Exel Composites Plc's financial statements release 2011
EXEL COMPOSITES PLC FINANCIAL STATEMENTS RELEASE 17.2.2012 at 9.00 1 (16)
EXEL COMPOSITES PLC’S FINANCIAL STATEMENTS RELEASE 2011
OCTOBER-DECEMBER 2011 HIGHLIGHTS
- Net sales in the fourth quarter of 2011 were EUR 19.8 (19.3) million, up by 2.2 per cent on the previous year
- Operating profit in the fourth quarter of 2011 was EUR 1.8 million (EUR 3.1 million), or 8.9 (16.1) per cent of net sales
- Fully diluted earnings per share were EUR 0.11 (0.19)
JANUARY-DECEMBER 2011 HIGHLIGHTS
- Net sales for the financial year increased to EUR 85.1 (72.9) million, up by 16.8 per cent on the previous year
- Operating profit for the financial year was EUR 11.1 million (EUR 9.4 million), or 13.0 (12.9) per cent of net sales
- Net operative cash flow was positive at EUR +9.6 (+12.0) million
- Fully diluted earnings per share for the full year were EUR 0.67 (0.57)
- The Board of Directors proposes that a dividend of EUR 0.50 (0.50) per share be paid for the financial year 2011
OUTLOOK FOR 2012
The Exel Composites Group had a strong performance in 2011 with sales and operating profit developing favourably.
In the fourth quarter 2011 overall demand softened. There are major uncertainties relating to general growth prospects in the economy, and these uncertainties may affect the demand for composite products. Due to the prevailing state of the markets, the visibility is low.
Exel Composites maintains its cautious stance in 2012, but will continue to drive the long-term initiatives to strengthen the Company’s competitive position and to invest in growing market segments to pursue the strategy of profitable growth.
COMMENTS BY THE CEO
“The global recovery that started in the latter half of 2010 continued in 2011. The first half of the year was marked with strong growth for Exel Composites. Demand in Exel Composites’ profiles improved until the fourth quarter when the growth started to level off.
During 2011, we continued strong customer-driven product development and managed to sell several new products, especially for window and door industry, electrical industry and for machine industry applications. Market demand in telecommunication and airport products was also good.
Net sales continued to grow throughout 2011, and profitability remained on a good level. Net sales increased by 16.8 per cent to EUR 85.1 (72.9) million and operating profit improved 17.5 per cent from EUR 9.4 million to EUR 11.1 million. Cash flow from business operations was positive at EUR 9.6 (12.0) million. However, the sales and operating profit growth decreased in the third and fourth quarters of the year.
The increased raw material costs, including the European Commission’s anti-dumping tariffs on imported Chinese glass fibre, had an adverse effect on the margins. Exel Composites increased product prices, employed alternative sourcing opportunities and increased production in its Chinese operations in Nanjing to reduce the impact of the tariffs. We shall continue price increases to offset the negative impact.
In 2011, we maintained focus on developing our organization. We continued to invest more resources in sales and customer-driven product development. Mr. Kim Sjödahl was appointed SVP Product and Technology Development and member of the Group Management Team as of 1 February 2012 to further develop our global technical sales organization. We also launched ExelWay-project, which targets improving co-operation and harmonizing processes between the units. The project aims at identifying best practices throughout Exel Composites and creating new and efficient business processes. Group-wide practices are also driven by our global ERP and CRM systems which are now widely in use.
The measures taken in the units to improve profitability showed positive results. A particularly positive outcome was achieved at our Nanjing unit in China.
Exel Composites continues to have a strong position in the pultrusion industry. Our success is based on proactive sales work, continuous innovation and close product development with customers. Growth of the composites is generated by new applications. We will continue our strategy of profitable growth with a strong focus on driving sales to current and new customers.”
