Ovako Releases Interim Report for First Quarter 2015
04/30/2015 - • The quarter began with weak order intake, which gradually improved. Order intake was 10 percent lower than in the strong first quarter of 2014 • Sales volumes were impacted by the weak order intake at the end of last year and decreased by 8 percent compared with the first quarter of 2014. An improved sales mix limited the decrease in revenue to 7 percent • Operating profit before depreciation and amortisation (EBITDA) amounted to EUR 27 (30) million and operating profit (EBIT) amounted to EUR 17 (18) million • Cash flows from operating activities amounted to EUR -5 (5) million • Steel and metals distributor Ovako Metals Oy Ab (formerly Tibnor Oy) in Finland was acquired on March 31 which has lead to a 3 MEUR positive one-off effect on operating profit
Comments from the CEO
”The first quarter showed a significant recovery after a weak ending in 2014. The order intake was weak in the beginning of the quarter and improved gradually. Compared to the strong first quarter last year, volumes were down with 8 percent. Low industrial production in Sweden during the first quarter and weaknesses in some volume segments in Germany are two of the main reasons for the variation.
Despite the lower volumes, the operating result was on a similar level compared to the strong first quarter last year. Demand in advanced applications for renewable energy and fuel injection systems was strong in the quarter, affecting the mix in a positive way. That together with a good cost control, and an improved exchange rate balanced out most of the negative volume effects. Contribution margin per ton remained strong and stable.
The acquisition of Tibnor Oy in Finland was completed on March 31. The company, a leading distributor in Finland, is now named Ovako Metals Oy Ab. Both cash flow and EBITDA are expected to be positively affected during the rest of 2015. However, the EBITDA margin for the group will be somewhat negatively affected by the lower margins in the distribution business.
During the quarter the SZ-Steel® brand for cold climate applications was launched. Ovako has during the last two years completed the introduction of our customer offer in terms of properties. The offering includes IQ- and BQ-Steel® for improved fatigue properties, WR-Steel® for wear resistant properties, M-Steel® for improved machining properties, and finally SZ-Steel for predictable performance down to minus 101 degrees.
Short-term outlook
The demand is expected to remain stable compared to the first quarter this year and also compared to the second quarter last year.”
You will find the Report for First Quarter 2015 on the website: www.ovako.com/Financial-information
”The first quarter showed a significant recovery after a weak ending in 2014. The order intake was weak in the beginning of the quarter and improved gradually. Compared to the strong first quarter last year, volumes were down with 8 percent. Low industrial production in Sweden during the first quarter and weaknesses in some volume segments in Germany are two of the main reasons for the variation.
Despite the lower volumes, the operating result was on a similar level compared to the strong first quarter last year. Demand in advanced applications for renewable energy and fuel injection systems was strong in the quarter, affecting the mix in a positive way. That together with a good cost control, and an improved exchange rate balanced out most of the negative volume effects. Contribution margin per ton remained strong and stable.
The acquisition of Tibnor Oy in Finland was completed on March 31. The company, a leading distributor in Finland, is now named Ovako Metals Oy Ab. Both cash flow and EBITDA are expected to be positively affected during the rest of 2015. However, the EBITDA margin for the group will be somewhat negatively affected by the lower margins in the distribution business.
During the quarter the SZ-Steel® brand for cold climate applications was launched. Ovako has during the last two years completed the introduction of our customer offer in terms of properties. The offering includes IQ- and BQ-Steel® for improved fatigue properties, WR-Steel® for wear resistant properties, M-Steel® for improved machining properties, and finally SZ-Steel for predictable performance down to minus 101 degrees.
Short-term outlook
The demand is expected to remain stable compared to the first quarter this year and also compared to the second quarter last year.”
You will find the Report for First Quarter 2015 on the website: www.ovako.com/Financial-information
