CEO’s review

Our growth remained strong for the fourth year in a row. Net sales for 2019 were 7 percent higher compared to the last year’s reference period. Our growth clearly exceeded the total PCB market growth, which is estimated to have been below 1 percent (Custer Consulting, February 2020). However, fourth-quarter sales were approximately 4 percent lower compared to the last year’s strong reference period. Net sales for 2019 amounted to EUR 31.2 million.

Telecommunications remained the largest customer segment with growth of almost 20 percent from the previous year. Growth was strongest in the first half of the year. Sales in the fourth quarter did not reach the level of the previous year due to a very strong comparison period and the timing of customer development needs.

In the Automotive segment, net sales were 6 percent lower than in the comparison period, mainly due to the introduction of ship transport, which delayed the accumulation of net sales although demand remained stable. Aspocomp’s automotive products have in the past been largely used in heavy transport vehicles, but during the autumn we achieved a breakthrough with several products for passenger cars, too. Volume deliveries for new low-emission car models began at the end of the year.

In the Security, Defense and Aerospace segment, sales remained at the previous year’s level. The R&D investments of the segment were increased significantly during the year. New products and customers will bring business opportunities as early as 2020. During the year, the development process of the defense and aviation quality certificate AS9100 was also launched at the Oulu plant.

In the Semiconductor segment, sales grew by almost 60 percent. Multi-year development investments are now generating new growing business. The segment’s growth outlook is positive. The newly acquired technology capabilities support the needs of the Semiconductor Industry segment in particular. The first phase of the investment program was mainly completed in 2019.

The general economic situation and the decline in investments in Europe slowed down our Industrial Electronics segment. Sales decreased by almost 10 percent from the previous year. The decline was particularly visible in the Nordic countries.

The order book developed positively throughout the year and amounted to EUR 4.4 million at the end of the year, a year-on-year increase of almost 60 percent.

The operating result for the year rose to EUR 3.4 million. Operating result was 11 percent of net sales. In the fourth quarter, the operating result was clearly down from the strong comparison period at EUR 0.7 million. The decline in operating profit was mainly due to the slowdown in demand for product development during the last quarter. The result was also burdened by increasing R&D investments in new products.

The coronavirus epidemic that began in China is strongly affecting the supply chain of the entire electronics industry. This undermines our ability to assess net sales development, especially during the first half of 2020.

Espoo, March 10, 2020

Mikko Montonen, President and CEO