For the third quarter, Amer Sports Corp. saw net sales decrease 2.4% to €471.9 million ($601.7 mm) from €483.6 million ($590.1 mm) for the same period one year ago. Gross profit decreased 150 basis points as a percentage of net sales to 40.7% for the third quarter, down from 42.2% last year. Net income also decreased, slipping 2.1% to €36.6 million ($46.7 mm) from last year’s €37.4 million ($45.6 mm). Diluted earnings per share reflected the net income decrease, down 3.8% to €0.50 ($0.64) from €0.52 ($0.63) last year.

Roger Talermo, president and CEO commented, “Trends in the sports and leisure markets remained favorable. We believe that they will hold steady during the rest of the year as well.
Thanks to the orders received by both Salomon and Atomic, we anticipate that their full-year net sales will grow. However, Salomon’s net sales declined in the third quarter because part of its winter sports equipment deliveries were late, rolling over to the last quarter. This was caused by Salomon’s logistics partner not being able to deliver all the products to market on schedule, creating a three-week backlog at the end of September. The situation is expected to return to normal in the final quarter, but it may affect the amount of reorders received during the period.

“Precor’s favorable development remained on track in the third quarter. Sales continued to surge, especially to fitness clubs. Wilson also continued to develop well, even though the Golf Division fell short of its objectives.

JANUARY-SEPTEMBER NET SALES AND EBIT

Amer Sports’ net sales in the January-September period of 2006 grew by 3% to €1,211.1 million (€1,173.5 million in 2005). Net sales by business segment were as follows: Salomon, 31%, Wilson, 38%, Precor, 16%, Atomic, 10%, and Suunto, 5%. Salomon’s sales were up 3%, Precor’s 12%, Suunto’s 6% and Wilson’s 2%. Atomic’s net sales declined by 4%. The distribution of Asics products, a noncore category for Atomic, ended in Austria, reducing Atomic’s net sales by €9.7 million. Exclusive of the effect of Asics, its net sales would have risen by 4%.

The split of net sales by market area was as follows: the Americas (including Latin America) 50%, EMEA (Europe, Middle East, Africa) 39%, and Asia Pacific 11%. Sales increased by 6% in the Americas and by 7% in Asia Pacific. Sales in EMEA were at the previous year’s level.
The Group’s EBIT amounted to €50.5 million (49.3). Precor’s earnings trend
was particularly strong. EBIT in the same period last year was improved by EUR 5.9 million from the sale of properties.

Earnings before taxes were €32.2 million (31.9). Earnings per share came in
at €0.33 (0.30). Net financial expenses amounted to €-18.3 million
(-17.4).


SALOMON

The most important season for sales of winter sports equipment is September-October, when the bulk of products are delivered to retail. This year, part of Salomon’s deliveries slated for September was delayed, rolling over from the third to the fourth quarter. This had a major impact on the trend in Salomon’s Q3 net sales. This delay was caused by Salomon’s logistics partner not being able to deliver all the winter sports equipment to market on schedule, creating a three-week backlog at the end of September. The situation is expected to return to normal in the final quarter, but it may affect the amount of re-orders received during the period.

For the third quarter, Salomon’s sales decreased 5.2% to €179.6 million ($229.0 mm) from €189.4 million ($231.2 mm) for the same period. Winter Sports sales within the division decreased 16.8% to €92.6 million ($118.1 mm), while Apparel and Footwear increased 13.0% to €62.5 million ($79.7 mm) and sales at Mavic were up 7.5% to €24.5 million ($31.2 mm).
EBIT for the quarter was €23.6 million ($30.1 mm), decreasing 15.7% from last year’s €28.0 million ($34.2 mm).

Salomon’s net sales rose by 3% in January-September. The breakdown of net sales was as follows: Winter Sports Equipment, 41%, Apparel and Footwear, 38%, and Mavic, 21%. Of net sales, the Americas generated 29%, EMEA 61% and Asia Pacific 10%. Sales were up 6% in the Americas and 8% in Asia Pacific. Sales in EMEA were at previous year’s level. Delivery difficulties cut into sales, particularly in EMEA.

Salomon’s EBIT came in at a loss of (€16.7 million), though improving from last year’s loss of (€19.8 million). Improved cost control
contributed to the improvement in earnings. Salomon’s deliveries of winter
sports equipment and apparel largely take place in the latter half of the year.

Net sales of Salomon’s Winter Sports Equipment declined by 8% for the nine month period. According to the current estimate, full-year sales are expected to be at last year’s level.
Net sales of Apparel and Footwear rose by 14%. The fastest growth was seen in sales of Arc'teryx’s winter apparel. Orders for Apparel and Footwear for the spring/summer 2007 season have been solid.
The net sales of bicycle component manufacturer Mavic grew by 9%. In July, Mavic signed a new five-year extension agreement with the Tour de France.


