2010-10-28 12:00:00 CEST
2010-10-28 12:00:34 CEST
REGULATED INFORMATION
Amer Sports - Interim report (Q1 and Q3)
Amer Sports Corporation Interim Report January-September 2010
Amer Sports Corporation
INTERIM REPORT
October 28, 2010 at 1:00 pm
JULY-SEPTEMBER, 2010
· Net sales increased by 14% to EUR 466.9 million (410.6). In local
currencies, net sales increased by 5%.
· EBIT was EUR 55.8 million (40.7) including non-recurring expenses of
EUR 3.5 million. Earnings per share totaled EUR 0.38 (0.29).
· Net cash flow from operating activities totaled EUR -85.0 million (-
25.4) reflecting primarily the seasonality in Winter Sports Equipment.
· Outlook for 2010: Amer Sports expects its 2010 net sales to be
approximately EUR 1.7 billion (2009: 1.5) and EBIT margin to be approximately
6% excluding non-recurring items.
JANUARY-SEPTEMBER, 2010
· Net sales totaled EUR 1,157.0 million (1,050.6), an increase of 10%.
In local currencies, net sales increased by 5%.
· EBIT was EUR 48.4 million (4.4), an improvement of EUR 44.0 million.
EBIT includes non-recurring expenses of EUR 3.5 million. Earnings per share
totaled EUR 0.22 (-0.09).
· Net cash flow from operating activities totaled EUR 9.2 million
(33.3).
7-9/ 7-9/ Ch, Ch, 1-9/ 1-9/ Ch, Ch,
EUR million 2010 2009 % %*) 2010 2009 % %*) 2009
---------------------------------------------------------------------------
Net sales 466.9 410.6 14 5 1,157.0 1,050.6 10 5 1,533.4
Gross profit 209.3 171.3 22 14 504.2 423.5 19 14 620.0
Gross profit % 44.8 41.7 43.6 40.3 40.4
Non-recurring items**) -3.5 - -3.5 - -5.0
EBIT 55.8 40.7 37 25 48.4 4.4 43.8
EBIT % 12.0 9.9 4.2 0.4 2.9
Financing income and
expenses -2.2 -2.3 -15.6 -11.3 -18.4
Earnings before taxes 53.6 38.4 32.8 -6.9 25.4
Net result 47.4 28.8 30.8 -5.2 31.4
Earnings per share, EUR 0.38 0.29 0.22 -0.09 0.28
Net cash flow from
operating activities -85.0 -25.4 9.2 33.3 181.6
Equity ratio, % 47.5 35.9 48.2
Gearing, % 45 104 38
Personnel, period end 6,640 6,455 6,331
*) Change in local currency terms
**) Non-recurring items are exceptional transactions that are not related to
normal business operations. The most common non-recurring items are capital
gains, exceptional write-downs, provisions for planned restructuring and
penalties. Non-recurring items are normally specified individually if they have
material impact on EBIT.
Share-based key indicators have been adjusted for the impact of the share issue
in 2009.
HEIKKI TAKALA, PRESIDENT AND CEO:"In the third quarter, we continued to drive top line growth and profitability.
We improved gross profit percentage by three points and kept operating expenses
under control. The progress was broad based: all business segments improved
their EBIT margins.
Sales increased particularly in Footwear. Overall in Apparel and Footwear sales
increased 10%. Fitness had good development as sales increased by 7% and EBIT
improved markedly. Also Cycling had a strong quarter and net sales increased by
14%. On the other hand, Racquet Sports net sales declined by 8% reflecting the
sluggish global tennis market.
Amer Sports announced in September its new strategic priorities and long-term
financial targets. The strategy emphasizes clear portfolio roles and synergies,
faster growth in softgoods, winning with the local consumer, and strengthening
commercial fundamentals through sales and channel management. Operational
excellence continues to be a key cornerstone.
We are moving fast to implement the programs across the businesses to reach the
long-term financial targets. To mention a few milestones, earlier in October, we
appointed a President for our Apparel business and the regional general managers
of the sales and distribution organization were appointed members of the
Executive Board.
I'm excited about the new strategic direction of the company. I think both the
company and our consumers and customers will benefit greatly from the efforts we
are now putting in place."
For further information, please contact:
Heikki Takala, President and CEO, tel. +358 9 7257 8210
Pekka Paalanne, Executive Vice President, CFO, tel. +358 9 7257 8212
Päivi Antola, Director, IR and Financial Communications, tel. +358 9 7257 8233
TELEPHONE CONFERENCE
An English-language telephone conference call for investors and analysts will be
held today at 3:00 pm Finnish time. To participate in the conference call,
please call +44 (0)20 7138 0824 (UK/international dial-in number). The
conference can also be followed from a direct transmission on the internet,
atwww.amersports.com. A recorded version will later be available at the same
address: replay number +44 (0)20 7111 1244, and access code 5719314#.
Amer Sports Corporation will publish its 2010 results bulletin on Thursday,
February 3, 2011.
INTERIM REPORT
NET SALES AND EBIT IN JULY-SEPTEMBER, 2010
Amer Sports net sales in July-September 2010 totaled EUR 466.9 million (410.6),
an increase of 14% compared to July-September 2009. Net sales increased by 5% in
local currency terms.
In local currency terms, EMEA increased 8% and the Americas 4%. Sales in Asia
Pacific were down by 4%, mainly as a result of low demand in the tennis market
in Japan.
