RAPALA VMC CORPORATION’S HALF YEAR REPORT H1/2021: STRONG GROWTH IN PROFITABILITY DRIVEN BY HIGH MARKET DEMAND AND STRONG WINTER SEASON AS WELL AS SIGNIFICANTLY FASTER THAN EXPECTED IMPLEMENTATION OF THE NEW ONE RAPALA VMC STRATEGY
Rapala VMC Corporation
Half Year Financial Report
July 15, 2021 at 5:00 p.m.
RAPALA VMC CORPORATION’S HALF YEAR REPORT H1/2021: STRONG GROWTH IN PROFITABILITY DRIVEN BY HIGH MARKET DEMAND AND STRONG WINTER SEASON AS WELL AS SIGNIFICANTLY FASTER THAN EXPECTED IMPLEMENTATION OF THE NEW ONE RAPALA VMC STRATEGY
January-June (H1) in brief:
- Net sales were 159.6 MEUR, up 36% from previous year (117.1). With comparable exchange rates sales were 41% up from previous year.
- Operating profit was 26.3 MEUR (-0.8).
- Comparable operating profit* was 26.5 MEUR (4.2).
- Earnings per share was 0.43 EUR (-0.12).
- Cash flow from operations was 23.1 MEUR (13.4).
- Inventories were 73.8 MEUR (83.5), down 12%.
- Net interest-bearing debt was 30.5 MEUR (63.5).
- Short-term outlook unchanged from April 20, 2021: The Group expects 2021 full year comparable operating profit* to increase significantly from the previous year.
* 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.
President and CEO Nicolas Warchalowski: “We experienced a record first half of the year in 2021 following high demand in the fishing tackle industry and strong winter season as well as and significantly faster than expected strategy implementation. Fishing industry has experienced a strong increase in fishing participation around the world both from new anglers and returnees, which has been seen in crowded fishing shores and fishing docks as well as half-empty shelves in fishing stores in the spring and early summer.
We achieved great financial results in the first six months as our net sales increased by 36% from previous year, despite exiting certain Third Party categories. Following higher sales and successful turnaround of the Group, we significantly increased comparable operating profit to 26.5 MEUR for the first half of the year. Strong continued focus on cash flow management yielded great results as well: operative cash flow for the first half improved to 23.1 MEUR. We have also been successful in keeping our team members safe as there has been relatively few COVID cases in the Group in total. This is due to strong commitment to strict health and safety regulations by our team members around the world.
The implementation of our ONE RAPALA VMC business plan has continued to progress with a very rapid pace. As a result, we are well ahead of our initial timelines. Batam plant was closed down in an aggressive seven months time schedule and below internal cost budget. Additionally, we have consolidated our Nordic distribution centres in a record time of 21 months ahead of the original plan. The new distribution center is located in Pärnu, Estonia, and has started to serve our customers with excellence. Furthermore, our five new PD&I centers were fully operational and working well together five months ahead of schedule.
We have already cut a significant number of SKUs in Europe, and globally in soft plastic categories. This work will take a considerable step forward in the next quarters as we will expand this to all other regions and categories to execute the largest SKU clean-up in the company history. Additionally, we will consolidate our brand portfolio to favor future winners. Sustainability is one of the core fundamentals in our future strategy work and we are now beginning to take the leading position in sustainability within sport fishing industry. Operationally, we will continue to optimize our distribution centers and production facilities. In the lure factory in Pärnu, Estonia, we will invest in a new painting unit to reduce lead times, improve flexibility and scale up capacity.
I’m also extremely excited of the start of our collaboration with Okuma. We are preparing for massive marketing campaigns ahead of the launch of Okuma rods, reels and combos in Europe in 2022. The addition of Okuma products to our brand portfolio will release untapped potential in the category, which will further enhance the Group’s product assortment for the future. As a demonstration of fast strategy execution, our key value drivers show positive development: solid 54% growth in Group Products sales, gross margin is increasing and investment in rod and reel segment are generating strong sales growth in the category.
