Half Year 2026 Rapala VMC Oyj Earnings Call
Speaker #1: Surel, please go ahead.
[Company Representative] (Rapala VMC): Cyril, please go ahead.
[Company Representative] (Rapala VMC): Cyril, please go ahead.
Speaker #2: Thank you very much to everyone for attending our call today for our first half 2026 results. What I can say, as an opening word, is that the implementation of our recovery plan is proceeding as planned.
Cyril Viellard: Thank you very much to all for attending our call today for our H1 2026 results. What I can say as an opening word is the implementation of our recovery plan is proceeding as planned. I would say we are slightly ahead with North American replenishment demand that came out strong in Q2 for our new items as well as existing range. In comparable currencies, North America grew 19% above previous year. This has compensated a slower activity in other parts of the world where we have contrasted situations. I would say droughts in some key European countries that you have seen in the news have hit our sales, whereas we have had favorable developments in Northern Europe. Overall, Rapala VMC group growth landed at 11% in comparable currencies.
Cyril Viellard: Thank you very much to all for attending our call today for our H1 2026 results. What I can say as an opening word is the implementation of our recovery plan is proceeding as planned. I would say we are slightly ahead with North American replenishment demand that came out strong in Q2 for our new items as well as existing range.
Speaker #2: I would say we are slightly ahead with North American replenishment demand. That came out strong in the second quarter, for our new items as well as the existing range.
Speaker #2: In comparable currencies, North America grew 19% above the previous year. This has compensated for slower activity in other parts of the world, where we have contrasting situations. I would say draws in some key European countries that you have seen in the news have hit our sales, whereas we have had favorable developments in Northern Europe.
Cyril Viellard: In comparable currencies, North America grew 19% above previous year. This has compensated a slower activity in other parts of the world where we have contrasted situations. I would say droughts in some key European countries that you have seen in the news have hit our sales, whereas we have had favorable developments in Northern Europe. Overall, Rapala VMC group growth landed at 11% in comparable currencies.
Speaker #2: Overall, Rapala VMC Group growth landed at 11% in comparable currencies. Growth and continued cost control have flowed directly into EBITDA and comparable EBIT, which increased by almost €5 million, from €8.6 million to €13.5 million.
Cyril Viellard: Growth and continued cost control have flowed directly into EBITDA and comparable EBIT, which increased by almost EUR 5 million from EUR 8.6 to EUR 13.5 million. Growth was led with controlled inventories and investments, leading to above EUR 60 million of cash flow for H1, compared to EUR 6 million in H1 2025. Our innovation pipeline is strong, and our brand strategies are bringing clarity, focus, and long-term projections. We will increase in H2 gradually our investments in marketing to support our brands, to secure all our innovative products are well supported for the millions of passionate anglers we serve worldwide. We are still navigating in uncertain waters with fluctuating tariffs and an unfavorable geopolitical situation that everybody knows.
Cyril Viellard: Growth and continued cost control have flowed directly into EBITDA and comparable EBIT, which increased by almost EUR 5 million from EUR 8.6 to EUR 13.5 million. Growth was led with controlled inventories and investments, leading to above EUR 60 million of cash flow for H1, compared to EUR 6 million in H1 2025. Our innovation pipeline is strong, and our brand strategies are bringing clarity, focus, and long-term projections. We will increase in H2 gradually our investments in marketing to support our brands, to secure all our innovative products are well supported for the millions of passionate anglers we serve worldwide. We are still navigating in uncertain waters with fluctuating tariffs and an unfavorable geopolitical situation that everybody knows.
Speaker #2: Growth was led with controlled inventories and investments, leading to above €16 million of cash flow for the first half compared to €6 million in the first half of 2025.
Speaker #2: Our innovation pipeline is strong, and our brand strategies are bringing clarity, focus, and long-term projections. We will gradually increase our investments in marketing in the second half to support our brands, to ensure all our innovative products are well supported for the millions of passionate anglers we serve worldwide.
Speaker #2: We are still navigating in uncertain waters, with fluctuating tariffs and an unfavorable geopolitical situation that everybody knows. Nevertheless, as we indicated in our revised issued guidance last week, we expect today our comparable operating profit to be in the range of €12 million to €14 million.
Cyril Viellard: Nevertheless, as we indicated in our reviewed issued guidance last week, we expect today our comparable operating profit to be in the range of EUR 12 to EUR 14 million. Miikka will guide you now in more details in our sales and financial performance. It gives me the opportunity, closing my opening words, to thank the global Rapala VMC team for the great results of this H1. Miikka, it's yours.
Cyril Viellard: Nevertheless, as we indicated in our reviewed issued guidance last week, we expect today our comparable operating profit to be in the range of EUR 12 to EUR 14 million. Miikka will guide you now in more details in our sales and financial performance. It gives me the opportunity, closing my opening words, to thank the global Rapala VMC team for the great results of this H1. Miikka, it's yours.
Speaker #2: Mika will guide you now in more detail in our sales and financial performance, and it gives me the opportunity, in closing my opening words, to thank the global Rapala VMC team for the great results of this first half.
Speaker #2: Mika, the floor is yours.
Speaker #1: Thank you, Surel. So, let's walk through the key points of the first half of the year. Sales landed at €134.8 million for the first half of the year. In comparable currencies, we were up 11% from last year.
Miikka Tarna: Thank you, Cyril. Sales landed at EUR 134.8 million for the H1. In comparable currencies, we were up 18% from last year. Foreign exchange rates had slight or actually even a significant negative impact, so our reported sales were up by 7% from last year. Operating environment was affected continuously with these geopolitical instability and tariff volatility. Despite these macroeconomic headwinds, we showed very good resilience in North American markets. Consumer demand improved from last year, and the demand, the pull was strong. This, of course, then compensated for the rather slow European market. European market was a little bit subdued. Consumer demand was dampened by the drought conditions in certain parts of Europe.
