Rapala VMC Corporation’s Annual Accounts 2024: Improved Profitability and Strong Cash Flow in a Challenging Year

RAPALA VMC CORPORATION, Financial Statement Release, March 5, 2025 at 5:00 p.m. EET

January-December (FY) in brief:

Net sales were 220.9 MEUR, close to previous year (221.6). With comparable exchange rates sales were 1% higher than last year.
Operating profit was 8.6 MEUR (4.0).
Comparable operating profit* was 6.2 MEUR (5.6).
Cash flow from operations was 23.4 MEUR (20.6).
Inventories closed at 84.2 MEUR (87.5).
Net profit for the period was 0.4 MEUR (-7.3).
Earnings per share was -0.07 EUR (-0.20).
Dividend proposal is 0.00 EUR per share (0.00).
2025 guidance: Full year comparable operating profit* to increase from the previous year.

July-December (H2) in brief:

Net sales were 100.4 MEUR, down 3% from previous year (103.7). With comparable exchange rates sales were 3% lower than last year.
Operating profit was -2.6 MEUR (-0.4).
Comparable operating profit* was 0.0 MEUR (0.3).
Cash flow from operations was 5.2 MEUR (2.0).
Net profit for the period was -4.2 MEUR (-6.2).
Earnings per share was -0.14 EUR (-0.17).

* Excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability. Other items affecting comparability include material restructuring costs, impairments, gains and losses on business combinations and disposals, insurance compensations and other non-operational items.
Rapala Group presents alternative performance measures to reflect the underlying business performance and to enhance comparability between financial periods. Alternative performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS. Definitions and reconciliation of key figures are presented in the financial section of the release.

President and CEO Lars Ollberg: “We strategically strengthened our business in a challenging year, focusing on brand value, customer relationships, and market positioning in North America and Europe. Despite initial commercial headwinds, we stabilized operations and created a robust foundation for future growth. Our targeted efforts successfully improved overall business performance
Our sales remained steady at 220.9 MEUR (221.6), and our comparable operating profit increased to 6.2 MEUR (5.6). Our profitability improved in both halves of the year, although H2 reported operating profit fell to -2.6 MEUR (-0.4 MEUR) due to one-off’s related to achieving lower operating expense level in the future. Our inventory levels decreased to 84.2 MEUR (87.5), demonstrating successful inventory management and sales optimization. Our operational cash flow was 23.4 MEUR (20.6), reflecting improved net working capital and effective resource and operational management. Our delivery reliability is among the highest in the industry, and customer satisfaction has significantly improved.
Employee satisfaction has risen, with feedback from staff surveys being predominantly very positive. Our employees are our most important resource, and we will pay even more attention to fostering a good team spirit. We also streamlined our management team. Our strategy reflected our commitment to advancing sustainability across our product offering, customer engagement, global operations, and stakeholder relationships. We are aiming to integrate sustainability into all aspects of our business.
North America remains our largest market area, where our position remained strong. The launch of the new Rapala CrushCity product range has exceeded our expectations and has been one of the most successful market entries in recent years. This new product line has opened up new consumer groups for us, particularly among younger enthusiasts, who represent a growing and significant customer segment. CrushCity has further strengthened our relationships with the largest retailers in North America.
Another significant achievement has been the successful integration of 13 Fishing with Rapala USA. As a result of this initiative, 13 Fishing is now profitable, and the product range has been revamped in both summer and winter fishing products. Our customers have widely adopted the new collection into their assortments.
Although there have been challenges in the European markets due to consumer caution, we have succeeded in improving and streamlining our operations. Our profitability in the region has improved during 2024. The enhancement of operational efficiency is evident in shorter delivery times and increased customer satisfaction. Our European sales focus specifically on the sales and marketing of Rapala products as well as Okuma rods and reels.
In the Asian markets, we have also seen growth in sales and profitability. We have started selling Okuma products in Thailand and Korea. The winter sports business has been challenging, but we have implemented several measures to support sales.
Consolidation of lure and knife production to Estonia has yielded results: inventories and lead times have significantly decreased, and we have achieved substantial savings in operational costs. The implementation of the Anaplan logistics tool has improved inventory quality and fill rates.
The development of new products is progressing on schedule, and our product development organization’s collaboration across North America, Europe, and the APAC regions adheres to the "Think Global – Act Local" strategy. An example of this is the global success of the Rapala CrushCity product family in the soft lure market, where it has quickly risen to become one of the best-selling products in its category on all continents. Nearly all of our lures are designed in our modern product development center in Vääksy, Finland.
The year 2024 has been a year of stabilization for us. We believe that our renewed strategy will provide added value to our customers and other stakeholders. We will continue to invest in growth and efficiency to strengthen our position as one of the leading companies in the fishing tackle market.”

