Amer Sports Q2/2014 Solid growth now we renew ourselves ...s3-eu-west-1.amazonaws.com/amersports/...sports...presentation-fin… · 5 24 July 2014 Amer Sports Interim Report Presentation

Amer Sports Q2/2014

Solid growth – now we renew ourselves for further acceleration July 24, 2014 – Heikki Takala, President and CEO

Solid growth in a seasonally low quarter

• Net sales EUR 376.1 million (377.2), +4%

– Apparel +26%, Cycling +14%, Footwear +11%, Fitness +5%

– Ball Sports declined slightly due to continuous clean-up of unprofitable sales

– EMEA +8% (Russia -11%), Americas -1% (LatAm -31%), APAC +5% (China +18%)

– B2C +22%

• Gross margin 43.9% (43.6%)

– Strong improvement in Footwear, Fitness and Apparel

• EBIT excl. NRI EUR -17.6 million (-18.7)

• Free cash flow EUR -38.7 million (-50.0)

• Amer Sports moves into the next phase of restructuring to further accelerate

profitable long-term growth towards 2020

24 July 2014 Amer Sports Interim Report Presentation 2

Balance sheet


EUR million June 30, 2014 June 30, 2013 Dec. 31, 2013

Free cash flow -38.7 -50.0 42.5

Net debt 455.0 453.7 431.7

Shareholders’ equity 719.7 694.4 761.3

Capital employed 1,174.7 1,148.1 1,193.0

Working capital 416.8 372.0 457.2

Gearing, % 63 65 57

Equity ratio, % 40.6 39.9 37.5


-40

-20

0

20

40

60

80

100

EBIT excluding non-recurring items

0

50

100

150

200

250

300

350

400

450

500

Net sales

Winter and Outdoor Q2/2014 (Q2/2013)

24 July 2014 4

MEUR MEUR

133,4 -25.4 -15.1

Q2/11 Q2/11

Q2/12

150,9

Q2/12

-27.1

Q2/13

168,7

Q2/13

Net sales +7%

• Winter Sports Equipment -21%, seasonally low quarter

• Pre-orders -4% due to cross country equipment. Pre-orders suggest increased

market shares.

• Footwear +11%

• Apparel +26%, strong contribution from Arc’teryx

• Cycling +14%

• Sports Instruments -9% due to the timing of Suunto Ambit product launches

EBIT excl. NRI EUR -22.0 million (-27.1) due to higher sales and improved gross

margin

Q2/14

174,8

Q2/14

-22.0


Ball Sports Q2/2014 (Q2/2013)

24 July 2014 5

0

20

40

60

80

100

120

140

160

180

Net sales

-5

0

5

10

15

20

25

EBIT exluding non-recurring items MEUR MEUR

9.1

Q2/11 Q2/11

144.2

Q2/12 Q2/12

Q2/13

9.7

Q2/13

136.2

Q2/14

6.3

Net sales -1% • Individual Ball Sports -3%: continuous clean-up of unprofitable sales with the objective

to first improve the gross margins, and then to re-ignite profitable growth

• Team Sports +1%: strong growth in APAC and EMEA, slight decline in the Americas

EBIT excl. NRI EUR 6.3 million (7.8) due to lower sales volumes

136.3 146.5

Q2/14

7.8


Fitness Q2/2014 (Q2/2013)

24 July 2014 6

0

20

40

60

80

100

120

Net sales

-2

0

2

4

6

8

10

12

14

16

EBIT excluding non-recurring items

MEUR

MEUR

45.9

1.0

Q2/11

Q2/11

56.4

Q2/12

Q2/12

Q2/13

4.3

Q2/14

64.3

4.1

Q2/13

Net sales +5% • Particularly strong growth in Asia Pacific

• Successful new product introductions

EBIT excl. NRI EUR 4.1 million (4.3), healthy gross margin improvement

65.1

Q2/14

-0.3

Outlook for 2014


• 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 to improve from 2013.

• The company will continue to focus on the growth of Apparel and

Footwear, consumer-driven product and marketing innovation, commercial

expansion and operational excellence.

Our strategies are working


• The majority of our businesses has very strong momentum.

• Our glidepath and building blocks are well in place for continuous

growth and improvement, fully in line with the company’s strategic

priorities.

• Where we are lagging behind, we have solid interventions underway.

Now we restructure to further accelerate profitable long-term growth towards 2020 1. Previous restructuring from 2012 successfully completed, with focus

on WSE

2. Next phase of restucturing:

– Objectives

• re-ignite profitable growth in Ball Sports

• further accelerate growth in Amer Sports’ strategic growth areas: Apparel and Footwear, Business to Consumer, digital products and services

– Will be executed during the next 18-24 months

– NRI EUR 60 million, recognized mostly in H2/2014. Cash cost EUR 25 million

→ Enables renewal for long-term acceleration through proven programs and new building blocks


APPENDIX

Net sales and EBIT breakdown (MEUR)


NET SALES

Q2/

2014

Q1/

2014 2013

Q4/

2013

Q3/

2013

Q2/

2013

Q1/

2013 2012

Q4/

2012

Q3/

2012

Q2/

2012

Q1/

2012

Winter and

Outdoor 174.8 287.5 1,289.5 433.7 420.6 168.7 266.5 1,221.2 402.8 411.0 150.9 256.5

Ball Sports 136.2 150.7 551.0 126.1 116.7 144.2 164.0 569.7 127.7 121.9 146.5 173.6

