Olivier Colombo - Consultant & Corporate Advisor
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Leatt: Recap of my meeting with Leatt's CEO Sean Macdonald at the ISPO 2016

Recap of my meeting with Leatt's CEO Sean Macdonald at the ISPO 2016 the largest Winter Sport Expo in the World that took place in Munich on Feb 24-27. Every year, more than 2,600 international exhibitors present their latest products from the outdoor, ski, action, performance sports, health & fitness to over 80,000 visitors from 110 countries.
 
I spent 2 hours with Sean and two of his team colleagues that are responsible for Scandinavia and (Germany/Austria /Switzerland). This is not the first time Leatt is at this event but this year they showed their new C Frame Ski Knee Brace to the public. Other upper body ski gear and knee pads were available. Leatt had a small booth in the Action Sports building. As you all know Leatt is nearly 100% Motorsports only, they are slowly entering new verticals like ski. The investment for this show was roughly 15'000$ but the most important was that Sean was able to see nearly all their Chinese suppliers at the event and did not have to go to China as he had planned recently. 
 
We spoke about the helmet media launch that took place 10 days ago in the US. Roughly 10 selected industry journalists attended the event. Some have already come out with positive feedback and others are working on articles, reviews and videos that will soon be available to the public. The same kind of launch will take place next week in the UK where here also only a selected list of motocross journalist have been invited to see the helmets and also try it. The first impression is the helmet has been well received in the US and retailers love the product and are pushing it hard. 
 
We also talked about how Leatt is pushing very young passionate motocross riders to wear protective gear. As @Ian Cassel mentioned a few messages ago Leatt is very dedicated to that youth space. They will be very loyal to the brand once they are teenagers and young adults. I was told that in Germany a race category that has motocross drivers from ages 8-12, close to 80% have neck braces and of those 70% wear Leatt. This tells you the excellent work the company had been doing and is continuing to do with this young generation. 
 
Sean would like to attend some conferences in the US this year. He recently was invited to one but the timing is not ideal as it will be roughly when they will release their 4Q. It will also be the time they will do their dealer and distributor event in Asia and Europe. But he is looking to be active in the US in May and June. I also suggested that Chris Leatt say a few words on the next conference call and gets his US visa so that he can be part of their next roadshow.
 
Very happy also with the + 4'000 Facebook likes that increase every month and would like to hit 200'000. Trying to find ways to be more visible in the social networking side but also to the financial community. 
 
Leatt plans to attend other trade shows in Europe like Eurobike largest Bike Expo in Europe (August 31 to September 4 in Friedrichshafen Germany) http://www.eurobike-show.com/ and Intermot largest Motorbike expo in Europe (October 4 to 9 in Cologne Germany) http://www.intermot-cologne.com/intermot/index-3.php  I will be present at both events as it is only 1 1/2 hour flight from where I live. You get a much better feeling of how the company is doing when you see those events. I'm sure I will not have as much access to management as I had this time. An interesting idea came up for the Intermot in October 2016. Leatt's distributor in GER-AUT-CH Hostettler Gmbh will have a much larger booth than normal and will dedicate half of it only to Leatt’s products. This also means by default they will have a much better location and be more visible at the Expo. This was possible thanks to Leatt's GER/AUT/CH sales that used to be the top salesperson at Hostettler Gmbh before joining Leatt a few years ago.
 
On the competitive front only a handful of brands where at the expo offering helmets, glasses and back protection:

POC http://www.pocsports.comwho was recently purchased from a private equity firm from the Middle East called InvestCorp.    



 
Dainese http://www.dainese.com/us_en/ an Italian firm also purchased by the same PE firm had 8 different back protectors and also showed the new ski airbag. I must honestly say I was not impressed at all by the technology. 














The main competitor in that space is a French startup called In&Motion.http://www.inemotion.com/ it did receive the ISPO 2016 new innovative product award and was also the innovation award at CES 2016. I had the opportunity to speak to one of the founders. Their partner is POC and they are active in ski-cross events. Very neat technology that has gone through thousands of hours of testing. The airbag inflates in less than 1/100 sec. If it feels the athlete is in an unorthodox position, it will automatically inflate. This product will be sold for 1'200Euros...It will be mostly for athletes who will get it for free form their sponsors.
 


UFOhttp://www.ufoplast.com an Italian company that has also a good presence in the motocross world had some various protection gear to show.
 









Scott Body Protectionhttps://www.scott-sports.com/global/en was also there with a few body protectors, but nothing revolutionary
 









I view Leatt as a very exciting company to follow as it continues to innovate, protect athletes and expands into new sports. Their 1 ever helmet launch is a major catalyst for the next few years. Stock is only trading at 1x sales, no debt over 600’000$ in cash and insiders own 42% of the outstanding shares.