CONSOLIDATED KEY FIGURES, EUR million
| 1.10. – 31.12. 2011 | 1.10.–31.12. 2010 | Change % | 1.1. – 31.12. 2011 | 1.1. – 31.12. 2010 | Change, % | |
| Net sales | 19.8 | 19.3 | 2.2 | 85.1 | 72.9 | 16.8 |
| Operating profit | 1.8 | 3.1 | -43.7 | 11.1 | 9.4 | 17.5 |
| % of net sales | 8.9 | 16.1 | 13.0 | 12.9 | ||
| Profit for the period | 1.3 | 2.3 | -44.8 | 7.9 | 6.8 | 17.3 |
| Shareholders’ equity | 35.1 | 32.5 | 8.0 | 35.1 | 32.5 | 8.0 |
| Net interest-bearing liabilities | -1.7 | -1.4 | 25.6 | -1.7 | -1.4 | 25.6 |
| Capital employed | 43.2 | 42.7 | 1.1 | 43.2 | 42.7 | 1.1 |
| Return on equity, % | 14.9 | 29.6 | 23.5 | 23.3 | | |
| Return on capital employed, % | 17.2 | 27.5 | 26.1 | 21.8 | ||
| Equity ratio, % | 61.6 | 57.4 | 61.6 | 57.4 | ||
| Net gearing, % | -5.0 | -4.3 | -5.0 | -4.3 | ||
| Earnings per share, EUR | 0.11 | 0.19 | 0.67 | 0.57 | | |
| Earnings per share, diluted, EUR | 0.11 | 0.19 | 0.67 | 0.57 | ||
| Equity per share, EUR | 2.95 | 2.73 | 2.95 | 2.73 |
IFRS REPORTING
This financial statements bulletin has been prepared in accordance with the recognition and measurement principles of IFRS, which are the same as in the 2010 financial statements. The Group has adopted the mandatory IFRS standards that entered into force on 1 January 2011, but they have not had an impact on the Group’s financial situation.
OCTOBER - DECEMBER 2011
FINANCIAL PERFORMANCE
The Group’s net sales in October - December 2011 were EUR 19.8 (19.3) million. The demand started to level off during the fourth quarter, especially in machine and electrical industry markets.
Operating profit in the fourth quarter of 2011 was EUR 1.8 million including EUR +0.2 million non-recurring items (EUR 3.1 million including EUR 0.9 million non-recurring items), or 8.9 (16.1) per cent of net sales. Operating profit without non-recurring items was 7.9 (11.7) per cent of net sales. The increased raw material costs continued to have an adverse effect on the margins. Exel Composites continued measures to mitigate the effects, and passed part of the rising costs to the market by increasing product prices. Personnel costs increased as more resources were invested in sales and customer-oriented product development.
FINANCIAL YEAR 2011
FINANCIAL PERFORMANCE
In 2011, net sales for the Exel Composites Group increased on the previous year, ending the year at EUR 85.1 (72.9) million. Net sales started to improve in the first quarter of 2011 compared to the weak first quarter of 2010. Market conditions improved and strong growth continued until the fourth quarter when the growth started to level off. Strong market demand was experienced especially in telecommunication and machine industry. Building and infrastructure sales were supported by a recovery in airport products from the previous year’s low levels as well as a positive trend in windows and doors driven by consistent sales efforts. Sales picked up also in the electrical industry in the third quarter of 2011 following recovered demand most notably in the electrical machine industry and other electrical applications.
A decision was made in the second quarter of 2011 to invest in five new production lines using advanced pultrusion technology to secure future growth. The first advanced line started in September in the Mäntyharju unit in Finland. It is designed to produce more demanding and broader products.
The European Commission raised a new anti-dumping investigation on imported Chinese glass fiber raw materials in August 2011. In September 2010, the Commission imposed an anti-dumping tariff of 43.6 per cent on imported Chinese glass fiber which was lowered to 13.8 per cent in mid-March 2011 in addition to the base tariff of 7 per cent. Exel Composites has increased product prices, employed alternative sourcing opportunities and increased production in its Chinese operations in Nanjing to reduce the impact of the tariffs.
Exel Composites’ operating profit for the financial period improved to EUR 11.1 million including EUR +0.5 million non-recurring items (EUR 9.4 million including non-recurring items of EUR +1.4 million). The operating profit as a percentage of net sales was 13.0 (12.9) per cent. Operating profit without non-recurring items was 12.4 (11.0) per cent of net sales. In 2011, other operating income included EUR 0.5 million of one-off items. In the previous year, other operating expenses included one-off restructuring costs of EUR 1.0 million due to the corporate restructuring of the former Floorball licensee and other operating income included one-off Sports licensing income of EUR 2.5 million.
Exel Composites’ Nanjing unit in China achieved ISO 14001 Environmental Management status in September 2011. The Group’s Finnish units were granted ISO 14001 environmental certificate earlier. The target is to have all the units of the Group certified.
Exel Composites entered into a trademark license agreement with E-Sports Group in relation to Exel’s pole products on 1 August 2011. The licence agreement covers the use of the Exel trademark with regards to poles for skiing, Nordic Walking and Nordic Blading. E-Sports Group is the license holder also for Exel floorball products.
