Amer Sports, Inc. · NYSE:AS
Amer Sports — Q3 2003 Earnings Presentation
31 slides from Amer Sports's earnings presentation, Oct 28, 2003
Slide 1: Interim Report January - September 2003
Interim Report January - September 2003 October 28, 2003
Slide 2: Highlights
Highlights § Market conditions stabilising § Amer Sports’ progress is at least on a par with the market, with the exception of Golf – Wilson re-organisation continues in line with plan § EUR 20.5 million gain from patent litigation case § 2003 net sales expected to be similar to 2002, operating prof
Slide 3: January - September key indicators
January - September key indicators Q1-Q3/03 Q1-Q3/02 FY 2002 Net sales (MEUR) 836.8 835.8 1,101.9 EBIT(MEUR) 82.3 77.2 103.0 EBT (MEUR) 76.0 72.0 95.6 EPS (EUR) 2.27 2.23 2.95
Slide 4: Reaching the no. 1 position
Reaching the no. 1 position Investments in 2003 in § Brands § R&D § Distribution
Slide 5: Case Japan
Case Japan § #2 in the global golf market § #3 in the tennis market § #2 in the baseball market § #3 in the alpine ski market
Slide 6: Amer Sports Japan
Amer Sports Japan § Wilson Japan founded 1985 § Transformed into Amer Sports Japan October 2002 – 100 employees, 3 locations § Precor sales integrated May 2003 § First Suunto employee nominated July 2003 § Atomic sales to be integrated in the 2004/2005 season
Slide 7: Financial Review
Financial Review Pekka Paalanne CFO
Slide 8: Profit and loss statement January - September 2003
Profit and loss statement January - September 2003 Q1-Q3/03 Q1-Q3/02 Ch% FY 2002 Net sales 836.8 835.8 0 1,101.9 EBIT 82.3 77.2 7 103.0 Net financials -6.3 -5.2 -7.4 EBT 76.0 72.0 6 95.6 Taxes -22.8 -20.2 -26.5 Net profit 52.9 51.8 68.5 ROCE % *) 17.7 17.5 18.3 *) Rolling 12 months
Slide 9: Profit and loss statement July - September 2003
Profit and loss statement July - September 2003 Q3/03 Q3/02 Ch% FY 2002 Net sales 301.1 283.6 6 1,101.9 EBIT 57.5 38.7 49 103.0 Net financials -2.2 -2.2 -7.4 EBT 55.3 36.5 52 95.6 Taxes -16.6 -10.2 -26.5 Net profit 38.6 26.3 68.5
Slide 10: Breakdown of net sales January - September 2003
Breakdown of net sales January - September 2003 Ch% in local Q1-Q3/03 Q1-Q3/02 Ch% currencies FY2002 Racquet 173.1 204.6 -15 -3 243.9 Golf 135.9 184.8 -26 -16 213.3 Team 143.2 162.0 -12 5 203.9 Winter Sports 116.5 136.2 -14 -11 201.6 Fitness Equipment 128.6 - - - 39.5 Sports Instruments 55.9 61.8 -1
Slide 11: Geographic breakdown of net sales
Geographic breakdown of net sales Ch% in local Q1-Q3/03 Q1-Q3/02 currencies FY2002 North America 444.9 435.7 20 558.5 Europe 293.9 296.0 1 405.5 Japan 40.4 46.1 -5 56.2 Asia Pacific 28.9 27.8 20 34.8 Other 28.7 30.2 12 46.9 Total 836.8 835.8 11 1,101.9
Slide 12: Breakdown of net sales July - September 2003
Breakdown of net sales July - September 2003 Ch% in local Q3/03 Q3/02 Ch% currencies FY2002 Racquet 57.5 60.2 -4 4 243.9 Golf 32.2 39.2 -18 -13 213.3 Team 38.6 41.4 -7 3 203.9 Winter Sports 83.3 93.8 -11 -8 201.6 Fitness Equipment 42.8 - - - 39.5 Sports Instruments 16.4 17.7 -7 -6 85.3 Tobacco 30.3
Slide 13: Breakdown of EBIT January - September 2003
Breakdown of EBIT January - September 2003 Q1-Q3/03 Q1-Q3/02 FY2002 Racquet 18.5 22.4 25.6 Golf -3.3 10.7 7.1 Team 17.5 20.8 24.0 Winter Sports 12.3 23.0 39.6 Fitness Equipment 19.3 - 6.3 Sports Instruments 5.9 6.8 10.5 Tobacco 7.5 7.3 9.2 HQ -4.7 -7.1 -9.2 Group goodwill -11.2 -6.7 -10.1 Patent set
Slide 14: Breakdown of EBIT July - September 2003
Breakdown of EBIT July - September 2003 Q3/03 Q3/02 FY2002 Racquet 7.8 6.6 25.6 Golf -5.6 -2.1 7.1 Team 2.6 2.5 24.0 Winter Sports 24.9 31.3 39.6 Fitness Equipment 7.5 - 6.3 Sports Instruments 1.9 2.1 10.5 Tobacco 2.8 2.3 9.2 HQ -1.2 -1.9 -9.2 Group goodwill -3.7 -2.1 -10.1 Patent settlement 20.5 -
Slide 15: Balance sheet
Balance sheet 30 Sept 2003 30 Sept 2002 31 Dec 2002 Goodwill 279.5 183.0 312.1 Fixed assets 180.6 215.0 197.7 Inventories 139.0 140.1 156.4 Receivables 320.1 294.2 308.2 Cash 23.8 24.1 33.1 Equity 478.0 480.3 473.4 Int. bearing debt 177.6 93.2 243.0 - Long term 60.1 49.7 48.2 - Short term 117.5 43.5
