Hello, everyone, and welcome to Exel's financial statements briefing 2025. My name is Lauri Haavisto, I'm the Investor Relations Director at Exel Composites.

Today, I'm joined, as always, by our CEO Paul Sohlberg and CFO Mikko Rummukainen. Just as a disclaimer first, the session is being recorded, and also we'll have a Q&A session at the end.

Paul, go ahead. The stage is yours.

Thank you, thank you, Lauri, and good afternoon to everybody, and welcome to our results presentation. We're going to look at Q4 that we finished and the full year as well, and I think we have some some nice news to to discuss or some nice updates for you to to discuss.

Here already on on high headline level, you can see that we did have quite a busy quarter, quarter, the fourth quarter, and and also a a good progress, year of progress in 2025. Now, Lauri, if you want to flip to the next page and we'll look at the executive summary, please.

As mentioned, Q4 capped a year of progress. You might have seen already that we have order intake which is up significantly in the fourth quarter, coming in at €78.7 million.

Of course, a lot of hard work went into that. It's, percentage-wise, a very nice increase there.

However, also on the full-year number, €168.6, almost €170 million, is a very good order intake, I'd say, and it shows the commitment of the team and the progress we are making on our strategy. It also did quite significantly bolster our order backlog, which is, of course, pleasing, coming in close at €100 million by the end of the year, and again, a significant increase compared to where we were a year ago.

We'll talk a little bit about the composition of this backlog, particularly the larger orders, I'll come back to that. On the revenue side, also some good news there.

We had an increase in the fourth quarter of 16% year-on-year, coming in at €29 million. We were quite busy with, of course, ramping up in India and also continuing our deliveries, particularly in the transport area in the engineered solutions business unit.

As a result, the adjusted operating profit also increased significantly, coming in at €0.9 million, a good increase compared to last year. We came in at €3.6 million for the full year, which is double to where we were a year ago.

I think the progress here is good. We will continue on this.

I think there is more potential, we'll come back to that as well in the guidance. All in all, I think I'm quite pleased with what the team has done, and I think we should be quite pleased with that.

Of course, we are not fully satisfied yet in the absolute terms of the numbers, and we'll keep working on that, but many good points to I think be happy and celebrate. If you look at the activities in the fourth quarter beyond being quite active with customers and capturing the market out there, what we also did was kind of we prepared for execution, particularly in this year, and preparing for growth.

We have been ramping up the 24/7 operations now where appropriate. That's very much in line with our strategy.

That goes, of course, hand in hand with having a good pipeline to work so that we can keep running the operations in 24/7 across actually the whole company. Focus also very much was on quality and delivery, as always, and now particularly with some of the transport customers in particular where we have kind of then worked with them to find deliveries in our factory network following the Belgium closure.

Then looking at India, and I'll come back when we talk about the business units in more detail, the ramp-up progressed well there, it kind of strengthens our global supply capability now in wind, and for the large wind customers in particular, we can supply them with both glass fiber products coming out of China, and then carbon fiber products coming out of the new India factory. I think one of the major highlights in the quarter definitely were the two multi-year, large customer agreements that we signed.

The first one of those we already talked about in the previous Q3 announcement. Lauri, if you want to flip the page, I'll speak to both of them a little bit now as well.

Yes, you remember that when we met for the Q3 announcement, we had the pleasure of announcing on the same day the first of these large, long-term orders, that was with De Angeli, one of our existing customers. Then a few days before Christmas, we announced another similar one with Tratos Cavi, another of our customers, particularly for the supply of composite cores for conductors.

I think we have been working on this for a while already. This is now I think coming a little bit to an inflection point in terms of the market demand out there.

I think these long-term commitments spanning 4 years and having very sizable, to us, very sizable minimum volume commitments in the total of €47 million, I think it's reflective of the overall market appetite and forthcoming adoption of the composite core-based conductors in the market. Particularly these deals, they definitely support the grid investment needs that we have in Europe.

If you look at, there's a picture of the conductor down to the left, what they do is that they help upgrade the capacity on existing lines. These are for overhead lines, they fit particularly well for brownfield upgrades.

What you can do is putting more current through them. They have a lower loss compared to traditional conductors.

They have less sag. You can use your existing corridors to upgrade, and you can also have longer spans in the existing corridors if you have the possibility of altering the towers there.

These will be manufactured using our continuous pultrusion process, which is a perfect fit, of course, for these long spoolable products that we're making. You can see them here, the black center part of the conductor to the left.

