Amer Sports Capital Markets DayBökars 15.8.2006Jean-Luc DiardPresident
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Outdoor Ftwr& App
Fitness Golf Bikecomponents
Winter equipt Tennis
OUR MARKETS
Americas26 %
Asia10 %
EMEA64 %
Winter sports equipment
52 %
Cycling16 %
Other4 %
Soft goods28 %
SALOMON NET SALES 2005
WINTER SPORTS EQUIPMENT
SALOMON MARKET POSITION
Alpine: 1
Snowboarding: 3
Nordic: 1
PRODUCT HIGHLIGHTSX-wing: ski test winner in Ski Magazin
PRODUCT HIGHLIGHTSNew Smartrak binding
PRODUCT HIGHLIGHTSNew reference in alpine boots
PRODUCT HIGHLIGHTSA record year for Nordic
389
456 444398
373 356325
0
50
100
150
200
250
300
350
400
450
500
1999
2000
2001
2002
2003
2004
2005
WINTER SPORTS EQUIPMENT SALES
SOFT GOODS
Adventure 7 - 1992Exit 2 Low - 1998
Snow Clog - 1998
XA Pro - 2002
Tech Amphibian - 2002
Symbio - 2006
SOFT GOODS - FOOTWEAR
PRODCT HIGHLIGHTSOutdoor industry award for soft shell footwear
P1 - Salomon Softgoods - May 2006
SOFT GOODS - APPAREL
Technical outerwear, harnesses, layering systems and backpacks
PRODUCT HIGHLIGHTSAward winning new generation of back bags
110
134144
160 157169 171
0
20
40
60
80
100
120
140
160
180
200
99 2000 2001 2002 2003 2004 2005 *
SOFT GOODS SALES
* 2005 Perimeter changereduced reported sales
The cyclingcomponent
business
BIKE COMPONENTS MARKET
860
525450
330
11030
550
Transmission Wheels & rims Tires Forks Pedals Mesure Other
Core Mavicbusiness
0
200
400
600
800
1000
1200
NO 1 No 2 Mavic No 4 No 5 No 6 No 7 No 8
#3 IN COMPONENTS, # 1 IN WHEELS
8 %
48 %
24 %
9 % 11 %
Road MTB City BMX others
2 M
12 M
6 M
2,2 M2,8 M
20 Million units
SPORTS BIKES MARKET(VOLUME / YEAR)
PRODUCT HIGHLIGHTSNew range of wheels in volume price points
9990
8175
5855
44
0
20
40
60
80
100
120
99 2000 2001 2002 2003 2004 2005
CYCLING SALES
SALOMON TURNAROUND PLAN 2006 -2008
SALOMON TURNAROUND PLAN 2006 -2008
• In simpliest terms, it can be expressed this way …
10
11
12
13
14
15
16
17
18
19
20
EBIT
3%
10%
WINTER SPORTS EQUIPMENT
Alpine
Skis / bindAlpine Boots Snowboard Nordic
By far our main issue
SOFT GOODS
Salomon Footwear
Salomon App & gear Bonfire
Arc Teryx
Apparel Sales are growing very rapidly yet we need to improve profitability
Restructuring Synergies ProfitableGrowth
2006 2007 2008
SALOMON TURNAROUND PLAN3 KEY STEPS
1. Focus on core activities2. Raise margins through industrial
restructuring3. Lower OPEX base4. Improve working capital management 5. Evolve / change the culture
SALOMON TURNAROUND PLAN2006 RESTRUCTURING
2006 RESTRUCTURINGFOCUS ON CORE ACTIVITIES
• Exit from non-core activities• In-line skates• Surf
• Focus on key activities• Winter sports equipment• Soft goods• Cycling
2006 RESTRUCTURINGINDUSTRIAL COSTS AND OPEX BASE
• Re-organisation of the ski production• Lower OPEX base• Reduction of 370 posts• Process completed in June for HQ, in
October for the factory
• Our DSI is too high• Target to reduce working capital by 50 MEUR
2006 RESTRUCTURINGIMPROVE WORKING CAPITAL MANAGEMENT
0
50
100
150
200
250
Atomic Precor Salomon Suunto Wilson
DS
I
• Learn to work with less resources
• Be more bottom line driven
• Simplification and focus vs complexity
2006 RESTRUCTURINGEVOLVE / CHANGE THE CULTURE
Starting to get the benefits of prior action plans
• New products in key categories• Improved margins in hardgoods• Expense reduction
