Exel Composites Plc’s Half-Year Financial Report January–June 2018: “Adjusted operating profit continued to increase”

EXEL COMPOSITES PLC       HALF-YEAR FINANCIAL REPORT       24 JULY 2018 at 10:00 EET

Q2 2018 in brief

  •  Order intake increased by 7.0% to EUR 25.0 million (Q2 2017: 23.4).
  •  Revenue increased by 9.2% to EUR 25.3 million (23.2).
  •  Adjusted operating profit was EUR 2.0 million (1.7), representing 7.8% of revenue (7.4).
  •  Net cash flow from operating activities was EUR -1.1 million (0.9).
  •  Earnings per share amounted to EUR 0.09 (0.09).

H1 2018 in brief

  •  Order intake increased by 2.5% to EUR 47.0 million (H1 2017: 45.8).
  •  Revenue increased by 7.7% to EUR 46.8 million (43.4).
  •  Adjusted operating profit was EUR 3.8 million (3.4), representing 8.0% of revenue (7.8).
  •  Net cash flow from operating activities was EUR -1.3 million (0.1).
  •  Earnings per share amounted to EUR 0.17 (0.18).

Outlook for full year 2018

Exel Composites reiterates its outlook for 2018 published on 23 April 2018 and expects revenue to increase significantly and adjusted operating profit to increase in 2018 compared to 2017.

President and CEO, Riku Kytömäki

Group revenue increased clearly in the first half of 2018 and consequently adjusted operating profit improved. The revenue growth was strongly supported by the recent acquisitions of Nanjing Jianhui and Diversified Structural Composites, DSC. Their contribution offset the impact of declining volumes in the telecommunications segment compared to the corresponding period last year.

Both Nanjing Jianhui and DSC have strong market positions in the high growth segment of wind energy, which comprised over half of the revenue growth in the Construction & Infrastructure customer segment during the review period. Also geographically the acquired businesses contributed to revenue in the region Rest of the World as well as in the Asia-Pacific (APAC) region. Revenue in the region Rest of the World more than doubled due to the DSC acquisition. Despite the significant impact of Nanjing Jianhui, APAC revenue declined. APAC revenue was negatively affected by declined volumes in the telecommunications segment, as well as lower sales in the Australian market, reflecting the closure of production in Australia.

The acquisitions of Nanjing Jianhui and DSC have been important milestones as we have continued to execute on our growth strategy. Nanjing Jianhui has exceeded our expectations with strong revenue growth and good profitability. We are also convinced that the acquisition of an operating composites company was the most efficient way for Exel to create a foothold in the strategically important American composites market. DSC is an established business with an existing customer network, a competent team, an operational production facility and interesting technologies. All of this gave us a good starting position and a platform for cross-selling opportunities to existing and new customers. It would have required heavier investments and more time to get to the same point if we had chosen to start from the beginning by building up our own greenfield production facility.

The integration process of DSC is well under way and is progressing according to plan. In May, we appointed Kari Loukola, currently SVP, Sales & Marketing, as SVP, Exel Composites Americas and President of DSC. His presence on site enables us to have full focus on DSC’s profitability turnaround as well as on growth in the Americas. In May, we also communicated the appointment of Olli Tevä to the role as new SVP, Sales & Marketing, which he will take on in August 2018. Thus, our focus on revenue growth remains intact.  


Consolidated key figures

EUR thousand 1.4.–30.6. 2018 1.4.–30.6. 2017 Change, % 1.1–30.6. 2018 1.1.–30.6. 2017 Change, % 1.1.–31.12. 2017
Order intake 25,004 23,359 7.0 46,975 45,839 2.5 86,531
Order backlog ¹ 19,828 19,436 2.0 19,828 19,436 2.0 17,126
Revenue 25,277 23,150 9.2 46,796 43,447 7.7 86,255
Operating profit 1,321 1,488 -11.2 2,951 3,144 -6.1 6,081
% of revenue 5.2 6.4 6.3 7.2 7.1
Adjusted operating profit ² 1,973 1,722 14.6 3,759 3,387 11.0 6,319
% of revenue 7.8 7.4 8.0 7.8 7.3
Profit for the period 1,062 1,060 0.2 1,981 2,166 -8.6 4,212
Net cash flow from operating activities -1,114 929 -219.9 -1,277 81 -1,676.5 4,856
Return on capital employed, % 10.3 14.5 11.4 15.6 14.8
Net gearing, % 87.2 36.7 87.2 36.7 30.3
Earnings per share 0.09 0.09 0.17 0.18 0.36
Equity per share, EUR 2.34 2.30 1.8 2.34 2.30 1.8 2.43
Employees on average 652 534 22.1 613 498 23.1 532

¹ As per the end of the period.
² Excluding material items affecting comparability, such as restructuring costs, impairment losses and reversals, and costs related to planned or realized business acquisitions or disposals. For more information, please refer to the paragraph “Change in Exel Composites’ financial reporting terminology” of the Half-year Financial Report published on 21 July 2016.

Exel Composites’ Half-year Financial Report January–June 2018 is available in full in pdf format as an attachment to this release. The report and the related presentation are also available at the company’s website under the Investor section.

Vantaa, 24 July 2018

Exel Composites Plc
Board of Directors

For further information, please contact:

Riku Kytömäki, President and CEO
tel. +358 50 511 8288
riku.kytomaki@exelcomposites.com

Mikko Kettunen, CFO
tel. +358 50 347 7462
mikko.kettunen@exelcomposites.com

Distribution

Nasdaq Helsinki Ltd
Main news media
www.exelcomposites.com

Exel Composites in brief

Exel Composites is the world’s leading composite technology company that engineers and manufactures composite products and solutions to an extensive range of demanding industrial applications. 

The core of the business is based on the employees’ high level of expertise and own, internally developed composite technologies, which have been perfected over decades with a steady focus on innovation. With nine manufacturing plants across Europe, Asia, and North America, and a global sales network, Exel Composites is firmly driven by superior customer experience and world-class operations.

Headquartered in Finland, Exel Composites employs approximately 650 people globally. The company’s shares are listed on the Nasdaq Helsinki exchange.

www.exelcomposites.com

About Us

Exel Composites is the world’s leading composite technology company that engineers and manufactures composite products and solutions to an extensive range of demanding industrial applications. The core of the business is based on the employees’ high level of expertise and own, internally developed composite technologies, which have been perfected over decades with a steady focus on innovation. With nine manufacturing plants across Europe, Asia, and North America, and a global sales network, Exel Composites is firmly driven by superior customer experience and world-class operations. Headquartered in Finland, Exel Composites employs approximately 650 people globally. The company’s shares are listed on the Nasdaq Helsinki exchange. www.exelcomposites.com