FINANCIAL
STATEMENTS
CONTENTS
REPORT OF
THE BOARD OF DIRECTORS .......................................... 3
KEY FINANCIAL FIGURES ............................................. 8
CONSOLIDATED FINANCIAL STATEMENTS, IFRS ...... 10
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS .......................................... 14
PARENT COMPANY
FINANCIAL STATEMENTS, FAS .................................. 43
NOTES TO PARENT COMPANY
FINANCIAL STATEMENTS .......................................... 46
RISK MANAGEMENT ................................................... 52
SHARES AND SHAREHOLDERS ................................... 54
BOARD AND MANAGEMENT ....................................... 56
SIGNATURES FOR THE REPORT OF
BOARD OF DIRECTORS AND
FINANCIAL STATEMENTS .......................................... 58
THE AUDITOR’S NOTE ................................................ 58
AUDITOR’S REPORT ................................................... 59
REPORT OF THE BOARD OF DIRECTORS | 3 | 3
REPORT OF
THE BOARD OF DIRECTORS
MARKET ENVIRONMENT
In 2023, operating environment remained tough due to the global eco-
nomic slowdown and high inflation. Slowdown caused retailers to focus
on managing their inventories and caused unpredictability in their order-
ing patterns. This destocking continued throughout the year but started
to ease in the latter part of the year. Consumer spending remained tight
due to high inflation and impacted especially higher ticket item sales.
Sports fishing also competed with other recreational activities which
were previously restricted by the covid restrictions.
KEY FIGURES
EUR million 2023 2022 2021
Net sales 221.6 274.4 294.3
Operating profit before depreciation
and impairments (EBITDA) 15.6 23.6 42.0
Operating profit 4.0 12.3 32.1
as a percentage of net sales, % 1.8 4.5 10.9
Comparable operating profit 5.6 15.3 32.7
as a percentage of net sales, % 2.5 5.6 11.1
Profit/loss before taxes -6.7 8.8 28.0
Net profit/loss for the period -7.3 3.7 19.8
Earnings per share -0.20 0.10 0.45
Employee benefit expenses 61.7 71.5 71.6
Average number of personnel, persons 1 436 1 704 1 792
Research and development expenses 0.8 1.3 1.2
as a percentage of net sales, % 0.4 0.5 0.4
Net cash generated from operating activities 20.6 -12.9 24.4
Total net cash used in investing activities 9.5 10.7 22.7
Net interest-bearing debt at the end of the period 80.9 107.1 70.6
Equity-to-assets ratio at the end of the period, % 52.1 41.2 44.2
Debt-to-equity ratio (gearing)
at the end of the period, %
51.8 77.0 50.7
Return on equity, % -5.0 2.7 14.0
BUSINESS REVIEW
The Group’s net sales for the year were 19% below the comparison pe-
riod with reported translation exchange rates. Changes in translation
exchange rates had a slight negative impact on the sales and with com-
parable translation exchange rates, net sales were down by 17% from
the comparison period.
North America
Sales in North America decreased by 16% from the comparison period
with reported translation exchange rates and decreased by 14% with
comparable translation exchange rates. Majority of the drop comes from
sales of Third Party Products following a strategic decision in December
2022 to outsource the supply chain function of 13 Fishing products sold
to DQC International (13 Fishing USA). Another negative impact relates to
ice fishing category in which poor ice conditions in 2022/23 season im-
pacted retail sell-through and replenishment sales. This also had knock-
on impact to pre-season shipments for 2023/24 season.
Excluding the above factors, sales increased by 10% with comparable
translation exchange rates. Growth came from resilient consumer de-
mand for core products such as lures, fishing lines and accessories.
Acquisition of DQC International in July 2023 had a positive impact on
the consolidated sales even though the rod and reel segment in general
remained tough.
Nordic
Sales in the Nordic market decreased by 29% from the comparison pe-
riod. With comparable translation exchange rates sales were down by
28%. Retail destocking continued for a good part of the year but started
normalizing towards the end of the year. High retail inventories and high
inflation hit the sales of summer fishing items and continued to limit
replenishment sales in the latter part of the season.
Poor retail sell-through in ski business, after record-high deliveries in
H2 of 2022, had a significant negative impact on replenishment sales
in early part of the year. This also had a knock-on impact to pre-season
deliveries in H2. Favorable weather conditions at the end of the year
helped to gain back some of the lost pre-season sales.
Discontinuation of Third Party distributorships reduced the sales of
this segment by 1 MEUR.
EXTERNAL NET SALES BY AREA
EUR million 2023 2022 Change %
Comparable
change %
North America
110.6 132.2 -16% -14%
Nordic
27.8 38.9 -29% -28%
Rest of Europe
57.1 70.6 -19% -17%
Rest of the World
26.1 32.7 -20% -18%
Total 221.6 274.4 -19% -17%
North America 50%
Nordic 13%
Rest of Europe 26%
Rest of the World 12%
Rest of Europe
Sales in the Rest of Europe market decreased by 19% from the compari-
son period. With comparable translation exchange rates sales were down
by 17% from the previous year. As in Nordics, the destocking at retail
level continued for a good part of the year but started showing signs of
normalization towards the end of the year. In Group Products segment,
hook sales were down as hooks are supplied to other manufacturers in
the beginning of the normalizing value chain. Okuma sales decreased
due to retailers remaining cautious with allocating purchases towards
high-ticket items and relying more on supplier inventories.
The largest drop in sales come from discontinued Third Party distribu-
torships which explain 4 MEUR of the drop.
4 | RAPALA VMC FINANCIAL STATEMENT 2023
Rest of the World
With reported translation exchange rates, sales in the Rest of the World market
decreased by 20% from the comparison period. With comparable translation
exchange rates, sales decreased by 18% compared to the previous year. Con-
sumers remained cautious throughout the year and discretionary spending
remained low. Sales decline came evenly from all product categories. As a
highlight of the area, Australia and Brazil came out strong. China and neighbor-
ing markets witnessed increased competition from local brands as Chinese
fishing tackle manufacturers searched for ways to utilize unused capacity.
FINANCIAL RESULTS AND PROFITABILITY
Comparable (excluding mark-to-market valuations of operative currency
derivatives and other items affecting comparability) operating profit de-
creased by 9.7 MEUR from the comparison period. Reported operating
profit decreased by 8.3 MEUR from the previous year and the items affect-
ing comparability had a negative impact of 1.6 MEUR (3.0) on reported
operating profit.
Comparable operating profit margin was 2.5% (5.6) for the year. The
decreased profitability compared to the previous year was driven by lower
sales both in open water market and in winter businesses. Production
transfer from Vääksy and Sortavala to Pärnu increased costs temporarily
and this is expected to normalize in 2024. The 6 MEUR savings program
is being implemented according to plan and full impact is expected to be
realized in 2024, although part of the benefit will be offset by inflationary
cost increases.
Reported operating profit margin was 1.8% (4.5) 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 -1.9
MEUR (-3.2). These expenses come from restructuring of the Helsinki
headquarters and expenses from integration of DQC International (13
Fishing) fully to the existing US distribution operations.
Total financial (net) expenses were 10.7 MEUR (3.5) for the year. Net
interest and other financing expenses were 9.9 MEUR (3.6) and (net)
foreign exchange expenses were 0.8 MEUR (0.0).
Net profit for the year decreased by 11.0 MEUR and was -7.4 MEUR
(3.7) and earnings per share was -0.20 EUR (0.10).
BRIDGE CALCULATION OF
COMPARABLE OPERATING PROFIT
EUR million 2023 2022 Change %
Operating profit 4.0 12.3 -67%
Items affecting comparability
Mark-to-market valuations of
operative currency derivatives -0.2 -0.2
Other items affecting comparability
Finnish restructuring 0.8 -
US restructuring 0.8 -
Russia restructuring 0.0
Organizational restructurings 0.3
Other restructurings 0.0 0.2
Comparable operating profit 5.6 15.3 -63%
SEGMENT REVIEW
Group Products
With comparable translation exchange rates, Group Products sales de-
creased by 14.7 MEUR from the comparison period. Slow sales in H1
were a result of macroeconomic headwinds resulting in consumer cau-
tiousness and wide destocking among retailers. The drop in sales was
evident across most categories. As the destocking started easing halfway
of 2023, most open water categories evidenced growing demand in the
latter part of the year. As a positive note, sales of consumable type prod-
ucts such as lures, fishing lines and baits reached prior year sales level.
Ice fishing and winter sports sales remained tough throughout the year.
Poor retail sell-through in 2022/23 season was caused by adverse weath-
er conditions and consumer cautiousness. This impacted replenishment
sales in the beginning of the year and had a knock-on impact on pre-
season deliveries in the latter part of the year. Favorable winter weather
in Finland helped to gain some of the lost sales at the end of the year.
Third Party Products
With comparable translation exchange rates, Third Party Products sales
were 30.7 MEUR below the comparison period. 13 MEUR of the drop is
explained by outsourcing of supply chain function of 13 Fishing products.
Before outsourcing, supply of 13 Fishing products to then associated
company DQC International were recorded as sales. Rest of the sales drop
comes from terminations of Third Party distributorships and from decline
in winter business sales as highlighted under chapter Group Products.
