Exel Composites Plc’s January – March Business Review 2019: “Strong growth in the first quarter”
EXEL COMPOSITES PLC – STOCK EXCHANGE RELEASE – 3 MAY 2019 09:00 EET
Q1 2019 in brief
- Order intake increased by 28.1% to EUR 28.2 million (Q1 2018: 22.0).
- Revenue increased by 25.9% to EUR 27.1 million (21.5).
- Adjusted operating profit amounted to EUR 2.0 million (1.8), which is 7.2% of revenue (8.3%).
- Net cash flow from operating activities was EUR 0.7 million (-0.2).
- Earnings per share amounted to EUR -0.04 (0.08).
Outlook for the full year 2019
Exel Composites expects revenue and adjusted operating profit to increase in 2019 compared to 2018.
President and CEO, Riku Kytömäki
The first quarter of 2019 started strongly with a significant increase in both order intake and revenue. Also adjusted operating profit increased compared to the same period last year.
Growth was strong in the Construction & Infrastructure customer segment, driven by wind energy industry. Organic growth was 8.3%, while Diversified Structural Composites, DSC, (acquired in April 2018), increased Group revenue by 17.6%. Growth in Construction & Infrastructure as well as Other Applications customer segments compensated for the decrease in Industrial Applications, where market conditions in the telecommunications industry continue to be challenging. From regional perspective, the wind energy industry and the consolidation of DSC contributed to the revenue increase in the Rest of the World as well as in the Asia-Pacific regions. In Europe, revenue was approximately at last year’s level.
Adjusted operating profit for the first quarter of 2019 increased compared to last year. The improvement was driven by increased business volumes, but it also reflected improved operational efficiency achieved through the ongoing cost savings program. The annual savings target of the program is EUR 3 million, expected to be fully effective in 2020. During the first quarter of 2019, we initiated the process to close production in Germany, which was completed as planned at the end of April. A related one-time cost of EUR 1.2 million was recorded in the first quarter of 2019. In North America, the cost savings at DSC progressed as planned. DSC’s operating profit in the first quarter was negative, but the target is for DSC to reach breakeven during the year.
Going forward, we continue to focus both on improving profitability and on growth, leveraging on the Group’s improved global position.
IFRS 16 standard has been applied as of 1 January 2019. Historical figures have not been adjusted to IFRS 16 standard. Net gearing increased during the quarter to 132.3% mainly due to the adoption of IFRS 16, reflecting the recognition of long terms leases as interest bearing liabilities in the balance sheet. The comparable net gearing excluding the impact of IFRS 16 was 113.2%. The impact on operating profit, profit for the period and other income statement related consolidated key figures was minimal.
Consolidated key figures
|EUR thousand||1.1.-31.3.2019||1.1.-31.3.2018||Change, %||1.1.-31.12.2018|
|Order backlog ¹||24,750||17,503||41.4||23,685|
|% of revenue||1.5||7.6||2.3|
|Adjusted operating profit ³||1,958||1,785||9.7||5,018|
|% of revenue||7.2||8.3||5.2|
|Profit for the period||-463||919||-150.3||386|
|Net cash flow from operating activities||681||-163||517.9||868|
|Return on capital employed, %||2.8||14.6||4.4|
|Net gearing, %||132.3||37.7||96.3|
|Earnings per share||-0.04||0.08||0.03|
|Equity per share, EUR||2.03||2.25||-9.6||2.18|
|Employees on average||689||575||19.8||647|
¹ As per the end of the period.
² Revenue by customer segment in Q1 2019 (Q1 2018): Industrial Applications EUR 9.3 million (11.3), Construction & infrastructure EUR 11.3 million (5.6), Other applications EUR 6.5 million (4.7).
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 (EUR 1.6 million in Q1 2019 and EUR 0.1 million in Q1 2018). 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 holds a financial results briefing regarding the financial statements on Friday 3 May 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.
Vantaa, 3 May 2019
Exel Composites Plc
President and CEO