ASPOCOMP GROUP OYJ STOCK EXCHANGE RELEASE February 15, 2007 at 8:00 AMASPOCOMP’S FINANCIAL STATEMENTS BULLETIN 2006
– Net sales: EUR 148.9 million (EUR 135.4 million in 2005). Net sales grew by
10.0 percent and net sales of the Asian plants grew by 31.7 percent.– Operating profit: EUR -23.3 million (-17.8). The decline was mostly due to the
ongoing conversion project at the Salo plant. Of this, EUR 3.0 million was
attributable to the Salo downsizing in December. Operating profit of the Asian
plants grew markedly.– Earnings per share from continued operations: EUR -1.59 (-1.32).
– Cash flow from operations: EUR 1.9 million (12.7).
– Investments: EUR 24.8 million (25.9).
– Per-share cash flow after investments: EUR -0.92 (-0.61).
The report and reference year figures do not include the Mechanics and Modules
divisions divested in September 2005 and August 2006, respectively.FINANCING OF ASPOCOMP’S GROWTH
Aspocomp is aggressively pursuing its growth strategy by increasingly focusing
on technologically more demanding HDI printed circuit boards (PCBs). The primary
means to growth are further investments in Asia, the fastest growing HDI PCB
market.Aspocomp has issued a stock exchange release on February 15, 2007 regarding
financing of its growth in China and India. Further details can also be found
under the Events after the financial year heading of this release.THE OCTOBER-DECEMBER PERIOD IN BRIEF
Net sales and operating profit, EUR million
2006 change, % 2005
Net sales 38.3 -2.4 39.2
Operating profit -10.3 -5.2Net sales during the October-December period remained on a par with the
reference quarter. The Suzhou, China plant continued to excel and boasted
substantially higher net sales. Net sales of the Oulu, Finland plant remained on
the level of the corresponding quarter in 2005, while they contracted noticeably
in Sriracha, Thailand. Net sales of the Salo, Finland plant weakened
significantly from the reference quarter due to the plant’s prolonged conversion
project and a limited sales volume of newer products. However, the plant’s net
sales improved slightly compared to the July-September period.The Group’s net sales per plant were as follows:
– the Finnish plants, 36 percent (45%)
– the Asian plants, 64 percent (55%)The Group’s net sales by market area were as follows:
– Europe, 60 percent (56%)
– Asia, 27 percent (34%)
– the Americas, 13 percent (10%)The Group’s net sales per product area were as follows:
– handheld devices and telecom networks, 73 percent (69%)
– automotive, industrial and consumer electronics, 27 percent (31%)Operating profit before depreciation was EUR -5.2 million (-0.9) and operating
profit totaled EUR -10.3 million (-5.2).Operating profit in the October-December period was considerably down on the
reference quarter, mainly due to the downsizing costs at the Salo plant and the
plant’s ongoing conversion project. Profit of the Thai plant continued to
decline sharply during the last quarter as a result of prolonged technical
problems and stock write-offs.In contrast, profit of the Chinese plant increased substantially on the
reference quarter as the plant continued running at full capacity.The Group’s net financial expenses were EUR -0.8 million (-0.3) and the profit
for the period was EUR -13.3 million (-12.0). Earnings per share were EUR -0.61
(-0.62).OUTLOOK FOR THE FUTURE
Aspocomp’s main priority in 2007 is to focus the company’s resources on
developing its market position and competitiveness, serving the main global
customers, increasing cost-effectiveness as well as securing the near-term
financing of the Aspocomp Group.The full-year net sales of the Aspocomp Group are forecast to increase
compared to the previous year. Profitability is expected to improve on 2006;
however, the full-year result is anticipated to be clearly unprofitable and
liquidity to remain weak.MAIJA-LIISA FRIMAN, PRESIDENT AND CEO:
“The full-year result was highly unsatisfactory as the conversion project
at the Salo plant continued throughout the year. The plant was being
adjusted to fulfill its strategic role as a manufacturer of both start-up
and early phases of new and demanding products. The last quarter was
burdened by the plant’s below average capacity utilization rate. After the
introduction of two new plating lines during the second half of the year,
the yield of new technology products improved markedly compared to the
first half.Furthermore, the plant’s size was adjusted in the last quarter to better
match its strategic role. The net sales and profit of the smaller Finnish
plant in Oulu improved on last year, proving that it is successful in its
role as another ramp-up facility.Net sales of the Asian plants grew by 32 percent. In China, the HDI (high
density interconnections) PCB volume production capacity was stepped up by
about 50 percent from last year’s average and was in full use throughout
the year. The plant’s net sales picked up considerably and profit more
than doubled. In contrast, profit of the small Thai plant waned during the
latter half of the year due to a rise in material costs, prolonged
