AMER SPORTS 2012 RECORD SALES, STABLE PROFIT, BIG FOCUS ON FUTURE - - PowerPoint PPT Presentation

AMER SPORTS 2012 – RECORD SALES, STABLE PROFIT, BIG FOCUS ON FUTURE IMPROVEMENT

January 31, 2013, Heikki Takala, President and CEO

Amer Sports Results Presentation

1) October-December 2012 2) Full year 2012 3) Outlook 4) We continue moving

Content

2

Q4 AND FULL YEAR 2012

Amer Sports Results Presentation

• Net sales EUR 618.5 million (556.9), +8% in local currencies
• Sports Instruments +25%, Footwear +17%, Fitness +17%, Ball Sports +13%,

Apparel +12%, Cycling +7%

• Winter Sports Equipment sales -3%. In-season orders increased vs. Q4/2011.
• EMEA +10%, Americas +5%, APAC +12%
• Gross margin 41.9% (42.4%): inventory sell-out and production variances

especially in Winter Sports Equipment

• EBIT excluding NRI EUR 46.5 million (46.3), impacted by the lower gross margin
• Restructuring: expected savings as of end 2014 EUR 20 million, one-time cost

EUR 24.8 million

• Net cash flow EUR 96.7 million (49.0), driven by decreased working capital.

Broad-based growth in Q4, Winter Sports Equipment challenge continued

In local currencies

4

Amer Sports Results Presentation

• Record net sales EUR 2,064.0 million (1,880.8), +5.1% in local currencies
• Apparel +23%, Sports Instruments +12%, Fitness +10%, Cycling +5%, Ball

Sports +5% (Racquet Sports +8%)

• Footwear +7%, despite slow-down in Europe
• Winter Sports Equipment -8%, mid-single digit profitability safeguarded despite

the weather

• EMEA +4%, Americas +5%, APAC +14%. Russia +16%, China +44%, Latin

America +13%, accounting for 8% of the Group’s net sales (7%).

• Gross margin 43.6% (43.5%)
• EBIT excluding NRI EUR 136.5 million (135.5), EBIT margin 6.6 (7.2)
• Mitigated poor winter, strategic OPEX investments continued
• Dividend proposal EUR 0.35 per share (0.33)

2012: a good but highly challenging year

5

In local currencies

Amer Sports Results Presentation

Cash flow improved significantly in 2012

EUR million 2012 2011 Ch % Ch %* Net sales 2,064.0 1,880.8 10 5 Gross profit 900.6 817.4 10 6 Gross profit, % of net sales 43.6 43.5 EBIT excluding non-recurring items 136.5 135.5 1 EBIT % excluding non-recurring items 6.6 7.2 Non-recurring items

• 24.8
• EBIT total

111.7 135.5

• 18

Net cash flow after investing activities 71.8

• 21.4

*) In local currencies

6

Amer Sports Results Presentation

EBIT development 2012, EUR million

7

53.1 5.1 43.6

20 40 60 80 100 120 140 160 180 200

FY 2012

136.5

FX

5.4

OPEX Margin/ Mix Growth FY 2011

135.5 4.0 6.7

20 40 60 80 100 120 140 160 180 200

FY 2012

136.5

HQ Fitness Ball Sports

3.0

W&O

4.7

FY 2011

135.5

Amer Sports Results Presentation

• Operating expenses increased by EUR 53 million in local currencies

– Investments into future growth with focus on softgoods, sales coverage, emerging markets and business to consumer – Strong building blocks in place for future improvement – Cost base and complexity remain too high. Restructuring program being implemented, headcount impact ~250 by end 2014.

Continuous investments into future growth

EUR million 2012 2011 2010 Top line driven OPEX increase 10.3 19.1 9.2 Investment OPEX increase 31.9 26.1 15.7 Maintenance OPEX increase 10.9 3.7 16.2 Total increase in OPEX 53.1 48.9 41.1

In local currencies

8

Amer Sports Results Presentation

• Hybrid bond redemption impact: equity ratio down 3%-pts,

gearing up 12%-pts.

Balance sheet remained healthy

EUR million

• Dec. 31, 2012
• Dec. 31, 2011

Net debt 434.3 391.6 Shareholders’ equity 758.9 829.4 Capital employed 1,193.2 1,221.0 Working capital 440.7 472.7 Net debt / EBITDA, excluding non-recurring items 2.5 2.3 Gearing, % 57 47 Equity ratio, % 40.7 45.6

9

Amer Sports Results Presentation

• Cash EUR 142.5 million

and unused committed facilities EUR 240 million (December 31, 2012)

• Commercial paper

program EUR 500 million, of which EUR 151.6 million issued

• Scheduled long-term

payments in 2013 EUR 42.3 million and in 2014 EUR 63.5 million.

