Exel Composites Q2'25 preview: Key figures known with preliminary information

Translation: Original published in Finnish on 8/12/2025 at 7:55 am EEST.

With the preliminary information published by Exel, the main operational lines of the Q2 report to be published on Thursday (August 14) are already known. Following the preliminary information, we have made minor upside revisions to our current year estimates, while forecast changes for the coming years remained minor. In connection with the earnings release, we will particularly monitor more detailed comments on the demand situation and the background and effects of the recent data breach. Reflecting our slightly raised estimates, we raise our target price to EUR 0.40 (was EUR 0.38). However, given the high level of uncertainty, we see the risk-adjusted expected return remaining slightly below the required return, which is why we reiterate our Reduce recommendation. 

Key Q2 figures are known

In July, Exel was subjected to a cyberattack. According to the company, the attack had no impact on its business, production, or operational capacity. However, as a precautionary measure, the company disclosed preliminary information on H1 development in advance. Based on this, Exel's Q2 revenue decreased by 7% year-on-year, and it generated an adjusted EBIT of 1.1 MEUR. Similarly, our previous forecast for Q2 revenue growth was -2% year-on-year and for adjusted EBIT 0.8 MEUR. The company's result thus exceeded our expectations despite lower top line, which we estimate was driven by the implemented savings and efficiency measures and a favorable sales mix. We estimate that the bottom lines of the income statement were negatively impacted, as in Q1, by non-cash FX changes on intercompany loans.

In turn, based on our calculations, the order intake was around 28 MEUR, and thus the demand environment appeared to have remained reasonably good compared to the average level of recent years, despite increased uncertainty. Uncertainties concerning future economic development remain high, and should the situation prolong, we do not expect Exel to be immune to its effects. However, short-term development is underpinned by a re-strengthening order book (Q1’25: 43 MEUR), although we estimate the structure of the order book to be longer than typical. Our main focus will be on comments regarding the recent development of the demand situation and the background and impacts of the data breach. 

Minor forecast changes

Exel reiterated its guidance in connection with its preliminary disclosure and expects its revenue to increase (2024: 100 MEUR) and its adjusted EBIT to increase significantly from last year (2024: 1.7 MEUR). Following the preliminary data, we incorporated the actual Q2 performance into our estimates and made minor upward revisions to our estimates for the rest of the year (e.g. timing of order book deliveries). Our forecast for the current year's revenue is now 108 MEUR (was 107 MEUR) and for adjusted EBIT 5.8 MEUR (was .2 MEUR). In contrast, we lowered our revenue forecasts for the coming years by approximately 2% due to the continued uncertainty. However, our EBIT estimates for 2026-2027 increased by the same 2% due to margin improvements. We expect Exel's growth to accelerate further next year, in line with larger wind power agreements and their deliveries.

Further clarity is still needed on the overall picture

The stock's valuation picture is elevated for this year (2025e: P/E > 100x, EV/EBIT 11x, EV/EBITDA 6x) relative to our accepted valuation (P/E 10x-14x, EV/EBIT 8x-12x, EV/EBITDA 5x-8x). However, looking at next year, we believe there is slight upside in the valuation (P/E 9x, EV/EBIT 8x), considering that we see the acceptable valuation currently leaning towards the lower end of the ranges due to the still early-stage earnings turnaround and the fluctuating earnings level in recent years. On the other hand, we see uncertainties in the operating environment keeping forecast risks elevated, reflecting Exel's chronically short order book. Furthermore, assessing the final impacts of the data breach for the company remains challenging with current information.