Amer Sports Annual Report 2005
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AMER SPORTS ANNUAL REPORT 2005 ANNUAL REPORT 2005 PERFORMANCE PRODUCTS P.O.BOX 130, FI-00601 HELSINKI STREET ADDRESS: MÄKELÄNKATU 91 FI-00610 HELSINKI TEL. +358 9 7257 800 FAX +358 9 7527 8200 ROF WWW.AMERSPORTS.COM ACTIVE DOMICILE: HELSINKI BUSINESS ID: 0131505-5 SPORTS CONTACT INFORMATION WORLD OF AMER SPORTS AMER SPORTS CORPORATION SUUNTO Amer Sports is the world’s leading sports equipment company. Its major Mäkelänkatu 91 Suunto Oy FI-00610 Helsinki Valimotie 7 brands include Wilson, Atomic, Suunto, Precor, Salomon and Mavic. Amer P.O. Box 130 FI-01510 Vantaa FI-00601 Helsinki FINLAND Sports offers technically advanced equipment and products that improve the FINLAND Tel. +358 9 875 870 Tel. +358 9 725 7800 Fax: +358 9 8758 7300 performance of active sports participants. The Group’s business is balanced Fax: +358 9 7257 8200 www.suunto.com E-mail: [email protected] by its broad portfolio of sports and presence in all major markets. www.amersports.com SALOMON Salomon S.A. WILSON FR-74996 Annecy Wilson Sporting Goods Co. Cedex 9 8700 W. Bryn Mawr Avenue FRANCE Chicago, IL 60631 Tel. +33 4 50 65 4141 USA Fax: +33 4 50 65 4260 Tel. +1 773 714 6400 www.salomonsports.com Fax: +1 773 714 4565 E-mail: [email protected] The contact information for the Group’s locations is www.wilson.com kept up-to-date on Amer Sports’ website at www.amersports.com. The contact information for ATOMIC importers can be found on the websites of the business Atomic Austria GmbH Lackengasse 301 areas. Contact information can also be requested by AT-5541 Altenmarkt telephone +358 9 7257 8309, by fax +358 9 791 385, or by AUSTRIA e-mail [email protected]. Tel. +43 6452 3900 0 WINTER SPRING Fax: +43 6452 3900 120 ALPINE SKIING CROSSCOUNTRY SKIING SNOWBOARDING HIKING CLIMBING RUNNING CYCLING TENNIS SQUASH E-mail: [email protected] www.atomicsnow.com PRECOR Precor Incorporated 20031 142nd Avenue NE P.O. Box 7202 Atomic is the world’s leading manufacturer of Salomon is the world leader in winter sports and Mavic is a leading manufacturer of cycling Woodinville, WA 98072-4002 alpine skis. Its sports categories include alpine is well-established in outdoor sports through components and is notably the world’s leading USA Tel. +1 425 486 9292 skiing, crosscountry skiing and snowboarding. footwear and technical apparel. Salomon is known manufacturer of cycling wheels. The company Fax: +1 425 486 3856 for highly innovative and performance-oriented provides components and wheels both for road www.precor.com products. Salomon’s sports include alpine and cycling, mountain biking and track racing. crosscountry skiing, snowboarding, and major outdoor sports like climbing, hiking, adventure racing and trail running. CONTENTS AMER SPORTS YEAR 2005 DIVISIONAL REVIEWS FINANCIAL STATEMENTS anD REPORT OF THE BOARD OF DIRectORS Year 2005 in Brief 2 Racquet Sports 16 Report of the Board of Directors 56 Shares and Shareholders 92 Vision, Mission and Values 4 Golf 20 Five Year Review 63 Board of Directors’ Dividend Strategy 6 Team Sports 24 Consolidated Income Statement 64 Proposal 99 Financial Targets 8 Winter Sports, Atomic 28 Consolidated Balance Sheet 64 Auditor’s Report 99 CEO’s Review 10 Fitness Equipment 32 Consolidated Cash Flow Statement 65 Branded Products 12 Sports Instruments 36 Consolidated Statement of Corporate Governance 100 Amer Sports Athletes in 2005 14 Salomon 40 Changes in Shareholders’ Equity 66 Board of Directors 104 R&D 46 Notes to the Consolidated Executives 105 Sales & Distribution 48 Financial Statements 67 Information for Investors 106 Personnel 50 Calculation of Key Indicators 85 Contact Information 107 Social Responsibility 52 Parent Company’s Financial Statements 86 SUMMER AUTUMN BADMINTON SOCCER VOLLEYBALL BASKETBALL GOLF AMERICAN FOOTBALL SAILING DIVING FITNESS Wilson is the world’s leading manufacturer of Suunto is the world’s leading manufacturer Precor is a full-line supplier of technically ball sports products. Its core sports are tennis, of sports instruments, most notably wristop advanced, premium quality fitness equipment squash, badminton, American football, baseball, computers, diving instruments and compasses. for the commercial and home markets. Its basketball and golf. main products are aerobic exercise equipment, strength-training systems and entertainment systems. Precor is the world’s leading manufacturer of elliptical crosstrainers. YEAR 2005 IN BRIEF In 2005, Amer Sports’ net sales were EUR 1,363.7 million and EBIT EUR 82.3 million. Earnings per share amounted to EUR 1.05. At the end of 2005, the company had 6,667 employees. The acquisition of Salomon’s business operations had a signif- ACQUISITION OF SALOMON The program includes the reorganization of Salomon’s opera- icant effect on Amer Sports’ fourth-quarter development. The On May 2, Amer Sports