Based on preliminary figures, adidas-Salomon saw a 5.0% improvement in Q4 sales in currency-neutral terms, but showed a 3.8% decline in Euros from 6.52 bn ($6.2 Bn). Currency-neutral sales increased for all brands and regions, except North America.
Group gross margin increased 160 basis points from 43.2% in 2002 to 44.9% in 2003. This is the highest level ever and reflects the impact of increased adidas own-retail activities, an improving product mix as well as a stronger euro.
Group operating profit increased 3% to 490 million ($555 million)versus 477 million ($451 million) in 2002 and operating margin grew 50 basis points from 7.3% in 2002 to 7.8% in 2003. As a result, income before taxes grew 12% to 438 million (496 million), compared to 390 million ($369 million) in the prior year. This performance was enhanced by a significant reduction in financial expenses supported by both lower average debt levels and lower interest rates.
Net income for the Group increased by 14% from 229 million ($217 million), or 5.04 ($4.77) per share, in 2002 to a record 260 million($294 million), or 5.72 ($6.48)per share, the upper end of the Groups targeted earnings range. Gross margin expansion and lower operating expenses were drivers of this improvement.
CEO Herbert Hainer commented, “Our excellent 2003 performance reflects our Groups ongoing ability to deliver targeted results even in the face of challenging market conditions. Despite weakness in America and major pressure on Group sales as a result of currency developments, we achieved record earnings.” Herbert Hainer continued, “2004 will be an exciting year with adidas-Salomons brands and products center-stage at the highest-profile global sporting events. This year, we will stabilize our business in North America, grow Group sales by 3 to 5% on a currency-neutral basis and deliver net income growth of at least 10%.”
