Amer Sports, Inc. · NYSE:AS
Amer Sports — FY2005 Earnings Presentation
39 slides from Amer Sports's earnings presentation, Feb 10, 2006
Slide 1: Results for the 2005 financial year
Results for the 2005 financial year February 10, 2006 Roger Talermo President and CEO
Slide 2: 2005 highlights
2005 highlights A historic year for Amer Sports – Goal of becoming the world’s No. 1 sports equipment company achieved – Organic growth without Salomon +7% – Salomon increased sales by EUR 255.2 million, +25% – Record profits in fitness equipment, racquet and team sports Proposed dividend EUR 0.50/s
Slide 3: Changes in Salomon
Changes in Salomon Management structure reorganized and new executive team appointed Three-year turnaround program started to ensure future competitiveness started – Reorganization of operations – Reduction of about 400 positions, mainly in France – Reallocation of the production of Salomon skis and
Slide 4: Reorganization at Wilson
Reorganization at Wilson All business units brought under single management – New President Chris Considine appointed Realignment of Golf’s global organization to increase operational efficiency and lower costs – Changes and personnel cuts – Greater cohesion in distribution strategy – Far East sourc
Slide 5: President of Suunto appointed
President of Suunto appointed Juha Pinomaa has been appointed President of Suunto Oy effective as of September 1
Slide 6: Centralization of Asian subcontracting
Centralization of Asian subcontracting Sourcing in Asia coordinated for all brands – Steve Millea leading the unit Synergies seek in purchasing and greater efficiency in the management of the delivery chain sought
Slide 7: Financial Review
Financial Review Pekka Paalanne CFO
Slide 8: Profit and loss statement
Profit and loss statement MEUR 2005 2004 Ch % Net sales 1.363,7 1,035.9 32 EBIT 82.3 100.5 -18 Net financials -9.0 -3.5 EBT 73.3 97.0 -24 Taxes 2.1 -28.1 Net result 75.2 68.6 10
Slide 9: Acquisition of Salomon
Acquisition of Salomon The debt free purchase price EUR 496.9 million – EUR 460 million paid by the end of the financial year Fair value of the acquired net assets EUR 530.9 million – EUR 208.1 million comprises the trademarks and patents EUR 55.4 million in negative goodwill EBIT reduced by EUR 57.
Slide 10: Impact of Salomon acquisition to Group’s 2005 earnings
Impact of Salomon acquisition to Group’s 2005 earnings MEUR Salomon’s Non-recurring items Total business associated with the operations acquisition Net sales 255.2 - 255.2 Negative goodwill - 55.4 Fair value adjustment of inventories - -57.2 Restructuring provision - -52.8 EBIT 37.9 -54.6 -16.7 Net
Slide 11: Breakdown of net sales
Breakdown of net sales MEUR 2005 2004 Ch % Racquet Sports 225.4 210.3 7 Golf 141.2 147.7 -4 Team Sports 203.8 185.0 10 Winter Sports/Atomic 214.0 205.6 4 Fitness Equipment 252.1 210.1 20 Sports Instruments 72.0 77.2 -7 1,108.5 1,035.9 +7 Salomon 255.2 - - Total 1,363.7 1,035.9 32 Pro Forma 1,732.0 1
Slide 12: Breakdown of EBIT
Breakdown of EBIT MEUR 2005 2004 Ch % Racquet Sports 32.7 26.9 22 Golf -7.1 0.5 - Team Sports 26.5 24.6 8 Winter Sports/Atomic 22.2 29.6 -25 Fitness Equipment 31.1 23.9 30 Sports Instruments 3.4 8.0 -58 Headquarters -9.8 -13.0 - 99.0 100.5 -1 Salomon -16.7 - - Total 82.3 100.5 -18 Pro forma*) 117.1
Slide 13: Geographic breakdown of net sales
Geographic breakdown of net sales MEUR 2005 2004 Ch % Americas 679.9 597.1 14 EMEA 521.0 327.2 59 Asia 162.8 111.6 46 Total 1,363.7 1,035.9 32
Slide 14: Profit and loss statement Q4/2005
Profit and loss statement Q4/2005 MEUR Q4/05 Q4/04 Ch % Net sales 558.5 261.0 114 EBIT 13.2 33.9 -61 Net financials -5.4 -0.9 EBT 7.8 33.0 Taxes 22.7 -9.5 Net result 30.6 23.4 31
Slide 15: Breakdown of net sales Q4/2005
Breakdown of net sales Q4/2005 MEUR Q4/05 Q4/04 Ch % 2005 Racquet Sports 45.8 39.3 17 225.4 Golf 22.7 21.1 8 141.2 Team Sports 51.2 42.0 22 203.8 Winter Sports/Atomic 85.9 80.5 7 214.0 Fitness Equipment 80.7 58.6 38 252.1 Sports Instruments 17.0 19.5 -13 72.0 303.3 261.0 16 1,108.5 Salomon 255.2 - -
Slide 16: Breakdown of EBIT Q4/2005
Breakdown of EBIT Q4/2005 MEUR Q4/05 Q4/04 Ch % 2005 Racquet Sports 6.7 4.5 49 32.7 Golf -8.9 -2.9 -7.1 Team Sports 5.1 5.7 -11 26.5 Winter Sports/Atomic 19.0 20.5 -7 22.2 Fitness Equipment 13.6 7.6 79 31.1 Sports Instruments -0.7 2.5 3.4 Headquarters -4.9 -4.0 -9.8 29.9 33.9 -12 99 Salomon -16.7 37
Slide 17: Balance sheet
Balance sheet MEUR 31 Dec 2005 31 Dec 2004 Goodwill and other intangible assets 528.8 288.1 Fixed and other non-current assets 172.1 111.0 Inventories 301.6 154.4 Receivables 635.1 260.0 Cash 48.7 17.0 1,686.3 830.5 Equity 536.2 461.3 Int. bearing debt - Long term 256.2 27.1 - Current 393.5 123.1 Ot
Slide 18: Equity ratio and gearing, %
Equity ratio and gearing, % 120 100 80 Equity ratio 60 Gearing 40 20 0 2001 2002 2003 2004 2005 * 2000-2002 FAS 31 Dec 2005 31 Dec 2004 Equity ratio, % 31.8 55.5 Gearing, % 112 29
