Amer Sports, whose portfolio of brands include freeski maker Atomic, reported a year-over-year sales increase for 2016 of 4 percent compared to 2015, and forecast growth in 2017.
But Amer noted that Q4 sales were “challenged” — down by 2 percent compared to the same quarter in 2015 — and forecast declining conditions for the first half of 2017, with an uptick in the second half of the year.
Amer Sports Corporation Financial Statements Bulletin 2016
OCTOBER-DECEMBER 2016
- In a challenging market, net sales in local currencies decreased by 2% and were EUR 772.4 million (October-December 2015: 783.7). Organic growth was -2%. In Winter Sports Equipment and Footwear, deliveries peaked earlier in the year. The planned Sports Instruments product launches were postponed to 2017 due to technical issues. There was also a delayed impact from some Fitness product launches.
- Gross margin 44.7% (43.8).
- EBIT excluding items affecting comparability (IAC) EUR 81.3 million (84.0). Items affecting comparability were EUR -8.2 million (-).
- Earnings per share excl. IAC EUR 0.45 (0.46). Earnings per share 0.41 (0.46).
- Free cash flow EUR 152.8 million (159.4).
JANUARY-DECEMBER 2016
- Record net sales, gross margin and EBIT:
- Net sales EUR 2,622.1 million (2015: 2,534.4). In local currencies, net sales increased by 4%. Organic growth was 3%.
- Gross margin 46.3% (45.2).
- EBIT excl. IAC EUR 221.7 million (212.1), representing 8.5% of net sales (8.4). Items affecting comparability were EUR -16.9 million (-8.0).
- Earnings per share excl. IAC EUR 1.18 (1.09). Earnings per share 1.08 (1.04)
- Free cash flow EUR 64.4 million (121.7).
- Net debt/EBITDA excl. IAC 1.9 (December 31, 2015: 1.7).
- Amer Sports Board of Directors is proposing a capital repayment of EUR 0.62 per share (dividend 0.55).
- Due to the challenging market conditions, Amer Sports paces its short-term growth and expands the on-going cost restructuring program initiated in August 2016, with the objective to reduce operating expenses worth approximately 100 EBIT margin basis points in the coming 24 months.
IMPACT OF NEW ESMA GUIDELINES
New ESMA (European Securities and Markets Authority) guidelines on Alternative Performance Measures (APMs) were effective for the financial year 2016. Amer Sports presents APMs to reflect the underlying business performance and to enhance comparability between financial periods. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS. As of Q1 2016, Amer Sports relabels the previously referenced “excluding non-recurring items” with “excluding items affecting comparability” (IAC). Operating segments’ EBIT is reported excluding IAC. Items affecting comparability and APMs used by Amer Sports are defined in note 10 of this report.
OUTLOOK
In 2017, Amer Sports’ net sales in local currencies are expected to increase from 2016, despite short-term market softness. The growth is expected to be biased to the second half of the year. The company will continue to focus on growing the core business and the five prioritized areas: Apparel and Footwear, US, China, Business to Consumer, as well as digitally connected devices and services.
HEIKKI TAKALA, PRESIDENT AND CEO:
In the fourth quarter, the market softened further, hence we pursued sustainable, non-promotional growth. Due to issues with technical readiness, we postponed some planned launches in Sports Instruments to 2017, and there was also a delayed impact from some Fitness product launches. We improved gross margins, and executed short-term expense reductions, whilst continuing to invest into our 2020 acceleration priorities, most notably digitalization, retail openings, and developing new products and technologies for future commercialization.
2016 was another year of record sales and profit, despite a challenging trading environment. Our strategic acceleration areas Footwear, Apparel, Business to Consumer, and China continued the strong growth, and our gross margin was all time high. With the continuously improving performance and the healthy balance sheet, the Board of Directors is proposing yet another increased payout to the shareholders.
We have now delivered seven consecutive years of profitable growth in line with our Sustainable Growth Model. Going into 2017, our pipeline of new initiatives is strong, and we continue to invest into the prioritized acceleration areas. However, as the market is challenging, we adjust our short-term growth ambitions and elevate our focus on profit, cash and asset efficiency. We proactively expand the restructuring program started in August 2016, with the objective to reduce our operating expenses worth approximately 100 EBIT margin basis points in the coming 24 months.
We are looking forward to another year of growth and improvement.
ANNUAL GENERAL MEETING
Amer Sports Annual General Meeting will be held on Thursday, March 9, 2017starting at 2:00 p.m. at Messukeskus, Expo and Convention Centre Helsinki, Messuaukio 1, 00520, Helsinki, Finland.
INTERIM REPORT Q1/2017
Amer Sports will publish its Q1/2017 interim report on Thursday, April 27, 2017 at approximately 1:00 p.m. Finnish time.
AMER SPORTS
Amer Sports (www.amersports.com) is a sporting goods company with internationally recognized brands including Salomon, Wilson, Atomic, Arc’teryx, Mavic, Suunto, 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).
