resulting above plan. The

Transcription

1 FOURTH QUARTER 2010

2 SUMMARY COMROD COMMUNICATION GROUP 4 TH QUARTER 2010 The following are the main highlights for Comrod Group since the previous 3rd quarter report: High activity levels in all business units resulting in revenue above plan. The 4th quarter EBITDA margin of % is the highest quarterly EBITDA margin ever for the Comrod Group. Business unit France has recovered substantially from the 3rd quarter results. This is in line with plan. Business unit Norway continued to show strong performance above plan. Fig 1 below illustrates the 2010 operating Group as compared to revenue (MNOK) for Comrod Fig 1 Operating revenues Group (MNOK) 100,0 80, ,0 40, ,0 Q1 Q2 Q3 Q4 As can be seen from Fig 1 above, the 4th quarter 2010 revenue is better than all previous quarters in This has generated a best ever 2010 profit margin. The underlying reasons for the improved financial performance reflect the impact of the Group s strong ongoing focus on automated production processes to maintain high and consistentt product quality while

3 minimizing production costs. This has enabled the Group to increasingly demonstrate efficiency and flexibility to respond to new market demands for reduced lead times and customers constantly amending delivery schedules. The fourth quarter financial contributionn is also starting to reflect the impact of new product lines gradually converting from test production phase to full commercialization. The time to market is often difficult to predict for R& &D intensive products and systems and hencee it is rewarding for the Group to observe new product generations moving from testing to a commercial phase. The Group Board has expressed the opinion that renewed growth for Comrod is essential in order to achieve further value creation. Hencee both organic growth as well as growth through mergers and acquisitions will now be explored more vigorously. Revenues for Q4 of were MNOK 98.5 compared with MNOK in (Figures for corresponding period of 2009 will hereafter be shown in parentheses). Revenues for full year 2010 totalled MNOK (MNOK 344.2). Operating profit before depreciation (EBITDA) for Q4 was MNOK 23.0 (MNOK 15.9). EBITDA for full year amounted to MNOK 58.1 (MNOK 56.0). Fig 2 below illustrates the 2010 operating profit before depreciation (MNOK) for Comrod Group as compared to Fig 2 Operating profit before depreciation (EBITDA) Group (MNOK) Q1 Q2 Q3 Q4

4 OPERATING BUSINESS UNITS BUSINESS UNIT NORWAY Fig 3 below illustrates the 2010 operating Unit Norway compared to revenues (MNOK) for Business Fig 3 Operating revenues BU Norway (MNOK) 70,,0 60,,0 50,,0 40,,0 30,,0 20,, ,,0 0,,0 Q1 Q2 Q3 Q4 Sales and Market Revenues for Q were MNOK 60.7 ( MNOK 39.2). Revenues for full year of 2010 came in at MNOK (MNOK 206.3). the The Norwegian businesss unit continues its solid financial performance. Production and Results Operating profit before depreciation (EBITDA) for Q was MNOK 13.4 ( MNOK 7. 3), while EBITDA margin was 22.1% (18.7%). EBITDA for the full year amounted to MNOK 43.2 (MNOK 41.2) ). The business unit continues to experiencee a challenging situation with the increasing global shortage of electronic components. Comrod Hungary has contributed positively to further improved margins for labour-intensive products.

5 BUSINESS UNIT FRANCE Fig 4 below illustrates the 2010 operating unit France as compared to revenue (MNOK) for business Fig 4 Operating revenues BU France (MNOK) 45,0 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5, Q Q Q Q Sales and Market Revenues for Q were MNOK 38.1 ( MNOK 40.4). For the full year of 2010 revenues were MNOK (MNOK 138.3). Production and Results Operating profit before depreciation (EBITDA) for Q was MNOK 11.0 ( MNOK 10.5), while EBITDA margin was 29.0% (26.1%). EBITDA for the full year of 2010 was MNOK 19.5 (MNOK 22.3) ). The business unit had a strong financial recovery from Q3. product mix contributes positively in this quarter. A favourable OTHER UNITS AND ELIMINATIONS This includes the cost of the parent company Comrod Communication ASA, Comrod UK, Comrod Hungary and Group eliminations. Operating profit before depreciation (EBITDA) for the full year of 2010 was MNOK (MNOK - 7.4).

6 PARENT COMPANY The operating costs for of the parent company amounted to MNOK 7.5 (MNOK 8.8) for the full year of 2010 and MNOK 2.22 (MNOK 2.5) for Q4. GROUP Net financial items was for the quarter MNOK +0.8 (MNOK the full year MNOK -5.5 (MNOK +3.5). -1.1), and for Tax costs for the year was MNOK 7.9 (MNOK 10.7) ). Inventories are increased by MNOK 4.3 during the quarter and MNOK 10.3 during the year due to higher order backlog at year end compared with 2009 year end. Current receivables are increased by MNOK 3.2 in the quarter and decreased by MNOK 1.9 during the year. Current liabilities are increased by MNOK 11.4 in Q4 and decreased by MNOK 5.6 during the year. Total working capital is thus decreased by MNOK 3.9 in the quarter and increased by MNOK 14.0 during the year. Net interest bearing debt is decreased by MNOK 7..3 to MNOK 53.3 during the quarter and MNOK 19.9 during the year. Total balance sheet at end of December was MNOK ( MNOK 323.9), and the equity ratio was 49.9% (45.2%). Group liquidity remains strong. The Group fulfils all financial covenants related to external funding. Research & Development Comrod Communicationn Group has a long track record of developing new, leading edge technology products in cooperation with demanding international customers. As part of the strategy for future growth, several products are in the phase of being tested and/or launched. Among these are; Jamming antennas New telescopic mast range HF antenna for navy applications Various antenna control systems (ACS) OUTLOOK The Board is satisfied with the Q4 financial results. Following a strategic review the Board is now committed to take steps to enablee the Group to further expand its business within the global niche defense communication market and other selected civil markets. However,

7 continued volatility in the Group s current key markets are likely to continue also in 2011 and increased shortage of electronic components might be a challenge. The current level of activity is expected to continue into the first quarter of Approved by the Board of Directors 14 February 2011.

