Amer Sports Corporation
STOCK EXCHANGE RELEASE
October 25, 2018 at 1:00 p.m.
Amer Sports Interim Report January-September 2018
JULY-SEPTEMBER 2018 (continuing operations)*
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Net sales were EUR 757.2 million (July-September 2017: 697.9). In local currencies, net sales increased by 9%. Organic growth was 3%.
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EBIT excluding items affecting comparability was EUR 116.9 million (103.8). Items affecting comparability were EUR -5.2 million (-34.0).
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Earnings per share excluding IAC were EUR 0.70 (0.62). Earnings per share were EUR 0.66 (0.40).
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Outlook for 2018 unchanged.
JANUARY-SEPTEMBER 2018 (continuing operations)*
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Net sales were EUR 1,804.0 million (January-September 2017: EUR 1,788.6 million). In local currencies, net sales increased by 5%. Organic growth was 3%.
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Gross margin was 46.1% (45.4).
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EBIT excluding IAC was EUR 134.5 million (116.3). Items affecting comparability were EUR -9.4 million (-39.5).
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Earnings per share excluding IAC were EUR 0.70 (0.61). Earnings per share were EUR 0.64 (0.36).
OUTLOOK
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:
We delivered a solid quarter in line with our expectations, and we made broad-based progress across the portfolio with on-going acceleration in Winter Sports Equipment, Sports Instruments, and Ball Sports, whilst we also continued to pursue the distribution renewal in Footwear with adverse short-term impact but longer term improvement already in sight. Our strategic focus areas are delivering, with Softgoods accelerating thanks to Arc’teryx, which will deliver another year of double digit growth, and now Peak Performance, which gives us a further boost. Direct to Consumer remains on strong growth trajectory at high double digit growth, and building blocks are well in place for further acceleration, including significant enhancements in our mobile shopping and own retail expansion. Also progress in China is strong and we continue to ramp up our investment for on-going acceleration. Encouragingly, the US is now returning to a mid-single digit growth.
Early September, we hosted a Capital Markets Day where we reconfirmed our strategic framework and presented our portfolio considerations. Our long term strategies are proven, and we can expect continuous profitable growth and strong value creation, boosted by the business transformation towards areas of faster growth, higher profitability, and better asset efficiency. The vast majority of our businesses and priorities are working well, whilst we also have some areas where we intervene for the long term business health. We continue to drive our sustainable growth model.
KEY FIGURES (continuing operations)*
| EUR million | 7-9/2018 | 7-9/2017 restated |
1-9/2018 | 1-9/2017 restated |
2017 restated |
| Net sales | 757.2 | 697.9 | 1,804.0 | 1,788.6 | 2,574.6 |
| Gross profit excl. IAC | 349.8 | 324.7 | 831.5 | 811.5 | 1,160.3 |
| Gross margin excl. IAC | 46.2 | 46.5 | 46.1 | 45.4 | 45.1 |
| EBITDA excl. IAC[1] | 135.8 | 118.5 | 186.8 | 165.9 | 279.7 |
| EBIT excl. IAC | 116.9 | 103.8 | 134.5 | 116.3 | 214.4 |
| EBIT % excl. IAC | 15.4 | 14.9 | 7.5 | 6.5 | 8.3 |
| IAC[2] | -5.2 | -34.0 | -9.4 | -39.5 | -44.9 |
| EBIT | 111.7 | 69.8 | 125.1 | 76.8 | 169.5 |
| EBIT % | 14.8 | 10.0 | 6.9 | 4.3 | 6.6 |
| Financing income and expenses | -9.7 | -6.3 | -26.0 | -20.3 | -26.6 |
| Earnings before taxes excl. IAC | 107.2 | 97.5 | 108.5 | 96.0 | 187.8 |
| Earnings before taxes | 102.0 | 63.5 | 99.1 | 56.5 | 142.9 |
| Net result | 76.5 | 47.0 | 73.9 | 42.1 | 93.8 |
| Earnings per share excluding IAC, EUR | 0.70 | 0.62 | 0.70 | 0.61 | 1.18 |
| Free cash flow[3] | -132.2 | -55.8 | -152.8 | 5.1 | 161.3 |
| Net debt/equity at period end | 1.03 | 0.71 | 0.52 | ||
| Personnel at period end | 9,403 | 8,611 | 8,607 | ||
| Average rates used, EUR/USD | 1.16 | 1.17 | 1.20 | 1.11 | 1.13 |
[1] EBITDA excl. IAC = EBIT excluding items affecting comparability and depreciation and amortization
[2] 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.
[3] Cash flow from operating activities – net capital expenditures – change in restricted cash (Net capital expenditures: Total capital expenditure less proceeds from sale of assets).
*) On 5th September, as part of the strategy update, Amer Sports announced a decision to place its Cycling business under strategic review. Following the decision, the company is assessing market interest for its Cycling asset and has started a formal process to actively find a potential buyer for the asset. As required by the reporting standards, all income and expenses of the Cycling business are reported as discontinued operations for 2018 and comparative figures for 2017 are adjusted accordingly. Balance sheet items related to Cycling business are reported under assets and liabilities held-for-sale as of September 2018 onwards.
The comparative figures have been restated in accordance with IFRS 15 Revenue from contracts with customers and IFRS 9 Financial instruments.
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
CONFERENCE CALL
A conference call for investors and analysts will be held today at 3:00 p.m. Finnish time. In the call, Amer Sports will discuss only its third quarter results and the full year outlook for 2018.
Kindly note that the company will not make any remarks or take any questions concerning the indication of interest from a consortium comprising ANTA Sports Products Limited and FountainVest Partners.
To participate in the call, please call +44 33 3300 0804, +49 69 1380 3430 or +1 63 1913 1422, PIN 74250287#. The conference can also be followed live via https://amersports.videosync.fi/interimreport-q3-2018.
A replay of the conference call and a transcript will be available later at the same internet address. The replay numbers are +44 (0) 333 300 0819, +49 69 1380 3453 or +1 (866) 931-1566, access code 301246921#.
FINANCIAL STATEMENTS BULLETIN 2018
Amer Sports will publish its financial statements bulletin 2018 on Thursday, February 7, 2019 at approximately 1:00 p.m. Finnish time.
INVESTOR RELATIONS NEWSLETTER
Subscribe to Amer Sports Investor Relations Newsletter at www.amersports.com/investors/subscribe.
DISTRIBUTION
Nasdaq Helsinki, main media, www.amersports.com
AMER SPORTS
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).
