2016-02-19 08:00:02 CET
2016-02-19 08:00:02 CET
REGULATED INFORMATION
Exel Composites Oyj - Financial Statement Release
Exel Composites Plc’s Financial Statements Release 2015
EXEL COMPOSITES PLC FINANCIAL STATEMENTS RELEASE 19.2.2016 9.00
a.m. EET 1 (18)
Exel Composites Plc’s Financial Statements Release 2015
Q4 2015 in brief
- Net sales were 19.3 MEUR, down by 8.2 per cent on the previous year (Q4/2014:
21.1 MEUR)
- Order intake increased by 11.1 per cent to 20.5 (18.4) MEUR
- Operating profit decreased to 0.6 MEUR including -0.1 MEUR non-recurring
items (2.1 MEUR including -0.2 MEUR non-recurring items) and was 3.1 (9.8) per
cent of net sales
- Net cash flow from operating activities was positive at +0.5 (+3.8) MEUR
- Fully diluted earnings per share were 0.03 (0.12) EUR
1-12/2015 in brief
- Net sales for the financial year 2015 increased to 80.2 MEUR, up by 1.2 per
cent on the previous year (1-12/2014: 79.3 MEUR)
- Order intake increased by 1.3 per cent to 83.4 (82.3) MEUR. Order backlog
increased to 15.3 (12.8) MEUR on 31 December 2015
- Operating profit was 4.4 MEUR including -0.4 MEUR non-recurring items (8.9
MEUR after impairment of -0.5 MEUR) and was 5.5 (11.2) per cent of net sales
- Net cash flow from operating activities was positive at +3.4 (+10.7) MEUR
- Fully diluted earnings per share for the full year were 0.24 (0.48) EUR
- The Board of Directors proposes that a dividend of 0.22 EUR per share be paid
for the financial year 2015
Outlook for full year 2016
The Company continues to implement its new strategy with focus to operational
efficiency and optimizing the global manufacturing footprint. The Company
estimates that operating profit excluding any non-recurring items will increase
in 2016 compared to 2015.
Comments by the CEO
In 2015 Exel Composites started fully implementing the new strategy that was
launched in late 2014. During 2015 we have advanced the strategic initiatives
by strengthening the organization, developing competencies, improving
processes, adding flexibility and increasing production capacity in order to be
ready for organic and in-organic growth. Operations were improved in many
fronts, including supply chain management, health & safety, on-time-delivery
(OTD) promptness to clients and continued implementation of the new global ERP.
M&A screening activities continued throughout the year. The ongoing expansion
projects in China and Austria are currently in permitting and design phase but
the completion of both projects has been postponed to 2017.
Profitability of the Company was not satisfactory and was impacted in 2015 by
higher operating costs mainly attributable to the additional resources required
to build the organization to the next level. In addition, business volume of
the Group, with net sales increasing only slightly to EUR 80.2 (79.3) million,
was lower than planned, which in itself decreased profitability through low
utilization of certain factories. In the second and third quarter we saw
postponements of some key customer orders and end-customer projects. Further
actions were taken to control costs and to drive sales. In the fourth quarter
order intake was recovering and increased from the low level of the third
quarter.
During 2015 we have taken several steps in the path towards becoming a truly
global composites company. In 2016 the Company continues to implement its new
strategy with focus to operational efficiency and optimizing the global
manufacturing footprint. The Company estimates that operating profit excluding
any non-recurring items will increase in 2016 compared to 2015. Our expertise
in composites combined with attractive long-term market fundamentals will
position us well for profitable long-term growth.
CONSOLIDATED KEY FIGURES, EUR million
1.10. 1.10.–31.1 Change, 1.1. – 1.1. – Change,
– 2. % 31.12. 31.12. %
31.12. 2014 2015 2014
2015
Net sales 19.3 21.1 -8.2 80.2 79.3 1.2
Operating profit 0.6 2.1 -70.6 4.4 8.9 -50.3
% of net sales 3.1 9.8 5.5 11.2
Profit for the period 0.4 1.5 -72.1 2.8 5.7 -50.1
Shareholders’ equity 30.7 29.7 3.4 30.7 29.7 3.4
Net interest-bearing 0.6 -2.6 -123.2 0.6 -2.6 -123.2
liabilities
Capital employed 39.2 35.3 10.9 39.2 35.3 10.9
Return on equity, % 5.4 20.1 9.4 21.7
Return on capital 6.8 22.6 12.0 25.2
employed, %
Equity ratio, % 57.1 56.9 57.1 56.9
Net gearing, % 2.0 -8.7 2.0 -8.7
Earnings per share, EUR 0.03 0.12 0.24 0.48
Earnings per share, 0.03 0.12 0.24 0.48
diluted, EUR
Equity per share, EUR 2.58 2.50 2.58 2.50
IFRS-reporting
This financial statements bulletin has been prepared in accordance with the
recognition and measurement principles of IFRS, which are the same as in the
2014 financial statements.
