2012-08-02 12:00:00 CEST
2012-08-02 12:01:24 CEST
REGULATED INFORMATION
Amer Sports - Interim report (Q1 and Q3)
Amer Sports Corporation Interim Report January-June 2012
Amer Sports Corporation
INTERIM REPORT
August 2, 2012 at 1:00 pm
APRIL-JUNE 2012
* Net sales totaled EUR 353.8 million (April-June 2011: EUR 315.6 million). In
local currencies, net sales increased by 5% driven by double-digit growth in
Apparel, Fitness and Sports Instruments and high growth rates in China,
Russia and own retail.
* Gross margin improved to 43.1% (42.3%).
* EBIT was EUR -19.8 million (-10.9). Investments into the expansion of
softgoods, sales coverage, emerging markets and own retail burdened the
seasonally low quarter.
* Earnings per share were EUR -0.19 (-0.12).
* Net cash flow after investing activities improved EUR 22.9 million and was
EUR -44.2 million (-67.1).
* Amer Sports' net sales outlook for 2012 is unchanged. In 2012, Amer Sports'
net sales in local currencies are expected to increase from 2011 in line
with the company's annual 5% growth target. Amer Sports 2012 EBIT excluding
non-recurring items is expected to be approximately at the level of 2011
despite the uncertainty in the winter sports market and the ongoing
investments into the future growth.
JANUARY-JUNE 2012
* Net sales were EUR 843.6 million (January-June 2011: EUR 764.7 million). In
local currencies, net sales increased by 6%.
* Gross margin rose to 43.7% (42.9%).
* EBIT was EUR 9.2 million (14.8).
* Earnings per share were EUR -0.04 (0.01).
* Net cash flow after investing activities was EUR 53.2 million (20.0).
* Gearing was 63% (December 31, 2011: 47%). The increase was due to the
redemption of the hybrid bond in March.
OUTLOOK FOR 2012
In 2012, Amer Sports' net sales in local currencies are expected to increase
from 2011 in line with the company's annual 5% growth target.
For the full year, Apparel net sales growth is estimated to be over 20%. In
Footwear, sales growth is estimated to be approximately 5% due to retailers'
inventory reduction. In Apparel and Footwear, the company no longer provides
semi-annual pre-order figures as Amer Sports considers that these are not a
reliable indicator of the future growth. In Winter Sports Equipment, Amer Sports
has gained market shares and strengthened its market position but pre-orders for
the season 2012/13 are down by 13% due to the late and mild winter in the
previous season.
Amer Sports is continuously driving synergies and scale and continues to invest
into future growth with focus on softgoods, sales coverage, emerging markets,
and own retail. These investments support Amer Sports' sales and gross margin
improvement but require up-front operational expenses. Amer Sports 2012 EBIT
excluding non-recurring items is expected to be approximately at the level of
2011 despite the uncertainty in the winter sports market and the ongoing
investments into the future growth.
KEY FIGURES
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2012 2011 % %*) 2012 2011 % %*) 2011
--------------------------------------------------------------------------------
Net sales 353.8 315.6 12 5 843.6 764.7 10 6 1,880.8
Gross profit 152.5 133.5 14 7 368.8 328.1 12 8 817.4
Gross profit % 43.1 42.3 43.7 42.9 43.5
EBIT -19.8 -10.9 9.2 14.8 -38 -47 135.5
EBIT % -5.6 -3.5 1.1 1.9 7.2
Financing income and expenses -9.2 -4.8 -14.2 -9.1 -20.5
Earnings before taxes -29.0 -15.7 -5.0 5.7 115.0
Net result -22.4 -12.6 -3.7 4.5 90.9
Earnings per share, EUR -0.19 -0.12 -0.04 0.01 0.71
Net cash flow after investing -44.2
activities -67.1 53.2 20.0 -21.4
Equity ratio, % at period end 39.3 47.8 45.6
Gearing, % at period end 63 45 47
Personnel at period end 7,226 6,985 3 7,061
Average rates used, EUR/USD 1.29 1.44 1.30 1.40 1.39
*) Change in local currencies
HEIKKI TAKALA, PRESIDENT AND CEO:"We achieved solid growth in the second quarter, despite deterioration in
trading conditions especially in Europe where several major retailers are
reducing inventories and pre-orders. We continued to improve our gross margins
and to drive cash flow through working capital reduction.
We have continued to significantly invest into our strategic growth areas whilst
driving base business cost efficiencies which we will further pursue. As
examples of the strategic investments in past 12 months, we have opened some 20
new own retail stores and 20 new e-commerce stores. We have put in place
entirely new category market organizations in Russia, China and Brazil. We have
significantly increased our product initiative pipeline especially in Salomon,
Arc'teryx and Wilson for 2013 and onwards.
Whilst all these investments represent incremental cost and admittedly burden
especially the seasonally low second quarter results, they have a positive sales
and gross margin contribution already in the current year, enabling us to by-
pass our 2 billion euro sales milestone in 2012. Importantly, these investments
complete most of our capability needs by the end of 2012 and they contribute to
our scale and synergies in the years to come, in line with the company's
strategic glidepath.
We continue to execute our strategy with confidence as we see that it's
working."
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 at www.amersports.com. A recorded version and a transcript will be
available later at the same web address. The replay number of the call is +44
(0)20 7111 1244, and the access code 4067203#.
THIRD QUARTER RESULTS BULLETIN
Amer Sports will publish its Q3/2012 results bulletin on Thursday, October
25, 2012 at approximately 1:00 pm Finnish time.
