Exel interim report for 1 January - 31 March 2005

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EXEL OYJ      STOCK EXCHANGE RELEASE   3.5.2005 at 11.00      1 (11)

EXEL INTERIM REPORT FOR 1 JANUARY- 31 MARCH 2005


First quarter in brief

 - Exel complied with the International Financial Reporting Standards (IFRS) for
   the first time in this interim report
 - Consolidated net sales rose to EUR 21.7 million, up 6 per cent on a year
   earlier (EUR 20.5 in Q1/2004)
 - Consolidated operating profit grew by 15 per cent, to EUR 2.2 (1.9) million
 - Profit for the period improved by 27 per cent, to EUR 1.5 (1.2) million
 - Earnings per share were EUR 0.27 (0.22), based on the diluted number of shares
   at the period-end
 - Exel made a decision to establish a factory in China
 - Exel decided to acquire the pultrusion business of Faserprofil GmbH in Austria
 - The Industry division posted strong growth in profit, EUR 1.8 (0.96) million,
   +88%
 - The Sport division focused strongly on opening new Nordic Walking markets
 - In the short term, a shortage in the supply of carbon fibre will restrain
   growth prospects in the Industry division


KEY FINANCIAL FIGURES

(Unaudited)

                                                                               
 EUR 1,000                  Q1/2005    Q1/2004     Change %    2004            
                                                                               
 Net sales                  21,738     20,514      + 6.0       83,857          
 Operating profit           2,204      1,920       +14.8       13,702          
 % of net sales             + 10.1     + 9.4       +8,4        16.3            
 Profit for the period      1 544      1,215       +27.2       9,126           
                                                                               
 Equity                     22,238     18,676      +19,0       20,692          
 Interest-bearing net                                                          
 liabilities                9,744      12,236      -20.4       7,447           
 Invested capital           36,006     34,342      +4.8        33,290          
 Return on equity, %        28.8       26.9        +7.1        47.8            
 Return on investment, %    25.6       25.2        +1,6        45.2            
 Solvency ratio, %          46.0       40.8        +12.7       44.9            
 Net gearing, %             43.8       65.5        -33.1       36.0            
                                                                               
 Earnings per share, EUR    0.28       0.23        +21.9       1.69            
 Earnings per share, EUR,                                                      
 diluted                    0.27       0.22        +22.9       1.59            
 Equity per share, EUR      3.96       3.47        +14.2       3.69            



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IFRS REPORTING

Exel has applied IFRS since the beginning of 2005. The reconciliation statement
for the opening IFRS balance sheet for 2004 was presented in the financial
statements bulletin released on 25 February 2005. The effects of IFRS transition
on 2004 financial statements on a quarterly basis are explained in more detail in
a separate stock exchange release published today. Compared with the Finnish
Accounting Standards, the most significant changes in the income statement and
balance sheet refer to the abandonment of goodwill depreciations, the
capitalisation of fixed production costs under finished products and semi-
finished products, the breakdown of finance leases into fixed assets and interest-
bearing liabilities in the balance sheet and into depreciation and interest in
the income statement, plus the treatment of pension liabilities and effects of
changes on deferred taxes in the balance sheet and income statement.

NET SALES

Exel's consolidated net sales for January-March grew by 6.0 per cent over the
previous year, to EUR 21.7 (20.5) million. Of this growth in net sales, EUR 0.7
million was due to organic growth, with the rest due to a Belgian acquisition
which was included in the Group's financial reporting on 21 January 2004.

PROFIT PERFORMANCE

Exel's operating profit for the period was up 14.8 per cent from a year earlier,
and stood at EUR 2.2 (1.9) million. Operating margin, as percentage of net sales,
rose to 10.1 (9.4) per cent. This relative increase in operating profit was due
to improved labour productivity and more efficient use of raw materials. However,
operating profit was affected by costs related to market expansion.

