Exel Composites' Financial Statements Release Q1-Q4 2021: Revenue increased significantly, profitability declined
EXEL COMPOSITES PLC – – FINANCIAL STATEMENTS RELEASE – – 15 FEBRUARY 2022 – at 09:00 – EET
Q4 2021 in brief
- Order intake decreased by 8.8% to EUR 30.5 million (Q4 2020: 33.4).
- Revenue increased by 32.7% to EUR 36.5 million (27.5).
- Operating profit decreased to EUR 0.6 million (2.7), which is 1.8% of revenue (9.9).
- Adjusted operating profit decreased to EUR 1.0 million (2.7), which is 2.8% of revenue (9.9).
- Earnings per share amounted to EUR 0.04 (0.09).
Q1-Q4 2021 in brief
- Order intake increased by 21.8% to EUR 140.6 million (Q1-Q4 2020: 115.4).
- Revenue increased by 23.7% to EUR 134.4 million (108.6).
- Operating profit decreased to EUR 3.7 million (9.4), which is 2.8% of revenue (8.7).
- Adjusted operating profit decreased to EUR 6.0 million (9.7), which is 4.5% of revenue (8.9).
- Earnings per share amounted to 0.14 (0.45).
Dividend proposal
The Board proposes to the Annual General Meeting that a dividend of EUR 0.20 per share be paid based on the adopted financial statements for the financial year ended on 31 December 2021. The Board proposes that the dividend be paid in two installments.
Guidance for the full year 2022
Exel Composites expects that revenue in 2022 will be at last year’s level and adjusted operating profit will increase compared to 2021.
President and CEO, Riku Kytömäki
The year 2021 was two-fold for Exel. Whereas revenue and order intake increased significantly, adjusted operating profit declined compared to the previous year.
Despite strong growth, Group profitability declined due to the poor financial performance of Exel USA in the second half of the year. The lowered profitability was due to the ramp-up of a specific carbon fiber Wind Power product, produced in high volumes in our factory in the United States. Challenges related especially to the recruitment, learning curve and employee turnover, impacted also by the Covid-19 pandemic. Due to the poor performance, we made an impairment of EUR 1.8 million in the third quarter related to the unit’s intangible assets. In the fourth quarter, the Group profitability already improved from the previous quarter, as expected, but was nevertheless below the same period in the previous year.
Revenue increased significantly in 2021 across all our customer industries apart from Transport, where revenue was flattish compared to 2020. Supported particularly by the strong growth of the conductor core application, the Buildings and Infrastructure customer industry bypassed Wind Power as our largest customer industry in 2021. The growth ratio in Defense was the highest of our customer industries, where camouflage net support poles continued to drive growth. Telecommunication applications such as antenna radomes also made a positive contribution to Group revenue after low volumes in the past few years. Geographically, revenue grew across all our key regions during the year and growth was particularly strong in Europe and North America.
The Covid-19 pandemic continued to cause some uncertainty in the global business environment, but overall demand for our solutions recovered across our customer industries. Our factories operated almost without disruptions throughout the year despite pandemic related challenges in raw material availability. Material and logistics costs increased throughout 2021 and we continue to adjust our sales prices to offset the increase in costs.
During the year, we made good progress executing our growth strategy. The joint venture with Kineco Group, established in October, is an important steppingstone for us to enter the fast-growing Indian composites market. While the joint venture is still in its early phases, the collaboration has started well, and we see good growth potential and opportunities in the market. In the new manufacturing facility in Austria production started smoothly and as planned in the beginning of the year. The increased production capacity will respond to the long-term demand in Central Europe. The new state-of-art facility uses more production automation to ensure, for example, improved resin mixing accuracy. The new facility is noteworthy also from a sustainability point of view: energy efficiency, emissions, waste management as well as health and safety issues, have been widely considered already throughout the design phase. The site has an energy efficiency rating of A+.
Sustainability has an increasingly strategic role in Exel’s business, and it is our vision to be the first choice for sustainable composite solutions globally. Our key contribution to sustainability is to help our customers to save resources. Properties such as lightness, energy efficiency, durability and the need for less maintenance and replacement make composites environmentally friendly. Increasing sustainability focus also increases the demand for composites. In 2021, our sustainability work concentrated on further developing the fundaments of the Group sustainability, and this work continues in 2022.
