2015-02-13 08:00:02 CET
2015-02-13 08:00:07 CET
REGULATED INFORMATION
Exel Composites Oyj - Financial Statement Release
Exel Composites Plc’s Financial Statements Release 2014
EXEL COMPOSITES PLC FINANCIAL STATEMENTS RELEASE 13.2.2015 at 9.00
1 (18)
Exel Composites Plc's Financial Statements Release 2014
Q4 2014 in brief
- Net sales were 21.1 MEUR, up by 18.6 per cent on the previous year (Q4/2013:
17.8 MEUR)
- Operating profit improved by 39.2 per cent to 2.1 (1.5) MEUR and was 9.8
(8.4) per cent of net sales. In Q4 2013 operating profit before non-recurring
items was EUR 1.9 million or 10.6 per cent of net sales
- Net cash flow from operating activities was positive at +3.8 (+2.9) MEUR
- Fully diluted earnings per share were 0.12 (0.07) EUR
1-12/2014 in brief
- Net sales for the financial year 2014 increased to 79.3 MEUR, up by 14.4 per
cent on the previous year (1-12/2013: 69.3 MEUR)
- Operating profit improved by 83.5 per cent to 8.9 (4.8) MEUR and was 11.2
(7.0) per cent of net sales
- Operating profit before non-recurring items was 9.4 (5.5) MEUR or 11.8 (8.0)
per cent of net sales
- Net cash flow from operating activities was positive at +10.7 (+7.8) MEUR
- Fully diluted earnings per share for the full year were 0.48 (0.26) EUR
- The Board of Directors proposes that a dividend of 0.20 EUR per share be paid
for the financial year 2014
Outlook for full year 2015
The market has stabilized and we can see positive signs in the Company's key
market segments. However, uncertainties relating to general growth prospects in
the economy continue. The Company implements its new strategy by reinforcing
the organization, especially in sales resources, product development and
operations development, and by increasing its capacity. These efforts are
expected to reduce the 2015 operating profit margin compared to 2014, but will
position the Company better for long-term profitable growth.
Comments by the CEO
The performance in the last quarter of 2014 continued to be strong and net
sales increased by 18.6 per cent on the previous year. The fastest relative
growth during the last quarter was achieved outside Europe. Operating profit
improved clearly compared to 2013.
Year 2014 was very successful for Exel Composites in many respects. The Company
got back on growth mode, the financial performance was greatly improved leading
to a double digit operating profit margin, organization was strengthened and a
new strategy was released. Exel Composites is well on its way to becoming a
truly global composite company with world-class operations.
Group net sales and operating profit continued to develop very positively
throughout the year due to increased sales, continued efficiency improvement,
better functioning global organization and better cost control. Our order
intake increased significantly, net operative cash flow was strongly positive
at year end and EBIT improved more than 80 per cent from the previous year. The
biggest sales growth in absolute terms in 2014 came from Europe.
The turnaround measures in Australia, including change in the operating model
and transfer of Brisbane unit to Melbourne, were completed. However, the
financial performance of the Australian unit was not satisfactory in 2014. The
focus in Australia is now on generating more sales.
The Company invested strongly in growth by reinforcing the organization,
especially in sales resources, product development and operations development.
Organizational structures and reporting lines have been altered to reflect the
One Exel -thinking, making the organization more efficient, and working on a
global basis.
The Company released its new growth strategy in November 2014. It focuses on
accelerating growth in China, penetrating new applications and market segments,
creating a true global footprint and growing through new technologies. In line
with the strategy, the Nanjing unit in China will be expanded in order to
double the production capacity. The expansion project is estimated to be
completed during the first half of 2016.
In February 2015 the Company decided to expand its operations in Austria to
meet the increased customer demand. Hereby Exel Composites will be in a better
position to serve its Central and Southern European customers. The target is to
more than double the production capacity in Austria.
CONSOLIDATED KEY FIGURES, EUR million
1.10. 1.10.-31.1 Change, 1.1. - 1.1. - Change,
- 2. % 31.12. 31.12. %
31.12. 2013 2014 2013
2014
Net sales 21.1 17.8 18.6 79.3 69.3 14.4
Operating profit 2.1 1.5 39.2 8.9 4.8 83.5
% of net sales 9.8 8.4 11.2 7.0
Profit for the period 1.5 0.8 85.6 5.7 3.1 85.1
Shareholders' equity 29.7 22.8 30.1 29.7 22.8 30.1
Net interest-bearing -2.6 3.4 -175.7 -2.6 3.4 -175.7
liabilities
Capital employed 35.3 35.7 -1.0 35.3 35.7 -1.0
Return on equity, % 20.1 12.3 21.7 11.3
Return on capital 22.6 16.9 25.2 13.0
employed, %
Equity ratio, % 56.9 47.2 56.9 47.2
Net gearing, % -8.7 15.0 -8.7 15.0
Earnings per share, EUR 0.12 0.07 0.48 0.26
Earnings per share, 0.12 0.07 0.48 0.26
diluted, EUR
Equity per share, EUR 2.50 1.92 2.50 1.92
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
2013 financial statements. The Group has adopted the mandatory IFRS standards
that entered into force on 1 January 2014, but they have not had an impact on
the Group's financial situation.