Net financial expenses fell clearly to EUR 58 thousand. Pre-tax profit was EUR
2.1 (1.8) million, and profit for the period totalled EUR 1.5 (1.2) million.

BALANCE SHEET AND FINANCIAL POSITION

Consolidated balance sheet total stood at EUR 48.5 (46.0) million at the end of
the period. This increase was mainly due to growth in inventories. Stocks of
finished goods in the main market areas were higher than last year because of
preparations for the Nordic Walking season, which has already started. In
addition, stocks were increased by the fact that US distribution has been managed
by Exel since the fourth quarter of last year.

At the end of the period, equity stood at EUR 22.2 (18.7) million and the
solvency ratio was 46.0 (40.8) per cent. Interest-bearing liabilities were EUR
13.8 (15.7) million, EUR 5.9 (4.9) million of which were short-term liabilities.
Interest-bearing net liabilities

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came to EUR 9.7 (12.3) million and the debt-to-equity ratio was 43.8 (65.5) per
cent.

First-quarter cash flow from business operations was negative, amounting to EUR
-1.7 (+2.9) million, due to the exceptionally low level of working capital at the
turn of the year resulting mostly from accounts receivable. In addition, because
of the good results in 2004, EUR 1.5 million in taxes for last year were paid
during the first quarter of 2005. Need for finance resulting from business
operations was covered with short-term credit limits and by decreasing liquid
assets. At the end of the period, liquid assets stood at EUR 4.0 million,
compared with EUR 5.1 million at the turn of the year.

CAPITAL EXPENDITURE

Capital expenditure totalled EUR 0.5 million. The report period saw no launch of
major new investments, so the focus was on completing maintenance and
productivity-enhancing investments started earlier.

PERSONNEL

The number of Exel employees totalled 432 (428) on 31 March 2005, 302 (320) of
whom in Finland and 130 (108) abroad. The number of employees during the
reporting period averaged 424 (406). This increase from last year is mainly due
to the Belgian unit becoming a Group company. The use of temporary labour has
decreased within domestic units.

BUSINESS SEGMENTS

The Group's operations are divided into two main segments, Industry and Sport,
based on the primary IFRS-compliant reporting format.

Industry

The Industry division's key financial figures for the first quarter were as
follows:

                                Q1/2005    Q1/2004    Change, %  2004          
 EUR 1,000                                                                     
                                                                               
 Net sales                      12,509     11,730     +6.6       48,349        
 Operating profit               1,819      965        +88.4      7,845         
 Operating margin, %            14.5       8.2        +76.8      16.2          
 Average personnel              204        197        +3.6       224           


Industry's net sales grew by 6.6 per cent on a year earlier, due to new profile
applications in Finland and abroad, especially in Belgium. The antenna profile
market was down from last year, but still achieved a good volume level.


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Profitability remained at a good level despite raw material prices that rose last
year. Part of this price pressure was successfully passed on within the
production chain. Operating profit grew by 88 per cent, to EUR 1,819 million, up
from EUR 0.965 million a year earlier. This improvement in profitability was
caused by higher sales volumes and productivity gains at the main factories. The
Belgian factory in particular has achieved better productivity than last year.

There was a short supply of carbon fibre throughout the reporting period, which
will continue during throughout the year. This is due to major new projects, the
most important of which are the Airbus A380 programme, defence projects in the US
and the development of China's infrastructure. The shortage of carbon fibre will
restrain the commercialisation of a few significant projects in 2005. Most carbon
fibre suppliers have announced new investments in raising production capacity.
The resulting new capacity will be available on the market in stages during 2006.


During the reporting period, the Industry division made a decision to build a
factory in China. Preliminary negotiations have progressed according to schedule,
and the aim is to start up a new production facility in Shenzhen, southern China,
by the autumn of 2006. Initially, the new factory will focus on serving existing
customers in the Far East, and on attracting new customers in the Chinese market.
The establishment of the Chinese factory will also incur additional costs during
2005.

