RAPALA VMC CORPORATION'S ANNUAL ACCOUNTS 2015: STABLE SALES WITH IMPROVEMENT IN COMPARABLE PROFITABILITY
(Thomson Reuters ONE) -
Rapala VMC Corporation
Financial Statement Release
February 9, 2016 at 9:00 a.m.
RAPALA VMC CORPORATION'S ANNUAL ACCOUNTS 2015: STABLE SALES WITH IMPROVEMENT IN
COMPARABLE PROFITABILITY
October-December in brief:
* Net sales were 59.7 MEUR, down 3% from previous year (61.5). With comparable
exchange rates sales down 6%.
* Comparable operating profit was 1.3 MEUR (-0.2).
* Cash flow from operations was -0.3 MEUR (4.0).
* Earnings per share was 0.00 EUR (-0.01).
January-December in brief:
* Net sales were 278.2 MEUR, up 2% from previous year (273.2). With comparable
exchange rates sales at last year level.
* Comparable operating profit was 25.3 MEUR (20.9), up 21%.
* Cash flow from operations was 15.6 MEUR (21.7), down 28%.
* Earnings per share was down to 0.17 EUR (0.24) due to decline in reported
operating profit.
* Outlook for 2016: Assuming comparable translation exchange rates, 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 2015 levels.
* Dividend proposal 0.15 EUR (0.20 EUR) per share, 86% of earnings per share.
President and CEO Jorma Kasslin: "In 2015 our top line grew 2% supported by
currencies, even though we lost a five million dollar ice fishing distribution
business in USA this year. Our sales were strong in our core Rapala lure and VMC
hook businesses. Our ice fishing business suffered in fourth quarter due to mild
weathers. In Russia the situation continued to be extremely challenging
throughout the year. Russian sales declined almost 15 million EUR, but the
business is still healthy and profitable.
Our comparable operating profit improved considerably from last year, supported
by improvement in performance of our Batam lure factory, which was one of the
key focus areas of the management during 2015. In Europe our distribution units
suffered from the strengthening of US dollar, which had negative impact on our
third party product margins. The decline in reported operating profit was
impacted by currency derivatives where we recognized big gains in latter part of
last year.
Challenging trading conditions in many markets and too high buffer inventories
relating to the Batam ramp-up prevented us from achieving our targets for
inventory reduction during 2015. Inventory management together with acceleration
of the profitable growth strategy will be key focus areas of the new management
organization, which was put in place during third quarter of the year."
Key figures
-----------------------------------------------------------
IV IV change I-IV I-IV change
MEUR 2015 2014 % 2015 2014 %
-----------------------------------------------------------
Net sales 59.7 61.5 -3% 278.2 273.2 +2%
Operating profit 0.7 1.2 -42% 21.0 22.9 -8%
% of net sales 1.1% 1.9% 7.6% 8.4%
Comparable
operating profit * 1.3 -0.2 750% 25.3 20.9 +21%
% of net sales 2.1% -0.3% 9.1% 7.6%
Cash flow from
operations** -0.3 4.0 -108% 15.6 21.7 -28%
Gearing % 77.3% 73.2% 77.3% 73.2%
EPS, EUR 0.00 -0.01 100% 0.17 0.24 -29%
-----------------------------------------------------------
* Excluding non-recurring items and mark-to-market valuations of
operative currency derivatives.
**Comparative period restated, see notes.
Market environment
As the Rapala Group's direct distribution operations expand over 35 countries
around the world, the market conditions varied between different regions
throughout the year. In the US the economy and weathers remained very stable,
which created an excellent foundation for good business. Many European countries
also enjoyed favorable summer weather which helped fishing tackle sales. On the
other hand the Nordic countries suffered from poor summer weather which had
negative impact on the sales. The late arrival of winter affected ice fishing
sales negatively in North America and the Nordic countries in the fourth
quarter.
The political and economic unrest in Russia and Ukraine reflected very
negatively on the respective markets. While many currencies fluctuated
throughout the year, the strengthening of the US Dollar had the biggest effect
on the Group's business by supporting the US business while hurting the
profitability in other countries.
Regardless of the turbulent business environment, the Group's overall sales were
stable and the comparable profitability improved.
Business Review October-December 2015
The Group's net sales for the fourth quarter were down 3%. Changes in
translation exchange rates increased sales by 2.3 MEUR of the increase in net
sales. Correspondingly also with comparable translation exchange rates quarterly
net sales were down 6% from last year.
