challenging market October 20, 2016 Heikki Takala, President and CEO - - PowerPoint PPT Presentation

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challenging market October 20, 2016 Heikki Takala, President and CEO - - PowerPoint PPT Presentation

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Amer Sports Q3/2016 Solid improvement in a challenging market October 20, 2016 Heikki Takala, President and CEO Organic growth 4%, driven by strategic acceleration priorities Net sales EUR 736.8 million (713.7), +4%*, also organic growth

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SLIDE 1

Amer Sports Q3/2016

Solid improvement in a challenging market

October 20, 2016 – Heikki Takala, President and CEO

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SLIDE 2

Organic growth 4%, driven by strategic acceleration priorities

  • Net sales EUR 736.8 million (713.7), +4%*, also organic growth 4%

– Apparel +11%, Business to Consumer +28%, China +21%, Sports Instruments +23%. – Ball Sports flat, Team Sports +9%. Fitness -4%, pipeline impact yet to come. – EMEA +7%, Americas +1%, APAC +3%.

  • Gross margin 48.0% (47.0%)
  • EBIT excl. IAC EUR 106.5 million (103.5)
  • Free cash flow EUR -66.9 million (-92.2)

20 October 2016 Amer Sports Interim Report Presentation 2

*In local currencies

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SLIDE 3

Investment into acceleration continues

  • Digital acceleration: investment into marketing automatization

and cloud-based CRM platform

  • New stores in Q3: US (New York, Chicago), China (Shanghai),

Mexico

  • More to come in Q4: US, China, Italy
  • Continuous e-commerce expansion: Arc’teryx & Suunto Japan,

Salomon & Suunto Canada, Mavic US

  • Distribution capacity expansion continued
  • Significant investment into future product pipeline and learning:

Wilson X, Suunto future variants, Precor expansion…

20 October 2016 Amer Sports Interim Report Presentation 3

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SLIDE 4

New Arc’teryx stores in the US and Canada

20 October 2016 Amer Sports Interim Report Presentation 4

Toronto Yorkdale Veilance Pop-up store, New York Chicago

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SLIDE 5

Free Cash Flow in Q3: EUR 25 million better than Q3/15

  • Free Cash Flow always negative in Q3 due to seasonality. Strict Working

Capital management was a main driver of better cash flow than year ago.

20 October 2016 Amer Sports Interim Report Presentation 5

EURm

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SLIDE 6

Balance sheet in a nutshell

20 October 2016 Amer Sports Interim Report Presentation 6

EUR million

  • Sept. 30, 2016
  • Sept. 30, 2015
  • Dec. 31, 2015

Net debt 666.9 616.6 460.3 Shareholders’ equity 913.7 886.4 949.6 Capital employed 1,580.6 1,503.0 1,409.9 Working capital 568.8 637.1 462.5 Capital turnover, LTM 1.78X 1.81X 1.90X ROCE, LTM % 15.2 15.2 16.1 Net debt/equity 0.73 0.70 0.48 Equity ratio % 35.3 36.6 37.2

LTM = Last Twelve Months

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SLIDE 7

20 October 2016 Amer Sports Interim Report Presentation 7

  • 40
  • 20

20 40 60 80 100 120

EBIT excluding items affecting comparability

100 200 300 400 500 600

Net sales

Outdoor Q3/2016 (Q3/2015)

20 October 2016 7

MEUR MEUR

86.8 Q3/12 Q3/12 Q3/13 411.0 Q3/13 87.4 Q3/14 420.6 Q3/14

Net sales EUR 505.7 million, +6%*

  • Apparel +8%, Footwear +4%, Sports Instruments +23%
  • Cycling +9%. Acquisition of ENVE Composites LLC.
  • Winter Sports Equipment 3%. Deliveries peaked already in Q3.

EBIT excl. IAC EUR 105.5 million (92.9)

Q3/15 433.7 Q3/15 83.1 Q3/16 476.6 Q3/16 92.9 505.7 105.5

*In local currencies

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SLIDE 8
  • 5

5 10 15 20 25

EBIT excluding items affecting comparability

Ball Sports Q3/2016 (Q3/2015)

Net sales EUR 147.0 million, at previous year’s level*

  • Strong Team Sports sales growth driven especially by Baseball. Challenging

market conditions in Individual Ball Sports.

  • Investment into Wilson X, B2C, new Go to Market model.

