Adidas 2002 Annual Report Download - page 83

Download and view the complete annual report

Please find page 83 of the 2002 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 160

  • 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
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

81
adidas DEVELOPMENT IN LATIN AMERICA
CURRENCY-NEUTRAL adidas SALES IN LATIN AMERICA
GROW 31% /// Latin America sales declined 9% from
€ 174 million in 2001 to € 158 million in 2002. This decline,
however, was driven solely by negative currency effects. On a
currency-neutral basis, sales grew 31% with strong increases
in Brazil and Mexico.
UNDERLYING FOOTWEAR AND APPAREL SALES GROW IN
LATIN AMERICA /// adidas footwear sales in Latin America
declined by 11% from € 122 million in 2001 to € 109 million
in 2002. On a currency-neutral basis, this represents an
improvement of 26% and was driven mainly by the region’s
largest footwear category: running. In this category, sales
declined 19% (+20% currency-neutral). Sport Heritage prod-
ucts also sold strongly in the region, with sales up 32% (+70%
currency-neutral) signaling strong brand momentum in the
region. Apparel sales declined by 6% from € 42 million to
€ 40 million. Currency-neutral, this represents an improve-
ment of 41% year-over-year. The two major drivers of this
improvement were growing sales in the football and training
categories, where sales grew 1% (+40% currency-neutral) and
declined 1% (+40% currency-neutral) respectively versus the
prior year. On a currency-neutral basis, no category in the
region declined versus the prior year.
adidas GROSS MARGIN IN LATIN AMERICA DECLINES ///
The gross margin decreased by 0.8 percentage points in Latin
America, from 40.6% in 2001 to 39.7% in 2002. This again was
the result of depressed currencies.
OUTLOOK FOR adidas IN LATIN AMERICA CONTINUES TO BE
CAUTIOUSLY OPTIMISTIC /// Although order taking in Latin
America is less formalized than in other regions of the world,
initial discussions with customers suggest that currency-
neutral sales are expected to grow in Latin America during
2003. Currency effects, however, continue to be significant,
which makes euro-based targets difficult to quantify. The
primary drivers of this growth will be improved brand
positioning in major markets as well as increased adidas
own-retail programs. The Group also expects to continue to
improve local sourcing efforts in the region, which will drive
margin improvements and reduce risks related to currency
fluctuations.
adidas LATIN AMERICA € in millions
2002 2001 Change
Net sales 158 174 (9%)
Gross margin 39.7% 40.6% (0.8pp)
Operating profit 23 15 53%
adidas ORIGINALS “DRIVING
PACKAGE” /// SAN REMO