Precor boosts Amer Group earnings, outlook
Amer Group sees a "challenging" 2003 ahead, with Precor helping its bottom line while other sporting goods sector remain flat.
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With a flat global economy in sporting goods, Amer Group’s operating profit continued to grow but the company sees a “challenging” 2003 ahead, particularly when it comes to golf and tennis. The Helsinki, Finland-based, company, parent to Precor, Wilson, Suunto and Atomic, saw its operating profits for 2002 reach Euro 103.0 million (USD $110.6 million), up from Euro 98.6 million (USD $105.8 million) in 2001. Its new fitness equipment division (aka Precor) boosted operating profit by Euro 5.1 million (USD $5.476 million) after goodwill amortization, the company stated about its acquisition of Precor in October.
With global demand for tennis, golf and team sports equipment expected to remain flat in 2003, and demand for winter sports equipment expected to weaken because of weather conditions in key markets, the company may be hanging its hat on growth in demand for fitness equipment that is expected to continue. In 2002’s fourth quarter, Precor showed net sales of Euro 39.5 million (USD $42.4 million) and operating profit of Euro 6.3 million (USD $6.76 million).
In addition, the company’s tobacco division, which it has said it intends to sell, has continued to increase sales. In 2002, Amer tobacco’s net sales increased by 10 percent to Euro 114.4 million (USD $122.8 million) up from Euro 103.9 million in 2001 (USD $111.58 million). Operating profit fell by 4 percent to Euro 9.2 million (USD $9.88 million).
Amer Group says it still has the goal of becoming the world’s No. 1 sports equipment company, with past statements stating 2004 as the time to reach that goal. Said the company in its statement, “With a strong cash flow from operating activities and a strong balance sheet as well as a good position in the sports equipment market, Amer Group has a firm foundation to advance the strategic development of its businesses. Amer Group’s net sales and operating profit are expected to grow in 2003.” For more, go to www.amersports.com.