2011-04-28 12:00:00 CEST
2011-04-28 12:00:47 CEST
REGULATED INFORMATION
Amer Sports - Interim report (Q1 and Q3)
Amer Sports Corporation Interim Report January - March 2011
Amer Sports Corporation
INTERIM REPORT
April 28, 2011 at 1:00 pm
JANUARY-MARCH 2011
* Net sales totaled EUR 449.1 million (January - March 2010: EUR 372.6
million). In local currencies, comparable net sales increased by 12%.
* EBIT was EUR 25.7 million (9.5).
* Earnings per share were EUR 0.13 (-0.01).
* Net cash flow after investing activities was EUR 87.1 million (93.9).
* Gearing was 35% (December 31, 2010: 37%).
OUTLOOK AND GUIDANCE 2011
Amer Sports' strategic development programs continue to contribute positively to
the Group performance in 2011 and the company will continue investing into
executing the new strategy and sustaining the growth. In Footwear and Apparel,
fall/winter pre-orders are indicating that the strong momentum will continue. In
Winter Sports Equipment, Amer Sports' operational efficiency measures are
expected to have a positive impact on the full-year profitability. The sporting
goods market is estimated to continue to grow modestly in 2011, with sports
specific and regional differences.
In 2011, Amer Sports expects its net sales to continue to clearly exceed the
Group's long-term financial target of 5% annual currency-neutral growth. EBIT
margin excluding non-recurring items is expected to improve from the level of
2010 (2010 net sales EUR 1,740 million, EBIT margin excluding non-recurring
items 6.2%).
EUR million 1-3/2011 1-3/2010 Ch% Ch%*) 2010
----------------------------------------------------------------------------
Net sales 449.1 372.6 21 12 1,740.4
Gross profit 194.6 159.2 22 742.0
Gross profit % 43.3 42.7 42.6
EBIT excluding non-
recurring items 25.7 9.5 107.9
EBIT % excluding non-
recurring items 5.7 2.5 6.2
Non-recurring items**) - - -11.1
EBIT total 25.7 9.5 96.8
EBIT % 5.7 2.5 5.6
Financing income and
expenses -4.3 -9.1 -21.3
Earnings before taxes 21.4 0.4 75.5
Net result 17.1 0.3 68.9
Earnings per share, EUR 0.13 -0.01 0.52
Net cash flow after investing activities 87.1 93.9 50.1
Equity ratio, % at period end 47.4 52.9 47.8
Gearing, % at period end 35 32 37
Personnel at period end 6,804 6,392 6 6,645
*) Change in local currencies
**) 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.
HEIKKI TAKALA, PRESIDENT AND CEO:"Our strong performance which started in 2010 continued in the first quarter.
The development was particularly good in Footwear, Apparel and Fitness, and
geographically in EMEA and the Americas. I am pleased with the continuing
improvement.
The 34% growth in Footwear and 28% growth in Apparel are a result of the
execution of our strategy to grow faster in softgoods. The improvement in
Fitness reflects both an improvement in market conditions and our strong
commercial gains. The solid progress in EMEA and Americas, and in most parts of
Asia, reflect our strategic programs to strengthen the commercial footprint and
better delight the consumer.
Our business in Japan, especially Racquet Sports where the season was just about
to start, was hit due to the earthquake and tsunami. In the first quarter, we
were able to mitigate the impact, however we do foresee an on-going business
risk in the country. Importantly, we remain committed to driving sustainable,
long-term business in Japan, together with our trade partners and our own Amer
Sports Japan organization. As part of this commitment, Amer Sports employees and
the company made product, monetary and motivational donations to the disaster
area.
We improved gross margin by 0.6 percentage points in the first quarter. Cost
inflation is a challenge but we have mitigation actions in place to protect the
2010 gross margin level. On operational expenses, we continued to invest in our
new strategy to ensure we have strong building blocks in place for the future.
We invested especially into our category based operations, Go to Market
resources including geographic expansion, better customer service, and own
retail.
The first quarter was good and a logical part of our long term improvement
program. We continue to steer the company towards the long-term targets. Hence,
as we now stay the course, we look forward to a positive continuous
development."
For further information, please contact:
Heikki Takala, President and CEO, tel. +358 9 7257 8210
Jussi Siitonen, CFO, tel. +358 9 7257 8212
Päivi Antola, Director, Corporate Communications and Investor Relations,
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 7136 2051 (UK/international dial-in number), access code
1923421. The conference can also be followed from a direct transmission on the
internet, at www.amersports.com. A recorded version and transcript will later be
available at the same address. The replay number is +44 (0)20 7111 1244, and the
access code 1923421#.
SECOND QUARTER INTERIM REPORT
Amer Sports will publish its Q2/2011 interim report on Thursday, August 4, 2011
at approximately 1:00 pm Finnish time.
