RAPALA VMC CORPORATION'S JANUARY TO MARCH 2015: STRONG SALES AND SIGNIFICANT IMPROVEMENT IN PROFITABILITY
(Thomson Reuters ONE) -
Rapala VMC Corporation
Interim report
May 5, 2015 at 2:00 p.m.
RAPALA VMC CORPORATION'S JANUARY TO MARCH 2015: STRONG SALES AND SIGNIFICANT
IMPROVEMENT IN PROFITABILITY
Q1 in brief:
* Net sales were 73.9 MEUR, up 12% from previous year (66.2). With comparable
exchange rates sales up 8%.
* Comparable operating profit was 10.7 MEUR (6.7), up 60%.
* Cash flow from operations improved 1.0 MEUR to -7.0 MEUR (-8.0).
* Earnings per share were 0.10 EUR (0.11).
* Full year guidance unchanged.
President and CEO Jorma Kasslin: "Beginning of the year 2015 has been strong,
driven by very good sales in North America, where the launch of new Rapala
Shadow Rap lure has been a real success. Also in most other main markets the
organic sales growth has been good. After a long time changes in foreign
exchange rates are having a further positive impact on our top line.
Our comparable profitability was significantly higher than last year following
the increased sales, completion of the transfer of lure manufacturing activities
from China to Batam, Indonesia and improved performance of the manufacturing
unit in Batam.
Apart from Russia, where situation is challenging, the outlook for the year is
positive. Summer season started early in many markets and sales has continued
well throughout the spring."
Key figures
-------------------------------------------------------------------------------
I I change I-IV
MEUR 2015 2014 % 2014
-------------------------------------------------------------------------------
Net sales 73.9 66.2 +12% 273.2
Operating profit 9.1 7.4 +23% 22.9
% of net sales 12.3% 11.2% 8.4%
Comparable operating profit * 10.7 6.7 +60% 20.9
% of net sales 14.4% 10.1% 7.6%
Cash flow from operations** -7.0 -8.0 +13% 21.7
Gearing % 76.2% 76.5% 73.2%
EPS, EUR 0.10 0.11 -9% 0.24
-------------------------------------------------------------------------------
* Excluding non-recurring items and mark-to-market valuations of operative
currency derivatives.
** Comparative period restated, see notes.
Market environment
Year 2015 started with good growth driven by US. Sales were supported by
successful launch of new products, earlier start of shipments for coming summer
season and positive currency impact. All market areas, excluding Russia,
contributed positively to the sales growth. Political unrest and continuing
economic downturn in Russia and Ukraine continued to have a negative impact on
sales.
Business Review January-March 2015
Group net sales for the first quarter were up 12%. Changes in translation
exchange rates explain the net sales increase by some 2.4 MEUR. With comparable
translation exchange rates quarterly net sales were 8% above last year's level.
North America
In North America start of the year was strong. Currencies had a positive impact
on the quarterly sales compared to last year and with comparable rates net sales
were up 9%. Good sales growth in the US were supported by successful launch of
new Shadow Rap lure family and some shift of sales from last year's fourth
quarter.
Nordic
Nordic sales were significantly up for the first quarter. With comparable
translation exchange rates net sales were up 27% for the quarter. Winter
conditions improved in the beginning of the year and replenishment sales
increased from last year. However Nordic countries suffered consecutively from
warm and snowless winter which impacted overall sales of winter sports and ice
fishing products especially in Finland. Sales of summer fishing products started
well and earlier compared to last year, supported by on-time deliveries of
suppliers. Nordic net sales were also increased by exchange gains on currency
nominated account receivables.
Rest of Europe
Instability in Russia and Ukraine continued to have direct and indirect impact
on sales in these countries. Currencies, mainly Ruble, burdened the sales in the
Rest of Europe compared to last year and with comparable exchange rates net
sales were down 1% for the quarter. Excluding Russia and Ukraine the sales
improved 6% from last year at comparable exchange rates. Sales were supported by
early start of summer season shipments and steady growth in France, Hungary and
Romania.
Rest of the World
In Rest of the World sales were also impacted positively by currencies and with
comparable exchange rates quarterly sales were 3% ahead of last year driven by
positive sales development in Malaysia, Chile and South Africa. Sales were
suffering in Indonesia, Thailand and Japan.
