Adidas Stands in Solidarity with Ukraine While Projecting Continued Growth
- Adidas expects €250m sales hit due to Russia conflict
- Currency-neutral revenues increased by 16% in FY21
- Operating profit surged 166% to €1.986bn (£1.65bn) in FY21
- Net income from continuing operations increased by 223%
- E-commerce revenues grew 4%
- Challenging market environment in Greater China and Covid-19 lockdowns reduced revenue growth by more than €1.5bn (£1.25bn)
- Double-digit growth expected to continue in FY22 amid pandemic recovery
- Product pipeline currency-neutral revenues projected to increase 11-13%
- Revenues expected to grow in all markets
Adidas has reported that the war in Ukraine is expected to risk up to €250m (£208.37m) sales in its Russia/CIS business in FY22, representing approximately 50% of adidas’ total revenues in the region. Despite external factors impacting both demand and supply throughout the year, Adidas’ currency-neutral revenues increased year-on-year by 16% in FY21 from €18.43bn (£15.36bn) to €21.23bn (£17.69bn). The company witnessed growth across all markets. Adidas’ operating profit surged 166% to €1.986bn (£1.65bn) in FY21, compared to €746m (£621.77m) in FY20, due to an improved gross margin and lower operating expenses. Additionally, net income from continuing operations increased year-on-year by 223% from €461m (£384.23m) to €1.49bn (£1.24bn), growing more than €1bn (£833.48m). E-commerce revenues also increased 4% during the year, on top of the company’s growth in FY20 when e-commerce revenues had grown by more than 50%. However, a challenging market environment in Greater China and Covid-19 related lockdowns in Asia-Pacific reduced revenue growth by more than €1.5bn (£1.25bn) during the year. Looking to FY22, Adidas expects double-digit growth to continue amid heightened uncertainty and the recovery from the pandemic in 2021, driven by the execution of its “Own the Game” strategy. Its product pipeline currency-neutral revenues are projected to increase at a rate between 11% and 13%, and revenues are expected to increase in all markets.
Factuality Level: 10
Factuality Justification: The article provides accurate information about Adidas’ financial performance and its expectations for the future, as well as a statement from the CEO regarding the situation in Ukraine.
Noise Level: 2
Noise Justification: The article provides relevant information about Adidas’ financial performance and its expectations for the future, as well as a statement from the CEO regarding the situation in Ukraine. It does not contain any irrelevant or misleading information, nor does it dive into unrelated territories.
Financial Relevance: Yes
Financial Markets Impacted: Adidas’ Russia/CIS business
Financial Rating Justification: The article discusses the impact of the war in Ukraine on Adidas’ sales and financial performance, as well as its expectations for future growth.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the text, but the article discusses the impact of the war in Ukraine on Adidas’ sales in the region.
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