Amer Sports brands include: Salomon, Wilson, Atomic, Arc'teryx, Mavic, Suunto and Precor.
Other highlights from the quarter:
- Gross margin 44.2 percent (44.2 percent).
- EBIT €26.4 million (29.6).
- Earnings per share €0.13 (0.15).
- Net cash flow after investing activities €67.9 million (97.4).
- Gearing 56 percent (December 31, 2012: 59 percent).
In 2013, Amer Sports' net sales growth in local currencies is expected to meet at minimum the company's long-term annual 5 percent growth target and EBIT margin excluding non-recurring items is expected to improve from 2012. Amer Sports expects the trading environment to remain challenging in 2013. The company will continue to focus on softgoods growth, consumer-driven product and marketing innovation, commercial expansion and operational excellence.
KEY FIGURES
EUR million 1-3/2013 1-3/2012*) 2012*)
Net sales 493.0 489.8 2,064.0
Gross profit 217.7 216.3 900.6
Gross profit % 44.2 44.2 43.6
EBIT excluding non-recurring items 26.4 29.6 138.7
EBIT % excluding non-recurring items 5.4 6.0 6.7
Non-recurring items**) - - -24.8
EBIT total 26.4 29.6 113.9
EBIT % 5.4 6.0 5.5
Financing income and expenses -6.7 -5.4 -31.5
Earnings before taxes 19.7 24.2 82.4
Net result 14.8 18.8 57.9
Earnings per share, EUR 0.13 0.15 0.48
Net cash flow after investing activities 67.9 97.4 71.8
Equity ratio, % at period end 40.5 39.4 39.1
Gearing, % at period end 56 58 59
Personnel at period end 7,236 7,158 7,186
Average rates used, EUR/USD 1.32 1.31 1.28
*) Restated in accordance with revised IAS 19 standard (postemployment benefit plans).
**) 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:
"We had a satisfactory start to the year amid very cautious trading conditions in Western Europe, coupled with on-going customer destocking and late spring season start in North America with adverse impact especially on Ball Sports. We continued to make strong positive progress in our strategic growth areas, most notably Apparel, emerging markets expansion (Russia and China) and Business to Consumer. Fitness continued to improve with international sales growing at high double-digit rate. Precor quarterly profitability was down partly due to reporting changes with no full year impact. We continued to pursue scale and synergies in areas such as third party distributor consolidation, with adverse short term topline and profit impact, but with significant future upside potential and a relative quick payout.
The first quarter is typically a low quarter for Amer Sports, and we are still seeing a shift from pre-order based sales toward re-orders in several of our categories. Whilst the external conditions remain challenging we remain well in line with our growth and profitability improvement targets with a positive full year outlook. We continue seeing strong ongoing improvement across the company, and we are confident our strategies are working."
Interim Report January-March 2013
NET SALES AND EBIT
Amer Sports' net sales in January-March 2013 were €493.0 million (january-march 2012:489.8). Net sales increased by 2 percent in local currencies. The fastest growth took place in Apparel, up by 25 percent, in Fitness, up by 6 percent and in Sports Instruments, up by 4 percent. Sales in Winter Sports Equipment, Footwear, Cycling and Individual Ball Sports were at last year's level. Team Sports sales declined by 9 percent.
Net sales by business segment
EUR million 1-3/ 1-3/ Change Change % of sales 2012
2013 2012 % %*) 2013
Winter and Outdoor 266.5 256.5 4 5 54 1,221.2
Ball Sports 164.0 173.6 -6 -4 33 569.7
Fitness 62.5 59.7 5 6 13 273.1
Total 493.0 489.8 1 2 100 2,064.0
*) Change in local currencies
Geographic breakdown of net sales
EUR million 1-3/ 1-3/ Change Change % of sales 2012
2013 2012 % %*) 2013
EMEA 240.5 226.7 6 6 49 962.7
Americas 195.3 205.7 -5 -4 40 834.1
Asia Pacific 57.2 57.4 0 6 11 267.2
Total 493.0 489.8 1 2 100 2,064.0
*) Change in local currencies
Gross margin was 44.2 percent (44.2). Gross margin continued to improve in Apparel and Footwear, and was at same level in the other business areas compared to last year, except in Fitness, where it declined due to adaptation of new timing for vendor rebates recognition and due to a temporarily changed product mix.
