4 Min Read
FRANKFURT (Reuters) - German sporting goods maker Adidas (ADSGn.DE) is counting on soccer, running and a host of new shirts and shoes to help it achieve profit and sales growth in 2014 and hit its 2015 goals, the company said on Tuesday.
Adidas, the world's second largest sportswear maker behind Nike (NKE.N), is aiming to increase sales to 17 billion euros in 2015 and increase its operating profit margin to 11 percent that year, compared with 11 billion and 7.5 percent in 2010.
Those targets had come under scrutiny after Adidas warned on profit in September, but Chief Executive Herbert Hainer said Tuesday at an event for investors the group would reach them.
He predicted 2014 sales would rise by a high single-digit percentage when adjusted for currency effects, helped by sales of soccer and running products, while its operating margin would increase by 1 percentage point next year.
Still, that means Adidas will also need a similar level of sales growth in 2015, a year without any big sporting events, as well as a 150 basis point increase in its margin to reach the medium-term targets.
"We believe we can grow the business by launching a lot of new innovative products," he told journalists, adding that measures to cut costs such as streamlining warehouses and cutting product ranges would also bear fruit in time for 2015.
"Our pipeline of new, exciting products is full," he said.
For example, Adidas would be extending the cushioning technology used in its Boost running shoes, launched this year, to other categories, such as basketball, he said. Adidas expects to sell 15 million pairs of Boost shoes in 2015.
Adidas shares were down 0.9 percent at 88.43 euros at 1521 GMT, outperforming the wider Dax index .GDAXI, which was down 1.4 percent.
Berenberg Bank analyst John Guy said it was reassuring that Adidas had confirmed the 2015 targets.
"It will require another high single-digit percentage growth in 2015 and that's aggressive but they have got a good track record of focusing on innovation in other categories post the big soccer years," he told Reuters.
Adidas has predicted record soccer sales of over 2 billion euros for next year as it seeks to keep its leading position in the soccer market ahead of Nike.
The group will later on Tuesday launch the Brazuca matchball ahead of next year's World Cup in Brazil and Hainer said he expected Adidas would sell a record amount of soccer balls next year, though declined to give a target.
The group will also invest in revamping its stores that sell sports performance and original fashion gear, Hainer said.
Adidas has struggled in Europe this year, losing market share to Nike, but Hainer said he believed the worst was over from a macroeconomic point of view.
"We will definitely grow in 2014 in the western European market. Southern Europe was hit hardest by the economy, but the World Cup is helping us, especially with Spain, where we have the world champions," he said, referring to Adidas' contract to kit out the national soccer team.
Hainer said the group would provide more details of the outlook for 2014 when it reports full-year results in March.
Reporting by Victoria Bryan; Editing by Pravin Char and David Evans