Ponsse Oyj — Interim / Quarterly Report 2012

Apr 24, 2012

PONSSE’S INTERIM REPORT FOR 1 JANUARY – 31 MARCH 2012

PONSSE’S INTERIM REPORT FOR 1 JANUARY – 31 MARCH 2012

Vieremä, Finland, 2012-04-24 08:01 CEST (GLOBE NEWSWIRE) --

PONSSE PLC, STOCK EXCHANGE RELEASE, 24 APRIL 2012, 9:00 a.m.

PONSSE'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2012

• Net sales amounted to EUR 76.8 (71.9) million.
• Operating result totalled EUR 4.5 (5.4) million, equalling 5.9 (7.5) per cent
  of net sales.
• Profit before taxes was EUR 4.0 (3.0) million.
• Cash flow from business operations was EUR -1.9 (7.9) million.
• Earnings per share were EUR 0.09 (-0.01).
• Equity ratio was 47.1 (47.3) per cent.
• Order books stood at EUR 67.3 (85.8) million.

PRESIDENT AND CEO JUHO NUMMELA:

In the first quarter of the year, the demand for new forest machines was
normal. Demand improved towards the end of the period under review. At period
end, the company's order books remained good amounting to EUR 67.3 (85.8)
million, which is 21.5 per cent less than in the corresponding period.

Net sales for the period amounted to EUR 76.8 (71.9) million, representing a
growth of 6.7 per cent compared with the corresponding period. The service
business grew during the period.

The operating result amounted to EUR 4.5 (5.4) million during the first
quarter, equalling 5.9 (7.5) percent of net sales. Challenges in the sales of
trade-in machines affected profitability.

Operating costs (staff costs, depreciation and amortisation and other operating
costs) increased by 6.0 per cent during the period under review.

Cash flow from business operations during the period was negative by EUR -1.9
(7.9) million. Capital was released from materials and supplies, but,
correspondingly, was tied into trade-in machines. The stock of new products
consisted of machines on their way to customers and was at a normal level.

The 8000th Ponsse forest machine was supplied to the customer during the period
under review. The factory operated as planned in two shifts during the period
under review. The update of the Group's ERP system timed to the past quarter
succeeded according to plan.

NET SALES

Consolidated net sales for the period under review amounted to EUR 76.8 (71.9)
million, which is 6.7 per cent more than in the comparison period.
International business operations accounted for 61.3 (59.9) per cent of net
sales.

Net sales were regionally distributed as follows: Northern Europe 59.8 (57.7)
per cent, Central and Southern Europe 15.7 (15.8) per cent, Russia and Asia
10.8 (10.9) per cent, North and South America 13.7 (15.6) per cent and other
countries 0.0 (0.0) per cent.

PROFIT PERFORMANCE

The operating result amounted to EUR 4.5 (5.4) million. The operating result
equalled 5.9 (7.5) per cent of net sales for the period under review.
Consolidated return on capital employed (ROCE) stood at 15.0 (12.4) per cent.

Staff costs for the period totalled EUR 13.1 (12.4) million. Other operating
expensesstood at EUR 8.2 (7.8) million. The net total of financial income and
expenses amountedto EUR -0.5 (-2.3) million. Exchange rate gains and losses
with a net effect ofEUR -0.1 (-2.0) million were recognised under financial
items for the period.Profit for the period under review totalled EUR 2.8 (0.1)
million. Diluted andundiluted earnings per share (EPS) came to EUR 0.09
(-0.01). The interest on thesubordinated loan for the period, less tax, has
been taken into account in the calculationof EPS.
STATEMENT OF FINANCIAL POSITION AND FINANCING ACTIVITIES
At the end of the period under review, the total consolidated statements of
financial position amounted to EUR 174.2 (162.1) million. Inventories stood at
EUR 87.6 (79.6) million. Trade receivables totalled EUR 26.8 (27.4) million,
while liquid assets stood at EUR 9.8 (9.5) million. Group shareholders' equity
stood at EUR 81.7 (75.9) million and parent company shareholders' equity at EUR
78.7 (65.5) million. Group shareholders' equity includes a hybrid loan of EUR
19 million issued on 31 March 2009. The interest paid on the hybrid loan
totalling EUR 6.8 million, less tax, is recognised as a deduction from Group
equity. The amount of interest-bearing liabilities was EUR 38.1 (32.6) million.
The company has used 22 per cent of its credit facility limit. The parent
company's net receivables from other Group companies stood at EUR 78.4 (62.5)
million. The parent company's receivables from subsidiaries mainly consisted of
trade receivables. Consolidated net liabilities totalled EUR 27.7 (21.3)
million, and the debt-equity ratio (gearing) was 46.6 (43.0) per cent. The
equity ratio stood at 47.1 (47.3) percent at the end of the period under
review.

