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INTERIM REPORTFIRST QUARTER 2017
EMPOWERINGINNOVATION
Page1of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017
INTERIMREPORT1January–31March2017Atthebeginningof2017,HANZAcompletedamajoraccelerationprogramme,Frontrunner,wheretheGroup,overa20-monthperiod,consolidatedproductionfacilitiesandmanufacturingresourcesinspecificgeographicalareas,knownasmanufacturingclusters.
Thesalesvolumesthatwerephasedoutduringtheprogramme,aswellasitemsthataffectedresults,aredescribedinthesectionsImpactofFrontrunnerandNetSalesandResults.
FIRSTQUARTER(1January–31March2017)• NetsalesamountedtoSEK350.0m(338.6)
• EBITfromtheoperativebusinessareasamountedtoSEK9.2m(14.5).TheGroup’sEBITamountedtoSEK8.4m(12.5).EBITwaschargedwithSEK-4.2m(2.3)fortheFrontrunnerprogramme.
• NetprofitamountedtoSEK3.3m(5.4),equivalenttoSEK0.15pershare(0.26)
• CashflowfromoperatingactivitiesamountedtoSEK33.1m(5.7)
CommentbyCEOErikStenfors:“Itisobviousthatproductcompaniesareinneedofnewmanufacturingsolutions.Weareexperiencingagoodorganicgrowthandwesignedseveralimportantmanufacturingcontractsduringthequarter.Ourworkwithcashflowhasalsobeensuccessfulandweshowasignificantlyreduceddebt,despitefactorytransitionsandaddedvolumes.Inoneyearournetdebthasdecreasedbynearlyonethird,fromSEK251mtoSEK175m.”“TheactivitieswecompletedintheElectronicssegmentin2015begantopositivelyaffectearningsin2016.Today,wehaveanindustry-leadingmargininelectronicsof7.8%.SimilaractivitiesintheMechanicssegmentarenowundercompletion,whyweseeamarginincreasethereaswell.Overall,earningsimprovedduringthequarterbySEK9.4mcomparedwiththefourthquarterof2016.”“WefacedanunexpectedchallengewithoursheetmetalfactoryinVaasa,Finland,whichisbeingconvertedtoalogisticscentre.Inearly2017,wewereunabletosignanew,moresuitableleaseagreementandwewereforcedtoapplyforarestructuringofoursubsidiary.However,continuednegotiationswiththepropertyownerresultedinanagreement,andtherestructuringisexpectedtosoonbefinalised.ThedelayneverthelesscausedsomedifficultiesfortheMechanicssegmentduringthequarter.”
Page2of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017
FIRSTQUARTER2017HIGHLIGHTS• InJanuary,HANZAfiledtoreorganiseitslogisticscompanyinVaasa,Finland,afteranew,
moresuitableleasecouldnotbesigned.
• HANZA’sNominationCommitteepresenteditsproposalfortheAnnualGeneralMeetingon10May2017.MikaelSmedeby,FrancescoFranzéandHåkanHalénwerenominatedforre-electiontotheBoardofDirectorsandGeraldEngströmandHeleneRichmondwerenominatedasnewdirectors.GeraldEngströmisthefounderofSystemairABandbuiltitintooneoftheworld’sforemostventilationcompanies,withoperationsinaround50countries.HeleneRichmondhasextensivemanufacturingexperienceandcurrentlyservesasHeadofProductManagementatSKF.
• FärnaInvestAB,whichisownedbyGeraldEngström,inFebruaryconvertedaSEK15mloanto1,614,639shares,therebymakingGeraldEngströmoneofHANZA’slargestshareholders.
• HANZAsignedanagreementinFebruarytocreateacustomisedmanufacturingsolutiontosupplycompletesubassembliestoacustomer’sfinalassemblyplantinFinland.ComponentswillbemanufacturedatHANZA’sclusterinEstoniaandmoduleswillbeassembledinproximitytothecustomerinFinland.Manufacturingwillbegininsecondquarterof2017andisexpectedtoreachfullcapacitywithinoneyear.AnnualbusinessvolumeisestimatedatEUR5m.
• InMarch,HANZAsignedanagreementonamanufacturingsolutionforFlexenclosure,whichdevelopsInternetinfrastructureandintelligentpowermanagementsolutions.
SIGNIFICANTEVENTSAFTERTHEPERIOD• InMay,HANZAexpandeditsco-operationwiththedefenceandsecuritycompanySaabby
signinganagreementworthaboutSEK16mtoproducecomputerproductsfortheinternationalmarket.Deliveryisscheduledforthesummerof2017andproductionwilltakeplaceatHANZA’smanufacturingclusterinSweden.
• AleasewassignedwiththepropertyownerinVaasa,Finland,thankstowhichthereorganisationofthelogisticscompanycanbeconsideredsuccessfulandshouldsoonbefinalised.
