2012-05-04 08:00:08 CEST
2012-05-04 08:00:17 CEST
REGULATED INFORMATION
Exel Composites Oyj - Interim report (Q1 and Q3)
Exel Composites Plc's interim report for January 1 - March 31, 2012
EXEL COMPOSITES PLC STOCK EXCHANGE RELEASE 4.5.2012 at
9.00 1 (11)
EXEL COMPOSITES PLC'S INTERIM REPORT FOR JANUARY 1 - MARCH 31, 2012
JANUARY - MARCH 2012 HIGHLIGHTS
- Net sales were EUR 20.5 (21.5) million in the first quarter of 2012, down by
-4.8 per cent on the previous year
- Operating profit was EUR 1.8 million in the first quarter of 2012 compared to
EUR 3.1 million in the first quarter of 2011, or 8.9 (14.6) per cent of net
sales
- Net operative cash flow was positive at EUR +1.5 (+1.6) million
- Fully diluted earnings per share were EUR 0.11 (0.20)
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 weak demand continued in the first quarter of 2012. Compared to the first
quarter of 2011, net sales decreased by 4.8 per cent. However, our net sales
improved slightly on the previous quarters and were EUR 20.5 million. Market
demand continued to be good in the building, construction and infrastructure
market segment, as well as in the electrical industry. Demand in
telecommunication products and the machine industry decreased on the previous
year.
The Group's operating profit for the first quarter of 2012 was EUR 1.8 (3.1)
million. The decreased sales volumes and increased employee expenses were the
main reasons for the decrease in the operating profit. Moreover, increased raw
material costs and ramp-up costs of new products had an adverse effect on the
margins. We continued measures to mitigate the effects, and were able to pass
part of the rising costs to the market by increasing product prices. We shall
continue price increases to offset the negative impact.
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 to improve productivity.
Visibility remains low and we remain cautious. However, 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 take more efficient actions to cope with continuing
slow demand and uncertainty.”
CONSOLIDATED KEY FIGURES, EUR million
(unaudited)
1.1. - 1.1 - 31.3. Change % 1.1. -
31.3. 2011 31.12.
2012 2011
Net sales 20.5 21.5 -4.8 85.1
Operating profit 1.8 3.1 -41.7 11.1
% of net sales 8.9 14.6 13.0
Profit for the period 1.3 2.3 -43.8 7.9
Shareholders' equity 30.3 34.0 -11.0 35.1
Net interest-bearing liabilities -2.4 -2.4 0.3 -1.7
Capital employed 38.4 44.2 -13.2 43.2
Return on equity, % 16.0 28.1 23.5
Return on capital employed, % 18.1 29.1 26.1
Equity ratio, % 51.5 57.0 61.6
Net gearing, % -8.1 -7.2 -5.0
Earnings per share, EUR 0.11 0.20 0.67
Earnings per share, diluted, EUR 0.11 0.20 0.67
Equity per share, EUR 2.54 2.86 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
The softening of the overall demand that started towards the end of 2011
continued in the first quarter of 2012. Compared to the first quarter of 2011,
net sales decreased by 4.8 per cent. However, our net sales improved slightly
on the previous quarters and were EUR 20.5 million. Since year-end the order
book increased by EUR 1.3 million to EUR 14.5 (14.4) million. Market demand
continued to be good in the building, construction and infrastructure market
segment, as well as in the electrical industry. Demand in telecommunication
products and the machine industry softened on the previous year.
Exel Composites' operating profit for the first quarter of 2012 was EUR 1.8
(3.1) million or 8.9 (14.6) per cent of net sales. The decreased sales volumes
and increased employee expenses were the main reasons for the decrease in the
operating profit. The increased raw material costs and ramp-up costs of new
products had an adverse effect on the margins. Exel Composites continued
measures to mitigate the effects, and passed part of the rising costs to the
market by increasing product prices. Exel Composites shall continue price
increases to offset the negative impact.
The Group's net financial expenses in the first quarter of 2012 were EUR 0.1
(0.0) million. The Group's profit before taxes was EUR 1.7 (3.1) million and
profit after taxes EUR 1.3 (2.3) million.
Earnings per share were EUR 0.11 (0.20). Return on capital employed was 18.1
(29.1) per cent. Return on equity was 16.0 (28.1) per cent.
