Financial Management Analysis
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Transcript of Financial Management Analysis
Financial Management
AnalysisB&B Group
2
Impossible is nothing
1Historical backgroundNature of business
Company Overview
2Financial performance comparing with the industry
Financial Highlights
3The short/ intermediate/ long term financing sourcesFirm’s capital ratios analysis
Capital Structure
CONTENTS
3
adidas
Group
COMPANY OVERVIEW
F o u n d e d in 1924 by Adi Dassler
H e a d q u a r t e r s
“The adidas Group strives to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle!”M
issi
on
50.728EMPLOYEES
WORLDWIDE
S e c t o r Consumer DiscretionaryI n d u s t r y Apparel & Textile
Products
adidas
Group
B r a n d s
P r o d u c t s
COMPANY OVERVIEW
4
Wholesale68% of Group sales
Retail20% of Group sales
Other Business12% of Group sales
47%
40%
13%
FootwearApparelHardware
Net sales by product category
2013
5
COMPANY OVERVIEW
A d i d a s G r o u p Wo r l d w i d e ( % o f G r o u p s a l e s )
6
SUPERVISORY BOARD
o Creating shareholder valueo Presentation of Route 2015o Diverse brand portfolioo Investments focused on highest-potential
markets and channels
o Creating a flexible supply chaino Leading through Innovationo Becoming a sustainable company
G R O U P S T R AT E G Y
EMPLOYEE STATISTICS
2013
2012
2011
2010
2009
50,728
46,306
46,824
42,541
39,596
adidas Group number of employees
Chart Employees by function
Own retail
Logistics
Sales
Central functions & adminis-tration
Marketing
Production
IT
Research & development
On December 31,2013, the Group had 50,728
employees, which represents an increase of 10%
versus 46,306 in the previous year
→ Global employee base increases strongly
Awards
2013
8
FINANCIAL HIGHLIGHTSThe adidas AG share
Number of shares outstanding 2013 average 209,216,186
Number of shares outstanding At year-end 2013 209,216,186
Initial Public Offering November 17, 1995
Stock exchange All German stock exchanges
Stock registration number DE000A1EWWW0
Stock symbol ADS, ADSGn, DN
Five-year share price development
37%
32%
14%
10%5%
2%
Rest of Europe
North America
Other, undiscloded holdings
Germany
Rest of the world
Management
Shareholder Structure in 2013
2013
2012
2011
2010
2009
0 5 10 15 20 25
19.382
14.087
10.515
10.229
7.902
adidas AG market capitalization at year-end (€ in billion)
2013
FINANCIAL HIGHLIGHTS
Share ratios at a glance 2013 2012Basic earnings per share € 4.01 3.78 Cash generated from operating activities per share € 3.03 4.50 Year-end price € 92.64 67.33 Year high € 92.64 69.12 Year low € 66.28 51.42 Dividend per share € 1.50 1.35 Dividend payout € in millions 314 282 Dividend payout ratio % 37.40 35.70 Dividend yield % 1.60 2.00 Shareholders' equity per share € 26.24 25.35 Price-earnings ratio at year-end 23.10 17.80 Average trading volume per trading day shares 842,318 900,218 DAC-30 ranking at year end by market capitalization 16 16 by turnover 17 19
The adidas Group and the adidas AG share receive strong analyst support in 2013. The vast majority of 45 analysts from investment banks and brokerage firms are confident about the medium and long-term potential of the Group
Recommendation Split
Buy Hold Sell
9
2013
10
FINANCIAL HIGHLIGHTS
Income Statement 2012-2013 2011-2012
2013 Change 2012 Change 2011
Net sales 14,492 -2.6% 14,883 11.7% 13,322
Cost of sales 7,352 -5.5% 7,780 11.3% 6,993
Gross profit 7,140 0.5% 7,103 12.2% 6,329
Royalty and commission income 104 -1.0% 105 12.9% 93
Other operating income 143 12.6% 127 29.6% 98