NET SALES BY OPERATING SEGMENT
EUR million 2023 2022 Change %
Comparable
change %
Group Products 208.1 228.4 -12% -10%
Third Party Products 13.6 46.0 -56% -54%
Total 221.6 274.4 -19% -17%
Group Products 94%
Third Party Products 6%
COMPARABLE OPERATING PROFIT BY OPERATING
SEGMENT
EUR million 2023 2022 Change %
Group Products 5.1 15.0 -66%
Third Party Products 0.6 0.3 80%
Total comparable operating profit 5.6 15.3 -63%
Items affecting comparability -1.6 -3.0 -45%
Total operating profit 4.0 12.3 -68%
FINANCIAL POSITION
Cash flow from operations increased by 33.5 MEUR from the comparison
period and was 20.6 MEUR (-12.9). Lower profitability and high financial
costs burdened cash flow but relentless focus on cash generation and
driving down inventory levels resulted in a positive result. During the year,
9.9 MEUR was released from working capital, while last year 28.7 MEUR
was tied in working capital.
End of the year inventory in 2023 was 87.5 MEUR (99.9). The change
in obsolescence allowance decreased inventory value by 0.7 MEUR, and
changes in translation exchange rates decreased inventory value by 2.2
REPORT OF THE BOARD OF DIRECTORS | 5
MEUR. Acquisition of DQC International increased inventory by some
3 MEUR. Resolving retail level destocking and manufacturing capacity
adjustments started to show results in the second half of the year and
inventory decreased by 11.0 MEUR from June to December.
Net cash used in investing activities decreased from the comparison
period amounting to 9.5 MEUR (10.7). Capital expenditure was 9.5 MEUR
(11.5) and disposals 1.4 MEUR (0.8). Significant part of the expenses
relate to the production transfers from Russia and from Finland to the
Rapala VMC campus in Pärnu, Estonia. Prior year capital expenditure
includes expenses related to the Russian production transfer to Estonia.
Liquidity position of the Group was good. Undrawn committed long-
term credit facilities amounted to 35.0 MEUR at the end of the year.
Gearing ratio decreased and equity-to-assets ratio increased from last
year following the issuance of a 30 MEUR hybrid capital bond. See section
“Issuance of Hybrid Bond” for more details.
In September 2023, the Group and the lending banks agreed to waive
the quarterly Q3 financial covenant testing until terms of the upcoming
refinancing have been agreed upon. The Q3 covenant testing eventually
became void as the new syndicated refinancing agreement was signed
on November 29. At year-end, the leverage ratio covenant landed at 4.92
(limit 6.00) and net debt landed at 81.6 MEUR (limit 95 MEUR). The Group
is currently compliant with all financial covenants and expects to com-
ply with future bank requirements as well. The Group’s cash position
remains good, and cash and cash equivalents amounted to 20.0 MEUR
at December 31, 2023.
For more information on refinancing and hybrid bond, see sections
‘Refinancing’ and ‘Issuance of Hybrid Bond’.
KEY FIGURES
EUR million 2023 2022 Change %
Net cash generated from operating activities 20.6 -12.9 -259%
Net interest-bearing debt
at the end of the period 80.9 107.1 -24%
Debt-to-equity ratio (gearing)
at the end of the period, % 51.8 77.0 -33%
Equity-to-assets ratio
at the end of the period, % 52.1 41.2 27%
Refinancing
On November 29, 2023, the Group signed new financing agreement re-
garding 106 MEUR senior secured term and revolving facilities with OP
Corporate Bank plc, Skandinaviska Enskilda Banken AB and Nordea Bank
Abp as underwriters of the facilities for the purposes of refinancing the
Group’s existing loan facilities with the lenders and for general corporate
purposes. The financing agreement consists of a 46 MEUR term loan
facility and a 60 MEUR revolving credit facility. The term of the facilities
is 15 months from the signing of the facilities agreement, subject to two
extension options of 12 months each.
The terms of the agreement include financial covenants based on the
available liquidity (minimum 22.5 MEUR), 12m rolling EBITDA (minimum
10 MEUR), net debt to consolidated equity (maximum 100%), absolute
net debt, and net debt to EBITDA (“leverage ratio”). The absolute net debt
covenant is effective for Q4/2023, Q1/2024, Q2/2024 and Q3/2024 test-
ing periods and the maximum allowed amount is 95 MEUR, 90 MEUR,
80 MEUR and 80 MEUR, respectively. The financial leverage ratio cov-
enant levels have been set at 6.00 for Q4/2023, 5.50 for Q1/2024, 4.25
for Q2/2024 and return to normal level of 3.80 from Q3/2024 onwards.
Covenants are regularly tested, either quarterly or on the last date of each
month. The risk of breaching the covenants would trigger negotiations
between the Group and lending banks to resolve the potential covenant
breach, and to agree on actions to rectify the situation. In the unlikely
event of unresolved covenant breach, the lending banks would have the
right to call all or any part of the loans and related interest.
Issuance of Hybrid Bond
On November 22, 2023, The Group announced the issuance of a hybrid
capital securities in the aggregate amount of 30.0 MEUR with a fixed
coupon interest rate of 12.5% per annum until 29 November 2026 (the
“Reset Date”) and, from the Reset Date, a floating interest rate (3m Euribor
+ Re-offer Spread 9.249% + step-up of 500 bps). Payment of the interest is
deferrable subject to certain restrictions. The hybrid bond does not have
a specified maturity date, but the Group is entitled to redeem the hybrid
bond at their nominal amount on the Reset Date, and subsequently, on
each interest payment date thereafter.
The hybrid bond is subordinated to the Group’s other debt obligations
and treated as equity in the consolidated financial statements. The hybrid
bond does not confer to its holders the rights of a shareholder and do
not dilute the holdings of the current shareholders.
The proceeds from the issue were used for general corporate purposes,
including supporting the Group’s balance sheet, cash balance and improv-
ing its financial flexibility amid challenging trading environment.
STRATEGY IMPLEMENTATION
The strategic vision of the Group is to become a focused Group Brand
and innovation driven sport fishing market leader in lures, hooks and ac-
cessories globally in connection to creating outstanding experiences to
global fishermen. The revitalized “Together. One More Turn” – strategy
for 2024-2026 was implemented in Autumn 2023 with a strong initiative to
improve profitability and working capital management while maintaining
and strengthening the focus on sales, customers and consumers. In ad-
dition, SKU & category management, operational excellence and training
and education of our employees continues to be the core of our priorities.
To support the execution and implementation of the “Together. One
More Turn” – strategy the Group established a project called “Restore
Success” which focuses on six key improvement initiatives ensuring a
successful turnaround. These initiatives focus on profitability and working
capital management (One More Turn) as well supporting a sustainable
sales growth.
The fundamental elements of our revitalized 2024-2026 strategic plan
have not changed from the previous One Rapala VMC strategy. The six
building blocks are all interconnected and shared around the Group in
all business units.
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
leading company in the fishing tackle industry behind concrete sustain-
ability 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.
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. The new e-commerce platform underlines the Group’s ambition to
become more directly connected with consumers.
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 Relationship Service. During the year
the Group has implemented new B To B platform in different languages.
6 | RAPALA VMC FINANCIAL STATEMENT 2023
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.
OPERATIONS & FINANCE - The Group continues to invest in its op-
erations to make a step-change in operational excellence, to improve
working capital efficiency.
In the second half of 2023 the Group continued to streamline and
harmonize operations and fully completed the centralization of manu-
facturing operations to Pärnu. Reduction of the Group’s working capital
and streamlining of our portfolio progressed in a challenging market
environment. In the second half of 2023 Group also made the first ship-
ments of the new Crush City product launch which has proven to be very
successful in the early stages. The formalization of the new revitalized
strategic plan was completed in Q4 2023 and the implementation has
started from January 2024 onwards.
PRODUCT DEVELOPMENT
Rapala VMC kicked the second half of 2023 in a big way receiving major
awards at two of the world’s largest Fishing Tackle Trade shows. At ICAST
in Orlando Florida, Rapala VMC was awarded “Best of Show” in Terminal
Tackle for the VMC Swinging Ned Jig - a great win for VMC within the
Bass category. Shortly thereafter another huge win was taken at AFTA in
Australia, where all new Rapala CrushCity “Imposter” was awarded “Best
New Soft Plastics” and “Consumers Choice Award”.
Overall, 2023 closed on a high note for our core brands. Despite chal-
lenging market conditions in many regions core brands continued to grow
with the support of aggressive 2024 product pipelines that commenced
shipping to retail in early in Q4. CrushCity soft plastics led the way by pro-
viding a substantial uplift to Rapala lure sales in the key regions that got
a jumpstart on the launch. Strategically Rapala entered the Soft Plastics
category to drive new incremental business in lures, which was clearly
realized with strong initial shipments to major customer in late 2023. The
soft plastics outlook for 2024 is extremely positive.
Rapala VMC also started shipping several new and exciting products
under its flagship brands. One standout was the Jigging Rap Magnum
which was designed specifically for the rapidly advancing techniques in
forward facing sonar. Rapala is working across all of its brands to front-
run the adoption of this trend. Other successful introductions included
the Rapala Mavrik and ShadRap Elite. From VMC we saw the highly suc-
cessful launch of the Redline Series.
In rod and reel category, a continued European product rationalization
for Okuma is in full swing to ensure the existing product ranges are op-
timized for the key market and fisheries. In addition to this streamlining
there were notable new Okuma introductions, including all new Inspira
Spinning reels. With the full acquisition of 13 Fishing completed in late
2023 plans to fully revitalize and re-launch the core categories of Rods,
Reels & Combos have begun. However a deeper integration with Rapala
USA sales, marketing and product development teams took shape much
earlier in the year. The focus was on both updating and streamlining
the US range in preparation for a more refined and focused approach in
2024 and beyond. Deep collaboration between these teams resulted in an
incredibly strong multi-year product pipeline which will first be launched
to the trade in April 2024.