INTERIM REPORT JANUARY - MARCH 2011
NET SALES AND EBIT
Amer Sports net sales totaled EUR 449.1 million (January - March 2010: EUR
372.6 million) in the review period. Comparable net sales increased by 12% in
local currencies, particularly due to sales growth in Footwear, Apparel and
Fitness. In local currencies, EMEA increased by 16%, the Americas by 9% and Asia
Pacific by 4%.
Net sales by business segment
1-3/ 1-3/ Change Change % of sales % of sales
EUR million 2011 2010 % %*) 1-3/2011 1-3/2010 2010
--------------------------------------------------------------------------
Winter and Outdoor 233.5 181.7 29 20 52 49 1,015.0
Ball Sports 159.0 145.4 9 2 35 39 520.6
Fitness 56.6 45.5 24 14 13 12 204.8
--------------------------------------------------------------------------
Total 449.1 372.6 21 12 100 100 1,740.4
--------------------------------------------------------------------------
*) In local currencies
Geographic breakdown of net sales
1-3/ 1-3/ Change Change % of sales % of sales
EUR million 2011 2010 % %*) 1-3/2011 1-3/2010 2010
--------------------------------------------------------------------
Americas 186.4 158.3 18 9 41 43 687.9
EMEA 214.1 172.2 24 16 48 46 845.7
Asia Pacific 48.6 42.1 15 4 11 11 206.8
--------------------------------------------------------------------Total 449.1 372.6 21 12 100 100 1,740.4
--------------------------------------------------------------------
*) In local currencies
Group EBIT was EUR 25.7 million (9.5). In local currencies, increased sales
volumes contributed EUR 28.7 million to EBIT growth, while higher gross margins
contributed EUR 3.0 million. Operating expenses increased by EUR 14.9 million,
driven by increased sales and distribution costs. Operating expenses as a
percentage of net sales were 37.9% (40.7%).
EBIT by business segment
1-3/ 1-3/ Change
EUR million 2011 2010 % 2010
---------------------------------------------------------
Winter and Outdoor 9.3 1.7 96.9
Ball Sports 17.7 14.4 23 32.2
Fitness 3.3 -0.7 2.7
Headquarters -4.6 -5.9 -23.9
---------------------------------------------------------
EBIT excluding non-recurring items 25.7 9.5 107.9
---------------------------------------------------------
Non-recurring items - - -11.1
---------------------------------------------------------
EBIT total 25.7 9.5 96.8
---------------------------------------------------------
Net financial expenses totaled EUR 4.3 million (9.1) including net interest
expenses of EUR 4.5 million (3.2). Net foreign exchange gains totaled EUR 0.2
million (5.9 losses). Earnings before taxes totaled EUR 21.4 million (0.4) and
taxes totaled EUR 4.3 million (0.1). Earnings per share were EUR 0.13 (-0.01).
CASH FLOW AND FINANCING
Net cash flow after investing activities (free cash flow) was EUR 87.1 million
(93.9). Working capital in total was reduced by EUR 73.4 million (83.3). Net
cash flow from investing activities was EUR -9.1 million (-4.8). In March the
company paid dividend of EUR 36.4 million (19.5) and purchased own shares by EUR
9.2 million.
At the end of March, the Group's net debt amounted to EUR 257.4 million
(December 31, 2010: 294.8).
Interest-bearing liabilities amounted to EUR 375.5 million (December
31, 2010: 379.5) and consisted of short-term debt of EUR 98.8 million and long-
term debt of EUR 276.7 million. The average interest rate on the Group's
interest-bearing liabilities was 4.4% (4.4%).The EUR 60 million hybrid bond is
accounted as equity.
Short-term debt includes repayments of long-term loans totaling EUR 96.1 million
(December 31, 2010: 97.0). Amer Sports has a commercial paper program of EUR
500 million. At end of the review period, Amer Sports had not issued commercial
papers in the Finnish markets.
Cash and cash equivalents totaled EUR 118.1 million (December 31, 2010: 84.7).
The loan syndicate signed in 2005 consists of a EUR 325 million revolving credit
facility and a term loan of USD 100 million. Amer Sports had not used any of the
revolving credit facility at the end of the review period.
In April, Amer Sports Corporation issued a SEK 500 million floating rate bond
with a loan period of five years targeted at Nordic institutional investors.
Amer Sports will apply for listing of the bond on the NASDAQ OMX Helsinki Ltd
stock exchange. The proceeds of the bond will be used to repay debt and for
general corporate purposes.
The equity ratio at the end of March was 47.4% (December 31, 2010: 47.8%) and
gearing was 35% (December 31, 2010: 37%).
CAPITAL EXPENDITURE
Capital expenditure totaled EUR 9.3 million (5.1). Depreciation totaled EUR 9.0
million (9.0). The whole year capital expenditure is expected to be
approximately EUR 50 million (39.9). The increase is mainly due to the
operational efficiency program in Winter Sports Equipment.