Of course, consistent quality for this type of very long products is absolutely key, wherefore the pultrusion process, which is continuous and has a very very good way of controlling the process and the quality, it fits very well for the product in question. It also fits our strategy and the direction we want to go in doing carbon fiber particularly, and then longer production runs for longer volumes and particularly in areas where there is a megatrend-driven demand for the product itself.

Then if we look at, why do we want to do these long-term contracts? I think they provide value across the whole value chain.

To customers, they give surety of deliveries from existing customers, prioritization, of course, in the factory network, in the supply. For us, they of course give multi-year visibility and benefits in production planning and working with our suppliers also to have good inbound planning of the supplies we need.

They of course give us very good planning and visibility into stable utilization and how to optimize that, and then of course the element of recurring revenues in our business. All of these combined are kind of the reasons why they fit so well with our strategy, and we want to keep inviting customers to, if it fits their model, to join us in these longer-term contracts because they provide these benefits for everybody.

Of course, also then at the end for us, they give us very good confidence in the future in terms of scaling and understanding when, if so, we need to scale up to meet increased demand. All in all, I think a very good start for what we are looking to have as our growth phase in the strategy.

With that, I'm going to head over to Mikko, please. Mikko going to talk a little bit about the numbers in detail, and then I'll come back to the BUs in a minute.

Mikko, go ahead, please.

Thanks, Paul. As Paul highlighted, finishing up '25, the quarter and the year, was a pleasurable moment.

Main highlights are the increase of order intake nearly tripling in Q4, looking at full-year order intake up over 60%. Both quarter and the full year are quite a nice increase from the last year.

I won't stop for too long, but if we take highlight of the key metrics at the bottom, and all three of them showing a third year of increase, so as order intake, revenue grew from last year, which grew from year '23, and then operating profit took a positive jump in '24, and adjusted operating profit more than doubled in '25 from '24 level. If we go into somewhat more detail on the next page, what is quite significant is the positive order backlog development.

It's also how these multi-year agreements shape our order book into a different form than what it's been before. Year-end order backlog that we had, €98.7 million, that doubled from previous quarter.

It's about almost 4 times as high as our order backlog was in 2023 on average. Now with the long-term contracts coming into place, this gives us better visibility into the next years.

It supports volume conversion for the future and steady, more forecastable performance. Good example of these are the two conductor core-related long-term agreements with €47 million minimum commitment, where we expect deliveries to take place over this period, and this will start in 2026.

On the customer industries, if we look at the development, the best news, energy demand increased. This relates to two factors: one is the conductor cores that were mentioned, and there's also good progress on the wind side.

Then transportation, we had good activity across multiple customers. Then within our category of other industries, also good demand increase in defense-related applications.

Finally, from the numbers perspective, year '25 was positive from delivering higher profitability, more efficient operations, and clearly making a step-up from how year '24 was. If we look at how the quarter was on the adjusted operating profit, €0.9 million positive versus last year of €0.2 million, we did take some actions to optimize our footprint, higher utilization supported efficiency and execution, so that creates the positive difference.

Then looking at the operating profit, including all the adjustments, going up from last year by over €5 million, and we finished at €2.2 million positive unadjusted operating profit. This would be highlight on the group level, and Paul, if you take over for the BUs.

Thanks, Mikko. Starting with the Engineered Solutions business unit, as you remember, this is kind of the larger part, the traditional part of Exel.

In the quarter, what we saw there obviously were, of course, these wins in the energy customer industry, these larger contracts. Then also, we saw a favorable, good development of demand, both from a market outlook perspective, and also in the revenue numbers in the quarter.

We came in at roughly €23 million, which is a 9% and so increase year-on-year. What was good is that towards the end of the year, the demand in Europe also started to solidify.

It was not an easy year for Europe last year, but it started to look a little bit better towards the end of the year, which we then also saw in our business on the whole, particularly in the ESBU. We also saw as a result, then, that the factory utilizations, as we had planned, they started increasing, and exactly as we had been expecting and in line with our plans, we were able to start moving more of the lines into 24/7 mode also in ESBU now that we have a solid backlog and some better visibility, let's say, to the forthcoming period as well in terms of having labor and workforce for the lines.

As mentioned, the activity was, on top of the energy, it was good and solid in transportation, buildings and infrastructure as well. Then, maybe for obvious reasons, also demand in the defense area, not a specific customer industry for us, but in that area, we saw quite a lot of activity and direct demand also for our products, particularly the camouflage poles and the camouflage supporting structures.

