Plc Uutechnic Group Oyj HALF YEAR REPORT 1.1. - 3..217
PLC UUTECHNIC GROUP OYJ HALF YEAR REPORT 1.1. 3..217 Uutechnic Group s turnover from 1.1.-3..217 was 1.7 million euros (1.9 million) and its operating loss was -.7 million euros (operating profit 1.1 million). Uutechnic Group s order book at the end of June 217 stood at 14.9 million euros (19.5 million). The earnings per share was EUR -.1 (.1). Key figures (1 EUR) Turnover 217 1-1 55 21 1-1 942 21 1-12 3 377 Operating profit/loss % of turnover -74-4,5 1 5,3 881 2,4 Return on equity (ROE), % Return on investment (ROI), % Earnings per share (EPS), EUR -8,2-4,9 -,1 14,2 11,,1 7,2 2,8,1 Order backlog 14 939 19 495 15 899 OUTLOOK The Group seeks to be a globally known and preferred cooperation partner with a good financial standing in selected product and market segments. The Group pursues growth organically while also considering opportunities for growth through acquisitions. The main objective for 217 is to improve the Group s profitability. Depart from previous announcement Uutechnic Group expects its revenue to be lower than in 21 and the operating profit to remain at the last year s level. Group s another key objective to grow and strengthen the mixing technology business has developed favorably. The order backlog of Mixing Technology business has more than doubled compared to the same period last year. BUSINESS REPORTING Uutechnic Group focuses on improving the competitiveness of its customers by providing advanced process technology and a unique service concept worldwide. Its product range includes agitators, pressure vessels, process and storage tanks, reactors and heat exchangers, as well as different types of long welded and machined axially symmetrical parts, such as rolls, cylinders, pipes and cones. The Group s main industries are hydrometallurgy and mining, pulp, paper and food industries, as well as fertilizer industry and other chemical industries, and environmental technology. Plc Uutechnic Group Oyj, the parent company of Uutechnic Group, is listed on Nasdaq Helsinki. The Group s subsidiaries are wholly owned by the parent company. The parent company is responsible for the Group s management, strategic planning, financial administration, IT, financing and HR management. The Group s business operations are carried out by the subsidiaries: AP-Tela Oy, Japrotek Oy Ab, Uutechnic Oy and Stelzer Rührtechnik International GmbH. All of the Group s business operations are reported as one segment. 2 Plc Uutechnic Group Oyj Half Year Report 217
Mixing Technology business In the Mixing Technology business line the first half of the year has proceeded as planned. Customer activity has been relatively high in all industries which has enabled high order intake. This is a good starting point for the second half of the year and due to strong order backlog the Mixing Technology business line is expected to grow clearly compared to last year. Vessel business In the Vessel business line order intake for the beginning of the year has been significantly lower than expected and the order backlog has not developed as planned. Quality issues with construction materials in a project delivered during reporting period caused unexpected costs. The company has taken actions to receive compensations from the material supplier. In the Vessel business line co-determination negotiations were started in the second quarter of the year to improve cost efficiency and competitiveness. The negotiations ended after the reporting period on July 12th. It was decided that the number of personnel will be adjusted in accordance with the company s financial situation and order backlog. Terminations of employment contracts will concern 11 persons maximum and temporary lay-offs may last more than 9 days. The goal to get 2 percent improve on the company s competitive advantage will show partially on the second half of the year and fully in 218. Market situation in the Tanks business continues to be challenging. Roll and Pipe business In the Roll and Pipe business the beginning of the year was challenging due to weak starting point and low order intake. The operations and production capacity were adjusted with co-determination negotiations that ended on January. Since February order intake has progressed very well and order