Market environment
The market environment in 2015 was mixed. On one hand the overall economic
situation in Exel Composites’ main market area, Europe, was quite depressed
with challenges from many fronts, such as declining exports from EU area to
Russia then affecting the building and infrastructure demand. On the other hand
the general value proposition and advantages of composite structures over other
materials remained the same as before; giving superior combination of
durability, lightness, rigidity and non-corrosiveness, added with many other
product attributes, such as superior surface quality, electrical conductivity
or insulation properties. However, in more challenging market conditions a
short-term capital expenditure driven buying behavior tends to over-run a
longer term total life cycle cost driven approach, especially during the times
when metal prices are low and then making the competition more difficult. At
the same time in Asia demand was still good in many market segments providing
with good possibilities for composites’ market penetration and growth, however
the general growth being slower than in previous years. In North America the
low oil price kept the investments in chemical, oil and gas segment low,
affecting the demand in that segment directly and many other segments, such as
transportation, indirectly. All in all, the global market environment for Exel
Composites’ key market segments was relatively stable in 2015.
Looking forward to 2016, industrial investments are gradually expected to pick
up in Europe. Low demand in the Russian market continues to impact also the
European building and construction industry. Some infrastructure projects are
also awaiting local governments’ funding. Consequently, the Company does not
expect any changes in the European market as a whole. In North America low oil
price continues to impact the chemical, oil and gas market directly and several
other market segments indirectly. In Asia-Pacific megatrends, including
urbanization and energy efficiency, continue to drive growth. The markets
benefiting from energy efficiency, especially the transportation industry,
continue to grow. The renewable energy markets, such as solar panels and wind
turbines show some positive signs for improvement, increasing the demand of
composites.
Order intake October – December 2015
Order intake increased in the fourth quarter by 11.1 per cent to EUR 20.5
(18.4) million on the corresponding period in 2014.
Sales review October – December 2015
Group net sales decreased by 8.2 per cent to EUR 19.3 (21.1) million on the
corresponding period in 2014.
Net sales decreased in the largest region, Europe, by 9.6 per cent to EUR 15.1
(16.7) million compared to the corresponding period in 2014. Net sales in the
APAC region decreased by 18.9 per cent to EUR 3.0 (3.7) million. In the region
Rest of the world net sales increased by 71.4 per cent to EUR 1.2 (0.7)
million.
Net sales of Industrial applications decreased by 18.2 per cent to EUR 11.2
(13.7) million compared to the corresponding period in 2014. Net sales of
Construction and Infrastructure applications decreased by 2.2 per cent to EUR
4.5 (4.6) million. Net sales of Other applications increased by 33.3 per cent
to EUR 3.6 (2.7) million.
Order intake and order backlog January – December 2015
Order intake increased in 2015 by 1.3 per cent compared to the previous year to
EUR 83.4 million (EUR 82.3 million in 2014).
The Group’s order backlog increased to EUR 15.3 (12.8) million on 31 December
2015.
Sales review January – December 2015
Group net sales for the financial year 2015 increased by 1.2 per cent to EUR
80.2 (79.3) million. Postponements of orders and end-customer projects from
some key customers were recorded in the second and third quarter of 2015.
However, in the fourth quarter, order intake was recovering and increased from
the low level of the third quarter.
Net sales decreased in the largest region, Europe, by 1.1 per cent to EUR 63.9
(64.6) million compared to 2014. Net sales in the APAC region increased by 16.1
per cent to EUR 13.7 (11.8) million. Net sales decreased by 10.3 per cent in
the region Rest of the world to EUR 2.6 (2.9) million compared to the previous
year.
Net sales of industrial applications decreased by 0.3 per cent to EUR 47.4
(47.5) million. Net sales of Construction and Infrastructure applications were
up by 5.6 per cent to EUR 18.4 (17.4) million. Net sales of Other applications
increased by 0.8 per cent to EUR 14.4 (14.3) million.
Financial performance
October – December 2015
The Group’s operating profit decreased to EUR 0.6 million including EUR -0.1
million non-recurring items (EUR 2.1 million including EUR -0.2 million
non-recurring items) in October – December 2015 and was 3.1 (9.8) per cent of
net sales.
January – December 2015
The Group’s operating profit was not satisfactory and in January – December
2015 it decreased to EUR 4.4 million including EUR -0.4 million non-recurring
items (EUR 8.9 million after impairment of EUR -0.5 million) and was 5.5 (11.2)
per cent of net sales. Non-recurring items amounted to EUR -0.4 million
relating to M&A screening costs.
Operating profit of 2015 was impacted by higher operational costs due to
increased resources relating to the implementation of the long-term growth
strategy. In addition, business volume of the Group, with net sales increasing
only 1.2 per cent, was lower than planned, which in itself decreased
profitability through low utilization of certain factories. Furthermore, the
costs of production of the 2015 deliveries increased from those of 2014.
The profitability of the Australian unit continued to be unsatisfactory in
2015. Corrective actions were undertaken and further actions will be taken to
resolve the situation.
