Amer Sports, Inc.

Good morning. My name is Krista and I'll be your conference operator today. At this time, I would like to welcome everyone to the OMER Sports fourth quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. I would now like to turn the conference over to Omar Saad, Vice President of Finance and Investor Relations. Omar, you may begin your conference.

Hi, everyone. Thanks for joining Omersport's fourth quarter and fiscal year 2023 earnings call, which is our first earnings call as a public company on the New York Stock Exchange. Earlier this morning, we announced our fourth quarter and full year 2023 results. The release can be found on our IR website, investors.omersports.com. A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the Safe Harbor Statement in our earnings release and SEC filings. We will also discuss certain non-IFRS financial measures. Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to the most comparable IFRS measures. We will begin with prepared remarks from our CEO, James Eng, and CFO, Andrew Page, followed by a Q&A session until 9 a.m. Eastern. Our three segment leaders will also join for the Q&A portion of the call, CEO of Arc'teryx, Stuart Hazelden, CEO of Salomon, Franco Pobliato, and CEO of Wilson, Joe Doody. With that, I'll turn the call over to James.

Thanks, Omar. I'm very proud to lead Amerisports' first earning call as a New York Stock Exchange-listed company. Amerisports may be new to the U.S. equity markets, but we come from a long and rich heritage in sports and outdoor activities. Our brands are loved and trusted by millions worldwide. Whether used by elite competitors, weekend worries, or aspirational enthusiasts, Our equipment, footwear, and apparel delivers the best technical quality and performance. We are excited about the opportunity to drive growth across our three segments, technical apparel, outdoor performance, and the ball and the racket sports. Although 2023 was another strong year of sales growth and the margin expansion for Amer Sports, we are still in the early stage of our profitable growth infection following our transformation to a decentralized brand direct operating model in 2020. This transformation has been critical to unlock the value of our portfolio led by our high-growth flagship brand, Acterix. Several factors give us confidence for the future. First, we operate a unique portfolio of premium outdoor and sports brands, each positioned at the pinnacle of their respected market. Second, our brands have high engagement and satisfaction with consumers around the world, but are still relatively small players in the large global outdoor and sports markets. Third, the premium segment of the outdoor sports markets remains healthy and growing, especially in Great China and America, where we continue to outperform peers. Fourth, our highest margin brands, regions, channels, and categories are growing the fastest, and we have assembled a strong and experienced management team that's energized and motivated to drive value creation for our stakeholders. Before I review the performance of our brand segments, I want to zero in on what I see as our path forward. First, we believe Actelix is a breakout growth story with unprecedented growth and the profitability for the outdoor industry. It's truly charting new territory with its disruptive DTC models and a very strong competitive position. The growth and the profitability of this franchise will fuel our Eimer Sports for years to come. Second, Solomon Wilson and all our other brands are very strong, have long-standing authentic heritage, premium position with their respective segments, and amazing products. Although they are early in their growth infection, we are building very strong foundation for future growth for these brands across categories and the key geographies. Third, we believe our unique expertise in Great China and our success embedding top talent in our brand teams in this important growth region give us a clear competitive advantage across all brands in our portfolio. Before I turn it over to Andrew to discuss our company results, margins, the balance sheet, and the guidance, I will provide a review of our three brand segments. First, technical apparel. Led by Acterix, revenues grow 26% to $550 million in Q4, driven by 42% direct-to-consumer growth, including a 33% omnicom. This was partially offset by a 5% decline in wholesale, which was expected and primarily related to the supply chain-related sales shift from Q3 into Q4 in 2022, which created a more difficult comparison. For the full year 2023, technical apparel grew 45%, driven by 57% DTC growth, including a 55% Omnicom. Acterys continues to experience very strong brand momentum across all regions, channels, consumer segments, and the product categories. And in both stores and online, the DTC channel experienced strong traffic and the conversion