EXEL COMPOSITES PLC STOCK EXCHANGE RELEASE 31 OCTOBER 2024 at
9:00 EET
This release is a summary of Exel Composites' Business Review Q1-Q3 2024. The
complete report is attached to this release as a pdf file. It is also available
on the company's website at exelcomposites.com.
Q3 2024 in brief
· Order intake decreased by 7.8% to EUR 21.0 million (Q3 2023: 22.8)
· Revenue increased by 19.7% to EUR 24.6 million (20.5)
· Operating profit increased to EUR 0.6 million (-0.7) and operating profit
margin to 2.5% (-3.2%)
· Adjusted operating profit increased to EUR 0.7 million (-1.2) and adjusted
operating profit margin to 2.9% (-5.9%)
· Earnings per share was EUR -0.02 (-0.05)
Q1-Q3 2024 in brief
· Order intake increased by 2.0% to EUR 76.1 million (Q1-Q3 2023: 74.6)
· Revenue decreased by 0.3% to EUR 74.5 million (74.7)
· Operating profit increased to EUR 1.2 million (-1.2) and operating profit
margin to 1.6% (-1.6%)
· Adjusted operating profit increased to EUR 1.5 million (-1.1) and adjusted
operating profit margin to 2.0% (-1.5%)
· Earnings per share was EUR -0.03 (-0.30)
Guidance for the full year 2024 (unchanged)
Exel Composites expects revenue to increase and adjusted operating profit to
increase significantly in 2024 compared to 2023. (Guidance published on 16
February 2024.)
Paul Sohlberg, President and CEO:
Exel Composites had another good quarter in July-September 2024. Our revenue and
profitability in the third quarter increased significantly year-on-year. In
January-September, our order intake increased, and our order backlog was
strengthened.
The implementation of our transformative strategy to capture profitable growth
advanced well. We focused on larger customers, high-growth customer industries
and volume business, all of which position us well for the future. The
commissioning of our new factory in India is progressing as per our plans. Once
completed, the factory will allow us to better serve wind power customers in
India and globally. The facility will be ready for production in the last
quarter of 2024.
In September, we completed the strategic review at our Oudenaarde factory in
Belgium and entered into consultation with employee representatives regarding
the intention to discontinue production at the factory. Unfortunately, launching
the process was the necessary action to address loss-making activities. So far,
several negotiations have been conducted in a good spirit and we believe that
the good cooperation will continue throughout the process.
Order intake increased in Q1-Q3, despite the economic uncertainty
Our order intake increased in January-September 2024, amounting to EUR 76.1
million for the period. As a result, the order backlog at the end of September
stood at EUR 30.6 million, which is 7.3% higher than in the same period last
year. The order intake in the third quarter, however, fell short of the
comparison period and of the first and second quarters of 2024.
In terms of order intake, the third quarter is often seasonally the weakest
quarter of the year. Uncertainty about the global economic outlook continued in
the third quarter and the macroeconomic sentiment remained indecisive. The year
2023 was very difficult for the pultrusion industry in general. Compared to
this, our customer activity has increased in all our strategic customer
industries except in the construction market.
Significant agreements with two major wind turbine OEMs
All in all, we performed well despite the uncertain operating environment and
achieved customer engagements that are important for our future growth.
In September, we announced one of the highlights of the quarter as Exel
Composites and its joint venture Kineco-Exel India won the bidding process in
India for supplying carbon planks for wind turbine spar caps for Vestas Wind
Systems A/S globally. The products, once tested and approved for production,
will be manufactured in our new factory in India. Deliveries are estimated to
begin in the last quarter of 2025. The step deepens our collaboration with
Vestas, which started over a decade ago. This is already the second spar cap
customer engagement for the new India factory this year, as we announced a multi
-year agreement with another major wind turbine manufacturer in the first
quarter.
After the review period, we signed a multi-year supply agreement for helihoist
systems for offshore wind turbines with a major Western wind turbine
manufacturer. The composite components will be manufactured with pultrusion at
Exel's Nanjing factory in China, followed by necessary post-processing and
assembly work. Deliveries are expected to begin in 2025.