TheHANZAGroup’ssalestrend.ThefigureshowshowsalesincreasedthroughtheacquisitionofMetallisetin2015andhowthefactoriesthatwereshutandcustomerswhowerephasedoutduringtheFrontrunnerprogrammein2016havesuccessfullybeenreplacedwithnewvolumes.
900
1000
1100
1200
1300
1400
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Sales,rolling12monthsbyquarter,SEKm
Page3of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017
CEOCOMMENTHANZAisastrategicmanufacturingpartnerwhichisdevelopingmuchfasterthantraditionalcontractmanufacturers.Weareproudoftheadvisoryservicesandmanufacturingclustersweoffertoourbusinesspartners*).AstrongquarterItisobviousthatproductcompaniesareinneedofnewmanufacturingsolutions.Weareexperiencingagoodorganicgrowthandwesignedseveralimportantmanufacturingcontractsduringthefirstquarterof2017.OuractivitiesinourFrontrunnerprogramfortheElectronicssegmentin2015begantopositivelyaffecttheearningsin2016.Todaywehaveanindustry-leadingmargininelectronicsof7.8%.SimilaractivitiesintheMechanicssegmentarenowundercompletionandthemarginisincreasingthereaswell,althougheventsattheVaasafactoryunfortunatelydelayedtheworksomewhat(seebelow).Overall,earningsimprovedduringthequarterbySEK9.4mcomparedwiththefourthquarterof2016.Alsoworthmentioningaretheresultsofoureffortswithourworkingcapital.Wehavesignificantlyreducedourdebtdespitefactorytransitionsandnewcustomers.Inahalf-yearournetdebthasdecreasedbynearlyonethird,fromSEK251mtoSEK175m.
AnunusualquarterSometimestheunexpectedhappens.AspartoftheFrontrunnerprogrammewehaveconvertedourfactoryinVaasa,Finland,toalogisticscentreandthemanufacturingoperationsinVaasaarebeingtransferredtoourclusters.Inearly2017,wewereunabletosignanew,moresuitableleasewiththepropertyownerandwewereforcedtoapplyforarestructuringofoursubsidiaryinVaasatoavoidescalatedproblems.Continuednegotiationswaslaunchedandeventuallyledtoaleaseagreement.Asaresult,therestructuringisexpectedtobesuccessfullyfinalisedwithinshort,althoughthedelaycausedsomedifficultiesfortheMechanicssegmentduringthequarter.Youngcompany,long-termstrategyDuringourfirsttwobuild-upphases,wehavemethodicallycreatedmodernmanufacturingclustersanduniqueadvisoryservices.Wehavealsoaddedleadingcompaniesascustomersandbuiltupastrongcustomerportfolio.NowweareenteringtheGroup’sthirdphase,adevelopmentphasewherethefocusisonfurtherefficiencyimprovementsinourclustersandexpandingtonewmarkets,possiblythroughacquisitions.Butthecomingdevelopmentwillbeachievedbyaddingnewpartstoourexistingstructure.Inotherwords,HANZA’sfoundationissetandwillnotchange.*)Wedonotuseacustomerósuppliermodel.Instead,weseeHANZAasastrategicbusinesspartnertoproductcompanies.
Page4of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017
MARKETDEVELOPMENTHANZA’sprimarymarketistheNordicregion,butcustomersarealsolocatedintherestofEurope,AsiaandtheUS.ItsexposuretoabroadrangeofindustriesmeansthateconomicconditionsarenormallyreflectedinHANZA’svolumes.Economicgrowthisspreadingtomorecountries.Somepartsoftheworldhavecomefurtherthanothers,however.TheUShascomethefurthest,whileEuropestillhaspotentialforfurthergrowth.Atthesametime,therearerisks,mainlyassociatedwithpoliticaldevelopments,suchasBrexitandtheunpredictabilitysurroundingglobaltradecausedbytheUSpresident.InSweden,theeconomyremainsstrong,jobgrowthcontinuesandinflationisontherise.InMarch,thePurchasingManagersIndexforbothmanufacturingandservicesreachedthehighestlevelssince2011.TheFinnisheconomyhasbeguntogrowaftermanyyearsandcontinuestodevelopwell,althoughtherecoveryisslowerthanaveragefortheEurozone.HANZAdoesnotissuesalesforecasts,butisconfidentthatprospectsforfurtherorganicgrowthareverygood.IMPACTOFFRONTRUNNERThepurposeoftheFrontrunneraccelerationprogramhasbeentoquicklyputinplaceauniqueclusterstructureinselectedgeographicalareaswhereHANZAcanoffermultiplemanufacturingtechnologies.AspartofFrontrunner,someproductionvolumesandstandalonefactorieshavebeenmovedtotheseclusters.Involumeterms,manufacturinggeneratingtheequivalentofaboutSEK150minannualsaleshasbeenphasedoutintheprocess.Furthermore,inconsultationwiththecustomer,thebulkofthehigh-techproductionforthetelecomindustryhasbeenphasedoutaswell.In2014,thiswasoneoftheGroup’slargestvolumes,generatingannualsalesconsiderablyhigherthanSEK100m.Today,thisvolumerepresentsannualsalesoflessthanSEK10m.ThereasonforthistransitionistheGroup’sfocusonturnkeymanufacturingandMIGTMprojects,whichcreatehighervalueforcustomersandforHANZA.ExperienceshowsthatstaffreductionsinconnectionwithplantclosingscostoverSEK100,000perperson.In2016,around130employeeswereaffected.Layoffshavecontinuedin2017inVaasa,Finland.Costsforvacatedpremisesvarydependingonwhetherthepropertyisownedorleased.Thecostsfortheprogrammehavebeenrecognisedquarterlyinthecompany’sinterimreportsinNote4.Intermsofcashflow,aconsolidationofproductionunits(“Clusterformation”)normallyreducestied-upcapital.HANZAhasnotcreatedarestructuringreserveforFrontrunner,insteadexpensingthecoststhroughtheincomestatement(seeNetSalesandResultsbelow).OneofFrontrunner’sgoalsistooffsetnegativeone-offssuchasseveranceandcostsforvacatedpremiseswithastructureddivestmentoftheassetsthatarefreedupasoperationsareconcentratedinclusters.Thereorganisationalsoaffectedthefirstquarterof2017,andintotaltheitemshavereducedearningsbySEK4.2m.
Page5of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017
SEKm Jan-Mar2017
Jan-Mar2016
Jan-Dec2016
Netsales 350.0 338.6 1305.8Operativebusinessareas’EBIT 9.2 14.5 30.0Businessdevelopment -0.8 -2.0 -4.8EBIT 8.4 12.5 25.2Cashflowfromoperatingactivities 33.1 5.7 41.6Interest-bearingnetdebt 175.2 250.6 226.7Equity/assetsratio 37.3% 34.2% 35.6%
NETSALESANDRESULTSFirstquarterNetsalesincreasedby3.4%toSEK350.0m(338.6).Thepreviousyear’ssalesincludevolumesthathavesincebeendivestedaspartoftheFrontrunnerprogramme;seeabove.EBITDAforthequarteramountedtoSEK20.0m(24.4),correspondingtoanEBITDAmarginof5.7%(7.2).DepreciationamountedtoSEK11.6m(11.9)duringtheperiod.TheGroup’sEBITamountedtoSEK8.4m(12.5),correspondingtoanoperatingmarginof2.4%(3.7).Recognisedoperatingresultsincludeallcosts,evenforspecialprogrammessuchasFrontrunner.Asaresult,thereisnoseparaterestructuringreserveortheequivalent.However,HANZAreportsinthenotesthosecoststhatarenon-recurringinnature,suchasseverancepay,rentalcostsforvacatedpremisesandimpairmentofassetsthatwillnotbeutilisedinthefuture.Inthefirstquarter,thesetotalledaboutSEK-4.2m;seeNote4.Thisonlyincludescostsdirectlyassociatedwiththeprogramme.Therearealsoindirectcostssuchasqualityassurancework,modificationsofmaterialstructures,internaltrainingofnewemployeesetc.HANZA’sstrategywhenmergingfactoriesistofreeupandsellsurplusassetstocovertheadditionalcoststoestablishclusterstructures.Nosuchone-offswererealisedinthefirstquarter,however.Duringthefirstquarterof2017,theElectronicssegmentpostedEBITofSEK9.9m(7.3),correspondingtoanoperatingmarginof7.8%(6.3).SalesincreasedbySEK10.0mtoSEK126.8m(116.8).EBITfortheMechanicssegmentamountedtoSEK-0.7m(7.2),correspondingtoanoperatingmarginof-0.3%(3.3%).AspartoftheFrontrunnerprogramme,electronicsplantswererestructuredin2015andmechanicsplantsin2016.AsopposedtotheElectronicssegment,theMechanicssegmentisstillhamperedbyone-offs.Directone-offcostswithintheMechanicssegmentamountedtoSEK3.9m(1.4)inthefirstquarter;seealsoNote4.Therearealsoindirectcoststhatarenotexplicitlyrecognised;seeabove.
