A year of adjustments and preparingthe ground for the futureFor the foundry business, 2012 proved to be a year of transition.Demand in the first four months was particularly low. After theslow first third of the year, demand grew month by month, and volumesat the end of the year were at satisfactory level. Due to theweak start to the year, our annual revenues were down almost 20%compared to the previous year. The low volume also had an irreparableimpact on profitability for the year, which was significantlyweaker than in 2011.The business environment during the year under review can bedescribed as extremely unstable and difficult to predict. The uncertaintycaused by the global economic situation was very apparent,and customer orders were at a record low level.In our main segment, telecommunications network components,demand was satisfactory with the exception of the first fourmonths of the year. Most of the production in this segment wasagain manufactured in our Chinese plant. However, it was plain tosee that delivery time is an increasingly important factor for customerswhen selecting their suppliers. In the future, the location ofsuppliers on different continents, close to their end customers, willbe an important competitive factor.The geographic focus of demand in the telecommunications networkcomponents segment was for the most part as anticipated.Demand in the Indian domestic market did not pick up in 2012 asexpected. One of the main reasons for the low level of telecommunicationsnetwork investments in India is thought to be the internalpolitical problems related to frequency auctions. Due to the unstableeconomic situation in India, the country’s commercial vehicle industryalso experienced major difficulties, particularly in the lastquarter of 2012.Demand within the telecommunications network componentssegment in 2013 is expected to grow slightly in terms of volumesand to be spread out more evenly throughout the year. We expectthe more stable demand to have a positive impact on profitabilityin 2013. Demand will also be distributed more evenly between Asiaand Europe with production in Europe increasing significantly. Theimportance of India as a manufacturing centre will diminish, whichwill create challenges for the profitability development of our Indianunit.In the mechatronics segment (mechanical engineering, electricalengineering and commercial vehicle industries), volumes increasedsatisfactorily during the year under review. Particularly encouragingwas the growth in demand for our sand cast components,which was also reflected in a clear improvement in the profitabilityof our manufacturing units.In 2012 Alteams succeeded in its strategy in deepening thecooperation with customers, covering everything from the supportin product and manufacturability design to prototypes and massproduction. This was realised in both the telecommunications networkcomponents segment and to an increasing degree also in themechatronics segment. Several new customers in the mechatronicssegment will balance our customer base in the future. In accordancewith our strategy, we will focus on advanced and demanding productsand discontinue certain low value-added customer relationships.A major factor for our business operations in general in 2013 willbe the global economic situation and particularly the performanceof the euro, US dollar and Chinese yuan in comparison to eachother. The unpredictable currency markets may influence the geographicdistribution of customer demand.In 2013 we will focus strongly on strengthening our global position,especially within Europe, and on increasing the number ofnew customer relationships in the mechatronics segment close toour current manufacturing units. As the general uncertainty in theglobal economy and markets remains considerable, 2013 will call forflexibility and the ability to respond rapidly to changes. Alteams isnevertheless more prepared, more motivated and more capable oftackling the challenges.Asko NevalaCEO, Alteams Oy6 REPORT OF THE BOARD OF DIRECTORS 2012
REPORT OF THE BOARD OF DIRECTORS 20127
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