Adidas Ag · XETR:ADS
Adidas — Non-Deal Roadshow (April 2012)
46 slides from Adidas's roadshow presentation, Apr 3, 2012
Slide 1: Roadshow Presentation - FY 2011
Roadshow Presentation - FY 2011 Chicago, April 3, 2012 John Paul O’Meara VP Investor Relations, adidas Group
Slide 2: Operational Highlights
OPERATIONAL HIGHLIGHTS adidas
Slide 3: adidas Group Enjoys Strongest Organic Growth In 5 Years
adidas Group Enjoys Strongest Organic Growth In 5 Years • Record sales of € 13.3 billion • Sales increase 13% c.n. • Strongest growth since 2006 • EPS increases 18% to € 3.20 • Net cash € 90 million 3
Slide 4: Sales Grow Across All Geographies In 2011
Sales Grow Across All Geographies In 2011 +10% Western Europe1) +22% European Emerging Markets1) +15% North America1) +23% Greater China1) +5% Other Asian Markets1) +10% Latin America1) 1) Sales development on a currency-neutral basis 4
Slide 5: adidas And TMaG Drive Growth In North America
adidas And TMaG Drive Growth In North America • Group sales up 15% c.n. in 2011 • adidas and TaylorMade-adidas Golf grow at strong double-digit rates • Reebok continues to grow, up 4% c.n. • Strong market share gains in the high-quality mall and sporting goods channel 5
Slide 6: Market Leadership Expanded In Russia/CIS
Market Leadership Expanded In Russia/CIS • Comp store sales up 24% • adidas and Reebok both grow above 20% • adidas clearly setting the pace with key categories such as Training, Running and Outdoor • Reebok exploits strong product momentum 6
Slide 7: Greater China Outperforming The Market
Greater China Outperforming The Market • Record full year sales of € 1.2 billion • adidas Sport Performance enjoys strong momentum in all major product categories • adidas Originals and adidas NEO Label drive Sport Style sales up 25% c.n. • TaylorMade-adidas Golf up 22% c.n. due to strong product in
Slide 8: Western Europe Up 10% In Difficult Environment
Western Europe Up 10% In Difficult Environment • Western Europe sales up 10% c.n. in a region suffering significant economic pressure • Double-digit sales growth at adidas and TaylorMade-adidas Golf • Strong start for major sporting event related products 8
Slide 9: Growth In All Product Categories In 2011
Growth In All Product Categories In 2011 +18% c.n. +8% +10% c.n. c.n. Footwear Apparel Hardware 9
Slide 10: Strong Momentum At adidas And Reebok
Strong Momentum At adidas And Reebok Q4 2011 Change FY 2011 Change Net sales (€ in millions) 2,400 14%1) 9,867 14%1) Gross margin 43.5% (2.3pp) 46.1% (1.1pp) Net sales (€ in millions) 495 (3%)1) 1,962 6%1) Gross margin 34.1% (1.8pp) 36.3% 0.4pp 1) Currency-neutral 10
Slide 11: adidas Goes “all in” For Fastest Growth Rate In 13 Years
adidas Goes “all in” For Fastest Growth Rate In 13 Years • adidas brand sales increase 14% c.n. to € 9.9 billion • Biggest ever media campaign: “all adidas” • 370 million or 80% of next- generation consumers reached • 32 million Facebook fans and counting 11
Slide 12: adidas Introduces “The Boot With A Brain”
adidas Introduces “The Boot With A Brain” • Launch of the adizero f50 miCoach in November 2011 • The lightest and smartest football boot hits the market • Footwear sales up over 20% c.n., extending the adidas global market leadership position 12
Slide 13: adidas Running Achieves Goal Of Double-Digit Growth
adidas Running Achieves Goal Of Double-Digit Growth • Running sales up 19% c.n. • Strong growth in adizero, Supernova and Clima product franchises 13
Slide 14: adidas Basketball’s Crazy Light A Slam Dunk
adidas Basketball’s Crazy Light A Slam Dunk • adizero Crazy Light and Derrick Rose signature shoe highlights of the year • ASP increases due to power of innovation 14
Slide 15: adidas Acquires Five Ten To Expand Reach In Outdoor
adidas Acquires Five Ten To Expand Reach In Outdoor • Sales increase 40% c.n. in 2011 • Award-winning Terrex collection drives sales growth • Acquisition of Five Ten, the “Brand of the Brave” 15
