Reebok 2009 Annual Report Download - page 136

132 GROUP MANAGEMENT REPORT – FINANCIAL REVIEW BUSINESS PERFORMANCE BY SEGMENT Wholesale Business Performance
Wholesale Business Performance
The Wholesale segment comprises the adidas and Reebok business activities with retailers. In 2009, currency-neutral sales in
the Wholesale segment decreased 9%. In euro terms, Wholesale sales declined 8% to € 7.174 billion from € 7.758 billion in the
prior year. Gross margin decreased 2.1 percentage points to 41.6% (2008: 43.7%). This was mainly a result of higher input costs
and a highly promotional retail environment. Gross profit decreased 12% to € 2.981 billion in 2009 from € 3.387 billion in 2008.
Segmental operating costs as a percentage of sales decreased 0.1 percentage points to 8.9% (2008: 9.0%). As a result of the
gross margin decline, which could not be offset by lower operating costs as a percentage of sales, segmental operating margin
decreased 2.0 percentage points to 32.7% in 2009 versus 34.7% in the prior year. In absolute terms, segmental operating profit
declined 13% to € 2.346 billion in 2009 versus € 2.692 billion in 2008.
Currency-neutral segmental
sales decline 9%
In 2009, revenues for the Wholesale seg-
ment declined 9% on a currency-neutral
basis. adidas Sport Performance and
Reebok sales declined compared to the
prior year while revenues at adidas Sport
Style increased. Currency translation
effects positively impacted segment rev-
enues in euro terms. Sales in the Whole-
sale segment declined 8% to € 7.174 bil-
lion in 2009 from € 7.758 billion in 2008.
Currency-neutral Wholesale sales
decline in nearly all regions
Currency-neutral sales for the Wholesale
segment decreased in all regions except
Latin America in 2009. Currency-neutral
revenues in Western Europe declined 8%
due to decreases in most major markets.
Revenues in European Emerging Markets
decreased 13% on a currency-neutral
basis, primarily due to lower sales in
Russia as a result of the devaluation of
the Russian rouble against its func-
tional currency, the US dollar, which
could not be offset by price increases.
Currency- neutral Wholesale sales in
North America declined 16% due to
declines in both the USA and Canada.
Revenues in Greater China decreased
20% on a currency- neutral basis. Sales
in Other Asian Markets declined 5% on a
currency- neutral basis due to declines in
Japan which more than offset increases
in other markets. In Latin America,
currency-neutral sales grew 16%, sup-
ported by double-digit increases in all
major markets and the effects resulting
from consolidation of new companies in
the region in the prior year.
Currency translation effects had a mixed
impact on regional sales in euro terms.
Sales in Western Europe declined 10% in
2009 to € 2.643 billion (2008: € 2.936 bil-
lion). In European Emerging Markets,
sales decreased 13% to € 475 million
from € 543 million in 2008. Revenues
in North America declined 11% to
€ 1.295 billion in 2009 versus € 1.461 bil-
lion in the prior year. In Greater China,
revenues decreased 14% to € 855 mil-
lion in 2009 (2008: € 999 million). Sales
in Other Asian Markets increased 1% to
€ 1.041 billion in 2009 from € 1.029 bil-
lion in 2008, while revenues in Latin
America improved 10% to € 865 million in
2009 (2008: € 790 million).
N °-
01
WHOLESALE AT A GLANCE
€ IN MILLIONS
2009 2008 Change
Net sales 7,174 7,758 (8%)
Gross profit 2,981 3,387 (12%)
Gross margin 41.6% 43.7% (2.1pp)
Segmental operating profit 2,346 2,692 (13%)
Segmental operating margin 32.7% 34.7% (2.0pp)
N °-
02
WHOLESALE NET SALES BY QUARTER
€ IN MILLIONS
Q1 2008
Q1 2009
Q2 2008
Q2 2009
Q3 2008
Q3 2009
Q4 2008
Q4 2009
1,968
1,876
1,755
1,608
2,241
2,040
1,794
1,650