23.7.2024 08:00:00 EEST | Componenta Oyj | Half Year financial report
Componenta Corporation, Stock Exchange Release, 23 July 2024 klo 8.00 a.m. EEST
January-June 2024
- Net sales totalled EUR 50.0 million (EUR 60.2 million)
- EBITDA was EUR 1.9 million (EUR 5.4 million)
- The operating result was EUR -0.8 million (EUR 2.5 million)
- Cash flow from operating activities was EUR 1.8 million (EUR 5.4 million).
April-June 2024
- Net sales totalled EUR 26.4 million (EUR 29.5 million)
- EBITDA was EUR 2.1 million (EUR 2.6 million)
- The operating result was EUR 0.7 million (EUR 1.1 million)
- Cash flow from operating activities was EUR 2.6 million (EUR 4.7 million).
The information presented in this half-year financial report concerns Componenta Group's Performance in January-June 2024 and in the corresponding period of 2023 unless otherwise stated. The figures in this bulletin are unaudited.
Guidance for 2024 unchanged
Componenta expects the Group's net sales and EBITDA to improve year-on-year. The Group's net sales in 2023 were EUR 101.8 million, and its EBITDA was EUR 5.3 million. The improvement in net sales and EBITDA in 2024 is expected to focus clearly on the second half of the year.
The possible development of customers' sales volumes, poor availability of raw materials, increases in the prices of raw materials and electricity, and the general economic situation, labour market situation and competitive climate may affect business outlooks. In addition, the development of sales and profitability involves uncertainties because of increased geopolitical tensions. An unfavourable development of the geopolitical situation may also have a negative impact on the financial market, sales volumes, the availability and price development of raw materials and electricity, and the availability of foreign labour, all of which increase forecasting uncertainty.
Sami Sivuranta, President and CEO:
"The first half of the year presented two different streams. In the first quarter, the development of volumes and the order book remained well below expectations, particularly because of the low level of demand prevailing in the agricultural machinery industry across Europe. Overall, the decrease was caused by lower delivery volumes in the first half of the year and lower main raw material and energy index levels included in sales prices compared with the corresponding period in the previous year. Our order book started to grow slightly in the second quarter. In May, we also announced a deal in the defence equipment industry, the impacts of which will become visible in the company's operations during the rest of the year and in the coming years.
In the first quarter, our profitability was weakened by low operating rates, especially in the Karkkila and Pori foundries, combined with volume products taken into serial production. These had a clear impact on production efficiency and the quality level, but systematic measures to improve quality were successfully implemented during the second quarter. We also adjusted our operations to meet the temporarily lower volume and order book levels. As a result of this, profitability improved clearly during the second quarter compared with the first quarter.
We expect volumes in the second half of the year to be better than in the first half. The ongoing ramp-up of serial products will have a positive impact on our result as deliveries return to their expected level. While there are differences in order backlogs between customers and sectors, the outlook for 2024 as a whole remains generally positive. Our liquidity remained at a good level throughout the first half of the year.
Inflation has levelled off, but the impacts of the political strikes in the early part of the year continued to burden our profitability in the second quarter.
We were able to maintain good service capability across the Group despite the challenging operating environment. The general availability of raw materials and other materials is currently at a good level. We are actively monitoring market developments and Net sales and EBITDA decreased Half-Year Financial Report 1 January-30 June 2024 3 ensuring that our own supply chains continue to work effectively. There are currently no significant near-term risks in the availability of electricity, but the prices and price fluctuations of electricity were higher than expected in the second quarter.
In line with our strategy, sustainability is one of the priorities in our operations and their development. For example, we are currently carrying out energy audits in our units for new energy efficiency measures. During the review period, we continued to prepare for the requirements of the CSRD on corporate sustainability reporting, according to which Componenta is required to report for 2024. We are determined to continue to meet our customers' expectations and demands in the coming years. As a contract manufacturer, we will continue to actively pursue measures to strengthen our market position, and we are working to be the preferred sustainable total supplier to our customers, with a wide offering."
