FINANCIAL STATEMENTS 2022
| 3
CONTENTS
CONTENTS ................................................................... 3
REPORT OF
THE BOARD OF DIRECTORS .......................................... 4
KEY FINANCIAL FIGURES ............................................. 8
CONSOLIDATED FINANCIAL
STATEMENTS, IFRS .................................................... 10
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS .......................................... 14
PARENT COMPANY FINANCIAL
STATEMENTS, FAS ..................................................... 44
NOTES TO PARENT COMPANY
FINANCIAL STATEMENTS .......................................... 47
RISK MANAGEMENT ................................................... 53
SHARES AND SHAREHOLDERS ................................... 55
BOARD AND MANAGEMENT ....................................... 57
SIGNATURES FOR THE REPORT
OF BOARD OF DIRECTORS AND
FINANCIAL STATEMENTS .......................................... 59
THE AUDITOR’S NOTE ................................................ 59
AUDITOR’S REPORT ................................................... 60
4 | RAPALA VMC FINANCIAL STATEMENT 2022
MARKET ENVIRONMENT
In 2022, trading conditions deteriorated from the comparison period due
to the war in Ukraine, cold and late spring in the Northern hemisphere and
due to the sharp post-covid market normalization. Consumer spending
shifted from outdoor activities to the services sector, which impacted
demand at retail level. This together with overstocking, due to long lead
times in the beginning of the year, resulted in widespread destocking
both at the distributor and retailer level. Additionally, high inflation and
high gas prices impacted consumer discretionary spending in the Group’s
key markets.
KEY FIGURES
EUR million 2022 2021 2020
Net sales 274.4 294.3 261.3
Operating profit before depreciation
and impairments (EBITDA) 23.6 42.0 26.2
Operating profit 12.3 32.1 10.7
as a percentage of net sales, % 4.5 10.9 4.1
Comparable operating profit 15.3 32.7 21.5
as a percentage of net sales, % 5.6 11.1 8.2
Profit before taxes 8.8 28.0 6.6
Net profit/(loss) for the period 3.7 19.8 3.4
Earnings per share 0.10 0.45 0.04
Employee benefit expenses 71.5 71.6 69.4
Average number of personnel, persons 1 704 1 792 2 105
Research and development expenses 1.3 1.2 1.1
as a percentage of net sales, % 0.5 0.4 0.4
Net cash generated from operating activities -12.9 24.4 42.5
Total net cash used in investing activities 10.7 22.7 3.8
Net interest-bearing debt at the end of the period 107.1 70.6 45.2
Equity-to-assets ratio at the end of the period, % 41.2 44.2 52.5
Debt-to-equity ratio (gearing)
at the end of the period, % 77.0 50.7 31.6
Return on equity, % 2.7 14.0 2.3
BUSINESS REVIEW
The Group’s net sales for the year were 7% below the exceptional compari-
son period with reported translation exchange rates. Changes in transla-
tion exchange rates had a strong positive impact on the sales and with
comparable translation exchange rates, net sales were organically down
by 13% from the comparison period.
The implementation of the ONE RAPALA VMC strategy progressed
throughout the year. Despite the sharp market normalization, Group
Product sales landed above the pre-covid 2019 level. Strong start of the
Okuma rods and reels business supported the sales in the tough market
environment.
Ice fishing and winter sports season 21/22 was not yet impacted by the
deteriorating macroeconomic condition and sell-through was good. Retail
stocks remained at a healthy level in these categories, which converted
into a strong order book for ice season 22/23.
REPORT OF
THE BOARD OF DIRECTORS
North America
Sales in North America decreased by 2% from the comparison period
with reported translation exchange rates and decreased by 12% with
comparable translation exchange rates. Third Party sales included a
significant portion of 13 Fishing products sold to DQC International (13
Fishing USA), which are classified as Third Party products as the Group
holds a 49% share in the associated company. Excluding this, sales were
down 4% with reported translation exchange rates, and down 14% with
comparable translation exchange rates.
The decrease in sales was caused by the cold and delayed spring and
sharp post-covid market normalization. Retailer destocking amplified
the negative impact on sales. Furthermore, high inflation and high gas
prices affected purchasing decisions both at retail level and amongst
consumers. Destocking trend did not impact the ice fishing category as
the inventory pipeline was healthy after good sell-through in the previ
-
ous season. This category is predominantly based on pre-sales and the
Group’s strong market share in the ice fishing segment converted to a
record-high deliveries towards the end of the year.
Nordic
Sales in the Nordic market decreased by 15% from the comparison period.
With comparable translation exchange rates sales were down by 14%.
Strategic focus on Group Products and the successful launch of Okuma
rods and reels business helped to maintain sales of continuing business
above last year’s level despite the delayed spring. Retailer destocking and
consumer cautiousness began to hurt the sales during the latter part of
the year. The third consecutive good winter season and strong pre-orders
kept winter business sales on a high level. Sales of Third Party products
decreased in line with the Group strategy.
EXTERNAL NET SALES BY AREA
EUR million 2022 2021 Change %
Comparable
change %
North America 132.2 134.8 -2% -12%
Nordic 38.9 45.5 -15% -14%
Rest of Europe 70.6 80.6 -12% -15%
Rest of the World 32.7 33.4 -2% -5%
Total 274.4 294.3 -7% -13%
North America 48%
Nordic 14%
Rest of Europe 26%
Rest of the World 12%
REPORT OF THE BOARD OF DIRECTORS | 5
Rest of Europe
Sales in the Rest of Europe market decreased by 12% from the compari-
son period. With comparable translation exchange rates sales were down
by 15% from the previous year.
The war in Ukraine, delayed spring, and termination of certain Third
Party distributions had a negative impact on sales on both halves of the
year. Load-in orders in the beginning of the summer fishing season were
lower than expected, and further retailer destocking on the second half
of the year impacted the sales. Group Product sales were still above the
comparison period thanks to the successful launch of the Okuma rods
and reels business.
Rest of the World
With reported translation exchange rates, sales in the Rest of the World market
decreased by 2% from the comparison period. With comparable translation
exchange rates, sales decreased by 5% compared to the previous year.
Sales of Group Products remained solid throughout the year but started
to slow down towards the end of the year and landed close to last year’s
level. Decrease in sales follows the exit of certain Third Party distribu
-
tion agreements.
FINANCIAL RESULTS AND PROFITABILITY
Comparable (excluding mark-to-market valuations of operative currency
derivatives and other items affecting comparability) operating profit de
-
creased by 17.4 MEUR from the comparison period. Reported operating
profit decreased by 19.8 MEUR from the previous year and the items
affecting comparability had a negative impact of 3.0 MEUR (0.6) on re
-
ported operating profit.
Comparable operating profit margin was 5.6% (11.1) for the year. The
decreased profitability compared to the previous year was driven by lower
sales in the sharply normalizing open water fishing market. High infla
-
tion and freight costs put pressure on margin but the impact was mostly
offset by timely price increases in all markets. Operating expenses were
scrutinized throughout the year to offset the impact of decreasing sales
on profitability.
Reported operating profit margin was 4.5% (10.9) for the year. Reported
operating profit included impact of mark-to-market valuation of operative
currency derivatives of 0.2 MEUR (-0.2). Net expenses of other items af
-
fecting comparability included in the reported operating profit were -3.2
MEUR (-0.4). These included restructuring related write-downs and impair
-
ment of the Russian production set-up, as well as expenses related to
streamlining of the management structure worldwide.
Total financial (net) expenses were 3.5 MEUR (4.1) for the year. Net
interest and other financing expenses were 3.6 MEUR (2.3) and (net) for
-
eign exchange expenses were 0.0 MEUR (1.8).
Net profit for the year decreased by 16.1 MEUR and was 3.7 MEUR
(19.8) and earnings per share was 0.10 EUR (0.45). In 2021 the share of
non-controlling interest in net profit was 1.5 MEUR.
BRIDGE CALCULATION OF
COMPARABLE OPERATING PROFIT
EUR million 2022 2021 Change %
Operating profit 12.3 32.1 -62%
Items affecting comparability
Mark-to-market valuations of
operative currency derivatives -0.2 0.2
Other items affecting comparability
Russia restructuring 0.6
Organizational restructurings 2.3
Other restructurings 0.2 0.4
Comparable operating profit 15.3 32.7 -53%
SEGMENT REVIEW
Group Products
With comparable translation exchange rates, Group Products sales de-
creased by 15.2 MEUR from the comparison period. Sales decrease was
a result of the impact caused by the war in Ukraine, cold and late spring
in the Northern hemisphere as well as the sharp post-covid market nor
-
malization. In the second half of the year, sales were further burdened
by retailer destocking, high inflation, and consumer cautiousness. The
drop in sales was seen in most open water fishing product categories.
Strong order books in both the ice and ski businesses materialized in
high deliveries in the second half of the year, which kept sales of these
categories on a high level. Successful launch of Okuma rods and reels
business had a positive impact on sales.
Third Party Products
With comparable translation exchange rates, Third Party Products sales
were 24.1 MEUR below the comparison period. As expected, the termina
-
tion of certain Third Party distribution agreements had negative impacts
on sales, particularly on the Nordic, Rest of Europe and Rest of the World
markets.
NET SALES BY OPERATING SEGMENT
EUR million 2022 2021 Change %
Comparable
change %
Group Products 228.4 227.7 +0% -6%
Third Party Products 46.0 66.6 -31% -34%
Total 274.4 294.3 -7% -13%
Group Products 83%
Third Party Products 17%
COMPARABLE OPERATING PROFIT BY OPERATING
SEGMENT
EUR million 2022 2021 Change %
Group Products 15.0 29.5 -49%
Third Party Products 0.3 3.2 -91%
Total comparable operating profit 15.3 32.7 -53%
Items affecting comparability -3.0 -0.6 410%
Total operating profit 12.3 32.1 -62%
6 | RAPALA VMC FINANCIAL STATEMENT 2022
FINANCIAL POSITION
Cash flow from operations was -12.9 MEUR (24.4) driven by the decreased
profitability and negative impact from the net change in working capital.
Compared to the previous year, the net change of working capital de
-
creased by 25.8 MEUR and was -28.7 MEUR (-2.9) in total.
End of the year inventory in 2022 was 99.9 MEUR (86.2). The change
in obsolescence allowance decreased inventory value by 1.3 MEUR, and
changes in translation exchange rates decreased inventory value by 1.9
MEUR. Inventory landed on a higher level due to the supply chain disrup
-
tion in the first half of the year, and due to sharp market reset and wide
destocking at the retail level. Strong inventory clearance activities were
successfully executed in the second half of the year, which brought the
inventory down by 17.8 MEUR from June to December.
