Wednesday, 5 March 2014

Currency troubles in growth markets dent Adidas 2013 earnings

Currency troubles in growth markets dent Adidas 2013 earnings
In 2013, Adidas had earned a bottom-line profit of 787 million euros ($1.08 billion), which was 49 percent higher than in the previous year, the German sportswear and equipment manufacturer announced as it released its full-year results.
The increase came in spite of slipping sales in the year, falling by 2.6 percent to 14.5 billion euros, the group, which is based in Herzogenaurach, said. In 2013, Adidas sales were strongly hit by depreciating currencies in growth markets such as Russia and Argentina, Chief Executive Herbert Hainer said in a statement.
'Currency headwinds had a significant negative effect on our results in euro terms, and this is also expected to continue in 2014,' he added.
As a result, Adidas, which is competing against US-based manufacturer Nike for leadership among global sportswear and equipment makers, missed its currency-neutral sales target. An increase by 3 percent compares unfavorably with a guidance of a high single-digit figure announced in December.
Nevertheless, the German group is confident it will reach higher sales and profits in 2014, expecting a boost from the FIFA World Cup in Brazil this summer. Again, it predicted currency-neutral sales to grow in the higher single-digit range, and bottom-line profit to come in between 830 and 930 million euros.
Moreover, Adidas announced an 11-percent higher dividend for 2013, paying out 1.50 euros per share for the year.

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