January–September 2023
- Net sales increased to
EUR 80.1 million (EUR 79.0 million ) -
EBITDA also improved amounting to
EUR 5.8 million (EUR 4.3 million ) -
Operating result was
EUR 5.7 million (EUR 0.1 million) * -
Cash flow from operating activities was
EUR 2.7 million (EUR 2.7 million )
July–September 2023
- Net sales was
EUR 19.9 million (EUR 24.6 million ) -
EBITDA was
EUR 0.4 million (EUR 0.5 million ) -
Operating result was
EUR 3.2 million (EUR -0.9 million) * -
Cash flow from operating activities was
EUR -2.7 million (EUR 0.6 million )
*The operating result of the review period includes a non-recurring profit of
The information presented in this business review concerns the development of Componenta Group in January–September 2023 and in the corresponding period in 2022, unless otherwise stated. This is not an interim report in accordance with IAS 34. The company complies with the semiannual reporting in accordance with the Finnish Securities Markets Act and discloses business reviews for the first three and first nine months of the year, which present key information regarding the company’s financial position and development.
The financial information presented in this business review have not been audited.
Componenta’s guidance for 2023
On
Poor availability of raw materials, increases in the prices of raw materials and electricity, the general economic situation and competitive climate, and the development of customers’ sales volumes may affect business outlooks. In addition, the development of sales and profitability involves uncertainties because of the intensified geopolitical situation. 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 three quarters went well as a whole. Our net sales and EBITDA continued to grow in line with our strategy. Our liquidity remained at a very good level throughout the review period. However, the general uncertainty in the market has increased and it has also been reflected in the development of the order book of our main customers. At the same time, the decision-making time from submitting an offer to accepting an offer has been extended. This has been reflected in slowed new sales, as well as in delays in the start-up timings of new production. Despite this, production volumes have remained at a reasonable level for the end of 2023 as well, although in the short term, with general material and component availability improving, our customers have begun to pay more attention to working capital management and, with it, to optimizing inventory levels. Our liquidity has remained very good even after the review period.
Profitability was somewhat burdened by sector-specific wage agreements put in force in the first half of the year, which in addition to inflation significantly increased our costs. In the review period, profitability was also affected by production and quality challenges in Karkkila. These challenges began with scheduled maintenance related to one of the main production machines and lasted throughout the third quarter, contrary to the original schedule. After the review period, production has already normalized. However, we ensured deliveries to our customers on schedule, and our service capability throughout the Group has remained good despite changes in the operating environment.
In terms of our main raw materials and electricity, the cost development is largely tied to our customer agreements through indices that are reflected quarterly in our sales prices with a delay. We have also agreed on the transfer of non-indexed cost increases to our customer pricing where applicable during the review period.
The availability of raw materials and other materials has improved clearly and is currently at a good level. The purchase cost level has become to normalise and has partly decreased in the review period even though inflation remains fairly high. The availability of electricity is also currently good and due to the high level of gas reserves in
There are differences among customers and industries in order book, but the outlook has generally remained positive. Our customers are moving their production chains closer to
We will actively continue our efforts to strengthen our market position and further improve our profitability as part of our growth strategy. We are currently preparing and updating our strategy for the next three years. We are aiming to be the primary supplier with an extensive offering for our customers.”