backlog is at good level even though lower than last year s record high level. Development actions concerning production planning have improved production transparency, efficiency and outcome. Outlook for the second half of the year is positive. NEW ORDERS AND ORDER BOOK During the reporting period, Uutechnic Group received new orders for 1.2 million euros (24.2 million euros). Order intake in the Mixing Technology business have grown significantly compared to last year but in the Vessel business order intake is fundamentally lower. In the Rolls and Pipes business order intake is lower than last year s record high level but still at good level. At the end of the reporting period Uutechnic Group s order book stood at 14.9 million euros (19.5 million euros). The order back log extends until 218. Order Backlog (TEUR) 3 24 187 24 18 1 154 12 H1 217 H1 21 22 2 18 1 14 12 1 8 4 2 New Orders (TEUR) 19 495 14 939 3..217 3..21 3 Plc Uutechnic Group Oyj Half Year Report 217
TURNOVER AND PROFITABILITY Turnover for the reporting period was 1.7 million euros (1.9 million euros) and operating loss was -.7 million euros (operating profit 1.1 million euros). Finland represented 54.9 % of the Group s turnover, including indirect exports. The rest of Europe accounted for 34.7 % of turnover, while Asia represented 9.5 %, South America. % and North America.3 %. The Group s turnover and operating profit did not develop as planned. The negative outcome is resulting from material issues in one of the Vessel businesses project. The company has taken actions to get compensations from the material supplier. Turnover (TEUR) 18 1 55 1 942 12 H1 217 H1 21 FINANCIAL STANDING AND LIQUIDITY At the end of the reporting period, Uutechnic Group s balance sheet stood at 24.4 million euros (25.8 million euros). The Group s interest-bearing liabilities totaled.9 million euros. (5.3 million euros), including EUR 2. million in subordinated loans. The Group s cash flow from operations for the financial year was -3. million euros (1. million euros). At the end of the reporting period, the Group s equity ratio was 82.7% (58.2%) net gearing was.% (4.7%). Return of investment (ROI) was -4.9% (11.%) and return on equity (ROE) was -8.2% (14.2%). Non-current assets on Uutechnic Group s balance sheet totaled 11.5 million euros (11.3 million euros). Equity ratio, % Balance sheet total 1, 3 8, 82,7 24 24 41 25 838, 58,2 18 4, 12 2,, 3..217 3..21 3..217 3..21 4 Plc Uutechnic Group Oyj Half Year Report 217
EQUITY The Group s equity stood at EUR 9. million (1.2 million). Loans granted by two shareholders, totaling EUR 2. million, were converted into unsecured subordinated loans in conjunction with a financing arrangement in 215. These loans are subordinated loans in accordance with chapter 12 of the Limited Liability Companies Act, and their capital repayments and interest payments must meet the conditions provided in the Act. The loans will be repaid as a one-off payment on 31 December 219. However, the company is entitled to pay early. The annual interest rate on the outstanding loan capital is 4%. Of the total loan capital, EUR 1 million involves a specific right of exchange. To the extent that loan capital remains unpaid on 31 December 217, the creditors are entitled to convert the unpaid part of the capital, in part or in full, into shares in the company at a value of EUR.25 per share. This right of exchange is based on the authorization to issue shares that was approved by the company s Annual General Meeting on 14 April 215. RESEARCH, PRODUCT DEVELOPMENT AND INVESTMENTS During the first half of the year the Mixing Technology business line has launched productization project aiming for increasing efficiency by harmonized product structures and modern IT tools of for sales and product management. Concerning new products, one patent application was issued. Further on, one product development project for emerging to a market novel to Uutechnic has proceeded into a virtual prototyping phase. The Group s investments in fixed assets for the financial year totaled.1 million euros (.7 million euros) and mainly consisted of minor investments in equipment. PERSONNEL At the end of the reporting period, Uutechnic Group had 193 (189) employees of whom 8 (77) were white collar and 17 (112) were blue