Exel Composites Oyj - Inside information

INSIDE INFORMATION: Exel Composites is planning a rights offering of up to approx. EUR 23 million to accelerate the implementation of its transformative strategy and strengthen its capital structure

EXEL COMPOSITES PLC INSIDE INFORMATION    25 APRIL 2024 AT 09:35 EEST

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR TO
THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH
THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

Exel Composites Plc (“Exel Composites” or the “Company”) is planning a rights
offering to raise gross proceeds of up to approximately EUR 23 million (the
“Offering”) to accelerate its strategy implementation and strengthen its capital
structure. The Company has also agreed on a new financing agreement of EUR 52.4
million to refinance its existing bank loans, which is conditional on the
successful completion of the Offering.

Highlights of the Offering

  · Objective of the Offering is to accelerate the implementation of Exel
Composites' transformative strategy to reach its financial targets of over EUR
200 million annual revenue and over 10% adjusted operating profit margin
  · The Company aims to raise gross proceeds of up to approximately EUR 23
million in the Offering
  · With the proceeds, the Company seeks to accelerate necessary growth
investments, optimise its factory network, finance its working capital needs,
and to strengthen its capital structure

Background of the offering

Exel Composites announced a new transformative strategy on 2 October 2023 to
become a more integrated designer and manufacturer of pultruded composite
solutions for volume and customer-specific applications. Focus of the new
strategy is to grow organically within the volume and customer-specific
applications as well as improve the Company's profitability by increasing
efficiency in the Company's operations.

The new strategy will be delivered through the following focus areas:

  · Capturing organic profitable growth from large and fast-growing
sustainability-driven energy and decarbonisation applications
  · Focusing on increasing value to customers and helping them to choose
composites for their applications by offering engineering support,
productization and post-processing
  · Leveraging reorganised operating model, and
  · Having high ambition and focusing on rigorous execution

In connection with the strategy announcement, Exel Composites estimated the
required financing need for executing the transformative strategy, business
growth and working capital to be in the range of EUR 20-25 million during the
five-year strategy period. With the proceeds from the contemplated Offering, the
Company seeks to accelerate necessary growth investments, optimise its factory
network to gain efficiencies and finance working capital needs for expected
business growth. In addition, the Company seeks to strengthen its capital
structure and improve its cash flow and profitability through debt repayments.

President and CEO Paul Sohlberg comments:

“The implementation of our transformative strategy, announced in October 2023,
is moving ahead at speed. Our target is to grow organically within large and
fast-growing sustainability-driven energy and decarbonisation applications as
well as to improve our profitability by increasing efficiency. We have already
announced new customer agreements in the transportation and wind energy
industries. In addition, we have progressed in our factory network review and
implemented our new operating model based on two business units. The Offering
announced today allows us to accelerate the implementation of our transformative
strategy and to strengthen our capital structure. It has also been pleasing to
hear from various of our largest shareholders about their support for the new
strategy and the planned Offering.”

New financing agreement

The Company has agreed on a new financing agreement of EUR 52.4 million with its
main lenders, and the new financing agreement is conditional on the completion
of the Offering with net proceeds of at least EUR 20 million. The new financing
agreement will be used to refinance the Company's existing bank loans. The
maturity of the new financing is two years, which may be extended by one year by
an agreement between the Company and the lenders. The Company will use EUR 6.5
million of the net proceeds from the Offering to repay its debt.

Extraordinary General Meeting

The Offering is subject to an authorisation by the Extraordinary General Meeting
and a resolution by the Board of Directors of Exel Composites. Exel Composites
seeks an authorisation for the Offering in the Extraordinary General Meeting of
Exel Composites, which is to be held on 17 May 2024. Preliminarily and depending
on the market conditions, the subscription period of the Offering is estimated
to commence during the second quarter of calendar year 2024.

Advisors

Nordea Bank Abp and Danske Bank A/S, Finland Branch act as the joint global
coordinators of the Offering (the “Joint Global Coordinators”). Borenius
Attorneys Ltd acts as legal counsel to the Company. Roschier, Attorneys Ltd.
acts as legal counsel to the Joint Global Coordinators. Hill & Knowlton Finland
Oy acts as communications advisor to the Company.

For further information, please contact:

Mikko Rummukainen, CFO
tel. +358 20 754 1335
mikko.rummukainen@exelcomposites.com

Distribution:
Nasdaq Helsinki
Main media
https://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.

