2012-07-25 09:00:00 CEST
2012-07-25 09:00:04 CEST
REGULATED INFORMATION
Exel Composites Oyj - Interim report (Q1 and Q3)
Exel Composites Plc's interim report for January 1 - June 30, 2012
EXEL COMPOSITES PLC STOCK EXCHANGE RELEASE 25.7.2012 at
10.00 1 (11)
EXEL COMPOSITES PLC'S INTERIM REPORT FOR JANUARY 1 - JUNE 30, 2012
APRIL - JUNE 2012 HIGHLIGHTS
- Net sales decreased to EUR 19.8 (23.4) million in the second quarter of 2012,
down by 15.3 per cent on the previous year
- Operating profit was EUR 1.8 (3.6 including EUR +0.2 million one-off items)
million in the second quarter of 2012, or 9.2 (15.5) per cent of net sales
- Net operative cash flow was positive at EUR +1.9 (+2.3) million
- Fully diluted earnings per share were EUR 0.11 (0.22)
JANUARY - JUNE 2012 HIGHLIGHTS
- Net sales decreased to EUR 40.3 (44.9) million in the first six months of
2012, down by 10.3 per cent on the corresponding period in 2011
- Operating profit was EUR 3.6 (6.8 including EUR +0.2 million one-off items)
million in the first six months of 2012, or 9.0 (15.1) per cent of net sales
- Net operative cash flow was positive at EUR +3.4 (+4.0) million
- Fully diluted earnings per share were EUR 0.22 (0.41)
OUTLOOK FOR 2012
Major uncertainties relating to general growth prospects in the economy
continue, and these uncertainties may affect the demand for composite products.
Due to the prevailing state of the markets, the visibility is low.
Exel Composites maintains its cautious stance in 2012, but will continue to
drive the long-term initiatives to strengthen the Company's competitive
position and to invest in growing market segments to pursue the strategy of
profitable growth.
COMMENTS BY THE CEO
“The demand remained on the same level as during the previous three quarters.
Compared to the second quarter of 2011, net sales decreased by 15.3 per cent to
EUR 19.8 (23.4) million. Market demand decreased in the building, construction
and infrastructure market, telecommunication products, energy sector and
machine industry compared to the same period last year. Market demand increased
in the transportation and cleaning and maintenance segments compared both to
the second quarter of 2011 and the first quarter of 2012. The weak market
situation has affected the sales of our main customers, which has resulted in
declining sales for Exel Composites. We have invested actively in our sales
activities and developed constantly new applications in co-operation with our
current and new customers.
The Group's operating profit for the second quarter of 2012 decreased to EUR
1.8 (3.6) million. The decreased sales volumes and increased employee expenses
were the main reasons for the decrease in the operating profit. Our operating
cash flow continued to be clearly positive. Our financial position is strong
and net gearing was 7.6 per cent.
Cost-savings campaigns were initiated in all the units of the Group.
Co-determination negotiations concerning the Finnish units were finalized in
July 2012. We will continue measures to mitigate the effects of the rising
costs, and to pass them to the market by increasing product prices.
The Group's units in Austria and Belgium achieved ISO 14001 environmental
management status in May 2012. The Group's Finnish and Chinese units have been
certified earlier. The aim is to have all the units of the Group certified in
2012.
Visibility remains low and we remain cautious. However, the financial situation
of Exel Composites is strong and we will continue our strategy of profitable
growth and to invest in the development of new products, to expand our customer
base by reinforcing sales and to maintain good cost control. We are prepared to
reinforce actions to cope with continuing slow demand and uncertainty.”
CONSOLIDATED KEY FIGURES, EUR million
(unaudited)
1.4. - 1.4 - Change 1.1. - 1.1. - Change 1.1. -
30.6. 30.6. % 30.6. 30.6. 31.12.