collar. Of the employees, 129 worked in Finland and 4 in Germany. BOARD OF DIRECTORS, MANAGEMENT AND AUDITORS On March 3, 217 the Annual General Meeting re-elected Sami Alatalo (chairman), Hannu Kottonen, Kristiina Lagerstedt and Jouko Peräaho as board members of Plc Uutechnic Group Oyj. Hannu Kottonen and Kristiina Lagerstedt are independent of the company and its major shareholders. Jouko Peräaho has served as the Group s CEO since 9.3.217. Martti Heikkilä served until 8.3.217. Ernst & Young, Authorised Public Accountants, served as the Group s auditor, with Osmo Valovirta, APA, as the principal auditor. The Company adheres to the Finnish Corporate Governance Code 215 for listed companies (Nasdaq 5 Plc Uutechnic Group Oyj Half Year Report 217
Helsinki). The Group publishes its Corporate Governance Statement as part of its annual report and on its website at www.uutechnicgroup.fi. SHARES AND SHAREHOLDERS The Annual General meeting of the company on 3 March 217 decided, based on the Board s proposal, that the right to the shares incorporated in the book-entry system and the rights that the shares carry have been forfeited with regard to the 3 48 shares being on the joint book-entry account in the name of the company and opened on the behalf of the shareholders whose rights have not been declared for registration during the registration period. Plc Uutechnic Group Oyj s Board of Directors cancelled shares in question as announced in March 3th. After the cancellation the total number of the shares is 5 51 73, which represents 5 51 73 shares According to the book-entry security system, Plc Uutechnic Group Oyj had 1572 registered shareholders on 3 June 217. The total number of shares owned directly or through controlled companies by the Board of Directors, CEO and Group management was 11 115 8 shares or 2.% of all shares. Plc Uutechnic Group Oyj is listed on the NASDAQ OMX Helsinki Oy exchange. The company s stock symbol is UUTEC and its ISIN code is FI9978. Plc Uutechnic Group Oyj has not paid dividends on the reporting period. AUTHORISATION TO ISSUE SHARES In accordance with the proposal of the Board of Directors, the Annual General Meeting of 3 March 217 authorized the Board of Directors to resolve on the issue of at most 1.. new shares or special rights entitling to shares. REMARKABLE RISKS AND UNCERTAINTY FACTORS AND THEIR MANAGEMENT The demand for Uutechnic Group s products is dependent on trends and developments in the global economy and the Group s customer industries, which poses a general external risk to its operations. The Group seeks to mitigate the risks arising from changes in demand by targeting its sales operations in line with current trends in various market areas and customer industries. According to the Board of Directors of the Group s parent company, other significant risks and uncertainty factors to which the Group is exposed are related to at least the following aspects: Turning the Group s previously loss-making units into profitable units or maintaining the profitability of units requires further improvements in competitiveness and the achievement of sufficient operating volumes. The Group will continue to implement consolidation processes and pursue identified synergies to improve profitability. It is possible that not all of the identified synergies will be achieved, or that processes will fail. The Group aims to grow organically as well as through acquisitions. There is no certainty that the Group will be able to find suitable candidates for acquisition, obtain the financing required for acquisitions or acquire businesses on satisfactory terms. The acquisition prices paid in the context of business combinations and the goodwill generated by them also involve risks. The Group s calculations to test goodwill are based on financial forecasts and assumptions prepared by the management. Part of the Group s business operations consist of major or large project deliveries. Extensive and complicated projects involve the risk that the future costs and any other risks related to the delivery cannot be estimated sufficiently accurately in the bidding phase. In such cases, the result of the project may prove weaker than expected. In contracts for extensive projects, the claims for compensation for delayed delivery or deficient performance may be significant. Plc Uutechnic Group Oyj Half Year Report 217
