Rapala VMC - Inside information

RAPALA VMC CORP.: STRATEGY UPDATE - FOCUS ON ORGANIC GROWTH WITHIN FISHING, IMPROVING RETURN ON CAPITAL AND BUILDING SOLID PLATFORM FOR FUTURE GROWTH. CODETERMINATION NEGOTIATIONS START IN FINLAND.

Rapala VMC Corporation
Stock Exchange Release
February 16, 2017 at 9:15 a.m.

RAPALA  VMC CORP.:  STRATEGY UPDATE  - FOCUS  ON ORGANIC  GROWTH WITHIN FISHING,
IMPROVING  RETURN  ON  CAPITAL  AND  BUILDING  SOLID PLATFORM FOR FUTURE GROWTH.
CODETERMINATION NEGOTIATIONS START IN FINLAND.

After  changes in  the Group's  management in  third quarter of 2016, Rapala VMC
Corporate ("the Group") initiated a process to update its future strategies.

The  Group's top line and profitability  development has been unsatisfactory and
below  the potential recently. Working capital has also remained at high levels,
putting pressure on the Group's balance sheet position.

The key objective of the strategy update is to turn the recent financial trends.
The  Group has also addressed the need to respond to the ongoing developments in
its  business  environment.  This  includes  issues  such  as digitalization and
changing  consumer  behaviour,  more  specialized  and  fast  changing trends in
fishing,  changes in  competitive and  retail landscape,  as well  as changes in
value chains.

Key near-term strategic focus areas

In order to build solid financial and operational platform for long term growth,
the Group's primary focus in the next three years will be on following areas:
  * Capturing organic growth opportunities in fishing tackle business
  * Taking determined actions in improving profitability
  * Lightening balance sheet
  * Improving the operational performance
The  upcoming strategies are  built upon utilizing  and capitalizing the Group's
existing  assets  and  capabilities,  which  form  the foundation for the future
success. These are:
  * Brand portfolio
  * Own manufacturing platform and established sourcing channels
  * Research and development capabilities
  * Broad distribution network and strong local presence all around the world
    supporting the sales of Group's own and selected synergistic third party
    products

Following  actions and principles  will be the  key drivers in  execution of the
strategy:

Organic growth within fishing tackle business
  * Deep market and customer focus.
  * Leveraging and further strengthening the Group's global innovation power.
  * Along with the leading mass market products also addressing specific product
    categories and niches within fishing where the Group has clear growth
    potential and has possibility to exploit its R&D, manufacturing, sourcing,
    sales, brand, marketing and distribution assets and capabilities.
  * Strengthening and leveraging the Group's brands with modern and innovative
    marketing and brand management. Enhancing the brand experience and reaching
    the end consumers especially through the digital channels.
  * Securing the position as valued supplier to retail customers by providing
    relevant, innovative and competitive product range and excellent customer
    service.
  * Further leveraging the existing distribution infrastructure to distribute
    synergistic 3(rd) party fishing and non-fishing product categories in a
    value adding manner: supporting sales of Group's own products, generating
    additional returns to the Group and creating value to the 3(rd) party
    principals.

Improving  the capital  efficiency: improving  profitability and  lightening the
balance sheet
  * Rigid management of the product portfolio, increasing overall profitability
    of the offering.
  * Securing the return on capital of the businesses and units and taking
    determined actions to improve the returns.
  * Tight cost and capital control allocating resources to strategically
    important areas and implementing actions to increase cost efficiency.
  * Developing the Group's supply chain management to be responsive and focus on
    optimizing the end-to-end flow of products, achieving permanent reduction in
    inventory levels and providing excellent service to the customers.

Improving the operational performance
  * Operating in integrated manner, optimizing the end-to-end performance of the
    Group and securing benefits of scale.
  * Increasing the speed, agility, responsiveness and efficiency of all
    operations.
  * Implementing systematic management processes to support strategy execution
    and investing in common tools, processes and resources to enable and
    facilitate the execution.
  * Utilizing the strong local presence, entrepreneurial commercial spirit and
    deep understanding of fishing tackle markets all around the world to
    implement Group's strategic priorities globally.

