EIMO OYJ STOCK EXCHANGE RELEASE 16.11.2000 AT 8.30 am 1 (7)
INTERIM REPORT JANUARY - SEPTEMBER 2000 (figures are not audited)
RECORD THIRD QUARTER
Eimo's turnover in third quarter reached EUR 33.4 million (growth 78%). The
factory in the Netherlands is fully operational, and the merger process with
Triple S is expected to be completed by the end of January.
Performance in January - September
In January-September 2000 the Company recorded a turnover of EUR 71.8 million
(EUR 54.3 million in the corresponding period in the previous year), an increase
of 32%. The operating profit was EUR 10.3 (12.9) million and profit before
extraordinary items EUR 10.3 (11.8) million.
The split adjusted (1:4) non-diluted earnings per share were EUR 0.16 (0.19) and
the diluted earnings were EUR 0.16 (0.19).
Despite the modest performance early in the year, turnover in January-September
reached a very satisfactory level as several new projects gained momentum in
July-September. Towards the end of the review period, turnover increased but the
profit margin as a percentage fell as bought-in components accounted for an
increasing share of turnover. Profits continued to be affected by one time costs
relating to international growth. The one time costs relating to the merger with
Triple S were recorded under extraordinary items, so they do not affect the net
profit.
Gross investments during January to September totaled EUR 21.8 (10.3) million.
The investments were made in the new factories in the Netherlands and Hungary,
the new mold factory in Lahti and several smaller items in Finland. The balance
sheet total at the end of September stood at EUR 94.2 (64.5) million. The equity
ratio was 56.0% (80.7%) and the Company's cash reserves stood at EUR 2.2 million
at the end of the review period. Eimo has started to use overdraft facilities
instead of a cash surplus. Eimo employed on average 736 (671) people during the
review period. On 30 September the Company had 782 employees. This figure does
not include the personnel at the factory in Hungary.
Record third quarter
Sales in the third quarter of the year surpassed expectations, rising in
September to a record monthly level of EUR 13.1 million. The company's turnover
in the third quarter was EUR 33.4 (18.7) million, growth of 78%. Even though the
operating profit as a percentage of turnover (18.6%) was significantly higher
than earlier in the year, it was considerably reduced by the increase in sales
of bought-in components and the company's investments in international growth.
2 (7)
Sales of bought-in components refers to parts installed in the products. Some
of them are quite expensive. They raise turnover, but their profit margin for
the company is distinctly lower than from other operations.
The costs of the merger in the USA are recorded under extraordinary costs, so
they do not affect the operating profit or the net profit.
Several new products started up during the third quarter. Greater use is being
made of the new technology two component injection molding, which is being
applied to the mobile phone covers for demanding environments at both the
Hollola and Lahti factories.
International growth continues apace
As recently as the beginning of 2000 Eimo only had production in Finland. In
early 2001 Eimo plans to have production in seven countries on four continents.
The Helmond factory in the Netherlands started up towards the end of the winter
and had its official opening ceremony on 22 September 2000. The factory has got
off to a good start and is now operating at virtually full production capacity.
The Dutch subsidiary has already made a profit in January-September. Plans for
expanding operations have been drawn up.
The purchase of the factory in Pecs in Hungary has been confirmed and Eimo
gained possession of the plant on 30 September 2000. Production in Pecs has
already started. Eimo Kft. is a 100% owned subsidiary of Eimo Oyj.
In July Eimo signed a binding agreement to merge with the American company
Triple S Plastics, Inc. The shareholders and holders of share options of Triple
S will obtain 33% - 37% of Eimo's shares and share options in the form of new
Eimo securities. Triple S had a turnover of USD 95 million in the financial
period that ended on 31 March 2000. In July-September Triple S reported a
turnover of USD 39.7 million (growth 68%) and a net profit of USD 2.7 million
(growth 179%). Eimo's merger with Triple S Plastics, Inc. is expected to be
completed by the end of January 2001. Planning for integrating the companies'
operations is in full swing. Triple S has announced the setting up of a joint
venture company in Brazil, aiming to start production in Manaus this year.