WILSON

The company’s Wilson division saw sales decrease 4.6% for the third quarter to €120.3 million ($153.4 mm) from €126.1 million ($153.9 mm) last year. Racquet Sports sales increased 3.4% to €58.5 million ($74.6 mm) from €56.6 million ($69.1 mm), but was the only bright spot in the division. Sales of Golf merchandise decreased 19.7% to €21.2 million ($27.0 mm), while Team Sports sales decreased 5.6% to €40.6 million ($51.8 mm). EBIT for the division increased 14.5% to €7.9 million ($10.1 mm) from €6.9 million ($8.4 mm) last year.

Wilson’s net sales in January-September rose slightly compared with the previous year. The breakdown of net sales was as follows: Racquet Sports, 42%, Team Sports, 37%, and Golf, 21%. Of net sales, the Americas generated 66%, EMEA 20% and Asia Pacific 14%. Sales growth was 3% in the Americas and 1% in EMEA. In Asia Pacific, sales were down 6%, especially due to the weaker sales of tennis and golf equipment in Japan.
Wilson’s EBIT remained at the previous year’s level and was €49.4 million.

The Racquet Sports Division’s net sales rose by 8% for the nine month period.
Of the product groups, the best growth was seen in accessories and footwear.
Team Sports’ net sales rose by 10%. Sales of all key product groups were up on the corresponding period of last year, with sales decreasing only in uniforms and training equipment.

The Golf Division’s sales and earnings fell short of its objectives, especially in Japan. Demand for golf equipment also declined in Europe. The new distribution strategy focusing on the major customers in the United States cut into net sales of the Golf Division.


PRECOR

Precor posted one of the few divisional sales increases for Amer during the third quarter, with sales increasing 4.3% to €60.4 million ($72.0 mm) from €57.9 million ($70.7 mm) last year. The division was unable to produce an EBIT gain off the sales increase as the metric was down 15.5% to €6.0 million ($7.7 mm) from €7.1 million ($8.7 mm) during last year’s third quarter.

Precor’s net sales were up 12% in January-September. Of net sales, the Americas generated 78%, EMEA 15% and Asia Pacific 7%. Sales were up 14% in the Americas and 11% in EMEA, while in Asia Pacific they remained at the same level as in the previous year's corresponding period.

Precor’s EBIT rose by 26% to €22.1 million for the first nine months of the year. EBIT was boosted by sales growth and better sales margins. Non-recurring quality-related costs weakened earnings slightly.


ATOMIC

For the third quarter, Atomic net sales slipped 0.5% to €93.3 million ($119.0 mm) from €93.8 million ($114.5 mm) last year. EBIT was alos down slightly for the division, off 1.3% to €23.4 million ($29.8 mm) from €23.7 million ($28.9 mm) during the third quarter of 2005.

Atomic’s net sales in January-September declined by 4%. Of net sales, the
Americas generated 20%, EMEA 76% and Asia Pacific 4%. Sales were down 2% in the Americas, 4% in EMEA and 18% in Asia Pacific.

The distribution of Asics products, a non-core category for Atomic, ended in Austria, depressing net sales by €9.7 million. Exclusive of the effect of Asics, net sales would have risen by 4%.

Atomic’s EBIT in January-September amounted to €1.8 million (3.2). EBIT in Q3 was €23.4 million (23.7).

Atomic's deliveries are heavily weighted towards the latter part of the year.
The busiest months for deliveries are September and October. The amount of
advance orders received for the last months of the year is at the previous
year’s level.


SUUNTO

Suunto lead all divisional sales gains in the third quarter, posting an 11.6% sales jump to €18.3 million ($23.3 mm) from €16.4 million ($20.0 mm) last year. The division saw an 11.1% increase in EBIT to €1.0 million ($1.3 mm) for the quarter.

Suunto’s net sales grew by 6% in January-September. Of net sales, the Americas generated 35%, EMEA 53% and Asia Pacific 12%. Sales in the Americas were at the previous year’s level but rose by 8% in EMEA and by 17% in Asia Pacific. Q3 net sales were up 12%.

Suunto’s EBIT amounted to €5.8 million, up from €4.1 million last year. There was a fire at a supplier’s premises in the second half of 2005, and Suunto’s result for the
review period includes €2.5 million in insurance claims paid for the loss of sales margins due to the fire.

Sales of Suunto’s diving instruments increased by 9% during the review period.
The trend in sales of Suunto’s D9 and D6 diving instruments was particularly favorable. Sales of diving and water sports suits declined.

