2013-07-25 09:00:00 CEST
2013-07-25 09:00:08 CEST
REGULATED INFORMATION
Exel Composites Oyj - Interim report (Q1 and Q3)
Exel Composites Plc's interim report for January 1 - June 30, 2013
EXEL COMPOSITES PLC STOCK EXCHANGE RELEASE 25.7.2013 at
10.00
EXEL COMPOSITES PLC'S INTERIM REPORT FOR JANUARY 1 - JUNE 30, 2013
APRIL - JUNE 2013 HIGHLIGHTS
- Net sales were EUR 17.5 (19.8) million in the second quarter of 2013, down by
11.3 per cent on the previous year
- Operating profit was EUR 1.6 million in the second quarter of 2013 compared
to EUR 1.8 million in the second quarter of 2012, or 9.2 (9.2) per cent of net
sales
- Net cash flow from operating activities was positive at EUR +1.9 (+1.9)
million and on the same level as in the corresponding period in 2012
- Fully diluted earnings per share were EUR 0.10 (0.11)
JANUARY - JUNE 2013 HIGHLIGHTS
- Net sales were EUR 34.4 (40.3) million in the first six months of 2013, down
by 14.6 per cent on the previous year
- Operating profit was EUR 2.3 million in the first six months of 2013 compared
to EUR 3.6 million in the first six months of 2012, or 6.6 (9.0) per cent of
net sales
- Net cash flow from operating activities was positive at EUR +2.6 (+3.4)
million
- Fully diluted earnings per share were EUR 0.14 (0.22)
OUTLOOK FOR 2013
Major uncertainties relating to general growth prospects in the economy
continue. Visibility is low and the market pressure is expected to continue in
2013. The Company will continue to work on sales development and on adjusting
costs to market conditions. Additional contingency actions may be undertaken
which may impact the short-term profits, but protect long-term cash flow and
profitability.
COMMENTS BY THE CEO
“The market situation in Central Europe continued to be challenging. Net sales
were EUR 17.5 (19.8) million in the second quarter of 2013, a decrease of 11.3
per cent. Sales decreased especially in the Finnish units. Market demand
decreased in the building and construction as well as in the telecommunication
industries compared to the second quarter of 2012. However, demand improved in
the transportation industry, electrical industry and machine industry market
segments in the second quarter of 2013 compared to the the corresponding period
in 2012.
The Group's operating profit improved from the first quarter of 2013 and was
EUR 1.6 (1.8) million, i.e. 9.2 (9.2) per cent of net sales in the second
quarter of 2013. Due to cost-saving measures and other corrective actions
taken, we managed to maintain operating profit as a percentage of net sales on
the same level as in the corresponding period in 2012. Net cash flow from
operating activities was positive at EUR +1.9 (+1.9) million and on the same
level as in the corresponding period in 2012.
Exel Composites has during the first half of 2013 continued to develop several
new customer-specific applications, especially in the building and
construction, machine industry and transportation industry market segments.
Visibility is low and the market pressure is expected to continue. Corrective
actions have started to have a positive impact in the Australian and British
business units. Co-determination negotiations were started in June in the
Finnish business units due to weak demand and profitability. Corrective
measures will be continued in the whole Group. The focus will be on sales,
efficiency and yield improvement as well as on turnaround measures. Structural
changes will also be considered.
Despite the challenging situation the composite market is estimated to develop
positively in the longer run. Due to a healthy balance sheet and financial
position, Exel Composites is well-positioned when the market recovers.”
CONSOLIDATED KEY FIGURES, EUR million
(unaudited)
1.4. - 1.4. - Change 1.1. - 1.1.-30. Change, 1.1. -
30.6. 30.6. , 30.6. 6. % 31.12.