CAPITAL MARKETS DAY
Amer Sports is hosting a Capital Markets Day for analysts and portfolio managers
on August 30, 2012 in Helsinki, Finland.
INTERIM REPORT
NET SALES AND EBIT APRIL-JUNE 2012
Amer Sports' net sales in April-June 2012 were EUR 353.8 million (April-June
2011: 315.6). Net sales increased by 5% in local currencies. The fastest growth
took place in Apparel, up by 38%, Fitness, up by 11% and Sports Instruments, up
by 14% excluding divested businesses. There were also high growth rates in
China, Russia and own retail supporting the overall growth.
Net sales by business segment
4-6/ 4-6/ Change Change % of sales % of sales
EUR million 2012 2011 % %*) 4-6/2012 4-6/2011 2011
--------------------------------------------------------------------------
Winter and Outdoor 150.9 133.4 13 8 43 42 1,137.6
Ball Sports 146.5 136.3 7 -1 41 43 511.0
Fitness 56.4 45.9 23 11 16 15 232.2
--------------------------------------------------------------------------
Total 353.8 315.6 12 5 100 100 1,880.8
--------------------------------------------------------------------------
*) In local currencies
Geographic breakdown of net sales
4-6/ 4-6/ Change Change % of sales % of sales
EUR million 2012 2011 % %*) 4-6/2012 4-6/2011 2011
--------------------------------------------------------------------
EMEA 133.1 129.7 3 1 38 41 917.6
Americas 167.4 146.5 14 3 47 46 742.1
Asia Pacific 53.3 39.4 35 22 15 13 221.1
--------------------------------------------------------------------
Total 353.8 315.6 12 5 100 100 1,880.8
--------------------------------------------------------------------
*) In local currencies
Gross margin was 43.1% (42.3). The improvement came especially from Individual
Ball Sports.
Group EBIT was EUR -19.8 million (-10.9). Increased sales volumes contributed
approximately EUR 7 million to EBIT and higher gross margins approximately EUR
3 million. This was offset by increased operating expenses of approximately EUR
14 million and other income and expenses of approximately EUR -5 million.
Operating expenses increased driven by continuous investments into future growth
with focus on softgoods, sales coverage, emerging markets, and own retail. These
up-front investments support Amer Sports' sales and gross margin improvement.
EBIT by business segment
4-6/ 4-6/
EUR million 2012 2011 2011
------------------------------------
Winter and Outdoor -25.4 -15.1 118.5
Ball Sports 9.7 9.1 25.0
Fitness 1.0 -0.3 10.3
Headquarters*) -5.1 -4.6 -18.3
------------------------------------
EBIT total -19.8 -10.9 135.5
------------------------------------
*) Headquarters segment consists of Group administration, shared services
functions, other non-operational income and expenses and fair valuation of
share-based compensations. In the second quarter of 2012, segment operating loss
increased by EUR 0.5 million due to increased operational expenses and change in
fair valuation of share-based compensations and other adjustments.
Net financial expenses were EUR 9.2 million (4.8) including net interest
expenses of EUR 7.6 million (4.8). Net foreign exchange losses were EUR 1.6
million (losses of EUR 0.5 million). Earnings before taxes totaled EUR -29.0
million (-15.7) and taxes were EUR 6.6 million positive (3.1 positive). Earnings
per share were EUR -0.19 (-0.12).
NET SALES AND EBIT JANUARY-JUNE 2012
Amer Sports' net sales in January-June 2012 were EUR 843.6 million (January-June
2011: EUR 764.7 million). Comparable net sales increased by 6% in local
currencies, particularly due to sales growth in Apparel, up by 32%, Footwear, up
by 8%, Fitness, up by 6% and Sports Instruments, up by 12% excluding divested
businesses.
Net sales by business segment
1-6/ 1-6/ Change Change % of sales % of sales
EUR million 2012 2011 % %*) 1-6/2012 1-6/2011 2011
--------------------------------------------------------------------------
Winter and Outdoor 407.4 366.9 11 8 48 48 1,137.6
Ball Sports 320.1 295.3 8 2 38 39 511.0
Fitness 116.1 102.5 13 6 14 13 232.2
--------------------------------------------------------------------------
Total 843.6 764.7 10 6 100 100 1,880.8
--------------------------------------------------------------------------
*) In local currencies
Geographic breakdown of net sales
1-6/ 1-6/ Change Change % of sales % of sales
EUR million 2012 2011 % %*) 1-6/2012 1-6/2011 2011
--------------------------------------------------------------------
EMEA 359.8 343.8 5 3 43 45 917.6
Americas 373.1 332.9 12 5 44 44 742.1
Asia Pacific 110.7 88.0 26 16 13 11 221.1
--------------------------------------------------------------------
Total 843.6 764.7 10 6 100 100 1,880.8
--------------------------------------------------------------------
*) In local currencies
Gross margin was 43.7% (42.9) with a broad-based improvement.
Group EBIT was EUR 9.2 million (14.8). In local currencies, increased sales
volumes contributed approximately EUR 19 million to EBIT, while higher gross
margins contributed approximately EUR 8 million. Operating expenses increased by
approximately EUR 32 million, driven by continuous investments into future
growth with focus on softgoods, sales coverage, emerging markets, and own
retail. Other income and expenses impacted negatively by approximately EUR 3
million on EBIT.
