• Group Business Performance 
  • Economic and Sector Development 
  • Income Statement 
  • Balance Sheet and Cash Flow Statement 
  • Treasury 
  • Additional Disclosures 
• Business Performance by Segments 
• Risk and Opportunity Report 
• Subsequent Events 
• Outlook 

OPERATING EXPENSES € in millions
1)	Figures reflect continuing operations as a result of the divestiture of the Salomon business segment.
2)	Including Reebok business segment from February 1, 2006 onwards. Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.

 

OPERATING EXPENSES in % of net sales
1)	Figures reflect continuing operations as a result of the divestiture of the Salomon business segment.
2)	Including Reebok business segment from February 1, 2006 onwards. Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.

HIGHER EXPENSES AT REEBOK DRIVE OPERATING EXPENSE INCREASE
Operating expenses include marketing working budget and operating overhead costs as well as depreciation and amortization. Operating expenses as a percentage of sales increased by 2.5 percentage points to 39.2 % in 2007 from 36.7 % in 2006. This increase primarily reflects one-time costs related to the integration of Reebok into the adidas Group as well as higher expenses in the Reebok segment for advertising, product development and initiatives to grow the brand in emerging markets. In absolute terms, operating expenses for the adidas Group increased by 9 % to € 4.035 billion in 2007 from € 3.704 billion in the prior year.

MARKETING WORKING BUDGET INCREASES AS A PERCENTAGE OF SALES
Almost half of our Group’s marketing working budget is variable to increase the flexibility of our Group. The variable portion primarily includes expenses for advertising, retail presentation and public relations, whereas the fixed portion consists mainly of expenses for promotion partnerships. Marketing working budget as a percentage of sales increased 0.5 percentage points to 13.4 % in 2007 (2006: 12.9 %). adidas marketing working budget as a percentage of sales remained stable. Reebok’s marketing working budget as a percentage of sales increased to support the revitalization of the brand. However, Reebok’s marketing working budget continues to be below the Group average. Marketing expenditure as a percentage of sales at TaylorMade-adidas Golf grew compared to the prior year as a result of the divestiture of the GNC wholesale business, which had lower marketing expenditures as a percentage of sales.

 

OPERATING EXPENSES BY FUNCTION € in millions
1)	Including Reebok business segment from February 1, 2006 onwards. Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.

 

MARKETING WORKING BUDGET in % of net sales
1)	Figures reflect continuing operations as a result of the divestiture of the Salomon business segment.
2)	Including Reebok business segment from February 1, 2006 onwards. Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.