Scanfil Reports Increased Sales and Lighter Cost Structure in Q3

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Scafil's turnover for July–September amounted to €130.8 million, up by 7.4% compared to the corresponding period of the previous year. Operating profit was €8.5 million, or 6.5% of turnover. Operating profit grew by 12.5% compared to the corresponding quarter of the previous year. The previous year's third quarter included €0.1 million adjustment items.

July – September 2017

• Turnover totaled to €130.8 million (Q3 2016: €121.7 million)
• Operating profit €8.5 million (€7.6 million, before adjustments, €7.7 million), 6.5% of turnover (6.2%, before adjustments, 6.3%)
• Profit was €5.2 million (€6.5 million)
• Earnings per share amounted €0.08 (€0.10, before adjustments €0.11)

January – September 2017

• Turnover totaled to €385.5 million (1-9 2016: €385.7 million)
• Operating profit €21.7 million (€4.4, before adjustments, €17.6), 5.6% of turnover (1.1%, before adjustments, 4.6%)
• Profit for the review period was €15.3 million (-1.2)
• Earnings per share were €0.24 (-0.02, before adjustments 0.19)

The interim report does not include any adjustments to report. Adjustments for the year 2016 include the costs of the reorganisation, sale and closure of poorly profitable units of PartnerTech AB's plant network and the Metal Precision business acquired in the year 2015.

Future outlook

Scanfil estimates, that its turnover for 2017 will be €500–530 million and the operating profit will amount to €28–31 million.

Petteri Jokitalo, CEO of Scanfil plc, comments, "I am very happy about the achieved sales growth as well as the positive development of profitability during the third quarter. Compared to previous year we grew 7% and reached 6.5% operating profit which exceeded this year’s targeted 6%. Return on equity was 18.3%.

"We have been able to increase our operating profit every quarter of the year significantly. This has been possible due to positively developed customer demand and particularly strong growth in new customer sales. The benefits from the optimization of the factory network can be seen, even though it is clear that we still need to improve our operational performance, especially in Myslowice, Poland and Sievi, Finland. I am especially proud of the contribution of Scanfil's employees. The result achieved would not have been possible without the hard work of the employees and their commitment to the set goals."

"Our investment in manufacturing capacity and facilities has been at a record level throughout the year. In August, we moved to a larger production facility in Atlanta, and the Sieradz electronics factory is completing an expansion investment that doubles the factory’s floor space and capacity. New electronics manufacturing lines have been acquired and deployed at the Suzhou, Sieradz and Malmö plants. The production capacity of the Myslowice factory’s sheet metal manufacturing has tripled. With these investments, we have upgraded and increased our manufacturing capacity to meet the foreseen customer demands. These investments also enable us to meet the future growth targets."

"I am pleased with Scanfil's financial development in the third quarter. I am confident that the positive development will continue for the rest of the year and we will achieve the goals set for this year."

Financial Development

The Group’s turnover for January - September was €385.5 (385.7) million. The Group's operating profit for January – September was €21.7 (4.4) million, representing 5.6% (1.1%) of turnover. The operating profit for the previous year includes adjustments total of €13.2 million, consisting of the costs of the reorganization, sale and closure of poorly profitable units of PartnerTech AB's plant network and the Metal Precision business acquired in the year 2015. Operating profit grew 23.3% compared to the adjusted operating profit of the corresponding period of the previous year. Operating profit without adjustments in January – September 2016 was €17.6 million, 4.6% of turnover.

The net profit for the review period was €15.3 (-1.2) million. The net profit for the comparison period without adjustments was €12.5 million.

Earnings per share for the review period were €0.24 (-0.02). In the previous year, the earnings per share without adjustments were €0.19. Return on investment was 16.4 (4.2)%.

The net profit of third quarter includes €0.8 million incremental taxes due to tax audit carried out in the Polish subsidiary and dividends paid from China subsidiaries. Incremental taxes from Polish subsidiary (€0.4 million) are related to the transfer pricing between the Group companies in 2014, and the Group is considering reclaiming the taxes in EU arbitration.

About Scanfil

Scanfil is an international contract manufacturer and system supplier for the electronics industry with 40 years of experience in demanding contract manufacturing. Scanfil provides its customers with an extensive array of services, ranging from product design to product manufacturing, material procurement and logistics solutions. Vertically integrated production and a comprehensive supply chain are the foundation of Scanfil’s competitive advantages: speed, flexibility and reliability.