Financial Management

AnalysisB&B Group

2

Impossible is nothing

1Historical backgroundNature of business

Company Overview

2Financial performance comparing with the industry

Financial Highlights

3The short/ intermediate/ long term financing sourcesFirm’s capital ratios analysis

Capital Structure

CONTENTS

3

adidas

Group

COMPANY OVERVIEW

F o u n d e d in 1924 by Adi Dassler

H e a d q u a r t e r s

“The adidas Group strives to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle!”M

issi

on

50.728EMPLOYEES

WORLDWIDE

S e c t o r Consumer DiscretionaryI n d u s t r y Apparel & Textile

Products

adidas

Group

B r a n d s

P r o d u c t s

COMPANY OVERVIEW

4

Wholesale68% of Group sales

Retail20% of Group sales

Other Business12% of Group sales

47%

40%

13%

FootwearApparelHardware

Net sales by product category

2013

5

COMPANY OVERVIEW

A d i d a s G r o u p Wo r l d w i d e ( % o f G r o u p s a l e s )

6

SUPERVISORY BOARD

o Creating shareholder valueo Presentation of Route 2015o Diverse brand portfolioo Investments focused on highest-potential

markets and channels

o Creating a flexible supply chaino Leading through Innovationo Becoming a sustainable company

G R O U P S T R AT E G Y

EMPLOYEE STATISTICS

2013

2012

2011

2010

2009

50,728

46,306

46,824

42,541

39,596

adidas Group number of employees

Chart Employees by function

Own retail

Logistics

Sales

Central functions & adminis-tration

Marketing

Production

IT

Research & development

On December 31,2013, the Group had 50,728

employees, which represents an increase of 10%

versus 46,306 in the previous year

→ Global employee base increases strongly

Awards

2013

8

FINANCIAL HIGHLIGHTSThe adidas AG share

Number of shares outstanding 2013 average 209,216,186

Number of shares outstanding At year-end 2013 209,216,186

Initial Public Offering November 17, 1995

Stock exchange All German stock exchanges

Stock registration number DE000A1EWWW0

Stock symbol ADS, ADSGn, DN

Five-year share price development

37%

32%

14%

10%5%

2%

Rest of Europe

North America

Other, undiscloded holdings

Germany

Rest of the world

Management

Shareholder Structure in 2013

2013

2012

2011

2010

2009

0 5 10 15 20 25

19.382

14.087

10.515

10.229

7.902

adidas AG market capitalization at year-end (€ in billion)

2013

FINANCIAL HIGHLIGHTS

Share ratios at a glance 2013 2012Basic earnings per share € 4.01 3.78 Cash generated from operating activities per share € 3.03 4.50 Year-end price € 92.64 67.33 Year high € 92.64 69.12 Year low € 66.28 51.42 Dividend per share € 1.50 1.35 Dividend payout € in millions 314 282 Dividend payout ratio % 37.40 35.70 Dividend yield % 1.60 2.00 Shareholders' equity per share € 26.24 25.35 Price-earnings ratio at year-end 23.10 17.80 Average trading volume per trading day shares 842,318 900,218 DAC-30 ranking at year end by market capitalization 16 16 by turnover 17 19

The adidas Group and the adidas AG share receive strong analyst support in 2013. The vast majority of 45 analysts from investment banks and brokerage firms are confident about the medium and long-term potential of the Group

