Distribution of company announcements to the professional platforms, finance portals and syndication of important corporate news to a wide variety of news aggregators and financial news systems.
- Orders received at a good level: 121.9 (107.9) million EUR, growth 12.9%. In comparable currencies, the growth would have been 19.2%. - Net sales EUR 106.5 (100.8) million, up 5.7%. In comparable currencies, the growth would have been 12.8%. - Operating profit EUR 14.8 (15.1) million, down 2.0%. - Earnings per share EUR 0.59 (0.65), down 9.4%.
H1 2008 H1 2007 Change Q2 2008 Q2 2007 Change 2007 (MEUR) (MEUR) (%) (MEUR) (MEUR) (%) Net sales, group 106.5 100.8 5.7 60.1 50.5 19.0 224.1 Measurement Systems 43.2 43.9 -1.5 26.6 21.9 21.2 95.4 Instruments 41.1 36.0 14.1 22.4 18.1 23.5 76.6 Solutions 18.2 12.0 52.1 11.4 6.1 86.7 34.6 Services 12.5 14.4 -13.3 5.7 7.2 -21.2 33.0 Eliminations and other -8.6 -5.6 -5.9 -2.8 -15.5 Operating profit, group 14.8 15.1 -2.0 11.7 8.7 35.3 35.3 Measurement Systems 4.5 6.1 -26.9 5.8 3.8 48.9 12.3 Instruments 12.1 10.5 15.5 7.2 5.5 31.5 20.5 Solutions -1.4 -1.0 -48.6 0.3 0.0 482.6 -0.6 Services -0.2 1.4 -117.4 -0.7 0.3 -311.1 5.7 Eliminations and other -0.1 -1.9 -0.8 -1.0 -2.6 Profit before taxes 15.5 16.4 -5.2 12.6 9.4 34.3 37.0 Net profit for the review period 10.7 11.8 -9.4 8.8 6.8 29.1 25.8 Orders booked 121.9 107.9 12.9 57.9 54.4 6.5 228.5 Order book 95.6 82.6 15.7 95.6 82.6 15.7 82.3 Earnings per share 0.59 0.65 -9.4 0.48 0.37 29.1 1.42 Return on equity (%) 12.4 14.1 12.4 14.1 14.9
Comments on the second quarter
Vaisala's net sales in the second quarter developed favorably. Also the operating profit and number of orders received were on a good level. Exchange rates continued to affect the net sales in a negative way.
Outlook for the remainder of 2008
Instability in the world economy and changes in the currency exchange rates are expected to continue to affect the business. Due to the structure of Vaisala's customer base, the Company's market situation is expected to remain unchanged in 2008. We expect our net sales to be slightly higher than in the preceding year and operating profit to remain at the same level or be slightly higher than in the preceding year. The market situation is expected to remain favorable especially in Asia-Pacific.
Development projects aiming at long-term growth are continuing.
President and CEO Kjell Forsén on Vaisala's six month results:
"Vaisala's second quarter was a good one. Our net sales developed favorably, especially in the instruments and airport weather solutions business areas. The number of orders received has also grown, and for example the order book for weather radars is good.
Vaisala was able to grow despite the fact that the US dollar has weakened by some 15 percent in the review period compared to the corresponding period last year. In comparable currencies, our net sales would have grown by nearly 13 percent, instead of the 5.7 percent in current rates. Nearly 40% of our net sales this year has been USD based.
A particularly positive development was the growth of sales in the Asia Pacific region by 24 percent. The region grew into the second biggest market for Vaisala after Europe.
The result was somewhat burdened by the development projects aiming at long-term growth."
Market situation, net sales and order book
Vaisala's market situation remains unchanged. The number of orders received has developed positively during the first six months. Vaisala's market-position also remains strong.
The value of orders received was EUR 121.9 (107.9) million, which is 12.9 percent more than in the corresponding period last year. In comparable currencies, the value of orders received would have grown by 19.2 percent. The number of orders received for the past 12 months is EUR 242.4 million. The order book stood at EUR 95.6 (82.6) million at the end of the review period. Of the order book, approximately EUR 27 million will be delivered in 2009 or later.
