2011-02-03 12:00:00 CET
2011-02-03 12:00:38 CET
REGULATED INFORMATION
Amer Sports - Financial Statement Release
Amer Sports Corporation Financial Statements Bulletin 2010
Amer Sports Corporation
FINANCIAL STATEMENTS BULLETIN
February 3, 2011 at 1:00 pm
OCTOBER-DECEMBER, 2010
* Net sales increased by 21% to EUR 583.4 million (482.8). In local
currencies, net sales increased by 14%.
* EBIT excluding non-recurring items increased significantly and was EUR 56.0
million (44.4), including a strategic EUR 4 million acceleration in
marketing spend. Non-recurring items were EUR -7.6 million (-5.0).
* Earnings per share totaled EUR 0.30 (0.37).
* Net cash flow after investing activities totaled EUR 57.7 million (129.2).
JANUARY-DECEMBER, 2010
* Net sales totaled EUR 1,740.4 million (1,533.4), an increase of 13%. In
local currencies, net sales increased by 8%.
* EBIT excluding non-recurring items more than doubled to EUR 107.9 million
(48.8). EBIT margin was 6.2% excluding non-recurring items. Non-recurring
items were EUR -11.1 million (-5.0).
* Earnings per share totaled EUR 0.52 (0.28). Excluding non-recurring items,
earnings per share were EUR 0.59 (0.31).
* Net cash flow after investing activities totaled EUR 50.1 million (140.5).
* Gearing was 37% (December 31, 2009: 38%).
* Amer Sports Board of Directors is proposing a dividend of EUR 0.30 per share
(0.16 per share in 2009).
OUTLOOK AND GUIDANCE 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.
10-12/ 10-12/
EUR million 2010 2009 Ch % Ch %*) 2010 2009 Ch % Ch %*)
--------------------------------------------------------------------------------
Net sales 583.4 482.8 21 14 1,740.4 1,533.4 13 8
Gross profit 237.8 196.5 21 14 742.0 620.0 20 14
Gross profit % 40.8 40.7 42.6 40.4
EBIT excluding non-
recurring items 56.0 44.4 26 19 107.9 48.8 121 97
EBIT % excluding non-
recurring items 9.6 9.2 6.2 3.2
Non-recurring items**) -7.6 -5.0 -11.1 -5.0
EBIT total 48.4 39.4 23 15 96.8 43.8 121 94
Financing income and
expenses -5.7 -7.1 -21.3 -18.4
Earnings before taxes 42.7 32.3 32 75.5 25.4 197
Net result 38.1 36.6 4 68.9 31.4 119
Earnings per share, EUR 0.30 0.37 0.52 0.28
Net cash flow after
investing activities 57.7 129.2 50.1 140.5
Equity ratio, % at year
end 47.8 48.2
Gearing, % at year end 37 38
Personnel at year end 6,597 6,331
*) 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:"2010 results were facilitated by better economic environment and favorable snow
conditions, but most notably we made sustainable improvements through our own
programs. As examples, we drove Footwear sales up by 26% through strong
commercial expansion, we now have 25% more brand stores and outlets than in
2009, and in Winter Sports Equipment, we continued to push down break-even
points through operational effectiveness.
We improved gross margin by 2 percentage points in 2010. In Q4, gross margin
came down in line with a seasonal pattern and was only at previous year's level
mainly due to year-end inventory clean-up with lower margins. Gross margin
remains a challenge in light of labor and raw material cost increases but we
have mitigation plans in place.
We improved underlying efficiency in operating expenses. However, 2010 includes
some accelerated strategic spending, costs related to setting up the new company
structure, and organizational incentives as a result of improved Group
performance. In 2011, we continue to drive synergies and scale across the
company.
Year 2010 was good, and it is taking us closer to our long-term financial
targets. 2011 will be 'Year of go-to-market', with special focus on improving
customer service and driving commercial expansion."
For further information, please contact:
Heikki Takala, President and CEO, tel. +358 9 7257 8210
Jussi Siitonen, CFO, tel. +358 9 7257 8240
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 7806 1967 (UK/international dial-in number). The
conference can also be followed from a direct transmission via the internet
atwww.amersports.com. A recorded version will be available later at the same web
address: the replay number is +44 (0)20 7111 1244, and the access code 2942168#.
Annual General Meeting
Amer Sports' Annual General Meeting will be held on Thursday, March 10, 2011 at
Mäkelänkatu 91, Helsinki, Finland starting at 2:00 pm. Reception for persons who
have registered for the Annual General Meeting and the distribution of voting
tickets will commence at 1:30 pm.
First quarter results bulletin
Amer Sports will publish its Q1/2011 results bulletin on Thursday, April
28, 2011 at approximately 1:00 pm Finnish time.
FINANCIAL RESULTS IN OCTOBER-DECEMBER
NET SALES AND EBIT IN OCTOBER-DECEMBER
Amer Sports net sales totaled EUR 583.4 million (482.8), an increase of 21%
compared to October-December 2009. Net sales increased by 14% in local
currencies, particularly due to sales growth in Winter Sports Equipment,
Footwear and Apparel.
In local currencies, EMEA increased by 21%, the Americas by 8% and Asia Pacific
by 3%.
Net sales by business segment
10-12/ 10-12/ Change Change % of sales % of sales
EUR million 2010 2009 % %*) 10-12/10 10-12/09
--------------------------------------------------------------------
Winter and Outdoor 416.5 329.2 27 21 72 68
Ball Sports 107.3 94.7 13 4 18 20
Fitness 59.6 58.9 1 -6 10 12
--------------------------------------------------------------------
Total 583.4 482.8 21 14 100 100
--------------------------------------------------------------------
*) In local currencies
Geographic breakdown of net sales
10-12/ 10-12/ Change Change % of sales % of sales
EUR million 2010 2009 % %*) 10-12/10 10-12/09
--------------------------------------------------------------
Americas 184.1 154.6 19 8 31 32
EMEA 325.8 266.1 22 21 56 55
Asia Pacific 73.5 62.1 18 3 13 13
--------------------------------------------------------------
Total 583.4 482.8 21 14 100 100
--------------------------------------------------------------
*) In local currencies
Group EBIT excluding non-recurring items was EUR 56.0 million (44.4). Increased
sales volumes contributed EUR 29.4 million to the EBIT growth. Gross margin was
at previous year's level mainly due to year-end inventory clean-up with lower
margins.
Operating expenses increased by EUR 18.3 million. Strategy execution was
accelerated in October-December with an additional EUR 4 million being spent on
long-term improvement projects, mainly in marketing and own retail. The Group
also invested in the new business structure and key recruitments, particularly
in category-based operations in footwear and apparel and in business to
consumer.
Including non-recurring items, EBIT was EUR 48.4 million (39.4). Non-recurring
items were mainly related to capital gains, restructuring and write-downs.
EBIT excluding non-recurring items by business segment
10-12/ 10-12/ Change Change
EUR million 2010 2009 % %*)
--------------------------------------------------------------
Winter and Outdoor 61.2 42.5 44 36
Ball Sports -2.7 2.2
Fitness 4.3 4.5 -4 1
Headquarters -6.8 -4.8
--------------------------------------------------------------
EBIT excluding non-recurring items 56.0 44.4 26 19
--------------------------------------------------------------
Non-recurring items -7.6 -5.0
--------------------------------------------------------------
EBIT total 48.4 39.4 23 15
--------------------------------------------------------------
*) In local currencies
Net financial expenses totaled EUR 5.7 million (7.1) including net interest
expenses of EUR 5.6 million (5.4) and unrealized net foreign exchange gains
totaling EUR 3.4 million (3.3). Earnings before taxes totaled EUR 42.7 million
(32.3). Earnings per share were EUR 0.30 (0.37).
FINANCIAL RESULTS 2010
In 2010, consumer confidence improved due to stronger global economic conditions
and the sporting goods market began to recover after a couple of years of a
declining trend. However, there were significant regional and sports area
differences. Strong development in the winter sports equipment market was driven
by good snow conditions.
NET SALES AND EBIT IN JANUARY-DECEMBER 2010
Amer Sports net sales in 2010 totaled EUR 1,740.4 million (1,533.4), an increase
of 13% compared to 2009. Net sales increased by 8% in local currencies,
particularly due to sales growth in Winter Sports Equipment and Footwear. In
local currencies, EMEA increased by 13%, the Americas by 4% and Asia Pacific by
4%. The Group's long-term target is to deliver organic, currency-neutral annual
growth of 5%.
