Amer Sports, Inc. · NYSE:AS
Amer Sports — Q3 2024 Earnings Presentation
32 slides from Amer Sports's earnings presentation, Nov 19, 2024
Slide 1: Amer Sports Third Quarter 2024
Amer Sports Third Quarter 2024
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation includes estimates, projections, statements relating to the business plans, objectives, and expected operating results of Amer Sports Inc. (“Amer Sports” or the “Company”) that are “forward-looking statements” within the meaning of the Private Securities
Slide 3: Strong Third Quarter 2024
Strong Third Quarter 2024 • Strong quarter with sales, adjusted margins and EPS above expectations • Revenue increased 17% to $1,354 million • Arc’teryx continues standout growth and profitability • Ball & Racquet segment accelerated to double-digit growth • Continued strong results in Greater China
Slide 4: Confident in Our Future
Confident in Our Future • Unique portfolio of premium sports & outdoor brands. High consumer engagement, conversion, and satisfaction but still small in size. • Arc’teryx generating strong growth and profitability for the outdoor industry, disruptive DTC model, and unique competitive position. • Sal
Slide 5: Technical Apparel Q3 Highlights
Technical Apparel Q3 Highlights 2-yr stacked omni comp 108% 101% 106% 97% 97% 88% 68% 2024 2023 2022 Women’s grew very strong double-digits TIME award winning Mo/Go hiking pants 1Q’23 2Q’23 3Q’23 4Q’23 1Q’24 2Q’24 3Q’24 Arc’teryx continues to enjoy great success in Arc’teryx Chamonix mountain clinic
Slide 6: Outdoor Performance Q3 Highlights
Outdoor Performance Q3 Highlights Softgoods growing faster than hardgoods Winter sports 34% Salomon Softgoods 46% equipment grew double digits in Q3 Footwear & 66% apparel 54% 2022 2024E Salomon Shanghai flagship storefront Salomon NYC SoHo pop-up storefront Atomic continues taking market share Spor
Slide 7: Ball & Racquet Q3 Highlights
Strongest US Open ever, with record sales Ball & Racquet Q3 Highlights Double-digit growth in Q3 11% 1% -3% -14% 4Q’23 1Q’24 2Q’24 3Q’24 Record sales in the US Open 2024 Wilson Tennis 360 concept store in Beijing Caitlin Clark x Wilson basketballs Wilson athlete Marta Kostyuk in the US Open Roger Fe
Slide 8: Financial Review
Financial Review
Slide 9: Credit Card Processing Fees Reclassification
Credit Card Processing Fees Reclassification USD in millions FY 2021 FY 2022 Q1’23 Q2’23 Q3’23 Q4’23 FY 2023 Q1’24 Q2’24 Technical Apparel 10.8 12.6 4.2 3.8 4.2 9.2 21.3 6.7 4.8 Outdoor Performance 5.0 5.8 1.5 1.3 1.3 2.2 6.4 1.8 1.7 Ball & Racquet 3.5 4.0 1.0 0.9 1.3 1.1 4.3 1.0 1.0 Total Amer Spor
Slide 10: Last Four Quarters Revenue Trends by Segment
Last Four Quarters Revenue Trends by Segment Group Technical Apparel Outdoor Performance Ball & Racquet 44% 34% 34% 11% 11% 26% 16% 17% 8% 1% 13% 6% 10% -3% 2% -14% 4Q23 1Q24 2Q24 3Q24 4Q23 1Q24 2Q24 3Q24 4Q23 1Q24 2Q24 3Q24 4Q23 1Q24 2Q24 3Q24 10
Slide 11: Last Four Quarters Revenue Trends by Channel
Last Four Quarters Revenue Trends by Channel DTC Wholesale 41% 40% 41% 37% 8% 2% -1% -4% 4Q23 1Q24 2Q24 3Q24 4Q23 1Q24 2Q24 3Q24 11
Slide 12: Last Four Quarters Revenue Trends by Region
Last Four Quarters Revenue Trends by Region Greater China APAC Americas EMEA 56% 54% 51% 47% 45% 45% 34% 22% 7% 4% 5% 1% 1% 1% 0% -1% 4Q23 1Q24 2Q24 3Q24 4Q23 1Q24 2Q24 3Q24 4Q23 1Q24 2Q24 3Q24 4Q23 1Q24 2Q24 3Q24 12
Slide 13: Adjusted Gross Profit Margin Bridge
Adjusted Gross Profit Margin Bridge • Another quarter of strong gross margin expansion 1.9% (+410bps) 55.5% -0.3% 2.5% • GM expansion primarily driven by positive segment, product regional, and channel mix shift 51.4% 3Q23 Pricing, Product Mix, Brand & Regional Mix Transportation, 3Q24 Discounts, FX
Slide 14: Adjusted SG&A Bridge
Adjusted SG&A Bridge 42.3% of revenue • Adj. SG&A expenses as a percentage of revenues 572 increased 210 bps • The higher SG&A rate 40.2% of resulted from deleveraging at revenue both Technical Apparel and Outdoor Performance driven 464 by investments to support growth 3Q23 Technical Apparel Outdoor
