Vacon Plc Interim Report 1 January - 30 September 2009
(Thomson Reuters ONE) - Vacon Plc, Stock Exchange Release, 27 October 2009 at 9.30 amJuly-September summary:- Order intake totalled MEUR 57.1, a decline of -26.6 % fromthe corresponding period in the previous year (MEUR 77.8).- Revenues totalled MEUR 62.1, a decline of -16.3 % (MEUR74.2).- Operating profit was MEUR 3.4, down -62.6 % (MEUR 9.1).- Cash flow from operations was MEUR 10.8 (MEUR 6.4).- Earnings per share were EUR 0.19 (EUR 0.37), a decline fromthe previous year of -48.6 %.January-September summary:- Order intake totalled MEUR 192.5, a decline of -19.6 % fromthe corresponding period in the previous year (MEUR 239.3).- Revenues totalled MEUR 207.8, a decline of -4.7 % (MEUR218.1).- Operating profit was MEUR 18.2, down -32.8 % (MEUR 27.1).- Cash flow from operations was MEUR 25.0 (MEUR 16.8).- Earnings per share were EUR 0.83 (EUR 1.19), a decline fromthe previous year of -30.3 %.The global recession weakened demand for AC drives in most marketsegments during the first nine months of 2009. AC drive investmentsto improve energy efficiency and in renewable energy generationremained brisk especially in Asia, but they were not able tocompensate for the decline in orders in other market segments andareas. Vacon does not expect the AC drive market to decline anyfurther in the final quarter of 2009.A major order that Vacon was expecting in July 2009 from one ofVacon's largest customers was not received in the third quarter andthis, coupled with normal seasonal fluctuation, reduced the orderintake to EUR 57.1 (77.8) million. The comparable order intake,excluding the impact of the delayed order and normal seasonalfluctuation, was at almost the same level in the third quarter as inthe first half of the year.Vacon's deliveries to the mentioned above have started up again andthey are expected to slightly improve Vacon's order intake andrevenues in the final quarter of 2009 compared to the third quarter.Revenues totalled EUR 62.1 million, a decline of 18 % from the secondquarter and some 16 % from the corresponding quarter in the previousyear. The fall in revenues was due to the reduction in ordersreceived and the delayed major order.The operating profit margin in the third quarter was 5.5 % (12.3 %),compared with 10.1 % in the first quarter of this year and 10.3 % inthe second quarter. The main factors in the weakening ofprofitability were fixed costs, which remained at almost the samelevel as in the first half of the year, and the decline in revenues.Vacon has initiated measures to achieve annual cost savings of EUR 5million. The company aims at savings especially in the procurement ofexternal services and in personnel costs.On 14 September 2009 Vacon began negotiations affecting office staffat its operations in Finland, examining the means available to adjustits operations to weaker market conditions. As the result of thesenegotiations Vacon decided to lay off 160 office staff for fixedperiods. Each office worker affected by the negotiations will be laidoff for 7 working days in 2009 and for a maximum of 30 working daysin 2010. It was also agreed that the need for layoffs will bereviewed quarterly. The targeted savings are roughly equal to theneed to reduce costs by some 30 man-years during 2009 - 2010.The balance sheet remained strong. The company has paid particularattention to the management of working capital. The cash flow fromoperations was EUR 10.8 million (EUR 6.4 million in July-September2008). Intensified control of trade receivables and stocks helpedachieve this improvement.January - September result and equity structureMEUR 7-9/ 7-9/ 1-9/ 1-9/ Change, 1-12/ 2009 2008 2009 2008 % 2008Revenues 