GERMANY: Adidas H1 up on Olympics sponsorship
- First half net income up 30% to EUR455m
- Sales increased 11% to EUR7.3bn
- Second-quarter net income increased 18% to EUR165m
- Group revenue rose 15% to EUR3.5bn
Sportswear brand Adidas today (2 August) said it expects full-year earnings to come in at the top end of its previous forecast as it capitalises on its sponsorship of the Euro 2012 football tournament and the London Olympics.
Net income is now seen in the range of EUR770-785m against earlier forecasts of EUR750-785m. The company attributed the growth to top-line improvement and increased operating margins.
"Right at this very moment, we are capitalising on our involvement in the London Olympic Games, an event that echoes the shared values of our Group: performance, passion, integrity and diversity," said Adidas chief executive Herbert Hainer.
"I have no doubt that this excellent event in London will inspire a generation to get into sport and provide further impetus to the global mega-trend towards sport and healthier living."
During the first half of its financial year, Adidas said net income soared 30% to EUR455m, as group sales grew 11% to EUR7.3bn. The sales gains were helped by a 10% increase in wholesale revenue to EUR4.7bn, and a 23% rise in retail sales to EUR1.5bn.
Over the second-quarter, net income grew 18% to EUR165m, while group revenue rose 15% to EUR3.5bn. Operating margin increased to 7.3% from 7.1% in 2011, as operating profit rose 17% to EUR256m.
"We have delivered another winning financial performance in the first half of 2012," said Hainer. "Our clear victory in the summer of football, our increased operating margin and our excellent inventory management show we have the right formula to preserve and sustain our positive earnings and cash flow trajectory."
However, the group recorded weakness in its Reebok brand, with sales falling 26% over the quarter. This was blamed on issues faced in its Indian division, combined with the non-recurrence of prior-year licence sales.
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