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For immediate release                                                        Herzogenaurach, August 3, 2005

adidas-Salomon 2005 First Half Year Results1:


                                 Currency-neutral sales grow 11%
                        Net income from continuing operations rises 39%

          Highest first half year gross margin ever at 48.5%
          Income before taxes grows 33%
          Net income attributable to shareholders from continuing and discontinued
           operations up 48%
          Net borrowings reduced by € 425 million
          Full year net income attributable to shareholders from continuing and discontinued
           operations expected to increase by around 20%


Second quarter currency-neutral sales grow 10%
Second quarter net sales for adidas-Salomon increased 10% on a currency-neutral basis with
double-digit improvements coming from all brands and regions except Europe where sales
declined 1%. This represents revenue growth of 8% in euro terms for the Group to € 1.516
billion in 2005 from € 1.401 billion in the second quarter of 2004. The gross margin remained
unchanged at 49.0% of sales. Second quarter operating profit increased 25% to € 153 million
from € 123 million in 2004. The Group’s net income from continuing operations was up 33% in
the second quarter, reaching € 94 million versus € 70 million in 2004. Basic earnings per share
increased 34% to € 2.02 (2004: € 1.51 per share). Diluted earnings per share grew 27% to € 1.91
in the second quarter of 2005 from € 1.51 in 2004.

Income from discontinued operations, net of tax, which reflects the performance of the
Salomon business segment that is planned to be divested at the end of the third quarter,
declined 6% to negative € 27 million in the second quarter of 2005 (2004: negative € 25 million).
Net income attributable to shareholders from continuing and discontinued operations
increased 52% to € 66 million in the second quarter of 2005 versus last year’s level of € 44
million. This equates to basic earnings per share from continuing and discontinued operations
of € 1.44, which represents growth of 50% compared to the prior year (2004: € 0.96 per share).
Accordingly, diluted earnings per share from continuing and discontinued operations were up
44% to € 1.37 from € 0.96.



1
    Unless otherwise stated, all figures in this press release refer to the Group’s continuing operations.

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The adoption of new and revised International Financial Reporting Standards (IFRS) concerning
the inclusion of royalty and commission income and goodwill amortization into operating profit
as well as the discontinuation of scheduled goodwill amortization positively impacted the
Group’s financial performance in 2005. On a comparable basis2, the Group’s operating profit,
net income from continuing operations and net income attributable to shareholders from
continuing and discontinued operations would have increased 20%, 18% and 20% respectively
in the second quarter.

Currency-neutral sales grow 11% in the first half year
During the first six months of 2005, the Group’s currency-neutral revenues increased 11%. In
euro terms, sales grew 10% to € 3.189 billion from € 2.906 billion in 2004.

“The first half of 2005 was an important six months for adidas-Salomon,” commented adidas-
Salomon Chairman and CEO Herbert Hainer. “We have strengthened the core of our business,
made it more efficient, and more focused on areas where we have proven skills. And we were
able to deliver an outstanding set of financial results – exceeding both market and our own
expectations.”

adidas drives top-line growth in the first half
Sales growth in the adidas segment set the pace for Group performance during the first half of
2005. Currency-neutral adidas revenues increased 10% during the first six months. Drivers of
this growth were strong double-digit growth in the Sport Heritage division as well as significant
increases in most Sport Performance categories. Currency-neutral revenues in the
TaylorMade-adidas Golf segment increased 19%, driven by double-digit growth in all
categories except putters. Currency effects negatively impacted sales at adidas and
TaylorMade-adidas Golf in euro terms. adidas sales in euro terms were up 9% to € 2.816 billion
in the first half of 2005 from € 2.584 billion in 2004. TaylorMade-adidas Golf sales in euro
terms grew 16% to € 351 million in 2005 from € 302 million in 2004.

