Adidas Ag · XETR:ADS
Adidas — adidas-Salomon — HVB German Investment Conference 2005
27 slides from Adidas's conference presentation, Sep 29, 2005
Slide 1: HypoVereinsbank German Investment Conference
adidas-Salomon AG HYPOVEREINSBANK GERMAN INVESTMENT CONFERENCE SEPTEMBER 29, 2005 ROBIN STALKER, CFO
Slide 2: Agenda
adidas-Salomon AG HVB German Investment Conference 2005 Agenda • First half year results • Operating highlights • Reebok acquisition • Outlook 2
Slide 3: Excellent First Half Year Results
adidas-Salomon AG HVB German Investment Conference 2005 Excellent First Half Year Results • Currency-neutral sales grow 11% • Gross margin grows 50bp to 48.5% • Operating profit up 26%, with operating margin at record 11.2% • Net income attributable to shareholders from continuing and discontinued o
Slide 4: Outstanding First Half Regional Performance
adidas-Salomon AG HVB German Investment Conference 2005 Outstanding First Half Regional Performance Currency-Neutral Operating Profit Sales 9 Europe + 1% + 18% 9 North America + 18% + 234% 9 Asia + 30% + 59% 9 Latin America + 36% + 55% 4
Slide 5: Agenda
adidas-Salomon AG HVB German Investment Conference 2005 Agenda • First half year results • Operating highlights • Reebok acquisition • Outlook 5
Slide 6: adidas and Polar Introduce the First Completely Integrated Performance Measurement System
adidas-Salomon AG HVB German Investment Conference 2005 adidas and Polar Introduce the First Completely Integrated Performance Measurement System 6
Slide 7: New Partnership Announced with Porsche Design
adidas-Salomon AG HVB German Investment Conference 2005 New Partnership Announced with Porsche Design 7
Slide 8: New T-MAC 5 to Launch in Fall 2005
adidas-Salomon AG HVB German Investment Conference 2005 New T-MAC 5 to Launch in Fall 2005 8
Slide 9: Our Successful adidas by Stella McCartney Line Goes into the Second Season
adidas-Salomon AG HVB German Investment Conference 2005 Our Successful adidas by Stella McCartney Line Goes into the Second Season 9
Slide 10: Largest Sport Performance Center Globally Opened in New York City
adidas-Salomon AG HVB German Investment Conference 2005 Largest Sport Performance Center Globally Opened in New York City 10
Slide 11: The Salomon Divestiture
adidas-Salomon AG HVB German Investment Conference 2005 The Salomon Divestiture • Approx. € 485 million enterprise value of Salomon segment, adjusted for changes in capital employed • All-cash transaction • Subject to customary terms and conditions (e.g. approval of antitrust authorities) • Deal exp
Slide 12: Agenda
adidas-Salomon AG HVB German Investment Conference 2005 Agenda • First half year results • Operating highlights • Reebok acquisition • Outlook 12
Slide 13: A Stronger Competitive Platform
adidas-Salomon AG HVB German Investment Conference 2005 A Stronger Competitive Platform • A world leader in athletic 46% of Sales footwear and apparel 35% of Sales • € 8,899 million in net sales and € 820 million in operating profit(1) • Strong positions in three key regions • Better balanced geogra
Slide 14: Two Well-Defined Brand Identities
adidas-Salomon AG HVB German Investment Conference 2005 Two Well-Defined Brand Identities • Sports • Sports lifestyle performance inspired • European • American sports heritage 14
Slide 15: Transaction Highlights
adidas-Salomon AG HVB German Investment Conference 2005 Transaction Highlights • US $59.00 in cash per Reebok share • Total transaction value of € 3.1bn • Annual cost synergies estimated at ca.€ 125m • Offer approved by the Board of Reebok • Paul and Phyllis Fireman have entered into a voting agreem
Slide 16: Six Opportunities for Value
adidas-Salomon AG HVB German Investment Conference 2005 Six Opportunities for Value • Geographies and categories • Consumers and demographics • Technology • Licenses, teams and events • Distribution channels • Operating efficiencies 16
Slide 17: Widen Geographic and Category Impact
adidas-Salomon AG HVB German Investment Conference 2005 Widen Geographic and Category Impact • Idea sharing across markets and geographies • Capitalize on Reebok’s skills and know-how to accelerate adidas’ position in North America • Benefit from adidas’ expertise in Europe and Asia for Reebok • Com
Slide 18: Reach a Broader Spectrum of Consumers and Demographics
adidas-Salomon AG HVB German Investment Conference 2005 Reach a Broader Spectrum of Consumers and Demographics • Ability to identify sport / style trends • Continue brand developments into new segments • Benefit from Reebok’s expertise in women’s segment • Capitalize on Reebok’s skills in sport life
Slide 19: Expand Technology Expertise Across Brands
adidas-Salomon AG HVB German Investment Conference 2005 Expand Technology Expertise Across Brands • Enhance profile as technology and innovation leader • More products to capitalize on R&D developments PUMP 2.0 TECHNOLOGY • New technology development and awareness across brands 19
Slide 20: Maximize License, Team and Event Assets
adidas-Salomon AG HVB German Investment Conference 2005 Maximize License, Team and Event Assets • Transfer of skills and know-how • Management of exclusive agreements • Relationship with teams and athletes • More active events calendar 20
Slide 21: Broaden Channel Relationships
adidas-Salomon AG HVB German Investment Conference 2005 Broaden Channel Relationships • Capitalize on adidas’ in-depth understanding of specialized sporting goods channel • Benefit from Reebok’s strong insights into department store and general merchandise channels • Expand on own retail initiatives
Slide 22: Increase Operating Efficiencies
adidas-Salomon AG HVB German Investment Conference 2005 Increase Operating Efficiencies Synergies Selected Initiatives Sales, • Higher efficiency through combined sales and Marketing & Distribution marketing scale 40% • Better utilization of available distribution capacity Admin. Services • Simplify
Slide 23: Agenda
adidas-Salomon AG HVB German Investment Conference 2005 Agenda • First half year results • Operating highlights • Reebok acquisition • Outlook 23
Slide 24: Strong Footwear Backlogs Support Continuously Positive Order Book (YOY)
adidas-Salomon AG HVB German Investment Conference 2005 Strong Footwear Backlogs Support Continuously Positive Order Book (YOY) euros currency • Positive backlog neutral development in all regions Footwear + 11% + 11% Apparel + 9% + 8% Total + 10% + 9% 24
Slide 25: Full Year Guidance Confirmed
adidas-Salomon AG HVB German Investment Conference 2005 Full Year Guidance Confirmed Currency-neutral sales growth mid- to high-single-digit Gross margin ca. 48% Operating margin ca. 11% Net income attributable to ca. 20% shareholders from continuing and discontinued operations 25
Slide 26: Medium Term Financial Targets
adidas-Salomon AG HVB German Investment Conference 2005 Medium Term Financial Targets Mid to high single digit sales growth Gross margin of approximately 46% to 48% Operating margin greater than 11% Double digit net income growth 26
Slide 27: Question and Answer Session
adidas-Salomon AG HVB German Investment Conference 2005 QUESTION AND ANSWER SESSION 27
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