All in all, I am extremely satisfied on the tremendous work by our team for being able to execute our ONE RAPALA VMC strategy at an amazing speed. At the same time, we have generated strong sales as fishing has been one of the few COVID-safe free time activities. Now, when societies start to re-open, consumers are partly going back to pre-pandemic recreational activities. In Europe, we currently see decreasing retail store activity in fishing, which will likely impact pre-orders for 2022. The general market sentiment in the overall industry is expected to cool down significantly also in North America with a short delay compared to Europe. However, private investments into fishing boats and global trends in outdoor and sport fishing are expected to take the fishing market to somewhat higher level than prior to the pandemic.
Key figures
| H1 | H1 | Change | FY | |
| MEUR | 2021 | 2020 | % | 2020 |
| Net sales | 159.6 | 117.1 | +36% | 261.3 |
| Operating profit | 26.3 | -0.8 | 10.7 | |
| % of net sales | 16.5% | -0.7% | 4.1% | |
| Comparable operating profit * | 26.5 | 4.2 | +531% | 21.5 |
| % of net sales | 16.6% | 3.6% | 8.2% | |
| Cash flow from operations | 23.1 | 13.4 | +72% | 42.5 |
| Gearing % | 18.6% | 43.7% | 31.6% | |
| EPS, EUR | 0.43 | -0.12 | 0.04 |
| * 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
During the first half of the year, trading conditions improved significantly from the comparison period, which was heavily affected by the COVID-19 pandemic. Business environment continued to strengthen from the end of 2020, and consumer demand increased considerably in the Group’s key markets, especially in North America. Outdoor activities continued to increase popularity under COVID-19 as people were looking for safer activities. Good winter season in Nordics and North America contributed also positively to winter sports and ice fishing businesses.
Business Review January–June 2021
The Group’s net sales for the first half were 36% above last year mainly driven by the strong demand for fishing gear, strong winter sales, and significantly faster than expected strategy implementation. Changes in translation exchange rates had somewhat negative impact on the sales and with comparable translation exchange rates, net sales were organically up by 41% from the comparison period.
North America
Sales in North America were 73% up from the comparison period with reported translation exchange rates and 86% with comparable translation exchange rates.
The sales increase was mostly driven by the exceptionally strong demand for fishing gear as fishing remained a popular COVID-safe activity. In the first half of 2021, Group’s distribution centres in North America operated with the full capacity, whereas comparison period was affected by the temporary closures of the distribution centres in the USA and Canada. All Group Product categories witnessed double-digit growth.
Nordic
Sales in the Nordic market increased from the comparison period by 13%. With comparable translation exchange rates sales were up by 11% from the first half of 2020.
Group’s distribution units were operating with full capacity throughout the first half of the year. Improved retail and end-consumer demand for fishing gear and good winter conditions increased sales from the comparison period. 13 Fishing products were successfully launched and well received by customers in the Nordic market. Sales reduction from the termination of certain Third Party distribution agreements was offset by increased Group Products sales.
Rest of Europe
With reported translation exchange rates, sales in Rest of Europe were 13% above the comparison period. With comparable translation exchange rates, sales were also up by 15% compared to the first half of 2020.
While governmental restrictions continued in some of the region’s biggest markets, customer demand and sales started to recover and improved clearly compared to the first half of 2020. Changes in the Third Party rod and reel distribution affected negatively sales, but strong Group Products sales balanced the adverse impact. Most of the markets within Rest of Europe witnessed healthy growth.
Rest of the World
Sales in Rest of the World increased from the comparison period by 38% with reported currencies and by 38% also using comparable translation exchange rates.
During the first half of the year Rest of the World market area recovered well from the comparison period. Demand for the Group’s offering was strong, and all the regional areas witnessed solid double-digit growth. Business environment got more favorable and consumer confidence improved as retail customers and consumers were able to better navigate under the COVID-19 pandemic.
External net sales by area
| H1 | H1 | Change | Comparable change % | FY | |
| MEUR | 2021 | 2020 | % | 2020 | |
| North America | 69.9 | 40.4 | +73% | +86% | 110.2 |
| Nordic | 25.3 | 22.3 | +13% | +11% | 41.6 |
| Rest of Europe | 46.8 | 41.6 | +13% | +15% | 79.8 |
| Rest of the World | 17.6 | 12.8 | +38% | +38% | 29.7 |
| Total | 159.6 | 117.1 | +36% | +41% | 261.3 |
Financial Results and Profitability
Comparable (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) operating profit increased by 22.3 MEUR from the comparison period. The change in translation exchange rates did not have a material impact on operating profit. Reported operating profit increased by 27.2 MEUR from the previous year and the items affecting comparability had a minor negative impact of -0.2 MEUR (-5.0) on reported operating profit.
