Strategy

With sport playing an increasingly important role in more and more people’s lives, both on and off the field of play, we operate in a highly attractive industry. Based on our deep understanding of our consumer and the authenticity of the adidas brand, we push the boundaries of products, experiences and services. We do so according to our strategy ‘Own the Game,’ which allows us to fully capitalize on the acceleration of favorable long-term structural trends

OUR PURPOSE: THROUGH SPORT, WE HAVE THE POWER TO CHANGE LIVES

We will always strive to expand the limits of human possibilities, to include and unite people in sport, and to create a more sustainable world.

OUR MISSION: TO BE THE BEST SPORTS BRAND IN THE WORLD

We are the best when we are the credible, inclusive, sustainable leader with a first or second position regarding market share in each strategic category in the long term.

OUR ATTITUDE: IMPOSSIBLE IS NOTHING

We are rebellious optimists driven by action to shape a future together and we see the world with possibilities where others only see the impossible.

NEW STRATEGY ‘OWN THE GAME’ FOR THE PERIOD UNTIL 2025

‘Own the Game’ is our strategy that guides us through to 2025 – a plan rooted in sport. Sport is adidas’ past, present and future. ‘Own the Game’ puts the consumer at the heart of everything we do and is brought to life by our people. Our strategic focus is on increasing brand credibility, elevating the experience for our consumers and pushing the boundaries in sustainability. The execution of our strategy is enabled by a mindset of innovation across all dimensions of our business as well as our digital transformation. We own the game and drive significant growth.

CONSUMER

Our consumers are at the heart of ‘Own the Game.’ Consumers drive structural trends in our industry through their preferences and behaviors. They strive to live active and healthy lives, they wish to blend sport and lifestyle, and they are digital by default as well as sustainable by conviction. ‘Own the Game’ captures those consumer-driven opportunities and carves out new ones for their benefit. In 2025, ‘Own the Game’ will not only have delivered overproportionate growth for adidas, but also deepened relationships with our consumers, as we continue to actively live our purpose ‘Through sport, we have the power to change lives.’

PEOPLE

To successfully deliver on our five-year strategy, we empower our people to truly own the game. Our people strategy comprises three key pillars: Leadership, Betterment, and Performance, underpinned by Diversity, Equity, and Inclusion.

• Leadership: We grow our people to demonstrate leadership at all levels of the organization, to empower and inspire others, so that everyone can realize their potential in our company. By taking ownership, showing courage and driving innovation our people can own the game.
• Betterment: We are committed to building the strategic capabilities required to execute our strategy. We do so by creating an employee experience that attracts talent and provides relevant learning and career-building opportunities to upskill and reskill for the future.
• Performance: We evolve our performance management philosophy to clearly articulate our ambition to win, to play by our values, to embed a strong feedback culture, and to recognize both outstanding individual and team results.
• Diversity, Equity, and Inclusion: We are committed to providing an equal starting line for all our people, ensuring that everyone has the same career opportunities. One of our commitments is to increase the share of women in management positions (Director level and above) globally to more than 40% by 2025.

CREDIBILITY

We are a leading brand thanks to our credibility in both sport and culture. To continue to excite our consumers with innovative concepts that support our mission, we sharpen our brand, refine our product offering and leverage partnerships to further enhance our credibility with consumers.

• Sport: We focus on the most important sport categories: Football, Training, Running, and Outdoor. Football is the biggest sport in terms of viewership, while Running, Training, and Outdoor are the biggest participation sports. Our products in these categories are built for sport and worn for sport.
• Lifestyle: To tap into the biggest commercial opportunity for our brand, we sharpen our brand architecture by introducing a new consumer proposition called ‘Sportswear’. These products are born from sport and worn for style. At the same time, we extend Originals, which is inspired by sport and worn on the street, into the premium segment through top-quality materials and craftsmanship.
• Women: We execute a cross-category plan to achieve product excellence and elevate the women’s experience through our membership program to become her indispensable sports brand. Our goal is to grow currency-neutral net sales for our Women’s business at a mid-teens rate per annum on average between 2021 and 2025, thereby significantly increasing the Women’s share of our overall business.
• Partnerships: We amplify our credibility through our partnerships by leveraging their power, authenticity, and reach. We expand our portfolio of partners, which already includes Beyoncé, Jerry Lorenzo, Kanye West, Pharrell Williams, Stella McCartney, and Yohji Yamamoto, all of whom continue to play a significant role in wowing our consumers on the lifestyle side. Likewise, we continue to leverage our partnerships with the biggest symbols in sport, be it with teams like Bayern Munich or Real Madrid, athletes like Lionel Messi or Mikaela Shiffrin, or events like the Boston and Berlin Marathons.

EXPERIENCE

To grow long-term relationships with our consumer, we excite and empower them by creating personalized experiences in both digital and physical spaces. With this in mind, we accelerate our transformation into a direct-to-consumer-led (‘DTC-led’) business built around membership.

