Earnings Release • Aug 4, 2011
Earnings Release
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Amer Sports Corporation Interim Report January-June 2011
Amer Sports Corporation
INTERIM REPORT
August 4, 2011 at 1:00 pm
Amer Sports Corporation Interim Report January-June 2011: Currency-neutral
growth continued in the second quarter, with improved profitability
APRIL-JUNE 2011
* Net sales totaled EUR 315.6 million (April-June 2010: EUR 317.5 million). In
local currencies, comparable net sales increased by 6%.
* EBIT was EUR -10.9 million (-16.9).
* Earnings per share were EUR -0.12 (-0.15).
* Net cash flow after investing activities was EUR -67.1 million (-10.0).
* Next season pre-orders in Winter Sports Equipment are up by approximately
5% compared to last year. In Footwear, fall/winter pre-orders are up by
approximately 30% and in Apparel by 23% compared to 2010.
JANUARY-JUNE 2011
* Net sales were EUR 764.7 million (January-June 2010: EUR 690.1 million). In
local currencies, comparable net sales increased by 9%.
* EBIT was EUR 14.8 million (-7.4).
* Earnings per share were EUR 0.01 (-0.16).
* Net cash flow after investing activities was EUR 20.0 million (83.9).
* Gearing was 45% (December 31, 2010: 37%).
OUTLOOK AND GUIDANCE 2011
Amer Sports' strategic development programs continue to contribute positively to
the Group performance in 2011 and the company will continue to invest into
executing the new strategy and sustaining profitable growth. In Footwear and
Apparel, fall/winter pre-orders are indicating that the strong momentum will
continue. In Winter Sports Equipment, solid improvement in pre-orders together
with operational efficiency measures is expected to have a positive impact on
the full-year profitability.
In 2011, Amer Sports expects its full-year net sales in local currencies to grow
at a similar rate as in the first half of the year and EBIT margin excluding
non-recurring items to improve by approximately one percentage point from 2010.
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
Net sales 315.6 317.5 -1 6 764.7 690.1 11 9 1,740.4
Gross profit 133.5 135.7 -2 328.1 294.9 11 742.0
Gross profit % 42.3 42.7 42.9 42.7 42.6
EBIT excluding non-
recurring items -10.9 -16.9 14.8 -7.4 107.9
EBIT % excluding non-
recurring items -3.5 -5.3 1.9 -1.1 6.2
Non-recurring items**) - - - - -11.1
EBIT total -10.9 -16.9 14.8 -7.4 96.8
EBIT % -3.5 -5.3 1.9 -1.1 5.6
Financing income and
expenses -4.8 -4.3 -9.1 -13.4 -21.3
Earnings before taxes -15.7 -21.2 5.7 -20.8 75.5
Net result -12.6 -16.9 4.5 -16.6 68.9
Earnings per share, EUR -0.12 -0.15 0.01 -0.16 0.52
Net cash flow after investing
activities -67.1 -10.0 20.0 83.9 50.1
Equity ratio, % at
period end 47.8 46.2 47.8
Gearing, % at period end 45 34 37
Personnel at period end 6,985 6,448 6,645
Average rates used,
EUR/USD 1.44 1.28 1.40 1.33 1.33
*) Change in local currencies
**) 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
material impact on EBIT.
HEIKKI TAKALA, PRESIDENT AND CEO:"The second quarter is typically a low season for Amer Sports as focus is mostly
on order intake. The pre-orders for the fall/winter season are strong and our
full-year outlook is solid.
Our 6% currency-neutral sales growth in the second quarter was broad-based with
highest growth rates in Footwear, Apparel and Cycling. Ball Sports was
challenging, with Team Sports growth offset by Racquet Sports and Golf which
were adversely impacted by the poor spring weather conditions especially in
North-America, and tennis further impacted by the disaster in Japan. Our Fitness
business continued to strengthen: sales were up and profitability continued to
improve.
The overall higher order book together with earlier production of winter sports
equipment to ensure improved customer service resulted in a lower cash flow in
the second quarter compared to last year.
Looking forward, raw material cost increases remain a challenge and we are
continuing our mitigation actions to safeguard the 2010 gross margin level. We
continue executing our strategic improvement programs, and we will further
invest to ensure we have strong building blocks in place for a profitable future
growth. Key focus areas remain creation of the Category Based Operations with
focus on softgoods, Go to Market improvement, Geographic expansion, Customer
Service, and Direct to Consumer."
