CEO BLOG: A strong start to 2017

23.5.2017 15:35 EET



I’m pleased to report that Exel Composites has seen a strong start to the year, following challenging business conditions throughout 2016. Our first quarter results show clear improvement over the same period of last year and we have made further progress in the implementation of our growth strategy.

For the first quarter of 2017 all key performance indicators were all above those of the 2016 first quarter. Order intake increased by 24.7% to €22.5 million and revenue was up 13.3% to €20.3 million. We saw a significant improvement in operating profit at €1.7 million reflecting these higher revenues, a lower cost base and increased production efficiency.

The Industrial Applications segment, which encompasses the telecommunications, paper, electrical, machine and transportation markets, contributed the most to revenue growth during the quarter, evidence of an increased focus on new customer acquisition which is clearly gaining momentum. Revenue from the Construction & Infrastructure and Other Applications segments remained steady. A general market recovery is contributing to higher order intake, and recent increases in oil and metal prices are expected to result in a gradual improvement in demand for composites.

Business in the Asia Pacific region, and China in particular, also picked up during the first quarter.

Growth in China

Accelerating growth in China is one pillar of Exel’s growth strategy and last month we realized a significant milestone in this with the acquisition of Chinese company Nanjing Jianhui Composite Material.

I am very excited about this acquisition. With Nanjing Jianhui we strengthen our position in China and improve our export capacity to other growth markets. Exel’s existing Chinese production facility is also located in Nanjing, which gives us the opportunity to realize operational synergies in the Asia Pacific region.

Nanjing Jianhui uses mainly pultrusion technology to produce composite products that are largely complementary to Exel’s existing offering. The company has been growing steadily and profitably, has a reputation for quality and reliability, and manages a balanced portfolio of local Chinese customers and exports outside of China. In addition to increasing our manufacturing capacity and strengthening our local sales and product development network, the acquisition expands Exel’s local customer portfolio and our offering for different applications.

We will now ensure the smooth integration of the business into the Exel Group and we welcome Nanjing Jianhui's 90 employees to the Exel team.

Opportunities ahead

I am confident about the opportunities ahead for Exel. Global megatrends such as urbanization, demographic change, sustainability and total life cycle cost management are driving increased demand for lighter weight, more robust and energy efficient solutions. This favours the adoption of composite materials and presents long-term business opportunities in all Exel’s customer industries and market sectors.

In 2017 we will continue on our path towards becoming an agile, innovative global composite company with world-class operations, progressing the areas outlined in our strategy, generating new growth and leveraging our strengths fully.

I look forward to sharing further progress with you throughout the year.

Riku Kytömäki, President and CEO

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