VTI Group's Interim Report January - September 2007
January - September
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In January - September the net sales developed in accordance with expectations and were €56,5 million (January-September 06: €52,6 million). Net sales grew by 7% compared to previous year's comparable sales. The comparable net sales in 2006 do not include the net sales of the sold automotive sensor module business.
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Cumulatively operating profit was slightly higher than previous year at €4,9 million (4,5) representing 9% (9%) of net sales.
Q3/2007
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Net sales were €18,8 million (Q3/2006: €17,8 million). Net sales grew by 6% compared to previous year's comparable sales.
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Operating profit was €2,2 million (Q3/2006 comparable operating profit €2,7 million) representing 12% of net sales (15%).
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Cash flow from operating activities was €0,6 million (-4,0).
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Investments were €1,9 million (2,3).
This interim report has been prepared in accordance with the IFRS, following the principles for recognition and measurement set out in IAS34, as well as the accounting principles described in the Annual Report 2006. The report has not been audited.
KEY FIGURES
|
€ million |
Reported |
Reported |
Comparable |
Comparable |
Comparable |
Reported |
|
Net sales |
18.8 |
56.5
|
17.8
|
52.6
|
67.5
|
72.4
|
|
Cost of sales |
-13.1 |
-39.0 |
-11.3 |
-34.1 |
-44.4 |
-47.2 |
|
Gross profit |
5.7 |
17.5 |
6.5 |
18.5 |
23.0 |
25.2 |
|
|
|
|
|
|
|
|
| R&D expenses |
-1.6 |
-6.2 |
-1.8 |
-7.2 |
-9.3 |
-9.5 |
| Sales and marketing expenses |
-0.9 |
-3.0 |
-1.0 |
-3.3 |
-4.2 |
-4.2 |
|
Administrative expenses |
-1.0 |
-3.4 |
-0.9 |
-3.5 |
-4.6 |
-4.7 |
|
Other income |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
5.5 |
|
Other expenses |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
-1.8 |
|
|
|
|
|
|
|
|
| Operating profit/loss |
2.2 |
4.9 |
2.7 |
4.5 |
4.9 |
10.5 |
|
(* Excluding non-recurring items, e.g. the sale of the non-core automotive sensor module business. Ongoing business of the sold automotive sensor module business (annual sales ca. €7 million, with net effect of €4.9 million on net sales) as well as effect of cost of sales and fixed expenses until November is also excluded. In Q2/2007 interim report paragraph "Comparable 2006" excluded only the non-recurring items. |
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REMARKS BY CEO MARKKU HIRVONEN
"In the third quarter, VTI's comparable net sales were in accordance with our expectations, exeeding last year's figures. Profitability was good but somewhat lower than comparable profitability in the third quarter of 2006. During the third quarter, VTI achieved important milestones both in automotive and sensing solutions businesses. The launch of the new automotive digital platform in September generated great interest with sample delivery requests. The customer feedback has been extremely good which we are very proud of. In consumer electronics, we have strengthened our position as the leading supplier for altimeters and barometers in handheld satellite navigation terminals (GPS). Also, new applications like De Havilland pilot watch open up interesting opportunities for VTI."
VTI IN JANUARY – SEPTEMBER 2007
Net sales
In January - September the net sales developed according to expectations and were €56,5 million. Sales grew by 7% compared to previous year's comparable figures. In the third quarter, the Group's net sales were €18,8 million (Q3/2006: €17,8 million), an increase of 6% compared to the previous year. The net sales decreased slightly by 1%, in comparison to the second quarter.
|
€ million |
Reported |
Reported |
Comparable |
Comparable 1-9/2006 (* |
Comparable |
Reported |
|
Net sales Automotive Sensing Solutions |
18.8 2.5 |
56.5 |
17.8 |
52.6 |
67.5 58.2 9.3 |
72.4 63.1 |
| *) 2006 net sales excluding the net sales of the sold automotive sensor module business. |
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The net sales of Automotive Business Unit (ABU) in January – September were €48,6 million increasing by 7% in relation to the comparable figures of the previous year. In the third quarter, the net sales were €16,3 million. Comparable net sales without the divested automotive sensor module business in Q3/2006 were €14,9 million. Thus, the comparable net sales increased with 9% over the previous year. The launch of the new automotive digital platform has generated positive feedback. An extension to the basic platform that will cover higher accuracy and multiple measuring ranges is on its way at the same time when the first standard parts are heading towards final customer qualifications.