Market environment
Market demand improved during the fourth quarter of 2014. Demand continued to
pick up especially in the telecommunication, transportation and building,
construction and infrastructure industry markets.
Order intake October - December 2014
Order intake increased in the fourth quarter by 3.0 per cent to EUR 18.4 (17.9)
million on the corresponding period in 2013.
Sales review October - December 2014
Group net sales increased by 18.6 per cent to EUR 21.1 (17.8) million on the
corresponding period in 2013.
Net sales increased in the largest region, Europe, by 10.6 per cent compared to
the corresponding period in 2013. Net sales in the APAC region increased by
54.2 per cent and in the region Rest of the world by 75.0 per cent compared to
the corresponding period in 2013.
Net sales of Industrial applications increased by 22.3 per cent to EUR 13.7
million from EUR 11.2 million in the corresponding period in 2013.
Net sales of Construction and Infrastructure applications in the fourth quarter
of 2014 were up by 31.4 per cent to EUR 4.6 (3.5) million compared to the
corresponding period in 2013.
Net sales of Other applications decreased by 12.9 per cent to EUR 2.7 (3.1)
million compared to the corresponding period in 2013.
Order intake and order backlog January - December 2014
Order intake increased in 2014 by 18.0 per cent to EUR 82.3 (69.8) million on
2013.
The Group's order backlog increased to EUR 12.8 (10.5) million on 31 December
2014.
Sales review January - December 2014
Group net sales for the financial year 2014 increased 14.4 per cent to EUR 79.3
(69.3) million.
Net sales increased in the largest region, Europe, by 15.2 per cent compared to
2013. Net sales in the APAC region increased by 11.3 per cent and in the region
Rest of the world by 7.4 per cent compared to the previous year.
Net sales of industrial applications increased by 16.7 per cent to EUR 47.5
(40.7) million.
Net sales of Construction and Infrastructure applications increased by 10.0 per
cent to EUR 17.4 (15.8) million.
Net sales of Other applications grew by 12.3 per cent to EUR 14.3 (12.8)
million.
Net sales by Region
MEUR 1.10. 1.10. Change, 1.1. 1.1. Change,
-31.12. -31.12. % -31.12. -31.12. %
2014 2013 2014 2013
Europe 16.7 15.1 10.6 64.6 56.0 15.2
APAC 3.7 2.4 54.2 11.8 10.6 11.3
Rest of 0.7 0.4 75.0 2.9 2.7 7.4
world
Total 21.1 17.8 18.5 79.3 69.3 14.4
Net sales by Customer Industry
MEUR 1.10. 1.10. Change, 1.1. 1.1. Change,
-31.12. -31.12. % -31.12. -31.12. %
2014 2013 2014 2013
Construction and 4.6 3.5 31.4 17.4 15.8 10.0
infrastructure
Industrial 13.7 11.2 22.3 47.5 40.7 16.7
applications
Other applications 2.7 3.1 -12.9 14.3 12.8 12.3
Total 21.1 17.8 18.5 79.3 69.3 14.4
Financial performance
October - December 2014
The Group's operating profit continued to develop positively in October -
December 2014 due to increased sales, improved productivity, continued
efficiency improvement, and better cost control.
The Group's operating profit in October - December 2014 was up by 39.2 per cent
to EUR 2.1 (1.5) million compared to 2013. In October - December 2013 operating
profit before non-recurring items was EUR 1.9 million. No non-recurring items
were recorded in October - December 2014.
January - December 2014
The Group's operating profit in January - December 2014 improved by 83.5 per
cent on the previous year and was EUR 8.9 (4.8) million or 11.2 (7.0) per cent
of net sales. The main reasons for the increase were increased sales, improved
productivity, efficiency improvement and better cost control.