A warm thank you to all Exel employees for the hard work and to our customers and other stakeholders for the continued cooperation and trust in the past year!
Consolidated key figures
| Q4 | Q4 | Change | Q1-Q4 | Q1-Q4 | Change | |
| EUR thousand | 2021 | 2020 | % | 2021 | 2020 | % |
| Revenue | 36,493 | 27,508 | 32.7 | 134,365 | 108,595 | 23.7 |
| Operating profit | 649 | 2,732 | -76.2 | 3,744 | 9,417 | -60.2 |
| % of revenue | 1.8 | 9.9 | 2.8 | 8.7 | ||
| Adjusted operating profit 1) | 1,004 | 2,732 | -63.2 | 6,029 | 9,708 | -37.9 |
| % of revenue | 2.8 | 9.9 | 4.5 | 8.9 | ||
| Profit before tax | 713 | 1,507 | -52.7 | 4,165 | 7,124 | -41.5 |
| % of revenue | 2.0 | 5.5 | 3.1 | 6.6 | ||
| Profit for the period | 455 | 1,098 | -58.6 | 1,693 | 5,368 | -68.5 |
| % of revenue | 1.2 | 4.0 | 1.3 | 4.9 | ||
| Shareholders' equity | 31,182 | 28,880 | 8.0 | 31,182 | 28,880 | 8.0 |
| Interest-bearing liabilities | 52,988 | 43,140 | 22.8 | 52,988 | 43,140 | 22.8 |
| Cash and cash equivalents | 15,593 | 11,974 | 30.2 | 15,593 | 11,974 | 30.2 |
| Net interest-bearing liabilities | 37,395 | 31,167 | 20.0 | 37,395 | 31,167 | 20.0 |
| Capital employed | 84,170 | 72,021 | 16.9 | 84,170 | 72,021 | 16.9 |
| Return on equity, % | 5.6 | 15.5 | -64.1 | 5.5 | 19.5 | -71.7 |
| Return on capital employed, % | 3.2 | 15.4 | -79.1 | 4.8 | 14.1 | -65.8 |
| Equity ratio, % | 26.8 | 30.2 | -11.2 | 26.8 | 30.2 | -11.2 |
| Net gearing, % | 119.9 | 107.9 | 11.1 | 119.9 | 107.9 | 11.1 |
| Net cash flow from operating activities | 4,916 | 4,674 | 5.2 | 6,275 | 14,006 | -55.2 |
| Net cash flow from investing activities | -3,032 | -3,277 | -7.5 | -11,877 | -12,849 | -7.6 |
| Capital expenditure | 3,378 | 3,321 | 1.7 | 9,931 | 13,220 | -24.9 |
| % of revenue | 9.3 | 12.1 | 7.4 | 12.2 | ||
| Research and development costs | 793 | 866 | -8.5 | 3,310 | 2,884 | 14.8 |
| % of revenue | 2.2 | 3.1 | 2.5 | 2.7 | ||
| Order intake 2) | 30,492 | 33,445 | -8.8 | 140,557 | 115,373 | 21.8 |
| Order backlog | 41,578 | 36,544 | 13.8 | 41,578 | 36,544 | 13.8 |
| Earnings per share, diluted and undiluted, EUR | 0.04 | 0.09 | -58.6 | 0.14 | 0.45 | -68.5 |
| Equity per share, EUR | 2.58 | 2.44 | 5.83 | 2.58 | 2.44 | 5.82 |
| Average share price, EUR | 7.33 | 6.51 | 12.6 | 8.58 | 5.55 | 54.6 |
| Average number of shares, diluted and undiluted, 1,000 shares | 11,834 | 11,830 | 0.0 | 11,833 | 11,827 | 0.0 |
| Employees, average | 750 | 674 | 11.4 | 715 | 665 | 7.5 |
| Employees, end of period | 753 | 674 | 11.7 | 753 | 674 | 11.7 |
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) Includes order cancellations during the quarter.
