Amer Sports Q2/2016 Acceleration and transformation...

Amer Sports Q2/2016

Acceleration and transformation continue, investments deliveringJuly 28, 2016 – Heikki Takala, President and CEO

Growth and improvement despite headwinds

• Net sales EUR 477.4 million (461.1), +6%*

– Growth driven by Footwear (+15%), Apparel (+24%), and Cycling

(+20%)

– EMEA +7%, Americas +6%, APAC +7% (China +34%)

– B2C +31%, e-commerce +49%

• Gross margin 44.7% (44.1%)

• EBIT EUR -12.1 million (-9.0 excl. IAC), acceleration investments

continued

• Net sales and profitability adversely impacted by the US customer

bankruptcies

• Free cash flow EUR -54.3 million (11.5) due to seasonal fluctuation

• Good momentum in H1

28 July 2016 Amer Sports Interim Report Presentation2

*In local currencies

Significant OPEX investments in H1 to support acceleration

• Digital acceleration, building group-wide consumer database

platform

• Own retail, expecially Arc’teryx:

– Accelerated store openings: new stores in the US (New York and

Chicago), China, Japan, and Austria

– More stores opening soon in China, US (New York and Chicago),

Canada (Toronto), and Italy

• Continuous e-commerce expansion, Canada and Japan going live

• Significant distribution center expansion both in the US and

Europe

• Moving Arc’teryx into a larger production facility in Canada


New Arc’teryx stores in Japan, China and the US


New York SohoKobe, Japan

Yokohama, Japan Shanghai, China

Q2 free cash flow negative, however not different from historical pattern

• Quarterly shifts in repatriation of receivables (40 MEUR) and Asian

vendor payments (20 MEUR)

• Inventory building for H2, 100% of the inventory is current


-54.4

32.8

172.5

-92.2

11.5

43.0

132.8

-84.8

-38.7

44.2

143.9

-119.3

-50.0

67.9

-150

-100

-50

0

50

100

150

200

Q1-16Q4-15Q3-15Q2-15Q1-15Q4-14Q3-14 Q2-16Q2-14Q1-14Q4-13Q3-13Q2-13Q1-13

Balance sheet in a nutshell


EUR million June 30, 2016 June 30, 2015 Dec. 31, 2015

Net debt 599.9 546.3 460.3

Shareholders’ equity 858.2 804.4 949.6

Capital employed 1,458.1 1,350.7 1,409.9

Working capital 456.6 421.3 462.5

Capital turnover, LTM 1.83X 1.85X 1.90X

ROCE, LTM % 15.6 14.7 15.9

Net debt/equity 0.70 0.68 0.48

Equity ratio % 35.8 37.7 37.2

LTM = Last Twelve Months


-40

-20

0

20

40

60

80

100

EBIT excluding items affecting comparability

0

100

200

300

400

500

600

Net sales

Outdoor Q2/2016 (Q2/2015)

28 July 20167

MEURMEUR

-25.4

Q2/12 Q2/12Q2/13

150.9

Q2/13

-27.1

Q2/14

168.7

Q2/14

Net sales EUR 231.0 million, +13%*

• Footwear +15%, Apparel +24%

• Cycling +20%, supported by ENVE

• Sports Instruments -6%, prepared for a big launch in Q3

• Winter Sports Equipment pre-orders -3%, a satisfactory result following several mild

winters

• Agile operating model protects gross margin and cash flow, strong innovation

pipeline secures consumer momentum

EBIT EUR -16.0 million (-18.7 excl. IAC)

Q2/15

174.8

Q2/15

-22.0

Q2/16

209.7

Q2/16

-18.7231.0

-16.0


Acquisition of ENVE

• Carbon acceleration and global distribution expansion underway


-5

0

5

10

15

20

25


Ball Sports Q2/2016 (Q2/2015)

Net sales EUR 165.5 million, at previous year’s level*

• Sales adversely impacted by the US customer bankruptcies and timing

difference in tennis product launches

EBIT EUR 7.7 million (11.3 excl. IAC)

• Order book is solid and indicates another year of Ball Sports improvement

behind new business model

28 July 2016 Amer Sports Interim Report Presentation9 28 July 20169

MEUR

Q2/12 Q2/13 Q2/14

7.7

Q2/15

7.89.7

6.3

Q2/160

20

40

60

80

100

120

140

160

180

200

Net salesMEUR

Q2/12

144.2

Q2/13 Q2/14

136.2146.5

Q2/15 Q2/16

169.4

11.3


165.5

Fitness Q2/2016 (Q2/2015)

Net sales EUR 80.9 million, +1%*

• New product and service program (Spinning, Queenax, new cardio…) rolling

out, reaching full speed toward the end of the year

EBIT EUR 4.5 million (5.1 excl. IAC )

28 July 2016 Amer Sports Interim Report Presentation10 28 July 201610

0

20

40

60

80

100

120

140

Net sales

MEUR

Q2/12 Q2/12

56.4

Q2/13 Q2/13Q2/14 Q2/15

64.3

Q2/14

65.1

Q2/15Q2/16

82.0

Q2/16-5

0

5

10

15

20


1.0

4.54.3 4.1 5.1

80.9


We focus on acceleration with a tremendous pipeline of initiatives


OUTLOOK

Outlook for 2016


• 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.

