Review by the President & CEO

President and CEO Riku Kytömäki

 

“Strong growth in the first quarter”

January – March Business Review 2019

 

The first quarter of 2019 started strongly with a significant increase in both order intake and revenue. Also adjusted operating profit increased compared to the same period last year.

Growth was strong in the Construction & Infrastructure customer segment, driven by wind energy industry. Organic growth was 8.3%, while Diversified Structural Composites, DSC, (acquired in April 2018), increased Group revenue by 17.6%. Growth in Construction & Infrastructure as well as Other Applications customer segments compensated for the decrease in Industrial Applications, where market conditions in the telecommunications industry continue to be challenging. From regional perspective, the wind energy industry and the consolidation of DSC contributed to the revenue increase in the Rest of the World as well as in the Asia-Pacific regions. In Europe, revenue was approximately at last year’s level.

Adjusted operating profit for the first quarter of 2019 increased compared to last year. The improvement was driven by increased business volumes, but it also reflected improved operational efficiency achieved through the ongoing cost savings program. The annual savings target of the program is EUR 3 million, expected to be fully effective in 2020. During the first quarter of 2019, we initiated the process to close production in Germany, which was completed as planned at the end of April. A related one-time cost of EUR 1.2 million was recorded in the first quarter of 2019. In North America, the cost savings at DSC progressed as planned. DSC’s operating profit in the first quarter was negative, but the target is for DSC to reach breakeven during the year.

Going forward, we continue to focus both on improving profitability and on growth, leveraging on the Group’s improved global position.

 

Updated 3 May 2019

 

Video interviews

 

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