Amer Sports Corporation interim report January-June 2005

Amer Sports' comparable net sales in local currencies rose by 6%

 

- In the January - June 2005 period, Amer Sports' net sales rose by 3% to EUR 511.0 million (January - June 2004: EUR 496.5 million).

- Earnings before interest and taxes (EBIT) amounted to EUR 33.6 million (32.7), including EUR 5.9 million in capital gains from the sale of properties. Earnings per share were EUR 0.29 (0.29).

- In 2005, comparable net sales in local currencies from Amer Sports' current operations are expected to grow by 5% compared with the previous year. Earnings per share from current operations for 2005 are forecast to be EUR 0.90-1.00.

- In May, Amer Sports Corporation made an agreement with adidas-Salomon AG to acquire Salomon. The acquisition is subject to customary conditions including regulatory approvals. When consummated, the transaction will have a significant impact on Amer Sports' net sales in the last quarter of 2005 (Salomon's net sales were EUR 253 million in October-December 2004). The acquisition is estimated to have no significant impact on earnings per share in the current fiscal year.

- Mr Juha Pinomaa was appointed President of Suunto Oy.

 

*) 12 months' rolling average

 

Roger Talermo, President and CEO, Amer Sports:

 

"The sports equipment market has developed in line with expectations. The seasonality of the Group's businesses was clearly in evidence in the second quarter, which is the high season for Golf but the low season for Winter Sports, whose deliveries are weighted towards the latter part of the year. During the second quarter, the Winter Sports Division focused on manufacturing products for the coming winter sports season.

 

On the whole, the trend in Amer Sports' operations in the review period was in line with the objectives. In January - June, net sales grew by 3%. In local currency terms, net sales rose by 6%. The fastest sales growth was seen in Asia Pacific; net sales in this area grew by 16% in local currency terms.

 

The Team Sports Division remained on a buoyant growth track. Its net sales in local currencies rose by 10%. In addition, the Racquet Sports Division continued to perform well. Its net sales in local currencies rose by 8%.

It is estimated that the global golf market remained at the previous year's level. Heated competition continues in the market. The Golf Division's sales did not measure up to expectations, decreasing by 4% in local currencies. The Golf Division's main goal is to improve profitability by boosting operational efficiency and reducing costs during the second half of the year.

 

In Winter Sports, deliveries are heavily weighted towards the latter part of the year, the busiest months for deliveries being September and October. In local currency terms, the Winter Sports Division's net sales decreased by 5% in January - June compared with the corresponding period of 2004.

 

The Fitness Equipment Division's net sales increased by 16% in local currency terms. In line with its strategy, Amer Sports has begun to harness more fully its global sales organization; this yielded results, leading to sales growth of 21% outside the Americas.

 

In the Sports Instruments Division, net sales in the January - June period declined by 2% in local currency terms. Mr Juha Pinomaa, M.Sc. (Eng.), MBA, was appointed President of Suunto Oy effective September 1, 2005.

 

In May, we agreed with adidas-Salomon AG to acquire Salomon, including the brands Salomon, Mavic, Bonfire, Arc'Teryx, and Cliché. Salomon fits perfectly with our own portfolio. Its leading freedom action sport brands open up great new potential for Amer Sports. Furthermore, the two companies and their brands complement each other well in geographical terms, providing better balance in our geographical coverage. It is expected that the transaction will be completed by the end of September 2005."