Rapala VMC’s strong profit growth comes with a warning

Rapala VMC has reported strong profit growth for the first half of this year, driven by a year-on-year net sales increase of 36% and despite the company exiting some third party categories.

President and CEO Nicolas Warchalowski said: “We experienced a record first half of the year in 2021 following high demand in the fishing tackle industry and a strong winter season, as well as significantly faster-than-expected strategy implementation. The fishing industry has experienced a strong increase in fishing participation around the world, both from new anglers and returnees. This has been seen in crowded shores and docks as well as half-empty shelves in fishing stores in the spring and early summer.”

Rapala’s net sales for the half-year were €159.6m, compared to €117m the previous year. Comparable operating profit was €26.3m, with the expectation that 2021 full-year comparable operating profit will ‘increase significantly’.

The group’s business plan is progressing at a rapid pace, said the CEO. “I am extremely satisfied on the tremendous work by our team for being able to execute our One Rapala VMC Strategy at an amazing speed. As a result we are well ahead of our initial timelines.”

However, Warchalowski noted that consumers have begun returning to other pre-pandemic recreational activities and this could slow down future sales.

“In Europe, we currently see decreasing retail store activity, which will likely impact pre-orders for 2022. The general market sentiment in the overall industry is also expected to cool down significantly in North America, with a short delay compared to Europe. 

“However, private investments into fishing boats and global trends in outdoor and sportfishing are expected to take the fishing market to a somewhat higher level than prior to the pandemic.”

• Rapala VMC has appointed Tina Rolig as Executive Vice President and a member of the Executive Committee. Rolig, who will head up Group Human Resources, has been HR Director at Tamro Oyj in the healthcare market for the past three years.