Amer Sports, Inc. · NYSE:AS
Amer Sports — Investor Day (August 2013)
22 slides from Amer Sports's investor day presentation, Aug 29, 2013
Slide 1: Driving Operating Leverage Improvement
DRIVING OPERATING LEVERAGE IMPROVEMENT August 29, 2013 // Jussi Siitonen, CFO 1
Slide 2: Contents
Contents 1. Towards improved operating leverage 2. Financial strength to enable future growth 3. Short-term performance review 4. We continue improving 2 Amer Sports CMD 2013
Slide 3: Financial Targets: Status
Financial Targets: Status TARGET 2010 2011 2012 2013 Actions 2014-2015 Organic FX-neutral 5% • Drive further growth from strategic Growth 8% 9% 5% 5% annual growth investments EBIT of at least 10% of • Focus on operating leverage Profitability 6.2% 7.2% 6.6% net sales Annual free cash flow • Enable
Slide 4: Towards improved operating leverage
Towards improved operating leverage
Slide 5: Building Blocks for improved operating leverage
Building Blocks for improved operating leverage Gross Margin to 45% (43.6%) OPEX to 35% (37.3%) • Mix improvement • Selective Investments • SG/HG • Only against proven growth building • B2C / Wholesale blocks • Emerging Mkts / ROW • Further limit/freeze overhead growth in slow growth businesses • Pr
Slide 6: Strategic growth building blocks in place
Strategic growth building blocks in place Category Mix Channel Mix Market Mix CAGR >7% 2% 4% 5% B2C Emerging 9% Mkts 20% SG 26% WSE 25% 33% 13% Apparel 9% Footwear 13% 15% WHSL 98% Cycling 6% 6% 96% ROW 95% 91% Sports Instr 5% 5% HG 74% 67% Individual BS 18% 15% 11% Team 12% Fitness 12% 14% 2010 201
Slide 7: Broad-based Gross Margin improvement
Broad-based Gross Margin improvement Gross Profit CAGR (%) % 2010-2013 30 Gross Profit Growth > Net Sales Growth • Gross Profit growth outperformed Apparel Net Sales growth (=GM 25 improvement) in most of the businesses 20 • Improvement driven by Fitness • Investments in distribution 15 • Platform m
Slide 8: OPEX Growth driven by Investments
OPEX Growth driven by Investments OPEX CAGR (%) % 2010-2013 30 OPEX Growth > Net Sales Growth • Linearity of OPEX and Net Sales growth driven by investments 25 Apparel • Distribution scale effect starts 20 mitigating related OPEX growth Footwear • Incremental OPEX growth vs. 15 topline growth gradua
Slide 9: OPEX growth follows our investment model
OPEX growth follows our investment model EURm 60 50 40 30 20 Topline Driven 10 Investments Maintenance 0 2010 2011 H1-2012 2012 H1-2013 9 Amer Sports CMD 2013
Slide 10: Financial strength to enable future growth
Financial strength to enable future growth
Slide 11: Maintain solid balance sheet for financing flexibility
Maintain solid balance sheet for financing flexibility • Balance sheet is strong and gives financing flexibility to meet our short and long-term financial targets. Intangibles 42% 64% Equity • Financing flexibility enables also current high seasonality in Free Cash Flow Fixed Assets 14% • Continuous
Slide 12: Long-Term Cash Flow target unchanged
Long-Term Cash Flow target unchanged 700 • Long-Term Cash Flow target EURm unchanged: Free Cash Flow 600 (“FCF”) equal to Net Profit Receivables 500 • Strong growth in Softgoods associated with seasonality: 400 Inventories FCF remained below Net Profit in 2012 300 100 FCF 0 Net Profit -100 Jan Feb M
Slide 13: Refinancing needs well covered
Refinancing needs well covered • Cash EUR 96.9m and unused 175m committed facilities EUR 240m 150m (June 30, 2013) 125m • Commercial paper program EUR 500m, of which EUR 100m 78.0m issued 75m • Scheduled long-term payments 50m in 2013 EUR 37.1m and in 2014 EUR 62.7m 25m 0m • Average interest rate of
Slide 14: Short-term performance review
Short-term performance review
Slide 15: Logic for P&L seasonality
Logic for P&L seasonality 0% 20% 40% 60% 80% 100% Net Sales OPEX Q1 Q2 Q3 Q4 • Net Sales and Gross Profit are typically H2 biased due to fall/winter pre-order deliveries (H1/H2: approx.40/60) • Annual OPEX is quite evenly split to all four quarters • OPEX growth is typically more H1 biased due to se
Slide 16: H2 quarterly split highly depended on Q3/Q4 break-point deliveries
H2 quarterly split highly depended on Q3/Q4 break-point deliveries Weekly Sales, EURm Q1 Q2 Q3 Q4 2012 2011 w4 w8 w12 w16 w20 w24 w28 w32 w36 w40 w44 w48 w52 16 Amer Sports CMD 2013
Slide 17: Restructuring is proceeding as planned
Restructuring is proceeding as planned Target (Q4/2012) • Drive further scale and synergies and cost efficiencies, as well as to sustain growth through resource allocation especially into softgoods and expansion markets and channels • EUR 20m OPEX savings and 250 HC reduction by end of 2014 Status (
Slide 18: We continue improving
We continue improving
Slide 19: We continue driving value creation
We continue driving value creation Capital Turnover Return on Capital Employed 2008–2013E 4.0X 3.0X 2012 2013E 11% 13% 2.0X Cost of Capital ~12%* 1.0X 2009 2008 2010 2011 5% 7% 10% 11% 0.0X EBIT 0% 5% 10 % Margin (excl NRI) YEAR ROCE% *) pre-tax 19 Amer Sports CMD 2013
Slide 20: Building Blocks in place for profitability improvement
Building Blocks in place for profitability improvement • Focus on profitable growth -> further operating leverage • No financing restrictions to meet our short and long-term financial targets • Continuous focus on working capital complexity reduction 20 Amer Sports CMD 2013
Slide 21: Amer Sports: Performance products for active sports
LA AMER SPORTS PERFORMANCE PRODUCTS FOR ACTIVE SPORTS S| BS ; nm satomon Wioon. A ATOMIC ARCTERYX Cmavic) SUUNTO MPRECOR
Slide 22: www.amersports.com
www.amersports.com Disclaimer Statements in this presentation, which are not historical facts, such as expectations, anticipations, beliefs and estimates, are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve