Exel sells its Outdoor business to Karhu Sports

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EXEL OYJ  STOCK EXCHANGE RELEASE  2 May 2008 at 1.30 pm   1 (2)

EXEL SELLS ITS OUTDOOR BUSINESS TO KARHU SPORTS

- Exel will sell the outdoor business of Exel Sports Brands to Karhu Sports,
one of the leading Finnish sports equipment manufacturers 
- Exel will keep the remaining floorball business and conduct a strategic
review of the structural alternatives for the business 
- Provisions for the restructuring costs will be made in the second quarter of
2008 and are estimated to be maximum in the level of EUR 7 million 
- For the full-year 2008, the profit before taxes is expected to be negative
for the Group 


As Exel has previously disclosed, Exel Sports Brands is no longer a core
activity within Exel Group. The Exel Board of Directors has been reviewing
structural alternatives for Exel Sports Brands and seeking a strategic partner
with an interest in developing the sports equipment business. 

On 2 May 2008, the Exel Board passed the following resolutions regarding the
restructuring of Exel Sports Brands: 

1. Exel Sports Brands will be divided into two businesses: floorball and
outdoor. The outdoor business consists of cross-country, alpine, Nordic
Walking, trekking and blading poles as well related traded items. 
2. Exel will transfer the outdoor business of Exel Sports Brands to Karhu
Sports. 
3. The remaining floorball business will be organized as a separate operation
within Exel Group. 
4. Provisions related to restructuring of Exel Sports Brands will be included
in the second quarter results for 2008. 


Karhu Sports, one of the leading Finnish sports equipment manufacturers, will
take over the outdoor business, acquire the inventory and order backlog related
to the outdoor business through an asset deal. Karhu Sports has a strategic
interest in developing the business. The transaction also includes a long-term
licensing agreement related to the use of the Exel brand together with other
brands such as Nordic Walker and Nordic Blader for selected product groups. The
employees of the outdoor business in Finland and Germany will be transferred to
Karhu Sports as existing employees. At present, there are 9 employees in
Finland and 18 in Germany. 

The business transfer will streamline the business structure of Exel Group and
increase the focus on the core industrial activities. The transaction with
Karhu Sports secures the continued presence and distribution of Exel branded
poles in the sports equipment market in a model that strengthens Exel's
profitability. A condition precedent for the business transfer to Karhu Sports
is that the consultations related to personnel in Germany are concluded
according to German law. The consultations are expected to be concluded during
June 2008. 

The remaining floorball business of Exel Sports Brands will be operated as a
separate unit and its operations streamlined. In 2007, the business had a
turnover of some EUR 5 million and it has a leading market position in the
Nordic floorball market. Exel will conduct a strategic review and evaluate
different structural alternatives for the business. 

Provisions for restructuring costs will be made in the second quarter of 2008,
and are estimated to be maximum at the level of EUR 7 million. Due to these
provisions, the profit before taxes for the second quarter is expected to be
negative. 

For the full-year 2008, the profit before taxes is expected to be negative for
the Group. 

“I am satisfied with the solution we found for the outdoor-business. This
arrangement is positive for both parties. Karhu Sports has a long-term interest
in developing the business. The Outdoor business transfer secures the continued
presence and distribution of Exel branded poles in the sports equipment market
in a model that strengthens Exel's profitability. Exel can now sharpen the
focus on its core business, namely Exel Composites,” says the President and CEO
of Exel Oyj, Vesa Korpimies. 

”The combination of Karhu and Exel broadens our product range and international
presence. We can utilize Exel's distribution channels in Europe and offer
strong brands and performance oriented products within cross-country skiing,
Nordic Walking and other outdoor sports. The deal allows us to realize scale
economies and provide a better value proposition to our customers”, says the
President and CEO of Karhu Sporting Goods Oy, Pertti Keskitalo. 

The parties have agreed not to disclose the transaction value of the business
transfer. 

Exel will publish its first quarter results today 2 May 2008 at 1.30 p.m.
Finnish time. 


Vantaa 2 May 2008 

EXEL OYJ


Vesa Korpimies
President and CEO

Further information:
Vesa Korpimies, President and CEO, Exel Oyj, tel. +358 50 590 6754 or e-mail:
vesa.korpimies@exel.net 

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