Net cash used in investing activities decreased from the comparison
period amounting to 10.7 MEUR (22.7). Capital expenditure was 11.5
MEUR (14.0) and disposals 0.8 MEUR (1.6). Elevated capital expenditure
includes costs related to the production transfers from Russia and from
capital expenditure includes the acquisition of Okuma brand and distribu
-
tion in Europe and net cash used in investing activities the acquisition of
East European distribution non-controlling interest shares.
Liquidity position of the Group was good. Undrawn committed long-
term credit facilities amounted to 20.8 MEUR at the end of the year. Gear
-
ing ratio increased and equity-to-assets ratio decreased from last year.
The Group has agreed with its lenders to temporarily change financial
covenants used in its loan agreements for the periods from Q3/2022 to
Q1/2023. The new financial covenants include limits on the amount of
available liquidity, net debt to EBITDA and gearing ratio. The Group is
currently compliant with all financial covenants and expects to comply
with future bank requirements as well. The Group’s cash position re
-
mains good, and cash and cash equivalents amounted to 29.0 MEUR at
December 31, 2022.
KEY FIGURES
EUR million 2022 2021 Change %
Net cash generated from operating activities -12.9 24.4 -153%
Net interest-bearing debt
at the end of the period 107.1 70.6 52%
Debt-to-equity ratio (gearing)
at the end of the period, % 77.0 50.7
Equity-to-assets ratio
at the end of the period, % 41.2 44.2
STRATEGY IMPLEMENTATION
The strategic target of the Group is to become a united Group Brand
and innovation driven sport fishing powerhouse. Current strategic ac
-
tions aim to utilize the full potential of the Group in the future. The core
of the Group’s strategy is based on six key building blocks that are all
interconnected and shared around the Group in all business units. Future
strategies are built upon utilizing and capitalizing the brand portfolio,
manufacturing and sourcing platform, research and development knowl
-
edge, as well as the broad sales network and strong local presence around
the world. The overall strategy execution progressed well during 2022
as several elements of the ONE RAPALA VMC strategy are synergistic
between each other.
TEAM & CULTURE - The first strategic building block is associated with
the foundation that all business units and functions strive for together
-
ness as a one strong winning entity. This enables the entire Group culture
to become more united, collaborative, dynamic and growth oriented. New
managerial changes were carried out during the year to underline that
the Group continuously positions team and culture to the forefront of its
strategy. With fewer management layers and agile leadership structure,
the Group is well positioned in the normalized market conditions to con
-
tinue strong strategy implementation.
SUSTAINABILITY - We fight together to ensure that future generations
get to enjoy fishing and the great outdoors. The aim is to become the lead
-
ing company in the fishing tackle industry behind concrete sustainability
actions from everyone in our team to ensure that we make a real and
long-lasting difference. The Group’s sustainability initiatives have steadily
progressed across all key product categories. As an example, the first-
ever plastic-free packaging for Rapala hard bait was introduced in 2022.
CONSUMER - Focus on end-users is a critical part of the strategy. The
aim is to lead the market and bring newest trends to the fishing industry
by offering innovative and exciting products. The Group continues to put
emphasis on improving its e-commerce to provide the best possible cus
-
tomer experience for the continuously growing digitally aware consumer
base. During the second half of the year, the new e-commerce platform
was successfully launched in Canada with USA planned to be launched in
Q1/2023. The new e-commerce platform underlines the Group’s ambition
to become more directly connected with consumers. During the second
half of 2022 the Group also continued to harmonize its product portfolio,
SKU’s and brands with the main target to have long-term focus on Group
branded products and categories.
CUSTOMER - Relationships with key customers and winning position
in local markets are emphasized with deep customer and market know-
how as well as continuously investing in all sales channels. The Group
has invested in premium customer service and having even stronger,
fixed foothold on ground in key markets. During the second half of the
year the Group continued to deliver strong result with the first full year
Okuma sales in Europe.
PD & INNOVATION - R&D and PD&I functions are becoming even stron
-
ger competitive advantages for the entire Group at the same time as
fishermen around the world demand new innovations to catch more fish.
In order to address consumer and customer needs on a global scale, the
Group has continued to restructure its PD&I department and made new
hires. The new PD&I team is ready to collaborate across other depart
-
ments and functions to ensure extensive regional product relevance and
long-term product planning.
OPERATIONS & FINANCE - The Group continues to invest in its opera
-
tions to make a step-change in operational excellence, to improve working
capital efficiency and profitability. Building an integrated business plan
-
ning model with global S&OP process is developing and will strengthen
capital efficiency and improve availability of key items. During the second
half of the year the Group completed its Northern European logistics con
-
solidation to the distribution centre in Estonia with all planned markets
being implemented by November 2022. Furthermore, lure production
capacity was transferred to Estonia as the Group was driving down its
Russian production facility. The Group also continued the downscale its
Russian distribution operations and successfully closed local operations
in Belarus during the second half of the year.
PRODUCT DEVELOPMENT
A continued emphasis has been placed on strengthening our Category
Management structure. This focus continues into 2023 with the hiring of
a new Category Director for Fishing lures global, a new Director of Product
Development for North America and new Category Director for 13 Fishing
International. These dynamic additions to the team bring a tremendous
amount of retail, sales and product development expertise to the Group.
From a new products perspective there have been several launches.
Rapala has introduced a number of exciting new products but one of
the standouts by far is the Rap-V Bladed Jig, which combines elements
from multiple types of lures. Other notable lure introductions include
additions in the premium level “PXR” Family, as well as launches in the
new X-Light Series, OTT’s Garage Tiny and two new Elite series lures.
New to the Rapala Accessory range were Rapala tackle box, which has
driven a lot of excitement among anglers, and a line of premium polarized
sunglasses. In rod and reel category there were several Rapala, Okuma
and 13 Fishing introductions. In line category, the new Sufix 91 Braid
maximizes on the popular G-Core construction, providing both super slip
-
REPORT OF THE BOARD OF DIRECTORS | 7
pery coating and low elasticity, and allowing for superior casting distance
with a strong sink ratio.
We continue to maintain a strong focus on sustainability with a strong
emphasis on producing “lead-free” Rapala Wobblers. The important and
exciting transition will take place through the calendar year 2023 as new
production rolls out the lead-free wobblers one-by-one.
SUSTAINABILITY
The Group’s year in sustainability was successful as we advanced our
sustainability work significantly on many fronts. More ecological packag-
ing is at the core of our sustainability work, and we were able to make
cons
iderable progress on the topic by multiple brands. In the beginning
of the year, Rapala introduced the first plastic-free packaging for a hard
bait by launching Flash-X Dart and Flash-X Skitter lures. On the other
hand, Dynamite Baits has successfully transferred to recyclable pack
-
aging for its products. In addition, VMC has introduced more ecological
packagi
ng that utilize recycled plastic and more cardboard instead of
plastic. Our products are also a vital part of our sustainability work. In the
beginning of November, together with WWF Finland, Marttiini launched a
knife that utilizes plastic sidestreams obtained from lure production and
a completely bio-based biocomposite material procured from an external
manufacturer. In the beginning of the year, the carbon footprint analysis
conducted for different types of lures supports our product development
in designing more ecological lures in the future.
The implementation of our updated Supplier Code of Conduct has
proceeded according to the original plan. This is important part of our
target to extend our sustainability actions also to our supply chain. Mart
-
tiini knife production and Rapala lure manufacturing aim to reduce their
carbon
footprint during the upcoming years, and to achieve this target
we made a significant investment by purchasing solar panels to Vääksy
unit. Our Distribution Center in Pärnu also has solar panels. Dynamite
Baits factory invested in solar panels in the beginning of the year to cover
about 50 % of their electricity consumption. However, the unit decided to
make an additional investment on the second half of the year so that the
energy produced by the panels would fully cover their electricity use. On
top of these actions, Dynamite Baits shifted to fully renewable electricity
during the summer.
It is important for us to extend our sustainability work also outside the
company. Our co-operation with Keep the Archipelago Tidy Association
and Finnish Freshwater Foundation supports our target to provide clean
fishing waters also for future generations. Rapala VMC Poland arranged
‘I’m eco with Rapala’ campaign with an aim to clean the Polish water
-
ways. About 2 800 people attended the campaign, and the volunteers
were
able to pick up approximately 200 tons of garbage. We continued
our co-operation with Finnish Federation for Recreational Fishing (FFRF)
and the Finnish 4H Federation to support young anglers. Similar actions
have also been done in, for example, Canada and USA. Like previous
year, we arranged a lure recycling campaign where we collected excess
lures from consumers. If needed, the lures were repaired by FFRF’s local
fishing organizations, after which they were donated to young anglers.
Rapala VMC is also preparing for the upcoming EU reporting require
-
ments by starting the implementation of Tofuture system for environmen-
tal and social responsibility data collection. In addition, we have taken the
new
requirements into consideration by conducting a double materiality
ESG analysis together with our key stakeholders and by doing internal
analysis on sustainability-related business risks in our industry.
The taxonomy and other NFI information is reported in separate sus
-
tainability report.
ORGANIZATION AND PERSONNEL
Average number of personnel was 1 704 (1 792) for the full year and 1
636 (1 765) for the last six months. At the end of December, the number
of personnel was 1 543 (1 757), decrease coming mainly from Russia.
Louis d’Alançon was appointed as President and Chief Executive Of
-
ficer on November 16, 2022.
3000
2500
2000
1500
1000
500
0
PERSONNEL AT THE END OF THE PERIOD, persons
1 757
2 651
2 304
1 971
1 543
18 19 20 21 22
GOVERNANCE AND SHARE INFORMATION
The Board updated and approved the Corporate Governance Statement
that is available on corporate website.
For information on shares, shareholders, share-based payment pro
-
grams and Board’s authorizations, see the section Shares and Sharehold-
ers. Related party transactions and top management remuneration are
disclosed
in the note 28 and in separate remuneration report available
in the company website.
SHORT-TERM OUTLOOK AND RISKS
Market outlook for 2023 continues to be challenging in the Group’s key
markets. Retail inventories in the overall fishing segment continue to be
high and due to poor winter weathers, sales of winter business will be af
-
fected both in the Nordics and North America. The global macroeconomic
situ
ation also affects purchase behavior at retail and consumer level.
