STOCK EXCHANGE RELEASE
October 29, 2009 at 1:00 pm
* Amer Sports net sales, at EUR 1,050.6 million (1,081.3), decreased
by 3%. In local currencies, net sales decreased by 7%. Net sales
decreased by 14% in the Americas, were at last year's level in the
EMEA region and decreased by 2% for Asia Pacific in local currency
terms.
* EBIT was EUR 4.4 million (43.7). Earnings per share came to EUR
-0.11 (0.22). The weakened results reflect mainly the weaker
profitability of Amer Sports in North America. Furthermore, last
year's result includes a capital gain of EUR 13.1 million from sale
of the company's corporate headquarters building.
* In the recently completed rights offering, Amer Sports raised gross
proceeds of approximately EUR 160 million. A stronger balance sheet
provides Amer Sports with financial, operational, and strategic
flexibility that enables Amer Sports to execute its strategy.
* The market outlook for Amer Sports has not changed during the third
quarter. The company's guidance is unchanged: the Amer Sports
full-year-2009 EBIT will be below last year's level. The expected
improvement for Winter Sports Equipment due to previously
implemented cost-efficiency measures is more than offset by
weakness in other Amer Sports businesses.
7-9/ 7-9/ Change 1-9/ 1-9/ Change
EUR million 2009 2008 % %*) 2009 2008 % %*) 2008
Net sales 410.6 433.2 -5 -6 1,050.6 1,081.3 -3 -7 1,576.6
Gross profit 171.3 186.2 -8 -9 423.5 448.7 -6 -9 633.0
EBIT 40.7 51.5 -21 -21 4.4 43.7 78.9
Financing
income and
expenses -2.3 -7.7 -11.3 -22.0 -33.3
Earnings before 38.4 -12
taxes 43.8 -6.9 21.7 45.6
Net result 28.8 32.9 -12 -5.2 16.3 34.0
Earnings per
share,
EUR 0.38 0.45 -16 -0.11 0.22 0.47
*) Change in local currency terms.
ROGER TALERMO, PRESIDENT AND CEO:
"The overall sales trend during the third quarter followed the one
seen during the first half of the year. The US market continues to be
more challenging than the European market, and consumers have been
moving to value price points. Due to a warm fall in Central Europe,
the trade requested later deliveries of pre-ordered winter sports
equipment, which partly explains the decline in sales for Amer Sports
of 6% in the third quarter.
"As we stated earlier, our key priority in 2009 is to strengthen the
Amer Sports balance sheet. Our programs aimed at reducing inventories
and receivables are currently ahead of the plan. With the recently
completed rights offering, Amer Sports is well equipped to continue
to implement its strategy, even if the macroeconomic recession is
prolonged.
"We do not anticipate a quick recovery of the sporting goods market,
even if trading conditions would start to improve next year. Hence,
we will continue to focus on strict cost control and we are planning
to take our cost base further down in order to protect the Amer
Sports bottom line. We are also considering alternatives to shift the
focus of the business portfolio more towards categories where we
believe the best long-term opportunities exist and where the best
group-wide synergies can be achieved."
NET SALES AND EBIT IN JULY-SEPTEMBER
Net sales for Amer Sports, at EUR 410.6 million (433.2), showed a 5%
decrease. In local currencies, net sales decreased by 6%.
Net sales by business segment were as follows: Winter and Outdoor
64%, Ball Sports 25%, and Fitness 11%. Sales for Winter and Outdoor
decreased by 2%, for Ball Sports by 7%, and for Fitness by 19%. In
local currency terms, Winter and Outdoor's net sales decreased by 2%,
with Ball Sports sales decreasing by 9% and Fitness sales decreasing
by 20%.
The distribution of net sales by geographical region was as follows:
the Americas 40%, EMEA 50%, and Asia Pacific 10%. Sales in the
Americas decreased by 12% and were at last year's level for EMEA. For
Asia Pacific, net sales increased by 5%. In local currency terms, net
sales decreased by 14% in the Americas and were at last year's level
for both EMEA and Asia Pacific.
The Group's EBIT was EUR 40.7 million (51.5). The weakened results
reflect mainly the weaker profitability of the North American
operations of Amer Sports.
Earnings before taxes were EUR 38.4 million (43.8), and earnings per
share came to EUR 0.38 (0.45). Net financial expenses amounted to EUR
2.3 million (7.7), which included EUR 3.3 million in unrealized
foreign exchange gains.
NET SALES AND EBIT IN THE REVIEW PERIOD, JANUARY-SEPTEMBER
Amer Sports net sales, EUR 1,050.6 million (1,081.3), saw a decrease
of 3%. In local currency terms, net sales decreased by 7%.
Net sales by business segment were as follows: Winter and Outdoor
51%, Ball Sports 36%, and Fitness 13%. Sales were at last year's
level for Winter and Outdoor and Ball Sports. Net sales of Fitness
decreased by 16%. In local currency terms, Winter and Outdoor's net
sales were at last year's level, those of Ball Sports decreased by
7%, and Fitness' net sales decreased by 23%.
By geographical region, net sales were as follows: the Americas 44%,
EMEA 45% and Asia Pacific 11%. Sales decreased in the Americas by 7%
and were at last year's level for EMEA. For Asia Pacific, net sales
increased by 6%. In local currency terms, net sales decreased by 14%
in the Americas and by 2% for Asia Pacific but were at last year's
level for EMEA.
