Amer Sports, Inc. · NYSE:AS
Amer Sports — FY2003 Earnings Presentation
43 slides from Amer Sports's earnings presentation, Feb 5, 2004
Slide 1: Results for the 2003 financial year
Results for the 2003 financial year February 5, 2004 Roger Talermo President and CEO
Slide 2: Sports equipment market stabilising
Sports equipment market stabilising Slow growth in all major economies in 2003 Further consolidation in the industry Market conditions stabilising Amer Group confident of market growth in 2004
Slide 3: 2003 key indicators
2003 key indicators 2003 2002 Ch% Net sales (MEUR) 1,104.4 1,101.9 EBIT(MEUR) 101.3 103.0 -2 EBT (MEUR) 93.1 95.6 -3 EPS (EUR) 2.77 2.95
Slide 4: 2003 highlights
2003 highlights Amer Sports’ progress is at least on a par with the market, with the exception of Golf Foreign exchange rates depressed net sales by 103 MEUR Withdrawing from tobacco business Proposed dividend EUR 1.40 / share (2002: EUR 1.40)
Slide 5: Measures taken in 2003
Measures taken in 2003 New Amer Sports companies in Japan and Switzerland Integration of Precor completed Wilson reorganization Continuous investment in R&D Several important endorsement agreements
Slide 6: Strengthening our market positions
Strengthening our market positions Acquisitions – Volant – ATEC – FPI – ClubCom
Slide 7: New management organization
New management organization Amer Board President & CEO SVP, Com. & SVP, Finance & Brand building Admininstration SVP Business planning & Golf & Racquet Sales & Dist. control Europe Team Treasury/IR Asia Winter MIS/Supply chain development International Fitness HR Sports Corporate Instruments Counsel
Slide 8: Financial Review
Financial Review Pekka Paalanne CFO
Slide 9: Foreign exchange rates impact
Foreign exchange rates impact Impact on cost of goods sold – Amer a net buyer of USD – 50% of the forthcoming 12 month cash flows normally hedged Consolidation impact Commercial impact – How well are we able to maintain/adjust our prices
Slide 10: Profit and loss statement 2003
Profit and loss statement 2003 2003 2002 Ch % Net sales 1,104.4 1,101.9 EBIT 101.3 103.0 -2 Net financials -8.2 -7.4 EBT 93.1 95.6 Taxes -28.0 -26.5 Net profit 64.7 68.5 ROCE % *) 16.9 18.3 *) Rolling 12 months
Slide 11: Profit and loss statement Q4 / 2003
Profit and loss statement Q4 / 2003 Q4/03 Q4/02 Ch % Net sales 267.6 266.1 1 EBIT 19.0 25.8 -26 Net financials -1.9 -2.2 EBT 17.1 23.6 -28 Taxes -5.2 -6.3 Net profit 11.8 16.7
Slide 12: Net sales 1999-2003 (MEUR)
Net sales 1999-2003 (MEUR) 1250 1086,6 1099,8 1101,9 1104,4 1000 825,7 750 500 250 0 1999 2000 2001 2002 2003
Slide 13: EBIT 1999-2003 (MEUR)
EBIT 1999-2003 (MEUR) 120 98,6 103 101,3 100 94,9 80 58,5 60 40 20 0 1999 2000 2001 2002 2003
Slide 14: Breakdown of net sales 2003
Breakdown of net sales 2003 Ch% in local 2003 2002 Ch% currencies Racquet 210.9 243.9 -14 -2 Golf 158.5 213.3 -26 -16 Team 183.6 203.9 -10 7 Winter Sports 188.5 201.6 -6 -3 Fitness Equipment 177.0 39.5 Sports Instruments 76.6 85.3 -10 -6 Tobacco 109.3 114.4 -4 -4 Total 1,104.4 1,101.9 11
Slide 15: Breakdown of net sales Q4 / 2003
Breakdown of net sales Q4 / 2003 Ch% in local Q4/03 Q4/02 Ch% currencies Racquet 37.8 39.3 -4 4 Golf 22.6 28.5 -21 -17 Team 40.4 41.9 -4 13 Winter Sports 72.0 65.4 10 12 Fitness Equipment 48.4 39.5 Sports Instruments 20.7 23.5 -12 -10 Tobacco 25.7 28.0 -8 -8 Total 267.6 266.1 - 9
Slide 16: Geographic breakdown of net sales 2003
Geographic breakdown of net sales 2003 Ch% in local 2003 2002 Ch% currencies North America 562.7 558.5 1 18 Europe 412.4 405.5 2 3 Japan 49.8 56.2 -11 -5 Asia Pacific 38.4 34.8 10 27 Other 41.1 46.9 -12 8 Total 1,104.4 1,101.9 11
Slide 17: Breakdown of EBIT 2003
Breakdown of EBIT 2003 2003 2002 Ch% Racquet 20.4 25.6 -20 Golf -11.4 7.1 Team 21.1 24.0 -12 Winter Sports 28.3 39.6 -29 Fitness Equipment 26.8 6.3 Sports Instruments 7.5 10.5 -29 Tobacco 9.5 9.2 3 HQ -6.6 -9.2 Group goodwill -14.8 -10.1 Patent settlement 20.5 - Total 101.3 103.0 -2
Slide 18: Breakdown of EBIT Q4 / 2003
Breakdown of EBIT Q4 / 2003 Q4/03 Q4/02 Racquet 1.9 3.2 Golf -8.1 -3.6 Team 3.6 3.2 Winter Sports 16.0 16.6 Fitness Equipment 7.5 6.3 Sports Instruments 1.6 3.7 Tobacco 2.0 1.9 HQ -1.9 -2.1 Group goodwill -3.6 -3.4 Total 19.0 25.8
Slide 19: EPS, 1999-2003 (EUR)
EPS, 1999-2003 (EUR) 3,5 2,9 2,95 3 2,7 2,77 2,5 2 1,72 1,5 1 0,5 0 1999 2000 2001 2002 2003
Slide 20: ROCE, 1999-2003 (%)
ROCE, 1999-2003 (%) 20 18,3 17 16,9 16,1 16 12,1 12 8 4 0 1999 2000 2001 2002 2003
Slide 21: Balance sheet
