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Adidas 2023 Consolidated Financial Statement

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Adidas 2023 Consolidated Financial Statement

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

1 2 3 4 5 1 2 3 4 5
TO OUR SHAREHOLDERS GROUP MANAGEMEN T REP ORT – GROUP MAN AGEMEN T REP ORT – CON SOLIDATED FIN ANCIAL ADDITION AL IN FORMATION TO OUR SHAREHOLDERS GROUP MANAGEMENT REP ORT – GROUP MAN AGEMENT REP ORT – CONSOLIDATED FINANCIAL ADDITION AL INFORMATION
OUR COMPANY FIN AN CIAL REVIEW STATEMEN TS OUR COMPANY FINANCIAL REVIEW STATEMENTS

4
Consolidated Statement of Financial Position
adidas AG Consolidated Statement of Financial Position (IFRS) € in millions

Note Dec. 31, 2023 Dec. 31, 2022 Change in %

Assets
Cash and cash equivalents 04 1,431 798 79

CONSOLIDATED
Short-term financial assets 34 – n.a.
Accounts receivable 05 1,906 2,529 (25)
Other current financial assets 06 755 1,014 (26)

FINANCIAL STATEMENTS Inventories

Income tax receivables
07
34
4,525
156
5,973
102
(24)
52
Other current assets 08 1,003 1,316 (24)
Total current assets 9,809 11,732 (16)

Property, plant, and equipment 09 2,157 2,279 (5)

Right-of-use assets 10 2,247 2,665 (16)
Goodwill 11 1,238 1,260 (2)
Other intangible assets 12 442 429 3
Long-term financial assets 13 301 301 0
Other non-current financial assets 14 418 336 24
Deferred tax assets 34 1,358 1,216 12
Consolidated Statement of Financial Position 189 Other non-current assets 15 49 76 (35)
Total non-current assets 8,211 8,563 (4)
Consolidated Income Statement 191

Total assets 18,020 20,296 (11)

Consolidated Statement of Comprehensive Income 192

Consolidated Statement of Changes in Equity 193

Consolidated Statement of Cash Flows 195

Notes 197

Shareholdings 287

Responsibility Statement 290

Copy of the Auditor’s Report 291

188 189
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

adidas AG Consolidated Statement of Financial Position (IFRS) € in millions

Consolidated Income Statement
Note Dec. 31, 2023 Dec. 31, 2022 Change in %

Liabilities and equity adidas AG Consolidated Income Statement (IFRS) € in millions

Short-term borrowings 16 549 527 4
Accounts payable 2,276 2,908 (22) Year ending Year ending
Note Dec. 31, 2023 Dec. 31, 2022 Change
Current lease liabilities 19 545 643 (15)
Net sales 36 21,427 22,511 (4.8%)
Other current financial liabilities 17 266 424 (37)
Cost of sales 11,244 11,867 (5.3%)
Income taxes 34 323 302 7
Gross profit 10,184 10,644 (4.3%)
Other current provisions 18 1,323 1,589 (17)
(% of net sales) 47.5% 47.3% 0.2pp
Current accrued liabilities 20 2,273 2,412 (6)
Royalty and commission income 83 112 (26.0%)
Other current liabilities 21 488 452 8
Other operating income 29 71 173 (58.8%)
Total current liabilities 8,043 9,257 (13)
Other operating expenses 09, 12, 30, 31 10,070 10,260 (1.9%)
(% of net sales) 47.0% 45.6% 1.4pp
Long-term borrowings 16 2,430 2,946 (18)
Marketing and point-of-sale expenses 2,528 2,763 (8.5%)
Non-current lease liabilities 19 2,039 2,343 (13)
(% of net sales) 11.8% 12.3% (0.5pp)
Other non-current financial liabilities 22 6 44 (86)
Distribution and selling expenses 5,547 5,601 (1.0%)
Pensions and similar obligations 23 139 118 18
(% of net sales) 25.9% 24.9% 1.0pp
Deferred tax liabilities 34 147 135 9
General and administration expenses 1,839 1,651 11.4%
Other non-current provisions 18 188 88 113
(% of net sales) 8.6% 7.3% 1.2pp
Non-current accrued liabilities 20 – 7 n.a.
Sundry expenses 137 182 (24.8%)
Other non-current liabilities 24 103 6 1,492
(% of net sales) 0.6% 0.8% (0.2pp)
Total non-current liabilities 5,052 5,688 (11)
Impairment losses (net) on accounts
19 63 (70.5%)
receivable and contract assets
Share capital 179 179 0 Operating profit 268 669 (59.9%)
Reserves 257 466 (45) (% of net sales) 1.3% 3.0% (1.7pp)
Retained earnings 4,145 4,347 (5) Financial income 32 79 39 102.8%
Shareholders’ equity 25 4,580 4,991 (8) Financial expenses 32 282 320 (11.9%)
Income before taxes 65 388 (83.1%)
Non-controlling interests 27 345 360 (4) (% of net sales) 0.3% 1.7% (1.4pp)
Income taxes 34 124 134 (7.4%)
Total equity 4,925 5,351 (8) (% of income before taxes) 189.2% 34.5% 154.7pp
Net (loss)/income from continuing operations (58) 254 n.a.

Total liabilities and equity 18,020 20,296 (11) (% of net sales) (0.3%) 1.1% n.a.
Gain from discontinued operations, net of tax 03 44 384 (88.4%)
The accompanying Notes are an integral part of these consolidated financial statements.
Net (loss)/income (14) 638 n.a.
(% of net sales) (0.1%) 2.8% n.a.
Net (loss)/income attributable to
(75) 612 n.a.
shareholders
(% of net sales) (0.4%) 2.7% n.a.
Net income attributable to non-controlling
61 26 136.0%
interests
Basic earnings per share from continuing
35 (0.67) 1.25 n.a.
operations (in €)
Diluted earnings per share from continuing
35 (0.67) 1.25 n.a.
operations (in €)
Basic earnings per share from continuing and
35 (0.42) 3.34 n.a.
discontinued operations (in €)
Diluted earnings per share from continuing
35 (0.42) 3.34 n.a.
and discontinued operations (in €)

The accompanying Notes are an integral part of these consolidated financial statements.

190 191
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Equity

adidas AG Consolidated Statement of Changes in Equity (IFRS) € in millions
adidas AG Consolidated Statement of Comprehensive Income (IFRS) € in millions
Cumu-
lative Cost of
Year ending Year ending cur- hedging
Note Dec. 31, 2023 Dec. 31, 2022 rency Cost of reserve
trans- hedging –
lation reserve forward Share- Non-con-
Net (loss)/income (14) 638 Share Capital differ- Hedging – con- Other Retained holders’ trolling Total
Note capital reserve ences reserve options tracts reserves earnings equity interests equity
Items of other comprehensive income that will not be
reclassified subsequently to profit or loss
Balance at 192 1,294 (542) (64) (8) (12) (200) 6,860 7,519 318 7,837
Remeasurements of defined benefit plans (IAS 19), net of tax1 23 (5) 131 December 31, 2021

Net (loss)/gain on other equity investments (IFRS 9), net of tax 28 (5) 0 Other
comprehensive – – (70) (26) (1) (36) 131 – (2) 21 18
Subtotal of items of other comprehensive income that will not income
(10) 131
be reclassified subsequently to profit or loss
Net income – – – – – – – 612 612 26 638
Items of other comprehensive income that will be reclassified Total
to profit or loss when specific conditions are met comprehensive – – (70) (26) (1) (36) 131 612 610 47 656
Net loss on cash flow hedges and net foreign investment income
28 (126) (25) Repurchase of
hedges, net of tax 25 (13) – – – – – – (2,487) (2,500) – (2,500)
adidas AG shares
Net gain/(loss) on cost of hedging reserve – options, net of tax 28 7 (1)
Repurchase of
Net gain/(loss) on cost of hedging reserve – forward contracts, adidas AG shares
28 46 (36) due to equity- 25 (0) – – – – – – (22) (22) – (22)
net of tax
settled share-
Reclassification of foreign currency translation differences due based payment
– (228)
to disposal of foreign operations Reissuance of
Currency translation differences (155) 177 treasury shares
due to equity- 25 0 – – – – – – 41 41 – 41
Subtotal of items of other comprehensive income that will be settled share-
(228) (113) based payment
reclassified to profit or loss when specific conditions are met
Dividend payment – – – – – – – (610) (610) (22) (632)
Equity-settled
Other comprehensive income (238) 18 share-based 26 – 32 – – – – – (35) (4) – (4)
payment
Acquisition of
Total comprehensive income (252) 656 shares from non-
controlling
interests – – 4 – – – – – (48) – (44) 17 (27)
Attributable to shareholders of adidas AG (300) 610 shareholders in
accordance with
Attributable to non-controlling interests 48 47 IAS 32
1 Includes actuarial gains or losses relating to defined benefit obligations, return on plan assets (excluding interest income) and the asset ceiling effect. Cancellation of
– 12 – – – – – (12) – – –
The accompanying Notes are an integral part of these consolidated financial statements. treasury shares
Balance at
December 31,
179 1,338 (608) (90) (9) (48) (116) 4,347 4,991 360 5,351
2022/
January 1, 2023
Other
comprehensive – – (142) (126) 7 46 (10) – (225) (14) (238)
income
Net (loss)/income – – – – – – – (75) (75) 61 (14)
Total
comprehensive – – (142) (126) 7 46 (10) (75) (300) 48 (252)
income

