STEEN BORGHOLM Chief Executive Officer CEO’S REPORT The global political conjunctures in 2018 were not favourable to highly globalised companies like ECCO, but despite this fact ECCO managed to deliver its best annual result to date. Global trade and business have become more unpredictable, and it seems that these trends are likely to continue for a while. The overall positive macroeconomic development is expected to slow down during 2019, and it is evident that the recovery experienced since the financial crisis, a decade ago, is gradually deteriorating. The global retail industry is preoccupied with redefining brand and go-to-market strategies in order to stay relevant and to fight the current highly promotional retail environment. Consolidation in the industry continues as digital channels go on to take market share. Through uncompromising e orts in 2018 by our organisation, we succeeded in growing both sales and profits to a new record high in ECCO’s 55-year-old history. Innovations in new styles such as EXOSTRIKETM and ECCO BIOM Hybrid 3 resonated well with our customers. Entrepreneurship is deeply rooted in the ECCO culture, however, with 21,300 employees, 2,250 ECCO shops and sales in 99 countries, we no longer have the agility of a start-up. But this does not mean stagnation; in 2018, we invested in becoming more digitally driven, both when it comes to design, product management, and consumer sales. The success of new mobile first platforms for e-commerce and omni-channel options for consumers confirmed that this is how consumers want to shop. Looking at 2018, we saw positive developments in the execution of our strategic and operational agenda through: successful product launches, an e cient and reliable supply chain, and a strong momentum in both Asia and the US. Furthermore, the launch of a revolutionary way of tanning leather, DriTanTM, saving millions of litres of water, shows ECCO’s commitment to innovation and environment. I want to thank all of my colleagues for making ECCO the success it is. It is not just about what we make, it is how we make it that creates the engagement and motivation to drive the brand forward. Entering 2019, the ECCO strategy remains valid. A stronger and more consistent global brand with a strong Direct-toConsumer business and consumer focus is as relevant as ever. Today, more than 50% of all ECCO shoes are sold in a concept store online or o ine, connecting us with millions of consumers every year. As one of the world’s leading shoe manufacturers, ECCO has the potential to take further advantage of this in our marketing, sales, and operating model. It provides us with many unexplored opportunities to remain successful and generate sustainable and healthy growth also in the years to come. Steen Borgholm Chief Executive Officer ECCO Annual Report 2018 3
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