3Q20 Earnings Result...History 1 “Leading Authentic Sports Brand Inspired by the Style, Elegance...

3Q20 Earnings ResultNov.13th 2020

History

1

“Leading Authentic Sports Brand Inspired by

the Style, Elegance and Passion of our Italian Heritage”

Founded by FILA

brothers in Biella, Italy

1911

1973

1991

2005

2007

2010

2011

First sports apparel

market (Tennis)

Established FILA Korea

FILA Korea MBO

FILA Korea acquired FILA

trademark and global assets

(USD 400M LBO)

FILA Korea IPO (081660:KS)

FILA Korea & Mirae Asset

Global Investments

Consortium acquired Acushnet

Holdings Corp. (USD 1.2B LBO)

2016

FILA Korea became a controlling

shareholder of Acushnet Holdings Corp.

2020

Vertical demerger of

FILA Korea Op. co and

renamed to

FILA Holdings Corp.

2

Group Structure

100%100%

100%

100%

15%

100%

GLBH Holdings(Acquisition Vehicle)

FILA Luxembourg(Trademark Owner)

FILA Holdings Corp. (Listed Holding Company)

Acushnet Holdings

Corp.

Full Prospect(JV with ANTA)

FILA Sport HK(In-house Sourcing)

FILA USA(USA, Canada, Mexico)

Magnus Holdings(Holding Company)

52%

FILA Korea(Korea)

100%

49 Licensees(Global Royalty)

Expanding into upper

channels of distribution in

the US:

Foot Locker, Finish Line,

Shoe Show, Shoe Carnival etc.

New product launches

reflecting FILA’s heritage in

sports and fashion.

Expanding D2C (Direct to

Consumer) and E-commerce

business in the US.

Sponsorship with many

sports players (Sam Querrey,

Ash Barty, Timea Babos, etc.)

and tennis opens.

Successfully established FILA® as

leading high-end lifestyle casual

brand in China.

Collaborations with Anna Sui, Jason

Wu and Ginny Hilfiger etc.

Led by Anta, a leading sports apparel

company in China, FILA® has been

expanding into major markets across

China, Hong Kong, Macau and

Singapore.

Total 49 licensees

3

FILA – A Leading Authentic Global Sports Brand

Successfully re-structured

distribution channel.

Successfully expanded into

wholesale business.

Strengthening E-commerce

business.

Cost-competitiveness through

product sourcing strategy.

Successful product

collaborations with various

brands.

Direct business opportunity in

Southeast Asia region.

http://www.google.com.hk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjppLDm0r_NAhVKnZQKHawGDvIQjRwIBw&url=http://www.anta.com/&psig=AFQjCNF9zdiEi4USNnZFHplGr27W60zAYQ&ust=1466822771190034

FILA USA

FILA Licensee

Full Prospect

FILA Korea

FILA Group Business Overview

North America (U.S.A., Canada, Mexico)

Apparel and footwear based retail and wholesale distributor


Total number of stores: 509 (as of 3QE’ 20) vs. 535 (as of 3QE’ 19)

Multi-category: FILA, FILA KIDS, FILA UNDERWEAR, FILA GOLF

Joint venture (15% ownership) with ANTA Sports from 2009.

Offering premium sports & lifestyle products in China, Hong Kong, Macau, and Singapore

Contributes 3% of its wholesale revenue as Design Service Fee to FILA Korea

Total 49 licensees in Asia, North America, South America and EMEA

Revenue and profit contribution from licensee partners that operate the FILA branded

products globally

Direct

Indirect

4

Acushnet

Holdings Corp.

Magnus Holdings Co., Ltd., a wholly-owned subsidiary of FILA Holdings Corp. owns

approximately 52% of Acushnet Holdings Corp. as a controlling shareholder.

Acushnet Holdings Corp. designs, develops, manufactures, and distributes golf products

worldwide. The company operates through four segments: Titleist Golf Balls, Titleist Golf

Clubs, Titleist Golf Gear, and FootJoy Golf Wear.

