1. Business and Financial Review of “adidas”
1st Jan 2011 to 31st Dec 2013
Presenter: Abdul Majid
This presentation was delivered to my mentor and fellow students
during Research and Analysis Project!!!
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2. Over view:
• Introduction to the company
• Financial Review using Ratio Analysis
• SWOT Findings
• PESTLE Scanning Outcomes
• Conclusion
• Q & A
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3. Introduction to the company
• Incorporated in 1949 by Adolf Dassler
• 1954 German football team wins world cup wearing adidas stud shoes (First international
recognition)
• 1992 major change in management helped recover from bankruptcy
• Pallet of subsidiaries E.g. Reebok, Taylor made and Rockport
• Sponsor of major sporting events E.g. London Olympics 2012 and FIFA World cup 2014
• Major markets include America, Europe Russia and Greater China
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4. Financial Review using Ratio Analysis
Profitability Ratios
• ROCE
• Gross Profit Margin
• Net Profit Margin
Efficiency Ratios
• Inventory days
• Receivable days
Liquidity Ratios
• Current Ratio
• Liquid Ratio
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5. Profitability Ratios
2013 2012 2011
adidas 49.3% 47.7% 47.5%
Nike 43.6% 43.5% 45.7%
40.0%
41.0%
42.0%
43.0%
44.0%
45.0%
46.0%
47.0%
48.0%
49.0%
50.0%
PercentagePoints
Gross profit margin
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Figure 1: Return on Capital Employed,
Source: Appendix A
Figure 2: Gross Profit Margin
Source: Appendix A
2013 2012 2011
adidas 17.5% 12.6% 13.8%
Nike 23.8% 26.6% 25.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Percentagepoints
Return on capital employed

6. Profitability Ratios
2013 2012 2011
adidas 8.3% 6.2% 7.2%
Nike 12.9% 13.2% 14.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Percentagepoints
Net profit margin
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Figure 3: Net profit margin, Source: Appendix A

7. Efficiency Ratios
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Figure 4: Inventory days, Source: Appendix A Figure 5: Accounts Receivable Days,
Source: Appendix A
2013 2012 2011
adidas 130.8 116.6 130.6
Nike 87.8 89.2 90.8
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
Numberofdays
Inventory days
2013 2012 2011
adidas 45.6 41.4 43.7
Nike 44.9 49.0 56.9
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Numberofdays
Accounts Receivable days

8. Liquidity Ratios
2013 2012 2011
adidas 1.4 1.6 1.5
Nike 3.5 3.1 2.9
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Current Ratio
2013 2012 2011
adidas 0.9 1.0 0.9
Nike 2.6 2.2 2.2
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Numberoftimes
Liquid Ratio
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Figure 6: Current Ratio, Source: Appendix A Figure 7: Liquid Ratio, Source: Appendix A

9. SWOT Findings
Financially sound and strong
Recognised brand
Popularity with customers
Diversified product portfolio
Strong competitor
Worldwide presence
Negative publicity
High prices
High manufacturing costs
Strengths Weaknesses
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10. SWOT Findings
New markets
Target Women
E-commerce
Advertisement and Marketing
Rising wages
Adverse foreign exchange rates
Competitors and low barriers to
entry
Opportunities Threats
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11. PESTLE Analysis Outcomes
Changing power in Asian Countries
Local Govt. Interests
Political situation in Russia
Currency Exchange Losses
GSP Plus Status and EU
Uncertain Market Movement
Political Factors Economic Factors
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12. PESTLE Analysis Outcomes
Changing Trends and Fashion
Brand Ambassadors
HR Policy and Health and Safety
Keeping up with Technological
Revolution
Supply Chain Management
ERPs and Integration Tools
Socio-Cultural Factors Technological Factors
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13. PESTLE Analysis Outcomes
Law Suits for Patent Infringements
Minimum Wage and Taxes
Protection against Trademarks
Negative Environmental footprint
Focus On Sustainability
Environment Friendly Processes
Legal Factors Environmental Factors
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14. Conclusion
• Ambitious and Determined
• Financially Strong
• Solid competitor
• Aware of SWOT
• Microscopic eye on Macro-Environment
• In for a longer run
• ”Impossible is Nothing” and “For the Love of Sport”
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15. Thank you for attending presentation!
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16. Q & A
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