adidas reported that third quarter net sales for the Group increased 8% on a currency-neutral basis with improvements coming from adidas in all regions except Europe, where sales remained stable. In euro terms, sales grew 9% to 1.92 billion ($2.35 bn) in 2005 from 1.76 billion ($2.15 bn) in Q3 2004.
The Groups gross margin improved by 10 basis points to 48.5% of sales, compared to 48.4% in Q3 2004. Operating profit increased 12% in the third quarter of 2005 to 315 million ($385 mm) versus 281 million ($344 mm) in 2004.
Net income from continuing operations was up 28% to 209 million ($255 mm), or 4.13 (5.04) per diluted share, versus 163 million ($199 mm), or 3.45 ($4.22) per diluted share, in the year-ago period.
Income from discontinued operations, net of tax, which reflects the performance of the Salomon business that will be deconsolidated at the beginning of the fourth quarter, declined 48% to 11 million ($13 mm) in 2005 from 22 million ($27 mm) in the third quarter of 2004.
Net income attributable to shareholders from continuing and discontinued operations increased 20% to 215 million ($262 mm) in the third quarter of 2005 versus 179 million ($219 mm) in the year-ago period. Diluted earnings per share from continuing and discontinued operations were up 11% to 4.36 ($5.32) from 3.92 ($4.79) in 2004.
Nine-Month YTD Results
During the first nine months of 2005, Group sales increased 10% on a currency-neutral basis. In euro terms, sales also grew 10% to 5.12 billion from 4.66 billion in 2004.
“The first nine months of 2005 have been outstanding for our Group – both in terms of the strategic decisions we have taken and the financial results we have achieved. Our key region North America is stronger than ever so that we have raised our Group sales and earnings expectations for the year,” commented adidas-Salomon AG Chairman and CEO Herbert Hainer.
Segment Sales
Sales growth in the adidas segment set the pace for Group performance during the first nine months of 2005. Currency-neutral adidas revenues increased 10% in the first nine months. Drivers of this growth were strong double-digit growth in the Sport Heritage division as well as increases in virtually all Sport Performance categories. Currency-neutral revenues in the TaylorMade-adidas Golf segment increased 12%, driven by significant growth in all major categories except putters. Currency effects only had a minor effect on sales at adidas and TaylorMade-adidas Golf in euro terms. adidas sales in euro terms were up 9% to 4.545 billion in the first nine months from 4.155 billion in 2004. TaylorMade-adidas Golf sales in euro terms grew 11% to 528 million in 2005 from 477 million in 2004.
|
|
Nine Months 2005 |
Nine Months 2004 |
Change y-o-y in euro terms |
Change y-o-y |
|
|
in millions |
in millions |
in % |
in % |
|
adidas |
4,545 |
4,155 |
9 |
10 |
|
TaylorMade-adidas Golf |
528 |
477 |
11 |
12 |
|
Total continuing operations |
5,115 |
4,664 |
10 |
10 |
Group sales by brand in 2005, “Total continuing operations” includes HQ/Consolidation
Regional Results
From a regional perspective, nine months Group sales in Europe were stable on a currency-neutral basis. Double-digit growth in the regions emerging markets and solid increases in Italy and Scandinavia were offset by declines in Iberia, France and the UK.
In North America, currency-neutral sales grew 17% due to double-digit growth in both the Sport Performance and Sport Heritage divisions as well as at TaylorMade-adidas Golf.
In Asia, currency-neutral sales increased 26% in the first nine months of 2005, driven by strong growth in China, where sales nearly doubled, as well as strong increases in Japan, India and many other countries in the region.
In Latin America, currency-neutral sales increased 35% in the first nine months, renewing its position as the fastest growing region within the Group. This development was mainly driven by double-digit sales increases in the regions three biggest markets Brazil, Mexico and Argentina.
Currency translation effects only had a minor effect on Group sales in the first nine months of 2005. Sales in Europe increased slightly from the prior years level to 2.53 billion from 2.53 billion in the 2004 YTD period. In North America, sales in euros in the first nine months increased 14% to 1.20 billion in 2005 from 1.05 billion in 2004. In euro terms, sales in Asia improved 26% to 1.11 billion in 2005 from 88 million in 2004. In Latin America, sales in euro terms grew 41% to 231 million in 2005 from 164 million in 2004.
|
|
Nine Months 20052 |
Nine Months 20042 |
Change y-o-y in euro terms |
Change y-o-y |
|
|
in millions |
in millions |
in % |
in % |
|
Europe |
2,537 |
2,530 |
0 |
0 |
|
North America |
1,203 |
1,052 |
14 |