Europe's pultrusion industry continues to consolidate. During the reporting
period, we concluded negotiations over the acquisition of the business of
Austria's Faserprofil GmbH, which will form part of the Industry division. This
acquisition will increase annual net sales by about EUR 4 million, and the
acquired business is more profitable than the industry average. Faserprofil will
enable Exel to become a component supplier for the electronics industry. The
company holds an expertise in epoxy pultrusion and skilled personnel.

Sport

The Sport division's key financial figures for the first quarter were as follows:


 EUR 1,000                      Q1/2005    Q1/2004    Change, %  2004        
                                                                             
 Net sales                      9,229      8,784      +5.1       35,508      
 Operating profit               386        955        -59.6      5,858       
 Operating margin, %            4.2        10.9       -61.5      16.5        
 Average personnel              220        209        +5.3       217         
                                                                             



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Sport's net sales grew by 5.1 per cent during the reporting period. Growth was
significantly higher in the main products, winter sports
poles and floorball equipment, but a fall in sales of water sports equipment
reduced the division's total sales growth.

Operating profit fell from EUR 0.955 million last year to EUR 0.385 million. The
Sport segment continued its dedicated efforts to open new Nordic Walking markets
and launch our concept, reducing the division's operating profit markedly.

The Nordic Walking market remained buoyant also in the main markets in Central
Europe. The launch of this concept in new countries was mainly focused on North
America and China. In the US, we launched the operations of our subsidiary Exel
USA Inc, which is currently reflected in higher costs, but at the same time
Nordic Walking is gaining a clear foothold among American consumers. We expect
more active business at the very end of 2005, and especially in 2006. In China,
we have started co-operation with our partner CISS, and training provided to
Nordic Walking instructors has begun. Our publicity campaign for this activity
has progressed according to plan. We are in the process of applying for licences
in China and expect to move into the commercial phase during the second half of
2005.

The advance sales season in cross-country ski poles and floorball equipment has
made good progress, with advance sales higher than a year ago. This increase is
due to the greater popularity of cross-country skiing in Central Europe, as well
as successful new products within floorball equipment.

SHARES

On 1 March 2005, an increase of EUR 32,970 in Exel Oyj's share capital was
recorded in the trade register, based on the exercise of share options. A total
of 94,200 new shares were subscribed. Following this subscription, Exel Oyj's
share capital is EUR 1,965,250, consisting of 5,615,000 shares each at a book
value of EUR 0.35.

During the reporting period, the highest share quotation was EUR 26.98 (14.79)
and the lowest EUR 22.70 (13.95), and the share closed at EUR 25.60 (14.10). The
share price averaged EUR 24.89 (14.29) during the period.

A total of 611,207 (644,483) shares were traded during the period, accounting for
10.9 (11.9) per cent of the average number of outstanding shares. Based on the
closing price during the first quarter, market capitalisation totalled EUR 143.7
(75.9) million.

EVENTS AFTER THE PERIOD

Exel Oyj's wholly owned subsidiary, Exel Sports Oy, started operations on 1 April
2005. Exel Sports Oy assumed responsibility for the sales, marketing, logistics
and product development of consumer products, and 25 employees from Exel Oyj
joined the new company's payroll. Mika
                                                                        6 (11)

Sulin, who was appointed as the new Managing Director, will resign from the Board
of Directors of Exel Oyj and assume his operational role on 1 June 2005.

On 1 April 2005, Exel acquired the business operations, fixed assets and
inventories of Austria's Faserprofil GmbH:n (FAS) to be transferred to Exel's new
subsidiary Exel Composites GmbH. The new subsidiary manufactures and sells
speciality fibreglass profiles for the electronics, railway, paper machine and
mechanical industries. It has production facilities in Kapfenberg, Austria and
has a staff of around 25. Its annual net sales total about EUR 4 millions. As a
result of this acquisition, it is estimated that Exel's annual net sales will
grow by about the same amount.