External Net Sales by Area
-------------------------------------------
I I change I-IV
MEUR 2015 2014 % 2014
-------------------------------------------
North America 25.1 19.4 +29% 86.1
Nordic 16.4 13.2 +24% 54.9
Rest of Europe 24.4 26.6 -8% 98.7
Rest of the World 8.0 7.1 +13% 33.5
Total 73.9 66.2 +12% 273.2
-------------------------------------------
Financial Results and Profitability
Comparable (excluding non-recurring items and mark-to-market valuation of
operative currency derivatives) and reported operating profit increased markedly
from last year. Change in translation exchange rates increased operating profit
by 0.3 MEUR. With comparable translation exchange rates comparable operating
profit was 3.6 ahead last year's level.
Comparable operating margin was 14.4% (10.1). Increase in profitability was
driven by improved sales and recovering profitability of Batam operations.
Profitability was burdened by continuing turbulence in Russia and unfavorable
exchange rate impact on purchases.
Reported operating profit margin was 12.3% (11.2). Reported operating profit
included loss on non-recurring items of 1.2 MEUR (0.1 gain) related to direct
one-off costs on closing down of the manufacturing operations in China. Mark-to-
market valuation of operative currency derivatives included in the reported
operating profit was a loss of 0.3 MEUR (0.7 gain).
Total financial (net) expenses for the first quarter were 2.2 MEUR (1.9). A
slight negative impact in financial items resulted from the (net) foreign
exchange expenses of 1.5 MEUR (1.0). Net interest and other financing expenses
decreased slightly from last year to 0.7 MEUR (0.9).
Net profit for the quarter was at last year's level and earnings per share were
0.10 EUR (0.11), impacted by non-recurring items and increase in financial
items, taxes and non-controlling interest. Last year net profit included a
positive tax impact of 1.0 MEUR related to an agreement with the Finnish tax
authority. The share of non-controlling interest in net profit totaled 0.4 MEUR
(0.0).
Key figures
-------------------------------------------------------------------------------
I I change I-IV
MEUR 2015 2014 % 2014
-------------------------------------------------------------------------------
Net sales 73.9 66.2 +12% 273.2
Operating profit 9.1 7.4 +23% 22.9
Comparable operating profit * 10.7 6.7 +60% 20.9
Net profit 4.3 4.3 0% 10.2
-------------------------------------------------------------------------------
* Excluding non-recurring items and mark-to-market valuations of operative
currency derivatives.
Segment Review
Group Products
First quarter sales of Group Products increased from last year. Sales were
supported by foreign exchange rates and with comparable exchange rates net sales
were up 9%. Sales were supported by earlier start of summer fishing product
shipments, very successful launch of new Rapala Shadow Rap lure in the US as
well as overall solid summer fishing tackle sales in North America.
Operating profit for Group Products improved notably compared to last year.
Operating profit was supported increased sales and by improved profitability of
Batam operations.
Third Party Products
Sales of Third Party Products were slightly above last year level. With
comparable exchange rates net sales were up 7% driven by increase in sales of
third party outdoor and fishing products, which were supported by earlier start
of summer fishing season sales and improved suppliers' deliveries, but on the
other hand negatively impacted by economical instabilities in Russia.
Operating profit for Third Party Products was down from last year level burdened
by unfavorable exchange rates on purchases and decline of sales in Russia.
Net Sales by Segment
----------------------------------------------
I I change I-IV
MEUR 2015 2014 % 2014
----------------------------------------------
Group Products 50.8 43.3 +17% 171.3
Third Party Products 23.2 22.9 +1% 102.0
Eliminations - 0.0 0.0
Total 73.9 66.2 +12% 273.2
----------------------------------------------
Operating profit by Segment
----------------------------------------------
I I change I-IV
MEUR 2015 2014 % 2014
----------------------------------------------
Group Products 7.2 4.9 +47% 15.0
Third Party Products 1.9 2.5 -24% 7.9
Total 9.1 7.4 +23% 22.9
----------------------------------------------
Financial position
Cash flow from operations increased from last year to -7.0 MEUR (-8.0). Net
change in working capital amounted to -16.3 MEUR (-15.6).
