Reebok 2007 Annual Report Download - page 20

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ANNUAL REPORT 2007 --- adidas Group TO OUR SHAREHOLDERS - Interview with the CEO
THE E
CO
N
O
MI
C
C
LIMATE IN N
O
RTH AMERI
C
A HA
S
DETERI
O
RATED IN RE
C
ENT M
O
NTH
S
. H
O
W D
O
Y
OU
S
EE THE ADIDA
S
G
R
OU
P
N
AVI
G
ATIN
G
THR
OUG
H THE
S
E
C
HALLEN
G
E
S
IN
2008?
Yes, economic conditions in North America have become more diffi cult. Nonetheless, I am optimistic we will outperform
most of our competitors during this period of relative economic weakness. We are a regionally diversifi ed Group, which is
one of our most signifi cant strengths. We have been diligent in managing the adidas brand in the USA over the past few
years – which has brought adidas four years of consecutive growth in the world’s largest sporting goods market. Today,
we have a much broader distribution base and a signifi cantly improved performance product and partnership portfolio in the
region. Therefore, I am confi dent that the adidas brand will again grow in North America in 2008 – although it is likely to be
at lower levels than in recent years. At Reebok, there are still a lot of challenges – and tough market conditions don’t make
it any easier. But I am confi dent the brand has the right initiatives in place to position itself for growth in this market in 2009.
HO
W D
O
Y
OU
RATE THE PERF
O
RMAN
C
E
O
F TAYL
O
RMADE-ADIDA
S
GO
LF IN
200
7 AND WHAT PRI
O
RITIE
S
HAVE Y
OU
S
ET F
O
R
THI
S
B
US
INE
SS
GO
IN
G
F
O
RWARD
?
TaylorMade-adidas Golf strives to be the best performance golf business in the world. And nothing highlights this more than
our performance in metalwoods last year. Despite fi erce competition and technological hype in golf’s most prestigious category,
TaylorMade extended its market share lead over its closest competitor to more than ten points. And adidas Golf sales
of footwear and apparel grew at double-digit rates for the fi fth consecutive year. Segment like-for-like sales, excluding the
effects of the Greg Norman Collection wholesale business divestiture, grew 9 % on a currency-neutral basis, driven by
increases in all major categories. For 2008, increasing profi tability is our top priority. We believe there is no reason why
TaylorMade-adidas Golf shouldn’t be delivering a double-digit operating margin in the very near future. We sold Maxfl i
because we now have all the know-how we need to be successful in the premium golf ball category. We are focused on
growing our core golf brands: TaylorMade and adidas Golf.
AFTER A
SO
LID
200
7
,
WHAT
C
AN WE EXPE
C
T FR
O
M THE
G
R
O
UP IN TERM
S
O
F FINAN
C
IAL PERF
O
RMAN
C
E IN
2008?
We have worked hard to position ourselves for continued growth in 2008. I am confi dent our progress will accelerate versus
last year and we will reach new heights on both the top and bottom line. We expect high-single-digit currency-neutral sales
growth – driven by improvements at all of our brands. Gross margin will range between 47.5 % and 48 %. And our operating
margin will expand to at least 9.5 %. Through this strong operational performance, we will increase net income by at least
15 %.
“I am optimistic we will outperform most of our competi-
tors during this period of relative economic weakness.”
“In 2008, we will reach new heights on both the top
and bottom line.”