Okmetic Oyj Interim report 1 January - 30 September 2015: Good profitability and cash flow in slowing market

OKMETIC OYJ     INTERIM REPORT     22 OCTOBER 2015   AT 8.00 A.M.

OKMETIC OYJ INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2015: GOOD PROFITABILITY AND CASH FLOW IN SLOWING MARKET

JULY-SEPTEMBER IN BRIEF

• Net sales amounted to 20.8 (19.3) million euro, up 7.8 (5.9) %.
• Sensor wafer deliveries amounted to 13.0 (11.2) million euro, up 15.8 (4.3) %.
• Semiconductor wafer deliveries amounted to 7.9 (7.3) million euro, up 8.3 (-3.1) %.
• Operating profit was 3.5 (2.8) million euro, corresponding to 17.0% (14.3%) of net sales.
• Profit for the period was 2.7 (2.2) million euro.
• Basic earnings per share was 0.16 (0.13) euro.
• Net cash flow from operations amounted to 4.8 (3.6) million euro.

JANUARY-SEPTEMBER IN BRIEF

• Net sales amounted to 64.5 (55.4) million euro, up 16.4 (7.2) %.
• Sensor wafer deliveries amounted to 43.0 (34.2) million euro, up 25.7 (12.3) %.
• Semiconductor wafer deliveries amounted to 22.0 (20.5) million euro, up 7.0 (-3.8) %.
• Operating profit was 9.4 (4.8) million euro, corresponding to 14.5% (8.7%) of net sales.
• Profit for the period was 7.0 (3.7) million euro.
• Basic earnings per share was 0.42 (0.22) euro.
• Net cash flow from operations amounted to 9.3 (6.2) million euro.

Unless otherwise stated, figures in parenthesis refer to the corresponding period of the previous year.

SHORT-TERM OUTLOOK

Demand for semiconductors in 2015 is anticipated to remain flat or fall slightly from the previous year's level. The final quarter is expected to be weaker than the rest of the year. The decline in the value of the silicon wafer market is believed to have stopped. When measured in surface area, the market is at a record high.

Demand for Okmetic's sensor wafers and other special wafers included in the sensor wafer category is expected to maintain its sustained growth in 2015. These wafers have more stable demand and price level than semiconductor wafers, which are more sensitive to economic fluctuations and also come under greater price pressure. Demand was at its highest in the beginning of the year, and in line with the normal seasonal fluctuation, the last quarter of the year is expected to be weaker than the rest of the year.

FINANCIAL GUIDANCE FOR 2015

The company retains its existing guidance, according to which net sales and operating profit in 2015 are estimated to clearly exceed the level of 2014.

PRESIDENT KAI SEIKKU:

"Demand for silicon wafers slowed down in the third quarter. The value of the wafer business in comparable currencies remained close to the level of 2014. Okmetic's sensor wafer demand continued strong concerning both wafers used for sensor applications and other high value-added silicon wafers. Growth in the value of sensor wafer deliveries slowed in the third quarter, but was still at a good 15.8 percent level against the comparison period. In terms of net sales, the third quarter fell short of the previous two quarters. This is not in keeping with normal seasonal fluctuation and points to slowing growth in Okmetic's customer industries in the second half of the year.

The latest forecasts for the semiconductor market as a whole suggest that growth will level off in 2015 for the first time since 2012. At its worst, the demand for semiconductors is estimated to decline by approximately one percent, driven in particular by slowing sales in the PC and smart phone markets. For automotive and other industrial electronics applications, changes in demand are expected to be more moderate. The rest of the year is going to be a time of softer demand also for Okmetic, although the strongest fluctuations are taking place outside the company's target markets.

The value of deliveries saw strong growth both in the third quarter and in January-September in North America, which has regained its position as the biggest market area for Okmetic. The value of deliveries in Europe fell year-on-year, whereas Asia saw healthy growth in deliveries. Demand has been particularly brisk in North America on the back of new and bigger customer accounts, but the market area has also benefited from the strengthening of the US dollar over the course of the year.

In the third quarter, Okmetic's operating profit (17.0% of net sales) was at a very good level thanks to a favourable product mix and slightly lower cost level than in the previous quarters of 2015. As a result of the strong operating profit, net cash flow from operating activities (4.8 million euro) for the quarter exceeded that for the entire first half of the year.

