s o l u t i o n s f o r t e l e c o m m u n i c a t i o n s & i n d u s t r i a l e l e c t r o...
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S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
SCANFIL PLC’S ANNUAL GENERAL MEETING
HARRI TAKANENPRESIDENT
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
YEAR 2007
Implementation of the chosen strategy was successful and profitability retained at a satisfactory level. The Company’s excellent financial position is the result of Scanfil’s cost-efficient operations, competitiveness and good service competence.
In the industrial electronics products market, both the volume of production and the sales continued to grow steadily throughout the year. Global mega trends have had a positive effect on the markets where Scanfil's industrial electronics customers operate.
In 2007, the telecommunications network products market was characterised by corporate restructurings implemented by large players in the field. These affected the operations of contract manufacturers of network products.
Telecommunications customers accounted for about 69 (72)% and industrial electronics customers for about 31 (28)% of the turnover.
The reorganisation of operations in Finland was completed during the year, and the operations in Finland were concentrated in Sievi and Vantaa. All the resources assigned to the reorganisation of operations in Finland were released and engaged in business development again by the end of the year. Scanfil plc’s Belgian subsidiary Scanfil N.V. sold its plant site in Belgium and n Finland, Scanfil plc sold its Äänekoski plant site.
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
SCANFIL OYJFINLAND- main office- 3 factories- integrated enclosure systems- equipment racks- electronic modules - backplanes- test systems-engineering
SCANFIL OÜESTONIA,PÄRNU- electronic modules- backplanes- cable assemblies- integration
SCANFIL(SUZHOU) CO.,LTD.CHINA, SUZHOU - electronic modules- backplanes- cable assemblies- integrated cabinets
SCANFIL(HANGZHOU) CO.,LTD.CHINA, HANGZHOU - sheet metal mechanics- integrated enclosure systems - equipment racks
SCANFIL KFTHUNGARY,BUDAPEST- sheet metal mechanics- integrated enclosure systems - equipment racks
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Turnover annually
241,
4
321,
6
313,
4
275,
2
224,
6
0
50
100
150
200
250
300
350
2003 2004 2005 2006 2007
meu
r
FAS IFRS
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Operating profit annually
35,
0
32,
3
32,
3
FAS IFRS
27,3
28,2
25,2
18,6
11,4
0
5
10
15
20
25
30
2003 2004 2005 2006 2007
meu
r
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Turnover and –operating profit % quarterly 2007
59,1
54,3
58,9
52,2
10,2%9,4 %
6,7 %6,8 %
0
10
20
30
40
50
60
70
80
Q1 Q2 Q3 Q4
meu
r
0,0 %
2,0 %
4,0 %
6,0 %
8,0 %
10,0 %
Turnover % of turnover
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Turnover geographically
1 %
2 %
25 %
29 %
43 %
2006 2007
1 %
30 %
1 %
25 %
43 %
Finland
Rest of EU
Asia
USA
Others
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Sales geographically
2006 2007
45 %32 %
23 %
39 %
20 %
41 %Finland
Rest of EU
Asia
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Personnel
291
151
1106
513Finland
Belgium
China
Hungary
Estonia
31.12.2007Total 2061
629
950
294
189
31.12.2006 Total 2073
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Earnings / share and dividend / share
0,24
0,14
0,10 0,
12
0
0,05
0,1
0,15
0,2
0,25
0,3
2006 2007 2006 2007
eur
Earnings/share Divided/share
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Equity ratio
73
,6
73
,6
66
,5
59
,4
60,
2
20
30
40
50
60
70
80
2003 2004 2005 2006 2007
%
FAS IFRS
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Return on investment
14
,1
9,0
18
,619
,8
19
,7
0,0
5,0
10,0
15,0
20,0
25,0
2003 2004 2005 2006 2007
%
FAS IFRS
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008-3
1,8
-19
,1-15
,2
-7,5
5,8
-35,0
-30,0
-25,0
-20,0
-15,0
-10,0
-5,0
0,0
5,0
10,0%
Gearing
FAS IFRS
2003 2004 2005 2006 2007
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.20082
5,0
13
,9
24
,226
,5
-12
,4
-15,0
-10,0
-5,0
0,0
5,0
10,0
15,0
20,0
25,0
30,0m
eu
r
Cash flow after investments
FAS IFRS
2003 2004 2005 2006 2007
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Rate development and exchange
The highest share price was EUR 2.49, the lowest EUR 1.92 and the share price at the end of the period EUR 1.95
0,00
0,50
1,00
1,50
2,00
2,50
3,00
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
J an-07 Feb-07 March-07 April-07 May-07 J une-07 J uly-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Rat
e
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
Wee
k ex
chan
ge
Exchange Scanfil Oyj
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
6,4 %
2,0 %
3,3 %
81,5 %
0,5 % 6,3 %
Corporations
Financial and insuranceinstitutions
Public entities
Non-profit-makingorganisations
Households
Non-Finnish owners
Share ownership 31.12.2007
Major share holders Breakdown of share ownership by owner category
Takanen Jorma 29,0Kotilainen Eero 12,0Takanen Harri 6,4Takanen Jonna 5,4Pöllä Reijo 5,1Takanen Jarkko 4,2Scanfil Oyj 3,3Takanen Martti 3,2Nordea Pankki Suomi Oyj, nom-reg 3,1Riitta ja Jorma J. Takasen Säätiö 3,1Takanen Riitta 1,7Skandinaviska Enskilda Banken, nom-reg 1,3Laakkonen Mikko 1,1Takanen Raimo 1,0Keskinäinen Eläkevakuutusyhtiö Ilmarinen 1,0Total 80,9 %
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Future prospects
• Demand in the industrial electronics sector is expected to continue growing in 2008. In addition, negotiations are in progress with potential new customers in the industrial electronics sector.
