Exel Composites Oyj - Interim report (Q1 and Q3)

Exel Composites' Business Review Q1 2024: Order intake EUR 28.6 million, revenue EUR 23.4 million and adjusted operating profit EUR -0.6 million

EXEL COMPOSITES PLC           STOCK EXCHANGE RELEASE  25 APRIL 2024 at 9:00 EEST

Q1 2024 in brief

  · Order intake increased by 8.7% to EUR 28.6 million (Q1 2023: 26.3)
  · Revenue decreased by 18.9% to EUR 23.4 million (28.8)
  · Operating profit declined to EUR -0.6 million (-0.3), operating profit
margin -2.4% (-1.0%)
  · Adjusted operating profit declined to EUR -0.6 million (0.0), operating
profit margin -2.4% (0.0%)
  · Earnings per share amounted to EUR -0.05 (-0.18)

Guidance for the full year 2024

Exel Composites expects revenue to increase and adjusted operating profit to
increase significantly in 2024 compared to 2023.

President and CEO, Paul Sohlberg

Encouraging improvements in order intake and profitability during the quarter

We opened the year with clear improvement in our market-facing activities. Our
order intake for the first quarter amounted to EUR 28.6 million, which
represents an increase of 21% quarter-on-quarter, and an increase of 9% compared
to the same period last year. At the end of this first quarter our order backlog
stood at EUR 34.9 million, showing an increase of 32% compared to a year ago. We
continued to witness signs of increased customer activity in all geographies,
and we continue to remain cautiously optimistic of an improving market
environment this year, in line with our guidance.

Revenue in the first quarter was EUR 23.4 million (28.8). This represents an
improvement of 5.8% from the fourth quarter 2023, despite being affected by the
strikes in Finland this spring. The lower revenue compared to the same period
last year was due to the timing of order arrivals, only part of which could be
realized into revenue in this first quarter. It was pleasing to see revenue
growth quarter-on-quarter and year-on-year in our North American operations
following completion of the strategic factory review last year. Otherwise,
Exel's revenue stayed at a lower level in all customer industries and in Europe
and Asia-Pacific year-on-year.

As a result of our focus on efficiency, our adjusted operating loss more than
halved to EUR 0.6 million from the fourth quarter 2023, nearing us to the break
-even we achieved a year ago. Our efforts to manage our working capital and
costs continued, and will continue through this year. While the relative
variable cost level improved during the first quarter, we have further
opportunity to improve the efficiency of our operations and the cost structure
by increasing the utilization of our capacity and adjusting our cost.

New strategy getting traction with customers and within Exel

An important pillar of our new transformative strategy is to seek organic growth
from the large and fast-growing applications driven by the energy transition and
decarbonization. In full alignment with this target, we had the pleasure of
announcing two new customer agreements in the quarter. The first one is in our
Transportation customer industry where a new multi-year agreement was signed
with Foton Bus and Coach company for the delivery of pultruded composite
profiles for Foton's electric buses. Following intensive preparations and
development work together with the customer, this agreement offers significant
business potential to Exel going forward. The other new customer engagement is
in our Energy customer industry where we signed a multi-year agreement through
our joint venture Kineco Exel Composites India (KECI), for the supply of
pultruded carbon fiber planks for spar caps to a major wind turbine manufacturer
in South Asia. These products will be delivered from our new factory under
development in India.

We continued to decisively progress the implementation of our new transformative
strategy also within Exel.  During the first quarter, we started the second
strategic factory review, this time concerning our Belgium operations. We also
put in place the new operating model geared around our two new business units,
the Engineered Solutions BU and Industrial Solutions BU and changed our
organization structure to be in full alignment. This was also reflected in our
Group leadership team.

In line with our strategy and following extensive analysis and preparations, we
have announced today that Exel will be proposing to its shareholders a rights
issue of Exel shares. We are convinced this is the right accelerator for our
future growth and transformation. We are pleased to do it in a way that offers
every Exel shareholder equal opportunity to participate.

Outlook for 2024

Exel Composites expects revenue to increase and adjusted operating profit to
increase significantly in 2024 compared to 2023. Our order backlog for 2024 is
higher than it was a year ago. While the order intake early this year was at a
higher level than before, the visibility to continued favorable market
development is still limited. Considering the overall economic sentiment, we
continue to expect demand to be somewhat soft in the first half of 2024 while
Exel will continue to have free production capacity.

The progress made during this first quarter is pleasing, albeit not yet
satisfactory. We will continue working hard according to our strategic plan. The
proposed rights issue is an important accelerator of our strategy, and we hope
that all of our shareholders will continue to support our journey.

