Shareholders, ladies and gentlemen, friends of adidas AG. On behalf of my colleagues on the executive board, I would like to welcome you all to our 2012 Annual General Meeting at the City Hall in Fürth. I also welcome everybody following this AGM online via our live webcast. I am delighted to be able to report to you today on another record year for the adidas Group. In 2011, we grew across all of our brands, in all of our distribution channels, and in all of our regions around the world. This means that the foundation of our success is very healthy and broad-based. Today, I do not only want to give you a detailed account of our results for 2011.
I would also like to give you an outlook for the remainder of 2012, and conclude by outlining the progress we are making towards achieving our long-term strategic business plan, Route 2015. Let's start with the past financial year. 2011 proved to be an exceptionally successful year for our Group. Not only did we meet all the targets we set ourselves at the beginning of the year, we exceeded most of them, and in some cases, markedly so. We increased adidas Group sales by EUR 1.4 billion, reaching a new record level of more than EUR 13.3 billion. In currency neutral terms, this means our sales grew 13%. As you know, we are committed to growing our bottom line faster than our top line. In 2011, we impressively succeeded in doing so.
This means that we have improved earnings attributable to you, our shareholders, by 18% to EUR 671 million. A new record result. Never before has the adidas Group made more profit than it did last year. Our Group's development in 2011 in terms of our balance sheet and cash flow was also excellent. Our operating cash flow generation was EUR 792 million for the year. This allowed us to significantly reduce our net debt yet again by EUR 311 million, so that we were able to report a net cash position of plus EUR 90 million at year-end. This is the first time since the acquisition of Reebok in 2006 that our Group can proudly confirm that at the end of 2011, it had no net debt.
These results, ladies and gentlemen, are even more impressive when you bear in mind that at the end of 2008, our net debt amounted to EUR 2.2 billion. As you can see, ladies and gentlemen, the adidas Group's balance sheet is very healthy indeed and in excellent shape in every respect. We want to share the Group's success with you. For 2011, we are therefore proposing to this Annual General Meeting a dividend payout of 31.2% of net income attributable to shareholders. In doing so, we remain within the corridor of our long-term dividend policy, which provides for a payout of between 20%-40% of consolidated net income. In concrete figures, this means a dividend of exactly EUR 1 per share. This represents an improvement of 25% compared to the previous year, 2010, when we paid a dividend of EUR 0.80.
Our proposal concerning the appropriation of retained earnings means that of the adidas AG retained earnings, which amounted to EUR 312,226,186,136.92, a total of EUR 209,216,186 will be paid out in dividends to our shareholders, and that the remaining amount of EUR 102,990,000.92 will be carried forward to the new financial year. Based on our business success and your confidence in our bright prospects for the future, the adidas share price clearly outperformed the DAX in 2011. Over the course of the year, our share gained almost 3%, reaching EUR 50.26, which meant that our market capitalization at year-end amounted to EUR 10.5 billion. In the same period, the DAX fell by 15%. Let's now look back at the key successes of the adidas Group in the past year. In 2011, currency neutral sales grew in all segments.
In the wholesale segment, sales increased 11% on a currency neutral basis or 10% in euro terms to EUR 9 billion. As a result, wholesale, the segment through which we sell our products worldwide via our retail partners, is and remains by far our largest and most important distribution channel. Currency neutral sales in our retail segment rose 20% or 17% in euro terms to EUR 2.8 billion. In this context, a major highlight was our 14% growth in comparable store sales. In other businesses, sales were up 11% compared to the prior year, reaching EUR 1.6 billion. In currency neutral terms, sales grew 13%. Here, our TaylorMade-adidas Golf business was the driving force, with sales increasing 16% on a currency neutral basis.