technical problems and stock write-offs.In order to better serve our global customers, we set out to build India’s
first HDI PCB plant in Chennai. The piling works started in October and
initial production is expected to begin during the latter half of the
current year. After its gradual ramp-up, the plant is anticipated to
approximately double the Group’s HDI PCB production capacity.Securing further production capacity is a major focus. Thus it is vital to
finance the project in India and additional expansion in China. To date,
we have received equipment financing worth EUR 10 million for the Indian
plant from GE Capital Solutions, as well as issued a convertible debenture
loan amounting to 10.3 million. In addition, the Extraordinary General
Meeting of January 19, 2007, authorized the Board to issue 50,000,000 new
shares and convey 200,000 of the company’s own shares.In 2007, production value for technologically complex HDI PCBs is forecast
to amount to almost USD 6 billion (over EUR 4 billion) globally. Market
researchers expect global HDI PCB revenue to grow by about 8 percent
annually between 2005 and 2010 and in Asia, the annual growth is forecast
at almost 12 percent. By 2010, about 90 percent of the world’s HDI PCB
revenue will be generated in Asia, according to expectations.In order to outpace market growth in the longer term, we are continuously
working on securing the development both in Asia and in Finland. I firmly
believe that these efforts, although time consuming and capital intensive,
are the key to growing globally, serving our customers, and ultimately
creating genuine value for our shareholders.”PRINTED CIRCUIT BOARD MARKET
PCB demand in the global telecom network and automotive segments remained good
during the review year. Solid growth in the handheld devices segment continued
and Aspocomp’s customers reported strong performance. Although average device
prices continued to fall throughout the report year, the global volumes of
products using high-end PCBs remained strong. Limited supply, improving during
the last quarter of the year, as well as rising material costs throughout the
year worked against the normal price erosion trend.According to market estimates, overall global PCB production value in 2006 grew
by almost 11 percent on the previous year. In Asia, it grew by about 12 percent
– and, excluding Japan, almost 19 percent according to industry evaluations.
Demanding HDI PCB production increased even faster than total PCB production and
in Asia, in particular, it was estimated to have grown by almost 22 percent
since 2005.FULL-YEAR CONSOLIDATED NET SALES AND OPERATING PROFIT
Net sales and operating profit, EUR million
2006 change, % 2005
Net sales 148.9 10.0 135.4
Operating profit -23.3 -17.8The Aspocomp Group’s net sales for the financial year were EUR 148.9 million
(135.4), growing by 10.0 percent on the reference year, in line with
expectations.Although the net sales posted by the Oulu plant were clearly higher than in the
previous year, the total comparable net sales of the Salo and Oulu plants in
Finland declined by 14 percent (down 24%) mostly due to the Salo plant’s
conversion project. This cut into the yield and the share of total production
accounted for by new technology products, particularly in the first half of the
year. In addition to the conversion, the latter half of the year suffered mostly
from the Salo plant’s smaller than average load. As a result, the plant’s net
sales for the review year did not measure up to 2005.The decline was clearly offset by particularly strong growth at the Chinese
plant, where sales of the higher-margin HDI printed circuit boards were brisk
and capacity was fully booked throughout the year. The full-year net sales of
the Thai plant grew somewhat on the previous year. The total net sales of the
Asian plants were up 32 percent (up 40%).The Group’s net sales per plant were as follows:
– the Finnish plants, 36 percent (46%)
– the Asian plants, 64 percent (54%)The share of the Asian plants increased compared with the previous year, in line
with the Group’s strategy.The Group’s net sales by market area were as follows:
– Europe, 56 percent (59%)
– Asia, 29 percent (31%)
– the Americas, 15 percent (10%)The Group’s net sales per product area were as follows:
– handheld devices and telecom networks, 68 percent (71%)
– automotive, industrial and consumer electronics, 32 percent (29%)During the review period, the share of Aspocomp’s overall PCB production
accounted for by HDI PCBs totaled 58 percent.Aspocomp’s five largest customers during the year were Elcoteq, Nokia, Philips,
Wabco and Sanmina-SCI. The five largest customers accounted for 54 percent of
net sales (54%).Operating profit before depreciation was EUR -5.3 million (0.2), or -3.5 percent
(0.1%) of net sales. Operating profit was EUR -23.3 million (-17.8).Although the profit of the Chinese plant more than doubled on the previous year,
the heavy losses of the Salo plant in particular cut into the Group’s
profitability during the review year. Losses of the Thai plant mounted on the
previous year due to a sharp fall into the red during the July-December period.
