President & CEO Riku Kytömäki

 

“Adjusted operating profit continued to increase”

Exel Composites Plc’s Half-Year Financial Report January–June 2018

 

Group revenue increased clearly in the first half of 2018 and consequently adjusted operating profit improved. The revenue growth was strongly supported by the recent acquisitions of Nanjing Jianhui and Diversified Structural Composites, DSC. Their contribution offset the impact of declining volumes in the telecommunications segment compared to the corresponding period last year.

 

Both Nanjing Jianhui and DSC have strong market positions in the high growth segment of wind energy, which comprised over half of the revenue growth in the Construction & Infrastructure customer segment during the review period. Also geographically the acquired businesses contributed to revenue in the region Rest of the World as well as in the Asia-Pacific (APAC) region. Revenue in the region Rest of the World more than doubled due to the DSC acquisition. Despite the significant impact of Nanjing Jianhui, APAC revenue declined. APAC revenue was negatively affected by declined volumes in the telecommunications segment, as well as lower sales in the Australian market, reflecting the closure of production in Australia.

 

The acquisitions of Nanjing Jianhui and DSC have been important milestones as we have continued to execute on our growth strategy. Nanjing Jianhui has exceeded our expectations with strong revenue growth and good profitability. We are also convinced that the acquisition of an operating composites company was the most efficient way for Exel to create a foothold in the strategically important American composites market. DSC is an established business with an existing customer network, a competent team, an operational production facility and interesting technologies. All of this gave us a good starting position and a platform for cross-selling opportunities to existing and new customers. It would have required heavier investments and more time to get to the same point if we had chosen to start from the beginning by building up our own greenfield production facility.

The integration process of DSC is well under way and is progressing according to plan. In May, we appointed Kari Loukola, currently SVP, Sales & Marketing, as SVP, Exel Composites Americas and President of DSC. His presence on site enables us to have full focus on DSC’s profitability turnaround as well as on growth in the Americas. In May, we also communicated the appointment of Olli Tevä to the role as new SVP, Sales & Marketing, which he will take on in August 2018. Thus, our focus on revenue growth remains intact.

 

Updated 24 July 2018

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