Fitness financial: Commercial business boosts FY sales for Amer Sports’ fitness segment

While Amer Sports reported sluggish sales in its consumer fitness division, it said recovery in the commercial business helped maintain the segment’s sales for the fourth quarter and increase for the full year.

In the fourth quarter, net sales for the fitness segment, which includes Precor, totaled EUR 59.6 million (USD $82.3 million) up 1 percent from last year’s EUR 58.9 million (USD $81.4 million), but down 6 percent in local currencies.

Amer said net sales were negatively impacted by a EUR 4.5 million (USD $6.2 million) adjustment for extended warranties.

In October-December, EBIT excluding non-recurring items was EUR 4.3 million (USD $5.9 million), a 4 percent drop from EUR 4.5 million (USD $6.2 million) in 2009.

For the full year, fitness’ net sales totaled EUR 204.8 million (USD $283.0 million) versus EUR 194.1 million (USD $268.2 million) in 2009, and were at previous year’s level in local currencies. Geographically, growth in EMEA and Asia Pacific compensated the decline in the Americas, Amer said.

The segment’s EBIT excluding non-recurring items was EUR 2.7 million (USD $3.7 million), an improvement over 2009’s loss of EUR 2.5 million (USD $3.4 million). Operating expenses were EUR 4.0 million (USD $5.5 million) lower compared to 2009 (in local currencies).

Amer said the commercial business represented 89 percent of the fitness segment’s net sales while consumer was 11 percent in 2010. The commercial business was up by 2 percent in local currencies, while consumer business fell by 10 percent, it added.

The commercial business started to show some early signs of recovery during 2010, it noted, and during the second half of the year, it was up in all regions. But, it said, sales of premium consumer equipment for home use continued to be sluggish.

For the company as a whole, net sales increased by 21 percent in the fourth quarter to EUR 583.4 million (USD $806.2 million) compared to EUR 482.8 million (USD $667.2 million) in the same period last year. In local currencies, net sales increased by 14 percent. 

EBIT excluding non-recurring items rose to EUR 56.0 million (USD $77.3 million) versus EUR 44.4 million (USD $61.3 million) last year, and included a EUR 4 million (USD $5.5 million) acceleration in marketing spending. Non-recurring items were a loss of EUR 7.6 million (USD $10.5 million) versus a loss of EUR 5.0 million (USD $6.9 million) last year. 

Earnings per share dropped to EUR 0.30 (USD $0.41) as compared to EUR 0.37 (USD $0.51).

For FY 2010, Amer Sports’ net sales totaled EUR 1.74 billion (USD $2.40 billion), an increase of 13 percent over 2009’s EUR 1.53 billion (USD $2.11 billion). In local currencies, net sales increased by 8 percent.

EBIT excluding non-recurring items more than doubled to EUR 107.9 million (USD $149.1 million) versus EUR 48.8 million (USD $67.4 million) last year. EBIT margin was 6.2 percent excluding non-recurring items. Non-recurring items were a loss of EUR 11.1 million (USD $15.3 million) compared to a loss of EUR 5.0 million (USD $6.9 million) last year.

Earnings per share totaled EUR 0.52 (USD $0.71) versus EUR 0.28 (USD $0.38). Excluding non-recurring items, Amer reported earnings per share were EUR 0.59 (USD $0.81) compared to EUR 0.31 (USD $0.42).

Heikki Takala, Amer Sport’s president and CEO said in a statement, “Year 2010 was good, and it is taking us closer to our long-term financial targets. 2011 will be ‘year of go-to-market,’ with special focus on improving customer service and driving commercial expansion.”

(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Feb. 3.)

–Compiled by Wendy Geister

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