This was attributable to a temporary rise in material costs due to problems with
outsourcing in the third quarter of the year, prolonged technical problems in
the latter half of the year, and stock write-offs in the fourth quarter. Profit
at the Oulu plant improved on the reference year and was clearly in the black.The Group’s net financial expenses were EUR -1.9 million (-0.9). The profit for
the period was EUR -27.2 million (-23.4) and earnings per share from continued
operations were EUR -1.59 (-1.32).FINANCING, INVESTMENTS AND EQUITY RATIO
The Aspocomp Group’s consolidated cash flow from operations during the financial
year was positive due to the strong financial performance of the Chinese joint
venture and sale of receivables amounting to EUR 5.8 million. The Group’s
consolidated net liquid assets at the end of the period amounted to EUR 22.7
million (16.1). Aspocomp Group Oyj’s liquid funds, including unused limits, were
EUR 13.2 million (9.9).Interest-bearing net debt rose to EUR 50.9 million (25.2). The figure contains
EUR 23.7 million (19.6) in financial lease liabilities. Gearing was 74.5 percent
(23.5%), rising due to the poor performance and higher debt level, and non-
interest-bearing liabilities amounted to EUR 38.2 million (37.1).The tangible asset impairment attributable to the downsizing of the Salo plant,
carried out in December to adjust the plant to its strategic role, amounted to
EUR 2.1 million. Notice time salaries due to the downsizing were EUR 0.9
million.Cash flow from operations amounted to EUR 1.9 million (12.7) and investments to
EUR 24.8 million (25.9). Per-share cash flow after investments was EUR -0.92 (-
0.61).Investments were primarily earmarked for the technological investments at the
Salo plant and the expansion of the HDI line at the Chinese plant. Capital
expenditures in Asia were EUR 10.2 million (14.8) and EUR 14.6 million (11.1) in
Europe. Net financial expenses were 1.2 percent of net sales (0.6%).The Group’s equity ratio at the end of the year stood at 37.0 percent (57.8%).
RESEARCH AND DEVELOPMENT
The Group’s research and development expenditure amounted to EUR 3.9 million
(4.8), or 2.7 percent (3.1%) of net sales.During the review year, the main focus of technology development was on HDI semi-
flex PCBs. The development project for one flex layer HDI semi-flex PCBs was
ready for production and customer product tests started during the last quarter.
The venture to develop two flex layer HDI semi-flex PCBs was ready for
industrialization. Research was continued to find a greater number of cost-
effective and reliable materials for both of the semi-flex applications.During the first half of the year, preparations, including an investment plan,
started for volume production of Any Layer Microvia type PCBs. Evaluation of new
materials progressed during the year in order to meet the high frequency
requirement of such designs.Research related to optoelectronics continued throughout the year, and in the
latter half a study was initiated to combine it with flexible applications.Research progressed for applying the HDI rigid-flex concept to dynamic flexible
handheld solutions using hinges. Market studies were launched for these
applications.DIVESTMENT OF THE MODULES DIVISION
On August 9, 2006, Aspocomp Oy and Aspocomp Technology Oy, subsidiaries of
Aspocomp Group Oyj, agreed to sell the Group’s Modules division and modules-
related research and development to Finland-based Selmic Oy. The transaction
included business operations as well as the current and fixed assets of the Oulu
modules plant and modules research and development. The Modules division
generated about 10 percent of the Group’s net sales. The 150 personnel
transferred to Selmic under their existing employment terms. In addition to the
transaction, the companies agreed on the long-term lease of the modules plant to
Selmic. Due to the divestment, Aspocomp became a dedicated PCB company.SHARES AND SHARE CAPITAL
The total number of Aspocomp’s shares at December 31, 2006, was 20,082,052 and
the share capital stood at EUR 20,082,052. Of the total shares outstanding, the
company held 200,000 treasury shares, representing 1.0 percent of the aggregate
votes conferred by all the shares. The number of shares adjusted for the
treasury shares was 19,882,052.A total of 16,559,888 Aspocomp Group Oyj shares were traded on the Helsinki
Stock Exchange during the period from January 1 to December 31, 2006. The
aggregate value of the shares exchanged was EUR 39,209,198. The shares traded at
a low of EUR 1.72 (December 28, 2006) and a high of EUR 4.09 (January 10, 2006).
