the beginning of December Componenta started negotiations
towards a financing solution that would support the new strategic
alignments and ensure the strengthening of the company’s
Analysis of differences in income statement for the review period excluding one-time items from the corresponding
period in the previous year
MEUR
Q1/16
Q1/15
Net sales
118.2
133.1
Difference
-11%
Value of production
121.6
135.8
-10%
Materials
-54.9
-62.1
-11%
Variable salaries and external services
-23.1
-23.4
-1%
-3%
Other variable and fixed costs
-39.3
-40.3
Total costs
-117.3
-125.9
-7%
4.3
9.9
-57%
EBITDA
5
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
financial position and balance sheet. On 1 April 2016 the company
announced that it had reached preliminary agreement on repaying
the parent company’s secured loans. The targeted arrangement
forms a complete package which if it takes place will strengthen
the company’s balance sheet by reducing the secured loans by EUR
72 million and increasing equity by some EUR 50 million.
COMPONENTA VUOSIKERTOMUS 2015
At the end of March, the invested capital of the company was EUR
254 (342) million.
Investments
Progress has also been made in the negotiations with Turkish
banks concerning additional finance for the Turkish subsidiary and
extending the maturity dates of the financing.
Investments in production facilities in the January - March period
totalled EUR 7.1 (5.0) million, and financial lease investments
accounted for EUR 1.5 (0.2) million of these. The net cash flow
from investments was EUR -5.8 (-5.1) million, which includes the
cash flow from the Group’s investments in tangible and intangible
assets, and the cash flow from shares sold and purchased and
from the sale of fixed assets. EUR 4.2 million of the investments in
the period were in the aluminium business operations in Manisa,
Turkey, mainly to increase capacity.
The company is planning to give more detailed information about
these arrangements by 31 May 2016.
Strategy and strategic projects
It is planned to finance the arrangement for repaying the secured
loans and for safeguarding the company’s working capital by
issuing a convertible capital loan and by divesting non-core
business operations and property.
The Group has a total of EUR 152.3 million in long- and short-term
loans from banks and other financial institutions maturing in
the next 12 months. The company’s liquidity was tight in the first
quarter, which had a negative impact on the company’s production
operations. Negotiations with financial and other investment
institutions have continued during 2016.
At the end of March Componenta’s cash funds and bank receivables
totalled EUR 8.6 (7.8) million. The company had no committed credit
facilities in the end of the review period. Cash funds and bank
receivables at the end of March include funds of EUR 4.0 million that
have restrictions on the amount that may be drawn mainly relating
to progress in the investment in the aluminium foundry in Manisa.
The funds subject to these restrictions will be drawn during the
second quarter. The Group’s interest-bearing net debt totalled EUR
236 (226) million at the end of the period, when the company had no
capital notes. The figure of the corresponding period in 2015 included
the capital notes of EUR 2.0 million. The Group’s equity ratio was
2,410% (208%).
According to the strategy, Componenta will in future concentrate
on green sand technology and medium volume product series in
iron castings and on aluminium castings, and will aim to increase
the capacity usage of all its production plants.
The primary objective is a clear improvement in profitability. In
connection with this, Componenta has begun a strategic review
of the business structure, which will include the possible closure
or sale of production plants, transfers of production and other
measures aiming to significantly improve profitability.
As part of the current work on the strategy, Componenta’s management system was reorganized at the beginning of March. In
the new system the previous division structure has been removed
and business operations have been divided into five business
areas: Finland business area, Sweden business area, Netherland
business area, Turkey Iron business area and Turkey Aluminium
business area. The business areas consist of the business units i.e.
local foundries, machine shops and forges. The business areas are
also responsible for their sales.
The Group’s equity ratio at the end of March was 2.4% (22.7%).
Net cash flow from operations in the period was EUR 8.4 (-4.0)
million. The improvement in the net cash flow from operations
is due to changes in working capital, which were EUR 11.5 (-7.7)
million in the quarter. The funds tied up in working capital declined
mainly due to the increase in trade payables. Overdue trade
payables at the end of period were EUR 29.6 million. Because of the
company’s weak financial performance the situation for financing
working capital has remained tight.
Componenta makes more efficient use of capital with a program to
sell its trade receivables. Under this arrangement, some of the trade
receivables are sold without any right of recourse. The volume of
trade receivables sold at the end of March totalled EUR 87.8 (95.2)
million.
6
The renewal aims at significant cost savings and fixed costs will
be reduced by several measures. Group level sales, engineering,
quality and customer service operations are becoming part of the
business units. This change aims to develop the core competences
of the business units and to significantly improve customer
service and quality.
In Finland, personnel involvement in management has been
promoted by appointing an employee representative to each
business unit management team.
On 9 February 2016, Karkkilan Lääkärikeskus Oy, a subsidiary of
Componenta Corporation, sold its medical centre and occupational
health business, which did not belong to the Group’s core business,
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
to Mehiläinen Oy. Ownership of the medical centre transferred to
Mehiläinen as from 1 March 2016.
trucks, construction and mining machinery, and agricultural
machinery, and from the machine building industry.
Negotiations continue on the sale of Componenta Pistons, Componenta’s piston manufacturing business unit, and the assets of this
unit have been defined as assets held for sale in accordance with
IFRS. In addition the company is examining the possibility of selling
other non-core business operations and property.
Iron Business had net sales in the review period of EUR 97.6 (111.9)
million, or 12.8% less than in the previous year.
-4
-4
20
-6
-6
0
-8
-8
Q1/15
Q4/15
Q1/16
40
Q4/15
-2
Q3/15
-2
Q2/15
0
60
Q1/16
0
Q3/15
2
80
Q2/15
2
*) Excluding one-time items
The average number of personnel in the Iron Business during the
review period, including leased employees, was at the same level
than in the corresponding period in the previous year, standing at
3,212 (3,209).
Aluminium Business
The production units in the Aluminium Business are the aluminium foundry and the production unit for aluminium wheels in
Manisa, Turkey.
Aluminium Business had an order book at the beginning of April
of EUR 14.9 (17.2) million, which is 13.2% less than at the same
time in the previous year. The order book comprises orders
confirmed to customers for the next two months. The order book
for the Aluminium Business mainly comprises orders from the
automotive industry. It also supplies some products to the heavy
truck industry and for agricultural machinery.