BUSINESS SEGMENT REVIEWS
WINTER AND OUTDOOR
EUR million 1-3/2011 1-3/2010 Change % Change %*) 2010
------------------------------------------------------------------------
Net sales
Winter Sports Equipment 46.9 42.3 11 6 438.4
Footwear 91.1 62.7 45 34 219.6
Apparel 38.9 28.3 37 28 156.6
Cycling 34.4 29.3 17 8 106.4
Sports Instruments 22.2 19.1 16 7 94.0
Net sales, total 233.5 181.7 29 20 1,015.0
EBIT excluding
non-recurring items 9.3 1.7 96.9
EBIT % excluding
non-recurring items 4.0 0.9 9.5
Non-recurring items - - -10.0
EBIT total 9.3 1.7 86.9
Personnel, period end 4,377 4,002 9 4,293
*) In local currencies
Winter and Outdoor's net sales in the review period totaled EUR 233.5 million
(181.7), an increase of 20% in local currencies. Net sales growth was driven by
Footwear and Apparel. In geographic terms, the strongest growth was in the
Americas.
EUR million 1-3/2011 1-3/2010 Change % Change %*) 2010
----------------------------------------------------------
Americas 44.0 31.4 40 29 211.3
EMEA 163.5 128.9 27 19 687.2
Asia Pacific 26.0 21.4 21 10 116.5
----------------------------------------------------------
Total 233.5 181.7 29 20 1,015.0
----------------------------------------------------------
*) In local currencies
EBIT was EUR 9.3 million (1.7). In local currencies, increased sales volumes
contributed EUR 21.3 million to EBIT growth. Operating expenses increased by EUR
12.4 million due to increased sales and distribution costs.
Winter Sports Equipment
Winter Sports Equipment net sales totaled EUR 46.9 million (42.3), an increase
of 6% in local currencies. Sales were up in all the main product categories. In
regional terms, North America experienced the highest growth rate, fueled by
good snow conditions.
Footwear
Footwear net sales totaled EUR 91.1 million (62.7), an increase of 34% in local
currencies. Growth came from hiking and trail running, and was strongest in
EMEA.
Apparel
Apparel net sales totaled EUR 38.9 million (28.3), an increase of 28% in local
currencies. Growth occurred in all geographical regions.
Cycling
Cycling net sales totaled EUR 34.4 million (29.3), an increase of 8% in local
currencies. Sales were up in all the main product categories. The strongest
growth was in cycling apparel and shoes.
Sports Instruments
Sports Instruments net sales totaled EUR 22.2 million (19.1), an increase of 7%
in local currencies. Sales of outdoor and training products grew double-digit.
Amer Sports sold the diving suit company Fitz-Wright Holdings Ltd. to Huish
Acquisition LLC in April. Net sales of Fitz-Wright diving suits totaled EUR 9
million in 2010. The divestment had no material impact on Amer Sports' financial
results.
BALL SPORTS
EUR million 1-3/2011 1-3/2010 Change % Change %*) 2010
-----------------------------------------------------------------
Net sales
Racquet Sports 67.1 64.3 4 -3 232.5
Team Sports 71.3 60.8 17 9 212.1
Golf 20.6 20.3 1 -5 76.0
Net sales, total 159.0 145.4 9 2 520.6
EBIT excluding
non-recurring items 17.7 14.4 23 32.2
EBIT % excluding
non-recurring items 11.1 9.9 6
Non-recurring items - - -2.7
EBIT total 17.7 14.4 23 29.5
Personnel, period end 1,621 1,584 2 1,590
*) In local currencies
Ball Sports' net sales totaled EUR 159.0 million (145.4), an increase of 2% in
local currencies. Growth in the review period was driven by Team Sports. Net
sales in EMEA and the Americas increased by 5% and 3%, respectively. In Asia
Pacific, sales declined by 11%, driven by the soft tennis market and the
aftermath of the earthquake and tsunami in Japan, the region's largest market.
EUR million 1-3/2011 1-3/2010 Change % Change %*) 2010
--------------------------------------------------------
Americas 102.4 92.9 10 3 334.4
EMEA 39.3 35.0 12 5 114.0
Asia Pacific 17.3 17.5 -1 -11 72.2
--------------------------------------------------------
Total 159.0 145.4 9 2 520.6
--------------------------------------------------------
*) In local currencies
EBIT in the review period totaled EUR 17.7 million (14.4), an increase of 23%.
In local currencies, increased sales volumes contributed EUR 4.1 million to EBIT
growth. Operating expenses increased by EUR 1.2 million due to increased sales,
distribution and marketing costs.
Racquet Sports
Racquet Sports net sales totaled EUR 67.1 million (64.3), a decrease of 3% in
local currencies. Racquet Sports was adversely impacted by the earthquake and
tsunami in Japan where Wilson has a strong market position. Growth in EMEA
offset the sales decline in Asia Pacific.
Team Sports
Team Sports net sales totaled EUR 71.3 million (60.8), an increase of 9% in
local currencies. Growth in Team Sports was driven by bats, basketballs and ball
gloves, the three largest product categories during the quarter.
Golf
Golf net sales totaled EUR 20.6 million (20.3), a decrease of 5% in local
currencies.
