– Net sales amounted to EUR 163.4 (144.5) million.
– Operating result totalled EUR 16.8 (13.4) million, equalling 10.3 (9.3) per
cent of net sales.
– Profit before taxes was EUR 15.3 (-1.6) million.
– Cash flow from business operations was EUR 14.8 (-11.7) million.
– Earnings per share were EUR 0.31 (-0.11).
– Equity ratio was 60.4 (46.5) per cent.
– Order books stood at EUR 308.0 (209.2) million.
PRESIDENT AND CEO JUHO NUMMELA:
The forest machine market’s positive development continued strongly in the first
quarter. Demand was stimulated from the very start of the year by the forest
industry’s favourable outlook, and we received an increasing flow of orders
throughout the quarter. Ponsse achieved an excellent order flow to an amount of
EUR 299 million, increasing our order book to EUR 308 million. The full capacity
of our Vieremä factory was used to produce new PONSSE forest machines.
The global market situation for forest machines is good. The demand in large
markets has grown, reaching excellent levels in Russia and Finland in
particular. The steady employment of our customers has been evidenced by the
strong growth of our aftersales services. Meanwhile, there has been active
demand for trade-in machines, and the reduction in our trade-in machine stock
has improved cash flow from business operations. We performed well in the period
under review, with especially strong performance in cash flow. Spurred on by
growth, our profitability also improved.
Heavy demand has strained our supplier network. Heated demand for machine and
equipment manufacturing has affected our supplier network, resulting in
challenges in the availability of parts. There have also been problems in the
availability of semiconductor products, including processors. Considering the
circumstances, we have managed the challenges in availability successfully, and
the Vieremä factory has produced machines on schedule. Marked attempts to hike
the prices of parts and components have posed additional challenges with regard
to our supplier network in addition to availability. There has been significant
pressure for cost escalation, and we are seeking sustainable solutions in
cooperation with our suppliers to control cost increases.
Ponsse’s white-collar employees continue teleworking to better protect our
factory and service business network from the coronavirus pandemic. It is vital
to keep our personnel healthy and maintain optimal customer service efficiency.
In spite of the exceptional circumstances, we have continued our strong
operational development. This quarter, we launched the upgraded PONSSE Scorpion
family of products to an enthusiastic market reception. Ponsse employees made
commendable efforts to work with customers in the development of this product.
Production of the new Scorpion will begin after the summer holidays.
NET SALES
Consolidated net sales for the period under review amounted to EUR 163.4 (144.5)
million, which is 13.1 per cent more than in the comparison period.
International business operations accounted for 73.5 (69.8) per cent of net
sales.
Net sales were regionally distributed as follows: Northern Europe 41.5 (49.4)
per cent, Central and Southern Europe 20.9 (20.4) per cent, Russia and Asia 15.0
(7.9) per cent, North and South America 22.2 (21.5) per cent and other countries
0.4 (0.8) per cent.
PROFIT PERFORMANCE
The operating result amounted to EUR 16.8 (13.4) million. The operating result
equalled 10.3 (9.3) per cent of net sales for the period under review.
Consolidated return on capital employed (ROCE) stood at 18.0 (-0.8) per cent.
Staff costs for the period totalled EUR 23.6 (22.6) million. Other operating
expenses stood at EUR 14.3 (13.3) million. The net total of financial income and
expenses amounted to EUR -1.5 (-15.0) million. Exchange rate gains and losses
with a net effect of EUR -1.5 (-14.2) million were recognised under financial
items for the period. The parent company’s receivables from subsidiaries stood
at EUR 54.6 million (114.3) net. Their reduction and the moderate change in
exchange rates have resulted in a significantly reduced impact on financial
items for the period under review. The unrealised exchange rate losses for the
comparison period mainly consist of the assessment of inter-company accounts
payable for Ponsse Latin America Ltda and OOO Ponsse.
The effective tax rate for the period under review is affected by a posted tax
expense of Ponsse Latin America related to the valuation of a parent company net
investment posted by the group in the financial statements 2020 and completed by
the subsidiary in the period under review. The finality of the tax expense will
be decided by the authorities. The parent company’s receivables from
subsidiaries mainly consist of trade receivables. The unposted tax assets of
unrealised exchange rate losses for unhedged items related to the trade
receivables’ valuation impacted the group’s effective tax rate for the
comparison period.
Result for the period under review totalled EUR 8.8 (-3.2) million. Diluted and
undiluted earnings per share (EPS) came to EUR 0.31 (-0.11).
