Reebok 2015 Annual Report Download - page 146

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142
3
GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
Business Performance by Segment – Russia/CIS
RUSSIA/CIS
RUSSIA/CIS REVENUES DECLINE
In 2015, sales in Russia/CIS decreased 11% on a currency-neutral basis, mainly due to sales declines at
adidas. Currency translation effects negatively impacted revenues in euro terms. Revenues in Russia/CIS
declined 33% to € 739 million from € 1.098 billion in 2014.
adidas revenues decreased 13% on a currency-neutral basis in Russia/CIS in 2015. This development was
due to sales declines in most categories. Currency translation effects had a negative impact on revenues
in euro terms. adidas sales in Russia/CIS declined 35% to € 570 million (2014: € 872 million).
Reebok revenues in Russia/CIS decreased 1% on a currency-neutral basis in 2015. Sales growth in the
training and studio categories was more than offset by sales declines in the walking category. Currency
translation effects had a negative impact on revenues in euro terms. Reebok sales in Russia/CIS were
down 25% to € 170 million from € 226 million in the prior year.
OPERATING EXPENSES IN RUSSIA/CIS REDUCED BY 30%
Gross margin in Russia/CIS decreased 2.6 percentage points to 56.0% in 2015 from 58.6% in 2014. The
positive impact from a significantly more favourable pricing mix was more than offset by negative currency
effects as well as higher input costs. Gross profit in Russia/CIS decreased 36% to € 414 million versus
€ 644 million in 2014.
Operating expenses were down 30% to € 329 million versus € 471 million in 2014. This was due to
significantly lower sales expenditure, reflecting the reduction in the number of stores. Operating expenses
as a percentage of sales increased 1.6 percentage points to 44.6% (2014: 42.9%).
Operating margin decreased 4.3 percentage points to 11.4% (2014: 15.7%), due to the gross margin decline
as well as the negative effect of higher operating expenses as a percentage of sales. Operating profit in
Russia/CIS decreased 51% to € 85 million versus € 173 million in the prior year.
see Table 05
see Table 05
see Table 05
05RUSSIA/CISATAGLANCE€ IN MILLIONS
2015 2014 Change Change
(currency-neutral)
Net sales 1739 1,098 (33%) (11%)
adidas 570 872 (35%) (13%)
Reebok 170 226 (25%) (1%)
Gross profit 414 644 (36%) –
Gross margin 56.0% 58.6% (2.6pp) –
Segmental operating profit 85 173 (51%) –
Segmental operating margin 11.4% 15.7% (4.3pp) –
1 Rounding differences may arise in totals.