Q4 2016 OPERATING PROFIT AT PREVIOUS YEARS LEVEL DESPITE LOWER - - PowerPoint PPT Presentation

Exel Composites Plc

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 2

• 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

2016 in brief

Exel Composites Plc 3

17.8 21.5 17.9 21.4 21.4 19.7 19.0 18.0 16.4 21.1 19.3 19.0

Q1-Q4 2014 Q1-Q4 2015 Q1-Q4 2016

Revenue, EUR million

1.9 2.0 0.1 3.1 1.5 1.2 2.3 0.5 0.6 2.1 0.7 0.7

Q1-Q4 2014 Q1-Q4 2015 Q1-Q4 2016

Adjusted operating profit, EUR million

21.8 22.8 18.0 21.4 21.4 20.2 20.8 18.7 18.2 18.4 20.5 18.3

Q1-Q4 2014 Q1-Q4 2015 Q1-Q4 2016

Order intake, EUR million

0,6 0,7

• 0,9

2,4 1,7 0,3 3,8 0,5 2,5 3,8 0,5 1,2

Q1-Q4 2014 Q1-Q4 2015 Q1-Q4 2016

Net cash flow, EUR million

Q1-Q4 2016 highlights

Exel Composites Plc 4

EUR thousand 1.1.-31.12. 2016 1.1.-31.12. 2015 Change % 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

Key figures Q1-Q4 2016

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

EUR thousand 1.10.-31.12. 2016 1.10.-31.12. 2015 Change % 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

Key figures Q4 2016

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 6

Lower demand in key markets; new customers not enough to compensate

• Order backlog at a historically high level.

5 10 15 20 25 5 10 15 20 25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016

Revenue and order backlog

Revenue, EUR million Order backlog, EUR million, end of period

Exel Composites Plc 7

• 8,9 %
• 1,2 %
• 6,1 %
• 1,6 %

0,0 %

• 10,0 %
• 9,0 %
• 8,0 %
• 7,0 %
• 6,0 %
• 5,0 %
• 4,0 %
• 3,0 %
• 2,0 %
• 1,0 %

0,0 %

Volume Sales mix Exhange rates Acquisitions / divestments Total Revenue bridge 2016 vs. 2015

Less favorable sales mix reduced revenue

1) Volume impact calculated as difference in kilograms of delivered products

times prior year average sales price/kg.

1)

Exel Composites Plc 8

Lower demand impacted key markets such as telecommunications

11.2 11.3 4.5 4.2 3.7 3.6

Q4 2015 Q4 2016

Revenue by Customer Industry, EUR million

Other Applications Construction & Infrastructure Industrial Applications

Transportation Industry Telecommuni- cation Machine Industry Paper Industry Electrical Industry Cleaning & Maintenance Sports & Leisure Other Industries BCI Energy Industry

Construction & Infrastructure Other Applications Industrial Applications

47.4 40.3 18.4 17.5 14.4 15.3

Q1-Q4 2015 Q1-Q4 2016 Other Applications Construction & Infrastructure Industrial Applications

Exel Composites Plc 9

Lower demand from some key customers in Europe and in Asia

2016 (EUR) million 2015 (EUR) million

63.9 59.6 Europe 13.7 11.3 APAC 2.6 2.2 Rest of the world

Exel Composites Plc 10

Adjusted operating profit in Q3 and Q4 2016 at the same level or higher than previous year

0% 10% 20% 1 2 3 4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016

Adjusted operating profit and adjusted

• perating profit margin

Adjusted operating profit, MEUR Adjusted operating profit margin, % Operating profit target, %

Exel Composites Plc 11

20 40 60 0% 10% 20% 30% 2013 2014 2015 2016 Capital employed, MEUR ROCE, %

Return on capital employed

Exel Composites Plc 12

0.17 0.26 0.48 0.24 0.02 2012 2013 2014 2015 2016

Earnings per share

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.

1)

Exel Composites Plc 13

Share quotations 2016 Highest: EUR 6.85 Lowest: EUR 4.71 Average: EUR 5.05 On 31.12. 2016: EUR 5.02 Market capitalization on 31.12.2016: EUR 59.7 (77.7) million

Source: Kauppalehti

Share price development 2016

Price/earnings 2012-2016: 31.12.2016: 301.35 31.12.2015: 27.32 31.12.2014: 17.50 31.12.2013: 22.21 31.12.2012: 34.57

Exel Composites Plc 14

Number of shares Percentage of 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.

Major shareholders

• n 31 December 2016

Exel Composites Plc 15

• Focused sales efforts on

growing customer industries

• Optimization of production

and efficient capacity utilization

• Acquisition of Chinese

composites production company; closing expected in Q1 2017

• Attractive long-term market

fundamentals prevail

Exel Composites continues well positioned for profitable growth

Protect and grow

• ur stronghold

customers Providing competitive edge and best customer service

Exel Composites Plc 16

Next level growth is based on four initiatives

Accelerate growth in China

• Local sales network
• Value offering for

mid-segment

• R&D and

manufacturing capacity

Growth in new technologies

• Further processing

and vertical integration

• New composite

technologies, other than pultrusion

Penetrate new applications

• Solutions for larger

growth applications

• Package key

applications to ‘systems’

Create true global footprint

• Increase sales

coverage

• Grow supply and

service to new market areas, including Americas

Exel Composites Plc 17

• 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.

Outlook for full year 2017

Exel Composites Plc 18

Your IR contacts

Riku Kytömäki President and CEO +358 50 511 8288 riku.kytomaki@exelcomposites.com Mikko Kettunen CFO +358 50 3477 462 mikko.kettunen@exelcomposites.com Noora Koikkalainen IR Manager +358 50 562 6552 noora.koikkalainen@exelcomposites.com

www.exelcomposites.com

Exel Composites Plc

www.exelcomposites.com