RAPALA VMC CORPORATION’S ANNUAL ACCOUNTS 2021: ALL-TIME HIGH EBIT AND GROUP PRODUCT SALES – STRATEGY EXECUTION BITING HARD COUPLED WITH STRONG MARKET DEMAND
Rapala VMC Corporation
Financial Statement Release
February 10, 2022 at 4:00 p.m.
RAPALA VMC CORPORATION’S ANNUAL ACCOUNTS 2021: ALL-TIME HIGH EBIT AND GROUP PRODUCT SALES – STRATEGY EXECUTION BITING HARD COUPLED WITH STRONG MARKET DEMAND
January-December (FY) in brief:
- Net sales were 294.3 MEUR, up 13% from previous year (261.3). Organically sales were 14% higher than last year.
- Operating profit was 32.1 MEUR (10.7).
- Comparable operating profit* was 32.7 MEUR (21.5).
- Hybrid bond repaid successfully in November, 2021
- Cash flow from operations was 24.4 MEUR (42.5).
- Net profit for the period was 19.8 MEUR (3.4).
- Earnings per share was 0.45 EUR (0.04).
- Dividend proposal is 0.15 EUR per share (- EUR).
- 2022 guidance: Full year comparable operating profit to be in line with the previous year.
July-December (H2) in brief:
- Exceptional swings between first and second half of the year both in 2020 and 2021 as these pandemics impacted years have not followed regular seasonality
- Net sales were 134.6 MEUR, down 7% from previous year (144.2). With comparable exchange rates sales were 7% lower than last year.
- Operating profit was 5.8 MEUR (11.6).
- Comparable operating profit* was 6.2 MEUR (17.3).
- Cash flow from operations was 1.2 MEUR (29.1).
- Net profit for the period was 1.7 MEUR (7.2).
- Earnings per share was 0.02 EUR (0.16).
* Excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability. Other items affecting comparability include material restructuring costs, impairments, gains and losses on business combinations and disposals, insurance compensations and other non-operational items.
Rapala Group presents alternative performance measures to reflect the underlying business performance and to enhance comparability between financial periods. Alternative performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS. Definitions and reconciliation of key figures are presented in the financial section of the release.
President and CEO Nicolas Cederström Warchalowski: “Our Rapala VMC team members around the world stood shoulder-to-shoulder in 2021 and successfully navigated around all the pandemic related obstacles in our way to deliver an All-Time-High record-breaking year. The health & safety of our team members have been in key focus from the very start of the pandemic, the strict operational watchtowers used in 2020 were kept in place also in 2021 and as a result Rapala VMC suffered relatively few pandemic related disruptions in 2021. On the contrary, we benefitted from the demand surge in the sport fishing industry.
I am so proud to look back at 2021 and feel very privileged to lead a team who together have accomplished these great results. We have several newly promoted managers in our group who really stepped up to the occasion and helped us deliver an overall impressive year.
Our net sales in 2021 increased by 13% to 294.3 MEUR despite the significant shortfall of having no Shimano and much less third party brands in our key European markets in 2021. With the increased focus on group brands, these brands achieved 227.7 MEUR of sales which also was a new record. We also achieved our highest comparable EBIT ever of 32.7 MEUR in 2021. On top, we fully repaid the costly hybrid bond in 2021, meaning that our balance sheet now is strong and will provide a great foundation for future growth.
2021 marked a new chapter for Rapala VMC, in that our group no longer were to distribute Shimano in the largest markets in Europe. During 2021 several thousand of Shimano SKUs were resolutely phased out and several thousand of Okuma SKUs were being prepared for a pan European & Russia launch in 2022. A monumental task, which has resulted in that we in 2022 will begin to sell a rod & reel portfolio based entirely on group brands. This will provide a great robust growth pillar for our group for many years to come!
I am especially proud to announce, that I consider 2021 as our break-through year in terms of sustainability. Without clean and healthy waters, there would be no angling. And there certainly would be no Rapala VMC. Our ambition is to take a leading position in sustainability within the sport fishing industry by relentless work over the coming years. We know that we set the bar high, but this only inspires us to work harder.