EBIT by business segment
1-6/ 1-6/
EUR million 2012 2011 2011
-----------------------------------
Winter and Outdoor -14.7 -5.8 118.5
Ball Sports 29.6 26.8 25.0
Fitness 4.9 3.0 10.3
Headquarters*) -10.6 -9.2 -18.3
-----------------------------------
EBIT total 9.2 14.8 135.5
-----------------------------------
*) Headquarters segment consists of Group administration, shared services
functions, other non-operational income and expenses and fair valuation of
share-based compensations. In January-June 2012, segment operating loss
increased by EUR 1.4 million due to increased operational expenses and change in
fair valuation of share-based compensations and other adjustments.
Net financial expenses totaled EUR 14.2 million (9.1) including net interest
expenses of EUR 12.1 million (9.2). Net foreign exchange losses totaled EUR 2.1
million (0.1 gains). Earnings before taxes totaled EUR -5.0 million (5.7) and
taxes were EUR 1.3 million positive (1.2 negative). Earnings per share were EUR
-0.04 (0.01).
CASH FLOW AND FINANCING
Net cash flow after investing activities (free cash flow) in January-June was
EUR 53.2 million (20.0). Working capital in total was reduced by EUR 82.4
million (22.5). Inventories increased by EUR 59.6 million (97.8) and receivables
decreased by EUR 210.7 million (176.0).
At the end of June, net debt amounted to EUR 457.0 million (December
31, 2011: 391.6). The increase was due to redemption of a hybrid bond of EUR
60.0 million and its interests of EUR 7.2 million, dividends of EUR 38.9 (36.4)
million and foreign exchange derivatives used in hedging. The hybrid bond was
issued on March 12, 2009 and redeemed on March 12, 2012.
Interest-bearing liabilities amounted to EUR 673.7 million (December
31, 2011: 470.4) consisting of short-term debt of EUR 259.1 million and long-
term debt of EUR 414.6 million. The average interest rate on the Group's
interest-bearing liabilities was 3.3% (December 31, 2011: 3.6).
Short-term debt consists mainly of repayments of long-term loans of EUR 12.4
million (December 31, 2011: 23.4) and commercial papers of EUR 244.9 (194.2).
The total size of the commercial paper program is EUR 500 million.
Cash and cash equivalents totaled EUR 216.7 million (December 31, 2011: 78.8).
Due to uncertain prospects in the economy and financial market, Amer Sports has
increased cash and cash equivalents and reserved funding for high seasonal
working capital in the third quarter.
In April 2012, Amer Sports signed a 3-year EUR 20 million term loan with
Unicredit Bank Austria AG and in June, a 5-year EUR 40 million committed
revolving credit facility with Pohjola Bank. The credit facilities will be used
for general corporate purposes.
The syndicated loan signed in 2011 consists of a EUR 200 million revolving
credit facility. Amer Sports had not used any of the revolving credit facility
or the EUR 40 million committed revolving credit facility of Pohjola Bank at the
end of the review period.
In March 2012, Amer Sports issued two euro denominated bonds. The amount of EUR
150 million was launched and placed on the following terms: EUR 50 million
floating rate notes due March 6, 2014; and EUR 100 million fixed 4.125% notes
due March 15, 2016. The bonds were listed on the NASDAQ OMX Helsinki Ltd on July
27, 2012. The proceeds of the bonds have been used for repayment of debt and
general corporate purposes.
The equity ratio at the end of June was 39.3% (December 31, 2011: 45.6) and
gearing was 63% (December 31, 2011: 47).
CAPITAL EXPENDITURE AND INVESTMENTS
The Group's capital expenditure totaled EUR 21.7 (19.0) million. Depreciation
totaled EUR 20.0 million (17.7). The whole year capital expenditure is expected
to be approximately EUR 50 million (51.4).
BUSINESS SEGMENT REVIEWS
WINTER AND OUTDOOR
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2012 2011 % %*) 2012 2011 % %*) 2011
----------------------------------------------------------------------------
Net sales
Winter Sports Equipment 14.4 11.1 30 20 58.1 58.0 0 -3 448.4
Footwear 56.7 54.9 3 0 160.8 146.0 10 8 287.7
Apparel 25.4 17.4 46 38 76.6 56.3 36 32 191.6
Cycling 29.6 27.9 6 2 65.9 62.3 6 4 120.5
Sports Instruments 24.8 22.1 12 14**) 46.0 44.3 4 12**) 89.4
Net sales, total 150.9 133.4 13 8 407.4 366.9 11 8 1,137.6
EBIT -25.4 -15.1 -14.7 -5.8 118.5
Personnel at period end 4,695 4,507 4 4,590
*) Change in local currencies
**) Underlying growth excluding the businesses divested in 2011
In April-June, Winter and Outdoor's net sales were EUR 150.9 million (133.4), an
increase of 8% in local currencies. Net sales growth was driven by Apparel.
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2012 2011 % %*) 2012 2011 % %*) 2011
----------------------------------------------------------
EMEA 84.9 85.7 -1 -2 256.3 249.2 3 2 751.3
Americas 38.4 29.9 28 18 92.0 73.9 24 18 253.4
Asia Pacific 27.6 17.8 55 40 59.1 43.8 35 25 132.9
----------------------------------------------------------
Total 150.9 133.4 13 8 407.4 366.9 11 8 1,137.6
----------------------------------------------------------
*) Change in local currencies
In April-June, EBIT was EUR -25.4 million (-15.1). Increased sales volumes
contributed approximately EUR 5 million to the EBIT while higher gross margins
contributed approximately EUR 2 million. Operating expenses increased by
approximately EUR 12 million due to sales and distribution costs (all in local
currencies).
