Reebok 2006 Annual Report Download - page 55

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051
Management Appraisal of 2006 Performance and
2007 Targets
We communicate our Group’s operational performance and
targets for the coming year externally on an annual basis and
provide updates as appropriate throughout the year to ensure
optimal transparency. In 2006, we achieved all key financial
targets within the focus of our Internal Management System.
We outperformed industry and economic growth in all regions,
increased our earnings at a double-digit rate, and made prog-
ress on debt reduction during the year (see Group Business
Performance, p. 72). For 2007 and beyond, we again strive to
optimize our Group’s free cash flow development. We believe
the current trading environment supports our expectations
given positive growth projections for our industry and the
global economy. Further, we believe our targets are realistic
within the scope of the current trading environment, and no
material event between the end of 2006 and the publication of
this report has altered our view (see Subsequent Events and
Outlook, p. 106).
2006 2006 2007
Target Actual Target
Sales growth (currency-neutral)
Including Reebok double-digit 53% mid-single-digit
Excluding Reebok high-single-digit + 14% —
Gross margin
Including Reebok 44 – 46% 44.6% 45 – 47%
Excluding Reebok 47 – 48% 47.8% —
Operating margin
Including Reebok approx. 9% 8.7% approx. 9%
Excluding Reebok 10 – 10.5% 10.5% —
Operating working capital Continue to optimize 25.8%
(in % of net sales) working capital management (2005: 26.0%) below 25%
Capital expenditures1) € 300 million – € 350 million2) € 277 million2) € 300 million – € 400 million
1) Excluding goodwill and financial leases.
2) Excluding extraordinary investments related to Reebok.
Targets versus Actual Key Metrics 2006/2007
adidas Group ›» Internal Group Management System