Net sales by business segment
Change Change % of sales % of sales
EUR million 2010 2009 % %*) 2010 2009
----------------------------------------------------------------------
Winter and Outdoor 1,015.0 862.6 18 12 58 56
Ball Sports 520.6 476.7 9 3 30 31
Fitness 204.8 194.1 6 1 12 13
----------------------------------------------------------------------
Total 1,740.4 1,533.4 13 8 100 100
----------------------------------------------------------------------
*) In local currencies
Geographic breakdown of net sales
Change Change % of sales % of sales
EUR million 2010 2009 % %*) 2010 2009
----------------------------------------------------------------
Americas 687.9 620.5 11 4 40 40
EMEA 845.7 735.0 15 13 48 48
Asia Pacific 206.8 177.9 16 4 12 12
----------------------------------------------------------------
Total 1,740.4 1,533.4 13 8 100 100
----------------------------------------------------------------
*) In local currencies
Group EBIT excluding non-recurring items was EUR 107.9 million (48.8). EBIT
margin was 6.2%, excluding non-recurring items. The Group's long-term target is
to have EBIT of at least 10% of net sales.
Increased sales volumes contributed EUR 52.5 million to the EBIT growth, while
higher gross margins contributed EUR 39.1 million. Operating expenses increased
by EUR 41.1 million, driven by volume growth related sales and distribution
costs, marketing as well as organization incentives linked to the improved Group
performance. The Group also invested in the new business structure and key
recruitments, particularly in category-based operations in footwear and apparel
and in business to consumer. Operating expenses as a percentage of net sales
were at previous year's level.
Including non-recurring items, EBIT was EUR 96.8 million (43.8). Non-recurring
items were related to capital gains, restructuring, write-downs and a solved
import duties dispute in Brazil.
EBIT excluding non-recurring items by business segment
Change Change
EUR million 2010 2009 % %*)
------------------------------------------------------------
Winter and Outdoor 96.9 46.5 108 85
Ball Sports 32.2 23.5 37 35
Fitness 2.7 -2.5
Headquarters -23.9 -18.7
------------------------------------------------------------
EBIT excluding non-recurring items 107.9 48.8
------------------------------------------------------------
Non-recurring items -11.1 -5.0
------------------------------------------------------------
EBIT total 96.8 43.8 121 94
------------------------------------------------------------
*) In local currencies
Net financial expenses totaled EUR 21.3 million (18.4). This figure includes net
interest expenses of EUR 17.9 million (23.6) and unrealized net foreign exchange
losses totaling EUR 2.3 million (gains of EUR 6.2 million). Earnings before
taxes totaled EUR 75.5 million (25.4) and taxes totaled EUR -6.6 million
(positive 6.0). Earnings per share were EUR 0.52 (0.28). Excluding non-recurring
items, earnings per share were EUR 0.59 (0.31).
In its financial statements for 2009, Amer Sports stated the company's key
priority to be improving profitability through gross margin improvements with
continued tight control over costs. A more detailed view of the outlook was
provided in the January-March interim report in which an estimate was given that
the 2010 EBIT margin would improve to mid-single-digit level. Increased
visibility allowed further revisions to this forecast during the year and
guidance given in the January-September interim report estimated full year net
sales to be approximately EUR 1.7 billion and EBIT margin approximately 6%
excluding non-recurring items while the actual figures were net sales EUR 1.740
million and EBIT margin 6.2%.
CASH FLOW AND FINANCING
In 2010, net cash flow after investing activities (free cash flow) was EUR 50.1
million (140.5). The exceptionally strong cash flow in 2009 was a result of
special interventions in working capital management. Compared to the end of
2009, inventories increased by EUR 53.6 million (in local currencies) and are
now closer to their sustainable levels. Receivables increased by EUR 26.0
million (in local currencies) due to the strong sales in the fourth quarter.
Amer Sports' long-term financial target is to have annual free cash flow equal
to net profit: in 2010, free cash flow was EUR 50.1 million and net profit EUR
68.9 million.
At the end of 2010, the Group's net debt amounted to EUR 294.8 million (282.5).
Amer Sports' long-term financial target for the balance sheet structure is the
year-end Net Debt / EBITDA ratio to be of 3 or less. At the end of 2010, the
ratio was 2.2.
Interest-bearing liabilities amounted to EUR 379.5 million (404.1) consisting of
short-term debt of EUR 100.8 million and long-term debt of EUR 278.7 million.
The average interest rate on the Group's interest-bearing liabilities was 4.4%
(3.3%).The EUR 60 million hybrid bond is accounted as equity.
Short-term debt consists of repayments of long-term loans of EUR 97.0 million
(5.8). At end of 2010 Amer Sports had not issued commercial papers in Finnish
markets. At the end of 2009 the issued amount was EUR 112.3 million. The total
size of the commercial paper program is EUR 500 million.
Cash and cash equivalents totaled EUR 84.7 million (121.6).
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 2010.
On June 2010, Amer Sports Corporation issued a EUR 150 million bond targeted at
domestic and international investors. The five-year bond has an annual fixed
rate of 5.375%.
On November 2010, Amer Sports Corporation issued a EUR 30 million Schuldschein
type of a promissory note targeted at international investors. This three year
note has both fixed and floating rate tranches.
The equity ratio at the end of the year was 47.8% (48.2%) and gearing was 37%
(38%).
The Group's most significant transaction risk arises from the US dollar. Amer
Sports is a net buyer of USD because purchases related sourcing operations in
Asia are USD denominated. The next 12 month EUR/USD net flow is over USD 250
million. Weakening of the US dollar against euro has therefore a positive impact
on the company's EBIT, with a delay due to the hedges.
Amer Sports' hedging policy covers the transaction risk up to 12-18 months
forward. Depending on the business area and its characteristics, hedge ratios
are between 80-120% or 30-70%. Longer hedging horizon together with higher hedge
ratio is applied in Winter and Outdoor. Currently the hedge levels are close to
the maximums. At the end of 2010, the Group had hedged 82% of the 2011 EUR/USD
net cash flow at EUR/USD rate of 1.33. This covers all spring/summer 2011 and
most of the fall/winter 2011 USD purchases in Apparel and Footwear, where the
EUR/USD exposure is the biggest.
Because Amer Sports' consolidated financial statements are presented in euros,
Amer Sports is also subject to currency translation risk when currency dominated
result is converted into euros. Combining the transaction risk and translation
risks of the EBIT, Amer Sports is a net buyer of USD. In all other currencies
the company is a net seller. The most significant currencies after USD are CHF,
JPY, CAD and GBP, net flows varying from EUR 30 million to EUR 50 million.
A more detailed report on the Group's financial risks and how they are managed
can be found in the notes to the financial statements.
CAPITAL EXPENDITURE
Group's capital expenditure totaled EUR 39.9 (39.5) million. Depreciation
totaled EUR 35.8 million (35.0).
RESEARCH AND DEVELOPMENT
Amer Sports' strategy emphasizes excellence in consumer-centric product
creation. Through continuous research and development, Amer Sports seeks to
develop new and better sporting goods that appeal to consumers and its trade
customers.
The Group has eight R&D centers globally serving different business areas as
well as increasingly collaborating across units. A total of EUR 57.4 million
(52.0) was invested in research and development in 2010, accounting for 8.8% of
all operating expenses (2009: EUR 52.0 million, 9.0% of operating expenses;
2008: EUR 55.6 million, 9.6% of operating expenses). Winter and Outdoor's share
of the R&D expenditure was 63%, while Ball Sports accounted for 14%, and Fitness
for 23%.
On December 31, 2010, 514 (487) persons were employed in the company's research
and development activities, approximately 8% (8%) of the total number of people
employed by Amer Sports.
SALES AND MARKETING
Amer Sports sells its products to trade customers (including sporting goods
chains, specialty retailers, mass merchants, fitness clubs and distributors) and
directly to consumers through brand stores, factory outlets, and via the
Internet.
