Adidas 1999 Annual Report Download - page 27

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23
Management Discussion and Analysis
Asia showed strongest growth
Net sales grew by 54% in Asia, by 21% in North America
and by 18% in Europe. In Asia and in North America,
however, the strong currencies partly contributed to
these impressive figures, particularly in the fourth quar-
ter. Europe continues to be the most important market
for Salomon, accounting for 51% of net sales. 27% of
net sales are achieved in North America, 22% in Asia.
Gross profit grew faster than sales
The gross profit improved by 28% to DM 424 million.
The gross margin was again increased, by 0.6 percentage
points to 39.6%, primarily due to the improved margins
of the recently introduced product lines.
Operating profit at record level
The operating profit of the Salomon brand increased five
-
fold to DM 61 million, as operating expenses (up 13%)
increased at a lower rate compared to net sales and
gross profit. Keeping expense growth confined to this
rate is largely the result of the measures undertaken to
integrate the Salomon brand into the Group. adidas-
Salomon reported on these steps in detail in the Annual
Report for 1998. These measures, be it the integration
of sales organizations, the integration of sourcing activi-
ties, or the restructuring of Salomon from a separate
business into an integrated Group business, have all
now been implemented.
Sales and profitability
improvements expected for 200 0
It is currently anticipated that net sales of Salomon
brand products will continue to grow in the year 2000.
The gross margin is also expected to show further
improvement. It is expected that the operating profit for
the Salomon brand will continue to improve, despite
increased operating expenses relating to the building up
of the European sales organization as outlined in the
growth and efficiency program.
NET SALES, BY PRODUCTS
(%)
Hiking boots / Footwear 16
Alpine skis 23
Gear 3
Cross-country
ski equipment 7
In-line skates 8
Bindings 14
Snowboards 12
Ski boots 17
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