• DEUTSCH

N

Natural hedges

Offset of currency risks that occurs naturally as a result of a company’s normal operations, without the use of derivatives. For example, revenue received in a foreign currency and used to pay known commitments in the same foreign currency.

Net borrowings

Portion of gross borrowings not covered by the sum of cash and short-term financial assets. If a negative figure is shown, this indicates a net cash position.
Net borrowings = short-term borrowings + long-term borrowings – cash – short-term financial assets.

Non-controlling interests

Part of net income which is not attributable to the reporting company as it relates to outside ownership interests in subsidiaries that are consolidated with the parent company for financial reporting purposes.

O

OHSAS 18000

OHSAS 18000 is an international occupational health and safety management system specification.

ÖKO-Tex Standard 100

An international testing and certification system for textiles, defining and limiting the use of certain chemicals.

Operating lease

Method of leasing assets over periods less than the expected lifetime of those assets. An operating lease is accounted for by the lessee without showing an asset or a liability on his balance sheet. Periodic payments are accounted for by the lessee as operating expenses for the period.

Operating overheads

Expenses which are not directly attributable to the products or services sold, such as costs for sales, marketing overhead costs, logistics, research and development, as well as general and administrative costs, but not including costs for promotion, advertising and communication.

Operating profit

Profit from operating activities after cost of sales and other operating expenses.
Operating profit = gross profit + royalty and commission income + other operating income – sales working budget – marketing working budget – operating overheads.

Operating working capital

Company’s short-term disposable capital which is used to finance its day-to-day business. In comparison to working capital, operating working capital does not include non-operational items such as cash, financial assets and taxes.
Operating working capital = accounts receivable + inventories – accounts payable
see also Working capital.

Option

Financial instrument which ensures the right to purchase (call option) or to sell (put option) a particular asset (e.g. shares or foreign exchange) at a predetermined price (strike price) on or before a specific date.

P

Performance business

In the sporting goods industry, business related to technical footwear and apparel, used primarily in doing sports.

Price-earnings ratio (P/E)

A company’s share price divided by its current or future diluted earnings per share. The P/E ratio is used by investors as a fundamental measure of the attractiveness of a particular security versus other securities or the overall market. It is usually more useful to compare P/E ratios of one company to other companies in a similar industry. In general, a high P/E ratio suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E.

Price points

Specific selling prices, normally using “psychological” numbers, for example a product price of US $ 99.99 instead of US $ 100.

Private investor

Individual who invests his/her own money in the capital market, as opposed to an institutional investor.

Private placement

Placement of debt securities directly to institutional investors, such as banks, mutual funds, insurance companies, pension funds and foundations.

Product licensees

Companies that have the authorisation to use the name of a brand or business for the production and sale of products. For adidas, licensed products include cosmetics, watches and eyewear, for Reebok, fitness equipment and for TaylorMade-adidas Golf, bags and gloves.

Promotion partnerships

Partnerships with events, associations, leagues, clubs and individual athletes. In exchange for the services of promoting the adidas Group, the party is provided with cash and/or promotional material.

Push-pull model

A push-pull system in the retail business describes the supply and demand dynamic between retailers and consumers. Under the push model, products are supplied based on anticipated customer orders (speculative) whereas in a pull model system goods are supplied based on consumer point-of-sale demands and actual market sales trends.

R

Regions

The adidas Group distinguishes seventeen markets which are aggregated into six regions: Western Europe, European Emerging Markets, North America, Greater China, Other Asian Markets and Latin America.

Return on capital employed (ROCE)

Measure of the returns that a company is realising from its capital.
ROCE = (income before taxes + financial result ) / (average of shareholders’ equity + non-controlling interests + total net borrowings) × 100.

Return on equity (ROE)

Indicator of company profitability related to the shareholders’ financing.
ROE = (net income / shareholders’ equity) × 100.

Risk-free rate

Rate of return to be expected on a risk-less investment, e.g. government bonds.

Risk premium

Extra return that the overall market or a particular stock must provide over the risk-free rate to compensate an investor for taking a relatively higher risk.
Risk premium = market risk – risk-free rate.