Aspocomp Group financials 2002
Feb 14, 2003
OCTOBER - DECEMBER (Comparable figures, 7-9/2002)- Net sales for the fourth quarter grew by 15.2 % compared with the third quarter and totaled EUR 51.6 million (EUR 44.8 million).- Operating profit totaled EUR 4.8 million or 9.3 % of the net sales (EUR 1.6 million; 3.6 %).- Operative cash flow was EUR 17.4 million (EUR 3.7 million).- Earnings per share were EUR 0.51 (EUR 0.36).JANUARY - DECEMBER (Comparable figures, 1-12/2001)- Net sales for the period totaled EUR 182.9 million (EUR 221.8 million).- Operating loss was EUR 23.2 million (loss of EUR 27.4 million).- Operating profit without Aspocomp S.A.S was EUR 4.5 million.- Earnings per share were EUR -1.86 (EUR -2.66).- Equity ratio was 61.0 % (56.5 %) and equity per share EUR 10.85 (EUR 13.01).- The dividend proposal will be EUR 0.25 per share.BUSINESS REVIEWProductionAspocomp's capacity utilization rate for the fourth quarter was better than the other quarters of 2002. Printed wiring board (PWB) demand is growing most rapidly in Asia, especially in China. Aspocomp has two subsidiaries in Asia, P.C.B. Center in Thailand and ACP Electronics in China. The production of the Asian units has grown during the full year 2002 almost 44 % compared to the full year 2001.Research and DevelopmentOn March 1, 2002, Aspocomp Group Oyj and Perlos Corporation founded a joint research and development company, Asperation Oy. The ownership of the company is shared equally between the parent companies. Asperation Oy focuses on research and development of integrated components for the telecommunications and electronics industry. The target of the co-operation is to produce innovations beneficial for the both owner companies in their activities as well as to shorten the time-to-market of the innovations.On April 12, 2002, Aspocomp Group Oyj and Elcoteq Network Corporation established a joint venture, Imbera Electronics Oy, which concentrates on the development and commercialization of the Integrated Module Board (IMB) technology. Imbera Electronics Oy's ownership is shared equally between the parent companies. The target of the company is to develop an innovative production process using the IMB technology to integrate active components inside the printed wiring board structure. The use of the IMB technology in demandingconsumer electronic applications is expected to start up within a couple of years.Both of the joint venture companies made good progress during 2002.BUSINESS ENVIRONMENTTelecommunications industry, especially the mobile phone sector, grew strongly during the years 1999 and 2000. Our main target was to create enough capacity for our customers. Now the mobile phone growth is moderate and in the telecommunications networks the market shrinks. The companies in the electronics industry strive for profitability by trying to reach controlling position in the value chain. New technologies change the market by enabling the manufacturing of products that have more functions with lower price. The value chains force companies to geographically relocate their operations in order to save labour costs. Original equipment manufacturers concentrate on the sales and marketing and the role of the electronics manufacturing service companies as well as the original design manufacturer companies grows in importance. The supply chains become more complicated, the production is getting global and the ownership concentrates in fewer hands. The growth focus of the electronics industry will be in Asia also in 2003.GROUP NET SALES AND PROFIT, OCTOBER - DECEMBER (Comparable figures 7-9/ 2002)Fourth-quarter net sales grew by 15.2 % compared to the third quarter and totaled EUR 51.6 million (EUR 44.8 million, 7-9/2002).Fourth-quarter EBITDA increased by 37.3% and totaled EUR 12.2 million (EUR 8.9 million). EBIT totaled EUR 4.8 million or 9.3 % of the net sales (EUR 1.6 million; 3.6 %). Earnings per share totaled EUR 0.51 (EUR 0.36). Operative cash flow was EUR 17.4 million (EUR 3.7 million).GROUP NET SALES AND PROFIT, JANUARY - DECEMBER (Comparable figures 1-12/2001)Net sales totaled EUR 182.9 million for the period from January 1 to December 31, 2002, compared with EUR 221.8 million during the previous year. Other operating income totaled EUR 0.2 million (EUR 0.9 million, 1-12/2001). The share of net sales by the company's five biggest customers, Nokia, Sanmina-SCI, Siemens, Tellabs and Ericsson, was 68 % (the share of the five biggest in 2001 was 62 %). Net sales by region were as follows: Europe 56 % (81 %), Asia 17 % (8 %), and the Americas 27 % (11 %).Operating loss for the period totaled EUR 23.2 million or -12.7 % of net sales (EUR -27.4 million; -12.3 %). Operating profit for the period, net of the write-downs and losses related to the French subsidiary Aspocomp S.A.S. in the first quarter, totaled EUR 4.5 million. Net financial costs totaled EUR 2.7 million (EUR 2.6 million).The loss before extraordinary items was EUR 25.9 million (loss of EUR 29.9 million). The loss before taxes was EUR 25.9 million (loss of EUR 29.9 million), and the net loss for the period was EUR 18.6 million (loss of EUR 26.9 