Adidas 1998 Annual Report Download - page 22

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20 Management Discussion and Analysis
1998 1998 1997
vvDM DM
Year end price 93.30 182.00 230.00
High 168.30 329.00 268.00
Low 77.20 151.00 131.60
Net income** 4.52 8.84 10.21
Dividend 0.84* 1.65* 1.65
Cash flow*** 2.64 5.17 1.72
Number of shares
outstanding (m) 45.35 45.35
*** Dividend proposal
***before special effect in 1998
***Net cash provided from operating
activities
(in B/DM, except for number of shares)
KEY PER SHARE DATA FINANCIAL INFORMATION ON THE INTERNET Financial information
and information on the adidas-Salomon share is now available on the internet. Investors
can find the current share price, charts showing share price development and detailed
financial information at <www.adidas.de>. The current adidas-Salomon annual report
and the quarterly reports will be published on the internet. This will ensure that individual
investors and others interested in investing in adidas-Salomon have access to key infor-
mation at the same time as financial analysts and institutional investors.
PROPOSED DIVIDEND PAYMENT OF DM 75 MILLION The adidas-
Salomon
Executive Board will propose to the Annual General Meeting of Shareholders a
dividend for
1998 of DM 1.65 per share, maintaining last year’s level. This represents a
total payout of DM 75 million.
The proposal is based on the assumption that many of the factors that have influenced
the 1998 results were of a one-off character and that this, in anticipation of better results
in 1999, justifies continuity in the Company’s dividend policy.
The proposal represents an increase in the total payout ratio from 16% in 1997 to 19%
of consolidated net income before the special effect in 1998. With this proposal the Exec-
utive Board has made almost maximum use of the scope defined by previously formulated
Company policy to maintain a payout ratio of between 15% and 20%.
As in the previous year the Company’s tax situation does not permit any tax credit for
German domestic shareholders with unlimited tax liability.
OUTLOOK
MARKET CONDITIONS FOR THE GROUP’S PRODUCTS DETERIORATED IN 1998, AND THE GLOBAL
SPORTING GOODS MARKET IS EXPECTED TO REMAIN FLAT IN 1999. DESPITE THESE MARKET DEVELOP-
MENTS, adidas-Salomon AIMS TO INCREASE EARNINGS BY IMPROVING MARGINS AND ACHIEVING
BETTER COST CONTROL. POSITIVE CONTRIBUTIONS ARE ALSO EXPECTED TO BE FORTHCOMING FROM
THE INTEGRATION OF THE SALOMON GROUP.
Market conditions for the group’s products deteriorated in 1998 and prospects for an
improvement in the overall market in 1999 have been dampened. According to indepen-
dent forecasts, the global sporting goods market in 1999 is expected to remain flat and in
certain segments even to contract.
These forecasts are based on various factors. For the sporting goods industry as a
whole, although not necessarily for each individual company, anticipated development of
gross domestic product and consumption in the private sector is regarded as a key