Miikka Tarna: Thank you, Cyril. Sales landed at EUR 134.8 million for the H1. In comparable currencies, we were up 18% from last year. Foreign exchange rates had slight or actually even a significant negative impact, so our reported sales were up by 7% from last year. Operating environment was affected continuously with these geopolitical instability and tariff volatility. Despite these macroeconomic headwinds, we showed very good resilience in North American markets. Consumer demand improved from last year, and the demand, the pull was strong. This, of course, then compensated for the rather slow European market. European market was a little bit subdued. Consumer demand was dampened by the drought conditions in certain parts of Europe.
Speaker #1: Foreign exchange rates had a slight—or actually even a significant—negative impact. So, our reported sales were up by 7% from last year. And the operating environment was continuously affected by geopolitical instability and tariff volatility.
Speaker #1: Despite these macroeconomic headwinds, we showed very good resilience in the North American market. Consumer demand improved from last year, and the demand in the pool was strong.
Speaker #1: And this, of course, then compensated for the rather slow European market. The European market was a little bit subdued; consumer demand was dampened by the drought conditions in certain parts of Europe.
Speaker #1: If we move forward and look a little bit closer at the regions and the markets, we can see here that North America is almost 60% of our global sales.
Miikka Tarna: If we move forward and look a little bit closer to the regions and the markets, we can see here that North America is almost 60% of our global sales. We have shown strong growth in the North American market for the last couple of years. We are up in comparable currencies 19% year over year in North America. Q1 and Q2 were rather similar growth, so Q2 comparable sales increased by 18%. We had very good load in deliveries in Q1, and this continued with the consumer pull pulling the products out of the shelves. Our replenishment sales remained very strong in Q2 of the year. Here from the product categories and brands, it is noteworthy to say that the flagship Rapala brand led the sales growth, but we were happy to see that the growth remained very broad-based across all of our key brands.
Miikka Tarna: If we move forward and look a little bit closer to the regions and the markets, we can see here that North America is almost 60% of our global sales. We have shown strong growth in the North American market for the last couple of years. We are up in comparable currencies 19% year over year in North America. Q1 and Q2 were rather similar growth, so Q2 comparable sales increased by 18%. We had very good load in deliveries in Q1, and this continued with the consumer pull pulling the products out of the shelves. Our replenishment sales remained very strong in Q2 of the year. Here from the product categories and brands, it is noteworthy to say that the flagship Rapala brand led the sales growth, but we were happy to see that the growth remained very broad-based across all of our key brands.
Speaker #1: And we have shown strong growth in the North American market for the last couple of years. So we are up, in comparable currencies, 19% year over year in North America.
Speaker #1: In Q2, Q1 and Q2 were rather similar in growth, so Q2 comparable sales increased by 18%. We had very good load-in deliveries in Q1, and this continued with the consumer pool pulling the products out of the shelves. Our replenishment sales remained very strong in Q2 of the year.
Speaker #1: Regarding categories and brands, it's noteworthy to say that the flagship Rapala brand led the sales growth, but we were happy to see that growth remained very broad-based across all of our key brands.
Speaker #1: In the European markets, we had a good start for the year. We were up in Q1. We had good load-in orders. The season looked to be better than the previous season, but then the heatwaves and drought conditions came in, and actually, in Q2 our sales decreased by 4% in comparable FX.
Miikka Tarna: In the European markets, we had a good start for the year. We were up in Q1. We had good load in orders. The season looked to be better as previous season, but then the heat waves and the drought conditions came in, and actually in Q2, our sales decreased by 4% in comparable FX. Here, the Nordic countries were not that affected by the heat wave and the drought conditions. In Nordic countries, we were able to show a little bit better growth compared to the continental European markets affected by the heat wave. Here as well, our strategy implementation continues. Key Rapala and Okuma brands exceeded prior year level, while sales in some other brands, which have greater exposure to the continental European markets affected by the weather conditions, showed a little bit decreased sales.
Miikka Tarna: In the European markets, we had a good start for the year. We were up in Q1. We had good load in orders. The season looked to be better as previous season, but then the heat waves and the drought conditions came in, and actually in Q2, our sales decreased by 4% in comparable FX. Here, the Nordic countries were not that affected by the heat wave and the drought conditions. In Nordic countries, we were able to show a little bit better growth compared to the continental European markets affected by the heat wave. Here as well, our strategy implementation continues. Key Rapala and Okuma brands exceeded prior year level, while sales in some other brands, which have greater exposure to the continental European markets affected by the weather conditions, showed a little bit decreased sales.
Speaker #1: Here, the Nordic countries were not as affected by the heat wave and the drought conditions. In the Nordic countries, we were able to show a little bit better growth compared to the continental European markets that were affected by the heat wave.
Speaker #1: And here as well, our strategy implementation continues, so key Rapala and Okuma brands exceeded prior year level. While sales in some other brands, which have greater exposure to the continental European markets affected by the weather conditions, showed a little bit decreased sales.
Speaker #1: In the rest of the world region, sales growth continued strong in Q2, so Q2 comparable sales increased by 11%, and for the first half we are up 9%.
Miikka Tarna: In rest of the world's region, sales growth continued strong in Q2, so Q2 comparable sales increase was 11%, and H1 we are up 9%. Currencies did not have a major impact in the sales of this region. Growth continues to be driven mainly by the Latin American markets, where we have positive momentum continuing. We have good consumer pull, and also growth there is supported by the new Okuma distributorship in Chile. In the Asian markets, those markets remain challenging for us with the global trade disputes continuing on consumer sentiment. Fuel prices going up, less discretionary spending. We are, of course, still experiencing that strengthening local competition in those Asian markets. On profitability, which is showing a nice trend of improvement. We landed with comparable operating profit for H1 with EUR 13.5 million or 10% of sales, 57% increase from last year.
