No plan to boycott Russia World Cup over spy poisoning: Adidas
The chief executive of German sportswear maker Adidas said on Wednesday (Mar 14) it stood by its sponsorship of this year's football World Cup in Russia, as tensions mount between Moscow and London over the poisoning of an ex-spy on British soil.
Football gear makes up a smaller share of Adidas' fast-growing business than in the past, but the firm remains keen to see the balls it has provided to FIFA since 1970 and the shirts of its sponsored teams adorn TV screens worldwide.
"We do hope that the tournament goes on, because isolation is not the best way to resolution" of tensions with Russia, Kasper Rorsted told journalists at the group's Bavarian headquarters.
"There are hundreds of millions of consumers around the world that are looking forward to a football tournament and want to watch football despite the political situation."
British Prime Minister Theresa May is expected to tell lawmakers Wednesday how her government will retaliate against Russia for its alleged role in the poisoning of ex-spy Sergei Skripal and his daughter Yulia with a nerve agent.
May has said it was "highly likely" that Russia was behind the attack, either directly or because Moscow had "lost control" of the poison.
"How can we go to (President Vladimir) Putin's World Cup now?" the front page of influential tabloid the Daily Mail asked Tuesday.
The British government has so far threatened a boycott by officials and dignitaries, but there are as yet no plans to withdraw the England squad.
If it materialises, a boycott would not harm Adidas' business as much as it might have in the past, with the beautiful game now accounting for around €2.0 billion (US$2.5 billion) of the group's €21.2 billion in sales last year.
"The times are gone when one event can make a huge impact on the overall number," CEO Rorsted said.
EYES ON 2020
Presenting its annual results for 2017, Adidas reported higher profits as its most popular lines sold more and it honed efficiency, putting it on track for more muscular returns in future.
Net profit at the group grew 7.8 per cent to €1.1 billion last year, with sales up almost 15 per cent.
The revenue boost was powered by a 27-per cent surge in currency-adjusted North American sales and a 29-per cent leap in China.
Operating, or underlying profit grew almost 31 per cent, to €2.1 billion.
"We want to have the right balance of growing market share and profitability, that is what we call winning," Rorsted said as he laid out an upgraded profitability goal for 2020.
Adidas aims to boost its operating margin to 11.5 per cent by 2020, from 9.8 per cent last year.
That would put the group on track to hit its upgraded target of average growth between 22 and 24 per cent per year in net profit from continuing operations between 2015 and 2020.
Looking ahead to 2018, Adidas expects currency-adjusted sales to grow around 10 per cent in 2018, combining with efficiency savings to produce an operating profit between 9.0 and 13 per cent higher.
Executives plan to offer investors a dividend of €2.60 per share for 2017, up from €2.00 the previous year.
The group also unveiled plans to further reward shareholders with a €3.0-billion share buyback scheme to run until May 2021, with €1.0 billion of purchases set for this year.