Aspocomp’s Full-year 2022 Net Sales Up 18%

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Aspocomp Group Plc releases its financial statements for fourth quarter and full year 2022 results.

Fourth Quarter 2022 Highlights:

• Net sales EUR 10.1 (10.8) million, decrease of 6%
• Operating result EUR 0.7 (1.2) million, 7.3% (11.5%) of net sales
• Earnings per share EUR -0.02 (0.17)
• Operative cash flow EUR 0.2 (1.8) million
• Equity ratio 69.4% (60.8%)
• Orders received EUR 4.8 (11.5) million, decrease of 58%

January-December 2022 Highlights:

• Net sales EUR 39.1 (33.2) million, increase of 18%
• Operating result EUR 4.5 (2.2) million, 11.5% (6.8%) of net sales
• Earnings per share EUR 0.52 (0.31)
• Operative cash flow EUR 3.6 (2.3) million
• Equity ratio 69.4% (60.8%)
• Orders received EUR 27.4 (31.3) million, decrease of 13%
• Order book at the end of the review period EUR 14.3 (16.5) million, decrease of 13%

Outlook for 2023:

Inflation and interest rates, the risk of recession and the uncertainties posed by Russia’s war of aggression will affect the operating environment of the company and its customers in the financial year 2023. The cycle of the Semiconductor Industry segment is expected to return to growth in the second half of the year.

Aspocomp estimates that its net sales for 2023 will increase from 2022 and its operating result for 2023 will be at the same level as in 2022. In 2022, net sales amounted to EUR 39.1 million and the operating result to EUR 4.5 million.

CEO’s Review:

“2022 was the best financial year in the history of Aspocomp in its current form. Full year net sales grew by 18 percent to EUR 39.1 million. However, in the last quarter of the year, net sales decreased by 6 percent compared to the previous year after a few individual customer orders were pushed back to the current fiscal year.

The flattening of the demand for information and communication technology equipment, which was strongly accelerated by the COVID-19 pandemic, is slowing down the cycle of the semiconductor industry. The temporary slowdown in the cycle is typical for the industry. Now it also involves an increase in inventory levels in different parts of the supply chain, mainly due to availability problems. The development of Aspocomp’s net sales in the last quarter reflected the decline in the semiconductor industry’s strong demand at the end of 2022. The industry’s long-term growth prospects are still strong. We expect inventory levels to normalize, investment to pick up and the cycle to turn upward again in the second half of 2023.

Despite the slowdown of the cycle in the last quarter, Aspocomp’s Semiconductor Industry customer segment’s full-year net sales grew by 158 percent. As expected, the Automotive customer segment’s sales decreased in the last quarter compared to the corresponding period of the previous year, when customers increased their inventory levels. Aspocomp gained dozens of new customers during the year, especially in the Security, Defense and Aerospace customer segment. Order cycles are typically long in this segment, so we expect net sales growth to materialize with a delay.

Our order book amounted to EUR 14.3 million. The order book decreased by EUR 2.2 million from the comparison period because the orders are scheduled for a shorter period than before due to the normalization of the production supplies market and the general improvement in availability.

Aspocomp’s operating result for the entire fiscal year 2022 was excellent, amounting to EUR 4.5 million. The operating result was 11.5 percent of net sales, while the fourth-quarter operating result amounted to EUR 0.7 million, 7.3 percent of net sales. In the fourth quarter, the result was reduced by the weakening of the US dollar against the euro, the high price of electricity and higher personnel costs related to the company’s growth. Exchange rates weakened the fourth-quarter operating result by EUR 0.3 million. Increased inflation is reflected in Aspocomp’s costs. We strive to transfer the cost increase due to changes in the business environment to our product prices. 

Aspocomp’s Board of Directors proposes to the Annual General Meeting 2023 that a dividend of EUR 0.21 per share be paid for the financial year 2022 (EUR 0.15 per share for the financial year 2021).