Okmetic revised its long-term financial targets and customer segments in connection with the company's Capital Markets Day on 2 October. The new customer segments are Sensor wafers and Discrete&Analog wafers (D&A wafers). The Sensor wafer segment includes silicon wafers used for MEMS and other sensor applications. The D&A wafer segment consists of high resistivity wafers and high voltage SOI wafers currently included in Sensor wafer category as well as of other semiconductor wafers. The changes come into force from the beginning of 2016. The deliveries of high resistivity wafers used in RF applications have surged during this year, with continued growth expected in the next few years. The new revised customer segments better reflect the company's business dynamics and the kind of segmentation its customers use."

KEY FIGURES

1,000 euro	1 Jul- 30 Sep, 2015	1 Jul- 30 Sep, 2014	1 Jan- 30 Sep, 2015	1 Jan- 30 Sep, 2014	1 Jan- 31 Dec, 2014
Net sales	20,820	19,320	64,500	55,425	74,104
Operating profit before depreciation (EBITDA)	5,165	4,420	14,266	9,745	12,985
Operating profit	3,540	2,757	9,378	4,822	6,401
% of net sales	17.0	14.3	14.5	8.7	8.6
Profit for the period	2,665	2,219	7,044	3,749	4,832
Basic earnings per share, euro	0.16	0.13	0.42	0.22	0.29
Net cash flow from operating activities	4,761	3,644	9,317	6,209	12,478
Net interest-bearing liabilities	959	4,174	959	4,174	-1,110
Equity ratio, %	70.9	70.6	70.9	70.6	70.5
Average number of personnel during the period	406	379	397	371	370

MARKETS

Customer industries sensor and semiconductor industries

Sensor industry

In 2015, the sales value in the sensor industry is estimated to grow by 6-11 percent, and an annual growth rate of 7-17 percent is expected for the next few years. In terms of volume, sensor deliveries are likely to clearly rise to a record level in 2015. The sensor wafer sales have been spurred by the proliferation of mobile devices in particular. (IC Insights, IHS, Semico, Yole)  

Certain silicon-based microelectromechanical (MEMS) products within the sensor segment have higher sales growth than the others. As a result of the increasing amount of sensors in mobile devices, the demand for e.g. pressure sensors and microphones has surged. Silicon-On-Insulator (SOI) technology is increasingly used in the manufacture of these products, among others. Okmetic is a pioneering supplier of SOI wafers for the sensor industry.

Semiconductor industry

Sales in the semiconductor industry saw a decline in the third quarter of 2015. Semiconductor industry's sales for the first eight months of 2015 were, however, nearly four percent higher than in the corresponding period last year (SIA). The last quarter of the year is expected to be weaker than the rest of the year, and growth estimates for 2015 have been revised downwards. Growth of -1 to +2 percent in terms of value is forecast for 2015 (Gartner, IC Insights, VLSI, WSTS). Sales are estimated to be around 338 billion US dollars (Gartner) and volume growth approximately six percent (IC Insights). The market is slowing down as a result of seasonal fluctuations, exchange rate effects, stagnant smart phone and tablet markets as well as developments in world economy, and China in particular, that are affecting the automotive industry and consumption in general.

Silicon wafer market

According to the estimate published by SMG, the group of silicon wafer suppliers in SEMI (a global umbrella organisation for semiconductor materials and equipment industry), the surface area of silicon wafer shipments grew by eight percent in the first half of the year compared the corresponding period in 2014 were at a record-high level. According to the company's own estimate, the silicon wafer market reflects the seasonal fluctuations in the semiconductor market and declines slightly in the last quarter of the year. The decline in the market value measured in US dollars is estimated to have stopped. A growth of 1-3 percent in surface area is estimated for the silicon wafer market for the years 2015-2017 (SEMI).  

Key customer areas for Okmetic in the silicon wafer market

In line with its strategy, Okmetic seeks niches in the silicon wafer market, where growth exceeds market average and in which the company has special expertise. Okmetic supplies primarily 150 mm and 200 mm wafers.

The sensor/MEMS industry has been a key growth area for Okmetic for a long time. The use of sensors and their requirement level are expected to keep growing owing to proliferation of sensor applications in the automotive industry, industrial process control and in portable devices like smart phones, cameras, game consoles, and wearable electronics. In the future, a central growth driver for the sensor industry will be the Internet of Things, which will utilise sensor-produced data in communication between devices.