Unfavorable changes in the financial markets may have an effect on the Group s result and the availability of equity and debt financing on competitive terms. Uncertainty in the international economy may lead to payment delays and an increased risk of credit losses. The Group seeks to protect itself against risks using all measures that can reasonably be implemented. These include, among other things, measures aimed at improving profitability and productivity, training for employees, guidelines and instructions, insurance policies, critical examination of the terms and conditions of commercial agreements and the systematic monitoring and development of operations. CIVIL CASES Japrotek Oy Ab has started legal actions at the lower court of justice in Sweden against material supplier due to faulty materials. Based on the current information, the company expects that the costs resulted from these actions will be received from the opponent. EVENTS DURING THE REVIEW PERIOD 2.1.217 Jussi Vaarno appointed as Vice Presindent 19.1.217 AP-Tela Oy s co-determination negotiations concluded 27.2.217 Review of financial statements 8.3.217 Financial statements published 8.3.217 Invitation to the Annual General Meeting 8.3.217 Changes in Uutechnic Group s Business Model and Top Management 1.3.217 Disclosure of Change in Shareholdings under Chapter 9, Section 1 of the Securities Markets Act 1.3.217 Adjustment in announcement about Publication of Financial Statements 217 3.3.217 The decisions of the Annual General Meeting 3.3.217 Change in the Number of the Treasury shares 13.4.217 Change in the Number of the Treasury shares 28.4.217 Business review from January to March 217 29.5.217 Japrotek Oy Ab started co-determination negotiations 29..217 Change in Plc Uutechnic Group Oyj s management team EVENTS AFTER THE END OF THE REPORTING PERIOD Japrotek Oy Ab s co-determination negotiations concluded July 12 217. It was decided that the number of personnel will be adjusted in accordance with the company s financial situation and order back log. Terminations of employment contracts will concern 11 persons maximum and temporary lay-offs may last more than 9 days. ACCOUNTING PRINCIPLES This half year financial report was prepared in accordance with the IAS 34 standard. It does not include all of the notes or other information to be presented with financial statements. For this reason, the half year financial report should be read together with the financial statements for 21. The half year financial report was prepared in line with the accounting principles presented in the financial statements for 21. The information included in this half year financial report has not been audited. The figures are presented in thousands of euros (EUR 1,), unless otherwise mentioned. KEY FIGURES OF THE UUTECHNIC GROUP S HALF YEAR REPORT The figures are presented in thousands of euros (EUR 1,), unless otherwise mentioned. The figures are unaudited. 7 Plc Uutechnic Group Oyj Half Year Report 217
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, IFRS 1 EUR 1.1.-3..217 months 1.1.-3..21 months 1.1.-31.12.21 12 months NET TURNOVER Change in finished goods and work in progress Production for own use Other operating income Material and services Employee benefit expenses Depreciations Other operating expenses OPERATING PROFIT OR LOSS 1 55 223 38 9-9 12-5 98-283 -2 377-74 1 942 1 124 82-9 597-5 558-274 -2 314 1 5 3 377-17 149 12-19 397-11 187-582 -4 47 881 Depreciation, amortiztion and impairment loss of acqisition Financing income Financing expenses -4 3-1 -228-135 -45-242 PROFIT OR LOSS BEFORE TAXES -894 72 19 Tax on income from operations 8 3 52 PROFIT OR LOSS FOR THE FISCAL YEAR -82 75 71 OTHER COMPREHENSIVE INCOME: TOTAL COMPREHENSIVE INCOME -82 75 71 NET PROFIT OR LOSS ATTRIBUTABLE: Equity holders of the parent -82 75 71 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE: Equity holders of the parent -82 75 71 Earnings per share calculated on profit attributable to equity holders of the parent: EPS undiluted, euros/share EPS diluted, euros/share -,1 -,1,1,1,1,1 Average number of shares -undiluted -diluted 5 54 5 5 54 5 55 93 21 55 93 21 5 148 248 5 148 248 8 Plc Uutechnic Group Oyj Half Year Report 217
