2011-05-05 08:00:00 CEST
2011-05-05 08:00:04 CEST
REGULATED INFORMATION
Exel Composites Oyj - Interim report (Q1 and Q3)
Exel Composites Plc's interim report for January 1 - March 31, 2011
EXEL COMPOSITES PLC STOCK EXCHANGE RELEASE 5.5.2011 at 9.00 1
(12)
EXEL COMPOSITES PLC'S INTERIM REPORT FOR JANUARY 1 - MARCH 31, 2011
January-March 2011 highlights
- Net sales increased to EUR 21.5 (15.7) million in the first quarter of 2011,
up by 37.5 per cent on the weak first quarter of the previous year
- Operating profit was EUR +3.1 million in the first quarter of 2011 compared
to EUR 1.0 million in the first quarter of 2010, or 14.6 (6.3) per cent of net
sales
- Net operative cash flow was positive at EUR +1.6 (+0.8) million
- Fully diluted earnings per share were EUR 0.20 (0.06)
Outlook for 2011
Demand in the pultrusion industry has improved gradually. We believe that Exel
Composites is well positioned to take advantage of the growth opportunities as
the markets recover. 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 start of 2011, but maintains its
cautious stance for the full year 2011, since market uncertainties persist.
Vesa Korpimies, President and CEO:
“We experienced strong growth in the first quarter of 2011 compared to the weak
first quarter of 2010. The Group's net sales for the first quarter of 2011
increased by 37.5 per cent to EUR 21.5 (15.7) million compared to the
corresponding period in 2010. Market demand was strong especially in the
machine industry, the paper industries and the telecommunication market
segment. There were also some signs of recovering demand in the building and
construction industry which suffered from poor demand during the whole last
year.
The operating profit also increased in the first quarter of 2011 to EUR 3.1
(1.0) million. The measures taken in the Chinese and British units to improve
efficiency initiated in the last quarter of 2010 started to show positive
results. The turnaround projects will continue throughout 2011. However, raw
material costs have continued to increase. Exel Composites has taken action to
mitigate the effects and will continue to do so.
Return on capital employed improved to 29.1 per cent compared to 9.8 per cent
in the corresponding period last year.
We are well-positioned to capitalize on growth opportunities on the gradually
recovering markets and we will continue our strategy of profitable growth in
2011.”
CONSOLIDATED KEY FIGURES, EUR million
(unaudited)
1.1. - 1.1.-31.3. Change % 1.1. -
31.3. 2010 31.12.
2011 2010
Net sales 21.5 15.7 37.5 72.9
Operating profit 3.1 1.0 219.1 9.4
% of net sales 14.6 6.3 12.9
Profit for the period 2.3 0.7 244.1 6.8
Shareholders' equity 34.0 24.6 38.4 32.5
Net interest-bearing liabilities -2.4 5.6 -143.7 -1.4
Capital employed 44.2 41.3 7.0 42.7
Return on equity, % 28.1 10.8 23.3
Return on capital employed, % 29.1 9.8 21.8
Equity ratio, % 57.0 42.9 57.4
Net gearing, % -7.2 22.8 -4.3
Earnings per share, EUR 0.20 0.06 0.57
Earnings per share, diluted, EUR 0.20 0.06 0.57
Equity per share, EUR 2.86 2.07 2.73
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.
1 JANUARY - 31 MARCH 2011
FINANCIAL PERFORMANCE
The Group's net sales for the first quarter of 2011 increased by 37.5 per cent
to EUR 21.5 (15.7) million compared to the corresponding period in 2010. Since
the weak outset of 2010 market conditions have improved gradually. In the first
quarter of 2011 demand increased especially in the machine industry, the paper
industries and the telecommunication market segment. There were some signals of
recovering demand also in the building and construction industry which suffered
from poor demand during the whole last year.
Raw material costs have continued to increase. Exel Composites has taken action
to mitigate the effects; part of the increase has been transferred into product
prices.