                                           1st Half Year              1st Half Year              Change y-o-y     Change y-o-y
                                                2005                       2004                  in euro terms   currency-neutral
                                           € in millions               € in millions                  in %             in %
adidas                                          2,816                      2,584                      9                10
TaylorMade-adidas Golf                           351                        302                       16               19
Total continuing operations                     3,189                     2,906                       10               11
adidas-Salomon sales by brand in 2005, “Total continuing operations” includes HQ/Consolidation
Positive regional sales development



2
    The figures stated on a comparable basis are adjusted to eliminate the goodwill amortization incurred in 2004.
    Furthermore, operating profit reflects the inclusion of royalty and commission income in the operating profit for
    2004 and 2005.


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From a regional perspective, first half year Group sales in Europe grew 1% on a currency-
neutral basis, driven by strong performance at TaylorMade-adidas Golf where currency-neutral
sales increased 16% as a result of broad-based improvements throughout the region. In North
America, Group sales during the first half increased 18% on a currency-neutral basis, due to
double-digit growth in the adidas Sport Performance and Sport Heritage divisions as well as at
TaylorMade-adidas Golf. In Asia, currency-neutral sales increased 30% in the first half of 2005,
driven by strong growth in China, where sales more than doubled during the first six months of
2005, as well as strong growth in Japan, India and many other countries in the region. In Latin
America, currency-neutral sales increased 36% in the first half, renewing its position as the
fastest growing region within the Group. This development was driven by double-digit sales
increases in Brazil, Mexico and Argentina. In euro terms, currency translation effects negatively
impacted sales in the first half of 2005. Sales in Europe increased slightly in euro terms to
€ 1.569 billion in the first six months of 2005 from € 1.563 billion in the prior year. In North
America, first half year sales in euros increased 13% to € 757 million in 2005 from € 667 million
in 2004. In euro terms, sales in Asia improved 28% to € 708 million in the first half of 2005 from
€ 551 million in 2004. In Latin America, sales in euros grew 38% to € 135 million in 2005 from
€ 98 million in 2004.

                                          1st Half Year             1st Half Year             Change y-o-y     Change y-o-y
                                                      3                         3
                                              2005                      2004                  in euro terms   currency-neutral
                                           € in millions             € in millions                in %              in %
Europe                                        1,569                      1,563                     0                 1
North America                                   757                       667                      13               18
Asia                                            708                       551                      28               30
Latin America                                   135                       98                       38               36
Total continuing operations                   3,189                     2,906                      10               11
adidas-Salomon sales by region in 2005, “Total continuing operations” includes HQ/Consolidation


Group gross margin up 0.5 percentage points
adidas-Salomon gross margin grew 0.5 percentage points to 48.5% of sales in the first half of
2005 (2004: 48.0%). This represents the highest first half year gross margin in the history of the
Group and mainly reflects increased adidas own-retail activities as well as the Group’s
improving product mix. In addition, hedging activities that enabled adidas-Salomon to
capitalize on favorable currency movements also contributed to the margin improvement. As a
result of strong sales growth and the gross margin increase, the Group’s gross profit rose 11% in
the first half of 2005 to reach € 1.547 billion versus € 1.394 billion in 2004.

Operating profit grows 26%

3
    Pro-forma figures reflect continuing operations as a result of the planned divestiture of the Salomon business
    segment in accordance with the Sale & Purchase Agreement (SPA) with Amer Sports Corporation, subject to
    amendments agreed upon prior to transaction closing.


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Royalty and commission income increased 5% during the first half of 2005 to € 22 million
compared to € 20 million in the prior year. Operating expenses, including selling, general and
administrative expenses (SG&A) and depreciation and amortization (excluding goodwill),
increased 9% to € 1.211 billion in the first half of 2005 from € 1.113 billion in 2004. As a
percentage of sales, this equates to 38.0%, which is 0.3 percentage points lower than the 2004
level of 38.3%. This decrease mainly reflects a reduction in the marketing working budget and
virtually stable operating overhead costs, both as a percentage of sales. No goodwill
impairment was incurred during the first six months of 2005. This compares to scheduled
goodwill amortization of € 18 million in the first half of 2004. The Group’s operating profit
increased 26% to € 357 million in 2005 from € 283 million in the first half of 2004, reflecting
higher sales and gross margin as well as operating expense leverage. Similarly, the operating
margin grew 1.5 percentage points to 11.2% in the first six months of 2005 versus 9.7% in the
same period of 2004. The adoption of new and revised International Financial Reporting
Standards positively impacted the Group’s reported operational performance in the first six
months of 2005. On a comparable basis4, the Group’s operating profit and margin would have
increased 19% or 0.8 percentage points respectively during the first half of 2005.

