Valmet Automotive made a significant improvement in profitability in 2018 and the company also continued strong growth in sales. The growth driver was the record high car production volume at the Uusikaupunki, Finland plant.
Sales grew 20 % and profitability improved significantly
Valmet Automotive increased sales in 2018, with the consolidated sales of EUR 662.6 million representing a growth of 20 % from 2017. The company also succeeded in improving its profitability. Consequently, Valmet Automotive’s operating profit was EUR 17.8 million, 3 % of net sales (operating loss EUR -22.9 million, or -4 % of net sales in 2017). The 2017 operating loss was burdened by some EUR 10 million of non-recurring expenses due to restructuring of the German engineering business, while there were no non-recurring expenses in 2018.
The improvement in profitability was mainly due to volume growth and improved operational performance in vehicle manufacturing. In addition, the other business lines (Engineering Services, Roof & Kinematic Systems) continued to progress and in 2019 Valmet Automotive intends to commence operations in yet another business line – EV Systems, focusing on battery solutions. Investments continued on a high level in 2018. Significant investments were made in the Mercedes-Benz A-Class production as well as to increase the overall capacity of the Uusikaupunki, Finland plant.
Production volume record of 110,000 cars
– 2018 was a year of continued growth and improved profitability for us. The year saw the production launch of the new Mercedes-Benz A-Class, completion of the 100,000th Mercedes-Benz GLC, appointment of the new CEO and the 50th company anniversary. Furthermore, in 2018, the car production achieved the record volume of 110,000 cars. Valmet Automotive has made the passenger car a leading Finnish export product, says Jarkko Sairanen, Chairman of the Board, Valmet Automotive.
Positive outlook for 2019
– In 2018, Valmet Automotive improved its operational performance and maintained a strong market position. Founded in 1968, Valmet Automotive has developed into a leading premium vehicle manufacturer, and now we are actively expanding into engineering services, solutions of future e-mobility, and convertible roof and kinematic systems. We expect strong operational performance and financial results to continue in Uusikaupunki, Finland plant and we look forward to establishing automotive battery pack volume production in Salo, Finland and are committed to making the required investments for the expansion of our electric vehicle battery solution business. Our most important asset is the highly skilled, agile and innovative personnel, who made the great achievements of 2018 possible. For all this, I thank warmly all Valmet Automotive employees, says Olaf Bongwald, CEO, Valmet Automotive.
The company prepares its financial statements in accordance with International Financial Reporting Standards (IFRS) and the company is applying new accounting standard of IFRS 15 (revenue from contracts with customers) as of January 1, 2018 and the financial statements have been accordingly retroactively restated for 2017. The transition impact of applying IFRS 15 standard into the equity was negative EUR 14 million at end of 2017. The IFRS 15 negative transition impact to equity mainly relates to vehicle manufacturing which defers the recognition of some revenue and related profit. The negative impact will be recognized as profit over the future financial years. The IFRS 15 also had an impact on Valmet Automotive’s operating profit. Operating profit excluding IFRS 15 was EUR 14.8 million in 2018 (EUR 17.8 million including IFRS 15) and EUR -20.2 million in 2017 (EUR -22.9 million including IFRS 15).
Valmet Automotive’s consolidated financial statements are available at the company website.
Juha Torniainen, CFO, Valmet Automotive
+358 40 570 8871
Valmet Automotive is an experienced provider of automotive engineering, vehicle manufacturing, EV and convertible roof systems. Our special areas of expertise are premium cars, electric vehicles and convertibles. We employ 6,000 professionals in Finland, Germany, Poland and Spain.