2011-10-26 08:00:00 CEST
2011-10-26 08:00:08 CEST
REGULATED INFORMATION
Exel Composites Oyj - Interim report (Q1 and Q3)
Exel Composites Plc's interim report for 1 January - 30 September 2011
EXEL COMPOSITES PLC STOCK EXCHANGE RELEASE 26.10.2011 at 9.00 1
(13)
EXEL COMPOSITES PLC'S INTERIM REPORT FOR 1 JANUARY - 30 SEPTEMBER 2011
July - September 2011 highlights
- Net sales increased to EUR 20.5 (18.7) million, up by 9.5 per cent on the
previous year
- Operating profit was EUR 2.6 (2.7) million, representing 12.5 (14.3) per cent
of net sales
- Net operative cash flow was positive at EUR +2.5 (+2.8) million
- Fully diluted earnings per share were EUR 0.15 (0.16)
January - September 2011 highlights
- Net sales increased to EUR 65.4 (53.5) million in the first nine months of
2011, up by 22.1 per cent on the corresponding period in 2010
- Operating profit was EUR 9.3 (6.3) million representing 14.3 (11.8) per cent
of net sales
- Net operative cash flow was positive at EUR +6.5 (+6.9) million
- Fully diluted earnings per share were EUR 0.56 (0.38)
Outlook for 2011
Demand in the pultrusion industry has improved gradually in 2011, though there
are recent signs of a business slowdown. We believe that Exel Composites is
well positioned to take advantage of the growth opportunities in the future. As
a result of improved profitability, good cash flow generation and reduced debt
level we believe in Exel Composites' long-term performance. Exel Composites
recorded a strong first nine months of 2011, but maintains its cautious stance
for the rest of the year 2011, since market uncertainties persist.
Vesa Korpimies, President and CEO:
“Growth continued in the third quarter of 2011. The Group's net sales for the
third quarter of 2011 increased by 9.5 per cent to EUR 20.5 (18.7) million
compared to the corresponding period in 2010. Strong market demand continued in
the telecommunications and machine industry also during the third quarter of
2011. Building and infrastructure sales were supported by a recovery in airport
products from the previous year's low levels as well as a positive trend in
windows and doors driven by consistent sales efforts. Further support to
quarterly sales was provided by the electrical industry following recovered
demand most notably in the electrical machine industry and other electrical
applications.
The operating profit percentage decreased in the third quarter of 2011. The
increased raw material costs started to have an adverse effect on the margins.
We shall continue price increases to offset the negative impact. Personnel
costs increased as we continued to invest more resources in sales and
customer-oriented product development. We will continue to strengthen the
organization to ensure future growth. We also had less one-off items from
Sports licensing in the other operating income this year.
The measures taken in the Chinese and British units to improve efficiency
continued to show positive results. The turnaround projects will continue
throughout 2011.
Exel Composites will continue its strategy of profitable growth and we have a
strong focus on driving sales to current and new customers. However, we are
prepared to take prompt actions to address the risk of a business slowdown.”
CONSOLIDATED KEY FIGURES, EUR million
(unaudited)
1.7.- 1.7.-3 Change 1.1.-30.9. 1.1.-30.9. Change 1.1.-
30.9. 0.9. % 2011 2010 % 31.12.
2011 2010 2010
Net sales 20.5 18.7 9.5 65.4 53.5 22.1 72.9
Operating profit 2.6 2.7 -4.4 9.3 6.3 47.7 9.4
% of net sales 12.5 14.3 14.3 11.8 12.9
Profit for the 1.8 1.9 -5.1 6.7 4.5 49.2 6.8
period
Shareholders' 32.5 29.3 10.9 32.5 29.3 10.9 32.5
equity
Net 0.2 3.1 -93.4 0.2 3.1 -93.4 -1.4
interest-bearing
liabilities
Capital employed 41.3 42.8 -3.5 41.3 42.8 -3.5 42.7
Return on equity, 22.4 26.2 27.4 21.8 23.3
%
Return on capital 25.0 25.3 29.8 20.1 21.8
employed, %
Equity ratio, % 56.5 50.0 56.5 50.0 57.4
Net gearing, % 0.6 10.4 0.6 10.4 -4.3
Earnings per 0.15 0.16 0.56 0.38 0.57
share, EUR
Earnings per 0.15 0.16 0.56 0.38 0.57
share, diluted,
EUR
Equity per share, 2.74 2.47 2.74 2.47 2.73
EUR
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 2010 financial
statements.
