amer sports q2/2012s3-eu-west-1.amazonaws.com/amersports/uploads/...amer sports results presentation...

AMER SPORTS Q2/2012

August 2, 2012 // Heikki Takala, President and CEO

Amer Sports Results Presentation

• Net sales EUR 353.8 million (315.6), +5% in local currencies

- Apparel +38%, Fitness +11% and Sports Instruments +14%*

- Geographically, EMEA +1%, Americas +3% and APAC +22%

- Major retailer de-stocking in Europe impacted particularly Footwear

- High growth rates in China and Russia

- Own retail and e-commerce progressing fast

• Gross margin improved to 43.1 (42.3%)

• EBIT EUR -19.8 million (-10.9)

- Growth investments into softgoods, sales coverage, emerging markets

and own retail

Growth investments continue, impacting seasonally low quarter

Change in local currencies

* Underlying sales excl. divested businesses 2


EBIT development Q2 2012 YoY, EUR million

-25

-20

-15

-10

-5

0

Q2/12

-19.8

Other

& FX

4.7

OPEX

14.1

Margin/

Mix

3.3

Growth

6.6

Q2/11

-10.9

-25

-20

-15

-10

-5

0

0.5

Q2/12

-19.8

HQ

0.7

Fitness

1.3

Ball

Sports

W&O

10.4

Q2/11

-10.9

3


H1 reconciliation

EUR million 1–6/12 1–6/11 Ch % Ch %* 2011

Net sales 843.6 764.7 10 6 1,880.8

Gross profit 368.8 328.1 12 8 817.4

Gross profit, % of net sales 43.7 42.9 43.5

EBIT 9.2 14.8 -38 -47 135.5

EBIT % 1.1 1.9 7.2

Net cash flow after investing

activities 53.2 20.0 -21.4

* Change in local currencies

4


Clarify future direction &

deliver the year

Profitability, growth

acceleration

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

• Continued growth in

categories and countries

• Big brands,

big countries,

big categories

~2010

~2011...2012

~2013-

Reminder: Strategic long-term glidepath

5


0

10

20

30

40

50

60

2010 2011 H1/2012

Growth investments

Top line driven OPEX

Maintenance OPEX

OPEX investments in 2010–H1/2012 OPEX increase in EUR million

• Growth investment benefits coming with a delay of 6-18 months

• Cost efficiencies in base businesses achieved and will be further intensified

6


• Expansion of softgoods

- Apparel +32% in H1. Future brand/category expansions in the pipeline.

• Improved Go to Market

- E.g. softgoods capability, selected 3rd party distributor consolidation,

strategic account management, Precor EMEA sales force expansion

(sales +21% in H1)

• Emerging markets

- H1 China +56%, Russia +49%, Latin America footwear +51%

• Own retail

- 17 new stores, 22 e-commerce stores (past 12 months)

Investing into future growth

7


Salomon brand store, Salt Lake City

Own retail

Salomon brand store, Toulouse


Arc’teryx shop in shop, China

Salomon shop in shop, Japan

Suunto shop in shop, Japan


Arc’teryx shop in shop, Oslo

Wilson concept store, Mexico

Suunto shop

in shop,

Korea


Balance sheet continues to be solid

EUR million June 30, 2012 Dec. 31, 2011

Net debt 457.0 391.6

Shareholders’ equity 725.9 829.4

Capital employed* 1,079.2 1,027.3

Working capital 394.3 469.3

Gearing, % 63 47

Equity ratio, % 39.3 45.6

* 12 month rolling average

12

• Increase in net debt is mainly due to the redemption of the

EUR 60 million hybrid bond in March 2012


• Cash reserves EUR 216.7

million: funding seasonally

high working capital in Q3.

• Unused credit facilities EUR

240.0 million.

• 3-year term loan of EUR

20.0 million was taken in

April

• Bilateral 5-year committed

revolving credit facility of

EUR 40.0 million was

signed in June

Mid-term refinancing needs covered

,0m

25,0m

50,0m

75,0m

100,0m

125,0m

150,0m

175,0m

200,0m

225,0m

2012 2013 2014 2015 2016=>

Pension Loan Term Loan Bonds Commercial Papers Other

13

The average interest rate of loan portfolio: 3.3%

(December 31, 2011: 3.6%)


Net sales +8%

• Winter Sports Equipment slightly up in a low quarter. Strengthened market share positions. Operational efficiency improvement continues.

• Footwear retailer de-stocking in Europe. Net sales in Q2 at last year’s level.

• Apparel +38%

• Cycling +2%

• Sports Instruments +14%* boosted by Ambit GPS launch.