Owned brands: Titleist, FootJoy, Vokey, Scotty Cameron, Pinnacle, Links & Kings,

PG Golf, KJUS

5

Consolidated Financial Summary

[Unit: KRW mn]

3 months (Jul. - Sep.) ended 9 months (Jan. - Sep.) ended

2018 2019 Variance(%) 2020 Variance(%) 2018 2019 Variance(%) 2020 Variance(%)

Revenue 725,878 866,986 19.4% 917,431 5.8% 2,192,965 2,660,865 21.3% 2,332,343 (12.3%)

Gross Profit 353,861 417,374 17.9% 446,324 6.9% 1,100,152 1,335,091 21.4% 1,154,592 (13.5%)

G.P. % 48.7% 48.1% (0.6%)p 48.6% 0.5%p 50.2% 50.2% 0.0%p 49.5% (0.7%)p

O. Profit 73,913 124,880 69.0% 155,583 24.6% 274,499 385,603 40.5% 273,005 (29.2%)

O.P. % 10.2% 14.4% 4.2%p 17.0% 2.6%p 12.5% 14.5% 2.0%p 11.7% (2.8%)p

Net Profit 45,302 98,450 117.3% 95,115 (3.4%) 206,177 286,632 39.0% 180,135 (37.2%)

6

Consolidated Financial Summary (3Q 2019 vs 3Q 2020)

FILA Consolidated Financial (With Acushnet)

FILA Group (Without Acushnet) (Unit: KRW mn)

367,676

342,036

20.2%

17.0%

3Q 2019 3Q 2020Revenue OPM

1,134,822

901,452

18.5%

15.6%

YTD 2019 YTD 2020Revenue OPM

866,986

917,431

14.4%

17.0%

3Q 2019 3Q 2020

Revenue OPM

2,660,865

2,332,343 14.5%

11.7%

YTD 2019 YTD 2020

Revenue OPM

FILA USA

FILA Licensee

Full Prospect

FILA Korea












products globally

Direct

Indirect

7

Acushnet

Holdings Corp.







PG Golf, KJUS

FILA Korea Domestic Financial Summary

8

* DSF (Design Service Fee) from Full prospect (JV with Anta Sports) is included

Full Prospect Design Service Fee Income Summary


[Unit: USD K] 2018 2019 Variance(%) 2020 Variance(%) 2018 2019 Variance(%) 2020 Variance(%)

Design Service Fee Income 4,567 6,972 52.7% 8,857 27.0% 13,923 21,680 55.7% 24,699 13.9%


[Unit: KRW mn] 2018 2019 Variance(%) 2020 Variance(%) 2018 2019 Variance(%) 2020 Variance(%)

Revenue 133,548 149,823 12.2% 121,737 (18.7%) 367,691 449,642 22.3% 392,671 (12.7%)

Gross Profit 79,294 92,105 16.2% 71,090 (22.8%) 217,641 278,273 27.9% 238,351 (14.3%)

G.P. % 59.4% 61.5% 2.1%p 58.4% (3.1%)p 59.2% 61.9% 2.7%p 60.7% (1.2%)p

O. Profit 14,966 26,455 76.8% 22,395 (15.3%) 41,689 81,751 96.1% 71,977 (12.0%)

O.P. % 11.2% 17.7% 6.5%p 18.4% 0.7%p 11.3% 18.2% 6.8%p 18.3% 0.1%p

Net Profit 18,440 35,604 93.1% 16,893 (52.6%) 48,541 76,254 57.1% 52,944 (30.6%)

Product Portfolio in Korea

9

FILA USA

FILA Korea







10

FILA Licensee

Full Prospect Joint venture (15% ownership) with ANTA Sports from 2009.





products globally

Direct

Indirect

Acushnet

Holdings Corp.







