Acushnet Holdings Corp Third Quarter 2016 Results December 8, 2016
Acushnet Holdings Corp Third Quarter 2016 Results Tony Takazawa Vice President, IR
Disclaimers FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements that reflect our current views with respect to, among other things, our operations and financial performance. These forward-looking statements are included throughout this presentation and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. We use words like “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable” and similar terms and phrases to identify forward -looking statements in this presentation. The forward-looking statements contained in this presentation are based on management’s current expectations and are subject to uncertainty and changes in circumstances. We cannot assure you that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this presentation or in the section entitled “Risk Factors” in our Prospectus dated October 27, 2016 and filed with the SEC pursuant to Rule 424(b). Any forward-looking statement in this presentation speaks only as of the date of this presentation. Acushnet undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws. NON-GAAP FINANCIAL MEASURES This presentation includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) such as Adjusted EBITDA and net sales in constant currency. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income or net sales or other measures under GAAP. You should be aware that the Company’s presentation of these measures may not be comparable to similarly-titled measures used by other companies. For a reconciliation of these measures to the most comparable GAAP measures, we refer you to the earnings release that we have made available on our website (www.acushnetholdingscorp.com) in connection with this presentation. For further information, please see our Prospectus dated October 27, 2016 and filed with the SEC pursuant to Rule 424(b) and our periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934 which are available at the SEC’s website (www.sec.gov). Copies of this presentation and the accompanying webcast are publicly available on our website (www.acushnetholdingscorp.com). This presentation should be read with the accompanying webcast and related earnings release. 3
Acushnet Holdings Corp Third Quarter 2016 Results Wally Uihlein President and CEO
Acushnet Today Authentic and enduring performance golf Golf’s Leading Performance Equipment Brand equipment company Longest running success story in golf commercial space Steward of some of the most recognized brands in golf: - the #1 ball in golf and Golf’s Symbol of Excellence - the #1 shoe and #1 glove in golf Focused on the industry’s dedicated golfer and the preferred trade partners who serve them Leading Pyramid of Influence usage and validation Possesses a differentiated and proven One of Golf’s Leading Performance Wearable Brands operating model: Commitment to Perpetual Innovation World Class Operations Platform Unrivaled Route to Market Robust Golfer Experience and Connection Attractive long-term, total return company 5
Acushnet Today Key Statistics 2015 Revenue Mix – $1,503MM $1.5Bn in 2015 revenue By Product Group By Operating Segment $215MM in 2015 Adjusted EBITDA (1) Other 2015 revenue by brand Golf Gear Gear 2% Titleist – 72% of revenue ― 9% 9% ― FootJoy – 28% of revenue Balls 36% Balanced portfolio of consumables FJ Golf 30% Golf Wear 28% Wear and durables Golf 61% Revenue diversification across geographies Equipment 26% Leading positions in all major product categories of professional golf Clubs 5,000+ associates worldwide (2) By Region 31,000 direct accounts worldwide serviced by 370 company sales representatives (2) Direct sales capture in 46 countries (2) EMEA $51MM annual spend on research and 13% product development and patent Japan administration (2)(3) 12% Near 1,200 active golf ball patents, and over 54% United States 10% Korea 300 in golf clubs, wedges and putters (2) 11% ROW 1. See appendix for Adjusted EBITDA reconciliation 2. As of 12/31/2015 3. Includes $46MM of R&D and $5MM of patent administration 6
Acushnet Business Model Strategy and Competency Model Benefits and Outcomes Dedicated Golfer Focus 1. Demanding expectations drives company focus 15% of golfers, 40% of rounds, 70% of spend (U.S.) 2. Leads to broad and deep portfolio Commit time, money and energy 3. Supports sustainability of brands Avid, skill-based and performance-biased 4. Contributes to revenue stability Disposed to pay premium for performance Pyramid of Influence Validation 1. Drives innovation, performance and quality focus Industry’s most dedicated golfer 2. Anchors compelling marketing strategy Golf is imitation based 3. Leads to broad and deep portfolio How Many versus Who Commitment to Perpetual Innovation 1. Supports disciplined product introduction cadence Performance rooted in Innovation 2. Helps deliver high margins in performance categories Largest portfolio of active patents 3. 90% of current products incorporate current technology 150 Scientists, Engineers and Chemists World Class Operations Platform 1. Supports performance and quality focus History of supply chain excellence 2. Maximizes cost controls / working capital efficiency Comprehensive supply chain footprint 3. Drives country and category customization 4. Contributes to wide competitive category moat 7
Acushnet Business Model, cont’d. Strategy and Competency Model Benefits and Outcomes Unrivaled Route to Market 1. Bridge to dedicated golfer 2. Maximizes retail presence, visibility and availability 31,000 direct accounts 3. Contributes to full-service, value proposition Direct sales capture in 46 countries 4. Diversified revenue base 370 direct sales representatives Robust Golfer Experience / Connection 1. Direct connection with dedicated golfer Golf ball education and fitting 2. Maximize experience, build brand loyalty Custom club fitting and trial 3. Customization drives higher margins Direct to consumer initiatives 1. High brand loyalty Differentiated and Proven 2. Premium positioning and higher margins Operating Model 3. Solid revenue and earnings track record 4. Strong free cash flow 8
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