Amer Sports, Inc. · NYSE:AS
Amer Sports — Q2 2024 Earnings Presentation
29 slides from Amer Sports's earnings presentation, Aug 20, 2024
Slide 1: Amer Sports Second Quarter 2024
Amer Sports Second 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 Second Quarter 2024
Strong Second Quarter 2024 • Very strong quarter – beat on all metrics. Q2 revenue, adjusted operating margin, and adjusted diluted EPS above guidance • Q2 revenues increased 16% to $1.0 billion led by Technical Apparel segment and flagship Arc’teryx brand (+18% ex-Fx) • Nearly 3% adj. operating mar
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 size. • Arc’teryx a breakout brand with unprecedented growth and profitability for the outdoor industry, disruptive DTC model, and very strong competi
Slide 5: Technical Apparel Q2 Highlights
Technical Apparel Q2 Highlights 2-yr stacked omni comp reaccelerating 108% 101% 106% 95% 82% 68% 2024 2023 2022 1Q’23 2Q’23 3Q’23 4Q’23 1Q’24 2Q’24 New ePE product selling extremely well Arc’teryx embracing climbing gym phenomenon 5 Tuesday, August 20, 2024 Tokyo creation center Arc’teryx footwear:
Slide 6: Outdoor Performance Q2 Highlights
Outdoor Performance Q2 Highlights Softgoods growing faster than hardgoods Salomon store in Hangzhou, China Winter sports 34% 46% equipment Footwear & 66% apparel 54% 2022 2024E Le Marais storefront, Paris 6 Tuesday, August 20, 2024 Le Marais footwear-only concept store Salomon Sportstyle display Cha
Slide 7: Ball & Racquet Q2 Highlights
Ball & Racquet Q2 Highlights Returned to Growth in Q2 +L-MSD% 1% -3% -14% 4Q’23 1Q’24 2Q’24 2024E RF x Wilson line of premium performance racquets and accessories Roger Federer for Wilson Qinwen Zheng won Olympic Gold in tennis with a 7 Tuesday, August 20, 2024 New Wilson store in Wilson Intrigue: f
Slide 8: Financial Review
Financial Review |
Slide 9: Last four Quarters Revenue Trends by Segment
Last four Quarters Revenue Trends by Segment Group Technical Apparel Outdoor Performance Ball & Racquet 35% 69% 26% 18% 44% 34% 16% 11% 13% 26% 1% 10% 6% -3% 2% 3Q23 4Q23 1Q24 2Q24 3Q23 4Q23 1Q24 2Q24 3Q23 4Q23 1Q24 2Q24 3Q23 4Q23 1Q24 2Q24 -14% 9 August 19, 2024
Slide 10: Last four Quarters Revenue Trends by Channel
Last four Quarters Revenue Trends by Channel DTC Wholesale 60% 27% 41% 40% 37% 2% -1% 3Q23 4Q23 1Q24 2Q24 -4% 3Q23 4Q23 1Q24 2Q24 10 August 19, 2024
Slide 11: Last four Quarters Revenue Trends by Region
Last four Quarters Revenue Trends by Region EMEA Americas Greater China APAC 39% 27% 54% 53% 51% 45% 45% 43% 34% 22% 5% 1% 1% 1% 0% -1% 3Q23 4Q23 1Q24 2Q24 3Q23 4Q23 1Q24 2Q24 3Q23 4Q23 1Q24 2Q24 3Q23 4Q23 1Q24 2Q24 11 August 19, 2024
Slide 12: Adjusted Gross Profit Margin bridge
Adjusted Gross Profit Margin bridge • Another quarter of strong gross margin expansion 0.8% 55.8% (+210bps) 2.9% • GM expansion primarily driven 53.7% by positive brand and regional mix. Lower logistics costs helped. -1.6% • Inventory reserves, unfavorable Fx, and other items partially offset these
Slide 13: Adjusted SG&A Bridge
Adjusted SG&A Bridge 52.9% of revenue • Adj. SG&A expenses as a percentage of revenues 526 increased 210 bps as expected 50.8% of • The higher SG&A rate driven revenue by deleveraging at Ball & Racquet 436 • Both Technical Apparel and Outdoor Performance achieved SG&A leverage • HQ SG&A increase dri
Slide 14: Adjusted P&L
Adjusted P&L Q2’23 Q2’24 Previous Q2’24 Guidance Total Sales (M$) 857 994 Growth% 24% 16% ~10% Adj. Gross Profit 461 555 Adj. Gross Margin% 53.8% 55.8 % ~54.0% Adj. SG&A 436 526 Adj. SG&A% 50.8 % 52.9 % Other operating (loss)/income (4) 0 Adj. Operating Profit 21 29 Adj. OP Margin% 2.4 % 2.9 % ~0.0%
Slide 15: Technical Apparel
