Rapala VMC : PRELIMINARY INFORMATION CONCERNING 2016 FULL YEAR SALES, PROFITABILITY AND CASH FLOW

The Group's full year net sales and comparable operating profit (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) has been previously guided to be below 2015 levels.

The Group's 2016 full year net sales will be about 260 MEUR (278.2 MEUR), some 6% lower than in 2015, impacted by lower turnover in several big markets.

Group's comparable operating profit (excluding mark-to-market valuations of operative currency derivatives and other items affecting comparability) will be about 18-20 MEUR (25.3 MEUR), burdened by the lower sales.

After the changes in the Group's management during Q3/2016, the Group has initiated a strategy update process during the fourth quarter. According to the decisions made in conjunction with this strategy update, the Group redefines inventory valuation to support new strategic actions to improve the Group's capital efficiency (e.g. renewal and optimization of product range, improved product lifecycle and inventory management) and to support implementation of new management procedures. Accordingly, the Group will book ca. 9 MEUR provisions on its inventory values, which will have impact on the Group's 2016 reported operating profit and net result, netted with taxes. The provisions are recognized as items affecting comparability and will not impact cash flow.

The Group's 2016 cash flow from operations will improve clearly from last year and it will be about 24-27 MEUR (15.6 MEUR).

The figures presented above are unaudited.

More details of the strategy update will be released together with the 2016 annual accounts release on February 16, 2017.