amer sports q3/2015 profitable growth continues, focus on...
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Amer Sports Q3/2015
Profitable growth continues, focus on acceleration toward 2020October 22, 2015 - Heikki Takala, President and CEO
Profitable growth continues
• Net sales EUR 713.7 million (645.8), +5% in local currencies
– Excl. acquisitions, net sales +4%
– Footwear +19%, Ball Sports +16%, Apparel +14%
– Quarterly sales composition differs significantly from 2014
– Americas +7%, APAC +15%, EMEA at last year’s level
– B2C +28%
• Gross margin 47.0% (44.7%)
• EBIT EUR 103.5 million (87.6), 14.5% of net sales (13.6%)
• Free cash flow EUR -92.2 million (-84.8)
23 October 2015 Amer Sports Interim Report Presentation2
Balance sheet
23 October 2015 Amer Sports Interim Report Presentation3
EUR million
September 30,
2015
September 30,
2014 Dec. 31, 2014
Free cash flow, YTD -37.7 -79.3 53.5
Net debt 616.6 530.4 419.1
Shareholders’ equity 886.4 807.0 842.8
Capital employed 1,503.0 1,337.4 1,261.9
Working capital 637.1 585.0 495.4
Net debt/equity 0.70 0.66 0.50
Equity ratio, % 36.6 39.2 38.8
23 October 2015 Amer Sports Interim Report Presentation4
Outdoor Q3/2015 (Q3/2014)
23 October 20154
Net sales +3% in local currencies
• Sales composition differs significantly from 2014
• Footwear +19%, Apparel +14%, delivery peak in Q3 this year
• Winter Sports Equipment -13%, peak in Q4 this year
• Cycling -5%, delay in a key product launch
• Sports Instruments -10%, 2015 key launches in Q4
EBIT EUR 92.9 million (83.1), higher gross margin and sales
-40
-20
0
20
40
60
80
100
EBIT excludingnon-recurring items
0
100
200
300
400
500
600
Net salesMEUR
MEUR
395.7
86.879.3
Q3/11 Q3/11Q3/12
411.0
Q3/12
87.4
Q3/13
420.6
Q3/13Q3/14
452.2
Q3/14
83.1
Q3/15
476.6
Q3/15
92.9
23 October 2015 Amer Sports Interim Report Presentation5
Ball Sports Q3/2015 (Q3/2014)
23 October 20155
Net sales +16% in local currencies. Excl. Louisville Slugger +10%. • Healthier fundamentals following Ball Sports’ new strategy
EBIT EUR 8.8 million (3.9) driven by higher sales and gross margin
0
20
40
60
80
100
120
140
160
180
Net sales
-5
0
5
10
15
20
25
EBIT excludingnon-recurring itemsMEUR MEUR
-1.1
Q3/11Q3/11
116.7
Q3/12Q3/12 Q3/13
-2.6
Q3/13
112.9
Q3/14
3.9
106.7
121.9
Q3/14
-2.1
Q3/15
147.8
8.8
Q3/15
23 October 2015 Amer Sports Interim Report Presentation6
Fitness Q3/2015 (Q3/2014)
23 October 20156
Net sales -3% in local currencies
• 2015 focus on profitability and integration, preparing for acceleration in 2016 with new
building blocks (Queenax and Spinning)
EBIT EUR 9.1 million (7.3)
0
20
40
60
80
100
120
Net salesMEUR
56.8
Q3/11
69.0
Q3/12 Q3/13 Q3/14
71.680.7
Q3/15
89.3
-2
0
2
4
6
8
10
12
14
16
EBIT excludingnon-recurring itemsMEUR
4.2
Q3/11 Q3/12
6.27.3
Q3/13 Q3/14
2.8
Q3/15
9.1
Outlook for 2015 unchanged
23 October 2015 Amer Sports Interim Report Presentation7
• In 2015, Amer Sports net sales in local currencies is expected to increase
and EBIT margin excluding non-recurring items to improve from 2014,
despite challenging market conditions.
• The company will continue to focus on apparel and footwear growth,
consumer-driven product and marketing innovation, commercial
expansion and operational excellence.
