On (ONON) Q3 2024 earnings summary

Executive summary

• Achieved record net sales of CHF 635.8 million in Q3 2024, up 32.3% year-over-year, driven by strong D2C channel growth and global brand momentum.

• D2C channel grew 49.8%, reaching CHF 246.7 million and 38.8% of total sales, up 450 bps from last year.

• APAC region net sales grew 79.3%, now 11.7% of total business, with exceptional growth led by China and Japan.

• Brand awareness doubled in the US and nearly tripled in Paris, driven by Olympics, celebrity partnerships, and innovation.

• Strategic focus on running, apparel, own retail, and Asia is delivering strong results.

Financial highlights

• Gross profit margin reached 60.6% in Q3, up 70 bps year-over-year; adjusted EBITDA margin at 18.9%, up from 16.9%.

• Net income of CHF 30.5 million despite CHF 37.2 million unrealized FX loss; net income margin at 4.8%.

• Positive cash flow of over CHF 125 million in Q3; cash balance near CHF 750 million at quarter end.

• Capital expenditures were CHF 19.1 million (3% of net sales); investing outflow for nine months CHF 45.2 million.

• Q3 2024 adjusted EBITDA: CHF 120.1 million (+47.7%).

Outlook and guidance

• Raised full-year 2024 constant currency net sales growth target from at least 30% to at least 32%, implying at least CHF 2.29 billion in net sales.

• Full-year gross profit margin now expected around 60.5%, 50 bps above prior outlook.

• Adjusted EBITDA margin for 2024 expected at upper end of 16%-16.5% range, potentially slightly above.

• Expects Q4 acceleration in constant currency net sales growth, with sizable FX headwinds.