VTI Technologies Oy's consolidated financial statements for 2009


VTI Technologies is the global market leader in low-g acceleration sensors for automotive industry applications and cardiac rhythm management. VTI is also strong in various instrument applications and is successfully building its business in new consumer related applications.

The company's sensor design and production are based on 3D MEMS (Micro Electro-Mechanical Systems) technology that enables a wide range of cost effective high performance products and solutions. The objective is to increase market share substantially in applications for portable devices and instruments and to maintain the position of the leading supplier of low-g acceleration sensors for the medical and automotive industries.

VTI’s strong position is based on solid technology competencies, understanding of customers’ needs and innovative products. Production is based on high quality processes in VTI's own and subcontractors’ facilities ensuring cost effective production in high volumes.  

The financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS).

Low demand continued in 2009 in automotive markets resulting in operating losses

Net sales decreased by 21 percent and totaled EUR 53.6 million (2008: EUR 67.6 million). Net sales for the biggest customer segment, Transportation, were EUR 44.0 million or 82% of consolidated net sales (2008: EUR 58.7 million and 87% of consolidated net sales). Net sales for the two other customer segments, Consumer Electronics and Customized Products, increased to EUR 9.6 million or 18% of consolidated net sales (2008: EUR 8.9 million and 13% of consolidated net sales).

The financial year ended with an operating loss of EUR -15.2 million (2008: EUR -3.0 million) representing -28 % of net sales (2008: -4%). The operating result included one-time items of EUR 9.6 million. The largest one-time items were EUR 7.9 million related to impairment of non-current assets and EUR 1.3 million related to rationalization measures. Operating result without one-time items was EUR -5.6 million. EBITDA was EUR 1.4 million (2008: EUR 5.9 million).

Business environment 

The global economic downturn also impacted the MEMS component markets in 2008 and 2009. According to Yole, a French market research company, the total market value has dropped by slightly below 7 billion dollars and is now close to the level of 2007. The drop has been significant especially in the automotive industry and some consumer products, such as inkjet printers. VTI has maintained its position as the largest company focusing solely on MEMS among the 30 largest global MEMS suppliers, and has even strengthened its market leadership position in the automotive industry and in cardiac rhythm management applications.

The most significant MEMS market, the four-billion-euro market of MEMS sensors, has not decreased in size, as the use of sensors has increased significantly in applications such as user interface terminals. The automotive industry has suffered from plummeting car sales and a focus on less expensive, less equipped models. However, this will change in the next few years as vehicle stability control (ESC) will become mandatory in new cars. This will happen in the end of 2011 within the EU, and in the beginning of 2012 in the USA, with Japan also considering similar regulation.

MEMS sensor applications are strongly emerging in consumer electronics in spite of the recession, and will have a significant impact on the growth of the total market in the coming years. In cooperation with a selected partner, VTI has invested in product development and additional production capacity, aiming towards a significant position also in the new application areas in consumer electronics.

According to estimates by Yole, the MEMS market will grow by approximately 18% in inertia sensors, and by up to 46% in RF MEMS (radio frequency MEMS), which is one of the new interesting application areas for VTI.

Sales to the automotive industry reached its bottom in summer 2009

The sales of the Transportation segment decreased by 25 percent compared to the previous year, and totaled EUR 44.0 million (2008: EUR 58.7 million). Due to the global economic recession, the global sales of new cars and light trucks continued to decrease in 2009, especially in the first half of the year. Government actions such as "cash for clunkers" improved the situation from mid-2009, and the second half of the year saw a significant increase in total demand.

The Transportation customer segment serves the automotive industry with motion sensors used in applications such as vehicle stability control (ESC), electronic parking brake (EPB), hill start assistance (HSA), anti-lock braking systems (ABS), electronically controlled suspension (ECS) and various alarm and control applications. VTI sensors are being used by a majority of automotive manufacturers and ESC is the main application of its products. The Transportation customer segment also provides solutions for other vehicle and utility machinery solutions. In November 2009, VTI introduced a new product in this area, measuring both acceleration and/or inclination, and angular rate (gyroscope). This new product family will have interesting applications in ESC and chassis stabilization, and also in areas such as navigation systems and 3-dimensional motion control.

