Okay, so good afternoon and welcome to Exel's Q3 results call. My name is Lilli Riikonen, and I'm from Exel's Investor Relations. I'm here today with President and CEO Paul Sohlberg and CFO Mikko Rummukainen, who will give a presentation on Exel's Q3 performance and key events. After the presentation, you will have the opportunity to ask questions. Please raise your hand and ask your question and open your mic. You can also write your questions in Teams chat if you prefer. Please note that the meeting will be recorded. But now I would like to hand over to Paul. Paul, please go ahead.
Excellent. Thank you, Lilli, and good afternoon on my behalf as well. And welcome to our Q3 and first nine-month results review. I'll start with the Q3 highlights. I think we have plenty of reasons to be pleased, satisfied, even maybe happy with some of the items here. Starting with the most important one first. So we had a good quarter in the sense that the turnaround is progressing according to our plans. The revenue and operating profit of the company increased significantly year on year. We did have the opportunity to strengthen our backlog. And then, quite importantly, during the period, we announced a very important future customer engagement with Vestas, the wind turbine maker. And today we actually announced another customer engagement with another Western wind turbine manufacturer. I'll speak to them in a minute a little bit more.
Also, in the period, we completed the strategic factory review for Belgium. We also announced the introduction of the consultation process with the intent then to discontinue production in the Oudenaarde Belgium factory. We'll speak a little bit more to that as well in the later slides. The guidance is intact for the period, so we continue on the path we've outlined for the year and which we've been keeping in a good way. So with that, I think it's a good opportunity for Mikko to give you a little bit more color in the terms and numbers. And I'll then speak to some of the developments in the business units a little bit later. So Mikko, if you'd like to go ahead, please.
Thanks, Paul. Quarter three financially was a strong performance in terms of revenue growing significantly, in terms of operating profit increasing significantly. Looking into the details, when we look at order intake, there often is some variation, especially in quarter three. Yearly swings are relatively large up and down. This time quarter three was 8% down in order intake. However, full year was ahead of last year. Revenue growth, as mentioned, was significant in Q3 with 19.7%, almost 20% increase in revenue and operating profit at EUR 0.6 million, adjusted operating profit EUR 0.7 million positive versus a loss-making quarter last year. Something to highlight of the operating profit levels, if we compare, for example, last year with somewhat higher revenue back then, we achieved exactly break-even. Considering the measures we've taken to improve our profitability, it is bringing fruit.
If you switch over to look at, let's look at the revenue somewhat, so Q3 compared to last year, we were happy to be able to book increasing revenue in all customer industries except for energy, and strongest growth we had in buildings and infrastructure. We will later on today look at some of the latest positive developments in energy, so you can get more light into that side in a while, and further, when we look at the profitability and positive developments we have had there, so year on year, our Q3 improved clearly. In 2024, this year, we achieved approximately 3% positive operating profit in Q3 versus a similar amount of losses in last year, and as mentioned, last year, first half of last year, we had higher revenues but break-even, so speaks to a positive turn here.
Maybe something to note as Q3 typically is seasonally also lower in revenue, but often leads, and in actually every quarter on this graph, Q3 profitability is below Q2, so that was to be expected. And we expect the profitability development to further improve when we reach higher utilization rates, when we ramp up new customer products and optimize our production. And then looking at revenue, as said, approximately 20% growth in Q3. Order backlog was 7.3% higher than a year ago. And while being slightly below what was Q2 level, it's still clearly up from last year.
And then performance, if we compare it to uncertain operating environment, well, you need to look at how the market other indicators are doing, so our analysis is that Exel performed decently well, and we've been happy to be able to announce these new customer engagements. So all in all, this leads us to maintaining our guidance we gave earlier. Exel Composites expects revenue to increase and adjusted operating profit to increase significantly in 2024 versus 2023. So maybe we go over to more details of the business. So over to you, Paul.