In the adidas Group, we see ourselves as a global player with strong roots in Germany, and these roots are firmly anchored in our birth town of Herzogenaurach. This is where our company founder, Adi Dassler, started making his first sports shoes back in 1920, thus starting the success story of the adidas Group that is still going strong today. As most of you know, our corporate headquarters remain located in Herzogenaurach. We have more than 3,300 employees working at HQ in Herzo, and we plan to create between 100-150 new jobs here this year. In Germany, we have a total of 4,600 employees working for us. However, the overwhelming proportion of our sales is generated abroad in our international markets, which account for 95% of our group sales. This shows you just how global the adidas Group is today.
2011 currency neutral sales were above the prior year level in all our regions, with developments in our three key growth markets, North America, Greater China, and Russia being particularly outstanding. In our long-term strategic business plan, Route 2015, we state that these three markets are to deliver 50% of our top-line growth by 2015. This is precisely what happened in 2011. In North America, sales grew by 15% on a currency neutral basis. This is especially pleasing since we had already achieved a double-digit growth rate of 12% in the world's biggest sporting goods market in 2010. As a result, we have significantly expanded our presence and market share in the U.S. and Canada over the past few years. In the so-called European emerging markets, our currency neutral sales were up 22% compared to the prior year.
The star of this region was, once again, Russia, a market in which we have a commanding market position supported by our own retail stores. With adidas, we are the clear market leader here, and Reebok is number two. Our highest regional growth rate, however, came from Greater China. Here in 2011, we were able to witness a very strong currency neutral increase of 23%, and with this to clearly break through the barrier of EUR 1 billion in sales. At the end of 2011, sales in Greater China amounted to EUR 1.2 billion. We were also able to demonstrate the strength of our group in our established markets in Western Europe, where we grew at a double-digit rate by exactly 10%. In view of the European debt crisis and the persistently high unemployment levels in many EU countries, I definitely consider this to be an extremely remarkable achievement.
In Latin America, our currency neutral sales also grew 10%. In other Asian markets, currency neutral sales increased by 5%. While sales grew in most of the markets in this region, Japan saw slight declines as a result of the devastating earthquake and tsunami in March 2011. The consumer is at the heart of everything we do. Only if we succeed in exciting our consumers, can we be successful in the long term. That is why developing and maintaining our brands is pivotal to our group strategy. adidas is by far the biggest brand in our portfolio and also our growth engine. adidas sales increased 14% in currency neutral terms to EUR 9.9 billion in 2011, generating growth of EUR 1.2 billion compared to 2010. This we achieved even though 2011 was a so-called non-event year without any major global sporting highlights.
Let me make it quite clear, ladies and gentlemen, that for adidas, there is no such thing as a non-event year. We are so strongly represented in all sports that we are present around the world 24 hours a day, seven days a week. Every year, this starts with the Australian Open in tennis in January, followed by the NBA All-Star Game in basketball, the UEFA Champions League in football, the National Football League championships, as well as many other competitions in a variety of other sports. In all of this, our athletes and products are always at the center of attention of an audience passionate about sport. A case in point is the running category. Running is one of the growth areas we have defined in Route 2015, and our athletes again dominated the international marathons and world championships in 2011.
At the IAAF World Championships in Korea, Jamaican Yohan Blake won the 100-meter sprint wearing Adizero spikes. Kenyan Patrick Makau set a new marathon world record in his Adizero shoes, and in Boston, his fellow countryman Geoffrey Mutai ran the fastest marathon time ever, a sensational two hours, three minutes and two seconds. In the past few years, more than 100 international city marathons have been won by adidas athletes wearing Adizero running shoes. This impressive series of wins is also reflected in our figures. Last year, our currency neutral sales in the running category increased 19% compared to 2010. adidas basketball, another growth category as defined in Route 2015, also had a strong year. Led by Chicago Bulls' Derrick Rose, the youngest player of all time to have been voted the most valuable player in the NBA, our sales in this category rose 11% in currency neutral terms.