FINANCIAL PERFORMANCE
1 July - 30 September 2011
The Group's net sales in July - September 2011 increased on the corresponding
period last year and were EUR 20.5 (18.7) million.
Market conditions have continued to improve. Strong market demand continued in
the telecommunications and machine industry also during the third quarter of
2011. Building and infrastructure sales were supported by a recovery in airport
products from the previous year's low levels as well as a positive trend in
windows and doors driven by consistent sales efforts. Further support to
quarterly sales was provided by the electrical industry following recovered
demand most notably in the electrical machine industry and other electrical
applications.
Exel Composites' operating profit for the third quarter of 2011 was EUR 2.6
(2.7) million, or 12.5 (14.3) per cent of net sales. The increased raw material
costs started to have an adverse effect on the margins. Exel Composites took
measures to mitigate the effects, and passed part of the rising costs to the
market by increasing product prices. Personnel costs increased as we continued
to invest more resources in sales and customer-oriented product development. We
will continue to strengthen the organization to ensure future growth. In the
third quarter 2010 other operating income included one-off licensing income of
EUR 0.4 million. In 2011 other operating income included EUR 0.1 million of
one-off items.
Exel Composites' Nanjing unit in China achieved ISO 14001 Environmental
Management status in September 2011. The Group's Finnish units were granted ISO
14001 environmental certificate earlier. The target is to have all the units of
the Group certified.
The measures taken in the Chinese and British units to improve efficiency
initiated in the last quarter of 2010 continued to show positive results. The
turnaround projects will continue throughout 2011.
Exel Composites entered into trademark license agreement with E-Sports Group in
relation to Exel's pole products on 1 August 2011.
1 January - 30 September 2011
The Group's net sales in January - September 2011 increased by 22.1 per cent to
EUR 65.4 (53.5) million compared to the corresponding period in 2010.
Market conditions have continued to improve. In the first nine months of 2011
demand has increased especially in the machine industry and the
telecommunication market segment. The number of new moulds reached record
numbers in 2011. New products have been numerous especially in the machine
industry.
Raw material costs have continued to increase. Exel Composites has taken action
to mitigate the effects and part of the increase has been transferred into
product prices.
The European Commission raised a new anti-dumping investigation on imported
Chinese glass fiber raw materials in August 2011. Exel Composites has increased
product prices, employed alternative sourcing opportunities and increased
production in its Chinese operations in Nanjing to reduce the impact of the
earlier anti-dumping tariff.
A decision to invest in five new production lines using advanced pultrusion
technology to secure future growth was made in the second quarter of 2011. The
first advanced line started in September in the Mäntyharju unit. It is designed
to produce more demanding and broader products. Exel Composites also invested
more resources in sales and customer-oriented product development and will
continue to strengthen the organization to ensure future growth.
Exel Composites' operating profit in January - September 2011 increased by 47.7
per cent to EUR 9.3 (6.3) million compared to the corresponding period last
year. Operating profit as a percentage of net sales was 14.3 (11.8) per cent.
In 2010 other operating expenses included one-off restructuring costs of
Floorball business amounting to EUR 1.1 million and other operating income
included one-off licensing income of EUR 1.6 million. In January - September
2011 other operating income included EUR 0.3 million of one-off items.
The Group's net financial expenses in January - September 2011 were EUR -0.3
(-0.2) million. The Group's profit before taxes was EUR 9.1 (6.1) million and
profit after taxes EUR 6.7 (4.5) million.
Earnings per share improved to EUR 0.56 (0.38). Return on capital employed was
29.8 (20.1) per cent and return on equity 27.4 (21.8) per cent.
BALANCE SHEET AND FINANCIAL POSITION
Cash flow from business operations was positive at EUR 6.5 (6.9) million. Cash
flow before financing, but after capital expenditure, amounted to EUR 4.4 (6.0)
million.
Capital expenditure was financed with cash flow from business operations. At
the end of the period under review, the Group's liquid assets stood at EUR 8.6
(10.4) million.
The Group's consolidated total assets at the end of the review period were EUR
57.6 (58.6) million.
Interest-bearing liabilities amounted to EUR 8.8 (13.5) million, of which
short-term liabilities accounted for EUR 0.7 (5.3) million. Net
interest-bearing liabilities amounted to EUR 0.2 (3.1) million.
