Reebok 2014 Annual Report Download - page 150

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2014
Subsequent Events and Outlook
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adidas Group
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2014 Annual Report
Group Management Report – Financial Review
Subsequent Events and Outlook
In 2015, despite a high degree of economic uncertainty in Russia/CIS and the Middle East,
we expect global economic growth to increase. This will be supported by a more favourable
labour market development as well as low financing and energy costs, which are forecasted
to positively impact consumer spending, providing a positive backdrop for the continued
growth and expansion of the sporting goods industry. Through the extensive pipeline of
new and innovative products at all brands and the positive effects from increased brand-
building activities, tight control of inventory levels and strict cost management, we project
top- and bottom-line improvements in our Group’s financial results in 2015. We forecast
adidas Group sales to increase at a mid-single-digit rate on a currency-neutral basis, with
growth expected at all brands. Given the recent strengthening of major currencies versus
the euro, most notably the US dollar and the Chinese renminbi, currency translation is
expected to have a positive impact on our top-line development in reported terms. Group
gross margin is expected to be significantly impacted by adverse currency movements
and is forecasted to be at a level between 47.5% and 48.5%. Group operating margin is
expected to be at a level between 6.5% and 7.0%. As a result, we project net income from
continuing operations to increase at a rate of 7% to 10%.
Subsequent Events
Divestiture of Rockport segment
On January 23, 2015, the adidas Group announced that it had entered into a definitive agreement
to sell its Rockport business for a total consideration of up to US $ 280 million, most of which will
be paid in cash with the remainder comprised of notes. With this divestiture, the Group aims to
better focus on core activities. The transaction, which is subject to customary closing conditions, is
expected to be completed later in 2015.
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. 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.
see Note 04, p. 207
see Note 11, p. 209
see Risk and Opportunity Report, p. 154