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Exel Composites Plc’s Financial Statements Release 2018: “Strong order intake in Q4”

15.2.2019 09:00 EET

EXEL COMPOSITES PLC   FINANCIAL STATEMENTS RELEASE  15 FEBRUARY 2019 09:00 EET

Q4 2018 in brief

  •  Order intake increased by 35.8% to EUR 29.1 million (Q4 2017: 21.4).
  •  Revenue increased by 19.2% to EUR 26.7 million (22.4).
  •  Adjusted operating profit amounted to EUR 0.8 million (1.3), which is 2.9% of revenue (5.9%).
  •  Net cash flow from operating activities was EUR 0.5 million (2.7).
  •  Earnings per share amounted to EUR -0.14 (0.08).

Q1-Q4 2018 in brief

  •  Order intake increased by 16.4% to EUR 100.8 million (2017: 86.5).
  •  Revenue increased by 12.0% to EUR 96.6 million (86.3).
  •  Adjusted operating profit amounted to EUR 5.0 million (6.3), which is 5.2% of revenue (7.3%).
  •  Net cash flow from operating activities was EUR 0.9 million (4.9).
  •  Earnings per share amounted to EUR 0.03 (0.36).

Dividend proposal

The Board of Directors proposes that a dividend of EUR 0.18 (0.30) per share be paid for the financial year 2018.

Outlook for the full year 2019

Exel Composites expects revenue and adjusted operating profit to increase in 2019 compared to 2018.

President and CEO, Riku Kytömäki

Exel Composites ended 2018 on a strong note. In the fourth quarter both order intake as well as revenue increased significantly. Growth was driven by the Construction & Infrastructure customer segment, predominantly supported by the wind energy industry. This industry now also represents Exel’s largest client, a position which has been held by a client from the telecommunications industry for the past ten years. During 2018 the competitive situation in the telecommunications industry, especially in China, changed significantly, driven by geopolitical factors such as trade barriers and export tariffs. Other Applications customer segment also grew in the fourth quarter, driven by the contribution of the acquired Diversified Structural Composites, DSC. Revenue in the Industrial Applications customer segment was impaired by lower volumes in telecommunications.

From a regional perspective, revenue in the region Rest of the World increased significantly in the fourth quarter supported by the North American DSC and by increased export from other Exel units to the American market. Revenue increased also in the Asia-Pacific region driven by the contribution of Nanjing Jianhui. The revenue decrease in Europe reflected lower volumes in telecommunications. All in all, Exel’s global market position improved significantly during the year 2018.

Adjusted operating profit decreased in the fourth quarter, as volume growth in wind energy was not enough to compensate for the impaired profitability mainly related to sales mix in some of the Group’s manufacturing units. The turnaround and integration of DSC continues according to plan and in the fourth quarter of 2018 the operating profit of DSC improved clearly from the third quarter of 2018.

During 2018 we initiated a cost reduction program to improve Group profitability. The implementation of the program continues as planned with the aim to optimize Exel Composites’ manufacturing footprint in Europe, to improve the profitability and cost efficiency in the DSC business and to drive further synergy savings between the company’s two manufacturing units in China, among other things. Early 2019 we announced the closing of Exel’s manufacturing unit in Voerde, Germany, and conducted co-determination negotiations in Finland, in addition to other cost savings measures. The annual savings target of the Group-wide cost savings program is EUR 3 million, expected to be fully effective in 2020.

I am convinced that we have taken important steps to improve profitability and created a platform for long-term profitable growth. I look forward to 2019 with confidence.

Consolidated key figures

EUR thousand 1.10.-31.12.
2018
1.10.-31.12.
2017
Change,
%
1.1.-31.12.
2018
1.1.-31.12.
2017
Change,
%
Order intake 29,108 21,433 35.8 100,757 86,531 16.4
Order backlog 1) 23,685 17,126 38.3 23,685 17,126 38.3
Revenue 26,711 22,414 19.2 96,608 86,255 12.0
Operating profit -1,194 1,389 -186.0 2,217 6,081 -63.5
% of revenue -4.5 6.2 2.3 7.1
Adjusted operating profit 2) 768 1,327 -42.1 5,018 6,319 -20.6
% of revenue 2.9 5.9 5.2 7.3
Profit for the period -1,606 956 -267.9 386 4,212 -90.8
Net cash flow from operating activities 534 2,708 -80.3 868 4,856 -82.1
Return on capital employed, % -8.3 12.3 4.4 14.8
Net gearing, % 96.3 30.3 96.3 30.3
Earnings per share -0.14 0.08 0.03 0.36
Equity per share, EUR 2.18 2.44 -10.5 2.18 2.43 -10.2
Employees on average 677 562 20.6 647 532 21.7
Employees at end of period 675 568 18.8 675 568 18.8

¹ As per the end of the period.
² Excluding material items affecting comparability, such as restructuring costs, impairment losses and reversals, and costs related to planned or realized business acquisitions or disposals. For more information, please refer to the paragraph “Change in Exel Composites’ financial reporting terminology” of the Half-year Financial Report published on 21 July 2016.

Financial reporting and Annual General Meeting 2019

Exel Composites publishes the following financial reports in 2019:

  • Financial Statements Release 2018: 15 February 2019
  • Business Review January - March: 3 May 2019
  • Half Year Financial Report January - June: 23 July 2019
  • Business Review January - September: 30 October 2019

Annual Financial Report, Corporate Governance Statement and Remuneration Statement for 2018 will be published on 28 February 2019 in electronic format at the company’s website www.exelcomposites.com.

The Annual General Meeting will be held on Thursday 21 March 2019 at 10:00 at Scandic Marina Congress Center at the address of Katajanokanlaituri 6, Helsinki, Finland.

Financial results briefing

Exel Composites will hold a financial results briefing regarding the financial statements on Friday 15 February 2019 at 12:30 EET at Scandic Hotel Simonkenttä’s Roba meeting room (address Simonkatu 9, Helsinki, Finland).

Exel Composites’ Financial Statements Release January – December 2018 is available in full in pdf format as an attachment to this release. The report and the related presentation shall also be available at the company’s website under the Investor section.

Vantaa, 15 February 2019

Exel Composites Plc
Board of Directors

For further information, please contact:
Riku Kytömäki, President and CEO
tel. +358 50 511 8288
riku.kytomaki@exelcomposites.com

Mikko Kettunen, CFO
tel. +358 50 347 7462
mikko.kettunen@exelcomposites.com

Distribution
Nasdaq Helsinki Ltd
Main news media
www.exelcomposites.com

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