In my opinion, there was a very interesting detail in the CompositesWorld article about Exel and composite conductor cores.
The product developer mentions that commercializing the technology took 13 years of testing and approvals before the first commercial deliveries began. This illustrates how conservative the power grid sector is and why it is not easy for new suppliers to enter the market.
Also particularly interesting was the comment about Exel:
“We needed a high-quality supplier for the core capable of providing the large capacity that would eventually be needed. They supported us throughout the years of development, investing to modify their machines to meet the demand not for a few kilometers but for hundreds and thousands of kilometers.”
This suggests that Exel has not just been a subcontractor, but a partner in building the technology and its industrial production since the development phase. Furthermore, the article states that the order backlog is now already in the thousands of kilometers, which indicates that composite core conductors have moved from the pilot phase to wider commercial use.
I believe this strongly supports Exel’s long-term investment narrative, and it comes directly from the customer rather than from Exel’s own communications. The key question is how large a share of this rapidly growing market Exel will be able to capture.
@Lauri_Haavisto do you have any comments on this “wind turbines for data centers” topic ahead of the earnings release? It would be good to know, so I can read the report from the right perspective.
@Lauri_Haavisto as a second question: I read on another investment forum that the Joensuu factory might be expanding. Is this true? This is interesting information because my understanding was that the strategy is based on increasing utilization rates in current factories, not on factory expansions. Of course, expansions are fine too, but it would be good to understand if any are currently underway.
An ridiculously strong result and order intake compared to expectations.
It will be interesting to see if Exel’s “cycle” holds up this time. There have been several of these 1-2 year spurts in their history, and they have always been followed by a collapse.
First it was ski poles and floorball, then wind power.
Could it be that this time the business rests on multiple legs, and this will be the start of a sustainable business that lasts forever?
If that core business starts to take off more broadly, it has incredible potential. Based on this year’s development alone, the company’s value should be closer to 200 million than 100 million.
If and if. If the conductor cores start generating more multi-year contracts during Q3–Q4 and order intake (=> new orders and new demand) starts to permanently exceed the approximately €35 million quarterly level, then… in other words, more evidence is still needed for that. But yes – the potential is there.
I would phrase it this way:
“If the conductor core becomes a significant and long-term growth engine for Exel, the current market capitalization may prove to be very small.”
I included this question in the earnings interview with Pauli. The interview was wrapped up a moment ago, so it should be out by this afternoon at the latest.
In the earnings call, Paul conveyed (if I interpreted it correctly) that there is no need to worry about H2, even though some deliveries were already received for this quarter.
In my opinion, the new orders and the backlog, which has remained high, support this. I somehow see that things moved forward faster than anticipated, and the increasing utilization rate will sustain the development going forward. Calculating quickly, revenue could very well exceed 130 million this year. For 2027 and 2028, we would then need about 25% annual growth to reach the 200 million target.
The quiet period is over and the treasure chest has been opened
Answers to the first question can be found from wind turbine manufacturers. In the market outlook of their annual report, Vestas mentions that AI and data centers are supporting demand. Therefore, the connection between these and the demand for a company supplying composite elements to Vestas is not entirely pulled out of thin air.
Regarding the second question, i.e., the Joensuu expansion, Paul answered it comprehensively today in Aapeli’s interview. Summa summarum: current facilities are being developed for certain products so that, for example, extra-long lines can fit into the factory and the production facilities meet the specifications provided by the customer.
Aapeli has released a new company report on Exel regarding Q2
Exel’s Q2 figures exceeded our forecasts by a healthy margin. The implementation of the company’s growth-phase strategy has started off faster than expected, and the measures taken in recent years are bearing fruit. With the strong earnings growth we forecast materializing, the stock’s valuation is not unreasonable, but following the recent sharp rise in the share price, the bar has also clearly been raised. Given the developments that have boosted our confidence, we are prepared to lean more heavily into the potential of the coming years.
Aapeli has written about his trip to Austria, where he visited Exel’s Austrian factory :)\n\n> We visited Exel’s production facility in Kapfenberg, Austria, last week. In addition to the factory tour, the visit covered the company’s growth strategy and market outlook, which naturally had not undergone any major changes compared to the Q2 earnings release. However, we felt that the visit provided a good tangible sense of the measures taken within the framework of the strategy.\n\nExel Composites: Vierailu Itävallan tehtaalla - Inderes
“According to our understanding, production in Austria is currently strongly focused on the manufacture of various fiberglass applications. We estimate that it serves several customer industries, with Buildings and Infrastructure and Transportation playing a central role.” I’m a bit puzzled that you have been on a factory visit and yet use phrases like “according to our understanding” and “we estimate…” Were these matters not made completely clear during the factory tour, or what has been discussed there during the tour? Or are these just poor word choices? Or perhaps a language barrier?
and thanks for pointing that out. I must admit that the phrasing regarding the manufacturing of fiberglass applications could have been more direct, as it currently contains some unnecessary filler words. I will go and edit that after replying to the comment. On the other hand, those customer industries were largely based on my own visual observations regarding the production lines and finished goods inventory, as well as fragmented comments and sample pieces (though these are naturally on display at the factory for applications manufactured elsewhere as well), which is why it was phrased this way. Exel only rarely publishes the names of individual customers, and it has not commented on the roles of the factories any more precisely than between Tailored and Industrial Solutions. I hope this clarifies the background a bit.
Thanks for the reply, that cleared things up very well. Regarding the customers, I figured it might be just like that and Exel doesn’t want to give that information directly. Thanks!
Exel and Suzlon continue cooperation – potential value of multi-year supply agreement over EUR 100 million
Exel Composites’ joint venture in India, Kineco Exel Composites India (KECI), and Suzlon Energy Limited have signed a new multi-year agreement for the supply of pultruded carbon fiber strips for wind turbine blade spar caps.
Under the new agreement, Exel will supply an agreed share of Suzlon’s requirements for products covered by the agreement. At the time of signing, the parties estimate that the potential value of future deliveries under the agreement will exceed EUR 100 million by the end of March 2029. The final value and timing of the deliveries may vary based on Suzlon’s actual production needs and resulting order volumes.
Cooperation between Exel and Suzlon began in 2024 with a two-year supply agreement. The cooperation led to a purchase order of approximately EUR 10 million announced by Exel in February 2025. At that time, the parties had agreed not to disclose Suzlon’s name. The new agreement continues the cooperation and covers deliveries until the end of March 2029.
All products under the agreement will be manufactured at Kineco Exel’s plant in India. The agreement supports the continued production ramp-up and capacity utilization growth of the plant. The plant is designed to serve wind energy industry customers in India and globally.
