2012-01-31 12:00:00 CET
2012-01-31 12:00:43 CET
REGULATED INFORMATION
Amer Sports - Financial Statement Release
Amer Sports Corporation Financial Statements Bulletin 2011: A record year with full-year net sales up by 9%, EBIT margin up by 1.0 percentage point
Amer Sports Corporation
FINANCIAL STATEMENTS BULLETIN
January 31, 2012 at 1:00 pm
Amer Sports Corporation Financial Statements Bulletin 2011:
A record year with full-year net sales up by 9%, EBIT margin up by 1.0
percentage point
OCTOBER-DECEMBER 2011
* Net sales EUR 556.9 million (583.4). In local currencies, net sales
increased by 2%.
* Strong broad-based growth across the business areas, partially offset by
Winter Sports Equipment due to the warm start of the winter and the third
quarter focused shipment schedule.
* EBIT EUR 46.3 million (56.0, excluding non-recurring items) impacted by the
high EBIT in the third quarter due to the shipment schedule in Winter Sports
Equipment.
* Earnings per share EUR 0.25 (0.30).
* Net cash flow after investing activities EUR 49.0 million (57.7) mainly
driven by higher inventories and receivables in Winter Sports Equipment.
JANUARY-DECEMBER 2011
* Net sales EUR 1,880.8 million (1,740.4). In local currencies, net sales
increased by 9%.
* EBIT up by 26% to EUR 135.5 million (107.9, excluding non-recurring items).
EBIT margin 7.2% (6.2, excluding non-recurring items).
* Earnings per share EUR 0.71 (0.52).
* Net cash flow after investing activities EUR -21.4 million (50.1).
* Gearing 47% (December 31, 2010: 37%).
* Amer Sports Board of Directors is proposing a dividend of EUR 0.33 per share
(0.30 per share in 2010).
OUTLOOK FOR 2012
In 2012, Amer Sports will continue to invest into executing its long-term
strategy and sustaining profitable growth.
Amer Sports expects broad-based improvement across business areas in 2012. In
Winter Sports Equipment, the slow start of the 2011/12 season due to the warm
weather in key markets is expected to have an adverse impact on the 2012 pre-
orders. Apparel and Footwear pre-orders for spring/summer are up by 28% and
14%, respectively. Overall, Amer Sports' 2012 net sales in local currencies are
expected to increase from 2011.
KEY FIGURES
10-12/ 10-12/
EUR million 2011 2010 Ch % Ch %*) 2011 2010 Ch % Ch %*)
--------------------------------------------------------------------------------
Net sales 556.9 583.4 -5 2 1,880.8 1,740.4 8 9
Gross profit 235.9 237.8 -1 817.4 742.0 10
Gross profit % 42.4 40.8 43.5 42.6
EBIT excluding non-
recurring items 46.3 56.0 -17 135.5 107.9 26
EBIT % excluding non-
recurring items 8.3 9.6 7.2 6.2
Non-recurring items**) - -7.6 - -11.1
EBIT total 46.3 48.4 -4 135.5 96.8 40
EBIT % 8.3 8.3 7.2 5.6
Financing income and
expenses -6.1 -5.7 -20.5 -21.3
Earnings before taxes 40.2 42.7 115.0 75.5
Net result 31.1 38.1 90.9 68.9
Earnings per share, EUR 0.25 0.30 0.71 0.52
Net cash flow after
investing activities 49.0 57.7 -21.4 50.1
Equity ratio, % at year
end 45.6 47.8
Gearing, % at year end 47 37
Personnel at year end 7,061 6,645 6
Average rates used,
EUR/USD 1.39 1.33
*) Comparable sales 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
a material impact on EBIT.
HEIKKI TAKALA, PRESIDENT AND CEO:"2011 was a record year for Amer Sports. The company reached all-time high in
sales and EBIT with net sales up by 9% and EBIT by 26%. Almost all of our
business units and geographic regions are improving and we can see that the
strategy announced in 2010 is proving to work. I continue to be especially
pleased by the progress in softgoods, which in 2011 became our largest category,
representing nearly 30% of the company sales. Equally, I'm delighted by the
strong development in Fitness, up by 17%, in Cycling, up by 14%, and in Team
Sports, up by 11%.
Looking into 2012, we continue to drive our strategy. We do see some new
challenges: the Winter Sports Equipment market will be challenging due to the
slow start of the season in key markets. Further, the economical environment
remains cloudy. Despite these challenges, we will have strong performance and we
will continue driving our development programs with focus on profitable growth
and synergies."
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 IR, tel. +358 9 7257 8233
TELEPHONE CONFERENCE
An English-language conference call for investors and analysts will be held
today at 3:00 pm Finnish time. To participate in the call, please dial +44 (0)20
7784 1036 (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 3894089#.
Annual General Meeting
Amer Sports' Annual General Meeting will be held on Thursday, March 8, 2012 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 Q1/2012 results bulletin on Friday, April 27, 2012
at approximately 1:00 pm Finnish time.
FINANCIAL RESULTS IN OCTOBER-DECEMBER
NET SALES AND EBIT IN OCTOBER-DECEMBER
Amer Sports' net sales in October-December 2011 totaled EUR 556.9 million
(583.4). Comparable net sales in local currencies increased by 2%.
Sales in Winter Sports Equipment declined by 14% in local currencies due to the
shipment schedule as more deliveries took place already in the third quarter.
Also, the slow start of the season due to the warm weather impacted adversely on
in-season orders in Winter Sports Equipment. This was offset by the strong 30%
growth in Fitness and the continuously good development in Footwear, up by 18%,
Cycling, up by 17%, Team Sports, up by 16% and Apparel, up by 12%. Comparable
net sales decreased in EMEA by 9%, and increased in the Americas by 19% and in
Asia Pacific by 6%.
Net sales by business segment
10-12/ 10-12/ Change Change % of sales % of sales
EUR million 2011 2010 % %*) 10-12/11 10-12/10
--------------------------------------------------------------------
Winter and Outdoor 375.0 416.5 -10 -4 67 72
Ball Sports 109.0 107.3 2 7 20 18
Fitness 72.9 59.6 22 30 13 10
--------------------------------------------------------------------
Total 556.9 583.4 -5 2 100 100
--------------------------------------------------------------------
*) Comparable sales in local currencies
Geographic breakdown of net sales
10-12/ 10-12/ Change Change % of sales % of sales
EUR million 2011 2010 % %*) 10-12/11 10-12/10
--------------------------------------------------------------
EMEA 273.8 325.8 -16 -9 49 56
Americas 205.4 184.1 12 19 37 31
Asia Pacific 77.7 73.5 6 6 14 13
--------------------------------------------------------------
Total 556.9 583.4 -5 2 100 100
--------------------------------------------------------------
*) Comparable sales in local currencies
Group EBIT was EUR 46.3 million (56.0, excluding non-recurring items). The
decline was mainly due to the shipment schedule in Winter Sports Equipment.
