Exel Composites’ Financial Statements Release Q1–Q4 2022: Stable revenue and higher profitability in 2022 compared to 2021

EXEL COMPOSITES PLC    FINANCIAL STATEMENTS RELEASE    17 February 2023 at 09:00 EET

Q4 2022 in brief

• Order intake decreased by 15.9% to EUR 25.6 million (Q4 2021: 30.5)
• Revenue decreased by 15.1% to EUR 31.0 million (36.5)
• Adjusted operating profit stable year-on-year at EUR 0.9 million (1.0), which is 3.0% of revenue (2.8%)
• Operating profit decreased to EUR -1.7 million (0.6), which is -5.5% of revenue (1.8%)
• Earnings per share amounted to EUR -0.32 (0.04)

Q1-Q4 2022 in brief

• Order intake decreased by 11.3% to EUR 124.7 million (Q1-Q4 2021: 140.6)
• Revenue increased by 2.0% to EUR 137.0 million (134.4)
• Adjusted operating profit increased to EUR 8.0 million (6.0), which is 5.9% of revenue (4.5%)
• Operating profit decreased to EUR 3.0 million (3.7), which is 2.2% of revenue (2.8%)
• Earnings per share amounted to EUR 0.19 (0.14)

Dividend proposal

The Board proposes to the Annual General Meeting that a dividend of EUR 0.20 (0.20) per share be paid based on the adopted financial statements for the financial year ended on 31 December 2022.

 

Guidance for the full year 2023

Exel Composites expects that revenue in 2023 will be at last year’s level and adjusted operating profit will increase compared to 2022.

 

President and CEO, Jouni Heinonen

Wind power market flat but growth expected to recover in 2024

Adjusted operating profit for the fourth quarter of 2022 was on the same level than a year ago. Profitability was supported by good cost management which compensated for lower revenue. The lower revenue in the fourth quarter of 2022 compared to a year ago was impacted by lower demand in several customer industries, especially in Wind Power. Geographically, revenue was lower in all regions in the fourth quarter than in the comparison period.

 

Wind power market demand has temporarily been weaker but is expected to recover and turn to growth towards the end of the year 2023. The wind power market is expected to be the largest and the fastest growing market for the pultrusion industry in the next several years. Wind power industry is our important growth area. One proof point of that is the multi-year agreement to supply pultrusion products to a wind power industry customer we signed in December.

 

Full year 2022 revenue increased by 2% from 2021. Especially the Transportation customer industry had favorable development driven by the recovery from the Covid-19 pandemic in general. In addition, sales in the Machinery & Electrical and Telecommunications customer industries increased, compensating the decrease in other customer industries. Geographically, revenue increased in Europe and North America but declined in Asia-Pacific, especially in China, due to the Covid-19 pandemic.

 

Full year 2022 adjusted operating profit increased from 2021. I am pleased that the business unit in the United States improved its profitability level and had a positive full year adjusted operating profit after the challenges in 2021. In 2022, material cost level increased but we were able to transfer the cost increases to our sales prices quite well. Our material efficiency improved, especially in the United States. In the fourth quarter we saw the stabilization of material and logistics costs but the visibility into cost development in the coming quarters is still limited. 

 

Sustainability plays an important role in Exel’s business. Our purpose is to solve challenges and save resources with composites and our vision is to be the first choice for sustainable composite solutions globally. They both have a strong link to sustainability. The world needs more renewable energy, more energy-efficient buildings, and lighter vehicles, all of which require the use of composite materials. We can support our customers in this important transition. 

 

We have continued to focus on and develop our operations. In 2022, we reorganized and consolidated operations in China to one manufacturing site. In August, Exel signed an agreement to sell the closed factory site in Nanjing in China. The sales process is almost completed and the administrative process is in the final stages.

 

On 4 January 2023 we announced the plans to evaluate the downsizing of the operations in the United Kingdom. The employee consultations are ongoing and decisions regarding the plans will be taken only after the local consultations have been concluded. We have production capacity in several sites in Europe. Going forward, we are confident that we can serve our customers well regardless of the decisions of the consultations.

 

There is some uncertainty in the short-term demand development due to the general macroeconomic environment. This is reflected in our order backlog that is lower than a year ago. In the first half of the 2023, we expect the demand to be slightly soft. However, our long-term demand outlook is positive. I am confident in our ability to be proactive and expect us to continue on the path of profitable growth in the long term.

I would like to thank all Exel employees for their hard work as well as our customers and other stakeholders for the continued cooperation and trust.