Net sales by business segment
7-9/ 7-9/ Change Change % of sales % of sales
EUR million 2010 2009 % %*) 7-9/2010 7-9/2009
------------------------------------------------------------------
Winter and Outdoor 300.3 262.4 14 7 64 64
Ball Sports 114.0 103.4 10 0 25 25
Fitness 52.6 44.8 17 7 11 11
------------------------------------------------------------------
Total 466.9 410.6 14 5 100 100
------------------------------------------------------------------
*) In local currency terms
Geographic breakdown of net sales
7-9/ 7-9/ Change Change % of sales % of sales
EUR million 2010 2009 % %*) 7-9/2010 7-9/2009
------------------------------------------------------------
Americas 192.3 163.6 18 4 41 40
EMEA 226.9 204.0 11 8 49 50
Asia Pacific 47.7 43.0 11 -4 10 10
------------------------------------------------------------
Total 466.9 410.6 14 5 100 100
------------------------------------------------------------
*) In local currency terms
Group EBIT of EUR 55.8 million improved by EUR 15.1 million. Higher gross
margins contributed EUR 15.1 million to the EBIT growth, while increased sales
volumes contributed EUR 9.9 million. Operating expenses increased by EUR 11.5
million driven mainly by increased sales, distribution and marketing expenses
(all in local currencies). Headquarters' EBIT of EUR -8.7 million (-4.4)
includes a non-recurring expense of EUR 3.5 million relating to a solved import
duties dispute in Brazil.
EBIT by business segment
7-9/ 7-9/
EUR million 2010 2009
----------------------------
Winter and Outdoor 58.2 44.1
Ball Sports 3.5 2.4
Fitness 2.8 -1.4
Headquarters -8.7 -4.4
----------------------------
Total 55.8 40.7
----------------------------
Net financial expenses totaled EUR 2.2 million (2.3) including net interest
expenses of EUR 5.6 million (5.4) and unrealized net foreign exchange gains
totaling EUR 3.4 million (EUR 3.3 million). Earnings before taxes totaled
EUR 53.6 million (38.4), and earnings per share were EUR 0.38 (0.29).
NET SALES AND EBIT IN JANUARY-SEPTEMBER, 2010
Amer Sports net sales in January-September totaled EUR 1,157.0 million
(1,050.6), an increase of 10% compared to January-September 2009. Net sales
increased by 5% in local currency terms. In local currency terms, EMEA increased
9%, Asia Pacific 4% and the Americas 2%.
Net sales by business segment
1-9/ 1-9/ Change Change % of sales % of sales
EUR million 2010 2009 % %*) 1-9/2010 1-9/2009
----------------------------------------------------------------------
Winter and Outdoor 598.5 533.4 12 7 52 51
Ball Sports 413.3 382.0 8 3 36 36
Fitness 145.2 135.2 7 4 12 13
----------------------------------------------------------------------
Total 1,157.0 1,050.6 10 5 100 100
----------------------------------------------------------------------
*) In local currency terms
Geographic breakdown of net sales
1-9/ 1-9/ Change Change % of sales % of sales
EUR million 2010 2009 % %*) 1-9/2010 1-9/2009
----------------------------------------------------------------
Americas 503.8 465.9 8 2 44 44
EMEA 519.9 468.9 11 9 45 45
Asia Pacific 133.3 115.8 15 4 11 11
----------------------------------------------------------------
Total 1,157.0 1,050.6 10 5 100 100
----------------------------------------------------------------
*) In local currency terms
Group EBIT of EUR 48.4 million (4.4) improved by EUR 44.0 million with the main
contributions coming from improved gross margins, impact EUR 38.4 million, and
sales growth, impact EUR 23.3 million. Operating expenses increased EUR 22.8
million driven by increased sales and distribution costs as well as personnel
related costs (all in local currencies). Headquarters' EBIT of EUR -20.6 million
(-13.9) includes a non-recurring expense of EUR 3.5 million.
EBIT by business segment
1-9/ 1-9/ % of sales % of sales
EUR million 2010 2009 1-9/2010 1-9/2009
----------------------------------------------------
Winter and Outdoor 35.7 4.0 6.0 0.7
Ball Sports 34.9 21.3 8.4 5.6
Fitness -1.6 -7.0
Headquarters -20.6 -13.9
----------------------------------------------------
Total 48.4 4.4 4.2 0.4
----------------------------------------------------
Net financial expenses totaled EUR 15.6 million (11.3). Net financial expenses
included net interest expenses of EUR 12.7 million (18.9) and unrealized net
foreign exchange losses totaling EUR 2.9 million (gains of EUR 7.9 million).
Earnings before taxes totaled EUR 32.8 million (-6.9) and taxes were EUR -2.0
million (positive 1.7) giving a tax rate 6.1% (24.6%) due to increased deferred
net tax assets. Earnings per share totaled EUR 0.22 (-0.09).
CAPITAL EXPENDITURE
Group capital expenditure totaled EUR 18.7 million (21.5). Depreciation was
EUR 26.5 million (25.4). The whole year CAPEX is expected to be in line with
depreciation.
CASH FLOW AND FINANCIAL POSITION
In the January-September period, net cash flow from operating activities was EUR
9.2 million (33.3). Compared to the end of 2009, inventories increased by EUR
109 million mainly due to the seasonality in the Winter Sports Equipment. This
was partly offset by overall reduction in receivables of EUR 30 million and
increase in payables of EUR 20 million. Net cash flow from investment activities
totaled EUR -16.8 million (-22.0).
In July-September, net cash flow from operating activities totaled EUR -85.0
million (-25.4) mainly reflecting the normal working capital seasonality in
Winter Sports Equipment driven by higher receivables. Last year's exceptional
cash flow was a result of special efforts in working capital management. Working
capital management continues to be a key focus area, however a similar decrease
to last year's performance in working capital is not repeatable as inventories
are now closer to target levels.
At the end of the period, the Group's net debt amounted to EUR 341.5 million
(December 31, 2009: 282.5).
At the end of the period, interest-bearing liabilities amounted to EUR 391.7
million (December 31, 2009: 404.1) consisting of short-term debt of EUR 101.5
million and long-term debt of EUR 290.2 million. The EUR 60 million hybrid bond
is accounted as equity.
Short-term debt consists of commercial papers issued on the Finnish markets of
EUR 18.9 (Dec 31, 2009: 112.3) and repayments of long-term loans of EUR 82.6
million (Dec 31, 2009: 9.0). The total size of the commercial paper program is
EUR 500 million.
