Reebok 2012 Annual Report Download - page 176

adidas Group
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2012 Annual Report
Group Management Report – Financial Review
154
2012
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03.3
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Business Performance by Segment
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Other Businesses Performance
Factory outlet revenues include sales from adidas and Reebok factory
outlets. In 2012, factory outlet revenues grew 9% on a currency-neutral
basis. Sales increased at a double-digit rate at adidas. Reebok sales grew
at a high-single-digit rate. Comparable factory outlet sales increased 7%
on a currency-neutral basis. In 2012, the Group opened 52 and closed
57 factory outlets. In addition, one concept store was reclassified as a
factory outlet. As a result, the number of factory outlets decreased by 4 to
730 at the end of 2012 (December 31, 2011: 734)
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DIAGRAM 15. Currency
translation effects had a positive impact on sales in euro terms. Factory
outlet sales increased 16% to € 1.528 billion from € 1.321 billion in 2011.
Concession corner revenues include adidas and Reebok concession
corners. In 2012, sales from concession corners increased 7% on a
currency-neutral basis. Sales grew at a high-single-digit rate at adidas
while Reebok sales were up at a low-single-digit rate. Currency-neutral
comparable sales from concession corners grew 6%. In 2012, the Group
opened 21 concession corners and closed 94. In addition, 57 concept
stores were reclassified as concession corners. As a result, the number
of concession corners decreased by 16 to 279 at the end of 2012
(December 31, 2011: 295), of which 182 were related to the adidas brand
and 97 to the Reebok brand
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DIAGRAM 15. Currency translation effects
had a positive impact on sales in euro terms. Concession corner sales
increased 13% to € 115 million (2011: € 101 million).
eCommerce revenues include e-commerce operations of the adidas and
Reebok brands. In 2012, sales from adidas and Reebok e-commerce
platforms were up 68% on a currency-neutral basis compared to 2011.
Sales increased at strong double-digit rates at both adidas and Reebok.
Currency translation effects had a positive impact on sales in euro terms.
eCommerce revenues grew 78% to € 158 million from € 89 million in
2011.
Other Businesses Performance
Other Businesses full year results
In 2012, revenues of Other Businesses grew 17% on a currency-neutral
basis, mainly driven by strong double-digit sales growth at TaylorMade-
adidas Golf as well as at Other Centrally Managed Brands. Sales at
Rockport and Reebok-CCM Hockey also increased. Currency translation
effects positively impacted revenues in euro terms. Sales of Other
Businesses grew 25% to € 1.977 billion (2011: € 1.580 billion)
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TABLE 16.
Gross margin decreased 0.8 percentage points to 42.8% (2011: 43.5%),
driven by lower product margins at Reebok-CCM Hockey, where
increased sourcing costs as well as the NHL lockout negatively impacted
gross margin development. Other Businesses gross profit was up 23% to
€ 845 million versus € 688 million in 2011
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TABLE 16.
Segmental operating expenses as a percentage of sales decreased
1.1 percentage points to 15.4% (2011: 16.5%). Segmental operating
expenses in Other Businesses primarily relate to expenditure for sales
force and administration as well as sales working budget expenses
for TaylorMade-adidas Golf, Rockport, Reebok-CCM Hockey and
Other Centrally Managed Brands. In euro terms, segmental operating
expenses rose 17% to € 304 million from € 261 million in 2011. This
was driven in particular by higher expenditure for sales force and
administration at TaylorMade-adidas Golf and Rockport.
Other Businesses segmental operating profit increased 27% to
€ 541 million in 2012 versus € 427 million in the prior year. Segmental
operating margin was up 0.4 percentage points to 27.4% from 27.0%
in 2011
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TABLE 16. This was the result of lower segmental operating
expenses as a percentage of sales, which more than offset the negative
effects from a lower gross margin.
15
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Retail number of stores
2012 2011
Concept stores 1,437 1,355
Factory outlets 730 734
Concession
corners 279 295
Total 2,446 2,384
■ 2012 ■ 2011
16
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Other Businesses at a glance (€ in millions)
2012 2011 Change
Net sales 1,977 1,580 25%
Gross profit 845 688 23%
Gross margin 42.8% 43.5% (0.8pp)
Segmental operating profit 541 427 27%
Segmental operating margin 27.4% 27.0% 0.4pp