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 Investor Relations,
tel. +358 9 7257 8233
TELEPHONE CONFERENCE
An English-language telephone conference call for investors and analysts will be
held today, August 4, 2011 at 3:00 pm Finnish time. To participate in the
conference call, please call +44 (0)20 7136 2050 (UK/international dial-in
number), confirmation code 4084818. The conference can also be followed from a
direct transmission on the internet, at www.amersports.com. A recorded version
and transcript will later be available at the same address. The replay number is
+44 (0)20 7111 1244, and the access code 4084818#.
THIRD QUARTER INTERIM REPORT
Amer Sports will publish its third quarter interim report on Thursday, October
27, 2011 at approximately 1:00 pm Finnish time.
CAPITAL MARKETS DAY
Amer Sports is hosting a Capital Markets Day for analysts and portfolio managers
on September 1, 2011 in Helsinki, Finland.
INTERIM REPORT
NET SALES AND EBIT APRIL-JUNE 2011
Amer Sports' net sales in April-June 2011 totaled EUR 315.6 million (April-June
2010: EUR 317.5 million). Comparable net sales increased by 6% in local
currencies. Except for Racquet Sports and Golf, all business areas exceeded the
Group's average growth rate of 6%. In local currencies, EMEA increased by 10%
and the Americas by 7%, and Asia Pacific decreased by 7%.
Net sales by business segment
4-6/ 4-6/ Change Change % of sales % of sales
EUR million 2011 2010 % %*) 4-6/2011 4-6/2010 2010
Winter and Outdoor 133.4 116.5 15 18 42 37 1,015.0
Ball Sports 136.3 153.9 -11 -4 43 48 520.6
*) In local currencies
Geographic breakdown of net sales
4-6/ 4-6/ Change Change % of sales % of sales
EUR million 2011 2010 % %*) 4-6/2011 4-6/2010 2010
Americas 146.5 153.2 -4 7 46 48 687.9
EMEA 129.7 120.8 7 10 41 38 845.7
*) In local currencies
Group EBIT was EUR -10.9 million (-16.9). In local currencies, increased sales
volumes contributed EUR 6.3 million to EBIT growth, partly offset by EUR -1.9
million due to lower gross margins. The gross margin declined to 42.3% from
42.7% in April-June 2010 due to Racquet Sports. Operating expenses decreased by
EUR 2.4 million.
EBIT by business segment
4-6/ 4-6/ Change
EUR million 2011 2010 % 2010
Winter and Outdoor -15.1 -24.2 96.9
Ball Sports 9.1 17.0 -46 32.2
Fitness -0.3 -3.7 2.7
Net financial expenses totaled EUR 4.8 million (4.3) including net interest
expenses of EUR 4.8 million (3.9). Net foreign exchange loss totaled EUR 0.5
million (0.4 losses). Earnings before taxes totaled EUR -15.7 million (-21.2)
and taxes were positive EUR 3.1 million (positive 4.3). Earnings per share were
EUR -0.12 (-0.15).
NET SALES AND EBIT JANUARY-JUNE 2011
Amer Sports' net sales in January-June 2011 were EUR 764.7 million (January-June
2010: EUR 690.1 million). Comparable net sales increased by 9% in local
currencies, particularly due to sales growth in Footwear, Apparel, Team Sports,
and Fitness. In local currencies, EMEA increased by 13% and the Americas by 8%,
and Asia Pacific declined by 2% due to the aftermath of the earthquake and
tsunami in Japan.
Net sales by business segment
1-6/ 1-6/ Change Change % of sales % of sales
EUR million 2011 2010 % %*) 1-6/2011 1-6/2010 2010
Winter and Outdoor 366.9 298.2 23 19 48 43 1,015.0
Ball Sports 295.3 299.3 -1 -1 39 43 520.6
*) In local currencies
Geographic breakdown of net sales
1-6/ 1-6/ Change Change % of sales % of sales
EUR million 2011 2010 % %*) 1-6/2011 1-6/2010 2010
Americas 332.9 311.5 7 8 44 45 687.9
EMEA 343.8 293.0 17 13 45 43 845.7
*) In local currencies
Group EBIT was EUR 14.8 million (-7.4). In local currencies, increased sales
volumes contributed EUR 35.1 million to EBIT growth, while higher gross margins
contributed EUR 1.0 million. Operating expenses increased by EUR 17.8 million,
driven by increased sales and distribution costs. Operating expenses as a
percentage of net sales were 41.7% (44.7%).
