Rapala VMC : H1 Half year financial report published

JULY 22, 2016

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HALF YEAR FINAr«:IAL REPORT

July 22, 2016

at 1:00 p.m.

Market environment

Trading conditions during the first half of the year turned out ta be mare challenging than expected and second quarter sales did not reach last year 's levels. Winter season was short in all main markets and summer sales started early but did not continue as good as was expected due ta various reasons. The Group's second quarter and first half sales were dawn in big markets such as North America and France. In Europe the competition has also tightened and the overall market sentiment was somewhat reserved. In Russia conditions continue to be challenging and the c hange in market demand seems ta be permanent. Several markets witnessed changes and uncertainties, causing retailers to be careful with their purchasing.

Business Review January-June 2016

The Group's net sales for the first half were daw n 7%. Changes in translation exchange rates decreased sales by approximately 3.3 MEUR far the half year. Correspondingly with comparable translation exchange rates net sales were down 5% from last year for the half year.

North America

North American sales reduced from last year 's strong levels. Short ice f ishing season affected sales negatively in the beginning of the year. Summer fishing products sales started relatively early and strong,supported by new product introductions. However while consumer demand for Group's products was good, US retails scene witnessed some unexpected turmoil during first half of the year impacting the Group, as well as the competition. Retailers' destocking and changes in purchasing behavior caused slowdow n in Group's first half year sales espec ially an Group branded lures. Weak economic situation continued in Canada.

Nordic

In the Nordic countries the first half of the year's sales decreased from last year despite the improved sales in the second quarter. Valuation of currency nominated accounts receivable had a notable positive impact an last year 's sales. Excluding these valuations, this first half year and quarterly sales were slightly above last year 's level. In Finland summer sales season started earlier but ended up slightly below last year level for the first half at the year. Sales of hunting products were good in Finland. In Sweden sales were slightly dawn from last year, largely relating to delays in incoming shipments on third party products. In Norway the second quarter sales improved considerably from last year due to better weather conditions, bringing the first six month's sales above last year's level.

Rest ofEurope

In comparable exchange rates the sales were below last year 's level in the first half of the year, fallowing slowdown in sales in second quarter. The instability and uncertainties in Russia and Ukraine continued ta impact sales volumes in the respective countries and also in Belarus and Kazakhstan. The weakeningof the Ruble had a notable negative impact an the sales. The second quarter salesin France suffered from unfavorable summer fishingweather s, reserved market sentiment and tightened price competition. Hungary and Romania showed conservative growth. Expansion into hunting product distribution increased sales in Spain and Baltic countries.

R A PA LA V M C C O R P.

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