Key figures | Jan 1-Jun 30, 2024 | Jan 1-Jun 30, 2023 | Change, % | Jan 1-Dec 31, 2023 |
Net sales, EUR thousand | 50,007 | 60,228 | -17.0 | 101,809 |
EBITDA, EUR thousand | 1,915 | 5,411 | -64.6 | 5,278 |
Operating result, EUR thousand | -794 | 2,503* | -131.7 | 3,762** |
Operating result, % | -1.6 | 4.2* | -138.2 | 3.7** |
Result after financial items, EUR thousand | -1,989 | 1,374 | -244.8 | 1,568 |
Net result, EUR thousand | -1,989 | 1,428 | -239.4 | 1,547 |
Basic earnings per share, EUR | -0.20 | 0.15 | -239.3 | 0.16 |
Diluted earnings per share, EUR | -0.20 | 0.14 | -239.7 | 0.16 |
Cash flow from operating activities, EUR thousand | 1,832 | 5,434 | -66.3 | 1,126 |
Interest-bearing net debt, EUR thousand | 8,876 | 1,786 | 397.0 | 9,097 |
Net gearing, % | 37.6 | 7.0 | 436.9 | 35.6 |
Return on equity, % | -16.2 | 11.4 | -241.5 | 6.2 |
Return on investment, % | -4.0 | 12.9 | -131.1 | 9.8 |
Equity ratio, % | 40.3 | 41.2 | -2.1 | 45.0 |
Capital expenditure incl. lease liabilities, EUR thousand | 1,356 | 1,689 | -19.7 | 4,066 |
Number of personnel at the end of the period, incl. leased workers | 627 | 636 | -1.4 | 615 |
Average number of personnel during the period, incl. leased workers | 622 | 638 | -2.5 | 631 |
Order book at the end of the period, EUR thousand | 10,807 | 10,419 | 3.7 | 14,532 |
* The comparative period 2023 has been slightly adjusted due to a change in the principle of preparing real estate valuations. More information about the change in the accounting principle and its effects on previous years' figures can be found in the section "Valuation of properties and land areas" in the accounting principles for the consolidated financial statements published 15th March 2024.
** The operating result for 2023 includes a non-recurring income of EUR 4.2 million from the reversal of the impairment loss related to the foundry business's production machinery and equipment. More information on the reversal of the impairment loss can be found in the note "Tangible assets" in the consolidated financial statements published 15th March 2024.
Events after the review period
Componenta acquires the operations of the Kalajoki plant and the Sepänkylä machining and service centre from Fortaco Group for approximately EUR 2.8 million. The transaction strengthens Componenta's service offering and capability for machine and equipment manufacturers. Componenta announced on 22 July 2024 that it had signed an agreement to acquire operations of Kalajoki and Sepänkylä, including their inventories and fixed assets, from Fortaco. The net sales of the acquired business in 2023 were approximately EUR 9.6 million.
According to the plan, the transaction will be carried out in two stages, so that first Componenta Manufacturing Oy acquires the operations of Kalajoki and Sepänkylä, including their inventories and fixed assets, excluding real estate, EUR 1.8 million at the purchase price from Fortaco Group approximately on 1 October 2024. In the second phase, Componenta Manufacturing Oy buys the properties used by the Kalajoki and Sepänkylä businesses from Fortaco Oy no later than one year after the completion of the first phase. Until then, Componenta pays rent to Fortaco for the properties in Kalajoki and Sepänkylä. The paid rent is deducted from the purchase price of the real estate EUR 1 million. Componenta finances the transactions with its internal financing and the financing limits at its disposal.
The final closing of the transaction will depend on the usual terms and conditions of the acquisitions. The parties aim to implement the implementation of the transaction on 1 October 2024, and the business operations will become part of Componenta as of the closing date of the transaction. Componenta will publish a separate release on the final closing of the transaction.
Componenta makes a thorough assessment of the accounting principles of the object and prepares a purchase price allocation of the acquisition after the transaction has been completed. Once the purchase price allocation has been completed, Componenta will inform about its effects, if necessary, by means of a separate release.
If realized, the transaction will not have an impact on Componenta's profit guidance for 2024.
Webcast
President and CEO Sami Sivuranta will present the Results Review for investors, analysts and the media in a webcast on 23 July 2023 at 10 a.m. EEST. The webcast will be in Finnish. Please follow the webcast via the company pages at www.componenta.com or via this link: https://live.esf.fi/componenta-h1-2024.
Helsinki 23 July 2024
COMPONENTA CORPORATION
Board of Directors
For further information, please contact:
Sami Sivuranta, President and CEO, tel. +358 10 403 2200
Marko Karppinen, CFO, tel. +358 10 403 2101
Distribution:
NASDAQ Helsinki
Main media
www.componenta.com
Componenta Corporation is an international technology company and Finland's leading contract manufacturer in the machine building industry. Sustainability and customers' needs are at the core of the company's extensive technology portfolio. Componenta produces components for its global customers, which are manufacturers of machinery and equipment. The company's shares are listed on the Nasdaq Helsinki. www.componenta.com
