Exel Composites Oyj — Earnings Release 2021

Feb 15, 2022

Correction: Exel Composites’ Financial Statements Release Q1-Q4 2021

Correction: Exel Composites’ Financial Statements Release Q1-Q4 2021

EXEL COMPOSITES PLC    FINANCIAL STATEMENTS RELEASE    15 FEBRUARY 2022 at
16:50 EET

This is a correction to the Finnish language version of the Financial Statements
Release Q1-Q4 2021, published today at 9:00 EET. The record date of the first
dividend installment date was incorrect. The correct record date is 8 September
2022. The Financial Statements Release in English was correct.

Below the release in English as a whole:

Exel Composites’ Financial Statements Release Q1-Q4 2021: Revenue increased
significantly, profitability declined

Q4 2021 in brief

· Order intake decreased by 8.8% to EUR 30.5 million (Q4 2020: 33.4).
· Revenue increased by 32.7% to EUR 36.5 million (27.5).
· Operating profit decreased to EUR 0.6 million (2.7), which is 1.8% of
revenue (9.9).
· Adjusted operating profit decreased to EUR 1.0 million (2.7), which is 2.8%
of revenue (9.9).
· Earnings per share amounted to EUR 0.04 (0.09).

Q1-Q4 2021 in brief

· Order intake increased by 21.8% to EUR 140.6 million (Q1-Q4 2020: 115.4).
· Revenue increased by 23.7% to EUR 134.4 million (108.6).
· Operating profit decreased to EUR 3.7 million (9.4), which is 2.8% of
revenue (8.7).
· Adjusted operating profit decreased to EUR 6.0 million (9.7), which is 4.5%
of revenue (8.9).
· Earnings per share amounted to 0.14 (0.45).

Dividend proposal

The Board proposes to the Annual General Meeting that a dividend of EUR 0.20 per
share be paid based on the adopted financial statements for the financial year
ended on 31 December 2021. The Board proposes that the dividend be paid in two
installments.

Guidance for the full year 2022

Exel Composites expects that revenue in 2022 will be at last year’s level and
adjusted operating profit will increase compared to 2021.

President and CEO, Riku Kytömäki

The year 2021 was two-fold for Exel. Whereas revenue and order intake increased
significantly, adjusted operating profit declined compared to the previous year.

Despite strong growth, Group profitability declined due to the poor financial
performance of Exel USA in the second half of the year. The lowered
profitability was due to the ramp-up of a specific carbon fiber Wind Power
product, produced in high volumes in our factory in the United States.
Challenges related especially to the recruitment, learning curve and employee
turnover, impacted also by the Covid-19 pandemic. Due to the poor performance,
we made an impairment of EUR 1.8 million in the third quarter related to the
unit’s intangible assets. In the fourth quarter, the Group profitability already
improved from the previous quarter, as expected, but was nevertheless below the
same period in the previous year.

Revenue increased significantly in 2021 across all our customer industries apart
from Transport, where revenue was flattish compared to 2020. Supported
particularly by the strong growth of the conductor core application, the
Buildings and Infrastructure customer industry bypassed Wind Power as our
largest customer industry in 2021. The growth ratio in Defense was the highest
of our customer industries, where camouflage net support poles continued to
drive growth. Telecommunication applications such as antenna radomes also made a
positive contribution to Group revenue after low volumes in the past few years.
Geographically, revenue grew across all our key regions during the year and
growth was particularly strong in Europe and North America.

The Covid-19 pandemic continued to cause some uncertainty in the global business
environment, but overall demand for our solutions recovered across our customer
industries. Our factories operated almost without disruptions throughout the
year despite pandemic related challenges in raw material availability. Material
and logistics costs increased throughout 2021 and we continue to adjust our
sales prices to offset the increase in costs.

During the year, we made good progress executing our growth strategy. The joint
venture with Kineco Group, established in October, is an important steppingstone
for us to enter the fast-growing Indian composites market. While the joint
venture is still in its early phases, the collaboration has started well, and we
see good growth potential and opportunities in the market. In the new
manufacturing facility in Austria production started smoothly and as planned in
the beginning of the year. The increased production capacity will respond to the
long-term demand in Central Europe. The new state-of-art facility uses more
production automation to ensure, for example, improved resin mixing accuracy.
The new facility is noteworthy also from a sustainability point of view: energy
efficiency, emissions, waste management as well as health and safety issues,
have been widely considered already throughout the design phase. The site has an
energy efficiency rating of A+.

