SCANFIL PLC INTERIM REPORT 26 OCTOBER 2018 8.00 A.M.
SCANFIL GROUP’S INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2018
Q3/2018: Stabilizing growth.
July – September 2018
– Turnover totalled to EUR 131.5 million (Q3 2017: 130.8)
– Operating profit EUR 8.8 (8.5) million, 6.7% (6.5%) of turnover
– Profit was EUR 6.9 (5.2) million
– Earnings per share amounted EUR 0.11 (0.08)
January – September 2018
– Turnover totalled to EUR 422.8 million (1-9 2017: 385.5)
– Operating profit EUR 30.3 (21.7) million, 7.2% (5.6%) of turnover
– Profit for the review period was EUR 22.5 (15.3) million
– Earnings per share were EUR 0.35 (0.24)
Future outlook
Scanfil specifies its estimates of its turnover and operating profit in 2018, estimating that the turnover will be EUR 545 – 570 million and the operating profit will amount to EUR 36 – 39 million.
Previously Scanfil estimated that its turnover for 2018 will be EUR 545 – 585 million and the operating profit will amount to EUR 36 – 40 million.
| KEY FIGURES | |||||||
| Q3/2018 | Q3/2017 | Change % | Q1-Q3/2018 | Q1-Q3/2017 | Change % | 1-12/2017 | |
| Turnover, EUR million | 131.5 | 130.8 | 1% | 422.8 | 385.5 | 10% | 529.9 |
| Operating Profit, EUR million | 8.8 | 8.5 | 3% | 30.3 | 21.7 | 39% | 31.3 |
| Operating Profit, % | 6.7 | 6.5 | 7.2 | 5.6 | 5.9 | ||
| Net Profit, EUR million | 6.9 | 5.2 | 34% | 22.5 | 15.3 | 46% | 25.8 |
| Earnings per Share, EUR | 0.11 | 0.08 | 33% | 0.35 | 0.24 | 46% | 0.40 |
| Return on Equity, % | 22.8 | 18.3 | 22.2 | ||||
| Equity Ratio, % | 43.3 | 37.9 | 40.7 | ||||
| Net Gearing, % | 28.4 | 44.9 | 32.6 | ||||
| Net Cash Flow from Operations, EUR million | 16.0 | 7.3 | 120% | 21.3 | |||
| Employees (Average) | 3 419 | 3 212 | 6% | 3 254 | |||
Petteri Jokitalo, CEO of Scanfil plc:
“As expected, the increase in turnover evened out during the third quarter. The turnover increased in the Energy & Automation, Medtech, and Urban Application segments. Instead, sales decreased in the Networks and Other Industries segments as expected from the year before.
The quarter was a strong one in terms of other key figures. Operating profit was 6.7% of turnover, and the net result increased by approximately one-third year-on-year. Return on equity continued to improve, being at a good level at 22.8%. The equity ratio improved to 43% and net gearing decreased to 28%. At the end of September, the net cash flow from operations was at a record level at EUR 16 million.
I am satisfied with the progress of our strategy during the year. Our customer portfolio is broad and well-balanced, with our largest customer accounting for 12% of our turnover. We are able to serve both our global and local customers well with our current factory network and service portfolio.
We have diversified the service range of our plants to correspond to customer needs, depending on whether a plant is close to customer markets or customer R&D. In Sweden, in particular, we have already gone far in implementing the “Close to customer R&D” strategy, with positive results to show: the acquisition of new customers is making strong progress and the turnover of plants is increasing.
The Atlanta plant has also developed positively. The activities of our global customers in the US internal markets and their needs there for a local contract manufacturer are clearly increasing.
This positive development is partly based on our broad and demanding customer base and, of course, on Scanfil’s personnel. In contract manufacturing, in particular, the personnel play a crucial part and, at best, make us positively differentiate from the competition. Right now we are seeing exactly this type of positive development. I want to thank all Scanfil employees for your good and hard work and excellent results.
As communicated during the year, we expect sales and operating profit for the second half of the year to be lower than for the first half. Based on seen and expected near term customer demand, we can now narrow the guidance range for 2018. Our new guidance for the turnover is EUR 545 – 570 million and operating profit EUR 36 – 39 million.”
Financial Development
The Group’s turnover for January–September was EUR 422.8 (385.5) million, an increase of 9.7% on the corresponding period for the previous year. The Group’s operating profit for January–September was EUR 30.3 (21.7) million, which is 7.2% (5.6%) of turnover. Operating profit increased by approximately 39.4% on the previous year. In addition to the positive turnover trend, the overall improvement in productivity also contributed to growth in operating profit. The net profit for the period under review was EUR 22.5 (15.3) million.
Earnings per share for the period under review were EUR 0.35 (0.24). The return on investment was 21.2% (16.4%). The improvement in return on investment was mainly due to good profit trends.
The Group’s turnover for July–September was EUR 131.5 (130.8) million, showing an increase of 0.6% from the corresponding period last year. Operating profit stood at EUR 8.8 (8.5) million, comprising 6.7% (6.5%) of turnover. Operating profit increased by 3.2% compared with the corresponding quarter in the previous year.
The result for July–September was EUR 6.9 (5.2) million. Changes in exchange rates had a positive impact on the result for the third quarter. In the previous year, the net result for the third quarter included EUR 0.4 million in back taxes, resulting from the tax audit aimed at the Polish subsidiary. The back taxes resulted from transfer prices between Group companies in 2014, and the Group is considering the option of applying for a refund through an EU arbitration process.
Production at Partnertech Electronics Co., Ltd., a Chinese subsidiary of Scanfil Sweden AB, was discontinued during the third quarter of 2016. The subsidiary was dissolved through a voluntary liquidation procedure during the review period. The dissolution had no impact on profit or loss reported in the interim report.
Publication of financial releases
This stock exchange release is a summary of the Scanfil Group’s interim report 1 January – 30 September 2018 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.
SCANFIL PLC
Petteri Jokitalo
CEO
Additional information:
CEO Petteri Jokitalo
Tel +358 8 4882 111
Distribution NASDAQ OMX, Helsinki
Major Media
www.scanfil.com
Scanfil is an international contract manufacturer and system supplier for the electronics industry with 40 years of experience in demanding contract 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 include mobile and communications network devices, automation system modules, frequency converters, lift control systems, analysers, various slot and vending machines, and devices related to medical technology and meteorology. Scanfil services are used by numerous international automation, energy, IT and health service providers, as well as companies operating in the field of urbanisation. Scanfil’s network of factories consists of 10 production units in Europe, Asia and North America. The total number of employees is about 3,400.
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 Oyj 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 Oyj 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.