Group EBIT was €26.4 million (29.6). In local currencies, increased sales volumes contributed approximately €4 million to EBIT. Operating expenses increased by approximately €10 million driven by sales and distribution costs in Apparel and Footwear. Other income and expenses and currencies impacted positively by approximately €3 million on EBIT.
EBIT excluding non-recurring items by business segment
EUR million 1-3/ 1-3/ Change 2012
2013 2012 %
Winter and Outdoor 14.2 10.7 33 113.8
Ball Sports 17.4 19.9 -13 28.0
Fitness -0.4 3.9 17.0
Headquarters*) -4.8 -4.9 -20.1
EBIT excluding non-recurring items 26.4 29.6 -11 138.7
Non-recurring items - - -24.8
EBIT total 26.4 29.6 -11 113.9
*) Headquarters segment consists of Group administration, shared services functions, other non-operational income and expenses and fair valuation of share-based compensations.
Net financial expenses were €6.7 million (5.4) including net interest expenses of €5.8 million (4.9). Net foreign exchange losses were €0.4 million (0.5). Earnings before taxes totaled €19.7 million (24.2) and taxes were €4.9 million (5.4). Earnings per share were €0.13 (0.15).
CASH FLOW AND FINANCING
Net cash flow after investing activities (free cash flow) was €67.9 million (97.4) in January-March. Working capital in total decreased by €51.8 million (89.4). Inventories decreased by €6.9 million (12.2), receivables by €93.6 million (129.4). Payables increased by 48.7 million (increase 52.2).
At the end of March, the Group's net debt amounted to €398.4 million (December 31, 2012: 434.3).
Interest-bearing liabilities amounted to €534.5 million (December 31, 2012: 576.8) consisting of short-term debt of €206.7 million and long-term debt of €327.8 million. The average interest rate on the Group's interest-bearing liabilities was 4.1 percent (December 31, 2012: 3.6 percent).
Short-term debt consists mainly of repayments of long-term loans of €92.4 million (December 31, 2012: 42.3) and commercial papers of €71.1 (151.6) which Amer Sports had issued in the Finnish market. The total size of the commercial paper program is €500 million.
Cash and cash equivalents totaled €136.1 million (December 31, 2012: 142.5).
Amer Sports had not used any of its €240 million committed revolving credit facilities at the end of the review period.
The equity ratio at the end of the March was 40.5 percent (December 31, 2012: 39.1 percent) and gearing was 56 percent (December 31, 2012: 59 percent).
CAPITAL EXPENDITURE AND INVESTMENTS
The Group's capital expenditure totaled €7.2 (10.9) million. Depreciation totaled €11.1 million (9.7). Capital expenditure for the whole year is expected to be approximately €50 million (49.2).BUSINESS
SEGMENT REVIEWS WINTER AND OUTDOOR
EUR million 1-3/2013 1-3/2012 Change Change 2012
% %*)
Net sales
Winter Sports Equipment 42.8 43.7 -2 0 425.0
Footwear 102.3 104.1 -2 0 314.4
Apparel 63.1 51.2 23 25 248.6
Cycling 36.6 36.3 1 1 129.0
Sports Instruments 21.7 21.2 2 4 104.2
Net sales, total 266.5 256.5 4 5 1,221.2
EBIT excluding non- 14.2 10.7 33 113.8
recurring items
EBIT % excluding non- 5.3 4.2 9.3
recurring items
Non-recurring items - - -18.4
EBIT total 14.2 10.7 33 95.4
Personnel at period end 4,625 4,593 1 4,639
*) Change in local currencies Winter and Outdoor's net sales in the review period were EUR 266.5 million (256.5), an increase of 5% in local currencies.
EUR million 1-3/2013 1-3/2012 Change Change 2012
% %*)
EMEA 182.1 171.4 6 6 774.4
Americas 54.0 53.6 1 2 289.5
Asia Pacific 30.4 31.5 -3 2 157.3
Total 266.5 256.5 4 5 1,221.2
*) Change in local currencies EBIT was EUR 14.2 million (10.7). Increased sales volumes improved EBIT by approximately EUR 6 million and higher gross margins contributed approximately EUR 4 million. Operating expenses increased by approximately EUR 6 million (all in local currencies).
