SIEVI, FINLAND – Scanfil reported second quarter revenue of €172.9 million (US$202.9 million), up 11.1% year-over-year.

Net profit was €8.6 million, an increase of 3.6% compared to the second quarter of 2020. Operating profit was €10.6 million, 6.1% of revenue, an increase of 4.1%.

For the first six months of 2021, revenue was €336.2 million, growth of 12.2% year-over-year. Net profit was €16.2 million, up 2.5%. Operating profit was €20.6 million, 6.1% of revenue, an increase of 9.3%.

“The second quarter turnover was €172.9 million, an increase of 11% compared to the previous year,” said CEO Petteri Jokitalo. “Customer demand started to improve in the latter half of 2020, and this recovery strengthened further in the second quarter. Growth in demand was especially strong in the product groups concerning energy efficiency, indoor climate, automation, recycling and elevators.

“Turnover growth was organic, including €7.4 million of transitory separately agreed and low margin customer invoicing. This was related to the use of spot markets in materials and components, and special freights and intermediary trade. Turnover excluding these transitory invoiced items increased by €10 million, 6.4% compared to the previous year. The additional invoicing related to the existing exceptional situation will decrease when the shortage of components eases. Intermediary trade related to the divestment of the Hangzhou factory ended in the second quarter.

“The general price increase of materials and freights are compensated separately with each customer according to the valid contract terms and conditions and normal margin structure.

“The results for the quarter were €10.6 million, 6.1% of turnover and an increase of 4% compared to the previous year. Strong demand drove up the positive development of the profitability, especially in Eastern Europe, China and US factories. In contrast, the production transfer and planned closure of the Hamburg factory at the end of September created additional costs and weighed down profitability.

“Scanfil’s balance sheet is strong and enables all necessary investments, as well as the seizing of business opportunities. Strong turnover growth, challenges in the availability of certain materials, long delivery times as well as price increases enlarged our inventories and reduced our cash flow from operations. In the first half of 2021, the net cash flow from operations before investments and financial items was €7.1 (16.8) million. The equity ratio was at 50.2% and net gearing at 13%.

“We expect strong demand for the remainder of the year. Key risks are related to the availability of certain materials, such as semiconductors and steel, and the development of the Covid-19 situation. In particular, with regard to materials, circumstances are challenging and require constant attention and actions to secure customer deliveries. The situation with the pandemic has improved in our geographic areas of operations, and we have gradually started to reduce our preventative actions in our factories. Nevertheless, the situation might change rapidly, and we are conscious of the importance of active monitoring and fast response.

“In June, we raised the outlook for 2021, and we expect our turnover to be €630-680 million and operating profit €41-46 million.

“The year has been busy and eventful. Strong customer demand, challenges with material availability, the fight against Covid-19, and the Hamburg production transfer have required a lot from our staff. I want to thank our dedicated employees for a good job and our customers for their support and trust.”

Scanfil estimates 2021 revenue of €630 million to €680 million and adjusted operating profit of €4 million to €46 million.

Guidance involves uncertainty arising from the potential negative impact of the availability of certain materials, especially semiconductors, and the Covid-19 pandemic on customer demand and the delivery capability of the component supply chain.

In 2023, Scanfil is organically aiming for €700 million in revenue and 7% operating profit.

Ed.: €1 = US$1.17

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