Amer Sports reported that consolidated net sales in third quarter rose by 5% in local currency terms and increased 5.7% in Euros to 294 million ($359.1 mm) from 278.4 million ($340.5 mm) in Q3 last year. Fitness Equipment Division sales increased by 16% in local currency terms versus the pervious year quarter. Sales in the Sports Instruments Division fell short of the objectives, declining by 11% in local currency terms. Earnings before interest and taxes amounted to 35.5 million ($43.3 mm), compared to 33.8 million ($41.3 mm) in the year-ago quarter.
Amer Sports reported that net sales for the nine-month YTD sales rose 4% to 805.2 million ($1,017.8 mm), compared to 774.9 million ($950.0 mm) in the year-ago period. In local currencies, net sales grew by 5%. The Fitness Equipment Divisions net sales increased by 16% in local currency terms. Sales increased by 10% in the Team Sports Division, 6% in the Racquet Sports Division, and 2% in the Winter Sports Division. Sales declined by 5% in the Golf Division and likewise by 5% in Sports Instruments.
The Americas (including Latin America) made up 59% of total sales in the nine month YTD period, EMEA (Europe, Middle East, Africa) was 30% of sales, and Asia Pacific made up the remaining 11%. Net sales in the Americas sales grew by 2% in the YTD period, while EMEA sales rose 5% and Asia Pacific grew by 9%. In local currencies, net sales in the Americas grew by 5%, in EMEA by 5% and in Asia Pacific by 9%.
Earnings before interest and taxes amounted to 69.1 million ($87.3 mm), compared to 66.5 million ($81.5 mm) in the 2004 period. Earnings per share were 0.63, or a 1.6% decline from EPS of 0.64 in the same period last year.
In 2005, Amer Sports comparable net sales in local currencies exclusive of Salomon are expected to grow by 5% compared with last year. Earnings per share are estimated to amount to 0.90 to 1.00 versus 2004 EPS for continuing operations 0.96.
The acquisition of Salomon will substantially increase Amer Sports net sales in the last quarter of the present year. Salomons net sales in OctoberDecember 2004 amounted to 253 million ($304.6 mm). The Salomon acquisition is not expected to have a significant effect on Amer Sports earnings per share in the current fiscal year.
“The fastest sales growth was seen in the Fitness Equipment Division, whose net sales increased by 16% in local currency terms,” said Roger Talermo, President and CEO, Amer Sports. “Amer Sports acquisition of the Salomon business became effective on October 19, 2005. The work to integrate the business operations of Amer Sports and Salomon can now begin.”
Talermo continued “Our aim is to increase Salomons profitability to meet our financial targets. The estimate of synergies we made when the transaction was announced has been confirmed. These synergies are primarily generated by industrial operations in the winter sports business. In addition, synergies are expected in administration and R&D.
The trend in Racquet Sports remained favorable. In local currency terms, net sales rose by 6% in the January-September period compared with the corresponding period of the previous year. The net sales and EBIT of the Golf Division underperformed expectations. Net sales were down 5% in local currency terms compared with the same period a year ago. Net sales of Sports Instruments declined by 5% in January-September.
Growth in Team Sports was better than expected. Net sales rose by 10% in local currency terms compared with the corresponding period of the previous year. Sales in Asia Pacific grew by 52%.
Thanks to the robust third quarter, the net sales of Winter Sports increased by 2% in the January-September period. September saw the division break all its previous monthly delivery records. Sales of alpine ski boots were up 42%. Alpine ski boots comprise the Winter Sports Divisions fastest-growing product group.”
The trend in the Racquet Sports Division remained favorable. In local currencies, net sales grew by 6% in the JanuarySeptember period compared with the corresponding period of last year. Sales grew by 6% in the Americas, by 5% in EMEA and by 7% in Asia Pacific.
