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Exhibit 99.1
Index to unaudited interim condensed consolidated financial statements
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Unaudited interim condensed consolidated financial statements | | |
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Unaudited interim condensed consolidated statements of income
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| | | | Three-month period ended June 30, | | Six-month period ended June 30, |
(CHF in millions) | | Notes | | 2024 | | 2023 | | 2024 | | 2023 |
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Net sales | | 2.1 | | 567.7 | | | 444.3 | | | 1,075.9 | | | 864.5 | |
Cost of sales | | | | (227.4) | | | (179.8) | | | (432.3) | | | (355.1) | |
Gross profit | | | | 340.2 | | | 264.5 | | | 643.6 | | | 509.4 | |
Selling, general and administrative expenses | | 2.3 | | (292.9) | | | (225.1) | | | (557.7) | | | (427.7) | |
Operating result | | | | 47.3 | | | 39.4 | | | 85.8 | | | 81.7 | |
Financial income | | 4.4 | | 5.8 | | | 4.3 | | | 11.2 | | | 6.4 | |
Financial expenses | | 4.4 | | (5.9) | | | (1.9) | | | (10.8) | | | (3.6) | |
Foreign exchange gain / (loss) | | 4.4 | | (4.5) | | | (48.5) | | | 72.3 | | | (39.7) | |
Income / (loss) before taxes | | | | 42.7 | | | (6.7) | | | 158.5 | | | 44.8 | |
Income tax benefit / (expense) | | 5.2 | | (11.8) | | | 10.0 | | | (36.3) | | | 2.9 | |
Net income | | | | 30.8 | | | 3.3 | | | 122.2 | | | 47.7 | |
Earnings per share | | 4.6 | | | | | | | | |
Basic EPS Class A (CHF) | | | | 0.10 | | | 0.01 | | | 0.38 | | | 0.15 | |
Basic EPS Class B (CHF) | | | | 0.01 | | | 0.00 | | | 0.04 | | | 0.01 | |
| | | | | | | | | | |
Diluted EPS Class A (CHF) | | | | 0.09 | | | 0.01 | | | 0.37 | | | 0.15 | |
Diluted EPS Class B (CHF) | | | | 0.01 | | | 0.00 | | | 0.04 | | | 0.01 | |
Unaudited interim condensed consolidated statements of comprehensive income / (loss)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Three-month period ended June 30, | | Six-month period ended June 30, |
(CHF in millions) | | | | 2024 | | 2023 | | 2024 | | 2023 |
| | | | | | | | | | |
| | | | | | | | | | |
Net income | | | | 30.8 | | | 3.3 | | | 122.2 | | | 47.7 | |
Net actuarial result from defined benefit plans | | | | 1.4 | | | (1.1) | | | 1.4 | | | (1.1) | |
Taxes on net actuarial result from defined benefit plans | | | | (0.3) | | | 0.2 | | | (0.3) | | | 0.2 | |
| | | | | | | | | | |
| | | | | | | | | | |
Items that will not be reclassified to income statement | | | | 1.1 | | | (0.9) | | | 1.1 | | | (0.9) | |
Foreign currency translation effect | | | | (0.6) | | | (3.2) | | | 4.2 | | | (2.8) | |
Taxes on foreign currency translation effect | | | | — | | | — | | | — | | | — | |
Items that will be reclassified to income statement when specific conditions are met | | | | (0.6) | | | (3.2) | | | 4.2 | | | (2.8) | |
Other comprehensive income / (loss), net of tax | | | | 0.5 | | | (4.0) | | | 5.4 | | | (3.6) | |
Total comprehensive income / (loss) | | | | 31.3 | | | (0.7) | | | 127.6 | | | 44.0 | |
Unaudited interim condensed consolidated balance sheets
| | | | | | | | | | | | | | | | | | | | | |
(CHF in millions) | | Notes | | 6/30/2024 | | 12/31/2023 | |
| | | | | | | |
| | | | | | | |
Cash and cash equivalents | | 4.1 | | 652.4 | | | 494.6 | | |
Trade receivables | | 3.1 | | 314.0 | | | 204.8 | | |
Inventories | | 3.2 | | 401.3 | | | 356.5 | | |
Other current financial assets | | 4.2 | | 38.2 | | | 34.2 | | |
Other current operating assets | | 3.6 | | 95.5 | | | 61.2 | | |
| | | | | | | |
Current assets | | | | 1,501.5 | | | 1,151.3 | | |
| | | | | | | |
Property, plant and equipment | | 3.3 | | 111.7 | | | 93.6 | | |
Right-of-use assets | | 3.4 | | 319.1 | | | 214.0 | | |
Intangible assets | | 3.5 | | 61.7 | | | 64.6 | | |
| | | | | | | |
Deferred tax assets | | 5.2 | | 51.7 | | | 69.5 | | |
| | | | | | | |
| | | | | | | |
Non-current assets | | | | 544.3 | | | 441.7 | | |
| | | | | | | |
Assets | | | | 2,045.8 | | | 1,593.0 | | |
| | | | | | | |
Trade payables | | | | 148.2 | | | 65.1 | | |
Other current financial liabilities | | 4.3 | | 76.4 | | | 53.4 | | |
Other current operating liabilities | | 3.6 | | 249.9 | | | 156.4 | | |
Current provisions | | 5.1 | | 16.8 | | | 7.1 | | |
Income tax liabilities | | 5.2 | | 12.9 | | | 23.5 | | |
| | | | | | | |
Current liabilities | | | | 504.1 | | | 305.6 | | |
| | | | | | | |
Employee benefit obligations | | | | 1.6 | | | 2.2 | | |
Non-current provisions | | 5.1 | | 11.4 | | | 10.0 | | |
Other non-current financial liabilities | | 4.3 | | 288.1 | | | 190.3 | | |
Deferred tax liabilities | | 5.2 | | 9.7 | | | 10.5 | | |
| | | | | | | |
| | | | | | | |
Non-current liabilities | | | | 310.8 | | | 212.9 | | |
| | | | | | | |
Share capital | | 4.5 | | 33.5 | | | 33.5 | | |
Treasury shares | | 4.5 | | (26.7) | | | (26.7) | | |
Capital reserves | | 4.7 | | 1,169.7 | | | 1,140.8 | | |
Other reserves | | 4.7 | | (4.4) | | | (9.8) | | |
Retained earnings / (losses) | | | | 58.9 | | | (63.3) | | |
| | | | | | | |
Equity | | | | 1,231.0 | | | 1,074.5 | | |
| | | | | | | |
Equity and liabilities | | | | 2,045.8 | | | 1,593.0 | | |
Unaudited interim condensed consolidated statements of cash flows
| | | | | | | | | | | | | | | | | | | | |
| | | | Six-month period ended June 30, |
(CHF in millions) | | Notes | | 2024 | | 2023 |
| | | | | | |
| | | | | | |
Net income | | | | 122.2 | | | 47.7 | |
Adjustments for: | | | | | | |
Share-based compensation | | | | 22.9 | | | 8.5 | |
Employee benefit expenses | | | | 0.9 | | | (1.7) | |
Depreciation and amortization | | 3.3, 3.4, 3.5 | | 48.5 | | | 28.0 | |
Loss on disposal of assets | | | | — | | | 0.4 | |
Interest income and expenses | | | | (3.6) | | | (3.8) | |
Net exchange differences | | | | (61.3) | | | 35.3 | |
Income taxes | | 5.2 | | 36.3 | | | (2.9) | |
| | | | | | |
| | | | | | |
Change in working capital | | | | (32.2) | | | (164.6) | |