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 450.8 (501.3) million. Inventories stood at
EUR 156.8 (171.8) million. Trade receivables totalled EUR 44.9 (42.0) million,
while liquid assets stood at EUR 72.7 (114.3) million. Group shareholders’
equity stood at EUR 265.9 (230.9) million and parent company shareholders’
equity (FAS) at EUR 212.4 (216.5) million. The amount of interest-bearing
liabilities was EUR 54.0 (163.9) million. The company has ensured its liquidity
by withdrawal of current loan from credit facility limit and commercial paper
programme. The company has used zero per cent of its credit facility limit.
Group's loans from financial institutions are non-collaretal bank loans without
financial covenants. Consolidated net liabilities totalled EUR -18.7 (49.6)
million, and the debt-equity ratio (net gearing) was -7.0 (21.5) per cent. The
equity ratio stood at 60.4 (46.5) per cent at the end of the period under
review.
Cash flow from operating activities amounted to EUR 14.8 (-11.7) million. Cash
flow from investment activities came to EUR -4.8 (-5.6) million.
IMPACT OF THE COVID-19 PANDEMIC
The coronavirus pandemic has caused changes in the company’s operating
environment. The company’s management is actively monitoring the development of
the pandemic. The coronavirus pandemic may have a major impact on the
availability of components. The company will continue its enhanced cost control
and careful execution of investments going forward.
Coronavirus restrictions were felt by company operations across the world.
Decisions were made to ensure the health and safety of the company’s customers
and all Ponsse employees. The company’s white-collar employees continue
teleworking, while manufacturing units and the service business network continue
to operate as normal.
In terms of financing, the company has carried out all measures necessary to
ensure business continuity. The company has analysed credit risks related to
trade receivables, as well as credit loss provisions, and concluded that there
are sufficient provisions at the end of the period under review.
ORDER INTAKE AND ORDER BOOKS
Order intake for the period totalled EUR 299.4 (106.8) million, while period-end
order books were valued at EUR 308.0 (209.2) million.
DISTRIBUTION NETWORK
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 and Epec Oy,
Finland. The Group includes also the property company Ponsse Centre, Russia.
Sunit Oy, Finland, is an associate in which Ponsse Plc has a holding of 34 per
cent.
R&D AND CAPITAL EXPENDITURE
Group’s R&D expenses during the period under review totalled EUR 5.1 (5.5)
million, of which EUR 1.6 (1.9) million was capitalised.
Capital expenditure totalled EUR 4.8 (5.6) 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; Tapio Mertanen, Service Director; Paula
Oksman, HR Director; Miika Soininen, Director of IT and Digital Services; Tommi
Väänänen, Director of Delivery Chain Process and Marko Mattila, Sales and
Marketing Director. The company management has regular management liability
insurance.
The area director organisation of sales is led by Marko Mattila, the Group's
sales and marketing director, and Tapio Mertanen, service director. Area
directors report to Jussi Hentunen, Ponsse retail network manager. Managing
directors of subsidiaries and Jussi Hentunen report to Marko Mattila, Ponsse
Plc's sales and marketing director.
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),
Janne Tarvainen (Spain and Portugal),
Gary Glendinning (Hungary, Romania, Slovenia, Croatia, Serbia until 28 February
2021, and the United Kingdom and Ireland),
Antti Räsänen (Hungary, Italy, Romania, Slovenia, Croatia, Serbia and Bulgaria
starting 1 March 2021) and
Tarmo Saks (Poland, Czech Republic and Slovakia).
Russia and Asia:
Jaakko Laurila (Russia and Belarus),
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 1,881 (1,775) during the period and employed
1,903 (1,773) 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 – 31 March 2021 totalled
324,493, accounting for 1.16 per cent of the total number of shares. Share
turnover amounted to EUR 10.8 million, with the period’s lowest and highest
share prices amounting to EUR 29.15 and EUR 38.70, respectively.
At the end of the period, shares closed at EUR 37.80, and market capitalisation
totalled EUR 1,058.4 million.
At the end of the period under review, the company held 227 treasury shares.
ANNUAL GENERAL MEETING
A separate release was issued on 7 April 2021 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
The insecurity in the world economy may result in a decline in the demand for
forest machines and the availability of components. The unexpectedly swift
recovery of the world economy and rapid growth in demand have resulted in
availability problems in certain component groups. The quick economic
fluctuation may affect availability, but also cause rapid inflation in the
component market. The uncertainty may also be increased by the volatility of
developing countries’ foreign exchange markets. The geopolitical situation, in
particular, 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 effects of the COVID-19 pandemic are described in section “IMPACT OF THE
COVID-19 PANDEMIC” of this release.
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
Group’s euro-denominated operating result in 2021 is expected to be slightly
higher than in 2020.