Key figures

	H2	H2	Change	FY	FY	Change
MEUR	2024	2023	%	2024	2023	%
Net sales	100.4	103.7	-3%	220.9	221.6	0%
Operating profit/loss	-2.6	-0.4	-550%	8.6	4.0	115%
% of net sales	-2.6%	-0.4%		3.9%	1.8%
Comparable operating profit/loss *	0.0	0.3	-100%	6.2	5.6	11%
% of net sales	0.0%	0.3%		2.8%	2.5%
Cash flow from operations	5.2	2.0	160%	23.4	20.6	14%
Gearing %	39.8%	51.8%		39.8%	51.8%
EPS, EUR	-0.14	-0.17	18%	-0.07	-0.20	66%

* Excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability. “Other items affecting comparability” include material restructuring costs, impairments, gains and losses on business combinations and disposals, insurance compensations and other non-operational items.
Rapala Group presents alternative performance measures to reflect the underlying business performance and to enhance comparability between financial periods. Alternative performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS. Definitions and reconciliation of key figures are presented in the financial section of the release.

Market Environment

In 2024, operating environment was reasonable throughout the year. Eased inflation improved consumer sentiment resulting in improved retail activity. Consumer appetite for consumables improved and higher value item sales continued the path to recovery. Furthermore, favourable open water fishing conditions lasted long in Autumn which acted as a counterweight to political uncertainties that might otherwise have impacted consumer spending.

Business Review January-December 2024

The Group’s net sales for the year were at last year level with reported translation exchange rates. Changes in translation exchange rates had a slight positive impact on the sales and with comparable translation exchange rates, net sales grew by 1% from the comparison period.

North America

Sales in North America increased by 1% from the comparison period with reported translation exchange rates and increased by 1% with comparable translation exchange rates. Newly launched Rapala CrushCity soft plastic lures contributed significantly to the increase in sales. CrushCity boosted also the VMC jigging hook sales. Sales grew in almost all categories except for hard baits, which was impacted by the trend shift in fishing technique which favored soft plastics over hard baits. Favorable Autumn weather conditions prolonged replenishment sales season with big box retailers dominating the market. High retailer carryover inventory in the ice fishing categories resulted in lower pre-order shipments in the later part of the year.

Nordic

Sales in the Nordic market decreased by 7% from the comparison period. With comparable translation exchange rates sales were down by 7%.

Retailers’ inventories returned to healthy levels but general economic condition impacted sales negatively. Demand for consumables improved and CrushCity soft plastic lures contributed positively to sales. Focus on operational excellence continued throughout the year and as a result, sales of open water sales categories landed at prior year level. Strong focus was put on core brands such as Rapala, Sufix and Okuma. Improved availability of products improved sales in the second part of the year.
Winter fishing sales remained at prior year level, while ski business was down due to retailer carryover inventory from the prior season. As a weather-sensitive industry, the ski business was further impacted by unfavorable conditions, contributing to the decline in sales for the whole region.