The Group's EBIT was EUR 4.4 million (43.7). The weakened results
reflect mainly the weaker profitability of Amer Sports North American
operations. Furthermore, last year's result includes a capital gain
of EUR 13.1 million from sale of the company's corporate headquarters
building.
Earnings before taxes came to EUR -6.9 million (21.7). Earnings per
share were EUR -0.11 (0.22). Net financial expenses, which amounted
to EUR 11.3 million (22.0), included EUR 7.9 million in unrealized
foreign exchange gains.
CAPITAL EXPENDITURE
The Group's capital expenditure on fixed assets totaled EUR 21.5
million (23.1). The Group's depreciation figure was EUR 25.4 million
(25.7).
RESEARCH AND DEVELOPMENT
EUR 37.9 million (39.6) was invested in research and development,
representing 3.6% of net sales.
FINANCIAL POSITION AND CASH FLOW
Amer Sports had interest-bearing liabilities at the end of September
of EUR 627.2 million (628.5), consisting of short-term debt of EUR
158.1 million and long-term debt of EUR 469.1 million. Liquid assets
amounted to EUR 62.4 million (24.8) at the end of the period. The
Group's net debt was EUR 564.8 million (603.7). Amer Sports total
unused committed credit facilities amounted to EUR 140.0 million.
Amer Sports has a EUR 325 million committed revolving credit
facility, maturing in 2011 and 2012, of which EUR 295 million has
been used. Furthermore, the company has, as of January 2009,
committed revolving credit facilities of EUR 60 million maturing in
2010 and a EUR 50 million committed revolving credit facility, agreed
in August, to mature when Amer Sports has received the proceeds from
the rights offering but no later than on November 15, 2009.
Amer Sports long-term debt consists of a EUR 75 million private
placement bond maturing in 2011, a USD 100 million term loan and
draw-downs totaling EUR 295 million as part of the originally EUR 575
million loan syndicate of 2005 (maturing in 2011 and 2012), and a EUR
28.6 million pension loan.
Short-term financing is mainly raised with a domestic commercial
paper program, of which EUR 148.8 million had been used at the end of
September.
In March, Amer Sports Corporation issued a EUR 60 million hybrid bond
in order to strengthen the Group's capital structure and to repay
existing debt. The coupon rate of the bond is 12.0% per annum. The
bond has no maturity, but the company may call the bond after three
years. The hybrid bond is unsecured and subordinated to all senior
debt and is treated as equity in the Amer Sports consolidated
financial statements. The hybrid bond does not confer shareholders'
rights, nor does it dilute the holdings of shareholders.
The equity ratio at the end of September was 35.9 (30.9) and gearing
was 104% (124).
Net cash flow from operating activities after interest and taxes was
EUR 33.3 million (9.9). Net cash flow from investing activities was
EUR -22.0 million (6.5).
A EUR 160 million rights offering
As part of Amer Sports' measures to improve its balance sheet, it
undertook a rights offering that was completed on October 23, 2009.
Amer Sports raised gross proceeds of approximately EUR 160 million in
the rights offering. The proceeds from the rights offering will be
used to strengthen the financial position of Amer Sports and to
improve the company's operational and strategic flexibility. As of
September 30, 2009 Amer Sports had a net gearing of 104%. The rights
offering will strengthen the balance sheet such that the gearing
would have been 60% on a pro forma basis on September 30, 2009.
The Extraordinary General Meeting of shareholders of Amer Sports held
on September 23, 2009 authorized the Board of Directors to undertake
a share issue. On September 24, 2009 Amer Sports announced the terms
and conditions of its rights offering, and on September 28, 2009 it
published an offering circular relating to the offering of 48,471,734
new shares.
The final outcome of the Amer Sports rights offering shows that
48,070,466 shares, representing 99.2% of the total number of shares
offered, were subscribed for with subscription rights. The remaining
401,268 shares, or 0.8% of the total number of shares offered, were
subscribed for without subscription rights, have been allocated
according to the principles described in the prospectus published on
September 28, 2009. The rights offering was oversubscribed with a
total subscription level of 149.1%. Trading in the new shares
alongside the existing shares started on October 27, 2009.
As a result of the rights offering, the number of Amer Sports' shares
increased by 48,471,734 to 121,517,285 shares. The total net proceeds
of the rights offering amounted to approximately EUR 152 million.
BUSINESS SEGMENTS
WINTER AND OUTDOOR
7-9/ 7-9/ Change 1-9/ 1-9/ Change
EUR million 2009 2008 % %*) 2009 2008 % %*) 2008
Net sales
Winter Sports 119.6 128.7 -7 -8 168.0 182.2 -9 378.9
Equipment -8
Apparel and 99.3 93.5 6 7 230.9 204.0 14 277.9
Footwear 13
Cycling 21.5 23.5 -9 -10 73.3 82.9 -12 -14 114.2
Sports Instruments 22.0 21.9 0 -1 61.2 65.1 -6 -8 89.8
Net sales, total 262.4 267.6 -2 -2 533.4 534.2 0 -1 860.8
EBIT 44.1 45.7 -4 -4 4.0 4.4 -9 -7 41.1
*) In local currency terms.
In January-September, Winter and Outdoor's net sales of EUR 533.4
million were at last year's level in local currency terms. The
breakdown of net sales by business area was as follows: Winter Sports
Equipment 32%, Apparel and Footwear 43%, Cycling 14%, and Sports
Instruments 11%. EMEA accounted for 66%, the Americas for 24%, and
Asia Pacific for 10% of net sales. Sales in local currencies were
down 12% in the Americas and 5% for Asia Pacific, but were up 5% for
EMEA.
