2017-10-27 09:00:12 CEST
2017-10-27 09:00:12 CEST
REGULATED INFORMATION
Rapala VMC - Interim report (Q1 and Q3)
RAPALA VMC CORPORATION'S TRADING REPORT JANUARY TO SEPTEMBER 2017: SALES AROUND LAST YEAR'S LEVEL, STRONG THIRD QUARTER IN NORTH AMERICA
Rapala VMC Corporation
Trading report
October 27, 2017 at 10:00 a.m.
RAPALA VMC CORPORATION'S TRADING REPORT JANUARY TO SEPTEMBER 2017: SALES AROUND
LAST YEAR'S LEVEL, STRONG THIRD QUARTER IN NORTH AMERICA
January-September in brief:
* Net sales were 201.4 MEUR, down 1% from previous year (202.5). With
comparable exchange rates sales were 2% lower than last year.
* Full year (FY) guidance unchanged from H1/2017: Full year net sales expected
to be around last year's level and comparable operating profit to be clearly
below last year's level.
* The Group's strategy execution proceeding well with various initiatives
ongoing
President and CEO Jussi Ristimäki: "The sales for the first nine months were 1%
down from last year, but despite challenging market conditions we managed to
increase our sales in the third quarter compared to last year. January-September
sales of Group products were slightly ahead of last year, while Third Party
Products contributed negatively to overall sales development.
The positive highlight of the third quarter was the improved sales in our
biggest market in the North America where retail landscape has been under strong
turbulence. Nevertheless, we have been able to grow our sales from last year in
the region. Trading conditions remained challenging in other main markets,
especially in France and Russia.
Execution of our strategy of improving profitability, lightening balance sheet
and improving operational performance is proceeding well. Changes made in third
quarter to our management organization are aiming to further boost the strategy
execution. Our investments to supply chain management are yielding results and
making our supply chain more agile and flexible. Consequently, our inventories
continued to decrease in the third quarter. Improving manufacturing efficiencies
is also high on our agenda. We will elaborate more on our updated strategy and
its execution in a capital markets day organized in the first half of 2018."
Helsinki, October 26, 2017
Board of Directors of Rapala VMC Corporation
For further information, please contact:
Jussi Ristimäki, President and Chief Executive Officer, +358 9 7562 540
Jan-Elof Cavander, Chief Financial Officer, +358 9 7562 540
Olli Aho, Investor Relations, +358 9 7562 540
Market environment
Trading conditions remain challenging. Especially in the US consumers are
increasingly shifting into digital channels, which affects the retail business
structures and some of the Group's biggest customers are in financial distress.
The changes have a negative effect on sales in the marketplace, but the Group
has eventually been able to recover the lost sales from other channels in the
US. In Europe, cold and late start of the summer coupled with tightened market
conditions in certain product categories has impacted sales.
Business Review January-September 2017
The Group's net sales for the first nine months of the year were slightly below
last year. Changes in currency exchange rates increased sales by approximately
2.2 MEUR. With comparable currency exchange rates, net sales were down 2% from
last year for the nine months.
North America
With comparable exchange rates, sales in North America were above last year. The
retail landscape in the US is going through a structural change as traditional
retail business is giving way to e-commerce, which has caused turmoil in the
markets. Despite the challenges, third quarter sales increased from last year's
level partly supported by earlier deliveries of winter fishing products. The
sales in Canada were above last year's level following successful sales efforts.
The region's sales were negatively impacted by some supply problems. Weakening
of the US dollar had a slight negative impact on the region's sales.
Nordic
In the Nordic countries, the sales were below last year's level, affected by
lower hunting sales in Denmark and a cold spring and late start of the summer in
Finland. The Group's knife factory Marttiini showed strong growth supported by
the Finland 100 Anniversary Knife sales. Sales in Sweden grew from last year,
despite some supply problems and late deliveries.
