Adidas 2000 Annual Report Download - page 38

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Sales of the adidas brand increased 6% in 2000. All
regions reported improvements with the exception of
North America, which declined slightly. The operating
profit was negatively impacted by currency effects, the
Growth and Efficiency Program and additional marketing
expenses associated with the Summer Olympic Games
and the EURO 2000TM soccer championships. For 2001,
sales are expected to increase in Europe, Asia and Latin
America. In North America, backlogs are expected to
begin to improve in the second half of the year.
Net Sales Surpass g4.5 billion for the First Time
In 2000, adidas net sales increased by 6% to c4.7 billion.
Growth came from all regions except North America. Currency
effects played a role in this development. Footwear was the
most important driver of sales growth, with sales up 12% to
c2.4 billion. Strongest growth came from the basketball and
adventure categories, which each increased more than 50%.
Hardware sales outpaced total brand sales with an increase
of 18% to c173 million. Sales of apparel declined 2% to
c2.1 billion despite strong growth in the adventure, running
and snowboard categories.
The gross margin of the adidas brand declined by 0.3 percent-
age points to 40.8%. Despite increased own-retail activities and
lower clearance sales at higher margins, currency pressure and
the difficult retail environment in the United States pushed
down the brand margin.
Operating expenses as a percentage of net sales increased
by 1.0 percentage points to 32.4%. As a result, operating profit
decreased by 9% to c391 million.
Sales for adidas in Europe Grow in 2000
In 2000, sales increased 3% to c2.4 billion for brand adidas
in Europe. This was the highest sales result ever in the region.
Major sports events, including the EURO 2000TM soccer
championships and the Summer Olympics had a positive
impact on sales figures.
adidas achieved the highest growth in markets where the brand
enjoyed strong exposure as a result of the EURO 2000TM soccer
championships. These were France, whose national team won
the championships, and Benelux, who hosted the event.
France was the main growth driver in the region, with sales
up 17%. Sales also developed particularly positively in Benelux,
Austria, Switzerland, Spain and Italy. Each of these markets
was helped by intensified key account activity. In 2000, a joint
venture in Finland with the former distributor commenced,
which generated new sales.
Sales declined in Germany, the United Kingdom and Norway.
In Germany and Norway, the declines were the result of
depressed retail conditions that affected all consumer products
and brands in 2000. In the United Kingdom, adidas sales
declined as fashion-oriented apparel, which makes up the
largest portion of our products there, continued to be under
pressure.
adidas now holds the market leadership position in many of
Europe’s largest countries. We are also the undisputed market
leader in Central and Eastern Europe.
adidas Footwear and Hardware Increase in Europe
Footwear sales in 2000 were again up on the previous year,
showing an increase of 7%. Growth was strongest in France
and Italy with improvements of 13% and 12% respectively.
adidas adidas at a Glance
(in euros) Change year-
2000 1999 over-year
Net sales 4.7bn 4.4bn 6%
Gross margin 40.8% 41.1% (0.3pp)
Operating profit 391m 431m (9%)
Order backlogs* 1%
* At year-end
adidas Footwear Sales by Product
(in %)
Tennis 8
Others 17
Running 38
Basketball 15
Soccer 11
Training 11
adidas Apparel Sales by Product
(in %)
Tennis 3
Others 11
Running 2
Basketball 1
Soccer 15 Training 68