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Annual Accounts 2006February 6, 2007

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AGENDA

• Group Business Organisation• 2006 In Brief• Sales and Profitability• Cashflow & Working Capital• Strategy Implementation• Performance Improvement

Initiatives, Management Ownership & Personnel

• North American Perspective• Outlook for 2007 & Dividend for

2006

RAPALA FINLAND IRELAND ESTONIA

SOFTBAITS STORM

OTHER LURES BLUE FOX LUHR JENSEN

WILLTECH

HONG KONG CHINA

HOOKS & TERMINAL

TACKLE

KNIVES

CX SKIS

SHIMANO

OTHER FISHING

HUNTING

OUTDOOR

WINTER SPORTS

ACCESSORIES LINE

RODS&REELS XC SKIS

FINLAND SWEDEN NEW ZELAND USA

CHINA

KNIVES

REST OF EUROPE

REST OF WORLD

Dis

trib

uti

on

Gro

up

B

ran

ds

MANUFACTURING AND R&D SOURCING R&D

OWN R&D AND MANUFACTURING OR SOURCING

OWN GROUP BRANDS

OWN DISTRIBUTIONSHIMANO

LOCAL IMPORTERS

THIRD PARTY SUPPLIERS

Su

pp

ly

SO

UR

CE

PR

OD

UC

T

HARDBAITS RAPALA

SPINNERS BLUE FOX

STORM

2006 GROUP BUSINESS ORGANIZATION

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FINLAND

SWEDEN

DENMARK

NORWAY

FRANCE

SPAIN

SWITZERLAND

USA

CANADA

JAPAN

BRAZIL

AUSTRALIA

CHINA

THAILAND

ESTONIA

POLAND

RUSSIA

UKRAINE

LITHUANIA

LATVIA

HUNGARY

ITALY

GERMANY

NETHERLANDS

BELGIUM

VMC FRANCE

WILLTECH CHINA

MARTTIINI FINLAND, ESTONIA & CHINA

PELTONEN FINLAND

PORTUGAL

MALAYSIA

CZECH REPUBLIC

SOUTH AFRICA

Tortue

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2006 IN BRIEF

EUR million IV/06 IV/05 2006 2005

Sales 49.2 44.8 226.6 196.1

EBITDA 2.4 3.3 28.0 26.3

Operating Profit (EBIT) 0.7 2.7 21.7 21.5

Profit Before Taxes -0.3 0.5 14.6 18.6

Net Profit for the Period 0.5 0.8 11.0 14.0

EPS, EUR 0.01 0.02 0.28 0.37

Equity-to-assets, % 33.4 33.1 33.4 33.1

Net Interest-bearing Debt 99.3 95.9 99.3 95.9

2006 a strong year of growth and business development – sales up 16%

Group’s strategy implementation progressed with acquisitions & organic growth

Outlook for 2007: sales growth 5-10% and operating profit margin to improve

Board proposes to AGM a dividend of EUR 0.12 for 2006 (EUR 0.11) to be paid

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NET SALES Q4 AND FULL YEAR 2006

Net sales 2006 were up 16% from 2005 and amounted to 226.6 MEUR (2005: 196.1). Q4 sales were up 10% and amounted 49.2 MEUR (2005: 44.8). Increase came from all geographical segments. Sales growth strongest in new markets. All product lines increased their sales: lures sales were up 15%, fishing hooks 3%, accessories 24%, third party fishing products 23% and other products 5%. The businesses acquired during 2006 increased sales by 9.1 MEUR.

0

10

20

30

40

50

60

70

Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06

MEU

R

0

50

100

150

200

250

2002 2003 2004 2005 2006

MEU

R

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OPERATING PROFIT BY QUARTER AND FULL YEAR 2006

Operating profit increased slightly from 2005 to 21.7 MEUR (21.5 MEUR).

Increased costs for labor & raw materials especially in China and weakening of USD during 2006 (avg. 1% but balance date 12%) slowed down the increase of operating profit.

Operating margin was 9.6% (11.0%) and return on capital employed 12.3% (13.8%).

Profitability was affected by the start-up costs in newly established operations and strong investment in business development. These costs increased 3.0 MEUR from 2005.

Operating profit includes negative foreign exchange effects of 2.3 MEUR. Big part of this exposure was hedged in H2 but the hedging result (+0.3 MEUR) is booked in financial items in accordance with IFRS.

Operating profit in 2006 included 0.6 MEUR less IFRS based option expenses.

All geographical segments made a positive operating profit, biggest improvement came from North America. Nordic was down from 2005 due to foreign exchange movements.

-2,0

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06

ME

UR

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EPS, CASHFLOW AND WORKING CAPITAL

Financial expenses above 2005 as a result of increased interest rates and FX losses compared to FX gains in 2005.

Net profit amounted to 11.0 MEUR (14.0) and earning per share 0.28 EUR (0.37).

Cash flow from operating activities decreased form 2005 to 10.0 MEUR.

