Adidas Ag · XETR:ADS
Adidas — Non-Deal Roadshow (December 2012)
60 slides from Adidas's roadshow presentation, Dec 7, 2012
Slide 1: Roadshow Presentation – Nine Months 2012
Roadshow Presentation – Nine Months 2012 December 07 and 10, 2012 adidas Group
Slide 2: Operational and Financial Highlights
OPERATIONAL AND FINANCIAL HIGHLIGHTS 2
Slide 3: adidas Group Delivers Record 9M Performance
adidas Group Delivers Record 9M Performance • Record sales of over € 11.5 billion • Strong top-line growth across all geographies • Operating margin improves 40 bps to 10.1% • 22% increase in net income and EPS • Reduction in net borrowings by 55% to € 337 million 3
Slide 4: Q3 Group Sales Increase 4% Currency-Neutral
Q3 Group Sales Increase 4% Currency-Neutral Q3 2012 9M 2012 1% 4% Western Europe 3% 5% European Emerging 19% 17% Markets 30% 25% (5%) 5% North America 7% 15% Greater China 11% 16% 25% 30% Other Asian 1% 9% Markets 10% 17% 16% 10% Latin America 18% 10% 4% 8% 11% 14% currency-neutral (5%) 5% 15% 25% 3
Slide 5: Western Europe Shows Robust Sales Development
Western Europe Shows Robust Sales Development • Sales up 1% currency-neutral. in Q3 • Strong performance in UK, France and Poland • Tremendous brand visibility and engagement during the major sports events 5
Slide 6: Strong Retail Execution In Russia/CIS Continues
Strong Retail Execution In Russia/CIS Continues • European Emerging Markets up 19% currency-neutral in Q3 • Double-digit growth at Russia/CIS • Comp store sales in European Emerging Markets up 14% in Q3 6
Slide 7: adidas Scoring Double-Digit Growth In Mall Distribution
adidas Scoring Double-Digit Growth In Mall Distribution • Sales up 5% currency-neutral in 9M • adidas and TMaG growing double-digit in Q3 • Mall and Sporting Goods Channel driving the current success • adidas Originals continues to be hottest lifestyle brand 7
Slide 8: Outperforming Competitors In Greater China
Outperforming Competitors In Greater China • Sales grow 11% currency-neutral in Q3 • Strong comp store sales at all sub- labels • adidas and Reebok grow double-digit on a currency-neutral basis • Highlight quarter for adidas NEO label • Outperforming competitors 8
Slide 9: adidas Brand Sales Grow Double-Digit For 10th Quarter
adidas Brand Sales Grow Double-Digit For 10th Quarter Q3 2012 Change 9M 2012 Change Net sales (€ in millions) 3,271 10%1) 8,807 12%1) Gross margin 46.7% +0.7pp 46.3% (0.6pp) Net sales (€ in millions) 453 (25%)1) 1,240 (20%)1) Gross margin 34.5% (3.1pp) 35.1% (2.0pp) 1) currency-neutral 9
Slide 10: adidas Extends Market Leadership In Football
adidas Extends Market Leadership In Football • Sales increased 17% on a currency-neutral basis in 9M • Market share gains continue following UEFA EURO 2012, driven by Predator • Successful launch of new club jerseys 10
Slide 11: adidas Running Continues To Grow At Double-Digit Rates
adidas Running Continues To Grow At Double-Digit Rates • Sales up 17% currency-neutral in Q3 • Ongoing momentum with Clima & adizero franchises • Award winning and market leading innovation driving success 11
Slide 12: adidas Basketball Up 23% Currency-Neutral In 9M
adidas Basketball Up 23% Currency-Neutral In 9M • Sales growth accelerates to 30% in Q3 • North America up almost 60% in Q3 • Footwear momentum driven by Crazy Light 2 and Rose 3 • Strong social media buzz from Rose Recovery Campaign 12
Slide 13: adidas Sport Style Sales Accelerate In Q3
adidas Sport Style Sales Accelerate In Q3 • Revenues up 23% currency-neutral in Q3 • Double-digit growth at adidas Originals and adidas NEO label • Strong reception to new marketing campaign “all Originals Represent” with over 4.5 million YouTube hits 13
Slide 14: Reebok Underlying Sales Trend Improves
Reebok Underlying Sales Trend Improves • Sales down 20% currency-neutral in 9M • Sales down 6% in Q3 excl. license impacts and India • Comp store sales up 11% globally in Q3 • Positive trajectory for Classics 14