The increased raw material costs started to have an adverse effect on the margins in the third quarter of 2011. Exel Composites took measures to mitigate the effects, and passed part of the rising costs to the market by increasing product prices. Personnel costs increased in 2011 as more resources were invested in sales and customer-oriented product development. Exel Composites will continue to strengthen the organization to ensure future growth.
The measures taken in the units to improve profitability showed positive results. A particularly positive outcome was achieved at our Nanjing unit in China.
The Group’s net financial expenses in 2011 were EUR 0.3 (0.5) million. The net financial expenses in 2011 included exchange differences of EUR -0.1 (-0.0) million. The Group’s profit before taxes was EUR 10.8 (8.9) million and profit after taxes EUR 7.9 (6.8) million.
Fully diluted total earnings per share improved from EUR 0.57 in 2010 to EUR 0.67 in 2011. Return on capital employed in 2011 increased to 26.1 (21.8) per cent, due to improved operating profit and higher turnover of capital employed. Return on equity was 23.5 (23.3) per cent.
BALANCE SHEET AND FINANCIAL POSITION
Exel Composites maintained a strong emphasis on cash flow and improved the financial position further in 2011. Cash flow from business operations was positive at EUR 9.6 (12.0) million. Cash flow before financing, but after capital expenditure, amounted to EUR 6.4 (10.4) million.
Capital expenditure was financed with cash flow from business operations. At the end of the financial year, the Group’s liquid assets stood at EUR 9.8 (11.6) million.
The Group’s consolidated total assets at the end of the financial year were EUR 57.0 (56.9) million.
Interest-bearing liabilities amounted to EUR 8.1 (10.2) million. Net interest-bearing liabilities were reduced by EUR 0.4 million to EUR -1.7 (-1.4) million. Non-current liabilities were prematurely amortized by EUR 2.1 million.
Exel Composites ensured in July 2011 a new committed 3-year revolving credit facility of EUR 20 million to refinance current credit facilities and to ensure the financing of growth.
Equity at the end of the financial year was EUR 35.1 (32.5) million and equity ratio 61.6 (57.4) per cent. The net gearing ratio was -5.0 (-4.3) per cent.
The Company paid total dividends during the financial year of EUR 5.9 (3.0) million. Dividend per share was EUR 0.50 (0.25) including an extraordinary dividend of EUR 0.25 per share due to Exel Composites’ 50th anniversary in 2010.
CAPITAL EXPENDITURE AND DEPRECIATION
The capital expenditure on fixed assets amounted to EUR 3.2 (1.6) million.
Total depreciation of non-current assets during the year under review amounted to EUR 2.7 (2.9) million.
PERSONNEL
The number of Exel Composites Group employees on 31 December 2011 was 428 (408), of whom 199 (189) worked in Finland and 229 (219) in other countries. The average number of personnel during the financial year was 428 (404). The increase both in Finland and abroad is due to the increased sales volumes.
RESEARCH AND DEVELOPMENT
Product and technology development costs totaled EUR 1.6 (1.3) million, representing 1.9 (1.8) per cent of net sales. The main projects were connected with the development of new products and customer applications.
SHARES AND SHARE CAPITAL
The share capital has remained unchanged during the financial year and is 11,896,843 shares each having the counter-book value of EUR 0.18. There is only one class of shares and all shares are freely assignable under Finnish law.
Exel Composites did not hold any of its own shares during the period of review.
SHARE PERFORMANCE AND TURNOVER
Exel Composites’ share is listed in the Small Cap segment of the NASDAQ OMX Helsinki Ltd. in the Industrials sector.
During the financial year the highest share price quoted was EUR 9.40 (7.25) and the lowest EUR 6.75 (5.00). At the end of the year, the share price was EUR 7.65 (7.06). The average share price during the financial year was EUR 8.10 (5.86).
Total shareholder return (TSR) in 2011 was 15 (36) per cent.A total of 1,381,139 (2,298,611) shares were traded during the year, which represents 11.6 (19.3) per cent of the average number of shares. On 31 December 2011, Exel Composites’ market capitalization was EUR 91.0 (84.0) million.
SHAREHOLDERS AND DISCLOSURES
On 31 December 2011, 0.8 per cent of the shares and votes of Exel Composites were owned or controlled, directly or indirectly by the President and CEO and the members of the Board.
The Company’s largest shareholder is the Swedish investment company Nordstjernan AB, which owned 29.4 per cent of shares at the end of 2011. Other major shareholders included Ilmarinen Mutual Pension Insurance Company (5.8 per cent), OP-Suomi Small Cap Investment Fund (4.5 per cent) and Ulkomarkkinat Oy (4.0 per cent). At the end of the year, the Company had a total of 2,649 (2,363) shareholders.