EBIT EUR -25.4 million (-15.1)

• Impact of increased sales volumes EUR +5 million, higher gross margins EUR +2 million, operating expenses EUR -12 million

Winter and Outdoor in Q2/2012 (Q2/2011)

0

50

100

150

200

250

300

350

400

450

Net sales

-40

-20

0

20

40

60

80

100

EBIT excludingnon-recurring itemsMEUR MEUR

133.4 -25.4 -15.1 116.5 -24.2

Q2/10 Q2/11 Q2/09 Q2/10 Q2/09

106.6

Q2/11

-29.2

14

Q2/12

150.9

Q2/12

* Underlying sales excl. divested businesses


Net sales at last year’s level

• Sales of performance tennis racquets +5% (H1: +19%)

• Team Sports -2% driven by the baseball bat product category

• APAC +6%, EMEA flat, Americas -3%

EBIT EUR 9.7 million (9.1)

• Increased investment into product initiative pipeline for 2013 and onwards.

0

20

40

60

80

100

120

140

160

180

200

Net sales

-5

0

5

10

15

20

25

EBIT exludingnon-recurring items

MEUR MEUR

153.9 136.3

9.1

17.0 135.7

7.4

Q2/09 Q2/10 Q2/09 Q2/10 Q2/11

146.5

Q2/11

9.7

15

Q2/12 Q2/12

Ball Sports Q2/2012 (Q2/2011)


Net sales +11%

• Sales in EMEA +26% and in APAC +11%, driven by Go to Market improvement

EBIT EUR 1.0 million (-0.3)

• Higher sales volumes

Fitness Q2/2012 (Q2/2011)

0

10

20

30

40

50

60

70

80

Net sales

-6

-4

-2

0

2

4

6

EBIT excludingnon-recurring itemsMEUR

MEUR

45.9 47.1 -0.3

1.0 42.4 -3.7

Q2/09 Q2/10 Q2/09 Q2/10 Q2/11

56.4

Q2/11 Q2/12

-2.2

16

Q2/12

OUTLOOK


• In 2012, Amer Sports’ net sales in local currencies are expected to increase from 2011

in line with the company’s annual 5% growth target.

• For the full year, Apparel net sales growth is estimated to be over 20%. In Footwear,

sales growth is estimated to be approximately 5% due to retailers’ inventory reduction.

In Apparel and Footwear, the company no longer provides semi-annual pre-order

figures as Amer Sports considers that these are not a reliable indicator of the future

growth. In Winter Sports Equipment, Amer Sports has gained market shares and

strengthened its market position but pre-orders for the season 2012/13 are down by

13% due to the late and mild winter in the previous season.

• Amer Sports is continuously driving synergies and scale and continues to invest into

future growth with focus on softgoods, sales coverage, emerging markets, and own

retail. These investments support Amer Sports’ sales and gross margin improvement

but require up-front operational expenses. Amer Sports 2012 EBIT excluding non-

recurring items is expected to be approximately at the level of 2011 despite the

uncertainty in the winter sports market and the ongoing investments into the future

growth.

Outlook for 2012

18

BROAD-BASED

IMPROVEMENT

CONTINUES


Broad-based improvement continues

Business

area Objective Actions

Footwear Further accelerate growth

Expand commercial footprint, enter new segments and categories, category-based operation ☻ -

Apparel Drive significant revenue growth

Expand commercial footprint, enter new segments and categories, category-based operation ☻

Winter Sports Equipment

To sustainable profitability, irrespective of weather conditions

Drive operational excellence, grow in selected areas ☻ -

Ball Sports Focus on profitable growth Grow in softgoods, DeMarini, distribution; fix Golf ☻(+)

Fitness Back to profitability Improve through top line growth in EMEA, APAC, North American consumer, networked fitness ☻ +

Cycling

First back to target profitability, then accelerate profitable growth

Expand wheel/tyre systems and softgoods ☻

Sports Instruments

Improve profitability, simplify Focus product portfolio, grow in selected areas ☻ +

20

APPENDIX


Net sales and EBIT

EUR million

Q2/

2012

Q2/

2011

Ch

%

Ch

%* 2011 2010

Ch

%

Ch

%*

NET SALES, TOTAL 1,880.8 1,740.4 8 9

Winter and Outdoor 150.9 133.4 13 8 1,137.6 1,015.0 12 12

Winter Sports Equipment 14.4 11.1 30 20 448.4 438.4 2 2

Footwear 56.7 54.9 3 0 287.7 219.6 31 31

Apparel 25.4 17.4 46 38 191.6 156.6 22 22

Cycling 29.6 27.9 6 2 120.5 106.4 13 14

Sports Instruments 24.8 22.1 12 14*** 89.4 94.0 -5 -4

Ball Sports 146.5 136.3 7 -1 511.0 520.6 -2 0

Individual Ball Sports 87.3 81.8 7 0 283.0 308.5 -8 -7

Team Sports 59.2 54.5 9 -2 228.0 212.1 7 11

Fitness 56.4 45.9 23 11 232.2 204.8 13 17

EBIT, TOTAL -19.8 -10.9 135.5 107.9** 26

Winter and Outdoor -25.4 -15.1 118.5 96.9 22

Ball Sports 9.7 9.1 25.0 32.2 -22

Fitness 1.0 -0.3 10.3 2.7

Headquarters -5.1 -4.6 -18.3 -23.9

Free cash flow -44.2 -67.1 -21.4 50.1

23

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Net sales and EBIT breakdown (MEUR)