Sales of wristop computers grew by 20%. The Suunto Training product series for endurance training that was launched in the fall has been well-received. New product upgrades also increased sales of wristop computers.
Diving instruments and wristop computers accounted for a total of 69% (64%) of Suunto’s net sales.


CAPITAL EXPENDITURE

The Group’s capital expenditure on fixed assets totaled €22.5 million (10.5).
The Group’s depreciation was €23.9 million (25.9).


RESEARCH AND DEVELOPMENT

€41.9 million (41.8) was invested in research and development, representing
3.5% of net sales.


FINANCIAL POSITION AND CASH FLOW

The Group’s net debt at the end of September was €617.5 million (December 31, 2005: €601 million). Cash flow from operating activities after interest and taxes was €21.4 million (32.3). Net cash flow from investing activities was €-56.7 million (-2.4), including the final transaction price paid for the Salomon acquisition. Of the €575 million credit facility agreed on in December 2005, €250 million is in use, and the committed unused portion is €325 million. The
credit facility will mature at the end of 2010. Short-term financing is raised with a domestic commercial paper program of €500 million, of which €388 million had been used on September 30, 2006. Liquid assets amounted to €26.5 million at the end of the period (September 30, 2005: 278.9).
The company's equity ratio was 31.3% (September 30, 2005: 43.0%) and gearing was 120% (29%).


AMER SPORTS’ SHARES AND SHAREHOLDERS

At the close of the report period, Amer Sports had 14,092 registered
shareholders. 55% (54.3%) of the shares were owned by foreigners.
During the review period, a total of 45.3 million Amer Sports shares were traded on the Helsinki Stock Exchange to a total value of €754.3 million. The share turnover was 63.4%.
At the close of the period on the Helsinki Stock Exchange, the last trade in Amer Sports Corporation shares was completed at a price of €17.70. The high for the year on the Helsinki Stock Exchange was €18.01 and the low €14.75.
The average share price was €16.65.
At the end of September, the company had a market capitalization of €1,266.1 million (1,134.1).

On September 30, 2006, the company’s share capital totaled €286,118,040 and
the total number of shares was 71,529,510. The number of shares subscribed to with the warrants from 2002 was 15,450 in May-June and 28,950 in June-July. The increases in share capital due to these subscriptions were entered in the Trade Register as follows: €61,800 on July 13 and €115,800 on September 7.

On January 27, 2006, Franklin Resources Inc announced that the total number of shares held by the funds and individual investors under its control represented 5.02% of Amer Sports Corporation’s share capital and votes. In March, Franklin Resources Inc announced that its shareholding had declined to 4.99%.

At the end of the period, the Board of Directors had no outstanding
authorizations to issue shares.


PERSONNEL

At the end of the period, the Group had 6,845 employees (4,348), of whom 2,479 worked for Salomon. The Group had an average of 6,827 employees (4,347) during the period. At the end of the period, 2,722 (2,178) were employed in the Americas, 3,637 (1,764) in EMEA, and 486 (406) in Asia Pacific.


AMER SPORTS WINTER & OUTDOOR AMERICAS

Amer Sports is centralizing its winter and outdoor businesses in the Americas under single management. This will bolster Amer Sports’ position and hone its business operations in the world’s largest winter and outdoor market, the United States. This step is geared towards finding new avenues for increasing the sales of Salomon, Atomic and Suunto, and ensuring a more efficient infrastructure for sales and business operations. The unit will be set up in Ogden, Utah. Mike Dowse, who has worked for Amer Sports for sixteen years, was appointed as its General Manager effective September 1, 2006.


OUTLOOK FOR 2006

The company expects that the positive trend in the demand for sports equipment will continue in the last months of the year. The company still estimates that Amer Sports’ full-year net sales in 2006 will amount to approximately €1.8 billion (2005: €1,732 million) and earnings per share to €0.90–1.05 (Q2/2006: 0.95–1.05). It is estimated that the company’s full-year tax rate will be 27% instead of 30% as previously assessed.

Salomon’s integration into Amer Sports is proceeding as planned. The social plan negotiations initiated at Salomon S.A. were concluded in June. In addition, decisions on the industrial cooperation of Atomic and Salomon have been made.

Cooperation covers the manufacture of alpine skis and boots and all crosscountry skiing equipment. These changes will be carried through during 2007 and 2008.
The consolidation of operations into Amer Sports country-specific organizations is proceeding as planned.

2006 is a transitional year for Salomon. Major earnings improvements are
expected in 2007 and 2008, when the effects of the restructuring of Salomon will become evident.

Amer Sports estimates that it will gradually achieve annual cost-savings of over €40 million by the end of 2008 from the restructuring of Salomon and the industrial cooperation of Salomon and Atomic.