10/30/2020 | Press release | Distributed by Public on 10/30/2020 01:00
EXEL COMPOSITES PLC STOCK EXCHANGE RELEASE 30 OCTOBER 2020 at 09:00 EET
Exel Composites expects revenue in 2020 to increase or to remain at previous year's level, and adjusted operating profit in 2020 to increase compared to 2019.
Exel Composites withdrew its guidance on 6 May 2020 as a consequence of increased uncertainty and poor short-term predictability due to the Covid-19 pandemic. Prior to withdrawing the guidance and according to the guidance published in February 2020, Exel Composites expected revenue and adjusted operating profit to increase in 2020 compared to 2019.
In the third quarter of 2020, we were able to increase our revenue and operating profit despite the impacts of the continued Covid-19 pandemic on the global business environment. A few customers requested to postpone deliveries of current orders, which impacts timings of revenues and profits. The underlying demand across all customer industries has, however, slightly improved. Order intake in the quarter landed below last year mainly due to a partial cancellation of a large order in the United States, that was booked in the first quarter of 2020.
Revenue increased compared to the previous year in Wind power and Defense customer industries and especially in the Asia-Pacific region. Revenue in the Buildings and infrastructure as well as the Transportation customer industries declined mainly due to Covid-19 related lower demand mostly in Europe.
Operating profit in the third quarter increased compared to the same period last year. Despite revenue growth on Group level, profitability was negatively impacted by the uneven distribution of revenues across business units. Together with effects of the Covid-19 pandemic, this impaired production efficiency and profitability, especially in the business unit in the United States.
The construction project of the new manufacturing facility in Austria progressed as planned and we reached roof height in the third quarter. At the same time, we have tightened Covid-19 related safety measures across the Group and continue to monitor the situation very closely.
This year we are celebrating Exel's 60th anniversary. Despite the challenging circumstances in 2020, we have been able to execute our strategy successfully. The anniversary is also a good time to reflect on who we are and where we are headed as company, our purpose and vision.
In the long-term, global megatrends, sustainability and total life cycle approach, further increase composite demand. We firmly believe in the benefits of composites and use our expertise to solve challenges making solutions that are lighter, stronger, stiffer, longer and reaching higher. By using composites, we also save resources. This is why we exist. We want Exel to be the first choice for sustainable composite solutions globally.
|% of revenue||7.8||6.2||8.2||5.2||4.9|
|Adjusted operating profit 1)||2,022||1,663||21.6||6,976||5,859||19.1||7,160|
|% of revenue||7.8||7.0||8.6||7.6||6.9|
|Profit before tax||1,348||1,488||-9.4||5,616||3,608||55.7||3,885|
|% of revenue||5.2||6.3||6.9||4.7||3.7|
|Profit for the period||1,072||847||26.5||4,270||2,033||110.0||2,397|
|% of revenue||4.1||3.6||5.3||2.6||2.3|
|Cash and cash equivalents||11,156||5,741||94.3||11,156||5,741||94.3||6,930|
|Net interest-bearing liabilities||32,557||31,752||2.5||32,557||31,752||2.5||30,234|
|Return on equity, %||15.8||13.3||18.6||21.1||10.5||101.6||9.2|
|Return on capital employed, %||11.8||9.3||27.0||13.4||9.0||49.4||8.6|
|Equity ratio, %||29.1||30.9||-5.6||29.1||30.9||-5.6||30.9|
|Net gearing, %||117.7||122.1||-3.6||117.7||122.1||-3.6||114.9|
|Net cash flow from operating activities||1,143||1,725||-33.7||9,332||5,527||68.8||9,030|
|Net cash flow from investing activities||-4,745||-1,882||152.1||-9,572||-4,200||127.9||-6,087|
|% of revenue||17.0||10.2||11.9||6.3||6.0|
|Research and development costs||570||644||-11.4||2,018||2,152||-6.2||2,851|
|% of revenue||2.2||2.7||2.5||2.8||2.7|
|Earnings per share, diluted and undiluted, EUR||0.09||0.07||26.4||0.36||0.17||109.9||0.20|
|Equity per share, EUR||2.34||2.20||6.23||2.34||2.20||6.25||2.23|
|Average share price, EUR||5.36||4.22||27.0||5.36||4.22||27.0||4.54|
|Average number of shares, diluted and undiluted, 1,000 shares||11,830||11,820||0.1||11,827||11,820||0.1||11,820|
|Employees, end of period||656||647||1.4||656||647||1.4||648|
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.