EBIT excl. IAC EUR 5.3 million (8.8)

20 October 2016 Amer Sports Interim Report Presentation 8 20 October 2016 8

MEUR

Q3/12 Q3/13 Q3/14 5.3 Q3/15

  • 2.1
  • 2,6

3.9 Q3/16

20 40 60 80 100 120 140 160 180 200

Net sales

MEUR

Q3/12 116.7 Q3/13 Q3/14 112.9 121.9 Q3/15 Q3/16 147.8 8.8

*In local currencies

147.0

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SLIDE 9

Fitness Q3/2016 (Q3/2015)

Net sales EUR 84.1 million, -4%*

  • New product pipeline all time high. Production of the new ranges started,

topline impact expected in Q4 and increasingly in H1 2017. EBIT excl. IAC EUR 5.4 million (9.1)

20 October 2016 Amer Sports Interim Report Presentation 9 20 October 2016 9

20 40 60 80 100 120 140

Net sales

MEUR

Q3/12 Q3/12 69.0 Q3/13 Q3/13 Q3/14 Q3/15 71.6 Q3/14 80.7 Q3/15 Q3/16 89.3 Q3/16

  • 5

5 10 15 20

EBIT excluding items affecting comparability

4.2 5.4 6.2 7.3 9.1 84.1

*In local currencies

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SLIDE 10

OUTLOOK

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SLIDE 11

Outlook for 2016

20 October 2016 Amer Sports Interim Report Presentation 11

  • In 2016, Amer Sports net sales in local currencies are expected

to increase and EBIT margin excluding items affecting comparability to improve from 2015, despite challenging market conditions.

  • The company will focus on growing the core business and

accelerating in five prioritized areas: Apparel and Footwear, US, China, Business to Consumer, as well as digitally connected devices and services.

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SLIDE 12

Prioritized, sequenced program continues

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SLIDE 13

Transformation and acceleration toward 2020

13

Net sales ≥3.5 BEUR, improving EBIT-%

~2010 – 2013 ~2014 – 2015 ~2016 – 2020 Turnaround

Net sales 1.5 BEUR, EBIT-% 4% Net sales 2+ BEUR, EBIT-% 7% Net sales ~2.5 BEUR, EBIT-% toward 10%

Amer Sports Interim Report Presentation

Sustainable Growth Model and acquisition readiness Acceleration and scaling up, transformation of company profile continues

20 October 2016

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SLIDE 14
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SLIDE 15

APPENDIX

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SLIDE 16

Net sales and EBIT breakdown

20 October 2016 16

* Excl. IAC NET SALES (MEUR) Q3/ 2016 Q2/ 2016 Q1/ 2016 2015 Q4/ 2015 Q3/ 2015 Q2/ 2015 Q1/ 2015 2014 Q4/ 2014 Q3/ 2014 Q2/ 2014 Q1/ 2014 Outdoor 505.7 231.0 374.4 1,530.1 501.9 476.6 209.7 341.9 1,371.2 456.7 452.2 174.8 287.5 Ball Sports 147.0 165.5 186.7 647.0 165.7 147.8 169.4 164.1 536.7 136.9 112.9 136.2 150.7 Fitness 84.1 80.9 74.4 357.3 116.1 89.3 82.0 69.9 320.8 111.7 80.7 65.1 63.3 Total 736.8 477.4 635.5 2,534.4 783.7 713.7 461.1 575.9 2,228.7 705.3 645.8 376.1 501.5 EBIT (MEUR) Q3/ 2016* Q2/ 2016 Q1/ 2016* 2015* Q4/ 2015 Q3/ 2015 Q2/ 2015* Q1/ 2015* 2014* Q4/ 2014* Q3/ 2014* Q2/ 2014* Q1/ 2014 Outdoor 105.5

  • 16.0

37.7 161.2 65.6 92.9

  • 18.7

21.4 125.6 55.0 83.1

  • 22.0

9.5 Ball Sports 5.3 7.7 19.0 46.6 8.2 8.8 11.3 18.3 35.9 12.5 3.9 6.3 13.2 Fitness 5.4 4.5 0.3 31.2 15.7 9.1 5.1 1.3 29.7 14.9 7.3 4.1 3.4 Headquarters

  • 9.7
  • 8.3
  • 11.0
  • 26.9
  • 5.5
  • 7.3
  • 6.7
  • 7.4
  • 22.9
  • 4.7
  • 6.7
  • 6.0
  • 5.5

Total 106.5

  • 12.1

46.0 212.1 84.0 103.5

  • 9.0

33.6 168.3 77.7 87.6

  • 17.6

20.6

Amer Sports Interim Report Presentation

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SLIDE 17

Business area net sales

20 October 2016 Amer Sports Interim Report Presentation 17

Q3/2016 Q3/2015 Ch % Ch %* 2015 Footwear 144.6 141.2 2 4 461.2 Apparel 146.3 135.4 8 8 387.2 Winter Sports Equipment 140.5 136.2 3 3 400.2 Cycling 34.3 31.2 10 9 138.5 Sports Instruments 40.0 32.6 23 23 143.0 Individual Ball Sports 63.2 70.4