Comparable operating profit margin was 16.6% (3.6) for the first half. The increased profitability compared to the first half of 2020 was driven by the strong sales, more favorable product mix and good cost control. 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 16.5% (-0.7) for the first half. 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 0.0 MEUR (4.9).
Total financial (net) expenses were 1.4 MEUR (1.9) for the first half of the year. Net interest and other financing expenses were 1.3 MEUR (1.6) and (net) foreign exchange expenses were 0.1 MEUR (0.3).
Net profit for the first half increased by 21.8 MEUR and was 18.1 MEUR (-3.8) and earnings per share were 0.43 EUR (-0.12). The share of non-controlling interest in net profit was 1.1 MEUR (0.4).
Key figures
| H1 | H1 | Change | FY | |
| MEUR | 2021 | 2020 | % | 2020 |
| Net sales | 159.6 | 117.1 | +36% | 261.3 |
| Operating profit | 26.3 | -0.8 | 10.7 | |
| Comparable operating profit * | 26.5 | 4.2 | +531% | 21.5 |
| Net profit | 18.1 | -3.8 | 3.4 | |
| * 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
| H1 | H1 | Change | FY | |
| MEUR | 2021 | 2020 | % | 2020 |
| Operating profit | 26.3 | -0.8 | 10.7 | |
| Mark-to-market valuations of operative currency derivatives | 0.2 | 0.1 | 0.1 | |
| Other items affecting comparability | 0.0 | 4.9 | 10.7 | |
| Comparable operating profit | 26.5 | 4.2 | +531% | 21.5 |
| 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 45.1 MEUR from the comparison period. Good winter conditions and fishing popularity as an outdoor and COVID-19 safe activity drove the demand of the Group Products. Geographically sales grew strongly in all the key markets and product-wise all Group product categories witnessed high growth. Followed by the considerably higher sales, also the comparable operating profit for the Group Products was significantly above the comparison period.
Third Party Products
With comparable translation exchange rates, Third Party Products sales were 1.1 MEUR above the comparison period. Third Party Products sales development was twofold: sales grew in most of the Third Party products categories where distribution agreements remained intact, whereas sales decreased in the categories where distribution agreements changed, especially within rods and reels category. The comparable operating profit for Third Party Products was above the comparison period, which was heavily affected by the COVID-19.
Net sales by segment
| H1 | H1 | Change | Comparable | FY | ||
| MEUR | 2021 | 2020 | % | change % | 2020 | |
| Group Products | 120.5 | 78.3 | +54% | +60% | 187.5 | |
| Third Party Products | 39.2 | 38.8 | +1% | +3% | 73.8 | |
| Total | 159.6 | 117.1 | +36% | +41% | 261.3 | |
Comparable operating profit by segment
| H1 | H1 | Change | FY | |
| MEUR | 2021 | 2020 | % | 2020 |
| Group Products | 22.1 | 4.3 | 23.4 | |
| Third Party Products | 4.5 | -0.1 | -1.9 | |
| Comparable operating profit | 26.5 | 4.2 | +531% | 21.5 |
| Items affecting comparability | -0.2 | -5.0 | -96% | -10.8 |
| Operating profit / loss | 26.3 | -0.8 | 10.7 |
Financial Position
As a result of strong profitability and good working capital management, cash flow from operations increased by 9.7 MEUR from the comparison period being 23.1 MEUR (13.4). The impact of net change of working capital to cash flow from operations decreased 4.3 MEUR from previous year and was 1.6 MEUR (5.9).
End of June 2021 inventory was 73.8 MEUR (83.5). The improvement of the inventory value resulted from tight inventory control and high market demand.
Net cash used in investing activities increased from the level of the comparison period amounting 6.3 MEUR (1.6). Capital expenditure was 7.2 MEUR (2.0) and disposals 0.8 MEUR (0.4). Increased capital expenditure was mostly driven by the earlier announced Okuma 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 period. Gearing ratio continued to decrease and equity-to-assets ratio strengthened 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 amount 39.3 MEUR at June 30, 2021.
