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. And today I'm joined, as always, by our CEO, Paul Sohlberg, and CFO, Mikko Rummukainen. So just as a disclaimer, first, the session is being recorded, and also we'll have a Q&A session at the end. But yeah, Paul, go ahead. The stage is yours.
Okay. Thank you. Thank you, Lauri, and good afternoon to everybody, and welcome to our results presentation. We're gonna look at Q4, that we finished and the full year as well, and I think we have some nice news to discuss or some nice updates for you to discuss. Here already on high headline level, you can see that we did have quite a busy quarter, the fourth quarter, and also a good progress year of progress in 2025. Now, Lauri, if you wanna flip to the next page, and we'll look at the executive summary, please. Okay, so 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 EUR 78.7 million.
Of course, a lot of hard work went into that. It's a percentage-wise, a very nice increase there. However, also on the full year number, 168.6, almost 170 million euros, is a very good order intake, I'd say. You know, and it shows the commitment of the team and the, you know, 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 EUR 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, so I'll come back to that. On the revenue side, also some good news there.
So we had an increase in the fourth quarter of 16% year-on-year, coming in at EUR 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 EUR 0.9 million, a good increase compared to last year. We came in at EUR 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, so we'll come back to that as well in the guidance.
But all in all, you know, 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, to 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. So we have been ramping up the 24/7 operations now where appropriate. You know, 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 24/7 across actually the full 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, so 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. So Lauri, if you wanna flip the page, I'll speak to both of them a little bit now as well. Yes. So 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, you know, 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 four years and having very sizable to us, very sizable minimum volume commitments in the total of EUR 47 million, I think it's reflective of the overall market appetite and forthcoming adoption of the composite core-based conductors in the market. So particularly, these deals, they definitely support the grid investment needs that we have in Europe.
So if you look, there's a picture of the conductor down to the left. So what they do is that they help upgrade the capacity on existing lines. So 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, and you can, you know, 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 are making. You can see them here, the black center part of the conductor to the left.
Of course, quality is, you know, and consistent quality, and quality for these type of very long products is absolutely key. Where for the pultrusion process, which is continuous and has a very good way of controlling the process and the quality, you know, it fits very well for the product in question. And it also fits our strategy and the direction we wanna go in having kind of longer, you know, 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... So why do we wanna do these long-term contracts? And I think they provide value across the whole value chain.
So to customers, they give, you know, 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, you know, 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, you know, visibility into stable utilization and how to optimize that. And then, of course, the element of recurring revenues in our business. And all of these combined are kind of the reasons why they fit so well with our strategy, and we wanna keep inviting customers to, you know, 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. So all in all, I think a good, a very good start for what we are looking to have as our growth phase in this strategy. With that, I'm gonna head over to Mikko, please. So Mikko is gonna talk a little bit about the numbers in detail, and then I'll come back to the BUs in a minute. So, Mikko, go ahead, please.
Thanks, Paul. So as Paul highlighted, finishing up 2025, 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%. So both quarter and the full year are quite 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 2023, and then operating profit took a positive jump in 2024, and adjusted operating profit more than doubled in 2025 from 2024 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, EUR 98.7 million, that doubled from previous quarter. It's about almost four 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, forecastable, more forecastable performance.
Good example of these are the two conductor core-related long-term agreements with EUR 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 now transportation, we had good activity across multiple customers. And then, within our category of other industries, also good demand increase in defense-related applications.
And finally, from the numbers perspective, now 2025 was positive from delivering higher profitability, more efficient operations, and clearly making a step up from how 2024 was. And if we look at how the quarter was, on the adjusted operating profit, EUR 0.9 million positive versus last year of EUR 0.2 million. We did take some actions to optimize our footprint. Higher utilization supported efficiency and execution, so that creates the positive difference. And then looking at the operating profit, including all the adjustments going up from last year by over EUR 5 million, and we finished at EUR 2.2 million positive unadjusted operating profit. So this would be the highlight on the group level. And Paul, if you take over for the BUs.
Okay. Thanks, Mikko. So starting with the Engineered Solutions Business Unit. As you remember, this is kind of the larger part, the traditional part of Exel. So in the quarter, what we saw there obviously were, of course, these wins in the energy customer industry, these larger contracts. But then also we saw a favorable, good development of demand, both from a market outlook perspective, but and also in the revenue numbers in the quarter. So we came in at roughly EUR 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 had been...
