Salcomp increase sales

Salcomp’s market share in mobile phone chargers declined slightly compared with the third quarter of 2006 and was approximately 22%. Operating profit increased to EUR 6.3 million (EUR 4.5 million) boosted by a higher gross margin than in the comparison period due to different product mix, as well as strict cost management. The operating profit percentage was 8.9% (6.7%). Cash flow from operating activities was EUR 1.5 million positive (EUR 2.1 million positive) mainly due to the favorable profit development. The cash flow was negatively affected by the EUR 6.4 million reduction in sold receivables during the third quarter. Without the decline in sold receivables the cash flow would have been EUR 7.9 million. Net sales increased by 12% in January– September 2007 to EUR 202.2 million (EUR 180.4 million in 1–9/2006). At the exchange rates of the previous year, the increase in net sales would have been 21%. The number of chargers sold increased by 12% to 180.8 million (160.9 million). The Group’s operating profit in January– September totaled EUR 17.5 million (EUR 8.8 million). In addition to the increase in net sales, a higher gross margin and continued cost management contributed to improved profitability. The operating profit percentage was 8.6% (4.9%). The Group’s net financial expenses were EUR 2.1 million (EUR 3.2 million). Financial expenses for the period were reduced by the lesser amount of net debt, EUR -8.9 million. Financial income increased as a result of the exchange rate differences of intra-group loans. Taxes for the period totaled EUR 3.0 million (EUR 2.6 million) and include a calculative item of EUR 2.2 million resulting from the parent company’s tax-deductible goodwill amortization. The calculative item does not affect the Group’s cash flow. In January–September 2007 the Group’s R&D expenditure was EUR 3.6 million (EUR 4.1 million), or 1.8% of net sales (2.3%). R&D focused on developing new products for present or new customers and on constantly improving the cost structure of existing products. Capital expenditure in January–September amounted to EUR 9.1 million (EUR 4.6 million). This mainly involved the finalization of the Indian plant as well as the capacity increase in the plants in India, China and Brazil. The first customer deliveries from the plant in Chennai were made in June and the plant was officially inaugurated in September.