Page6of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017
CostsforspecialprojectstodeveloptheGroupnotassociatedwithHANZA’snormaloperatingactivities,suchasacquisitions,divestments,listingcosts,thedevelopmentofservicesetc.,arerecognisedintheBusinessDevelopmentsegment.EBITfortheBusinessDevelopmentsegmentamountedtoSEK-0.8m(-2.0)inthefirstquarter.Thegrossmarginwas42.7%(45.1).OtherexternalcostsamountedtoSEK-46.5m(-50.1)andpersonnelcostsamountedtoSEK-85.4m(-83.4).NetfinancialitemsamountedtoSEK-3.7m(-6.3)inthequarter.ThisincludesanetinterestcostofSEK-3.1m(-4.9).Thedecreaseinnetinterestisduetolowernetdebtandlowerinterestratelevels.TheresultbeforetaxeswasSEK4.7m(6.2).NetprofitamountedtoSEK3.3m(5.4).
TheHANZAGroup’sEBIT,excludingdirectone-offs.ThefigureshowsoperatingEBIT,excludingdirectone-offs,whichareshownseparatelybelow.Thisisinadditiontoindirectone-offsthatcannotbequantified.
CASHFLOWANDINVESTMENTSCashflowfromoperatingactivitiesamountedtoSEK33.1m(5.7)inthefirstquarter.CashflowwaspositivelyaffectedinthefirstquarterbyadecreaseinworkingcapitalofSEK20.0m(-7.6).Theconsolidationofproductionunits(“clusterformation”)reducestied-upcapital.Inrecentyears,HANZAhasmadeextensiveinvestmentstodeveloptheGroup’sproductionfacilitiesandautomateprocessesbyinstallingnewmachinery,andtodayitisfullyinvested.Asaresult,investmentsareexpectedtobelowerthandepreciationmovingforward.Themergerofproductionunitsalsoleadstolowerinvestmentneeds. CashflowfrominvestingactivitiesamountedtoSEK3.3m(0.3)inthefirstquarterandconsistedofinvestmentsinproperty,plantandequipmentofSEK3.1mandthedivestmentofnon-currentassetsforSEK6.4m.LoansdecreasedbySEK18.5m(decreaseof32.7)duringthequarter.
-20
0
20
40
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
EBIT,rolling12monthsbyquarter,SEKm
Page7of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017
FINANCIALPOSITIONEquityamountedtoSEK286.0m(262.2)attheendoftheperiodandtheequity/assetsratiowas37.3%(34.2).Aconvertibleloanwasconvertedduringthequarter,whichincreasedequitybySEK14.1mandreducedinterest-bearingnetdebtcorrespondingly.TotalassetsamountedtoSEK766.3m(766.5).CashandcashequivalentsamountedtoSEK42.2m(21.8)attheendoftheperiod.Interest-bearingnetdebtamountedtoSEK175.2m(250.6)attheendoftheperiod.EMPLOYEESDuringthequarter,theaveragenumberofemployeesintheGroupwas1,329(1,351).Attheendoftheperiod,thenumberofemployeeswas1,407,comparedwith1,399atthebeginningoftheyear.PARENTCOMPANYTheParentCompany’snetsales,whichconsistsolelyofrevenuesfromGroupcompanies,amountedtoSEK1.8m(0.7).TheresultbeforetaxesduringthequarterwasSEK-1.5m(-0.6).NoinvestmentsweremadeintheParentCompany.THESHAREAtthebeginningoftheyear,HANZAhadaconvertibleloanwithanominalvalueofSEK15.0mfromFärnaInvestAB.ThisloanwasconvertedatthebeginningofMarchatapriceofSEK9.29,increasingthenumberofsharesby1,614,639to22,324,008attheendofthequarter.Thecompanyhasonlyoneclassofshares.ErikPenserBankABisthecompany’sCertifiedAdviserandalsoservesasliquidityprovider.TheshareistradedonNasdaqFirstNorthPremier.SharestradedinthePremiersegmentaresubjecttomorestringentdisclosureandreportingrequirementsthansharessubjecttoFirstNorth’snormalregulations.AlistingonthePremiersegmentalsorequiresthecompanytoprovidewithahigherleveloftransparency,preparingitforapossibletransfertothemainlistofNasdaq.ThesharepriceattheendoftheperiodwasSEK10.40(7.25).Since2016,thereisawarrantprogrammecomprising1,001,000warrantswiththerighttosubscribefor1shareforSEK12duringtheperiod1November2018to31December2018.Ofthesewarrants,721,000weresubscribedattheendoftheperiod.SIGNIFICANTRISKSANDUNCERTAINTIESTheriskfactorsofgreatestsignificancetoHANZAarefinancialrisksandchangesinmarketconditions.Forfurtherinformationaboutrisksanduncertainties,refertoNote3inthecompany’sannualreportfor2016.Nosignificantchangesintheriskshavearisensincetheannualreportfor2016waspublished.