The Group’s net financial expenses in 2015 were EUR 0.2 (0.4) million. The
Group’s profit before taxes was EUR 4.3 (8.5) million and profit after taxes
EUR 2.8 (5.7) million.
Financial position
Net cash flow from operating activities was positive at EUR +3.4 (+10.7)
million. Cash flow before financing, but after capital expenditure, amounted to
EUR -1.0 (6.3) million. The capital expenditure amounted to EUR 4.3 (4.4)
million. Capital expenditure was financed with cash flow from business
operations. At the end of the financial year, the Group’s liquid assets stood
at EUR 7.9 (8.2) million. Total depreciation of non-current assets during the
year under review amounted to EUR 2.9 (2.6) million.
The Group’s consolidated total assets at the end of the financial year were EUR
54.0 (52.4) million. Interest-bearing liabilities amounted to EUR 8.5 (5.6)
million. Net interest-bearing liabilities were EUR 0.6 (-2.6) million.
Equity at the end of the financial year was EUR 30.7 (29.7) million and equity
ratio 57.1 (56.9) per cent. The net gearing ratio was 2.0 (-8.7) per cent.
Fully diluted total earnings per share were EUR 0.24 (0.48). Return on capital
employed in 2015 was 12.0 (25.2) per cent. Return on equity was 9.4 (21.7) per
cent.
The Company paid total dividends during the financial year of EUR 2.4 (0.0)
million. Dividend per share was EUR 0.20 (0.00).
Business development and strategy implementation
In 2015 Exel Composites started fully implementing the new strategy that was
launched in late 2014. The cornerstones of the new strategy to generate next
level growth are: 1) Accelerate growth in China, 2) Penetrate new applications,
3) Create true local footprint, and 4) Grow in new technologies. The Company
wants to differentiate from its competitors by providing with clear value
propositions, local presence globally, top-quality service and world-class
operations. During 2015 the Company has advanced these strategic initiatives by
strengthening the organization, developing competencies, improving processes,
adding flexibility and increasing production capacity in order to be ready for
organic and in-organic growth. M&A screening activities continued throughout
the year. Operations were improved in many fronts, including supply chain
management, health & safety, on-time-delivery (OTD) promptness to clients and
continued implementation of the new global ERP
Exel Composites has driven operational excellence throughout the Group in 2015.
A whole new safety culture was introduced in all the sites. Lean manufacturing
methods, such as 5S and visual management, are being implemented in all the
factories. Actions continued to improve general orderliness in order to ensure
more efficient operations and a safe and pleasant work environment. The Group’s
On Time Delivery (OTD) improved from year 2014. Lost time injuries were halved
from previous year.
In accordance with the new growth strategy adopted in November 2014, a decision
was made in December 2014 to expand operations in Nanjing, China to meet the
increased demand. The target is to double the production capacity of the
Nanjing unit. It was initially estimated that the project would be completed
during the first half of 2016. Permitting and design of the expansion are
ongoing, but the Company no longer foresees that building would be completed
during 2016.
In February 2015 a decision was made to expand the operations in Austria. By
this investment Exel Composites will be in a better position to serve its
Central and Southern European customers. The completion of the project has been
postponed to 2017 due to weaker than estimated market situation in the
Company’s main market area Central Europe. Land reservation and permitting of
the expansion are ongoing.
Implementation of the new Group-wide ERP-system continued. The roll out to all
business units will take place during 2016 and 2017 step-by-step.
Research and development
Research and development costs totaled EUR 1.9 (1.8) million, representing 2.3
(2.3) per cent of net sales. The main projects were connected with the
development of new products and customer applications.
Risk management
At Exel Composites risk management is a continuous process, which is integrated
with the daily decision making and continuous monitoring of operations as well
as with preparation of quarterly and annual financial statements.
The Board of Directors governs the risk management of the Company through a
risk management policy. In addition, the Board of Directors makes a risk
assessment as part of the review and approval process of each set of quarterly
and annual financial statements. Risk factors are also considered by the Board
in connection with any future guidance disclosed by the Company.
The operative risk management, including risk monitoring, is part of the key
duties of the operative management. Whereas risks are considered in conjunction
with each business decision, they are also monitored by the managing director
and other group management on a monthly basis when the team reviews the
business development and any near and long-terms risks upon presentation of the
business unit heads and controllers.
Risks and uncertainties related to Exel Composites can be categorized as
strategic, operational, finance and hazard risks.
With respect to strategic risks, a significant portion of Exel Composites’
revenues is generated from certain key clients and market segments. Whereas
production capacity and cost structure of the Company is planned for growing
business volume, negative development of such key clients or market segments
could lead to deterioration of Exel Composites’ profitability. This risk is
mitigated by a close cooperation with key clients. The development of key
markets and consequently business volumes are actively followed and forecasted
in order to be able to adjust our business and cost structures to the
forecasts. New products and applications are continuously developed in order to
limit the dependency of any individual clients or market segments.