Cash and cash equivalents totaled EUR 50.2 million at the end of the period (Dec
31, 2009: 121.6).
The syndicated loan issued in 2005 consists of a EUR 325 million revolving
credit facility and a term loan of USD 100 million. EUR 40 million of the
revolving credit facility has been raised.
Amer Sports Corporation issued a EUR 150 million bond on June 4, 2010 targeted
at domestic and international investors. This five-year bond carries an annual
fixed rate coupon of 5.375%.
The equity ratio at the end of September was 47.5% (Dec, 31, 2009: 48.2%) and
gearing was 45% (Dec 31, 2009: 38%).
BUSINESS SEGMENT REVIEWS
WINTER AND OUTDOOR
7-9/ 7-9/ 1-9/ 1-9/
EUR million 2010 2009 Ch % Ch %*) 2010 2009 Ch % Ch %*) 2009
---------------------------------------------------------------------------
Net sales
Winter Sports
Equipment 133.1 119.6 11 4 185.6 168.0 10 5 371.7
Apparel and
Footwear 117.3 99.3 18 10 265.9 230.9 15 9 304.7
Cycling 25.2 21.5 17 14 79.6 73.3 9 8 100.4
Sports Instruments 24.7 22.0 12 5 67.4 61.2 10 5 85.8
Net sales, total 300.3 262.4 14 7 598.5 533.4 12 7 862.6
EBIT 58.2 44.1 32 22 35.7 4.0 46.5
Personnel, period end 4,310 4,067 3,940
*) Change in local currency terms
In July-September, Winter and Outdoor net sales totaled EUR 300.3 million
(262.4), an increase of 7% in local currencies. The breakdown of net sales by
business area was as follows: Winter Sports Equipment 44%, Apparel and Footwear
39%, Cycling 9%, and Sports Instruments 8%. EMEA accounted for 63% of net sales,
the Americas for 28%, and Asia Pacific for 9%.
7-9/ 7-9/ 1-9/ 1-9/
EUR million 2010 2009 Ch % Ch %*) 2010 2009 Ch % Ch %*) 2009
---------------------------------------------------------------------
Americas 84.7 70.1 21 6 141.1 130.3 8 -1 181.1
EMEA 189.7 168.7 12 10 392.7 349.3 12 10 585.4
Asia Pacific 25.9 23.6 10 -3 64.7 53.8 20 9 96.1
---------------------------------------------------------------------
Total net sales 300.3 262.4 14 7 598.5 533.4 12 7 862.6
---------------------------------------------------------------------
*) Change in local currency terms
In July-September, EBIT improved by EUR 14.1 million to EUR 58.2 million (44.1).
Higher gross margins contributed EUR 10.4 million to EBIT growth and increased
sales volumes contributed EUR 9.1 million. Operating expenses increased by EUR
9.4 million mainly driven by increased sales and distribution expenses (all in
local currencies).
Winter Sports Equipment
In July-September, Winter Sports Equipment net sales totaled EUR 133.1 million
(119.6) and were up by 4% in local currencies. October-December is the main
delivery period in winter sports equipment.
Apparel and Footwear
In July-September, Apparel and Footwear net sales totaled EUR 117.3 million
(99.3) and were 10% up in local currencies. Strong growth continued in footwear.
The order book for the apparel and footwear fall/winter season is strong.
Cycling
In July-September, Cycling's net sales totaled EUR 25.2 million (21.5) and were
14% up in local currencies. The good development is due to high pre-season
deliveries for 2011 product ranges.
Sports Instruments
In July-September, Sports Instruments net sales totaled EUR 24.7 million (22.0),
an increase of 5% in local currencies. Sales of outdoor products continued
strong.
BALL SPORTS
7-9/ 7-9/ 1-9/ 1-9/
EUR million 2010 2009 Ch % Ch %*) 2010 2009 Ch % Ch %*) 2009
---------------------------------------------------------------------------
Net sales
Racquet Sports 53.3 52.8 1 -8 188.5 181.8 4 -1 222.7
Team Sports 44.6 35.8 25 11 161.1 143.7 12 8 187.3
Golf 16.1 14.8 9 0 63.7 56.5 13 7 66.7
Net sales, total 114.0 103.4 10 0 413.3 382.0 8 3 476.7
EBIT 3.5 2.4 46 30 34.9 21.3 64 63 23.5
Personnel, period end 1,592 1,618 1,586
*) Change in local currency terms
In July-September, Ball Sports net sales totaled EUR 114.0 million (103.4) and
were flat in local currencies. Growth in Team Sports was offset by declining
sales in Racquet Sports. The breakdown of net sales by business area was as
follows: Racquet Sports 47%, Team Sports 39% and Golf 14%.
The Americas accounted for 63% of net sales, EMEA for 22% and Asia Pacific for
15%. In local currency terms, the Americas increased by 4%. Sales in EMEA and
Asia Pacific were down by 7%, mainly as a result of a soft tennis market.
7-9/ 7-9/ 1-9/ 1-9/
EUR million 2010 2009 Ch % Ch %*) 2010 2009 Ch % Ch %*) 2009
------------------------------------------------------------------
Americas 72.3 62.2 16 4 262.1 237.2 10 6 298.7
EMEA 24.4 25.6 -5 -7 95.5 93.4 2 0 111.5
Asia Pacific 17.3 15.6 11 -7 55.7 51.4 8 -3 66.5
------------------------------------------------------------------
Total 114.0 103.4 10 0 413.3 382.0 8 3 476.7
------------------------------------------------------------------
*) Change in local currency terms
In July-September, EBIT improved by EUR 1.1 million to EUR 3.5 million (2.4).
Higher gross margins contributed EUR 3.0 million to the EBIT growth. The
improvement in gross margin is the outcome of less price discounting. Operating
expenses increased by EUR 1.8 million.
Racquet Sports
In July-September, Racquet Sports net sales totaled EUR 53.3 million (52.8). In
local currencies, net sales were down 8% with the Americas down by 8%, EMEA down
by 10% and Asia Pacific down by 7%. The decline is due to an overall low demand
in the tennis market. The Americas accounted for 43% of net sales, for EMEA 32%
and Asia Pacific for 25%.
