Amer Sports
2016 – A year of record sales and profit, and a year of external challengesFebruary 9, 2017 – Heikki Takala, President and CEO
Q4 2016: In a challenging market, we continued to pace our growth
• Net sales EUR 772.4 million (783.7 ), -2%*
– Solid growth in Apparel
– Postponed launches in Sports Instruments, delayed impact from launches in Fitness
– Winter Sports Equipment and Footwear deliveries peaked earlier in the year
• Gross margin 44.7% (43.8%)
• EBIT excl. IAC EUR 81.3 million (84.0)
– Investments into 2020 acceleration priorities continued
• Free cash flow EUR 152.8 million (159.4)
9 February 2017 Amer Sports Financial Statements2
* In local currencies
Net sales by Business Unit in Q4
9 February 2017 Amer Sports Financial Statements3
MEUR Q4/2016 Q4/2015
Ch
%
Ch
%*
Footwear 96.4 100.5 -4 -3
Apparel 131.5 118.6 11 10
Winter Sports Equipment 188.5 201.3 -6 -8
Cycling 38.2 35.2 9 8
Sports Instruments 36.1 46.3 -22 -22
Individual Ball Sports 67.9 68.1 0 -1
Team Sports 104.0 97.6 7 5
Fitness 109.8 116.1 -5 -5
*In local currencies
2016: Record net sales, gross margin and EBIT
• Net sales EUR 2,622.1 million (2,534.4), +4%*. Organic
growth +3%*
• Gross margin 46.3% (45.2%), OPEX 38.2% (37.1%)
• EBIT EUR 221.7 million (212.1), EBIT margin 8.5% (8.4%)**
• Free cash flow EUR 64.4 million (121.7), 51% of net profit
• Capital repayment proposal EUR 0.62 per share (dividend
0.55)
9 February 2017 Amer Sports Financial Statements4
* In local currencies
** Excl. IAC
Net sales by Business Unit in 2016
9 February 2017 Amer Sports Financial Statements5
MEUR 2016 2015
Ch
%
Ch
%*
Footwear 490.5 461.2 6 8
Apparel 431.1 387.2 11 13
Winter Sports Equipment 388.5 400.2 -3 -4
Cycling 150.2 138.5 8 8
Sports Instruments 141.5 143.0 -1 0
Individual Ball Sports 299.8 315.4 -5 -4
Team Sports 371.3 331.6 12 12
Fitness 349.2 357.3 -2 -1
*In local currencies
B2C and Digital acceleration main OPEX growth drivers, maintenance down
Amer Sports Financial Statements6
15 29
4641
-5
814
23
68
FY-15FY-14
37
1
Investment driven
Topline driven
Maintenance driven
FY-16
66 Topline driven
• Sales/customer service personnel
• Sales commissions
• Retails stores (> 1year operative)
• Outbound freight
• Warehousing costs
• Marketing: sell-in, sell-through
• Warranties, bad debts
Investment driven
• R&D
• Sales personnel: distribution expansion
• New retail stores (< 1year operative)
• Digital platform
• Consumer marketing (acceleration)
Maintenance driven
• G&A
Cash Flow followed the historical pattern (excl. 2015)
09-02-2017 Amer Sports Financial Statements7
EURm
-150,0
-125,0
-100,0
-75,0
-50,0
-25,0
0,0
25,0
50,0
75,0
100,0
125,0
150,0
175,0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015 2016
42.553.5
121.7
64.3
Balance sheet
9 February 2017 Amer Sports Financial Statements8
EUR million Dec. 31, 2016 Dec. 31, 2015
Net debt 535.9 460.3
Shareholder’s equity 1,003.1 949.6
Capital employed 1,539.1 1,409.9
Working capital 487.6 508.9
Capital turnover 1.77 1.85
ROCE, % 14.9 15.5
Net debt/EBITDA 1.9 1.7
Net debt/equity 0.53 0.48
Equity ratio, % 36.9 37.2
What worked: we reached several milestones in 2016
• Softgoods +11% to EUR 1 billion, up by EUR 700 million vs. 7 years ago
– Arc’teryx +21% in 2016
• Business to Consumer +27% to EUR 200+ million (EUR 36 million in
2010)
– 27 new own stores opened, ~290 stores in total, ~70 e-commerce stores
• USA +6%, bypassed USD 1 billion
• China +26% to EUR 100+ million (EUR 16 million in 2010)
• Company Gross Margin all time high 46+%
• Winter Sports Equipment profitability improved further, despite several
mild winters
9 February 2017 Amer Sports Financial Statements9
What did not work – and our solution
• Market slowdown
→ We pace our growth and protect gross margin
→ We continue strategic investments
→ We expand the 2016 restucturing program, ~100 EBIT
margin basis points in the next 24 months
• Sports Instruments product launches postponed, delayed impact
from Fitness launches
→ Pipeline and impact confirmed for Q2 onwards
9 February 2017 Amer Sports Financial Statements10
Our pipeline of new initiatives is strong
9 February 2017 Amer Sports Financial Statements11
20+ new stores
Warehouse capacity
improvement
Outlook
Outlook for 2017
9 February 2017 Amer Sports Financial Statements13
• In 2017, Amer Sports’ net sales in local currencies are expected
to increase from 2016, despite short-term market softness. The
growth is expected to be biased to the second half of the year.