Inventories increased seasonally by 18.4 MEUR from the end of 2014, and
increased by 14.0 MEUR from last March amounting to 132.2 MEUR (118.2). Change
in translation exchange rates increased inventories by some 3.4 MEUR. Increase
in working capital, especially inventories, was impacted by earlier deliveries
from suppliers and slowdown of sales in Russia.
Net cash used in investing activities was -1.4 MEUR (-2.1) for the first
quarter, for the most part consisting of normal operative capital expenditure.
Liquidity position of the Group was good. Undrawn committed long-term credit
facilities amounted to 78.1 MEUR at the end of the period. Net interest bearing
debt increased seasonally from December and was higher compared to March last
year. Gearing decreased slightly from last year and equity-to-assets was below
last year's level. The Group fulfils all financial covenants related to its
credit facilities.
Key figures
--------------------------------------------------------------------
I I change I-IV
MEUR 2015 2014 % 2014
--------------------------------------------------------------------
Cash flow from operations* -7.0 -8.0 -13% 21.7
Net interest-bearing debt at end of period 114.1 106.2 +7% 99.9
Gearing % 76.2% 76.5% 73.2%
Equity-to-assets ratio at end of period, % 42.5% 43.9% 44.1%
--------------------------------------------------------------------
* Comparative period restated, see notes.
Strategy Implementation
Execution of the Rapala Group's strategy is based on three cornerstones: brands,
manufacturing and distribution, supported by strong corporate culture. During
the first quarter strategy implementation continued in various areas.
Transfer of Asian lure manufacturing operations from China to Batam, Indonesia,
was concluded in 2014, enabling the unit management to concentrate on exploiting
the strengths and capturing the benefits of this manufacturing unit. Batam-unit
will form solid basis for future growth of the Group's Storm, Luhr Jensen and
Williamson branded lures.
Reducing the amount of inventories, largely driven by the Group's business
model, is high on the agenda of the Group and new initiatives to achieve
permanent inventory reductions through structural changes are being
investigated.
Discussions and negotiations regarding acquisitions and business combinations
continued during the first quarter of the year, as the Group continues to seek
also non-organic growth opportunities.
Product Development
Continuous product development and consistent innovation are core competences
for the Group and major contributor to the value and commercial success of the
brands.
New items for 2015 have been received well by the markets and finalization of
2016 novelties, which are introduced in coming summer, is proceeding well. The
launch of the new Rapala Shadow Rap to the US market during first quarter was
extremely successful. This product will be introduced to the other markets later
this year. New Storm Arashi lures, launched earlier in the US, are now expanded
to other markets. Sales of Storm lures, manufactured in the new Batam factory,
is heavily supported with new marketing concepts, strong presence on local trade
shows as well as expansion into new product categories.
Organization and Personnel
Average number of personnel for the first quarter was 2 841 (2 678), increase
coming mainly from expansion of lure manufacturing operations in Batam and
reduction of outsourcing in China. At the end of March, the number of personnel
was 2 888 (2 691).
Short-term Outlook and Risks
After the strong start, the outlook for the whole year is positive. Positive
market sentiment in USA, early start of the summer season in many markets and
successful new product introductions are expected to support the sales this
year.
Following two difficult winter seasons, the sales of winter sports products are
expected to improve in Finland this year. While distribution pipeline for winter
fishing equipment is expected to be rather empty, in USA termination of a third
party winter fishing equipment distribution agreement will reduce sales ca. 5
MUSD during latter part of the year.
Political and economic situation in Russia and Ukraine is very challenging and
it will increase the uncertainties.
Improvement in performance of the manufacturing unit in Batam is supporting the
profitability of the Group this year. Actions to reduce the Group's inventory
levels may lower margins, but should support the cash flow.
The Group expects full year net sales and comparable operating profit (excluding
non-recurring items and mark-to-market valuations of operative currency
derivatives) to be above 2014 levels.
Short term risks and uncertainties and seasonality of the business are described
in more detail in the end of this interim report.
Second quarter interim report will be published on July 23.