Team Sports
In July-September, Team Sports net sales totaled EUR 44.6 million (35.8) and
were 11% up in local currencies. Growth was driven by the Americas, which
accounted for 94% of total sales and grew by 13% in local currencies. Solid
growth was achieved among all major product categories.
Golf
In the seasonally low July-September period, Golf net sales totaled EUR 16.1
million (14.8) and were at a similar level to the previous year in local
currencies.
FITNESS
7-9/ 7-9/ 1-9/ 1-9/
EUR million 2010 2009 Ch % Ch %*) 2010 2009 Ch % Ch %*) 2009
-------------------------------------------------------------------------
Net sales 52.6 44.8 17 7 145.2 135.2 7 4 194.1
EBIT 2.8 -1.4 -1.6 -7.0 -7.5
Personnel, period end 666 699 737
*) Change in local currency terms
In July-September, Fitness net sales totaled EUR 52.6 million (44.8) and were
7% up in local currencies. The Americas accounted for 67% of net sales, EMEA for
24%, and Asia Pacific for 9%. In local currency terms, EMEA increased by 27% and
Asia Pacific by 7%. Sales in the Americas were at last year's level.
7-9/ 7-9/ 1-9/ 1-9/
EUR million 2010 2009 Ch % Ch %*) 2010 2009 Ch % Ch %*) 2009
----------------------------------------------------------------
Americas 35.3 31.3 13 1 100.6 98.4 2 -1 140.7
EMEA 12.8 9.7 32 27 31.7 26.2 21 18 38.1
Asia Pacific 4.5 3.8 18 7 12.9 10.6 22 14 15.3
----------------------------------------------------------------
Total 52.6 44.8 17 7 145.2 135.2 7 4 194.1
----------------------------------------------------------------
*) Change in local currency terms
In July-September, EBIT increased by EUR 4.2 million to EUR 2.8 million (-1.4).
Higher gross margins contributed EUR 1.4 million to EBIT growth and increased
sales volumes contributed EUR 1.3 million. Operating expenses were down by EUR
1.0 million (all in local currencies).
Commercial business (clubs and institutions) was up in all regions. Sales of
premium consumer equipment for home use continued to be sluggish.
PERSONNEL
At the end of September 2010, the Group employed 6,640 people (6,455). The
average number of people in January-September was 6,448 (6,345).
|September 30,|September 30,|
| 2010| 2009|Change %
-------------------+-------------+-------------+--------
Winter and Outdoor| 4,310| 4,067| 6
-------------------+-------------+-------------+--------
Ball Sports | 1,592| 1,618| -2
-------------------+-------------+-------------+--------
Fitness | 666| 699| -5
-------------------+-------------+-------------+--------
Headquarters | 72| 71| 1
-------------------+-------------+-------------+--------
Total | 6,640| 6,455| 3
-------------------+-------------+-------------+--------
|September 30,|September 30,|
| 2010| 2009|Change %
-------------+-------------+-------------+--------
EMEA | 3,936| 3,717| 6
-------------+-------------+-------------+--------
Americas | 2,188| 2,187| 0
-------------+-------------+-------------+--------
Asia Pacific| 516| 551| -6
-------------+-------------+-------------+--------
Total | 6,640| 6,455| 3
-------------+-------------+-------------+--------
SHARES AND SHAREHOLDERS
The company's paid-up share capital recorded in the Trade Register as of
September 30, 2010 was EUR 292,182,204. On September 30, 2010, the company had a
market capitalization of EUR 1,094.2 million (430.4), excluding its own shares
of 342,963.
A total of 38,063 shares granted as share-based incentives were returned to Amer
Sports International Oy in January-September in accordance with the terms of the
incentive plan as employment ended. In addition, as part of his remuneration,
Amer Sports International Oy transferred 30,000 shares to Heikki Takala, Amer
Sports' President and CEO.
The Annual General Meeting on March 10, 2010 authorized the Board of Directors
to decide on the repurchase of a maximum of 7,000,000 of the company's own
shares. The repurchase authorization is valid 18 months from the decision of the
Annual General Meeting.
The Board of Directors was also authorized to decide on issuing new shares
and/or conveying the company's own shares held by the company as follows: the
Board of Directors is entitled to decide on issuing a maximum of 7,000,000 new
shares or on conveying a maximum of 7,000,000 of the company's own shares held
by the company. The Board of Directors decides on all the conditions of the
issuance of shares. The issuance of shares may be carried out in deviation from
the shareholders' pre-emptive rights (directed issue). The authorization
includes the possibility to issue own shares to the company for free. The
authorization to issue shares and to convey the company's own shares is valid
until two (2) years from the date of the decision of the Annual General Meeting
and it does not revoke the share issue authorization given by the Annual General
Meeting on March 5, 2009.
The Annual General Meeting on March 5, 2009 authorized the Board of Directors to
decide on issuing new shares on the following terms and conditions: new shares
may be issued and the company's own shares held by the Company may be conveyed
against payment to the company's shareholders in proportion to their current
shareholdings in the company. The Board of Directors is entitled to decide on
issuing a maximum of 7,000,000 new shares. The subscription price of the new
shares shall be recorded under the invested non-restricted equity fund. The
authorization to issue shares is valid until two (2) years from the date of the
decision of the Annual General Meeting.
To date these authorizations have not been used.
Apart from the above, the Board of Directors has no current authorization to
issue shares, convertible bonds or warrant programs.
Trading in shares
During the review period January-September, a total of 40.5 million (55.3) Amer
Sports shares with a value totaling EUR 335.0 million (365.3) were traded on the
NASDAQ OMX Helsinki exchange. Share turnover was 33.5% (76.0%) (expressed as a
proportion of the average number of shares excluding own shares).