Strategic risks also include risks related to acquisitions where the realized
level of benefits and synergies may differ from the planned. Furthermore, a
continued low demand in the Australian market may have a negative impact on the
Company’s profitability due to restructuring costs.
The most significant operational risks relate to product development and sales
as well as production. Exel Composites’ product range is very broad and often
customer customized, which adds complexity to the product development and
production. Designing, producing and selling a product that does not meet the
requirements agreed with a client could potentially lead to substantial losses
and damages. In addition, availability of skilled employees, protection of
self-developed proprietary technology, fraud, availability and pricing of key
raw materials and health problems due to long-term exposure to chemicals belong
to the most significant operational risks. Pre-emptive management of operative
risks through careful contracting as well as appropriate business processes and
working instructions are in key roles to prevent possible damages.
Financial risks consist of currency, interest rate, liquidity and funding
risks, and credit and other counter party risks. Currency and interest rate
risks are managed primarily by natural hedging or by using derivative
instruments. Credit insurance is in place to cover risks related to trade
receivables.
Hazard risks, such as damages caused to property because of fire or chemical
spill, as well as losses resulting from related business interruptions, are
mainly covered by insurance policies. This type of risks are also regularly
audited by third parties that provide recommendations for improvement to reduce
risk probability.
Major near-term risks and uncertainties
The Company has added resources to pursue the long-term growth strategy. As a
result, operating cost
level has increased. The most significant near-term business risk relates to
the possibility of sales growth not
materializing. This would have a negative impact to the profitability of the
Company. Furthermore, a significant portion of Exel Composites’ net sales is
generated from certain key clients and market segments, the negative
development of which could rapidly deteriorate Exel Composites’ profitability.
The Company has continued the screening process of potential acquisition
targets. The acquisition price may be based on such benefits and synergies that
will not materialize as planned.
Continuing low demand in the Australian market may require such further
corrective actions that could result in non-recurring items.
Shares and share performance
Exel Composites’ share is listed on Nasdaq Helsinki Ltd in the Industrials
sector.
At the end of December 2015, Exel Composites’ share capital was EUR
2,141,431.74 and the number of shares was 11,896,843 each having the
counter-book value of EUR 0.18. There were no changes in the share capital
during the financial year. There is only one class of shares and all shares are
freely assignable under Finnish law.
Exel Composites did not hold any of its own shares during the period under
review.
During the financial year the highest share price quoted was EUR 9.85 (8.80)
and the lowest EUR 6.32 (5.56). At the end of the year, the share price was EUR
6.53 (8.39). The average share price during the financial year was EUR 8.65
(6.42).
Total shareholder return (TSR) in 2015 was -21 (46) per cent.
A total of 2,445,252 (5,836,969) shares were traded during the year, which
represents 20.6 (49.1) per cent of the average number of shares. On 31 December
2015, Exel Composites’ market capitalization was EUR 77.7 (99.8) million.
Shareholders and disclosures
Exel Composites had a total of 2,987 (2,686) shareholders on 31 December 2015.
Information on Exel Composites’ shareholders is available on the Company
website at www.exelcomposites.com.
On 31 December 2015, 0.26 per cent of the shares and votes of Exel Composites
were owned or controlled, directly or indirectly by the President and CEO and
the members of the Board.
The Company’s largest shareholder was Skandinaviska Enskilda Banken AB (nominee
register), which owned 19.5 per cent of shares at the end of 2015. Other major
shareholders included Nordea Bank Finland Plc 15.0 per cent (nominee register),
Nordea Fennia Fund 5.1 per cent, Försäkringsaktiebolaget Pensions-Alandia 4.0
per cent and OP-Finland Small Firms Fund 3.9 per cent.
Exel Composites received two flagging announcements during the financial year.
On 13 March 2015 Exel Composites received a flagging announcement according to
which the holding of Swedbank Robur Fonder AB had exceeded 5 per cent of the
voting rights and share capital in Exel Composites Plc. Through share
transactions concluded on 12 March 2015, the holding of Swedbank Robur Fonder
AB rose to 703,054 shares, representing 5.9 per cent of the shares and voting
rights of the Company.
On 20 May 2015 Exel Composites received a flagging announcement according to
which the indirect holding of Evli Bank Plc had fallen under 5 per cent of the
voting rights and share capital in Exel Composites Plc. Through share
transactions concluded on 19 May 2015, the total holding of the investment
funds owned by Evli Bank Plc and administered by Evli Fund Management Company
Ltd fell to 504,786 shares, representing 4.2 per cent of the shares and voting
rights of the Company.
Significant related-party transactions
Exel Composites’ permanent public insiders include Exel Composites’ Board
members, the President and CEO, the members of the Group Management Team and
the audit firm’s auditor with principal responsibility for Exel Composites. No
significant related-party transactions were conducted by the Group or the
permanent insiders during the financial year 2015.
Organization and personnel
The number of employees on 31 December 2015 was 494 (456), of whom 213 (205)
worked in Finland and 281 (251) in other countries. The average number of
personnel during the financial year was 498 (433).