Trade receivables | | | | (98.0) | | | (84.3) | |
Inventories | | | | (16.8) | | | (60.0) | |
Trade payables | | | | 82.7 | | | (20.3) | |
Change in other operating assets / liabilities | | 3.6, 4.2, 4.3 | | 57.3 | | | 57.2 | |
Change in provisions | | 5.1 | | 10.5 | | | 4.7 | |
Interest received | | | | 10.9 | | | 6.1 | |
Income taxes paid | | | | (28.9) | | | (11.6) | |
Cash inflow from operating activities | | | | 183.5 | | | 3.3 | |
| | | | | | |
Purchase of tangible assets | | 3.3 | | (23.7) | | | (19.0) | |
| | | | | | |
Purchase of intangible assets | | 3.5 | | (2.3) | | | (2.0) | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Cash (outflow) from investing activities | | | | (26.0) | | | (21.0) | |
| | | | | | |
| | | | | | |
| | | | | | |
Payments of lease liabilities | | 4.3 | | (23.7) | | | (10.2) | |
| | | | | | |
| | | | | | |
Proceeds on sale of treasury shares related to share-based compensation | | 4.5 | | 5.2 | | | 5.7 | |
| | | | | | |
| | | | | | |
Interest paid | | 4.4 | | (7.3) | | | (2.3) | |
| | | | | | |
Cash (outflow) from financing activities | | | | (25.8) | | | (6.7) | |
| | | | | | |
Change in net cash and cash equivalents | | 4.1 | | 131.7 | | | (24.3) | |
Net cash and cash equivalents at January 1 | | | | 494.6 | | | 371.0 | |
Net impact of foreign exchange rate differences | | | | 26.2 | | | (9.6) | |
Net cash and cash equivalents at June 30 | | | | 652.4 | | | 337.1 | |
Unaudited interim condensed consolidated statements of changes in equity
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three-month period ended June 30, 2024 and 2023 |
(CHF in millions) | | Share capital | | Treasury shares | | Capital reserves | | Other reserves | | Retained earnings / (losses) | | Total equity |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Balance at April 1, 2023 | | 33.5 | | | (26.1) | | | 1,109.6 | | | 0.4 | | | (98.5) | | | 1,018.7 | |
Net income | | — | | | — | | | — | | | — | | | 3.3 | | | 3.3 | |
Other comprehensive loss | | — | | | — | | | — | | | (4.0) | | | — | | | (4.0) | |
Comprehensive income / (loss) | | — | | | — | | | — | | | (4.0) | | | 3.3 | | | (0.7) | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Share-based compensation | | — | | | — | | | 6.2 | | | — | | | — | | | 6.2 | |
Sale of treasury shares | | — | | | 0.1 | | | 3.5 | | | — | | | — | | | 3.5 | |
Tax impact on transactions with treasury shares | | — | | | — | | | (0.7) | | | — | | | — | | | (0.7) | |
Purchase of treasury shares | | — | | | (0.4) | | | — | | | — | | | — | | | (0.4) | |
| | | | | | | | | | | | |
Balance at June 30, 2023 | | 33.5 | | | (26.4) | | | 1,118.6 | | | (3.7) | | | (95.2) | | | 1,026.7 | |
| | | | | | | | | | | | |
Balance at April 1, 2024 | | 33.5 | | | (26.7) | | | 1,152.9 | | | (4.9) | | | 28.0 | | | 1,182.8 | |
Net income | | — | | | — | | | — | | | — | | | 30.8 | | | 30.8 | |
Other comprehensive income | | — | | | — | | | — | | | 0.5 | | | — | | | 0.5 | |
Comprehensive income | | — | | | — | | | — | | | 0.5 | | | 30.8 | | | 31.3 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Share-based compensation | | — | | | — | | | 13.1 | | | — | | | — | | | 13.1 | |
Sale of treasury shares | | — | | | 0.1 | | | 3.4 | | | — | | | — | | | 3.5 | |
Tax impact on transactions with treasury shares | | — | | | — | | | 0.3 | | | — | | | — | | | 0.3 | |
Purchase of treasury shares | | — | | | (0.1) | | | — | | | — | | | — | | | (0.1) | |
| | | | | | | | | | | | |
Balance at June 30, 2024 | | 33.5 | | | (26.7) | | | 1,169.7 | | | (4.4) | | | 58.9 | | | 1,231.0 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Six-month period ended June 30, 2024 and 2023 |
(CHF in millions) | | Share capital | | Treasury shares | | Capital reserves | | Other reserves | | Retained earnings / (losses) | | Total equity |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Balance at January 1, 2023 | | 33.5 | | | (26.1) | | | 1,105.1 | | | — | | | (142.9) | | | 969.5 | |
Net income | | — | | | — | | | — | | | — | | | 47.7 | | | 47.7 | |
Other comprehensive loss | | — | | | — | | | — | | | (3.6) | | | — | | | (3.6) | |
Comprehensive income / (loss) | | — | | | — | | | — | | | (3.6) | | | 47.7 | | | 44.0 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Share-based compensation | | — | | | — | | | 8.5 | | | — | | | — | | | 8.5 | |
Sale of treasury shares | | — | | | 0.1 | | | 6.1 | | | — | | | — | | | 6.3 | |
Tax impact on transactions with treasury shares | | — | | | — | | | (1.1) | | | — | | | — | | | (1.1) | |
Purchase of treasury shares | | — | | | (0.5) | | | — | | | — | | | — | | | (0.5) | |
Balance at June 30, 2023 | | 33.5 | | | (26.4) | | | 1,118.6 | | | (3.7) | | | (95.2) | | | 1,026.7 | |
| | | | | | | | | | | | |
Balance at January 1, 2024 | | 33.5 | | | (26.7) | | | 1,140.8 | | | (9.8) | | | (63.3) | | | 1,074.5 | |
Net income | | — | | | — | | | — | | | — | | | 122.2 | | | 122.2 | |
Other comprehensive income | | — | | | — | | | — | | | 5.4 | | | — | | | 5.4 | |
Comprehensive income | | — | | | — | | | — | | | 5.4 | | | 122.2 | | | 127.6 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Share-based compensation | | — | | | — | | | 22.9 | | | — | | | — | | | 22.9 | |
Sale of treasury shares | | — | | | 0.1 | | | 6.0 | | | — | | | — | | | 6.2 | |
| | | | | | | | | | | | |
Purchase of treasury shares | | — | | | (0.1) | | | — | | | — | | | — | | | (0.1) | |
| | | | | | | | | | | | |
Balance at June 30, 2024 | | 33.5 | | | (26.7) | | | 1,169.7 | | | (4.4) | | | 58.9 | | | 1,231.0 | |
Notes to the unaudited interim condensed consolidated financial statements
1 Basis for preparation
1.1 Corporate information
On Holding AG and its consolidated subsidiaries (together "On" or "the Company") is engaged in developing and distributing innovative premium performance sports products, sold worldwide through independent retailers and global distributors, and through the Company's online presence and high-end stores.