With fewer management layers, less bureaucracy, less SKUs, fewer distribution centers, sharper brand strategies, an improved financial & operational platform Rapala VMC today moves faster, executes our strategy with more ease and we have more fun while working together as a tighter ONE RAPALA VMC team.
Having finalized the diligent clean-up of all legacy issues back in 2020, incl. the important ramp-down of the Batam production unit, our focus has shifted into becoming a united group brand & innovation driven sport fishing powerhouse. This great transformational growth journey has only begun, and it is with great excitement that I look forward to utilizing the full potential of Rapala VMC over the years to come and also take a leading position in sustainability within the sport fishing industry.”
Key figures
| H2 | H2 | Change | FY | FY | Change | |
| MEUR | 2021 | 2020 | % | 2021 | 2020 | % |
| Net sales | 134.6 | 144.2 | -7% | 294.3 | 261.3 | +13% |
| Operating profit | 5.8 | 11.6 | -50% | 32.1 | 10.7 | +200% |
| % of net sales | 4.3% | 8.0% | 10.9% | 4.1% | ||
| Comparable operating profit * | 6.2 | 17.3 | -64% | 32.7 | 21.5 | +52% |
| % of net sales | 4.6% | 12.0% | 11.1% | 8.2% | ||
| Cash flow from operations | 1.2 | 29.1 | -96% | 24.4 | 42.5 | -43% |
| Gearing % | 50.7% | 31.6% | 50.7% | 31.6% | ||
| EPS, EUR | 0.02 | 0.16 | 0.45 | 0.04 | +1108% |
* Excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability. “Other items affecting comparability” include material restructuring costs, impairments, gains and losses on business combinations and disposals, insurance compensations and other non-operational items.
Rapala Group presents alternative performance measures to reflect the underlying business performance and to enhance comparability between financial periods. Alternative performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS. Definitions and reconciliation of key figures are presented in the financial section of the release.
Market Environment
In 2021, trading conditions were on a good level and largely impacted by the COVID-19 pandemic. Retail and consumer demand was strong across the Group’s key markets, and overall business environment was favorable supporting the Group’s excellent performance. Popularity of outdoor activities remained on a high level even though COVID-19 restrictions started to ease globally compared to the prior year. Good winter season in Nordics and North America contributed also positively to winter sports and ice fishing businesses.
Business Review January-December 2021
The Group’s net sales for the year were 13% above last year with reported translation exchange rates. With comparable translation exchange rates, net sales were organically up by 14% from the comparison period. Following the Group’s fast execution of ONE RAPALA VMC strategy, Group Products sales grew strongly from 2020 across the main product categories, whereas Third Party sales decreased mainly due to the termination of certain Third Party distribution agreements.
North America
Sales in North America increased by 22% from the comparison period with reported translation exchange rates and by 26% with comparable translation exchange rates.
Consumer demand for fishing gear in the North American market was on a high level throughout the year. First half of the year was exceptional with continued strong demand from the end of 2020. Also, the second half was solid compared to the strong comparison period which was characterized by the surge in demand after COVID-19 restrictions. Overall, a very strong year in North America which is illustrated by the double-digit growth across the Group product categories.
Nordic
Sales in the Nordic market increased by 9% from the comparison period. With comparable translation exchange rates sales were up by 8%.
Improved retail and end-consumer demand for fishing gear and good winter conditions increased sales from the previous year. Sales grew steadily in both halves of the year mainly driven by the Group fishing and winter sports product categories. During the year 13 Fishing product offering was successfully launched and well received by customers in the Nordic market.
Rest of Europe
Sales in the Rest of Europe market increased by 1% from the comparison period. With comparable translation exchange rates sales were up by 2% from the previous year.
In the first half of the year, the Rest of Europe market sales increased significantly with continued strong demand from the end of 2020. In the second half of the year, market demand was still on a good level, but not as high as in the comparison period, leading to lower sales figures than in the second half of 2020. Overall, the Rest of Europe market sales grew from the comparison period driven by the Group product categories.