In the semiconductor market, Okmetic's growth areas include wafers for the production of discrete and power semiconductors as well as analog circuits. In these wafer markets, areas for growth include, among others, components used in the production of renewable energy, increasing automotive electronics, electric cars, portable consumer products, as well as different solutions related to power supply and efficiency improvement. Okmetic has launched new products for these areas.

SALES

In January-September, Okmetic's net sales amounted to 64.5 (55.4) million euro. Net sales grew by 16.4 (7.2) percent from the corresponding period last year, especially due to strong demand for sensor wafers and strengthening of US dollar. In the third quarter, net sales amounted to 20.8 (19.3) million euro and increased by 7.8 (5.9) percent from the corresponding period in 2014. Okmetic's market share remained stable in the product groups important to the company.

Silicon wafer net sales growth with comparable US dollar exchange rate was 3.4 percent in January-September and 0.7 percent in July-September.

As of 1 January 2015, Okmetic has reported the value of deliveries in euros instead of percentage shares. In addition, Other business is reported under semiconductor wafer deliveries. These reporting changes are explained more in detail in the interim report published on 29 April 2015.

As of financial year starting on 1 January 2016, the company will report the net sales of its new customer segments, Sensor wafers and Discrete&Analog wafers (D&A wafers), instead of value of deliveries.

Value of deliveries per customer area

1,000 euro	1 Jul- 30 Sep, 2015	1Jul- 30 Sep, 2014	1 Jan- 30 Sep, 2015	1Jan- 30 Sep, 2014	1Jan- 31 Dec, 2014
Sensor wafers 1)	12,998	11,225	43,040	34,231	46,119
Semiconductor wafers	7,878	7,272	21,984	20,537	27,001
Total	20,876	18,497	65,024	54,768	73,120

1) The category sensor wafers includes all high value-added special wafers.

Demand for sensor wafers continued at a good level in the third quarter. In January-September, the value of sensor wafer deliveries grew by 25.7 (12.3) percent from the comparison period last year. The continued growth in production and delivery volumes of the strategically important SOI wafers was particularly positive.

The value of semiconductor wafer deliveries grew by 7.0 (decreased by 3.8) percent in January-September from the comparison period last year.

Value of deliveries per market area

1,000 euro	1Jul- 30 Sep, 2015	1 Jul- 30 Sep, 2014	1 Jan- 30 Sep, 2015	1 Jan- 30 Sep, 2014	1 Jan- 31 Dec, 2014
North America	9,388	6,911	29,579	20,676	27,799
Europe	6,867	7,812	21,670	22,426	29,554
Asia	4,621	3,774	13,775	11,666	15,767
Total	20,876	18,497	65,024	54,768	73,120

Both in January-September and in July-September, the value of deliveries showed strong growth in North America. In Europe, the value of deliveries decreased compared to the figures in the corresponding period last year. In Asia, which is of strategic importance, demand continued to grow both in January-September and July-September.

PROFITABILITY

July-September

In July-September, Okmetic's operating profit amounted to 3.5 (2.8) million euro, corresponding to 17.0 (14.3) percent of net sales. The operating profit was improved by a lower cost level than in the previous quarters as well as a favourable product mix. Profit for the period was 2.7 (2.2) million euro. Basic earnings per share was 0.16 (0.13) euro. Diluted earnings per share was 0.16 (0.13) euro.

January-September

Okmetic's operating profit for January-September amounted to 9.4 (4.8) million euro, corresponding to 14.5 (8.7) percent of net sales. Operating profit was improved due to strong sales growth in sensor wafers and SOI wafers in particular, as well as strengthening of US dollar compared to euro. Profit for the period was 7.0 (3.7) million euro. Basic earnings per share was 0.42 (0.22) euro. Diluted earnings per share was 0.42 (0.22) euro.

FINANCING

The company's financial position is solid. In January-September, net cash flow from operations amounted to 9.3 (6.2) million euro.

The company's interest-bearing liabilities amounted to 11.9 (14.5) million euro on 30 September 2015. At the end of the period, cash and cash equivalents amounted to 10.9 (10.3) million euro. The company's net interest-bearing liabilities amounted to 1.0 (4.2) million euro on 30 September 2015. The company has ensured liquidity with credit facilities of 6.0 million euro. On 30 September 2015, the credit facilities were fully unused (as well as on 30 September 2014).

Return on equity was 14.7 (8.4) percent. Return on investment was 16.3 (9.1) percent. The company's equity ratio was 70.9 (70.6) percent. Equity per share amounted to 3.78 (3.69) euro.

