Exel Composites Oyj - Half Year financial report

Exel Composites Plc’s Half-Year Financial Report January–June 2019: “Business volume continued on a good level, cost savings program progressed according to plan”

EXEL COMPOSITES PLC     HALF-YEAR FINANCIAL REPORT     23 JULY 2019 at 10:00 EET
Q2 2019 in brief

  ·  Order intake decreased by 4.7% to EUR 23.8 million (Q2 2018: 25.0).
  ·  Revenue increased by 4.8% to EUR 26.5 million (25.3).
  ·  Adjusted operating profit increased to EUR 2.2 million (2.0), representing
8.5% of revenue (7.8).
  ·  Net cash flow from operating activities was EUR 2.9 million (-1.1).
  ·  Earnings per share amounted to EUR 0.14 (0.09).

Q1-Q2 2019 in brief

  ·  Order intake increased by 10.6% to EUR 52.0 million (Q1-Q2 2018: 47.0).
  ·  Revenue increased by 14.5% to EUR 53.6 million (46.8).
  ·  Adjusted operating profit increased to EUR 4.2 million (3.8), representing
7.8% of revenue (8.0).
  ·  Net cash flow from operating activities was EUR 3.8 million (-1.3).
  ·  Earnings per share amounted to EUR 0.10 (0.17).

Outlook for full year 2019 (unchanged)

Exel Composites expects revenue and adjusted operating profit to increase in
2019 compared to 2018.

President and CEO, Riku Kytömäki

In the second quarter of 2019 revenue increased slightly. The net increase was
mainly related to the acquisition of Diversified Structural Composites, DSC,
which was consolidated into Group accounts as of May 2018. The strong revenue
growth in the Construction & Infrastructure customer segment continued in the
second quarter, supported by the wind energy industry. However, within the
Industrial Applications customer segment the telecommunications industry
decreased and partly offset the strong increase in wind energy. Other
Applications grew compared to previous year.

Geographically, revenue grew significantly in the region Rest of the World,
supported by the acquisition of DSC and export from other Exel regions to the
American market. The revenue decrease in Asia-Pacific in the second quarter
reflected mainly the decrease in telecommunications volumes. Revenue in Europe
was flat compared to last year.

Adjusted operating profit in the second quarter improved slightly compared to
last year. The Group’s cost savings program is progressing according to plan.
According to current estimates the annual savings target of EUR 3 million,
expected to be fully effective in 2020, will be reached. Whereas in the first
quarter we focused on the closing of production in Germany (completed in April),
the focus in the second quarter was on further improving DSC’s cost structure.
We expect effects from the improvements already in the third quarter and
onwards. In the second quarter, DSC still reported an operating loss. In China
we have continued the process to maximize synergy savings. We have identified a
new manufacturing location where production from both of the existing factories
can be consolidated. The new location complies with modern and more stringent
standards for chemical industries in China.

In June 2019, we confirmed our strategy and our long-term financial targets for
2019-2022. We also introduced a target for net gearing. Our overall strategic
directions remain unchanged. In June, in line with our strategy, we announced
the decision to expand operations in Kapfenberg, Austria. The construction of a
new facility is expected to be completed in the second half of 2020 at an
estimated total cost of EUR 7 million. With the considerable increase in
production capacity Exel is set for further growth in Central Europe and we can
better serve customers especially in the Industrial Applications customer
segment.

Consolidated key figures

EUR         1.4.–30.6.  1.4.–30.6.  Change,  1.1–30.6.  1.1.–30.6.  Change,
1.1.–31.12.
thousand          2019        2018        %       2019        2018        %
2018
Order           23,821      25,004     -4.7     51,977      46,975     10.6
100,757
intake
Order           21,977      19,828     10.8     21,977      19,828     10.8
23,685
backlog 1)
Revenue         26,482      25,277      4.8     53,572      46,796     14.5
96,608
Operating        2,144       1,321     62.3      2,549       2,951    -13.6
2,217
profit
% of               8.1         5.2                 4.8         6.3
2.3
revenue
Adjusted         2,239       1,973     13.5      4,196       3,759     11.6
5,018
operating
profit 2)
% of               8.5         7.8                 7.8         8.0
5.2
revenue
Profit for       1,649       1,062     55.3      1,186       1,981    -40.1
386
the period
Net cash         2,860      -1,114    356.8      3,802      -1,277    397.7
868
flow from
operating
activities
3), 4)
Return on         14.1        10.3                 8.7        11.4
4.4
capital
employed,
%
Net              123.1        87.2               123.1        87.2
96.3
gearing, %
3)
Earnings          0.14        0.09                0.10        0.17
0.03
per share
Equity per        2.12        2.34     -9.8       2.12        2.34     -9.8
2.18
share, EUR
Employees          652         652      0.0        671         613      9.4
647
on average

1) As per the end of the period.
2) 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.
3) Exel Composites Plc has applied the IFRS16 -standard since 1.1.2019 according
to the model where the comparative information of previous periods is not
adjusted.
4) IFRS16 rental payments have been classified to financing activities in the
cash flow statement. This impacted net cash flow from operating activities in Q2
2019 with EUR 284 thousand and EUR 545 thousand in H1 2019.

Exel Composites’ Half-year Financial Report January–June 2019 is available in
full in pdf format as an attachment to this release. The report and the related
presentation are also available at the company’s website under the Investor
section.

Vantaa, 23 July 2019

Exel Composites Plc
Board of Directors
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 is the world’s leading composite technology company that
engineers and manufactures composite products and solutions to an extensive
range of demanding industrial applications.

The core of the business is based on the employees’ high level of expertise and
own, internally developed composite technologies, which have been perfected over
decades with a steady focus on innovation. With nine manufacturing plants across
Europe, Asia, and North America, and a global sales network, Exel Composites is
firmly driven by superior customer experience and world-class operations.

Headquartered in Finland, Exel Composites employs approximately 650 people
globally. The company’s shares are listed on the Nasdaq Helsinki exchange.

www.exelcomposites.com

Attachments:

07152873.pdf