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– Net sales amounted to EUR 143.1 (142.1) million.

– Operating result totalled EUR 12.9 (17.1) million, equalling 9.0 (12.0) per cent of net sales.

– Profit before taxes was EUR 13.2 (15.4) million.

– Cash flow from business operations was EUR 0.9 (19.3) million.

– Earnings per share were EUR 0.36 (0.42).

– Equity ratio was 53.5 (53.2) per cent.

– Order books stood at EUR 367.9 (173.8) million.


PRESIDENT AND CEO JUHO NUMMELA:

The demand for forest machines continued to be brisk during the past quarter, and the company’s order intake was excellent. Our order book continued to grow, and the value of the order book at the end of the period under review was as high as EUR 367.9 million.

The company’s net sales for the first quarter were EUR 143.1 (142.1) million. Some of the invoicing for new machines is postponed to the second quarter, which is result from production start for new product models and availability of components related to that. Net sales for the service businesses continued to grow impressively, and the busy work pace of our customers was clearly reflected in the growth of our service operations. Demand for trade-in machines was also excellent, and net sales for trade-in machines were at the same level as in the comparison period. International business operations accounted for 76.3 (73.9) per cent of net sales.

Profit for the past quarter amounted to EUR 12.9 (17.1) million. The operating result for the period under review was 9.0 (12.0) percent. Delays in invoicing together with increased costs had a negative impact on profitability during the quarter. Cash flow for the first quarter was EUR 0.9 (19.3) million.

The Vieremä factory and the manufacturing network surrounding Ponsse are working well. There are still risks related to the availability of components, but the availability should improve during the next few months. At the same time, challenges related to production start have been taken care of, and the machines will be available for delivery during the next quarter. Early this year, serial production has been started for the PONSSE K121 crane, the PONSSE Active Crane loader control and new engines conforming to the Stage V emission requirements within the EU area. In addition, production will be started later this year for PONSSE Cobra, our new harvester model and PONSSE Bison, our new forwarder model.


NET SALES

Consolidated net sales for the period under review amounted to EUR 143.1 (142.1) million, which is 0.7 per cent more than in the comparison period. International business operations accounted for 76.3 (73.9) per cent of net sales.

Net sales were regionally distributed as follows: Northern Europe 36.9 (41.3) per cent, Central and Southern Europe 22.4 (20.2) per cent, Russia and Asia 18.5 (19.5) per cent, North and South America 22.0 (18.0) per cent and other countries 0.2 (1.0) per cent.


PROFIT PERFORMANCE

The operating result amounted to EUR 12.9 (17.1) million. The operating result equalled 9.0 (12.0) per cent of net sales for the period under review. Consolidated return on capital employed (ROCE) stood at 19.8 (25.3) per cent.

Staff costs for the period totalled EUR 22.1 (20.3) million. Other operating expenses stood at EUR 14.2 (12.8) million. The net total of financial income and expenses amounted to EUR 0.4 (-1.7) million. Exchange rate gains and losses with a net effect of EUR 0.8 (-1.4) million were recognised under financial items for the period. Result for the period under review totalled EUR 10.2 (11.7) million. Diluted and undiluted earnings per share (EPS) came to EUR 0.36 (0.42).


STATEMENT OF FINANCIAL POSITION AND FINANCING ACTIVITIES

At the end of the period under review, the total consolidated statements of financial position amounted to EUR 404.9 (362.3) million. Inventories stood at EUR 150.5 (132.1) million. Trade receivables totalled EUR 40.9 (35.8) million, while liquid assets stood at EUR 45.9 (54.7) million. Group shareholders’ equity stood at EUR 211.8 (186.7) million and parent company shareholders’ equity (FAS) at EUR 192.1 (177.2) million. The amount of interest-bearing liabilities was EUR 70.4 (67.8) million. The company has used zero per cent of its credit facility limit. The parent company's net receivables from other Group companies stood at EUR 84.1 (84.0) million. The parent company’s receivables from subsidiaries mainly consisted of trade receivables. Consolidated net liabilities totalled EUR 24.4 (13.0) million, and the debt-equity ratio (net gearing) was 11.5 (6.9) per cent. The equity ratio stood at 53.5 (53.2) percent at the end of the period under review.

Cash flow from operating activities amounted to EUR 0.9 (19.3) million. Cash flow from investment activities came to EUR -5.5 (-6.5) million.


ORDER INTAKE AND ORDER BOOKS

Order intake for the period totalled EUR 222.8 (192.7) million, while period-end order books were valued at EUR 367.9 (173.8) million.