CAPITAL EXPENDITURE

In January-September, capital expenditure amounted to 4.5 (2.5) million euro. The investments focused mainly on increasing capacity and capability of SOI and 200 mm wafers.

In May, the board of directors of Okmetic Oyj approved investments of 8.4 million euro in total in the Vantaa plant. The investments are targeted at the manufacture of 200 mm silicon wafers as well as production and capability of more advanced SOI wafers. The investments are scheduled for productional use during 2016. Okmetic published a stock exchange release concerning the investment decision on 28 May 2015.

PRODUCT DEVELOPMENT

In January-September, the company expensed 1.9 (1.8) million euro in product development projects, corresponding to 2.9 (3.2) percent of net sales. Product development costs have not been capitalised.

In January-September, focus areas in Okmetic's product development projects included process development of sophisticated C-SOI wafers, development of SOI products enabling new application areas and deployment of processes to improve productivity. The product development organisation was strengthened through recruitment of additional people for these projects.

PERSONNEL

Okmetic employed on average 397 (371) people in January-September. At the end of the period, Okmetic employed 384 (363) people, of which 336 worked in Finland, 42 in the US, five in Japan, and one in Hong Kong.

BUSINESS RISKS

There have been no significant changes in the company's near future risks and uncertainties. However, changes in macro economy may indirectly have an influence also on Okmetic's business.

Okmetic's business is confronted by risks, which may arise from the company's operations or changes in its operating environment. Risks that, if materialised, can have an adverse effect on the company's operations and valuation are described below.

Okmetic's silicon wafer sales are targeted at the sensor and semiconductor producers in the electronics industry. The demand for semiconductor wafers is sensitive to economic fluctuations, and changes in the market situation can be sudden and dramatic. The demand for sensor wafers is more stable. The proliferation of sensors in consumer electronics applications may, however, increase the susceptibility of this market too to economic fluctuations.

Okmetic has existing polysilicon purchasing obligations partly until 2016. Due to the purchasing obligations, the company's net working capital will remain at a high level relative to the size of the operation far into 2016.

Okmetic's share of the global silicon wafer market is around one percent, and market prices have a notable effect on the price development of the company's products. The company has considerable pricing power only with its own special products. The pricing of other wafers is largely based on global market price.

Okmetic operates globally, and therefore the company's business is affected by risks due to exchange rate fluctuations, consisting of cash flows from purchases and sales. A significant part of sales is conducted in US dollars. Despite hedging of the forecasted open currency position, the company remains exposed to exchange rate fluctuations.

Substantial volumes of electricity are used in Okmetic's production. Despite hedging, the company is exposed to fluctuations in the price of electricity.

SHARES AND SHAREHOLDERS

On 30 September 2015, Okmetic Oyj's paid-up share capital, as entered in the Finnish Trade Register, was 11,821,250.00 euro. The number of shares was 17,287,500. The shares have no nominal value attached. Each share entitles its holder to one vote at general meetings. The company has one class of shares. The company's shares are included in the Finnish book-entry securities system.

Major shareholders on 30 September 2015
	Shares, pcs	Share, %
Ilmarinen Mutual Pension Insurance Company	1,004,985	5.8
Ingman Finance Oy Ab	900,000	5.2
Mandatum Life Insurance Company Limited	800,000	4.6
The State Pension Fund	600,000	3.5
Nordea Nordic Small Cap Fund	566,207	3.3
Varma Mutual Pension Insurance Company	477,175	2.8
Okmetic Oyj	406,129	2.3
Etra-Invest Oy Ab	400,000	2.3
Investment fund Taaleritehdas Mikro Markka	229,456	1.3
Kaleva Mutual Insurance Company	212,700	1.2
Foreign investors and nominee accounts held by custodian banks	3,246,838	18.8
Other	8,444,010	48.8
Total	17,287,500	100.0

SHARE PRICE PERFORMANCE AND TRADING

A total of 4.2 (2.8) million shares were traded between 1 January and 30 September 2015, representing 24.5 (16.1) percent of the weighted average of share total of 17.3 (17.3) million during the period. The lowest quotation during the period was 4.80 (4.38 euro), the highest 7.70 (5.25) euro, and the average 6.34 (4.67) euro. The closing quotation of the period on 30 September 2015 was 7.08 (4.95) euro. At the end of the period, the market capitalisation amounted to 122.4 (85.6) million euro.