Consequently, the Group expects 2023 full year comparable operating
profit (excluding mark-to-market valuations of operative currency deriva
-
tives and other items affecting comparability) to decrease from 2022.
Cash flow from operations
is expected to be on a good level.
Short term risks and uncertainties and seasonality of the business are
described in more detail in the end of this report.
PROPOSAL FOR PROFIT DISTRIBUTION
The Board of Directors proposes to the Annual General Meeting that a
dividend of 0.04 EUR for 2022 (0.15 EUR) per share is distributed from the
Group’s distributable equity and remaining distributable funds are carried
forward to retained earnings. At December 31, 2022 the distributable
equity in Group’s parent company totaled 55.9 MEUR.
There have been no material changes in the parent company’s financial
position since 31 December 2022, the liquidity of the parent company
remains good and the proposed dividend does not risk the solvency of
the company.
EVENTS AFTER THE BALANCE SHEET DATE
Events after the balance sheet date are disclosed in the note 31 of the
consolidated financial statements.
8 | RAPALA VMC FINANCIAL STATEMENT 2022
KEY FINANCIAL FIGURES
2022 2021 2020 2019 2018
Scope of activity and profitability
Net sales EUR million 274.4 294.3 261.3 275.4 262.4
Operating profit before depreciation and impairments EUR million 23.6 42.0 26.2 26.0 22.4
as a percentage of net sales % 8.6 14.3 10.0 9.4 8.5
Operating profit EUR million 12.3 32.1 10.7 13.4 14.8
as a percentage of net sales % 4.5 10.9 4.1 4.9 5.6
Profit before taxes EUR million 8.8 28.0 6.6 9.8 12.7
as a percentage of net sales % 3.2 9.5 2.5 3.6 4.8
Net profit for the period EUR million 3.7 19.8 3.4 4.1 6.5
as a percentage of net sales % 1.4 6.7 1.3 1.5 2.5
Attributable to
Equity holders of the Company EUR million 3.7 18.2 2.5 4.4 6.1
Non-controlling interest EUR million - 1.5 1.0 -0.4 0.4
Capital expenditure EUR million 11.5 14.0 5.0 5.6 6.4
as a percentage of net sales % 4.2 4.8 1.9 2.0 2.4
Research and development expenses EUR million 1.3 1.2 1.1 1.7 1.6
as a percentage of net sales % 0.5 0.4 0.4 0.6 0.6
Net interest-bearing debt at the end of the period EUR million 107.1 70.6 45.2 74.6 70.3
Capital employed at the end of the period EUR million 246.1 209.8 188.2 226.2 217.4
Return on capital employed (ROCE) % 5.4 16.1 5.2 6.0 6.9
Return on equity (ROE) % 2.7 14.0 2.3 2.7 4.5
Equity-to-assets ratio at the end of the period % 41.2 44.2 52.5 52.4 53.2
Debt-to-equity ratio (gearing) at the end of the period % 77.0 50.7 31.6 49.2 47.8
Average personnel for the period Persons 1 704 1 792 2 105 2 604 2 772
Personnel at the end of the period Persons 1 543 1 757 1 971 2 304 2 651
25
20
15
10
5
0
14.8
13.4
10.7
32 .1
12.3
OPERATING PROFIT (EUR million), as a percentage of net sales (%)
Operating profit Operating profit as a percentage of net sales
5.6
4,9
4.1
10.9
4.5
18 19 20 21 22
25
20
15
10
5
0
NET PROFIT FOR THE PERIOD, EUR million
6.5
4.1
19.8
3.4
18 19 20 21 22
3.7
300
250
200
150
100
50
0
NET SALES, EUR million
294.3
262.4
275.4
261.3
18 19 20 21 22
274.4
50
40
30
20
10
0
EQUITY-TO-ASSETS RATIO, %
53.2
44.2
52.4 52.5
41.2
18 19 20 21 22
KEY FINANCIAL FIGURES | 9
0.4
0.3
0.2
0.1
0
EARNINGS PER SHARE, EUR
0.45
0.13
0.10
0.04
0.10
18 19 20 21 22
0.25
0.20
0.15
0.10
0.05
0
DIVIDEND PER SHARE, EUR
*Board proposal
0.06
0.15
0.00 0.00
0.04*
18 19 20 21 22
100
80
60
40
20
0
DIVIDEND/EARNINGS RATIO, %
*Board proposal
45.8
33.5
0.000.00
18 19 20 21 22
41.8*
2022 2021 2020 2019 2018
Share related key figures
Earnings per share EUR 0.10 0.45 0.04 0.10 0.13
Fully diluted earnings per share EUR 0.10 0.44 0.04 0.10 0.13
Equity per share EUR 3.58 3.58 2.93 3.16 3.05
Dividend per share
1)
EUR 0.04 0.15 - - 0.06
Dividend/earnings ratio
1)
% 41.8 33.5 - - 45.8
Effective dividend yield
1)
% 0.80 1.72 - - 1.97
Price/earnings ratio 52.2 19.5 118.4 27.8 23.3
Share price at the end of the period EUR 5.00 8.72 4.36 2.77 3.05
Lowest share price EUR 4.08 4.36 2.15 2.56 2.89
Highest share price EUR 9.16 10.95 4.58 3.43 4.07
Average share price EUR 6.46 7.82 3.04 2.88 3.43
Number of shares traded Shares 2 792 052 5 217 447 6 044 245 4 804 467 1 511 411
Number of shares traded of average number of shares % 7.18 13.47 15.68 12.52 3.94
Share capital EUR million 3.6 3.6 3.6 3.6 3.6
Dividend for the period
1)
EUR million 1.6 5.8 - - 2.3
Year end market capitalization
2)
EUR million 194.4 339.6 168.1 106.8 116.9
Number of shares at the end of the period excluding own shares
2)
1 000 shares 38 876 38 950 38 548 38 548 38 323
Number of own shares at the end of period 1 000 shares 124 50 452 452 677
Weighted average number of shares
2)
1 000 shares 38 890 38 732 38 548 38 387 38 323
Fully diluted number of shares at the end of the period 1 000 shares 39 000 39 000 38 548 38 548 38 323
Fully diluted weighted average number of shares 1 000 shares 39 000 39 000 38 548 38 387 38 323
1)
Year 2022 board proposal.
2)
Excluding own shares.
80
60
40
20
0
47.8
49.2
50.7
31.6
18 19 20 21 22
DEBT-TO-EQUITY RATIO (gearing) at the end of the period, %
77.0
10 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS
CONSOLIDATED INCOME STATEMENT
EUR million Note 2022 2021
Net sales 2 274.4 294.3
Other operating income 4 0.4 1.6
Change in inventory of finished products and work in progress 13.1 14.7
Production for own use 0.2 0.1
Materials and services 6 -138.5 -148.8
Employee benefit expenses 7 -71.5 -71.6
Other operating expenses 5 -52.3 -48.4
Share of results in associates and joint ventures 13 -2.3 0.2
Operating profit before depreciation, amortization and impairments 23.6 42.0
Depreciation, amortization and impairments 11, 12, 27 -11.3 -9.9
Operating profit 12.3 32.1
Financial income and expenses 9 -3.5 -4.1
Profit before taxes 8.8 28.0
Income taxes 10 -5.1 -8.2
Net profit (loss) for the period 3.7 19.8
Attributable to
Equity holders of the parent company 3.7 18.2
Non-controlling interests 14 - 1.5
Earnings per share for profit attributable to the equity holders of the parent company
30
Earnings per share, EUR 0.10 0.45
Diluted earnings per share, EUR 0.10 0.44
Weighted average number of shares, 1 000 shares 38 890 38 732
Diluted weighted average number of shares, 1 000 shares 39 000 39 000
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million 2022 2021
Net profit (loss) for the period 3.7 19.8
Other comprehensive income, net of tax
1)
Items that will not be reclassified to income statement
Remeasurements of defined benefit liabilities 0.3 0.0
Total items that will not be reclassified to income statement 0.3 0.0
Items that may be reclassified subsequently to income statement:
Change in translation differences 2.4 7.9
Net investment hedges -0.6 0.5
Total items that may be reclassified subsequently to income statement 1.8 8.4
Other comprehensive income for the period, net of tax 2.1 8.4
Total comprehensive income for the period 5.8 28.2
Attributable to
Equity holders of the parent company 5.8 26.4
Non-controlling interests - 1.8
1)
The income tax relating to each component of other comprehensive income is disclosed in note 10.