At the close of the review period, the last trade in Amer Sports Corporation
shares took place at a price of EUR 9.03. The high on the NASDAQ OMX Helsinki
exchange for the review period was EUR 9.24 and the low was EUR 6.82. The
average share price during the review period was EUR 8.26.
At the end of September, Amer Sports Corporation had 14,157 registered
shareholders (13,808). Outside Finland, ownership and nominee registrations
represented 51.6% (53.2%) of the company's shares. Amer Sports held 342,963 of
its own shares, all of them owned by Amer Sports International Oy. The number of
own shares corresponds to 0.3% of all Amer Sports shares.
RESOLUTIONS OF THE ANNUAL GENERAL MEETING
Documentation and press releases relating to the resolutions approved by the
Amer Sports Corporation Annual General Meeting held on March 10, 2010 are
available on the company's website at www.amersports.com/investors.
STRATEGY UPDATE AND NEW LONG-TERM FINANCIAL TARGETS
In September, Amer Sports announced new strategic priorities and long-term Group
financial targets. The strategy defines internal financial as well as synergy
and scale targets for each unit in the Group portfolio. The strategy emphasizes
faster growth in apparel and footwear (softgoods), excellence in consumer-
centric product creation and brand marketing, and strengthening commercial
fundamentals through sales and channel management (go-to-market). Operational
excellence continues to be a key cornerstone. The new financial targets put the
focus on profitable growth and strong cash flow.
The new long-term financial targets are:
· Growth: Delivering organic, currency-neutral annual growth of 5%.
· Profitability: EBIT of at least 10% of net sales.
· Cash flow: Annual free cash flow equal to net profit.
· Balance sheet structure: Year-end Net Debt / EBITDA ratio of 3 or
less.
The cash flow target has been set to synchronize working capital management with
targeted growth and profitability. The Net Debt / EBITDA ratio has been set to
optimize balance sheet structure.
The strategic cornerstones of Amer Sports' development are as follows:
· Clear portfolio roles and business synergies
· Faster growth in softgoods
· Winning with consumers
· Winning in go-to-market
· Operational excellence
All business units will be developed with clear portfolio roles implying that
each unit has a specific growth and profitability target with a clearly assigned
role in creating scale and synergy for the company. Most group synergies lie
within the Ball Sports, Winter Sports Equipment and Apparel and Footwear
businesses which are the focus of the group's integration and synergistic
development efforts.
Amer Sports is pursuing faster growth in softgoods by moving to category-based
development across brands to build scale in softgoods R&D, product line
management, sourcing and manufacturing. To ensure local relevancy and winning
with consumers, the group will establish a set-up for local consumer insight and
reinforce global marketing capabilities. Expanding the distribution footprint
both in developed and emerging markets as well as growth in own retail and e-
commerce are the focus of winning in go-to-market. The group will continue to
drive operational excellence, tight working capital management and gross margin
improvement.
SIGNIFICANT RISKS AND UNCERTAINTIES
Amer Sports' business is balanced by its broad portfolio of sports and brands as
well as its presence in all major markets. Short-term risks for Amer Sports are
particularly associated with product costs and Amer Sports' ability to
manufacture, source and deliver products on a timely basis. Other short-term
risks are consumer demand in North America, Europe and Japan, and successful
execution of the company's efficiency improvement measures.
Further information on the company's business risks and uncertainty factors is
available at the company's web site, www.amersports.com/investors
EVENTS AFTER THE REVIEW PERIOD
Amer Sports appointed Andy Towne to the position of President of Apparel with
effect from October 11, 2010. Mr Towne reports to Heikki Takala, Amer Sports'
President and CEO and is a member of the Executive Board. Jean-Marc Pambet,
previously President of Apparel and Footwear, continues as President of Footwear
as well as President of Salomon.
In October, Amer Sports also appointed the regional general managers of the
sales and channel management members of Amer Sports Executive Board, starting on
October 15, 2010. The new Executive Board members are Michael White, General
Manager EMEA; Mike Dowse, General Manager Americas, and Matt Gold, General
Manager Asia Pacific. White, Dowse and Gold all report to Heikki Takala. SVP,
Sales and Channel Management Thomas Ehrnrooth left the company on October
15, 2010.
OUTLOOK 2010
Amer Sports expects its 2010 net sales to be approximately EUR 1.7 billion
(2009: 1.5) and EBIT margin to be approximately 6% excluding non-recurring
items.
Previous outlook announced in the second quarter interim report was as follows:
Amer Sports expects its 2010 net sales to be approximately EUR 1.7 billion
(2009: 1.5) and EBIT margin to improve to the mid-single-digit level.
The sporting goods market is expected to recover moderately, but with
significant regional and sports area specific differences. Winter sports
equipment market has recovered due to good snow conditions during previous
winter season. Amer Sports' this season pre-orders in Winter Sports Equipment
were up approximately 15% compared to last year. In Apparel and Footwear,
fall/winter pre-orders indicated a faster sales growth in the second half of the
year compared to the first half, reflecting continuous improvement in the
product offering and commercial gains.
TABLES
The notes are an integral part of consolidated interim financial information.