Financial development during the review period
The Group’s operating result was
The Group’s result after financial items was
At the end of the review period, the Group’s cash at bank and in hand totalled
The Group’s net cash flow from operations in the review period was
Componenta's equity ratio at the end of the review period was 46.5% (40.0%). The increase in the equity ratio was mainly due to stronger equity resulting from the improvement of profit and from the reversal of the impairment loss related to the foundry business’ production machinery and equipment. At the end of the review period, interest-bearing net debt was
Long-term liabilities totalled
Key figures | Jan 1−Sep 30, 2023 | Jan 1−Sep 30, 2022 | Change, % | Jan 1−Dec 31, 2022 |
Net sales, EUR thousand | 80,138 | 79,025 | 1.4 | 109,087 |
EBITDA, EUR thousand | 5,810 | 4,297 | 35.2 | 7,086 |
Operating result, EUR thousand * | 5,692 | 142 | 3,916.7 | 1,555 |
Operating result, % | 7.1 | 0.2 | 3,860.9 | 1.4 |
Result after financial items, EUR thousand | 4,040 | -1,148 | 451.8 | -107 |
Net result, EUR thousand | 4,132 | -1,035 | 499.3 | 52 |
Basic earnings per share, EUR | 0.43 | -0.11 | 486.8 | 0.01 |
Diluted earnings per share, EUR | 0.42 | -0.11 | 481.6 | 0.01 |
Cash flow from operating activities, EUR thousand | 2,696 | 2,683 | 0.5 | 6,171 |
Interest-bearing net debt, EUR thousand | 5,844 | 6,009 | -2.7 | 4,818 |
Net gearing, % | 20.6 | 26.1 | -21.0 | 20.0 |
Return on equity, % | 21.0 | -6.0 | 450.0 | 0.2 |
Return on investment, % | 19.0 | 0.5 | 3,700.0 | 4.3 |
Equity ratio, % | 46.5 | 40.0 | 16.3 | 41.1 |
Capital expenditure incl. lease liabilities, EUR thousand | 2,758 | 1,923 | 43.4 | 3,617 |
Number of personnel at the end of the period, incl. leased workers | 631 | 658 | -4.1 | 643 |
Average number of personnel during the period, incl. leased workers | 635 | 641 | -0.9 | 643 |
Order book at the end of the period, EUR thousand | 13,539 | 18,741 | -27.8 | 18,481 |
*The operating result of the review period includes a non-recurring profit of
Risks and business-related uncertainties
The most significant risks related to Componenta’s business operations are risks associated with the operating environment (competitive situation, prices, commodities and the environment), risks related to business operations (customers, suppliers, productivity, production processes, labour market disruptions, contracts, product liability, personnel and information security) and financing risks (availability, liquidity, currency, interest rate and credit).
The availability of certain raw materials such as recycled steel, pig iron, structural steel, aluminium and energy at competitive prices, as well as the uninterrupted supply of energy, is essential for the Group’s business operations. Market prices of electricity remained relatively high during the review period, but decreased significantly towards the end of the period. Because of the intensified geopolitical situation, the availability of raw materials and other materials continues to involve uncertainties in Componenta’s operational activities. In addition, global challenges with the availability of certain components for customers may lead to production disruptions in our end customers’ plants and thereby affect Componenta’s sales volumes in the short term.
To ensure the availability of raw materials and other materials, Componenta maintains active interaction with its suppliers, continuously updates its needs forecast and optimises its inventory levels to meet longer-term demand, closely monitors the situation of its suppliers and market changes, and responds to these changes as necessary.
According to Componenta’s estimate, the Group has no significant and immediate risk concentrations related to
A prolonged war and an unfavourable development of the geopolitical situation may continue to have a negative impact on the financial market, sales volumes, the availability and price development of raw materials and energy, and the availability of foreign labour, which increases forecasting uncertainty.
The cost risk associated with raw materials is mainly managed through index-based price agreements, based on which the sales prices of products are updated in response to changes in the prices of raw materials for the next quarter. An increase in raw material prices may tie more cash than expected to working capital. In terms of commercial risks, future volumes may be weakened by customers switching to cheaper alternatives due to price competition.
Componenta’s business operations depend on the reliability of production plants, supply and delivery channels and the related processes and systems. The quality, accuracy and availability of information are extremely important, as information technology plays a significant role in the operations of Componenta and its suppliers and customers. If materialised, IT and cybersecurity risks may expose Componenta to disruptions and interruptions in operations and the loss or distortion of data, which may lead to interruptions in product availability. Componenta pays close attention to cybersecurity risks and follows up its customers’ situations and notifications.
Componenta continuously monitors the liquidity risk. The Group also finances its operations through factoring arrangements for receivables. The financial services company responsible for Componenta's factoring services has had repeated delays in its payments during the past year. As a consequence, Componenta has on
Alternative performance measures
Componenta publishes certain commonly used alternative performance measures that can be derived from the IFRS financial statements. The calculation formulas of these alternative performance measures are presented in the Half-Year Financial Report published
Webcast
President and CEO
COMPONENTA CORPORATION
Sami Sivuranta
President and CEO
For further information, please contact:
Sami Sivuranta, President and CEO, tel. +358 10 403 2200
Distribution:
Nasdaq
Principal media
www.componenta.com
Attachments
- Componenta Corporation Business Review 1 January–30 September 2023.pdf
© STT Info Finland, source