Page8of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017
RELATED-PARTYTRANSACTIONSDuringthequarter,therewerenotransactionsbetweentheHANZAGroupandrelatedpartiesthatmateriallyaffectedtheGroup’sfinancialpositionandresultsduringtheyear.Theinterimreportprovidesatrueandfairoverviewoftheoperations,financialpositionandresultsoftheParentCompanyandtheGroupanddescribesthematerialrisksanduncertaintiesfacedbytheParentCompanyandthecompaniesintheGroup.Stocksund,10May2017
OnbehalfoftheBoardofDirectors ErikStenfors,CEOThisreporthasnotbeenreviewedbythecompany’sauditors.
Page9of21 HANZA|InterimreportJanuary-March2017HANZA|InterimreportJanuary-March2017
FINANCIALSTATEMENTSCONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOMEAmountsinSEKm Note Jan-Mar Jan-Mar Jan-Dec 2017 2016 2016
Netsales 4 350.0 338.6 1305.8
Changeininventoriesduetoproduction,finishedgoodsandworkinprogress
4.8 -1.6 4.3
Rawmaterialandsupplies
-205.4 -184.4 -722.6Otherexternalcosts
-46.5 -50.1 -196.2
Personnelcosts
-85.4 -83.4 -332.8Depreciation
-11.6 -11.9 -47.5
Otheroperatingincome 5 3.9 5.7 20.7Otheroperatingcosts 5 -1.4 -0.4 -6.5EBIT 4 8.4 12.5 25.2
Resultfromfinancialitems
Financialincome
0.3 0.0 0.3
Financialcosts -4.0 -6.3 -22.0Netfinancialitems 6 -3.7 -6.3 -21.7 Resultbeforetaxes
4.7 6.2 3.5
Incometaxes
-1.4 -0.8 -1.6Netprofit/loss
3.3 5.4 1.9
Othercomprehensiveincome
Itemsthatcanlaterbereversedtoprofitorloss Translationdifferences -0.1 2.5 11.4Othercomprehensiveincomefortheperiod -0.1 2.5 11.4Totalcomprehensiveincomefortheperiod
3.2 7.9 13.3
Netprofit/lossandtotalcomprehensiveincomearerelatedinitsentiretytotheParentCompany’sshareholders
Resultpersharebeforedilution
0.15 0.26 0.09Resultpershareafterdilution
0.15 0.26 0.09
Weightedaveragenumberofsharesbeforedilution
21,265,522 20,642,179 20,651,884
Adjustmentforcalculationofresultpershareafterdilution: Convertibles
1,058,486 359,167 1,538,917
Weightedaveragenumberofsharesafterdilution
22,324,008 21,001,346 22,190,801
Page10of21 HANZA|InterimreportJanuary-March2017
CONSOLIDATEDBALANCESHEET
AmountsinSEKm Note31Mar2017
31Mar2016
31Dec2016
ASSETS
Non-currentassets
Intangibleassets
Goodwill
145.0 142.3 145.1Otherintangibleassets 0.5 0.3 0.5Intangibleassets
145.5 142.6 145.6
Tangiblenon-currentassets
229.5 257.4 243.5
Financialnon-currentassets
Otherlong-termsecuritiesholdings
0.3 0.4 0.3
Deferredtaxassets 16.1 16.8 17.2Financialnon-currentassets
16.4 17.2 17.5
Totalnon-currentassets
391.4 417.2 406.6 Currentassets
Inventory
256.3 238.2 243.5Accountsreceivable
52.6 62.6 57.2
Otherreceivables
14.1 16.5 14.6Prepaidcostsandaccruedincome
9.7 10.2 9.6
Cashandcashequivalents 42.2 21.8 24.1Totalcurrentassets
374.9 349.3 349.0
TOTALASSETS
766.3 766.5 755.6
Page11of21 HANZA|InterimreportJanuary-March2017
CONSOLIDATEDBALANCESHEET,cont.