EBIT by business segment
1-6/ 1-6/ Change
EUR million 2011 2010 % 2010
Winter and Outdoor -5.8 -22.5 96.9
Ball Sports 26.8 31.4 -15 32.2
Fitness 3.0 -4.4 2.7
Net financial expenses totaled EUR 9.1 million (13.4) including net interest
expenses of EUR 9.2 million (7.1). Net foreign exchange gains totaled EUR 0.1
million (6.3 losses). Earnings before taxes totaled EUR 5.7 million (-20.8) and
taxes totaled EUR -1.2 million (positive 4.2). Earnings per share were EUR 0.01
(-0.16).
CASH FLOW AND FINANCING
Net cash flow after investing activities (free cash flow) in January-June was
EUR 20.0 million (83.9). The lower cash flow is mainly due to the overall higher
order book together with earlier production of winter sports equipment to ensure
improved customer service. Working capital decreased by EUR 22.5 million which
is EUR 63.9 million less than a year ago.
Net cash flow from investing activities was EUR -13.4 million (-10.3). In March
the company paid dividend of EUR 36.4 million (19.5), hybrid interest of EUR
7.2 million (7.2) and purchased own shares by EUR 9.2 million (0.0).
At the end of June, the Group's net debt amounted to EUR 324.8 million (December
31, 2010: 294.8).
Interest-bearing liabilities amounted to EUR 370.8 million (December
31, 2010: 379.5) and consisted of short-term debt of EUR 44.1 million and long-
term debt of EUR 326.7 million. The average interest rate on the Group's
interest-bearing liabilities was 4.4% (4.4%).
Short-term debt includes repayments of long-term loans totaling EUR 20.7 million
(December 31, 2010: 97.0). Amer Sports has a commercial paper program of EUR
500 million. At the end of the review period, Amer Sports had issued EUR 21.9
million commercial papers in the Finnish markets.
Cash and cash equivalents totaled EUR 46.0 million (December 31, 2010: 84.7).
The loan syndicate signed in 2005 consists of a revolving credit facility and a
term loan of USD 100 million. In June 2011, Amer Sports cut the original EUR
325 million revolving credit facility down to EUR 225 million. Amer Sports had
not used any of the revolving credit facility at the end of the review period.
In April, Amer Sports Corporation issued a SEK 500 million floating rate bond
with a loan period of five years targeted at Nordic institutional investors. The
bond is listed on the NASDAQ OMX Helsinki Ltd stock exchange.
The equity ratio at the end of June was 47.8% (December 31, 2010: 47.8%) and
gearing was 45% (December 31, 2010: 37%).
CAPITAL EXPENDITURE
Capital expenditure totaled EUR 19.0 million (11.5). Depreciation totaled EUR
17.7 million (18.2). The full-year capital expenditure is expected to be
approximately EUR 50 million (39.9). The increase is mainly due to investments
in the operational efficiency program in Winter Sports Equipment.
BUSINESS SEGMENT REVIEWS
WINTER AND OUTDOOR
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2011 2010 % %*) 2011 2010 % %*) 2010
Net sales
Winter Sports
Equipment 11.1 10.2 9 3 58.0 52.5 10 5 438.4
Footwear 54.9 42.7 29 32 146.0 105.3 39 33 219.6
Apparel 17.4 14.9 17 27 56.3 43.3 30 27 156.6
Cycling 27.9 25.1 11 17 62.3 54.4 15 12 106.4
Sports Instruments 22.1 23.6 -6 -4 44.3 42.7 4 1 94.0
Net sales, total 133.4 116.5 15 18 366.9 298.2 23 19 1,015.0
EBIT excluding
non-recurring items -15.1 -24.2 -5.8 -22.5 96.9
EBIT % excluding
non-recurring items -11.3 -20.8 -1.6 -7.5 9.5
Non-recurring items - - - - -10.0
EBIT total -15.1 -24.2 -5.8 -22.5 86.9
Personnel, period end 4,507 4,125 9 4,293
*) Change in local currencies
In April-June, Winter and Outdoor's net sales totaled EUR 133.4 million (116.5),
representing an increase of 18% in local currencies. Net sales growth was driven
by Footwear, Apparel, and Cycling.