On is a publicly traded company on the New York Stock Exchange, trading under the ticker symbol "NYSE: ONON".
These unaudited interim condensed consolidated financial statements (“the financial statements”) present the financial position and the results of operations of On Holding AG, as ultimate parent company, and its consolidated subsidiaries. On Holding AG is a limited company incorporated in accordance with Swiss law and its principal offices are located at Förrlibuckstrasse 190, Zurich, Switzerland.
The financial statements for the period ended June 30, 2024 were authorized for issuance by the board of directors of the Company on August 13, 2024.
1.2 About the financials
The financial statements as of June 30, 2024 and for the three months and six months ended June 30, 2024 have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” (“IAS 34”) as issued by the International Accounting Standards Board ("IASB").
The financial statements comprise the Company's financial statements as of and during three months and six months ended June 30, 2024 and are presented in Swiss Francs (CHF), the legal currency of Switzerland.
The financial statements are not necessarily indicative of the results for a full year and do not include all the notes typically included in an annual financial report prepared in accordance with International Financial Reporting Standards ("IFRS") and interpretations developed by the IFRS Interpretations Committee ("IFRIC Interpretations"), or its predecessor body, the Standing Interpretations Committee ("SIC Interpretations"), together “IFRS Accounting Standards”, as issued by the International Accounting Standards Board ("IASB"). Accordingly, this report is to be read in conjunction with the Company’s Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 12, 2024 (the “Annual Report”), which has been prepared in accordance with IFRS Accounting Standards, as issued by the IASB.
The material accounting policies, methods of computation, and presentation applied in the preparation of the financial statements are consistent with those applied in the Company’s Annual Report for the year ended December 31, 2023 except where specifically described.
Certain amounts included in this document may not add or recalculate due to rounding. With respect to financial information set out in this document, a dash (“—”) signifies that the relevant figure is available but is or has been rounded to zero.
1.3 Oniverse
| | | | | | | | | | | | | | | | | | | | |
| | | | Equity interest |
Entity | | Jurisdiction of incorporation | | 6/30/2024 | | 12/31/2023 |
| | | | | | |
| | | | | | |
On Holding AG | | Switzerland | | | | |
On AG | | Switzerland | | 100% | | 100% |
On Brazil Ltda. | | Brazil | | 100% | | 100% |
On Cloud Service GmbH | | Germany | | 100% | | 100% |
On Clouds GmbH | | Switzerland | | 100% | | 100% |
On Clouds Inc. | | Delaware, USA | | 100% | | 100% |
On Europe AG | | Switzerland | | 100% | | 100% |
On Experience 1 LLC | | Delaware, USA | | 100% | | 100% |
On Experience 2 LLC | | Delaware, USA | | 100% | | 100% |
On Experience 3 LLC | | Delaware, USA | | 100% | | 100% |
On Experience 4 LLC | | Delaware, USA | | 100% | | 100% |
On Experience 5 LLC | | Delaware, USA | | 100% | | 100% |
On Experience 6 LLC | | Delaware, USA | | 100% | | 100% |
On Experience 7 LLC | | Delaware, USA | | 100% | | 100% |
On Experience 8 LLC | | Delaware, USA | | 100% | | 100% |
On Experience 9 LLC | | Delaware, USA | | 100% | | —% |
On Experience 10 LLC | | Delaware, USA | | 100% | | —% |
On Hong Kong Limited | | Hong Kong, SAR of China | | 100% | | 100% |
On Inc. | | Delaware, USA | | 100% | | 100% |
On Italy S.r.l. | | Italy | | 100% | | 100% |
On Japan K.K. | | Japan | | 100% | | 100% |
On Korea Ltd. | | South Korea | | 100% | | 100% |
On Oceania Pty Ltd. | | Australia | | 100% | | 100% |
On Running Canada Inc. | | Canada | | 100% | | 100% |
On Running Sports Products (Shanghai) Company Ltd. | | China | | 100% | | 100% |
On Running UK Ltd. | | United Kingdom | | 100% | | 100% |
On Vietnam Co. Ltd. | | Vietnam | | 100% | | 100% |
Brunner Mettler GmbH | | Switzerland | | 100% | | 100% |
1.4 New and amended standards and interpretations
A number of amended standards became applicable for the current period, none of which have had a material impact on the financial statements for the three month and six month periods ended June 30, 2024.
On May 2023, the IASB issued amendments to IAS 12 Income taxes, International Tax Reform - Pillar Two Model Rules. The amendments include a temporary and mandatory exception to the requirements to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. The Company has applied this exception.
Further, at the date of authorization of these financial statements, On has not applied the following new and revised IFRS Standards that have been issued by the IASB but are not yet effective:
| | | | | | | | | | | | | | |
Description | | Standard Reference | | IASB Effective Date |
| | | | |
| | | | |
| | | | |
The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability | | Amendments to IAS 21 | | January 1, 2025 |
Amendments to the Classification and Measurement of Financial Instruments | | Amendments to IFRS 9 and IFRS 7 | | January 1, 2026 |
Presentation and Disclosure in Financial Statements | | IFRS 18 | | January 1, 2027 |
Subsidiaries without Public Accountability: Disclosures | | IFRS 19 | | January 1, 2027 |
| | | | |
On does not expect that the adoption of the standards listed above, excluding IFRS 18, will have a material impact on the financial statement and disclosures of On in the current or future reporting periods.
IFRS 18 – Presentation and Disclosures in Financial Statements that will replace International Accounting Standards ("IAS") 1 – Presentation of Financial Statements from its effective date, was issued on April 9, 2024 by the International Accounting Standards Board ("IASB"). IFRS 18 introduces new requirements for information presented in the primary financial statements and disclosed in the notes. The accounting standard introduces three new defined categories for income and expenses - operating, investing and financing, and requires all companies to provide certain new defined subtotals. IFRS 18 also requires companies to disclose explanations of company-specific measures that are related to the income statement, referred to as management-defined performance measures. Moreover, the accounting standard sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes and requires companies to provide more transparency about operating expenses. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, but early adoption is permitted. On is evaluating the impact of IFRS 18 on the Company's financial statements and disclosures.
2 Operational performance
2.1 Net sales
Net sales by sales channels:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three-month period ended June 30, | | Six-month period ended June 30, | |
(CHF in millions) | | 2024 | | 2023 | | 2024 | | 2023 | |
| | | | | | | | | |
| | | | | | | | | |
Wholesale | | 358.2 | | | 280.8 | | | 675.9 | | | 564.0 | | |
Direct-to-Consumer | | 209.4 | | | 163.5 | | | 399.9 | | | 300.5 | | |
Net sales | | 567.7 | | | 444.3 | | | 1,075.9 | | | 864.5 | | |
Net sales by product groups:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three-month period ended June 30, | | Six-month period ended June 30, | |
(CHF in millions) | | 2024 | | 2023 | | 2024 | | 2023 | |
| | | | | | | | | |
| | | | | | | | | |
Shoes | | 542.5 | | | 428.2 | | | 1,027.1 | | | 828.7 | | |
Apparel | | 21.9 | | | 13.4 | | | 41.6 | | | 30.3 | | |
Accessories | | 3.3 | | | 2.7 | | | 7.1 | | | 5.4 | | |
| | | | | | | | | |
Net sales | | 567.7 | | | 444.3 | | | 1,075.9 | | | 864.5 | | |
On generates net sales primarily from the sale of premium performance shoes, apparel, and accessories. On has two sales channels: Wholesale and Direct-to-Consumer (DTC). The wholesale sales channel involves sales to wholesale customers (e.g., large retailers or retail associations) and international distributors (i.e., in markets where On does not have local sales teams) with the intention of re-selling the goods. The DTC sales channel includes sales to end customers directly through On’s e-commerce platform and retail stores.
