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Aspocomp Group Oyj Interim / Quarterly Report 2015
3301_rns_2015-10-29_f59a056e-07ae-4656-aa90-263600b4d91c.pdf
Interim / Quarterly Report
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ASPOCOMP
ASPOCOMP'S INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2015
Key figures 1-9/2015 in brief
| Aspocomp | 1-9/2015 | 1-9/2014 | Change |
|---|---|---|---|
| Net sales | 12.7 M€ | 16.9 M€ | -4.2 M€ |
| EBITDA | 0.0 M€ | 0.8 M€ | -0.8 M€ |
| Operating result excluding non-recurring items | -0.7 M€ | -0.2 M€ | -0.5 M€ |
| % of net sales | -5.2 % | -1.1 % | -4.1 ppts |
| Operating result | -0.9 M€ | -0.3 M€ | -0.5 M€ |
| Earnings per share | -0.14 € | -0.06 € | -0.08 € |
| Operative cash flow | 0.2 M€ | -0.5 M€ | 0.7 M€ |
| Equity ratio | 74.7 % | 73.5 % | 1.2 ppts |
Key figures 7-9/2015 in brief
| Aspocomp | 7-9/2015 | 7-9/2014 | Change |
|---|---|---|---|
| Net sales | 3.8 M€ | 4.9 M€ | -1.1 M€ |
| EBITDA | -0.2 M€ | 0.0 M€ | -0.2 M€ |
| Operating result | -0.5 M€ | -0.4 M€ | -0.1 M€ |
| % of net sales | -12.4 % | -8.6 % | -3.9 ppts |
| Earnings per share | -0.08 € | -0.06 € | -0.02 € |
Outlook for the future
Outlook for the full year 2015 remains unchanged. In 2015, net sales are expected to be between EUR 18 and 20 million and operating result excluding non-recurring items between EUR -0.7 and 0.5 million.
CEO's review
"Third-quarter net sales amounted to only EUR 3.8 million, as demand from our main customers was more muted than usual in July and August. In line with previous expectations, demand swung to clear growth in September. Due to the low net sales, operating profit was very low at EUR 0.5 million in the red.
Net sales for the review period amounted to EUR 12.7 million, down EUR 4.2 million compared to the reference period of the previous year. The operating result excluding non-recurring items was EUR 0.7 million in the red, whereas a year earlier it was EUR 0.2 million in the red. Cash flow remained EUR 0.2 million in the black.
Aspocomp's Interim Report January-September 2015
The order book and demand began to strengthen sharply during September. The company is expected to post its highest net sales for the year in the fourth quarter. Operating profit for the fourth quarter is expected to turn into the black."
Net sales and earnings
January-September 2015
Net sales amounted to EUR 12.7 million, a year-on-year decrease of 25 percent. However, from September onwards, demand picked up in all of the company's customer segments.
The five largest customers accounted for 47 percent of net sales (66% 1-9/2014). In geographical terms, 94 percent of net sales were generated in Europe (88%), 5 percent in Asia (11%) and 1 percent in North America (1%).
Operating result was EUR -0.9 million (EUR -0.3 million 1-9/2014) including non-recurring items. Operating result excluding non-recurring items was EUR -0.7 million (EUR -0.2 million 1-9/2014).
In the second quarter, the company recorded additional non-recurring expenses of approximately EUR 0.2 million on the closure of the Teuva plant; the previous EUR 1.5 million reserve was exceeded by approximately EUR 0.2 million, mainly as regards employee termination expenses.
Net financial expenses for the review period amounted to EUR 0.1 million (EUR 0.0 million). Earnings per share were EUR -0.14 (EUR -0.06).
July-September 2015
Third-quarter net sales amounted to EUR 3.8 million, a year-on-year decrease of 22 percent. The five largest customers accounted for 51 percent of net sales (61% 7-9/2014). In geographical terms, 94 percent were generated in Europe (88%), 4 percent in Asia (9%) and 2 percent in North America (3%).