One of Amer Sports five strategic priorities is strengthening the Group's
commercial fundamentals through sales and distribution (go-to-market). The focus
is on expanding the distribution footprint both in developed and emerging
markets as well as growth in own retail and e-commerce. Amer Sports sales
organization's key objective is to achieve steadily-increasing sales by
expanding distribution in terms of the number of doors and categories per door.
On December 31, 2010, Amer Sports had sales offices in 24 countries. A total of
2,175 (2,064) persons were employed in sales and distribution activities,
representing approximately 33% (32%) of the total number of people employed by
Amer Sports.
During the year, the Group established a Group level marketing function and made
significant investments in establishing the marketing structure and
organization. The marketing organization's key objectives are to drive local
consumer understanding and local relevancy and to build the company's brand
equities.
SUPPLY CHAIN MANAGEMENT
Supply chain management encompasses all of Amer Sports' business functions from
product development to product manufacturing and outbound logistics. Reliable,
efficient and timely supply chain management is an important element in Amer
Sports' strategy.
Tight management of working capital continued in 2010. During the year, the
Group also launched a global program to reduce complexity in its product range
and initiated a major operational efficiency program in Winter Sports Equipment.
To gain operational efficiencies and cost savings, Amer Sports is constantly
reviewing both its make or buy strategy and the company's global production and
sourcing footprint. At the end of 2010, approximately 20% of Amer Sports'
production value was in the Americas, 30% in EMEA and 50% in Asia, with China
representing approximately 35%. At the end of the year, the Asian sourcing
function employed 223 (230) persons in the region.
Of Amer Sports' total production value, approximately 70% was being outsourced
at the end of 2010. This figure includes manufacturing in all racquet sports and
golf, most team sports products and most of the apparel and footwear. The
manufacturing of products and components for a variety of winter sports
equipment, cycling, sports instruments and fitness equipment has also been
outsourced.
Amer Sports most important own production facilities are located in Austria,
France, Finland, Canada, Bulgaria, and the United States.
HUMAN RESOURCES
Amer Sports' Human Resources function is a strong business partner supporting
the company's use of people processes and tools as well as ensuring the
professional and effective management of employee relations.
The Amer Sports' People Strategy is designed to support the company's corporate
strategy, strategic business initiatives and focus areas. People Strategy goals
in 2010 were as follows:
* strengthening the Amer Sports great leadership and talent management;
* enhancing the company's strong performance culture and ensuring global
consistency in performance management;
* nourishing engagement; and
* leveraging strong partnership in HR.
In 2010, Amer Sports developed its talent management model further to better
focus on successor planning and building the leadership pipeline. The Group also
began work on enhancing internal mobility.
On December 31, 2010, the number of Group employees was 6,597 (December
31, 2009: 6,331; December 31, 2008: 6,338). The increase was mainly
manufacturing personnel in Winter Sports Equipment and personnel working in own
retail. The average number of personnel in 2010 was 6,497 (2009:
6,362; 2008: 6,285). At the end of 2010, men represented 62% (2009:
62%; 2008: 58%) of Amer Sports employees and women 38% (2009: 38%; 2008: 42%).
Salaries and wages paid in 2010 totaled EUR 336.4 million (2009:
301.5; 2008: 294.7). The Amer Sports' reward system is based on performance
focusing on team and individual accountability. Basic pay is supplemented by
performance-based bonus-schemes, which cover a large share of Group employees.
The target of the company's annual incentive programs is to ensure that the
personnel has the possibility to be rewarded for the work they perform in their
area of responsibility whilst ensuring the company is achieving its financial
targets.
Amer Sports launched two new share-based incentive programs at the beginning of
2010. The aim is to offer rewards for long-term company performance whilst also
ensuring that key personnel remain within the company.
December 31, December 31, Change
2010 2009 %
---------------------------------------------------
Winter and Outdoor 4,252 3,940 8
Ball Sports 1,590 1,586 0
Fitness 691 737 -6
Headquarters 64 68 -1
---------------------------------------------------
Total 6,597 6,331 4
---------------------------------------------------
December 31, December 31, Change
2010 2009 %
---------------------------------------------
EMEA 3,855 3,590 7
Americas 2,214 2,195 1
Asia Pacific 528 546 -3
---------------------------------------------
Total 6,597 6,331 4
---------------------------------------------
December 31, December 31, Change
2010 2009 %
-----------------------------------------------------------
Manufacturing and sourcing 2,579 2,456 5
Sales and distribution 2,175 2,064 5
Support functions 837 877 -5
R&D 514 487 6
Marketing 492 447 10
-----------------------------------------------------------
Total 6,597 6,331 4
-----------------------------------------------------------
SOCIAL RESPONSIBILITY
Amer Sports is committed to implement its business strategy in an ethically and
socially responsible manner, striving to improve its performance and to meet the
company's economic, social, and environmental goals as defined in the Amer
Sports code of conduct.
All Amer Sports suppliers are required to meet the Group's standards for ethical
operations, which are based on International Labor Organization (ILO) and SA8000
standards and the United Nations Universal Declaration of Human Rights.
Amer Sports has a third party audit program to help sourcing partners comply
with industry standards, regulations, and Amer Sports' expectations in regards
to quality, health and safety, and environment and social responsibility.
Coordinated out of Amer Sports sourcing office in Hong Kong, the audit process
includes factory visits and training sessions with factory management to assist
them in meeting the company standards. Every new supplier is required to be
audited before an order can be placed.
BUSINESS SEGMENT REVIEWS
WINTER AND OUTDOOR
10-12/ 10-12/ Change Change Change Change
EUR million 2010 2009 % %*) 2010 2009 % %*)
--------------------------------------------------------------------------------
Net sales
Winter Sports
Equipment 252.8 203.7 24 19 438.4 371.7 18 12
Footwear 47.3 26.8 76 71 219.6 169.0 30 26
Apparel 63.0 47.0 34 25 156.6 135.7 15 6
Cycling 26.8 27.1 -1 -3 106.4 100.4 6 5
Sports Instruments 26.6 24.6 8 2 94.0 85.8 10 4
Net sales, total 416.5 329.2 27 21 1,015.0 862.6 18 12
EBIT excluding non-
recurring items 61.2 42.5 44 36 96.9 46.5 108 85
EBIT % excluding non-
recurring items 15 13 10 5
Non-recurring items -10.0 0.0 -10.0 0.0
EBIT total 51.2 42.5 20 14 86.9 46.5 87 66
Personnel, Dec 31 4,252 3,940 8
*) In local currencies
In 2010, Winter and Outdoor's net sales totaled EUR 1,015.0 million (862.6), an
increase of 12% in local currencies. Net sales growth was driven by Winter
Sports Equipment and Footwear. Geographically, the strongest growth was in EMEA.
In October-December, Winter and Outdoor's net sales totaled EUR 416.5 million
(329.2), an increase of 21% in local currencies. Growth was driven by Winter
Sports Equipment, Footwear and Apparel.
10-12/ 10-12/ Change Change Change Change
EUR million 2010 2009 % %*) 2010 2009 % %*)
--------------------------------------------------------------------
Americas 70.2 50.8 38 24 211.3 181.1 17 6
EMEA 294.5 236.1 25 23 687.2 585.4 17 15
Asia Pacific 51.8 42.3 22 7 116.5 96.1 21 8
--------------------------------------------------------------------
Total 416.5 329.2 27 21 1,015.0 862.6 18 12
--------------------------------------------------------------------
*) In local currencies
In 2010, EBIT excluding non-recurring items more than doubled and was EUR 96.9
million (46.5). Increased sales volumes contributed EUR 46.3 million to the EBIT
growth while higher gross margins contributed EUR 29.5 million. Operating
expenses increased by EUR 33.8 million (all in local currencies). Operating
expenses as a percentage of net sales were at previous year's level.
In October-December, EBIT excluding non-recurring items increased by 44% to EUR
61.2 million (42.5). Increased sales volumes contributed EUR 29.1 million and
higher gross margins EUR 4.9 million to the EBIT growth. Operating expenses
increased by EUR 18.3 million mainly driven by increased sales, distribution and
marketing expenses (all in local currencies).
