EFORE PUBLISHES ITS INTERIM REPORT JANUARY 1, 2014 – JUNE

Espoo, Finland, 2014-08-12 08:00 CEST (GLOBE NEWSWIRE) -- EFORE PLC  Interim Report  August 12, 2014  at  9.00  


Efore Plc is adopting a new disclosure procedure in accordance with Regulations and Guidelines 7/2013 (disclosure obligation on issuers) of the Financial Supervisory Authority and is publishing the interim report for January-June 2014 as an attachment to this stock exchange release. This release is a summary of Efore's January-June 2014 interim report. Efore Group’s interim report for January-June 2014 is a PDF file attachment to this stock exchange release and is available on the company’s website at the address www.efore.fi.

As a result of changing Efore's financial year, FY 2013 figures in brackets have been changed to match with the periods of the financial year 2014. Furthermore, when comparing the figures it should be noticed that the last year acquired Roal has been consolidated into Efore Group from the beginning of July 2013. FY 2013 Income Statements figures are shown at the end of this release in a separate table.

April – June 2014 (Q2)  in brief: 
- Net sales totaled EUR 22,5 million (EUR 13,8 million),up 63,3 % compared with the corresponding period last year
- Results from operating activities without one-time items were EUR -0,4 million (EUR -1,4 million)
- Results for the period including one-time items were EUR -1,6 million (EUR -1,9 million), representing -7,3 % of net sales (-13,5%)
- Earnings per share were EUR -0,04 (EUR -0,04)

January – June 2014 (H1)  in brief: 
- Net sales totaled EUR 41,7 million (EUR 29,1 million),up 43,2 % compared with the corresponding period last year
- Results from operating activities without one-time items were EUR -0,9 million (EUR -2,6 million)
- Results for the period including one-time items were  EUR -2,2  million (EUR -3,4 million), representing -5,3  % of net sales (-11,6 %)
- Earnings per share were EUR -0,05 (EUR -0,09)

 

Financial estimate for the 2014

Efore Plc lowers its financial estimate for the 2014. 

Old financial estimate was: The Company estimated its net sales of financial year 2014 to be EUR 85-95 million and results from operating activities without one-time items to be EUR 1.5-3.5 million.

New f inancial estimate for the 2014 is:
T he Company estimates its net sales of financial year 2014 to be EUR 83-91 million and results from operating activities without one-time items to be EUR 0–2,0 million.

Vesa Vähämöttönen, Efore’s President and CEO:

The main targets of Efore’s strategy have been balancing business areas by creating a strong industrial sector alongside of the telecommunication sector and by developing the company structure to improve the profitability. The strategic transformation and first steps of ROAL integration have been progressing as planned. The integration requires still more work in order to reach all synergy benefits. One unified manufacturing and sourcing organization and business units for telecommunication and industrial sectors have been created. Sales organization will still be strengthened in North America and Europe. The target to reach annual EUR 1,5 million synergy benefit in material purchases announced together with the acquisition has been met. Broadening of the co-operation with suppliers and focusing on core competencies especially in production is next logical step in the development of the group.

Net sales of Efore’s telecommunication sector increased more than 35 % during the second quarter compared with the first quarter of 2014, as expected. Telecom sector product portfolio is renewing and broadening during the year and new products are expected to drive the sales growth, improve margin as well as decrease the demand fluctuations.

Net sales of industrial sector remained on the same level with the first quarter of 2014 which weakened company’s profitability. The demand is returning back but sales in the second half of 2014 is forecasted to be at the same level with the first one. In the second half of the year industrial sector is focusing on launching new power products for large LED displays and street lighting. For broader market suitable version of the EMP protected power system, originally developed for the Finnish Defense Forces, has been introduced in the defence and security trade show in Paris last June. New products will also be launched for instrumentation, automation and medical markets.

Second quarter results included EUR 1,3 million one-time items.  Almost all of them were related to the structural changes in Italy due to production transfer to Tunisia. Cash effect of these items will be spread over the coming 24 months and the annual cost saving is approximately EUR 1,6 million.

Efore is focusing on final assembly and testing in telecommunication sector manufacturing in its China plant for reaching cost savings. Telecom sector PCB assembly manufacturing will be transferred to an EMS partner by the end of this year. By utilizing the capabilities of an EMS company Efore can get the access to the latest SMT manufacturing technology and capacity in a flexible way and can continue to invest in R&D and expanding of the sales network. Efore will continue PCB assembly manufacturing for certain customer segments and product development purposes.

Efore’s long term financial target is to reach 10% EBIT level and an average annual net sales growth of 5-10%. On short term Efore is focusing to improve its profitability. Target is to reach at least 6% EBIT level at the end of 2015.