Rest of the World
With reported translation exchange rates, sales in the Rest of the World market increased by 12% from the comparison period. With comparable translation exchange rates, sales increased by 11% compared to the previous year.
In Rest of The World market demand for the Group´s offering was solid throughout the year, and majority of the regional areas witnessed healthy growth from the previous year. Market’s fast recovery continued from the end of 2020, and sales development was especially strong in the first half of the year. Full year sales of the region grew with double digit pace despite the termination of certain Third Party distribution agreements having a significant negative sales impact.
External Net Sales by Area
| FY | FY | Change | Comparable | |
| MEUR | 2021 | 2020 | % | change % |
| North America | 134.8 | 110.2 | +22% | +26% |
| Nordic | 45.5 | 41.6 | +9% | +8% |
| Rest of Europe | 80.6 | 79.8 | +1% | +2% |
| Rest of the World | 33.4 | 29.7 | +12% | +11% |
| Total | 294.3 | 261.3 | +13% | +14% |
| H2 | H2 | Change | Comparable | |
| MEUR | 2021 | 2020 | % | change % |
| North America | 64.9 | 69.8 | -7% | -7% |
| Nordic | 20.2 | 19.3 | +5% | +4% |
| Rest of Europe | 33.7 | 38.2 | -12% | -13% |
| Rest of the World | 15.8 | 16.9 | -7% | -9% |
| Total | 134.6 | 144.2 | -7% | -7% |
Financial Results and Profitability
Comparable (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) operating profit increased by 11.2 MEUR from the comparison period. The change in translation exchange rates was negative and with comparable translation exchange rates comparative operating profit increased by 11.8 MEUR. Reported operating profit increased by 21.4 MEUR from the previous year and the items affecting comparability had a negative impact of 0.6 MEUR (10.8) on reported operating profit.
Comparable operating profit margin was 11.1% (8.2) for the year. The increased profitability compared to the previous year was driven by the strong sales and more favorable product mix as the share of higher margin Group Products sales of total sales increased. Furthermore, good winter conditions had a positive impact on sales and profitability. Other key drivers behind the strong profitability included Group’s supply chain ability to react fast to the rapid shift in demand and continuous actions to implement the ONE RAPALA VMC strategy.
Reported operating profit margin was 10.9% (4.1) for the year. Reported operating profit included impact of mark-to-market valuation of operative currency derivatives of -0.2 MEUR (-0.1). Net expenses of other items affecting comparability included in the reported operating profit were -0.4 MEUR (-10.7).
Total financial (net) expenses were 4.1 MEUR (4.2) for the year. Net interest and other financing expenses were 2.3 MEUR (3.2) and (net) foreign exchange expenses were 1.8 MEUR (1.0).
Net profit for the year increased by 16.4 MEUR and was 19.8 MEUR (3.4) and earnings per share was 0.45 EUR (0.04). The share of non-controlling interest in net profit was 1.5 MEUR (1.0).
Key figures
| H2 | H2 | Change | FY | FY | Change | |
| MEUR | 2021 | 2020 | % | 2021 | 2020 | % |
| Net sales | 134.6 | 144.2 | -7% | 294.3 | 261.3 | +13% |
| Operating profit / loss | 5.8 | 11.6 | -50% | 32.1 | 10.7 | +200% |
| Comparable operating profit * | 6.2 | 17.3 | -64% | 32.7 | 21.5 | +52% |
| Net profit / loss | 1.7 | 7.2 | -76% | 19.8 | 3.4 | +482% |
| * Excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability. Other items affecting comparability include material restructuring costs, impairments, gains and losses on business combinations and disposals, insurance compensations and other non-operational items. | ||||||
Bridge calculation of comparable operating profit
| H2 | H2 | Change | FY | FY | Change | |
| MEUR | 2021 | 2020 | % | 2021 | 2020 | % |
| Operating profit/loss | 5.8 | 11.6 | -50% | 32.1 | 10.7 | +200% |
| Mark-to-market valuations of operative currency derivatives | 0.0 | 0.0 | 0.2 | 0.1 | ||
| Other items affecting comparability | 0.5 | 5.7 | 0.4 | 10.7 | ||
| Comparable operating profit | 6.2 | 17.3 | -64% | 32.7 | 21.5 | +52% |
| More detailed bridge of comparable operating profit and definitions and reconciliation of key figures are presented in the financial section of the release. | ||||||
Segment Review
Group Products
With comparable translation exchange rates, Group Products sales increased by 42.5 MEUR from the comparison period. Demand for the Group products was on a strong level and mainly driven by fishing’s increased popularity as an outdoor activity and good winter conditions. On a full year level, majority of the Group product categories witnessed high growth, and geographically Group Products sales was especially strong in the North American market.
