Adidas Ag · XETR:ADS
Adidas — Non-Deal Roadshow (March 2009)
39 slides from Adidas's roadshow presentation, March 2009
Slide 1: 2008 Full Year Roadshow
2008 Full Year Roadshow Robin J. Stalker, CFO March 2009
Slide 2: Agenda
Agenda • 2008 Operational Highlights • 2008 Financial Highlights • Outlook and Strategic Initiatives 2009 • Summary 2
Slide 3: Strong Momentum At adidas And TaylorMade
Strong Momentum At adidas And TaylorMade • adidas never stronger in 60- year history • TaylorMade-adidas Golf on its way to be the number 1 golf company in the world • Important strategic decisions taken at Reebok 3
Slide 4: Major Sporting Events Reinforce adidas Brand Image
Major Sporting Events Reinforce adidas Brand Image 4
Slide 5: Partnership Portfolio Secured And Extended
Partnership Portfolio Secured And Extended 5
Slide 6: adidas Delivers Excellent Financial Performance
adidas Delivers Excellent Financial Performance Q4 FY Sales growth +7% +14% (currency-neutral) Gross margin 47.0% 48.6% +0.6pp +1.2pp Operating margin 8.1% 14.0% +4.2pp +1.1pp 6
Slide 7: Reebok Distribution Improved Through Controlled Space Rollout
Reebok Distribution Improved Through Controlled Space Rollout 7
Slide 8: Reebok Ready To Implement Joint Operating Model
Reebok Ready To Implement Joint Operating Model 8
Slide 9: Reebok Still A Work In Progress
Reebok Still A Work In Progress Q4 FY Sales growth (3%) (2%) (currency-neutral) Gross margin 34.1% 37.0% (4.0pp) (1.7pp) Operating margin (1.5%) (0.3%) (5.1pp) (5.0pp) 9
Slide 10: TMaG Metalwoods Market Share Grows Strongly
TMaG Metalwoods Market Share Grows Strongly • Most-played driver on tours • Metalwoods leadership further strengthened • Progress made in balls and putters 10
Slide 11: Acquisition of Ashworth Adds New Lifestyle Dimension
Acquisition of Ashworth Adds New Lifestyle Dimension • Authentic golf-inspired lifestyle brand • TaylorMade-adidas Golf now global market leader in golf apparel • Integration under way 11
Slide 12: TaylorMade-adidas Golf Delivers Solid Performance
TaylorMade-adidas Golf Delivers Solid Performance Q4 FY Sales growth (4%) +7% (currency-neutral) Gross margin 41.0% 44.3% (5.1pp) (0.5pp) 12.2% 9.6% Operating margin +0.1pp +1.5pp 12
Slide 13: Strong 2008 Creates Solid Foundation
Strong 2008 Creates Solid Foundation • 2008 an important year for all our brands • Challenges ahead • Decisive measures taken 13
Slide 14: Agenda
Agenda • 2008 Operational Highlights • 2008 Financial Highlights • Outlook and Strategic Initiatives 2009 • Summary 14
Slide 15: Full Year Currency-Neutral Group Revenues Up 9%
Full Year Currency-Neutral Group Revenues Up 9% 14% 10% (2%) (8%) 7% 1% 9% 5% (10%) (5%) 0% 5% 10% 15% 20% In euros Currency-neutral 15
Slide 16: Group Operating Margin Approaches 10%
Group Operating Margin Approaches 10% Q4 2008 Full Year 2008 Gross margin 46.4% 48.7% (0.2pp) 1.3pp R&C income € 25m € 89m (20%) (13%) Opex as a % of 45.1% 40.5% sales (1.8pp) +0.6pp Operating profit € 107m € 1,070m +77% +13% Operating margin 4.2% 9.9% +1.7pp +0.7pp 16
Slide 17: Basic EPS Grow 20% in 2008
Basic EPS Grow 20% in 2008 Q4 2008 Full Year 2008 Net financial expenses € 53m € 166m +71% +23% Income before taxes +82% € 54m +11% € 904m Effective tax rate 1.6% 28.8% (26.1pp) (3.0pp) Net income attrib. to € 54m € 642m shareholders +151% +16% Basic EPS € 0.28 € 3.25 +164% +20% 17
Slide 18: Progress On Operating Working Capital Reduction
Progress On Operating Working Capital Reduction • Average operating 26 25.8 working capital as a 25.5 25.6 25.7 26 percentage of sales 25.2 reduced by 70bp 25 24.7 to 24.5% 24.5 24.5 25 24.2 • Inventories increase 24 21% on a currency- 24 neutral basis 23 Q4/06 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3
Slide 19: Reduction Of Net Borrowings A Key Priority