Slide 16: Equity ratio and gearing, %
Equity ratio and gearing, % 60 50 40 Eq ratio 30 Gearing 20 10 0 IV/00 I/01 II/01 III/01 IV/01 I/02 II/02 III/02 IV/02 I/03 II/03 III/03 30 Sept 2003 30 Sept 2002 31 Dec 2002 EqRatio % 49.3 54.8 45.6 Gearing % 34 15 47
Slide 17: Divisional highlights
Divisional highlights Roger Talermo President & CEO
Slide 18: Racquet Sports
Racquet Sports § Growing sales in Q3 – Q1-Q3 sales of tennis racquets & balls both still down 4% § Renewed contracts – US Open endorsement contract until 2009 – Roger Federer re-signed § #1 US brand in racquets, strings and footwear* Ch% in local MEUR Q1-Q3/03 Q1-Q3/02 Ch% currencies Net sales 173.1
Slide 19: Golf
Golf § Sales significantly below target § Further steps in Wilson re-organisation – Closure of Tullahoma and Springfield assembly units § New product introductions: Deep Red II Maxx, Deep Red II Distance Irons § Padraig Harrington re-signed with Wilson Ch% in local MEUR Q1-Q3/03 Q1-Q3/02 Ch% currenc
Slide 20: Team Sports
Team Sports § Baseball and softball bat sales up 18% – Entry into the youth baseball market – Custom-designed bats for the Japanese market § Wilson won the Chicago Innovation Award – Youth Batting Helmet Ch% in local MEUR Q1-Q3/03 Q1-Q3/02 Ch% currencies Net sales 143.2 162.0 -12 5 EBIT 17.5 20.8 -1
Slide 21: Winter Sports
Winter Sports § Pre-order volume close to last year’s level – September deliveries match last year’s level – More pre-order deliveries in Q4 than usual § New sales set up in Japan – Atomic sales thru’ Amer Sports Japan 2004/2005 – Asics distribution agreement discontinued Ch% in local MEUR Q1-Q3/03
Slide 22: Fitness equipment
Fitness equipment § Growth in treadmills and cycles § Public Sector sales in the USA picked up after a slow H1 § Positive medium-term outlook Ch% in local MEUR Q1-Q3/03 Q1-Q3/02* Ch% currencies Net sales 128.6 147.0 -13 - EBIT 19.3 18.6 4 24 *Pro forma
Slide 23: Sports Instruments
Sports Instruments § Sales of wristop computers up 6% § Diving instruments sales picked up in Q3 § Declining non-core sales § Focus on volume products – Suunto X3HR, Suunto X6HRM, Suunto n3 Ch% in local MEUR Q1-Q3/03 Q1-Q3/02 Ch% currencies Net sales 55.9 61.8 -10 -5 EBIT 5.9 6.8 -13 -12
Slide 24: Tobacco
Tobacco § Finnish tobacco market declined § Market shifting to low price segment § Sales outside Finland increased Q1-Q3/03 Q1-Q3/02 Ch% Net sales 83.6 86.4 -3 EBIT 7.5 7.3 3
Slide 25: Outlook
Outlook § Demand for sports equipment has stabilised § Net sales in 2003 expected to be similar to 2002’s, operating profit EUR 90-100 million § Wilson re-organisation delivering EUR 12m of savings next year § Amer Sports is balanced by its wide portfolio of sports and geographical diversity
Slide 26: Sports equipment companies
Sports equipment companies Net sales 2002 Million $ 0 200 400 600 800 1000 1200 1400 Adidas- Salomon Amer Brunswick Shimano Acushnet Icon Health & Fitness Callaway Nike K2+Rawlings Mizuno Nautilus Group Rossignol
Slide 27: Target: To be the no. 1 sports equipment company in the world
Target: To be the no. 1 sports equipment company in the world
Slide 28: Net sales, rolling 12 months (MEUR)
Net sales, rolling 12 months (MEUR) 1250 1099,8 1113 1101 1080,3 1101,9 1096,4 1085,4 1102,9 1000 750 500 250 0 IV/01 I/02 II/02 III/02 IV/02 I/03 II/03 III/03
Slide 29: EBIT, rolling 12 months (MEUR)
EBIT, rolling 12 months (MEUR) 120 108,1 98,6 99,5 103 103 100 89,2 94,2 89,3 80 60 40 20 0 IV/01 I/02 II/02 III/02 IV/02 I/03 II/03 III/03
Slide 30: EPS, rolling 12 months (EUR)
EPS, rolling 12 months (EUR) 3,5 2,9 3,01 2,95 2,88 2,99 3 2,65 2,73 2,46 2,5 2 1,5 1 0,5 0 IV/01 I/02 II/02 III/02 IV/02 I/03 II/03 III/03
Slide 31: ROCE, rolling 12 months (%)
ROCE, rolling 12 months (%) 20 18,3 17,5 17,5 17,9 17,7 17 16,1 16 15,2 12 8 4 0 IV/01 I/02 II/02 III/02 IV/02 I/03 II/03 III/03