The Group equity includes a hybrid bond of 25.0 MEUR issued in November 2019. The accrued non-recognized interest on hybrid bond on June 30, 2021 was 0.5 MEUR (0.5).
The Group announced March 25, 2021 that the Board of Directors of Rapala VMC Corporation has decided to start buying back a maximum of 100 000, with a maximum of 700 000 EUR, of Rapala VMC Corporations own shares in accordance with the authorization granted by the Annual General Meeting March 25, 2021. The buyback of own shares started on April 1, 2021 and ended on May 10, 2021. During this period, Rapala VMC Corporation repurchased 86 043 shares for an average price of EUR 8.14 per share. Number of shares correspond to approximately 0.22% of the total number of the company’s shares, which is 39 000 000 shares.
Key figures
| H1 | H1 | Change | FY | ||
| MEUR | 2021 | 2020 | % | 2020 | |
| Cash flow from operations | 23.1 | 13.4 | +72% | 42.5 | |
| Net interest-bearing debt at end of period | 30.5 | 63.5 | -52% | 45.2 | |
| Gearing % 1) | 18.6% | 43.7% | 31.6% | ||
| Equity-to-assets ratio at end of period, % | 53.8% | 45.9% | 52.5% | ||
| 1) 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 solid global fishing tackle powerhouse. Current strategic actions and future capabilities aim to release all the growth potential within the company and to improve the Group’s profitability. In the longer term, the goal is to become the world’s largest fishing tackle company by harnessing a united company mindset; ONE RAPALA VMC culture.
The core of the Group’s strategy is based on five 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 in order to enable focus and agile actions in the competitive landscape. The overall strategy execution is progressing ahead of initial schedule 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 Group has continued to restructure its critical business functions to become more dynamic and responsive in everyday operations. The new managerial changes have given a fresh cultural spark to the organization, which is now more competent than ever before to lead the Group forward.
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 centralized marketing function is well connected with the continuously growing and digitally aware consumer base. To give even more focus to end-users, the Group is investing in a new e-commerce platform in order to be more directly connected to 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. Organizational and management changes continued in the first half of 2021 and investments in rods, reels and combos segment during the first half of 2021 will provide a deeper and more competitive product offering for key customers moving forward. Additionally, the Group will start to consolidate its brand portfolio to favor future winners.
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. In addition of continuously launching new products to provide the latest innovations for customers, the Group has started its largest SKU clean-up in the company history, which will have an effect gradually over the next 18 months.
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. The Group continues to optimize its distribution centers and production facilities to operate in a more flexible and efficient manner. The Group will invest in a new painting unit in Pärnu, Estonia to reduce lead times of lure production and scale up capacity to secure high fulfillment rates for the future.
Product Development
The Group PD&I department has executed a complete restructuring in last ten months. With new focused leadership at the executive level, Rapala PD&I has been re-organized in an effort to more effectively address global customer and consumer needs. This new structure ensures strong regional product relevance with product directors, managers and engineers stationed in five main PD&I centers. A focused and more collaborative way of working has been implemented to ensure that long-term product planning needs are in place now and for the future. Deep integration with sales and marketing has also been a main priority in this change. This deeper level of integration ensures that customer and consumer needs are met while at the same time maximizing our marketing efforts globally.
From a new product perspective, a strong response in the North American markets is seen for the 2022 offering. When it comes to fishing lures, balsa is king and Rapala continues to reign. Prebooking indicators from major partners show strong interest in the “Tournament Grade” OG series lures (Ott’s Garage). This momentum will continue with ongoing product extensions in the category. The BX Mid-Brat along with the all new DT-8 will ensure continued excitement in the balsa crankbait market in 2022. An expanded Jig series under the VMC brand will bring excitement to the terminal tackle category along with the new Bladed Treble hooks, Quick Strike Trailer Hooks and Crossover Caps. A well-developed line of Rapala Rain wear is also gaining strong acceptance for fall, winter and spring fisheries of 2022 which we will begin to extend globally. Rapala Tools and Accessories continue to “weigh-in” heavily with the all new 100lb digital scale. In the APAC region introductions of expanded “Elite” series balsa baits will continue to drive strength in this category. Strong consumer acceptance of the Countdown “Elite” family in Japan has put focus on Rapala’s classic balsa bait program. The Solid Shad, a bait dedicated to trout fishing with outstanding details, had a successful introduction in both Europe and also APAC. The Solid Shad supports our strong brand values and is taking increased market share in the trout category. To keep the momentum rolling in Europe and APAC there have also been several exciting color extensions on existing lures to meet local needs. Rod and reel programs continue to expand with exciting new offerings and strong market acceptance of 13 Fishing Products around the world.
