Rapala posted weak results for the first half of the year, with sales plummeting in several big markets. Revenues for the world's largest manufacturer of fishing lures were down by 7.0 percent from the year-ago period to €143.1 million. At comparable exchange rates, sales were down by 5.0 percent.
The company faced challenging trading conditions, with consumer sentiment depressed across big markets in North America and Europe. However, Rapala said these conditions also affected competitors, and as a result, has not registered any loss in market share in its core categories.
In the Nordic countries, the company's revenues were down by 3.0 percent to €33.3 million. In Finland, sales of hunting products were strong, but the turnover ended slightly below last year's level. In Sweden, sales were also slightly down, mainly because of delays in incoming shipments of third-party products. In Norway, revenues improved considerably from last year due to better weather conditions.
In the rest of Europe, revenues fell by 7.0 percent to €48 million, with the instability and uncertainties in Russia and Ukraine continuing to impact sales volumes. The weakening of the ruble had a notable negative impact on sales. In addition, second-quarter sales in France suffered from unfavorable summer fishing weather, reserved market sentiment and tightened price competition.
In North America, sales decreased by 10.0 percent to €46.4 million, largely due to the short ice fishing season at the beginning of the year. In the rest of the world, sales dipped by 9.0 percent to €15.3 million, with changes in currency exchange rates having a negative impact. At comparable exchange rates, sales were only slightly down on the first six months of 2015. South Africa and Chile recorded the strongest growth, while Malaysia, Japan and Brazil struggled amid economic uncertainties.
Revenues generated from the company's own products were down globally by 8.0 percent to €95 million, negatively impacted by lower sales of fishing lures, hooks and lines, especially in North America. The company recorded strong sales of fishing accessories. Sales of third-party products edged down by 5.0 percent to €48.1 million, due to the challenging economic situation in Russia and unfavorable weather conditions in France.
The operating margin dipped by 3.7 percentage points to 9.9 percent, while the group's net profit remained stable at €8.2 million.
Rapala revised down its full-year outlook, and now expects sales and comparable operating profit to be below 2015 levels. The company announced a change in its top management, effective on Sept. 1, 2016, with the current chief executive, Jorma Kasslin appointed executive chairman of the board and deputy chief executive Jussi Ristimäki appointed CEO.