Slide 16: adidas Sport Style Sales Up 24%
adidas Sport Style Sales Up 24% • Sport Style sales increase 24% c.n. to over € 2.6 billion • Popularity of adidas Originals and expansion of adidas NEO driving growth • adidas Originals Facebook followers rise from 7.1 million to 13.3 million in only 12 months 16
Slide 17: Reebok Sales Grow 6% Currency-Neutral
Reebok Sales Grow 6% Currency-Neutral • Reebok back on the map • 3 product hits: EasyTone, ZigTech and RealFlex • Since 2009: Sales up more than 20% and gross margin up over 4 percentage points 17
Slide 18: Strength In ZigTech And RealFlex Offsets Toning Declines
Strength In ZigTech And RealFlex Offsets Toning Declines • Strong growth in Men’s footwear of 37% c.n. • Overall ASPs increase 5% for the year 18
Slide 19: TaylorMade-adidas Golf On Top Of The World
TaylorMade-adidas Golf On Top Of The World • Sales break through the € 1 billion barrier, increasing 16% c.n. • R11 drivers the story of the year • Market-leading position in metalwoods and irons in USA 19
Slide 20: Financial Highlights
adidas FINANCIAL HIGHLIGHTS 20
Slide 21: Successful Mitigation Of Significant Input Cost Pressures
Successful Mitigation Of Significant Input Cost Pressures Q4 2011 FY 2011 • Higher input costs Wholesale 36.4% 40.0% (2.8pp) (1.3pp) Retail 61.1% 62.6% • Higher Retail sales at higher (1.0pp) +0.8pp margins • Overproportionate growth in Other 40.7% 43.5% emerging markets Businesses 1.4pp (0.0pp) • M
Slide 22: FY Group Operating Profit Increases 13%
FY Group Operating Profit Increases 13% Q4 2011 FY 2011 Royalty and commission income € 30 million € 93 million +6% (6%) Other operating income € 48 million € 98 million +159% (10%) Other operating expenses € 1.529 billion € 5.524 billion +11% +9% Other operating expenses 46.9% 41.4 % as a percentag
Slide 23: EPS Ahead Of Initial Expectations
EPS Ahead Of Initial Expectations Q4 2011 FY 2011 Financial income € 7 million € 31 million +80% +25% Financial expenses € 18 million € 115 million (28%) +2% Income tax rate 36.5% 27.7% +29.8pp (1.8pp) Net income attributable to € 18 million € 671 million shareholders +161% +18% Diluted earnings per
Slide 24: FY Wholesale Sales Up 11% Currency-Neutral
FY Wholesale Sales Up 11% Currency-Neutral Wholesale Q4 2011 Change FY 2011 Change Net sales (€ in millions) 2,102 9%1) 8,971 11%1) Gross margin 36.4% (2.8pp) 40.0% (1.3pp) Segmental operating 24.9% (2.3pp) 30.4% (1.1pp) margin 1) Currency-neutral 24
Slide 25: Retail Comparable Store Sales Increase 14% In 2011
Retail Comparable Store Sales Increase 14% In 2011 Retail Q4 2011 Change FY 2011 Change Net sales (€ in millions) 778 18%1) 2,793 20%1) adidas comp store sales 12%1) 14%1) Reebok comp store sales 5%1) 11%1) Total comp store sales 11%1) 14%1) Gross margin 61.1% (1.0pp) 62.6% +0.8pp Segmental operatin
Slide 26: Retail Store Development In 2011
Retail Store Development In 2011 • 2,401 stores operated at year-end • A net increase of 131 or 6% versus the prior year of 2,270 • 323 new stores opened, 192 stores closed • 1,804 adidas and 597 Reebok branded 26
Slide 27: Other Businesses Grow 13% Currency-Neutral In 2011
Other Businesses Grow 13% Currency-Neutral In 2011 Other Businesses Q4 2011 Change FY 2011 Change Net sales (€ in millions) 383 12%1) 1,580 13%1) Gross margin 40.7% +1.4pp 43.5% (0.0pp) Segmental operating 23.5% 5.0pp 27.0% 1.0pp margin 1) Currency-neutral 27
Slide 28: Operating Working Capital As A Percentage Of Sales Remains At Prior Year Level
Operating Working Capital As A Percentage Of Sales Remains At Prior Year Level • Inventories increase 16% on a currency-neutral basis 27 26 • Sequential decline in growth rate (+20% in Q3) 25 24.3 • Reflects FOB impact and 24 22.9 growth expectations 23 21.7 • Receivables up 3% on a 22 20.9 20.9 cur
Slide 29: Net Cash Position Achieved At Year-End
