New Adi­das boss tar­gets faster sales, profit

New Straits Times - - Business / World - Reuters

The new boss of Adi­das hiked sales and profit tar­gets for the Ger­man sportwear firm yes­ter­day and an­nounced plans to in­crease ecom­merce sales, sim­plify busi­ness pro­cesses and keep in­vest­ing heav­ily in the key United States mar­ket.

Kasper Rorsted, the for­mer chief ex­ec­u­tive of con­sumer goods firm Henkel who took over in Oc­to­ber, said he was adding goals to an ex­ist­ing 2015-2020 strate­gic plan, putting more fo­cus on com­pany cul­ture, e-com­merce and ef­fi­ciency.

Rorsted was ap­pointed to re­place long-serv­ing boss Herbert Hainer with a man­date to im­prove earn­ings af­ter ac­tivist share­hold­ers bought stakes in Adi­das in 2015 fol­low­ing a se­ries of profit warn­ings as the Ger­man firm failed to keep pace with US ri­val Nike.

Adi­das shares were in­di­cated up 4.8 per cent in pre-mar­ket trade.

Yes­ter­day, Rorsted said he would put a new fo­cus on digi­ti­sa­tion, in­creas­ing e-com­merce sales to €4 bil­lion (RM18.81 bil­lion) by

2020, up from a pre­vi­ous tar­get of €2 bil­lion, and ex­pand­ing the use of tech­nolo­gies such as 3D print­ing.

He also an­nounced plans to har­monise and sim­plify busi­ness pro­cesses, in­clud­ing re­duc­ing the num­ber of ar­ti­cles of­fered and har­mon­is­ing mar­ket­ing ac­tiv­i­ties, a sim­i­lar strat­egy to that he pur­sued at Henkel, which helped boost prof­itabil­ity there.

Adi­das now ex­pects cur­rency-neu­tral rev­enues to rise be­tween 10 and 12 per cent on av­er­age be­tween 2015 and 2020, up from a pre­vi­ous tar­get for a “high-sin­gle-digit rate”, while net in­come should grow be­tween 20 and 22 per cent, up from 15 per cent.

For this year, Adi­das fore­cast cur­rency-neu­tral sales growth of be­tween 11 and 13 per cent and net in­come to rise be­tween 18 and 20 per cent to a level up to €1.22 bil­lion, ahead of the €1.13 bil­lion ex­pected by an­a­lysts.

Adi­das also re­ported a fourthquar­ter net loss of €10 mil­lion on sales up €12.5 per cent to €4.69 bil­lion, in line with most an­a­lyst fore­casts af­ter it took a one-off charge to help re­struc­ture strug­gling fit­ness brand Ree­bok.

Kasper Rorsted

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.