Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

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Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO 30 October 2008

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Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO. 30 October 2008. Q1-Q3/2008 and Q3/2008 highlights. Interim Report Q3/2008. Q1-Q3/2008 highlights. - PowerPoint PPT Presentation

Transcript of Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Page 1: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Interim Report Q3/2008

Exel OyjVesa Korpimies, President and CEO

30 October 2008

Page 2: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Q1-Q3/2008 and Q3/2008 highlights

Page 3: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Q1-Q3/2008 highlights

• The restructuring of the Group has been completed to a large extent and we concentrate

on developing our core business Exel Composites.

• The effects of the restructuring can be seen in the profit and cash flow development in Q3

2008.

• However, we are not satisfied with the current profitability and continue to focus on

improving the operating margins and to drive more efficient use of working capital.

• As disclosed in the second quarter interim report Exel expects the Group’s profit before

taxes for the full year to be negative. Due to the present challenging market conditions, the

fourth quarter profit before taxes could also be negative.

Interim Report Q3/2008

Page 4: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Financial performance

Page 5: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Q3/2008 financial performanceProfit of the Group improved

• Net sales EUR 23.9 (27.9) million

• Operating profit EUR 2.5 (-2.1) million including EUR 0.2 (-4.2) million

non-recurring items

• Operating profit margin improved to 10.4% (-7.4%) of net sales

• Fully diluted earnings per share EUR 0.07 (-0.19)

• Cash flow from business operations EUR +4.5 (-0.7) million

Interim Report Q3/2008

Effects of the restructuring can be seen in the Q3 profit development

Page 6: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Q3/2008 financial performance

• Return on equity 19.2% (-35.3%)

• Return on capital employed 12.0% (-17.0%)

• Equity ratio 26.8% (28.8%)

• Net gearing in Q3 2008 144.3% vs. 138.1% in Q3 2007, but better than in Q2

2008 (178.4%)

• EPS EUR 0.07 (-0.19)

• Equity per share EUR 1.54 (2.00)

Interim Report Q3/2008

Page 7: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Q3/2008

21.4

1.7

7.8

465

Net sales, M€

Operating profit, M€

as % of sales

Average no. of personnel

Q3/2007

25.3

2.6

10.1

500

change, %

-15.2

-35.1

-7.0

2007

104.3

15.2

14.6

500

Key figures of Exel Composites

Interim Report Q3/2008

Q1-Q3/2008

66.1

6.3

9.6

486

Q1-Q3/2007

79.5

11.3

14.2

502

change, %

-16.9

-44.0

-3.2

Page 8: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

• Net sales in Q3 decreased by 15.2% to EUR 21.4 (25.3) million from the corresponding period previous year

• Main reasons:

• Procurement model change in the wind energy segment

• Divestment of Plastics business in Germany

• Sales to Exel Sports Brands declined during Q1-Q3

• Weaker market conditions in transportation and building and construction

• On the other hand, sales in new energy applications and telecommunication segment were strong

Interim Report Q3/2008

Exel CompositesNet sales development

Page 9: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Exel CompositesOperating profit development

• Operating profit in Q3 totaled EUR 1.7 million (EUR 2.6 million including EUR -0.7 million non-recurring items)

• Operating profit in January-September declined to EUR 6.3 (11.3) million including EUR -1.1 (-0.7) million of non-recurring items

• Major reasons behind the decrease were:

• Lower sales

• Increased energy and raw material costs

• A credit loss provision of EUR 0.3 million was made due to a customer insolvency

Interim Report Q3/2008

Page 10: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Net sales, M€

Operating profit, M€

as % of sales

Average no. of personnel

Q3/2008

2.8

0.7

25.1

20

Q3/2007

3.8

-5.2

-135.4

48

change, %

-26.5

113.6

-58.3

2007

13.6

-10.7

-78.1

49

Key figures of Exel Sports Brands

Interim Report Q3/2008

Q1-Q3/2008

8.4

-8.2

-98.2

38

Q1-Q3/2007

9.7

-7.6

-78.7

49

change, %

-13.8

-7.6

-22.4

Page 11: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

• Net sales in Q3 decreased by 26.5% to EUR 2.8 (3.8) million from the corresponding period previous year

• Starting from June 1, 2008, Exel Sports Oy consist only of floorball products

• Exel concentrates on reinforcing and streamlining the floorball business and improving its profitability

• Operating profit in Q3 was EUR 0.7 million including EUR +0.2 million of non-recurring items (EUR -5.2 million including EUR -3.5 million non-recurring items)

Interim Report Q3/2008

Exel Sports BrandsNet sales and operating profit development

Page 12: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Exel Sports BrandsStreamlining continued during Q3/2008

• Streamlining was implemented to a large extent

• Divestment of the China-based Nordic Sports Products (Beijing) Co., Ltd. to ESB Sports Oy in September 2008

• Exel Sports Oy also no longer imports Björn Däehlie skiing textiles, Lars Kjus alpine skiing textiles, Tubbs snowshoes and Swany gloves

• Co-determination process started to finalize the restructuring in Q4 2008

Interim Report Q3/2008

Page 13: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

M€

Exel Composites

Exel Sports Brands

Intra Group sales

Total

Q3/2008

21.4

2.8

-0.3

23.9

Q3/2007

25.3

3.8

-1.2

27.9

change, %

-15.2

-26.5

-14.3

2007

104.3

13.6

-4.4

113.5

Group net sales

Interim Report Q3/2008

Q1-Q3/2008

66.1

8.4

-1.6

72.8

The figures in the table are rounded and may not sum up.