The impact of the coronavirus pandemic on Ponsse’s business, financial standing,
operational performance and liquidity is constantly monitored.
Sustainable solutions to address the availability of parts and components, as
well as increasing costs, are being sought in cooperation with the supplier
network. The company will continue its enhanced cost control and careful
investment execution.
EVENTS AFTER THE PERIOD
The new Future Cabin included in the PONSSE Scorpion launched in February won a
product design award in the internationally acclaimed Red Dot design
competition. Separate press release has been issued on 12 April 2021. The award
in question was the Best of the Best award in the Product Design category,
granted for the cabin’s innovative design. This was the highest recognition that
could be achieved in the competition, granted to the best products of the
various award categories.
PONSSE GROUP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000)
[]
IFRS IFRS IFRS
1-3/21 1-3/20 1-12/20
NET SALES 163,382 144,503 636,627
Increase 16,539 22,469 -6,424
(+)/decrease (-) in
inventories of
finished goods and
work in progress
Other operating 421 471 3,521
income
Raw materials and -119,697 -112,031 -418,400
services
Expenditure on -23,636 -22,627 -85,726
employment-related
benefits
Depreciation and -5,892 -6,034 -24,631
amortisation
Other operating -14,350 -13,319 -47,821
expenses
OPERATING RESULT 16,767 13,431 57,146
Share of results of 85 -20 86
associated companies
Financial income and -1,579 -14,978 -17,671
expenses
RESULT BEFORE TAXES 15,273 -1,566 39,561
Income taxes -6,475 -1,619 -7,277
NET RESULT FOR THE 8,798 -3,185 32,284
PERIOD
OTHER ITEMS INCLUDED
IN TOTAL
COMPREHENSIVE
RESULT:
Translation 2,071 1,843 -968
differences related
to foreign units
TOTAL COMPREHENSIVE 10,869 -1,342 31,316
RESULT FOR THE
PERIOD
Diluted and 0.31 -0.11 1.15
undiluted earnings
per share[*]
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000)
IFRS IFRS IFRS
ASSETS 31 Mar 21 31 Mar 20 31 Dec 20
NON-CURRENT ASSETS
Intangible assets 37,247 33,082 36,709
Goodwill 3,801 3,774 3,808
Property, plant and equipment 111,571 115,421 112,183
Financial assets 372 370 371
Investments in associated companies 851 726 832
Non-current receivables 827 1,075 839
Deferred tax assets 3,710 4,252 3,076
TOTAL NON-CURRENT ASSETS 158,379 158,700 157,818
CURRENT ASSETS
Inventories 156,751 171,763 142,137
Trade receivables 44,902 41,967 35,384
Income tax receivables 1,876 553 1,849
Other current receivables 16,281 14,095 13,165
Cash and cash equivalents 72,654 114,260 123,611
TOTAL CURRENT ASSETS 292,464 342,637 316,146
TOTAL ASSETS 450,843 501,337 473,964
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Share capital 7,000 7,000 7,000
Other reserves 3,460 3,460 3,460
Translation differences 6,502 7,243 4,431
Treasury shares -2 -2 -2
Retained earnings 248,902 213,198 240,149
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS 265,862 230,899 255,038
NON-CURRENT LIABILITIES
Interest-bearing liabilities 50,128 47,794 50,470
Deferred tax liabilities 965 1,216 1,137
Other non-current liabilities 40 55 41
TOTAL NON-CURRENT LIABILITIES 51,133 49,065 51,648
CURRENT LIABILITIES
Interest-bearing liabilities 3,847 116,089 64,055
Provisions 4,737 3,557 4,979
Tax liabilities for the period 1,902 1,042 1,312
Trade creditors and other current liabilities 123,362 100,685 96,932
TOTAL CURRENT LIABILITIES 133,848 221,373 167,278
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 450,843 501,337 473,964
CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000)
IFRS IFRS IFRS
1-3/21 1-3/20 1-12/20
CASH FLOWS FROM OPERATING ACTIVITIES:
Net result for the period 8,798 -3,185 32,284
Adjustments:
Financial income and expenses 1,579 14,978 17,671
Share of the result of associated companies -85 20 -86
Depreciation and amortisation 5,892 6,034 24,631
Income taxes 6,475 1,619 7,277
Other adjustments 1,596 -726 -58
Cash flow before changes in working capital 24,255 18,739 81,719
Change in working capital:
Change in trade receivables and other receivables -12,895 3,417 9,454
Change in inventories -13,462 -26,395 1,965
Change in trade creditors and other liabilities 26,027 -2,177 -5,743
Change in provisions for liabilities and charges -242 107 1,529
Interest received 27 18 97
Interest paid -389 -335 -1,068