DISTRIBUTION NETWORK

The subsidiaries included in the Ponsse Group are Ponsse AB, Sweden; Ponsse AS, Norway; Ponssé S.A.S., France; Ponsse UK Ltd, the United Kingdom; Ponsse Machines Ireland Ltd, Ireland, Ponsse North America, Inc., the United States; Ponsse Latin America Ltda, Brazil; Ponsse Uruguay S.A., Uruguay; OOO Ponsse, Russia; Ponsse Asia-Pacific Ltd, Hong Kong; Ponsse China Ltd, China and Epec Oy, Finland. The Group includes also the property company Ponsse Centre, Russia. Sunit Oy, Finland, is an associate in which Ponsse Plc has a holding of 34 per cent.


R&D AND CAPITAL EXPENDITURE

Group’s R&D expenses during the period under review totalled EUR 4.8 (4.0) million, of which EUR 1.3 (0.9) million was capitalised.

Capital expenditure totalled EUR 5.6 (6.5) million. It consisted in addition to capitalised R&D expenses of investments in buildings and ordinary maintenance and replacement investments for machinery and equipment. Investments do not include EUR 3.5 million of right-of-use assets recognised on the balance sheet as a result of the new IFRS 16 “Leases” standard.


MANAGEMENT

The following persons were members of the Management Team: Juho Nummela, President and CEO, acting as the chairman; Petri Härkönen, CFO; Juha Inberg, Technology and R&D Director; Tapio Mertanen, Service Director; Paula Oksman, HR Director; Tommi Väänänen, Director of Delivery Chain Process and Jarmo Vidgrén, Deputy CEO, Sales and Marketing Director. The company management has regular management liability insurance.

The area director organisation of sales is led by Jarmo Vidgrén, the Group's sales and marketing director, and Tapio Mertanen, service director. Area directors report to Marko Mattila, Ponsse retail network manager. Managing directors of subsidiaries and Marko Mattila report to Jarmo Vidgrén, Ponsse Plc's sales and marketing director.

The geographical distribution and the responsible persons are presented below:
Northern Europe:
Jani Liukkonen (Finland),
Carl-Henrik Hammar (Sweden and Denmark),
Tarmo Saks (the Baltic countries) starting from 1 January 2019 and
Sigurd Skotte (Norway),

Central and Southern Europe:
Tuomo Moilanen (Germany and Austria),
Clément Puybaret (France),
Janne Tarvainen (Spain and Portugal),
Dean Robson (the United Kingdom),
Gary Glendinning (Ireland, Hungary, Romania, Slovenia, Croatia and Serbia) and
Tarmo Saks (Poland, Czech Republic and Slovakia) starting from 1 January 2019

Russia and Asia:
Jaakko Laurila (Russia and Belarus),
Janne Tarvainen (Australia and South Africa) and
Risto Kääriäinen (China and Japan),

North and South America:
Pekka Ruuskanen (the United States),
Eero Lukkarinen (Canada),
Fernando Campos (Brazil) and
Martin Toledo (Uruguay, Chile and Argentina).


PERSONNEL

The Group had an average staff of 1,729 (1,573) during the period and employed 1,750 (1,589) people at period-end.


SHARE PERFORMANCE

The company’s registered share capital consists of 28,000,000 shares. The trading volume of Ponsse Plc shares for 1 January – 31 March 2019 totalled 334,913, accounting for 1.2 per cent of the total number of shares. Share turnover amounted to EUR 9.3 million, with the period’s lowest and highest share prices amounting to EUR 24.80 and EUR 29.50, respectively.

At the end of the period, shares closed at EUR 29.10, and market capitalisation totalled EUR 814.8 million.

At the end of the period under review, the company held no treasury shares.


ANNUAL GENERAL MEETING

A separate release was issued on 3 April 2019 regarding the authorizations given to the Board of Directors and other resolutions at the AGM.


GOVERNANCE

In its decision-making and administration, the company observes the Finnish Limited Liability Companies Act, other regulations governing publicly listed companies and the company’s Articles of Association. The company’s Board of Directors has adopted the Code of Governance that complies with the Finnish Corporate Governance Code approved by the Board of the Securities Market Association in 2015. The purpose of the code is to ensure that the company is professionally managed and that its business principles and practices are of a high ethical and professional standard.

The Code of Governance is available on Ponsse’s website in the Investors section.


RISK MANAGEMENT

Risk management is based on the company’s values, as well as strategic and financial objectives. Risk management aims to support the achievement of the objectives specified in the company’s strategy, as well as to ensure the financial development of the company and the continuity of its business.