The Group's operating profit before non-recurring items in 2014 was EUR 9.4
(5.5) million. The turnaround measures in Australia, including change in the
operating model and transfer of Brisbane unit to Melbourne, have been
completed. However, the financial performance of the Australian unit was not
satisfactory in 2014. An impairment of EUR -0.5 million was recorded in the
results of 2014 in the Australian business unit and deferred tax assets were
reduced by EUR 0.4 million. Further corrective actions have been developed to
improve the profitability. The focus is on generating more sales. The operating
profit for 2013 included EUR 0.7 million of non-recurring items related to the
CEO change and the reorganization of the Australian business unit.
In the local statutory accounts the parent company recognized a non-cash
write-down of Australian subsidiary shareholding value totaling EUR 2.1 million
(EUR 5.5.million non-cash write-down in 2013). Therefore, the parent company's
profit for the financial period was EUR 2.8 million (loss of EUR 2.2 million in
2013).
The Group's net financial expenses in 2014 were EUR 0.4 (0.3) million. The
Group's profit before taxes was EUR 8.5 (4.6) million and profit after taxes
EUR 5.7 (3.1) million.
Financial position
Net cash flow from operating activities was strongly positive at EUR +10.7
(+7.8) million due to improved operating profit. Cash flow before financing,
but after capital expenditure, amounted to EUR 6.3 (5.0) million. The capital
expenditure on fixed assets amounted to EUR 4.4 (2.8) million. The increase was
mainly due to investments in production lines and capacity expansion. 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 8.2 (9.4) million.
Total depreciation of non-current assets during the year under review amounted
to EUR 2.6 (2.7) million. In addition, an impairment of EUR -0.5 million was
recorded in the results of the third quarter of 2014 in the Australian business
unit and deferred tax assets were reduced by EUR 0.4 million.
The Group's consolidated total assets at the end of the financial year were EUR
52.4 (48.5) million. Interest-bearing liabilities amounted to EUR 5.6 (12.9)
million. Net interest-bearing liabilities were EUR -2.6 (3.4) million.
Equity at the end of the financial year was EUR 29.7 (22.8) million and equity
ratio 56.9 (47.2) per cent. The net gearing ratio was -8.7 (15.0) per cent.
Fully diluted total earnings per share were EUR 0.48 (0.26). Return on capital
employed in 2014 was 25.2 (13.0) per cent. Return on equity was 21.7 (11.3) per
cent.
The Company did not distribute any dividend for the financial year 2013.
Business development and strategy implementation
Exel Composites' Board of Directors adopted a new vision, strategy and
long-term financial targets in November 2014. The new vision states: Exel
Composites is an agile, innovative global composite company with world-class
operations providing superior customer experience.
The Company's new growth strategy focuses on accelerating growth in China,
penetrating new applications and new market segments, creating a true global
footprint and growing through new technologies. The Company will continue to
develop world-class operations to differentiate from competitors. Acquisitions
are targeted to boost growth and to cover market and technology white spots.
New long-term financial targets reflect the new growth strategy:
Growth: Turnover growth 2x average market growth
Profitability: EBIT margin over 10 per cent of net sales
Capital efficiency: ROCE over 20 per cent
Financial targets are considered over a business cycle. Acquisitions will
influence overall growth and profitability targets.
Exel Composites aims to distribute some 40 per cent of net income in dividends
as permitted by the financial structure and growth opportunities.
In accordance with the new growth strategy, a decision was made in December
2014 to expand operations in Nanjing, China to meet the increased demand. The
target is to double the production capacity of the Nanjing unit. The expansion
project will be launched in the first quarter of 2015 and it is estimated to be
completed during the first half of 2016.
Research and development
Research and development costs totaled EUR 1.8 (1.5) million, representing 2.3
(2.2) per cent of net sales. The main projects were connected with the
development of new products and customer applications. Advanced laminates
production was introduced at the Mäntyharju factory.
Shares and share performance
Exel Composites' share is listed in the Small Cap segment of the NASDAQ OMX
Helsinki Ltd. in the Industrials sector.
At the end of December 2014, Exel Composites' share capital was EUR
2,141,431.74 and the number of shares was 11,896,843 each having the
counter-book value of EUR 0.18. There were no changes in the share capital
during the financial year. 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 under
review.
During the financial year the highest share price quoted was EUR 8.80 (6.70)
and the lowest EUR 5.56 (5.10). At the end of the year, the share price was EUR
8.39 (5.75). The average share price during the financial year was EUR 6.42
(6.18).
Total shareholder return (TSR) in 2014 was 46 (11) per cent.
A total of 5,836,969 (2,022,018) shares were traded during the year, which
represents 49.1 (17.0) per cent of the average number of shares. On 31 December
2014, Exel Composites' market capitalization was EUR 99.8 (68.4) million.
Shareholders and disclosures
Exel Composites had a total of 2,686 (2,752) shareholders on 31 December 2014.
