Reebok 2015 Annual Report Download - page 178

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GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
Risk and Opportunity Report – Illustration of Opportunities
Opportunities related to organisational and process improvements
Process optimisation: Continued optimisation of key business processes and strict cost control are vital
to achieving high profitability and return on invested capital. We are confident that there is still significant
opportunity to improve process efficiency and effectiveness and further streamline cost structures
throughout our Group. For example, more consistent, effective and efficient in-store execution could lead
to an increase in conversion and full-price sell-through. As a result, we may achieve higher-than-expected
top- and bottom-line growth. Furthermore, constant improvements in logistics processes (e.g. procurement
of logistics services) or real estate and facility management could result in additional cost savings and
increase the Group’s profitability.
Partnerships: The adidas Group is constantly evolving its partnership network within sport and culture,
such as with academic organisations and companies from other industries in research and development.
These partnerships have generated multiple new growth avenues for the Group, as we have acquired
product or process know-how and gained access to new distribution channels or markets. Partnerships,
strategic alliances and collaborations may enable the adidas Group to pursue further growth and efficiency
opportunities.
Personnel opportunities
The recruitment of highly qualified talent as well as the training and development of our employees,
in particular for our own-retail segment, may help us increase productivity, efficiency and employee
engagement and generate better-than-expected top- and bottom-line results. In addition, successfully
developing talents across the Group may increase employee engagement and performance and thus
contribute positively to sales and profitability improvements.
Macroeconomic, sociopolitical and regulatory opportunities
Since we are a consumer goods company, consumer confidence and spending can impact our sales
development. Therefore, better than initially forecasted macroeconomic developments, which support
increased private consumption, can have a positive impact on our sales and profitability. In addition,
legislative and regulatory changes, e.g. the elimination of trade barriers, can potentially open up new
channels of distribution or create cost savings and as a result positively impact Group profitability.
FINANCIALOPPORTUNITIES
Favourable financial market changes
Favourable exchange and interest rate developments can potentially have a positive impact on the Group’s
financial results. Our Group Treasury department closely monitors the financial markets to identify and
exploit opportunities. Translation effects from the conversion of non-euro-denominated results into our
Group’s functional currency, the euro, might positively impact our Group’s financial performance.
see Glossary, p. 260
see Treasury, p. 124