group study presentation anke bernards, stephanie diller, andrea hanisch

ADIDAS - NIKE

Group Study PresentationAnke Bernards, Stephanie Diller, Andrea Hanisch

Clive’s Comments

Good introduction Try to avoid just reading. Use slides as

prompts. Perhaps practice a little more before presentation.

Excellent graph on efficiency. Perhaps an industry line of graphs so as

to make comparison to the industry. Great SWOT and conclusions Great sustainability summary

STRUCTURE

I. How we chose the companys II. History, Trends and recent newsIII. Financial Analysis:

Liquidity, Profitability, Efficiency, DuPontIV. Stock chart and price trendsV. Conclusion Financial DataVI. Swot AnalysisVII. Overall Conclusion

I. HOW WE CHOSE THE COMPANIES

Sport Apparel & Accessories

I. HOW WE CHOSE THE COMPANYS

http://www.youtube.com/watch?v=8TnG7jyfoWI

I. HISTORY, TRENDS AND RECENT NEWS

NKE Competitors

Overall Information: Foundend: 1924 in Germany Type: Aktiengesellschaft Industry:Clothing and consumer goods manufacture

Area Served: Worldwide Products: Footwear, sportswear, sports equipment,

toiletries

Recent News: In 2006 Adidas announced 11-year deal to become official NBA apparel provider Adidas provided official soccer balls for 2006 and 2010 World Cups Official provider for English and South African Cricket teams

I. HISTORY, TRENDS AND RECENT NEWS

I. HISTORY, TRENDS AND RECENT NEWS

Overall Information: Founded: 1964 in the US Type: Public Company Industry: Clothing and Sports equipment

Area Served: Worldwide Products: Athletic shoes, Apparel, Sports equipment, Accessories

Recent News:

The 2010 Nike Pro Combat jersey collection is worn by teams from universities throughout America Newest Nike products contain Flywire and Lunarlite Foam to reduce weight Release of Nike + Sports Band Sweatshop Issue: since 2002, great improvement in working conditions, health care, environmental issues, and allowance of random factory inspections

I. HISTORY, TRENDS AND RECENT NEWS

Nike

Goal for 2015:turnover gain of 40% (20 billion €)

Targeting of the emerging global middle class• Expansion of affiliated brands overseas • Greater focus on apparel• Introduction of new technologies like Hyperfuse

I. HISTORY, TRENDS AND RECENT NEWS

Adidas

Focus on expansion of Russian market (as well as China and North America)

Goal for 2015: increase total revenue of last year (12 billion €) 45-50% (17 billion €) 2012: European Championship Soccer in Poland/Ukraine 2014: Winter Olympics in Russia 2018: World Championship Soccer in Russia

II. FINANCIAL ANALYSIS: LIQUIDITYKey Ratio: Net Working Capital

2007 2008 2009 20100

1000

2000

3000

4000

5000

6000

4119.754138.5

4842.75

5696.25

15221290

16491972

Working capital NikeWorking capital Adidas

II. FINANCIAL ANALYSIS: LIQUIDITY

Key Ratio: Long Term Debt Ratio

2007 2008 2009 20100.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

5.84%5.64% 5.03%

4.57%

58.42%

64.64%

24.17%

4.78%

Long Term Debt Ratio NikeLong Term Debt Ratio Adidas

INDUSTRY 10,58%

II. FINANCIAL ANALYSIS: EFFICIENCY

Key Ratio: Total Asset Turnover

2007 2008 2009 20100.000.200.400.600.801.001.201.401.601.80

1.53 1.50 1.45

1.32

1.23 1.21 1.13 1.23

Total asset turnover Nike

Total asset turnover Adidas

Industry: 0,56

II. FINANCIAL ANALYSIS: EFFICIENCY

Key Ratio: Inventory Turnover

2007 2008 2009 20100

1

2

3

4

5

4.4 4.5 4.4

4.6

3.3 3.1 3.3

3.5Inventory turns NikeInventory turns Adidas

Industry 1,76

II. FINANCIAL ANALYSIS: PROFITABILITY

Key Ratio: ROA

2007 2008 2009 20100.0%

5.0%

10.0%

15.0%

20.0%

25.0%

14.5% 16.3% 11.6%13.8%

19.6%19.0%

8.1%

15.2%Return on assets Nike

Return on assets Adidas

Industry 4,39%

II. FINANCIAL ANALYSIS: PROFITABILITY

Key Ratio: Gross Profit Margin

2007 2008 2009 201041

43

45

47

49

43.78

45.8244.9

46.3

47.4

48.7

45.4

47.89

Gross margin Nike

Gross margin Adidas

Industry 17,55

II. FINANCIAL ANALYSIS: DUPONT

2007 2008 2009 20100.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

22.40% 24.50%

18.00%20.70%

18.20% 18.90%

6.50%

12.30%

Return on equity Nike

Industry 7,36

III. STOCK CHART AND PRICE TRENDS

5 year chart

2007 2008 2009 2010

Basic earning per common share

2,71 € 3,25 € 1,25 € 2,71 €

III. STOCK CHART AND PRICE TRENDS

2007 2008 2009 2010

Basic earning per common share

2,96 $ 3,8 $ 3,07 $ 3,93 $

5 year chart

CONCLUSIONS – FINANCIAL DATA

SWOT

Opportunites- Emerging markets

- Innovative products- Rise in number of women

athletes

Threats- Intense competition- High dependency on

oversea production- Foreign Exchange risk

StrengthBrand equity, global

presence, product, quality

WeaknessesCurrency exposure,

decreasing market in US

Strategy 1. Achieve economies of scale in

manufacturing2. Continue with product innovation

3. Focus on online/retail4.Improve financial controls for better

cash turnovers5. Social activities to strengthen

brand image6. Focus on women athletes products

SWOT Opportunites

Joint Venture of Adidas with Stella McCartney-plans to outscore e-

commerce

Threats- Intense competition- Faking of products

- Sponsored athletes are reflecting negative image

(i.e. Kobe Bryant)

Strength- Biggest sponsor of sport

events - -Brand recognition

- - Obeying environmental laws

Weaknesses- High prices

- Web booking only in US

Strategy

1. Growth strategy -> Russia, China, North America2. Product innovations

3. Concentrating on soccer world championships

CONCLUSIONS – SUSTAINABILITY

• Sustainability Statement: Performance, Passion, Integrity, Diversity• Environmental Strategy 2015• Supply Chain standards • Materials: Sustainable, recycled,Organic cotton

• Closed-Loop Business Model

• Focus on key policy issues of climate change, sustainable materials and product and post-consumer waste

THE ENDThanks for your attention!