Based on the relatively strong performance of our “core” brands during
less-than-optimal market conditions the outlook is strong with a contin-
ued aggressive product pipeline and road map through next 3-5 years of
new product introduction cycles. The global product development team
is well integrated and working in a deeply collaborative way with our
sales and marketing departments leading to a dynamic, all-encompassing
approach to product development and strong market utilization across
the brand portfolio.
SUSTAINABILITY
Looking at our sustainability work in 2023, our focus was on adapting
and preparing for the future. The major step was redefining the Group’s
sustainability strategy, named the Strategy of Constant Improvement,
as part of the overall new business strategy. Our target is to be an in-
dustry leader in terms of sustainability work integrating sustainability
work to our processes. Commitment to constant improvement echoes
the significance of incremental progress, as the little streams make the
big rivers. This strategy update not only better mirrors our position, and
the aspirations for sustainability actions but also addresses the evolving
landscape of sustainability-related legislation and requirements.
In tandem, we revisited the roadmap to achieve our predefined sus-
tainability goals, aligning them more closely with the Group’s financial
situation and allowing greater flexibility in product development costs.
Despite these revisions, great achievements were achieved. The year
2023 saw a significant shift in Rapala manufacturing methods as we
reached a key milestone: over 90% of Rapala lure models are currently
lead free. This feat required hundreds of hours of work from a team of
Product Designers, Production Engineers, and Procurement Specialists.
On the other hand, with the Williamson branded products we transitioned
essentially to 100% of the global product range to plastic free packag-
ing. All packages from the global Williamson range were re-designed, a
process that took over two years to complete, involving over 900 SKUs.
Based on recent sales history this action should reduce our plastic stream
into the marketplace by two metric tons annually. Another full-scale sus-
tainability leap, providing a more sustainable option for the consumer,
we are proud of!
Moving on, we updated the Group’s sustainability-related guidance
documents, including the Supplier Code of Conduct, based on recent
experiences. Additionally, we fine-tuned processes related to the procure-
ment of conflict minerals (wolfram) and timber, aligning the latter with
the EU Timber Regulation. Our preparation extended to the impending
extended producer responsibility for fishing gear, in line with the Euro-
pean Union directive scheduled for implementation in the coming years
across the EU-countries.
Also, to respond to the reporting requirements of the EU Corporate
Sustainability Reporting Directive (CSRD), the Group conducted a double
materiality analysis. To streamline Group-wide data collection and report-
ing, we introduced groupwide sustainability data software. The Group
will publish a considerably more comprehensive sustainability report of
the year 2023 than before and invest on meeting the full requirements of
CSRD during 2024. The Group will also revise its taxonomy reporting as
manufacture of electrical and electronic equipment has been included in
the new taxonomy activities under the environmental objectives. Rapala
VMC sources various fishing related low voltage appliances such as well
known and reputable electronic filleting knives and electronic ice drills.
Simultaneously, a cross-functional risk assessment group has updated
the internal analysis of sustainability-related business risks. Presently, we
specifically consider climate change and its implications, such as effects
on fish stocks and winter sports, as well as shifting attitudes towards
recreational fishing, and their potential impact on the Group’s reputation,
as material risks. Employee well-being and commitment is also on the
focus as competitive advantage to be nurtured. Our sustainability strat-
egy aims to respond to and address the identified sustainability-related
business risks and potential risks are assessed constantly.
As a subsequent event in early 2024 the Group nominated a new Senior
Sustainability Manager who will drive the sustainability work within the
Group to the next level. In addition to the sustainability reporting induction,
Group’s sustainability function will emphasize even stronger sustainability
communications during reporting year 2024.
REPORT OF THE BOARD OF DIRECTORS | 7
ORGANIZATION AND PERSONNEL
The average number of personnel was 1 436 (1 704) for the full year
and 1 389 (1 636) for the last six months. At the end of December, the
number of personnel was 1 374 (1 543), decrease coming mainly from
Russia, Finland and Indonesia.
Jean-Philippe Nicolle, who is already a member of the Global Manage-
ment Team and currently the Chief Financial Officer, has been appointed
as Chief Operating Officer responsible for Business Performance, Finance
Controlling and Internal Auditing as of January 1, 2024.
Miikka Tarna has been appointed as a member of Global Manage-
ment Team and Chief Financial Officer as of January 1, 2024. Tarna has
worked for the Rapala VMC Group since 2010 and is currently Deputy
Chief Financial Officer.
Tuomas Akkanen has been appointed as a member of Global Manage-
ment Team and Executive Vice President, Head of Group Supply Chain
and Winter Sports as of January 1, 2024. Akkanen has worked for the
Rapala VMC Group since 2017 and is currently head of Group Supply
Chain and Winter Sports.
Päivi Ohvo has been appointed as a member of Global Management
Team and Executive Vice President, Human Resources, as of January
1, 2024. Ohvo has worked for the Rapala VMC Group since 2005 and is
currently head of HR and the Managing Director of Marttiini Oy.
Tuomo Leino has been appointed as a member of Global Management
Team and Executive Vice President, General Counsel as of January 1,
2024. Leino has worked for the Rapala VMC Group since 2019 and is
currently Group’s General Counsel, Secretary of the Board and Head of
Sustainability.
Joni Tuominen has been appointed as a member of Global Manage-
ment Team and Executive Vice President, Global Business Development
and IT as of January 1, 2024. Tuominen has worked for the Rapala VMC
Group during 2011-2015 and since 2018 and is currently heading the
Group’s Global Business Development function.
All persons referred above report directly to President and Chief Execu-
tive Officer Lars Ollberg.
3000
2500
2000
1500
1000
500
0
PERSONNEL AT THE END OF THE PERIOD, persons
1 757
2 304
1 971
1 543
19 20 21 22 23
1 374
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.
REPORTING OF NON-FINANCIAL INFORMATION
More comprehensive information on the Group’s sustainability efforts in
2023 has been published on the company’s website in a separate sustain-
ability report and in the corporate governance statement.
The effects of climate change has been taken into account in the finan-
cial statements through management assessments related to cash flow
forecasts used in impairment testing, investments, operational logistics
costs and supply chains.
SHORT-TERM OUTLOOK AND RISKS
Trading outlook for 2024 is improving as evidenced by better operational
performance in the second half of 2023. Retail inventories are finally
returning to regular levels allowing normalized flow of goods to the mar-
ket. The North American economic outlook is still somewhat cautious;
however, consumer discretionary spending is steadier with a bigger ap-
petite for consumer goods rather than bigger ticket durable items. The
ice fishing business in North America experienced its second year of
poor ice conditions which will have negative impact on the presales of
the season 2024/2025. In Europe, consumer discretionary spending re-
mains cautious, and retailers are shifting more to in-season purchases
and lower presales commitments, relying more on supplier inventories.
In operations, year 2024 will be the first full year of centralized manu-
facturing operations in our Pärnu facility. At the same time our Euro-
pean distribution operations are engaged in improving profitability and
efficiency, and the focus is to further streamline and integrate the two
major logistics hubs for North and South Europe. Lastly, full integration
of 13 Fishing products into our strong US sales network is expected to
release synergies.
Consequently, the Group expects 2024 full year comparable operating
profit (excluding mark-to-market valuations of operative currency deriva-
tives and other items affecting comparability) to increase from 2023.
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 no
dividend will be paid for 2023. At December 31, 2023 the distributable
equity in Group’s parent company totaled 33.3 MEUR.