North America
While the weather of 2015 was good for the traditional fishing tackle business,
unseasonably warm end of the year and consequently the lack of ice had a
negative effect on ice fishing sales in the fourth quarter. The loss of a
distribution agency in the US further reduced ice fishing sales by close to 3
MUSD in the last quarter compared to 2014. The strong US dollar had a positive
impact on the business in the US, while simultaneously affecting negatively the
business in Canada, where the economy is suffering. The sales in North America
were down with comparable exchange rates.
Nordic
The Group's Nordic sales were up from last year, driven by improved winter sport
presales, recovery of the hunting business in Sweden, and inventory cleaning and
product portfolio streamlining projects in Norway. Due to warm weather and poor
ice conditions the ice fishing sales were behind last year. In the end of year
the Norwegian warehousing operations were transferred to Sweden and these two
markets will be served from one merged warehouse.
Rest of Europe
The business environment in the whole region was very challenging and the
Group's overall sales in the Rest of Europe were further hurt by the economic
and political unrest in Russia and Ukraine. With comparable exchange rates the
sales were down from last year; excluding Russia and Ukraine the sales decreased
6% from last year. While Spain and Portugal showed growth in sales, the overall
sentiment in the region was reserved.
Rest of the World
Rest of the World sales were down. While majority of the Asia-Pacific region
suffered from uncertainties and a decreasing trend, the sales were supported by
very positive development boosted by new product lines in South Africa. The
sales also grew in Chile, Mexico and South Korea.
External Net Sales by Area
---------------------------------------------------------
IV IV change
Comparable change %
MEUR 2015 2014 %
---------------------------------------------------------
North America 25.8 24.7 +4% -7%
Nordic 10.5 9.7 +8% +8%
Rest of Europe 13.8 17.3 -20% -17%
Rest of the World 9.4 9.8 -4% -3%
Total 59.7 61.5 -3% -6%
---------------------------------------------------------
Business Review January-December 2015
The Group's net sales for the year were up 2%. Changes in translation exchange
rates increased sales by approximately 6.2 MEUR, US Dollar and Russian Ruble
impact largely offsetting each other. With comparable translation exchange rates
full year net sales were at last year's level.
North America
Overall the year 2015 was positively stable in the US, highlighted by strong new
product introductions and positive development in group-branded lure and other
summer fishing sales. The increase was partially offset with the loss of a
distribution agency in the US market that constituted 5 MUSD sales last year,
and the late arrival of winter that reduced ice fishing sales. While the strong
US dollar and low fuel prices resulted in positive development in the domestic
US market, the comparable sales in North America decreased slightly. The
challenges in the Canadian market affected sales negatively.
Nordic
Nordic sales were up. The positive development was result of a new hunting
dealership in Finland and improved fishing and hunting sales in Sweden. Winter
sport sales were up in the first and fourth quarter, compared to the very low
levels last year. The cold and rainy summer had a negative impact on the summer
fishing sales, especially in Norway. Warm last quarter weather slowed down the
ice fishing sales and replenishment orders. Denmark suffered from tough business
environment throughout the year.
Rest of Europe
The economic difficulties continued in Russia, affecting the sales badly. While
the Group's operations in Russia are still profitable and healthy, the business
volumes have come down to a half since the crisis started two years ago. Sales
in Rest of Europe were down. Excluding Russia and Ukraine the regions comparable
sales increased 3% from last year despite the challenging business environment.
The increase was led by strong-performing France. Spain has been struggling with
an economic crisis for years, but is now recovering. The Group has started to
expand into hunting distribution in Spain and the Baltic countries, which shows
positive growth.
Rest of the World
The Rest of the World sales varied geographically. The most positive development
was seen in South Africa. Sales grew also in Malaysia, South Korea, Thailand,
Chile and Mexico. The economic situation and business environment in Brazil was
difficult. Additional challenges were seen in the Group's performance in
Australia, Japan and Indonesia. Overall comparable sales for Rest of the World
were affected by currencies, but it was still above last year.
External Net Sales by Area
---------------------------------------------------------
I-IV I-IV change Comparable change %
MEUR 2015 2014 %
---------------------------------------------------------
North America 99.2 86.1 +15% -1%
Nordic 56.2 54.9 +2% +4%
Rest of Europe 86.9 98.7 -12% -4%
Rest of the World 35.9 33.5 +7% +3%
Total 278.2 273.2 +2% 0%
---------------------------------------------------------
Financial Results and Profitability
Comparable (excluding non-recurring items and mark-to-market valuations of
operative currency derivatives) operating profit increased notably from last
year for the quarter and full year. Changes in translation exchange rates,
especially the weakening of Ruble, burdened quarterly comparable operating
profit by approximately 0.4 MEUR and full year operating profit by approximately
1.4 MEUR. With comparable translation exchange rates comparable operating profit
was 1.8 MEUR above of last year's level for the quarter and 5.9 MEUR ahead of
last year for the full year period.
