EXEL COMPOSITES PLC  FINANCIAL STATEMENTS RELEASE  14 FEBRUARY 2017 at 09:00 EET

  
Exel Composites Plc's Financial Statements Release 2016: “Challenging market environment continued”

Q4 2016 in brief

--  Order intake for the fourth quarter amounted to EUR 18.3 (20.5) million, -10.4% in comparison to previous year.
--  Revenue amounted to EUR 19.0 (19.3) million, -1.7% in comparison to previous year.
--  Adjusted operating profit amounted to EUR 0.7 (0.7) million, which is 3.7% (3.5) of revenue.
--  Net cash flow from operating activities was positive at EUR +1.2 (+0.5) million.
--  Earnings per share were EUR -0.09 (0.03).

Q1-Q4 2016 in brief

--  Order intake for the period amounted to EUR 74.8 (83.4) million, -10.3% in comparison to previous year.
--  Revenue amounted to EUR 73.1 (80.2) million, -8.9% in comparison to previous year.
--  Adjusted operating profit amounted to EUR 2.6 (4.8) million, which is 3.6% (5.9) of revenue.
--  Net cash flow from operating activities was positive at  EUR +3.1 (+3.4) million.
--  Earnings per share were EUR 0.02 (0.24).

Dividend proposal

The Board of Directors proposes that a dividend of EUR 0.10 per share be paid for the financial year 2016.

Outlook for full year 2017

Exel Composites 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 market environment has continued challenging throughout the year. Overall lower demand and toughened competition impacted some of our key markets such as telecommunications, where sales to Exel Composites’ biggest customer dropped approximately by EUR 5 million. Additionally some end customer infrastructure projects were postponed. The new customer acquisition was not enough to compensate the declined volumes from some key customers, even though ‘Other Applications’- customer industry grew by 6%. We have continued focused sales efforts specifically on customer industries where we see growth opportunities in the medium and longer term. New customers were developed, among other, in energy, transportation and construction industries, where we expect volume to grow during coming years. In general it is not found that Exel Composites’ market shares in key customer industries would have changed compared to previous year.

During the fourth quarter of 2016 we have continued with cost savings measures mainly impacting personnel costs. Thanks to these actions, our fixed cost structure has been brought to a lower level. Thus, the adjusted operating profit for the fourth quarter was at the same level as during the same period last year, despite the fact that revenue volume was slightly lower and also our sales mix less favorable. We continue to actively adapt our operations to the prevailing market conditions. This involves efficient capacity utilization and production optimization by pooling volumes when possible and making efficiency improvements when production runs are shorter and ramp up times need to be quicker.

At the end of the year, as disclosed in the stock exchange release published on 31 October 2016, we took an important step in the implementation of our growth strategy by acquiring a Chinese composites production company. In China the megatrends are strongly driving growth and presenting new business opportunities. In addition to expanding manufacturing capacity, we are also expanding our local sales and product development network, our customer portfolio and the range of applications we offer to the local market. At the same, the acquisition gives us the opportunity to improve our profitability in the Asia Pacific (APAC) region by significantly down-sizing the underperforming Australian unit, reorganizing our operations in the region and improving efficiency through synergies among the two Chinese units. We expect to close the transaction during the first quarter of 2017. In connection with the acquisition we were also able to cancel the Nanjing expansion project. In addition, the project to expand operations in Austria that was initiated in 2015 is put on hold.

In the short term we expect the market conditions to remain challenging, albeit some positive signs of recovery. Recent increases in oil and metal prices are expected to improve the overall market demand. In the longer term we are confident that global megatrends will drive growth and present new business opportunities for Exel Composites.

Consolidated key figures

1) As per 31 December 2016.   
2) 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 reporting and Annual General Meeting 2017

Exel Composites publishes the following reports in 2017:

Financial Statements Release 2016: 14 February 2017
Business Review January - March: 4 May 2017
Half Year Financial Report January - June: 20 July 2017
Business Review January - September: 25 October 2017

Annual Financial Report, Corporate Governance Statement and Remuneration Statement for 2016 will be published on Tuesday 14 March 2017 in electronic format at the company’s website www.exelcomposites.com.

The Annual General Meeting will be held on Tuesday 4 April 2017 at 10:00 at Scandic Marina Congress Center at the address of Katajanokanlaituri 6, Helsinki, Finland.

Financial results briefing

Exel Composites will hold a financial results briefing regarding the financial statements on Tuesday 14 February 2017 at 12:30 at Scandic Hotel Simonkenttä’s Roba meeting room (address Simonkatu 9, Helsinki, Finland).

Exel Composites’ Financial Statements Release January – December 2016 is available in full in pdf format attached to this release. The report and the related presentation shall also be available at the company’s website under the Investor section.

Vantaa, 14 February 2017

Exel Composites Plc
Board of Directors

For further information, please contact:

Riku Kytömäki, President and CEO
tel. +358 50 511 8288
riku.kytomaki@exelcomposites.com

Mikko Kettunen, CFO
tel. +358 50 347 7462
mikko.kettunen@exelcomposites.com
  

Distribution

Nasdaq Helsinki Ltd
Main news media
www.exelcomposites.com
 

Exel Composites in brief

Exel Composites (www.exelcomposites.com) is a leading composite technology company that designs, manufactures and markets composite products and solutions for demanding applications. Exel Composites provides superior customer experience through continuous innovation, world-class operations and long-term partnerships.

The core of the operations is based on own, internally developed composite technology, product range based on it and strong market position in selected segments with a strong quality and brand image. Profitable growth is pursued by a relentless search for new applications and development in co-operation with customers. The personnel’s expertise and high level of technology play a major role in Exel Composites’ operations. Exel Composites Plc share is listed in Nasdaq Helsinki Ltd.