Miikka Tarna: In rest of the world's region, sales growth continued strong in Q2, so Q2 comparable sales increase was 11%, and H1 we are up 9%. Currencies did not have a major impact in the sales of this region. Growth continues to be driven mainly by the Latin American markets, where we have positive momentum continuing. We have good consumer pull, and also growth there is supported by the new Okuma distributorship in Chile. In the Asian markets, those markets remain challenging for us with the global trade disputes continuing on consumer sentiment. Fuel prices going up, less discretionary spending. We are, of course, still experiencing that strengthening local competition in those Asian markets. On profitability, which is showing a nice trend of improvement. We landed with comparable operating profit for H1 with EUR 13.5 million or 10% of sales, 57% increase from last year.
Speaker #1: Currencies don't have a major impact didn't have a major impact in the sales of this region. Growth continues to be driven mainly by the Latin American markets, where we have positive momentum continuing.
Speaker #1: We have a good consumer pool, and also, growth there is supported by the new Okuma distributorship in Chile. In the Asian markets, those markets remain challenging for us, with the global trade disputes continuing to impact consumer sentiment.
Speaker #1: So, fuel prices are going up, leading to less discretionary spending. And we are, of course, still experiencing that local strengthening and increased competition in those Asian markets. So then, on profitability, which is showing a nice trend of improvement.
Speaker #1: So, we landed with comparable operating profit for H1 of €13.5 million, or 10% of sales—a 57% increase from last year. This profitability was, of course, naturally primarily driven by the increased sales volumes in the open water markets.
Miikka Tarna: And this profitability was of course, naturally, primarily driven by the increased sales volumes in the open water markets. We were also able to secure our sales margin, which improved slightly from last year. And also we continued our focus on maintaining operating expense level and lowering the break-even point. In the reported operating profit, which landed higher at EUR 15.8 million, we have an impact of EUR 2.5 million from the IEEPA tariff refunds in the US. And with these results, we had slightly lower financial expenses, slightly higher tax expense, and net profit for the H1 landed at EUR 8.5 million, which is EUR 6.2 million higher compared to last year. And earnings per share landed at 19 cents per share. Then next, let's look at our cash flow. Starting from inventory levels.
Miikka Tarna: And this profitability was of course, naturally, primarily driven by the increased sales volumes in the open water markets. We were also able to secure our sales margin, which improved slightly from last year. And also we continued our focus on maintaining operating expense level and lowering the break-even point. In the reported operating profit, which landed higher at EUR 15.8 million, we have an impact of EUR 2.5 million from the IEEPA tariff refunds in the US. And with these results, we had slightly lower financial expenses, slightly higher tax expense, and net profit for the H1 landed at EUR 8.5 million, which is EUR 6.2 million higher compared to last year. And earnings per share landed at 19 cents per share. Then next, let's look at our cash flow. Starting from inventory levels.
Speaker #1: We were also able to secure our sales margin, which improved slightly from last year. Additionally, we continued our focus on maintaining operating expense levels and lowering the break-even point.
Speaker #1: In the reported operating profit, which landed higher at €15.8 million, we have an impact of €2.5 million from the IEEPA tariff refunds in the US.
Speaker #1: And with these results, we had slightly lower financial expenses, slightly higher tax expense, and net profit for the first half of the year landed at €8.5 million, which is €6.2 million higher compared to last year.
Speaker #1: And earnings per share landed at 19 cents per share. Then next, let's look at our cash flow. So starting from inventory level, so inventory landed 2.1 million lower compared to last year at 80 80 million euros.
Miikka Tarna: Our inventory landed EUR 2.1 million lower compared to last year at EUR 80 million. Here the currencies play against us, so currency exchange rates increased our inventory value by EUR 1 million. Organic decrease in inventory was EUR 0.8 million and we had a net realizable value allowance, which the allowance increased and decreased our inventory value by EUR 2.3 million. And then on the right side, if we look at our cash flow, our cash flow from operations increased by EUR 10.5 million year over year in H1, landed at EUR 16.7 million. We had less capital tied in net working capital, which brought a EUR 3 million benefit in our cash flow. And if we look at the cash flow excluding the working capital impact, our cash flow landed at EUR 18.5 million, which is EUR 7.5 million higher than last year.
Miikka Tarna: Our inventory landed EUR 2.1 million lower compared to last year at EUR 80 million. Here the currencies play against us, so currency exchange rates increased our inventory value by EUR 1 million. Organic decrease in inventory was EUR 0.8 million and we had a net realizable value allowance, which the allowance increased and decreased our inventory value by EUR 2.3 million. And then on the right side, if we look at our cash flow, our cash flow from operations increased by EUR 10.5 million year over year in H1, landed at EUR 16.7 million. We had less capital tied in net working capital, which brought a EUR 3 million benefit in our cash flow. And if we look at the cash flow excluding the working capital impact, our cash flow landed at EUR 18.5 million, which is EUR 7.5 million higher than last year.
Speaker #1: Here, the currencies played against us, so currency exchange rates increased our inventory value by €1 million. The organic decrease in inventory was €0.8 million, and we had a net realizable value allowance, where the allowance increased and decreased our inventory value by €2.3 million.
Speaker #1: And then, on the right side, if we look at our cash flow, our cash flow from operations increased by €10.5 million year over year.
Speaker #1: In H1, we landed at €16.7 million. We had less capital tied up in net working capital, which brought a €3 million benefit in our cash flow.
Speaker #1: And if we look at the cash flow, excluding the working capital impact, our cash flow landed at €18.5 million, which is €7.5 million higher than last year.
Speaker #1: Capital expenditure remains roughly at last year's level. Again, the same capital expenditure targets here: manufacturing capacity, maintenance, investments, and also investments in new products, which is, of course, a key investment for us to maintain new product excitement in the market.