Comparable operating profit margin was 2.1% (-0.3) for the quarter and 9.1%
(7.6) for the year. Fourth quarter profitability was supported by better gross
margin and stable fixed costs compared to last year. Quarter and full year
profitability were both supported by stronger sales of group-branded products in
USA as well as continuing recovery of the Asian manufacturing operations'
profitability, while negatively impacted by stronger US dollar lowering the
margins of third party products and negative sales development in Russia.
Reported operating profit was down for the quarter and full year. Respectively
reported operating profit margin was 1.1% (1.9) for the quarter and 7.6% (8.4)
for the year. Reported operating profit included loss on non-recurring items of
1.0 MEUR (0.9) for the quarter and 2.3 MEUR (1.8) for the year related to non-
cash write-downs originating from the transfer of manufacturing from China to
Batam, Indonesia, and costs relating to closing down Norwegian warehousing
operations. Mark-to-market valuation of operative currency derivatives had a
significant impact on the reported operating profit compared to last year, being
0.4 MEUR gain (2.3 gain) for the quarter and 2.1 MEUR loss (3.8 gain) for the
year.
Total financial (net) expenses decreased from last year's level to 1.1 MEUR
(1.5) for the quarter and 6.8 MEUR (7.2) for the year. Financial items were
impacted by the net foreign exchange expenses of 0.2 MEUR gain (0.6 loss) for
the quarter and 3.3 MEUR loss (3.4 loss) for the year. Net interest and other
financing expenses were 1.2 MEUR (0.8) for the quarter and decreased from last
year's level to 3.5 MEUR (3.8) for the full year.
Net profit was above last year for the quarter but behind last year for the full
year. Earnings per share were 0.00 EUR (-0.01) for the quarter and 0.17 EUR
(0.24) for the full year. Change in mark-to-market valuation of operative
currency derivatives was having notable negative impact on Group's net profit
and EPS compared to last year. Quarterly income taxes were impacted by changes
in deferred taxes while full year income taxes were burdened by loss making
units. Last year full year 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 increased from last year and totaled 0.0 MEUR
(-0.6) for the quarter and 1.4 MEUR (1.0) for the full year.
Key figures
----------------------------------------------------------------------------
IV IV change I-IV I-IV change
MEUR 2015 2014 % 2015 2014 %
----------------------------------------------------------------------------
Net sales 59.7 61.5 -3% 278.2 273.2 +2%
Operating profit 0.7 1.2 -42% 21.0 22.9 -8%
Comparable operating
profit * 1.3 -0.2 750% 25.3 20.9 +21%
Net profit 0.0 -0.8 100% 8.1 10.2 -21%
----------------------------------------------------------------------------
* Excluding non-recurring items and mark-to-market valuations of
operative currency derivatives.
Group Products
Fourth quarter and full year sales were negatively impacted by lower ice fishing
sales, while supported by better sales of winter sports products. Strong
campaigns and new product launches in the US supported by the strong US dollar
improved the Rapala lure and VMC hook sales for the whole year. The weakening
Russian Ruble and economic crisis in the country continued to reduce the Group
Products' sales significantly throughout the year. Fourth quarter operating
profit for Group Products improved notably from last year driven by lures and
hooks. Full year operating profit improved from last year supported by increased
sales and better profitability in the US. The profitability of the Asian
manufacturing operations improved significantly in the latter half of the year.
Third Party Products
Fourth quarter and full year sales of Third Party Products continued to decrease
from last year. Similarly third party fishing and especially ice fishing sales
were lower than last year due to losing a distribution dealership in the US.
Full year hunting products sales increased in Finland and Sweden. The economic
unrest in Russia and Ukraine caused majority of the decrease in Third Party
Product sales throughout the year.
Operating profit for Third Party Products was down from last year both for the
quarter and full year following the reduced sales and unfavorable exchange
rates' impact on purchases.
