Amer Sports, Inc. · NYSE:AS
Amer Sports — FY2002 Earnings Presentation
43 slides from Amer Sports's earnings presentation, Feb 6, 2003
Slide 1: Results for the 2002 financial year
Results for the 2002 financial year February 6, 2003 Roger Talermo President and CEO
Slide 2: Sports equipment market challenging in 2002
Sports equipment market challenging in 2002 § Slow growth in all major economies § Sports equipment industry outperformed the environment § Further consolidation in the industry
Slide 3: 2002 key indicators
2002 key indicators 2002 2001 Ch% Net sales (MEUR) 1,101.9 1,099.8 EBIT(MEUR) 103.0 98.6 4 EBT (MEUR) 95.6 89.3 7 EPS (EUR) 2.95 2.90
Slide 4: Highlights
Highlights § Record profits despite challenging markets § Acquisition of Precor § Strong operating cashflow § Healthy balance sheet § Golf Division returned to profitability § Proposed dividend EUR 1.40 / share (2001: EUR 1.10)
Slide 5: Financial Review
Financial Review Pekka Paalanne CFO
Slide 6: Profit and loss statement 2002
Profit and loss statement 2002 2002 2001 Ch % Net sales 1,101.9 1,099.8 EBIT 103.0 98.6 4 Net financials -7.4 -9.3 EBT 95.6 89.3 7 Taxes -26.5 -20.5 Net profit 68.5 68.5 ROCE % *) 18.3 17.0 *) Rolling 12 months
Slide 7: Profit and loss statement Q4 / 2002
Profit and loss statement Q4 / 2002 Q4/02 Q4/01 Ch % Net sales 266.1 244.5 9 EBIT 25.8 17.0 52 Net financials -2.2 -1.5 EBT 23.6 15.5 52 Taxes -6.3 -3.6 Net profit 16.7 11.6
Slide 8: Net sales 1998-2002 (MEUR)
Net sales 1998-2002 (MEUR) 1250 1086,6 1099,8 1101,9 1000 825,7 745,5 750 500 250 0 1998 1999 2000 2001 2002
Slide 9: EBIT 1998-2002 (MEUR)
EBIT 1998-2002 (MEUR) 120 98,6 103 100 94,9 80 58,5 60 40 22,3 20 0 1998 1999 2000 2001 2002
Slide 10: Breakdown of net sales 2002
Breakdown of net sales 2002 Ch% in local 2002 2001 Ch% currencies Racquet 243.9 264.8 -8 -3 Golf 213.3 235.9 -10 -5 Team 203.9 204.7 6 Winter Sports 201.6 199.3 1 2 Sports Instruments 85.3 83.4 2 4 Fitness Equipment 39.5 - Tobacco 114.4 103.9 10 Sold operations - 7.8 Total 1,101.9 1,099.8 4
Slide 11: Breakdown of net sales Q4 / 2002
Breakdown of net sales Q4 / 2002 Q4/02 Q4/01 Racquet 39.3 48.2 Golf 28.5 38.0 Team 41.9 41.9 Winter Sports 65.4 68.2 Sports Instruments 23.5 22.1 Fitness Equipment 39.5 - Tobacco 28.0 26.1 Sold operations - - Total 266.1 244.5
Slide 12: Geographic breakdown of net sales 2002
Geographic breakdown of net sales 2002 Ch% in local 2002 2001 Ch% currencies North America 558.5 562.1 -1 4 Europe 405.5 393.5 3 3 Japan 56.2 60.6 -7 -2 Asia Pacific 34.8 35.9 -3 1 Other 46.9 47.7 -2 Total 1,101.9 1,099.8 4
Slide 13: Breakdown of EBIT 2002
Breakdown of EBIT 2002 2002 2001 Ch% Racquet 25.6 26.1 -2 Golf 7.1 -3.3 Team 24.0 24.2 -1 Winter Sports 39.6 40.2 -1 Sports Instruments 10.5 10.1 4 Fitness Equipment 6.3 - Tobacco 9.2 9.6 -4 HQ -9.2 0.3 Group goodwill -10.1 -9.3 Sold operations - 0.7 Total 103.0 98.6 4
Slide 14: Breakdown of EBIT Q4 / 2002
Breakdown of EBIT Q4 / 2002 Q4/02 Q4/01 Racquet 3.2 2.5 Golf -3.6 -6.3 Team 3.2 4.4 Winter Sports 16.6 16.8 Sports Instruments 3.7 2.2 Fitness Equipment 6.3 - Tobacco 1.9 2.1 HQ -2.1 -2.4 Group goodwill -3.4 -2.3 Sold operations - - Total 25.8 17.0
Slide 15: EPS, 1998-2002 (EUR)
EPS, 1998-2002 (EUR) 3,5 2,9 2,95 3 2,7 2,5 2 1,72 1,5 1 0,5 0,11 0 1998 1999 2000 2001 2002
Slide 16: ROCE, 1998-2002 (%)
ROCE, 1998-2002 (%) 20 18,3 17 16,1 16 12,1 12 8 4,6 4 0 1998 1999 2000 2001 2002
Slide 17: Balance sheet
Balance sheet 31 Dec 2002 31 Dec 2001 Goodwill 312.1 208.1 Fixed assets 197.7 227.7 Inventories 156.4 155.2 Receivables 308.2 282.4 Cash 33.1 28.5 Equity 473.4 469.3 Int. bearing debt 243.0 143.0 - Long term 48.2 73.4 - Short term 194.8 69.6 Other liabilities 291.1 289.6 Total 1,007.5 901.9
Slide 18: Equity ratio and gearing, %
Equity ratio and gearing, % 60 50 40 Eq ratio 30 Gearing 20 10 0 1998 1999 2000 2001 2002 31.12.2002 31.12.2001 EqRatio % 45.6 50.7 Gearing % 47 26
Slide 19: Divisional reviews
Divisional reviews Roger Talermo President and CEO
Slide 20: Winter Sports
Winter Sports § Atomic the most profitable ski company in the world § Growth slowed by soft winter sports market § Alpine ski sales up by 6%, bindings up by 6% § Boots down by 22% § Sales in North America up by 9% 2002 2001 Ch% Net sales 201.6 199.3 1 EBIT 39.6 40.2 -1
Slide 21: Winter Sports
Winter Sports § Neox EBM 412: first binding with an electronic management – European Ski Award 2003 / ISPO § Other new products: – Beta Puls technology – New ski boot line § Net sales expected to remain stable, EBIT to remain at a good level
