PONSSE’S FINANCIAL STATEMENTS FOR 1 JANUARY – 31 DECEMBER 2014
Juho Nummela, President and CEO:
(February 17, 2015)
2014 was a very strong year for Ponsse. We succeeded excellently in our goal of finding balance in business operations between growth, profitability and cash flows. We achieved growth of approximately 25 per cent in net sales, operating profit of over 10 per cent and a reasonable cash flow from business operations, EUR 37.5 million. At the same time, our balance sheet indicators improved as expected.
The order books were strong already at the beginning of the year, and the demand for PONSSE forest machines continued to be very strong throughout the year, resulting in strong growth in order books. Our order books rose to record figures on several occasions amounting to EUR 158.4 million at year-end. The growth in the order books was 59 per cent year-on-year. At the same time, our factory was able to manufacture forest machines at full capacity with the volumes growing controlled continuously.
Of our market areas, Russia and North America were particularly strong. In spite of the very uncertain situation in Russia, machine deliveries scheduled for the last months of the year were successfully made. The situation in North America continued to be excellent, and economic recovery in the United States is clearly reflected in activity of the customers. The European situation improved in several markets, with the markets in Finland, Germany, France and the Great Britain developing favourably, among others.
The growth in 2014 was strong. Of our business areas, new machine sales, used machine sales and maintenance services grew well. The share of exports amounted to 75 per cent (69) of net sales for the first time in the company´s history. The growth in maintenance services is related to the expanded machine fleet and to new business concepts in maintenance services. The company's cumulative net sales amounted to EUR 390.8 (312.8) million and operating profit was EUR 41.7 (22.5) million. Net sales increased by 25 per cent, while operating profit increased by 85 per cent compared with the comparable period. The operating profit equalled 10.7 (7.2) per cent of net sales for the period under review.
We are developing our company in a long-term manner. It is important to continuously reform our operations and products. We have increasingly invested in both fixed assets and R&D. Since 2010, we have invested approximately EUR 43 million in R&D, while our capital expenditure amounted to approximately EUR 63 million.
Ponsse´s product ranges are changing strongly. The PONSSE 2015 range was launched at the FinnMETKO fair in the fall 2014. The first harvester models in the new product range, PONSSE Scorpion and PONSSE Bear, entered serial production in 2014. The rest of the products in the new product range will enter serial production in phases during 2015. The ergonomics, serviceability and productivity of the machines have been developed and the design has been updated. At the same time, forest machines delivered in Europe will have new engines compliant with the EU Stage IV emission level meeting the new environment requirements
During the last three years, capital expenditure has focused on serving our customers better by developing the service network and factory functions. New service centres have been built in Finland to Jyväskylä, Rovaniemi and Seinäjoki. The investments in the factory have been related to the development of productivity. The expansion of the factory, which will be finished in early 2015, is related to expanding the facilities for frame and component manufacture and modernisation of production methods in boom manufacture. At the same time, we invested strongly in renewing the machinery at the factory. The aim of the investments is to support our ability to manufacture PONSSE forest machines in Finland.
Cash flow from business operations amounted to EUR 37.5 (38.5) million in the period under review. The capital temporarily tied up in inventories resulted from the strong growth impaired the cash flows. For example, new machines were still on their way to customers at the turn of the year. The inventory of used machines was at a normal level.
Our solvency continued its positive development. The company's equity ratio was 42.0 (36.5) per cent.