Exel Composites Oyj - Interim report (Q1 and Q3)

Exel Composites Plc’s January – March Business Review 2017: “Significant improvement in operating profit”

EXEL COMPOSITES PLC            STOCK EXCHANGE RELEASE            4 MAY 2017 at
09:00 EET
Q1 2017 in brief

  ·  Order intake increased by 24.7% to EUR 22.5 million (Q1 2016: 18.0).
  ·  Revenue increased by 13.3% to EUR 20.3 million (17.9).
  ·  Operating profit amounted to EUR 1.7 million (0.1), which is 8.2% of
revenue (0.8%).
  ·  Net cash flow from operating activities was EUR -0.8 million (-0.9).
  ·  Earnings per share amounted to EUR 0.09 (0.00).

Outlook for full year 2017

Exel Composites reiterates its outlook for 2017 and estimates that revenue with
current company structure (i.e. without the Chinese company acquisition) will
increase from previous year level and adjusted operating profit will be higher
than previous year level. In 2016, Exel Composites’ revenue was EUR 73.1 million
and adjusted operating profit was EUR 2.6 million.

President and CEO, Riku Kytömäki

The year 2017 has started off well: we have made clear improvement on the
quarterly key figures as well as solid progress with respect to the
implementation of our growth strategy. During the first quarter order intake was
strong and order backlog at the end of March improved further from the
relatively good level at the end of 2016. With increased order intake also
revenue increased during the first quarter. Key performance indicators i.e.
order intake, revenue and operating profit all improved. The significant
improvement in operating profit reflected increased revenues, a lower cost base
and an increased production yield.

The Industrial Applications segment contributed the most to revenue growth due
to the increased efforts and focus on new customer acquisition, which have
clearly gained momentum. Also the general market environment recovery is
contributing to the order intake and consequently revenue growth. The recent
increases in oil and metal prices are expected to gradually improve overall
market demand for composites. Revenue and order intake in the Asia-Pacific
(APAC) region, China in particular, has also clearly picked up during the first
quarter.

Operating profit has continued to improve since the third quarter of 2016,
driven by top line growth, increased production efficiency and reduced cost
level. We continue to see the impact of the cost savings measures from 2016 also
going forward. The main part of savings are related to personnel costs and to
the downsizing of our business unit in Australia.

The acquisition of the Chinese composites production company Nanjing Jianhui
(JHFRP), which was originally announced with a separate stock exchange release
at the end of October 2016, has been completed at the end of April. I am very
happy to have finalized this important step in the implementation of our growth
strategy in China. This acquisition strengthens our position in China, and
improves our export capacity to other growth markets in Asia. We now aim to
ensure a smooth integration of the business to the Exel Group. Exel’s existing
Chinese factory as well as that of the acquired business are both located in
Nanjing, which gives us the opportunity to realize operational synergies in
terms of production capacity and cost structure.

Consolidated key figures

EUR thousand        1.1.–31.3.  1.1.–31.3. 2016  Change, %  1.1.-31.12. 2016
                          2017
Order intake            22,480           18,032       24.7            74,778
Order backlog ¹         18,806           15,382       22.3            16,702
Revenue ²               20,296           17,919       13.3            73,079
Operating profit         1,655              146     1032.7               649
% of revenue               8.2              0.8                          0.9
Adjusted operating       1,665              149     1016.6             2,621
profit ³
% of revenue               8.2              0.8                          3.6
Profit for the           1,107               -2    53940.3               198
period
Net cash flow from        -848             -862       +1.6             3,129
operating
activities
Return on capital         17.4              1.5                          1.7
employed, %
Net gearing, %            16.5             15.8                         12.2
Earnings per share        0.09             0.00                         0.02
Equity per share,         2.37             2.32        2.5              2.27
EUR

¹ As per 31 March 2017.
² Revenue by customer segment in Q1 2017: Industrial Applications EUR 11.9
million (9.6), Construction & infrastructure EUR 4.1 million (4.1), Other
applications EUR 4.4 million (4.2).
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 regarding the Business
Review for investors, analysts and media on Thursday 4 May 2017 at 12:30 at
Scandic Hotel Simonkenttä’s Roba meeting room (address Simonkatu 9, Helsinki,
Finland).

Vantaa, 4 May 2017

Exel Composites Plc

Riku Kytömäki
President and 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.