  • 10
  • 10

315.4 Team Sports 83.8 77.4 8 9 331.6 Fitness 84.1 89.3

  • 6
  • 4

357.3 Total 736.8 713.7 3 4 2,534.4

*Change in local currencies

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SLIDE 18

Net sales by region

20 October 2016 18

MEUR Q3/ 2016 Q2/ 2016 Q1/ 2016 2015 Q4/ 2015 Q3/ 2015 Q2/ 2015 Q1/ 2015 2014 Q4/ 2014 Q3/ 2014 Q2/ 2014 Q1/ 2014 EMEA 334.7 174.8 278.9 1,114.7 356.8 319.3 168.0 270.6 1,064.0 336.9 321.9 156.1 249.1 Americas 304.6 229.8 267.1 1,070.1 313.2 302.0 224.7 230.2 874.3 270.1 249.0 166.0 189.2 Asia Pacific 97.5 72.8 89.5 349.6 113.7 92.4 68.4 75.1 290.4 98.3 74.9 54.0 63.2 Total 736.8 477.4 635.5 2,534.4 783.7 713.7 461.1 575.9 2,228.7 705.3 645.8 376.1 501.5

Amer Sports Interim Report Presentation

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SLIDE 19

Outdoor

Sales development by region in Q3/2016

20 October 2016 Amer Sports Interim Report Presentation 19

Fitness Total

EMEA Americas APAC

Ball Sports

EMEA Americas APAC Total MEUR Ch, %* MEUR Ch, %* MEUR Ch, %* MEUR Ch, %* Outdoor 291.7 9 149.4 3 64.6 4 505.7 6 Ball Sports 22.5

  • 6

106.7 2 17.8

  • 4

147.0 Fitness 20.5

  • 4

48.5

  • 6

15.1 84.1

  • 4

Total 334.7 7 304.6 1 97.5 3 736.8 4

* Change in local currencies

505.7 147.0 84.1 736.8 13% 68% 12% 15% 73% 18% 24% 58% 13% 46% 41% 58% 29%

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SLIDE 20

Balance sheet

20 October 2016 Amer Sports Interim Report Presentation 20

MEUR September 30, 2016 September 30, 2015 Goodwill and other intangible non-current assets 669.6 599.5 Tangible non-current assets and other non-current assets 342.5 320.4 Inventories and work in progress 558.0 511.5 Receivables 772.0 775.4 Cash and cash equivalents 244.9 216.8 Shareholders’ equity 913.7 886.4 Interest bearing liabilities 911.8 833.4

  • Long-term

834.9 631.4

  • Current

76.9 202.0 Other liabilities 761.5 703.8 Total 2,587.0 2,423.6

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SLIDE 21

Refinancing needs well covered

20 October 2016 Amer Sports Interim Report Presentation 21

  • Cash EUR 244.9 million and

unused committed facilities EUR 150 million (Sep 30, 2016)

  • Commercial paper program in

size of EUR 500 million; out

  • f which EUR 74.9 million

utilized

  • No scheduled repayments of

long-term loans in 2016 or in 2017.

  • Average interest rate of loan

portfolio 2.0% (Sep 30, 2015 2.6%)

0,0 50,0 100,0 150,0 200,0 250,0 300,0 350,0 400,0 Bonds Bank loans Commercial Papers Other

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SLIDE 22

Hedged flows, next 12 months

Amer Sports Interim Report Presentation 22

Main FX pairs Next 12mth flow (MEUR)

  • f which

hedged Spot (@19.10.16) Hedge FX ’16 Hedge FX’17 USD purchases against EUR

  • 371

97% 1.10 1.15 1.14 USD sales against EUR +71 100% 1.10 1.13 1.12 GBP sales against EUR +91 100% 0.89 0.74 0.78 CHF sales against EUR +55 100% 1.09 1.05 1.08 USD purchases against CAD

  • 107

100% 1.31 1.31 1.32

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SLIDE 23

Impact of new ESMA guidelines

New ESMA (European Securities and Markets Authority) guidelines

  • n Alternative Performance Measures (APMs) are effective for the

financial year 2016. Amer Sports presents APMs to reflect the underlying business performance and to enhance comparability between financial periods. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS. As of Q1 2016, Amer Sports relabels the previously referenced "excluding non-recurring items" with "excluding items affecting comparability” (IAC). Operating segments’ EBIT is reported excluding

  • IAC. Items affecting comparability and APMs used by Amer Sports

are defined in note 10 of the Q2 interim report.

20 October 2016 Amer Sports Interim Report Presentation 23

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SLIDE 24

Changes to Amer Sports Insider Register and Disclosure Policy as of July 3, 2016

Notification and publication of transactions of managers and their closely associated persons

  • The following persons have been deemed to discharge managerial

responsibilities in Amer Sports:

– Members and secretary of the Board of Directors – CEO – Members of the Executive Board

20 October 2016 Amer Sports Interim Report Presentation 24

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SLIDE 25

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

20 October 2016 25 Amer Sports Interim Report Presentation

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SLIDE 26

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.

www.amersports.com

20 October 2016 26 Amer Sports Interim Report Presentation

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SLIDE 27