2012 2011 2012 2011 2011
Net sales 19.8 23.4 -15.3 40.3 44.9 -10.3 85.1
Operating profit 1.8 3.6 -50.0 3.6 6.8 -46.1 11.1
% of net sales 9.2 15.5 9.0 15.1 13.0
Profit for the period 1.3 2.6 -49.5 2.6 4.9 -46.8 7.9
Shareholders' equity 32.4 30.8 5.3 32.4 30.8 5.3 35.1
Net interest-bearing 2.5 2.1 -18.3 2.5 2.1 -18.3 -1.7
liabilities
Capital employed 42.6 41.0 3.7 42.6 41.0 3.7 43.2
Return on equity, % 16.6 31.8 15.5 31.0 23.5
Return on capital 18.4 34.2 17.3 32,5 26.1
employed, %
Equity ratio, % 56.8 54.0 56.8 54.0 61.6
Net gearing, % 7.6 6.8 7.6 6.8 -5.0
Earnings per share, 0.11 0.22 0.22 0.41 0.67
EUR
Earnings per share, 0.11 0.22 0.22 0.41 0.67
diluted, EUR Equity per share, EUR 2.73 2.59 2.73 2.59 2.95
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 2011 financial
statements.
FINANCIAL PERFORMANCE
1 April - 30 June 2012
The demand remained on the same level as during the previous three quarters.
The Group's net sales in April - June 2012 decreased by 15.3 per cent on the
corresponding period last year and were EUR 19.8 (23.4) million. Market demand
decreased in the building, construction and infrastructure market,
telecommunication products, energy sector and machine industry compared to the
same period last year. Market demand increased in the transportation and
cleaning and maintenance segments compared both to the second quarter of 2011
and the first quarter of 2012. The weak market situation affected the sales of
our main customers, which has resulted in declining sales. We have invested
actively in our sales activities and developed constantly new applications in
co-operation with our current and new customers.
Exel Composites' operating profit for the second quarter of 2012 was EUR 1.8
(3.6 including EUR +0.2 million one-off items) million or 9.2 (15.5) per cent
of net sales. The decreased sales volumes and increased employee expenses were
the main reasons for the decrease in the operating profit. Cost-savings
campaigns were initiated in all the units of the Group to adjust costs to
current sales levels. We will continue measures to mitigate the effects of the
rising costs, and to pass them to the market by increasing product prices.
The Group's units in Austria and Belgium achieved ISO 14001 environmental
management status in May 2012. The Group's Finnish and Chinese units have been
certified earlier. The aim is to have all the units of the Group certified in
2012.
1 January - 30 June 2012
The weak demand that started during the third quarter of 2011 continued in the
first half of 2012. The Group's net sales in January - June 2012 decreased by
10.3 per cent to EUR 40.3 (44.9) million compared to the corresponding period
in 2011.
Exel Composites' operating profit in January - June 2012 decreased by 46.1 per
cent to EUR 3.6 (6.8 including EUR +0.2 million one-off items) million compared
to the corresponding period last year. Operating profit as a percentage of net
sales was 9.0 (15.1) per cent. The declined operating profit is mainly due to
decreased sales volumes and investments made in organizational development.
The Group's net financial expenses in January - June 2012 were EUR -0.1 (-0.1)
million. The Group's profit before taxes was EUR 3.5 (6.6) million and profit
after taxes EUR 2.6 (4.9) million.
Earnings per share were EUR 0.22 (0.41). Return on capital employed was 17.3
(32.5) per cent. Return on equity was 15.5 (31.0) per cent.
BALANCE SHEET AND FINANCIAL POSITION
Cash flow from business operations was positive at EUR 3.4 (4.0) million. Cash
flow before financing, but after capital expenditure, amounted to EUR 1.8 (2.5)
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 7.7
(8.1) million.
The Group's consolidated total assets at the end of the period under review
were EUR 57.2 (57.1) million.
Interest-bearing liabilities amounted to EUR 10.1 (10.2) million. Net
interest-bearing liabilities were EUR 2.5 (2.1) million.