Gross margin improved by 1.6 percentage points to 42.4% (40.8) mainly as a
result of the operational efficiency program in Winter Sports Equipment.
EBIT excluding non-recurring items by business segment
10-12/ 10-12/ Change
EUR million 2011 2010 %
-------------------------------------------------------
Winter and Outdoor 45.0 61.2 -26
Ball Sports -0.7 -2.7
Fitness 4.5 4.3 5
Headquarters*) -2.5 -6.8
-------------------------------------------------------
EBIT excluding non-recurring items 46.3 56.0 -17
-------------------------------------------------------
Non-recurring items - -7.6
-------------------------------------------------------
EBIT total 46.3 48.4 -4
-------------------------------------------------------
*) Headquarters segment consists of Group administration, shared service
functions, other non-operational income and expenses and fair valuation of share
based compensations. In the fourth quarter, segment operating loss decreased by
EUR 4.3 million due to decreased net operational expenses of EUR 1.7 million and
a change in fair valuation of share based compensations and other adjustments of
EUR 2.6 million.
Net financial expenses were EUR 6.1 million (5.7) including net interest
expenses of EUR 5.9 million (5.6) and unrealized net foreign exchange gains
totaling EUR 0.0 million (3.4). Earnings before taxes totaled EUR 40.2 million
(42.7). Earnings per share were EUR 0.25 (0.30).
FINANCIAL RESULTS 2011
In 2011, there was good development in the sporting goods market and outdoor
softgoods in particular continued the strong growth. However, the impacts of the
uncertainty in the macro-economic conditions started to be visible in the
sporting goods market towards the year end. In December, the industry was also
adversely impacted by the slow start of the winter season 2011/2012 due to the
warm weather in key markets.
Amer Sports continued to execute its strategic improvement programs and to
sustain profitable growth guided by the company's long-term financial targets.
During the year, the company invested especially into category based operations,
sales and distribution including geographic expansion, customer service and own
retail.
NET SALES AND EBIT IN 2011
Amer Sports' net sales in 2011 were EUR 1,880.8 million (2010: 1,740.4). Net
sales increased by 9% in local currencies, particularly due to sales growth in
Footwear, up by 31%, Apparel, up by 22%, Fitness, up by 17%, Cycling, up by 14%
and Team Sports, up by 11%. In local currencies, EMEA increased by 8%, the
Americas by 12% 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 2011 2010 % %*) 2011 2010
----------------------------------------------------------------------
Winter and Outdoor 1,137.6 1,015.0 12 12 61 58
Ball Sports 511.0 520.6 -2 0 27 30
Fitness 232.2 204.8 13 17 12 12
----------------------------------------------------------------------
Total 1,880.8 1,740.4 8 9 100 100
----------------------------------------------------------------------
*) Comparable sales in local currencies
Geographic breakdown of net sales
Change Change % of sales % of sales
EUR million 2011 2010 % %*) 2011 2010
----------------------------------------------------------------
EMEA 917.6 845.7 9 8 49 48
Americas 742.1 687.9 8 12 39 40
Asia Pacific 221.1 206.8 7 4 12 12
----------------------------------------------------------------
Total 1,880.8 1,740.4 8 9 100 100
----------------------------------------------------------------
*) Comparable sales in local currencies
Gross margin was 43.5% (42.6). The improvement was mainly a result of the growth
in own retail in Apparel and operational efficiency improvements in Fitness and
Winter Sports Equipment.
Group EBIT was EUR 135.5 million (107.9, excluding non-recurring items).
Increased sales volumes contributed approximately EUR 67 million to EBIT growth,
higher gross margins approximately EUR 15 million and changes in foreign
exchange rates approximately EUR -5 million. Operating expenses increased by
approximately EUR 49 million, driven by volume growth related sales and
distribution costs, marketing and research and development.
EBIT margin improved by 1.0 percentage point and was 7.2% (6.2, excluding non-
recurring items). The Group's long-term target is to have EBIT of at least 10%
of net sales.
EBIT excluding non-recurring items by business segment
Change
EUR million 2011 2010 %
-----------------------------------------------------
Winter and Outdoor 118.5 96.9 22
Ball Sports 25.0 32.2 -22
Fitness 10.3 2.7
Headquarters*) -18.3 -23.9
-----------------------------------------------------
EBIT excluding non-recurring items 135.5 107.9 26
-----------------------------------------------------
Non-recurring items - -11.1
-----------------------------------------------------
EBIT total 135.5 96.8 40
-----------------------------------------------------
*) Headquarters segment consists of Group administration, shared service
functions, other non-operational income and expenses and fair valuation of share
based compensations. In 2011, segment operating loss decreased by EUR 5.6
million due to decreased net operational expenses of EUR 2.4 million and a
change in fair valuation of share-based compensations and other adjustments of
EUR 3.2 million.
Net financial expenses totaled EUR 20.5 million (21.3) which include net
interest expenses of EUR 19.9 million (17.9). Net foreign exchange gains were
EUR 0.7 million (losses of EUR 2.3 million). Earnings before taxes totaled
EUR 115.0 million (75.5) and taxes were EUR -24.1 million (-6.6) resulting a tax
rate of 21%. Earnings per share were EUR 0.71 (0.52).
OUTLOOKS GIVEN FOR 2011
In its financial statements for 2010, it was stated that Amer Sports expected
its 2011 net sales to increase from 2010 and EBIT to improve. A more detailed
view of the outlook was provided in the interim reports in April and August.
Increased visibility allowed a further revision of the guidance given and in the
January-September interim report, the company estimated its full-year net sales
in local currencies to grow by approximately 9% and EBIT margin excluding non-
recurring items to improve by approximately one percentage point from 2010.
CASH FLOW AND FINANCING
In 2011, net cash flow after investing activities (free cash flow) was EUR -21.4
million (50.1). Compared to the end of 2010, inventories increased by EUR 57.6
million due to the higher order book and inventories in softgoods and low in-
season deliveries in Winter Sports Equipment. Receivables increased by EUR 55.8
million. The increase was mainly in Winter Sports Equipment. Amer Sports' long-
term financial target is to have annual free cash flow equal to net profit.
At the end of 2011, the Group's net debt amounted to EUR 391.6 million (294.8).
The increase was due to negative net cash flow of EUR 21.4 million, share buy-
backs of EUR 36.7 million and dividends of EUR 36.4 million. Amer Sports' long-
term financial target for the balance sheet structure is the year-end Net Debt /
EBITDA ratio to be 3 or less. At the end of 2011, the ratio was 2.3 (2.2).
Interest-bearing liabilities amounted to EUR 470.4 million (379.5) consisting of
short-term debt of EUR 219.0 million and long-term debt of EUR 251.4 million.
The average interest rate on the Group's interest-bearing liabilities was 3.6%
(4.4).The EUR 60 million hybrid bond is accounted as equity.