Miikka Tarna: Capital expenditure remains roughly at last year level. Again, the same capital expenditure targets here, manufacturing capacity, maintenance investments and also investments in new products, which is of course a key investment for us to maintain the new product excitement in the market. Last year we had a disposal of EUR 1.1 million, from the sale of real estate in Finland. This year the disposals were very minimal. Let's move on to the last slide of my presentation. Our deleveraging is progressing. Net interest-bearing debt landed at EUR 60 million, which it is EUR 1.4 million higher compared to last year. But here the comparison is a little bit flawed. We have to take into account that last year we had EUR 30 million hybrid, now we have EUR 25 million hybrid, and the hybrid is considered as part of equity.
Miikka Tarna: Capital expenditure remains roughly at last year level. Again, the same capital expenditure targets here, manufacturing capacity, maintenance investments and also investments in new products, which is of course a key investment for us to maintain the new product excitement in the market. Last year we had a disposal of EUR 1.1 million, from the sale of real estate in Finland. This year the disposals were very minimal. Let's move on to the last slide of my presentation. Our deleveraging is progressing. Net interest-bearing debt landed at EUR 60 million, which it is EUR 1.4 million higher compared to last year. But here the comparison is a little bit flawed. We have to take into account that last year we had EUR 30 million hybrid, now we have EUR 25 million hybrid, and the hybrid is considered as part of equity.
Speaker #1: Last year, we had a disposal of €1.1 million from the sale of real estate in Finland. This year, the disposals were very minimal. And let's move on to the last slide of my presentation.
Speaker #1: So, our deleveraging is progressing. Net interest-bearing debt landed at 60 million euros, which is 1.4 million higher compared to last year. However, here the comparison is a little bit flawed.
Speaker #1: We have to take into account that we have hybrid. Last year, we had €30 million hybrid. Now we have €25 million hybrid, and the hybrid is considered as part of equity.
Speaker #1: So here, a more meaningful comparison is looking at 2025 Q4 and comparing that to Q2, where we show an almost €13 million decrease in our indebtedness.
Miikka Tarna: Here more meaningful comparison is looking at 2025 Q4 and comparing that to Q2 where we show an almost EUR 13 million decrease in our indebtedness. Leverage covenants landed at 2.28. So the improvement that we've been working towards is now showing results. Gearing there on the right side of the slide is slightly higher and this is again explained by the lower hybrid capital as the hybrid is considered as part of equity in the IFRS statement. So our IFRS equity decreased by some EUR 3 million. But here we have to recall the hybrid impact.
Miikka Tarna: Here more meaningful comparison is looking at 2025 Q4 and comparing that to Q2 where we show an almost EUR 13 million decrease in our indebtedness. Leverage covenants landed at 2.28. So the improvement that we've been working towards is now showing results. Gearing there on the right side of the slide is slightly higher and this is again explained by the lower hybrid capital as the hybrid is considered as part of equity in the IFRS statement. So our IFRS equity decreased by some EUR 3 million. But here we have to recall the hybrid impact.
Speaker #1: Leverage covenant landed at 2.28, so the improvement that we've been working towards is now showing results. Gearing there on the right side of the slide is slightly higher, and this is again explained by the lower hybrid capital, as the hybrid is considered as part of equity in the IFRS statement.
Speaker #1: So our IFRS equity decreased by some €3 million, but here we have to recall the hybrid impact.
Speaker #2: Okay, that concludes the presentation part. So, if we have any questions now on the phone lines, we would like to have those first, and then let's see if we have any other questions.
[Company Representative] (Rapala VMC): Okay, that concludes the presentation part. If we have any questions now on the phone lines, we would like to have those first, and then let's see if we have any other questions.
[Company Representative] (Rapala VMC): Okay, that concludes the presentation part. If we have any questions now on the phone lines, we would like to have those first, and then let's see if we have any other questions.
Cyril Viellard: Can you have the slide?
Cyril Viellard: Can you have the slide?
Speaker #3: The next question comes from Jonas Hayha from OP. Please unmute your microphone.
Operator: The next question comes from Joonas Heikka from OP. Please unmute your microphone.
Operator: The next question comes from Joonas Häyhä from OP. Please unmute your microphone.
Speaker #1: Yes, hi, good morning. It's Jonas Hayha from OP. Can you hear me?
Joonas Heikka: Yes. Hi, good morning. It's Joonas Heikka from OP. Can you hear me?
Joonas Häyhä: Yes. Hi, good morning. It's Joonas Häyhä from OP. Can you hear me?
Speaker #2: Yes, good morning.
[Company Representative] (Rapala VMC): Yes. Good morning.
[Company Representative] (Rapala VMC): Yes. Good morning.
Speaker #4: Yes, good morning.
Cyril Viellard: Yes. Good morning, Joonas.
Cyril Viellard: Yes. Good morning, Joonas.
Speaker #1: Morning, Jonas. Good, good. So, a couple of questions. Firstly, regarding the updated guidance—could you walk us through your thinking, and your thinking around demand and cost development in the second half?
Joonas Heikka: Good. A couple of questions. Firstly, regarding the updated guidance, could you walk us through your thinking around demand and cost development in the second half? What are the key uncertainties and moving pieces in the second half, and what are the things that you have a fairly good visibility into?
Joonas Häyhä: Good. A couple of questions. Firstly, regarding the updated guidance, could you walk us through your thinking around demand and cost development in the second half? What are the key uncertainties and moving pieces in the second half, and what are the things that you have a fairly good visibility into?
Speaker #1: What are the key uncertainties and moving pieces in the second half, and what are the things that you have fairly good visibility into?
Speaker #4: So one of the key uncertainties was the the July change in in the in the tariffs, US tariffs. So the new section 301 tariffs that we now are have been published are not as unfavorable as we had expected.
