Exel Composites' Half Year Financial Report Q1-Q2 2022: Strong revenue and operating profit in Q2 2022

EXEL COMPOSITES PLC – – HALF YEAR FINANCIAL REPORT – – 20 July 2022 – at 10:00 EET

Q2 2022 in brief

• Order intake decreased by 14.9% to EUR 37.0 million (Q2 2021: 43.5).
• Revenue increased by 13.5% to EUR 38.1 million (33.5).
• Operating profit increased to EUR 3.0 million (2.4), which is 7.9% of revenue (7.0).
• Adjusted operating profit increased to EUR 3.1 million (2.5), which is 8.2% of revenue (7.3).
• Earnings per share amounted to EUR 0.34 (0.13).

Q1-Q2 2022 in brief

• Order intake decreased by 12.7% to EUR 74.6 million (Q1-Q2 2021: 85.5).
• Revenue increased by 12.0% to EUR 72.2 million (64.5).
• Operating profit decreased to EUR 3.0 million (4.8), which is 4.2% of revenue (7.4).
• Adjusted operating profit increased to EUR 5.3 million (4.9), which is 7.3% of revenue (7.6).
• Earnings per share amounted to 0.34 (0.29).

Guidance for the full year 2022 (unchanged)

Exel Composites expects that revenue in 2022 will be at last year’s level and adjusted operating profit will increase compared to 2021.

President and CEO, Riku Kytömäki

The second quarter of 2022 continued strong as both revenue and adjusted operating profit clearly increased from the previous year. Order intake was also strong at the level of the first quarter of 2022 and above the quarterly average of 2021. The corresponding period in 2021 was inflated by Wind Power orders in the United States that were cancelled later in the same year.

We saw revenue growth in the second quarter particularly in the Transportation customer industry, driven by a new aerospace application in North America. Also, Machinery & Electrical and Telecommunications customer industries were among the main contributors to revenue growth in the quarter. Buildings & Infrastructure and Defense, where revenue has grown strongly for several quarters, declined slightly compared to the previous year. Revenue in Wind Power declined due to lower order intake mainly in China.

Operating profit for the second quarter reached a milestone of three million euros. Improved profitability was driven by increased volumes and was strongly supported by the improved performance of the business unit in the United States compared to the previous year. The turnaround of the business unit continued during the quarter as planned with operational efficiency improvements being implemented. On a Group level, we have not been immune to the continuing cost increases in raw materials, logistics and energy. So far, we have, however, been able to mitigate the negative net impacts by adjusting our sales prices accordingly.

During the reporting period, we have continued our sustainability work. We initiated, for example, the process to calculate greenhouse gas emissions from our own operations and to set reduction targets. Whereas the emissions impact from our own operations is negative – something we work hard to reduce – it is compensated by the positive climate impact of the composites we produce. Composites are energy-efficient, corrosion-resistant, require little maintenance and have longer service life than competing materials.

I am very satisfied with the rapid improvement of our financial performance after the disappointing second half of 2021. The second half of 2022 is, however, also not free of uncertainty. The Russian war in Ukraine, cost inflation, challenges in raw material availability and the lingering Covid-19 pandemic continue to cast clouds over the global business environment. Even so, I have full confidence in Exel’s ability to continue successfully managing these challenges and continue on the path of profitable growth in the long term.

Consolidated key figures 

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) Can include order cancellations during the quarter.

Revenue by customer industry

Revenue by region1)

1) Revenue by customer location, not by the location of the manufacturing Exel Composites business unit.

Impacts of the Covid-19 pandemic

Operations

In the second quarter of 2022, all our factories operated normally and following most of the previous safety measures implemented to prevent the spread of the Covid-19 pandemic. In China, recent restrictions continued to create challenges on logistics and commuting.

Despite the continued challenges with global logistics and availability in many raw material categories, operations continued almost normally.

The health and safety of our employees, customers and business partners are a priority for Exel Composites. All units continued with tightened Group and business unit level safety and hygiene instructions in accordance with the instructions of local health authorities. We continue to monitor the situation closely and maintain a continuous interaction and dialogue with our customers, suppliers, and business partners to ensure timely reaction.

Financial standing

Order intake and customer demand continued at a good level in the second quarter of 2022. 

The Group’s liquidity and cash situation are good, and the Covid-19 pandemic has had limited impact on Group liquidity.

Exel Composites received no significant Covid-19 related financial assistance under any local governmental schemes during the second quarter of 2022.

Impacts of the war in Ukraine

For Exel Composites, the direct impact of the Russian attack on Ukraine is currently limited. Exel has no business operations in the affected areas and no customers in Russia, Belarus, or Ukraine. Some of our customers outside the affected areas in turn have customers in areas affected by the war, which consequently may have an indirect impact also on the demand for our products.

The Russian attack on Ukraine and the resulting sanctions are expected to affect global supply chains. We currently have no purchases from the affected areas. So far, the Russian attack on Ukraine has not impacted raw material availability but continued raw material and energy price increases naturally also impact Exel.

Financial results briefing

Exel Composites will hold a financial results briefing regarding the Q1-Q2 2022 Half Year Financial Report on 20 July 2022 at 12:30 EET. Participation has required registration in advance.

Vantaa, 20 July 2022

Exel Composites Plc
Board of Directors

For further information, please contact:

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

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