US growth boosts Rapala VMC Corporation
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Improved sales in its biggest market was the highlight of the third quarter for Rapala VMC Corporation.
Despite reporting a 7% decline in net sales of €202.5 million (2015: €218.6 million), the Finnish giant said that the positive highlight was its performance in the USA. New President and CEO, Jussi Ristimäki, said: “The North American market has been in some turmoil this year and a merger between two of our biggest customers was finally announced in early October. However, sales in the third quarter were up on the same period in 2015.”
Ristimäki, who took over the top job at the Helsinki-based group in September following a shake-up of the board, added that sales remain behind last year as trading in the third quarter remained ‘challenging’.
As well as improvement in the US, sales have also been showing positive signs in Spain, South Africa and Chile, supported by expansion into new business segments, Ristimäki told investors.
However, he added that the struggling market situation in Russia continued to strongly affect sales as did the situation in France, where the market was burdened by tightened competition and reserved consumer market sentiment.
“Several markets both in Europe and Asia witnessed changes and uncertainties, causing retailers to be careful with their purchasing.
“Favourable late summer and early fall weather was good for summer fishing tackle sales, but not enough to offset slower sales before that. Last winter’s poor performance left a lot of fishing and winter sports stock at retail which has had a negative effect on pre-sales.”
Ristimäki added that following the changes to the senior management team at Rapala in the third quarter, the key task facing it is to turn the company’s financial trend, which has been downward in the last two years.
“We are taking a fresh look at strategy and working on a plan of actions which are needed to get us back on a growth track, restore profitability and improve capital efficiency,” he said.
“We are confident that with our strong brand portfolio, truly global presence through our own distribution network and solid manufacturing platform for our core products that we have all the necessary building blocks needed to succeed in the future.”,