ASPOCOMP
Aspocomp's Interim Report January-September 2015
Fig. 1 Quarterly net sales (M€)
The operating result was EUR -0.5 million (EUR -0.4 million 7-9/2015).
Third-quarter operating result excluding non-recurring items was EUR -0.1 million lower than a year earlier.
Net financial expenses for the review period amounted to EUR 0.0 million (EUR 0.0 million 7-9/2014). Earnings per share were EUR -0.08 (EUR -0.06).
Fig. 2 Quarterly operating result excluding non-recurring items (M€, %)
ASPOCOMP
Aspocomp's Interim Report January-September 2015
Fig. 3 Quarterly operating result (M€, %)
Investments and R&D
Investments during the review period amounted to EUR 0.4 million (EUR 0.6 million 1-9/2014).
R&D costs comprise general production development costs. These costs do not fulfill the IAS 38 definition of either development or research and are therefore booked into plant overheads.
Cash flow and financing
Cash flow from operations during the period was EUR 0.2 million (EUR -0.5 million 1-9/2014). Cash flow after investments was EUR -0.0 million (EUR -0.0 million).
Cash assets amounted to EUR 0.3 million at the end of the period (EUR 0.8 million 9/2014). Interest-bearing liabilities amounted to EUR 0.8 million (EUR 1.5 million 9/2014). Gearing was 5.4 percent (5.3%). Non-interest-bearing liabilities amounted to EUR 2.5 million (EUR 2.9 million). At the end of the period, the Group's equity ratio amounted to 74.7 percent (73.5%).
The company had a EUR 0.0 million recourse factoring agreement in use on the closing date.
The company also has a EUR 0.5 million credit facility. The facility was not in use on the closing date.
Personnel
During the review period, the company had an average of 123 employees (147 in 1-9/2014). The personnel count on September 30, 2015 was 108 (144 in 9/2014). Of them, 67 (101) were non-salaried and 41 (43) salaried employees.
ASPOCOMP
Aspocomp's Interim Report January-September 2015
Annual General Meeting 2015
The decisions of the Annual General Meeting 2015 and the authorizations given to the Board of Directors as well as resolutions relating to the organization of the Board of Directors were published in separate stock exchange releases on March 26, 2015.
Shares
The total number of Aspocomp’s shares at September 30, 2015 was 6,406,505 and the share capital stood at EUR 1,000,000. The company did not hold any treasury shares.
A total of 394,155 Aspocomp Group Plc. shares were traded on NASDAQ OMX Helsinki during the period from January 1 to September 30, 2015. The aggregate value of the shares exchanged was EUR 458,846. The shares traded at a low of EUR 0.95 and a high of EUR 1.36. The average share price was EUR 1.17. The closing price at September 30, 2015 was EUR 0.95, which translates into market capitalization of EUR 6.1 million.
Nominee-registered shares accounted for 11.4 percent of the total shares.
Aspocomp’s business operations
Aspocomp sells and manufactures PCBs and offers related design and logistics services. The company’s own manufacturing unit in Oulu comprises the core of its business operations. The Oulu plant focuses on prototype and quick-turn deliveries and the commercialization of new PCB technologies in cooperation with customers’ product design departments. In addition, operating as a service business, Aspocomp provides technology solutions and more competitive products.
Aspocomp’s customers are companies that design and manufacture telecom systems and equipment, industrial and automotive electronics, and healthcare systems.
The Oulu plant manufactures HDI (High Density Interconnection), multilayer and special material PCBs. It is capable of very fast deliveries, even in the case of structurally complex PCBs. Aspocomp’s HDI product development and commercialization are centralized in Oulu. In addition, the Oulu plant develops technologies for heat management on PCBs.
