Vacon Plc Interim Report 1 January - 30 June 2013 Vacon

Vacon Plc, Stock Exchange Release, 1 August 2013 at 9.30 pm (EET) In this stock exchange release Vacon is publishing information included in the interim report that has a significant impact on the value of securities. The full interim report is in the appendix to this release and can be downloaded from the company's website in Finnish at www.vacon.fi and in English at www.vacon.com. April-June summary: * Order intake totalled MEUR 114.0 (MEUR 108.9), an increase of 4.6% from the corresponding period in the previous year. * Revenues totalled MEUR 103.4 (MEUR 99.5), growth of 4.0% from the corresponding period in the previous year. * Operating profit was MEUR 10.4, or 10.0% of revenues (operating profit excluding one-time items was MEUR 9.1 and 9.1% of revenues in April-June 2012). * Net cash flow from operating activities was MEUR 5.8 (MEUR 1.5). * Earnings per share were EUR 0.51 (EUR 0.46). January-June summary: * Order intake totalled MEUR 214.2 (MEUR 205.8), an increase of 4.1% from the corresponding period in the previous year. * Revenues totalled MEUR 194.8 (MEUR 183.7), growth of 6.0 % from the corresponding period in the previous year. * Operating profit was MEUR 16.1, or 8.3% of revenues (operating profit excluding one-time items was MEUR 14.0 and 7.6% of revenues in January-June 2012). * Net cash flow from operating activities was MEUR 22.4 (MEUR 19.8). * Earnings per share were EUR 0.76 (0.75). April-June key indicators: +-----------------------------------------+--------+---------+---------+ |MEUR | |restated*| | | |4-6/2013| 4-6/2012|Change, %| +-----------------------------------------+--------+---------+---------+ |Order intake | 114.0| 108.9| 4.6%| +-----------------------------------------+--------+---------+---------+ |Revenues | 103.4| 99.5| 4.0%| +-----------------------------------------+--------+---------+---------+ |Operating profit | 10.4| 10.3| 0.5%| +-----------------------------------------+--------+---------+---------+ |% of revenues | 10.0%| 10.3%|  | +-----------------------------------------+--------+---------+---------+ |Operating profit excluding one-time items| 10.4| 9.1| 14.4%| +-----------------------------------------+--------+---------+---------+ |% of revenues | 10.0%| 9.1%|  | +-----------------------------------------+--------+---------+---------+ |Profit before taxes | 10.2| 10.3| -0.3%| +-----------------------------------------+--------+---------+---------+ January-June key indicators: +---------------------------------------+--------+---------+---------+---------+ |MEUR | |restated*| |restated*| | |1-6/2013| 1-6/2012|Change, %|1-12/2012| +---------------------------------------+--------+---------+---------+---------+ |Order intake | 214.2| 205.8| 4.1%| 401.9| +---------------------------------------+--------+---------+---------+---------+ |Order book | 69.5| 58.7| 18.3%| 50.0| +---------------------------------------+--------+---------+---------+---------+ |Revenues | 194.8| 183.7| 6.0%| 388.4| +---------------------------------------+--------+---------+---------+---------+ |Operating profit | 16.1| 16.7| -3.5%| 38.0| +---------------------------------------+--------+---------+---------+---------+ |% of revenues | 8.3%| 9.1%|  | 9.8%| +---------------------------------------+--------+---------+---------+---------+ |Operating profit excluding | | | | | |one-time items | 16.1| 14.0| 15.0%| 36.5| +---------------------------------------+--------+---------+---------+---------+ |% of revenues | 8.3%| 7.6%|  | 9.4%| +---------------------------------------+--------+---------+---------+---------+ |Profit before taxes | 16.3| 16.4| -1.1%| 37.1| +---------------------------------------+--------+---------+---------+---------+ |Net cash flow from operating activities| 22.4| 19.8| 13.6%| 52.3| +---------------------------------------+--------+---------+---------+---------+ |Earnings per share, EUR | 0.76| 0.75|  | 1.72| +---------------------------------------+--------+---------+---------+---------+ |Interest-bearing net liabilities | -3.9| 12.9|  | -10.3| +---------------------------------------+--------+---------+---------+---------+ |Gearing, % | -3.8%| 13.5%|  | -9.5%| +---------------------------------------+--------+---------+---------+---------+ |Gross capital expenditure | 10.2| 6.6| 55.1%| 14.0| +---------------------------------------+--------+---------+---------+---------+ *Figures adjusted in accordance with IAS 19. Business environment and business development According to market surveys, the global AC drive market increased by some 4.5% in the first quarter of 2013 compared to the corresponding period in the previous year. All geographical regions showed growth. According to Vacon's assessment, the AC drive market did not grow significantly in the April-June period compared either to the first quarter of 2013 or to the corresponding period in the previous year. Taking market developments into account, Vacon's