Winter Sports Equipment
Winter Sports Equipment's net sales were EUR 42.8 million (43.7), and were at last year's level in local currencies. Net sales of alpine ski equipment decreased while sales of cross country ski equipment and snowboards increased. Net sales increased in EMEA by 2%, and decreased in the Americas by 2% and Asia Pacific by 4%.
Footwear
Footwear's net sales were EUR 102.3 million (104.1), and were at last year's level in local currencies. Sales of trail running and outdoor performance products increased in North America, Russia and Japan, and decreased in Central Europe.
Apparel
Apparel's net sales were EUR 63.1 million (51.2), an increase of 25% in local currencies. Growth was generated by both main brands, Salomon and Arc'teryx, and occurred in all geographical regions.
Cycling
Cycling's net sales were EUR 36.6 million (36.3), and were at last year's level in local currencies. Sales of cycling helmets and footwear continued to grow.
Sports Instruments
Sports Instruments' net sales were EUR 21.7 million (21.2), an increase of 4% in local currencies. The sales increase in outdoor instruments was driven by the Suunto GPS watch and dive instruments range.
BALL SPORTS
EUR million 1-3/2013 1-3/2012 Change Change 2012
% %*)
Net sales
Individual Ball Sports 95.5 97.6 -2 -1 318.8
Team Sports 68.5 76.0 -10 -9 250.9
Net sales, total 164.0 173.6 -6 -4 569.7
EBIT excluding non- 17.4 19.9 -13 28.0
recurring items
EBIT % excluding non- 10.6 11.5 4.9
recurring items
Non-recurring items - - -5.5
EBIT total 17.4 19.9 -13 22.5
Personnel at period end 1,614 1,675 -4 1,592
*) Change in local currencies Ball Sports' net sales in the review period were EUR 164.0 million (173.6), a decrease of 4% in local currencies. The decrease was due to continued industry-wide trade destocking in baseball bats, and late start of the spring season.
EUR million 1-3/2013 1-3/2012 Change Change 2012
% %*)
EMEA 42.0 41.9 0 1 118.0
Americas 101.2 110.3 -8 -7 370.1
Asia Pacific 20.8 21.4 -3 3 81.6
Total 164.0 173.6 -6 -4 569.7
*) Change in local currencies
EBIT was EUR 17.4 million (19.9), impacted by lower
sales volumes. Operating expenses remained at last year's level (all in
local currencies). Individual Ball Sports
Individual Ball Sports' net sales were EUR 95.5 million (97.6), and were at last year's level in local currencies. Sales of tennis rackets were negatively influenced by a change in cadence of product launches from the first quarter of the year to the fourth quarter to better meet market demands, and late start of the spring season. Golf's sales increased driven by new product launches and expanded distribution.
Team Sports
Team Sports' net sales were EUR 68.5 million (76.0), a decrease of 9% in local currencies. As a result of the industry-wide baseball bat destocking, sales of DeMarini baseball bats declined by 33%.
FITNESS
EUR million 1-3/2013 1-3/2012 Change Change 2012
% %*)
Net sales 62.5 59.7 5 6 273.1
EBIT excluding non- -0.4 3.9 17.0
recurring items
EBIT % excluding non- 6.5 6.2
recurring items
Non-recurring items - - -0.1
EBIT total -0.4 3.9 16.9
Personnel at period end 848 784 8 821
*) Change in local currencies
Fitness' net sales in the review period were EUR 62.5
million (59.7), an increase of 6% in local currencies. The commercial
business (clubs and institutions) sales were up by 5% and consumer
business (home use) by 10% in local currencies. EUR million 1-3/2013 1-3/2012 Change Change 2012
% %*)
EMEA 16.4 13.4 22 24 70.3
Americas 40.1 41.8 -4 -3 174.5
Asia Pacific 6.0 4.5 33 41 28.3
Total 62.5 59.7 5 6 273.1
*) Change in local currencies
EBIT was EUR -0.4 million (3.9) mainly due to lower
gross margin which declined due to adaptation of new timing for vendor
rebates recognition and more strength equipment based sales mix.
Increased sales volumes contributed approximately EUR 1 million to EBIT,
offset by higher sales and distribution expenses (all in local
currencies).
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