RNS Number:4914K
Amer Group PLC
29 April 2003
29 April 2003
Amer Group Plc
AMER GROUP'S INTERIM REPORT JANUARY - MARCH 2003
In the period 1 January to 31 March 2003, Amer Group's net sales
were EUR 283.9 million (January - March 2002: EUR 289.4 million).
Operating profit amounted to EUR 15.3 million (2002: EUR 15.3
million). Profit before extraordinary items totalled EUR 13.1
million (2002: EUR 14.7 million) and earnings per share were EUR
0.39 (2002: EUR 0.46). Foreign exchange rate movements reduced net
sales by EUR 32 million and operating profit by EUR 2 million. Amer
Group's net sales for 2003 as a whole are expected to grow and
operating profit to decline modestly from 2002's record level.
JANUARY - MARCH NET SALES AND RESULTS
Amer Group's consolidated net sales were EUR 283.9 million (2002:
EUR 289.4 million). The Group's operating profit was EUR 15.3
million (2002: EUR 15.3 million). Profit before extraordinary items
amounted to EUR 13.1 million compared to EUR 14.7 million in the
first quarter of 2002. Foreign exchange rate movements reduced net
sales by EUR 32 million and operating profit by EUR 2 million, due
to the strengthening of the euro especially against the US dollar.
Return on capital employed (ROCE) was 17.9% (2002: 17.5%).
Geographically, sales were similar to 2002 in Europe but declined by
2% in North America, by 6% in Japan and by 7% in Asia Pacific.
Across the Group's divisions between January and March, fitness
equipment sales were in line with expectations, and also the Team
Sports Division continued to perform well. In the golf equipment
market, competition continued to be tough and the Golf Division's
sales were clearly slower than last year. Due to the seasonality of
the golf market, the coming second quarter is critical to golf sales
for the year as a whole. The Racquet Sports Division's sales were
also behind 2002's rate. In Winter Sports, the season was reaching
its end. Due to a lack of snow at the beginning of the season in
Austria and Germany, sales were not registered at the level achieved
last year. Sales of sports instruments were reduced by a decline in
sales of Suunto's non-core products. Amer Tobacco's sales declined
as the Finnish cigarette market shrunk.
CAPITAL EXPENDITURE
The Group's gross capital expenditure amounted to EUR 4.8 million
(2002: EUR 4.1 million) during the period under review.
RESEARCH AND DEVELOPMENT
A total of EUR 7.5 million was invested in research and development,
representing 2.6% of net sales in the period (2002: EUR 6.1
million).
FINANCE
The Group's net financing expenses totalled EUR 2.2 million (2002:
EUR 0.6 million) in the first quarter.
The equity ratio decreased to 45.1% from 48.1% as at 31 March 2002
(45.6% as at 31 December 2002), while gearing increased from 25% to
48% (47% as at 31 December 2002). The dividend paid for the 2002
financial year has been taken into account in these figures.
The Group's net debt decreased to EUR 201.5 million at the period
end, compared to EUR 209.9 million as at 31 December 2002. Liquid
assets amounted to EUR 28.6 million at the period end.
PERSONNEL
The Group employed 4,085 people at the end of the period under
review compared to 3,939 at the year-end and an average of 4,056
during the period. At the end of the period, a total of 1,677 were
employed in the US, 672 in Finland, 574 in Austria and 1,162 in the
rest of the world.
AMER GROUP'S SHARES AND SHAREHOLDERS
A total of 16.9% of Amer Group Plc's shares in issue were traded
during the period under review, of which approximately 3.55 million
were traded on the Helsinki Exchanges and approximately 0.39 million
on the London Stock Exchange, totalling 3.9 million shares. In
Helsinki the share price low was EUR 27.67, the high EUR 36.50 and
the average EUR 32.40.
There were 10,819 registered shareholders at the end of March.
Nominees accounted for 51% of the shares in issue at the period end.
The Company's market capitalisation stood at EUR 659.4 million at
the period end.