192 193
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

adidas AG Consolidated Statement of Changes in Equity (IFRS) € in millions

Consolidated Statement of Cash Flows
Cumu-
lative Cost of
cur- hedging
rency Cost of reserve
trans- hedging – adidas AG Consolidated Statement of Cash Flows (IFRS) € in millions1
lation reserve forward Share- Non-con-
Share Capital differ- Hedging – con- Other Retained holders’ trolling Total
Note capital reserve ences reserve options tracts reserves earnings equity interests equity Year ending Year ending
Repurchase of Note Dec. 31, 2023 Dec. 31, 2022
adidas AG shares
due to equity- 25 (0) – – – – – – (29) (29) – (29)
settled share- Operating activities:
based payment Income before taxes 65 388
Reissuance of
treasury shares Adjustments for:
due to equity- 25 0 – – – – – – 29 29 – 29
settled share- 9, 10, 11, 12,
based payment
Depreciation, amortization and impairment losses 1,212 1,375
29
Dividend payment – – – – – – – (125) (125) (33) (158) Reversals of impairment losses 09, 10, 29 (42) (4)
Equity-settled
share-based 26 0 17 – – – – – (2) 15 – 15
Interest income 32 (39) (23)
payment Interest expense 32 162 138
Other – – – – – – – – – (29) (29) Unrealized foreign exchange losses, net 144 86
Balance at Losses on sale of property, plant, and equipment and intangible
December 31, 179 1,355 (750) (217) (2) (2) (126) 4,145 4,580 345 4,925 20 16
2023 assets, net
Other non-cash effects from operating activities 29, 30 (8) (8)
The accompanying Notes are an integral part of these consolidated financial statements.
Operating profit before working capital changes 1,514 1,967
Decrease/(Increase) in receivables and other assets 995 (795)
Decrease/(Increase) in inventories 1,297 (1,879)
(Decrease)/Increase in accounts payable and other liabilities (868) 736
Net cash generated from operations before taxes 2,938 30
Income taxes paid (307) (424)
Net cash generated from/(used in) operating activities –
2,630 (394)
continuing operations
Net cash used in operating activities –
– (85)
discontinued operations
Net cash generated from/(used in) operating activities 2,630 (479)

Investing activities:
Purchase of trademarks and other intangible assets (141) (191)
Proceeds from sale of trademarks and other intangible assets 1 1
Purchase of property, plant, and equipment (363) (504)
Proceeds from sale of property, plant, and equipment 10 1
Proceeds from sale of a disposal group from prior years – 12
(Reimbursement)/Proceeds from disposal of discontinued
(19) 1,165
operations
Purchase of short-term financial assets (34) –
Proceeds from/(Purchase of) investments and other long-term
57 (13)
assets
Interest received 39 23
Net cash (used in)/generated from investing activities –
(450) 495
continuing operations
Net cash used in investing activities – discontinued operations – (0)
Net cash (used in)/generated from investing activities (450) 495

194 195
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

adidas AG Consolidated Statement of Cash Flows (IFRS) € in millions1

Notes
Year ending Year ending
Note Dec. 31, 2023 Dec. 31, 2022
adidas AG is a listed German stock corporation and parent of the adidas Group located at Adi-Dassler-
Financing activities:
Str. 1, 91074 Herzogenaurach, Germany, and is entered into the commercial register at the Local Court of
Repayment of eurobond 16 (500) –
Fürth (HRB 3868). adidas AG and its subsidiaries (collectively ‘adidas,’ ‘the Group’ or ‘the company’)
Proceeds from issuance of bonds 16 – 994
design, develop, produce, and market a broad range of athletic and sports lifestyle products.
Interest paid (163) (140)
Repayments of lease liabilities (603) (631)
Dividend paid to shareholders of adidas AG
Dividend paid to non-controlling interest shareholders
25 (125)
(33)
(610)
(22)
01 General
Acquisition of non-controlling interests – (27)
The consolidated financial statements of adidas AG as at December 31, 2023, comprise adidas AG and its
Repurchase of treasury shares 25 – (2,500)
subsidiaries and are prepared in compliance with International Financial Reporting Standards (IFRS), as
Repurchase of treasury shares due to share-based payments (29) (30)
endorsed by the European Union (EU) as at December 31, 2023, and the additional requirements pursuant
Proceeds from reissuance of treasury shares due to
25 25 to § 315e section 1 German Commercial Code (Handelsgesetzbuch – HGB).
share-based payments
Proceeds/Repayments of short-term borrowings 16 3 (18)
Net cash used in financing activities – continuing operations (1,425) (2,957) The following amendments to existing standards and interpretations are effective for financial years
Net cash used in financing activities – discontinued operations – (6) beginning on January 1, 2023, and have been applied for the first time to these consolidated financial
Net cash used in financing activities (1,425) (2,963)
statements:

─ IFRS 17 ‘Insurance Contracts’ and Amendments to IFRS 17 (effective date: January 1, 2023): The new
IAS 29 Hyperinflation effects in operating, investing and
37 (82) (64) standard covers the recognition and measurement, presentation and disclosure related to all types of
financing cashflows
Sum of cashflows 673 (3,011) insurance contracts. IFRS 17 is effective for reporting periods beginning on or after January 1, 2023,
and replaces IFRS 4 ‘Insurance Contracts’. IFRS 17 had no material impact on the consolidated
Effect of exchange rates on cash (40) (39)
financial statements.
Increase/(Decrease) in cash and cash equivalents 633 (3,051)

─ Amendments to IAS 8 ‘Definition of Accounting Estimates’ (effective date: January 1, 2023): In

Cash and cash equivalents at beginning of year 04 798 3,849
February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of ‘accounting
Effect indexing cash and cash equivalents 37 (0) 20
estimates’. The amendments clarify the distinction between changes in accounting estimates and
Cash and cash equivalents at beginning of year acc. Balance
sheet
798 3,828 changes in accounting policies and the correction of errors. Also, they clarify how entities use
measurement techniques and inputs to develop accounting estimates. The amendments apply to
changes in accounting policies and changes in accounting estimates that occur on or after the start of
Cash and cash equivalents at end of period 04 1,431 798
the effective date. The amendments had no material impact on adidas’ consolidated financial
Prior year adjusted due to Hyperinflation accounting.
statements.
1

The accompanying Notes are an integral part of these consolidated financial statements.

─ Amendments to IAS 1 and IFRS Practice Statement 2 ‘Disclosure of Accounting Policies’ (effective
date: January 1, 2023) In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice
Statement 2 ‘Making Materiality Judgements’, in which it provides guidance and examples to help
entities apply materiality judgments to accounting policy disclosures. The amendments aim to help
entities provide accounting policy disclosures that are more useful by replacing the requirement for
entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’
accounting policies and adding guidance on how entities apply the concept of materiality in making
decisions about accounting policy disclosures. The amendments to IAS 1 are applicable for annual
periods beginning on or after January 1, 2023. Since the amendments to the Practice Statement 2
provide non-mandatory guidance on the application of the definition of ‘material’ to accounting policy
information, an effective date for these amendments is not necessary. The amendments have led to a
selective reduction in the disclosures on accounting policies.

196 197
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

─ Amendments to IAS 12 ‘Deferred Tax related to Assets and Liabilities arising from a Single The following new standards and interpretations as well as amendments to existing standards and
Transaction’ (effective date: January 1, 2023) In May 2021, the Board issued amendments to IAS 12, interpretations were issued by the IASB. These are not yet endorsed by the EU and hence have not been
which narrow the scope of the initial recognition exemption under IAS 12, so that it no longer applies to applied in preparing these consolidated financial statements:
transactions that give rise to equal taxable and deductible temporary differences. The amendments
should be applied to transactions that occur on or after the beginning of the earliest comparative ─ Amendments to IAS 7 ‘Statement of Cash Flows’ and IFRS 7 ‘Financial Instruments: Disclosures’ –
period presented. In addition, at the beginning of the earliest comparative period presented, a deferred ‘Supplier Finance Arrangements’ (effective date: January 1, 2024): In May 2023, the IASB issued the
tax asset (provided that sufficient taxable profit is available) and a deferred tax liability should also be clarification ‘Supplier Finance Arrangements’, which amended IAS 7 ‘Statement of Cash Flows’ and
recognized for all deductible and taxable temporary differences associated with leases and IFRS 7 ‘Financial Instruments: Disclosures’. The amendments clarify the characteristics of supplier
decommissioning obligations. The amendments had no material impact on adidas, in particular since finance arrangements and introduce additional disclosure requirements for such arrangements. The
adidas did not apply the initial recognition exemption in the context of leases under IFRS 16. objective of the amendments is to assist users of financial statements in understanding the effects of
supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk. The
─ Amendments to IAS 12 ‘International Tax Reform — Pillar Two Model Rules’ (effective date: January amendments are effective for annual reporting periods beginning on or after January 1, 2024. Early
1, 2023): In May 2023, the IASB issued ‘International Tax Reform—Pillar Two Model Rules’ – adoption is permitted but will need to be disclosed. The amendments are not expected to have a
amendments to IAS 12 to clarify the application of IAS 12 ‘Income Taxes’ to income taxes arising from material impact on the consolidated financial statements of adidas.
tax law enacted or substantively enacted to implement the OECD Pillar Two Model Rules. The
amendments include a temporary exception to the accounting for deferred taxes arising from the ─ Amendments to IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’ – ‘Lack of
implementation of the Pillar Two model rules and additional disclosure requirements for affected Exchangeability’ (effective date: January 1, 2025): In August 2023, the IASB issued ‘Lack of
entities, with the aim to help users of the financial statements better understand an entity’s exposure Exchangeability’ that amends IAS 21. IAS 21 sets out the requirements for determining the exchange
to the Pillar Two Model Rules. The required disclosures are provided in the Note of Income Taxes. ► SEE rate to be used for recording a foreign currency transaction into the functional currency and
NOTE 34 translating a foreign operation into a different currency. The amendments to IAS 21 clarify how an
entity should assess whether a currency is exchangeable and how to determine the exchange rate
New standards and interpretations as well as amendments to existing standards and interpretations are when it is not. The amendments are effective for annual reporting periods beginning on or after
usually not applied by adidas before the EU effective date. January 1, 2025. The effects of the amendments need to be further analyzed and evaluated but are
currently not expected to have a material impact on the consolidated financial statements of adidas.
The following new standards and interpretations and amendments to existing standards and
interpretations issued by the IASB, endorsed by the EU, and which are effective for financial years The consolidated financial statements have in principle been prepared on the historical cost basis except
beginning after January 1, 2023, have not been applied in preparing these consolidated financial for certain items in the statement of financial position, such as certain originated financial instruments,
statements: derivative financial instruments, and plan assets, which are measured at fair value.

