Amer Sports Q3 Sales Up 14%; Names New CFO

amer sportsAmer Sports, parent company of Salomon and Arc’Teryx, announced that revenue for Q3 ended September 30 was up 14% to €466.9 million ($602.4 mm). In local currencies, net sales increased by 5%.

The company also announced that its Senior Vice President, Finance Jussi Siitonen has been appointed CFO, effective January 1, 2011 to replace the current CFO and Executive Vice President Pekka Paalanne, who will retire.

On the financial front:

Gross profits margin rose 310 basis points to 44.8% of revenues. Earnings before interest and taxes (EBIT) reached €55.8 million ($72.0), after non-recurring expenses of €3.5 million, up 37% from €40.7 million in the year earlier quarter. EBIT as a percentage of net sales rose 210 basis points to 12%.

Earnings per share totaled rose to €0.38 (49 cents) from €0.29 (35 cents).  The company burned more than three times as much cash during the quarter as a year earlier. Net cash flow from operating activities totaled -€85.0 million ($109.7 mm) compared to -€25.4 million (-$36.3 mm) a year earlier. The company normally reports negative cash flow in the quarter as it builds inventory for the Winter Sports Equipment business.

The progress on both the top and bottom lines was broad based with all business segments improving their EBIT margins and prompted the company to confirm its 2010 guidance, said President and CEO Heikki Takala. The company still expects 2010 net sales to be approximately €1.7 billion, up from €1.5 billion in 2008, but edged up its forecast for EBIT margin to approximately 6% excluding non-recurring items.

Below is a break down by business group.

Winter and Outdoor

In July-September, Winter and Outdoor net sales totaled €300.3 million (262.4), an increase of 7% in local currencies. The breakdown of net sales by business area was as follows: Winter Sports Equipment 44%, Apparel and Footwear 39%, Cycling 9%, and Sports Instruments 8%. EMEA accounted for 63% of net sales, the Americas for 28%, and Asia Pacific for 9%.

EBIT improved by €14.1 million to €58.2 million (44.1). Higher gross margins contributed €10.4 million to EBIT growth and increased sales volumes contributed €9.1 million. Operating expenses increased by €9.4 million mainly driven by increased sales and distribution expenses (all in local currencies).
Winter Sports Equipment: In July-September, Winter Sports Equipment net sales totaled € 133.1 million (119.6) and were up by 4% in local currencies. October-December is the main delivery period in winter sports equipment.