Net sales
Operating profit*)
%
Me
5
0
3
12
2
8
1
4
0
0
Q1/16
15
10
16
Q4/15
25
20
4
Q3/15
Me
30
Q2/15
Iron Business had an order book at the beginning of April of EUR
68.6 (76.7) million, which is 10.5% less than at the same time in
the previous year. The order book comprises orders confirmed to
customers for the next two months. The order book for the Iron
Business mainly comprises orders from manufacturers of heavy
4
100
Q1/15
The business units in the Iron Business are the foundry and
machine shop in Orhangazi, Turkey; the foundries in Heerlen and
Weert in the Netherlands; the foundries in Iisalmi, Karkkila and
Pori in Finland; the machine shop in Främmestad, Sweden; as well
as pistons manufacturer Pistons in Finland, the forges in Wirsbo,
Sweden and associated company Componenta-Ferromatrix NV.
4
Q1/16
Iron Business
%%
MEUR
Q4/15
Developments in the business segments
MEUR
Q3/15
Outside the core business is Other Business, which comprises service and real estate companies in Finland, the Group’s administrative
functions, the sales and logistics company Componenta UK Ltd in
Great Britain, and the associated company Kumsan A.S. in Turkey.
Operating profit*)
120
Q2/15
Componenta’s reporting in future will be carried out in accordance
with the new reporting segments Iron Business and Aluminium
Business. New way of reporting was introduced as from 1 January
2016 and figures for comparison based on that were published
on 20 April 2016. The Iron Business comprises Componenta’s iron
foundries and machine shops in Finland, Sweden, the Netherlands
and Turkey. It also includes Componenta Pistons in Finland, the
Wirsbo forges in Sweden and associated company Componenta-Ferromatrix NV. The Aluminium Business comprises the
aluminium foundry and the wheel production unit in Turkey.
Net sales
Q1/15
Componenta clarified its management system as from 3 March
2016 as part of the current strategy activities. In the new system
the previous division structure has been removed and Componenta’s organization has been divided into five business areas that
are responsible for production and sales of iron and aluminium
components. The new business areas are the Finland business
area, Sweden business area, Netherland business area, Turkey Iron
business area and Turkey Aluminium business area. The business
areas consist of the business units i.e. local foundries, machine
shops and forges.
Q1/15
New business segments
The operating profit in the quarter excluding one-time items was
EUR -2.3 (2.7) million. The operating profit was weakened by lower
production volumes than in the previous year, by the production
stoppages caused by the tight liquidity and by the difficulties in
planning efficient production. Quality costs also rose from the
corresponding period in the previous year.
*) Excluding one-time items
7
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Aluminium Business had net sales in the quarter of EUR 21.9 (22.2)
million, which is 1.6% less than in the previous year.
The operating profit in the quarter excluding one-time items was
EUR 2.8 (2.4) million. The operating profit was slightly better than
in the previous year mainly due to lower raw material costs.
At the end of March Componenta’s share capital stood
at EUR 21.9 (21.9) million and the company had a total of
97,269,224 (97,269,224) shares. The company had 2,707 (2,586)
shareholders.
The average number of personnel in the Aluminium Business
during the review period, including leased employees, was 5%
higher than in the corresponding period in the previous year,
standing at 903 (863).
Decisions of Annual General Meeting
Other Business
Other Business comprises service and real estate companies
in Finland, the Group’s administrative functions, the sales and
logistics company Componenta UK Ltd in Great Britain, and the
associated company Kumsan A.S. in Turkey.
The Annual General Meeting of Componenta Corporation, held on
1 April 2016, adopted the annual accounts and the consolidated
annual accounts for the financial period from 1 January to 31
December 2015 and discharged the members of the Board of
Directors and the CEO from liability. In accordance with the proposal of the Board of Directors, the AGM resolved that no dividend
be paid for the financial year ended 31 December 2015.
Other Business had an operating profit in the quarter excluding
one-time items of EUR -0.5 (0.2) million.
Personnel
The Group had on average 4,268 (4,244) employees during the
quarter, including 305 (302) leased employees. The number of
Group personnel at the end of the period was 4,272 (4,253), which
includes 318 (316) leased employees.
At the end of March 62% (61%) of personnel were in Turkey, 15%
(16%) in Finland, 13% (13%) in the Netherlands, and 10% (10%) in
Sweden.
Personnel by country at end of period
Q1 2016
Q1 2015
Turkey
2,669
2,602
3%
2,642
Finland
642
669
-4%
659
Netherlands
545
544
0%
547
Sweden
416
438
-5%
421
Change 31.12.2015
Personnel by business area at end of period
Q1 2016
Q1 2015
3,229
3,216
0%
3,188
909
869
5%
911
Other Business
(excl. Group Admin.)
14
23
-39%
22
Group Administration
120
145
-17%
148
Iron Business
Aluminium
Business
Change 31.12.2015
Shares and shareholders
The shares of Componenta Corporation are quoted on NASDAQ
Helsinki. The average price during the quarter was EUR 0.56, the
8
lowest price was EUR 0.48, and the highest EUR 0.71. The quoted
price on 31 March 2016 stood at EUR 0.51 (EUR 0.86) and the share
capital had a market capitalization of EUR 49.1 (83.7) million. The
volume of shares traded during the period was equivalent to 1.8 %
(7.0%) of the share stock.
The AGM decided that the Board of Directors should have six
members and re-elected Olavi Huhtala, Olli Isotalo, Perttu
Louhiluoto, Riitta Palomäki, Matti Ruotsala and Tommi Salunen to
the Board.
The AGM decided that the chairman of the Board be paid an annual
fee of EUR 60,000 and Board members EUR 30,000. It also decided
that Board committee members be paid EUR 5,000. The travel
expenses of Board members in the financial year 1 January - 31
December 2016 are paid in accordance with the company’s travel
regulations.
The AGM elected authorized public accountants PricewaterhouseCoopers Oy as auditor.
Decisions of Extraordinary General Meeting
Componenta’s Extraordinary General Meeting on 15 April 2016
resolved to authorise the Board of Directors to decide on a share
issue and an issue of special rights entitling to shares.
The aggregate amount of shares to be issued based on the authorization, including shares received based on special rights entitling
to shares, shall not exceed 100,000,000 shares. By virtue of the
authorization the Board of the Directors may resolve to issue, for example, special rights that entitle their holder to receive new shares
or the company’s own shares for consideration in such a manner
that the subscription price of the shares is to be set off against a
receivable of the subscriber (“Convertible Bond”). The Board of the
Directors may resolve to issue new shares or to transfer treasury
shares that may be held by the company. The authorization entitles
COMPONENTA VUOSIKERTOMUS 2015
the Board of Directors to resolve on all conditions for the issuance
of shares and the issuance of special rights entitling to shares,
including the right to derogate from the pre-emptive right of the
shareholders. The authorization shall be used, for example, to
strengthen the balance sheet and financial position of the company.
Componenta Corporate has made announcements on 24 March
2016 and 1 April 2016 about financial arrangements being prepared
that will significantly strengthen the company’s balance sheet.