The average share price was EUR 2.50. The closing price at December 29, 2006,
was EUR 1.78 and the company had a market capitalization of EUR 35.4 million,
adjusted for the number of treasury shares. At the end of the period, nominee-
registered shares accounted for 3.4 percent of the total shares and 1.9 percent
were directly held by non-Finnish owners.The Annual General Meeting authorized the Board of Directors to decide on the
conveyance of a maximum of 200,000 of the company’s own shares. The
authorization was not implemented during the report year.On December 15, 2006, the holdings of Henrik Nyberg in Aspocomp Group
Oyj’s share capital and votes decreased from 8.2 percent to 0.0 percent.CONVERTIBLE LOAN AND STOCK OPTIONS
The Annual General Meeting of April 10, 2006, authorized the Board of Directors
to decide on increasing the share capital through one or several new
subscriptions and/or one or several convertible loans and/or issuing option
rights. The maximum share capital increase was EUR 4,016,410.Consequently, the Board of Directors resolved on November 17, 2006, to issue a
convertible debenture loan as a private placement. The loan was offered for
subscription to a limited number of institutional investors and subscribed by
November 22, 2006. The nominal amount of the loan was confirmed at EUR
10,300,000. The loan entitles to a subscription of a maximum of 4,006,700 new
shares in Aspocomp Group Oyj.The loan was issued on December 1, 2006 and it will be redeemed at 100 percent
of its capital. Its date of maturity is December 1, 2011. The share conversion
rate (the subscription price) is EUR 2.5707. The share subscription period (the
loan conversion period) will begin on February 1, 2007, and end on October 31,
2011. A fixed annual coupon of 5.75 percent will be paid semi-annually.The issue was managed by OKO Bank Plc. No listing will be sought for the loan.
The net proceeds from the sale of the loan will be used to effect potential
acquisitions or other arrangements related to development of the company’s
operations and/or for financing investments.The Annual General Meeting decided to issue stock options to the key personnel
of the Aspocomp Group as well as to a wholly owned subsidiary of Aspocomp Group
Oyj as part of the company’s incentive and commitment program. The maximum total
number of stock options issued will be 930,000. The share subscription period
for the stock options 2006A, 2006B and 2006C will commence only if certain
criteria, decided by the Board of Directors, have been fulfilled. The share
subscription periods will be May 1, 2008 – May 31, 2010, May 1, 2009 – May 31,
2011, and May 1, 2010 – May 31, 2012, respectively.On March 13, 2006, the Board of Directors of Aspocomp Group Oyj decided on a
share-based incentive plan, which consequently came into force once the Annual
General Meeting decided on the issuance of stock options. The plan is directed
at about 12 members of the senior management. The potential reward from the plan
depends on attaining a set target for the Group’s earnings per share (EPS). It
would be paid in 2007 partly as shares in the company and partly in cash. The
reward includes a prohibition to transfer the shares within two years from the
end of the payment period. In addition, the CEO and the Executive Committee of
the company must own the shares in a certain proportion to their annual gross
salary as long as they remain in the employ or service of the Group.PERSONNEL
During the review period, the Aspocomp Group had an average of 3,373 employees
(3,216). The personnel count on December 31, 2006 was 3,346 (3,210). Of them,
2,354 (2,261) were non-salaried and 992 (949) salaried employees. 3,349 (3,197)
personnel worked in PCB production and 24 (19) in Group administration.Personnel by region, average
2006 change, % 2005
Europe 704 -4.2 735
Asia 2,669 7.6 2,481
Total 3,373 4.9 3,216The Group continued to implement the HR development process, adopted during the
beginning of the year, to achieve consistency in operating methods and
documentation in different countries.A job satisfaction survey was carried out in Finland during the third quarter of
the year. Clearly over half of those surveyed were content with their job, and
the results indicated an increase in overall satisfaction compared with the
previous survey in 2004. The personnel were most content with communication and
management effectiveness, company identification and teamwork. Of these,
satisfaction with communication effectiveness increased the most. The
participants were least satisfied with their performance appraisals and personal
development as well as rewards and benefits.On March 1, 2006, Balachandran a/l Lakshmanan was appointed as Project Manager
and Petri Kangas as Chief Financial Officer of the Indian HDI PCB plant project.On April 10, 2006, Tapio Engström (42), M.Sc.(Econ), was appointed Chief
Financial Officer, Deputy to the CEO and member of the Executive Committee, with
effect from July 1, 2006. Mr. Engström was previously Director, Finance, at
Vaisala Corporation. Aspocomp’s previous Chief Financial Officer, Pertti
Vuorinen (56), was appointed Chief Financial Officer for Aspocomp’s Asia-Pacific
operations, with effect from July 1, 2006. He is based in Suzhou, China. In
financial matters, Mr. Vuorinen reports to Tapio Engström, and in expansion
projects to CEO Maija-Liisa Friman.On October 10, 2006, Reijo Savolainen (50) was appointed Senior Vice President,
Salo plant. Mr. Savolainen previously worked as Senior Vice President
responsible for the Aspocomp Group’s Mechanics and Modules division. While in
charge of the Salo plant, he remains a member of the Group’s Executive Committee
and reports to the CEO.On December 4, 2006, Henry Gilchrist (49) was appointed SVP, Asian operations,
and member of the Group’s Executive Committee, as of January 8, 2007. He took
charge of the Aspocomp Group’s operations in China and India, with the initial
focus on China. His previous tasks include Director Business Development, Sales
& Marketing, Asia Pacific at Elcoteq SE, and various operative and sales roles
in global companies located in Asia. Mr. Gilchrist reports to the CEO.The codetermination negotiations started in November at Aspocomp’s Salo and
Padasjoki plants and the Group’s R&D organization were concluded on December 19,
2006. As a result, a total of 113 personnel were made redundant; 102 were non-
salaried and 11 salaried employees. It was decided that production at the
Group’s Padasjoki plant will be closed down and its 18 personnel terminated.Following the personnel cuts, the Salo organization and the Group’s R&D
organization consisted of 243 non-salaried and 49 salaried employees in total.
