AMER SPORTS 2013 Continued growth and …s3-eu-west-1.amazonaws.com/amersports/uploads/...driving...

AMER SPORTS 2013

Continued growth and improving

profitability

January 28, 2014, Heikki Takala, President and CEO

Amer Sports Financial Statements

• Net sales EUR 657.4 million (618.5), +12% in local currencies

- Footwear +25%, Apparel +21%, Sports Instruments +18%, Fitness +16%,

Winter Sports Equipment +8%, Ball Sports +5%, Cycling 0%

- EMEA +13%, Americas +8%, APAC +19%

- B2C +27%, Emerging markets +17%

• Gross margin 42.0% (41.9%)

• EBIT EUR 64.7 million (47.0 excl. NRI ), driven by increased sales

volumes

- EBIT margin 9.8% (7.6% excl. NRI)

• Net cash flow EUR 143.9 million (96.7), driven by decreased working

capital

Q4: strong double-digit growth, improved profitability

In local currencies

2


• Record net sales EUR 2,136.5 million (2,064.0), +8% in local currencies

- Apparel +21%, Sports Instruments +17%, Fitness +13%, Footwear +11%

- Winter Sports Equipment 3%, Ball Sports +1%, Cycling +1%

- EMEA +8%, Americas +5%, APAC +15%

- B2C +32%, Emerging markets growth +21%

• Gross margin 43.6% (43.6%): last year level safeguarded despite

increased air freight and currency headwinds

• EBIT EUR 154.9 million (138.7 excl. NRI), EBIT margin 7.3% (6.7% excl.

NRI)

- Driven by increased sales volumes

- OPEX 37.0% (37.7%). Strategic OPEX investments continued

• Dividend proposal EUR 0.40 per share (0.35)

2013: broad-based and profitable growth

3

In local currencies


Record sales improved profitability

EUR million 2013 2012 Ch % Ch %*

Net sales 2,136.5 2,064.0 4 8

Gross profit 932.2 900.6 4 7

Gross profit, % of net sales 43.6 43.6

EBIT excluding non-recurring items 154.9 138.7 12

EBIT % excluding non-recurring items 7.3 6.7

Non-recurring items 0.0 -24.8

EBIT total 154.9 113.9 36

Net cash flow after investing activities 42.5 71.8

*) In local currencies

4


• Operating expenses increased by EUR 41 million in local currencies

• Continuous investments into future growth with focus on softgoods, sales

coverage, emerging markets and business to consumers

• Restructuring continued, impacts maintenance OPEX

Continuous investments into future growth

EUR million 2013 2012 2011

Topline driven OPEX increase 22.5 10.3 19.1

Investment OPEX increase 20.9 31.9 26.1

Maintenance OPEX increase -2.3 10.9 3.7

Total increase in OPEX 41.1 53.1 48.9

In local currencies

5


Balance sheet remains healthy

EUR million Dec. 31, 2013 Dec. 31, 2012

Net debt 431.7 434.3

Shareholders’ equity 761.3 731.8

Capital employed 1,193.0 1,166.1

Working capital 457.2 400.1

Net debt / EBITDA, excluding

non-recurring items 2.2 2.4

Gearing, % 57 59

Equity ratio, % 37.5 39.1

6


Strong cash flow in Q4

-150

-100

-50

0

50

100

150

Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13

MEUR

7

H2: EUR -41m H2: EUR +19m H2: EUR +25m


No significant mid-term refinancing needs

8

• Cash EUR 270.0 million and

unused committed facilities

EUR 240 million (December

31, 2013)

• Commercial paper program

EUR 500 million, of which

EUR 119.6 million issued

• Scheduled long-term

payments in 2014 EUR 62.5

million and in 2015 EUR

157.4 million

• Average interest rate of the

loan portfolio is 3.5% (3.6)

0m

25m

50m

75m

100m

125m

150m

175m

200m

225m

2014 2015 2016 2017 2018=>

Pension Loan Bonds Bank loans Commercial Papers Other


Summary: progress vs. financial targets

9

TARGET 2009 2010 2011 2012 2013

Growth Organic FX-neutral

5% annual growth -6% 8% 9% 5% 8%

Profitability EBIT of at least 10%

of net sales 3.2% 6.2% 7.2% 6.7% 7.3%

Cash Flow Annual free cash flow

equal to net profit 4.5X 0.7X -0.2X 0.9X 0.5X

Balance

Sheet

Net Debt/EBITDA ratio

at or below 3X 3.6X 2.2X 2.3X 2.4X 2.2X

OUTLOOK


• Amer Sports expects global trading conditions to remain

challenging, with some regional improvements.

• In 2014, Amer Sports’ net sales growth in local currencies is

expected to meet at minimum the company’s long-term annual

5% growth target and EBIT excluding non-recurring items is

expected to improve from 2013.

