Scanfil plc Financial statement 22 February 2022 at 8.00 a.m. EET
Scanfil Group’s Financial Statement 2021
Record high turnover supported by strong customer demand
- Turnover totalled EUR 191.7 million (10-12 2020: 154.1), an increase of 24.5%.
- Adjusted operating profit was EUR 10.2 (10.4) million, 5.3% (6.8%) of turnover.
- Operating profit was EUR 9.5 (4.3) million, 5.0% (2.8%) of turnover.
- Adjusted net profit was EUR 9.1 (9.2) million.
- Net profit was EUR 8.4 (3.1) million.
- Adjusted earnings per share were EUR 0.14 (0.14), earnings per share were EUR 0.13 (0.05).
- Turnover totalled EUR 695.7 million (1-12 2020: 595.3), an increase of 16.9%.
- Adjusted operating profit was EUR 40.3 (39.1) million, 5.8% (6.6%) of turnover.
- Operating profit was EUR 39.6 (44.4) million, 5.7% (7.5%) of turnover. Comparison includes a capital gain of EUR 11.4 million from the sale of the Hangzhou factory.
- Adjusted net profit was EUR 32.0 (32.5) million.
- Net profit was EUR 29.8 (36.9) million.
- Adjusted earnings per share were EUR 0.50 (0.50), earnings per share were EUR 0.46 (0.57).
- The Board of Directors proposes a dividend of EUR 0.19 (0.17) per share to be paid for year 2021, increase of 11.8%
Scanfil estimates that its turnover for 2022 will be EUR 710–760 million and its adjusted operating profit will be EUR 43–48 million.
The guidance involves uncertainty especially arising from the availability and price level of semiconductors and the delivery capability of the supply chain. In addition, the COVID-19 pandemic and risks related to it creates uncertainty.
Long-Term Financial Targets
- Organic turnover growth of 5%-7% p.a. and operating profit level of 7%
- Increasing dividend, which is approximately 1/3 of the earnings per share
|Q4 2021||Q4 2020||Change%||2021||2020||Change %|
|Turnover, EUR million||191.7||154.1||24.5||695.7||595.3||16.9|
|Operating Profit, EUR million||9.5||4.3||120.8||39.6||44.4||-10.8|
|Operating Profit, Adjusted1, EUR million||10.2||10.4||-1.8||40.3||39.1||3.0|
|Operating Profit, %||5.0||2.8||5.7||7.5|
|Operating Profit, Adjusted, %||5.3||6.8||5.8||6.6|
|Net Profit, EUR million||8.4||3.1||169.7||29.8||36.9||-19.4|
|Net Profit, Adjusted, EUR million||9.1||9.2||-1.1||32.0||32.5||-1.4|
|Earnings per Share, EUR||0.13||0.05||168.1||0.46||0.57||-19.8|
|Earnings per Share, Adjusted, EUR||0.14||0.14||-1.5||0.50||0.50||-1.9|
|Return on Equity, %||15.2||21.1|
|Return on Equity, Adjusted, %||16.3||18.4|
|Equity Ratio, %||45.3||54.3|
|Net Gearing, %||28.9||9.9|
|Net Cash Flow from Operations, EUR million||-12.5||35.2||-135.6|
1 The adjusted operating profit for 2021 includes an adjustment of EUR -0.7 million related to the closure of the Hamburg factory, booked in the fourth quarter of the 2021. The adjusted operating profit for 2020 includes the following adjustments: EUR +11.4 million related to the divestment of the Hangzhou factory, booked in the third quarter of 2020 and EUR -6.1 million related to the closure of the Hamburg factory, booked in the fourth quarter of 2020.
CEO Petteri Jokitalo:
“Driven by the strong customer demand, the year 2021 became a record year of growth and turnover. This all despite the pandemic and the challenges of material availability. Turnover increased by 16.9% to EUR 696 million. Nearly reaching the target of EUR 700 million set for 2023 – two years ahead of schedule!
The turnover for the last quarter of the year was record high EUR 191.7 million which increased by 24.5% compared to the last year. Growth was propelled by strong customer demand and in addition increase in material costs.
Adjusted operating profit in 2021 was EUR 40.3 million, 5.8% of turnover and the fourth quarter was at EUR 10.2 million, 5.3% of turnover falling short of the long-term target level of 7%.
The biggest negative effects on operating profit for the period were caused by material availability challenges, abnormal high prices paid for spot market purchases, and the relocation of production of the Hamburg factory. The challenging material situation hampered us, especially in the second half of the year. The product transfer from Hamburg was completed by the end of the third quarter, and operations at the Hamburg factory ended during the fourth quarter.