Information on Exel Composites' shareholders is available on the Company
website at www.exelcomposites.com.
On 31 December 2014, 0.24 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 was Skandinaviska Enskilda Banken AB (nominee
register), which owned 20.9 per cent of shares at the end of 2014. Other major
shareholders included Nordea Bank Finland Plc 9.9 per cent (nominee register),
Nordea Fennia Fund 5.1 per cent, Danske Fund Finnish Small Cap 4.1 per cent and
Fondita Nordic Micro Cap 3.8 per cent.
Exel Composites received seven flagging announcements during the financial year.
On 13 February 2014 Exel Composites received a flagging announcement according
to which the holding of Nordstjernan AB had fallen under 15 per cent of the
voting rights and share capital in Exel Composites Plc. Through share
transactions concluded on 13 February 2014, the holding of Nordstjernan AB
decreased from 2,656,506 shares (22.3 per cent) to 1,656,506 shares,
representing 13.9 per cent of the shares and voting rights of the Company.
On 14 February 2014 Exel Composites received a flagging announcement according
to which the holding of Lannebo Fonder AB had exceeded 5 per cent of the voting
rights and share capital in Exel Composites Plc. Through share transactions
concluded on 13 February 2014, the holding of Lannebo Fonder AB rose to
1,000,000 shares, representing 8.4 per cent of the shares and voting rights of
the Company.
On 7 May 2014 Exel Composites received a flagging announcement according to
which llmarinen Mutual Insurance Company had through share transactions
concluded on 7 May 2014 sold its entire holding, 639,400 shares, or 5.37 per
cent of the shares and voting rights of the Company.
On 10 June 2014 Exel Composites received a flagging announcement according to
which Nordstjernan AB had through share transactions concluded on 9 June 2014
sold its entire holding, 1,656,506 shares, or 13.9 per cent of the shares and
voting rights of the Company.
On 10 June 2014 Exel Composites received a flagging announcement according to
which the holding of Redarnas Ömsesidiga Försäkringsbolag had exceeded 5 per
cent of the voting rights and share capital in Exel Composites Plc. Through
share transactions concluded on 9 June 2014, the holding of Redarnas Ömsesidiga
Försäkringsbolag rose to 847,098 shares, representing 7.12 per cent of the
shares and voting rights of the Company.
On 10 June 2014 Exel Composites received a flagging announcement according to
which the holding of the investment funds administered by OP-Rahastoyhtiö Funds
had exceeded 5 per cent of the voting rights and share capital in Exel
Composites Plc. Through share transactions concluded on 9 June 2014, the
holding of the investment funds administered by OP-Rahastoyhtiö Funds rose to
889,551 shares, representing 7.48 per cent of the shares and voting rights of
the Company.
On 6 November 2014 Exel Composites received a flagging announcement according
to which the holding of Evli Bank Plc had exceeded 5 per cent of the voting
rights and share capital in Exel Composites Plc. Through share transactions
concluded on 4 November 2014, the holding of Evli Bank Plc rose to 603,118
shares, representing 5.07 per cent of the shares and voting rights of the
Company.
Significant related-party transactions
Exel Composites' permanent public insiders include Exel Composites' Board
members, the President and CEO and the members of the Group Management Team. No
significant related-party transactions were conducted by the Group or the
permanent insiders during the financial year 2014.
Organization and personnel
The number of employees on 31 December 2014 was 456 (408), of whom 205 (198)
worked in Finland and 251 (210) in other countries. The average number of
personnel during the financial year was 433 (427).
The harmonization of the Group's operations was continued. The aim is seamless
collaboration across the units in order to enhance synergies and productivity
as well as to implement best practices and efficient business processes. In
2014 focus was on improving production speed and yield.
The building and strengthening of global functions continued in 2014. A new
global sales organization structure was introduced where the sales is
region-based instead of being factory-based. Now the sales persons sell the
entire Exel Group product portfolio regardless of their location.
Group-wide practices are supported by our global ERP- and CRM-programs, which
are in use in all the units. A decision to renew the ERP-program based on the
harmonized processes was made at the end of the year.
Environment, health and safety
Exel Composites continues to remain vigilant to ensure our site operations are
compliant with all national and international rules and regulations. A safe
environment for our employees and neighbors is a priority at Exel Composites.
The Group plays a leading role in industry associations such as EuCIA (European
Composites Industry Association). This helps us stay at the leading edge of
awareness of the latest developments in environmental matters including
advances in environmental technology and new regulatory measures.
Special attention was given to occupational health and safety in 2014. The
Group is rolling out the Occupational Health and Safety Management System OHSAS
18001 over all sites. Exel Composites' environmental issues are managed using
ISO 14001 standard as a guideline in all the units of the Group.