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
Americas 29.9 25.0 20 30 73.9 56.4 31 29 211.3
EMEA 85.7 74.1 16 18 249.2 203.0 23 18 687.2
*) Change in local currencies
In April-June, EBIT was EUR -15.1 million (-24.2) driven by increased sales
volumes.
Winter Sports Equipment
In April-June, Winter Sports Equipment net sales totaled EUR 11.1 million
(10.2), representing an increase of 3% 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 up by approximately
5% with highest growth in cross-country skiing.
Footwear
In April-June, Footwear net sales totaled EUR 54.9 million (42.7), representing
an increase of 32% in local currencies. Growth came from hiking and trail
running in all geographical regions. Fall/winter pre-orders are up by
approximately 30%.
Apparel
In April-June, Apparel net sales totaled EUR 17.4 million (14.9), representing
an increase of 27% in local currencies. Fall/winter pre-orders are up by
approximately 23%.
Cycling
In April-June, Cycling net sales totaled EUR 27.9 million (25.1), an increase of
17% in local currencies. The strongest growth was in wheels and cycling shoes.
Sales were up in all geographical regions.
Sports Instruments
In April-June, Sports Instruments net sales totaled EUR 22.1 million (23.6).
Underlying growth was 10% (excluding divested businesses). Sales of outdoor
instruments continued growing at a double-digit rate.
In line with Suunto's strategy to focus on outdoor and diving instruments, Amer
Sports sold TackTick Ltd to Raymarine, a subsidiary of the Flir Group, in June
2011. TackTick offers wireless solar powered instruments for the marine market.
The divestment had no material impact on Amer Sports financial result.
BALL SPORTS
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2011 2010 % %*) 2011 2010 % %*) 2010
Net sales
Racquet Sports 58.5 70.9 -17 -12 125.6 135.2 -7 -8 232.5
Team Sports 54.5 55.7 -2 8 125.8 116.5 8 9 212.1
Golf 23.3 27.3 -15 -10 43.9 47.6 -8 -7 76.0
Net sales, total 136.3 153.9 -11 -4 295.3 299.3 -1 -1 520.6
EBIT excluding
non-recurring items 9.1 17.0 -46 26.8 31.4 -15 32.2
EBIT % excluding
non-recurring items 6.7 11.0 9.1 10.5 6.2
Non-recurring items - - - - -2.7
EBIT total 9.1 17.0 -46 26.8 31.4 -15 29.5
Personnel, period end 1,686 1,581 7 1,590
*) Change in local currencies
In April-June, Ball Sports' net sales totaled EUR 136.3 million (153.9),
representing a decrease of 4% in local currencies. The decline was mainly driven
by the soft tennis market as well as the aftermath of the earthquake and tsunami
in Japan negatively impacting Racquet Sports sales. Team Sports continued its
good performance and net sales in local currencies increased by 8%.
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
Americas 85.8 96.9 -11 -2 188.2 189.8 -1 1 334.4
EMEA 33.0 36.1 -9 -7 72.3 71.1 2 -1 114.0
*) Change in local currencies
EBIT was EUR 9.1 million in April-June (17.0). The decline was due to lower
sales volumes, impact EUR -3.2 million, and lower gross margins, impact EUR -4.1
million. The gross margins were negatively impacted by the unfavorable
development in Racquet Sports, especially in Japan.
Racquet Sports
In April-June, Racquet Sports net sales totaled EUR 58.5 million (70.9),
representing a decrease of 12% in local currencies. Racquet Sports was adversely
impacted by the overall soft tennis market and by the earthquake and tsunami in
Japan.
Team Sports
Team Sports net sales in April-June totaled EUR 54.5 million (55.7), an increase
of 8% in local currencies. The growth in Team Sports was driven by the two
largest product categories for the quarter with bats increasing by 36% and
American footballs by 6%.
Golf
In April-June, Golf net sales totaled EUR 23.3 million (27.3), a decrease of
10% in local currencies. The golf market conditions remained challenging in the
Americas as a result of declining rounds played driven by poor weather
conditions.
