Annual Report 2022


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In 2023, we expect macroeconomic challenges and geopolitical tensions to continue dampening consumer sentiment. Elevated recession risks in Europe and North America as well as uncertainty around the speed and extent of the recovery in Greater China will also affect the sporting goods industry. In addition, company-specific challenges such as high inventory levels and the termination of the Yeezy partnership are forecast to weigh on the company’s operational and financial performance. While we continue to review future options for the utilization of our Yeezy inventory, our FY 2023 guidance already accounts for the significant adverse impact from not selling the existing stock. Compared to the prior year this would lower revenues by around € 1,200 million and operating profit by around € 500 million in 2023. Should we irrevocably decide not to repurpose any of the existing Yeezy product, this would result in the write-off of the existing Yeezy inventory and would lower the operating profit by an additional around € 500 million this year. In addition, we expect one-off costs of up to € 200 million in 2023 which are part of a strategic review the company is currently conducting. Against this background, we project currency-neutral sales to decline at a high-single-digit rate and expect to report an operating loss of € 700 million in 2023.

Forward-looking statements

This Management Report contains forward-looking statements that reflect Management’s current view with respect to the future development of our company. The outlook is based on estimates that we have made on the basis of all the information available to us at the time of completion of this Annual Report. In addition, such forward-looking statements are subject to uncertainties which are beyond the control of the company. In case the underlying assumptions turn out to be incorrect or described risks or opportunities materialize, actual results and developments may materially deviate (negatively or positively) from those expressed by such statements. adidas does not assume any obligation to update any forward-looking statements made in this Management Report beyond statutory disclosure obligations. SEE RISK AND OPPORTUNITY REPORT

Global economic growth to decelerate sharply in 20231

Global gross domestic product (GDP) is projected to grow only 1.7% in 2023 in light of a further tightening of monetary policy as global central banks aim to keep soaring inflation under control. Additionally, the war in Ukraine is expected to continue to impact energy and commodity prices around the globe. The combination of these factors increases recession risk particularly in Europe and North America, while economic activity in Greater China remains vulnerable due to risks around longer-than-expected coronavirus pandemic-related disruptions and weaker external demand. In addition, all regions continue to face downside risks from potential additional geopolitical conflicts, supply chain disruptions, and resurgences of covid-19. Overall, the subdued outlook is accompanied by consumer sentiment falling to multi-year lows. Hence, advanced economies are forecast to see growth of only 0.5%. Growth in developing economies is projected at 3.4% in 2023 as tightening financial conditions in advanced economies paired with debt distress are supressing economic activity.

Sporting goods industry to face several challenges in 2023

The global sporting goods industry will face several challenges in 2023. Climbing energy and raw material prices have been increasing input costs, while multi-year high inflation is negatively affecting household savings and discretionary spending alike. On the contrary, the gradual wind down of strict lockdown measures in Greater China are expected to bolster sports participation and increase store traffic in the region. However, the speed and extent of recovery – particularly for Western brands – remain unclear. At the same time, the cadence of major sports events, such as the FIFA Women’s World Cup Australia & New Zealand 2023, has fully normalized from coronavirus pandemic-induced disruptions and is expected to support industry growth. Moreover, the sporting goods industry is expected to remain fundamentally attractive in the long-term, as existing global trends such as ‘athleisure,’ increasing sports participation rates and rising health and fitness awareness are continuing to accelerate. In addition, consumers are increasingly basing their purchasing decisions on sustainability factors, urging companies to drive meaningful change. The risks of a global economic downturn, rising geopolitical tensions and the resulting adverse effects on consumer spending also continue to exist for the sporting goods industry.

2023 Outlook





2023 Outlook

Net sales (€ in millions)




to decline at a high-single-digit rate2

Operating margin/ operating profit/loss




operating loss of € 700 million

Average operating working capital in % of sales




to reach a level of between 25% and 26%

Capital expenditure (€ in millions)3




to reach a level of around € 600 million


Figures reflect continuing operations as a result of the reclassification of the Reebok business to discontinued operations.




Excluding acquisitions and leases.

Currency-neutral sales to decline high-single-digits in 2023

In 2023, we expect our currency-neutral revenue development to be impacted by ongoing macroeconomic challenges and geopolitical tensions. In addition, elevated recession risks in Europe and North America as well as uncertainty around the speed and extent of the recovery in Greater China persist. Our revenue development will also be impacted by our initiatives to significantly reduce elevated inventory levels, particularly in Greater China, North America, and Europe. In addition, while continuing to review future options for the utilization of our Yeezy inventory, our guidance already accounts for the revenue loss of around € 1,200 million from not selling the existing stock. As a result, we expect currency-neutral revenues to decline at a high-single-digit rate in 2023.

Currency-neutral revenues to decrease in key market segments

While currency-neutral revenues in EMEA and North America are expected to decline significantly in 2023, sales in Greater China are expected to be around the prior year level. Revenues in Asia-Pacific and Latin America are expected to increase versus the prior year level on a currency-neutral basis.

Expected operating loss of € 700 million

2023 will be a transition year where we will be focusing on incremental net sales generation and absolute operating profit stabilization. The development of the gross margin is highly volatile given the uncertainties around the shape and speed of the recovery in Greater China, the extent and length of potential recessions in North America and Europe, the promotional activity in the industry as well as the development of currencies and freight rates. We will manage these uncertainties by being flexible and adjusting our operating expenses accordingly. Given the macroeconomic and geopolitical uncertainties as well as company-specific challenges, we expect an operating loss of € 700 million in 2023. This projection includes the negative impact of around € 1,000 million from the discontinuation of the Yeezy partnership consisting of the operating loss of around € 500 million related to the lost revenues as well as the write-off of the existing Yeezy inventory as of February 2023 in the amount of around € 500 million. The expected operating loss also accounts for one-off costs of up to € 200 million which are part of a strategic review we are currently conducting aimed at reigniting profitable growth as of 2024.

Average operating working capital as a percentage of sales to increase

During 2022, average operating working capital as a percentage of sales increased reflecting elevated inventory levels driven by longer lead times, a higher sourcing volume as well as increased product and freight costs. Our focus in 2023 will be on strongly reducing our inventory levels. As this improvement will take time and against the background of the expected top-line decline, we still forecast average operating working capital as a percentage of sales to increase to a level of between 25% and 26% in 2023.

Capital expenditure of around € 600 million

We will continue to invest into our business, but at the same time adjust our spending to the financial and operational situation of the company. Consequently, capital expenditure is expected to reach a level of around € 600 million in 2023.

Management proposes dividend payment of € 0.70 per share

The adidas AG Executive and Supervisory Boards will recommend paying a dividend of € 0.70 per dividend-entitled share to shareholders at the Annual General Meeting on May 11, 2023 (2022: € 3.30). The total payout of € 125 million (2022: € 610 million) reflects a payout ratio of 49.2% (2022: 40.9%) of net income from continuing operations. This is at the upper end of the target range of between 30% and 50% of net income from continuing operations as defined in our dividend policy. SEE OUR SHARE

1 Source: Worldbank Global Economic Prospects.

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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.
Under the ‘Performance’ category, we subsume all footwear, apparel and ‘accessories and gear’ products which are of a more technical nature, built for sport and worn for sport. These are, among others, products from our most important sport categories: Football, Training, Running, and Outdoor.
This Group Management Report is a combined management report. It contains the Group Management Report of the adidas Group and the Management Report of adidas AG.
The Declaration on Corporate Governance is part of the Annual Report.
Declaration on Corporate Governance