Sustainability has an increasingly strategic role in Exel’s business, and it is
our vision to be the first choice for sustainable composite solutions globally.
Our key contribution to sustainability is to help our customers to save
resources. Properties such as lightness, energy efficiency, durability and the
need for less maintenance and replacement make composites environmentally
friendly. Increasing sustainability focus also increases the demand for
composites. In 2021, our sustainability work concentrated on further developing
the fundaments of the Group sustainability, and this work continues in 2022.

A warm thank you to all Exel employees for the hard work and to our customers
and other stakeholders for the continued cooperation and trust in the past year!

Consolidated key figures

                                Q4      Q4  Change    Q1-Q4    Q1-Q4  Change

EUR thousand 2021 2020 % 2021 2020 %

Revenue 36,493 27,508 32.7 134,365 108,595 23.7
Operating profit 649 2,732 -76.2 3,744 9,417 -60.2
% of revenue 1.8 9.9 2.8 8.7
Adjusted operating profit 1) 1,004 2,732 -63.2 6,029 9,708 -37.9
% of revenue 2.8 9.9 4.5 8.9
Profit before tax 713 1,507 -52.7 4,165 7,124 -41.5
% of revenue 2.0 5.5 3.1 6.6
Profit for the period 455 1,098 -58.6 1,693 5,368 -68.5
% of revenue 1.2 4.0 1.3 4.9

Shareholders' equity 31,182 28,880 8.0 31,182 28,880 8.0
Interest-bearing liabilities 52,988 43,140 22.8 52,988 43,140 22.8
Cash and cash equivalents 15,593 11,974 30.2 15,593 11,974 30.2
Net interest-bearing 37,395 31,167 20.0 37,395 31,167 20.0
liabilities
Capital employed 84,170 72,021 16.9 84,170 72,021 16.9
Return on equity, % 5.6 15.5 -64.1 5.5 19.5 -71.7
Return on capital employed, % 3.2 15.4 -79.1 4.8 14.1 -65.8
Equity ratio, % 26.8 30.2 -11.2 26.8 30.2 -11.2
Net gearing, % 119.9 107.9 11.1 119.9 107.9 11.1

Net cash flow from operating 4,916 4,674 5.2 6,275 14,006 -55.2
activities
Net cash flow from investing -3,032 -3,277 -7.5 -11,877 -12,849 -7.6
activities
Capital expenditure 3,378 3,321 1.7 9,931 13,220 -24.9
% of revenue 9.3 12.1 7.4 12.2
Research and development costs 793 866 -8.5 3,310 2,884 14.8
% of revenue 2.2 3.1 2.5 2.7

Order intake 2) 30,492 33,445 -8.8 140,557 115,373 21.8
Order backlog 41,578 36,544 13.8 41,578 36,544 13.8

Earnings per share, diluted 0.04 0.09 -58.6 0.14 0.45 -68.5
and undiluted, EUR
Equity per share, EUR 2.58 2.44 5.83 2.58 2.44 5.82

Average share price, EUR 7.33 6.51 12.6 8.58 5.55 54.6
Average number of shares, 11,834 11,830 0.0 11,833 11,827 0.0
diluted and undiluted, 1,000
shares

Employees, average 750 674 11.4 715 665 7.5
Employees, end of period 753 674 11.7 753 674 11.7

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.
2) Includes order cancellations during the quarter.

