Review by the President and CEO

Strong order intake, good progress in strategic transformation and profitability

Half-Year Report Q1-Q2 2025 (14 August 2025)

The year 2025 has continued positively for Exel. As in the first quarter, we continued effectively navigating the business environment. We increased our order intake by almost 8% in the second quarter and by 15% in the first half of 2025, compared to the respective periods a year ago. Growth was strong especially in the strategic Energy customer industry, relating to both wind power as well as electrical transmission and distribution customers, and supported by favorable demand also from the defense and industrial customers.

Revenue for the first half of the year was on previous year’s level, totaling EUR 50.1 million. This was primarily due to the timing of deliveries related to the ongoing transition of production from our closed factory in Belgium to our other factories, a process that will continue through 2025. The ramp-up of production at our other sites progressed well following the closure.

While revenue declined by 6.7% in the second quarter due primarily to the aforementioned ongoing transition of Belgian volumes and due in part to some caution in customers related to macroeconomic factors, we focused on driving profitability. This allowed us to deliver an adjusted operating profit margin of 4.5% for the quarter.

Strategic transformation delivering results

Our strategic transformation is progressing as planned and delivering results. Aligned with our first strategic focus area, organic growth, we are pleased that our order backlog at the end of June stood at EUR 46.6 million, 35% higher than in the comparison period. We are advancing our second strategic focus area, customer value, through projects that involve complex composites design, for example airship tube design for Flying Whales, wind turbine helihoist platforms and value-adding post processing of transport profiles.

We are seeing encouraging results from our third strategic pillar of profitability, as we are optimizing capacity, sweating our assets and maintaining tight cost control to improve our operations. This significantly improved our profitability in the first half of 2025: our adjusted operating profit rose to EUR 1.8 million, up from EUR 1.1 million in the comparison period, thus already exceeding that of full year 2024.

As outlined in our strategy, we are preparing to move from the stability and profitability phase to the growth phase, supported by the growing order backlog and the ramp-up of production at our new factory in India. Building readiness for a larger volume of deliveries and executing our planned investments impacted on our working capital and cash flow. As a result, net cash flow from operating activities stood at EUR -3.8 million (1.0), resulting from the change in working capital of EUR -5.4 million (-0.9) and net cash flow from investing activities was EUR -1.9 million (-0.9).

Cyberattack in July

Exel Composites was the target of a cyberattack, resulting in a confirmed data breach on 18 July 2025. We acted swiftly with internal and external experts to contain the incident and secure our systems. Unfortunately, some personal data of employees and shareholders, in addition to some of Exel’s business information, was compromised. We launched a support program for affected individuals and continue to provide data protection services. Latest information about the breach and the services is available on our investor website.

While we have invested significantly in cybersecurity over time and across the whole organization, this incident highlights the evolving nature of cyber threats. We regret the breach and are taking further steps to strengthen our defenses and to train and support our employees.

2025 outlook and guidance maintained

We maintain our financial guidance for 2025 and expect revenue to increase and adjusted operating profit to increase significantly compared to 2024.

As recently implemented tariffs may influence sourcing and supply chain decisions, we see opportunities emerging as customers explore alternative manufacturing regions and strategies. We have secured first major supply agreements driven by tariff reactions and continue to be well positioned to respond to such changes in customer demand.

We are energized by the strategic advances and the promising results we are seeing and continue executing our strategy to drive sustainable and profitable growth, supported by a strong order backlog. I would like to extend my sincere thanks to our customers and investors for their continued trust, and to the entire Exel team for their dedication, hard work, and commitment to excellence.

Paul Sohlberg