Slide 15: TMaG Continues To Dominate Golf Market
TMaG Continues To Dominate Golf Market • Record 9M top-line growth of 21% currency-neutral • Dominant market leader in metalwoods with more than 44% market share • Justin Rose, Martin Kaymer and Sergio Garcia help secure the Ryder Cup for Europe 15
Slide 16: Q3 Group Gross Margin Improves 0.3pp
Q3 Group Gross Margin Improves 0.3pp Q3 2012 9M 2012 • Positive impact from product Wholesale 41.3% 40.6% price increases +0.9pp (0.5pp) • Overproportionate growth in emerging Retail 59.0% 61.0% markets (3.3pp) (2.2pp) • Larger share of higher-margin Retail Other Businesses 42.7% 44.0% sales (0.2pp)
Slide 17: 9M Group Operating Margin Increases 0.4pp
9M Group Operating Margin Increases 0.4pp Q3 2012 9M 2012 Royalty and commission income € 27 million € 79 million +17% +24% Other operating income € 33 million € 80 million +131% +60% Other operating expenses € 1,544 million € 4,500 million +14% +13% Other operating expenses 37.0% 39.1% as a percent
Slide 18: Net Income Increases 22% In 9M
Net Income Increases 22% In 9M Q3 2012 9M 2012 Financial income € 12 million € 29 million +23% +25% Financial expenses € 27 million € 84 million (19%) (13%) Income tax rate 28.3% 27.8% +1.0pp +0.4pp Net income attributable to € 344 million € 798 million shareholders +14% +22 % Diluted earnings per s
Slide 19: Q3 Wholesale Segmental Operating Margin Up 1.5pp
Q3 Wholesale Segmental Operating Margin Up 1.5pp Wholesale Q3 2012 Change 9M 2012 Change Net sales (€ in millions) 2,743 +0%1) 7,470 +4%1) Gross margin 41.3% +0.9pp 40.6% (0.5pp) Segmental operating margin 33.1% +1.5pp 32.0% (0.1pp) 1) currency-neutral 19
Slide 20: Retail Comparable Store Sales Increase 9% In 9M
Retail Comparable Store Sales Increase 9% In 9M Retail Q3 2012 Change 9M 2012 Change Net sales (€ in millions) 944 +15%1) 2,491 +16%1) adidas comp store sales +8%1) +9%1) Reebok comp store sales +11%1) +9%1) Total comp store sales +9%1) +9%1) Gross margin 59.0% (3.3pp) 61.0% (2.2pp) Segmental operat
Slide 21: Other Businesses Grow 20% Currency-Neutral In 9M
Other Businesses Grow 20% Currency-Neutral In 9M Other Businesses Q3 2012 Change 9M 2012 Change Net sales (€ in millions) 486 +7%1) 1,553 +20%1) Gross margin 42.7% (0.2pp) 44.0% (0.5pp) Segmental operating 26.1% (2.3pp) 28.7% +0.6pp margin 1) currency-neutral 21
Slide 22: Operating Working Capital As A Percentage Of Sales Continues To Improve
Operating Working Capital As A Percentage Of Sales Continues To Improve • Inventories decrease 1% 22 on a currency-neutral basis • Reflects strong focus on inventory management 21 20.9 20.8 20.9 20.8 20.7 20.7 20.6 • Sequential decline in growth rate 20.5 20.5 (+8% in Q2) 20 • Receivables up 3% on a
Slide 23: Net Debt Declines 55%
Net Debt Declines 55% Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 100 90 • Net borrowings decline € 414 million versus prior year to € 337 million -300 (221) • Ratio of net borrowings/EBITDA (318) (337) decreases to 0.2 from 0.6 in 2011 • Equity ratio increases -700 (640) 2.7 percentage po
Slide 24: Strategic Initiatives and Outlook
STRATEGIC INITIATIVES AND OUTLOOK 24
Slide 25: The Return Of Derrick Rose Begins
The Return Of Derrick Rose Begins 25
Slide 26: New Best In Class Lightweight Football Boot Unveiled
New Best In Class Lightweight Football Boot Unveiled 26
Slide 27: TMaG To Revolutionise The Irons Market
TMaG To Revolutionise The Irons Market 27
Slide 28: Launch Of New Pilot Shop-In-Shops With Dick’s
Launch Of New Pilot Shop-In-Shops With Dick’s 28
Slide 29: Retail And eCom First Fully Integrated Xmas Campaign
Retail And eCom First Fully Integrated Xmas Campaign 29
Slide 30: 2013 Will See Significant Innovation Pipeline
2013 Will See Significant Innovation Pipeline 30
