Amer Sports reported net sales of €645.8 million ($856 mm) for the quarter ended Sept. 30, up 6.1 percent compared with €608.9 million a year earlier. Net sales increased by 6.0 percent in currency-nuetral terms.

The Finnish companies brand portfolio includes Arcteryx apparel, Atomic snow sports gear, Mavic bicycle wheels and components, Precor fitness gear, Salomon footwear, apparel and snow sports equipment, Suunto Instruments and Wilson ball and team sports gear.

Strong growth in Footwear (+19 percent), Apparel (+14 percent), Fitness (+12 percent) and Sports Instruments (+12 percent). Ball Sports net sales declined by 3 percent mainly due to continuous clean-up of unprofitable sales in Individual Ball Sports with the objective to re-ignite profitable growth. Winter Sports Equipment net sales were at previous years level. Cycling declined by 2 percent.

Gross margin was 44.7 percent, down 30 basis points, mainly due to early phasing of lower margin deliveries in Winter Sports Equipment, and adverse margin development in Russia.

(All dollar figures shown in parenthesis below represent results
translated to U.S. dollars at the average exchange rate of 1.3257 dollars
to the euro for the quarter. All euro figures appearing in parenthesis
represent the year earlier results.)

Group EBIT excluding non-recurring items was €87.6 million ($116 mm), compared with €82.5 million a year earlier. Including non-recurring items, EBIT was €69.3 million (€82.5 mm). Increased sales volumes in local currencies contributed approximately €18 million to gross profit. A slightly lower gross margin had a negative impact of approximately €2 million on gross profit. Operating expenses increased by approximately €12 million. Other income and expenses and currencies had a positive impact on EBIT of approximately €1 million.
Gross margin was 44.7 percent (45.0). The decline was mainly due to early phasing of lower margin deliveries in Winter Sports Equipment, and adverse margin development in Russia.

Earnings before taxes totaled €60.5 million (€76.0mm) and taxes were €17.2 million (€21.2mm). Earnings per share were €0.36 (€0.47). Earnings per share excluding non-recurring items were €0.49 (€0.47).
Net financial expenses were €25.9 million (€18.5mm) including net interest expenses of €20.1 million (€17.6mm). Net foreign exchange losses and other financial items totaled €5.8 million (€20.1mm). Earnings per share were €0.27 (€0.44). Earnings per share excluding non- recurring items were €0.39 (€0.44).

Cash flow and working capital
Net cash flow after investing activities (free cash flow) was € -79.3 million (€-101.4mm) in January–Sept.. Working capital in total increased by €110.0 million (€153.6mm).

Inventories increased by €107.9 million (€84.2mm) and receivables decreased by €13.8 million (increase €72.2mm). Payables decreased by €15.9 million (increase €2.8mm).

At the end of Sept., net debt amounted to €530.4 million (Sept. 30, 2013: €573.4mm). Interest-bearing liabilities amounted to €640.0 million (Sept. 30, 2013: €644.7mm), consisting of short-term debt of €278.7 million and long-term debt of €361.3 million. The average interest rate on the Groups interest-bearing liabilities was 3.6 percent (Sept. 30, 2013: 3.4 percent).

The short-term debt consists mainly of repayments of long-term loans of €162.4 million (Sept. 30, 2013: 92.4mm) and commercial papers of €114.5 (Sept. 30, 2013: 172.8mm). The total size of the commercial paper program is €500 million.

Cash and cash equivalents totaled €109.6 million (Sept. 30, 2013: €71.3mm). Amer Sports had not used any of its €240 million committed revolving credit facilities at the end of the review period.

The equity ratio at the end of Sept. was 39 percent (Sept. 30, 2013: 38 percent) and gearing was 66 percent (Sept. 30, 2013: 79 percent).

The Groups capital expenditure totaled €27.9 million (€29.9mm). Depreciation totaled € 33.4 million (€31.9mm). Capital expenditure for the whole year is expected to be approximately €45 million (€45.3mm).

Outlook for 2014
Amer Sports expects global trading conditions to remain challenging, with some regional improvements. In 2014, Amer Sports net sales growth in local currencies is expected to meet at minimum the companys long-term annual 5 percent growth target and EBIT excluding non-recurring items to improve from 2013. The company will continue to focus on the growth of Apparel and Footwear, consumer-driven product and marketing innovation, commercial expansion and operational excellence.

Net sales by business
segment

 

 

EUR million

7–9/

2014

7–9/

2013

Change

%

Change

%*)

% of sales 7–9/2014

% of sales 7–9/2013

 

2013

Winter and Outdoor

452.2

420.6

8

9

70

69

1,289.5

Ball Sports

112.9

116.7

-3

-3

17

19

551.0

Fitness

80.7

71.6

13

12

13

12

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