CONSOLIDATED BALANCE SHEET, IFRS 1 EUR 3..217 3..21 31.12.21 ASSETS NON-CURRENT ASSETS Intangible assets Goodwill Tangible assets Available for sale investments Deferred tax assets NON-CURRENT ASSETS 1 998 3 534 5 317 25 21 11 495 2 12 3 534 5 3 25 11 315 1 918 3 534 5 12 25 21 11 71 CURRENT ASSETS Inventories Trade receivables and other receivables Current receivables for revenue recognized in part prior to project completion Tax receivable, income tax Cash and bank CURRENT ASSETS 3 595 4 775 3 935 54 548 12 9 3 95 4 92 5 828 153 545 14 523 2 728 5 2 34 54 1 99 11 995 ASSETS 24 41 25 838 23 75 SHAREHOLDERS EQUITY SHAREHOLDERS EQUITY Share capital Share premium account Fair value reserve and other reserves Translation differences Retained earnings SHAREHOLDERS EQUITY 37 31 9 49 12 1 177 1 28 37 1 188 1 475 NON-CURRENT LIABILITIES Deferred tax liability Subordinated loans Long-term liabilities, interest-bearing Non-current provisions NON-CURRENT LIABILITIES 413 2 1 274 4 51 474 2 2 298 4 772 425 2 1 9 274 4 38 CURRENT LIABILITIES Short-term liabilities, interest-bearing Trade payables and other liabilities Tax liability, income tax CURRENT LIABILITIES 3 55 7 18 44 1 72 1 31 9 548 1 858 1 53 7 342 44 8 921 EQUITY AND LIABILITIES 24 41 25 838 23 75 Subordinated loans: Loans granted by two shareholders, totalling EUR 2. million, were converted into unsecured subordinated loans in conjunction with a financing arrangement in 215. These loans are subordinated loans in accordance with chapter 12 of the Limited Liability Companies Act, and their capital repayments and interest payments must meet the conditions provided in the Act. The loans will be repaid as a one-off payment on 31 December 219. However, the company is entitled to pay early. The annual interest rate on the outstanding loan capital is 4%. Of the total loan capital, EUR 1 million involves a specific right of exchange. To the extent that loan capital remains unpaid on 31 December 217, the creditors are entitled to convert unpaid part of the capital, in part or in full, into shares in the company at a value of EUR.25 per share. This right of exchange is based on the authorisation to issue shares that was approved by the company s Annual General Meeting on 14 April 215. 9 Plc Uutechnic Group Oyj Half Year Report 217
CONSOLIDATED FLOW OF FUNDS STATEMENT, IFRS 1 EUR 1.1.-3..217 1.1.-3..21 1.1.-31.12.21 FLOW OF FUNDS FROM OPERATIONS: Profit/loss for the period Adjustments: Depreciations Depreciation, amortiztion and impairment loss of acqisition Other income and expenses, no payment related Financing income and expenses Taxes -82 283 4 12 12-8 75 274 228-7 135-3 71 582 45-841 23 195 Flow of funds from operations before the change in working capital Change in working capital: Change in short-term receivables Change in inventories Change in short-term non-interest-bearing creditors Flow of funds from operations before financial items and taxes Interests and other financial expenses from operations paid Dividends received Interests and other financial income received Income taxes paid FLOW OF FUNDS FROM OPERATIONS -451-1 374-87 -271-2 93-59 2 1-3 18 1 29-2 38-1 22 3 238 979-125 -113 741 1 343-1 158-44 934 1 7-11 1 5-98 822 FLOW OF FUNDS FROM INVESTMENTS: Investments in tangible and intangible assets Income from sales of tangible and intangible assets FLOW OF FUNDS FROM INVESTMENTS -113 1-112 -72-72 -1 11-1 11 FLOW OF FUNDS FROM FINANCIAL ITEMS: Share issue Dividends paid Withdrawals of short-term loans Repayments of short-term loans Withdrawals of long-term loans FLOW OF FUNDS FROM FINANCIAL ITEMS 2 58-739 1 79-5 434-172 1 75 18-435 79 1 419 Change of liquid funds Liquid assets at the beginning of the fiscal year Liquid assets at the end of the fiscal year Change in liquid assets according to the balance sheet -1 31 1 99 548-1 31-1 79 545-1 1 23 79 1 99 1 23 1 Plc Uutechnic Group Oyj Half Year Report 217
