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221 Mm 221 Annual Report Annual Adidas Group Adidas 2013 Page 3-ADI13 3785 DE EN Umschlag Rz.Indd 221 Mm 200 Mm 221 mm Annual Report adidas Group 2013 adidas Group Annual Report 2013 version: 27. February 2014, 7:17 PM 1st corr 2nd corr 3nd corr page 3 - ADI13_3785_DE_EN_Umschlag_rz.indd 221 mm 200 mm TARGETS – RESULTS – OUTLOOK Targets 2013 Results 2013 1) Outlook 2014 Currency-neutral sales development: Currency-neutral sales development: Currency-neutral sales development: adidas Group adidas Group adidas Group increase at a increase of Group sales of increase at a mid-single-digit rate 3% € 14.492 billion high-single-digit rate Wholesale segment Wholesale segment Wholesale segment increase at a low-single-digit rate stable versus prior year increase at a mid-single-digit rate Retail segment Retail segment Retail segment increase at a high-single- to low-double-digit increase of 8% increase at a high-single- to low-double-digit rate rate Other Businesses Other Businesses Other Businesses increase at a mid- to high-single-digit rate increase of 5% increase at a low- to mid-single-digit rate TaylorMade-adidas Golf TaylorMade-adidas Golf TaylorMade-adidas Golf increase at a mid-single-digit rate increase of 3% increase at a low- to mid-single-digit rate Rockport Rockport Rockport increase at a mid- to high-single-digit rate increase of 6% increase at a mid- to high-single-digit rate Reebok-CCM Hockey Reebok-CCM Hockey Reebok-CCM Hockey increase at a low-double-digit rate increase of 11% increase at a mid-single-digit rate Gross margin Gross margin Gross margin 48.0% – 48.5% 49.3% 49.5% – 49.8% Operating margin Operating margin Operating margin increase to a level approaching 9.0% 8.7% 8.5% – 9.0% Average operating working capital Average operating working capital Average operating working capital (in % of sales) (in % of sales) increases to (in % of sales) moderate increase expected 20.9% moderate decline expected Capital expenditure Capital expenditure Capital expenditure € 500 million – € 550 million € 479 million € 500 million – € 550 million Gross borrowings Gross borrowings Gross borrowings further reduction € 1.334 billion further reduction Net borrowings/EBITDA ratio Net borrowings/EBITDA ratio Net borrowings/EBITDA ratio to be maintained below 2 – 0.2 to be maintained below 2 Net income attributable to shareholders Earnings per share Net income attributable Net income attributable to shareholders increase at a rate of 12% to 16% to a level between increase 6% to to shareholders increases 6% to € 890 million – € 920 million € 4.01 € 839 million € 830 million – € 930 million Shareholder value adidas AG share Dividend per share Shareholder value price increases further increase 38% € 1.50 2) further increase 1) Excluding goodwill impairment of € 52 million. 2) Subject to Annual General Meeting approval. version: 27. February 2014, 7:17 PM 1st corr 2nd corr 3nd corr page 4 - ADI13_3785_DE_EN_Umschlag_rz.indd adidas Group Annual Report 2013 We are at home on all the stages of this world: on the field of play, in the stadium, on the track, in the gym, on the golf course, on the catwalk and on the street. For us, sport is so much more than a game. We live and love sport, and we continuously strive to reach the next level. We love achievement and success: of our people, our athletes and our products. We are driven by our ambition and our passion for what we do. Always one step ahead – always giving our best. True to our heritage and our values. We are the adidas Group. And everything we do, we do for the love of sport. version: 27. February 2014, 6:29 PM 1st corr 2nd corr 3nd corr page 1 - ADI13_3785_DE_EN_Image_rz.indd FINANCIAL HIGHLIGHTS 2013 01 / Financial Highlights (IFRS) 2013 2012 Change Operating Highlights (€ in millions) Net sales 14,492 14,883 (2.6%) EBITDA 1,523 1,445 5.4% Operating profit 1) 2) 1,254 1,185 5.8% Net income attributable to shareholders 1) 2) 839 791 6.0% Key Ratios (%) Gross margin 49.3% 47.7% 1.5pp Operating expenses in % of net sales 42.3% 41.3% 1.0pp Operating margin 1) 2) 8.7% 8.0% 0.7pp Effective tax rate 1) 2) 29.0% 29.3% (0.3pp) Net income attributable to shareholders in % of net sales 1) 2) 5.8% 5.3% 0.5pp Average operating working capital in % of net sales 20.9% 20.0% 0.9pp Equity ratio 47.3% 45.5% 1.8pp Net borrowings/EBITDA (0.2) (0.3) Financial leverage (5.4%) (8.5%) 3.1pp Return on equity 14.3% 9.9% 4.4pp Balance Sheet and Cash Flow Data (€ in millions) Total assets 11,599 11,651 (0.4%) Inventories 2,634 2,486 5.9% Receivables and other current assets 2,583 2,444 5.7% Working capital 2,125 2,504 (15.1%) Net cash 295 448 (34.3%) Shareholders’ equity 5,489 5,304 3.5% Capital expenditure 479 434 10.4% Net cash generated from operating activities 634 942 (32.7%) Per Share of Common Stock (€) Basic earnings 1) 2) 4.01 3.78 6.0% Diluted earnings 1) 2) 4.01 3.78 6.0% Net cash generated from operating activities 3.03 4.50 (32.7%) Dividend 1.50 3) 1.35 11.1% Share price at year-end 92.64 67.33 37.6% Other (at year-end) Number of employees 50,728 46,306 9.5% Number of shares outstanding 209,216,186 209,216,186 — Average number of shares 209,216,186 209,216,186 — 1) Excluding goodwill impairment of € 52 million in 2013. 