Exel’s fourth quarter of 2024 was a strong end to a solid year. We performed well despite the economic uncertainty, and our order intake, revenue and adjusted operating profit improved significantly, while our fixed costs also decreased at the same time. For the full year 2024, Exel’s revenue increased and adjusted operating profit increased significantly compared to 2023, in line with our guidance for 2024. We continued the implementation of our transformative strategy with decisive steps and accomplished a lot during the first full year of the strategy period. 

The year closed with great news from India, where our new factory was completed on schedule and within budget. We are pleased to be able to strengthen our capabilities to provide top-tier composite solutions to our clients in India and globally, especially in the wind power industry. 

In 2024, we secured several new wind power customer engagements, which we expect to turn into revenue in 2025. Completion of the new India factory paves the way for the final approvals by our first customer, a major wind turbine manufacturer in South Asia, which are now ongoing and will enable us to move to volume production. In addition, spar cap deliveries from India factory for Vestas are expected to begin in the last quarter of 2025, once the products are tested and approved. The deliveries of helihoist systems for a major Western wind turbine manufacturer from our Nanjing factory in China are also expected to start in 2025. 

We are also thrilled to announce that our partnership with airship manufacturer and operator Flying Whales will continue as we have signed a significant contract for delivery of carbon fiber composites tubes for the structure of world’s largest airships. Earlier in 2024, we announced an R&D partnership for the development and prototyping of the tubes. The collaboration is a great example of our strategic intent to increase value to our customers by being involved in their R&D processes from the very start. It showcases our advanced R&D and manufacturing capabilities and highlights our ability to meet stringent quality requirements and timeliness demands of the aerospace industry, for example. 

Towards the end of the year, our factories in Finland received the IATF 16949 Certification for the automotive industry, which will help us grow our customer base in the automotive industry and further strengthen our position in transportation. 

We renewed our business model in early 2024 and started to serve our customers from two global business units: Engineered Solutions Business Unit, concentrating on tailored solutions for multiple industries, and Industrial Solutions Business Unit, focusing on selected applications with significant growth potential. To meet the needs of the new business units, we reviewed our factory network with larger, more efficient and better-resourced production units in mind, with the aim of making more use of the capacity of our factories and increasing utilization rates. 

The successful rights issue carried out in the second quarter strengthened our financial position, which gives us more room to maneuver and execute our strategy. 

The year also included difficult decisions that could not be avoided. Following a strategic factory review in Oudenaarde factory in Belgium, which thoroughly assessed the factory’s role and future options, and extensive consultations with employee representatives, we had to confirm that the factory will be closed as a necessary measure to address-loss making activities. The activities at the Oudenaarde unit will cease by the end of the first quarter of 2025. Unfortunately, the employment of approximately 50 employees will end. 

Strong order intake amid cautious markets

Our order intake increased both in the last quarter and for the full year. In the fourth quarter order intake increased by 22.2% and amounted to EUR 28.8 million. In 2024, order intake increased by 6.9% to EUR 104.9 million, and our order backlog at the end of the year stood at EUR 34.2 million, up by 14.8% year-on-year. 

The favorable development of order intake and order backlog were great achievements considering the still fragile macroeconomic sentiment that continued in the fourth quarter. The uncertainty about the global economic development affected customer behavior and demand across all geographies. During the year, our customers were cautious in their orders due to uncertainties related to the impacts of the Trump administration and import trade tariffs on the global economy, as well as geopolitical tensions, among other things. 

Revenue growth boosted by active customer work in business units 

Revenue for the fourth quarter increased by 13.6% to EUR 25.1 million, boosted by strong order intake and active customer work. Brisk growth was seen in Buildings and infrastructure, Industrial and Energy customer industries. The strongest growth was witnessed in Buildings and infrastructure, where we were able to gain new customers despite the difficult market situation. Revenue decreased slightly in Transportation, and Other customer industries due to lower production levels of the Belgium factory, which we are planning to close. We expect the decline to be temporary. 

Revenue for the full year increased by 2.9% to EUR 99.6 million. Revenue increased in Buildings and infrastructure, Industrial and Transportation, and decreased in Energy, and Other customer industries. In the Energy customer industry, the decrease was mainly due to the construction of the Indian factory in 2024 to meet the shift of wind power business demand from the US to Asia. 

In the fourth quarter, Engineered Solutions Business Unit (ESBU) reported EUR 21.0 million in revenue, while Industrial Solutions Business Unit (ISBU) reported EUR 4.1 million. ESBU received several significant orders especially in Energy and Transportation customer industries. The key highlights of the year for ISBU included the successful commissioning of the new factory in India. In addition to significant wind power customer engagements, other significant orders received by ISBU included a new multi-year agreement with Foton Bus and Coach company to supply pultruded composite profiles for Foton’s electric buses in the first quarter. 

Profit improvement actions paying off

Our profitability in terms of adjusted operating profit strengthened significantly both for the fourth quarter and full year 2024. In Q4 2024, our adjusted operating profit increased to EUR 0.2 million (-1.3), representing 0.7% (-5.9%) of revenue. Comparing to the second and third quarters of 2024, profitability in the fourth quarter was affected by lower production levels of the Belgium factory and some customer-initiated postponements of deliveries into 2025. Profitability in 2024 improved thanks to our actions to optimize capacity, cost control, decrease in fixed costs, and operational measures. Full year adjusted operating profit increased to EUR 1.7 million (-2.4) and adjusted operating profit margin to 1.7% (-2.5%). We continued profit improvement actions, which focused on improving efficiency and capacity utilization in our factory network. 

Operating profit for the quarter decreased to EUR -4.1 million (-3.7), impacted by loss-making activities in the Belgium factory and reservations for one-time costs associated with the planned closure of the factory. As a result, the operating profit margin was -16.3% (-16.7%). Operating profit for the full year was EUR -2.9 million (-4.9) and operating profit margin was -2.9% (-5.0%). 

Our net cash flow from operating activities strengthened in the fourth quarter from the comparison period and was EUR 1.9 million (0.8), thus improving from the previous quarters and coming in at EUR 0.6 million (4.4) for the full year. Our financial position is strong, and we are advancing with a clear agenda towards our financial target of net debt to adjusted EBITDA <3x by 2028. Earnings per share for 2024 were EUR -0.07 (-0.77). The Board of Directors proposes to the Annual General Meeting that no dividend be paid for 2024. 

Driving profitable growth also in uncertain times 

Despite lingering uncertainties in the global economy affecting customer behavior, the global economy is estimated to grow by approximately 3.3% in 2025 (Source: OECD and IMF). At Exel, we are pleased with how our strategy is working and expect profitable growth to accelerate this year. Exel’s both business units have new customer engagements that are expected to deliver revenue in 2025. 

In the short term, announced strikes in Finland may have an impact on our revenue and profitability in the first quarter of the year. The closure of the Belgium factory is also expected to increase internal workload and costs in 2025, temporarily offsetting part of the fixed cost savings from the closure. We anticipate our customers to request other sites in our factory network to supply their products. Until such time, there might be a temporary impact on our revenue due to the closure of the Belgium factory. 

Guidance for the full year 2025

Exel Composites expects revenue to increase and adjusted operating profit to increase significantly in 2025 compared to 2024. 

While we are always committed to keep improving our results, we can be very satisfied with our performance in 2024. I would like to take this opportunity to thank our customers and other stakeholders for their good cooperation and to express my gratitude to all of Exel’s personnel for their committed work during the year.