2013 2012 % 2013 2012 2012
Net sales 17.5 19.8 -11.3 34.4 40.3 -14.6 76.0
Operating profit 1.6 1.8 -11.4 2.3 3.6 -37.6 3.4
% of net sales 9.2 9.2 6.6 9.0 4.5
Profit for the period 1.2 1.3 -10.8 1.7 2.6 -34.3 2.0
Shareholders' equity 28.2 32.4 -13.0 28.2 32.4 -13.0 31.4
Net interest-bearing 1.3 2.5 47.2 1.3 2.5 -14.5 -1.1
liabilities
Capital employed 36.4 42.6 -14.5 36.4 42.6 39.6
Return on equity, % 16.3 16.6 11.5 15.5 6.1
Return on capital 17.8 18.4 12.0 17.3 8.4
employed, %
Equity ratio, % 55.7 56.8 55.7 56.8 61.0
Net gearing, % 4.6 7.6 4.6 7.6 -3.4
Earnings per share, 0.10 0.11 0.14 0.22 0.17
EUR
Earnings per share, 0.10 0.11 0.14 0.22 0.17
diluted, EUR
Equity per share, EUR 2.37 2.73 2.37 2.73 2.64
IFRS REPORTING
This interim report has been prepared in accordance with the recognition and
measurement principles of IFRS, which are the same as in the 2012 financial
statements.
FINANCIAL PERFORMANCE
APRIL - JUNE 2013
The market situation in Central Europe continued to be challenging.
The Group's net sales in April - June 2013 decreased by 11.3 per cent on the
corresponding period last year and were EUR 17.5 (19.8) million. Sales
decreased especially in the Finnish units. Market demand decreased in the
building and construction as well as in the telecommunication industries
compared to the second quarter of 2012. However, demand improved in the
transportation industry, electrical industry and machine industry market
segments in the second quarter of 2013 compared to the corresponding period in
2012.
The Group's operating profit improved from the first quarter of 2013 and was
EUR 1.6 (1.8) million, i.e. 9.2 (9.2) per cent of net sales in the second
quarter of 2013. Due to cost-saving measures and other corrective actions taken
we managed to maintain operating profit as a percentage of net sales on the
same level as in the corresponding period in 2012. Net cash flow from
operating activities was positive at EUR +1.9 (+1.9) million and on the same
level as in the corresponding period in 2012.
JANUARY - JUNE 2013
The Group's net sales in January - June 2013 were EUR 34.4 (40.3) million, a
decrease of 14.6 per cent on the previous year.
Exel Composites' operating profit in January - June 2013 was EUR 2.3 (3.6)
million or 6.6 (9.0) per cent of net sales. The main reasons for the decrease
were lower sales especially in the Finnish units. On the other hand,
cost-saving measures and other corrective actions taken had a positive impact
on the operating profit.
Exel Composites has during the first half of 2013 continued to develop several
new customer specific applications, especially in the building and
construction, machine industry and transportation industry market segments.
The Group's net financial expenses in January - June 2013 were EUR 0.0 (-0.1)
million. The Group's profit before taxes was EUR 2.3 (3.5) million and profit
after taxes EUR 1.7 (2.6) million.
Fully diluted total earnings per share were EUR 0.14 (0.22). Return on capital
employed was 12.0 (17.3) per cent. Return on equity was 11.5 (15.5) per cent.
BALANCE SHEET AND FINANCIAL POSITION
Net cash flow from operating activities was positive at EUR 2.6 (3.4) million.
Cash flow before financing, but after capital expenditure, amounted to EUR 1.2
(1.8) million.
Capital expenditure was financed with cash flow from business operations. At
the end of the review period, the Group's liquid assets stood at EUR 6.9 (7.7)
million.
The Group's consolidated total assets at the end of the period under review
were EUR 50.8 (57.2) million.
Interest-bearing liabilities amounted to EUR 8.2 (10.1) million. Net
interest-bearing liabilities were EUR 1.3 (2.5) million. Non-current
liabilities were amortized by EUR 5.0 million and new short-term loans were
withdrawn amounting to EUR 5.0 million.
The dividend for 2012 resolved by the Annual General Meeting on 27 March 2013
totaling EUR 3.6 (5.9) million, or EUR 0.30 (0.50) per share, was paid on 10
April 2013.
Equity at the end of the period under review was EUR 28.2 (32.4) million and
equity ratio 55.7 (56.8) per cent. The net gearing ratio was 4.6 (7.6) per
cent.
CAPITAL EXPENDITURE AND DEPRECIATION
The capital expenditure on fixed assets amounted to EUR 1.3 (1.7) million.
Total depreciation of non-current assets during the period under review
amounted to EUR 1.4 (1.5) million.
