Aspocomp Posts Excellent Q2 Results

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Aspocomp announces an excellent second quarter, net sales increased by 33% and the operating result was 17% of net sales.

Second Quarter 2022 Highlights:

• Net sales EUR 9.6 (7.2) million, increase of 33%
• Operating result EUR 1.6 (0.5) million, 16.6% (6.4%) of net sales
• Earnings per share EUR 0.23 (0.06)
• Operative cash flow EUR 0.9 (-0.1) million
• Equity ratio 67.1% (63.6%)
• Orders received EUR 9.6 (12.7) million, decrease of 24%
• JANUARY-JUNE 2022 HIGHLIGHTS
• Net sales EUR 18.6 (13.4) million, increase of 39%
• Operating result EUR 2.4 (0.0) million, 12.9% (-0.3%) of net sales
• Earnings per share EUR 0.35 (-0.01)
• Operative cash flow EUR 1.6 (0.5) million
• Equity ratio 67.1% (63.6%)
• Orders received EUR 22.6 (19.9) million, increase of 14%
• Order book at the end of the review period EUR 20.5 (10.8) million, increase of 89%

Outlook for 2022

Demand is expected to improve in all customer segments. However, a global shortage of components may limit growth in customer demand.

Russia’s war of aggression against Ukraine and the sanctions imposed against Russia are not expected to have any direct impact on Aspocomp’s business, financial position or cash flow.

Aspocomp reiterates the guidance that was published on July 14, 2022. Aspocomp estimates that its net sales for 2022 will increase and its operating result for 2022 will improve clearly from 2021. In 2021, net sales amounted to EUR 33.2 million and the operating result to EUR 2.2 million.

In its previous outlook for 2022 (Interim Report for January 1-March 31, 2022, on April 26, 2022), Aspocomp estimated that its net sales for 2022 will increase and its operating result for 2022 will improve from 2021. In 2021, net sales amounted to EUR 33.2 million and the operating result to EUR 2.2 million.

CEO’s Review

“The second quarter of the year went excellently. Net sales continued to grow strongly and rose 33 percent to EUR 9.6 million. Net sales for the first half of the year rose to EUR 18.6 million, a year-on-year increase of 39 percent.

Strong demand continued in the Semiconductor Industry customer segment, and its net sales tripled to EUR 4.2 million. The Telecommunication segment also saw brisk growth, up 50 percent, and its net sales reached EUR 1.5 million. The Industrial Electronics segment clearly slowed down and its net sales fell by 50 percent to EUR 1.0 million.

New orders valued at EUR 9.6 million were received and the order book increased to EUR 20.5 million. Growth in the order book was particularly supported by increased demand in the Semiconductor Industry customer segment. Of the order book, EUR 17.2 million has been scheduled for delivery this year and the remaining EUR 3.3 million next year.

The second-quarter operating result increased clearly to EUR 1.6 million, amounting to 17 percent of net sales. The improvement in operating result in the second quarter was mainly due to the increase in net sales and the improved product mix focusing on more technologically demanding PCBs. The operating result for the first half of the year amounted to EUR 2.4 million and the operating result percentage rose to 13 percent.

Russia’s war of aggression in Ukraine and the sanctions imposed on Russia have no direct impact on Aspocomp’s business. We reiterate the guidance for 2022 that was updated in July.”

Net Sales and Earnings

April-June 2022

Second-quarter net sales amounted to EUR 9.6 (7.2) million, a year-on-year increase of 33%.

The Semiconductor Industry customer segment’s net sales tripled to EUR 4.2 (1.3) million during the second quarter. The growth of the Semiconductor Industry customer segment was driven by ongoing global investments in significant increases in chip capacity.

The Industrial Electronics customer segment’s net sales decreased by 40% to EUR 1.1 (1.8) million during the second quarter. Inflationary pressures and problems with the availability of components slowed down industrial investments.

The Security, Defense and Aerospace customer segment’s net sales increased by 16% to EUR 1.5 (1.3) million. The changing geopolitical environment increases the demand for local manufacturing.

The Automotive customer segment’s demand declined by 29%, with net sales remaining at EUR 1.2 (1.7) million. Growth in the Automotive segment was limited by a general shortage of components and extended delivery times in the automotive industry.