Revenue by customer industry
| Q4 | Q4 | Change | Q1-Q4 | Q1-Q4 | Change | |
| EUR thousand | 2021 | 2020 | % | 2021 | 2020 | % |
| Buildings and infrastructure | 8,409 | 7,047 | 19.3 | 32,946 | 23,451 | 40.5 |
| Equipment and other industries | 7,126 | 5,079 | 40.3 | 23,350 | 19,493 | 19.8 |
| Wind power | 8,309 | 6,582 | 26.2 | 32,066 | 28,079 | 14.2 |
| Machinery and electrical | 4,944 | 3,700 | 33.6 | 17,612 | 15,522 | 13.5 |
| Transportation | 2,888 | 1,857 | 55.5 | 10,224 | 10,224 | 0.0 |
| Defense | 2,469 | 1,406 | 75.7 | 8,688 | 5,338 | 62.7 |
| Telecommunications | 2,348 | 1,837 | 27.9 | 9,480 | 6,488 | 46.1 |
| Total | 36,493 | 27,508 | 32.7 | 134,365 | 108,595 | 23.7 |
Revenue by region1)
| Q4 | Q4 | Change | Q1-Q4 | Q1-Q4 | Change | |
| EUR thousand | 2021 | 2020 | % | 2021 | 2020 | % |
| Europe | 19,182 | 17,031 | 12.6 | 73,413 | 62,757 | 17.0 |
| North America | 10,242 | 3,328 | 207.7 | 32,440 | 18,022 | 80.0 |
| Asia-Pacific | 6,238 | 6,438 | -3.1 | 25,413 | 24,022 | 5.8 |
| Rest of the world | 831 | 711 | 16.9 | 3,099 | 3,795 | -18.3 |
| Total | 36,493 | 27,508 | 32.7 | 134,365 | 108,595 | 23.7 |
1) Revenue by customer location, not by the location of the manufacturing Exel Composites business unit.
Impacts of the Covid-19 pandemic in 2021
Operations
In 2021, all our factories operated close to normal and following most of the previous safety measures implemented to prevent the spread of the Covid-19 pandemic.
Despite the continued challenges with global logistics and availability in many raw material categories, operations continued almost normally.
The health and safety of our employees, customers and business partners are a priority for Exel Composites. All units continued with tightened Group and business unit level safety and hygiene instructions in accordance with the instructions of local health authorities. Remote work and online meetings were preferred and outsider visits to sites were reduced to minimum. Internal communication on Covid-19 related concerns continued in various channels.
We continue to monitor the situation closely and maintain a continuous interaction and dialogue with our customers, suppliers, and business partners to ensure timely reaction.
Financial standing
Despite some uncertainty among our customers, underlying demand across all customer industries improved during the financial year compared to the previous year.
The Group’s liquidity and cash situation during the year was good, and the Covid-19 pandemic has had limited impact on Group liquidity.
Exel conducted an impairment testing in the second half of 2021. The testing resulted in an impairment in the intangible assets of EUR 1.8 million related to the business unit in the United States.
During 2021, Exel Composites received no Covid-19 related financial assistance under any local governmental schemes, whereas in 2020 approximately EUR 0.8 million were received.
Financial reporting and Annual General Meeting 2022
Exel Composites publishes the following financial reports in 2022:
- Financial Statements Release 2021: 15 February 2022
- Business Review January-March: 29 April 2022
- Half-year Financial Report January-June: 20 July 2022
- Business Review January-September: 3 November 2022
The Annual Financial Report, Corporate Governance Statement and Remuneration Report for 2021 will be available on 4 March 2022 at the company’s website www.exelcomposites.com.
The Annual General Meeting will be held on 25 March 2022 at 9:30 EET in Exel Composites’ premises at Mäkituvantie 5, 01510 Vantaa, Finland. Shareholders of the company may participate in the meeting and exercise their shareholders’ rights only through a proxy representative and by submitting counterproposals and questions in advance. Proxy representatives must see to the voting in advance on behalf of shareholders.
After the Annual General Meeting, on 25 March 2022 at 10:00 EET, Exel Composites will hold an online event for shareholders, where the resolutions made at the General Meeting and the review by the President and CEO will be presented. Instructions to register to this event are presented in the notice to Exel Composites’ Annual General Meeting under Section C item 5 and at the company’s website www.exelcomposites.com.
Financial results briefing
Exel Composites will hold a financial results briefing regarding the Q1-Q4 2021 Financial Statements Review on 15 February 2022 at 12:30 EET. Participation has required registration in advance.
Vantaa, 15 February 2022
Exel Composites Plc
Board of Directors