AmountsinSEKm Note31Mar2017
31Mar2016
31Dec2016
EQUITY
EquityattributabletoParentCompany’s
286.0 262.2 268.8shareholders
LIABILITIES
Long-termliabilities
Liabilitiestocreditinstitutions 3 88.5 110.5 69.1Otherlong-terminterest-bearingliabilities
- 2.7 -
Convertibleloan
- 13.0 -Long-termnon-interest-bearingliabilities 7.6 6.8 7.1Totallong-termliabilities
96.1 133.0 76.2
Currentliabilities
Bankoverdraft 3 61.5 60.5 74.5
Liabilitiestocreditinstitutions 3 60.7 69.4 86.4Convertibleloan
- 4.5 13.9
Otherinterest-bearingliabilities
6.7 11.8 6.9Accountspayable
179.1 144.6 155.2
Otherliabilities
29.0 25.0 25.1Accruedcostsanddeferredincome 47.2 55.5 48.6Totalcurrentliabilities
384.2 371.3 410.6
TOTALEQUITYANDLIABILITIES
766.3 766.5 755.6
Equitypershareattheendoftheperiod,SEK
12.81 12.70 12.98
Numberofsharesattheendoftheperiod
22,324,008 20,642,179 20,709,369
Page12of21 HANZA|InterimreportJanuary-March2017
CONSOLIDATEDSTATEMENTOFCHANGESINEQUITYAmountsinSEKm
Sharecapital
Othercontributions
received Reserves
Profitbroughtforward
includingprofitfortheperiod
Totalequity
Openingbalanceasof1January2016 2.0 294.8 -3.3 -39.4 254.1Profitaftertax - - - 1.9 1.9Othercomprehensiveincome
Translationdifferences - - 11.4 - 11.4Totalcomprehensiveincome 11.4 1.9 13.3Employeeoptions - 0.9 - - 0.9Newshareissue 0.1 0.6 - - 0.7Issuecosts - -0.2 - - -0.2Totalcontributionfromandvaluetransferstoshareholdersrecogniseddirectlyinequity 0.1
1.3 - - 1.4
Closingbalanceasof31December2016 2.1 296.1 8.1 -37.5 268.8
Openingbalanceasof1January2017 2.1 296.1 8.1 -37.5 268.8Profitaftertax - - - 3.3 3.3Othercomprehensiveincome
Translationdifferences - - -0.1 - -0.1Totalcomprehensiveincome - - -1.1 3.3 3.2Issuecosts - -0.1 - - -0.1Conversionofconvertibleloan 0.1 14.0 - - 14.1Totalcontributionfromandvaluetransferstoshareholdersrecogniseddirectlyinequity 0.1 13.9 - - 14.0Closingbalanceasof31March2017 2.2 310.0 8.0 -34.2 286.0
Page13of21 HANZA|InterimreportJanuary-March2017
CONSOLIDATEDCONDENSEDSTATEMENTOFCASHFLOWSAmountsinSEKm Jan-Mar Jan-Mar Jan-Dec 2017 2016 2016Cashflowfromoperatingactivities
Profit/lossafterfinancialitems 4.7 6.2 3.5Depreciation 11.6 11.9 47.5Othernon-cashitems -1.6 -2.9 -7.4Incometaxespaid -1.6 -1.9 -4.6Cashflowfromoperatingactivitiesbeforechangesinworkingcapital 13.1 13.3 39.0
Totalchangeinworkingcapital 20.0 -7.6 2.6Cashflowfromoperatingactivities 33.1 5.7 41.6
Cashflowfrominvestingactivities Investmentsinnon-currentassets -3.1 -4.8 -28.2Saleoftangiblenon-currentassets 6.4 5.1 28.5Cashflowfrominvestingactivities 3.3 0.3 0.3
Cashflowfromfinancingactivities Newshareissue - - -0.2Changeinloans -18.5 -32.7 -67.8Cashflowfromfinancingactivities -18.5 -32.7 -68.0
Decrease/increaseincashandcashequivalents 17.9 -26.7 -26.1Cashandcashequivalentsontheopeningdate 24.1 48.8 48.8Exchangeratedifferencesincashandcashequivalents 0.2 -0.3 1.4Cashandcashequivalentsattheendoftheperiod 42.2 21.8 24.1
Page14of21 HANZA|InterimreportJanuary-March2017
CONDENSEDINCOMESTATEMENT,PARENTCOMPANYAmountsinSEKm Jan-Mar Jan-Mar Jan-Dec 2017 2016 2016
Operatingrevenue 1.9 0.7 9.2
Operatingcosts -3.1 -2.4 -12.1 EBIT -1.2 -1.7 -2.9
Profit/lossfromfinancialitems
Profit/lossfromparticipationsinGroupcompanies - 1.8 2.1Otherinterestincomeandsimilarprofit/lossitems 0.3 0.4 1.2Interestcostsandsimilarprofit/lossitems -0.6 -1.1 -4.2Totalprofit/lossfromfinancialitems -0.3 1.1 -0.9
Profit/lossbeforetax -1.5 -0.6 -3.8
Taxonnetprofit/lossfortheperiod - - 1.3 Netprofit/loss -1.5 -0.6 -2.5
Otherinterestincomeandsimilarprofit/lossitemsincludeinterestincomefromGroupcompaniesofSEK0.3m(0.4).
SincetherearenoitemsintheParentCompanyrecognisedincomprehensiveincome,totalcomprehensiveincomecorrespondstoprofit/lossfortheperiod.