For this to take place, it is necessary for the Extraordinary General
Meeting held on 15 April 2016 to resolve to authorize the Board of
Directors to decide on a share issue and the issue of special rights
entitling to shares.
Share-based incentive scheme
The Extraordinary General Meeting of Componenta Corporation
held on 15 April 2016 resolved, in accordance with the proposals of
the Board of Directors, on the issuance of stock options.
The stock options are intended to form part of the incentive and
commitment program for key employees, so the Company has a
weighty financial reason for issuing the options. The stock options
will be issued gratuitously and will entitle their owners to subscribe
for a maximum total of 10,000,000 new shares in the Company or
existing shares held by the Company. The Board of Directors will
resolve on the distribution of stock options and may additionally
resolve on particular additional provisions concerning the receipt
of stock options. Stock options will be distributed only if the Company resolves to carry out the planned financing arrangements.
Board of Directors and Management
At its meeting held after the Annual General Meeting, the Board
of Directors elected Matti Ruotsala as Chairman of the Board and
Olavi Huhtala as Vice Chairman.
Componenta has an audit committee of the Board of Directors, and
the Board elected Riitta Palomäki to be chairman of this committee and Olavi Huhtala and Tommi Salunen to be ordinary members.
Componenta also has a Nomination Committee comprising shareholders or shareholder representatives, to which the three largest
shareholders in Componenta, according to the shareholder list
updated by Euroclear Finland Oy on 31 August, each appoint one
representative. The task of the Nomination Committee is each year
to prepare and present the proposals for members of the Board
of Directors and their remuneration to be made to the following
Annual General Meeting.
Componenta Group’s Corporate Executive Team in the period
1 January - 3 March 2016 comprised President and CEO Harri
Suutari, Olli Karhunen, Senior Vice President, Foundry Division,
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
Juha Alhonoja, Senior Vice President, Machine Shop Division, Sabri
Özdogan, Senior Vice President, Aluminium Division, CFO Markku
Honkasalo, Pauliina Rannikko, Senior Vice President, HR and Legal,
and Furio Scolario, Senior Vice President, Sales, Global Accounts.
In connection with the renewal of the management structure,
the composition of Componenta’s Corporate Executive Team also
changed. As from 3 March 2016 the members of the Corporate
Executive Team are: President and CEO Harri Suutari, Juha
Alhonoja, Senior Vice President, Sweden business area, Seppo
Erkkilä, Senior Vice President, Finland business area, Mika
Hassinen, Senior Vice President, Netherlands business area, Pasi
Mäkinen, Senior Vice President, Turkey, Iron business area and
Sabri Özdogan, Senior Vice President, Turkey, Aluminium business
area as well as CFO Markku Honkasalo, Pauliina Rannikko, Senior
Vice President, Human Resources and Legal and Sami Sivuranta,
Senior Vice President, Development.
Risks and business uncertainties
The most significant risks for Componenta’s business operations
are risks related to the business environment (competition and
price risk, commodity and environmental risks), operational risks
(customer and supplier risks, productivity, production and process
risks, labour market disruptions, contract and product liability risks,
personnel risks, and data security risks) as well as financial risks
(financing and liquidity risk, currency, interest rate and credit risks).
In order to manage the Group’s business operations it is essential
to secure the availability of certain raw materials, such as recycled
steel and pig iron, and of energy, at competitive prices. The cost
risk relating to raw materials is mainly managed with price agreements, and under these agreements the prices of products are
adjusted in line with the changes in raw material prices. Increases
in prices for raw materials may tie up more funds in working
capital than estimated.
The financial risks relating to Componenta’s business operations
are managed in accordance with the treasury policy approved by
the Board of Directors. The objective is to protect the Group against
unfavourable changes in the financial markets and to secure the
Group’s financial performance and financial position. More detailed
information about the management of financial risks is given in
the 2015 financial statements.
Refinancing and liquidity risks
Componenta is preparing a programme of action to safeguard the
continuity of its operations and to strengthen its financial position.
Negotiations with financial and other investment institutions have
continued during the first quarter of 2016. The arrangement the
company is aiming for forms a complete package that if carried out
will create the opportunity to start to carry out the company’s new
9
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
strategy complying with the going concern principle. The financial
arrangement is conditional and there are uncertainties relating
to carrying it out. The company has given information about the
progress being made in these financial arrangements on 11 March
2016 and on 1 April 2016. The company has the goal of giving more
detailed information about the arrangements by 31 May 2016. If
these financial arrangements are not successfully completed, the
company will have difficulties in safeguarding the continuity of its
operations. The Group has EUR 152.3 million in long- and short-term
loans that mature during the coming 12 months. The company’s
liquidity has been tight in the first quarter of 2016, which has had a
negative impact on the company’s production operations.
The Group aims to ensure the availability of financing by spreading
the repayment schedules, sources of funding and financial
instruments in the loan portfolio. The proportion of one source of
funding may not exceed a limit set in the Group Treasury Policy.
The most important sources of finance used in the Group are the
club loan from Turkish banks, trade receivables financing without
recourse, the syndicated credit facility, other bilateral short- and
long-term loan agreements with Turkish banks, lease financing,
bonds, pension loans and capital notes.
Uncertainty factors relate to the financing arrangement actually
taking place, and these are described in the accounting principles
for the financial statements and in Note 32.
COMPONENTA VUOSIKERTOMUS 2015
Developments in business environment
Demand prospects in all the Group’s customer sectors remain
uncertain.
The order book for Componenta’s heavy trucks customer sector
was 5% lower than at the same time in the previous year. Demand
in the truck industry in Europe is expected to remain at the same
level as in previous year.
The order book for Componenta’s construction and mining customer sector was 14% lower than at the same time in the previous
year. Raw material prices are expected to rise in the second half
of the year, which may increase investment in the sector. Total
demand in construction and mining in 2016 is however expected
to fall below that in the previous year.
The order book for Componenta’s machine building customer
segment was 21% lower than in the previous year. Demand within
the customer segment varies from customer to customer and in
different geographical regions.
The order book for Componenta’s agricultural machinery customer
sector was 6% lower than at the same time in the previous year.
Demand in the customer sector is expected to remain at a low level.
The order book for Componenta’s automotive customer sector was
8% lower than in the previous year. Demand in Europe is expected
to rise slightly in 2016, but demand in Turkey is expected to fall.
Currency risk
According to Componenta’s hedging policy for the transaction
position, Componenta’s currency denominated income and expense items in Turkey may be hedged in the range 0 - 100 per cent,
at the discretion of the President and CEO. In the opinion of the
company, the Turkish lira will in the long term weaken against the
euro and other main currencies due to the big difference in inflation
rates. Due to the financing negotiations in progress, at the moment
the company is having difficulties in obtaining the necessary credit
facilities for signing hedging derivatives.