Slide 19: Salomon’s key indicators
Salomon’s key indicators PRO FORMA, MEUR 2005 2004 Ch % Net sales 623.5 631.6 -1 EBIT*) 18.1 22.3 -19 % of net sales 2.9 3.5 *) Excluding non-recurring items
Slide 20: Development of net sales
Development of net sales MEUR 2000 1800 1600 1400 1200 Net sales 1000 Pro forma net sales 800 600 400 200 0 I/05 II/05 III/05 IV/05
Slide 21: Development of EBIT
Development of EBIT MEUR 140 120 100 80 60 EBIT 40 Pro forma EBIT 20 0 -20 -40 I/05 II/05 III/05 IV/05
Slide 22: Highlights by division
Highlights by division Roger Talermo President & CEO
Slide 23: Racquet Sports
Racquet Sports The Racquet Sports Division posted record earnings The global tennis market grew slightly Wilson’s share of the global tennis racket market at 37% – United States 46%, Europe 33%, Japan 27% Wilson took a 26% share of the global tennis ball market – United Sates 42% Wilson is the offic
Slide 24: Racquet Sports outlook 2006
Racquet Sports outlook 2006 The growth of Racquet Sports is expected to level off in terms of local currencies, with profitability remaining at a good level in 2006.
Slide 25: Golf
Golf The global golf equipment market increased slightly in 2005 – North America +3%, Japan at last year's level – Global number of rounds played at the same level as in 2004 Wilson’s golf sales +17% in Japan After the global re-launch of the Wilson Staff brand, the Golf Division is also focusing on
Slide 26: Golf, outlook 2006
Golf, outlook 2006 Focus on the major customers in the United States, in line with the new distribution strategy, will impact the net sales of the Golf Division in 2006 in local currency terms. The goal is to improve the division's profitability.
Slide 27: Team Sports
Team Sports Team Sports continued to perform strongly and posted record earnings Wilson’s position in baseball grew – Baseball equipment market at the same level as in 2004 Wilson is the No. 1 in American footballs – Market for American football equipment saw slight growth in the US Team Sports has
Slide 28: Team Sports, outlook 2006
Team Sports, outlook 2006 In local currencies, the Team Sports Division’s net sales and EBIT are expected to grow.
Slide 29: Winter Sports/Atomic
Winter Sports/Atomic The global winter sports market remained stable in terms of volumes but declined slightly in value Atomic alpine skis are the No. 1 ski brand globally – Total of 873,000 alpine ski pairs shipped in 2005 Atomic athletes continued to perform extremely well in the 2004/2005 season
Slide 30: Winter Sports, outlook 2006
Winter Sports, outlook 2006 In local currencies net sales and profitability are anticipated to grow slightly. Atomic’s net sales in 2006 will be effected by the ending of the distribution of Asics products in Austria.
Slide 31: Fitness Equipment
Fitness Equipment The Fitness Equipment Division had a successful year – Net sales rose 20% on organic growth, well ahead of industry estimates of 5% growth Of net sales, 79% were generated in the Americas, where sales rose by 18% – Outside Americas sales rose by 23% Penetration into key European an
Slide 32: Fitness Equipment, outlook 2006
Fitness Equipment, outlook 2006 In local currencies, the Fitness Equipment Division’s net sales and EBIT are expected to rise in 2006.
Slide 33: Sports Instruments
Sports Instruments Wristop computers and diving instruments accounted for a total of 66% of net sales – Wristop computers -8% – Diving instruments remained at the level of the previous year Sales were impacted by component shortages resulting from a fire at a key supplier of circuit boards New produ
Slide 34: Sports Instruments, outlook 2006
Sports Instruments, outlook 2006 Sales of wristop computers are expected to increase driven by new training product group. Sales of diving instruments also expected to grow.
Slide 35: Salomon
Salomon Salomon has a large market share in winter sports, including alpine, crosscountry and snowboarding shoes – Sales of winter sports equipment -6% – Sales of crosscountry skiing equipment +8% Leading position in technical footwear categories – Net sales of apparel and footwear, including Arc’te
Slide 36: ISPO awards
ISPO awards Salomon SNS pilot Arc’teryx Fission LT hoody Arc’teryx backpack
Slide 37: Salomon, outlook 2006
Salomon, outlook 2006 2006 will be a transitional year for Salomon with the implementation of the turnaround initiative launched in December 2005. In local currencies, Salomon’s profitability is estimated to be somewhat higher in 2006, with a major step-up expected in 2007.
Slide 38: Outlook for 2006
Outlook for 2006 In 2006, Amer Sports’ net sales are expected to increase to EUR 1.8 billion, with Salomon being included in the figures during the entire year (pro forma 2005: EUR 1,732 million). Earnings per share in 2006 are expected to come in at EUR 0.90–1.05. The tax rate will return to its or
Slide 39: The No. 1 sports equipment company in the world
The No. 1 sports equipment company in the world