Furthermore, risk management aims to identify, assess and monitor business-related risks which may influence the achievement of the company’s strategic and financial goals or the continuity of its business. Decisions on the necessary measures to anticipate risks and react to observed risks are made on the basis of this information.

Risk management is a part of regular daily business, and it is also included in the management system. Risk management is controlled by the risk management policy approved by the Board.

A risk is any event that may prevent the company from reaching its objectives or that threatens the continuity of business. On the other hand, a risk may also be a positive event, in which case the risk is treated as an opportunity. Each risk is assessed on the basis of its impact and probability. Methods of risk management include avoiding, mitigating and transferring risks. Risks can also be managed by controlling and minimising their impact.


SHORT-TERM RISK MANAGEMENT

The insecurity in the world economy may result in a decline in the demand for forest machines. The uncertainty may be increased by the volatility of developing countries’ foreign exchange markets. The geopolitical situation, in particular, will increase the uncertainty through financial market operations and sanctions. Changes taking place in the fiscal and customs legislation in countries to which Ponsse exports may hamper the company’s export trade or its profitability. The risks in the supplier network may cause problems in material availability.

The parent company monitors the changes in the Group’s internal and external trade receivables and the associated risk of impairment.

The key objective of the company’s financial risk management policy is to manage liquidity, interest and currency risks. The company ensures its liquidity through credit limit facilities agreed with a number of financial institutions. The effect of adverse changes in interest rates is minimised by utilising credit linked to different reference rates and by concluding interest rate swaps. The effects of currency rate fluctuations are mitigated through derivative contracts.


OUTLOOK FOR THE FUTURE

The Group's euro-denominated operating profit is expected to be slightly higher in 2019 than in 2018.

Ponsse’s updated and competitive product range and service solutions have had a significant impact on the company’s growth. The market situation has remained favourable. Availability of components will remain challenging during the first half of year 2019.

The trend of our investments will increasingly be in R&D and product technology and also developing the service network both in Finland and abroad. In Vieremä factory there will be focused in ramp-up of new products and increasing the capacity taking product quality and reliability into account.


PONSSE GROUP

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000)

      
  IFRSIFRSIFRS 
  1-3/191-3/181-12/18 
NET SALES143,085142,115612,435 
Increase (+)/decrease (-) in inventories of finished goods and work in progress19,3107,660-1,508 
Other operating income 5423242,768 
Raw materials and services -108,598-96,183-395,660 
Expenditure on employment-related benefits-22,052-20,270-85,289 
Depreciation and amortisation -5,185-3,751-15,836 
Other operating expenses -14,245-12,823-55,193 
OPERATING RESULT 12,85717,07161,717 
Share of results of associated companies-3825-77 
Financial income and expenses 423-1,694-5,317 
RESULT BEFORE TAXES13,24215,40356,324 
Income taxes -3,078-3,707-12,625 
NET RESULT FOR THE PERIOD 10,16411,69643,699 
      
OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE RESULT:    
Translation differences related to foreign units1,178-364-318 
     
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD11,34211,33243,381 
      
Diluted and undiluted earnings per share*0.360.421.56 
      
      


     

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000)

     
 IFRSIFRSIFRS 
ASSETS31 Mar 1931 Mar 1831 Dec 18 
NON-CURRENT ASSETS    
Intangible assets26,74323,53526,298 
Goodwill3,7963,8003,800 
Property, plant and equipment112,70297,699108,818 
Financial assets98103103 
Investments in associated companies506647545 
Non-current receivables2,3079282,447 
Deferred tax assets4,1302,7893,242 
TOTAL NON-CURRENT ASSETS150,281129,500145,252 
     
CURRENT ASSETS    
Inventories150,532132,118126,628 
Trade receivables40,82935,76943,379 
Income tax receivables4349891,423 
Other current receivables16,9519,21411,275 
Cash and cash equivalents45,90754,70951,105 
TOTAL CURRENT ASSETS254,653232,798233,811 
     
TOTAL ASSETS404,934362,299379,063 
     
SHAREHOLDERS’ EQUITY AND LIABILITIES    
SHAREHOLDERS’ EQUITY    
Share capital7,0007,0007,000 
Other reserves3,4622,4233,462 
Translation differences4,2051,5903,027 
Treasury shares0-3460 
Retained earnings197,108176,059186,667 
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS211,775186,725200,155 
     