─ Amendments to IFRS 16 ‘Lease Liability in a Sale and Leaseback’ (effective date: January 1, 2024): In In October 2022, adidas terminated the Yeezy partnership with immediate effect, discontinued the
September 2022, the IASB has issued amendments to IFRS 16 to clarify how a seller-lessee distribution of adidas Yeezy products, and stopped all payments to Kanye West and his companies. Being
subsequently measures sale and leaseback transactions that satisfy the requirements in IFRS 15 to be the sole owner of all design rights to existing products as well as previous and new colorways under the
accounted for as a sale, to ensure the seller-lessee does not recognize any amount of the gain or loss partnership, adidas announced in May 2023 that it would begin to sell the remaining inventory of adidas
that relates to the right of use it retains. The amendments to IFRS 16 are applicable for annual periods Yeezy products, with an initial release in May 2023. A second product drop took place in the third quarter.
beginning on or after January 1, 2024, and must be applied retrospectively to sale and leaseback In total, these two drops generated revenues of around € 750 million in 2023. As of December 31, 2023,
transactions entered into after the date of initial application of IFRS 16. Earlier application is permitted adidas still holds inventories with a total value of around € 250 million.
when the fact is disclosed. The amendments are not expected to have a material impact on the
consolidated financial statements of adidas. In connection with the sale of these remaining inventories, adidas has committed to donating a significant
amount to selected organizations working to combat discrimination and hate, including racism and
─ Amendments to IAS 1 ‘Classification of Liabilities as Current or Non-current’ (effective date: January antisemitism. ► SEE NOTE 39
1, 2024): In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the
requirements for classifying liabilities as current or non-current. The amendments clarify what is The consolidated financial statements are presented in euros (€), and unless otherwise stated, all values
meant by a right to defer settlement, that such a right to defer must exist at the end of the reporting are presented in millions of euros (€ in millions). Due to rounding principles, numbers presented may not
period, and that the classification is unaffected by the likelihood that an entity will exercise its deferral exactly sum up to totals provided. This can also lead to individual amounts rounded to zero.
right. In October 2022, the IASB issued further amendments to IAS 1, in which it clarifies that only
covenants with which an entity must comply on or before the reporting date will affect a liability’s
classification as current or non-current. The amendments are effective for annual reporting periods
beginning on or after January 1, 2024, and must be applied retrospectively. The amendments are not
expected to have a material impact on the consolidated financial statements of adidas.

198 199
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

02 Summary of material accounting policies Overview of selected subsequent measurement principles

Subsequent measurement principle

The consolidated financial statements are prepared in accordance with the consolidation, accounting, and
valuation principles described below. Assets
Cash and cash equivalents Amortized cost
Principles of consolidation Cash and cash equivalents (investments in certain
Fair value through profit or loss
money market funds)
The consolidated financial statements include the financial statements of adidas AG and all its direct and
Accounts receivable Amortized cost
indirect subsidiaries, which are prepared in accordance with uniform accounting principles. An entity is
Inventories Lower of cost and net realizable value
considered a subsidiary if it is controlled by adidas AG. Control exists when adidas is exposed to, or has
Property, plant, and equipment Amortized cost
rights to, variable returns from its involvement with the investee and has the ability to affect those returns
Right-of-use assets Amortized cost
through its power over the investee.
Goodwill Impairment-only approach

Effective as of December 2019, an amendment to the contractual arrangements existing between Agron, Intangible assets (except goodwill):

Inc., Los Angeles, California (USA), and adidas entered into force granting adidas the power to approve key With definite useful life Amortized cost

financial and operational targets as well as the organizational structure of Agron, Inc. adidas has the right With indefinite useful life Impairment-only approach

to, and is exposed to, the returns from its contractual business relations with Agron, Inc., which are Financial assets See separate table

dependent on the level of its net sales and overall profitability. As a result of the extended power, adidas Liabilities
has the ability to directly influence the amount of these variable returns and consequently obtained control Borrowings Amortized cost
over Agron, Inc. As adidas holds no equity interests of Agron, Inc., both net assets as well as income and Accounts payable Amortized cost
expenses are attributable entirely to the non-controlling interest. adidas has not transferred any Liabilities/provisions for cash-settled share-based
Fair value through profit or loss
consideration to the owners of Agron, Inc. in relation to the amendment of the contractual arrangements. payment arrangements
Derivatives not used in hedge accounting Fair value through profit or loss
The number of consolidated subsidiaries developed as follows in 2023 and 2022, respectively: Derivatives used in hedge accounting Fair value through other comprehensive income
Other financial liabilities Amortized cost
Number of consolidated subsidiaries Provisions:
Pensions Projected unit credit method
2023 2022
Other provisions Expected settlement amount
January 1 111 120 Accrued liabilities Amortized cost

First-time consolidated subsidiaries 1 1 Lease liabilities Amortized cost

Thereof: newly founded 1 1

Deconsolidated/divested subsidiaries (3) (8)
Intercompany mergers – (2) Financial assets are classified and measured according to IFRS 9. All purchases and sales of financial
assets, with the exception of trade receivables, are recognized on the trade date and initially measured at
December 31 109 111
fair value. At initial recognition, trade receivables that do not have a significant financing component are
measured at their transaction price. Subsequently, a financial asset is measured at amortized cost, fair
value through other comprehensive income (debt instrument), fair value through other comprehensive
The subsidiaries are held either directly by adidas AG or indirectly via the two holding companies adidas
income (equity instrument), or fair value through profit or loss.
Beteiligungsgesellschaft mbH in Germany or adidas International B.V. in the Netherlands.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not
A schedule of the shareholdings of adidas AG is shown in Attachment I to the consolidated financial
designated at fair value through profit or loss: the financial asset is held within a business model whose
statements. This schedule comprises information about the name and domicile of all consolidated
objective is to hold assets to collect contractual cash flows (business model ‘Hold to collect’); and the
subsidiaries, as well as the respective share held in the capital of these subsidiaries. Furthermore, a
financial asset’s contractual terms give rise on specified dates to cash flows that are solely payments of
schedule of the shareholdings of adidas AG is published on the German Company Register. ► SEE
principal and interest on the principal amount outstanding.
SHAREHOLDINGS

A financial asset is measured at fair value through other comprehensive income if it meets both of the
The financial effects of intercompany transactions as well as any unrealized gains and losses arising from
following conditions and is not designated at fair value through profit or loss: the financial asset is held
intercompany business relations are eliminated in preparing the consolidated financial statements.
within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets (business model ‘Hold to collect and sell’); and its contractual terms give rise on specified
Principles of measurement
dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The following table includes an overview of selected subsequent measurement principles used in the
preparation of the consolidated financial statements.

200 201
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

In principle, all investments in equity instruments are measured at fair value through profit or loss. At Currency translation
initial recognition, an entity may make an irrevocable election to present in other comprehensive income The consolidated financial statements are presented in euros (€), which is also the parent company’s
subsequent changes in the fair value of an investment in an equity instrument that is neither held for functional currency. For each entity, the Group determines the functional currency.
trading nor a contingent consideration acquired by a purchaser in a business combination. This election is
made on an investment-by-investment basis. Transactions in foreign currencies are initially recorded in the respective functional currency by applying
the spot exchange rate valid at the transaction date to the foreign currency amount.
All financial assets, which are not classified as measured at amortized cost or at fair value through other
comprehensive income as described above, are measured at fair value through profit or loss. In the individual financial statements of subsidiaries, monetary items denominated in non-functional
currencies of the subsidiaries are generally translated into the functional currency at closing exchange
Financial assets are only reclassified when the business model for managing financial assets is changed, rates at the balance sheet date. The resulting currency gains and losses are recognized directly in profit or
in which case all affected financial assets are reclassified. loss.

The subsequent measurement of financial assets is as follows: This excludes monetary items that are designated as part of the hedge of the Group’s net investment in a
foreign operation. These are recognized in other comprehensive income (OCI) until the net investment is
Overview of financial asset subsequent measurement principles according to IFRS 9 disposed of, at which time the cumulative amount is reclassified to profit or loss. Taxes resulting from
these exchange differences are also recognized directly in other comprehensive income in accordance
Subsequent
IFRS 9 category Subsequent measurement principle measurement
with IAS 12.
These assets are subsequently measured at fair value.
Fair value through Fair value through Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
Net gains and losses, including any interest or dividend
profit or loss profit or loss
income, are recognized in profit or loss. using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair
These assets are subsequently measured at amortized value in a foreign currency are translated using the exchange rates at the date when the fair value is
cost using the effective interest method. The amortized
determined. The gain or loss arising on translation of non-monetary items measured at fair value is
cost is reduced by impairment losses. Interest income,
Amortized cost Amortized cost treated in line with the recognition of the gain or loss on the change in fair value of the item.
foreign exchange gains and losses and impairment losses
are recognized in profit or loss. Any gain or loss on
derecognition is recognized in profit or loss.
Assets and liabilities of the company’s non-euro functional currency subsidiaries that are included in the
These assets are subsequently measured at fair value.
consolidated financial statements are translated using closing exchange rates at the balance sheet date
Interest income calculated using the effective interest
Fair value through into the presentation currency, the euro. For practical reasons, revenues and expenses are translated at
method, foreign exchange gains and losses and Fair value through
other comprehensive
impairment losses are recognized in profit or loss. other comprehensive average rates for the period, which approximate the exchange rates on the transaction dates. The
income
Other net gains and losses are recognized in other income
(debt instrument)
comprehensive income. On derecognition, accumulated
resulting exchange differences arising on consolidation are recognized in OCI.
gains and losses are reclassified to profit or loss.
These assets are subsequently measured at fair value. A summary of exchange rates to the euro for major currencies in which the Group operates is as follows:
Fair value through Dividends are recognized as income in profit or loss
Fair value through
other comprehensive unless the dividend clearly represents a recovery of
income part of the cost of the investment. Other gains and
other comprehensive Exchange rates
income
(equity instrument) losses are recognized in other comprehensive income
and are never reclassified to profit or loss. Average rates for the year
€ 1 equals ending Dec. 31, Spot rates at Dec. 31,
2023 2022 2023 2022
USD 1.0817 1.0539 1.1050 1.0666
Financial liabilities are recognized when adidas becomes a party to the contractual provisions that gives
GBP 0.8698 0.8525 0.8691 0.8869
rise to the financial liability. All financial liabilities are initially recognized at fair value.
JPY 151.9970 138.0550 156.3300 140.6600
CNY 7.6680 7.0891 7.8725 7.4095
For subsequent measurement, financial liabilities are classified either as financial liabilities measured at
MXN 19.1847 21.2037 18.6955 20.7683
fair value through profit or loss, or as financial liabilities measured at amortized cost. Financial liabilities
at fair value through profit or loss include, in particular, derivative financial instruments not designated as
hedging instruments in hedging relationships in accordance with IFRS 9.
Hyperinflation
Transaction costs that are directly attributable to the issue of financial liabilities that are not measured at To reflect changes in purchasing power at the balance sheet date, the carrying amounts of non-monetary
fair value through profit or loss reduce the fair value of the financial liability on initial recognition. assets and liabilities, shareholders’ equity, and comprehensive income of subsidiaries in hyperinflationary
economies are restated in terms of a measuring unit current at the balance sheet date. These are indexed
using a general price index in accordance with IAS 29 ‘Financial Reporting in Hyperinflationary
Economies.’ In contrast, no restatement is required for monetary assets and liabilities carried at amounts