Okay, thank you, Mikko, and I will start with discussing our Engineered Solutions business unit. The headlines of the period there and also for the midterm future is then, of course, the optimization of the factory network and, as always, to secure new customers and then, of course, increased wallet share from existing customers. If we just look at the performance in the period, so as Mikko alluded to, the revenue in the third quarter decreased compared to the previous quarter, but it was better than the first quarter in the year, and as Mikko said, the Q3 is usually a seasonally lower quarter for the Engineered Solutions business unit, then looking at the market demand, we saw a slightly softer situation than in the first half. We are now at the end of October.
We didn't yet see kind of a recovery or a normalization from the earlier trend we had in the first quarter. So there's a little bit of a shorter visibility now and some uncertainty as to when the recovery in demand will kind of start accelerating or improving there. As mentioned, the business unit, they developed or they progressed well on these strategic targets. So remember, we refocused our operations in the U.S. roughly a year ago. And one of the main areas there has been then to secure new customers along the dimensions of the focus of the unit there. I'm pleased to report that that has happened and it is happening. We have secured multiple new customers and we are starting to see then volumes coming in from these customers after having, of course, gone over the design and the testing phase for the applications of these customers.
I also mentioned that we did conclude the strategic review for Belgium in the period, and we then announced the consultation process regarding the intention to then stop production and close the factory. For those who are familiar, this is a process which is quite tightly mandated by law. It is a consultation between the employee representatives, the unions, and of course, the employers' representatives. I will say that has been going in a very amicable, good way. The discussion, the quality of the discussion is high. I want to thank, of course, everybody who's involved in that on a daily basis. We, of course, need to respect the period or the time that this process takes, but I think so far it has been progressing well, and I'm hopeful for then a good outcome in, of course, this unfortunate situation that the potential closure then will have.
Moving over to the Industrial Solutions business unit. Here, the headline here is revenue growth and then two new significant engagements in the wind power industry. And obviously, wind power is kind of one of the spearhead growth drivers for the Industrial Solutions business unit. So that's why we have reason to kind of be humbly proud of the progress that the team has been doing there. And I think that's really been quite significant. Now, if we just look at the figures there, so revenue did increase compared to the previous quarters. It's still a small numbers there. The increase, though, is good, and it's, of course, good that we are progressing also in terms of the market position. If you just think about the demand, so for the industrial business unit, it's kind of mimicking the engineered one. So it's maybe a little bit better.
It's cautiously positive, but we need to see when there will be a clear improvement. Now, as mentioned, though, I think the team has been doing well navigating this somewhat short visibility environment in terms that we have strengthened our position in the wind power industry, as we'll talk about in a minute, also transportation and building and infrastructure. Just by way of examples of the transportation industry, we have now won some additional volumes specifically for the reason that we've started adding these post-processing services, which is very much in line with our strategy to kind of do more of the early engagement in the design phase of customers and then also add selectively post-processing, for example, surface treatment and machining and other things, keeping maybe which they desire maybe to lessen the hurdles they have in their own supply chains or fabrication chains.
I'll move over then to speak about the new customer engagements. So the one we announced already in the middle of September, approximately, was that we have won the qualification or the bidding qualification for supplying Vestas with carbon fiber spar caps out of our India factory. So once we have proceeded through all the steps of testing and qualification for the final product, we foresee that we will be supplying Vestas with carbon fiber spar cap manufactured by pultrusion from our new India factory under development. We estimate that deliveries for this customer for this product would start in the last quarter of next year. I also want to highlight that this is now the second carbon fiber spar cap engagement with a major turbine manufacturer. We are announcing this year for the India factory under construction.
So I think that has been really a tremendous effort by the team. And we are really excited and looking forward to what this will do for us as we kind of then fully commission the plant and start commercial production. The other one, also a reason to be a little bit pleased, is that after quite significant work, actually, so we have been able to secure a long-term agreement for the delivery of heli-h oist systems with another major Western wind turbine manufacturer. So as you can see in this sketch here, we have. It's kind of a helicopter platform to ferry in service technicians to the turbine by way of helicopter. This is, of course, used predominantly for the offshore turbines. This is quite a simplification of the actual design that you can see here.