Net sales by geographic regions (based on the location of the counterparty):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three-month period ended June 30, | | Six-month period ended June 30, |
(CHF in millions) | | 2024 | | 2023 | | 2024 | | 2023 |
| | | | | | | | |
| | | | | | | | |
Europe, Middle East and Africa | | 138.4 | | | 113.6 | | | 264.6 | | | 232.2 | |
Americas | | 370.0 | | | 296.6 | | | 699.7 | | | 566.8 | |
Asia-Pacific | | 59.2 | | | 34.1 | | | 111.6 | | | 65.5 | |
Net sales | | 567.7 | | | 444.3 | | | 1,075.9 | | | 864.5 | |
There is no single customer who accounts for more than 10% of total net sales. For details on assets and liabilities related to contracts with customers refer to 3.1 Trade receivables and 3.6 Other current operating assets and liabilities, respectively. Trade receivables as shown in the unaudited interim condensed consolidated balance sheets relate to the sale of the Company's products.
2.2 Segment information
Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in making decisions regarding resource allocation and performance assessment.
On’s CODM is the On Executive Team which consists of the three Co-Founders and the two Co-CEOs. The CODM does not regularly review financial information for any individual component, such as sales channels, geographic regions or product groups that would allow decisions to be made about allocation of resources or performance.
On operates as single-brand consumer products business and therefore has a single reportable segment. This is primarily due to On’s business activities which focus on driving sales growth by increasing overall brand awareness and market share. The key operating expenditures related to cost of sales, distribution, selling, marketing and general and administrative expenses, are either not differentiated across individual components, or are managed to benefit the entire On brand irrespective of the impact on the potential profitability of a particular component.
2.3 Selling, general and administrative expenses
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three-month period ended June 30, | | Six-month period ended June 30, | |
(CHF in millions) | | 2024 | | 2023 | | 2024 | | 2023 | |
| | | | | | | | | |
| | | | | | | | | |
Distribution expenses | | (71.1) | | | (61.5) | | | (142.0) | | | (120.7) | | |
Selling expenses | | (41.2) | | | (31.8) | | | (75.6) | | | (59.5) | | |
Marketing expenses | | (70.3) | | | (51.5) | | | (131.8) | | | (96.0) | | |
Share-based compensation | | (17.1) | | | (9.1) | | | (33.9) | | | (14.0) | | |
General and administrative expenses | | (93.1) | | | (71.2) | | | (174.4) | | | (137.5) | | |
Selling, general and administrative expenses | | (292.9) | | | (225.1) | | | (557.7) | | | (427.7) | | |
The overall increase in marketing expenses during the three and six-month comparative periods are in line with the higher net sales, with additional increases primarily due to higher marketing spend on upper funnel brand building initiatives and brand partnerships. The overall increase in general and administrative expenses during the three and six-month comparative periods are in line with the higher net sales, with additional increases primarily due to higher expenses for software development projects and higher personnel related expenses. The overall increase in share-based compensation during the three and six-month comparative periods was driven by grants issued during the year ended December 31, 2023, as well as the three and six-month periods ended June 30, 2024, with ongoing vesting periods, as well as increased provisions for equity related social charges.
In the six-month period ended June 30, 2024, selling, general and administrative expenses include depreciation and amortization of non-current assets in the amount of CHF 44.0 million (six-month period ended June 30, 2023: CHF 24.4 million). In addition, depreciation charges for production tools in the amount of CHF 4.4 million (six-month period ended June 30, 2023: CHF 3.5 million) are reported in cost of sales.
Total personnel expenses, excluding any costs related to share-based compensation, amount to CHF 131.4 million in the six-month period ended June 30, 2024 and CHF 100.0 million in the six-month period ended June 30, 2023, respectively.
3 Operating assets and liabilities
3.1 Trade receivables
Trade receivables are generally due within a payment period of between 30 to 90 days. Due to their short-term nature, the carrying amount is considered to be the same as their fair value.
| | | | | | | | | | | | | | | |
(CHF in millions) | | 6/30/2024 | | 12/31/2023 | |
| | | | | |
| | | | | |
Gross carrying amount | | 327.3 | | | 218.1 | | |
Expected credit loss | | (13.4) | | | (13.3) | | |
Trade receivables | | 314.0 | | | 204.8 | | |
3.2 Inventories
| | | | | | | | | | | | | | |
(CHF in millions) | | 6/30/2024 | | 12/31/2023 |
| | | | |
| | | | |
Shoes | | 370.9 | | | 321.4 | |
Apparel | | 37.7 | | | 34.5 | |
Accessories | | 4.7 | | | 8.0 | |
| | | | |
Allowances | | (12.0) | | | (7.4) | |
Inventories(1) | | 401.3 | | | 356.5 | |
(1) Inventories are comprised of finished goods.
3.3 Property, plant and equipment
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(CHF in millions) | | Leasehold improvements | | Trade tools | | Production equipment | | Furniture and fixtures | | Other | | Total |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Cost at January 1, 2023 | | 49.7 | | | 10.7 | | | 12.9 | | | 13.5 | | | 11.0 | | | 97.8 | |
Accumulated Depreciation at January 1, 2023 | | (5.0) | | | (5.4) | | | (5.3) | | | (1.4) | | | (3.4) | | | (20.6) | |
Net book value at January 1, 2023 | | 44.7 | | | 5.3 | | | 7.5 | | | 12.1 | | | 7.6 | | | 77.2 | |
| | | | | | | | | | | | |
Six month period ended June 30, 2023 | | | | | | | | | | | | |
Opening net book value | | 44.7 | | | 5.3 | | | 7.5 | | | 12.1 | | | 7.6 | | | 77.2 | |
Additions | | 8.4 | | | 0.5 | | | 4.1 | | | 3.7 | | | 2.1 | | | 19.0 | |
Disposals | | (0.2) | | | — | | | — | | | — | | | — | | | (0.3) | |
Depreciation | | (3.4) | | | (1.2) | | | (3.2) | | | (0.9) | | | (1.4) | | | (10.1) | |
Currency Translation | | (1.0) | | | (0.1) | | | — | | | (0.3) | | | (0.1) | | | (1.5) | |
Net book value at June 30, 2023 | | 48.6 | | | 4.5 | | | 8.5 | | | 14.6 | | | 8.2 | | | 84.3 | |
| | | | | | | | | | | | |
Cost at June 30, 2023 | | 56.6 | | | 10.9 | | | 17.0 | | | 16.9 | | | 12.9 | | | 114.3 | |
Accumulated Depreciation at June 30, 2023 | | (8.0) | | | (6.4) | | | (8.5) | | | (2.3) | | | (4.8) | | | (30.0) | |
Net book value at June 30, 2023 | | 48.6 | | | 4.5 | | | 8.5 | | | 14.6 | | | 8.2 | | | 84.3 | |
| | | | | | | | | | | | |
Cost at January 1, 2024 | | 61.2 | | | 13.6 | | | 21.7 | | | 19.9 | | | 18.1 | | | 134.5 | |
Accumulated Depreciation at January 1, 2024 | | (11.6) | | | (7.5) | | | (12.3) | | | (3.4) | | | (6.2) | | | (41.0) | |
Net book value at January 1, 2024 | | 49.6 | | | 6.1 | | | 9.4 | | | 16.5 | | | 11.9 | | | 93.6 | |
| | | | | | | | | | | | |
Six month period ended June 30, 2024 | | | | | | | | | | | | |
Opening net book value | | 49.6 | | | 6.1 | | | 9.4 | | | 16.5 | | | 11.9 | | | 93.6 | |
Additions | | 17.4 | | | 0.4 | | | 5.4 | | | 3.8 | | | 3.5 | | | 30.5 | |
| | | | | | | | | | | | |
Depreciation | | (5.7) | | | (1.5) | | | (4.3) | | | (1.4) | | | (1.5) | | | (14.4) | |
Currency Translation | | 1.3 | | | 0.2 | | | — | | | 0.5 | | | 0.2 | | | 2.1 | |
Net book value at June 30, 2024 | | 62.5 | | | 5.3 | | | 10.6 | | | 19.4 | | | 14.0 | | | 111.7 | |
| | | | | | | | | | | | |
Cost at June 30, 2024 | | 80.1 | | | 14.4 | | | 27.1 | | | 24.3 | | | 21.8 | | | 167.6 | |
Accumulated Depreciation at June 30, 2024 | | (17.6) | | | (9.1) | | | (16.5) | | | (4.9) | | | (7.8) | | | (55.9) | |
Net book value at June 30, 2024 | | 62.5 | | | 5.3 | | | 10.6 | | | 19.4 | | | 14.0 | | | 111.7 | |
The additions of CHF 30.5 million in the six-month period ended June 30, 2024 relate to leasehold improvements for our warehouse in Belgium and Luxembourg and various other additions across retail stores, production equipment, and offices.