The negotiations concerned about 430 personnel at Aspocomp Oy, including the
Salo and Padasjoki plants and the Group’s R&D organization.BOARD AND AUDITORS
The Annual General Meeting of Aspocomp Group Oyj on April 10, 2006, decided that
the number of the Board members is six. Aimo Eloholma, Roberto Lencioni, Tuomo
Lähdesmäki, Gustav Nyberg and Anssi Soila were re-elected as Board members and
Yoshiki Sasaki, a Japanese citizen, was elected as a new member. At its
organization meeting the Board re-elected Tuomo Lähdesmäki as Chairman, and
Yoshiki Sasaki was appointed as Vice Chairman. The Board elected Aimo Eloholma,
Roberto Lencioni and Tuomo Lähdesmäki as members of the Compensation and
Nomination Committees. Gustav Nyberg, Anssi Soila and Yoshiki Sasaki were
elected as members of the Audit Committee.The meeting decided that the annual and per-meeting remunerations to the members
of the Board of Directors remain the same as in 2005. In addition to the annual
remuneration, the member of the Board residing abroad will receive EUR 1,500 per
meeting and be reimbursed for reasonable travel and accommodation expenses. In
accordance with their decision of May 5, the Board members have used 40 percent
of their annual remuneration to acquire the company’s shares from the market.
The shares may not be conveyed before the Annual General Meeting of 2007.The Annual General Meeting re-appointed the authorized public accounting firm
PricewaterhouseCoopers Oy as auditor for 2006.EXPANSION IN ASIA
On January 3, 2006, Aspocomp Group Oyj announced that its subsidiary P.C.B.
Center (Thailand) Co., Ltd was renamed Aspocomp (Thailand) Co., Ltd. The Group’s
total holding in the Thai subsidiary amounts to about 84.5 percent.Aspocomp made a decision in principle on January 17, 2006, to expand its HDI
business by building a printed circuit board plant in Chennai, India. On May 5,
2006, the Board of Directors confirmed the investment. The plant will be the
first demanding technology HDI PCB plant in India. The total investment was
initially expected to amount to about EUR 75 million, of which about EUR 60
million is earmarked for building and machinery and EUR 15 million for working
capital and start-up costs. The project will be financed with long-term loans
raised by the parent company and the Indian subsidiary. On November 2, 2006,
Aspocomp and GE Capital Solutions, Global Electronics Services executed a term
sheet that provides EUR 10 million of equipment financing for the new facility.The company Aspocomp Electronics India Pvt. Ltd. was registered in April and
piling works for the plant started on October 4, 2006.On June 4, 2006, the Group established a trading company in Shanghai, China.
On November 17, 2006, Aspocomp announced that it is negotiating with Chin-Poon
Industrial Co., Ltd. on the further development of the companies’ joint venture
ACP Electronics Ltd. (ACPE) and the opportunity to increase Aspocomp’s
investments in China. The partners are looking into the option of transferring
the manufacturing of simpler, single-sided PCBs to Chin-Poon’s other plant in
China. This would allow an increase in manufacturing capacity for
technologically demanding HDI PCBs at ACPE. The duration of the negotiations
cannot be estimated at this point and they may not result in a contract.ASPOCOMP S.A.S.
