2016-10-28 08:00:51 CEST
2016-10-28 08:00:51 CEST
REGULATED INFORMATION
Rapala VMC - Interim report (Q1 and Q3)
RAPALA VMC CORPORATION'S TRADING REPORT JANUARY TO SEPTEMBER 2016: STRONGER THIRD QUARTER IN THE US, BUT CUMULATIVE SALES STILL BEHIND LAST YEAR
Rapala VMC Corporation
Trading report
October 28, 2016 at 9:00 a.m.
RAPALA VMC CORPORATION'S TRADING REPORT JANUARY TO SEPTEMBER 2016: STRONGER
THIRD QUARTER IN THE US, BUT CUMULATIVE SALES STILL BEHIND LAST YEAR
January-September in brief:
* Nine months net sales were 202.5 MEUR, down 7% from previous year (218.6).
With comparable exchange rates sales down 6%.
* Leverage ratio (net debt to EBITDA) continues to be high and the Group is
taking measures to decrease it. The Group expects to be compliant with its
loan agreements at the year-end.
* Changes and appointments in management organization effective September
1(st) 2016.
* Full year (FY) guidance unchanged from H1/2016: Full year net sales and
comparable operating profit are expected to be below 2015 levels.
President and CEO Jussi Ristimäki: "The positive highlight of the third quarter
was the improved sales in our biggest market in the USA. The US market has been
under some turmoil this year and a merger between two of our big customers was
just finally announced early October. In Russia, which used to be our second
biggest market globally just a few years back, the situation continues to be
very challenging. Overall trading conditions continued to be difficult in many
of our main markets and 2016 will be a challenging year. Weather conditions will
be an uncertain factor during fourth quarter, which can potentially affect
winter product sales.
Following the changes in our management organization during this quarter, the
key task of the entire management is now to turn the company's financial trends,
which have been in downturn in the past few years. We are taking a fresh look at
the strategy and working on a plan of actions, which are needed to get us back
to growth track, restore the profitability and improve the capital efficiency.
We are confident that with our strong brand portfolio, truly global presence
through our own distribution network and solid manufacturing platform for our
core products we have all the necessary building blocks needed to succeed in the
future."
Helsinki, October 28, 2016
Board of Directors of Rapala VMC Corporation
For further information, please contact:
Jussi Ristimäki, President and Chief Executive Officer, +358 9 7562 540
Olli Aho, Investor Relations, +358 9 7562 540
Market environment
Year 2016 sales remain behind last year as trading conditions in the third
quarter continued to be challenging. Sales for the quarter in the biggest market
in the US were above last year's levels. The sales were also improving in Spain,
South Africa and Chile supported by expansion into new business segments. The
struggling market situation in Russia continued to strongly affect the sales.
The sales in France were also down, burdened by tightened competition and
reserved consumer market sentiment. Several markets both in Europe and Asia
witnessed changes and uncertainties, causing retailers to be careful with their
purchasing.
Favorable late summer and early fall weathers were good for the summer fishing
tackle sales, but not enough to offset the slower sales in early summer. Last
winter's poor sales left a lot of winter fishing and winter sports equipment
stock at retail, which has had a negative impact on the winter fishing and
winter sports presales.
Business Review January-September 2016
The Group's net sales for the nine months were down 7%. Changes in translation
exchange rates decreased sales by approximately 4.0 MEUR for the nine months.
Correspondingly with comparable translation exchange rates net sales were down
6% from last year for the nine months.
North America
North American sales for the nine months and third quarter were below last
year's levels, although the sales for the third quarter in the Group's biggest
market, the US were above last year, supported by fill in orders of summer
fishing products and earlier timing of ice fishing sales. While consumer demand
for Group's products was good, US retail scene witnessed some turmoil during the
nine months of the year impacting the Group, as well as the competition. During
the third quarter summer products, especially lure sales were up, while in the
nine month period retailers' destocking and changes in purchasing behavior
caused slowdown in Group's sales especially on Group branded lures. Weak
economic situation continued in Canada, which caused the overall North American
third quarter sales to decline from last year.