Short-term debt consists mainly of repayments of long-term loans of EUR 23.4
million (97.0) and commercial papers of EUR 194.2 (0.0) which Amer Sports had
issued in the Finnish market to fund seasonally high working capital. The total
size of the commercial paper program is EUR 500 million.
Cash and cash equivalents totaled EUR 78.8 million (84.7).
In April, Amer Sports issued a SEK 500 million floating rate bond with a loan
period of five years targeted at Nordic institutional investors.
In November, Amer Sports signed a new syndicated revolving credit facility of
EUR 200 million refinancing the previous credit facility signed in 2005. Amer
Sports had not used the credit facility at the end of 2011.
The equity ratio at the end of the year was 45.6% (47.8%) and gearing was 47%
(37%).
The Group's most significant transaction risk arises from the US dollar. Amer
Sports is a net buyer of USD due to sourcing operations in Asia. The next 12
month EUR/USD net flow is expected to be USD 270 million. Weakening of the euro
against the US dollar has therefore a negative impact on the company's EBIT,
with a delay due to hedging.
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%. A longer hedging horizon together with higher
hedge ratio is applied in Winter and Outdoor. At the end of 2011, the Group had
hedged 80% of the 2012 EUR/USD net cash flow at an average EUR/USD rate of
1.38. This covers over 80% of spring/summer 2012 and half of the fall/winter
2012 USD purchases in Apparel and Footwear, where the EUR/USD exposure is the
highest.
Because Amer Sports' consolidated financial statements are presented in euros,
Amer Sports is 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,
GBP, CAD and JPY, with net flows varying from EUR 45 million to EUR 55 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 AND INVESTMENTS
The Group's capital expenditure totaled EUR 51.4 (39.9) million. The increase is
mainly due to investments into the operational efficiency program in Winter
Sports Equipment. Depreciation totaled EUR 35.8 million (35.8).
Cash flow from acquisition was EUR -6.5 million (0.0) and from divestments EUR
5.3 million (0.0).
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 seven R&D and design sites globally serving different business
areas as well as increasingly collaborating across units. A total of EUR 64.2
million was invested in research and development in 2011, accounting for 9.2% of
all operating expenses (2010: 57.4 million, 8.8% of operating expenses; 2009:
EUR 52.0 million, 9.0% of operating expenses). Winter and Outdoor's share of the
R&D expenditure was 66%, while Ball Sports accounted for 13% and Fitness for
21%.
On December 31, 2011, 583 (514) 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 ecommerce.
Amer Sports' strategic priorities include strengthening the consumer
understanding and consumer relevance (Win with Consumers) and strengthening the
Group's commercial fundamentals through sales and distribution (Win in Go to
Market).
In Winning with Consumers, Amer Sports established in 2011 regional consumer
marketing operations in Shanghai for Asia and in Portland for the Americas to
improve the brands' local consumer understanding and relevance.
In Winning in Go to Market, the focus was on expanding the distribution
footprint both in developed and new expansion markets as well as growth in own
retail and ecommerce. During the year, Amer Sports made several investments in
its sales and distribution organization: it developed specific distribution
tracking metrics, expanded its sales force to increase market coverage,
developed its trade and co-marketing programs with retailers and distributors to
drive broader coverage across the product portfolio and restructured its
processes to proactively identify areas of joint benefits from collaboration
across product portfolio. In the new expansion markets of Russia, China and
Latin America, the growth was significant and in 2011, these markets accounted
for 7% (5) of the Group's net sales.
At the end of 2011, Amer Sports had 172 (150) brand stores. The majority of the
stores are operated by local, independent partners. In 2011, Amer Sports
strengthened its ecommerce. Of the brands, Salomon, Suunto and Arc'teryx are
selling on-line in selected countries.
On December 31, 2011, the Amer Sports shared sales network covered 33 countries.
2,454 (2,205) persons were employed in sales and distribution activities,
representing approximately 35% (33) of the total number of people employed by
Amer Sports. 560 (510) persons were employed in marketing activities.
SUPPLY CHAIN MANAGEMENT
Reliable, efficient and timely supply chain management is an important element
in Amer Sports' strategy. In 2011 the main focus was to lead step change in
customer service excellence.
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. Approximately 10% of Amer Sports' production value is in the
Americas, 30% in EMEA and 60% in Asia, with China representing approximately
30% of the total.
Amer Sports manufactures approximately 20% of its products itself and
approximately 15% is produced by partially outsourced vendors. Of Amer Sports'
total production value, approximately 65% is outsourced. This includes
manufacturing in all racquet sports and golf products, 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' People Strategy is designed to support the company's strategy,
strategic business initiatives and focus areas. The People Strategy goals in
2011 were as follows:
* Build capabilities and nourish engagement
* Enhance strong performance culture and coaching leadership
* Leverage strong HR partnership
In 2011, Amer Sports developed its talent management model further to enhance
organizational capability building and talent rotation. A special program was
established to build capabilities in Amer Sports sales force.
Employee engagement survey, which measures employee engagement and job
satisfaction, showed an improvement of all survey items since the previous
survey conducted in 2009. On the basis of the survey, 80% of the respondents are
extremely satisfied with Amer Sports as a place to work. The response rate was
90%.
On December 31, 2011, the number of Group employees was 7,061 (December
31, 2010: 6,645, December 31, 2009: 6,331). The increase came mainly from
personnel working in sales and distribution. The average number of personnel in
2011 was 6,921 (2010: 6,545; 2009: 6,362). At the end of 2011, men represented
62% (2010: 62%; 2009: 62%) of Amer Sports employees and women 38% (2010:
38%; 2009: 38%).
Salaries, incentives and other related costs paid in 2011 totaled EUR 358.7
million (2010: 336.4; 2009: 301.5). The Amer Sports' reward system is based on
performance focusing on team and individual accountability. Basic pay is
supplemented by performance-based bonus schemes and long-term incentive
programs.
December 31, December 31, Change
2011 2010 %
------------------------------------------------------------------
Winter and Outdoor 4,590 4,293 7
Ball Sports 1,631 1,590 3
Fitness 749 691 8
Headquarters and shared services 91 71 28
------------------------------------------------------------------
Total 7,061 6,645 6
------------------------------------------------------------------
December 31, December 31, Change
2011 2010 %
----------------------------------------------
EMEA 4,185 3,903 7
Americas 2,312 2,214 4
Asia Pacific 564 528 7
----------------------------------------------
Total 7,061 6,645 6
----------------------------------------------
December 31, December 31, Change
2011 2010 %
------------------------------------------------------------------
Manufacturing and sourcing 2,588 2,579 0
Sales and distribution 2,454 2,205 11
Support functions/shared services 876 837 5
R&D 583 514 13
Marketing 560 510 10
------------------------------------------------------------------
Total 7,061 6,645 6
------------------------------------------------------------------
SOCIAL RESPONSIBILITY
Amer Sports is committed to implementing 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, social responsibility and environment. The audit
process includes factory visits and training sessions with factory management to
assist them in meeting the company standards. All new suppliers are audited
before an order can be placed.
