Exel Composites Plc’s Business Review January – September 2016: Customer demand remained weak, however, operating profit improved in Q3 2016
EXEL COMPOSITES PLC STOCK EXCHANGE RELEASE 25 OCTOBER 2016 at 16.00 EET
Exel Composites Plc’s Business Review January – September 2016: Customer demand remained weak, however, operating profit improved in Q3 2016
Q3 2016 in brief
-- Order intake for the third quarter amounted to EUR 18.2 (18.7) million, -2.9% in comparison to previous year.
-- Revenue amounted to EUR 16.4 (18.0) million, -8.7% in comparison to previous year.
-- Operating profit amounted to EUR 0.6 (0.5) million, which is 3.4% (2.6) of revenue.
-- Net cash flow from operating activities was positive at EUR +2.5 (+0.5) million.
-- Earnings per share were EUR 0.03 (0.01).
January – September 2016 in brief
-- Order intake for the period amounted to EUR 56.5 (62.9) million, -10.1% in comparison to previous year.
-- Revenue amounted to EUR 54.1 (60.9) million, -11.1% in comparison to previous year.
-- Operating profit amounted to EUR 1.9 (3.8) million, which is 3.4% (6.3) of revenue.
-- Net cash flow from operating activities was positive at EUR +2.0 (+2.9) million.
-- Earnings per share were EUR 0.11 (0.20).
Outlook for full year 2016
The Company continues to implement its new strategy with focus on operational efficiency and optimizing the global manufacturing footprint. The Company estimates that adjusted operating profit will decrease in 2016 compared to 2015.
President and CEO, Riku Kytömäki
The market environment has remained challenging throughout 2016 and the situation did not change in the third quarter of the year. While the seasonal summer holiday period typically affects volumes, order intake for the third quarter and year to date did not reach the previous year’s level due to a generally lower demand in our key markets. This is the case especially in telecommunications, which is one of the main segments for Exel. It is generally known that the competitive landscape in telecommunications is going through a fundamental change and this has affected also the business of a number of our key customers.
Overall, we are seeing a declining share of orders from high volume customers, which has had a negative impact on our sales mix. We are taking actions to counteract this development for example by optimizing our production in shorter production runs and with quicker ramp-up’s. We also continue to actively expand our customer base and have a focused approach specifically on customer industries where we see growth opportunities for composites even in the current market environment.
Our continuous efforts throughout this year to adjust our cost structure have improved our profitability even despite lower volumes. Quarterly operating profit for the third quarter was for the first time this year better than previous year, although still behind when considering the January-September period. We will continue implementing the cost reduction measures and improving our operational efficiency.
In the short term, we anticipate the market outlook to remain challenging due to lower demand in some markets and low metal and oil prices affecting some of our customers. In the long term, however, global megatrends continue to drive growth and create new business opportunities for our business. Our strategy combined with our expertise in composites keep us well positioned for profitable growth when the market environment improves.
Consolidated key figures
| EUR thousand | 1.7.-30.9. 2016 | 1.7.-30.9. 2015 | Change, % | 1.1.-30.9. 2016 | 1.1.-30.9. 2015 | Change, % | 1.1.-31.12. 2015 |
| Order intake | 18,181 | 18,723 | -2.9 | 56,532 | 62,908 | -10.1 | 83,374 |
| Order backlog 1) | 17,428 | 14,259 | 22.2 | 17,428 | 14,259 | 22.2 | 15,348 |
| Revenue 2) | 16,431 | 18,006 | -8.7 | 54,070 | 60,853 | -11.1 | 80,196 |
| Operating profit | 565 | 466 | 21.2 | 1,858 | 3,805 | -51.2 | 4,414 |
| % of revenue | 3.4 | 2.6 | 3.4 | 6.3 | 5,5 | ||
| Adjusted operating profit 3) | 596 | 517 | 15.3 | 1,912 | 4,097 | -53.3 | 4,770 |
| % of revenue | 3.6 | 2.9 | 3.5 | 6.7 | 5.9 | ||
| Profit for the period | 384 | 78 | 392.3 | 1,263 | 2,435 | -48.1 | 2,844 |
| Net cash flow | 2,492 | 549 | 353.9 | 1,972 | 2,908 | -32.2 | 3,385 |
| Return on capital employed, % | 5.6 | 4.8 | 6.3 | 13.8 | 12.0 | ||
| Net gearing, % | 13.2 | -1.2 | 13.2 | -1,2 | 2.0 | ||
| Earnings per share, EUR | 0.03 | 0.01 | 0.11 | 0.20 | 0.24 | ||
| Equity per share, EUR | 2.36 | 2.51 | -6.0 | 2.36 | 2,51 | -6.0 | 2.58 |
| 1) As per 30 September 2016. 2) Revenue by customer industries Q3 2016 (Q3 2015): Industrial applications EUR 8.7 (9.8) million; Construction & infrastructure EUR 4.2 (4.7) million; Other applications EUR 3.5 (3.6) million. 3) 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. | |||||||
Financial results briefing
Exel Composites will hold a financial results briefing for investors, analysts and journalists regarding the business review on Wednesday 26 October 2016 at 10.30 a.m. EET at the company’s factory site in Mäntyharju, Finland (address Uutelantie 24 B, 52700 Mäntyharju).
Vantaa, 25 October 2016
Exel Composites Plc
Riku Kytömäki, President & CEO
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 (www.exelcomposites.com) is a leading composite technology company that designs, manufactures and markets composite products and solutions for demanding applications. Exel Composites provides superior customer experience through continuous innovation, world-class operations and long-term partnerships.
The core of the operations is based on own, internally developed composite technology, product range based on it and strong market position in selected segments with a strong quality and brand image. Profitable growth is pursued by a relentless search for new applications and development in co-operation with customers. The personnel’s expertise and high level of technology play a major role in Exel Composites’ operations. Exel Composites Plc share is listed in Nasdaq Helsinki Ltd.