So, you know, Europe has, you know, 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, you know, a solid backlog and, you know, some better visibility, let's say, to the forthcoming period as well, in terms of having labor or workforce for the lines.
As mentioned, so the activity was on top of the energy. It was good and solid in transportation, buildings, and infrastructure as well. And then, you know, maybe for obvious reasons, also, the demand, demand in the defense area, not a specific customer industry for us, but, 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. So I think that's looking at both Q4 and the full year. Last year, there was quite, quite a lot of uptick in activity in that, in that space. Looking forward, now, what's gonna... You know, what are the main charge and mandate, for, 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. So, you know, 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. So 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 India ramp-up delivery or the delivery of the ramp-up there.
The revenue, while it's still, you know, 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%. So the revenue for the quarter came in at EUR 6.1 million compared to EUR 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, so switching from Q3 to Q4, what we did, we came from, you know, from the final end of the qualification phase into then more regular production and shipping the spar carbon fiber spar caps out of the India factory, and that's going well. I wanna kind of thank the whole team that's been working there.
So it's been a very well-handled ramp-up, and we have hit some of the production targets and the, the quality and yield numbers there early, which makes us very, very happy because of course, that's where, where the money is, is made. Then, you know, we also are, as you remember, we are 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. This is, we're working closely with the customer, and of course, we follow the customer's schedule here, but, as soon as, you know, we have more news on this, I'm gonna be happy to, to share that, that we are progressing into maybe perhaps then, next pages of the qualification and eventually into the 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, you know, developing favorably. There's also quite a solid path to, I would say, you know, the possibility of growth in that space, and we're happy to see that, and we wanna 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, you know, of course, make sure the India volumes they ramp up, but then ensure that delivery performance across the whole business, because we are getting or we are seeing activity from customers and more interest, and we're getting orders as well. So we wanna 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. So I think all in all, like I said, very pleased with the progress.
Not fully satisfied yet with where we are in all of the numbers for the company, but fully confident that, you know, this year is gonna be a good, good year for us, and we have a very clear plan on what we're gonna do in the year. I wanna 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 cores side, but of course, an important one as well, and let's talk about it. So the Board of Directors are proposing to the Annual General Meeting that we would do a reverse split of the actual share, basically to improve the trading and the price formation. And the way I look at this is that, you know, 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. So what we're proposing here is a reverse split of 15-to-1. So basically one existing or 15 existing shares will be converted into one share. This is kind of a technical change which will happen in the background, so 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.
So there will 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. So 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 at the subject of conversation and hopefully decision at the AGM, so I'll leave it at that. Just wanted to update you on this in news that we put out today as well. With that, Lauri, let's go to the guidance, please.
Yes, thank you. So, looking forward into this year, what we expect is that both revenue and Adjusted operating profit will increase significantly in this year compared to 2026.
We see or we expect that a stronger contribution, there will be a contribution, of course, throughout the year, but a stronger contribution of this will be happening in the second half of the year, and 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 tranches during the year. So 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. So in line with the capital allocation now into the business and the 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, so 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. So go ahead, please.
Yeah. So a quick update. Nothing has changed, so I hope to see you all at the AGM next month. And our next results release, the business review, is going out in May, and the first time in a Wednesday, so instead of Thursday and Friday. And then our report, of course, is going out three weeks prior to the AGM. But now it's time for your questions. So if you want to ask a question, please use the Raise Hand function. And I see Valtteri already with his hand up. So go ahead, Valtteri.
Hey, thank you. Thank you for the presentation. I'll start with the guidance. So what does the significant word mean in there, in both sales and profitability?
Okay, I'll let Mikko continue on that as well, but, Valtteri, and, thanks for the question, by the way. So 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.
Sure.
But, Mikko, maybe you wanna just confirm that for us.
Yes, it's been a long-standing framework we handle, but we've not given a 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, I mean, you need to comment. Did we... have we commented on the annual portion of the backlog? And, and Valtteri, by the way, thank you for the question, because I think this is the first time I'm ever getting this question. We're in a position where you can ask this question from, from us. So, yeah, obviously, we, we know the, the, the number. Mikko, you need to advise me if we, if we have shared them before.
Nope.
Okay, but I mean, to you know, do justice to your question, Valtteri, what I can say is that if you look at the order intake without the larger agreement, 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. So we are coming into the 120 or so mark without these larger commitments. That's a significant... Well, that's a meaningful, let's use the word meaningful increase to where we have been before. So I'd say that, you know, and the majority of that business, typically for us, is a recurring business that we kind of turn around and put into our system. We have had, you know, sometimes we have had 3-4 months of backlog.