business developed positively during the second quarter of 2013. The company's order intake increased considerably in the April-June period and was the highest so far in the history of the company. Revenues also rose compared both to the period for comparison in 2012 and to the first quarter of 2013. Vacon's revenues increased in all regions. Building automation was the industrial sector with strongest growth. The company's operating profit percentage excluding one-time items also improved in the April-June period compared to the same period in 2012. Factors contributing to this improvement were the growth in revenues and the cost benefits obtained from transferring material sourcing to lower-cost countries. However, the proportionally higher demand for low power drives with a smaller profit margin slightly slowed down the improvement in the company's profitability. Prospects for 2013 In Vacon's assessment there was slight growth in the AC drive market in January- June, and Vacon expects the market to pick up still further in the second half of the year. The company estimates that the global AC drive market will grow faster than average growth in industrial production, at an estimated rate of 5-10% in 2013. Vacon's strong order intake supports growth in the company's revenues and improving profitability in the second half of the year. Other key factors contributing to an improvement in profitability, in addition to the growth in revenues, are the cost benefits from transferring material sourcing to lower cost countries and raising overall efficiency in operations. Improving the company's profitability does not require a change in the sales product breakdown, the productivity targets set can be achieved with the existing product breakdown. Market guidelines for 2013 Vacon is retaining the market guidelines it published earlier and estimates that its revenues will increase 5-15% and that its operating profit percentage excluding one-time items will be 10-12% in 2013. Revenues in 2012 totalled EUR 388.4 million and the operating profit percentage excluding one-time items was 9.4%. Vacon's goal is to achieve revenues of EUR 500 million in 2014. Its profitability target for 2014 is an operating profit of 14%, and for return on equity the target is more than 30%. Financial reporting in 2013 Vacon will publish its Interim Report January-September 2013 on 22 October 2013. Furthermore, Vacon will arrange a Capital Markets Day on 28 November 2013. Formal statement This release contains certain forward-looking statements that reflect the current views of the company's management. Due to the nature of these statements, they contain risks and uncertainties and are subject to changes in the general economic situation and in the company's business sector. Vacon in brief Vacon is driven by a passion to develop, manufacture and sell the best AC drives and inverters in the world - and provide customers with efficient product lifecycle services. Our AC drives offer optimum process control and energy efficiency for electric motors. Vacon inverters play a key role when energy is produced from renewable sources. Vacon has production and R&D facilities in Europe, Asia and North America, and sales offices in 29 countries. Further, Vacon has sales representatives and service partners in nearly 90 countries. In 2012, Vacon's revenues amounted to EUR 388.4 million, and the company employed globally approximately 1,500 people. The shares of Vacon Plc (VAC1V) are quoted on the main list of the Helsinki stock exchange (NASDAQ OMX Helsinki). Driven by Drives, www.vacon.com Vantaa 1 August 2013 VACON PLC Board of Directors For more information please contact: * Mr Vesa Laisi, President and CEO, phone: +358 (0)40 8371 510, e-mail vesa.laisi(at)vacon.com * Ms Pia Aaltonen-Forsell, CFO, phone: +358 (0)40 8371 910, e-mail pia.aaltonen-forsell(at)vacon.com Conference for media and analysts A briefing for the financial analysts and media will be held on 1 August 2013 at Pörssitalo, Fabianinkatu 14 A, 2nd floor, Helsinki (entrance via NASDAQ OMX Helsinki's reception) at 11:30 am Finnish time (EET). Dial-in conference for investors and investment analysts A dial-in conference for investors and investment analysts will be held at 3.00 pm (EET) on 1 August 2013. President and CEO Vesa Laisi and CFO Pia Aaltonen- Forsell will participate in the conference. Please call +358(0)9 6937 9543 (Finland Toll) or +44(0)20 3427 1909 (UK Toll) and request to be connected to the Vacon call (Confirmation code 9226072). A recording of the conference will be available for seven days at (0)9 2310 1650 (Finland Toll) or (0)20 3427 0598 (UK Toll) and access code 9226072#. Webcast link: http://www.media-server.com/m/p/5hwz8ohg The presentation material will be available before the media briefing on Vacon's website at: www.vacon.com > Investors > Publications and releases. DISTRIBUTION: NASDAQ OMX Helsinki Financial Supervisory Authority Main Media [HUG#1720383]