Detection Technology Plc Company Announcement 28 July 2016 at 09.00 a.m. (EEST)
DETECTION TECHNOLOGY PLC HALF-YEARLY REPORT JANUARY-JUNE 2016
Detection Technology: Strong growth continued in net sales and result
April-June 2016 highlights
- Net sales increased by 87.8% to EUR 17.5 million (9.3)
- Net sales of Security and Industrial Business Unit (SBU) grew 193.1% to EUR 15.0 million (5.1)
- Net sales of Medical Business Unit (MBU) decreased 40.7% to EUR 2.5 million (4.2)
- Operating profit (EBIT) was EUR 3.2 million (0.6)
- Operating margin (EBIT-%) was 18.3% of net sales (6.0%)
- Strong demand of security X-ray imaging detectors continued in Asia
- Net sales and profitability targets are unchanged in the medium term
January-June 2016 highlights
- Net sales increased by 79.7% to EUR 32.8 million (18.3)
- Net sales of SBU grew 153.3% to EUR 26.9 million (10.6)
- Net sales of MBU decreased 22.1% to EUR 6.0 million (7.7)
- Operating profit (EBIT) was EUR 5.5 million (1.3)
- Operating margin (EBIT-%) was 16.7% of net sales (7.1%)
(Figures in brackets refer to the corresponding period the previous year.)
President and CEO, Hannu Martola:
"The first half of the year has been very strong. Our net sales continued to grow strongly in the second quarter, and were 88% higher than a year ago. From the beginning of the year the growth was 80% compared to the last year.
The growth in demand of X-ray imaging equipment continued to be intense in China, where the security regulation has been tightened. In the second quarter we were able to meet a stronger than previously anticipated demand due to our modular product solutions. Sales of SBU remained strong throughout the review period, with net sales growth of 193% in the second quarter.
On the other hand, MBU's net sales decreased, even though the global medical imaging equipment market has continued to grow. Timing of customer projects and shipments is the reason for the decline in turnover, and the large quarterly variation is typical for the business.
Our operating profit was in line with the target level. Our operating margin for Q2 was 18.3%, and from beginning of the year 16.7%.
We believe that growth will remain good for the rest of the year. Demand for SBU's products seems to remain good in the second half of the year, even though its sales are expected to be lower than in the first half of the year. We have put major efforts in the development of new products together with our customers in MBU business, and these new products are moving into production. Our medium-term financial targets remain unchanged."
Key figures
| (EUR 1 000) | 4-6/2016 | 4-6/2015 | 1-6/2016 | 1-6/2015 | 1-12/2015 |
| Net sales | 17 451 | 9 292 | 32 823 | 18 265 | 42 782 |
| Net sales growth, % | 87.8% | 20.0% | 79.7% | 24.4% | 29.2% |
| Operating result (EBIT) excl. NRI | 3 189 | 561 | 5 475 | 1 302 | 4 534 |
| Operating result (EBIT) excl. NRI, % | 18.3% | 6.0% | 16.7% | 7.1% | 10.6% |
| Non-recurring items (NRI) | 0 | 0 | 0 | 0 | -1 098 |
| Operating profit | 3 189 | 561 | 5 475 | 1 302 | 3 437 |
| Operating margin, % | 18.3% | 6.0% | 16.7% | 7.1% | 8.0% |
| R&D costs | 1 155 | 1 480 | 2 778 | 2 660 | 5 696 |
| R&D costs, % of net sales | 6.6% | 15.9% | 8.5% | 14.6% | 13.3% |
| Cash flow from operating activities | -1 525 | -2 629 | -1 200 | -2 059 | 2 622 |
| Net interest bearing debt at end of period | -2 329 | -7 166 | -2 329 | -7 166 | -5 444 |
| Capital expenditure | 133 | 310 | 1 008 | 857 | 4 770 |
| Gearing, % | -9.9% | -42.0% | -9.9% | -37.0% | -25.8% |
| Earnings per share, EUR | 0.19 | 0.02 | 0.30 | -0.01 | 0.07 |
| Number of shares at the end of the period | 12 950 975 | 12 950 975 | 12 950 975 | 12 950 975 | 12 950 975 |
Business outlook
Detection Technology's business outlook is unchanged.
According to industry estimates, an average annual growth rate of global medical X-ray imaging market will be around 5%, security X-ray imaging equipment market 7% and industrial X-ray imaging about 5%. The company regards the security X-ray imaging market's growth prospects conservative, and estimates that the growth will accelerate.
Detection Technology aims to increase sales by at least 15 per cent per annum and to achieve an operating margin at or above 15 per cent during the medium term.
This release is a summary of Detection Technology's half-yearly report January-June 2016. The complete report is attached to this release as a pdf-file and can also be found on the company's website www.deetee.com/investors/financial-information.html.
Detection Technology Plc Board of Directors
For more information: President and CEO Hannu Martola will be available for interviews and further information on the release date at 9-11 a.m. (EEST).
Hannu Martola, President and CEO +358 500 449 475 hannu.martola@deetee.com
Nordea is the company's Certified Advisor under First North rules.
Detection Technology Plc Detection Technology is a global provider of X-ray imaging subsystems and components for medical, security and industrial applications. Detection Technology's net sales totaled EUR 43 million in 2015. The company has around 170 customers in 40 countries. Detection Technology employs 390 people in Finland, China and the US. The company's shares are listed on the Nasdaq First North Finland market place.
DISTRIBUTION: NASDAQ OMX Helsinki Key media www.deetee.com
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