Other financial items -1,790 -404 -3,100
Income taxes paid -6,701 -4,687 -10,063
NET CASH FLOWS FROM OPERATING ACTIVITIES (A) 14,830 -11,716 74,790
CASH FLOWS USED IN INVESTING ACTIVITIES
Investments in tangible and intangible assets -4,835 -5,622 -20,270
Proceeds from sale of tangible and intangible assets 18 -10 254
NET CASH FLOWS USED IN INVESTMENT ACTIVITIES (B) -4,817 -5,632 -20,016
CASH FLOWS FROM FINANCING ACTIVITIES
Withdrawal/Repayment of current loans -60,197 82,688 28,680
Withdrawal/Repayment of finance lease liabilities -693 -555 -1,268
Dividends paid 0 0 -8,400
NET CASH FLOWS FROM FINANCING ACTIVITIES (C) -60,890 82,132 19,012
Change in cash and cash equivalents (A+B+C) -50,877 64,784 73,786
Cash and cash equivalents on 1 Jan 123,611 48,704 48,704
Impact of exchange rate changes -80 772 1,121
Cash and cash equivalents on 31Mar/31 Dec 72,654 114,260 123,611
*) The company changed over to presenting the change in non-current receivables
included in the cash flow statement under item change in trade receivables and
other receivables. As a result, previously reported cash flows have been
adjusted to allow comparability. The previously reported cash flow from business
operations was EUR -12.2 million in the interim report for 1 January – 31 March
2020. In addition, the company has made a retrospective change between items
Other adjustments, Income taxes paid and Change in trade creditors and other
liabilities. The change had no effect on Net cash flows from operating
activities (A).
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 1 JAN 2021
7,000 3,460 4,431 -2 240,149 255,038
Translation differences
2,071 2,071
Result for the period
8,798 8,798
Total comprehensive income for the period
2,071 8,798 10,869
Direct entries to retained earnings
-45 -45
SHAREHOLDERS' EQUITY 31 MAR 2021
7,000 3,460 6,502 -2 248,902 265,862
SHAREHOLDERS’ EQUITY 1 JAN 2020
7,000 3,460 5,400 -2 216,264 232,121
Translation differences
1,843 1,843
Result for the period
-3,185 -3,185
Total comprehensive income for the period
1,843 -3,185 -1,342
Direct entries to retained earnings
120 120
SHAREHOLDERS' EQUITY 31 MAR 2020
7,000 3,460 7,243 -2 213,199 230,899
31 Mar 21 31 Mar 20 31 Dec 20
1. LEASING COMMITMENTS (EUR 1,000)
629 713 595
2. CONTINGENT LIABILITIES (EUR 1,000)
31 Mar 21 31 Mar 20 31 Dec 20
Guarantees given on behalf of others
0 0 20
Responsibility of checking the VAT deductions made on real property investments
7,551 8,403 7,863
Other commitments
10 61 14
TOTAL
7,561 8,464 7,897
3. PROVISIONS (EUR 1,000)
Guarantee provision
1 January 2021
4,979
Provisions added
88
Provisions cancelled
-330
31 March 2021
4,737
KEY FIGURES AND RATIOS
31 Mar 21 31 Mar 20 31 Dec 20
R&D expenditure, MEUR
5.1 5.5 21.3
Capital expenditure, MEUR
4.8 5.6 20.3
as % of net sales
3.0 3.9 3.2
Average number of employees
1,881 1,775 1,782
Order books, MEUR
308.0 209.2 174.9
Equity ratio, %
60.4 46.5 54.3
Diluted and undiluted earnings per share (EUR)
0.31 -0.11 1.15
Equity per share (EUR)
9.50 8.25 9.11
FORMULAE FOR FINANCIAL INDICATORS
Return on capital employed, %:
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. The calculation has
been adjusted for part-time employees.
Net gearing, %:
Interest-bearing financial liabilities – cash and cash equivalents
--------------------------------------------------------------------------------
---
Shareholders’ equity * 100
Equity ratio, %:
Shareholders’ equity + Non-controlling interests
------------------------------------------------------------------------
Balance sheet total - advance payments received * 100
Earnings per share:
Net result for the period - Non-controlling interests
--------------------------------------------------------------------------------
---------------------------
Average number of shares during the accounting period, adjusted for share issues
Equity per share:
Shareholders’ equity
--------------------------------------------------------------------------------
-------------
Number of shares on the balance sheet date, adjusted for share issues
ORDER INTAKE (EUR million) 1-3/21 1-3/20 1-12/20
Ponsse Group 299.4 106.8 581.7
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 2020.
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, 20 April 2021
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.