PERSONNEL
The number of Exel Composites Group employees on 30 June 2013 was 426 (438), of
whom 206 (206) worked in Finland and 220 (232) in other countries. The average
number of personnel during January - June 2013 was 433 (432). The use of
temporary workforce has been largely discontinued for the time being. In
addition, in Finland part of maintenance functions were transferred back to
Exel Composites, which increased its own personnel by 8 persons.
Co-determination negotiations were started on 13 May 2013 in the Finnish
business units due to weak demand and profitability. They are expected to be
concluded in mid-August 2013. Corrective actions have started to have a
positive impact in the Australian and British business units. Corrective
measures will be continued in the whole Group. Structural changes will also be
considered.
The ExelWay project that was launched in the latter half of 2011 was continued.
The project aims at improving co-operation and harmonizing processes between
the units. Project findings including new and efficient business processes and
best practices are to be implemented as the project proceeds.
SHARES AND SHARE CAPITAL
At the end of June 2013, Exel Composites' share capital was EUR 2,141,431.74
and the number of shares was 11,896,843. There were no changes in the share
capital during the review period.
Exel Composites did not hold any of its own shares during the period of review.
SHARE PERFORMANCE AND TURNOVER
The highest share price quoted was EUR 6.50 (8.79) and the lowest EUR 5.10
(6.42). The share price closed at EUR 5.25 (6.78). The average share price
during the period under review was EUR 5.85 (7.82).
A total of 621,761 (512,570) shares were traded during the reporting period,
which represents 5.2 (4.3) per cent of the average number of shares. Based on
the closing price on 30 June 2013, Exel Composites' market capitalization was
EUR 62.5 (80.7) million.
SHAREHOLDERS AND DISCLOSURES
Exel Composites had a total of 2,752 (2,718) shareholders on 30 June 2013.
Information on Exel Composites' shareholders is available on the Company
website at www.exelcomposites.com.
Exel Composites did not receive any flagging announcements during the period
under review.
MAJOR NEAR-TERM RISKS AND UNCERTAINTIES
The most significant near-term business risks are related to the general
economic development, government regulations and continued financial crisis in
the Euro area as well as to market demand in certain market segments. Success
of corrective actions as well as possible restructuring and impairment charges
can have an impact on the profitability. Raw material prices, energy cost and
other cost increases may continue to put pressure on profitability. 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.
CHANGES IN GROUP MANAGEMENT
Mr. Kari Loukola was appointed VP Sales and Marketing and member of the Group
Management Team as of 1 August 2013 to reinforce sales and profitable growth.
OUTLOOK FOR 2013
Major uncertainties relating to general growth prospects in the economy
continue. Visibility is low, but the market pressure is expected to continue in
2013. The Company will continue to work on sales development and on adjusting
costs to market conditions. Additional contingency actions may be undertaken
which may impact the short-term profits, but protect long-term cash flow and
profitability.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
(unaudited)
EUR thousand 1.4. - 1.4. - Change 1.1. - 1.1. - Change 1.1. -
30.6. 30.6. , 30.6. 30.6. , % 31.12.
2013 2012 % 2013 2012 2012
Net sales 17,548 19,791 -11.3 34,445 40,310 -14.6 75,998
Materials and -6,455 -7,491 13.8 -12,885 -15,610 17.5 -29,986
services
Employee benefit -5,448 -5,942 8.3 -10,757 -11,560 6.9 -21,077
expenses
Depreciation and -684 -723 5.4 -1,357 -1,464 7.3 -5,387
impairment
