Slide 1: Q3 Interim Report 2008
Q3 Interim Report 2008 October 22, 2008 Slide 1
Slide 2: Content
Content • Q3 in Brief • Business Organisation • Status of Performance Improvement Initiatives • Sales Analysis • Profitability Analysis • Cash flow & Working Capital • Strategy Implementation • Outlook for 2008 • Financial Trend History for Rapala • Rapala Share Performance and Major Shareholders Sl
Slide 3: Q3 in Brief
Q3 in Brief EUR million III/2008 III/2007 I-III/2008 I-III/2007 2007 Sales 52.7 52.0 192.1 188.8 242.5 EBITDA 5.2 4.6 32.7 29.5 33.8 Operating Profit (EBIT) 3.6 2.9 28.1 25.9 28.3 Profit Before Taxes 2.6 1.4 24.6 22.2 23.3 Net Profit for the Period 2.0 1.1 18.2 15.5 17.5 EPS (basic), EUR 0.03 0.03 0
Slide 4: Group Organization & Cornerstones of Strategy
Group Organization & Cornerstones of Strategy USA FINLAND ESTONIA CANADA SWEDEN RUSSIA (50/50) Distribution POLAND ITALY REST OF EUROPE JAPAN DENMARK MALAYSIA LITHUANIA UKRAINE (50/50) GERMANY BRAZIL NORWAY REST OF WORLD AUSTRALIA LATVIA HUNGARY (57/33/10) NETHERLAND FRANCE S BELGIUM CHINA SPAIN BRA
Slide 5: Restructuring of European Operations
Restructuring of European Operations Consolidation of French operations Marttiini - Move from Bretagne completed in Q4 2007 - Move from Central France completed in Q3 2008 Knife manufacturing - Move of VMC Europe during summer 2009 80 employees in - Both real estates sold (gain of 1.4 MEUR) Ro
Slide 6: Enhancement of Chinese Manufacturing
Enhancement of Chinese Manufacturing Major operational changes and improvements to enhance production efficiencies & shorten lead times and physical split of fishing tackle & gifts International task force established to support the development initiatives. Since June number of personnel reduc
Slide 7: Competition & Major Players in the Industry
Competition & Major Players in the Industry - No major changes in the competitive environment in Q3 Company Worldwide Major product categories Comments sales MUSD Jarden 450** Rods, reels, combos, line, soft US sales ca. 50% of sales Pure Fishing + plastics Shakespeare Shimano 430* Rods, reels, acce
Slide 8: Net Sales Analysis
Net Sales Analysis • Consumer demand under pressure as economic climate continued to weaken in some European countries, Asia and especially in the USA • Strong East Europe boosted the sales in Rest of Europe to growth. • Nordic sales up with a good fishing & hunting season. • Rest of the world suffe
Slide 9: Operating Profit Analysis (1)
Operating Profit Analysis (1) Q3 operating profit up to 3.6 MEUR (2.9). Q1-Q3 operating profit up to 28.1 MEUR (25.9). Q1-Q3 operating margin up to 14.6% (13.7%) and ROCE to 20.1% (19.1%). Q3 seasonally the weakest quarter. Performance improvement initiatives started to capitalize. Q1-Q3
Slide 10: Operating Profit Analysis (2)
Operating Profit Analysis (2) Management Analysis I-III/2008 I-III/2007 I-III/2008 I-III/2007 Net sales as reported 192.1 188.8 Operating profit as reported 28.1 25.9 Foreign exchange effects 9.4 - Non-recurring items (net) -0.7 -0.8 Comparable net sales 201.5 188.8 Foreign exchange effects 1.0 - Co
Slide 11: Cash Flow and Working Capital
Cash Flow and Working Capital EUR million III/2008 III/2007 I-III/2008 I-III/2007 I-IV/2007 Net profit for the period 2.0 1.1 18.2 15.5 17.5 Adjustments 1.5 3.6 10.2 14.1 14.8 Financial items and taxes paid/rec -3.0 -3.7 -9.3 -8.0 -11.1 Change in working capital 13.5 11.2 -15.2 -3.2 -3.1 Net cash fr
Slide 12: Strategy Implementation - Growth
Strategy Implementation - Growth In Q3, Rapala continued to develop its product portfolio and market coverage to implement its strategy for profitable growth. Discussions and negotiations regarding acquisitions and business combinations continued. Integration of Sufix fishing line business to
Slide 13: Strategy Implementation – Sufix Acquisition
Strategy Implementation – Sufix Acquisition In July, Rapala acquired from Yao I the Sufix fishing line brand and concluded an exclusive supply agreement including also OEM business. Sufix brand is a well know brand around the world for more than 20 years. Yao I, established in 1973, is a famil
Slide 14: Strategy Implementation - Profitability
Strategy Implementation - Profitability Emphasis on performance improvement initiatives continued in Q3 with a target to further improve the Group’s profitability in 2008. Consolidation of the French operation proceeded on plan. Sales of the real estates are completed with a non-recurring gain o
Slide 15: Outlook for 2008
Outlook for 2008 – Market outlook for 2008 continues to look challenging. – Slowdown in the US economy is expected to affect the sales in North America in the coming months too. – Europe moving towards a more active period towards the end of Q4. Manufacturing and shipments of 2009 products in full s
Slide 16: Turnaround in Margin Development Achieved
Turnaround in Margin Development Achieved • Rapid growth in last few years from €100m to above € 240m. • Promised turnaround in operating margin delivered in 2007. • Positive development in operating margin expected for 2008 vs. 2007 250 18 % 140 800 % 225 16 % 120 700 % 200 14 % 600 % 175 100 12 %
Slide 17: Share Price Performance & Shareholders
Share Price Performance & Shareholders Share Related Data (9/2008) Share price for the last 12 months Market Cap 145 MEUR 12-month high 6.06 EUR 12-month low 3.66 EUR All-time high 8.40 (2/99) All-time low 2.50 (11/01) Major Shareholders VMC 27 % Share price performance 9/2003-9/2008 (5
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