Adidas counting on Fifa World Cup to boost 2014 profits
Adidas, the German maker of sportswear and equipment, said on Wednesday it is counting on the World Cup football championships in Brazil to boost sales and earnings this year.
"From an operational perspective, there is no doubt that 2014 will be a successful year for us," said chief executive Herbert Hainer, as the group set a profit target of between 830 million and 930 million euros (1.14 billion and 1.28 billion) for the year.
"Driven by our dominant role at the 2014 Fifa World Cup, we will generate high-single-digit currency-neutral growth," Hainer predicted.
But he cautioned: "Currency headwinds had a significant negative impact on our results in euro terms, and this is also expected to continue in 2014."
In 2013, Adidas insisted that it succeeded in meeting all of its targets.
"We finished 2013 with an exceptionally strong fourth quarter. Currency — neutral sales grew 12 per cent, which was above our expectations," said Hainer.
"This ensured that we met our revised full year targets from September, despite a further worsening of currency exchange rates."
Adidas said its bottom-line profit for the whole year soared 49 per cent to 787 million euros.
Sales, on the other hand, slipped by 2.6 per cent to 14.49 billion euros, largely due to currency effects.
In November, Adidas extended its long-standing sponsorship agreement with the Fifa World Cup tournament until 2030.
The championships are being held in Brazil this year and in Russia in 2018.
"In particular, this year's major sporting events will provide positive stimulus to group sales. As the official partner of the 2014 Fifa World Cup in Brazil, the Adidas brand will be the most visible brand during the event and will benefit from record sales in the football category," the group said.
Sales would also be favourably impacted by Adidas's high exposure to fast-growing emerging markets, the group said.
Hainer said Adidas is to pay an increased dividend of 1.50 euros per share for 2013, up from 1.35 euros a year earlier.
Investors did not appear to be particularly impressed, however, and Adidas shares were showing a loss of 0.56 per cent in late morning trade on the Frankfurt stock exchange in a slightly softer market.