Feb 08, 2005
VTI Technologies Oy's Financial Statements for 2004
- Net sales in 2004 were 61.9 million euros, 13 % up on the previous year.
- Operating income before depreciation and goodwill amortization (EBITDA) was 10,4 million euros, 16 % up on the previous year.
- Demand for Electronic Stability Control products for Automotive Industry was good.
- Increasing efforts in R&D and engineering, being 9,5 million euros (15% of net sales), up 37% from the previous year.
- To prepare for the expected growth in demand, VTI is investing in new production and office fa-cilities.
- In 2004, VTI recruited 53 new people, of whom 24 is working in R&D.
Exports and overseas operations accounted for 99.8 % (99.7 %). The main export countries are Germany, Japan and USA.
The operating result of the Group was -0.3 (-1.3) million euros. The Group result is held down by the 5.6 million euro annual depreciation of goodwill. The goodwill was generated when the current main owner acquired the business operations of VTI in 2002. The result before goodwill amortization was 5.3 (4.3) million euros.
Research and development expenses were 9.5 (7.0) million euros, which is 15 % (13 %) of net sales. The aim of VTI's research and development activities is to strengthen the company's market position and role as a pioneer in high performance and low power consuming low-g accelerometers and pressure sensors.
Net financing costs for the period were 1.4 (1.8) million euros. Loan portfolio refinancing had a positive effect on interest expenses. Despite of the growth VTI has been able to draw down the net working capital. Net working capital amounted to 6.4 (7.5) million euros.
The parent company's result is burdened by a write-down of 4,4 million euros in subsidiary shares. The writedowns had no effect on the consolidated profit and loss account or balance sheet.
The Group's result for the period was -1.7 (-3.1) million euros.
Building extension to double the premises in Vantaa, Finland, is proceeding as planned. The office space will be taken into use in April 2005. The clean room premises for production will be completed late 2005 and production will start in late 2006. The premises are leased with a fifteen year lease agreement.
The Group's solvency ratio at the end of December was 68 % (66 %).
The Group's interest-bearing liabilities were reorganized during the period, when financing dating from the change of ownership was paid off in October. Group net financing costs fell as a result of this financial restructuring. The total net interest bearing liabilities at the end of December were 15.0 (21.4) million euros. VTI had a good liquidity throughout the year.
VTI has set the objective of being the market leader in high performance and low power consuming low-g accelerometers and pressure sensors. Another objective is to achieve a major increase in market shares for new applications in various sectors of industry. VTI targets to grow profitably.
VTI operates in the market of micro-electro-mechanical (MEMS) sensors, worth over billion euros. This market is expected to grow over 20% a year, attracting new competitors and rival technologies. The sector is developing strongly because of rapid technological development which enables new functions and applications. VTI is concentrating on segments where low power consumption and high perform-ance of sensors gives customers a competitive advantage.
Net sales of the Automotive Business Unit rose 14% from the preceding year to 58.0 (50.9) million eu-ros. The sales volumes went up.
In response to strong growth of demand for micro-electro-mechanical (MEMS) sensors, production capacity was expanded both in Finland and Mexico. One focus area in 2004 was to develop new and im-proved products to the production stage and launch them. Korea and China are becoming increasingly important and measures were taken to create a presence in these markets.
Net sales by the Industrial Business Unit rose by 3 % to 3.9 (3.8) million euros. One of the main customers lowered temporarily their inventories during the year resulting to lower sales volumes.
Business operations in 2004 were focused on achieving a strong market position in selected industrial applications requiring high performance and low power consumption, and expanding into absolute pressure measurement, where the market is expected to grow strongly.
During the review period, the business unit launched pressure as a phenomenon VTI measures. Pressure products will be available in 2005. Acceleration sensor clients often also need absolute pressure measurement and therefore a solid client base exists. Capacitive sensor technology is expected to open up completely new application areas. Also several other products for inclinometer applications were launched.
