Adidas 2001 Annual Report Download - page 50

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45
MD&A
Regional Growth in the US, Europe and Latin America
In 2001, net sales grew in three of the four Salomon
regions. In North America, sales were up 12% driven
by strong sales in inline skates and snowboard products,
up 55% and 14% respectively. In Europe, Salomon’s
largest market, sales increased 4% with ski boots
(+10% ), apparel (+144% ) and bike wheels (+23% )
leading the way. In Asia, Salomon sales declined 23%
as a result of poor winter business and the over-stocked
outdoor footwear market in Japan. Although Latin
America is a minor region for Salomon, sales grew
62% as a result of strong hiking and outdoor foot-
wear growth.
Gross Profit Improvement Outpaces Sales Growth
The gross profit was up 6% to €313 million. This is
the result of impressive gross margin gains at Salomon.
The margin came in at 43.8% , up 1.7 percentage points
from the previous year. These improvements came
as a result of higher margins on alpine products, an
improving product mix and increased production
efficiencies.
Increased Marketing Commitment
Reflected in Operating Profit
The operating profit for Salomon grew 3% to €63
million. Stepped-up sales and marketing initiatives,
which had been introduced as part of the Growth
and Efficiency Program, drove operating expenses
higher, notably in sales expenses related to the devel-
opment of the soft goods business. In contrast, the
opening of the new Annecy Design Center allowed
research and development as well as product design
resources to be stabilized. This state-of-the-art facility
in Annecy, France, promotes the product design and
development synergies between Salomon and Mavic.
Further Sales and Profitability Improvements
Expected for 2002
Net sales of Salomon brand products will continue to
increase in 2002, as the multi-brand apparel strategy
with products marketed under the brands Salomon and
Bonfire expands. Arc’Teryx, a leading supplier of tech-
nical outdoor apparel in North America, was purchased
by Salomon in January 2002 and its growing sales will
be consolidated in Salomon figures in 2002 for the first
time. Cliché, Salomon’s new skateboard brand, is also
expected to deliver strong sales growth. On the other
hand, the inline skate market and thus Salomon’s sales
in this category are expected to decline in 2002.
Operating profit will return to growth in 2002 as
production, design and back-office synergies within
Salomon become visible.
Salomon Net Sales by Region
Europe
North America
16%
1%
29%
54%
Asia
Latin America