It's, for our standards, a fairly elaborate product wherein the pultrusion is not the material part of it, but it's a very crucial part of it, whereas we are then doing a lot of adding a lot of other materials there, doing the assembly work. There's bolting, gluing, bonding, all these things to get this fully, if you will, product into the market. Again, it's very much aligned with our strategy within wind to have wind as a spearhead, but then also to be able to diversify the offering we have there to maybe look at which are the potentially interesting, profitable, if you will, or higher profit, more profitable parts of the turbine where a pultruder such as us would like to be involved. And I think also excellent work that has been done by the team there.
We expect that the deliveries will start in 2025, and these will be pultruded and then assembled, or the post-processing work will be done in our China factory. Okay, then just a quick update on the new factory in India. So everything is going according to plan there. Like we said before, it will be ready for production in Q4 or at the end of this year. So the installations are ongoing and progressing according to the plan. Like we said, now we have secured these two customer engagements already for the factories. Of course, we are then eager to get it up. We've said that we expect the actual deliveries then to start picking up in 2025 after a ramp-up period. And just as a friendly reminder, this is a joint venture between Exel Composites and Kineco Composites in India.
So, but in this space, this is high on the agenda. We're plugging away, working ahead, and it's going according to plan. We've been carrying the list of the strategic or the public list, if you will, of the strategic actions. This is more like a reminder. We will talk about many of the things here. What is new here, of course, then the Belgium consultation process or the completion of the strategic review. India, we just mentioned. And of course, we talked earlier about then also completing the U.K., the sale of the old U.K. factory building during this second half. Things are progressing there as well, and we aim to complete it as we've earlier stated. The strategic factory review number three, which is also part of the activities we may take during the strategy period. We have not yet decided on that to start it.
We will be looking at now completing these previous ones in a good way because we have quite a lot to do there as well. And I think we are in a good position on the basis of what we have right now and the customer engagements to kind of focus on those now for a little period of time. Kind of to start rounding off, I want to speak briefly about also a progress in the sustainability space. One of the targets we have also is to position Exel as a front runner in sustainability in the pultrusion space. We have various initiatives ongoing there. One of them is during the period we launched the commercial scale use of bio-based resins in our operations. So we announced a partnership with INEOS Composites by which we will be purchasing 100 metric tons of their Envirez bio-based resin system.
It's a circular feedstock-based system which will help us and, of course, then consequently our customers to reduce their carbon footprint without, of course, compromising the material performance. What I also want to say, which has been a very good development here, is that I think it's important to drive these sustainability efforts. We also need to be mindful of the fact that oftentimes they do come with a price impact, and we have been working on making sure that the impact is such that it is a real choice, such even from a commercial point of view. And I think this is very good that it's close enough so that it can be a comfortable decision to go with these things. So we're offering it as an option to our customers. With that, just quick recap on the Q3 key takeaways.
Like Mikko said earlier, we feel we continue to perform well despite the uncertain operating environment. We did get progress on many of our strategic activities, which is important. We did have revenue and profitability increase year- on- year significantly, actually. The order backlog did develop in the first nine months compared to the previous period. And as mentioned, the strategic implementation or the activities there have been progressing well.
From the announcements that we did earlier in this quarter or in the previous quarter and then today, you can also see that we have been focusing on larger customers, of course, without kind of neglecting the small ones, but then also on our strategic high-growth industry and the volume business, which we believe will kind of complement the traditional Exel offering and position as well for the future and for going forward. With that, I'd like to hand over to Lilli. She'll just talk you through some of the calendar dates for our future activities and investor activities. So Lilli, if you want to go ahead with that and then lead the questions, please.
