Reebok 2009 Annual Report Download - page 22

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18 TO OUR SHAREHOLDERS Interview with the CEO
Interview with the CEOInterview with the CEO
In 2009, the sporting goods industry faced unprecedented challenges. However, the adidas Group rose to the occasion. Despite
a decline in sales and profitability, the Group generated record levels of cash from operations and significantly improved its
financial position. During the year, the Group also completed a major reorganisation, setting a strong foundation for sustainable
long-term growth. In the following interview, Herbert Hainer, adidas Group CEO, reflects on 2009 and discusses the strategic
and financial outlook as the Group shapes up to return to growth in 2010.
HERBERT HAINER
Without question, 2009 was the most difficult year since I became CEO of the Group.
We got off to a weak start as profitability declined substantially and inventories
and net borrowings were simply too high. However, we rose to the challenge and
moved swiftly to tackle these issues, driven in particular by a high focus on cash
generation. The results speak for themselves. Despite a 53% decline in operating
profit, we generated a 141% increase in net cash from operations for a record
€ 1.2 billion. This is definitely the outstanding achievement of the year and a credit
to all the hard work and dedication of our employees.
Balance sheet improvements were key to this success. Inventories were
reduced by an industry-leading 27% currency-neutral and are now at their lowest
levels since 2005. And our net debt level has fallen to € 917 million, representing
a financial leverage of 24.3%. This means we have already more than achieved
our medium-term goal of financial leverage below 50%. As a result, we go into
2010 in a much improved position and can fully focus our energy on returning our
business to growth.
QUESTION
Herbert, against a difficult economic
backdrop – what do you think was the
Group’s biggest achievement in 2009?