ADIDAS GROUP CAPITAL STRUCTURE ANALYSIS



-209550-13335000MINISTRY OF EDUCATION & TRAININGHOA SEN UNIVERSITYFACULTY OF ECONOMICS AND COMMERCE--FINANCIAL MANAGEMENT ADIDAS GROUP CAPITAL STRUCTURE ANALYSISADIDAS GROUP CAPITAL STRUCTURE ANALYSISSupervior :V? B?CH NG?CStudents :NGUY?N TH? NG?C TR?M - 2001908L? CH? MINH – 2001172???NG THU?Y H??NG NGO?C – 2000976PHAN D??NG THANH B?NH – 2000877NGUY?N TH? M? NH?N – 2001410HU?NH TH? HO?NG OANH - 2000448Ho Chi Minh City, June 24, 2014-209550-13335000MINISTRY OF EDUCATION & TRAININGHOA SEN UNIVERSITYFACULTY OF ECONOMICS AND COMMERCE--FINANCIAL MANAGEMENT ADIDAS GROUP CAPITAL STRUCTURE ANALYSISADIDAS GROUP CAPITAL STRUCTURE ANALYSISSupervisor :V? B?CH NG?CStudents :NGUY?N TH? NG?C TR?M - 2001908L? CH? MINH – 2001172???NG THU?Y H??NG NGO?C – 2000976PHAN D??NG THANH B?NH – 2000877NGUY?N TH? M? NH?N - 2001410HU?NH TH? HO?NG OANH - 2000448Ho Chi Minh City, June 24, 2014ABSTRACTACKNOWLEDGEMENTTo begin with our appreciation, we would like to thank Ms. Vu Bich Ngoc, who has lectured and given our group the opportunity to analyze the financial situation of the selected company. Throughout the experience, we have enriched our knowledge on financial statement analysis and evaluation. As a result, experience and valuable lessons gained will lead us to success in the future working environment.SUPERVISOR’S REMARK----------HCMC, // 2014TABLE OF CONTENTS TOC \o "1-3" \h \z \u ABSTRACT PAGEREF _Toc390788428 \h iACKNOWLEDGEMENT PAGEREF _Toc390788429 \h iiSUPERVISOR’S REMARK PAGEREF _Toc390788430 \h iiiTABLE OF CONTENTS PAGEREF _Toc390788431 \h ivCOMPANY PROFILES PAGEREF _Toc390788432 \h 1REFERENCE PAGEREF _Toc390788433 \h vTypeAktiengesellschaftIndustryApparel & Textile ProductsFounderAdolf DasslerHeadquartersGermanyArea servedWorldwideKey peopleIgor Landau (Chairman)Herbert Hainer (CEO)ProductsFootwear, sportswear, sports equipment, toiletriesEmployees50,728 (2013)50977825184100-1031748272923001009650194839920132013-50038098576100COMPANY PROFILESAdidas Group (AG) is a German multinational corporation that specializes in supplying sporting goods such as sport shoes, clothing and accessories. The Group has been known as the parent company of famous brands like Adidas, Reebok, TylorMade - Adidas Goft, Rocksport…Footwear and hardware role an important key in net sales divided by category of AG with 47% and 43% respectively. Western Europe contributed the largest percentage (26%) to the Group sales, followed by North American market (23%). 78% total volume of AG in 2013 was produced in Asia, the remaining supplied by manufactories located in Europe, Africa and Americas. AG’s footwear manufacturing partners supplied approximately 257 million pairs in 2013 (2012: 244 million pairs). Products were primarily sourced from factories in Vietnam (35%), China (31%) and Indonesia (24%)Number of shares outstanding 2013 average209,216,186Number of shares outstanding At year-end 2013209,216,186Initial Public Offering November 17, 1995Stock exchangeAll German stock exchangesStock registration numberDE000A1EWWW0Stock symbolADS, ADSGn, DN3283487571500-17253-2760452013002013Share ratios at a glance20132012Basic earnings per share € 4.013.78Cash generated from operating activities per share € 3.034.5Year-end price € 92.6467.33Year high € 92.6469.12Year low € 66.2851.42Dividend per share € 1.51.35Dividend payout € in millions 314282Dividend payout ratio % 37.435.7Dividend yield % 1.62Shareholders' equity per share € 26.2425.35Price-earnings ratio at year-end23.117.8Average trading volume per trading day shares 842,318900,218DAC-30 ranking at year end by market capitalization1616 by turnover1719Excluding goodwill impairment of € 52 millionExcluding goodwill impairment of € 265 millionSubject to Annual General Meeting approvalBased on number of shares outstanding at year-endBased on number of shares traded on all German stock exchangesAs reported by Deutsche Borse AG-58366242462201302013Five-year share price developmentThe 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 GroupConsolidated Income Statement20132012Change Net sales14,49214,883-2.6%Cost of sales7,3527,780-5.5%Gross profit7,1407,1030.5%Royalty and commission income104105-1.0%Other operating income14312712.6%Other