Adidas 2002 Annual Report Download - page 67
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65
APPAREL SALES IMPROVE 3% /// Apparel sales increased
3% from € 2.2 billion in 2001 to € 2.3 billion in 2002. This
represents 35% of total Group sales. Apparel growth drivers
were the adidas Sport Performance football and basketball
categories, where sales grew 35% and 101% respectively.
This reflects the strength of the adidas 2002 FIFA World
Cup™ activities as well as an extended product range in the
basketball category. First-time inclusion of Sport Heritage
apparel for adidas and the Arc’Teryx brand within Salomon
also contributed positively.
ANOTHER YEAR OF DOUBLE-DIGIT GROWTH FOR HARD-
WARE SALES /// Hardware sales, which primarily come from
the TaylorMade and Salomon brands, again recorded the
strongest growth among product categories, up 11% to
€ 1.4 billion versus € 1.3 billion in the prior year. Growth in
this area came primarily from TaylorMade-adidas Golf as a
result of the strong introduction of the R500 Series drivers as
well as the first-time inclusion of Maxfli and Slazenger Golf
sales. In addition, adidas hardware – which comprises bags,
balls and protective equipment – grew strongly following the
outstanding consumer response to the 2002 FIFA World Cup™
hardware offering. These developments underscore adidas-
Salomon’s position as the number one global supplier of
sports hardware products, as measured by total net sales.
Hardware sales represent 21% of total Group sales.
LICENSEE REVENUES DECREASE /// Net licensee sales
decreased by 10% from € 642 million in 2001 to € 577 million
in 2002. This was mainly due to the expiration of an adidas
licensee agreement in Argentina. The resulting reduction
in licensee income, however, was offset by an increase in
consolidated net sales.
COST OF SALES GROWS SLOWER THAN SALES /// At
adidas-Salomon, the cost of sales is the amount we pay to
third parties or, in particular at Salomon and TaylorMade, for
material, labor and tooling costs as well as manufacturing
overheads. It also includes customs duties, freight and
other expenses (e.g. insurance, other taxes) associated with
delivering our products from our manufacturers or our
factories to our sales organizations. In 2002, cost of sales
was € 3.7 billion, up 5% from the € 3.5 billion level of 2001.
This increase was less than Group sales growth. adidas-
Salomon cost of sales per product was reduced in 2002, in
particular in terms of labor costs as well as manufacturing
and administrative overheads, reflecting the first tangible
benefits from our lean manufacturing programs.
adidas-Salomon FOOTWEAR NET SALES € in millions
1998 2,047
1999 2,222
2000 2,515
2001 2,650
2002 2,851
adidas-Salomon APPAREL NET SALES € in millions
1998 2,201
1999 2,190
2000 2,175
2001 2,212
2002 2,288
adidas-Salomon HARDWARE NET SALES € in millions
1998 817
1999 942
2000 1,144
2001 1,250
2002 1,385