Helsinki, May 5, 2015
Board of Directors of Rapala VMC Corporation
For further information, please contact:
Jorma Kasslin, President and Chief Executive Officer, +358 9 7562 540
Jussi Ristimäki, Chief Financial Officer, +358 9 7562 540
Olli Aho, Investor Relations, +358 9 7562 540
A conference call on the quarter result will be arranged today at 3:00 p.m.
Finnish time (2:00 p.m. CET). Please dial +44 (0)20 3367 9433 or
+1 917 286 8055 or +358 (0)9 2310 1675 (pin code: 891968#) 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)20 3427 0598 (pin
code: 2338989#). Financial information and teleconference replay facility are
available at www.rapalavmc.com.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
STATEMENT OF INCOME I I I-IV
MEUR 2015 2014 2014
--------------------------------------------------------------------
Net sales 73.9 66.2 273.2
Other operating income 0.1 0.1 1.0
Materials and services 33.4 28.5 128.1
Personnel expenses 17.4 16.9 65.6
Other costs and expenses 12.5 11.8 50.8
Share of results in associates and joint ventures 0.1 0.0 0.2
------------------
EBITDA 10.8 9.1 30.0
Depreciation, amortization and impairments 1.7 1.7 7.1
------------------
Operating profit (EBIT) 9.1 7.4 22.9
Financial income and expenses 2.2 1.9 7.2
------------------
Profit before taxes 6.9 5.5 15.7
Income taxes 2.6 1.2 5.5
------------------
Net profit for the period 4.3 4.3 10.2
------------------
Attributable to:
Equity holders of the company 3.9 4.3 9.2
Non-controlling interests 0.4 0.0 1.0
Earnings per share for profit attributable
to the equity holders of the company:
Earnings per share, EUR (diluted = non-diluted) 0.10 0.11 0.24
STATEMENT OF COMPREHENSIVE INCOME I I I-IV
MEUR 2015 2014 2014
------------------------------------------------------------------------------
Net profit for the period 4.3 4.3 10.2
-----------------------------
Other comprehensive income, net of tax
Change in translation differences* 10.4 -1.2 4.7
Gains and losses on cash flow hedges* -0.1 0.1 0.2
Gains and losses on hedges of net investments* -1.2 0.6 0.1
Actuarial gains (losses) on defined benefit plan - - -0.2
-----------------------------
Total other comprehensive income, net of tax 9.2 -0.4 4.8
-----------------------------
Total comprehensive income for the period 13.5 3.9 15.1
-----------------------------
Total comprehensive income attributable to:
Equity holders of the Company 12.7 4.3 15.3
Non-controlling interests 0.8 -0.4 -0.2
* Item that may be reclassified subsequently to the statement of income
STATEMENT OF FINANCIAL POSITION Mar 31 Mar 31 Dec 31
MEUR 2015 2014 2014
------------------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets 79.1 70.1 74.4
Property, plant and equipment 32.7 31.0 32.0
Non-current assets
Interest-bearing 4.6 3.0 3.0
Non-interest-bearing 13.0 10.1 11.5
---------------------
129.4 114.3 120.8
Current assets
Inventories 132.2 118.2 113.8
Current assets
Interest-bearing 1.1 1.0 1.1
Non-interest-bearing 79.9 72.1 62.3
Cash and cash equivalents 10.3 11.0 12.2
---------------------
223.5 202.3 189.4
Total assets 352.9 316.6 310.3
---------------------
EQUITY AND LIABILITIES
Equity
Equity attributable to the equity holders of the company 140.8 127.2 128.3
Non-controlling interests 9.0 11.6 8.2
---------------------
149.8 138.9 136.5
Non-current liabilities
Interest-bearing 76.2 39.4 72.3
Non-interest-bearing 14.7 12.8 13.3
---------------------
91.0 52.2 85.5
Current liabilities
Interest-bearing 53.9 81.8 43.9
Non-interest-bearing 58.2 43.7 44.2
---------------------
112.0 125.5 88.2
Total equity and liabilities 352.9 316.6 310.3
---------------------
I I I-IV
KEY FIGURES 2015 2014 2014
-------------------------------------
EBITDA margin, % 14.6% 13.7% 11.0%
Operating profit margin, % 12.3% 11.2% 8.4%
Return on capital employed, % 14.5% 12.4% 9.8%
Capital employed at end of period, MEUR 264.0 245.1 236.5
Net interest-bearing debt at end of
period, MEUR 114.1 106.2 99.9
Equity-to-assets ratio at end of period,
% 42.5% 43.9% 44.1%
Debt-to-equity ratio at end of period, % 76.2% 76.5% 73.2%
Earnings per share, EUR (diluted = non-
diluted) 0.10 0.11 0.24
Equity per share at end of period, EUR 3.67 3.30 3.34
Average personnel for the period 2 841 2 678 2 716
-------------------------------------------------------------------------------
Definitions of key figures are consistent with those in the financial
statement 2014.