operating expenses6,1336,150-0.3%Goodwill impairment losses52265-80.4%Operating profit1,20292030.7%Financial income2636-27.8%Financial expenses94105-10.5%Income before taxes1,13485133.3%Income taxes3443275.2%Net income79052450.8%Net sale decreases 2.6% In 2013, Group revenues grew 2.6% on a currency – neutral basis, as a result of sales increases in Retail and Other Businesses. Currency – neutral. Wholesale revenues remained stable compared to the prior year. The development of Group sales is below initial Management expectations of a mid – single – digit Group sales increase. Currency translation effect had a negative impact on sales in euro term. Group revenues decreased 2.6% to € 14.492 billion in 2013 from € 14.883 billion in 2012. Cost of sales decreases 5%Cost of sales is defined as the amount the Group pays to third parties for expenses associated with producing and delivering their products. Own-production expenses are also included in the Group’s cost of sales. However, these expenses represent only a very small portion of total cost of sales. In 2013, cost of sales was € 7.352 billion, representing a decrease of 5% compared to € 7.780 billion in 2012. This development was driven by the reduction of input costs as a result of lower raw material prices at the time of sourcing. In addition, currency effects contributed to the decline in cost of sales.Royalty and commission income declines 1%Royalty and commission income decreased 1% to € 104 million in 2013 from € 105 million in the prior year. On a currency – neutral basis, royalty and commission income was also down 1% mainly as a result of lower licensee sales at adidas.Other operating income increases 12.6%Other operating income includes items such as gains from the disposal of fixed assets and released of accruals and provisions as well as insurance compensation. In 2013, other operating income increased 13% to € 143 billion (2012: € r127 million). This was mainly due to the release of other operational provisions.right1364800-6623029887600Other operating expenses decrease 0.3%Other operating expenses, including depreciation and amortization, consist of items such as sales working budget, market working budget and operating overhead costs. In 2013, other operating expenses remained virtually unchanged at € 6.133 billion (2012: € 6.150 billion), as a decrease in marketing expenses was offset by higher expenditure related to the expansion of the Group’s own – retail activities.3571269132037200Goodwill impairment losses decrease 80.4%As a result of the annual impairment test, the adidas Group has impaired goodwill and recorded a € 52 million pre – tax charge as at December 31, 2013 (2012: € 265 million). Within wholesale cash-generating unit Iberia, goodwill impairment losses of € 23 million were recognized. Within the retail cash – generating unit North America, goodwill impairment losses of € 29 million were recognized. The goodwill of these two cash – generating units is completely impaired. The impairment losses were mainly caused by adjusted growth assumptions and an increase in the country – specific discount rates.3577631119125200In 2012, the wholesale cash – generating unit North America was impaired by € 106 million, Latin America by € 41 million, Brazil by € 15 million and Iberia by € 11 million. The impairment loss in 2012 was mainly the result of adjusted growth assumptions for t he Reebok-CCM Hockey was completely impaired and € 24 million allocated to Rockport was partially impaired. These impairment losses were primarily the result of the re-evaluation of future growth prospects and, with regard to Rockport, also due to an increase in the discount rate. The impairment losses in both years were non-cash in nature and do not affect the adidas Group’s liquidity.Financial income down 28%Financial income decreased 28% to € 26 million in 2013 from € 36 million in the prior year, mainly due to a decrease in interest income.Financial expenses decrease 11%-122988073700Financial expenses declined 11% to € 94 million in 2013 (2012: € 105 million). The decrease in interest expenses was the main contributor to the decline.REFERENCE ................
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