Adidas 2005 Annual Report Download - page 4

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2005 Targets
Deliver mid- to high-single-digit
currency-neutral sales growth
Bring major new concepts,
technology evolutions and
revolutions to market
Grow currency-neutral sales at
all brands and in all regions
Exceed medium-term gross
margin range of 45 to 46%
Achieve highest operating
margin ever
Continue to optimize working
capital management
Keep capital expenditure in range between
€ 200 million and € 250 million
Increase dividend and initiate
share buyback program
Drive earnings growth of 10 to 15% versus
the 2004 level of € 314 million
Further increase shareholder value
2005 Results
Currency-neutral sales grow 12%
2005 product launches:
adidas_1, Stella, a3®, Ground Control System™, ClimaCool®,
Clima Compression, +Predator® Absolute, ForMotion™,
David Beckham range, Offi cial Match Ball of the 2006
FIFA World Cup™ +Teamgeist™
Currency-neutral revenues increase
at all brands and in all regions
Group gross margin reaches a record level of 48.2%
Operating margin improves by 0.7 percentage
points to a record level of 10.7%
Operating working capital as a percentage
of net sales reduced by 2.4pp to 26.0%
Capital expenditure at € 211 million
Dividend increased by 30%, share buyback program post-
poned (free cash fl ow used to fund Reebok acquisition)
Group earnings grow 22% to € 383 million,
the highest earnings ever
adidas-Salomon AG share price grows 35%
2006 Targets
Deliver double-digit currency-neutral sales growth
(high-single-digit sales growth excluding Reebok)
Bring major new concepts,
technology evolutions and
revolutions to market
Grow currency-neutral sales at adidas and
TaylorMade-adidas Golf in all regions
Gross margin range 44–46%
(47–48% excluding Reebok)
Operating margin around 9%
(10–10.5% excluding Reebok)
Continue to optimize working
capital management
Capital expenditure range € 300–€ 350 million
(excluding extraordinary investments related to Reebok)
Reduce debt after fi nancing
of Reebok acquisition
Deliver double-digit net income
growth versus 2005 level of € 383 million
Further increase shareholder value