The European Commission's anti-dumping tariff on imported Chinese glass fiber
was lowered from the original 43.6 per cent to 13.8 per cent in mid-March 2011
in addition to the base tariff of 7 per cent. 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
tariff. In 2010 other operating expenses included one-off restructuring costs
of Floorball business amounting to EUR 1.0 million. Other operating income
included one-off licensing income of EUR 0.9 million. During the first quarter
of 2011 no one-off items were recorded.
Exel Composites' operating profit for the first quarter of 2011 was EUR 3.1
(1.0) million or 14.6 (6.3) per cent of net sales. The measures taken in the
Chinese and British units to improve efficiency initiated in the last quarter
of 2010 started to show positive results. The turnaround projects will continue
throughout 2011.
The Group's net financial expenses in the first quarter of 2011 were EUR 0.0
(0.1) million. The Group's profit before taxes was EUR 3.1 (0.9) million and
profit after taxes EUR 2.3 (0.7) million.
Earnings per share improved to EUR 0.20 (0.06). Return on capital employed was
29.1 (20.9) per cent.
BALANCE SHEET AND FINANCIAL POSITION
Cash flow from business operations was positive at EUR 1.6 (0.8) million. Cash
flow before financing, but after capital expenditure, amounted to EUR 1.1 (0.5)
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 12.7
(11.2) million.
The Group's consolidated total assets at the end of the review period were EUR
59.8 (57.3) million.
Net interest-bearing liabilities amounted to EUR -2.4 (5.6) million, and the
net gearing ratio improved to -7.2 (22.8) per cent.
Equity at the end of the period under review was EUR 34.0 (24.6) million and
equity ratio 57.0 (42.9) per cent. Interest-bearing liabilities amounted to EUR
10.2 (16.8) million, of which short-term liabilities accounted for EUR 0.0
(7.7) million.
CAPITAL EXPENDITURE AND DEPRECIATION
The capital expenditure on fixed assets amounted to EUR 0.6 (0.3) 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 2011 was 418 (403),
of whom 196 (177) worked in Finland and 222 (226) in other countries. The
average number of personnel during the financial year was 416 (408).
SHARES AND SHARE CAPITAL
At the end of March 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 31 March 2011, the market capitalization totaled
EUR 110.4 (70.4) million. During the reporting period 343,137 (765,035) shares
were traded, accounting for 2.9 (6.4) per cent of the average number of shares
outstanding.
The highest share quotation was EUR 9.30 (6.20) and the lowest EUR 6.85 (5.19).
The share price closed at EUR 9.28 (5.92). The average share price during the
review period was EUR 7.90 (5.82).
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 2,522 shareholders on 31 March 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 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 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 to
increase and put pressure on profitability. The European Commission's
anti-dumping tariffs imposed on Chinese glass fiber will have a negative effect
on the profitability in case the rising costs of glass fiber can only be
transferred partially to product prices. In case 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 loss.
ANNUAL GENERAL MEETING
The Annual General Meeting of Exel Composites Plc was held on 6 April 2011. 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 2010. 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 2010.
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. The following members of the Board of Directors were
re-elected: Peter Hofvenstam, Göran Jönsson, Reima Kerttula and Heikki
Mairinoja. Heikki Hiltunen was elected as a new member of the Board of
Directors. 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.
OUTLOOK FOR 2011
Demand in the pultrusion industry has improved gradually. We believe that Exel
Composites is well positioned to take advantage of the growth opportunities as
the markets recover. 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 start of 2011, but maintains its
cautious stance for the full year 2011, since market uncertainties persist.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
(unaudited)
EUR thousand 1.1. - 1.1.- 31.3. Change, 1.1. -
31.3. 2010 % 31.12.