• The company will continue to focus on growing the core
business and the five prioritized areas: Apparel and Footwear,
US, China, Business to Consumer, as well as digitally connected
devices and services.
Accelerating toward 2020
The way forward: toward 2020
• Grow the core
• Focus on accelerating profitable growth especially in the 5
prioritized areas:
– Apparel and Footwear (2020 target: MEUR 1,500+)
– US (MUSD 1,500+)
– China (MEUR 200+)
– Business to Consumer (MEUR 400+)
– Digitally Connected Devices and Services (MEUR 600+)
• Ongoing investment into renewal and company transformation
9 February 201715 Amer Sports Financial Statements
APPENDIX
Record sales and operating profit
9 February 2017 Amer Sports Financial Statements18
EUR million 2016 2015 Ch % Ch %*
Net sales 2,622.1 2,534.4 3 4
Gross profit 1,213.5 1,145.9 6
Gross profit, % of net sales 46.3 45.2
EBIT excluding IAC 221.7 212.1 5
EBIT % excluding IAC 8.5 8.4
IAC -16.9 -8.0
EBIT 204.8 204.1
Free cash flow 64.4 121.7
*) In local currencies
**) Cash flow from operating activities - net capital expenditures – change in restricted
cash (Net capital expenditures: Total capital expenditure less proceeds from sale of
assets).
Net sales and EBIT breakdown
9 February 201719
* Excl. IAC
NET SALES
(MEUR) 2016
Q4/
2016
Q3/
2016
Q2/
2016
Q1/
2016 2015
Q4/
2015
Q3/
2015
Q2/
2015
Q1/
2015
Outdoor 1,601.8 490.7 505.7 231.0 374.4 1,530.1 501.9 476.6 209.7 341.9
Ball Sports 671.1 171.9 147.0 165.5 186.7 647.0 165.7 147.8 169.4 164.1
Fitness 349.2 109.8 84.1 80.9 74.4 357.3 116.1 89.3 82.0 69.9
Total 2,622.1 772.4 736.8 477.4 635.5 2,534.4 783.7 713.7 461.1 575.9
EBIT
(MEUR) 2016
Q4/
2016
Q3/
2016*
Q2/
2016
Q1/
2016* 2015*
Q4/
2015
Q3/
2015
Q2/
2015*
Q1/
2015*
Outdoor 196.9 69.7 105.5 -16.0 37.7 161.2 65.6 92.9 -18.7 21.4
Ball Sports 44.8 12.8 5.3 7.7 19.0 46.6 8.2 8.8 11.3 18.3
Fitness 17.0 6.8 5.4 4.5 0.3 31.2 15.7 9.1 5.1 1.3
Headquarters -37.0 -8.0 -9.7 -8.3 -11.0 -26.9 -5.5 -7.3 -6.7 -7.4
Total 204.8 73.1 106.5 -12.1 46.0 212.1 84.0 103.5 -9.0 33.6
Amer Sports Financial Statements
9 February 2017 Amer Sports Financial Statements20
-40
-20
0
20
40
60
80
100
120
EBIT excluding items affecting comparability
0
100
200
300
400
500
600
Net sales
Outdoor 2016 (2015)
9 February 201720
MEURMEUR
41.7
Q4/12 Q4/12Q4/13
402.8
Q4/13
52.5
Q4/14
433.7
Q4/14
Net sales EUR 1,601.8 million, +5%*
• Apparel +13%, Footwear +8%
• Winter Sports Equipment -4% due to mild winters.
• Cycling +8%. Acquisition of ENVE Composites LLC.
• Sports Instruments at the level of 2015, postponed product launches.
EBIT excl. IAC EUR 196.9 million (161.2 )
Q4/15
456.7
Q4/15
55.0
Q4/16
501.9
Q4/16
65.6
490.769.7
*In local currencies
-5
0
5
10
15
20
25
EBIT excluding items affecting comparability
Ball Sports 2016 (2015)
Net sales EUR 671.1 million, +4*
• Growth in Team Sports, especially on baseball, was offset by challenging
market conditions in Individual Ball Sports and US customer bankruptcies
EBIT excl. IAC EUR 44.8 million (46.6)
9 February 2017 Amer Sports Financial Statements21 9 February 201721
MEUR
Q4/12 Q4/13 Q4/14
12.8
Q4/15
3.9
-1.0
12.5
Q4/160
20
40
60
80
100
120
140
160
180
200
Net salesMEUR
Q4/12
126.1
Q4/13 Q4/14
136.9127.7
Q4/15 Q4/16
165.7
8.2
*In local currencies
171.9
Fitness 2016 (2015)
Net sales EUR 349.2 million, -4%*
• Delayed impact of some product launches.
