Exel Composites Plc’s January – September Business Review 2019: “Strong improvement in profitability”
EXEL COMPOSITES PLC – STOCK EXCHANGE RELEASE – 30 OCTOBER 2019 at 09:00 EET
Q3 2019 in brief
- Order intake increased by 9.7% to EUR 27.1 million (Q3 2018: 24.7).
- Revenue increased by 2.3% to EUR 23.6 million (23.1).
- Adjusted operating profit increased to EUR 1.7 million (0.5), representing 7.0% of revenue (2.1).
- Operating profit increased to EUR 1.5 million (0.5), representing 6.2% of revenue (2.0).
- Net cash flow from operating activities was EUR 1.7 million (1.6).
- Earnings per share amounted to EUR 0.07 (0.00).
Q1-Q3 2019 in brief
- Order intake increased by 10.3% to EUR 79.0 million (Q1-Q3 2018: 71.6).
- Revenue increased by 10.4% to EUR 77.2 million (69.9).
- Adjusted operating profit increased to EUR 5.9 million (4.2), representing 7.6% of revenue (6.1).
- Operating profit increased to EUR 4.0 million (3.4), representing 5.2% of revenue (4.9).
- Net cash flow from operating activities was EUR 5.5 million (0.3).
- Earnings per share amounted to EUR 0.17 (0.17).
Outlook for full year 2019 (unchanged)
Exel Composites expects revenue and adjusted operating profit to increase in 2019 compared to 2018.
President and CEO, Riku Kytömäki
In the third quarter of 2019 order intake continued to be at a good level and revenue improved slightly compared to previous year. We have continued the efforts in our growth initiatives within the wind energy, construction and transportation industries, and our order intake grew by 9.7%. Strong revenue growth continued in Construction & Infrastructure supported by wind energy. Revenue growth in Other Applications was good. Increased volumes in both these customer segments compensated for the decrease in Industrial Applications, which continued to reflect the challenges of our telecommunications customers.
Adjusted operating profit in the third quarter more than tripled in comparison to the previous year. The main factor behind this improvement was the improved profitability of Exel USA. The cost savings program, which was launched in 2018, has lowered fixed costs and thereby improved profitability. According to current estimates the annual savings target of EUR 3 million, expected to be fully effective in 2020, will be reached. During the third quarter, we started production at a new manufacturing location in China near the city of Nanjing, where both of the previous factories are located. The new site that we have leased is better suited for composite production than the previous ones. In the new site there is enough space to accommodate, if need be, all production capacity of the old factories.
The construction of a new manufacturing facility in Austria is progressing according to the plan. The construction is expected to be completed in the second half of 2020 at an estimated total cost of EUR 7 million. At the end of the third quarter, Exel Composites signed EUR 20 million worth of revolving credit facilities under which the financing of the project is secured.
Consolidated key figures
|EUR thousand||1.7.–30.9. 2019||1.7.–30.9. 2018||Change, %||1.1–30.9. 2019||1.1.–30.9. 2018||Change, %||1.1.–31.12. 2018|
|Order intake||27 066||24 674||9.7||79 043||71 649||10.3||100 757|
|Order backlog 1)||25 404||21 322||19.1||25 404||21 322||19.1||23 685|
|Revenue 2)||23 627||23 101||2.3||77 199||69 897||10.4||96 608|
|Operating profit||1 454||459||216.5||4 003||3 411||17.4||2 217|
|% of revenue||6.2||2.0||5.2||4.9||2.3|
|Adjusted operating profit 3)||1 663||491||239.0||5 859||4 249||37.9||5 018|
|% of revenue||7.0||2.1||7.6||6.1||5.2|
|Profit for the period||847||12||7 161.3||2 033||1 992||2.0||386|
|Net cash flow from operating activities 4), 5)||1 725||1 611||7.1||5 527||334||1 553.0||868|
|Return on capital employed, %||9.3||3.1||9.0||8.7||4.4|
|Net gearing, % 4)||122.1||88.6||122.1||88.6||96.3|
|Earnings per share||0.07||0.00||0.17||0.17||0.03|
|Equity per share, EUR||2.20||2.31||-4.8||2.20||2.31||-4.8||2.18|
|Employees on average||641||685||-6.5||661||613||7.8||647|
1) As per the end of the period.
2) Revenue by customer segments Q3 2019 (Q3 2018): Industrial applications EUR 7.9 million (8.8); Construction & infrastructure EUR 10.9 million (9.8); Other applications EUR 4.8 million (4.5).
3) 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.
4) 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.
5) IFRS16 rental payments have been classified to financing activities in the cash flow statement. This impacted net cash flow from operating activities in Q3 2019 with EUR 300 thousand and EUR 845 thousand since the beginning of 2019.
Financial results briefing
Exel Composites will hold a financial results briefing for investors, analysts and journalists regarding the business review on Wednesday 30 October 2019 at 12:30 EET at Scandic Hotel Simonkenttä’s Roba meeting room (address Simonkatu 9, Helsinki, Finland). The related presentation material will be available after the meeting at the company’s website www.exelcomposites.com under Investors > Publications. In addition, on Thursday 31 October 2019 a shareholders site visit to Exel Composites’ factory in Joensuu, Finland, will be organized.
Vantaa, 30 October 2019
Exel Composites Plc
Board of Directors