Rest of Europe
Sales were below last year's level, hurt by the continuing challenges in the
region's biggest markets, Russia and France. While the Russian ruble has
strengthened, having a positive impact on the regions EUR-nominated sales, it
has not materialized into higher consumer demand. In France, the sales were
below last year's level, impacted by tightening competition and general consumer
uncertainties. Following product portfolio changes, the sales in Poland were
below last year. Business grew in the UK following the change in business model.
Portugal and the Baltic countries also showed positive growth trends.
Rest of the World
With comparable exchange rates, the sales for the region were below last year's
level, mainly affected by a decrease in sales in Thailand and Australia, where
markets are suffering. In Australia outsourcing of the warehouse operations
furthermore affected sales negatively. The sales in South Africa were above last
year's level, supported by new hunting and outdoor business and sales to Middle
East and North Africa. Sales in Latin America grew strongly from last year,
especially in Mexico. Currency exchange rate changes, notably South African
rand, had a positive impact on the regions sales.
External Net Sales by Area
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Q1-Q3 Q1-Q3 change comparable FY
MEUR 2017 2016 % change % 2016
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North America 70.8 67.7 +5% +5% 91.3
Nordic 42.6 44.2 -4% -3% 55.3
Rest of Europe 64.0 66.8 -4% -6% 81.3
Rest of the World 24.0 23.8 +1% -2% 32.7
Total 201.4 202.5 -1% -2% 260.6
------------------------------------------------------
------------------------------------------------------
Q3 Q3 change comparable FY
MEUR 2017 2016 % change % 2016
------------------------------------------------------
North America 23.2 21.3 +9% +15% 91.3
Nordic 10.8 10.9 -1% -1% 55.3
Rest of Europe 18.2 18.7 -3% -4% 81.3
Rest of the World 8.3 8.5 -2% -1% 32.7
Total 60.5 59.4 +2% +4% 260.6
------------------------------------------------------
Segment Review
Group Products
With comparable exchange rates, sales of Group Products were slightly above last
year's level.
Group fishing product sales were below last year's level mainly driven by
decreased lure sales in North America. Additionally, fishing accessories sales
decreased especially in Europe. Carp business in Europe grew after increased
strategic focus in the product group. The sales of fishing knives and tools also
increased especially in North America.
Sales of other group products were up from last year. The sales of hunting
products were supported by increased Marttiini knife sales. Winter sport
products' sales were also up from last year.
Third Party Products
The sales of Third Party Products were below last year's level.
Third party fishing product sales were behind last year, reduced by the loss of
a product category in Poland as well as the challenging market situation
affecting sales especially in Russia and France. Tightened market conditions as
well as poor spring and early summer weathers in Russia and northern Europe
further decreased the sales of third party fishing products. Winter fishing
business grew from last year driven by earlier deliveries in North America.
Net Sales by Segment
---------------------------------------------------------
Q1-Q3 Q1-Q3 change comparable FY
MEUR 2017 2016 % change % 2016
---------------------------------------------------------
Group Products 133.5 132.9 +0 % +0% 172.1
Third Party Products 67.8 69.6 -3 % -5% 88.5
Total 201.4 202.5 -1 % -2% 260.6
---------------------------------------------------------
---------------------------------------------------------
Q3 Q3 change comparable FY
MEUR 2017 2016 % change % 2016
---------------------------------------------------------
Group Products 38.6 37.9 +2% +5% 172.1
Third Party Products 21.9 21.5 +2% +1% 88.5
Total 60.5 59.4 +2% +4% 260.6
---------------------------------------------------------
Second Dividend Installment
The Annual General Meeting (AGM) held on March 30, 2017 approved the Board of
Director's proposal that a dividend of EUR 0.10 per share is paid. The dividend
will be paid in two installments, EUR 0.05 each. First dividend installment of
1.8 MEUR was paid on April 10, 2017. The Board of Directors decided in its
meeting on October 26, 2017 that the dividend record date for the second
installment of EUR 0.05 shall be October 30, 2017 and the dividend payment date
November 6, 2017. A separate stock exchange release on the second dividend
installment has been given.
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