1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
ONON
Event Date
2021-09-15
Sector
Consumer
Subsector
Textiles, Apparel & Luxury Goods
Offer Range
$24.00-$24.00
Shares Offered
31.1M
271.18M
$14.8B
11.5%
Implied Upside vs Midpoint
Description
Our Mission On was born in the Swiss Alps with one goal: to revolutionize the sensation of running based on the radical idea of soft landings followed by explosive take-offs. Or, as we call it, running on clouds. Innovation is at the core of On’s foundation and we focus our efforts on three main areas: performance, design and impact. We aspire to increase performance for athletes and everyday consumers by applying smart, distinct and sustainability-focused designs to our products. We believe evolving consumer preferences towards more active, healthier lifestyles and the casualization of fashion are the primary drivers of growth in today’s approximately $300 billion global sportswear industry. We believe our ethos and capabilities position On to benefit from these secular shifts. Our team culture is built around five core values or, as we call them, spirits: explorer, athlete, team, survivor, and positive spirit. These five spirits guide us in our approach to making a positive contribution in the right way. For ourselves. For runners. And for our planet. We believe how we do things is just as important as what we do. As a brand built around encouraging and supporting movement, we believe that it is the human spirit, not just the human body, that drives people to dream the big idea and move to make that dream a reality. Everything we do at On is designed to deliver on our mission: To ignite the human spirit through movement. Our History: Born in the Swiss Alps As a professional athlete, three-time World Champion and six-time Ironman Champion, Olivier Bernhard devoted himself to creating a running shoe that would give him the perfect running sensation. Olivier’s quest gave rise to the symbiosis of running experience and engineering expertise that would become On’s CloudTec technology. Dozens of prototypes were developed, but the basic concept – cushioned landing, explosive take-off – remained paramount throughout. It was this unique running sensation that convinced Olivier’s friends Caspar Coppetti and David Allemann to join Olivier in his quest. Together with Olivier, they formally established On in Zürich, Switzerland in January 2010. Just a month after the company was founded, early On prototypes won the ISPO Brand New Award, one of the most important prizes for innovation in sport. Test runners were enthusiastic and spoke of running on clouds. In July 2010, the first specialty running stores carried On shoes on their shelves. From these humble beginnings in Zürich, On set out in 2010 with a big ambition: to change the world of running for professionals and amateur runners alike. As On started to gain traction in several key markets, the three co-founders brought on Marc Maurer and Martin Hoffmann as equal partners in 2013 to scale and professionalize the business. Together, we have built a distinct culture that empowers the On team to make decisions and foster innovation, allowing On to rapidly scale while retaining the entrepreneurial mindset of a startup. We believe this partnership approach to leadership has been an integral part of On’s success over the past decade, and we expect it to continue. Our Present: Achieving Global Scale On is a premium performance sports brand rooted in technology, design and impact that has built a passionate global community of fans across more than 60 countries. We have a selective wholesale presence in approximately 8,100 premium retail doors globally and we generated 37.7% and 36.6% of our net sales in 2020 and the six-month period ended June 30, 2021, respectively, through our direct-to-consumer (“DTC”) channel, which is primarily driven by our website. We believe we are one of the fastest-growing scaled athletic sports companies in the world, having grown our net sales at an 85% compound annual growth rate (“CAGR”) from inception through 2020 to CHF 425.3 million for the year ended December 31, 2020. Our growth has continued in 2021, with net sales growing by 84.6% to CHF 315.5 million for the six-month period ended June 30, 2021 compared to the six-month period ended June 30, 2020. We focus on providing a premium product experience to customers wherever they are, and our brand resonates with our loyal customers around the world. As a Swiss company with a small home market, we opted to expand globally from the very beginning, and today we have a fast-growing presence across a number of international markets including, among others, Germany (first entered in 2011), the United States (2013), Japan (2013), China (2018) and Brazil (2018). We believe this global presence within the large global footwear and apparel market positions us well for future growth. We believe our Swiss heritage and our focus on innovating at the cutting edge of performance, design and impact differentiates us from other sports brands. We are committed to creating premium products that deliver strong performance. Our relentless culture of innovation has driven us to repeatedly introduce numerous groundbreaking technologies such as CloudTec (2010), purpose-engineered Speedboard (2013), Lightweight Trail Missiongrip (2016), ultra-lightweight yet versatile running apparel (2016), Helion Superfoam (2019) as well as Embedded CloudTec (2019) and the Invisible CloudTec (2020). These innovations are designed to change the experience of running and create continuous excitement for our fans as we bring new products to market. The exceptional performance, comfort and design of On footwear and sports apparel has led runners and a broader set of consumers to adopt On’s products in their everyday lives. We have supported their strong demand by creating performance products for an active lifestyle and exploration of nature and trails. Our Performance All Day range of products fuses function and aesthetics and includes “The Roger” franchise, which has been developed with Roger Federer after he joined On as an active co-entrepreneur in 2019 and investor. While developing a competition tennis shoe with Roger, he suggested extending On’s patented technology to a tennis sneaker family to re-invent how age-old tennis sneakers are made. This is enriching our performance product offering and we believe Roger’s perspectives and insights as a professional athlete will help improve our product development, marketing and fan experiences. Our Performance Outdoor products embrace a new approach to taking on the mountains: light and fast, with shoes and outdoor apparel engineered to free you from the weight and bulk of traditional outdoor gear. Athletes know that it takes significant effort to make performance look effortless. The On apparel range includes ultralight and stretchable fabrics, intelligently engineered key details and a style designed equally for the track and the street. Our “Essentials” range includes the running jacket, running shorts, sweatpants and other items that are versatile enough to be worn during running, exploring or simply during all-day activities, which is why we believe they are favored by our fans and continue to drive repeat purchases. All our products are engineered in Switzerland, and our in-house research and development teams work on the innovation, engineering, design, and testing of our products. With our heritage in the Alps, making a positive environmental impact has been a core value for our business since inception. On aims to minimize the environmental footprint of all our activities, with a special focus on using preferred materials, carbon dioxide (“CO2”) reduction and life-cycle circularity. In 2020, we announced Cyclon, our first 100% recyclable shoe, which is only available through an innovative monthly subscription model. Through its groundbreaking design and subscription model, Cyclon has already won the 2021 ISPO Award for Product of the Year and Sustainability Achievement. On is built on authenticity as our loyal following of professional athletes has inspired amateur runners and other fans to join the On community, which is growing larger every day. This community is full of passion, whether in a running club, a weekend jog, a trip to the coffee shop or competing at the highest levels of athletic competition. Our Net Promoter Score (“NPS”) of 66 is among the highest of all consumer facing brands surveyed, and more than 75% of customers recommend On to their friends. Our distribution strategy seeks to meet runners wherever they are. At the time of our founding, we first started selling in specialty running stores where discerning runners discovered On and became committed fans of our brand. Over time, we expanded our product range and broadened the range of our distribution partners. Today, our products are present in some of the most reputable outdoor, fashion and lifestyle retailers in the world, in addition to specialty running stores. In 2020 and the six-month period ended June 30, 2021, our wholesale channel accounted for 62.3% and 63.4% of our net sales, respectively. With our community and brand awareness growing globally, we organically started to scale our DTC channel through on-running.com over the last 9 years. DTC sales have increased significantly. Our DTC channel, which includes our e-commerce sites, a recently opened flagship retail store in New York City and four smaller format retail stores in China, generated 37.7% and 36.6% of our net sales in 2020 and the six-month period ended June 30, 2021, respectively. Through our DTC channel, we create an immersive customer experience from educational product innovation content to inspirational storytelling. Through these initiatives, we believe that we build deeper customer connection and loyalty and learn from data, while also realizing attractive margins. --- We were incorporated as a corporation (Aktiengesellschaft) under the laws of Switzerland on September 28, 2012. We are registered in the commercial register of the Canton of Zurich under company number CHE-137.374.435. Our principal executive offices are located at Pfingstweidstrasse 106, 8005 Zürich, Switzerland. Our telephone number at this address is +41 44 225 15 77. Our principal website is www.on-running.com.
On Holding AG annual income statement and balance sheet, FY 2022 to FY 2025, as reported in SEC filings (CHF).
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Revenue | CHF 1.2B | CHF 1.8B | CHF 2.3B | CHF 3.0B |
| Gross profit | CHF 685M | CHF 1.1B | CHF 1.4B | CHF 1.9B |
| Operating income | CHF 85.1M | CHF 180M | CHF 212M | CHF 377M |
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Total assets | CHF 1.4B | — | CHF 2.4B | CHF 2.8B |
| Total equity | CHF 970M | CHF 1.1B | CHF 1.4B | CHF 1.6B |
| Cash & equivalents | CHF 371M | — | CHF 924M | CHF 1.0B |