Press Conference Speech
16 July 2009, OutDoor, Friedrichshafen, Germany
Rolf G Schmid, President, European Outdoor Group; CEO, Mammut Sports Group
Given by Mark Held, Secretary General of the European Outdoor Group on behalf of Rolf Schmid.

Welcome
On behalf of the European Outdoor Group a warm welcome to the 16th OutDoor Trade Fair.

Since our last fair, the world has been taken up with stories of economic crisis and difficult times for many industrial sectors. We hope that OutDoor 2009 will prove to be an oasis in troubled times, that will refresh you and leave you feeling more able to face the world. In fact the very feeling we are left with after being out in the great outdoors that we love so much.

But describing outdoor as an ‘Oasis’ doesn’t mean that we are necessarily immune from the world’s woes and neither would I want to give the impression that we are anything other than aware, ready and prepared to do what we have to to keep our companies successful in difficult times. But the simple fact remains that so far; outdoor has weathered the crisis remarkably well.

So I will touch on some of these issues and will also update you on our initiatives in other areas such as sustainability, lobbying and the great work the EOG Association for Conservation is doing to protect wild areas.

Outdoor and the Economy
It seems to me that every time I listen to the news, or read a paper, the ‘Credit Crunch’ is the main topic. (Not withstanding Michael Jackson of course!). Nothing but bad news and with it, the potential for us all to talk ourselves down into a deep, collective abyss. But national media with its fixation on a single unified message completely misses the fact that economics have a differing impact on different sectors. Outdoor activities are for many of our customers, a deep-seated passion that works as the perfect antidote to the stresses of modern life. I have stated previously that I didn’t believe that our consumers would stop their outdoor activities as a result of this crisis and every single day they are proving me right. Which means of course that the outdoor sector has not been as badly affected as other business areas, a fact I know only too well from the results of industrial companies in our group.

But what does this mean in reality? The common agreement about the figures for 2007 was for a growth figure of 3.4%. Giving an overall size of the European Outdoor market of between €5.4 to €10.4 billion depending on which part of the market you focus on. The European Outdoor Group looks at the top specialist end of the market and hence the 5.4, whilst NPD’s figure of 10.4 billion figure takes the whole of the wider market including own label, fishing, hunting and snowsports. So that was the position at the end of 2007, but what about 2008? By the end of the year the European sports sector is estimated to have lost 1% of its total turnover, whilst the US market is estimated to have shrunk by 2%. But in the outdoor sector things have panned out differently with the latter half of 2008 benefitting from a cold and snowy winter, in fact perfect conditions for the outdoor and ski industry. Now before we get carried away, I am not unfortunately about to announce record growth, nor am I about to show you a chart with definitive figures, as the current situation is complex and difficult to assess. What I will say however is that the current estimates from a well known organisation of 1% growth for the wider, 0% growth for core outdoor, seem to us to be difficult to reconcile. What evidence you might ask do I have for this statement? Well for a start I find myself thinking about the results of some of the key companies such as The North Face, Jack Wolfskin and my own company, the Mammut Sports Group. For these three companies alone the average growth for 2008 amounted to over 16%! Sure there are brands that have not done as well but qualitative information that is available to us indicates that the companies that exhibit at OutDoor have collectively seen a modest increase in turnover for 2008 and perhaps more importantly, have relatively healthy orders for 2009. Putting a figure on this is as I have explained a difficult task and we have to consider that some markets are healthier than others, but overall our estimate for 2008 was for a growth of between 1.2 and 1.4%. This means that we believe the core specialist market to be worth between €5.745 billion and €5.755 billion Euros at retail prices.

These figures would have been even better but for one area, and this is the wider lifestyle market that is suffering in much the same way that general clothing retail is suffering.

