Investor Day HH Global Sales FINAL Adi

Global Sales Strategic Initiatives – Herbert Hainer

adidas Group Investor DayNovember 8, 2010

2adidas Group Investor Day

Global Sales Mission

We want to be ready to strike at

the POS

Get the products onto the feet,

into the hands, in the shopping

bags of the Consumer


Three Distinctive Channels

Wholesale Own Retail eCommerce


Global Sales Strategic Priorities

• Integrated distribution roadmap

• Increase controlled space to >45%

• Three “Attack” markets to generate 50% of sales growth

Greater China

North America

Russia


What is it?

A joint approach in every market for agreed Top 100 cities to identify where we want our brands successfully represented – our blueprint for the future!

Integrated Distribution Roadmap

Why do we need it?

• Provides a joined-up approach to growing our business• Cements the integrity and presence of our brands within a market• Grows market share in underpenetrated affluent cities• Eliminates duplication of effort • Clusters own investment to achieve scale and site excellence


5 Strategic Priority Areas In Global Operations

DELIVER BASICS

PRIORITY 1:

Ensure cost-competitiveness

PRIORITY 2:

Industry-leading product availability

PRIORITY 3:

Faster to POS

PRIORITY 5:

Modernise Group infrastructure

PRIORITY 4:

Support growth battle fields

MAKE A DIFFERENCE


North America Provides Largest Revenue Growth Potential


WIN THE HEARTS AND MINDS

OF HIGH SCHOOL KIDS ON

THE FIELD AND IN THE HALLWAY


Why The High School Consumer?

• 16.3m high school kids

• $16.1bn spending

• 20% industry spend

• 80% higher spending than

college kids

• Influencers and purchasers

of sport and fashion


How To Win The High School Consumer

• Increasing mind share and purchase intent with relevant brand communication

• Creating strong product franchises to increase brand momentum

• Driving sell-thru and market share where it matters


Basketball

Football

SoccerBaseball

Training

Running

7 Million

High School

Athletes

Generation US 2015 Focus Sports


Team Is The Foundation Of Sport


Why:

• $1.5bn industry with big halo

effect

• Direct and authentic for the high

school kid

How:

• Industry-leading team service

engine

• Innovation leadership through

aiT support

• Increased investments in US

sports

Team Is The Foundation Of Sport


Team Strategic Formula

US Sports + SLD = adidas team sports

• Service

• Speed to market

• Seamless organisation


Increasing Mind Share And Purchase Intent

Why:

• Direct correlation to sales and margin growth

How:

• With brand communication that is:

Consistent

Relevant

Irreverent


Establish 3 Key Marketing Pillars Per Year

Why:

• Less complexity

• Sharpened brand focus

• Drives brand momentum

How:

• 3 franchises as focal point per

year

• Aligned global/local focus on

development


adizero F50

- Key Marketing Pillar In 2010

adizero Scorch adizero Sonic






- Key Marketing Pillar In …

... 2011


- Key Marketing Pillar In …

... 2011

Training


- Key Marketing Pillar In…

... 2011adidas Originals


Wholesale Distribution Strategy

Distribution channels 2009

34%

19% 6%

9%

32%

Distribution channels 2015

23%

30% 16%7%

24%

Moderate DeptModerate Dept

Strategic Dept

Strategic Dept

MallMall

Sporting GoodsSporting Goods

Field / Specialty Field / Specialty


Wholesale Distribution Strategy

• Sporting Goods to be the largest

distribution channel in 2011

• Mall to grow at double-digit rate in

2011

• Mall and Sporting Goods will

account for nearly 50% of sales in

2015

• Reductions to the discount channel

headlines the reduction in

Moderate Department Stores


Double-digitgrowth

per annum

Summary

• Consumer: High school kids

• Sports: Team sports

• Marketing: 3 key pillars per year

• Distribution: Wholesale

Focus:

26

27

0

1,000

2,000

3,000

4,000

5,000

6,000

2004 2005 2006 2007 2008 2009 2010

Nu

mb

er o

f fr

an

ch

ise

sto

re

s

0

200

400

600

800

1,000

Sa

les

(€

in

mil

lio

ns

)