Componenta’s earnings 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.
More detailed information about the risks to which Componenta
is exposed and risk management is given in the notes to the 2015
financial statements.
Helsinki, 22 April 2016
COMPONENTA CORPORATION
Board of Directors
10
COMPONENTA VUOSIKERTOMUS 2015
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
Interim report tables
Accounting principles
This unaudited interim financial statements for 31 March 2016
have been prepared in accordance with IAS 34, ‘Interim financial
reporting’ -standard. Componenta has applied the same accounting principles in this interim report as in the financial statements
for 2015 which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
Change in segment reporting
The renewal of Componenta’s management structure in March
2016 changed also the business segments reported by the Group,
and reporting in accordance with them started during the first
quarter of 2016. According to the new structure, Componenta’s business operations are divided in two reporting segments
that are Iron Business and Aluminium Business. Iron Business
includes Componenta’s iron foundries and machine shops in Finland, Sweden, the Netherlands and Turkey. In addition, the segment includes the piston manufacturer Pistons in Finland, the
Wirsbo forges in Sweden and the joint venture company Componenta-Ferromatrix NV. Aluminium Business includes the aluminium foundry and the wheels business unit located in Turkey.
Outside these core business segments, there is Other Business,
which includes the service and real estate companies in Finland, the Group’s administration functions, the Componenta UK
Ltd sales and logistics company and the associated company
Kumsan A.S.
Insider transactions
The sales to associated companies during the reporting period
amounted to EUR 0.1 (0.0) million and purchase from the associated companies amounted to EUR 0.1 (EUR 0.0) million.
Assumption of ability to continue
as a going concern
This interim financial statements have been prepared on the
going concern basis. When assessing the going concern principle, company management has taken into account the company’s strategy that is being updated and related forecasts as well
as the sources of finance available and the refinancing and liquidity risks. The company has continued negotiations during 2016 to
find a financial solution to ensure the strengthening of its financial position and balance sheet. The objective of the new financing
arrangements is to ensure the company has sufficient working
capital for the next 12 months, and to ensure the sufficient financing to carry out the strategic actions and sufficient funds for the
servicing fees for the agreed loans and for the repayment instalments. Negotiations with financial and other investment institutions are still continuing. Significant uncertainty factors relate to
the company’s liquidity situation and to the success of the financing arrangements and their influence to the company’s finan-
cial performance, and company management has taken these
factors into account when assessing the ability of the company
to continue as a going concern. Should the refinancing arrangements that are being negotiated not take place, the company will
not have sufficient working capital for the needs of the next 12
months. Should the arrangements described above not take place
on a sufficient scale, the company may not be able to realise its
assets and pay its debts as part of normal business. In the view
of the company, it is however probable that the refinancing will
be arranged. The impact of the measures in the reorganisation of
business operations arising from the strategy being drawn up, and
the inherent uncertainty factors relating to them, have been taken
into account in the presentation of balance sheet items.
Assumptions of ability to continue are described on more detailed
level in the 2015 Financial Statements.
Assets held for sale
Componenta has begun to take measures to sell a unit manufacturing pistons in Pietarsaari. The non-current tangible and intangible assets and inventory of the pistons manufacturing unit are
classified as current assets held for sale in accordance with IFRS
5. The sale of pistons manufacturing unit is expected to take place
during 2016.
One-time items and exchange rate differences
of operative balance sheet items
One-time items, described in the Report by the Board of Directors,
are exceptional transactions that are not related to normal business operations.
The most common one-time items are capital gains and losses,
inefficiencies in production related to plant closures, additional
write-downs, or reversals of write-downs, expenses due to accidents and natural disasters, provisions for planned restructuring,
environmental matters and penalties. The Group’s management
exercises its discretion when taking decisions regarding the classification of one-time items.
The Group has earlier reported the profitability of the normal
business operations and operating profit excluding also operative exchange rate differences. The Group does not follow this
reporting procedure in the future. Operative exchange rate differences are arising, for example, from foreign currency trade payables and trade receivables and also from foreign currency denominated other operative receivables and payables. The result impact
of the derivatives, which are hedging operative foreign currency
positions, have been also included by definition for the operative
exchange rate differences.
11
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Reconciliation of consolidated EBITDA
MEUR
EBITDA excluding one-time items and operative exchange rate differences
Operative exchange rate differences
EBITDA excluding one-time items
One-time items
EBITDA, IFRS
1.1.-31.3.2016
1.1.-31.3.2015
1.1.-31.12.2015
5.1
10.3
23.8
-0.8
-0.3
1.0
4.3
9.9
24.9
-1.9
-1.0
-11.7
2.4
8.9
13.1
1.1.-31.3.2016
1.1.-31.3.2015
1.1.-31.12.2015
0.6
5.8
6.0
