Reebok 2008 Annual Report Download - page 42

038 To Our Shareholders Our Share
The adidas AG share
Number of shares outstanding
2008 average 1) 197,562,346
At year-end 2008 2) 193,515,512
Type of share No-par-value share
Free fl oat 100%
Initial Public Offering November 17, 1995
Share split June 6, 2006 (in a ratio of 1: 4)
Stock exchange All German stock exchanges
Stock registration number (ISIN) DE0005003404
Stock symbol ADS, ADSG.DE
Important indices DAX-30
MSCI World Textiles,
Apparel & Luxury Goods
Deutsche Börse Prime Consumer
Dow Jones STOXX
Dow Jones EURO STOXX
Dow Jones Sustainability
FTSE4Good Europe
Ethibel Index Excellence Global
Ethibel Index Excellence Europe
ASPI Eurozone Index
1) After deduction of treasury shares.
2) All shares carry full dividend rights.
adidas AG market capitalisation at year-end
€ in millions
2004 5,446
2005 8,122
2006 7,679
2007 10,438
2008 5,252
Our Share
In 2008, the development of international
stock markets and the adidas AG share was
profoundly impacted by the crisis in the fi nan-
cial sector and the spillover effects on the
global economy. Signifi cant losses in the fi nan-
cial industry, recessionary fears, infl ationary
pressure, record oil prices and rapid currency
movements contributed to highly volatile fi nan-
cial markets during the year. In tandem with the
negative trends on international stock markets,
the adidas AG share declined 47% in 2008.
Given the strong 2008 operational performance
and Management’s confi dence in the strength
of the Group’s fi nancial position and long-term
strategy, we intend to propose an unchanged
dividend per share at our 2009 Annual General
Meeting.
adidas AG share price development mirrors weak
international stock markets
After having signifi cantly outperformed the DAX-30 and the
MSCI World Textiles, Apparel & Luxury Goods Index in 2007,
the adidas AG share could not sustain this positive momen-
tum and declined in tandem with international stock markets
in 2008. The adidas AG share price decreased by 47% over the
course of the year. Our share underperformed the DAX-30 as
well as the MSCI World Textiles, Apparel & Luxury Goods Index
which decreased 40% and 42%, respectively. All major interna-
tional stock indices including the DAX-30 and the MSCI World
Textiles, Apparel & Luxury Goods Index declined at the begin-
ning of the year as several US banks incurred signifi cant write-
offs related to the subprime crisis. During the second
quarter,
high infl ation rates in Europe and a deteriorating macro-
economic outlook in the USA, led by low consumer confi dence
levels, heightened recessionary concerns and kept international
stock markets subdued.
In the third quarter, record high oil prices of US $ 147 a barrel,
weakening business confi dence indicators and increasing
government intervention in the fi nancial sector resulted in a
sharp downturn across all global indices. Whilst remaining
volatile and still suffering from uncertainty among investors
and analysts, markets recovered slightly from November lows,
as coordinated interest rate cuts and further governmental
stimulus packages provided some positive impetus.
Solid operational performance unable to offset macro trends
After reaching an all-time high at the end of December 2007,
the adidas AG share price declined at the beginning of the
year. Turbulence on international stock markets related to
the crisis in the fi nancial sector and fears the USA might slip
into recession burdened our share price development. The
initiation of adidas AG’s share buyback programme as well as
the announcement of the Group’s full year 2007 results were
positively received. However, concerns around the Reebok
business outlook and the state of the North American sport-
ing goods markets negatively impacted the adidas AG share
price afterwards. Strong fi rst quarter fi nancial results, which
exceeded market expectations and included strong perfor-
mances by the adidas and TaylorMade- adidas Golf segments,
led to a signifi cant share price increase in May. However, the
adidas AG share price declined in line with strong decreases in
footwear, luxury and retail sectors throughout the remainder
of the second and the beginning of the third quarter as investor
sentiment worsened in light of macroeconomic concerns.
Our quarterly earnings release in early August was well
received by investors and analysts due to the increased full
year guidance for our gross and operating margins. However,
the share price further declined in the subsequent months,
due to the steep downward trend on international stock
markets. At the beginning of November, our nine months
results publication led to a slight share price increase. Never-
theless, the adidas AG share closed 2008 at € 27.14, declining
47% over the course of the year. As a result of this develop-
ment, our market capitalisation decreased to € 5.3 billion at
the end of 2008 versus € 10.4 billion at the end of 2007.