Exel Composites received two flagging announcements during the financial year. Exel Composites Plc was informed on 20 May 2011 that the holdings of Veikko Laine Oy (business identity code 0110592-0) had fallen under 5 per cent of the voting rights and share capital in Exel Composites Plc. Before the transaction the holdings of Veikko Laine Oy were 595.796 shares or 5.95 per cent Exel Composites’ share capital and votes. After the transaction Veikko Laine Oy’s ownership share was 395.796 shares or 3.33 per cent.
On 12 December 2011 Exel Composites Plc was informed that the holdings of Evli Group Plc (business identity code 0533755-0) had fallen under 5 per cent of the voting rights and share capital in Exel Composites Plc on 9 December 2011. As a result of selling 50,000 Exel Composites shares on 9 December 2011, the holdings of the funds administered by Evli Fund Management Company Ltd (business identity code 0744659-0) in Exel Composites Plc fell to 4.77 per cent.
CORPORATE GOVERNANCE
Exel Composites issues a Corporate Governance Statement for the financial year 2011. The Corporate Governance Statement has been composed in accordance with recommendation 54 of the new Corporate Governance Code and Chapter 2, Section 6 of the Finnish Securities Market Act. The Corporate Governance Statement is issued separately from the Board of Directors’ report. Further information concerning the corporate governance matters is available at the Group’s website at www.exelcomposites.com.
DECISIONS OF THE AGM 2011
The Annual General Meeting of Exel Composites Plc held on 6 April 2011 approved the Board’s proposal to distribute a dividend of EUR 0.50 per share for the financial year 2010 amounting to a total of EUR 5.9 (3.0) million.
The Annual General Meeting authorized the Board of Directors to acquire the Company’s own shares by using unrestricted equity. The maximum amount to be acquired is 600,000 shares. The authorization is valid until the next Annual General Meeting.
BOARD OF DIRECTORS AND AUDITORS
On 6 April 2011, the Annual General Meeting appointed Peter Hofvenstam, Göran Jönsson, Reima Kerttula and Heikki Mairinoja to continue on the Board of Directors. Vesa Kainu was no longer available for re-election to the Board. Heikki Hiltunen was elected as a new member of the Board of Directors. At the formative meeting of the Board of Directors held after the AGM, the Board of Directors re-elected from among its members Peter Hofvenstam as its Chairman.
The Board of Directors convened 9 times in 2011 and the average attendance rate at these meetings was 100 per cent. The fees paid to the Board of Directors totaled EUR 140 (154) thousand in 2011.
The Board of Directors has reviewed the independence of Board members in accordance with Recommendation 15 of the Corporate Governance Code. Heikki Hiltunen, Reima Kerttula and Heikki Mairinoja are independent Board members. Peter Hofvenstam is considered as independent from the Company, but non-independent from a major shareholder, since he is the Vice President of Nordstjernan AB. Göran Jönsson is considered as non-independent from the Company as former President and CEO of the company. The Board was considered to comply with the Corporate Governance independency rules.
The Annual General Meeting of Exel Composites has elected a Shareholders’ Nomination Board, which nominates candidates to the Annual General Meeting for election as Board members and proposes the fees to be paid to the Board members. The Nomination Board included the Chairman and persons nominated by the four largest shareholders as of 1 November 2011. In 2011 the Nomination Board comprised Tomas Billing as Chairman (Nordstjernan AB), Matti Rusanen (Ilmarinen Mutual Pension Insurance Company), Samuli Sipilä (OP Fund Management), Erkki Myllärniemi (Ulkomarkkinat Oy), and Peter Hofvenstam, the Chairman of the Board of Directors, as an expert member. The Nomination Board met three times in 2011.
Ernst & Young, Authorized Public Accountants, with Juha Hilmola, APA, as principal auditor, were elected to serve as company auditor in the AGM in 2011.
The fees paid to the auditors totaled EUR 173 (206) thousand in 2011.
GROUP STRATEGY REDEFINED
The Group strategy was redefined in September 2011 and the financial goals over a business cycle remained unchanged. The objective is that Exel Composites’ average organic growth annually exceeds market growth of the industry. Growth achieved through acquisitions is part of Exel Composites’ strategy. Exel Composites’ target is the operating profit to exceed 10 per cent of net sales. Exel Composites aims to distribute at least 40 per cent of net income in dividends, as permitted by the financial structure and growth opportunities.