Cash flow from business operations amounted to EUR -1.9 (7,9) million. Cash
flow from investment activities came to EUR -2.4 (-1.7) million.

ORDER INTAKE AND ORDER BOOKS

Order intake for the period totalled EUR 74.3 (90.7) million, while period-end
order books were valued at EUR 67.3 (85.8) million.

DISTRIBUTION NETWORK

No changes took place in the Group structure during the period under review.

The subsidiaries included in the Ponsse Group are: Epec Oy, Finland; OOO
Ponsse, Russia; Ponsse AB, Sweden; Ponsse AS, Norway; Ponsse Asia-Pacific Ltd,
Hong Kong; Ponsse China Ltd, China; Ponsse Latin America Ltda, Brazil; Ponsse
North America, Inc., the United States; Ponssé S.A.S., France; Ponsse UK Ltd,
the United Kingdom; and Ponsse Uruguay S.A., Uruguay. Sunit Oy, based in
Kajaani, Finland, is an affiliated company in which Ponsse Plc has a holding of
34 per cent.

CAPITAL EXPENDITURE AND R&D

During the period under review, the Group's R&D expenses totalled EUR 2.3 (1.7)
million, of which EUR 479 (309) thousand was capitalised.

Capital expenditure totalled EUR 2.4 (1.7) million. It mainly consisted of
ordinary maintenance and replacement investments for machinery and equipment.

MANAGEMENT

The following persons were members of the Management Team: Juho Nummela,
President and CEO, acting as the chairman; Pasi Arajärvi, Purchasing and
Logistics Director; Juha Haverinen, Factory Director; Petri Härkönen, CFO; Juha
Inberg, Technology and R&D Director; Timo Karppinen, Executive Director,
Corporate Development and Strategy; Tapio Mertanen, Service Director; Paula
Oksman, HR Director and Jarmo Vidgrén, Deputy CEO, Sales and Marketing
Director. The company management has regular management liability insurance.

The area director organisation of sales is lead by Jarmo Vidgrén, Group's Sales
and Marketing Director and Tapio Mertanen, Service Director. The geographical
distribution and the responsible persons are presented below:

Northern Europe: Jarmo Vidgrén (Finland), Eero Lukkarinen (Sweden, Denmark) and
Sigurd Skotte (Norway),

Central and Southern Europe: Janne Vidgrén (Austria, Poland, Romania, Germany,
the Czech Republic and Hungary), Clément Puybaret (France), Jussi Hentunen
(Spain, Italy, Portugal and Norrbotten/Sweden) and Gary Glendinning (the United
Kingdom),

Russia and Asia: Jaakko Laurila (Russia, Belarus), Norbert Schalkx (Japan and
the Baltic countries) and Risto Kääriäinen (China),

North and South America: Pekka Ruuskanen (the United States) Marko Mattila
(North American dealers), Fabio Nogueira (Brazil) and Martin Toledo (Uruguay).

Jerry Wannberg acted as the Managing Director of Ponsse's Swedish subsidiary
Ponsse AB until 7 February 2012. Financial Manager Glenn Nyman acted as the
Managing Director of Ponsse AB in addition to his own duties from 7 February
2012 to 11 March 2012. The release was issued on 7 February 2012.

M.Sc. (Forestry Econ.) Eero Lukkarinen took up his post as the President and
CEO of Ponsse AB on 12 March 2012. The release was issued on 15 February 2012.

Claudio Costa acted as the Managing Director of Ponsse's Latin American
subsidiary Ponsse Latin America Ltda until 7 February 2012. Fabio Nogueira is a
Financial Director and is managing the operations in Ponsse Latin America Ltda
in addition to his own duties from 7 February 2012 to 9 May 2012. The release
was issued on 7 February 2012.

M.Sc. (Eng.) and M.Sc. (Econ.) Teemu Raitis will take up his post as the
President and CEO of Ponsse Latin America Ltda on 10 May 2012. The release was
issued on 17 February 2012.

PERSONNEL

The Group had an average staff of 981 (892) during the period and employed 987
(909) people at period-end.