2011 2010
Net sales 21,548 15,671 37.5 72,872
Materials and services -8,378 -6,062 -38.2 -28,403
Employee benefit expenses -5,221 -4,381 -19.2 -18,833
Depreciati-on and impairment -684 -675 -1.3 -2,880
Other operating expenses -4,262 -4,824 11.7 -16,808
Other operating income 135 1,255 -89.2 3,481
Operating profit 3,137 983 219.1 9,430
Net financial items -23 -86 73.3 -493
Profit before tax 3,115 897 247.3 8,936
Income taxes -782 -219 -257.1 -2,165
Profit/loss for the period 2,333 678 244.1 6,772
Other comprehensive income:
Exchange differences on translating -867 1,295 -166.9 3,411
foreign operations
Other comprehensive income, net of -867 1,295 -166.9 3,411
tax
Total comprehensive income 1,466 1,972 -25.7 10,183
Profit/loss attributable to:
Equity holders of the parent 2,333 678 6,772
company
Comprehensive income
attributable to:
Equity holders of the parent 1,466 1,972 10,183
company
Earnings per share, diluted and 0.20 0.06
undiluted, EUR
CONDENSED CONSOLIDATED BALANCE SHEET
EUR thousand 31.3. 31.3. Change 31.12.
2011 2010 2010
ASSETS
Non-current assets
Goodwill 11,231 10,624 607 11,637
Other intangible assets 2,203 2,488 -285 2,426
Tangible assets 10,248 10,878 -630 10,427
Deferred tax assets 1,661 1,873 -212 1,585
Other non-current assets 63 63 0 64
Non-current assets total 25,406 25,926 -520 26,139
Current assets
Inventories 9,480 9,191 289 9,600
Trade and other receivables 12,258 11,001 1,257 9,540
Cash at bank and in hand 12,662 11,161 1,501 11,606
Current assets total 34,400 31,353 3,047 30,746
Total assets 59,805 57,279 2,526 56,885
EQUITY AND LIABILITIES
Shareholders´ equity 2,141 2,141 0 2,141
Share capital 0 0 0 0
Other reserves 30 37 -7 37
Invested unrestricted equity fund 8,488 8,488 0 8,488
Translation differences 2,488 1,195 1,293 3,311
Retained earnings 18,536 12,039 6,497 11,757
Profit for the period 2,333 678 1,655 6,772
Total equity attributable to equity holders of 34,017 24,578 9,438 32,507
the parent company
Total equity 34,017 24,578 9,438 32,507
Non-current liabilities
Interest-bearing liabilities 10,206 9,025 1,181 10,204
Interest-free liabilities 364 317 47 362
Deferred tax liabilities 542 680 -138 549
Current liabilities
Interest-bearing liabilities 10 7,731 -7,721 15
Trade and other non-current liabilities 14,667 14,948 -281 13,250
Total liabilities 25,788 32,701 -6,913 24,378
Total equity and liabilities 59,805 57,279 2,526 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
Comprehen-siv 0 0 0 1,295 678 1,973
e result
Dividend 0 0 0 0 -2,974 -2,974
Balance at 31 2,141 37 8,488 1,195 12,717 24,579
March 2010
Balance at 2,141 37 8,488 3,311 18,529 32,507
1st January
2011
Comprehen-siv 0 0 0 -867 2,333 1,466
e result
Other items 0 -7 0 0 52 44
Dividend 0 0 0 0 0 0
Balance at 31 2,141 30 8,488 2,444 20,914 34,017
March 2011
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
EUR thousand 1.1. - 31.3. 1.1. - 31.3. Change 31.12.