The dividend for 2011 resolved by the Annual General Meeting on 29 March 2012
totaling EUR 5.9 (5.9) million, or EUR 0.50 (0.50) per share, was paid on 12
April 2012.
Equity at the end of the period under review was EUR 32.4 (30.8) million and
equity ratio 56.8 (54.0) per cent. The net gearing ratio was 7.6 (6.8) per
cent.
CAPITAL EXPENDITURE AND DEPRECIATION
The capital expenditure on fixed assets amounted to EUR 1.7 (1.5) million.
Total depreciation of non-current assets during the period under review
amounted to EUR 1.5 (1.3) million.
PERSONNEL
The number of Exel Composites Group employees on 30 June 2012 was 438 (438), of
whom 206 (205) worked in Finland and 232 (233) in other countries. The average
number of personnel during the financial year was 432 (424).
Co-determination negotiations concerning the salaried employees working in the
Finnish units of the Exel Composites Group were started in June 2012. As a
result of negotiations, the amount of employment contracts to be terminated are
five at the most. Possibilities for part-time employment contracts will be
investigated for some of the persons concerned. In addition, job descriptions,
tasks and essential terms of the employment contracts will be altered to
correspond to the new situation when necessary.
Furthermore, the salaried employees of the Finnish units will be laid off
temporarily for a maximum of 90 days between autumn 2012 and spring 2013.
Permanent personnel reductions will take place by the end of 2012.
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 2012, 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.
Based on the closing price on 30 June 2012, the market capitalization totaled
EUR 80.7 (96.6) million. During the reporting period 512,570 (649,317) shares
were traded, accounting for 4.3 (5.5) per cent of the average number of shares
outstanding.
The highest share quotation was EUR 8.79 (9.40) and the lowest EUR 6.42 (6.85).
The share price closed at EUR 6.78 (8.12). The average share price during the
period under review was EUR 7.82 (8.29).
Own shares
Exel Composites did not hold any of its own shares during the period of review.
SHAREHOLDERS AND DISCLOSURES
Exel Composites had a total of 2,718 (2,566) shareholders on 30 June 2012.
Information on Exel Composites' shareholders is available on the Company
website at www.exelcomposites.com.
Exel Composites received no flagging notifications 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. Raw
material prices, energy cost and other cost increases may continue and 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.
OUTLOOK FOR 2012
Major uncertainties relating to general growth prospects in the economy
continue, and these uncertainties may affect the demand for composite products.
Due to the prevailing state of the markets, the visibility is low.
Exel Composites maintains its cautious stance in 2012, but will continue to
drive the long-term initiatives to strengthen the Company's competitive
position and to invest in growing market segments to pursue the strategy of
profitable growth.
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.
2012 2011 % 2012 2011 2011
Net sales 19,791 23,367 -15.3 40,310 44,915 -10.3 85,136