The Telecommunication customer segment’s net sales amounted to EUR 1.5 (1.0) million, a year-on-year increase of 50%. Growth was supported by customers’ increased PCB needs in product development and new customers.

The five largest customers accounted for 56% (49%) of net sales. In geographical terms, 92% (84%) of net sales were generated in Europe and 8% (16%) on other continents.

The operating result for the second quarter amounted to EUR 1.6 (0.5) million. The improvement in operating result in the second quarter was mainly due to the increase in net sales and the improved product mix. Second-quarter operating result was 16.6% (6.4%) of net sales.

Net financial expenses amounted to EUR 0.0 (0.0) million. Earnings per share were EUR 0.23 (0.06).

January – June 2022

First-half net sales amounted to EUR 18.6 (13.4) million, a year-on-year increase of 39 percent.

The Semiconductor Industry customer segment’s net sales grew strongly to EUR 7.1 (2.0) million. The growth of the Semiconductor Industry customer segment was driven by ongoing global investments in significant increases in chip capacity.

The Industrial Electronics customer segment’s net sales decreased by 12% to EUR 2.8 (3.2) million. Inflation and problems with the availability of components caused the segment’s demand to decline during the second quarter.

The Security, Defense and Aerospace customer segment’s net sales increased by 16% to EUR 3.0 (2.6) million. The changing geopolitical environment increases the demand for local manufacturing.

The Automotive customer segment’s demand declined by 13%, with net sales remaining at EUR 2.9 (3.3) million. Growth in the Automotive segment was limited by a general shortage of components and extended delivery times in the automotive industry.

The Telecommunication customer segment’s net sales amounted to EUR 2.7 (2.3) million, a year-on-year increase of 23%. Growth was supported by customers’ increased PCB needs in product development and new customers.

The five largest customers accounted for 54 (45) percent of net sales. In geographical terms, 91 (86) percent of net sales were generated in Europe and 9 (14) percent on other continents.

First-half operating result amounted to EUR 2.4 (0.0) million. First-half operating result was 12.9 (-0.3) percent of net sales.

Net financial expenses amounted to EUR 0.0 (0.0) million, including a deferred exchange gain of EUR 0.1 million. Earnings per share were EUR 0.35 (-0.01).

The order book at the end of the review period was EUR 20.5 (10.8) million. Growth in the order book was particularly supported by increased demand in the Semiconductor Industry customer segment. Of the order book, EUR 17.2 million has been scheduled for delivery this year and the remaining EUR 3.3 million next year.

Investments

Investments during the review period amounted to EUR 1.2 (0.8) million. The company has continued its investments to increase capacity in line with its strategy, but the installation of equipment has been slowed down in part due to delays in material and component deliveries caused by the COVID-19 pandemic. The investments were mainly focused on upgrading the capacity of the Oulu plant, improving automation, and increasing production efficiency.

In 2017, Aspocomp launched an investment program amounting to a total of EUR 10 million to further strengthen its position as a strategic partner to leading companies in the semiconductor, automotive, defense and aerospace, and telecommunications (5G) industries. The second phase of investments was launched in the spring of 2020, when the company was granted a total of EUR 1.35 million in development support by the ELY Center, corresponding to about 25 percent of its total cost. The ongoing second phase of the investment program aims in particular to increase the capacity of the Oulu plant, improve automation and increase production efficiency. In this current program, which will run until the end of 2022, all of the new equipment will be installed in the existing Oulu plant building and no additional plant space will be built.

Cash Flow and Financing

Cash flow from operations amounted to EUR 1.6 (0.5) million. Cash flow increased due to improved operating profit.

Cash assets amounted to EUR 1.5 (1.9) million at the end of the period. Dividend payment was EUR 1.0 (0.0) million. Interest-bearing liabilities amounted to EUR 3.8 (5.0) million. Gearing was 11% (18%). Non-interest-bearing liabilities amounted to EUR 6.3 (4.8) million.

At the end of the period, the Group’s equity ratio amounted to 67.1% (64.0%).

The company has a EUR 2.0 (1.0) million credit facility, which was not in use at the end of the review period. In addition, the company has a recourse factoring agreement, of which EUR 0.0 (0.0) million was in use.

Personnel

During the review period, the company had an average of 144 (137) employees. The personnel count on June 30, 2022, was 148 (140). Of them, 93 (86) were blue-collar and 55 (54) white-collar employees.