• The company will continue to focus on softgoods growth,

consumer-driven product and marketing innovation, commercial

expansion and operational excellence.

Outlook for 2014

11

WE CONTINUE MOVING


• Majority of businesses improving according to their portfolio role,

driving scale and synergies

- Strong growth in softgoods (EUR 715 million), emerging markets, B2C, etc.

- Winter Sports Equipment: increasingly sustainable model

- Sports Instruments and Fitness turnaround continued

- Now major focus on improving Ball Sports and realizing further portfolio

synergies

• Our consumer marketing and product innovation pipeline increasingly

focused on “surrounding the consumer” with head-to-toe solutions

• Continuous improvement in Go to Market: distribution quantity and

quality, good progress on B2C

• All operations improving their KPIs

We continue to make solid progress in our strategic priorities

13


Clarify future direction &

deliver the year

Repeatable business

model

Build critical capabilities,

allocate resources and

reignite growth

• Clarify priorities, set

direction

• Continue to drive profit

recovery, deliver the year

• Continue the work on

operational efficiency &

margins improvement

• Build capabilities:

• Softgoods

• Category based development

• Go to market

• Drive organic growth:

softgoods, Russia, China, BtoC,

etc.

• Operational excellence, WSE

efficiency & profitability

• Grow the core

• Hardgoods

• Big countries

• Add more

• Softgoods

• Emerging markets

• Own retail

• Learn for future

• Next growth categories

(accessories, action

sports, Digital)

~2010

~2011...2012

~2013-

Prioritized, sequenced program

14

APPENDIX


Net sales and EBIT breakdown (MEUR)

17

NET SALES 2013

Q4/

2013

Q3/

2013

Q2/

2013

Q1/

2013 2012

Q4/

2012

Q3/

2012

Q2/

2012

Q1/

2012

Winter and

Outdoor 1,289.5 433.7 420.6 168.7 266.5 1,221.2 402.8 411.0 150.9 256.5

Ball Sports 551.0 126.1 116.7 144.2 164.0 569.7 127.7 121.9 146.5 173.6

Fitness 296.0 97.6 71.6 64.3 62.5 273.1 88.0 69.0 56.4 59.7

Total 2,136.5 657.4 608.9 377.2 493.0 2,064.0 618.5 601.9 353.8 489.8

EBIT 2013

Q4/

2013

Q3/

2013

Q2/

2013

Q1/

2013 2012*

Q4/

2012*

Q3/

2012

Q2/

2012

Q1/

2012

Winter and

Outdoor 127.0 52.5 87.4 -27.1 14.2 113.8 41.7 86.8 -25.4 10.7

Ball Sports 27.0 3.9 -2.1 7.8 17.4 28.0 1.0 -2.6 9.7 19.9

Fitness 24.4 14.3 6.2 4.3 -0.4 17.0 7.9 4.2 1.0 3.9

Headquarters -23.5 -6.0 -9.0 -3.7 -4.8 -20,1 -3.6 -7.1 -4.5 -4.9

Total 154.9 64.7 82.5 -18.7 26.4 138.7 47.0 81.3 -19.2 29.6

* Excluding non-recurring items


Business area net sales in Q4 and 2013

MEUR

Q4/

2013

Q4/

2012

Ch

%

Ch

%* 2013 2012

Ch

%

Ch

%*

Winter Sports Equipment 208.6 203.2 3 8 416.7 425.0 -2 3

Footwear 73.4 60.7 21 25 341.2 314.4 9 11

Apparel 86.9 77.0 13 21 285.4 248.6 15 21

Cycling 30.8 31.8 -3 0 128.2 129.0 -1 1

Sports Instruments 34.0 30.1 13 18 118.0 104.2 13 17

Individual Ball Sports 59.7 61.8 -3 3 306.0 318.8 -4 0

Team Sports 66.4 65.9 1 7 245.0 250.9 -2 1

Fitness 97.6 88.0 11 16 296.0 273.1 8 13

Total 657.4 618.5 6 12 2,136.5 2,064.0 4 8

18

* In local currencies


Net sales +10+%

• Apparel +21%. Both Salomon and Arc’teryx grew

• Sports Instruments +17% driven by the Suunto Ambit product family and market expansion

• Footwear +11%. All product segment and regions grew, strong growth in US

• Winter Sports Equipment +3%. Strong growth in alpine boots and cross country

• Cycling +1%, softgoods +14%

EBIT was EUR 127.0 million (113.8, excl. NRI)

• Increased sales volumes

• Increased operating expenses due to sales and distribution costs

Winter and Outdoor in 2013 (2012)