Electronics supply chains are occasionally hit by disturbances that result in urgent needs. For instance, PCB deliveries might be hindered by overdemand, accidents, natural catastrophes or holiday seasons. Furthermore, problems with deliveries of any of the components assembled on PCBs could lead to layout changes in PCBs. Fulfilling urgent needs due to such changes is difficult and cost-ineffective for high-volume PCB suppliers that manufacture long series. In such situations, the Oulu plant can step in to plug these urgent high-volume needs.
In addition to its in-house manufacture, Aspocomp also offers PCB trading services to its customers. These services include the selection of the most suitable high-volume manufacturer, provision of the technical specifications of the product, quality assurance and logistics services. These trading services round out Aspocomp’s own manufacturing, enabling customers to cost-effectively buy their PCBs from a single provider over the entire life cycle of a product. Aspocomp’s own production operations in Oulu keep it up to date on developments in PCB technology – customers can thus rest assured that the company will provide them with the best knowledge and service.
ASPOCOMP
Aspocomp’s Interim Report January-September 2015
Outlook for the future
As Aspocomp’s business is still dependent on prototypes and quick-turn deliveries, the company’s order book is very short. As a result, business development is difficult to predict and profit forecasts involve significant uncertainties.
Outlook for the full year 2015 remains unchanged. In 2015, net sales are expected to be between EUR 18 and 20 million and operating result excluding non-recurring items between EUR -0.7 and 0.5 million.
Assessment of short-term business risks
Dependence on key customers
Aspocomp’s customer base is concentrated; the majority of sales are generated by a small number of key customers. Aspocomp does not as yet have enough medium-sized customers and still remains too dependent on its key customers. This exposes the company to significant fluctuations in demand.
Market trends
Although Aspocomp is a marginal player in the global electronics market, changes in global PCB demand also have an impact on the company’s business. A prolonged downturn has increased competition in quick-turn deliveries and short production series and has had a negative impact on both demand and prices. Correspondingly, overdemand for PCBs increases the need for quick-turn deliveries and decreases competition in short series, as high-volume manufacturers seek to optimize their capacity utilization ratios.
Aspocomp’s main market area comprises Northern and Central Europe. In case Aspocomp’s clients would transfer their R&D and manufacturing out of Europe, demand for Aspocomp’s offerings might weaken significantly.
Liquidity and financial risks
Aspocomp’s liquidity is based on the Group’s cash assets, the cash flow generated by business operations, and external financing.
Events after the financial period
No significant reportable events after the financial period.
Accounting policies
The reported operations include the Group’s parent company, Aspocomp Group Plc. All figures are unaudited. The interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The accounting principles that were applied in the preparation of the financial statements of December 31, 2014 have been applied in the preparation of this report. However, as of January 1, 2015 the company has applied new or modified standards. The amendments do not have an impact on the consolidated financial statements.
