Reebok 2007 Annual Report Download - page 87
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083
ANNUAL REPORT 2007 --- adidas Group
03
GROSS MARGIN INCREASES BY 2.8 PERCENTAGE POINTS
The gross margin of the adidas Group increased by 2.8 per-
centage points to 47.4 % in 2007 (2006: 44.6 %). This develop-
ment exceeded Management’s initial expectation of a gross
margin between 45 and 47 %. The non-recurrence of negative
impacts from purchase price allocation in the Reebok seg-
ment, which in 2006 amounted to € 76 million, positively
impacted gross margin development. Cost synergies resulting
from the combination of adidas and Reebok sourcing activ-
ities as well as underlying improvements in all segments also
contributed to this development. As a result, gross profi t for
the adidas Group rose 9 % in 2007 to reach € 4.882 billion
versus € 4.495 billion in the prior year.
ROYALTY AND COMMISSION INCOME GROWS STRONGLY
Royalty and commission income for the adidas Group increased
20 % on a currency-neutral basis. Increased adidas and
TaylorMade-adidas Golf sales through external licensees
and
higher average
royalty rates at all brands were the main drivers
of this increase. The consolidation of the month of January in
the Reebok segment in 2007 also positively impacted this
develop ment. In euro terms, royalty and commission income
increased by 14 % to € 102 million in 2007 from € 90 million in
the prior year.
GROSS MARGIN
i
n
%
GROSS PROFIT
€
in milli
o
n
s
2003
2004 1)
2005 1)
2006 2)
2007
1) Figures refl ect continuing operations as a result of the divestiture of the Salomon
b
usiness se
g
ment
.
2
)
Includin
g
Reebok business se
g
ment from February 1, 2006 onwards
.
I
ncluding Greg Norman apparel business from February 1, 2006 to November 30, 2006
.
2003
2004 1)
2005 1)
2006 2)
2007
1) Fi
g
ures refl ect continuin
g
operations as a result of the divestiture of the Salomon
b
usiness se
g
ment
.
2
)
Including Reebok business segment from February 1, 2006 onwards
.
I
ncluding Greg Norman apparel business from February 1, 2006 to November 30, 2006
.
48.0
2,813
48.2
3,197
44.6
4,495
47.4
4,
882
44.9
2,814
GROSS PROFIT BY QUARTER 1)
€
in millions
Q1 2006
Q
1
2007
Q2 2006
Q
2 200
7
Q3 2006
Q
3 200
7
Q4 2006
Q
4
2007
1
) Including Reebok business segment from February 1, 2006 onwards.
Includin
g
Gre
g
Norman apparel business from February 1, 2006 to November
3
0, 2006
.
1,
42
9
1,327
1
,
138
1,084
1,
18
8
1,107
1,1
27
976