Adidas 2000 Annual Report Download - page 47

Download and view the complete annual report

Please find page 47 of the 2000 Adidas annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

adidas-Salomon ANNUAL REPORT 2000
43
Management Discussion & Analysis
2000 was a year of recovery for the bicycle and bike
component industry. On the back of high-profile appear-
ances at the Summer Olympics and the Tour de France,
sales increased 25%. The gross margin improved slightly.
As a result of relative operating expense decreases,
operating profit improved nearly 500% to reach a record
g4 million.
Sales Improve in All Regions
Net sales of the Mavic brand increased by 25% to c55 million
in 2000. The introduction of new wheel products, in particular
the Ksyrium SSC and Cosmos road wheels gained momentum,
driving sales for the category up 65%. Rim development was
virtually flat. Regionally, sales were up 36% in North America,
34% in Asia and 22% in Europe, the most important market for
the brand.
Gross Margin Improves Slightly
Gross margin improved to 36.4%, up 0.1 percentage points
over last year. As a result, Mavic’s gross profit increased 25%
to c20 million. This increase was driven by an improved
product mix as well as supply chain enhancements.
Operating Result Increases Nearly 500%
The operating profit for Mavic increased 487% to c4 million.
This was a result of decreased operating expenses as a percent
of net sales. This positive development was driven by increased
operating efficiencies, in particular the better utilization of mar-
keting instruments and logistics.
Brand Repositioning to Set Tone for 2001
2001 will be a year in which Mavic undergoes a strategic
realignment. Focus will be put on defining the brand, optimizing
the supply chain and improving brand communication. Mavic
sales will be flat, as the mountain bike business, which makes
up 50% of sales, continues to be slow. Improved efficiencies,
however, based on synergies gained from Mavic’s integration
with Salomon, will drive bottom-line improvements for the brand.
Mavic Mavic at a Glance
(euros in millions) Change year-
2000 1999 over-year
Net sales 55 44 25%
Gross margin 36.4% 36.3% 0.1pp
Operating profit 4 1 487%
Mavic Sales by Region
(euros in millions) Variance
2000 1999 in %
Europe 42 34 22
North America 11 8 36
Asia 2 2 34
Total 55 44 25
Mavic Sales by Product
(in %)
Rims 39
Other Bicycle Components 3
Wheels 58