RAPALA VMC CORPORATION HIGHLIGHTS Februar bruary 15, 15, 2019 - PowerPoint PPT Presentation

RAPALA VMC CORPORATION HIGHLIGHTS Februar bruary 15, 15, 2019 2019

Deploying the strategy to find increm ental grow th in new categories 2

Rapala Pike Lures • Launched in January in France at the Clermont-Ferrand Show • Targeted digital marketing reached over 5 million people interested in predator fishing in Europe • Full-on approach with three big pike lures in broad color selections • First year sales target reached on less than 6 months

Rapala Saltw ater Lures • Launched first in March for the APAC region with X-Rap Magnum Explode • Second wave with X-Rap Magnum Xtreme at AFTA Show in Australia in July • Targeted digital marketing reached over 1.5 million people interested in saltwater big game fishing

RAPALA VMC CORPORATION FULL YEAR 2018 Februar bruary 15, 15, 2019 2019

STRONG SALES AND PROFITABILITY GROWTH FROM LAST YEAR NET SALES NE T SALES COMP COMPARABLE OPERA ARABLE OPERATING ING PROFIT PROFIT INVENTOR INVENT ORY V Y VALUE (MEUR) (MEUR) (MEUR) +3,6% +3,6% +6,7 +6,7 +5,2 +5,2 262,4 18,8 102,2 260,6 99,1 253,3 92,5 16,7 11,4 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 FY • FX comparable change: +51,1% (+5,6 MEUR) • FX comparable change: +6,9% (+17,0 • FX comparable change: +7,9% (+7,2 MEUR) MEUR) • Sales growth driving profitability • Absolute level of inventories grew from 2017 • Sales growth in all geographical regions, • Successfully executed performance improvement • Despite increase in absolute inventory, especially North America initiatives in European lure manufacturing and average rolling inventory decreased from some other units • Group Products grew 7% in local currencies 2017 • Batam plant continues to burden profitability and • Third Party Products grew 7% in local has clear profit improvement potential currencies • EPS is 0,13 EUR (0,05) • Board’s proposal for dividend: 0,06 EUR (0,04) 6

SALES GROWTH IN ALL AREAS IN LOCAL CURRENCIES 2017 FY 54,3 +1,3% (+0,7) 2018 FY 55,1 2017 FY 89,4 +6,6% (+5,9) 2018 FY 95,4 2017 FY 77,6 +1,0% (+0,8) 2018 FY 78,4 ‐ 6% ‐ 6% 2017 FY 31,9 +5,2% + 2 % (+1,6) 2018 FY 33,6 NORTH AMERICA NORTH AMERICA NORDIC NORDIC REST OF REST OF EUROPE EUROPE REST OF THE REST OF THE WORLD WORLD • FX comparable change: +11,4% (+9,7 • FX comparable change: +3,4% (+1,8 • FX comparable change: +3,3% • FX comparable change: +9,6% (+2,9 MEUR) MEUR) (+2,5 MEUR) MEUR) • Growth in most of the product • Strong sales in winter sports products • Many countries in the area grew • Expansion in hunting business supported categories, especially in Rapala lures growth of the area • Marttiini sales below last year’s • On the other hand, sales decline and ice fishing products record-high numbers, which were in Russia offset most of sales • Positive development in Latin America • Successful turnaround in Canada boosted by Finland 100 year growth in other countries anniversary knives 7

BOTH SEGMENTS GREW FROM LAST YEAR • Gr Group Pr oup Products oducts’ net sales growth mostly driven NE NET SALES T SALES (MEUR) by increased sales in Rapala lures, fishing lines, +3,5% +3,5% hooks, ice fishing products and winter sports 174,6 172,1 168,8 products. Sales of hunting knives were below +3,8% +3,8% last year. 88,5 87,8 84,5 • Thir Third P d Party Pr y Products oducts’ ’ sales driven by expansion in hunting business, growth in rod and reel category and increased third party 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 FY RD PARTY PRODUCTS 3 RD winter sports sales. GROUP PRODUCTS GROUP PRODUCTS PARTY PRODUCTS • Pr Profitabilit ofitability incr increase ease mainly driven by topline COMPARABLE OPERA COMP ARABLE OPERATING ING PROFIT PROFIT growth and successful restructuring projects (MEUR) +4,1 +4,1 17,4 17,2 13,0 +1,1 +1,1 1,4 -0,5 -1,6 2017 FY 2018 FY 2017 FY 2018 FY 2016 FY 2016 FY RD PARTY PRODUCTS 3 RD PARTY PRODUCTS GROUP PRODUCTS GROUP PRODUCTS 8