FITNESS
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
EUR million 2011 2010 % %*) 2011 2010 % %*) 2010
Net sales 45.9 47.1 -3 9 102.5 92.6 11 12 204.8
EBIT excluding
non-recurring items -0.3 -3.7 3.0 -4.4 2.7
EBIT % excluding
non-recurring items -0.7 -7.9 2.9 -4.8 1.3
Non-recurring items - - - - -2.3
EBIT total -0.3 -3.7 3.0 -4.4 0.4
Personnel, period end 720 667 8 691
*) Change in local currencies
In April-June, Fitness' net sales totaled EUR 45.9 million (47.1), an increase
of 9% in local currencies.
4-6/ 4-6/ Ch Ch 1-6/ 1-6/ Ch Ch
Americas 30.8 31.3 -2 14 70.8 65.3 8 12 142.2
EMEA 11.0 10.6 4 9 22.3 18.9 18 16 44.5
*) Change in local currencies
The commercial business (clubs and institutions) sales were up by 11% in April-
June. In the North American fitness market, the commercial business started to
show some early signs of recovery during 2010 and the market continued to
improve through the first half of 2011.
Fitness' EBIT was EUR -0.3 million (-3.7) in April-June. In local currencies,
increased sales volumes contributed EUR 0.9 million to EBIT growth while higher
gross margins contributed EUR 1.8 million.
PERSONNEL
At the end of June 2011, Group employees totaled 6,985 (December
31, 2010: 6,645). The number of employees increased mainly due to strengthening
the sales and distribution.
June 30, June 30, Change Dec 31,
Winter and Outdoor 4,507 4,125 9 4,293
Ball Sports 1,686 1,581 7 1,590
Fitness 720 667 8 691
June 30, June 30, Change Dec 31,
EMEA 4,204 3,783 11 3,903
Americas 2,233 2,157 4 2,214
SHARES AND SHAREHOLDERS
The company's share capital totaled EUR 292,182,204 on June 30, 2011 and the
number of shares was 121,517,285.
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 18 months from the decision of the Annual General Meeting.
The Annual General Meeting held on March 10, 2010 authorized the Board of
Directors to decide on the repurchase of a maximum of 7,000,000 of the company's
own shares. The repurchase authorization is valid for 18 months from the date of
the decision by the Annual General Meeting.
In the Annual General meeting in 2010, the Board of Directors was also
authorized to decide on issuing new shares and/or conveying the company's own
shares held by the company as follows: the Board of Directors is entitled to
decide on issuing a maximum of 7,000,000 new shares or on conveying a maximum of
7,000,000 of the company's own shares held by the company. The Board of
Directors decides on all the conditions of the issuance of shares. The issuance
of shares may be carried out in deviation from the shareholders' pre-emptive
rights (directed issue). The authorization includes the possibility to issue own
shares to the company for free. The authorization to issue shares and to convey
the company's own shares is valid for two (2) years from the date of the
decision of the Annual General Meeting.
Apart from the above, the Board of Directors has no current authorization to
issue shares, convertible bonds, or warrant programs.
Trading in shares
In January-June, a total of 36.5 million (26.8) Amer Sports shares with a value
totaling EUR 373.3 million (217.4) were traded on the NASDAQ OMX Helsinki Ltd
stock exchange. The average daily trading volume in January-June 2011 was
294,548 shares (217,864).
The closing price of the Amer Sports Corporation share on the NASDAQ OMX
Helsinki Ltd stock exchange on June 30, 2011 was EUR 11.46 (7.76). The Amer
Sports Corporation shares registered a high of EUR 11.97 (9.10) and a low of EUR
8.43 (6.82) during the review period. The average share price was EUR 10.22
(8.11). On June 30, 2011, excluding own shares, the company had a market
capitalization of EUR 1,381.0 million (940.3).
Amer Sports Corporation had 16,429 registered shareholders (13,421) at the end
of June, 2011. Outside Finland, ownership and nominee registrations represented
49.8% (50.1%) of the company's shares.
Own shares
Based on the authorization given by the AGM on March 10, 2010, the Amer Sports
Board of Directors decided on February 15, 2011 to initiate a share repurchase
program in order to implement a share-based incentive plan for 2011 and 2012 for
the Group's key personnel. Repurchases on the NASDAQ OMX Helsinki Ltd stock
exchange began on February 23, 2011 and ended on March 24, 2011. One (1) million
shares were acquired during this period.
