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Amer Sports updates strategy and considers sale of Mavic and ENVE

International sporting goods operation Amer Sports has confirmed this week that it has updated its strategy. The company notes that it will prioritize acceleration in soft goods, business to consumer, China, the United States and digitalization.

Amer Sports’ extensive portfolio of brands includes Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, ENVE, Suunto, Wilson and Precor.

Going forward, the company adds that it… ‘will further drive transformation towards areas of faster growth, higher profitability, and better asset efficiency, first through the integration of the acquired Peak Performance business, and by the choice to focus the portfolio with the decision to place the Mavic cycling business under strategic review.’

Currently, Mavic represents approximately 3.5% of group sales. Also included in its cycling operation is the ENVE wheels and accessories brand, which Amer Sports acquired for US$50 million in 2016.

Amer Sports President and CEO Heikki Takala said “Going forward we continue to capitalize on the proven strategy whilst accelerating our portfolio transformation towards areas of faster growth, higher profitability, and better asset efficiency. Now we accelerate further in soft goods through Peak Performance, and we also review the portfolio focus opportunities as we place the Mavic Cycling business under strategic review.

“Next, we will complete the current strategy cycle of the Fitness and Sports Instruments businesses, both of which have positive momentum, and assess the alternatives for realizing their maximum potential.

“With our updated strategy, we expect to deliver strong continuous performance and attractive value creation.”

Amer Sports has reportedly struggled with its cycling business. In the first half of 2018, the Mavic and Enve operation were reported to have seen a 13% decline in sales to €60 million. “We are looking for somebody who can better look for Mavic’s and Enve’s assets,” added Heikki Takala.

The company’s notes that its financial targets remain unchanged:

  • Net sales: mid-single digit organic, currency-neutral annual growth
  • Profit: Annual EBIT growth (excluding items affecting comparability, IAC*) ahead of net sales growth
  • Cash flow conversion: Free cash flow / net profit at least 80%
  • Net debt / EBITDA: Year-end net debt / EBITDA ratio max 3x

* IAC = EBIT excluding items affecting comparability and depreciation and amortization

Amer Sports’ outlook for 2018 is unchanged. In 2018, Amer Sports’ net sales in local currencies as well as EBIT excluding IAC are expected to increase from 2017. Due to ongoing wholesale market uncertainties, the quarterly growth and improvement are expected to be uneven. The company adds that it will prioritize sustainable, profitable growth, focusing on its five strategic priorities (Apparel and Footwear, Direct to Consumer, China, US, and Connected Devices and Services) whilst ‘continuing its consumer-led transformation’.




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