MAJOR NEAR-TERM RISKS AND UNCERTAINTIES
The most significant near-term business risks are related to the general economic development, government regulations and a possible new financial crisis in the Euro area as well as to market demand in certain market segments. Raw material prices, energy cost and other cost increases may continue and put pressure on profitability. In case the European Commission decides on new anti-dumping tariffs to be imposed on Chinese glass fiber, it may have a negative effect on the profitability if the rising costs of glass fiber can only be transferred partially to product prices. If the measures taken in the Chinese and British units to improve efficiency prove to be unsuccessful, this may have an effect on the result of the Company. Currency rate changes, price competition and alternative competing materials may also have a negative effect on the result. The availability and cost of financing may continue to have an effect on the demand and increase the risk of credit losses.
ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IRFS)
All IFRS’s in force on 31 December 2011 that are applicable to Exel Composites’ business operations, including all SIC- and IFRIC-interpretations thereon, have been complied with when preparing year 2011 and comparable year 2010 figures. International financial reporting standards, referred to in the Finnish Accounting Act and in ordinances issued based on the provisions of this Act, refer to the standards and their interpretations adopted in accordance with the procedure laid down in regulation (EC) No 1606/2002 of the EU. The notes to the consolidated financial statements conform also with the Finnish accounting and company legislation.
EVENTS AFTER THE REPORTING PERIOD
Kim Sjödahl was appointed Senior Vice President Product and Technology Development and member of Exel Composites Plc’s Group Management Team as of 1 February 2012. He holds an M.Sc. in Mechanical Engineering. Mr. Sjödahl has been employed by Exel Composites since 1997. His earlier position is VP Product Development for Exel Composites’ units in Finland and Germany.
OUTLOOK FOR 2012
The Exel Composites Group had a strong performance in 2011 with sales and operating profit developing favourably.
In the fourth quarter 2011 overall demand softened. There are major uncertainties relating to general growth prospects in the economy, and these uncertainties may affect the demand for composite products. Due to the prevailing state of the markets, the visibility is low.
Exel Composites maintains its cautious stance in 2012, but will continue to drive the long-term initiatives to strengthen the Company’s competitive position and to invest in growing market segments to pursue the strategy of profitable growth.
BOARD PROPOSAL FOR DIVIDEND DISTRIBUTION
Exel Composites’ financial goals include distributing dividends equal to at least 40 per cent of the profit for the financial year unless otherwise required by growth and liquidity.
On 31 December 2011 Exel Composites Plc’s distributable funds totaled EUR 22,736 thousand, of which profit for the financial period accounted for EUR 6,832 thousand.
The Board proposes to the Annual General Meeting that a dividend of EUR 0.50 (0.50) per share be paid for the 2011 financial year.
As a basis for its proposal, the Board of Directors has made an assessment of the Group’s financial position and ability to meet its commitments, as well as the Group’s outlook and investment requirements. The Board considers the proposed dividend well-balanced given the prospects, the capital requirements and the risks of the Group’s business activities.
The proposed record date for dividends is 3 April 2012. If the Annual General Meeting approves the Board’s proposal, it is estimated that the dividend will be paid on 12 April 2012.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
