Name: Nguyen Hai Nam Student ID No: 12413098
Accounting IIEA Prof: Pardo Phillip Dean
Submission Date: Sat 24th May, 2014
1
10K Report for Financial Accounting
Company:Adidas AG
ID No: ADDYY
Name of CEO:
Herbert Hainer
Location of home office:
Herzogenaurach, Germany
Ending date of latest fiscal year:
December 31, 2013
Main Geographic Area of Activity:
Worldwide, especially Europe (Germany in particular) and the US
Name of Independent Auditors:
KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin
Most Recent Price of the Company’s Stock:
$53.500 (as of May 16th 2013)
Dividend per share/date:
2014
2013
2012
0.741
0.632
0.456
Company’s Background:
Adidas AG was founded in 1948 by Adolf Dassler. The company was actually
split from Puma, which was founded by Rudolf- Adolf Dassler’s older brother. In its
early years of foundation, Adidas AG and Puma have become primary rivals of each
other. In 1994, the company combined with FIFA Youth Group. In 1997, Salomon
Group, who specialized in ski wear, was acquired by Adidas AG, leading to the change
of its official corporation’s name to Adidas– Salomon AG. Additionally, Adidas AG also
acquired Taylormade Golf and Maxfli, contributing to their competition with Nike Golf.
On May 3th 2005, Adidas AG sold their partner company Salomon Group to
Amer Sports in Finland. In August 2005, Adidas AG intended to buy Reebok for $3.8
Billion. The acquisition of Reebok has one more time promoted the competition
between the two largest shoemakers in the world: Nike and Adidas AG.
Up to now, Adidas AG has a lot of business branches in Hong Kong, Toronto,
Taiwan, England, Japan, Australia, Spain … At the moment, Adidas AG is the largest
sportswear manufacturer in Germany and Europe and the second biggest sportswear
manufacturer in the world (after Nike).
At the end of year 2012 and 2013, Adidas AG has marked a noticeably high
revenue report.
Name: Nguyen Hai Nam Student ID No: 12413098
Accounting IIEA Prof: Pardo Phillip Dean
Submission Date: Sat 24th May, 2014
2
Management Letter:
Adidas Group (whose member is Adidas AG) is always competitive, always
playing in the “sporting goods industry’s Champion League”. The company put its
whole entire dedication and brainpower into its missions of making Adidas Group the
global leader in the sporting goods industry. The company’s main aim is to create as
much value for its shareholders as possible.
Adidas Group strives to be the global leader in the sporting industry as they
want to help athletes best gain achievements in their careers. Adidas AG want to
ensure that consumers are always be provided with desirable brands, satisfactory
products and responsible services.
The complex operation of the company can be seen through the following
numbers: Adidas Group has more than 50700 employees in over 160 countries,
manufactures more than 650 million product units every year, reach sales of 14.5
billion euros.For such a globally operating company of this size, it is not always easy to
create value for all shareholders. However, Adidas AG will try their best on their
strategy.
One of the most noticeable features of Adidas AG is its various brand portfolio.
Adidas AG always prioritizes multi-brand strategy, which means providing satisfactory
products to every individual, putting the greatest effort into reaching a wide spectrum
of consumers and effectively adjusting to the new trends.
In terms of new trends, Adidas AG realizes that consumers’ trends are changing
quickly these days. Therefore, the problem is not only about identifying trends but also
flexibly adapting to them. In their supply chain, speed and agility are key points to
outpacing the competition. Hence, one of the key strategic priorities is to shorten
creation and production lead times by continuously improving the infrastructure,
processes and systems. In other words, connecting and integrating all elements of
their supply chain more effectively helps promptly react to the latest consumers’
trends. The company is training hard to better their flexibility by providing tailored
solutions for their business model (both retails and wholesales channels).
Review Company’s Products and Services:
Adidas AG’s products vary in different sports: running, football, tennis, golf,
cricket, baseball, rugby, basketball, gymnastics, skateboarding and other accessories.
Let’s have a closer look at three of the company’s major fields:
1. Football
Football equipment (especially shoes) is one of the most Adidas AG’s
concentrated products. The company is currently responsible for many football clubs’
team kits around the world. In details, Adidas owns 9.1% of Bayern Munich, currently
deals with the German national team and Bundesliga clubs Schalke, Hamburg, Bayer
Name: Nguyen Hai Nam Student ID No: 12413098
Accounting IIEA Prof: Pardo Phillip Dean
Submission Date: Sat 24th May, 2014
Leverkusen, Nuremberg, and Wolfsburg. Many team kits are also traded with different
clubs outside Germany such as Real Madrid, Fulham, Chelsea, Milan, Ajax, Marseille,
Lyon, Benfica, FC Bartizan Belgrade, Feirense, Southampton, and national teams such
as Spain, Argentina, Mexico, Wales, Denmark, Sweden, and Finland. Besides football
clubs, Adidas AG also has many business contracts with footballers: Raul Gonzalez,
IkerCasillas, Nani, Frank Lampard, ArjenRobben, Juan Mata, Thomas Muller, Kaka, Xabi
Alonso, David Villa, Karim Benzema, Lionel Messi, Jose Mourinho, Phillip Lahm, Gareth
Bale, Fernando Torres …
2. Running
Adidas AG is currently manufacturing several familiar and worldwide used
shoes samples, which consists of adiStar Salvation 3, the adiStar Ride 3, the Supernova
Sequence 4, and the Supernova Glide 5…
3. Tennis
At the moment, Adidas AG is sponsoring numerous professional players with
various clothing and footwear: Ivanovic, Andy Murray, Fernando Verdasco, Gilles
Simon, Fernando Gozalez…
The company also provides certain services to tennis players. For instance,
players sponsored by Adidas AG may be supplied with professional coaches, fitness
