Ponsse Plc, Stock Exchange Release, 25 October 2022 at 9:00 a.m. EEST
PONSSE'S INTERIM REPORT FOR 1 JANUARY - 30 SEPTEMBER 2022
July-September (continuing operations):
- Net sales amounted to EUR 178.5 (140.2) million
- Operating profit totalled EUR 13.0 (14.1) million, equalling 7.3 (10.0) per cent of net sales
January-September (continuing operations):
- Net sales amounted to EUR 530.5 (435.1) million
- Operating profit totalled EUR 34.9 (40.9) million, equalling 6.6 (9.4) per cent of net sales
- Net result was EUR 24.2 (26.9) million
- Earnings per share were EUR 0.86 (0.96)
- Order books stood at EUR 365.5 (272.5) million at the end of period under review
- Cash flow from business operations was EUR -50.8 (50.1) million
- Equity ratio was 56.7 (61.8) per cent at the end of period under review
- The company's euro-denominated operating profit in 2022 is expected to be on a par with the comparable operating profit of its continuing operations in 2021 (EUR 50.0 million). The company's relative profitability is expected to decrease significantly, however, due to divesting its Russian business, difficulties in the availability of parts and components, and heavy inflation.
PRESIDENT AND CEO JUHO NUMMELA:
During the period under review, demand for PONSSE forest machines and services remained healthy for the continuing operations. Our customers' stable rate of employment had a positive impact on the demand for new machines and aftersales services. Our order intake was approximately EUR 187 million. Our order book at the end of the period under review stood at EUR 365.5 (272.5) million for the continuing operations.
The net sales were EUR 178.5 (140.2) million in the past quarter. Towards the end of the period under review, we were able to deliver machines to our customers at a good rate while improving our net sales, thanks to the excellent development of aftersales services. Epec Oy, our technology company and one of our business areas, also experienced strong growth. In general, our customers' rate of employment was excellent across our markets, supported by a good market situation in the pulp industry and the absence of Russian timber and sawn timber in the European market.
The corporate acquisition of our Russian subsidiary OOO Ponsse is awaiting approval by Russian authorities, and we are aiming to conclude the sale as soon as possible.
The discontinuation of business in Russia, heavy inflation, and the notable decline in the availability of parts and components continue to have a material effect on Ponsse. We continue to adapt to this difficult business environment. We concluded our change negotiations, started on 7 June, during the period under review. The problems with the availability of parts and components continued during the period under review, impacting both the company's profitability and cash flow. The company's production and aftersales services continue to suffer due to limited availability. Regardless, our production has continued without interruption, and we are constantly working to stay on schedule.
Operating profit was 7.3 (10.0) per cent of net sales. Higher new machine delivery rates improved our situation towards the end of the past quarter, in addition to the excellent result of our aftersales services. Our profitability was diminished by our business costs rising faster than our net sales. We are actively prioritising our operations and have a clear target for savings. We are looking for the best means to improve profitability with our personnel through productivity and managing business and product costs.
Our cash flow diminished to EUR -50.8 (50.1) million. We were able to turn our cash flow in a positive direction at the end of the past quarter. Capital is temporarily tied up in machines lacking parts and raw material stock stuck in storage. Our stock of trade-in machines increased as well.
During the period under review, Ponsse launched major product and service solutions, which were presented at forest machinery fairs around the world. In addition to conventional harvesting technology, we launched completely new technology with our subsidiary Epec: the electrically driven PONSSE EV1 forest machine concept. The interest of developing forestry towards Ponsse's and Epec's new products has been highly encouraging. We continue to target pioneering product technology with our investments.
NET SALES
Consolidated net sales for the period under review amounted to EUR 530.5 (435.1) million, which is 21.9 per cent more than in the comparison period. International business operations accounted for 79.5 (76.0) per cent of net sales.
Net sales were regionally distributed as follows: Northern Europe 37.7 (40.3) per cent, Central and Southern Europe 22.0 (23.1) per cent, North and South America 36.1 (31.8) per cent and other countries 4.2 (4.8) per cent.
1-9/22 1-9/21
Net sales from continuing operations 530,516 435,061
Net sales from discontinued operations 28,269 88,368
Net sales total 558,785 523,430
PROFIT PERFORMANCE
The operating profit amounted to EUR 34.9 (40.9) million. The operating profit equalled 6.6 (9.4) per cent of net sales for the period under review.
