CEO’s review

April-June net sales decreased by 26 percent year-on-year and amounted to EUR 7.0 million. Weak demand, especially in the Semiconductor Industry and Telecommunication customer segments, was reflected in Aspocomp’s net sales. However, demand has already begun to improve gradually: Aspocomp’s order book developed positively in the second quarter compared to the beginning of the year, and some customers have announced that they will bring forward their orders for the end of the year and 2025. The challenges related to the quality of production have also mostly been resolved.

Net sales of the semiconductor industry customer segment turned to moderate growth compared to the first quarter, and the global market has seen year-on-year growth every month during the beginning of 2024. According to the Semiconductor Industry Association, which follows the semiconductor industry, sales of semiconductors grew globally in January-May by more than 19 percent from the comparison period of 2023. Positive development has also been seen in Aspocomp’s order book and product demand for the rest of the year. Growth prospects in the semiconductor industry are still strong.

Among other customer segments, the Automotive Industry saw the best performance in the second quarter. Telecommunication customer segment continued to be weighed down by the weak demand situation among end customers.

It was decided to end the personnel layoffs that started in the first quarter when the market situation and the demand for Aspocomp’s products turned to growth. As the demand forecast for the end of the year and the order book have increased, we have started to recruit more staff to prepare for increasing our production capacity.

The second-quarter operating result fell into the red and amounted to EUR -1.2 million. The operating result was burdened by the decrease in net sales, changes in the product mix as well as the additional quality assurance work caused by the process failure that continued until the end of 2023. Personnel costs were reduced through layoffs.

Inflation and interest rates, the economic recession, the uncertainties posed by Russia’s war of aggression and the situation in the Middle East, and global trade policy tensions will affect the operating environment of Aspocomp and its customers in the 2024 fiscal year. Demand for Aspocomp’s products is expected to recover gradually during 2024. We reiterate the guidance that was published on March 14, 2024, that Aspocomp’s net sales will increase from 2023 and its operating result improve from 2023. In 2023, net sales amounted to EUR 32.3 million and the operating result was a loss of EUR 1.7 million.

I started as Aspocomp’s CEO a little less than two months ago. After meeting customers, staff and the largest shareholders, I am impressed by how strong the company’s reputation is; customers know us especially as experts in the most challenging circuit board solutions. We are a sought-after partner, and our staff is committed and professional. After the difficult last year, Aspocomp is in a very interesting phase of development. The company’s future prospects are bright, and we are preparing to take our share of the growing market. As demand recovers and the order book grows, during the rest of the year we will focus strongly on improving supply security and increasing capacity quickly, if necessary, to the level required by demand. There is still a lot of work ahead, but I see significant potential in the company.

Espoo, July 18, 2024
Manu Skyttä