During the period under review, a total of 30,500 new shares were
registered. The shares were already subscribed for last year as a
result of an exercise of 1998 A/B warrants. As a result of the
corresponding increase in the Company's share capital, Amer Group
Plc's share capital totalled EUR 96,906,080 and the total number of
shares in issue was 24,226,520 at the period end. In addition, the
Company's share capital may increase further by 701,000 new shares
as a result of the 1998 warrant subscription.
The C warrants of the Amer Group Plc 1998 stock option plan were
introduced to the main list of the Helsinki Exchanges and
simultaneously combined with the A/B warrants as one security on 2
January 2003. The number of C warrants is 340,000. The share
subscription started on 1 January 2003.
At the end of the period the Board of Directors had no share issue
authorisation outstanding.
AGM RESOLUTIONS
Based on a resolution approved by Amer Group Plc's Annual General
Meeting on 20 March 2003, a dividend of EUR 1.40 per share was
distributed for the 2002 financial year. The dividend was paid on 1
April 2003.
The AGM adopted the Board's proposal that Amer Group's registered
share capital be decreased by EUR 3,873,200 by cancelling without
payment those 968,300 of its own shares the Company currently holds.
After the cancellation, the Company's paid up and registered share
capital will amount to EUR 93,032,880 and the number of shares in
issue will be 23,258,220.
The AGM also resolved that the terms of the 2002 warrant scheme be
changed and the maximum amount of warrants be limited to 572,500 and
the undistributed 327,500 warrants be cancelled. Due to this change
the Company's share capital may increase by up to 572,500 new shares
instead of 900,000 new shares, i.e. by a maximum of EUR 2,290,000
instead of 3,600,000.
The AGM adopted the Board's proposal that a new warrant scheme be
issued to Amer Group Plc's key personnel. The proposed number of
warrants to be issued will be 550,000 with entitlement to subscribe
for a maximum of 550,000 Amer Group shares. Of these warrants, 185,000
will be offered for subscription to the Group's key personnel and
365,000 will be offered for subscription to Amera Oy, a company
belonging to the same group of Amer companies, in order that the
warrants may, at a later date, be offered to the key persons
determined by Amer Group's Board of Directors. The warrants shall be
subscribed for from 10 April to 30 June 2003. The share subscription
price will be EUR 37.90 which is the trade volume weighted average
quotation of Amer Group Plc shares on the Helsinki Exchanges during
the period 2 January - 14 February 2003 with an addition of ten per
cent. The share subscription period commences on 1 January 2006 and
ends on 31 December 2008.
The number of members of the Board of Directors was resolved to be six.
Of those Board members whose term was scheduled to expire, Mr Ilkka
Brotherus and Mr Timo Maasilta were re-elected for three years for the
term 2003-2005 and Mr Tuomo L"hdesm"ki was re-elected for two years for
the term 2003-2004. At its first meeting the new Board of Directors
elected Mr Pekka Kainulainen as Chairman and Mr Ilkka Brotherus as Vice
Chairman, respectively.
PricewaterhouseCoopers Oy, Authorised Public Accountants, were elected
Auditors of the Company. The auditor in charge of the audit is Mr G"ran
Lindell, Authorised Public Accountant.
DIVISIONAL HIGHLIGHTS
RACQUET SPORTS
EUR million Jan- Jan- Change
March March %
2003 2002
Net sales 56.9 73.8 -23
Operating profit 3.8 6.3 -40
ROCE, 12 months' rolling average, % 51.4 47.1
In local currencies, the Racquet Sports Division's net sales
declined 10% and operating profit declined 31%. Sales declined 18%
in North America and 4% in Japan. In Europe, sales were similar to
2002.
The Company estimates that the overall tennis market continued to
decline in both Europe and the United States. Also, the average
selling price of a tennis racquet continued to fall.
Racquet Sports' net sales decline was mainly driven by low tennis
ball sales and also by the timing of shipments of its new
performance racquet. Sales of Wilson tennis racquets decreased 15%,
tennis balls 12% and footwear 3%. Wilson's position as the global
market leader in tennis racquets remained strong and in tennis balls
Wilson remains number three.