Winter Sports Equipment
In 2010, Winter Sports Equipment net sales totaled EUR 438.4 million (371.7) and
were up by 12% in local currencies. The biggest product categories were alpine
ski equipment, representing 75% of net sales, cross country 15%, and snowboards
10%. Net sales of alpine ski equipment increased in local currencies by 9%,
cross country ski equipment increased by 41% and snowboards by 4%. In 2010, 70%
of the Winter Sports Equipment business area's net sales were derived from EMEA,
18% from the Americas, and 12% from Asia Pacific.
During the year, a major operational efficiency program was started at Winter
Sports Equipment.
In October-December, Winter Sports Equipment net sales were EUR 252.8 million
(203.7) with an increase of 19% in local currencies. All categories and regions
were contributing to the improvement.
Footwear
In 2010, Footwear net sales totaled EUR 219.6 million (169.0) and were up by
26% in local currencies. The growth came from all product categories. EMEA
continued to be the largest region representing 83% of global sales, followed by
the Americas with 14%, and Asia Pacific with 3%. The demand was particularly
strong in Germany and Austria.
In October-December, Footwear net sales totaled EUR 47.3 million (26.8) and were
up by 71% in local currencies. The fall/winter deliveries and re-orders were
very strong.
Apparel
In 2010, Apparel net sales totaled EUR 156.6 million (135.7) and were up by 6%
in local currencies. EMEA was 52% of global sales, Americas 37%, and Asia
Pacific 11%.
In October-December, Apparel net sales totaled EUR 63.0 million (47.0) and were
up by 25% in local currencies. The fall/winter deliveries and re-orders were
very strong in every region for all brands and products.
Cycling
In 2010, Cycling net sales totaled EUR 106.4 million (100.4) and were up by 5%
in local currencies. Rims and wheels represented 82% of net sales, and cycling
apparel and footwear 15%. Net sales of rims and wheels increased in local
currencies by 4%, and cycling apparel and footwear by 14%. The distribution of
Cycling net sales by geographical region was as follows: EMEA 65%, Asia Pacific
19%, and the Americas 16%. The strongest growth was in the UK and in the USA.
In October-December, Cycling net sales totaled EUR 26.8 million (27.1) and were
down by 3% in local currencies. In the Americas, net sales increased by 16%.
Sales to bike manufacturers (OEM) decreased.
Sports Instruments
In 2010, Sports Instruments net sales totaled EUR 94.0 million (85.8) and were
up by 4% in local currencies. The biggest product categories were outdoor
products, representing 41% of net sales, diving instruments 20% and training
20%. Outdoor products sales continued to grow and increased by 14%. In diving
and training instruments, sales were at previous year's level. The distribution
of net sales by geographical region was as follows: EMEA 49%, Asia Pacific 20%
and the Americas 31%.
In October-December, Sports Instruments net sales totaled EUR 26.6 million
(24.6) and were up by 2% in local currencies. Outdoor products sales continued
to grow.
BALL SPORTS
10-12/ 10-12/ Change Change Change Change
EUR million 2010 2009 % %*) 2010 2009 % %*)
--------------------------------------------------------------------------------
Net sales
Racquet Sports 44.0 40.9 8 -1 232.5 222.7 4 -1
Team Sports 51.0 43.6 17 7 212.1 187.3 13 8
Golf 12.3 10.2 21 12 76.0 66.7 14 7
Net sales, total 107.3 94.7 13 4 520.6 476.7 9 3
EBIT excluding non-
recurring items -2.7 2.2 32.2 23.5 37 35
EBIT % excluding non-
recurring items 2 6 5
Non-recurring items -2.7 0.0 -2.7 0.0
EBIT total -5.4 2.2 29.5 23.5 26
Personnel, Dec 31 1,590 1,586 1
*) In local currencies
In 2010, Ball Sports' net sales totaled EUR 520.6 million (476.7), an increase
of 3% in local currencies. Growth in Team Sports and Golf was offset by slightly
declining sales of low/mid price point rackets in Racquet Sports. Sales
increased in the Americas by 6%, were stable in EMEA and declined by 3% in Asia
Pacific mainly due to the soft tennis market in Japan.
In October-December, Ball Sports' net sales totaled EUR 107.3 million (94.7), an
increase of 4% in local currencies.
10-12/ 10-12/ Change Change Change Change
EUR million 2010 2009 % %*) 2010 2009 % %*)
------------------------------------------------------------------
Americas 72.3 61.7 17 8 334.4 298.7 12 6
EMEA 18.5 18.0 2 0 114.0 111.5 2 0
Asia Pacific 16.5 15.0 10 -5 72.2 66.5 9 -3
------------------------------------------------------------------
Total 107.3 94.7 13 4 520.6 476.7 9 3
------------------------------------------------------------------
*) In local currencies
In 2010, EBIT excluding non-recurring items was EUR 32.2 million (23.5), an
increase of 37%. Higher gross margins contributed EUR 8.8 million to the EBIT
growth and increased sales volumes contributed EUR 6.9 million. The improvement
in the gross margin is the outcome of a better sales mix. Operating expenses
increased by EUR 5.3 million. Operating expenses as a percentage of net sales
were at previous year's level.
In October-December, EBIT excluding non-recurring items was EUR -2.7 million
(2.2). The fourth quarter results in 2009 included a positive amount of EUR 3.5
million due to an exceptional revaluation of pension liabilities. Increased
sales volumes contributed EUR 1.7 million to the EBIT development and lower
gross margins contributed EUR -1.7 million. Operating expenses increased by EUR
2.6 million mainly driven by accelerated spending in marketing (all in local
currencies).
Racquet Sports
Racquet Sports net sales in 2010 totaled EUR 232.5 million (222.7) and were at
previous year's level in local currencies. In local currencies, the Americas and
EMEA were at previous year's level and Asia Pacific was down by 6%. The decline
in Asia Pacific was due to the soft tennis market in Japan. The Americas
accounted for 43% of net sales, EMEA for 35% and Asia Pacific for 22%.
The biggest product categories were tennis rackets, representing 41% of net
sales, and tennis balls 22%. Net sales of tennis rackets and tennis balls were
at previous year's level. Sales of performance rackets increased while sales of
low/mid price point rackets decreased.
In October-December, Racquet Sports net sales totaled EUR 44.0 million (40.9)
and were at previous year's level in local currencies.
Team Sports
Team Sports net sales in 2010 totaled EUR 212.1 million (187.3) and were 8% up
in local currencies. The breakdown of Team Sports sales by region was as
follows: the Americas 93%, EMEA 2% and Asia Pacific 5%. In local currencies,
Asia Pacific grew by 21%, the Americas by 7%, and EMEA was at previous year's
level
The biggest product categories were American footballs, representing 21% of net
sales, baseballs and gloves with 19%, baseball and softball bats with 19%, and
basketballs with 15%. The strongest growth in 2010 was in baseball and softball
bats (22%), basketballs (10%) and ball gloves (10%) (in local currencies).
In October-December, Team Sports net sales totaled EUR 51.0 million (43.6) and
were 7% up in local currencies. The growth in Team Sports was driven by bats and
basketballs in the Americas.
Golf
Golf net sales in 2010 totaled EUR 76.0 million (66.7) and were up by 7% in
local currencies. EBIT was negative. The breakdown of sales by region was: the
Americas 49%, EMEA 40% and Asia Pacific 11%. In local currencies, the Americas
increased by 18% and the EMEA by 3%, while Asia Pacific fell by 13 %. The
biggest product categories were clubs, representing 56% of net sales, and balls
30%. Net sales of balls increased in local currencies by 26% and clubs by 2%.
In October-December, Golf net sales totaled EUR 12.3 million (10.2) and were
12% up in local currencies.
FITNESS
10-12/ 10-12/ Change Change Change Change
EUR million 2010 2009 % %*) 2010 2009 % %*)
--------------------------------------------------------------------------------
Net sales 59.6 58.9 1 -6 204.8 194.1 6 1
EBIT excluding non-
recurring items 4.3 4.5 -4 -1 2.7 -2.5
EBIT % excluding non-
recurring items 7 8 1
Non-recurring items -2.3 -5.0 -2.3 -5.0
EBIT total 2.0 -0.5 0.4 -7.5
Personnel, Dec 31 691 737 -6
*) In local currencies.
In 2010, Fitness' net sales totaled EUR 204.8 million (194.1), and were at
previous year's level in local currencies. Geographically, growth in EMEA and
Asia Pacific compensated the decline in the Americas. Net sales was negatively
impacted by EUR 4.5 million due an adjustment in revenue recognition of sale of
extended warranties.
