Amer Sports Corporation reported net sales reached EUR372.6 million ($516.4mm) in the first quarter ended March 31, 2010, up 5% from the same quarter a year ago. Higher sales and higher gross margins helped push EBIT to EUR9.5 million ($13.2mm), representing a EUR16.4 million ($22.7mm) swing from EUR6.9 million (-$9.6mm) a year earlier. Most of the improvement came in the Winter and Outdoor segment, especially Winter Equipment. Sales also rose 5% when measured in local currency terms.

The Finnish company updated its outlook for 2010, saying it expected EBIT margin to improve to the mid-single digit.

The company said the chances of repeating last year’s improvements are unlikely. It expects the sporting goods market to recover moderately with the pace of the recovery varying significantly from region to region and sport to sport. Amer Sports will continue to focus on improving profitability through improved gross profit and tight cost control, including strict control over working capital.

 
“We executed well our key priorities in the first quarter,” said Pekka Paalanne, EVP, CFO and acting President and CEO during the quarter. “Gross profit percentage was up by more than two points and profitability increased in all segments. At the same time, operating expenses were kept under tight control and we made further gains in managing the working capital.”

The Winter and Outdoor segment experienced the most rapid growth during Q1. Profitability in Winter Sports Equipment continued to improve. Excellent product line, good snow conditions and internal measures to improve the profitability had the biggest impact on the development. Driven by strong in-season orders in footwear, progress in Footwear and Apparel was good. Sports Instruments and Cycling also improved compared to the weak Q1/09.

Team Sports grew fastest within the Ball Sports segment, largely due to trade distribution gains achieved in the US. The new BLX line of tennis rackets launched by Racquet Sports during the Q1 enjoyed a positive reception, but shipments were limited by capacity constraints. Golf sales were at the previous year level in what is seasonally a period of low demand.

Difficult market conditions continued in the Fitness segment. Financing remained tight and fitness clubs continued to be cautious about opening new facilities. Ancillary revenues earned by clubs providing services for their members did however increase during Q1.

“We are in a good position to benefit from the expected market recovery, and we expect the favorable development in our profitability to continue during the remainder of the year,” said Paalanne.

 

Net sales by business segment (All chart figures in euros)

EUR million 1-3/

2010
1-3/

2009
Change

%
Change

%*)
% of sales

1-3/2010
% of sales

1-3/2009
Winter and Outdoor 181.7 164.4 11 9 49 46
Ball Sports 145.4 142.9 2 3 39 40
Fitness 45.5 48.0 -5 -1 12 14
Total 372.6 355.3 5 5 100 100

*) In local currency terms


Geographic breakdown of net sales

EUR million 1-3/

2010
1-3/

2009
Change

%
Change

%*)
% of sales

1-3/2010
% of sales

1-3/2009
Americas 158.3 163.8 -3 0 43 46
EMEA 172.2 156.5 10 8 46 44
Asia Pacific 42.1 35.0 20 16 11 10
Total 372.6 355.3 5 5 100 100

*) In local currency terms

EBIT by business segment

EUR million 1-3/

2010
1-3/

2009
Change

%
Change

%*)
% of sales

1-3/2010
% of sales

1-3/2009
Winter and Outdoor 1.7 -10.9

1.0
Ball Sports 14.4 11.5 25 26 9.9 8.0
Fitness -0.7 -3.4



Headquarters -5.9 -4.1



Total 9.5 -6.9

2.5

*) In local currency terms

BUSINESS SEGMENT REVIEWS


WINTER AND OUTDOOR

EUR million 1-3/2010 1-3/2009 Change % Change %*) 2009
Net sales




Winter Sports Equipment 42.3 37.0 14 13 371.7
Apparel and Footwear 91.0 82.5 10 7 304.7
Cycling 29.3 27.2 8 9 100.4
Sports Instruments 19.1 17.7 8 7 85.8
Net sales, total 181.7 164.4 11 9 862.6
EBIT 1.7 -10.9

46.5
Personnel, period end 4,002 3,776 6
3,940

*) In local currency terms

Winter and Outdoor net sales were 9% up in local currencies and totaled EUR 181.7 million (164.4). Sales increased in all business and geographical areas except in the Americas where sales in local currencies were down by 13%.
 
EUR million 1-3/

2010
1-3/

2009
Change

%
Change

%*)
2009 % of sales

1-3/2010
% of sales

1-3/2009
Americas 31.4 35.5 -12 -13 181.2 17 21
EMEA 128.9 114.3 13 11 585.3 71 70
Asia Pacific 21.4 14.6 47 43 96.1 12 9
Total net sales 181.7 164.4 11 9 862.6 100 100

*) In local currency terms

Winter Sports Equipment
Winter Sports Equipment net sales were 13% up in local currencies and totaled EUR 42.3 million (37.0). Good snow conditions at the end of the 2009/10 winter season had a positive effect in all key markets. While sales in all product categories were up, cross-country skiing grew fastest especially in central and northern Europe.
 

Apparel and Footwear
Supported by strong growth in Europe, Canada and Asia Pacific, Apparel and Footwear net sales were 7% up in local currencies and totaled EUR 91.0 million (82.5). The US market was still under pressure. Strong in-season orders continued to strengthen Salomon’s position in footwear.
 

Cycling
Cycling net sales recovered from the low level of the previous year and totaled EUR 29.3 million (27.2), 9% up in local currencies. Dealers were still cautious and postponed deliveries because of the long winter. The negative trend in OEM sales continued.
 

Sports Instruments
Sports Instruments net sales totaled EUR 19.1 million (17.7) and were 7% up in local currencies mainly due to increased Outdoor products sales.

BALL SPORTS

EUR million 1-3/2010 1-3/2009 Change % Change %*) 2009
Net sales




Racquet Sports 64.3 63.9 1 1 222.7
Team Sports 60.8 59.3 3 7 187.3
Golf 20.3 19.7 3 1 66.7
Net sales, total 145.4 142.9 2 3 476.7
EBIT 14.4 11.5 25 26 23.5
Personnel, period end 1,584 1,695 -7
1,586

*) In local currency terms

Ball Sports net sales totaled EUR 145.4 million (142.9) and were 3% up in local currencies. Growth was driven by Team Sports while sales in both Racquet Sports and Golf remained at last year’s level. Growth of 6% in the Americas reflected the positive development in Team Sports.

 
1-3/

2010
1-3/

2009
Change

%
Change

%*)
2009 % of sales

1-3/2010
% of sales

1-3/2009
Americas 92.9 91.2 2 6 298.6 64 64
EMEA 35.0 34.3 2 0 111.6 24 24
Asia Pacific 17.5 17.4 1 -4

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