Third Party Products
With comparable translation exchange rates, Third Party Products sales were 7.2 MEUR below the comparison period. As expected, the termination of certain Third Party distribution agreements had negative impacts on sales, particularly on the Nordic, Rest of Europe and Rest of the World markets. However, despite the decreased sales, the comparable operating profit for Third Party Products was above the comparison period.
Net Sales by Segment
| FY | FY | Change | Comparable | ||
| MEUR | 2021 | 2020 | % | change % | |
| Group Products | 227.7 | 187.5 | +21% | +23% | |
| Third Party Products | 66.6 | 73.8 | -10% | -10% | |
| Total | 294.3 | 261.3 | +13% | +14% | |
| H2 | H2 | Change | Comparable | ||
| MEUR | 2021 | 2020 | % | change % | |
| Group Products | 107.2 | 109.2 | -2% | -2% | |
| Third Party Products | 27.4 | 35.0 | -22% | -23% | |
| Total | 134.6 | 144.2 | -7% | -7% | |
Comparable operating profit by Segment
| H2 | H2 | Change | FY | FY | Change | |
| MEUR | 2021 | 2020 | % | 2021 | 2020 | % |
| Group Products | 7.5 | 19.1 | -61% | 29.5 | 23.4 | +26% |
| Third Party Products | -1.3 | -1.8 | +28% | 3.2 | -1.9 | +268% |
| Comparable operating profit | 6.2 | 17.3 | -64% | 32.7 | 21.5 | +52% |
| Items affecting comparability | -0.4 | -5.7 | +93% | -0.6 | -10.8 | +95% |
| Operating profit / loss | 5.8 | 11.6 | -50% | 32.1 | 10.7 | +200% |
Financial Position
Cash flow from operations was on a good level at 24.4 MEUR (42.5) driven by the strong profitability but impacted negatively by the net change in working capital. Main driver of the negative working capital development was supply chain related disruptions impact to inventory levels, mainly due to the longer freight times and increased in transit stocks. Compared to the previous year, the net change of working capital decreased by 23.3 MEUR and was -2.9 MEUR (20.4) in total.
End of the year inventory in 2021 was 86.2 MEUR (68.8). The impact of change in allowance on inventory was positive 1.8 MEUR, but changes in translation exchange rates on inventory were negative 2.3 MEUR. Main drivers of the increased inventory were higher than normal in transit stocks and decisive actions to increase inventory levels in selected categories with good underlying demand. Also, new Okuma products started to flow into the inventory.
Net cash used in investing activities increased from the comparison period amounting to 22.7 MEUR (3.8). Capital expenditure was 14.0 MEUR (5.0) and disposals 1.6 MEUR (1.2). Increased capital expenditure was mostly driven by the Okuma Europe and Russia related acquisition.
Liquidity position of the Group was good. Undrawn committed long-term credit facilities amounted to 59.9 MEUR at the end of the year. Gearing ratio increased and equity-to-assets ratio decreased from last year. The Group is currently compliant with all financial covenants and expects to comply with all requirements set in the financing agreements also in the future. Group’s cash position remains strong, and cash and cash equivalents amounted 27.8 MEUR at December 31, 2021. The Group redeemed the EUR 25 million Hybrid Bond on November 15, 2021.
