23 June 2022
The Board of Directors of Ruoto Invest Oy has decided, in accordance with the authorisation given to it by a unanimous resolution of the shareholders on 9.5.2022, to amend the Board's decision on the directed share issue made earlier on 9.5.2022 as follows:
The maximum number of shares to be issued was increased from 1 440 000 shares to a total of 2 000 000 shares, corresponding to EUR 5 000 000.
The subscription price of the shares is determined in stages according to the amount invested, with the subscriber receiving a discount on the subscription price if the amount invested exceeds a certain amount in euros. The subscription price and the discounts thereon are decided as follows:
for a total investment of between EUR 500 and EUR 499 999, the subscription price of the shares is EUR 2,50 per share; and
for a total investment of between EUR 500 000 and EUR 1 599 999, the subscription price of the shares is EUR 2,45 per share; and
for investments of EUR 1 600 000 or more, the subscription price of the shares is EUR 2,15 per share.
No fractions of shares are given, thusly if the number of shares to be subscribed for is not even, the number of shares to be subscribed for is rounded down to the nearest whole share.
The subscription price of the shares corresponds to the Company's estimate of the fair market price of the shares, which is appropriate for the purpose of this directed share issue.
With regard to shareholders' agreements, the decision was amended so that the acceptance of the subscription of shares is conditional on the subscriber's commitment to the Company's shareholders' agreement dated 25.1.2022 or the Minority Shareholders' Agreement dated 9.5.2022. Investors who invest at least EUR 100 000 in the Company in this financing round will be offered the possibility to join the shareholders' agreement dated 25.1.2022 by means of an adherence agreement.
In addition, the shareholders' agreement was amended to provide that instead of a Board member appointed jointly by the Existing Shareholders, the Funding Shareholders shall have the right to appoint jointly one (1) Board member in accordance with the terms of the shareholders' agreement (capitalized words having the meaning as set forth in the shareholders' agreement).
In addition, it was decided that the subscription price for the Shares may also be paid to the Company's bank account appointed by the Board of Directors of the Company in accordance with the instructions of the Board of Directors or the payment schedule set out in the subscription form, instead of the customer deposit account of Invesdor Ltd.
2 June 2022
Questions to Ruoto, asked by investors
How much capital is committed to the warehouse each year?
ANSWER: The value of the inventory on current turnover varies between €4m and €9m per year. This variation is influenced by seasonal fluctuations in demand. In recent years, inventory levels have had to be maintained at high levels due to interest rates, because of supply problems for many products and the need to anticipate and increase orders. The average inventory turnover rate is 100-180 days. Some products also have to be ordered in large batches. As the supply problems caused by the corona crisis and the war fade away, just-on-time orders will be sought as far as possible. Systematic efforts are being made to reduce working capital levels (i.e. inventory turnover). If the supply problems are overcome in the near future, the business will tie up significantly less working capital than at present.
How much has the COVID-19 influenced Ruoto's growth in recent years?
ANSWER: The corona brought a lot of new enthusiasts to the fishing and hunting side. The number of hobbyists increased, especially in the "cottage fishermen" sector, and as a result, the basic products sold well in the two years of the corona.
The fishing sector as a whole experienced a 15-20% growth between 2020 and 2021. Hunting is more challenging to start due to the permit requirement and therefore hunting has not experienced a similar growth.
It has been noted that a large proportion of the "new" fishing crowd have stayed in the hobby and are now also purchasing much sophisticated/expensive products alongside the basic products. Much of Ruodo's growth has come from gaining a larger market share and offering a wider range of products than its competitors.
How is Ruoto responding to the competition from international online retailers?
ANSWER: Ruoto derives most of its turnover from local stores and the share of e-commerce is still relatively small (around 30%), so Ruoto is building a service-oriented Mega Store chain for fishermen and hunters and is constantly improving the e-commerce side. The growth potential for online sales is high and Ruoto has the know-how for a much larger e-commerce business. In general, the e-commerce side of the industry has grown strongly, but Ruoto has shown that its network of service outlets works well to support e-commerce.
What are the reasons for considering new locations and what is preventing new stores from opening at a faster pace?
ANSWER: New store locations will be weighed based on population, hobbyist base and competition. Ruoto is looking to expand quickly, but at the same time in a prudent manner. Management and key staff resources will be focused on key growth projects.