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 Breaking Headlines

Amer's FY Sales Rose 32% Thanx To Salomon

FEBRUARY 14, 2006 -- Amer Sports' net sales grew by 32% to EUR 1,363.7 million ('04: EUR 1,035.9 million). Salomon increased net sales by 25%. Organic net sales growth exclusive of Salomon was 7%.

Earnings before interest and taxes amounted to EUR 82.3 million (vs 100.5), including Salomon's Q4 result of EUR 37.9 million and a EUR 52.8 million provision for reorganization made at year's end.

The tax recognition of non-recurring items related to the Salomon acquisition reduced taxes for the period by EUR 38.5 million. The tax rate will return to its ordinary level in '06.

EPS were EUR 1.05 (vs 0.96). In '06, Amer Sports' net sales are expected to be EUR 1.8 billion, with Salomon being included in the figures during the entire year (pro forma '05: EUR 1,732 million). EPS in '06 are expected to come in at EUR 0.90-1.05.

CEO Roger Talermo said: "'05 was a historic year for Amer Sports. We achieved our target of becoming the world's No. 1 sports equipment company, and maintained good profitability. Our major achievements were strong organic growth and the acquisition of the Salomon.

"The Fitness Equipment Division had another successful year. Net sales rose by 20% to EUR 252.1 million. Net sales growth was fueled primarily by direct sales to major commercial customers, and the company's increased ability to deliver a 'Total Product' that addresses commercial facilities' business needs. Growth significantly outpaced that of the industry.

"Team Sports continued to perform well and posted record earnings. Net sales rose by 10% to EUR 203.8 million. Of the product groups, sales growth was seen particularly in baseball and softball bats. Sales grew in both the US and Japan. Wilson is the world's leading brand in American footballs with its market share of 78%.

"Racquet Sports also broke all its previous earnings records. Its net sales rose by 7% to EUR 225.4 million. Wilson's sales of tennis rackets were up 9%. Wilson's share of the global tennis racket market was 37%.

"In the Golf Division, net sales declined by 4%. Tough competition on the global golf equipment market continued. In December, the Golf Division kicked off the realignment of its global organization to increase operational efficiency and lower costs. We will continue to develop our golf business and keep bringing attractive products to market.

"Wilson's organization was realigned, with all its business units brought under single management.

"Atomic's net sales rose by 4% to EUR 214.0 million. Atomic was the global brand leader in alpine skis. A total of 873,000 pairs of alpine skis were delivered in '05. Atomic's share of the world's alpine ski market was about 19%.

"Sports Instruments' net sales were down 7% to EUR 72.0 million. Suunto implemented an organizational change and new management stepped in.

"Salomon's Q4 net sales amounted to EUR 255.2 million. The bicycle component manufacturer Mavic, which is part of Salomon, continued to enjoy a good sales trend, up 10% in '05. At the end of December, Salomon launched a three-year turnaround initiative that mainly concerned winter sports. Although the restructuring is extremely demanding for the organization, it has been well understood that a more competitive structure is required. The restructuring of management and reductions in the organization have resulted in a simplified structure and clear responsibilities. In addition Salomon and Atomic have started to collaborate closely to maximize synergies in winter sports categories.

"Amer Sports has established a sourcing initiative in Asia for all its brands. By consolidating operations, the Group seeks synergies in purchasing and efficiency in the management of the supply chain process.

"Amer Sports is now the market leader by a good margin in the world of sporting goods equipment. We have now reached this important target that we set for ourselves a few years ago. New, more ambitious targets must now be put forward. However, before we do that, Salomon must be integrated into Amer Sports."


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