Other operating -3,510 -4,209 16.6 -7,491 -8,660 13.5 -17,057
expenses
Other operating 159 390 -59.2 322 629 -48.8 909
income
Operating profit 1,609 1,816 -11.4 2,276 3,645 -37.6 3,399
Net financial items -48 -30 -60.0 -23 -113 79.6 -428
Profit before tax 1,562 1,786 -12.5 2,252 3,532 -36.2 2,971
Income taxes -399 -485 17.7 -535 -920 41.8 -940
Profit/loss for the 1,162 1,302 -10.8 1,717 2,612 -34.3 2,031
period
Other comprehensive
income:
Other comprehensive
income to be
reclassified to
profit or loss in
subsequent periods:
Exchange differences -1,690 866 -295.2 -1,392 660 310.9 133
on translating
foreign operations
Other comprehensive -1,690 866 -295.2 -1,392 660 310.9 133
income, net of tax
Total comprehensive -527 2,167 -124.3 326 3,272 -90.0 2,164
income
Profit/loss
attributable to:
Equity holders of the 1,162 1,302 1,717 2,612 -90.0 2,031
parent company
Comprehensive income
attributable to:
Equity holders of the -527 2,167 326 3,272 2,164
parent company
Earnings per share, 0.10 0.11 0.14 0.22 0.17
diluted and
undiluted, EUR
CONDENSED CONSOLIDATED BALANCE SHEET
EUR thousand 30.6.2013 30.6.2012 Change 31.12.2012
ASSETS
Non-current assets
Goodwill 10,017 12,238 -2,221 10,898
Other intangible assets 971 1,811 -840 1,220
Tangible assets 10,791 12,123 -1,332 10,681
Deferred tax assets 799 101 698 752
Other non-current assets 63 64 -1 64
Non-current assets total 22,640 26,337 -3,696 23,615
Current assets
Inventories 9,097 10,556 -1,459 9,129
Trade and other receivables 12,206 12,650 -444 9,513
Cash at bank and in hand 6,884 7,660 -776 9,245
Current assets total 28,186 30,866 -2,680 27,887
Total assets 50,826 57,203 -6,377 51,502
EQUITY AND LIABILITIES
Shareholders´ equity
Share capital 2,141 2,141 0 2,141
Other reserves 72 30 42 45
Invested unrestricted equity fund 8,488 8,488 0 8,488
Translation differences 2,946 4,864 -1,918 4,337
Retained earnings 12,845 14,306 -1,461 14,396
Profit for the period 1,717 2,612 -895 2,031
Total equity attributable to equity 28,209 32,442 -4,233 31,438
holders of the parent company
Total equity 28,209 32,442 -4,233 31,438
Non-current liabilities
Interest-bearing liabilities 2,496 8,117 -5,621 8,168
Interest-free liabilities 401 410 -9 411
Deferred tax liabilities 382 497 -115 377
Current liabilities
Interest-bearing liabilities 5,690 2,011 3,679 11
Trade and other non-current 13,649 13,727 -78 11,098
liabilities
Total liabilities 22,617 24,761 -2,144 20,064
Total equity and liabilities 50,826 57,203 -6,377 51,502
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
EUR thousand Share Other Invested Translation Retained Total
Capita Reserves Unrestricted Differences Earnings
l Equity Fund
Balance at 1 2,141 30 8,488 4,204 20,255 35,118
January
2012
Comprehensiv 660 2,612 3,272
e result
Other items -1 -1
Dividend -5,948 -5,948
Balance at 2,141 30 8,488 4,864 16,919 32,442
30 June
2012
Balance at 1 2,141 45 8,488 4,337 16,427 31,438
January
2013
Comprehensiv -1,392 1,717 326
e result
Other items 27 -13 14
Dividend -3,569 -3,569
Balance at 2,141 72 8,488 2,946 14,562 28,209
30 June
2013
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
EUR thousand 1.1. - 1.1. - Change 1.1. - 31.12.
30.6. 30.6. 2012 2013 2012
Cash Flow from Operating Activities
Profit for the period 1,717 2,612 -885 2,031
Adjustments 1,771 2,700 -929 7,170
Change in working capital -265 -492 227 1,223
Cash Flow Generated by Operations 3,223 4,820 -1,597 10,424
Interest paid -93 -99 6 -259
Interest received 8 65 -57 80
Other financial items -45 -8 -37 -155
Income taxes paid -539 -1,344 805 -1,897
Net Cash Flow from Operating Activities 2,554 3,434 -880 8,193
Capital expenditure -1,341 -1,677 336 -2,846
Proceeds from sale of fixed assets 0 16 -16 16
Cash Flow from Investing Activities -1,341 -1,661 320 -2,830
Cash Flow from Financing
Proceeds from long-term borrowings 0 0 0 0
Instalments of long-term borrowings -5,000 0 -5,000 0
