Amer Sports reported fourth-quarter sales slid 1.4 percent to €772.4 million from €783.7 million a year ago. Net earnings slid 10.2 percent to €47.9 million from €53.3 million.

OCTOBER-DECEMBER 2016

  • In a challenging market, net sales in local currencies decreased by 2 percent and were €772.4 million (October-December 2015: €783.7). Organic growth was down 2 percent. In Winter Sports Equipment and Footwear, deliveries peaked earlier in the year. The planned Sports Instruments product launches were postponed to 2017 due to technical issues. There was also a delayed impact from some Fitness product launches.
  • Gross margin 44.7 percent (43.8).
  • EBIT excluding items affecting comparability (IAC) €81.3 million (€84.0). Items affecting comparability were €-8.2 million (-).
  • Earnings per share excl. IAC €0.45 (€0.46). Earnings per share €0.41 (€0.46).
  • Free cash flow €152.8 million (€159.4).

JANUARY-DECEMBER 2016

  • Record net sales, gross margin and EBIT:
  • Net sales €2,622.1 million (2015: €2,534.4). In local currencies, net sales increased by 4 percent. Organic growth was 3 percent.
  • Gross margin 46.3 percent (45.2).
  • EBIT excl.  IAC €221.7 million (€212.1), representing 8.5 percent of net sales (8.4). Items affecting comparability were €16.9 million (-8.0).
  • Earnings per share excl. IAC €1.18 (€1.09). Earnings per share €1.08 (€1.04)
  • Free cash flow EUR 64.4 million (€121.7).
  • Net debt/EBITDA excl. IAC 1.9 (December 31, 2015: 1.7).
  • Amer Sports Board of Directors is proposing a capital repayment of €0.62 per share (dividend €0.55).
  • Due to the challenging market conditions, Amer Sports paces its short-term growth and expands the on-going cost restructuring program initiated in August 2016, with the objective to reduce operating expenses worth approximately 100 EBIT margin basis points in the coming 24 months.

OUTLOOK

In 2017, Amer Sports’ net sales in local currencies are expected to increase from 2016, despite short-term market softness. The growth is expected to be biased to the second half of the year. The company will continue to focus on growing the core business and the five prioritized areas: Apparel and Footwear, US, China, Business to Consumer, as well as digitally connected devices and services.

Heikki Takala, President and CEO: “
In the fourth quarter, the market softened further, hence we pursued sustainable, non-promotional growth. Due to issues with technical readiness, we postponed some planned launches in Sports Instruments to 2017, and there was also a delayed impact from some Fitness product launches. We improved gross margins, and executed short-term expense reductions, whilst continuing to invest into our 2020 acceleration priorities, most notably digitalization, retail openings, and developing new products and technologies for future commercialization.”

“2016 was another year of record sales and profit, despite a challenging trading environment. Our strategic acceleration areas Footwear, Apparel, Business to Consumer, and China continued the strong growth, and our gross margin was all time high. With the continuously improving performance and the healthy balance sheet, the Board of Directors is proposing yet another increased payout to the shareholders.

“We have now delivered seven consecutive years of profitable growth in line with our Sustainable Growth Model. Going into 2017, our pipeline of new initiatives is strong, and we continue to invest into the prioritized acceleration areas. However, as the market is challenging, we adjust our short-term growth ambitions and elevate our focus on profit, cash and asset efficiency. We proactively expand the restructuring program started in August 2016, with the objective to reduce our operating expenses worth approximately 100 EBIT margin basis points in the coming 24 months. We are looking forward to another year of growth and improvement.”

The company owns Salomon, Wilson Sporting Goods, Atomic Skis, Arc’teryx, Mavic, Suunto, ENVE Composites, and Precor.

Photo courtesy Salomon