Other operating expenses 6,133 -0.3% 6,150 10.5% 5,567
Goodwill impairment losses 52 -80.4% 265 100.0% 0.00
Operating profit 1,202 30.7% 920 -3.5% 953
Financial income 26 -27.8% 36 16.1% 31
Financial expenses 94 -10.5% 105 -8.7% 115
Income before taxes 1,134 33.3% 851 -2.1% 869
Income taxes 344 5.2% 327 25.3% 261
Net income 790 50.8% 524 -13.8% 608
11
Change (%)143%
2%
5%
40%
-20%
19%
-46%
225%
-31%
-
-45%
0%
-50%
11%
3%
-6%
2012280
1,790
459
78
5
2,612
1,207
4
13
-
1,224
209
641
4,454
5,304
6,528
33%
7%
59%
2013Short-term borrowings 681
Account payable 1,825
Accrued liabilities 483
Other current financial liabilities 109
Finance lease obligations 4
Total Sources of Short-term Financing 3,102
Long-term borrowings 653
Other non-current financial liabilities 13
Finance lease obligations 9
Liabilities classified as held for sale -
Total long-term financial liabilities 675
Share capital 209
Reserves 321
Retained earnings 4,959
Shareholder's equity 5,489
Total Source s of Long-term Financing 6,164
CAPTITAL STRUCTURE
2013
12
Borrowings Financing Structure(€ in millions)
2013 2012
Cash and short-term financial assets 1629 1935
Bank borrowings 126 59
Private placements 248 480
Eurobond 500 499
Convertible bond 460 449
Gross total borrowings 1334 1487
Net cash/net borrowing 295 448
SOURCES OF FINANCING
82%
18%
Gross total borrowings Net cash
77%
23%
2013
2012
Cash an
d short-
term finan
cial a
ssets
Bank b
orrowings
Private
placem
ents
Euro
bond
Converti
ble bond
Gross
total
borrowings
Net ca
sh0
400800
120016002000
2013 2012
13
Gross borrowings as at December 31, 2013
Short-term()
Intermediate-term(1-3y)
Long-term(3-5y)
Total
Bank borrowings 126 - - 126Private placements 55 193 - 248Eurobond 500 - - 500Convertible bond - - 460 460Total 681 193 460 1334
Bank borrowings
Private placements
Eurobond
Convertible bond
Total
19%
8%
73%
0%
51%
0%
100%
0%
0%
14%
-
-
-
1.00
0.34
Short-term Intermediate-term Long-term
Gross borrowings as at December 31, 2012
Short-term()
Intermediate-term(1-3y)
Long-term(3-5y)
Total
Bank borrowings 59 - - 59Private placements 221 145 114 480Eurobond - 499 - 499Convertible bond - - 449 449Total 280 644 563 1487
Bank borrowings
Private placements
Eurobond
Convertible bond
Total
21.1%
78.9%
0.0%
0.0%
18.8%
0.0%
22.5%
77.5%
0.0%
43.3%
0.0%
20.2%
0.0%
79.8%
37.9%
The Adidas Group has diversified into different sources of financing to reduce its dependence on pure, traditional bank financing
SOURCES OF FINANCING
2013 2012 20110%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
51.0%
18.8% 22.6%
14.5%
43.3%
60.9%
34.5% 37.9%
16.5%
Short-term Intermediate-termLong-term
Borrowings Financing Source (€ in millions)
2013 2012 2011Short-term 681 280 289 Intermediate-term 193 644 780 Long-term 460 563 211 Total financing 1,334 1,487 1,280
The increase was mainly due to a reclassification of
long-term borrowings to short-term borrowings, as a
result of the Group’s Eurobond, which will mature in
July 2014.
SOURCES OF FINANCING
15
29%
13%58%
33%
7%
59%
Short-term financial source
Long-term financial source
Shareholder's equity
2013 2012 Change
Net profit margin 5% 4% 1%
Debt to Equity 1.11 1.20 (0.09)
Debt to total capital 0.53 0.55 (0.02)
Short-term source of finance/ total source
33.48% 28.58% 4.9%
Long-terms source of finance/ total source
66.52% 71.42% (4.9%)
Financial Leverage (5.4%) (8.5%) 3.1%
ROE (EAT) 14.4% 9.9% 4.5%
DPS 1.5 1.35 11.1%
EPS 4.01 3.78 6%
DPS 1.5 1.35 11.1%
EPS 4.01 3.78 6%
CAPITAL STRUCTURE
FINANCIAL SOURCERESTRUCTURE
THANKS YOU!B&B Group
Financial Management