At the same time, the Derrick Rose signature shoe was the best-selling basketball shoe in the U.S. for several weeks. However, our fastest-growing performance category in 2011 was outdoor, with an increase of 40% on a currency-neutral basis. Within a very short space of time, we have been able to push forward into the territory of the biggest outdoor brands because we were able to bring the right products to market and attract authentic promotion partners such as Reinhold Messner and the Huber brothers. This category was further strengthened by the acquisition of a small but premium outdoor brand, Five Ten, which we purchased in November 2011. Five Ten enjoys an unmatched reputation and has product expertise in climbing and mountain biking, supplementing our existing outdoor offerings perfectly. I'm convinced that like the running and basketball categories, outdoor will continue to deliver pleasing results in the years ahead.
Undoubtedly, ladies and gentlemen, sport is the core of the adidas brand. At the same time, no other sporting goods brand has established itself so credibly in the streetwear and fashion market. adidas Originals is one of the world's most popular streetwear labels, and through our cooperation with Japanese designer Yohji Yamamoto for the Y-3 collection, adidas today is a highlight of every fashion week. No other brand has so authentically fused court and catwalk, stadium and street. This is one of the clear messages of our current brand campaign, featuring football stars such as David Beckham and Lionel Messi, as well as pop icon Katy Perry. See for yourselves. Currency neutral sales of our sports style sub-brands rose 24%, reaching a record level of EUR 2.6 billion. As well as adidas Originals, our youngest label, adidas NEO, was a key factor in our success.
adidas NEO is a completely new concept for young and trendy fashion-conscious teenagers, and with it, we enter the area of fast fashion. After a successful start for adidas NEO in China, India, and Russia, we also introduced NEO to Germany this spring by opening the first of 10 own stores, as we believe that even in this highly competitive market, young consumers will be convinced of our expertise in fashion and style. By the way, one of these NEO stores is in the Breite Gasse in Nuremberg, and I invite you all to go and have a look. After a strong year in 2010, Reebok, too, was again able to continue its successes in 2011. Reebok sales were up 6%, in currency neutral terms, EUR 2 billion.
This means that since 2009, Reebok sales have grown almost 20%, and more importantly, Reebok improved its gross margin by over four percentage points in the same period. This proves that we've become ever more successful at bringing higher priced Reebok products to market and making the Reebok business more internationally focused. With EasyTone, ZigTech, and RealFlex, Reebok has, in the past 24 months, succeeded in introducing three product hits that resonate with different consumer groups. While toning was in high demand mainly with women, ZigTech has been a runaway success mostly for men and children, and the RealFlex shoe appeals to both men and women alike. As a result, Reebok is better positioned with a broader basis than it had a year ago and is thus better offset the declines in sales in the toning category through other products.
This broader basis is also key because we are committed to making Reebok the fitness brand for all fitness fans worldwide. More about that later. Ladies and gentlemen, I don't know how many of you here in the city hall today are active golf players, but regardless of whether you take an active or passive interest in the sport, I think you will agree that under our leadership, TaylorMade-adidas Golf has become the star player in the golf industry. In 2011, TaylorMade-adidas Golf became the world's number one in the golf market. With EUR 1,044,000 in sales, our golf subsidiary has broken through the barrier of EUR 1 billion for the first time. Just to put that into perspective, in 1998, after we had acquired TaylorMade, sales in this segment amounted to only EUR 263 million. We have thus quadrupled our golf business since that time.
Even more than that, in fact. The secret of TaylorMade-adidas Golf success is simple: innovation, and more innovation. By delivering a continuous stream of new products that provide active golfers with the possibility of an ever better game, TaylorMade-adidas Golf has made it to the top in numerous product categories. It is therefore very understandable, ladies and gentlemen, that we are continuing to invest in golf. Two months ago, we announced that we intend to acquire the golf brand Adams Golf for approximately EUR 53 million. Adams Golf complements TaylorMade perfectly because Adams Golf has a strong resonance primarily with women and senior golfers, while the focus of TaylorMade is largely on younger, performance-oriented players. We expect to complete the transaction this summer.