Unaudited
EUR million
CONSOLIDATED RESULTS
7-9/ 7-9/ Change 1-9/ 1-9/ Change
2010 2009 % 2010 2009 % 2009
--------------------------------------------------------------------------------
NET SALES 466.9 410.6 14 1,157.0 1,050.6 10 1,533.4
Cost of goods sold -257.6 -239.3 -652.8 -627.1 -913.4
--------------------------------------------------------------------------------
GROSS PROFIT 209.3 171.3 22 504.2 423.5 19 620.0
License income 2.4 2.0 6.8 6.6 8.2
Other operating income 0.4 1.0 2.6 4.9 4.6
R&D expenses -12.5 -11.5 -40.7 -37.9 -52.0
Selling and marketing
expenses -104.3 -90.2 -311.6 -287.4 -398.6
Administrative and other
expenses -39.5 -31.9 -112.9 -105.3 -138.4
--------------------------------------------------------------------------------
EARNINGS BEFORE
INTEREST AND TAXES 55.8 40.7 37 48.4 4.4 43.8
% of net sales 12.0 9.9 4.2 0.4 2.9
Financing income and
expenses -2.2 -2.3 -15.6 -11.3 -18.4
--------------------------------------------------------------------------------
EARNINGS BEFORE TAXES 53.6 38.4 32.8 -6.9 25.4
Taxes -6.2 -9.6 -2.0 1.7 6.0
--------------------------------------------------------------------------------
NET RESULT 47.4 28.8 30.8 -5.2 31.4
--------------------------------------------------------------------------------
Attributable to:
Equity holders of the parent
company 47.3 28.7 30.7 -5.3 31.3
Non-controlling interests 0.1 0.1 0.1 0.1 0.1
Earnings per share, EUR 0.38 0.29 0.22 -0.09 0.28
Earnings per share, diluted,
EUR 0.38 0.29 0.22 -0.09 0.28
Adjusted average number of
shares in issue less own
shares, million 121.2 93.0 121.2 93.0 97.7
Adjusted average number of
shares in issue less own
shares,
diluted, million 121.2 93.0 121.2 93.0 97.7
Equity per share, EUR 6.23 5.80 6.05
ROCE, % *) 9.1 3.8 4.3
ROE, % 5.5 -1.3 5.0
Average rates used:
EUR 1.00 = USD 1.32 1.36 1.39
*) 12 months' rolling average
Share-based key indicators have been adjusted for the impact of the share issue
in 2009.
STATEMENT OF COMPREHENSIVE INCOME
7-9/ 7-9/ 1-9/ 1-9/
2010 2009 2010 2009 2009
----------------------------------------------------------------------
Net result 47.4 28.8 30.8 -5.2 31.4
Other comprehensive income
Translation differences -24.4 -5.8 18.2 -6.3 -0.5
Cash flow hedges -14.3 1.0 -4.6 -0.6 1.1
Income tax related to
cash flow hedges 3.7 -0.2 1.2 0.2 -0.3
----------------------------------------------------------------------
Other comprehensive income,
net of tax -35.0 -5.1 14.8 -6.8 0.3
----------------------------------------------------------------------
Total comprehensive income 12.4 23.7 45.6 -12.0 31.7
----------------------------------------------------------------------
Total comprehensive income attributable to:
Equity holders of the parent
company 12.3 23.6 45.5 -12.1 31.6
Non-controlling interests 0.1 0.1 0.1 0.1 0.1
NET SALES BY BUSINESS SEGMENT
7-9/ 7-9/ Change 1-9/ 1-9/ Change
2010 2009 % 2010 2009 % 2009
--------------------------------------------------------------------
Winter and Outdoor 300.3 262.4 14 598.5 533.4 12 862.6
Ball Sports 114.0 103.4 10 413.3 382.0 8 476.7
Fitness 52.6 44.8 17 145.2 135.2 7 194.1
--------------------------------------------------------------------
Total 466.9 410.6 14 1,157.0 1,050.6 10 1,533.4
--------------------------------------------------------------------
EBIT BY BUSINESS SEGMENT
7-9/ 7-9/ Change 1-9/ 1-9/ Change
2010 2009 % 2010 2009 % 2009
------------------------------------------------------------
Winter and Outdoor 58.2 44.1 32 35.7 4.0 46.5
Ball Sports 3.5 2.4 46 34.9 21.3 64 23.5
Fitness 2.8 -1.4 -1.6 -7.0 -7.5
Headquarters -8.7 -4.4 -20.6 -13.9 -18.7
------------------------------------------------------------
Total 55.8 40.7 37 48.4 4.4 43.8
------------------------------------------------------------
GEOGRAPHIC BREAKDOWN OF NET SALES
7-9/ 7-9/ Change 1-9/ 1-9/ Change
2010 2009 % 2010 2009 % 2009
--------------------------------------------------------------
Americas 192.3 163.6 18 503.8 465.9 8 620.5
EMEA 226.9 204.0 11 519.9 468.9 11 735.0
Asia Pacific 47.7 43.0 11 133.3 115.8 15 177.9
--------------------------------------------------------------
Total 466.9 410.6 14 1,157.0 1,050.6 10 1,533.4
--------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
Note 7-9/2010 7-9/2009 1-9/2010 1-9/2009 2009
--------------------------------------------------------------------------------
EBIT 55.8 40.7 48.4 4.4 43.8
Adjustments to cash flow fromoperating activities and
depreciation 8.3 8.6 26.7 25.4 34.6
Change in working capital -145.8 -68.5 -59.4 39.5 136.7
--------------------------------------------------------------------------------
Cash flow from operating
activities
before financing items and taxes -81.7 -19.2 15.7 69.3 215.1
Interest paid and received -1.7 -3.4 -9.2 -20.2 -20.9
Income taxes paid and received -1.6 -2.8 2.7 -15.8 -12.6
--------------------------------------------------------------------------------
Net cash flow from operating
activities -85.0 -25.4 9.2 33.3 181.6
Acquired operations - - - -1.2 -3.0
Capital expenditure on non-
current
tangible and intangible assets -7.2 -6.4 -18.7 -21.5 -39.5
Proceeds from sale of tangible
non-
current assets 0.7 - 1.9 0.7 1.4
--------------------------------------------------------------------------------
Net cash flow from investing
activities -6.5 -6.4 -16.8 -22.0 -41.1
Share issue, net - - - - 151.5
Dividends paid 5 - - -19.5 -11.8 -11.8
Hybrid bond 3 - - -7.2 60.0 60.0
Change in debt and other
financing
items -43.5 70.1 -40.1 -69.2 -290.9
--------------------------------------------------------------------------------
