Statement of Financial Position and Statement of Cash Flows

Assets

At the end of December 2024, total assets were up 15% to € 20,655 million from € 18,020 million in the prior year, mainly related to the increase of cash and cash equivalents, accounts receivable, inventories, and right-of-use assets.

Total current assets increased 21% to € 11,904 million at the end of December 2024 compared to € 9,809 million in 2023. Cash and cash equivalents were up 72%, or more than € 1 billion in absolute terms, to € 2,455 million at the end of December 2024 (2023: € 1,431 million). This increase is mainly due to the positive cash flow from operating activities, partly offset by the repayment of a € 500 million eurobond maturing in September 2024, repayments of lease liabilities, interest paid, as well as the dividend payment for the year 2023. Inventories increased 10% to € 4,989 million at the end of December 2024 (2023: € 4,525 million) to support the company’s growth off of a healthy inventory position. On a currency-neutral basis, inventories increased 11%. SEE NOTE 04-08

Inventories € in millions

Accounts receivable increased 27% to € 2,413 million at the end of December 2024 (2023: € 1,906 million), mainly reflecting higher sell-in and a more sizable wholesale business compared to the prior year. On a currency-neutral basis, receivables were up 26%. Other current financial assets were up 55% to € 950 million (2023: € 614 million), mainly related to a shift from non-current to current financial assets with regard to a part of the earn-out component of the Reebok divestiture, which has a maturity of less than one year, as well as the increase in the fair value of financial instruments. Other current assets were down 13% to € 997 million at the end of December 2024 (2023: € 1,143 million) due to customs refund claims, now being presented under other non-current assets in 2024 due to a change in the assumption of the duration of the proceedings as well as a decrease of tax receivables. SEE NOTE 05-08

Accounts receivable € in millions

Total non-current assets increased 7% to € 8,751 million at the end of December 2024 from € 8,211 million in 2023. This development is mainly related to an increase in fixed assets, which were up 9% to € 6,953 million at the end of December 2024 versus € 6,386 million in 2023. Right-of-use assets increased 24% to € 2,779 million (2023: € 2,247 million), mainly due to additions relating to a new distribution center. Goodwill was up 3% to € 1,275 million (2023: € 1,238 million), reflecting currency effects. Other intangible assets decreased 4% to € 426 million (2023: € 442 million), while other non-current financial assets decreased 44% to € 234 million from € 418 million at the end of 2023. This development is mainly related to a shift from non-current to current financial assets with regard to a part of the earn-out component of the Reebok divestiture, which has a maturity of less than one year. Other non-current assets increased 491% to € 291 million from € 49 million at the end of 2023. This was caused by a shift from customs refund claims to non-current assets. Deferred tax assets amounted to € 1,272 million compared to € 1,358 million in 2023. SEE NOTE 09-15

Liabilities and equity

Total current liabilities were up 19% to € 9,593 million at the end of December 2024 from € 8,043 million in 2023. Short-term borrowings increased 4% to € 570 million at the end of December 2024 (2023: € 549 million), as the reclassification of a eurobond in an amount of € 500 million due to its maturity in 2025 was offset by the repayment of a eurobond amounting to € 500 million in September 2024. Accounts payable increased 36% to € 3,096 million at the end of December 2024 versus € 2,276 million in 2023, mainly reflecting higher sourcing volumes. On a currency-neutral basis, accounts payable were also up 36%. Current lease liabilities increased 11% to € 607 million at the end of December 2024 versus € 545 million in 2023, mainly in connection with a new distribution center. Other current financial liabilities were down 28% to € 191 million from € 266 million in 2023, mainly related to reduced customs liabilities as well as a lower fair value of financial instruments. Other current provisions increased 16% to € 1,538 million at the end of December 2024 versus € 1,323 million in 2023, mainly due to higher provisions for personnel that offset lower provisions for customs due to a reclassification from current to non-current. Current accrued liabilities were up 17% to € 2,659 million at the end of December 2024 from € 2,273 million in 2023, mainly due to higher accruals for outstanding invoices, personnel, and discounts, which were only partly offset by lower accruals for marketing costs. Other current liabilities were up 23% to € 598 million at the end of December 2024 from € 488 million in 2023. This increase is mainly related to higher tax liabilities as well as donations in connection with the sale of the remaining Yeezy inventory. SEE NOTE 16-21