STATEMENT OF CASH FLOWS I I I-IV
2014 2014
MEUR 2015 Restated** Restated**
-------------------------------------------------------------------------------
Net profit for the period 4.3 4.3 10.2
Adjustments to net profit for the period * 7.2 3.9 17.1
Financial items and taxes paid and received -2.2 -0.7 -7.1
Change in working capital -16.3 -15.6 1.5
-------------------------------------------------------------------------------
Net cash generated from operating activities -7.0 -8.0 21.7
Investments -1.5 -2.0 -8.5
Proceeds from sales of assets 0.0 0.1 0.4
Sufix brand acquisition - - -0.8
Acquisition of other subsidiaries, net of cash - -0.2 -0.2
Proceeds from disposal of subsidiaries, net of
cash - - 1.0
Change in interest-bearing receivables - 0.0 0.0
-------------------------------------------------------------------------------
Net cash used in investing activities -1.4 -2.1 -8.1
Dividends paid to parent company's
shareholders - - -9.2
Dividends paid to non-controlling interest - - -3.6
Net funding 5.9 4.4 -4.2
Purchase of own shares -0.2 -0.1 -0.9
-------------------------------------------------------------------------------
Net cash generated from financing activities 5.7 4.3 -17.9
Change in cash and cash equivalents -2.7 -5.8 -4.2
Cash & cash equivalents at the beginning of
the period 12.2 16.9 16.9
Foreign exchange rate effect 0.9 -0.1 -0.5
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the
period 10.3 11.0 12.2
* Includes reversal of non-cash items, income taxes and financial income and
expenses.
** Comparative periods restated, see notes.
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
Attributable to equity holders of the company
--------------------------------------------------
Cumul. Fund for Non-
Share Fair trans- invested Re- contr-
pre- value lation non-rest- Own tained olling
Share mium re- diffe- ricted sha- earn- inte- Total
MEUR capital fund serve rences equity res ings rests equity
-------------------------------------------------------------------------------
Equity on Jan
1, 2014 3.6 16.7 -1.4 -12.5 4.9 -4.4 116.2 12.0 135.1
-------------------------------------------------------------------------------
Comprehensive
income * - - 0.1 -0.2 - - 4.3 -0.4 3.9
Purchase of own
shares - - - - - -0.1 - - -0.1
-------------------------------------------------------------------------------
Equity on Mar
31, 2014 3.6 16.7 -1.3 -12.7 4.9 -4.5 120.6 11.6 138.9
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Equity on Jan
1, 2015 3.6 16.7 -1.1 -6.5 4.9 -5.2 116.0 8.2 136.5
-------------------------------------------------------------------------------
Comprehensive
income * - - -0.1 8.9 - - 3.9 0.8 13.5
Purchase of own
shares - - - - - -0.2 - - -0.2
-------------------------------------------------------------------------------
Equity on Mar
31, 2015 3.6 16.7 -1.2 2.4 4.9 -5.4 119.9 9.0 149.8
-------------------------------------------------------------------------------
* For the period, (net
of tax)
SEGMENT INFORMATION*
MEUR I I I-IV
Net Sales by Operating Segment 2015 2014 2014
--------------------------------------------------------
Group Products 50.8 43.3 171.3
Third Party Products 23.2 22.9 102.0
Eliminations - 0.0 0.0
--------------------------------------------------------
Total 73.9 66.2 273.2
Operating Profit by Operating Segment
--------------------------------------------------------
Group Products 7.2 4.9 15.0
Third Party Products 1.9 2.5 7.9
--------------------------------------------------------
Total 9.1 7.4 22.9
Mar 31 Mar 31 Dec 31
Assets by Operating Segment 2015 2014 2014
------------------------------------------------------------
Group Products 257.8 226.7 230.4
Third Party Products 79.1 74.8 63.6
------------------------------------------------------------
Non-interest-bearing assets total 336.9 301.5 294.0
Unallocated interest-bearing assets 16.0 15.0 16.3
------------------------------------------------------------
Total assets 352.9 316.6 310.3
* Segments are consistent
with those in the financial statements 2014. Segments are described in detail in
note 2 of the financial statements 2014.