In the cases against Aspocomp by the former employees of Aspocomp S.A.S., the
French Supreme Court re-registered Aspocomp’s appeal for further proceedings on
October 11, 2006. All except one of the former employees gave their consent for
the re-registration. Aspocomp placed a security against the consent to secure
its potential payment obligations under the First Appellate Court decisions. It
paid a compensation of EUR 30,702 to one employee in accordance with the
decision of the First Appellate Court. If the Supreme Court annuls the decision
of the First Appellate Court, Aspocomp will have the right to reclaim the
compensation. The decision of the Supreme Court is expected during the spring of
2007.BOARD OF DIRECTORS’ DIVIDEND PROPOSAL
The Board of Directors will propose to the Annual General Meeting of 2006, that
shareholders will not be paid a dividend for 2006 (EUR 0.00 in 2005). The Board
suggests that the assets be invested in developing the Group’s market position
and competitive ability, and serving its main customers in an increasingly
competitive environment.EVENTS AFTER THE FINANCIAL YEAR
The Extraordinary General Meeting of January 19, 2007, authorized the Board of
Directors to decide on issuing 50,000,000 new shares and conveying the 200,000
Aspocomp shares held by the company. The authorization can be executed either
against payment or for free to the company’s shareholders in proportion to their
holding, or by means of a directed issue, waiving the pre-emptive subscription
right of shareholders, if there is a weighty financial reason for the company to
do so. The directed issue can be a free issue only if there is an especially
weighty reason for the company to do so, taking the interests of all
shareholders into account.The authorization includes the right to receive new shares in the company or own
shares held by the company against payment. The share subscription price will be
paid either in cash or the subscriber’s receivables will be offset against the
subscription price. In addition, the authorization includes the right to decide
on a free issue to the company itself. The number of such shares can amount to a
maximum of one-tenth of all the company’s shares.The Board of Directors has the right to decide on other particulars of the share
issues. The authorization is valid for two years from the date of the decision
of the General Meeting.The Meeting also changed the number of the Board members to seven and elected
Johan Hammarén, Tapio Hintikka and Kari Vuorialho as new members of the Board,
with effect from January 19, until the Annual Shareholders’ Meeting. Gustav
Nyberg and Roberto Lencioni resigned from the Board with effect from January 19,
2007.In addition, the Meeting decided to amend the current Articles of Association
such that Article 3, which concerns the minimum and maximum share capital,
Article 4, which concerns the number of shares, and Article 16, which concerns
the redemption obligation, were deleted. In addition, the numbering of Articles
5, 9, 13 and 15 of the Articles of Association was changed. The Articles were
amended as specified in the invitation to the company’s Extraordinary General
Meeting, published as a stock exchange release on December 22, 2006.Based on the authorization of the Extraordinary General Meeting of January 19,
2007, and in order to finance part of its proposed investments in India and
China, Aspocomp Group Oyj considers launching a rights issue in the near future,
ranging from EUR 20 to 30 million. The issue would be based on the shareholders’
pre-emptive subscription right. Aspocomp has appointed Evli Bank Plc, Corporate
Finance as its financial advisor for the rights issue. To further finance the
investments, the Aspocomp Group is currently in negotiations to raise long-term
debt. The duration of the negotiations cannot currently be estimated and there
can be no assurance that they will result in an agreement. Aspocomp is also
considering further strengthening its equity later this year. The company has
issued a stock exchange release regarding financing of its growth on February
15, 2007.OUTLOOK FOR THE FUTURE
Aspocomp’s main priority in 2007 is to focus the company’s resources on
