EXEL OYJ STOCK EXCHANGE RELEASE July 22, 2003 at 10 a.m. 1 (6)
EXEL OYJS INTERIM REPORT, JANUARY 1 - JUNE 30, 2003
Summary:
- Very strong second quarter; net sales up 10.9%, operating profit up
142.4% on the previous year
- Also January-June 2003 over previous years level; net sales up
3.3%, operating profit up 27.3%
- Operating profit improved as a result of the measures aimed at
reducing costs and the breakthrough of Nordic Walking in Central
Europe
- Early signs of market recovery can be seen
Operating environment
The markets were still relatively cautious in the beginning of the
review period, but picked up significantly in May. The trend is
expected to continue though it is still difficult to predict the
general market situation for the rest of the year. Both the sports
equipment market and the industry segment are active, and there is
continued demand for new products and product innovations.
The raw material markets have remained stable despite momentary price
hikes affecting oil, and raw material prices are not expected to rise
in 2003.
Industry division
The net sales of the Industry division increased by 1.4% and totalled
EUR 13.2 million (13.0). The divisions profitability also remained on
a good level; the operating profit was EUR 1.5 million (1.4). The
Industry divisions sales remained good, although the market was
extremely cautious. The market has, however, picked up noticeably
towards the summer.
Antenna profile sales experienced a considerable peak in demand during
the period under review. At the moment it is difficult to predict if
demand will continue to increase throughout the rest of the year.
In the paper industry, machine capacity utilisation rates remained
low, which was reflected in the sales volumes of doctor blades.
Together with the Metso Corporation, Exel has developed ValRx, a new
addition to the doctor blade product range. The most important feature
of the new blade is its better impact resistance. The blade holder
range has also been reinforced. Some functional changes were made to
the LiteFit blade holder during the spring and the improved holder was
brought to the market early this summer. Paper machine capacity
utilisation rates are expected to remain low also during the rest of
the year.
Lattice mast sales have proceeded according to plan. The order book
was stronger than ever at the end of the review period. Before the end
of 2003, masts will be delivered to such airports as Chang
2 (6)
(Singapore), Schipol (Amsterdam) and Luton (London). The product
groups sales are expected to remain very high throughout the
remainder of 2003.
The profiles product group is carrying out several big product
development projects mainly concentrated on the automobile industry,
offshore, infrastructure construction and wind energy. Leading
automobile manufacturers are currently in the process of replacing
metals with composites in order to make car bodies lighter. Utilising
carbon fibre to strengthen and lighten steel structures is a rapidly
developing area for the utilisation of composite materials. In
addition to making the structures lighter, vibrations can also be
lessened with the use of carbon fibre profiles. Exel actively
participates in the development work.
Sport division
The net sales of the Sport division during the period totalled EUR
12.8 million (12.2), which corresponded to an increase by 5%. The pre-
season sales to Finnish sports equipment stores have been at the usual
level. In Finland, demand remains lower than in 2002. In exports, pre-
sales have been more active than in 2002.
Exel has continued the successful launch of the NFSTM (Nordic Fitness
SportsTM) concept in Central Europe. The new products included in the
concept, Exel skis, Odlo and Björn Dählie sports gear and Tubbs snow
shoes, will reach consumers this autumn in Finland. Nordic Walking was
the only truly new sport introduced at the ISPO sports trade fair in
Germany, and it aroused great interest. Nordic Walking has made its
final breakthrough in the densely populated German-speaking areas of
Central Europe. As the initiator of the sport, Exels share of the
market is particularly strong, reflected by the fact that Exel GmbH is
breaking its sales record. In addition to Nordic Walking, Exel will
also be the undisputed market leader in Nordic Blading in the Central
European market in 2003. As a whole, the pole pre-sales and order book
are good and clearly above last years level.
Laminate sales remained at the same level as before during this review
period. The negative difference on the previous year created in the
first quarter of 2003 could, however, not be compensated. In addition
to traditional sports applications, the company has also introduced a
laminate used by the furniture industry for e.g. bracing shelves. In
water sports, the demand for windsurfing masts improved and remained
good even after the windsurfing season began.
In the main floorball market areas, i.e. Finland, Sweden and
Switzerland, market shares have remained the same. The International
Floorball Federation and companies active in this field are working on
spreading the sport into new countries. The storage and dispatch
operations of International Gateway AB, which markets floorball
sticks, were transferred from Sweden to the Mäntyharju logistics
centre in Finland at the beginning of June.
3 (6)
Sales and profits
The Groups net sales grew slightly compared with the previous year.
The distribution of net sales by division was as follows:
Net sales
(EUR million) 1-6/2003 1-6/2002 Change
Industry 13.2 13.0 1%
Sport 12.8 12.2 5%
Total 26.0 25.2 3%
In the Sport division, growth was mainly concentrated on Nordic
Walking pole sales in Central Europe, which compensated for the low
mast and laminate sales at the beginning of the year. The Industry
divisions sales were stable in different product groups and markets.
The Groups operating profit was EUR 2.0 million (1.6). Manufacturing
productivity has improved significantly, which has lead to improved
operating profits in both business areas. The successful sales of
Nordic Walking poles in Central Europe was the main reason for the
clear improvement of operating profit in the Sport division. The
distribution of operating profit by division, and change compared to
the previous year, were as follows:
Operating profit
(EUR million) 1-6/2003 1-6/2002 Change
Industry 1.5 1.4 +8.9%
Sport 0.4 0.1 +203.0%
Total 2.0 1.5 +27.3%
Net financial expenses
Net financial expenses totalled EUR 252,000 (305,000). There were no
significant changes or arrangements made in the Groups financing
during the review period, only small arrangements to balance loans
with fixed and floating rates.
