Exels efforts at expanding the Nordic Walking market internationally have not yet shown an any dividends, but the company stated that it will continue to invest in this emerging market in both North America and China. The Finnish companys first quarter interim report showed the effects of this investment. The Sport Division, which sells cross country ski poles and Nordic Walking Poles, reported a healthy increase in net sales, but the operating margin in the division plummeted to 4.2%, compared to 10.9% last year.
Exels management stated in a release that the recent launch of a wholly-owned U.S. subsidiary is contributing to some of the higher costs, but “Nordic Walking is gaining a clear foothold among American consumers.” The company is expecting more activity from their U.S. business by the end of 2005 and especially 2006. Exel also stated that new Nordic Walking markets will require “major investments” going forward.
In China, Exel has begun close cooperation with its distributor, CISS, and has initiated training of Nordic Walking instructors. The company said that its marketing campaigns are proceeding “according to plan.”
Exels Nordic Walking business in Europe remains healthy, but the competitive environment is increasing.
Cross Country poles remain the staple for Exel, with pre-season bookings ahead of last year due to a strong market and “successful new products” in central Europe.
The company has also recently separated its Sport Division into a wholly-owned subsidiary, named Exel Sports, also based in Finland with 25 employees. The Company is seeing the same carbon fiber shortage that several other U.S. manufacturers have reported. As a result, Exel expects that its industrial sector will see an impaired top and bottom line, although the division will still remain profitable.