Exel Composites ensured in July 2011 a new committed 3-year revolving credit
facility of EUR 20 million to refinance current credit facilities and to ensure
the financing of growth.
Equity at the end of the period under review was EUR 32.5 (29.3) million and
equity ratio 56.5 (50.0) per cent. The net gearing ratio was 0.6 (10.4) per
cent.
CAPITAL EXPENDITURE AND DEPRECIATION
The capital expenditure on fixed assets amounted to EUR 2.1 (1.0) million.
Total depreciation of non-current assets during the period under review
amounted to EUR 2.0 (2.2) million.
PERSONNEL
The number of Exel Composites Group employees on 30 September 2011 was 431
(408), of whom 200 (188) worked in Finland and 231 (220) in other countries.
The average number of personnel during the reporting period was 427 (402). The
increase both in Finland and abroad is due to the increased sales volumes.
GROUP STRATEGY REDEFINED
The Group strategy was redefined and the financial goals over a business cycle
remained unchanged:
-- The objective is that Exel Composites' average organic growth annually
exceeds market growth of the industry. Growth achieved through acquisitions
is part of Exel Composites' strategy
-- Exel Composites' target is the operating profit to exceed 10 per cent of
net sales
-- Exel Composites aims to distribute at least 40 per cent of net income in
dividends, as permitted by the financial structure and growth
opportunities.
SHARES AND SHARE CAPITAL
At the end of September 2011, 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 September 2011, the market capitalization
totaled EUR 89.2 (65.6) million. During the reporting period 1,099,591
(1,831,394) shares were traded, accounting for 9.2 (15.4) per cent of the
average number of shares outstanding.
The highest share quotation was EUR 9.40 (6.79) and the lowest EUR 6.75 (5.00).
The share price closed at EUR 7.50 (5.51). The average share price during the
review period was EUR 8.18 (5.81).
Exel Composites did not hold any of its own shares during the period under
review.
SHAREHOLDERS AND DISCLOSURES
Exel Composites had a total of 2,573 shareholders on 30 September 2011.
Information on Exel Composites' shareholders is available on the Company
website at www.exelcomposites.com.
Exel Composites received no flagging notifications during the period of review.
EVENTS AFTER THE PERIOD UNDER REVIEW
No material events took place after the reporting period.
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. If the measures taken in the
Chinese and British units to improve efficiency prove to be unsuccessful, this
may have an effect on the result of the company. 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 2011
Demand in the pultrusion industry has improved gradually in 2011, though there
are recent signs of a business slowdown. We believe that Exel Composites is
well positioned to take advantage of the growth opportunities in the future. As
a result of improved profitability, good cash flow generation and reduced debt
level, we believe in Exel Composites' long-term performance. Exel Composites
recorded strong first nine months of 2011, but maintains its cautious stance
for the rest of the year 2011, since market uncertainties persist.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
(unaudited)
EUR thousand 1.7.-3 1.7.-30.9. Change 1.1.-30.9. 1.1.-30.9. Change 1.1.-3
0.9. 2010 % 2011 2010 % 1.12.
2011 2010
Net sales 20,463 18,692 9.5 65,378 53,534 22.1 72,872
Materials -8,156 -7,451 -9.5 -25,829 -20,703 -24.8 -28,40
and 3
services
Employee -4,820 -4,577 -5.3 -15,714 -13,851 -13.5 -18,83
benefit 3
expenses
Deprecia-tio -683 -724 5.7 -2,030 -2,162 6.1 -2,880
n and
impairment
Other -4,356 -3,856 -13.0 -13,041 -12,908 -1.0 -16,80
operating 8
expenses
Other 113 595 -81.0 565 2,403 -76.5 3,481
operating
income
Operating 2,560 2,679 -4.4 9,328 6,315 47.7 9,430
profit
Net -126 -152 17.1 -253 -248 -2.0 -493
financial
items
Profit 2,434 2,527 -3.7 9,075 6,067 49.6 8,936
before tax
Income taxes -664 -662 -0.3 -2,393 -1,587 -50.8 -2,165
Profit/ 1,770 1,865 -5.1 6,682 4,480 49.2 6,772
loss for the
period
Other
comprehensi
ve income:
Exchange -47 -43 -9.3 -742 2,260 -132.8 3,411
differences
on
translating
foreign
operations
Other -47 -43 -9.3 -742 2,260 -132,8 3,411
comprehensi
ve income,
net of tax
Total 1,724 1,823 -5.4 5,940 6,741 -11.9 10,183
comprehen-s
ive income
Profit/
loss
attribu-tab
le to:
Equity 1,770 1,865 -24.4 6,682 4,480 41.1 6,772
holders of
the parent
company
Comprehen-si
ve income
attribu-tabl
e to:
Equity 1,724 1,823 -5.4 5,940 6,741 -11.9 10,183
holders of
the parent
company
Earnings per 0.15 0.16 0.56 0.38 0.57
share,
diluted and
undiluted,
EUR
CONDENSED CONSOLIDATED BALANCE SHEET
EUR thousand 30.9. 30.9. Change 31.12.
