Exel Composites Oyj · OMXHEX:EXEL
Exel Composites Oyj — Q2 2014 Earnings Presentation
33 slides from Exel Composites Oyj's earnings presentation, Jul 24, 2014
Slide 1: Exel Composites – Reinforcing Your Business
Exel Composites – Reinforcing Your Business Riku Kytömäki, President and CEO 24 July 2014
Slide 2: World's leading composite profile manufacturer with over 50 years of history
Exel Composites is world’s leading composite profile manufacturer with over 50 years of growth and innovation history World’s leading composite profile manufacturer established in 1960 Technology company which designs, manufactures and markets composite solutions for industrial applications — Annual
Slide 3: Global business with customers in 50+ countries and operations in 7
Exel Composites business is global with customers in more than 50 countries and operations in 7 countries -3-
Slide 4: World's second largest pultrusion company
Exel Composites is the world’s second largest pultrusion company Global pultrusion market leaders in 2012 7.8 % 7.4% Strongwell Exel Composites 5.5 % Werner Company Glasforms 3.6% Tecton 3.2% Bedford Reinforcement 2.7% Creative Pultrusion 60.6% 2.7% Teel Plastics 2.6% JAMCO 2.3% Top Glass 1.7% Other
Slide 5: Composite products' unique features and benefits
Composite products’ unique features and benefits can be utilized in various demanding applications Low weight High strength-to-weight ratio High fatigue tolerance Good corrosion and chemical resistance Tailored material properties — Fire retardation — Thermal insulation — Radio transparency — Electr
Slide 6: Products for a wide range of applications
Exel Composites offers products for wide range of applications. Exel Composites is the world’s leading composite profiles manufacturer TUBES TOOLHANDLES AND TELESCOPES Exel is the world’s largest manufacturer of Exel’s series of toolhandles and thin-walled pull-wound tubes and hollow telescopic pole
Slide 7: Proprietary, internally developed composite technology
Exel Composites’ core of the operations is based on proprietary, internally developed composite technology 1. Reinforcements 2. Cross-winding units 3. Resin Injection Mould 4. Pulling Device 5. Cutting Device Principle drawing of Exel Composites pullwinding process -7-
Slide 8: Innovations from combining customer and Exel know-how
Innovations are created through combining customer’s and Exel Composites’ core know-how -8-
Slide 9: Advanced solutions in several applications and market segments
Exel Composites’ advanced solutions are utilized in several applications and market segments Different raw materials combined with technology and composites know-how are creating a platform for multi-application business Examples of typical applications within following main industry segments: • Tra
Slide 10: Transportation segment is a large user of composites
Exel Composites’ products can be found in various applications, for example transportation segment is a large user of composites Transportation segment is a large user of composites — High surface quality for increasingly light weight trams and busses — High specification stiffeners for automotive a
Slide 11: Q2 2014
Q2 2014 Exel Composites Plc Riku Kytömäki, President and CEO 24 July 2014
Slide 12: Q2 Highlights – Market demand has shown signs of resuming growth
Q2 Highlights – Market demand has shown signs of resuming growth Market demand has shown signs of resuming growth leading to higher sales and order backlog Net sales, MEUR Order backlog, MEUR — Net sales increased by 22.1% — Order intake increased by 12.5% to 18,6 17,8 21.4 (19.0) MEUR 17,1 17,1 — O
Slide 13: Key figures Q2 2014
Key figures Q2 2014 – Net sales increased by 22.1%, operating profit almost doubled to MEUR 3.1 and EPS increased by 90.0% MEUR Q2 2014 Q2 2013 Change-% Net sales 21.4 17.5 22.1% Operating profit 3.1 1.6 89.7% Operating profit, % 14.3 9.2 Net cash flow from operating activities 2.4 1.9 26.3% Order b
Slide 14: Key figures January – June 2014
Key figures January – June 2014 MEUR H1 2014 H1 2013 Change-% Net sales 39.2 34.4 13.9% Operating profit 4.9 2.3 117.2% Operating profit, % 12.6 6.6 Net cash flow from operating activities 3.1 2.6 19.2% Order backlog 14.3 13.1 21.3% Order intake 43.1 37.4 15.5% Return on capital employed, % 26.8 12.