There have been no material changes in the parent company’s financial
position since 31 December 2023, the liquidity of the parent company
remains good and the proposed dividend 0.00 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 2023
KEY FINANCIAL FIGURES
2023 2022 2021 2020 2019
Scope of activity and profitability
Net sales EUR million 221.6 274.4 294.3 261.3 275.4
Operating profit before depreciation and impairments EUR million 15.6 23.6 42.0 26.2 26.0
as a percentage of net sales % 7.0 8.6 14.3 10.0 9.4
Operating profit EUR million 4.0 12.3 32.1 10.7 13.4
as a percentage of net sales % 1.8 4.5 10.9 4.1 4.9
Profit/loss before taxes EUR million -6.7 8.8 28.0 6.6 9.8
as a percentage of net sales % -3.0 3.2 9.5 2.5 3.6
Net profit/loss for the period EUR million -7.3 3.7 19.8 3.4 4.1
as a percentage of net sales % -3.3 1.4 6.7 1.3 1.5
Attributable to
Equity holders of the Company EUR million -7.3 3.7 18.2 2.5 4.4
Non-controlling interest EUR million - - 1.5 1.0 -0.4
Capital expenditure EUR million 11.4 11.5 14.0 5.0 5.6
as a percentage of net sales % 5.2 4.2 4.8 1.9 2.0
Research and development expenses EUR million 0.8 1.3 1.2 1.1 1.7
as a percentage of net sales % 0.4 0.5 0.4 0.4 0.6
Net interest-bearing debt at the end of the period EUR million 80.9 107.1 70.6 45.2 74.6
Capital employed at the end of the period EUR million 237.2 246.1 209.8 188.2 226.2
Return on capital employed (ROCE) % 1.6 5.4 16.1 5.2 6.0
Return on equity (ROE) % -5.0 2.7 14.0 2.3 2.7
Equity-to-assets ratio at the end of the period % 52.1 41.2 44.2 52.5 52.4
Debt-to-equity ratio (gearing) at the end of the period % 51.8 77.0 50.7 31.6 49.2
Average personnel for the period Persons 1 436 1 704 1 792 2 105 2 604
Personnel at the end of the period Persons 1 374 1 543 1 757 1 971 2 304
300
250
200
150
100
50
0
NET SALES, EUR million
294.3
275.4
261.3
19 20 21 22 23
274.4
221.6
15
10
5
0
-5
-10
NET PROFIT/LOSS FOR THE PERIOD, EUR million
4.1
19.8
3.4
19 20 21 22 23
3.7
-7. 3
50
40
30
20
10
0
EQUITY-TO-ASSETS RATIO, %
44.2
52.4 52.5
41.2
52.1
19 20 21 22 23
25
20
15
10
5
0
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
4.9
4.1
10.9
4.5
19 20 21 22 23
4.0
1.8
KEY FINANCIAL FIGURES | 9
2023 2022 2021 2020 2019
Share related key figures
Earnings per share EUR -0.20 0.10 0.45 0.04 0.10
Fully diluted earnings per share EUR -0.20 0.10 0.44 0.04 0.10
Equity per share EUR 3.25 3.58 3.58 2.93 3.16
Dividend per share
1)
EUR - 0.04 0.15 - -
Dividend/earnings ratio
1)
% - 41.8 33.5 - -
Effective dividend yield
1)
% - 0.80 1.72 - -
Price/earnings ratio -15.2 52.2 19.5 118.4 27.8
Share price at the end of the period EUR 3.00 5.00 8.72 4.36 2.77
Lowest share price EUR 2.53 4.08 4.36 2.15 2.56
Highest share price EUR 5.14 9.16 10.95 4.58 3.43
Average share price EUR 3.18 6.46 7.82 3.04 2.88
Number of shares traded Shares 2 998 795 2 792 052 5 217 447 6 044 245 4 804 467
Number of shares traded of average number of shares % 7.71 7.18 13.47 15.68 12.52
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 - -
Year end market capitalization
2)
EUR million 116.6 194.4 339.6 168.1 106.8
Number of shares at the end of the period excluding own shares
2)
1 000 shares 38 876 38 876 38 950 38 548 38 548
Number of own shares at the end of period 1 000 shares 124 124 50 452 452
Weighted average number of shares
2)
1 000 shares 38 876 38 890 38 732 38 548 38 387
Fully diluted number of shares at the end of the period 1 000 shares 39 000 39 000 39 000 38 548 38 548
Fully diluted weighted average number of shares 1 000 shares 39 000 39 000 39 000 38 548 38 387
1)
Year 2023 board proposal.
2)
Excluding own shares.
0,25
0,20
0,15
0,10
0,05
0
DIVIDEND PER SHARE, EUR
*Board proposal
0.15
0.000.00
0.04*
19 20 21 22 23
0.00
80
60
40
20
0
49.2
50.7
31.6
19 20 21 22 23
DEBT-TO-EQUITY RATIO (gearing) at the end of the period, %
77.0
51.8
0,4
0,3
0,2
0,1
0
-0,1
-0,2
EARNINGS PER SHARE, EUR
0.45
0.10
0.04
0.10
-0.20
19 20 21 22 23
100
80
60
40
20
0
DIVIDEND/EARNINGS RATIO, %
*Board proposal
33.5
0.000.00
19 20 21 22 23
41.8*
0.00
10 | RAPALA VMC FINANCIAL STATEMENT 2023
CONSOLIDATED FINANCIAL STATEMENTS, IFRS
CONSOLIDATED INCOME STATEMENT
EUR million Note 2023 2022
Net sales 2 221.6 274.4
Other operating income 4 1.0 0.4
Change in inventory of finished products and work in progress -12.6 13.1
Production for own use 0.1 0.2
Materials and services 6 -83.6 -138.5
Employee benefit expenses 7 -61.7 -71.5
Other operating expenses 5 -48.0 -52.3
Share of results in associates and joint ventures 13 -1.3 -2.3
Operating profit before depreciation, amortization and impairments 15.6 23.6
Depreciation, amortization and impairments 11, 12, 27 -11.6 -11.3
Operating profit 4.0 12.3
Financial income and expenses 9 -10.7 -3.5
Profit/loss before taxes -6.7 8.8
Income taxes 10 -0.6 -5.1
Net profit/loss for the period -7.3 3.7
Attributable to
Equity holders of the parent company -7.3 3.7
Earnings per share for profit attributable to the equity holders of the parent company
30
Earnings per share, EUR -0.20 0.10
Diluted earnings per share, EUR -0.20 0.10
Weighted average number of shares, 1 000 shares 38 876 38 890
Diluted weighted average number of shares, 1 000 shares 39 000 39 000
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million 2023 2022
Net profit/loss for the period -7.3 3.7
Other comprehensive income, net of tax
1)
Items that will not be reclassified to income statement
Remeasurements of defined benefit liabilities 0.2 0.3
Total items that will not be reclassified to income statement 0.2 0.3
Items that may be reclassified subsequently to income statement:
Change in translation differences -3.1 2.4
Net investment hedges -0.1 -0.6
Total items that may be reclassified subsequently to income statement -3.1 1.8
Other comprehensive income for the period, net of tax -3.0 2.1
Total comprehensive income for the period -10.3 5.8
Attributable to
Equity holders of the parent company -10.3 5.8
1)
The income tax relating to each component of other comprehensive income is disclosed in note 10.
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 1 1
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million Note 2023 2022
ASSETS
Non-current assets
Goodwill 11 64.3 50.2
Other intangible assets 11 37.5 34.5
Tangible assets 12 25.8 28.7
Right-of-use-assets 27 13.5 16.0
Investments in associates and joint ventures 13 0.0 1.2
Other shares 14 0.2 0.2
Interest-bearing receivables 15 0.7 11.8
Non-interest-bearing receivables 15 0.5 1.2
Deferred tax assets 10 12.3 10.5
Total non-current assets 154.7 154.3
Current assets
Inventories 16 87.5 99.9
Trade and other non-interest-bearing receivables 15 34.8 50.2
Income tax receivables 1.3 1.9
Interest-bearing receivables 15 - 2.8
Cash and cash equivalents 17 20.0 29.0
Non-current assets held for sale 18 1.9 -
Total current assets 145.6 183.9
Total assets 300.2 338.1
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 -3.0
Translation differences -11.0 -7.8
Retained earnings 115.0 124.6
Equity attributable to equity holders of the parent company 19 126.3 139.0
Hybrid bond 30.0 -
Total equity 156.3 139.0
Non-current liabilities
Interest-bearing liabilities 24 66.0 41.5
Non-interest-bearing liabilities 25 0.2 0.0
Lease liabilities 22, 24 9.6 11.8
Employee benefit obligations 20 1.5 1.7
Deferred tax liabilities 10 9.2 9.2
Provisions 21 - 0.1
Total non-current liabilities 86.5 64.3
Current liabilities
Interest-bearing liabilities 24 21.7 92.9
Trade and other non-interest-bearing payables 25 28.3 35.5
Lease liabilities 22, 24 4.3 4.6
Income tax payables 1.3 1.5
Provisions 21 1.8 0.3
Total current liabilities 57.4 134.8
Total shareholders’ equity and liabilities 300.2 338.1
12 | RAPALA VMC FINANCIAL STATEMENT 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million Note 2023 2022
Net profit for the period -7.3 3.7
Adjustments
Income taxes 10 0.6 5.1
Financial income and expenses 9 10.7 3.5
Reversal of non-cash items
Depreciation and impairments 11, 12, 27 11.6 11.3
Share based payments 7, 29 -0.3 0.2
Exchange rate differences 9 0.0 -0.6
Share of results in associated companies and joint ventures 13 1.3 2.3
Gains/losses on disposals of intangible, tangible assets and subsidiaries
Other items 4.0 1.1
Total adjustments 27.8 22.9
Financial items
Interest paid -8.6 -3.9
Interest received 2.4 0.1
Income taxes paid -1.9 -6.2
Other financial items, net -1.8 -0.9
Total Financial items -9.8 -10.8
Change in working capital
Change in receivables 10.4 8.8
Change in inventories 5.0 -13.1
Change in liabilities -5.5 -24.4
Total change in working capital 9.9 -28.7
Net cash generated from operating activities 20.6 -12.9
Net cash used in investing activities
Acquisition of intangible assets 11 -3.8 -1.1
Proceeds from sale of tangible assets 12 1.4 0.8
Acquisition of tangible assets 12 -5.7 -10.4
DQC International Corp acquisition 3 -1.4 -
Total net cash used in investing activities -9.5 -10.7
Net cash generated from financing activities
Dividends paid to parent company shareholders -1.6 -5.8
Purchase of own shares - -0.5
Non-current loan withdrawals 71.0 -
Current loan withdrawals 225.7 228.6
Non-current loan repayments -41.4 0.0
Current loan repayments -297.2 -190.6
Payments of lease liabilities -5.4 -5.3
Hybrid bond 29.3 -
Total net cash generated from financing activities -19.6 26.3
Change in cash and cash equivalents -8.5 2.7
Cash and cash equivalents at the beginning of the period 29.0 27.8
Foreign exchange rate effect -0.6 -1.4
Cash and cash equivalents at the end of the period 17 20.0 29.0
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 1 3
CHANGES IN LIABILITIES INCLUDED CASH FLOW FROM FINANCING ACTIVITIES
EUR million
Liabilities Jan 1, 2023 134.4
Drawdowns 296.7
Repayments -339.3
Other changes -4.0
Liabilities Dec 31, 2023 87.7
Drawdowns and repayments of loans in statement of cash flows
Drawdowns and repayments of loans -42.6
Derivatives and other realized foreign exchange on financial activities 0.7
Drawdowns and repayments of loans, net -41.9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Company
EUR million
Share
capital
Share
premium
fund
Fund for invested
non-
restricted equity
Own
shares
Translation
differences
Retained
earnings
Non-
controlling
interest
Hybrid
bond
Total
equity
Equity on Jan 1, 2022 3.6 16.7 4.9 -2.5 -9.6 126.2 139.3
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
Acquisition 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 4.9 -3.0 -7.8 124.6 139.0
Net profit/loss for the period -7.3 -7.3
Other comprehensive income*
Translation differences -3.1 -3.1
Defined benefit plans 0.2 0.2
Net investment hedges -0.1 -0.1
Total comprehensive income -3.2 -7.1
-10.3
Dividends paid -1.6 -1.6
DQC International Corp. transactions
with non-controlling interests
-0.3 -0.3
Issuance of hybrid bond 30.0 30.0
Hybrid bond expenses -0.5 -0.5
Other changes 0.0 0.0
Equity on Dec 31, 2023 3.6 16.7 4.9 -3.0 -11.0 115.0 30.0 156.3
* Net of tax
14 | RAPALA VMC FINANCIAL STATEMENT 2023
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 1 5
16 | RAPALA VMC FINANCIAL STATEMENT 2023
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 1 7
18 | RAPALA VMC FINANCIAL STATEMENT 2023
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 1 9
2
20 | RAPALA VMC FINANCIAL STATEMENT 2023
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 2 1
ACQUISITIONS
AND DIVESTMENTS
Acquisitions in 2023
The Group announced 13 July 2023 that Rapala VMC Corporation and
James Coble have reached an agreement in which Rapala VMC will in-
crease its ownership of DQC International, the owner of the 13 Fishing
rod and reel brand, to 60% of the Florida-based company while Coble
will retain a 40% share of the company. Previously the Group ownership
of the company was 49%. With the 11% stake acquisition the Group did
acquire control over the company, and the company has been consoli-
dated into the Group according to 98% ownership share based on the
purchase agreement.
