Reebok 2015 Annual Report Download - page 147

143
3
GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
Business Performance by Segment – Latin America
LATIN AMERICA
DOUBLE-DIGITSALES GROWTH ATADIDASAND REEBOK IN LATIN AMERICA
In 2015, sales in Latin America increased 12% on a currency-neutral basis, as a result of double-digit
sales growth at both adidas and Reebok. From a market perspective, the top-line development was driven
by double-digit sales growth in Argentina, Mexico, Chile, Peru and Colombia. Currency translation effects
negatively impacted revenues in euro terms. Sales in Latin America grew 11% to € 1.783 billion from
€ 1.612 billion in 2014.
adidas revenues grew 11% on a currency-neutral basis in Latin America in 2015. This increase was
supported by double-digit sales increases in the training, basketball and outdoor categories as well as
at adidas Originals and adidas neo. In addition, mid-single-digit sales growth in the running category
contributed to this development. Currency translation effects had a negative impact on revenues in euro
terms. adidas sales in Latin America increased 9% to € 1.516 billion (2014: € 1.389 billion).
Reebok revenues in Latin America increased 16% on a currency-neutral basis in 2015, driven by double-
digit sales growth in the running, training and walking categories. In addition, mid-single-digit sales growth
in Classics also contributed to this development. Currency translation effects had a positive impact on
revenues in euro terms. Reebok sales in Latin America were up 19% to € 266 million from € 223 million
in the prior year.
PROFITABILITY IN LATIN AMERICA INCREASES SIGNIFICANTLY
Gross margin in Latin America increased 2.2 percentage points to 42.4% in 2015 from 40.2% in 2014. This
development was driven by a more favourable pricing and channel mix, partly offset by negative currency
effects as well as higher input costs. Gross profit in Latin America increased 17% to € 756 million versus
€ 648 million in 2014.
Operating expenses were up 16% to € 521 million versus € 450 million in 2014. This was primarily due to
higher sales expenditure as well as an increase in expenditure for point-of-sale and marketing investments.
Operating expenses as a percentage of sales increased 1.3 percentage points to 29.2% (2014: 27.9%).
Operating margin increased 0.8 percentage points to 13.2% (2014: 12.3%), due to the increase in gross
margin, partly offset by the negative effect of higher operating expenses as a percentage of sales. Operating
profit in Latin America increased 18% to € 235 million versus € 199 million in the prior year.
see Table 06
see Table 06
see Table 06
06LATIN AMERICA ATAGLANCE€ IN MILLIONS
2015 2014 Change Change
(currency-neutral)
Net sales 11,783 1,612 11% 12%
adidas 1,516 1,389 9% 11%
Reebok 266 223 19% 16%
Gross profit 756 648 17% –
Gross margin 42.4% 40.2% 2.2pp –
Segmental operating profit 235 199 18% –
Segmental operating margin 13.2% 12.3% 0.8pp –
1 Rounding differences may arise in totals.