Exel Composites Plc’s January – March Business Review 2017: “Significant improvement in operating profit”
EXEL COMPOSITES PLC – STOCK EXCHANGE RELEASE – 4 MAY 2017 at 09:00 EET
Q1 2017 in brief
- Order intake increased by 24.7% to EUR 22.5 million (Q1 2016: 18.0).
- Revenue increased by 13.3% to EUR 20.3 million (17.9).
- Operating profit amounted to EUR 1.7 million (0.1), which is 8.2% of revenue (0.8%).
- Net cash flow from operating activities was EUR -0.8 million (-0.9).
- Earnings per share amounted to EUR 0.09 (0.00).
Outlook for full year 2017
Exel Composites reiterates its outlook for 2017 and estimates that revenue with current company structure (i.e. without the Chinese company acquisition) will increase from previous year level and adjusted operating profit will be higher than previous year level. In 2016, Exel Composites’ revenue was EUR 73.1 million and adjusted operating profit was EUR 2.6 million.
President and CEO, Riku Kytömäki
The year 2017 has started off well: we have made clear improvement on the quarterly key figures as well as solid progress with respect to the implementation of our growth strategy. During the first quarter order intake was strong and order backlog at the end of March improved further from the relatively good level at the end of 2016. With increased order intake also revenue increased during the first quarter. Key performance indicators i.e. order intake, revenue and operating profit all improved. The significant improvement in operating profit reflected increased revenues, a lower cost base and an increased production yield.
The Industrial Applications segment contributed the most to revenue growth due to the increased efforts and focus on new customer acquisition, which have clearly gained momentum. Also the general market environment recovery is contributing to the order intake and consequently revenue growth. The recent increases in oil and metal prices are expected to gradually improve overall market demand for composites. Revenue and order intake in the Asia-Pacific (APAC) region, China in particular, has also clearly picked up during the first quarter.
Operating profit has continued to improve since the third quarter of 2016, driven by top line growth, increased production efficiency and reduced cost level. We continue to see the impact of the cost savings measures from 2016 also going forward. The main part of savings are related to personnel costs and to the downsizing of our business unit in Australia.
The acquisition of the Chinese composites production company Nanjing Jianhui (JHFRP), which was originally announced with a separate stock exchange release at the end of October 2016, has been completed at the end of April. I am very happy to have finalized this important step in the implementation of our growth strategy in China. This acquisition strengthens our position in China, and improves our export capacity to other growth markets in Asia. We now aim to ensure a smooth integration of the business to the Exel Group. Exel’s existing Chinese factory as well as that of the acquired business are both located in Nanjing, which gives us the opportunity to realize operational synergies in terms of production capacity and cost structure.
Consolidated key figures
|EUR thousand||1.1.–31.3. 2017||1.1.–31.3. 2016||Change, %||1.1.-31.12. 2016|
|Order backlog ¹||18,806||15,382||22.3||16,702|
|% of revenue||8.2||0.8||0.9|
|Adjusted operating profit ³||1,665||149||1016.6||2,621|
|% of revenue||8.2||0.8||3.6|
|Profit for the period||1,107||-2||53940.3||198|
|Net cash flow from operating activities||-848||-862||+1.6||3,129|
|Return on capital employed, %||17.4||1.5||1.7|
|Net gearing, %||16.5||15.8||12.2|
|Earnings per share||0.09||0.00||0.02|
|Equity per share, EUR||2.37||2.32||2.5||2.27|
¹ As per 31 March 2017.
² Revenue by customer segment in Q1 2017: Industrial Applications EUR 11.9 million (9.6), Construction & infrastructure EUR 4.1 million (4.1), Other applications EUR 4.4 million (4.2).
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.
Financial results briefing
Exel Composites will hold a financial results briefing regarding the Business Review for investors, analysts and media on Thursday 4 May 2017 at 12:30 at Scandic Hotel Simonkenttä’s Roba meeting room (address Simonkatu 9, Helsinki, Finland).
Vantaa, 4 May 2017
Exel Composites Plc
President and CEO