Management Assessment of Performance, Risks and Opportunities, and Outlook


We communicate our financial targets on an annual basis. We also provide updates throughout the year as appropriate. In 2020, financial results were significantly impacted by the negative effects of the coronavirus pandemic. Exceptional growth in e-commerce could only partially compensate for the adverse effects of far-reaching lockdown measures and temporary physical store closures. As purchasing behavior continued to shift toward online channels, our digital platforms facilitated consumer engagement, seamless personal experiences and brand building even in times of social distancing. Against this backdrop, accelerating global trends such as the increasing penetration of sportswear () and rising awareness for health and wellness further supported the company’s sequential recovery throughout the year. As uncertainties toward the financial impact of the coronavirus pandemic prevailed throughout 2020, especially around the extension of lockdowns and store closures, the company was not able to provide an outlook for the full year 2020 including that impact. Instead, we provided quarterly outlook statements and delivered top- and bottom-line results in line with these guidances. See Economic and Sector Development

Company targets versus actual key metrics










Currency-neutral sales development




to increase at a rate between 6% and 8%




to increase at a mid- to high-teens rate

Gross margin




to decrease slightly compared to the prior year level of 52.0%




to increase to a level of around 52%

Operating margin




to increase between 0.2pp and 0.5pp to a level between 11.5% and 11.8%




to increase to a level of between 9% and 10%

Net income from continuing operations (€ in millions)




to increase at a rate between 10% and 13% to a level between € 2.10 billion and € 2.16 billion




to increase to a level of between € 1.25 billion and € 1.45 billion

Average operating working capital in % of net sales




slight increase




to decrease to a level of below 20%

Capital expenditure4 (€ in millions)




to increase to a level of around € 800 million




to increase to a level of around € 700 million


As published on March 11, 2020 and withdrawn in an ad-hoc announcement on April 14, 2020 due to the unpredictable impacts of the coronavirus pandemic


Results 2020 including Reebok.


Outlook 2021 excluding Reebok; relative increases/decreases disclosed here refer to results 2020 excluding Reebok.


Excluding acquisitions and leases.

In 2020, revenues decreased 14% on a currency-neutral basis, due to currency-neutral sales declines across all market segments except for Russia/CIS, where revenues remained flat. Our direct-to-consumer business grew at a high single-digit rate, with e-commerce recording another year of exceptional growth. In the second half of the year, our business started to recover as the company focused on healthy inventories, profitable sell-through and disciplined wholesale sell-in. Accordingly, gross margin ended the year at 49.7%, reflecting a decrease of 2.3 percentage points. A more favorable channel mix driven by exceptional growth in e-commerce and lower sourcing costs partially compensated for a less favorable pricing mix due to increased promotional activity and negative currency developments. As anticipated, the operating result turned positive in the second half of the year while operating profit for the year 2020 as a whole declined 72% to € 751 million. Accordingly, operating margin decreased 7.5 percentage points to 3.8%. Net income from continuing operations decreased 78% to € 429 million. See Income Statement

In 2020, average operating working capital as a percentage of sales ended the year at a level of 23.5%, which reflects a year-over-year increase of 5.4 percentage points, despite the company’s inventory normalization progressing according to plan in the second half of the year. Capital expenditure decreased 38% to € 442 million in 2020, as the company prioritized short-term financial flexibility amid heightened uncertainty due to the coronavirus pandemic. See Statement of Financial Position and Statement of Cash Flows

Beyond our financial performance, we also actively manage non-financial KPIs. See Internal Management System

In 2020 the strength of our brands was mainly reflected in the exceptional growth in e-commerce, while we protected market share gains in a promotional environment in strategic growth markets North America and Greater China.

Our diligence and discipline in sustainability matters continues to yield strong results and recognition for our company. In 2020, 71% of all polyester used for our apparel and footwear ranges was already recycled polyester. With that, we are ahead of our plan to use only recycled polyester from 2024 onward. Furthermore, through collective measures and technical support, our suppliers were able to exceed all our five-year environmental targets on energy, water, and waste. In 2020, we continued to leverage People Pulse as an important feedback channel for our corporate employees as we maintained our global approach to measure the level of employee satisfaction. In a survey conducted in September, employee Net Promoter Scores (eNPS) increased compared to the last survey conducted at the end of 2019. Therefore, feedback of the employees was very positive. We continued to openly discuss results and drive areas of improvement, while gaining insights toward the employee experience at adidas.  See Sustainability See Our People

Finally, despite interruptions in our distribution centers due to the coronavirus pandemic especially in the first half of the year, the on-time in-full (OTIF) deliveries to our customers and own-retail stores were only slightly below the prior year level. See Global Operations


Our Risk Management team aggregates all risks and opportunities identified through the half-yearly risk and opportunity assessment process. Results from this process are analyzed and reported to the Executive Board accordingly. In addition, the Executive Board discusses and assesses risks and opportunities on a regular basis. Compared to the prior year, our assessment of certain risks has changed in terms of likelihood of occurrence and/or potential financial impact. As a result, the overall adidas risk profile has slightly worsened compared to the prior year. However, considering the potential financial impact as well as the likelihood of the risks explained in this report materializing, and considering the strong balance sheet as well as the current business outlook, we do not foresee any material jeopardy to the viability of the company as a going concern. In 2020, the company obtained investment grade ratings from Standard & Poor’s and Moody’s and strengthened its liquidity and financial flexibility. We remain confident that our earnings strength forms a solid basis for our future business development and provides the resources necessary to pursue the opportunities available to the company. See Risk and Opportunity Report


In March 2021, adidas unveiled ‘Own the Game’, our strategy 2025, which defines strategic priorities and objectives for the period up to 2025. The strategy is focused on capturing consumer-driven opportunities which, in turn, is expected to spur above industry top- and sustainable bottom-line growth.

We project currency-neutral revenues to increase at a rate of between 8% and 10% per annum on average between 2021 and 2025. Our bottom-line is expected to grow sustainably, as we expect net income from continuing operations to increase by an average of between 16% and 18% per annum in the four-year period between 2021 and 2025. See Strategy See Outlook

Following the revenue decline experienced in 2020 due to the coronavirus pandemic, we project significant top-line improvements in 2021. In addition, long-term industry trends such as increasing sports participation, the growing penetration of sports-inspired apparel and footwear (‘athleisure’) and digitalization are set to drive sales growth. As a result, we expect sales to increase at a mid- to high-teens rate on a currency-neutral basis in 2021. An increase in gross margin and continued strict cost control will also drive strong profitability improvements. Supported by operating margin expansion, net income from continuing operations is projected to increase to a level of between € 1.25 billion and € 1.45 billion in 2021. This outlook has been prepared excluding the Reebok business. See Outlook

We believe our outlook for 2021 realistically describes the underlying development of the company. However, the outlook for 2021 as outlined in this report is subject to change depending on further developments related to the coronavirus pandemic. In addition, ongoing uncertainties regarding the economic outlook and consumer sentiment in both developed and developing economies as well as re-escalating trade tensions represent risks to the achievement of our stated financial goals and aspirations. No other material event between the end of 2020 and the publication of this report has altered our view. See Outlook


The term is composed of the words athletic and leisure. It describes a fashion trend of sportswear no longer being just meant for training but increasingly shaping everyday clothing.

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