FINISHING AND ASSEMBLY OF POLE AND FLOORBALL PRODUCTS TO BE
EXEL OYJ STOCK EXCHANGE RELEASE 25.1.2006 at 15.40 1 (3)
FINISHING AND ASSEMBLY OF POLE AND FLOORBALL PRODUCTS TO BE
TRANSFERRED TO CHINA DURING 2006: PERSONNEL NEGOTIATIONS TO BEGIN AT
MÄNTYHARJU FACTORY
EXEL PRELIMINARY RESULT FOR 2005 CLOSE TO FORECASTED
Summary:
- The Sport Division is responding to increased competition by
transferring finishing and assembly of pole and floorball products to
China; personnel negotiations will begin at the Mäntyharju factory
affecting approximately 60-70 workplaces
- Net sales for 2005 (preliminary) rose to EUR 91.3 million, up 8.8
per cent on the previous years EUR 83.9 million
- Operating profit for 2005 (preliminary) was EUR 12.3 million, down
10.2 per cent on the previous years EUR 13.7 million
- Profit before tax for 2005 (preliminary) was EUR 12.0 million, down
9.1 per cent on the previous years EUR 13.2 million
- Demand for Nordic Walking products in Central Europe was quiet in
Q4, as retail chains sold off existing stocks
- The preliminary result for Industry Division exceeded expectations
TRANSFER OF FINISHING AND ASSEMBLY OF POLES AND FLOORBALL PRODUCTS TO
CHINA
Personnel negotiations at Mäntyharju factory
It is assumed that the Sport Division will continue to face tough
competition. Efforts are being made to make operations more efficient
with the aim of producing a better result in 2006. A central part of
improving cost competitiveness will be the subcontracting of surface
treatment, assembly and packaging operations for Nordic Walking and
floorball products to China. This transfer will take place in phases
throughout the year with the goal of having all these operations
handled completely in China by the beginning of 2007.
This will necessitate the restructuring of operations at the
Mäntyharju factory. Accordingly, the factory will focus in the future
on the manufacture of composite products and, in terms of sports
equipment, on the production of pole and floorball shafts, surfboard
masts and laminates. In addition, efforts will be made to increase
production for the Industry Division that already takes place at the
factory. The restructuring signifies a lower demand for labour
amounting to 60-70 workplaces, mostly in production. Personnel
negotiations are scheduled to begin in week 5. Depending on the
outcome of these negotiations, the new operating model will be phased
in during the remainder of the year. The transition is expected to
improve clearly the profitability of the businesses in question.
PRELIMINARY RESULTS 2005
2 (3)
As Exels final financial results for 2005 will be published only on 1
March 2006, Exel hereby publishes preliminary, unaudited results for
2005.
Group sales
Net sales for the Exel Group grew in 2005 as expected, ending the year
at EUR 91.3 million. This represents growth on the previous year of
8.8 per cent. The Groups main business area, the Industry Division,
experienced very strong growth; net sales for 2005 amounted to EUR
57.0 million, up 17.9 per cent on the previous years EUR 48.3
million. Most of this growth was organic; the inclusion of Austrian
subsidiary Faserprofil as of April 2005 increased net sales for the
Industry Division by EUR 3.1 million.
Net sales for the Sport Division in 2005 amounted to EUR 34.3 million,
falling short of the previous years EUR 35.5 million. In the second
half of the year, the market for Nordic Walking products in Central
Europe was weak, which was reflected quite clearly in the smaller
number of deliveries. The primary reason for poor sales in this area
was excessive supply among retailers, who made a big effort to sell
off stocks, especially in Q4. We forecast that this situation will
continue unchanged for the duration of the current model year, until
March-April 2006. The total market for Nordic Walking products in the
German-speaking markets of Central Europe is expected to remain at the
same level as in 2005. Exels goal is to maintain and partly increase
its strong market share in these markets.
Group operating profit
The preliminary operating profit for the Exel Group in 2005 was EUR
12.3 (13.7) million. The profit (preliminary) for the Industry
Division improved once again clearly over the previous year to EUR
10.7 (7.8) million. Increased volumes, improved efficiency and
stringent cost control are the main reasons behind this improvement.
The profit for the Sport Division fell noticeably short of the
previous years, amounting to EUR 1.6 (5.9) million. During 2005 the
organisation of the Sport Division was strengthened, and major
investments were undertaken in opening new markets (North America, Far
East, new European countries). These investments, combined with the
selling off of existing stocks by retailers in the main Central
European markets, were the main causes for the significant fall in
operating profit from the previous year by the Sport Division.
The financial statement bulletin for 2005 will be published on 1 March
2006.
Mäntyharju, 25 January 2006
EXEL OYJ
3 (3)
Ari Jokelainen
President
Further information:
Mr Ari Jokelainen, President, Exel Oyj, tel. +358 50 590 6750
Mr Ilkka Silvanto, CFO, Exel Oyj, tel. +358 50 598 9553
Exel Oyj is a Finnish company specialised in composite technology. The
Groups operations consist of sporting goods and industrial
applications. Exels best known products include cross-country and
Alpine poles, Nordic Walking poles, surfboard masts, floorball clubs
and industrial profiles in general. The Groups seven factories are
located in Finland, Germany, Belgium, Austria and Spain. Over 80% of
production is exported. In 2004 the Groups net sales totalled EUR
83.9 million. Exel personnel numbers 450. Exels share is listed on
the Main List of the Helsinki Stock Exchange. Further information:
www.exel.net.