Purchase price Purchase price
Total value, (on average), (high and low),
Feb. 23-March 24, 2011 1,000,000 9,212,051.46 9.21 9.81 and 8.43
On March 15, 2011, a total of 330,838 Amer Sports shares were transferred 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 International Oy.
On June 30, 2011, Amer Sports International Oy held a total of 12,125 Amer
Sports Corporation shares, while Amer Sports Corporation held a total of
1,000,000 Amer Sports Corporation shares. The number of own shares held
corresponds to 0.83% of all Amer Sports Corporation shares.
DECISIONS BY THE AMER SPORTS CORPORATION ANNUAL GENERAL MEETING
Documentation and press releases relating to the resolutions approved by the
Amer Sports Corporation Annual General Meeting held on March 10, 2011 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 labor and raw material price inflation, especially
in China; with Amer Sports' ability to manufacture, source and deliver products
on a timely basis; and with the development of consumer demand in North America,
Europe and Japan. The effects of the earthquake and tsunami in Japan are
estimated to have a negative impact on sales.
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 2011
Amer Sports' strategic development programs continue to contribute positively to
the Group performance in 2011 and the company will continue to invest into
executing the new strategy and sustaining profitable growth. In Footwear and
Apparel, fall/winter pre-orders are indicating that the strong momentum will
continue. In Winter Sports Equipment, solid improvement in pre-orders together
with operational efficiency measures is expected to have a positive impact on
the full-year profitability.
In 2011, Amer Sports expects its full-year net sales in local currencies to grow
at a similar rate as in the first half of the year and EBIT margin excluding
non-recurring items to improve by approximately one percentage point from 2010.
Outlook given in the Interim Report January-March 2011 on April 28
Amer Sports' strategic development programs continue to contribute positively to
the Group performance in 2011 and the company will continue investing into
executing the new strategy and sustaining the growth. In Footwear and Apparel,
fall/winter pre-orders are indicating that the strong momentum will continue. In
Winter Sports Equipment, Amer Sports' operational efficiency measures are
expected to have a positive impact on the full-year profitability. The sporting
goods market is estimated to continue to grow modestly in 2011, with sports
specific and regional differences.
In 2011, Amer Sports expects its net sales to continue to clearly exceed the
Group's long-term financial target of 5% annual currency-neutral growth. EBIT
margin excluding non-recurring items is expected to improve from the level of
2010 (2010 net sales EUR 1,740 million, EBIT margin excluding non-recurring
items 6.2%).
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
2011 2010 % 2011 2010 % 2010
NET SALES 315.6 317.5 -1 764.7 690.1 11 1,740.4
GROSS PROFIT 133.5 135.7 -2 328.1 294.9 11 742.0
License income 2.1 2.1 4.4 4.4 9.5
Other operating income 0.9 1.4 1.4 2.2 12.4
R&D expenses -14.0 -14.5 -29.2 -28.2 -57.4
Selling and marketing expenses -103.1 -104.6 -220.1 -207.3 -443.1
Administrative and other
expenses -30.3 -37.0 -69.8 -73.4 -166.6
EARNINGS BEFORE
INTEREST AND TAXES -10.9 -16.9 14.8 -7.4 96.8
% of net sales 5.6
EARNINGS BEFORE TAXES -15.7 -21.2 5.7 -20.8 75.5
Attributable to:
Equity holders of the parent
company -12.6 -16.9 4.5 -16.6 68.8
Non-controlling interests 0.0 0.0 0.0 0.0 0.1