The acquisition price of the 11% stake was one US dollar.
Rapala VMC will continue to invest in the marketing and product devel-
opment of the 13 Fishing brand with the intent of building brand loyalty
for 13 Fishing among retailers and consumers around the world, includ-
ing the United States. The amalgamation of 13 Fishing’s and Rapala’s
product ranges will maximize mutually beneficial distribution and opera-
tive synergies.
As a result of purchase price allocation Rapala VMC Group recognized
a goodwill of EUR 16.0 million. Main items driving fair value of net assets
being lower than purchase consideration were the loans between Rapala
VMC Group and DQC International valued approximately EUR 23 million.
The purchase price allocation is final. The following table summarizes
the consideration paid, provisional amounts for the fair value of assets
acquired and liabilities assumed as well as cash flow impact at the date
of acquisition. The net assets acquired are denominated in USD. EUR
values have been translated using foreign exchange rate prevailing at
the date of acquisition.
The acquired company has been consolidated in the Group financials
as of August 1, 2023 onwards.The acquired company has been consoli-
dated in the Group financials as of August 1, 2023 onwards. From the date
of acquisition, the acquired business has contributed EUR 4.8 million of
revenue to the Group and EUR -2.0 million of EBIT. If the acquisition had
occurred on January 1, 2023, management estimates that the combined
statement of income would show net sales of EUR 233.6 million and EBIT
of EUR -3.4 million.
The Group published 21 December 2023 that Rapala VMC Corpo-
ration has bought James Coble’s remaining 40% shareholding of DQC
International and now its ownership of the company is 100%. This later
acquisition has been accounted according to IFRS 10 as acquisition of
minority. The acquisition price was 350 000 US dollars.
The acquisition offers Rapala VMC the opportunity to consolidate 13
Fishing into Rapala USA and continue to strengthen the company’s mar-
ket position within the U.S. market. Rapala’s global manufacturing and
purchasing strength, backed with a proven U.S. distribution center and
supply chain, offers retailers world-class service they can count on. In
the U.S., Rapala VMC Corporation has one of the largest sales and dis-
tribution networks covering every corner of the U.S. market. Utilizing the
market expertise and positive relationships fostered by the Rapala USA
sales team will clearly place 13 Fishing in the market position it deserves.
Acquisitions in 2022
No acquisitions were carried out in 2022.
Divestments in 2023
No divestments were carried out in 2023.
Divestments in 2022
No divestments were carried out in 2022.
EUR Million
Non-current assets
Intangible assets 0.3
Tangible assets 1.8
Non-current assets total 2.1
Current assets
Inventories 4.3
Trade and other receivables 2.4
Cash and cash equivalents 1.1
Current assets total 7.7
Assets total 9.8
Non-current liabilities
Interest-bearing liabilities 23.1
Non-current liabilities total 23.1
Current liabilities
Interest-bearing liabilities 0.0
Trade payables 0.6
Other current liabilities 2.1
Current liabilities total 2.7
Liabilities total 25.8
Net assets -16.0
Consideration transferred 0.0
Unallocated Goodwill 16.0
Goodwill 14.9
Trademarks 1.6
Deferred tax liability 0.3
Cash flow effect
Consideration transferred 0.0
Cash and cash equivalents acquired 1.1
Cash flow effect total 1.1
3
22 | RAPALA VMC FINANCIAL STATEMENT 2023
6
8
4
5
7
9
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 2 3
10
24 | RAPALA VMC FINANCIAL STATEMENT 2023
11
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 2 5
26 | RAPALA VMC FINANCIAL STATEMENT 2023
12
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 2 7
13 14
15
28 | RAPALA VMC FINANCIAL STATEMENT 2023
NON-CURRENT ASSETS
HELD FOR SALE
EUR million 2023 2022
Non-current assets held for sale 1.9 -
Total 1.9 -
The Group classified two real estates as assets held for sale during 2023.
Part of the subsidiary KL-Teho Oy’s real estate and part of its build-
ings were classified as asset held for sale. The real estate is located in
Jyväskylä. The Group did announce on 2nd January 2024 that the Group’s
injection molding business in 22nd December 2023. The sold business
was located in the part of the real estate which is now been classified as
asset held for sale. The selling of the business and classification of the
assets as held for sale is a part of Rapala’s strategy to focus on core busi-
ness and release capital. The real estate was sold in 2nd January 2024.
The Group also classified as asset held for sale a real estate located in
Canada Oshawa Ontario. The real estate is approximately 12222 square
meters and the building area approximately 4635 square meters dividing
into office and warehouse. The buildings are built in 1980 and renovated
in 2004.
The classification of the real estate to asset held for sale is a part of
Rapala’s strategy to focus on core business and release capital. The
subsidiary located in the premises is finding a new location.
The real estate is expected to be sold during the first half of the year
2024.
Both real estates classified as asset held for sale have been included
into the reporting segment Group Products.
“Depreciation of property, plant and equipment ceases when the prop-
erty, plant and equipment is classified as held for sale in accordance
with IFRS 5 Non-current Assets Held for Sale and Discontinued Opera-
tions. Non-current assets held for sale are measured at the lower of
their carrying amount and fair value less costs to sell. Gains and loss-
es on disposals are determined as the difference between the sales
price and the carrying amount, and are included in other operating income
and expenses in the income statement”.
16
17
19
18
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 2 9
EMPLOYEE BENEFIT
OBLIGATIONS
Most of the Group´s pension plans are defined contribution plans. The
Group has defined benefit pension plans in France and in some Rest of
the World countries. The plans in Rest of the World countries are immate-
rial as a whole. The retirement benefits are determined based on salary
and period of employment. These obligations are unfunded. The Group
has no other post-employment benefit obligations. The pension security
of the personnel of the Group’s Finnish companies is arranged under
the Finnish statutory employee pension plan (TYEL) through an external
pension insurance company. Employee benefit obligations also include a
long-term profit-sharing payable to the employees in France and in some
Rest of the World countries.
EXPENSES RECOGNIZED IN THE INCOME STATEMENT
EUR million 2023 2022
Current service cost 0.1 0.2
Interest cost 0.0 0.0
Total 0.2 0.1
20
AMOUNTS RECOGNIZED IN THE BALANCE SHEET
EUR million 2023 2022
Rest of Europe 1.5 1.7
Rest of the World 0.0 0.0
Present value of unfunded obligations 1.5 1.7
BALANCE SHEET RECONCILIATION
EUR million 2023 2022
Obligations Jan 1 1.7 2.4
Current service cost 0.1 -0.2
Interest cost 0.0 0.0
Actuarial gains and losses
Changes in demographic assumptions 0.0 0.0
Changes in financial assumptions 0.0 -0.4
Changes in experience assumptions -0.1 0.1
Effect of any curtailments or settlements - -
Translation differences - -0.1
Obligations Dec 31 1.5 1.7
The following payments are expected contributions to be made in the future
years out of the defined benefit plan obligation.
EUR million 2023 2022
Within one year - -
1-5 years 0.4 0.3
5-10 years 1.1 1.0
Later than 10 years - 0.4
Total 1.5 1.7
ASSUMPTIONS
Rest of Europe
% 2023 2022
Discount rate 3.5 3.0
Future salary increase 3.0 1.6-3.5
Annual inflation rate 2.0 2.0
Rest of the World
% 2023 2022
Discount rate 2.7 2.6
Annual inflation rate 3.0 3.0
30 | RAPALA VMC FINANCIAL STATEMENT 2023
21
22
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 3 1
3)
32 | RAPALA VMC FINANCIAL STATEMENT 2023
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 3 3
34 | RAPALA VMC FINANCIAL STATEMENT 2023
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 3 5
23
1)
36 | RAPALA VMC FINANCIAL STATEMENT 2023
24
25
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 3 7
27
26
38 | RAPALA VMC FINANCIAL STATEMENT 2023
RELATED PARTY
TRANSACTIONS
The Group’s related parties include members of the Board, CEO, members of the Executive Committee, family members of the above-mentioned
individuals, entities controlled by the above-mentioned individuals, Rapala VMC Corporation´s subsidiaries, associated companies and joint ventures
and entities with significant influence. Subsidiaries owned directly or indirectly by the parent company as well as associates and foreign branches
are listed in note 32. Related party transactions between Group companies have been eliminated. Entities with significant influence are specified in
section ‘Shares and Shareholders’.