BALANCE SHEET AND FINANCIAL POSITION
Cash flow from business operations was positive at EUR 1.5 (1.6) million. Cash
flow before financing, but after capital expenditure, amounted to EUR 0.7 (1.1)
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 10.6
(12.7) million.
The Group's consolidated total assets at the end of the period under review
were EUR 58.8 (59.8) million.
Interest-bearing liabilities amounted to EUR 8.1 (10.2) million. Net
interest-bearing liabilities were EUR -2.4 (-2.4) million.
The dividend for 2011 resolved by the Annual General Meeting on 29 March 2012
totaling EUR 5.9 (5.9) was paid on 12 April 2012.
Equity at the end of the first quarter of 2012 was EUR 30.3 (34.0) million and
equity ratio 51.5 (57.0) per cent. The net gearing ratio was -8.1 (-7.2) per
cent.
CAPITAL EXPENDITURE AND DEPRECIATION
The capital expenditure on fixed assets amounted to EUR 0.8 (0.6) million.
Total depreciation of non-current assets during the period under review
amounted to EUR 0.7 (0.7) million.
PERSONNEL
The number of Exel Composites Group employees on 31 March 2012 was 433 (418),
of whom 200 (196) worked in Finland and 233 (222) in other countries. The
average number of personnel during the financial year was 428 (416).
Kim Sjödahl was appointed SVP Product and Technology Development and member of
the Group Management Team as of 1 February 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 March 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 31 March 2012, the market capitalization totaled
EUR 98.6 (110.4) million. During the reporting period 241,203 (343,137) shares
were traded, accounting for 2.0 (2.9) per cent of the average number of shares
outstanding.
The highest share quotation was EUR 8.79 (9.30) and the lowest EUR 7.70 (6.85).
The share price closed at EUR 8.29 (9.28). The average share price during the
period under review was EUR 8.36 (7.90).
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 2,726 (2,522) shareholders on 31 March 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.
ANNUAL GENERAL MEETING
Exel Composites' Annual General Meeting (“AGM”) was held on 29 March 2012. The
financial accounts of the Group were approved and the members of the Board of
Directors and the President were discharged from their liabilities for the
financial year 2011. The AGM approved the Board of Directors' proposal to
distribute a dividend of EUR 0.50 per share for the financial period that ended
on 31 December 2011.
The Annual General Meeting authorized the Board of Directors to acquire the
Company's own shares by using unrestricted equity. The maximum amount to be
acquired is 600,000 shares. The authorization is valid until the next Annual
General Meeting.
The AGM confirmed the number of the members of the Board of Directors as five
and elected a new Board. All the members of the Board of Directors were
re-elected: Heikki Hiltunen, Peter Hofvenstam, Göran Jönsson, Reima Kerttula
and Heikki Mairinoja. At the formative meeting of the Board of Directors held
after the AGM, the Board of Directors elected from among its members Peter
Hofvenstam as its Chairman.
The AGM decided that the annual remuneration for the Board members be
unchanged, i.e. the Chairman of the Board of Directors be paid a yearly
remuneration of EUR 34,000 and additionally EUR 1,500 for attendance at Board
and committee meetings and other similar Board assignments and the other Board
members be paid a yearly remuneration of EUR 16,000 and additionally EUR 1,000
for attendance at Board and committee meetings and other similar Board
assignments and that travel expenses and other out-of-pocket expenses arising
from the Board work be compensated in accordance with the Company's established
practice and travel rules. Out of the yearly remuneration 60 per cent will be
paid in cash and 40 per cent in Exel Composites Plc shares, which were acquired
directly for and on behalf of the members of the Board of Directors during 2
April - 10 April 2012 from the stock exchange in amounts corresponding to EUR
13,600 for the Chairman and EUR 6,400 for each of the other members.
MAJOR NEAR-TERM RISKS AND UNCERTAINTIES
The most significant near-term business risks are related to the general
economic development, government regulations and a possible new 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. In case the European Commission decides on new
anti-dumping tariffs to be imposed on Chinese glass fiber, it may have a
negative effect on the profitability if the rising costs of glass fiber can
only be transferred partially to product prices. 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 1.1. - 1.1. - Change, 1.1. -
31.3. 31.3. % 31.12.