1-9/22 1-9/21
Operating profit from continuing operations 34,888 40,886
Operating profit from discontinued operations 3,340 15,387
Operating profit total 38,228 56,273
Consolidated return on capital employed (ROCE) stood at 12.5 (21.1) per cent.
Staff costs for the period totalled EUR 79.1 (62.7) million. Other operating expenses stood at EUR 55.7 (37.0) million. The net total of financial income and expenses amounted to EUR -2.2 (-1.7) million. Exchange rate gains and losses due to currency rate fluctuations and interest swap appreciation were recognised under financial items, the former having a net impact of EUR -3.3 (-1.0) million and the latter bringing in EUR 2.8 million over the period under review. The parent company's receivables from subsidiaries stood at EUR 102.7 (59.5) million net.
Result for the period under review totalled EUR 24.2 (26.9) million. Diluted and undiluted earnings per share (EPS) came to EUR 0.86 (0.96).
STATEMENT OF FINANCIAL POSITION AND FINANCING ACTIVITIES
At the end of the period under review, the total consolidated statements of financial position amounted to EUR 578.5 (479.4) million. Inventories stood at EUR 240.0 (172.3) million. Trade receivables totalled EUR 60.1 (49.3) million, while cash and cash equivalents stood at EUR 50.8 (75.5) million. Group shareholders' equity stood at EUR 320.6 (280.9) million and parent company shareholders' equity (FAS) at EUR 245.4 (226.1) million. The amount of interest-bearing liabilities was EUR 92.2 (54.2) million. The company has ensured its liquidity by credit facility limits and commercial paper programs, of which 21 per cent are used at the end of the period under review. Group's loans from financial institutions are non-collaretal bank loans without financial covenants. Consolidated net liabilities totalled EUR 40.8 (-21.3) million, and the debt-equity ratio (net gearing) was 12.7 (-7.6) per cent. The equity ratio stood at 56.7 (61.8) per cent at the end of the period under review.
Cash flow from operating activities amounted to EUR -50.8 (50.1) million. Cash flow from investment activities came to EUR -33.9 (-18.0) million.
IMPACTS OF THE WAR IN UKRAINE
Ponsse condemns the Russian military attack on Ukraine.
Our operating environment has changed drastically and it is affecting Ponsse's operations. Russia's invasion of Ukraine has forced the European Union and United States to respond and impose rigid sanctions against Russia. In compliance with export sanctions and the company's policy, Ponsse suspended all sales and export operations to Russia and Belarus effective 2 March 2022. At the same time, the operations of the local Russian subsidiary OOO Ponsse were discontinued.
In its release issued on 28 June 2022, Ponsse announced that it has signed a deed of sale regarding the sale of all shares in OOO Ponsse to the Russian company OOO Bison. The company has previously announced that it will complete the sale of its Russian subsidiary by the end of the third quarter of this financial period. While the process to complete the transaction is continuing, it has not yet been approved by the Russian authorities. The delay is caused by a regulation entered into force in Russia on 8 September 2022, relating to the approval of sales of companies owned by foreign parties. Ponsse aims to complete the sale as soon as possible, depending on the approval process of the Russian authorities.
The war in Ukraine is hampering to a great extent the operation of the manufacturing networks. Russia, Belarus and Ukraine have played a significant role in the supply chains of the European steel industry, while Russia has played a critical role as an energy supplier to Europe. As a result of the war, the availability of raw materials used in steel production has declined significantly and rising energy prices have pushed up the costs of steel processing to the extreme. In addition, Ukraine has supplied, inter alia, gases used in the semiconductor manufacturing process, which has already been reflected in the shortage of semiconductors. The delivery capacity of the manufacturing networks has decreased and inflation has significantly risen as a result of the crisis.
In the challenging situation, Ponsse's strong financial position is important. The company's financial position has remained strong due to good liquidity and binding credit limit facilities agreed with financial institutions. In terms of financing, Ponsse has carried out all measures necessary to ensure business continuity and financial situation is regularly evaluated.
In order to strengthen cybersecurity, Ponsse has clarified software update policy and user manual.