April – June net sales and financial development

Second quarter net sales totaled EUR 22,5 million (EUR 13,8 million). Net sales increased EUR 3,3 million or 17,2 % compared with the previous quarter.  Net sales of telecommunication sector increased EUR 3,4 million or 35,1 % and net sales of industrial sector remained at the same level with the previous quarter.

Results from operating activities without one-time items were EUR -0,4 million (EUR -1,4 million). Second quarter results included EUR 1,3 million one-time items.  Almost all of them were related to the structural changes in Italy due to production transfer to Tunisia. Cash effect of these items will be spread over the coming 24 months and the annual cost saving is approximately EUR 1,6 million.

January – June net sales and financial development

Net sales totaled EUR 41,7 million (EUR 29,1 million). Results from operating activities without one-time items were EUR -0,9 million (EUR -2,6 million). Second quarter results included EUR 1,3 million  one-time items as expected.  Almost all of them were related to the structural changes in Italy due to production transfer to Tunisia. Cash effect of these items will be spread over the coming 24 months and the annual cost saving is approximately EUR 1,6 million.

Investment in product and technology development during the period under review was EUR 3,4  million (EUR 3,3 million) representing 8,1 % of net sales (11,3 %).

Business development

Net sales of Efore’s telecommunication sector increased more than 35 % during the second quarter compared with the first quarter of 2014, as expected. Telecom sector product portfolio is renewing and broadening during the year and new products are expected to drive the sales growth, improve margin as well as decrease the demand fluctuations.

Net sales of industrial sector remained on the same level with the first quarter of 2014 which weakened company’s profitability. The demand is returning back but sales in the second half of 2014 is forecasted to be at the same level with the first one. In the second half of the year industrial sector is focusing on launching new power products for large LED displays and street lighting. For broader market suitable version of the EMP protected power system, originally developed for the Finnish Defense Forces, has been introduced in the defence and security trade show in Paris last June. New products will also be launched for instrumentation, automation and medical markets.

Efore is focusing on final assembly and testing in telecommunication sector manufacturing in its China plant for reaching cost savings. Telecom sector PCB assembly manufacturing will be transferred to an EMS partner by the end of this year. By utilizing the capabilities of an EMS company Efore can get the access to the latest SMT manufacturing technology and capacity in a flexible way and can continue to invest in R&D and expanding of the sales network. Efore will continue PCB assembly manufacturing for certain customer segments and product development purposes.

Outlook

As a result of the acquisition the group has expanded into new markets which creates better opportunities for the growth. LTE (4G) technology is in a key role in network expansions and Efore has a strong position in this development. Several large network roll-outs have been published after two slow years creating base for demand growth. Power supplies for LED lighting, instrumentation, medical and infrastructure offer several growth areas for Efore in industrial sector.

During the last 18 months the group has started several new product development projects and especially telecom product portfolio is renewing significantly this year. New products make Efore’s product portfolio wider, which is expected to be visible as sales growth and as a decrease in demand fluctuations.

Getting new products into volume deliveries as forecasted is essential for the growth and profitability improvement of the company.

In the near future, Efore is focusing on introducing new products into volume production and on necessary profitability improvement actions. Due to the renewal of product portfolio and streamlining actions financial year 2014 improves towards the end.

Long-term targets

Efore Group's long term financial target is to reach 10% EBIT level and an average annual net sales growth of 5-10%. Target is to grow especially in industrial sector. Market driven product platforms and better R&D investment utilization are key factors to support company's target to improve profitability.

On short term Efore is focusing to improve its profitability. Target is to reach at least 6% EBIT level at the end of 2015.

Efore does not consider the long term targets as market guidance for any given year. It will issue separate financial estimate.

EFORE PLC
Board of Directors


Further information

For further information please contact Mr.Vesa Vähämöttönen, President and CEO, on August 12, 2014 at 9 – 10 a.m., tel. +358 9 4784 6312.

DISTRIBUTION

Nasdaq OMX Helsinki Oy
Principal media

Efore Group

Efore Group is an international company which develops and produces demanding power products. Efore's head office is based in Finland and its production units are located in China and Tunis. Sales and marketing operations are located in Europe, United States and China. In the fiscal year ending in December 2013, consolidated net sales totaled EUR 82.5 million and the Group's personnel averaged 836. The company's share is quoted on the Nasdaq OMX Helsinki Ltd. www.efore.com

Enclosure: EFORE GROUP INTERIM REPORT JANUARY 1, 2014 – JUNE 30, 2014