Page15of21 HANZA|InterimreportJanuary-March2017
CONDENSEDBALANCESHEET,PARENTCOMPANY
AmountsinSEKm Note31Mar2017
31Mar2016
31Dec2016
ASSETS
Non-currentassets
Financialnon-currentassets
253.9 256.4 257.2 Totalnon-currentassets
253.9 256.4 257.2
Currentassets
Currentreceivables
0.4 0.4 0.4
Cashandcashequivalents 0.0 0.8 0.0Totalcurrentassets
0.4 1.2 0.4
TOTALASSETS
254.3 257.6 257.6
EQUITYANDLIABILITIES
Equity
224.7 213.2 212.1
Provisions
- 2.6 0.1
Long-termliabilities
13.4 15.8 15.0
Currentliabilities
16.2 26.0 30.4 TOTALEQUITYANDLIABILITIES
254.3 257.6 257.6
Page16of21 HANZA|InterimreportJanuary-March2017
NOTESNote1 GeneralinformationAllamountsarestatedinSEKmillions(SEKm)unlessotherwiseindicated.Figuresinparenthesespertaintothecorrespondingyear-earlierperiod.Thequarterlyinformationonpages5-8isanintegralpartofthisfinancialreport.Note2 BasisforpreparationofthereportandaccountingpoliciesHANZAHoldingAB(publ)appliestheInternationalFinancialReportingStandards(IFRS)endorsedbytheEU.ThisinterimreporthasbeenpreparedincompliancewithIAS34InterimReporting.TheinterimreportfortheParentCompanyhasbeenpreparedinaccordancewithChapter9oftheSwedishAnnualAccountsActandRFR2Accountingforlegalentities.Theaccountingpoliciescomplywiththepoliciesappliedintheprecedingfinancialyear.Formoreinformation,seeNote2inthecompany’sannualreportfor2016.Theinterimreportshouldbereadtogetherwiththisannualreport.Note3 Financialinstruments–FairvalueoffinancialliabilitiesatamortisedcostTheGroup’sborrowingcomprisesalargenumberofcontractsenteredintoatvarioustimesandsubjecttovariousterms.Mostoftheloanscarryfloatinginterestrates.Onthisbasis,therecognisedamountsmaybeconsideredfairapproximationsoffairvalue.Thefairvalueofshort-termborrowingcorrespondstoitscarryingamount,sincediscountingeffectsareinsignificant.Note4 SegmentinformationRevenuesInter-segmentsalesaremadeoncommercialterms.
Jan-Mar2017 Jan-Mar2016
Segmentrevenue
Lesssalesbetweensegments
Revenuesfrom
externalcustomers
Segmentrevenue
Lesssalesbetweensegments
Revenuesfrom
externalcustomers
Mechanics 224.5 -1.7 222.8
226.8 -5.4 221.4Electronics 136.0 -9.2 126.8
126.6 -9.8 116.8
BusinessDevelopment 0.4 - 0.4 0.4 - 0.4Total 360.9 -10.9 350.0 353.8 -15.2 338.6
Page17of21 HANZA|InterimreportJanuary-March2017
Note4 Segmentinformation,continuedEBITisreconciledasincomebeforetaxasfollows: Jan-Mar Jan-Mar Jan-Dec 2017 2016 2016EBIT Mechanics -0.7 7.2 6.0Electronics 9.9 7.3 24.0BusinessDevelopment -0.8 -2.0 -4.8Total 8.4 12.5 25.2Netfinancialitems -3.7 -6.3 -21.7Resultbeforetaxes 4.7 6.2 3.5 One-offs Revaluationofsupplementalpurchaseprice - - 1.7TransactioncostsMetalliset - 0.4 0.4Restructuring -4.2 -2.1 -17.7ReserverentalcostsEstonia - -3.7 -Capitalgainonproperty - 4.4 6.6Total -4.2 -1.0 -9.0EBITpersegmentexcludingone-offsMechanics 3.2 8.6 15.7Electronics 9.9 7.3 24.0Total 13.1 15.9 39.7BusinessDevelopment -0.5 -2.4 -5.5Total 12.6 13.5 34.2One-offs -4.2 -1.0 -9.0EBIT 8.4 12.5 25.2
Page18of21 HANZA|InterimreportJanuary-March2017
Note5 Otheroperatingincomeandoperatingcosts
Jan-Mar Jan-Mar Jan-DecOtheroperatingincome 2017 2016 2016Resultfromsaleofnon-currentassets 2.6 4.4 11.3Revaluationofsupplementalproceeds - - 1.7Insurancecompensation - - 0.7Exchangerategains 1.0 0.2 3.2Otheritems 0.3 1.1 3.8Total 3.9 5.7 20.7 Otheroperatingcosts Resultfromsaleofnon-currentassets -0.4 - -0.5Exchangeratelosses -0.9 -0.2 -4.9Otheritems -0.1 -0.2 -1.1Totalotheroperatingincome -1.4 -0.4 -6.5Resultfromsaleofnon-currentassetsin2016referstogainsonthesaleofpropertiesinTörebodaandRihimäki,Finland,aswellasequipmentinSweden.
