• 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 OVERHEADS INCREASE AS A PERCENTAGE OF SALES
Group operating overheads include overhead costs related to marketing, sales, logistics, research and development as well as central finance and administration functions. Operating overhead expenses as a percentage of sales increased 2.2 percentage points to 26.0 % in 2007 from 23.8 % in the prior year. This was primarily a result of higher own-retail expenditures, which increased in line with the expansion of the Group’s own-retail activities. Central finance and administration expenses also grew overproportionately due to integration expenses in the Group’s Headquarter functions. However, research and development expenditure decreased as a result of the combination of certain adidas and Reebok research capabilities.  see Research and Development

EBITDA UP 8 %
The Group’s earnings before interest, taxes, depreciation and amortization of tangible and intangible assets (EBITDA) increased 8 % to € 1.165 billion in 2007 ( 2006: € 1.078 billion). Depreciation and amortization expense for tangible and intangible assets with limited useful lives grew 1 % to € 211 million in 2007 (2006: € 209 million). In accordance with International Financial Reporting Standards, intangible assets with unlimited useful lives (goodwill and trademarks) are tested annually and additionally when there are indications of potential impairment. No impairment of intangible assets was incurred in 2007 and 2006.

OPERATING MARGIN REACHES 9.2 %
The operating margin of the adidas Group increased 0.5 percentage points to 9.2 % in 2007 (2006: 8.7 %). This development was in line with initial Management expectations of an operating margin around 9 %. The operating margin increase is a result of the Group’s gross margin improvement, which more than offset higher operating expenses as a percentage of sales. As a result, Group operating profit increased 8 % in 2007 to reach € 949 million versus € 881 million in 2006.

 

EBITDA € in millions
1)	Adjusted to reflect the application of IAS 32.
2)	Figures reflect continuing operations as a result of the divestiture of the Salomon business segment.
3)	Including Reebok business segment from February 1, 2006 onwards. Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.

 

OPERATING MARGIN in %
1)	Excluding royalty and commission income as well as goodwill amortization.
2)	Figures reflect continuing operations as a result of the divestiture of the Salomon business segment.
3)	Including Reebok business segment from February 1, 2006 onwards. Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.

 

OPERATING PROFIT € in millions
1)	Excluding royalty and commission income as well as goodwill amortization.
2)	Figures reflect continuing operations as a result of the divestiture of the Salomon business segment.
3)	Including Reebok business segment from February 1, 2006 onwards. Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.

 

OPERATING PROFIT BY QUARTER1) € 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.