Amer Group's net sales in 2003 were up 0.2% to 1,104.4 million ($1.25 bn) compared to 1,101.9 million ($1.04 bn) in 2002. The acquisition of Precor in late 2002 boosted net sales by 137.5 million ($155.7 mm) in 2003. Foreign exchange rate movements reduced net sales by 103.0 million during the year, due mainly to strengthening of the euro against the US dollar. Excluding foreign currency exchange rates, sales would have increased 9.6%. Excluding both the Precor gain and the FX rate loss, sales would have declined 2.9% for the year.
Team Sports has continued to “perform well”. However, the golf equipment market remained very competitive, and the Golf Division's sales fell and it became unprofitable.
North America made up 51% of total sales for the year while Europe delivered 37%, Japan was 5% of sales, Asia Pacific made up 3%, and the rest of the world provided the balance of 4% of sales. Sales were flat in Europe and North America and rose by 10% in Asia Pacific. Sales declined in Japan by 11% and in the rest of the world by 12%. Net sales in local currencies rose by 18% in North America, by 3% in Europe and by 27% in Asia Pacific, but declined by 5% in Japan.
Operating profit dipped 1.7% to 101.3 million ($114.7 mm)versus 103.0 million ($97.4 mm) for the prior year.
The net effect of exchange rate movements on operating profit was slightly negative as the currency effect of consolidation could not be fully compensated. Due to competitive markets, the positive effect of cheaper dollar-denominated purchases was diluted by a slight reduction in selling prices in Europe. On the other hand, euro-denominated manufacturing costs could not be fully passed on in terms of selling prices in the United States.
The inclusion of the Fitness Equipment Division for its first full year of ownership boosted operating profit by 14.9 million ($16.9 mm) after goodwill amortization. The Group's operating profit as a proportion of net sales was 9.2% versus 9.3% in 2002.
Profit before extraordinary items and taxes totaled 93.1 million ($105.4 mm) from 95.6 million ($09.4 mm) in 2002 and net profit was 64.7 million ($73.2 mm), down 5.5% from 68.5 million (68.5 mm)in 2002. Earnings per share fell 6.1% to 2.77 ($3.14)versus 2.95 ($2.80) for full year 2002.
Group operating profit included a gain of $23.0 million (20.5 mm), following the amicable settlement of a patent litigation case in the United States involving Precor.
In November Amer began negotiations concerning its withdrawal from its tobacco business. This will be completed on 26 March 2004, whereupon Amer Group will be a pure sports equipment company focused on achieving its goal of becoming the world leader in its field.
The Board of Directors proposes that a dividend of 1.40 per share be paid for the 2003 financial year, which represents a dividend ratio of 53%. A dividend of 1.40 per share was paid for the 2002 financial year. According to the Board's proposal the record date will be 22 March 2004 and the dividend will be paid on 29 March 2004.
Net financing expenses were 8.2 million, or 0.7% of net sales, from 7.4 million in 2002.
The tax rate rose from 28% to 30%. Return on capital employed (ROCE) fell from 18.3% to 16.9%. Return on equity was down from 15.5% to 14.5%.