Press Release: adidas AG : adidas AG delivers -2-

adidas AG / adidas AG : adidas AG delivers exceptional fourth quarter results . Processed and transmitted by Nasdaq OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

For immediate release Herzogenaurach, March 5, 2014

adidas AG delivers exceptional fourth quarter results

2014 will see high-single-digit currency-neutral sales growth

Q4 2013 highlights:

-- Currency-neutral Group sales increase 12%

-- Group sales grow in all regions, channels and brands

-- adidas and Reebok brand sales increase 10% and 9% currency-neutral, respectively

-- Comparable Retail store sales up 3% currency-neutral

Full year 2013 highlights:

-- Currency-neutral Group sales up 3% on a currency-neutral basis

-- Gross margin improves 1.5pp to 49.3%

-- Goodwill impairment in an amount of EUR 52 million

-- Operating margin excluding goodwill impairment improves to 8.7%

-- Earnings per share excluding goodwill impairment increase 6% to a record level of EUR 4.01

-- Net cash position of EUR 295 million at year-end

-- Management to propose dividend of EUR 1.50 per share

Outlook

-- Group results in 2014 to be significantly impacted by currency movements

-- Currency-neutral Group sales to increase at a high-single-digit rate

-- Operating margin to be at a level between 8.5% and 9.0%

-- Net income attributable to shareholders to be at a level between EUR 830 million and EUR 930 million

"We finished 2013 with an exceptionally strong fourth quarter. Currency-neutral sales grew 12%, which was above our expectations," commented Herbert Hainer, adidas Group CEO. "This ensured that we met our revised full year targets from September, despite a further worsening of currency exchange rates. In the fourth quarter alone, negative currency effects cost us 9 percentage points on the top line."

adidas Group currency-neutral sales increase 12% in the fourth quarter

In the fourth quarter of 2013, Group revenues grew 12% on a currency-neutral basis. Currency-neutral sales in Retail and Other Businesses increased 15% and 28%, respectively. Sales in the Wholesale segment grew 8% on a currency-neutral basis. Currency-neutral revenues in Western Europe increased 3%, supported by strong double-digit growth at Reebok and TaylorMade-adidas Golf. In European Emerging Markets, currency-neutral sales were up 11% as a result of double-digit revenue growth at both adidas and Reebok. Group sales in North America increased 14% on a currency-neutral basis, driven by double-digit sales increases at adidas, TaylorMade-adidas Golf and Reebok-CCM Hockey. In Greater China, Group sales were up 8% on a currency-neutral basis, driven by strong double-digit sales gains at adidas Originals & Sport Style. Currency-neutral revenues in Other Asian Markets grew 15%, due to double-digit increases at adidas and TaylorMade-adidas Golf. In Latin America, adidas Group sales were up 32% on a currency-neutral basis driven by strong double-digit growth at adidas and Reebok. Currency translation effects had a negative impact on sales in euro terms. Group revenues grew 3% to EUR 3.479 billion in the fourth quarter of 2013 from EUR 3.369 billion in 2012.

Fourth quarter operating margin excluding goodwill impairment improves 2.0 percentage points

The Group's gross margin decreased 0.1 percentage points to 47.5% (2012: 47.6%) in the fourth quarter. Gross margin development was positively impacted by a more favourable pricing, product and regional sales mix as well as lower input costs during the fourth quarter. This, however, was more than offset by the negative effects resulting from a less favourable hedging rate. Group gross profit increased 3% to EUR 1.652 billion (2012: EUR 1.603 billion). Other operating expenses as a percentage of sales decreased 2.5 percentage points to 46.5% (2012: 49.0%), as higher expenditure related to the Group's expansion of own-retail activities was more than offset by lower marketing expenditure as well as a decrease in operating overhead expenses. In the fourth quarter of 2013, excluding goodwill impairment losses, operating profit increased significantly to EUR 98 million compared to EUR 26 million in the prior year. This represents an improvement in operating margin excluding goodwill impairment of 2.0 percentage points. Including goodwill impairment losses, the Group reported an operating profit of EUR 45 million compared to an operating loss of EUR 239 million in 2012. Net income attributable to shareholders excluding goodwill impairment losses amounted to EUR 42 million versus net loss attributable to shareholders of EUR 7 million last year.