FITNESS
EUR million 1-3/2011 1-3/2010 Change % Change %*) 2010
-----------------------------------------------------------------
Net sales 56.6 45.5 24 14 204.8
EBIT excluding
non-recurring items 3.3 -0.7 2.7
EBIT % excluding
non-recurring items 5.8 1.3
Non-recurring items - - -2.3
EBIT total 3.3 -0.7 0.4
Personnel, period end 735 735 0 691
*) In local currencies
Fitness' net sales totaled EUR 56.6 million (45.5), an increase of 14% in local
currencies. Sales were up in all geographic regions.
EUR million 1-3/2011 1-3/2010 Change % Change %*) 2010
--------------------------------------------------------
Americas 40.0 34.0 18 8 142.2
EMEA 11.3 8.3 36 24 44.5
Asia Pacific 5.3 3.2 66 43 18.1
--------------------------------------------------------
Total 56.6 45.5 24 14 204.8
--------------------------------------------------------
*) In local currencies
The commercial business (clubs and institutions) sales were up by 13% in the
review period. Consumer business (home use) was up by 21% in local currencies.
In the North American fitness market, the commercial business started to show
some early signs of recovery during 2010 and the market continued to improve
through the first quarter of 2011.
Fitness' EBIT was EUR 3.3 million (-0.7). In local currencies, increased sales
volumes contributed EUR 3.7 million to EBIT growth while higher gross margins
contributed EUR 2.0 million. Operating expenses were EUR 1.7 million higher than
in the corresponding period last year mainly because of increased sales and
distribution costs.
PERSONNEL
At the end of March 2011, Group employees totaled 6,804 (December
31, 2010: 6,645). The number of employees increased mainly due to strengthening
the sales and distribution.
March 31, March 31, Change Dec 31,
2011 2010 % 2010
-----------------------------------------------------
Winter and Outdoor 4,377 4,002 9 4,293
Ball Sports 1,621 1,584 2 1,590
Fitness 735 735 0 691
Headquarters 71 71 0 71
-----------------------------------------------------
Total 6,804 6,392 6 6,645
----------------------------------------------------- March 31, March 31, Change Dec 31,
2011 2010 % 2010
-----------------------------------------------
EMEA 4,007 3,672 9 3,903
Americas 2,260 2,211 2 2,214
Asia Pacific 537 509 6 528
-----------------------------------------------
Total 6,804 6,392 6 6,645
-----------------------------------------------
SHARES AND SHAREHOLDERS
The company's share capital totaled EUR 292,182,204 on March 31, 2011 and the
number of shares was 121,517,285.
Authorizations
The Annual General Meeting held on March 10, 2011 authorized the Board of
Directors to decide on the repurchase of a maximum of 10,000,000 of the
company's own shares ("Repurchase Authorization"). The company's own shares
shall be repurchased otherwise than in proportion to the holdings of the
shareholders by using the non-restricted equity through public trading on the
NASDAQ OMX Helsinki at the market price prevailing at the time of acquisition.
The shares shall be repurchased and paid for in accordance with the rules of the
NASDAQ OMX Helsinki and Euroclear Finland Ltd. The Repurchase Authorization is
valid 18 months from the decision of the Annual General Meeting.
The Annual General Meeting held 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 for 18 months from the date of
the decision by the Annual General Meeting.
In the Annual General meeting in 2010, 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 for two (2) years from the date of the
decision of the Annual General Meeting.
Apart from the above, the Board of Directors has no current authorization to
issue shares, convertible bonds or warrant programs.
Trading in shares
A total of 18.6 million (15.0) Amer Sports' shares with a value totaling
EUR 182.0 million (120.6) were traded on the NASDAQ OMX Helsinki Ltd stock
exchange during the review period. The average daily trading volume in January-
March 2011 was 294,751 shares (238,565).
The closing price of the Amer Sports Corporation share on the NASDAQ OMX
Helsinki Ltd stock exchange on March 31, 2011 was EUR 9.06 (8.74). The Amer
Sports Corporation shares registered a high of EUR 10.96 (8.93) and a low of EUR
8.43 (6.82) during the review period. The average share price was EUR 9.08
(8.02). On March 31, 2011, excluding own shares, the company had a market
capitalization of EUR 1,091.8 million (1,059.1).
Amer Sports Corporation had 17,381 registered shareholders (13,273) at the end
of March, 2011.
Own shares
Based on the authorization given by the AGM on March 10, 2010, the Amer Sports
Board of Directors decided on February 15, 2011 to initiate a share repurchase
program in order to implement a share-based incentive plan for 2011 and 2012 for
the Group's key personnel. Repurchases on the NASDAQ OMX Helsinki Ltd stock
exchange began on February 23, 2011 and ended on March 24, 2011. One (1) million
shares were acquired during this period.
Purchase price Purchase price
Total value, (on average), (high and low),
Time Amount EUR EUR EUR
----------------------------------------------------------------------------
Feb. 23-March 24, 2011 1,000,000 9,212,051.46 9.21 9.81 and 8.43
On March 15, 2011, a total of 330,838 Amer Sports shares were transferred to the
personnel involved in the company's Performance Share Plan 2010 and the
Restricted Stock Plan 2010. The shares were transferred from the shares owned by
Amer Sports International Oy.
