Reebok 2009 Annual Report Download - page 157

External and Industry
Opportunities
Favourable macroeconomic and
fiscal policy changes
Since we are a consumer goods com-
pany, consumer confidence and spend-
ing can impact our sales development.
Therefore, better than initially forecasted
macroeconomic developments and fiscal
policy changes which support increased
discretionary private consumption can
have a positive impact on our sales
and profitability. In addition, legislative
changes, e.g. with regard to the taxation
of corporate profits, can positively impact
Group profitability.
Growing importance of sports
to fight obesity
Governments are increasingly promoting
living an active lifestyle to fight obesity
and cardiovascular disease. According to
the World Health Organization, around
400 million people were considered
obese in 2005. A further 1.6 billion more
were estimated to be overweight. These
numbers are projected to increase to
700 million and 2.3 billion respectively
by 2015. Once considered a problem
only in affluent nations, obesity is also
becoming an issue in countries with
low per capita income. This develop-
ment has serious health consequences
and a dramatic effect on health care
expenditures. As a result, governments
and non- governmental organisations
are increasing their efforts to promote
a healthy lifestyle and encourage sports
participation. Given our strong market
position, in particular in categories
considered suitable for weight loss such
as training, running and swimming, we
expect to benefit from this trend.
Ongoing fusion of sport and lifestyle
The border between pure athletics
and lifestyle continues to blur as sport
becomes a more integral part in the lives
of more and more consumers. People
want to be fashionable when engaging in
sporting activities without compromis-
ing on quality or the latest technological
advances. At the same time, performance
features and styles are finding their way
into products meant for more leisure-
oriented use. We estimate the global
sports lifestyle market to be at least
three times larger than the performance
market. This development opens up addi-
tional opportunities for our Group and
our brands – which already enjoy strong
positions in this market.
Emerging markets as long-term
growth drivers
According to estimates by the United
Nations, the global population is pro-
jected to grow from currently 6.8 billion
to 7 billion by the end of 2012 and is
estimated to surpass 9 billion by 2050.
A large portion of this growth is being
driven by emerging economies. Rising
employment rates and real incomes
and a growing middle class are fuelling
these economies – and subsequently our
industry. Sports participation in most
of these countries has historically been
lower than in industrialised countries.
We expect sports participation rates
to increase over time with increasing
leisure time, investment in infrastructure
and the broadening of awareness of the
benefits of physical activity. In addition,
European and North American sporting
goods brands are often seen as easily
accessible, affordable luxury goods
which presents an additional growth
opportunity.
Women’s segment offers
long-term potential
In our opinion, the women’s sports
market is one of the most attractive
segments in the sporting goods industry
with women accounting for more than
a third of total spending on athletic
footwear. Our Group still generates the
majority of its revenues in men’s and
unisex categories. The adidas Group
will continue to invest in developing
women-specific product offerings in
both performance and lifestyle that
emphasise female individuality,
authenticity and style. Examples today
include adidas by Stella McCartney,
EasyTone™ footwear at Reebok, and the
Women’s Burner® 09 at TaylorMade.
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CORPORATE OPPORTUNITY OVERVIEW
External and industry opportunities
Favourable macroeconomic and fiscal policy changes
Growing importance of sports to fight obesity
Ongoing fusion of sport and lifestyle
Emerging markets as long-term growth drivers
Women’s segment offering long-term potential
Increasing consumer demand for functional apparel
Growing popularity of “green” products
Strategic and operational opportunities
Strong market positions worldwide
Multi-brand approach
Personalisation and customisation replacing mass wear
Exploiting potential of new and fast-growing sports categories
Breaking new ground in distribution
Cost optimisation drives profitability improvements
Financial opportunities
Favourable financial market changes
GROUP MANAGEMENT REPORT – FINANCIAL REVIEW Risk and Opportunity Report 153