Vacon Plc Interim report 1 January - 30 June 2014

Vacon Plc, Stock Exchange Release, 30 July 2014 at 9.30 a.m. (EET)

In this stock exchange release Vacon is publishing information included in the interim report that has a significant impact on the value of securities. The full interim report is in the appendix to this release and can be downloaded from the company's website in Finnish at www.vacon.fi and in English at www.vacon.com.

April-June highlights: 

Order intake totalled MEUR 105.5 (MEUR 114.0 in April-June 2013), a decline of 7.5% from the corresponding period in the previous year. Revenues totalled MEUR 103.3 (MEUR 103.4). Operating profit was MEUR 11.6, or 11.2% of revenues (MEUR 10.4 and 10.0%), growth of 11.8% from the corresponding period in the previous year.Net cash flow from operating activities was MEUR 9.7 (MEUR 5.8).Earnings per share were EUR 0.27 (EUR 0.25).The increase in the number of Company shares through an issue of shares without payment (share split) approved by the Annual General Meeting of Vacon Plc on 27 March 2014 was registered in the Trade Register on 1 April 2014. The number of Company shares was increased by issuing new shares without payment to the shareholders in proportion to their holdings, so that one (1) share was given for each existing share. The AGM in March 2014 adopted the proposal of the Board of Directors to pay a dividend of EUR 1.30 a share, in total MEUR 19.8. The dividend was paid on 8 April 2014. The new shares registered in connection with the share split did not entitle holders to the dividend for the 2013 fiscal year decided on at the AGM.

January-June highlights: 

Order intake totalled MEUR 210.3 (MEUR 214.2 in January-June 2013), a decline of 1.8% from the corresponding period in the previous year. Revenues totalled MEUR 192.5 (MEUR 194.8), a decline of 1.1% from the corresponding period in the previous year. Operating profit was MEUR 18.3, or 9.5% of revenues (MEUR 16.1 and 8.3%), an increase of 13.3% from the corresponding period in the previous year.Net cash flow from operating activities was MEUR 9.1 (MEUR 22.4).Earnings per share were EUR 0.43 (EUR 0.38).

January-June key indicators:

MEUR4-6/
20144-6/
2013Change %1-6/
20141-6/
2013Change
%1-12/
2013 Order intake 105.5 114.0 -7.5% 210.3 214.2 -1.8% 399.8 Revenues 103.3 103.4 -0.2% 192.5 194.8 -1.1% 403.0 Operating profit 11.6 10.4 11.8% 18.3 16.1 13.3% 40.6 % of revenues 11.2 % 10.0%   9.5% 8.3%   10.1% Profit before taxes 11.3 10.2 10.5% 18.0 16.3 10.6% 39.7 Net cash flow from operating activities
9.7
5.8
67.1%
9.1
22.4
-59.4%
46.7 Earnings per share, EUR
0.27
0.25
7.3%
0.43
0.38
14.0%
0.92

 

MEUR   30.6.
201430.6.
2013Change%31.12.
2013 Order book       64.6 69.5 -7.0% 46.8 Interest-bearing net liabilities      
6.1
-3.9  
-17.2 Gearing, %       5.8% -3.8%   -14.7% Gross capital expenditure      
10.7
10.2
5.0%
19.7

 

President and CEO Vesa Laisi: Profitability improved in the second quarter

"The Vacon team put in a good performance in the second quarter of 2014. The company's profitability improved, even though our low-power products with a smaller profit margin continued to form a high proportion of sales. Our long-term efforts to reduce material costs helped us improve profitability despite the unfavourable sales product mix. According to market research institutions, the AC drive market growth remained slow in the first half of 2014.

Our order intake exceeded the level in the period for comparison in most of our key customer sectors, but developments were not as favourable in demand for products for the building automation and for renewable energy generation. This weakened the total volume of orders received compared to the period for comparison, when the order intake was exceptionally high. Revenues were similar to those in the previous year. Some orders were postponed at the request of customers to the second half of the year. Sales declined of products for the marine industry and for the mining and metal sector. Sales in other key customer sectors developed positively.

Our strongest region in the April-June period was North and South America, where orders and revenues increased strongly. I am extremely pleased with how we have succeeded in putting our business back on a growth track especially in the USA.

Growth prospects for the AC drive market are encouraging, even though the AC drive market has hardly grown in the past few years. According to market research institutions, there are signs that the market will pick up in the second half of 2014."

Prospects for 2014

Global megatrends, such as urbanisation, increasing industrial automation, energy efficiency, developing markets and renewable energy, all support growth in the AC drive market in the long term. Growth in the AC drive market varies however from year to year, and even from one quarter to another, but as a general rule it is estimated that the AC drive market grows much faster than global average growth in gross national product.