19

0

50

100

150

200

250

300

350

400

450

500

Net sales

-40

-20

0

20

40

60

80

100

EBIT excluding

non-recurring itemsMEUR MEUR

416.5

45.0 61.2

Q4/10 Q4/11 Q4/10 Q4/11

Q4/12

375.0

Q4/12

402.8

41.7

Q4/13

433.7

Q4/13

52.5


Net sales remained at previous year’s level

• Americas and EMEA flat, 6% growth in APAC

• Individual Ball Sports 0%. Tennis rackets flat, growth in tennis balls

• Team Sports +1%. Baseball trade conditions normalized

EBIT was EUR 27.0 million (28.0 excl. NRI)

Ball Sports 2013 (2012)

20

0

20

40

60

80

100

120

140

160

180

Net sales

-5

0

5

10

15

20

25

EBIT exludingnon-recurring items

MEUR MEUR

107.3

-2.7

Q4/10 Q4/10

Q4/11

109.0

Q4/11

-0.7

Q4/12 Q4/12

127.7

1.0

Q4/13

126.1

Q4/13

3.9


Net sales +13%

• EMEA +14%, the Americas +8%, APAC +39%

EBIT was EUR 24.4 million (17.0 excl. NRI)

• Increased sales volumes and improved gross margins were partly offset by higher operating expenses due to sales and distribution costs

Fitness 2013 (2012)

21

0

20

40

60

80

100

120

Net sales

-6

-4

-2

0

2

4

6

8

10

12

14

16

EBIT excluding

non-recurring itemsMEUR

MEUR

59.6 4.3 4.5

Q4/10

Q4/10 Q4/11

72.9

Q4/11

Q4/12

Q4/12

88.0 7.9

Q4/13

97.6

14.3

Q4/13


Foreign currency translation difference

22

EUR million 2013 2012

Business Area Reported Reported Local

Currency

Translation

Difference

Winter Sports Equipment 416.7 425.0 404.9 -20.1

Footwear 341.2 314.4 308.2 -6.2

Apparel 285.4 248.5 235.3 -13.2

Cycling 128.3 129.0 126.8 -2.1

Sports Instruments 118.1 104.2 100.7 -3.6

Winter & Outdoor 1,289.5 1,221.2 1,176.0 -45.2

Individual Ball Sports 306.0 318.8 306.0 -12.8

Team Sports 245.0 250.9 241.7 -9.2

Ball Sports 551.0 569.7 547.7 -22.0

Fitness 296.0 273.1 262.7 -10.5

Total 2,136.5 2,064.0 1,986.3 -77.7


Net sales by region (MEUR)

MEUR 2013

Q4/

2013

Q3/

2013

Q2/

2013

Q1/

2013 2012

Q4/

2012

Q3/

2012

Q2/

2012

Q1/

2012

EMEA 1,025.2 338.6 301.6 144.5 240.5 962.7 305.3 297.6 133.1 226.7

Americas 839.4 229.3 237.2 177.6 195.3 834.1 224.8 236.2 167.4 205.7

Asia Pacific 271.9 89.5 70.1 55.1 57.2 267.2 88.4 68.1 53.3 57.4

Total 2,136.5 657.4 608.9 377.2 493.0 2,064.0 618.5 601.9 353.8 489.8

23


Sales development by region

24

39 %

48 %

13 %

Sales development by region in 2013

Winter and Outdoor Ball Sports Fitness Total

1,289.5

65 %

21 %

14 %

551.0 296.0 2,136.5

Americas EMEA Asia Pacific

23 %

65 %

12 %

EMEA Americas Asia Pacific Total

MEUR Ch, %* MEUR Ch, %* MEUR Ch, %* MEUR Ch, %*

Winter and Outdoor 830.3 9 300.0 9 159.2 15 1,289.5 10

Ball Sports 116.8 0 356.8 0 77.4 6 551.0 1

Fitness 78.2 14 182.6 8 35.2 39 296.0 13

Total 1,025.2 8 839.4 5 271.9 15 2,136.5 8

62 %

26 %

12 %


Balance sheet

MEUR Dec. 31, 2013 Dec. 31, 2012

Goodwill and other intangible non-current assets 486.2 500.5

Tangible non-current assets and other non-current assets 269.5 282.8

Inventories and work in progress 355.1 336.7

Receivables 649.1 607.8

Cash and cash equivalents 270.0 142.5

Shareholders’ equity 761.3 731.8

Interest bearing liabilities 701.7 576.8

- Long-term 517.9 378.2

- Current 183.8 198.6

Other liabilities 566.9 561.7

Total 2,029.9 1,870.3

25


• Heikki Takala, President and CEO, tel. +358 9 7257 8210

• Jussi Siitonen, CFO, tel. +358 9 7257 8212

• Samppa Seppälä, Corporate Communications and IR,

tel. +358 9 7257 8233

www.amersports.com

Contact information

26

www.amersports.com Disclaimer Statements in this presentation, which are not historical facts, such as expectations, anticipations, beliefs and estimates, are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. Amer Sports assumes no responsibility to update any of the forward-looking statements contained herein. No representation or warranty, express or implied, is made or given by or on behalf of Amer Sports or its employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation.

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