ASPOCOMP
Aspocomp's Interim Report January-September 2015
Profit and Loss Statement
January - September
| 1 000 € | 1-9/2015 | 1-9/2014 | Change | 1-12/2014 | |||
|---|---|---|---|---|---|---|---|
| Net sales | 12,698 | 100% | 16,908 | 100% | -25% | 20,994 | 100% |
| Other operating income | 146 | 1% | 44 | 0% | 232% | 55 | 0% |
| Materials and services | -4,900 | -39% | -6,599 | -39% | -26% | -7,988 | -38% |
| Personnel expenses | -4,480 | -35% | -5,696 | -34% | -21% | -7,232 | -34% |
| Other operating costs | -3,422 | -27% | -3,809 | -23% | -10% | -6,124 | -29% |
| Depreciation and amortization | -900 | -7% | -1,180 | -7% | -24% | -1,658 | -8% |
| Operating result | -858 | -7% | -331 | -2% | 159% | -1,953 | -9% |
| Financial income and expenses | -67 | -1% | -30 | 0% | 126% | -73 | 0% |
| Profit/loss before tax | -925 | -7% | -360 | -2% | 157% | -2,025 | -10% |
| Income taxes | -1 | 0% | -29 | 0% | 32 | 0% | |
| Profit/loss for the period | -926 | -7% | -390 | -2% | 138% | -1,994 | -9% |
| Other comprehensive income | |||||||
| Items that will not be reclassified to profit or loss | 0 | 0% | 0 | 0% | 0 | 0% | |
| Items that may be reclassified subsequently to profit or loss: | |||||||
| Currency translation differences | 0 | 0% | -5 | 0% | -110% | -9 | 0% |
| Total other comprehensive income | 0 | 0% | -5 | 0% | -110% | -9 | 0% |
| Total comprehensive income | -925 | -7% | -394 | -2% | 135% | -2,002 | -10% |
| Earnings per share (EPS) | |||||||
| Basic EPS | -0.14 € | -0.06 € | -0.31 € | ||||
| Diluted EPS | -0.14 € | -0.06 € | -0.31 € |
ASPOCOMP
Aspocomp's Interim Report January-September 2015
July - September
| 1 000 € | 7-9/2015 | 7-9/2014 | Change | ||
|---|---|---|---|---|---|
| Net sales | 3,776 | 100% | 4,857 | 100% | -22% |
| Other operating income | 7 | 0% | 30 | 1% | -76% |
| Materials and services | -1,577 | -42% | -1,973 | -41% | -20% |
| Personnel expenses | -1,360 | -36% | -1,760 | -36% | -23% |
| Other operating costs | -1,023 | -27% | -1,180 | -24% | -13% |
| Depreciation and amortization | -293 | -8% | -390 | -8% | -25% |
| Operating result | -470 | -12% | -415 | -9% | 13% |
| Financial income and expenses | -46 | -1% | 0 | 0% | -9450% |
| Profit/loss before tax | -516 | -14% | -415 | -9% | 24% |
| Income taxes | 0 | 0% | -1 | 0% | |
| Profit/loss for the period | -516 | -14% | -416 | -9% | 24% |
| Other comprehensive income | |||||
| Items that will not be reclassified to profit or loss | 0 | 0% | 0 | 0% | |
| Items that may be reclassified subsequently to profit or loss: | |||||
| Currency translation differences | 1 | 0% | 3 | 0% | -56% |
| Total other comprehensive income | 1 | 0% | 3 | 0% | -56% |
| Total comprehensive income | -515 | -14% | -413 | -9% | 25% |
| Earnings per share (EPS) | |||||
| Basic EPS | -0.08 € | -0.06 € | 33% | ||
| Diluted EPS | -0.08 € | -0.06 € | 33% |
ASPOCOMP
Aspocomp's Interim Report January-September 2015
Consolidated Balance Sheet
| 1 000 € | 9/2015 | 9/2014 | Change | 12/2014 |
|---|---|---|---|---|
| Assets | ||||
| Non-current assets | ||||
| Intangible assets | 3,060 | 3,090 | -1% | 3,061 |
| Tangible assets | 2,383 | 3,090 | -23% | 2,889 |
| Available for sale investments | 15 | 15 | 0% | 15 |
| Deferred income tax assets | 2,311 | 2,259 | 2% | 2,311 |
| Total non-current assets | 7,770 | 8,454 | -8% | 8,277 |
| Current assets | ||||
| Inventories | 2,313 | 2,581 | -10% | 2,050 |
| Short-term receivables | 2,777 | 4,770 | -42% | 3,872 |
| Cash and bank deposits | 255 | 835 | -69% | 735 |