trends. The brand achieved key milestones in its DTC evolution in 2023, including premium flagship openings in Osaka, Beijing, Toronto, and the most recently, a 20,000 square foot store in Shanghai that's taking the brand's retail presentation to new heights. Acterix is also doubling down on innovation, including a significant new footwear launch with the first fully in-house designed and developed footwear for the mountain athlete. Acterix continues to drive deep relationships in mountain communities through global academies and host more than 25,000 participants at Whistler, St. Anton, Chamonix, Squamish, and the Yangshuo Academies across 2023. Originally, technical apparel grows 30% in both Great China and America. Technical apparel grew more than 40% in APEC, where we are evolving the operating model to accelerate DTC expansion. Importantly, In Q4, Acterys also posted outside growth in key opportunity areas, including women's footwear and hard goods and accessories. Turning to outdoor performance, revenue growth 2% in Q4 to $523 million, driven by strong top and bottom line performance in our winter sports equipment franchise, partially offset by an expected deceleration in Solomon footwear in the wholesale channel. DTC experienced strong growth, while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above. Originally, Great China and APEC experienced healthy increases, partially offset by declines in the America and the EMEA. Although wholesalers in the Americas and the EMEA remain cautious with pre-orders as they focus on maintaining lean inventories and rely more on repression orders, Salomon continues to enjoy strong demand at retail. The brand performed well in both own retail and the partner stores, including DTC up a very strong double-digit with all regions and the format showing sorry gains. There continue to be signs that Salomon forward is generating strong brand heat in key sneak communities. Our new sports style line was ranked as the number one growth brand on StockX last year. Although worth noting is the strong winter sports equipment performance in Q4, particularly in APEC, WeChina, and the EMEA, aided by favorable weather conditions, strong resort bookings, and timely inventory deliveries. For the full year 2023, outdoor performance grew 18%, growing in all regions, driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC led growth at the plus 42%. Key brand highlights from 2023 include, number one, Salomon becoming an official partner for the 2026 Milan Cortina Olympic Games, including supplying 25,000 volunteers and poached bears with Salomon apparel, footwear, and accessories. Second, the launch of Salomon's first low-learning super shoe, the Phantasm II, which sold out in 30 days. And the third, the successful Salomon athlete, Courtney Dover, the best cherry runner on the planet, and the first human even to win the Western States 100, the Hard Rock 100, and the UTMB in a single season. And the 2024 start with a splash when Solomon launches Welcome Back to Earth brand campaign during the Super Bowl. In winter sports equipment, Atomic Rainforest is global leadership in alpine skis and achieved number two position in the global ski boot market. Our star athlete, Mikaela Shuffrin, had an exceptional year, breaking the 24-year-old record for most World Cup victories of all time, and now has 93 wins. Moving to ball and racket, where revenues declined 3% to $242 million in Q4. Ball and racket had promising growth in Yimei and Great China. This growth wasn't enough to offset declined in its largest channel, U.S. wholesale. From a category perspective, the growth in sportswear, golf, and the ball wasn't enough to offset weakness in baseball and the racket. The U.S. sports equipment market was significantly hampered in 2023 due to elevated inventories across the industry that sped over from 2022. In Q4, we made the strategic decision to take the promotional actions necessary for ball and racket to begin 2024 with healthier inventory levels. Wilson continues to be a market share leader in its core business of tennis, baseball, and balls, and we remain confident in the brand's long-term outlook. Some of Wilson's key highlights over the past year include launching the first-ever 3D printed basketball which debuted at the 2023 NBA All-Star Game contest and expanding the brand's retail footprint with new Wilson stores in Santa Monica, Minneapolis Mall of America, Garden State Plaza, the Galleries in Houston, as well as additional stores in China and Korea. Wilson's strength in tennis continues as 32% of the competitors at the recent Australian Open compete using a Western racket, making us the number one racket at the tournament. For the full year 2023, ball and the racket grow 7%, led by double-digit gains in DTC, Great China, and APAC. With that, I will turn it over to Andrew to discuss our company result and outlook.