Materials and services -7,491 -9,295 19.4 -15,61 -17,67 11.7 -33,35 0 3 8
Employee benefit -5,942 -5,672 -4.8 -11,56 -10,89 -6.1 -21,13
expenses 0 4 3
Depreciation and -723 -663 -9.0 -1,464 -1,347 -8.7 -2,702
impairment
Other operating expenses -4,209 -4,424 4.9 -8,660 -8,686 0.3 -17,70
9
Other operating income 390 317 23.3 629 452 39.2 849
Operating profit 1,816 3,630 -50.0 3,645 6,768 -46.1 11,082
Net financial items -30 -104 71.2 -113 -127 11.0 -284
Profit before tax 1,786 3,527 -49.4 3,532 6,641 -46.8 10,798
Income taxes -485 -948 48.8 -920 -1,729 46.8 -2,852
Profit/loss for the 1,302 2,579 -49.5 2,612 4,912 -46.8 7,946
period
Other comprehensive
income:
Exchange differences on 866 172 403.5 660 -696 194.8 893
translating foreign
operations
Other comprehen-sive 866 172 403.5 660 -696 194.8 893
income, net of tax
Total comprehen- 2,167 2,751 -21.2 3,272 4,216 -22.4 8,839
sive income
Profit/loss attributable
to:
Equity holders of the 1,302 2,579 2,612 4,912 7,946
parent company
Comprehensive income
attributable to:
Equity holders of the 2,167 2,751 3,272 4,216 8,839
parent company
Earnings per share, 0.11 0.22 0.22 0.41 0.67
diluted and undiluted,
EUR
CONDENSED CONSOLIDATED BALANCE SHEET
EUR thousand 30.6.2012 30.6.2011 Change 31.12.2011
ASSETS
Non-current assets
Goodwill 12,238 11,396 842 11,939
Other intangible assets 1,811 2,109 -298 1,961
Tangible assets 12,123 10,576 1,547 11,612
Deferred tax assets 101 642 -541 148
Other non-current assets 64 63 1 64
Non-current assets total 26,337 24,786 1,551 25,723
Current assets
Inventories 10,556 10,097 459 10,499
Trade and other receivables 12,650 14,109 -1,459 10,985
Cash at bank and in hand 7,660 8,131 -471 9,840
Current assets total 30,866 32,336 -1,470 31,323
Total assets 57,203 57,122 81 57,047
EQUITY AND LIABILITIES
Shareholders' equity
Share capital 2,141 2,141 0 2,141
Other reserves 30 30 0 30
Invested unrestricted equity fund 8,488 8,488 0 8,488
Translation differences 4,864 2,616 2,248 4,204
Retained earnings 14,306 12,631 1,675 12,309
Profit for the period 2,612 4,912 -2,300 7,946
Total equity attributable to equity 32,442 30,818 1,624 35,118
holders of the parent company
Total equity 32,442 30,818 1,624 35,118
Non-current liabilities
Interest-bearing liabilities 8,117 10,207 -2,090 8,088
Interest-free liabilities 410 367 43 392
Deferred tax liabilities 497 559 -62 539
Current liabilities
Interest-bearing liabilities 2,011 10 2,001 10
Trade and other non-current 13,727 15,160 -1,433 12,900
liabilities
Total liabilities 24,761 26,304 -1,543 21,928
Total equity and liabilities 57,203 57,122 81 57,047
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 37 8,488 3,311 18,529 32,507
January
2011
Comprehensiv 0 0 0 -696 4,912 4,216
e result
Other items 0 -7 0 0 50 43
Dividend 0 -5,948
Balance at 2,141 30 8,488 2,616 17,543 30,818
30 June
2011
Balance at 1 2,141 30 8,488 4,204 20,255 35,118
January
2012
Comprehensiv 0 0 0 660 2,612 3,272
e result
Other items 0 0 0 -1 -1
Dividend 0 -5,948 -5,948
Balance at 2,141 30 8,488 4,864 16,918 32,442
30 June
2012
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
EUR thousand 1.1. - 30.6. 1.1. - Change 1.1. -
2012 30.6. 31.12.