I think looking at both Q4 and the full year last year, there was quite a lot of uptick in activity in that space. Looking forward, what are the main charge and mandate for the ESBU, so, of course, is now to continue capturing that fairly good-looking customer activity out there in the market, and then also focusing on converting the order backlog well to deliveries, maintaining, of course, reliability and surety of supply and the quality there.

When things start getting more busy, of course, then we also need to make sure that things come out on time and they come with good quality. I think the mandate and the charge is quite clear for ESBU, and they are working away on that in a good manner.

Lauri, would you like to switch, please? Yes.

Getting over to the Industrial Solutions business side, we already mentioned that we saw some quite favorable development in the delivery of the ramp-up there. The revenue, while it's still, for us, of course, it's meaningful numbers, but absolute-wise, not huge numbers, but the percentage-wise increase year-on-year is substantial, almost 50%.

The revenue for the quarter came in at €6.1 million compared to €4.1 million. You can also see the full-year number, which is seeing the same jump there.

If you look at the activity or the main areas of activity there, switching from Q3 to Q4, what we did, we came from the final end of the qualification phase into then more regular production and shipping the carbon fiber spar caps out of the India factory, and that's going well. I want to kind of thank the whole team that's been working there, it's been a very well-handled ramp-up, and we have hit some of the production targets and the quality and yield numbers there early, which makes us very, very happy, because, of course, that's where the money is made.

Then, as you remember, we're working on other customers for India. We had good progress there as well.

The audits continued, which are part of that qualification process, and also preparation for the actual trial runs. We're working closely with the customer, and of course, we follow the customer schedule here, but as soon as we have more news on this, I'm going to be happy to share that we are progressing into perhaps then next stages of the qualification and eventually into commercial production as well.

Outside of the India ramp-up activities, if you think about the established operations, they were stable in the area. There was continued good progress in both energy and transportation.

To be specific, what I mean then is the activities in China, where we are also seeing demand developing favorably. There's also quite a solid path to, I would say, the possibility of growth in that space, and we're happy to see that, and we want to capture that activity there is in the market while we also put a lot of focus on ramping up the India volumes.

I'd say that the full focus for the business area or the business unit is to, of course, make sure the India volumes, they ramp up, but then ensure that delivery performance across the whole business, because we are seeing activity from customers and more interest, and we're getting orders as well, we want to kind of hit that on the right note from the beginning, if you will, and get all the deliveries coming on time and with good quality now when we are ramping up and have more on our plate there as well. I think all in all, like I said, very pleased with the progress, not fully satisfied yet where we are in all of the numbers for the company, but fully confident that this year is going to be a good year for us, and we have a very clear plan on what we're going to do in the year.

I want to come to the guidance in a second, but before that, let's just talk about something that we also announced today. It's more on a chores side, but of course an important one as well, and let's talk about it.

The board of directors are proposing to the Annual General Meeting that we would do a reverse split of the Exel share, basically to improve the trading and the price formation. The way I look at this is that we are going towards our growth phase.

We have good opportunities and good promise in front of us, and we want to make sure that we are as attractive and marketable and investable as a company moving forward, and that includes all types of investors, also perhaps those that are outside of Finland and who have specific mandates, and want to make sure that we fit in the maximum amount of investment mandates. What we're proposing here is a reverse split of 15 to 1, basically one existing or 15 existing shares would be converted into one share.

This is kind of a technical change which will happen in the background, basically there's no shareholder action or impact needed. It's handled automatically in the book-entry system if it is approved by the AGM.

There would be no change to the share capital or equity or in any other way as well, except just for a mathematical adjustment that we might need to issue a small amount of shares at no cost just to avoid the fractional shares. Basically holdings between 1 and 14 would be, or any number that holds a holding between 1 and 14, would be rounded up to one full share so that we have no fractions of the shares.

I think, of course, this is now the subject of conversation, and hopefully decision at the AGM, I'll leave it at that. Just wanted to update you on this news that we had put out today as well.

With that, Lauri, let's go to the guidance, please. Yes, thank you.

Looking forward to this year, what we expect is that both revenue and adjusted operating profit will increase significantly in this year compared to 2026. We expect that a stronger contribution, there will be contribution of course throughout the year, but a stronger contribution of this will be happening in the second half of the year.