Consolidated key figures

	Q4	Q4	Change	Q1-Q4	Q1-Q4	Change
EUR thousand	2022	2021	%	2022	2021	%
Revenue	30,984	36,493	-15.1	136,988	134,365	2.0
Operating profit	-1,715	649	-364.1	3,002	3,744	-19.8
% of revenue	-5.5	1.8		2.2	2.8
Adjusted operating profit 1)	918	1,004	-8.6	8,029	6,029	33.2
% of revenue	3.0	2.8		5.9	4.5
Profit before tax	-5,076	713	-811.6	3,600	4,165	-13.6
% of revenue	-16.4	2.0		2.6	3.1
Profit for the period	-3,826	418	-1015.1	2,145	1,656	29.5
% of revenue	-12.3	1.1		1.6	1.2
Profit for the period excluding non-controlling interest	-3,781	455	-931.2	2,293	1,693	35.5
% of revenue	-12.2	1.2		1.7	1.3
Shareholders' equity	30,385	31,182	-2.6	30,385	31,182	-2.6
Interest-bearing liabilities	48,498	52,988	-8.5	48,498	52,988	-8.5
Cash and cash equivalents	17,397	15,593	11.6	17,397	15,593	11.6
Net interest-bearing liabilities	31,101	37,395	-16.8	31,101	37,395	-16.8
Capital employed	78,883	84,170	-6.3	78,883	84,170	-6.3
Return on equity, %	-46.9	5.6	-940.6	7.0	5.5	26.3
Return on capital employed, %	-8.4	3.2	-361.3	3.7	4.8	-22.6
Equity ratio, %	26.9	26.8	0.5	26.9	26.8	0.5
Net gearing, %	102.4	119.9	-14.6	102.4	119.9	-14.6
Net cash flow from operating activities	4,361	4,916	-11.3	6,767	6,275	7.8
Net cash flow from investing activities 2)	3,968	-3,032	-230.8	2,018	-11,877	-117.0
Capital expenditure	1,150	3,378	-65.9	4,592	9,931	-53.8
% of revenue	3.7	9.3		3.4	7.4
Research and development costs	850	793	7.2	3,426	3,310	3.5
% of revenue	2.7	2.2		2.5	2.5
Order intake 3)	25,645	30,492	-15.9	124,735	140,557	-11.3
Order backlog	29,110	41,578	-30.0	29,110	41,578	-30.0
Earnings per share, diluted and undiluted, EUR	-0.32	0.04	-929.8	0.19	0.14	35.2
Equity per share, EUR	2.53	2.58	-2.23	2.53	2.58	-2.24
Average share price, EUR	5.37	7.33	-26.7	6.30	8.58	-26.6
Average number of shares, diluted and undiluted, 1,000 shares	11,854	11,834	0.2	11,850	11,833	0.1
Employees, average	721	750	-3.9	732	715	2.4
Employees, end of period	721	753	-4.2	721	753	-4.2

 

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) The payment received on the real estate sales in Nanjing has a positive effect on the Net cash flow from investing activities

3) Can include order cancellations during the quarter

Revenue by customer industry

	Q4	Q4	Change	Q1-Q4	Q1-Q4	Change
EUR thousand	2022	2021	%	2022	2021	%
Buildings and infrastructure	8,059	8,409	-4.2	32,456	32,946	-1.5
Equipment and other industries	4,347	7,126	-39.0	23,127	23,350	-1.0
Wind power	5,492	8,309	-33.9	26,765	32,066	-16.5
Machinery and electrical	5,183	4,944	4.8	19,705	17,612	11.9
Transportation	3,334	2,888	15.4	17,380	10,224	70.0
Defense	1,926	2,469	-22.0	7,524	8,688	-13.4
Telecommunications	2,645	2,348	12.6	10,031	9,480	5.8
Total	30,984	36,493	-15.1	136,988	134,365	2.0

Revenue by region1)

	Q4	Q4	Change	Q1-Q4	Q1-Q4	Change
EUR thousand	2022	2021	%	2022	2021	%
Europe	18,261	19,181	-4.8	76,651	73,413	4.4
North America	7,642	10,242	-25.4	37,272	32,440	14.9
Asia-Pacific	5,043	6,238	-19.2	20,930	25,413	-17.6
Rest of the world	38	831	-95.4	2,135	3,099	-31.1
Total	30,984	36,493	-15.1	136,988	134,365	2.0

 

1) Revenue by customer location

Financial results briefing

Exel Composites will hold a financial results briefing regarding the Q1-Q4 2022 results today at 12:30 EET. To participate in the online event, please register in advance by sending an email to [email protected].

 

 

This release is a summary of Exel Composites’ Financial Statements Release Q1-Q4 2022. The complete report is attached to this release as a pdf and is also available on Exel Composites’ website at www.exelcomposites.com.

 

For further information, please contact:

Mikko Rummukainen, CFO
tel. +358 40 566 2623

[email protected]

 

Sanna Ahvenniemi, Head of Investor Relations

tel. +358 40 864 3000

[email protected]

 

Exel Composites in brief

At Exel Composites, we use over 60 years’ experience to solve challenges and help customers save resources. Our forward-thinking composite solutions made with continuous manufacturing technologies serve customers in a wide range of industries around the world. You can find our products used in applications from wind power and transportation to building and infrastructure.

 

Our collaborative approach and global footprint set us apart from our competition. We use our expertise to help customers reduce weight, improve performance and energy efficiency and decrease total lifetime costs. We want to be the first choice for sustainable composite solutions globally.

 

Headquartered in Finland, Exel Composites employs approximately 700 forward-thinking professionals around the world and is listed on Nasdaq Helsinki. To find out more about our offering and company please visit www.exelcomposites.com.

 

Exel Composites Plc