Adidas Sees Results Hit from Emerging Market Currencies
Sportswear company Adidas said that recent volatility in emerging market (EM) currencies such as the Russian ruble (RUB) and Argentine peso (ARS) will dent its results and could also undermine 2015 growth targets despite the positive impact of the upcoming World Cup soccer tournament in Brazil.
At the German company’s briefing, chief financial officer (CFO) Robin Stalker said EM currency weakness took around €750m from its top-line result in 2013, and the pressures are continuing into this year.
More recently Adidas’ share price has fallen on investor concerns over Ukrainian-Russian tensions, with EMs such as Russia factoring heavily in the company’s growth plans.
At the briefing, chief executive officer (CEO), Herbert Hainer noted, said that weakness in the RUB since the start of 2014 and the uncertainty in the Ukraine has added ‘considerable risk’ to the company’s results, although he remained optimistic on its long-term strategic goals.
Adidas is midway through a five-year plan to increase annual sales to €17bn and achieve an operating profit margin of 11% by 2015. In December, Hainer admitted that the plan was some way short of the more optimistic projections, due in part to a weak market in Europe and currency effects due to the stronger euro.