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FINANCIAL STATEMENTS RELEASE 1 January - 31 December 2016 COMPONENTA FINANCIAL STATEMENTS RELEASE 1 JANUARY - 31 DECEMBER 2016 COMPONENTA VUOSIKERTOMUS 2015

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FINANCIAL STATEMENTS RELEASE 1 January - 31 December 2016 COMPONENTA FINANCIAL STATEMENTS RELEASE 1 JANUARY - 31 DECEMBER 2016 COMPONENTA VUOSIKERTOMUS 2015 FINANCIAL STATEMENTS RELEASE 1 January - 31 December 2016 COMPONENTA FINANCIAL STATEMENTS RELEASE 1 JANUARY - 31 DECEMBER 2016 COMPONENTA VUOSIKERTOMUS 2015 The net sales and operating profit of continued operations declined. The progress of the corporate restructuring process in Finland and Sweden will enable to restore profitability and future development. January - December 2016 in brief • On 1 September 2016 Componenta filed for its parent company • The adjusted result of continued operations after financial items Componenta Corporation and its subsidiaries in Finland and Sweden was -17.0 (MEUR -16.2) and the result of continued operations after for a corporate restructuring, and filed for bankruptcy for its Dutch financial items, including items affecting comparability, was MEUR subsidiary. The Turkish subsidiary is continuing its operations without -16.5 (MEUR -35.1). official proceedings. • The Group’s net result for the review period, including continued and • The company believes that, once approved and implemented, the discontinued operations, was MEUR -215.5 (MEUR -82.7) and basic corporate restructuring programs in Finland and Sweden will enable earnings per share were EUR -1.64 (EUR -0.86). the company’s operations to be brought back to profitability and • The order book of continued operations at the beginning of January developed in the longer term. was 2.0% down on the previous year, at MEUR 30.8 (MEUR 31.4). Com- • Because of the bankruptcy proceedings, the Company considers parable order book that corresponds current continued operations, that it has lost control over the sub-group in the Netherlands and for was EUR 29 million and comparable order book increased by 6%. this reason consolidation of the sub-group in the Group’s financial • Componenta believes that the corporate restructuring proceedings statements ended in the third quarter of 2016 and its operations have will proceed favourable and expects the net sales of continuing been classified as discontinued operations. Because of the restruc- operations to be MEUR 150-170 in 2017. The EBITDA without items turing proceedings at Componenta Corporation and shares given affecting comparability is expected to be MEUR 5-10. as security, the Company considers that it has lost control over the Turkish sub-group, and for this reason consolidation of the sub-group October - December 2016 in brief, in the Group’s financial statements ended on 31 December of 2016 continued operations and its operations have been classified as discontinued operations in • Comparable net sales, that corresponds current continued opera- Componenta’s consolidated financial statements of 31 December 2016. tions, decreased 2% and was MEUR 43.4 (MEUR 44.5). The figures for comparison have been adjusted accordingly. • Net sales declined 16.0% from the previous year to MEUR 44.2 (MEUR The Group’s current continued operations are the foundry operations • 52.7). in Pori and Karkkila, Finland, and in Sweden the machine shop in Adjusted EBITDA improved from the previous year to MEUR 1.1 Främmestad and the forging operations in Wirsbo and Arvika. • (MEUR -0.3). EBITDA including items affecting comparability was • Comparable net sales, that corresponds current continued operations, decreased 6% and was MEUR 166.8 (MEUR 177.9). MEUR -10.1 (MEUR -3.0). • The turnover of the continued operations dropped during the review • The effect of currency exchange rates on the EBITDA was MEUR -0.5 period, 12.6% lower than the previous year, and was EUR 183.6 million (MEUR 0.8). (EUR 210.1 million). • The adjusted operating profit was MEUR -0.8 (MEUR -2.2) and the • Adjusted EBITDA of continued operations declined from the previous operating profit of continued operations, including items affecting year, standing at MEUR 3.1 (MEUR 8.3). EBITDA including items affect- comparability, was MEUR -28.8 (MEUR -19.4). ing comparability was MEUR -16.1 (MEUR 3.9). • Adjusted result after financial items was MEUR -2.8 (MEUR -7.4) and • Profitability of continued operations in the review period was weak- the result after financial items, including items affecting comparabili- ened by lower production volumes than in the previous year, by ex- ty, was MEUR -33.5 (MEUR -24.6). change rate differences and stoppages in production caused by filings Items affecting comparability that had an impact on the result after for corporate restructuring and the tight liquidity situation. Exchange • financial items for the October-December period totalled MEUR -30.7 rate differences had an impact of MEUR -2.3 (MEUR 0.8) on EBITDA. • Adjusted operating profit of continued operations was down on the (MEUR -17.2). During the last quarter write-downs and impairments previous year, standing at MEUR -5.8 (MEUR 0.4). Operating profit of affecting comparability totalling around MEUR 25 were recorded. continued operations for the period, including items affecting com- • The net result for the October-December period, including discontin- parability, was MEUR -46.0 (MEUR -18.5). Around MEUR -30 of write- ued operations, was MEUR -194.9 (MEUR -73.6) and basic earnings downs and impairments affecting comparability were recorded. per share were EUR -1.15 (EUR -0.76). 