Consolidated key figures

EUR thousand                    Q1 2024  Q1 2023  Change %

Revenue                         23,365   28,803   -18.9
Operating profit                -555     -283     -96.0
% of revenue                    -2.4     -1.0
Adjusted operating profit 1)    -555     6        -9788.5
% of revenue                    -2.4     0.0
EBITDA                          905      1,479    -38.8
Adjusted EBITDA 1)              905      1,768    -48.8
Profit before tax               -607     -1,475   58.8
Profit for the period           -598     -2,138   72.0
Profit for the period           -539     -2,090   74.2
excluding non-controlling
interest
% of revenue                    -2.3     -7.3
Shareholders' equity            16,725   28,029   -40.3
Interest-bearing liabilities    46,148   49,255   -6.3
Cash and cash equivalents       10,207   14,746   -30.8
Net interest-bearing            35,941   34,509   4.1
liabilities
Net debt to adjusted EBITDA 2)  11.2     2.7      314.8
Capital employed                62,873   77,284   -18.6
Return on equity, %             -13.9    -29.3    52.5
Return on capital employed, %   -3.4     -1.4     -141.0
Equity ratio, %                 19.4     26.4     -26.4
Net gearing, %                  214.9    123.1    74.5
Net cash flow from operating    -2,611   -2,790   -6.4
activities
Net cash flow from investing    -432     -479     -9.8
activities
Capital expenditure             441      761      -42.1
% of revenue                    1.9      2.6
Research and development costs  1,077    948      13.6
% of revenue                    4.6      3.3
Order intake                    28,615   26,331   8.7
Order backlog                   34,893   26,488   31.7
Earnings per share, diluted     -0.05    -0.18    74.2
and undiluted, EUR
Equity per share, EUR           1.39     2.33     -40.20
Average share price, EUR        2.34     5.08     -53.9
Average number of shares,       11,854   11,854   0.0
diluted and undiluted, 1,000
shares
Employees, average              623      723      -13.8
Employees, end of period        626      728      -14.0

1) Excluding material items affecting comparability, such as restructuring
costs, impairment losses and reversals, and costs related to planned or realized
business acquisitions or disposals

2) Last 12 months' adjusted EBITDA

Revenue by customer industry

                              Q1      Q1      Change
EUR thousand                  2024    2023    %
Buildings and infrastructure  4,801   5,654   -15.1
Industrial                    3,357   5,490   -38.9
Energy                        5,315   6,226   -14.6
Transportation                3,937   4,356   -9.6
Other                         5,955   7,077   -15.9
Total                         23,365  28,803  -18.9

Revenue by region1)

                   Q1      Q1      Change
EUR thousand       2024    2023    %
Europe             14,337  20,315  -29.4
North America      5,927   5,116   15.8
Asia-Pacific       2,602   3,207   -18.9
Rest of the world  499     165     203.0
Total              23,365  28,803  -18.9

1) Revenue by customer location

Vantaa, 25 April 2024

Exel Composites Plc
Board of Directors

Financial results briefing

Q1/2023: Exel Composites will hold a financial results briefing regarding the Q1
2024 results today at 12:30 EEST. Please participate in the online event
here (https://teams.microsoft.com/l/meetup
-join/19%3ameeting_ZmNmYTk3ODEtZWVhNC00YmU3LTgwODItNWI4NjdlMjg5OWIy%40thread.v2/0
?context=%7b%22Tid%22%3a%22d9f8eaa3-8213-467f-9971
-5d2b15d45183%22%2c%22Oid%22%3a%2227b3f373-0ba6-490e-b866-ac6a709c4744%22%7d).

For further information, please contact:

Mikko Rummukainen, CFO

tel. +358 20754 1335

mikko.rummukainen@exelcomposites.com

Exel Composites in brief

Exel Composites is one of the largest manufacturers of composite profiles and
tubes made with pultrusion and pullwinding technologies and a pultrusion
technology forerunner in the global composite market. Our forward-thinking
composite solutions made with continuous manufacturing technologies serve
customers in a wide range of industries around the world. You can find our
products used in applications in diverse industrial sectors such as wind power,
transportation and building and infrastructure.

Our R&D expertise, collaborative approach and global footprint set us apart from
our competition. Our composite solutions help customers save resources, reduce
products' weight, improve performance and energy efficiency, and decrease total
lifetime costs. We want to be the first choice for sustainable composite
solutions globally.

Headquartered in Finland, Exel Composites employs over 600 forward-thinking
professionals around the world and is listed on Nasdaq Helsinki. To find out
more about our offering and company please visit www.exelcomposites.com.

Attachments:

20240425 Business Review Q1 2024 EN final.pdf