Yes, thank you. Just a quick reminder that we have today published our financial calendar for the next year. And you can also find the dates on our websites, on our calendar there. As you can see, we are very keen on organizing or publishing our results on special days. Today it's Halloween, and we will next see each other on Valentine's Day, which is the 14th of February for full year results for this year. So let's meet online then. Thank you. Over to you, Paul.
Okay, good. Just rounding off to see if there are questions in the audience. If you want to just open your microphone or put up your hand, I'll try to see which hands I see. Okay, I can see Joonas there. Go ahead, please.
Yeah, hi. It's Joonas from Evli. These post-processing services for transportation industry customers that you mentioned, and I think you also mentioned that you might do something similar for your wind power customers as well. So my question is that do you think there's potential to sell those kinds of services to some other more industrial types of customers as well or limited kind of to these transportation or wind and wind power customers? I mean, I think these are both like within the Industrial Solutions business unit. So do you think there's good potential for those services also within the Engineered Solutions business unit?
Absolutely. Yeah. Great question, Joonas. Absolutely, there is opportunity for that. In fact, traditionally, we have been doing a little bit of this already. I'd say from the complexity point of view, maybe shy of post-processing, if we can use a term like this. But there is opportunity for that as well. And we are actually looking at some things with customers right now where we would be doing it. So what we mean there, we have, of course, different types of machining.
You can look at painting, other ways of surface treatment, then mechanical modifications to the profiles after they are pulled through, maybe some sort of kitting, gluing things like this on top. So we're looking at various opportunities in that space as well. And of course, discussing closely with customers where they have pain points and hurdles and then trying to see where we can help them in a meaningful and effective way.
And again, that revenue, do you think you can derive significant revenue from those kinds of services, or is it just more like to kind of help the business along?
Well, I think there are two elements to that. Definitely, they are to help the business along. I mean, we talked earlier about making customers more comfortable with composites and with the value or the supply chain and the value chain and lessening their complexity in the value chain by us doing it for them rather than them having to do it. So yeah, there is this kind of part of helping the business, winning new customers, convincing customers.
But then also, if you think about the heli-h oist platform, that whole post-processing part is quite a significant portion of the value embodied in that heli-h oist. I mean, the fact that we are actually integrating that whole solution for the customer. So I'm not prepared to go into revenue components of that, but of course, the more you do add value, the more it will benefit you from a margin point of view, definitely. So I think we like it from that perspective as well.
Right, that's clear. And you mentioned these new American customers that you signed. Could you talk about those customer industries that they represent and also the United States presidential election? Do you think it matters whether which candidate gets selected in terms of its potential impact on the local operating environment, like in terms of, say, protectionist measures and stuff like that?
Okay, I'm not going to. Yeah, all right. So yeah, just to answer the first part of your question, so these are predominant where we're focusing there now in terms of these customers. So obviously, we talked about tubes earlier. Now I made reference to customers in particular in the electrical space and then also in building and infrastructure profiles. I just spent the previous week in the United States visiting customers with some of our team. And of course, the second part of your question with how the election goes, whether that will affect. I'm not going to take a personal point of that. I can only recite what the customers told me.
And particularly the people that are in electrical or in infrastructure or capital investment-related businesses, they said that any changes that will happen that favors the local business environment is going to drive their business, noting that they do expect that there might be tariffs kind of driving internal pricing up in the market. So Joonas, that's probably as far as I should go referring to what the customers told me last week.
Okay, okay, sure. That's fine. Thanks. That's all for me.
Thanks. Okay, good. Any other comments, questions? And you can also submit your questions through the chat box if you prefer. Let's give it another last call for the questions. Please feel free. If not, then maybe we start rounding up so we can end at the hour. Thank you very much for joining us today. We will keep progressing and plugging away. We have good things ahead of us. I guess, like Lilli said, we'll see each other again on Valentine's Day. So I look forward to talking to you about our progress by then in some months. So thank you very much and have a great continuation of the day.