Reebok 2014 Annual Report Download - page 52

adidas Group
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2014 Annual Report
Group Management Report – Our Group
48
2014
Group Strategy
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02.1
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Focusing on sustainability
Like any global business, the adidas Group must manage wide-ranging commercial and competitive
pressure to deliver increased financial returns and growth. At the same time, we are accountable
for our employees and have a high degree of responsibility towards the workers in our suppliers’
factories and also for the environment. We are committed to striking the balance between
shareholder interests and the needs and concerns of employees and workers, as well as the
environment. We report publicly on the steps we take to have a more positive impact on society and
the planet on our website.
Creating long-term shareholder value
Creating long-term value for our shareholders through strong and consistent operating cash flow
generation drives our overall decision-making process. Therefore, we are focused on rigorously
managing those factors under our control, making strategic choices that will drive sustainable
revenue and earnings growth, and ultimately operating cash flow. Across our operations, we pursue
in particular the avenues for growth which we expect to be most value-enhancing, with particular
emphasis on improving brand strength and Group profitability. In addition, rigorously managing
working capital and optimising our capital structure remain key priorities for us. Furthermore,
we are committed to increasing returns to shareholders with above-industry-average share price
performance and dividends.
adidas Group new strategic goals to be announced in 2015
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. Since its introduction, the plan has
resulted in significant improvements in many of our business areas. We have, for example, already
over-achieved our target of increasing the share of revenues from controlled space activities to
more than 45% by 2015. In addition, we have multiplied our eCommerce business over the last
couple of years and are well on track to achieving the targeted sales level of € 500 million through
this channel by 2015. We have also successfully expanded our fast fashion adidas NEO label,
increasing revenues for this sub-brand to over € 800 million in 2014 and building valuable expertise
in a vertical business model. Additionally, we have significantly reduced complexity on a Group level
by streamlining the global product range, consolidating our warehouse base as well as harmonising
above-market service. Furthermore, our Global Operations function has been very successful in
establishing in-season product creation capabilities and in significantly reducing lead times for
both footwear and apparel. These achievements have set new standards with regard to productivity,
efficiency and flexibility within our supply chain.
In 2014, however, 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, the Group has been undergoing a
thorough review of its strategic priorities and organisational set-up throughout 2014 and early 2015.
In a first step, to strengthen brand leadership as well as drive faster decision-making and more
effective and efficient consumer-focused strategies and execution in the marketplace, Management
initiated a reorganisation of the Global Brands and Global Sales structures. The Group will release
the full details on its updated strategies at the end of March 2015.
see Sustainability, p. 89
www.adidas-group.com
see Internal Group Management System, p. 98
see Our Share, p. 38
see Glossary, p. 258