adidas Group currency-neutral sales grow 3%

In 2013, Group revenues grew 3% on a currency-neutral basis, as a result of sales increases in Retail and Other Businesses. Currency-neutral Wholesale revenues remained stable compared to the prior year. Group sales were below Management's initial expectations of an increase at a mid-single-digit rate. Currency translation effects had a negative impact on sales in euro terms. Group revenues decreased 3% to EUR 14.492 billion in 2013 from EUR 14.883 billion in 2012.

Group sales increase driven by growth in Retail and Other Businesses

In 2013, currency-neutral Wholesale revenues remained stable. While sales at Reebok grew at a low-single-digit rate, revenues at adidas remained at the prior year level. Currency-neutral Retail sales increased 8% versus the prior year, as a result of sales growth at both adidas and Reebok. Revenues in Other Businesses were up 5% on a currency-neutral basis, driven by sales increases at TaylorMade-adidas Golf, Reebok-CCM Hockey and Rockport. Currency translation effects had a negative impact on segmental sales in euro terms.

Change y-o-y in euro Change y-o-y 2013 2012 terms currency-neutral EUR in EUR in millions millions in % in % Wholesale 9,100 9,533 (5) 0 Retail 3,446 3,373 2 8 Other Businesses 1,946 1,977 (2) 5 Total(1) 14,492 14,883 (3) 3

2013 net sales development by segment

1) Rounding differences may arise in totals.

Currency-neutral sales increase in nearly all regions

In 2013, revenues in Western Europe decreased 6% on a currency-neutral basis, mainly due to sales declines in the UK, Italy and Spain. In European Emerging Markets, Group sales increased 4% on a currency-neutral basis as a result of sales growth in most of the region's major markets. Sales for the adidas Group in North America grew 2% on a currency-neutral basis, due to sales increases in both the USA and Canada. Sales in Greater China increased 7% on a currency-neutral basis. Currency-neutral revenues in Other Asian Markets grew 5%, driven by strong increases in India, South Korea and Australia. In Latin America, sales grew 19% on a currency-neutral basis with double-digit increases in most of the region's major markets, in particular Argentina, Colombia and Mexico. Currency translation effects had a negative impact on regional sales in euro terms.

Change y-o-y Change y-o-y 2013 2012 in euro terms currency-neutral EUR in EUR in millions millions in % in % Western Europe 3,800 4,076 (7) (6) European Emerging Markets 1,894 1,947 (3) 4 North America 3,362 3,410 (1) 2 Greater China 1,655 1,562 6 7 Other Asian Markets 2,206 2,407 (8) 5 Latin America 1,575 1,481 6 19 Total(1) 14,492 14,883 (3) 3

2013 net sales development by region

1) Rounding differences may arise in totals.

Group gross margin increases 1.5 percentage points

The gross margin of the adidas Group increased 1.5 percentage points to 49.3% in 2013 (2012: 47.7%), above Management's initial expectations of between 48.0% and 48.5%. This development was due to a more favourable pricing, product and regional sales mix as well as a larger share of higher-margin Retail sales, which more than offset the negative effect from a less favourable hedging rate. Gross profit for the adidas Group grew 1% in 2013 to EUR 7.140 billion versus EUR 7.103 billion in the prior year.

Goodwill impairment in an amount of EUR 52 million

As a result of the annual impairment test, the adidas Group has impaired goodwill and recorded a EUR 52 million pre-tax charge as at December 31, 2013 (2012: EUR 265 million). Within the wholesale cash-generating unit Iberia, goodwill impairment losses of EUR 23 million were recognised. Within the retail cash-generating unit North America, goodwill impairment losses of EUR 29 million were recognised. The goodwill of these two cash-generating units is completely impaired. The impairment losses were mainly caused by adjusted growth assumptions and an increase in the country-specific discount rates. The impairment losses were non-cash in nature and do not affect the adidas Group's liquidity.