Incentive programs
Exel Composites' performance-based incentive program covers all employees.
Salaried employees receive a monthly salary and an annual bonus tied to the
attainment of annually established goals emphasizing growth and profitability.
Non-salaried employees are also eligible for incentive compensation. Their
annual bonus is mainly based on productivity.
The Group has long-term incentive programs for the President and CEO and the
Group Management Team and selected key employees of the Company. The aim of the
programs is to combine the objectives of the shareholders and the executives in
order to increase the value of the Company, to commit the executives to the
Company and to offer the executives a competitive reward program based on
holding the Company's shares. The Board of Directors makes the decision on the
programs annually.
In February 2014 Exel Composites' Board of Directors approved a new program for
selected key employees of the Company. The program is based on long-term
monetary incentive program and is targeted at some 20 executives for the
earning period 2014-2016. The President and CEO and the members of the Group
Management Team are included in the target group of the new incentive program.
The 2014 program includes one earning period, the calendar years 2014-2016. The
potential long-term monetary performance reward from the program is based on
the Group's cumulative Economic Profit and on the Group's Total Shareholder
Return (TSR). The potential reward will be paid in 2017. The maximum reward to
be paid will be one million EUR.
No reward will be paid to an executive, if his or her employment or service
with the Group Company ends before the reward payment for reasons other than
retirement unless the Board decides otherwise.
The cost of the programs will be accounted for as operating expenses during the
duration of the program and accrued for in the financial statements according
to IFRS 2 -standard.
Corporate Governance
Exel Composites issues a Corporate Governance Statement for the financial year
2014. 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 2014
The Annual General Meeting of Exel Composites Plc held on 27 March 2014
approved the Board's proposal not to distribute any dividend for the financial
year 2013.
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 30 June 2015.
Board of Directors and Auditors
On 27 March 2014, the Annual General Meeting appointed Heikki Hiltunen, Peter
Hofvenstam, Göran Jönsson and Reima Kerttula to continue on the Board of
Directors. Kerstin Lindell was appointed as a new member of the Board as Heikki
Mairinoja was no longer available for re-election. 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 2014 and the average attendance rate
at these meetings was 98 per cent. The fees paid to the Board of Directors
totaled EUR 141 (163) thousand in 2014.
The Board of Directors reviewed the independence of Board members in accordance
with Recommendation 15 of the Corporate Governance Code in its April 2014
meeting. Heikki Hiltunen, Reima Kerttula and Kerstin Lindell are independent
Board members. Peter Hofvenstam was considered as independent from the Company,
but non-independent from a major shareholder until 10 June 2014, since he was
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 2014. In 2014 the Nomination
Board comprised Jari Kivihuhta (Nordea Bank Finland Plc) as Chairman, Tuomas
Virtala (Danske Capital Finland), Magnus von Knorring (Fondita Funds Management
Company Ltd), Karri Alameri (OP Financial Group), and Peter Hofvenstam, the
Chairman of the Board of Directors, as an expert member. The Nomination Board
met 4 times.
Ernst & Young, Authorized Public Accountants, with Juha Hilmola, APA, as
principal auditor, were elected to serve as company auditor in the AGM in 2014.
The fees paid to the auditors for audit services totaled EUR 163 (176) thousand
and for non-audit services EUR 51 (71) thousand in 2014.
Changes in Group Management
Mr. Riku Kytömäki was appointed President and CEO and member of the Group
Management Team as of 2 January 2014.
Ms. Tiina Hiltunen was appointed Senior Vice President Human Resources and
member of the Group Management Team as of 1 August 2014.
Major near-term risks and uncertainties
The most significant near-term business risks are related to the general
economic development, government regulations and financial crisis in the Euro
area as well as to market demand. Continuing low demand in the Australian
market may require further corrective actions which can have an impact on the
profitability. The possible uncertainties in the Russian and East-European
markets will have limited direct impact on Exel Composites.
Raw material prices, energy cost and other cost increases may continue to put
pressure on profitability. The new European Community's anti-dumping tariffs
imposed on Chinese glass fiber may have a negative effect on the result in
terms of increased raw material prices. 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 2014 that are applicable to Exel Composites'
business operations, including all SIC- and IFRIC-interpretations thereon, have
been complied with when preparing year 2014 and comparable year 2013 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 review period
On 13 January 2015 Mr. Mikko Kettunen, 38, was appointed SVP, CFO and member of
Exel Composites Plc's Group Management Team as of 7 April 2015. Mr. Kettunen
succeeds Mr. Ilkka Silvanto, 63, who has been appointed SVP, Strategic
Projects, effective as of 7 April 2015, and will continue reporting to CEO and
being member of Group Management Team.