Reconciliation of consolidated operating profit
MEUR
Operating profit excluding one-time items and operative exchange rate differences
Operative exchange rate differences
-0.8
-0.3
1.0
Operating profit excluding one-time items
-0.1
5.4
7.0
One-time items
-2.0
-1.0
-30.5
Operating profit, IFRS
-2.2
4.4
-23.4
1.1.-31.3.2016
1.1.-31.3.2015
1.1.-31.12.2015
Reconciliation of consolidated result after financial items
MEUR
Result after financial items excluding one-time items and operative
exchange rate differences
-5.0
0.5
-19.4
Operative exchange rate differences
-0.8
-0.3
1.0
Result after financial items excluding one-time items
-5.8
0.2
-18.4
One-time items
-2.0
-1.1
-30.5
Result after financial items, IFRS
-7.8
-0.9
-48.9
1.1.-31.3.2016
1.1.-31.3.2015
1.1.-31.12.2015
Net sales
118.2
133.1
494.8
Other operating income
-0.5
0.0
2.5
-113.4
-123.2
-472.5
-4.5
-4.5
-17.9
0.0
0.0
0.1
-0.1
5.4
7.0
Consolidated income statement excluding one-time items
MEUR
Operating expenses
Depreciation, amortization and write-downs
Share of the associated companies' result
Operating profit
% of net sales
-0.1
4.1
1.4
Financial income and expenses
-5.6
-5.3
-25.4
Result after financial items
-5.8
0.2
-18.4
% of net sales
-4.9
0.1
-3.7
Income taxes
-0.1
-0.9
0.1
Net profit
-5.9
-0.7
-18.2
-5.9
-1.0
-18.6
Allocation of net profit for the period
To equity holders of the parent
To non-controlling interest
0.0
0.2
0.4
-5.9
-0.7
-18.2
-0.06
-0.01
-0.19
Earnings per share calculated on the profit
attributable to equity holders of the parent
Earnings per share, EUR
12
COMPONENTA VUOSIKERTOMUS 2015
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
Consolidated income statement
MEUR
Net sales
Other operating income
Operating expenses
Depreciation, amortization and write-downs
Share of the associated companies' result
1.1.-31.3.2016
1.1.-31.3.2015
1.1.-31.12.2015
118.2
133.1
494.8
-0.3
0.1
2.6
-115.5
-124.2
-484.3
-4.6
-4.5
-36.6
0.0
0.0
0.1
Operating profit
-2.2
4.4
-23.4
% of net sales
-1.8
3.3
-4.7
Financial income and expenses
-5.6
-5.3
-25.4
Result after financial items
-7.8
-0.9
-48.9
% of net sales
-6.6
-0.7
-9.9
Income taxes
0.0
-0.8
-33.8
-7.8
-1.7
-82.7
-7.8
-1.9
-83.1
0.0
0.2
0.4
-7.8
-1.7
-82.7
Earnings per share, EUR
-0.08
-0.02
-0.86
Earnings per share with dilution, EUR
-0.08
-0.02
-0.86
1.1.-31.3.2016
1.1.-31.3.2015
1.1.-31.12.2015
-7.8
-1.7
-82.7
-
-
-8.8
Translation differences
-0.2
0.1
-0.6
Actuarial gains and losses
-0.8
-0.9
-2.1
Cash flow hedges
-0.3
0.0
0.0
0.0
0.0
0.0
-1.2
-0.9
-2.7
Net profit
Allocation of net profit for the period
To equity holders of the parent
To non-controlling interest
Earnings per share calculated on the profit
attributable to equity holders of the parent
Consolidated statement of comprehensive income
MEUR
Net profit
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Revaluation of buildings and land areas
Items that may be reclassified subsequently to profit or loss
Other items
Total items that may be reclassified to profit or loss subsequently
0.2
0.2
2.0
Other comprehensive income, net of tax
Income tax on other comprehensive income
-1.0
-0.7
-9.5
Total comprehensive income
-8.8
-2.4
-92.2
-8.9
-2.6
-92.1
Allocation of total comprehensive income
To equity holders of the parent
To non-controlling interest
0.0
0.2
-0.1
-8.8
-2.4
-92.2
13
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Consolidated statement of financial position
MEUR
31.3.2016
31.3.2015
31.12.2015
Assets
Non-current assets
Intangible assets
Goodwill
Investment properties
Tangible assets
6.3
7.6
7.1
28.5
29.2
29.2
7.9
8.3
8.1
233.2
252.0
234.3
Investment in associates
1.4
1.2
1.2
Receivables
9.1
1.4
7.8
Other investments
0.9
0.9
0.9
Deferred tax assets
5.5
37.8
5.5
292.7
338.4
294.1
Inventories
67.6
78.6
68.9
Receivables
38.4
55.1
31.7
0.9
0.1
1.4
Total non-current assets
Current assets
Tax receivables
Assets held for sale
5.9
-
-
Cash and cash equivalents *)
8.6
7.8
6.1
Total current assets
121.3
141.5
108.2
Total assets
414.1
479.9
402.2
Shareholders' equity and liabilities
Shareholders' equity
Share capital
21.9
21.9
21.9
Other equity
-19.7
78.7
-10.8
Equity attributable to equity holders of the parent company
2.2
100.6
11.1
Non-controlling interest
7.6
8.2
7.6
Shareholders' equity
9.8
108.8
18.6
-
0.0
-
92.2
155.8
87.3
0.6
0.2
0.3
Provisions
10.7
10.4
10.4
Deferred tax liability
10.9
11.9
10.8
Liabilities
Non-current
Capital loans
Interest bearing
Interest free
Current
-
2.0
-
Interest bearing
Capital loans
152.3
75.8
155.7
Interest free
131.9
111.5
110.0
0.1
0.3
2.0
Tax liabilities
Provisions
Total liabilities
Total shareholders' equity and liabilities
5.6
3.3
7.0
404.3
371.1
383.6
414.1
479.9
402.2
*) Cash and cash equivalents on 31 March 2016 include funds of EUR 4.0 million that have restrictions on the amount that may be drawn mainly relating to progress
in the investment in the aluminium foundry in Manisa.
14
COMPONENTA VUOSIKERTOMUS 2015
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
Condensed consolidated cash flow statement
MEUR
1.1.-31.3.2016
1.1.-31.3.2015
1.1.-31.12.2015
-7.8
-0.9
-48.9
Depreciation, amortization and write-downs
4.6
4.5
36.6
Net financial income and expenses
5.6
5.3
25.4
Other income and expenses, adjustments to cash flow
-1.7
-1.7
-1.8
Change in net working capital
11.5
-7.7
21.6
Cash flow from operating activities
Result after financial items
Cash flow from operations before financing and income taxes
Interest received and paid and dividends received
Taxes paid
Net cash flow from operating activities
12.2
-0.4
33.0
-3.8
-3.5
-22.1
0.0
-0.1
-0.6
8.4
-4.0
10.3
Cash flow from investing activities
Capital expenditure in tangible and intangible assets
-6.2
-5.3
-28.6
Proceeds from tangible and intangible assets
0.3
0.2
0.4
Other investments and loans granted
0.0
0.0
0.0
Proceeds from other investments and repayments of loan receivables
0.1
0.0
1.4
-5.8
-5.1
-26.8
Net cash flow from investing activities
Cash flow from financing activities
-
-
-0.4
Repayment of finance lease liabilities
Dividends paid