Revenue increased in most customer industries
Revenue for the third quarter grew by 19.7% year-on-year coming in at EUR 24.6
million and was at EUR 74.5 million for January-September 2024 (Q1-Q3 2023:
74.7).
In the third quarter, revenue increased from the comparison period in 2023 in
all of our customer industries, apart from the Energy customer industry, where
we expect deliveries from our new Indian factory to pick up in 2025.
Engineered Solutions Business Unit reported EUR 20.0 million in revenue in the
third quarter, while Industrial Solutions Business Unit reported EUR 4.6
million. I am pleased that Industrial Solutions achieved growth in the third
quarter and two new significant wind power customer engagements in line with our
strategy. Engineered Solutions, on the other hand, is progressing well in
optimizing our factory network and securing new customers.
We have spent a considerable amount of time identifying future needs of our
customers. As a result, one of the key targets of our transformative strategy is
to increase customer value by offering post-processing services, engineering
support and productization, among others. I am pleased to report on progress
towards this goal also in the third quarter. For example, in the Transportation
customer industry, we won additional volumes by starting to provide post
-processing services such as painting services for profiles used in transport
equipment, and the work continues.
Operating profit continued to improve
While revenue in January-September 2024 was at the previous year's level, our
profitability during the same period improved due to determined adjustment
measures taken during the year.
In the third quarter 2024, the actions to optimize capacity, cost control and
operational measures elevated our adjusted operating profit margin to 2.9% (
-5.9%) and our adjusted operating profit to EUR 0.7 million (-1.2).
We expect profitability to further improve over time with higher utilization
rates, which we aim to achieve by ramping up new customer products and further
optimizing and consolidating production.
Our net cash flow from operating activities has been impacted by increases in
working capital, higher interest rates and other financing costs, coming in at
EUR -1.3 million (3.7) for January-September 2024.
We reiterate our guidance published in February 2024: Exel Composites expects
revenue to increase and adjusted operating profit to increase significantly in
2024 compared to 2023.
Sincerely,
Paul Sohlberg
Consolidated key figures
Q3 Q3 Change Q1-Q3 Q1-Q3 Change Q1-Q4
EUR thousand 2024 2023 % 2024 2023 % 2023
Revenue 24,585 20,538 19.7 74,539 74,741 -0.3 96,815
Operating profit 620 -655 194.6 1,224 -1,187 203.1 -4,863
% of revenue 2.5 -3.2 1.6 -1.6 -5.0
Adjusted 707 -1,206 158.6 1,526 -1,136 234.4 -2,446
operating profit
1)
% of revenue 2.9 -5.9 2.0 -1.5 -2.5
EBITDA 2,189 1,055 107.4 5,699 4,009 42.2 3,832
Adjusted EBITDA 2,276 504 351.7 6,001 4,060 47.8 4,059
1)
Profit before -1,769 -421 -319.9 -1,541 -2,593 40.6 -8,254
tax
Profit for the -1,824 -639 -185.3 -1,850 -3,712 50.2 -9,309
period
Profit for the -1,730 -581 -197.7 -1,600 -3,564 55.1 -9,130
period excluding
non-controlling
interest
% of revenue -7.0 -2.8 -2.1 -4.8 -9.4
Shareholders' 36,726 23,578 55.8 36,726 23,578 55.8 17,687
equity
Interest-bearing 31,266 50,475 -38.1 31,266 50,475 -38.1 43,790
liabilities
Cash and cash 10,697 17,823 -40.0 10,697 17,823 -40.0 10,952
equivalents
Net interest 20,569 32,652 -37.0 20,569 32,652 -37.0 32,838
-bearing
liabilities
Net debt to 3.4 4.8 -29.2 3.4 4.8 -29.2 8.1
adjusted EBITDA
2)
Capital employed 67,991 74,053 -8.2 67,991 74,053 -8.2 61,477
Return on -19.7 -10.7 -84.3 -9.1 -18.3 50.6 -38.7
equity, %