EBIT excl. IAC EUR 17.0 million (31.2)
9 February 2017 Amer Sports Financial Statements22 9 February 201722
0
20
40
60
80
100
120
140
Net sales
MEUR
Q4/12 Q4/12
88.0
Q4/13 Q4/13Q4/14 Q4/15
97.6
Q3/14
111.7
Q4/15Q4/16
116.1
Q4/16-5
0
5
10
15
20
EBIT excluding items affecting comparability
7.96.8
14.3 14.9 15.7
109.8
*In local currencies
Net sales by region
9 February 201723
MEUR 2016
Q4/
2016
Q3/
2016
Q2/
2016
Q1/
2016 2015
Q4/
2015
Q3/
2015
Q2/
2015
Q1/
2015
EMEA 1,133.7 345.3 334.7 174.8 278.9 1,114.7 356.8 319.3 168.0 270.6
Americas 1,116.0 314.5 304.6 229.8 267.1 1,070.1 313.2 302.0 224.7 230.2
Asia
Pacific 372.4 112.6 97.5 72.8 89.5 349.6 113.7 92.4 68.4 75.1
Total 2,622.1 772.4 736.8 477.4 635.5 2,534.4 783.7 713.7 461.1 575.9
Amer Sports Financial Statements
Outdoor
Sales development by region in 2016
9 February 2017 Amer Sports Financial Statements24
Fitness Total
EMEA Americas APAC
Ball Sports
EMEA Americas APAC Total
MEUR Ch, %* MEUR Ch, %* MEUR Ch, %* MEUR Ch, %*
Outdoor 935.5 3 429.6 9 236.7 7 1,601.8 5
Ball Sports 118.2 6 476.2 6 76.7 -5 671,1 4
Fitness 80.0 0 210.2 -4 59.0 6 349.2 -1
Total 1,133.7 3 1, 116.0 5 372,4 4 2,622.1 4
* Change in local currencies
1,601.8 671.1 349.2 2,622.1
15%
68%
11%18%
71%
17%23%
60%
14%43%
43%
58%
27%
Foreign currency translation difference
9 February 2017 Amer Sports Financial Statements25
EUR million 2016 2015
Business Area Reported ReportedLocal
Currency
Translation
Difference
Footwear 490.5 461.2 455.0 -6.2
Apparel 431.1 387.2 382.0 -5.2
Winter Sports Equipment 388.5 400.2 403.3 3.1
Cycling 150.2 138.5 139.2 0.7
Sports Instruments 141.5 143.0 141.9 -1.1
Outdoor 1,601.8 1,530.1 1,521.5 -8.7
Individual Ball Sports 299.8 315.4 312.9 -2.5
Team Sports 371.3 331.6 330.9 -0.7
Ball Sports 671.1 647.0 643.8 -3.2
Fitness 349.2 357.3 353.7 -3.6
Total 2,622.1 2,534.4 2,519.0 -15.5
Free cash flow
9 February 201726
-150
-100
-50
0
50
100
150
200
Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16
Free cash flow: Cash flow from operating activities - net capital expenditures – change in restricted cash
(Net capital expenditures: Total capital expenditure less proceeds from sale of assets).
Amer Sports Financial Statements
Refinancing needs well covered
9 February 2017 Amer Sports Financial Statements27
• Cash EUR 364.0 million and
unused committed facilities EUR
150 million (Dec 31, 2016)
• Commercial paper program in
size of EUR 500 million, out of
which EUR 49.9 million utilized
• No scheduled repayments of
long-term loans in 2017.
• Average interest rate of loan
portfolio 2.0% (Dec 31, 2015
2.7%)
0,0
50,0
100,0
150,0
200,0
250,0
300,0
Bonds
Bank loans
CommercialPapers
Other
Next 12 months net cash flows and related hedges, main FX pairs
9 February 2017 Amer Sports Financial Statements28
Main FX pairs Hedge
%
Next 12mth
flow (EURm)
Spot
(@31.12.16)
Hedge
FX ’17
Hedge
FX’18
USD purchases against EUR 100% -399 1.05 1.13 1.12
USD sales against EUR 100% +65 1.05 1.11 1.07
GBP sales against EUR 100% +80 0.86 0.80 0.86
CHF sales against EUR 100% +51 1.07 1.08 1.06
USD (net)purchases against CAD 100% -87 1.35 1.32 -
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
9 February 201729 Amer Sports Financial Statements
DisclaimerStatements 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 expressedin 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 orany other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation.
www.amersports.com
9 February 201730 Amer Sports Financial Statements