Shipments of the new Triad racquets started in the United States in
February. Shipments to other markets will start during the spring
and summer. The new models are lighter and produce more power than
the earlier models thanks to their Decometric geometry in the hoop
and handle. Shipments of the new Pro Staff racquets started in
January. New footwear was also brought to market.
GOLF
EUR million Jan- Jan- Change
March March %
2003 2002
Net sales 42.6 66.2 -36
Operating loss -2.1 -0.1
ROCE, 12 months' rolling average, % 8.0 1.6
In the Golf Division, net sales in local currencies declined 25%.
Sales fell by 35% in North America and by 7% in Europe.
The overall size of the golf market remained similar to last year,
according to the Company's estimates.
Sales of Wilson golf clubs decreased 20% due to later availability
than planned of its new Deep Red II woods and irons. Also lower
price point golf club sales declined.
The golf ball market continued to be extremely competitive and
Wilson golf ball sales declined 33% as a result. The new Jack golf
ball family has been well received by the trade although it is too
early to predict consumer reaction. A new Wilson Staff True golf
ball was also introduced in January and shipments started in
February.
Due to the golf market's seasonality, the second quarter is critical
to golf sales for the year as a whole.
TEAM SPORTS
EUR million Jan- Jan- Change
March March %
2003 2002
Net sales 63.1 72.0 -12
Operating profit 10.9 11.7 -7
ROCE, 12 months' rolling average, % 37.3 36.6
In local currencies, the Team Sports Division's net sales grew by 7%
and operating profit by 13%.
The fastest growing product categories in Team Sports were
basketballs (16%) and baseball and softball bats (11%). Wilson is
the number one team sports company in the USA and its position is
especially strong in American football, basketball and baseball.
During the period, a new NCAA Composite Basketball was introduced,
featuring Cushion Core Technology for outstanding grip and feel. The
Team Sports Division also shipped a new Wilson Youth Batting Helmet, a
one size fits all helmet for Baseball and Softball.
The five-year match ball agreement with the National Collegiate
Athletic Association (NCAA) took effect at the beginning of 2003, as
a result of which Wilson's basketballs are used as official match
balls in all NCAA games.
WINTER SPORTS
EUR million Jan- Jan- Change
March March %
2003 2002
Net sales 26.0 31.1 -16
Operating loss -3.6 -1.5
ROCE, 12 months' rolling average, % 46.1 47.0
Winter Sports' net sales in local currencies decreased by 12%. Sales
declined 15% in Europe and 5% in North America. Winter Sports'
operating losses were EUR 3.6 million in this period which covered
the end of the season. Due to seasonality, Atomic's deliveries are
heavily weighted towards the latter part of the year.
Net sales declined due to poor snow conditions in Austria and
Germany at the beginning of the winter sports season 2002/2003.
Thus, re-orders were low. Snow conditions got better towards the
season's end, such that stock levels are now mostly at a normal
level.
The global winter sports market is estimated to have declined during
the 2002/2003 season. Atomic retained its position as the no. 1
alpine ski brand in Europe.
In February Atomic presented the world's first microprocessor-
controlled ski bindings, Neox EBM 412.
The current level of pre-orders suggests there will be a slight
downturn in the market in 2003, reflecting the cautious mood of the
trade.
In 2003, Winter Sports' investment in its sales organisation is
planned to be higher than last year.
FITNESS EQUIPMENT
EUR million Jan- Jan- Change
March March %
2003 2002,
pro
forma
Net sales 51.4 54.9 -6
Operating profit 8.9 7.7 16
Fitness Equipment's net sales in local currencies increased 5% and
operating profit increased 31%. The fastest growing product
categories were treadmills and elliptical cross-trainers.
North American commercial and consumer markets appear to be cooling.
Major club organisations are holding off on purchases, and the
government market has postponed investments in fitness equipment.
Consumers are similarly cautious.
