Exel Composites Plc’s Financial Statements Release 2019: “Profitability improved significantly”


Q4 2019 in brief

  • Order intake increased by 8.7% to EUR 31.7 million (Q4 2018: 29.1).
  • Revenue decreased by -0.5% to EUR 26.6 million (26.7).
  • Adjusted operating profit increased to EUR 1.3 million (0.8), which is 4.9% of revenue (2.9).
  • Operating profit increased to EUR 1.1 million (-1.2), which is 4.1% of revenue (-4.5).
  • Net cash flow from operating activities was EUR 3.5 million (0.5).
  • Earnings per share amounted to EUR 0.03 (-0.14).

Q1-Q4 2019 in brief

  • Order intake increased by 9.9% to EUR 110.7 million (Q1-Q4 2018: 100.8).
  • Revenue increased by 7.4% to EUR 103.8 million (96.6).
  • Adjusted operating profit increased to EUR 7.2 million (5.0), which is 6.9% of revenue (5.2).
  • Operating profit increased to EUR 5.1 million (2.2), which is 4.9% of revenue (2.3).
  • Net cash flow from operating activities was EUR 9.0 million (0.9).
  • Earnings per share amounted to 0.20 (0.03).

Dividend proposal

The Board of Directors proposes that a dividend of EUR 0.18 (0.18) per share be paid for the financial year 2019.

Guidance for the full year 2020

Exel Composites expects revenue and adjusted operating profit to increase in 2020 compared to 2019.

Exel Composites has manufacturing in Nanjing, China. The coronavirus outbreak has delayed ramping up production to full capacity after the Chinese New Year. This will impact production volumes in China in the first quarter 2020. Currently, it is too early to estimate the impacts of the outbreak on the company’s business and financial performance.

President and CEO, Riku Kytömäki
2019 was a year of profitable growth for Exel Composites. Alongside with order intake growth, Group revenue continued to increase in 2019. The Construction & Infrastructure customer segment drove revenue growth, strongly supported by wind power. Wind power is a growing market and it has rapidly become Exel’s largest customer industry. Revenue in Other Applications developed well in 2019, driven by growth in defense applications. Exel has long experience in developing defense products such as camouflage support poles. The Industrial Applications customer segment, on the other hand, declined mainly due to lower business volumes in telecommunications.

Despite the order intake growth in the fourth quarter of 2019, revenue in the quarter declined slightly. Revenue growth in wind power, transportation and defense was not quite enough to compensate for the decline in telecommunications and construction and infrastructure. 

Geographically, revenue increased in the region Rest of the World in 2019, supported by increased export from Exel’s units in Europe and China to the North American market. Revenue both in the Asia-Pacific region and in Europe was approximately at last year’s level. In the fourth quarter, revenue growth in Asia-Pacific region was not enough to offset the decline in the North American market, which was negatively impacted by fluctuations in wind power volumes.

Adjusted operating profit improved significantly in 2019, mainly due to profitable growth in wind power and due to the Group’s cost savings program, which was completed in 2019 according to plan. The original target of the program was to achieve a total of EUR 3 million savings in 2020. In 2019 the cost savings program already had an estimated EUR 2 million positive impact on Group profit. The full profit impact of the program in 2020, compared to the 2018 cost structure, will be approximately EUR 3 million. The most important actions implemented under the program were the closure of the production plant in Germany, the cost restructuring in Exel USA as well as operational improvements and synergy savings in China.

Actions to improve profitability of Exel USA progressed, but breakeven was not yet achieved in 2019. Although the implemented structural savings improved profitability, lower volumes compared to the previous year had an opposite impact. The streamlining of the cost structure and organization during 2019, however, gives a good start for Exel USA going forward in 2020.

In 2019, Exel Composites decided to expand its operations by investing in a new manufacturing facility in Austria. The capacity of the old facility has been limiting further growth in Central Europe and the considerable capacity increase will improve Exel’s ability to meet customer needs. The construction of the new facility is expected to be completed by the end of 2020.

Exel is well positioned as a leading player in the composites industry being the only pultrusion company with global presence. Interest towards composite materials is steadily growing, supported by global megatrends such as urbanization, sustainability and total life cycle cost management. For example, increased energy efficiency requirements within the transportation industry and the increased utilization of anti-corrosive materials in the construction industry drive the use of composites. The composites market is expected to grow 2%-5% during 2018-2023, mostly in Asia and North America. Exel’s ambition is to leverage on these trends and offer our customers attractive products fitting that demand.

Consolidated key figures

EUR thousand1.10.-31.12. 20191.10.-31.12. 2018Change, %1.1.-31.12. 20191.1.-31.12. 2018Change, %
Order intake31,65029,1088.7110,693100,7579.9
Order backlog 1)30,39123,68528.330,39123,68528.3
Revenue 26,58526,711-0.5103,78496,6087.4
Operating profit 1,085-1,194190.85,0872,217129.5
% of revenue4.1-4.5 4.92.3 
Adjusted operating profit 2)1,30076869.37,1605,01742.7
% of revenue4.92.9 6.95.2 
Profit for the period364-1,606122.72,397386520.3
Net cash flow from operating activities 3), 4)3,502534556.39,030868940.3
Return on capital employed, %6.9-8.3 8.64.4 
Net gearing, % 3)114.996.3 114.996.3 
Earnings per share0.03-0.14 0.200.03 
Equity per share, EUR2.
Employees on average656677-3.26606471.9
Employees at end of period648675-4.0648675-4.0

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.
3) Exel Composites Plc has applied the IFRS16 -standard since 1.1.2019 according to the model where the comparative information of previous periods is not adjusted. Comparable net gearing ratio, assuming IFRS-16 standard would not have been applied, is estimated to have been 96.7% (96.3).
4) IFRS16 rental payments have been classified to financing activities in the cash flow statement. This impacted net cash flow from operating activities in Q4 with EUR 350 thousand, EUR 651 thousand in H2 and EUR 1,196 thousand in the full year 2019.

Financial reporting and Annual General Meeting 2020

Exel Composites publishes the following financial reports in 2020:

  • Financial Statements Release 2019: 18 February 2020
  • Business Review January-March: 6 May 2020
  • Half-year Financial Report January-June: 21 July 2020
  • Business Review January-September: 30 October 2020

The Annual Financial Report, Corporate Governance Statement and Remuneration Statement for 2019 will be available on 28 February 2020 in electronic format at the company’s website www.exelcomposites.com.

The Annual General Meeting will be held on Friday 20 March 2020 at 10:00 EET at Radisson Blu Royal Hotel at the address Runeberginkatu 2, Helsinki, Finland.

Financial results briefing

Exel Composites will hold a financial results briefing regarding the financial statements on Tuesday 18 February 2020 at 12:30 EET at Nasdaq Helsinki Pörssitalo’s Lehteri meeting room located at Fabianinkatu 14, Helsinki, Finland (registration at Nasdaq’s reception on the second floor).

Exel Composites’ Financial Statements Release January – December 2019 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, 18 February 2020

Exel Composites Plc
Board of Directors


Exel Composites Financial Statements Release 2019