Income before taxes (IBT) up 33%
Net financial expenses decreased 32% to € 20 million during the first six months of 2005 (2004:
€ 30 million), partly as a result of positive currency effects. In addition, lower interest expenses
due to the lower average debt level, which more than offset an increase of the weighted
average interest rate, contributed to this development. As a result of the operating
improvements and the lower financial expenses, the Group’s IBT increased 33% to € 337 million
in the first half of 2005 from € 253 million in 2004. On a comparable basis, adidas-Salomon’s
IBT would have increased 24% during the first six months of 2005.




4
    The figures stated on a comparable basis are adjusted to eliminate the goodwill amortization incurred in 2004.
    Furthermore, operating profit reflects the inclusion of royalty and commission income in the operating profit for
    2004 and 2005.


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Net income from continuing operations increases 39%
The Group’s net income from continuing operations increased 39% to € 225 million in the first
half of 2005 from € 163 million in 2004. Strong sales increases, coupled with improving gross
and operating margins, were the main drivers of this improvement.
Minority interests declined 10% to € 6 million in the first half of 2005 (2004: € 6 million). The
Group’s tax rate in the first half declined 2.7 percentage points to 33.1% from 35.8% in 2004. On
a comparable basis, net income for the Group’s continuing operations would have increased
25% during the first six months of 2005.

Basic earnings per share from continuing operations at € 4.78
The Group’s basic earnings per share from continuing operations increased 39% to € 4.78 for
the first six months of 2005 versus € 3.43 in 2004. First half year diluted earnings per share from
continuing operations were up 31% to € 4.50 in 2005 from € 3.43 in 2004. On a comparable
basis, basic and diluted earnings per share from continuing operations would have increased
25% and 18% respectively during the first six months of 2005.

Net income attributable to shareholders from continuing and discontinued operations up
48%
The Group’s net income attributable to shareholders from continuing and discontinued
operations increased 48% to € 171 million in the first half of 2005 versus € 116 million in the
prior year. This reflects the strong performance of the Group’s continuing operations. In the
first half of 2005, net income from discontinued operations decreased 20% to negative € 49
million from negative € 41 million in 2004, reflecting a decline in Salomon’s operating activities
as well as negative effects related to the planned divestiture of this business segment. On a
comparable basis, net income attributable to shareholders from continuing and discontinued
operations would have increased 24% during the first six months of 2005.

Basic earnings per share from continuing and discontinued operations at € 3.73
The Group’s basic earnings per share from continuing and discontinued operations increased
47% to € 3.73 for the first six months of 2005 versus € 2.54 in 2004. First half year diluted
earnings per share from continuing and discontinued operations increased 39% to € 3.53 in
2005 from € 2.54 in 2004. On a comparable basis, basic and diluted earnings per share from
continuing and discontinued operations would have increased 22% and 16% respectively
during the first six months of 2005.

Working capital improvement continues
Receivables at adidas-Salomon were reduced by 7% to € 1.039 billion at the end of the first half
of 2005 versus € 1.122 billion in the prior year, mainly because € 84 million were transferred to




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“Assets classified as held for sale”.5 Receivables for continuing operations decreased 1% in euro
terms. On a currency-neutral basis, this represents a decline of 3% and is the result of strict
discipline in the Group’s trade terms management and concerted collection efforts. Group
inventories were reduced by 12% to € 1.146 billion at the end of the first half of 2005 versus
€ 1.304 billion in 2004, mainly as a result of the reclassification of € 225 million inventories into
“Assets classified as held for sale”. Inventories from continuing operations increased 5% in euro
terms or 4% on a currency-neutral basis, which is below the current backlog level and the
Group’s sales growth expectations.