Accounts payable € in millions

Total non-current liabilities increased 3% to € 5,194 million at the end of December 2024 compared to € 5,052 million in the prior year. Long-term borrowings were down 21% to € 1,915 million at the end of December 2024 compared with € 2,430 million in the prior year. This decrease is mainly due to the reclassification of a eurobond of € 500 million to short-term borrowings due to its maturity in 2025. Non-current lease liabilities were up 22% to € 2,495 million at the end of December 2024 from € 2,039 million in the prior year, due to a new distribution center as well as currency effects. Deferred tax liabilities decreased 9% to € 133 million at the end of December 2024 from € 147 million in the prior year. Other non-current provisions were up 88% to € 353 million at the end of December 2024 from € 188 million in the prior year, reflecting a reclassification of provisions for customs from current to non-current and higher other provisions. Other non-current liabilities were up 49% to € 154 million at the end of December 2024 from € 103 million in 2023. This increase is related to donations in connection with the sale of the remaining Yeezy inventory. SEE NOTE 16-24

Shareholders’ equity increased 20% to € 5,476 million at the end of December 2024 versus € 4,580 million in 2023. This was mainly driven by higher net income, the increase of hedging reserves as well as positive currency effects, partly offset by the dividend paid to shareholders for the full year 2023. The equity ratio increased to 26.5% compared to 25.4% in the prior year. SEE NOTE 25

Equity ratio¹ in %

Operating working capital

Operating working capital increased 4% to € 4,306 million at the end of December 2024 compared to € 4,154 million in 2023. On a currency-neutral basis, operating working capital was also up 4%. Average operating working capital as a percentage of sales decreased 5.9 percentage points to 19.7% (2023: 25.7%), reflecting the slight increase of average operating working capital against the background of significantly higher net sales in 2024 compared to 2023.

Average operating working capital^{1, 2} in % of net sales

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 7% to € 540 million (2023: € 504 million). Capital expenditure for property, plant, and equipment was up 15% to € 419 million compared to € 363 million in the prior year. The company invested € 121 million in intangible assets (2023: € 141 million). Depreciation and amortization, excluding impairment losses and reversal of impairment losses of tangible and intangible assets, increased 5% to € 530 million in 2024 (2023: € 505 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 50% of total capital expenditure (2023: 45%). Expenditure for IT and logistics represented 25% and 9%, respectively (2023: 32% and 9%, respectively). In addition, expenditure for administration accounted for 16% (2023: 14%). From a segmental perspective, the majority of the capital expenditure was recorded centrally at headquarter level, which accounted for 31% (2023: 38%). From a regional perspective, capital expenditure in Europe and North America accounted for 16% each (2023: 12% and 15%, respectively) of the total capital expenditure, followed by Greater China and Emerging Markets with 13% each (2023: 10% and 15%, respectively) as well as Latin America and Japan/South Korea with 5% each (2023: 6% and 3%, respectively).

Capital expenditure by type in %

Capital expenditure by segments in %

Liquidity analysis

Net cash generated from operating activities amounted to € 2,910 million in 2024 (2023: € 2,550 million). This development was mainly due to the higher operating profit in the period, which was partly offset by a less favorable operating working capital development versus the prior year. Adjustments according to IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ are required to be separately disclosed and had a positive impact of € 9 million on the company’s 2024 operating cash flow (2023: negative € 19 million). In accordance with IAS 29 the prior year’s presentation was changed. SEE NOTE 37

In 2024, net cash used in investing activities reached a level of € 356 million compared to net cash used of € 451 million in 2023. This development was mainly due to the proceeds related to the divestiture of the Reebok business.

Net cash used in financing activities amounted to € 1,559 million (2023: € 1,425 million). This is mainly a result of repayments of lease liabilities, the repayment of a € 500 million eurobond in September 2024, interest paid as well as the dividend payment for the year 2023.

Exchange rate effects on cash positively impacted the company’s cash position by € 29 million (2023: negative € 40 million).

As a result of all these developments, cash and cash equivalents increased by € 1,024 million to € 2,455 million at the end of December 2024 compared to € 1,431 million at the end of December 2023.

Change in cash and cash equivalents € in millions

Adjusted net borrowings at December 31, 2024 amounted to € 3,622 million, compared to € 4,518 million in 2023. The company’s ratio of adjusted net borrowings over EBITDA amounted to 1.5 at the end of December 2024 (2023: 3.3). This strong deleveraging relates to the significantly lower adjusted net borrowings and the higher EBITDA compared to the prior year period. SEE TREASURY

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

Off-balance-sheet items

The company’s most significant off-balance-sheet items are commitments for promotion and advertising, for service arrangements as well as for other contracts. At the end of December 2024, financial commitments for promotion and advertising increased 27% to € 8,122 million in 2024 (2023: € 6,418 million). adidas has outsourced certain logistics and information technology functions, for which it has entered into long-term contracts. For these service arrangements, financial commitments decreased 60% to € 669 million in 2024 (2023: € 1,667 million). The decrease mainly relates to an obligation entered for a new distribution center, which was recognized as a lease liability in 2024. SEE NOTE 38