Hello, welcome to the Rapala and VMC, the conference, first half of 2023. My name is Ben, and I will be the coordinator for today's call. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask question at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I will now hand you over to your host, Mr. Tuomo Leino, to begin today's conference. Thank you. Thank you, Ben. Good morning, everyone. This is Tuomo Leino, General Counsel and Head of Investor Relations of Rapala VMC Corporation, speaking. I am here today with Rapala VMC Corporation's new management. First, we have Lars Ollberg, our new President and CEO. Nice to meet you, everybody. We have Cyrille Viellard, the new Deputy CEO. Good morning, everyone. Nice to meet you all. We have Jean-Philippe Nicolle, new CFO. Good morning, all. lastly, but not least, we have Miikka Tarna, the new Deputy CFO. Good morning, everybody. Without further ado, I give the floor to Lars Ollberg. Lars, go ahead. Thank you. Yeah, it's good to be here. It's my first investor call in this position, and I'm happy but also a little bit dissatisfied to report that, like, I'm coming after 40 years in the industry, I'm coming to lead the company in such a market environment that's been maybe the most difficult year that the industry have seen. We saw high ups on, you know, on the aftermath of the COVID. We saw high downs in the retail base following the destocking, the high inventories, and then destocking of the products all around the world. Still, I would say that with the team and with my experience and being in good weather and bad weather over the years, I know what it takes to take us through the challenge. I feel quite confident that even though these obstacles are still, you know, in front of us, there are also good signs in place and taking us through the stormy waters. One thing I'm also happy to say is that when reviewing the strategy Rapala has in place, I was one key member of making up the strategy together with the management team, and those cornerstones, they will continue in full force. I would say just a little bit more highlight on customer work and more highlight on the sales, as maybe some of you have heard me saying, a little bit exaggerating way, that all on red, which means focus on the key brands. Focus on customers, on key brands, will help us to get next to the next levels. About the market, I would like to say that I just came back from a 10 days trip to North America. There was a very lively ICAST show where we introduced some new categories. We have seen now the US economy has really demonstrated resilience, and consumer spending seems to be up. Our US market is now showing good signs of recovery. Consumer spending seems to be getting back, and we also expect this positive sentiment to gradually transfer over to durables, rods, reels. Also we expect and hope that the US will be the locomotive to pull the whole market in 2024 back to better shape. I don't go through the numbers, but it is my pleasure to give the word to Jean-Philippe Nicolle, who will walk through the numbers and achievements, what we had over the past six months. Thank you for this introduction from my part, and Jean-Philippe, please go ahead. Okay. Thanks, Lars. I will continue on page four on our investor presentation to comment first as 2023. Net sales were EUR 117.9 million, down 21% from previous year. During first half of the year, trading condition remained challenging due to the global economic slowdown, high inflation, lower consumer demand, inventory retail level. Reported operating profit decreased by EUR 9.2 million from the previous comparison period. This decrease was mostly driven by lower sales. The group started a saving program to reduce expenses by EUR 6 million on annual basis. Comparable profit decreased by EUR 10 million, items affecting comparability at negative of EUR 0.9 million, it's related to restructuring of Helsinki headquarter. Net profit for this period decreased by EUR 9.8 million, and now we have a net profit of minus EUR 1.1 million. I will move to page five, sales review by region. Sales in North America decreased by 16% from the comparison period. Majority of the decline come from sales of third party products sold to DQC. DQC is certain fishing. Excluding these sales were done only by 4%. Sales in Nordics market outlook continue to be challenging. Sales decreased by 33% from comparison period. Multiple reason for this, high inventory, microeconomic situation, low consumer demand, and sales of third party product decreased. Rest of Europe, sales decreased by 23%. Same story, high inventory at retail level and macroeconomic situation. Rest of the world, sales decreased by 90%, but Australian and South America continue to grow. I will move to page six. Inventory end of June was EUR 98.5 million, down by 16% from comparison period. Target from the group, obviously, is to continue this positive momentum. Cashflow from operation increased by EUR 22.7 million from the comparison period and landed at EUR 18.6 million. This change was driven by net working capital improvement. Page seven. At this time, liquidity position for the group was good. Gearing ratio increased and equity to asset ratio decreased from last year. Cash and cash equivalent at the end of June was EUR 24.5 million. The group is currently compliant with all financial covenants at this time, and we expect to be compliant in the future. All right. I think we are now ready for some questions from the callers. Ladies and gentlemen, if you would like to ask a question, please press star one now on your telephone keypad. To withdraw your question, please press star two. A voice prompt on your phone line will indicate when your line is open. Please introduce yourself before asking a question. Thank you. First caller, please go ahead. Olli Vilppo from Inderes. Nice to meet you all. Nice to meet