Mammut Eyes Costs After Disappointing First Half

Mammut's revenues fell by 4.2 percent in the first half as a negative 5.5 percent impact from exchange rates wiped out a 1.2 percent increase in organic sales of the Swiss company's mountaineering apparel, footwear and equipment, according to its parent company the Swiss conglomerate Conzetta AG.

Revenues at Mammut, which accounts for all of the revenues at Conzetta Sporting Goods segment, reached CHF 99.3 million in the first half ended June 30, compared with CHF103.7 million in the first half of 2014.

EBIT was negative CHF 5.9 million, corresponding to a margin of negative 6.0 percent, compared with positive CHF 1.5 million and 1.5 percent in the year earlier period.

Conzetta noted that revenue and EBIT at Mammut can be subject to marked seasonal variations that generally result in weaker results in the first half of the year.

“In addition, there has been a general weakening of growth in the outdoor activities market worldwide,” Conzetta wrote in its interim report. “Moreover, Mammut has to cope with high pressure on margins due to the impact on revenue of the adverse currency situation, as well as to purchasing chiefly in US dollars. This weakens the starting position of the business in its core markets in the eurozone.”

A further factor is that customers in the Swiss home market increasingly make their purchases in lower-priced markets abroad, which leads to negative price adjustments at home. In response to these tougher conditions, Mammut is adjusting its cost structures and reducing complexity. The segment further expanded its monobrand stores sales channel.

Conzetta, which also operates segments in Sheet Metal Processing, Chemical Speciallties, Systems Engineering and Real Estate, does not expect a significant change in the  economic environment in the back half of the year.

“Although the relevant markets for the Group, such as the USA and Central and Northern Europe, showed an improved performance in the first half, significant uncertainties remain: for instance, the continuing difficulties in the eurozone, the slowdown of growth in China and the strength of the Swiss franc.”

For the second half of the year, Conzetta expects the business performance of the Sporting Goods segment to improve thanks to seasonal factors, while the relevant outdoor activities markets will remain subdued.