Key figures
| H2 | H2 | Change | FY | FY | Change | |||
| MEUR | 2021 | 2020 | % | 2021 | 2020 | % | ||
| Cash flow from operations | 1.2 | 29.1 | -96% | 24.4 | 42.5 | -43% | ||
| Net interest-bearing debt at end of period | 70.6 | 45.2 | +56% | 70.6 | 45.2 | +56% | ||
| Gearing % | 50.7% | 31.6% | 50.7% | 31.6% | ||||
| Equity-to-assets ratio at end of period, % | 44.2% | 52.5% | 44.2% | 52.5% | ||||
| Definitions and reconciliation of key figures are presented in the financial section of the release. | ||||||||
Strategy Implementation
The strategic target of the Group is to become a united group brand & innovation driven sport fishing powerhouse. Current strategic actions, with significantly ramped up capabilities and improved speed of strategy execution, aim to utilize the full potential of Rapala VMC in the future and to also take a leading position in sustainability within the sport fishing industry.
The core of the Group’s strategy is based on six key building blocks that are all interconnected and shared around the Group in all business units. Future strategies are built upon utilizing and capitalizing the brand portfolio, manufacturing and sourcing platform, research and development knowledge, as well as the broad sales network and strong local presence around the world. Focus and speed are in the center of the strategic decision-making process to enable focus and agile actions in the competitive landscape. The overall strategy execution is progressing quickly as several of the ONE RAPALA VMC action plan elements are proving out to be highly synergistic between each other.
Team/Culture – The first strategic building block is associated with the foundation that all business units and functions strive for togetherness as a one strong winning entity. This enables the entire Group culture to become more united, collaborative, dynamic and growth oriented. The cultural change into one common Rapala VMC identity in all business units worldwide took a major step forward in 2021 despite the continued global pandemic. Critical restructurings and new managerial changes have allowed the Group to become more united, agile, and ready for future growth than ever before.
Sustainability – We fight together to ensure that future generations get to enjoy fishing and the great outdoors. The aim is to become the top company in the fishing tackle industry behind concrete sustainability actions from everyone in our team to ensure that we make a real and long-lasting difference. The group has progressed rapidly in its target to become one of the leading fishing tackle companies in terms of sustainability in the future. Sustainability action plans for multiple brands have been finalized, which include targets for renewable energy use, introduction of plastic-free packaging and shifting to more ecological raw materials in production.
Consumer – Focus on end-users is a critical part of the strategy. The aim is to lead the market and bring newest trends to the fishing industry by offering innovative and exciting products. The group has put emphasis on developing a new e-commerce platform which launched in EU during 2021. This is an agile, sales-driven channel that offers premium customer service, knowledge, entertainment and value. Launch for North America is planned for 2022. The new e-commerce platform underlines the Group’s ambition to become more directly connected with consumers.
Customer – Relationships with key customers and winning position in local markets are emphasized with deep customer and market know-how as well as continuously investing in all sales channels. The Group has established a new end-to-end pricing process which is centrally managed and coordinated. By centralizing the pricing process, the Group can serve its customers more comprehensively and be more coherent in an interconnected fishing industry.
Product development/Innovation – R&D and PD&I functions are becoming even stronger competitive advantages for the entire Group at the same time as fishermen around the world demand new innovations to catch more fish. The Group PD&I department had been reorganized to address consumer and customer needs on a global scale. The new PD&I team is collaborating strongly with sales and marketing departments to ensure extensive regional product relevance and long-term product planning. Additionally, the Group started its largest SKU clean-up in company history, which continues in 2022 to give more focus on Group-owned brands and future winners.
Operations/Finance – The Group continues to invest in its operations to make a step-change in operational excellence, to improve working capital efficiency and profitability. Building an integrated business planning model with global S&OP process is developing well and will further strengthen capital efficiency and improve availability of key items. The Group also continued its centralization efforts by transferring the Baltic warehousing operations from Kaunas, Lithuania to the existing distribution center in Pärnu, Estonia in December 2021. As a result of successful transformation efforts, the Pärnu distribution center is now ready to serve all the Nordic and Baltic customers under one roof.
