Scanfil Posts 1Q19 Results

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January – March

• Turnover totalled to EUR 129.9 million (Q1 2018:139.6), down 7.0%
• Operating profit EUR 6.8 (10.3) million, 5.3% (7.4%) of turnover
• Profit for the review period was EUR 4.8 (7.6) million
• Earnings per share were EUR 0.08 (0.12)

Future Outlook

Scanfil estimates, that its turnover for 2019 will be EUR 560 - 610 million and the operating profit will amount to EUR 36 - 41 million.

Petteri Jokitalo, CEO of Scanfil plc:

Demand during the first quarter was in a low level as expected. Turnover stood at EUR 129.9 million, showing a decrease of 7% from the previous year. However, there were no signs of any general decrease in customer demand. Instead, the decrease in sales was highly customer-specific, resulting from low demand among a few significant customers. Therefore, sales in the Consumer Applications and Communication segments decreased clearly from the previous year, while sales within other customer segments were stable or developed positively.

The operating profit during the first quarter was EUR 6.8 million, comprising 5.3% of turnover.  The operating profit decreased by EUR 3.5 million from the previous year due to a lower turnover and a partially unfavorable product mix.  Net cash flow from operations and Scanfil’s equity ratio developed positively during the first quarter. At the end of the quarter, Scanfil’s equity ratio was 46.3% and net gearing was 30.8%.  Scanfil has a strong balance sheet which enables the investments required for growth and provides possibilities in terms of potential business acquisitions.

During the beginning of the year we invested, for example, in an electronics assembly line at the Malmö plant in order to respond to expected increases in demand. During the past three years, we have more than tripled our electronics manufacturing capacity at the Malmö plant, supported by growing customer needs. We continued our investments in improved productivity and in automated production and material handling.

Customer demand is picking up, and we expect the second quarter to be much stronger, both in terms of turnover and operating profit. I am confident that we will reach our operational and financial goals set for this year. We will renew our guidance for 2019, and we expect our turnover for 2019 to be EUR 560–610 million and our operating profit to be EUR 36–41 million.

I am satisfied with our operational development in the long term, as well as with our capability to defend our position during the first quarter.  I would like to thank all our customers and suppliers for your trust and support, and all our employees for a job well done.

Financial Development

The Group’s turnover for January – March was EUR 129.9 (139.6) million, decrease of 7.0% compared to the corresponding period of the previous year. The Consumer Applications customer segment showed a particular decrease as its turnover fell by EUR 12.7 million, or 35.1%. This decrease resulted from a change in demand for a single customer’s products. The Group’s operating profit for January – March was EUR 6.8 (10.3) million, 5.3% (7.4%) of turnover. Operating profit decreased 33.4% compared the corresponding period of the previous year. The decrease in the operating profit mainly resulted from the decrease in turnover. The net profit for the review period was EUR 4.8 (7.6) million.

Earnings per share for the review period were EUR 0.08 (0.12). Return on investment was 14.0% (21.8%). The lower return on investment resulted from results being weaker than in the previous year.

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.