OWN SHARES AND DIRECTED SHARE ISSUES

According to the decision of the annual general meeting, Okmetic Oyj transferred a total of 10,634 own shares to the board members as payment of the annual remuneration on 20 May 2015.

At the end of the reporting period, Okmetic held 406,129 (416,763) own shares corresponding to approximately 2.3 (2.4) percent of all Okmetic shares and votes.

EVENTS AFTER THE INTERIM PERIOD

Okmetic announced of the revision of its customer segmentation as well as new long-term financial targets in its Capital Markets Day on 2 October 2015.

The company's new customer segments are Sensor wafers and Discrete&Analog (D&A wafers). The revised customer segmentation facilitates the company's positioning in the semiconductor industry's value chain and better reflects the company's business focus. The Sensor wafer segment includes silicon wafers used for MEMS and other sensor applications. The D&A wafer segment consists of high resistivity wafers and high voltage SOI wafers currently included in Sensor wafers as well as of other semiconductor wafers. As a result of these changes, Okmetic has two growing customer segments that are equal in size. New customer segmentation will be applied in financial reporting as of financial year starting on 1 January 2016. At the same time, the company will start reporting net sales of the two customer segments instead of the value of deliveries.     

Following the changes in customer segmentation, Okmetic's long-term financial targets change as well. As of financial year starting on 1 January 2016, they will be as follows:

• Organic growth of net sales 5-10 percent per annum (currently organic growth of sensor wafer business at 10 percent per annum or more)
• Operating profit 10-15 percent of net sales (currently operating profit 10 percent of net sales or more)

CONDENSED FINANCIAL STATEMENTS AND TABLES 1 JANUARY - 30 SEPTEMBER 2015 (unaudited)

ACCOUNTING POLICIES

These interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting.

In preparing these interim financial statements, Okmetic has followed the same accounting policies as in the financial statements for 2014 except for the effect of changes required by the adoption of certain new or revised standards and interpretations as of 1 January 2015, which have been described in financial statements 2014. The adoption of the new and revised standards and interpretations has not had an effect on the figures presented from the reporting period.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1,000 euro	1 Jul- 30 Sep, 2015	1 Jul- 30 Sep, 2014	1 Jan- 30 Sep, 2015	1 Jan- 30 Sep, 2014	1 Jan- 31 Dec, 2014
Net sales	20,820	19,320	64,500	55,425	74,104
Cost of sales	-14,451	-14,942	-46,763	-44,098	-58,909
Gross profit	6,369	4,378	17,737	11,327	15,195
Other income and expenses	-2,829	-1,621	-8,359	-6,505	-8,794
Operating profit	3,540	2,757	9,378	4,822	6,401
Financial income and expenses	-64	49	-214	-28	-350
Profit before tax	3,477	2,806	9,164	4,794	6,051
Income tax	-812	-587	-2,119	-1,045	-1,219
Profit for the period	2,665	2,219	7,044	3,749	4,832
Other comprehensive income:
Items that may be reclassified to profit or loss in subsequent periods
Cash flow hedges	3	16	-4	17	-11
Translation differences	-6	557	616	566	891
Other comprehensive income for the period, net of tax	-2	573	612	584	880
Total comprehensive income for the period	2,663	2,792	7,657	4,333	5,712
Profit for the period attributable to:
Equity holders of the parent company	2,665	2,219	7,044	3,749	4,832
Total comprehensive income attributable to:
Equity holders of the parent company	2,663	2,792	7,657	4,333	5,712
Basic earnings per share, euro	0.16	0.13	0.42	0.22	0.29
Diluted earnings per share, euro	0.16	0.13	0.42	0.22	0.29

CONDENSED CONSOLIDATED BALANCE SHEET

1,000 euro	30 Sep, 2015	30 Sep, 2014	31 Dec, 2014
Assets
Non-current assets
Property, plant and equipment	42,712	42,864	2,538
Intangible assets	411	740	657
Other receivables	525	732	794
Total non-current assets	43,648	44,335	43,990
Current assets
Inventories	18,750	17,748	17,890
Receivables	16,994	16,440	14,347
Cash and cash equivalents	10,938	10,279	14,436
Total current assets	46,682	44,467	46,672
Total assets	90,329	88,802	90,662
Equity and liabilities
Equity
Equity attributable to equity holders of the parent company
Share capital	11,821	11,821	11,821
Other equity	52,026	50,398	51,805
Total equity	63,847	62,219	63,627
Liabilities
Non-current liabilities	12,156	13,407	13,561
Current liabilities	14,327	13,175	13,475
Total liabilities	26,483	26,583	27,036
Total equity and liabilities	90,329	88,802	90,662