NON-CURRENT LIABILITIES    
Interest-bearing liabilities47,01546,03245,651 
Deferred tax liabilities1,2245731,295 
Other non-current liabilities42512943 
TOTAL NON-CURRENT LIABILITIES48,66346,73446,990 
     
CURRENT LIABILITIES    
Interest-bearing liabilities23,35721,79523,920 
Provisions5,5025,0645,418 
Tax liabilities for the period1,5361,581808 
Trade creditors and other current liabilities114,101100,400101,773 
TOTAL CURRENT LIABILITIES144,496128,840131,919 
     
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES404,934362,299379,063 


CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000)

         
  IFRSIFRSIFRS 
  1-3/191-3/181-12/18 
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net result for the period 10,16411,69643,699 
Adjustments:     
Financial income and expenses -4231,6435,317 
Share of the result of associated companies38-2577 
Depreciation and amortisation 5,1853,75115,836 
Income taxes 3,0783,70712,625 
Other adjustments 636-61-3,368 
Cash flow before changes in working capital18,67920,71274,186 
      
Change in working capital:     
Change in trade receivables and other receivables-7,1207,034-111 
Change in inventories -23,904-9,816-4,326 
Change in trade creditors and other liabilities15,5836,9007,794 
Change in provisions for liabilities and charges84-705-351 
Interest received 7635244 
Interest paid -82-90-770 
Other financial items -256-637-2,458 
Income taxes paid -2,189-4,102-12,866 
NET CASH FLOWS FROM OPERATING ACTIVITIES (A)87019,33161,341 
      
CASH FLOWS USED IN INVESTING ACTIVITIES    
Investments in tangible and intangible assets-5,587-6,541-32,508 
Proceeds from sale of tangible and intangible assets7525675 
NET CASH FLOWS USED IN INVESTMENT ACTIVITIES (B)-5,512-6,515-31,833 
      
CASH FLOWS FROM FINANCING ACTIVITIES    
Acquisition of treasury shares00-93 
Withdrawal/Repayment of current loans-896-3801,851 
Repayment of non-current loans00-450 
Withdrawal/Repayment of finance lease liabilities-483-3422 
Change in non-current receivables53564970 
Dividends paid00-20,975 
NET CASH FLOWS FROM FINANCING ACTIVITIES (C)-1,326151-18,675 
      
Change in cash and cash equivalents (A+B+C)-5,96712,96610,834 
      
Cash and cash equivalents on 1 Jan 51,10542,59642,596 
Impact of exchange rate changes770-853-2,324 
Cash and cash equivalents on 31Mar/31 Dec45,90754,70951,105 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR 1,000)

A = Share capital      
B = Share premium and other reserves     
C = Translation differences      
D = Treasury shares     
E = Retained earnings
F = Total shareholders’ equity      
  
 EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS
 ABCDEF
SHAREHOLDERS’ EQUITY 1 JAN 20197,0003,4623,0270186,667200,155
Translation differences  1,178  1,178
Result for the period    10,16410,164
Total comprehensive income for the period  1,178 10,16411,342
Direct entries to retained earnings    278278
SHAREHOLDERS' EQUITY 31 MAR 20197,0003,4624,2050197,108211,775
       
       
SHAREHOLDERS’ EQUITY 1 JAN 20187,0002,452-183-346167,923176,846
Adjustment for previous periods *) -293,528 -3,525-26
SHAREHOLDERS’ EQUITY 1 JAN 20187,0002,4233,345-346164,398176,819
Translation differences  -364  -364
Result for the period    11,69611,696
Total comprehensive income for the period  -364 11,69611,332
Direct entries to retained earnings    -1,426-1,426
SHAREHOLDERS' EQUITY 31 MAR 20187,0002,4232,981-346174,668186,725
       



*) As a result of the new consolidation system, the company is now able to present, from the beginning of the financial year 2018, all exchange rate differences on equity in the translation difference. Exchange differences for previously accrued retained earnings are presented within the profits. The change has no effect on previously reported key figures.