In 2010, commercial business (clubs and institutions) represented 89% of
Fitness' net sales while consumer (home use) was 11%. Commercial business was up
by 2% in local currencies while consumer business fell by 10%. Commercial
business started to show some early signs of recovery during 2010. During the
second half of the year, it was up in all regions. Sales of premium consumer
equipment for home use continued to be sluggish.
In 2010, Fitness' EBIT excluding non-recurring items was EUR 2.7 million (-
2.5). Operating expenses were EUR 4.0 million lower compared to 2009 (in local
currencies).
In October-December, Fitness' net sales totaled EUR 59.6 million (58.9) and were
6% down in local currencies. Net sales was negatively impacted by EUR 4.5
million due an adjustment in revenue recognition of sale of extended warranties.
The underlying net sales was at previous year's level.
In October-December, EBIT excluding non-recurring items was EUR 4.3 million
(4.5).
10-12/ 10-12/ Change Change Change Change
EUR million 2010 2009 % %*) 2010 2009 % %*)
------------------------------------------------------------------
Americas 41.6 42.3 -2 -10 142.2 140.7 1 -4
EMEA 12.8 11.9 8 4 44.5 38.1 17 14
Asia Pacific 5.2 4.7 11 -1 18.1 15.3 18 9
------------------------------------------------------------------
Total 59.6 58.9 1 -6 204.8 194.1 6 1
------------------------------------------------------------------
*) In local currencies
DIVESTMENTS
Amer Sports Corporation divested its unused manufacturing site in Rumilly,
France in October 2010. The transaction price totaled EUR 8 million, resulting a
capital gain of EUR 7.4 million reported as a non-recurring item.
CORPORATE GOVERNANCE STATEMENT
In its decision making and administration, Amer Sports applies the Finnish
Companies Act, the Finnish Securities Markets Act and the rules issued by the
NASDAQ OMX Helsinki Stock Exchange, Amer Sports' Articles of Association, and
the Finnish Corporate Governance Code 2010 for listed companies. Amer Sports
complies with the code without exceptions.
The Amer Sports Corporate Governance statement has been issued as a separate
report on the company's web site. It has been prepared pursuant to
Recommendation 54 of the Finnish Corporate Governance Code 2010 for listed
companies and the Securities Markets Act (Chapter 2, Section 6). Amer Sports'
auditors have checked that the statement has been issued and that the
description of the main features of the internal control and risk management
systems in relation to the financial reporting process is consistent with Amer
Sports' financial statements.
CHANGES IN TOP MANAGEMENT
On December 22, 2009, the Amer Sports Board of Directors appointed Heikki Takala
as Amer Sports' President and CEO with effect from April 1, 2010. Pekka
Paalanne, Executive Vice President and Deputy to the President and CEO, was
acting President and CEO from December 22, 2009, until March 31, 2010.
Amer Sports appointed Mikko Moilanen President of Suunto Oy starting on March
17, 2010. At the same time, Juha Pinomaa, the previous President of Suunto Oy,
resigned from the company at his own request.
Amer Sports appointed Andy Towne to the position of President of Apparel with
effect from October 11, 2010. Mr Towne is also 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.
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. SVP, Sales and Channel Management Thomas Ehrnrooth left the company on
October 15, 2010.
Jussi Siitonen, Senior Vice President, Finance, was appointed to the position of
Chief Financial Officer (CFO) on January 1, 2011 as the previous holder of the
position, Executive Vice President Pekka Paalanne, retired at the end of 2010.
Mr Siitonen also became a member of the Amer Sports Executive Board on January
1, 2011.
Victor Duran, Senior Vice President, Marketing and Business to Consumer, became
a member of the Amer Sports Executive Board on January 1, 2011.
All members of the Executive Board report to Heikki Takala, Amer Sports'
President and CEO.
Additional details concerning members of the Amer Sports' Executive Board can be
founded at: www.amersports.com/about. Information on related parties can be
found in the notes to the financial statements.
SHARES AND SHAREHOLDERS
The company's share capital totaled EUR 292,182,204 on December 31, 2010 and the
number of shares was 121,517,285. Each share entitles the holder to one vote at
the company's general meeting.
Authorizations
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 for 18 months from the date of the
Annual General Meeting's decision.
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
In 2010, a total of 55.2 million (71.0) Amer Sports shares with a value totaling
EUR 475.0 million (458.3) were traded on the NASDAQ OMX Helsinki Ltd. Share
turnover was 45.5% (76.4%) (expressed as a proportion of the average number of
shares, excluding own shares). The average daily volume in 2010 was 218,941
shares (283,014).
The closing price of the Amer Sports Corporation share on the NASDAQ OMX
Helsinki Ltd stock exchange on December 31, 2010 was EUR 10.43 (2009: 7.00). The
share price rose 49% during the year while OMX Helsinki Cap index rose 25%.
Shares registered a high of EUR 10.70 (7.19) and a low of EUR 6.82 (3.67). The
average share price was EUR 8.61 (6.45). On December 31, 2010, the company had a
market capitalization of EUR 1,263.8 million (848.3), excluding own shares.
At the end of December, Amer Sports Corporation had 15,400 registered
shareholders (13,342). Outside Finland, ownership and nominee registrations
represented 51.3% (52.6%) of the company's shares. Public sector entities owned
13.2% (12.5), households 12.4% (12.4), financial and insurance corporations
13.1% (11.7), non-profit institutions 7.5% (8.2), and private companies 2.2%
(2.3).
Major shareholders, December 31, 2010 (does not include nominee registrations)
% of shares and
Shares votes
1 Ilmarinen Mutual Pension Insurance Company 5,740,464 4.72
2 Varma Mutual Pension Insurance Company 5,341,678 4.40
3 Maa- ja Vesitekniikan Tuki ry. 5,000,000 4.11
4 Brotherus Ilkka 2,683,416 2.21
5 Mandatum Life Insurance Company Limited 2,247,559 1.85
6 Tapiola Mutual Pension Insurance Company 1,827,091 1.50
7 Odin Norden 1,687,632 1.39
8 OP-Delta Fund 1,550,000 1.28
9 The State Pension Fund 1,433,104 1.18
10 OP-Finland Value Fund 1,382,117 1.14
Amer Sports held 342,963 (334,900) of its own shares at the end of 2010, all of
them owned by Amer Sports International Oy. The number of own shares corresponds
to 0.28% of all Amer Sports shares. A total of 38,063 shares granted as share-
based incentives were returned to Amer Sports International Oy in 2010 in
accordance with the terms of the incentive plan as employment ended. In
addition, Amer Sports International Oy transferred 30,000 shares to Heikki
Takala, Amer Sports' President and CEO as part of his remuneration in April,
2010.
Notification of change in shareholding under the Finnish Securities Market Act
In November 3, 2010, Amer Sports Corporation received information to the effect
that on November 1, 2010, Silchester International Investors Limited
("Silchester Limited") transferred its regulated business to Silchester
International Investors LLP ("Silchester LLP"). This notification was therefore
triggered by the change in the legal structure of the investment management firm
on November 1, 2010 rather than trading activity in the underlying shares.
Owners of institutional investors and funds, who have given full discretion over
their investments to Silchester LLP, owned 19,307,292 shares, which represented
15.89% of Amer Sports Corporation's share capital and voting rights on November
1, 2010.
In December 15, 2010, Amer Sports Corporation received information to the effect
that the share capital and voting rights of owners of institutional investors
and funds, who have given full discretion over their investments to Silchester
LLP, had fallen below 15%. At the moment of the notification, Silchester LLP
owned 18,133,818 shares, which represented 14.92% of Amer Sports Corporation's
share capital and voting rights.
Disclosure of control
Amer Sports' Board of Directors is not aware of any natural or legal persons who
have control over the company or has information on these persons' portion of
the voting rights of the shares and of the total number of shares.
Agreements and arrangements relating to shareholdings and the use of voting
rights
The Amer Sports' Board of Directors is not aware of any agreements or
arrangements concerning the ownership of the company's shares and the use of
their voting rights.