CONSOLIDATED STATEMENT OF CHANGES IN SHARE- HOLDERS EQUITY, IFRS 1 EUR Change in shareholders equity 1.1.-3..217 Shareholders equity at the beginning of the fiscal period Comprehensive income: Profit or loss for the period Translation differences Total comprehensive income Transactions with owners: Transactions with owners total 37 1 188-82 -82 1 475-82 -82 Shareholders equity at the end of the fiscal period 37 31 9 49 Change in shareholders equity 1.1.-3..21 Shareholders equity at the beginning of the fiscal period Comprehensive income: Profit or loss for the period Translation differences Total comprehensive income Transactions with owners: Dividend distribution Transactions with owners total Shareholders equity at the end of the fiscal period 12 12 472 75 75 1 177 9 54 75 75 1 28 Change in shareholders equity 1.1.-31.12.21 Shareholders equity at the beginning of the fiscal period Comprehensive income: Profit or loss for the period Translation differences Total comprehensive income Transactions with owners: Share issue Transaction costs for equity (listing and issue costs) Transactions with owners total 12 271-15 25 472 71 71 9 54 71 71 271-15 25 Shareholders equity at the end of the fiscal period 37 1 188 1 475 11 Plc Uutechnic Group Oyj Half Year Report 217
KEY FIGURES The business indicators 1 EUR Half Year Report 1.1.-3..17 months Half Year Report 1.1.-3..1 months Annual Report 1.1.-31.12.1 12 months Turnover Operating profit/loss % of turnover Profit/Loss before taxes % of turnover 1 55-74 -4,5-894 -5,4 1 942 1 5,3 72 -,7 3 377 881 2,4 19,3 Earnings per share calculated on profit attributable to equity holders of the parent % of turnover Return on equity (ROE), %) Return on investment (ROI), %) Equity ratio, % Current ratio Net gearing Gross investments in fixed assets % of turnover Order backlog Consolidated balance sheet total Total number of personnel at the end of the period -82-5, -8,2-4,9 82,7 1,2, 113,7 14 939 24 41 193 75 4,2 14,2 11, 58,2 1,3 4,7 73 4,1 19 495 25 838 189 71 2, 7,2 2,8 78,2 1,3 3,9 1 11 2,8 15 899 23 75 195 Indicator calculation formulas Return on equity % (ROE) = Profit or loss before taxes - income taxes Shareholders equity + minority interest (average) x 1 Return on investments % (ROI) = Profit or loss before taxes + interest expenses and other financial expenses Total assets - non-interest bearing debts (average) x 1 Equity ratio = Shareholders equity + minority interest Total assets - advances received x 1 Current ratio = Current assets Short-term liabilities Nettovelkaantumisaste (gearing) = Interest bearing debts - cash and bank deposits and other securities Shareholders equity + minority interest x 1 12 Plc Uutechnic Group Oyj Half Year Report 217
SECURITIES AND RESPONSIBILITIES 1 EUR Granted securities 3..217 31.12.21 Dept secured by real estate and corporate mortgages Loans from financial institutions and Credit limits in use Total 2 3 211 5 211 2 1 14 3 14 Loans from financial institutions are secured by real estate and corporate mortgages and share pledges. Share pledges are the share capitals of Plc Uutechnic Group Oyj s subsidiaries. Mortgages granted to secure loans and bank guarantees Real estate mortgages Corporate mortgages Total 4 743 22 238 2 981 4 743 22 238 2 981 Other granted secirities for own behalf Deposits Total 9 9 9 9 Other granted securities Plc Uutechnic Group Oyj has granted as securities the share capitals of its subsidiaries AP-Tela Oy, Japrotek Oy, Uutechnic Oy and Stelzer Rührtechnik International GmbH. Contingent Liabilities and Other Liabilities 3..217 31.12.21 Bank quarantees Bank guarantee limits total Bank guarantee limits in use 11 5 5 349 1 5 485 Operating lease agreements Within a year More than one year but no more than 5 years Total 23 27 5 2 18 38 Operating lease contracts consist mainly of short-term leasing contracts for IT equipment and sotware. The terms and conditions are of leasing agreements correspond to those of normal operational leasing agreements. 13 Plc Uutechnic Group Oyj Half Year Report 217
Other rent agreements The Group has rented production and office buildings for its use with various types of terminable rental agreements. Rent liabilities Within a year More than one year but no more than 5 years Later Total 3..217 58 2 842 1 949 5 359 31.12.21 58 2 785 2 4 5 399 Other contingent liabilities Granted guarantees to customers and creditors Guarantees granted to secure bank guarantee limit Guarantees granted to secure bank loans Guarantees granted to secure rent guarantees Total 3..217 927 11 5 5 211 4 18 38 31.12.21 1 23 1 5 3 14 4 15 234 14 Plc Uutechnic Group Oyj Half Year Report 217
Plc Uutechnic Group Oyj HALF YEAR REPORT 1.1. - 3..217