Reebok 2008 Annual Report Download - page 109

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adidas Group Annual Report 2008 105
TaylorMade-adidas Golf at a glance
€ in millions
2008 2007 Change
Net sales 812 804 1%
Gross profi t 359 360 (0%)
Gross margin 44.3% 44.7% (0.5pp)
Operating profi t 78 65 20%
Operating margin 9.6% 8.1% 1.5pp
TaylorMade-adidas Golf net sales by quarter
€ in millions
Q1 2007
Q1 2008
180
191
Q2 2007
Q2 2008
239
226
Q3 2007
Q3 2008
190
197
Q4 2007
Q4 2008
195
198
2008 TaylorMade-adidas Golf net sales by product
1) Includes irons, putters, golf balls, golf bags, gloves and other accessories.
Metalwoods 38%
Other
hardware 1) 33%
Footwear 9%
Apparel 20%
TaylorMade-adidas Golf Business
Performance
In 2008, sales growth in the TaylorMade-adidas
Golf segment exceeded Management’s initial
expectations. Profi tability developed in line with
expectations. TaylorMade-adidas Golf revenues
increased 7% on a currency-neutral basis. In
euro terms, segment sales increased 1% to
€ 812 million in 2008 from € 804 million in
2007. The segment’s gross margin decreased
0.5 percentage points to 44.3% (2007: 44.7%).
This was mainly a result of lower margins in
metalwoods. Gross profi t remained almost
stable at € 359 million (2007: € 360 million).
The segment’s operating margin increased
1.5 percentage points to 9.6% (2007: 8.1%). This
was due to lower net other operating expenses
and income as a percentage of sales which
more than offset the decrease in gross margin.
As a result, operating profi t increased 20% to
€ 78 million from € 65 million in 2007.
Maxfl i divestiture impacts reported results
Compared to the prior year, fi nancial results of the TaylorMade-
adidas Golf segment in 2008 do not include the results of the
Maxfl i business. This refl ects the divestiture of the Maxfl i brand
on February 11, 2008. Maxfl i was divested to improve the focus
of the segment’s golf ball business under the TaylorMade
brand. The operating profi t of the TaylorMade- adidas Golf
segment was positively impacted by a one-time book gain of
€ 5 million.
Acquisition of Ashworth has no signifi cant impact
on sales in 2008
In November 2008, the TaylorMade-adidas Golf segment
acquired Ashworth, Inc., a leader in cotton casual golf apparel.
The Ashworth consolidation did not have a signifi cant impact
on the segment’s sales. This transaction positively impacted
the operating profi t of the TaylorMade-adidas Golf segment
due to a one-time book gain of € 21 million. However, this
was partially offset by restructuring costs and other one-time
expenses of € 7 million.
Currency-neutral sales increase 7%
In 2008, currency-neutral sales at TaylorMade-adidas Golf
increased 7%. This development exceeded Management’s
initial expectations of mid-single-digit growth. Double-digit
growth in adidas Golf and categories such as golf balls and
putters more than offset a decline in metalwoods. Currency
translation effects negatively impacted segment revenues
in euro terms. Segment sales in euro terms increased 1% to
€ 812 million in 2008 from € 804 million in 2007.