Amer Sports has decided to invest €30 million over the next 12 months in the modernization of its ski manufacturing facilities in Austria and the logistics in the segment. The program, which was part of the group's long-term strategy, has been approved by China's Anta Sports Products and its other new investors.
On the manufacturing side, the idea is to obtain higher levels of digital planning and control, automation and flexibility at Atomic's ski factory in Altenmarkt in order to respond better to the demands of the market for all the group's brands including also Salomon, Armada and Volant, and to ensure the quality of the products.
Under the management of Michael Schineis, who is responsible for the segment, the group has already reorganized the production of its skis and is now close to a targeted 50-50 split between its Austrian facilities and its Bulgarian plant. The ski boots are made by subcontractors in Romania. Ski bindings are also manufactured in Romania and, to a smaller extent, in Hungary.
Amer wants to further improve customer satisfaction, particularly during the critical six-week window when most of the ski deliveries are made after receiving the initial orders. It wants to optimize the use of working capital.
For the group, another major challenge is to retain the workforce in a region where it faces a certain labor shortage due to the attractiveness of alternative employment in the big local tourism sector. The company wants to keep making skis in two shifts at peak times for maintenance purposes, and a higher use of robots for certain tasks will help improve labor productivity and the accuracy of the production.
On the logistical side, Amer wants to upgrade the functions of its logistic hub in Altenmarkt, which is ideally situated in the middle of the Alps to deliver the products to the ski resorts in the region in optimal conditions. It currently takes care of all the ski production, but Schineis wants it to handle also its shipments of ski boots, where the logistics are outsourced to third parties.
The group should be able to optimize lead times and profit margins by bundling together the shipments of all its products, particularly when it comes to sets of skis, boots and bindings.
In addition to improved margins, the group is naturally interested in building upon its already high market share in snow sports. Schineis estimates it at between 27 and 30 percent at the global level, while admitting that it's hard to determine what is happening at the wholesale and retail levels.
As previously reported, Amer raised its sales of winter sports equipment last year by more than 7 percent to €446 million, and Schineis feels that it gained further market shares in the segment.
The new year started with relatively stable snow conditions around the world, especially in Europe and North America. Schineis expects that the market will grow by about 5 percent this year, and Amer's pre-orders are in line with this forecast.
While Amer is no longer obliged to communicate its annual and quarterly figures, now that it has become the property of Anta Sports Products, Schineis was willing to share some other data and estimates with us to help understand the business that is at stake.
With deliveries of about one million pairs last year, the group had a global market share of between 20 and 25 percent in alpine skis, according to Schineis. In the less fragmented cross-country ski segment, Amer claims a market share of between 25 and 30 percent with deliveries of about 400,000 pairs.
Its market share has reached a higher level of about 35 percent in the area of ski boots, where Amer shipped 1.2 million pairs to the trade in 2018. The group also sold about 800,000 pairs of its own bindings last year, giving it a market share of between 30 and 35 percent. Amer claims much lower shares of around 10 percent in the market for snowboards as well as in snow helmets and goggles.
