President and CEO Riku Kytömäki

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Operating profit and revenue increased

Half Year Financial Report Q1-Q2 2020

In the second quarter of 2020, revenue and operating profit increased compared to last year. This outcome was supported by a record high order intake in the first quarter. I am very satisfied with this result considering the current global business environment.

In the second quarter of 2020, the Covid-19 pandemic impacted Exel Composites’ operations in Europe and the United States, while in China our factories operated normally. Our quarterly order intake, however, declined only slightly compared to the previous year. On one hand, our order intake suffered from Covid-19 related uncertainty and cautiousness among our customers. On the other hand, we recorded a sizable order (representing roughly 15% of the quarterly order intake) in the Buildings and infrastructure customer industry, to be delivered mainly in 2021. Our order backlog at the beginning of the third quarter is good.

The impact caused by the pandemic on customer demand has varied greatly depending on location and industry. Several of our customers’ factories that were closed earlier have now reopened and activity level increased towards the end of the quarter as countries have gradually lifted restrictions. Based on this it seems that the business environment is developing favorably. However, there is still a risk that the pandemic continues or expands.

Revenue in the second quarter increased slightly compared to the previous year. The increase of deliveries, especially in Wind power to the Asia-Pacific region, was offset by a volume decline in other customer industries globally, mainly attributable to the Covid-19 pandemic.

Despite the effects of the pandemic, operating profit increased in the second quarter of 2020 compared to the previous year. The improved profitability of the business unit in the USA was the main factor behind the positive development of Group operating profit.

In June 2020, the Board of Directors reconfirmed Exel’s strategy until the end of 2022. Our main strategic focus areas as well as our long-term financial targets remain the same. Our strategic priorities for the remaining of 2020 include stabilizing the profitability of the business unit in the USA, consolidation of the organization in China, operational efficiency improvements in the European manufacturing units as well as focusing on growth initiatives. Sustainability is integrated even more closely into all Exel’s business and operations.