| EUR thousand | 1.10. – 31.12. 2011 | 1.10.- 31.12. 2010 | Change, % | 1.1. – 31.12. 2011 | 1.1. – 31.12. 2010 | Change, % |
| Net sales | 19,758 | 19,338 | 2.2 | 85,136 | 72,872 | 16.8 |
| Materials and services | -7,529 | -7,700 | 2.2 | -33,358 | -28,403 | -17.4 |
| Employee benefit expenses | -5,419 | -4,982 | -8.8 | -21,133 | -18,833 | -12.2 |
| Depreciati-on and impairment | -672 | -719 | 6.5 | -2,702 | -2,880 | 6.2 |
| Other operating expenses | -4,668 | -3,901 | -19.7 | -17,709 | -16,808 | -5.4 |
| Other operating income | 284 | 1,078 | -73.7 | 849 | 3,481 | -75.6 |
| Operating profit | 1,754 | 3,115 | -43.7 | 11,082 | 9,430 | 17.5 |
| Net financial items | -31 | -246 | 87.4 | -284 | -493 | 42.4 |
| Profit before tax | 1,723 | 2,869 | -39.9 | 10,798 | 8,936 | 20.8 |
| Income taxes | -459 | -578 | 20.6 | -2,852 | -2,165 | -31.7 |
| Profit/loss for the period | 1,264 | 2,291 | -44.8 | 7,946 | 6,772 | 17.3 |
| Other comprehensive income: | | |||||
| Exchange differences on translating foreign operations | 1,635 | 1,151 | 42.1 | 893 | 3,411 | -73.8 |
| Other comprehen-sive income, net of tax | 1,635 | 1,151 | 42.1 | 893 | 3,411 | -73.8 |
| Total comprehen-sive income | 2,898 | 3,442 | -15.8 | 8,839 | 10,183 | -13.2 |
| Profit/loss attributa-ble to: | ||||||
| Equity holders of the parent company | 1,264 | 2,291 | | 7,946 | 6,772 | |
| Comprehen-sive income | ||||||
| attribu-table to: | ||||||
| Equity holders of the parent company | 2,898 | 3,442 | 8,839 | 10,183 | ||
| Earnings per share, diluted and undiluted, EUR | 0.11 | 0.19 | 0.67 | 0.57 |
CONDENSED CONSOLIDATED BALANCE SHEET
| EUR thousand | 31.12.2011 | 31.12.2010 | Change |
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 11,939 | 11,637 | 302 |
| Other intangible assets | 1,961 | 2,426 | -465 |
| Tangible assets | 11,612 | 10,427 | 1,185 |
| Deferred tax assets | 148 | 1,585 | -1,437 |
| Other non-current assets | 64 | 64 | 0 |
| Non-current assets total | 25,723 | 26,139 | -415 |
| Current assets | |||
| Inventories | 10,499 | 9,600 | 899 |
| Trade and other receivables | 10,985 | 9,540 | 1,445 |
| Cash at bank and in hand | 9,840 | 11,606 | -1,766 |
| Current assets total | 31,323 | 30,746 | 577 |
| Total assets | 57,047 | 56,885 | 162 |
| EQUITY AND LIABILITIES | |||
| Shareholders´ equity | |||
| Share capital | 2,141 | 2,141 | 0 |
| Other reserves | 30 | 37 | -7 |
| Invested unrestricted equity fund | 8,488 | 8,488 | 0 |
| Translation differences | 4,204 | 3,311 | 893 |
| Retained earnings | 12,309 | 11,757 | 552 |
| Profit for the period | 7,946 | 6,772 | 1,174 |
| Total equity attributable to equity holders of the parent company | 35,118 | 32,507 | 2,611 |
| Total equity | 35,118 | 32,507 | 2,611 |
| Non-current liabilities | |||
| Interest-bearing liabilities | 8,088 | 10,204 | -2,116 |
| Interest-free liabilities | 392 | 362 | 30 |
| Deferred tax liabilities | 539 | 549 | -10 |
| Current liabilities | |||
| Interest-bearing liabilities | 10 | 15 | -5 |
| Trade and other non-current liabilities | 12,900 | 13,250 | -350 |
| Total liabilities | 21,928 | 24,378 | -2,450 |
| Total equity and liabilities | 57,047 | 56,885 | 162 |
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
| EUR thousand | Share Capital | Other Reserves | Invested Unrestricted Equity Fund | Translation Differences | Retained Earnings | Total |
| Balance at 1 January 2010 | 2,141 | 37 | 8,488 | -100 | 15,013 | 25,580 |
| Comprehen-sive result | 0 | 0 | 0 | 3,411 | 6,772 | 10,183 |
| Other items | 0 | 0 | 0 | 0 | -282 | -282 |
| Dividend | 0 | -2,974 | ||||
| Balance at 31 December 2010 | 2,141 | 37 | 8,488 | 3,311 | 18,529 | 32,507 |
| Balance at 1st January 2011 | 2,141 | 37 | 8,488 | 3,311 | 18,529 | 32,507 |
| Comprehen-sive result | 0 | 0 | 0 | 893 | 7,946 | 8,839 |
| Other items | 0 | -7 | 0 | 0 | -271 | -278 |
| Dividend | 0 | -5,948 | ||||
| Balance at 31 December 2011 | 2,141 | 30 | 8,488 | 4,204 | 20,255 | 35,118 |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
