Adidas 2002 Annual Report Download - page 86

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84 REPORTING MANAGEMENT DISCUSSION & ANALYSIS /// TAYLORMADE-adidas GOLF
TaylorMade-adidas Golf /// IN 2002, TAYLORMADE-
adidas GOLF SALES GREW 30%, WITH DOUBLE-DIGIT
INCREASES IN ALL REGIONS. THIS WAS THE HIGHEST RATE
OF IMPROVEMENT WITHIN THE GROUP AND OCCURRED
DESPITE MACROECONOMIC PRESSURES ON THE INDUSTRY,
WHICH LED TO DECLINES FOR MANY MAJOR COMPETITORS.
THE STRONG ACCEPTANCE OF THE R500 SERIES DRIVERS,
WHICH WERE LAUNCHED MID-YEAR, WAS THE PRIMARY
REASON FOR THIS SALES GROWTH. ADDITIONALLY, FIRST-
TIME INCLUSION OF SALES FROM MAXFLI AND SLAZENGER
GOLF CONTRIBUTED € 97 MILLION TO TOP-LINE REVENUES.
GROSS PROFIT AT TAYLORMADE-adidas GOLF INCREASED
23% FROM € 281 MILLION IN 2001 TO € 345 MILLION IN
2002. OPERATING PROFIT GREW 19% FROM € 63 MILLION IN
2001 TO € 74 MILLION. IN 2003, SALES AND OPERATING
PROFIT IMPROVEMENTS ARE EXPECTED TO CONTINUE.
STRONG ORGANIC GROWTH AT TAYLORMADE-adidas GOLF
AS WELL AS EXCELLENT MAXFLI AND SLAZENGER GOLF
SALES /// Net sales at TaylorMade-adidas Golf grew
30% from € 545 million in 2001 to € 707 million in 2002. On
a currency-neutral basis, sales grew 37%. The first-time
inclusion of Maxfli and Slazenger Golf sales impacted sales
figures, particularly in North America where the brands
are primarily marketed. Excluding Maxfli and Slazenger
Golf sales, TaylorMade-adidas Golf sales grew 12% from
€ 545 million in 2001 to € 610 million in 2002. On a currency-
neutral basis, this increase was 18% and is the highest sales
growth among Group brands.
METALWOODS SALES GROW 24% /// In particular, Taylor-
Made metalwoods sales were up 24% from € 280 million in
2001 to € 348 million in 2002. This is the industry’s largest
and most important category. As a result of this growth,
TaylorMade-adidas Golf is now the world leader in annual
metalwoods sales. The R500 Series, a new line of metalwoods
which help to optimize the swing characteristics of individual
golfers, was the primary contributor of growth in the category.
In 2002, the TaylorMade R500 Series drivers were the leading
drivers on the US, European and Japanese professional golf
tours. Sales in the category were also helped by continued
strong sales of the 300 Series metalwoods. Metalwoods
comprise nearly 50% of TaylorMade-adidas Golf sales.
TAYLORMADE-adidas GOLF AT A GLANCE € in millions
2002 2001 Change
Net sales 707 545 30%
Gross margin 48.8% 51.5% (2.7pp)
Operating profit 74 63 19%
TAYLORMADE-adidas GOLF NET SALES BY PRODUCT
1) Includes golf bags, gloves and other accessories
49% Metalwoods
18% Irons
Other Hardware1) 6%
Putters 3%
Golf Balls 10%
Apparel 8%
Footwear 6%
TAYLORMADE-adidas GOLF NET SALES BY REGION
16% EuropeAsia 30%
North America 54%