Q4 2016 OPERATING PROFIT AT PREVIOUS YEAR’S LEVEL DESPITE LOWER REVENUE AND LESS FAVORABLE SALES MIX Riku Kytömäki President and CEO 14.2.2017 Exel Composites Plc
2016 in brief • Business environment – Challenging market environment – Generally lower demand and toughened competition in key markets such as telecommunications – Less favorable sales mix – New customer acquisition not enough to compensate • Operations – Successful cost savings measures – Efficient capacity utilization and production optimization • Financial performance – Cost reduction measures improved Q4 2016 profitability – Adjusted operating profit for Q3 and Q4 2016 higher or at the same level as in the same periods previous year Exel Composites Plc 2
Q1-Q4 2016 highlights Revenue, EUR million Order intake, EUR million 18.4 20.5 19.3 21.1 18.3 19.0 20.8 18.7 18.0 19.0 18.2 16.4 21.4 21.4 21.4 21.4 19.7 20.2 22.8 21.5 21.8 17.8 17.9 18.0 Q1-Q4 Q1-Q4 Q1-Q4 Q1-Q4 Q1-Q4 Q1-Q4 2014 2015 2016 2014 2015 2016 Adjusted operating profit, Net cash flow, EUR million EUR million 2.1 3,8 2.3 0.7 3,8 0.5 3.1 0,5 1,2 0.7 1.5 0,5 0.6 2,4 1,7 2,5 1.9 2.0 1.2 0.1 0,3 0,6 0,7 -0,9 Q1-Q4 Q1-Q4 Q1-Q4 Q1-Q4 Q1-Q4 Q1-Q4 2014 2015 2016 2014 2015 2016 Exel Composites Plc 3
Key figures Q1-Q4 2016 1.1.-31.12. 1.1.-31.12. Change EUR thousand 2016 2015 % Order intake 74,778 83,374 -10.3 Order backlog 1) 16,702 15,348 8.8 Revenue 73,079 80,196 -8.9 Operating profit 649 4,414 -85.3 % of revenue 0.9 5,5 Adjusted operating profit 2) 2,621 4,770 -45.1 % of revenue 3.6 5.9 Profit for the period 198 2,844 -93.0 Net cash flow 3,129 3,385 -7.6 Return on capital employed, % 1.7 12.0 Net gearing, % 12.2 2.0 Earnings per share, EUR 0.02 0.24 Equity per share, EUR 2.27 2,58 -12.0 Employees on average 479 498 -3.8 Employees at end of period 455 494 -7.9 1) As per 31 December 2016. 2) Excluding material items affecting comparability, such as restructuring costs, impairment losses and reversals, and costs related to planned or realized business acquisitions or disposals. For more information, please refer to the paragraph “Change in Exel Composites’ financial reporting terminology” of the Half -year Financial Report January – June 2016. Exel Composites Plc 4
Key figures Q4 2016 1.10.-31.12. 1.10.-31.12. Change EUR thousand 2016 2015 % Order intake 18,334 20,466 -10.4 Order backlog 1) 16,702 15,348 8.8 Revenue 19,009 19,343 -1.7 Operating profit -1,209 609 -298.5 % of revenue -6.4 3.1 Adjusted operating profit 2) 708 673 5.2 % of revenue 3.7 3.5 Profit for the period -1,065 409 -360.4 Net cash flow 1,157 477 142.6 Return on capital employed, % -12.5 6.8 Net gearing, % 12.2 2.0 Earnings per share, EUR -0.09 0.03 Equity per share, EUR 2.27 2.58 -12.0 Employees on average 457 493 -7.3 Employees at end of period 455 494 -7.9 1) As per 31 December 2016. 2) Excluding material items affecting comparability, such as restructuring costs, impairment losses and reversals, and costs related to planned or realized business acquisitions or disposals. For more information, please refer to the paragraph “Change in Exel Composites’ financial reporting terminology” of the Half -year Financial Report January – June 2016. Exel Composites Plc 5
Lower demand in key markets; new customers not enough to compensate • Order backlog at a historically high level. Revenue and order backlog 25 25 20 20 15 15 10 10 5 5 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 Revenue, EUR million Order backlog, EUR million, end of period Exel Composites Plc 6
Less favorable sales mix reduced revenue Revenue bridge 2016 vs. 2015 Acquisitions / Volume Sales mix Exhange rates divestments Total 1) 0,0 % -1,2 % -1,0 % -2,0 % -3,0 % -4,0 % -6,1 % -8,9 % -5,0 % -6,0 % -7,0 % -8,0 % -1,6 % -9,0 % 0,0 % -10,0 % 1) Volume impact calculated as difference in kilograms of delivered products times prior year average sales price/kg. Exel Composites Plc 7