In February, a new line of C846 and C842 upright and recumbent
cycles for club and commercial markets were brought to the market.
Despite general uncertainty, the fitness sector as a whole is
expected to continue growing. Further growth is also anticipated in
the popularity of elliptical fitness equipment. The Fitness
Equipment Division has good growth opportunities especially outside
North America.
SPORTS INSTRUMENTS
EUR million Jan- Jan- Change
March March %
2003 2002
Net sales 20.1 21.5 -7
Operating profit 2.2 1.6 38
ROCE, 12 months' rolling average, % 36.6 29.7
In local currencies, Suunto's net sales were similar to last year's
level. Its growth was slowed down by the decline of sales of
Suunto's non-core products.
Sales of Suunto's wristop computers and diving instruments
maintained the levels achieved in the comparable period in 2002.
Wristop computers and diving instruments accounted for 56% of
Suunto's net sales.
Shipments of the Suunto M9 wristop computer for mariners began in
January. In addition, Suunto announced in January a partnership with
Microsoft. This cooperation will lead to the launch of a new line of
Suunto n-series sports wristops in the North American market at the
end of 2003.
In March Suunto sold its wholly-owned subsidiary Ilotulitus Oy to
Truebell Plc. The net sales of Ilotulitus Oy in 2002 were EUR 2.8
million.
At the beginning of 2003, Suunto's European central warehousing
function was relocated to Amer Sports' new logistics centre in
sberherrn, Germany.
TOBACCO
EUR million Jan- Jan- Change
March March %
2003 2002
Net sales 23.8 24.8 -4
Operating profit 1.5 1.7 -12
Reflecting the decline in the Finnish tobacco product market, Amer
Tobacco's net sales decreased by 4% to EUR 23.8 million (2002: EUR
24.8 million). Operating profit was EUR 1.5 million (2002: EUR 1.7
million).
Overall tobacco product deliveries to stores in Finland declined by
6% in the period, mainly due to increased purchases by Finnish
tourists to the Baltic countries and also contraband trade.
Amer Tobacco's sales outside Finland increased. In addition to the
increase in sales volumes of its own brands in Estonia, tax-free
deliveries of Marlboro products to neighbouring markets contributed
to the improvement.
2003 PROSPECTS
Demand for sports equipment did not recover during the first quarter
of 2003. In Amer Group's key markets, the US and Germany, both the
trade and consumers remain cautious.
Growth in demand for tennis equipment is not expected for the
remainder of the year. In golf equipment, the second quarter of the
year is critical and it will therefore only be possible to estimate
market growth after that. In team sports, the global market is
forecast to remain flat. The growth in demand for sports instruments
and fitness equipment continues, even though the growth in fitness
equipment seems to be slowing down a little. The level of pre-orders
indicates a slight downturn in the winter sports market for the
forthcoming 2003/2004 season.
Traditionally, demand for sports equipment is less sensitive to the
economic background, as the industry is also strongly influenced by
sports-related factors like trends in the active following of
individual sports and new innovations in sports equipment. Amer
Group's operations are also well balanced by its broad portfolio of
sports and its presence in all key markets.
Amer Group has set itself the goal of becoming the world's No 1 sports
equipment company. With strong cash flows from operating activities
and a strong balance sheet combined with 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 for
2003 as a whole are expected to grow and operating profit to decline
modestly from the record level achieved in 2002.
CONSOLIDATED RESULTS
Figures in EUR million. Unaudited.
