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Delivering mid-term targets and accelerating beyond Amer Sports CMD 2014 // Jussi Siitonen, CFO

Contents

• Current performance drivers and P&L logic

• Delivering mid-term targets

• Restructuring as an enabler for future acceleration

• Summary

Amer Sports CMD 2014 2

Current performance drivers and P&L logic

Logic behind full year growth guidance

Full year growth guidance (≥ 5%) consists of:

• H1 (40% of FY sales) growth 5%

• H2 (60% of FY sales)

– Winter Sports Equipment and softgoods pre-orders, together accounting for

~50% of H2 sales, support the outlook

– Sports Instruments, Cycling and Fitness all have a robust pipeline for H2

– No growth expected in Ball Sports which is now under restructuring


Historical OPEX pattern supports full year EBIT outlook

• Annual OPEX is

relatively evenly split

across the quarters

whilst sales are H2

biased (60% in H2)

• Sell-in OPEX for

pre-orders typically

6-12 months in

advance vs. related

topline


0

50

25

Q4

26%

Q3

26%

Q2

23%

Q1

25%

Historical OPEX,

% of sales

% of

FY OPEX

Full year OPEX, % of sales

Reminder of seasonality: H2 quarterly split depends on delivery peak-week


0

20

40

60

80

100

120

W27 W28 W29 W30 W31 W32 W33 W34 W35 W36 W37 W38 W39 W40 W41 W42 W43 W44 W45 W46 W47 W48 W49 W50 W51 W52

H2 weekly sales 2011-2013, EUR million

2013 2012 2011

Average

H2 week

Q3 Q4

2014 specific topics

1) Impact of currencies

2) Russia and Latin America


Strengthening USD benefits us short-term

• Strengthening USD has a positive short-term

EBIT impact due to translation difference

(60% of Group EBIT comes from USD based

entities)

• Long-term impacts of the strengthening USD

are negative as we are a net buyer of the USD

due to sourcing operations (transaction

difference)

• Hedging tenors are up to 24 months. 92% of

2014 USD flows hedged at 1.34, 90% of 2015

and 50% of 2016 flows at 1.37


-114

-96

-63

-52

-26

-85

-91

-50

-36

-33

-21

639 USD

SEK

GBP

NOK

CAD

RUB

CHF

856

Hedges (EURm)

Net cash flow (EURm)

Net Seller Net Buyer

Current visibility on Russia and Latin America included in the full year guidance

• Russia and Latin America have a

significant adverse impact on Group

topline and Gross Margin

• We seek to protect profitability and cash

flow, however net impact negative

• For long-term, Russia and Latin America

remain strategic growth areas


Facts: Russia

• Approx. 3% of Group sales

• Max 5% of any BA’s sales

• 75% of Russian sales from Winter

Sports Equipment and Softgoods

Facts: Latin America

• Approx. 3% of Group sales

• >80% of Latin American sales

from Softgoods and Ball Sports

• Max 5% of any BA’s sales

Delivering mid-term targets

Current performance and bridge to 2016


2013 vs. 2009 2013 2016 target

Net sales +7.5% CAGR 2,136 MEUR ~2,500 MEUR

Gross margin Up 4.0pp 43.6% 45%

OPEX-% Down 1.0pp 37.0% 35%

EBIT% Up 4.4pp 7.3% 10%

Plans in place for portfolio performance improvement

• Roughly 50% of the Group portfolio is at or above target profitability. Focus: accelerate growth

• The other 50% of the portfolio:

1. Ball Sports

– First fix margins, then re-ignite profitable growth

2. Apparel

– Strong growth with increasing benefits from scale

– Gross Margin improvement continues

3. Winter Sports Equipment

– Lower break-even points well achieved, we continue driving appropriate OPEX scale

– Targeted investment into chosen growth areas


Softgoods and Ball Sports are primary drivers for profitability improvement

1.The biggest part of our profitability

improvement comes from growth,

Apparel and Footwear being the biggest

growth drivers

2.Other significant contributor is Gross

Margin improvement, driven especially

by Ball Sports

3.Scale and synergies allow further OPEX

efficiencies


OPEX GM EBIT

2014E

Growth EBIT

2016

≈10%

Gross Profit

OPEX growth is trending down as several platform investments are getting completed