Net sales increased by 5.7 percent year on year, to EUR 106.5 (100.8) million. In comparable currencies, Vaisala's consolidated net sales would have grown by 12.8 percent.
Net sales developed most favorably in the Asia-Pacific region and in Europe, but declined in North America and South and Central America. Net sales per region were as follows: Europe EUR 39.0 (34.8) million, Asia-Pacific EUR 33.5 (27.8) million, North America EUR 30.8 (33.8) million, and Africa and South and Central America EUR 3.3 (4.4) million. Exchange rates affected especially the North American net sales. In comparable currencies, the net sales there would have grown by 4.7 percent.
Operations outside Finland accounted for 94 (96) percent of net sales.
Performance and balance sheet
Operating profit for the review period was 13.9 percent of the net sales, EUR 14.8 (15.1) million. Profit before taxes was 14.6 percent of the net sales, EUR 15.5 (16.4) million. Net profit for the review period was EUR 10.7 (11.8) million.
Vaisala Group's solvency ratio and liquidity remained strong. On June 30, 2008, the balance sheet total was EUR 212.7 (204.8) million. The Group's solvency ratio at the end of the review period was 86 (85) percent.
Investment in research and development in the review period totaled EUR 11.5 (10.4) million, representing 10.8 percent of the Group's net sales.
Capital expenditure
Gross capital expenditure totaled EUR 5.0 (3.4) million. The construction of a new enterprise resource planning (ERP) system for the entire organization continues. Implementation will proceed in phases, and will commence this year.
Changes in financial reporting
From the first Interim Report for 2008, Vaisala Group's business will be reported in four segments, which are Vaisala Instruments, Vaisala Measurement Systems, Vaisala Solutions and Vaisala Services.
All figures for 2007 have been changed to correspond to the new reporting model, and are therefore comparable. The comparative figures for 2007 have been published in a stock exchange release on 30.4.2008.
Vaisala Measurement Systems
Vaisala Measurement Systems consists of sounding, surface weather system, thunderstorm system, wind profiler, and weather radar business segments. Vaisala Measurement Systems' offering was complemented by single products and systems from Vaisala Solutions. Correspondingly, the lightning detection services were moved to the Vaisala Services business area.
Vaisala Measurement Systems' net sales to customers outside the Group decreased by 3.4 percent year on year, to EUR 40.5 (42.0) million. In comparable currencies, the net sales would have grown by 2.8 percent. Operating profit was EUR 4.5 (6.1) million.
Even though some of the delay caused by a temporary disruption in production in the first quarter has been caught up, the soundings business is still somewhat behind the comparable level a year ago. The disruption is not expected to have a significant impact on the total net sales of the business area in 2008.
The value of orders received was EUR 56.3 million and the order book stood at EUR 45.6 million at the end of the review period.
Vaisala Instruments
Vaisala Instruments consists of humidity, barometric pressure, carbon dioxide, dewpoint, oxygen, wind and optical measurement business segments.
The instruments business has developed well despite of the weakened US dollar. The division's net sales to customers outside the Group increased by 8.8 percent year on year to EUR 35.2 (32.4) million. In comparable currencies, the increase in net sales would have been 15.8 percent. Operating profit of the review period was EUR 12.1 (10.5) million.
The sales of all the product lines in the instruments business have developed very positively.
The value of orders received from external customers was EUR 36.1 million and the order book stood at EUR 8.8 million at the end of the review period.
Vaisala Solutions
The focus of business area's offering is in comprehensive weather observation solutions within aviation, traffic, meteorology and hydrology. Therefore single products and systems were moved to the Vaisala Measurement Systems business area. Additionally, the road weather services were moved to the Vaisala Services business area.
Vaisala Solutions' net sales to customers outside the Group increased by 52.1 percent year on year to EUR 18.2 (12.0) million. In comparable currencies, the net sales would have been up by 59.7 percent. Operating profit for the review period was EUR -1.4 (-1.0) million. Markets for aviation weather solutions have developed particularly favorably.
The total value of orders received was EUR 19.1 million and the order book stood at EUR 28.2 million at the end of the review period.