million). Earnings per share totaled EUR -1.86 (EUR -2.66).BUSINESS UNITS, OCTOBER - DECEMBERPrinted Wiring Boards (PWB)Fourth-quarter net sales for the PWB business unit increased by 21.1 % compared to the third quarter and totaled EUR 43.7 million(EUR 36.1 million, 7-9/2002). Net sales for the Mobile segment reached EUR 25.1 million (EUR 19.1 million), net sales for the Telecom segment totaled EUR 7.7 million (EUR 5.6 million) and for the Auto & Industry segment totaled EUR 10.9 million (EUR 11.4 million).Electronics Manufacturing Services (EMS)Net sales for the EMS business unit decreased by 9.7 % and totaled EUR 7.9 million (EUR 8.8 million).BUSINESS UNITS, JANUARY - DECEMBERPrinted Wiring Boards (PWB)The downturn in net sales for the PWB business unit was 16.2% compared to the same period in the previous year. Net sales for the PWB business unit were EUR 150.0 million (EUR 179.0 million, 1-12/2001). Net sales of the Mobile segment decreased by 9.3 % and totaled EUR 79.0 million (EUR 87.1 million). Net sales of the Telecom segment declined by 41.8 % and totaled EUR 27.8 million (EUR 47.8 million). The downturn in net sales for the Auto & Industry segment was 2.0 % and totaled EUR 43.2 million (EUR 44.1 million). The EBIT of the PWB business unit for the period was EUR -24.0 million (EUR -29.2 million).ELECTRONICS MANUFACTURING SERVICES (EMS)Net sales of the EMS business unit decreased by 23.0 % and totaled EUR 32.9 million (EUR 42.8 million, 1-12/2001). The EBIT of the EMS business unit for the period was EUR 0.8 million (EUR 1.8 million).FINANCING, INVESTMENTS AND EQUITY RATIOThe Group's liquidity during the period under review was good. The liquid reserve at the year-end was EUR 19.7 million (EUR 20.3 million). Net interest-bearing debt for the period totaled EUR 40.5 million, including EUR 30.5 million in financial leasing liabilities (EUR 58.7 million; EUR 34.9 million). The non-interest-bearing debts totalled EUR 26.1 million (EUR 47.8 million). Gross investments for the period totaled EUR 19.8 million (EUR 73.3 million) or 10.8 % of the net sales (33.0 %). The investments were primarily in Asia (EUR 13.5 million). Investments in Finland totaled EUR 6.3 million, including the share capital in the joint venture companies Asperation Oy and Imbera Electronics Oy as well as the share buybacks totaling EUR 2 million. The development of the exchange rate between the Euro and the USD during the period under review strengthened the price competitiveness of the Asian units, but on the other hand weakened the price competitiveness of the European units. Net financial costs as a percentage of the net sales totaled 1.5 % (1.2 %). The equity ratio at the end of the period was 61 % (56.5 %).SHARES AND SHARE CAPITALThe number of Aspocomp's issued shares on December 31, 2002, was 10,041,026 and the share capital was EUR 10,041,026. 100,000 shares of the total issued number were in the possession of the company. The average number of shares, adjusted by buybacks, was 9,984,654. During the period extending from January 2 to December 30, a total of 2,309,047 shares with a value of EUR 17,450,476.52 were traded on the Helsinki Stock Exchange. The nominee-registered proportion of the stockholdings was 15.34 % and the non-domestic share 0.78 % at the end of the period. The share price reached a high of EUR 13.25 and a low of EUR 4.22 between January 2 and December 30, 2002. The average price was EUR 7.56. The closing price on December 30, 2002, was EUR 6.25 and the market capitalization of the company was EUR 62,131,413.The Aspocomp Group Oyj's Annual General Meeting of April 5, 2002, authorized the Board of Directors to decide on acquiring and conveying of own shares and on increasing the share capital by a share issue and/or by taking a convertible loan. The authorizations are valid for one year from the date of the Annual General Meeting. On May 7, 2002, the Board of Directors decided to exercise the authorization regarding share buybacks by acquiring a maximum of 100,000 company shares on the market by the end of June 2002. The acquisition began on May 14, 2002, and by June 28, 2002, the maximum amount of 100,000 own share was reached. After the financial period, by January 31, 2003, the amount of own shares in the possession of the Company was still 100,000.The counter book value of the shares was EUR 100,000, representing 1.0% of the company's share capital and voting rights. The share buybacks did not have any significant impact on the distribution of the shareholdings or the voting rights in the companyThe other authorizations have not been used yet.On April 5, the Annual General Meeting passed a resolution to decrease the company's share capital by invalidating 100,900 company shares. The new share capital, EUR 10,041,026, and the number of shares, 10,041,026, were entered in the Finnish Trade Register on April 9.At an Extraordinary Aspocomp Group Oyj Shareholders' Meeting held on October 22, 1999, it was decided that 750,000 stock options would be given to key persons to be named separately by Aspocomp Group Oyj and to a wholly owned subsidiary of the Group. Of this total, 