External Net Sales by Area I I I-IV
MEUR 2015 2014 2014
---------------------------------------------
North America 25.1 19.4 86.1
Nordic 16.4 13.2 54.9
Rest of Europe 24.4 26.6 98.7
Rest of the world 8.0 7.1 33.5
---------------------------------------------
Total 73.9 66.2 273.2
KEY FIGURES BY QUARTERS I II III IV I-IV I
MEUR 2014 2014 2014 2014 2014 2015
--------------------------------------------------------------
Net sales 66.2 77.7 67.8 61.5 273.2 73.9
EBITDA 9.1 10.4 7.5 3.0 30.0 10.8
Operating profit 7.4 8.6 5.7 1.2 22.9 9.1
Profit before taxes 5.5 7.0 3.5 -0.3 15.7 6.9
Net profit for the period 4.3 4.1 2.7 -0.8 10.2 4.3
--------------------------------------------------------------
NOTES TO THE INCOME STATEMENT AND FINANCIAL POSITION
The financial statement figures included in this release are unaudited.
This report has been prepared in accordance with IAS 34. Accounting principles
adopted in the preparation of this report are consistent with those used in the
preparation of the Financial Statements 2014, except for the adoption of the new
or amended standards and interpretations.
Adoption of the revised standards IFRS 10, IFRS 11, IFRS 12 as well as the
amended standards IAS 36 and IAS 39, IAS 19 and interpretation IFRIC 21 did not
result in any changes in the accounting principles that would have affected the
information presented in this interim report.
Change in presentation of statement of cash flows
Presentation of statement of cash flows has been updated from the beginning of
2015 to better distinguish the three types of financial activities. Previously
unrealized foreign exchange impact from elimination of internal transactions was
presented separately under Adjustments. Also the cash flow from derivative
instruments was included fully in Net cash generated from operating activities.
After the change the unrealized foreign exchange impact related to the
elimination of internal transactions and cash flow from derivative instruments
are presented according to their nature. This resulted in changes between the
three financial activities.
Comparative periods have been restated and changes to previously reported
figures are presented at the end of this interim report.
Use of estimates and rounding of figures
Complying with IFRS in preparing financial statements requires the management to
make estimates and assumptions. Such estimates affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and
the amounts of revenues and expenses. Although these estimates are based on the
management's best knowledge of current events and actions, actual results may
differ from these estimates.
All figures in these accounts have been rounded. Consequently, the sum of
individual figures can deviate from the presented sum figure. Key figures have
been calculated using exact figures.
Events after the end of the interim period
The Group has no knowledge of any significant events after the end of the
interim period that would have a material impact on the financial statements for
January-March 2015. Material events after the end of the interim period, if any,
have been discussed in the interim review by the Board of Directors.
Inventories
On March 31, 2015, the book value of inventories included a provision for net
realizable value of 5.2 MEUR (4.5 MEUR at March 31, 2014 and 4.1 MEUR at
December 31, 2014).
Non-recurring income and expenses included in operating
profit I I I-IV
MEUR 2015 2014 2014
-------------------------------------------------------------------------------
Closure of Chinese lure manufacturing * -1.2 - -1.7
Other restructuring costs - 0.1 0.0
Other non-recurring items - - -0.1
-------------------------------------------------------------------------------
Total included in EBITDA and operating profit -1.2 0.1 -1.8
-------------------------------------------------------------------------------
* The Group classifies all exceptional income and expenses related to the
closure of China manufacturing that are not related to normal business operation
as non-recurring, primarily consisting of write-offs and one-off costs related
to restructuring.