62.1 74.2 207.8 218.1 -4.7 293.2EBITDA 5.8 11.0 25.3 32.4 -21.9 41.9Depreciation- tangibles -1.1 -0.9 -3.2 -2.6 23.1 -3.5EBITA 4.7 10.1 22.1 29.8 -25.8 38.4Amortization- intangibles -1.3 -1.0 -3.9 -2.7 44.4 -3.8Operatingprofit 3.4 9.1 18.2 27.1 -32.8 34.6Profit beforetax 3.7 8.3 17.7 26.2 -32.4 32.6Profit forperiod 3.1 5.9 13.2 18.8 -29.8 23.9The Group's order intake in the January-September period was 19.6 %less than in the previous year, and revenues declined 4.7 %.According to Vacon's own estimate, the company has succeeded inraising its market share, despite the reduction in revenues. Theoperating profit in the first nine months of the year was 32.8 %lower than in the previous year. The operating profit as a percentageof revenues fell from 12.4 % last year to 8.8 %. The EBITA margin was10.6 %, compared to 13.7 % one year ago. The decline in revenues andthe investments in growth, such as establishing new sales companiesand the increasing number of personnel, have weakened profitability.The earnings per share were EUR 0.83, a decline of EUR 0.36 from theprevious year.The balance sheet total was EUR 143.0 (150.8) million. The equityratio was 55.3 % (48.0 %). The Group's cash flow from operations forthe January-September period was EUR 25.0 (16.8) million.The Group's equity structure and liquidity remained strong.Interest-bearing net debt at the end of the period totalled EUR 8.6(11.3) million, and gearing was 11.0 % (15.8 %).The Group's order book stood at EUR 32.7 (56.0) million. The orderbook declined EUR 15.3 million from the beginning of the year.Market positionVacon Group revenues by market area were as follows:MEUR 7-9/ % 7-9/ % 1-9/ % 1-9/ % 1-12/ % 2009 2008 2009 2008 2008Europe,MiddleEast,Africa 42.1 67.8 52.3 70.5 148.1 71.3 156.6 71.8 210.5 71.8NorthAndSouthAmerica 11.4 18.4 14.9 20.1 35.2 16.9 41.9 19.2 55.9 19.1Asia andPacific 8.6 13.8 7.0 9.4 24.5 11.8 19.6 9.0 26.8 9.1Total 62.1 100.0 74.2 100.0 207.8 100.0 218.1 100.0 293.2 100.0Vacon has strengthened its global position during 2009. Based onmarket surveys, the company estimates that it has about four per centof the global market.Developments in Vacon's revenues by market region during the ninemonth period were as follows: Europe, Middle East and Africa in total-5.4 %, North and South America -16.0 %, and Asia and Pacific +25.0 %from the corresponding period in the previous year.Breakdown of Vacon Group revenues by distribution channel 7-9/ % 7-9/ % 1-9/ % 1-9/ % 1-12/ %MEUR 2009 2008 2009 2008 2008Directsales 32.7 52.7 36.9 49.7 120.0 57.7 104.1 47.7 146.4 49.9Distribu-tors 5.2 8.4 9.4 12.6 19.4 9.3 27.6 12.7 34.4 11.7OEM 13.8 22.2 15.6 21.1 37.8 18.2 50.3 23.0 60.0 20.5Brandlabel 10.4 16.7 12.3 16.6 30.6 14.7 36.1 16.6 52.4 17.9Total 62.1 100.0 74.2 100.0 207.8 100.0 218.1 100.0 293.2 100.0Sales through several of Vacon's distribution channels fell duringthe nine month period; OEM 25 %, distributors 30 % and brand labelcustomers 15 %. Revenues from direct sales (including sales to systemintegrators) increased 15 % from the previous year. Sales to systemintegrators in particular have supported this trend.Vacon Group structureNo significant changes took place in the Group structure during thethird quarter.Research and developmentR&D expenditure during the first nine months of the year totalledEUR 13.0 (12.6) million, and EUR 3.9 (1.3) million of this wascapitalized as development costs. R&D costs accounted for 6.3 % ofthe Group's revenues (5.8 %).Work on developing new products continued in accordance with thecompany's plans. The company's goal in 2009 is to increase theproduct offering in the new AC drive family. R&D focuses on improvingcost-efficiency, functionality, use of