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
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%.
* Vesa Laisi, President and CEO, Vacon Plc, tel. +358 40Â 8371 510, email
* Sebastian Linko, Director, Corporate Communications and Investor Relations,
Vacon Plc, tel. +358 40 8371 634, email sebastian.linko(at)vacon.com
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, www.vacon.com
NASDAQ OMX Helsinki
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Source: Vacon Oyj via Thomson Reuters ONE