exel oyj interim report for 1.1. – 31.3.2007 göran jönsson, president & ceo

Exel Oyj Interim Report for 1.1. – 31.3.2007

Göran Jönsson, President & CEO

• Net sales EUR 28.8 million, up 12.5%• Operating profit EUR 3.5 million compared to EUR 0.6 million including EUR -1.9 million of non-recurring items

first quarter 2006• Operating profit 12.2% (2.4%) of net sales• Return on equity 36.2% (4.6%)• Return on capital employed 24.3% (5.0%)• Earnings per share EUR 0.19 (0.03) adjusted for full dilution • New structure: Industry including all production (Mäntyharju, Plastics transferred)

Highlights

Exel Oyj Interim Report 1-3/2007

Net sales, M€ 26.7 23.1 15.4% 105.0

Oper. profit, M€ 4.3 2.1 106.4% 9.0

% of net sales 16.0% 9.0% 8.5%

Average personnel 506 424 19.3% 510

Q1/2007 Q1/2006 Change 2006

Industry Division’s Key Figures


Industry Division


• The Industry Division’s net sales increased to EUR 26.7 (23.1) million, an increase of 15.4 per cent

– Growth mainly due to the integration of the Pacific Composites Group and new profile applications especially for building, construction and energy industries

• Antenna profile market down from last year

• Strong efforts to introduce new applications

Industry Division


• Profitability remained on a good level despite considerable increases in raw material prices

• Operating profit grew by 106.4% to EUR 4.3 (2.1 including 1.5 million non-recurring items) million

– Improvement in profitability caused by higher sales volumes and productivity gains at the main factories

– Belgian factory in particular has achieved better productivity and operating profit than last year

Industry Division


• Short supply of certain carbon fibre types continued having slowed down sales of some new applications

• Most carbon fibre suppliers have announced increase in production capacity – available on the market in stages during 2007-2008

• Synergies and benefits of the Pacific Composites Group have been successfully gained

Net sales, M€ 3.7 5.9 -36.9% 19.3

Oper. profit, M€ -0.7 -1.6 55.2% -9.4

% of net sales -18.9% -26.6% -48.8%

Average personnel 52 73 -28.8% 69

Q1/2007 Q1/2006 Change 2006

Sport Division’s Key Figures


Sport Division


• The Sport Division’s net sales decreased by 36.9% from the previous year from EUR 5.9 million to EUR 3.7 million mainly due to

– Mild winter, which also had a negative impact on reorders

– Delays in deliveries from Chinese suppliers

• Nordic Walking market in Germany has recovered slightly

• Agreements signed with distributors in Italy, France and South-Korea to generate additional sales

• Sales of floorball products have developed well during the quarter

• Operating loss EUR -0.7 (-1.2 before non-recurring items) million

• Margins were in line with expectations, but the quarter resulted in an operating loss due to the substantially lower sales than previous year, especially in continental Europe

Group Net Sales, EUR million


Q1/2007 Q1/2006 2006 Industry 26.7 23.1 105.0 Sport 3.7 5.9 19.3 Total 28.8 25.6 112.4

Group Operating Profit, EUR million


Q1/2007 Q1/2006 Change 2006

Industry 4.3 2.1 106.4% 9.0 Sport -0.7 -1.6 55.2% -9.4 Total 3.5 0.6 484.7 0.4

Exel Group


• The Group’s net sales in January-March grew by 12.5% on the previous year to EUR 28.8 (25.6) million

– The major part of the growth is stemming from the acquisition of Pacific Composites

– Sport Division’s cross-country and alpine products sales suffered from the mild winter and stiff competition. Additionally, Sport sales were impacted negatively by quality and delivery problems due to the transfer of the pole production to China

• Operating profit increased to EUR 3.5 million compared to EUR 0.6 million (including non-recurring items of EUR -1.9 million) the corresponding period last year

– Improvement based on the restructuring measures taken in 2006, and the impact of the Pacific Composites acquisition