In 2011, the company participated for the first time in Carbon Disclosure
Project (CDP) and positioned globally in the mid-range level.
BUSINESS SEGMENT REVIEWS
WINTER AND OUTDOOR
10-12/ 10-12/ Change Change Change Change
EUR million 2011 2010 % %*) 2011 2010 % %*)
--------------------------------------------------------------------------------
Net sales
Winter Sports
Equipment 205.0 252.8 -19 -14 448.4 438.4 2 2
Footwear 51.0 47.3 8 18 287.7 219.6 31 31
Apparel 65.8 63.0 4 12 191.6 156.6 22 22
Cycling 29.5 26.8 10 17 120.5 106.4 13 14
Sports Instruments 23.7 26.6 -11 -7 89.4 94.0 -5 -4
Net sales, total 375.0 416.5 -10 -4 1,137.6 1,015.0 12 12
EBIT excluding non-
recurring items 45.0 61.2 -26 118.5 96.9 22
EBIT % excluding non-
recurring items 10.4 9.5
Non-recurring items - -10.0 - -10.0
EBIT total 45.0 51.2 -12 118.5 86.9 36
Personnel, Dec 31 4,590 4,293 7
*) Comparable sales in local currencies
In 2011, Winter and Outdoor's net sales were EUR 1,137.6 million (1,015.0), an
increase of 12% in local currencies. Net sales growth was driven by Footwear,
with an increase of 31%, supported by Apparel, up by 22%, and Cycling, up by
14%. EMEA, the largest geographical area of Winter and Outdoor, increased by
9%, the Americas by 23% and Asia Pacific by 10%.
In October-December, Winter and Outdoor's net sales totaled EUR 375.0 million
(416.5), a decrease of 4% in local currencies. Good growth continued in
Footwear, up by 18%, Cycling, up by 17%, and Apparel, up by 12%. Sales in Winter
Sports Equipment declined by 14% in local currencies due to the shipment
schedule as more deliveries took place already in the third quarter. Also, the
slow start of the winter season in key markets adversely impacted in-season
orders.
10-12/ 10-12/ Change Change Change Change
EUR million 2011 2010 % %*) 2011 2010 % %*)
----------------------------------------------------------------------
EMEA 241.9 294.5 -18 -11 751.3 687.2 9 9
Americas 77.9 70.2 11 20 253.4 211.3 20 23
Asia Pacific 55.2 51.8 7 7 132.9 116.5 14 10
----------------------------------------------------------------------
Total 375.0 416.5 -10 -4 1,137.6 1,015.0 12 12
----------------------------------------------------------------------
*) Comparable sales in local currencies
In 2011, EBIT was EUR 118.5 million (96.9, excluding non-recurring items).
Increased sales volumes contributed approximately EUR 53 million to the EBIT
growth while higher gross margins contributed approximately EUR 18 million.
Operating expenses increased by approximately EUR 48 million due to sales and
distribution costs (all in local currencies).
In October-December, EBIT was EUR 45.0 million (61.2, excluding non-recurring
items). Lower sales volumes were partly offset by higher gross margins.
Winter Sports Equipment
In 2011, Winter Sports Equipment's net sales totaled EUR 448.4 million (438.3)
and were up by 2% in local currencies. The biggest product categories were
alpine ski equipment, representing 75% of net sales, cross country 16%, and
snowboards 9%. Net sales of alpine ski equipment increased in local currencies
by 2% and cross country ski equipment by 6% and snowboards decreased by 5%. In
2011, 67% of the Winter Sports Equipment business area's net sales were derived
from EMEA, 20% from the Americas, and 13% from Asia Pacific. Net sales increased
in the Americas by 23% and in Asia Pacific by 3%, and decreased in EMEA by 4%.
At the end of the year, in-season order intake was adversely impacted by the
warm early season weather in key markets.
The operational efficiency program which started in 2010 continued to deliver
increased margins and improved customer service throughout 2011. The main focus
areas during the year were to increase flexibility by match supply to demand as
well to increase standardization by reducing the number of stock-keeping units.
In October-December, Winter Sports Equipment's net sales were EUR 205.0 million
(252.8) with a decline of 14% in local currencies. The decrease was mainly due
to the shipment schedule as more deliveries took place already in the third
quarter. In-season order intake was adversely impacted by the warm early season
weather in key markets.
Footwear
In 2011, Footwear's net sales were EUR 287.7 million (219.6) and were up by 31%
in local currencies. The growth came from all product segments. EMEA represented
80% of global sales, followed by the Americas with 16%, and Asia Pacific with
4%. Net sales increased in EMEA by 26%, in the Americas by 56% and in Asia
Pacific by 4%.
In October-December, Footwear's net sales totaled EUR 51.0 million (47.3) and
were up by 18% in local currencies. Pre-orders for spring/summer 2012 are up by
14%.
Apparel
In 2011, Apparel's net sales totaled EUR 191.6 million (156.6) and were up by
22% in local currencies. EMEA was 49% of global sales, Americas 38%, and Asia
Pacific 13%. Net sales increased in EMEA by 15%, in the Americas by 26% and in
Asia Pacific by 47%.
In October-December, Apparel's net sales totaled EUR 65.8 million (63.0) and
were up by 12% in local currencies. Pre-orders for spring/summer 2012 are up by
28%.
Cycling
In 2011, Cycling's net sales were EUR 120.5 million (106.4) and were up by 14%
in local currencies. Rims, wheels and pedals represented 83% of net sales, and
cycling apparel and footwear 17%. Net sales of rims, wheels and pedals increased
in local currencies by 11% and cycling apparel and footwear by 24%. Cycling's
net sales by geographical region was as follows: EMEA 64%, Asia Pacific 19%, and
the Americas 17%. Net sales increased in EMEA by 18% and in the Americas by 26%
and decreased in Asia Pacific by 9%.
In October-December, Cycling's net sales totaled EUR 29.5 million (26.8) and
were up by 17% in local currencies.
Sports Instruments
In 2011, Sports Instruments' net sales totaled EUR 89.4 million (94.0) and
declined by 4% in local currencies. Underlying sales excluding the divested
businesses increased by 6%. The biggest product categories were outdoor
products, representing 47% of net sales, diving instruments 22% and training
20%. Outdoor products sales grew by 13% and diving instruments by 5%. The
distribution of net sales by geographical region was as follows: EMEA 45%, Asia
Pacific 31% and the Americas 24%. Net sales increased in Asia Pacific by 6%,
were at previous year's level in EMEA% and decreased in the Americas by 16%.
In line with Suunto's new focused strategy, Amer Sports sold the diving suit
company Fitz-Wright Holdings Ltd. to Huish Acquisition LLC in April 2011. In
June 2011, Amer Sports sold TackTick Ltd to Raymarine, a subsidiary of the Flir
Group. TackTick offers wireless solar powered instruments for the marine market.