Net Sales by Segment
--------------------------------------------------
IV IV change Comparable
MEUR 2015 2014 % change %
--------------------------------------------------
Group Products 40.2 40.0 +1% -4%
Third Party Products 19.5 21.5 -9% -11%
Eliminations 0.0 0.0
Total 59.7 61.5 -3% -6%
--------------------------------------------------
---------------------------------------------------
I-IV I-IV change Comparable
MEUR 2015 2014 % change %
---------------------------------------------------
Group Products 184.7 171.3 +8% +2%
Third Party Products 93.5 102.0 -8% -4%
Eliminations 0.0 0.0
Total 278.2 273.2 +2% 0%
---------------------------------------------------
Operating profit by Segment
-----------------------------------------------------------
IV IV change I-IV I-IV change
MEUR 2015 2014 % 2015 2014 %
-----------------------------------------------------------
Group Products 2.3 1.7 +35% 18.1 15.0 +21%
Third Party Products -1.6 -0.6 -167% 2.9 7.9 -63%
Total 0.7 1.2 -42% 21.0 22.9 -8%
-----------------------------------------------------------
Financial position
Cash flow from operations decreased from last year's strong levels being -0.3
MEUR (4.0) for the quarter and 15.6 MEUR (21.7) for the year. Quarterly and full
year cash flow was burdened by change in working capital driven by timing of
payables. Net change in working capital amounted to 1.0 MEUR (2.9) for the
quarter and -3.3 MEUR (1.5) for the year.
Inventories increased slightly by 2.4 MEUR from last December amounting to
116.2 MEUR (113.8), of which 0.5 MEUR is related to change in translation
exchange rates. Increase in inventories was driven by transfer of production
from China to Indonesia and challenging trading conditions resulting in lower
than expected sales in various countries, which prevented the Group from
achieving planned inventory reductions.
Net cash used in investing activities was at last year's level and totaled 2.4
MEUR (1.6) for the quarter and 8.6 MEUR (8.1) for the year. Normal operative
capital expenditure was 3.5 MEUR (2.7) for the quarter and 9.1 MEUR (8.5) for
the year. Fourth quarter investing activities included 1.1 MEUR (1.0) annual
installment received related to the 2011 disposal of the gift business. Full
year investing activities included the last installment of the acquisition of
the Sufix brand of 0.9 MEUR (0.8).
Liquidity position of the Group was good. Undrawn committed long-term credit
facilities amounted to 79.9 MEUR at the end of the period. Gearing and net
interest-bearing debt increased from last year and equity-to-assets was slightly
above last year's level. Following the lower reported EBITDA and increased net
interest bearing debt, the Group had agreed with its lenders on higher covenant
levels for December 31, 2015 and March 31, 2016 and expects to comply with these
covenant levels.
Key figures
------------------------------------------------------------------------------
IV IV change I-IV I-IV change
MEUR 2015 2014 % 2015 2014 %
------------------------------------------------------------------------------
Cash flow from operations * -0.3 4.0 -108% 15.6 21.7 -28%
Net interest-bearing debt at end of
period 108.2 99.9 +8% 108.2 99.9 +8%
Gearing % 77.3% 73.2% 77.3% 73.2%
Equity-to-assets ratio at end of
period, % 44.7% 44.1% 44.7% 44.1%
------------------------------------------------------------------------------
* Comparative periods 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
2015 strategy implementation continued in various areas.
During third quarter the Group announced changes in its management organization.
The new management structure will put more focus on managing and improving the
end-to-end performance of the Group's businesses, consolidating the reporting
lines of geographical regions and increasing the coordination between the
Group's brands. The role of global supply chain management is reinforced to
achieve significant reductions in the Group's working capital levels. Planning
and implementation of new actions started in the end of the year to achieve
acceleration in the profitable growth strategy and improvement of the capital
efficiency.
Throughout 2015 the Group put a lot of attention and resources to its Asian lure
manufacturing unit in Batam, Indonesia, to develop the business and operations
in order to exploit the strengths and capture the benefits of this unit. The
performance of the Batam operations clearly improved during the year and further
improvements in terms of production efficiencies, quality and new manufacturing
techniques can still be expected in the future. The unit forms solid basis for
future growth of the Group's Storm, Luhr Jensen, Blue Fox and Williamson branded
lures.
Discussions and negotiations regarding acquisitions and business combinations
continued throughout 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 contributors to the value and commercial success of the
brands. This was also taken into account in the new management organization by
specifically appointing a group level product development director to coordinate
the Group's lure product development and innovations on global basis.
The most important product launch in 2015 was the introduction of the new Rapala
Shadow Rap lure, which together with new Rapala accessory and Sufix line
products received awards in the European trade show. Introduction of new hero
lures is in the pipeline and they will be released to the US market early 2016.