Held on 14 April 2005, the Annual General Meeting decided to double the number of
shares without increasing share capital. The meeting also decided on a bonus
issue and an alteration of the Articles of Association. It authorised Exel's
Board of Directors to acquire and convey the company's own shares, and to
increase the company's share capital by a maximum of EUR 100,000.

The AGM re-elected Ove Mattsson (Chairman), Kari Haavisto, Peter Hofvenstam and
Vesa Kainu to the Board, and elected Torgny Eriksson, Esa Karppinen and Matti
Virtaala to the Board. Mika Sulin, a former Board member, will take up his duties
as Exel Sports Oy's Managing Director on 1 June 2005.

OUTLOOK

Profitability has remained at a good level for the first quarter. However the
competition in existing Nordic Walking markets is expected to intensify and
opening new market will require major investments in marketing and sales.
Encouragingly, raw material markets have stabilised with the exception of carbon
fibre. In the short term, the supply of carbon fibre will slow growth in the
Industry division. The acquisition of Faserprofil will strengthen our position in
the Central European profile markets. The combined effect will result in revenue
growth whilst profit after financial items will remain close to the level of last
year.



Mäntyharju, 3 May 2005

EXEL OYJ

Board of Directors


Further information:
Mr. Ari Jokelainen, President, Exel Oyj, tel. +358 50 590 6750
Mr. Ilkka Silvanto, CFO, tel. +358 50 598 9553

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CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

 Summarised consolidated income Q1/2005    Q1/2004    Change, %  2004        
 statement                                                                   
 EUR 1,000                                                                   
                                                                             
 Net sales                      21,738     20,514     +   6.0    83,857      
 Other operating income         50         21         + 140.1    111         
 Operating expenses             -18,793    -17,895    +   5,0    -67,085     
 Depreciation and impairment    -791       -720       +   9.9    -3,181      
 Operating profit               2,204      1,920      + 14.8     13,702      
 Financial income and expenses                                               
 Profit before income taxes     -58        -107       - 45.7     -467        
 Income tax charge              2,146      1,813      + 18.4     13,236      
 Profit for the period          -602       -598       +   0.6    -4,110      
                                1,544      1,215      + 27.2     9,126       
 Earnings per share, EUR                                                     
 Earnings per share, EUR,       0.28       0.23       +21.9      1.69        
 diluted                                                                     
                                0.27       0.22       +22.9      1.59        
                                                                             

 Summarised consolidated balance                                             
 sheet                            31 March   31 March   Change   31 December 
 EUR 1,000                        2005       2004                2004        
                                                                             
 ASSETS                                                                      
 Non-current assets                                                          
 Intangible assets                862        436        426      926         
 Goodwill                         3,188      3,188      0        3,188       
 Tangible assets                  13,534     14,225     -691     13,742      
 Deferred tax assets              734        242        492      310         
 Other non-current assets         101        101        0        100         
                                                                             
 Current assets                                                              
 Inventories                      13,056     10,804     2,252    13,269      
 Trade receivables and other                                                 
 receivables                      13,002     13,536     -534     9,568       
 Cash in hand and at bank         4,024      3,430      594      5,150       
                                                                             
 Total assets                     48,501     45,962     2,539    46,253      
                                                                             
 EQUITY AND LIABILITIES                                                      
                                                                             
 Equity                                                                      
 Share capital                    1,965      1,884      81       1,932       
 Share issue                                                     817         
 Premium fund                     4,174      3,149      1,025    3,390       
 Retained earnings                14,555     12,428     2,127    5,427       
 Profit for the period            1,544      1,215      329      9,126       
 Total equity                     22,238     18,676     3,562    20,692      
                                                                 8(11)       
 Non-current liabilities                                                     
 Non-current interest-bearing                                                
 liabilities                      7,888      10,739     -2,851   8,456       
 Deferred tax liabilities         312        14         298      297         
                                                                             