2012 2011 2011
Net sales 20,519 21,548 -4.8 85,136
Materials and services -8,119 -8,378 3.1 -33,358
Employee benefit expenses -5,618 -5,221 -7.6 -21,133
Depreciation and impairment -742 -684 -8.5 -2,702
Other operating expenses -4,452 -4,262 -4.5 -17,709
Other operating income 240 135 77.8 849
Operating profit 1,828 3,137 -41.7 11,082
Net financial items -83 -23 -260.9 -284
Profit before tax 1,745 3,115 -44.0 10,798
Income taxes -435 -782 44.4 -2,852
Profit/loss for the period 1,310 2,333 -43.8 7,946
Other comprehensive income:
Exchange differences on translating -205 -867 76.4 893
foreign operations
Other comprehen-sive income, net of 0 0 0 0
tax
Total comprehensive income 1,105 1,466 -24.6 8,839
Profit/loss attributable to:
Equity holders of the parent company 1,310 2,333 7,946
Comprehensive income
attributable to:
Equity holders of the parent company 1,105 1,466 8,839
Earnings per share, diluted and 0.11 0.20 0.67
undiluted, EUR
CONDENSED CONSOLIDATED BALANCE SHEET
EUR thousand 31.3.2012 31.3.2011 Change 31.12.2011
ASSETS
Non-current assets
Goodwill 11,854 11,231 623 11,939
Other intangible assets 1,803 2,203 -400 1,961
Tangible assets 11,730 10,248 1,482 11,612
Deferred tax assets 147 1,661 -1,514 148
Other non-current assets 65 63 2 64
Non-current assets total 25,600 25,406 193 25,723
Current assets
Inventories 10,278 9,480 798 10,499
Trade and other receivables 12,389 12,258 131 10,985
Cash at bank and in hand 10,551 12,662 -2,111 9,840
Current assets total 33,218 34,400 -1,182 31,323
Total assets 58,818 59,805 -987 57,046
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 3,999 2,488 1,511 4,204
Retained earnings 14,306 18,536 -4,230 12,309
Profit for the period 1,310 2,333 -1,023 7,946
Total equity attributable to equity 30,274 34,017 -3,743 35,118
holders of the parent company
Total equity 30,274 34,017 -3,743 35,118
Non-current liabilities
Interest-bearing liabilities 8,103 10,206 -2,103 8,088
Interest-free liabilities 400 364 36 392
Deferred tax liabilities 520 542 -22 539
Current liabilities
Interest-bearing liabilities 10 10 0 10
Trade and other non-current 19,512 14,667 4,845 12,900
liabilities
Total liabilities 28,544 25,788 2,756 21,928
Total equity and liabilities 58,818 59,805 -987 57,046
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 -867 2,333 1,466
e result
Other items 0 -7 0 0 52 44
Dividend 0 0
Balance at 2,141 30 8,488 2,444 20,914 34,017
31 March
2011
Balance at 1 2,141 30 8,488 4,204 20,255 35,118
January
2012
Comprehensiv 0 0 0 -205 1,310 1,105
e result
Other items 0 0 0 0 0
Dividend 0 -5,948 -5,948
Balance at 2,141 30 8,488 3,999 15,616 30,274
31 March
2012
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
EUR thousand 1.1. - 1.1. - Change 1.1. -
31.3. 31.3. 31.12.2011
2012 2011
Cash Flow from Operating Activities
Profit for the period 1,310 2,333 -1,023 7,946
Adjustments 1,153 1,222 -69 6,308
Change in working capital -179 -1,605 1,426 -2,216
Cash Flow Generated by 2,284 1,950 334 12,038
Operations
Interest paid -47 -50 3 -349
Interest received 20 27 -7 129
Other financial items 14 41 -27 -191
Income taxes paid -767 -337 -430 -2,067
Net Cash Flow from Operating 1,504 1,631 -127 9,560
Activities
Capital expenditure -790 -573 -217 -3,208
Proceeds from sale of fixed 0 0 0 0
assets
Cash Flow from Investing -790 -573 -217 -3,208
Activities
Cash Flow from Financing
