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GROUP MANAGEMENT REPORT – FINANCIAL REVIEW GROUP BUSINESS PERFORMANCE Income Statement 119
N
°-
24
N
°-
26
N
°-
25
EBITDA
€ IN MILLIONS
OPERATING PROFIT
€ IN MILLIONS
OPERATING MARGIN
IN %
2005 1 )
2006 2 )
2007
2008
2009
2005 1 )
2006 2 )
2007
2008
2009
2005 1 )
2006 2 )
2007
2008
2009
806
1,078
1,165
1,280
780
707
881
949
1,070
508
10.7
8.7
9.2
9.9
4.9
1) Reflects continuing operations as a result of the divestiture of the Salomon
business segment.
2) Including Reebok, Rockport and Reebok-CCM Hockey from February 1, 2006
onwards.
1) Reflects continuing operations as a result of the divestiture of the Salomon
business segment.
2) Including Reebok, Rockport and Reebok-CCM Hockey from February 1, 2006
onwards.
1) Reflects continuing operations as a result of the divestiture of the Salomon
business segment.
2) Including Reebok, Rockport and Reebok-CCM Hockey from February 1, 2006
onwards.
N
°-
23
OTHER OPERATING EXPENSES BY AREA
€ IN MILLIONS
2009 2008
Total 4,390 4,378
Sales force ..........................................................1,296
Marketing overhead ..............................................348
Marketing working budget .................................1,028
Sales working budget ...........................................241
565
376
1,132
297
1,179
81
748
Logistics ................................................................582
Finance & administration .....................................809
Research & development ........................................86
N
°-
27
OPERATING PROFIT BY QUARTER
€ IN MILLIONS
Q1 2008
Q1 2009
Q2 2008
Q2 2009
Q3 2008
Q3 2009
Q4 2008
Q4 2009
282
58
208
72
473
336
107
42
Marketing working budget decreases
as a percentage of sales
Marketing working budget consists of
items such as expenses for promotion
partnerships, advertising and public rela-
tions to support brand strength. As mar-
keting working budget expenses are not
distribution channel specific, they are not
allocated to the segments. The Group’s
marketing working budget as a percent-
age of sales decreased 0.6 percentage
points to 9.9% in 2009 (2008: 10.5%), pri-
marily as a result of the non-recurrence
of major sporting events in the prior year
see 22. In absolute terms, market-
ing working budget decreased 9% to
€ 1.028 billion in 2009 from € 1.132 bil-
lion in 2008 see 23.
Operating overhead expenses increase
Group operating overheads include over-
head costs related to marketing, sales,
logistics, research and development as
well as finance and administration func-
tions. Almost half of overhead expenses
are related to personnel costs. Operat-
ing overhead expenses as a percentage
of sales increased 2.8 percentage points
to 30.1% in 2009 from 27.3% in the prior
year. This was primarily a result of the
expansion of the Group’s own-retail
activities in emerging markets. In abso-
lute terms, operating overhead expenses
increased 6% to € 3.121 billion in 2009
versus € 2.949 billion in 2008.