 Current liabilities                                                         
 Current interest-bearing                                                    
 liabilities                      5,880      4,926      954      4,141       
 Trade payables and other         12,183                                     
 non-interest-bearing liabilities            11,607     576      12,666      
                                                                             
                                  26,263                                     
 Total liabilities                           27,286     -1,023   25,560      
                                  48,501                                     
 TOTAL EQUITY AND LIABILITIES                45,962     2,539    46,253      

Statement of changes in the equity

                                                                                 
 EUR 1,000                   Share    Share    Share      Retained               
                             capital  issue    premium    earnings   Total       
                                               fund                              
                                                                                 
 Equity 1 January 2004       1,870    135      3,028      12,429     17,462      
 Share issue                 14       -135     121                               
 Translation differences                                  -1         -1          
 Dividend paid                                                                   
 Profit for the period                                    1,215      1,215       
                                                                                 
 Equity 31 March 2004        1,884    0        3,149      13,643     18,676      
                                                                                 
 Equity 1 January 2005       1,932    817      3,390      14,553     20,692      
 Share issue                 33       -817     784                               
 Translation differences                                  2          2           
 Dividend paid                                                                   
 Profit for the period                                    1,544      1,544       
                                                                                 
 Equity 31 March 2005        1,965             4,174      16,099     22,238      

 Summarised consolidated funds     Q1/2005    Q1/2004    Change    2004     
 statement                                                                  
 EUR 1,000                                                                  
                                                                            
 Cash flow from business                                                    
 operations                                                                 
 Profit for the period             1,544      1,215      +329      9,126    
 Total adjustments                 1,485      1,497      -12       7,623    
 Change in net working capital     -2,700     1,181      -3,881    1,657    
 Cash flow from business                                                    
 operations                        329        3,893      -3,564    18,406   
 Net financial expenses            -94        75         -21       -359     
 Taxes paid                        -1,925     834        -1,091    -2,136   
 Net cash flow from business                                       9 (11)   
 operations                        -1,690     2,984      -4,674    15,911   
                                                                            
                                                                            
 Investment cash flow                                                       
 Acquisitions                                 -7,181     +7,181    -7,181   
 Investments in tangible and                                                
 intangible assets                 -518       -450       -68       -3,187   
 Capital gains on assets                                           44       
 Other cash flow from investments                                           
 Net investment cash flow                                                   
                                   -518       -7,631     +7,113    -10,324  
 Cash flow from financing                                                   
 Rights issue                                                               
 Change in long-term loans and                                     1,102    
 other liquid assets                                                        
 Dividend paid                     1,082      5,318      -4,236    2,700    
 Net cash flow from financing                                      -6,998   
                                   1,082      5,318      -4,236    -3,196   
 Change in liquid assets                                                    
                                   -1,126     671        -1,797    2,391    
 Liquid assets at period-start                                              
 Change in liquid assets           5,150      2,759      +2,391    2,759    
 Liquid assets at period-end       -1,126     671        -1,797    2,391    
                                   4,024      3,430      + 594     5,150    


Key Financial Figures by Quarter

 EUR 1,000                  Q1/2005 Q4/2004 Q3/2004 Q2/2004 Q1/2004 2004        
                                                                                
 Net sales by segment                                                           
 Industry                   12,509  11,689  11,523  13,408  11,730  48,348      
 Sport                      9,229   8,087   8,864   9,773   8,784   35,509      
 Total net sales            21,738  19,776  20,387  23,181  20,514  83,857      
                                                                                
 Operating profit by                                                            
 segment                    1,819   2,327   2,041   2,512   965     7,845       
 Industry                   386     987     1,263   2,653   955     5,858       
 Sport                      2,204   3,314   3,304   5,165   1,920   13,702      
 Total operating profit                                                         
                                                                                