developing its market position and competitiveness, serving the main global
customers, increasing cost-effectiveness as well as securing the near-term
financing of the Aspocomp Group.Aspocomp’s goal is to grow faster than the overall market for its products,
primarily by investing aggressively in Asia.As part of the company’s investment program, Aspocomp is currently
negotiating with Chin-Poon Industrial Co., Ltd. to acquire 100 percent
ownership in the companies’ Suzhou, China based joint venture ACP Electronics
Ltd. This would enable Aspocomp to fully benefit from ACP Electronics’s
profitability and cash flow and to increase the Group’s HDI PCB production
capacity in China. The management of Aspocomp is not currently in a position
to estimate the duration of the negotiations that may not necessarily result
in an agreement.To boost the capacity even further, Aspocomp launched a project in 2006 to
build a HDI PCB plant in India. According to current estimates, the plant
will start trial production towards the end of 2007 and full production in
2008.Expansion of HDI PCB production capacity in India and China is forecast to
have visible positive effect on the company’s net sales starting 2008. The
investments required for the expansion are estimated to result in a
significant increase in the company’s indebtness and markedly higher
financing costs.The Salo plant’s conversion project will continue by optimizing the plant’s
operations to correspond its strategic role as a manufacturer of both start-
up and early phases of new and demanding products. The plant’s progress and
performance will be monitored closely.The full-year net sales of the Aspocomp Group are forecast to increase
compared to the previous year. Profitability is expected to improve on 2006;
however, the full-year result is anticipated to be clearly unprofitable and
liquidity to remain weak.ACCOUNTING POLICIES
These financial statements have been prepared in accordance with the IFRS
(International Financial Reporting Standards) recognition and valuation
principles. The Aspocomp Group adopted IFRS reporting on January 1, 2005, and
the current accounting policies are consistent with the financial statements for
2005.INCOME STATEMENT,
OCTOBER-DECEMBER 10-12/06 10-12/05
MEUR % MEUR %NET SALES 38,3 100,0 39,2 100,0
Other operating income 1,2 3,2 0,4 1,0
Materials and services -20,3 -53,1 -20,5 -52,5
Personnel expenses -9,9 -25,8 -9,2 -23,5
Other operating expenses -14,4 -37,9 -10,8 -27,5
Depreciation and amortization -5,2 -13,5 -4,2 -10,8
OPERATING PROFIT -10,3 -26,9 -5,2 -13,2
Financial income and expenses -0,8 -2,1 -0,3 -0,9
PROFIT ON CONTINUING
OPERATIONS BEFORE TAX -11,1 -29,0 -5,5 -14,0Taxes -2,2 -5,6 -5,9 -15,1
PROFIT ON CONTINUING
OPERATIONS -13,3 -34,7 -11,4 -29,1Profit on discontinuing
operations 0,0 0,0 -0,6 -1,4PROFIT FOR THE PERIOD -13,3 -34,7 -12,0 -30,6
Profit attributable to
minority interests 0,8 2,1 0,8 2,1
equity shareholders -14,1 -36,8 -12,8 -32,7INCOME STATEMENT,
JANUARY-DECEMBER 1-12/06 1-12/05
MEUR % MEUR %NET SALES 148,9 100,0 135,4 100,0
Other operating income 3,3 2,2 1,3 1,0
Materials and services -80,0 -53,8 -67,0 -49,5
Personnel expenses -36,5 -24,5 -34,1 -25,2
Other operating expenses -41,0 -27,6 -35,4 -26,1
Depreciation and amortization -18,1 -12,1 -18,0 -13,3
OPERATING PROFIT -23,3 -15,7 -17,8 -13,1
Financial income and expenses -1,9 -1,3 -0,9 -0,7
PROFIT ON CONTINUING
OPERATIONS BEFORE TAX -25,2 -16,9 -18,7 -13,8Taxes -2,2 -1,5 -5,6 -4,1
PROFIT ON CONTINUING
OPERATIONS -27,4 -18,4 -24,3 -17,9Profit on discontinuing
operations 0,2 0,1 0,9 0,7PROFIT FOR THE PERIOD -27,2 -18,3 -23,4 -17,3
Profit attributable to
minority interests 4,1 2,8 1,9 1,4
equity shareholders -31,3 -21,0 -25,3 -18,7CONSOLIDATED BALANCE SHEET
12/06 12/05 Change
ASSETS MEUR MEUR %NON-CURRENT ASSETS
Intangible assets 4,5 4,7 -4,0
Tangible assets 95,0 95,2 -0,3
Investments in
associated companies 0,2 0,2 0,0
Investment property 3,4 2,9 14,9
Available for sale
investments 0,3 0,4 -27,1
Deferred income tax assets 1,3 0,2 455,5
Other long-term receivables 6,5 7,5 -12,5
TOTAL NON-CURRENT ASSETS 114,9 111,1 0,1CURRENT ASSETS
Inventories 20,9 18,5 13,2
Short-term receivables 30,0 39,9 -24,9
Available for sale
investments 0,0 0,0
Cash and bank deposits 22,7 16,1 40,6