PG Golf, KJUS

FILA USA Consolidated Financial Summary

11


[Unit: USD K] 2018 2019 Variance(%) 2020 Variance(%) 2018 2019 Variance(%) 2020 Variance(%)

Revenue 110,220 147,028 33.4% 134,338 (8.6%) 282,943 428,612 51.5% 296,940 (30.7%)

Gross Profit 35,641 44,805 25.7% 37,846 (15.5%) 89,175 141,679 58.9% 88,824 (37.3%)

G.P. % 32.3% 30.5% (1.9%)p 28.2% (2.3%)p 31.5% 33.1% 1.5%p 29.9% (3.1%)p

O. Profit 8,924 10,354 16.0% 8,987 (13.2%) 17,030 32,892 93.1% 10,448 (68.2%)

O.P. % 8.1% 7.0% (1.1%) 6.7% (0.4%)p 6.0% 7.7% 1.7%p 3.5% (4.2%)p

Net Profit 6,407 6,837 6.7% 6,463 (5.5%) 11,426 22,312 95.3% 5,469 (75.5%)

Product Portfolio in USA

12

FILA Licensee












products globally

Indirect

13

FILA USA

FILA Korea

Full Prospect

Direct

Acushnet

Holdings Corp.







PG Golf, KJUS

FILA Global Royalty Summary

14


[Unit: USD K]2018 2019 Variance(%) 2020 Variance(%) 2018 2019 Variance(%) 2020 Variance(%)

Asia 3,557 4,335 21.9% 3,297 (23.9%) 10,807 13,370 23.7% 10,706 (19.9%)

North America 2,281 1,742 (23.6%) 1,339 (23.1%) 5,278 5,253 (0.5%) 3,652 (30.5%)

South America 676 488 (27.8%) 1,166 138.9% 2,128 2,850 33.9% 2,357 (17.3%)

EMEA 7,481 11,919 59.3% 8,189 (31.3%) 18,263 30,300 65.9% 21,997 (27.4%)

Category 349 443 26.9% 454 2.5% 1,333 1,414 6.1% 1,398 (1.1%)

Total (Int_Adj) 14,344 18,927 32.0% 14,445 (23.7%) 37,809 53,187 40.7% 40,110 (24.6%)

15

Global License Structure (49 licensees)

Global License Business

Licensing contract period is 5 ~10 years

On average 6-7% of FILA’s wholesale revenue generated from each licensee

Each licensee has minimum guaranteed royalty (MGR) based

on the forecasted revenue

Semi-annual Global Collaboration Meetings (GCM) held to set broad, global

strategic guidelines among all licensees

FILA Luxembourg

(Trademark owner)

EMEASouth

AmericaAsia

Global

Product

9 regional

licensees

12 regional

licensees

1 master

licensee

15 category

licensee

North

America

1 master

licensees

11 regional

licensees

General License Conditions

16

Consolidated Balance Sheet (K-IFRS)

3QE 2020 YE 2019 YE 2018

Assets 3,901,094 3,770,249 3,304,340

Current Assets 1,704,236 1,586,810 1,337,878

Cash and cash equivalents 390,991 232,032 149,001

Trade and other receivables 605,406 521,047 473,864

Inventories 610,810 735,481 632,237

Other current assets 97,030 98,250 82,776

Non-current Assets 2,196,858 2,183,439 1,966,462

Property and equipment 418,512 439,052 310,716

Intangible assets 1,561,142 1,547,923 1,491,948

Other non-current assets 217,204 196,464 163,797

Liabilities 1,931,101 1,969,306 1,797,846

Current Liabilities 912,871 867,356 672,316

Trade and other payables 419,488 413,004 405,997

Borrowings 366,354 236,394 174,426

Bonds - 63,568 -

Other current liabilities 127,029 154,389 91,893

Non-current Liabilities 1,018,230 1,101,950 1,125,530

Borrowings 520,409 611,690 746,950

Bonds - - 61,175

Other non-current liabilities 497,822 490,259 317,405

Total Equity 1,969,993 1,800,944 1,506,494

Consolidated Balance Sheet (K-IFRS)(KRW mn)