SHARE PERFORMANCE

The company's registered share capital consists of 28,000,000 shares. The
trading volume of Ponsse Plc shares for 1 January - 31 March 2012 totalled
496,815, accounting for 1.8 per cent of the total number of shares. Share
turnover amounted to EUR 3.9 million, with the period's lowest and highest
share prices amounting to EUR 7.10 and EUR 8.55, respectively.

At the end of the period, shares closed at EUR 8.05, and market capitalisation
totalled EUR 225.4 million.

At the end of the period under review, the company held 212,900 treasury shares.

ANNUAL GENERAL MEETING

A separate release was issued on 17 April 2012 regarding the authorizations
given to the Board of Directors and other resolutions at the AGM.

GOVERNANCE

In its decision-making and administration, the company observes the Finnish
Limited Liability Companies Act, other regulations governing publicly listed
companies and the company's Articles of Association. The company's Board of
Directors has adopted the Code of Governance that complies with the Finnish
Corporate Governance Code approved by the Board of the Securities Market
Association in 2010. The purpose of the code is to ensure that the company is
professionally managed and that its business principles and practices are of a
high ethical and professional standard.

The Code of Governance is available on Ponsse's website in the Investors
section.

RISK MANAGEMENT

Risk management is based on the company's values, as well as strategic and
financial objectives. Risk management aims to support the achievement of the
objectives specified in the company's strategy, as well as to ensure the
financial development of the company and the continuity of its business.

Furthermore, risk management aims to identify, assess and monitor
business-related risks which may influence the achievement of the company's
strategic and financial goals or the continuity of its business. Decisions on
the necessary measures to anticipate risks and react to observed risks are made
on the basis of this information.

Risk management is a part of regular daily business, and it is also included in
the management system. Risk management is controlled by the risk management
policy approved by the Board.

A risk is any event that may prevent the company from reaching its objectives
or that threatens the continuity of business. On the other hand, a risk may
also be a positive event, in which case the risk is treated as an opportunity.
Each risk is assessed on the basis of its impact and probability. Methods of
risk management include avoiding, mitigating and transferring risks. Risks can
also be managed by controlling and minimising their impact.

SHORT-TERM RISK MANAGEMENT

The rapid escalation of the problems in the economies of Europe and the United
States in the financial market may have an impact on the availability of
customer financing.

The parent company monitors the changes in the Group's internal and external
trade receivables and the associated risk of impairment.

The key objective of the company's financial risk management policy is to
manage liquidity, interest and currency risks. The company ensures its
liquidity through credit limit facilities agreed with a number of financial
institutions. The effect of adverse changes in interest rates is minimised by
utilising credit linked to different reference rates and by concluding interest
rate swaps. The effects of currency rate fluctuations are mitigated through
derivative contracts.

Changes taking place in the fiscal and customs legislation in countries to
which Ponsse exports may hamper the company's export trade or its
profitability.

OUTLOOK FOR THE FUTURE

The Group's operating result in euros is expected to remain at the same level
as in 2011.

Exacerbation of the problems in the economy or an extension of the current
economic situation may affect the making of investment decisions on forest
machines and lead to weakening demand.

The factory and service operate normally at full capacity. The development of
operating costs is monitored in an enhanced manner, and any decisions to
initiate investments will be made with discretion.

PONSSE GROUP

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000)

                                                     IFRS     IFRS      IFRS
                                                   1-3/12   1-3/11   1-12/11

NET SALES 76,756 71,933 328,191
Increase (+)/decrease (-) in inventories of finished 3,428 6,115 2,672
goods and work in progress
Other operating income 141 189 1,297
Raw materials and services -53,129 -51,454 -214,137
Expenditure on employment-related benefits -13,092 -12,355 -49,176
Depreciation and amortisation -1,369 -1,262 -5,221
Other operating expenses -8,203 -7,756 -34,781
OPERATING RESULT 4,531 5,410 28,844
Share of results of associated companies -44 -50 -181
Financial income and expenses -454 -2,334 -2,617
RESULT BEFORE TAXES 4,033 3,026 26,046
Income taxes -1,213 -2,917 -11,233
NET RESULT FOR THE PERIOD 2,820 109 14,812
OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE RESULT:
Translation differences related to foreign units 303 602 -943
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD 3,123 711 13,869
Diluted and undiluted earnings per share* 0.09 -0.01 0.47

* The interest on the subordinated loan for the period, less tax, was taken
into accountin this figure.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000)