During the six-month periods ended June 30, 2024 and June 30, 2023, non-cash additions of property, plant and equipment amounted to CHF 6.8 million and CHF 0.0 million, respectively.
Other comprises of IT equipment and fixed assets that are not yet in use. As of June 30, 2024, fixed assets that are not yet in use amounted to CHF 3.9 million (December 31, 2023: CHF 2.4 million).
3.4 Right-of-use assets
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(CHF in millions) | | Storage | | Stores & showrooms | | Offices | | Cars | | Total |
| | | | | | | | | | |
| | | | | | | | | | |
Cost at January 1, 2023 | | 28.7 | | | 45.6 | | | 111.0 | | | 7.4 | | | 192.7 | |
Accumulated Depreciation at January 1, 2023 | | (11.9) | | | (7.7) | | | (16.8) | | | (4.6) | | | (41.1) | |
Net book value at January 1, 2023 | | 16.8 | | | 37.9 | | | 94.2 | | | 2.8 | | | 151.6 | |
| | | | | | | | | | |
Six month period ended June 30, 2023 | | | | | | | | | | |
Opening net book value | | 16.8 | | | 37.9 | | | 94.2 | | | 2.8 | | | 151.6 | |
Lease modification | | (4.1) | | | 0.1 | | | 0.7 | | | — | | | (3.3) | |
Additions | | — | | | 12.3 | | | 6.6 | | | 1.3 | | | 20.2 | |
Disposals | | (0.1) | | | — | | | — | | | (0.2) | | | (0.2) | |
Depreciation | | (2.8) | | | (4.2) | | | (5.0) | | | (1.0) | | | (13.0) | |
Currency Translation | | (0.2) | | | (1.5) | | | (0.7) | | | (0.1) | | | (2.5) | |
Net book value at June 30, 2023 | | 9.6 | | | 44.6 | | | 95.8 | | | 2.9 | | | 152.9 | |
| | | | | | | | | | |
Cost at June 30, 2023 | | 23.9 | | | 55.9 | | | 117.4 | | | 7.9 | | | 205.0 | |
Accumulated Depreciation at June 30, 2023 | | (14.3) | | | (11.2) | | | (21.6) | | | (4.9) | | | (52.1) | |
Net book value at June 30, 2023 | | 9.6 | | | 44.6 | | | 95.8 | | | 2.9 | | | 152.9 | |
| | | | | | | | | | |
Cost at January 1, 2024 | | 87.5 | | | 70.5 | | | 116.9 | | | 8.1 | | | 283.1 | |
Accumulated Depreciation at January 1, 2024 | | (22.1) | | | (15.4) | | | (26.1) | | | (5.4) | | | (69.1) | |
Net book value at January 1, 2024 | | 65.3 | | | 55.1 | | | 90.8 | | | 2.8 | | | 214.0 | |
| | | | | | | | | | |
Six month period ended June 30, 2024 | | | | | | | | | | |
Opening net book value | | 65.3 | | | 55.1 | | | 90.8 | | | 2.8 | | | 214.0 | |
Lease modification | | 3.0 | | | — | | | 0.2 | | | — | | | 3.2 | |
Additions | | 57.4 | | | 49.2 | | | 13.8 | | | 0.5 | | | 121.0 | |
Disposals | | — | | | (0.1) | | | — | | | — | | | (0.1) | |
Depreciation | | (14.2) | | | (8.2) | | | (5.5) | | | (0.9) | | | (28.8) | |
Currency Translation | | 5.2 | | | 3.1 | | | 1.5 | | | 0.1 | | | 9.9 | |
Net book value at June 30, 2024 | | 116.7 | | | 99.2 | | | 100.7 | | | 2.5 | | | 319.1 | |
| | | | | | | | | | |
Cost at June 30, 2024 | | 154.4 | | | 123.3 | | | 132.7 | | | 8.8 | | | 419.2 | |
Accumulated Depreciation at June 30, 2024 | | (37.7) | | | (24.1) | | | (31.9) | | | (6.3) | | | (100.1) | |
Net book value at June 30, 2024 | | 116.7 | | | 99.2 | | | 100.7 | | | 2.5 | | | 319.1 | |
The additions of CHF 121.0 million in the six-month period ended June 30, 2024 relate to the highly-automated warehouse in the United States ("Atlanta Warehouse"), which became partially operational during the six-months ended June 30, 2024, and other additional warehouse, retail store, and office leases.
The corresponding lease liabilities are reported in other current financial liabilities and other non-current financial liabilities, respectively. Refer to 4.3 Financial liabilities for additional information.
