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adidas records strong momentum

Mar 6, 2015 Germany
adidas records strong momentum
Currency-neutral group sales were up by 6% in the fourth quarter and full year, reflecting a good performance by adidas. Currency-neutral group sales are expected to increase at a mid-single-digit rate in 2015
“2014 was a year with ups and downs for the adidas Group. But we tackled the challenges resolutely and achieved our adjusted top- and bottom-line targets”, stated Herbert Hainer, adidas Group CEO, adding: “In the fourth quarter, we grew at double-digit rates in Western Europe, Greater China, European Emerging Markets and Latin America. This shows that the momentum at adidas and Reebok is fully intact.”

Fourth Quarter

In the fourth quarter of 2014, group revenue grew by 6% on a currency-neutral basis. Currency-neutral sales in Retail and Wholesale increased by 20% and by 5%, respectively. Sales in Other Businesses decreased by 16% on a currency-neutral basis, due to a double-digit decline at TaylorMade-adidas Golf. Currency-neutral revenues in Western Europe increased by 13%, due to double-digit growth at adidas and Reebok. In European Emerging Markets, currency-neutral sales grew 16% as a result of double-digit revenue growth at both adidas and Reebok. Group sales in North America declined 4% on a currency-neutral basis, as mid-single-digit growth at adidas was more than offset by declines at TaylorMade-adidas Golf and Reebok. In Greater China, group sales increased by 11% on a currency-neutral basis, due to double-digit increases at adidas. Currency-neutral revenues in Other Asian Markets remained stable. Revenue at Reebok remained at the prior year level. In Latin America, adidas group sales were up 12% on a currency-neutral basis as a result of double-digit growth at adidas and Reebok. Currency translation effects had a slightly positive impact on group sales in euro terms. Group revenues grew 6% to reach 3.610 billion euros in the fourth quarter of 2014.

From a brand perspective, fourth quarter sales at adidas increased 11% on a currency-neutral basis, driven by double-digit sales growth in the Sport Performance training and running categories as well as at adidas Originals and adidas NEO. Sales at Reebok grew 1% on a currency-neutral basis. Double-digit sales increases in the fitness training, walking and studio categories were partly offset by decreases in the fitness running category and in Classics. Revenues at TaylorMade-adidas Golf declined 24% on a currency-neutral basis, as a result of TaylorMade-adidas Golf’s ongoing efforts to clean retail inventories and the timing of new product introductions compared to the prior year period. Sales at Reebok-CCM Hockey increased 2% on a currency-neutral basis as a result of strong sales growth in sticks.

Net income from continuing operations, excluding goodwill impairment losses, decreased to 10 million euros from 32 million euros in 2013. Including losses from discontinued operations of 71 million euros related to the planned Rockport divestiture, the group recorded a net loss attributable to shareholders excluding goodwill impairment losses of 62 million euros in the fourth quarter of 2014 versus net income attributable to shareholders of 42 million euros in 2013.

Full Year Results


In 2014, adidas revenue was up by 6% on a currency-neutral basis, driven by a double-digit sales increase at brand adidas and mid-single-digit growth at Reebok. Currency translation effects had a negative impact on the group sales in euro terms. Group revenues grew 2% to reach 14.534 billion euros.

Last year, currency-neutral Wholesale revenue increased 6%. While sales at adidas grew strongly, revenues at Reebok remained stable compared to the prior year. Currency-neutral Retail sales were up 21% versus the prior year as a result of double-digit sales increases at adidas and Reebok. Revenues in Other Businesses were down 19% on a currency-neutral basis, due to double-digit sales declines at TaylorMade-adidas Golf. Currency translation effects had a negative impact on segmental sales in euro terms.

In 2014, currency-neutral adidas Group sales grew in all regions except North America. Revenues in Western Europe increased by 8% on a currency-neutral basis, driven by double-digit sales growth in Germany and Spain as well as high-single-digit increases in the UK and France. In European Emerging Markets, group sales grew by 19% on a currency-neutral basis, with double-digit sales increases in all of the region’s major markets. Currency-neutral sales for the adidas Group in North America decreased 6%, due to sales declines in the US. Sales in Greater China increased 10% on a currency-neutral basis. Currency-neutral revenues in Other Asian Markets grew by 2%, driven by sales increases in South Korea and India. In Latin America, sales increased by 19% on a currency-neutral basis with double-digit increases in most markets, in particular Argentina, Mexico and Brazil. Currency translation effects had a mixed impact on regional sales in euro terms.

adidas group’s net income from continuing operations decreased by 27% to 564 million euros in 2014 from 773 million euros in 2013. Excluding the goodwill impairment losses, net income from continuing operations was down 22% to 642 million euros.

The group’s net income attributable to shareholders decreased to 490 million euros in 2014 from 787 million euros in 2013, reflecting a decline of  38% versus the prior year level. Excluding the goodwill impairment losses, net income attributable to shareholders decreased 32% to 568 million euros.

2015 Forecast

adidas Group' sales are expected to increase at a mid-single-digit rate on a currency-neutral basis in 2015. Despite a high degree of uncertainty regarding the economic outlook and consumer spending in Russia/CIS, the positive sales development will be supported by rising consumer confidence in most geographical areas. Currency translation is expected to positively impact the group’s top-line development in reported terms, given the recent strengthening of major currencies such as the US dollar and the Chinese renminbi versus the euro.

The Germany-based group expects net income from continuing operations to increase at a rate of 7% to 10%

“The adidas Group is and will remain a growth company. In 2015, we will see sales increases across all our brands, despite tough comparison with the 2014 World Cup year as well as the geopolitical crisis in Ukraine which negatively impacts our business in Russia/CIS. At the same time, we will ensure that our bottom line grows faster than our top line. With these improvements, we are laying solid foundations for our new strategic business plan which we will present at the end of March”, stated Herbert Hainer, CEO of the adidas group.

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