Reebok 2015 Annual Report Download - page 145

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GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
Business Performance by Segment – Greater China
GREATER CHINA
REVENUES IN GREATER CHINAGROW 18%
In 2015, sales in Greater China increased 18% on a currency-neutral basis, as a result of double-digit sales
growth at both adidas and Reebok. Currency translation effects positively impacted revenues in euro terms.
Sales in Greater China grew 38% to € 2.469 billion from € 1.786 billion in 2014.
adidas revenues in Greater China grew 17% on a currency-neutral basis in 2015. The increase was mainly
due to double-digit sales growth in the training and running categories as well as at adidas Originals and
adidas neo. Currency translation effects had a positive impact on revenues in euro terms. adidas sales in
Greater China increased 37% to € 2.411 billion (2014: € 1.759 billion).
Reebok revenues in Greater China increased 83% on a currency-neutral basis in 2015, driven by significant
sales increases in the walking category and in Classics, where revenues more than doubled, as well as
strong double-digit sales growth in running. Currency translation effects had a positive impact on revenues
in euro terms. Reebok sales in Greater China more than doubled to € 58 million from € 27 million in the
prior year.
GREATER CHINAOPERATING MARGIN INCREASESTO 35.1%
Gross margin in Greater China increased 0.1 percentage points to 57.1% in 2015 (2014: 57.1%). This
development was driven by a more favourable pricing, channel and product mix, partly offset by higher input
costs as well as negative currency effects. Gross profit in Greater China increased 38% to € 1.411 billion
versus € 1.019 billion in 2014.
Operating expenses were up 36% to € 545 million versus € 402 million in 2014. This was due to an increase
in expenditure for point-of-sale and marketing investments as well as higher sales expenditure. Operating
expenses as a percentage of sales decreased 0.4 percentage points to 22.1% (2014: 22.5%).
Operating margin increased 0.5 percentage points to 35.1% (2014: 34.6%), as a result of the gross margin
increase as well as the positive effect of lower operating expenses as a percentage of sales. Operating
profit in Greater China increased 40% to € 866 million versus € 617 million in the prior year.
see Table 04
see Table 04
see Table 04
04GREATER CHINA ATAGLANCE€ IN MILLIONS
2015 2014 Change Change
(currency-neutral)
Net sales 12,469 1,786 38% 18%
adidas 2,411 1,759 37% 17%
Reebok 58 27 115% 83%
Gross profit 1,411 1,019 38% –
Gross margin 57.1% 57.1% 0.1pp –
Segmental operating profit 866 617 40% –
Segmental operating margin 35.1% 34.6% 0.5pp –
1 Rounding differences may arise in totals.