Reebok 2010 Annual Report Download - page 178

174 Group Management Report – Financial Review Subsequent Events and Outlook
Subsequent Events and Outlook
In 2011, most major economies are projected to expand, with the sporting goods industry and the adidas Group expected to
benefit from increasing consumer confidence and spending. Based on our innovative strength, extensive pipeline of new and
fresh products as well as marketing initiatives, we expect top- and bottom-line improvements in our Group’s financial results in
2011. We forecast adidas Group sales to increase at a mid- to high-single-digit rate on a currency-neutral basis due to growth in
the Wholesale and Retail segments as well as in Other Businesses. Group gross margin is expected to be in a range between
47.5% and 48.0%. Pressures from higher input costs will weigh on otherwise positive effects anticipated from our regional
and product mix. Operating margin is forecasted to improve to a level between 7.5% and 8.0%, driven by lower other operating
expenses as a percentage of sales. As a result, we project earnings per share to grow at a rate between 10% and 15% to a
level between € 2.98 and € 3.12.
Subsequent Events
No subsequent events
Since the end of 2010, there have been
no significant organisation, management,
economic, socio-political, legal or
financial changes which we expect to
influence our business materially going
forward.
Outlook
Forward-looking statements
This Management Report contains
forward-looking statements that reflect
Management’s current view with
respect to the future development of
the adidas Group. The outlook is based
on estimates that we have made on the
basis of all the information available
to us at this point in time. In addition,
such forward-looking statements are
subject to risks and uncertainties as
described in the Risk and Opportunity
Report, which are beyond the control of
the adidas Group see Risk and Opportunity
Report, p. 158. In case the underlying
assumptions turn out to be incorrect
or described risks materialise, actual
results and developments may materially
deviate from those expressed by such
statements. The adidas Group does not
assume any obligation to update any
forward-looking statements made in this
Management Report beyond statutory
disclosure obligations.
Global economic recovery to support
Group growth in 2011
The speed of economic recovery in
2010 has led to a higher degree of
confidence amongst economic analysis
bodies and research institutes for 2011.
According to the World Bank, growth of
the global economy in 2011 is expected
to be at around 3.3%. Forecasters
in general predict strong growth in
emerging markets and a continuation
of the modest recovery in advanced
economies. Nonetheless, structural
issues such as high levels of sovereign
debt and high unemployment in many
developed economies pose risks to
global economic growth. In addition, the
potential overheating of some emerging
economies with rising asset prices and
significant inflationary pressures are
a concern, despite monetary policies
and quantitative measures being
implemented to rein in these excesses.
On the positive side, regardless of
anticipated inflation, economists predict
that consumer spending will pick up
globally in 2011.
Therefore, we believe the economic
environment will be supportive to our
growth aspirations in 2011. The growth
of the economy, however, is likely to
continue to drive commodity prices
higher, which we predict will further add
to input cost pressures in the second half
of 2011 and beyond.