A year of restructuring and modest result for the Algol Group in 2003

The 2003 operating period for the Algol Group was highlighted by weaker
financial results compared to the previous year and by preparations for the
Group´s organisational restructuring. Group result declined considerably, while
turnover and total sales were marginally lower than in 2002. The solidity of
the Algol Group continues to be very good.

According to Magnus Bargum, Managing Director of Algol, the modest result in
2003 was anticipated. He lists the main reasons as being the general economic
situation as well as internal restructuring within the Group.

Particularly in the Finnish market there was weak demand for machinery and
equipment but also for raw materials due to the ongoing recession within
industry combined with low levels of investment. This situation was reflected
in the performance of the business areas within the Algol Group that supply
industrial chemicals as well as machinery and equipment. Traditionally these
sectors closely follow economic trends within industry. The result of the Group
was balanced by growth in the sales of industrial chemicals in the Baltic and
Russian markets, and also by success in sales of pharmaceutical products.

Group financial results were also impacted by considerable nonrecurring
expenses related to the restructuring of the Group and internal transactions
connected with this. All in all, 2003 was a year of making preparations:
Algol´s five sales divisions were formed into three main business areas, each
with its own specialised operative unit. As of the beginning of 2004 the new
companies - Algol Chemicals Oy, Algol Technics Oy and Algol Pharma Oy - and
their subsidiaries operate within the Algol Group under the Parent Company
Algol Oy.

According to Magnus Bargum, the restructuring clarifies the Group structure and
offers improved possibilities for Algol´s business areas to specialise in their
areas of expertise, also in the future. Two key transactions were made in 2003:
Algol sold its commercial steel operations to Onninen Oy, and it purchased
CliniLab Oy, which is specialised in diagnostic products.

Magnus Bargum believes that the start of the year provides grounds for cautious
optimism for strengthening the outlook of growth. The signs of gradual recovery
in the global economy have accelerated predictions that Finnish industrial
production will experience an upturn. However, Magnus Bargum adds that there
continues to be uncertainty due to slow economic growth within Europe and also
the transfer of production and investments out of Finland to lower-cost
markets.[

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