Adidas Ag · XETR:ADS
Adidas — German Investment Seminar 2014
67 slides from Adidas's conference presentation, Jan 13, 2014
Slide 1: German Investment Seminar 2014
German Investment Seminar 2014 Commerzbank New York City January 13-15, 2014
Slide 2: Operational and Financial Highlights
OPERATIONAL AND FINANCIAL HIGHLIGHTS 2
Slide 3: adidas Group Delivers Solid Performance In 9M
adidas Group Delivers Solid Performance In 9M • Sales remain stable on a currency-neutral basis • Gross margin improves 2.1pp to 49.8% • Operating margin up 0.4pp to 10.5% • Net income and EPS stable • Net borrowings reduced by 47% to € 180 million 3
Slide 4: Emerging Markets Outpace Developed Markets In 9M
Emerging Markets Outpace Developed Markets In 9M (8%) Western Europe (1%) +1% North America European Emerging Markets +7% Greater China +15% +2% Latin America Other Asian Markets Sales development on a currency-neutral basis. 4
Slide 5: Key Category Highlights In 9M
Key Category Highlights In 9M 5
Slide 6: 2013 Impacted By Negative Market Developments
2013 Impacted By Negative Market Developments • Currency translation negatives, e.g. Japanese yen, Latin American currencies • Softness in the global golf market • Changing retail environment in Russia/CIS as well as distribution centre constraints • Inflationary risks (especially labour costs) 6
Slide 7: adidas And Reebok Gross Margins Improve Strongly
adidas And Reebok Gross Margins Improve Strongly Q3 2013 Change 9M 2013 Change Net sales (€ in millions) 3,072 0%1) 8,478 0%1) Gross margin 48.7% +2.1pp 48.4% +2.1pp Net sales (€ in millions) 439 +5%1) 1,172 (1%)1) Gross margin 40.4% +6.4pp 39.8% +5.0pp 1) Currency-neutral. 7
Slide 8: 9M Group Gross Margin Improves 2.1pp
9M Group Gross Margin Improves 2.1pp Q3 2013 9M 2013 • Pricing and favourable Wholesale 43.9% 43.3% product mix +2.7pp +2.7pp • Overproportionate growth in Retail 61.5% 62.6% emerging markets +2.5pp +1.6pp • Larger share of higher-margin Other Businesses 35.3% 41.6% Retail sales (7.4pp) (2.4pp) 49.3
Slide 9: Operating Working Capital As A Percentage Of Sales Remains At Healthy Levels
Operating Working Capital As A Percentage Of Sales Remains At Healthy Levels 22 • Inventories increase 12% 21 on a currency-neutral basis 20.6 • Receivables up 2% on a 20.3 20.3 currency-neutral basis 20 20.0 19.9 20.0 • Payables increase 12% on a currency-neutral basis 19 Q2/12 Q3/12 Q4/12 Q1/13 Q2
Slide 10: Net Borrowings Decline 47%
Net Borrowings Decline 47% Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 448 • Net borrowings reduced by € 157 million to € 180 million 300 • Ratio of net borrowings/EBITDA decreases to 0.1 (2012: 0.2) • Equity ratio increases 0.8pp -100 to 49.3% (2012: 48.6%) (94) (180) (180) (318) (337) -500 Net borrowings
Slide 11: adidas Group Confirms 2013 Full Year Outlook
adidas Group Confirms 2013 Full Year Outlook Group sales (currency-neutral) low-single-digit increase Wholesale sales (currency-neutral) low-single-digit increase Retail sales (currency-neutral) high-single-digit increase Other Businesses sales (currency-neutral) low- to mid-single-digit increase Gr
Slide 12: Strategic Initiatives and Outlook
STRATEGIC INITIATIVES AND OUTLOOK 12
Slide 13: adidas Group To Increase Momentum In 2014
adidas Group To Increase Momentum In 2014 Outlook • Group sales to increase at a high-single-digit rate • Operating margin to increase around one percentage point 13
Slide 14: adidas Demonstrates Leadership In Football
adidas Demonstrates Leadership In Football 14
Slide 15: adidas Introduces The Samba Collection