•The growth of the telecommunications equipment market is generally estimated to remain very low in 2008. Turnover from telecommunications equipment supplied by Scanfil is expected to remain unchanged from year-end 2007.
• Scanfil expects its turnover in 2008 to be about the same as in 2007. Profitability for the full year is estimated to be at a satisfactory level. However, market predictability is still poor.
• The Company’s good financial position provides an opportunity to actively seek various means and arrangements that will put Scanfil’s operations back on a growth track.
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
SCANFIL PLC’S ANNUAL GENERAL MEETING
JORMA J. TAKANENCHAIRMAN OF THE BOARD
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
• The Board of Scanfil Oyj proposes the transfer of the contract manufacturing business with a business transfer to Scanfil EMS Oy
• The purpose of the procedure is to ease company reorganization and to manage finances efficiently and profitably by spreading risks and to search for new growth possibilities.
• The objective is to earn a higher than market average return on invested capital.
• Advance ruling from the Large Taxpayers’ Office has been applied for for the business transfer. Large Taxpayers’ Office stated that the transfer has no effect on taxation.
• This procedure does not have any special personnel effects. • All employee contracts will continue on current terms.
Transfer of business to Scanfil EMS Oy
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
• The company has been registered in the Trade Register as of March 12, 2008, share capital 5 000 €
• The company intends to operate as the parent company of the contract manufacturer businesses.
• The companies in China, Hungary and Estonia would become subsidiaries of Scanfil EMS Oy.
Scanfil EMS Oy
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
SCANFIL PLC
Scanfil Oü
Scanfil (Suzhou) Co.,Ltd
Scanfil Kft
Scanfil (Hangzhou) Co.,Ltd
Scanfil NV Scanfil
EMS OyContract manufacturingGroup
new company/
associatedcompany
New Group structure
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
• All the assets and debts of Scanfil plc’s contract manufacturing business will transfer at the bookkeeping value to Scanfil EMS Oy• will transfer to Scanfil EMS Oy:
– immaterial rights – machines and equipment–shares of the China, Hungary and Estonia subsidiaries – current assets/inventory– short term receivables and debts except for the ones associated with the company in Belgium (Scanfil NV)
• Scanfil plc will retain: – the building it owns – Scanfil NV’s shares, the company has no production operations – assets that are not related to the actual business, mainly financing assets/equity
Property/assets to transfer
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Next three slides show, how the balance sheet of Scanfil plc and Scanfil EMS Oy would look like, if the business transfer was executed on the basis of 31 December 2007 figures.
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Balance sheet, EUR 1000
Figures are as an example
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Balance sheet, EUR 1000
Figures are as an example
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
Balance sheet, EUR 1000
Figures are as an example
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
• A tax neutral business transfer requires the transfer of assets, debts and
reserves according to business tax law. The business entity must transfer all
the above mentioned items in the business transfer to the continuing company
at a value of the receiving company’s new share issue of bookkeeping value.
• Scanfil EMS Oy makes a share issue directed for Scanfil Oyj
• The share subscription price is the difference of the transferred assets and
debts.
• If the business transfer would be realized based on the balance sheet of Dec
31, 2007, the share issue of the subsidiary would be about 87 million euros.
Share issue of the subsidiary
S o l u t i o n s f o r T e l e c o m m u n i c a t i o n s & I n d u s t r i a l E l e c t r o n i c s 3.4.2008
• After the business transfer, Scanfil EMS Oy’s balance sheet will be too ”strong”, the equity ratio will be over 80%
• The targeted equity ratio is about 40 %
• Lightening of the balance sheet can be realized by having Scanfil EMS Oy return/refund the invested capital to Scanfil Oyj by reducing equity or reducing the ”free” equity fund according to the corporate law.
• It will be possible to refund the capital during 2009
Scanfil EMS Oy’s equity