The divestments had no material impact on Amer Sports' financial results.
In October-December, Sports Instruments' net sales were EUR 23.7 million (26.6)
and declined by 7% in local currencies. Underlying sales excluding the divested
businesses were at previous year's level.
BALL SPORTS
10-12/ 10-12/ Change Change Change Change
EUR million 2011 2010 % %*) 2011 2010 % %*)
--------------------------------------------------------------------------------
Net sales
Racquet Sports 41.1 44.0 -7 -1 213.8 232.5 -8 -7
Team Sports 57.1 51.0 12 16 228.0 212.1 7 11
Golf 10.8 12.3 -12 -6 69.2 76.0 -9 -7
Net sales, total 109.0 107.3 2 7 511.0 520.6 -2 0
EBIT excluding non-
recurring items -0.7 -2.7 25.0 32.2 -22
EBIT % excluding non-
recurring items 4.9 6.2
Non-recurring items - -2.7 - -2.7
EBIT total -0.7 -5.4 25.0 29.5 -15
Personnel, Dec 31 1,631 1,590 3
*) Comparable sales in local currencies
In 2011, Ball Sports' net sales were EUR 511.0 million (520.6) and were at
previous year's level in local currencies. Racquet Sports sales were down by 7%
as the global tennis market declined and Japan was hit by the earthquake and
tsunami in March. Team Sports continued its good performance and net sales in
local currencies increased by 11%.
Geographically, Ball Sports' sales increased in the Americas by 3% in local
currencies, were stable in EMEA and declined by 9% in Asia Pacific.
In October-December, Ball Sports' net sales totaled EUR 109.0 million (107.3).
In local currencies, sales increased by 7% due to the strong growth in Team
Sports.
10-12/ 10-12/ Change Change Change Change
EUR million 2011 2010 % %*) 2011 2010 % %*)
------------------------------------------------------------------
EMEA 17.2 18.5 -7 2 113.4 114.0 -1 -1
Americas 75.1 72.3 4 9 331.0 334.4 -1 3
Asia Pacific 16.7 16.5 1 1 66.6 72.2 -8 -9
------------------------------------------------------------------
Total 109.0 107.3 2 7 511.0 520.6 -2 0
------------------------------------------------------------------
*) Comparable sales in local currencies
In 2011, EBIT was EUR 25.0 million (32.2, excluding non-recurring items) and
declined by EUR 7 million due to lower gross margins.
In October-December, EBIT was EUR -0.7 million (-2.7, excluding non-recurring
items). The impact of increased sales volumes was partly offset by lower
margins.
Racquet Sports
Racquet Sports' net sales in 2011 totaled EUR 213.8 million (232.5) and declined
by 7% in local currencies. The Americas accounted for 41% of the net sales, EMEA
37% and Asia Pacific 22%. In local currencies, EMEA remained at previous year's
level, Asia Pacific declined by 13% and the Americas declined by 7%. The decline
in the Americas was driven by the United States, where the tennis racket market
is estimated to have declined by 10% (source: Tennis Industry Association, TIA).
The decline in Asia Pacific was driven by the aftermath of the earthquake and
tsunami in Japan.
The biggest product categories were tennis rackets, representing 37% of net
sales, and tennis balls 24%. Net sales of tennis rackets declined by 18% and
sales of tennis balls grew by 5%. Tennis apparel achieved accelerated growth, an
increase of 33% in local currencies.
In October-December, Racquet Sports' net sales were EUR 41.1 million (44.0) and
were at previous year's level in local currencies. Changing the distribution
model in China from a distributor to an in-house model had a temporary negative
impact on sales.
Team Sports
Team Sports' net sales in 2011 were EUR 228.0 million (212.1) and were up by
11% in local currencies driven mainly by baseball. The breakdown of Team Sports
sales by region was as follows: the Americas 93%, EMEA 2% and Asia Pacific 5%.
In local currencies, the Americas grew by 11%, EMEA by 20% and Asia Pacific by
6%.
The biggest product categories were American footballs, representing 22% of net
sales, baseball and softball bats with 19%, basketballs with 19%, and baseballs
and gloves with 17%.
In October-December, Team Sports' net sales totaled EUR 57.1 million (51.0) and
were up by 16% in local currencies. The fourth quarter growth was broad-based
across the product categories.
Golf
Golf's net sales in 2011 were EUR 69.2 million (76.0) and declined by 7% in
local currencies.
In October-December, net sales totaled EUR 10.8 million (12.3) and declined by
6% in local currencies.
FITNESS
10-12/ 10-12/ Change Change Change Change
EUR million 2011 2010 % %*) 2011 2010 % %*)
--------------------------------------------------------------------------------
Net sales 72.9 59.6 22 30 232.2 204.8 13 17
EBIT excluding non-
recurring items 4.5 4.3 10.3 2.7
EBIT % excluding non-
recurring items 4.4 1.3
Non-recurring items - -2.3 - -2.3
EBIT total 4.5 2.0 10.3 0.4
Personnel, Dec 31 749 691 8
*) Comparable sales in local currencies
In 2011, Fitness' net sales were EUR 232.2 million (204.8) and increased by 17%
in local currencies. Geographically, the Americas accounted for 68% of the net
sales, EMEA 23% and Asia Pacific 9%. In local currencies, the Americas increased
by 16%, EMEA by 19% and Asia Pacific by 19%.
The commercial business (clubs and institutions) represented 87% (89%) of
Fitness' net sales while consumer (home use) was 13% (11%). Commercial business
was up by 15% in local currencies due to new products and strengthened
distribution. Consumer business was up by 34% as a result of improved
distribution in retail and online channels.
In 2011, Fitness' EBIT was EUR 10.3 million (2.7, excluding non-recurring
items). Increased sales volumes contributed approximately EUR 12 million to the
EBIT growth while higher gross margins contributed approximately EUR 5 million.
Operating expenses increased by approximately EUR 10 million mainly due to
increased sales and distribution costs (all in local currencies).
In October-December, Fitness' net sales totaled EUR 72.9 million (59.6) and were
30% up in local currencies. The Americas increased by 35%, EMEA by 20% and Asia
Pacific by 16% (in local currencies).
In October-December, EBIT was EUR 4.5 million (4.3, excluding non-recurring
items). The impact of increased sales volumes was offset mainly by spend on
strengthening the distribution.
10-12/ 10-12/ Change Change Change Change
EUR million 2011 2010 % %*) 2011 2010 % %*)
------------------------------------------------------------------
EMEA 14.7 12.8 15 20 52.9 44.5 19 19
Americas 52.4 41.6 26 35 157.7 142.2 11 16
Asia Pacific 5.8 5.2 12 16 21.6 18.1 19 19
------------------------------------------------------------------
Total 72.9 59.6 22 30 232.2 204.8 13 17
------------------------------------------------------------------
*) Comparable sales in local currencies
CHANGES IN GROUP STRUCTURE
Amer Sports sold the diving suit company Fitz-Wright Holdings Ltd. to Huish
Acquisition LLC in April 2011. In June 2011, Amer Sports sold TackTick Ltd to
Raymarine. TackTick offers wireless solar powered instruments for the marine
market. The annual net sales of these businesses were approximately EUR 12
million.
Amer Sports acquired Nikita ehf, a snowboarding-inspired Action Sports apparel
brand which focuses on female consumers, in December 2011. The annual net sales
of Nikita are approximately EUR 8 million.
The transactions had no material impact on Amer Sports' 2011 financial results
or balance sheet.
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 verified 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 January 1, 2011, Jussi Siitonen, Senior Vice President, Finance, was
appointed to the position of Chief Financial Officer (CFO) and also became a
member of the Amer Sports Executive Board.
Victor Duran, Senior Vice President, Marketing and Business to Consumer, became
a member of the Amer Sports Executive Board on January 1, 2011.
Additional details concerning members of the Amer Sports' Executive Board can be
found 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, 2011 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 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 was 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.
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.
Amer Sports Board of Directors decided on August 15, 2011 to utilize the
authorization given by the Annual General Meeting held on March 10, 2011 to
repurchase Amer Sports shares. The repurchases were completed on November
24, 2011. The company repurchased a total of 3,000,000 own shares at an average
price of EUR 9.18.
In 2011, Amer Sports acquired a total of 4 million own shares as follows:
Purchase price Purchase price
Total value, (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
Aug. 23-Nov. 24, 2011 3,000,000 27,529,811.75 9.18 10.00 and 8.14
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 held 4,012,125 (342,963) of its own shares at the end of 2011. Amer
Sports Corporation owns 4,000,000 shares and Amer Sports International Oy
12,125 shares. The number of own shares corresponds to 3.30% (0.28) of all Amer
Sports shares.
Trading in shares
In 2011, a total of 76.9 million (55.2) Amer Sports shares with a value totaling
EUR 752.5 million (475.0) were traded on the NASDAQ OMX Helsinki Ltd. Share
turnover was 64.2% (45.5%) (expressed as a proportion of the average number of
shares, excluding own shares). The average daily volume in 2011 was 303,975
shares (218,941).
The closing price of the Amer Sports Corporation share on the NASDAQ OMX
Helsinki Ltd stock exchange on December 31, 2011 was EUR 9.00 (2010: 10.43). The
share price declined 14% during the year while OMX Helsinki Cap index declined
by 28%. Shares registered a high of EUR 11.97 (10.70) and a low of EUR 7.52
(6.82). The average share price was EUR 9.78 (8.61). On December 31, 2011, the
company had a market capitalization of EUR 1,057.5 million (1,263.8), excluding
own shares.
In addition to NASDAQ OMX Helsinki, Amer Sports shares were traded on several
alternative market places, for example at Chi-X, BATS and Turquoise. In 2011, a
total of 17.4 million Amer Sports shares were traded on alternative market
places, or approximately 18% of the total amount of traded shares.
At the end of December, Amer Sports Corporation had 15,351 registered
shareholders (15,400). Ownership outside of Finland and nominee registrations
represented 48.7% (51.3) of the company's shares. Public sector entities owned
14.3% (13.2), households 12.1% (12.4), financial and insurance corporations
11.5% (13.1), non-profit institutions 7.6% (7.5), private companies 2.5% (2.2),
and Amer Sports 3.30% (0.28).
Major shareholders, December 31, 2011 (does not include nominee registrations
nor shares held by the company)
% of shares and
Shares votes
------------------------------------------------------------------------
1. Varma Mutual Pension Insurance Company 7,030,680 5.79
2. Maa- ja Vesitekniikan Tuki ry. 5,000,000 4.11
3. Ilmarinen Mutual Pension Insurance Company 4,333,460 3.57
4. Tapiola Mutual Pension Insurance Company 2,863,091 2.36
5. Brotherus Ilkka 2,685,573 2.21
6. Mandatum Life Insurance Company Limited 2,361,721 1.94
7. Odin Norden 1,830,442 1.51
8. OP-Delta Fund 1,495,000 1.23
9. The State Pension Fund 1,372,000 1.13
10. Nordea Fennia Fund 960,000 0.79
Notification of change in shareholding under the Finnish Securities Market Act
On February 2, 2011, Amer Sports Corporation received information to the effect
that the Governance for Owners LLP's share capital and voting rights of Amer
Sports had fallen below 5% on February 1, 2011.
On October 27, 2011, Amer Sports Corporation received information to the effect
that the owners of institutional investors and funds, who have given full
discretion over their investments to Silchester International Investors LLP, had
fallen below 10% on October 25, 2011. At the time of the notification,
Silchester International Investors LLP owned 12,109,051 shares, representing
9.96% of Amer Sports Corporation's share capital and voting rights.
On November 30, 2011, Amer Sports Corporation received information to the effect
that Varma Mutual Pension Insurance Company's share capital and voting rights of
Amer Sports had exceeded 5% on November 29, 2011. At the time of the
notification, Varma Mutual Pension Insurance Company owned 6,305,214 shares,
representing 5.19% 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, 2011
Circle of acquaintances
Shareholder Shares and controlled corporations
--------------------------------------------------------------------------------
Board of Directors
--------------------------------------------------------------------------------
Anssi Vanjoki 30,590 0
Ilkka Brotherus 2,685,573 20,850
Martin Burkhalter 8,677 0
Christian Fischer 8,677 0
Hannu Ryöppönen 6,961 0
Bruno Sälzer 8,677 0
Pirjo Väliaho 10,888 0
--------------------------------------------------------------------------------
Executive Board
--------------------------------------------------------------------------------
Heikki Takala 66,760 0
Paul Byrne 16,663 0
Chris Considine 23,992 0
Mike Dowse 12,244 0
Victor Duran 11,577 0
Matt Gold 10,262 0
Terhi Heikkinen 14,631 0
Antti Jääskeläinen 14,703 0
Bernard Millaud 20,610 0
Mikko Moilanen 13,596 0
Jean-Marc Pambet 24,007 0
Michael Schineis 26,486 0
Jussi Siitonen 12,136 300
Andy Towne 960 0
Vincent Wauters 41,264 0
Michael White 8,168 0
--------------------------------------------------------------------------------
TOTAL 3,078,102 21,150
--------------------------------------------------------------------------------
% of shares 2.5 0.02
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Including circle of acquaintances and
controlled corporations 3,099,252
--------------------------------------------------------------------------------
% of shares 2.6
--------------------------------------------------------------------------------
During the year, the Group had two cash-based long-term incentive plans and
three share-based incentive plans for Group key personnel. The incentive plans
are described in the notes to the financial statements.
RESOLUTIONS OF THE GENERAL MEETINGS OF SHAREHOLDERS
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 consumer demand development in North America,
Europe and Japan, with labor and raw material price inflation, especially in
China, and with Amer Sports' ability to manufacture, source and deliver products
on a timely basis.
