Amer Sports Has Strong Third Quarter
PRESS RELEASE:Amer Sports grew sales 7 percent in currency-neutral (c-n) terms and held margins in the quarter ended Sep. 30, despite a shift in peak Winter Sport deliveries into the fourth quarter that caused it to burn through more cash.
The Finnish company, which owns the Salomon, Wilson, Atomic, Arc’teryx, Mavic, Suunto and Precor brands, reported sales reached €608.9 million ($807 mm), up 1 percent in adjusted currency terms terms compared with the third quarter of 2012. Gross margin slipped 30 basis poins to 45.0 percent. Earnings before income taxes reached €82.5 million ($109 mm), or 13.5 of sales, which was flat with a year earlier.
Net cash flow after investing activities was a negative €119.3 million ($158 mm), compared with a negative €78.1 million in 2012.
For the nine months ended Sept. 30, Amer Sports reported net sales were €1.48 billion ($2.0 bn), up 6 percent from the comparable period in 2012. Gross margin was 44.3 percent, up 10 basis points while EBIT reached €90.2 million ($119 mm), down from €91.7 in the nine months ended Sept. 30, 2012. Net cash flow after investing activities was a negative €101.4 million compared with a negative €24.9 million.
Debt increased to 79 percent of assets from 73 percent at the ended of the third quarter in 2012.
"We continued our performance improvement in Q3 and delivered strong broad based growth, despite the challenging trading conditions and significant currency fluctuations," said Heikki Takala, president and CEO. "Our topline momentum was logically driven by solid double-digit growth in our strategic focus areas Apparel and Footwear, Emerging Markets, and Business to Consumers. The good momentum continued also in Suunto and Fitness which both grew at double-digit rate. Importantly, we also saw first signs of rebound in Team Sports behind a normalization of the baseball market inventory situation. In Winter Sports Equipment our delivery peak is later than last year, hence the slight decline in Q3. I’m overall pleased with our business progress. We stay the course and continue executing with confidence.”
Amer Sports said it expects the trading environment to remain challenging for the balance of the year. Net sales growth in local currencies is expected to meet at minimum the company’s long-term annual 5 percent growth target, while EBIT margin – excluding non-recurring items – is expected to improve from 2012. The company will continue to focus on softgoods growth, consumer-driven product and marketing innovation, commercial expansion and operational excellence.