Rest of Europe

Sales in the Rest of Europe market increased by 2% from the comparison period. With comparable translation exchange rates sales were up by 3% from the previous year.
Market remained challenging but sales landed above prior year driven by successful new product introductions including CrushCity, a strong push on Dynamite Baits and a positive momentum on Okuma and VMC. Sales in France were supported by novelties and early seasonal order deliveries that compensated poor weather conditions and as result, sales remained at prior year level. Growth in the region came from strong positive momentum and focus on operational excellence in UK and in Germany.
Termination of Third Party distributorships had a minor negative impact to the sales of this region.

Rest of the World

With reported translation exchange rates, sales in the Rest of the World market decreased by 5% from the comparison period. With comparable translation exchange rates, sales decreased by 1% compared to the previous year. Sales were down in most of the markets following the macroeconomic headwind and low discretionary spending. Asian markets suffered from weak currencies which favored locally produced products over imported goods. This hit particularly the sales of Sufix fishing lines. Successful Okuma launch in Korea provided incremental growth in addition to strong boost from CrushCity especially in Australia. In Latin American markets sales landed close to prior year level, supported by good momentum and focus on Okuma.

External Net Sales by Area

	FY	FY	Change	Comparable
MEUR	2024	2023	%	change %
North America	111.9	110.6	1%	1%
Nordic	25.8	27.8	-7%	-7%
Rest of Europe	58.4	57.1	2%	3%
Rest of the World	24.8	26.1	-5%	-1%
Total	220.9	221.6	0%	1%

	H2	H2	Change	Comparable
MEUR	2024	2023	%	change %
North America	50.5	52.3	-3%	-3%
Nordic	12.3	14.4	-15%	-15%
Rest of Europe	24.9	24.3	2%	3%
Rest of the World	12.7	12.7	0%	5%
Total	100.4	103.7	-3%	-3%

Financial Results and Profitability

Comparable (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) operating profit increased by 0.6 MEUR from the comparison period. Reported operating profit increased by 4.6 MEUR from the previous year and the items affecting comparability had a positive impact of 2.4 MEUR (-1.6) on reported operating profit.
Comparable operating profit margin was 2.8% (2.5) for the year. Profitability was pressured by lower sales and lower sales margin. This decline was fully offset by savings in operating expenses. Sales margin decrease is a result of strong actions taken to clear out slow-moving items and improving inventory composition. The 6 MEUR savings program was concluded during the year. Among the measures was bringing decision making closer to the local markets and defining clear accountabilities. Following this, the size of the Global Management Team was reduced to eight members.
Reported operating profit margin was 3.9% (1.8) for the year. Reported operating profit included impact of mark-to-market valuation of operative currency derivatives of -0.7 MEUR (0.2). Net gain of other items affecting comparability included in the reported operating profit were 3.1 MEUR (-1.9). This amount includes gain from the sale and lease back transaction of the Canadian real estate. Majority of the expenses relate to the restructuring of the Global Management Team and other restructuring expenses arising from the 6 MEUR savings program.
Total financial (net) expenses were 8.1 MEUR (10.7) for the year. Net interest and other financing expenses were 8.8 MEUR (9.9) and (net) foreign exchange expenses were 0.7 MEUR (0.8).
Net profit for the year increased by 7.6 MEUR and was 0.4 MEUR (-7.3) and earnings per share was -0.07 EUR (-0.20).

Key figures

	H2	H2	Change	FY	FY	Change
MEUR	2024	2023	%	2024	2023	%
Net sales	100.4	103.7	-3%	220.9	221.6	0%
Operating profit / loss	-2.6	-0.4	-550%	8.6	4.0	115%
Comparable operating profit/loss *	0.0	0.3	-100%	6.2	5.6	11%
Net profit / loss	-4.2	-6.2		0.4	-7.3

Bridge calculation of comparable operating profit

	H2	H2	Change	FY	FY	Change
MEUR	2024	2023	%	2024	2023	%
Operating profit/loss	-2.6	-0.4	-550%	8.6	4.0	115%
Mark-to-market valuations of operative currency derivatives	0.5	-0.3	300%	0.7	-0.2	450%
Other items affecting comparability	1.9	0.9	133%	-3.1	1.9	-263%
Comparable operating profit/loss	0.0	0.3	-100%	6.2	5.6	11%

More detailed bridge of comparable operating profit and definitions and reconciliation of key figures are presented in the financial section of the release.