IMPACT OF THE COVID-19 PANDEMIC
The covid-19 pandemic has caused changes in the company's operating environment and operating practices. The company has avoided large-scale infections and has not had to interrupt operations at any point. The company has complied with all recommendations of the health authorities and the premise for decision-making has been the health and safety of the customers and Ponsse's employees.
The covid-19 pandemic continues to affect our operating environment, particularly through our supplier network, and may therefore disrupt the availability of the material at the factory. In addition, the pandemic can affect the product deliveries due to congestion at logistics hubs or bottlenecks at ports, for example.
ORDER INTAKE AND ORDER BOOKS
Order intake for the period totalled EUR 583.4 (557.4) million, while period-end order books were valued at EUR 365.5 (272.5) million.
DISTRIBUTION NETWORK AND GROUP STRUCTURE
The subsidiaries included in the Ponsse Group are Ponsse AB, Sweden; Ponsse AS, Norway; Ponssé S.A.S., France; Ponsse UK Ltd, the United Kingdom; Ponsse Machines Ireland Ltd, Ireland, Ponsse North America, Inc., the United States; Ponsse Latin America Ltda, Brazil; Ponsse Uruguay S.A., Uruguay; OOO Ponsse, Russia; Ponsse Asia-Pacific Ltd, Hong Kong; Ponsse China Ltd, China; Ponsse Chile SpA, Chile; Ponsse Czech s.r.o., Czech Republic and Epec Oy, Finland.
The Group includes also the OOO Ponsse wholly owned property company Ponsse Centre in Russia, EAI PON1V Holding Oy in Finland and Sunit Oy in Finland, which is Ponsse Plc's associate with a holding of 34 per cent.
Ponsse has completed on 17 March 2022 the acquisition of the asset items related to its business activities in Chile and on 1 April 2022 the share acquisition related to its business activities in the Czech Republic.
In its release issued on 28 June 2022, Ponsse announced that it has signed a deed of sale regarding the sale of all shares in OOO Ponsse to the Russian company OOO Bison. While the process to complete the transaction is continuing, it has not yet been approved by the Russian authorities.
R&D AND CAPITAL EXPENDITURE
Group's R&D expenses during the period under review totalled EUR 20.3 (16.7) million, of which EUR 8.2 (5.7) million was capitalised.
Investments during the period under review totalled EUR 28.8 (18.3) million. It consisted in addition to capitalised R&D expenses of investments in buildings and ordinary maintenance and replacement investments for machinery and equipment.
MANAGEMENT
The following persons were members of the Management Team: Juho Nummela, President and CEO, acting as the chairman; Petri Härkönen, Deputy CEO, CFO; Juha Inberg, Technology and R&D Director; Marko Mattila, Sales, Service and Marketing Director; Tapio Mertanen, Service Director; Paula Oksman, HR Director; Miika Soininen, Director of IT and Digital Services and Tommi Väänänen, Director of Delivery Chain Process. The company management has regular management liability insurance.
The international PONSSE service network is led by Marko Mattila, the Group's Sales, Service and Marketing Director, and Tapio Mertanen, Service Director. Managing directors of Ponsse's subsidiaries and Jussi Hentunen report to Marko Mattila, Ponsse Plc's sales and marketing director. Group area directors report to Jussi Hentunen, Director, Dealer Development.
The geographical distribution and the responsible persons are presented below.
Northern Europe:
Jani Liukkonen (Finland),
Carl-Henrik Hammar (Sweden, Denmark and Norway) and
Tarmo Saks (the Baltic countries).
Central and Southern Europe:
Tuomo Moilanen (Germany and Austria),
Clément Puybaret (France until 19 September 2022, Jean Sionneau starting 20 September 2022),
Janne Tarvainen (Spain and Portugal),
Gary Glendinning (United Kingdom and Ireland),
Antti Räsänen (Hungary, Italy, Romania, Slovenia, Croatia, Serbia and Bulgaria),
Tarmo Saks (Poland and Slovakia) and
Jakub Hacura (Czech Republic).
Russia and Asia:
Jaakko Laurila (Russia and Belarus until 15 September 2022, Mihail Menshikov starting 16 September 2022),
Janne Tarvainen (Australia and South Africa) and
Risto Kääriäinen (China and Japan).