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current at the end of the balance sheet date because they represent money held, to be received, or to be The fair values of currency options and forward exchange contracts are determined on the basis of market
paid. ► SEE NOTE 33 conditions on the reporting date. The fair value of a currency option is determined using generally
accepted models. The fair value of an option is influenced not only by the remaining term of the option but
Gains and losses on the net monetary position are included in the financial result. also by additional factors, such as the actual foreign exchange rate and the volatility of the underlying
foreign currency base. The company determines fair values taking the counterparty risk into
Non-monetary assets that have been restated following the guidance in IAS 29 are still subject to consideration.
impairment assessment in accordance with the guidance in the relevant IFRS.
Cash and cash equivalents
Derivative financial instruments Cash and cash equivalents represent cash at banks, cash on hand, and short-term deposits with
adidas uses derivative financial instruments, such as currency options, forward exchange contracts and maturities of three months or less from the date of acquisition, such as commercial papers and
currency swaps, to hedge its exposure to foreign-exchange risks. In accordance with its Treasury Policy, investments in money market funds.
the company does not enter into transactions with derivative financial instruments for trading purposes.
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts
Derivative financial instruments are initially recognized in the statement of financial position at fair value of cash and which are subject to an insignificant risk of changes in value.
and are subsequently also measured at their fair value. The method of recognizing the resulting gains or
losses is dependent on the nature of the hedge. On the date a derivative contract is entered into, adidas Cash equivalents can partly include investments in money market funds. Classification and measurement
designates derivatives as either a hedge of a forecast transaction (cash flow hedge) or a hedge of a net under IFRS 9 are performed based on the company’s business model for managing these financial assets
investment in a foreign operation. In applying cash flow hedge accounting, adidas designates the spot and the contractual cash flow characteristics. Investments in money market funds contain cash flows
element of forward exchange contracts and the intrinsic value of currency options to hedge its currency other than those of principal and interest on principal. As a result, those investments are measured at fair
risk and applies a hedge ratio of 1:1 (spot-to-spot designation). The forward element of forward exchange value through profit or loss.
contracts and the time value component of currency options are excluded from the designation of the
hedging instrument. Accounts receivable
A receivable is recognized if an amount of consideration that is unconditional is due from the customer
Changes in the fair value of derivatives that are designated and qualify as cash flow hedges or net (i.e., if only the passage of time is required before payment of that consideration is due). Accounts
investments that are effective as defined in IFRS 9 are recognized in equity. receivable that do not contain a significant financing component are recognized at the transaction price,
which represents the amount of consideration to which the company expects to be entitled in exchange for
adidas applies the ‘cost of hedging’ approach for dedicated cash flow hedges. Changes in the fair value of transferring promised goods or services to a customer, excluding amounts collected on behalf of third
the time value component of currency options, as well as the forward element in forward exchange parties. Subsequently, these are measured at amortized cost.
contracts, are separately accounted for as a cost of hedging and are recognized separately in equity as a
cost of hedging reserve. When the effectiveness is not 100%, the ineffective portion of the change in the Other financial assets
fair value is recognized in the consolidated income statement. Accumulated gains and losses in equity are
Other financial assets are classified and measured under IFRS 9, based on the company’s business model
transferred to the consolidated income statement in the same periods, during which the hedged forecast for managing these assets and the contractual cash flow characteristics. Those other financial assets that
transaction affects the consolidated income statement. give rise to cash flows consisting only of payments of principal and interest and that are assigned to the
business model ‘Hold to collect’ are measured at amortized cost. adidas mainly has security deposits and
Hedges of net investments in foreign entities are accounted for in a similar way to cash flow hedges. The
receivables from credit card companies and electronic marketplaces that fall under this category.
effective currency gains and losses in the derivative and all gains and losses arising on the translation of
the borrowing are recognized in equity with the exception of the cross-currency basis spread. Other financial assets that give rise to cash flows consisting only of payments of principal and interest and
that are assigned to the business model ‘Hold to collect and sell’ are measured at fair value through OCI.
Certain derivative transactions, while providing effective economic hedges under the company’s risk-
This category mainly includes other investments and securities to hedge long-term variable compensation
management policies, do not qualify for hedge accounting under the specific rules of IFRS 9.
components.

adidas documents the relationship between hedging instruments and hedge objects as well as the risk
Other financial assets, which are neither within the business model ‘Hold to collect’ nor within ‘Hold to
management objectives and strategies for undertaking various hedge transactions at transaction
collect and sell,’ are measured at fair value through profit or loss. This category mainly includes secured
inception. This process includes linking all derivatives designated as hedge to specific firm commitments
promissory notes and earn-out components.
and forecast transactions. The economic relationship between the hedging instrument and hedged item is
qualitatively and quantitatively ascertainable, and adidas judges the effectiveness of the hedging
relationship by using generally accepted methods such as the hypothetical derivative method or the ‘Dollar
Offset Method’. The main sources of expected ineffectiveness are due to changes in the credit risk and in
the timing of the hedged transactions.

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Long-term financial assets intended by management less any accumulated depreciation and accumulated impairment losses.
Long-term financial assets are distinguished between debt and equity instruments and classified Depreciation is recognized for those assets, with the exception of land and construction in progress, over
according to IFRS 9 as follows: the estimated useful life utilizing the ‘straight-line method’ and taking into account any potential residual
value. Parts of an item of property, plant, and equipment with a cost that is significant in relation to the
Debt instruments are measured depending on the company’s business model for managing financial total cost of the item are depreciated separately. ► SEE NOTE 09
assets and the contractual cash flows. Only financial assets that are held within the business model ‘Hold
to collect’ with the objective to collect the contractual cash flows, which represent solely payments of Estimated useful lives are as follows:
principal and interest on the principal amount outstanding on a specific date, are measured at amortized
cost. adidas classifies certain loans within this category. All other financial assets which do not fulfill one Estimated useful lives of property, plant, and equipment
of these criteria are measured at fair value through profit or loss. adidas has no long-term financial assets
Years
in the category fair value through comprehensive income (debt instrument) and shows loans which do not
Land indefinite
fulfill the contractual cash flow characteristics in the category fair value through profit or loss. ► SEE NOTE 13
Buildings and leasehold improvements 20 – 50

Generally, all investments in equity instruments are measured at fair value through profit or loss, unless Furniture and fixtures 3–5

these investments represent investments that the company intends to hold for long-term strategic Technical equipment and machinery as well as other equipment 2 – 10

purposes, which are then designated as equity securities at fair value through other comprehensive
income (equity).
Expenditure for repairs and maintenance is expensed as incurred. Renewals and improvements are
The designation of certain equity instruments at fair value through other comprehensive income (equity) is capitalized and depreciated separately, if the recognition criteria are met.
based on a strategic management decision.
Impairment losses on non-financial assets
Inventories If facts and circumstances indicate that non-current assets (e.g., property, plant, and equipment as well as
Finished goods and merchandise are valued at the lower of cost or net realizable value, which is the intangible assets including goodwill and contract assets) might be impaired, the recoverable amount is
estimated selling price in the ordinary course of business less the estimated costs of completion and the determined. This is measured at the higher of fair value less costs of disposal (net disposal price) and
estimated costs necessary to make the sale. Costs are determined using a standard valuation method, the value in use. Recoverable amount is determined on an individual asset level, unless the asset does not
‘average cost method.’ Costs of finished goods include the cost of direct materials and labor and the generate cash inflows that are largely independent of those from other assets or groups of assets. If this is
components of the manufacturing overheads that can be reasonably attributed to finished goods. The the case, recoverable amount is determined for the cash-generating unit to which the asset belongs. The
allocation of overheads is based on the planned average utilization. The net realizable value allowances fair value is measured at Level 3 according to IFRS 13 ‘Fair Value Measurement.’
are computed consistently throughout the company based on the age and expected future sales of the
items on hand. ► SEE NOTE 07 An impairment loss is recognized in other operating expenses or reported in goodwill impairment losses if
the carrying amount exceeds the recoverable amount.
Discontinued operations
The impairment test for goodwill is performed based on groups of cash-generating units, which represent
A part of the adidas Group, whose operations and cash flows can be clearly distinguished operationally and
the lowest level within the company at which goodwill is monitored for internal management purposes. If
for financial reporting purposes from the other operating businesses, is classified as a discontinued
there is an impairment loss for a group of cash-generating units, then, first, the carrying amount of any
operation if the component has either been disposed of or is classified as held for sale, and:
goodwill allocated to the group of cash-generating units is reduced. Subsequently, provided that the
recoverable amount is lower than the carrying amount, the other non-current assets of the group of cash-
─ represents a separate major line of business or geographic area of operations,
generating units are reduced pro rata on the basis of the carrying amount of each asset in the group of
─ is part of a single coordinated plan to dispose of a separate major line of business or geographic area
cash-generating units. In allocating an impairment loss, the carrying amount of an individual asset is not
of operations, or
reduced below its fair value. The amount of the impairment loss that would otherwise have been allocated
─ is a subsidiary acquired exclusively with a view to resale.
to the asset is allocated pro rata to the other assets of the cash-generating unit and groups of cash-
Discontinued operations are excluded from the net income/loss from continuing operations and are generating units.
presented as a single amount as gain/loss from discontinued operations, net of tax in the consolidated
Irrespective of whether there is an impairment indication, intangible assets with an indefinite useful life,
income statement. When an operation is classified as a discontinued operation, the comparative
intangible assets not yet available for use and goodwill acquired in business combinations are tested
consolidated income statement and consolidated statement of cash flows are restated and presented as if
annually on December 31 for impairment. In the case that indicators for impairment are present at any
the operation had been classified as such from the start of the comparative year. ► SEE NOTE 03
point in time other than on December 31, these assets are also tested for impairment at this point in time.