Sustainability
The Group launched in 2020 a new sustainability strategy with the aim to become one of the leading fishing tackle companies in terms of sustainability by 2024. A continuation of the company’s previous sustainability efforts, the new strategy entailed a set of ambitious environmental objectives to be implemented in all business units. With the newly launched strategy, the Group uses its platform as one of the biggest fishing tackle companies in the industry to lead by example and pave way for a more sustainable future for angling.
During the following years, the Group intends to launch programs and product families that place sustainability as the core aspect of their development. The Group has plans to introduce 100 % lead-free Rapala lures by 2023, further reduce the amount of plastic used in lure packaging, release new plastic-free packaging for multiple product categories and brands, and shift to renewable energy in all its lure production units. The carbon footprint of lure production has now been placed as one of the KPIs that is assessed on a regular basis and used in determining the company’s environmental impact.
Organization and Personnel
Average number of personnel was 1 827 (2 179) for the first half of the year. At the end of June, the number of personnel was 1 808 (2 051). The decrease of personnel was mostly related to the ramp down of Asian lure manufacturing operations.
Marcus Twidale was appointed as Executive Vice President and a member of the Executive Committee as of May 11, 2021 and head of the distribution in USA effective January 1, 2022.
Short-term Outlook and Risks
General market demand for fishing products has been on a very high level and is expected to gradually normalize. The ongoing negotiations with Shimano to end the joint ownership of distribution companies in Russia, Kazakhstan, Czech, Belarus, Hungary, Romania and Croatia might have impacts on the business performance for these countries.
The Group’s supply chain, including own factories and subcontractors, is currently working robustly. However, uncertainties caused by the COVID-19 pandemic continue to impact and increase risks for the Group. The pandemic can impact the operating environment of the Group in various ways, including lockdowns, store closures, social distancing rules and overall change in consumer confidence. In addition, weather changes and disruptions or cost increases in freight costs may affect the results of the Group.
The guidance for 2021 was upgraded on April 20, 2021. The Group expects 2021 full year comparable operating profit (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) to increase significantly from the previous year. Solid order book and projected demand are expected to generate a good profitability for the second half of the year in 2021, although not as high as in previous year, which did not follow regular seasonality due to the pandemic.
The previous outlook for 2021 issued on February 9, 2021 was: “The Group expects 2021 full year comparable operating profit (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) to be in line or above 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
New Share-based Long-term Incentive Plans
On March 25, 2021 the Group announced that the Board of Directors of Rapala VMC Corporation has decided to establish two new share-based incentive plans. The aim of the plans is to align the objectives of the shareholders and the plan participants for increasing the value of the company in the long-term, to retain the participants at the company and to offer them competitive incentive schemes that are based on earning and accumulating shares.
Matching Share Plan 2021–2023 for the President and CEO
The President and CEO’s Matching Share Plan 2021–2023 consists of one matching period, covering the financial years of 2021–2023. In the plan, the President and CEO (CEO) is given an opportunity to receive matching shares for his personal investment in Rapala VMC Corporation shares. The reward based on the plan will be paid after the end of the matching period.
The reward will be paid partly in Rapala VMC Corporation shares and partly in cash. The cash proportion of the reward is intended for covering taxes and tax-related expenses arising from the reward to the CEO. In general, no reward is paid if the CEO’s director contract terminates before the reward payment.
The reward to be paid on the basis of the CEO plan correspond to the value of a maximum total of 28 800 Rapala VMC Corporation shares, including also the proportion to be paid in cash.