17

Appendix – Financial Summary

I. FILA Korea (unit: KRWmn)



Revenue 133,548 149,823 12.2% 121,737 (18.7%) 367,691 449,642 22.3% 392,671 (12.7%)

Gross Profit 79,294 92,105 16.2% 71,090 (22.8%) 217,641 278,273 27.9% 238,351 (14.3%)

G.P.% 59.4% 61.5% 2.1%p 58.4% (3.1%)p 59.2% 61.9% 2.7%p 60.7% (1.2%)p

O.Profit 14,966 26,455 76.8% 22,395 (15.3%) 41,689 81,751 96.1% 71,977 (12.0%)

O.P.% 11.2% 17.7% 6.5%p 18.4% 0.7%p 11.3% 18.2% 6.8%p 18.3% 0.1%p

Net Profit 18,440 35,604 93.1% 16,893 (52.6%) 48,541 76,254 57.1% 52,944 (30.6%)

I-a. Full Prospect Design Service Fee Income

(unit: USD'000)



Design Service Fee

Income4,567 6,972 52.7% 8,857 27.0% 13,923 21,680 55.7% 24,699 13.9%

◆ 3Q Revenue (approx. -KRW 28.1bn)

- Resulted from decrease in revenue due to COVID-19 outbreak and historically extended rain season

- Partially offset by increase in Design Service Fee Income from Full Prospect

◆ 3Q Gross Profit (approx. -KRW 21.0bn)

- Resulted from decrease in revenue and increased promotional activitives

◆ 3Q Net Profit (approx. -KRW 18.7bn)

- Resulted from high based net profit in 3Q'19 due to gain from asset liquidation (headquarter building sales) (approx. KRW 19.0bn)

18


II. FILA USA Consolidated (unit: USD'000)



Revenue 110,220 147,028 33.4% 134,338 (8.6%) 282,943 428,612 51.5% 296,940 (30.7%)

Gross Profit 35,641 44,805 25.7% 37,846 (15.5%) 89,175 141,679 58.9% 88,824 (37.3%)

G.P.% 32.3% 30.5% (1.9%)p 28.2% (2.3%)p 31.5% 33.1% 1.5%p 29.9% (3.1%)p

O.Profit 8,924 10,354 16.0% 8,987 (13.2%) 17,030 32,892 93.1% 10,448 (68.2%)

O.P.% 8.1% 7.0% (1.1%) 6.7% (0.4%)p 6.0% 7.7% 1.7%p 3.5% (4.2%)p

Net Profit 6,407 6,837 6.7% 6,463 (5.5%) 11,426 22,312 95.3% 5,469 (75.5%)

◆ 3Q Revenue (approx. -USD 12.7M)

- Resulted from decrease in revenue due to economic slowdown and social distancing caused by COVID-19 outbreak

◆ 3Q Gross Profit (approx. -USD 7.0M)

- Resulted from decrease in revenue caused by weak offline channel environment

- Resulted from sales expansion in lower tier distribution channel compared to 3Q'19 due to COVID-19 outbreak

◆ 3Q Operating Profit (approx. -USD 1.4M)

- Resulted from decrease in revenue and gross profit

III. Global Royalty (unit: USD'000)



Asia 3,557 4,335 21.9% 3,297 (23.9%) 10,807 13,370 23.7% 10,706 (19.9%)

North America 2,281 1,742 (23.6%) 1,339 (23.1%) 5,278 5,253 (0.5%) 3,652 (30.5%)

South America 676 488 (27.8%) 1,166 138.9% 2,128 2,850 33.9% 2,357 (17.3%)

EMEA 7,481 11,919 59.3% 8,189 (31.3%) 18,263 30,300 65.9% 21,997 (27.4%)

Category 349 443 26.9% 454 2.5% 1,333 1,414 6.1% 1,398 (1.1%)