Earnings per share, EUR -0.12 -0.15 0.01 -0.16 0.52
Earnings per share, diluted,
EUR -0.12 -0.15 0.01 -0.16 0.52
Adjusted average number of
shares in issue less own
shares, million 120.8 121.2 121.2
Adjusted average number of
shares in issue less own
shares,
diluted, million 120.8 121.2 121.2
Equity per share, EUR 5.93 6.14 6.50
ROCE, % *) 12.2 7.6 10.0
ROE, % 1.2 -4.5 9.0
Average rates used:
EUR 1.00 = USD 1.4399 1.2833 1.4030 1.3340 1.3289
*) 12 months' rolling average
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
4-6/ 4-6/ 1-6/ 1-6/
2011 2010 2011 2010 2010
Net result -12.6 -16.9 4.5 -16.6 68.9
Other comprehensive income
Translation differences -8.2 23.1 -26.0 42.6 28.7
Cash flow hedges -2.5 5.4 -6.7 9.7 -0.2
Income tax related to
cash flow hedges 0.6 -1.4 1.7 -2.5 0.0
Other comprehensive income,
net of tax -10.1 27.1 -31.0 49.8 28.5
Total comprehensive income attributable to:
Equity holders of the parent
company -22.7 10.2 -26.5 33.2 97.3
Non-controlling interests 0.0 0.0 0.0 0.0 0.1
NET SALES BY BUSINESS SEGMENT
4-6/ 4-6/ Change 1-6/ 1-6/ Change
2011 2010 % 2011 2010 % 2010
Winter and Outdoor 133.4 116.5 15 366.9 298.2 23 1,015.0
Ball Sports 136.3 153.9 -11 295.3 299.3 -1 520.6
EBIT BY BUSINESS SEGMENT
4-6/ 4-6/ Change 1-6/ 1-6/ Change
2011 2010 % 2011 2010 % 2010
Winter and Outdoor -15.1 -24.2 -5.8 -22.5 86.9
Ball Sports 9.1 17.0 -46 26.8 31.4 -15 29.5
Fitness -0.3 -3.7 3.0 -4.4 0.4
GEOGRAPHIC BREAKDOWN OF NET SALES
4-6/ 4-6/ Change 1-6/ 1-6/ Change
2011 2010 % 2011 2010 % 2010
Americas 146.5 153.2 -4 332.9 311.5 7 687.9
EMEA 129.7 120.8 7 343.8 293.0 17 845.7
CONSOLIDATED CASH FLOW STATEMENT
Note 4-6/2011 4-6/2010 1-6/2011 1-6/2010 2010
Earnings before interest and
taxes -10.9 -16.9 14.8 -7.4 96.8
Adjustments to cash flow from
operating activities and
depreciation 13.0 9.4 18.5 18.4 28.3
Cash flow from operating
activities
before financing items and taxes -48.8 -4.4 55.8 97.4 106.3
Interest paid and received -10.9 -6.9 -12.1 -7.5 -14.3
Net cash flow from operating
activities -62.8 -4.5 33.4 94.2 80.1
Sold operations 5.3 - 5.3 - -
Capital expenditure on non-
current
tangible and intangible assets -9.7 -6.4 -19.0 -11.5 -39.9
Proceeds from sale of tangible
non-
current assets 0.1 0.9 0.3 1.2 9.9
Net cash flow from investing
activities -4.3 -5.5 -13.4 -10.3 -30.0
Net cash flow after investing
activities
(free cash flow) -67.1 -10.0 20.0 83.9 50.1
Repurchase of own shares - - -9.2 - -
Interest on hybrid bond - - -7.2 -7.2 -7.2
Dividends paid 4 - - -36.4 -19.5 -19.5
Change in debt and other
financing
Items -5.2 143.1 -5.0 3.4 -64.3
Net cash flow from financing
activities -5.2 143.1 -57.8 -23.3 -91.0
Cash and cash equivalents on
April 1/January 1 118.1 50.7 84.7 121.6 121.6
Translation differences 0.2 2.1 -0.9 3.7 4.0
Change in cash and cash
equivalents -72.3 133.1 -37.8 60.6 -40.9
Cash and cash equivalents on
June 30/December 31 46.0 185.9 46.0 185.9 84.7
CONSOLIDATED BALANCE SHEET
June June December
Note 30, 2011 30, 2010 31, 2010
Goodwill 272.6 302.5 286.7
Other intangible non-current assets 205.7 213.1 214.2
Tangible non-current assets 140.5 139.9 140.2
Other non-current assets 99.6 72.6 100.5
Inventories and work in progress 389.4 328.7 302.1
Receivables 347.4 371.7 525.4
Shareholders' equity 717.1 746.4 790.2
Long-term interest-bearing liabilities 326.7 317.2 278.7
Other long-term liabilities 18.4 18.6 19.6
Current interest-bearing liabilities 44.1 122.9 100.8
Other current liabilities 367.3 379.9 434.6
Equity ratio, % 47.8 46.2 47.8
Gearing, % 45 34 37
EUR 1.00 = USD 1.4488 1.2294 1.3362
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,
