The results of Amer Sports published in our last were on a pro forma basis. Those figures indicated a 4.4 percent for the year including the results of Salomon for the whole 2005 financial year, even though the acquisition took effect in October 2005. In actual terms, with Salomon accounted for only the 4th quarter of 2005 and the full year 2006, Amer Sports had a 31 percent jump in consolidated sales for the year to €1,792.7 million , but net income declined by 6 percent to €70.5 million. Net income in the 4th quarter of 2006 increased by 54 percent to €47.0 million on 4 percent higher sales of €581.6 million. As indicated in the last issue, on a pro forma basis net income grew by 13.0 percent.
Amer Sports predicts that its operating profit will reach €130-145 million euros this year as compared to €120.2 million in 2006, but the improvement in earnings will probably show up only from the third quarter onwards. Earnings in the first quarter should be down because of lower reorders of winter sports equipment received in early 2007.
For the full year, the overall turnover will likely be more or less flat for the group in terms of local currencies. Atomic and Salomon will probably record lower sales of winter sports equipment. Mavic’s bicycle business may also slip this year. On the other hand Suunto, Precor and Salomon’s apparel and footwear segments should show the best sales growth within the expanded group.
As reported, Salomon posted a 6 percent increase in total sales to 661.4 million euros on a pro forma basis in 2006. More in detail, Salomon’s sales of winter sports equipment were down by 1 percent to €345.6 million for the year, but up by 6 percent in the 4th quarter. Sales of apparel and footwear grew by 18 percent to €208.0 million for the year and showed an even stronger 30 percent increase for the quarter. Mavic had a 9 percent increase for the year to €107.8 million, including a 7 percent gain in the fourth quarter, but its margins fell because of higher revenues from its OEM business.
Salomon’s diversification has paid off, and the planned industrial cooperation with Atomic is expected to result in cost savings, in spite of a decline in the global winter sports market anticipated for this year.