3.5 Intangible assets
| | | | | | | | | | | | | | | | | | | | | | | | | | |
(CHF in millions) | | Patents, licenses and other rights | | Software | | Goodwill | | Total |
| | | | | | | | |
| | | | | | | | |
Cost at January 1, 2023 | | 69.2 | | | 25.9 | | | 1.8 | | | 96.9 | |
Accumulated Depreciation at January 1, 2023 | | (15.0) | | | (11.6) | | | — | | | (26.6) | |
Net book value at January 1, 2023 | | 54.2 | | | 14.4 | | | 1.8 | | | 70.3 | |
| | | | | | | | |
Six month period ended June 30, 2023 | | | | | | | | |
Opening net book value | | 54.2 | | | 14.4 | | | 1.8 | | | 70.3 | |
Additions | | 0.1 | | | 1.9 | | | — | | | 2.0 | |
| | | | | | | | |
Depreciation | | (2.2) | | | (2.7) | | | — | | | (4.9) | |
| | | | | | | | |
Net book value at June 30, 2023 | | 52.1 | | | 13.5 | | | 1.8 | | | 67.4 | |
| | | | | | | | |
Cost at June 30, 2023 | | 69.3 | | | 27.8 | | | 1.8 | | | 98.9 | |
Accumulated Depreciation at June 30, 2023 | | (17.2) | | | (14.2) | | | — | | | (31.5) | |
Net book value at June 30, 2023 | | 52.1 | | | 13.5 | | | 1.8 | | | 67.4 | |
| | | | | | | | |
Cost at January 1, 2024 | | 70.4 | | | 29.0 | | | 1.8 | | | 101.2 | |
Accumulated Depreciation at January 1, 2024 | | (19.6) | | | (17.1) | | | — | | | (36.6) | |
Net book value at January 1, 2024 | | 50.9 | | | 11.9 | | | 1.8 | | | 64.6 | |
| | | | | | | | |
Six month period ended June 30, 2024 | | | | | | | | |
Opening net book value | | 50.9 | | | 11.9 | | | 1.8 | | | 64.6 | |
Additions | | 0.5 | | | 1.8 | | | — | | | 2.3 | |
| | | | | | | | |
Depreciation | | (2.3) | | | (2.9) | | | — | | | (5.2) | |
| | | | | | | | |
Net book value at June 30, 2024 | | 49.0 | | | 10.9 | | | 1.8 | | | 61.7 | |
| | | | | | | | |
Cost at June 30, 2024 | | 70.9 | | | 30.9 | | | 1.8 | | | 103.6 | |
Accumulated Depreciation at June 30, 2024 | | (21.9) | | | (20.0) | | | — | | | (41.9) | |
Net book value at June 30, 2024 | | 49.0 | | | 10.9 | | | 1.8 | | | 61.7 | |
As of June 30, 2024, patents, licenses and other rights include patents, domain names and license rights for trademarks.
As of June 30, 2024, software includes capitalized IT development costs not yet in use in the amount of CHF 0.7 million (December 31, 2023: CHF 0.3 million). In the six-month period ended June 30, 2024, costs recognized in general and administrative expenses within the income statement for research and development amount to CHF 3.2 million compared to CHF 4.8 million in the six-month period ended June 30, 2023.
Goodwill is allocated and monitored at the segment level. As of June 30, 2024 and December 31, 2023, there have been no goodwill impairments recognized. None of the goodwill is expected to be deductible for tax purposes.
3.6 Other current operating assets and liabilities
| | | | | | | | | | | | | | | |
(CHF in millions) | | 6/30/2024 | | 12/31/2023 | |
| | | | | |
| | | | | |
Prepaid expenses | | 29.4 | | | 20.8 | | |
Indirect taxes (VAT/GST) receivables | | 36.3 | | | 26.6 | | |
| | | | | |
Other current assets | | 29.8 | | | 13.7 | | |
Other current operating assets | | 95.5 | | | 61.2 | | |
| | | | | | | | | | | | | | | |
(CHF in millions) | | 6/30/2024 | | 12/31/2023 | |
| | | | | |
| | | | | |
Accrued expenses | | 163.4 | | | 81.2 | | |
Accrued personnel expenses | | 10.4 | | | 20.0 | | |
| | | | | |
Indirect taxes (VAT/GST) payables | | 30.6 | | | 24.0 | | |
Social security payables | | 17.5 | | | 6.7 | | |
Other payables | | 17.1 | | | 16.5 | | |
Other current operating liabilities | | 10.7 | | | 8.0 | | |
Other current operating liabilities | | 249.9 | | | 156.4 | | |
Accrued expenses mainly comprise accruals for outstanding vendor invoices related to marketing, freight, customs, selling and distribution. Accrued expenses increased by CHF 82.2 million as of June 30, 2024 compared to December 31, 2023, primarily due to the timing of certain customs and selling and distribution related expenses, and due to investments in brand building initiatives in the second quarter. Accrued personnel expenses mainly comprise accruals for costs related to bonus, vacation and participation plans.
4 Capital and financial management
4.1 Cash and cash equivalents
| | | | | | | | | | | | | | | |
(CHF in millions) | | 6/30/2024 | | 12/31/2023 | |
| | | | | |
| | | | | |
| | | | | |
Current bank accounts | | 393.8 | | | 210.3 | | |
Digital wallets | | 10.6 | | | 11.4 | | |
Fixed deposits | | 248.1 | | | 272.9 | | |
| | | | | |
| | | | | |
Cash and cash equivalents(1) | | 652.4 | | | 494.6 | | |
(1) Net cash and cash equivalents as of December 31, 2023 includes restricted cash in the amount of CHF 0.2 million. There is no restricted cash as of June 30, 2024.
Fixed deposits are comprised of short-term highly liquid investments which are readily convertible into cash with maturity of three months or less and are subject to an insignificant risk of change in value. Digital wallets mainly include deposit account balances at online payment platforms, primarily PayPal.
4.2 Other current financial assets
| | | | | | | | | | | | | | | |
(CHF in millions) | | 6/30/2024 | | 12/31/2023 | |
| | | | | |
| | | | | |
Credit cards | | 18.7 | | | 16.4 | | |
Deposits | | 13.9 | | | 14.6 | | |
Other current financial assets | | 5.6 | | | 3.2 | | |
Other current financial assets at amortized cost | | 38.2 | | | 34.2 | | |
| | | | | |
Other current financial assets at fair value through profit and loss | | — | | | — | | |
Other current financial assets | | 38.2 | | | 34.2 | | |
Due to their short-term nature, the carrying amount of other current financial assets at amortized cost corresponds to their fair value.
4.3 Financial liabilities
| | | | | | | | | | | | | | | |
(CHF in millions) | | 6/30/2024 | | 12/31/2023 | |
| | | | | |
| | | | | |
| | | | | |
Current lease liabilities | | 55.1 | | | 38.7 | | |
| | | | | |
Other financial liabilities | | 21.3 | | | 14.8 | | |
Total other current financial liabilities at amortized cost | | 76.4 | | | 53.4 | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Non-current lease liabilities | | 284.4 | | | 190.3 | | |
Other non-current financial liabilities | | 3.7 | | | — | | |
| | | | | |
Total other non-current financial liabilities at amortized cost | | 288.1 | | | 190.3 | | |
Total current and non-current financial liabilities | | 364.5 | | | 243.7 | | |
Due to their short-term nature, the carrying amount of other current financial liabilities at amortized cost corresponds to their fair value. As of June 30, 2024, other current financial liabilities include customer return refunds in the amount of CHF 15.9 million (December 31, 2023: CHF 12.4 million).