21

32

12

21

5

8

10

10

20

6

1 0

311

30m

10m

20m

30m

40m

50m

60m

Investments

Maintenance

32

H1-2012

23

2012

53

14

H1-2014

Topline Driven

41

2013 H1-2013

EUR

Funding is not a barrier for growth

• Net debt 455 MEUR

(June 30, 2014)

• Good liquidity: cash 87 MEUR,

unused committed facilities 240

MEUR (June 30, 2014)

• Scheduled long-term debt

payments 6 MEUR in 2014 and

156 MEUR in 2015

• Use of cash: ensure organic

growth acceleration, acquisitions,

share buy-backs / dividends


0m

50m

100m

150m

200m

250m

Other Commercial Papers Pension Loan Bank loans Bonds

EUR

2014 2015 2016 2017 2018->

Restructuring as a further enabler for acceleration

Reminder: 2012 restructuring


Annual cost saving of 20 MEUR once fully

executed by the end of 2014, focus on:

• Further reducing weather dependency in

Winter Sports Equipment through

reduction of fixed operating costs

• Driving further scale and synergies and

decreasing complexity and duplication in

all BAs, regions, functions and platforms

• Resource allocation to support growth in

softgoods as well as expansion markets

and channels

• WSE 2014 topline down, EBIT

significantly up vs. 2012 baseline.

• 200 headcount resource fluidity:

invested back in growth categories and

Go to Market

• We have now completed the execution

of the plan

Targets Results by June 2014

Context for the new restructuring


• Finance Shared Service Center: 80% of EMEA completed,

acceleration needed for Americas

• Old legacy structures still to be removed

• Still some non-performing assets to be written down

• Slow growth (09-13 CAGR 2%)

• Negative trend in gross margin (13 vs. 09 -0.5pp)

• Too many underperforming product lines and distribution points

• On-going Go to Market integration; further growth potential

exists with acceleration

• Complete system and warehouse integration

Ball Sports

Functions &

underperforming

assets

Integration

acceleration in

Go to Market

Securing mid-term targets and accelerating profitable growth after the 2016 milestone

I. Ball Sports:

• First fix structural profitability (Gross Margins), then reignite

profitable growth

II. Resource fluidity (OPEX):

• Accelerate the core: Softgoods, new pockets of growth in

Equipment, core markets, B2C

• Free up resources for acceleration in new areas where we

are underfunded vs. opportunity (e.g. digital)


Restructuring: high-level financial impacts

• Focus on enabling renewal for long-term acceleration, not to cut OPEX

for short term profit improvement

– Restructuring payout built into the long-term plans

• Restructuring expenses of 60 MEUR will be recognized mostly in

H2/2014, ~1/3 directly related to Ball Sports

– Cash cost of 25 MEUR relates to termination of employee and lease

contracts

• Ball Sports mid-term EBIT margin improvement will contribute to the

Group achieving its targets

• Termination of underperforming product lines will improve working capital

efficiency


Restructuring will further improve our Asset efficiency


Intangible Assets

1,175

487

169

417

102 Net Tax Assets

Working Capital

Capital

Employed

(MEUR)

Fixed Assets

720

455

3.0X

0.0X

1.0X

2.0X

4.0X

1.9X

Fitness

19%

Winter Sports

Equipment

27%

Ball Sports

25% Apparel&

Footwear

21%

Cycling

5%

Sports

Instruments

4%

Capital turnover

Share of capital

employed

Asset efficiency

through W/C

improvement and

faster growth in

high asset

turnover

categories

Accelerating beyond 2016

Logic in the prioritized acceleration beyond 2016


Objectives

• Faster growth

• Higher profitability

• Improved asset efficiency

Directional building blocks

• Softgoods 50% of sales

• Selected Equipment acceleration

• B2C 10+% of sales

• Digital acceleration

Potential

• EBIT margin 10+%

• Asset turnover >2X

• ROCE >20%

Summary

Deliver mid-term targets and accelerate

• Full year guidance remains unchanged

• Financial targets are intact

– Glidepath and building blocks in place to deliver mid-term 10% EBIT

• Restructuring will free up funds and resources for acceleration

• Acceleration is designed to transform Amer Sports towards faster growth,

higher profitability, better asset efficiency


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 risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. Amer Sports assumes no responsibility to update any of the forward-looking statements contained herein. No representation or warranty, express or implied, is made or given by or on behalf of Amer Sports or its employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation.

www.amersports.com


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