For example, the following risks could 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 a number of companies in most of the product
categories. There cannot be any assurances 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 1/4 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.
* Labor 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 labor and raw material
costs can have a negative impact on product costs.
* Amer Sports' most important production facilities are the Winter Sports
Equipment's factories in Austria and Bulgaria, Precor's factory in the
United States, and the Suunto's 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.
* Growing the number of Amer Sports' own retail stores requires 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.
* Losing a significant client would affect Amer Sports' sales. However, this
risk is limited because Amer Sports' client base is diversified.
* 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 the countries in which 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 proportion 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
programs 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".
OUTLOOK FOR 2012
In 2012, Amer Sports will continue to invest into executing its long-term
strategy and sustaining profitable growth.
Amer Sports expects broad-based improvement across business areas in 2012. In
Winter Sports Equipment, the slow start of the 2011/12 season due to the warm
weather in key markets is expected to have an adverse impact on the 2012 pre-
orders. Apparel and Footwear pre-orders for spring/summer are up by 28% and
14%, respectively. Overall, Amer Sports' 2012 net sales in local currencies are
expected to increase from 2011.
BOARD OF DIRECTORS' PROPOSAL FOR DISTRIBUTION OF EARNINGS
The parent company's distributable earnings amount to EUR 302,804,109.00 of
which the net result for the period is EUR -23,571,703.99.
The Board of Directors proposes to the Annual General Meeting that the
distributable earnings be used as follows:
- A dividend of EUR 0.33 per share, totaling EUR 40,100,704.05 to be paid to
shareholders
- EUR 262,703,404.95 to be carried forward in distributable earnings
Totaling EUR 302,804,109.00
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
2011 2010 % 2011 2010 %
-----------------------------------------------------------------------------
NET SALES 556.9 583.4 -5 1,880.8 1,740.4 8
Cost of goods sold -321.0 -345.6 -1,063.4 -998.4
-----------------------------------------------------------------------------
GROSS PROFIT 235.9 237.8 -1 817.4 742.0 10
License income 2.3 2.7 8.7 9.5
Other operating income 2.6 9.8 5.4 12.4
R&D expenses -20.6 -16.7 -64.2 -57.4
Selling and marketing expenses -138.3 -131.5 -475.9 -443.1
Administrative and other
expenses -35.6 -53.7 -155.9 -166.6
-----------------------------------------------------------------------------
EARNINGS BEFORE
INTEREST AND TAXES 46.3 48.4 -4 135.5 96.8 40
% of net sales 8.3 8.3 7.2 5.6
Financing income and expenses -6.1 -5.7 -20.5 -21.3
-----------------------------------------------------------------------------
EARNINGS BEFORE TAXES 40.2 42.7 -6 115.0 75.5 52
Taxes -9.1 -4.6 -24.1 -6.6
-----------------------------------------------------------------------------
NET RESULT 31.1 38.1 -8 90.9 68.9 32
-----------------------------------------------------------------------------
Attributable to:
Equity holders of the parent
company 31.1 38.1 90.8 68.8
Non-controlling interests 0.0 0.0 0.1 0.1
Earnings per share, EUR 0.25 0.30 0.71 0.52
Earnings per share, diluted, EUR 0.25 0.30 0.71 0.52
Adjusted average number of
shares in issue less own shares,
million 119.9 121.2
Adjusted average number of
shares in issue less own shares,
diluted, million 120.1 121.2
Equity per share, EUR 7.03 6.50
ROCE, % *) 13.2 10.0
ROE, % 11.2 9.0
Average rates used:
EUR 1.00 = USD 1.3500 1.3637 1.3926 1.3289
*) 12 months' rolling average
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
10-12/ 10-12/ 1-12/ 1-12/
2011 2010 2011 2010
-------------------------------------------------------
Net result 31.1 38.1 90.9 68.9
Other comprehensive income
Translation differences 12.5 10.5 7.7 28.7
Cash flow hedges 6.7 4.4 17.3 -0.2
Income tax related to
cash flow hedges -1.7 -1.2 -4,5 0.0
-------------------------------------------------------
Other comprehensive income,
net of tax 17.5 13.7 20.5 28.5
-------------------------------------------------------
Total comprehensive income 48.6 51.8 111.4 97.4
-------------------------------------------------------
Total comprehensive income
attributable to:
Equity holders of the parent
company 48.6 51.8 111.3 97.3
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
2011 2010 % 2011 2010 %
--------------------------------------------------------------
Winter and Outdoor 375.0 416.5 -10 1,137.6 1,015.0 12
Ball Sports 109.0 107.3 2 511.0 520.6 -2
Fitness 72.9 59.6 22 232.2 204.8 13
--------------------------------------------------------------
Total 556.9 583.4 -5 1,880.8 1,740.4 8
--------------------------------------------------------------
EBIT BY BUSINESS SEGMENT
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2011 2010 % 2011 2010 %
----------------------------------------------------------
Winter and Outdoor 45.0 51.2 -12 118.5 86.9 36
Ball Sports -0.7 -5.4 25.0 29.5 -15
Fitness 4.5 2.0 10.3 0.4
Headquarters -2.5 0.6 -18.3 -20.0
----------------------------------------------------------
Total 46.3 48.4 -4 135.5 96.8 40
----------------------------------------------------------
GEOGRAPHIC BREAKDOWN OF NET SALES
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2011 2010 % 2011 2010 %
--------------------------------------------------------
EMEA 273.8 325.8 -16 917.6 845.7 9
Americas 205.4 184.1 12 742.1 687.9 8
Asia Pacific 77.7 73.5 6 221.1 206.8 7
--------------------------------------------------------
Total 556.9 583.4 -5 1,880.8 1,740.4 8
--------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
10-12/ 10-12/ 1-12/ 1-12/
Note 2011 2010 2011 2010
-----------------------------------------------------------------------
Earnings before interest and taxes 46.3 48.4 135.5 96.8
Adjustments to cash flow from
operating activities and depreciation 11.0 1.6 37.9 28.3
Change in working capital 34.5 40.6 -97.6 -18.8
-----------------------------------------------------------------------
Cash flow from operating activities
before financing items and taxes 91.8 90.6 75.8 106.3
Interest paid and received -7.2 -5.1 -20.5 -14.3
Income taxes paid and received -6.7 -14.6 -24.7 -11.9
-----------------------------------------------------------------------
Net cash flow from operating activities 77.9 70.9 30.6 80.1
Acquired operations -6.5 - -6.5 -
Sold operations - - 5.3 -
Capital expenditure on non-current
tangible and intangible assets -22.5 -21.2 -51.4 -39.9
Proceeds from sale of tangible non-
current assets 0.1 8.0 0.6 9.9
-----------------------------------------------------------------------
Net cash flow from investing activities -28.9 -13.2 -52.0 -30.0