Contractual maturities of On’s undiscounted financial liabilities:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(CHF in millions) | | Due < 3 months | | Due 4 to 12 months | | Due 1 to 5 years | | Due > 5 years | | 6/30/2024 |
| | | | | | | | | | |
| | | | | | | | | | |
Trade payables | | 148.2 | | | — | | | — | | | — | | | 148.2 | |
| | | | | | | | | | |
Current lease liabilities | | 17.4 | | | 53.9 | | | — | | | — | | | 71.3 | |
| | | | | | | | | | |
Other financial liabilities | | 21.3 | | | — | | | — | | | — | | | 21.3 | |
Other current financial liabilities | | 38.8 | | | 53.9 | | | — | | | — | | | 92.7 | |
Non-current lease liabilities | | — | | | — | | | 201.9 | | | 127.0 | | | 328.8 | |
Other non-current financial liabilities | | — | | | — | | | 3.7 | | | | | 3.7 | |
| | | | | | | | | | |
Other non-current financial liabilities | | — | | | — | | | 205.6 | | | 127.0 | | | 332.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(CHF in millions) | | Due < 3 months | | Due 4 to 12 months | | Due 1 to 5 years | | Due > 5 years | | 12/31/2023 |
| | | | | | | | | | |
| | | | | | | | | | |
Trade payables | | 65.1 | | | — | | | — | | | — | | | 65.1 | |
| | | | | | | | | | |
Current lease liabilities | | 11.7 | | | 35.2 | | | — | | | — | | | 46.9 | |
| | | | | | | | | | |
Other financial liabilities | | 14.8 | | | — | | | — | | | — | | | 14.8 | |
Other current financial liabilities | | 26.5 | | | 35.2 | | | — | | | — | | | 61.7 | |
Non-current lease liabilities | | — | | | — | | | 135.1 | | | 81.3 | | | 216.4 | |
| | | | | | | | | | |
Other non-current financial liabilities | | — | | | — | | | 135.1 | | | 81.3 | | | 216.4 | |
The increase to current and non-current lease liabilities as of June 30, 2024 compared to December 31, 2023 relates primarily to the Atlanta Warehouse and other additional warehouse, office and retail store leases.
On July 7, 2023, On entered into a CHF 700.0 million multicurrency credit facility agreement ("credit facility"). On has an option to increase the total availability of borrowings under the credit facility in an aggregate amount of up to CHF 200.0 million, subject to the satisfaction of certain customary conditions. The credit facility had an initial term of three years, which has been extended for a period of one year, and may be extended again for a period of one year. As of June 30, 2024 and December 31, 2023, no amounts had been drawn under the new credit facility.
Of the total guarantees and letters of credit outstanding as of June 30, 2024 and December 31, 2023, which are discussed in 4.8 Commitments and contingencies, CHF 167.9 million and CHF 155.3 million, respectively, relate to the credit facility.
The credit facility also contains financial covenants that depend on our consolidated equity as well as our net debt to adjusted EBITDA ratio. As of and during the six-month period ending June 30, 2024, we were in compliance with all covenants under the credit facility.
The following assets have been pledged in relation to the credit facility:
| | | | | | | | | | | | | | | |
(CHF in millions) | | 6/30/2024 | | 12/31/2023 | |
| | | | | |
| | | | | |
Trade receivables | | 270.3 | | | 145.8 | | |
Inventory | | 232.9 | | | 285.2 | | |
Assets pledged | | 503.2 | | | 431.0 | | |
4.4 Financial result
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three-month period ended June 30, | | Six-month period ended June 30, | | |
(CHF in millions) | | 2024 | | 2023 | | 2024 | | 2023 | | |
| | | | | | | | | | |
| | | | | | | | | | |
Interest income | | 5.8 | | | 4.3 | | | 11.2 | | | 6.4 | | | |
Financial income | | 5.8 | | | 4.3 | | | 11.2 | | | 6.4 | | | |
Bank charges | | (1.6) | | | (0.5) | | | (3.2) | | | (1.0) | | | |
Interest expenses leases | | (4.1) | | | (1.3) | | | (7.3) | | | (2.3) | | | |
Interest expenses on employee benefits | | (0.1) | | | (0.1) | | | (0.2) | | | (0.3) | | | |
| | | | | | | | | | |
Financial expenses | | (5.9) | | | (1.9) | | | (10.8) | | | (3.6) | | | |
Foreign exchange gain/(losses) | | (4.5) | | | (48.5) | | | 72.3 | | | (39.7) | | | |
| | | | | | | | | | |
Foreign exchange gain / (loss) | | (4.5) | | | (48.5) | | | 72.3 | | | (39.7) | | | |
Financial result | | (4.6) | | | (46.1) | | | 72.7 | | | (36.9) | | | |
Foreign exchange loss for the three-month period ended June 30, 2024 decreased by CHF 44.0 million, to CHF (4.5) million, compared to CHF (48.5) million for the three-month period ended June 30, 2023. Foreign exchange gain / (loss) for the six-month period ended June 30, 2024 resulted in a foreign exchange gain of CHF 72.3 million, compared to a foreign exchange loss of CHF (39.7) million for the six-month period ended June 30, 2023. The foreign exchange gain / (loss) increases and decreases for the three and six month comparative periods were primarily due to the foreign exchange rate revaluation effects, in particular the CHF/USD exchange rate.
4.5 Share capital
The share capital amounts to CHF 33.5 million and is divided into 299,998,125 registered shares with a nominal value of CHF 0.10 each (the "Class A Shares") and in 345,437,500 registered voting rights shares with a nominal value of CHF 0.01 each (the "Class B Shares"). The share capital is paid in at 100%.
| | | | | | | | | | | | | | | | | | |
| | | | | | Class A Shares | | Class B Shares |
| | | | | | | | |
| | | | | | | | |
Shares issued and outstanding as of January 1, 2024 | | | | | | 284,215,277 | | | 345,437,500 | |
| | | | | | | | |
Sale of treasury shares related to share-based compensation | | | | | | 1,364,663 | | | — | |
Purchase of treasury shares | | | | | | (3,402) | | | — | |
| | | | | | | | |
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Shares issued and outstanding as of June 30, 2024(1) | | | | | | 285,576,538 | | | 345,437,500 | |
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Awards granted under various incentive plans not yet exercised or distributed as of June 30, 2024(2) | | | | | | 2,969,207 | | | — | |
Awards granted under various incentive plans with dilutive effects as of June 30, 2024 | | | | | | 3,335,706 | | | 12,467,091 | |
(1) As of June 30, 2024 there were 14,421,587 treasury shares held by On (December 31, 2023: 15,782,848).
(2) These awards require little or no further consideration to be exercised, and as such, have been included in the weighted average number of ordinary shares outstanding used to calculate basic EPS at June 30, 2024.
4.6 Earnings per share
Basic earnings per share (EPS) is calculated by dividing On’s net income for the period by the weighted average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing On’s net income for the period by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued at conversion of all the dilutive potential ordinary shares into ordinary shares. Dilutive effects arise from equity-settled awards from the Company's share-based plans. These shares are included even if the service conditions are not met, or respective performance conditions were fulfilled at the end of the reporting period.
