Q1 2014 Exel Composites Plc Riku Kytmki, President and CEO 7 May - - PowerPoint PPT Presentation

▶
q1 2014
SMART_READER_LITE
LIVE PREVIEW

Q1 2014 Exel Composites Plc Riku Kytmki, President and CEO 7 May - - PowerPoint PPT Presentation

May 15, 2023 303 likes •517 views

Q1 2014 Exel Composites Plc Riku Kytmki, President and CEO 7 May 2014 Q1 2014 Q1 2014 Q1 Highlights Market demand has shown signs of resuming growth Market demand has shown signs of resuming growth leading to higher Net sales,

slide-1
SLIDE 1

Q1 2014

Exel Composites Plc

Riku Kytömäki, President and CEO 7 May 2014

slide-2
SLIDE 2
  • 2 -

Q1 2014 Q1 2014  Market demand has shown signs of

resuming growth leading to higher sales and order backlog

— Net sales increased by 5.4% — Order backlog improved to 14.3 MEUR

(11.8 MEUR)

— Order backlog improved by 36%

compared to 10.5 MEUR at the end of 2013  Operating profit almost tripled to

MEUR 1.9 due to higher sales, efficiency improvement, lower material spend and better cost control

— Operating profit increased by 184%

 Net cash flow from operating

activities was positive at +0.6 MEUR (+0.7 MEUR) due to improved

  • perating profit . However, working

capital increased in the review period

Q1 Highlights – Market demand has shown signs of resuming growth

1,5 0,7 0,6 1,9 1,9 0,3 2,3 4,4 2,9 2012 2013 Q1/2014

Net cash flow, MEUR

14,5 11,8 14,3 Q1/2012 Q1/2013 Q1/2014

Order backlog, MEUR

1,8 0,7 1,9 1,8 1,6 1,4 1,5 0,9 1,5 2012 2013 Q1/2014

Operating profit, MEUR

20,5 16,9 17,8 19,8 17,5 17,1 17,1 18,6 17,8 2012 2013 Q1/2014

Net sales, MEUR

slide-3
SLIDE 3
  • 3 -

Q1 2014 Q1 2014

Key figures Q1 2014 – Net sales increased by 5.4%, operating profit almost tripled to MEUR 1.9 and EPS increased by 80%

MEUR Q1 2014 Q1 2013 Change-% Net sales 17.8 16.9 5.4% Operating profit 1.9 0.7 183.8% Operating profit, % 10.6 3.9 Net cash flow from operating activities 0.6 0.7

  • 7.3%

Order backlog 14.3 11.8 21.3% Order intake 21.8 18.4 18.5% Return on capital employed, % 21.1 7.1 Net gearing, % 14.1

  • 4.0

EPS, EUR 0.09 0.05 80.0%

slide-4
SLIDE 4
  • 4 -

Q1 2014 Q1 2014

Net sales increased to MEUR 17.8 (16.9)

— Demand increased in cleaning & maintenance, machine industry and general

industry markets

— Demand decreased in electrical industry and sports & leisure markets

Order intake increased by 18.5% to EUR 21.8 (19.4)

Order backlog increased to MEUR 14.3 (11.8). The order backlog improved by 36% from MEUR 10.5 in the last quarter of 2013

Order intake increased by 18.5% and order backlog to MEUR 14.3 (11.8)

16,9 17,8 5 10 15 20 25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 MEUR Net sales Order backlog

slide-5
SLIDE 5
  • 5 -

Q1 2014 Q1 2014  Sales of Industrial applications

increased to MEUR 9.8 from MEUR 9.5 in Q1 2013

 Sales of Industrial applications

increased especially in the machine industry, transportation and energy industry markets

 Sales of Construction and

Infrastructure applications decreased by 4.7% in Q1 2014

— One-off project recorded in the first

quarter of 2013  Sales of Other applications increased

by 28% in Q1 2014

Sales growth comes from Industrial and Other applications

Note: Customer industries include the following markets: Construction and infrastructure = Building, Construction & Infrastructure, Energy industry Industrial applications = Telecommunication, Paper, Electrical, Machine, and Transportation industries Other applications = Cleaning & Maintenance, Sports & Leisure Industry, General Industries