Note6 Financialincomeandcosts–Netfinancialitems
Jan-Mar Jan-Mar Jan-Dec
Financialincome 2017 2016 2016Interestincome 0.0 0.0 0.0Netexchangerategainsandlosses 0.3 - -Otherfinancialincome - - 0.3Totalfinancialincome 0.3 0.0 0.3
Financialcosts Interestcosts -3.1 -4.9 -15.0Netexchangerategainsandlosses - -0.5 -3.4Otherfinancialcosts -0.9 -0.9 -3.6Totalfinancialcosts -4.0 -6.3 -22.0
Netfinancialitems -3.7 -6.3 -21.7
Page19of21 HANZA|InterimreportJanuary-March2017
KEYFINANCIALRATIOS
Jan-Mar Jan-Mar Jan-Dec
2017 2016 2016Netsales,SEKm 350.0 338.6 1,305.8EBITDAmargin,% 5.7% 7.2% 5.6%Operatingmargin,% 2.4% 3.7% 1.9%Operativebusinessareas’EBIT,SEKm 9.2 14.5 30.0OperativeEBITmargin,% 2.6% 4.3% 2.3%Operatingcapital,SEKm 461.2 512.8 495.5Returnonoperatingcapital,% 1.9% 2.9% 6.0%Capitalturnoverrateonoperatingcapital,times 0.7 0.7 2.6Interest-bearingnetdebt,SEKm 175.2 250.6 226.7Netdebt/equityratio 0.6 1.0 0.8Equity/assetsratio,% 37.3% 34.2% 35.6%Averageno.ofemployees 1,329 1,351 1,346DATESFORFORTHCOMINGFINANCIALINFORMATION• InterimreportfortheperiodJanuary-June2017:28August2017• InterimreportfortheperiodJanuary-September2017:23October2017
Forfurtherinformation,pleasecontact:ErikStenfors,CEOTel:+46709508070,e-mail:erik.stenfors@hanza.comLarsÅkerblom,CFOTel:+46707949878,e-mail:lars.akerblom@hanza.com
Page20of21 HANZA|InterimreportJanuary-March2017
DEFINITIONS
Unlessotherwisestatedinthisinterimreport,thedefinitionsrefertotheGroup.Figuresinparenthesespertaintotheoutcomeforthecorrespondingperiodin2016.
Businessdevelopmentcostsincludenon-recurringcostsfordevelopingthebusinessmodelandtheorganisation,suchaslistingcosts,coststotransitiontoIFRS,theeliminationofunprofitablefactoriesuponacquisition,andacquisitioncostsintheformofduediligence
Capitalturnoveronaverageoperatingcapitalisnetsalesdividedbyaverageoperatingcapital
EBIT(Earningsbeforeinterestandtaxes)isprofit/lossbeforeinterestandtaxes
EBITDA(Earningsbeforeinterest,taxes,depreciationandamortisation)isprofit/lossbeforeinterest,taxesanddepreciationandamortisationoftangibleandintangibleitems
EBITDAmarginisEBITDAdividedbynetsales
Equity/assetsratioisequitydividedbytotalassets
Interest-bearingnetdebtisinterest-bearingliabilitieslesscash,similarassetsandshort-terminvestments
Netdebt/equityratioisinterest-bearingnetdebtdividedbyequity
Operatingmargin(EBITmargin)isoperatingprofitdividedbynetsales
Operatingcapitalistotalassetslesscash,financialassetsandnon-interest-bearingliabilities
Operativebusinessareas’EBIT(operativeEBIT)isoperatingprofit/lossbeforebusinessdevelopmentcosts
OperativeEBITmarginisoperativebusinessareas’EBITdividedbynetsales
ReturnonoperatingcapitalisoperatingEBITdividedbyaverageoperatingcapital
Page21of21 HANZA|InterimreportJanuary-March2017
ABOUT HANZA
HANZA is a fast-growing industrial business partner in
manufacturing. The company creates increased growth and profitability for customers by providing complete manufacturing
solutions involving mechanics, electronics, cabling and final assembly. HANZA was founded in 2008 and has rapidly grown into a billion kronor company. The company has operations in Sweden, Finland, Estonia, Poland, Czech Republic and China. HANZA's customers include leading companies such as ABB,
Atlas Copco, Ericsson, Saab Defence and Siemens.
HANZA Holding AB (publ) Brovägen 5, SE-182 76 Stocksund, Sweden
Telephone: +46 8 624 62 00
Corporate Registration Number 556748-8399 www.hanza.com
Erik Penser Bank AB is HANZA’s Certified Advisor on First North.
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