2011 2010 2010
ASSETS
Non-current assets
Goodwill 11,142 11,020 122 11,637
Other intangible assets 1,921 2,360 -439 2,426
Tangible assets 10,870 10,295 575 10,427
Deferred tax assets 557 1,875 -1,318 1,585
Other non-current assets 63 64 -1 64
Non-current assets total 24,554 25,613 -1,061 26,139
Current assets
Inventories 10,868 9,782 1,086 9,600
Trade and other receivables 13,632 12,849 783 9,540
Cash at bank and in hand 8,555 10,399 -1,844 11,606
Current assets total 33,056 33,029 27 30,746
Total assets 57,610 58,643 -1,033 56,885
EQUITY AND LIABILITIES
Shareholders´ equity
Share capital 2,141 2,141 0 2,141
Other reserves 30 37 -7 37
Invested unrestricted equity fund 8,488 8,488 0 8,488
Translation differences 2,569 2,161 408 3,311
Retained earnings 12,633 12,039 594 11,757
Profit for the period 6,682 4,480 2,202 6,772
Total equity attributable to equity holders of 32,544 29,347 3,197 32,507
the parent company
Total equity 32,544 29,347 3,197 32,507
Non-current liabilities
Interest-bearing liabilities 8,048 8,158 -110 10,204
Interest-free liabilities 356 335 21 362
Deferred tax liabilities 555 316 239 549
Current liabilities
Interest-bearing liabilities 710 5,299 -4,589 15
Trade and other non-current liabilities 15,396 15,188 208 13,250
Total liabilities 25,066 29,296 -4,230 24,378
Total equity and liabilities 57,610 58,643 -1,033 56,885
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 -100 15,013 25,580
January 2010
Comprehensive 0 0 0 2,260 4,480 6,740
result
Dividend 0 -2,974 -2,974
Balance at 30 2,141 37 8,488 2,161 16,519 29,347
September
2010
Balance at 2,141 37 8,488 3,311 18,529 32,507
1st January
2011
Comprehensive 0 0 0 -742 6,682 5,940
result
Other items 0 -7 0 0 53 45
Dividend 0 -5,948 -5,948
Balance at 30 2,141 30 8,488 2,569 19,315 32,544
September
2011
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
EUR thousand 1.1.-30.9. 1.1.-30.9. Change 31.12.
