Reebok 2014 Annual Report Download - page 184

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2014
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03.5
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adidas Group
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2014 Annual Report
Group Management Report – Financial Review
Risk and Opportunity Report
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Financial Opportunities
Personnel opportunities
The recruitment of highly qualified talent as well as the training and development of our employees,
in particular for our own-retail segment, may help us to increase productivity, efficiency and
employee engagement and generate better than expected top- and bottom-line results. For
example, a reduction of the attrition rates in our own-retail stores could increase conversion rates
as well as store productivity and also lead to lower expenses for recruiting activities. In addition,
successfully establishing a performance culture as well as developing key talents across the Group
may contribute positively to sales and profitability improvements.
Macroeconomic, socio-political and regulatory opportunities
Since we are a consumer goods company, consumer confidence and spending can impact our
sales development. Therefore, better than initially forecasted macroeconomic developments, which
support increased private consumption, can have a positive impact on our sales and profitability.
Low unemployment rates, rising real incomes as well as a growing middle class with increasing
spending power are fuelling consumption, particularly in emerging economies – and, subsequently,
our industry. In addition, legislative and regulatory changes, e.g. the elimination of trade barriers,
can potentially open up new channels of distribution and positively impact Group profitability.
Acquisition opportunities
Although the Group’s focus is on organic growth initiatives, we consider acquisitions of smaller,
fast-growing or innovative companies as an opportunity to generate additional sales and profits.
Furthermore, acquisition opportunities may arise as a result of challenging macroeconomic
and competitive conditions that could lead to financial distress of companies which, while not as
financially healthy as industry leaders, possess certain assets that could help the adidas Group
further improve its business performance.
Financial Opportunities
Favourable financial market changes
Favourable exchange and interest rate developments can potentially have a positive impact on the
Group’s financial results. Our Group Treasury department closely monitors the financial markets to
identify and exploit opportunities. Translation effects from the conversion of non-euro-denominated
results into our Group’s functional currency, the euro, might positively impact our Group’s financial
performance.
see Treasury, p. 121