• Membership: With the launch of our membership program in 2018, we laid the foundation for offering personalized experiences to our most valuable consumers. Through membership, we reward engagement and purchasing activity by offering exclusive hype products, access to launches and special events, and more. We are now ready to take this to the next level with the goal of increasing our member base to around 500 million by 2025. In 2021, we reached 240 million members and are well on track to achieve our 2025 ambition.
• DTC-led: E-commerce continues to be our most important store. Both adidas.com and the adidas app are seeing enhancements across the entire consumer journey. By 2025, our e-commerce business is expected to account for between € 8 billion and € 9 billion of our company’s net sales. In 2021, we reached a level of € 3.942 billion. While e-commerce is the pinnacle of our DTC strategy, our physical stores continue to play a crucial role in creating a physical and emotional connection with our brand. Retail formats will be digitized with fully fledged omni-channel capabilities. The DTC business, comprising our e-commerce as well as our physical stores, is projected to account for around half of the company’s net sales by 2025. In 2021, our DTC business accounted for 38% of the company’s net sales. We also continue to leverage our strong relationships with strictly selected wholesale partners and ‘win-with-the-winners’ to ensure a holistic experience for the consumer no matter the point of sale.
• Key Cities: We are building on our ‘Key Cities’ portfolio of Tokyo, Shanghai, Paris, London, New York and Los Angeles by adding Mexico City, Berlin, Moscow, Dubai, Beijing, and Seoul. These cities represent the beating heart of our global consumer experience and exert influence on the rest of the world, while at the same time offering commercial opportunities as urbanization continues.
• Strategic markets: We focus on Greater China, North America and EMEA to bring exciting consumer experiences to life, pursuing a tailored approach that appeals to local trends. Our ambition is to gain market share in all three strategic markets, which are expected to jointly account for around 90% of net sales growth until 2025.

SUSTAINABILITY

Our commitment to sustainability is truly holistic and deeply embedded into how we have done business for over two decades. It’s rooted in our purpose ‘Through sport, we have the power to change lives.’ As we continue to be pioneers in sustainability, we move from strong stand-alone initiatives to a comprehensive consumer-facing program with a sustainability offering at scale.

• What we offer: We keep pushing the boundaries of our sustainable offering, so that our consumers are able to choose from a uniquely comprehensive range. By 2025, nine out of ten of our articles will be sustainable. How we do this revolves around how we expand and innovate our 3-loops: made from recycled materials, made to be remade, or made with natural and renewable materials. We define articles as sustainable when they show environmental benefits versus conventional articles due to the materials used, meaning they are – to a significant degree – made with environmentally preferred materials.
• What we do: We are committed to reducing the CO₂e footprint of our product offerings as we work to reach climate neutrality by 2050. We achieve this through initiatives such as driving zero-carbon within our own operations and promoting environmental programs along our entire value chain in close cooperation with our suppliers.
• What we say: We are vocal about our efforts that focus on creating low-impact products that are made to be remade. To guide our consumer to make more sustainable choices, we communicate clearly and consistently, with simple measures that make it easy to understand our ambitions and our progress.

INNOVATION AND DIGITAL

Two strategic enablers set us up for success. The first is applying a mindset of deep and broad innovation across all dimensions of our business. The second is using the speed and agility of Digital throughout our entire value chain. These strategic enablers are particularly powerful when it comes to executing on the three strategic focus areas – Credibility, Experience, and Sustainability – that support us in intensifying our focus on the consumer and driving growth.

FINANCIAL AMBITION FOR 2025

‘Own the Game’ is designed to yield growth in terms of revenue, profitability, and cash generation, which in turn creates long-term value for our shareholders. Therefore, we are focused on rigorously driving execution and managing all of the factors under our control, which enables us to:

• Achieve top-line growth above industry average: We aim to increase currency-neutral revenue at a rate of between 8% and 10% per annum on average in the period between 2021 and 2025, where 2021 is the base year.
• Further expand both gross and operating margin: We expect to expand our gross margin to a level of between 53% and 55% and our operating margin to a level of between 12% and 14% by 2025.
• Grow our bottom line sustainably: We plan to grow our net income from continuing operations by an average of between 16% and 18% per annum in the period between 2021 and 2025, where 2021 is the the base year.
• Invest in future organic growth: We are committed to reinvesting between 3% and 4% of net sales into our business by means of annual capital expenditure.
• Deliver attractive cash return to shareholders: Based on the material growth in terms of revenue and profitability, we will generate substantial cumulative free cash flow until 2025. The majority of it – between € 8 billion and € 9 billion – will be made available and distributed to shareholders through a consistent dividend pay-out in a range between 30% and 50% of net income from continuing operations, complemented by share buybacks. In 2021, we bought back shares in an amount of € 1 billion. Including the dividend payment of € 585 million in May, we already returned nearly € 1.6 billion to our shareholders during the first year of ‘Own the Game.’

As a global leader in our industry with a strong strategy in place, we are very well positioned for the years ahead.