Net cash flow from financing
activities -43.5 70.1 -66.8 -21.0 -91.2
Cash and cash equivalents on
July 1/January 1 185.9 23.8 121.6 72.1 72.1
Translation differences -0.7 0.3 3.0 0.0 0.2
Change in cash and cash
equivalents -135.0 38.3 -74.4 -9.7 49.3
--------------------------------------------------------------------------------
Cash and cash equivalents on
September 30/December 31 50.2 62.4 50.2 62.4 121.6
CONSOLIDATED BALANCE SHEET
September September
Note 30, 2010 30, 2009 December 31, 2009
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
Goodwill 286.1 270.3 273.6
Other intangible non-current assets 208.8 205.5 210.1
Tangible non-current assets 135.2 128.6 135.0
Other non-current assets 73.5 62.1 74.3
Inventories and work in progress 354.8 311.1 234.6
Receivables 486.6 469.3 475.4
Cash and cash equivalents 50.2 62.4 121.6
--------------------------------------------------------------------------------
Total assets 2 1,595.2 1,509.3 1,524.6
--------------------------------------------------------------------------------
Shareholders' equity and liabilities
--------------------------------------------------------------------------------
Shareholders' equity 3 757.5 541.3 735.3
Long-term interest-bearing 290.2 469.1 282.8
liabilities
Other long-term liabilities 18.1 13.1 14.4
Current interest-bearing liabilities 101.5 158.1 121.3
Other current liabilities 399.9 300.3 340.0
Provisions 28.0 27.4 30.8
--------------------------------------------------------------------------------
Total shareholders' equity and 1,595.2 1,509.3 1,524.6
liabilities
--------------------------------------------------------------------------------
Equity ratio, % 47.5 35.9 48.2
Gearing, % 45 104 38
EUR 1.00 = USD 1.34 1.47 1.44
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Fair Inves-
Fund Trans- value ted
Sh- Pre- for lation and unre- Retai-
are mi- own diffe- other stricted ned
capi- um sha- ren- reser- equity Hybrid ear-
Note tal fund res ces ves reserve bond nings Total
----------------------------------------------------------------------------
Balance at
Jan. 1,
2009 292.2 12.1 -5.7 -62.5 -6.2 - - 275.6 505.5
Other
compre-
hensive
income:
Translation
differences -6.3 -6.3
Cash flow
hedges -0.6 -0.6
Income tax
related to
cash flow
hedges 0.2 0.2
Net result -5.3 -5.3
Total
comp-
rehensive
income -6.3 -0.5 -5.3 -12.1
Transact-
ions with
owners:
Dividend
distribution 5 -11.6 -11.6
Hybrid
bond 3 60.0 -3.0 57.0
----------------------------------------------------------------------------
Balance at
Sep. 30,
2009 292.2 12.1 -5.7 -68.8 -6.7 - 60.0 255.7 538.8
Balance at
Jan. 1,
2010 292.2 12.1 -5.6 -63.0 -5.4 151.5 60.0 290.9 732.7
Other
compre-
hensive
income:
Translation
differences 18.2 18.2
Cash flow
hedges -4.6 -4.6
Income tax
related to
cash flow
hedges 1.2 1.2
Net result 30.7 30.7
Total
comp-
rehensive
income 18.2 -3.4 30.7 45.5
Transact-
ions with
owners:
Dividend
distribution 5 -19.4 -19.4
Hybrid
bond 3 -3.9 -3.9
----------------------------------------------------------------
Balance at
Sep. 30,
2010 292.2 12.1 -5.6 -44.8 -8.8 151.5 60.0 298.3 754.9
Total
Non- share-
cont- hold-
rolling ers'
inte- equ-
Note rests ity
--------------------------------
Balance at
Jan. 1,
2009 2.6 508.1
Other
compre-
hensive
income:
Translation
differences -6.3
Cash flow
hedges -0.6
Income tax
related to
cash flow
hedges 0.2
Net result 0.1 -5.2
Total
comp-
rehensive
income 0.1 -12.0
Transact-
ions with
owners:
Dividend
distribution 5 -0.2 -11.8
Hybrid
bond 3 57.0
--------------------------------
Balance at
Sep. 30,
2009 2.5 541.3
Balance at
Jan. 1,
2010 2.6 735.3
Other
compre-
hensive
income:
Translation
differences 18.2
Cash flow
hedges -4.6
Income tax
related to
cash flow
hedges 1.2
Net result 0.1 30.8
Total
comp-
rehensive
income 0.1 45.6
Transact-
ions with
owners:
Dividend
distribution 5 -0.1 -19.5
Hybrid bond 3 -3.9
--------------------------------
Balance at
Sep. 30,
2010 2.6 757.5
QUARTERLY BREAKDOWN OF NET SALES AND EBIT
Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ Q4/
NET SALES 2010 2010 2010 2009 2009 2009 2009 2008
------------------------------------------------------------------
Winter and Outdoor 300.3 116.5 181.7 329.2 262.4 106.6 164.4 326.6
Ball Sports 114.0 153.9 145.4 94.7 103.4 135.7 142.9 110.0
Fitness 52.6 47.1 45.5 58.9 44.8 42.4 48.0 58.7
------------------------------------------------------------------
Total 466.9 317.5 372.6 482.8 410.6 284.7 355.3 495.3
------------------------------------------------------------------
Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ Q4/
EBIT 2010 2010 2010 2009 2009 2009 2009 2008
------------------------------------------------------------------
Winter and Outdoor 58.2 -24.2 1.7 42.5 44.1 -29.2 -10.9 36.7
Ball Sports 3.5 17.0 14.4 2.2 2.4 7.4 11.5 3.4
Fitness 2.8 -3.7 -0.7 -0.5 -1.4 -2.2 -3.4 -2.3
Headquarters -8.7 -6.0 -5.9 -4.8 -4.4 -5.4 -4.1 -2.6
------------------------------------------------------------------
Total 55.8 -16.9 9.5 39.4 40.7 -29.4 -6.9 35.2
------------------------------------------------------------------
THE NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
The interim financial information has been prepared in accordance with IAS 34
'Interim Financial Reporting' and in compliance with IFRS standards and
interpretations in force as at January 1, 2010, as adopted by the EU. The IFRS
recognition and measurement principles as described in the annual financial
statements for 2009 have also been applied in the preparation of the interim
financial information, with the changes mentioned below.