The EBIT of EUR 4.0 million (4.4) fell by 7% in local currency terms.
Business areas
In the review period, Winter Sports Equipment's net sales decreased
by 9% in local currencies. Third-quarter sales decreased by 8%, due
to later timing of deliveries. The order book for the 2009/10 season
is on last year's level with strong growth in cross-country skiing
and protective items. The order level in North America is
significantly below last year's level, whereas it is up in Central
Europe and in Scandinavia. Profitability in the Winter Sports
Equipment business is clearly improving in 2009 because of previously
implemented cost efficiency measures.
In local currencies, Apparel and Footwear's net sales grew by 14% in
the review period, with this growth being driven particularly by
Salomon. The US market has remained depressed, while demand in Europe
has remained encouraging with good reorders of Salomon footwear.
Overall delivery performance is very positive, and inventory
management continues to improve according to targets. This allows the
products to be in the stores early, which aids in selling out and
increases the likelihood of reorders.
Bicycle component manufacturer Mavic's net sales declined by 14% in
local currencies, reflecting the impact of the R-Sys recall, a weak
US economy, a general trend towards lower inventory at independent
bike dealer level (IBD), and a significant decline in OEM sales. In
the third quarter, Mavic's sales fell in local currencies by 10%.
Mavic apparel and footwear product lines have been well received in
the market. On September 1, Amer Sports announced that it is
currently exploring strategic alternatives regarding its cycling
business, Mavic. Among other alternatives, the strategic review may
result in a divestiture of this asset.
In the review period, the net sales of Sports Instruments were 8%
below last year's level in local currencies but were flat in the
third quarter. Net sales declined in diving instruments and in the
US, but the demand for diving instruments have recently shown some
positive signs. During the third quarter, shipments of the new
premium watch line, Elementum started. Suunto's cost savings program
is proceeding as planned.
BALL SPORTS
7-9/ 7-9/ Change 1-9/ 1-9/ Change
EUR million 2009 2008 % %*) 2009 2008 % %*) 2008
Net sales
Racquet Sports 52.8 56.7 -7 -9 181.8 181.9 0 -5 227.0
Team Sports 35.8 38.0 -6 -10 143.7 137.1 5 -5 189.9
Golf 14.8 15.9 -7 -8 56.5 66.5 -15 -17 78.6
Net sales, total 103.4 110.6 -7 -9 382.0 385.5 -1 -7 495.5
EBIT 2.4 6.6 -64 -64 21.3 33.6 -37 -41 37.0
*) In local currency terms.
In January-September, Ball Sports had net sales of EUR 328.0 million,
showing a decline by 7% in local currencies. The breakdown of net
sales by business area was as follows: Racquet Sports 47%, Team
Sports 38%, and Golf 15%. Of the net sales, the Americas generated
62%, EMEA 25%, and Asia Pacific 13%. In local currency terms, the
Americas declined by 11% and EMEA by 4%, while Asia Pacific grew by
8%.
The EBIT figure, EUR 21.3 million (33.6), was weakened by 41% in
local currency terms and was driven by volume declines and lower
gross margins. The gross margins have been negatively affected by
aggressive actions to reduce inventories and the trend of consumers
gravitating to value price points as a result of the recession.
Business areas
In local currencies, Racquet Sports' net sales declined by 5%. In
local currencies, the Americas saw a decline in business of 13%, EMEA
a decline of 3%, and Asia Pacific growth by 10%. The decline in the
Americas was driven by the United States, where net sales were
adversely influenced by the economic recession. Wilson remained the
number-one brand in tennis, highlighted by being the choice of the
most tour players in the US. The growth in Asia continued to be
driven by the expanded distribution in China. In local currencies,
the badminton category grew by 31% for the period under review.
In local currencies, Team Sports' net sales declined by 5%. The
Americas saw a decline of 6% and EMEA one of 17%, while Asia Pacific
grew by 34% in local currencies. About 84% of the Team Sports
business is generated in the United States driving the overall
trends. In the challenging economic environment, DeMarini bats
continued to gain market share in all segments of the business by
keeping sales flat at the previous year's levels. The Soccer business
grew by 14%, driven by Latin American market expansion and the new
NCAA Match Ball adoption. The market for American footballs, where
market shares are strong, experienced softness with an 11% decline.
In local currencies, Golf' net sales declined by 17%. However, Golf's
sales trend improved in the third quarter. The net sales declines by
region are 26% in the Americas, 5% for the EMEA region and 20% for
Asia Pacific in local currencies.
FITNESS
7-9/ 7-9/ Change 1-9/ 1-9/ Change
EUR million 2009 2008 % %*) 2009 2008 % %*) 2008
Net sales 44.8 55.0 -19 -20 135.2 161.6 -16 -23 220.3
EBIT -1.4 2.8 -7.0 6.1 3.8
*) In local currency terms.
In January-September, Fitness' net sales declined by 23% in local
currencies to EUR 135.2 million. The Americas accounted for 73%, EMEA
for 19%, and Asia Pacific for 8% of net sales. In local currency
terms, sales were down 23% in the Americas, 19% for EMEA, and 25% for
Asia Pacific.
EBIT decreased to EUR -7.0 million (6.1) due to the significant fall
in sales and lower gross margins, resulting from a lower capacity
utilization rate and pricing pressure. Precor will continue to focus
on cost savings to return to profitability.