2) Excluding goodwill impairment of € 265 million in 2012. 3) Subject to Annual General Meeting approval. version: 27. February 2014, 7:17 PM 1st corr 2nd corr 3nd corr page 5 - ADI13_3785_DE_EN_Umschlag_rz.indd OUR BRANDS adidas is a true global brand with German roots. TaylorMade TaylorMade leads the golf industry in metalwood sales and is the No. 1 driver brand on the world’s six major professional golf adidas Sport Performance tours. The brand is recognised globally for its capacity to develop innovative and performance-enhancing technologies for drivers, The guiding principle of adidas Sport Performance is to make fairway woods, hybrids, irons, putters and balls. athletes better by making them faster, stronger, smarter, cooler and more natural. The main focus is on five key categories: football, basketball, running, training and outdoor. adidas Golf adidas Golf develops high-performance golf footwear and apparel adidas Originals & Sport Style for active, serious, athletic-minded golfers seeking products to elevate their game. adidas Originals: adidas Originals is the authentic, iconic sportswear label for the street, and its philosophy is to “Celebrate Originality”. adidas Sport Style: adidas Sport Style is defined as the Adams Golf “Future of Sportswear” and includes the labels Y-3, Porsche Design Sport and adidas NEO. adidas Sport Style’s positioning statement Adams Golf designs and produces easy-to-hit equipment that is “Style your Life”. makes playing the game more enjoyable for golfers of all skill levels. The brand ranks as the No. 1 hybrid brand on the world’s major professional golf tours. Five Ten Five Ten, the “Brand of the Brave”, is a leader in performance, Ashworth high-friction footwear. From downhill mountain bike racing to rock climbing, from wingsuit flying to kayaking, Five Ten makes footwear Ashworth is an authentic golf apparel and footwear brand with for the world‘s most dangerous sports. The company has been powerful name recognition among true, authentic golfers, offering producing cutting-edge designs and proprietary Stealth rubber products that move effortlessly from the golf course to the soles for nearly 30 years. clubhouse and beyond. Reebok is an American-inspired global brand with the clear Rockport was founded in 1971 on the idea of making fashion footwear objective to become the leading fitness brand in the world. Reebok comfortable by using the latest in athletic shoe technologies. Today, believes that each person has tremendous potential that can be the brand continues to combine this DNA with the innovation resources fulfilled when they fight complacency and allow themselves to push of the adidas Group, to design products which deliver uncompro- beyond the limits and expectations they’ve become accustomed to. mised style with state-of-the-art engineered comfort for metropolitan Reebok provides consumers with innovative products, rewarding consumers around the world. experiences and the inspiration to empower them to fulfil their potential and ultimately be fit for life. For more information on our brands: Reebok-CCM Hockey is a leading designer and marketer of ice : hockey equipment and apparel, with two of the world’s most WWW.ADIDAS-GROUP.COM recognised ice hockey brand names: Reebok Hockey and CCM. version: 4. March 2014, 5:45 PM 1st corr 2nd corr 3nd corr page 6 - ADI13_3785_DE_EN_Umschlag_rz.indd / Content / 01 TO OUR SHAREHOLDERS 01.1 Corporate Mission Statement 24 01.2 Strategic Business Plan 25 01.3 Operational and Sporting Highlights 2013 26 01.4 Letter from the CEO 30 2 01.5 Executive Board 36 01.6 Supervisory Board 40 2013 01.7 Supervisory Board Report 42 01.8 Corporate Governance Report including the Declaration on Corporate Governance 48 01.9 Compensation Report 53 01.10 Our Share 58 02 OUR GROUP GROUP MANAGEMENT REPORT 02.1 adidas Group Worldwide 66 02.2 Major Sporting Events 2014 67 02.3 Group Strategy 68 02.4 Global Sales Strategy 72 02.5 Global Brands Strategy 77 02.6 Other Businesses Strategy 86 02.7 Global Operations 94 02.8 Research and Development 99 02.9 Employees 105 02.10 Sustainability 111 GROUP MANAGEMENT REPORT: This report contains the Group Management Report of the adidas Group, comprising adidas AG and its consolidated subsidiaries, and the Management Report of adidas AG.
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