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adidas & TMAG to show strong momentum in H2
05 Aug '08
5 min read
In Latin America, currency-neutral sales grew 29% in the first half of the year, with double-digit increases coming from all of the region's major markets. The development was supported by the first-time consolidation of Reebok's joint ventures in the region. Currency translation effects negatively impacted sales in euro terms in all regions.
Sales in Europe increased 11% in euro terms to € 2.352 billion in 2008 from € 2.116 billion in 2007. Revenues in North America decreased 19% to € 1.160 billion in 2008 from € 1.429 billion in the prior year. In euro terms, revenues in Asia grew 17% to € 1.214 billion in 2008 from € 1.036 billion in 2007. Sales in Latin America grew 23% to € 381 million in 2008 from € 310 million in the prior year.
Record group gross margin:
The gross margin of the adidas Group increased by 2.5 percentage points to 49.6% of sales in the first half of 2008 (2007: 47.1%), driven by improvements in all brand segments. This highest-ever first half year rate was related to an improving regional and product mix, increased own-retail activities as well as favorable currency movements. Cost synergies resulting from the Reebok integration into the adidas Group also continued to have a positive impact.
Input price increases had only a modest negative impact on the cost of sales development in the first half of 2008. As a result of the Group's strong top-line growth and gross margin improvement, gross profit for the adidas Group rose 10% in the first half of 2008 to reach € 2.552 billion versus € 2.326 billion in the prior year.
Operating margin increases by 1.1 percentage points:
The Group's operating margin increased 1.1 percentage points to 9.5% in the first half of 2008 (2007: 8.5%). This is the highest first half operating margin since the acquisition of Reebok. Operating expenses as a percentage of sales increased by 1.3 percentage points to 40.9% in the first half of 2008 from 39.6% in 2007.
This development was primarily driven by higher marketing expenses as a percentage of sales in the adidas segment in connection with this year's major sporting events. Increased expenses to support growth in emerging markets such as Russia in both the adidas and Reebok segments also impacted this development. Operating profit for the adidas Group increased 17% in the first half of 2008 to reach € 490 million versus € 417 million in 2007.
Net financial expenses decrease 3%:
Net financial expenses decreased 3% to € 71 million in the first half of 2008 from € 73 million in the prior year as a result of lower average borrowings in 2008 compared to the first half of the prior year.
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Sales in Europe increased 11% in euro terms to € 2.352 billion in 2008 from € 2.116 billion in 2007. Revenues in North America decreased 19% to € 1.160 billion in 2008 from € 1.429 billion in the prior year. In euro terms, revenues in Asia grew 17% to € 1.214 billion in 2008 from € 1.036 billion in 2007. Sales in Latin America grew 23% to € 381 million in 2008 from € 310 million in the prior year.
Record group gross margin:
The gross margin of the adidas Group increased by 2.5 percentage points to 49.6% of sales in the first half of 2008 (2007: 47.1%), driven by improvements in all brand segments. This highest-ever first half year rate was related to an improving regional and product mix, increased own-retail activities as well as favorable currency movements. Cost synergies resulting from the Reebok integration into the adidas Group also continued to have a positive impact.
Input price increases had only a modest negative impact on the cost of sales development in the first half of 2008. As a result of the Group's strong top-line growth and gross margin improvement, gross profit for the adidas Group rose 10% in the first half of 2008 to reach € 2.552 billion versus € 2.326 billion in the prior year.
Operating margin increases by 1.1 percentage points:
The Group's operating margin increased 1.1 percentage points to 9.5% in the first half of 2008 (2007: 8.5%). This is the highest first half operating margin since the acquisition of Reebok. Operating expenses as a percentage of sales increased by 1.3 percentage points to 40.9% in the first half of 2008 from 39.6% in 2007.
This development was primarily driven by higher marketing expenses as a percentage of sales in the adidas segment in connection with this year's major sporting events. Increased expenses to support growth in emerging markets such as Russia in both the adidas and Reebok segments also impacted this development. Operating profit for the adidas Group increased 17% in the first half of 2008 to reach € 490 million versus € 417 million in 2007.
Net financial expenses decrease 3%:
Net financial expenses decreased 3% to € 71 million in the first half of 2008 from € 73 million in the prior year as a result of lower average borrowings in 2008 compared to the first half of the prior year.
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adidas AG
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