The Board of Directors of Exel Composites Plc has on 12 February 2015 approved
a new incentive program for the executives of the Company. The aim of the new
program is to combine the objectives of the shareholders and the executives in
order to increase the value of the Company, to commit the executives to the
Company and to offer the executives a competitive reward program. The new
program is based on a long-term monetary performance reward, and the program is
targeted at approximately 25 executives for the earning period 2015 − 2017. The
CEO and members of the Group Management Team are included in the target group
of the new incentive program.
The new program includes one earning period, the calendar years 2015 − 2017.
The potential long-term monetary performance reward from the program for the
earning period 2015 - 2017 will be based on the Group's cumulative Economic
Profit and on the Group's Total Shareholder Return (TSR).
The potential reward from the earning period 2015 - 2017 will be paid in 2018.
No reward will be paid to an executive, if his or her employment or service
with the Group Company ends before the reward payment unless the executive is
leaving the Company due to retirement.
The maximum reward to be paid on the basis of the earning period 2015 - 2017
will be EUR 1.5 million.
The Board of Directors of Exel Composites has on 12 February 2015 made a
decision to expand its operations in Austria to meet the increased customer
demand. By this investment Exel Composites will be in a better position to
serve its Central and Southern European customers. The target is to more than
double the production capacity in Austria. The total cost estimate of the
project is EUR 8 million. The expansion project will be launched in the first
half of 2015 and it is estimated to be completed during the second half of
2016.
Outlook for full year 2015
The market has stabilized and we can see positive signs in the Company's key
market segments. However, uncertainties relating to general growth prospects in
the economy continue. The Company implements its new strategy by reinforcing
the organization, especially in sales resources, product development and
operations development, and by increasing its capacity. These efforts are
expected to reduce the 2015 operating profit margin compared to 2014, but will
position the Company better for long-term profitable growth.
Board proposal for dividend distribution
Exel Composites' financial goals include distributing dividends equal to some
40 per cent of the profit for the financial year as permitted by the financial
structure and growth opportunities.
On 31 December 2014 Exel Composites Plc's distributable funds totaled EUR
13,551 thousand, of which profit for the financial period accounted for EUR
2,781 thousand.
The financial position of the Group is strong. The Board has therefore decided
to propose to the Annual General Meeting that a dividend of EUR 0.20 (EUR 0.00)
per share, a payout ratio of 41.7 per cent, be paid for the 2014 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 30 March 2015. If the Annual General
Meeting approves the Board's proposal, the dividend will be paid on 8 April
2015.
Annual General Meeting
The Annual General Meeting will be held on Thursday 26 March 2015 beginning at
10.30 am at Scandic Marina Congress Center at the address of Katajanokanlaituri
7, Helsinki, Finland.
Financial reporting in 2015
The 2014 Annual Report will be published on the Company's website on Thursday 5
March 2015 at www.exelcomposites.com.
The Group will issue quarterly interim reports on 6 May, 24 July and 23 October
2015.
Press conference
Exel Composites will hold an analyst and press conference regarding the
financial statements today Friday 13 February 2015 at 12.30 pm at Scandic Hotel
Simonkenttä at Tapiola meeting room at the address of 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, 13 February 2015
Board of Directors of Exel Composites Plc
For further information, please contact:
Riku Kytömäki, President and CEO
tel. +358 50 511 8288, or email riku.kytomaki@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 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 OMX Helsinki Ltd.
Summary of Financial Statements and notes to the Financial Statements 1 January
- 31 December 2014
Accounting principles:
These Financial Statements have been prepared in accordance with IAS 34,
Interim Financial Reporting. The same accounting policies have been followed as
in the previous Financial Statements. Key indicator calculations remain
unchanged and have been presented in the 2014 Financial Statements.
Preparation of financial statements in accordance with the IFRS standards
requires Exel Composites' management to make estimates and assumptions that
have an effect on the amount of assets and liabilities on the balance sheet at
the closing date as well as the amounts of income and expenses for the
financial period. In addition, the management must exercise its judgement
regarding the application of accounting policies. Since the estimates and
assumptions are based on the views at the date of the Financial Statements,
they include risks and uncertainties. The actual results may differ from the
estimates and assumptions.
