Amer Sports Corporation said net sales for the fourth quarter fell 3% to
€482.8 million ($713.1mm) , due largely to a 14% decline in sales of ball sports. Winter and outdoor sales rose 1% to €392.2 million ($579.3mm), while fitness sales were flat at €58.9 million ($87mm), including the effect of currency translation.
Amer Sports said its declining sales trend turned slightly positive towards the end of the fourth quarter, although this reflected more the timing of winter sports deliveries and weak comparables in the Fitness segment than a recovery in the market, the Finnish company said.
“Our profitability also started to improve thanks to programs initiated during 2009, and we expect the favorable development to continue during 2010,” said Pekka Paaalanne, aciting president and CEO.
Amer Sports brand portfolio includes Salomon, Wilson, Preco, Atomic, Suunto, Mavic and Artc”Teryx.
Paaalane said the results were the weakest reported by the company during the past decade, but that it exceeded its goals in strengthening its balance sheet.
Net sales by business segment
EUR million | 10-12/ 2009 | 10-12/ 2008 | Change % | Change %*) | % of sales 10-12/09 | % of sales 10-12/08 |
Winter and Outdoor | 329.2 | 326.6 | 1 | 3 | 68 | 66 |
Ball Sports | 94.7 | 110.0 | -14 | -8 | 20 | 22 |
Fitness | 58.9 | 58.7 | 0 | 10 | 12 | 12 |
Total | 482.8 | 495.3 | -3 | 1 | 100 | 100 |
*) In local currency terms
EBIT by business segment
EUR million | 10-12/ 2009 | 10-12/ 2008 | Change % | Change %*) | % of sales 10-12/09 | % of sales 10-12/08 |
Winter and Outdoor | 42.5 | 36.7 | 16 | 20 | 12.9 | 11.2 |
Ball Sports | 2.2 | 3.4 | -35 | -28 | 2.3 | 3.1 |
Fitness | -0.5 | -2.3 | ||||
Headquarters | -4.8 | -2.6 | ||||
Total | 39.4 | 35.2 | 12 | 16 | 8.2 | 7.1 |
*) In local currency terms
WINTER AND OUTDOOR
EUR million | 10-12/ 2009 | 10-12/ 2008 | Change % | Change %*) | 2009 | 2008 | Change % | Change %*) |
Net sales | ||||||||
Winter Sports Equipment | 203.7 | 196.7 | 4 | 6 | 371.7 | 378.9 | -2 | -1 |
Apparel and Footwear | 73.8 | 73.9 | 0 | 2 | 304.7 | 277.9 | 10 | 11 |
Cycling | 27.1 | 31.3 | -13 | -12 | 100.4 | 114.2 | -12 | -13 |
Sports Instruments | 24.6 | 24.7 | 0 | 4 | 85.8 | 89.8 | -4 | -5 |
Net sales, total | 329.2 | 326.6 | 1 | 3 | 862.6 | 860.8 | 0 | 0 |
EBIT | 42.5 | 36.7 | 16 | 20 | 46.5 | 41.1 | 13 | 17 |
Personnel, Dec 31 | 3,940 | 3,777 | 4 |
*) In local currency terms.
10-12/ 2009 10-12/ 2008 Change % Change %*) 2009 2008 Change % Change %*) Americas 50.8 60.8 -16 -12 181.1 202.3 -10 -12 EMEA 236.1 219.2 8 9 585.4 558.8 5 6 Asia Pacific 42.3 46.6 -9 -6 96.1 99.7 -4 -6 Total net sales 329.2 326.6 1 3 862.6 860.8 0 0
*) In local currency terms
Winter Sports Equipment
In 2009, Winter Sports Equipment’s net sales of €371.7 million (378.9) were at last year’s level in local currencies. The biggest product categories were alpine ski equipment, representing 78% of net sales, cross country 12%, and snowboards 10%. Net sales of alpine ski equipment fell in local currency terms by 3%, snowboards fell by 10% and cross country increased by 22%.