Operating margin excluding goodwill impairment improves to 8.7%

Group operating profit increased 31% to EUR 1.202 billion in 2013 versus (MORE TO FOLLOW) Dow Jones Newswires

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-2 of 2- 05 Mar 2014 06:31:00 UTC  Press Release: adidas AG : adidas AG delivers -2-
EUR 920 million in 2012. The operating margin of the adidas Group improved 2.1 percentage points to 8.3% (2012: 6.2%). Excluding the goodwill impairment losses, operating profit grew 6% to EUR 1.254 billion from EUR 1.185 billion last year, representing an operating margin of 8.7%, up 0.7 percentage points (2012: 8.0%). This is below Management's initial expectations of an operating margin approaching 9.0%. The improvement in the operating margin was primarily due to the positive effects from the increase in gross margin, which more than offset higher other operating expenses as a percentage of sales

Financial income down 28%

Financial income decreased 28% to EUR 26 million in 2013 from EUR 36 million in the prior year, mainly due to a decrease in interest income.

Financial expenses decrease 11%

Financial expenses declined 11% to EUR 94 million in 2013 (2012: EUR 105 million). The decrease in interest expenses was the main contributor to the decline.

Net income attributable to shareholders excluding goodwill impairment up 6%

The Group's net income attributable to shareholders increased to EUR 787 million in 2013 from EUR 526 million in 2012. This represents an increase of 49% versus the prior year level. Excluding the goodwill impairment losses, net income attributable to shareholders increased 6% to EUR 839 million (2012: EUR 791 million). The Group's tax rate decreased 8.0 percentage points to 30.4% in 2013 (2012: 38.4%), mainly due to lower non-tax-deductible goodwill impairment losses. Excluding the goodwill impairment losses, the effective tax rate improved 0.3 percentage points to 29.0% from 29.3% last year.

Earnings per share excluding goodwill impairment reach EUR 4.01

In 2013, basic and diluted earnings per share amounted to EUR 3.76 (2012: EUR 2.52), representing an increase of 49%. Excluding the goodwill impairment losses, basic and diluted earnings per share were up 6% to EUR 4.01, which is below Management's initial projections of EUR 4.25 to EUR 4.40 (2012: EUR 3.78). The weighted average number of shares used in the calculation was 209,216,186.

Group inventories up 6%

Group inventories increased 6% to EUR 2.634 billion at the end of December 2013 versus EUR 2.486 billion in 2012. On a currency-neutral basis, inventories were up 13% as a result of the Group's expectations for growth in the coming quarters as well as higher inventories in Russia/CIS due to distribution centre issues during the second half of 2013.

Accounts receivable increase 7%

Group receivables increased 7% to EUR 1.809 billion at the end of December 2013 (2012: EUR 1.688 billion). On a currency-neutral basis, receivables were up 17%, reflecting the growth of the Group's business during the fourth quarter of 2013.

Net cash position of EUR 295 million

Net cash at December 31, 2013 amounted to EUR 295 million, compared to net cash of EUR 448 million at the end of December 2012, representing a decrease of EUR 153 million. Higher working capital requirements were the primary drivers of this development. Currency translation had a positive effect of EUR 3 million. The Group's ratio of net borrowings over EBITDA amounted to -0.2 at the end of December 2013 (2012: -0.3).

adidas Group currency-neutral sales to increase at a high-single-digit rate in 2014

adidas Group sales are forecasted to increase at a high-single-digit rate on a currency-neutral basis in 2014. In particular, this year's major sporting events will provide positive stimulus to Group sales. As the Official Partner of the 2014 FIFA World Cup(TM) in Brazil, the adidas brand will be the most visible brand during the event and will benefit from record sales in the football category. Group sales development will also be favourably impacted by the Group's high exposure to fast-growing emerging markets as well as the further expansion of Retail. Currency translation is expected to have a significant negative impact on the Group's top-line development in reported terms.

