Adidas Ag · XETR:ADS

Adidas — GACC Presentation, Frankfurt (May 2010)

31 slides from Adidas's conference presentation, May 20, 2010

  1. Slide 1: GACC Presentation

    GACC Presentation Frankfurt, May 20, 2010 Robin Stalker CFO, adidas Group

  2. Slide 2: Agenda

    Agenda • Q1 2010 Operational Highlights • Q1 2010 Financial Highlights • Outlook and Summary 2

  3. Slide 3: adidas Group Delivers Record First Quarter Revenues

    adidas Group Delivers Record First Quarter Revenues Q1 2010 Change Net sales (€ in millions) 2,674 4%1) Gross margin 48.6% +3.5pp Operating margin 9.7% +7.5pp Diluted earnings per share € 0.80 n/a 1) Currency-neutral 3

  4. Slide 4: Wholesale Revenues Driven By Improvements In North America And Western Europe

    Wholesale Revenues Driven By Improvements In North America And Western Europe Wholesale Q1 2010 Change Net sales (€ in millions) 1,898 1%1) Gross margin 43.1% +0.5pp Segmental operating 33.0% +0.2pp margin 1) Currency-neutral 4

  5. Slide 5: Retail Segment Sales Increase 16% Currency-Neutral

    Retail Segment Sales Increase 16% Currency-Neutral Retail Q1 2010 Change Net sales (€ in millions) 459 16%1) adidas comp store sales 5% Reebok comp store sales 15% Total comp store sales 7% Gross margin 58.2% +3.7pp Segmental operating 11.3% +7.6pp margin 1) Currency-neutral 5

  6. Slide 6: adidas Generates Record Football Revenues

    adidas Generates Record Football Revenues 6

  7. Slide 7: adidas Makes Progress In Several Key Categories

    adidas Makes Progress In Several Key Categories 7

  8. Slide 8: adidas Sport Style Sales Advance 22% Currency-Neutral

    adidas Sport Style Sales Advance 22% Currency-Neutral 8

  9. Slide 9: Reebok Turnaround Gathering Pace Driven By Toning

    Reebok Turnaround Gathering Pace Driven By Toning 9

  10. Slide 10: Reebok Second Product Pillar ZigTech Another Consumer Hit

    Reebok Second Product Pillar ZigTech™ Another Consumer Hit 10

  11. Slide 11: Other Businesses Grow 8% In Q1 Currency-Neutral

    Other Businesses Grow 8% In Q1 Currency-Neutral Q1 2010 Change Net sales (€ in millions) 316 8%1) Gross margin 45.0% +5.7pp Segmental operating 29.0% +14.4pp margin 1) Currency-neutral 11

  12. Slide 12: TaylorMade-adidas Golf Takes Significant Share In Balls

    TaylorMade-adidas Golf Takes Significant Share In Balls 12

  13. Slide 13: Agenda

    Agenda • Q1 2010 Operational Highlights • Q1 2010 Financial Highlights • Outlook and Summary 13

  14. Slide 14: Group Sales Growth Driven By Retail Segment

    Group Sales Growth Driven By Retail Segment Q1 2010 1% Wholesale 1% 16% Retail 15% Other 8% Businesses 7% 4% 4% 0% 10% 20% In euros Currency-neutral Total Group Includes HQ/Consolidation 14

  15. Slide 15: Improving Sales Momentum In Most Regions

    Improving Sales Momentum In Most Regions Q1 2010 Western Europe 4% 5% Europ. Emerging 1% Markets (1%) 14% North America 10% (15%) Greater China (20%) Other Asian (3%) Markets 1% Latin America 18% 24% 4% 4% (25%) (5%) 15% In euros Currency-neutral Total Group Includes HQ/Consolidation 15

  16. Slide 16: Group Gross Margin Up 3.5pp

    Group Gross Margin Up 3.5pp • Q1 gross margin Wholesale 43.1% increase driven by 0.5pp • lower input costs Retail 58.2% • higher Retail sales at 3.7pp better margins Other 45.0% • less clearance sales Businesses 5.7pp • currency appreciation effects 48.6%1) 3.5pp Group gross profit increases 12% to

  17. Slide 17: Reebok Momentum Accelerates

    Reebok Momentum Accelerates Q1 2010 Q1 2009 Change Net sales (€ in millions) 1,998 1,917 4%1) Gross margin 47.7% 47.0% 0.7pp Net sales (€ in millions) 376 374 1%1) Gross margin 36.3% 27.6% 8.7pp 1) Currency-neutral 17

