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Exel Group's Financial Results for the 2005 Financial Year

This report highlights the financial performance of Exel Group in 2005, including net sales, operating profit, and key figures for the Industry and Sport divisions. It also includes information on acquisitions, market conditions, and future strategies.

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Exel Group's Financial Results for the 2005 Financial Year

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  1. Results for the 2005 financial yearAri JokelainenPresident & CEO 27 February 2006

  2. 2005 highlights • Goal of becoming the world’s number 1 pultruder achieved • Exel to acquire the Australian company Pacific Composites • Net sales increased by 8-9% to EUR 91.3 (83.9) million • Operating profit EUR 12.4 (13.7) million, down 9.6% • Industry Division’s operating profit up 37.8% to • EUR 10.8 (7.8) million • Proposed dividend EUR 0.40

  3. Changes in Exel Group • Faserprofil GmbH from Austria acquired in April 2005 • Acquisition increased Industry Division’s net sales by EUR 3.1 million • Exel Sports began operations in April 2005 • Marketing, sales, logistics and product development of the Sport Division’s consumer products incorporated into the new company • Mika Sulin appointed Managing Director • All finishing, assembly and packaging operations for poles and floorball products to be subcontracted to China • Transfer to take place in phases throughout 2006 • Reduction of some 60-70 positions at Mäntyharju factory • One-off costs of about 2 ER million • Yearly profit improvement of some 2 million with existing volumes

  4. Financial review 2005

  5. Consolidated key figures 2005 2004 Change % Net sales 91.3 83.9 8.9% Operating profit 12.4 13.7 -9.6% Profit for the year 8.9 9.1 -2.5% Solvency ratio, % 50.0% 44.9% 11.4% Net gearing 30.2% 36.0% -16.7% Earnings per share (fully diluted), EUR 0.76 0.80 -5.0% Equity per share, EUR 2.34 1.84 27.2%

  6. Consolidated net sales and profit performance • In 2005 group net sales grew by 8.9% to EUR 91.3 (83.9) million • Net sales in Q4 EUR 21.9 (19.8) million • In 2005 operating profit EUR 12.4 (13.7) million, down 9.6% on the previous year • In Q4/2004 a one-time pension provision release, EUR 0.5 million • Operating profit in Q4 EUR 2.2 (3.3) million

  7. Exel Group, net sales by division 2005 2004 EUR EUR Change, % Million Industry 18.0 56.8 48.3 Sport 34.5 -3.4 35.5 8.9 91.3 83.9 Exel Group • Net sales 2005 Sport Industry 38% 62%

  8. Exel Group, operating profit by division 2004 2005 Change, % EUR EUR Million Industry 10.8 37.8 7.8 Sport 1.6 5.9 -73.0 Exel Group 12.4 13.7 -9.6 • Operating profit 2005 Sport Industry 13% 87%

  9. Key figures of the Industry Division Q4/2005 Q4/2004 Change 1-12/05 1-12/04 Change • Net sales, M€ 15.1 11.7 29.0% 56.8 48.3 17.5% • Oper. profit, M€ 3.2 2.3 39.0% 10.8 7.8 37.8% • % of net sales 21.5% 19.9% 19.0% 16.2% • Personnel (aver.) 241 218 10.6% 236 224 5.4%

  10. Industry Division • Net sales increased by 17.5% to EUR 56.8 (48.3) million • Increase in demand for new and existing customer applications • Faserprofil acquisition increased net sales by 3.1 million • Operating profit increased by 37.8% to EUR 10.8 (7.8) million • Increased volumes, improved efficiency and stringent cost control • New production lines opened in Germany and Austria • Preparations for China factory construction finalized

  11. Key figures of the Sport Division Q4/2005 Q4/2004 Change 1-12/05 1-12/04 Change • Net sales, M€ 6.9 8.1 -15.0% 34.5 35.5 -2.9% • Oper. profit, M€ -1.1 1.3 -208.0% 1.6 5.9 -73.0% • % of net sales -15.5% 12.2% -4.6% 16.5% • Personnel (aver.) 228 206 10.7% 231 217 6.5%

  12. Sport Division • Net sales fell by 2.9% to EUR 34.5 (35.5) million • Nordic Walking markets weakened and competition intensified during H2 • Operating profit fell to EUR 1.6 (5.9) million • Major investments in opening new markets (North America, Far East, new European countries) and strengthening of organization • Selling off of existing stocks by retailers in the main Central European markets during Q4 • Significant efforts being made to open new markets in North America, China and new European countries • Market for OEM products (windsurfing masts and laminates) is stable • Restructuring of pole and floorball assembly • Non-recurring costs EUR 2.0 million, yearly benefit over EUR 2 million

  13. 7. Exel’s Financial Performance: Net sales in 1998-2005 MEUR

  14. 7. Exel’s Financial Performance, operating profit in 1998-2005 MEUR

  15. Balance sheet 2005 2004 • Return on equity, % 37.3% 47.8% • ROI, % 34.0% 45.2% • Equity, M€ 27.0 20.7 • Solvency ratio, % 50.0% 44.9% • Equity/share, EUR 0.79 0.84 • Net interest-bearing liabilities, M€ 8.1 7.4 • Net gearing, % 30.2% 36.0% • Cash flow from business operations, M€ 7.9 15.9

  16. Balance sheet • Cash flow balance at the end of 2005 EUR 54.6 (46.3) million • Austrian acquisition • Working capital demand due to the increase in sales volumes • Solvency ratio 50.0% (44.9) • Cash flow from business operations EUR +7.9 (+15.9) million • Exceptionally low net working capital at the turn of the previous year • EUR 1.5 million in taxes paid due to good result in 2004

  17. Share price Exel Oyj 3/2005-2/2006 • 35.7% of shares traded in 2005 • Market capitalization EUR 150.1 (127.0) million on 30 Dec. 2005 • Highest share price EUR 14.80 (12.00) and lowest EUR 11.35 (5.87)

  18. Principal shareholders on 30 December 2005 • Shareholder Number of % of shares • shares and votes • Nordstjernan AB 3 496 506 30.40 • Ilmarinen Mutual Pension Insurance • Company 749 400 6.51 • Varma Mutual Pension Insurance • Company 513 600 4.66 • Veikko Laine Oy 418 800 3,69 • Berling Capital Oy 412 000 3.58 • Ulkomarkkinat Oy 346 600 3.01 • OP Suomi Kasvu Investment Fund 335 800 2.90 • Suutarinen Matti 294 400 2.56 • Eläke-Fennia Mutual insurance Comp. 226 100 1.96 • Nordea Pankki Suomi Oyj (adm. reg.) 219 188 1.90 • Aktia Secura Investment Fund 201 000 1.74 • Renkkeli Oy 200 000 1.73 • Fondita Nordic Small Cap Inv. Fund 176 400 1.53

  19. Outlook • Main markets for NW products in Central Europe to remain weak during the spring • Efforts to open new NW markets continue. New markets expected to increase net sales in the last quarter of 2006 • Partial subcontracting of pole and floorball products to the far East will improve Sport Division’s profitability towards the end of the year. One-off costs EUR 2 million, yearly profit improvement EUR 2 million • Pacific Composites will significantly increase net sales for the Industry Division. The acquisition strengthens and speed up the growth of business operations in Far East markets. • Lack of supply of carbon fibre will continue in 2006 limiting growth opportunities • Group net sales expected to increase significantly. Due to major restructuring of sports production and the acquisition of Pacific Composites, the profit will be influenced by a number of major non-recurring items, meaning that the profit before taxes is expected to be slightly lower than 2005.

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