President & CEO
Riku Kytömäki

Exel Composites Plc’s January–September Business Review 2017

Adjusted operating profit almost tripled in Q3 2017

 

The strong development in the first half of the year has continued into the third quarter of 2017 and is reflected in significant improvements in both quarterly revenue and adjusted operating profit. With more visibility into the full year, we communicated a revised outlook for 2017 in September. Our focused efforts in growth segments and strengthened position in growth markets such as China have enabled us to deliver double digit revenue growth rates in the nine month period. General market recovery, despite some prevailing uncertainties, has supported the increase in business volumes.

 

All of Exel’s regions performed well during the nine month review period. Europe, Exel’s largest market area, continued to deliver stable growth. The business volumes were driven by industrial investments, which have generally started to pick up in the region. The major contributor to revenue growth was nonetheless the Asia-Pacific (APAC) region. The newly acquired Nanjing Jianhui performed according to our expectations and made a substantial contribution to the third quarter revenue. The integration of the unit, which has been consolidated into the Group accounts since May 2017, continues according to plan.

 

From a customer segment perspective, Industrial Applications continued to drive the revenue increase during the review period. In line with our strategy, our focused activities especially in the mid-segment have broadened our customer base. The new accounts have contributed to increased business volumes in the review period. The demand of the project driven Construction and Infrastructure customer segment has shown modest improvements throughout the nine month period, but paced up particularly in the third quarter of the year.

 

Our adjusted operating profit continued its strong development almost tripling in both the third quarter and in the review period compared to last year. Increased revenue, operational efficiency and continued tight cost control are the major reasons behind the substantial improvement. The APAC region’s contribution to the improved adjusted operating profit is worth highlighting. Nanjing Jianhui, which we acquired during the spring, together with the improved performance of our other Chinese unit in Nanjing composed majority of the positive impact. To this we can add the reduced negative impact from the Australian unit. The process to downsize the business unit in Australia progresses as planned and production is expected to cease by the end of 2017.

 

To sum it up, it has been a very good nine month period. We delivered a significantly improved operating profit due to increased topline, APAC business reorganization, operational efficiency and continued tight cost control.

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