Rapala VMC, the world's largest manufacturer of fishing lures, has posted stable results for 2015 despite the strong U.S. dollar, an economic slowdown in Russia and the loss of a distribution business in the U.S.
Fourth-quarter net sales were down by 6 percent in constant currencies over the same period in 2014, which amounted to a 3 percent decline in euros to €59.7 million. However, the annual turnover reached €278.2 million in 2015, up 2 percent compared with 2014. At comparable exchange rates, sales were at last year's level.
The company's chief executive, Jorma Kasslin, welcomed these figures, noting that the company's top line grew by 2 percent in 2015, supported by currencies, even though Rapala lost a contract to distribute a third-party line of ice-fishing equipment through its Normark subsidiary in the U.S. The contract was bringing in revenues of $5 million a year.
He added that the company's comparable operating profit improved considerably from last year, up 21 percent, supported by improvement in the performance of the company's new Batam lure factory, which was one of the key focus areas of the management in 2015.
Fourth-quarter and full-year profits were both supported by stronger sales of group-branded products in the U.S. as well as the continuing recovery of the Asian manufacturing operations' profitability. However, they were hit by negative sales developments in Russia and the strong U.S. dollar.
In North America, quarterly revenues were up by 4 percent in constant currencies, but they were off by 7 percent when taking into account currency fluctuations. Annual sales in the region were up by 15 percent in 2015 in constant currencies but were down by one per cent in euros.
In the Nordic countries, sales were up by 8 percent in constant currencies in Q4 and by 2 percent for the year. However, in the rest of Europe, sales were down by 20 percent in constant currencies for the quarter and by 12 percent for the year due to challenging economic conditions, especially in Russia. In the rest of the world, Q4 sales were down by 3 percent but gained 7 percent for the year in constant currencies.
The company explained that changes in the valuation of operative currency derivatives, intended to better reflect their current market value, were having a notable negative impact on the group's earnings. Net profit was above last year for the quarter but was down for the year to €8.1 million from €10.2 million the year before.
Looking ahead, Rapala said that inventory management and the acceleration of the group's profitable growth strategy will be key focus areas in 2016 for the new management organization that was put in place during the third quarter of 2015. The group expects that its revenues will be above 2015 levels this year in terms of local currencies.