By the way, just like TaylorMade, Adams Golf also got off to an excellent start in 2012, with sales up 25% in the first quarter. As you can see from the Adams Golf acquisition, financially, we are well-positioned to drive forward the further expansion of our business at all times. The adidas Group is financially strong and has an excellent reputation on the capital markets. We witnessed this in March this year when we were able to successfully launch the offering of a convertible bond of EUR 500 million maturing in 2019. We issued the bond based on the authorization granted by the annual general meeting in May 2010. In order to be able to utilize the favorable market conditions and also to optimize the conditions for adidas AG, we made use of the possibility to disapply shareholders' subscription rights.
Bonds are convertible into 5.99 million new adidas AG shares to be issued from the contingent capital resolved upon by the AGM or into existing adidas AG shares, which represents approximately 2.86% of our nominal capital. The bonds are priced with a 0.25% annual coupon and a conversion premium of 40%. The conversion price was set at EUR 83.46. Not until the conversion price is met are the bonds convertible into 5.99 million new or existing adidas AG shares. Taking into account an after-tax interest adjustment in an amount of approximately EUR 9 million, the maximum dilutive effect is around 1%. The bonds were several times oversubscribed on the day they were issued. We'll use the proceeds from the offering primarily to further optimize the group's debt structure and support ongoing business growth.
I'm sure that you have all followed the news surrounding the financial crisis in the Euro area over the past few months, therefore know what high interest rates many countries have to pay in order to raise money on the capital markets. For this reason, the favorable conditions, 0.25% of our bonds, are proof of just how much confidence institutional investors have in the positive outlook for our group. I believe this confidence has also proved justified in the first quarter of 2012, the results of which we released last week. Once again, we achieved record results in this first quarter, with currency neutral sales increasing 14% or 17% in EUR terms to EUR 3.8 billion. This is our fifth straight quarter of double-digit revenue growth. Looking at our regions, currency neutral sales in Greater China and in other Asian markets were up 26%.
In Western Europe, sales increased 7%. In the European emerging markets, sales grew 15%. In North America, sales were 11% above the prior year, in Latin America, sales increased 14%. By brand, adidas currency neutral sales were up 16% and TaylorMade-adidas Golf sales even increased by 32%, while sales at Reebok were down, mainly due to a shifting of sales to the Reebok-CCM Hockey segment and difficult comparisons in the toning category. The decrease is 7%. Q1 net income improved by 38% to EUR 289 million. I'm sure you will agree, ladies and gentlemen, that our Q1 performance confirms the outstanding brand momentum and global power of the adidas Group. Our investments in brands and channels are yielding an unprecedented period of growth for the group as we continue to excite consumers and customers with the ultimate in product innovation and brand experiences.
Therefore, we won't let ourselves be thrown off course even when we come up against certain obstacles. Regrettably, as you may have read or heard last week, we have discovered commercial irregularities at our subsidiary, Reebok India Company, which are likely to affect the consolidated financial statements of the adidas Group. The currently estimated maximum negative effect could be up to a pre-tax amount of EUR 125 million. As these irregularities have been deemed to have occurred prior to the 2012 financial year, the adidas Group might have to restate the prior year consolidated financial statements in line with the requirements of IAS 8. However, the financial statements of adidas AG, the parent company of the adidas Group, will not be affected by this issue. We've acted quickly and comprehensively in India.
This has already resulted in the appointment of a new local leadership team in India at the end of March. Under this new leadership team, we're planning an accelerated restructuring of our business activities in India, including significant changes to the commercial business practices. This could lead to an additional one-time charges in the remaining quarters of 2012 in an estimated amount of up to EUR 70 million. I can assure you that we will continue to vigorously protect the group's interests and of course, our shareholders' interests wherever necessary. Let me now return to the good news. Following our outstanding first quarter 2012 results, despite the restructuring in India, we're in a position to increase our full year top and bottom line guidance because we believe our brands will continue to excite our customers.