8 Comrod Communication Group - Condensed interim financial information 4th quarter (All figures in NOK 1.000) Year CONSOLIDATED INCOME STATEMENT Unaudited Unaudited Unaudited Audited Operating revenues Cost of materials Payroll expenses Other operating expenses Operating profit before depreciation (EBITDA) ,3 % 20,0 % EBITDA-margin 17,5 % 16,3 % Depreciation Operating profit (EBIT) ,9 % 15,0 % EBIT-margin 12,5 % 8,1 % Net financial items Profit/loss before tax Tax Profit/(loss) Attributable to: Equity holders of the parent Non-controlling interests 0 0 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Profit/(loss) Change in actuarial gain/(loss) (Net of tax) Change in gain/(loss) on hedge of net investment (Net of tax) Change in gain/(loss) on cash flow hedges (Net of tax) Exchange differences on translation of foreign operations Other comprehensive income/(loss) for the period (Net of tax) Total comprehensive income/(loss) for the period (Net of tax) Attributable to: Equity holders of the parent Non-controlling interests 0 0 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Intangible assets Tangible fixed assets Financial fixed assets 0 0 Inventories Receivables Bank deposits and cash Total assets Paid-in capital Other equity Non-controlling interests 0 0 Provisions Interest-bearing long-term liabilities Interest-bearing current liabilities Other current liabilities Total liabilities and equity CONSOLIDATED STATEMENT OF CASH FLOW Profit before tax Depreciation and write-downs Other Non cash elements Change in net working capital Net cash flow from operating activities Net cash flow from investment activities Net cash flow from financing activities Net change in cash and cash equivalents Cash and cash equivalents at start of period Cash and cash equivalents at end of period CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Equity at start of period Profit/loss in period Other comprehensive income/(loss) Share based payment Capital increase (Net of tax) Purchase of own shares Equity at end of period KEY FIGURES Equity ratio 49,9 % 45,2 % Liquidity ratio I 2,1 2,0 Return on equity (annualised) 17,8 % 16,3 % Total return (annualised) 9,4 % 7,5 % Earnings per share 1,44 1,21 Diluted earnings per share 1,44 1,21 Cash flow from operations per share 1,96 3,13 Equity per share 8,76 8,53 Net interest-bearing liabilities

9 Comrod Communication Group - Condensed interim financial information 4th quarter (All figures in NOK 1.000) Year INFORMATION ON BUSINESS OPERATING UNITS Unaudited Unaudited Unaudited Audited France: Operating revenues Operating profit before depreciation (EBITDA) ,0 % 26,1 % EBITDA-margin 17,1 % 16,1 % Operating profit (EBIT) ,1 % 23,2 % EBIT-margin 13,6 % 12,8 % Pretax income Norway: Operating revenues Operating profit before depreciation (EBITDA) ,1 % 18,7 % EBITDA-margin 19,7 % 19,9 % Operating profit (EBIT) ,2 % 13,9 % EBIT-margin 15,7 % 16,3 % Pretax income Other, adjustments and eliminations: Operating revenues Operating profit before depreciation (EBITDA) Operating profit (EBIT) Pretax income Group: Operating revenues Operating profit before depreciation (EBITDA) ,3 % 20,0 % EBITDA-margin 17,5 % 16,3 % Operating profit (EBIT) ,9 % 15,0 % EBIT-margin 12,5 % 8,1 % Pretax income ) Figures for the operating business units do not include elimination of internal sales.

10 NOTE 1: REPORTING ENTITY Comrod Communication ASA is a company domiciled in Norway. The interim financial statements ending on 31 December 2010 comprise Comrod Communication ASA and its subsidiaries (collectively referred to as the Group). NOTE 2: SIGNIFICANT ACCOUNTING PRINCIPLES AND STATEMENT OF COMPLIANCE The accounting policies applied by the Group in these financial statements are the same as those applied by the Group for the year ended 31 December As per Q the newly elected Board of Directors decided to amend the composition of the Groups segments with the objective to obtain full focus on the Groups operational units. From Q2 2010, the reported segment information will consist of the operating units in Norway and France. The segment category Other, adjustments and eliminations includes the parent company Comrod Communication ASA, Comrod UK, Comrod Hungary and group eliminations. Figures for corresponding periods have been restated accordingly. These interim financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), IAS 34 Interim Financial Reporting. These statements do not include all the information required for full annual financial statements, and should be read in conjunction with the financial statements of the Comrod Communication Group for the year ended 31 December 2009 and the above mentioned accounting principles. NOTE 3: ESTIMATES The preparation of interim financial statements requires management to make judgments, estimates and assumptions which affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgments made by management in preparing these interim financial statements when applying the Group's accounting policies and the key sources of estimate uncertainty are the same as those applied to the consolidated financial statements of the Group for the year ended 31 December 2009.