Property, plant, and equipment An impairment loss recognized in goodwill is not reversible. With respect to all other impaired assets, an
Property, plant, and equipment are measured at amortized cost. This comprises all costs directly
impairment loss recognized in prior periods is only reversed such as it affects the consolidated income
attributable to bringing the asset to the condition necessary for it to be capable of operating in the manner
statement if there has been a change in the estimates used to determine the recoverable amount. An

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impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the Leases
carrying amount that would have been determined (net of depreciation or amortization) if no impairment adidas assesses whether a contract is or contains a lease according to IFRS 16 ‘Leases’ at the inception of
loss had been recognized. the contract. IFRS 16 defines a lease as a contract that conveys the right to control the use of an identified
asset for a period of time in exchange for consideration. A contract conveys the right to control the use of
Impairment losses on financial assets an identified asset if the lessee has the right to obtain substantially all the economic benefits from the use
Impairment losses for financial assets measured at amortized cost or at fair value through other of the identified asset (e.g., by having the exclusive right to use the asset throughout that period) and the
comprehensive income (debt instrument) are recognized in accordance with IFRS 9 ‘Financial right to direct the use of the identified asset throughout the period of use.
Instruments.’ The standard requires that not only historical data, but also future expectations and
projections are taken into consideration when accounting for impairment losses (‘expected credit loss’ In its role as a lessee, adidas leases various types of assets, particularly buildings (retail stores, offices,
model). warehouses, etc.), land, technical equipment and machinery (warehouse equipment, production machines,
etc.), motor vehicles, and computer hardware, as well as furniture and fixtures. Lease contracts are
adidas consistently applies the simplified approach and recognizes lifetime expected credit losses for all typically negotiated for fixed periods of up to 99 years but may include extension or termination options.
accounts receivable. In order to calculate a collective loss allowance, all accounts receivable sharing Lease terms are negotiated individually and may contain a wide range of different terms and conditions.
similar credit risk characteristics are allocated into several portfolios based on geographical regions and
macroeconomic indicators. Historical payment and aging patterns for accounts receivable are analyzed adidas makes use of the recognition exemption in IFRS 16 to not recognize right-of-use assets and lease
individually for each of the portfolios to determine the probability of default, which is further adjusted by liabilities for leases of low-value assets (i.e., value of the underlying asset, when new, is € 5,000 or less)
forward-looking factors derived primarily from the Credit Default Swap (CDS) spreads of the countries and short-term leases (shorter than twelve months and the agreement does not include a purchase
where adidas runs its operations. The adjusted probability of default is then applied in combination with a option). Lease payments for low-value leases are recognized as expenses as they are incurred over the
loss given default and exposure at default as a percentage rate to calculate the expected credit loss for lease term.
each portfolio and aging bucket. The percentage rates are reviewed on a regular basis to ensure that they
reflect the latest data on credit risk. In case objective evidence of credit impairment is observed for Furthermore, adidas exercises the option for lessees to combine lease payments with payments for non-
accounts receivable from a specific customer, a detailed analysis of the credit risk is performed, and an lease components in the calculation of the lease liability and right-of-use asset for all lease asset classes
appropriate individual loss allowance is recognized for this customer. Accounts receivables are considered except for corporate real estate.
to be in default when it is expected that the debtor will not fulfill its credit obligations toward adidas.
adidas recognizes a right-of-use asset and a corresponding lease liability at the lease commencement
Cash and cash equivalents measured at amortized cost are subject to a general impairment approach date. At the commencement date, adidas initially measures the lease liability at the present value of the
under IFRS 9. adidas applies the low credit risk exemption for the majority of such instruments due to the lease payments that are not paid at that date. This includes fixed payments (including in-substance fixed
low credit risk for these investments, which is based on the investment grade of their counterparties payments), less any lease incentives receivable, variable lease payments based on an index or a rate,
(defined by the company as equivalent of BBB+ or higher). A significant increase of credit risk is assumed amounts expected to be payable by adidas under residual value guarantees, the exercise price of a
for cash and cash equivalents when the instruments are more than 30 days past due. adidas monitors the purchase option if adidas is reasonably certain to exercise that option, and payments of penalties for
credit risk associated with cash and cash equivalents taking into consideration the economic environment, terminating the lease, if the lease term reflects the lessee exercising that option. Other variable lease
external credit ratings, and/or CDS spreads of counterparty financial institutions, and using established payments are excluded from the measurement of the lease liability. The lease payments are discounted
exposure limits. Expected credit loss of cash and cash equivalents is calculated based on the probability of using the interest rate implicit in the lease. If this rate cannot be readily determined, adidas uses its
default and recovery rates derived from CDS spreads or external credit ratings of the counterparties. Cash incremental borrowing rate. Generally, adidas uses the incremental borrowing rate as the discount rate. It
and cash equivalents are considered to be in default when they are more than 90 days past due. is adjusted to reflect the country-specific risk, the credit risk of adidas, collateral from the change in value
of the leased asset, the contract currency-specific risk, and the lease term. ► SEE NOTE 10 ► SEE NOTE 19
Other financial assets within the scope of IFRS 9 impairment analysis include mainly security deposits as
well as accounts receivable from credit card companies and electronic marketplaces. The credit risk After the commencement date, lease payments are split into redemption payments and interest payments.
associated with such financial assets is determined based on the economic environment, external credit The lease liability is subsequently measured by increasing the carrying amount to reflect interest cost on
ratings, and/or CDS spreads of counterparty financial institutions. Other financial assets are considered to the lease liability using the effective interest rate and reducing the carrying amount to reflect the lease
be in default when they are more than 90 days past due. payments made. The carrying amount of the lease liability is remeasured provided any
reassessments/lease modifications occur (including changes in the assessment of whether an extension
Objective evidence that credit impairment of financial assets has occurred includes, for instance, or termination option is reasonably certain to be exercised).
significant financial difficulty of the debtor/issuer, indications of their potential bankruptcy, the
deterioration of the market for their products, and general macroeconomic problems. The gross carrying At the commencement date, the right-of-use asset is initially measured at cost, which is comprised of the
amount of financial assets is written off when adidas, based on a case-by-case assessment, assumes that amount of the initial measurement of the lease liability, any lease payments made at or before the
their recovery is no longer possible. commencement date, less any lease incentives received, any initial direct costs incurred by the lessee and
an estimate of costs to be incurred by adidas in dismantling and removing the underlying asset, restoring
Impairment losses on accounts receivable are presented in the line item ‘Impairment losses (net) on the site on which it is located, or restoring the underlying asset to the condition required by the terms and
accounts receivable and contract assets’. conditions of the lease. The right-of-use asset is subsequently measured at cost less any accumulated
depreciation and impairment losses and adjusted for certain remeasurements of the lease liability. In

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principle, the right-of-use asset is depreciated on a straight-line basis over the lease term or the useful Estimated useful lives are as follows:
life of the leased asset, whichever is shorter.
Estimated useful lives of intangible assets
adidas applies judgment in determining the lease term for lease contracts including extension or
termination options. The assessment of whether the options are reasonably certain to be exercised has an Years
impact on the lease term and therefore may significantly affect the measurement of lease liabilities and Software 3–7
right-of-use assets, respectively. Patents and licenses 5 – 15
Websites 2
Lease contract renegotiations that result in changes to the original contractual conditions, e.g., changes in
scope, consideration (including discounts and concessions), or lease term are treated as lease
modifications. Depending on the circumstances of the renegotiation, either lease modifications are Research and development
accounted for as a new separate contract, or they trigger a remeasurement of the lease liability using the Research costs are expensed in full as incurred. Development costs for internally generated intangible
discounted future lease payments. In the latter case, a corresponding adjustment is made to the right-of- assets are also expensed as incurred if they do not meet the recognition criteria of IAS 38 ‘Intangible
use asset with, in some instances, a difference recognized in profit or loss. Assets.’

Lease reassessments are the result of changes in assumptions or judgments, such as changes in lease Borrowings and other liabilities
term due to amended estimates surrounding existing extension and termination options. It is necessary to Borrowings (e.g., Eurobonds) and other liabilities are recognized at fair value net of transaction costs
remeasure the lease liability using the discounted or existing future lease payments and make a incurred. In subsequent periods, borrowings are stated at amortized cost using the ‘effective interest
corresponding adjustment to the right-of-use asset. method.’ Any difference between proceeds (net of transaction costs) and the redemption value is
recognized in the consolidated income statement over the term of the borrowing.
Goodwill
Goodwill is an asset representing the future economic benefits arising from assets acquired in a business Compound financial instruments (e.g., convertible bonds) are divided into a liability component shown
combination that are not individually identified and separately recognized. This results when the purchase under borrowings and into an equity component resulting from conversion rights. The equity component is
cost exceeds the fair value of acquired identifiable assets, liabilities, and contingent liabilities. Goodwill included in the capital reserve. The fair value of the liability component is determined by discounting the
arising from the acquisition of a foreign entity and any fair value adjustments to the carrying amounts of interest and principal payments of a comparable liability without conversion rights, applying risk-adjusted
assets received, liabilities, and contingent liabilities are treated as assets, liabilities, and contingent interest rates. The liability component is subsequently measured at amortized cost using the ‘effective
liabilities of the respective reporting entity, and are translated at exchange rates prevailing at the date of interest method.’ The equity component is determined as the difference between the fair value of the total
the initial consolidation. compound financial instrument and the fair value of the liability component and is reported within equity.
There is no subsequent measurement of the equity component. At initial recognition, directly attributable
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment transaction costs are assigned to the equity and liability component pro rata on the basis of the respective
losses (impairment-only approach). ► SEE NOTE 11 carrying amounts.

