Hello, everyone, welcome to Exel Composites Q1 2026 financial briefing. I'm your host, Lauri Haavisto, the Investor Relations Director here at Exel. As you might have already noticed, the meeting is being recorded, and we will have a Q&A at the end of this session. Today, I'm joined by CEO Paul Sohlberg and CFO Mikko Rummukainen. Please go ahead, Paul. The stage is yours.
Thank you. Thank you, Lauri, and good afternoon to everybody online. Good to see you joining our results briefing. We'll do it the ordinary way. I'll start with just a high level overview of the main events for the period and then Mikko will talk us through some of the numbers. Towards the end, I'll then wrap back into taking a look at the BUs, what they've been up to, and we have the Q&A session at the end of the call. Let's dive in. I think we are here with a quite a happy feeling and, you know, a good sense of things are progressing. The growth phase that we entered from start of this year, it's starting to realize immediately.
We had a strong revenue growth, coming with 19% to EUR 30.2 million. Particularly pleasing was the fact that the growth realized in both of the business units, particularly strong contribution from Industrial Solutions, which is, of course, expected, but desirable for both of the business units. Also, I think the operative measures that we have been taking and kind of the great improvement that's happening also across the entire factory network is starting to show in the profitability numbers in particular. You can see we hit an adjusted operating profit margin of 5% for the quarter, which is significantly above the previous one a year ago. In absolute numbers, we got up to EUR 1.5 million.
That combined with also a fairly good order intake in the period coming in at above EUR 30 million, I think that's a very good sign given that we had a particularly strong order intake quarter the last quarter of last year. Also if you look at the comparison period, a year ago, that was supported by a single very large order there. I think on both accounts coming in at EUR 30.3 million for this period is good. I mean, obviously in terms of orders there's always room to improve, and we are plugging away on that, but good to see this developing well as well. The order backlog, it remained strong for the period, almost at EUR 100 million and more than double year-on-year.
Good figures there occurring as well. I will talk more about the BUs at the later stage. There's just a note on the particularly good development in the customer industry energy in particular, which is supported of course by what we have going on with the large wind turbine manufacturers, but also then on the electrification and the reconductoring side. With that, I think it's time for Mikko to take a slightly deeper brief into the numbers.
Thanks, Paul. It is really happy moment to be presenting the Q1 financial highlights. We did have excellent revenue growth. We also performed above last year in many other respects as Paul mentioned. Starting from the top, EUR 30.3 million in order intake, which is best quarter over many, and best quarter if we exclude any large one-off items. We had a great order intake in Q4 last year. We had very good order intake also supported by a big order in Q1 last year. On a normal level, this was very high order intake in the last three years. Similarly, on revenue, EUR 30.2 million, which is 19% over last year.
Revenue was the highest since the start of 2024. Similar story positively continues on the operating profit and adjusted operating profit, EUR 1.5 million profit in the quarter or 5% of revenue. Again, our best quarter in three years. If looking at the order backlog, starting from a couple of years backwards, from just over EUR 25 million of backlog, this had been growing, building up to about EUR 50 million by mid last year. End of last year, we recorded the new multi-year agreements boosting our total backlog to record high, approximately EUR 100 million. Now, as said, order intake was very high, despite high revenues, we were able to maintain the backlog. This backlog partly supports our visibility for 2026.
Although of note is that exact timing of deliveries is somewhat dependent on call-offs, but overall visibility looks positive. As these longer-term commitments will be realized in revenue, then there's more than before certainty and visibility to coming years as well. If we then look at our main business, how it's split into our customer industries, the clear star of last quarter was energy. This includes our applications linked to our energy transition, both in terms of especially wind-related, also about electrical grid, or the conductor core products that we were able to record in the high order intake of last year. In addition to energy, other customer industries, which includes in particular defense-related applications, grew over 20%, and transportation increased as well.
Finally, looking at how the profitability looks. Adjusted operating profit was EUR 1.5 million, which is somewhat more than double of what we made a year ago. As we saw, the highest quarterly adjusted operating profit in the three years. While adjusted operating profit was EUR 1.5 million, so was the unadjusted operating profit as well. Both operating profit measures were 5% of revenue. Where the improved operating profit comes, it's not really about stronger utilization, also being successful in the delivery. We do maintain strict cost discipline. This positive profitability and other measures led to positive cash flow from operations of EUR 2.7 million. Another topic to be quite satisfied about.
If, Paul, if you take over, let's look at how the BU is managed.
Sure. Thanks, Mikko. Starting with the Engineered Solutions Business Unit. As alluded to earlier, we saw solid revenue growth, and I think also, which is very pleasing, a steady customer activity through the whole period. Like we may have also alluded to earlier when we met last time, you know, the customer activity generally was good. It was so even though in the month of March, after all of these things broke out in the Middle East. I think that's kind of supportive of the future as well. Obviously, you know, maybe there will be a little bit of, you know, some small slowdown, which is only natural. But I think overall it has or it continued very well in the whole in the whole quarter, the activity there.
The other part also was that it was particularly healthy across several of the applications and several of the customer industries. We are casting a fairly wide net around our main growth focus areas, the industries that we wanna serve, and we try to make sure that we're capturing all the potential and all the growth in those areas. As mentioned, energy, of course, also for the Engineered Solutions Business Unit was a growth driver in the period, supported in particular by the conductor core deliveries that we managed to push or get somebody into the quarter already, even maybe a little bit more than originally expected, but all good. The more we can get through the door the earlier, the better. We also mentioned that the defense-related activity remained good.
