Exel Composites Oyj - Interim report (Q1 and Q3)

Exel Composites Plc’s Business Review for January 1 – March 31, 2016: Profitability impacted by low volumes in the first quarter; updated outlook for full year 2016

EXEL COMPOSITES PLC       STOCK EXCHANGE RELEASE  11 MAY 2016 at 9.00 A.M. EET

Exel Composites Plc’s Business Review for January 1 – March 31, 2016:
Profitability impacted by low volumes in the first quarter; updated outlook for
full year 2016 

Q1 2016 in brief

-- Order intake for the first quarter decreased by 20.8% to 18.0 (22.8) MEUR.
-- Revenue for the first quarter decreased by 16.6% to 17.9 (21.5) MEUR.
-- Operating profit amounted to 0.1 (2.0) MEUR, which is 0.8% (9.3) of revenue.
-- Net cash flow from operating activities was negative at -0.9 (+0.7) MEUR.
-- Earnings per share were 0.0 (0.13) EUR.

Outlook for full year 2016 (change in brackets)

The Company continues to implement its new strategy with focus on operational
efficiency and optimizing the global manufacturing footprint. The Company
estimates that operating profit excluding any non-recurring items will decrease
(previously: increase) in 2016 compared to 2015. 

President and CEO Riku Kytömäki:

During the first quarter of 2016 the market environment has been challenging.
Some of our key clients have lost market shares, which has led to lower order
volumes to Exel Composites and a decline in revenue. Last year our operating
costs increased mainly due to the additional resources required to implement
the long-term growth strategy. Despite the cost take out measures initiated in
the latter part 2015, our cost structure in Q1 was not in line with the lower
than expected business volume. Hence, the operating profit of the first quarter
was low. 

We have launched new saving programs to further drive down operating costs.
Currently these measures are targeted particularly at our units in Australia
and Finland. In Australia we are significantly downsizing our operations due to
continued low market demand. Our operations in Finland have been impacted by
decreased order volumes of some key customers in our main market Europe. To
mitigate the impact of declined revenues we have targeted resources and efforts
first of all to new customer acquisition. Furthermore, we are also putting
increasing focus on improving operational efficiency and optimizing capacity
utilization. 

Market outlook in the short term continues to be challenging. New customer
acquisition in composite business is especially challenging when metal and oil
prices are at a historically low level. We expect, however, that megatrends,
such us urbanization and energy efficiency, continue to prevail and drive
growth. These attractive long-term market fundamentals and our expertise in
composites together with actions in line with our strategy keep us well
positioned for profitable long-term growth. 

Consolidated key figures

Thousands of euro                    1.1.–31.3.  1.1.–31.3.  Change,  1.1.–31.12
                                           2016        2015        %           .
                                                                            2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                                                                
Order intake                             18,032      22,762    -20.8      83,374
Order backlog 1)                         15,382      13,816     11.3      15,348
Revenue 2)                               17,919      21,495    -16.6      80,196
Operating profit                            146       1,991    -92.7       4,414
% of revenue                                0.8         9.3                  5.5
Profit for the period                        -2       1,557   -100.1       2,844
Net cash flow from operating               -862         688   -225.3       3,385
 activities                                                                     
Return on capital employed, %               1.5        21.8                 12.0
Net gearing, %                             15.8        -8.3                  2.0
                                                                                
Earnings per share, EUR                    0.00        0.13                 0.24
Equity per share, EUR                      2.32        2.54     -8.7        2.58
                                                                                
1) As per 31 March, 2016.                                                       
2) Revenue by customer industries: Industrial 9.6 (13.8) MEUR, Construction     
 & infrastructure 4.1 (4.6) MEUR, Other applications 4.2 (3.1) MEUR.        

Financial results briefing

Exel Composites will hold a financial results briefing regarding the business
review on Wednesday 11 May 2016 at 12.30 p.m. at Hotel Klaus K’s Wintti meeting
room at the address Bulevardi 2-4, Helsinki, Finland (direct entrance is also
available from Erottajankatu 4C). 

Vantaa, 11 May 2016

Exel Composites Plc
Riku Kytömäki, President and CEO



For further information, please contact:

Riku Kytömäki, President and CEO
tel. +358 50 511 8288
riku.kytomaki@exelcomposites.com

Mikko Kettunen, CFO
tel. +358 50 347 7462
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 in
Nasdaq Helsinki Ltd.