Reebok 2006 Annual Report Download - page 39

035
adidas AG Share Price Under Pressure
After a strong start in January, when our share reached its
year-high of € 44.00, the share price declined in February and
early March as a result of concerns regarding Reebok’s short-
term business outlook. Analyst reports commenting positively
on the future of the combined Group after our annual Investor
Day led to a recovery that continued until May. After a strong
increase on the day of the announcement of our first quarter
earnings, our share price subsequently declined strongly in
line with the overall market. Despite adidas’ successful spon-
soring activities around the 2006 FIFA World Cup™, our share
continued to lack momentum after the event due to fears of
a slowdown of the North American sporting goods market.
Positive impulses from our well-received half year results at
the beginning of August only temporarily supported our share.
Starting at the end of August, however, our share price rallied
in anticipation of an upswing at Reebok ahead of the adidas
Group’s third quarter earnings announcement. Management
reported strong results of the adidas and TaylorMade-adidas
Golf segments but also announced additional investments into
the Reebok segment to accelerate the brand’s revitalization,
resulting in a reduction of the Group’s net income guidance
for 2007. As a consequence, the adidas share lost significantly
on the day of the announcement and underperformed there-
after to finish the year at € 37.73. Compared to the prior year,
our market capitalization decreased to € 7.7 billion at the end
of 2006 versus € 8.1 billion at the end of 2005.
Share Split and Name Change Effective in June
Since June 6, 2006, our shares have traded under the new
company name “adidas AG”, which was changed from
“adidas-Salomon AG” as a result of the divestiture of the
Salomon segment in the fourth quarter of 2005. On the same
day, a share split in a ratio of 1: 4 became effective (see
Note 22, p. 165). The split was conducted to enhance the
liquidity of our share especially among private investors and
had no dilutive effect as no new capital was raised.
Strong Sustainability Track Record Reflected in Index
Memberships
Rated as an industry leader in social and environmental
affairs as well as long-term economic parameters, adidas
AG was included in the Dow Jones Sustainability Indexes for
the seventh consecutive time. In addition, the Group’s mem-
bership in the FTSE4Good Europe was reconfirmed. Compa-
nies in this index are selected on the basis of their ongoing
commitment to environmental sustainability, strong financial
performance, a positive relationship with stakeholders and
dedication to upholding and supporting human rights. Fur-
thermore, adidas AG is included in the Ethibel Excellence
Index, which consists of 280 companies showing above-
average performance in terms of social and environmental
sustainability and meeting the ethical criteria established by
the independent organization Forum Ethibel.
adidas AG Historically Outperforms Benchmark Indices
The adidas Group is committed to continuously enhancing
shareholder value. The long-term development of our share
price reflects investor confidence and the growth potential
of our Group. Since our IPO in November 1995, our share
has gained 334%. It thereby clearly outperformed both the
DAX-30 and the MSCI Index, which increased 200% and 148%
respectively during the period.
Our Share ›
High and Low Share Prices per Month1)
45
40
35
30
Jan. 2006 Dec. 2006
30-day moving average
High and low share prices per month
1) Figures adjusted for 1: 4 share split conducted on June 6, 2006.
Historical Performance of the adidas AG Share and Important
Indices at Year-End 2006 in %
1 year 3 years 5 years since IPO
adidas AG (6) 67 79 334
DAX-30 22 66 28 200
MSCI World Textiles,
Apparel & Luxury
Goods 24 74 130 148
43.4741.25
38.4336.03
41.5236.34
39.8436.40
37.4935.14
38.5535.30
38.5634.66
39.2534.86
43.3836.92
41.8738.43
43.7840.81
44.0040.38