Amer Sports First Quarter Report: Winter, Outdoor Net Sales on Top

amer-sports-logo.jpgOFFICIAL PRESS RELEASE – Amer Sports reported a 4.9% decline in first quarter net sales to €363.0 million ($543.7 mm). The company said it was particularly affected by the weakening of the U.S. dollar as sales increased 25 when measured in local currencies.

Net sales by business segment were as follows: Winter and Outdoor 44% (Winter Sports Equipment 23%), Ball Sports 40% and Fitness 16%. Winter and Outdoor sales increased 12%. Ball Sports sales decreased 12% and Fitness 23%. In local currency terms, net sales in Winter and Outdoor increased 15%. Ball Sports net sales decreased 4% and Fitness 13%.

The split of net sales by geographical segment was as follows: the Americas (North, South and Central America) 48%, EMEA (Europe, Middle East and Africa) 43%, and Asia Pacific 9%. Sales in EMEA increased 12% but declined by 16% in the Americas and by 5% in Asia Pacific. In local currency terms, net sales were up 13% in EMEA but down 6% in the Americas and 1% in Asia Pacific.

The Group’s EBIT amounted to €0.0 million after a loss of €7.8 million last year. The Winter and Outdoor business was behind the improvement of EBIT; its net sales increased 15% in local currencies.

Earnings before taxes were a loss of €6.9 million ($10.3 mm) compared to a loss of €14.6 million ($19.1 mm) last year. Earnings per share came in at a loss of €0.07 ($0.10) compared to a loss of € 0.15 ($0.20) for the year-ago period.

Business areas

Net sales of Winter Sports Equipment increased 22% in local currency terms. Sales of both Atomic and Salomon were fuelled by increased demand for alpine skiing equipment in Central Europe. The cross-country skiing equipment market was still extremely challenging. Positive sales development of winter sports equipment compared to the previous year is not indicative of the full-year picture; the amount of pre-orders for the upcoming season will be the decisive factor. These orders vary greatly, both geographically and by product category, and there are also great differences between customer segments.

The restructuring of the winter sports equipment business announced in January 2008 will streamline the industrial processes of Atomic and Salomon, as different sites will be specializing in their own strengths. The changes are estimated to reduce approximately 400 positions globally during 2008. Labor negotiations with employees are underway, and they are expected to be complete during Q2. Annual cost savings are expected to amount to €20 million, starting from 2009.

Sales of apparel and footwear continued to soar: net sales increased 18% in local currencies. The popularity of trail running continues to grow, and Salomon has strengthened its position as a manufacturer of technical trail running shoes. Indeed, Salomon’s Wings running shoes have received a very favorable reception in the market. Judging from the pre-orders for apparel and footwear made for fall/winter 2008/09, continued solid sales development can be expected.

The number of cycling enthusiasts world-wide continues to increase. Bicycle component manufacturer Mavic had a good start for the year, its net sales increasing 13% in local currency terms.

Sports instruments net sales were on par with the previous year in local currency terms. Sales are expected to increase during Q2 with new product launches; for instance, Suunto’s revised t-line wristop computers will be hitting the market. It is believed that these will help to return Suunto to a growth track.