Reebok 2014 Annual Report Download - page 125

Group Management Report – Financial Review
121
2014
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03.2
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adidas Group
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2014 Annual Report
Group Business Performance
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Treasury
Off-balance sheet items
The Group’s most significant off-balance sheet items are commitments for promotion and advertising
as well as operating leases, which are related to own-retail stores, offices, warehouses and
equipment. The Group has entered into various operating leases as opposed to property acquisitions
in order to reduce exposure to property value fluctuations. Minimum future lease payments for
operating leases were € 1.711 billion at December 31, 2014, compared to € 1.669 billion at the
end of December 2013, representing an increase of 3%. At the end of December 2014, financial
commitments for promotion and advertising increased 37% to € 5.193 billion in 2014 (2013:
€ 3.791 billion), mainly as a result of the long-term promotion contract concluded with Manchester
United F.C.
Treasury
Group financing policy
In order to be able to meet the Group’s payment commitments at all times, the major goal of our
financing policy is to ensure sufficient liquidity reserves, while at the same time minimising the
Group’s financial expenses. The operating activities of our Group segments and markets and the
resulting cash inflows represent the Group’s main source of liquidity. Liquidity is planned on a rolling
monthly basis under a multi-year financial and liquidity plan. This comprises all consolidated Group
companies. Our in-house bank concept takes advantage of any surplus funds of individual Group
companies to cover the financial requirements of others, thus reducing external financing needs
and optimising our net interest expenses. By settling intercompany transactions via intercompany
financial accounts, we are able to reduce external bank account transactions and thus bank charges.
Effective management of our currency exposure and interest rate risks are additional goals and
responsibilities of our Group Treasury department.
Treasury system and responsibilities
Our Group’s Treasury Policy governs all treasury-related issues, including banking policy and
approval of bank relationships, financing arrangements and liquidity/asset management,
currency and interest risk management as well as the management of intercompany cash flows.
Responsibilities are arranged in a three-tiered approach:
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The Treasury Committee consists of members of the Executive Board and other senior executives
who decide on the Group’s Treasury Policy and provide strategic guidance for managing treasury-
related topics. Major changes to our Treasury Policy are subject to the prior approval of the
Treasury Committee.
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The Group Treasury department is responsible for specific centralised treasury transactions and
for the global implementation of our Group’s Treasury Policy.
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On a subsidiary level, where applicable and economically reasonable, local managing directors
and financial controllers are responsible for managing treasury matters in their respective
subsidiaries. Controlling functions on a Group level ensure that the transactions of the individual
business units are in compliance with the Group’s Treasury Policy.
see Note 28, p. 226
see Note 38, p. 243