We now expect full year sales to grow at a rate approaching around 10% on a currency neutral basis. Despite the negative impact of rising input costs in the first half of the year, we continue to forecast a stable gross margin compared to the prior year. Our operating margin is expected to increase to a level approaching 8%. As a result, we expect net income attributable to shareholders to increase at a rate between 12% and 17% to a new record level of between EUR 750 million and EUR 785 million. These, ladies and gentlemen, are excellent prospects. The stock exchanges also responded positively to these impressive figures. The adidas AG share price gained 5.3% on the day of publication of our preliminary results, reaching an all-time high of EUR 63.16 at the close of Xetra trading on the following trading day.
Currently, the share price as per yesterday is EUR 61.48. This means that our share price has risen by more than 20% since the beginning of the year, increasing twice as fast as the DAX. Over the course of the year, consumers will see us above all at this summer's two major sporting events, the European Football Championships in Poland and the Ukraine, and the Olympic and Paralympic Games in London. At the same time, we will continue to drive our strategy forwards to make Reebok the fitness brand worldwide and to strengthen TaylorMade-adidas Golf's position as market leader in golf. The adidas brand is well prepared for the 2012 European Football Championships. adidas is the official sponsor, supplier, and licensee of the tournament. With the Tango 12, we'll be providing the official match ball and will be equipping 6 national teams, more than any other brand.
Amongst them are, at least from my perspective, the two tournament favorites, Germany and Spain, I would have nothing against a repeat of the 2008 European finals in Kyiv on July 1st, 2012, because that would mean that this year too, the finals would be an all-adidas lineup. Just like, by the way, the UEFA Champions League finals next week in Munich, when adidas partners FC Bayern and Chelsea FC will meet in Munich. We will, of course, also use the UEFA Euro 2012 to bring new, innovative football boots, jerseys, and balls to the market. The positive response to our new products to date makes me very confident that we will achieve new record sales in football in 2012. For the full year, we expect sales of more than EUR 1.5 billion.
This would mean a further expansion of our market leadership position in the world's most popular sport. At the end of July, sports fans all over the world will be turning their attention to London. Here, the 30th modern Olympic Summer Games will begin on July 27th. Naturally, adidas will be center stage. adidas supplies products for 25 out of the 26 Olympic sports, the only exception being equestrian sports. More than 3,000 athletes will be wearing our products in London this year, amongst them the 500 top athletes of Team GB. In addition, as official sportswear partner of London 2012, we'll be equipping the 70,000 volunteers who will ensure that the games are a success. We're particularly proud of two aspects of our Olympic involvement. Firstly, our longstanding adidas partner, Stella McCartney, is the first famous fashion designer to create the competition wear specifically for an Olympic team.
Secondly, we're providing the London Organising Committee with our active support in its effort to make London 2012 the sustainable Olympic Games. 90% of all products which we supply for the Olympic Games contain recycled materials. The volunteers' outfits are even made of 100% recycled materials. Given that we are producing a total of more than 3 million pairs of shoes and items of competition wear, this is an outstanding achievement. This underlines the importance the adidas Group attaches to the topic of sustainability in all its activities. As far as this topic is concerned, it is particularly important to me that independent and impartial organizations acknowledge our work on sustainability. As a result of our achievements, the adidas Group has been included in the Dow Jones Sustainability Indices for the 12th consecutive time and ranked as industry leader for the eighth time.
For this reason, I would like to take this opportunity to thank, in particular, all our employees who work hard to continually improve the adidas Group in this area in close cooperation with our suppliers and subcontractors. At Reebok, we remain focused on working to achieve our goal of positioning Reebok as the fitness brand for men and women alike. To this end, Reebok has entered into a comprehensive partnership with CrossFit. CrossFit is the fastest-growing fitness movement in North America and is also becoming ever more popular internationally. Today, more than 300,000 athletes in 57 countries regularly complete CrossFit workouts, and this figure is growing daily. In March, Reebok brought the sport to Germany and opened the first Reebok CrossFit Box in Nuremberg. In addition, Reebok sponsors the CrossFit Games in California, at which the fittest man and woman on Earth are crowned every year.