adidas Introduces The Samba Collection 15
Slide 16: WC 2014 Federation Jerseys Launched
WC 2014 Federation Jerseys Launched 16
Slide 17: Running To Maintain Double-Digit Pace
Running To Maintain Double-Digit Pace 17
Slide 18: Boost Roll Out Accelerates In 2014
Boost Roll Out Accelerates In 2014 18
Slide 19: Springblade To Be Introduced Globally
Springblade To Be Introduced Globally 19
Slide 20: adidas Revolutionises Smart Running
adidas Revolutionises Smart Running 20
Slide 21: Turning Up The Heat With Hollow Fibre ClimaWarm+
Turning Up The Heat With Hollow Fibre ClimaWarm+ 21
Slide 22: adidas To Broaden Challenge In Basketball
adidas To Broaden Challenge In Basketball 22
Slide 23: Originals – An Industry Success Story
Originals – An Industry Success Story 23
Slide 24: Originals Broad And Deep Offering Drives Success
Originals Broad And Deep Offering Drives Success 24
Slide 25: Stan Smith Is Back
Stan Smith Is Back 25
Slide 26: Further Extension Of Action Sports In 2014
Further Extension Of Action Sports In 2014 26
Slide 27: Originals Expands Its Distribution
Originals Expands Its Distribution 27
Slide 28: NEO Capturing A New Consumer
NEO Capturing A New Consumer 13% never shopped with the 39% are within our target age 60% of the consumers adidas Group before group of 14-19 are girls 28
Slide 29: The Future Of NEO Is Bright
The Future Of NEO Is Bright 2013: 2009: € 188 million € 700 million 29
Slide 30: The Future Of NEO Is Bright
The Future Of NEO Is Bright OUR GOAL IS TO BE IN EVERY TEENAGERS WARDROBE BY 2020 30
Slide 31: NEO Consumer Centric Approach
NEO Consumer Centric Approach INFLUENCE ACCESS ADVOCACY we influence through our heroes leveraging we provide access to our brand we drive advocacy through their platforms and fan base. through digital activities & competitions. money can’t buy experiences. 31
Slide 32: Expansion Of New NEO Retail Format
Expansion Of New NEO Retail Format 6 STORES IN GERMANY 5 STORES IN POLAND 5 STORES IN CZECH REPUBLIC 32
Slide 33: Reebok's Objective: #1 Fitness Brand
Reebok’s Objective: #1 Fitness Brand 33
Slide 34: Fitness Is The Formula For Success
Fitness Is The Formula For Success PARTICIPATION GYMS SPEND 34
Slide 35: Reebok's Consumer Is The Fit Generation
Reebok’s Consumer Is The Fit Generation 25 YEARS OLD 4x A WEEK 3 ACTIVITIES 35
Slide 36: Committed For Qualitative Sales Growth
Committed For Qualitative Sales Growth Net Sales Development Gross Margin Development 2.0 >40.0% 1.6 35.9% 2012 2015 2012 2015 36
Slide 37: Reebok Building Sustainable Fitness Activities
Reebok Building Sustainable Fitness Activities 37
Slide 38: Training - The Brand Of The CrossFit Community
Training - The Brand Of The CrossFit Community 38
Slide 39: Running - Building With The Spartan Race
Running - Building With The Spartan Race 39
Slide 40: Studio – Accelerating Visibility Through Les Mills
Studio – Accelerating Visibility Through Les Mills 40
Slide 41: Reebok ONE – Bringing The Fitness Community Together
Reebok ONE – Bringing The Fitness Community Together 41
Slide 42: Reebok Sees Strong Product Innovation In 2014
Reebok Sees Strong Product Innovation In 2014 42
Slide 43: TMaG To Underpin Market Dominance In Drivers
TMaG To Underpin Market Dominance In Drivers THE NEW STANDARD IN POWER & CONTROL 43
Slide 44: TMaG To Extend Leadership In Irons
TMaG To Extend Leadership In Irons 44
Slide 45: adidas Golf To Increase Market Share In Footwear
adidas Golf To Increase Market Share In Footwear 45
Slide 46: Initiatives To Improve Efficiency In Markets And Channels