Goodwill is carried in the functional currency of the acquired foreign entity. Provisions and accrued liabilities
Provisions are recognized when there is a present obligation (legal or constructive) to third parties that
Intangible assets (except goodwill) has been incurred as a result of a past event, when the amount of the obligation can be estimated reliably
Intangible assets with definite useful lives are valued at amortized cost. Amortization is calculated on a and when it is probable that there will be an outflow of resources. In general, all provisions are uncertain
straight-line basis over the estimated useful life, taking into account any potential residual value. as to their maturity or amount. The expense relating to a provision is presented in the consolidated income
► SEE NOTE 12 statement. Non-current provisions are discounted if the effect of the time value of money is material, with
the interest expense being reported as financial expenses. ► SEE NOTE 18
Expenditure during the development phase of internally generated intangible assets is capitalized as
incurred if it fulfills the recognition criteria under IAS 38 ‘Intangible Assets.’ Development costs for Accrued liabilities are liabilities to pay for goods or services that have been received or supplied but have
internally generated intangible assets are capitalized from the date on which the recognition criteria set not been paid, invoiced, or formally agreed with the supplier, including amounts due to employees. The
out in IAS 38 'Intangible Assets' are first met. The capitalized development costs are amortized on a uncertainty regarding amount or timing of accrued liabilities is generally much less than for provisions.
systematic basis from the day the intangible assets are available for use. ► SEE NOTE 20

Pensions and similar obligations

Provisions and expenses for pensions and similar obligations relate to the company’s obligations for
defined benefit and defined contribution plans. The obligations under defined benefit plans are determined
separately for each plan by valuing the employee benefits accrued in return for their service during the
current and prior periods. These benefit accruals are discounted to calculate their present value, and the

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fair value of any plan assets is deducted in order to determine the net liability. The discount rate is set on depending on the timing of yearly payments received from customers. The performance obligation related
the basis of yields of high-quality fixed-rate corporate bonds at the balance sheet date provided there is a to these contract assets and liabilities is satisfied over the life of the contract, i.e., the guaranteed
deep market for such corporate bonds in a given currency. Otherwise, government bond yields are used as minimum income per year is evenly distributed over twelve months, whereby payments are recorded as
a reference. Calculations are performed by qualified actuaries using the ‘projected unit credit method’ in arranged in the contract with the customer.
accordance with IAS 19 Employee Benefits. Obligations for contributions to defined contribution plans are
recognized as an expense in the consolidated income statement as incurred. ► SEE NOTE 23 Advertising and promotional expenditure
Advance payments for media campaigns are included in prepaid expenses within other current and non-
Contingent liabilities current assets until the services are received, and upon receipt are expensed in full. Significant costs for
Contingent liabilities are possible obligations that arise from past events and whose existence will be media campaigns are expensed on a straight-line basis over the intended duration of the media campaign.
confirmed only by the occurrence of one or more uncertain future events not wholly within the control of
adidas. Additionally, contingent liabilities may be present obligations that arise from past events, but which Promotional expenses including one-time up-front payments for promotion contracts are principally
are not recognized because it is not probable that an outflow of resources will be required to settle the expensed on a straight-line basis over the term of the agreement.
obligation, or the amount of the obligation cannot be measured with sufficient reliability. Contingent
liabilities are not recognized in the consolidated statement of financial position but are disclosed and Interest
explained in the Notes. ► SEE NOTE 38 Interest is recognized as income or expense as incurred using the ‘effective interest method’ with the
exception of interest that is directly attributable to the acquisition, construction, or production of a
Treasury shares qualifying asset. This interest is capitalized as part of the cost of the qualifying asset.
When adidas AG shares are repurchased and recognized as treasury shares, the amount of the
consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a Interest paid is presented within the net cash used in financing activities.
deduction from equity. The nominal value of € 1 per treasury share is debited to share capital. Any
premium or discount to the nominal value is shown as an adjustment to the retained earnings. If treasury Government grants
shares are sold or reissued, the nominal value of the shares will be credited to share capital and the adidas receives government grants in the form of subsidies, subventions, or premiums from local,
amount exceeding the nominal value will be added to the retained earnings. national, or international government authorities such as those of the Free State of Bavaria, the Federal
Republic of Germany, and the European Union.
Revenue
Revenue derived from the sale of goods is recognized when adidas has satisfied the respective Government grants are recognized if there is adequate certainty that the grants will be received and that
performance obligation by transferring the promised goods to the customer. The goods are transferred at the company satisfies the conditions attached.
the point in time when the customer obtains control of the respective goods. The timing of the transfer of
control depends on the individual terms of the sales agreement (terms of delivery). Government grants are reported in the consolidated income statement as a deduction from the related
expenses.
The amount of revenue to be recognized is determined based on the consideration adidas expects to be
entitled to in exchange for transferring the promised goods or services to the customer, taking into Income taxes
account returns, discounts, and rebates. Current income taxes are computed in accordance with the applicable taxation rules established in the
countries in which adidas operates.
Under certain conditions and in accordance with contractual agreements, the company’s customers have
the right to return products and to either exchange them for similar or other products or to return the adidas computes deferred taxes for all temporary differences between the carrying amount and the tax
products against the issuance of a credit note. Amounts for estimated returns related to revenues are base of its assets and liabilities as well as for tax loss carry-forwards. As it is not permitted to recognize a
accrued based on past experience of average return rates and average actual return periods by means of a deferred tax liability for the initial recognition of goodwill, adidas does not compute any deferred taxes
refund liability. The return assets are measured at the carrying amount of the inventories/products, less thereon.
any handling costs and any potential impairment.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
Provided that the customers meet certain predefined conditions, adidas grants its customers different when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
types of globally aligned performance-based rebates. Examples include rebates for customers’ increasing enacted or substantively enacted at the reporting date.
adidas product sales, for customer loyalty, and for sell-out support, e.g., through retail space/franchise
store management. As soon as it is assumed that the customer fulfills the requirements for being granted Deferred tax assets arising from deductible temporary differences and tax loss carry-forwards that exceed
the rebate, this amount is recognized as a sales deduction via an accrued liability for marketing and sales. taxable temporary differences are only recognized to the extent that it is probable that the entity
concerned will generate sufficient taxable income to realize the associated benefit. The carrying amount of
In addition, adidas generates revenue from the licensing-out of the right to use the brands to third parties. deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
The resulting sales-based royalty and commission income is recognized based on the contract terms on probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
an accrual basis, i.e., revenue is already realized even though the payment takes place at a later point in utilized.
time. Contracts with guaranteed minimum income result in contract assets and contract liabilities

212 213
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Income tax is recognized in the consolidated income statement unless it relates to items recognized Estimation uncertainties and judgments
directly in equity, in which case it is recognized in equity. Deferred tax relating to items recognized outside The preparation of financial statements in conformity with IFRS requires the use of assumptions and
profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the estimates that affect reported amounts and related disclosures. Although such estimates are based on the
underlying transaction either in other comprehensive income or directly in equity. best of our knowledge of current events and actions, actual results may ultimately differ from these
estimates. In 2023, assumptions and estimates continued to be significantly impacted especially by the
When there is uncertainty over income tax treatments, adidas recognizes and measures current or increased macroeconomic and geopolitical challenges.
deferred tax assets or liabilities applying the requirements of IAS 12 and IFRIC 23. On a case-by-case
basis, adidas determines whether to consider each uncertain tax treatment separately or together with As a result of the termination of the Yeezy partnership, judgments were made in the preparation of the
one or more other uncertain tax treatments, depending on which approach better predicts the resolution consolidated financial statements, in particular with regard to the valuation of existing inventories, as well
of the uncertainty. as in the assessment of the litigation risks in the context of the ongoing arbitration proceedings, including
the counterclaim filed by the defendants. ► SEE NOTE 07 ► SEE NOTE 38
Where it is not considered probable that the tax authority will accept an uncertain tax treatment, adidas
reflects the effects of the uncertainty by using one of the following methods, depending on which method The key assumptions concerning further future and other key sources of estimation uncertainty at the
better predicts the resolution of the uncertainty: balance sheet date, which have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year, are outlined in the respective Notes, which include in
─ the single most likely amount or particular accounts receivable, inventories, right-of-use-assets, goodwill, other provisions, pensions,
─ the expected value based on the sum of the probability-weighted amounts. derivatives, and income taxes, as well as other financial commitments and contingencies. ► SEE NOTE 05
► SEE NOTE 07 ► SEE NOTE 10 ► SEE NOTE 11 ► SEE NOTE 18 ► SEE NOTE 23 ► SEE NOTE 28 ► SEE NOTE 34 ► SEE NOTE 38
In assessing whether and how an uncertain tax treatment affects the determination of taxable profits (tax
losses), tax bases, unused tax losses, unused tax credits, and tax rates, adidas assumes that a taxation Judgments have also been used in determining the lease term for lease contracts. ► SEE NOTE 10 ► SEE NOTE 19
authority will examine amounts it has a right to examine and will have full knowledge of all relevant
information when making those examinations. ► SEE NOTE 34
03 Discontinued operations
Share-based payment
The cost of equity-settled share-based payment transactions with employees is determined by the fair The position of discontinued operations mainly includes the Reebok business, which was sold on February
value at the grant date using an appropriate valuation model. That cost is recognized in personnel 28, 2022 with effect from March 1, 2022. The majority of the purchase price was paid at closing, with the
expenses, together with a corresponding increase in equity (retained earnings), over the period in which remainder comprising deferred and contingent consideration. The fair value of earn-out components was
the service and, where applicable, the performance conditions are fulfilled (the vesting period). The determined using the discounted cash flow method, considering Monte Carlo Simulations.
cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the company’s best estimate of the number The profit from discontinued operations for 2023 in the amount of € 44 million (2022: € 384 million) is fully
of equity instruments that will ultimately vest. ► SEE NOTE 26 attributable to the shareholders of adidas AG.

Service-independent and non-market performance conditions are not taken into account when In the event the operations of the Reebok business achieve certain performance criteria during the period
determining the fair value of awards at the grant date, but the likelihood of the conditions being met is March 1, 2022, to December 31, 2031, specified as earn-out components in the sale agreement, additional
assessed as part of the company’s best estimate of the number of equity instruments that will ultimately cash consideration of up to € 500 million will be due. At the time of the sale, the fair value of the
vest. If the estimate is changed, even a credit in the consolidated income statement for the period can be consideration was determined to be € 247 million. It has been recognized as a financial asset at fair value
possible as it reflects the movement in cumulative expenses from the beginning to the end of that period. through profit and loss.

No expense is recognized for awards that do not ultimately vest if non-market performance and/or service At year-end 2023, the fair value was reestimated to be € 301 million (2022: € 227 million). The gain of
conditions have not been met. € 74 million compared with the fair value at year-end 2022 is presented in discontinued operations net of
related income tax.
Equity-settled share-based payment transactions with parties other than employees are generally
measured at the fair value of the goods or services received, except where the fair value cannot be Additionally, as contemplated in the sale agreement relating to the Reebok business, the sale was subject
estimated reliably, in which case they are measured at the fair value of the equity instruments granted, to deferred considerations for inventory and contractually specified items, which were settled by the end of
measured at the date the entity obtains the goods or the counterparty renders the service. the first half year 2023 (2022: € 274 million).

