Amer Sports Says Q2 Sales Hurt by U.S. Retail Bankruptcies
Amer Sports Half Year Financial Report January-June 2016
- Net sales EUR 477.4 million (April-June 2015: 461.1). In local currencies, net sales increased by 6%. Organic growth was 5%, driven by Footwear and Apparel.
- Gross margin 44.7% (44.1).
- EBIT EUR -12.1 million (-9.0 excluding items affecting comparability, IAC).
- Net sales and profitability were adversely impacted by the US customer bankruptcies.
- Earnings per share EUR -0.13 (-0.11 excluding IAC).
- Free cash flow EUR -54.3 million (11.5) due to seasonal fluctuation.
- Outlook for 2016 unchanged.
- Net sales EUR 1,112.9 million (January-June 2015: 1,037.0). In local currencies, net sales increased by 9%. Organic growth was 6%.
- Gross margin 46.3% (45.1).
- EBIT excluding IAC EUR 33.9 million (24.6). Items affecting comparability were EUR -6.3 million (-8.0).
- Earnings per share excluding IAC EUR 0.11 (0.04).
- Free cash flow EUR -21.5 million (54.5).
In 2016, Amer Sports net sales in local currencies are expected to increase and EBIT margin excluding items affecting comparability to improve from 2015, despite challenging market conditions. The company will focus on growing the core business and accelerating in five prioritized areas: Apparel and Footwear, US, China, Business to Consumer, as well as digitally connected devices and services.
IMPACT OF NEW ESMA GUIDELINES
New ESMA (European Securities and Markets Authority) guidelines on Alternative Performance Measures (APMs) are effective for the financial year 2016. Amer Sports presents APMs to reflect the underlying business performance and to enhance comparability between financial periods. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS. As of Q1 2016, Amer Sports relabels the previously referenced “excluding non- recurring items” with “excluding items affecting comparability” (IAC). Operating segments’ EBIT is reported excluding IAC. Items affecting comparability and APMs used by Amer Sports are defined in note 10 of this report.
HEIKKI TAKALA, PRESIDENT AND CEO:
The second quarter is traditionally our smallest, however we delivered a solid 6% growth despite short-term adverse business impact due to US customer disruptions, which impacted especially Ball Sports. During the quarter we executed a significant distribution center expansion in both the US and EMEA, and moved Arc’teryx into a larger production facility in Canada. These changes added short-term CAPEX and OPEX, however they support our mid/long-term growth.
Our outlook for the year remains positive, supported by robust pre-orders in most businesses, with the exception of Winter Sports Equipment where we expect a modest decline following the challenging previous winters. Our initiative pipeline for the Fall/Winter season is stronger than ever with strong joint business plans with our retail partners, continuous B2C expansion, and a robust innovation rollout across the brands.
CAPITAL MARKETS DAY
Amer Sports is hosting a Capital Markets Day for analysts and institutional investors in Helsinki on September 1, 2016.
THIRD QUARTER RESULTS BULLETIN
Amer Sports will publish its Q3/2016 results bulletin on Thursday, October 20, 2016 at approximately 1:00 p.m. Finnish time.
INVESTOR RELATIONS NEWSLETTER
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Nasdaq Helsinki, main media, www.amersports.com
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 Helsinki stock exchange (AMEAS).