Reebok 2006 Annual Report Download - page 82

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› Group Business PerformanceGroup Management Report ›
078 ANNUAL REPORT 2006 › adidas Group ›
Operating Expenses as a Percentage of Sales Decrease
Group operating expenses, including depreciation and amor-
tization (excluding goodwill), are influenced by two compo-
nents: marketing working budget and operating overhead
costs. Operating expenses as a percentage of sales declined
1.5 percentage points to 36.7% in 2006 from the 2005 level
of 38.2%. This decrease mainly reflects Reebok’s lower than
Group average operating expense level despite negative
effects from purchase price allocation. In absolute terms,
operating expenses increased by 46% to € 3.704 billion in 2006
from € 2.537 billion in 2005. For the adidas Group excluding
Reebok, operating expenses as a percentage of sales were
38.0% in 2006, which is 0.2 percentage points lower than the
2005 level of 38.2%. Continued efficiency improvements in
operating overhead costs more than offset higher marketing
expenses related to the 2006 FIFA World Cup™. In absolute
terms, operating expenses for the adidas Group exclud-
ing Reebok increased by 13% to € 2.872 billion in 2006 from
€ 2.537 billion in 2005.
Operating Expenses € in millions
2002
2003
20041)
20051)
20062)
2,343
2,324
2,236
2,537
3,704
1) Figures reflect continuing operations as a result of the divestiture of the Salomon
business segment.
2) Including Reebok business segment from February 1, 2006 onwards, excluding
Greg Norman wholesale business from December 1, 2006 onwards.
Operating Expenses in % of net sales
2002
2003
20041)
20051)
20062)
35.9
37.1
38.2
38.2
36.7
1) Figures reflect continuing operations as a result of the divestiture of the Salomon
business segment.
2) Including Reebok business segment from February 1, 2006 onwards, excluding
Greg Norman wholesale business from December 1, 2006 onwards.
Operating Expenses € in millions
20061) 20052)
Total 3,704 2,537
1) Including Reebok business segment from February 1, 2006 onwards, excluding
Greg Norman wholesale business from December 1, 2006 onwards.
2) Figures reflect continuing operations as a result of the divestiture of the Salomon
business segment.
3) Includes personnel and administration expenses.
Marketing working budget
Marketing overhead 3)
Sales force 3)
Logistics 3)
Research & development 3)
Central finance & administration
Other result
1,301
291
904
491
98
619
0
942
207
534
347
63
439
5
Marketing Working Budget in % of net sales
2002
2003
20041)
20051)
20062)
12.6
12.9
14.2
14.2
12.9
1) Figures reflect continuing operations as a result of the divestiture of the Salomon
business segment.
2) Including Reebok business segment from February 1, 2006 onwards, excluding
Greg Norman wholesale business from December 1, 2006 onwards.