Balance sheet, financing and liabilities
The balance sheet total was EUR 34.6 million (35.4). Interest-bearing
net liabilities decreased to EUR 9.6 million (14.3). Liabilities
remained nearly unchanged.
Investment
Group investments totalled EUR 1.0 million (1.2). Investments have
been kept low. New investments were mainly concentrated on moulds and
tools related to product development.
Personnel
Group personnel totalled 359 employees (385) on June 30, 2003.
4 (6)
Shares and ownership
Exel Oyjs share capital is EUR 1,854,755 comprising 5,299,300 shares
each with a nominal value of EUR 0.35. The members of the Board of
Directors and the President held a total of 98,100 shares, i.e. 1.8 %.
The number of shares traded on the Helsinki Exchanges during the
period under review amounted to 8.2% of all Exel shares. During the
period the highest share price quoted was EUR 7.14, and the lowest EUR
5.50. The closing price for the review period was EUR 6.10. Market
capitalisation totalled EUR 32.3 million on June 30, 2003.
Prospects for the rest of 2003
The markets are estimated to be cautious during the remainder of the
year, although early signs of market recovery have been seen during
the second quarter. Ongoing efficiency improvement programmes in the
Finnish and German factories are proceeding as planned and they are
expected to result in further cost reductions. Exel estimates that the
market conditions in the second half of 2003 will be essentially the
same as in the first half of the year. The operating profit is
anticipated to develop positively and exceed that of 2002.
Mäntyharju, July 22, 2003
Exel Oyj Ari Jokelainen
Board of Directors President
5 (6)
CONSOLIDATED INCOME STATEMENT
EUR 1,000 1-6/03 1-6/02 change % 1-12/02
NET SALES 26,006 25,188 3 51,203
Increase(+)/decrease of finished
goods and work in progress 977 895 9 422
Production for own use 93 109 -15 251
Other operating income 191 272 -30 770
Materials and services -9,851 -10,415 -5 -20,175
Personnel expenses -6,939 -6,560 6 -13,198
Depreciation -1,627 -1,562 4 -3,318
Other operating expenses -6,865 -6,367 8 -12,153
OPERATING PROFIT 1,986 1,559 27 3,802
Financial income and expenses (net) -252 -305 -17 -655
PROFIT BEFORE EXTRAORDINARY ITEMS 1,734 1,255 38 3,147
Extraordinary items
PROFIT BEFORE INCOME TAXES 1,734 1,255 38 3,147
Income taxes -600 -422 42 -921
PROFIT FOR THE PERIOD 1,134 833 36 2,225
The taxes taken into account are based on the profit for the period.
CONSOLIDATED BALANCE SHEET
EUR 1,000 30.6.03 30.6.02 change% 31.12.02
ASSETS
Non-current assets
Intangible assets 3,179 3,684 -14 3,521
Consolidation goodwill 366 437 -16 402
Tangible assets 10,389 11,348 -8 10,636
Investment 127 127 0 127
Current assets
Inventories 9,258 9,297 0 7,962
Receivables 8,756 9,825 -11 6,635
Cash in hand and at bank 2,531 656 286 2,525
Total 34,607 35,375 -2 31,807
LIABILITIES AND SHAREHOLDERS EQUITY
Equity
Share capital 1,855 1,840 1 1,853
Other equity 13,164 11,563 14 13,086
Liabilities
Deferred tax liability 106 171 -38 106
6 (6)
Non-current 5,157 7,306 -29 6,223
Current 14,325 14,495 -1 10,538
Total 34,607 35,375 -2 31,807
FUNDS STATEMENT
EUR 1,000 1-6/03 1-6/02 change % 1-12/02
Cash flow from business operations 748 -715 205 5,348
Investment in tangible and
intangible assets -1,005 -1,211 -17 -1,682
Income from surrender of tangible
and intangible assets 42 -100 57
Rights issue 147
Withdrawals of non-current loans 30 77 -61 71
Repayments of non-current loans -1,078 -1,111 -3 -2,205
Withdrawals of/repayments of
current loans 2,367 3,486 -32 679
Dividend paid -1,060 -1,840 -42 -1,840
Other 4 -6 167
Change in liquid funds 6 -1,278 100 575
INDICATORS
EUR 1,000 30.6.03 30.6.02 change% 31.12.02
Gross investment 1,005 1,169 -14 2,014
% of net sales 4% 5% 4%
R&D expenses 806 619 30 1,113
% of net sales 3% 2% 2%
Average personnel 356 380 -6 374
Personnel at end of period 359 385 -7 359
Order book 10,945 11,192 -2 7,564
Solvency ratio, % 44% 38% 47%
Return on investment, % 15% 11% 14%
Net gearing, % 64% 107% 55%
Earnings per share, EUR 0.21 0.16 36 0.42
Equity per share, EUR 2.83 2.53 12 2.82
Consolidated contingent liabilities on June 30, 2003
Corporate mortgages 12,500 12,500 12,500
Mortgages on land and buildings 2,954 2,954 2,954
Other contingent liabilities 2,536 3,487 2,694
Columns 1-6/03 and 1-6/02 are unaudited.