Jan- Jan- Change Jan-
March March % Dec
2003 2002 2002
NET SALES 283.9 289.4 -2 1,101.9
Depreciation 9.8 8.4 34.4
OPERATING PROFIT 15.3 15.3 103.0
Net financing expenses -2.2 -0.6 -7.4
PROFIT BEFORE EXTRAORDINARY
ITEMS 13.1 14.7 -11 95.6
Extraordinary items - - -
PROFIT BEFORE TAXES 13.1 14.7 95.6
Taxes -3.9 -4.1 -26.5
Minority interest -0.1 0.0 -0.6
PROFIT 9.1 10.6 68.5
Earnings per share, EUR 0.39 0.46 2.95
Adjusted average number of
shares in issue, million 23.2 23.2 23.2
Equity per share, EUR 17.8 18.06 19.17
ROCE, % *) 17.9 17.5 18.3
ROE, % 8.4 9.7 15.5
Average rates used:
EUR 1.00 = USD 1.07 0.88 0.94
AVERAGE PERSONNEL 4,056 3,747 3,827
*) 12 months rolling average
The relative proportion of the estimated tax charge for the full
financial year has been charged against the results for the period.
In financial ratios shareholders' equity and number of shares
exclude own shares.
NET SALES BY BUSINESS AREAS
Jan- Jan- Change Jan-
March March % Dec
2003 2002 2002
Racquet Sports 56.9 73.8 -23 243.9
Golf 42.6 66.2 -36 213.3
Team Sports 63.1 72.0 -12 203.9
Winter Sports 26.0 31.1 -16 201.6
Fitness Equipment 51.4 - 39.5
Sports Instruments 20.1 21.5 -7 85.3
Tobacco 23.8 24.8 -4 114.4
Total 283.9 289.4 -2 1,101.9
OPERATING PROFIT BY BUSINESS AREAS
Jan- Jan- Change Jan-
March March % Dec
2003 2002 2002
Racquet Sports 3.8 6.3 -40 25.6
Golf -2.1 -0.1 7.1
Team Sports 10.9 11.7 -7 24.0
Winter Sports -3.6 -1.5 39.6
Fitness Equipment 8.9 - 6.3
Sports Instruments 2.2 1.6 38 10.5
Tobacco 1.5 1.7 -12 9.2
Headquarters -2.5 -2.1 -9.2
Group goodwill -3.8 -2.3 -10.1
Total 15.3 15.3 103.0
GEOGRAPHIC BREAKDOWN OF NET SALES
Jan- Jan- Change Jan-Dec
March March % 2002
2003 2002
North America 166.2 168.9 -2 558.5
Finland 21.9 23.9 -8 109.5
Rest of Europe 65.8 64.2 2 296.0
Japan 12.8 13.6 -6 56.2
Asia Pacific 8.6 9.2 -7 34.8
Other 8.6 9.6 -10 46.9
Total 283.9 289.4 -2 1,101.9
CONSOLIDATED CASH FLOW STATEMENT
Jan- Jan- Jan-
March March Dec
2003 2002 2002
Net cash from operating activities 27.9 12.4 90.0
Net cash from investing activities -4.2 -3.6 -177.8
Net cash from financing activities
Dividends paid -30.5 - -25.9
Issue of shares - - 1.4
Change in net debt 3.0 -3.9 119.7
Net increase/decrease in cash and
cash equivalents -3.7 4.9 7.4
Cash and cash equivalents at 1 Jan 32.4 28.8 25.7
Cash and cash equivalents at
31 March/31 December 28.6 33.7 33.1
CONSOLIDATED BALANCE SHEET
Assets 31 March 31 March 31 Dec
2003 2002 2002
Goodwill 300.2 207.5 312.1
Other intangible fixed assets 19.9 19.2 20.9
Tangible fixed assets 123.2 150.7 126.5
Long-term investments 48.8 52.8 50.3
Inventories and work in
progress 156.5 162.2 156.4
Receivables 274.1 292.0 308.2
Marketable securities 1.0 3.0 -
Cash and cash equivalents 27.6 30.7 33.1
Assets 951.3 918.1 1,007.5
Shareholders' equity and
liabilities
Shareholders' equity 439.9 443.4 470.2
Minority interest 3.2 11.2 3.2
Provision for contingent
losses 19.0 2.5 19.9
Long-term interest-bearing
liabilities 65.3 71.2 48.2
Other long-term liabilities 17.3 17.8 17.3
Short-term interest-bearing
liabilities 164.8 68.6 194.8
Other short-term liabilities 241.8 303.4 253.9
Shareholders' equity and
liabilities 951.3 918.1 1,007.5
Equity ratio, % 45.1 48.1 45.6
Gearing, % 48 25 47
EUR 1.00 = USD 1.09 0.87 1.05
CONTINGENT LIABILITIES AND SECURED ASSETS, CONSOLIDATED
31 March 31 March 31 Dec
2003 2002 2002
Charges on assets - - -
Mortgages pledged 18.2 21.7 18.2
Guarantees 5.6 - 1.4
Liabilities for leasing and
rental agreements 49.4 54.4 48.0
Other liabilities 39.8 40.4 32.0
There are no guarantees or contingencies given for the management of
the company, the shareholders or the associated companies.
