Our goal as a Group is to lead the sporting goods industry with brands built upon a passion for sports and a sporting lifestyle. Inspired by our heritage, we know that a profound understanding of the consumer and customer is essential to achieving this goal. To anticipate and respond to their needs, we continuously strive to create a culture of innovation, challenging ourselves to break with convention and embrace change. By harnessing this culture, we push the boundaries of products, services and processes to strengthen our competitiveness and maximise the Group’s operational and financial performance. This, in turn, will drive long-term value creation for our shareholders.
Creating shareholder value
Creating value for our shareholders through significant cash flow generation drives our overall decision-making process. Therefore, we are focused on rigorously managing those factors under our control, making strategic choices that will drive sustainable revenue and earnings growth, and ultimately cash flow. For each of our segments, we pursue the avenues for growth which we expect to be most value-enhancing, with particular emphasis on improving profitability. In addition, rigorously managing working capital and optimising our capital structure remain key priorities for us. As always, we are committed to increasing returns to shareholders with above-industry-average share price performance and dividends.
Presentation of Route 2015
In November 2010, the Group unveiled its 2015 strategic business plan named "Route 2015". This plan is the most comprehensive the adidas Group has ever prepared, incorporating all brands, sales channels and Group functions globally.
Based on our strong brands, premium products, extensive global presence and our commitment to innovation and the consumer, we aspire to outperform total market growth (both GDP and sporting goods market) and to grow our bottom line faster than our top line. In addition, the Group plans to lay the foundation for leadership in the sporting goods industry by outgrowing our major competitor over the next five years. The plan aims at growing the revenues of the adidas Group by 45% to 50% currency-neutral from 2010 to 2015. In addition, the Group targets a compounded annual earnings growth rate of 15% and aims to reach an operating margin of 11% sustainably by 2015 at the latest.
Diverse brand portfolio
Consumers want choice. Whether it is the athlete looking for the best possible equipment, or the casual consumer searching for the next fashion trend, we are inspired to develop and create experiences that engage consumers in long-lasting relationships with our brands. To maximise our consumer reach, we have embraced a multi-brand strategy.
This approach allows us to tackle opportunities from several perspectives, as both a mass and a niche player, providing distinct and relevant products to a wide spectrum of consumers. In this way, each brand is able to keep a unique identity and focus on its core competencies, while simultaneously providing our Group with a broad product offering, increasing our leverage in the marketplace.
Investments focused on highest-potential markets and channels
As a Group, we target leading market positions in all markets where we compete. However, we have prioritised our investments based on those markets which offer the best medium- to long-term growth and profitability opportunities. In this respect, we continue to place a considerable emphasis on expanding our activities in the emerging markets, particularly China and Russia, as well as building market share in underpenetrated markets such as the United States.
No matter in which market we operate, we recognise that consumer buying behaviour and the retail landscape are unique. Therefore, to fully exploit market opportunities, we tailor our distribution strategy to present our brands to the consumer in the most impactful way. This is achieved by following a distinctive but coordinated channel approach. To this end, we strive to provide our customers with superior service to secure prime shelf space for our brands, while continuing our commitment to building a strategic competency in own retail and e-commerce.
Creating a flexible supply chain
Speed and agility are key to outpacing the competition. We are committed to meeting the full range of customer and consumer needs by ensuring product availability in the correct size and colour, providing game-changing technical innovations and also the latest high-end fashion product to the highest quality standards. A key strategic priority is to shorten creation and production lead times by continuously improving our infrastructure, processes and systems. By sharing information from point of sale to source and vice versa, we strive to connect and more closely integrate the various elements of our supply chain, to enable quick reaction to changing consumer trends. To this end, we focus on building maximum flexibility. While leveraging the efficiency of common infrastructure and processes, the Group strives to provide tailored solutions for all our business models, be it the wholesale or retail channels, or the performance-oriented or style-oriented businesses.
Leading through innovation
Everyone in the adidas Group is responsible for driving innovation. Therefore, we foster a culture of challenging convention and embracing change, and require all areas of the Group to generate at least one new meaningful innovative improvement per year. In particular, we believe that technological evolution and cutting-edge design in our products are essential to achieving sustainable leadership in our industry. Beyond this, enhancing services for our customers and implementing more efficient and effective internal processes are other areas where our organisation strives to innovate.
Develop a team grounded in our heritage
Our culture is continuously shaped by influences from the past and the present as well as our future aspirations. We perpetuate our founders’ commitment to the athlete/consumer, pride in what we do, quality and love of sport. We win as a team through open communication, collaboration and our shared values found in sport. Therefore, we foster a corporate culture of performance, passion, integrity and diversity by creating a work environment that stimulates innovation, team spirit, and achievement based on strong leadership and employee engagement.
Becoming a sustainable company
Like any global business, the adidas Group must manage wide-ranging commercial and competitive pressure to deliver increased financial returns and growth. At the same time, we are accountable for our employees and have a responsibility towards the workers in our suppliers’ factories and also for the environment. We are committed to striking the balance between shareholder interests and the needs and concerns of employees and workers and the environment, or, in short, to becoming a sustainable company. We report publicly on the steps we take to have a more positive impact on society and the planet.