space, visual properties, userfriendliness and energy efficiency.InvestmentsGross investments by the Group during the first nine months totalledEUR 11.5 (7.0) million. Expenditure focused on R&D, informationsystems, raising production testing capacity, and expandingproduction capacity for new products.Organization and personnelThe number of Vacon Group personnel has increased by 29 since thebeginning of the year. At the end of September the Group employed1,226 (1,163) people, of whom 640 (633) were in Finland and 586 (530)in other countries. The table below shows the average number of Vaconemployees during the review period: 1-9/2009 1-9/2008 1-12/2008Office personnel 759 672 687Factory personnel 474 439 444Total 1,233 1,111 1,131On 14 September Vacon Plc began negotiations affecting office staffat its operations in Finland, examining the means available to adjustits operations to weaker market conditions. The negotiations wereconcluded on 29 September and as a result Vacon decided to lay off160 office workers for fixed periods.Shares and shareholdersVacon had a market capitalization at the end of September of EUR387.8 million. The closing share price on 30 September 2009 was EUR25.50. The lowest share price during the January-September period wasEUR 15.30 and the highest EUR 28.90. A total of 3,660,011 Vaconshares were traded during the January-September period, in monetaryterms EUR 75.5 million.Vacon's main shareholders on 30 September 2009: Number of Holding, % sharesAhlström Capital Group 2,804,719 18.3Tapiola Mutual PensionInsurance Company 584,500 3.8Ilmarinen Mutual PensionInsurance Company 563,230 3.7Vaasa Engineering Oy 424,433 2.8Koskinen Jari 362,088 2.4Holma Mauri 347,171 2.3Ehrnrooth Martti 333,000 2.2Tapiola Group companies 325,300 2.1Niemelä Harri 271,939 1.8Karppinen Veijo 209,349 1.4Nominee registered andin foreign ownership 4,490,357 29.4Vacon Plc's own shares 86,011 0.6Others 4,492,903 29.4Total 15,295,000 100.0Shares outstanding 15,208,989On 30 September 2009 members of Vacon's Board of Directors, thePresident and CEO, and the Deputy to the CEO held directly a total of579,494 shares, or 3.8 % of Vacon's share stock.Own sharesOn 30 September 2009 Vacon Plc held a total of 86,011 of its ownshares.Risks and uncertainties in the near futureThe most significant risks for Vacon in the near future relate to theweakening of general demand and intensifying competition on price.Vacon's order book has always been short term in nature, so there areno major risks connected with the timing of deliveries or theircancellation. Vacon has thousands of customers worldwide. The tenlargest customers account for just under half of Vacon's revenues.Vacon does not finance customer projects and is also continuouslyassessing the creditworthiness of its customers and their ability topay their debts.Vacon is able to adjust its production capacity to market demand. Thecompany estimates that its cash funds and available credit facilitiesare sufficient to ensure its liquidity.Vacon's balance sheet includes goodwill of EUR 8.1 million, most ofwhich is related to the company acquisition at the beginning of 2008.The company tests goodwill for impairment annually.The availability of raw materials and components and changes in theirprices can affect the profitability and scale of the company'sbusiness. Purchase agreements for raw materials and components aremainly annual agreements, which contain price and exchange rateclauses for changes in the global market prices of raw and othermaterials. Changes in the global economic situation may harm thebusiness opportunities for some component suppliers.Some of the most significant financial risks affecting the result areforeign