• DEUTSCH

Green grass retailers

Golf distribution channel. Small golf specialty shops typically located at a golf course.

Gross Domestic Product (GDP)

Market value of all finished goods and services produced within a country in a given period of time.
GDP = consumption + investment + government spending + (exports − imports).

Gross margin

Gross profit as a percentage of net sales.
Gross margin = (gross profit / net sales) × 100.

Gross profit

Difference between net sales and the cost of sales.
Gross profit = net sales – cost of sales.

H

Halo effect

The halo effect refers to the cognitive bias effect that when we consider something good (or bad) in one category, we are likely to make a similar evaluation in other (related) categories.

Hardware

Product category which comprises equipment that is used rather than worn by the athlete, such as bags, balls, fitness equipment, golf clubs and hockey sticks.

Hedging

A strategy used to minimise exposure to changes in prices, interest rates or exchange rates by means of derivative financial instruments (options, swaps, forward contracts, etc.) see also Natural hedges.

I

Institutional investors

Investors such as investment companies, mutual funds, brokerages, insurance companies, pension funds, investment banks and endowment funds. They are financially sophisticated, with a greater knowledge of investment vehicles and risks, and have the means to make large investments.

Interest coverage

Indicates the ability of a company to cover net interest expenses with income before net interest and taxes.
Interest coverage = (income before net interest expense and tax / net interest expense) × 100.

International Financial Reporting Standards (IFRS)

Reporting standards (formerly called IAS) which have been adopted by the International Accounting Standards Board (IASB). The objective is to achieve uniformity and transparency in the accounting principles that are used by businesses and other organisations for financial reporting around the world.

International Labour Organization

The International Labour Organization (ILO) is a specialised agency of the United Nations that engages in formulating and implementing international social and workplace standards and guidelines see also www.ilo.org.

ISO 14001

International Organization for Standardization (ISO) Standard 14001 specifies the requirements for an environmental management system within companies/organisations. It applies to those environmental aspects over which the organisation has control and over which it can be expected to have an influence (e.g. energy and water consumption).

J

Joint venture

A cooperation between companies involving the foundation of a new, legally independent business entity in which the founding companies (two or more companies) participate with equity and significant resources.

K

Key accounts

Wholesalers or retailers which are primary customers for the Group and account for a large percentage of sales.

Kicks

Informal word for athletic footwear.

Kinesiology

The science of the psychological mechanisms associated with human movement.

L

Leather Working Group

The Leather Working Group (LWG) was formed in April 2005 to promote sustainable and appropriate environmental stewardship practices within the leather industry see also www.leatherworkinggroup.com.

Licensed apparel

Apparel products which are produced and marketed under a licence agreement. The adidas Group has licence agreements with sports organisations (e.g. FIFA, UEFA, IOC), sports leagues (e.g. NFL, NBA), professional teams (e.g. Real Madrid, AC Milan) and universities (e.g. UCLA, Notre Dame).

Lien

The right to take and hold or sell the asset of a debtor as security or payment for a debt.

Liquidity I, II, III

The liquidity ratio indicates how quickly a company can liquidate its assets to pay for current liabilities.
Liquidity I:
((Cash + short-term financial assets) / current liabilities) × 100.
Liquidity II:
((Cash + short-term financial assets + accounts receivable) / current liabilities) × 100.
Liquidity III:
((Cash + short-term financial assets + accounts receivable + inventories) / current liabilities) × 100.

M

Market capitalisation

Total market value of all shares outstanding.
Market capitalisation = number of shares outstanding × current market price.

Marketing working budget (MWB)

Promotion and communication spending including sponsorship contracts with teams and individual athletes, as well as advertising, retail support, events and other communication activities, but excluding marketing overhead expenses. As MWB expenses are not distribution channel-specific, they are not allocated to the Group’s operating segments.

Mono-branded stores

adidas, Reebok or Rockport branded stores not operated or owned by the adidas Group but by franchise partners. This concept is used especially in the emerging markets such as China, benefiting from local expertise of the respective franchise partners see also Franchising.