Kasper Rorsted’s last appearance in his function as Adidas CEO lasted only a few minutes: a few words of thanks, a little look back at what has been achieved in six years and of course the obligatory congratulations to the successor Björn Gulden, who achieved a “terrific job” – then it was over for Kasper Rorsted.
CFO Harm Ohlmeyer will officially take over on Friday, before 2023 Gulden comes at the start of the year and should provide a breath of fresh air. There was already advance praise on the stock exchange – the Adidas papers have risen by up to 30 percent since the personnel details became known last Friday.
A breath of fresh air is needed
Ohlmeyer showed why a breath of fresh air will be necessary when he presented the Adidas figures for the first nine months of the current year and especially for the third quarter. Net profit collapsed in the period from July to September from 479 to 66 million euros – although sales of 6.4 billion euros were even eleven percent higher than in the same period last year. For the year as a whole, Ohlmeyer expects a profit of around 250 million euros – originally the figure was 500 million euros.
Among other things, Adidas wants to cut back next year in order to get back on track. A savings program is said to have a volume of 700 million euros. Business in China, which was down 27 percent year-on-year in the third quarter, is to be trimmed and realigned. The group will try, for example, to reduce warehousing and close less profitable stores worldwide.
End of partnership with Kanye West
The abrupt end of the partnership with the controversial US rapper Kanye “Ye” West alone tears a gap of up to 250 million euros in annual net profit, said Ohlmeyer. Since the business with the sometimes very high-priced products of the musician (“Yeezy”) will cease in the fourth quarter and this is traditionally particularly strong at the end of the year, Adidas now only expects sales adjusted for currency effects to be in the low single-digit percentage range. In addition, there were other one-off effects that were particularly noticeable this year and totaled EUR 500 million for the year as a whole – including, above all, the farewell to business in Russia.
Adidas is hoping for a sales boost of 400 million euros from the forthcoming World Cup in Qatar. The company has around 100 footballers and a good part of the teams under contract. “I’m really looking forward to the first kick-off,” said Ohlmeyer. “Our products will be omnipresent on the biggest stage in the world.”
On October 20, Adidas had once again lowered its sales and margin forecasts, mainly because of the problems in China and the reluctance to buy as a result of high inflation, and thus sent the share plummeting. A few days later, the company had to end its partnership with Kanye “Ye” West, among other things because of anti-Semitic statements by the US rapper.