exchange risks. Exchange rate fluctuations may have an impacton business, although the international expansion of businessoperations reduces the relative importance of individual currencies.The biggest exchange rate risks against the euro relate to the USdollar and the Chinese renmimbi.Prospects for 2009Vacon does not expect the AC drive market to weaken further duringthe final quarter of 2009. According to Vacon's estimates, the ACdrive market in 2009 will show a significant decline from 2008. ACdrive investments to improve the energy efficiency of electric motordrives and in renewable energy generation are increasing, butinvestments to improve industrial processes and in new building arefalling. Vacon has about a 4 % market share. The global salesnetwork, the renewal of the product selection, and the relatively lowmarket share, coupled with a flexible organization support thedevelopment of Vacon's business even in difficult market conditions.Vacon will continue to adapt its investments in growth to theprevailing market situation so as to secure its profitability.Vacon estimates that its 2009 revenues will decline more than fiveper cent from the 2008 figure. Profitability and earnings per shareare expected to be lower than in 2008. Return on equity (ROE) to fallbelow 30 %.2009 financial reportingVacon will publish its financial statements for 2009 at 9.30 am on 3February 2010.Formal statementThis release contains certain forward-looking statements that reflectthe current views of the company's management. Due to the nature ofthese statements, they contain risks and uncertainties and aresubject to changes in the general economic situation and in thecompany's business sector.Vacon in briefVacon's operations are driven by a passion to develop, manufactureand sell the best AC drives in the world - and nothing else. ACdrives are used to control electric motors and in renewable energygeneration. Vacon has R&D and production units in Finland, the USA,China and Italy, and sales offices in more than 25 countries. In 2008Vacon had revenues of EUR 293.2 million and globally employed 1,200people. The shares of Vacon Plc (VAC1V) are quoted on the main listof the Helsinki stock exchange.Vacon's long-term goals are to achieve revenues of EUR 500 millionand an operating profit percentage (EBIT %) of more than 14 % by theend of 2012. An annual target of more than 30 % has been set forreturn on equity (ROE).Driven by Drives, www.vacon.comVaasa, 27 October 2009VACON PLCBoard of DirectorsFor more information please contact:Mr Vesa Laisi, President and CEO, phone: +358 (0)40 8371 510Ms Eriikka Söderström, CFO and Vice President, Finance & Control,phone: +358 (0)40 8371 443Conference for media and analystsVacon will hold a briefing for analysts and the media at 11.30 am on27 October 2009 in the Vaakuna meeting room at the Sokos HotelVaakuna, entrance at Asema-aukio 2, Helsinki.Dial-in conference for investors and investment analystsA dial-in conference in English for investors and investment analystswill be held at 3.00 pm on 27 October 2009. President and CEO VesaLaisi, Executive Vice President Heikki Hiltunen and EriikkaSöderström, CFO and Vice President, Finance and Control, willparticipate in the conference. Lines can be booked ten minutes beforethe conference by calling the service number +44 207 162 0025. Theconference ID code is "Vacon Oyj". To hear a recording of theconference, available for three working days, call +44 207 031 4064,ID code 824277.Conference link:http://wcc.webeventservices.com/view/wl/r.htm?e=172560&s=1&k=14896C8603DB67F53B0D50994D84EC9E&cb=blankDistributionNASDAQ OMX Helsinki ExchangeFinancial Supervision AuthorityMain mediaAccounting principlesThis