NET SALES

Q2/

2012

Q1/

2012

Q4/

2011

Q3/

2011

Q2/

2011

Q1/

2011

Q4/

2010

Q3/

2010

Q2/

2010

Q1/

2010 2011 2010

Winter and

Outdoor 150.9 256.5 375.0 395.7 133.4 233.5 416.5 300.3 116.5 181.7 1,137.6 1,015.0

Ball Sports 146.5 173.6 109.0 106.7 136.3 159.0 107.3 114.0 153.9 145.4 511.0 520.6

Fitness 56.4 59.7 72.9 56.8 45.9 56.6 59.6 52.6 47.1 45.5 232.2 204.8

Total 353.8 489.8 556.9 559.2 315.6 449.1 583.4 466.9 317.5 372.6 1,880.8 1,740.4

EBIT

Q2/

2012

Q1/

2012

Q4/

2011

Q3/

2011

Q2/

2011

Q1/

2011

Q4/

2010

Q3/

2010

Q2/

2010

Q1/

2010 2011 2010

Winter and

Outdoor -25.4 10.7 45.0 79.3 -15.1 9.3 51.2 58.2 -24.2 1.7 118.5 96.9

Ball Sports 9.7 19.9 -0.7 -1.1 9.1 17.7 -5.4 3.5 17.0 14.4 25.0 32.2

Fitness 1.0 3.9 4.5 2.8 -0.3 3.3 2.0 2.8 -3.7 -0.7 10.3 2.7

Headquarters -5.1 -5.5 -2.5 -6.6 -4.6 -4.6 0.6 -8.7 -6.0 -5.9 -18.3 -23.9

Total -19.8 29.0 46.3 74.4 -10.9 25.7 48.4 55.8 -16.9 9.5 135.5 107.9*

24

* Excluding non-recurring items


Net sales by region (MEUR)

MEUR

Q2/

2012

Q1/

2012

Q4/

2011

Q3/

2011

Q2/

2011

Q1/

2011

Q4/

2010

Q3/

2010

Q2/

2010

Q1/

2010 2011 2010

EMEA 133.1 226.7 273.8 300.0 129.7 214.1 325.8 226.9 120.8 172.2 917.6 845.7

Americas 167.4 205.7 205.4 203.8 146.5 186.4 184.1 192.3 153.2 158.3 742.1 687.9

Asia Pacific 53.3 57.4 77.7 55.4 39.4 48.6 73.5 47.7 43.5 42.1 221.1 206.8

Total 353.8 489.8 556.9 559.2 315.6 449.1 583.4 466.9 317.5 372.6 1,880.8 1,740.4

25


26 %

56 %

18 %

Sales development by region in Q2/2012

Winter and Outdoor Ball Sports Fitness Total

150.9

Americas EMEA Asia Pacific Total

Q2/12 Ch, YoY Q2/12 Ch, YoY Q2/12 Ch, YoY Q2/12 Ch, YoY

MEUR % %, LC MEUR % %, LC MEUR % %, LC MEUR % %, LC

Winter and Outdoor 38.4 28 18 84.9 -1 -2 27.6 55 40 150.9 13 8

Ball Sports 92.3 8 -3 33.7 2 0 20.5 17 6 146.5 7 -1

Fitness 36.7 19 6 14.5 32 26 5.2 27 11 56.4 23 11

Total 167.4 14 3 133.1 3 1 53.3 35 22 353.8 12 5

63 %

23 %

14 %

146.5

65 %

26 %

9 %

56.4 47 %

38 %

15 %

353.8

Americas EMEA Asia Pacific

26


Balance sheet

MEUR

June 30,

2012

June 30,

2011

Dec. 30,

2011

Goodwill and other intangible non-current assets 511.2 478.3 510.2

Tangible non-current assets and other non-current assets 257.9 240.1 257.4

Inventories and work in progress 424.1 389.4 359.7

Receivables 437.3 347.4 611.9

Cash and cash equivalents 216.7 46.0 78.8

Shareholders’ equity 725.9 717.1* 829.4*

Interest bearing liabilities 673.7 370.8 470.4

- Long-term 414.6 326.7 251.4

- Current 259.1 44.1 219.0

Other liabilities 447.6 413.3 518.2

Total 1,847.2 1,501.2 1,818.0

* Including hybrid bond

27


• Heikki Takala, President and CEO

tel. +358 9 7257 8210

• Jussi Siitonen, CFO

tel. +358 9 7257 8212

• Päivi Antola, Director, Corporate Communications and IR

tel. +358 9 7257 8233

www.amersports.com

Contact information

28

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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