Winter Sports Equipment
In April-June, Winter Sports Equipment's net sales were EUR 14.4 million (11.1),
an increase of 20% in local currencies. The second quarter is seasonally low in
Winter Sports Equipment as all focus is on order intake. Compared to last year,
pre-orders for the next season are down by 13%, despite the strengthened market
share positions.
Footwear
In April-June, Footwear's net sales were EUR 56.7 million (54.9), and were at
last year's level in local currencies due to customer de-stocking especially in
Europe which represents 75% of Footwear's annual net sales (2011).
Apparel
In April-June, Apparel's net sales were EUR 25.4 million (17.4), an increase of
38% in local currencies. Growth occurred in all geographical regions.
Cycling
In April-June, Cycling's net sales were EUR 29.6 million (27.9), an increase of
2% in local currencies. The growth came mainly from riders' equipment.
Sports Instruments
In April-June, Sports Instruments' net sales were EUR 24.8 million (22.1), an
increase of 14% in local currencies (underlying growth excluding the businesses
divested in 2011). The growth was supported by a GPS watch, Ambit, which was
launched during the first quarter of 2012.
BALL SPORTS
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2012 2011 % %*) 2012 2011 % %*) 2011
---------------------------------------------------------------------
Net sales
Individual Ball Sports 87.3 81.8 7 0 184.9 169.5 9 4 283.0 Team Sports 59.2 54.5 9 -2 135.2 125.8 7 1 228.0
Net sales, total 146.5 136.3 7 -1 320.1 295.3 8 2 511.0
EBIT 9.7 9.1 7 29.6 26.8 10 25.0
Personnel at period end 1,611 1,686 -5 1,631
*) Change in local currencies
In April-June, Ball Sports' net sales were EUR 146.5 million (136.3), and were
at last year's level in local currencies. Performance tennis rackets were up,
while lower price point tennis rackets were flat and balls as well as baseball
bats decreased as trade was de-stocking their inventories.
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2012 2011 % %*) 2012 2011 % %*) 2011
--------------------------------------------------------
EMEA 33.7 33.0 2 0 75.6 72.3 5 3 113.4
Americas 92.3 85.8 8 -3 202.6 188.2 8 1 331.0
Asia Pacific 20.5 17.5 17 6 41.9 34.8 20 11 66.6
--------------------------------------------------------
Total 146.5 136.3 7 -1 320.1 295.3 8 2 511.0
--------------------------------------------------------
*) Change in local currencies
In April-June, EBIT was EUR 9.7 million (9.1). The improvement was driven by
strong margins for the quarter and favorable currency rates on translation.
Individual Ball Sports
In April-June, Individual Ball Sports' net sales were EUR 87.3 million (81.8),
and were at last year's level in local currencies. The sales of performance
tennis rackets were up by 5% while sales of lower price point tennis rackets
were flat and balls decreased by 5%.
Team Sports
In April-June, Team Sports' net sales were EUR 59.2 million (54.5), a decrease
of 2% in local currencies. The decline was driven by the baseball bat product
category.
FITNESS
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2012 2011 % %*) 2012 2011 % %*) 2011
-----------------------------------------------------------------
Net sales 56.4 45.9 23 11 116.1 102.5 13 6 232.2
EBIT 1.0 -0.3 4.9 3.0 63 10.3
Personnel at period end 794 720 10 749
*) Change in local currencies
In April-June, Fitness's net sales were EUR 56.4 million (45.9), an increase of
11% in local currencies. Geographically, sales were up especially in EMEA, as a
result of investments in sales and distribution.
The commercial business (clubs and institutions) was up by 10% in local
currencies. Consumer business (home use) was up by 16%.
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2012 2011 % %*) 2012 2011 % %*) 2011
------------------------------------------------------
EMEA 14.5 11.0 32 26 27.9 22.3 25 21 52.9
Americas 36.7 30.8 19 6 78.5 70.8 11 3 157.7
Asia Pacific 5.2 4.1 27 11 9.7 9.4 3 -6 21.6
------------------------------------------------------
Total 56.4 45.9 23 11 116.1 102.5 13 6 232.2
------------------------------------------------------
*) Change in local currencies
In April-June, EBIT was EUR 1.0 million (-0.3). The improvement was due to
higher sales volumes.
PERSONNEL
At the end of June, the number of Group employees was 7,226 (December
31, 2011: 7,061). The increase came mainly from personnel working in sales and
distribution. The increase in Headquarters and shared services was due to
establishing a shared financial service center in the EMEA region, which will
bring scale and synergy benefits.
June 30, June 30, Change December 31,
2012 2011 % 2011
----------------------------------------------------------------------
Winter and Outdoor 4,695 4,507 4 4,590
Ball Sports 1,611 1,686 -5 1,631
Fitness 794 720 10 749
Headquarters and shared services 126 72 75 91
----------------------------------------------------------------------
Total 7,226 6,985 3 7,061
----------------------------------------------------------------------
June 30, June 30, Change December 31,
2012 2011 % 2011
--------------------------------------------------
EMEA 4,269 4,204 2 4,185
Americas 2,306 2,233 3 2,312
Asia Pacific 651 548 19 564
--------------------------------------------------
Total 7,226 6,985 3 7,061
--------------------------------------------------
CHANGES IN GROUP MANAGEMENT
Vincent Wauters, Amer Sports' SVP Supply Chain and IT, was nominated General
Manager for Arc'teryx Inc effective June 13, 2012. Antti Jääskeläinen, Amer
Sports' Chief Development Officer, assumed leadership for the Group Supply Chain
and IT on top of his existing responsibilities (Chief Development Officer since
2009). Mr. Wauters reports to Andy Towne, President of Amer Sports' Apparel, and
is no longer a member of the Group Executive Board. Mr. Jääskeläinen continues
to report to Heikki Takala, Amer Sports President and CEO, and is a member of
the Group Executive Board.