 31 Mar 1931 Mar 1831 Dec 18 
1. LEASING COMMITMENTS (EUR 1,000)9611,3381,342 

2. CONTINGENT LIABILITIES (EUR 1,000)
31 Mar 1931 Mar 1831 Dec 18 
Responsibility of checking the VAT deductions made on real property investments 8,5214,7727,839 
Other commitments 874987 
TOTAL 8,6084,8217,926 

3. PROVISIONS (EUR 1,000)
 Guarantee provision  
1 Jan 2019  5,418  
Provisions added  413  
Provisions cancelled  -329  
31 Mar 2019  5,502  


KEY FIGURES AND RATIOS
  31 Mar 1931 Mar 1831 Dec 18
R&D expenditure, MEUR 4.84.017.5
Capital expenditure, MEUR 5.66.532.5
as % of net sales  3.94.65.3
Average number of employees  1,7291,5731,635
Order books, MEUR  367.9173.8294.9
Equity ratio, %  53.553.254.0
Diluted and undiluted earnings per share (EUR) 0.360.421.56
Equity per share (EUR)  7.566.677.15



FORMULAE FOR FINANCIAL INDICATORS

Return on capital employed, %:
Result before tax + financial expenses
---------------------------------------------------------------------------------------------------------------------
Shareholder´s equity + interest-bearing financial liabilities (average during the year) * 100

Average number of employees:
Average of the number of personnel at the end of each month. The calculation has been adjusted for part-time employees.

Net gearing, %:
Interest-bearing financial liabilities – cash and cash equivalents
-----------------------------------------------------------------------------------
Shareholders’ equity * 100

Equity ratio, %:
Shareholders’ equity + Non-controlling interests
------------------------------------------------------------------------
Balance sheet total - advance payments received * 100

Earnings per share:
Net result for the period - Non-controlling interests
-----------------------------------------------------------------------------------------------------------
Average number of shares during the accounting period, adjusted for share issues

Equity per share:
Shareholders’ equity
---------------------------------------------------------------------------------------------
Number of shares on the balance sheet date, adjusted for share issues


ORDER INTAKE (EUR million) 1-3/191-3/181-12/18
Ponsse Group 222.8192.7785.7



The stock exchange release for the interim report has been prepared observing the recognition and valuation principles of IFRS, but the requirements of IAS 34 have not been complied with. The same accounting principles were observed for the closing of the books as for the annual financial statements dated 31 December 2018, with the exception of the new standard introduced on 1 January 2019. This standard is IFRS 16, Leases.

As a result of the new IFRS 16 “Leases” standard, the Group recognised non-cancellable leases on the balance sheet. The Group made use of an easement allowed in the standard according to which short-term leases of assets with minor value do not need to be recognised on the balance sheet. For non-fixed-term leases, the Group only recognises on the balance sheet leases with a term of notice longer than 12 months that do not include a significant cancellation clause. At the end of the period under review, the right-of-use assets amounted to EUR 3.5 million, and they are included in the Property, Plant and Equipment section under the consolidated statements of financial position. Correspondingly, the non-current and current interest-bearing liabilities in the consolidated statements of financial position include EUR 3.5 million of lease liabilities. EUR 0.5 million of depreciation and financing expenses related to right-of-use assets were recognised in the result for the period under review. For the cash flow statement, application of the IFRS 16 standard increased the cash flow from business operations and decreased the financing by EUR 0.5 million. A simplified method has been used for the transition, and the comparison figures from the year preceding the transition have not been adjusted.

The above figures have not been audited.

The above figures have been rounded and may therefore differ from those given in the official financial statements.

This communication includes future-oriented statements that are based on the assumptions currently made by the company’s management and its current decisions and plans. Although the management believes that the future expectations are well founded, there is no certainty that these expectations will prove to be correct. This is why the results may significantly deviate from the assumptions included in the future-oriented statements as a result of, among other things, changes in the economy, markets, competitive conditions, legislation or currency exchange rates.


Vieremä, 16 April 2019

PONSSE PLC


Juho Nummela
President and CEO


FURTHER INFORMATION
Juho Nummela, President and CEO, tel. +358 400 495 690
Petri Härkönen, CFO, tel. +358 50 409 8362

DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
www.ponsse.com


Ponsse Plc is a company specialising in the sales, manufacture, servicing and technology of cut-to-length method forest machines and is driven by genuine interest in its customers and their business. Ponsse develops and manufactures sustainable and innovative harvesting solutions based on customers’ needs.

The company was established by forest machine entrepreneur Einari Vidgrén in 1970, and it has been a leader in timber harvesting solutions based on the cut-to-length method ever since. Ponsse is headquartered in Vieremä, Finland. The company’s shares are quoted on the NASDAQ OMX Nordic List.

Attachment

Ponsse is one of the world’s leading manufacturers of forest machines for the cut-to-length method, and its customer-oriented operations are still guided by the wishes and needs of forest machine entrepreneurs. Ponsse products cover the diverse requirements of efficient harvesting faced by machine entrepreneurs around the world. Tree species vary from old pine to eucalyptus, and the machines have to endure tropical heat and arctic cold, travel without destroying the terrain and briskly climb the steepest slopes.