2006 BESIDES RESTRUCTURING ….
• YTD sales are 12% up vs PY on pro forma basis
• The product platform is solid as all brands andproduct lines show growth
• EBIT for FY 06 should already show improvement
2006
THE RESULTS
Restructuring Synergies ProfitableGrowth
2006 2007 2008
SALOMON TURNAROUND PLAN3 KEY STEPS
• Industrial and product development
• Sales & Distribution
• Administrative & other
2007 SYNERGIESSYNERGIES WITH AMER SPORTS
2007 SYNERGIESATOMIC AND SALOMON UNTIL NOW…
The challenge
From respectful enemies
to
using our complementarities
to
help each other grow sales and margins
2007 SYNERGIESATOMIC AND SALOMON
0
50
100
150
200
250
300
350
Salomon Number 2 Number 3 Atomic Number 5 Number 6 Number 7 Number 80
100
200
300
400
500
600
A+S Number 2 Number 3 Number 4 Number 5 Number 6 Number 7
Before After
2007 SYNERGIESWINTER SPORTS SALES BENCHMARK
1. Common industrialization and production
2. Gliding products led by Atomic
3. Boots led by Salomon
4. Joint effort on Alpine bindings
5. Brand identity through independend product design
GENERAL ORGANISATIONAL PRINCPILESATOMIC/SALOMON
2007 SYNERGIESATOMIC AND SALOMON
VOLUMES MARGIN
ALPINE SKIS + ++++AND BINDINGS
ALPINE BOOTS ++ ++
SNOWBOARDING + +
NORDIC ++ +
Alpine and XC skis = # 1 priority• Atomic know-how in efficient conception / manufacturing• Better buying power• Efficient production sites
Alpine and XC boots = # 2 priority• Salomon know how and production facilities• Better buying power
2007 SYNERGIESINDUSTRY AND PRODUCT DEVELOPMENT
2007 SYNERGIES
SYNERGIES , NOT CANNIBALISATION !!!
Maximize synergies on the unvisible part, Maintain brands appeal to the consumers
Do not confuse the retailers
Attractive, and clear brand identities andproduct personnalities are a must
SAME APPEAL
DISTINCT PERSONALITIES
• Maximize back office synergies within the commonsales organisation
• Transfer means to the front office
• Leverage Group weight toward key accounts
• Implement synergies between complementaryproducts and brands
2007 SYNERGIESSALES & DISTRIBUTION
• Global sourcing
• Group logistics
• Global IT platform
• Global support functions
LONGER TERM SYNERGIESADMINISTRATION
Restructuring Synergies ProfitableGrowth
2006 2007 2008
SALOMON TURNAROUND PLAN3 Key Steps
In addition to the turnaround, we need to start to preparefor the profitable growth
• Brand revitalisation• Pockets of growth through improved competitiveness• Further opportunities in
– Cycling – Soft goods– Retail
2008 ONWARDSPROFITABLE GROWTH
CONCLUSION
• There probably could not have been a better time for Amer Sports to acquireSalomon
• Salomon group enables Amer Sports– to consolidate leading positions in
Wintersports– enter the significant and interesting markets of
Outdoor / Softgoods and Cycling equipment .
• Target for 40 MEUR EBIT improvement is intact– Restructuring– Exit from unprofitable businesses– Alpine industrial reorganisation and
product platforms
• Process to decrease working capital by 50 MEUR has started
• 2006 will already show some progressand 07 should confirm the trend .
Thank you for yourattention !