Corporation made an agreement with tions and reduction of about 400 positions, mainly in France. transaction increased net sales for 2005 by EUR 255.2 million adidas-Salomon AG to acquire Salomon and its business Other important measures include the reallocation of the and the number of employees by 2,607. operations. Salomon’s product offering fits with Amer Sports’ production of Salomon skis and Atomic ski boots to ensure portfolio. Furthermore, the two companies and their brands the optimization of Group benefits. NEW TRADE NAME complement each other well in geographical terms, balancing On March 24, Amer Group Plc’s name was changed to Amer out Amer Sports’ operations. The transaction was concluded REORGANIZATION AT WILSON, NEW PRESIDENT Sports Corporation. Adoption of the name Amer Sports, which on October 9, 2005. APPOINTED has been used in marketing since 2000, streamlined and On December 8, Salomon reorganized its management Chris Considine was appointed President of Wilson Sporting unified the company’s communications. The new name more structure and appointed a new Executive Team. Goods effective as of November 0, 2005. He is responsible aptly describes Amer Sports’ operations as the world’s lead- On December 20, Salomon started a three-year turn- for the Golf, Racquet Sports and Team Sports Divisions, as ing sports equipment company. around program to ensure Salomon’s future competitiveness. well as Amer Sports North America Services organization, 2 KEY INDICATORS EUR MILLION 2005 2004 cHANGE CONTINUING OPERATIONS NET SALES 2005 NET SALES 2005 Net sales NET SALES 1,363.7 1,035.9 32% 1 Racquet Sports 17% 1 Americas 50% euR milliON Gross PROFIT 546.6 435.8 25% 2 GOLF 10% 2 EMEA 38% 3 Team Sports 15% A3 sia Pacific 12% EBIT 82.3 100.5 –18% 4 Winter Sports, atomic 16% % OF NET SALES 6.0 9.7 5 Fitness Equipment 18% 6 ORTSSP Instruments 5% 1,364 FINANCIAL INCOME AND EXPENSES –9.0 –3.5 7 salomon 19% PROFIT before taXES 73.3 97.0 –24% 1,100* 1,102* 1,094 1,036 NET result, CONTINUING operations 75.2 68.6 10% NET result, DISCONTINUED operations - 14.0 NET result 75.2 82.6 –9% 7 1 3 Earnings per SHare, continuing operations, EUR 1.05 0.96 6 2 1 Earnings per SHare, discontinued operations, EUR - 0.20 2 RETURN ON SHAREHOLDERS’ EQUITY (ROE), % 15.1 18.7 5 3 4 EQUITY ratio, % 31.8 55.5 0201 0403 05 PERSONNEL at YEAR END 6,667 4,066 * In accordance with FAS principles Calculation of key indicators, see page 85 which includes logistics, IT, legal, tax and treasury. CENTRALIZATION OF ASIAN SUBCONTRACTING CONSISTENT DIVIDEND POLICY CONTINUES On December 28, Wilson Golf started the realignment Amer Sports has established an initiative to coordinate The Board of Directors proposes that a dividend of of its global organization to increase operational efficiency sourcing in Asia for all its brands. Steve Millea was appointed EUR 0.50 per share be paid for 2005, representing a dividend and lower costs. Changes and personnel cuts were made in to lead the unit on November 0. By consolidating opera- ratio of 48%. A dividend of EUR 0.50 per share was paid for management, sales and administration. In the United States, tions, the Group seeks synergies in purchasing and greater 2004. Wilson Golf will seek greater cohesion in its distribution efficiency in the management of the delivery chain. strategy by focusing on its major customers in all distribution channels. In addition, sourcing will be stepped up in the Far PRESIDENT OF SUUNTO APPOINTED East, and the operations of the golf ball factory in Humboldt, Juha Pinomaa has been appointed President of Suunto Oy USA, will be downsized gradually. effective as of September . MISSION Amer Sports’ mission is to provide sports and fitness products ROU plaYing field ORU ambition that enable everyone from the enthusiastic beginner to the We are dedicated to active lifestyle, sports and wellness. At the core of our business is the passion for sports. In addi- professional athlete to get the best results and most enjoy- tion to this, our primary drive is setting and achieving targets, ment from their sports. moving beyond our limits both in life, business and technology, thereby enabling people to achieve their highest goals in sports and increase wellbeing in life. VISION To be the leading company in active sports providing performance enhancing products fueled by authentic brands true to the sports. 4 VALUES Amer Sports’ staff consists of people of several nationalities DETERMINED TO WIN FAIR PLAY with different business cultures. Our shared values sup- Good performance is our core value. Financial success We follow the rules. We recognize and seek to remedy our port and guide our operations around the world. Success in enables continuous development of our brands and products. faults. competition requires determination to win, team spirit and Determination to win encourages a strong work ethic and teamwork.