Slide 1

Q1 Interim Report 2006May 4, 2006

Slide 2

• Changes in Group Business Organization

• Q1 2006 In Brief

• Sales and Profitability

• Cashflow & Working Capital

• Strategy Implementation

• Outlook for 2006

AGENDA

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

ACCESSORIES LINE

RODS&REELS

USA

CHINA

KNIVES

REST OF EUROPE

REST OF WORLD

Dis

trib

uti

on

Gro

up

B

ran

ds

FINLAND

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 CHANGES IN GROUP BUSINESS ORGANIZATION

Slide 3

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

Slide 4

Q1 2006 IN BRIEF

EUR million I/2006 I/2005 2005

Net Sales 63.4 51.6 196.1

EBITDA 11.6 8.7 26.9

Operating Profit (EBIT) 10.0 7.3 22.1

Profit Before Taxes 7.8 6.9 19.2

Net Profit for the Period 5.7 5.1 14.7

EPS (basic), EUR 0.15 0.14 0.39

Equity-to-assets, % 32.8 31.7 33.8

Net Interest-bearing Debt 112.7 94.8 95.9

Q1 2006 was driven by strong sales and good profitability

Group’s strategy implementation and integration of new businesses progressed

Outlook for 2006: strong growth continues – net sales up in double digit percentage

Slide 5

NET SALES BY QUARTER

Q1 2006 sales increased 23% from last year. Sales increased in all geographical and business segments. 6.4 MEUR from businesses acquired during the last 12 month The fishing tackle market was stable in Western Europe while the market growth continued strong in Eastern Europe and Asia. North American market was somewhat affected by working capital management initiatives and inventory reductions of few major customers. In Australia and South-Africa the summer season came to its end with good sales for the first quarter of 2006.

0

10

20

30

40

50

60

70

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

MEU

R

0

10

20

30

40

50

60

70

I/05 I/06

MEUR

Slide 6

OPERATING PROFIT & EBITDA BY QUARTER

• Operating profit for Q1 improved 37% and was 10.0 MEUR (7.3 MEUR).

• Operating profit margin was at 15.8% (14.1%) and ROCE 21.7% (19.3%).

• Benefit from increased sales volumes, good summer season in Australia & South Africa, good winter season in North Europe and the strengthening of USD. New Asian sales companies started in 2005 all made a positive operating profit in the first quarter of 2006.

• Positive developments out-weighted development and integration costs.

• All geographical segments increased their operating profit for the first quarter.• Financial expenses increased: higher interest rates, increased net debt, fx losses -0.9 (+0.9)

• Net profit was 5.7 MEUR (5.1 MEUR) and earning per share was 0.15 EUR (0.14 EUR).

-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

ME

UR

EBITDA Oper. Prof it

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

I/05 I/06

ME

UR

EBITDA Oper. Profit

Slide 7

CASHFLOW AND WORKING CAPITAL

• Cash flow from operating activities was below last year level while the inventories and especially trade receivables increased seasonally. • Inventories excluding new businesses increased 4.1 MEUR from December. • Capital expenditure, including acquisitions, amounted to 6.2 MEUR (1.5 MEUR). • Net debt increased to 112.7 MEUR (Dec 2005: 95.9 MEUR)• Equity-to-asset ratio decreased slightly to 32.8% (Dec 2005: 33.8%) and gearing increased to 134.0% (Dec 2005: 124.1%) - both improved from the first quarter of 2005. • Group’s management continues focus on working capital management in 2006.

STATEMENT OF CASH FLOWS Jan-Mar Jan-Mar Jan-Dec

EUR million 2006 2005 2005

Net profit for the period 5.7 5.1 14.7

Adjustments 4.3 3.9 2.0

Change in working capital -19.6 -16.2 -4.2

Net cash generated from operating activities -9.6 -7.2 12.5

Net cash used in investing activities -6.2 -1.5 -16.6

Cash flow before financing activities -15.8 -8.7 -4.1

Net cash generated from financing activities 12.7 4.7 7.4

Adjustments -0.2 0.3 1.2

Decrease in cash and cash equivalents -3.4 -3.7 4.4

Slide 8

STRATEGY IMPLEMENTATION IN Q1 2006

Rapala’s strategic objective is profitable growth, founded on 3 established strenghts:

A unique manufacturing and sourcing platform (China and Europe) A leading global distribution network in fishing tackle industry A strong brand portfolio with several leading brands

During the first quarter, the Group closed two acquisitions:

The French fishing line supplier Tortue was closed in January. Annual net sales some 2 MEUR Tortue is a good addition to the Group’s fishing line portfolio and strengthens the

market share especially in France.

The acquisition of the South African fishing tackle distributor Tatlow & Pledger was closed in February. Annual net sales above 6 MEUR, Group ownership 70% Tatlow & Pledger, now Rapala VMC South-Africa, contributes to the Group’s big

game fishing business as one of the world’s key markets in this segment. It also expanded the Group’s distribution geographically and opened distribution

channels for Group products to several African countries.

Slide 9

STRATEGY IMPLEMENTATION IN Q1 2006

The integration of the acquired businesses has progressed on plan.

Most of the machinery from the Luhr Jensen acquisition has been shipped from USA to China and the production in China will commence during the second half of 2006.

The acquired sales companies (Australia, Hungary, Switzerland) have been integrated to the Group’s distribution network and are now an integral part of it.

The integration of Marttiini-Rapala knives manufacturing has also progressed and the ramp-up of production at the new Chinese knife manufacturing plant is nearing its completion.

The distribution of Peltonen cross country ski’s and some other winter sport equipment had a good start in Norway and Mr. Terje Langli, the former head of Norway’s national ski waxing team, joined Rapala to support the Group’s winter sports distribution.

The start-up process of the new sales companies in Asia has proceeded on plan.

All of them i.e. Malaysia, Thailand and China reported a positive EBITDA in Q1. The Chinese sales company has opened sales offices already to four locations.

Slide 10

– The market outlook for the rest of 2006 looks quite stable. North America has been somewhat affected by working capital management initiatives and inventory reductions of few major customers while the market in Western Europe seems to remain steady and especially strong in East Europe and Asia. Australia and Africa are heading for the winter season, which will seasonally slow down their business for few months.

– Including the completed acquisitions, it is expected that the Group’s net sales for the financial year 2006 will increase with double digit percentage from 2005. The growth rate is though expected to be less than the one for the first quarter.

– The profitability of the Group’s ongoing operations continues to be good. Due to acquisitions, development and integration costs, depreciations and interest expenses, will be above 2005 levels.

– Operating profit is expected to be in absolute terms above last year level but achieving the 2005 operating margin level (operating profit per net sales) will be challenging.

– The project to reduce working capital, especially inventories, and to improve cash flow from operations will continue. The target is to see an improvement on ongoing operations while the new acquisitions and start-ups will tie additional working capital.

– The launch of Rapala’s new products for season 2007 will take place during the second quarter. These include the Group’s first products that contain Ultrabite, the pheromone based fish attractant developed by CEFAS governmental laboratories in the UK

– The second quarter interim report will be published on August 3.

OUTLOOK FOR 2006

Slide 11