Reduction Of Net Borrowings A Key Priority • Net borrowings 3,000 increase 24% to 2,750 2,593 € 2.189 billion 2,500 2,519 2,395 2,231 2,260 2,250 2,201 2,189 • Financial leverage 2,000 2,073 increases 6.2pp 1,750 1,766 to 64.6% 1,500 1,250 1,000 Q4/06 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08
Slide 20: Foreign Exchange Rate Volatility To Affect Results
Foreign Exchange Rate Volatility To Affect Results • Exchange rate volatility to potentially impact Group top- and bottom-line results • Several important currencies have significantly depreciated compared to the prior year • No gross margin support from hedging 20
Slide 21: Agenda
Agenda • 2008 Operational Highlights • 2008 Financial Highlights • Outlook and Strategic Initiatives 2009 • Summary 21
Slide 22: adidas Currency-Neutral Backlogs Decline 6%
adidas Currency-Neutral Backlogs Decline 6% Europe North Asia Total • Order decline America reflects tougher environment FW (3) 4 (11) (4) • Non-recurrence of UEFA EURO 2008™ APP (4) (5) (8) (6) impacts backlogs in Europe Total1 (5) 0 (10) (6) • Differences in order Currency-neutral development of a
Slide 23: Reebok Backlogs Not Indicative Of Future Sales
Reebok Backlogs Not Indicative Of Future Sales Europe North Asia Total • UK and Spain America continue to weigh on European FW (12) (22) (11) (10) backlogs • Declines in licensed APP (22) (50) (16) (33) apparel business affect North Total1 (15) (29) (13) (17) American backlogs Currency-neutral devel
Slide 24: 2009 Sales And Earnings Per Share To Decline
2009 Sales And Earnings Per Share To Decline adidas Group Sales (currency-neutral) Low- to mid-single-digit decline Gross margin Decline Operating margin Decline Net income Decline 24
Slide 25: Cost Control Measures Already In Full Swing
Cost Control Measures Already In Full Swing ; Joint operating model in Europe and Latin America ; Streamlining Complexity programme at adidas ; Cut back on travel costs, external consultants ; Hiring freeze implemented ; Scale back of workforce in the US and UK 25
Slide 26: Committed To Long-Term Strategic Priorities
Committed To Long-Term Strategic Priorities Long-term strategies Invest Reduce costs Product & Innovation Hiring Freeze Controlled Space Joint Operating Models Travel Cost Reductions Promotion Partnerships “Streamlining Complexity” Infrastructure Projects Programme Retail Support 26
Slide 27: adidas Taking Interactive Training To A New Level
adidas Taking Interactive Training To A New Level 27
Slide 28: Extending Leadership In High-Performance Apparel
Extending Leadership In High-Performance Apparel 28
Slide 29: Build-Up To 2010 FIFA World Cup
Build-Up To 2010 FIFA World Cup™ 29
Slide 30: New Labels Add Momentum To adidas Sport Style
New Labels Add Momentum To adidas Sport Style 30
Slide 31: Reebok Brand Priorities Refined
Reebok Brand Priorities Refined 31
Slide 32: Women's Takes Centre Stage For Reebok In 2009
Women’s Takes Centre Stage For Reebok In 2009 32
Slide 33: JUKARI Fit to Fly Revolutionises Women's Workout
JUKARI Fit to Fly™ Revolutionises Women’s Workout 33
Slide 34: Exciting Reebok Product Innovations For 2009
Exciting Reebok Product Innovations For 2009 34
Slide 35: TMaG Initiatives Already Making Headlines
TMaG Initiatives Already Making Headlines 35
Slide 36: Agenda
Agenda • 2008 Operational Highlights • 2008 Financial Highlights • Outlook and Strategic Initiatives 2009 • Summary 36
Slide 37: adidas Group Ready For The Challenges Ahead
adidas Group Ready For The Challenges Ahead • Leading industry position • Well-balanced product, brand and partnership portfolio • Building a long-term sustainable growth company 37
Slide 38: Questions & Answers
QUESTIONS & ANSWERS 38
Slide 39: Upcoming Financial Reporting Dates
Upcoming Financial Reporting Dates May 5, 2009 First Quarter 2009 Results May 7, 2009 Annual General Meeting May 8, 2009 Dividend Payment1) Aug 5, 2009 First Half 2009 Results Nov 4, 2009 Nine Months 2009 Results 1) Subject to Annual General Meeting approval 39