Rapala VMC turnaround strategy yields positive results
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Rapala VMC Corporation’s strategy to turn around the fortunes of the business produced positive results in the first half of the year, with an increase in sales and profitability.
The Finnish-based fishing tackle giant reported sales of €142.5 million, a 1% improvement on the €140.9 million achieved during the same period last year. Operating profit was up 39% to €15.3 million (2017: €11 million).
President and CEO Jussi Ristimäki said: “The first six months of the year developed well as our net sales and profitability grew from last year. The underlying consumer demand for our products continued to be strong in North America and after an exceptional year in 2017, our sales to retail grew strongly. We were particularly satisfied that Rapala lures was the biggest growth category.
“Our profitability increase from last year was driven by strong sales in North America and successful performance improvement initiatives in France and Southeast Asia. Furthermore, the production efficiency of our European lure manufacturing units contributed positively to the improvement in profitability. However, the Indonesian lure operation continued to have a negative profitability impact.
“Execution of our strategy of improving profitability, lightening the balance sheet and improving operational performance is progressing well. Ongoing lean projects and supply chain management initiatives continue to yield results. Consequently, our inventories decreased organically from last year. The strategic gradual shift from traditional marketing to digital marketing channels also progressed.
“We successfully opened a content driven Rapala e-commerce site in Europe in May to enhance brand experience and to increase customer service. One of our strategic key priorities is to execute a profitability turnaround for the Indonesian lure operations. We have taken new actions during the year and we are determined to improve its performance.”