Adidas Ag · XETR:ADS
Adidas — Non-Deal Roadshow (2014)
63 slides from Adidas's roadshow presentation, 2014
Slide 1: Roadshow Presentation 2013 Full Year Results
Roadshow Presentation 2013 FULL YEAR RESULTS
Slide 2: Operational and Financial Highlights
OPERATIONAL AND FINANCIAL HIGHLIGHTS 2
Slide 3: adidas Group Delivers Record Fourth Quarter
adidas Group Delivers Record Fourth Quarter • Sales increase 12% on a currency- neutral basis • Growth across all regions and brands • Football sales up 35% driven by sell-in of 2014 FIFA World Cup products • Record operating profit of € 98 million, up fourfold compared to the prior year1) 1) Exclud
Slide 4: Good Momentum Across All Markets In Q4
Good Momentum Across All Markets In Q4 +3% Western Europe +14% +11% North America European Emerging Markets +8% Greater China +32% +15% Latin America Other Asian Markets Sales development on a currency-neutral basis. 4
Slide 5: adidas Group Hits Full Year 2013 Guidance
adidas Group Hits Full Year 2013 Guidance • Sales increase 3% currency-neutral to € 14.5 billion • Gross margin up 1.5pp to a new record level of 49.3% • Operating margin improves 0.7pp to 8.7%1) • Net income attributable to shareholders grows 6% to € 839 million1) • Net cash position of € 295 milli
Slide 6: Sales Growth In Almost All Regions In 2013
Sales Growth In Almost All Regions In 2013 (6%) Western Europe +2% +4% North America European Emerging Markets +7% Greater China +19% +5% Latin America Other Asian Markets Sales development on a currency-neutral basis. 6
Slide 7: Latin America Fastest-Growing Region In 2013
Latin America Fastest-Growing Region In 2013 • Currency-neutral sales up 19% in 2013 • Revenues grow 32% currency-neutral in Q4, fuelled by the rising anticipation and excitement ahead of the 2014 FIFA World Cup • Training, Running and Football all up at strong double-digit rates in 2013 7
Slide 8: Winning In China, Winning The Future
Winning In China, Winning The Future • Sales up 7% currency-neutral in 2013 • adidas Originals & Sport Style grow 18% in 2013 • Training and Running increase 12% and 23%, respectively 8
Slide 9: Other Asian Markets Up 15% Currency-Neutral In Q4
Other Asian Markets Up 15% Currency-Neutral In Q4 • Sales for the full year increase 5% currency-neutral • Strong growth in South Korea, India and Australia 9
Slide 10: Regaining Momentum In Russia/CIS
Regaining Momentum In Russia/CIS • Currency-neutral sales up 8% in Q4 • adidas enjoys strong visibility at Winter Olympic Games in Sochi 10
Slide 11: North America Sales Increase 2% In 2013
North America Sales Increase 2% In 2013 • Sales up 14% currency- neutral in Q4 • adidas currency-neutral revenues increase 10% in the fourth quarter • Running and Football grow 40%+ in Q4 • TaylorMade-adidas Golf up 31% in Q4 11
Slide 12: Western Europe Sales Increase 3% In Q4
Western Europe Sales Increase 3% In Q4 • Strong year-end finish with sales up 3% currency-neutral in Q4 • Retail sales grow 17% currency-neutral • Currency-neutral Reebok revenues up 26% 12
Slide 13: adidas And Reebok Enjoy Solid 2013
adidas And Reebok Enjoy Solid 2013 Q4 2013 Change FY 2013 Change Net sales (€ in millions) 2,583 +10%1) 11,060 +2%1) Gross margin 46.8% +1.5pp 48.0% +2.0pp Net sales (€ in millions) 426 +9%1) 1,599 +2%1) Gross margin 39.3% +1.1pp 39.7% +4.0pp 1) Currency-neutral. 13
Slide 14: adidas Running Innovations Drive 31% Growth In Q4
adidas Running Innovations Drive 31% Growth In Q4 • Sales up 17% in the “Year of Running” • Third consecutive year of double-digit growth for adidas Running • Introduction of Boost, Springblade and miCoach Smart Run propels sales up 31% in Q4 • 1.5 million pairs of Boost sold in 2013 14
Slide 15: adidas Football Sambas Up For World Cup
adidas Football Sambas Up For World Cup • Football sales increase 35% in Q4 and 4% for FY 2013 • Successful launch of the Samba Pack, covering four boot ranges: adizero f50, Predator, Nitrocharge and 11Pro 15
Slide 16: adidas Originals & Sport Style Sales Accelerate In Q4
adidas Originals & Sport Style Sales Accelerate In Q4 • adidas Originals & Sport Style sales increase 12% currency-neutral in Q4 • Revenues up 5% currency-neutral to € 3.2 billion 16
