adidas-Salomon reported that first quarter net sales for the Group increased 11% on a currency-neutral basis with improvements coming from all regions. This represents growth of 10% in euro terms to 1.78 billion ($2.33 bn) in 2005 from 1.62 billion ($2.03 bn in the first quarter of 2004. Gross margin improved 1.0 percentage points to 46.9% of sales from 45.9% in the prior year.
First quarter operating profit grew 27% to 179 million ($235 mm)in 2005 from 142 million ($177 mm) in the prior year. Net income attributable to shareholders grew 46% reaching 105 million ($138 mm) versus 72 million ($90 mm) in 2004. Diluted earnings per share grew 36% to 2.15 ($2.82) in the first quarter from 1.58 ($1.97) last year.
The adoption of new and revised International Financial Reporting Standards (IFRS) concerning the inclusion of the operating items royalty and commission income and goodwill amortization into operating profit as well as the discontinuation of scheduled goodwill amortization positively impacted the Group's reported financial performance in the first quarter. On a comparable basis (The figures stated on a comparable basis are adjusted to eliminate the goodwill amortization incurred in 2004. Furthermore, operating profit reflects the inclusion of royalty and commission income in the operating profit for 2004 and 2005.), the Group's operating profit, IBT and net income attributable to shareholders would have increased 17%, 20% and 26% respectively during the first quarter of 2005.
“adidas-Salomon has got off to a powerful start in the first quarter of 2005,” commented adidas-Salomon Chairman and CEO Herbert Hainer. “By every key measure – sales growth, margin improvement and profitability – we've delivered outstanding performance.”
adidas drives top-line growth in the first quarter
Sales growth in the adidas segment set the pace for Group performance during the first quarter of 2005. Currency-neutral adidas revenues increased 11%. Drivers of this growth were significant increases in nearly all Sport Performance categories as well as strong double-digit growth in the Sport Heritage division. At Salomon, revenues decreased 8% on a currency-neutral basis during the first three months of 2005. This decline was mainly due to lower sales in the inline skates, cycling components as well as most major winter sports categories. Revenues for TaylorMade-adidas Golf increased 31% on a currency-neutral basis, mainly as a result of strong double-digit growth in the metalwoods, irons, golf ball and apparel categories. Currency effects negatively impacted sales at all brands in euro terms.
adidas sales in euro terms were up 10% to 1.51 billion ($1.98 bn) in the first quarter of 2005 from 1.38 billion ($1.72 bn) in 2004. Salomon sales in euro terms declined 9% to 112 million ($137 mm) in the first quarter of 2005 from 122 million ($152 mm) in the prior year. Sales in euro terms at TaylorMade-adidas Golf grew 28% to 149 million ($196 mm) in 2005 from 116 million ($145 mm) in 2004.
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adidas |
|
1,378 |
10 |
11 |
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Salomon |
|
122 |
(9) |
(8) |
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TaylorMade-adidas |
|
116 |
28 |
31 |
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Total |
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adidas-Salomon sales by brand in 2005, “Total”
includes HQ/Consolidation
Positive regional sales development
From a regional perspective, Group sales in Europe grew 1% on a currency-neutral basis, driven by strong double-digit growth in the regions emerging markets as well as solid increases in the UK and Italy. In North America, Group sales increased 20% on a currency-neutral basis, due to double-digit growth in the adidas Sport Performance and Sport Heritage divisions as well as at TaylorMade-adidas Golf. In Asia, currency-neutral sales increased 31%, driven by double-digit growth in China, Japan and Korea. In Latin America, currency-neutral sales increased 45% in the first quarter, renewing its position as the fastest growing region within the Group. The improvement was driven by double-digit sales increases in nearly all countries in the region. In euro terms, currency translation effects negatively impacted sales in the first quarter of 2005.
Sales in Europe increased 1% in euro terms to 959 million ($1.26 bn) in the first three months of 2005 from 951 million ($1.19 bn) in the prior year. In North America, sales in euros increased 15% to 378 million ($496 mm) in 2005 from 328 million ($410 mm) in 2004. In euro terms, sales in Asia improved 29% to 357 million ($469 mm) in the first quarter of 2005 from 276 million ($345 mm) in 2004. In Latin America, sales in euros grew 41% to 69 million ($91 mm) in 2005 from 49 million ($61 mm) in 2004.
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Europe |
959 |
951 |
1 |
1 |
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North America |
378 |
328 |
15 |
20 |
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Asia |
357 |
276 |
29 |
31 |
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Latin America |
69 |
49 |
41 |
45 |
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Total |
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