Amer Sports Corporation
STOCK EXCHANGE RELEASE
July 26, 2018 at 1:00 p.m.
Amer Sports Half Year Financial Report January-June 2018
Net sales were EUR 483.0 million (April-June 2017: 495.8). In local currencies, net sales increased by 2%.
EBIT excluding items affecting comparability was EUR -25.5 million (-22.8). Items affecting comparability were EUR -4.1 million (+1.0).
Earnings per share excluding IAC were EUR -0.22 (-0.20). Earnings per share were EUR -0.25 (-0.19).
Solid view on H2, driven by up to double-digit pre-order growth in Winter Sports Equipment, Arc’teryx, Sports Instruments, and strong expected order position in Precor, which just won its largest ever customer contract.
Outlook for 2018 unchanged.
Peak Performance acquisition will further contribute to profit and growth as of Q3.
Net sales were EUR 1,106.8 million (January-June 2017: EUR 1,160.0 million). In local currencies, net sales increased by 2%.
Gross margin was 45.6% (44.4).
EBIT excluding IAC was EUR 14.9 million (12.7). Items affecting comparability were EUR -4.1 million
Earnings per share excluding IAC were EUR -0.01 (-0.01). Earnings per share were EUR -0.04 (-0.04).
Free cash flow EUR -20.6 million (+60.9), reflecting inventory building for the second half pre-order deliveries.
In 2018, Amer Sports’ net sales in local currencies as well as EBIT excl. IAC are expected to increase from 2017. Due to ongoing wholesale market uncertainties, the quarterly growth and improvement are expected to be uneven. The company will prioritize sustainable, profitable growth, focusing on its five strategic priorities (Apparel and Footwear, Direct to Consumer, China, US, and Connected Devices and Services) whilst continuing its consumer-led transformation.
HEIKKI TAKALA, PRESIDENT AND CEO:
Q2 is our smallest quarter, during which we prepare for the significantly bigger H2 and we spend Opex and build inventory against confirmed pre-orders and expected demand. For H2 2018, our initiative pipeline is robust, and we expect strong growth in Arc’teryx, Winter Sports Equipment, Sports Instruments, and Fitness, which is boosted by the largest ever customer deal we just won for two years.
Our strategic focus areas continue to deliver well, driven by Arc’teryx, China, Own Retail, and E-Commerce. Encouragingly, after two years of low growth in the US, we are now starting to rebound towards mid-single-digit growth. As always, we focus on our Sustainable Growth Model, and throughout 2018, we continue to renew our Footwear distribution footprint for better alignment with our target consumer profile and brand equity, leading to some adverse topline impact especially in EMEA. Encouragingly, in the US our Footwear continues to grow at double-digit level, and going into 2019, we expect to re-ignite Footwear growth globally.
In Q2, we closed the acquisition of Peak Performance, which will further contribute to our growth and profit as of H2, and accelerate the company transformation towards areas of faster growth, higher profitability, and better asset efficiency. With focus on long-term value creation, we are looking forward to another year of growth and improvement in 2018.
|EUR million||4-6/2018|| 4-6/2017
|Gross profit excl. IAC||213.2||218.8||505.1||515.7||1,214.8|
|Gross margin excl. IAC||44.1||44.1||45.6||44.4||44.8|
|EBITDA excl. IAC*)||-7.8||-5.0||50.2||49.7||283.9|
|EBIT excl. IAC||-25.5||-22.8||14.9||12.7||214.5|
|EBIT % excl. IAC||–||–||1.3||1.1||7.9|
|Financing income and expenses||-9.1||-8.6||-16.5||-13.8||-26.3|
|Earnings before taxes excl. IAC||-34.6||-31.4||-1.6||-1.1||188.2|
|Earnings before taxes||-38.7||-30.4||-5.7||-6.8||141.5|
|Earnings per share excluding IAC, EUR||-0.22||-0.20||-0.01||-0.01||1.18|
|Free cash flow***)||-43.3||7.0||-20.6||60.9||161.3|
|Net debt/equity at period end||0.97||0.69||0.52|
|Personnel at period end||9,305||8,680||8,607|
|Average rates used, EUR/USD||1.19||1.10||1.21||1.08||1.13|
*) EBITDA excl. IAC = EBIT excluding items affecting comparability and depreciation and amortization
**) Items affecting comparability (IAC) are material items or transactions, which are relevant for understanding the underlying operational financial performance of Amer Sports when comparing profit of the current period with previous periods. These items can include, but are not limited to, capital gains and losses on business disposals, acquisition and disposal-related costs, significant write-downs, provisions for planned restructuring and other items that are not related to normal business operations from Amer Sports’ management view.
***) Cash flow from operating activities – net capital expenditur
es – change in restricted cash (Net capital expenditures: Total capital expenditure less proceeds from sale of assets).
For further information, please contact:
Heikki Takala, President and CEO, tel. +358 20 712 2510
Jussi Siitonen, CFO, tel. +358 20 712 2511
Samppa Seppälä, Director, Corporate Communications and IR, tel. +358 50 568 0533
A conference call for investors and analysts will be held today at 3:00 p.m. Finnish time. To participate, please call +44 (0)20 7572 1187 or +49 (0)69 2222 4998, PIN 61126316#. The conference can also be followed live via https://amersports.videosync.fi/halfyearfinancialreport2018.
A replay of the conference call and a transcript will be available later at the same internet address. The replay number is +44 (0)20 3426 2807 or +49 (0)69 2222 33985, PIN 697765#.
THIRD QUARTER RESULTS BULLETIN
Amer Sports will publish its Q3/2018 results bulletin on Thursday, October 25, 2018 at approximately 1:00 p.m. Finnish time.
INVESTOR RELATIONS NEWSLETTER
Subscribe to Amer Sports Investor Relations Newsletter at www.amersports.com/investors/subscribe.
Nasdaq Helsinki, main media, www.amersports.com
Amer Sports (www.amersports.com) is a sporting goods company with internationally recognized brands including Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson and Precor. The company’s technically advanced sports equipment, footwear, and apparel improve performance and increase the enjoyment of sports and outdoor activities. The Group’s business is balanced by its broad portfolio of sports and products and a presence in all major markets. Amer Sports shares are listed on the Nasdaq Helsinki stock exchange (AMEAS).