Performance Share Plan 2021—2023 for Key Employees
The key employees’ Performance Share Plan 2021—2023 includes one three-year performance period, covering the financial years 2021—2023. The potential reward from the performance period will be based on the Group’s financial performance criteria, which will be measured during the financial year 2023 and the Company’s share price criterion which will be measured during 2023. The financial performance criteria for the performance period are the Group Product Sales in 2023, the Group’s Comparable Earnings before Interest and Taxes (comparable EBIT) in 2023 and the Group’s Average Working Capital Ratio in 2023.
The rewards to be paid on the basis of the key employee plan correspond to the value of an approximate maximum total of 800 000 Rapala VMC Corporation shares including also the proportion to be paid in cash. The potential rewards from the performance period 2021—2023 will be paid partly in the Company’s shares and partly in cash in 2024. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to the participant. In general, no reward will be paid, if a participant´s employment or service terminates before the reward payment.
The key employee’s Performance Share Plan is directed to approximately 19 individuals, including the President and CEO and other members of the Executive Committee of the Group.
Okuma brand and associated property rights acquired from Okuma in Europe and Russia and supply agreement for the area concluded
On January 27, 2021 the Group announced that Rapala VMC Corporation (“Rapala VMC“) and Okuma Fishing Tackle Co Ltd (“Okuma”) have agreed that Okuma will transfer to Rapala VMC its European and Russian trademarks and associated intangible assets against a consideration of 8 million USD. Simultaneously Rapala VMC and Okuma have agreed to conclude a supply agreement to buy Okuma branded reels and rods from Okuma. Rapala will commence with the sales of Okuma products to some extent in selected European countries in 2021, but the large scale European wide and Russian launch of Okuma brand will occur in 2022. Through combination of Okuma’s innovation and manufacturing capabilities with Rapala VMC’s strong marketing, customer knowledge and distribution power a solid platform for future growth in Europe and Russia will be created. This combination has no effect on Okuma’s operations or business outside Europe and Russia.
Okuma, known worldwide for its high-quality rods and reels, is a Taiwan based company established some 30 years ago by Mr. Charles Chang. The company has manufacturing facilities and R&D centers in Taiwan and China. Okuma has fully owned distribution companies in USA and Japan. Okuma has won Best in Category awards at many recent industry’s ICAST and EFTTEX show’s and is generally recognized as one of the top players in the global rod and reel business. Okuma’s current sales in Europe and Russia through distributors at wholesale value in Europe and Russia exceeds slightly 10 million EUR.
Okuma’s product range is very suitable for the European and Russian fishing styles and Okuma will become the flagship brand in Rapala VMC’s current European rod & reel product portfolio. Together with the 13 Fishing brand and other Rapala VMC’s Group brands this impressive product offering will be a winning platform in the region. Furthermore, Rapala VMC will make very strong marketing investments to support the Okuma brand in its growth journey.
It was also announced that Rapala VMC will initiate negotiations with Shimano Europe BV to end the distribution of Shimano branded products and joint ownership of Rapala VMC distribution companies situated in Russia, Kazakhstan, Czech, Belarus, Hungary, Romania and Croatia.
Annual General Meeting
The Annual General Meeting (AGM) was kept on March 25, 2021 and in order to prevent the spread of the COVID-19 pandemic, the AGM was held without shareholders’ and their proxy representatives’ presence at the venue of the meeting. The shareholders of the company participated in the meeting and exercised their shareholder’s rights by voting in advance or through a proxy representative designated by the company. The AGM approved the Board of Director’s proposal that no dividend is paid. A separate stock exchange release on the decisions of the AGM has been given, and up to date information on the Board’s authorizations and other decisions of the AGM are available also on the corporate website.
Helsinki, July 15, 2021
Board of Directors of Rapala VMC Corporation
For further information, please contact:
Nicolas 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 first half year result will be arranged on Friday July 16, 2021 at 11:00 a.m. Finnish time (9:00 a.m UK time). Please dial +44 (0)330 336 9401 or +1 929 477 0630 or +358 (0)9 7479 0359 (pin code: 992177) five minutes before the beginning of the event. A replay facility will be available for 14 days following the teleconference. The number to dial is +44 (0)207 660 0134 (pin code: 1720829). Financial information and teleconference replay facility are available at www.rapalavmc.com.
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