North and South America:
Pekka Ruuskanen (the United States),
Eero Lukkarinen (Canada),
Fernando Campos (Brazil) and
Martin Toledo (Uruguay, Chile and Argentina).
PERSONNEL
The Group had an average staff of 2,024 (1,799) during the period and employed 2,014 (1,833) people at period-end.
SHARE PERFORMANCE
The company's registered share capital consists of 28,000,000 shares. The trading volume of Ponsse Plc shares for 1 January - 30 September 2022 totalled 1,062,476, accounting for 3.8 per cent of the total number of shares. Share turnover amounted to EUR 32.5 million, with the period's lowest and highest share prices amounting to EUR 22.80 and EUR 44.40, respectively.
At the end of the period, shares closed at EUR 24.70, and market capitalisation totalled EUR 691.6 million.
At the end of the period under review, the company held 10 227 treasury shares.
The company founded EAI PON1V Holding Oy on 5 July 2022 for the purpose of managing incentive schemes, buying and selling the related Ponsse Plc securities, and acting as a party to financial agreements.
ANNUAL GENERAL MEETING
A separate release was issued on 7 April 2022 regarding the authorizations given to the Board of Directors and other resolutions at the AGM.
GOVERNANCE
In its decision-making and administration, the company observes the Finnish Limited Liability Companies Act, other regulations governing publicly listed companies and the company's Articles of Association. The company's Board of Directors has adopted the Code of Governance that complies with the Finnish Corporate Governance Code approved by the Board of the Securities Market Association. The purpose of the code is to ensure that the company is professionally managed and that its business principles and practices are of a high ethical and professional standard.
The Code of Governance is available on Ponsse's website in the Investors section.
RISK MANAGEMENT
Risk management is based on the company's values, as well as strategic and financial objectives. Risk management aims to support the achievement of the objectives specified in the company's strategy, as well as to ensure the financial development of the company and the continuity of its business.
Furthermore, risk management aims to identify, assess and monitor business-related risks which may influence the achievement of the company's strategic and financial goals or the continuity of its business. Decisions on the necessary measures to anticipate risks and react to observed risks are made on the basis of this information.
Risk management is a part of regular daily business, and it is also included in the management system. Risk management is controlled by the risk management policy approved by the Board.
A risk is any event that may prevent the company from reaching its objectives or that threatens the continuity of business. On the other hand, a risk may also be a positive event, in which case the risk is treated as an opportunity. Each risk is assessed on the basis of its impact and probability. Methods of risk management include avoiding, mitigating and transferring risks. Risks can also be managed by controlling and minimising their impact.
SHORT-TERM RISK MANAGEMENT
Our major short-term risks are caused by Russia's invasion of Ukraine. The invasion has shaken the global economy and increased the price of energy and raw materials. In combination with the economic effects of the covid-19 pandemic, the situation has limited the availability of components and increased manufacturing costs. The delivery risks related to semiconductors have also increased due to tensions between China and Taiwan.
General delivery problems in our supply chain have made it more difficult to manage PONSSE forest machine production schedules, tied up more capital in the supply chain, and increased the risks related to working capital management. Sudden economic fluctuations and the continuing rise of inflation may pose further risks to the availability of parts, delay machine deliveries, and increase costs, weakening our profitability. The instability of the world economy and increasing financing costs may also reduce demand for forest machines.
The impacts of the war in Ukraine on Ponsse's operations are described in more detail in section "IMPACTS OF THE WAR IN UKRAINE".
The effects of the covid-19 pandemic are described in section "IMPACT OF THE COVID-19 PANDEMIC" of this release.
The uncertainty may also be increased by the volatility of developing countries' foreign exchange markets. The geopolitical situation will increase the uncertainty through financial market operations and sanctions. Changes taking place in the fiscal and customs legislation in countries to which Ponsse exports may hamper the company's export trade or its profitability.
The parent company monitors the changes in the Group's internal and external trade receivables and the associated risk of impairment.
The key objective of the company's financial risk management policy is to manage liquidity, interest and currency risks. The company ensures its liquidity through credit limit facilities agreed with a number of financial institutions. The effect of adverse changes in interest rates is minimised by utilising credit linked to different reference rates and by concluding interest rate swaps. The effects of currency rate fluctuations are partly mitigated through derivative contracts.