Net sales growth was attributable in large part to the worldwide success of Wilson tennis racquets. Many professional players scored victories with Wilson nCode racquets in 2005. Wilson tennis racquet sales grew by 8% in local currency terms during the JanuarySeptember period. Sales of tennis balls increased by 4%.
During the review period, Wilsons product launches included the worlds first line of high-performance tennis racquets designed specifically for women called the W Line by Wilson. These racquets are based on Wilsons nCode technology and feature a new racquet construction and distinct cosmetics.
The agreement making Wilson the Official Ball of the Australian Open came into effect during the third quarter.
The Racquet Sports Division continued to invest in and focus on increasing the market share of the global badminton market. Badminton equipment sales rose by 41% in local currency terms.
EBIT grew by 16% to EUR 26.0 million. EBIT was increased by higher sales and overall gross profit margins.
The Golf Divisions net sales and EBIT underperformed expectations in the January-September period. Net sales in local currencies declined by 5% compared with the corresponding period of the previous year. Sales declined by 7% in the Americas and by 6% in EMEA. In Asia Pacific, sales were up 3%.
Sales of Wilson golf clubs decreased by 6% in January-September. Golf ball sales rose by 3% compared with the same period a year earlier.
According to the companys own estimates, the global golf market remained on a par with the previous year. Sales of golf clubs to the trade in the United States rose by 5% in January-September, while golf balls were up 2% (National Golf Foundation 10/2005).
EBIT was down EUR 1.6 million on the corresponding period of the previous year. This was a result of lower sales and the lower gross profit margins necessitated by a highly competitive marketplace.
Decisions to boost the Golf Divisions operational efficiency and reduce costs will be made during the last quarter.
Growth in Team Sports surpassed expectations. Stated in local currencies, net sales rose by 10% compared with the corresponding period of the previous year. Sales growth amounted to 8% in the Americas and 9% in EMEA. Sales increased by 52% in Asia Pacific.
The fastest growing product categories in Team Sports were baseball and softball bats and baseball training equipment. Sales of baseball equipment rose by 18%.
EBIT grew by 18% in local currency terms and amounted to EUR 21.4 million.
The Winter Sports Divisions deliveries are heavily weighted towards the latter part of the year, the busiest months for deliveries being September and October.
In local currency terms, the Winter Sports Divisions net sales increased by 2% in JanuarySeptember compared with the corresponding period of the previous year. Sales rose by 9% in EMEA. In the Americas, sales fell by 21%, which was partly due to poor weather conditions in the first part of the year. Sales of alpine ski boots were up 42%.
EBIT came in at EUR 3.2 million (9.1). One of the major reasons underlying the decline in EBIT was the waning of sales in North America.
The Winter Sports Division will continue to develop innovative products. The IZOR ski line, the first line to utilize nanotechnology, was very well received in all markets.
The order book for the rest of the year is on a par with the corresponding period of the previous year.
The Fitness Equipment Divisions net sales increased by 16% in local currency terms compared with the corresponding period of the previous year. Of the net sales, 77% were generated in the Americas, where sales were up 16%. Sales grew by 18% in EMEA and by 11% in Asia Pacific. Sales increased in all the main product groups.
Stated in local currencies, the Fitness Equipment Divisions EBIT grew by 11%. The division was able to partly pass on the increased costs of steel and freight in its selling prices.
Expansion of Precors product range into strength training and entertainment systems and services has bolstered Precors position as a major international full-line supplier.
In the Sports Instruments Division, net sales in the JanuarySeptember period declined by 5% in local currency terms. Sales declined by 3% in EMEA and by 11% in the Americas, but were up 11% in Asia Pacific. EBIT declined by 26% to EUR 4.1 million.
Sales of Suuntos diving instruments were at around the same level as last year. Sales of wristop computers declined by 4%. Wristop computers and diving instruments accounted for a total of 64% (62%) of Suuntos net sales in the review period. Sales of diving and watersports suits were at the last years level.
Suunto sports instruments help outdoor enthusiasts and athletes to measure their performance, analyze their development, and share and compare their experiences.