-1.5
-0.7
-4.0
Draw-down (+)/ repayment (-) of current loans
-1.5
5.5
5.3
Draw-down of non-current loans
Repayment of non-current loans and other changes
Net cash flow from financing activities
6.9
0.6
26.4
-4.0
-0.6
-16.8
-0.1
4.8
10.5
2.5
-4.4
-6.0
Cash and cash equivalents at the beginning of the period
6.1
12.1
12.1
Effects of exchange rate changes on cash
0.0
0.0
0.0
Cash and cash equivalents at the period end
8.6
7.8
6.1
Change in liquid assets
15
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Statement of changes in consolidated shareholders’ equity
Me
Shareholders' equity 1.1.2015
Share
capital
Share
premium
account
Other
reserves
21.9
15.0
179.5
Cash flow
hedges
Translation
differences
Retained
earnings
-0.4
-36.3
-76.5
103.1
8.0
111.2
-1.9
-1.9
0.2
-1.7
0.1
0.0
0.1
-0.7
-0.7
0.0
-0.7
Net profit
Translation differences
0.1
Actuarial gains and losses
Cash flow hedges
0.0
Noncontrolling
Total
interest
Shareholders’
equity
total
0.0
0.0
0.0
0.0
Other comprehensive income items
0.0
Total comprehensive income
0.0
0.0
0.1
-2.7
-2.6
0.2
-2.4
179.5
-0.4
-36.2
-79.2
100.6
8.2
108.8
-81.2
-81.2
0.2
-81.0
Shareholders' equity 31.3.2015
21.9
15.0
Net profit
Translation differences
-0.7
Actuarial gains and losses
-0.7
Cash flow hedges
0.0
Revaluation of buildings, land areas and
investment properties
-7.0
Other comprehensive income items
-7.0
0.0
0.0
21.9
15.0
172.5
0.0
-0.7
-0.4
-37.0
Net profit
Translation differences
-81.8
-0.8
-7.0
0.0
-0.3
Actuarial gains and losses
-7.4
0.0
-89.5
-0.3
-89.8
0.0
-0.4
-0.4
-160.9
11.1
7.6
18.6
-7.8
-7.8
0.0
-7.8
-0.2
0.0
-0.2
-0.6
0.0
-0.6
-0.2
-0.6
Cash flow hedges
-0.7
-0.1
0.0
Dividends
Shareholders' equity 1.1.2016
0.0
-0.7
0.0
0.0
Total comprehensive income
-0.7
-0.2
-0.2
-0.2
Other comprehensive income items
0.0
Total comprehensive income
0.0
-0.2
-0.2
-8.5
-8.9
0.0
-8.8
172.5
-0.6
-37.2
-169.4
2.2
7.6
9.8
Shareholders' equity 31.3.2016
16
21.9
15.0
0.0
0.0
COMPONENTA VUOSIKERTOMUS 2015
Key Ratios
Equity ratio, %
Equity per share, EUR
Invested capital at period end, MEUR
Return on investment, excl. one-time items, %
Return on investment, %
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
31.3.2016
31.3.2015
31.12.2015
2.4
22.7
4.6
0.02
1.03
0.11
254.3
342.4
261.7
-0.2
6.5
2.3
-3.3
5.3
-7.2
Return on equity, excl. one-time items, %
-165.2
-2.7
-20.4
Return on equity, %
-220.1
-6.2
-92.6
235.9
225.9
237.0
2,410.5
207.6
1,273.0
82.7
92.3
76.9
Net interest bearing debt, preferred capital note in debt, MEUR
Net gearing, preferred capital note in debt, %
Order book, MEUR
Investments in non-current assets excl. finance leases, MEUR
5.6
4.9
26.2
Investments in non-current assets incl. finance leases, MEUR
7.1
5.0
31.5
Investments in non-current assets (incl. finance leases), % of net sales
6.0
3.8
6.4
Average number of personnel during the period
3,963
3,942
3,982
Average number of personnel during the period, incl. leased personnel
4,268
4,244
4,281
Number of personnel at period end
3,954
3,937
3,979
Number of personnel at period end, incl. leased personnel
4,272
4,253
4,269
92.5
91.1
91.3
Contingent liabilities, MEUR
Share of export and foreign activities in net sales, %
583.4
661.3
586.0
Earnings per share (EPS), EUR
-0.08
-0.02
-0.86
Earnings per share, with dilution (EPS), EUR
-0.08
-0.02
-0.86
0.09
-0.04
0.11
Cash flow per share, EUR
17
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Changes in tangible assets and goodwill
MEUR
1-3/2016
1-3/2015
1-12/2015
586.1
571.2
571.2
-0.4
1.0
1.7
Changes in tangible assets
Acquisition cost at the beginning of the period
Translation differences
Additions
7.1
5.0
30.0
Companies acquired
0.0
0.0
0.0
Revaluation of buildings and land areas
-0.1
0.0
-11.9
Disposals and transfers between items
-4.7
-0.7
-4.9
Acquisition cost at the end of the period
588.0
576.5
586.1
Accumulated depreciation at the beginning of the period
-351.7
-319.7
-319.7
Translation differences
0.3
-0.6
-1.3
Accumulated depreciation on disposals and transfers
0.6
-0.2
2.7
Accumulated depreciation on companies acquired
Depreciation, amortization and write-downs during the period
Accumulated depreciation at the end of the period
Book value at the end of the period
0.0
0.0
0.0
-4.0
-4.0
-33.5
-354.8
-324.5
-351.7
233.2
252.0
234.3
29.2
29.1
29.1
Goodwill
Acquisition cost at the beginning of the period
Translation difference
-0.1
0.1
0.0
Disposals and transfers between items
-0.7
-
-
Book value at the end of the period
28.5
29.2
29.2
18
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Group development
Net sales by market area
MEUR
1-12/2015
1-3/2015
1-3/2016
Germany
105.9
29.4
28.1
Sweden
86.0
23.7
21.5
Turkey
69.0
18.2
14.8
Finland
43.0
11.9
8.9
Benelux countries
40.5
10.4
10.1
UK
36.8
10.0
7.2
Italy
30.2
7.5
7.4
France
27.3
7.3
6.6
Other European countries
21.3
5.8
6.3
Other countries
34.8
9.1
7.2
494.8
133.1
118.2
Q2/15
Q3/15
Q4/15
Q1/16
Total
Quarterly net sales development by market area
MEUR
Q1/15
Germany
29.4
26.9
23.0
26.6
28.1
Sweden
23.7
25.4
17.5
19.4
21.5
Turkey
18.2
17.9
14.0
19.0
14.8
Finland
11.9
11.5
8.2
11.4
8.9
Benelux countries
10.4
11.6
9.1
9.4
10.1
UK
10.0
9.9
10.8
6.2
7.2
Italy
7.5
8.0
9.2
5.6
7.4
France
7.3
7.1
5.8
7.1
6.6
Other European countries
5.8
5.8
5.5
4.3
6.3
Other countries
9.1
8.0
7.5
10.2
7.2
133.1
132.0
110.5
119.2
118.2
1-12/2015
1-3/2015
1-3/2016
494.8
133.1
118.2
7.0
5.4
-0.1
Net financial items *)
-25.4
-5.3
-5.6
Profit after financial items
-18.4
0.2
-5.8
Total
Group development excluding one-time items
MEUR
Net sales
Operating profit
*) Net financial items are not allocated to business segments
19
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Group development by business segment excluding one-time items
Operating profit, MEUR *)
Iron Business
1-12/2015
1-3/2015
1-3/2016
-3.2
2.7
-2.3
Aluminium Business
12.3
2.4
2.8
Other Business
-1.9
0.2
-0.5
Internal items
-0.1
0.1
-0.1
7.0
5.4
-0.1
Componenta total
*) Figures for the comparative period have been adjusted as described in Accounting principles.