After the end of the review period on 1 November 2000, Eimo announced a company
acquisition. As a result, at the beginning of 2001, the company will start
production operations for precision plastic components in Shenzhen, in Guangdong
Province in the People's Republic of China through the Hong Kong -based joint
venture Eimo (HK) Ltd, in which Eimo holds a majority holding. The goal is to
change the focus of production at Century Step Company Ltd, the company
purchased, to serve mainly the telecommunications sector and, at the same time,
to
3 (7)
considerably increase its turnover. Eimo also reached a final agreement on a
joint venture structure through which Eimo has a holding in mold manufacturing
companies in Hong Kong and Dongguang. Further expansion is planned in China, by
establishing factories and/or through company acquisitions.
New management
The company's new President and CEO, Mr. Heikki Marttinen, started on October 1,
2000. He will concentrate on the integration process in the strongly
internationalizing company. The company's Technical Director, Mr. Timo Seppa,
has moved to the United States to prepare technology transfers between the
companies after Eimo - Triple S merger. Mr. Petri Virtanen was appointed his
successor as Eimo's technical director.
Growing importance of supplier chain
As a full service provider, Eimo uses a comprehensive partnership network and
this forms an integral part of the company's service concept. Close partnership
with suppliers and the continuous development of logistics will in future become
increasingly important factors. The company has significantly reinforced its
suppler management resources during the review period.
Concentration in Finland
Eimo is considering arrangements to serve the mobile communications industry
even more effectively in Finland. This will lead to redefining of the roles of
the company's different production units in Finland.
Active trading of Eimo's share
Eimo's share was split (1:4) in April, and since then the Company has had a
total of 46,400,000 shares (39,200,000 A shares). Trading in the split A shares
started on 13 April 2000. Since the split, trading in Eimo's shares has taken
place at prices ranging between EUR 5.50 and EUR 10.98. The closing price on 30
September 2000 was EUR 7.10. Trading in the shares has been active and Eimo's
shares have regularly been, proportionately to the number of listed shares,
among the most actively traded shares on the main list at the Helsinki
Exchanges.
Business prospects
Eimo has started production of several new product programs during the latest
months. Turnover and operating profit (excluding Triple S) in the final quarter
of the year are expected to continue at the same level as during the third
quarter.
4 (7)
During 2000 Eimo has built a firm foothold in its central market areas and
simultaneously secured its global position as one of the leading suppliers in
the field. Eimo will also in the future invest in strengthening this position
and further developing its service concept in all market areas.
Results for 2000 will be published on February 15, 2001.
Lahti, 16 November 2000
Board of Directors
Eimo Oyj is an international manufacturer of precision plastic components, whose
main customers are companies in the mobile communications industry. The Company
has five production plants in Finland, one in the Netherlands and one in
Hungary. The company has also reached agreements on company acquisitions in the
USA and China. In 1999 Eimo had a turnover of EUR 78 million. The Company's
operations are growing rapidly.
Further information:
Elmar Paananen, Vice Chairman, IR +358-500-503 865
DISTRIBUTION:
HEX Helsinki Exchange, Press
ENCLOSURES:
- - Consolidated profit and loss account
- - Consolidated balance sheet
- - Key figures
Investors are urged to read the information to be filed with the United States
Securities and Exchange Commission in connection with the merger, including the
proxy material to be sent to the holders of common stock of Triple S to solicit
their approval of the Merger Agreement and the transactions contemplated thereby
and the registration statement to be filed by Eimo on Form F-4 with respect to
ordinary shares of Eimo to be issued in connection with the transaction, each of
which will include a copy of the Merger Agreement as an exhibit. Such documents,
when filed, will be available free of charge from the SEC website at
www.sec.gov.
This press release includes statements that constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. This information involves risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements. For certain information regarding these risks and uncertainties,
reference is made to Eimo's March 1999 Offering Circular for 5,000,000 share
combined offering (copies of which are available from Eimo upon written request)
and Triple S' Annual Report on Form 10-K for the year ended March 31, 2000.
