Appendix 5: New CEO new Dividends : Wednesday, 8 March 2017: (07:56 )

Last October Mr. Rorsted became the new Ceo of Adidas, a new CEO means a new dividend policy. Subsequently, a new dividend policy means new investors. The main goal is of course to bit Nike, personally I prefer Adidas’s shoes. They are very comfortable and they are perfect for a business attire, casual chic without looking short and fat. But I guess their target group are athletes and not business people. Probably that’s why lags behind Nike. Nike's shoes are mostly were at Olympic games and football leagues. 

Initially Mr. Rorsted introduced a new profit target: 15% increase every year for the next three years. His objective is fast growth, which is quite tempting but also too risky. I guess will imply many projects within the next three years in order to enhance its profitability. How about the investors’ dividends then?? Probably they have to be decrease or worse to be postponed. Adidas said they will sale some of their brands, which are not profitable, however, no one wants to buy them meaning their prices have to be dropped.

Observing the company's 5year share price fluctuation, a volatile trend is noticed. The company's share prices usually have an upward trend till August-September when they reach a peak and then follow a downward trend. But still their fluctuation those five years would worry me as an investor, “who I am not”.

Since May 2016 the company observes its highest prices. It could be correlated with the new CEO though. If the share price follows the usual trend, now is the best time for me to buy. Summer is coming and people don’t buy sneakers. The share price probably will fall and when September comes I will join high returns due to the demands for athletic shoes that specific period.

               

From the marketing perspective the company does a great job as well. They are cooperating (indirectly) with the Kardashian’s family-Kanye West. “History” can tell us how perfectly this family advertises products worldwide and especially in America, the firm’s targeted market for expansion.

However I have to check the annual report first before I buy. I have to find out about the dividend policy and the promises given by the CEO. I should had never checked those annual reports though. I’m 22 years old and I couldn’t read neither the highlights, which are supposed to be with bold letters and very unambiguous. The horrible colours chosen and the tiny letters made me suspicious, I guess the company tries to hide something.....  

It was strange that Rorsted’s first “letter from the CEO” did not introduced a new dividend policy, or at least to refer them. Since AG increased them by 40p why were not referred at the most important part of the annual report???

A 40p increase on dividend payments was suggested on AGM to be paid the followed May. Due to their realised profits this year, this increase is allowed.

I conclude that Adidas needs cash immediately, since initially starts selling its brands and now is promising higher dividends to increase its share price. In addition, it bought its own shares, 2,128,200 plus the ones from previous years (total=11,150,000 shares), joining the high returns from the multi-year shareholder return programme introduced in 2014.

The small sample used to analyse the company’s current financial performance, indicate a positive future which is supported by the new CEO and his new strategies. I might do a short term investment during this summers, I want to check the new CEO’s ambitious strategy for the following year first.