Initiatives To Improve Efficiency In Markets And Channels One aligned strategy in Western Europe Joining forces in North America 46
Slide 47: Becoming A World-Class Retailer With Improving KPI's
Becoming A World-Class Retailer With Improving KPI’s +26% +6% +10% 47
Slide 48: New Store Concept: Homecourt
New Store Concept: Homecourt 48
Slide 49: New Store Concept: Neighbourhood
New Store Concept: Neighbourhood 49
Slide 50: New Store Concept: FitHub
New Store Concept: FitHub • 12 markets • 797 franchise stores • 266 concept stores 50
Slide 51: Improving Our Consumer Service Model
Improving Our Consumer Service Model 51
Slide 52: adidas AG Executive Board Expanded To Five Members
adidas AG Executive Board Expanded To Five Members Roland Auschel Eric Liedtke Executive Board Member Executive Board Member Global Sales Global Brands* * = as of March 6, 2014 52
Slide 53: adidas Group To Increase Momentum In 2014
adidas Group To Increase Momentum In 2014 Outlook • Group sales to increase at a high-single-digit rate • Operating margin to increase around one percentage point 53
Slide 54: IR And Media App – Available For iPhone And iPad
IR And Media App – Available For iPhone And iPad Investor Relations and Media App 54
Slide 55: Questions & Answers
QUESTIONS & ANSWERS 55
Slide 56: Upcoming Event Dates
Upcoming Event Dates Mar 5, 2014 Full Year 2013 Results May 6, 2014 First Quarter 2014 Results May 8, 2014 Annual General Meeting May 9, 2014 Dividend Payment1) Aug 7, 2014 First Half 2014 Results 1) Subject to Annual General Meeting Approval. 56
Slide 57: adidas Group
adidas GROUP
Slide 58: Route 2015 Financial Milestones
Route 2015 Financial Milestones 58
Slide 59: 2015 Sales Targets For Global Brands
2015 Sales Targets For Global Brands 2010 2015 € 6.5 billion € 8.9 billion € 2.1 billion € 3.9 billion € 1.9 billion € 2.0 billion € 1.4 billion € 2.2 billion 59
Slide 60: Well On Track To Deliver 11% Operating Margin By 2015
Well On Track To Deliver 11% Operating Margin By 2015 Quality of distribution Emerging Market Manufacturing growth excellence Retail Performance proficiency driven Trade Terms Organisational Infrastructure set-up modernisation Range reduction 60
Slide 61: Brand Architecture – Portfolio Strategy
Brand Architecture – Portfolio Strategy 8% 14% 22% 14% 26% 10% 6% PURE ATHLETIC ATHLETIC BRAND SPORT STYLE STYLE PERFORMER STYLE CLASSIC DRIVEN INSPIRED ADOPTER SETTER SPORTS COMPETITIVE SPORTS ACTIVE SPORTS CASUAL SPORTS FASHION 12% 78% 10% 61
Slide 62: Brand Architecture – Business Reality
Brand Architecture – Business Reality 8% 14% 22% 14% 26% 10% 6% PURE ATHLETIC ATHLETIC BRAND SPORT STYLE STYLE PERFORMER STYLE CLASSIC DRIVEN INSPIRED ADOPTER SETTER SPORTS COMPETITIVE SPORTS ACTIVE SPORTS CASUAL SPORTS FASHION 12% 78% 10% 62
Slide 63: adidas Sport Performance – Making The Athlete Better
adidas Sport Performance – Making The Athlete Better stronger natural cooler smarter faster 63
Slide 64: adidas Sport Style – Multi-Label Strategy
adidas Sport Style – Multi-Label Strategy 12 - 19 YEARS 16 - 24 YEARS 24 - 36 YEARS 35+ YEARS FOR THE FROM THE FOR THE OUTWARDLY FOR THE STYLE-ADOPTING TRENDSETTER CONFIDENT, SOPHISTICATED, HIGH SCHOOL KID TO THE FORWARD- ACTIVE MAN MAINSTREAM KID THINKING INDIVIDUAL 64
Slide 65: Reebok Building Sustainable Fitness Activities
Reebok Building Sustainable Fitness Activities 65
Slide 66: The New Symbol Of Reebok
The New Symbol Of Reebok . , ooo MENTAL SOCIAL adidas GROUP
Slide 67: Reebok Focusing On 10 Key Initiatives
Reebok Focusing On 10 Key Initiatives 1 3 5 7 9 2 4 6 8 10 67