Market research was carried out in the Chinese market, which is extremely interesting for the Industrial Business Unit, and the groundwork was laid for commercial agreements. Business operations were also strongly focused on developing and launching new products. Another aim has been to increase the visibility and recognition of VTI.
Extraordinary general meeting approved in October a share capital increase departing from the subscription rights.
The largest shareholder is the EQT III Private Equity Fund (former EQT Northern Europe).
The President and CEO is Hannu Martola.
The company does not believe that the changeover to international accounting practices will have a significant effect on its balance sheet. The main influences are expected to be in the reporting of deferred tax liabilities and assets, in the valuation of inventories and in the goodwill amortization.
VTI is also preparing for the predicted growth of MEMS with new products and product concepts. The company has the objective of developing a global system of technical support for customers and creating new systems and operating models for the supply chain management. The importance of Korea and China as VTI market areas is expected to grow in the years ahead.
In 2005 VTI is expected to grow and improve profitability.
Vantaa, 2 February 2005
For more information
Tiina Hansson, Vice President, Corporate Communications, VTI Technologies Oy, tel. +358 9 8791 8240, mobile +358 40 827 8844.
The company is the market leader in low-g acceleration sensors with an approximately 50 % market share in the automotive industry. VTI's strong market position is based on a good technology basis, innovative products and excellent reliability and performance.
VTI's owner is EQT III private equity fund (former EQT Northern Europe). VTI's core activities are located in Vantaa, Finland. The company's growth is strong and in the end of 2004 it had approx. 700 employees. VTI's net sales in 2004 totaled 62 million euros. The company's international sales and marketing network includes sales offices in Frankfurt, Germany and Detroit, USA, a representative network in Europe and a partner in Japan. Besides Vantaa, Finland, VTI also maintains manufacturing activities in Mexico.
Distribution
Principal media
1. Profit and Loss Account
2. Balance sheet
3. Cashflow
4. Selected financial notes
5. Key performance indicators
- Operating income before depreciation and goodwill amortization (EBITDA) was 10,4 million euros, 16 % up on the previous year.
- Demand for Electronic Stability Control products for Automotive Industry was good.
- Increasing efforts in R&D and engineering, being 9,5 million euros (15% of net sales), up 37% from the previous year.
- To prepare for the expected growth in demand, VTI is investing in new production and office fa-cilities.
- In 2004, VTI recruited 53 new people, of whom 24 is working in R&D.
Net sales
Net sales of the VTI Group in 2004 increased 13 % to 61.9 million euros (54.7). Net sales of the Automotive Business Unit increased 14 % to 58.0 (50.9) million euros, product volumes increased more than sales. Net sales of the Industrial Business Unit increased 3 % to 3.9 (3.8) million euros. Design wins were achieved, even though the start of the productions did not realize yet. Weakening of the dollar did not have major impact on sales as the share of US dollar is 11 % of the total sales.Exports and overseas operations accounted for 99.8 % (99.7 %). The main export countries are Germany, Japan and USA.
Result
Gross profit of the VTI Group was 21.0 (16.1) million euros, representing 34 % (29 %) of net sales. Gross profit was 4.9 million euros higher than the year before, which is an outcome of higher volume and increase in productivity. The production capacity was increased during the year both in Vantaa and in the Mexico plant.The operating result of the Group was -0.3 (-1.3) million euros. The Group result is held down by the 5.6 million euro annual depreciation of goodwill. The goodwill was generated when the current main owner acquired the business operations of VTI in 2002. The result before goodwill amortization was 5.3 (4.3) million euros.
Research and development expenses were 9.5 (7.0) million euros, which is 15 % (13 %) of net sales. The aim of VTI's research and development activities is to strengthen the company's market position and role as a pioneer in high performance and low power consuming low-g accelerometers and pressure sensors.
Net financing costs for the period were 1.4 (1.8) million euros. Loan portfolio refinancing had a positive effect on interest expenses. Despite of the growth VTI has been able to draw down the net working capital. Net working capital amounted to 6.4 (7.5) million euros.
