Exel Composites Oyj — Interim / Quarterly Report 2021

Jul 20, 2021

Exel Composites' Half Year Financial Report Q1-Q2 2021: Continued strong order intake and revenue

Exel Composites' Half Year Financial Report Q1-Q2 2021: Continued strong order intake and revenue

EXEL COMPOSITES PLC    HALF YEAR FINANCIAL REPORT    20 JULY 2021 at 10:00 EET

Q2 2021 in brief

· Order intake increased by 89.8% to EUR 43.5 million (Q2 2020: 22.9).
· Revenue increased by 23.1% to EUR 33.5 million (27.2).
· Operating profit decreased to EUR 2.4 million (2.8), which is 7.0% of
revenue (10.3).
· Adjusted operating profit decreased to EUR 2.5 million (2.9), which is 7.3%
of revenue (10.6).
· Earnings per share amounted to EUR 0.13 (0.21).

Q1-Q2 2021 in brief

· Order intake increased by 48.9% to EUR 85.5 million (Q1-Q2 2020: 57.4).
· Revenue increased by 17.1% to EUR 64.5 million (55.0).
· Operating profit increased to EUR 4.8 million (4.7), which is 7.4% of
revenue (8.5).
· Adjusted operating profit decreased to EUR 4.9 million (5.0), which is 7.6%
of revenue (9.0).
· Earnings per share amounted to 0.29 (0.27).

Guidance for the full year 2021

Exel Composites expects revenue and adjusted operating profit in 2021 to
increase compared to 2020.

President and CEO, Riku Kytömäki

In the second quarter of 2021, order intake continued strong as market demand in
various customer industries increased. Along with another strong quarterly order
intake, revenue increased compared to the previous year. Adjusted operating
profit was, however, behind last year.

Revenue increased during the second quarter in almost all customer industries.
The conductor core application was driving the growth in Buildings and
Infrastructure. The key source of growth in Defense customer industry was the
camouflage net support pole application. In Equipment and other industries, we
saw a Covid-19 related rebound in the business volumes of a large number of
customers. In Wind power, the revenue in the second quarter was slightly lower
than last year. Our order backlog, however, indicates that the growth of Wind
Power will continue during the second half of the year.

From a geographical perspective, the revenue increase in North America and
Europe reflects the shipping locations of the above-mentioned growing
applications rather than the development of demand in the individual
geographical markets.

Despite the revenue increase, adjusted operating profit declined in the second
quarter compared to the previous year. The operating profit was negatively
impacted by low profit margins during the ramp-up of certain high-volume
products and increased raw material costs. We expect the profitability to
improve in the second half of the year both in terms of pricing as well as
production efficiency once the production is fully ramped up. Last year, the
second quarter was impacted by approximately EUR 0.3 million of Covid-19
pandemic related grants, which did not repeat this year.

In June 2021, the Board of Directors reconfirmed Exel’s strategy in its annual
strategy review. The main strategic focus areas as well as the company’s long
-term financial targets and dividend policy remained unchanged. We have
continued to make good progress in all focus areas with focus on strategic
growth initiatives and operational efficiency improvements particularly in
selected manufacturing units in the Group. One of the main targets in the
strategy work has been to further integrate sustainability in all Exel’s
operations and business. Sustainability is a key element in our vision and
purpose, which were updated at the end of last year. Our purpose is to solve
challenges and help customers save resources with composites, and our vision is
to be the first choice for sustainable composite solutions globally.

Customer activity and demand in the composites market has clearly increased. Our
performance in the first half of 2021 and the record-high order backlog provides
a good foundation for increasing revenue and improving profits during the rest
of the year.

Consolidated key figures

                 Q2      Q2  Change   Q1-Q2   Q1-Q2  Change    Q1-Q4

EUR thousand 2021 2020 % 2021 2020 % 2020

Revenue 33,524 27,239 23.1 64,478 55,044 17.1 108,595
Operating 2,363 2,792 -15.4 4,786 4,662 2.7 9,417
profit
% of revenue 7.0 10.3 7.4 8.5 8.7
Adjusted 2,457 2,882 -14.8 4,917 4,955 -0.8 9,708
operating
profit 1)
% of revenue 7.3 10.6 7.6 9.0 8.9
Profit before 1,897 2,953 -35.7 4,830 4,268 13.2 7,124
tax 2)
% of revenue 5.7 10.8 7.5 7.8 6.6
Profit for the 1,485 2,529 -41.3 3,447 3,198 7.8 5,368
period
% of revenue 4.4 9.3 5.3 5.8 4.9