Accelerating toward 2020
• New 5-year strategic glidepath in place
• 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+)
• Investment and capability building on-going
• Attractive returns behind profitable growth and ongoing company
transformation
23 October 2015 Amer Sports Interim Report Presentation8
Prioritized, sequenced program continues
Amer Sports CMD 20159
• Sustainable Growth Model
• Integration
• Acquisition readiness
• On-going renewal and
acceleration
Net sales ≥3.5 BEUR,
improving EBIT-%
Continuous portfolio
transformation toward:
• Faster growth
• Higher profitability
• Asset efficiency
~2010 – 2013 ~2014 – 2015 ~2016 – 2020
• New strategy
• Transformation from
Hardgoods to ”Hybrid”
• Drive organic growth
• Operational excellence
Net sales
1.5 BEUR,
EBIT-% 4%
Net sales 2+ BEUR,
EBIT-% 7%
Net sales ~2.5 BEUR,
EBIT-% toward 10%
APPENDIX
Key figures
23 October 2015 Amer Sports Interim Report Presentation12
EUR million 7-9/15 7-9/14 1-9/15 1-9/14 2014
Net sales 713.7 645.8 1,750.7 1,523.4 2,228.7
Gross profit 335.2 288.5 802.9 675.8 979.0
Gross profit, % of net sales 47.0 44.7 45.9 44.4 43.9
EBIT excluding non-recurring items 103.5 87.6 128.1 90.6 168.3
EBIT % excluding non-recurring items 14.5 13.6 7.3 5.9 7.6
Non-recurring items - -18.3 -8.0 -19.5 -54.2
EBIT 103.5 69.3 120.1 71.1 114.1
EBIT % 14.5 10.7 6.9 4.7 5.1
Free cash flow -92.2 -84.8 -37.7 -79.3 53.5
Net sales and EBIT breakdown
23 October 2015 Amer Sports Interim Report Presentation13
* Excluding non-recurring items
NET
SALES
(MEUR)
Q3/
2015
Q2/
2015
Q1/
2015 2014
Q4/
2014
Q3/
2014
Q2/
2014
Q1/
2014 2013
Q4/
2013
Q3/
2013
Q2/
2013
Q1/
2013
Outdoor 476.6 209.7 341.9 1,371.2 456.7 452.2 174.8 287.5 1,289.5 433.7 420.6 168.7 266.5
Ball Sports 147.8 169.4 164.1 536.7 136.9 112.9 136.2 150.7 551.0 126.1 116.7 144.2 164.0
Fitness 89.3 82.0 69.9 320.8 111.7 80.7 65.1 63.3 296.0 97.6 71.6 64.3 62.5
Total 713.7 461.1 575.9 2,228.7 705.3 645.8 376.1 501.5 2,136.5 657.4 608.9 377.2 493.0
EBIT
(MEUR)
Q3/
2015
Q2/
2015*
Q1/
2015* 2014*
Q4/
2014*
Q3/
2014*
Q2/
2014*
Q1/
2014 2013
Q4/
2013
Q3/
2013
Q2/
2013
Q1/
2013
Outdoor 92.9 -18.7 21.4 125.6 55.0 83.1 -22.0 9.5 127.0 52.5 87.4 -27.1 14.2
Ball Sports 8.8 11.3 18.3 35.9 12.5 3.9 6.3 13.2 27.0 3.9 -2.1 7.8 17.4
Fitness 9.1 5.1 1.3 29.7 14.9 7.3 4.1 3.4 24.4 14.3 6.2 4.3 -0.4
Headquarters -7.3 -6.7 -7.4 -22.9 -4.7 -6.7 -6.0 -5.5 -23.5 -6.0 -9.0 -3.7 -4.8
Total 103.5 -9.0 33.6 168.3 77.7 87.6 -17.6 20.6 154.9 64.7 82.5 -18.7 26.4
Net sales by region
23 October 2015 Amer Sports Interim Report Presentation14
MEUR
Q3/
2015
Q2/
2015
Q1/
2015 2014
Q4/
2014
Q3/
2014
Q2/
2014
Q1/
2014 2013
Q4/
2013
Q3/
2013
Q2/
2013
Q1/
2013
EMEA 319.3 168.0 270.6 1,064.0 336.9 321.9 156.1 249.1 1,025.2 338.6 301.6 144.5 240.5
Americas 302.0 224.7 230.2 874.3 270.1 249.0 166.0 189.2 839.4 229.3 237.2 177.6 195.3
Asia
Pacific92.4 68.4 75.1 290.4 98.3 74.9 54.0 63.2 271.9 89.5 70.1 55.1 57.2
Total 713.7 461.1 575.9 2,228.7 705.3 645.8 376.1 501.5 2,136.5 657.4 608.9 377.2 493.0
Sales development by region Q3/2015
23 October 2015 Amer Sports Interim Report Presentation15
Outdoor Fitness Total
EMEA Americas APAC
Ball sports
EMEA Americas APAC Total
MEUR Ch, %* MEUR Ch, %* MEUR Ch, %* MEUR Ch, %*
Outdoor 271.3 -3 145.2 10 60.1 17 476.6 3
Ball Sports 25.0 17 105.3 18 17.5 4 147.8 16
Fitness 23.0 16 51.5 -15 14.8 26 89.3 -3
Total 319.3 0 302.0 7 92.4 15 713.7 5
* Change in local currencies
476.6 147.8 89.3 713.7
13%57%
68%
30%
12%17%
71%
16%26%
58%
10%46%
44%
Free cash flow
23 October 2015 Amer Sports Interim Report Presentation16
-150
-100
-50
0
50
100
150
Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15
Free cash flow = Cash flow from operating activities - net capital expenditures (total capital expenditure less
proceeds from sale of assets)
Balance sheet
23 October 2015 Amer Sports Interim Report Presentation17
MEUR
September 30,
2015
September 30,
2014
Goodwill and other intangible non-current assets 599.5 499.2
Tangible non-current assets and other non-current assets 320.4 291.3
Inventories and work in progress 511.5 473.8
Receivables 775.4 684.9
Cash and cash equivalents 216.8 109.6
Shareholders’ equity 886.4 807.0
Interest bearing liabilities 833.4 640.0
- Long-term 631.4 361.3
- Current 202.0 278.7
Other liabilities 703.8 611.8
Total 2,423.6 2,058.8
Next refinancing needs in H1 2016
23 October 2015 Amer Sports Interim Report Presentation18
• Cash EUR 216.8 million and
unused committed facilities
EUR 150 million (Sep 30, 2015)
• Commercial paper program
EUR 500 million, of which
EUR 49.9 million issued
• Scheduled repayments of
long-term loans in 2016
EUR 153.2 million
• Average interest rate of loan
portfolio 2.6% (Dec 31, 2014
3.5%)
0,0
50,0
100,0
150,0
200,0
250,0
300,0
350,0
400,0
450,0
500,0
Bonds
Bank loans
CommercialPapers
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
23 October 2015 Amer Sports Interim Report Presentation19
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
23 October 2015 Amer Sports Interim Report Presentation20