OUTLOOK FOR THE FUTURE
On 8 August 2022 Ponsse issued a new performance guidance for its continuing operations. The company's euro-denominated operating profit in 2022 is expected to be on a par with the comparable operating profit of its continuing operations in 2021 (EUR 50.0 million, 8.2 per cent of net sales). The company's relative profitability is expected to decrease significantly, however, due to divesting its Russian business, difficulties in the availability of parts and components, and heavy inflation.
The crisis in Ukraine is increasing the risks associated with the decrease in availability and rising costs of parts and components. In cooperation with the supplier network, sustainable solutions are being sought to manage the risk. Also, the covid-19 pandemic can cause significant challenges to supplier network and company's own operations. Ponsse is rigorously prioritizing its investments and the enhanced cost control will be continued.
EVENTS AFTER THE PERIOD
Ponsse Group has appointed on 7 October 2022 Tiina Kautonen as a new CHRO and a member of the Management Team starting from 1 January 2023. Tiina Kautonen will report to Ponsse Plc's President and CEO Juho Nummela, and she will be located in Vieremä.
PONSSE GROUP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000)
1-9/22 1-9/21 1-12/21
NET SALES 530,516 435,061 608,271
Increase 37,000 18,770 12,696
(+)/decrease (-) in
inventories of
finished goods and
work in progress
Other operating 2,342 1,859 2,924
income
Raw materials and -379,816 -299,984 -411,049
services
Expenditure on -79,130 -62,747 -87,655
employment-related
benefits
Depreciation and -20,348 -15,075 -20,140
amortisation
Other operating -55,677 -36,997 -55,050
expenses
OPERATING PROFIT 34,888 40,886 49,998
Share of results of 108 39 19
associated companies
Financial income and -2,237 -1,687 -1,911
expenses
RESULT BEFORE TAXES 32,759 39,239 48,107
Income taxes -8,589 -12,290 -12,936
NET RESULT FROM THE 24,171 26,948 35,171
CONTINUING
OPERATIONS
Net result from the 760 12,264 19,903
discontinued
operations
NET RESULT FOR THE 24,931 39,213 55,073
PERIOD
OTHER ITEMS INCLUDED
IN TOTAL
COMPREHENSIVE
RESULT:
Translation 15,384 3,426 3,915
differences related
to foreign units
TOTAL COMPREHENSIVE 40,315 42,639 58,989
RESULT FOR THE
PERIOD
Diluted and 0.86 0,96 1,26
undiluted earnings
per share from
continuing
operations
Diluted and 0.03 0.44 0.71
undiluted earnings
per share from
discontinued
operations
Diluted and 0.89 1.40 1.97
undiluted earnings
per share
7-9/22 7-9/21
NET SALES 178,472 140,181
Increase -1,147 -2,346
(+)/decrease (-) in
inventories of
finished goods and
work in progress
Other operating 946 764
income
Raw materials and -115,194 -89,055
services
Expenditure on -23,443 -17,853
employment-related
benefits
Depreciation and -6,946 -5,155
amortisation
Other operating -19,673 -12,465
expenses
OPERATING PROFIT 13,014 14,072
Share of results of -9 5
associated companies
Financial income and -613 -1,236
expenses
RESULT BEFORE TAXES 12,392 12,841
Income taxes -2,788 -3,152
NET RESULT FROM THE 9,604 9,689
CONTINUING
OPERATIONS
Net result from the 959 4,738
discontinued
operations
NET RESULT FOR THE 10,564 14,426
PERIOD
OTHER ITEMS INCLUDED
IN TOTAL
COMPREHENSIVE
RESULT:
Translation 1,752 402
differences related
to foreign units
TOTAL COMPREHENSIVE 12,316 14,828
RESULT FOR THE
PERIOD
Diluted and 0.34 0.35
undiluted earnings
per share from
continuing
operations
Diluted and 0.03 0.17
undiluted earnings
per share from
discontinued
operations
Diluted and 0.38 0.52
undiluted earnings
per share
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000)
ASSETS 30 Sep 22 30 Sep 21 31 Dec 21
NON-CURRENT ASSETS
Intangible assets 46,431 40,939 42,087
Goodwill 5,680 3,804 3,801
Property, plant and equipment 112,530 111,645 112,127
Financial assets 428 372 373
Investments in associated companies 842 805 785
Non-current receivables 244 780 173
Deferred tax assets 4,526 4,104 3,360
TOTAL NON-CURRENT ASSETS 170,681 162,449 162,706
CURRENT ASSETS
Inventories 239,998 172,257 167,414