9,5 9,8 4,3 4,1 3,0 3,9 Q1 2013 Q1 2014

Net sales by customer industry, MEUR

Other applications Construction and infrastructure Industrial applications

slide-6
SLIDE 6
  • 6 -

Q1 2014 Q1 2014

European market growth drove increase in net sales, partly offset by the decline in APAC region

Q1/2014 (MEUR) Q1/2013 (MEUR)

Europe Rest of world APAC

13,5 15,1

Europe

+13%

2,8 1,8

APAC

  • 31%

0,7 0,7

Rest of world

2.4%

The decline was mainly related to the Australian market , partly due to a

  • ne-off project recorded in

the first quarter of 2013 Recovery in demand for construction and infrastructure and certain industrial applications Growth in transportation industry applications Growth was offset by decline in infrastructure and sporting goods customers

slide-7
SLIDE 7
  • 7 -

Q1 2014 Q1 2014

Market Demand Transportation industry Increased demand with new applications Building, Construction & Infrastructure Recovery in demand Energy industry Telecommunication industry Mid-term growth potential Paper industry Electrical industry Increase in network investments Cleaning & Maintenance Sports & Leisure Decrease in private consumption Machine industry Lightness and stiffness are becoming increasingly important General industry New materials are taking bigger role in many different application

Demand in some markets is picking up in challenging market environment

slide-8
SLIDE 8
  • 8 -

Q1 2014 Q1 2014

Q1 2014 operating profit improved to MEUR 1.9 (0.7)

Operating profit margin was 10.6% (3.9%) of net sales

Improvement was mainly due to higher sales, efficiency improvement, lower material spend, and better cost control

Operating profit nearly tripled to MEUR 1.9 (0.7). Operating profit margin reached 10.6%

  • 10%

0% 10% 20%

  • 2

2 4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 MEUR Operating profit, MEUR Operating profit margin, % Operating profit target, %

slide-9
SLIDE 9
  • 9 -

Q1 2014 Q1 2014

Cost development has been favorable compared to the sales

MEUR Q1 2014 Q1 2013 Change-% Net sales 17.8 16.9 5.4% Materials and services

  • 6.0
  • 6.4

7.1% Employee expenses

  • 5.4
  • 5.3
  • 1.6%

Depreciation and impairment

  • 0.7
  • 0.7

1.5% Other operating expenses

  • 4.1
  • 4.0
  • 2.7%

Other operating income 0.2 0.2 22.7% Operating profit 1.9 0.7 183.8 Operating profit margin, % 10.6% 3.9% Earnings per share 0.09 0.05 80.0%

slide-10
SLIDE 10
  • 10 -

Q1 2014 Q1 2014

In Q1 2014 net cash flow from operating activities was positive at MEUR +0.6 (+0.7) due to improved operating profit

Capital expenditure was MEUR 0.7 (0.6)

Net cash flow again positive

0,7 0,6 2 4 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 MEUR

slide-11
SLIDE 11
  • 11 -

Q1 2014 Q1 2014

Quarter on quarter comparison of cash flow items

MEUR Q1 2014 Q1 2013 Change Profit for the period 1.1 0.6 0.6 Adjustments 1.6 0.8 0.8 Change in working capital

  • 1.5
  • 0.4

1.1 Cash flow from operations 1.2 1.0 0.3 Interests and taxes paid/received

  • 0.6
  • 0.3
  • 0.3

Net cash flow from operating activities 0.6 0.7

  • 0.1

Capital Expenditure 0.7 0.6 0.0 Change in financing 0.2

  • 0.9

1.1 Dividends paid 0.0 0.0 0.0 Change in liquid funds 0.2

  • 0.8

1.0 Liquid funds 9.6 8.5 1.2

slide-12
SLIDE 12
  • 12 -

Q1 2014 Q1 2014

Strong balance sheet to allow for potential investments and

  • acquisitions. Net gearing remains low at 14.1%

14,1 % 47,5 %

  • 10 %

0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 Net gearing, % Equity ratio, %

slide-13
SLIDE 13
  • 13 -

Q1 2014 Q1 2014

ROCE improved to 21.1%, due to increased operating profit

21,1 % 20 40 60 0 % 10 % 20 % 30 % 2010 2011 2012 2013 Q1/2014 Capital employed, MEUR ROCE-% Capital employed, MEUR ROCE, %

slide-14
SLIDE 14
  • 14 -

Q1 2014 Q1 2014

Earnings per share increased to EUR 0.09 per share

0,05 0,09

  • 0,20
  • 0,10
  • 0,10

0,20 0,30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2013 2014 EUR

Quarterly EPS * Q4 2012 EPS was negative due to impairment of MEUR 2.5

*)

slide-15
SLIDE 15
  • 15 -

Q1 2014 Q1 2014 Exel Composites share price development January 2010 – May 2014 14.3 (1.7) % of shares

