Amer Sports reports earnings, restructuring plan
Editor’s note: Amer Sports, owner of Salomon, Bonfire, Nikita and many other outdoor and sports brands, also announced a restructuring plan today. See Page 2 for that release.
Amer Sports Corporation Interim Report January-June 2014
July 24, 2014 at 1:00 pm
• Net sales totaled EUR 376.1 million (April-June 2013: EUR 377.2 million). In local currencies, net sales increased by 4%. Double-digit growth in Apparel, Footwear and Cycling, offset by a minor decline in Ball Sports mainly due to continuous clean-up of unprofitable sales.
• Gross margin 43.9% (43.6%).
• EBIT excluding non-recurring items was EUR -17.6 million (-18.7). Non-recurring items were EUR -1.2 million (0) and were related to Ball Sports.
• Earnings per share were EUR -0.16 (-0.16).
• Net cash flow after investing activities EUR -38.7 million (-50.0).
• Pre-orders in Winter Sports Equipment declined by 4% indicating market share increases.
• Outlook for 2014 unchanged.
• Amer Sports moves into the next phase of restructuring to further accelerate profitable long-term growth towards 2020 (announced in a separate release today).
• Net sales were EUR 877.6 million (January-June 2013: EUR 870.2 million). In local currencies, net sales increased by 5%.
• Gross margin 44.1% (43.9%).
• EBIT excluding non-recurring items was EUR 3.0 million (7.7). Non-recurring items were EUR -1.2 million (0).
• Earnings per share EUR -0.09 (-0.03).
• Net cash flow after investing activities EUR 5.5 million (17.9).
OUTLOOK FOR 2014
Amer Sports expects global trading conditions to remain challenging, with some regional improvements. In 2014, Amer Sports’ net sales growth in local currencies is expected to meet at minimum the company’s long-term annual 5% growth target and EBIT excluding non-recurring items to improve from 2013. The company will continue to focus on the growth of Apparel and Footwear, consumer-driven product and marketing innovation, commercial expansion and operational excellence.
HEIKKI TAKALA, PRESIDENT AND CEO:
The second quarter is typically a low sales quarter for Amer Sports, nevertheless we continued to deliver a solid 4% currency neutral growth, driven by Apparel and Footwear, Business to Consumer, China as well as Cycling and Fitness. We continued to define and execute a new strategy for Ball Sports, with the objective to first improve the gross margins and then re-ignite profitable growth. In this context, we discontinued some unprofitable Wilson product lines, and this affected our Ball Sports sales.
The trading conditions have continued to be quite challenging, partially due to the Winter Sports Equipment market being cautious and due to the political uncertainties especially in Russia and Argentina. However, we continue to have strong momentum in the majority of the businesses, with significant further acceleration opportunities especially in Apparel and Footwear, Business to Consumer, emerging markets, and increasingly in digital products and services. To capitalize on these acceleration opportunities faster, and to speed up the Ball Sports turnaround, we will start the next phase of our restructuring as announced today.
See Page 2 for Amer’s restructuring press release
Amer Sports moves into the next phase of restructuring to further accelerate profitable long-term growth towards 2020
Amer Sports Corporation
July 24, 2014 at 12.50 pm
Following the successful completion of the restructuring announced in 2012 Amer Sports now moves into the next phase of restructuring. The primary objectives are to re-ignite profitable growth in Ball Sports and to further accelerate Amer Sports’ growth towards 2020 especially in Apparel and Footwear, Business to Consumer, and digital products and services. The program will help to drive further scale and synergies across the Group and it will enable re-allocation of resources into the focus acceleration areas.
This phase of the restructuring will be executed during the next 18-24 months. Related non-recurring expenses of approximately EUR 60 million will mostly be recognized during the second half of 2014. Approximately EUR 25 million of the total expenses will have cash flow impact.
The restructuring is Group-wide and focused on the following key areas:
• Re-igniting profitable growth in Ball Sports, especially in Individual Ball Sports, including termination of low-profitability sales and non-core product lines and related R&D, and restructuring of Wilson Apparel and Footwear and Go-to-Market model.
• Resource re-allocation to support faster growth in the Group’s strategic growth areas: Apparel and Footwear, Business to Consumer, and consumer engagement through digital products and services.
• Driving further scale and synergies and decreasing complexity and duplication in business areas, regions, functions, sites and platforms.
Amer Sports (www.amersports.com) is a sporting goods company with internationally recognized brands including Salomon, Wilson, Atomic, Arc’teryx, Mavic, Suunto and Precor. The company’s technically-advanced sports equipment, footwear and apparel improve performance and increase the enjoyment of sports and outdoor activities. The Group’s business is balanced by its broad portfolio of sports and products and a presence in all major markets. Amer Sports shares are listed on the NASDAQ OMX Helsinki stock exchange (AMEAS).