• Net profit for the reporting period EUR 2.3 (0.3) million

Net sales 28.8 25.6 112.4

Operating profit 3.5 0.6 0.4

% of net sales 12.2% 2.4% 0.3%

Profit for the period 2.3 0.3 -0.7

Shareholders’ equity 26.6 29.4 24.4

Interest-bearing liabilities 35.4 33.2 33.7

Capital employed 61.9 62.6 58.1

Return on equity, % 36.2% 4.6% -2.9%

Return on capital employed, % 24.3% 5.0% 1.2%

Equity ratio, % 31.7% 35.1% 29.9%

Net gearing, % 110.9% 86.7% 112.8%

Earnings per share, diluted, EUR 0.19 0.03 -0.06

Equity per share, EUR 2.23 2.49 2.05

Key Financial Figures, EUR million


1.1.-31.3.2007 1.1.-31.3.2006 2006

Balance Sheet and Financial Position


• Consolidated balance sheet total at the end of the reporting period stood at EUR 84.0 (83.9) million

• Equity EUR 26.6 (29.4) million

• Equity ratio 31.7 (35.1) per cent

• Interest-bearing liabilities EUR 35.4 (33.2) million of which short-term liabilities accounted for EUR 9.9 (6.0) million

• Net interest-bearing liabilities were EUR 29.5 (25.5) million and the net gearing 110.9 (86.7) per cent

• Cash flow from business operations EUR -1.2 (+1.3) million

• At the end of the reporting period, the Group’s liquid assets stood at EUR 5.9 million, compared with EUR 6.2 million at the end of 2006

Share price

• 5.8% of shares traded in Q1 2007

• Market capitalization EUR 154.7 (168.8) million on 31 March 2007

• Highest share price EUR 14.00 (14.84) and lowest EUR 12.50 (10.80)

Exel Oyj 5/2006 - 4/2007

Principal shareholders on 13 April 2007

Shareholder Number of % of sharesshares and votes

Nordstjernan AB 3 496 506 29.39Ilmarinen Mutual Pension InsuranceCompany 786 786 6.61Varma Mutual Pension InsuranceCompany 513 600 4.31Veikko Laine Oy 413 572 3.47Berling Capital Oy 412 000 3.46OP Suomi Small Cap Investment Fund 385 900 3.24Ulkomarkkinat Oy 346 600 2.91Suutarinen Matti 294 400 2.47Fondita Nordic Small Cap Inv. Fund 280 000 2.35ABN Amro Finland Investment Fund 264 395 2.22Lemarne Corporation Ltd 230 743 1.93FIM Fenno Investment Fund 210 600 1.77Renkkeli Oy 200 000 1.68ABN Amro Small Cap Finland Inv. Fund 174 824 1.46Veritas Pension Insurance Company 171 750 1.44

Outlook


• During 2007, the Group will concentrate on restoring the profitability of the Exel Group

• The focus on the primary business segment of the Group, the Industry Division, will be sharpened and a new business organization will be introduced.

• The Group will benefit further from the acquisition of Pacific Composites and the restructuring measures implemented at enhancing efficiency and cutting costs

• Although the important antenna profile sales will continue to slightly decline the overall market development for the Industry Division is expected to remain positive

Outlook


• The Sport Division is improving its negative performance, but due to a mild winter with low sales and prolonged sourcing problems, the profitability will improve slowly

• The primary business risks in 2007 lie in market demand, both in certain Industry and Sport segments, especially Nordic Walking; in the effective sourcing as well as in a continued shortage of carbon fibre

• For the full-year 2007, Exel expects the profit before taxes to improve compared with the 2006 result before taxes and non-recurring items

exel oyj interim report for 1.1. – 31.3.2007 göran jönsson, president & ceo

Documents

operating profit eur

gainedexel oyj interim

yearexel oyj interim

group net sales

sport divisions net

share eur

lower sales

quarteroperating loss