Q1-Q3/2007

79.5

9.7

-3.8

85.4

change, %

-16.9

-13.8

-14.7

Page 14: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Group operating profitProfit of the Group improved in Q3/2008 compared to Q2/2008 and Q3/2007

M€

Exel Composites

Exel Sports Brands

Total

Q3/2008

1.7

0.7

2.5

Q3/2007

2.6

-5.2

-2.1

change, %

-35.1

113.6

2007

15.2

-10.7

4.8

Interim Report Q3/2008

Q1-Q3/2008

6.3

-8.2

-1.8

Page 15: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Balance sheet, cash flow and financingInterest-bearing liabilities decreased from MEUR 37.8 to MEUR 32.5Positive cash flow

• Consolidated total assets were EUR 68.1 (82.7) million at the end of reporting period

• Equity was EUR 18.3 (23.8) million and equity ratio 26.8 (28.8) per cent.

• Decrease in current assets due to the divestment of Exel Sports Brands’ Outdoor business and a rationalization project aiming at more efficient use of operating working capital

Interim Report Q3/2008

• Interest-bearing liabilities stood at EUR 32.5 (37.8) million

• Cash flow from business operations in Q1-Q3 was EUR +4.9 (-2.9) million

• Liquid assets were EUR 6.1 (5.0) million

Page 16: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Net gearing and equity ratioNet gearing decreased down compared to Q2/2008 (144.3% vs. 178.4%)

Net gearing ratio Q3/2008 144.3% (Q3/2007 138.1%)

Equity ratio Q3/2008 26.8% (Q3/2007 28.8%)

Interim Report Q3/2008

Exel’s target is to further decrease net gearing ratio below 100%

Page 17: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Outlook

Page 18: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Outlook

• Pultrusion market is affected by the worldwide business slow-down

• Weakened demand has been observed especially in the building and construction and transportation segments

• Increased price competition and higher energy and raw-material costs are all putting pressure on profitability

• The Group has a sharp focus on its core business, namely Exel Composites

• New applications are constantly being developed to capture growth opportunities within the advanced composites industry

• A cost reduction program has been reinforced to restore profitability to satisfactory levels

Interim Report Q3/2008

Page 19: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Outlook

Interim Report Q3/2008

• As disclosed in the second quarter interim report Exel expects the Group’s profit before taxes for the full year to be negative.

• Due to the present challenging market conditions, the fourth quarter profit before taxes could also be negative.

Page 20: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Appendix: Exel share

Page 21: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Major Shareholders (1 October 2008)

Nordstjernan AB

Ilmarinen Mutual Pension Insurance Company

Berling Capital Oy

OP-Suomi Small Cap Inv. Fund

Veikko Laine Oy

Varma Mutual Pension Insurance

Company

Ulkomarkkinat Oy

Alfred Berg Finland Inv. Fund

Fondita Nordic Small Cap Inv. Fund

Suutarinen Matti

SEB (nominee registered)

Number of shares

3,496,506

689,400

412,000

380,900

378,800

363,600

346,600

343,225

330,000

294,400

233,169

Percentage of share

capital

29.39

5.79

3.46

3.20

3.18

3.05

2.91

2.88

2.77

2.47

1.95

Interim Report Q3/2008

The ownerships of the major shareholders remained the same during Q3/2008

Page 22: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Exel share

1/2007 - 10/2008

Interim Report Q3/2008

6.9% (35.5%) of shares outstanding were traded in Jan-Sep 2008

The highest share quotation was EUR 12.20 (17.45) and the lowest EUR 6.53 (12.50)

The share price closed at EUR 6.93 (15.30) and the market capitalization at the end of the review period was EUR 82.4 (182.0) million

Page 23: Interim Report Q3/2008 Exel Oyj Vesa Korpimies, President and CEO

Consolidated key figures

Interim Report Q3/2008

EUR million

Net sales

Operating profit

% of net sales

Profit before taxes

Profit for the period

Shareholders’ equity

Net interest-bearing liabilities

Capital employed

ROE, %

ROCE, %

Equity ratio, %

Net gearing, %

EPS, €

EPS, fully diluted, €

Equity per share, €

Q3/2007

27.9

-2.1

-7.4

-2,9

-2.2

23.8

32.8

61.1

-35.3

-17.0

28.8

138.1

-0.19

-0.19

2.00

Q1-Q3/2008

72.8

-1.8

-2.5

-4.0

-2.8

18.3

26.4

50.8

-18.0

-6.8

26.8

144.3

-0.24

-0.24

1.54

2007

113.5

4.8

4.2

2.4

2.0

23.5

27.9

56.3

8.4

7.3

31.3

118.4

0.17

0.17

1.98

change, %

-14.3

219.9

138.9

138.5

-23.1

-19.7

-16.9

Q3/2008

23.9

2.5

10.4

1.1

0.9

18.3

26.4

50.8

19.2

12.0

26.8

144.3

0.07

0.07

1.54

Q1-Q3/2007

85.4

4.1

4.8

2.7

2.0

23.8

32.8

61.1

11.3

8.9

28.8

138.1

0.17

0.17

2.00

change, %

-14.7

143.8

245.1

238.1

-23.1

-19.7

-16.9