Slide 17: adidas NEO Label Sales Up 22% In Q4
adidas NEO Label Sales Up 22% In Q4 • Sales increase 22% currency- neutral in Q4 • Currency-neutral revenues up 14% to almost € 700 million • Impressive four-year compound annual growth rate of almost 40% 17
Slide 18: Quality Of Reebok's Business Significantly Improves
Quality Of Reebok’s Business Significantly Improves • Reebok sales up 4% excluding NFL licence impact • Sales improve significantly in Fitness Training, Classics and Studio • Gross margin in touching distance of mid-term target of 40% 18
Slide 19: TMaG Finishes Year Strongly – Sales Up 25% In Q4
TMaG Finishes Year Strongly – Sales Up 25% In Q4 • TaylorMade-adidas Golf sales increase 3% in 2013 • Dominant market leader in metalwoods and irons • SLDR the No. 1 driver on the PGA Tour for more than 22 consecutive weeks 19
Slide 20: Group Gross Margin Improves 1.5pp In 2013
Group Gross Margin Improves 1.5pp In 2013 Q4 2013 FY 2013 • Pricing and favourable Wholesale 40.7% 42.7% product mix +1.6pp +2.4pp • Overproportionate growth in Retail 61.0% 62.2% emerging markets +0.3pp +1.3pp • Larger share of higher-margin Other Businesses 39.4% 41.0% Retail sales +0.9pp (1.7pp)
Slide 21: Group Operating Margin Increases 0.7pp To 8.7%
Group Operating Margin Increases 0.7pp To 8.7% Q4 20131) FY 20131) Royalty and commission income € 26 million € 104 million (1%) (1%) Other operating income € 36 million € 143 million (21%) +13% Other operating expenses € 1,617 million € 6,133 million (2%) (0%) Other operating expenses 46.5% 42.3% a
Slide 22: Net Income Up 6% In 2013
Net Income Up 6% In 2013 Q4 20131) FY 20131) Financial income € 11 million € 26 million +63% (28%) Financial expenses € 28 million € 94 million +30% (11%) Income before taxes € 81 million € 1,186 million +571% +6% Income tax rate 47.1% 29.0% (117.7pp) (0.3pp) Net income attributable to € 42 million
Slide 23: Retail Comp Store Sales Turn Positive In Q4
Retail Comp Store Sales Turn Positive In Q4 Retail Q4 2013 Change FY 2013 Change Net sales (€ in millions) 934 +15%1) 3,446 +8%1) adidas comp store sales +3% 1) (0%) 1) Reebok comp store sales (0%)1) (3%) 1) Total comp store sales +3%1) (1%) 1) Gross margin 61.0% +0.3pp 62.2% +1.3pp Segmental operat
Slide 24: Retail Store Roll-Out Continues At Accelerated Pace
Retail Store Roll-Out Continues At Accelerated Pace • 2,740 stores operated at year-end • A net increase of 294 or 12% versus 2,446 in prior year • 534 new stores opened, 240 stores closed, 127 stores remodelled • 1,557 adidas and 404 Reebok branded; 779 factory outlets 24
Slide 25: Operating Working Capital Negatively Impacted By Inventories And Receivables
Operating Working Capital Negatively Impacted By The Increase In Inventories And Receivables 22 • Inventories increase 13% 20,9 21 on a currency-neutral basis 20,6 • Receivables up 17% on a 20,3 20,3 currency-neutral basis 20 19,9 20,0 • Payables increase 5% on a currency-neutral basis 19 Q3/12 Q4/1
Slide 26: Goodwill Impairment Of € 52 Million In 2013
Goodwill Impairment Of € 52 Million In 2013 • Non-cash in nature and not affecting the adidas Group’s financial position Amount Unit (€ in millions) • Impairment of goodwill due to adjusted growth Wholesale assumptions and an increase in the country- 23 Iberia specific discount rates Retail 29 North
Slide 27: Net Cash Position Negatively Impacted By Increased Working Capital
Net Cash Position Negatively Impacted By Increased Working Capital Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 448 • Net cash decreases € 153 million 295 to € 295 million 300 • Ratio of net borrowings/EBITDA increases to -0.2 from -0.3 in 2012 -100 • Equity ratio improves to 47.3% (94) (180) (180) (2012: 45
Slide 28: 11% Higher Dividend To Be Proposed
11% Higher Dividend To Be Proposed 1,60 1,50 1,35 • adidas Group highly cash generative 1,40 1,20 • Proposed dividend of € 1.50 per 1,00 share, reflecting an 11% increase 1,00 versus prior year 0,80 0,80 • Payout ratio increases to 37.4% 0,60 0,50 0,50 (2012: 35.7%) excluding goodwill 0,33 0,42 0,35
Slide 29: Currencies Considerably Impact Reported Results