This is based on the timing of order backlog conversion, and then also particularly the customer call-off and their project schedules as to how they start calling off orders, for example, under these larger frame agreements, but then also in some other parts of the backlog where there are maybe bigger commitments which are maybe not only monthly deliveries, but rather they come in trenches during the year. That's, of course, I think good news for everybody, and we are excited about what lies ahead in this year for us.

I also want to mention the dividend proposal, which obviously was in the documentation today. In line with the capital allocation now into the business and to growing and solidifying that, the board is proposing that no dividend would be paid for 2025 based on the financial statements for the financial year that ended at the end of last year, and that's similar to the year before.

Of course, this is also up for discussion and then hopefully decision at the AGM, I will leave it at that. I think, Lauri, it is over to you then to take the questions and maybe update us on the calendar, go ahead, please.

Yeah. A quick update, nothing has changed, I hope to see you all at the AGM next month.

Our next results release, the business review, is going out in May, and first time in Wednesday, instead of Thursday and Friday. Annual report, of course, is going out 3 weeks prior to the AGM.

Now, it's time for your questions. If you want to ask a question, please use the raise hand function, and I see Valtteri already with his hand up.

Go ahead, Valtteri.

Hey. Thank you for the presentation.

I'll start with the guidance. What does the 'significant' word mean in there, in both sales and profitability?

I'll let Mikko continue on that as well, but Valtteri, and thanks for the question, by the way. We follow a specific bracket which is based on these adjectives, whether it's increase or increase significantly.

I don't think that we have published the actual threshold data behind it. Mikko, maybe you want to just confirm that for us.

Yes, it's been a long-standing framework we handle, but we've not given numerical exact answer.

All right, yeah, fair enough. How much of the order book would you say is expected to be delivered this year?

Can you say that?

Again, Mikko, have we commented on the annual portion of the backlog? Valtteri, by the way, thank you for the question, because I think we're in a position where you can ask this question from us, so.

Obviously, we know the number. Mikko, you need to advise me if we have shared them before.

Nope.

To do justice to your question, Valtteri, what I can say is that if you look at the order intake without the larger agreements, which are, of course, over 4 years, you can see that we have had quite a favorable order intake development in last year as well, we're coming into the 120 or so mark without these larger commitments. That's a meaningful, let's use the word meaningful increase to where we have been before.

I'd say that and the majority of that business typically for us is a recurring business that we kind of turn around and put into our system. Sometimes we have had 3, 4 months of backlog.

Now, if you look at how much that addition is, then, maybe we've added a few months of that backlog into that year just on the basis of numbers. I hope that helps a little bit.

Then, of course, on top, the share, whatever that will be eventually from the customers of the larger orders.

Fair enough. Thank you.

Then still a few questions. How about the wind power segment?

Any update on that? Has that outlook improved, declined, or stayed the same from your perspective?

There twofold two-folder. What we see particularly is what we've seen basically all of last year, and we've talked about this a couple of times, there are the ones that are doing well, and they are doing increasingly well.

If you just look at the, the big turbine manufacturers, how their own backlogs are developing, and, their own projections are developing, and I think that still holds true. The winners in that segment have been ramping up, and they have been, it's it's been going better for even better for them.

Then I think that if I look at the all, overall activity in the wind segment, and I then discount the whole conversation in US and I just look at the bigger picture, I think there has been a significant energization in that whole segment, at least from our point of view, compared to a couple of years back when when it was quite slow there. That, that's to me, that's driven by two things.

The market, or the whole industry, is kind of recovering and doing a little bit better. Then I think we have also focused quite a lot on on that, it's only fair to expect that we are seeing more of the biz or the the buzz in that area now that we have been putting a lot of effort for for a couple of previous years years there.

I feel quite good about about that, Valtteri.

Great. Thank you.

Then you mentioned that you are ramping up 24/7 operations where appropriate. Can you kind of elaborate where that is actually appropriate and where it is not?

In terms of geographic footprint, I might not want to do that, but the appropriateness comes particularly from do we have the visibility in terms of the customer demand that if and where we do the arrangements to go into 24/7 in these, let's say, the western factories, and this was particularly for the ISBU factories by definition should be 24/7, but in Europe particularly, is then the customer demand we're seeing and/or the existing backlog. It might vary a little bit based on location where certain products are being done if we are seeing that there is a demand for that.

To be more specific, some of the lines, for example, in Finland, we have had the pleasure of transitioning into 24/7 quickly now as we are seeing more backlog and demand. The same goes elsewhere, but it doesn't necessarily mean that the whole factory yet is in 24/7.

