Brunswick Corporation, the owner of Life Fitness, is targeting sales of $5.0 to $5.3 billion in 2018, compared with about $4.1 billion this year, relying chiefly on expansion in its marine and fitness divisions. The U.S. group said on its investor day earlier this month that the expansion would include organic growth as well as acquisitions. The company is budgeting an operating margin of 12.0 to 12.5 percent in three years' time.
Among the targets outlined at the investor day, the company wants to double the size of Life Fitness by 2020. Sales of the fitness segment at Brunswick are to expand at a compound annual growth rate in the high-single to low-double digit range, combining organic development and targeted acquisitions. The company wants to maintain strong operating margins, which have been stable at about 14.8 percent for the 12 months until Oct. 3.
The company pointed to growth opportunities in the consumer fitness market, rehabilitation, active aging and productive well-being. Earlier this year Life Fitness launched a new category, In Movement, providing equipment that enables people to remain active at the workplace. Its acquisition of Scifit is targeted at expansion in the rehabilitation and active aging markets.
The commercial cardio business makes up about 51 percent of sales in the Brunswick group's fitness segment, compared with 31 percent for the commercial strength equipment business. Consumer sales amount to just 11 percent, with parts and service making up the remaining 7 percent.
The U.S. remains by far the largest market, accounting for 53 percent of the fitness division's sales, compared with 20 percent for Europe, 12 percent for Asia-Pacific, 7 percent for Latin America, 4 percent in Canada as well as Africa and the Middle East.
The fitness division's expansion in the commercial market is to be driven by low-cost and specialist clubs, which are predicted to grow in the high single-digit range. Meanwhile, traditional clubs should grow at a mid-single-digit rate and premium clubs at a mid to high-single-digit range. Other customer categories, from hospitality to multi-housing and corporate markets, are all predicted to expand at mid-single-digit rate.