  • utstanding were traded

in Jan – March 2014 In Q1 the highest share quotation was EUR 6.28 (6.50) and the lowest EUR 5.56 (5.70) Market capitalization on 31 March 2014 was EUR 68.8 (69.0) million

Source: Kauppalehti

Share price development – In Q1 the highest share quotation was EUR 6.28 (6.50) and the lowest EUR 5.56 (5.70)

Price/earnings 31.12.2013: 22.2 31.12.2012: 34.6 31.12.2011: 11.5 31.12.2010: 12.4

slide-16
SLIDE 16
  • 16 -

Q1 2014 Q1 2014 Number of shares Percentage of share capital

Skandinaviska Enskilda Banken AB (nominee reg.) 2,172,877 18.26 Nordstjernan AB 1,656,506 13.92 Ilmarinen Mutual Pension Insurance Company 639,400 5.37 OP-Finland Small Firms Fund 589,551 4.96 Fondita Nordic Micro Cap 450,000 3.78 Veikko Laine Oy 395,796 3.32 Nordea Fennia Fund 378,094 3.18 Alfred Berg Finland Investment Fund 346,814 3.07 Suutarinen Matti 291,400 2.45 Danske Fund Finnish Small Cap 281,567 2.37

Exel Composites had a total of 2,712 (2,795) shareholders on 31 March 2014.

Major Shareholders on 30 April 2014

slide-17
SLIDE 17
  • 17 -

Q1 2014 Q1 2014

Exel Composites is revisiting the strategy

— New strategy will target boosting profitable growth in the future — Strategy is expected to be disclosed in H2 2014

Strategic improvement projects are being continued

— In 2014 focus in on improving production speed and yield — Advanced laminates production is in the ramp up phase at Mäntyharju unit

Special attention will be given to occupational health and safety issues

— Nanjing unit achieved the Health and Safety standard ISO 18001 in 2013 — Target is to roll out this certification over all sites

Exel Composites is revisiting the strategy. New strategy will target boosting profitable growth in the future

slide-18
SLIDE 18
  • 18 -

Q1 2014 Q1 2014

The most significant near-term business risks are related to the general economic development, government regulations and financial crisis in the Euro area as well as to market demand

Continuing low demand in certain markets or regions may require further corrective actions which can have an impact on the profitability

The possible uncertainties in the Russian market will have limited impact on Exel Composites

Raw material prices, energy cost and other cost increases may continue to put pressure on profitability

The possible new European Community’s anti-dumping tariffs on Chinese glass fiber may have a negative effect on the result in terms of increased raw material prices

Currency rate changes, price competition and alternative competing materials may also have a negative effect on the result

The availability and cost of financing may continue to have an effect on the demand and increase the risk of credit losses

Risks and uncertainties

slide-19
SLIDE 19
  • 19 -

Q1 2014 Q1 2014

The market has stabilized but remains challenging

Uncertainties relating to general growth prospects in the economy continue

Some positive signs can be seen especially in the laminate and demanding carbon tubes markets

The Company invests in growth by reinforcing the organization, especially in sales and operations development

The Company will monitor the general market development and react with additional measures if needed

The Company is well-positioned to grow profitably when the markets recover

Near-term outlook – the company is well-positioned when the markets recover

slide-20
SLIDE 20
  • 20 -

Q1 2014 Q1 2014

Exel Composites website: www.exelcomposites.com

For further information contact

Q2 2014 results will be published on 24 July 2014

More information is available on Exel Composites website

Riku Kytömäki President and CEO +358 50 511 8288 riku.kytomaki@exelcomposites.com Ilkka Silvanto CFO +358 50 598 9553 ilkka.silvanto@exelcomposites.com