The market situation is unchanged from that of the first half of
2009, with the general economic climate being the largest driver of
Precor's performance. In local currencies, net sales for the third
quarter decreased by 20%.
Demand for commercial equipment for both North America and EMEA has
been affected as customers defer purchase decisions in light of the
financial uncertainty. The specialty fitness stores are generating as
little as half the business they did during the peak of 2007.
Availability of credit and of financing (i.e. leasing) are also
having an impact, particularly in Europe. A few perceptive commercial
customers are taking advantage of the situation to upgrade their
facilities and move ahead of their competition.
Consumer products sales have been greatly affected by significant
lower consumer spending due to the uncertain economic environment and
significant reduction among specialty dealers in comparison to the
previous year. Consumer sales' pick-up in the late fall and the
coming season will be an important measure of the health of the
market.
Two bright spots in the Precor portfolio are the AMT and selectorized
strength. The AMT continues to enjoy increased market penetration as
many customers increase the number of units installed per club
location, and selectorized strength is growing in comparison to the
previous year, thanks to the introduction of two new lines.
Construction of the new strength equipment production facility in
North Carolina is on track for December occupancy. This facility will
both provide needed capacity for the recently launched selectorized
strength lines and reduce manufacturing costs.
PERSONNEL
At the end of September, the Group employed 6,455 people (6,138). The
Group employed an average of 6,345 people (6,264) during the review
period. This increase is mainly due to the acquisition of the
Bulgarian production facility in 2008 (486 employees).
+------------------------------------------------------------------+
| | September 30, 2009 | September 30, | Change |
| | | 2008 | % |
|--------------------+--------------------+---------------+--------|
| Winter and Outdoor | 4,067 | 3,570 | 14 |
|--------------------+--------------------+---------------+--------|
| Ball Sports | 1,618 | 1,714 | -6 |
|--------------------+--------------------+---------------+--------|
| Fitness | 699 | 790 | -12 |
|--------------------+--------------------+---------------+--------|
| Headquarters | 71 | 64 | 11 |
|--------------------+--------------------+---------------+--------|
| Total | 6,455 | 6,138 | 5 |
+------------------------------------------------------------------+
+------------------------------------------------------------+
| | September 30, 2009 | September 30, | Change |
| | | 2008 | % |
|--------------+--------------------+---------------+--------|
| EMEA | 3,717 | 3,234 | 15 |
|--------------+--------------------+---------------+--------|
| Americas | 2,187 | 2,346 | -7 |
|--------------+--------------------+---------------+--------|
| Asia Pacific | 551 | 558 | -1 |
|--------------+--------------------+---------------+--------|
| Total | 6,455 | 6,138 | 5 |
+------------------------------------------------------------+
NEW MANAGEMENT MODEL
Amer Sports Corporation reorganized its management model by creating
one group-wide Amer Sports management team. The purpose of the new
Executive Board is to strengthen the development and consistent
execution of Amer Sports corporate strategy across all business areas
and regions, driving Group integration, common goals, and the Group's
overall performance.
Amer Sports Executive Board members are presented in more detail at
www.amersports.com/about.
SHARES AND SHAREHOLDERS
At the end of September Amer Sports had 13,808 registered
shareholders (12,243). Nominee registrations represented 49.7%
(44.1%) of the shares.
In the course of the period, in total, 55.3 million Amer Sports
shares were traded on the NASDAQ OMX Helsinki exchange, to a total
value of EUR 365.3 million. The share turnover was 76.0% (of the
average number of shares, excluding own shares).
At the close of the review period, the last trading in Amer Sports
Corporation shares was at EUR 5.92. The high for the period on the
NASDAQ OMX Helsinki exchange was EUR 9.00, and the low EUR 4.69. The
average share price was EUR 6.61.
The company's paid-in share capital recorded in the Trade Register as
of September 30, 2009 was EUR 292,182,204, and the number of shares
outstanding was 73,045,551. As a result of the rights offering, the
number of Amer Sports' shares increased on October 26, 2009 by
48,471,734 shares to 121,517,285 shares. Amer Sports has 337,950 own
shares, which are owned by Amer Sports International Oy. The number
of own shares corresponds to 0.5% of all Amer Sports shares.
On September 30, 2009, the company had a market capitalization of EUR
430.4 million, excluding own shares.
Major changes in holdings, January-September 2009
Amer Sports Corporation received information on February 19, 2009 to
the effect that Novator Finland Oy had converted all of its NASDAQ
OMX forward contracts into direct holdings in shares of Amer Sports
Corporation on February 18, 2009. On July 2, 2009, Amer Sports
Corporation was notified that Novator Finland Oy had sold its entire
holding of shares in the company.
The stock exchange announcements on major changes in shareholdings
can be found on the Amer Sports Web pages at
www.amersports.com/investors.
RESOLUTIONS OF THE GENERAL MEETINGS OF SHAREHOLDERS
Amer Sports' Annual General Meeting of shareholder held on March 5,
2009, authorized the Board of Directors to decide on issuing new
shares on the following terms and conditions: New shares may be
issued and the company's own shares held by the company may be
conveyed against payment ("Share Issue Against Payment") to the
company's shareholders in proportion to their current shareholdings
in the company. By virtue of the authorization, the Board of
Directors is entitled to decide on issuing a maximum of 7,000,000 new
shares. The subscription price of the new shares shall be booked to
the invested non-restricted equity fund. The authorization to issue
shares is valid until two years from the date of the decision of the
Annual General Meeting.
