Exel Oyi informed its investors a few days before the release of the company’s third-quarter results that it was having ongoing difficulties with its sports division. For the first nine months of this year, its net sales have dropped significantly from €14.3 million to €9.7 million, a decrease of 32 percent. The operating loss over the same period increased by €500,000 to €7.6 million.
The company attributes the losses to ongoing delivery delays and quality problems connected with the shifting of manufacturing facilities from Finland to China. Exel Sports says it also suffers from a flat market for Nordic walking poles and – after a bad Winter 2006/07 – for cross-country ski poles. In addition, there is a lack of delivery capacity in Finland. As reported, Exel no longer sees sports as one of the group’s core activities and continues to seek a strategic partner to develop the sports business.
The Finnish concern’s total sales were slightly down in the period between July and August.to €27.9 million. However, sales in the first nine months were up by 4.1 percent and reached €85.4 million. The operating profit in the same period was positive with €4.1 million, but for the third quarter the group recorded an increased operating loss of €2.1 million, due in part to a negative impact of €4.2 million in write-offs and impairment of assets, of which €3.5 million was from Exel’s sports division.
The group’s industry division continues to grow and to be profitable. Its net sales were up by 2.4 percent to €79.5 million in the first three quarters. Operating profit nearly doubled from €6.2 to 11.3 million.
A few days after the financial release, Exel announced the appointment of Olli E. Juvonen as new chief executive of Exel Sports, effective Nov. 6. Juvonen is recognized as a turnaround manager in Finland, where he served among others as CEO for the Nordic software company Teamware Group. He replaces Aki Karihtala, who has worked for Exel for more than 20 years. The group has not yet decided on a new assignment for Karihtala, who was promoted from senior vice president to CEO of the sports unit last March 1.