Slide 15: Order intake and net sales increased
Order intake increased by 12.5% and order backlog to MEUR 14.1 (13.1) in Q2 2014 Net sales increased to MEUR 21.4 (17.5) — Demand increased in telecommunication, transportation and building, construction and infrastructure markets — Demand decreased in sports & leisure markets Order intake increased
Slide 16: Sales growth from Industrial and Other applications
Sales growth comes from Industrial and Other applications in Q2 2014 Sales of Industrial applications Net sales by customer industry, increased to MEUR 13.2 from MEUR MEUR 10.2 in Q2 2013 3,8 Sales of Industrial applications 3,6 4,4 increased especially to the 3,9 telecommunication and transportatio
Slide 17: European market growth drove increase in net sales
European market growth drove increase in net sales, partly offset by the decline in APAC region Europe +17% 32.3 27.6 APAC Rest of world -4% 5.3 +14% 1.6 5.5 1.4 HI/2014 (MEUR) HI/2013 (MEUR) Europe APAC Rest of world Recovery in demand for The increase was mainly Growth in transportation telecommun
Slide 18: Demand in some markets is picking up
Demand in some markets is picking up in challenging market environment Market Demand Increased demand with new Transportation industry applications Building, Construction & Infrastructure Recovery in demand Energy industry Telecommunication industry Mid-term growth potential Paper industry Electrica
Slide 19: Operating profit nearly doubled to MEUR 3.1
Operating profit nearly doubled to MEUR 3.1 (1.6). Operating profit margin improved to 14.3% Q2 2014 operating profit improved to MEUR 3.1 (1.6) Operating profit margin was 14.3% (9.2%) of net sales Improvement was mainly due to increased sales, efficiency improvement and better cost control 4 20% 2
Slide 20: Q2 2014 operating profit development
In Q2 2014 operating profit continued to develop positively due to increased sales, continued efficiency improvement and better cost control Q2 2014 Q2 2013 Change- MEUR MEUR % MEUR % % Net sales 21.4 100 17.5 100 22.1% Materials and services -8.3 38.7 -6.5 36.8 -28.4% Employee expenses -5.6 26.3 -5
Slide 21: H1 2014 cost development favorable compared to sales
In H1 2014 cost development was favorable compared to the sales MEUR H1 2014 H1 2013 Change- MEUR % MEUR % % Net sales 39.2 100 34.4 100 13.9% Materials and services -14.3 36.4 -12.9 37.4 -10.7% Employee expenses -11.0 28.1 -10.8 31.2 -2.5% Depreciation and impairment -1.3 3.4 -1.4 3.9 2.9% Other op
Slide 22: Net cash flow increased to MEUR +2.4
Net cash flow increased to MEUR +2.4 (+1.9) due to improved operating profit In Q2 2014 net cash flow from operating activities was positive at MEUR +2.4 (+1.9) due to improved operating profit Capital expenditure was MEUR 0.5 (0.7) 6 4 MEUR 2.4 1.9 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 23: Quarter on quarter comparison of cash flow items
Quarter on quarter comparison of cash flow items MEUR Q2 2014 Q2 2013 Change Profit for the period 2.2 1.1 1.1 Adjustments 1.6 0.9 0.7 Change in working capital -0.8 0.1 -0.9 Cash flow from operations 3.0 2.2 0.8 Interests and taxes paid/received -0.6 -0.4 -0.2 Net cash flow from operating activitie
Slide 24: H1 2014 comparison of cash flow items
H1 2014 Comparison of cash flow items MEUR H1 2014 H1 2013 Change Profit for the period 3.3 1.7 1.6 Adjustments 3.3 1.8 1.5 Change in working capital -2.3 -0.3 -2.0 Cash flow from operations 4.4 3.2 1.1 Interests and taxes paid/received -1.2 -0.6 -0.5 Net cash flow from operating activities 3.1 2.6
Slide 25: Strong balance sheet; net gearing reduced to 5.7%
Strong balance sheet to allow for potential investments and acquisitions. Net gearing reduced down to 5.7% 70 % 60 % 50.0% 50 % 40 % 30 % 20 % 10 % 5.7% 0% -10 % 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, % - 25 -
Slide 26: ROCE improved to 26.8%
ROCE improved to 26.8%, due to increased operating profit. Q2 2014 ROCE was 32.2% 30 % 60 26.8% Capital employed, MEUR 20 % 40 ROCE-% ROCE 10 % 20 0% 0 2010 2011 2012 2013 H1/2014 Capital employed, MEUR ROCE, % - 26 -
Slide 27: Earnings per share increased to EUR 0.19
Earnings per share increased to EUR 0.19 per share Quarterly EPS 0,30 0.19 0,20 0.14 0,10 EUR 0,00 -0,10 *) -0,20 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 - 27 - * Q4 2012 EPS was negative due to impairment of MEUR 2.5
Slide 28: Share price development
Share price development – In H1 the highest share quotation was EUR 6.35 (6.50) and the lowest EUR 5.56 (5.10) 38.5 (5.2) % of shares outstanding were traded Exel Composites share price development in Jan – June 2014 January 2010 – July 2014 In Q2 the highest share quotation was EUR 6.35 (6.50) and
Slide 29: Major Shareholders on 30 June 2014
Major Shareholders on 30 June 2014 Number of Percentage of shares share capital Skandinaviska Enskilda Banken AB (nominee reg.) 2,475,098 20.80 Nordea Bank Finland Plc (nominee reg.) 678,588 5.70 Nordea Fennia Fund 608,094 5.11 OP-Finland Small Firms Fund 589,551 4.96 Danske Fund Finnish Small Cap 5
Slide 30: Exel Composites is revisiting the strategy
Exel Composites is revisiting the strategy. New strategy will target boosting profitable growth in the future 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 project
Slide 31: Risks and uncertainties
Risks and uncertainties 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 the Australian market may require further corrective actions which
Slide 32: Near-term outlook
Near-term outlook – the company is well-positioned when the markets recover 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 C
Slide 33: More information is available on Exel Composites website
More information is available on Exel Composites website Exel Composites website: www.exelcomposites.com For further information contact Riku Kytömäki Ilkka Silvanto President and CEO CFO +358 50 511 8288 +358 50 598 9553 riku.kytomaki@exelcomposites.com ilkka.silvanto@exelcomposites.com Q3 2014 res