Reebok 2014 Annual Report Download - page 152

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2014
Subsequent Events and Outlook
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03.4
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adidas Group
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2014 Annual Report
Group Management Report – Financial Review
Sporting goods industry expansion to continue in 2015
In the absence of any major economic shocks, we expect the global sporting goods industry to grow
at a low- to mid-single-digit rate in 2015, in spite of the non-recurrence of major sporting events that
took place in 2014, such as the FIFA World Cup in Brazil and the Winter Olympic Games in Russia.
Consumer spending on sporting goods in the emerging economies is expected to grow faster than
in the more developed markets. Many sporting goods retailers will continue to move to a more
omni-channel business model, and e-commerce and investment in digital will remain growth areas.
In Western Europe, the expected growth of consumer confidence and real wages should positively
impact domestic demand in the sporting goods industry, in contrast to the European emerging
markets, where the projected decline in real wages from lower oil prices and the geopolitical
tensions in Russia and Ukraine provide additional potential risk of depressing sentiment and
economic activity, which might negatively impact private consumption and growth in the sporting
goods industry.
In the USA, industry growth rates are expected to be ahead of the economy’s overall growth.
E-commerce channels are forecasted to remain strong, particularly via mobile. The trend towards
high-performance technical footwear and apparel looks set to continue. Retro silhouettes are
projected to remain strong across a variety of categories, including basketball and tennis. The US
golf market is expected to face continuing structural challenges.
In Greater China, strong wage growth and domestic consumption are predicted to propel sporting
goods sales in 2015. The trend and market share shift towards international brands is expected
to continue. In Japan, the government’s stimulus programmes are forecasted to drive modest
improvements in consumer sentiment and spending, despite subdued real wages. Most of the other
Asian markets, especially India, are projected to see robust sporting goods sales growth in 2015.
In Latin America, after a year of healthy growth owing to the importance of football in this region
and the sales momentum gained from the 2014 FIFA World Cup in Brazil, headwinds from high
inflation, unfavourable labour market conditions and adverse currency fluctuations are expected to
have negative implications for household consumption in the region’s largest economies, e.g. Brazil
and Argentina, also slowing down growth in the sporting goods industry.
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adidas Group 2015 outlook 1)
Currency-neutral sales development (in %): mid-single-digit rate increase
Gross margin 47.5% to 48.5%
Operating margin 6.5% to 7.0%
Net income from continuing operations increase at a rate of 7% to 10%
Average operating working capital in % of sales moderate decline
Capital expenditure around € 600 million
Store base net decrease by around 70 stores
Gross borrowings moderate decline
1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business.