For cash-settled share-based payment transactions, the goods or services acquired, and the liability
incurred are measured at the fair value of the liability. Until the liability is settled, the fair value of the
liability is remeasured at the end of each reporting period and at the date of settlement, with all changes in
fair value recognized in profit or loss for the period.

214 215
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Notes to the Consolidated Statement of Financial Position 05 Accounts receivable

Accounts receivable consist mainly of the currencies US dollar, euro, and Chinese renminbi and are as
04 Cash and cash equivalents follows:

Cash and cash equivalents consist of cash held by banks, cash on hand, and short-term deposits. Accounts receivable € in millions

Individual
Short-term deposits are only shown as cash and cash equivalents if they are readily convertible to a known loss
amount of cash and are subject to an insignificant risk of changes in value. Collective loss allowance allowance Total
Past due
The credit risk of cash and cash equivalents measured at amortized cost is insignificant due to their short- Not yet 31 – 90
due days Past due > 90 days
term maturity, counterparties’ investment grade credit ratings, and established exposure limits.
Not Not Not
Therefore, adidas does not recognize any credit impairment losses for these financial assets.
credit- credit- credit- Credit- Credit-
impaired impaired impaired impaired impaired
As of December 31, 2023 cash and cash equivalents includes cash in banks and cash on hand amounting to
€ 596 million (2022: € 726 million) and money market funds amounting to € 835 million (2022: Dec. 31, 2023
€ 72 million). In addition, cash and cash equivalents includes € 211 million and € 155 million as of Accounts receivable, gross 1,678 239 49 43 127 2,135
December 31, 2023 and 2022, respectively, held by subsidiaries that were subject to foreign exchange Weighted average loss rate 1.6% 8.6% 29.3% 97.0% 99.1% 10.7%
control (e.g. Russia, Argentina) or other legal restriction and hence were not at anytime available for Loss allowance (28) (21) (14) (41) (126) (229)
general use by adidas AG or other subsidiaries. Accounts receivable, net 1,650 219 34 1 1 1,906

Dec. 31, 2022

Further information about cash and cash equivalents is presented in these Notes. ► SEE NOTE 28
Accounts receivable, gross 2,073 428 60 63 135 2,759
Weighted average loss rate 1.5% 6.2% 22.0% 42.8% 98.2% 8.3%
Loss allowance (31) (26) (13) (27) (133) (230)
Accounts receivable, net 2,042 402 47 36 2 2,529

Movement in loss allowances for accounts receivable € in millions

2023 2022

Loss allowances at January 1 230 208

Net remeasurement of loss allowances 6 33

Write-offs charged against the loss allowance accounts (8) (12)
Currency translation differences (2) 0
Other changes 3 1
Loss allowances at December 31 229 230

As at December 31, 2023, the loss allowance for not-credit-impaired accounts receivable in the amount of
€ 244 million and credit-impaired accounts receivable in the amount of € 6 million was not recognized as
adidas holds credit enhancement instruments, mainly in the form of credit insurance and bank
guarantees, which mitigate the credit risk of those financial assets.

There are no material balances of accounts receivable written off but subject to enforcement activity.

Accounts receivable are derecognized when substantially all the risks and rewards incidental to the
financial asset are transferred to a third party under factoring arrangements. As of December 31, 2023,
accounts receivable amounting to € 70 million (2022: € 112 million) were derecognized in connection with
factoring agreements in Japan. The purchase price corresponds to the nominal amount of the respective

216 217
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

receivable, less any deductions relating to the receivable (e.g. discounts) granted by adidas to the debtor 07 Inventories
and less the factoring fee and interest. The factoring fee amounts to 0.08% of the nominal amount of the
purchased receivables. Interest on the disbursed purchase price is based on an interest rate composed of
Inventories by major classification are as follows:
the ‘Tokyo Interbank Offered Rate‘ (reference interest rate) plus a margin of 0.19% to 1.33% p.a. and is
paid for the period from the disbursement of the purchase price portion to the settlement of the receivable Inventories € in millions
by the debtor.
Dec. 31, 2023 Dec. 31, 2022
Further information about credit risks is contained in these Notes. ► SEE NOTE 28
Allowance Allowance
for for
Gross obsoles- Gross obsoles-

06 Other current financial assets Merchandise and finished

value cence Net value value cence Net value

3,611 (317) 3,294 4,522 (225) 4,297

goods on hand
Other current financial assets consist of the following: Goods in transit 1,222 – 1,222 1,667 – 1,667
Raw materials 8 – 8 9 – 9
Other current financial assets € in millions Work in progress 0 – 0 – – –
Inventories 4,841 (317) 4,525 6,198 (225) 5,973
Dec. 31, 2023 Dec. 31, 2022
Currency options 8 10
Forward exchange contracts 80 222
Goods in transit mainly relate to shipments of finished goods and merchandise from suppliers in Asia to
Suppliers with debit balances 37 47
subsidiaries in Europe, North America, Asia, and Latin America.
Security deposits 50 46
Receivables from credit cards and similar receivables 269 201
Expenses from write-down on inventories amounted to € 145 million in 2023 (2022: € 137 million).
Customs 140 46
Receivables from retail business 71 79
As of December 31, 2023, inventories include Yeezy products in the amount of approximately € 250 million.
Other investments 14 78
This includes impairment losses of € 12 million in 2023, which were recognized based on management
Deferred consideration of Reebok sale – 241
estimates.
Sundry 104 68
Other current financial assets, gross 773 1,038
Less: accumulated allowances (18) (24)
08 Other current assets
Other current financial assets, net 755 1,014

Other current assets consist of the following:

Further information about currency options and forward exchange contracts is contained in these Notes. Other current assets € in millions
► SEE NOTE 28

Dec. 31, 2023 Dec. 31, 2022

Prepaid expenses 295 250
Return assets 275 338
Tax receivables other than income taxes 373 632
Contract assets 10 15
Sundry 54 90
Other current assets, gross 1,007 1,323
Less: accumulated allowances (4) (8)
Other current assets, net 1,003 1,316

Prepaid expenses mainly relate to promotion and service contracts. The decrease in the line item ‘Tax
receivables other than income taxes’ relates mainly to value-added tax.

218 219
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

09 Property, plant, and equipment Property, plant, and equipment € in millions

Technical Other
The following table presents a reconciliation of the carrying amount of property, plant, and equipment: equipment equipment, Property,
Land and and furniture, and Construction plant, and
buildings machinery fixtures in progress equipment
Property, plant, and equipment € in millions
Depreciation 144 49 201 – 394
Technical Other Impairment losses 16 0 4 0 21
equipment equipment, Property, Reversals of impairment
Land and and furniture, and Construction plant, and (2) (2) (8) – (12)
losses
buildings machinery fixtures in progress equipment
Disposals (26) (15) (140) – (182)
Acquisition cost Transfers (21) (4) (15) (0) (40)
January 1, 2022 2,093 473 1,794 212 4,571 Decrease in companies
– – (0) – (0)
consolidated
Additions 125 17 232 131 504
Currency translation
Disposals (42) (13) (161) (4) (218) (37) (12) (52) (0) (101)
differences
Transfers 72 (9) 33 (108) (12)
December 31, 2023 922 340 1,445 0 2,707
Decrease in companies
(3) (1) (2) 1 (4)
consolidated Net carrying amount
Currency translation January 1, 2022 1,389 197 458 212 2,256
45 13 9 (1) 66
differences
December 31, 2022/
December 31, 2022/ 1,442 156 450 230 2,279
2,290 480 1,906 230 4,907 January 1, 2023
January 1, 2023
December 31, 2023 1,378 190 434 156 2,157
Additions 86 18 166 93 363
Disposals (35) (18) (150) (5) (207)
Transfers 25 65 20 (155) (46)
As a general principle, it is regularly assessed whether there are any indications that property, plant and
Decrease in companies
– – (0) – (0) equipment might be impaired.
consolidated
Currency translation
(66) (15) (63) (7) (152) Irrespective of the existence of such indications, furniture and fixtures in adidas’ own retail stores as part
differences
December 31, 2023 2,300 530 1,878 156 4,864 of the cash-generating unit are tested annually for impairment, whereby the recoverable amount (value in
use) of the cash-generating unit, as part of determining the profitability of adidas’ own retail stores, is
Accumulated depreciation calculated using the ‘discounted cash flow method.’
and impairment
January 1, 2022 704 276 1,336 0 2,316
Impairment losses recognized in 2023 mainly relate to the company’s own retail activities, for which,
Depreciation 139 47 242 – 429 contrary to initial expectations, no sufficient future economic benefit is expected.
Impairment losses 33 6 27 – 66
Reversals of impairment In 2023, impairment losses of € 21 million were recognized for property, plant and equipment. They are
(1) (0) (2) – (3)
losses
mainly attributable to China with € 10 million, North America with € 6 million and EMEA with € 3 million.
Disposals (32) (12) (150) (0) (194)
The reversals of impairment losses of € 12 million are mainly attributable to EMEA with € 7 million and
Transfers (0) (0) 0 – (0)
China with € 5 million. Both were recognized in the other operating expenses. These Notes provide further
Decrease in companies
consolidated
(3) (1) (2) 0 (6) information on the methodology on impairment losses for adidas’ own-retail stores. ► SEE NOTE 10
Currency translation
9 8 5 (0) 21 Further information on total depreciation and amortization expenses, impairment losses, and reversals of
differences
December 31, 2022/ impairment losses is provided in these Notes. ► SEE NOTE 31
849 324 1,455 0 2,628
January 1, 2023

220 221
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

10 Right-of-use assets amounts of adidas´own retail stores break down into North America at € 253 million, Greater China at
€ 105 million, Asia-Pacific at € 83 million, EMEA at € 81 million, and Latin America at € 15 million.
The following table presents a reconciliation of the carrying amount of right-of-use assets:
In 2023, reversals of impairment losses of € 29 million were incurred. They mainly result from EMEA. The
Right-of-use assets € in millions impairment losses and reversals of impairment losses were recognized in the other operating expenses.