In addition to Rapala, the Group is also putting lot of focus on Storm lures
manufactured in the Batam factory.
Organization and Personnel
Average number of personnel for the fourth quarter was 3 228 (2 694) and 3 078
(2 716) for the year, increase coming mainly from expansion of lure
manufacturing operations in Batam and reduction of outsourcing in China. At the
end of December, the number of personnel was
3 159 (2 822).
On September 24(th), 2015 the Board of Directors made appointments and changes
in the Group's Executive Committee with immediate effect. Jussi Ristimäki was
appointed as Deputy Chief Executive Officer. Aku Valta and Cyrille Viellard were
appointed as new members to Executive Committee.
Short-term Outlook and Risks
The Group's outlook for 2016 is stable.
New product introductions and low fuel prices are expected to support consumer
spending on fishing tackle in the biggest market in the USA. Simultaneously the
outlook for the Russian market is very uncertain. In Europe competition is
expected to tighten.
The sales of winter sports and ice fishing products are partly dependent on
weather conditions and 2015/2016 season has started with somewhat unfavorable
conditions.
The 80 year anniversary of Rapala Lures will be celebrated with special sales
and marketing campaigns.
The operations of the Batam manufacturing unit have stabilized and are expected
to further support Group's profitability. Inventory and fixed cost management
will be in the Group's focus in 2016.
Assuming comparable translation exchange rates, 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 2015 levels.
Proposal for profit distribution
The Board of Directors proposes to the Annual General Meeting that a dividend of
0.15 EUR (0.20 EUR) per share is distributed from the Group's distributable
equity and any remaining distributable funds are allocated to retained earnings.
At December 31, 2015 the distributable equity totaled to 29.2 MEUR.
No material changes have taken place in the Group's financial position after the
end of the financial year. The Group's liquidity is good and the view of the
Board of Directors is that the distribution of the proposed dividend will not
undermine this liquidity.
Financial Statements and Annual General Meeting
Financial Statements for 2015 and Corporate Governance Statement will be
published in the beginning of week 10 commencing on March 7, 2016. Annual
General Meeting is planned to be held on April 1, 2016.
Rapala VMC Corporation changes its reporting practice and will not publish first
and third quarter interim reports starting from January 1, 2016. Instead, the
Group will release a Trading Report for the first and third quarter of the year.
First quarter Trading Report 2016 will be published on April 28, 2016.
Helsinki, February 9, 2016
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, Deputy CEO and CFO, +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: 660197#) 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: 4384034). Financial information and teleconference replay facility are
available at www.rapalavmc.com.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
STATEMENT OF INCOME IV IV I-IV I-IV
MEUR 2015 2014 2015 2014
-------------------------------------------------------------------------
Net sales 59.7 61.5 278.2 273.2
Other operating income 0.6 0.4 1.0 1.0
Materials and services 28.5 30.2 130.9 128.1
Personnel expenses 17.3 16.0 68.4 65.6
Other costs and expenses 11.9 12.5 52.3 50.8
Share of results in associates and joint ventures -0.1 -0.1 0.4 0.2
-----------------------
EBITDA 2.4 3.0 28.1 30.0
Depreciation, amortization and impairments 1.7 1.9 7.1 7.1
-----------------------
Operating profit (EBIT) 0.7 1.2 21.0 22.9
Financial income and expenses 1.1 1.5 6.8 7.2
-----------------------
Profit before taxes -0.4 -0.3 14.2 15.7
Income taxes -0.4 0.6 6.1 5.5
-----------------------
Net profit for the period 0.0 -0.8 8.1 10.2
-----------------------
Attributable to:
Equity holders of the company 0.0 -0.3 6.7 9.2
Non-controlling interests 0.0 -0.6 1.4 1.0
Earnings per share for profit attributable
to the equity holders of the company:
Earnings per share, EUR (diluted = non-diluted) 0.00 -0.01 0.17 0.24
STATEMENT OF COMPREHENSIVE INCOME IV IV I-IV I-IV
MEUR 2015 2014 2015 2014
-----------------------------------------------------------------------
Net profit for the period 0.0 -0.8 8.1 10.2
---------------------
Other comprehensive income, net of tax