Amer Sports International Oy currently holds a total of 12,125 Amer Sports
Corporation shares, while Amer Sports Corporation holds a total of 1,000,000
Amer Sports Corporation shares. The number of own shares held corresponds to
0.83% of all Amer Sports Corporation shares.
DECISIONS BY THE AMER SPORTS CORPORATION ANNUAL GENERAL MEETING
At the Amer Sports Corporation Annual General Meeting held on March 10, 2011,
the following resolutions were approved:
Adoption of the annual accounts
The Annual General Meeting (AGM) approved Amer Sports Corporation's financial
statements for 2010.
Resolution on use of the profit shown on the balance sheet and the payment of
dividend
The AGM resolved to distribute a dividend of EUR 0.30 per share for the
financial year ended December 31, 2010. The dividend was paid on March 22, 2011.
Resolution on the discharge of the members of the Board of Directors and the CEO
from liability
The AGM granted the members of the Board of Directors and the company's
President and CEO Heikki Takala and Acting President and CEO Pekka Paalanne
(January 1 - March 31, 2010) a discharge from liability for the financial year
2010.
Resolution on the remuneration of the members of the Board of Directors
It was approved that the annual remuneration payable to the members of the Board
of Directors be as follows: Chairman EUR 100,000, Vice Chairman EUR 60,000, and
other members EUR 50,000. Remuneration is not paid for attending meetings of the
Board of Directors or meetings of the Committees of the Board of Directors. Of
the annual remuneration, 40% is being paid in the form of the company's shares
and 60% in cash.
Resolution on the number of the members of the Board of Directors
The AGM confirmed that the number of the members of the Board of Directors is
seven (7).
Election of members of the Board of Directors
The AGM re-elected Anssi Vanjoki, Ilkka Brotherus, Pirjo Väliaho, Martin
Burkhalter, Christian Fischer, Bruno Sälzer and Hannu Ryöppönen as members of
the Board of Directors. The Board of Directors' term of service will run until
the close of the 2012 Annual General Meeting.
Resolution on the remuneration of the auditor
The AGM decided that the auditor's fee will be paid as invoiced.
Election of auditor
The AGM elected the Authorized Public Accountants PricewaterhouseCoopers Oy to
act as auditor of the company. The auditor in charge of the audit was elected to
be Jouko Malinen, Authorized Public Accountant.
Authorizing the Board of Directors to decide on the repurchase of the company's
own shares
The AGM authorized the Board of Directors to decide on the repurchase of a
maximum of 10,000,000 of the company's own shares ("Repurchase Authorization").
The company's own shares shall be repurchased otherwise than in proportion to
the holdings of the shareholders by using the non-restricted equity through
public trading on the NASDAQ OMX Helsinki at the market price prevailing at the
time of acquisition. The shares shall be repurchased and paid for in accordance
with the rules of the NASDAQ OMX Helsinki and Euroclear Finland Ltd. The
Repurchase Authorization is valid 18 months from the decision of the Annual
General Meeting.
BOARD OF DIRECTORS WORKING ARRANGEMENTS
At its organizing meeting immediately following the Annual General Meeting, the
Amer Sports Corporation's Board of Directors appointed Anssi Vanjoki as Chairman
and Ilkka Brotherus as Vice Chairman. From among its members, the Board
appointed the following members to the Board Committees:
* Compensation Committee: Pirjo Väliaho (Chairman), Anssi Vanjoki, Bruno
Sälzer and Christian Fischer
* Nomination Committee: Ilkka Brotherus (Chairman), Anssi Vanjoki and Martin
Burkhalter
* Audit Committee: Hannu Ryöppönen (Chairman), Ilkka Brotherus and Martin
Burkhalter
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 labor and raw material price inflation, especially
in China; on Amer Sports' ability to manufacture, source and deliver products on
a timely basis; and on the development of consumer demand in North America,
Europe and Japan. The effects of the earthquake and tsunami in Japan are
estimated to have a negative impact on sales.
Further information on the company's business risks and uncertainty factors is
available on the company's web site at www.amersports.com/investors.
OUTLOOK FOR 2011
Amer Sports' strategic development programs continue to contribute positively to
the Group performance in 2011 and the company will continue investing into
executing the new strategy and sustaining the growth. In Footwear and Apparel,
fall/winter pre-orders are indicating that the strong momentum will continue. In
Winter Sports Equipment, Amer Sports' operational efficiency measures are
expected to have a positive impact on the full-year profitability. The sporting
goods market is estimated to continue to grow modestly in 2011, with sports
specific and regional differences.
In 2011, Amer Sports expects its net sales to continue to clearly exceed the
Group's long-term financial target of 5% annual currency-neutral growth. EBIT
margin excluding non-recurring items is expected to improve from the level of
2010 (2010 net sales EUR 1,740 million, EBIT margin excluding non-recurring
items 6.2%).