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

1,000 euro	1 Jan- 30 Sep, 2015	1 Jan- 30 Sep, 2014	1 Jan- 31 Dec, 2014
Cash flows from operating activities:
Profit before tax	9,164	4,794	6,051
Adjustments	5,307	4,399	6,494
Change in working capital	-3,817	-2,697	352
Financial items	-608	-357	-486
Tax paid	-729	70	67
Net cash from operating activities	9,317	6,209	12,478
Cash flows from investing activities:
Purchases of property, plant and equipment	-4,278	-3,335	-4,345
Proceeds from sale of property, plant and equipment	-	696	710
Net cash used in investing activities	-4,278	-2,639	-3,635
Cash flows from financing activities:
Proceeds from long-term borrowings	1,000	5,000	5,000
Proceeds from short-term borrowings	-	4,000	4,000
Payments of long-term borrowings	-2,000	-2,000	-3,000
Payments of short-term borrowings	-	-4,024	-4,024
Payments of finance lease liabilities	-475	-437	-595
Other items	-	36	36
Dividends paid	-7,592	-578	-578
Share issue	-	750	750
Acquisition of Okmetic Management Oy's share capital	-	-1,516	-1,539
Net cash used in financing activities	-9,067	1,230	50
Increase (+) / decrease (-) in cash and cash equivalents	-4,028	4,799	8,893
Exchange rate changes	530	266	329
Cash and cash equivalents at the beginning of the period	14,436	5,214	5,214
Cash and cash equivalents at the end of the period	10,938	10,279	14,436

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		Equity attributable to equity holders of parent company
1,000 euro	Share capital	Share premium	Reserve for invested unrestricted equity	Other reserves  1)	Retained earnings	Total
Balance at 31 Dec, 2014	11,821	20,045	753	2,636	28,372	63,627
Profit for the period					7,044	7,044
Other com- prehensive income, net of tax:
Cash flow hedges				-4		-4
Translation differences				616		616
Total com- prehensive income for the period				612	7,044	7,657
Share-based payments					155	155
Dividend distribution					-7,592	-7,592
Balance at 30 Sep, 2015	11,821	20,045	753	3,248	27,980	63,847
Balance at 31 Dec, 2013	11,821	20,045	3	1,756	23,647	57,273
Profit for the period					3,749	3,749
Other com- prehensive income, net of tax:
Cash flow hedges				17		17
Translation differences				566		566
Total com- prehensive income for the period				584	3,749	4,333
Share issue			750			750
Share-based payments					221	221
Acquisition of non- controlling interest					-357	-357
Balance at 30 Sep, 2014	11,821	20,045	753	2,339	27,260	62,219

1)"Other reserves" contains hedge reserve and translation differences.

Acquisition of shares of Okmetic Management Oy is treated as acquisition of non-controlling interest. Okmetic Management Oy was merged in the parent company on 30 November 2014.

CHANGES IN PROPERTY, PLANT AND EQUIPMENT

1,000 euro	1 Jan- 30 Sep, 2015	1 Jan- 30 Sep, 2014	1 Jan- 31 Dec, 2014
Carrying amount at the beginning of the period	42,538	45,295	45,295
Additions	4,548	2,465	3,627
Disposals	-	-501	-520
Depreciation	-4,613	-4,678	-6,257
Exchange differences	240	283	393
Carrying amount at the end of the period	42,712	42,864	42,538

COMMITMENTS AND CONTINGENCIES

1,000 euro	30 Sep, 2015	30 Sep, 2014	31 Dec, 2014
Loans, secured with collaterals	6,000	8,000	7,000
Collaterals	15,110	17,128	15,110
Off-balance sheet lease commitments	285	308	308
Capital commitments	7,979	1,902	2,689
Nominal values of derivative contracts
Currency options, call	1,091	226	1,193
Currency options, put	-	-	-
Currency forward agreements	3,956	1,631	3,979
Electricity derivatives	534	1,270	1,076
Fair values of derivative contracts
Currency options, call	30	0	6
Currency options, put	-	-	-
Currency forward agreements	-9	-77	-85
Electricity derivatives	-220	-205	-244

The contract price of the derivatives has been used as the nominal value of the underlying asset.