CHANGES IN GROUP STRUCTURE
In January, the company completed the acquisition of a 5% minority share in
Atomic Austria GmbH. In March the company sold its 60% share in Suunto Benelux
BV. The transactions had no material impact on Amer Sports' financial position.
SHARES AND SHAREHOLDERS
The company's share capital totaled EUR 292,182,204 on June 30, 2012 and the
number of shares was 118,517,285.
Authorizations
The Annual General Meeting held on March 10, 2011 authorized the Board of
Directors to decide on the repurchase of a maximum of 10,000,000 of the
company's own shares ("Repurchase Authorization"). The company's own shares
shall be repurchased otherwise than in proportion to the holdings of the
shareholders by using the non-restricted equity through public trading on the
NASDAQ OMX Helsinki at the market price prevailing at the time of acquisition.
The shares shall be repurchased and paid for in accordance with the rules of the
NASDAQ OMX Helsinki and Euroclear Finland Ltd. The Repurchase Authorization is
valid for 18 months from the decision of the Annual General Meeting.
The Annual General Meeting held on March 8, 2012 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.
Amer Sports Board of Directors decided on January 31, 2012 to utilize the
authorization given by the Annual General Meeting held on March 10, 2011 to
cancel a total of 3,000,000 own shares held by the company, which equates to
approximately 2.5% of the registered number of shares. The cancellation did not
affect the company's share capital.
Based on the Board of Directors' decision, a total of 280,029 Amer Sports shares
were transferred on March 8, 2012 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 Corporation.
At the end of June, Amer Sports held a total of 732,096 shares of Amer Sports
Corporation. The number of own shares corresponds to 0.62% (0.83) of all Amer
Sports shares.
Trading in shares
In January-June, a total of 38.8 million (36.5) Amer Sports shares with a value
totaling EUR 381.6 million (373.3) were traded on the NASDAQ OMX Helsinki Ltd in
the review period. The average daily volume in January-June 2012 was 313,155
shares (294,548).
The closing price of the Amer Sports Corporation share on the NASDAQ OMX
Helsinki Ltd stock exchange on June 30, 2012 was EUR 8.99 (11.46). Shares
registered a high of EUR 11.0 (11.97) and a low of EUR 8.39 (8.43) during the
review period. The average share price was EUR 9.83 (10.22). On June 30, 2012,
the company had a market capitalization of EUR 1,058.9 million (1,381.0),
excluding own shares.
Amer Sports Corporation had 15,178 registered shareholders (16,429) at the end
of June 2012. Outside Finland, ownership and nominee registrations represented
45.5% (49.8%) of the company's shares.
Notification of change in shareholding under the Finnish Securities Market Act
On February 7, 2012, Amer Sports received information to the effect that Orkla
ASA 's (Norwegian trade register no. 910 747 711) share capital and voting
rights of Amer Sports had fallen below 5% on February 6, 2012. At that time
Orkla ASA owned 3,891,352 shares, which represented 3.2% of Amer Sports
Corporation's share capital and voting rights (previously 6,081,352 shares).
DECISIONS OF THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
Documentation and press releases relating to the resolutions approved by the
Amer Sports Corporation Annual General Meeting held on March 8, 2012 are
available on the company's website at www.amersports.com/investors.
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 the late and mild winter in season 2011/12 and its
impact on Winter Sports Equipment, 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.
Further information on the company's business risks and uncertainty factors is
available on the company's web site at www.amersports.com/investors.
OUTLOOK FOR 2012
In 2012, Amer Sports' net sales in local currencies are expected to increase
from 2011 in line with the company's annual 5% growth target.
For the full year, Apparel net sales growth is estimated to be over 20%. In
Footwear, sales growth is estimated to be approximately 5% due to retailers'
inventory reduction. In Apparel and Footwear, the company no longer provides
semi-annual pre-order figures as Amer Sports considers that these are not a
reliable indicator of the future growth. In Winter Sports Equipment, Amer Sports
has gained market shares and strengthened its market position but pre-orders for
the season 2012/13 are down by 13% due to the late and mild winter in the
previous season.
Amer Sports is continuously driving synergies and scale and continues to invest
into future growth with focus on softgoods, sales coverage, emerging markets,
and own retail. These investments support Amer Sports' sales and gross margin
improvement but require up-front operational expenses. Amer Sports 2012 EBIT
excluding non-recurring items is expected to be approximately at the level of
2011 despite the uncertainty in the winter sports market and the ongoing
investments into the future growth.
Outlook given in the interim report on April 27, 2012
In 2012, Amer Sports will continue to invest into executing its long-term
strategy and sustaining profitable growth with special focus on leveraging Amer
Sports' strong brands into apparel, footwear and accessories as well as on
emerging markets expansion.
Amer Sports expects broad-based sales growth and profitability improvement
across most business areas in 2012, with the exception of Winter Sports
Equipment where pre-orders are expected to decline and profitability to be
adversely impacted by the late and mild winter in season 2011/12, especially in
North America and Southern Europe. However, the Winter Sports Equipment
operational efficiency program which started in 2010 is proceeding ahead of plan
and will partially help to mitigate the negative impacts of the expected pre-
order decline.
