25.7.2023 08:00:01 EEST | Componenta Oyj | Half Year financial report

Componenta Corporation stock exchange release, 25 July 2023 at 8 am

January–June 2023

• Net sales increased to EUR 60.2 million (EUR 54.4 million).
• EBITDA also improved clearly, amounting to EUR 5.4 million (EUR 3.8 million).
• Operating result was EUR 2.5 million (EUR 1.0 million).
• Cash flow from operating activities was EUR 5.4 million (EUR 2.1 million).

April–June 2023

• Net sales increased to EUR 29.5 million (EUR 28.9 million).
• EBITDA improved to EUR 2.6 million (EUR 2.4 million).
• Operating result was EUR 1.1 million (EUR 1.0 million).
• Cash flow from operating activities was EUR 4.7 million (EUR 2.2 million).

The information presented in this half-year financial report concerns Componenta Group’s performance in January–June 2023 and in the corresponding period of 2022 unless otherwise stated. Componenta has foundries in Pori and Karkkila, Finland, and metal product plants in Jyväskylä, Härmä, Kurikka, Leppävesi and Sastamala, Finland. The Group also includes real estate companies of minor importance in Finland.

Componenta’s guidance for 2023 remains unchanged

Componenta expects the Group’s net sales to be EUR 110-120 million in 2023. EBITDA is expected to improve from the previous year. The Group’s net sales in 2022 were EUR 109.1 million, and its EBITDA was EUR 7.1 million.

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 Russia’s war of aggression. An unfavourable development of the geopolitical situation in relation to the Russia’s war of aggression 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:

“Our overall performance was good in the first half of the year. Our net sales, market share and EBITDA continued to grow in line with our strategy and plans. Our liquidity was at a very good level at the end of the review period.

The availability of raw materials and other materials in the market has improved since the beginning of 2023, but the accelerating inflation has continued to keep costs at an exceptionally high level. The high price level is expected to return to a level based on production costs when the general market situation normalises. We have also agreed on the transfer of non-indexed cost increases to our customer prices where applicable during the review period. In the first half of the year, our profitability was also burdened by sector-specific wage agreements, which increased our costs clearly.

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. The price development of electricity has stabilised, but daily and even hourly price fluctuations remain high which makes forecasting the price of electricity for next winter uncertain. 

In our own operations, we have successfully managed our supply chain and secured our production and deliveries to customers in a constantly changing operating environment. Our measures to improve production quality and productivity at our Karkkila foundry have also continued, and the performance indicators developed favourably during the first half of the year.

Our employees’ resilience and strong commitment ensured a solid foundation for positive development. Our human resources correspond to our current production needs, and our ability to respond to changes in the operating environment has enabled us to maintain good service capability.

The prolonged Russia’s war of aggression has increased the overall uncertainty of the market and the rising cost trend arising from inflation. However, the impacts through our customers’ and suppliers’ business operations have been minor. We are actively monitoring developments in our business environment and seeking to ensure the availability of raw materials and good delivery capability in all situations and circumstances.

Our customers’ order backlogs, forecasts and expectations remained generally positive at the beginning of 2023, and our order book was at a good level at the end of June. However, general uncertainty in the market has increased, which has caused our customers, on average, to take longer to make a decision after receiving an offer and has also slowed down selling and purchasing processes. Our new sales have developed favourably for a long time, and our market shares have grown. This is beginning to be reflected in our delivery volumes, and our units are ramping up new production alongside the normal order book. Our customers are moving their production chains more actively closer to Europe and its neighbouring regions to improve their operating conditions in terms of risk management and sustainability. The company’s sustainability work and its role as a local operator are clearly competitive advantages for Componenta. Thanks to the current customer outlook and our own sales success, our expectations for 2023 remain positive.

We will actively continue our efforts to strengthen our market position and further improve our profitability as part of our growth strategy. In addition, we are focusing on our service capability, close customer relationships and highly competent personnel, as well as on expanding our offering. Sustainability is taken into account in the different phases of our processes, and we are currently determining our long-term sustainability goals and preparing for the growing number of reporting obligations. We are aiming for close partnerships with our customers and to be their preferred sustainable supplier with an extensive offering.”

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 at the end of the attached report.

Webcast

President and CEO Sami Sivuranta will present the Half-Year Financial Report for investors, analysts and the media in a webcast on 25 July 2023 at 10 a.m. EEST. 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-h12023.

Helsinki 25 July 2023

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

Distribution:
Nasdaq Helsinki
Key media outlets
www.componenta.com

Componenta Corporation is an international technology company and Finland's leading contract manufacturer in the machine building industry. Sustainability and customer needs are at the core of the company’s broad technology portfolio. Componenta Corporation manufactures components for its customers, which are global manufacturers of machinery and equipment. The company’s stock is listed on Nasdaq Helsinki. www.componenta.com

Attachments

• Componenta Corporation_Half_Year Financial Report_2023.pdf