Nordic
In the Nordic countries the nine months and third quarter sales decreased from
last year. In Finland the third quarter sales were below last year driven by
slower winter sports and outdoor sales. The sales in Sweden, Norway and Denmark
improved from last year's levels on the third quarter and for the nine months of
the year. In Denmark and Sweden the sales were supported by recovering hunting
sales. Export sales from the Group's manufacturing units to non-Group
distribution channels were down compared to last year. Valuation of currency
nominated accounts receivable had a notable positive impact on last year's nine
month sales. Excluding these valuations, Nordic nine month sales were slightly
above last year's level.
Rest of Europe
The sales were below last year's level for the nine months and the third quarter
of the year, following slowdown in sales especially in big markets Russia and
France. Currency exchange rate changes, especially Russian Ruble, had a negative
impact on the regions sales. The instability and uncertainties in Russia and
Ukraine continued to impact sales volumes in the respective countries.
Consumers' reduced purchasing power further slowed down the sales in Russia in
the third quarter. Excluding Russia and Ukraine the sales decreased 4% from last
year with comparable rates for the nine months and decreased 6% for the third
quarter. In France the reserved market sentiment and tightened price competition
continued to burden the sales. In Poland the strong sales for the third quarter
were boosted by closeout sales of a third party category. The nine month sales
in Spain were above last year's level supported partly by increased export sales
to Latin America.
Rest of the World
The region's sales for the nine months and third quarter of the year were behind
last year. Currency exchange rate changes, especially South African Rand, had a
negative impact on the regions sales. The sales were burdened by struggling
Asian markets, especially in Southeast Asia where the Group's distribution
organization is being restructured. The sales in South Africa continued strong
and were supported by new outdoor and hunting business. The sales in Chile were
stronger than last year with growth in hunting products and group-branded
fishing tackle. Export sales from the Group's manufacturing units to non-Group
distribution channels were down compared to last year. Valuation of currency
nominated accounts receivable had a positive impact on last year's nine month
and quarterly sales.
External Net Sales by Area
------------------------------------------------------
Q1-Q3 Q1-Q3 change comparable FY
MEUR 2016 2015 % change % 2015
------------------------------------------------------
North America 67.7 73.4 -8% -8% 99.2
Nordic 44.2 45.6 -3% -2% 56.2
Rest of Europe 66.8 73.1 -9% -5% 86.9
Rest of the World 23.8 26.5 -10% -5% 35.9
Total 202.5 218.6 -7% -6% 278.2
------------------------------------------------------
------------------------------------------------------
Q3 Q3 change comparable FY
MEUR 2016 2015 % change % 2015
------------------------------------------------------
North America 21.3 21.8 -2% -2% 99.2
Nordic 10.9 11.4 -4% -4% 56.2
Rest of Europe 18.7 21.7 -14% -11% 86.9
Rest of the World 8.5 9.7 -12% -11% 35.9
Total 59.4 64.5 -8% -7% 278.2
------------------------------------------------------
Segment Review
Group Products
The Group products sales were below last year's levels for the nine months in
nearly all categories. In the third quarter the sales of fishing lures were well
above last year's level in the US, and at last year's level for the Group. The
third quarter fishing accessory sales were below last year's level. The sales of
Group Products for the nine months were above last year's levels in Spain, Chile
and South Africa.
Third Party Products
The sales of Third Party Products for the nine months and third quarter were
below last year's level. The economic situation in Russia continued to reduce
the Third Party Fishing products sales in the region. Also the difficult market
situation in France affected negatively the Third Party Products sales. Third
Party Hunting sales were up from last year for the nine months in the new
hunting distribution countries and for the third quarter in Nordic. Currency
fluctuations had major negative impact on nine month sales especially in Russia
and South Africa.
Net Sales by Segment
---------------------------------------------------------
Q1-Q3 Q1-Q3 change comparable FY
MEUR 2016 2015 % change % 2015
---------------------------------------------------------
Group Products 132.9 144.5 -8 % -7% 184.7
Third Party Products 69.6 74.0 -6 % -3% 93.5
Eliminations 0.0
Total 202.5 218.6 -7 % -6% 278.2
---------------------------------------------------------
---------------------------------------------------------
Q3 Q3 change comparable FY
MEUR 2016 2015 % change % 2015
---------------------------------------------------------
Group Products 37.9 41.0 -8% -7% 184.7
Third Party Products 21.5 23.6 -9% -7% 93.5
Eliminations 0.0
Total 59.4 64.5 -8% -7% 278.2
---------------------------------------------------------
[]
© 2024 Nasdaq, Inc. All Rights Reserved |