Slide 15: Other Financial Items
Other Financial Items Q3’23 Q3’24 Adj. Operating margin 11.6 % 14.4 % Net finance cost ($M) 108 45 Effective tax rate 139% 52% Adj. Net income ($M) (13) 71 Adj. Diluted EPS ($) (0.03) 0.14 Note: Please refer to appendix for appendix for reconciliation of the non-IFRS measures presented to most direc
Slide 16: Technical Apparel
Technical Apparel • Technical Apparel revenues increased 34% to $520 million led by Arc'teryx. Revenue ($B) and Adjusted Operating Margin • Growth fueled by 40% DTC expansion, and 20% omni- comp vs. 68% omni-comp last year. ~34% CAGR • Regional growth was led by Asia Pacific, followed by Greater Chi
Slide 17: Outdoor Performance
Outdoor Performance • Revenue increased 8% to $534 million, against the most difficult growth comparison of the year, driven by double-digit sales growth in Salomon footwear & apparel and DTC, Revenue ($B) and Adjusted Operating Margin partially offset by a slight decline in Winter Sports Equipment.
Slide 18: Ball & Racquet
Ball & Racquet • Revenue returned to double digit growth, increasing 11% to $300 million driven especially by Racquet Sports and Sportswear. Golf and Inflatables also returned to growth. Revenue ($B) and Adjusted Operating Margin • Tennis 360 experiencing strong momentum in both the US ~8% CAGR and
Slide 19: Balance Sheet Update
Balance Sheet Update 9/30/2024 ($M) EUR term loan 784 USD term loan 434 • Net debt in Q3 was 2.0 Secured notes 800 billion, and cash and ST bank financing1 153 cash equivalents totaled Revolver 129 $312 million Total debt 2,300 Cash 312 • Deleveraging our Net Debt 2 1,987 balance sheet is a 2024E ad
Slide 20: Inventory
Inventory Yearly and quarterly revenue and inventory change (in %) • Inventories rose 12% year- Inventory and Sales growth over-year, below 17% revenue growth, finishing 23% 3Q24 in a healthy position 21% 17% 16% 13% 12% 6% 2% 2023 1Q 2024 2Q 2024 3Q 2024 Inventory growth YoY Sales growth YoY 20 Tue
Slide 21: China Sourcing Exposure
China Sourcing Exposure • Greater China less than 30% of Amer Sports global sourcing • Sourcing from China to the US market represents 10-12% of total Group revenues • Ball & Racquet is highest exposure segment, similar to last period of rising tariffs • Performance equipment segments would be most
Slide 22: Guidance
Guidance
Slide 23: Outlook: Full Year 2024
Outlook: Full Year 2024 Other than revenue, all guidance figures reference adjusted amounts • Reported revenue growth:16 – 17% • Gross margin: 55.3% – 55.5% • Operating margin: towards high-end of 10.5% – 11.0% • D&A: approx. $270 million, including approx. $120 million of ROU depreciation • Net fin
Slide 24: Outlook: Initial 2025
Outlook: Initial 2025 Other than revenue, all guidance figures reference adjusted amounts • Reported revenue growth: Low double digit-to-mid teens • Operating margin: 30-70+ basis points expansion • Net finance costs: $180 - $190 million • Effective tax rate: approximately 37% 24 Tuesday, November 1
Slide 25: Q&A
Q&A 25 Tuesday, November 19, 2024
Slide 26: Amer Sports brands
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Slide 27: Appendix
Appendix 1. Adjusted gross profit reconciliation 2. Adjusted SG&A reconciliation 3. Adjusted operating profit reconciliation 4. Adjusted net income reconciliation 5. EBITDA, adjusted EBITDA and adjusted EBITDA margin reconciliation 27 Tuesday, November 19, 2024
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Slide 32: Non-IFRS Disclaimer
NON-IFRS DISCLAIMER Adjusted gross profit margin, adjusted SG&A expenses, adjusted operating profit margin, adjusted EBITDA, adjusted net (loss) income, and adjusted diluted (loss) income per share are financial measures that are not defined under IFRS. Adjusted gross profit margin is calculated as