Adidas Ag · XETR:ADS
Adidas — 9M 2009 Earnings Presentation
29 slides from Adidas's earnings presentation, November 2009
Slide 1: Nine Months 2009 Results Roadshow
Nine Months 2009 Results Roadshow Robin Stalker, CFO November 2009
Slide 2: Agenda
Agenda • Nine Months 2009 Results Recap • Financial Highlights • Strategic Brand Initiatives • Outlook 2
Slide 3: adidas Group Financial Position Improves Sequentially
adidas Group Financial Position Improves Sequentially • Balance sheet Q3 2009 YTD 2009 significantly € 2,888 € 7,923 strengthened Net sales (in millions) (7%) c-n (7%) c-n • Strong cash flow Gross margin 45.3% 45.1% generation (3.7pp) (4.3pp) € 1.03 € 1.13 • Ongoing weak Diluted EPS consumer and (29
Slide 4: Challenging Market Environment In Europe Continues
Challenging Market Environment In Europe Continues • Strong sequential improvement from prior quarter • Difficult retail environment in Western Europe persists • Significant negative top-line impact from Russian rouble devaluation 4
Slide 5: Disciplined Approach To North American Market
Disciplined Approach To North American Market • No positive stimulus from back-to-school season • Double-digit inventory declines for all our brands • Ensuring brand equity at the forefront of our activities 5
Slide 6: Positives And Negatives In Asia
Positives And Negatives In Asia • Heterogenous sales performance by country • Sales decline in Japan and China • Good progress on clearance of excess inventories in China • Other emerging markets grow solidly 6
Slide 7: Import Tariffs Threaten Growth In Latin America
Import Tariffs Threaten Growth In Latin America • Most resilient region within Group • On track to taking market leadership • Import duties on footwear threaten growth prospects 7
Slide 8: Agenda
Agenda • Nine Months 2009 Results Recap • Financial Highlights • Strategic Brand Initiatives • Outlook 8
Slide 9: Sales Decline In All Segments In Q3 2009
Sales Decline In All Segments In Q3 2009 Q3 2009 YTD 2009 (6%) (7%) (5%) (4%) (12%) (9%) (11%) (6%) (12%) (5%) (6%) 3% (7%) (7%) (6%) (4%) (15%) 5% (15%) 5% In euros Currency-neutral 9
Slide 10: Group Gross Margin Declines 3.7pp In Third Quarter
Group Gross Margin Declines 3.7pp In Third Quarter Q3 2009 YTD 2009 • Clearance of excess inventories (2.7pp) 47.1% (2.2pp) 46.9% • Higher input costs • Currency devaluation (1.8pp) 34.7% (5.5pp) 32.6% effects, in particular related to the Russian 39.0% 39.3% rouble (3.8pp) (6.0pp) 45.3%1) 45.1%1) (
Slide 11: Other Operating Expenses Down 6% In Third Quarter
Other Operating Expenses Down 6% In Third Quarter Q3 2009 YTD 2009 Other operating expenses € 1.014 billion € 3.246 billion (6%) +1% Operating profit € 336 million € 465 million (29%) (52%) Net financial expenses € 30 million € 123 million (28%) +9% Income tax rate 30.3% 34.2% +0.7pp +3.7pp Net inco
Slide 12: Redemption Of Convertible Bond Announced
Redemption Of Convertible Bond Announced • Early redemption of € 400 million convertible bond 2003/2018 announced at the beginning of October • Call option exercised: Average share price over 20 day period above € 33.15 in 35 day period preceding the notification • Most or all bondholders expected t
Slide 13: Group Inventories Decline Significantly
Group Inventories Decline Significantly • Inventories decrease 8% on a currency-neutral basis 25% 21% • Reebok and TaylorMade-adidas 20% 16% 18% 15% Golf inventories down double- 15% 13% digits 10% 8% • adidas inventories down 5% in all regions except 0% Latin America Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q
Slide 14: Strong Operating Working Capital Progress
Strong Operating Working Capital Progress • Receivables down 7% on a currency-neutral basis 27 • Slow receipt of payments 26.2 26 • Lower sales level 25.7 25.6 25.6 25.2 • Payables increase 15% on a 25 currency-neutral basis 24.7 24.5 24.5 24.2 24 23 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q
Slide 15: Net Debt Decreases € 299 Million Year-Over-Year
Net Debt Decreases € 299 Million Year-Over-Year • € 488 million net cash from 3,250 operations generated in Q3 3,000 2,883 2,732 • Year-over-year net 2,750 2,593 borrowings 2,500 2,260 2,294 2,201 2,189 decrease 12% to 2,250 2,073 € 2.294 billion 2,000 1,766 1,750 • Financial leverage 1,500 decrease
Slide 16: Agenda
Agenda • Nine Months 2009 Results Recap • Financial Highlights • Strategic Brand Initiatives • Outlook 16
Slide 17: At Least Ten adidas Teams Heading To South Africa
At Least Ten adidas Teams Heading To South Africa 17
Slide 18: New Football Products Launch Monthly Until Event Kick-Off
New Football Products Launch Monthly Until Event Kick-Off 18
Slide 19: Driving Higher Representation Of New Reebok Product Concepts
Driving Higher Representation Of New Reebok Product Concepts • Clear brand strategy • Encouraging retailer feedback • Key initiatives: • Expanding toning product offering • Leveraging JUKARI franchise • Driving brand visibility and identity through new marketing campaign Brand World Voice 19
Slide 20: Supermodel Bar Rafaeli Drives EasyTone In Europe
Supermodel Bar Rafaeli Drives EasyTone™ In Europe www.Reebok.com 20
Slide 21: Expanding The Toning Category Beyond Walking And Women's
Expanding The Toning Category Beyond Walking And Women’s 21
Slide 22: The Next Wave Of JUKARI
The Next Wave Of JUKARI JUKARI Fit to Fly JUKARI Fit to Flex Reebok branded instructor product and / or “Reebok classes” and / or Reebok Licensed Equipment 22
Slide 23: Introducing Reebok's New Global Brand Campaign
Introducing Reebok’s New Global Brand Campaign 23
Slide 24: TaylorMade Advances To Top Spot In Irons
TaylorMade Advances To Top Spot In Irons 24
Slide 25: Continuous Flow Of Innovation At TMaG
Continuous Flow Of Innovation At TMaG 25
Slide 26: Agenda
Agenda • Nine Months 2009 Results Recap • Financial Highlights • Strategic Brand Initiatives • Outlook 26
Slide 27: Group Outlook For 2009
Group Outlook For 2009 adidas Group Sales (currency-neutral) low- to mid-single-digit decline Gross margin 45.0% to 45.5% Operating margin around 5% Diluted earnings per share € 1.15 to € 1.30 27
Slide 28: adidas Group Prepared For The Future
adidas Group Prepared For The Future • Financial position to further strengthen in fourth quarter • First positives and negatives for 2010 visible already • Group in the starting blocks for an eventful year ahead 28
Slide 29: Questions & Answers
QUESTIONS & ANSWERS 29