Inflation and interest rates, the risk of recession and the uncertainties posed by the Russian war of aggression affect the operating environment of the company and its customers in the financial year 2023. The cycle of the Semiconductor Industry segment is expected to return to growth in the second half of the year. We estimate that Aspocomp’s net sales for 2023 will increase from 2022 and its operating result for 2023 will be at the same level as in 2022. In 2022, net sales amounted to EUR 39.1 million and the operating result to EUR 4.5 million.” 

NET SALES AND EARNINGS

October-December 2022

Fourth-quarter net sales amounted to EUR 10.1 (10.8) million. Net sales decreased by 6 percent compared to the previous year after some customer orders were transferred to the current fiscal year.

The Semiconductor Industry customer segment’s net sales doubled to EUR 4.5 (2.1) million during the fourth quarter.

The Industrial Electronics customer segment’s net sales decreased by 45% to EUR 1.1 (1.9) million during the fourth quarter due to the slowing effect of inflation and the threat of recession on customer investments.

The Security, Defense and Aerospace customer segment’s net sales decreased by 22% to EUR 1.6 (2.0) million. In the customer segment, activity increased significantly, but the order cycles are long, and the results are visible with a delay.

The Automotive customer segment’s net sales decreased by 50% to EUR 1.8 (3.6) million. As expected, the Automotive customer segment’s sales decreased in the last quarter compared to the corresponding period of the previous year, when customers increased their inventory levels.

The Telecommunication customer segment’s demand increased by 10% to EUR 1.1 (1.0) million. The net sales of the customer segment remained moderate due to the phases of the customers’ product development projects.

The five largest customers accounted for 58% (54%) of net sales. In geographical terms, 69% (84%) of net sales were generated in Europe and 31% (16%) on other continents.

The operating result for the fourth quarter amounted to EUR 0.7 (1.2) million. In the last quarter, the result decreased due to the weakening of the US dollar against the euro, the high price of electricity and higher personnel costs related to the company’s growth. Exchange rates weakened the operating profit of the last quarter by EUR 0.3 million. Fourth-quarter operating result was 7.3% (11.5%) of net sales.

Net financial expenses amounted to EUR 0.0 (0.0) million. The result of the review period amounted to EUR -0.2 (1.1) million. The result of the review period was affected by the use of losses confirmed in taxation. The related reduction of the deferred tax asset has no cash flow effect. Earnings per share were EUR -0.02 (0.17).

January-December 2022

January-December 2022 net sales amounted to EUR 39.1 (33.2) million, a year-on-year increase of 18 percent.

The Semiconductor Industry customer segment’s net sales grew to EUR 15.9 (6.2) million. Strong demand in the entire semiconductor industry came to an end in the second half of 2022.

The Industrial Electronics customer segment’s net sales decreased by 26% to EUR 5.5 (7.5) million due to the slowing effect of inflation and the threat of recession on customer investments.

The Security, Defense and Aerospace customer segment’s net sales increased by 1% to EUR 6.1 (6.1) million. The changing geopolitical environment and the increase in defense procurements increased the demand for local manufacturing in Europe.

The Automotive customer segment’s demand declined by 24%, with net sales remaining at EUR 6.8 (8.9) million. Growth in the Automotive segment was limited by a shortage of components and extended delivery times.

The Telecommunication customer segment’s net sales amounted to EUR 4.7 (4.5) million, a year-on-year increase of 5%. Product development needs remained at the previous year’s level.

The five largest customers accounted for 53 (48) percent of net sales. In geographical terms, 89 (84) percent of net sales were generated in Europe and 11 (16) percent on other continents.

January-December 2022 operating result amounted to EUR 4.5 (2.2) million. The operating result was 11.5 (6.8) percent of net sales. The improvement in operating result was mainly due to the growth in net sales and the increase in the share of technologically more demanding and profitable PCBs in the product mix.

Net financial expenses amounted to EUR 0.0 (0.0) million. Earnings per share were EUR 0.52 (0.31).

The order book at the end of the review period was EUR 14.3 (16.5) million. The order book decreased by EUR 2.2 million from the comparison period, as the orders are scheduled for a shorter period than before due to the normalization of the production supplies market and the general improvement in availability.