The Transportation segment is expected to grow as the economy has stabilized. Future growth is mainly driven by increasing demand for vehicle stability control systems (ESC), since ESC is becoming mandatory for new vehicles in VTI's main market areas during 2011 and 2012, as well as by an increase in VTI's product offering in this segment.

Consumer Electronics and Customized Products customer segments’ share of consolidated net sales increased

The combined net sales of the Consumer Electronics and Customized Products customer segments increased 8% compared to the previous year and were EUR 9.6 million (2008: EUR 8.9 million).

The introduction of the world's smallest and lowest power consuming accelerometer CMA3000 in January 2009 did not yet have a substantial impact on the 2009 revenues of the Consumer Electronics segment, but its sales are expected to grow during 2010. In line with the new production strategy VTI signed an agreement with a supply chain partner on the manufacturing of products for the consumer electronics market. The new supply and distribution chain will be established during 2010.

The growth of the net sales of the Customized Products comes primarily from further strengthening of VTI's leading position as a supplier of accelerometers for cardiac rhythm management applications. In 2009, a number of new customer manufacturing pacemaker products entered volume production. In addition, the adoption of VTI's pressure sensors in medical applications progressed according to plan.

Profitability hit by lower sales and significant one-time costs

The operating result in 2009 showed a loss of EUR -15.2 million representing -28% of net sales (2008: EUR -3.0 million and -4% of net sales). Gross margin declined in 2009 to EUR 8.8 million representing
16% of net sales (2008: EUR 16.9 million and 25% of net sales). The weakening of the result was mainly due to decreased sales and the one-time costs related to restructuring measures. In 2009, one-time costs had a negative impact of EUR 9.6 million on the operating result.

Overhead costs increased to EUR 24.0 million (2008: EUR 19.9 million), while overhead costs excluding one-time items were EUR 16.2 million. Research and development activities continued on a high level, increasing R&D costs to EUR 8.5 million (2008: EUR 8.2 million). Capitalized research and development costs amounted to 3.0 million (2008: EUR 4.0 million). Sales and marketing expenses decreased to EUR 4.3 million (2008: EUR 6.2 million) mainly due to the new partnership strategy adopted in consumer electronics applications. Administrative expenses decreased to EUR 4.9 million from EUR 5.4 million in the previous year.

Non-recurring items

Non-recurring items have the following impact on the key lines of VTI’s 2009 income statement:

Income statement 2009

EUR million

Reported 2009 Non-recurring items Adjusted 2009
Net Sales 53.6   53.6

Gross Profit

8.8. -1.8 10.6
Operating Result -15.2 -9.6 -5.6
EBITDA 1.4 -1.7 3.1

Non-recurring items consist of one-time costs related to the downsizing of personnel in Finland, the decision to close down the Mexican operations in spring 2010 and impairments of non-current assets.

Working capital and investments

A new manufacturing strategy was approved by the Board of Directors in 2008. As a result, new consumer electronics products will be manufactured by a manufacturing partner with cost-efficient high volume capabilities. This will significantly reduce capital expenditure and enable VTI to balance production volumes with demand. The partner selection negotiations were completed in 2009 and the new manufacturing and supply chain will be implemented during 2010.

Capital expenditure in 2009 was EUR 8.0 million (2008: EUR 16.3 million). Capital expenditure included tangible investments of EUR 4.6 million (2008: EUR 10.8 million) mainly to increase the capacity of assembly lines for new products in Finland. Investments into intangible assets included capitalized development costs and other IP-related items totaling EUR 3.4 million (2008: EUR 5.5 million).