Net borrowings reduced by € 425 million
Net borrowings at June 30, 2005 were € 542 million, down 44% or € 425 million versus € 967
million in the prior year. Strong bottom-line profitability and continued tight working capital
management were the drivers of this reduction. As a consequence, the Group’s financial
leverage improved 37 percentage points to 29% in 2005 versus 66% in 2004.

Currency-neutral backlogs grow 9%
Currency-neutral order backlogs for adidas at the end of the first half of 2005 increased 9%
(+10% in euros) versus the prior year. Footwear backlogs grew 11% in currency-neutral terms
(+11% in euros), reflecting improvements in particular in the Sport Heritage division. Apparel
backlogs were up 8% on a currency-neutral basis (+9% in euros), highlighting the continued
strength of the “Apparel Breakthrough” initiative. From a regional perspective, orders in
Europe were up year-over-year (+2% currency-neutral, +3% in euros). In North America,
currency-neutral order backlogs increased 9% (+10% in euros) compared to the prior year.
Asian backlogs grew 29% in currency-neutral terms (+31% in euros).


                                       Footwear                                   Apparel                  Total
Change y-o-y                                     currency-                              currency-                  currency-
                                in €                                       in €                     in €
in %                                              neutral                                neutral                    neutral
Europe                           9                    9                    (2)              (3)      3                2
North America                    9                    8                     10              9       10                9
Asia                             21                  19                     38              36       31               29
Total                            11                  11                     9               8       10                9
adidas order backlogs by product category and region as at June 30, 2005




5
    The 2005 balance sheet items excluding net borrowings and equity only include the Group’s continuing operations
    whereas a restatement of the 2004 balance sheet items is not possible under IFRS. In the 2005 balance sheet, the
    assets and liabilities for the Salomon business segment, which is planned for divestiture at the end of the third
    quarter, are included in the Group’s total assets in separate positions as “Assets classified as held for sale” and
    “Liabilities classified as held for sale”.

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Net income growth target confirmed
As a result of an anticipated positive macroeconomic and sector environment and in view of
adidas backlog development, high expectations for adidas own-retail activities as well as
positive retailer feedback for adidas and TaylorMade-adidas Golf, adidas-Salomon continues to
expect mid- to high-single-digit currency-neutral revenue growth for the Group. This growth
projection is based on expectations of double-digit revenue growth in Asia and Latin America,
high-single-digit sales increases in North America and mid-single-digit growth in Europe. The
Group’s gross margin is expected to be around last year’s level of 48.0%. The continued gross
margin strength will be supported by an increased proportion of own-retail activities, an
improving product mix as well as favorable hedging rates that will continue to positively impact
sourcing costs. Driven by strong sales growth and continued high-level gross margin coupled
with positive effects as a result of the IFRS changes as well as the planned divestiture of the
Salomon business segment, adidas-Salomon expects to surpass the Group’s highest operating
margin on record and achieve a level of around 11%. The Group’s net income attributable to
shareholders from continuing and discontinued operations is projected to grow around 20% to
approximately € 375 million from the prior year’s level of € 314 million.

Herbert Hainer stated, “We have achieved a lot so far in 2005. And with all of our regions
reporting positive backlog growth, I am very confident that the second half of the year will once
again underline the broad strength of our Group.”

                                                     ***
Contacts:

Media Relations                                    Investor Relations
Jan Runau                                          Natalie M. Knight
Head of Corporate PR                               Head of Investor Relations
Tel.: +49 (0) 9132 84-3830                         Tel.: +49 (0) 9132 84-3584

Anne Putz                                          Hendric Junker
Corporate PR Manager                               Investor Relations Manager
Tel.: +49 (0) 9132 84-2964                         Tel.: +49 (0) 9132 84-4989

                                                   Sebastian Steffen
                                                   Investor Relations Manager
                                                   Tel.: +49 (0) 9132 84-3824


Please visit our corporate website: www.adidas-Salomon.com




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adidas-Salomon
Consolidated Income Statement (IFRS)1)


                                                                         2nd Quarter      2nd Quarter          Change
€ in millions                                                                 2005            2004