Net Cash Position Achieved At Year-End • Net cash position of € 90 million reached at year- Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 end versus net borrowings 200 90 of € 221 million at the end of 2010 (200) (221) • Ratio of net borrowings/EBITDA (600) decreases to -0.1 from 0.2 (750) i
Slide 30: 25% Higher Dividend Proposed
25% Higher Dividend Proposed • adidas Group highly cash generative 1.10 1.00 1.00 • Proposed dividend of 0.90 0.80 € 1.00 per share 0.80 0.70 reflects 25% increase 0.60 versus prior year 0.50 0.50 0.50 0.42 0.40 0.33 0.33 0.35 • Payout ratio increases 0.30 0.25 to 31% from 30% 0.20 0.10 • In line wi
Slide 31: Strategic Initiatives & Outlook
STRATEGIC INITIATIVES & OUTLOOK 31
Slide 32: Digital Sports Platform miCoach To Be Further Expanded
Digital Sports Platform miCoach To Be Further Expanded • Strong beginning of the miCoach platform in the Football and Running categories • Speed_Cell technology to be rolled out in other categories like Basketball, American Football and Tennis • Unique social engagement experience 32
Slide 33: The adipure Range – A Fit For All
The adipure Range – A Fit For All 33
Slide 34: adidas Continues To Be “all in” In 2012
adidas Continues To Be “all in” In 2012 • “all adidas” to remain focal point of adidas brand marketing activities • Campaign will be localised further, adding more product content to drive brand association 34
Slide 35: UEFA EURO 2012 Will See New Record Highs In Football
UEFA EURO 2012TM Will See New Record Highs In Football • adidas Official Sponsor and Partner of the UEFA EURO 2012TM • Outfitter of six high-calibre teams (Spain, Germany, Russia, Ukraine, Denmark and Greece) • Sales of more than € 1.5 billion targeted in 2012 • Sustain market share gains adidas has
Slide 36: Olympic Games To Create Platform For Growth In The UK
Olympic Games To Create Platform For Growth In The UK 36
Slide 37: Reebok Begins Global Brand Positioning Campaign
Reebok Begins Global Brand Positioning Campaign 37
Slide 38: Reebok’s Finish Line Store Take-Over
Reebok’s Finish Line Store Take-Over 38
Slide 39: TaylorMade-adidas Golf Rocketz Into 2012
TaylorMade-adidas Golf Rocketz Into 2012 Speed – Distance - Power 39
Slide 40: adidas Striving For Hat-Trick In North America
adidas Striving For Hat-Trick In North America • Continued focus on the high-quality mall and sporting goods channels • Running and Basketball to drive adidas Sport Performance • adidas Originals to remain the hottest lifestyle brand 40
Slide 41: Further Expanding Our Footprint In China
Further Expanding Our Footprint In China • Strengthen current positioning as the # 2 in the Chinese market • Further expansion into lower tier cities • Double-digit growth expected in 2012 • Open 500 to 1,000 stores 41
Slide 42: Maintaining Leadership Position In Russia/CIS
Maintaining Leadership Position In Russia/CIS • adidas and Reebok to drive sales growth • Own-retail store base to exceed 800 by the end of 2012 • UEFA EURO 2012TM to create additional attention • Sales in Russia/CIS to exceed € 1 billion a year ahead of schedule 42
Slide 43: Operating Leverage To Continue In 2012
Operating Leverage To Continue In 2012 increase at a mid- to Group sales (currency-neutral) high-single-digit rate Wholesale sales (currency-neutral) mid-single-digit increase Retail sales (currency-neutral) low-teens increase Other Businesses sales (currency-neutral) low- to mid-single-digit increa
Slide 44: adidas Group - Together We Win
adidas Group - Together We Win 44
Slide 45: Questions & Answers
adidas QUESTIONS & ANSWERS
Slide 46: Upcoming Financial Reporting Dates
Upcoming Financial Reporting Dates May 3, 2012 First Quarter 2012 Results May 10, 2012 Annual General Meeting May 11, 2012 Dividend Payment1) Aug 2, 2012 First Half 2012 Results Nov 8, 2012 Nine Months 2012 Results 1) Subject to Annual General Meeting approval 46