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 11
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million Note 2022 2021
ASSETS
Non-current assets
Goodwill 11 50.2 48.9
Other intangible assets 11 34.5 31.9
Tangible assets 12 28.7 24.4
Right-of-use-assets 27 16.0 10.7
Investments in associates and joint ventures 13 1.2 3.6
Other shares 15 0.2 0.2
Interest-bearing receivables 16 11.8 7.6
Non-interest-bearing receivables 16 1.2 0.2
Deferred tax assets 10 10.5 10.5
Total non-current assets 154.3 138.0
Current assets
Inventories 17 99.9 86.2
Trade and other non-interest-bearing receivables 16 50.2 62.7
Income tax receivables 1.9 0.8
Interest-bearing receivables 16 2.8 -
Cash and cash equivalents 18 29.0 27.8
Total current assets 183.9 177.5
Total assets 338.1 315.5
SHAREHOLDERS’ EQUITY AND LIABILITIES
Equity
Share capital 3.6 3.6
Share premium fund 16.7 16.7
Fund for invested non-restricted equity 4.9 4.9
Own shares -3.0 -2.5
Translation differences -7.8 -9.6
Retained earnings 124.6 126.2
Equity attributable to equity holders of the parent company 19 139.0 139.3
Total equity 139.0 139.3
Non-current liabilities
Interest-bearing liabilities 24 41.5 51.8
Non-interest-bearing liabilities 25 0.0 0.0
Right-of-use liabilities 22, 24 11.8 7.4
Employee benefit obligations 20 1.7 2.4
Deferred tax liabilities 10 9.2 8.4
Provisions 21 0.1 0.1
Total non-current liabilities 64.3 70.1
Current liabilities
Interest-bearing liabilities 24 92.9 43.0
Trade and other non-interest-bearing payables 25 35.5 56.7
Right-of-use liabilities 22, 24 4.6 3.7
Income tax payables 1.5 2.3
Provisions 21 0.3 0.4
Total current liabilities 134.8 106.2
Total shareholders’ equity and liabilities 338.1 315.5
12 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million Note 2022 2021
Net profit for the period 3.7 19.8
Adjustments
Income taxes 10 5.1 8.2
Financial income and expenses 9 3.5 4.1
Reversal of non-cash items
Depreciation and impairments 11, 12, 27 11.3 9.9
Share based payments 7, 29 0.2 0.9
Exchange rate differences 9 -0.6 0.1
Share of results in associated companies and joint ventures 13 2.3 -0.2
Gains/losses on disposals of intangible, tangible assets and subsidiaries
Other items 1.1 -6.0
Total adjustments 22.9 16.3
Financial items
Interest paid -3.9 -2.4
Interest received 0.1 0.7
Income taxes paid -6.2 -6.8
Other financial items, net -0.9 -0.3
Total Financial items -10.8 -8.9
Change in working capital
Change in receivables 8.8 -6.9
Change in inventories -13.1 -12.9
Change in liabilities -24.4 16.8
Total change in working capital -28.7 -2.9
Net cash generated from operating activities -12.9 24.4
Net cash used in investing activities
Acquisition of intangible assets 11 -1.1 -6.7
Proceeds from sale of tangible assets 12 0.8 1.6
Acquisition of tangible assets 12 -10.4 -7.4
Transactions with non-controlling interests 3 - -10.3
Change in interest-bearing receivables 0.0 0.2
Total net cash used in investing activities -10.7 -22.7
Net cash generated from financing activities
Dividends paid to parent company shareholders -5.8 -
Purchase of own shares -0.5 -0.7
Directed issue of own shares - 3.1
Non-current loan withdrawals - 36.0
Current loan withdrawals 228.6 33.8
Non-current loan repayments 0.0 -27.2
Current loan repayments -190.6 -16.7
Payments of right-of-use liabilities -5.3 -5.8
Hybrid bond - -26.3
Total net cash generated from financing activities 26.3 -3.9
Change in cash and cash equivalents 2.7 -2.2
Cash and cash equivalents at the beginning of the period 27.8 27.9
Foreign exchange rate effect -1.4 2.0
Cash and cash equivalents at the end of the period 18 29.0 27.8
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 13
CHANGES IN LIABILITIES INCLUDED CASH FLOW FROM FINANCING ACTIVITIES
EUR million
Liabilities Jan 1, 2022 94.8
Drawdowns 228.6
Repayments -189.2
Other changes 0.3
Unrealized foreign exchange differences* -
Liabilities Dec 31, 2022 134.4
Drawdowns and repayments of loans in statement of cash flows
Drawdowns and repayments of loans 39.3
Derivatives and other realized foreign exchange on financial activities -1.4
Drawdowns and repayments of loans, net 38.0
* Unrealized foreign exchange differences from loans are not included in cash flow statement
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Company
EUR million
Share
capital
Share
premium
fund
Hedging
fund
Fund for
invested non-
restricted
equity
Own
shares
Translation
differences
Retained
earnings
Non-
controlling
interest
Hybrid
bond
Total
equity
Equity on Jan 1, 2021 3.6 16.7 0.0 4.9 -4.9 -18.9 111.4 5.2 25.0 143.0
Net profit for the period 18.2 1.5 19.8
Other comprehensive income *
Translation differences 7.6 0.3 7.9
Defined benefit plans 0 0.0
Net investment hedges 0.5 0.5
Total comprehensive income 8.1 18.2 1.8 28.2
Directed issue of own shares -0.7 -0.7
Dividends paid 3.1 3.1
Transactions with non-controlling
interests
-3.3 -7.1 -10.3
Repayment of hybrid bond -25.0 -25.0
Hybrid bond expenses -1.1 -1.1
Dissolvement of subsidiary 1.2 1.2
Share-based payments 0.9 0.9
Other changes 0.0 0.0 0.0
Equity on Dec 31, 2021 3.6 16.7 0.0 4.9 -2.5 -9.6 126.2 0.0 139.3
Net profit for the period 3.7 3.7
Other comprehensive income*
Translation differences 2.4 0.0 2.4
Defined benefit plans 0.3 0.3
Net investment hedges -0.6 -0.6
Total comprehensive income 1.8 4.0 5.8
Purchase of own shares -0.5 -0.5
Dividends paid -5.8 -5.8
Share-based payments 0.2 0.2
Equity on Dec 31, 2022 3.6 16.7 0.0 4.9 -3.0 -7.8 124.6 139.0
* Net of tax
14 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 15
16 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 17
18 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 19
20 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 21
22 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 23
24 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 25
26 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 27
28 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 29
30 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 31
32 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 33
34 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 35
36 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 37
38 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 39
40 | RAPALA VMC FINANCIAL STATEMENT 2022
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 41
42 | RAPALA VMC FINANCIAL STATEMENT 2022
DEFINITIONS OF KEY FIGURES | 43
44 | RAPALA VMC FINANCIAL STATEMENT 2022
PARENT COMPANY FINANCIAL STATEMENTS, FAS
PARENT COMPANY INCOME STATEMENT
EUR Note 2022 2021
Net sales 2 44 983 810 44 401 996
Other operating income 3 3 029 498 6 276 690
Change in inventory of finished products and work in progress
299 230 1 003 892
Production for own use 217 524 56 097
Materials and services 5 -24 493 548 -23 772 001
Employee benefit expenses 6 -10 239 703 -13 208 998
Other operating expenses 4 -10 926 588 -11 233 489
Operating profit before depreciation and impairments 2 870 222 3 524 188
Depreciation and impairments 7 -1 528 262 -1 463 096
Operating profit 1 341 960 2 061 093
Financial income and expenses 8 7 235 902 15 263 331
Profit before appropriations and taxes 8 577 862 17 324 423
Appropriations 9 877 870 2 425 826
Income taxes 10 -162 775 -6 813
Net profit for the period 9 292 957 19 743 436
PARENT COMPANY FINANCIAL STATEMENTS, FAS | 45
PARENT COMPANY BALANCE SHEET
ASSETS
EUR Note 2022 2021
Non-current assets
Intangible assets 11 7 136 561 6 130 654
Tangible assets 12 6 220 030 4 848 403
Investments 13 121 163 657 121 247 503
Interest-bearing receivables 15 19 628 316 16 737 675
Non-interest-bearing receivables 15 1 436 022 439 108
Total non-current assets 155 584 586 149 403 343
Current assets
Inventories 14 6 849 081 6 165 084
Current financial assets
Interest-bearing 15 86 619 823 71 196 481
Non-interest-bearing 15 14 615 841 12 089 701
Cash and cash equivalents 12 443 811 2 399 173
Total current assets 120 528 555 91 850 438
Total assets 276 113 142 241 253 781
SHAREHOLDERS’ EQUITY AND LIABILITIES
EUR Note 2022 2021
Shareholders' equity
Share capital 3 552 160 3 552 160
Share premium fund 16 680 961 16 680 961
Fund for invested non-restricted equity 4 914 371 4 914 371
Own shares -2 957 222 -2 471 138
Retained earnings 43 957 119 30 045 145
Net income for the period 9 292 957 19 743 436
Total shareholders’ equity 16 75 440 346 72 464 935
Appropriations 124 788 152 658
Provisions 1 071 973 1 071 973
Non-current liabilities
Interest-bearing 41 000 000 51 000 000
Non-interest-bearing - 6 416
Total non-current liabilities 17 41 000 000 51 006 416
Current liabilities
Interest-bearing 146 328 352 94 403 793
Non-interest-bearing 12 147 682 22 154 005
Total current liabilities 17 158 476 034 116 557 798
Total shareholders’ equity and liabilities 276 113 142 241 253 781
46 | RAPALA VMC FINANCIAL STATEMENT 2022
PARENT COMPANY STATEMENT OF CASH FLOWS
EUR thousand Note 2022 2021
Net profit for the period
9 293 19 743
Adjustments
Income taxes
10 163 7
Financial income and expenses
8 -7 236 -15 263
Reversal of non-cash items
Depreciation and impairments
7 1 528 1 463
Dissolvement of subsidiary
- -5 997
Other items
-2 386 -1 954
Total adjustments
-7 931 -21 744
Financial items
Interest paid
-3 682 -1 946
Interest received
2 131 1 207
Income taxes paid/received
-18 -107
Other financial items, net
-339 -277
Total financial items
-1 908 -1 123
Change in working capital
Change in receivables
675 -2 347
Change in inventories
-543 -1 368
Change in liabilities
-6 720 8 796
Total change in working capital
-6 588 5 081
Net cash generated from operating activities
-7 134 1 957
Net cash used in investing activities
Purchases of intangible assets
11 -181 -6 356
Proceeds from sale of tangible assets
12 617 409
Purchases of tangible assets
12 -2 865 -1 468
Transactions with non-controlling interests
13 - -520
Change in interest-bearing receivables
-19 308 -15 079
Dividends received
8 2 848 17 863
Total net cash used in investing activities
-18 889 -5 151
Net cash generated from financing activities
Dividends paid
-5 831 -
Purchase of own shares
-486 -700
Directed issue of own shares
- 3 119
Hybrid bond
- -26 314
Loan withdrawals
220 465 68 737
Loan repayments
-177 326 -43 080
Group contributions received
940 -
Total net cash generated from financing activities
37 762 1 762
Change in cash and cash equivalents
11 740 -1 432
Cash and cash equivalents at the beginning of the period
2 399 2 246
Foreign exchange rate effect
-1 695 1 585
Cash and cash equivalents at the end of the period
12 444 2 399
PARENT COMPANY FINANCIAL STATEMENTS, FAS | 47
NOTES TO PARENT COMPANY
FINANCIAL STATEMENTS
ACCOUNTING
PRINCIPLES
The financial statements of Rapala VMC Oyj have been prepared accord-
ing to Finnish Accounting Standards (FAS).
Foreign currency transactions
Monetary assets and liabilities denominated in foreign currencies are
translated into euros using the exchange rates at the balance sheet date
and exchange differences arising from translation are recognized in the
income statement.
Revenue recognition
Sales of goods and services are recognized on accrual basis when the
significant risks related to goods and services sold have passed to the
buyer and it is not probable that the client would return the goods. Net
sales comprise of gross sales less cash discounts and sales taxes.
Research and development costs
Research and development costs are expensed as they are incurred,
unless they clearly relate to developing new business areas. Such de
-
velopment costs are capitalized if they are separately identifiable and if
the products are assessed to be technically feasible and commercially
viable and the related future revenues are expected to exceed the ac
-
crued and future development costs and related production, selling and
administrative expenses, and other possible costs related to the project.