The parent company's result is burdened by a write-down of 4,4 million euros in subsidiary shares. The writedowns had no effect on the consolidated profit and loss account or balance sheet.
The Group's result for the period was -1.7 (-3.1) million euros.
Investments and finance
Gross investments by the Group in 2004 were 6.6 (4.6) million euros. Most of the investments were in production machinery and equipment improving production capacity, performance and new production technologies. As a part of the loan portfolio rearrangements some earlier with financial lease acquired equipment was now invested with 1.9 million euros.Building extension to double the premises in Vantaa, Finland, is proceeding as planned. The office space will be taken into use in April 2005. The clean room premises for production will be completed late 2005 and production will start in late 2006. The premises are leased with a fifteen year lease agreement.
The Group's solvency ratio at the end of December was 68 % (66 %).
The Group's interest-bearing liabilities were reorganized during the period, when financing dating from the change of ownership was paid off in October. Group net financing costs fell as a result of this financial restructuring. The total net interest bearing liabilities at the end of December were 15.0 (21.4) million euros. VTI had a good liquidity throughout the year.
Business Units
VTI's operations are divided between the Automotive Business Unit, in which the company has had a firm foothold since 1987, and the Industrial Business Unit, which was established as a separate business unit in 2002. The Industrial Business Unit is serving customers in various applications, such as health care, sports and fitness, instruments, terminals and moving machines.VTI has set the objective of being the market leader in high performance and low power consuming low-g accelerometers and pressure sensors. Another objective is to achieve a major increase in market shares for new applications in various sectors of industry. VTI targets to grow profitably.
VTI operates in the market of micro-electro-mechanical (MEMS) sensors, worth over billion euros. This market is expected to grow over 20% a year, attracting new competitors and rival technologies. The sector is developing strongly because of rapid technological development which enables new functions and applications. VTI is concentrating on segments where low power consumption and high perform-ance of sensors gives customers a competitive advantage.
Automotive Business Unit
The Automotive Business Unit supplies the automotive industry with motion and pressure sensors, used in vehicle stability control (ESC), anti-lock braking systems (ABS) and various anti-theft and steering applications. End-users of VTI products are almost all major car manufacturers. VTI's market share of low-g accelerometers for the automotive industry is over 50%.Net sales of the Automotive Business Unit rose 14% from the preceding year to 58.0 (50.9) million eu-ros. The sales volumes went up.
In response to strong growth of demand for micro-electro-mechanical (MEMS) sensors, production capacity was expanded both in Finland and Mexico. One focus area in 2004 was to develop new and im-proved products to the production stage and launch them. Korea and China are becoming increasingly important and measures were taken to create a presence in these markets.
Industrial Business Unit
The Industrial Business Unit was established in 2002 with the aim of promoting VTI's future growth. This business unit supplies ever-rising amounts of motion and pressure sensors for medical technology, sports and fitness products, instruments and terminals. Sensors provide significant value-added in these areas, and their applications are consequently almost unlimited, with markets worldwide.Net sales by the Industrial Business Unit rose by 3 % to 3.9 (3.8) million euros. One of the main customers lowered temporarily their inventories during the year resulting to lower sales volumes.
Business operations in 2004 were focused on achieving a strong market position in selected industrial applications requiring high performance and low power consumption, and expanding into absolute pressure measurement, where the market is expected to grow strongly.
During the review period, the business unit launched pressure as a phenomenon VTI measures. Pressure products will be available in 2005. Acceleration sensor clients often also need absolute pressure measurement and therefore a solid client base exists. Capacitive sensor technology is expected to open up completely new application areas. Also several other products for inclinometer applications were launched.
Market research was carried out in the Chinese market, which is extremely interesting for the Industrial Business Unit, and the groundwork was laid for commercial agreements. Business operations were also strongly focused on developing and launching new products. Another aim has been to increase the visibility and recognition of VTI.
