Reebok 2014 Annual Report Download - page 156

152
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
Capital expenditure of around € 600 million
In 2015, capital expenditure is expected to increase to a level of around € 600 million (2014:
€ 554 million). Investments will mainly focus on adidas and Reebok controlled space initiatives in
emerging markets as well as in Western Europe and North America. These investments will account
for the majority of total capital expenditure in 2015. Other areas of investment include the Group’s
logistics infrastructure as well as the further development of the adidas Group headquarters in
Herzogenaurach. All investments within the adidas Group in 2015 are expected to be fully financed
through cash generated from operating activities.
Excess cash to be used to support growth initiatives
In 2015, we expect continued positive cash flow from operating activities. Cash will be used to
finance working capital needs, investment activities, dividend payments as well as the Group’s
share buyback programme. We intend to largely use excess cash to invest in our growth activities, in
particular the further expansion and improvement of our controlled space initiatives. In 2015, gross
borrowings of € 288 million will mature. In order to ensure long-term flexibility, we aim to maintain
a ratio of net borrowings over EBITDA of less than two times as measured at year-end (2014: 0.1).
Efficient liquidity management in place for 2015 and beyond
Efficient liquidity management remains a priority for the adidas Group in 2015. We focus on
continuously anticipating the operating cash flows of our Group segments, as this represents the
main source of liquidity within the Group. Liquidity is planned on a rolling monthly basis under a
multi-year financial and liquidity plan. Long-term liquidity is ensured by continued positive operating
cash flows and sufficient financial flexibility through unused credit facilities.
Management to propose dividend of € 1.50
The adidas AG Executive and Supervisory Boards intend to again recommend paying a dividend of
€ 1.50 to shareholders at the Annual General Meeting (AGM) on May 7, 2015 (2013: € 1.50). This
reflects their confidence in the strength of the Group’s financial position and long-term aspirations.
Subject to shareholder approval, the dividend will be paid on May 8, 2015. Based on the number of
shares outstanding at the end of 2014, the total payout of € 306 million (2013: € 314 million) reflects
a payout ratio of 53.9% of net income attributable to shareholders, excluding goodwill impairment
losses, versus 37.4% in the prior year. While this is above the Group’s dividend payout corridor of
between 20% and 40% of net income attributable to shareholders, it reflects our commitment to a
consistent, shareholder-oriented dividend policy.
see Treasury, p. 121