Rapala VMC - Interim report (Q1 and Q3)

RAPALA VMC CORPORATION'S TRADING REPORT JANUARY TO MARCH 2016: SALES SLIGHTLY BEHIND LAST YEAR FOLLOWING SLOWER START OF THE YEAR IN NORTH AMERICA

Rapala VMC Corporation
Trading report
April 28, 2016 at 9:00 a.m.

RAPALA VMC CORPORATION'S TRADING REPORT JANUARY TO MARCH 2016: SALES SLIGHTLY
BEHIND LAST YEAR FOLLOWING SLOWER START OF THE YEAR IN NORTH AMERICA

In brief:
  * First quarter net sales were 69.7 MEUR, down 6% from previous year (73.9).
    With comparable exchange rates sales down 4%.
  * Full year guidance unchanged. Outlook for 2016: Assuming comparable
    translation exchange rates, the Group expects full year net sales and
    comparable operating profit (excluding non-recurring items and mark-to-
    market valuations of operative currency derivatives) to be above 2015
    levels.
  * There has been no material change to the Group's financial position since
    the end of the financial year 2015.
  * The Annual General Meeting (AGM) kept on April 1, 2016 approved the Board of
    Director's proposal on a dividend of EUR 0.15 per share. Dividend of 5.5
    MEUR was paid on April 12, 2016. A separate stock exchange release on the
    decisions of the AGM was given, and up to date information on the Board's
    authorizations and other decision of the AGM are available also on the
    corporate website.


President  and CEO  Jorma Kasslin:  "The year  started a  bit slow,  but did not
include  any major surprises. In  North America the ice  fishing season ended up
being short, but simultaneously the business shifted into summer fishing already
during  the  first  quarter.  Also  in  Finland short winter burdened the winter
sports  business. In Russia the business environment continued to be challenging
with  lots of uncertainties, although some signs of stabilization could be seen.
Market  conditions are  difficult also  in some  other regions,  but we are well
positioned to face the challenges.

Our outlook for the year is stable and guidance unchanged."





Starting  from January 1, 2016 Rapala VMC  Corporation has changed its reporting
practice  and  will  not  publish  first  and  third quarter interim reports nor
arrange  a conference call. Instead, the Group will release a Trading Report for
the  first and third quarter  of the year.  Conference  call will be arranged in
conjunction with the half-year report, which will be published on July 22, 2016.



Helsinki, April 28, 2016

Board of Directors of Rapala VMC Corporation

For further information, please contact:

Jorma Kasslin, President and Chief Executive Officer, +358 9 7562 540
Jussi Ristimäki, Deputy CEO and CFO, +358 9 7562 540
Olli Aho, Investor Relations, +358 9 7562 540

Market environment

Year  2016 started nearly  as expected  despite not  reaching last year's strong
levels.  Winter season was short in  all main markets. Several markets witnessed
changes   and   uncertainties,  causing  retailers  to  be  careful  with  their
purchasing.  In  Europe  the  competition  has  tightened and the overall market
sentiment was somewhat depressed.

Business Review January-March 2016

The Group's net sales for the first quarter were down 6%. Changes in translation
exchange  rates decreased sales  by approximately 1.0 MEUR  as euro strengthened
against  many currencies but were offset by strengthening of the US dollar. With
comparable translation exchange rates quarterly net sales were down 4% from last
year.

North America

North  American sales reduced  from last year's  strong levels. Mild weather and
short  ice fishing season  affected negatively the  ice fishing sales during the
first  two months of the year. March sales were good as the summer fishing sales
began  supported by  new product  introductions. While  low fuel  prices support
consumer  demand, the US retail scene  witnessed some turmoil which had negative
effect on the sales. Weak economic situation continued in Canada.

Nordic

In  the  Nordic  countries  the  sales  decreased  from  last year. Valuation of
currency  nominated accounts  receivable had  a notable  positive impact on last
year's  sales. Excluding these  valuations, this year  sales were at last year's
level.  Despite the slower economy, sales grew  in Finland driven by increase in
hunting  sales and  a good  start for  the summer  fishing sales.  In Norway and
Sweden  sales came down from last year, largely relating to timing of shipments.
The  Norwegian economy is affected  by low oil prices  while Sweden's economy is
showing sign of strengthening.


Rest of Europe

The  sales  for  the  first  quarter  were  slightly  above last year's level in
comparable  exchange  rates.  The  instability  and  uncertainties in Russia and
Ukraine continue impacting sales in the respective countries and also in Belarus
and Kazakhstan. Rest of the region showed mostly conservative growth despite the
tightened  competition and  somewhat reserved  sentiment. Expansion into hunting
product distribution increased sales in Spain and Baltic countries.

Rest of the World

Currency  exchange rate  changes had  a notable  negative impact  on the regions
sales,  while in comparable  exchange rates the  sales were just slightly behind
last  year's  level.  Market  picture  was  mixed  with ups and downs around the
region: South Africa had strongest sales growth while Malaysia, Japan and Brazil
suffered from overall slow market situation impacted by economic uncertainties.


External Net Sales by Area



------------------------------------------------------
                       I     I change Comparable  I-IV

 MEUR               2016  2015      %   change %  2015
------------------------------------------------------
 North America      23.5  25.1    -6%        -8%  99.2

 Nordic             14.9  16.4    -9%        -9%  56.2

 Rest of Europe     24.1  24.4    -1%        +2%  86.9

 Rest of the World   7.2   8.0   -10%        -1%  35.9

 Total              69.7  73.9    -6%        -4% 278.2
------------------------------------------------------


Segment Review

Group Products

Group  fishing product sales were down from last year's strong sales, negatively
impacted  by  lower  sales  in  North  America. Group fishing product sales were
supported  by  strong  sales  of  fishing  accessories while sales of lures were
lower.

Compared  to last year both Group Products  and Third Party Products' sales were
also negatively impacted by valuation of currency nominated accounts receivable,
which supported the sales last year.

Third Party Products

The  sales of third party products were slightly up from last year in comparable
exchange rates. The economic situation in Russia greatly reduced the third party
fishing  products  sales  last  year,  but  the  drop  in sales has leveled off.
Currency  fluctuations had major negative impact  especially in Russia and South
Africa.  Third party hunting sales were up from last year in the Nordic and Rest
of Europe.



Net Sales by Segment


--------------------------------------------------------
                         I     I change Comparable  I-IV

 MEUR                 2016  2015      %   change %  2015
--------------------------------------------------------
 Group Products       47.2  50.8    -7%        -7% 184.7

 Third Party Products 22.5  23.2    -3%        +1%  93.5

 Eliminations                                        0.0

 Total                69.7  73.9    -6%        -4% 278.2
--------------------------------------------------------



[HUG#2007324]

Attachments:

Rapala VMC Corp. Trading report.pdf