| Total current assets | 5,345 | 8,186 | -35% | 6,657 |
| Total assets | 13,115 | 16,640 | -21% | 14,934 |
| Equity and liabilities | ||||
| Share capital | 1,000 | 1,000 | 0% | 1,000 |
| Reserve for invested non-restricted equity | 4,097 | 4,004 | 2% | 4,030 |
| Retained earnings | 4,699 | 7,233 | -35% | 5,625 |
| Total equity | 9,797 | 12,237 | -20% | 10,655 |
| Long-term financing loans | 214 | 780 | -73% | 536 |
| Employee benefits | 103 | 170 | -39% | 118 |
| Deferred income tax liabilities | 8 | 16 | -49% | 8 |
| Short-term financing loans | 573 | 704 | -19% | 704 |
| Trade and other payables | 2,420 | 2,733 | -11% | 2,914 |
| Total liabilities | 3,318 | 4,403 | -25% | 4,279 |
| Total equity and liabilities | 13,115 | 16,640 | -21% | 14,934 |
ASPOCOMP
Aspocomp's Interim Report January-September 2015
Consolidated Changes in Equity
| January-September 2015 | |||||
|---|---|---|---|---|---|
| 1 000 € | Share capital | Other reserve | Translation differences | Retained earnings | Total equity |
| Balance at Jan. 1, 2015 | 1,000 | 4,030 | -3 | -5,628 | 10,655 |
| Comprehensive income | |||||
| Comprehensive income for the period | -926 | -926 | |||
| Other comprehensive income for the period, net of tax | |||||
| Translation differences | 0 | 0 | |||
| Total comprehensive income for the period | 0 | 0 | 0 | -926 | -925 |
| Business transactions with owners | |||||
| Share-based payment | 67 | 0 | 67 | ||
| Business transactions with owners, total | 0 | 67 | 0 | 0 | 67 |
| Balance at September 30, 2015 | 1,000 | 4,097 | -3 | 4,702 | 9,797 |
| January-September 2014 | |||||
| --- | --- | --- | --- | --- | --- |
| Balance at Jan. 1, 2014 | 1,000 | 3,955 | 6 | 7,622 | 12,582 |
| Comprehensive income | |||||
| Comprehensive income for the period | -390 | -390 | |||
| Other comprehensive income for the period, net of tax | |||||
| Translation differences | -5 | -5 | |||
| Total comprehensive income for the period | 0 | 0 | -5 | -390 | -394 |
| Business transactions with owners | |||||
| Share-based payment | 49 | 0 | 49 | ||
| Business transactions with owners, total | 0 | 49 | 0 | 0 | 49 |
| Balance at September 30, 2014 | 1,000 | 4,004 | 1 | 7,232 | 12,237 |
ASPOCOMP
Aspocomp's Interim Report January-September 2015
Consolidated Cash Flow Statement
| 1 000 € | 1-9/2015 | 1-9/2014 | 1-12/2014 |
|---|---|---|---|
| Profit for the period | -926 | -390 | -1,994 |
| Adjustments | 862 | 1,159 | 1,591 |
| Change in working capital | 340 | -1,219 | 410 |
| Received interest income | 28 | 0 | 1 |
| Paid interest expenses | -95 | -43 | -87 |
| Paid taxes | -1 | -3 | 14 |
| Operational cash flow | 207 | -495 | -64 |
| Investments | -416 | -577 | -864 |
| Proceeds from sale of property, plant and equipment | 181 | 67 | 67 |
| Cash flow from investments | -235 | -510 | -797 |
| Increase in financing | 7 | 0 | 0 |
| Decrease in financing | -459 | -539 | -784 |
| Cash flow from financing | -452 | -539 | -784 |
| Change in cash and cash equivalents | -480 | -1,544 | -1,645 |
| Cash and cash equivalents at the beginning of period | 735 | 2,380 | 2,380 |
| Cash and cash equivalents at the end of period | 255 | 835 | 735 |
ASPOCOMP
Aspocomp's Interim Report January-September 2015
12
Key Financial Indicators
| Q3/2015 | Q1/2015 | Q4/2014 | Q3/2014 | Q2/2014 | |
|---|---|---|---|---|---|
| Net sales, M€ | 3.8 | 4.4 | 4.6 | 4.1 | 4.9 |
| Operating result before depreciation (EBITDA), M€ | -0.2 | -0.2 | 0.4 | -1.1 | 0.0 |