Cash flow weakened slightly but capital structure remained strong

Net cash flow from operating activities was EUR 1.3 million (2008: EUR 8.9 million) mainly due to the weak operating result. Cash based capital expenditure decreased substantially from the previous year and was EUR 8.0 million (2008: EUR 16.3 million).

VTI’s capital structure improved considerably due to the refinancing arrangements in 2009.  A subordinated loan of EUR 15 million was issued and a long term facilities agreement of EUR 32.1 million (of which EUR 18.6 million was withdrawn at the end of 2009) was entered. Gearing was 20% (2008: 37%) and equity ratio 61% (2008: 58%). Net interest-bearing liabilities decreased to EUR 15.1 million (2008: EUR 26.8 million).

Risk management

VTI’s business operations are currently highly driven by automotive industry's demand for low-g acceleration sensors. The Transportation customer segment accounted for 82% of consolidated net sales in 2009 (2008: 87%). In this segment, in which VTI is the market leader, it is also dependent on one major customer but is growing its business with other key customers in the industry.

The automotive industry is a fairly predictable business. Development cycles in both automotive and medical segments are relatively long, which increases the business visibility. The most important application area for VTI, vehicle stability control (ESC), will become mandatory in the EU area at the end of the year 2011, and in the United States from the beginning of 2012.

VTI is intensively developing its business in applications for portable devices as well as in medical and instrument applications. The growth in these application areas for motion and pressure sensors is already evident but the future development remains uncertain. These business risks are managed by intensive research and development work with selected partners as well as by optimal timing of product launches and investments in production capacity.

For high-technology companies like VTI, the protection of immaterial assets is essential. Immaterial assets are protected with patents and non-disclosure agreements.

Production risks are minimized by ensuring flexible production capabilities in different locations and production lines and by selecting the production partners. The most important raw materials in production are ASICs and silicon wafers as well as plastic packaging material for components. The aim is to reach long-term relationships with subcontractors and suppliers. Quality and price risks are minimized by ensuring that most materials have at least two suppliers. New partners are carefully selected and regularly monitored during the business relationship. The prices of energy and water also have an impact on VTI’s production costs. These risks are managed mainly by contractual arrangements or in some cases by derivative instruments.

Financial risks are mainly related to the fluctuation of currencies and mostly hedged using natural hedges. Also currency derivatives are used to a certain extent. VTI may be exposed to credit risks through its customers. That risk is monitored on a regular basis. Most customers have a strong credit rating and are located in countries with low political risks.   

Active product development continued

Research and development expenses in the 2009 income statement were EUR 8.5 million (2008: EUR 8.2 million). The capitalized amount in 2009 was EUR 3.0 million (2008: EUR 4.0 million). Gross R&D expenses (excluding impact of capitalized expenses) in 2009 were EUR 11.5 million (2008: EUR 12.2 million) representing 22 percent of net sales (2008: 18%).

New products and product versions were developed. The most important of them was the introduction of the world's smallest and least power consuming 3-axis accelerometer (CMA3000) in the beginning of 2009. CMA3000 is targeting motion measurement and control applications in portable consumer electronics. The wafer level packaging of the product removes the need for a plastic housing and makes it very small in size (2x2x0.9 mm). With its ultra-low power consumption it is ideal for continuous use in small battery powered devices, such as mobile phones, gaming devices and sports electronics.

In November 2009 VTI released a new family of gyro-accelerometer combo sensors for high performance industrial applications. Combining its market leading 3-axis accelerometer with a near tactical grade 1-axis gyro in the same robust package, VTI provides a higher level of performance in a smaller form factor. Target applications include Inertial Measurement Units (IMU's), chassis control and stabilization, motion analysis and control, as well as guidance and navigation systems. The new sensor product family is based on VTI's proprietary 3D MEMS manufacturing (micro-electronic-mechanical-system) technology which enables VTI to produce extremely robust, stable and low noise sensors.