Cyril Viellard: One of the key uncertainties was the July change in the US tariffs. The new Section 301 tariffs that we now have been published are not as unfavorable as we had expected. That was important. There is still more news to come after Labor Day in September, but we feel more confident that it will not have as an adverse effect as we had expected. That is a quite impacting point. It is our latest sales development. We are in a replenishment mode. We do not have a very strong visibility of our sales and the larger part of our year now in our open water season is behind us. As we had already mentioned in Q1, we had a good winter. For us, follows a good winter. The winter item pipeline is clean due to a strong winter last year for mainly our US operations.
Cyril Viellard: One of the key uncertainties was the July change in the US tariffs. The new Section 301 tariffs that we now have been published are not as unfavorable as we had expected. That was important. There is still more news to come after Labor Day in September, but we feel more confident that it will not have as an adverse effect as we had expected. That is a quite impacting point. It is our latest sales development. We are in a replenishment mode. We do not have a very strong visibility of our sales and the larger part of our year now in our open water season is behind us. As we had already mentioned in Q1, we had a good winter. For us, follows a good winter. The winter item pipeline is clean due to a strong winter last year for mainly our US operations.
Speaker #4: That's quite a, quite an important point. So, there's still more news to come after Labor Day in September, but we feel more confident that it will not have as adverse an effect as we had expected.
Speaker #4: That's that's a quite impacting point. And it's our latest sales development. You know, we are in a replenishment mode. We don't have a very strong visibility of our sales and and the larger part of our year now in our open water season is is behind us.
Speaker #4: And as we had already mentioned in Q1, we had a good winter for us. Follows a good winter, so the winter item pipeline is clean.
Speaker #4: Due to a strong winter last year for mainly our US operations, and so the the pre-sales have been have been positive for our latter part of the year.
Cyril Viellard: The pre-sales have been positive for our latter part of the year.
Cyril Viellard: The pre-sales have been positive for our latter part of the year.
Speaker #1: Yeah, thank you. And if I can just continue, you mentioned the clean winter pipeline. Do you refer to winter fishing, and could you comment on what are the dealer inventory levels in winter sports in the Nordics?
Joonas Heikka: Yeah, thank you. If I can just continue, you mentioned the clean winter pipeline. Do you refer to winter fishing? Could you comment on what are the dealer inventory levels in winter sports in the Nordics?
Joonas Häyhä: Yeah, thank you. If I can just continue, you mentioned the clean winter pipeline. Do you refer to winter fishing? Could you comment on what are the dealer inventory levels in winter sports in the Nordics?
Speaker #4: Well, that's so. The winter I mentioned is winter fishing, which is much more significant for us than our winter sports activity.
Cyril Viellard: The winter I mentioned is winter fishing, which is much more significant for us than our winter sports activity.
Cyril Viellard: The winter I mentioned is winter fishing, which is much more significant for us than our winter sports activity.
Speaker #1: Yeah.
Joonas Heikka: Yeah.
Joonas Häyhä: Yeah.
Speaker #4: The winter sport activity for us is now at a controllable, reasonable low level. It's difficult for me to—we have had improved inventory levels in the winter sports.
Cyril Viellard: The winter sport activity for us is now at a controllable, reasonable low level. It's difficult for me to We have had improved inventory levels in the winter sports. It's been much slower than the absorption of our other COVID overstocks because we had a very high peak COVID and a much harder slowdown, and the opportunities to sell that for all in the pipe, to sell these inventories are much more limited because the conditions to, as you know, as a Finn, the conditions to exercise that leisure need a very specific environment. So it's improved. Honestly, it's improved every year, but it's not, I would say, optimal yet.
Cyril Viellard: The winter sport activity for us is now at a controllable, reasonable low level. It's difficult for me to We have had improved inventory levels in the winter sports. It's been much slower than the absorption of our other COVID overstocks because we had a very high peak COVID and a much harder slowdown, and the opportunities to sell that for all in the pipe, to sell these inventories are much more limited because the conditions to, as you know, as a Finn, the conditions to exercise that leisure need a very specific environment. So it's improved. Honestly, it's improved every year, but it's not, I would say, optimal yet.
Speaker #4: It's been much slower than the absorption of our other COVID we we overstocks. Because we had a highly very high peak COVID and and and a much harder slowdown and and the opportunities to sell that for all in the pipe to sell these inventories are much more limited because the conditions to as you know as a Finn the conditions to exercise that leisure need really very specific environment.
Speaker #4: So, it's improved—honestly, it's improved every year, but it's not, I would say, optimal yet.
Speaker #1: Okay, thank you.
Joonas Heikka: Okay. Thank you.
Joonas Häyhä: Okay. Thank you.
Cyril Viellard: My overall impression, but then it is still not a super exciting environment.
Cyril Viellard: My overall impression, but then it is still not a super exciting environment.
Speaker #4: My my my my my overall impression but then it's it it's still not a super exciting environment.
Speaker #1: Okay, that's good color. Then, moving on to the cost side: you had quite good cost control in the first half, so maybe a question about the second half.
Joonas Heikka: Okay. That is good color. Then moving on to the cost side, you had quite good cost control in H1. Maybe a question about H2, do you foresee any cost pressures in H2? You mentioned the increasing brand investments. That is one thing, obviously, but could you comment on the magnitude and perhaps other costs as well, including raw materials, which will probably increase because of the oil price and that moving on to plastics and things like that?
Joonas Häyhä: Okay. That is good color. Then moving on to the cost side, you had quite good cost control in H1. Maybe a question about H2, do you foresee any cost pressures in H2? You mentioned the increasing brand investments. That is one thing, obviously, but could you comment on the magnitude and perhaps other costs as well, including raw materials, which will probably increase because of the oil price and that moving on to plastics and things like that?
Speaker #1: What kind of or do you foresee any cost pressures in the second half? You mentioned the increasing brand investments that is one one one thing obviously but could you comment on the magnitude and perhaps other costs as well including raw material raw materials which have or which will probably increase because of the oil price and that moving on to plastics and things like that.
Speaker #4: So on the raw materials our philosophy is we secure our margins. That's that's that's a strict guideline from from here from we are a you know a a very large global group not well quite with a a big regional reach and and here the instructions are very clear we we safeguard our margins.