Commitments Mar 31 Mar 31 Dec 31
MEUR 2015 2014 2014
--------------------------------------------------------------------------
Minimum future lease payments on operating leases 16.2 16.6 16.4
--------------------------------------------------------------------------
Sales Other
Related party transactions and other Pur- Rents expen- Recei- Paya-
MEUR income chases paid ses vables bles
-------------------------------------------------------------------------------
I 2015
Joint venture Shimano Normark
UK Ltd 0.6 - - - - -
Associated company Lanimo Oü 0.0 0.1 - - 0.0 -
Entity with significant
influence over the Group* - - 0.1 0.1 0.0 -
Management - - 0.0 0.0 - 0.0
I 2014
Joint venture Shimano Normark
UK Ltd 0.5 - - 0.0 0.4 0.0
Associated company Lanimo Oü - - - - 0.0 -
Entity with significant
influence over the Group* - - 0.0 0.1 0.0 -
Management - - 0.1 - - 0.0
I-IV 2014
Joint venture Shimano Normark
UK Ltd 3.2 - - 0.0 0.1 0.0
Associated company Lanimo Oü 0.0 0.1 - - 0.0 -
Entity with significant
influence over the Group* - - 0.2 0.1 0.0 0.0
Management - - 0.3 - 0.0 0.0
-------------------------------------------------------------------------------
* Lease agreement for the real estate for the consolidated operations in
France and a service fee.
Mar 31 Mar 31 Dec 31
Open derivatives 2015 2014 2014
---------------------------------------------
Nominal Fair Nominal Fair Nominal Fair
MEUR Value Value Value Value Value Value
--------------------------------------------------------------------------
Operative hedges
Foreign currency derivatives 35.1 3.4 53.7 0.6 44.1 3.8
Monetary hedges
Foreign currency derivatives 38.9 -0.6 25.6 -0.4 30.6 -0.7
Interest rate derivatives 104.2 0.7 69.5 -1.9 101.4 -0.7
--------------------------------------------------------------------------
The changes in the fair values of derivatives that are designated as hedging
instruments but do not qualify for hedge accounting are recognized based on
their nature either in operative costs, if the hedged item is an operative
transaction, or in financial income and expenses if the hedged item is a
monetary transaction. Some derivatives designated to hedge monetary items are
accounted for according to hedge accounting. Financial risks and hedging
principles are described in detail in the financial statements 2014.
Changes in unrealized mark-to-market valuations for operative foreign
currency derivatives
I I I-IV
2015 2014 2014
------------------------------------------
Included in operating
profit -0.3 0.7 3.8
------------------------------------------
Operative foreign currency derivatives that are marked-to-market on reporting
date cause timing differences between the changes in derivative's fair values
and hedged operative transactions. Changes in fair values for derivatives
designated to hedge future cash flow but are not accounted for according to the
principles of hedge accounting impact the Group's operating profit for the
accounting period. The underlying foreign currency transactions will realize in
future periods.
Fair values of financial
instruments
Mar 31 Mar 31 Dec 31
2015 2014 2014
-------------------------------------------------------------------------------
Carrying Fair Carrying Fair Carrying Fair
MEUR value value value value value value
-------------------------------------------------------------------------------
Assets
Available-for-
sale financial
assets (level
3) 0.3 0.3 0.3 0.3 0.3 0.3
Derivatives
(level 2) 6.6 6.6 1.0 1.0 5.4 5.4
-------------------------------------------------------------------------------
Total 6.9 6.9 1.3 1.3 5.7 5.7
Liabilities
Non-current
interest-
bearing
liabilities
(excl.
derivatives) 76.2 76.7 39.3 39.8 72.3 72.7
Derivatives
(level 2) 3.0 3.0 2.6 2.6 3.1 3.1
-------------------------------------------------------------------------------
Total 79.3 79.7 42.0 42.4 75.3 75.8
Fair values of other financial instruments do not differ materially
from their carrying value.
Shares and share capital
On March 27, 2015 The Annual General Meeting (AGM) updated Board's authorization
on repurchase of shares. A separate stock exchange release on the decisions of
the AGM was given, and up to date information on the Board's authorizations and
other decision of the AGM are available also on the corporate website.
In the beginning of the financial year, the share capital fully paid and
reported in the Trade Register was 3.6 MEUR and the total number of shares was
39 000 000. The average number of shares during the financial year was
39 000 000.
