Reebok 2014 Annual Report Download - page 187

Group Management Report – Financial Review
183
2014
Management Assessment of Performance, Risks and Opportunities, and Outlook
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03.6
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adidas Group
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2014 Annual Report
the Group as a going concern. This assessment is also supported by the historical response to our
financing demands. The adidas Group therefore has not sought an official rating by any of the leading
rating agencies. We remain confident that the Group’s earnings strength forms a solid basis for our
future business development and provides the resources necessary to pursue the opportunities
available to the Group. Compared to the prior year, our assessment of certain risks has changed
in terms of likelihood of occurrence and/or potential financial impact. The partial changes in risk
evaluation have no substantial impact on the overall adidas Group risk profile, which we believe
remains virtually unchanged compared to the prior year.
Assessment of financial outlook
In November 2010, the Group unveiled its 2015 strategic business plan named ‘Route 2015’, which
defined strategies and objectives for the period up to 2015. In 2014, mainly due to the continued
weakness in the golf market, negative economic developments in Russia/CIS as well as ongoing
currency headwinds, the Group postponed the delivery of its top- and bottom-line Route 2015
targets. As a result, we have been undergoing a strategic review of priorities and our organisational
set-up throughout 2014 and early 2015. We will release details on our updated strategies at the end
of March 2015.
In 2015, we will see a specific emphasis on continuing to pursue growth opportunities, while also
focusing on driving improvements in the Group’s earnings. We will increase our investments in
brand-building activities and continue to focus on innovation platforms such as Boost, expanding
our digital activities as well as rolling out our new own-retail concepts globally.
Through our extensive pipeline of new and innovative products, which have received favourable
reviews from retailers, as well as through tight control of inventory levels and strict cost
management, we project top- and bottom-line improvements in our Group’s financial results
in 2015. The Group’s profitability is expected to benefit primarily from higher product margins
at TaylorMade-adidas Golf as well as a more favourable pricing and product mix at adidas and
Reebok. We believe that our outlook for 2015 is realistic within the scope of the current trading
and economic environment.
Assuming no significant deterioration in the global economy, we are confident to grow our top and
bottom line in 2015. However, the high degree of uncertainty regarding the economic outlook and
consumer sentiment in certain geographical areas, in particular Russia/CIS, as well as persisting
high levels of currency volatility, represent risks to the achievement of our stated financial goals
and aspirations. No other material event between the end of 2014 and the publication of this report
has altered our view.
see Treasury, p. 121
see Risk and Opportunity Report, p. 154
see Group Strategy, p. 46
see Global Brands Strategy, p. 53
see Global Sales Strategy, p. 49
see Subsequent Events and Outlook, p. 146
see Group Strategy, p. 46