Capitalized development expenses are amortized on a straight-line
basis over their expected useful lives, a maximum of five years.
Inventories
Inventories are valued at the lower of cost or net realizable value using
the first-in, first-out (FIFO) method. The cost of finished goods and work
in progress comprises of raw materials, direct labor costs including social
costs and other direct costs. Inventories are shown net of a reserve for
obsolete or slow-moving inventories.
Tangible and intangible assets
Tangible and intangible assets are stated at historical cost excluding
accumulated depreciation according to plan. Planned depreciation is
based on historical cost and expected useful life.
Land is not depreciated. Depreciation is based on the following expected
useful lives:
Intangible assets 3–15 years
Buildings 10– 20 years
Machinery and equipment 5–10 years
Other tangible assets 3–10 years
Pension arrangements
All of the company’s pension arrangements are defined contribution
plans, with the majority being local statutory arrangements. Pension
costs are expensed as incurred.
Valuation of financial derivatives
All derivatives are initially recognized at fair value on the date derivative
contract is entered into, and are subsequently remeasured at fair value
on each balance sheet date. Fair value of standard foreign currency for
-
wards are determined by discounting the future nominal cash flows with
relevant interest rates and then converting the discounted cash flows
to the foreign currency using spot rates. Determination of fair values of
other derivative instruments are based on quoted market prices and rates,
discounting of cash flows and option valuation models. The fair values
of these instruments are received from the respective bank or calculated
to match the currenct market price.
In cash flow hedges, changes in the fair value of derivative financial
instruments that are designated and effective as hedges of future cash
flows are recognized directly in equity and the ineffective portion is rec
-
ognized immediately in the income statement as well as the change in
fair value of the contracts that are not designated to hedge accounting.
5.2A is followed in accordance to IFRS standards.
Own shares
Own shares acquired by the company, including directly attributable costs,
are presented as a deduction from the total equity on the day of trad
-
ing. Purchases or subsequent sales of treasury shares are presented as
changes in equity.
Cash flow statement
Changes in financial position are presented as cash flows from operating,
investing and financing activities.
1
48 | RAPALA VMC FINANCIAL STATEMENT 2022
NET SALES
EUR thousand 2022 2021
By destination
North America 28 068 26 254
Nordic 1 989 1 305
Rest of Europe 9 021 10 008
Rest of the World 5 906 6 835
Total 44 984 44 402
The parent company’s net sales consist of Lure Business which is includ-
ed in Group Products in the consolidated operating segment reporting.
OTHER OPERATING
INCOME
EUR thousand 2022 2021
Rental income 25 26
Subsidiary dissolution result - 5 997
Gains from sale of intangible and tangible assets 7 144
Access fees 2 771 -
Other income 227 110
Total 3 029 6 277
OTHER OPERATING
EXPENSES
EUR thousand 2022 2021
Maintenance -1 600 -1 258
Selling and marketing expenses -1 247 -1 212
Traveling expenses -532 -159
IT and telecommunication -1 262 -814
Rents paid -715 -563
Auditors fees and services -211 -141
Freight -128 -118
Sales commissions -89 -110
Currency derivatives -465 -741
Other expenses -4 678 -6 117
Total -10 927 -11 233
AUDITORS’ FEES AND SERVICES
EUR thousand 2022 2021
Audit fees -211 -141
Total -211 -141
MATERIALS AND
SERVICES
EUR thousand 2022 2021
Materials, goods and supplies
Purchases during the financial year -24 839 -23 990
Change in inventory 385 283
External services -40 -65
Total -24 494 -23 772
EMPLOYEE
BENEFIT EXPENSES
EUR thousand 2022 2021
Wages and salaries -8 621 -11 200
Pension costs -1 296 -1 625
Other personnel expenses -323 -384
Total -10 240 -13 209
Average personnel for the period 149 141
The remuneration of the Board of Directors amounted to EUR 296 thou-
sand (2021: EUR 310 thousand).
DEPRECIATION AND
IMPAIRMENTS
EUR thousand 2022 2021
Depreciation of intangible assets
Trademarks -704 -551
Other intangible assets -28 -32
Depreciation of tangible assets
Buildings -84 -83
Machinery and equipment -628 -705
Other tangible assets -84 -55
Impairments - -37
Total -1 528 -1 463
2
3
4
5
6
7
PARENT COMPANY FINANCIAL STATEMENTS, FAS | 49
INCOME
TAXES
INCOME TAXES IN THE INCOME STATEMENT
EUR thousand 2022 2021
Income taxes -125 -19
Taxes from previous financial years -38 12
Total -163 -7
Deferred tax assets and liabilities of the parent company are not pre-
sented in the parent company’s balance sheet.
INTANGIBLE
ASSETS
2022
Trade-
marks
Other
intangible
assets TotalEUR thousand
Acquisition cost Jan 1 7 538 2 484 10 022
Additions 1 664 1 664
Reclassifications 74 74
Acquisition cost Dec 31 9 202 2 557 11 759
Accumulated amortization Jan 1 -1 479 -2 412 -3 891
Amortization during the period -701 -31 -732
Accumulated amortization Dec 31 -2 179 -2 443 -4 622
Book value Jan 1 6 059 72 6 131
Book value Dec 31 7 022 115 7 137
2021
Trade-
marks
Other
intangible
assets TotalEUR thousand
Acquisition cost Jan 1 930 2 448 3 378
Additions 6 608 23 6 631
Reclassifications 13 13
Acquisition cost Dec 31 7 538 2 484 10 022
Accumulated amortization Jan 1 -928 -2 380 -3 308
Amortization during the period -551 -32 -583
Accumulated amortization Dec 31 -1 479 -2 412 -3 891
Book value Jan 1 2 68 71
Book value Dec 31 6 059 72 6 131
FINANCIAL INCOME
AND EXPENSES
EUR thousand 2022 2021
Dividend income 3 057 17 863
Foreign exchange gains 3 371 3 563
Foreign exchange losses -3 214 -3 826
Impairment losses
Non-current loan receivables - -200
Interest and other financial income
Interest income 4 059 1 727
Other financial income 5 597 464
Interest and other financial expenses
Interest expenses -3 969 -2 957
Other financial expenses -1 665 -1 370
Total 7 236 15 263
FINANCIAL INCOME AND
EXPENSES FROM AND TO SUBSIDIARIES
EUR thousand 2022 2021
Dividend income from subsidiaries 3 057 17 863
Interest and other financial income
Interest income 3 687 1 401
Other financial income - 92
Interest and other financial expenses
Interest expenses -476 -169
Total 6 268 19 187
TRANSLATION DIFFERENCES RECOGNIZED IN THE
INCOME STATEMENT
EUR thousand 2022 2021
Translation differences recognized in net sales 1 272 1 072
Translation differences included in purchases and other
expenses 52 53
Foreign exchange gains and losses in financial income
and expenses 157 -263
Total 1 481 862
EXTRAORDINARY
ITEMS
EUR thousand 2022 2021
Change in depreciation difference 28 736
Group contribution 850 1 690
Total 878 2 426
CHANGE IN DEPRECIATION DIFFERENCE
EUR thousand 2022 2021
Intangible assets -142 -97
Buildings -219 83
Machinery and equipment 389 750
Total 28 736
8
9
10
11
50 | RAPALA VMC FINANCIAL STATEMENT 2022
TANGIBLE
ASSETS
2022
Land Buildings
Machinery and
equipment
Other tangible
assets
Advance pay-
ments and
construction in
progress TotalEUR thousand
Acquisition cost Jan 1 106 5 085 20 975 1 792 1 110 29 067
Additions 2 865 2 865
Disposals -55 -612 -667
Reclassifications 84 798 583 -1 540 -74
Acquisition cost Dec 31 106 5 169 21 718 2 375 1 824 31 192
Accumulated depreciation Jan 1 -4 351 -18 361 -1 507 -24 219
Disposals 43 43
Depreciation during the period -84 -628 -84 -796
Accumulated depreciation Dec 31 -4 435 -18 946 -1 591 -24 972
Book value Jan 1 106 734 2 614 284 1 110 4 848
Book value Dec 31 106 734 2 772 784 1 824 6 220
2021
Land Buildings
Machinery and
equipment
Other tangible
assets
Advance pay-
ments and
construction in
progress TotalEUR thousand
Acquisition cost Jan 1 106 4 967 20 550 1 698 489 27 810
Additions 16 77 27 1 348 1 468
Disposals -15 -24 -159 -198
Reclassifications 102 363 91 -569 -13
Acquisition cost Dec 31 106 5 085 20 975 1 792 1 110 29 067
Accumulated depreciation Jan 1 -4 268 -17 619 -1 452 -23 339
Depreciation during the period -83 -705 -55 -843
Impairments -37 -37
Accumulated depreciation Dec 31 -4 351 -18 361 -1 507 -24 219
Book value Jan 1 106 699 2 931 246 489 4 472
Book value Dec 31 106 734 2 614 284 1 110 4 848
INVESTMENTS
2022
EUR thousand
Shareholdings in
subsidiaries
Shares in
associates Other shares Total
Book value Jan 1 116 679 4 387 181 121 248
Disposals -84 - - -84
Book value Dec 31 116 595 4 387 181 121 164
2021
EUR thousand
Shareholdings in
subsidiaries
Shares in
associates Other shares Total
Book value Jan 1 146 769 4 387 181 151 337
Additions 520 - - 520
Disposals -30 609 - - -30 609
Book value Dec 31 116 679 4 387 181 121 248
12
13
PARENT COMPANY FINANCIAL STATEMENTS, FAS | 51
INVENTORIES
EUR thousand 2022 2021
Raw material 1 776 1 391
Work in progress 3 060 3 069
Finished products 2 013 1 705
Total 6 849 6 165
RECEIVABLES
EUR thousand 2022 2021
Non-current receivables
Interest-bearing
Loan receivables 19 628 16 738
Non-interest-bearing
Derivatives 1 064 36
Other receivables 372 404
Other receivables
Interest-bearing
Loan receivables 86 620 71 196
Non-interest-bearing
Trade receivables 5 691 5 798
Prepaid expenses and accrued income 4 194 2 915
Derivatives 144 135
Other receivables 4 587 3 242
Total 122 300 100 463
RECEIVABLES FROM SUBSIDIARIES
EUR thousand 2022 2021
Non-current receivables
Interest-bearing
Loan receivables 18 916 16 067
Interest-bearing
Loan receivables 86 620 71 196
Non-interest-bearing
Trade receivables 5 686 5 793
Prepaid expenses and accrued income 3 358 1 962
Other receivables 4 587 3 242
Total 119 167 98 260
SHAREHOLDERS’
EQUITY
EUR thousand 2022 2021
Share capital Jan 1 3 552 3 552
Share capital Dec 31 3 552 3 552
Share premium fund Jan 1 16 681 16 681
Share premium fund Dec 31 16 681 16 681
Fund for invested non-restricted equity Jan 1 4 914 4 914
Fund for invested non- restricted equity Dec 31 4 914 4 914
Own shares Jan 1 -2 471 -4 890
Purchase of own shares -486 -700
Directed issue of own shares - 3 119
Own shares Dec 31 -2 957 -2 471
Retained earnings Jan 1 49 789 30 045
Dividends paid -5 831 -
Retained earnings Dec 31 43 958 30 045
Net income for the period 9 293 19 743
Total shareholders’ equity 75 440 72 465
DISTRIBUTABLE FUNDS
EUR 2022 2021
Fund for invested non-restricted equity 4 914 371 4 914 371
Retained earnings 43 957 119 30 045 145
Own shares -2 957 222 -2 471 138
Net income for the period 9 292 957 19 743 436
Total distributable funds 55 207 225 52 231 814
PARENT COMPANY SHARE CAPITAL
2022 2021
Shares 39 000 000 39 000 000
EUR 3 510 000 3 510 000
Each share is entitled to one vote. Information on Board’s authorizations
and own shares is available in the section ‘Shares and shareholders’.