Net cash flow after investing activities
(free cash flow) 49.0 57.7 -21.4 50.1
Repurchase of own shares -9.5 - -36.7 -
Interest on hybrid bond - - -7.2 -7.2
Dividends paid 4 - - -36.4 -19.5
Change in debt and other financing
Items -37.4 -24.2 94.9 -64.3
-----------------------------------------------------------------------
Net cash flow from financing activities -46.9 -24.2 14.6 -91.0
Cash and cash equivalents on
October 1/January 1 75.6 50.2 84.7 121.6
Translation differences 1.1 1.0 0.9 4.0
Change in cash and cash equivalents 2.1 33.5 -6.8 -40.9
-----------------------------------------------------------------------
Cash and cash equivalents on
December 31 78.8 84.7 78.8 84.7
CONSOLIDATED BALANCE SHEET
December 31, December 31,
Note 2011 2010
------------------------------------------------------------------
Assets
------------------------------------------------------------------
Goodwill 295.7 286.7
Other intangible non-current assets 214.5 214.2
Tangible non-current assets 157.8 140.2
Other non-current assets 99.6 100.5
Inventories and work in progress 359.7 302.1
Receivables 611.9 525.4
Cash and cash equivalents 78.8 84.7
------------------------------------------------------------------
Total assets 2 1,818.0 1,653.8
------------------------------------------------------------------
------------------------------------------------------------
Shareholders' equity and liabilities
------------------------------------------------------------
Shareholders' equity 829.4 790.2
Long-term interest-bearing liabilities 251.4 278.7
Other long-term liabilities 22.7 19.6
Current interest-bearing liabilities 219.0 100.8
Other current liabilities 463.1 434.6
Provisions 32.4 29.9
------------------------------------------------------------
Total shareholders' equity and liabilities 1,818.0 1,653.8
------------------------------------------------------------
Equity ratio, % 45.6 47.8
Gearing, % 47 37
EUR 1.00 = USD 1.2939 1.3362
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 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 4 -19.4 -19.4
Interest on
hybrid
bond -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
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 7.7 7.7
Cash flow
hedges 17.3 17.3
Income tax
related to
cash flow
hedges -4.5 -4.5
Net result 90.8 90.8
Total
comp-
rehensive
income 7.7 12.8 90.8 111.3
Transact-
ions with
owners:
Repurch-
ase of
own
shares -31.3 -31.3
Share-
based
incentive
programs 0.8 0.8
Dividend
distribution 4 -36.3 -36.3
Interest on
hybrid
bond -5.3 -5.3
-----------------------------------------------------------------------------
Balance at
Dec. 31,
2011 292.2 12.1 -36.9 -26.6 7.2 151.5 60.0 367.3 826.8
Total
share-
Non-controlling holders'
Note interests equity
------------------------------------------
Balance at
Jan. 1,
2010 2.6 735.3
Other
compre-
hensive
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
comp-
rehensive
income 0.1 97.4
Transact-
ions with
owners:
Share-
based
incentive
program 0.5
Dividend
distribution 4 -0.1 -19.5
Interest on
hybrid
bond -5.3
Other
change -18.2
------------------------------------------
Balance at
Dec. 31,
2010 2.6 790.2
Balance at
Jan. 1,
2011 2.6 790.2
Other
compre-
hensive
income:
Translation
differences 7.7
Cash flow
hedges 17.3
Income tax
related to
cash flow
hedges -4.5
Net result 0.1 90.9
Total
comp-
rehensive
income 0.1 111.4
Transact-
ions with
owners:
Repurch-
ase of
own
shares -31.3
Share-
based
incentive
programs 0.8
Dividend
distribution 4 -0.1 -36.4
Interest on
hybrid
bond -5.3
------------------------------------------
Balance at
Dec. 31,
2011 2,6 829,4
QUARTERLY BREAKDOWN OF NET SALES AND EBIT
Q4/ Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/
NET SALES 2011 2011 2011 2011 2010 2010 2010 2010
------------------------------------------------------------------
Winter and Outdoor 375.0 395.7 133.4 233.5 416.5 300.3 116.5 181.7
Ball Sports 109.0 106.7 136.3 159.0 107.3 114.0 153.9 145.4
Fitness 72.9 56.8 45.9 56.6 59.6 52.6 47.1 45.5
------------------------------------------------------------------
Total 556.9 559.2 315.6 449.1 583.4 466.9 317.5 372.6
------------------------------------------------------------------
Q4/ Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/
EBIT 2011 2011 2011 2011 2010 2010 2010 2010
------------------------------------------------------------------
Winter and Outdoor 45.0 79.3 -15.1 9.3 51.2 58.2 -24.2 1.7
Ball Sports -0.7 -1.1 9.1 17.7 -5.4 3.5 17.0 14.4
Fitness 4.5 2.8 -0.3 3.3 2.0 2.8 -3.7 -0.7
Headquarters -2.5 -6.6 -4.6 -4.6 0.6 -8.7 -6.0 -5.9
------------------------------------------------------------------
Total 46.3 74.4 -10.9 25.7 48.4 55.8 -16.9 9.5
------------------------------------------------------------------
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 3 (amendment), IFRS 7 (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
---------------------------------------------------------------------
1-12/2011
Winter and Outdoor 1,137.6 118.5 960.0
Ball Sports 511.0 25.0 384.4
Fitness 232.2 10.3 253.8
---------------------------------------------------------------------
Segments, total 1,880.8 153.8 1,598.2
---------------------------------------------------------------------
Unallocated items*) -18.3 -20.5 219.8
---------------------------------------------------------------------
Group total 1,880.8 135.5 -20.5 115.0 1,818.0
---------------------------------------------------------------------
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
1-12/ 1-12/
2011 2010
----------------------------
EMEA 917.6 845.7
Americas 742.1 687.9
Asia Pacific 221.1 206.8
----------------------------
Total 1,880.8 1,740.4
----------------------------
3. DERIVATIVE FINANCIAL INSTRUMENTS
December December
31, 2011 31, 2010
----------------------------------------------
Nominal value
Foreign exchange derivatives 922.6 678.1
Interest rate swaps 50.0 169.8
Cross currency swaps 56.1 -
Fair value
Foreign exchange derivatives 2.0 -9.1
Interest rate swaps -3.1 -2.8
Cross currency swaps 0.5 -
4. DIVIDENDS
Dividends distributed in March 2011 by Amer Sports to its shareholders and
minority shareholders of its subsidiaries amounted to EUR 36.4 million 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
December December
31, 2011 31, 2010
---------------------------------------------------------------
Guarantees 21.4 14.1
Liabilities for leasing and rental agreements 123.2 123.2
Other liabilities 33.8 18.7
There are no guarantees or contingencies given for the management of the
company, the shareholders or the associated companies.
6. ONGOING LITIGATIONS
The Group has extensive international operations and is involved in a number of
legal proceedings, including product liability suits. The Group does not expect
the outcome of any legal proceedings currently pending to have materially
adverse effect upon its consolidated results or financial position.
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.
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#1581341]
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