On Holding's Governance Evolution: A Catalyst for Long-Term Value Creation

In an era where corporate governance and board expertise are critical to sustainable growth, On Holding AG (ON) has emerged as a model of strategic foresight. By overhauling its governance structure and aligning leadership with global best practices, the Swiss sportswear innovator is poised to capitalize on its premium brand positioning and operational resilience. This article examines how On's governance reforms and board composition shifts are driving long-term shareholder value and why investors should take note.

The Governance Pivot: Expertise and Accountability

On's board transformation since 2023 reflects a deliberate move to embed strategic rigor and independent oversight. Key additions include Laura Miele, former CEO of Electronic Arts (EA), who brings deep expertise in technology and stakeholder engagement, and Dennis Durkin, ex-Microsoft CFO, whose financial acumen strengthens capital allocation discipline. These appointments, alongside existing members like Amy Banse (venture capital and digital strategy) and Alexandre da Costa Pérez (private equity), form a board uniquely positioned to navigate complex challenges—from AI integration to global supply chain dynamics.

The board's focus on ESG integration, cybersecurity, and succession planning signals a commitment to long-term resilience. For instance, On's Impact Progress Report underscores its circular economy initiatives, aligning with global ESG trends that demand transparency and measurable outcomes.

Strategic Moves: Driving Growth and Margin Expansion

On's governance upgrades are underpinned by bold operational strategies. The Dream On 2026 roadmap targets:
- 27% constant currency sales growth in 2025, pushing reported net sales to CHF 2.94 billion.
- Adjusted EBITDA margins exceeding 18% by 2026, up from 16.7% in 2024, fueled by DTC channel dominance (now 48.8% of sales) and premium pricing.
- Asia-Pacific expansion, where sales surged 95.6% (constant currency) in 2024, reflecting untapped market potential.

The LightSpray™ technology launch and apparel sales crossing CHF 100 million highlight innovation as a growth engine. Meanwhile, On's 50+ owned stores and e-commerce dominance reinforce control over customer experience, reducing reliance on wholesale partners.

Financial Fortitude: A Foundation for Ambition

On's financial discipline is evident in its CHF 1 billion cash balance (2024) and robust free cash flow generation. With gross margins hovering around 60.5%, the company is well-capitalized to invest in R&D, retail expansion, and sustainability initiatives without diluting shareholder returns.

Crucially, governance reforms have accelerated capital efficiency. By prioritizing shareholder returns—evidenced by buybacks and dividend growth—On mirrors trends seen in Japan's corporate sector, where dismantling cross-shareholdings and boosting transparency have unlocked value.

Risks and Considerations

While On's trajectory is promising, risks persist. Supply chain volatility and currency fluctuations could pressure margins, though its Swiss headquarters and DTC focus mitigate geographic exposure. Additionally, the sportswear market's crowded landscape demands relentless innovation—a hurdle On addresses through its tech-driven product pipeline.

Why Act Now?

On Holding's governance evolution and strategic execution create a compelling case for investment:
1. Leadership Excellence: A board with global, cross-industry expertise ensures prudent decision-making.
2. Profitable Growth: The DTC model and premium pricing sustain margin expansion.
3. Market Dominance: Asia-Pacific's surge and brand partnerships (e.g., Zendaya) fuel global appeal.
4. Resilience Built In: ESG integration and robust cash reserves buffer against macroeconomic shocks.

Conclusion: A Rare Blend of Vision and Execution

On Holding is not just a sportswear company—it is a testament to how governance innovation can supercharge long-term value. With a board equipped to navigate technological, environmental, and market shifts, and a strategy anchored in premiumization and operational excellence, On is primed for sustained outperformance. For investors seeking exposure to a high-margin, growth-oriented brand with structural tailwinds, On Holding presents a rare opportunity to capitalize on a transformation in motion.

Act now—before the crowd catches up.