14
15
16
52 | RAPALA VMC FINANCIAL STATEMENT 2022
LIABILITIES
EUR thousand 2022 2021
Non-current liabilities
Interest-bearing
Loans from financial institutions 41 000 51 000
Non-interest-bearing
Derivatives - 6
Current liabilities
Interest-bearing
Loans from financial institutions - 1
Commercial paper program 43 500 32 000
Other current liabilities 102 828 62 403
Non-interest-bearing
Derivatives 87 258
Advances received 48 1
Trade payables 5 074 6 115
Accrued liabilities and deferred income 6 940 15 780
Total 199 477 167 564
LIABILITIES TO SUBSIDIARIES
EUR thousand 2022 2021
Current liabilities
Interest-bearing
Other current liabilities 53 828 62 403
Non-interest-bearing
Trade payables 4 136 5 140
Accrued liabilities and deferred income 2 109 4 045
Total 60 073 71 588
All loans included in non-current liabilities will mature in less than 5 years.
LEASE
CONTRACTS
PARENT COMPANY AS A LESSEE
Repayment schedule of non-cancellable operating lease commitments
EUR thousand 2022 2021
Within one year 937 577
1-3 years 1443 311
3-5 years 736 -
Total 3116 887
COMMITMENTS AND
CONTINGENCIES
COMMITMENTS
EUR thousand 2022 2021
On own behalf and on behalf of subsidiaries
Guarantees 2 107 8 924
Total 2 107 8 924
Guarantees consist of subsidiaries’ lease agreements and of other guar-
antees given on behalf of subsidiaries. The company’s loan facilities are
unsecured and include normal financial covenants.
DERIVATIVES
EUR thousand 2022 2021
Currency derivatives with bank
Fair value 57 -123
Nominal value 18 128 34 880
Interest rate derivatives
Fair value 1 064 29
Nominal value 35 000 25 000
In 2022, changes in fair value of currency derivatives had an income
statement effect of EUR 180 thousand (2021: EUR 55 thousand) and
interest rate derivatives EUR 1035 thousand (2021: EUR 145 thousand).
17 18
19
20
RISKIENHALLINTA | 53
RISK MANAGEMENT
The objective of Rapala VMC Corporation’s risk management is to support
the implementation of the Group’s strategy and execution of business
targets. This is done by monitoring and mitigating the related threats
and risks and simultaneously identifying and managing opportunities.
APPROACH TO RISK MANAGEMENT
The Board evaluates the Group’s financial, operational and strategic risk
position regularly and establishes related policies and instructions to
be implemented and coordinated by Group management. The daily risk
management activities are primarily delegated to the management of
business units.
Risk management continued to receive management attention in 2022.
The focus of Group level risk management in 2022 was on foreign ex
-
change risk management as well as risk management activities on liquid-
ity, interest rate and hazard risks. Other emphasized areas were account
receivables, Group wide insurance programs and strategic supply chain
management.
Below is a summary of key strategic, operational and financial risks
as well as the main actions to mitigate these risks.
STRATEGIC RISKS
Sport fishing is a form of leisure hobby and the Group’s products are com-
peting against a wide range of other hobbies. The Group is promoting the
attractiveness of sport fishing through active sales and marketing as well
as brand management. By utilizing its unique research and development
processes and resources, the Group is constantly developing new prod
-
ucts to meet consumer needs and creating new needs for the consumers.
Brand portfolio and corporate reputation are among the most valuable
intangible assets of the Group. The Rapala VMC Group is actively manag
-
ing its brands and their identity and securing that the value of the brands
or corporate reputation are not jeopardized or violated by any means. The
Group’s brands are also legally protected.
Consumers relate the Group’s brands to high quality, unique fishing
experience, special functional features and trustworthy distribution
channel. Consumers are able to differentiate illegal copy products and
they don’t constitute a strategic threat for the Group. The Group protects
vigorously its intellectual property rights and acts against illegal copiers
and distributors.
Sport fishing is dependent on availability of fresh fishing waters for
fishes to live and breed. Pollution and potential environmental catas
-
trophes are concerns for the Group. The Rapala VMC Group is actively
promoting initiatives to enhance environmental protection and increas
-
ing preparedness to comply with continuously tightening environmen-
tal regulations by taking steps to reduce environmental impacts of its
operations and products. The Group is also acting in the forefront to
develop products, e.g. catch-and-release equipment, to comply with fish
protection initiatives. For more details on environmental actions, see the
“Corporate Responsibility and Sustainable Development” report available
on corporate website (www.rapalavmc.com).
The Group faces competition in all markets where its products are sold.
Due to the uniquely wide distribution network, the Group’s geographi
-
cal market risk is truly globally spread, evening out seasonal and local
market fluctuations.
The Rapala VMC Group has a limited amount of global competitors.
The biggest competitors have significant power in their home markets,
but globally the geographical scope of their operations is smaller. The
Group’s global distribution network is unique in the industry. Within each
market, the Group’s competitors are often local fishing tackle producers
and distributors operating with a limited range of products and narrow
geographical scope. In some countries, competition is created by fishing
tackle retailers selling private label products. Established fishing tackle
brands’ expansion into new product categories is also creating compe
-
tition in some product segments. The strength of the Group’s product
development and brand portfolio, as well as flexibility to serve different
markets with market-specific products ranges, is essential in succeeding
in market competition.
The Group’s production is spread out in several countries. Some of
these countries have higher political risks but simultaneously provide
access to competitive labor cost. The Group monitors country risks and
costs and is actively seeking ways to manage the risk of rising produc
-
tion and distribution costs.
Manufacturing of sport fishing products is not dependent on any propri
-
etary manufacturing technologies or patents. The Group’s manufacturing
units are actively monitoring the development of generic manufacturing
technologies and considering different production applications.
Distribution of third party fishing and outdoor products creates a ma
-
terial part of the Group’s sales. Making new distribution agreements or
terminating old agreements or changes in product offering made by the
principal may affect sales and profitability of Third Party Products. The
Group has several factories and various raw material and finished good
suppliers. Different factories produce for the most part separate product
categories and the Group is not critically dependent on any single product
or raw material supplier.
The Group’s customer base is geographically and quantitatively well
diversified. Customers are mostly country-specific and not operating glob
-
ally. The Group is not critically dependent on any single customer: even
54 | RAPALA VMC FINANCIAL STATEMENT 2022
the biggest single customer represents moderate share of the Group’s
net sales. The Group is not largely engaged in direct consumer retail
-
ing. This is not considered to be a risk as consumer demand is largely
driven by brand consciousness and alternative routes to market can be
established when needed.
The Board evaluates the Group’s strategic risks annually and the Group
management continuously monitors changes in the business environ
-
ment. Strategic risk management in local jurisdictions is delegated to
the management of each business unit.
OPERATIONAL AND HAZARD RISKS
The fishing tackle business has traditionally been relatively resilient to
increased uncertainties and downturns in the general economic climate.
The truly global nature of the Group’s sales and operations spreads the
market risks caused by uncertainties in the global economy.
The underlying consumer demand for the Group’s products is seasonal
and also impacted by unforeseeable factors such as weather. To offset
and balance the seasonality, the Group is engaged in production and
distribution of winter fishing and winter sports equipment. To mitigate the
effects of seasonality, the Group is also operating with own distribution
in the southern hemisphere and is developing its production planning to
better respond to changes in the market demand.
Due to the seasonality in demand, the Group’s product shipments con
-
centrate annually to relatively short time periods, where supply problems
could endanger the sales of the season. Similarly, lower than expected
sales volumes may lead to excess inventories, as it is difficult to cancel
committed orders within short notice.
There is a high level of dependency between the Group’s manufacturing
and distribution units and interruption at earlier stage of the supply chain
could have knock-on effects throughout the rest of the Group. The impor
-
tance of proper order forecasting and production planning has increased.
The related risks are managed with high level of co-operation between
manufacturing and distribution units, safety stocks and extensive insur
-
ance coverage. The Group-wide supply chain and logistics initiatives
continued in 2022 and mitigated these risks relating to operational ef
-
ficiencies.
The Group’s sales prices are primarily fixed annually or bi-annually,
normally before each season. Sudden changes in raw material prices or
foreign exchange rates may have significant impact on costs of some
products. The Group aims to push increases in costs to the sales prices
immediately or during a period of time. The Group’s market risks and
mitigation actions are analyzed in more detail in the section “Financial
Risks” and in note 22 to the consolidated financial statements.
In respect of manufacturing activities, the Group is not critically de
-
pendent on any single external production factor supplier. Availability of
competent production labor is essential and the Group aims to maintain
good employer reputation and labor relations.