Fitness 65.1 63.3 296.0 97.6 71.6 64.3 62.5 273.1 88.0 69.0 56.4 59.7

Total 376.1 501.5 2,136.5 657.4 608.9 377.2 493.0 2,064.0 618.5 601.9 353.8 489.8

EBIT

Q2/

2014*

Q1/

2014 2013

Q4/

2013

Q3/

2013

Q2/

2013

Q1/

2013 2012*

Q4/

2012*

Q3/

2012

Q2/

2012

Q1/

2012

Winter and

Outdoor -22.0 9.5 127.0 52.5 87.4 -27.1 14.2 113.8 41.7 86.8 -25.4 10.7

Ball Sports 6.3 13.2 27.0 3.9 -2.1 7.8 17.4 28.0 1.0 -2.6 9.7 19.9

Fitness 4.1 3.4 24.4 14.3 6.2 4.3 -0.4 17.0 7.9 4.2 1.0 3.9

Headquarters -6.0 -5.5 -23.5 -6.0 -9.0 -3.7 -4.8 -20,1 -3.6 -7.1 -4.5 -4.9

Total -17.6 20.6 154.9 64.7 82.5 -18.7 26.4 138.7 47.0 81.3 -19.2 29.6

* Excluding non-recurring items

OPEX follows the seasonal pattern and growth investments

• Net sales and gross profit are

typically H2 biased due to

fall/winter pre-order deliveries

(H1/H2: ~40/60)

• Annual OPEX is evenly split to

all 4 quarters

• OPEX growth is typically more

H1 biased due to sell-in OPEX

spend for pre-orders

• H1/2014 OPEX growth EUR

13m vs. EUR 23m in H1/2013


Topline Driven

Investments

Maintenance

OPEX increase, EURm

H1-2012 H1-2013 2012 2013 H1-2014

0

10

20

30

40

50

60

Key figures


EUR million Q2/14 Q2/13 H1/14 H1/13 2013

Net sales 376.1 377.2 877.6 870.2 2,136.5

Gross profit 165.0 164.3 387.3 382.0 932.2

Gross profit, % of net sales 43.9 43.6 44.1 43.9 43.6

EBIT excluding non-recurring items -17.6 -18.7 3.0 7.7 154.9

EBIT % excluding non-recurring items 0.3 0.9 7.3

Non-recurring items -1.2 - -1.2 - -

EBIT -18.8 -18.7 1.8 7.7 154.9

EBIT % 0.2 0.9 7.3

Net cash flow after investing activities -38.7 -50.0 5.5 17.9 42.5

-100

-80

-60

-40

-20

0

20

40

60

80

100

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

Q2 cash flow follows the seasonal pattern


Net sales by region (MEUR)


MEUR

Q2/

2014

Q1/

2014 2013

Q4/

2013

Q3/

2013

Q2/

2013

Q1/

2013 2012

Q4/

2012

Q3/

2012

Q2/

2012

Q1/

2012

EMEA 156.1 249.1 1,025.2 338.6 301.6 144.5 240.5 962.7 305.3 297.6 133.1 226.7

Americas 166.0 189.2 839.4 229.3 237.2 177.6 195.3 834.1 224.8 236.2 167.4 205.7

Asia

Pacific 54.0 63.2 271.9 89.5 70.1 55.1 57.2 267.2 88.4 68.1 53.3 57.4

Total 376.1 501.5 2,136.5 657.4 608.9 377.2 493.0 2,064.0 618.5 601.9 353.8 489.8

Sales development by region Q2/2014


Winter and outdoor Fitness Total

EMEA Americas APAC

Ball sports

EMEA Americas APAC Total

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

Winter and Outdoor 108.2 12 41.3 -2 25.3 4 174.8 7

Ball Sports 32.1 2 85.6 -3 18.5 1 136.2 -1

Fitness 15.8 -3 39.1 5 10.2 16 65.1 5

Total 156.1 8 166.0 -1 54.0 5 376.1 4

* Change in local currencies

174.8 79.8 65.1 376.1

15%

61%

68%

24%

14% 23%

63%

16% 24%

60%

14% 42%

44%

Balance sheet


MEUR

June 30,

2014

June 30,

2013

Goodwill and other intangible non-current assets 486.9 502.1

Tangible non-current assets and other non-current assets 274.0 284.2

Inventories and work in progress 454.2 413.7

Receivables 472.1 443.4

Cash and cash equivalents 86.9 96.9

Shareholders’ equity 719.7 694.4

Interest bearing liabilities 541.9 550.6

- Long-term 358.0 373.1

- Current 183.9 177.5

Other liabilities 512.5 495.3

Total 1,774.1 1,740.3

Mid-term refinancing needs covered


• Cash EUR 86.9 million and

unused committed facilities

EUR 240 million (June 30,

2014)

• Commercial paper program

EUR 500 million, of which EUR

19.9 million issued

• Scheduled long-term payments

in 2014 EUR 6.2 million and in

2015 EUR 156.3 million

• Average interest rate of loan

portfolio 4.1% (3.8%)

0

50

100

150

200

250

Bonds

Bank loans

Pension Loan

Commercial Papers

Other

Contact information

• Heikki Takala, President and CEO

Tel. +358 20 712 2510

• Jussi Siitonen, CFO

Tel. +358 20 7122511

• Päivi Antola, Director, Corporate Communications and IR

Tel. +358 20 712 2537

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.

www.amersports.com


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Amer Sports Q2/2014 Solid growth now we renew ourselves ...s3-eu-west-1.amazonaws.com/amersports/...sports...presentation-fin… · 5 24 July 2014 Amer Sports Interim Report Presentation