Adidas Greater China Surrendered Beautiful Financial Performance

Adidas Greater China excluding exchange rate factors, the second quarter sales growth of 30%, the Greater China region as the group's fastest growing market, excluding exchange rate factors, the first half sales growth of 30.2%, sports performance series and sports fashion series become the driving force of growth.

In the global market, the elimination of exchange rate factors benefited from sustained strong growth of Adidas (growth 25%) and Reebok (7% growth), and group sales grew 21%, Western Europe (29% growth) and North America (26% growth) accelerated; Greater China region (30% growth) was the fastest growing regional market, and gross margin increased 0.5 percentage points to 48.8%.

By raising 3.4 percentage points to 9.4%, net income from continuous operations has almost doubled to 291 million euros.

In the second quarter, Adidas Group continued to produce beautiful financial results.

Excluding the exchange rate factor, thanks to the strong growth of Adidas and Reebok, the group's revenue grew by 21%.

In Euro terms, group revenue increased by 13% to 4 billion 422 million euros (2015: 3 billion 907 million euros).

From the brand point of view, thanks to the two digit sales growth of running, football and training series, and the promotion of Adidas Sports Classics and Adidas NEO series, Adidas's brand sales increased by 25%, excluding exchange rate factors.

In addition to the median income growth in Russia / CIS, all regions of Adidas have achieved two digit growth.

Sales growth was particularly strong in key regions such as North America, Greater China and Western Europe, with sales growth of 32%, 30% and 30% respectively.

Reebok gained 7% of its sales growth in the quarter, with two digit growth in Western Europe, Greater China, Russia / CIS and Japan, thanks mainly to the two digit sales growth of classic series and the median digit growth of training and running series.

Driven by the two digit growth of Tyler Mei, sales of Taylor Adidas golf brand increased by 7%.

From a regional perspective, excluding the exchange rate factors, the combined sales of Adidas and Reebok's two brands in the second quarter of 2016 have increased in all regions, with two digit growth in Western Europe, North America, Greater China, Japan and the Middle East, Asia and Africa (MEAA).

Excluding exchange rate factors, it benefited from two digit growth in Britain, Germany, Italy, Poland, France and Spain, and sales in Western Europe increased by 29%.

Sales growth momentum in North America and greater China keeps abreast, excluding the exchange rate factor increased by 26% and 30% respectively.

Russia / CIS region sales growth accelerated, excluding exchange rate factors, an increase of 7%.

Excluding the exchange rate factor, Latin American sales revenue increased by 8%, and achieved two digit growth in the markets of Mexico, Peru, Columbia and Uruguay.

In Japan, sales growth has increased by 21% after excluding exchange rate factors.

Excluding exchange rate factors, sales in the Middle East, Asia and Africa (MEAA) increased by 14%, mainly thanks to the two digit growth in the markets of South Korea, Turkey, Australia, South Africa and Thailand.

In the second quarter, other business revenue increased by 6%.

Sales revenue of other headquarters business has achieved a strong two digit growth. Taylor Adidas golf has achieved a high digit growth rate, partly affected by the decline in sales of Reebok-CCM Hockey.

In the second quarter of 2016,

The gross profit margin of the group increased by 0.5 percentage points to 48.8% (2015: 48.3%).

More favorable pricing, product and channel mix, and Taylor Adidas golf's higher product profits offset the negative impact of exchange rate.

In the second quarter of 2016, other operating expenses of Adidas group increased by 12% to 1 billion 935 million euros (2015: 1 billion 720 million euros).

This is mainly because

Expenditure on market input and operation indirect expenses.

However, the proportion of other operating expenses in sales revenue dropped by 0.3 percentage points to 43.8% (2015: 44%), indicating a strong growth momentum of the group.

Other operating income rose significantly to 159 million euros from 33 million euros in the two quarter of 2015.

This is mainly due to the early termination of the contract with Chelsea football club in the two quarter and the divestiture of Mitchell &Ness business.

The group's operating profit increased by 77% to 414 million euros over the same period of 234 million euros in 2015.

This plates into a 9.4% operating margin, up 3.4 percentage points from 6% in the same period last year.

Group continued operation business net income increased 99% to 291 million euros (2015: 146 million euros).

Net income from shareholders who continued to operate and stop operating net income increased by 99% to 291 million euros, compared with 146 million euros in the same period in 2015.

The share of basic business earnings doubled from 1.45 euros (2015: 0.73 euros) and diluted earnings per share to 96% euros to 1.42 euros (2015: 0.73 euros).

Excluding the exchange rate factor, Adidas Group sales increased by 21% in the first half of 2016, mainly due to Adidas's two digit growth and Reebok's high single digit growth.

In Euro terms, sales grew by 15% to 9 billion 191 million euros (2015: 7 billion 990 million euros).

Excluding exchange rate factors, all regional markets in the group achieved two digit growth except for the median digit growth in the sales of Russia / CIS countries.

Although the exchange rate has negative pressure on sales revenue settled in euros, the gross profit margin of the group increased by 0.4 percentage points to 49.1%, thanks to more appropriate pricing and product mix.

Based on the strong growth trend, other operating expenses of Adidas group accounted for 0.8 percentage points of sales revenue to 42%.

Excluding goodwill impairment losses, operating profit margin increased 2.4 percentage points to 9.8% over the same period last year.

Excluding net loss of goodwill, the net income generated by continuous operations increased by 60% to 641 million euros.

The continuous operation of the business and the business that stopped operation brought about diluted earnings per share, an increase of 65% to 3.13 euros compared with the same period last year.

Based on the strong momentum of brand development and outstanding financial performance in the first half of 2016, Adidas group raised its 2016 annual guidance target.

Excluding the exchange rate factor, Adidas group's sales in 2016 are expected to grow by 16%-19% (previously: around 15%), thanks mainly to the two digit sales growth of other regional markets in addition to the expected median sales growth in Russia / CIS countries.