Amer Sports Corporation, which completed its acquisition of Louisville Slugger this week, reported strong sales of apparel and footwear helped it boost net sales to €575.9 million ($650 mm) for the quarter ended March 31, up 5 percent in currency-neutral terms from a year earlier.
Gross margin increased 160 basis points to 45.9 percent. Earnings before income taxes and excluding non-recurring times spiked 68 percent to €33.6 million ($38 mm), or €0.16 per share compared with €0.07 in the same quarter a year ago. Net cash flow after investing activities dipped 2.7 percent to €43.0 million ($49 mm).
The Finnish company, which also owns the Arc'teryx, Atomic, Salomon and Suunto outdoor brands, the Wilson ball sports brand and makes Precor fitness gear and Suunto sports instruments, said its outlook for the full year was unchanged. The outlook calls for net sales in local currencies to increase and EBIT margin excluding non-recurring items to improve from 2014, despite challenging market conditions. The company will continue to focus on apparel and footwear growth, consumer-driven product and marketing innovation, commercial expansion and operational excellence.
| EUR million | Q1 2015 | Q1 2014 | FY 2014 | |
| Net sales | 575.9 | 501.5 | 2,228.7 | |
| Gross profit | 264.2 | 222.3 | 979.0 | |
| Gross profit % | 45.9 | 44.3 | 43.9 | |
| EBIT excluding NRI | 33.6 | 20.6 | 168.3 | |
| EBIT % excluding NRI | 5.8 | 4.1 | 7.6 | |
| NRI*) | -1.4 | – | -54.2 | |
| EBIT total | 32.2 | 20.6 | 114.1 | |
| EBIT % | 5.6 | 4.1 | 5.1 | |
| Financing income and expenses | -8.3 | -9.2 | -37.1 | |
| Earnings before taxes | 23.9 | 11.4 | 77.0 | |
| Net result | 17.2 | 8.2 | 55.4 | |
| Earnings per share excluding NRI, EUR | 0.16 | 0.07 | 0.80 | |
| Net cash flow after investing activities | 43.0 | 44.2 | 53.5 | |
| Equity ratio, % at period end | 39.2 | 40.5 | 38.8 | |
| Net debt/equity at period end | 0.51 | 0.58 | 0.50 | |
| Personnel at period end | 7,650 | 7,370 | 7,630 | |
| Average rates used, EUR/USD | 1.13 | 1.37 | 1.33 | |
*)
Non-recurring items (NRI) are exceptional transactions that are not
related to normal business operations. The most common non-recurring
items are capital gains, exceptional write-downs, provisions for planned
restructuring and penalties. Non-recurring items are normally specified
individually if they have a material impact on EBIT.
“We started 2015 with solid growth and profit improvement, further boosted by currencies,” said Heikki Takala, Amer Sports president and CEO. “The growth was particularly strong in Apparel and Footwear as well as in Sports Instruments, and the improved winter conditions drove re-orders in Winter Sports Equipment. In Fitness we declined mainly due to moving from third-party dealer model to in-house sales in the USA, resulting in de-stocking of the current dealer inventories.
Takala said the recovery continues at the Ball Sports business that now include both Wilson and Louisville Slugger.
“Whilst total sales declined behind our new distribution strategy, we delivered solid growth across the focus growth areas, especially performance tennis and baseball, and we continued to improve gross margins and EBIT toward our mid-term targets,” he said. “To accelerate profitable growth in baseball and softball, we announced the acquisition of Louisville Slugger, which makes us the global leader in baseball and softball equipment. The acquisition supports our strategic glide path and confirms that we have progressed to a level where we can accelerate beyond organic growth, and we have the balance sheet strength to do so. Importantly, we still prefer organic growth and expansion, as we see significant potential to further leverage our current portfolio.”