Personnel decreased

VTI Group employed 527 full time employees at the end of 2009 (2008: 692 people). The total number of personnel decreased by 165 people. Direct labor decreased by 90 people and salaried personnel by 75. At year-end, 385 people worked in Finland, 128 in Mexico, 6 in China, 4 in the US, 2 in Germany and 2 in Japan. The average number of personnel was 579 during the year (2008: 736).

Because of the economic downturn, the downsizing of personnel continued in early 2009 when co-determination negotiations were held in Finland to reduce the cost base of the operations. The production transfer from Mexico to Finland was partly made in 2009 and the number of personnel in Mexico decreased by 74 people. The production transfer will be finalized during the first half of 2010, which will lead to closing down of the Mexican operations.

Improvement in the production outlook towards the end of 2009 has slightly increased the number of personnel in Finland.

Environment and sustainability

VTI has been operating according to the environmental standard ISO14001 since 2001. Currently the production facilities in both Finland and Mexico are certified to ISO14001:2004. The company has an
extensive environmental program with various development projects aiming at eliminating harmful effects to the environment: reducing waste, decreasing material and water consumption, recycling packaging materials, promoting the safe use of chemicals and adopting new environmental regulations. Compatibility to ELV, WEEE and RoHS directives is taken into account in all operations.

Changes in the Group structure

The Consumer Electronics business in the parent company was incorporated into a separate company, VTI Consumer Electronics Oy, at the end of the year 2009. VTI Consumer Electronics Oy is 100% owned by the parent company.

Shares and shareholders

VTI's largest shareholder is Northern Star Luxembourg S.à.r.l., which is indirectly owned by EQT III Private Equity Fund, previously VTI’s largest shareholder.

Board of Directors and management

The Annual General Meeting elected the following persons to the Board of Directors of VTI Technologies Oy: Peter Grafoner, Kurt Hellström, Raimo Puntala and Christian Sinding. Peter Grafoner was elected as Chairman of the Board and Joonas Kettunen as deputy member.

The resignations of Kurt Hellström and Joonas Kettunen were noticed in the Extraordinary General Meeting on 13 May 2009 and Vesa Koskinen was elected as new deputy member of the Board of Directors.

Thomas Ramsay and Torben Ballegaard Sørensen were elected as new members of the Board of Directors in the Extraordinary General Meeting on 12 August 2009.

The resignation of Christian Sinding came into effect on 13 August 2009.

The President and CEO is Markku Hirvonen.


The Annual General Meeting appointed PricewaterhouseCoopers Oy as the auditor of VTI Technologies Oy for the financial year 2009. Kari Lydman, Authorized Public Accountant, is the responsible auditor.

Board of Directors’ proposal for profit distribution

At the end of 2009, the shareholders‘ equity for VTI Group was EUR 75.5 million and that of VTI Technologies Oy, the parent company, EUR 65.0 million.

The parent company's distributable funds at the end of the year were EUR 64,452,138.55 of which the net profit of the period was EUR 12,940,081.48. The parent company's financial statements are based on Finnish Accounting Standards (FAS). The most notable difference between FAS and IFRS is that goodwill is amortized under FAS, which weakens the result of the parent company.

The Board of Directors proposes to the Annual General Meeting that no dividends are distributed and that the parent company's net profit of 12,940,081.48 euros for the financial year 2009 will be carried forward to retained earnings.   

Vantaa, 9 March 2010

VTI Technologies Oy
Board of Directors


Further information:

Mirja Lammi, CFO, VTI Technologies Oy, mirja [dot] lammi [at] vti [dot] fi, tel. +358 9 8791 8221

VTI in Brief

VTI Technologies is a leading supplier of acceleration, inclination, motion and pressure sensor solutions for automotive, medical, instrument and consumer applications. VTI develops and produces silicon-based capacitive sensors using its proprietary 3D MEMS (Micro Electro-Mechanical System) technology.


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