Currencies Considerably Impact Reported Results Currency effects on • Devaluation of major currencies with Group net sales (€ in millions) significant negative impact on top-line result 15,256 • Negative currency translation effect of around € 750 million in 2013 • Translation negative of around a m
Slide 30: Strategic Initiatives and Outlook
STRATEGIC INITIATIVES AND OUTLOOK 30
Slide 31: Growth Across All Brands In 2014
Growth Across All Brands In 2014 31
Slide 32: adidas Demonstrates Leadership In Football
adidas Demonstrates Leadership In Football 32
Slide 33: adidas Football Launches First Knitted Boot
adidas Football Launches First Knitted Boot 33
Slide 34: Running To Maintain Double-Digit Pace
Running To Maintain Double-Digit Pace 34
Slide 35: adidas Running To Expand Boost Significantly
adidas Running To Expand Boost Significantly 35
Slide 36: The Smartest Running Coach – miCoach Smart Run
The Smartest Running Coach – miCoach Smart Run 36
Slide 37: Boost To Be Expanded Into New Categories
Boost To Be Expanded Into New Categories 37
Slide 38: Stan Smith Is Back
Stan Smith Is Back 38
Slide 39: ZX Rules 2014
ZX Rules 2014 39
Slide 40: adidas Originals To Ignite Several New Partnerships
adidas Originals To Ignite Several New Partnerships 40
Slide 41: adidas Originals To Ignite Several New Partnerships
adidas Originals To Ignite Several New Partnerships 41
Slide 42: 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 42
Slide 43: Reebok To Drive Visibility By Leveraging Partnerships
Reebok To Drive Visibility By Leveraging Partnerships 43
Slide 44: Reebok's Footwear And Apparel Product Pipeline Full
Reebok’s Footwear And Apparel Product Pipeline Full 44
Slide 45: Reebok Launches Skyscape With Miranda Kerr
Reebok Launches Skyscape With Miranda Kerr 45
Slide 46: TMaG To Focus On Quality Growth In 2014
TMaG To Focus On Quality Growth In 2014 46
Slide 47: New Store Concept: Homecourt
New Store Concept: Homecourt 47
Slide 48: New Store Concept: Neighbourhood
New Store Concept: Neighbourhood 48
Slide 49: New Store Concept: FitHub
New Store Concept: FitHub • 12 markets • 797 franchise stores • 266 concept stores 49
Slide 50: Leveraging And Magnifying Brand Messages With Digital
Leveraging And Magnifying Brand Messages With Digital Digital 50
Slide 51: Outlook: High-Single-Digit Currency-Neutral Growth
Outlook: High-Single-Digit Currency-Neutral Growth Group sales (currency-neutral) high-single-digit increase Wholesale sales (currency-neutral) mid-single-digit increase Retail sales (currency-neutral) high-single- to low-double-digit increase Other Businesses sales (currency-neutral) low- to mid-si
Slide 52: Strong Operational Momentum But Currencies Add Significant Risks
Strong Operational Momentum But Currencies Add Significant Risks • Currency-neutral sales to increase at a high-single-digit rate • Net income attributable to shareholders to be between € 830 and € 930 million • Devaluation of major currencies adds significant risk to the achievement of 2014 goals 5
Slide 53: Questions & Answers
QUESTIONS & ANSWERS 53
Slide 54: Upcoming Event Dates
Upcoming Event Dates 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 Nov 6, 2014 Nine Months 2014 Results 1) Subject to Annual General Meeting Approval. 54
Slide 55: Appendix
APPENDIX 55
Slide 56: adidas Sport Performance – Making The Athlete Better
adidas Sport Performance – Making The Athlete Better stronger natural cooler smarter faster 56
Slide 57: 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 57
Slide 58: Reebok Building Sustainable Fitness Activities
Reebok Building Sustainable Fitness Activities 58
Slide 59: Fitness Is The Formula For Reebok's Success
Fitness Is The Formula For Reebok’s Success PARTICIPATION GYMS SPEND 59
Slide 60: Training - The Brand Of The CrossFit Community
Training - The Brand Of The CrossFit Community 60
Slide 61: Running - Building With The Spartan Race
Running - Building With The Spartan Race 61
Slide 62: Studio – Accelerating Visibility Through Les Mills
Studio – Accelerating Visibility Through Les Mills 62
Slide 63: Reebok ONE – Bringing The Fitness Community Together
Reebok ONE – Bringing The Fitness Community Together 63