Group's  mid- to long term  target is to return  to more aggressive growth track
and  actively  seek  synergistic  growth  opportunities  also outside of fishing
tackle business.
The  Group  will  organize  a  capital  markets day during 2017 to elaborate the
updated strategy and its execution.

Codetermination  negotiations start in Finland to improve the performance of the
operations

In  line with the strategy update, one key  near-term focus area of the Group is
to improve the profitability as well as capital and operational efficiency.

Following the decisions by the Board of Directors on February 15, 2017 the Group
will  start codetermination  negotiations affecting  approximately 150 people of
the  total  of  200 employees  of  Rapala  VMC  Corporation  and Marttiini Oy in
Finland.  The aim of the negotiations will be to find solutions where the number
of  Rapala VMC Corporation's and Marttiini Oy's  employees is in line with scope
and  profitability of current operations. The measures are expected to result in
the  reduction  of  approximately  total  55-63 employees  in Rapala VMC Oyj and
Marttiini  Oy in  Finland and  will include  lay-offs and  pension arrangements.
Temporary  employment contracts will not be  continued and they are not included
in the indicated reduction amounts.

Accordingly  in Rapala lure factory in  Vääksy the negotiations will cover plans
to  transfer parts  of production  to Group's  factories in  Russia and Estonia,
which  could mean approximately 41-45 production employees reduction in Finland.
The  target of  these plans  is to  increase manufacturing efficiencies, shorten
production  lead time, decrease  level of inventories  and achieve cost savings.
Correspondingly  the  possible  transfer  of  production  together  with Group's
declined  profitability will also  lead to reorganization  of the work of white-
collar  personnel in  Vääksy factory  as well  as in  the Helsinki headquarters.
These  reorganizations will also  be covered in  the negotiations and could mean
approximately 4-8 employees reduction.

Marttiini  Oy knife  factory will  start codetermination negotiations concerning
duplicate  production functions (among others  assembly, shipping and packaging)
in  Rovaniemi  and  Pärnu,  Estonia,  factories.  This planned reorganization of
production  could mean  maximum of  10 employees reduction  in Rovaniemi. By re-
organizing  its production process  Marttiini Oy could  achieve cost savings and
improve its production process as well as profitability.

Possible  employee reductions relating to the above codetermination negotiations
will  start on  spring 2017. The  aim is  to have  about 1.5 MEUR annual savings
which  will be  realized on  2018. Non-recurring costs  related to  any personal
reductions,  which are recorded in the year  2017, are revised at the end of the
negotiations.

Helsinki, February 16, 2017

RAPALA VMC CORPORATION
Jussi Ristimäki
Chief Executive Officer

For further information, please contact:

Rapala Group:
Jussi Ristimäki, Chief Executive Officer, tel. +358 40 700 1344
Olli Aho, Investor Relations, tel. +358 9 7562 540
Rapala factory:
Arto   Nygren,   Executive   Vice   President   -  Lure  Manufacturing,  tel.  +
358 40 5058 998
Marttiini factory:
Päivi Ohvo, Managing director, tel. + 358 40 3110 610

Distribution: Nasdaq Helsinki and main media

Rapala VMC Corporation ("the Group") is a leading fishing tackle company and the
global  market leader in fishing lures,  treble hooks and fishing related knives
and  tools.  The  Group  also  has  a  strong  global  position in other fishing
categories  and it is  one of the  leading distributors of  outdoor, hunting and
winter  sport  products  in  the  Nordic  countries.  The  Group has the largest
distribution  network  in  the  industry.  The main manufacturing facilities are
located  in Finland,  France, Estonia,  Russia, Indonesia  and the UK. The Group
brand  portfolio includes the  leading brand in  the industry, Rapala, and other
global  brands  like  VMC,  Sufix,  Storm,  Blue  Fox,  Luhr Jensen, Williamson,
Dynamite  Baits, Mora Ice, StrikeMaster, Marttiini and Peltonen. The Group, with
net sales of EUR 261 million in 2016, employs some 2 800 people in 40 countries.
Rapala VMC Corporation's share is listed and traded on the Nasdaq Helsinki stock
exchange since 1998.

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Rapala VMC Corp. Stock exchange release.pdf