| EUR thousand | 1.1. – 31.12. 2011 | 1.1. – 31.12. 2010 | Change |
| Cash Flow from Operating Activities | |||
| Profit for the period | 7,946 | 6,772 | 1,174 |
| Adjustments | 6,308 | 6,276 | -32 |
| Change in working capital | -2,216 | 1,729 | -3,945 |
| Cash Flow Generated by Operations | 12,038 | 14,777 | -2,739 |
| Interest paid | -349 | -515 | 166 |
| Interest received | 129 | 114 | 15 |
| Other financial items | -191 | -88 | -103 |
| Income taxes paid | -2,067 | -2,296 | 229 |
| Net Cash Flow from Operating Activities | 9,560 | 11,992 | -2,432 |
| Cash Flow from Investing Activities | |||
| Acquisitions | 0 | 0 | 0 |
| Disposal of business | 0 | 0 | 0 |
| Capital expenditure | -3,208 | -1,570 | -1,638 |
| Proceeds from sale of fixed assets | 0 | 0 | |
| Cash Flow from Investing Activities | -3,208 | -1,570 | -1,638 |
| Cash Flow from Financing | |||
| Share issue | 0 | 0 | 0 |
| Proceeds from long-term borrowings | 0 | 0 | 0 |
| Instalments of long-term borrowings | -2,160 | -6,857 | 4,697 |
| Change in short-term loans | 0 | -106 | 106 |
| Instalments of finance lease liabilities | -10 | -1,477 | 1,467 |
| Dividends paid | -5,948 | -2,974 | -2,974 |
| Net Cash Flow from Financing | -8,118 | -11,414 | 3,296 |
| Change in Liquid Funds | -1,766 | -992 | -774 |
| Liquid funds in the beginning of period | 11,606 | 12,597 | -991 |
| Change in liquid funds | -1,766 | -992 | -775 |
| Liquid funds at the end of period | 9,840 | 11,606 | -1,766 |
QUARTERLY KEY FIGURES
| EUR thousand | IV/ 2011 | III/ 2011 | II/ 2011 | I/ 2011 | IV/ 2010 | III/ 2010 | II/ 2010 | 1/ 2010 |
| Net sales | 19,758 | 20,463 | 23,367 | 21,548 | 19,338 | 18,692 | 19,173 | 15,671 |
| Materials and services | -7,529 | -8,156 | -9,295 | -8,378 | -7,700 | -7,451 | -7,189 | -6,062 |
| Employee benefit expenses | -5,419 | -4,820 | -5,672 | -5,221 | -4,982 | -4,577 | -4,892 | -4,381 |
| Depreciation and impairment | -672 | -683 | -663 | -684 | -719 | -724 | -763 | -675 |
| Operating expenses | -4,668 | -4,356 | -4,424 | -4,262 | -3,901 | -3,856 | -4,229 | -4,824 |
| Other operating income | 284 | 113 | 317 | 135 | 1,078 | 595 | 553 | 1,255 |
| Operating profit | 1,754 | 2,560 | 3,630 | 3,137 | 3,115 | 2,679 | 2,653 | 983 |
| Net financial items | -31 | -126 | -104 | -23 | -246 | -152 | -10 | -86 |
| Profit before taxes | 1,723 | 2,434 | 3,527 | 3,115 | 2,869 | 2,527 | 2,643 | 897 |
| Income taxes | -459 | -664 | -948 | -782 | -578 | -662 | -706 | -219 |
| Profit/loss for the period from continuing operations | 1,264 | 1,770 | 2,579 | 2,333 | 2,291 | 1,865 | 1,937 | 678 |
| Profit/loss for the period | 1,264 | 1,770 | 2,579 | 2,333 | 2,291 | 1,865 | 1,937 | 678 |
| Earnings per share, EUR | 0.11 | 0.15 | 0.22 | 0.20 | 0.19 | 0.16 | 0.16 | 0.06 |
| Earnings per share, EUR, diluted | 0.11 | 0.15 | 0.22 | 0.20 | 0.19 | 0.16 | 0.16 | 0.06 |
| Average number of shares, undiluted, | ||||||||
| 1,000 shares | 11,897 | 11,897 | 11,897 | 11,897 | 11,897 | 11,897 | 11,897 | 11,897 |
| Average number of shares, diluted, | ||||||||
| 1,000 shares | 11,897 | 11,897 | 11,897 | 11,897 | 11,897 | 11,897 | 11,897 | 11,897 |
| Average number of personnel | 433 | 433 | 432 | 416 | 408 | 402 | 397 | 408 |
COMMITMENTS AND CONTINGENCIES
| EUR thousand | 31.12.2011 | 31.12.2010 |
| On own behalf | ||
| Mortgages | 2,783 | 2,783 |
| Corporate mortgages | 12,500 | 12,500 |
| Lease liabilities | ||
| - in next 12 months | 1,035 | 886 |
| - in next 1-5 years | 2,724 | 2,770 |
| Other commitments | 25 | 10 |
DERIVATIVE FINANCIAL INSTRUMENTS
| Nominal values EUR thousand | 31.12.2011 | 31.12.2010 |
| Foreign exchange derivatives | ||
| Forward contracts | 0 | 0 |
| Interest rate derivatives | ||
| Interest rate swaps | 10,000 | 10,000 |
| Purchased interest rate options | 0 | 0 |
CONSOLIDATED KEY FIGURES
| EUR thousand | 1.1. - 31.12. 2011 | 1.1. – 31.12. 2010 | Change % |