The building and strengthening of global functions continued in 2015. The
company reinforced its organization in sales resources, product development and
operations.
Environment, health and safety
Exel Composites continues to remain alert to ensure its site operations are
compliant with all national and international rules and regulations. A safe
environment for the employees and neighbors is a priority at Exel Composites.
Exel Composites’ environmental issues are managed using ISO 14001 standard as a
guideline in all the units of the Group. The Group plays a leading role in
industry associations such as EuCIA (European Composites Industry Association).
This helps the Company stay at the leading edge of awareness of the latest
developments in environmental matters including advances in environmental
technology and new regulatory measures.
Special attention was paid to occupational health and safety also in 2015. The
amount and quality of preventative reporting and follow-up has been improved
significantly. The results of these actions are visible in the number of
accidents (lost time incidents), which halved compared to 2014. The
Occupational Health and Safety Management System OHSAS 18001 was implemented in
most factories in 2015 and 100 per cent coverage is targeted for 2016.
Incentive programs
Exel Composites’ performance-based incentive program covers all employees.
Office employees receive a monthly salary and an annual bonus tied to the
achievement of annually established goals emphasizing growth and profitability.
Production employees are also eligible for incentive compensation. Their annual
bonus is mainly based on productivity.
The Group has long-term incentive programs for the President and CEO and the
Group Management Team and selected key employees of the Company. The aim of the
programs is to combine the objectives of the shareholders and the executives in
order to increase the value of the Company, to commit the executives to the
Company and to offer the executives a competitive reward program. The Board of
Directors makes the decision on the programs annually.
In February 2015 Exel Composites’ Board of Directors approved a new program for
selected key employees of the Company. The program is based on long-term
monetary incentive program and is targeted at approximately 25 executives for
the earning period 2015-2017. The President and CEO and the members of the
Group Management Team are included in the target group of the new incentive
program.
The potential long-term monetary performance reward from the program is based
on the Group’s cumulative Economic Profit and on the Group’s Total Shareholder
Return (TSR). The potential reward will be paid in 2018. The maximum reward to
be paid will be EUR 1.5 million excluding employer’s social expenses.
The cost of the programs will be accounted for as operating expenses during the
duration of the programs.
Corporate Governance
Exel Composites issues a Corporate Governance Statement for the financial year
2015. Exel Composites complies with the Finnish Corporate Governance Code (“the
code”) issued by the Securities Market Association and which came into effect
on 1 October 2010. The Corporate Governance Statement is issued separately from
the Board of Directors’ report. Further information concerning the corporate
governance matters is available at the Group’s website at
www.exelcomposites.com.
Decisions of the AGM 2015
The Annual General Meeting of Exel Composites Plc held on 26 March 2015
approved the Board’s proposal to distribute a dividend of EUR 0.20 per share
for the financial year 2014.
The Annual General Meeting authorized the Board of Directors to repurchase the
Company’s own shares by using unrestricted equity. The maximum amount to be
acquired is 600,000 shares. The authorization is valid until 30 June 2016.
Board of Directors and Auditors
On 26 March 2015, the Annual General Meeting appointed Heikki Hiltunen, Peter
Hofvenstam, Reima Kerttula and Kerstin Lindell to continue on the Board of
Directors. Matti Hyytiäinen was appointed as a new member of the Board as Göran
Jönsson was no longer available for re-election. The AGM re-elected Peter
Hofvenstam as Chairman of the Board of Directors.
The Board of Directors convened nine times in 2015 and the average attendance
rate at these meetings was 96.3 per cent. The fees paid to the Board of
Directors totaled EUR 156 (141) thousand in 2015.
The Board of Directors reviewed the independence of Board members in accordance
with Recommendation 15 of the Corporate Governance Code in its March 2015
meeting. All the members of the Board are independent Board members. The Board
was considered to comply with the Corporate Governance independency rules.
The Annual General Meeting of Exel Composites has elected a Shareholders’
Nomination Board, which nominates candidates to the Annual General Meeting for
election as Board members and proposes the fees to be paid to the Board
members. The Nomination Board included the Chairman and persons nominated by
the four largest shareholders as of 30 September 2015. In 2015 the Nomination
Board comprised Ted Roberts (Nordea) as chairman, Tuomas Virtala (Danske
Capital Finland), Henrik Viktorsson (Alandia Insurance), Kalle Saariaho (OP
Financial Group) and Peter Hofvenstam, the Chairman of the Board of Directors,
as an expert member. The Nomination Board met five times.
Ernst & Young, Authorized Public Accountants, with Juha Hilmola, APA, as
principal auditor, were elected to serve as company auditor in the AGM in 2015.
The fees paid to the auditors for audit services totaled EUR 190 (163) thousand
and for non-audit services EUR 123 (51) thousand in 2015.
Changes in Group Management
Mr. Mikko Kettunen was appointed SVP, CFO and member of the Group Management
Team on 13 January 2015 and assumed his position on 7 April 2015. Mr. Kettunen
succeeded Mr. Ilkka Silvanto, who was appointed with the same date as SVP,
Strategic Projects, effective as of 7 April 2015. Mr. Silvanto continues
reporting to CEO and being member of Group Management Team.