There are significant dependencies between the Group’s manufacturing
units, which could cause supply challenges e.g. in case of fire or other
hazard. Such hazard could lead to property damages but also to business
interruption losses throughout the supply chain. Therefore, the Group
emphasizes hazard risk management. The Group has together with its
property and business interruption insurer continued to conduct annu
-
ally hazard prevention reviews to Group’s key factories and distribution
warehouses. Group management has also continued to maintain risk
awareness throughout the organization.
The Group constantly develops its global insurance programs, which
cover most of the Group companies. Global insurance policies, which
take into account the Group’s interdependency, are in place for property
damage and business interruption, transportation as well as general and
product liability. The Group has increased its focus also on mitigating
fraud risk.
The Board evaluates the Group’s operational risks at least once a year.
Group management monitors and coordinates the continuous manage
-
ment of operational risks, which is the responsibility of the management
of each business unit.
FINANCIAL RISKS
The Group’s financial risks consist of market risks, credit and default
risks and liquidity risks. The Board evaluates financial risks during the
year and Group management monitors and manages them continuously.
Financial risks are discussed in detail, as required by IFRS 7, in note 22
of the consolidated financial statements.
OSAKKEET JA OSAKKEENOMISTAJAT | 55
SHARES AND SHAREHOLDERS
Rapala VMC Corporation’s shares have been traded on the Nasdaq Hel-
sinki since 1998. In 2022, the shares traded between EUR 9.16 and 4.08
with an average price of EUR 6.46.
SHARES AND VOTING RIGHTS
On December 31, 2022, the share capital fully paid and reported in the
Trade Register was EUR 3 552 160.41 and the total number of shares
was 39 000 000. The average number of shares during the financial year
was 39 000 000. Each share is entitled to one vote.
There were no changes in the share capital in 2022.
BOARD’S AUTHORIZATIONS
The AGM 23 March 2022 authorised the Board of Directors to resolve
to repurchase a maximum of 2 000 000 own shares by using funds in
the unrestricted equity. The proposed number of shares corresponds to
approximately 5.1 per cent of the company’s registered total number of
shares at the time of the proposal. The shares may be repurchased for
developing the company’s capital structure, for financing or carrying out
potential corporate acquisitions or other business arrangements, to be
used as a part of the company’s remuneration or incentive plan or to be
otherwise transferred further, retained by the company as treasury shares,
or cancelled, for example. The shares may be repurchased otherwise than
in proposition to the existing shareholdings of the company as directed
repurchases at the market price of the shares quoted on the trading
venues where the company’s shares are traded or at the price otherwise
established on the market at the time of the repurchase. The Board of
Directors shall resolve on all other matters related to the repurchase of the
company’s own shares, including on how the shares will be repurchased.
The authorization is in force for 18 months from the close of the Annual
General Meeting i.e. until 23 September 2023.
The AGM authorised the Board of Directors to resolve on one or several
share issues and the issues of special rights entitling to shares as defined
in Chapter 10, Section 1 of the Companies Act, against or without con
-
sideration, as follows. By virtue of the authorisation the Board is entitled
to issue up to 3 900 000 shares corresponding at present to 10 per cent
of all current shares. The authorization can also be used for incentive
arrangements for the management and key persons, however, not more
than 900 000 shares in total. The Board would resolve on all terms and
conditions of share issues and the issues of special rights. The authori
-
zation covers both the issuance of new shares and the transfer of own
shares. A share issue or the issue of special rights may be executed in
deviation of the shareholders pre-emptive rights to subscribe for new
shares. This authorization shall be effective until 23 September 2023.
OWN SHARES
In 2022, a total of 73 655 own shares were repurchased based on the
authorization granted by the Annual General Meeting. The average share
price of repurchased own shares in 2022 was EUR 6.60. At the end of the
year, the company held 123 891 own shares, representing 0.32% of the
total number and voting rights of shares. The cumulative average share
price of all repurchased own shares held by the company was EUR 7.41.
SHAREHOLDER REGISTER
The shares of the company belong to the Book Entry Securities System.
Shareholders should notify the particular register holding their Book Entry
Account about changes in address or account numbers for payment of
dividends and other matters related to ownership of shares.
SHARE-BASED INCENTIVE PLANS
On March 25, 2021, the Board of Directors of Rapala VMC Corporation
decided to establish two new share-based incentive plans. The aim of the
plans is to align the objectives of the shareholders and the plan partici
-
pants for increasing the value of the company in the long-term, to retain
the participants at the company and to offer them competitive incentive
schemes that are based on earning and accumulating shares.
Details of share-based incentive plans are given on note 29.
MANAGEMENT SHAREHOLDING
On December 31, 2022, the members of the Board and the Executive Com-
mittee held directly a total of 225 370 company shares, corresponding to
0.6% of all shares and voting rights. Details of management shareholdings
are given on page 57.
TRADING AND PERFORMANCE OF THE
COMPANY’S SHARES
The company share (RAP1V) is quoted on the Nasdaq Helsinki. The clos-
ing price on December 31, 2022 was EUR 5.00. The highest price in 2022
was EUR 9.16, the lowest price EUR 4.08 and the average price EUR 6.46. A
total of 2 792 052 company’s shares were traded in 2022. This represents
7.2% of all shares on December 31, 2022.
At the end of 2022, the market capitalization of all outstanding shares,
excluding own shares, was EUR 194.4 million. Earnings per share (basic)
were EUR 0.10 (EUR 0.45 in 2021). For more share related key figures
see page 9.
DIVIDEND
The Board proposes to the AGM that a dividend of EUR 0.04 per share
will be paid for the financial year 2022.
56 | RAPALA VMC FINANCIAL STATEMENT 2022
PRINCIPAL SHAREHOLDERS ON DECEMBER 31, 2022
Shareholders Number of shares %
Viellard Migeon & Cie * 15 281 456 39.2
Nordea Funds 5 130 588 13.2
The State Pension Fund 1 290 000 3.3
Shimano Singapore Private Limited 889 680 2.3
Ilmarinen Mutual Pension Insurance 292 007 0.7
eQ Nordic Small Cap 260 866 0.7
Coble James Jay 225 000 0.6
Aktia Capital Fund 220 000 0.6
Taaleri Funds 200 000 0.5
Elo Mutual Pension Insurance 155 000 0.4
Atavus Oy 145 523 0.4
Other shareholders total 14 909 880 38.2
Total number of shares 39 000 000 100.0
* Viellard Migeon & Cie’s holds together with its subsidiary De Pruines Industries 15 386
766 shares, representing 39.5% of total number and the total voting rights of shares.
SHAREHOLDERS BY CATEGORY ON DECEMBER 31, 2022
Shareholder category Number of shares %
Private and public corporations 1 001 357 2.6
Financial and insurance companies 5 640 265 14.5
Public institutions 1 737 307 4.5
Non-profit organizations 95 537 0.2
Individuals 2 870 161 7.4
International shareholders 16 431 920 42.1
Administrative registrations 11 223 453 28.8
Total 39 000 000 100.0
DISTRIBUTION OF SHAREHOLDING ON DECEMBER 31, 2022
Number of shares
Number of
shareholders % Total shares %
1 - 100 3 367 50.9 141 931 0.4
101 -500 2 150 32.5 551 116 1.4
501 - 1 000 572 8.6 451 866 1.2
1 001 - 10 000 458 6.9 1 236 026 3.2
10 001 - 1 000 000 65 1.0 4 635 195 11.9
1 000 001 - 4 0.1 31 983 866 82.0
Total 6 616 100 39 000 000 100
Number of shares includes 123 891 own shares held by the parent com-
pany.
SHARE PRICE IN 2022, %
SHARE PRICE DEVELOPMENT IN 2018-2022, EUR
Rapala VMC Corp
OMX Nordic Mid Cap
Rapala VMC Corp
120
110
100
90
80
70
60
50
40
12/21 03/22 06/22 09/22 12/22
11,0
10,0
9,0
8,0
7,0
6,0
5,0
4,0
3,0
2,0
12/17 12/18 12/19 12/20 12/21 12/22
BOARD AND MANAGEMENT | 57
BOARD AND MANAGEMENT
* Shares and share-based rights of each member and corporations over which he/she exercises control in the company and its group companies.
BOARD OF DIRECTORS
The current members of the Board and their shareholdings on 31.12.2022
are:
Louis d’Alançon
President and Chief Executive Officer since November 16, 2022
Chairman of the Board since 2018
Board member since 2017
M.Sc. Civil Engineering, Major in Economy and Finance
Year of birth 1959
Shareholding*: 9 000
Jorma Kasslin
Board member since 1998
Chairman of the Board 2016-2018
M.Sc. (Eng.)
Year of birth: 1953
Shareholding and options *: 26 878
Emmanuel Viellard
Board member since 2000
Chairman of the Board 2005-2016
President of Viellard Migeon & Cie
CEO of LISI
MBA, CPA
Year of birth: 1963
Shareholding and options *: 2 000
Marc Speeckaert
Board member since 2005
MBA
Year of birth: 1951
Shareholding and options *: 4 500
Julia Aubertin
Board member since 2014
M.Sc. (EDHEC)
Year of birth: 1979
Shareholding and options *: -
Vesa Luhtanen
Board member since 25.3.2020
Bachelor of Science in Business Administration
Year of birth: 1961
Shareholding and options *: -
58 | RAPALA VMC FINANCIAL STATEMENT 2022
EXECUTIVE COMMITTEE
The President and Chief Executive Officer Louis d’Alançon acts as the
Chairman of the Executive Committee.
The members of the Executive Committee and their shareholdings on
31.12.2022 are:
Louis d’Alançon
President and Chief Executive Officer since November 16, 2022
Chairman of the Board since 2018
Board member since 2017
M.Sc. Civil Engineering, Major in Economy and Finance
Year of birth 1959
Shareholding*: 9 000
Olli Aho**
Executive Vice President, General Counsel, Investor Relations and Sec-
retary of the Board
Executive Committee member since 1998
Master of Laws
Year of birth: 1959
Shareholding and options *: 26 625
Stanislas de Castelnau
Executive Vice President, Head of Operations
Executive Committee member since 2002
Engineer
Year of birth: 1963
Shareholding and options *: 21 771
Victor Skvortsov
Executive Vice President Distribution in Russia, Belarus, Kazakhstan
Executive Committee member since 2013
Engineer
Year of birth: 1962
Shareholding and options *: 38 853
Cyrille Viellard
Executive Vice President, and President of VMC Peche
Executive Committee member since 2015
MBA, ESSEC
Year of birth: 1977
Shareholding and options *: 26 625
* Shares and share-based rights of each member and corporations over which he/she exercises control in the company and its group companies.
