Amer Sports seeks “accelerated improvement” with updated strategy

Amer Sports announced today an updated strategy to “drive further growth and value”, focusing on higher profitability and asset efficiency.

The updated strategy is a combination of relying on the well performing, fundamental building blocks of growth and the introduction of a new, broader toolbox.

As part of the new toolbox to enhance the continuous profitable growth of the company, Mavic cycling business has now been placed under strategic review. Mavic has not reached its financial targets over the past cycle, and the Group scale and synergy benefit has not been sufficient.

Last week, Amer Sports announced it received an all cash buyout bid for its key sports brands, including Mavic and ENVE.

Amer Sports CEO, Heikki Takala, noted that whilst the company’s long-term performance has been solid, improvement slowed down in 2016–2017 in some areas. He commented: “Sharper choices and expanded toolbox is now needed to get us back to the target glidepath.”

The updated strategy is a combination of relying on the well performing, fundamental building blocks of growth and the introduction of a new, broader toolbox. The mid-term financial targets of the company remain unchanged.

According to CFO Jussi Siitonen, the acceleration in Softgoods, Direct to Consumer, China and USA has delivered the majority of the compound annual growth during the past five years.

Siitonen outlines the company’s increased attention towards consumers: “We continue our transformation towards areas of faster growth, higher profitability, and better asset efficiency, with increasing weight on Softgoods, D2C, and China.”

Amer Sports Softgoods will this year reach 40% of the company sales, and continues to progress towards 50%, resulting in faster growth, higher profitability, and better asset efficiency for the company.

“D2C is where the consumer is, so we will be very active there”, said Takala, who is pleased with the company’s D2C strategy.

“Back in 2010, D2C sales were below two percent of the business, but will bypass 10 percent this year. The compound annual growth rate target of over 20 percent has been reached. In Softgoods the share of D2C can be up to 25–30 per cent as Amer Sports will continue pushing it.”