Return on 3.7 -3.3 210.3 2.9 -1.9 247.4 -6.8
capital
employed, %
Equity ratio, % 39.7 23.3 70.6 39.7 23.3 70.6 20.9
Net gearing, % 56.0 138.5 -59.6 56.0 138.5 -59.6 185.7
Net cash flow -2,308 1,172 -297.0 -1,314 3,692 -135.6 4,445
from operating
activities
Net cash flow -701 -614 14.3 -1,557 -2,211 -29.6 -3,076
from investing
activities
Capital 801 633 26.6 1,616 2,708 -40.3 3,523
expenditure
% of revenue 3.3 3.1 2.2 3.6 3.6
Research and 821 813 1.0 2,817 2,745 2.6 3,711
development
costs
% of revenue 3.3 4.0 3.8 3.7 3.8
Order intake 21,043 22,834 -7.8 76,061 74,559 2.0 98,142
Order backlog 30,557 28,474 7.3 30,557 28,474 7.3 29,765
Earnings per -0.02 -0.05 66.9 -0.03 -0.30 89.3 -0.77
share, diluted
and
undiluted, EUR
Equity per 0.34 1.96 -82.72 0.73 1.96 -62.84 1.47
share, EUR
Average share 0.34 3.47 -90.1 0.47 4.03 -88.3 3.60
price, EUR
Average number 106,470 11,854 798.2 49,507 11,854 317.6 11,854
of shares,
diluted and
undiluted, 1,000
shares 3)
Employees, 616 642 -3.9 620 679 -8.7 667
average
Employees, end 616 639 -3.6 616 639 -3.6 623
of period
1) Excluding material items affecting comparability, such as restructuring
costs, impairment losses and reversals, and costs related to planned or realized
business acquisitions or disposals
2) Last 12 months' adjusted EBITDA
3) As a result of Exel's rights issue completed in June 2024, the total number
of shares in the company increased by 94,831,552 from 11,896,843 to
106,728,395.
Revenue by business unit
Q1 Q2 Q3 Q1-Q3
EUR thousand 2024 2024 2024 2024
Engineered Solutions BU 19,119 22,359 20,008 61,487
Industrial Solutions BU 4,246 4,228 4,567 13,041
Other 0 2 10 12
Total 23,365 26,589 24,585 74,539
Revenue by customer industry
Q3 Q3 Change Q1-Q3 Q1-Q3 Change Q1-Q4
EUR thousand 2024 2023 % 2024 2023 % 2023
Buildings and 5,715 4,283 33.4 16,171 14,934 8.3 18,539
infrastructure
Industrial 3,779 3,025 24.9 11,404 11,862 -3.9 15,358
Energy 4,931 5,242 -5.9 14,812 17,033 -13.0 22,108
Transportation 3,956 3,266 21.1 12,970 11,650 11.3 16,268
Other 6,204 4,723 31.4 19,182 19,262 -0.4 24,541
Total 24,585 20,539 19.7 74,539 74,741 -0.3 96,815
Vantaa, 31 October 2024
Exel Composites Plc
Board of Directors
Financial results briefing
Exel Composites will hold a financial results briefing regarding the Business
Review Q1-Q3 2024 today at 12:30 EET. To participate in the online event, please
register in advance by sending an email to investor@exelcomposites.com.
For further information, please contact:
Mikko Rummukainen, CFO
tel. +358 20 754 1335
Lilli Riikonen, Head of Investor Relations
investor@exelcomposites.com
tel. +358 50 351 1128
Exel Composites in brief
Exel Composites is one of the largest manufacturers of composite profiles and
tubes made with pultrusion and pullwinding technologies and a pultrusion
technology forerunner in the global composite market. Our forward-thinking
composite solutions made with continuous manufacturing technologies serve
customers in a wide range of industries around the world. You can find our
products used in applications in diverse industrial sectors such as wind power,
transportation and building and infrastructure.
Our R&D expertise, collaborative approach and global footprint set us apart from
our competition. Our composite solutions help customers save resources, reduce
products' weight, improve performance and energy efficiency, and decrease total
lifetime costs. We want to be the first choice for sustainable composite
solutions globally.
Headquartered in Finland, Exel Composites employs over 600 forward-thinking
professionals around the world and is listed on Nasdaq Helsinki. To find out
more about our offering and company please visit visit www.exelcomposites.com.
Exel Composites Plc