Financial Statements and Management Report of adidas AG

adidas AG is the parent company of the adidas Group. It includes operating business functions, primarily for the German market, as well as corporate headquarter functions such as Marketing, IT, Treasury, Taxes, Legal, and Finance. adidas AG also administers the company’s shareholdings.

Operating activities and capital structure of adidas AG

The majority of the operating business of adidas AG consists of the sale of merchandise to wholesale partners and own retail activities.

In addition to its own trading activities, the results of adidas AG are significantly influenced by its holding function for the adidas Group. This is reflected primarily in currency effects, cost recharges for services provided, interest result, and income from investments in related companies.

The risks and opportunities as well as the future development of adidas AG largely reflect those of the adidas Group. SEE OUTLOOK SEE RISK AND OPPORTUNITY REPORT

The asset and capital structure of adidas AG is significantly impacted by its holding and financing function for the adidas Group. For example, 49% of total assets as of December 31, 2024, related to financial assets (2023: 48%), which primarily consist of shares in affiliated companies. Intercompany accounts, through which transactions between affiliated companies are settled, represent another 17% of total assets (2023: 28%) and 29% of total equity and liabilities as of December 31, 2024 (2023: 28%).

Preparation of accounts

Unlike the consolidated financial statements, which are in conformity with the International Financial Reporting Standards (IFRS), as adopted by the European Union as of December 31, 2024, the following financial statements of adidas AG have been prepared in accordance with the rules set out in the German Commercial Code (Handelsgesetzbuch – HGB).

Income statement in accordance with HGB

Sales of adidas AG comprise external revenues generated by adidas Germany with products of the adidas brand as well as revenues from foreign subsidiaries. Revenues of adidas AG also include royalty and commission income, mainly from affiliated companies, revenues from the central distribution unit and other revenues which mainly consist of costs recharged to subsidiaries. In 2024, adidas AG net sales increased 12% to € 5,068 million compared to € 4,510 million in the prior year.

In 2024, other operating income of adidas AG decreased 5% to € 687 million (2023: € 721 million). This development was primarily due to lower positive currency effects.

In 2024, other operating expenses for adidas AG increased 12% to € 3,150 million (2023: € 2,801 million). This was largely attributable to higher costs for advertising and promotion as well as recharges from subsidiaries.

Depreciation and amortization for adidas AG relating to intangible and tangible fixed assets decreased 1% to € 137 million in 2024 (2023: € 139 million).

In 2024, adidas AG generated an operating loss of € 268 million (2023: € 243 million). This development is mainly reflecting higher expenses.

The financial result of adidas AG increased 385% to € 500 million in 2024 (2023: € 103 million). The increase was attributable to higher income from dividends.

Net income, after taxes of € 83 million (2023: € 49 million), amounted to € 149 million in 2024 and was higher than the prior year net loss of € 189 million.

Balance sheet in accordance with HGB

At the end of December 2024, total assets decreased 3% to € 9,008 million compared to € 9,265 million in the prior year. This development was mainly a result of the decrease in receivables and other assets.

Shareholders’ equity increased 1% to € 2,479 million at the end of 2024 (2023: € 2,455 million). The equity ratio increased to 27.5% (2023: 26.5%).

Provisions were up 18% to € 956 million at the end of 2024 (2023: € 813 million).

At the end of December 2024, liabilities and other items decreased 7% to € 5,573 million (2023: € 5,997 million). This is mainly due to the repayment of a eurobond in 2024.

Development of cash and cash equivalents

adidas AG has a syndicated credit facility of € 1,864 million and additional bilateral credit lines (including overdrafts) of € 841 million. In addition, the company has a multi-currency commercial paper program in an amount of € 2,000 million available. SEE TREASURY

In 2024, operating activities of adidas AG resulted in a cash inflow of € 55 million (2023: € 212 million). The change versus the prior year was mainly a result of lower receivables. Net cash inflow from investment activities was € 525 million (2023: € 104 million). This was primarily attributable to higher dividend income from subsidiaries. Financing activities resulted in a net cash outflow of € 345 million (2023: € 323 million). The net cash outflow from financing activities mainly relates to the dividend payment to the shareholders of adidas AG, the repayment of a eurobond and interest payments. As a result of these developments, cash and cash equivalents of adidas AG increased to € 424 million at the end of December 2024 compared to € 189 million at the end of the prior year.

adidas AG is able to meet its financial commitments at all times.