Review by the President and CEO
We advanced on all fronts in the third quarter – both commercially, operationally, and strategically – turning customer demand into a stronger order book while ramping capacity to support growth.
Exel’s order intake grew by 27.8% to EUR 26.9 million in the third quarter, outpacing revenue of EUR 24.1 million, which was stable year on year due to customer delivery phasing. Adjusted operating profit improved to EUR 0.9 million, corresponding to a 3.8% margin, up by 31% year on year. Our order backlog increased to EUR 49.2 million, 61% higher than a year ago, supporting our growth for the coming quarters. This progress is as anticipated: we are about to complete our strategy’s stabilization and profitability phase and continue working closely with customers to build for the growth phase.
In the quarter, we saw market activity develop favorably in line with our chosen customer industries: Energy remained strong, while Buildings & Infrastructure and Transportation showed good demand. We also experienced continued activity in defense-related applications where composites deliver low weight and high durability.
Operational execution delivering results
Operational execution advanced across both business units. Industrial Solutions began commercial shipments from our new India factory in September and will continue increasing volumes, thus improving proximity and cost-to-serve for wind customers and strengthening our global supply chain. In Engineered Solutions business unit, we advanced multiple new customer engagements and continued the planned transfer of product families from the closed Belgium site. In relation to these activities, our third quarter earnings reflect closure-related items from the Belgium site where operations stopped in March 2025. The process following the closure is ongoing and approaching completion. We will continue to manage the transition carefully while maintaining delivery performance and quality.
Our renewed operational model continues to produce results, as reflected in our improved profitability. We operate with fewer sites following our ongoing network optimization and are seeing increased utilization rates in the remaining footprint. As a result, adjusted operating profit was higher year on year even with revenue broadly in line with last year.
Operating cash flow was negative in this quarter, reflecting a build-up in working capital tied to our larger order backlog, India ramp-up and delivery scheduling. We expect our operating cash flow and working capital efficiency both to improve as we grow, while total working capital is expected to increase as revenue grows.
Strategic deals strengthen our position
During the third quarter, we achieved notable customer milestones. In Energy customer industry, a large purchase order for composite conductor cores from De Angeli Prodotti was prepared during the period and received after the period. In Buildings & Infrastructure customer industry, we secured a deal with long-standing customer KONE for increased UltraRope® deliveries.
Conductor cores is a growing application for composites as they offer superior properties compared to traditional materials. Composite cores allow the transmission line to carry more current, waste less energy, and sag less while achieving longer spans – letting utilities to add capacity on existing lines without rebuilding. Similarly, UltraRope®’s carbon-fiber core replaces steel, improving the energy efficiency of elevators in high-rise applications. These composite solutions are perfect examples of how Exel combines specialized engineering with industrial-scale manufacturing to deliver consistent quality in demanding applications.
Turning to growth ahead of expectations
Going forward, our strategic priorities are clear. We will continue working on securing growth from existing and new customers, build the order book and convert it efficiently, thus utilizing our capacity optimally, and deepen partnerships where Exel’s engineering improves our customers’ business.
With the strategic customer deals in place, wind programs now shipping from India, and operational programs on track, we are busy accelerating towards 2026 while completing this year in line with our full-year 2025 guidance framework. I want to thank our customers and shareholders for their continued trust, and the entire Exel team for their focused and committed work.
Paul Sohlberg