375,000 were subscribed as A Options and 375,000 as B Options. The options allow for conversion into a total maximum of 750,000 Aspocomp Group Oyj shares, representing a total of 7.5 % of the company's post-subscription stock outstanding. Share capital will rise by a maximum total of 750,000 euros at a subscription price of 25 euros, net of pre-subscription dividends paid on the stock. The current subscription price is 24 euros. The shares, once subscribed, entitle the holder to dividend rights starting from the period during which they were converted. Other shares offer dividend rights from the point of registration. The subscription period is staggered, starting with the A Options on November 1, 2001, and with the B Options following on November 1, 2003. The subscription period for all options will expire on November 30, 2005. The above-mentioned options were registered on December 29, 1999. The Board of Directors of Aspocomp Group Oyj resolved to apply for listing of all the A Options 1999 on the main list of the Helsinki Exchanges so that the listing commenced on November 23, 2001. In relation to the listing both A and B Options were transferred to book-entry securities system.On May 17, 2002, the insurance company If Skadeförsäkring Ab announced that its share in the voting rights and share capital of Aspocomp Group Oyj exceeds 5 %.PERSONNELThe number of employees averaged 3,075 from January 1 to December 31, 2002, compared with 3,314 for the same period in the previous year. At the end of the financial period there were 2,907 employees in all (3,178).Negotiations with the Working Council at Aspocomp S.A.S. PWB plant in Evreux, France began on October 18, 2001, and were concluded on January 24, 2002, and the decision was to give notice to approximately 200 persons based on both productional and economical reasons. Aspocomp S.A.S. filed for bankruptcy at the local French Commercial Court on March 6, 2002, and as a result the Liquidator of the bankruptcy estate gave notice to the whole personnel of the company. Aspocomp S.A.S. has not been included in the Aspocomp Group figures after February 28, 2002. The adjustment of personnel amount at all production sites continued during the financial period.ASPOCOMP S.A.S.The HDI capacity of the French plant was built for the forecasted ramp-up of the 3G infrastructure and carefully estimated growth of the handset demand based on market information available. However, these markets did not develop as generally expected in 2001. The loading in France was very low and operations continued unprofitably for the third year in line; in 2001 the loss of 23.9 million euros on EBIT level was generated. Aspocomp S.A.S. filed for bankruptcy on March 6, 2002, and the liquidation of its assets was started on June 20, 2002.The administrators of the bankruptcy estate filed a lawsuit against Aspocomp Group Oyj. The bankruptcy estate calls for the bankruptcy proceedings of the subsidiary and liability for its debts to be extended to include Aspocomp Group Oyj. Aspocomp Group Oyj submitted its rebuttal to the Commercial Court in Evreux, France, on September 10, 2002. The plaintiff was supposed to submit its rebuttal after the financial period, on January 14, 2003. However, the administrators were not able to submit their rebuttal and the handling was postponed March 2003. According to expert opinion available, the writ of summons and the claims presented therein are unfounded. As a consequence, it is estimated that the writ of summons will have no effect on the profitability position of the company, its balance sheet or financial position.PROPOSAL FOR THE DISTRIBUTION OF DIVIDENDThe Board of Directors will propose at the Annual General Meeting to be held on April 4, 2003, that a dividend of EUR 0.25 per share to be distributed to the shareholders. According to the proposal of the Board the dividend record date will be April 9, 2003 and the dividends will be paid on April 16, 2003.PROSPECTSThe market situation continues to be uncertain. Based on the estimations of our customers, we expect the total growth of the mobile phone market in 2003 to be between 0 and 10 % and the telecommunication infrastructure market to decrease. The first quarter is expected to be the weakest due to seasonality, net sales are expected to remain on the level of the corresponding quarter of the previous year and the EBIT will be slightly negative. The latter half of the year is expected to be stronger and the EBIT for the year 2003 clearly positive. Our current cash position is very strong and will be strengthening throughout the year. We are confident in our ability to increase our global market share by increasing our market position in Asia. Asian units' share of net sales in 2002 was 22 % and is forecasted to be close to 40 % in 2003.ANNUAL GENERAL MEETINGThe Aspocomp Group Oyj Annual General Meeting will be held on Friday, April 4, 2003, at 2:00 p.m.ANNUAL REPORT 2002The Aspocomp Group Annual Report 2002 will be published on week 13.FINANCIAL INFORMATION IN 2003The Aspocomp Group will release its quarterly reports during the year 2002 on May 6, July 31 and October 30.