In the assessment of market research institutions, the AC drive market has hardly grown at all during the past three years. A major factor in this has been the overall economic uncertainty, which has caused industrial investment to slow down.

In Vacon's assessment, growth in the AC drive market has also continued to be slow in the first half of 2014. The company considers that market growth prospects are better in the second half of 2014 than in the first half of the year.

During the past few years the Company has expanded and renewed its product offering, which places the Company in a strong position to grow faster than the AC drive market in 2014. Vacon's goal is to improve profitability in 2014. Key factors contributing to an improvement in profitability are the cost benefits from transferring material sourcing to lower cost countries and raising overall efficiency in operations.

Market guidelines for 2014

Vacon is retaining the market guidelines it published earlier and estimates that its revenues will increase 5-15% and its operating profit percentage excluding one-time items will be 11-13% in 2014.

Revenues in 2013 totalled EUR 403.0 million and the operating profit percentage excluding one-time items was 10.1%.

Vacon's financial targets for the period 2014-2020

Growth: The target is to achieve an average annual revenue growth of over 10%. The growth target is based on growing the business organically in a market environment where the AC drives market grows clearly faster than the average Gross Domestic Product (GDP). Selective acquisitions can be used to further accelerate the growth.

Profitability: The long-term profitability target is to achieve a sustainable EBIT margin level of 14%. Vacon focuses on growth and on measures that improve the company's efficiency in the long term and thus deliver a higher absolute EBIT and shareholder value.

Vacon does not consider the long term financial targets as market guidance for any given year during the period 2014-2020. It will issue separate market guidance annually.

Financial reports in 2014

Vacon is publishing next interim report in 2014 as follows:

January-September: Wednesday, 22 October at 9.30 am

Formal statement

This release contains certain forward-looking statements that reflect the current views of the company's management. Due to the nature of these statements, they contain risks and uncertainties and are subject to changes in the general economic situation and in the company's business sector.

Vacon in brief

Vacon is driven by a passion to develop, manufacture and sell the best AC drives and inverters in the world - and provide customers with efficient product lifecycle services. Our AC drives offer optimum process control and energy efficiency for electric motors. Vacon inverters play a key role when energy is produced from renewable sources. Vacon has production and R&D facilities in Europe, Asia and North America, and sales offices in 30 countries. Further, Vacon has sales representatives and service partners in nearly 90 countries. In 2013, Vacon's revenues amounted to EUR 403.0 million, and the company employed globally approximately 1,600 people. The shares of Vacon Plc (VAC1V) are quoted on the main list of the Helsinki stock exchange (NASDAQ OMX Helsinki).

Driven by Drives, www.vacon.com

Vaasa, 30 July 2014

VACON PLC

Board of Directors

For more information please contact:

Vesa Laisi, President and CEO, Vacon Plc, phone +358 (0)40 8371 510, vesa.laisi(at)vacon.comAnn-Louise Brännback, CFO, Vacon Plc, phone +358 40 8371 376, ann-louise.brannback(at)vacon.comSebastian Linko, Director, Corporate Communications and Investor Relations, Vacon Plc, phone +358 (0)40 8371 634, sebastian.linko(at)vacon.com 

Conference for media and analysts

A briefing for the financial analysts and media will be held on 30 July 2014 at Pörssitalo, Fabianinkatu 14 A, 2nd floor, Helsinki (entrance via Nasdaq OMX Helsinki's reception) at 11:30 am Finnish time (EET).

Dial-in conference for investors and investment analysts

A dial-in conference for investors and investment analysts will be held at 3.00 p.m. (EET) on 30 July 2014. President and CEO Vesa Laisi, CFO Ann-Louise Brännback and Director, Corporate Communications and Investor Relations Sebastian Linko will participate in the conference. Please call Finland Toll +358(0)9 2310 1618 or UK Toll +44(0)20 3427 1937 and request to be connected to the Vacon call (Confirmation code 5282750). A recording of the conference will be available for seven days at Finland Toll +358(0)9 2310 1650 or UK Toll +44(0)20 3427 0598 and access code 5282750#.

Webcast URL: http://www.media-server.com/m/p/t2ghg2j2

The presentation material will be available before the start of the briefing at the Vacon's website www.vacon.com > Investors > Reports and presentations.

Distribution:

NASDAQ OMX Helsinki
Financial Supervisory Authority
Main media

ATTACHMENTS

Vacon Plc Interim Report January-June 2014
Vacon Interim Report Q2/2014 Results Presentation


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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Vacon Oyj via Globenewswire
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