Financial Position

Cash flow from operations increased by 2.8 MEUR from the comparison period and was 23.4 MEUR (20.6). Second consecutive strong operating cash flow year is a result of strong focus on cash and working capital management. Inventory, non-interest-bearing assets and non-interest-bearing liabilities developed in the right direction and during the year and as a result,19.7 MEUR (9.9) was released from working capital.
End of the year inventory was 84.2 MEUR (87.5). The change in obsolescence allowance increased inventory value by 0.3 MEUR, and changes in translation exchange rates increased inventory value by 1.3 MEUR. Organic drop in inventory was 4.6 MEUR while at same time, inventory composition improved from prior year. To secure pre-season deliveries in yearly 2025, incoming shipments from vendors were received earlier than prior year. Also own manufacturing capacity was kept at a higher level at the end of the year. These two factors increased end of the year inventory value.
Net cash generated from investing activities was 5.0 MEUR (-9.5). Capital expenditure was 4.2 MEUR (9.5) and disposals 9.2 MEUR (1.4). Expenditure was kept to a lower level and consisted mainly of maintenance of manufacturing capacity and investments to new products. Prior year expenditure includes expenses related to the production transfers from Russia and from Finland to the Rapala VMC campus in Pärnu, Estonia. Disposals include the sale and lease back of the Canadian real estate.
Liquidity position of the Group was good. Undrawn committed long-term credit facilities amounted to 41.0 MEUR at the end of the year. Gearing ratio decreased and equity-to-assets ratio increased from last year following the strong operating cash flow and improved working capital.
The Group’s 106 MEUR senior secured term and revolving credit facilities agreement includes financial covenants based on the available liquidity (minimum 22.5 MEUR), 12m rolling EBITDA (minimum 10 MEUR), net debt to consolidated equity (maximum 100%), absolute net debt, and net debt to EBITDA (“leverage ratio”). The absolute net debt covenant for Q1/2024 was 90 MEUR, for Q2/2024 80 MEUR and for Q3/2024 80 MEUR. The financial leverage ratio covenant level for Q1/2024 was 5.50, for Q2/2024 4.25 and for Q3/2024 and onwards 3.80. Covenants are regularly tested, either quarterly or on the last day of each month. The risk of breaching the covenants would trigger negotiations between the Group and lending banks to resolve the potential covenant breach, and to agree on actions to rectify the situation. In the unlikely event of unresolved covenant breach, the lending banks would have the right to call all or any part of the loans and related interest.
On Q1/2024, Q2/2024, Q3/2024 and Q4/2024 testing dates, net debt landed at 81.0 MEUR, 59.5 MEUR, 55.8 MEUR and 61.8 MEUR, respectively. Leverage ratio for the respective testing dates landed at 5.30, 3.33, 3.25 and 3.72. Calculation of the covenants include customary adjustments mainly related to items affecting comparability and asset disposals, and therefore deviate from the reported figures elsewhere in this report. The Group is currently compliant with all financial covenants and expects to comply with future bank requirements as well. The Group’s liquidity position remains good, and cash and cash equivalents amounted to 21.7 MEUR on December 31, 2024.
During the reporting period, the Group agreed on two extensions with the lending banks for the 106 MEUR facilities. Both extensions were 6 months and as of the reporting date, the facilities mature in 2026, subject to an extension option of 12 months.
The Group equity includes a hybrid loan of 30.0 MEUR issued in November 2023. The accumulated non-recognized interest on hybrid bond on December 31, 2024 was 0.3 MEUR. The accrued interest of 3.8 MEUR, resulting from the decision of the Board of Directors, was paid out in November 2024 and was recognized as a deduction from Group’s equity.