2011 2010 2010
Cash Flow from Operating Activities
Profit for the period 2,333 678 1,665 6,772
Adjustments 1,222 1,667 -445 6,276
Change in working capital -1,605 -522 -1,083 1,729
Cash Flow Generated by Operations 1,950 1,823 127 14,777
Interest paid -50 -93 43 -515
Interest received 27 69 -42 114
Other financial items 41 64 -23 -88
Income taxes paid -337 -1,047 710 -2,296
Net Cash Flow from Operating 1,631 816 815 11,992
Activities
Cash Flow from Investing Activities
Acquisitions 0 0 0 0
Disposal of business 0 0 0
Capital expenditure -573 -348 -225 -1,570
Proceeds from sale of fixed assets 0 0 0 0
Cash Flow from Investing Activities -573 -348 -225 -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 0 -1,800 1,800 -6,857
Change in short-term loans 0 0 0 -106
Instalments of finance lease -2 -104 102 -1,477
liabilities
Dividends paid 0 0 0 -2,974
Net Cash Flow from Financing -2 -1,904 1,902 -11,414
Change in Liquid Funds 1,056 -1,436 2,492 -992
Liquid funds in the beginning of 11,606 12,597 -991 12,597
period
Change in liquid funds 1,056 -1,436 2,492 -992
Liquid funds at the end of period 12,662 11,161 1,501 11,606
QUARTERLY KEY FIGURES
EUR thousand I/ IV/ III/ II/ 1/
2011 2010 2010 2010 2010
Net sales 21,548 19,338 18,692 19,173 15,671
Materials and services -8,378 -7,700 -7,451 -7,189 -6,062
Employee benefit expenses -5,221 -4,982 -4,577 -4,892 -4,381
Depreciation and impairment -684 -719 -724 -763 -675
Operating expenses -4,262 -3,901 -3,856 -4,229 -4,824
Other operating income 135 1,078 595 553 1,255
Operating profit 3,137 3,115 2,679 2,653 983
Net financial items -23 -246 -152 -10 -86
Profit before taxes 3,115 2,869 2,527 2,643 897
Income taxes -782 -578 -662 -706 -219
Profit/loss for the period from 2,333 2,291 1,865 1,937 678
continuing operations
Profit/loss for the period 2,333 2,291 1,865 1,937 678
Earnings per share, EUR 0.20 0.19 0.16 0.16 0.06
Earnings per share, EUR, diluted 0.20 0.19 0.16 0.16 0.06
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 416 408 402 397 408
COMMITMENTS AND CONTINGENCIES
EUR thousand 31.3.2011 31.3.2010 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 1,068 485 886
- in next 1-5 years 2,111 1,394 2,770
Other commitments 6 209 10
DERIVATIVE FINANCIAL INSTRUMENTS
Nominal values 31.3.2011 31.3.2010 31.12.2010
EUR thousand
Foreign exchange derivatives
Forward contracts
Interest rate derivatives
Interest rate swaps 10,000 10,000 10,000
Purchased interest rate options 0 0 0
CONSOLIDATED KEY FIGURES
EUR thousand 1.1. - 31.3. 1.1. - 31.3. Change % 31.12. 2011 2010 2010
Net sales 21,548 15,671 37.5 72,872
Operating profit 3,137 983 219.1 9,430
% of net sales 14.6 6.3 12.9
Profit before tax 3,115 897 247.3 8,936
% of net sales 14.5 5.7 12.3
Profit for the period 2,333 678 244.1 6,772
% of net sales 10.8 4.3 9.3
Shareholders´ equity 34,017 24,578 38.4 32,507
Interest-bearing liabilities 10,216 16,756 -39.0 10,219
Cash and cash equivalents 12,662 11,161 13.4 11,606
Net interest-bearing liabilities -2,446 5,595 -143.7 -1,387
Capital employed 44,232 41,335 7.0 42,725
Return on equity, % 28.1 10.8 23.3
Return on capital employed, % 29.1 9.8 21.8
Equity ratio, % 57.0 42.9 57.4
Net gearing, % -7.2 22.8 -4.3
Capital expenditure 573 348 64.7 1,570
% of net sales 2.7 2.2 2.2
Research and development costs 364 400 -9.0 1.312
% of net sales 1.7 2.6 1.8
Order stock 14,430 10,860 32.9 13,316
Earnings per share, EUR 0.20 0.06 244.3 0.57
Earnings per share, EUR, diluted 0.20 0.06 244.3 0.57
Equity per share, EUR 2.86 2.07 38.2 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 416 408 2.0 404
PRESS CONFERENCE
Exel Composites will host an analyst and press conference to present the
interim report today Thursday 5 May 2011 at 12.30 pm 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.
Vantaa, 5 May 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.
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