adidas group beats trend to post double digit growth in Q3
06 Nov '08
8 min read
Operating margin improves by 0.4 percentage points:
The Group's operating margin grew 0.4 percentage points to 11.7% in the first nine months of 2008 (2007: 11.3%) as the increase in gross margin more than offset higher operating expenses as a percentage of sales.
Operating expenses as a percentage of sales increased by 1.2 percentage points to 38.5% in the first nine months of 2008 from 37.3% in 2007. This development was primarily driven by higher marketing expenses as a percentage of sales in the adidas segment related to this year's major sporting events.
Increased expenses to support the Group's growth in emerging markets such as Russia also impacted this development. Operating profit for the Group increased 8% in the first nine months of 2008 to reach € 963 million versus € 889 million in 2007.
Net financial expenses increase 9%:
Net financial expenses increased 9% to € 113 million in the first nine months of 2008 from € 104 million in the prior year. The increase was primarily due to exchange rate variances. Lower financial income also contributed to this development.
Income before taxes increases by 8%:
Despite higher net financial expenses, income before taxes as a percentage of sales increased by 0.4 percentage points to 10.3% in 2008 from 10.0% in 2007 as a result of the Group's operating margin increase. Income before taxes for the adidas Group grew 8% to € 850 million in the first nine months of 2008 from € 785 million in 2007.
Net income attributable to shareholders up 11%:
The Group's net income attributable to shareholders increased 11% to € 588 million in the first nine months of 2008 from € 530 million in 2007. This development was supported by a lower tax rate and lower minority interests.
The Group's tax rate decreased by 1.5 percentage points to 30.5% in the first nine months of 2008 (2007: 32.0%). The Group's minority interests declined by 31% to € 2 million in the first nine months of 2008 from € 4 million in the prior year.
Basic earnings per share increase 14%:
Basic earnings per share increased 14% to € 2.96 in the first nine months of 2008 versus € 2.60 in the prior year. The weighted average number of shares used in the calculation of basic earnings per share was 198,868,061 (2007 average: 203,583,762).
Diluted earnings per share in 2008 increased 13% to € 2.78 from € 2.46 in the prior year. The weighted average number of shares used in the calculation of diluted earnings per share was 214,671,394 (2007 average: 219,456,361).
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