Net cash flow from operating activities in 2021 was EUR 12.5 million negative, mainly due to a strong increase in inventories. The increase in inventories was affected by rising customer demand as well as a slowdown in inventory turnover caused by challenging material availability situation, and higher material costs. Inventory management will continue to be the focus area in 2022.
Scanfil’s balance sheet is still strong, with an equity ratio of 45.3% and a gearing of 28.9%, enabling the necessary investments and the implementation of a dividend policy. The Board of Directors proposes a dividend of EUR 0.19 per share for 2021, an increase of 11.8% compared to a year ago. If implemented, Scanfil’s dividend will increase for the ninth year in a row.
The demand outlook for Scanfil’s customers is strong for 2022, and our focus is very clear: we continue to respond to our customer demand, organic growth and turning our profitability to the target we have set. The short-term challenges and risks are mainly related to the availability of materials, especially semiconductors, which we believe will continue to be challenging at least in the first half of the year.
We expect our turnover continues to grow, being EUR 710–760 million this year, and operating profit to increase to EUR 43–48 million euros
We aim for organic annual growth of 5–7% and an operating profit level of 7% in the longer term. To reach our growth target, we have acquired more production space at our Atlanta and Wutha factories, and started planning expansion options at our Suzhou factory. In the long run, we see North America and Asian markets as interesting expansion areas.
The year 2021 was strongly two-folded: strong customer demand combined with material availability challenges, the pandemic, and the relocation of production of Hamburg was very demanding on our personnel. I want to thank our dedicated employees for their perseverance and good work, as well as the support and trust of our customers.
The Group’s turnover for January–December was EUR 695.7 (595.3) million, an increase of 16.9% compared to the previous year. Turnover includes EUR 42.5 million of low margin invoicing, of which EUR 32.0 million was separately agreed purchases related to securing the availability of materials needed for production. These purchases related to securing deliveries were usually spot market purchases of materials and special freights. This invoicing was no or low margin for Scanfil in 2021. Turnover excluding invoicing of separately agreed purchases was EUR 663.7 million, an increase of 11.7% compared to the previous year. In addition, turnover included EU 10.5 million of low-margin intermediary trading.
Turnover by customer segment developed as follows:
Advanced Consumer Applications: Turnover increased by EUR 53.4 million (35.3%) compared to January–December in 2020. The key drivers behind this strong growth were new customer ramp-ups and good demand in elevator products and hand-over solutions. Invoicing related to securing deliveries was EUR 14.6 million.
Automation & Safety: Turnover increased by EUR 2.8 million (2.0%). The development has been steady. Invoicing related to securing deliveries was s EUR 4.9 million.
Connectivity: Turnover increased by EUR 4.4 million, to EUR 33.0 million (15.5%). Invoicing related to securing deliveries was EUR 0.1 million.
Energy & Cleantech: Turnover increased compared to the corresponding period in 2020 by EUR 46.5 million (34.3%). The key drivers behind this strong growth were good demand in recycling and energy systems. Invoicing related to securing deliveries was EUR 8.9 million.
Medtech & Life Science: Turnover increased by EUR 12.8 million (11.8%) compared to the corresponding period in 2020. Invoicing related to securing deliveries was EUR 3.5 million.
Turnover of “Discontinued” was EUR 10.5 million and consisted only low margin intermediary trading.
The Group’s operating profit for January–December was EUR 39.6 (44.4) million, 5.7% (7.5%) of turnover. The operating profit for 2021 includes an adjustment of EUR -0.7 million related to the closure of the Hamburg factory. The operating profit for the comparison year includes adjustments of EUR +11.4 million related to the divestment of the Hangzhou factory and EUR -6.1 million related to the closure of the Hamburg factory. The adjusted operating profit was EUR 40.3 (39.1) million, representing 5.8% (6.6%) of turnover. The operating profit was positively affected by the increase in customer demand, but received a negative impact from the Hamburg production transfer as well as inefficiency caused by material shortages. In addition, the transitory low margin invoicing of EUR 42.5 million lowered the profit margin. The negative impact raising from these was approximately EUR 5.0 million i.e., 0.7% of turnover.
The net profit for the review period was EUR 29.8 (36.9) million. The adjusted net profit was EUR 32.0 (32.5) million.
