After the dynamics of the global economy have slowed down in 2019, experts at the Kiel Institute for the World Economy (ifw Kiel) expect global gross domestic product (GDP) to rise by 3.1% in 2020 (winter forecast dated December 11, 2019). This corresponds to a slight increase in the GDP growth rate of 0.1% compared to 2019. Accordingly, the global economy is expected to stabilize overall in 2020.
Experts expect that the increase in production in the advanced economies will remain moderate in 2020. While economic momentum in the United States of America continues to slow down and the “Brexit” will continue to put a strain on the UK economy in 2020, ifw Kiel expects the economy in the euro zone to remain at a similar level compared to 2019. The expansion of the Chinese economy is likely to lose further momentum in 2020. In the other emerging markets, however, the rise in production is likely to increase slightly. Trade policy uncertainties continue to weigh on the outlook and remain a risk for the forecast.
If there are no significant negative effects from the overall economic development, we expect the sporting goods industry to continue its stable growth in 2020. It can be assumed that the trend towards sports activities and a healthy lifestyle will continue and thus the demand for sporting goods will also continue to rise. In addition, major sporting events in 2020, especially the Tokyo Summer Olympics and the European Football Championship, should help to support growth in the sporting goods industry.
Our business developed strongly in 2019, both in terms of sales and profitability. We are confident that the positive development will continue in 2020.
For the full year 2020, we therefore expect currency-adjusted sales growth of around 10%. We forecast the gross profit margin to show a slight improvement compared to last year (2019: 48.8%) and operating expenses (OPEX) to increase at a slightly lower rate than sales. Based on the current exchange rate levels we expect an operating result (EBIT) for the financial year 2020 in a range between € 500 million and € 520 million (2019: € 440.2 million). We also expect a significant improvement of net earnings in 2020.
Investments in fixed assets of around € 200 million are planned for 2020. The majority of these investments will be in infrastructure in order to create the operating requirements for the planned long-term growth. The investments mainly concern own distribution and logistics centers and further investments in the expansion and modernization of the Group's own retail stores.
The Management Board and the Supervisory Board have set the long-term strategic priorities. Action plans are being implemented in a targeted and value-oriented manner. We believe that the corporate strategy "Forever Faster" provides the basis for medium- and long-term positive development. We therefore confirm our medium-term target of an average annual growth rate of currency-adjusted sales of around 10% (CAGR) and the achievement of a 10% EBIT margin by 2021/ 2022.
Herzogenaurach, January 31, 2020
The Management Board