Slide 22: Winter Sports 2002 net sales
Winter Sports 2002 net sales § Alpine ski equipment 84% § Cross-country ski equipment 5% § Snowboards 4% § Other 7%
Slide 23: Sports Instruments
Sports Instruments § Wristop computers sales up by 20% § Diving instruments up by 7% § New sports specific wristop computers: – X6 HR, S6, G9, M9 2002 2001 Ch% Net sales 85.3 83.4 2 EBIT 10.5 10.1 4
Slide 24: Sports Instruments
Sports Instruments § Cooperation with Microsoft – Suunto n series § Net sales and EBIT expected to grow
Slide 25: Sports Instruments 2002 net sales
Sports Instruments 2002 net sales § Wristop computers 32% § Diving instruments 28% § Other 40%
Slide 26: Racquet Sports
Racquet Sports § Racquet market somewhat soft – Tennis racquet sales declined 8% – Tennis ball sales down by 4% – Sales of performance footwear rose by 11% § Full benefit from improved sourcing of tennis balls 2002 2001 Ch% Net sales 243.9 264.8 -8 EBIT 25.6 26.1 -2
Slide 27: Racquet Sports
Racquet Sports § Second generation Triad racquets to the market in 2003 § Net sales and EBIT expected to grow
Slide 28: Racquet Sports 2002 net sales
Racquet Sports 2002 net sales § Tennis racquets 44% § Tennis balls 22% § Footwear 14% § Other 20%
Slide 29: Golf
Golf § Return to profitability – Success of Deep Red clubs, tight cost control § Club sales grew 4% – Performance clubs up by 20% – Deep Red 365 ranked the #1 driver for distance and accuracy / Rankmark § Golf ball sales and market share declined 2002 2001 Ch% Net sales 213.3 235.9 -10 EBIT 7.1 -3.3
Slide 30: Golf
Golf § New products in 2003: – Deep Red II golf clubs – 3 new Wilson True golf balls – Wilson Jack § Endorsement agreement with Jesper Parnevik § Net sales and EBIT expected to grow
Slide 31: Golf 2002 net sales
Golf 2002 net sales § Clubs 54% § Balls 29% § Bags and gloves 10% § Other 7%
Slide 32: Team Sports
Team Sports § Strong performance continues § Baseball glove sales up 21%, baseball and softball bat sales up 8% 2002 2001 Ch% Net sales 203.9 204.7 EBIT 24.0 24.2 -1
Slide 33: Team Sports
Team Sports § New products: – DeMarini F2 Half and Half, Wilson A650 SOG™ – Soccer balls and accessories § More focus on markets outside the US § EBIT expected to remain stable, net sales to grow in 2003
Slide 34: Team Sports 2002 net sales
Team Sports 2002 net sales § American footballs 23% § Baseballs and gloves 25% § Basketballs 15% § Apparel 13% § Base/softball bats 9% § Other 15%
Slide 35: Fitness equipment market
Fitness equipment market § The largest sporting goods equipment segment in the USA (2002: $3.77 billion) § 7% CAGR in fitness equipment purchases since 1990 § Increased focus on safe, low-impact forms of exercise (e.g. elliptical training)
Slide 36: Precor: an excellent strategic fit
Precor: an excellent strategic fit § An established brand § Focus on technology leadership § Premium products § True fitness specialist § Growing market
Slide 37: Fitness equipment
Fitness equipment § Net sales 11-12/2002 EUR39.5m, EBIT EUR6.3m § Pro forma growth of 14% in 2002 – Sales of elliptical cross-trainers up by 16% § Integration proceeding well Pro Forma 2002 Net sales 202.4 EBIT 23.4
Slide 38: Amer Sports taking Precor forward
Amer Sports taking Precor forward § International distribution know-how § Brand building § R & D cooperation § Net sales and EBIT expected to grow in 2003
Slide 39: Fitness Equipment 2002 net sales
Fitness Equipment 2002 net sales § Clubs and institutions 65% § Home use 35%
Slide 40: Tobacco
Tobacco § Tax free deliveries to the Baltic Rim area § Growing low price segment § Net sales expected to grow, EBIT to remain stable 2002 2001 Ch% Net sales 114.4 103.9 10 EBIT 9.2 9.6 -4
Slide 41: Outlook for 2003
Outlook for 2003 § Market environment will remain challenging § Amer Sports is balanced by its wide portfolio of sports and geographical diversity § Net sales and EBIT of Amer Group expected to grow in 2003
Slide 42: Board proposals to the Annual General Meeting
Board proposals to the Annual General Meeting § Cancellation of 327,500 warrants of the 2002 scheme § New warrant scheme – 550.000 warrants – At average share price 2.1.–14.2.2003 + 10% § Cancellation of all (968.300) own shares
Slide 43: Target: To be the no. 1 sports equipment company in the world
Target: To be the no. 1 sports equipment company in the world