2011 2010 2010
Cash Flow from Operating Activities
Profit for the period 6,682 4,480 2,202 6,772
Adjustments 4,591 4,976 -385 6,276
Change in working capital -2,618 -958 -1,660 1,729
Cash Flow Generated by Operations 8,655 8,498 157 14,777
Interest paid -245 -328 83 -515
Interest received 62 143 -81 114
Other financial items -90 -44 -46 -88
Income taxes paid -1,895 -1,345 -550 -2,296
Net Cash Flow from Operating Activities 6,487 6,924 -437 11,992
Acquisitions 0 0 0 0
Disposal of business 0 0 0 0
Capital expenditure -2,123 -919 -1,204 -1,570
Proceeds from sale of fixed assets 0 0 0 0
Cash Flow from Investing Activities -2,123 -919 -1,204 -1,570
Cash Flow from Financing
Share issue 0 0 0 0
Proceeds from long-term borrowings 0 0 0 0
Instalments of long-term borrowings -2,160 -4,357 2,197 -6,857
Change in short-term loans 700 0 700 -106
Instalments of finance lease -7 -872 865 -1,477
liabilities
Dividends paid -5,948 -2,974 -2,974 -2,974
Net Cash Flow from Financing -7,415 -8,203 788 -11,414
Change in Liquid Funds -3,051 -2,198 -853 -992
Liquid funds in the beginning of period 11,606 12,597 -991 12,597
Change in liquid funds -3,051 -2,198 -853 -992
Liquid funds at the end of period 8,555 10,399 -1,844 11,606
QUARTERLY KEY FIGURES
EUR thousand III/ II/ I/ IV/ III/ II/ 1/
2011 2011 2011 2010 2010 2010 2010
Net sales 20,463 23,367 21,548 19,338 18,692 19,173 15,671
Materials and services -8,156 -9,295 -8,378 -7,700 -7,451 -7,189 -6,062
Employee benefit -4,820 -5,672 -5,221 -4,982 -4,577 -4,892 -4,381
expenses
Depreciation and -683 -663 -684 -719 -724 -763 -675
impairment
Operating expenses -4,356 -4,424 -4,262 -3,901 -3,856 -4,229 -4,824
Other operating income 113 317 135 1,078 595 553 1,255
Operating profit 2,560 3,630 3,137 3,115 2,679 2,653 983
Net financial items -126 -104 -23 -246 -152 -10 -86
Profit before taxes 2,434 3,527 3,115 2,869 2,527 2,643 897
Income taxes -537 -948 -782 -578 -662 -706 -219
Profit/loss for the 1,770 2,579 2,333 2,291 1,865 1,937 678
period from continuing
operations
Profit/loss for the 1,770 2,579 2,333 2,291 1,865 1,937 678
period
Earnings per share, EUR 0.15 0.22 0.20 0.19 0.16 0.16 0.06
Earnings per share, EUR, 0.15 0.22 0.20 0.19 0.16 0.16 0.06
diluted
Average number of
shares, undiluted,
1,000 shares 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
Average number of 433 432 416 408 402 397 408
personnel
COMMITMENTS AND CONTINGENCIES
EUR thousand 30.9.2011 30.9.2010 31.12.2010
On own behalf
Mortgages 2,783 2,783 2,783
Corporate mortgages 12,500 12,500 12,500
Lease liabilities
- in next 12 months 784 253 886
- in next 1-5 years 2,347 1,416 2,770
Other commitments 24 154 10
DERIVATIVE FINANCIAL INSTRUMENTS
Nominal values 30.9.2011 30.9.2010 31.12.2010
EUR thousand
Interest rate derivatives
Interest rate swaps 10,000 10,000 10,000
CONSOLIDATED KEY FIGURES
EUR thousand 1.1.-30.9. 1.1.-30.9. Change % 31.12.
2011 2010 2010
Net sales 65,378 53,534 22.1 72,872
Operating profit 9,328 6,315 47.7 9,430
% of net sales 14.3 11.8 12.9
Profit before tax 9,075 6,067 49.6 8,936
% of net sales 13.9 11.3 12.3
Profit for the period 6,682 4,480 49.2 6,772
% of net sales 10.2 8.4 9.3
Shareholders´ equity 32,544 29,347 10.9 32,507
Interest-bearing liabilities 8,759 13,457 -34.9 10,219
Cash and cash equivalents 8,555 10,399 -17.7 11,606
Net interest-bearing liabilities 203 3,058 -93.4 -1,387
Capital employed 41,302 42,804 -3.5 42,725
Return on equity, % 27.4 21.8 23.3
Return on capital employed, % 29.8 20.1 21.8
Equity ratio, % 56.5 50.0 57.4
Net gearing, % 0.6 10.4 -4.3
Capital expenditure 2,123 919 131.0 1,570
% of net sales 3.2 1.7 2.2
Research and development costs 1,188 962 23.5 1.312
% of net sales 1.8 1.8 1.8
Order stock 14,727 13,568 8.5 13,316
Earnings per share, EUR 0.56 0.38 49.2 0.57
Earnings per share, EUR, diluted 0.56 0.38 49.2 0.57
Equity per share, EUR 2.74 2.47 10.9 2.73
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 427 402 6.2 404
PRESS CONFERENCE
Exel Composites will host an analyst and press conference to present the
interim report today Wednesday 26 October 2011 at 12.30 pm in the Espa 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.
Vantaa, 26 October 2011
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
DASDAQ OMX Helsinki Ltd.
Main news media
www.exelcomposites.com
EXEL COMPOSITES IN BRIEF
Exel Composites 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.
© 2024 Nasdaq, Inc. All Rights Reserved |