Zurich (awp) – Sports shoe manufacturer On improved its sales in the third half, but its profitability slowed down. Over nine months, the Zurich group has almost reached its turnover for the whole of 2023. It is revising its annual sales ambitions upwards.
From July to the end of September, net turnover increased by 32.3% to 635.8 million Swiss francs, a gain of more than 30% at constant exchange rates, according to the listed company’s press release. in Zurich published Tuesday. The share of direct sales jumped by half to almost 250 million. Results described as “exceptional” by co-managing director and chief financial officer Martin Hoffmann, cited in the document.
The manager highlighted the showcase role of the Paris Olympic Games last summer, during which On was the official supplier of the Swiss delegation, represented by 66 athletes. “The notoriety of our brand has thus doubled in the United States and tripled in Paris,” assured Mr. Hoffmann on the sidelines of the presentation of the results.
The collaboration with the Berlin e-commerce giant Zalando since the spring has also paid off, according to him. “This allows us to reach a significantly younger audience.” In Switzerland, sales made by 25-30 year olds have doubled.
Revenue from shoe sales increased by more than 32% to 603.7 million Swiss francs. Those of clothing and accessories have also progressed. By region, revenues in North and South America jumped 34.1% to 395.5 million, those in Europe, Middle East and Africa (EMEA) jumped 15.1% to 165.8 million and those in Asia-Pacific by almost 80% to 74.6 million. The brand continued to open points of sale in “major cities”.
In terms of profitability, adjusted operating profit (Ebitda) increased by almost 4% to 120.1 million Swiss francs for a margin improved to 18.9%, after 16.9%, driven in particular by ” the discipline of cost management. Adjusted profit, however, fell by less than a quarter to 50.2 million and net profit by half to 30.5 million.
After nine months, 2023 sales are almost reached
This did not prevent the group from posting net profit over nine months up 43.6% to 152.7 million Swiss francs. Sales during the period increased 27.3% to 1.71 billion, with more than 1 billion made in North and South America. As of September 30, liquidity was more than halved compared to December 31, to 749.0 million.
The turnover and profitability “higher” than expectations according to Mr. Hoffmann at the start of autumn allow On to “significantly raise” the “prospects for the whole of 2024” and to be “confident for the next Christmas season”.
Given the “dynamics of the brand”, we are now expecting annual growth in turnover of at least 32% at constant exchange rate, which corresponds to net sales of at least 2.29 billion francs. Swiss in 2024. In 2023, the group had achieved 1.79 billion sales.
It is banking on “an acceleration in net sales growth excluding currency effects in the fourth quarter”, reflecting a “significant headwind” linked to the strong franc.
Profitability targets must also be exceeded this year. The group is banking on a gross profit margin of around 60.5% and an adjusted EBITDA margin at the high end of the target range of 16.0 to 16.5%.
The brand maintains its medium-term objectives. “The current figures give us the confidence to achieve them,” underlined Mr. Hoffmann. By 2026, turnover must double compared to 2023 to stand at 3.55 billion Swiss francs and the Ebitda margin at 18%.
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