Outlook given in the Financial Statements bulletin on February 3, 2011
Amer Sports' strategic development programs are expected to continue to
contribute positively to the Group performance in 2011. The sporting goods
market is estimated to continue the recovery started in 2010, with regional and
sports specific differences. In Footwear and Apparel, spring/summer pre-orders
are indicating that the 2010 strong momentum will continue. Overall, Amer Sports
expects its 2011 net sales to increase from 2010 and EBIT to improve.
TABLES
The notes are an integral part of consolidated interim financial information.
Unaudited
EUR million
CONSOLIDATED RESULTS
1-3/ 1-3/ Change
2011 2010 % 2010
---------------------------------------------------------------------
NET SALES 449.1 372.6 21 1,740.4
Cost of goods sold -254.5 -213.4 -998.4
---------------------------------------------------------------------
GROSS PROFIT 194.6 159.2 22 742.0
License income 2.3 2.3 9.5
Other operating income 0.5 0.8 12.4
R&D expenses -15.2 -13.7 -57.4
Selling and marketing expenses -117.0 -102.7 -443.1
Administrative and other
expenses -39.5 -36.4 -166.6
---------------------------------------------------------------------
EARNINGS BEFORE
INTEREST AND TAXES 25.7 9.5 96.8
% of net sales 5.7 2.5 5.6
Financing income and expenses -4.3 -9.1 -21.3
---------------------------------------------------------------------
EARNINGS BEFORE TAXES 21.4 0.4 75.5
Taxes -4.3 -0.1 -6.6
---------------------------------------------------------------------
NET RESULT 17.1 0.3 68.9
---------------------------------------------------------------------
Attributable to:
Equity holders of the parent
company 17.1 0.3 68.8
Non-controlling interests 0.0 0.0 0.1
Earnings per share, EUR 0.13 -0.01 0.52
Earnings per share, diluted, EUR 0.13 -0.01 0.52
Adjusted average number of
shares in issue less own shares, million 121.0 121.2 121.2
Adjusted average number of
shares in issue less own shares,
diluted, million 121.1 121.2 121.2
Equity per share, EUR 6.12 6.07 6.50
ROCE, % *) 11.6 6.1 10.0
ROE, % 9.0 0.2 9.0
Average rates used:
EUR 1.00 = USD 1.37 1.38 1.33
*) 12 months' rolling average
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
1-3/ 1-3/
2011 2010 2010
-----------------------------------------------------------
Net result 17.1 0.3 68.9
Other comprehensive income
Translation differences -17.8 19.5 28.7
Cash flow hedges -4.2 4.3 -0.2
Income tax related to
cash flow hedges 1.1 -1.1 0.0
-----------------------------------------------------------
Other comprehensive income,
net of tax -20.9 22.7 28.5
-----------------------------------------------------------
Total comprehensive income -3.8 23.0 97.4
-----------------------------------------------------------
Total comprehensive income attributable to:
Equity holders of the parent
company -3.8 23.0 97.3
Non-controlling interests 0.0 0.0 0.1
NET SALES BY BUSINESS SEGMENT
1-3/ 1-3/ Change
2011 2010 % 2010
---------------------------------------------
Winter and Outdoor 233.5 181.7 29 1,015.0
Ball Sports 159.0 145.4 9 520.6
Fitness 56.6 45.5 24 204.8
---------------------------------------------
Total 449.1 372.6 21 1,740.4
---------------------------------------------
EBIT BY BUSINESS SEGMENT
1-3/ 1-3/ Change
2011 2010 % 2010
-----------------------------------------
Winter and Outdoor 9.3 1.7 86.9
Ball Sports 17.7 14.4 23 29.5
Fitness 3.3 -0.7 0.4
Headquarters -4.6 -5.9 -20.0
-----------------------------------------
Total 25.7 9.5 96.8
-----------------------------------------
GEOGRAPHIC BREAKDOWN OF NET SALES
1-3/ 1-3/ Change
2011 2010 % 2010
---------------------------------------
Americas 186.4 158.3 18 687.9
EMEA 214.1 172.2 24 845.7
Asia Pacific 48.6 42.1 15 206.8
---------------------------------------
Total 449.1 372.6 21 1,740.4
---------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
Note 1-3/2011 1-3/2010 2010
---------------------------------------------------------------------
Earnings before interest and taxes 25.7 9.5 96.8
Adjustments to cash flow from
operating activities and depreciation 5.5 9.0 28.3
Change in working capital 73.4 83.3 -18.8
---------------------------------------------------------------------
Cash flow from operating activities
before financing items and taxes 104.6 101.8 106.3
Interest paid and received -1.2 -0.6 -14.3
Income taxes paid and received -7.2 -2.5 -11.9
---------------------------------------------------------------------
Net cash flow from operating activities 96.2 98.7 80.1
Capital expenditure on non-current
tangible and intangible assets -9.3 -5.1 -39.9
Proceeds from sale of tangible non-
current assets 0.2 0.3 9.9