However, Reebok does not only support fitness on a high performance level. Reebok also strives to help everyone to stay fit and healthy. A good example of this is the fitness project BOKS in the U.S. With this project, Reebok makes it possible for school children to engage in sports for half an hour before the start of school. Research shows that this not only considerably increases the children's physical fitness, but also makes a significant contribution to their mental well-being. This clear focus of Reebok on fitness is supported by the global brand campaign with the title, "The Sport of Fitness has Arrived," which we can watch together now. TaylorMade-adidas Golf will continue its impressive success story in 2012. From the results after only the first three months of the year, there can be no doubt about that.
Over the course of last year, TaylorMade gained further market share in all categories, and in the key category of drivers, for example, was able to secure a share of over 50% in the U.S. No other golf company has brought to market so many innovative products in the last few years as TaylorMade. Now, I can assure you, ladies and gentlemen, that our engineers in Carlsbad, California, still have plenty of ideas as to how they can make our products even better. In short, TaylorMade-adidas Golf has an extensive pipeline of new and fresh, innovative products. I'm therefore looking forward to seeing new record sales in our golf segment in 2012. Here is a current advertising spot for Ladies and gentlemen, 2011 was the first year in which we began to execute our long-term strategic business plan, Route 2015.
Our results show you that we have come out of the blocks fast. Within the framework of this plan, we have set ourselves the goal of outperforming total global economic growth by 2015. In addition, we aspire to grow faster than our major competitors. In 2011, we succeeded in achieving both goals. In concrete figures, by 2015, we expect to be able to grow sales to EUR 17 billion. Currently, as you've seen, in 2011, we've achieved more than EUR 13 billion. As far as our key profitability metrics are concerned, we intend to grow net income attributable to shareholders at an average annual rate of 15% over the five-year period of Route 2015. As you know, in 2011, we exceeded this goal with growth of 18%. We're also committed to achieving an 11% operating margin sustainably by 2015.
At the moment, our operating margin is 7.6%, and in 2012, we are striving to reach an operating margin of about 8%. We expect that the targeted growth in sales and earnings will yield unprecedented levels of cash flow for our group over the next four years. I'm sure, ladies and gentlemen, you will agree that this is exactly how sustainable shareholder value should be created. Our optimism for the coming years is based on both internal and external factors. Our brands are more sought after today than ever before. Moreover, the adidas Group is ideally positioned internationally and has further growth potential in all distribution channels. In addition, we have profited from an ever-increasing number of consumers in Asia, Eastern Europe, and Latin America, who as a result of the strong economic growth in these emerging markets, can and want to buy our products.
We also continue to profit in all markets worldwide from people's desire to stay fit and healthy, and to express their sporty lifestyle through the way they dress. For this reason, I'm firmly convinced today that the adidas Group will achieve all its ambitious goals by 2015. Ladies and gentlemen, shareholders, it has been a pleasure to report to you in the last 40 minutes on the successful development of the adidas Group's business. 2011 was a record year, and we've had a very promising start to 2012. In Route 2015, we have set ourselves targets which we will pursue with passion, focus, and hard work. The motto of my report today is, together, we win. This title has not been chosen by chance. It really sums up what the adidas Group stands for.
Our attitude, our ambition, our passion, and the responsibility we have undertaken in sport and society as a whole. I stand here today before you representing more than 46,000 employees of the adidas Group worldwide. Together, and I can assure you this, we all give our best every day to drive this company forward. We do this with professionalism and pleasure, with passion and team spirit, because we know that these are values which we need in order to be successful, both in sports and in business. I would therefore kindly ask you, ladies and gentlemen, to join me in applauding all the employees of the adidas Group, and in doing so, thanking them for their outstanding work. Thank you very much. Finally, allow me to thank you most sincerely for the trust that you have placed in me, my board colleagues, and the entire management team.
I hope that you will continue to accompany us on our journey with interest and active support in the years ahead as we implement our Route 2015 business plan and carry on setting new records for the adidas Group. Thank you very much for your attention.