|Buildings and infrastructure||4,907||5,831||-15.8||16,404||17,710||-7.4||23,502|
|Equipment and other industries||4,272||3,813||12.0||14,414||14,496||-0.6||18,644|
|Machinery and electrical||3,252||2,786||16.7||11,821||10,463||13.0||14,384|
|Rest of the world||1,472||642||129.4||3,084||1,168||164.1||1,701|
* Revenue by customer location, not by the location of the manufacturing Exel Composites business unit.
In the third quarter of 2020, and despite the continued uncertainty caused by the Covid-19 pandemic, the impact on Exel Composites' operations was limited. All our factories operated close to normal within the limits of the implemented safety measures.
Raw material supply and logistics operated normally in the third quarter.
Order intake in the third quarter suffered from Covid-19 related uncertainty and cautiousness among our customers. A few customers requested to postpone deliveries of current orders, which impacts timings of revenues and profits. Underlying demand across all customer industries has, however, slightly improved. Order intake in the quarter landed below last year mainly due to a partial cancellation of a large order in the United States, that was booked in the first quarter of 2020.
The Group's liquidity and cash situation are good, and the Covid-19 pandemic has had limited impact, if any, on Group liquidity. The Group has existing committed credit limits to secure financing of all foreseen investments in 2020 and provide for a comfortable liquidity buffer for any unforeseen negative events.
The main risk in the impairment testing continues to be related to the expected profitability turnaround of the business unit in the United States. Whereas as the first half of 2020 was strong, in the third quarter the profitability of the business unit in the United States deteriorated. We expect this to be short-term, and volumes and profitability of the business unit in the United States to recover. The company will conduct the impairment testing according to the normal schedule in the fourth quarter of 2020.
During the third quarter of 2020, Exel Composites received Covid-19 related financial assistance under local governmental schemes in Great Britain, Austria, China and Australia.
The health and safety of our employees, customers and business partners is a priority for Exel Composites. In order to ensure safety and business continuity during the Covid-19 pandemic, the Group Management Team and local management continue to hold regular online meetings to review the latest developments, actions and best practices in all functions and countries of operation. All units have continued with tightened Group and business unit level safety and hygiene instructions in accordance with the instructions of local health authorities. Travelling is limited and remote work as well as online meetings continue to be preferred when possible. Outsider visits to sites are reduced to minimum. Continuous internal communication at Group level as well as locally on Covid-19 related concerns has been emphasized and implemented through a variety of channels.
Close and continuous interaction is maintained with customers, suppliers and business partners in order to ensure timely reaction to new developments. Given the continued uncertainty related to the Covid-19 pandemic, close monitoring of the situation is a priority for us.
Exel Composites will hold a financial results briefing regarding the Business Review January-September 2020 on Friday 30 October 2020 at 12:30 EET. Participation requires registration in advance.
Vantaa, 30 October 2020
Exel Composites Plc
Board of Directors
For further information, please contact:
Riku Kytömäki, President and CEO
tel. +358 50 511 8288
Mikko Kettunen, CFO
tel. +358 50 347 7462
Nasdaq Helsinki Ltd
Main news media
Exel Composites in brief
At Exel Composites, we use over 60 years' experience to solve challenges and help customers save resources. Our forward-thinking composite solutions made with continuous manufacturing technologies serve customers in a wide range of industries around the world. You can find our products used in applications from wind power and transportation to building and infrastructure.
Our collaborative approach and global footprint set us apart from our competition. We use our expertise to help customers reduce weight, improve performance and energy efficiency and decrease total lifetime costs. We want to be the first choice for sustainable composite solutions globally.
Headquartered in Finland, Exel Composites employs approximately 650 forward-thinking professionals around the world and is listed on Nasdaq Helsinki. To find out more about our offering and company please visit www.exelcomposites.com.