adidas(US:ADDYY)2020-03-11 19:36Financial Data and Key Metrics Changes - The company achieved a topline growth of 6% for the full year, in line with the guidance of 5% to 8% [19] - Gross margin remained stable at 52%, with an operating margin of 11.3% [19][40] - Net income grew by 12%, exceeding the guidance of 8% to 12% [19] Business Line Data and Key Metrics Changes - The North American business grew by 7%, reaching €4.8 billion, while Greater China saw a 15% increase, totaling €2.7 billion [20] - The eCommerce segment experienced a remarkable growth of 34%, approaching €3 billion [20] - Reebok reported a 12% revenue growth in North America, contributing to its overall performance [12] Market Data and Key Metrics Changes - All markets recorded sales growth for the first time since 2016, with double-digit increases in Asia Pacific and emerging markets [27] - Europe returned to growth with a 3% increase, while North America faced challenges due to supply chain issues [31] - Emerging markets grew by 13%, despite geopolitical tensions [32] Company Strategy and Development Direction - The company is focused on driving topline and market share growth while expanding operating margins [8] - Sustainability remains a key priority, with initiatives aimed at ending plastic waste and increasing the use of recycled materials [55][56] - The company plans to leverage major sporting events in 2020 to enhance product activation and consumer engagement [52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth despite supply chain challenges and the impact of the coronavirus [26][82] - The company anticipates a slight decline in gross margin in 2020 but expects to maintain an industry-leading level [42] - The long-term growth story in China remains intact, with expectations of returning to a sustainable growth path post-crisis [82] Other Important Information - The company returned approximately €1.5 billion to shareholders through dividends and share buybacks in 2019 [49] - The equity ratio decreased to 36% due to the implementation of IFRS 16, but the balance sheet remains strong [48] - The company has a robust marketing strategy, maintaining high relative spending in the industry [106] Q&A Session Summary Question: Confidence in clearing inventory in China - Management is confident in clearing inventory through factory outlets, even if it means discounting [96] Question: Management incentives amid coronavirus impact - The Supervisory Board has added market share targets for the China business to management incentives, ensuring appropriate motivation [97] Question: Approach to managing marketing budget - The company plans to maintain its marketing budget but will adjust spending based on market conditions, ensuring investments make sense [106]