On April 17, 2009, the Board of Directors of Amer Sports Corporation
decided to cancel the Extraordinary General Meeting summoned to be
held on April 28, 2009, after receiving notice of Novator Finland
Oy's cancellation of its demand for an Extraordinary General Meeting.
The Extraordinary General Meeting of shareholders of Amer Sports held
on September 23, 2009 authorized the Board of Directors to undertake
a share issue for consideration in which the shareholders were
entitled to subscribe for new shares in proportion to their prior
shareholding. The Board of Directors was authorized to decide upon
offering any shares that may remain unsubscribed for pursuant to the
shareholders' pre-emptive rights to parties determined by the Board
of Directors. By virtue of the authorization, the Board of Directors
was entitled to decide on issuing a maximum of 150,000,000 new shares
in the share issue. The Board of Directors was authorized to
determine the other terms and conditions of the share issue. The
authorization of the Board of Directors to undertake the share issue
did not supersede or otherwise invalidate the share issue
authorization granted to the Board of Directors by the Annual General
Meeting on March 5, 2009.
The documentation and press releases related to the meetings are
available on the company's Web site, at www.amersports.com.
BUSINESS RISKS AND UNCERTAINTY FACTORS
Amer Sports Corporation's short-term risks are particularly
associated with consumer demand in North America and Europe. Further
information on the company's business risks and uncertainty factors
is available on the company's Web site, at
www.amersports.com/investors.
EVENTS AFTER THE REVIEW PERIOD
On October 2, 2009, Mr. Antti Jääskeläinen (Finnish citizen born in
1972) was named Amer Sports Chief Development Officer. The newly
created position was established to strengthen the Amer Sports
management in strategic planning and execution. Mr. Jääskeläinen will
join Amer Sports on December 1, 2009. He will report to Amer Sports'
President and CEO Roger Talermo and will be a member of the Executive
Board.
The company announced on October 23, 2009 that the final outcome of
Amer Sports rights offering shows that 48,070,466 million shares,
representing 99.2% of the total number of shares offered, were
subscribed for with subscription rights. The remaining 401,268 shares
were subscribed for without subscription rights. As a result of the
rights offering, the number of Amer Sports' shares increased by
48,471,734 shares to 121,517,285 shares. The total net proceeds of
the rights offering amounted to approximately EUR 152 million.
Amendments to the terms and conditions of the warrant programs
Pursuant to the terms and conditions of Amer Sports' warrant
programs, the Board of Directors of Amer Sports must amend the terms
and conditions of the warrant programs to take into account the
impact of the rights offering by adjusting the exercise price of the
warrants and/or the number of shares that can be subscribed for
through exercise of the warrants in a manner to be determined by the
Board of Directors. On October 29, 2009, Amer Sports' Board of
Directors decided on such amendments. The terms and conditions of its
publicly traded 2004 warrants were amended to the effect that each
2004 warrant entitles its holder to subscribe for 5 shares at the
subscription price of EUR 9.44 per share.
OUTLOOK FOR 2009
The market outlook for Amer Sports has not changed during the third
quarter. The company's guidance is unchanged: the Amer Sports
full-year-2009 EBIT will be below last year's level. The expected
improvement for Winter Sports Equipment due to previously implemented
cost-efficiency measures is more than offset by weakness in other
Amer Sports businesses.
TABLES
The notes are an integral part of consolidated interim financial
information.
Unaudited
EUR million
CONSOLIDATED RESULTS
1-9/ 1-9/ Change 7-9/ 7-9/ Change
2009 2008 % 2009 2008 % 2008
NET SALES 1,050.6 1,081.3 -3 410.6 433.2 -5 1,576.6
Cost of goods
sold -627.1 -632.6 -239.3 -247.0 -943.6
GROSS PROFIT 423.5 448.7 -6 171.3 186.2 -8 633.0
License income 6.6 10.2 2.0 3.3 14.3
Other operating
income 4.9 15.7 1.0 0.4 18.9
R&D expenses -37.9 -39.6 -11.5 -11.4 -55.6
Selling and
marketing
expenses -287.4 -293.6 -90.2 -95.0 -406.2
Administrative
and other
expenses -105.3 -97.7 -31.9 -32.0 -125.5
EARNINGS BEFORE
INTEREST AND
TAXES 4.4 43.7 40.7 51.5 -21 78.9
% of net sales 0.4 4.0 9.9 11.9 5.0
Financing income
and expenses -11.3 -22.0 -2.3 -7.7 -33.3
EARNINGS BEFORE
TAXES -6.9 21.7 38.4 43.8 -12 45.6
Taxes 1.7 -5.4 -9.6 -10.9 -11.6
NET RESULT -5.2 16.3 28.8 32.9 -12 34.0
