Aspocomp Posts 4% Sales Growth in Q1

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Aspocomp's full-year guidance remains unchanged. In 2018, net sales are expected to grow approximately 10% and the operating result to be better than in 2017. In 2017, net sales amounted to EUR 23.9 million and the operating result to EUR 0.8 million (Company Announcement, April 19, 2018).

Key figures 1-3/2018 in brief

• Net sales: EUR 6.1 million (EUR 5.9 million)
• EBITDA: EUR 0.6 million (0.5)
• Operating result: EUR 0.3 million (0.2)
• Earnings per share: EUR 0.04 (0.04)
• Operational cash flow: EUR 0.3 million (0.7)
• Order book at the end of period: EUR 3.0 million (2.2)

CEO’S Review

“Sales developed favorably in all customer segments, amounting to EUR 6.1 million. Net sales increased by 4% compared to last year's reference period. Growth in net sales was reduced by the adoption of the new IFRS standard at the beginning of the year. Excluding the effects of IFRS standard on consignment warehousing, net sales growth would have been 11%. This difference is due to changed timing in revenue recognition in consignment warehousing.

Customer demand improved significantly toward the end of the first quarter and the order book grew to EUR 3.0 million. A pick-up is seen in a wide range of areas, especially in next-generation telecommunications networks and the automotive industry. Several technology companies and operators have announced early plans for 5G technology deployment. The development, testing and deployment phase of new technology is expected to generate significant demand in the next few months and years. In the automotive industry, the ongoing breakthrough in electronics also supports growing demand.

The operating result for January-March grew to EUR 0.3 million thanks to growth in net sales and higher factory utilization, as well as the cost savings yielded by operational development programs. The operating profit margin rose to 5%. Cash flow from operations amounted to EUR 0.3 million.

Investments rose to EUR 1.4 million, mainly due to the acquisition of Aspocomp's production facility in Oulu and the launch of the investment program announced in December 2017. The acquisition of the PCB factory premises in Oulu and future investments to improve technological capabilities and capacity will increase competitiveness and bolster the company’s position as a partner to the world’s leading technology companies.”

Net Sales and Earnings

January-March 2018

First-quarter net sales amounted to EUR 6.1 million (EUR 5.9 million), a year-on-year increase of 4%. Growth in net sales was reduced by the adoption of the new IFRS standard at the beginning of the year. Excluding the effects of IFRS standard on consignment warehousing, net sales growth would have been 11%. This difference is due to changed timing in revenue recognition in consignment warehousing.

The five largest customers accounted for 45% of net sales (51%). In geographical terms, 96% of net sales were generated in Europe (98%), 2% in Asia (1%) and 2% in North America (1%).

The operating result for the first quarter amounted to EUR 0.3 million (EUR 0.2 million) thanks to growth in net sales and higher factory utilization, as well as the cost savings yielded by operational development programs. First-quarter operating result was 4.7% of net sales.

Net financial expenses for the first quarter amounted to EUR 0.0 million (EUR 0.0 million). Earnings per share were EUR 0.04 (EUR 0.04).

The order book at the end of the review period was EUR 3.0 million (EUR 2.2 million), representing a year-on-year increase of about EUR 0.8 million. The order book was strengthened, especially in the telecommunications network and automotive industry segments.

Outlook for The Future

The company's full-year guidance remains unchanged. In 2018, net sales are expected to grow approximately 10% and the operating result to be better than in 2017. In 2017, net sales amounted to EUR 23.9 million and the operating result to EUR 0.8 million (Company Announcement, April 19, 2018).

The cornerstones of Aspocomp's growth include, for instance, next-generation 5G telecommunications and government networks, the e-revolution in the automotive industry, the development of testing requirements for semiconductor components as well as the spread of artificial intelligence and mechanical applications in the industry.

A major share of Aspocomp’s net sales is generated by quick-turn deliveries and R&D series, and thus the company’s order book is short. The company's aim is to systematically expand its services to cover the PCB needs of customers over the entire life cycle and thereby balance out variations in demand and the order book.

About Aspocomp

A printed circuit board (PCB) is used for electrical interconnection and as a component assembly platform in electronic devices. Aspocomp provides PCB technology design, testing and logistics services over the entire lifecycle of a product. The company’s own production and extensive international partner network guarantee cost-effectiveness and reliable deliveries.

Aspocomp’s customers are companies that design and manufacture telecommunication systems and equipment, automotive and industrial electronics, and systems for testing semiconductor components for security technology. The company has customers around the world and most of its net sales are generated by exports.

Aspocomp is headquartered in Espoo and its plant is in Oulu, one of Finland’s major technology hubs.