Amer Sports' net sales in local currencies are expected to increase from 2011 in
line with the company's annual 5% growth target. Leveraging Amer Sports' brands
into apparel, footwear and accessories continues to be the main growth driver
for the company.
TABLES
The notes are an integral part of consolidated interim financial information.
Unaudited
EUR million
CONSOLIDATED RESULTS
4-6/ 4-6/ Change 1-6/ 1-6/ Change
2012 2011 % 2012 2011 % 2011
--------------------------------------------------------------------------------
NET SALES 353.8 315.6 12 843.6 764.7 10 1,880.8
Cost of goods sold -201.3 -182.1 -474.8 -436.6 -1,063.4
--------------------------------------------------------------------------------
GROSS PROFIT 152.5 133.5 14 368.8 328.1 12 817.4
License income 1.9 2.1 3.9 4.4 8.7
Other operating income 2.6 0.9 3.1 1.4 5.4
R&D expenses -16.8 -14.0 -33.8 -29.2 -64.2
Selling and marketing -118.0
expenses -103.1 -250.6 -220.1 -475.9
Administrative and other
expenses -42.0 -30.3 -82.2 -69.8 -155.9
--------------------------------------------------------------------------------
EARNINGS BEFORE
INTEREST AND TAXES -19.8 -10.9 9.2 14.8 -38 135.5
% of net sales -5.6 -3.5 1.1 1.9 7.2
Financing income and expenses -9.2 -4.8 -14.2 -9.1 -20.5
--------------------------------------------------------------------------------
EARNINGS BEFORE TAXES -29.0 -15.7 -5.0 5.7 115.0
Taxes 6.6 3.1 1.3 -1.2 -24.1
--------------------------------------------------------------------------------
NET RESULT -22.4 -12.6 -3.7 4.5 90.9
--------------------------------------------------------------------------------
Attributable to:
Equity holders of the parent
company -22.4 -12.6 -3.7 4.5 90.8
Non-controlling interests - 0.0 - 0.0 0.1
Earnings per share, EUR -0.19 -0.12 -0.04 0.01 0.71
Earnings per share, diluted, -0.19
EUR -0.12 -0.04 0.01 0.71
Adjusted average number of
shares in issue less own
shares, million 117.7 120.8 119.9
Adjusted average number of
shares in issue less own
shares,
diluted, million 118.0 120.8 120.1
Equity per share, EUR 6.16 5.93 7.03
ROCE, % *) 12.0 12.2 13.2
ROE, % -1.0 1.2 11.2
Average rates used:
EUR 1.00 = USD 1.2851 1.4399 1.2975 1.4030 1.3926
*) 12 months' rolling average
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
4-6/ 4-6/ 1-6/ 1-6/
2012 2011 2012 2011 2011
-------------------------------------------------------------------------
Net result -22.4 -12.6 -3.7 4.5 90.9
Other comprehensive income
Translation differences 21.1 -8.2 8.7 -26.0 7.7
Cash flow hedges 4.8 -2.5 -4.0 -6.7 17.3
Income tax related to
cash flow hedges -1.3 0.6 1.0 1.7 -4.5
-------------------------------------------------------------------------
Other comprehensive income,
net of tax 24.6 -10.1 5.7 -31.0 20.5
-------------------------------------------------------------------------
Total comprehensive income 2.2 -22.7 2.0 -26.5 111.4
-------------------------------------------------------------------------
Total comprehensive income attributable to:
Equity holders of the parent
company 2.2 -22.7 2.0 -26.5 111.3
Non-controlling interests - 0.0 - 0.0 0.1
NET SALES BY BUSINESS SEGMENT
4-6/ 4-6/ Change 1-6/ 1-6/ Change
2012 2011 % 2012 2011 % 2011
------------------------------------------------------------------
Winter and Outdoor 150.9 133.4 13 407.4 366.9 11 1,137.6
Ball Sports 146.5 136.3 7 320.1 295.3 8 511.0
Fitness 56.4 45.9 23 116.1 102.5 13 232.2
------------------------------------------------------------------
Total 353.8 315.6 12 843.6 764.7 10 1,880.8
------------------------------------------------------------------
GEOGRAPHIC BREAKDOWN OF NET SALES
4-6/ 4-6/ Change 1-6/ 1-6/ Change
2012 2011 % 2012 2011 % 2011
----------------------------------------------------------
EMEA 133.1 129.7 3 359.8 343.8 5 917.6
Americas 167.4 146.5 14 373.1 332.9 12 742.1
Asia Pacific 53.3 39.4 35 110.7 88.0 26 221.1
----------------------------------------------------------
Total 353.8 315.6 12 843.6 764.7 10 1,880.8
----------------------------------------------------------
EBIT BY BUSINESS SEGMENT
4-6/ 4-6/ Change 1-6/ 1-6/ Change
2012 2011 % 2012 2011 % 2011
-------------------------------------------------------------
Winter and Outdoor -25.4 -15.1 -14.7 -5.8 118.5
Ball Sports 9.7 9.1 7 29.6 26.8 10 25.0
Fitness 1.0 -0.3 4.9 3.0 63 10.3
Headquarters -5.1 -4.6 -10.9 -9.2 -18.3
-------------------------------------------------------------
Total -19.8 -10.9 9.2 14.8 -38 135.5
-------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
4-6/ 4-6/ 1-6/ 1-6/
Note 2012 2011 2012 2011 2011
---------------------------------------------------------------------------
Earnings before interest and taxes -19.8 -10.9 9.2 14.8 135.5
Adjustments to cash flow from
operating activities and depreciation 10.8 13.0 16.3 18.5 37.9
Change in working capital -7.0 -50.9 82.4 22.5 -97.6
---------------------------------------------------------------------------