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Three-month period ended June 30, | | 2024 | | 2024 | | 2023 | | 2023 | |
| | Class A | | Class B | | Class A | | Class B | |
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Weighted number of outstanding shares | | 288,082,955 | | | 345,437,500 | | | 284,127,877 | | | 345,437,500 | | |
Weighted number of shares with dilutive effects | | 3,430,738 | | | 12,467,091 | | | 3,464,956 | | | 11,792,673 | | |
Weighted number of outstanding shares (diluted and undiluted) | | 291,513,693 | | | 357,904,591 | | | 287,592,833 | | | 357,230,173 | | |
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Net profit (CHF in millions) | | 27.5 | | | 3.3 | | | 2.9 | | | 0.4 | | |
Basic EPS (CHF) | | 0.10 | | 0.01 | | 0.01 | | 0.00 | |
Diluted EPS (CHF) | | 0.09 | | 0.01 | | 0.01 | | 0.00 | |
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Six-month period ended June 30, | | 2024 | | 2024 | | 2023 | | 2023 |
| | Class A | | Class B | | Class A | | Class B |
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Weighted number of outstanding shares | | 287,985,587 | | | 345,437,500 | | | 283,859,171 | | | 345,437,500 | |
Weighted number of shares with dilutive effects | | 3,366,411 | | | 12,174,230 | | | 3,335,726 | | | 11,203,866 | |
Weighted number of outstanding shares (diluted and undiluted) | | 291,351,998 | | | 357,611,730 | | | 287,194,897 | | | 356,641,366 | |
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Net profit (CHF in millions) | | 109.1 | | | 13.1 | | | 42.5 | | | 5.2 | |
Basic EPS (CHF) | | 0.38 | | 0.04 | | 0.15 | | 0.01 |
Diluted EPS (CHF) | | 0.37 | | 0.04 | | 0.15 | | 0.01 |
4.7 Capital and other reserves
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(CHF in millions) | | 6/30/2024 | | 12/31/2023 | | |
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Share premium | | 756.9 | | | 756.9 | | | |
Legal reserves | | 48.3 | | | 42.3 | | | |
Equity transaction costs | | (8.7) | | | (8.7) | | | |
Tax impact on equity transaction costs | | 1.3 | | | 1.3 | | | |
Share-based compensation | | 372.0 | | | 349.1 | | | |
Capital reserves | | 1,169.7 | | | 1,140.8 | | | |
Exchange differences | | (3.9) | | | (8.1) | | | |
Actuarial gains and losses | | (0.7) | | | (2.1) | | | |
Taxes on actuarial gains and losses | | 0.1 | | | 0.4 | | | |
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Other reserves | | (4.4) | | | (9.8) | | | |
4.8 Commitments and contingencies
As of June 30, 2024, guarantees in the amount of CHF 168.2 million (December 31, 2023: CHF 155.6 million) were provided in favor of third parties.
The Swiss On entities form a VAT group and, hence, every entity participating in the group is jointly and severally liable for VAT debt of other group participants. Further On group entities participating in central cash pooling are jointly and severally liable for any debit position or outstanding overdraft in connection with them. In that context, gross balances in the amount of CHF 57.7 million have been offset as of June 30, 2024 (December 31, 2023: CHF 112.6 million).
On has signed several new lease contracts, which have not yet commenced as of June 30, 2024, and are therefore not yet recognized on the balance sheet. The total committed future outflow resulting of these lease contracts amounts to:
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(CHF in millions) | | 6/30/2024 | | 12/31/2023 | |
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Due < 1 year | | 10.6 | | | 15.8 | | |
Due 1 - 5 years | | 121.4 | | | 145.4 | | |
Due > 5 years | | 186.0 | | | 224.5 | | |
Commitments for future lease obligations | | 318.0 | | | 385.7 | | |
The majority of the future lease commitments relate to contracts for the Atlanta Warehouse and the warehouse in Belgium ("Beringen Warehouse"). The Atlanta Warehouse became partially operational during the six-months ended June 30, 2024, and is expected to be fully operational by 2025. The remaining future lease commitment is CHF 190.1 million (December 31, 2023: CHF 245.8 million).
The Beringen Warehouse began partially operating in 2024 during the six-months ended June 30, 2024, and is expected to be fully operational by 2026. The remaining future lease commitment is CHF 106.4 million (December 31, 2023: CHF 122.5 million).
The remaining other lease commitments primarily relate to a new store in Zurich, Switzerland.
5 Other disclosures
5.1 Provisions
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(CHF in millions) | | Social charges | | Long-service leave | | Asset retirement obligation | | Total |
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Balance as of January 1, 2023 | | 4.3 | | | 3.8 | | | 4.0 | | | 12.1 | |
thereof current | | 4.3 | | | 0.5 | | | 0.2 | | | 5.0 | |
thereof non-current | | — | | | 3.3 | | | 3.8 | | | 7.2 | |
Additions | | 4.2 | | | 1.8 | | | — | | | 6.0 | |
Release | | — | | | (0.7) | | | — | | | (0.8) | |
Utilization | | (0.6) | | | — | | | — | | | (0.6) | |
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Exchange differences | | — | | | (0.1) | | | (0.1) | | | (0.1) | |
Balance as of June 30, 2023 | | 7.9 | | | 4.8 | | | 4.0 | | | 16.7 | |
thereof current | | 7.9 | | | 0.5 | | | 0.1 | | | 8.6 | |
thereof non-current | | — | | | 4.3 | | | 3.8 | | | 8.1 | |
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Balance as of January 1, 2024 | | 6.8 | | | 5.8 | | | 4.5 | | | 17.1 | |
thereof current | | 6.3 | | | 0.7 | | | 0.1 | | | 7.1 | |
thereof non-current | | 0.5 | | | 5.1 | | | 4.3 | | | 10.0 | |
Additions | | 13.0 | | | 1.4 | | | 0.3 | | | 14.6 | |
Release | | (0.4) | | | (0.1) | | | — | | | (0.4) | |
Utilization | | (3.2) | | | — | | | — | | | (3.2) | |
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Exchange differences | | (0.1) | | | 0.1 | | | — | | | — | |
Balance as of June 30, 2024 | | 16.1 | | | 7.2 | | | 4.9 | | | 28.2 | |
thereof current | | 15.6 | | | 1.0 | | | 0.2 | | | 16.8 | |
thereof non-current | | 0.5 | | | 6.2 | | | 4.6 | | | 11.4 | |
Provisions for social charges include any costs related to local legal requirements related to share-based compensation. Provisions for asset retirement obligations mainly relates to the dismantling costs for the new headquarter in Zurich and retail stores.
5.2 Income taxes
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| | Three-month period ended June 30, | | Six-month period ended June 30, | |
(CHF in millions) | | 2024 | | 2023 | | 2024 | | 2023 | |
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Current income tax benefit/(expense) | | (8.1) | | | (18.0) | | | (18.6) | | | (33.6) | | |
Deferred income tax benefit/(expense) | | (3.8) | | | 28.0 | | | (17.7) | | | 36.5 | | |
Income tax benefit / (expense) | | (11.8) | | | 10.0 | | | (36.3) | | | 2.9 | | |
Income tax benefit / (expense) during the three-month and six-month period ended June 30, 2024 resulted in an income tax expense of CHF (11.8) million and CHF (36.3) million, respectively, compared to CHF 10.0 million and CHF 2.9 million income tax benefit for the same period in 2023. The effective tax rate ("ETR") for the three and six-month periods ended June 30, 2024 is 27.7% and 22.9%, respectively, compared to the ETR for the three and six-month periods ended June 30, 2023 of 149.3% and (6.5)%, respectively. The changes in income tax benefit / (expense) are mainly due to deferred income tax benefits during the three and six-month periods ended June 30, 2023, related to the elimination of intercompany profits in inventory as well as higher effectiveness of certain tax incentives.
5.3 Events after the balance sheet date
There were no material events after the balance sheet date.