interim report has been prepared in accordance with IFRS(International Financial Reporting Standards) standard IAS 34 onInterim Financial Reporting.Vacon has prepared this interim report applying the same accountingprinciples as those decribed in detail in its 2008 consolidatedfinancial statementsThe interim report is unaudited.Consolidated income statement, IFRS, MEUR 7-9/2009 7-9/2008 1-9/2009 1-9/2008 1-12/2008Revenues 62.1 74.2 207.8 218.1 293.2Other operating income 0.1 0.0 0.2 0.1 0.2Change in inventoriesoffinished goods and workin progress 0.0 1.7 0.0 4.0 0.2Materials and services -32.2 -39.6 -106.1 -115.9 -150.8Employee benefit costs -12.9 -13.6 -40.6 -39.0 -52.7Other operating costs -11.2 -11.7 -36.0 -34.8 -48.2Depreciation -1.1 -0.9 -3.2 -2.6 -3.5EBITA 4.7 10.1 22.1 29.8 38.4Amortization -1.3 -1.0 -3.9 -2.7 -3.8Operating profit 3.4 9.1 18.2 27.1 34.6Financial incomeand expenses 0.3 -0.9 -0.5 -1.0 -2.0Profit before taxes 3.7 8.2 17.7 26.2 32.6Income taxes -0.6 -2.3 -4.6 -7.4 -8.7Profit for period 3.1 5.9 13.2 18.8 23.9Attributable to:Equity holdersof the parent 2.9 5.7 12.6 18.2 23.1Minority interest 0.2 0.2 0.6 0.6 0.8Earnings per share,euro 0.19 0.37 0.83 1.19 1.51Earnings per sharediluted, euro 0.19 0.37 0.83 1.19 1.51Consolidated statement of comprehensive income, IFRS, MEUR 7-9/2009 7-9/2008 1-9/2009 1-9/2008 1-12/2008Net profit for period 3.1 5.9 13.2 18.8 23.9Other comprehensiveincome Cash flow hedging 0.0 0.0 0.0 0.0 0.0 Exchange differences on translating foreign operations -0.2 0.9 -0.3 0.4 0.4 Total comprehensive income 2.9 6.8 12.8 19.2 24.3 Attributable to: Shareholders of parent company 2.7 6.6 12.2 18.6 23.5 Minority interest 0.2 0.2 0.6 0.6 0.8Consolidated balance sheet , IFRS, MEUR 30.9.2009 30.9.2008 31.12.2008ASSETSGoodwill 8.1 8.0 8.3Development costs 8.0 3.9 4.8Intangible assets 13.0 12.6 14.9Tangible assets 18.7 18.3 16.3Loans receivableand other receivables 0.2 0.2 0.2Deferred tax assets 3.8 2.1 2.6Other financial assets 3.7 2.4 3.3Total non-current assets 55.4 47.5 50.3Inventories 20.5 24.5 21.3Trade and other receivables 54.4 60.5 61.7Cash and cash equivalents 12.8 18.2 15.7Total current assets 87.7 103.3 98.8Total assets 143.0 150.8 149.1EQUITY AND LIABILITIESShare capital 3.1 3.1 3.1Share premium reserve 5.0 5.0 5.0Own shares -2.6 -1.2 -2.6Retained earnings 71.3 63.5 68.7Minority interest 1.4 1.2 1.3Total equity 78.1 71.6 75.5Deferred tax liabilities 4.3 3.1 3.5Employee benefits 1.5 1.4 1.4Interest-bearing liabilities 13.2 17.4 15.8Total non-current liabilities 19.0 22.0 20.7Trade and other payables 35.7 40.0 37.6Income tax liabilities 0.4 3.1 1.5Provisions 1.6 2.0 1.6Interest-bearing liabilities 8.1 12.1 12.2Total current liabilities 45.8 57.1 52.9Total equity and liabilities 143.0 150.8 149.1Q3/2008 Calculation of changes in shareholders' equity, IFRS, MEURAttributable to equity holders of the parent Minority Total interest equity Share Share Own Retain- Total capital pre- shares ed mium earn- re- ings serveShareholders'equity31.12.2007 3.1 5.0 -1.2 56.0 62.9 1.1 64.0Dividend paid -11.4 -11.4 -0.5 -11.9Totalcomprehen-sive incomefor period 18.6 18.6 0.6 19.2Otherchanges 0.3 0.3 0.0 0.3Shareholders'equity30.9.2008 3.1 5.0 -1.2 63.5 70.4 1.2 71.6Q3/2009 Calculation of changes in shareholders' equity, IFRS, MEURAttributable to equity holders of the parent Minority Total interest equity Share Share Own Retain- Total capital pre- shares ed mium earn- re- ings serveShareholders'equity31.12.2008 3.1 5.0 -2.6 68.7 74.1 1.4 75.5Dividend paid -10.1 -10.1 -0.5 -10.6Totalcomprehen-sive incomefor period 12.2 12.2 0.6 12.8Otherchanges 0.4 0.4 0.4Shareholders'equity30.9.2009 3.1 5.0 -2.6 71.3 76.7 1.4 78.1Consolidated cash flow