Product Development
With a strengthened PD&I team firmly in place, the foundation for future development and innovation projects has been strengthened significantly. Under newly clarified category leadership, product development teams have been assigned to five key regions globally ensuring optimum efficiency in identifying and addressing consumer needs. A key focus in the second half of 2021 was on the development of long-term product plans for our key brands. Developing clear and concise product road maps in the 3-5 year time horizon has been a key driver in planning for the future. Fostering the collaborative efforts between sales and marketing has been instrumental in uncovering new and emerging market opportunities around the world. In addition to this deeper long-term planning and organizational change, excitement remained high at the trade and consumer levels with a multitude of innovative new products coming to market.
New introductions in both open water and ice fishing lead to high interest in key markets globally. In fishing lures we saw exciting innovations under the new Flash-X series, as well as a new and improved sustainable packaging option. Continued success of balsa baits drove growth around the world with strong additions to the Elite and OTT’s Garage families. The Rod and Reel category saw a tremendous level of excitement with the introduction of Okuma in Europe as well as a strong launch of new 13 Fishing products globally. New offerings in both Rapala and Williamson branded fishing rods were also launched securing a very well rounded assortment across multiple brands and price points. VMC continued its drive as one of our key brands with extensive new product introductions from the Americas to APAC and Europe. A multitude of new hook and terminal tackle designs developed specifically to satisfy acute regional needs were brought to market. In fishing lines Sufix again made waves with its proprietary “Gel Phase Technology” and the all new Advance Fluorocarbon leader material. A stronger, more abrasion resistant leader that’s virtually invisible underwater. Overall, 2021 was a strong year globally for a wide array of meaningful new product introductions. Increased innovation and development efforts across all categories will undoubtably pave the way for new frontiers in our product mix for years to come.
Sustainability
The Group aims to become one of the leading fishing tackle companies in terms of sustainability by 2024. During the highly successful year of 2021, the strategy implementation in the company proceeded as scheduled and we were able to deliver impressive results in multiple areas. In the beginning of the year, we launched a groundbreaking Sufix Recycline monofilament fishing line that is made entirely from recycled raw materials. We also introduced the first-ever plastic-free packaging for Marttiini knives as well as for Rapala Nauvo and Harmaja lures – achievements that serve our sustainability target to introduce more ecological packaging into the markets. Marttiini became the first carbon neutral brand in the Group’s brand portfolio, showing our commitment to reduce CO2 emissions in our production units. Rapala European lure manufacturing units in Finland, Russia and Estonia, as well as Marttiini production units in Finland and Estonia, have shifted to 100% renewable energy.
The inclusion of Rapala VMC employees in our sustainability work has taken a striking start. During the year, our staff in Helsinki HQ attended Clean Beaches event in Helsinki (organized together with Keep the Archipelago Tidy Association, PSS ry) to educate the staff on environmental matters. Similar campaign was also organized in the UK for Dynamite Baits’ staff. An example of our social responsibility is organizing the first lure recycling campaign in Finland to collect and refurbish excess lures from the anglers, which were repaired by local fishing organizations and donated to young anglers to support their hobby. This campaign was organized by Rapala VMC together with Finnish Federation for Recreational Fishing (SVK) and a retail chain Motonet. As planned, we successfully established multiple internal channels to communicate our sustainability targets to our staff. We have also activated in our communication outside the company by publishing several articles regarding our sustainability ambitions. To further enhance our visibility in this topic, we will launch a new sustainability website for our brands and considerably update our sustainability report during 2022.
To extend our sustainability work also to our supply chain, we updated our Supplier Code of Conduct (sCoC) to better reflect with our current sustainability targets. The new sCoC will be gradually implemented in our units from 2022 onwards.