Excessive Growth Rates Until 2008

1)1)

2)2)

1) Brand adidas only

2) Total China sales brand adidas

28

Competition intensifiesCompetition intensifies

China Facing Tough Challenges Recently

Marketplace more and more crowded

Local brands gaining market and mind share

Vertical retailers

Local brands eye international expansion

29

adidas GREATER CHINA

CHANGING THE RULES

2010-2011 2014-20152012-2013

TRANSFORMORGANISATION AND

GTM PROCESSES

GAIN BACK

LEADERSHIP

CATCH UPAND ACCELERATE

REVENUE

30

China Consumer More Sophisticated

31

WOMEN‘S TRAINING

B E C O M E

A B R A N D

OF CHOICE

FOR WOMEN

MEN‘S TRAINING

G A I N

LEADERSHIP

BY 2012

RUNNING

G A I N

LEADERSHIP

BY 2015

FOOTBALL BASKETBALL

CHALLENGE

LEADERSHIP

BY 2015

G A I N

LEADERSHIP

BY 2015

HARDWARE

EMBRACE

UNEXPLOITED

OPPORTUNITIES

BEYOND

B U I L D

NEW SOURCE

OF GROWTH

Category Attack In High Tier Cities

32

It’s Time To Unleash Originals

33

We’ve Only Started To Touch The Lower Tier Opportunity

Today: Only 247 cities with

100,000+ MAC population

Today: Only 247 cities with


0

200

400

600

800

1000

1200

1400

1600

1800

2000

Not covered Covered

T7

T6

T5

T4

T1-T3

Our city coverage in 2010Our city coverage in 2010

1700+

~550

34

But Lower Tiers Matter More As China Gains In Wealth

By 2015: 576 cities with


By 2015: 576 cities with


0

200

400

600

800

1000

1200

1400

1600

1800

2000

Not covered Covered

T7

T6

T5

T4

T1-T3

Our city coverage in 2015

(planned)

Our city coverage in 2015

(planned)

850

1400+

35

Store expansion roadmap

• City-by-city footprint plan to match local retail environment• Segmentation to match purchase patterns of high vs. low spenders• Accessible pricing options to complement range • POS increase of 2,500 by 2015

Lower Tier City Expansion

36

BEFORE

AFTER

Leverage Global Retail Expertise

• Targets large-scale turnarounds

• Leverage global expertise and local knowledge

• Rapid feedback

• Model stores to benchmark

37

We Play To Win Commercially

Double-digit

growth per

annum

38

Expand Leadership In Russia

39

adidas Group Market Share In Russia around 60% in 2010

1

32

40

Growth Driven By adidas And Reebok Own Stores

75% of sales through

own retail in 2010

Fully integrated joint

operating model

Over 700 stores in 2010

YTD Sep 2010

comparable store

sales +21%

41

Best Russian Sports Marketing Assets

42

Improved product offering

• Best sellers

• Seasonal offer

• Inventory management

• Pricing

Improve Productivity In Existing Stores

Volume

growth

43

• Drive consumers into the store

• Effective in-store product

communication

• Visual merchandising

Improve Productivity In Existing Stores

Increase Units

Per Transaction

(UPT)

44

Increase Store Base

• Stand-alone stores

• Multi-brand factory outlets

• In existing and new malls

Over 1,000

stores in 2015

45

• Expanding entry price point

offer

• Leading in fitness top price

point ranges

• Focusing on seasonal

products

Highest Growth Coming From Training

Training

=

50% of sales

46

• Outdoor windows

• In-store category call-out

• Drive traffic and conversion

• 350 doors with outdoor

corner in 2011

Become The Leader In Outdoor In Russia

Leading in

Outdoor by 2015

47

Reebok

8%

adidas

15%

Outventure

33%

Other

44%

Other

36%

Outventure

27%

adidas

28%

Reebok

9%

adidas Group outdoor market share23%

2010 2015

37%

Increase Group Market Share By 50% In Outdoor

48

1

32

adidas Group Market Share In Russia Around 70% by 2015

Total market

share to be

around 70%

Investor Day HH Global Sales FINAL Adi

Documents