TRANSACTIONS AND BALANCES WITH RELATED PARTIES
EUR million
Sales and
other income
Purchases Paid rents
Other
expenses Receivables Payables
2023
DQC International Corp.
1)
0.2 0.0
Associated company Lanimo Oü 0.0 0.0 0.0
Entity with significant influence over the Group
2)
-0.3 0.0
Management 0.0 -0.1 0.0 0.7
2022
DQC International Corp.
1)
13.8 -1.3 16.1
Associated company Lanimo Oü 0.0 -0.1 0.0 0.0
Entity with significant influence over the Group
2)
-0.2 0.0 0.0
Management 0.0 -0.1 0.0 0.7
1)
Rapala VMC acquired control in July 2023 after the company consolidated as subsidiary.
2)
Lease agreement for the real estate for the consolidated operations in France and a service fee. Entity with significant influence is Viellard Migeon & Cie, who’s shareholding
alone and together with its subsidiary is presented in section ’Shares and Shareholders’.
EMPLOYEE BENEFITS FOR TOP MANAGEMENT
EUR million 2023 2022
Salaries and other employee benefits -2.8 -3.9
Post employment benefits -0.1 -0.1
Cost for
28
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 3 9
29
40 | RAPALA VMC FINANCIAL STATEMENT 2023
30
31
CONSOLIDATED FINANCIAL STATEMENTS, IFRS | 4 1
32
42 | RAPALA VMC FINANCIAL STATEMENT 2023
DEFINITIONS OF KEY FIGURES
Operating profit before depreciation and impair-
ments (EBITDA)
= Operating profit + depreciation and impairments
Items affecting comparability
= Change in mark-to-market valuations of operative currency derivatives +/- other items affecting comparability
Other items affecting comparability =
Restructuring costs + impairments +/- gains and losses on business combinations and disposals - insurance
compensations +/- other non-operational items
Comparable operating profit =
Operating profit +/- change in mark-to-market valuations of operative currency derivatives +/- other items affect-
ing comparability
Net interest-bearing debt = Total interest-bearing liabilities - total interest-bearing assets - cash and cash equivalents
Capital employed (average for the period) = Total equity (average for the period) + net interest-bearing debt (average for the period)
Working capital = Inventories + total non-interest-bearing assets - total non-interest-bearing liabilities
Total non-interest-bearing assets = Total assets - interest-bearing assets - intangible and tangible assets - assets classified as held-for-sale
Total non-interest-bearing liabilities = Total liabilities - interest-bearing liabilities
Net interest-bearing debt to EBITDA
=
Net interest-bearing debt
Operating profit before depreciation and impairments
Return on capital employed (ROCE), %
=
Operating profit x 100
Capital employed (average for the period)
Return on equity (ROE), %
=
Net profit for the period x 100
Total equity (average for the period)
Debt-to-equity ratio (Gearing), %
=
Net interest-bearing debt x 100
Total equity
Equity-to-assets ratio, %
=
Total equity x 100
Total shareholders' equity and liabilities - advances
received
Earnings per share, EUR
=
Net profit for the period attributable to the equity holders
of the parent Company - hybrid capital accrued unrecog-
nised interests after tax
Adjusted weighted average number of shares
Dividend per share, EUR
=
Dividend for the period
Adjusted number of shares at the end of the period
Dividend/earnings ratio, %
=
Dividend for the period x 100
Net profit for the period attributable to the equity holders
of the parent Company
Equity per share, EUR
=
Equity attributable to equity holders of the parent
Company
Adjusted number of shares at the end of the period
Effective dividend yield, %
=
Dividend per share x 100
Adjusted share price at the end of the period
Price/earnings ratio
=
Adjusted share price at the end of the period
Earnings per share
Average share price, EUR
=
EUR amount traded during the period
Adjusted number of shares traded during the period
Year-end market capitalization, EUR = Number of shares at the end of the period, exluding own shares x share price at the end of the period
Average number of personnel = Calculated as average of monthly end personnel amounts
PARENT COMPANY FINANCIAL STATEMENTS, FAS | 4 3
PARENT COMPANY FINANCIAL STATEMENTS, FAS
PARENT COMPANY INCOME STATEMENT
EUR Note 2023 2022
Net sales 2 34 235 099 44 983 810
Other operating income 3 1 081 220 3 029 498
Change in inventory of finished products and work in progress
177 122 963 452
Production for own use 133 871 217 524
Materials and services 5 -10 384 235 -24 493 548
Employee benefit expenses 6 -6 627 403 -10 239 703
Other operating expenses 4 -21 690 076 -10 926 588
Operating profit/loss before depreciation and impairments -3 074 402 3 534 444
Depreciation and impairments 7 -1 783 298 -1 528 262
Operating profit/loss -4 857 700 2 006 182
Financial income and expenses 8 -16 322 900 7 235 902
Profit/loss before appropriations and taxes -21 180 600 9 242 084
Appropriations 9 201 664 877 870
Income taxes 10 -85 722 -162 775
Net profit/loss for the period -21 064 658 9 957 179
44 | RAPALA VMC FINANCIAL STATEMENT 2023
PARENT COMPANY BALANCE SHEET
ASSETS
EUR Note 2023 2022
Non-current assets
Intangible assets 11 6 830 260 7 136 561
Tangible assets 12 6 017 523 6 220 030
Investments 13 111 427 982 121 163 657
Interest-bearing receivables 15 21 013 397 19 628 316
Non-interest-bearing receivables 15 594 392 1 436 022
Total non-current assets 145 883 554 155 584 586
Current assets
Inventories 14 9 308 458 7 513 303
Current financial assets
Interest-bearing 15 61 782 423 86 619 823
Non-interest-bearing 15 12 378 392 14 615 841
Cash and cash equivalents 4 911 462 12 443 811
Total current assets 88 380 734 121 192 777
Total assets 234 264 288 276 777 364
SHAREHOLDERS’ EQUITY AND LIABILITIES
EUR Note 2023 2022
Shareholders' equity
Share capital 3 552 160 3 552 160
Share premium fund 16 680 961 16 680 961
Fair value reserve
Fund for invested non-restricted equity 4 914 371 4 914 371
Own shares -2 957 222 -2 957 222
Retained earnings 52 359 299 43 957 119
Net profit/loss for the period -21 064 658 9 957 179
Total shareholders’ equity 16 53 484 912 76 104 568
Appropriations 180 125 124 788
Provisions 303 973 1 071 973
Non-current liabilities
Interest-bearing 96 125 734 41 000 000
Non-interest bearing 244 146 -
Total non-current liabilities 17 96 369 880 41 000 000
Current liabilities
Interest-bearing 75 357 078 146 328 352
Non-interest-bearing 8 568 321 12 147 682
Total current liabilities 17 83 925 399 158 476 034
Total shareholders’ equity and liabilities 234 264 288 276 777 364
PARENT COMPANY FINANCIAL STATEMENTS, FAS | 4 5
PARENT COMPANY STATEMENT OF CASH FLOWS
EUR thousand Note 2023 2022
Net profit for the period
-21 064 9 957
Adjustments
Income taxes
11 86 163
Financial income and expenses
8 16 322 -7 236
Reversal of non-cash items
Depreciation and impairments
7 1 783 1 528
Other items
-7 659 -2 386
Total adjustments
10 532 -7 931
Financial items
Interest paid
-10 703 -3 682
Interest received
5 811 2 131
Income taxes paid
-86 -18
Other financial items, net
-849 -339
Total financial items
-5 827 -1 908
Change in working capital
Change in receivables
2 550 675
Change in inventories
-2 176 -1 207
Change in liabilities
278 -6 720
Total change in working capital
652 -7 252
Net cash generated from operating activities
-15 707 -7 134
Net cash used in investing activities
Proceeds from disposal of intangible assets
11 30 -
Purchases of intangible assets
11 -2 101 -181
Proceeds from sale of tangible assets
12 54 617
Purchases of tangible assets
12 -690 -2 865
Acquisition of DQC International
319 -
Change in interest-bearing receivables
18 745 -19 308
Dividends received
910 2 848
Total net cash used in investing activities
17 267 -18 889
Net cash generated from financing activities
Dividends paid
-1 555 -5 831
Purchase of own shares
- -486
Hybrid bond
29 315 -
Loan withdrawals
298 089 220 465
Loan repayments
-337 678 -177 326
Group contibutions received
2 167 940
Total net cash generated from financing activities
-9 662 37 762
Change in cash and cash equivalents
-8 103 11 740
Cash and cash equivalents at the beginning of the period
12 444 2 399
Foreign exchange rate effect
570 -1 695
Cash and cash equivalents at the end of the period
4 911 12 444
46 | RAPALA VMC FINANCIAL STATEMENT 2023
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.