Working capital increased 8.1 MEUR in 2006, but comparable inventories increased only 3% while comparable sales (excluding acquisitions) increased 11%.

Net cash used in investing activities amounted to 14.7 MEUR (16.2).

This includes the final payment of Luhr Jensen acquisition closed in 2005 (2.9).

The total purchase price for all acquisitions closed in 2006 is 5.5 MEUR.

Net interest-bearing debt increased to 99.3 MEUR (Dec 2005: 95.9) as a result of the acquisitions done in 2006.

Thanks to good profitability, equity-to-asset ratio increased to 33.4% (Dec 2005: 33.1%) and gearing decreased to 122.2% (Dec 2005: 127.1%).

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STRATEGY IMPLEMENTATION IN 2006

Strong investment in business development to implement Group’s strategy continued.

Both market coverage and product portfolio were expanded.

Discussions and negotiations regarding acquisitions & business combinations continued. French fishing line supplier Tortue was acquired in January 2006 South-African distributor Tatlow & Pledger was acquired in February 2006. Terminator branded spinner bait and lure business was acquired in the USA in January 2007.

Also organic growth continued strong. Lure assembling factory was established to Russia. It will commence operations during February. Start-up process of the new sales companies in Asia continued well and the ramp-up of the production at the

Chinese new knife factory was completed. Sales growth in Eastern Europe continued strong through Group’s own distribution network. In January 2007, a wholly owned distribution company was established in South Korea. Shimano distribution alliance expanded to South-East Europe, Hungary as the distribution centre.

Work on integration of previously acquired businesses continued on plan. Manufacturing of Luhr Jensen products ended in the USA and the first products from the Group’s Chinese factory

were delivered in September. Integration of acquired sales companies as well as Marttiini and Peltonen is now completed.

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Performance Improvement Initiatives

• Working capital project continued throughout the year and will continue in 2007. Target is to see an improvement on ongoing operations while the new acquisitions and start-ups will tie additional working capital.

• Group bank debt (130 MEUR) was renegotiated and 1st ever commercial paper program (25 MEUR) signed.

• Several cost cutting and sales improvement initiatives were started during 2006 in business units with unsatisfactory profitability. A clear improvement was seen in most of these units. This initiative continues in 2007.

• After a global tender process new insurance policies with lower premiums signed in December.

Personnel• Number of personnel decreased slightly during the year and was 3 921 (3 986) at year end.

Shareholder Agreement and Management Ownership

• In June 2006, Utavia S.à.r.l (Utavia) purchased 1 610 000 shares of Rapala from De Pruines Industries (DPI). Simultaneously, Viellard Migeon & Cie (VM&C) and Utavia entered into a shareholders' agreement with respect to their shares in Rapala. DPI is a subsidiary of VM&C.

• The main shareholder of Utavia is CEO Jorma Kasslin with some 43% shareholding. The other shareholders are Board members or managers of the Group.

• VM&C owns directly or through its subsidiaries some 27% and Utavia some 4% of Rapala.

PROJECTS, PERSONNEL AND MGMT OWNERSHIP

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Acquisition of Terminator Completed Jan 26, 2007 First shipments from Normark US warehouse began January 29, 2007 Well known and respected brand Premium quality/price product (lures and terminal tackle) Unique and exclusive patents for the use of titanium in fishing lures

PD team will look to incorporate titanium technology in future designs for other Group branded products

Offers high manufacturing and distribution margins to the Group Complementary to current product range (spinnerbaits, jigs, terminal tackle) Further entrenches the Group in the large Southern US bass market segment Offers upside potential for distribution outside the US Good synergistic fit

No employees or facilities were included in the deal Fits easily into Group manufacturing and distribution structure

Manufacturing will transfer from Mexico to China

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IGFA WORLD RECORDS Almost 300 All-time records!

1st place 2006: RAPALA

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– Outlook for 2007 is positive. No major changes expected in the markets.

– Including the Terminator acquisition and assuming 2006 average currency rates, it is expected that the Group’s net sales for the financial year 2007 will increase 5-10%.

– Possible additional acquisitions during 2007 would further increase the sales.

– The profitability of the Group’s ongoing operations continues to be good. Special initiatives have been started to further improve the profitability. In addition, prices have been increased to compensate for recent cost increases.

– Business development and integration expenses and start-up costs will continue still in 2007 while new initiatives are planned and implemented but these costs are not expected to exceed the comparable costs in 2006.

– Assuming 2006 average currency rates, operating profit margin is expected to improve while the investments and development initiatives made in 2005 and 2006 will start to bear fruit in 2007.

– Negotiations and discussions for new acquisitions and business combinations continue while new products and applications are being planned and developed.

– Board proposes to AGM that a dividend of EUR 0.12 for 2006 (EUR 0.11) per share be paid

– In 2007, interim reports will be published as follows: Q1 on April 26, Q2 on July 26 and Q3 on October 25, 2007. Annual Report for 2006 will be published on the week starting on March 19, 2007.

OUTLOOK FOR 2007

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