Exchange rates scupper Adidas turnover

Exchange rates scupper Adidas turnover

German shoe brand Adidas is placing its hopes on 2014, which should be a successful year thanks to the World Championship Football in Brazil. 2013 has been a rather abysmal year, as the euro proved to be (too) strong.

Beaten quarterly expectations

In an “exceptionally strong fourth quarterAdidas managed a 42 million euro profit, beating analyst expectations of 37.1 million euro. Its turnover also charged ahead 3.3 % to 3.48 billion euro, whereas analysts had expected a ‘mere’ 3.41 billion euro.

 

Excluding exchange rates fluctuations, turnover would even have increased 12 %, with Adidas up 10 %, Reebok up 9 % and the other retail activities up 3 % (on a like-for-like basis). It is exactly these retail activities that the group wishes to strengthen in order to compete with eternal competitor Nike.

 

It has been a difficult 2013 financially for Adidas, with the devaluated Russian ruble, Japanese yen, Brazilian real and Turkish lira resulting in a turnover warning in September. The strong euro pushed the yearly turnover down 2.6 % to 14.5 billion euro: excluding exchange rate fluctuations, turnover would have increased 3 %.

 

WC football has to bring profit growth

These continuous exchange rate issues explain why the German group remains cautious for 2014, despite the World Cup Football for which it created the official ball (the Brazuca) and several national team shirts.

 

Adidas believes an 830 to 930 million euro profitis possible, barely more than the 839 million from 2013 and well below analysts’ expectations at 1 billion euro. CEO Herbert Hainer, whose contract was prolonged until 2017, remains upbeat: “From an operational perspective, there is no doubt that 2014 will be a successful year for us.”

Questions or comments? Please feel free to contact the editors


Small Belgian brewery conquers Brazil thanks to playing cards

13/09/2017

Het Nest, a small brewery from Turnhout, will get its beers brewed in Brazil as well. It has struck a deal with Cervejaria Premium Paulista, which will brew and distribute the beers locally.

Price cuts drive 25 % more customers to Whole Foods

12/09/2017

Supermarket chain Whole Foods welcomed an additional 25 % of customers in the first few days following Amazon’s price cuts.

Ter Beke enters British food service industry

12/09/2017

Belgian food group Ter Beke has acquired a 90 % stake in British competitor KK Fine Foods for an undisclosed fee. The current shareholders hold onto the other 10 %.

Godiva wants to conquer the world through supermarkets

12/09/2017

Belgian praline brand Godiva will soon sell its chocolate in supermarkets all over the world after signing a deal with chains like Albert Heijn and Sainsbury’s. Previously, it sold nearly all its chocolate through its own store network.

Insight: Xavier Piesvaux' seven labours at Delhaize

10/09/2017

Can one French and several Dutch managers do what the Belgian management failed to do these past few years at Delhaize Belgium? Its new CEO will face plenty of challenges: we count at least seven.

Nestlé USA acquires food manufacturer Sweet Earth

08/09/2017

Nestlé USA has acquired American Sweet Earth for an undisclosed fee. The company mainly manufactures meat replacements, a rapidly-growing market, but also several frozen meals.

Back to top