Shareholdings of Board of Directors and Executive Board on December 31, 2010
Circle of acquaintances
Shareholder Shares and controlled corporations
--------------------------------------------------------------------------------
Board of Directors
--------------------------------------------------------------------------------
Anssi Vanjoki 26,995
Ilkka Brotherus 2,683,416 10,250
Martin Burkhalter 6,880
Christian Fischer 6,880
Hannu Ryöppönen 5,164 14,175
Bruno Sälzer 6,880
Pirjo Väliaho 9,091
--------------------------------------------------------------------------------
Executive Board
--------------------------------------------------------------------------------
Heikki Takala 32,900
Pekka Paalanne 53,350
Paul Byrne 1,282
Chris Considine 8,521
Mike Dowse 6,665
Matt Gold 6,685
Terhi Heikkinen 1,400
Antti Jääskeläinen 1,500
Bernard Millaud 8,243
Mikko Moilanen 1,300
Jean-Marc Pambet 8,155
Michael Schineis 11,193
Andrew Towne 0
Vincent Wauters 25,690
Michael White 4,559
--------------------------------------------------------------------------------
TOTAL 2,916,749
--------------------------------------------------------------------------------
% of shares 2.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Including circle of acquaintances and 2,941,174
controlled corporations
--------------------------------------------------------------------------------
% of shares 2.4
--------------------------------------------------------------------------------
During the year, the Group had three share-based incentive arrangements for
Group key personnel. The share-based incentive arrangements are described in the
notes to the financial statements.
RESOLUTIONS OF THE GENERAL MEETINGS OF SHAREHOLDERS
The following resolutions were approved at the Amer Sports Corporation Annual
General Meeting held on March 10, 2010:
Adoption of the annual accounts
The Annual General Meeting (AGM) approved Amer Sports Corporation's financial
statements for 2009.
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 0.16 per share to be paid for
the financial year ended December 31, 2009. The dividend was paid to
shareholders who were registered on the list of shareholders maintained by
Euroclear Finland Ltd as of March 15, 2010, the record date for the dividend
payment. The dividend was paid on March 23, 2010.
Resolution on the discharge of the members of the Board of Directors and the
CEOs from liability
The AGM granted members of the company's Board of Directors and the company's
CEOs a discharge from liability for the financial year 2009.
Resolution on the remuneration of the members of the Board of Directors
The AGM approved that the remuneration payable to the members of the Board of
Directors to be elected at the Annual General Meeting for the term until the
close of the Annual General Meeting in 2011 be unchanged from 2009 and be as
follows: Chairman EUR 80,000, Vice Chairman EUR 50,000, and other members
EUR 40,000. No extra remuneration is 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 paid in the form of the company's shares and 60% in cash.
Resolution on the number of members of the Board of Directors
The AGM confirmed that the number of 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 company's Board of Directors. The Board of Directors' term of service will
run until the close of the 2011 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 Authorised Public Accountants PricewaterhouseCoopers Oy to
act as auditor of the company. Jouko Malinen, Authorised Public Accountant, was
elected as auditor in charge of the audit.
Amendment of the Articles of Association
The AGM approved that the Articles of Association regarding the notice to the
General Meeting be amended to the following:"The notice to the General Meeting shall be delivered to the shareholders at the
earliest three (3) months and at the latest twenty-one (21) days prior to the
General Meeting, however, at the minimum nine (9) days before the record date of
the General Meeting, by releasing the notice on the company's website and, if so
decided by the Board of Directors, by publishing the notice in one newspaper
with a wide circulation determined by the Board of Directors."
The AGM approved that the Section 9 of the Articles of Association regarding the
notice to the General Meeting be amended to the following:"In order to attend a General Meeting, a shareholder shall register his
participation with the company in a manner indicated in the notice to convene
and by the therein indicated registration date, which date may not be earlier
than nine (9) days prior to the meeting."
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 7,000,000 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 Ltd and Euroclear Finland Ltd.
The Repurchase Authorization is valid 18 months from the decision of the Annual
General Meeting.
Authorizing the Board of Directors to decide on the issuance of shares and on
conveying the company's own shares
The AGM authorized the Board of Directors to decide on issuing new shares and/or
conveying the company's own shares held by the company as follows:
By virtue of the authorization, 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 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 does not revoke the share issue authorization given by the Annual
General Meeting on March 5, 2009.
Amer Sports Board of Directors did not use its authorizations during 2010.
BOARD OF DIRECTORS
At its organizing meeting immediately following the Annual General Meeting, Amer
Sports Corporation's Board of Directors appointed Anssi Vanjoki as Chairman and
Ilkka Brotherus as Vice Chairman. The Board appointed from among its members the
following members to the 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.
In 2010, the Board of Directors had 12 meetings, the Compensation Committee 5
meetings, the Nomination Committee 5 meetings and the Audit Committee 5
meetings.
OTHER EVENTS DURING THE REVIEW PERIOD
According to information received by Amer Sports Corporation on November
9, 2010, the two private individuals who brought claims for damages against Amer
Sports Corporation in 2005 in connection with its discontinued tobacco business
had withdrawn their petition for leave to appeal and their appeal in the Supreme
Court. The judgment passed by the Helsinki Court of Appeal on May 31, 2010 will
thus be the final ruling on the matter. The Court of Appeal dismissed all claims
for damages against Amer Sports Corporation. The Court of Appeal did not amend
the judgments passed in the matter by Helsinki District Court in 2008, where all
claims made by the claimants had also been dismissed.
The case concerned claims for damages brought by two private individuals,
whereby they claimed damages and legal costs jointly and severally from Amer
Sports Corporation and its subsidiary Amerintie 1 Oy (previously Amer-Tupakka
Oy) and another tobacco manufacturer.
Amer Sports Corporation fully divested the tobacco business in March 2004.
AMER SPORTS STRATEGY AND FINANCIAL TARGETS
In September 2010, 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. Group strategy
emphasizes faster growth in softgoods, i.e. apparel and footwear, excellence in
consumer-centric product creation and brand marketing (winning with consumers),
and the strengthening of commercial fundamentals through the development of
sales and distribution (winning in 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 are being developed with clear portfolio roles. Each unit has
specific growth and profitability targets with a clearly-assigned role in
creating scale and synergy for the company. Most group synergies lie within the
Ball Sports, Winter Sports Equipment, 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. This will build scale in softgoods sourcing, R&D,
design and product line management. To ensure local relevance and winning with
consumers, the Group will establish a set-up for local consumer insight and
reinforcing global marketing capabilities. Expanding the Group's distribution
footprint in both developed and emerging markets while also achieving growth in
own retail and e-commerce are the focus of winning in go-to-market. The Group
will continue to drive operational excellence, the tight management of working
capital and the improvement of gross margins.
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 as well as consumer
demand development in North America, Europe and Japan.
For example, the following risks can potentially have an impact on the company's
development:
* The sporting goods industry is subject to risks related to consumer demand
in various parts of the world. Amer Sports is particularly dependent on
general economic conditions and consumer demand in North America, Europe and
Japan.
* The sporting goods industry is highly competitive and includes many
regional, national and global companies. Although Amer Sports has no
competitors that challenge it across of all of its product categories, the
company faces competition from number of companies in most of the product
categories. There cannot be assurance that additional competitors will not
enter Amer Sports' existing markets or that Amer Sports will be able to
compete successfully against existing or new competitors.
* Sales of winter sports equipment are affected by snow conditions. Winter
sports equipment represents 25% of Amer Sports' sales.
* A large part of Amer Sports' production is outsourced. Amer Sports is
constantly reviewing the global production and sourcing footprint to gain
operational efficiencies and cost savings. Although the business areas audit
their subcontractors regularly, possible delivery problems or breaches of
contract by subcontractors may have an impact on Amer Sports' operations.
* Labour costs are expected to increase in Asia where Amer Sports sources a
significant portion of its products. Amer Sports uses steel, rubber, and
oil-based raw materials and components in its products and must obtain
adequate supplies of these raw materials from the markets in competition
with the other users of such materials. Increases in labour and raw material
costs can have a negative impact on product costs.
* Amer Sports' most important production facilities are the Winter Sports
Equipment factories in Austria and Bulgaria, Precor's factory in the United
States, and the Suunto factory in Finland. In addition, Amer Sports has
major factories in Eastern Europe, which are owned by subcontractors. Amer
Sports' most important distribution centers are located in Germany, Austria,
the United States, and France. Any unexpected production or delivery breaks
in these units would have a negative impact on the company's business.