The development of sales showed very different patterns in the key markets during 2009. The alpine and Nordic countries started to show signs of recovery with favorable weather conditions. The North American market continued to weaken whereas the Asian market was flat. Industry sales were relatively stable as a whole, at approximately €1.4 billion: alpine ski equipment €1.0 billion, snowboards €0.3 billion, and cross-country ski equipment €0.1 billion. The EMEA continued to be the largest winter sports region representing 71% of global sales, followed by the Americas with 17%, and Asia Pacific with 12%.
After significant restructuring in 2008, 2009 was the first year for the Winter Sports Equipment business operating under its new structure. Winter Sports Equipment successfully completed its consolidation of the manufacturing sites from ten to six at the beginning of the year. In addition, the integration of the Bulgarian ski factory, which was acquired in 2008, proceeded according to plan. The Winter Sports Equipment business area produced a positive result after a very challenging period.
Apparel and Footwear
Net sales in Apparel and Footwear increased by 11% in local currency terms to €304.7 million (277.9). Net sales by product categories were as follows: footwear 55% and apparel and gear 45%. Net sales of footwear increased in local currency terms by 15%, and apparel and gear by 6%. The EMEA continued to be the largest business region representing 69% of global sales, followed by the Americas with 26%, and Asia Pacific with 5%.
Salomon strengthened its global position in the outdoor footwear market in 2009. The main growth drivers were the trail running footwear and the new progressive hiking-backpacking offer. The unique positioning of Salomon as the mountain apparel brand continued to generate positive results with sales growing faster than the market, especially in Europe. Ski apparel continued to grow and Salomon strengthened its position on the market. The Apparel and Footwear business is weighted towards the winter season. However, the outdoor and trail-running spring/summer collections have continued to be the fastest growing categories.
Despite a tough US environment and high exposure in the US market, Arcteryx managed to increase its sales. This was mainly driven by a successful spring/summer collection.
Even though the US was the toughest market in 2009, Amer Sports estimates that its Apparel and Footwear business area’s market share increased in the US. The outdoor trend remained strong and trail running as a category continued to gain popularity. The business area’s good profitability was maintained in 2009.
Cycling
Due to the challenging business climate in 2009, both independent bike dealers and bike manufacturers clearly reduced their inventories during the year. This resulted in a major fall in OEM orders and weak demand in the US especially.
Mavic saw net sales fall in local currencies by 13% to €100.4 million (114.2). The biggest product categories were rims and wheels, representing 83% of net sales, and apparel and footwear 14%. Net sales of rims and wheels fell in local currency terms by 16%, and apparel and footwear by 3%. The distribution of Cycling’s net sales by geographical region was as follows: EMEA 65%, Asia Pacific 21%, and the Americas 14%.
At the beginning of 2009, Mavic decided to recall its R-Sys front wheels and replace the original carbon spokes with a new and stronger construction. Customers appreciated the way this recall was managed, which showed Mavic’s continuous commitment to maintaining its strong brand image. Improving the supply chain and maintain tight control of expenses were key focus areas in 2009. Mavic’s profitability weakened in 2009 due to lower sales volumes and the disruption caused by the recall of R-Sys wheels.
On September 1, 2009, Amer Sports announced that it was exploring strategic alternatives in respect of its cycling business and that the review could result in the divestment of Mavic. Amer Sports evaluated several different options, and reached the conclusion that the divestment of Mavic would not be in the best interest of shareholders. Instead Amer Sports will concentrate its efforts on further developing its cycling business.
Sports Instruments
Net sales of Sports Instruments net sales fell by 5% in local currency terms to €85.8 million (89.8). Over the years, wristop computers and diving instruments have consistently increased their share of Suunto’s total net sales: reaching 80% of total business in 2009. Net sales of wristop computers increased in local currency terms by 3% and diving instruments fell by 13%. The distribution of net sales by geographical region was as follows: EMEA 56%, the Americas 29%, and Asia Pacific 15%. Suunto’s profitability weakened in 2009.
In 2009, Suunto entered the premium sports watch market with the Suunto Elementum col
