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Amer Sports 2010 results

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					Amer Sports 2010 results
      February 3, 2011
    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.




2
    Content
    •   Year 2010

    •   Q4/2010

    •   Outlook

    •   Strategic progress

    •   Year 2011: year of go to market




3
    2010 - year of solid improvement
    •   Net sales EUR 1,740.4 million (1,533.4), +8% in local currencies
         – Sales increased particularly in Winter Sports Equipment +12%, Footwear
           +26%, and Team Sports +8%
         – Geographically, strongest growth in EMEA +13%
         – Direct to consumer sales +40%
    •   EBIT excluding non-recurring items EUR 107.9 million (48.8)
         – Higher sales volumes and gross margins
    •   Measures taken for a very healthy base to grow, including strategic
        acceleration in marketing spend




4
                                                                  Change % in local currencies
           EBIT more than doubled in 2010 (EUR million)
150                                                          140
                          39.1     41.1
140                                                          130
130                                                          120                                   5.2       5.2
120                                                          110                         8.7                          107.9
110                                        8.6     107.9                      50.4
                 52.5                                        100
100
                                                             90
 90
                                                             80
 80
                                                             70
 70
                                                             60
 60
       48.8                                                         48.8
 50                                                          50

 40                                                          40
 30                                                          30
 20                                                          20
 10                                                          10
  0                                                            0
      1-12/09   Growth   Margin/   OPEX   Other*   1-12/10         1-12/09    W&O        Ball    Fitness     HQ      1-12/10
                          Mix                                                           Sports



       5
                                              *FX translation EUR +6.1 million, other income and expenses EUR +2.5 million
    Investing into the future growth

                       EUR million                    2010*)
                       Top line driven OPEX              9.2
                       Investment OPEX                  15.7
                       Maintenance OPEX                 16.2
                       Total                            41.1



•    Operating expenses EUR +41.1 million in local currencies
      – Investment OPEX increased from R&D investments, costs from accelerated
        strategy execution, marketing and business to consumer expansion
      – Maintenance OPEX increased mainly because of performance related incentives
        and personnel costs


                                                                *) Change % in local currencies
      Strong Financial Position
                                                         EUR
                                                1 100m
                                                                Net Tax Assets
                                                                     78m
• Cash flow back to normalized level            1 000m

                                                 900m
• Gearing unchanged at 0.37 (0.38)                                  Working
                                                 800m               Capital
                                                                     363m
EUR Million                    2010     2009
EBIT                            96.8    43.8     700m                              Equity
Depreciation                    35.8    35.0                                       790m
Other adjustments               -7.5     -0.4    600m               Tangible
                                                                     Assets
Change in W/C                  -18.8   136.7                         143m
Net Financing Expenses         -14.3   -20.9     500m
Net Taxes                      -11.9   -12.6
Cash Flow from Operations       80.1   181.6     400m
Capex                          -39.9   -42.5
                                                 300m              Intangible
Proceeds from sale of assets     9.9      1.4                        Assets
Free Cash Flow (FCF)            50.1   140.5                         501m
                                                 200m
                                                                                  Net Debt
 FCF/Net Profit (target 1X)    0.7X     4.5X                                       295m
                                                 100m
 Net Debt / EBITDA (≤ 3X)      2.2X     3.6X
                                                   0m
                                                               Capital Employed   Financing
    No significant short/mid term financing needs
    175m
           Debt Maturity EUR million
    150m

    125m
                                        Reset date for Hybrid
                                       (EUR 60m) March/2012
    100m

     75m

     50m

     25m

     0m
              2011          2012       2013            2014         2015          2016=>
            Pension Loan       Bond    USD Term Loan       Reset Date / Hybrid      Other


8                                        The average interest rate of loan portfolio: 4.4% p.a.
     Long-term financial targets – status after 2010

                       Target                           Dec 31,      Dec 31,
                                                         2009         2010
Growth          Delivering organic, currency-neutral
                                                           -4%         8.0%
                annual growth of 5%
Profitability   EBIT of at least 10% of net sales         3.2%         6.2%
Cash flow       Annual free cash flow equal to net      C/F of Net   C/F of Net
                profit                                     Profit      Profit
                                                           4.5          0.7
Balance         Year-end Net Debt / EBITDA ratio of 3
sheet           or less                                    3.6          2.2
structure



 9
Fourth quarter 2010
 Good growth in Q4
 •   Net sales EUR 583.4 million (482.8), +14% in local currencies
      – Sales increased particularly in Footwear +71%, Apparel +25%, and Winter Sports
        Equipment +19%
      – Underlying Fitness net sales at previous year’s level
      – Geographically, EMEA +21%, Americas +8% and APAC +3%