Key figures

	H2	H2	Change	FY	FY	Change
MEUR	2024	2023	%	2024	2023	%
Cash flow from operations	5.2	2.0	160%	23.4	20.6	14%
Net interest-bearing debt at end of period	61.8	80.9	-24%	61.8	80.9	-24%
Gearing %	39.8%	51.8%		39.8%	51.8%
Equity-to-assets ratio at end of period, %	53.0%	52.1%		53.0%	52.1%

Definitions and reconciliation of key figures are presented in the financial section of the release.

Strategy Implementation

The strategic vision of the Group is to become a focused brand and innovation driven sport fishing market leader in selected categories globally in connection to creating outstanding experiences to global fishermen. The revitalized “Together. One More Turn” – strategy for 2024-2026 was originally implemented in Autumn 2023. The plan was reviewed in Autumn 2024 and rolled forward to cover years 2025-2027.
Focus remains in strengthening the balance sheet and in continuous increase of sales of owned brands, led by the flagship Rapala brand. Transformation into a brand powerhouse continues through building and enhancing a brand and market focused organization. A brand powerhouse with best-in-class order to delivery platform will ensure our position as a preferred partner for our retail and eCom partners. Manufacturing and sourcing excellence will continue to underpin our operations and strengthen our partnerships with key suppliers. Sustainability remains a significant cornerstone in everything we do.
To achieve this vision, the key pillars for our 2025-2027 strategy period were redefined:
RAPALA VMC EXCELLENCE BUSINESS MODEL – We commit to standardize our global operations in a way that increases visibility and allows our global operations to run in a synchronized manner. Connecting all core management processes is a key in exploring and grasping on to opportunities in the market. Allowing entrepreneurial spirit while maintaining focus on brand value and strong business accountability. Target setting oriented organization with routine processes is the best way to emulate a community of 1375 team members to innovate, make, source, market in the best possible way.
GROWTH AND CASH FLOW – Maximizing the use of existing assets that make us unique: Brands, sales network and retailer partnerships, product development, manufacturing. Extend flagship Rapala brand in new categories and realize distribution synergies on newest brands in the portfolio (Okuma & 13 Fishing). Be stronger where we are strong.
SAFEGUARD MANUFACTURING COMPETITIVE ADVANTAGE – We continue streamlining and improving productivity in Pärnu manufacturing facility following location changes in past years. Ensuring global competitiveness through productivity improvements and continuous maximum utilization is our focus.
FOCUS ON SUPPLY CHAIN EXCELLENCE – More than a third of our revenue comes from manufacturing partners, highlighting a key strategic strength. These partners have a long-standing track record of providing a reliable outsourced manufacturing platform, enabling us to scale efficiently, enhance flexibility, and drive sustainable growth. Their expertise plays a crucial role in our success.
We continue to harmonize ERPs and expand procurement planning tool (Anaplan) vertically and horizontally. This enables faster working capital turn and on-time deliveries to maximize sales opportunities.
MAINTAIN GLOBAL SALES FOOTPRINT – Our extended sales network differentiates us from the competition. In the short-term, focus on operational efficiency and on bringing back the entrepreneurial spirit.
PORTFOLIO MANAGEMENT – Continue proactive consolidation of brands to harmonize brand portfolio. Focus on flagship Rapala brand and evaluate business performance based on brand sales.

