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adidas aiming to accelerate growth until 2020

Mar 27, 2015 Germany
adidas aiming to accelerate growth until 2020
The Germany-based company has set ambitious goals to increase sales and profitability over the next five years
At its Investor Day in Herzogenaurach, the adidas group presented its new strategic business plan until the year 2020. The Creating the New strategy aims at further accelerate growth by significantly increasing brand desirability.

The new business plan is built around three major strategic choices: speed, cities and open source. To complement this, the adidas group will further increase its sales through controlled space activities to above 60% of sales. At the same time, the group aims to expand its eCommerce business to above 2 billion euros by 2020, by implementing a strong omni-channel approach. Further, the company is going to evolve production capabilities to dramatically expand product customisation options for its consumers

With 80% of global GDP generated in cities and global trends being increasingly shaped in metropolitan areas, the adidas group has set the objective to continue its growth in all relevant geographic markets with a focus on six global key cities: Los Angeles, New York, London, Paris, Shanghai and Tokyo. Across these cities, the adidas group will focus on investing in talent, attention and marketing spend.

As for the open source strategy, Eric Liedtke, Executive Board Member responsible for Global Brands, further explained the idea: "We are closest to every consumer with our unique brand portfolio.  In the future, we will not only talk to and talk with our consumers. We will be the first sports company that invites athletes, consumers and partners to be part of its brands. We will open up so that they can co-create the future together with us,"

With their strategic choices focusing in brand desirability, the adidas group expects to generate high-single-digit currency-neutral sales growth per year on average over the next five years. Net income forecasted to increase by around 15% on average per year until 2020 compared to the expected 2015 results. Going forward, the company intends to pay out between 30% and 50% of its net income attributable to shareholders (previously: 20%-40%). Furthermore, the adidas Group will continue its multi-year shareholder return programme of up to € 1.5 billion, launched in the fourth quarter of 2014.

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