2010 292.2 12.1 -5.6 -63.0 -5.4 151.5 60.0 290.9 732.7
Other
compre-
hensive
income:
Translation
differences 42.6 42.6
Cash flow
hedges 9.7 9.7
Income tax
related to
cash flow
hedges -2.5 -2.5
Net result -16.6 -16.6
Total
comp-
rehensive
income 42.6 7.2 -16.6 33.2
Transact-
ions with
owners:
Dividend
distribution 4 -19.4 -19.4
Interest on
hybrid
bond -2.6 -2.6
Balance at
June 30,
2010 292.2 12.1 -5.6 -20.4 1.8 151.5 60.0 252.3 743.9
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
Dividend
distribution 4 -36.3 -36.3
Interest on
hybrid
bond -7.2 -7.2
Balance at
June 30,
2011 292.2 12.1 -9.4 -60.3 -10.6 151.5 60.0 279.1 714.6
Total
Non-controlling shareholders'
Balance at
Jan. 1, 2010 2.6 735.3
Other
compre-
hensive
income:
Translation
differences 42.6
Cash flow
hedges 9.7
Income tax
related to
cash flow
hedges -2.5
Net result -16.6
Total
comp-
rehensive
income 33.2
Transact-
ions with
owners:
Dividend
distribution 4 -0.1 -19.5
Interest on
hybrid
bond -2.6
Balance at
June 30, 2010 2.5 746.4
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
Dividend
distribution 4 -0.1 -36.4
Interest on
hybrid
bond -7.2
Balance at
June 30, 2011 2.5 717.1
QUARTERLY BREAKDOWN OF NET SALES AND EBIT
Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ Q4/ Q3/
Winter and Outdoor 133.4 233.5 416.5 300.3 116.5 181.7 329.2 262.4
Ball Sports 136.3 159.0 107.3 114.0 153.9 145.4 94.7 103.4
Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ Q4/ Q3/
Winter and Outdoor -15.1 9.3 51.2 58.2 -24.2 1.7 42.5 44.1
Ball Sports 9.1 17.7 -5.4 3.5 17.0 14.4 2.2 2.4
Fitness -0.3 3.3 2.0 2.8 -3.7 -0.7 -0.5 -1.4
THE NOTES TO THE FINANCIAL STATEMENTS
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 2011:
The following new standards, interpretations and amendments have been adopted
when applicable: IFRS 1 (amendment), IAS 24 (amendment), IAS 32 (amendment),
IFRIC 14 (amendment) and IFRIC 19 and the annual improvements. The amendments or
interpretations did not have any material impact on the consolidated financial
statements.
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
1-6/2011
Winter and Outdoor 366.9 -5.8 742.5
Ball Sports 295.3 26.8 363.3
1-6/2010
Winter and Outdoor 298.2 -22.5 662.0
Ball Sports 299.3 31.4 404.2
2010
Winter and Outdoor 1,015.0 86.9 848.7
Ball Sports 520.6 29.5 365.8
*) Earnings before interest and taxes include income and expenses of corporate
headquarters.
GEOGRAPHIC BREAKDOWN OF NET SALES
1-6/ 1-6/
2011 2010 2010
Americas 332.9 311.5 687.9
EMEA 343.8 293.0 845.7
Nominal value
Foreign exchange forward contracts 664.0 578.0 678.1
Interest rate swaps 139.0 297.7 169.8
Cross currency swaps 55.6 - -
Fair value
Foreign exchange forward contracts -7.9 -3.3 -9.1
Interest rate swaps -2.1 -5.4 -2.8
Cross currency swaps 0.4 - -
DIVIDENDS
Dividends distributed in March 2011 by Amer Sports to its shareholders and
minority shareholders of its subsidiaries amounted to EUR 36.4 million relating
to the year ending on December 31, 2010 (2010: 19.5). Dividends distributed to
the shareholders of Amer Sports Corporation were EUR 0.30 per share and in total
EUR 36.3 million (2010: EUR 0.16 per share and in total EUR 19.4 million).
CONTINGENT LIABILITIES AND SECURED ASSETS
June June December
30, 2011 30, 2010 31, 2010
Guarantees 13.2 12.8 14.1
Liabilities for leasing and rental agreements 115.4 122.2 123.2
Other liabilities 19.6 32.3 18.7
There are no guarantees or contingencies given for the management of the
company, the shareholders or the associated companies.
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#1536226]
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