President and CEO Riku Kytömäki

Strong revenue and operating profit in Q2 2022

Q1-Q2 2022 Half Year Financial Report, 20 July 2022

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.