Rapala posts significant drop in 2022 sales and profit

Rapala VMC Corporation has reported a significant drop in both full year sales and profits for 2022 compared to the previous year.

The Finnish company blamed a sharp market contraction post-COVID, strong destocking at retail level and a cold and prolonged winter in the Northern Hemisphere for the decline.

It also points to high inflation, low consumer confidence and the war in Ukraine as being detrimental to business performance in a year that it parted company with CEO,Nicolas Warchalowski only 32 months after his appointment.

As a result, net sales in 2022 decreased by 7% to €274.4m and comparable operating profit fell 53% to €15.3m.

Rapala’s figures for the second half of the year, reported at the same time as the full year results, showed net sales down 6% to €126m (down 13% with comparable exchange rates), while comparable operating profit was a negative at -€0.2m.

Looking ahead, Rapala warned that full year operating profit for 2023 will be ‘strongly impacted by continued destocking at retail and poor weather in the ongoing winter season’.

However, there were highlights in 2022, said President and CEO Louis d’Alançon. These included the successful launch of Okuma rods and reels in Europe, which exceeded internal sales targets for the first full year. Inventory was also reduced by €17.8m in the second half of the year.

Northern European warehousing was successfully centralised in Pärnu, Estonia, and new a production capacity was established in Estonia as production was ramped down in Russia.

Warehousing was also consolidated in the US from two locations to one site in Eagan, Minnesota, to drive operational efficiencies.

A high focus remains on product development and the future product pipeline is strong for the years ahead, says Rapala.