 •   EBIT excluding non-recurring items EUR 56.0 million (44.4)
      – Sales volumes increased
      – Gross margin at previous year’s level mainly due to year-end inventory clean-up
      – Operating expenses (increase EUR +18 million) include an accelerated strategic
        spend in marketing and B2C as well as investments in new business structure and
        key recruitments



11
                                                                 Change % in local currencies
      EBIT increased significantly in Q4/2010 (EUR million)
80                                                        80
              29.4     0.6      18.3

70                                                        70
                                                                          18.7      4.9
60                                                        60                                  0.2      2.0
                                        0.1      56.0                                                           56.0

50                                                        50
     44.4                                                       44.4

40                                                        40


30                                                        30


20                                                        20


10                                                        10


0                                                          0
     Q4/09   Growth   Margin/   OPEX   Other*   Q4/10           Q4/09     W&O       Ball    Fitness    HQ       Q4/10
                       Mix                                                         Sports



     12
                                           *FX translation EUR +2.6 million, other income and expenses EUR -2.7 million
Winter and Outdoor in Q4/2010 (Q4/2009)
                                                                       EBIT excluding
 MEUR
                  Net sales                           MEUR
                                                                     non-recurring items
                                                         80
  450                                      416.5
                                                                                                  61.2
  400                                                    60
  350           326.6         329.2                                    36.7        42.5
                                                         40
  300
  250                                                    20
  200
  150                                                    0
  100                                                   -20
   50
    0                                                   -40
                Q4/08         Q4/09       Q4/10                      Q4/08       Q4/09          Q4/10

Net sales +21%
•   Winter Sports Equipment +19%
•   Footwear +71%. Fall/winter deliveries & re-orders very strong.
•   Apparel +25%. Fall/winter deliveries & re-orders very strong.
•   Cycling -3%. OEM sales decreased.
•   Sports Instruments +2%. Outdoor products continued to grow.

EBIT excluding non-recurring items EUR 61.2 million (42.5)
•   Sales growth impact EUR +29 million
•   Higher gross margins, impact EUR +5 million
•   Increased OPEX, impact EUR -18 million, mainly following the sales growth
                                                                              Change % in local currencies
Ball Sports Q4/2010 (Q4/2009)
 MEUR
                   Net sales                                          EBIT excluding
  180
                                                      MEUR
                                                      20
                                                                    non-recurring items
  160
  140                                                 15
  120          110.0                        107.3
                                94.7                  10
  100
  80
                                                       5              3.4
  60                                                                                   2.2
  40
                                                       0
  20
   0
                                                                                                        -2.7
                                                       -5
               Q4/08           Q4/09        Q4/10                    Q4/08           Q4/09             Q4/10


Net sales +4%
•   Racquet Sports -1%. Sales of performance rackets increased.
•   Team Sports +7%, driven by bats and basketballs.
•   Golf net sales +12%. In 2010, Golf EBIT improved but still negative.

EBIT excluding non-recurring items EUR -2.7 million (2.2)
•   Sales growth impact EUR +1.7 million, lower gross margins impact EUR -1.7 million
•   Increased OPEX mainly in marketing, impact EUR -2.6 million
•   Q4/2009 included a positive amount of EUR 3.5 million (revaluation of pension liabilities)
                                                                                Change % in local currencies
Fitness Q4/2010 (Q4/2009)
                    Net sales                        MEUR
                                                                   EBIT excluding
MEUR
70                                                     6
                                                                 non-recurring items
                 58.7           58.9       59.6                                  4.5            4.3
60
                                                       4
50
                                                       2
40
                                                       0
30
20                                                     -2
                                                                  -2.3
10                                                     -4
    0                                                  -6
                Q4/08           Q4/09     Q4/10                   Q4/08         Q4/09          Q4/10


Underlying net sales was at previous year’s level
•       EUR 4.5 million adjustment in revenue recognition of sales of extended warranties
•       Commercial business (clubs and institutions) started to show early signs of recovery
        in 2010
•       Sales of premium equipment for home use continued to be sluggish

EBIT excluding non-recurring items EUR 4.3 million (4.5)

                                                                          Change % in local currencies
 Outlook and guidance 2011
 •   Amer Sports strategic development programs are expected to continue to
     contribute positively to the Group performance in 2011. The sporting goods
     market is estimated to continue the recovery started in 2010, with regional and
     sports specific differences. In Footwear and Apparel, spring/summer pre-orders
     are indicating that the 2010 strong momentum will continue.

 •   Overall, Amer Sports expects its 2011 net sales to increase from 2010 and EBIT
     to improve.




