Reebok 2012 Annual Report Download - page 179

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adidas Group
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2012 Annual Report
Group Management Report – Financial Review
157
2012
Subsequent Events and Outlook
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03.4
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Subsequent Events and Outlook
In 2013, despite a high degree of economic uncertainty, we expect the global economy and consumer
spending to increase, providing a positive backdrop for the continued growth and expansion of the
sporting goods industry. Through an extensive pipeline of new and innovative products at all brands,
tight control of inventories throughout 2012, and a more benign input cost environment, we project
top- and bottom-line improvements in our Group’s financial results in 2013. We forecast adidas Group
sales to increase at a mid-single-digit rate on a currency-neutral basis, with growth expected in all
segments. Group gross margin is forecasted to increase to a level between 48.0% and 48.5%, primarily
as a result of positive regional and channel mix effects, as well as improvements in the Retail segment
and at the Reebok brand. Group operating margin is forecasted to increase to a level approaching 9.0%,
driven by the increase in gross margin as well as lower other operating expenses as a percentage of
sales. As a result, we project earnings per share to grow to a level between € 4.25 and € 4.40.
Subsequent Events
No subsequent events
Since the end of 2012, 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 uncertainties as described in the Risk and Opportunity Report, which
are beyond the control of the adidas Group
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SEE RISK AND OPPORTUNITY
REPORT, P. 164. In case the underlying assumptions turn out to be incorrect
or described risks or opportunities materialise, actual results and
developments may materially deviate (negatively or positively) 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 economy to grow in 2013
While policy actions have lowered the effects from the sovereign debt
crisis in the euro area and the USA, the development of the global
economy remains subject to a high degree of uncertainty in 2013.
According to the World Bank, global GDP is projected to increase 2.4%
in 2013 (2012: 2.3%). Developed markets are expected to expand by
just 1.3%, with the euro area likely to remain in recession and Japan’s
economic growth expected to be modest. Conversely, the majority of the
world’s economic growth will continue to be derived from the emerging
markets, which are forecasted to grow by 5.5%. Furthermore, in many
of these developing economies, this growth is projected to continue to
support rapid wage increases and disposable income. These positive
economic growth expectations and the outlook for consumer spending,
particularly in the emerging markets, are forecasted to be supportive of
our growth aspirations in 2013.
In Western Europe, GDP is projected to remain almost unchanged,
increasing by around 0.1% in 2013, with the euro area contracting by
0.2%. Deleveraging, tight credit levels, austerity measures and rising
unemployment remain as major headwinds to the region’s economic
recovery. Nevertheless, stabilising demand from Asia is expected to
support export activity, particularly for Germany, the region’s largest
economy, where domestic demand and GDP are forecasted to remain
positive. Despite lower demand for exports to the euro area, European
emerging markets are estimated to grow at around 2.7% in 2013, with
major economies such as Russia, Turkey and Poland, in particular,
expected to benefit from robust domestic consumption.