During the financial year, the company bought back a total of 32 864 own shares.
At the end of the year the company held 639 671 own shares, representing 1.6% of
the total number of shares and the total voting rights. The amount of
outstanding shares at the end of the financial year was 38 360 329. The average
share price of all repurchased own shares held by the company was 4.87 EUR.
During the reporting period, 913 220 shares (197 086) were traded at a high of
5.45 EUR and a low of 4.72 EUR. The closing share price at the end of the period
was 5.11 EUR.
Short term risks and uncertainties
The objective of Rapala VMC Corporation's risk management is to support the
implementation of the Group's strategy and execution of business targets. The
importance of risk management has increased as Rapala VMC Corporation has
continued to expand its operations. Accordingly, Group management continuously
develops it's risk management practices and internal controls. Detailed updated
descriptions of the Group's strategic, operative and financial risks as well as
risk management principles are included in the Financial Statements 2014.
Due to the nature of the fishing tackle business and the geographical scope of
the Group's operations, the business has traditionally been seasonally stronger
in the first half of the year compared to the second half. Weathers impact
consumer demand and may have impact on the Group's sales for current and
following seasons. The Group is more affected by winter weathers after the
expansion into winter fishing business, while the impacts on summer and winter
seasons are partly offsetting each other.
The biggest deliveries for both summer and winter seasons are concentrated into
relatively short time periods, and hence a well functioning supply chain is
required. The uncertainties in future demand as well as the length of the
Group's supply chain increases the challenges in supply chain management. Delays
in shipments from internal or external suppliers or unexpected changes in
customer demand upwards or downwards may lead to shortages and lost sales or
excess inventories and subsequent clearance sales with lower margins.
The transfer of lure manufacturing operations from China to Indonesia has
increased certain production cost and supply chain risks temporarily, while this
risk is now significantly reduced as Chinese operations have ceased and transfer
project is finalized.
The Group rearranged its main credit facilities in September 2014. These credit
facilities include some financial covenants, which are actively monitored. The
Group's liquidity and refinancing risks are well under control.
The fishing tackle business has not traditionally been strongly influenced by
increased uncertainties and downturns in the general economic climate. They may
however influence, at least for a short while, the sales of fishing tackle, when
retailers reduce their inventory levels and face financial challenges. Also
quick and strong increases in living expenses, sudden fluctuations in foreign
exchange rates and governmental austerity measures may temporarily affect
consumer spending. However, the underlying consumer demand has historically
proven to be fairly solid. Political tensions, such as the conflict between
Russia and Ukraine, may have negative effects on the Group's business. The
development in geopolitical situation is followed closely by the Group.
The truly global nature of the Group's sales and operations spreads the market
risks caused by the current uncertainties in the global economy. The Group is
cautiously monitoring the development both in the global macro economy as well
as in the various local markets it operates in.
Cash collection and credit risk management is high on the agenda of local
management and this may affect sales to some customers. Quality of the accounts
receivables is monitored closely and write-downs are initiated if needed.
The Group's sales and profitability are impacted by the changes in foreign
exchange rates and the risks are monitored actively. To fix the exchange rates
of future foreign exchange denominated sales and purchases as well as financial
assets and liabilities, the Group has entered into several currency hedging
agreements according to the foreign exchange risk management policy set by the
Board of Directors. As the Group is not applying hedge accounting in accordance
to IAS 39, the unrealized mark-to-market valuations of operative currency
hedging agreements have an impact on the Group's reported operating profit. Some
of Group's currency positions are not possible or feasible to be hedged, and
therefore may have impact on Group's net result. The Group is closely monitoring
market development as well as its cost structure and considering possibility and
feasibility of price increases, hedging actions and cost rationalization.
No significant changes are identified in the Group's strategic risks or business
environment, except in Russia were uncertainties have increased.
Change in presentation of statement of cash flows - effect to comparative
periods
See the attachment Interim report.
Interim report:
http://hugin.info/120091/R/1918755/686826.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Rapala VMC Oyj via GlobeNewswire
[HUG#1918755]
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Datum: 05.05.2015 - 13:00 Uhr
Sprache: Deutsch
News-ID 390975
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Town:
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