Statement of Financial Position and Statement of Cash Flows Information

Assets

At the end of December 2022, total assets were down 8% to € 20,296 million from € 22,137 million in the prior year, as the decrease of cash and cash equivalents as well as of assets classified as held for sale more than offset the increase of inventories, other current financial assets, and other current assets.

Total current assets decreased 16% to € 11,732 million at the end of December 2022 compared to € 13,944 million in 2021. Cash and cash equivalents were down 79% to € 798 million at the end of December 2022 from € 3,828 million in the prior year. This reduction is mainly due to the negative cash flow from operating activities, the repurchase of adidas AG shares, as well as the dividend payment for the year 2021. This decline was only partly offset by the proceeds from the divestiture of the Reebok business and the issuance of two bonds. Currency effects had a negative impact on cash and cash equivalents in an amount of € 19 million. Inventories increased 49% to € 5,973 million at the end of December 2022 from € 4,009 million in 2021. The increase was mainly driven by higher product and freight costs, a different order pattern as a result of longer transportation lead times, the termination of the Yeezy partnership, as well as lower prior year comparables due to last year’s impact from the factory lockdowns in Vietnam. On a currency-neutral basis, inventories also increased 49%. SEE NOTE 08

Inventories € in millions

Accounts receivable increased 16% to € 2,529 million at the end of December 2022 (2021: € 2,175 million), reflecting the company’s strong growth in Western markets as well as lower prior year comparables due to last year’s impact from the factory lockdowns in Vietnam. On a currency-neutral basis, receivables were also up 16%. Other current financial assets increased to € 1,014 million (2021: € 745 million), mainly related to deferred considerations of € 241 million with regards to the divestiture of the Reebok business. Other current assets were up 24% to € 1,316 million at the end of December 2022 (2021: € 1,062 million) due to the increase of tax receivables. Assets classified as held for sale decreased to € 0 million (2021: € 2,033 million) reflecting the divestiture of the Reebok business. SEE NOTE 06 SEE NOTE 07 SEE NOTE 09

Accounts receivable € in millions

Total non-current assets increased 5% to € 8,563 million at the end of December 2022 from € 8,193 million in 2021, mainly related to an increase in fixed assets and other non-current financial assets. Fixed assets were up 4% to € 6,935 million at the end of December 2022 versus € 6,696 million in 2021. Right-of-use assets increased 4% to € 2,665 million (2021: € 2,569 million) due to additions as well as positive currency effects. Goodwill was up 3% to € 1,260 million (2021: € 1,228 million) reflecting positive currency effects and other intangible assets increased 22% to € 429 million (2021: € 352 million) mainly due to additions in software including own created software and new patents. Other non-current financial assets increased 110% to € 336 million from € 160 million at the end of 2021, mainly related to the earn-out component with regard to the divestiture of the Reebok business. Deferred tax assets amounted to € 1,216 million compared to € 1,263 million in 2021. SEE NOTE 35

Liabilities and equity

Total current liabilities were up 3% to € 9,257 million at the end of December 2022 from € 8,965 million in 2021. Short-term borrowings increased to € 527 million at the end of December 2022 (2021: € 29 million), mainly reflecting the reclassification of the equity-neutral convertible bond of € 500 million due to its maturity in 2023. Accounts payable were up 27% to € 2,908 million at the end of December 2022 versus € 2,294 million in 2021, mainly reflecting higher sourcing volumes as well as higher product and freight costs. On a currency-neutral basis, accounts payable also increased 27%. Current lease liabilities increased to € 643 million at the end of December 2022 versus € 573 million in 2021 mainly due to lease modifications and remeasurements. Other current financial liabilities were up 17% to € 424 million from € 363 million in 2021, mainly related to higher customs liabilities. Other current provisions increased 9% to € 1,589 million at the end of December 2022 versus € 1,458 million in 2021, mainly due to increased provision for returns, partially offset by reduced provisions for personnel. Current accrued liabilities were down 10% to € 2,412 million at the end of December 2022 from € 2,684 million in 2021, due to lower accruals for personnel costs related to the company’s annual bonus for its bonus-eligible employees. Other current liabilities were up 4% to € 452 million at the end of December 2022 from € 434 million in 2021. Liabilities classified as held for sale decreased to € 0 million at the end of December 2022 (2021: € 594 million), related to the divestiture of the Reebok business. SEE NOTE 21 SEE NOTE 22

Accounts payable € in millions

Total non-current liabilities increased to € 5,688 million at the end of December 2022 compared to € 5,334 million in the prior year. Long-term borrowings were up 19% to € 2,946 million at the end of December 2022 compared with € 2,466 million in the prior year. This increase is mainly due to the placement of two new bonds with the overall amount of € 1,000 million in November 2022 and was partially offset by the reclassification of the equity-neutral convertible bond of € 500 million to short-term borrowings due to its maturity in 2023. Non-current lease liabilities increased 4% to € 2,343 million at the end of December 2022 from € 2,263 million in the prior year as early lease terminations related to the winding down of the adidas business in Russia were more than offset by increases of other lease contracts and currency effects. Other non-current financial liabilities were down 14% to € 44 million at the end of December 2022 from € 51 million in the prior year, related to embedded derivative financial instruments. Deferred tax liabilities increased 11% to € 135 million at the end of December 2022 from € 122 million in the prior year. Other non-current provisions decreased 41% to € 88 million at the end of December 2022 from € 149 million in the prior year, reflecting reduced provisions for personnel. SEE NOTE 23