Net income attributable to shareholders to be at a level between EUR 830 million and EUR 930 million

In 2014, the adidas Group gross margin is forecasted to increase to a level between 49.5% and 49.8% (2013: 49.3%). Improvements are expected in most segments. Group gross margin will benefit from a positive pricing, product and regional sales mix, as growth rates in high-margin emerging markets are projected to be above growth rates in more mature markets. In addition, the Reebok brand will positively influence Group gross margin development. However, these positive effects will be partly offset by less favourable hedging terms compared to the prior year, negative exchange rate variances in emerging markets such as Russia and Argentina, as well as increasing labour costs in our cost of sales.

In 2014, the Group's other operating expenses as a percentage of sales are expected to be around the prior year level (2013: 42.3%). Sales and marketing working budget expenses as a percentage of sales are projected to increase modestly compared to the prior year. Marketing investments will be centred on major sporting events such as the 2014 FIFA World Cup(TM) and highly innovative product launches, particularly in the running category. Further, the Group will support Reebok's growth strategy in key fitness categories, leveraging partnership assets such as CrossFit, Spartan Race and Les Mills. Operating overhead expenditure as a percentage of sales is forecasted to decrease modestly in 2014. Higher expenses in the Retail segment due to the planned expansion of the Group's store base will be offset by leverage in other areas.

In 2014, the operating margin for the adidas Group is forecasted to be at a level between 8.5% and 9.0% (2013 excluding goodwill impairment losses: 8.7%). The Group tax rate is expected to be at a level of around 28.5% and thus more favourable compared to the 2013 tax rate excluding goodwill impairment losses of 29.0%. As a result of these developments, net income attributable to shareholders is expected to be at a level between EUR 830 million and EUR 930 million compared to the 2013 net income attributable to shareholders, excluding goodwill impairment losses, of EUR 839 million. This represents basic earnings per share of between EUR 3.97 and EUR 4.45.

Dividend proposal of EUR 1.50 per share

The adidas AG Executive and Supervisory Boards will recommend paying a dividend of EUR 1.50 to shareholders at the Annual General Meeting (AGM) on May 8, 2014 (2012: EUR 1.35). Subject to the meeting's approval, the dividend will be paid on May 9, 2014. This represents an increase of 11% compared to an increase of net income attributable to shareholders, excluding goodwill impairment losses, of 6%. The total payout of EUR 314 million (2012: EUR 282 million) reflects a payout ratio of 37.4% of net income attributable to shareholders, excluding goodwill impairment losses, versus 35.7% in the prior year. This is in line with the Group's dividend policy, where Management intends to pay out between 20% and 40% of net income attributable to shareholders

Herbert Hainer stated: "Currency headwinds had a significant negative impact on our results in euro terms, and this is also expected to continue in 2014. From an operational perspective, there is no doubt that 2014 will be a successful year for us. Driven by our dominant role at the 2014 FIFA World Cup(TM), we will generate high-single-digit currency-neutral growth in line with our strategic business plan Route 2015."

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Contacts:

Media Relations Investor Relations Jan Runau John-Paul O'Meara Chief Corporate Communication Officer Vice President Investor Relations Tel.: +49 (0) 9132 84-3830 Tel.: +49 (0) 9132 84-2751

Katja Schreiber Christian Stoehr Director Corporate Communication Senior Investor Relations Manager Tel.: +49 (0) 9132 84-3810 Tel.: +49 (0) 9132 84-4989

Lars Mangels Corporate Communication Manager Tel.: +49 (0) 9132 84-2680

Please visit our corporate website: www.adidas-Group.com

adidasAG_2013FYResults-en: http://hugin.info/139192/R/1766423/599749.pdf

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Source: adidas AG via Globenewswire

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adidas AG

Adi-Dassler-Straße 1 Herzogenaurach Germany

WKN: 500340;ISIN: DE0005003404;

Listed: Regulierter Markt in Frankfurter Wertpapierbörse;

http://www.adidas-group.com (END) Dow Jones Newswires

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