Adidas' shares, whose value rose by 9 percent last year, in contrast with market trends, is becoming more attractive, especially in the U.S. According to the company's annual report, the total number of shareholders in the group increased to around 80,000 in 2018 from 70,000 in the previous year. Among institutional investors, 43 percent of the shares were held by companies based in North America, up from 40 percent in 2017.
The group's suppliers produced about 409 million pairs of shoes last year, just three million pairs more than in 2017, and 92 percent of the volume came from 11 strategic manufacturing partners. Vietnam was the main country of origin, with 42 percent of the total volume, down from 44 percent in the prior year. Indonesia's share grew to 28 percent from 25 percent, while China's share declined to 18 percent from 19 percent.
The production of apparel grew to 457 million units, up from 404 million units the year before. The largest clothing factory, located in China, was responsible for about 9 percent of this volume. However, Cambodia became the largest source with 24 percent of the volume, up from 22 percent. China's share declined to 19 percent from 23 percent. All in all, 62 percent of the total volume was made by eight strategic manufacturing partners.
Footwear had grown faster than apparel in previous years, and it continued to outperform for the Adidas brand, but the growth is becoming more balanced for the two categories, the management indicated. In fact, the company's annual report shows that total apparel sales rose last year by 6 percent in euros and by 11 percent in local currencies, reaching €8,223 million and representing 38 percent of the total turnover. Sales of footwear grew by 3 percent in euros and by 8 percent in constant currencies, building up to a level of €12,783 and making up 58 percent of the total revenues. Sales of equipment fell by 13 percent in euros and by 9 percent in local currencies, representing 4 percent of revenues at €910 million.
The figures indicate a slight increase in average selling prices for footwear to €31.25 per pairs and a slight decline in apparel to €17.99 per unit.
The share of new products launched in the market declined slightly last year to 74 percent of sales for the Adidas brand and to 67 percent of sales for Reebok. R&D expenses decreased to 0.7 percent of sales from 0.9 percent. The number of employees involved in R&D dropped slightly to 1,041.
Kasper Rorsted, chief executive of the Adidas Group, said at last week's press conference about the annual results that the executive board has been striving to create a performance-based culture at the Adidas Group, creating a new coaching tool and stimulating achievement with bonuses and internal promotions.
To cope with growth and to create a better environment for its staff, the head offices in Germany, the U.S. and China are being expanded. The group continued to invest in gender intelligence training. By the end of 2018, about 33 percent of the management positions were occupied by women, with rates of more than 50 percent at Reebok and in North America. This was up from 31 percent at the end of 2017 and above a 2020 target of 32 percent. Across the group, 49 percent of its 57,016 employees were women. As much as 57 percent of the total staff was employed in the group's own retail operations.
Asked whether the group intends to keep Reebok without cannibalizing Adidas, now that it is making a profit, Rorsted told journalists that he was treating the two brands as if they were his two children.
Rorsted also mentioned the group's efforts in the area of sustainability. Adidas sold about five million pairs of Parley for the Oceans shoes last year, and the volume is expected to grow to 11 million units in 2019 with the addition of apparel.