The relative proportion of the estimated tax charge for the full financial year
has been charged against the result for the period.
Standards and interpretations adopted from the beginning of 2010:
IAS 27 (revised) "Consolidated and Separate Financial Statements" changed the
presentation of the statement of changes in shareholders' equity in accordance
with IAS 1: each item of other comprehensive income needs to be disclosed
separately in the statement of changes in shareholders' equity.
2. SEGMENT INFORMATION
Amer Sports has three business segments: Winter and Outdoor, Ball Sports and
Fitness.
The accounting policies for segment reporting do not differ from the Group's
accounting policies. The decisions concerning assessing the performance of
segments and allocation of resources to the segments are based on segments' net
sales and earnings before interest and taxes. The chief operating decision maker
of Amer Sports is the Executive Board.
There were no intersegment business operations during the reported periods.
Earnings Financing
before income Earnings
interest and and before
Net sales taxes expenses taxes Assets
---------------------------------------------------------------------
1-9/2010
Winter and Outdoor 598.5 35.7 852.0
Ball Sports 413.3 34.9 354.0
Fitness 145.2 -1.6 219.6
---------------------------------------------------------------------
Segments, total 1,157.0 69.0 1,425.6
---------------------------------------------------------------------
Unallocated items*) -20.6 -15.6 169.6
---------------------------------------------------------------------
Group total 1,157.0 48.4 -15.6 32.8 1,595.2
---------------------------------------------------------------------
1-9/2009
Winter and Outdoor 533.4 4.0 808.5
Ball Sports 382.0 21.3 319.1
Fitness 135.2 -7.0 209.4
---------------------------------------------------------------------
Segments, total 1,050.6 18.3 1,337.0
---------------------------------------------------------------------
Unallocated items*) -13.9 -11.3 172.3
---------------------------------------------------------------------
Group total 1,050.6 4.4 -11.3 -6.9 1,509.3
---------------------------------------------------------------------
2009
Winter and Outdoor 862.6 46.5 766.3
Ball Sports 476.7 23.5 320.7
Fitness 194.1 -7.5 212.5
----------------------------------------------------
Segments, total 1,533.4 62.5 1,299.5
----------------------------------------------------
Unallocated items*) -18.7 -18.4 225.1
----------------------------------------------------
Group total 1,533.4 43.8 -18.4 25.4 1,524.6
----------------------------------------------------
*) Earnings before interest and taxes include income and expenses of corporate
headquarters.
GEOGRAPHIC BREAKDOWN OF NET SALES
1-9/ 1-9/
2010 2009 2009
------------------------------------
Americas 503.8 465.9 620.5
EMEA 519.9 468.9 735.0
Asia Pacific 133.3 115.8 177.9
------------------------------------
Total 1,157.0 1,050.6 1,533.4
------------------------------------
3. HYBRID BOND
In March 2009, Amer Sports Corporation issued a EUR 60 million hybrid bond in
order to strengthen the Group's capital structure and to repay existing debt.
The coupon rate of the bond is 12.0% per annum. The bond has no maturity but the
company may call the bond after three years. The hybrid bond is unsecured and
subordinated to all senior debt and is treated as equity in Amer Sports'
consolidated financial statements. The hybrid bond does not confer shareholders'
rights, nor does it dilute the holdings of shareholders.
4. DERIVATIVE FINANCIAL INSTRUMENTS
September September December
30, 2010 30, 2009 31, 2009
---------------------------------------------------------------
Nominal value
Foreign exchange forward contracts 608.7 560.9 502.8
Forward rate agreements 0.0 150.0 100.0
Interest rate swaps 284.1 143.2 204.4
Fair value
Foreign exchange forward contracts -5.7 13.9 -1.1
Forward rate agreements 0.0 -0.1 -0.1
Interest rate swaps -4.3 -6.6 -5.6
5. DIVIDENDS
Dividends distributed by Amer Sports to its shareholders and minority
shareholders of its subsidiaries amounted to EUR 19.5 million at the end of
March 2010 relating to the year ending on December 31, 2009 (2009: 11.8). The
dividend was EUR 0.16 per share (2009: 0.16). Dividends distributed to the
shareholders of Amer Sports Corporation totaled EUR 19.4 million (2009: 11.6).
6. CONTINGENT LIABILITIES AND SECURED ASSETS
September September December
30, 2010 30, 2009 31, 2009
--------------------------------------------------------------------------
Guarantees 13.6 9.3 10.5
Liabilities for leasing and rental agreements 114.8 106.1 116.9
Other liabilities 26.9 38.7 30.0
There are no guarantees or contingencies given for the management of the
company, the shareholders or the associated companies.
7. SEASONALITY
Although Amer Sports operates in a number of sporting goods segments during all
four seasons, its business is subject to seasonal fluctuations. Historically,
the third and fourth quarters of a financial year have been the strongest
quarters for Amer Sports in terms of both net sales and profitability, mainly
because sales of winter sports equipment ahead of the winter season typically
take place during the third and fourth quarters. The summer season for ball
sports balances seasonality to a certain extent, as the strongest quarters for
the Ball Sports segment are the first and second quarters. Usually the net cash
flow from operating activities is very strong in the first quarter when the
income from winter sports equipment realizes. Especially during the third
quarter, the net cash flow from operating activities is tied up in working
capital.
In the third quarter, Amer Sports net sales increased by 14% to EUR 466.9
million (410.6). Sales increased particularly in Footwear. Also Fitness business
had good development.
Gross profit percentage was up by 3 points and EBIT margins improved in all
business segments.
Net cash flow from operating activities after interest and taxes totaled EUR
-85.0 million
(-25.4).
All forecasts and estimates presented in this report are based on the
management's current judgment of the economic environment. The actual results
may differ significantly.
AMER SPORTS CORPORATION
Board of Directors
[HUG#1456542]
© 2024 Nasdaq, Inc. All Rights Reserved |