** Olli Aho departed the Executive Committee on December 31, 2022. Lars Ollberg departed the Executive Committee on May 31, 2022.
Arto Nygren
Executive Vice President, Lure Manufacturing
Executive Committee member since 2017
Bachelor’s degree in mechanical engineering
Year of birth: 1965
Shareholding and options *: 36 540
Jan-Elof Cavander
Chief Financial Officer
Executive Committee member since 2017
Master of Science (Technology)
Year of birth: 1985
Shareholding*: 26 625
Jean-Philippe Nicolle
Executive Vice President, Head of European Distribution
Executive Committee member since 2020
Executive MBA, Business School ICS, Paris and CPA
Year of birth: 1968
Shareholding*: 3 279
David Neill
Executive Vice President, Product Development & Innovation
Executive Committee member since 2020
Bachelor of Commerce
Year of birth: 1973
Shareholding*: 1 101
Enrico Ravenni
Executive Vice President, Head of Distribution in APAC countries and
Global Rods, Reels and Lines Product Development & Innovation
Executive Committee member since 2020
Year of birth: 1966
Shareholding*: 1 573
Marcus Twidale
Executive Vice President, Head of Distribution in USA
Executive Committee member since 11.5.2021
Year of birth: 1965
Shareholding*: -
| 5 9
SIGNATURES FOR THE REPORT OF BOARD
OF DIRECTORS AND FINANCIAL STATEMENTS
THE AUDITOR’S NOTE
Helsinki, February 10, 2023
Jorma Kasslin
Louis d’Alançon,
Chairman of the Board and President and CEO
Marc Speeckaert
Julia AubertinVesa Luhtanen
Emmanuel Viellard
Mikko Järventausta
Authorized Public Accountant
A report on the audit performed has been issued today.
Helsinki, March 2, 2023
Ernst & Young Oy
Authorized Public Accountant Firm
60 | RAPALA VMC FINANCIAL STATEMENT 2022
AUDITOR’S REPORT
To the Annual General Meeting of Rapala VMC Corporation
REPORT ON THE AUDIT OF THE FINANCIAL
STATEMENTS
Opinion
We have audited the financial statements of Rapala VMC Corporation
(business identity code 1016238-8) for the year ended 31 December,
2022. The financial statements comprise the consolidated balance sheet,
income statement, statement of comprehensive income, statement of
changes in equity, statement of cash flows and notes, including a sum
-
mary of significant accounting policies, as well as the parent company’s
balance sheet, income statement, statement of cash flows and notes.
In our opinion
■ the consolidated financial statements give a true and fair view of
the group’s financial position as well as its financial performance
and its cash flows in accordance with International Financial Re
-
porting Standards (IFRS) as adopted by the EU.
■ the financial statements give a true and fair view of the parent com
-
pany’s financial performance and financial position in accordance
with the laws and regulations governing the preparation of financial
statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Board
of Directors.
BASIS FOR OPINION
We conducted our audit in accordance with good auditing practice in
Finland. Our responsibilities under good auditing practice are further
described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report.
We are independent of the parent company and of the group companies
in accordance with the ethical requirements that are applicable in Fin
-
land and are relevant to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that
we have provided to the parent company and group companies are in
compliance with laws and regulations applicable in Finland regarding
these services, and we have not provided any prohibited non-audit ser
-
vices referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit
services that we have provided have been disclosed in note 5 to the
consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the
current period. These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
We have fulfilled the responsibilities described in the Auditor’s respon
-
sibilities for the audit of the financial statements section of our report,
including in relation to these matters. Accordingly, our audit included
the performance of procedures designed to respond to our assessment
of the risks of material misstatement of the financial statements. The
results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the
accompanying financial statements.
We have also addressed the risk of management override of internal
controls. This includes consideration of whether there was evidence of
management bias that represented a risk of material misstatement due
to fraud.
Key Audit Matter How our audit addressed the Key Audit Matter
REVENUE RECOGNITION
We refer to accounting principles for the consolidated accounts and note 2
(Segment information).
Our audit procedures to address the risk of material misstatement relating
to revenue recognition, included, among others:
■ Assessing the Group’s accounting policies over revenue recognition
against applicable accounting standards.
■ Familiarizing ourselves with the Group’s different revenue streams
and sales processes, partly by applying data-analytical methods.
■ Testing the cut-off of revenue with analytical procedures supple
-
mented with tests on a transaction level either side of the balance
sheet date.
■ Evaluation of the appropriateness of the Group’s disclosures in
respect of revenues.
The Group focuses on revenue as a key performance measure which
could create the incentive for revenue to be recognized before the cus
-
tomer obtains control of the goods or services in an amount that reflects
the consideration to which the entity expects to be entitled in exchange
for those goods and services. Due to the subsidiaries being relatively
independent, their management may also have an opportunity to over
-
state revenues. Based on above correct timing of revenue recognition
was a key audit matter.
Correct timing of revenue recognition was also a significant risk of
material misstatement referred to in EU Regulation No 537/2014 point
(c) of Article 10(2).
AUDITOR’S REPORT | 61
RESPONSIBILITIES OF THE BOARD OF DIRECTORS
AND THE MANAGING DIRECTOR FOR THE
FINANCIAL STATEMENTS
The Board of Directors and the Managing Director are responsible for
the preparation of consolidated financial statements that give a true and
fair view in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU, and of financial statements that give a true
and fair view in accordance with the laws and regulations governing the
preparation of financial statements in Finland and comply with statutory
requirements. The Board of Directors and the Managing Director are also
responsible for such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the
Managing Director are responsible for assessing the parent company’s
and the group’s ability to continue as going concern, disclosing, as ap
-
plicable, matters relating to going concern and using the going concern
basis of accounting. The financial statements are prepared using the
going concern basis of accounting unless there is an intention to liqui
-
date the parent company or the group or cease operations, or there is no
realistic alternative but to do so.
Key Audit Matter How our audit addressed the Key Audit Matter
VALUATION OF GOODWILL AND INTANGIBLE ASSETS
We refer to accounting principles for the consolidated accounts and note 11
(Intangible assets).
Our audit procedures to address the risk of material misstatement relating
to valuation of goodwill and intangible assets included among others:
■ Involvement of EY valuation specialists to assist us in evaluating
methodologies, impairment calculations and underlying assump
-
tions applied by the management in impairment testing.
■ Testing of the mathematical accuracy of the impairment calcula
-
tions.
■ We focused on how much recoverable amounts exceeded the carry
-
ing amounts of cash-generating units, and whether any reasonably
possible change in assumptions could cause the carrying amount
to exceed its recoverable amount.
■ We assessed the adequacy of the Group’s disclosures about good
-
will and intangible assets.
At the balance sheet date, the value of goodwill and intangibles amounted
to 84.7 M€ (80.8 M€) representing 25.1% % (25.6 %) of the total assets.
Procedures regarding management’s annual impairment test were a
key audit matter because the valuation includes estimates. The Group
management use assumptions in respect of future market and economic
conditions such as revenue and margin developments.
Valuation of goodwill and intangible assets was also a significant risk
of material misstatement referred to in EU Regulation No 537/2014 point
(c) of Article 10(2).
Key Audit Matter How our audit addressed the Key Audit Matter
VALUATION OF INVENTORIES
We refer to accounting principles for the consolidated accounts and note 17
(Inventories).
Our audit procedures included among others:
■ Assessing the Group’s accounting policies regarding inventory al
-
lowances against applicable accounting standards.
■ Evaluating the analyses and assessments made by management
with respect to obsolete and slow-moving inventories, the expected
demand and market value related to the items.
■ Assessing the adequacy of the Group’s disclosures on inventories
in the financial statements.
Inventories are valued at the lower of cost or net realizable value. Inven
-
tories are presented net of an impairment loss recognized for obsolete
and slow-moving inventories. At the balance sheet date, the total value
of inventory and related provision for obsolete goods amounted to 106.5
M€ and -6.6 M€, respectively (net 99.9 M€).
Valuation of inventories was a key audit matter because the carrying
value of inventories and related provisions are material to the financial
statements, and because valuation of inventories requires management
assessment relating to future sales and the level of provision for obsolete
goods.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF
THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance on whether the finan-
cial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with good auditing
practice will always detect a material misstatement when it exists. Mis
-
statements can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to influ
-
ence the economic decisions of users taken on the basis of the financial
statements.
As part of an audit in accordance with good auditing practice, we
exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
■ Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and per
-
form audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresenta
-
tions, or the override of internal control.
62 | RAPALA VMC FINANCIAL STATEMENT 2022
■ Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circum
-
stances, but not for the purpose of expressing an opinion on the ef-
fectiveness of the parent company’s or the group’s internal control.
■ Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.
■ Conclude on the appropriateness of the Board of Directors’ and the
Managing Director’s use of the going concern basis of account
-
ing and based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast sig
-
nificant doubt on the parent company’s or the group’s ability to con-
tinue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclo
-
sures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the parent
company or the group to cease to continue as a going concern.
■ Evaluate the overall presentation, structure and content of the finan
-
cial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events so
that the financial statements give a true and fair view.
■ Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the group to
express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of
the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that
we have complied with relevant ethical requirements regarding indepen
-
dence, and communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the audit of
the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
OTHER REPORTING REQUIREMENTS
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting on
5.4.1995, and our appointment represents a total period of uninterrupted
engagement of 28 years. Rapala VMC Corporation has been a public
interest entity since 4.12.1998.
Other information
The Board of Directors and the Managing Director are responsible for
the other information. The other information comprises the report of the
Board of Directors and the information included in the Annual Report,
but does not include the financial statements and our auditor’s report
thereon. We have obtained the report of the Board of Directors prior to
the date of this auditor’s report, and the Annual Report is expected to be
made available to us after that date.
Our opinion on the financial statements does not cover the other in
-
formation.
In connection with our audit of the financial statements, our respon
-
sibility is to read the other information identified above and, in doing so,
consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. With respect to report of the Board
of Directors, our responsibility also includes considering whether the
report of the Board of Directors has been prepared in accordance with
the applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors
is consistent with the information in the financial statements and the
report of the Board of Directors has been prepared in accordance with
the applicable laws and regulations.
If, based on the work we have performed on the other information that
we obtained prior to the date of this auditor’s report, we conclude that
there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Helsinki, March 2, 2023
ERNST & YOUNG OY
Authorized Public Accountant Firm
Mikko Järventausta
Authorized Public Accountant