Adoption of International Financial Reporting Standards (IRFS)
All IFRS’s in force on 31 December 2015 that are applicable to Exel Composites’
business operations, including all SIC- and IFRIC-interpretations thereon, have
been complied with when preparing year 2015 and comparable year 2014 figures.
International financial reporting standards, referred to in the Finnish
Accounting Act and in ordinances issued based on the provisions of this Act,
refer to the standards and their interpretations adopted in accordance with the
procedure laid down in regulation (EC) No 1606/2002 of the EU. The notes to the
consolidated financial statements conform also with the Finnish accounting and
company legislation.
Events after the review period
The Board of Directors of Exel Composites Plc has on 18 February 2016 approved
a new incentive program for the executives of the Company. The program is based
on long-term monetary incentive program and is targeted at approximately 20
executives for the earning period 2016-2018. The President and CEO and the
members of the Group Management Team are included in the target group of the
new incentive program.
The 2016 program includes one earning period, the calendar years 2016-2018. The
potential long-term monetary performance reward from the program is based on
the Group’s cumulative Economic Profit and on the Group’s Total Shareholder
Return (TSR). The potential reward will be paid in 2019. The maximum reward to
be paid will be EUR 1.0 million excluding employer's social costs.
The Board of Directors of Exel Composites Plc has on 18 February 2016 taken a
decision to change the Group’s financial reporting practices as of 19 February
2016 as a result of the amended Securities Market Act, which was entered into
force on 26 November 2015. Contrary to what was disclosed on 17 December 2015
regarding financial reporting in 2016, Exel Composites will disclose certain
key figures and information on business performance for the three and nine
months periods in a stock exchange release instead of interim reports.
Outlook for full year 2016
The Company continues to implement its new strategy with focus to operational
efficiency and optimizing the global manufacturing footprint. The Company
estimates that operating profit excluding any non-recurring items will increase
in 2016 compared to 2015.
Board proposal for dividend distribution
The Board of Directors of Exel Composites Plc has on 18 February 2016 amended
the Company’s dividend policy. Exel Composites’ financial goals include
distributing dividends minimum (prior: “some”) 40 per cent of the profit for
the financial year as permitted by the financial structure and growth
opportunities.
On 31 December 2015 Exel Composites Plc’s distributable funds totaled EUR
13,795 thousand, of which profit for the financial period accounted for EUR
2,624 thousand.
The Board has decided to propose to the Annual General Meeting that a dividend
of EUR 0.22 (EUR 0.20) per share, a payout ratio of 92.0 per cent, be paid for
the 2015 financial year.
As a basis for its proposal, the Board of Directors has made an assessment of
the Group’s financial position and ability to meet its commitments, as well as
the Group’s outlook and investment requirements. The Board considers the
proposed dividend well-balanced given the prospects, the capital requirements
and the risks of the Group’s business activities.
The proposed record date for dividends is 21 March 2016. If the Annual General
Meeting approves the Board’s proposal, it is estimated that the dividend will
be paid on 30 March 2016.
Annual General Meeting
The Annual General Meeting will be held on Thursday 17 March 2016 beginning at
10.30 am at Radisson Blu Royal Hotel at the address of Runeberginkatu 2,
Helsinki, Finland.
Financial reporting in 2016
Exel Composites will change its financial reporting practices as of 19 February
2016. Instead of interim reports, Exel Composites will disclose certain key
figures and information on business performance for the three and nine months
periods in a stock exchange release. The following financial reviews will be
published in 2016:
11 May 2016: Business Review for January-March 2016
21 July 2016: Half-yearly Report for January-June 2016
25 October 2016: Business Review for January-September 2016
Annual Financial Report for 2015 will be published in electronic format on 25
February 2016.
Financial results briefing
Exel Composites will hold a financial results briefing regarding the financial
statements today Friday 19 February 2016 at 12.30 p.m. at Scandic Hotel
Simonkenttä’s Tapiola meeting room at the address of Simonkatu 9, Helsinki,
Finland.
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, 19 February 2016
Board of Directors of Exel Composites Plc
For further information, please contact:
Riku Kytömäki, President and CEO, tel. +358 50 511 8288, or email
riku.kytomaki@exelcomposites.com
Mikko Kettunen, CFO, Exel Composites Plc, tel. +358 50 3477 462, or email
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 on
Nasdaq Helsinki Ltd.
Summary of Financial Statements and notes to the Financial Statements 1 January
– 31 December 2015
Accounting principles:
These Financial Statements have been prepared in accordance with IAS 34,
Interim Financial Reporting. The same accounting policies have been followed as
in the previous Financial Statements. Key indicator calculations remain
unchanged and have been presented in the 2015 Financial Statements.
