Exel Composites - Profitability above estimates
Exel’s Q1 report showed the company is making progress in the US as the unit was back to black. Exel’s adjusted operating margin was considerably above our estimate even though there were certain other factors, namely product mix and higher variable costs, which negatively affected profit.
- Q1 revenue grew by 10.3% y/y and landed at EUR 34.2m, compared to the EUR 37.1m/33.9m Evli/consensus estimates. Growth stemmed from Europe and North America. The virus situation in China led to a revenue decline in the Asia-Pacific region.
- Wind power amounted to EUR 6.8m, compared to our EUR 8.3m estimate, while Buildings and infrastructure was EUR 7.7m vs our EUR 8.5m estimate. Equipment and other industries came in at EUR 7.4m vs our EUR 7.1m estimate.
- Adjusted EBIT was EUR 2.2m vs the EUR 1.7m/1.4m Evli/consensus estimates. The US unit no longer had a negative impact as employee turnover has decreased and production yield has improved. Product mix as well as higher raw material, energy and logistics costs had a negative impact on profitability, but Exel continues to adjust sales prices to catch up with costs.
- Order intake amounted to EUR 37.6m, down by 10.5% y/y.
- The war has not so far limited raw material availability from Exel’s perspective.
- Exel guides revenue in 2022 to be at last year’s level and adjusted operating profit to increase compared to 2021 (unchanged).