you, too. Hello, Olli. Yeah, I have couple of questions. Can you tell me where do you intend to get this EUR 6 million savings, and how do you split it between different measures? Jean-Philippe Nicolle. We have already started the process, and we will have the full effect in 2024, but we still have effect in Q3 and Q4, but the huge effect, and the full effect will be in 2024. Okay, is it like it comes from that reduction of the personnel...? Yes manufacturing less, or? Yes. It's come from, different things. First of all, people, okay, personnel. The second one is, other expenses, like, headquarter expenses. Fixed cost. Okay. Factory improvement. And now- Factory efficiency, also. Okay, thank you. You had the financial expenses were really high compared what expecting, and you had this covenants replaced with EBITDA. Can you talk a little bit how the interest rates go relation to this covenants? Do you expect to have lower interest rates when you go below the covenants, the normal covenants? Yes. Yeah, that's a good question. Miikka here. Yeah, of course, our interest expenses were much higher than previous year. Thanks to the rising interest rates. Of course, as usual, the financial covenants are tied to the margin ratchets as well, so that impact the interest expense levels. Naturally, yes, now our working capital initiatives and driving down the inventory and the leverage will have an impact in the margin going forward. Okay, good. You didn't mention any Okuma in the report. Did the sales decline, and was it like that the consumables sales were better than these durables? Yes. As we said, in especially in the European markets, the destocking still continued, which impacts our sales and the majority of the Okuma sales is coming from Europe. As also it's the consumables where the market is recovering faster, and we expect this also to reach the durables going forward. Okay, good. One more question for Lars. The strategy remains the same, I guess, but you are planning to have more third party again. Can you still explain more reasoning behind this? Yeah. Hello, Olli. The kind of the termination of some of the earlier, third party, where somewhere out of our control, somewhere decided by us, and those decisions were at that time, done in those current circumstances. Of course, the market's been very volatile and up and down, and now we are looking into, new opportunities in this, changed environment. During my also my trip now to North America, I had some interesting discussions that I will further, then, review with our ExCom, and to see, which would be the best fit, to kind of, leverage, our offering. Because the key thing, of course, of adding any third party or these brands that are not owned by Rapala, really have to depend on making us more attractive partner for our customers. This is kind of the driving factor that it will not overlap, but like be an additional benefit to us in strengthening our partnership with our key customers. I'm not looking into a high number of new opportunities, but a selected few that will also help us to level our year. This is a bit of a change, but it's not that dramatic. It is helping us to, as said, you know, to level the year and increase our interest within our key customer base. Okay, good. you are looking this synergistic third party? Yes. yeah. Exactly, absolutely. yeah. Yes, thank you. I don't have any further questions. All right. Thank you, Olli. Any other questions? Next participant, please go ahead. Yes, good morning. Good morning. Good morning. This is Quaero Capital. There are two of us. I've got a first question, then my colleague, Sebastian, has got a couple of other questions afterwards. Just really a big picture, a big picture question because it's the first time we're hearing from Lars. Just trying to understand, there's been fairly major management changes at the top of Rapala VMC, we just wanted to hear, you know, what the board has felt uncomfortable in terms of the past, what changes are planned for the future beyond the cost reduction of EUR 6 million, etcetera. Just big picture, what went wrong and what will be changed? I can only tell you about the future, and I came back for joining a strong group. I think there was no material damage done. Rather, vice versa, I worked with the old management, and I felt that a lot of good things were done during the past two years, and I have a really good start, you know, to continue. I would say the maybe the key focus that I've been saying to our staff is that what my first actions within the group has been is to make sure that we have the right team spirit, that we have a team unity. With those two things in place, we can do the turnaround where it's needed. I would say that most of the things in the group are good, but then we need to get a little bit more focused where it counts. These were the things I mentioned earlier: more focused on sales, more focused on brands, and especially more focused on understanding the customer's needs. I think that these three things are the ones that will carry us through. Already in the North American market, where which is the most dynamic, I saw all these three things already bearing fruit. I feel pretty confident already on the '24 and especially '25, that will see us going through with a strong management, stronger than ever, more united than ever, with the higher spirit than ever. I hope this is something that you like to hear and are satisfied. Yeah, we're delighted to hear it, particularly an incoming CEO that says you're in a good situation from what's been done in the last two years. Very delighted to hear that. I'm passing on to questions from Sebastian. Yes, Sébastien speaking. Thank you. First, could you please remind us your product pipeline that you plan to launch? What has been launched in 2023? I mean, the first half, what will be launching in second half, and what should we expect