HIERARCHY LEVELS OF DERIVATIVE CONTRACTS MEASURED AT FAIR VALUE

1,000 euro	30 Sep, 2015				30 Sep, 2014
	Level 1	Level 2	Level 3		Level 1	Level 2	Level 3
Financial assets
Derivative financial instruments	-	60	-		13	0	-
Financial liabilities
Derivative financial instruments	220	39	-		218	77	-

Fair value estimation

The group's financial instruments that are measured at fair value comprise derivatives used for hedging and held for trading.

Fair values of level 1 instruments are based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Fair values of level 2 instruments are based on other data than quoted prices in active markets, but on the data from which the asset or liability is observable, either directly (i.e. price) or indirectly (i.e. derived from the prices).

Electricity derivatives are classified as level 1, currency derivatives as level 2.

Fair value determination

The fair values of electricity derivatives are based on quoted market prices. The fair values of currency forwards and options are determined on the basis of market and contract prices of the agreements at the reporting date by applying commonly used valuation techniques.

KEY FIGURES SHOWING FINANCIAL PERFORMANCE

1,000 euro	1 Jan- 30 Sep, 2015	1 Jan- 30 Sep, 2014	1 Jan- 31 Dec, 2014
Net sales	64,500	55,425	74,104
Change in net sales compared to the previous year's period, %	16.4	7.2	8.2
Export and foreign operations share of net sales, %	91.4	91.2	90.7
Operating profit before depreciation (EBITDA)	14,266	9,745	12,985
% of net sales	22.1	17.6	17.5
Operating profit	9,378	4,822	6,401
% of net sales	14.5	8.7	8.6
Profit before tax	9,164	4,794	6,051
% of net sales	14.2	8.6	8.2
Return on equity, %	14.7	8.4	8.0
Return on investment, %	16.3	9.1	8.7
Non-interest-bearing liabilities	14,586	12,129	13,710
Net interest-bearing liabilities	959	4,174	-1,110
Net gearing ratio, %	1.5	6.7	-1.7
Equity ratio, %	70.9	70.6	70.5
Capital expenditure	4,548	2,465	3,627
% of net sales	7.1	4.4	4.9
Depreciation	4,888	4,923	6,584
Research and development expenditure	1,889	1,801	2,472
% of net sales	2.9	3.2	3.3
Average number of personnel during the period	397	371	370
Personnel at the end of the period	384	363	367

KEY FIGURES PER SHARE

Euro	30 Sep, 2015	30 Sep, 2014	31 Dec, 2014
Basic earnings per share	0.42	0.22	0.29
Diluted earnings per share	0.42	0.22	0.29
Equity per share	3.78	3.69	3.77
Dividend per share 1)	-	-	0.45
Dividends/earnings, %	-	-	155.2
Effective dividend yield, %	-	-	9.3
Price/earnings(P/E)	-	-	16.8
Share performance (1 Jan-)
Average trading price	6.34	4.67	4.68
Lowest trading price	4.80	4.38	4.28
Highest trading price	7.70	5.25	5.25
Trading price at the end of the period	7.08	4.95	4.83
Market capitalisation at the end of the period, 1,000 euro	122,396	85,573	83,499
Trading volume (1 Jan-)
Trading volume, transactions, 1,000 pcs	4,231	2,784	3,778
In relation to weighted average number of shares, %	24.5	16.1	21.9
Trading volume, 1,000 euro	26,814	13,048	17,704
The weighted average number of shares during the period under review adjusted by the share issue, 1,000 pcs	17,288	17,288	17,288
The number of shares at the end of the period adjusted by the share issue, 1,000 pcs	17,288	17,288	17,288

When calculating equity per share, Okmetic's own shares and the Okmetic shares owned by Okmetic Management Oy are deducted from the total number of shares. Okmetic Management Oy was merged in the parent company on 30 November 2014.

1) The figure for 2014 contains the dividend distributed in January 2015, 0.30 euro per share and the dividend distributed in April 2015, 0.15 euro per share.
                     