So to summarise, our key points are:
1. Outdoor is a success story of the economic crisis
2. Outdoor activists are as committed as ever
3. Lifestyle sales are the most vulnerable as these are subject to general retail trends and this brings into focus the danger of chasing popular trends
4. In many respects it is the weather that is the dominant factor
5. The outlook for our sector in 2009 is good considering the circumstances and in particular the figures for Germany look set to outstrip the growth in 2008
6. We are as an industry hugely grateful for the positives that we have but are very much on alert and prepared for any changes that might alter the situation.

Sustainability
Whilst the economic situation has been uppermost on many people’s minds, as an industry we cannot allow such issues to halt progress in other areas. I won’t labour the point in too much detail, but I would just like to state that as an industry sector that relies on the natural environment, we are taking our responsibilities in terms of sustainability very seriously. A year ago we held an open meeting at which any company involved in the outdoor sector was welcome and at which we discussed how we collectively approach and develop the issue. Out of this meeting the Sustainability Working Group was established and has been working hard ever since. Chaired by Cortney McDermott of The North Face and Co Chaired by Kilian Hochrein and Anne Girard of WL Gore and Petzl respectively, this group has been assessing the current situation and how we need to develop to ensure our companies are at the forefront in terms of sustainability. Core sub groups are working on issues such as Standards and Regulations and End of Life Options and they are also working closely with their sister group in the US. Here at OutDoor they will be holding an open meeting to give an update on progress and some industry specific information on the EU REACH regulations. I would urge anyone interested to attend this meeting, which will be held tomorrow at the early time of 08:30 in this room.

Industry Representation
There are aspects of the work of the European Outdoor Group that are not often seen publicly and one of these is the lobbying work done on behalf of not only our members, but the whole outdoor industry. In particular the European Outdoor Group has been very active in the EU areas of Anti Dumping Duties, Personal Protective Equipment Classification and it is now working on regulations concerning Biocides. On the international stage, the outdoor industry is only as strong as its collective will and determination to have a joined up approach to legislation. The European Outdoor Group provides this.

New Facilities at OutDoor
I am sure that all of you will be aware of the opening of the new facilities here at Messe Friedrichshafen. We believe that these will add to the scope, quality and presence of OutDoor and we would like to offer both our thanks and congratulations to the team at Messe Friedrichshafen for this wonderful achievement. Similarly we would also extend the same thanks to the hard working OutDoor Project Team led by Stefan Reisinger, who do a fantastic job of working with our industry to ensure that OutDoor remains the most important fair in our sector.

On a positive note
I would like to end by reminding everyone of another great news story about our industry.

I have already mentioned our reliance on there being a natural outdoor environment in which we can undertake our activities, and taking this to the next step we feel strongly that we should be actively involved in protecting this environment. The EOG Association for Conservation was set up three years ago to raise funds from within the outdoor industry in order to support grass roots conservation projects. Since its first small steps and including this years grants, the Association will have given over
€500,000 to environmental projects which range from natural forest regeneration to protecting endangered species. Many of these projects are in the former Eastern block where there are still large areas of natural habitat, but there are also major economic pressures and with these, threats to the environment. The Association represents yet another side of the collective will of the industry and I feel proud to be part of a sector that is reaching out and making a real difference. We feel half a million Euros is just the beginning and there is much, much more we can do, so I urge you all to attend the Association’s press conference and find out first hand. The press conference will take place tomorrow at 13:00 in this very room.

Have a great OutDoor
On behalf of the Board of the European Outdoor Group, it is my pleasure to wish you all a successful and enjoyable OutDoor 2009.

Notes to Editors:
The European Outdoor Group is an association set up to represent the common interests of the European outdoor industry.
Founded in 2003 the European Outdoor Group has 47 members, which include some of the largest brands in the world. The combined strength of the member brands, and a close cooperation with national outdoor associations, provides an extremely powerful force to represent the European outdoor industry in a constructive and positive manner.
Further information about the European Outdoor Group can be found on the website:
www.europeanoutdoorgroup.com
Or contact Vanessa Knowles:

Tel: +44 1942 886402, vanessa.knowles@europeanoutdoorgroup.com