5/1/18 08:51 Overview of Adidas Company Description (Euros in millions, except per share data) Company Description Financial Summary and Valuation Exchange: DB: ADS Founded: 1924 Headquarters: Herzogenaurach, Germany Employees: 53,731 n Adidas AG Designs, manufactures, and sells sports apparel and accessories n Operates several brands including Adidas, Reebok, and TaylorMade n As of Q3 2015, Adidas operated a total of 2,679 stores, of which 850 were factory outlets Relative 5-Year Stock Price Performance Revenue Breakdown By Geography By Brand 250 200 +95.6% 150 100 50 0 11/29/10 11/29/11 11/29/12 11/29/13 11/29/14 ADS.DE S&P 500 2014A Revenue: €14.5bn Source: Capital IQ, Company reports, own estimates Ben Hoban 1
[email protected] 5/1/18 08:51 Overview of Adidas Adidas Relative 10-Year Share Price Performance Over the past three years, despite performing on par with S&P, ADS has underperformed sports apparel leaders UA and NKE, which are up more than 250% and 150% Source: Capital IQ Ben Hoban 2
[email protected] 5/1/18 08:51 Investment Thesis Bridge Over Troubled Water Where has Adidas gone wrong, and what can it do to right the ship? Wall Street Consensus 2015E to 2018E Contribution to EPS Growth 5.50 € Overhead operating margin € 0.23 lag compared to peers provides opportunity € 0.05 € 0.03 5.00 € € 0.73 4.50 € € 0.08 € 0.01 € 0.75 Golf is currently distracting 4.00 € from overall Adidas Group growth A&P spend will allow for continued improvement in core brands 3.50 € Net Revenues 3.00 € EPS Before Adidas Reebok TaylorMade