• Average interest rate of

loan portfolio 3.6% (3.6)

No significant mid-term refinancing needs

,0m 25,0m 50,0m 75,0m 100,0m 125,0m 150,0m 175,0m 200,0m 225,0m 2013 2014 2015 2016

Pension Loan Bonds Bank loans Commercial Papers Other

10

Amer Sports Results Presentation

Net sales +4%

• Winter Sports Equipment -8%.
• Footwear +7%. Sales in Russia, Americas and Asia Pacific continued to increase.
• Apparel +23%. Both Salomon and Arc’teryx grew.
• Cycling +5%. Softgoods +18%.
• Sports Instruments +12% driven by stronger distribution and the Suunto GPS watch.

EBIT excluding non-recurring items EUR 113.8 million (118.5)

• Strategic OPEX investments continued.

Winter and Outdoor in 2012 (2011)

11

50 100 150 200 250 300 350 400 450

Net sales

• 40
• 20

20 40 60 80 100

EBIT excluding non-recurring items

MEUR MEUR

416.5 45.0 61.2 329.2 42.5 Q4/10 Q4/11 Q4/09 Q4/10 Q4/09 Q4/11 Q4/12 375.0 Q4/12 402.8 41.7

Amer Sports Results Presentation

Net sales +5%

• Individual Ball Sports +7%. Tennis rackets +14%, tennis balls +6%.
• Team Sports +3%. Growth throughout the Team Sports business with the exception of

baseball bats.

EBIT excluding non-recurring items EUR 28.0 million (25.0)

• The improvement was driven by the sales growth

Ball Sports 2012 (2011)

12

20 40 60 80 100 120 140 160 180

Net sales

• 5

5 10 15 20 25

EBIT exluding non-recurring items

MEUR MEUR

94.7 107.3

• 2.7

2.2 Q4/09 Q4/10 Q4/09 Q4/10 Q4/11 109.0 Q4/11

• 0.7

Q4/12 Q4/12 127.7 1.0

Amer Sports Results Presentation

Net sales +10%

• EMEA +28%, Asia Pacific +21% and the Americas +3%

EBIT excluding non-recurring items EUR 17.0 million (10.3)

• The increase was due to increased sales volumes

Fitness 2012 (2011)

13

20 40 60 80 100

Net sales

• 6
• 4
• 2

2 4 6 8 10

EBIT excluding non-recurring items

MEUR MEUR

59.6 58.9 4.3 4.5 4.5 Q4/09 Q4/10 Q4/09 Q4/10 Q4/11 72.9 Q4/11 Q4/12 Q4/12 88.0 7.9

OUTLOOK

Amer Sports Results Presentation

• Amer Sports expects the trading environment to remain

challenging in 2013.

• The company will continue to focus on softgoods growth,

consumer-driven product and marketing innovation, commercial expansion and operational excellence.

• In 2013, Amer Sports’ net sales in local currencies and EBIT

excluding non-recurring items are expected to increase from 2012.

Outlook for 2013

15

WE CONTINUE MOVING

Amer Sports Results Presentation

• All businesses improving according to their portfolio role, further scale

and synergy improvement plans identified

• Softgoods sales EUR +600 million, accounting for 30% of the Group’s

net sales

• Our consumer marketing and product innovation pipeline increasingly

focused on “surrounding the consumer” with head-to-toe solutions

• Continuous improvement in Go to Market. Emerging markets now 8%
• f the company (2010: 5%). Own retail growing: 201 retail stores, 23

ecommerce stores.

• All operations managed with scorecards and Key Performance

Indicators, on-going improvements in customer service, sourcing, product quality and working capital

We continue to make solid progress in

• ur strategic priorities

17

Amer Sports Results Presentation

Long-term financial targets - status

Target Dec 31, 2009 Dec 31, 2010 Dec 31, 2011 Dec 31, 2012

Growth Delivering organic, currency-neutral annual growth of 5%

• 4%

8% 9% 5% Profitability EBIT of at least 10% of net sales 3.2% 6.2% 7.2% 6.6% Cash flow Annual free cash flow equal to net profit FCF of Net Profit 4.5 FCF of Net Profit 0.7 FCF of Net Profit negative FCF of Net Profit 0.9 Balance sheet structure Year-end Net Debt / EBITDA ratio of 3 or less 3.6 2.2 2.3 2.5

18

Amer Sports Results Presentation

Clarify future direction & deliver the year Profitability, growth momentum Build critical capabilities, allocate resources and reignite growth

• Clarify priorities, set

direction

• Continue to drive profit

recovery, deliver the year

• Continue the work on
• perational 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-

We stay the course

19

APPENDIX

Amer Sports Results Presentation

Net sales and EBIT breakdown (MEUR)

