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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 2011Amer 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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