The net sales of Sensing Solutions Business Unit (SES) in January – September increased by 8%, being €7,9 million (7,3). In the third quarter, the net sales of SES were at the same level as in the previous quarter but lower than the third quarter of 2006 decreasing by 12% to €2,5 million (2,9). The growth in sales in January - September was due to increased net sales in new application areas as well as increased penetration in the current application areas. Being the market leader in accelerometers for Cardiac Rhythm Management, VTI is further increasing its market share, even though the market growth has temporarily slowed down. Instruments business has been growing steadily, in particular in high accuracy inclinometers.
Profitability
Cumulative operating profit was slightly higher than in previous year at €4,9 million (4,5) representing 9% (9%) of net sales. Gross margin was weaker than previous year at 31% (35%) mainly due to slower than expected ramping up of new production capacity. Overhead costs have developed positively and were €12,6 million (14,0).
In the third quarter, the operating profit was €2,2 million (2,7), being at the same level as in the second quarter but lower than comparable operating profit of the third quarter of 2006. Operating margin was 12% (15%). The gross profit for the third quarter weakened slightly and was €5,7 million (6,5). Gross margin was 30% (37%). Profit before taxes was €1,7 million (reported profit before taxes for the third quarter of 2006 was €3,2 million).
Cash flow and financing
In January – September, cash flow from operating activities was strong at €7,8 million (1,4). Cash used in investments amounted to €8,6 million (10,3). Gross capital expenditure was €7,0 million (10,9). In the third quarter, cash flow from operating activities was €0,6 million (-4,0). Active investments continued and cash used in investments was €1,9 million (2,3).
At the end of the reporting period gearing was 24% (42%) and equity ratio was 70% (62%). Net interest bearing liabilities were €18,6 million (30,0). Liquidity remained good throughout the review period.
Research and development
In January – September the research and development expenses were €6,2 million (7,2). During the third quarter, the research and development expenses were €1,6 million (1,8). In January – September €1,0 million (1,8) of development costs were capitalized.
Personnel
VTI employed 704 (751) full time employees at the end of the review period, of which 435 people worked in Finland, 240 in Mexico, 22 in China, 3 in the US, 3 in Germany and 1 in Japan. The average number of personnel during the review period was 681 (772).
SHARES AND SHAREHOLDERS
VTI's largest shareholder is the EQT III Private Equity Fund (former EQT Northern Europe).
Vantaa, 30 October 2007
VTI Technologies Oy
Board of Directors
APPENDICES:
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CONSOLIDATED INCOME STATEMENT
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CONSOLIDATED BALANCE SHEET
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CONSOLIDATED CASH FLOW STATEMENT
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CONSOLIDATED CHANGES IN SHAREHOLDERS' EQUITY
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KEY PERFORMANCE INDICATORS
Further information
Ilkka Virtanen, CFO, VTI Technologies Oy, ilkka.virtanen@vti.fi , tel. +358 40 545 0151
Tiina Olkkonen, Vice President, Corporate Communications,VTI Technologies Oy, tiina.olkkonen@vti.fi , tel. +358 40 827 8844
VTI in Brief
VTI Technologies is a global market leader of low-g acceleration sensors for automotive industry applications and Cardiac Rhythm Management (CRM). Application areas for the company's motion and pressure sensors include the automotive industry, sports & wellness, medical & instruments as well as handheld terminals.
VTI develops and produces silicon-based capacitive sensors using its proprietary 3D MEMS (MicroElectroMechanicalSystem) technology, with application areas in acceleration, inclination, shock, vibration, angular rate and pressure measurement.
VTI is owned by EQT III private equity fund. VTI's net sales in 2006 totaled €72,4 million and the company has approx. 700 employees. Along with the head office in Finland and the global partner network, VTI's international sales and marketing network includes offices in Germany, USA, Japan and China. Besides Finland, VTI also has manufacturing operations in Mexico. More than 99% of the company's products are sold on international markets.