Shareholders’ equity decreased 34% to € 4,991 million at the end of December 2022 versus € 7,519 million in 2021, mainly driven by the repurchase of adidas AG shares for a total consideration of € 2,500 million, the dividend of € 610 million paid to shareholders for the full year 2021, the decrease of hedging reserves of € 63 million, and a negative currency effect of € 70 million. This development could only be partially offset by the net income generated in 2022 as well as by the positive effect of the remeasurement of defined benefit obligations. SEE NOTE 26

Equity ratio^1,2 in %

Operating working capital

Operating working capital increased 44% to € 5,594 million at the end of December 2022 compared to € 3,890 million in 2021. On a currency-neutral basis, operating working capital was up 44%. Average operating working capital as a percentage of sales increased 4.0 percentage points to 24.0% (2021: 20.0%), reflecting the strong inventory increase as well as the rise in accounts receivable.

Average operating working capital^1,2 in % of net sales³

Investment analysis

Capital expenditure is defined as the total cash expenditure for the purchase of tangible and intangible assets (excluding acquisitions and right-of-use assets according to IFRS 16). Capital expenditure increased 4 % to € 695 million (2021: € 667 million). Capital expenditure for property, plant, and equipment was up 2% to € 504 million compared to € 494 million in the prior year. The company invested € 191 million in intangible assets (2021: € 173 million). Depreciation and amortization, excluding impairment losses and reversal of impairment losses of tangible and intangible assets, increased 3% to € 530 million in 2022 (2021: € 516 million).

Controlled space initiatives, which comprise investments in new or remodeled own retail and franchise stores as well as in shop-in-shop presentations of our products in our customers’ stores, accounted for 43% of total capital expenditure (2021: 44%). Expenditure for IT and logistics represented 29% and 12%, respectively (2021: 27% and 19%, respectively). In addition, expenditure for administration accounted for 15% (2021: 10%). From a segmental perspective, the majority of the capital expenditure was recorded centrally at headquarter level, which accounted for 46% (2021: 49%). From a regional perspective, capital expenditure in EMEA accounted for 21% (2021: 19%) of the total capital expenditure, Greater China for 11% (2021: 19%), on par with North America with 11% (2021: 4%), followed by Asia-Pacific with 8% (2021: 5%), and Latin America with 4% (2021: 3%).

Capital expenditure by type in %

Capital expenditure by segments in %

Liquidity analysis

Net cash used in operating activities amounted to € 543 million in 2022 (2021: € 3,192 million net cash generated). Net cash used in continuing operating activities was € 458 million (2021: € 2,873 million net cash generated). This development was mainly due to lower operating profit and higher level of inventory and accounts receivable in 2022 compared to the prior year.

In 2022, net cash generated from investing activities reached a level of € 495 million (2021: € 424 million net cash used) and net cash generated from continuing investing activities amounted to € 495 million (2021: € 415 million net cashed used). This development was mainly due to the proceeds related to the divestiture of the Reebok business in 2022.

Net cash used in financing activities amounted to € 2,963 million (2021: € 2,991 million) and net cash used from continuing financing activities amounted to € 2,957 million (2021: € 2,952 million). This is a result of the proceeds from the issuance of two bonds, repayments of lease liabilities, the repurchase of adidas AG shares, as well as the dividend payment for the year 2021.

Exchange rate effects negatively impacted the company’s cash position by € 19 million (2021: positive impact of € 57 million).

As a result of all these developments, cash and cash equivalents decreased by € 3,031 million to € 798 million at the end of December 2022 compared to € 3,828 million at the end of December 2021.

Change in cash and cash equivalents € in millions

Adjusted net borrowings at December 31, 2022, amounted to € 6,047 million, compared to € 2,082 million in 2021. The company’s ratio of adjusted net borrowings over EBITDA amounted to 3.2 at the end of December 2022 (2021: 0.7).

In 2022, the methodology for calculating adjusted net borrowings was revised to align with broader market practice and the approach of rating agencies. The main change of the methodology revision was the elimination of income tax adjustments from net borrowings. SEE TREASURY

Adjusted net borrowings/EBITDA^1,2,3 € in millions

Off-balance-sheet items

The company’s most significant off-balance-sheet items are commitments for promotion and advertising as well as other contracts. At the end of December 2022, financial commitments for promotion and advertising decreased 13% to € 4,942 million in 2022 (2021: € 5,712 million). Minimum future payments for other contracts were € 356 million at December 31, 2022, compared to € 396 million at the end of December 2021, representing a decrease of 10%. SEE NOTE 38 SEE NOTE 39