                                                IFRS       IFRS       IFRS

ASSETS 31 Mar 12 31 Mar 11 31 Dec 11
NON-CURRENT ASSETS
Intangible assets 9,529 6,869 9,057
Goodwill 3,440 3,440 3,440
Property, plant and equipment 26,737 24,613 26,165
Financial assets 111 111 111
Investments in associated companies 1,250 1,425 1,294
Non-current receivables 1,364 2,636 1,535
Deferred tax assets 2,257 1,746 2,826
TOTAL NON-CURRENT ASSETS 44,688 40,840 44,428
CURRENT ASSETS
Inventories 87,576 79,558 80,475
Trade receivables 26,814 26,305 28,258
Income tax receivables 679 182 4
Other current receivables 4,644 5,713 4,499
Cash and cash equivalents 9,762 9,487 16,267
TOTAL CURRENT ASSETS 129,476 121,245 129,504
TOTAL ASSETS 174,164 162,085 173,932
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 7,000 7,000 7,000
Other reserves 19,030 19,030 19,030
Translation differences -1,672 -430 -1,975
Treasury shares -2,228 -2,228 -2,228
Retained earnings 59,556 52,505 56,736
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS 81,686 75,877 78,563
NON-CURRENT LIABILITIES
Interest-bearing liabilities 18,623 16,011 18,630
Deferred tax liabilities 610 601 1,110
Other non-current liabilities 19 107 20
TOTAL NON-CURRENT LIABILITIES 19,252 16,720 19,760
CURRENT LIABILITIES
Interest-bearing liabilities 19,480 16,603 20,434
Provisions 4,947 4,755 4,627
Tax liabilities for the period 236 755 3,527
Trade creditors and other current liabilities 48,563 47,374 47,022
TOTAL CURRENT LIABILITIES 73,226 69,488 75,609
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 174,164 162,085 173,932

CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000)

                                                 IFRS    IFRS     IFRS
                                               1-3/12  1-3/11  1-12/11

CASH FLOW FROM BUSINESS OPERATIONS:
Net result for the period 2,820 109 14,812
Adjustments:
Financial income and expenses 454 2,334 2,617
Share of the result of associated companies 44 50 181
Depreciation and amortisation 1,369 1,262 5,221
Income taxes 1,284 2,968 10,878
Other adjustments 557 358 1,284
Cash flow before changes in working capital 6,528 7,080 34,994
Change in working capital:
Change in trade receivables and other receivables 1,611 5,303 5,034
Change in inventories -7,101 -7,167 -8,084
Change in trade creditors and other liabilities -1,360 2,810 1,953
Change in provisions for liabilities and charges 320 49 -79
Interest received 32 57 216
Interest paid -107 -136 -1,346
Other financial items -251 466 -715
Income taxes paid -1,614 -523 -6,947
NET CASH FLOW FROM BUSINESS OPERATIONS (A) -1,941 7,939 25,024
CASH FLOW FROM INVESTMENTS
Investments in tangible and intangible assets -2,412 -1,730 -9,430
CASH OUTFLOW FROM INVESTMENT ACTIVITIES (B) -2,412 -1,730 -9,430
FINANCING
Acquisition of treasury shares 0 0 0
Interest paid, hybrid loan -1,137 -1,137 -2,280
Withdrawal/Repayment of current loans -1,105 -3,838 -150
Change in current interest-bearing liabilities 34 34 25
Withdrawal/Repayment of non-current loans 8 -168 2,886
Payment of finance lease liabilities -16 -157 -519
Change in non-current receivables 16 67 208
Dividends paid 0 0 -9,725
NET CASH OUTFLOW FROM FINANCING (C) -2,200 -5,198 -9,556
Change in cash and cash equivalents (A+B+C) -6,553 1,010 6,039
Cash and cash equivalents on 1 Jan 16,267 11,036 11,036
Impact of exchange rate changes 48 -2,560 -808
Cash and cash equivalents on 31 Mar / 31 Dec 9,762 9,487 16,267

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR 1,000)