Revenue by customer industry

                                Q4      Q4  Change    Q1-Q4    Q1-Q4  Change

EUR thousand 2021 2020 % 2021 2020 %
Buildings and infrastructure 8,409 7,047 19.3 32,946 23,451 40.5
Equipment and other industries 7,126 5,079 40.3 23,350 19,493 19.8
Wind power 8,309 6,582 26.2 32,066 28,079 14.2
Machinery and electrical 4,944 3,700 33.6 17,612 15,522 13.5
Transportation 2,888 1,857 55.5 10,224 10,224 0.0
Defense 2,469 1,406 75.7 8,688 5,338 62.7
Telecommunications 2,348 1,837 27.9 9,480 6,488 46.1
Total 36,493 27,508 32.7 134,365 108,595 23.7

Revenue by region[1)]

                   Q4      Q4  Change    Q1-Q4    Q1-Q4  Change

EUR thousand 2021 2020 % 2021 2020 %
Europe 19,182 17,031 12.6 73,413 62,757 17.0
North America 10,242 3,328 207.7 32,440 18,022 80.0
Asia-Pacific 6,238 6,438 -3.1 25,413 24,022 5.8
Rest of the world 831 711 16.9 3,099 3,795 -18.3
Total 36,493 27,508 32.7 134,365 108,595 23.7

1) Revenue by customer location, not by the location of the manufacturing Exel
Composites business unit.

Impacts of the Covid-19 pandemic in 2021

Operations

In 2021, all our factories operated close to normal and following most of the
previous safety measures implemented to prevent the spread of the Covid-19
pandemic.

Despite the continued challenges with global logistics and availability in many
raw material categories, operations continued almost normally.

The health and safety of our employees, customers and business partners are a
priority for Exel Composites. All units continued with tightened Group and
business unit level safety and hygiene instructions in accordance with the
instructions of local health authorities. Remote work and online meetings were
preferred and outsider visits to sites were reduced to minimum. Internal
communication on Covid-19 related concerns continued in various channels.

We continue to monitor the situation closely and maintain a continuous
interaction and dialogue with our customers, suppliers, and business partners to
ensure timely reaction.

Financial standing

Despite some uncertainty among our customers, underlying demand across all
customer industries improved during the financial year compared to the previous
year.

The Group’s liquidity and cash situation during the year was good, and the Covid
-19 pandemic has had limited impact on Group liquidity.

Exel conducted an impairment testing in the second half of 2021. The testing
resulted in an impairment in the intangible assets of EUR 1.8 million related to
the business unit in the United States.

During 2021, Exel Composites received no Covid-19 related financial assistance
under any local governmental schemes, whereas in 2020 approximately EUR 0.8
million were received.

Financial reporting and Annual General Meeting 2022

Exel Composites publishes the following financial reports in 2022:

· Financial Statements Release 2021: 15 February 2022
· Business Review January-March: 29 April 2022
· Half-year Financial Report January-June: 20 July 2022
· Business Review January-September: 3 November 2022

The Annual Financial Report, Corporate Governance Statement and Remuneration
Report for 2021 will be available on 4 March 2022 at the company’s website
www.exelcomposites.com.

The Annual General Meeting will be held on 25 March 2022 at 9:30 EET in Exel
Composites’ premises at Mäkituvantie 5, 01510 Vantaa, Finland. Shareholders of
the company may participate in the meeting and exercise their shareholders’
rights only through a proxy representative and by submitting counterproposals
and questions in advance. Proxy representatives must see to the voting in
advance on behalf of shareholders.

After the Annual General Meeting, on 25 March 2022 at 10:00 EET, Exel Composites
will hold an online event for shareholders, where the resolutions made at the
General Meeting and the review by the President and CEO will be presented.
Instructions to register to this event are presented in the notice to Exel
Composites’ Annual General Meeting under Section C item 5 and at the company’s
website www.exelcomposites.com.

Financial results briefing

Exel Composites will hold a financial results briefing regarding the Q1-Q4 2021
Financial Statements Review on 15 February 2022 at 12:30 EET. Participation has
required registration in advance.

Vantaa, 15 February 2022

Exel Composites Plc
Board of Directors

For further information, please contact:
Riku Kytömäki, President and CEO
tel. +358 50 511 8288
riku.kytomaki@exelcomposites.com

Mikko Kettunen, CFO
tel. +358 50 347 7462
mikko.kettunen@exelcomposites.com

Distribution
Nasdaq Helsinki Ltd
Main news media
www.exelcomposites.com

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 700 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.

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