Change in translation differences* 0.6 -1.0 5.5 4.7
Gains and losses on cash flow hedges* 0.2 0.1 0.4 0.2
Gains and losses on hedges of net investments* 0.2 0.0 -2.9 0.1
Actuarial gains (losses) on defined benefit plan 0.1 -0.2 0.1 -0.2
---------------------
Total other comprehensive income, net of tax 1.2 -1.0 3.2 4.8
---------------------
Total comprehensive income for the period 1.2 -1.9 11.3 15.1
---------------------
Total comprehensive income attributable to:
Equity holders of the Company 1.7 -0.4 11.0 15.3
Non-controlling interests -0.5 -1.5 0.3 -0.2
* Item that may be reclassified subsequently to the statement of income
STATEMENT OF FINANCIAL POSITION Dec 31 Dec 31
MEUR 2015 2014
-----------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets 78.2 74.4
Property, plant and equipment 33.9 32.0
Non-current assets
Interest-bearing 2.8 3.0
Non-interest-bearing 11.8 11.5
--------------
126.7 120.8
Current assets
Inventories 116.2 113.8
Current assets
Interest-bearing 1.0 1.1
Non-interest-bearing 58.1 62.3
Cash and cash equivalents 11.4 12.2
--------------
186.7 189.4
Total assets 313.4 310.3
--------------
EQUITY AND LIABILITIES
Equity
Equity attributable to the equity holders of the company 131.5 128.3
Non-controlling interests 8.5 8.2
--------------
140.0 136.5
Non-current liabilities
Interest-bearing 58.6 72.3
Non-interest-bearing 13.4 13.3
--------------
72.0 85.5
Current liabilities
Interest-bearing 64.8 43.9
Non-interest-bearing 36.6 44.2
--------------
101.5 88.2
Total equity and liabilities 313.4 310.3
--------------
IV IV I-IV I-IV
KEY FIGURES 2015 2014 2015 2014
----------------------------------------------------------------------------
EBITDA margin, % 4.0% 4.9% 10.1% 11.0%
Operating profit margin, % 1.1% 1.9% 7.6% 8.4%
Return on capital employed, % 1.1% 2.0% 8.7% 9.8%
Capital employed at end of
period, MEUR 248.1 236.5 248.1 236.5
Net interest-bearing debt at
end of period, MEUR 108.2 99.9 108.2 99.9
Equity-to-assets ratio at end
of period, % 44.7% 44.1% 44.7% 44.1%
Debt-to-equity ratio at end of
period, % 77.3% 73.2% 77.3% 73.2%
Earnings per share, EUR
(diluted = non-diluted) 0.00 -0.01 0.17 0.24
Equity per share at end of
period, EUR 3.43 3.34 3.43 3.34
Average personnel for the
period 3 228 2 694 3 078 2 716
----------------------------------------------------------------------------
Definitions of key figures are consistent with those in the
financial statement 2014.
STATEMENT OF CASH FLOWS IV IV I-IV I-IV
MEUR 2015 2014 2015 2014
Restated** Restated**
-----------------------------------------------------------------------------
Net profit for the period 0.0 -0.8 8.1 10.2
Adjustments to net profit for the period * 2.3 3.1 21.8 17.1
Financial items and taxes paid and
received -3.6 -1.2 -11.1 -7.1
Change in working capital 1.0 2.9 -3.3 1.5
-----------------------------------------------------------------------------
Net cash generated from operating
activities -0.3 4.0 15.6 21.7
Investments -3.5 -2.7 -9.1 -8.5
Proceeds from sales of assets 0.0 0.1 0.2 0.4
Sufix brand acquisition - - -0.9 -0.8
Acquisition of other subsidiaries, net of
cash - - - -0.2
Proceeds from disposal of subsidiaries,
net of cash 1.1 1.0 1.1 1.0
Change in interest-bearing receivables - 0.0 0.0 0.0
-----------------------------------------------------------------------------
Net cash used in investing activities -2.4 -1.6 -8.6 -8.1
Dividends paid to parent company's
shareholders - - -7.7 -9.2
Dividends paid to non-controlling interest - - - -3.6
Net funding 2.4 -1.6 0.0 -4.2
Purchase of own shares - -0.5 -0.2 -0.9
-----------------------------------------------------------------------------
Net cash generated from financing
activities 2.4 -2.1 -7.8 -17.9
Change in cash and cash equivalents -0.3 0.2 -0.9 -4.2
Cash & cash equivalents at the beginning
of the period 11.4 12.8 12.2 16.9
Foreign exchange rate effect 0.3 -0.9 0.1 -0.5
-----------------------------------------------------------------------------
Cash and cash equivalents at the end of
the period 11.4 12.2 11.4 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-
non-
pre- value lation 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 * - - 0.2 6.1 - - 9.0 -0.2 15.1
Purchase of
own shares - - - - - -0.9 - - -0.9
Dividends - - - - - - -9.2 -3.6 -12.8
-----------------------------------------------------------------------------
Equity on Dec
31, 2014 3.6 16.7 -1.1 -6.5 4.9 -5.2 116.0 8.2 136.5
