Amer Sports Corp. said the company has decided to place the Mavic cycling business under strategic review as part of an update on the company’s business strategy. Mavic currently represents approximately 3.5 percent of Amer Sports’ sales.
At the same time, Amer Sports said that going forward, the company will further drive transformation towards areas of faster growth, higher profitability and better asset efficiency, first through the integration of the acquired Peak Performance business.
The strategy continues to call for driving sustainable profitable growth as well as prioritized acceleration in Softgoods, business-to-consumer, China, United States and digitalization.
In the mid-term, the company will complete the current strategy cycle of the Fitness and Sports Instruments businesses, both of which are now delivering strong growth and improvement following the strategic investment choices. As the performance confirms itself and the units grow towards their target scale, the company will assess their long-term strategic options, including standalone opportunities.
The company’s financial targets remain unchanged:
- Net sales: mid-single digit organic, currency-neutral annual growth
- Profit: Annual EBIT growth (excl. items affecting comparability, IAC) ahead of net sales growth
- Cash flow conversion: Free cash flow / net profit at least 80 percent
- Net debt / EBITDA: Year-end net debt / EBITDA ratio max 3x
Amer Sports President and CEO Heikki Takala said, “We have continued to deliver sustainable profitable growth and solid value creation. Our strategy is proven, driving both continuous improvement and targeted transformation. The company profile is today increasingly attractive with especially Softgoods, B2C and China growing to significant weight in the portfolio and contributing disproportionally to our value creation.
Going forward we continue to capitalize on the proven strategy whilst accelerating our portfolio transformation towards areas of faster growth, higher profitability and better asset efficiency. Now we accelerate further in Softgoods through Peak Performance, and we also review the portfolio focus opportunities as we place the Mavic Cycling business under strategic review. Next, we will complete the current strategy cycle of the Fitness and Sports Instruments businesses, both of which have positive momentum, and assess the alternatives for realizing their maximum potential.”
“With our updated strategy, we expect to deliver strong continuous performance and attractive value creation.”
2018 Outlook Maintained
Amer Sports outlook for 2018 is unchanged. In 2018, Amer Sports’ net sales in local currencies as well as EBIT excl. IAC are expected to increase from 2017. Due to ongoing wholesale market uncertainties, the quarterly growth and improvement are expected to be uneven. The company will prioritize sustainable, profitable growth, focusing on its five strategic priorities (Apparel and Footwear, Direct-to-Consumer, China, U.S., and Connected Devices and Services) whilst continuing its consumer-led transformation.
Capital Markets Day September 6, 2018
Amer Sports organizes a Capital Markets Day in Helsinki tomorrow, September 6 starting at 9:00 a.m. EEST. In the event, the updated company strategy will be presented in more detail.
Amer Sports brands include Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson and Precor.
Photo courtesy Mavic