Now, if you look at how much that addition is, then, you know, maybe we've added a few months of that backlog into that year, just on the basis of numbers. So I hope that that helps, a little bit. And then of course, on top, the share, whatever that will be, eventually from the customers of the larger, larger orders.
Yeah. Yeah, yeah, 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?
Yeah. There are twofold, twofold there. What we see, particularly, is what we've seen basically all of last year, and we've talked about this a couple of times, that there are the ones that are doing well, and they are doing increasingly well. If you just look at the, you know, the big turbine manufacturers, how their own backlogs are developing and, you know, their own projections are developing, and I think that still holds true. You know, the winners in that segment have been ramping up, and they have been... You know, it's, it's been going better for- even better for them.
And then I think that if I look at the all, you know, overall activity in the wind segment, and I then discount the whole conversation in U.S., 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 it was quite slow there. And that, you know, that's to me, that's driven by two things. First of all, the market or the whole industry is kind of recovering and doing a little bit better. And then I think we have also focused quite a lot on that.
So it's only fair to expect that we are seeing more of the business in that area now that we have been putting a lot of effort for a couple of the previous years there. So I feel quite good 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?
Yeah, in terms of geographic footprint, I might not want to do that, but the appropriateness comes particularly from, you know, 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 this, 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. So, you know, 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.
But, you know, 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. And the same goes elsewhere, but it doesn't necessarily mean that the whole factory yet is in 24/7. So 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?
Yeah. So, and that, that it's been, it's been very active. There's been a lot of inquiries. We're seeing- we're seeing an uptick, of course, in, 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, camouflage poles. We're also seeing, tenders being out for, existing products in that which, you know, may materialize in the future or in the, in the, even in the near future. So, so that's kind of one part of the area. And of course, it's driven by this whole geopolitical conversation. And, and, 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. 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? So please use the raise hand function if you want your microphone open. Yeah, it seems that's all it from today's... Oh, Anders! Just a second. Yes, Anders, please go ahead.
Yeah. Hi, Anders from Seligson. And just a very quick question: Would you expect your indebtedness to actually decline this year?
Okay, Mikko, will you start that? I'll then continue on the business side of the investment plan.
So, yeah, 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. So 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. So it's a two, two factor thing.
Yeah. So I mean, Anders. Of course, we need to end the charges 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. So I don't want to go into, you know, giving promises to you at this point in time. We still need to get those investments in place, and now we have the backlog, or we are building up the backlog also to, you know, justify the situation. So I think that's the best I can give it to you now without promising you.
Yeah. Okay, thanks.
Thank you, Anders. Do we have any more questions? We still have some time left in this session. Okay, please, Valtteri, you can continue.
Yeah, thanks. Maybe still on the same topic, kind of, you talk about investments taking still place this year. So, can you give any indication on, on, you know, capital-
... the CapEx, CapEx kind of, needs this year? Yeah, Mikko, you start, and I continue.
So we've had. 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. Yeah, yeah, sorry. No, just go. I'm just gonna say that we have quite a good pipeline of, you know, either one or an existing customer jobs that we are working on securing, that, as Mikko said, will require some investments. And of course, we want to be selective in terms of, okay, which of those jobs do we eventually then take? And, you know, does it warrant, and do we want to make that investment? And I think this is a very good place to be in, that we have the possibility. We have a very. And this is not, I mean, like Mikko said, we have a very good optimized, and we're getting to our optimized, desirable footprint.
So it's just not to fragment that, but it's like a good position to be in, where if, 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. So, while still keeping within what Mikko said, that in line with what the track record has been so far. So that's why we don't wanna give a CapEx frame, because we still also wanna make sure or decide on which of these we are, we will win, the customer will choose us, and which we will then accept.
Okay, thank you. Still to continue that a bit, do you... 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 or during this year, or is that a possibility? Or is the aim to finance completely through operational cash flow?
Well, if I take it piece by piece, and in terms of annual cash flow last year, it was EUR 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, so it's going to be a balancing act, like 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.
But 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, so we have a financing package agreed, and for the moment, target is to manage with that.
Okay. Do we still have any questions left from the audience? Okay. 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. So with that, again, thank you and have a great continuation of the Friday afternoon.
Thank you all.