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
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 * - - 0.4 3.8 - - 6.7 0.3 11.3
Purchase of
own shares - - - - - -0.2 - - -0.2
Dividends - - - - - - -7.7 - -7.7
-----------------------------------------------------------------------------
Equity
on Dec
31, 2015 3.6 16.7 -0.7 -2.6 4.9 -5.4 115.0 8.5 140.0
-----------------------------------------------------------------------------
* For the
period, (net of
tax)
SEGMENT INFORMATION*
MEUR IV IV I-IV I-IV
Net Sales by Operating Segment 2015 2014 2015 2014
--------------------------------------------------------
Group Products 40.2 40.0 184.7 171.3
Third Party Products 19.5 21.5 93.5 102.0
Eliminations 0.0 0.0 0.0 0.0
--------------------------------------------------------
Total 59.7 61.5 278.2 273.2
Operating Profit by Operating Segment
--------------------------------------------------------
Group Products 2.3 1.7 18.1 15.0
Third Party Products -1.6 -0.6 2.9 7.9
--------------------------------------------------------
Total 0.7 1.2 21.0 22.9
Assets by Operating Segment Dec 31 Dec 31
MEUR 2015 2014
-------------------------------------------------
Group Products 236.8 230.4
Third Party Products 61.3 63.6
-------------------------------------------------
Non-interest-bearing assets total 298.2 294.0
Unallocated interest-bearing assets 15.2 16.3
-------------------------------------------------
Total assets 313.4 310.3
* 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 IV IV I-IV I-IV
MEUR 2015 2014 2015 2014
---------------------------------------------------
North America 25.8 24.7 99.2 86.1
Nordic 10.5 9.7 56.2 54.9
Rest of Europe 13.8 17.3 86.9 98.7
Rest of the world 9.4 9.8 35.9 33.5
---------------------------------------------------
Total 59.7 61.5 278.2 273.2
KEY FIGURES BY QUARTERS I II III IV I-IV I II III IV I-IV
MEUR 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015
------------------------------------------------------------------------------
Net sales 66.2 77.7 67.8 61.5 273.2 73.9 80.1 64.5 59.7 278.2
EBITDA 9.1 10.4 7.5 3.0 30.0 10.8 10.1 4.8 2.4 28.1
Operating profit 7.4 8.6 5.7 1.2 22.9 9.1 8.3 2.9 0.7 21.0
Profit before taxes 5.5 7.0 3.5 -0.3 15.7 6.9 6.4 1.3 -0.4 14.2
Net profit for the period 4.3 4.1 2.7 -0.8 10.2 4.3 4.0 -0.2 0.0 8.1
------------------------------------------------------------------------------
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 amended standard IAS 19 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 were disclosed in the first quarter 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
reporting period that would have a material impact on the financial statements
for January-December 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 December 31, 2015, the book value of inventories included a provision for net
realizable value of 5.3 MEUR (4.1 MEUR at December 31, 2014).
Non-recurring income and expenses included in operating
profit IV IV I-IV I-IV
MEUR 2015 2014 2015 2014
-------------------------------------------------------------------------------
Closure of Chinese lure manufacturing * -0.5 -0.8 -1.7 -1.7
Closing down of Norwegian warehousing
operations -0.5 - -0.5 -
Other restructuring costs - 0.0 - 0.0
Other non-recurring items - -0.1 - -0.1
-------------------------------------------------------------------------------
Total included in EBITDA and operating profit -1.0 -0.9 -2.1 -1.8
-------------------------------------------------------------------------------
Other non-recurring impairments - - -0.1 -
-------------------------------------------------------------------------------
Total included in operating profit -1.0 -0.9 -2.3 -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 Dec 31 Dec 31
MEUR 2015 2014
--------------------------------------------------------------
Minimum future lease payments on operating leases 14.4 16.4
----------------------------------------------------------------
Sales Other
Related party
transactions and other Pur- Rents expen- Recei- Paya-
MEUR income chases paid ses vables bles
-------------------------------------------------------------------------------
I-IV 2015
Joint venture Shimano
Normark UK Ltd 3.6 - - 0.0 0.1 -
Associated company
Lanimo Oü 0.0 0.1 - - 0.0 -
Entity with significant
influence over the
Group* - - 0.2 0.1 0.0 -
Management - - 0.2 0.0 - 0.0
I-IV 2014
Joint venture Shimano
Normark UK Ltd 3.2 - - - 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.
