Preliminary Q1 2012 figures have been released by adidas Group that ‘are materially above market expectations’. In the first quarter of 2012, adidas Group revenues increased 14% on a currency-neutral basis or 17% in Euro terms to €3.8 billion.
Growth rates in Greater China and Japan as well as at TaylorMade-adidas Golf were stronger than originally anticipated. In absolute terms, group operating profit grew 30% to €409 million.
In addition, the management team at adidas has also announced that commercial irregularities discovered at Reebok India Company will likely affect the consolidated financial statements of the adidas Group. ‘The currently estimated maximum negative impact could be up to a pre-tax amount of €125 million.’
Due to the sensitivity of the on-going investigation, specific details will be disclosed as appropriate in due course. As these irregularities have been deemed to have occurred prior to the 2012 financial year, the adidas Group might have to restate prior-year consolidated financial statements. The financial statements of adidas AG will not be affected by this issue.
adidas management has assured stakeholders that the company has, and will continue to, vigorously pursue a course of action to protect the group’s interests, which has already resulted in the appointment of a new local leadership team in India at the end of March.
Taking into account the stronger than expected first quarter financial performance overall, the continuing strong momentum of the adidas Group’s brands in key markets, as well as the impacts from potential one-time charges for 2012, management is updating its financial forecasts for the full year.
Group sales for the full year 2012 are now expected to grow at a rate approaching 10% on a currency-neutral basis (previously: mid- to high-single-digit). Net income attributable to shareholders is expected to increase at a rate between 12% and 17% (previously: between 10% and 15%).
