President & CEO
Riku Kytömäki

 

“Continued growth in revenue and adjusted operating profit in the first quarter of the year”

Exel Composites Plc’s Business Review January-March 2018

 

Following a very good year 2017, growth continued in revenue and adjusted operating profit in the first quarter of 2018, compared to the corresponding period last year.

 

In Europe, a stable demand for our solutions together with favorable market fundamentals led to continued revenue growth in the first quarter of 2018. In the Asia-Pacific (APAC) region, the Nanjing Jianhui business unit contributed to the region’s revenue. The business unit was purchased in April 2017 and therefore was not included in the first quarter 2017 financial figures. The main contributor to revenue growth in the first quarter of 2018 was the Construction & Infrastructure customer segment. In the previous year’s reference period (first quarter of 2017), large individual mid-segment orders in the APAC region and in the Industrial Applications customer segment impacted revenue.

 

Adjusted operating profit increased in the first quarter of 2018 and the operating margin remained stable, supported by stable profits in Europe and a good contribution from Nanjing Jianhui in the Group. As a result of the closing of production in Australia, we have ramped up the production in China to cater for our Australian customers, and this, together with some other growth related resourcing, impaired profitability in the quarter. It goes without saying that operational efficiency and maintaining a cost structure in line with business volumes and growth remains an important core focus area.

 

On 23 April 2018 Exel Composites announced the acquisition of Diversified Structural Composites, Inc. (“DSC”) in North America. In connection to the announcement, Exel also revised its outlook for the full year 2018. The acquisition is a significant element in the implementation of our growth strategy, with the ambition to create a truly global footprint. We believe that this bolt on acquisition makes a strong strategic fit to our existing business. DSC has the same focus as Exel by addressing high growth segments such as wind energy and transportation, and it has a high level of complementary, advanced technological expertise for example in aviation applications. We expect the combination to improve our competitiveness through synergies and a broadened and attractive offering to our existing and new customers. The transaction was successfully closed at the end of April and the unit is consolidated into Group accounts as of 1 May 2018. Overall, the acquisition makes Exel Composites the only pultrusion company with significant presence on all three major continents. Going forward, we expect this acquisition to significantly improve our global supply position.

Exel Composites Oyj, Vantaa head office, Mäkituvantie 5, FI-01510 Vantaa, Finland