Dec 31 Dec 31
Open derivatives 2015 2014
--------------------------------
Nominal Fair Nominal Fair
MEUR Value Value Value Value
-----------------------------------------------------------------------------
Derivative financial instruments designed as
cash flow hedges
Interest rate swaps, 1 to 5 years 58.9 -0.4 61.4 -0.4
-----------------------------------------------------------------------------
Total 58.9 -0.4 61.4 -0.4
-----------------------------------------------------------------------------
Derivative financial instruments designed as
cash flow and fair value hedges
Interest rate swaps, 1 to 5 years 15.0 1.3 20.0 0.1
-----------------------------------------------------------------------------
Total 15.0 1.3 20.0 0.1
-----------------------------------------------------------------------------
Non-hedge accounting derivative financial instruments
Interest rate swaps, 1 to 5 years 20.0 -0.4 20.0 -0.4
Currency forwards, less than 12 months 70.9 1.6 67.4 2.3
Currency forwards, 1 to 5 years 7.3 0.7
-----------------------------------------------------------------------------
Total 90.9 1.2 94.6 2.6
-----------------------------------------------------------------------------
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 and will be
updated in financial statement 2015. In 2015 full year, the amount of the
ineffective portion that was recognized in the financial income and expenses of
income statement was -0.1 MEUR (2014: 0.0 MEUR).
Changes in unrealized mark-to-market valuations for operative foreign currency
derivatives
IV IV I-IV I-IV
2015 2014 2015 2014
-------------------------------------------------------------------------------
Included in operating profit 0.4 2.3 -2.1 3.8
-------------------------------------------------------------------------------
Operative foreign currency derivatives that are marked-to-market on reporting
date cause timing differences between the changes in derivatives' 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 changes in unrealized valuations include both valuations
of derivatives that will realize in the future periods as well as reversal of
previously accumulated value of derivatives that realized in the accounting
period.
Fair values of financial
instruments Dec 31 Dec 31
2015 2014
-----------------------------------------------------------------------------
Carrying Fair Carrying Fair
MEUR value value value value
-----------------------------------------------------------------------------
Assets
Available-for-sale financial
assets (level 3) 0.3 0.3 0.3 0.3
Current non-interest-bearing
assets (excl. derivatives) 56.5 56.6 58.8 58.8
Derivatives (level 2) 3.7 3.7 5.4 5.4
-----------------------------------------------------------------------------
Total 60.4 60.6 64.5 64.5
Liabilities
Non-current interest-bearing
liabilities (excl. derivatives) 58.6 58.8 72.3 72.7
Derivatives (level 2) 1.6 1.6 3.1 3.1
-----------------------------------------------------------------------------
Total 60.1 60.3 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.
Share related key figures Dec 31, 2015 Dec 31, 2014
-----------------------------------------------------------------------
Number of shares 39 000 000 39 000 000
Number of shares, average 39 000 000 39 151 030
Number of treasury shares 639 671 606 807
Number of treasury shares, % 1.6% 1.6%
Number of outstanding shares 38 360 329 38 393 193
Number of shares traded, YTD 2 074 690 1 065 880
Closing price of share 4.74 4.71
Highest share price, YTD 5.85 6.00
Lowest share price, YTD 4.57 4.69
Average price of treasury shares, all time 4.87 4.85
Acquired treasury shares, YTD 32 864 167 948
-----------------------------------------------------------------------
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. Group
management continuously develops its 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 and will be updated and included in the Financial
Statements 2015.
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 weather risk is diversified
due to the wide geographical footprint of the Group.
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 Group's credit facilities include some profitability, net debt and equity
related financial covenants, which are actively monitored. Following the lower
reported EBITDA and increased net interest bearing debt, the Group and its
lenders have agreed on a higher leverage covenant for Q4/2015 and Q1/2016. The
Group expects to decrease its leverage ratio back to lower levels during the
first half of 2016. Liquidity and refinancing risks are well under control, but
increased leverage level may put pressure on Group's financing costs.
The fishing tackle business has traditionally not 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
Unternehmensinformation / Kurzprofil:
Datum: 09.02.2016 - 08:01 Uhr
Sprache: Deutsch
News-ID 449445
Anzahl Zeichen: 65587
contact information:
Town:
Helsinki
Kategorie:
Business News
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