Preparation of financial statements in accordance with the IFRS standards
requires Exel Composites’ management to make estimates and assumptions that
have an effect on the amount of assets and liabilities on the balance sheet at
the closing date as well as the amounts of income and expenses for the
financial period. In addition, the management must exercise its judgement
regarding the application of accounting policies. Since the estimates and
assumptions are based on the views at the date of the Financial Statements,
they include risks and uncertainties. The actual results may differ from the
estimates and assumptions.
The amounts presented in the income statement and balance sheet are Group
figures. The amounts presented in the release are rounded, so the sum of
individual figures may differ from the sum reported. The financial statements
are audited and the auditor’s report for the financial statements has been
issued.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
EUR thousand 1.10. – 1.10. – Change 1.1. – 1.1. – Change
31.12. 31.12. , % 31.12. 31.12. , %
2015 2014 2015 2014
Net sales 19,343 21,071 -8.2 80,196 79,253 1.2
Materials and services -7,633 -7,992 4.5 -30,001 -29,134 -3.0
Employee benefit expenses -6,092 -6,068 -0.4 -25,280 -22,691 -11.4
Depreciation and impairment -746 -631 -18.2 -2,903 -3,115 6.8
Other operating expenses -4,626 -4,473 -3.4 -18,151 -16,133 -12.5
Other operating income 363 162 124.1 553 707 -21.8
Operating profit 609 2,069 -70.6 4,414 8,887 -50.3
Net financial items 167 -62 369.4 -157 -430 63.5
Profit before tax 775 2,007 -61.4 4,257 8,457 -49.7
Income taxes -367 -542 32.3 -1,413 -2,754 48.7
Profit/loss for the period 409 1,466 -72.1 2,844 5,702 -50.1
Other comprehensive income:
Exchange differences on 376 -114 -429.8 492 1,370 -64.1
translating foreign
operations
Income tax relating to 0 0 0.0 0 0 0.0
components of other
comprehensive income
Items that will not be
reclassified to profit or
loss:
Defined benefit plan 51 -90 -156.7 51 -90 -156.7
actuarial
gains(+)/loss(-), net of
tax
Other comprehensive income, 427 -204 -309.3 543 1,280 -57.6
net of tax
Total comprehensive income 836 1,262 -33.8 3,387 6,983 -51.5
Profit/loss attributable
to:
Equity holders of the 409 1,466 2,844 5,702
parent company
Comprehensive income
attributable to:
Equity holders of the 836 1,262 3,387 6,983
parent company
Earnings per share, diluted 0.03 0.12 0.24 0.48
and undiluted, EUR
CONDENSED CONSOLIDATED BALANCE SHEET
EUR thousand 31.12.2015 31.12.2014 Change
ASSETS
Non-current assets
Goodwill 9,597 9,676 -79
Other intangible assets 490 686 -196
Tangible assets 14,359 12,533 1,826
Deferred tax assets 383 285 98
Other non-current assets 87 74 13
Non-current assets total 24,916 23,253 1,662
Current assets
Inventories 9,670 10,034 -364
Trade and other receivables 11,507 10,906 601
Cash at bank and in hand 7,874 8,218 -344
Current assets total 29,052 29,158 -106
Total assets 53,968 52,411 1,557
EQUITY AND LIABILITIES
Shareholders´ equity
Share capital 2,141 2,141 0
Other reserves 106 79 27
Invested unrestricted equity fund 2,539 2,539 0
Translation differences 4,025 3,534 491
Retained earnings 19,060 15,724 3,336
Profit for the period 2,844 5,702 -2,858
Total equity attributable to equity holders of 30,716 29,720 996
the parent company
Total equity 30,716 29,720 996
Non-current liabilities
Interest-bearing liabilities 3,531 4,623 -1,092
Interest-free liabilities 553 4545 99
Deferred tax liabilities 629 505 124
Current liabilities
Interest-bearing liabilities 4,945 1,000 3,945
Trade and other non-current liabilities 13,594 16,110 -2,516
Total liabilities 23,252 22,692 560
Total equity and liabilities 53,968 52,411 1,557
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
EUR thousand Share Other Invested Translati Retaine Total
Capita Reserv Unrestricted on d
l es Equity Fund Differenc Earning
es s
Balance at 1 January 2,141 72 2,539 2,164 15,924 22,841
2014
Comprehensive result 0 0 0 1,370 5,702 7,072
Defined benefit plan -90 -90
actuarial
gains(+)/loss(-), net
of tax
Other items 0 7 0 0 -7 0
Dividend 0 0 0 0 0 0
Correction of an error 0 0 0 0 -104 -104
in previously issued
financial statements*
Balance at 31 December 2,141 79 2,539 3,534 21,426 29,720
2014
Balance at 1st January 2,141 72 2,539 3,564 21,426 29,720
2015
Comprehensive result 492 2,844 3,336
Defined benefit plan 51 51
actuarial
gains(+)/loss(-), net
of tax
Other items 0 27 0 0 -27 0
Dividend -2,379 -2,379
Correction of an error -11 -11
in previously issued
financial statements*
Balance at 31 December 2,141 106 2,539 4,025 21,904 30,716
2015
*Correction of actuarial losses in prior year related to the pension liability
in Exel Composites N.V.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
EUR thousand 1.1. – 31.12. 1.1. – Change
2015 31.12.