 Financial income and       -58     -131    -138    -91     -107    -467        
 expenses                   2,146   3,182   3,167   5,074   1,813   13,236      
 Profit before income taxes -602    -922    976     -1,613  598     4,110       
                            1,544   2,260   2,190   3,461   1,215   9,126       
 Income tax charge                                                              
 Profit for the period      0.28    0.41    0.41    0.64    0.23    1.69        
                                                                                
 Earnings per share, EUR    0.27    0.37    0.38    0.62    0.22    1.59        
 Earnings per share, EUR,                                                       
 diluted                    5,615   5,499   5,384   5,383   5,383   5,413       
 Average number of                                                              
 shares, 1,000              5,762   5,732   5,634   5,581   5,568   5,732       
 Average number of shares,                                                      
 1,000, diluted             424     424     456     453     406     441         
                                                                                
 Average personnel                                                              




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CONTINGENT LIABILITIES

                                                                     
 EUR 1,000                             31 March 31 March 31 December 
                                       2005     2004     2004        
                                                                     
 For own liabilities                                                 
 Mortgages given on land and buildings                               
                                       2,954    2,954    2,954       
 Corporate mortgages given             12,500   12,500   12,500      
                                                                     
 Lease liabilities                                                   
 maturity of less than one year        456      190      223         
 maturity of one to five years         1,741    237      1,563       
                                                                     
 Other liabilities                     64       59       67          
                                                                     

 Face value of derivative contracts                                    
 EUR 1,000                             31 March  31 March  31 December 
                                       2005      2004      2004        
                                                                       
 Currency derivatives                                                  
 Forward contracts                     503       923       877         
 Purchased currency options            750                 750         
 Sold currency options                 371                 371         
                                                                       
 Interest rate derivatives                                             
 Interest swaps                        2,553     3,441     2,636       

GROUP KEY FIGURES AND RATIOS
                                                                                
 EUR 1,000                   Q1/2005     Q1/2004     Change %     2004          
                                                                                
 Net sales                   21,738      20,514      + 6.0        83,857        
 Operating profit            2,204       1,920       +14.8        13,702        
 % of net sales              + 10.1      + 9.4       +8,4         16.3          
 Profit before income taxes                                                     
 % of net sales              2,146       1,813       +18,4        13,236        
 Profit for the period       9.9         8.8         +11,7        15,8          
 % of net sales              1,544       1,215       +27.2        9,126         
                             7.1         5.9         +19.9        10.9          
 Equity                                                                         
 Interest-bearing            22,238      18,676      + 19,0       20,692        
 liabilities                                                                    
 Liquid assets               13,768      15,666      -12.1        12,597        
 Net interest-bearing        4,024       3,430       +17.3        5,150         
 liabilities                                                                    
 Invested capital            9,744       12,236      -20.4        7,447         
 Return on equity, %         36,006      34,342      +4.8         33,290        
 Return on investment, %     28.8        26.9        +7.1         47.8          
 Solvency ratio, %           25.6        25.2        +0.4         45.2          
 Net gearing, %              46.0        40.8        +12.7        44.9          
                             43.8        65.5        -33.1        36.0          
 Gross capital                                                                  
 expenditure                                                                    
 % of net sales              518         2,968       -82,5        5,803         
 Research and development    2.4         14,5        -16,6        6.9           
 costs                                                                          
 % of net sales              681         612         +11.3        1,956         
                             3.1         3.0         +5.0         2.3           
 Earnings per share, EUR                                                        
 Earnings per share, EUR,    0.28        0.23        +21.9        1.69          
 diluted                                                                        
 Equity per share, EUR       0.27        0.22        +22.9        1.59          
                             3.96        3.47        +14.2        3.69          
 Outstanding shares,                                                            
 thousands                                                                      
 undiluted, average                                                             
 diluted, average            5,615       5,383       +4.3         5,413         
                             5,762       5,568       +3.5         5,732         



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