16
 Progress in the key strategic priorities
 •   Clear portfolio roles and synergies, integrated
     company
      –   Category-based operation well under way
      –   All BA’s and Regions with improvement targets, programs and KPIs
 •   Grow faster in softgoods
      –   Organization at high level in place, growth accelerated
      –   Over 20% of 2010 net sales came from softgoods
 •   Win with consumers
      –   Consumer centric product creation process in place
      –   Group marketing development established
 •   Win in go-to-market
      –   Regional distribution expansion programs in place
      –   Capability development ongoing
 •   Operational excellence
      –   Customer service and complexity reduction
      –   Industrial re-engineering program in WSE



17
 Prioritized, sequenced program                                Profitability, growth
                                                               acceleration
                               Build critical capabilities,
                               allocate resources and
                                                                       ~2013-
                               reignite growth
                                                                 • Continued growth in
Clarify future direction &               ~2011...2012              categories and countries
deliver the year
                                                                      • Big brands,
                               • Build capabilities:                    big countries,
           ~2010
                                 • Softgoods                            big categories
                                 • Category based
• Clarify priorities, set          development
  direction                      • Go-to-market

• Continue to drive profit     • Drive organic growth:
  recovery, deliver the year     softgoods, Russia, China,
                                 BtoC, etc.
• Continue the work on
  operational effiency &       • Operational excellence, WSE
  margins improvement            efficiency & profitability


18
 2011 is the year of go-to-market
 •   Improving customer service
 •   Driving commercial expansion
 •   Gross margin
 •   Operating expenses




19
Appendix
Gross profit margin up by 2 points in 2010

EUR million                              Q4/10      Q4/09      Ch %       Ch %*         2010        2009     Ch %   Ch %*
Net sales                                583.4       482.8         21          14 1,740.4 1,533.4              13            8
Gross profit                             237.8       196.5         21          14      742.0       620.0       20           14
Gross profit, % of net sales               40.8       40.7                               42.6        40.4
EBIT excluding non-
recurring items                            56.0       44.4         26          19      107.9         48.8     121           97
EBIT % excluding non-
recurring items                              9.6        9.2                               6.2          3.2
Non-recurring items**)                      -7.6       -5.0                             -11.1         -5.0
EBIT total                                 48.4       39.4         23          15        96.8        43.8     121           94
Net cash flow after
investing activities                       57.7      129.2                               50.1      140.5

 *) Change % in local currencies
 **) Non-recurring items are exceptional transactions that are not related to normal business operations.
 The most common non-recurring items are capital gains, exceptional write-downs, provisions for planned restructuring and
 penalties. Non-recurring items are normally specified individually if they have material impact on EBIT.

22
      Sales development by region in Q4/2010
                       Americas               EMEA        Asia Pacific                   Total
                   Q4/10 Ch, YoY        Q4/10 Ch, YoY   Q4/10 Ch, YoY         Q4/10         Ch, YoY
                   MEUR % %, LC         MEUR    % %, LC MEUR % %, LC          MEUR           % %, LC
Winter and Outdoor   70.2 38     24      294.5 25    23  51.8 22        7      416.5         27     21
Ball Sports          72.3 17      8       18.5   2    0  16.5 10       -5      107.3         13      4
Fitness              41.6 -2    -10       12.8   8    4   5.2 11       -1       59.6           1    -6
Total               184.1 19      8      325.8 22    21  73.5 18        3      583.4         21     14



 Winter and Outdoor          Ball Sports                   Fitness                Total
        Asia Americas          Asia                         Asia                Asia
       Pacific                          Americas           Pacific Americas    Pacific     Americas
               17%            Pacific
        12%                               68%               9%       70%        13%          31%
                               15%
                                                   EMEA
                         EMEA                       21 %
         416.5            17%     107.3                      59.6                 583.4

         EMEA                                                                 EMEA
          71 %                                                                 56%
      Sales development by region in 2010
                       Americas                 EMEA         Asia Pacific                 Total
                     2010 Ch, YoY           2010 Ch, YoY    2010 Ch, YoY          2010       Ch, YoY
                   MEUR % %, LC           MEUR    % %, LC MEUR % %, LC           MEUR         % %, LC
Winter and Outdoor 211.3 17       6        687.2 17     15 116.5 21        8    1,015.0       18     12
Ball Sports         334.4 12      6        114.0   2     0  72.2   9      -3      520.6         9     3
Fitness             142.2  1     -4         44.5 17     14  18.1 18        9      204.8         6     1
Total               687.9 11      4        845.7 15     13 206.8 16        4    1,740.4       13      8


 Winter and Outdoor            Ball Sports                   Fitness                    Total