A = Share capital
B = Share premium and other reserves
C = Translation differences
D = Treasury shares
E = Retained earnings
F = Total shareholders' equity
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS
A B C D E F
SHAREHOLDERS' EQUITY 1 JAN 2012 7,000 19,030 -1,975 -2,228 56,736 78,563
Translation differences 303 303
Result for the period 2,820 2,820
Total comprehensive income for 303 2,820 3,123
the period
Direct entries to retained 0
earnings*
Dividend distribution 0
Purchase of treasury shares 0
Other changes 0
SHAREHOLDERS' EQUITY 31 MAR 2012 7,000 19,030 -1,672 -2,228 59,556 81,686
SHAREHOLDERS' EQUITY 1 JAN 2011 7,000 19,030 -1,032 -2,228 52,396 75,166
Translation differences 602 602
Result for the period 109 109
Total comprehensive income for 602 109 711
the period
Direct entries to retained 0
earnings*
Dividend distribution 0
Purchase of treasury shares 0
Other changes 0
SHAREHOLDERS' EQUITY 31 MAR 2011 7,000 19,030 -430 -2,228 52,505 75,877
* Consists of the interest paid, less tax, for the hybrid loan classified as
equity.

                                31 Mar 12  31 Mar 11  31 Dec 11

1. LEASING COMMITMENTS (EUR 1,000) 3,734 5,042 4,085

2. CONTINGENT LIABILITIES (EUR 1,000) 31 Mar 12 31 Mar 11 31 Dec 11
   Guarantees given on behalf of others 759 359 859
   Repurchase commitments 1,490 2,591 1,765
   Other commitments 3,391 3,422 3,391
   TOTAL 5,640 6,372 6,014

3. PROVISIONS (EUR 1,000) Guarantee provision
   1 January 2012 4,627
   Provisions added 353
   Provisions cancelled -33
   31 March 2012 4,947

KEY FIGURES AND RATIOS 31 Mar 12 31 Mar 11 31 Dec 11
R&D expenditure, MEUR 2.3 1.7 8.8
Capital expenditure, MEUR 2.4 1.7 9.4
as % of net sales 3.1 2.4 2.9
Average number of employees 981 892 948
Order books, MEUR 67.3 85.8 71.9
Equity ratio, % 47.1 47.3 45.2
Diluted and undiluted earnings per share (EUR) 0.09 -0.01 0.47
Equity per share (EUR) 2.92 2.71 2.81

FORMULAE FOR FINANCIAL INDICATORS
Return on capital employed, %:
Result before tax + financial expenses

---

Shareholder´s equity + interest-bearing financial liabilities (average during
the year) * 100
Average number of employees:
Average of the number of personnel at the end of each month. The calculation
has been adjusted for part-time employees.
Equity ratio, %:
Shareholders' equity + Non-controlling interests

---

Balance sheet total - advance payments received * 100
Earnings per share:
Net income for the period - Non-controlling interests - Interest on hybrid loan
for the period less tax

---

Average number of shares during the accounting period, adjusted for share issues
Equity per share:
Shareholders' equity

---

Number of shares on the balance sheet date, adjusted for share issues

ORDER INTAKE, MEUR 1-3/12 1-3/11 1-12/11
Ponsse Group 74.3 90.7 333.7

The interim report has been prepared observing the recognition and valuation
principles of IFRS standards, but not all of the requirements of IAS 34 have
been complied with. The same accounting principles were observed for the
interim report as for the annual financial statements dated 31 December 2011.

The above figures have not been audited.
The above figures have been rounded and may therefore differ from those given
in the official financial statements.
This communication includes future-oriented statements that are based on the
assumptions currently made by the company's management and its current
decisions and plans. Although the management believes that the future
expectations are well founded, there is no certainty that these expectations
will prove to be correct. This is why the results may significantly deviate
from the assumptions included in the future-oriented statements as a result of,
among other things, changes in the economy, markets, competitive conditions,
legislation or currency exchange rates.
Vieremä, 24 April 2012
PONSSE PLC
Juho Nummela
President and CEO
FURTHER INFORMATION
Juho Nummela, President and CEO, tel. +358 20 768 8914 or +358 400 495 690
Petri Härkönen, CFO, tel. +358 20 768 8608 or +358 50 409 8362
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
www.ponsse.com
Ponsse Plc is a company specialising in the sales, manufacture, servicing and
technology of cut-to-length method forest machines and is driven by genuine
interest in its customers and their business. Ponsse develops and manufactures
sustainable and innovative harvesting solutions based on customers' needs.

The company was established by forest machine entrepreneur Einari Vidgrén in
1970, and it has been a leader in timber harvesting solutions based on the
cut-to-length method ever since. Ponsse is headquartered in Vieremä, Finland.
The company's shares are quoted on the NASDAQ OMX Nordic List.

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