Vaisala Services
Vaisala's service offering has been centralized under the Vaisala Services business area, which became operative at the beginning of 2008. Vaisala Services consists of two business segments, Product Services and Observation Services.
Net sales to customers outside the Group decreased by 13.3 percent year on year to EUR 12.5 (14.4) million. In comparable currencies, the net sales would have been down by 3.9 percent. Operating profit for the review period was EUR -0.2 (1.4) million. The total value of orders received was EUR 10.4 million and the order book stood at EUR 13.0 million at the end of the review period.
Personnel
The average number of employees in the Vaisala Group during January-June was 1,150 (1,095). Some 37 (39) percent of the personnel were based outside Finland.
Vaisala has two incentive plans; one based on the development of sales and profitability and covering all employees, and another three year plan based on the development of profitability and covering key employees.
Near-term risks and uncertainties
No significant changes occurred in the risks and uncertainties relating to Vaisala's business during the review period.
The most significant near-term risks and uncertainties relate to changes in the global economy. Changes in purchasing activities, currency exchange rates (with particular respect to the U.S. dollar), supply chain management and production activities are the most significant of these. Significant changes in subcontractor relations, activities or operating environment may have a negative impact on Vaisala's business. Vaisala monitors these risks and prepares for them in accordance with the Company's risk management policy.
The Company is currently carrying out some significant improvements in its research and development and sales organizations. These changes lay the foundation for the successful execution of Vaisala's new strategy. A new Group-wide enterprise resource planning system is also under development. These efforts may constitute a short-term risk regarding Vaisala's net sales and result.
Vaisala's share
The Company's Board of Directors had no valid authorizations for increasing the share capital or issuing convertible bonds or bonds with warrants at the end of the review period.
The closing price of Vaisala's A share in the OMX Nordic Exchange Helsinki was EUR 26.31 at the end of the review period. The highest quotation during the review period was EUR 36.49 and the lowest EUR 24.60. A total of 1,245,708 Vaisala shares were traded in the stock exchange during the review period.
Conversion of unlisted shares series K into series A
Vaisala Oyj's 500 unlisted shares (series K) were converted into listed shares (series A). The conversion was registered in the Finnish Trade Register on June 25, 2008. Listing of the new series A shares was applied for as of June 26, 2008.
Vaisala has 18,218,364 shares, of which 3,406,885 are K shares and 14,811,479 are A shares. The shares have a counter book value of EUR 0.42. The K shares and A shares are differentiated by the fact that each K shares entitles its owner to 20 votes at a General Meeting of Shareholders while each A share entitles its owner to 1 vote. The A shares represent 81.3% of the total number of shares and 17.9% of the total votes. The K shares represent 18.7% of the total number of shares and 82.1% of the total votes.
The market value of Vaisala's A shares on 30.6.2008 was EUR 389.4 million, excluding the Company's own shares. The total market value of all shares, when the K series shares which are not traded on the stock market are valued at the rate of the A series shares' closing price on the final day of the review period, was EUR 479.1 million at the end of the review period, excluding the Company's own shares.
Vaisala's main shareholders are listed on the Company's website and in the Notes to the Financial Statements.
Treasury shares and parent company shares
At the end of the review period, the Company held a total of 9,150 Vaisala A shares, which represented 0.05 percent of the share capital and 0.01 percent of the votes. The consideration paid for these shares was EUR 251,898.31.
Decisions made by the Annual General Meeting
Vaisala Oyj's Annual General Meeting was held on March 27, 2008 at the Company's headquarters in Vantaa. The Annual General Meeting confirmed the annual accounts for 2007 and granted the Members of the Board of Directors and the Company's President and CEO discharge from liability for the accounts between 1.1.-31.12.2007.
The Annual General Meeting decided that a dividend of EUR 0.85 per share, corresponding to the total of EUR 15,477,831.90 was to be distributed for the financial year 2007. Dividend was not paid to the A-shares that are held by Vaisala Oyj. Dividend was paid on April 8, 2008.
The Annual General Meeting decided that the Board of Directors continues to comprise of six members. Raimo Voipio and Mikko Niinivaara, who were to retire by rotation were re-elected for three years. Other members in the Board of Directors are Yrjö Neuvo, Maija Torkko, Mikko Voipio and Stig Gustavson.