Prioritized, sequenced program continues

Acceleration and transformation

15

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

28 July 2016

APPENDIX

Net sales and EBIT breakdown

28 July 201618

* Excl. IAC

NET SALES

(MEUR)

Q2/

2016

Q1/

2016 2015

Q4/

2015

Q3/

2015

Q2/

2015

Q1/

2015 2014

Q4/

2014

Q3/

2014

Q2/

2014

Q1/

2014

Outdoor 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 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 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 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)

Q2/

2016

Q1/

2016* 2015*

Q4/

2015

Q3/

2015

Q2/

2015*

Q1/

2015* 2014*

Q4/

2014*

Q3/

2014*

Q2/

2014*

Q1/

2014

Outdoor -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 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 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 -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 -12.1 46.0 212.1 84.0 103.5 -9.0 33.6 168.3 77.7 87.6 -17.6 20.6


Business area net sales


Q2/2016 Q2/2015 Ch %

Ch

%* 2015

Footwear 97.0 86.4 12 15 461.2

Apparel 48.8 41.3 18 24 387.2

Winter Sports Equipment 16.1 16.6 -3 -3 400.2

Cycling 38.0 31.7 20 20 138.5

Sports Instruments 31.1 33.7 -8 -6 143.0

Individual Ball Sports 79.5 88.2 -10 -7 315.4

Team Sports 86.0 81.2 6 9 331.6

Fitness 80.9 82.0 -1 1 357.3

Total 477.4 461.1 4 6 2,534.4

*Change in local currencies

Net sales by region

28 July 201620

MEUR

Q2/

2016

Q1/

2016 2015

Q4/

2015

Q3/

2015

Q2/

2015

Q1/

2015 2014

Q4/

2014

Q3/

2014

Q2/

2014

Q1/

2014

EMEA 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 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 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 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


Outdoor

Sales development by region in Q2/2016


Fitness Total

EMEA Americas APAC

Ball Sports

EMEA Americas APAC Total

MEUR Ch, %* MEUR Ch, %* MEUR Ch, %* MEUR Ch, %*

Outdoor 125.7 8 65.8 21 39.5 18 231.0 13

Ball Sports 31.7 8 116.0 1 17.8 -12 165.5 0

Fitness 17.4 -3 48.0 0 15.5 11 80.9 1

Total 174.8 7 229.8 6 72.8 7 477.4 6

* Change in local currencies

231.0 165.5 80.9 477.4

17%

68%

11%19%

70%

19%22%

59%

15%37%

48%

54%

29%

Balance sheet


MEUR

June 30,

2016

June 30,

2015

Goodwill and other intangible non-current assets 665.7 592.6

Tangible non-current assets and other non-current assets 344.5 326.5

Inventories and work in progress 585.7 517.8

Receivables 574.2 584.5

Cash and cash equivalents 229.9 109.6

Shareholders’ equity 858.2 804.4

Interest bearing liabilities 829.8 655.9

- Long-term 777.7 480.8

- Current 52.1 175.1

Other liabilities 712.0 670.7

Total 2,400.0 2,131.0

Refinancing needs well covered


• Cash EUR 229.9 million and

unused committed facilities EUR

150 million (June 30, 2016)

• Commercial paper program in

size of EUR 500 million; out of

which EUR 49.9 million utilized

• No scheduled repayments of

long-term loans in 2016 or in

2017.

• Average interest rate of loan

portfolio 2.1% (June 30, 2015

2.8%)

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Bonds

Bank loans

CommercialPapers

Other

Free cash flow

28 July 201624

-150

-100

-50

0

50

100

150

200

Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16

Cash flow from operating activities – net capital expenditures – restricted cash

Net capital expenditure = total capital expenditure less proceeds from sale of assets


Impact of new ESMA guidelines

New ESMA (European Securities and Markets Authority) guidelines

on 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.


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


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

28 July 201627 Amer Sports Interim Report Presentation

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

28 July 201628 Amer Sports Interim Report Presentation

Amer Sports Q2/2016 Acceleration and transformation...

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