Not only the activity in terms of looking at new solutions, but particularly the demand of our existing products. We did get new orders, and we did get quite a lot of call-offs of those products. We are pretty busy with them. We usually talk about the camouflage solutions as one of the flagship products there that there is solid demand around. Also, in terms of the profitability, it is worth mentioning that the capacity utilization did now develop very positively. I want to thank the entire Engineered Solutions team for it. We are moving and have moved into 24/7 operations almost across the board. You know, more or less all of the factories are in this mode and using it, or using it as they need.
Of course that is going to drive our efficiency and our profitability up as we then keep adding good orders to process in the factories. Looking forward, you know, in terms of the focus, we have a good backlog now, make sure that we have surety of delivery for our customers, steady execution, keeping quality up and on time delivery up because that's of course the calling cards then for the, let's say, the next level of growth and securing even more customers. I wanna say good job to everybody in the business unit, and thank you for that. Okay. Moving over to another area to be happy about is the growth in the Industrial Solutions Business Unit.
Strong growth there, and of course then improvement of the operational readiness, meaning that continuing to bring up the capacity in particularly India, but also doing well in China. You can see here that revenue hit EUR 6.2 million. That's an increase of 48.7%, almost 50% year-on-year. Of course, we are now ramping the wind portion in India, which is contributing very favorably to this. Where we mentioned that the existing operations perform well, by that I mean China, also good performance, very good performance actually in the entire business unit. We are also busy, I mean not only in ESBU, but also very much so in Industrial Solutions business units on securing new volume growth opportunities for the future.
Busy with customers, you know, scoping up the technical and the commercial details of them and hoping to be able to tell you a little bit more about that later in the year. I'd say that the outlook is favorable here, even despite everything that's going on in the Middle East right now. If you think about the main focus for, you know, the short midterm future, of course, continue to serve these energy customers very well, continue ramping up the India capability and the capacity and maintain that good performance as we add more capacity coming online. We have a mutually agreed ramp-up plan with our customers, and of course that progressively increases the volumes that we are supplying.
Of course, as there is more lines and more cavities being run, the complexity increases and of course the challenge is then to keep that very high performance that we currently have across all of that as we go forward. I think the main focus really is to keep that operational performance on a very good level. With that, I think it's over to Lauri. Let's just recap on the guidance. Of course we maintain the guidance for the full year. We, as you know, we expect the revenue and adjusted operating profit will increase significantly in this year compared to last year. We still believe that there will be a stronger contribution in the second half of the year.
If you look at the full outlook for the first half and the full outlook for the second half, that's still the thought process we have that we'll be bringing more capacity online for the second half. Hopefully there will be a good contribution, even better, in the coming or in the second half than comparing the full first half. I will say though, that Q1 was already a good start, so we'll keep plugging away on that and doing a good job for the full year. Okay. Now I think it's over to Lauri, maybe you'll, yes, catch the investor calendar and then open the Q&A.
Yes. Thank you, Paul. Yes, a reminder of our upcoming reports and a gentle reminder that the half year report as announced today will be published two days later than announced earlier. Instead of Wednesday, it's going out on Friday, the 14th of August. Now I'll open the floor to questions. Please use the raise hand function on Teams if you want to ask a question. First we have Waltteri from Danske Bank. Please go ahead.
Hey, thank you for the presentation and congratulations on a good result. About the order intake, which declined over 12%, is this something that we would have to worry about if the trend doesn't kind of return back to growth? Are you worried about this decline?
Let me take that, Waltteri. Thanks for the question. No, I don't think we need to be worried about that yet at all. The decline is visible in the sense that the previous quarter had a single EUR 10 million order. We did not have any single big fishes in this year's Q1. I think if you go looking at a run rate of EUR 10 million a month without single big contributors, I think that's actually a fairly good result. I'll say that with full humility that we can of course do more and we wanna do more, but I wouldn't be worried about that yet.
Okay. Could you just please repeat, you said EUR 10 million, like a single order. Was it one year ago or?
Yes, it was in February.
Okay. Great. Thanks. Another one, related to the pipeline. How does the pipeline look right now and which are like the most promising customer segments that you see for this year?
Okay. As we've been talking that in general, the customer activity has been good. It was good or fairly good already in Q4 or even before, and now it continued quite active in Q1, particularly the first two months, very much so. A little bit slower in maybe in March, but still on a good level. What that means is our customer-facing teams, you know, sales, account management, technical sales support, they are almost flat out with customers working on different activities. Typically what that does then yield is a fairly good amount of, let's say new tenders or new bids or let's say pipeline building up.
I think there's a good amount of work, you know, things to work on in the pipeline looking into this year.
Great. Thank you. Maybe last one question. How much of the order book do you think will be delivered in 2026, if you have a number on that?
No, I mean, we of course we need to follow the customer's call-offs on that. This is a positively untypical, a new scenario for us that we have a significantly larger order backlog. Something that we, by the way, we want to maintain, we want to start living in this space going forward. I think we'll see how we kind of manage the forecasting and the call-offs with the customers. If you think back to the past where we typically had a four-ish month backlog, I mean that was something you could calculate and then make an assumption of the larger orders, how they're gonna materialize. I don't think we're comfortable starting to estimate the backlog realization.
Yeah, fair enough. Thank you.
Thanks, Waltteri.
Do we have any more questions? Please use the raise hand function. Okay, I think we're all done. I want to thank you all for participating. Thank you, Paul and Mikko, for presenting, and I hope you all have a great Mother's Day weekend. See you in August.
Okay. Thank you very much. Have a great day.