Reebok 2009 Annual Report Download - page 119

GROUP MANAGEMENT REPORT – FINANCIAL REVIEW GROUP BUSINESS PERFORMANCE Income Statement 115
N °-
09
2009 NET SALES BY SEGMENT 1 )
12% Other Businesses
18% Retail
70% Wholesale
Income Statement
Changes in segmental reporting
following reorganisation initiatives
In the fourth quarter of 2009, the adidas
Group changed its organisational
structure to increase its responsive-
ness to consumer needs and to support
sustainable long-term growth see Group
Strategy, p. 52. As a consequence of the
subsequent changes in internal reporting
and in accordance with the new IFRS 8,
the adidas Group has now divided its
operating activities into six segments:
Wholesale, Retail, TaylorMade- adidas
Golf, Rockport, Reebok-CCM Hockey and
Other centrally managed brands. The
results of the adidas and Reebok brands
are now combined under Wholesale and
Retail. For clarity of presentation, the
financial results of TaylorMade- adidas
Golf, Rockport and Reebok-CCM Hockey
(the latter two were formerly part of
the Reebok segment) as well as Other
centrally managed brands (formerly
part of the adidas segment) are aggre-
gated under Other Businesses.
1) HQ/Consolidation accounts for less than 1% of sales.
1) Excluding HQ/Consolidation.
N °-
1 0
2009 NET SALES BY REGION 1 )
10% Latin America
16% Other Asian Markets
9% Greater China
23% North America
31% Western Europe
11% European
Emerging Markets
Following the elimination of regional
headquarters, the Group now distin-
guishes seventeen markets which are
aggregated into six geographies: Western
Europe, European Emerging Markets,
North America, Greater China, Other
Asian Markets and Latin America.
Changes in accounting policy
The Group’s consolidated financial
statements are prepared in accordance
with International Financial Reporting
Standards (IFRS as adopted by the EU).
In 2009, there were relevant changes in
IFRS which were reflected in the Group’s
consolidation and accounting principles
see Note 1, p. 170. However, the impact
on the Group’s consolidated financial
statements from any such changes was
not material in the reporting period.
Consolidation of new businesses
impacts results of Wholesale and
Other Businesses segments
The consolidation of new companies
in Latin America and of Ashworth, Inc.
in 2008 impacted the comparability of
adidas Group results in the Wholesale
and TaylorMade- adidas Golf segments
in the reporting period.
Effective April 1, 2008, the adidas Group
acquired 99.99% of the shares of Reebok
Productos Esportivos Brazil Ltda. (for-
merly Comercial Vulcabras Ltda.), the
distribution company for Reebok prod-
ucts in Brazil and Paraguay. Effective
June 2, 2008, the Group also founded a
new company in Argentina for the distri-
bution of Reebok products, in which the
adidas Group holds 99.99% of the shares.
Ashworth Inc., a leader in cotton casual
golf apparel, has been consolidated
within the adidas Group since November
20, 2008.
adidas Group currency-neutral sales
decrease 6% in 2009
In 2009, Group revenues decreased 6%
on a currency-neutral basis, as a result
of lower Wholesale and Other Businesses
sales, which more than offset an increase
in Retail revenues. This development was
in line with initial Management expecta-
tions of a low- to mid-single-digit Group
sales decline. Currency translation
effects positively impacted sales in euro
terms. Group revenues declined 4% to
€ 10.381 billion in 2009 from € 10.799 bil-
lion in 2008.