* Amer Sports success is dependent on its ability to identify and respond to
constantly shifting trends in consumer demand, its ability to leverage
advancements in technologies and to develop new and appealing products.
Sales of Amer Sports' products may be negatively affected if it is not
successful in introducing innovative products in response to changes in
consumer preferences, technology and industry trends.
* Losing a significant client would affect Amer Sports' sales. However, this
risk is limited because Amer Sports' client base is diversified.
* Growing the number of Amer Sports' own retail stores require up-front
investment. In addition, the maintenance of the stores and the personnel
employed in own retail create more fixed costs than distribution to trade
customers. A failure to execute Amer Sports retail growth plan as part of
Amer Sports multi-channel sales strategy could have a negative impact on
Amer Sports' results.
* Despite extensive testing of its products before market launch, the company
cannot completely rule out the risk of product recalls and legal actions
related to product liability. Amer Sports has standard insurance cover
against the financial consequences of product recalls and product liability
cases. Product quality issues could harm Amer Sports' reputation and, as a
result, could have an adverse effect on its sales.
* A characteristic feature of the sporting goods industry is the need to
protect intellectual property rights (IPR) and disputes connected with them.
Amer Sports success depends in part on its ability to protect its
innovations, trademarks and other IPR from unauthorized use by others
through obtaining relevant protection in countries where it operates and to
enforce its' IPRs. Any litigation to defend against claims or infringement
could result in substantial costs and diversion of resources and could
negatively affect results of operations or competitive position of Amer
Sports. The material impacts on Amer Sports' financial position and
operational result arising from pending litigation affecting the business
areas and decisions of the authorities are assessed regularly, and current
estimates are presented publicly when necessary.
* Amer Sports sources a significant portion of its products from
subcontractors located throughout Asia, which exposes it to the political,
economic, and regulatory conditions in that area, and to a variety of local
business and labor practice issues. Although Amer Sports has third party
audit program in Asia, Amer Sports cannot fully control its' subcontractors
actions. The violation of labor laws, regulations or standards by Amer
Sports' subcontractors, or the divergence of those subcontractors' labor
practices from those generally accepted as ethical in the European Union or
the international community, could have a material adverse effect on Amer
Sports' public image and the reputation of its brands.
* Amer Sports relies on data communications to operate its business, and it is
in the process of integrating its IT platform globally and implementing
further applications to better control its supply chain. System failures and
service interruptions may occur as the result of a number of factors. Any of
these factors could have a material adverse affect on Amer Sports'
business.
* Financial risks are described under "Cash flow and financing".
EVENTS AFTER THE REVIEW PERIOD
Amer Sports Corporation received information on February 2, 2011to the effect
that Governance for Owners LLP's share capital and voting rights of Amer Sports
had fallen below 5% on February 1, 2011.
OUTLOOK FOR 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.
BOARD OF DIRECTORS' PROPOSAL FOR DISTRIBUTION OF EARNINGS
The parent company's unrestricted shareholders' equity amounts to EUR
237,631,572.60 of which the net result for the period is EUR 10,922,127.80.
The Board of Directors proposes to the Annual General Meeting that the
distributable earnings be used as follows:
- A dividend of EUR 0.30 per share, totaling EUR 36,455,185.50 to be paid to
shareholders
- EUR 201,176,387.10 to be carried forward in unrestricted shareholders' equity
Totaling EUR 237,631,572.60
No dividend will be paid for own shares held by the company.
There have been no significant changes to the company's financial position since
the close of the financial period. According to the Board of Directors, the
proposed dividend distribution does not endanger the company's financial
standing.
TABLES
The figures presented in this stock exchange release are based on the Group's
audited financial statements, and it has been prepared in accordance with the
International Financial Reporting Standards (IFRS) as adopted by EU. The notes
are an integral part of consolidated financial information.
EUR million
CONSOLIDATED RESULTS
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2010 2009 % 2010 2009 %
--------------------------------------------------------------------------------
NET SALES 583.4 482.8 21 1,740.4 1,533.4 13
Cost of goods sold -345.6 -286.3 -998.4 -913.4
--------------------------------------------------------------------------------
GROSS PROFIT 237.8 196.5 21 742.0 620.0 20
License income 2.7 1.6 9.5 8.2
Other operating income 9.8 -0.3 12.4 4.6
R&D expenses -16.7 -14.1 -57.4 -52.0
Selling and marketing expenses -131.5 -111.2 -443.1 -398.6
Administrative and other
expenses -53.7 -33.1 -166.6 -138.4
--------------------------------------------------------------------------------
EARNINGS BEFORE
INTEREST AND TAXES 48.4 39.4 23 96.8 43.8 121
% of net sales 8.3 8.2 5.6 2.9
Financing income and expenses -5.7 -7.1 -21.3 -18.4
--------------------------------------------------------------------------------
EARNINGS BEFORE TAXES 42.7 32.3 32 75.5 25.4
Taxes -4.6 4.3 -6.6 6.0
--------------------------------------------------------------------------------
NET RESULT 38.1 36.6 4 68.9 31.4 119
--------------------------------------------------------------------------------
Attributable to:
Equity holders of the parent
company 38.1 36.6 68.8 31.3
Non-controlling interests 0.0 0.0 0.1 0.1
Earnings per share, EUR 0.30 0.37 0.52 0.28
Earnings per share, diluted, EUR 0.30 0.37 0.52 0.28
Adjusted average number of
shares in issue less own shares,
million 121.2 97.7
Adjusted average number of
shares in issue less own shares,
diluted, million 121.2 97.7
Equity per share, EUR 6.50 6.05
ROCE, % *) 10.0 4.3
ROE, % 9.0 5.0
Average rates used:
EUR 1.00 = USD 1.33 1.39
*) 12 months' rolling average
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
10-12/ 10-12/ 1-12/ 1-12/
2010 2009 2010 2009
---------------------------------------------------------------------
Net result 38.1 36.6 68.9 31.4
Other comprehensive income
Translation differences 10.5 5.8 28.7 -0.5
Cash flow hedges 4.4 1.7 -0.2 1.1
Income tax related to
cash flow hedges -1.2 -0.5 0.0 -0.3
---------------------------------------------------------------------
Other comprehensive income,
net of tax 13.7 7.0 28.5 0.3
---------------------------------------------------------------------
Total comprehensive income 51.8 43.6 97.4 31.7
---------------------------------------------------------------------
Total comprehensive income attributable to:
Equity holders of the parent
company 51.8 43.6 97.3 31.6
Non-controlling interests 0.0 0.0 0.1 0.1
NET SALES BY BUSINESS SEGMENT
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2010 2009 % 2010 2009 %
--------------------------------------------------------------
Winter and Outdoor 416.5 329.2 27 1,015.0 862.6 18
Ball Sports 107.3 94.7 13 520.6 476.7 9
Fitness 59.6 58.9 1 204.8 194.1 6
--------------------------------------------------------------
Total 583.4 482.8 21 1,740.4 1,533.4 13
--------------------------------------------------------------
EBIT BY BUSINESS SEGMENT
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2010 2009 % 2010 2009 %
----------------------------------------------------------
Winter and Outdoor 51.2 42.5 20 86.9 46.5 87
Ball Sports -5.4 2.2 29.5 23.5 26
Fitness 2.0 -0.5 0.4 -7.5
Headquarters 0.6 -4.8 -20.0 -18.7
----------------------------------------------------------
Total 48.4 39.4 23 96.8 43.8 121
----------------------------------------------------------
GEOGRAPHIC BREAKDOWN OF NET SALES
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2010 2009 % 2010 2009 %
--------------------------------------------------------
Americas 184.1 154.6 19 687.9 620.5 11
EMEA 325.8 266.1 22 845.7 735.0 15
Asia Pacific 73.5 62.1 18 206.8 177.9 16
--------------------------------------------------------