Trade receivables 60,139 49,309 43,394
Income tax receivables 1,766 1,933 938
Other current receivables 21,097 17,989 17,270
Cash and cash equivalents 50,754 75,499 120,900
TOTAL CURRENT ASSETS 373,754 316,987 349,916
Assets held for sales 34,057
TOTAL ASSETS 578,492 479,436 512,622
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 7,000 7,000 7,000
Other reserves 3,460 3,460 3,460
Translation differences 23,731 7,857 8,347
Treasury shares -274 -2 -2
Retained earnings 286,640 262,583 278,462
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS 320,557 280,898 297,267
NON-CURRENT LIABILITIES
Interest-bearing liabilities 58,036 50,642 49,851
Deferred tax liabilities 857 807 967
Other non-current liabilities 82 90 87
TOTAL NON-CURRENT LIABILITIES 58,975 51,539 50,905
CURRENT LIABILITIES
Interest-bearing liabilities 34,173 3,579 4,945
Provisions 4,346 4,421 4,550
Tax liabilities for the period 6,969 2,950 901
Trade creditors and other current liabilities 145,428 136,049 154,054
TOTAL CURRENT LIABILITIES 190,916 146,999 164,450
Liabilities related to assets held for sales 8,045
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 578,492 479,436 512,622
CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000)
1-9/22 1-9/21 1-12/21
CASH FLOWS FROM OPERATING ACTIVITIES:
Net result for the period 24,931 39,213 55,073
Adjustments:
Financial income and expenses 4,660 1,639 1,836
Share of the result of associated companies -108 -39 -19
Depreciation and amortisation 21,563 18,376 25,251
Income taxes 8,746 15,461 18,131
Other adjustments -1,016 1,540 -1,016
Cash flow before changes in working capital 58,774 76,189 99,256
Change in working capital:
Change in trade receivables and other receivables -21,131 -18,086 -12,835
Change in inventories -73,566 -27,194 -22,371
Change in trade creditors and other liabilities -7,396 37,177 57,525
Change in provisions -204 -558 -429
Interest received 199 110 190
Interest paid -1,273 -808 -1,062
Other financial items 235 -1,426 279
Income taxes paid -6,478 -15,286 -18,126
NET CASH FLOWS FROM OPERATING ACTIVITIES (A) -50,840 50,118 102,429
CASH FLOWS USED IN INVESTING ACTIVITIES
Investments in tangible and intangible assets -28,804 -18,336 -24,856
Proceeds from sale of tangible and intangible assets 396 332 776
Acquisition of subsidiaries * -5,514 0 0
NET CASH FLOWS USED IN INVESTMENT ACTIVITIES (B) -33,922 -18,004 -24,080
CASH FLOWS FROM FINANCING ACTIVITIES
Withdrawal/Repayment of current loans 28,793 -60,636 -61,031
Withdrawal of non-current loans 7,000 0 0
Withdrawal/Repayment of finance lease liabilities -2,606 -2,248 -3,113
Dividends paid -16,800 -16,800 -16,800
NET CASH FLOWS FROM FINANCING ACTIVITIES (C) 16,388 -79,684 -80,943
Change in cash and cash equivalents (A+B+C) -68,374 -47,570 -2,594
Cash and cash equivalents on 1 Jan 120,900 123,611 123,611
Impact of exchange rate changes -1,120 -542 -116
Cash and cash equivalents on 30 Sep/31 Dec 51,406 75,499 120,900
*) Acquisition of subsidiaries Ponsse Chile SpA, Chile and Ponsse Czech s.r.o., Czech Republic decreased by cash and cash equivalents at the time of acquisition
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR 1,000)
A = Share capital
B = Share premium
and other reserves
C = Translation
differences
D = Treasury shares
E = Retained
earnings
F = Total
shareholders' equity
EQUITY OWNED
BY PARENT
COMPANY
SHAREHOLDERS
A B C D E F
SHAREHOLDERS' EQUITY 7,000 3,460 8,347 -2 278,462 297,267
1 JAN 2022
Translation 15,384 15,384
differences
Result for the 24,931 24,931
period
Total comprehensive 15,384 24,931 40,315
income for the
period
Dividend -16,800 -16,800
distribution
Share Plan 47 47
Acquisition of -272 -272
treasury shares *
SHAREHOLDERS' EQUITY 7,000 3,460 23,731 -274 286,640 320,557
30 SEP 2022
SHAREHOLDERS' 7,000 3,460 4,431 -2 240,149 255,038
EQUITY 1 JAN 2021
Translation 3,426 3,426
differences
Result for the 39,213 39,213
period
Total comprehensive 3,426 39,213 42,639
income for the
period
Dividend -16,800 -16,800
distribution
Share Plan 18 18
Direct entries to 3 3
retained earnings