QUARTERLY KEY FIGURES

1,000 euro	10-12/ 2015	7-9/ 2015	4-6/ 2015	1-3/ 2015
Net sales		20,820	22,068	21,612
Compared to previous quarter %		-5.7	2.1	15.7
Compared to corresponding   period last year, %		7.8	18.0	24.2
Operating profit		3,540	2,914	2,923
% of net sales		17.0	13.2	13.5
Profit before tax		3,477	2,906	2,781
% of net sales		16.7	13.2	12.9
Net cash flow generated from: Operating activities		4,761	3,660	896
Investing activities		-1,913	-625	-1,740
Financing activities		-1,159	-2,687	-5,221
Increase/decrease in cash and cash equivalents		1,688	348	-6,064
Personnel at the end of the period		384	426	375

1,000 euro	10-12/ 2014	7-9/ 2014	4-6/ 2014	1-3/ 2014
Net sales	18,679	19,320	18,700	17,405
Compared to previous quarter %	-3.3	3.3	7.4	3.4
Compared to corresponding   period last year, %	10.9	5.9	9.8	6.1
Operating profit	1,579	2,757	1,137	928
% of net sales	8.5	14.3	6.1	5.3
Profit before tax	1,257	2,806	1,096	892
% of net sales	6.7	14.5	5.9	5.1
Net cash flow generated from: Operating activities	6,270	3,644	1,932	632
Investing activities	-996	261	-1,263	-1,637
Financing activities	-1,180	-3,157	4,859	-472
Increase/decrease in cash and cash equivalents	4,093	748	5,528	-1,477
Personnel at the end of the period	367	363	393	354

DEFINITIONS OF KEY FINANCIAL FIGURES

Value of deliveries	=	Net sales excluding currency exchange rate differences in accounts receivable and including inventory shipped to customers on consignment during the period, for which no net sales are recognised at the time of shipping.
Operating profit before depreciation (EBITDA)	=	Operating profit + depreciation
Return on equity (ROE), %	=	Profit/loss for the period x 100/
		Equity(average for the period)
Return on investment (ROI), %	=	(Profit/loss before tax + interest and other financial expenses) x 100/
		Balance sheet total - non-interest bearing liabilities(average for the period)
Equity ratio, %	=	Equity x 100/
		Balance sheet total - advances received
Net interest-bearing liabilities	=	Interest-bearing liabilities - cash and cash equivalents
Net gearing ratio, %	=	(Interest-bearing liabilities - cash and cash equivalents) x 100/
		Equity
Earnings per share	=	Profit/loss for the period attributable to  equity holders of the parent company/
		Adjusted weighted average number of shares in issue during the period
Equity per share	=	Equity attributable to equity holders of the parent company/
		Adjusted number of shares at the end of the period

Dividend per share	=	Dividend for the period/
		Adjusted number of shares at the end of the period
Effective dividend yield, %	=	Dividend per share x 100/
		Trading price at the end of the period
Price/earnings ratio (P/E)	=	Last adjusted trading price at the end of the period/
		Earnings per share
Average trading price	=	Total traded amount in euro/
		Adjusted number of shares traded during the period
Market capitalisation at the end of the period	=	Number of shares at the end of the period x trading price at the end of the period
Trading volume	=	Number of shares traded during the period/
		Weighted average number of shares during the period

All figures of the financial tables are rounded, and consequently the sum of individual figures can deviate from the presented sum figure.

The future estimates and forecasts in this interim report are based on the company management's current knowledge. Actual events and results may differ from the estimates presented here.

INTERIM REPORT BRIEFING

A briefing for investors, analysts and media will take place today, Thursday 22 October at 8.30 a.m. in Helsinki Stock Exchange building, Fabianinkatu 14, Helsinki (2nd floor, entrance via Nasdaq's reception). The result will be presented by President Kai Seikku.

OKMETIC OYJ

Board of directors

For further information, please contact:

President Kai Seikku, Okmetic Oyj,
tel. +358 5028 0232, email: kai.seikku@okmetic.com

Senior Vice President, Finance, IT and Communications Juha Jaatinen, Okmetic Oyj,
tel. +358 9 5028 0286, email: juha.jaatinen@okmetic.com

Okmetic is a technology company which supplies tailor-made silicon wafers for sensor and semiconductor industries. Okmetic provides its customers with solutions that boost their competitiveness and profitability.

Okmetic's silicon wafers are part of a further processing chain that produces end products that improve human interaction and quality of life. Okmetic's products are based on high-tech expertise that generates added value for customers, innovative product development and an extremely efficient production process. 

Okmetic has a global customer base and sales network, production plants in Finland and the US and contract manufacturers in Japan and China.

Okmetic's shares are listed on Nasdaq Helsinki under the code OKM1V. For more information on the company, please visit our website at www.okmetic.com.

HUG#1960509