| Continuing operations | |||
| Net sales | 85,136 | 72,872 | 16.8 |
| Operating profit | 11,082 | 9,430 | 17.5 |
| % of net sales | 13.0 | 12.9 | |
| Profit before tax | 10,798 | 8,936 | 20.8 |
| % of net sales | 12.7 | 12.3 | |
| Profit for the period | 7,946 | 6,772 | 17.3 |
| % of net sales | 9.3 | 9.3 | |
| Shareholders´ equity | 35,118 | 32,507 | 8.0 |
| Interest-bearing liabilities | 8,098 | 10,219 | -20.8 |
| Cash and cash equivalents | 9,840 | 11,606 | -15.2 |
| Net interest-bearing liabilities | -1,742 | -1,387 | 25.6 |
| Capital employed | 43,216 | 42,725 | 1.1 |
| Return on equity, % | 23.5 | 23.3 | |
| Return on capital employed, % | 26.1 | 21.8 | |
| Equity ratio, % | 61.6 | 57.4 | |
| Net gearing, % | -5.0 | -4.3 | |
| Capital expenditure | 3,208 | 1,570 | 104.3 |
| % of sales | 3.8 | 2.2 | |
| Research and development costs | 1,639 | 1,312 | 24.9 |
| % of net sales | 1.9 | 1.8 | |
| Order stock | 13,114 | 13,316 | -1.5 |
| Earnings per share, EUR | 0.67 | 0.57 | 17.7 |
| Earnings per share, EUR, diluted | 0.67 | 0.57 | 17.7 |
| Equity per share, EUR | 2.95 | 2.73 | 8.1 |
| Average number of shares | |||
| - cumulative | 11,897 | 11,897 | 0.0 |
| - cumulative, diluted | 11,897 | 11,897 | 0.0 |
| Average number of employees | 428 | 404 | 5.9 |
The financial statements are audited and the auditor’s report for the financial statements has been issued.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held on Thursday 29 March 2012 beginning at 10.30 am at Kansallissali, Aleksanterinkatu 44, Helsinki, Finland.
FINANCIAL REPORTING IN 2012
The 2011 Annual Report will be published on the Company’s website on Thursday 8 March 2012 at www.exelcomposites.com.
The Group will issue quarterly interim reports on 4 May, 25 July and 26 October 2012.
PRESS CONFERENCE
Exel will hold an analyst and press conference regarding the financial statements today Friday 17 February 2012 at 12.30 pm in the Tapiola Cabinet of the Scandic Hotel Simonkenttä at Simonkatu 9, Helsinki, Finland.
FORWARD-LOOKING STATEMENTS
Certain statements in this report, which are not historical facts, including, without limitation, those regarding expectations for general economic development and market situation; regarding customer industry profitability and investment willingness; regarding Company growth, development and profitability; regarding cost savings; regarding fluctuations in exchange rates and interest levels; regarding the success of pending and future acquisitions and restructurings; and statements preceded by "believes," "expects," "anticipates," "foresees" or similar expressions are forward-looking statements.
These statements are based on current expectations and currently known facts. Therefore, they involve risks and uncertainties that may cause actual results to differ materially from results currently expected by the Company.
Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Exel Composites does not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Vantaa, 17 February 2012
EXEL COMPOSITES PLC Vesa Korpimies
Board of Directors President and CEO
FURTHER INFORMATION:
Vesa Korpimies, President and CEO, tel. +358 50 590 6754, or email vesa.korpimies@exelcomposites.com
Ilkka Silvanto, CFO and Administrative Director, tel. +358 50 598 9553
, or email ilkka.silvanto@exelcomposites.com
DISTRIBUTION
NASDAQ OMX Helsinki Ltd.
Main news media
www.exelcomposites.com
EXEL COMPOSITES IN BRIEF
Exel Composites (www.exelcomposites.com) is a technology company which designs, manufactures and markets composite profiles and tubes for industrial applications. The Group is the leading composite profile manufacturer in the world and concentrates on growing niche segments.
The core of the operations is based on own, internally developed composite technology, product range based on it and a 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 the Small Cap segment of NASDAQ OMX Helsinki Ltd.