The Annual General Meeting decided on the annual remuneration of the Board of Directors to be as follows: chairman EUR 35,000, and a member EUR 25,000.
Auditors
PricewaterhouseCoopers Oy and Mr. Hannu Pellinen APA were chosen as the Company's Authorized Public Accountants.
Board of Directors' Organizing Meeting
Raimo Voipio will continue as the Chairman of the Board of Directors, and Yrjö Neuvo as Vice Chairman. Maija Torkko, Mikko Niinivaara, Mikko Voipio and Stig Gustavson are members of the Board.
Events outside the review period
Vaisala and the Australian Bureau of Meteorology signed a three-year agreement to supply radiosondes for the country's upper air observation network. The stock exchange release on the agreement was published on July 16, 2008.
Vantaa, Finland, August 7, 2008
Vaisala Corporation Board of Directors
Key figures
Financial indicators 1-6 1-6 4-6 4-6 1-12 2008 2007 2008 2007 2007 Return on equity (ROE) 12.4% 14.1% 12.4% 14.1% 14.9% Number of shares at June 30 (1000 pcs) 18,209 18,209 18,209 18,209 18,209 Number of chares at June 30 (1000 pcs), weighted average 18,209 18,209 18,209 18,209 18,209 Adjusted number of shares (1000 pcs) 18,209 18,209 18,209 18,209 18,209 Earnings/share (EUR) 0.59 0.65 0.48 0.37 1.42 Earnings/share (EUR),fully diluted 0.59 0.65 0.48 0.37 1.42 Net cash flow from operating activities/share (EUR) 0.65 1.05 1.98 Equity/share (EUR) 9.30 9.08 9.30 9.08 9.68 Solvency ratio 86% 85% 86% 85% 83% Gross capital expenditure (EUR Million) 5.0 3.4 2.9 2.0 7.3 Depreciation (EUR Million) 3.9 4.1 2.0 2.1 8.2 Average personnel 1,150 1,095 1,180 1,109 1,113 Order book (EUR Million) 95.6 82.6 95.6 82.6 82.3 Liabilities from derivative contracts 13.3 11.6 13.3 11.6 14.3
This interim report has been prepared according to the IFRS-Standards accounting and valuation principles. This report qualifies all IAS 34, Interim Financial Reporting, standards requirements.
CONSOLIDATED INCOME STATEMENT (IFRS, EUR Million) 1-6 1-6 Change 4-6 4-6 Change 1-12 2008 2007 % 2008 2007 % 2007 Net sales 106.5 100.8 5.7 60.1 50.5 19.0 224.1 Cost of production and procurement -46.5 -43.8 6.3 -25.1 -21.9 14.5 -99.6 Gross profit 60.0 57.0 5.3 35.0 28.6 22.4 124.5 Other operating income 0.0 0.0 0.0 0.0 -200.0 0.0 Cost of sales and marketing -23.5 -21.8 7.5 -11.9 -10.4 14.5 -46.2 Development costs -11.5 -10.4 10.5 -5.2 -4.9 7.7 -23.5 Other administrative costs -10.2 -9.6 6.0 -6.1 -4.7 31.7 -19.5 Operating profit 14.8 15.1 -2.0 11.7 8.7 35.3 35.3 Financial income and expenses 0.7 1.2 -44.3 0.8 0.7 21.4 1.6 Profit before tax 15.5 16.4 -5.2 12.6 9.4 34.3 37.0 Income taxes -4.8 -4.6 5.8 -3.8 -2.6 48.1 -11.2 Profit after tax 10.7 11.8 -9.4 8.8 6.8 29.1 25.8 Attributable to Equity holders of the parent 10.7 11.8 -9.4 8.8 6.8 29.1 25.8
Taxes for the review period have been calculated under taxes.