Cash flow from operating activities
before financing items and taxes -16.0 -48.8 107.9 55.8 75.8
Interest paid and received -12.8 -10.9 -15.0 -12.1 -20.5
Income taxes paid and received -4.7 -3.1 -15.8 -10.3 -24.7
---------------------------------------------------------------------------
Net cash flow from operating activities -33.5 -62.8 77.1 33.4 30.6
Acquired operations - - - - -6.5
Sold operations - 5.3 1.1 5.3 5.3
Acquired non-controlling interests - - -3.7 - -
Capital expenditure on non-current
tangible and intangible assets -10.8 -9.7 -21.7 -19.0 -51.4
Proceeds from sale of tangible non-
current assets 0.1 0.1 0.4 0.3 0.6
---------------------------------------------------------------------------
Net cash flow from investing activities -10.7 -4.3 -23.9 -13.4 -52.0
Net cash flow after investing activities
(free cash flow) -44.2 -67.1 53.2 20.0 -21.4
Repurchase of own shares - - - -9.2 -36.7
Hybrid bond 4 - - -67.2 -7.2 -7.2
Dividends paid 5 - - -38.9 -36.4 -36.4
Change in debt and other financing
items 68.2 -5.2 190.5 -5.0 94.9
---------------------------------------------------------------------------
Net cash flow from financing activities 68.2 -5.2 84.4 -57.8 14.6
Cash and cash equivalents on
April 1/January 1 191.6 118.1 78.8 84.7 84.7
Translation differences 1.1 0.2 0.3 -0.9 0.9
Change in cash and cash equivalents 24.0 -72.3 137.6 -37.8 -6.8
---------------------------------------------------------------------------
Cash and cash equivalents on
June 30/December 31 216.7 46.0 216.7 46.0 78.8
---------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
June 30, June 30, December 31,
Note 2012 2011 2011
------------------------------------------------------------------------------
Assets
------------------------------------------------------------------------------
Goodwill 298.1 272.6 295.7
Other intangible non-current assets 213.1 205.7 214.5
Tangible non-current assets 158.5 140.5 157.8
Other non-current assets 99.4 99.6 99.6
Inventories and work in progress 424.1 389.4 359.7
Receivables 437.3 347.4 611.9
Cash and cash equivalents 216.7 46.0 78.8
------------------------------------------------------------------------------
Total assets 2 1,847.2 1,501.2 1,818.0
------------------------------------------------------------------------------
Shareholders' equity and liabilities
------------------------------------------------------------------------------
Shareholders' equity 725.9 717.1 829.4
Long-term interest-bearing liabilities 414.6 326.7 251.4
Other long-term liabilities 23.0 18.4 22.7
Current interest-bearing liabilities 259.1 44.1 219.0
Other current liabilities 394.7 367.3 463.1
Provisions 29.9 27.6 32.4
------------------------------------------------------------------------------
Total shareholders' equity and liabilities 1,847.2 1,501.2 1,818.0
------------------------------------------------------------------------------
Equity ratio, % 39.3 47.8 45.6
Gearing, % 63 45 47
EUR 1.00 = USD 1.2590 1.4488 1.2939
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,
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 -26.0 -26.0
Cash flow
hedges -6.7 -6.7
Income tax
related to
cash flow
hedges 1.7 1.7
Net result 4.5 4.5
Total
comp-
rehensive
income -26.0 -5.0 4.5 -26.5
Transact-
ions with
owners:
Repurch-
ase of
own
shares -9.2 -9.2
Share-
based
incentive
programs 5.4 0.8 6.2
Interest on
hybrid
bond -7.2 -7.2
Dividend
distribution 5 -36.3 -36.3
-----------------------------------------------------------------------------
Balance at
June 30,
2011 292.2 12.1 -9.4 -60.3 -10.6 151.5 60.0 279.1 714.6
Balance at
Jan. 1,
2012 292.2 12.1 -36.9 -26.6 7.2 151.5 60.0 367.3 826.8
Other
compre-
hensive
income:
Translation
differences 8.7 8.7
Cash flow
hedges -4.0 -4.0
Income tax
related to
cash flow
hedges 1.0 1.0
Net result -3.7 -3.7
Total
comp-
rehensive
income 8.7 -3.0 -3.7 2.0
Transact-
ions with
owners:
Cancella-
tion of own
shares 27.2 -27.2 -
Share-
based
incentive
programs 2.7 2.9 -2.4 3.2
Hybrid
bond 4 -60.0 -7.2 -67.2
Dividend
distribution 5 -38.9 -38.9
-----------------------------------------------------------------------------
Balance at
June 30,
2012 292.2 12.1 -7.0 -17.9 4.2 154.4 - 287.9 725.9
Total
Non- share-
cont- hold-
rolling ers'
inte- equ-
Note rests ity
--------------------------------
Balance at
Jan. 1,
2011 2.6 790.2
Other
compre-
hensive
income:
Translation
differences -26.0
Cash flow
hedges -6.7
Income tax
related to
cash flow
hedges 1.7
Net result 4.5
Total
comp-
rehensive
income -26.5
Transact-
ions with
owners:
Repurch-
ase of
own
shares -9.2
Share-
based
incentive
programs 6.2
Interest on
hybrid
bond -7.2
Dividend
distribution 5 -0.1 -36.4
--------------------------------
Balance at
June 30,
2011 2.5 717.1
Balance at
Jan. 1,
2012 2.6 829.4
Other
compre-
hensive
income:
Translation
differences 8.7
Cash flow
hedges -4.0