The appropriateness comes from the demand we're seeing towards that production capacity.

Thank you. The last one maybe, how has the activity in the defense sector developed during this quarter, and are you planning on introducing new products in the segment this year?

It's been very active. There's been a lot of inquiries.

We're seeing an uptick, of course, in inquiries for our existing offering there. We've also been able to secure quite a lot of additional, incremental orders, for example, just the camouflage poles.

We're also seeing tenders being out for existing products in that which may materialize in the future or even in the near future. That's kind of one part of the area, and of course, it's driven by this whole geopolitical conversation.

Like I think I said it was in the Q3 announcement that we are having quite a lot of interest around drones. Now your question was that are you going to introduce new products in this year?

I think we'll need to come back to that, but at least there's a lot of activity and a lot of inquiries, and of course, we are interested in and working on some of these inquiries, for example.

All right, great. Thank you for the answers.

That's it from me.

Thanks, Valtteri.

Thank you, Valtteri. Do we have any more questions from the audience?

Please use the raise hand function if you want your microphone open. Oh, Anders.

Just a second. Yes, Anders, please.

Go ahead.

Hi, Anders from SEB, and just a very quick question. Would you expect your indebtedness to actually decline this year?

Mikko, will you start that, and I'll then continue on the business side of the investment plan?

In terms of our strategy, we've set reducing the indebtedness, it's one of the key metrics for us to succeed. Then, specifically when you ask about this year, now we have received a fair amount of orders that need a ramp-up, it's going to be a balancing thing, how to ramp up business that requires some capital versus when it drives the profitability and relative indebtedness down.

It's a two-factor thing.

Yeah. Anders, of course we need to, and the charge is to decrease the indebtedness.

This is still a year of investments, and we need to kind of get India ramped up and some other small things done as well. I don't want to go into giving promises to you at this point in time.

We still need to get those investments in place, and now we are building up the backlog also to justify the situation, I think that's the best I can give it to you now without promising you.

Thanks.

Thank you, Anders. Do we have any more questions?

We still have some time left in this session. Please, Valtteri, you can continue.

Thanks. Maybe still on the same topic, you talk about investments taking still place this year, can you give any indication on

the capex kind of needs this year? Mikko, you start, and I continue.

We've been quite careful of how, when, and where to invest. When we look at the investment needs, majority are in place.

There is some incremental equipment that's going to be needed, some incremental or replacement of production lines, and then in terms of delivering certain products, a limited amount of additional space connected to our factories. I would say, without giving a capex estimate for the year, we still expect to be essentially in line with the past.

All right. That's all.

Sorry. No, I'm just still going to say that we have quite a good pipeline of either one or then existing customer jobs that we are working on securing, that, as Mikko said, will require some investments.

Of course, we want to be selective in terms of, okay, which of those jobs do we eventually then take, and does it warrant and do we want to make that investment. I think this is a very good place to be in.

Like Mikko said, we have a very good, optimized, and we're getting to our optimized, desirable footprint, it's just not to fragment that, but it's a good position to be in where, for example, if we can secure certain longer-term type of contracts that require some investments, if that contract would be sizable, then there is the potentiality of having a sizable investment as well. While still keeping within what Mikko said, in line with what the track has been so far, so that's why we don't want to give a capex frame, because we still also want to make sure or decide on which of these we will win, the customer will choose us, and which we will then accept.

Thank you. Still to continue on that a bit, I noticed that in Q4, the operational cash flow was actually quite good.

I'm assuming that you expect that to continue already also in Q1, but do you plan to draw any new loans during this year, or is that a possibility, or is the aim to finance completely through operational cash flow?

If I take it piece by piece, and in terms of annual cash flow last year, it was €2 million negative, and Q4 was a very very good improvement to drive it back to that figure. It was related to how we've taken steps to address and efficiently use our capital, and we got improvements in that sense.

Going to this year, it's going to be a balancing act in terms of investments similarly to keep working capital highly efficient, additional care that we maintain it tight so that it delivers good capital use from investor point of view. When it goes to driving growth and realizing it, it may lead to at least temporarily increase in working capital, and that affecting then cash flow temporarily.

In terms of financing, we have a financing package agreed, and for the moment, target is to manage with that.

Do we still have any questions left from the audience? If not, then thank you very much for the activity and for tuning in today, and we look forward to seeing as many as possible of you then at the AGM and in the future quarterly announcements.

With that, again, thank you and have a great continuation of the Friday afternoon.

Thank you all.