CEO’s review

Componenta Corporation’s Financial Statements Release 1 January–31 December 2024, 7 March 2025/ Sami Sivuranta, CEO:

“As a whole, the trend in 2024 was upward. The volume and order book development in the weak first quarter remained well below expectations. Especially this was due to the low level of demand in the agricultural machinery industry in Europe as a whole and the low level of the main raw materials and energy indices included in sales prices. During the first half of the year, during the low utilisation rate of our iron foundries, we ramped up serial production for volume products, which had a negative impact on production efficiency and quality level. Starting in the second quarter, our highquality production capability has improved through systematic measures, and our order book began to grow slightly. In the fourth quarter, the Group’s net sales and EBITDA improved from the comparison period for the second quarter in a row.

Volume and order book development as a whole remained at a lower level throughout the 2024 financial year than was expected in the beginning of the year. The full-year result was affected by market uncertainties, inflation levels and high interest rates, as a result of which our main customers’ own order books also developed more modestly than expected. For the majority of our customers, the actual growth prospects have moved cautiously optimistically into 2025.

Our profitability was somewhat burdened by industry salary decisions made in the first half of the year, which, in addition to other inflation, raised our costs markedly. Labour market disruptions and, in particular, repeated strikes, also burdened our profitability directly and indirectly throughout the year. We have actively adjusted our operations to meet the lower volume and order book levels. In addition, we implemented a change in pricing in response to our low order books and utilisation rates during the latter half of the year. The Group’s Service capability remained good throughout the year.

Our liquidity remained at a good level throughout the year. Inflation has stabilised at a moderate level, and the availability of raw materials, other materials and components is currently at a good level. We are actively monitoring market developments and ensuring that our own supply chains continue to work effectively. At the moment, there are no significant near-term risks in the availability of electricity, but the general price level of electricity involves uncertainties. Significant short-term price fluctuations and their management have become part of daily life in energy-intensive industries.

The first year of the three-year period of our updated strategy is now behind us. For example, we have strengthened the role of sustainability as one of our competitive advantages and prepared for future regulatory changes and reporting requirements. In addition to organic growth, one of our strategic goals is to grow through acquisitions, and related to this, we announced the acquisition of the Kalajoki and Sepänkylä businesses in July 2024. With the acquisition, our offering has been complemented by the manufacturing of demanding welded structures and strong technical expertise in welding. In the last quarter, we integrated these operations into Componenta.

In May 2024, we announced a significant transaction in the defence equipment industry. The Defence Forces exercised the option included in the transaction in the last quarter of the year. The impacts of the transaction were visible in the company’s operations during the rest of the year, and will continue to be reflected in the coming years. As a contract manufacturer, we will continue to pursue measures to strengthen our market position, and we are working to be the preferred sustainable total supplier to our customers, with a wide offering.”