Net sales                                                                       1,516             1,401           8.2    %
Cost of sales                                                                     773               714           8.2    %
Gross profit                                                                      743               686           8.2    %
  (% of net sales)                                                             49.0%             49.0%           (0.0)   PP
Royalty and commission income                                                       11                11         (0.7)   %
Selling, general and administrative expenses                                      576               544           6.0    %
  (% of net sales)                                                             38.0%             38.8%           (0.8)   PP
Depreciation and amortization (excl. goodwill)                                      25                22         11.7    %
Goodwill amortization                                                                0                 9       (100.0)   %
Operating profit                                                                  153               123          24.6    %
  (% of net sales)                                                             10.1%              8.7%            1.3    PP
Financial expenses, net                                                             11                19        (42.0)   %
Income before taxes                                                               141               103          37.1    %
  (% of net sales)                                                              9.3%              7.4%            2.0    PP
Income taxes                                                                        48                33         45.2    %
  (% of income before taxes)                                                   33.8%             31.9%            1.9    PP
Net income from continuing operations                                               94                70         33.3    %
  (% of net sales)                                                              6.2%              5.0%            1.2    PP
Income from discontinued operations, net of tax                                   (27)              (25)          6.3    %
Net income                                                                          67                45         48.5    %
  (% of net sales)                                                              4.4%              3.2%            1.2    PP
Net income attributable to shareholders                                             66                44         51.7    %
  (% of net sales)                                                              4.4%              3.1%            1.3    PP
Net income attributable to minority interests                                      1                   1        (55.3)   %
Basic earnings per share from continuing operations (in € )                      2.02              1.51          33.9 %
Diluted earnings per share from continuing operations (in € )                    1.91              1.51          26.5 %
Basic earnings per share from continuing and discontinued
operations (in € )                                                               1.44              0.96          50.4 %
Diluted earnings per share from continuing and discontinued
operations (in € )                                                               1.37              0.96          43.7 %

Net Sales
                                                                         2nd Quarter      2nd Quarter          Change
€ in millions                                                                 2005            2004
adidas                                                                          1,304             1,207           8.0 %
TaylorMade-adidas Golf                                                            202               185           8.9 %

Europe                                                                            688              698           (1.4)   %
North America                                                                     401              363           10.3    %
Asia                                                                              354              281           26.2    %
Latin America                                                                      67               50           33.9    %

Rounding differences may arise in percentages and totals.
1)
  Pro-forma figures reflect continuing operations as a result of the planned divestiture of the Salomon business segment in
accordance with the Sale & Purchase Agreement (SPA) with Amer Sports Corporation, subject to amendments agreed upon
prior to transaction closing.

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adidas-Salomon
Consolidated Income Statement (IFRS)1)


                                                                        1st Half Year    1st Half Year      Change
€ in millions                                                               2005             2004


Net sales                                                                      3,189            2,906          9.8    %
Cost of sales                                                                  1,642            1,512          8.6    %
Gross profit                                                                   1,547            1,394         11.0    %
  (% of net sales)                                                            48.5%            48.0%           0.5    PP
Royalty and commission income                                                      22               20         5.4    %
Selling, general and administrative expenses                                   1,163            1,070          8.7    %
  (% of net sales)                                                            36.5%            36.8%          (0.4)   PP
Depreciation and amortization (excl. goodwill)                                     49               44        11.6    %
Goodwill amortization                                                               0               18      (100.0)   %
Operating profit                                                                 357              283         26.2    %
  (% of net sales)                                                            11.2%             9.7%           1.5    PP
Financial expenses, net                                                            20               30       (32.2)   %
Income before taxes                                                              337              253         33.1    %
  (% of net sales)                                                            10.6%             8.7%           1.9    PP
Income taxes                                                                     112                91        22.9    %
  (% of income before taxes)                                                  33.1%            35.8%          (2.7)   PP
Net income from continuing operations                                            225              163         38.7    %
  (% of net sales)                                                             7.1%             5.6%           1.5    PP
Income from discontinued operations, net of tax                                  (49)             (41)        19.7    %
Net income                                                                       177              122         45.1    %
  (% of net sales)                                                             5.5%             4.2%           1.3    PP
Net income attributable to shareholders                                          171              116         48.1    %
  (% of net sales)                                                             5.4%             4.0%           1.4    PP
Net income attributable to minority interests                                     6                  6       (10.0)   %
Basic earnings per share from continuing operations (in € )                     4.78             3.43         39.4 %
Diluted earnings per share from continuing operations (in € )                   4.50             3.43         31.3 %
Basic earnings per share from continuing and discontinued
operations (in € )                                                              3.73             2.54         46.7 %
Diluted earnings per share from continuing and discontinued
operations (in € )                                                              3.53             2.54         39.1 %