Cyril Viellard: On the raw materials, our philosophy is we secure our margins. That is a strict guideline from here. We are a very large global group, with a big regional reach, and here the instructions are very clear. We safeguard our margins. If it affects top line, then it will affect top line, but margins first. That has been our approach with all the, as you mentioned, the price pressure on the raw materials and the plastics. On the overall fixed cost, concerns are our infrastructure cost or admin. We are very strict and will continue to find efficiencies.
Cyril Viellard: On the raw materials, our philosophy is we secure our margins. That is a strict guideline from here. We are a very large global group, with a big regional reach, and here the instructions are very clear. We safeguard our margins. If it affects top line, then it will affect top line, but margins first. That has been our approach with all the, as you mentioned, the price pressure on the raw materials and the plastics. On the overall fixed cost, concerns are our infrastructure cost or admin. We are very strict and will continue to find efficiencies.
Speaker #4: So if it affects top line then it will affect top line but margins first. That has been our our our approach with all the as you mentioned the the the the the price pressure on the raw materials and the plastics.
Speaker #4: On the overall fixed cost we are in our what concerns our our infrastructure cost or admin we are very strict and and will continue to find efficiencies.
Speaker #4: What I—all the support functions—where we are accelerating is in product development, in marketing, and also in internal resources for future growth.
Cyril Viellard: all the support functions. Where we are accelerating is in product development, in marketing, also internal resources for future growth.
Cyril Viellard: all the support functions. Where we are accelerating is in product development, in marketing, also internal resources for future growth.
Speaker #1: Yeah, thank you. And then maybe a question regarding H1 sales, specifically the sales mix between consumables and durable goods in the North American and European markets.
Joonas Heikka: Yeah. Thank you. And then maybe a question regarding H1 sales and specifically the sales mix between consumables and durable goods in the North American and European market. What kind of demand have you seen towards the more expensive durable goods? Has the consumer sentiment improved in these categories?
Joonas Häyhä: Yeah. Thank you. And then maybe a question regarding H1 sales and specifically the sales mix between consumables and durable goods in the North American and European market. What kind of demand have you seen towards the more expensive durable goods? Has the consumer sentiment improved in these categories?
Speaker #1: What kind of demand have you seen toward the more expensive durable goods? Has consumer sentiment improved in these categories?
Speaker #4: So our exposure in North America to durables is still limited. That's why we had strong introductions last year in 13 Fishing, which is our durables brand for North America.
Cyril Viellard: Our exposure in North America to durables is still limited. And we had last year strong introductions in 13 Fishing, which is our durables brand for North America. So in 2025, we had really successful combo introductions. This year, we didn't have such a pipeline of new products, so the sales have been living on past year introductions. And you always have second year after strong new products, a natural slowdown for us as suppliers. So our exposure was there limited. And in Europe, our positioning, so our main brand is Okuma, which is in the very good value for money segment, which is actually well-positioned in today's market environment.
Cyril Viellard: Our exposure in North America to durables is still limited. And we had last year strong introductions in 13 Fishing, which is our durables brand for North America. So in 2025, we had really successful combo introductions. This year, we didn't have such a pipeline of new products, so the sales have been living on past year introductions. And you always have second year after strong new products, a natural slowdown for us as suppliers. So our exposure was there limited. And in Europe, our positioning, so our main brand is Okuma, which is in the very good value for money segment, which is actually well-positioned in today's market environment.
Speaker #4: So in 2025 we had really successful combo introductions this year we didn't have such a pipeline of new products so the sales have been living with their living on on past year introductions and you always have second year after strong new products a slow natural slowdown for us as suppliers so exposure was there limited and in in Europe our positioning so our main brand is Okuma which is the in the very good value for money segment which is actually well positioned in today's market environment.
Speaker #1: Yeah, okay. Thank you. And then, finally, a question related to the inventory level—you had the change in the provision, or allowance, whatever you want to call it.
Joonas Heikka: Yeah. Okay. Thank you. And then finally, a question related to the inventory level. You had the change in the provision or allowance, whatever you want to call it. Could you elaborate what was this related to more specifically?
Joonas Häyhä: Yeah. Okay. Thank you. And then finally, a question related to the inventory level. You had the change in the provision or allowance, whatever you want to call it. Could you elaborate what was this related to more specifically?
Speaker #1: Could you elaborate what was this related to? More specifically. So it was it was slightly higher. So this if I go back a little bit with our inventory management and I was supply chain as we have put a lot of focus a lot of focus on on this and the demand planning.
Miikka Tarna: Yes.
Miikka Tarna: Yes.
Miikka Tarna: Yeah, Mika, do you want to-
Cyril Viellard: Yeah, Mika, do you want to-
Miikka Tarna: So it was slightly higher. So this, if I go back a little bit with our inventory management and our supply chain, we have put a lot of focus on this and the demand planning. It is part of that overall process that we also review the inventories for obsolescence allowance. So it is part of the overall assessment, making sure that our inventory stays healthy and being very proactive in identifying where we have inventory risk, making sure that we have the provisions in place. So it is a little bit tied to also internal processes, our NRV, we call it NRV, net realizable value provision, so that we are proactive with the NRV provisions so that internally we also then incentivize all the markets and the sales teams to then improve inventory turn by clearing the obsolete and slow-moving items.
Miikka Tarna: So it was slightly higher. So this, if I go back a little bit with our inventory management and our supply chain, we have put a lot of focus on this and the demand planning. It is part of that overall process that we also review the inventories for obsolescence allowance. So it is part of the overall assessment, making sure that our inventory stays healthy and being very proactive in identifying where we have inventory risk, making sure that we have the provisions in place. So it is a little bit tied to also internal processes, our NRV, we call it NRV, net realizable value provision, so that we are proactive with the NRV provisions so that internally we also then incentivize all the markets and the sales teams to then improve inventory turn by clearing the obsolete and slow-moving items.