Change in short-term loans 5,000 2,000 3,000 0
Change in finance lease liabilities -5 -5 0 -10
Dividends paid -3,569 -5,948 2,379 -5,948
Net Cash Flow from Financing -3,574 -3,953 379 -5,958
Change in Liquid Funds -2,361 -2,180 -181 -595
Liquid funds in the beginning of period 9,245 9,840 -595 9,840
Change in liquid funds -2,361 -2,180 -181 -595
Liquid funds at the end of period 6,884 7,660 -776 9,245
QUARTERLY KEY FIGURES
EUR thousand II/ I/ IV/ III/ II/ I/
2013 2013 2012 2012 2012 2012
Net sales 17,548 16,897 18,634 17,054 19,791 20,519
Materials and services -6,455 -6,430 -7,670 -6,706 -7,491 -8,119
Employee benefit expenses -5,448 -5,309 -5,095 -4,422 -5,942 -5,618
Depreciation and impairment -684 -673 -3,304 -619 -723 -742
Operating expenses -3,510 -3,981 -4,345 -4,052 -4,209 -4,452
Other operating income 159 163 173 107 390 240
Operating profit 1,609 666 -1,608 1,362 1,816 1,828
Net financial items -48 24 -109 -206 -30 -83
Profit before taxes 1,562 691 -1,717 1,156 1,786 1,745
Income taxes -399 -136 246 -266 -485 -435
Profit/loss for the period 1,162 555 -1,471 890 1,302 1,310
Earnings per share, EUR 0.10 0.05 -0.12 0.07 0.11 0.11
Earnings per share, EUR, diluted 0.10 0.05 -0.12 0.07 0.11 0.11
Average number of shares,
undiluted,
1,000 shares 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
Average number of personnel 427 436 431 433 435 428
COMMITMENTS AND CONTINGENCIES
EUR thousand 30.6.2013 30.6.2012
On own behalf
Mortgages 2,783 2,783
Corporate mortgages 12,500 12,500
Lease liabilities
- in next 12 months 953 903
- in next 1-5 years 1,838 3,054
Other commitments 6 45
DERIVATIVE FINANCIAL INSTRUMENTS
Nominal values 30.6.2013 30.6.2012
EUR thousand
Foreign exchange derivatives
Forward contracts 0 0
Interest rate derivatives
Interest rate swaps 5,000 5,000
CONSOLIDATED KEY FIGURES
EUR thousand 1.1. - 30.6. 1.1. - Change, % 1.1.-
2013 30.6. 31.12.
2012 2012
Net sales 34,445 40,310 -14.6 75,998
Operating profit 2,276 3,645 -37.6 3,399
% of net sales 6.6 9.0 4.5
Profit before tax 2,252 3,532 -36.2 2,971
% of net sales 6.5 8.8 3.9
Profit for the period 1,717 2,612 -34.3 2,031
% of net sales 5.0 6.5 2.7
Shareholders´ equity 28,209 32,442 -13.0 31,438
Interest-bearing liabilities 8,185 10,128 -19.2 8,179
Cash and cash equivalents 6,884 7,660 -10.1 9,245
Net interest-bearing liabilities 1,302 2,468 47.2 -1,066
Capital employed 36,394 42,569 -14.5 39,617
Return on equity, % 11.5 15.5 6.1
Return on capital employed, % 12.0 17.3 8.4
Equity ratio, % 55.7 56.8 61.0
Net gearing, % 4.6 7.6 -3.4
Capital expenditure 1,341 1,677 -20.0 2,846
% of net sales 3.9 4.2 3.7
Research and development costs 868 857 1.3 1,606
% of net sales 2.5 2.1 2.1
Order stock 13,057 14,173 -7.9 10,677
Earnings per share, EUR 0.14 0.22 -36.4 0.17
Earnings per share, EUR, diluted 0.14 0.22 -36.4 0.17
Equity per share, EUR 2.37 2.73 -13.2 2.64
Average number of shares
- cumulative 11,897 11,897 0.0 11,897
- cumulative, diluted 11,897 11,897 0.0 11,897
Average number of employees 433 432 0.2 431
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, 25 July 2013
Exel Composites Plc Vesa Korpimies
Board of Directors President and CEO
FURTHER INFORMATION:
Vesa Korpimies, President and CEO, tel. +358 50 590 6754, or email
vesa.korpimies@exelcomposites.comIlkka
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 technology company which designs,
manufactures and markets composite profiles and tubes for industrial
applications. The Group is the leading composite profile manufacturer in the
world and concentrates on growing niche segments.
The core of the operations is based on own, internally developed composite
technology, product range based on it and a 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 the Small Cap segment of NASDAQ OMX
Helsinki Ltd.
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