for the coming years? Because we understood that you make effort to develop new breaking products, and it would be great to really understand your pipeline. Maybe I would say, I would say the key focus, of course, as I mentioned earlier, which is a little bit humoristically said, that all on red, Rapala is red. When we have a world-leading brand like Rapala, we need to utilize it even more. One key example of this is that when you are talking about the fishing lures, it could be basically, you know, split into three categories. You have the hard bait, where traditionally Rapala has built up a world-leading position. You are talking about metal lures, where we are using mainly other brands than Rapala, Blue Fox and Luhr-Jensen and others. The key category where we have been out or we have been in with our secondary brand, Storm, we changed the strategy now in a big time, and we made a launch of a category called Crush City, which was the talk of the U.S. show. The Crush City consists of soft plastic lures. We can see that already from the first time, that this will be a very successful launch and a great inroads for a new category that's relatively large. We don't publish the kind of the in-category numbers, but I would say that this is a step to a big opportunity for the future years. Along this, maybe you also noticed that Rapala took a controlling share now of 13 Fishing, where we are now a global owner of this brand. This will also enable us, when the market normalizes, to get a higher share from the durables market, which makes some 40% of the total fishing tackle demand. Thank you. I have to say, I haven't really understand what you, in terms of finance in your third-party products, when you mentioned sales decline follows a strategic decision to outsource the supply chain function of 13 Fishing products sold DQC International. I really don't understand why the, uh, the related party transaction decreased by EUR 10 million. What happened? Could you please help us to understand it? Yes. So, as DQC International, third part, 13 Fishing USA is an associated company of Rapala. The sales that we have to DQC International are considered as third-party product sales in our revenues. Now the strategic decision was to outsource the supply chain. We have been handling the supply chain for DQC International, and now that supply chain was outsourced, and hence we don't record the revenues anymore from the supply chain sales to DQC International. Good question. Yeah, I can't understand. You mentioned that before it was Rapala supplied DQC, and now it's another supplier? Sébastien it was just the logistics services. DQC items were sourced, and Rapala step provided to provide services, buying from the source, supply USA. Intermediate was brought when the joint venture was set up. ... was not meaningful going forward, and so DQC just handled these logistic services. It just happened that it would boost sales volume, but it's not sales. It was just an intermediary logistic services. Going forward, this will change again following the recent announcements. Okay, I understood. It's just a supply chain, supply chain services. Okay, oui. So it has a significant impact on top line, but in the end, it was, it's not, it's just, yeah, we bundled, and we thought that it did not make sense in, any way to bundle anymore afterwards with our own products. Okay, I understood. Does that answer your question? Yes. Thank you. On your headquarters, the cuts you are doing is quite Or you're down because it's already down. Yeah, reducing the number of staff from 60 to 35, basically half of the staff left the HQ, seems very drastic. Could you help us to understand what you did and why this person were not required anymore? Cyrille Viellard speaking. We have many functions that if we require support, we can outsource. We had a lot of admin support functions that we now have decided in legal, in supply chain expertise, in projects, that when necessary, we can outsource. Following our top line reduction, these are really were competent people, but that we prefer, but we cannot afford, and we will have as variable. Some functions also will be moved to the Pärnu logistic center. We've also, we had centralized some of our marketing support, for example, that we will again bring closer to the market. Okay. One last question on my side is, you mentioned the move from Russia to Pärnu, from Finland to Pärnu. Should we expect other production or warehouse reorganization going forward? It's Lars here. No, we don't expect any drastic changes in the future. Okay. Thank you. We currently have no question coming through. As a final reminder, if you'd like to ask a question, please press star one now. All right, if there is no, Yeah, sorry. There are no further questions. Yeah, no worries at all. There are no further questions, so I will hand it back to you to conclude today's conference. Okay. Thank you. Thank you. Did you, Lars, want to say something to the end? Well, I'm, I just want like to say that I'm really happy to be in this call, and I'm really happy to be back at Rapala, where I spent most of my working career. Only to maybe repeat what I mentioned earlier in the call, my key job is to get back to team unity, to team spirit. With this one, we will not only do the turnaround, but get us back on the growth track and be the company and take the position that where Rapala deserves to be. Maybe that's my closing remark, and I feel confident about the future with this team. Right. Thank you. I'd like to remind everyone that the IR presentation that we were referring to is available at our website, and the recording of this call will also be available on our website later on. On behalf of Rapala VMC Corporation, I wish everyone a very nice summer and tight lines if you go fishing. Thank you. Thank you. Thank you for joining today's call. You may now disconnect.