SHAREHOLDERS' EQUITY 7,000 3,460 7,857 -2 262,583 280,898
30 SEP 2021
*) Treasury shares
procured for
incentive schemes;
further details are
included in the
financial statements
30 30 31
Sep Sep Dec
22 21 21
1. LEASING 1,143 731 775
COMMITMENTS (EUR
1,000)
2. CONTINGENT 30 30 31
LIABILITIES (EUR Sep Sep Dec
1,000) 22 21 21
Guarantees given on 0 20 20
behalf of others
Responsibility of 6,320 6,958 7,272
checking the VAT
deductions made on
real property
investments
Other commitments 179 56 112
TOTAL 6,499 7,034 7,404
3. PROVISIONS (EUR Guarantee
1,000) provision
1 January 2022 4,550
Provisions added 757
Provisions cancelled -961
30 September 2022 4,346
4. DISCONTINUED OPERATIONS
On 28 June 2022, Ponsse has signed a deed of sale regarding the sale of all shares in OOO Ponsse to the Russian company OOO Bison. While the process to complete the transaction is continuing, it has not yet been approved by the Russian authorities. Ponsse aims to complete the sale as soon as possible.
Ponsse has classified the sold functions as assets for sale and reported them as discontinued operations. Unless otherwise specified, the figures presented in this mid-year report refer to continuing operations. The balance sheet has not been adjusted for the comparison period. The cash flow statement has not been adjusted.
The reorganisation has no material impact on profit, and no significant impairment or sales profit due to the sale has been recorded in the income statement for the period under review. The cumulative RUB/EUR translation difference was EUR 2.2 million at the end of Q3/2022. The cumulative translation difference will be recognised as income on the income statement once the sale has been concluded. RUB/EUR average rate of 76.15307 and closing rate of 58.97000 is used in interim reporting.
PROFIT AND LOSS STATEMENT FROM DISCONTINUED OPERATIONS (EUR 1,000)
1-9/22 1-9/21 1-12/21
NET SALES 28,269 88,368 141,727
Increase -1,521 2,138 -195
(+)/decrease (
-) in
inventories of
finished goods
and work in
progress
Other 218 235 648
operating
income
Raw materials -16,111 -57,157 -88,301
and services
Expenditure on -3,652 -9,577 -15,180
employment
-related
benefits
Depreciation -1,215 -3,301 -5,111
and
amortisation
Other -2,649 -5,319 -8,566
operating
expenses
OPERATING 3,340 15,387 25,023
PROFIT
Financial -2,423 48 75
income and
expenses
RESULT BEFORE 917 15,435 25,098
TAXES
Income taxes -157 -3,171 -5,195
NET RESULT FOR 760 12,264 19,903
THE PERIOD
THE EFFECT OF DISCONTINUED OPERATIONS ON THE STATEMENT OF FINANCIAL POSITION (EUR 1,000)
30 Sep 22
ASSETS HELD FOR SALE
Intangible assets 30
Property, plant and equipment 11,325
Deferred tax assets 996
Inventories 10,978
Trade receivables 5,565
Income tax receivables 965
Other current receivables 3,545
Cash and cash equivalents 653
ASSETS HELD FOR SALE TOTAL 34,057
LIABILITIES RELATED TO ASSETS HELD FOR SALE
Interest-bearing liabilities 22
Deferred tax liabilities 32
Tax liabilities for the period 4
Trade creditors and other current liabilities 7,987
LIABILITIES RELATED TO ASSETS HELD FOR SALE TOTAL 8,045
STATEMENT OF CASH FLOWS FROM DISCONTINUED OPERATIONS (EUR 1,000)
1-9/22 1-9/21 1-12/21
Cash flows from operating activities -13,145 8,803 19,881
Cash flows used in investing activities -1,135 -1,113 -989
Cash flows from financing activities -16 -61 -72
Cash flows for the period under review -14,296 7,628 18,821
KEY FIGURES 30 Sep 22 30 Sep 21 31 Dec 21
AND RATIOS
R&D 20.3 16.7 23.8
expenditure,
MEUR
Capital 28.8 18.3 24.9
expenditure,
MEUR
as % of net 5.4 4.2 4.1
sales
Average 2,024 1,799 1,825
number of
employees
Order books, 365.5 272.5 312.6
MEUR
Equity ratio, 56.7 61.8 60.7
%
Diluted and 0.86 0.96 1.26
undiluted
earnings per
share (EUR),
continuing
operations
Diluted and 0.03 0.44 0.71
undiluted
earnings per
share (EUR),
discontinued
operations
Diluted and 0.89 1.40 1.97
undiluted
earnings per
share (EUR)
Equity per 11.45 10.03 10.62
share (EUR)
Order intake, 583.4 557.4 770.7
MEUR
FORMULAE FOR FINANCIAL INDICATORS
Return on capital employed, % (including discontinued operations):