Technical Apparel • Technical Apparel revenues increased 34% to $407 million led by Arc'teryx. Revenue ($B) and Adjusted Operating Margin • Growth fueled by 39% DTC expansion, and 26% omni- comp vs. difficult 80% omni-comp last year. +32% • Regional growth was led by Asia Pacific, followed by Greate
Slide 16: Outdoor Performance
Outdoor Performance • Revenue increased 11% to $304 million driven by strong double-digit sales growth in Salomon footwear & apparel and DTC, partially offset by decline in Winter Sports Equipment. Revenue ($B) and Adjusted Operating Margin • DTC grew 55%, while wholesale declined 5%, negatively +15
Slide 17: Ball & Racquet
Ball & Racquet • Revenue returned to positive growth, increasing 1% to $283 million driven by normalizing wholesale replenishment trends as market inventory levels return to healthy levels. Revenue ($B) and Adjusted Operating Margin • Growth was driven by Sportswear, Racquet Sports, and Golf, +8% pa
Slide 18: Balance sheet transformation underway
Balance sheet transformation underway 6/31/2024 ($M) EUR term loan 750 USD term loan 499 • Net debt in 2Q was 1.8 Secured notes 800 billion, and cash and ST bank financing 27 equivalents totaled $256 Revolver 0 million Total debt 2,076 Cash 256 • Deleveraging our Net Debt 1,820 balance sheet is a 20
Slide 19: Inventory
Inventory Yearly and quarterly revenue and inventory change (in %) Inventory and Sales growth • Inventories rose 2% year- over-year, below 16% revenue growth, finishing 2Q24 in healthy position Inventory growth YoY Sales growth YoY 19 Tuesday, August 20, 2024
Slide 20: Guidance
Guidance
Slide 21: Outlook: Full Year 2024
Outlook: Full Year 2024 All guidance figures reference adjusted amounts • Reported revenue growth: 15 - 17% • Gross margin: approximately 54.5% • Operating margin: toward high-end of 10.5 - 11.0% • D&A: approx. $250 million (including approx. $110 million of ROU depreciation) • Net finance cost: $20
Slide 22: Outlook: Third Quarter 2024
Outlook: Third Quarter 2024 All guidance figures reference adjusted amounts • Reported revenue growth: 12 - 13% • Gross margin: approximately 54.0% • Operating margin: 11.0 – 12.0% • Net finance cost: $45 - 50 million • Effective tax rate: between 50 - 55% • Fully diluted share count: 510 million •
Slide 23: Q&A
Q&A 23 Tuesday, August 20, 2024
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Slide 25: Appendix
Appendix 1. Adjusted gross profit reconciliation 2. Adjusted SG&A reconciliation 3. Adjusted operating profit reconciliation 4. EBITDA, adjusted EBITDA and adjusted EBITDA margin reconciliation 25 Tuesday, August 20, 2024
Slide 26: Adjusted Gross Profit and Adjusted SG&A Reconciliation
ADJUSTED GROSS PROFIT RECONCILIATION For the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited; $ in millions) Three months ended Six months ended June 30, June 30, ($ in millions) 2024 2023 2024 2023 Gross Profit $ 551 $ 457 $ 1,190 $ 1,012 PPA 4 4 7 7 Adjusted Gross Profit $ 555 $ 461 $
Slide 27: Adjusted Operating Profit Reconciliation
ADJUSTED OPERATING PROFIT RECONCILIATION (1) For the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited; $ in millions) Three months ended Six months ended June 30, June 30, ($ in millions) 2024 2023 2024 2023 Loss before tax $ (54) $ (92) $ (39) $ (46) PPA 11 11 21 21 Restructuring expens
Slide 28: EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin Reconciliation
EBITDA, ADJUSTED EBITDA, AND ADJUSTED EBITDA MARGIN RECONCILIATION(1) For the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited; $ in millions) Three months ended Six months ended June 30, June 30, ($ in millions) 2024 2023 2024 2023 Revenue $ 994 $ 857 $ 2,177 $ 1,907 Net (loss)/income a
Slide 29: 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