The amounts presented in the income statement and balance sheet are Group
figures. The amounts presented in the release are rounded, so the sum of
individual figures may differ from the sum reported. The financial statements
are audited and the auditor's report for the financial statements has been
issued.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
EUR thousand 1.10. - 1.10. - Change 1.1. - 1.1. - Change
31.12. 31.12. , % 31.12. 31.12. , %
2014 2013 2014 2013
Net sales 21,071 17,770 18.6 79,253 69,290 14.4
Materials and services -7,992 -6,443 -24.0 -29,134 -26,037 -11.9
Employee benefit expenses -6,068 -5,388 -12.6 -22,691 -21,128 -7.4
Depreciation and impairment -631 -683 7.6 -3,115 -2,691 -15.8
Other operating expenses -4,473 -4,035 -10.9 -16,133 -15,258 -5.7
Other operating income 162 267 -39.3 707 667 6.0
Operating profit 2,069 1,486 39.2 8,887 4,843 83.5
Net financial items -62 9 -788.9 -430 -286 -50.3
Profit before tax 2,007 1,495 34.2 8,457 4,557 85.6
Income taxes -542 -705 23.1 -2,754 -1,477 -86.5
Profit/loss for the period 1,466 790 85.6 5,702 3,080 85.1
Other comprehensive income:
Exchange differences on -114 -620 81.6 1,370 -2,174 163.0
translating foreign
operations
Income tax relating to 0 0 0.0 0 0 0.0
components of other
comprehensive income
Items that will not be
reclassified to profit or
loss:
Defined benefit plan -90 0 -90 0
actuarial
gains(+)/loss(-), net of
tax
Other comprehensive income, -204 -620 67.1 1,280 -2,174 158.9
net of tax
Total comprehensive income 1,262 170 642.4 6,983 906 670.8
Profit/loss attributable
to:
Equity holders of the 1,466 790 5,702 3,080
parent company
Comprehensive income
attributable to:
Equity holders of the 1,262 170 6,983 906
parent company
Earnings per share, diluted 0.12 0.07 0.48 0.26
and undiluted, EUR
CONDENSED CONSOLIDATED BALANCE SHEET
EUR thousand 31.12.2014 31.12.2013 Change
ASSETS
Non-current assets
Goodwill 9,676 9,383 293
Other intangible assets 686 921 -235
Tangible assets 12,533 10,796 1,737
Deferred tax assets 285 641 -356
Other non-current assets 74 70 4
Non-current assets total 23,253 21,821 1,433
Current assets
Inventories 10,034 7,936 2,098
Trade and other receivables 10,906 9,273 1,633
Cash at bank and in hand 8,218 9,438 -1,220
Current assets total 29,158 26,648 2,510
Total assets 52,411 48,468 3,943
EQUITY AND LIABILITIES
Shareholders´ equity
Share capital 2,141 2,141 0
Other reserves 79 72 7
Invested unrestricted equity fund 2,539 2,539 0
Translation differences 3,534 2,164 1,370
Retained earnings 15,724 12,844 2,880
Profit for the period 5,702 3,080 2,622
Total equity attributable to equity holders of 29,720 22,841 6,879
the parent company
Total equity 29,720 22,841 6,879
Non-current liabilities
Interest-bearing liabilities 4,623 1,761 2,862
Interest-free liabilities 454 402 52
Deferred tax liabilities 505 440 65
Current liabilities
Interest-bearing liabilities 1,000 11,105 -10,105
Trade and other non-current liabilities 16,110 11,920 4,190
Total liabilities 22,692 25,628 -2,936
Total equity and liabilities 52,411 48,468 3,943
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
EUR thousand Share Other Invested Translati Retaine Total
Capita Reserv Unrestricted on d
l es Equity Fund Differenc Earning
es s
Balance at 1 January 2,141 45 8,488 4,337 16,427 31,438
2013
Comprehensive result 0 0 0 -2,174 3,080 906
Other items 0 27 0 0 -14 14
Additional capital -5,948 -5,948
repayment
Dividend 0 -3,569 -3,569
Balance at 31 December 2,141 72 2,539 2,164 15,924 22,841
2013
Balance at 1st January 2,141 72 2,539 2,164 15,924 22,841
2014
Comprehensive result 0 0 1,370 5,702 7,072
Defined benefit plan -90 -90 actuarial
gains(+)/loss(-), net
of tax
Other items 0 7 0 0 -7 0
Dividend 0 0
Correction of an error -104 -104
in previously issued
financial statements*
Balance at 31 December 2,141 79 2,539 3,534 21,426 29,720
2014
*Correction of actuarial losses in prior year related to the pension liability
in Exel Composites N.V.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
EUR thousand 1.1. - 31.12. 1.1. - Change
2014 31.12.
