Financial Objectives

The Rapala Group's strategic objective is profitable growth.

The objective of the Group's capital management is to ensure that it maintains healthy capital ratios in order to support its business and to maximize shareholder value. The Group's objective for capital management is to keep:

  • Gearing ratio below 150% and
  • Net interest-bearing debt to EBITDA (rolling 12 months) below 3.8.

Objectives are in line with the financial covenants associated with the Group's loan arrangement.

Short-Term Outlook

Stock Exchange Release, published on April 20, 2021

Rapala VMC Corporation’s outlook for 2021 has improved as a result of stronger than anticipated financial performance during the first three months of the year as well as upgraded positive business outlook for the remaining part of the year. The Group now expects full year 2021 comparable operating profit to increase significantly from the previous year. Key drivers behind the upgraded outlook are exceptionally strong winter sales, strong continued demand for fishing gear as it remains a popular COVID-safe activity globally as well as faster than expected strategy implementation.

Uncertainties however remain for the rest of the year and the COVID-19 pandemic continues to pose some risks for the full-year performance. The pandemic can impact the operating environment of the company in various ways, including lockdowns, store closures, social distancing and an overall change in consumer confidence.

A more detailed review of possible risks and uncertainties, particularly relating to the pandemic, can be found on the company’s website www.rapalavmc.com and in the Risks and business uncertainties - section of the financial statements released on February 9, 2021.

The updated outlook for 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.

 

 

Financial Statement Release for 2020, published on February 9, 2021

General market outlook for fishing products in North America and Europe is positive and end-consumer demand for recreational fishing products is currently on a good level in the Group’s key markets. In Europe, exit of Shimano business and termination of certain other Third Party Products businesses decreases net sales and affects consequently market visibility for 2021 for the region. Net sales for these businesses, which the Group will exit, were in the range of 30 MEUR in 2020. Additionally, the ongoing negotiations with Shimano to end the joint ownership of distribution companies in Russia, Kazakhstan, Czech, Belarus, Hungary, Romania and Croati a might have impacts on the business performance for these countries also in the Group Products segment.

The Group’s supply chain, including own factories and subcontractors, is currently working robustly and fulfilling customer orders. However, uncertainties caused by the COVID-19 pande mic 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 may affect the sales of the Group.

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.