ENCLOSURE NO. 1 TO STOCK EXCHANGE RELEASE 16.11.2000 5 (7)
Consolidated profit and
loss account
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1-9/00 1-9/99 1-12/99
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1000 EUR 1000 EUR Change % 1000 EUR
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NET TURNOVER 71 836 54 275 32.4 78 011
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Other operating income 216 256 - 15.6 728
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Operating costs 57 373 38 389 49.5 54 895
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Depreciation and
write-downs 4 374 3 252 34.5 4 629
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OPERATING PROFIT 10 305 12 890 - 20.1 19 215
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% of turnover 14.3 23.7 24.6
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Financing income and
expenses - 54 - 1 118 - 95.2 - 1 016
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PROFIT BEFORE
EXTRAORDINARY ITEMS 10 251 11 772 - 12.9 18 199
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% of turnover 14.3 21.7 23.3
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Extraordinary items - 742 528 528
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PROFIT BEFORE TAXES 9 509 12 300 - 22.7 18 727
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% of turnover 13.2 22.7 24.0
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Taxes - 2 756 - 3 302 - 16.5 - 5 129
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PROFIT FOR THE REVIEW
PERIOD 6 753 8 998 - 24.9 13 598
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ENCLOSURE NO. 2 6 (7)
Consolidated balance sheet
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30.9.00 30.9.99 31.12.99
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1000 EUR 1000 EUR Change % 1000 EUR
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ASSETS
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NON-CURRENT ASSETS
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Intangible assets 1 268 356 256.2 381
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Tangible assets 50 788 29 832 70.2 34 268
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Investments 71 62 - 93.3 62
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CURRENT ASSETS
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Inventories 12 436 5 985 107.8 7 852
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Deferred tax receivable - - - -
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Receivables 27 461 14 076 95.1 11 865
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Cash and bank
accounts 2 198 14 161 - 83.3 16 718
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TOTAL ASSETS 94 222 64 472 46.1 71 146
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LIABILITIES AND
SHAREHOLDERS' EQUITY
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SHAREHOLDERS' EQUITY
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Share capital 11 600 1 951 494.6 11 600
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Share premium account 18 124 27 773 - 34.7 18 124
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Retained profits 21 692 22 018 - 1.5 26 618
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LIABILITIES
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Deferred tax liability 2 312 1 811 27.7 2 232
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Non-current liabilities
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Loans from financial
institutions 9 503 187 4 981.8 157
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Current liabilities
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Loans from financial
institutions 5 215 122 4 174,6 118
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Non-interest bearing
liabilities 20 295 6 294 222.4 6 888
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Accruals and deferred
income 5 481 4 316 27.0 5 409
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 94 222 64 472 46.1 71 146
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ENCLOSURE NO. 3
Financial ratios
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30.9.00 30.9.99 Change % 31.12.99
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Return on equity (ROE), % 18.0 30.6 33.4
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Return on investment
(ROI), % 22.7 40.6 43.1
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Equity ratio, % 56.0 80.7 79.9
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Net Gearing, % 24.4 - 24.8 - 29.2
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Current Ratio 1.36 3.10 2.93
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Cross investments in
fixed assets, 1000 EUR 21 789 10 268 112.2 15 281
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% of turnover 30.3 18.9 19.6
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Average number of
personnel 736 671 9.7 681
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PER SHARE RATIOS
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Earnings per share (EPS),
EUR 0.155 0.191 - 18.8 0.291
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Shareholders equity per
share, EUR 1.108 1.115 - 0.6 1.214
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SECURITIES AND
GUARANTEES, 1000 EUR
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Securities for own
liabilities 25 016 14 400 73.7 14 322
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of which in use 13 213 645 1 948.5 540
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Other own liabilities - - -
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Nominal value of
derivative contracts 2 000 - -
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On behalf of outsiders - - -
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