Earnings per share for the review period were EUR 0.46 (0.57). The adjusted earnings per share were EUR 0.50 (0.50). Return on investment was 15.3% (19.5%).
The Group’s effective tax rate was 21.0% (11.7%). The comparison figure was affected by the low tax on sales gains from the Chinese subsidiary Scanfil (Hangzhou) Co., Ltd. and the tax relief related to investments made in Poland’s special economic zone.
The Group’s turnover in October–December was EUR 191.7 (154.1) million. Turnover increased by 24.5% compared to the corresponding period of the previous year. This turnover includes EUR 14.4 million of invoicing related to price increases of materials, components and freights and securing deliveries. Turnover for the period excluding the above-mentioned invoicing was EUR 177.3 million, an increase of 15.1%.
The operating profit was EUR 9.5 (4.3) million, 5.0% (2.8) of the turnover. The adjusted operating profit for the fourth quarter was EUR 10.2 (10.4) million, or 5.3% (6.8%) of turnover. The adjustments were related to the costs of the closure of the Hamburg factory: EUR -0.7 million in the fourth quarter of 2021 and in the comparison period EUR -6.1 million. Inefficiencies due to material shortages had a negative impact on the operating profit. In addition, the low margin invoicing related to securing deliveries of EUR 14.4 million lowered the profit margin. The total negative impact on the operating profit was about EUR 2.0 million or about 1.0 % of the turnover.
The net profit in October–December was EUR 8.4 (3.1) million. The adjusted net profit was EUR 9.1 (9.2) million.
Annual general meeting in 2022 and proposals by the board of directors
Scanfil plc’s Annual General Meeting has been planned to be held on April 21, 2022, as a remote meeting in accordance with the temporary legislative act.
The parent company’s distributable assets total EUR 64,773,284.67, including undistributed profits of EUR 31,264,893.13. The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.19 (0.17) per share, totalling EUR 12,316,038.45 be paid for the financial year ending on December 31, 2021. The dividend will be paid to shareholders, who are recorded on 25 April 2022 in the company’s list of shareholders maintained by Euroclear Finland Oy. The dividend will be paid on May 2, 2022.
No significant changes have taken place in the company’s financial position since the end of the financial year. In the view of the Board of Directors, the proposed dividend pay-out will not put the company’s liquidity at risk.
The proposal of Scanfil plc’s nomination committee to the General Meeting for the composition of Scanfil plc’s Board of Directors will be published in connection with the invitation to the General Meeting.
Publication of financial releases
This stock exchange release is a summary of the Scanfil Group’s Financial Statement 2021 and includes the most relevant information of the report. The complete report is attached to this release as a pdf file and is also available on the company’s website at www.scanfil.com.
In conjunction with releasing our results, we arrange English webcast for analysts, investors and media will be held on the same day at 10:00–11:00 a.m. EET. Results will be presented by CEO Petteri Jokitalo.
You can register and join the webcast at https://scanfil.videosync.fi/2021-q4-tulos/. The audience can ask questions via Chat. Questions will be addressed at the end of the conference.
An on-demand version of the webcast and the presentation material will be available on the company’s website later on the same day.
CEO Petteri Jokitalo
Tel +358 8 4882 111
Scanfil is an international manufacturing partner and system supplier for the electronics industry with 40 years of experience in demanding manufacturing. Scanfil provides its customers with an extensive array of services, ranging from product design to product manufacturing, material procurement and logistics solutions. Vertically integrated production and a comprehensive supply chain are the foundation of Scanfil’s competitive advantages: speed, flexibility and reliability.
Typical Scanfil products are modules or integrated products for e.g. self-service application, automation systems, wireless connectivity modules, climate control systems, collection and sorting systems, analyzers and environmental measurement solutions. Scanfil services are used by numerous international automation, safety, energy, cleantech and health service providers, as well as companies operating in the field of urbanization. Scanfil’s network of factories consists of nine production units in Europe, Asia and North America.
Not to be published or distributed, directly or indirectly, in any country where its distribution or publication is unlawful. Forward looking statements: certain statements in this stock exchange release may constitute “forward-looking” statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of Scanfil plc to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this stock exchange release, such statements use such words as “may,” “will,” “expect,” “anticipate,” “project,” “believe,” “plan” and other similar terminology. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of Scanfil plc to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking information contained in this stock exchange release is current only as of the date of this stock exchange release. There should not be an expectation that such information will in all circumstances be updated, supplemented or revised, except as provided by the law or obligatory regulations, whether as a result of new information, changing circumstances, future events or otherwise.