Results of Operations Consolidated Sales 1,530.3 100.0% 1,274.0 100.0% 20.1% Cost of material 736.4 48.1% 654.0 51.3% 12.6% Gross profit 794.0 51.9% 620.0 48.7% 28.1% Royalty and commission income 43.7 51.9% 40.3 3.2% 8.3% Selling, general and administrative expenses Marketing/Retail expenses 214.6 14.0% 163.9 12.9% 30.9% Research, design and developement 36.9 2.4% 29.9 2.3% 23.3% Other expenses 202.0 13.2% 183.3 14.4% 10.2% Total 453.4 29.6% 377.1 29.6% 20.2% EBITDA 384.2 25.1% 283.3 22.2% 35.6% Depreciation 19.3 1.3% 20.1 1.6% -4.1% EBIT 365.0 23.9% 263.2 20.7% 38.7% Financial result 5.7 0.4% 0.9 0.1% 540.7% EBT 370.7 24.2% 264.1 20.7% 40.4% Income taxes 111.7 7.3% 84.2 6.6% 32.6% Tax rate 30.1% 31.9% Minority interests -1.7 -0.1% -0.6 0.0% Net earnings 257.3 16.8% 179.3 14.1% 43.5% Weighted average shares outstanding (million) 16.025 15.932 0.6% Weighted average shares outstanding, diluted (million) 16.353 16.449 -0.6% Earnings per share in € 16.06 11.26 42.7% Earnings per share, diluted in € 15.74 10.90 44.3% Management Income Statement 2004 2003 +/- % € million % € million % Gross Profit Margin Sets New Record Regional development was as follows: In Europe, the gross  profit margin rose from 51.3% to 54.1%, in the Americas  from 44.6% to 49.3%, in Asia/Pacific from 44.4% to 48.1%, and in Africa/Middle East from 27.4% to 34.4%.  The gross profit margin is a particularly important indicator of the company’s positive development. As a percentage of sales, the margin in the 2004 reporting year climbed to a new record high of 51.9%, up from the previous year’s level of 48.7%. This means an improvement of 320 basis points and a significant increase in comparison with the level projected at the beginning of the year. It was the highest gross profit margin in company history, which positions the  company at the upper end of the margin spread within the sporting goods industry. In addition to the strong desirability of  the brand, this development is also attrib- utable to favorable exchange rates, an beneficial product mix and an increased share of company-owned retail operations. In absolute figures, gross profit was up by a total of 28.1%,  rising from € 620.0 million to € 794 million. The margin in Footwear climbed from 49.5% to 53.1%, Apparel showed an improvement from 47.1% to 49.7% and Accessories reported a margin of 49.6% compared to 46.6% in the previous year.  Foreword | Mission |  Management Report  | Share | Marketing | Consolidated Financial Statements - IFRS - | Report of Supervisory Board | Board of Management 19 2000 2001 2002 2003 2004 Gross profit/ Gross profit margin (million €) Gross profit margin Gross profit 0 30% 200 35% 400 40% 600 45% 800 50% 1,000 55%