      Asia                      Asia                          Asia                   Asia
     Pacific Americas          Pacific   Americas            Pacific Americas       Pacific   Americas
      11%      21%              14%        64%                 9%      69%                      40%
                                                                                     12%
                                                      EMEA
                                                       22%
                        EMEA
       1,015.0           22%       520.6                       204.8                    1,740.4

                                                                                 EMEA
      EMEA                                                                        48%
       68%
  Quarterly sales and EBIT breakdown
                      Q4/     Q3/     Q2/     Q1/     Q4/     Q3/     Q2/     Q1/
SALES                2010    2010    2010    2010    2009    2009    2009    2009      2010      2009
Winter and Outdoor   416.5   300.3   116.5   181.7   329.2   262.4   106.6   164.4   1,015.0    862.6
Ball Sports          107.3   114.0   153.9   145.4    94.7   103.4   135.7   142.9    520.6     476.7
Fitness               59.6    52.6    47.1    45.5    58.9    44.8    42.4    48.0    204.8     194.1
Total                583.4   466.9   317.5   372.6   482.8   410.6   284.7   355.3   1,740.4   1,533.4


                      Q4/     Q3/     Q2/     Q1/     Q4/     Q3/     Q2/     Q1/
EBIT                 2010    2010    2010    2010    2009    2009    2009    2009      2010      2009
Winter and Outdoor    51.2    58.2   -24.2     1.7    42.5    44.1   -29.2   -10.9     86.9      46.5
Ball Sports           -5.4     3.5    17.0    14.4     2.2     2.4     7.4    11.5     29.5      23.5
Fitness                2.0     2.8    -3.7    -0.7    -0.5    -1.4    -2.2    -3.4       0.4      -7.5
Headquarters           0.6    -8.7    -6.0    -5.9    -4.8    -4.4    -5.4    -4.1     -20.0     -18.7
Total                 48.4    55.8   -16.9     9.5    39.4    40.7   -29.4    -6.9     96.8      43.8




 25
Quarterly sales by region

                Q4/     Q3/    Q2/     Q1/     Q4/     Q3/     Q2/     Q1/
SALES          2010    2010   2010    2010    2009    2009    2009    2009      2010      2009
Americas       184.1 192.3    153.2   158.3   154.6   163.6   138.5   163.8    687.9     620.5
EMEA           325.8 226.9    120.8   172.2   266.1   204.0   108.4   156.5    845.7     735.0
Asia Pacific    73.5   47.7    43.5    42.1    62.1    43.0    37.8    35.0    206.8     177.9
Total          583.4 466.9    317.5   372.6   482.8   410.6   284.7   355.3   1,740.4   1,533.4




26
Business area net sales
                           Q4/     Q4/    Ch   Ch                           Ch        Ch
MEUR                      2010    2009    %    %*)     2010      2009        %        %*)
Winter Sports Equipment   252.8   203.7   24   19     438.4     371.7        18        12
Apparel                    63.0    47.0   34   25     156.6     134.9        16         6
Footwear                   47.3    26.7   76   71     219.6     169.0        30        26
Cycling                    26.8    27.1   -1    -3    106.4     100.4         6         5
Sports Instruments         26.6    24.6    8    2      94.0      85.8        10         4
Racquet Sports             44.0    40.9    8    -1    232.5     222.7         4         -1
Team Sports                51.0    43.6   17    7     212.1     187.3        13         8
Golf                       12.3    10.2   21   12      76.0      66.7        14         7
Fitness                    59.6    58.9    1    -6    204.8     194.1         6         1
Total                     583.4   482.8   21   14    1,740.4   1,533.4       13         8


27
                                                                    *) Change % in local currencies
 Balance sheet
     MEUR                                                       Dec 31, 2010   Dec 31, 2009
     Goodwill and other intangible non-current assets                 500.9           483.7
     Tangible non-current assets and other non-current assets         240.7           209.3
     Inventories and work in progress                                 302.1           234.6
     Receivables                                                      525.4           475.4
     Cash and cash equivalents                                          84.7          121.6


     Shareholders’ equity*)                                           790.2           735.3
     Interest bearing liabilities                                     379.5           404.1
     - Long-term                                                      278.7           282.8
     - Current                                                        100.8           121.3
     Other liabilities                                                484.1           385.2
     Total                                                           1,653.8        1,524.6

28
                                                                                   *) Including hybrid bond
 Contact information
 •   Heikki Takala, President and CEO, tel. +358 9 7257 8210
 •   Jussi Siitonen, CFO, tel. +358 9 7257 8240
 •   Päivi Antola, Director, IR and Financial Communications, tel. +358 9 7257 8233


     www.amersports.com




29

				
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