Group development by quarter excluding one-time items
MEUR
Net sales
Operating profit
Net financial items *)
Profit after financial items
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
133.1
132.0
110.5
119.2
118.2
5.4
6.3
1.6
-6.3
-0.1
-5.3
-6.2
-6.5
-7.4
-5.6
0.2
0.1
-4.9
-13.7
-5.8
*) Net financial items are not allocated to business segments
Quarterly development by business segment excluding one-time items
Operating profit, MEUR *)
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Iron Business
2.7
3.5
-2.1
-7.3
-2.3
Aluminium Business
2.4
2.8
3.4
3.6
2.8
Other Business
0.2
0.0
0.2
-2.3
-0.5
Internal items
0.1
0.0
0.1
-0.3
-0.1
Componenta total
5.4
6.3
1.6
-6.3
-0.1
1-12/2015
1-3/2015
1-3/2016
Net sales
494.8
133.1
118.2
Operating profit
-23.4
4.4
-2.2
*) Figures for the comparative period have been adjusted as described in Accounting principles.
Group development
MEUR
Net financial items *)
-25.4
-5.3
-5.6
Profit after financial items
-48.9
-0.9
-7.8
*) Net financial items are not allocated to business segments
20
COMPONENTA VUOSIKERTOMUS 2015
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
Group development by business segment
Net sales, MEUR *)
1-12/2015
1-3/2015
1-3/2016
External sales
376.6
102.6
90.4
Internal sales
28.4
9.2
7.1
404.9
111.9
97.6
84.5
20.1
20.6
Iron Business
Total sales
Aluminium Business
External sales
Internal sales
8.5
2.1
1.3
93.0
22.2
21.9
External sales
33.8
10.4
7.2
Internal sales
25.5
6.6
6.5
Total sales
59.2
16.9
13.7
Internal items
-62.3
-17.9
-14.9
Componenta total
494.8
133.1
118.2
Total sales
Other Business
*) Figures for the comparative period have been adjusted as described in Accounting principles.
Operating profit, MEUR **)
Iron Business
1-12/2015
1-3/2015
1-3/2016
-3.2
2.7
-2.3
Aluminium Business
12.3
2.4
2.8
Other Business
-1.9
0.2
-0.5
One-time items
-30.5
-1.0
-2.0*)
-0.1
0.1
-0.1
-23.4
4.4
-2.2
Internal items
Componenta total
*) One-time items in 2016 relate to restructuring measures at the units in the Netherlands (EUR -1.4 million), extra waste disposal costs at the Orhangazi foundry
(EUR -0.4 million) and the closure related costs of the Smedjebacken forge in Sweden (EUR -0.2 million). Other one-time items as a net totalled EUR 0.0 million.
**) Figures for the comparative period have been adjusted as described in Accounting principles.
21
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Group development by quarter
MEUR
Net sales
Operating profit
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
133.1
132.0
110.5
119.2
118.2
4.4
5.7
0.8
-34.3
-2.2
Net financial items *)
-5.3
-6.2
-6.5
-7.4
-5.6
Profit after financial items
-0.9
-0.5
-5.8
-41.8
-7.8
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
Iron Business
111.9
107.6
87.8
97.7
97.6
Aluminium Business
22.2
25.2
22.8
22.8
21.9
*) Net financial items are not allocated to business segments
Quarterly development by business segment
Net sales, MEUR *)
16.9
16.7
13.5
12.1
13.7
Internal items
Other Business
-17.9
-17.4
-13.6
-13.4
-14.9
Componenta total
133.1
132.0
110.5
119.2
118.2
*) Figures for the comparative period have been adjusted as described in Accounting principles.
Operating profit, MEUR **)
Iron Business
Q1/15
Q2/15
Q3/15
Q4/15
Q1/16
2.7
3.5
-2.1
-7.3
-2.3
Aluminium Business
2.4
2.8
3.4
3.6
2.8
Other Business
0.2
0.0
0.2
-2.3
-0.5
One-time items
-1.0
-0.5
-0.8
-28.1
-2.0*)
Internal items
0.1
0.0
0.1
-0.3
-0.1
Componenta total
4.4
5.7
0.8
-34.3
-2.2
*) One-time items in 2016 relate to restructuring measures at the units in the Netherlands (EUR -1.4 million), extra waste disposal costs at the Orhangazi foundry
(EUR -0.4 million) and the closure related costs of the Smedjebacken forge in Sweden (EUR -0.2 million). Other one-time items as a net totalled EUR 0.0 million.
**) Figures for the comparative period have been adjusted as described in Accounting principles.
Q1/15*)
Q2/15
Q3/15
Q4/15
Q1/16
Iron Business
Order book at period end, MEUR **)
76.7
80.3
66.1
62.7
68.6
Aluminium Business
17.2
18.1
16.5
14.4
14.9
Other Business
6.8
7.3
5.1
5.4
5.4
Internal items
-8.4
-8.8
-5.6
-5.6
-6.2
Componenta total
92.3
96.8
82.1
76.9
82.7
*) Order book on 6 April 2015
**) Figures for the comparative period have been adjusted as described in Accounting principles.
22
COMPONENTA VUOSIKERTOMUS 2015
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
Business segments
MEUR
31.3.2016
31.3.2015
31.12.2015
Assets
304.9
357.0
306.6
Liabilities
125.5
118.8
110.6
Iron Business
Investments in non-current assets (incl. finance leases)
2.5
1.8
14.4
Depreciation, amortization and write-downs
3.4
3.3
27.3
Assets
81.3
58.6
72.2
Liabilities
Aluminium Business
27.4
8.1
21.2
Investments in non-current assets (incl. finance leases)
4.6
3.2
16.8
Depreciation, amortization and write-downs
0.8
0.7
3.1
Assets
38.2
47.2
35.3
Liabilities
39.3
35.1
37.9
-
0.1
0.3
0.4
0.5
6.3
Other Business
Investments in non-current assets (incl. finance leases)
Depreciation, amortization and write-downs
23
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Fair values of derivative instruments
31.3.2016
31.3.2015
31.12.2015
Fair value,
positive
Fair value,
negative
Fair value,
net
Fair value,
net
Fair value,
net
Foreign exchange forwards
-
-
-
-
-0.2
Currency swaps
-
-
-
-0.6
-0.4
-
-
-
-0.1
-
Me
Currency derivatives
Interest rate derivatives
Interest rate swaps
Commodity derivatives
Electricity price forwards
Total
0.0
-0.9
-0.9
-0.7
-0.8
0.0
-0.9
-0.9
-1.3
-1.4
31.3.2016
Nominal value
31.3.2015
Nominal value
31.12.2015
Nominal value
Nominal values of derivative instruments
Me
Currency derivatives *)
Foreign exchange forwards
-
-
7.5
Currency swaps
-
54.2
9.8
Foreign exchange options
-
-
-
Maturity in less than a year
-
5.0
-
Maturity after one year and less than five years
-
-
-
Maturity in less than a year
1.0
1.6
1.3
Maturity after one year and less than five years
1.9
2.1
1.7
2.9
62.9
20.3
Interest rate derivatives
Interest rate swaps
Commodity derivatives
Electricity price forwards
Total
*) Currency derivatives mature in less than a year.