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
trading. 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
PARENT COMPANY FINANCIAL STATEMENTS, FAS | 4 7
NET SALES
EUR thousand 2023 2022
By destination
North America 20 059 28 068
Nordic 2 712 1 989
Rest of Europe 5 754 9 021
Rest of the World 5 710 5 906
Total 34 235 44 984
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 2023 2022
Rental income 22 25
Gains from sale of intangible and tangible assets - 7
Access fees 939 2 771
Other income 121 227
Total 1 081 3 029
OTHER OPERATING
EXPENSES
EUR thousand 2023 2022
Maintenance -892 -1 600
Selling and marketing expenses -748 -1 247
Traveling expenses -406 -532
IT and telecommunication -1 274 -1 262
Rents paid -783 -715
Auditors fees and services -273 -211
Freight -97 -128
Sales commissions -53 -89
Losses on sales of intangible and tangible assets -14 -
Currency derivatives 345 -465
Other expenses -17 495 -4 678
Total -21 690 -10 927
AUDITORS’ FEES AND SERVICES
EUR thousand 2023 2022
Audit fees -273 -211
Total -273 -211
MATERIALS AND
SERVICES
EUR thousand 2023 2022
Materials, goods and supplies
Purchases during the financial year -11 963 -24 839
Change in inventory 1 618 385
External services -39 -40
Total -10 384 -24 494
EMPLOYEE
BENEFIT EXPENSES
EUR thousand 2023 2022
Wages and salaries -5 225 -8 621
Pension costs -1 010 -1 296
Other personnel expenses -392 -323
Total -6 627 -10 240
Average personnel for the period 102 149
The remuneration of the Board of Directors amounted to EUR 282 thou-
sand (2022: EUR 296 thousand).
DEPRECIATION AND
IMPAIRMENTS
EUR thousand 2023 2022
Depreciation of intangible assets
Trademarks -844 -704
Other intangible assets -73 -28
Depreciation of tangible assets
Buildings -91 -84
Machinery and equipment -640 -628
Other tangible assets -135 -84
Total -1 783 -1 528
2
3
4
5
6
7
48 | RAPALA VMC FINANCIAL STATEMENT 2023
INCOME
TAXES
INCOME TAXES IN THE INCOME STATEMENT
EUR thousand 2023 2022
Income taxes -86 -125
Taxes from previous financial years - -38
Total -86 -163
Deferred tax assets and liabilities of the parent company are not pre-
sented in the parent company’s balance sheet.
INTANGIBLE
ASSETS
2023
Trade-
marks
Other
intangible
assets TotalEUR thousand
Acquisition cost Jan 1 9 202 2 557 11 759
Additions 173 173
Reclassifications 437 437
Acquisition cost Dec 31 9 202 3 168 12 370
Accumulated amortization Jan 1 -2 179 -2 443 -4 622
Amortization during the period -828 -90 -917
Accumulated amortization Dec 31 -3 007 -2 532 -5 540
Book value Jan 1 7 022 115 7 137
Book value Dec 31 6 195 635 6 830
2022
Trade-
marks
Other
intangible
assets Total
EUR 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
FINANCIAL INCOME
AND EXPENSES
EUR thousand 2023 2022
Dividend income 1 877 3 057
Foreign exchange gains 2 877 3 371
Foreign exchange losses -3 120 -3 214
Impairment losses
Investments in Group companies -10 054 -
Current loan receivables -1 719 -
Interest and other financial income
Interest income 7 182 4 059
Other financial income - 5 597
Interest and other financial expenses
Interest expenses -10 027 -3 969
Other financial expenses -3 338 -1 665
Total -16 322 7 236
FINANCIAL INCOME AND
EXPENSES FROM AND TO SUBSIDIARIES
EUR thousand 2023 2022
Dividend income from subsidiaries 1 877 3 057
Impairment losses
Investments in Group companies -10 054 -
Current loan receivables -1 719 -
Interest and other financial income
Interest income 6 741 3 687
Interest and other financial expenses
Interest expenses -1 442 -476
Total -4 597 6 268
TRANSLATION DIFFERENCES RECOGNIZED IN THE
INCOME STATEMENT
EUR thousand 2023 2022
Translation differences recognized in net sales 245 1 272
Translation differences included in purchases and other
expenses 37 52
Foreign exchange gains and losses in financial income
and expenses -244 157
Total 38 1 481
EXTRAORDINARY
ITEMS
EUR thousand 2023 2022
Change in depreciation difference -55 28
Group contribution 257 850
Total 202 878
CHANGE IN DEPRECIATION DIFFERENCE
EUR thousand 2023 2022
Intangible assets -54 -142
Buildings -7 -219
Machinery and equipment 6 389
Total -55 28
8
9
10
11
PARENT COMPANY FINANCIAL STATEMENTS, FAS | 4 9
TANGIBLE
ASSETS
2023
Land Buildings
Machinery and
equipment
Other tangible
assets
Advance pay-
ments and
construction in
progress TotalEUR thousand
Acquisition cost Jan 1 106 5 169 21 718 2 375 1 824 31 192
Additions 251 1 555 1 806
Disposals -375 -45 -598 -1 017
Reclassifications 855 -1 292 -437
Acquisition cost Dec 31 106 5 169 22 449 2 331 1 489 31 544
Accumulated depreciation Jan 1 -4 435 -18 946 -1 591 -24 972
Disposals 303 8 311
Depreciation during the period -91 -640 -135 -866
Accumulated depreciation Dec 31 -4 526 -19 282 -1 719 -25 527
Book value Jan 1 106 734 2 772 784 1 824 6 220
Book value Dec 31 106 643 3 167 612 1 489 6 017
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
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
INVESTMENTS
2023
EUR thousand
Shareholdings in
subsidiaries
Shares in
associates Other shares Total
Book value Jan 1 116 595 4 387 181 121 164
Additions 4 706 4 706
Disposals -4 387 -4 387
Impairment -10 054
Book value Dec 31 111 247 181 111 428
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
12
13
50 | RAPALA VMC FINANCIAL STATEMENT 2023
INVENTORIES
EUR thousand 2023 2022
Raw material 3 394 1 776
Work in progress 2 756 3 060
Finished products 3 159 2 677
Total 9 308 7 513
RECEIVABLES
EUR thousand 2023 2022
Non-current receivables
Interest-bearing
Loan receivables 21 013 19 628
Non-interest-bearing
Derivatives - 1 064
Other receivables 593 372
Other receivables
Interest-bearing
Loan receivables 61 782 86 620
Non-interest-bearing
Trade receivables 3 396 5 691
Prepaid expenses and accrued income 2 802 4 194
Derivatives 675 144
Other receivables 5 505 4 587
Total 95 767 122 300
RECEIVABLES FROM SUBSIDIARIES
EUR thousand 2023 2022
Non-current receivables
Interest-bearing
Loan receivables 20 326 18 916
Interest-bearing
Loan receivables 61 782 86 620
Non-interest-bearing
Trade receivables 3 396 5 686
Prepaid expenses and accrued income 1 972 3 358
Other receivables 5 503 4 587
Total 92 979 119 167
SHAREHOLDERS’
EQUITY
EUR thousand 2023 2022
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 -2 957 -2 471
Purchase of own shares - -486
Own shares Dec 31 -2 957 -2 957
Retained earnings Jan 1 53 914 49 789
Dividends paid -1 555 -5 831
Retained earnings Dec 31 52 359 43 958
Net profit/loss for the period -21 065 9 957
Total shareholders’ equity 53 485 76 105
DISTRIBUTABLE FUNDS
EUR 2023 2022
Fund for invested non-restricted equity 4 914 371 4 914 371
Retained earnings 52 359 299 43 957 119
Own shares -2 957 222 -2 957 222
Net profit/loss for the period -21 064 658 9 957 179
Total distributable funds 33 251 790 55 871 447
PARENT COMPANY SHARE CAPITAL
2023 2022
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
PARENT COMPANY FINANCIAL STATEMENTS, FAS | 5 1
LIABILITIES
EUR thousand 2023 2022
Non-current liabilities
Non-interest-bearing
Derivatives 244 -
Interest-bearing
Loans from financial institutions 66 126 41 000
Hybrid loan 30 000 -
Current liabilities
Interest-bearing
Loans from financial institutions 4 574 -
Commercial paper program 13 500 43 500
Other current liabilities 57 283 102 828
Non-interest-bearing
Derivatives 52 87
Advances received 3 48
Trade payables 6 398 5 074
Accrued liabilities and deferred income 2 115 6 940
Total 180 295 199 477
LIABILITIES TO SUBSIDIARIES
EUR thousand 2023 2022
Current liabilities
Interest-bearing
Other current liabilities 54 284 53 828
Non-interest-bearing
Trade payables 5 100 4 136
Accrued liabilities and deferred income 4 2 109
Total 59 388 60 073
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 2023 2022
Within one year 929 937
1-3 years 1 503 1 443
3-5 years 166 736
Total 2 598 3 116
COMMITMENTS AND
CONTINGENCIES
COMMITMENTS
EUR thousand 2023 2022
On own behalf and on behalf of subsidiaries
Guarantees 1 449 2 107
Total 1 449 2 107
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 2023 2022
Currency derivatives with bank
Fair value 237 57
Nominal value 30 639 18 128
Interest rate derivatives
Fair value 632 1 064
Nominal value 35 000 35 000
In 2023, changes in fair value of currency derivatives had an income
statement effect of EUR 180 thousand (2022: EUR 180 thousand) and
interest rate derivatives EUR -921 thousand (2022: EUR 1 035 thousand).
17 18
19
20
52 | RAPALA VMC FINANCIAL STATEMENT 2023
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 2023.