2013
Cash Flow from Operating Activities
Profit for the period 5,702 3,080 2,622
Adjustments 7,425 4,088 3,337
Change in working capital 455 1,658 -1,203
Cash Flow Generated by Operations 13,582 8,826 4,756
Interest paid -167 -213 46
Interest received 56 39 17
Other financial items -328 -196 -132
Income taxes paid -2,464 -668 -1,796
Net Cash Flow from Operating Activities 10,679 7,788 2,891
Cash Flow from Investing Activities
Capital expenditure -4,354 -2,767 -1,587
Proceeds from sale of fixed assets 0 0 0
Cash Flow from Investing Activities -4,354 -2,767 -1,587
Cash Flow from Financing
Share issue 0 0 0
Proceeds from long-term borrowings 5,000 0 5,000
Instalments of long-term borrowings -2,840 -5,000 2,160
Change in short-term loans -9,700 9,700 -19,400
Instalments of finance lease liabilities -5 -11 6
Additional capital repayment 0 -5,948 5,948
Dividends paid 0 -3,569 3,569
Net Cash Flow from Financing -7,545 -4,828 -2,717
Change in Liquid Funds -1,220 193 -1,413
Liquid funds in the beginning of period 9,438 9,245 193
Change in liquid funds -1,220 193 -1,413
Liquid funds at the end of period 8,218 9,438 -1,220
QUARTERLY KEY FIGURES
EUR thousand IV/ III/ II/ I/ IV/ III/ II/ I/
2014 2014 2014 2014 2013 2013 2013 2013
Net sales 21,071 18,950 21,420 17,811 17,770 17,075 17,548 16,897
Materials and -7,992 -6,876 -8,290 -5,976 -6,443 -6,709 -6,455 -6,430
services
Employee benefit -6,068 -5,595 -5,635 -5,393 -5,388 -4,983 -5,448 -5,309
expenses
Depreciation and -631 -1,167 -654 -663 -683 -650 -684 -673
impairment
Operating -4,473 -3,621 -3,949 -4,089 -4,035 -3,731 -3,510 -3,981
expenses
Other operating 162 185 161 200 267 79 159 163
income
Operating profit 2,069 1,875 3,054 1,890 1,486 1,081 1,609 666
Net financial -62 -22 -118 -229 9 -271 -48 24
items
Profit before 2,007 1,853 2,935 1,661 1,495 810 1,562 691
taxes
Income taxes -542 -962 -706 -545 -705 -237 -399 -136
Profit/loss for 1,466 891 2,229 1,116 790 573 1,162 555
the period
Earnings per 0.12 0.07 0.19 0.09 0.07 0.05 0.10 0.05
share, EUR
Earnings per 0.12 0.07 0.19 0.09 0.07 0.05 0.10 0.05
share, EUR,
diluted
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 451 427 427 418 417 427 427 436
of personnel
COMMITMENTS AND CONTINGENCIES
EUR thousand 31.12.2014 31.12.2013
On own behalf
Mortgages 2,783 2,783
Corporate mortgages 12,500 12,500
Lease liabilities
- in next 12 months 896 810
- in next 1-5 years 1,414 994
Other commitments 6 6
DERIVATIVE FINANCIAL INSTRUMENTS
Nominal values 31.12.2014 31.12.2013
EUR thousand
Interest rate derivatives
Interest rate swaps 3,000 5,000
Purchased interest rate options 0 0
CONSOLIDATED KEY FIGURES
EUR thousand 1.1. - 31.12. 1.1. - Change, %
2014 31.12.
2013
Continuing operations
Net sales 79,253 69,290 14.3
Operating profit 8,887 4,843 83.5
% of net sales 11.2 7.0
Profit before tax 8,457 4,557 85.6
% of net sales 10.7 6.6
Profit for the period 5,702 3,080 85.1
% of net sales 7.2 4.4
Shareholders' equity 29,720 22,841 30.1
Interest-bearing liabilities 5,623 12,866 -56.3
Cash and cash equivalents 8,218 9,438 -12.9
Net interest-bearing liabilities -2,595 3,428 -175.7
Capital employed 35,342 35,707 -1.0
Return on equity, % 21.7 11.3
Return on capital employed, % 25.2 13.0
Equity ratio, % 56.9 47.2
Net gearing, % -8.7 15.0
Capital expenditure 4,354 2,767 57.4
% of net sales 5.5 4.0
Research and development costs 1,837 1,511 21.6
% of net sales 2.3 2.2
Order stock 12,833 10,458 22,7
Earnings per share, EUR 0.48 0.26 84.6
Earnings per share, EUR, diluted 0.48 0.26 84.6
Equity per share, EUR 2.50 1.92 30.2
Average number of shares
- cumulative 11,897 11,897
- cumulative, diluted 11,897 11,897
Average number of employees 433 427 1.4
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