24
COMPONENTA VUOSIKERTOMUS 2015
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
Classification of fair value of financial assets and liabilities
Financial assets and liabilities that are valued at fair value, are classified on three levels depending on the estimated reliability of the
valuation method:
LEVEL 1:
A reliable quoted market price exists for identical instruments quoted on an active market.
Electricity price forwards are classified on this level, as their valuations are based on market prices for Nord Pool’s similar standardized
products.
LEVEL 2:
A market price quoted on the active market exists for similar but not identical instruments. The price may, however, be derived from
observable market information. The fair values of interest rate and currency derivatives are calculated by deriving them from price information obtained on the active market and using valuation techniques that are commonly applied in the market.
LEVEL 3:
There is no active market for the instrument, a fair market price cannot be reliably derived, and defining the fair value requires significant assumptions.
Fair values by classification of valuation method Q1 / 2016
MEUR
LEVEL 1
LEVEL 2
LEVEL 3
Foreign exchange rate derivatives (OTC)
-
-
-
Interest rate derivatives (OTC)
-
-
-
-0.9
-
-
-
-
0.8
LEVEL 1
LEVEL 2
LEVEL 3
-
-0.6
-
Commodity derivatives
Available-for-sale investments
Fair values by classification of valuation method Q1 / 2015
MEUR
Foreign exchange rate derivatives (OTC)
Interest rate derivatives (OTC)
Commodity derivatives
Available-for-sale investments
-
-0.1
-
-0.7
-
-
-
-
0.9
LEVEL 1
LEVEL 2
LEVEL 3
-
-0.6
-
Fair values by classification of valuation method Q4 / 2015
MEUR
Foreign exchange rate derivatives (OTC)
Interest rate derivatives (OTC)
Commodity derivatives
Available-for-sale investments
-
-
-
-0.8
-
-
-
-
0.8
No financial assets or liabilities were transferred from one level to another during the financial year.
The fair value of forward rate agreements is the profit or loss that would occur from closing the agreement, calculated at the market
price on the balance sheet date. The fair value of interest rate and currency options is measured using commonly known option pricing
models. The fair value of interest rate swaps is calculated by discounting future cash flows at current interest rates at the balance sheet
date. Foreign exchange forwards and swaps are valued at forward prices on the balance sheet date. The fair value of electricity price
forwards is the estimated profit or loss that would derive from closing the contracts at market prices on the balance sheet date.
25
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
COMPONENTA VUOSIKERTOMUS 2015
Contingent liabilities
MEUR
31.3.2016
31.3.2015
31.12.2015
8.1
11.2
8.1
114.5
103.4
114.5
456.3
541.1
458.2
Other leasing commitments
3.4
4.4
4.1
Other commitments
1.2
1.3
1.2
583.4
661.3
586.0
Real-estate mortgages
For own debts
Business mortgages
For own debts
Pledges
For own debts
Total
On 31 March 2016 Componenta had contingent financial leasing liabilities, from not yet started contracts, amounting to EUR 2.5 million (EUR 1.8 million) and 31 December 2015 EUR 3.7 million. Financial leasing liability and the investment capitalization is recorded in
the statement of financial position when the financial leasing contract begins and when the financial leasing underlying machinery etc.
object is received.
Key exchange rates for the Euro
Closing rate
One Euro is
Average rate
31.3.2016
31.3.2015
31.12.2015
31.3.2016
31.3.2015
31.12.2015
SEK
9.2253
9.2901
9.1895
9.3267
9.3800
9.3528
USD
1.1385
1.0759
1.0887
1.1020
1.1261
1.1095
GBP
0.7916
0.7273
0.7340
0.7704
0.7434
0.7259
TRY (Turkish central bank)
3.2081
2.8309
3.1776
3.2438
2.7707
3.0167
76.3051
62.4400
80.6736
82.4506
70.9608
68.1066
RUB
26
COMPONENTA VUOSIKERTOMUS 2015
COM PON E N TA COR POR AT ION I N T E R I M R E PORT Q1 2016
Calculation of key financial ratios
Return on equity, %
(ROE) *)
=
Profit after financial items – income taxes x 100
Shareholders’ equity without preferred capital notes + non-controlling interest (quarterly average)
Profit after financial items + interest and other financial expenses x 100
Return on investment, %
=
(ROI) *)
Shareholders’ equity + interest bearing liabilities (quarterly average)
Shareholders’ equity, preferred capital notes excluded + non-controlling interest x 100
Balance sheet total - advances received
Equity ratio, %
=
Earnings per share,
EUR (EPS)
Profit after financial items – income taxes +/- non-controlling interest - deferred and paid interest on hybrid
loan
=
Average number of shares during the financial period
Earnings per share
with dilution, EUR
= As above, the number of shares has been increased with the possible warrants outstanding. When calculating the dilution effect of warrants, the number of shares has been adjusted with the number of own shares
which the company could have acquired, if it would have used the funds generated from the warrants to buy
back of own shares at market price (= average trading price). After tax interest expense of the possible convertible loan has been added to the profit of the period. Number of shares that can be subscribed by the loan
has been added to the number of total shares.
Cash flow per share,
EUR (CEPS)
=
Net cash flow from operating activities
Average number of shares during the financial period
Equity per share, EUR
=
Shareholders’ equity, preferred capital notes excluded
Number of shares at period end
Net interest bearing
debt, MEUR
= Interest bearing liabilities + preferred capital notes - cash and bank accounts
Net gearing, %
=
EBITDA, EUR
= Operating profit + Depreciation, amortization and write-downs +/- Share of the associated companies’ result
Net interest bearing liabilities x 100
Shareholders’ equity, preferred capital notes excluded + non-controlling interest
*) The profit for the first quarter of the year in ROE and ROI has been calculated as an average annual return (annualised).
27
Componenta Corporation
Panuntie 4
FI-00610 Helsinki
Finland
Tel. +358 10 403 00
Fax +358 10 403 2721
www.componenta.com

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