IMPORTANT NOTICE

This release is not an offer for sale of securities in the United States.
Securities may not be sold in the United States absent registration with the
United States Securities and Exchange Commission or an exemption from
registration under the U.S. Securities Act of 1933, as amended. The Company does
not intend to register any part of the Offering in the United States or to
conduct a public offering of securities in the United States.

The distribution of this release may be restricted by law, and persons into
whose possession any document or other information referred to herein comes
should inform themselves about and observe any such restrictions. The
information contained herein is not for publication or distribution, directly or
indirectly, in or into Australia, Canada, Japan or the United States. Any
failure to comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction. This release is not directed to, and
is not intended for distribution to or use by, any person or entity that is a
citizen or resident or located in any locality, state, country or other
jurisdiction where such distribution, publication, availability or use would be
contrary to law or regulation or which would require any registration or
licensing within such jurisdiction.

In any EEA Member State, other than Finland, and in the United Kingdom this
release is only addressed to and is only directed at qualified investors in that
Member State or in the United Kingdom within the meaning of Regulation (EU)
2017/1129 (the “Prospectus Regulation”), which forms part of domestic law in the
United Kingdom by virtue of the European Union (Withdrawal) Act 2018.

This release is only being distributed to and is only directed at (i) persons
who are outside the United Kingdom or are qualified investors within the meaning
of the Prospectus Regulation as it forms part of domestic law by virtue of the
European Union (Withdrawal) Act 2018 and are also; (ii) investment professionals
falling within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth
companies, and other persons to whom it may lawfully be communicated, falling
within Article 49(2)(a) to (d) of the Order (all such persons together being
referred to as “relevant persons”). Any securities mentioned herein are only
available to, and any invitation, offer or agreement to subscribe, purchase or
otherwise acquire such securities will be engaged in only with, relevant
persons. Any person who is not a relevant person should not act or rely on this
release or any of its contents.

This release does not constitute a prospectus as defined in the Prospectus
Regulation and as such, does not constitute or form part of and should not be
construed as, an offer to sell, or the solicitation or invitation of any offer
to buy, acquire or subscribe for, any securities or an inducement to enter into
investment activity.

Full terms, conditions and instructions for the Offering will be included in the
prospectus that will be prepared by the Company in connection with the Offering.
The Finnish-language prospectus will be published on the Company's website at
https://investors.exelcomposites.com/.

An investor is advised to read the prospectus before making an investment
decision to fully understand the risks and rewards associated with the
investment. The approval by the Finnish Financial Supervisory Authority of the
prospectus shall not be considered as an endorsement of the securities offered.

No part of this release, nor the fact of its distribution, should form the basis
of, or be relied on in connection with, any contract or commitment or investment
decision whatsoever. The information contained in this release has not been
independently verified. No representation, warranty or undertaking, expressed or
implied, is made as to, and no reliance should be placed on, the fairness,
accuracy, completeness or correctness of the information or the opinions
contained herein. The Company or any of its respective affiliates, advisors or
representatives or any other person, shall have no liability whatsoever (in
negligence or otherwise) for any loss however arising from any use of this
release or its contents or otherwise arising in connection with this release.
Each person must rely on their own examination and analysis of the Company, its
subsidiaries, its securities and the Offering, including the merits and risks
involved.

The Joint Global Coordinators are acting exclusively for the Company and no one
else in connection with the Offering. They will not regard any other person as
their respective client in relation to the Offering. The Joint Global
Coordinators will not be responsible to anyone other than the Company for
providing the protections afforded to their respective clients nor for giving
advice in relation to the Offering or any transaction or arrangement referred to
herein.

This release includes “forward-looking statements.” These statements may not be
based on historical facts, but are statements about future expectations. When
used in this release, the words “aims,” “anticipates,” “assumes,” “believes,”
“could,” “estimates,” “expects,” “intends,” “may,” “plans,” “should,” “will,”
“would” and similar expressions as they relate to the Company and the Offering
identify certain of these forward-looking statements. Other forward-looking
statements can be identified in the context in which the statements are made.
These forward-looking statements are based on present plans, estimates,
projections and expectations and are not guarantees of future performance. They
are based on certain expectations, which, even though they seem to be reasonable
at present, may turn out to be incorrect. Such forward-looking statements are
based on assumptions and are subject to various risks and uncertainties. Readers
should not rely on these forward-looking statements. Numerous factors may cause
the actual results of operations or financial condition of the Company to differ
materially from those expressed or implied in the forward-looking statements.
The Company or any of its affiliates, advisors or representatives or any other
person undertakes no obligation to review or confirm or to release publicly any
revisions to any forward-looking statements to reflect events that occur or
circumstances that arise after the date of this release.