The focus of Group level risk management in 2023 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 environmental
regulations by taking steps to reduce environmental impacts of its opera-
tions and products. 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
the biggest single customer represents moderate share of the Group’s
net sales. The Group is not largely engaged in direct consumer retail-
RISK MANAGEMENT | 5 3
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 2023 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 dependencies between the Group’s manufacturing units,
which could cause supply challenges e.g. in case of fire or other haz-
ard. 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.
54 | RAPALA VMC FINANCIAL STATEMENT 2023
SHARES AND SHAREHOLDERS
Rapala VMC Corporation’s shares have been traded on the Nasdaq Hel-
sinki since 1998. In 2023, the shares traded between EUR 5.14 and 2.53
with an average price of EUR 3.56.
SHARES AND VOTING RIGHTS
On December 31, 2023, 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 2023.
BOARD’S AUTHORIZATIONS
The AGM authorised the Board of Directors to resolve in accordance with
the proposal of the Board of Directors on the issuance of a maximum of
3,900,000 shares through a share issue or by issuing options and other
special rights entitling to shares pursuant to chapter 10, section 1 of the
Finnish Limited Liability Companies Act in one or several tranches. The
proposed maximum number of shares corresponds to 10% of all shares
in the Company. The authorisation can also be used for incentive arrange-
ments for the Company’s management and key persons, however, no
more than 900,000 shares in total may be granted for this purpose. The
authorisation covers both the issuance of new shares and the transfer
of treasury shares held by the Company, and the issuance may be car-
ried out with or without payment. Under the authorisation, the Board of
Directors may issue shares or options and other special rights entitling
to shares also otherwise than in proportion to the shareholdings of the
shareholders (directed share issue). The Board of Directors is entitled
to resolve on all terms and conditions of share issues and the issue of
option rights and other special rights entitling to shares. The authorisa-
tion is valid until 29 September 2024.
The AGM authorised the Board of Directors to resolve in accordance
with the proposal of the Board of Directors to repurchase a maximum
of 2,000,000 the Company’s own shares by using the Company’s un-
restricted equity in one or several tranches. The proposed maximum
number of shares corresponds to approximately 5.13% of the Company’s
total number of shares. 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 or cancelled, for example. The shares may be repur-
chased otherwise than in proportion 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 authorisation is valid until 29 September 2024.
OWN SHARES
At the end of the year, the company held 123 891 own shares, represent-
ing 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, 2023, the members of the Board and the Executive Com-
mittee held directly a total of 134 862 company shares, corresponding to
0.3% of all shares and voting rights. Details of management shareholdings
are given on page 56-57.
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 2023, was EUR 3.00. The highest price in 2023
was EUR 5.14, the lowest price EUR 2.53 and the average price EUR 3.56. A
total of 2 998 795 company’s shares were traded in 2023. This represents
7.7% of all shares on December 31, 2023.
At the end of 2023, the market capitalization of all outstanding shares,
excluding own shares, was EUR 116.6 million. Earnings per share (basic)
were EUR -0.20 (EUR 0.10 in 2022). For more share related key figures
see page 9.
DIVIDEND
The Board proposes to the AGM that no dividend will be paid for the
financial year 2023.
SHARES AND SHAREHOLDERS | 5 5
PRINCIPAL SHAREHOLDERS ON DECEMBER 31, 2023
Shareholders Number of shares %
Viellard Migeon & Cie * 16 756 627 43.0
Nordea Funds 4 809 427 12.3
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
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 14 016 736 35.9
Total number of shares 39 000 000 100.0
SHAREHOLDERS BY CATEGORY ON DECEMBER 31, 2023
Shareholder category Number of shares %
Private and public corporations 762 258 2.0
Financial and insurance companies 5 617 309 14.4
Public institutions 1 737 307 4.5
Non-profit organizations 96 744 0.2
Individuals 2 917 636 7.5
International shareholders 17 871 160 45.8
Administrative registrations 9 997 586 25.6
Total 39 000 000 100.0
DISTRIBUTION OF SHAREHOLDING ON DECEMBER 31, 2023
Number of shares
Number of
shareholders % Total shares %
1 - 100 3 312 51.1 136 320 0.3
101 -500 2 083 32.1 536 770 1.4
501 - 1 000 553 8.5 435 732 1.1
1 001 - 10 000 466 7.2 1 234 933 3.2
10 001 - 1 000 000 68 1.0 4 451 968 11.4
1 000 001 - 4 0.1 32 204 277 82.6
Total 6 486 100 39 000 000 100
* Viellard Migeon & Cie’s holds together with its subsidiary De Pruines Industries
16 861 937 shares, representing 43.2% of total number and the total voting rights of
shares.Number of shares includes 123 891 own shares held by the parent company.
SHARE PRICE IN 2023, %
SHARE PRICE DEVELOPMENT IN 2019-2023, EUR
Rapala VMC Corp
OMX Nordic Mid Cap
Rapala VMC Corp
120
110
100
90
80
70
60
50
40
12/22 03/23 06/23 09/23 12/23
11,0
10,0
9,0
8,0
7,0
6,0
5,0
4,0
3,0
2,0
12/19 12/20 12/21 12/22 12/23
56 | RAPALA VMC FINANCIAL STATEMENT 2023
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 31.12.2023 are:
Louis d’Alançon
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
Julia Aubertin
Board Member since 2014
M.Sc. (EDHEC)
Year of birth: 1979
Shareholding and options *: -
Vesa Luhtanen
Board Member since 2020
Bachelor of Science in Business Administration
Year of birth: 1961
Shareholding and options *: -
Alexander Rosenlew
Board Member since 2023
Certificate in Global Management, Insead
Master of Science in Management (Leadership MBA)
Master of Science in Economics
Year of birth: 1971
Shareholding and options *: 6 095
BOARD AND MANAGEMENT | 5 7
EXECUTIVE COMMITTEE
The President and Chief Executive Officer is appointed by the Board. Rapala VMC Corporation announced the change of President and Chief Executive
Officer on April 4, 2023. Lars Ollberg succeeded Louis d’Alançon on May 1, 2023. Louis d’Alançon acted as the President and Chief Executive Officer
since November 16, 2022. At the same time Rapala VMC Corporation announced the appointment of Cyrille Viellard as Deputy Chief Executive Officer.
Cyrille Viellard started in this position on May 1, 2023.
The members of the Executive Committee and their shareholdings on 31.12.2023 are:
* Shares and share-based rights of each member and corporations over which he/she exercises control in the company and its group companies.
Jean-Philippe Nicolle
Chief Operating Officer, Business Performance,
Finance Controlling and Internal Auditing, since January 1, 2024
Chief Financial Officer between June 21, 2023 and January 1, 2024
Executive Vice President,
Head of European Distribution until June 21, 2023
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 9.9.2020
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*: -
Lars Ollberg
President and Chief Executive Officer since May 1, 2023
Vocational Qualification in Business, Malmi Commercial School
Year of birth 1956
Shareholding*: -
Cyrille Viellard
Debuty Chief Executive Officer since May 1, 2023
Executive Vice President, and President of VMC Peche
Executive Committee member since 2015
MBA, ESSEC
Year of birth: 1977
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
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
Victor Skvortsov resignation from the Executive Committee was announced on April 4, 2023. Jan-Elof Cavander departed from the Executive Commit-
tee on June 21, 2023. On December 8, 2023 Rapala VMC Corporation announced several nominations to the Executive Committee effective January
1, 2024 as follows: Miikka Tarna as Chief Financial Officer, Tuomas Akkanen as Executive Vice President, Head of Group Supply Chain and Winter
Sports, Päivi Ohvo as Executive Vice President, Human Resources, Tuomo Leino as Executive Vice President, General Counsel and Joni Tuominen as
Executive Vice President, Global Business Development and IT.
58 | RAPALA VMC FINANCIAL STATEMENT 2023
SIGNATURES FOR THE REPORT OF BOARD
OF DIRECTORS AND FINANCIAL STATEMENTS
THE AUDITOR’S NOTE
Helsinki, March 7, 2024
Jorma Kasslin
Louis d’Alançon,
Chairman of the Board
Alexander Rosenlew
Julia AubertinVesa Luhtanen
Emmanuel Viellard
Mikko Järventausta
Authorized Public Accountant
A report on the audit performed has been issued today.
Helsinki, March 20, 2024
Ernst & Young Oy
Authorized Public Accountant Firm
Lars Ollberg, President and CEO
AUDITOR’S REPORT | 5 9
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,
2023. 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 material
accounting policy information, 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 , financial performance and cash
flows in accordance with IFRS Accounting Standards 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 man-
agement 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).
60 | RAPALA VMC FINANCIAL STATEMENT 2023
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 IFRS Accounting Standards as adopted by
the EU, and of financial statements that give a true and fair view in ac-
cordance 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 misstate-
ment, 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:
■ Familiarizing ourselves with the agreements and calculations
prepared by the management to support the additions of goodwill
and intangible assets during the year as well as related accounting
entries.
■ 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.
■ Focusing on how much recoverable amounts exceeded the carrying
amounts of cash-generating units, and whether any reasonably pos-
sible change in assumptions could cause the carrying amount to
exceed its recoverable amount.
■ Assessing the adequacy of the Group’s disclosures about goodwill
and intangible assets.
At the balance sheet date, the value of goodwill and intangibles amounted
to 101,8 M€ (84,7 M€) representing 33,9 % (25,1 %) 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 16
(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 94,8
M€ and 7,3 M€, respectively (net 87,5 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.
■ 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 29 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.
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, we conclude that there is a
material misstatement of the other information, we are required to report
that fact. We have nothing to report in this regard.
Helsinki, March 20, 2024
ERNST & YOUNG OY
Authorized Public Accountant Firm
Mikko Järventausta
Authorized Public Accountant