2011 2011
Cash Flow from Operating Activities
Profit for the period 2,612 4,912 -2,300 7,946
Adjustments 2,700 2,562 138 6,308
Change in working capital -492 -2,468 1,976 -2,216
Cash Flow Generated by Operations 4,820 5,006 -186 12,038
Interest paid -99 -173 74 -349
Interest received 65 47 18 129
Other financial items -8 146 -154 -191
Income taxes paid -1,344 -1,070 -274 -2,067
Net Cash Flow from Operating Activities 3,434 3,956 -522 9,560
Capital expenditure -1,677 -1,478 -199 -3,208
Proceeds from sale of fixed assets 16 0 16 0
Cash Flow from Investing Activities -1,661 -1,478 -183 -3,208
Cash Flow from Financing
Proceeds from long-term borrowings 0 0 0 0
Instalments of long-term borrowings 0 0 0 -2,160
Change in short-term loans 2,000 0 2,000 0
Instalments of finance lease liabilities -5 -5 0 -10
Dividends paid -5,948 -5,948 0 -5,948
Net Cash Flow from Financing -3,953 -5,953 2,000 -8,118
Change in Liquid Funds -2,180 -3,475 1,295 -1,766
Liquid funds in the beginning of period 9,840 11,606 -1,766 11,606
Change in liquid funds -2,180 -3,475 1,295 -1,766
Liquid funds at the end of period 7,660 8,131 -471 9,840
QUARTERLY KEY FIGURES
EUR thousand II/ I/ IV/ III/ II/ I/
2012 2012 2011 2011 2011 2011
Net sales 19,791 20,519 19,758 20,463 23,367 21,548
Materials and services -7,491 -8,119 -7,529 -8,156 -9,295 -8,378
Employee benefit expenses -5,942 -5,618 -5,419 -4,820 -5,672 -5,221
Depreciation and impairment -723 -742 -672 -683 -663 -684
Operating expenses -4,209 -4,452 -4,668 -4,356 -4,424 -4,262
Other operating income 390 240 284 113 317 135
Operating profit 1,816 1,828 1,754 2,560 3,630 3,137
Net financial items -30 -83 -31 -126 -104 -23
Profit before taxes 1,786 1,745 1,723 2,434 3,527 3,115
Income taxes -485 -435 -459 -664 -948 -782
Profit/loss for the period from 1,302 1,310 1,264 1,770 2,579 2,333
continuing operations
Profit/loss for the period 1,302 1,310 1,264 1,770 2,579 2,333
Earnings per share, EUR 0.11 0.11 0.11 0.15 0.22 0.20
Earnings per share, EUR, diluted 0.11 0.11 0.11 0.15 0.22 0.20
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 435 428 433 433 432 416
COMMITMENTS AND CONTINGENCIES
EUR thousand 30.6.2012 30.6.2011
On own behalf
Mortgages 2,783 2,783
Corporate mortgages 12,500 12,500
Lease liabilities
- in next 12 months 903 927
- in next 1-5 years 3,054 2,481
Other commitments 45 6
DERIVATIVE FINANCIAL INSTRUMENTS
Nominal values 30.6.2012 30.6.2011
EUR thousand
Interest rate derivatives
Interest rate swaps 5,000 10,000
CONSOLIDATED KEY FIGURES
EUR thousand 1.1. - 30.6. 1.1. - 30.6. Change % 1.1. -
2012 2011 31.12.
2011
Net sales 40,310 44,915 -10.3 85,136
Operating profit 3,645 6,768 -46.1 11,082
% of net sales 9.0 15.1 13.0
Profit before tax 3,532 6,641 -46.8 10,798
% of net sales 8.8 14.8 12.7
Profit for the period 2,612 4,912 -46.8 7,946
% of net sales 6.5 10.9 9.3
Shareholders' equity 32,442 30,818 5.3 35,118
Interest-bearing liabilities 10,128 10,217 -0.9 8,098
Cash and cash equivalents 7,660 8,131 -5.8 9,840
Net interest-bearing 2,468 2,086 -18.3 -1,742
liabilities
Capital employed 42,569 41,035 3.7 43,216
Return on equity, % 15.5 31.0 23.5
Return on capital employed, 17.3 32.5 26.1
%
Equity ratio, % 56.8 54.0 61.6
Net gearing, % 7.6 6.8 -5.0
Capital expenditure 1,677 1,478 13.5 3,208
% of sales 4.2 3.3 3.8
Research and development 857 795 7.8 1,639
costs
% of net sales 2.1 1.8 1.9
Order stock 14,173 15,946 -11.1 13,114
Earnings per share, EUR 0.22 0.41 -46.7 0.67
Earnings per share, EUR, 0.22 0.41 -46.7 0.67
diluted
Equity per share, EUR 2.73 2.59 5.4 2.95
Average number of shares
- cumulative 11,897 11,897 11,897
- cumulative, diluted 11,897 11,897 11,897
Average number of employees 432 424 1.9 428
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 2012
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.com
Ilkka 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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