Creating the New
adidas increases sales and earnings guidance until 2020.
Following an exceptionally successful 2016 financial year, adidas is significantly increasing its long-term guidance. The company intends to strongly accelerate sales and earnings growth until 2020 as part of its long-term strategic business plan, ‘Creating the New’. adidas announced this update on the occasion of annual results presentation. The company now expects currency-neutral sales to increase at a rate between 10% and 12% on average per year between 2015 and 2020 (previously: to increase at a high-single-digit rate). Net income from continuing operations is projected to grow between 20% and 22% on average per year in the five-year period (previously: to increase by around 15% on average).
«Our 2016 results and our positive outlook for 2017 are proof that our strategy is paying off. After the first full year of ‘Creating the New’, we have exceeded our original plan,» said Kasper Rorsted, CEO of adidas AG. «Now we have developed additional initiatives which will accelerate the execution of ‘Creating the New’ and enable us to significantly increase our targets for 2020.»
The focus of adidas’ strategy ‘Creating the New’, which was presented in March 2015, remains on significantly elevating brand desirability and thus achieving strong improvements in sales and profitability. ‘Creating the New’ is based on the three strategic pillars Speed, Cities and Open Source, with which the company has made significant progress in the past two years. As part of the plan to accelerate sales and earnings growth, these three strategic pillars have now been supplemented with a special focus on the topics Corporate Culture, Digital, One adidas, North America and Portfolio.
Further developing adidas’ unique culture plays a central role for the company in achieving its long-term goals until 2020. The company’s culture is based on the core belief that, through sport, all adidas employees have the power to change lives. As part of the accelerated growth plan until 2020, adidas is focusing its HR initiatives on leadership, talent development and performance management.
A group consisting of 18 top leaders across the most important geographies and functions has already been set up, with an expanded leadership team to be established in the first quarter of 2017. adidas intends to promote the development of talents as future leaders, in particular also female talents, in a ‘high-potentials’ circle within the company. Long-term remuneration for senior executives will be linked to the development of the share price, in order to align the interests of the company’s senior leaders with the interests of adidas AG shareholders.