2 COMPONENTA FINANCIAL STATEMENTS RELEASE 1 JANUARY - 31 DECEMBER 2016 President and CEO Harri Suutari comments on the review period and events after the end of period ”Componenta Group’s result in 2016 was extremely weak, mainly The sale of the Turkish subsidiary has been prepared by the main due to the tight liquidity that continued throughout the first part of local lenders, i.e. the club loan banks. In practice the banks have the year and ultimately in September resulted in Group companies acted to realize the shares without conducting the normal dis- filing for corporate restructuring in Finland and Sweden and in the cussions with the owner of the shares. Therefore we consider that Dutch subsidiary being declared bankrupt. we have lost control in the Turkish subsidiary, and the Turkish company is not being consolidated in the Group’s consolidated The difficulties related to liquidity had begun earlier and they balance sheet in the 2016 financial statements. hampered production, customer deliveries and new orders up until the filing for restructuring. Progress in the restructuring proceed- Successful completion of the corporate restructuring proceedings ings towards the end of the year still did not stimulate new sales, is essential for building the future. At the end of the year the although the financing to cover working capital requirements local district courts approved the restructuring proposals for previously agreed with major customers in Finland and Sweden Componenta Wirsbo AB and Componenta Arvika AB. A second significantly stabilised Componenta’s production and deliveries three month extension until the beginning of June was granted for and secured the liquidity during the final quarter. drafting the restructuring proposal for Componenta Främmestad AB, because reaching an agreement between Componenta Främ- Strategic reviews of business operations have been carried mestad AB and Componenta Dökümcülük Ticaret ve Sanayi A.S. out throughout the year at Componenta, resulting in corporate relating to extended payment terms of receivable of Componenta reorganisation aimed at focusing on core business. Several Dökümcülük Ticaret ve Sanayi A.S, is seen as a prerequisite for changes were implemented by the deadlines set; the largest of a viable composition proposal. In Finland the draft restructuring these were the sale of the Suomivalimo foundry in Iisalmi and of programs for Componenta Corporation and Componenta Finland the Pistons production unit in Pietarsaari. However the proceeds Oy were submitted to the local district court on 30 March 2017. from these divestments were very limited. The sale of the foundry and machine shop operations in Turkey, announced late last The 2016 financial statements of Componenta Group and the year, is still in process. The sale of the Swedish forging operations parent company have been drawn up on the basis of a going did not ended to acceptable industrial solution – instead, due to concern. There is still uncertainty concerning the success of the Wirsbo’s restructuring decision and the strong commitment restructuring proceedings and going concern.” of the customers, efforts will be made to keep them part of the Componenta Group. Dividend proposal On 31 December 2016 the distributable equity of the parent company was negative EUR -138.9 (58.1) million, so it is not possible to pay a dividend. Furthermore, the Restructuring of Enterprises Act forbids the payment of dividends to shareholders during restructuring proceedings. Componenta’s guidance for 2017 Because of the Company’s financial situation and the restructuring proceedings and structural reorganisation in progress, giving earnings guidance has been exceptionally difficult. Because of this Componenta has not given forecasts for its financial performance when commenting on prospects during 2016. As the result of progress in the restructuring proceedings and more stable liquidity in the business operations that are continuing, Componenta is starting again to disclose guidance for its result. The majority of the net sales comprises manufacturing of components to heavy trucks and machine building industries. In these segments European market looks stable for the current year. Componenta has remarkably decreased comparable fixed costs and improved productivity in continued operations. Componenta
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