The Mammut Sports Group benefited strongly last year, in terms of both sales and profits, from its digital transformation and the introduction of new products, which were among the pillars of a five-year business plan launched in 2016 and conducted by its new chief executive, Oliver Pabst.
The Conzzeta Group's Outdoor division, which mainly consists of Mammut, achieved a 10.9 percent sales increase in 2018 to 253.4 million Swiss francs (€226.8m-$254.6m), with double-digit gains in Europe, the Americas and Asia, and growth of 9.4 percent on a comparable basis.
The successful launch of a new generation of the Eiger Extreme line of clothing and a new version of the Barryvox avalanche transceiver had a favorable impact on Mammut's sales. Conzzeta mentioned a “significant qualitative improvement in sales performance,” thanks to enhanced cooperation with selected specialist retailers, the development and expansion of the company's own e-commerce operations, the optimization of the store network and international expansion.
Better gross margins helped offset higher costs related to product design, digitalization and retail. Impressively, the operating margin (Ebit) of the division improved by two full percentage points to 2.1 percent from the low level of 0.1 percent attained in the previous year.
Further sales gains and a disproportionately higher Ebit margin are expected at Mammut by the conclusion of its five-year business plan.
Conzzeta pointed out that the brand is working steadily on its digital transformation, developing innovative tools to promote customer loyalty including its use of NFC technology as part of its “Mammut Connect” initiative.
The group indicated that there will be a further clean-up of the low-margin, high-volume business at Mammut. On the other hand, the pre-orders received from specialist retailers for the coming summer season were notably higher at the end of 2018 as compared with a year earlier, following the launch of new collections and products.
The whole Conzzeta group booked a 20.2 percent jump in total sales to CHF 1,782.2 million (€1,594.9m-$1,790.8m), but the increase on a constant-currency basis was limited to 10.4 percent for the company's continuing operations. The operating margin remained flat at 8.2 percent, but it grew by 0.8 percentage points to 8.2 percent on an adjusted basis, in line with the group's medium-term target. The net profit increased by 17.9 percent to CHF 114.8 million (€102.7m-$115.4m).
Higher margins were obtained last year in the Sheet Metal Processing and Glass Processing segments of the Swiss group than in the Outdoor division. Still, in January, Conzzeta agreed to sell the Glass Processing segment to a Finnish company for an enterprise value of €68 million.
Conzzeta's management expects further significant progress in both the Outdoor and Chemical Specialties segments this year. A slight improvement is expected in the group's overall Ebit margin, which should be more broadly based across all segments.