Speaker #1: It's part of that overall process that that we also review the inventories for obsolescence allowance. So it's part of the overall assessment making sure that our inventory stays healthy and being very proactive in identifying where we have inventory risk making sure that we have the provisions in place so also kind of it's a little bit tied to also internal processes our NRV we call it NRV net realizable value provision so that we are proactive with with the NRV provisions so that internally we also then incentivize all the markets and the and the sales teams to then improve inventory term by clearing the obsolete and slow moving items.
Speaker #1: Okay, good. Understood. Thank you very much. That's all I have at the moment. Thank you.
Joonas Heikka: Okay, good. Understood. Thank you very much. That is all I have at the moment.
Joonas Häyhä: Okay, good. Understood. Thank you very much. That is all I have at the moment.
Operator: Thank you. There are no more audio questions at this time, so I hand the conference back to the speakers for any chat questions.
Operator: Thank you. There are no more audio questions at this time, so I hand the conference back to the speakers for any chat questions.
Speaker #2: There are no more audio questions at this time, so I hand the conference back to the speakers for any chat questions.
Speaker #1: Okay. So we have a couple of questions also on chat. First question is about the increased marketing spend on the H2 and and the question is that where do we what are the main focus areas where we see opportunities in and and how quickly do we expect this expenditure to affect our top line?
[Company Representative] (Rapala VMC): Okay, we have a couple of questions also on chat. First question is about the increased marketing spend on the H2, and the question is that, what are the main focus areas where we see opportunities in, and how quickly do we expect this expenditure to affect our top line?
[Company Representative] (Rapala VMC): Okay, we have a couple of questions also on chat. First question is about the increased marketing spend on the H2, and the question is that, what are the main focus areas where we see opportunities in, and how quickly do we expect this expenditure to affect our top line?
Speaker #4: So the we are working on streamlining our brand portfolio that's been our main strategic focus in the last 12 months. We've been been working on to increase the visibility of our all our identified top tier brands.
Cyril Viellard: We are working on streamlining our brand portfolio. That has been our main strategic focus in the last 12 months. We have been working on to increase the visibility of all our identified top-tier brands. Rapala, VMC, Sufix, Okuma. Rapala being our flagship, and the opportunities will be in multiple areas around Rapala. You will see when it comes, I think. I will not spoil all that we are working on for our consumers. How do we expect this expenditure to affect your top line? How quickly? It will support the growth plan we have in our strategic planning. It is a necessity. The exact relationship is very difficult to assess. The second question, shall I continue?
Cyril Viellard: We are working on streamlining our brand portfolio. That has been our main strategic focus in the last 12 months. We have been working on to increase the visibility of all our identified top-tier brands. Rapala, VMC, Sufix, Okuma. Rapala being our flagship, and the opportunities will be in multiple areas around Rapala. You will see when it comes, I think. I will not spoil all that we are working on for our consumers. How do we expect this expenditure to affect your top line? How quickly? It will support the growth plan we have in our strategic planning. It is a necessity. The exact relationship is very difficult to assess. The second question, shall I continue?
Speaker #4: So Rapala VMC suffix Okuma and Rapala being our flagship and so the opportunities will be in multiple areas. For around Rapala we are and you'll see when when I don't you'll see when it comes I think well I won't give a spoil all that we are working on for our consumers how do you expect this expenditure to affect your top line how quickly it will support our the growth plan we have in our strategic planning it's a necessity the exact relationship is is very difficult to to assess.
Speaker #4: The second question—shall I continue?
Speaker #1: Yeah. Then we have a question on the pickup of product development and marketing expenditures, and how these will affect the inventory levels.
[Company Representative] (Rapala VMC): Yeah. Then we have a question on the pickup of product development and marketing expenditures and how these will affect the inventory levels. Does the current levels give enough room to operate toward the growth investments?
[Company Representative] (Rapala VMC): Yeah. Then we have a question on the pickup of product development and marketing expenditures and how these will affect the inventory levels. Does the current levels give enough room to operate toward the growth investments?
Speaker #1: And do the current levels give enough room to operate toward the growth investments?
Speaker #4: So here the key, our key guideline, is improving turns. So yes, we are going into new product categories with our flagship Rapala brand, with innovative products—exciting, innovative products—and extending that portfolio will have inventory impacts. At the same time, we are cutting other items, really maintaining and overall reducing our number of stock keeping units.
Cyril Viellard: Here, our key guideline is improving turns. Yes, we are going into new product categories with our flagship Rapala brand with innovative products, exciting innovative products. Extending that portfolio will
Cyril Viellard: Here, our key guideline is improving turns. Yes, we are going into new product categories with our flagship Rapala brand with innovative products, exciting innovative products. Extending that portfolio will
Cyril Viellard: Have inventory impacts. At the same time, we are cutting other items, really maintaining and overall reducing our number of stock keeping units. The main guideline is we need to improve our turns gradually, sustain growth, free cash, and improve our turns without breaking the growth. It is a fine line. That is the way we have been and that you have seen in the past year and reporting that we are improving our turns, and we see a lot of opportunities to continue improving these turns with better forecasting tools, lower minimum order quantities, faster supply chain, et cetera. All the usual tools that we have, and it is a lot of small streams that we are working on.
Cyril Viellard: Have inventory impacts. At the same time, we are cutting other items, really maintaining and overall reducing our number of stock keeping units. The main guideline is we need to improve our turns gradually, sustain growth, free cash, and improve our turns without breaking the growth. It is a fine line. That is the way we have been and that you have seen in the past year and reporting that we are improving our turns, and we see a lot of opportunities to continue improving these turns with better forecasting tools, lower minimum order quantities, faster supply chain, et cetera. All the usual tools that we have, and it is a lot of small streams that we are working on.