---------------------------------------------------------------------
Net cash flow from investing activities -9.1 -4.8 -30.0
Net cash flow after investing activities
(free cash flow) 87.1 93.9 50.1
Repurchase of own shares -9.2 - -
Interest on hybrid bond -7.2 -7.2 -7.2
Dividends paid 4 -36.4 -19.5 -19.5
Change in debt and other financing
Items 0.2 -139.7 -64.3
---------------------------------------------------------------------
Net cash flow from financing activities -52.6 -166.4 -91.0
Cash and cash equivalents on
January 1 84.7 121.6 121.6
Translation differences -1.1 1.6 4.0
Change in cash and cash equivalents 34.5 -72.5 -40.9
---------------------------------------------------------------------
Cash and cash equivalents on
March 31/December 31 118.1 50.7 84.7
CONSOLIDATED BALANCE SHEET
March 31, March 31, December
Note 2011 2010 31, 2010
----------------------------------------------------------------------------
Assets
----------------------------------------------------------------------------
Goodwill 276.7 286.8 286.7
Other intangible non-current assets 209.7 211.0 214.2
Tangible non-current assets 139.5 136.6 140.2
Other non-current assets 98.0 71.0 100.5
Inventories and work in progress 317.4 239.0 302.1
Receivables 399.1 399.0 525.4
Cash and cash equivalents 118.1 50.7 84.7
----------------------------------------------------------------------------
Total assets 2 1,558.5 1,394.1 1,653.8
----------------------------------------------------------------------------
Shareholders' equity and liabilities
----------------------------------------------------------------------------
Shareholders' equity 739.4 737.5 790.2
Long-term interest-bearing liabilities 276.7 238.8 278.7
Other long-term liabilities 21.3 15.6 19.6
Current interest-bearing liabilities 98.8 45.3 100.8
Other current liabilities 391.8 326.6 434.6
Provisions 30.5 30.3 29.9
----------------------------------------------------------------------------
Total shareholders' equity and liabilities 1,558.5 1,394.1 1,653.8
----------------------------------------------------------------------------
Equity ratio, % 47.4 52.9 47.8
Gearing, % 35 32 37
EUR 1.00 = USD 1.41 1.33 1.34
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,
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 19.5 19.5
Cash flow
hedges 4.3 4.3
Income tax
related to
cash flow
hedges -1.1 -1.1
Net result 0.3 0.3
Total
comp-
rehensive
income 19.5 3.2 0.3 23.0
Transact-
ions with
owners:
Dividend
distribution 4 -19.4 -19.4
Interest on
hybrid
bond -1.3 -1.3
----------------------------------------------------------------------------
Balance at
March 31,
2010 292.2 12.1 -5.6 -43.5 -2.2 151.5 60.0 270.5 735.0
Balance at
Jan. 1,
2011 292.2 12.1 -5.6 -34.3 -5.6 151.5 60.0 317.3 787.6
Other
compre-
hensive
income:
Translation
differences -17.8 -17.8
Cash flow
hedges -4.2 -4.2
Income tax
related to
cash flow
hedges 1.1 1.1
Net result 17.1 17.1
Total
comp-
rehensive
income -17.8 -3.1 17.1 -3.8
Transact-
ions with
owners:
Repurch-
ase of
own
shares -9.2 -9.2
Share-
based
incentive
programs 5.4 0.5 5.9
Dividend
distribution 4 -36.3 -36.3
Interest on
hybrid
bond -7.2 -7.2
----------------------------------------------------------------------------
Balance at
March 31,2011 292.2 12.1 -9.4 -52.1 -8.7 151.5 60.0 291.4 737.0
Total
Non- share-
cont- hold-
rolling ers'
inte- equ-
Note rests ity
---------------------------------
Balance at
Jan. 1,
2010 2.6 735.3
Other
compre-
hensive
income:
Translation
differences 19.5
Cash flow
hedges 4.3
Income tax
related to
cash flow
hedges -1.1
Net result 0.3
Total
comp-
rehensive
income 23.0
Transact-
ions with
owners:
Dividend
distribution 4 -0.1 -19.5
Interest on
hybrid
bond -1.3
---------------------------------
Balance at
March 31,
2010 2.5 737.5
Balance at
Jan. 1,
2011 2.6 790.2
Other
compre-
hensive
income:
Translation
differences -17.8
Cash flow
hedges -4.2
Income tax
related to
cash flow
hedges 1.1
Net result 17.1
Total
comp-
rehensive
income -3.8
Transact-
ions with
owners:
Repurch-
ase of
own
shares -9.2
Share-
based
incentive
programs 5.9
Dividend
distribution 4 -0.1 -36.4
Interest on
hybrid
bond -7.2
Other
change -0.1 -0.1
---------------------------------
Balance at
March 31,
2011 2.4 739.4
QUARTERLY BREAKDOWN OF NET SALES AND EBIT
Q1/ Q4/ Q3/ Q2/ Q1/ Q4/ Q3/ Q2/
NET SALES 2011 2010 2010 2010 2010 2009 2009 2009
------------------------------------------------------------------
Winter and Outdoor 233.5 416.5 300.3 116.5 181.7 329.2 262.4 106.6
Ball Sports 159.0 107.3 114.0 153.9 145.4 94.7 103.4 135.7
Fitness 56.6 59.6 52.6 47.1 45.5 58.9 44.8 42.4
