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Thu, Aug 10, 2006 - Page 10 News List

World Cup helps Adidas' first half sales jump 53%

DPA , HERZOGENAURACH, GERMANY

Europe's leading sporting goods manufacturer Adidas on Tuesday reported a 53 percent increase in turnover in the first half of this year thanks to the World Cup and the consolidation of its former US rival Reebok.

Turnover for the first six months climbed to 4.9 billion euros (US$6.27 billion), Adidas said in a statement released at its Herzogenaurach headquarters.

Without the input from the Reebok segment, turnover would have risen 19 percent to 3.8 billion euros, the company said. First half net income attributable to shareholders rose 32 percent from a year ago to 226 million euros, while second-quarter income was up 20 percent to 82 million euros.

The figures were better than analysts expected, prompting Adidas shares to climb 1.88 percent on the Frankfurt Stock Exchange to 36.35 euros.

"Adidas Group turnover improved across the board, not just in relation to the World Cup," said Christian Schmidt, an analyst with Helaba.

"The Adidas Group had an outstanding first half of 2006 crowned by our strong showing at the World Cup," company chairman and chief executive officer Herbert Hainer said.

Adidas, which paid 3.2 billion euros for Reebok last year in a bid to take on market leader Nike, said it anticipated a mid-single-digit sales decline of Reebok business for this year.

At the end of the second quarter, backlogs for the Reebok brand were down 16 percent over a year ago.

Adidas said it expected that turnover for the whole of this year to increase 40 percent from the 6.6 billion euros recorded last year. Profit was anticipated to rise from 383 million euros to close to 500 million euros, the company said.

"We have a pipeline full of operational initiatives for the remainder of the year, and we are on track for continued success. In light of our strong performance in the first half of the year, we are confident that we will achieve our ambitious full year targets," Hainer said.

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