Di, Mrz 12. 2024
On Running showcases impressive 2023 performance with soaring profits and ambitious plans to double revenue by 2026.
The running shoe company On grew strongly in the 2023 financial year and generated significantly higher profits.
However, there is still unlikely to be a dividend. Surpluses are to be further invested in growth: Turnover is expected to double by 2026.
“We are still a growth company,” said Co-CEO Martin Hoffman in a telephone conversation with the news agency AWP from New York, where the Zurich-based company is listed on the stock exchange.
On is set to become “the strongest global premium sports brand”, he continued.
Last year, sales rose by almost half to 1.79 billion Swiss francs. The strong Swiss franc had a considerable negative impact on growth. At constant exchange rates, sales increased by as much as 55 percent.
In the largest market, America, On grew by 52% to CHF 1.16 billion. Sales in Europe also increased significantly by 29% to 489 million. However, the Asia-Pacific region saw the most dynamic growth: +76% to 141 million.
Operating profit (adj. EBITDA) rose even more sharply than sales.
At CHF 277 million, it was 68% higher. The corresponding margin thus increased from 13.5% to 15.5%. According to CEO Hoffmann, this was due to the increase in sales.
However, the increased share of direct sales also contributed to the higher profitability. In addition, an increased share of air freight in 2022 due to disruptions in the supply chain weighed on margins as a result of the associated higher transportation costs.
The bottom line was a 38% higher net profit of 80 million in 2023.
“We want to double our turnover by 2026,” Hoffmann confirmed the medium-term targets set in October.
According to the Co-CEO, all regions should continue to contribute to this in the future, with Asia likely to continue to grow most dynamically.
In the current year, the company expects sales to increase by 30% at constant exchange rates. At current exchange rates, this would correspond to CHF 2.25 billion.
According to the CEO, the most important growth driver will continue to be running shoes. However, On also wants to make further gains in the training segment and, not least, in clothing. In addition, the company, in which former tennis star and brand ambassador Roger Federer is also involved, will soon be launching a new tennis collection on the market.
On is relying on economies of scale, a further increase in the proportion of direct sales and e-commerce, as Hoffmann explained.
However, increasing efficiency through automation should also ensure better margins – for example in the main warehouse in the USA, which is currently being remodeled.
For the current year, On expects an adjusted EBITDA margin of 16.0% to 16.5%. In the medium term, it should even reach 18%.
However, there is still unlikely to be a dividend. Management recommends continuing to invest in growth for the time being.
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