| Operating result (EBIT), M€ | -0.5 | -0.5 | 0.1 | -1.6 | -0.4 |
| of net sales, % | -12% | -12% | 3% | -40% | -9% |
| Profit/loss before taxes, M€ | -0.5 | -0.5 | 0.1 | -1.7 | -0.4 |
| of net sales, % | -14% | 12% | 3% | -41% | -9% |
| Profit/loss for the period, M€ | -0.5 | -0.5 | 0.1 | -1.6 | -0.4 |
| of net sales, % | -14% | -12% | 3% | -39% | -9% |
| Equity ratio, % | 75% | 74% | 68% | 71% | 74% |
| Gearing, % | 5% | 5% | 10% | 5% | 5% |
| Gross investments in fixed assets, M€ | 0.1 | 0.3 | 0.1 | 0.3 | 0.3 |
| of net sales, % | 2% | 6% | 2% | 7% | 7% |
| Personnel, end of the quarter | 108 | 110 | 141 | 144 | 144 |
| Earnings/share (EPS), € | -0.08 | -0.08 | 0.02 | -0.25 | -0.06 |
| Equity/share, € | 1.53 | 1.61 | 1.69 | 1.66 | 1.91 |
Formulas and definitions
| Equity/share, € = | Equity attributable to shareholders | |
|---|---|---|
| Number of shares at the end of period | ||
| Equity ratio, % = | Equity | x 100 |
| Total assets - advances received | ||
| Gearing, % = | Net interest bearing liabilities | x 100 |
| Total equity | ||
| Earnings/share (EPS), € = | Profit attributable to equity shareholders | |
| Adjusted weighted average number of shares outstanding | ||
| EBITDA = | Earnings before interests, taxes, depreciations and amortisations |
Contingent Liabilities
| 1 000 € | 9/2015 | 9/2014 | 12/2014 | |
|---|---|---|---|---|
| Business mortgage | 4,000 | 4,000 | 4,000 | |
| Operating lease liabilities | 781 | 1,302 | 1,199 | |
| Other liabilities | 40 | 23 | 40 | |
| Total | 4,821 | 5,325 | 5,239 |
All figures are unaudited.
ASPOCOMP
Aspocomp's Interim Report January-September 2015
Espoo, October 29, 2015
Board of Directors of Aspocomp Group Plc.
For further information, please contact Mikko Montonen, CEO, tel. +358 20 775 6860 (on Thursday October 29, 2015 between 8:45 a.m. and 11 a.m.) or mikko.montonen(at)aspocomp.com.
Aspocomp - PCB technology company
Aspocomp develops and sells PCB manufacturing services, focusing on the end-to-end fulfillment of customers' PCB needs. Our seasoned professionals help customers to create the most optimal PCB designs, both in terms of performance and cost. Our trimmed production lines produce the most challenging designs with the shortest lead-times in the industry. Operating as a service business, we provide one-stop access to technology solutions and competitive products for all PCB technologies.
A printed circuit board (PCB) is the principal interconnection method in electronic devices. PCBs are used for electrical interconnection and as a component assembly platform in most electronic applications. Aspocomp's PCBs are used in many applications, such as telecommunication networks and devices, automotive electronics, security and medical systems, chipset development and industrial automation.
www.aspocomp.com
Some statements in this stock exchange release are forecasts and actual results may differ materially from those stated. Statements in this stock exchange release relating to matters that are not historical facts are forecasts. All forecasts involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performances or achievements of the Aspocomp Group to be materially different from any future results, performances or achievements expressed or implied by such forecasts. Such factors include general economic and business conditions, fluctuations in currency exchange rates, increases and changes in PCB industry capacity and competition, and the ability of the company to implement its investment program.
ASPOCOMP