Total(Int_Adj) 14,344 18,927 32.0% 14,445 (23.7%) 37,809 53,187 40.7% 40,110 (24.6%)

◆ 3Q All Regions (approx. -USD 4.5M)

- Resulted from decrease in revenue from overall regions excluding South America due to COVID-19 outbreak

◆ 3Q South America (approx. +USD 0.7M)

- Resulted from low based revenue in 3Q'19 due to delayed sales recognition to 4Q'19

19


IV. Consolidated Financial (unit:KRWmn)



Revenue 725,878 866,986 19.4% 917,431 5.8% 2,192,965 2,660,865 21.3% 2,332,343 (12.3%)

Gross Profit 353,861 417,374 17.9% 446,324 6.9% 1,100,152 1,335,091 21.4% 1,154,592 (13.5%)

G.P.% 48.7% 48.1% (0.6%)p 48.6% 0.5%p 50.2% 50.2% 0.0%p 49.5% (0.7%)p

O.Profit 73,913 124,880 69.0% 155,583 24.6% 274,499 385,603 40.5% 273,005 (29.2%)

O.P.% 10.2% 14.4% 4.2%p 17.0% 2.6%p 12.5% 14.5% 2.0%p 11.7% (2.8%)p

Net Profit 45,302 98,450 117.3% 95,115 (3.4%) 206,177 286,632 39.0% 180,135 (37.2%)

◆ 3Q Revenue (approx. +KRW 50.4bn)

- Resulted from revenue increase from Acushnet Holdings Corp. (approx. + KRW 76.0bn)

- Resulted from revenue decrease from FILA Group (approx. -KRW 25.6bn)

◆ 3Q Operating Profit (approx. +KRW 30.7bn)

- Resulted from operating profit increase from Acushnet Holdings Corp. (approx. +KRW 46.7bn)

- Resulted from operating profit decrease from FILA Group (approx. -KRW 16.3bn)

◆ 3Q Net Profit (approx. -KRW 3.3bn)

- Resulted from net profit decrease from FILA Group (approx. -KRW 45.6bn)

- Resulted from net profit increase from Acushnet Holdings Corp. (approx. +KRW 36.2bn)

- Resulted from increased tax expense due to deferred tax asset adjustment : Non-cash transaction (approx. +KRW 6.3bn)

Disclaimer

20

This document includes information provided for the purpose of helping to understand the business, strategies, and financial situation of FILA Holdings Corporation

(hereinafter referred to as “FILA”) and its group companies. It was not created to solicit investors to buy or sell FILA's stock. The uses of this document are advised to make

their own investment decisions and responsibility. This document has been prepared for presentation, illustration and discussion purpose only and is not legally binding.

Investment involves risk. Past performance figures are not indicative of future performance. Please carefully read through the documents and seek independent professional

advice before you make any investment decision. FILA has made every effort to ensure the accuracy of the information contained in this document. However, FILA does not

guarantee the appropriateness, accuracy, usefulness or any other matter whatsoever regarding the information. Regardless of the reason, FILA assumes no responsibility,

whatsoever, for any loss or damages resulting from changes, suspension or deletion of information contained on the document, or from the unauthorized alteration of said

information by a third party, or for damage resulting from the downloading or the use of the data.

The information described in this document may contain forward-looking statements concerning the future performance excluding the past and present fact. These forward-

looking statements contain risks and uncertainties, and do not guarantee future performance. Please note that forward-looking statements may differ from actual results

depending on changes in economic status, market trends and tax and the other systems. Please note that this document may be discontinued or terminated and that the

contents may be altered without advance notice. In addition, this document may not be readily accessible at certain times due to internal or external circumstances. It should

be recognized in advance that FILA assumes no responsibility for any trouble, loss, or damage caused thereby.

3Q20 Earnings Result...History 1 “Leading Authentic Sports Brand Inspired by the Style, Elegance...

Documents

Transcript of 3Q20 Earnings Result...History 1 “Leading Authentic Sports Brand Inspired by the Style, Elegance...