Business news :Amer Sports Grows Q3 Sales Despite Winter Sports Decline

Amer Sports net sales reached €601.9 million ($753 mm) in the third quarter, up 7.6 percent from €559.2 million a year earlier as strong sales of Apparel, Sports Instruments and Fitness more than offset a 15 percent decline in Winter Sports.

In local currencies, net sales increased by 2 percent. Strong growth in Apparel (+27 percent), Sports Instruments (+24 percent) and Fitness (+10 percent) was offset by a decline in Winter Sports Equipment (-15 percent).

Gross margin was flat at 45.3 percent, while EBIT reached € 80.8 million ($101 mm), up 8.6 percent from €74.4 million a year earlier. Earnings per share were €0.47 compared to €.45 in 2011). Net cash flow after investing activities improved €12.3 million and was negative €78.1 million compared to negative €90.4 million.

The Finnish company said its 2012 outlook for 5 percent local currency revenue growth and flat EBIT excluding non-recurring items is unchanged. Still, it is starting a restructuring program in order to sustain growth and to drive further scale and synergies. The program is estimated to deliver an annual cost saving of € 20 million once fully executed by the end of 2014.

"Our Q3 sales were driven by strong on-going momentum in Apparel (27 percent growth), as well as continuous improvement in Suunto (+24 percent), Fitness (10 percent), Tennis (+8 percent) and Cycling (+7 percent),” said Heikki Takala, president and CEO. “As expected, Winter Sports Equipment declined in line with the previously communicated low pre-orders, despite our strengthened market position.

“The external trading environment is admittedly quite challenging, but we have successfully continued to execute our strategic programs with extra focus on working capital management and especially the health of our inventories. We have also continued to invest into the long-term strategic programs, like expansion in China and Russia, own retail and softgoods. Now the majority of the new capabilities are starting to be in place. In order to sustain the growth, and to drive further scale and synergies, we're also starting a group-wide restructuring program.

I'm overall pleased by our progress, especially as we have been able to largely mitigate the Winter Sports Equipment decline and the challenging trading environment. We are progressing well in our strategic glidepath, and we continue executing with confidence."
Headquarters segment consists of Group administration, shared services functions, other non-operational income and expenses and fair valuation of share-based compensations. In the third quarter of 2012, segment operating loss increased by EUR 1.0 million due to increased operational expenses and change in fair valuation of share-based compensations and other adjustments.

Net financial expenses were EUR 6.3 million (5.3) including net interest expenses of EUR 6.3 million (4.6). Net foreign exchange losses were EUR 0.5 million (0.6). Earnings before taxes totaled EUR 74.6 million (69.1) and taxes were EUR 18.7 million (13.8). Earnings per share were EUR 0.47.

Amer's brands include Wilson, Atomic, Suunto, Salomon, Arc’Teryx, Mavic and Precor.

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