------------------------------------------------------------------
Total 449.1 583.4 466.9 317.5 372.6 482.8 410.6 284.7
------------------------------------------------------------------
Q1/ Q4/ Q3/ Q2/ Q1/ Q4/ Q3/ Q2/
EBIT 2011 2010 2010 2010 2010 2009 2009 2009
------------------------------------------------------------------
Winter and Outdoor 9.3 51.2 58.2 -24.2 1.7 42.5 44.1 -29.2
Ball Sports 17.7 -5.4 3.5 17.0 14.4 2.2 2.4 7.4
Fitness 3.3 2.0 2.8 -3.7 -0.7 -0.5 -1.4 -2.2
Headquarters -4.6 0.6 -8.7 -6.0 -5.9 -4.8 -4.4 -5.4
------------------------------------------------------------------
Total 25.7 48.4 55.8 -16.9 9.5 39.4 40.7 -29.4
------------------------------------------------------------------
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, 2011, as adopted by the EU. The IFRS
recognition and measurement principles as described in the annual financial
statements for 2010 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, interpretations and amendments adopted from the beginning of 2011:
The following new standards, interpretations and amendments have been adopted
when applicable: IFRS 1 (amendment), IAS 24 (amendment), IAS 32 (amendment),
IFRIC 14 (amendment) and IFRIC 19 and the annual improvements. The amendments or
interpretations did not have any material impact on the consolidated financial
statements.
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
---------------------------------------------------------------------
1-3/2011
Winter and Outdoor 233.5 9.3 717.4
Ball Sports 159.0 17.7 378.1
Fitness 56.6 3.3 218.2
---------------------------------------------------------------------
Segments, total 449.1 30.3 1,313.7
---------------------------------------------------------------------
Unallocated items*) -4.6 -4.3 244.8
---------------------------------------------------------------------
Group total 449.1 25.7 -4.3 21.4 1,558.5
---------------------------------------------------------------------
1-3/2010
Winter and Outdoor 181.7 1.7 636.8
Ball Sports 145.4 14.4 378.8
Fitness 45.5 -0.7 215.9
---------------------------------------------------------------------
Segments, total 372.6 15.4 1,231.5
---------------------------------------------------------------------
Unallocated items*) -5.9 -9.1 162.6
---------------------------------------------------------------------
Group total 372.6 9.5 -9.1 0.4 1,394.1
---------------------------------------------------------------------
1-12/2010
Winter and Outdoor 1,015.0 86.9 848.7
Ball Sports 520.6 29.5 365.8
Fitness 204.8 0.4 229.1
----------------------------------------------------
Segments, total 1,740.4 116.8 1,443.6
----------------------------------------------------
Unallocated items*) -20.0 -21.3 210.2
----------------------------------------------------
Group total 1,740.4 96.8 -21.3 75.5 1,653.8
----------------------------------------------------
*) Earnings before interest and taxes include income and expenses of corporate
headquarters.
GEOGRAPHIC BREAKDOWN OF NET SALES
1-3/ 1-3/
2011 2010 2010
--------------------------------
Americas 186.4 158.3 687.9
EMEA 214.1 172.2 845.7
Asia Pacific 48.6 42.1 206.8
--------------------------------
Total 449.1 372.6 1,740.4
--------------------------------
3. DERIVATIVE FINANCIAL INSTRUMENTS
March March December
31, 2011 31, 2010 31, 2010
-------------------------------------------------------------
Nominal value
Foreign exchange forward contracts 648.1 527.0 678.1
Forward rate agreements - 50.0 -
Interest rate swaps 165.7 209.9 169.8
Fair value
Foreign exchange forward contracts -4.2 -1.3 -9.1
Forward rate agreements - -0.1 -
Interest rate swaps -1.7 -5.7 -2.8
4. DIVIDENDS
Dividends distributed by Amer Sports to its shareholders and minority
shareholders of its subsidiaries amounted to EUR 36.4 million at the end of
March 2011 relating to the year ending on December 31, 2010 (2010: 19.5).
Dividends distributed to the shareholders of Amer Sports Corporation were EUR
0.30 per share and in total EUR 36.3 million (2010: EUR 0.16 per share and in
total EUR 19.4 million).
5. CONTINGENT LIABILITIES AND SECURED ASSETS
March March December
31, 2011 31, 2010 31, 2010
------------------------------------------------------------------------
Guarantees 15.0 10.8 14.1
Liabilities for leasing and rental agreements 116.3 118.4 123.2
Other liabilities 23.4 35.6 18.7
There are no guarantees or contingencies given for the management of the
company, the shareholders or the associated companies.
6. 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.
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#1510068]
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