Rapala VMC prepares to the upcoming EU taxonomy regulation and has investigated its business in comparison to the criteria of the taxonomy. Rapala VMC will publish its responsibility report together with 2021 Financial Statements during week 9 (beginning on February 28, 2022). The report meets the requirements for non-financial reporting, including information regarding the EU Taxonomy Regulation.
Organization and Personnel
Average number of personnel was 1 792 (2 105) for the full year and 1 765 (2 034) for the last six months. At the end of December, the number of personnel was 1 757 (1 971), decrease caused mainly from the ramp-down of the lure manufacturing operations in Indonesia.
Short-term Outlook and Risks
General market demand for fishing products has been on a high level and is expected to gradually normalize. However, the Group expects the overall demand for fishing tackle to stay on a higher level compared to pre-pandemic levels.
The Group’s supply chain, including own factories and subcontractors, is currently working robustly, but global supply chain disruptions are affecting delivery times and availability of products. The COVID-19 pandemic continues to have an impact on the business both in increasing demand for fishing products as well as increasing health and safety measures in all operations of the Group. In addition, weather changes and disruptions or cost increases in freight costs may affect the results of the Group. Furthermore, changes in EUR/USD exchange rate have an impact on the Group due to large purchase and sales volumes in USD. The Group expects 2022 full year comparable operating profit (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) to be in line with the previous year.
Short term risks and uncertainties and seasonality of the business are described in more detail in the end of this report.
Other significant events
Rapala VMC Corporation and Okuma Fishing Tackle Co Ltd strengthen strategic co-operation. The Board of Directors of Rapala VMC has resolved on a directed issue of 315 000 treasury shares to Okuma
Rapala VMC announced on January 27, 2021 the acquisition of Okuma European and Russian trademarks and associated intangible assets against a consideration of USD 8 million out of which an amount of USD 4 million was a deferred payment.
As part of the deferred payment the Board of Directors of Rapala VMC resolved on a directed issue of 315 000 treasury shares to Okuma, based on an authorization granted by the Rapala VMC’s Annual General Meeting held on March 25, 2021. These shares form a significant portion of the consideration paid by Rapala VMC to Okuma for the purposes of strengthening strategic co-operation between the parties, and Rapala VMC therefore has a weighty financial reason for deviating from the shareholders’ pre-emptive subscription right.
The subscription price for the shares is EUR 9.90 per share, which was determined on the basis of the volume weighted average price of Rapala VMC’s shares on Nasdaq Helsinki Ltd during the period of August 2, 2021 to August 6, 2021. The subscription price will be recorded in the Rapala VMC’s reserve for invested unrestricted equity.
After the transfer of 315 000 treasury shares to Okuma Rapala VMC holds 50 236 treasury shares.
Proposal for profit distribution
The Board of Directors proposes to the Annual General Meeting that a dividend of 0.15 EUR for 2021 (- EUR) per share is distributed from the Group’s distributable equity and remaining distributable funds are carried forward to retained earnings. There have been no material changes in the parent company’s financial position since 31 December 2021, the liquidity of the parent company remains good and the proposed dividend does not risk the solvency of the company.
Financial Statements and Annual General Meeting
Financial Statements for 2021 and Corporate Governance Statement will be published in week 9 commencing on February 28, 2022. Annual General Meeting is planned to be held on March 23, 2022.
Half Year Financial Report 2022 will be published on July 14, 2022.
Helsinki, February 10, 2022
Board of Directors of Rapala VMC Corporation
For further information, please contact:
Nicolas Cederström Warchalowski, 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
A conference call on the financial year result will be arranged on February 11, 2022 at 1:00 p.m. Finnish time (12:00 a.m. CET). Please dial +44 (0)330 336 9600 or +1 646 828 8082 or +358 (0)9 7479 0572 (pin code: 238808) five minutes before the beginning of the event. A replay facility will be available for 14 days following the teleconference. The number to dial +44 (0) 207 660 0134 (pin code: 2682060). Financial information and teleconference replay facility are available at www.rapalavmc.com.
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