Employees
The VTI Group had 663 (582) employees at the end of 2004, increase of 81 employees in total. 74 %, total of 492 persons worked in Finland. The average number of employees during the year was 635 (638). The average number of employees is affected by layoffs of 95 blue collar workers in Mexico in late 2003 due to increased level of automization. Major part of the personnel increase in 2004 incurred in the latter part of the year.Group structure
VTI Technologies Oy (domicile Vantaa) is the parent company of the VTI Group. At the end of 2004 the Group consisted of the parent company, VTI Holding Company Inc. and VTI Technologies Inc. in the United States, and VTI Technologies S.A. de C.V. in Mexico. There were no changes in group structure during 2004.Shares and shareholders
The share capital of VTI Technologies Oy was 0.5 million euros at the end of December.Extraordinary general meeting approved in October a share capital increase departing from the subscription rights.
The largest shareholder is the EQT III Private Equity Fund (former EQT Northern Europe).
Directors and CEO
The general shareholders' meeting on 25 February 2004 elected the following full members to the Board of Directors of VTI Technologies Oy: Tuomo Lähdesmäki (chairman), Hasse Johansson (vice-chairman), Peter Wallenberg Jr., Thomas von Koch and Juha Lindfors. Joonas Kettunen was elected deputy member.The President and CEO is Hannu Martola.
Auditors
PriceWaterhouseCoopers Oy was chosen by the general shareholders' meeting as the auditors of VTI Technologies Oy. Kari Lydman, Authorised Public Accountant, is the responsible auditor.Preparations for changeover to IAS/IFRS accounting
The company has been making preparations for a changeover to international financial reporting stan-dards. IFRS is compulsory only for quoted companies but permissible for other companies.The company does not believe that the changeover to international accounting practices will have a significant effect on its balance sheet. The main influences are expected to be in the reporting of deferred tax liabilities and assets, in the valuation of inventories and in the goodwill amortization.
Events after the review period
Effective 1st of January 2005, VTI restructured its organization to better meet the changing customer needs. The objective was to utilize the existing people and their competences more efficiently to improve the capacity to resolve customer needs with new products and services even faster. Therefore, all research and development competences were centralized to specific Competence Centers.Outlook for 2005
In 2005 VTI will continue to increase its efforts in research and development, representing about 17% of net sales. The new premises in Vantaa will also create conditions for increasing production capacity from the present 20 million sensor elements annually to 100 million.VTI is also preparing for the predicted growth of MEMS with new products and product concepts. The company has the objective of developing a global system of technical support for customers and creating new systems and operating models for the supply chain management. The importance of Korea and China as VTI market areas is expected to grow in the years ahead.
In 2005 VTI is expected to grow and improve profitability.
Vantaa, 2 February 2005
VTI Technologies Oy
Board of DirectorsFor more information
Tiina Hansson, Vice President, Corporate Communications, VTI Technologies Oy, tel. +358 9 8791 8240, mobile +358 40 827 8844.
About VTI Technologies
VTI Technologies is a forerunner in motion and pressure sensors and the world's leading designer and producer of acceleration sensors in the automotive industry. VTI develops and produces silicon based capacitive sensors with unique 3D-MEMS (MicroElectroMechanical System) technology, with application areas in acceleration, inclination, shock, vibration and pressure measurement.The company is the market leader in low-g acceleration sensors with an approximately 50 % market share in the automotive industry. VTI's strong market position is based on a good technology basis, innovative products and excellent reliability and performance.
VTI's owner is EQT III private equity fund (former EQT Northern Europe). VTI's core activities are located in Vantaa, Finland. The company's growth is strong and in the end of 2004 it had approx. 700 employees. VTI's net sales in 2004 totaled 62 million euros. The company's international sales and marketing network includes sales offices in Frankfurt, Germany and Detroit, USA, a representative network in Europe and a partner in Japan. Besides Vantaa, Finland, VTI also maintains manufacturing activities in Mexico.
Distribution
Principal media
APPENDICES (in the attachment)
Appendices for financial statement 2004 (PDF 67 kb)1. Profit and Loss Account
2. Balance sheet
3. Cashflow
4. Selected financial notes
5. Key performance indicators