Earnings per share for profit attributable to the equity holders of the parent 1-6 1-6 Change 4-6 4-6 Change 1-12 2008 2007 % 2008 2007 % 2007 Basic earnings per share, EUR 0.59 0.65 -9.4 0.48 0.37 29.1 1.42 Diluted earnigns per share, EUR 0.59 0.65 -9.4 0.48 0.37 29.1 1.42
Trade and other receivables 46.6 39.6 17.5 53.4 Accrued income tax receivables 0.8 0.7 19.1 0.5 Financial assets recognised at fair value through profit and loss 27.9 42.0 -33.5 42.6 Cash and cash equivalents 61.6 45.0 36.8 56.6 TOTAL ASSETS 212.7 204.8 3.9 225.6
SHAREHOLDERS' EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Share capital 7.7 7.7 0.0 7.7 Share premium reserve 16.6 16.6 0.0 16.6 Reserve fund 0.1 0.1 32.6 0.1 Translation differences -7.7 -2.3 229.2 -5.4 Profit from previous years 142.1 131.8 7.8 131.8 Own shares -0.3 -0.3 0.0 -0.3 Profit for the financial year 10.7 11.8 -9.4 25.8 Total equity 169.3 165.4 2.4 176.3
Current liabilities Current portion of long-term borrowings 0.1 0.1 -58.2 0.1 Current interest-bearing liabilities 0.3 0.3 -8.8 0.7 Advances received 15.1 10.3 47.0 12.0 Accrued income tax payables 1.9 3.9 -50.6 2.5 Trade and other payables 25.4 24.1 5.6 32.9 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 212.7 204.8 3.9 225.6
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY June 30, 2008 (EUR million) Share pre- Trans- Retain- Share mium Re- lation dif- ed Total capi- Share re- serve Own fer- earn- equi- tal issue serve fund shares ences ings ty Balance at December 31, 2007 7.7 0.0 16.6 0.1 -0.3 -5.4 157.6 176.3
Translation differences -2.3 -2.3 Net profit for the period 10.7 10.7 Dividend paid -15.5 -15.5
Balance at June 30. 2008 7.7 0.0 16.6 0.1 -0.3 -7.7 152.8 169.3
Share Retain- Share pre- Re- ed capi- Share mium serve Own Trans- earn- Total tal issue re- fund shares lation ings equi- serve dif-fe-rences ty Balance at December 31, 2006 7.7 0.0 16.6 0.1 -0.3 -1.6 147.3 169.8
Translation differences 0.0 -0.7 -0.7 Net profit for the period 11.8 11.8 Dividend paid -15.5 -15.5
Balance at June 30, 2007 7.7 0.0 16.6 0.1 -0.3 -2.3 143.6 165.4
CONSOLIDATED CASH FLOW STATEMENT (EUR million) 1-6 1-6 Change 1-12 2008 2007 % 2007 Cash flows from operating activities Cash receipts from customers 115.5 115.7 -0.2 228.2 Other income from business operations 0.0 0.0 740.0 0.0 Cash paid to suppliers and employees -99.1 -93.4 6.1 -184.0 Interest received 1.4 1.7 -16.2 3.4 Interest paid -0.2 -0.1 56.9 -0.4 Other financial items, net 0.2 0.0 -423.6 -0.4 Direct tax paid -5.8 -4.8 22.5 -10.8 Cash flow from business operations (A) 11.9 19.0 -37.4 36.0
Cash flow from investing activities Investments in tangible and intangible assets -5.3 -3.5 54.0 -7.4 Proceeds from sale of fixed assets 0.2 0.0 0.0 Repayments on loan receivables 0.0 0.0 -98.7 0.0 Other investments 0.0 0.1 -111.6 0.0 Cash flow from investing activities (B) -5.1 -3.3 56.0 -7.4
Cash flow from financing activities Repayment of long-term loans 0.0 -0.2 -100.0 -0.2 Dividend paid and other distribution of profit -15.5 -15.4 0.2 -15.5 Cash flow from financing activities (C) -15.5 -15.6 -0.8 -15.7
Liquid funds at beginning of period 99.2 87.3 13.6 87.3 Foreign exchange effect on cash -1.0 -0.4 128.5 -1.0 Net change in cash and cash equivalents -8.7 0.1 -7274.5 12.9 Liquid funds at end of period 89.6 87.0 2.9 99.2