Net Sales
                                                                        1st Half Year    1st Half Year      Change
€ in millions                                                               2005             2004
adidas                                                                        2,816             2,584          9.0 %
TaylorMade-adidas Golf                                                          351               302         16.3 %

Europe                                                                        1,569             1,563          0.4    %
North America                                                                   757               667         13.5    %
Asia                                                                            708               551         28.4    %
Latin America                                                                   135                98         37.6    %

Rounding differences may arise in percentages and totals.
1)
  Pro-forma figures reflect continuing operations as a result of the planned divestiture of the Salomon business segment
in accordance with the Sale & Purchase Agreement (SPA) with Amer Sports Corporation, subject to amendments agreed
upon prior to transaction closing.

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adidas-Salomon
Consolidated Balance Sheet (IFRS)

€ in millions                                                   June 30         June 30         Change    Dec. 31
                                                                 2005           2004 * )           in %    2004


Cash and cash equivalents                                               252            200       26.2%            196
Short-term financial assets                                             240            228        5.5%            259
Accounts receivable                                                 1,039            1,122       (7.5)%       1,046
Inventories                                                         1,146            1,304      (12.1)%       1,155
Other current assets                                                    421            346       21.8%            378
                                                                    3,098            3,199       (3.2)%       3,035
Assets classified as held for sale                                      543                 -         -              -
Total current assets                                                3,642            3,199       13.8%        3,035

Property, plant and equipment, net                                      351            355       (1.1)%           368
Goodwill, net                                                           438            583      (24.9)%           572
Other intangible assets, net                                              91           103      (11.5)%             96
Long-term financial assets                                              121                94    28.5%              93
Deferred tax assets                                                     178            197      (10.0)%           167
Other non-current assets                                                119            122       (3.1)%           103
Total non-current assets                                            1,297            1,456      (10.9)%       1,399

Total assets                                                        4,939            4,655        6.1%        4,434

Short-term borrowings                                                      -                -         -           186
Accounts payable                                                        634            638       (0.7)%           592
Income taxes                                                            213            174       22.3%            167
Accrued liabilities and provisions                                      601            557        7.8%            558
Other current liabilities                                               133            182      (27.2)%           184
                                                                    1,580            1,552        1.8%        1,687
Liabilities classified as held for sale                                 177                 -         -              -
Total current liabilities                                           1,756            1,552       13.2%        1,687

Long-term borrowings                                                1,035            1,395      (25.8)%           863
Pensions and similar obligations                                        128            121        6.0%            129
Deferred tax liabilities                                                  83               60    38.9%              78
Other non-current liabilities                                             26               34   (24.5)%             31
Total non-current liabilities                                       1,272            1,610      (21.0)%       1,100

Share capital                                                           118            117        1.1%            117
Reserves                                                                  58           (34)     268.8%            (34)
Amounts directly recognized in equity relating to assets held
for sale                                                                  (3)               -         -              -
Retained earnings                                                   1,705            1,381       23.5%        1,534
Shareholders' equity                                                1,878            1,463       28.4%        1,618
Minority interests                                                        33               30     7.5%              29

Total equity                                                        1,911            1,493       28.0%        1,646

Total liabilities and equity                                        4,939            4,655        6.1%        4,434


Additional balance sheet information
Operating working capital                                           1,551            1,788      (13.2)%       1,610
Working capital                                                     1,519            1,648       (7.8)%       1,348
Net total borrowings                                                    542            967      (44.0)%           594
Financial leverage                                                  28.9%           66.1%                     36.7%


Rounding differences may arise in percentages and totals.
*)Restated due to application of amendment to IAS 19


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