Shareholders' 31,266 26,770 16.8 31,266 26,770 16.8 28,880
equity
Interest 47,483 42,196 12.5 47,483 42,196 12.5 43,140
-bearing
liabilities
Cash and cash 7,591 12,758 -40.5 7,591 12,758 -40.5 11,974
equivalents
Net interest 39,892 29,438 35.5 39,892 29,438 35.5 31,167
-bearing
liabilities
Capital 78,749 68,966 14.2 78,749 68,966 14.2 72,021
employed
Return on 19.5 39.5 -50.6 22.9 24.1 -4.9 19.5
equity, %
Return on 12.5 17.1 -26.7 12.7 14.2 -10.6 14.1
capital
employed, %
Equity ratio, % 29.9 28.3 5.7 29.9 28.3 5.7 30.2
Net gearing, % 127.6 110.0 16.0 127.6 110.0 16.0 107.9

Net cash flow -784 5,227 -115.0 627 8,188 -92.3 14,006
from operating
activities
Net cash flow -5,063 -3,251 55.7 -7,271 -4,827 50.6 -12,849
from investing
activities
Capital 2,577 3,346 -23.0 4,792 4,922 -2.6 13,220
expenditure
% of revenue 7.7 12.3 7.4 8.9 12.2
Research and 847 698 21.3 1,777 1,448 22.7 2,884
development
costs
% of revenue 2.5 2.6 2.8 2.6 2.7

Order intake 43,487 22,908 89.8 85,514 57,428 48.9 115,373
Order backlog 56,859 32,595 74.4 56,859 32,595 74.4 36,544

Earnings per 0.13 0.21 -41.3 0.29 0.27 7.7 0.45
share, diluted
and undiluted,
EUR
Equity per 2.64 2.26 16.78 2.64 2.26 16.74 2.44
share, EUR

Average share 9.11 5.17 76.2 9.11 5.17 76.2 5.55
price, EUR
Average number 11,834 11,830 0.0 11,832 11,826 0.1 11,828
of shares,
diluted and
undiluted,
1,000
shares

Employees, 700 662 5.7 695 662 5.0 665
average
Employees, end 722 661 9.2 722 661 9.2 674
of period

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) A significant part of the difference to previous year relates to unrealized
foreign exchange gains and losses, largely driven by intra-Group borrowings.

Revenue by customer industry

                    Q2      Q2  Change   Q1-Q2   Q1-Q2  Change    Q1-Q4

EUR thousand 2021 2020 % 2021 2020 % 2020
Buildings and 8,684 5,282 64.4 15,678 11,497 36.4 23,451
infrastructure
Equipment and 5,212 4,031 29.3 10,858 10,142 7.1 19,493
other industries
Wind power 7,785 7,867 -1.0 15,165 13,693 10.8 28,079
Machinery and 5,050 4,790 5.4 8,720 8,569 1.8 15,522
electrical
Transportation 2,728 2,796 -2.4 5,209 6,172 -15.6 10,226
Defense 1,785 768 132.6 4,029 2,019 99.6 5,338
Telecommunications 2,280 1,706 33.6 4,818 2,951 63.3 6,485
Total 33,524 27,239 23.1 64,478 55,044 17.1 108,595

Revenue by region[1)]

                   Q2      Q2  Change   Q1-Q2   Q1-Q2  Change    Q1-Q4

EUR thousand 2021 2020 % 2021 2020 % 2020
Europe 19,574 15,534 26.0 37,018 32,404 14.2 62,757
North America 7,234 4,391 64.8 12,845 10,210 25.8 18,022
Asia-Pacific 6,401 6,636 -3.5 13,054 10,818 20.7 24,022
Rest of the world 316 678 -53.5 1,561 1,612 -3.1 3,795
Total 33,524 27,239 23.1 64,478 55,044 17.1 108,595

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

Impacts of the Covid-19 pandemic

Operations

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

Raw material supply and logistics operated almost normally despite challenges
with global logistics and availability in some raw material categories.

Financial standing

Uncertainty and negative impact of the Covid-19-pandemic on some of our clients
and customer industries continued in the second quarter of 2021. Regardless,
order intake increased in the quarter.

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

During the second quarter of 2021, Exel Composites received no Covid-19 related
financial assistance under any local governmental schemes, whereas in the same
period last year approximately EUR 0.3 million were received.

Our response in relation to the Covid-19 pandemic

The health and safety of our employees, customers and business partners is a
priority for Exel Composites. 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. Internal communication at Group level as
well as locally on Covid-19 related concerns has continued in various 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.

Financial results briefing

Exel Composites will hold a financial results briefing regarding the Q1-Q2 2021
Half Year Financial Report on 20 July 2021 at 12:30 EET. Participation requires
registration in advance.

Vantaa, 20 July 2021

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 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.

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