HONG KONG--July 10, 2012: This announcement is made by Johnson Electric Holdings Limited ("Johnson Electric" or the "Company") (SEHK:179) on the business operations and selected unaudited financial information of the Company and its subsidiaries (the "Group") for the quarter ended 30th June 2012.
The Board of Directors (the "Board") of the Company considers the publication of quarterly performance updates to be consistent with international corporate disclosure best practice. The objective of this announcement is to improve transparency and to ensure that investors and potential investors receive equal access to the same information at the same time.
The Group's sales for the quarter ended 30th June 2012 were US$523 million, down US$43 million from the same quarter in the prior fiscal year mainly due to the nonrecurring effects of divesting a business at the end of July 2011, the insourcing of a distribution channel in April-May 2012 and currency effects year-on-year, especially the Euro.
Excluding these nonrecurring items and currency effects, sales compared to the same quarter in the prior fiscal year were as follows:
- Total Group increased by US$10 million or 1.9%
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By Region:
- Asia increased by 1.7%
- Europe declined by 0.6%
- Americas increased by 7.3%
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By Business:
- Automotive Products Group ("APG") increased by 7.7%
- Industry Products Group ("IPG") declined by 6.4%
- Other business declined by 7.9%
APG provides custom motors, actuators, switches and motion subsystems for critical automotive motion related functions. APG's sales for the quarter ended 30th June 2012 were US$325 million, down US$6 million from the same quarter in the prior fiscal year. This was mainly due to currency effects and the nonrecurring effect of insourcing a distribution channel.
Excluding these currency effects and nonrecurring items, APG's sales grew by US$24 million or 7.7% compared to the same quarter in the prior fiscal year. We benefited from the resurgence of the North American market as well as continued growth in China and other emerging markets where demand for luxury vehicles was particularly strong. In this market, Johnson Electric continued to gain market share due to its continued focus on supplying innovative automotive motion products to improve fuel efficiency, reduce emissions, and enhance passenger comfort and safety. In Europe, the economic downturn adversely affected sales.
IPG provides motion products and customized subsystems for multiple industries and applications including building automation and security, business machines, defence and aerospace, entertainment, food and beverage, home technologies, HVAC, industrial equipment, medical devices, personal care, power equipment and power tools. IPG's sales for the quarter ended 30th June 2012 were US$178 million, down US$16 million from the same quarter in the prior fiscal year.
Excluding currency effects and the nonrecurring effect of insourcing a distribution channel, IPG's sales declined by US$12 million or 6.4% compared to the same quarter in the prior fiscal year. Our strategic decision to focus on specific products and customers where our technology and solution capabilities are differentiated, led to our exit from some lower margin products, primarily in the second half of the last fiscal year. The trailing impact of this action adversely affected sales in the first quarter of this year.
The ongoing macro-economic factors in Europe adversely impacted sales in the first quarter of the current fiscal year. The near-term future is difficult to predict as the European situation continues to present uncertainties to the world economy. Conversely, the continued recovery in the US market and ongoing growth in Asia, especially China, are positive to our business. In the medium and longer term, Johnson Electric continues to pursue a strategy of providing innovative new products and reliable motion systems to make our customers successful, which we believe will also create value for our shareholders.