2014
Cash Flow from Operating Activities
Profit for the period 2,844 5,702 -2,858
Adjustments 5,207 7,425 -2,218
Change in working capital -2,271 455 -2,726
Cash Flow Generated by Operations 5,780 13,582 -7,802
Interest paid -80 -167 87
Interest received 52 56 -4
Other financial items -218 -328 110
Income taxes paid -2,149 -2,464 315
Net Cash Flow from Operating Activities 3,385 10,679 -7,294
Cash Flow from Investing Activities
Capital expenditure -4,295 -4,354 59
Proceeds from sale of fixed assets 0 0 0
Cash Flow from Investing Activities -4,295 -4,354 59
Cash Flow from Financing
Share issue 0 0 0
Proceeds from long-term borrowings 0 5,000 -5,000
Instalments of long-term borrowings -1,000 -2,840 1,840
Change in short-term loans 3,945 -9,700 13,645
Instalments of finance lease liabilities 0 -5 5
Dividends paid -2,379 0 -2,379
Net Cash Flow from Financing 566 -7,545 8,111
Change in Liquid Funds -344 -1,220 876
Liquid funds in the beginning of period 8,218 9,438 -1,220
Change in liquid funds -344 -1,220 876
Liquid funds at the end of period 7,874 8,218 -344
QUARTERLY KEY FIGURES
EUR thousand IV/ III/ II/ I/ IV/ III/ II/ I/
2015 2015 2015 2015 2014 2014 2014 2014
Net sales 19,343 18,006 21,352 21,495 21,071 18,950 21,420 17,811
Materials and -7,633 -6,819 -7,778 -7,771 -7,992 -6,876 -8,290 -5,976
services
Employee benefit -6,092 -6,005 -6,733 -6,450 -6,068 -5,595 -5,635 -5,393
expenses
Depreciation and -746 -721 -725 -711 -631 -1,167 -654 -663
impairment
Operating -4,626 -4,033 -4,937 -4,556 -4,473 -3,621 -3,949 -4,089
expenses
Other operating 363 38 169 -16 162 185 161 200
income
Operating profit 609 466 1,348 1,991 2,069 1,875 3,054 1,890
Net financial 167 -209 -187 72 -62 -22 -118 -229
items
Profit before 775 257 1,161 2,063 2,007 1,853 2,935 1,661
taxes
Income taxes -367 -180 -361 -506 -542 -962 -706 -545
Profit/loss for 409 78 800 1,557 1,466 891 2,229 1,116
the period
Earnings per 0.03 0.01 0.07 0.13 0.12 0.07 0.19 0.09
share, EUR
Earnings per 0.03 0.01 0.07 0.13 0.12 0.07 0.19 0.09
share, EUR,
diluted
Average number
of shares,
undiluted,
1,000 shares 11,897 11,897 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 11,897 11,897
Average number 493 500 513 487 451 437 427 418
of personnel
COMMITMENTS AND CONTINGENCIES
EUR thousand 31.12.2015 31.12.2014
On own behalf
Mortgages 2,783 2,783
Corporate mortgages 12,500 12,500
Lease liabilities
- in next 12 months 1,040 896
- in next 1-5 years 904 1,414
Other commitments 312 6
DERIVATIVE FINANCIAL INSTRUMENTS
Nominal values 31.12.2015 31.12.2014
EUR thousand
Interest rate derivatives
Interest rate swaps 2,400 3,000
CONSOLIDATED KEY FIGURES
EUR thousand 1.1. – 31.12. 1.1. – Change, %
2015 31.12.
2014
Continuing operations
Net sales 80,196 79,253 1.2
Operating profit 4,414 8,887 -50.3
% of net sales 5.5 11.2
Profit before tax 4,257 8,457 -49.7
% of net sales 5.3 10.7
Profit for the period 2,844 5,702 -50.1
% of net sales 3.5 7.2
Shareholders’ equity 30,716 29,720 3.4
Interest-bearing liabilities 8,476 5,623 50.7
Cash and cash equivalents 7,874 8,218 -4.2
Net interest-bearing liabilities 602 -2,595 -123.2
Capital employed 39,192 35,342 10.9
Return on equity, % 9.4 21.7
Return on capital employed, % 12.0 25.2
Equity ratio, % 57.1 56.9
Net gearing, % 2.0 -8.7
Capital expenditure 4,295 4,354 -1.4
% of net sales 5.4 5.5
Research and development costs 1,850 1,837 0.7
% of net sales 2.3 2.3
Order stock 15,348 12,833 19.6
Earnings per share, EUR 0.24 0.48 -50.0
Earnings per share, EUR, diluted 0.24 0.48 -50.0
Equity per share, EUR 2.58 2.50 3.2
Average number of shares
- cumulative 11,897 11,897
- cumulative, diluted 11,897 11,897
Average number of employees 498 433 15.0
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