Recommendation Split

Buy Hold Sell

9

2013

10

FINANCIAL HIGHLIGHTS

Income Statement 2012-2013 2011-2012

2013 Change 2012 Change 2011

Net sales 14,492 -2.6% 14,883 11.7% 13,322

Cost of sales 7,352 -5.5% 7,780 11.3% 6,993

Gross profit 7,140 0.5% 7,103 12.2% 6,329

Royalty and commission income 104 -1.0% 105 12.9% 93

Other operating income 143 12.6% 127 29.6% 98

Other operating expenses 6,133 -0.3% 6,150 10.5% 5,567

Goodwill impairment losses 52 -80.4% 265 100.0% 0.00

Operating profit 1,202 30.7% 920 -3.5% 953

Financial income 26 -27.8% 36 16.1% 31

Financial expenses 94 -10.5% 105 -8.7% 115

Income before taxes 1,134 33.3% 851 -2.1% 869

Income taxes 344 5.2% 327 25.3% 261

Net income 790 50.8% 524 -13.8% 608

11

Change (%)143%

2%

5%

40%

-20%

19%

-46%

225%

-31%

-

-45%

0%

-50%

11%

3%

-6%

2012280

1,790

459

78

5

2,612

1,207

4

13

-

1,224

209

641

4,454

5,304

6,528

33%

7%

59%

2013Short-term borrowings 681

Account payable 1,825

Accrued liabilities 483

Other current financial liabilities 109

Finance lease obligations 4

Total Sources of Short-term Financing 3,102

Long-term borrowings 653

Other non-current financial liabilities 13

Finance lease obligations 9

Liabilities classified as held for sale -

Total long-term financial liabilities 675

Share capital 209

Reserves 321

Retained earnings 4,959

Shareholder's equity 5,489

Total Source s of Long-term Financing 6,164

CAPTITAL STRUCTURE

2013

12

Borrowings Financing Structure(€ in millions)

2013 2012

Cash and short-term financial assets 1629 1935

Bank borrowings 126 59

Private placements 248 480

Eurobond 500 499

Convertible bond 460 449

Gross total borrowings 1334 1487

Net cash/net borrowing 295 448

SOURCES OF FINANCING

82%

18%

Gross total borrowings Net cash

77%

23%

2013

2012

Cash an

d short-

term finan

cial a

ssets

Bank b

orrowings

Private

placem

ents

Euro

bond

Converti

ble bond

Gross

total

borrowings

Net ca

sh0

400800

120016002000

2013 2012

13

Gross borrowings as at December 31, 2013

Short-term()

Intermediate-term(1-3y)

Long-term(3-5y)

Total

Bank borrowings 126 - - 126Private placements 55 193 - 248Eurobond 500 - - 500Convertible bond - - 460 460Total 681 193 460 1334

Bank borrowings

Private placements

Eurobond

Convertible bond

Total

19%

8%

73%

0%

51%

0%

100%

0%

0%

14%

-

-

-

1.00

0.34

Short-term Intermediate-term Long-term

Gross borrowings as at December 31, 2012

Short-term()

Intermediate-term(1-3y)

Long-term(3-5y)

Total

Bank borrowings 59 - - 59Private placements 221 145 114 480Eurobond - 499 - 499Convertible bond - - 449 449Total 280 644 563 1487

Bank borrowings

Private placements

Eurobond

Convertible bond

Total

21.1%

78.9%

0.0%

0.0%

18.8%

0.0%

22.5%

77.5%

0.0%

43.3%

0.0%

20.2%

0.0%

79.8%

37.9%

The Adidas Group has diversified into different sources of financing to reduce its dependence on pure, traditional bank financing

SOURCES OF FINANCING

2013 2012 20110%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

51.0%

18.8% 22.6%

14.5%

43.3%

60.9%

34.5% 37.9%

16.5%

Short-term Intermediate-termLong-term

Borrowings Financing Source (€ in millions)

2013 2012 2011Short-term 681 280 289 Intermediate-term 193 644 780 Long-term 460 563 211 Total financing 1,334 1,487 1,280

The increase was mainly due to a reclassification of

long-term borrowings to short-term borrowings, as a

result of the Group’s Eurobond, which will mature in

July 2014.

SOURCES OF FINANCING

15

29%

13%58%

33%

7%

59%

Short-term financial source

Long-term financial source

Shareholder's equity

2013 2012 Change

Net profit margin 5% 4% 1%

Debt to Equity 1.11 1.20 (0.09)

Debt to total capital 0.53 0.55 (0.02)

Short-term source of finance/ total source

33.48% 28.58% 4.9%

Long-terms source of finance/ total source

66.52% 71.42% (4.9%)

Financial Leverage (5.4%) (8.5%) 3.1%

ROE (EAT) 14.4% 9.9% 4.5%

DPS 1.5 1.35 11.1%

EPS 4.01 3.78 6%

DPS 1.5 1.35 11.1%

EPS 4.01 3.78 6%

CAPITAL STRUCTURE

FINANCIAL SOURCERESTRUCTURE

THANKS YOU!B&B Group

Financial Management