President & CEO
Riku Kytömäki

 

“Revenue and operating profit increased significantly”

Exel Composites Plc’s Financial Statements Release 2017

 

Exel Composites Plc’s Annual Financial Report 2017

I am delighted to say that the year 2017 was in many ways a very good year for Exel Composites. Both revenue and adjusted operating profit increased significantly compared to 2016, first and foremost as a result of our strategic efforts, improved operational efficiency and continued tight cost control, but also reflecting signs towards a general market recovery.

All our markets and customer segments performed well in 2017. From the customer segment point of view, Industrial Applications continued to drive revenue growth. Construction & Infrastructure also delivered significant growth, supported by an increasing number of industrial investments and projects. In terms of regions and markets, our main market area Europe continued its steady revenue growth. China and the Asia-Pacific (APAC) region contributed however most to revenue growth. In addition to significant organic growth, the Nanjing Jianhui business, which was acquired in April 2017, had a substantial positive impact on APAC revenue.

“Our adjusted operating profit for 2017 more than doubled compared to previous year.”

We took good steps forward in the implementation of our strategy in 2017. This translated into increased revenue, which together with further operational efficiency improvements were the main factors behind a more than doubled adjusted operating profit.
The Nanjing Jianhui acquisition was an important milestone, ticking practically all of the boxes in terms of our strategic growth initiatives – expanding into China, creating true global footprint, as well as expanding into new technologies and new applications. The acquisition clearly strengthened our position in China and in APAC and improved our export capacity to other markets. We expanded our manufacturing capacity, local sales coverage as well as local product development capabilities. Our production capacity in China now adequately responds to the increasing demand for advanced composites in the APAC region. Also the APAC reorganization, the successful downsizing and ceasing of production in Australia as well as new customer acquisition and new business especially in China all contributed to revenue growth and profitability improvement.

“We took good steps forward in the implementation of our strategy in 2017.”

Across the Group, we extended also our technology capabilities in product design and composite production, e.g. strengthening the R&D organization, developing advanced laminate products and producing long-length carbon fiber products. Active development work was also done to penetrate new applications, leading to growth in new mid-segment applications. Additionally Exel has increased further processing capabilities, for example in terms of CNC- machining.

At the end of 2017 we confirmed our overall strategic direction for the next three years. Going forward we will have an increased focus on high growth segments. We believe high growth can be found especially in construction, transportation, energy and telecommunications segments over the next few years. Within these segments global megatrends such as urbanization and sustainability increase demand for advanced composites. Increased energy efficiency requirements, escalating need for anti-corrosive applications and increasing demands on telecommunication networks due to digitalization mean that in the future the choice of material will matter more than ever. Our ambition is to leverage on these trends by offering our knowledge on composites and providing attractive products that fit the demand. We will continue to build leadership in China and expand our global coverage, both organically and through potential acquisitions. Growth in mid-segment is also strategically important to us, since these products contribute positively to the operating profit through higher volumes and by broadening our customer base.

“Going forward we will have an increased focus on high growth segments such as construction, transportation, energy and telecommunication.”

Superior customer service and efficient, world-class operations are important differentiators for us also in the future. This means striving to be fast, flexible and responsive throughout our organization. Our corporate values – Customer focus, Integrity, One Exel, Caring People and Innovation – provide us the common framework that is necessary when taking Exel to the next level.
I would like to say a warm thank you and express my appreciation to all Exel Composites’ employees for their commitment and hard work – we can all be very happy with our achievements in 2017. Thank you also to our dear customers, business partners and shareholders. Now let’s make 2018 as good – and even better!

 

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