Speaker #4: So the main guideline is we need to improve our turns gradually, sustain growth, free up cash, and improve our turns without breaking the growth. So, it's a fine line.
Speaker #4: That's the way we've been, and that you've seen in the past year, and in reporting that we are improving our turns. We see a lot of opportunities to continue improving these turns with better forecasting tools, lower minimum order quantities, faster supply chain, and so on.
Speaker #4: All the usual tools that we have, and it's a lot of small streams that we are working on. That would be.
[Company Representative] (Rapala VMC): Okay.
[Company Representative] (Rapala VMC): Okay.
Cyril Viellard: That would be.
Cyril Viellard: That would be.
Speaker #1: Yeah. Then we have a question about whether there's anything extraordinary behind the high H1 tax rate.
[Company Representative] (Rapala VMC): Yeah. We have a question about that if there is anything extraordinary things behind the high H1 tax rate.
[Company Representative] (Rapala VMC): Yeah. We have a question about that if there is anything extraordinary things behind the high H1 tax rate.
Speaker #3: Yeah, I can pick up that question. So, we do have some withholding taxes that we have recorded in H1. I believe they were actually in Q2.
Miikka Tarna: Yeah, I can pick up that question. We do have some withholding taxes that we have recorded in H1. I believe they were actually in Q2, and those are related to internal repatriation of profits, so internal dividends, which incur those withholding taxes. That did increase our effective tax rate. I would say without these withholding tax payments, our effective tax rate would be below the 30% level.
Miikka Tarna: Yeah, I can pick up that question. We do have some withholding taxes that we have recorded in H1. I believe they were actually in Q2, and those are related to internal repatriation of profits, so internal dividends, which incur those withholding taxes. That did increase our effective tax rate. I would say without these withholding tax payments, our effective tax rate would be below the 30% level.
Speaker #3: So, that and those are related to internal repatriation of profit, so internal dividends which incur those withholding taxes. So, that did increase our effective tax rate.
Speaker #3: So I would say, without these withholding tax payments, our effective tax rate would be below the 30% level.
Speaker #1: Okay, then we have one more question: what kind of net working capital impact and cash flow are you expecting for Q3 and Q4?
[Company Representative] (Rapala VMC): Okay. Then we have one more question that what kind of networking capital impact and cash flow you are expecting for Q3 and Q4?
[Company Representative] (Rapala VMC): Okay. Then we have one more question that what kind of networking capital impact and cash flow you are expecting for Q3 and Q4?
Speaker #3: Yes. That's that's an excellent question. So for Q3 as as we have showed now high higher EBITDA and higher volumes so we still expect to have we expect to have slightly better cash flow compared to last year of course driven by the higher volumes we are still getting cash in from the summer fishing season and the season is still continuing in in parts of the world and many parts of the world.
Miikka Tarna: Yes, that's an excellent question. For Q3, as we have showed now, higher EBITDA and higher volumes, we expect to have slightly better cash flow compared to last year, of course, driven by the higher volumes. We are still getting cash in from the summer fishing season, and the season is still continuing in many parts of the world. Q3, we do see it in a positive manner. Then what happens at the same time, we start preparing for the winter fishing season. We start to have cash outflows for the winter fishing season. As Cyril also mentioned, a good season is followed by another good season. We expect the cash flow roughly to be on the same level as last year in regard of the winter fishing season.
Miikka Tarna: Yes, that's an excellent question. For Q3, as we have showed now, higher EBITDA and higher volumes, we expect to have slightly better cash flow compared to last year, of course, driven by the higher volumes. We are still getting cash in from the summer fishing season, and the season is still continuing in many parts of the world. Q3, we do see it in a positive manner. Then what happens at the same time, we start preparing for the winter fishing season. We start to have cash outflows for the winter fishing season. As Cyril also mentioned, a good season is followed by another good season. We expect the cash flow roughly to be on the same level as last year in regard of the winter fishing season.
Speaker #3: So, Q3, we do see it in a positive manner. Then, what happens at the same time is that we start preparing for the winter fishing season, so we start to have cash outflows for the winter fishing season. Now, as Suril also mentioned, a good season is followed by another good season, so we expect the cash flow to be roughly on the same level as last year with regard to the winter fishing season.
Speaker #3: Then in Q4 the cash flow is quite dependent on the load in orders for the subsequent year. We start building working capital for 2027 and then that the Q4 cash flow is very dependent on how the load in orders and how the planning goes for for 2027.
Miikka Tarna: Then in Q4, the cash flow is quite dependent on the load-in orders for the subsequent year. We start building working capital for 2027, and the Q4 cash flow is very dependent on how the load-in orders, on how the planning goes for 2027. We have a good product pipeline for 2027 as well. We have lots of new product introductions. But more information on that would follow when we have better visibility on the subsequent year. Usually, the Q4 cash flow is negative.
Miikka Tarna: Then in Q4, the cash flow is quite dependent on the load-in orders for the subsequent year. We start building working capital for 2027, and the Q4 cash flow is very dependent on how the load-in orders, on how the planning goes for 2027. We have a good product pipeline for 2027 as well. We have lots of new product introductions. But more information on that would follow when we have better visibility on the subsequent year. Usually, the Q4 cash flow is negative.
Speaker #3: We have a good product pipeline for '27 as well. We have lots of new product introductions. But more information on that will follow when we have better visibility on the subsequent year.
Speaker #3: Usually, the Q4 cash flow is negative.
Speaker #1: Okay. I think that there was no more questions and as there are no more no more questions we conclude this call. So I wish everyone good fall season and keep on fishing and tight lines.
[Company Representative] (Rapala VMC): Okay. I think that there was no more questions. As there are no more questions, we conclude this call. I wish everyone good fall season, and keep on fishing, and tight lines.
[Company Representative] (Rapala VMC): Okay. I think that there was no more questions. As there are no more questions, we conclude this call. I wish everyone good fall season, and keep on fishing, and tight lines.