Product Development

The year 2024 saw a globally successful product launch with Rapala CrushCity that put Rapala straight into the category of Global Soft Bait Giants. Product Development was working hard to bring to market new models and sizes of CrushCity baits in order to support the momentum and pave the way for future market share growth in soft baits. As evidence of the strong interest in the product line, The CrushCity Imposter soft lure won the "Best in Show" award in the Soft Lure category at the Australian Fishing Trade Association (AFTA) Awards in 2024.
Additionally, Rapala strengthened the position as global market leader of hardbaits by introducing new highly technical and premium lures such as Precision Xtreme Mavrik and Rapala’s thus far biggest, heaviest and most expensive lure, Sarda. This saltwater hero lure was well received by the saltwater heavy-duty angling community.
Technology is becoming increasingly accessible to the global angling community. Rapala stays on top of trends and introduced a lure specifically developed for forward facing sonar (a.k.a live sonar) fishing: Jigging Rap Magnum. This lure shows exceptionally well in the sonar beam and allows the angler to see the lure in real time on their screen.
The nonstop quest to stay on top of the trends also continued with accessories, when Rapala introduced to trade the new highly sharp and ergonomic FXF fillet knives. This product launch was especially important to North America, but will strengthen Rapala’s market share in fillet knives also in Europe.
Last, but not least, Rapala stuck to the annual rhythm of introducing new pinnacles of wooden lure manufacturing: Floater Elite in Japan and Skitter Pop Elite. These two lures raise the bar on all artificial lures, but especially display Rapala’s heritage and know-how in wooden lure manufacturing in a way that was very well received by trade and the anglers alike. These launches pave the way for future Elite lure launches.

Reporting of Non-financial information

Information on the Group’s sustainability efforts in 2024 will be published later as a part of the Annual Review 2024.

Organization and Personnel

The average number of personnel was 1 351 (1 436) for the full year and 1 355 (1 389) for the last six months. At the end of December, the number of personnel was 1 375 (1 374).
On December 17, 2024, the Board of Directors appointed Cyrille Viellard as the new President and Chief Executive Officer of Rapala VMC Corporation, effective March 7th, 2025. Current President and Chief Executive officer Lars Ollberg will continue in his position until March 6, 2025, and will then retire after serving the company for over 45 years in various roles.
During the year, the Group prioritized its employees by conducting a unified global survey to understand their needs and concerns. Based on the results, targeted improvements were implemented, and learning opportunities were expanded. This commitment to growth and engagement ensures a supportive and dynamic workplace for all team members.

Short-term Outlook and Risks

The year 2024 has been a year of stabilization for us. We believe that our renewed strategy will provide added value to our customers and other stakeholders. We will continue to invest in growth and efficiency to strengthen our position as one of the leading companies in the fishing tackle market.
US consumer demand has remained robust despite rising uncertainties in the global trade environment. The ongoing tariff situation continues to create challenges, but management is actively monitoring developments and taking necessary actions to mitigate potential impacts. European markets are indicating stable consumer spending despite recent economic and political developments. Our improved operational efficiency is expected to yield improved results in open water fishing categories. Favorable ice fishing conditions in North America are expected to result in improved order book for season 2025/2026. In Nordics, ice and snow conditions have been suboptimal, and the market is expected to remain tough in season 2025/2026.
Our guidance reflects current market conditions but remains subject to potential trade-related disruptions, including tariffs and regulatory changes, which may impact demand and cost structures.
Consequently, the Group expects 2025 full year comparable operating profit (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) to increase from 2024. Short-term risks and uncertainties and seasonality of the business are described in more detail at the end of this report.

Proposal for profit distribution

The Board of Directors proposes to the Annual General Meeting that no dividend will be paid for 2024.

Financial Statements and Annual General Meeting

Financial Statements for 2024 and Corporate Governance Statement will be published in week 15 commencing on April 10, 2025. Annual General Meeting is planned to be held on May 8, 2025.

Helsinki, March 5, 2025
Board of Directors of Rapala VMC Corporation

For further information, please contact:
Lars Ollberg, President and Chief Executive Officer, +358 9 7562 540
Miikka Tarna, Chief Financial Officer, +358 9 7562 540
Tuomo Leino, Investor Relations, +358 9 7562 540

An audiocast and conference call on the second half year result on March 6, 2025 at 11:00 EET.

Please join the audiocast by registering using the following link: https://player.videosync.fi/rapala/2024-results. Alternatively please join the teleconference by registering using the following link: https://player.videosync.fi/rapala/2024-results/dial-in. After the registration you will be provided with phone numbers, a conference ID and user ID to access the conference call. To ask a question, please dial #5 on your telephone keypad to enter the queue.

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