Balance sheet 31 Dec 2003 31 Dec 2002 Goodwill 266.7 312.1 Fixed assets 172.5 197.7 Inventories 136.9 156.4 Receivables 309.5 308.2 Cash 27.1 33.1 Equity 472.9 473.4 Int. bearing debt 167.7 243.0 - Long term 32.2 48.2 - Short term 135.5 194.8 Other liabilities 272.1 291.1 Total 912.7 1,007.5
Slide 22: Equity ratio and gearing, %
Equity ratio and gearing, % 60 50 40 Eq ratio 30 Gearing 20 10 0 1999 2000 2001 2002 2003 31.12.2003 31.12.2002 EqRatio % 50.5 45.6 Gearing % 31 47
Slide 23: Adoption of IFRS
Adoption of IFRS Amer switching to IFRS when the amanded IAS 22 in force Expected to benefit 2004 results – Goodwill amortization replaced by impairment testing – Lower pension cost due to changes in recognition policies of defined benefit pension plans in the UK and US One-off transitional valuatio
Slide 24: Divisional reviews
Divisional reviews Roger Talermo President and CEO
Slide 25: Winter Sports
Winter Sports Alpine ski sales by volume flat – Average market selling prices declined Sales of cross-country skis up by 17% Purchase of Volant Metron B5: European Ski Award 2004 Net sales and EBIT expected to grow this year* Ch% in local MEUR 2003 2002 Ch% currencies Net sales 188.5 201.6 -6 -3 *In
Slide 26: Winter Sports 2003 net sales
Winter Sports 2003 net sales Other Snowboards 7% 4% Cross-Country Ski Equipment 6% Alpine Ski Equipment 83 %
Slide 27: Sports Instruments
Sports Instruments Wristop computers sales up by 5% Diving instruments down by 6% Focusing on core products – Wristops and diving instruments 64% of net sales – New wristop computers: t6, X9, G3, n3 Net sales and EBIT expected to grow in 2004* Ch% in local MEUR 2003 2002 Ch% currencies Net sales 76.
Slide 28: Suunto wristop computers
LAL AMER SPORTS 56 Currently Seattle x9 t6 SUUNTO
Slide 29: Sports Instruments 2003 net sales
Sports Instruments 2003 net sales Other Wristop 36 % Computers 35 % Diving Instruments 29 %
Slide 30: Racquet Sports
Racquet Sports Global market share in tennis racquets grew to 36% – H2 sales up by 4% Tennis racquet sales declined by 3% Tennis ball sales flat – Market share up to 24% Net sales and EBIT expected to grow in 2004* Ch% in local MEUR 2003 2002 Ch% currencies Net sales 210.9 243.9 -14 -2 *In local cur
Slide 31: Slide 31
Slide 32: Racquet Sports 2003 net sales
Racquet Sports 2003 net sales Other 21 % Tennis Racquets 44 % Footwear 13 % Tennis Balls 22 %
Slide 33: Golf
Golf Sales significantly below target, became loss making – Club sales declined by 14% – Golf ball sales down by 23% Main goal in 2004: return to profitability Ch% in local MEUR 2003 2002 Ch% currencies Net sales 158.5 213.3 -26 -16 EBIT -11.4 7.1
Slide 34: Golf 2003 net sales
Golf 2003 net sales Other Bags and 7% Gloves 12 % Clubs Balls 55 % 26 %
Slide 35: Team Sports
Team Sports Strong performance continues Baseball and softball bat sales up 21% Basketball sales up 10% Purchase of ATEC Focus on markets outside the US Net sales and EBIT expected to grow in 2004* Ch% in local MEUR 2003 2002 Ch% currencies Net sales 183.6 203.9 -10 7 *In local currencies EBIT 21.1
Slide 36: Team Sports 2003 net sales
Team Sports 2003 net sales Other American 16 % Footballs 22 % Base/Softball Bats 10 % Apparel Baseballs and 13 % Gloves 23 % Basketballs 16 %
Slide 37: Fitness equipment
Fitness equipment Record profits in 2003 Integration completed Sales of stationary cycles and treadmills up Purchase of FPI and ClubCom Net sales expected to grow significantly and EBIT also expected to rise in 2004* Ch% in local MEUR 2003 2002* Ch% currencies Net sales 177.0 202.4 -13 3 *In local c
Slide 38: Amer Sports brands
AMER SPORTS wsn SUUNTO
Slide 39: Fitness Equipment 2003 net sales
Fitness Equipment 2003 net sales Home Use 35 % Clubs and Institutions 65 %
Slide 40: Tobacco
Tobacco Net sales down by 4% – Declining market – Growing low price segment Operating profit up by 3% – Lower raw material costs 2003 2002 Ch% Net sales 109.3 114.4 -4 EBIT 9.5 9.2 3
Slide 41: Withdrawing from tobacco business
Withdrawing from tobacco business Amer will withdraw from its tobacco business on 26 March 2004 Consideration to be received from Philip Morris EUR 29 million – Benefits Amer’s Q1/2004 operating profit by EUR 18 million
Slide 42: Outlook for 2004
Outlook for 2004 100% focused sports equipment company Strategy backed up by increasing leisure time, living standards and awareness of the importance of physical and mental wellbeing Sports equipment market expected to grow Amer Sports net sales and EBIT in local currencies expected to grow clearly
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