CEO’s review

Net sales for the first quarter weakened significantly in the supply chains of the electronics industry due to disruptions caused by the coronavirus pandemic. Demand soon recovered a robust level already in March, but this in itself was not enough to compensate for weak profitability at the beginning of the year, and the operating result remained unprofitable.

Exceptional circumstances hinder customers’ production and some factories are closed or underutilized. The European car industry is in a particularly difficult position, with several production plants being shut down. There are intermittent restrictions and delays in the availability of raw materials and components. Similarly, transport of consumables and end products is significantly slower and more expensive than before.

First quarter net sales amounted to EUR 6.7 million, a year-on-year decrease of 12 percent. Net sales decreased especially in the automotive industry and telecommunications segments.

The operating result for the first quarter amounted to EUR -0.4 million. The operating result includes a EUR 0.3 million loan loss provision related to the weaker financial position of an individual customer. The operating result was also burdened by the decline in net sales and the weakening of the product range, as it became more difficult to carry out quick-turn deliveries in the prevailing conditions.

The order book continued to grow strongly and amounted to EUR 5.6 million at the end of March, a year-on-year increase of almost 70 percent.

Despite a strong order book, our assessment of future developments includes exceptionally high uncertainty due to the coronavirus pandemic and its negative impact on the economy. Customer demand, operating conditions and requirements may weaken or fluctuate very rapidly. In spite of the major uncertainties and growth in risks, we estimate that 2020 our sales and operating result will be at the previous year’s level.”

Espoo, May 5, 2020

Mikko Montonen, President and CEO