Attributable to:
Equity holders of
the parent
company -5.3 16.2 28.7 32.8 33.9
Minority
interests 0.1 0.1 0.1 0.1 0.1
Earnings per
share, EUR -0.11 0.22 0.38 0.45 0.47
Earnings per
share, diluted,
EUR -0.11 0.22 0.38 0.45 0.47
Adjusted average
number of
shares in issue
less own shares,
million 72.7 72.5 72.7 72.5 72.5
Adjusted average
number of
shares in issue
less own shares,
diluted, million 72.7 72.5 72.7 72.5 72.5
Equity per share,
EUR 7.41 6.69 6.95
ROCE, % *) 3.8 5.5 7.9
ROE, % -1.3 4.3 6.7
Average rates
used:
EUR 1.00 = USD 1.36 1.52 1.47
*) 12 months' rolling average
STATEMENT OF COMPREHENSIVE INCOME
1-9/ 1-9/ 7-9/ 7-9/
2009 2008 2009 2008 2008
Net result -5.2 16.3 28.8 32.9 34.0
Other comprehensive income
Translation differences -6.3 -4.0 -5.8 12.6 4.3
Cash flow hedges -0.6 4.0 1.0 -1.1 -4.7
Income tax related to
components of other
comprehensive income 0.2 -1.0 -0.2 0.3 1.2
Other comprehensive income,
net of tax -6.8 -1.0 -5.1 11.8 0.8
Total comprehensive income -12.0 15.3 23.7 44.7 34.8
Total comprehensive income attributable to:
Equity holders of the parent
company -12.1 15.2 23.6 44.6 34.7
Minority interests 0.1 0.1 0.1 0.1 0.1
NET SALES BY BUSINESS SEGMENT
1-9/ 1-9/ Change 7-9/ 7-9/ Change
2009 2008 % 2009 2008 % 2008
Winter and Outdoor 533.4 534.2 0 262.4 267.6 -2 860.8
Ball Sports 382.0 385.5 -1 103.4 110.6 -7 495.5
Fitness 135.2 161.6 -16 44.8 55.0 -19 220.3
Total 1,050.6 1,081.3 -3 410.6 433.2 -5 1,576.6
EBIT BY BUSINESS SEGMENT
1-9/ 1-9/ Change 7-9/ 7-9/ Change
2009 2008 % 2009 2008 % 2008
Winter and Outdoor 4.0 4.4 -9 44.1 45.7 -4 41.1
Ball Sports 21.3 33.6 -37 2.4 6.6 -64 37.0
Fitness -7.0 6.1 -1.4 2.8 3.8
Headquarters -13.9 -0.4 -4.4 -3.6 -3.0
Total 4.4 43.7 40.7 51.5 -21 78.9
GEOGRAPHIC BREAKDOWN OF NET SALES
1-9/ 1-9/ Change 7-9/ 7-9/ Change
2009 2008 % 2009 2008 % 2008
Americas 465.9 499.0 -7 163.6 185.7 -12 677.8
EMEA 468.9 473.5 -1 204.0 206.6 -1 723.0
Asia Pacific 115.8 108.8 6 43.0 40.9 5 175.8
Total 1,050.6 1,081.3 -3 410.6 433.2 -5 1,576.6
CONSOLIDATED CASH FLOW STATEMENT
Note 1-9/2009 1-9/2008 2008
EBIT 4.4 43.7 78.9
Adjustments to cash flow from operating
activities and depreciation 25.4 12.4 20.6
Change in working capital 39.5 -15.9 -42.6
Cash flow from operating activities
before
financing items and taxes 69.3 40.2 56.9
Interest paid and received -20.2 -19.7 -31.9
Income taxes paid -15.8 -10.6 -14.5
Cash flow from operating activities 33.3 9.9 10.5
Company acquisitions -1.2 - -2.5
Company divestments - 3.6 3.6
Capital expenditure on non-current
tangible
and intangible assets -21.5 -23.1 -43.1
Proceeds from sale of tangible
non-current
assets 0.7 26.0 27.4
Cash flow from investing activities -22.0 6.5 -14.6
Dividends paid 5 -11.8 -36.3 -36.4
Hybrid bond 3 60.0 - -
Change in net debt and other financial 3 42.8
items -69.2 -23.5
Cash flow from financing activities -21.0 -59.8 6.4
Liquid funds on January 1 72.1 68.0 68.0
Translation differences 0.0 0.2 1.8
Change in liquid funds -9.7 -43.4 2.3
Liquid funds on September 30/December 31 62.4 24.8 72.1
CONSOLIDATED BALANCE SHEET
September 30, September 30, December 31,
Note 2009 2008 2008
Assets
Goodwill 270.3 270.4 279.3
Other intangible 205.5
non-current assets 205.5 207.5
Tangible non-current 128.6
assets 125.2 135.3
Other non-current 62.1
assets 65.3 65.9
Inventories and work in 311.1
progress 378.4 346.0
Receivables 469.3 514.0 555.8
Cash and cash 62.4
equivalents 24.8 72.1
Assets 2 1,509.3 1,583.6 1,661.9
Shareholders' equity
and liabilities
Shareholders' equity 3 541.3 488.7 508.1
Long-term 3
interest-bearing 469.1
liabilities 275.7 434.9
Other long-term 13.1
liabilities 17.3 22.0
Current 3
interest-bearing 158.1
liabilities 352.8 252.8
Other current 300.3
liabilities 380.3 389.0
Provisions 27.4 68.8 55.1
Shareholders' equity 1,509.3
and liabilities 1,583.6 1,661.9
Equity ratio, % 35.9 30.9 30.6
Gearing, % 104 124 121
EUR 1.00 = USD 1.47 1.46 1.39
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Fair Total
Fund Trans- value share-
Sh- Pre- for lation and Retai- Mino- hold-
are mi- own diffe- other ned rity Hyb- ers'
capi- um sha- ren- reser- ear- inte- rid equ-
Note tal fund res ces ves nings Total rests bond ity
Balance on
Jan. 1,
2008 289.3 15.0 -7.5 -66.8 -2.7 278.9 506.2 3.5 - 509.7
Total
comp-
rehensive
income -4.0 3.0 16.2 15.2 0.1 15.3
Dividend
distribution 5 -36.3 -36.3 -36.3
Reissu-
ance of
own
shares 1.8 1.8 1.8
Warrants -0.9 -0.9 -0.9
Warrants
exercised 2.9 -2.9 0.0 0.0
Other
change in
minority
interests -0.9 -0.9
Balance on
Sep. 30,
2008 292.2 12.1 -5.7 -70.8 0.3 257.9 486.0 2.7 - 488.7
Balance on
Jan. 1,
2009 292.2 12.1 -5.7 -62.5 -6.2 275.6 505.5 2.6 - 508.1