Lower demand impacted key markets such as telecommunications Revenue by Customer Industry, Industrial Applications EUR million 3.7 3.6 4.5 4.2 11.2 11.3 Q4 2015 Q4 2016 Machine Telecommuni- Paper Electrical Transportation Industry Industry Industry Industry Other Applications cation Construction & Infrastructure Industrial Applications Construction & Other Infrastructure Applications 14.4 15.3 18.4 17.5 47.4 40.3 Energy BCI Cleaning & Sports & Other Q1-Q4 2015 Q1-Q4 2016 Industry Maintenance Leisure Industries Other Applications Construction & Infrastructure Industrial Applications Exel Composites Plc 8
Lower demand from some key customers in Europe and in Asia Europe 59.6 63.9 APAC 11.3 Rest of the world 13.7 2.2 2.6 2016 (EUR) million 2015 (EUR) million Exel Composites Plc 9
Adjusted operating profit in Q3 and Q4 2016 at the same level or higher than previous year Adjusted operating profit and adjusted operating profit margin 4 20% 3 2 10% 1 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 Adjusted operating profit, MEUR Adjusted operating profit margin, % Operating profit target, % Exel Composites Plc 10
Return on capital employed 30% 60 20% 40 10% 20 0% 0 2013 2014 2015 2016 Capital employed, MEUR ROCE, % Exel Composites Plc 11
Earnings per share 0.48 0.26 0.24 0.17 1) 0.02 2012 2013 2014 2015 2016 1) The downsizing of the underperforming Australian unit resulted in one-off expenses of EUR 1.5 million and costs related to the acquisition of the Chinese composites production company of EUR 0.5 million were recorded in the group accounts. Exel Composites Plc 12
Share price development 2016 Share quotations 2016 Market capitalization on Price/earnings 2012-2016: 31.12.2016: Highest: EUR 6.85 31.12.2016: 301.35 31.12.2015: 27.32 EUR 59.7 (77.7) million Lowest: EUR 4.71 31.12.2014: 17.50 Average: EUR 5.05 31.12.2013: 22.21 31.12.2012: 34.57 On 31.12. 2016: EUR 5.02 Source: Kauppalehti Exel Composites Plc 13
Major shareholders on 31 December 2016 Number of Percentage of shares share capital Skandinaviska Enskilda Banken AB (nominee registered) 2,330,295 19.6 Nordea Bank Finland Plc (nominee registered) 1,727,641 14.5 Nordea Fennia Fund 605,508 5.1 OP-Finland Small Firms Fund 498,259 4.2 Försäkringsaktiebolaget Pensions-Alandia 476,559 4.0 Danske Invest Finnish Small Cap Fund 374,219 3.1 Fondita Nordic Micro Cap 350,000 2.9 Ilmarinen Mutual Pension Insurance Company 342,733 2.9 OP-Delta Fund 300,000 2.5 Matti Suutarinen 266,662 2.2 Exel Composites had a total of 3,034 (2,987) shareholders on 31 December 2016. Exel Composites Plc 14
Exel Composites continues well positioned for profitable growth • Focused sales efforts on growing customer Protect and grow industries our stronghold customers Providing • Optimization of production competitive edge and best and efficient capacity customer service utilization • Acquisition of Chinese composites production company; closing expected in Q1 2017 • Attractive long-term market fundamentals prevail Exel Composites Plc 15
Next level growth is based on four initiatives Accelerate Penetrate new Create true Growth in new growth in China applications global footprint technologies Local sales network Increase sales Solutions for larger Further processing Value offering for coverage growth applications and vertical Package key Grow supply and mid-segment integration R&D and New composite applications to service to new ‘systems’ manufacturing market areas, technologies, other capacity including Americas than pultrusion Exel Composites Plc 16
Outlook for full year 2017 • Exel Composites estimates that revenue with current company structure (i.e. without the Chinese company acquisition) will increase from previous year level and adjusted operating profit will be higher than previous year level. In 2016, Exel Composites’ revenue was EUR 73.1 million and adjusted operating profit was EUR 2.6 million. Exel Composites Plc 17
Your IR contacts Riku Kytömäki Mikko Kettunen Noora Koikkalainen President and CEO CFO IR Manager +358 50 511 8288 +358 50 3477 462 +358 50 562 6552 riku.kytomaki@exelcomposites.com mikko.kettunen@exelcomposites.com noora.koikkalainen@exelcomposites.com www.exelcomposites.com Exel Composites Plc 18
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