statement, IFRS, MEUR 30.9.2009 30.9.2008 31.12.2008Profit for the period 13.2 18.8 23.9Depreciation 7.0 5.3 7.3Financial income and expenses 0.5 1.0 2.0Taxes 4.6 7.4 8.7Other adjustments 0.3 0.5 0.5Change in working capital 6.1 -9.3 -10.1Cash flow from financialitems and tax -6.7 -6.8 -10.4Cash flow fromoperating activities 25.0 16.8 21.9Purchase of subsidiary 0.0 -20.4 -20.4Investments in tangible andintangible assets -11.1 5.6 -9.2Proceeds from disposal oftangible and intangible assets 0.0 0.0 -0.1Other investments -0.2 -0.4 -1.7Proceeds from disposalof other investments 0.0 0.0 0.6Cash flow frominvesting activities -11.3 -26.4 -30.8Repayment of long-term loans -2.4 -2.3 -3.9Proceeds fromshort-term borrowings 0.0 7.8 7.9Repayment of short-term loans -4.1 0.0 0.0Purchase of own shares 0.0 0.0 -1.5Financial leasing payments 0.0 0.0 0.0Dividends paid -10.4 -11.9 -11.9Cash flow from financial activities -17.0 -6.4 -9.4Change in liquid funds -3.3 -16.1 -18.3Liquid funds at start of period 15.7 34.4 34.4Translation differencesfor liquid funds 0.3 -0.1 -0.4Liquid funds at end of period 12.8 18.2 15.7Segment informationVacon has one business segment, AC drives. The figures for thebusiness segment are identical with the figures for the whole Group.Vacon's operations are organized in the following functions: Productsand Markets, Production, Research & Development, Finance andAdministration, Human Resources, IT and Process Development, andBusiness Development. To ensure that the organisation iscustomer-oriented, operations are controlled by sales channel:Distributors, Systems Integrators, Direct Sales, OEM Customers andBrand Label Customers. Key indicators 30.9.2009 30.9.2008 31.12.2008Orders received, MEUR 192.5 239.3 306.5Change inorders received, % -19.6 37.1 29.2Revenues, MEUR 207.8 218.1 293.2Change in revenues, % -4.7 27.7 26.3Operating profit, MEUR 18.2 27.1 34.6Change inoperating profit, % -32.8 24.9 18.5Operating profit,% of revenues 8.8 12.4 11.8Earnings per share, EUR 0.83 1.19 1.51Equity per share, EUR 5.04 4.62 4.88Equity ratio, % 55.3 48.0 51.1Gross capital expenditure,(2008 exclud. TB Woods'acquisition), MEUR 11.5 7.0 11.2Gross capital expenditure,% of revenues 5.5 3.2 3.8Interest-bearing netliabilities, MEUR 8.6 11.3 12.3Gearing, % 11.0 15.8 16.3Net working capital, MEUR 37.2 40.0 42.5Order book, MEUR 32.7 56.0 48.0Adjusted average numberof shares during theperiod 15,202,564 15,244,714 15,238,236Number of shares at endof period 15,208,989 15,251,688 15,193,188Number of personnel atend of the period 1,226 1,163 1,197Commitments and contingencies, MEUR 30.9.2009 30.9.2008 31.12.2008Commitments and contingencies 5.3 2.9 2.2Financing commitments 0.3 0.8 0.6Calculation of financial ratios Profit for the financial period attributable to equity holders of the parent companyEarnings per ------------------------------------------------------share = Adjusted average number of shares Shareholders' equity - minority holdingEquity per -------------------------------------------------share = Adjusted number of shares at year endEquity ratio = Shareholders' equity x 100 ------------------------------------------------- Balance sheet total - advances received (Interest-bearing liabilities - cash,Gearing = bank balances and financial assets) x 100 ------------------------------------------------- Shareholders' equityNet working Inventories + non-interest-bearing current receivablescapital = - non-interest-bearing current liabilitieshttp://hugin.info/132524/R/1350268/325759.pdfhttp://hugin.info/132524/R/1350268/325760.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 27.10.2009 - 08:30 Uhr
Sprache: Deutsch
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