1.3.2024 08:00:01 EET | Componenta Oyj | Financial Statement Release
Componenta Corporation stock exchange release, 1 March 2024 at 8 am EET
January-December 2023
- Net sales decreased from the previous year to EUR 101.8 million (EUR 109.1 million)
- EBITDA decreased to EUR 5.3 million (EUR 7.1 million)
- The operating result was EUR 3.8 million (EUR?1.6 million)*
- Cash flow from operating activities was EUR 1.1 million (EUR 6.2 million).
October-December 2023
- Net sales decreased to EUR 21.7 million (EUR 30.1 million)
- EBITDA decreased to EUR -0.5 million (EUR 2.8 million)
- The operating result decreased to EUR -1.9 million (EUR 1.4 million)
- Cash flow from operating activities was EUR -1.6 million (EUR 3.5 million).
* The operating result for the financial year includes a non-recurring profit of EUR 4.2 million from the reversal of the impairment loss related to production machinery and equipment in foundry business. More information on the reversal of the impairment loss can be found in the section "Tangible and intangible assets" in the financial statement release.
The information presented in this Financial Statements Bulletin concerns the Componenta Group's performance in January-December 2023 and in the corresponding period in 2022 unless otherwise stated. The figures in this bulletin have not been audited.
Dividend proposal
The Group's profit for the financial year was EUR 1.5 million (EUR 0.1 million). On 31 December 2023, the parent company's distributable funds totalled EUR 17.1 million (EUR 16.4?million). Based on the balance sheet to be confirmed for the financial year that ended on 31 December 2023, the Board of Directors proposes that no dividend be paid for 2023.
Componenta's guidance for 2024
Componenta expects the Group's net sales and EBITDA to improve from the previous year. The Group's net sales in 2023 were EUR 101.8 million, and its EBITDA was EUR 5.3 million. It is expected that the emphasis of the improvement in annualized net sales and EBITDA will be clearly taking place on the second half of the year.
The development of customers' sales volumes, poor availability of raw materials, increases in the prices of raw materials and electricity, and the general economic and labour situation and competitive climate may affect business outlooks. In addition, the development of sales and profitability involves uncertainties because of 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 half of 2023 was a good continuation of the strategic development in previous years. However, in the second half of the year and especially in the last quarter, our production volumes were clearly lower than expected. This was influenced by market uncertainties and a higher interest rate environment than before, as a result of which our main customers' own order books developed more modestly. In addition, our main customers optimized their stock levels towards the end of the year. Also, the level of net sales was affected by the lower level of price indices as a result of a decrease in costs. On the whole, our net sales and EBITDA fell slightly from 2022, so we are not satisfied with our financial performance in 2023. Nevertheless, our liquidity remained at a good level throughout the review period.
Due to general market uncertainty our main customers' decision-making time between the submission of an offer and the acceptance of the offer has increased over the last year. This has been reflected in the development of new sales and in delays in the ramp-up of new production. In terms of new sales, we have systematically increased our market shares, and we believe this will have a positive impact on our sales volumes over the longer term.
Our profitability was somewhat burdened by the wage agreements made in our industry in the first half of the year, which increased our costs clearly, in addition to increasing inflation. In the review period, profitability was also affected by production and quality challenges in Karkkila. These challenges with scheduled maintenance related to one of the main production machines began in and lasted throughout the third quarter, contrary to the original schedule. We were able to ensure deliveries to our customers on schedule, and our service capability throughout the Group has remained good despite changes in the operating environment. In the second half of the year and especially in the last quarter, our factories' utilization rates decreased clearly, which resulted in a decrease in our production process efficiency and ability to create high quality. This had a negative impact on our profitability. At the same time, we were ramping up the serial production of new high-volume products, which temporarily reduced production efficiency and quality. This also burdened our profitability.
The overall availability of raw materials and other materials has improved clearly and is currently at a good level. At the same time, the cost level of purchases has begun to normalise. Inflation reached a high level during the review period, but began to fall towards the end of 2023. We actively monitor market developments and will continue to ensure the functionality of our own supply chains. There are currently no significant near-term risks in the availability of electricity because of the high level of gas storage in Central Europe, among other reasons. However, there are still considerable fluctuations in the price of electricity at the daily level.
Our order book has started to strengthen since the end of the third quarter. Customer and industry-specific differences can be seen in order accumulation, but the outlook for the entire year 2024 has generally remained positive. With the start of serial production of new volume product sets from the second quarter onwards and thanks to the growth of Componenta's market shares, we estimate that our total production volumes will increase from 2023.
We have updated our strategy for 2024-2026. Sustainability has become one of the focus areas of our strategy, and we will strengthen its role as one of our competitive advantages. We are also currently preparing for regulatory changes, as well as for our long-term sustainability targets and action programmes. During the end of strategy period, our goal is to achieve EUR 150 million in annual net sales through organic growth and in total EUR 200 million in annual net sales through acquisitions, and to improve our current profitability. As a contract manufacturer, we will actively continue our efforts to strengthen our market position and are aiming to be the preferred overall sustainable supplier of a wide range of products to our customers."
Key figures | 2023 | 2022 | Change, % |
Net sales, EUR thousand | 101,809 | 109,087 | -6.7 |
EBITDA, EUR thousand | 5,278 | 7,086 | -25.5 |
Operating result, EUR thousand | 3,762** | 1,565* | 140.4 |
Operating result, % | 3.7** | 1.4* | 159.1 |
Result after financial items, EUR thousand | 1,568 | -97 | -1,714.9 |
Net result, EUR thousand | 1,547 | 61 | 2,420.9 |
Basic earnings per share, EUR | 0.16 | 0.01 | 2,847.7 |
Diluted earnings per share, EUR | 0.16 | 0.01 | 2,852.9 |
Cash flow from operating activities, EUR thousand | 1,126 | 6,171 | -81.8 |
Interest-bearing net debt, EUR thousand | 9,097 | 4,818 | 88.8 |
Net gearing, % | 35.6 | 20.0 | 78.0 |
Return on equity, % | 6.2 | 0.2 | 2,763.0 |
Return on investment, % | 9.8 | 4.3 | 129.8 |
Equity ratio, % | 45.0 | 41.1 | 9.7 |
Capital expenditure incl. lease liabilities, EUR thousand | 4,066 | 3,617 | 12.4 |
Number of personnel at the end of the period, incl. leased workers | 615 | 643 | -4.4 |
Average number of personnel during the period, incl. leased workers | 631 | 643 | -1.8 |
Order book at the end of the period, EUR thousand | 14,532 | 18,481 | -21.4 |
* The year 2022 has been 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 financial statement release.
** 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 section "Tangible and intangible assets" in the financial statement release.
Webcast
President and CEO Sami Sivuranta will present the Results Review for investors, analysts and the media in a webcast on 2 March 2023 at 10 a.m. EET. 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-tuloskatsaus-2023.
Helsinki 1 March 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
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