NET SALES 2012 Q4/ 2012 Q3/ 2012 Q2/ 2012 Q1/ 2012 2011 Q4/ 2011 Q3/ 2011 Q2/ 2011 Q1/ 2011 Winter and Outdoor 1,221.2 402.8 411.0 150.9 256.5 1,137.6 375.0 395.7 133.4 233.5 Ball Sports 569.7 127.7 121.9 146.5 173.6 511.0 109.0 106.7 136.3 159.0 Fitness 273.1 88.0 69.0 56.4 59.7 232.2 72.9 56.8 45.9 56.6 Total 2,064.0 618.5 601.9 353.8 489.8 1,880.8 556.9 559.2 315.6 449.1 EBIT 2012* Q4/ 2012* Q3/ 2012 Q2/ 2012 Q1/ 2012 2011 Q4/ 2011 Q3/ 2011 Q2/ 2011 Q1/ 2011 Winter and Outdoor 113.8 41.7 86.8

• 25.4

10.7 118.5 45.0 79.3

• 15.1

9.3 Ball Sports 28.0 1.0

• 2.6

9.7 19.9 25.0

• 0.7
• 1.1

9.1 17.7 Fitness 17.0 7.9 4.2 1.0 3.9 10.3 4.5 2.8

• 0.3

3.3 Headquarters

• 22.3
• 4.1
• 7.6
• 5.1
• 5.5
• 18.3
• 2.5
• 6.6
• 4.6
• 4.6

Total 136.5 46.5 80.8

• 19.8

29.0 135.5 46.3 74.4

• 10.9

25.7

22

* Excluding non-recurring items

Amer Sports Results Presentation

Business area net sales in Q4

MEUR Q4/ 2012 Q4/ 2011 Ch % Ch %* 2012 2011 Ch % Ch %* Winter Sports Equipment 203.3 205.0

• 1
• 3

425.0 448.4

• 5
• 8

Footwear 60.7 51.0 19 17 314.4 287.7 9 7 Apparel 77.0 65.8 17 12 248.6 191.6 30 23 Cycling 31.8 29.5 8 7 129.0 120.5 7 5 Sports Instruments 30.1 23.7 27 25 104.2 89.4 17 12 Individual Ball Sports 61.8 51.9 19 16 318.8 283.0 13 7 Team Sports 65.9 57.1 15 11 250.9 228.0 10 3 Fitness 88.0 72.9 21 17 273.1 232.2 18 10 Total 618.5 556.9 11 8 2,064.0 1,880.8 10 5

23

* In local currencies

Amer Sports Results Presentation

Net sales by region (MEUR)

MEUR 2012 Q4/ 2012 Q3/ 2012 Q2/ 2012 Q1/ 2012 2011 Q4/ 2011 Q3/ 2011 Q2/ 2011 Q1/ 2011 EMEA 962.7 305.3 297.6 133.1 226.7 917.6 273.8 300.0 129.7 214.1 Americas 834.1 224.8 236.2 167.4 205.7 742.1 205.4 203.8 146.5 186.4 Asia Pacific 267.2 88.4 68.1 53.3 57.4 221.1 77.7 55.4 39.4 48.6 Total 2,064.0 618.5 601.9 353.8 489.8 1,880.8 556.9 559.2 315.6 449.1

24

Amer Sports Results Presentation

24 % 63 % 13 %

Sales development by region in 2012

Winter and Outdoor Ball Sports Fitness Total 1,221.2

65 % 21 % 14 %

569.7

64 % 26 % 10 %

273.1

40 % 47 % 13 %

2,064.0

Americas EMEA Asia Pacific

25

EMEA Americas Asia Pacific Total MEUR Ch, %* MEUR Ch, %* MEUR Ch, %* MEUR Ch, %* Winter and Outdoor 774.4 2 289.5 6 157.3 12 1,221.2 4 Ball Sports 118.0 2 370.1 4 81.6 13 569.7 5 Fitness 70.3 28 174.5 3 28.3 21 273.1 10 Total 962.7 4 834.1 5 267.2 14 2,064.0 5

* In local currencies

Amer Sports Results Presentation

Balance sheet

MEUR

• Dec. 31, 2012
• Dec. 31, 2011

Goodwill and other intangible non-current assets 500.5 510.2 Tangible non-current assets and other non-current assets 269.3 257.4 Inventories and work in progress 336.7 359.7 Receivables 613.5 611.9 Cash and cash equivalents 142.5 78.8 Shareholders’ equity 758.9 829.4* Interest bearing liabilities 576.8 470.4

• Long-term

378.2 251.4

• Current

198.6 219.0 Other liabilities 526.8 518.2 Total 1,862.5 1,818.0

* Including hybrid bond

26

Amer Sports Results Presentation

• 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

27

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.