Reebok 2015 Annual Report Download - page 156

GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
Subsequent Events and Outlook
152
3
CURRENCY-NEUTRALCOMBINED SALES OF ADIDASAND REEBOK
EXPECTEDTO INCREASE IN MOST MARKETSEGMENTS
In 2016, we expect currency-neutral combined revenues of adidas and Reebok to increase in all our
market segments except Russia/CIS. In Western Europe, gradual macroeconomic improvements, the
UEFA EURO 2016 and the ongoing strong brand momentum at adidas and Reebok will positively impact
sales development in this region. As a result, we forecast currency-neutral combined sales of adidas and
Reebok in Western Europe to grow at a double-digit rate, with both brands contributing to the strong sales
increase. In North America, currency-neutral combined sales of adidas and Reebok are also projected
to grow at a double-digit rate. At the adidas brand, further improvements to our distribution network,
the introduction of highly innovative and fashionable products as well as engaging marketing initiatives
will strengthen our ties with consumers and customers alike and help us to accelerate growth in this
market. Currency-neutral Reebok sales are forecasted to return to growth in 2016, following the successful
streamlining of the brand’s factory outlet business in the prior year period. In Greater China, increasing
health awareness as well as growing sports participation are projected to provide positive stimulus to the
overall sales development. In addition, 2016 will see a further expansion of our distribution footprint in the
region. As a result, we expect the strong momentum to continue in 2016, with currency-neutral combined
sales of adidas and Reebok forecasted to continue to grow at a double-digit rate. In Russia/CIS, we expect
currency-neutral combined sales of adidas and Reebok to stabilise. Revenues of both brands are projected
to remain around the prior year level. Consumer confidence and consumer spending remain depressed
and will continue to weigh on the overall sales development in this region. In Latin America, despite the
challenging macroeconomic conditions in some of the region’s major economies, in particular Brazil, the
overall sales development is projected to be positively impacted by the strong positioning of the adidas and
Reebok brands as well as the Rio 2016 Olympic Games. As a result, we expect currency-neutral combined
sales of adidas and Reebok to increase at a mid- to high-single-digit rate, with both adidas and Reebok
contributing to this development. In Japan, the government’s stimulus programmes are expected to drive
improvements in consumer sentiment and private spending, thereby lifting the growth prospects in the
country. As we will leverage our market-leading position, currency-neutral combined sales of adidas and
Reebok are projected to grow at a high-single-digit rate, with both adidas and Reebok contributing to the
increase. Lastly, in MEAA, we expect currency-neutral combined sales of adidas and Reebok to grow at a
high-single-digit rate, driven by the ongoing robust brand momentum of both adidas and Reebok across
most of the region’s major markets, in particular South Korea and the United Arab Emirates.
CURRENCY-NEUTRAL SALES OF OTHER BUSINESSES
TO BE BELOW THE PRIOR YEAR LEVEL
In 2016, currency-neutral revenues of Other Businesses are expected to be below the prior year level, as
currency-neutral revenues at TaylorMade-adidas Golf are forecasted to decline in 2016. Ongoing structural
challenges in golf are expected to continue to weigh on the overall golf market, thus negatively impacting
TaylorMade-adidas Golf’s sales development. In addition, TaylorMade-adidas Golf will further execute on its
restructuring programme, initiated during the course of 2015, aiming at resizing its business going forward.
As part of this programme, the company will shift to longer product launch cycles, thereby reducing the
number of product launches while at the same time focusing on full-price sell-through. Currency-neutral
sales at Reebok-CCM Hockey are projected to grow at a mid-single-digit rate, supported by new product
introductions in key categories such as skates and sticks.
see TaylorMade-adidas Golf
Strategy, p. 69