EXECUTION OF GROUP STRATEGY PROGRESSING Own manufacturing Own manufacturing Competitive mpetitive Brand Brand Research and Research and Broad own Broad own distribut distribution on 1 2 3 4 platform and platform and advantages advantages development development network and network and strong strong portfolio portfolio established sourcing established sourcing capabilities capabilities local presence local presence channels channels Unique competitive advantages f Unique competitive Unique competitive Unique competitive advantages f advantages form the f advantages form the f rm the foundation f rm the foundation f undation for Rapala undation for Rapala r Rapala’s str r Rapala’s str strategy strategy tegy tegy Organic gr Organic gr ganic growth ganic growth th within th within within within Improving pr Impr Improving pr Impr oving profitabilit oving profitabilit ofitability ofitability y and y and and and Improving oper Impr Improving oper Impr oving operational oving operational ational ational lightening balance sheet lightening balance sheet lightenin lightenin g balance sheet g balance sheet per performance per performance ormance ormance fishing fishing fishing fishing Market and customer focus Rigid management of product Operating in an integrated manner • • • portfolio Growth from niches and specific Optimizing end-to-end performance • • product categories Securing return on capital of all of the Group • businesses Leveraging Group’s brands with Increased speed and agility, • • innovative marketing and brand Tight cost and capital control responsiveness and efficiency • management Supply chain development Utilizing strong local presence • • Solid financial Solid financial and oper Solid financial Solid financial and oper and operational and operational ational platf ational platf platform platform rm for rm for r long term r long term long term gr long term gr growth growth th th Mid- Mid- to long term tar to long term target et is is to r to return eturn to mor to more aggr aggressive essive gr growth th tr track ack and actively seek and actively seek syner synergistic gr istic growth oppor th opportunities also unities also outside outside of of fishing tackle business. fishing tac le business. 9

SHORT-TERM OUTLOOK AND GUIDANCE • Market outlook for North America is positive and the Group has a strong order book for 2019. The Group sees continued healthy consumer demand for its products via old and new channels. Furthermore, the Group’s position with major customers in North America is strong. In Europe, the price competition in certain product categories has increased and the markets continue to be very competitive. Overall, the Group expects to grow sales in Group Products. • The Group has launched various strategic initiatives to boost organic growth and improve cost and capital efficiency as well as operational performance in the future. These initiatives, together with projects relating to changes in Group’s partnership with Shimano, will continue to trigger some additional expenses and investments in 2019. • The Gr The Group oup expects 2019 full pects 2019 full year net sales with year net sales with compar comparable able FX r FX rates to tes to be ar be around the same ound the same level as in 2018 and compar level as in 2018 comparable oper able operating ating pr profit ofit (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) to to incr increase f ease from 2018 om 2018. However, there is slightly lower visibility to sales of Shimano products in 2019 in those countries which are affected by the changes in the distribution agreements. Furthermore, the potential slowdown in global economic growth might have some impact on retail and consumer demand. In addition, weather changes may affect the sales of the Group. • The Board of Directors proposes to the Annual General Meeting that a dividend of 0,06 EUR (0,04 EUR) per share would be paid in two equal installments. 10

FINANCIALS

COMPARABLE AND REPORTED OPERATING PROFIT • Comparable* operating profit was 16.7 MEUR (6.4%) for FY 2018 • The effect of translation exchange rates was slightly negative • Strong sales, especially in North America • Strategic projects are yielding results both in distribution and manufacturing • Indonesian lure operations still burdening Group profitability • Reported operating profit included a profit of mark-to-market valuation of operative currency derivatives of 0.7 MEUR. Net expenses of other items affecting comparability included in the reported operating profit were 2.6 MEUR. Items affecting comparability included mainly restructuring expenses of the Batam plant in Indonesia, other restructuring expenses and a gain on sale of a real estate. OPERATING PROFIT OPERATING PROFIT MARGIN (MEUR) (%) +45,8% +1,8 pp. +66,8% +2,1 pp. 18,8 7,2% 16,7 6,4% 14,8 5,6% 4,5% 11,4 3,5% 8,9 2,8% 7,2 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 FY COMPARABLE * REPORTED COMPARABLE * REPORTED *excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability 12