Income tax
related to
cash flow
hedges 1.0
Net result -3.7
Total
comp-
rehensive
income 2.0
Transact-
ions with
owners:
Share-
based
incentive
programs 3.2
Hybrid
bond 4 -67.2
Dividend
distribution 5 -38.9
Other change -2.6 -2.6
--------------------------------
Balance at
June 30,
2012 - 725.9
QUARTERLY BREAKDOWN OF NET SALES AND EBIT
Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ Q4/ Q3/
NET SALES 2012 2012 2011 2011 2011 2011 2010 2010
------------------------------------------------------------------
Winter and Outdoor 150.9 256.5 375.0 395.7 133.4 233.5 416.5 300.3
Ball Sports 146.5 173.6 109.0 106.7 136.3 159.0 107.3 114.0
Fitness 56.4 59.7 72.9 56.8 45.9 56.6 59.6 52.6
------------------------------------------------------------------
Total 353.8 489.8 556.9 559.2 315.6 449.1 583.4 466.9
------------------------------------------------------------------
Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ Q4/ Q3/
EBIT 2012 2012 2011 2011 2011 2011 2010 2010
------------------------------------------------------------------
Winter and Outdoor -25.4 10.7 45.0 79.3 -15.1 9.3 51.2 58.2
Ball Sports 9.7 19.9 -0.7 -1.1 9.1 17.7 -5.4 3.5
Fitness 1.0 3.9 4.5 2.8 -0.3 3.3 2.0 2.8
Headquarters -5.1 -5.5 -2.5 -6.6 -4.6 -4.6 0.6 -8.7
------------------------------------------------------------------
Total -19.8 29.0 46.3 74.4 -10.9 25.7 48.4 55.8
------------------------------------------------------------------
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, 2012, as adopted by the EU. The IFRS
recognition and measurement principles as described in the annual financial
statements for 2011 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 2012:
The following new standards, interpretations and amendments have been adopted
when applicable: IFRS 7 (amendment) and IFRS 12 (amendment) and the annual
improvements. The amendments 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
---------------------------------------------------------------------
1-6/2012
Winter and Outdoor 407.4 -14.7 817.7
Ball Sports 320.1 29.6 405.5
Fitness 116.1 4.9 242.0
---------------------------------------------------------------------
Segments, total 843.6 19.8 1,465.2
---------------------------------------------------------------------
Unallocated items*) -10.6 -14.2 382.0
---------------------------------------------------------------------
Group total 843.6 9.2 -14.2 -5.0 1,847.2
---------------------------------------------------------------------
1-6/2011
Winter and Outdoor 366.9 -5.8 742.5
Ball Sports 295.3 26.8 363.3
Fitness 102.5 3.0 210.8
-----------------------------------------------------
Segments, total 764.7 24.0 1,316.6
-----------------------------------------------------
Unallocated items*) -9.2 -9.1 184.6
-----------------------------------------------------
Group total 764.7 14.8 -9.1 5.7 1,501.2
-----------------------------------------------------
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
-----------------------------------------------------
*) Earnings before interest and taxes include income and expenses of corporate
headquarters.
GEOGRAPHIC BREAKDOWN OF NET SALES
1-6/ 1-6/
2012 2011 2011
--------------------------------
EMEA 359.8 343.8 917.6
Americas 373.1 332.9 742.1
Asia Pacific 110.7 88.0 221.1
--------------------------------
Total 843.6 764.7 1,880.8
--------------------------------
3. DERIVATIVE FINANCIAL INSTRUMENTS
June 30, June 30, December 31,
2012 2011 2011
-----------------------------------------------------------
Nominal value
Foreign exchange derivatives 802.9 664.0 922.6
Interest rate swaps 100.0 139.0 50.0
Cross currency swaps 57.0 55.6 56.1
Fair value
Foreign exchange derivatives 0.6 -7.9 2.0
Interest rate swaps -3.5 -2.1 -3.1
Cross currency swaps 0.5 0.4 0.5
4. HYBRID BOND
On March 12, 2012 Amer Sports redeemed the EUR 60 million hybrid bond issued on
March 12, 2009.
5. DIVIDENDS
Dividends distributed in March 2012 by Amer Sports to its shareholders and
minority shareholders of its subsidiaries amounted to EUR 38.9 million relating
to the year ending on December 31, 2011 (2011: 36.4). Dividends distributed to
the shareholders of Amer Sports Corporation were EUR 0.33 per share and in total
EUR 38.9 million (2011: EUR 0.30 per share and in total EUR 36.3 million).
6. CONTINGENT LIABILITIES AND SECURED ASSETS
June June December
30, 2012 30, 2011 31, 2011
------------------------------------------------------------------------
Guarantees 21.7 13.2 21.4
Liabilities for leasing and rental agreements 128.2 115.4 123.2
Other liabilities 37.5 19.6 33.8
There are no guarantees or contingencies given for the management of the
company, the shareholders or the associated companies.
7. 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.
8. 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#1631388]
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