DERIVATIVE FINANCIAL INSTRUMENTS
31 March 31 March 31 Dec
2003 2002 2002
Nominal value
Foreign exchange forward
contracts 304.9 324.0 217.9
Forward rate agreements - 80.0 -
Interest rate swaps 114.7 - 119.2
Fair value
Foreign exchange forward
contracts 14.7 -1.1 12.9
Forward rate agreements - -0.1 -
Interest rate swaps -2.3 - -1.6
QUARTERLY BREAKDOWNS
I IV III II I IV III II
EUR million 2003 2002 2002 2002 2002 2001 2001 2001
NET SALES
Racquet
Sports 56.9 39.3 60.2 70.6 73.8 48.2 73.1 74.1
Golf 42.6 28.5 39.2 79.4 66.2 38.0 47.5 89.9
Team Sports 63.1 41.9 41.4 48.6 72.0 41.9 45.6 49.1
Winter
Sports 26.0 65.4 93.8 11.3 31.1 68.2 91.6 11.1
Fitness
Equipment 51.4 39.5 - - - - - -
Sports
Instruments 20.1 23.5 17.7 22.6 21.5 22.1 18.4 23.0
Tobacco 23.8 28.0 31.3 30.3 24.8 26.1 28.3 27.3
283.9 266.1 283.6 262.8 289.4 244.5 304.5 274.5
Sold
operations - - - - - - - 0.1
Total 283.9 266.1 283.6 262.8 289.4 244.5 304.5 274.6
OPERATING
PROFIT
Racquet
Sports 3.8 3.2 6.6 9.5 6.3 2.5 8.7 8.3
Golf -2.1 -3.6 -2.1 12.9 -0.1 -6.3 -3.6 11.3
Team Sports 10.9 3.2 2.5 6.6 11.7 4.4 1.9 6.5
Winter
Sports -3.6 16.6 31.3 -6.8 -1.5 16.8 28.4 -5.2
Fitness
Equipment 8.9 6.3 - - - - - -
Sports
Instruments 2.2 3.7 2.1 3.1 1.6 2.2 2.3 3.2
Tobacco 1.5 1.9 2.3 3.3 1.7 2.1 2.6 2.9
Headquarters -2.5 -2.1 -1.9 -3.1 -2.1 -2.4 -4.3 8.9
Group
goodwill -3.8 -3.4 -2.1 -2.3 -2.3 -2.3 -2.3 -2.3
15.3 25.8 38.7 23.2 15.3 17.0 33.7 33.6
Sold
operations - - - - - - - -0.1
Total 15.3 25.8 38.7 23.2 15.3 17.0 33.7 33.5
All forecasts and estimates mentioned in this report are based on
management's current judgement of the economic environment and the
actual results may be significantly different.
The interim report for the period January to June will be published
on 5 August 2003.
AMER GROUP PLC
Board of Directors
For further information, please contact:
Mr Roger Talermo, President & CEO, tel. +358 9 7257 8210
Mr Pekka Paalanne, Senior Vice President & CFO, tel. +358 9 7257
8212
AMER GROUP PLC
Communications
Paivi Antola
Communications Manager
Tel. +358 9 725 78 306, e-mail: paivi.antola@amersports.com
www.amersports.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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