Result before taxes + financial expenses
---------------------------------------------------------------------------------------------------------------------
Shareholder's equity + interest-bearing financial liabilities (average during the year) * 100
Average number of employees:
Average of the number of personnel at the end of each month from continuing operations. The calculation has been adjusted for part-time employees.
Net gearing, % (including discontinued operations):
Interest-bearing financial liabilities - cash and cash equivalents
-----------------------------------------------------------------------------------
Shareholders' equity * 100
Equity ratio, % (including discontinued operations):
Shareholders' equity + Non-controlling interests
------------------------------------------------------------------------
Balance sheet total - advance payments received * 100
Earnings per share, continuing operations:
Net result from continuing operations for the period - Non-controlling interests
-----------------------------------------------------------------------------------------------------------
Average number of shares during the accounting period, adjusted for share issues
Earnings per share, discontinued operations:
Net result from discontinued operations for the period - Non-controlling interests
-----------------------------------------------------------------------------------------------------------
Average number of shares during the accounting period, adjusted for share issues
Earnings per share (including discontinued operations):
Net result for the period - Non-controlling interests
-----------------------------------------------------------------------------------------------------------
Average number of shares during the accounting period, adjusted for share issues
Equity per share (including discontinued operations):
Shareholders' equity
---------------------------------------------------------------------------------------------
Number of shares on the balance sheet date, adjusted for share issues
Order intake:
Net sales from continuing operations for the period + Change in order books from continuing operations during the period
The stock exchange release for the interim report has been prepared observing the recognition and valuation principles of IFRS, and the requirements of IAS 34 have not been complied with. The same accounting principles were observed for the closing of the books as for the annual financial statements dated 31 December 2021.
The above figures have not been audited.
The above figures have been rounded and may therefore differ from those given in the official financial statements.
This communication includes future-oriented statements that are based on the assumptions currently made by the company's management and its current decisions and plans. Although the management believes that the future expectations are well founded, there is no certainty that these expectations will prove to be correct. This is why the results may significantly deviate from the assumptions included in the future-oriented statements as a result of, among other things, changes in the economy, markets, competitive conditions, legislation or currency exchange rates.
Vieremä, 25 October 2022
PONSSE PLC
Juho Nummela
President and CEO
FURTHER INFORMATION
Juho Nummela, President and CEO, tel. +358 400 495 690
Petri Härkönen, CFO, tel. +358 50 409 8362
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
www.ponsse.com
Ponsse Plc is a company specialising in the sales, manufacture, servicing and technology of cut-to-length method forest machines and is driven by genuine interest in its customers and their business. Ponsse develops and manufactures sustainable and innovative harvesting solutions based on customers' needs.
The company was established by forest machine entrepreneur Einari Vidgrén in 1970, and it has been a leader in timber harvesting solutions based on the cut-to-length method ever since. Ponsse is headquartered in Vieremä, Finland. The company's shares are quoted on the NASDAQ OMX Nordic List.