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DETECTION TECHNOLOGY PLC INTERIM REPORT JANUARY-SEPTEMBER 2015

DETECTION TECHNOLOGY PLC INTERIM REPORT JANUARY-SEPTEMBER 2015  

Detection Technology Plc        Company Announcement   29 October 2015 at 9.00 a.m. local time

DETECTION TECHNOLOGY INTERIM REPORT JANUARY-SEPTEMBER 2015

This release is a summary of Detection Technology’s Interim Report January-September 2015. The complete report is attached to this release as a pdf-file and can also be found on the company website www.deetee.com/investors/financial-information.html

THIRD QUARTER 2015 HIGHLIGHTS

  • Net sales amounted to EUR 9.31 million (8.71), a growth of 7% (-4% at comparable exchange rates)
  • Operating profit (EBIT) excl. non-recurring costs (NRC) amounted to EUR 0.80 million (1.48)
  • Operating margin (EBIT %) excl. NRC was 8.6% of net sales (17.0)
  • NRC relating to DT’s new factory amounted to EUR 0.41 million. 2014 third quarter NRC totaled EUR 0.35 million
  • R&D costs totaled EUR 1.68 million (1.18), an increase of 43%
  • R&D 18.1% of net sales (13.5)
  • Operating profit (EBIT) amounted to EUR 0.39 million (1.13)
  • Operating margin (EBIT%) was 4.2% of net sales (13.0)
  • Earnings per share were -0.02 euros (0.10)

HIGHLIGHTS OF THE REVIEW PERIOD JANUARY-SEPTEMBER 2015

  • Net sales amounted to EUR 27.6 million (23.4), a growth of 18% (6% at comparable exchange rates)
  • Operating profit (EBIT) excl. NRC amounted to EUR 2.10 million (3.04)
  • Operating margin (EBIT%) excl. NRC was 7.6% of net sales (13.0)
  • NRC relating to DT’s new factory amounted to EUR 0.41 million. NRC for the review period 1-9/2014 amounted to EUR 0.65 million
  • R&D costs totaled EUR 4.34 million (2.94), an increase of 47%.
  • R&D 15.7% (12.6) of net sales
  • Operating profit (EBIT) amounted to EUR 1.70 million (2.39)
  • Operating margin (EBIT%) was 6.2% of net sales (10.2)
  • DT was listed on the Nasdaq First North Finland market place on March 16th
  • The result for the period was affected by non-recurring financial expenses of EUR 1.43 million related to the IPO
  • Earnings per share were -0.03 euros (0.17)

DETECTION TECHNOLOGY’S PROSPECTS FOR 2015 REFINED

Detection Technology’s sales outlook for 2015 is in accordance with its medium term target to increase sales by at least 15% per annum.

The total capital expenditure related to the new factory in Beijing, China and other investments are estimated to amount to EUR 4.5- 5.0 million in 2015. Non-recurring costs relating to setting up the new factory in Beijing are estimated to be close to EUR 1.0 million in 2015. R&D costs for 2015 are expected to be approximately 15% of net sales, thanks to new long-term customer projects won during the second part of 2015.

DT’s profitability is developing in accordance with its medium term target.

PRESIDENT AND CEO, HANNU MARTOLA:

IMPORTANT NEW CUSTOMER PROJECTS WON – INCREASED R&D SPENDING IN 2015

” I am pleased with DT’s development during the third quarter. MBU secured new projects within its current customer base and we were successful in winning several new projects from important security customers in the US and Europe.

During the quarter we received new long-term customer projects within security CT, a technology where we see interesting potential also going forward as EU aviation security regulation is becoming more stringent. The new long-term projects will contribute to DT’s mid- and long-term growth and profitability.

The factory move affected quarterly sales temporarily as some deliveries were shifted from September to October. All in all, I am very pleased because setting up the new factory is proceeding faster than expected and the ramp up of production is currently being finalized. 90% of our employees and manufacturing has been moved to the new site, which means that we will be able to close the old factory earlier than expected. This project has demanded substantial involvement from our organization during this year and we will start seeing the benefits from the new setup and focused efforts from the beginning of 2016.

The long-term customer projects won during the quarter require product development efforts in the initial phase. We are also currently putting focus on broadening the technology base and exploring new application opportunities. Consequently, DT’s R&D costs will remain at a higher than normal level throughout 2015.”

KEY FIGURES

(EUR 1 000) 7-9/2015 7-9/2014 Change 1-9/2015 1-9/2014 Change 1-12/2014
Net sales 9 305 8 710 7% 27 570 23 387 18% 33 112
Net sales growth 7% 1% 18% 9% 9%
Operating profit excl. NRC 799* 1 482 -46% 2 101* 3 043 -12% 4 127
Operating margin  excl. NRC 8.6% 17.0% 7.6% 13.0 % 12.5%
Non-Recurring Costs** 410 350 410 650 1 048
Operating profit (EBIT) 394 1 132 -65% 1 696 2 393 -29% 3 079
Operating margin (EBIT) 4.2% 13.0% 6.2% 10.2% 9.3%
R&D costs 1 681 1 178 43% 4 339 2 943 47% 4 121
R&D costs of net sales, % 18.1% 13,5% 15.7% 12.6% 12.4%
Cash flow from operating activities -663 861 -177% -2 722 995 -374% 3 085
Net interest bearing debt at end of period -5 187 10 156 -151% -5 187 9 542 -154% 8 678
Capital expenditure 463 199 133% 1 302 346 148% 1 280
Gearing, % -27% –1 194% -27% -1 194 % 654%
Earnings per share, EUR -0.02 0.66 -103% -0.03 1.14 -103% 1.45
Earnings per share diluted,  EUR -0.02 0.10 -0.03 0.17 -100% 0.21
Number of shares at the end of the period 12 950 975 1 900 195 12 950 975 1 900 195 1 900 195

*As of 2015 DT has made a change in the treatment of potential future warranty costs and makes a provision of 1.5% of net sales. The warranty provision affects the July-September 2015 operating profit by EUR 0.13 million and January-September 2015 operating profit by EUR 0.37 million.
** In 2015, NRC relates to the new factory setup. In 2014, DT recognized NRC relating to quality and NPI costs.  
The earnings per share information for 2014 figures was computed as if the shares issued in conjunction with the IPO had been outstanding for the entire comparison period.

Board of Directors

DETECTION TECHNOLOGY PLC.

For further information: President and CEO Hannu Martola will be available for questions between 9-11 EET.

Hannu Martola, President and CEO
+358 500 449475
hannu.martola@nulldeetee.com

Nordea is the company’s Certified Advisor under First North rules.

Detection Technology in brief
Detection Technology develops, produces, markets and sells components and systems for X-ray imaging solutions for medical, security and industrial applications. The Company operates from Espoo, Oulu, Beijing, Hong Kong and Boston. In 2014, Detection Technology’s net sales totaled EUR 33 million and the comparable operating profit margin was 12% (the reported operating profit margin being 9%). The company’s shares are listed on the Nasdaq First North Finland market place.

DISTRIBUTION:
NASDAQ OMX Helsinki
Key media
www.deetee.com

Attachments: Detection Technology Plc Interim report January-September 2015 (pdf)