TOTAL CURRENT ASSETS 73,6 74,5 -1,3TOTAL ASSETS 184,8 185,6 -0,4
SHAREHOLDERS’ EQUITY
AND LIABILITIESShare capital 20,1 20,1 0,0
Share premium fund 27,9 27,9 0,0
Treasury shares -0,8 -0,8 0,0
Special reserve fund 46,0 46,0 0,0
Revaluation and other funds 0,0 0,1 -100,0
Retained earnings -48,6 -17,0 185,9
Equity attributable
to shareholders 44,6 76,3 -37,6
Minority interest 23,7 30,9 -23,2
TOTAL EQUITY 68,3 107,2 -33,5Long-term borrowings 29,7 18,0 65,2
Provisions 1,1 1,4 -25,2
Short-term borrowings 43,9 23,3 88,2
Trade and other payables 41,8 35,7 17,1
TOTAL LIABILITIES 116,5 78,4 48,5TOTAL SHAREHOLDERS’
EQUITY AND LIABILITIES 184,8 185,6 -0,4CONSOLIDATED CHANGES IN EQUITY,
JANUARY-DECEMBERShare Share Spec- Re- Trea- Trans- Ret- Minor- Total
cap- premium ial valu- sury lation ained ity equity
ital fund re- ation shar- differ- earn- inter-
serve and es ences ings est
fund other
fundsBalance at
31.12.2005 20,1 27,9 46,0 0,1 -0,8 -2,2 -14,8 30,9 107,2Trans- -2,6 -2,6 -5,2
lation
differ-
encesNet profit -31,3 4,1 -27,2
Converible 1,9 1,9
bond
equity
componentOther -0,1 0,4 0,3
itemsReduce of -8,7 -8,7
subsidiary
equityBalance at
31.12.2006 20,1 27,9 46,0 0,0 -0,8 -4,9 -43,7 23,7 68,3CONSOLIDATED CHANGES IN EQUITY,
OCTOBER-DECEMBERShare Share Spec- Re- Trea- Trans- Ret- Minor- Total
cap- premium ial valu- sury lation ained ity equity
ital fund re- ation shar- differ- earn- inter-
serve and es ences ings est
fund other
fundsBalance at
30.9.2006 20,1 27,9 46,0 0,0 -0,8 -4,2 -30,9 27,9 86,0Trans- -0,7 -0,8 -1,4
lation
differ-
encesNet profit -14,7 1,5 -13,3
Converible 1,9 1,9
bond
equity
componentOther 0,0 0,0 0,0
itemsReduce of -4,9 -4,9
subsidiary
equityBalance at
31.12.2006 20,1 27,9 46,0 0,0 -0,8 -4,9 -43,7 23,7 68,3CONSOLIDATED CASH FLOW STATEMENT, 10-12/06 10-12/05
OCTOBER-DECEMBER MEUR MEURCash flow from operations 1,0 7,3
Cash flow from investments -4,0 -12,2
Cash flow before financial items -2,9 -4,9
Change in long-term and short-term financing 15,1 4,7
Dividends paid 0,0 0,0
Return of subsidiary equity to minority -4,8
Cash flow from financing 10,3 4,7
Change in cash and cash equivalents 7,4 -0,1
Cash and cash equivalents
at the end of period 22,7 16,1CONSOLIDATED CASH FLOW STATEMENT, 1-12/06 1-12/05
JANUARY-DECEMBER MEUR MEURCash flow from operations 1,9 12,7
Cash flow from investments -20,1 -24,7
Cash flow before financial items -18,3 -12,0
Change in long-term and short-term financing 34,4 -4,8
Dividends paid -6,0
Minority interest in the subsidiary share issue 4,0
Return of subsidiary equity to minority -8,7
Cash flow from financing 25,7 -6,7
Change in cash and cash equivalents 6,6 -17,1
Cash and cash equivalents
at the end of period 22,7 16,1KEY FINANCIAL INDICATORS 12/06 12/05
Return on investment (ROI),% -15,9 -9,9
Return on equity (ROE),% -31,0 -19,9
Equity per share, EUR 2,24 3,84
Equity ratio, % 37,0 57,8
Gearing, % 74,5 23,5
Gross investments, MEUR 24,8 25,9
Average number of personnel 3 373 3 216CONTINGENT LIABILITIES 12/06 12/05
MEUR MEURMortgages given for
security for liabilities 11,8 23,7
Operating lease liabilities 0,1 0,1
Other liabilities 12,0 2,2
Total 23,9 26,0All figures are unaudited.
Helsinki, February 15, 2007
ASPOCOMP GROUP OYJ
Board of Directors
Maija-Liisa Friman
President and CEOFor further information, please
contact CEO Maija-Liisa Friman, tel.
+358 9 7597 0711.Distribution:
The Nordic Exchange
Major media
www.aspocomp.comSome statements in this stock
exchange release are forecasts and
actual results may differ materially
from those stated. Statements in this
stock exchange release relating to
matters that are not historical facts
are forecasts. All forecasts involve
known and unknown risks,
uncertainties and other factors,
which may cause the actual results,
performances or achievements of the
Aspocomp Group to be materially
different from any future results,
performances or achievements
expressed or implied by such
forecasts. Such factors include
general economic and business
conditions, fluctuations in currency
exchange rates, increases and changes
in PCB industry capacity and
competition, and the ability of the
company to implement its investment
programme and to continue to expand
its business outside the European
market.