Total
comp-
rehensive
income -6.3 -0.5 -5.3 -12.1 0.1 -12.0
Dividend
distribution 5 -11.6 -11.6 -0.2 -11.8
Hybrid
bond 3 -3.0 -3.0 60.0 57.0
Balance on
Sep. 30,
2009 292.2 12.1 -5.7 -68.8 -6.7 255.7 478.8 2.5 60.0 541.3
QUARTERLY BREAKDOWN OF NET SALES AND EBIT
Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ Q4/
NET SALES 2009 2009 2009 2008 2008 2008 2008 2007
Winter and Outdoor 262.4 106.6 164.4 326.6 267.6 104.6 162.0 304.9
Ball Sports 103.4 135.7 142.9 110.0 110.6 130.9 144.0 107.0
Fitness 44.8 42.4 48.0 58.7 55.0 49.6 57.0 85.2
Total 410.6 284.7 355.3 495.3 433.2 285.1 363.0 497.1
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
EBIT 2009 2009 2009 2008 2008 2008 2008 2007
Winter and Outdoor 44.1 -29.2 -10.9 36.7 45.7 -26.7 -14.6 35.2
Ball Sports 2.4 7.4 11.5 3.4 6.6 11.3 15.7 8.0
Fitness -1.4 -2.2 -3.4 -2.3 2.8 -0.4 3.7 13.0
Headquarters -4.4 -5.4 -4.1 -2.6 -3.6 8.0 -4.8 -2.5
Total 40.7 -29.4 -6.9 35.2 51.5 -7.8 0.0 53.7
THE AMER SPORTS NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
The interim financial information has been prepared in accordance
with IAS 34 'Interim Financial Reporting' and in compliance with IFRS
standards and interpretations in force as at January 1, 2009, as
adopted by the EU. The IFRS recognition and measurement principles as
described in the annual financial statements for 2008 have also been
applied in the preparation of the interim financial information, with
the changes mentioned below.
The relative proportion of the estimated tax charge for the full
financial year has been charged against the result for the period.
In key figures, the hybrid bond has been included in shareholders'
equity. Interest expenses for the hybrid bond have been accrued on
the basis of its coupon rate of 12% and are debited directly to
retained earnings net of tax. In the calculation of earnings per
share, interest expenses of the hybrid bond have been included in the
earnings for the period.
Standards and interpretations adopted from the beginning of 2009:
IAS 1 (Revised), "Presentation of Financial Statements": The revised
standard prohibits the presentation of income and expenses items
(that is, "non-owner changes in equity") in the statement of changes
in equity, requiring "non-owner changes in equity" to be presented
separately from owner changes in equity. All non-owner changes in
equity will be required to be shown in a performance statement, but
entities can choose whether to present one performance statement (the
statement of comprehensive income) or two statements (the income
statement and statement of comprehensive income). Where entities
restate or reclassify comparative information, they are required to
present a restated balance sheet as from the beginning of the
comparative period in addition to the current requirement to present
balance sheets for the end of the current period and of the
comparative period. The company applies IAS 1 (Revised) from January
1, 2009. Both the income statement and the statement of comprehensive
income are presented as performance statements.
IFRS 8, "Operating Segments": IFRS 8 replaces IAS 14, "Segment
Reporting." The new standard requires a "management approach," under
which segment information is presented on the same basis as that used
for internal reporting purposes. IFRS 8 has not changed the company's
segmentation, which is consistent with the company's internal
reporting. Furthermore, IFRS 8 requires disclosures, e.g., about the
company's geographical areas of operation and significant customers.
Other changes in accounting policies:
The committed revolving credit facilities used that mature in 2011
and 2012 are reclassified as long-term interest-bearing liabilities.
Comparative information for 2008 has been restated accordingly.
2. SEGMENT INFORMATION
Amer Sports has three business segments: Winter and Outdoor, Ball
Sports and Fitness.
The accounting policies for segment reporting do not differ from the
Group's accounting policies and have not changed due to the adoption
of IFRS 8. The decisions concerning assessing the performance of
segments and allocating resources to the segments are based on
segments' net sales and earnings before interest and taxes. The chief
operating decision maker of Amer Sports is the Executive Board.
The adoption of IFRS 8 has not changed the "reportable segments" for
Amer Sports, since the segment information previously presented by
the Group was based on internal management reporting. Adoption of the
standard affected only the presentation of the information.
There were no intersegment business operations during the reported
periods.
