• DEUTSCH

Emerging markets as long-term growth drivers

According to estimates by the United Nations, the global population is projected to grow from currently 6.9 billion to 7.3 billion by the end of 2015 and is estimated to exceed 9 billion by 2050. A large portion of this growth is being driven by emerging economies. Rising employment rates and real incomes as well as a growing middle class are fuelling these economies – and subsequently our industry. Sports participation in countries such as China or India has historically been lower than in industrialised countries. We expect sports participation rates to increase over time with increasing leisure time, investment in infrastructure and the broadening of awareness of the benefits of physical activity. In addition, European and North American sporting goods brands are often seen as highly desirable, easily accessible, affordable luxury goods in emerging markets, which presents an additional growth opportunity.

Women’s segment offers long-term potential

In our opinion, the women’s sports market is one of the most attractive segments in the sporting goods industry, with women accounting for more than a third of total spending on athletic footwear. Our Group still generates the majority of its revenues in men’s and unisex categories. The adidas Group will continue to invest in developing women-specific product offerings in both performance and lifestyle that emphasise female individuality, authenticity and style. Examples today include the adidas Women’s Techfit apparel collection, which was developed in collaboration with the Berlin State Ballet, toning footwear and apparel at Reebok, and a specifically designed series of Burner drivers and irons at TaylorMade for women.

Increasing consumer demand for functional apparel

Consumer demand for functional apparel has increased significantly in recent years as consumers realise the benefits of functional apparel over traditional cotton sportswear. Improved moisture management, superior ease of motion and increased comfort are all factors encouraging consumers to switch to high-performance apparel.

The design and development of functional apparel requires significantly more expertise, product and material research as well as production know-how compared to low-tech apparel. Therefore, only a few companies are able to supply high-end functional apparel. Our resources and our positioning as a sports performance leader enable us to constantly develop innovative products and capitalise on them. In 2010, for example, adidas launched the Terrex Softshell Jacket. Engineered for high-performance comfort on the trail, it combines breathable wind protection with specific fit characteristics that move with the consumer.

Growing popularity of “green” products

Today’s consumers are increasingly aware of the impact their consumption has on the environment. Therefore, they demand more and more products that are environmentally benign. In 2010, the adidas Group continued its efforts to create meaningful product platforms to drive growth in this area. In particular, we focused on the extension of the adidas ”Better Place” programme, for which the first products were introduced globally in 2009. Products and packaging in the programme are designed taking sustainability principles into account, such as broadening the use of recycled materials and monitoring energy use in material and product preparation.

With all adidas Sport Performance categories participating in the programme, the adidas Group is moving forward with ambitious plans in the build-up to the London 2012 Olympic Games see Sustainability. It is our target that 100% of adidas Sport Performance athletic footwear products and 20% of apparel products will have some sustainable content by 2012. Reebok has also been steadily introducing eco-friendly products. In January 2010, Reebok launched the Kids’ Green Easy Collection of toddler and infant footwear. The Kids’ Green Easy collection addresses environmental concerns by utilising recycled raw materials. Our efforts to use environmentally friendly materials in our products are of course not exclusive to these specific programmes and are also used in other categories, albeit to a lesser extent.