Slide 31: Deepening Emotional Connection To The Consumer
Deepening Emotional Connection To The Consumer 31
Slide 32: Unique Brand Asset Collaborations
Unique Brand Asset Collaborations Derrick Rose Justin Bieber Tara Stiles Alicia Keys for for for for adidas adidas Reebok Reebok Basketball NEO Label Yoga Classics 32
Slide 33: adidas Group Well Prepared For New Records In 2013
adidas Group Well Prepared For New Records In 2013 • Strong product pipeline to fuel sales growth • Operating margin to increase to around 9% • Significant double-digit earnings growth 33
Slide 34: 2012 Full Year Outlook
2012 Full Year Outlook Group sales (currency-neutral) increase at a high-single-digit rate Wholesale sales (currency-neutral) mid-single-digit increase Retail sales (currency-neutral) low-teens increase Other Businesses sales (currency-neutral) high-teens increase Gross margin around 47.5% Operating
Slide 35: Questions & Answers
QUESTIONS & ANSWERS 35
Slide 36: Keep Up To Date With Our New iPad IR And Media App
Keep Up To Date With Our New iPad IR And Media App 36
Slide 37: Upcoming Event Dates
Upcoming Event Dates Mar 7, 2013 Full Year 2012 Results May 3, 2013 First Quarter 2013 Results May 8, 2013 Annual General Meeting May 9, 2013 Dividend Payment1) Aug 8, 2013 First Half 2013 Results Nov 7, 2013 Nine Months 2013 Results 1) Subject to Annual General Meeting Approval 37
Slide 38: Appendix: 2015 Aspirations
APPENDIX: 2015 ASPIRATIONS 38
Slide 39: Route 2015 Financial Milestones
Route 2015 Financial Milestones
Slide 40: Revised Sales Targets For Global Brands
Revised Sales Targets For Global Brands 2010 OLD NEW 40
Slide 41: adidas Sales Target Increased 5%
adidas Sales Target Increased 5% 41
Slide 42: Other Businesses To Achieve 2015 Goal Already This Year
Other Businesses To Achieve 2015 Goal Already This Year 42
Slide 43: Revised Sales Targets For Global Sales
Revised Sales Targets For Global Sales 2010 OLD 43
Slide 44: Strong Position To Achieve 11% Operating Margin Target
Strong Position To Achieve 11% Operating Margin Target Quality of distribution Emerging Market Manufacturing Growth excellence Retail Performance proficiency driven Trade Terms Organisational Infrastructure set-up modernisation Range reduction
Slide 45: Creating The Most Desirable Brands
Creating The Most Desirable Brands 45
Slide 46: 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% 46
Slide 47: 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% 47
Slide 48: adidas Sport Performance – Making The Athlete Better
adidas Sport Performance – Making The Athlete Better 48
Slide 49: adidas Sport Style – Multi-Label Strategy
adidas Sport Style – Multi-Label Strategy 49
Slide 50: adidas Originals – Iconic And Authentic Street Style
adidas Originals – Iconic And Authentic Street Style 50
Slide 51: NEO Label Attributes And USP
NEO Label Attributes And USP 51
Slide 52: NEO Targeting A Global Consumer With Fashion Style
NEO Targeting A Global Consumer With Fashion Style 52
Slide 53: Slide 53
Slide 54: New Organisation: Focus On Fitness Categories
New Organisation: Focus On Fitness Categories 54
Slide 55: From An Activity To A Lifestyle…
From An Activity To A Lifestyle… 55
Slide 56: Reebok To Focus On Building Sustainable Fitness Categories
Reebok To Focus On Building Sustainable Fitness Categories 56
Slide 57: Meet Consumers Where They Live Within Their Fitness Life
Meet Consumers Where They Live Within Their Fitness Life 57
Slide 58: TaylorMade
it @saylorMade ; f j y sence
Slide 59: New Design
INSPIRE SEEK LEAD ACT WITH PEOPLE | |GREATNESS| | CHANGE SPEED
Slide 60: Disrupt The Market Place
» DISRUPT THE MARKET PLACE » DRIVE PERFORMANCE THROUGH INNOVATION ov =] Y » VALIDATE ON TOUR VER IN GOLF wgaylorMade +. DELIVER HOT PRODUCTS XZ _ REACT QUICKLY TO MARKET SHIFTS » STAY TRUE TO OUR BRAND VALUES