Earnings Financing
before income Earnings
interest and and before
Net sales taxes expenses taxes Assets
1-9/2009
Winter and Outdoor 533.4 4.0 4.0 808.5
Ball Sports 382.0 21.3 21.3 319.1
Fitness 135.2 -7.0 -7.0 209.4
Segments, total 1,050.6 18.3 18.3 1,337.0
Unallocated items*) -13.9 -11.3 -25.2 172.3
Group total 1,050.6 4.4 -11.3 -6.9 1,509.3
1-9/2008
Winter and Outdoor 534.2 4.4 4.4 869.6
Ball Sports 385.5 33.6 33.6 351.4
Fitness 161.6 6.1 6.1 241.5
Segments, total 1,081.3 44.1 44.1 1,462.5
Unallocated items*) -0.4 -22.0 -22.4 121.1
Group total 1,081.3 43.7 -22.0 21.7 1,583.6
2008
Winter and Outdoor 860.8 41.1 41.1 875.4
Ball Sports 495.5 37.0 37.0 381.1
Fitness 220.3 3.8 3.8 245.3
Segments, total 1,576.6 81.9 81.9 1,501.8
Unallocated items*) -3.0 -33.3 -36.3 160.1
Group total 1,576.6 78.9 -33.3 45.6 1,661.9
*) Earnings before interest and taxes include income and expenses of
corporate headquarters.
GEOGRAPHIC BREAKDOWN OF NET SALES
1-9/ 1-9/
2009 2008 2008
Americas 465.9 499.0 677.8
EMEA 468.9 473.5 723.0
Asia Pacific 115.8 108.8 175.8
Total 1,050.6 1,081.3 1,576.6
3. FINANCIAL LIABILITIES
Hybrid bond
In March, Amer Sports Corporation issued a EUR 60 million hybrid bond
in order to strengthen the Group's capital structure and to repay
existing debt. The coupon rate of the bond is 12.0% per annum. The
bond has no maturity but the company may call the bond after three
years. The hybrid bond is unsecured and subordinated to all senior
debt and is treated as equity in Amer Sports' consolidated financial
statements. The hybrid bond does not confer shareholders' rights, nor
does it dilute the holdings of shareholders.
Reclassification of the credit facility:
Committed revolving credit facilities used that mature in 2011 and
2012 are presented under long-term interest-bearing liabilities.
Comparative information for 2008 has been restated accordingly.
Restatement had EUR 255 million in effects on short-term and
long-term liabilities at the end of 2008 and EUR 95 million for
September 30, 2008.
4. DERIVATIVE FINANCIAL INSTRUMENTS
September September December
30, 2009 30, 2008 31, 2008
Nominal value
Foreign exchange forward contracts 560.9 488.8 604.3
Forward rate agreements 150.0 0.0 0.0
Interest rate swaps 143.2 218.3 221.9
Fair value
Foreign exchange forward contracts 13.9 -1.3 -1.1
Forward rate agreements -0.1 0.0 0.0
Interest rate swaps -6.6 -1.0 -7.6
5. DIVIDENDS
Dividends distributed by Amer Sports to its shareholders and minority
shareholders of its subsidiaries amounted to EUR 11.8 million at the
end of March 2009 relating to the year ending on December 31, 2008
(EUR 0.16 / share for shareholders of Amer Sports Corporation,
totaling EUR 11.6 million).
6. CONTINGENT LIABILITIES AND SECURED ASSETS
September September December
30, 2009 30, 2008 31, 2008
Mortgages pledged 0.0 0.0 0.0
Guarantees 9.3 5.0 8.5
Liabilities for leasing and rental
agreements 106.1 111.2 106.6
Other liabilities 38.7 44.5 46.1
There are no guarantees or contingencies given for the management of
the company, the shareholders or the associated companies.
7. SEASONALITY
The business of Amer Sports is subject to seasonality; even though
the Group operates in many sports equipment segments during all four
seasons. Third and fourth quarters have historically been the
strongest for Amer Sports (measured by net sales and profitability),
because winter sports equipment typically is sold before the winter
season, in the third and fourth quarter. Pre-orders of winter sports
equipment for 2009/2010 were at last year's level. During the third
quarter, apparel and footwear sales grew, in local currencies, by 7%.
The seasonality from Winter Sports Equipment is compensated partly by
the Ball Sports segment's summer season, because the strongest months
for Ball Sports are in the first and second quarter.
All forecasts and estimates presented in this report are based on the
management's current judgment of the economic environment. The actual
results may differ significantly.
AMER SPORTS CORPORATION
Board of Directors
For further information, please contact:
Tommy Ilmoni, Vice President for IR and Corporate Communications,
tel. +358 9 7257 8233
Pekka Paalanne, Executive Vice President and CFO, tel. +358 9 7257
8212
Roger Talermo, President and CEO, tel. +358 9 7257 8210
TELEPHONE CONFERENCE
Amer Sports Corporation will publish its third quarter results on
Thursday, October 29 at 1:00 pm Finnish time. An English-language
telephone conference call for investors and analysts will be held on
the same day at 3:00 pm Finnish time. To participate in the
conference call, please call +44 (0)20 3003 2666 (UK/international
dial-in number). The conference can also be followed from a direct
transmission on the Internet, at www.amersports.com.
A recorded version will later be available at the same address, with
replay number +44 (0)20 8196 1998 and access code 6801881#.
AMER SPORTS CORPORATION
Communications
Ms Maarit Mikkonen
Communications Manager
Tel. +358 9 7257 8306, e-mail maarit.mikkonen@amersports.com
www.amersports.com
DISTRIBUTION
NASDAQ OMX Helsinki
Major media
www.amersports.com