Share issue 0 0 0 0
Proceeds from long-term 0 0 0 0
borrowings
Instalments of long-term 0 0 0 -2,160
borrowings
Change in short-term loans 0 0 0 0
Instalments of finance lease -3 -2 -1 -10
liabilities
Dividends paid 0 0 0 -5,948
Net Cash Flow from Financing -3 -2 -1 -8,118
Change in Liquid Funds 711 1,056 -345 -1,766
Liquid funds in the beginning of 9,840 11,606 -1,766 11,606
period
Change in liquid funds 711 1,056 -345 -1,766
Liquid funds at the end of 10,551 12,662 -2,111 9,840
period
QUARTERLY KEY FIGURES
EUR thousand I/ IV/ III/ II/ I/
2012 2011 2011 2011 2011
Net sales 20,519 19,758 20,463 23,367 21,548
Materials and services -8,119 -7,529 -8,156 -9,295 -8,378
Employee benefit expenses -5,618 -5,419 -4,820 -5,672 -5,221
Depreciation and impairment -742 -672 -683 -663 -684
Operating expenses -4,452 -4,668 -4,356 -4,424 -4,262
Other operating income 240 284 113 317 135
Operating profit 1,828 1,754 2,560 3,630 3,137
Net financial items -83 -31 -126 -104 -23
Profit before taxes 1,745 1,723 2,434 3,527 3,115
Income taxes -435 -459 -664 -948 -782
Profit/loss for the period from 1,310 1,264 1,770 2,579 2,333
continuing operations
Profit/loss for the period 1,310 1,264 1,770 2,579 2,333
Earnings per share, EUR 0.11 0.11 0.15 0.22 0.20
Earnings per share, EUR, diluted 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
Average number of shares, diluted,
1,000 shares 11,897 11,897 11,897 11,897 11,897
Average number of personnel 428 433 433 432 416
COMMITMENTS AND CONTINGENCIES
EUR thousand 31.3.2012 31.3.2011
On own behalf
Mortgages 2,783 2,783
Corporate mortgages 12,500 12,500
Lease liabilities
- in next 12 months 934 1,068
- in next 1-5 years 3,017 2,111
Other commitments 43 6
DERIVATIVE FINANCIAL INSTRUMENTS
Nominal values 31.3.2012 31.3.2011
EUR thousand
Interest rate derivatives
Interest rate swaps 10,000 10,000
CONSOLIDATED KEY FIGURES
EUR thousand 1.1. - 31.3. 1.1. - 31.3. Change % 1.1. -
2012 2011 31.12.
2011
Net sales 20,519 21,548 -4.8 85,136
Operating profit 1,829 3,137 -41.7 11,082
% of net sales 8.9 14.6 13.0
Profit before tax 1,745 3,115 -44.0 10,798
% of net sales 8.5 14.5 12.7
Profit for the period 1,310 2,333 -43.8 7,946
% of net sales 6.4 10.8 9.3
Shareholders' equity 30,274 34,017 -11.0 35,118
Interest-bearing liabilities 8,113 10,216 -20.6 8,098
Cash and cash equivalents 10,551 12,662 -16.7 9,840
Net interest-bearing -2,438 -2,446 0.3 -1,742
liabilities
Capital employed 38,387 44,232 -13.2 43,216
Return on equity, % 16.0 28.1 23.5
Return on capital employed, % 18.1 29.1 26.1
Equity ratio, % 51.5 57.0 61.6
Net gearing, % -8.1 -7.2 -5.0
Capital expenditure 790 573 37.8 3,208
% of sales 3.8 2.7 3.8
Research and development 411 364 12.9 1,639
costs
% of net sales 2.0 1.7 1.9
Order stock 14,459 14,430 0.2 13,114
Earnings per share, EUR 0.11 0.20 -43.9 0.67
Earnings per share, EUR, 0.11 0.20 -43.9 0.67
diluted
Equity per share, EUR 2.54 2.86 -11.2 2.95
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 428 416 2.9 428
PRESS CONFERENCE
Exel Composites will hold an analyst and press conference regarding the interim
report today Friday 4 May 2012 at 12.30 p.m. in the Pavilion Cabinet of the
Scandic Hotel Simonkenttä at 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, 4 May 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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