Total 583.4 482.8 21 1,740.4 1,533.4 13
--------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
Note 10-12/2010 10-12/2009 1-12/2010 1-12/2009
--------------------------------------------------------------------------------
Earnings before interest and
taxes 48.4 39.4 96.8 43.8
Adjustments to cash flow from
operating activities and
depreciation 1.6 9.2 28.3 34.6
Change in working capital 40.6 97.2 -18,8 136.7
--------------------------------------------------------------------------------
Cash flow from operating
activities
before financing items and taxes 90.6 145.8 106.3 215.1
Interest paid and received -5.1 -0.7 -14.3 -20.9
Income taxes paid and received -14.6 3.2 -11.9 -12.6
--------------------------------------------------------------------------------
Net cash flow from operating
activities 70.9 148.3 80.1 181.6
Acquired operations - -1.8 - -3.0
Capital expenditure on non-
current
tangible and intangible assets -21.2 -18.0 -39.9 -39.5
Proceeds from sale of tangible
non-
current assets 8.0 0.7 9.9 1.4
--------------------------------------------------------------------------------
Net cash flow from investing
activities -13.2 -19.1 -30.0 -41.1
Net cash flow after investing
activities
(free cash flow) 57.7 129.2 50.1 140.5
Share issue, net - 151.5 - 151.5
Interest on hybrid bond - - -7.2 -
Dividends paid 5 - - -19.5 -11.8
Hybrid bond 3 - - - 60.0
Change in debt and other
financing
items -24.2 -221.7 -64,3 -290.9
--------------------------------------------------------------------------------
Net cash flow from financing
activities -24.2 -70.2 -91.0 -91.2
Cash and cash equivalents on
October 1/ January 1 50.2 62.4 121.6 72.1
Translation differences 1.0 0.2 4.0 0.2
Change in cash and cash
equivalents 33.5 59.0 -40.9 49.3
--------------------------------------------------------------------------------
Cash and cash equivalents on
December 31 84.7 121.6 84.7 121.6
CONSOLIDATED BALANCE SHEET
Note December 31, 2010 December 31, 2009
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
Goodwill 286.7 273.6
Other intangible non-current assets 214.2 210.1
Tangible non-current assets 140.2 135.0
Other non-current assets 100.5 74.3
Inventories and work in progress 302.1 234.6
Receivables 525.4 475.4
Cash and cash equivalents 84.7 121.6
--------------------------------------------------------------------------------
Total assets 2 1,653.8 1,524.6
--------------------------------------------------------------------------------
Shareholders' equity and liabilities
--------------------------------------------------------------------------------
Shareholders' equity 3 790.2 735.3
Long-term interest-bearing liabilities 278.7 282.8
Other long-term liabilities 19.6 14.4
Current interest-bearing liabilities 100.8 121.3
Other current liabilities 434.6 340.0
Provisions 29.9 30.8
--------------------------------------------------------------------------------
Total shareholders' equity and 1,653.8 1,524.6
liabilities
--------------------------------------------------------------------------------
Equity ratio, % 47.8 48.2
Gearing, % 37 38
EUR 1.00 = USD 1.34 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 -0.5 -0.5
Cash flow
hedges 1.1 1.1
Income tax
related to
cash flow
hedges -0.3 -0.3
Net result 31.3 31.3
Total
comp-
rehensive
income -0.5 0.8 31.3 31.6
Transact-
ions with
owners:
Share
issue 160.0 160.0
Transact-
ion costs
of share
issue -8.5 -8.5
Dividend
distribution 5 -11.6 -11.6
Reissu-
ance of
own
shares 0.1 0.1
Hybrid
bond 3 60.0 -4.4 55.6
----------------------------------------------------------------------------
Balance at
Dec. 31,
2009 292.2 12.1 -5.6 -63.0 -5.4 151.5 60.0 290.9 732.7
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 28.7 28.7
Cash flow
hedges -0.2 -0.2
Income tax
related to
cash flow
hedges 0.0 0.0
Net result 68.8 68.8
Total
comp-
rehensive
income 28.7 -0.2 68.8 97.3
Transact-
ions with
owners:
Share-
based
incentive
program 0.5 0.5
Dividend
distribution 5 -19.4 -19.4
Hybridbond 3 -5.3 -5.3
Other
change -18.2 -18.2
----------------------------------------------------------------------------
Balance at
Dec. 31,
2010 292.2 12.1 -5.6 -34.3 -5.6 151.5 60.0 317.3 787.6
Non-controlling Total shareholders'
Note interests equity
------------------------------------------------------------------
Balance at Jan. 1, 2009 2.6 508.1
Other comprehensive
income:
Translation differences -0.5
Cash flow hedges 1.1
Income tax related
to cash flow hedges -0.3
Net result 0.1 31.4
Total comprehensive
income 0.1 31.7
Transactions with
owners:
Share issue 160.0
Transaction costs
of share issue -8.5
Dividend distribution 5 -0.2 -11.8
Reissuance of
own shares 0.1
Hybrid bond 3 55.6
Other change in
non-controlling interests 0.1 0.1
------------------------------------------------------------------
Balance at
Dec. 31, 2009 2.6 735.3
Balance at Jan. 1, 2010 2.6 735.3
Other comprehensive
income:
Translation differences 28.7
Cash flow hedges -0.2
Income tax related to
cash flow hedges 0.0
Net result 0.1 68.9
Total comprehensive
income 0.1 97.4
Transactions with
owners:
Share-based incentive
program 0.5
Dividend distribution 5 -0.1 -19.5
Hybrid bond 3 -5.3
Other change -18.2
------------------------------------------------------------------
Balance at
Dec. 31, 2010 2.6 790.2
QUARTERLY BREAKDOWN OF NET SALES AND EBIT
Q4/ Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/
NET SALES 2010 2010 2010 2010 2009 2009 2009 2009
------------------------------------------------------------------
Winter and Outdoor 416.5 300.3 116.5 181.7 329.2 262.4 106.6 164.4
Ball Sports 107.3 114.0 153.9 145.4 94.7 103.4 135.7 142.9
Fitness 59.6 52.6 47.1 45.5 58.9 44.8 42.4 48.0
------------------------------------------------------------------
Total 583.4 466.9 317.5 372.6 482.8 410.6 284.7 355.3
------------------------------------------------------------------
Q4/ Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/
EBIT 2010 2010 2010 2010 2009 2009 2009 2009
------------------------------------------------------------------
Winter and Outdoor 51.2 58.2 -24.2 1.7 42.5 44.1 -29.2 -10.9
Ball Sports -5.4 3.5 17.0 14.4 2.2 2.4 7.4 11.5
Fitness 2.0 2.8 -3.7 -0.7 -0.5 -1.4 -2.2 -3.4
Headquarters 0.6 -8.7 -6.0 -5.9 -4.8 -4.4 -5.4 -4.1
------------------------------------------------------------------
Total 48.4 55.8 -16.9 9.5 39.4 40.7 -29.4 -6.9
------------------------------------------------------------------
THE NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
The consolidated financial statements have been prepared in accordance with the
International Financial Reporting Standards (IFRS) approved for use in the EU,
observing the IAS and IFRS standards and SIC and IFRIC interpretations in force
as of December 31, 2010.
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. The revised
standard requires the effects of all transactions with non-controlling interests
to be recorded in equity if there is no change in control and these transactions
will no longer result in goodwill or gains and losses.
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
---------------------------------------------------------------------
1-12/2010
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
---------------------------------------------------------------------
1-12/2009
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
1-12/2010 1-12/2009
--------------------------------
Americas 687.9 620.5
EMEA 845.7 735.0
Asia Pacific 206.8 177.9
--------------------------------
Total 1,740.4 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
December December
31, 2010 31, 2009
----------------------------------------------------
Nominal value
Foreign exchange forward contracts 678.1 502.8
Forward rate agreements - 100.0
Interest rate swaps 169.8 204.4
Fair value
Foreign exchange forward contracts -9.1 -1.1
Forward rate agreements - -0.1
Interest rate swaps -2.8 -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
December December
31, 2010 31, 2009
---------------------------------------------------------------
Guarantees 14.1 10.5
Liabilities for leasing and rental agreements 123.2 116.9
Other liabilities 18.7 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 fourth quarter, Amer Sports net sales totaled EUR 583.4 million (482.8),
an increase of 21% compared to October-December 2009. Net sales increased by
14% in local currency terms, particularly due to sales growth in Winter Sports
Equipment, Apparel and Footwear. Gross margin was at previous year's level.
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#1485076]
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