Every Product Tells a Story 287 Mm × 210 Mm 283.5 Mm × 210 Mm

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Every Product Tells a Story 287 Mm × 210 Mm 283.5 Mm × 210 Mm 287 mm × 210 mm Annual Report 09 adidas GROUP EVERY PrODUCT TELLS A STORY 287 mm × 210 mm 283.5 mm × 210 mm Financial Highlights 2009 20 09 FINANCIAL HIGHLIGHTS (IFRS) N°- NET SALES N°- 01 € IN MILLIONS 02 2009 2008 Change 2005 4) 6,636 Operating Highlights (€ in millions) 2006 5) 10,084 Net sales 10,381 10,799 (3.9%) 2007 10,299 EBITDA 780 1,280 (39.1%) 2008 10,799 Operating profit 508 1,070 (52.6%) 2009 10,381 Net income attributable to shareholders 245 642 (61.8%) Key Ratios (%) Gross margin 45.4% 48.7% (3.3pp) NET INCOME attrIBUtabLE to SHAREHOLDERS N°- Operating expenses as a percentage of net sales 42.3% 40.5% 1.7pp € IN MILLIONS 03 Operating margin 4.9% 9.9% (5.0pp) 2005 4) 383 Effective tax rate 31.5% 28.8% 2.7pp 2006 5) 483 Net income attributable to shareholders as a percentage of net sales 2.4% 5.9% (3.6pp) 2007 551 Operating working capital as a percentage of net sales 1) 24.3% 24.5% (0.2pp) 2008 642 Equity ratio 42.5% 35.5% 7.0pp 2009 245 Financial leverage 24.3% 64.6% (40.3pp) Return on equity 6.5% 18.9% (12.4pp) Balance Sheet and Cash Flow Data (€ in millions) Total assets 8,875 9,533 (6.9%) Inventories 1,471 1,995 (26.3%) Receivables and other current assets 2,038 2,523 (19.2%) Working capital 1,649 1,290 27.8% Net borrowings 917 2,189 (58.1%) Shareholders’ equity 3,771 3,386 11.3% Capital expenditure 240 380 (36.8%) Net cash from operating activities 1,198 497 140.9% Per Share of Common Stock (€) Basic earnings 1.25 3.25 (61.5%) Diluted earnings 1.22 3.07 (60.2%) Operating cash flow 6.11 2.52 142.6% Dividend 0.35 2) 0.50 (30.0%) Share price at year-end 37.77 27.14 39.2% Other (at year-end) 1) Twelve-month trailing average. Number of employees 39,596 38,982 1.6% 2) Subject to Annual General Meeting approval. 3) After deduction of treasury shares. Number of shares outstanding 209,216,186 193,515,512 8.1% 4) Reflects continuing operations as a result of the divestiture of the Salomon Average number of shares 196,220,166 197,562,346 3) (0.7%) business segment. 5) Including Reebok, Rockport and Reebok-CCM Hockey from February 1, 2006 onwards. 283.5 mm × 210 mm TARGETS 2009 RESULTS 2009 OUTLOOK 2010 Low- to mid-single-digit currency-neutral sales decline Net sales reach € 10.4 billion; Low- to mid-single-digit currency-neutral sales increase Group currency-neutral sales decrease 6% Bring major new concepts, technology evolutions and Major 2009 product launches: Bring major new concepts, technology evolutions and revolutions to market adidas: revolutions to market, such as: adiSTAR® Salvation running shoe adidas: F50i football boot F50 football boot Reebok: miCoach training system EasyTone™ shoe Reebok: TaylorMade-adidas Golf: ZigTech™ training shoe R9™ metalwood, Burner® family of irons TaylorMade-adidas Golf: Penta TP ball R9™ SuperTri Driver Rockport: Rockport: DresSport® 2 TruWALK footwear collection Reebok-CCM Hockey: Reebok-CCM Hockey: U+™ Crazy Light Stick 11K skates On a currency-neutral basis: On a currency-neutral basis: On a currency-neutral basis, sales to increase: low- to mid-single-digit sales decline for adidas Wholesale segment sales decline 9% at a low- to mid-single-digit rate for Wholesale segment Retail segment sales increase 7% segment at least stable sales for Reebok segment Total adidas brand sales decline 5% at a high-single-digit rate for Retail segment low-single-digit sales increase at TaylorMade-adidas Total Reebok brand sales decline 8% at a low-single-digit rate for Other Businesses Golf Sales of Other Businesses decline 4% TaylorMade-adidas Golf revenues decline 2% Gross margin decline (2008: 48.7%) Gross margin: 45.4% Increase gross margin to a level between 46% and 47% Operating margin decline (2008: 9.9%) Operating margin: 4.9% Increase operating margin to a level around 6.5% Reduce operating working capital as a percentage of Operating working capital as a percentage of sales Further reduction of operating working capital as a sales (2008: 24.5%) improves to 24.3% percentage of sales Capital expenditure range € 300 million – € 400 million Capital expenditure: € 240 million Capital expenditure range € 300 million – € 400 million Reduce net borrowings (2008: € 2.189 billion) Net borrowings reduced substantially to € 917 million; Further reduction of net borrowings; year-end financial leverage: 24.3% net borrowings/EBITDA ratio to be maintained below 2 Net income attributable to shareholders and diluted Net income attributable to shareholders declines 62% Diluted earnings per share to increase to a level earnings per share decline (2008: € 642 million and to € 245 million; between € 1.90 and € 2.15 € 3.07, respectively) diluted earnings per share decline 60% to € 1.22 Further increase shareholder value adidas AG share price increases 39%; Further increase shareholder value dividend of € 0.35 per share (subject to Annual General Meeting approval) EVERY PRODUCT TELLS A STORY We know the passion and heart that goes into sport. The effort and skill that goes into being the best. We are privileged to be part of so much. 2009 was adidas’ 60th birthday, 20 years since the birth of Reebok’s legendary “The Pump™” and the 30th anniversary since TaylorMade’s metalwoods revolutionised the world of golf. All reminding us of the heritage and inspirational events we have experienced. Of stories about the greatest talents performing in our products. Moments that our brands have shaped and our products have helped achieve. These stories fuel our passion, our spirit for innovation, our ambition to be better, in our products, in our business, in everything we do. Ensuring our products continue making sporting history. Every product tells a story. version: Sat, 10-03-06, 01:36 PM 1st corr 2nd corr 3rd corr 4th corr 5th corr page 1 - 01_Intro.indd F50i TUNiT™ 20 09 Lionel Messi is the best-known F50 player LIONEL MESSI in the world. He knows he can rely fully ARGentina on this boot. It is the first football boot with a single-layer upper, the SprintSkin. The incorporated lace cover provides a perfect contact surface; the synthetic material is supple and water-repellent. The TUNiT™ technology enables players to combine single components individually to adapt to their specific needs, the weather and the ground. version: Sat, 10-03-06, 01:36 PM 1st corr 2nd corr 3rd corr 4th corr 5th corr page 2 - 01_Intro.indd ROME, ITALY – MAY 27, 2009 It’s the 70th minute of the UEFA Champions League Final. Xavi centres the ball. Messi jumps up to score a phenomenal header, the second goal for Barcelona and also the decisive goal of the match: 2-0 for FC Barcelona against titleholders Manchester United. Overjoyed, he kisses his new F50i. The picture goes around the world. Messi is later in the year awarded European Player of the Year and FIFA World Player of the Year. EVERY PRODUCT TELLS A STORY adidas 3 version: Sat, 10-03-06, 01:36 PM 1st corr 2nd corr 3rd corr 4th corr 5th corr page 3 - 01_Intro.indd NFL Pro Lite Fade Gloves 20 09 This full compression glove with a one-piece SANTONIO back for uncompromised fit incor porates HOLMES the Griptonite™ MAX all-weather palm treatment, providing a secure grip in all USA conditions. Santonio Holmes’ touchdown proved the effectiveness of the Griptonite™ MAX treatment. In addition, a single-layer mesh with Ultra-lite technology has been incorporated to increase air flow and moisture wicking, while the Keystone thumb with independent construction adds support and durability. version: Sat, 10-03-06, 01:36 PM 1st corr 2nd corr 3rd corr 4th corr 5th corr page 4 - 01_Intro.indd TAMPA BAY/FLORIDA, USA – FEBRUARY 1, 2009 35 seconds remaining. 23-20 against the Pittsburgh Steelers at the Super Bowl XLIII. Roethlisberger passes the ball to Santonio Holmes who is surrounded by Arizona Cardinals defenders. Holmes manages to pull down the pass just inside the corner of the end zone. Touchdown. Holmes is the man of the match, the MVP. Afterwards, he autographs his winning gloves which are then auctioned, benefiting the Sickle Cell Disease Association of America, Inc. EVERY PRODUCT TELLS A STORY Reebok 5 version: Sat, 10-03-06, 01:36 PM 1st corr 2nd corr 3rd corr 4th corr 5th corr page 5 - 01_Intro.indd r7® TP Iron 20 09 Excellent iron play was critical to Yong-Eun YONG-EUN Yang’s victory at the 2009 PGA Championship, YANG where he played the TaylorMade r7® TP, the first iron to incorporate TaylorMade’s Inverted South KORea Cone Technology (ICT). Originally developed for TaylorMade drivers, ICT increases the area of the clubface that delivers high ball speed, promoting greater forgiveness and distance on off-centre hits. ICT has proved so valuable that it has been incorporated into every TaylorMade iron since the r7® TP, including the current Burner®, R9™ and R9™ TP models. version: Sat, 10-03-06, 01:36 PM 1st corr 2nd corr 3rd corr 4th corr 5th corr page 6 - 01_Intro.indd HAZELTINE/MINNESOTA, USA – AUGUST 16, 2009 Yong-Eun Yang hits a towering shot. 197 yards. A burst of emotion. Yang acts out his feelings. He now knows he can win. Indeed, it’s this drive which clinches victory for Yang at the PGA Championship, making him the first golfer to overtake Tiger Woods in a major championship, in which Woods led until the final round.
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