Segment Report Business segments Other 1-6/2008 VMS * VIN * VSO * VSE * operations Eliminations Group EUR million
Net sales to external customers 40.5 35.2 18.2 12.5 0.0 0.0 106.5 Intragroup sales 2.7 5.9 0.0 0.0 0.1 -8.7 0.0 Net sales 43.2 41.1 18.2 12.5 0.1 -8.7 106.5
Operating profit 4.5 12.1 -1.4 -0.2 -0.1 0.0 14.8
Depreciation 0.9 0.8 0.1 0.5 1.7 0.0 3.9
* VMS = Vaisala Measurement Systems * VIN = Vaisala Instruments * VSO = Vaisala Solutions * VSE = Vaisala Services
Segment Report Business segments Other 1-6/2007 VMS * VIN * VSO * VSE * operations Eliminations Group EUR million
Net sales to external customers 42.0 32.4 12.0 14.4 0.0 0.0 100.8 Intragroup sales 1.9 3.7 0.0 0.0 0.0 -5.6 0.0 Net sales 43.9 36.0 12.0 14.4 0.0 -5.6 100.8
Operating profit 6.1 10.5 -1.0 1.4 -1.9 0.0 15.1
Depreciation 1.1 0.8 0.1 0.5 1.6 0.0 4.1
* VMS = Vaisala Measurement Systems * VIN = Vaisala Instruments * VSO = Vaisala Solutions * VSE = Vaisala Services Segment Report Business segments Other 4-6/2008 VMS * VIN * VSO * VSE * operations Eliminations Group EUR million
Net sales to external customers 24.6 18.3 11.5 5.7 0.0 0.0 60.1 Intragroup sales 2.0 4.0 -0.1 0.0 0.1 -6.0 0.0 Net sales 26.6 22.4 11.4 5.7 0.1 -6.0 60.1
Operating profit 5.8 7.2 0.3 -0.7 -0.8 0.0 11.7
Depreciation 0.6 0.7 0.0 0.3 0.4 0.0 2.0
* VMS = Vaisala Measurement Systems * VIN = Vaisala Instruments * VSO = Vaisala Solutions * VSE = Vaisala Services
Segment Report Business segments VSE Other 4-6/2007 VMS * VIN * VSO * * operations Eliminations Group EUR million
Net sales to external customers 21.0 16.2 6.1 7.2 0.0 0.0 50.5 Intragroup sales 1.0 1.9 0.0 0.0 0.0 -2.8 0.0 Net sales 21.9 18.1 6.1 7.2 0.0 -2.8 50.5
Operating profit 3.8 5.5 0.0 0.3 -1.0 0.0 8.7
Depreciation 0.5 0.4 0.1 0.2 0.8 0.0 2.1
* VMS = Vaisala Measurement Systems * VIN = Vaisala Instruments * VSO = Vaisala Solutions * VSE = Vaisala Services
Segment Report Business segments Other 1-12/2007 VMS * VIN * VSO * VSE * operations Eliminations Group EUR million
Net sales to external customers 90.2 66.2 34.6 33.0 0.0 0.0 224.1 Intragroup sales 5.2 10.4 0.0 0.0 0.0 -15.5 0.0 Net sales 95.4 76.6 34.6 33.0 0.0 -15.5 224.1
Operating profit 12.3 20.5 -0.6 5.7 -2.6 0.0 35.3
Depreciation 2.1 1.6 0.2 1.0 3.2 0.0 8.2
* VMS = Vaisala Measurement Systems * VIN = Vaisala Instruments * VSO = Vaisala Solutions * VSE = Vaisala Services
Calculation of financial indicators
Shareholders' equity plus minority interest Solvency ratio, (%) = --------------------------------------- x 100 Balance sheet total less advance payments
Profit before taxes less taxes +/- minority interest Earnings / share = --------------------------------------- Average number of shares, adjusted
Cash flow from business operations Cash flow from business = --------------------------------------- operations / share Number of shares at balance sheet date
Shareholders' equity Equity / share = --------------------------------------- Number of shares at balance sheet date, adjusted
Dividend Dividend / share = ---------------------------------------- Number of shares at balance sheet date, adjusted
Profit before taxes less taxes Return on equity, ROE (%) = ---------------------------------------- x 100 Shareholders' equity plus minority interest (average)
