Reebok 2010 Annual Report Download - page 19

To Our Shareholders Interview with the CEO 15
Can you give us an update on your strategy for Other Businesses? Can you give us an update on your strategy for Other Businesses?
What kind of contribution do you expect from TaylorMade-adidas Golf, What kind of contribution do you expect from TaylorMade-adidas Golf,
Rockport and Reebok-CCM Hockey over the mid term?Rockport and Reebok-CCM Hockey over the mid term?
Taking everything we have discussed into account, how do you expect 2011 to shape Taking everything we have discussed into account, how do you expect 2011 to shape
up from a financial point of view?up from a financial point of view?
I see good growth potential and a lot of value in the Group’s Other Businesses. As we
announced at our Investor Day, we expect to reach € 1.8 billion in sales by 2015 from
€ 1.4 billion today. TaylorMade-adidas Golf as the largest segment will be the key driver.
Here, we will not only extend our market leadership in metalwoods, but intend to take further
market share in irons, golf balls and footwear. In 2011, TaylorMade is already painting the
game a new colour with the launch of the R11 driver. The striking white colour of the clubhead
is taking the industry by storm, with accolades from media, Tour pros and retailers. It’s a
great example of the initiatives coming out of TaylorMade-adidas Golf, and really epitomises
the energy and passion that we now have. In the same vein, at Rockport we have developed a
compelling strategy around walkability – creating a clear point of differentiation in the highly
fragmented brown shoe market. This will be highly visible in the coming months, with new
lightweight technologies in our DresSport collection just one example. And at Reebok-CCM
Hockey, we will continue to bring together two important Group principles in a powerful and
impactful way – innovation and validation by professional athletes.
As we begin our journey in 2011, I think it is fair to say that the company has never been in
a better financial situation and is very well equipped to exploit the opportunities and master
the challenges of the future, especially the rising input costs which we just spoke about.
The feedback for our products and campaigns that we received from our retail partners
gives us great confidence that we can continue to capture share in an improving consumer
environment. We forecast our Group sales to increase at a mid- to high-single-digit rate on
a currency-neutral basis and to reach new record highs in 2011. Group sales growth will
be driven by all segments and brands, as well as by expansion in all of our regions. We will
continue our commitment to our brands by investing in marketing and controlled space in
order to secure brand awareness amongst our consumers and premium distribution partners.
Nevertheless, operating expenses as a percentage of sales will decline. Therefore we project
the Group operating margin to increase to a level between 7.5% and 8.0%. As a result,
earnings per share will improve at a rate of 10% to 15% to a level between € 2.98 and € 3.12.
We have every advantage a company could possibly desire – strong brands, premium products,
superior marketing assets, tremendous global reach and distribution and a very healthy
balance sheet. I look forward to 2011 as the first year of our Route 2015 plan. In every sense,
we are fit for the future.
Herbert, thank you for this interview.Herbert, thank you for this interview.