  18. Slide 18: First Quarter Operating Margin Improves 7.5pp

    First Quarter Operating Margin Improves 7.5pp Q1 2010 Royalty and commission income € 22 million +7% Other operating income € 47 million +75% Other operating expenses € 1.109 billion (4%) Other operating expenses as a percentage 41.5% of sales (3.3pp) Operating profit € 260 million +349% Operating m

  19. Slide 19: First Quarter Diluted EPS Grow Substantially

    First Quarter Diluted EPS Grow Substantially Q1 2010 Financial income € 12 million +91% Financial expenses (48%) € 29 million Income tax rate 30.5% (21.2pp) Net income attributable to shareholders € 168 million n/a Basic earnings per share € 0.80 n/a Diluted earnings per share € 0.80 n/a 19

  20. Slide 20: Inventories Decline 20% Currency-Neutral

    Inventories Decline 20% Currency-Neutral • Inventories decrease 20% on a currency-neutral basis, 21% 18% 20% down 17% to € 1.680 billion 16% 15% 8% 10% • Declines at all brands and in all regions 0% Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 • Reduction of production (10%) (8%) volumes in 2009

  21. Slide 21: Operating Working Capital Improves Significantly

    Operating Working Capital Improves Significantly • Receivables flat on a currency-neutral basis, 27 increase 5% in euro terms 26.2 26 to € 1.987 billion 25.6 25.6 25 • Reflects strict discipline in 24.2 24.5 24.5 24.3 implementing the Group’s 24 trade terms 22.9 23 • Payables increase 25% on a curre

  22. Slide 22: Net Debt Declines By More Than € 1.5 Billion

    Net Debt Declines By More Than € 1.5 Billion • Net borrowings decrease 53% versus prior year to 3,000 2,883 2,732 € 1.359 billion 2,500 2,593 2,260 2,294 2,189 • Ratio of net 2,000 borrowings/EBITDA 1,359 decreases to 1.4 from 2.7 1,500 in 2009 1,000 917 500 0 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/

  23. Slide 23: Agenda

    Agenda • Q1 2010 Operational Highlights • Q1 2010 Financial Highlights • Outlook and Summary 23

  24. Slide 24: 2010 Guidance Increased

    2010 Guidance Increased Group sales (currency-neutral) mid-single-digit increase Wholesale sales (currency-neutral) low- to mid-single-digit increase Retail sales (currency-neutral) low-double-digit increase Other Businesses sales (currency-neutral) low-single-digit increase Gross margin 46.5% to 47

  25. Slide 25: Positive And Negative Implications From Current Currency Trends

    Positive And Negative Implications From Current Currency Trends • Long-term beneficiary of a weak US dollar due to sourcing • Over 65% of US dollar exposure already hedged for 2011 • Strengthening of currencies (e.g. US dollar, Rouble Renminbi) versus euro provides positive translation benefits 25

  26. Slide 26: adidas Group Has A Strong Start Into 2010

    adidas Group Has A Strong Start Into 2010 • Strong profitability improvements in Q1 • Financial outlook increased • Reebok turnaround gathers pace • FIFA World Cup™ kicks off in a few weeks 26

  27. Slide 27: Questions & Answers

    QUESTIONS & ANSWERS 27

  28. Slide 28: Appendix

    APPENDIX 28

  29. Slide 29: Marketing Working Budget Expenditures Decline

    Marketing Working Budget Expenditures Decline 1,500 1,429 14.5% 14.2% 1,378 1,301 1,269 14.0% 13.4% 13.5% 1,000 942 13.2% 13.0% 12.9% 12.5% 500 12.2% 12.0% 11.5% 0 11.0% 2005 2006 2007 2008 2009 Marketing working budget (€ in millions and in % of Group sales), Reebok included since 2006 for 2009 sum

  30. Slide 30: Reebok Brand Positioning

    Reebok Brand Positioning YOUR MOVE Women Men — Training — Fitness — Running \ — Running — Walking \ — Sports Classics y —Women —Men

  31. Slide 31: Upcoming Financial Reporting Dates

    Upcoming Financial Reporting Dates Aug 4, 2010 First Half 2010 Results Sep 9, 2010 Investor Day (Herzogenaurach, Germany) Nov 4, 2010 Nine Months 2010 Results 31

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