Vacon reduces its guidance for 2011

Vacon Plc, Stock Exchange Release, 12 December 2011 at 11.55 am (EET) Vacon reduces its guidance for 2011 and now estimates that revenues in 2011 will increase by 10-15% and the operating profit margin will be about 6-7%. Earnings per share are expected to decline from 2010. Previously Vacon estimated that revenues in 2011 would increase by 10-20% and the operating profit margin would rise from 2010. Earnings per share were expected to improve considerably from 2010. The weakening of Vacon's earnings in 2011 is influenced by two risks, and changes in the AC drive market. Firstly, one of Vacon's solar energy clients is still arranging financing to pay a major debt to Vacon that is past its due date. Vacon will continue actions to secure its receivables but prepares for possible credit losses. Secondly, legal proceedings are in progress at the subsidiary in China relating to the company's customs clearance procedures. Vacon has made in total a MEUR 10 provision related to these risks. The company has informed of the above mentioned risks already earlier in its interim reports. Additionally, reasons for revising the guidance are the weak order intake of renewable energy products during the second half of the year and the weakening of the demand for its motor control products during the fourth quarter. "The demand for wind power products in China started to decline already in June this year, and, for the time being, it has not shown any sign of recovery. Additionally, during the fourth quarter, the demand for motor control products has weakened. The reason for the weakened demand is in the prolongation and escalation of the European finance crisis. At the moment, it is particularly difficult to estimate how the markets will develop," Vesa Laisi, Vacon's President and CEO concludes. Vacon will initiate measures to save cost and to secure profitability in its global operations. Vacon maintains its long-term financial targets according to which the company's goal is to achieve revenues of EUR 500 million in 2014. Its long-term profitability target is an operating profit of 14% and a return on equity of more than 30%. Vacon Plc Further information: * Vesa Laisi, President and CEO, Vacon Plc, tel. +358 40 8371 510, email vesa.laisi(at) * Sebastian Linko, Director, Corporate Communications and Investor Relations, Vacon Plc, tel. +358 40 8371 634, email sebastian.linko(at) Vacon in brief: Vacon is driven by a passion to design, manufacture and sell only the best AC drives on the planet - and nothing else. AC drives can be used to control electric motors or to help generate power from renewable sources. Vacon has R&D and production units in Finland, the United States, China and Italy, and sales offices in 27 countries. In 2010, Vacon had revenues of EUR 338 million and globally employed 1,300 people. Vacon's shares (VAC1V) are listed and publicly traded on the Helsinki Stock Exchange. Driven by Drives, Distribution: NASDAQ OMX Helsinki Financial Supervisory Authority Main Media This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Vacon Oyj via Thomson Reuters ONE [HUG#1570525]