Technical Other The income from subleasing of right-of-use assets recognized in the consolidated income statement in
equipment equipment, 2023 amounts to € 2 million (2022: € 3 million).
Land and and furniture, and Right-of-use
buildings machinery fixtures assets
Further information on total depreciation and amortization expenses, impairment losses and reversals of
January 1, 2023 2,600 31 34 2,665
impairment losses is provided in these Notes. ► SEE NOTE 31
Additions 307 7 21 335
Disposals (79) (7) (0) (87)

11 Goodwill
Depreciation (556) (14) (19) (590)
Impairment losses (86) – – (86)
Reversal of impairment losses 29 – – 29
Currency translation differences (71) (0) (1) (72)
The following table presents a reconciliation of the carrying amount of goodwill:
Other 51 – 1 52
December 31, 2023 2,195 17 36 2,247
Goodwill € in millions

Dec. 31, 2023 Dec. 31, 2022

Goodwill, gross 1,647 1,680
Right-of-use assets € in millions Less: accumulated impairment losses (409) (420)
Goodwill, net 1,238 1,260
Technical Other
equipment equipment,
Land and and furniture, and Right-of-use
buildings machinery fixtures assets
adidas determines whether goodwill impairment is necessary at least on an annual basis. The impairment
January 1, 2022 2,493 52 24 2,569
test for goodwill is performed based on groups of cash-generating units that represent the lowest level
Additions 853 10 28 892
within the company at which goodwill is monitored for internal management purposes. This requires an
Disposals (68) – – (67)
estimation of the recoverable amount of the groups of cash-generating units to which the goodwill is
Depreciation (639) (32) (19) (690)
allocated. The recoverable amount of a group of cash-generating units is determined based on its value in
Impairment losses (60) – – (60)
use. Estimating the value in use requires adidas to make an estimate of the expected future cash flows
Reversal of impairment losses 1 – – 1
from the groups of cash-generating units and to choose a suitable discount rate to calculate the present
Currency translation differences 18 0 – 19
value of those cash flows.
Net change due to remeasurements 3 – – 3
December 31, 2022 2,600 31 34 2,665 This calculation uses cash flow projections based on the financial planning covering a four-year period in
total. The planning is based on long-term expectations of the company and reflects an average annual
high-single-digit sales increase with varying forecast growth prospects for the different groups of cash-
As a general principle, it is regularly assessed whether there are any indications that right-of-use assets generating units. Furthermore, adidas expects the operating margin to improve to a level of low double-
might be impaired. Irrespective of the existence of such indications, right-of-use assets in adidas’ own digit profitability for the company by 2027, primarily driven by an improvement in gross margin, as well as
retail stores are tested annually for impairment, whereby the recoverable amount (value in use) of the lower operating expenses as a percentage of sales. The planning for capital expenditure and working
cash generating unit, as part of determining the profitability of adidas’ own retail stores, is calculated capital is primarily based on past experience. The planning for future tax payments is based on current
using the ‘discounted cash flow method.’ statutory corporate tax rates of the individual groups of cash-generating units. Cash flows beyond this
four-year period are extrapolated using steady growth rates between 1.5% and 2.2% (2022: 1.7%).
In 2023, impairment losses of € 86 million were recognized. Of those, € 65 million are related to the According to the company’s expectations, these growth rates do not exceed the long-term average growth
company’s own retail activities, for which, in contrast to expectations in the previous year, lower future rate of the business sector in which the respective group of cash-generating units operates.
economic benefits are expected, and € 23 million to a warehouse in EMEA, which was written down due to
an early termination of the contract. Discount rates are based on a weighted average cost of capital calculation considering a five-year average
market-weighted debt/equity structure and financing costs referencing major competitors for the
Impairment losses relating to retail stores are mainly attributable to EMEA with € 24 million, North respective group of cash-generating units. The discount rates used reflect the specific equity and country
America with € 20 million, Asia-Pacific with € 16 million and Greater China with € 7 million. Discount risk of the respective group of cash-generating units.
rates between 2.0% and 34.0% were used to calculate the impairment for the value in use. The recoverable

222 223
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

The groups of cash-generating units are defined as the regional markets that are responsible for the 12 Other intangible assets
distribution of the adidas brands. The regional markets are Europe, Middle East and Africa (EMEA), North
America, Greater China, Asia-Pacific, and Latin America. The number of groups of cash-generating units
Other intangible assets consist of the following:
amounted to a total of five at the end of 2023 and 2022, respectively.
Other intangible assets € in millions
The goodwill impairment tests revealed no need for goodwill impairment for the years ending
December 31, 2023 and 2022. Internally
developed Other
intangible intangible
The carrying amounts of acquired goodwill allocated to the respective groups of cash-generating units and assets assets
the respective discount rates applied to the cash flow projections are as follows:
Acquisition cost
Allocation of goodwill January 1, 2022 23 1,233
Additions 24 168
Goodwill (€ in millions) Discount rate (pre-tax)
Disposals – (15)
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
Transfers – 15
EMEA 706 720 16.2% 14.5% Decrease in companies consolidated – (35)
North America 77 77 12.9% 12.4% Currency translation differences – 13
Greater China 293 299 14.2% 13.4%
December 31, 2022/January 1, 2023 46 1,379
Asia-Pacific 162 164 14.5% 14.1%
Additions 32 109
Total 1,238 1,260
Disposals (1) (20)
Transfers – (105)
Decrease in companies consolidated – (0)
A change in the discount rate by up to approximately 1.6 percentage points or a reduction of planned free Currency translation differences – (12)
cash inflows by up to approximately 15.2% would not result in any impairment requirement of the cash
December 31, 2023 78 1,351
generating unit North America.
Accumulated amortization and impairment
Among the remaining cash generating units, neither a change in the discount rate by up to approximately January 1, 2022 20 883
5.8 percentage points, nor a reduction of planned free cash inflows by up to approximately 36.9% would Amortization 1 100
result in any impairment requirement. Impairment losses – 28
Disposals – (14)
Future changes in expected cash flows and discount rates may lead to impairments of the reported Transfers – 3
goodwill in the future. Decrease in companies consolidated – (35)
Currency translation differences – 10
The majority of goodwill is denominated in US dollars. The effect of currency translation is as follows:
December 31, 2022/January 1, 2023 22 974
Amortization 6 106
Reconciliation of goodwill, net € in millions
Impairment losses – 10
North Greater Reversals of impairment losses – (0)
EMEA America China Asia-Pacific Total Disposals (0) (12)
December 31, 2022 720 77 299 164 1,260 Transfers – (110)
Currency translation Decrease in companies consolidated – (0)
(14) 0 (6) (2) (23)
differences Currency translation differences – (8)
December 31, 2023 706 77 293 162 1,238 December 31, 2023 27 959

Net carrying amount

January 1, 2022 2 350
December 31, 2022/January 1, 2023 25 405
December 31, 2023 50 392

Further information on total depreciation and amortization expenses, impairment losses, and reversals of
impairment losses is provided in these Notes. ► SEE NOTE 31

224 225
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

13 Long-term financial assets 15 Other non-current assets

Long-term financial assets primarily include an 8.33% investment in FC Bayern München AG (2022: 8.33%) Other non-current assets consist of the following:
of € 89 million (2022: € 87 million). This investment is classified as fair value through profit or loss and is
recorded at fair value. This equity security does not have a quoted market price in an active market. Other non-current assets € in millions
Therefore, existing contractual arrangements are used in order to calculate the fair value as at
December 31, 2023 and 2022. Dec. 31, 2023 Dec. 31, 2022
Prepaid expenses 47 75
Other equity investments include minority shareholdings. There is currently no intention to sell these Sundry 2 2
shares. Other minority shareholdings include a decrease of the fair value in an amount of € 5 million in Other non-current assets 49 76
2023 (2022: € 1 million increase).

The line item ‘Other investments’ comprises investments that are mainly invested in insurance products, Prepaid expenses mainly relate to long-term promotion contracts. ► SEE NOTE 38
which are measured at fair value, and securities for long-term variable compensation components. Other
investments include a decrease of the fair value in an amount of € 6 million in 2023 (2022: € 1 million
increase). 16 Borrowings and credit lines
Long-term financial assets € in millions Borrowings are denominated in a variety of currencies in which adidas conducts its business. The largest
portion of effective gross borrowings (before liquidity swaps for cash management purposes) as at
Dec. 31, 2023 Dec. 31, 2022
December 31, 2023, is denominated in euros (2023: 99%; 2022: 100%).
Investment in FC Bayern München AG 89 87
Other equity investments 85 88
The weighted average interest rate on the Group’s gross borrowings increased to 1.6% in 2023
Other investments 127 125
(2022: 0.8%).
Loans – 0
Long-term financial assets 301 301 As at December 31, 2023, adidas had cash credit lines and other long-term financing arrangements
totaling € 6.5 billion (2022: € 7.5 billion); thereof unused credit lines accounted for € 3.6 billion
(2022: € 4.0 billion). In addition, as at December 31, 2023, adidas had separate lines for the issuance of
letters of credit and guarantees in an amount of approximately € 0.4 billion (2022: € 0.5 billion).
14 Other non-current financial assets
In November 2020, adidas entered into a new syndicated credit facility agreement with twelve banks
Other non-current financial assets consist of the following: totaling € 1.5 billion. The credit facility agreement was subsequently amended and restated in October
2021 and in November 2022 increasing the size to € 2.0 billion, covered by eleven partner banks, and
Other non-current financial assets € in millions extending the maturity until November 2027. In December 2023, adidas reduced the syndicated credit
facility size to € 1.864 billion and the number of lending banks to ten partner banks. The syndicated credit
Dec. 31. 2023 Dec. 31. 2022 facility can be drawn in euros and US dollars. The interest bearing is based on a defined margin on a
Forward exchange contracts 2 3 reference rate (,€STRʻ or ,EURIBORʻ for euros).
Security deposits 78 80
Earn-out components 301 227 The amounts reported as gross borrowings represent outstanding borrowings under the following
Sundry 37 26 arrangements with aggregated expiration dates as follows:
Other non-current financial assets 418 336
Gross borrowings as at December 31, 2023 € in millions

Between 1 Between 3 More than

Further information about forward exchange contracts is contained in these Notes. ► SEE NOTE 28
Up to 1 year and 3 years and 5 years 5 years Total
Bank borrowings incl.
Further information about earn-out components is provided in these Notes. ► SEE NOTE 03 ► SEE NOTE 28 49 37 7 – 93
commercial paper
Eurobond 500 898 497 991 2,886
Equity-neutral convertible
– – – – –
bond
Total 549 935 504 991 2,979

226 227
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Gross borrowings as at December 31, 2022 € in millions 17 Other current financial liabilities
Between 1 Between 3 More than
Up to 1 year and 3 years and 5 years 5 years Total Other current financial liabilities consist of the following:
Bank borrowings incl.
29 37 26 – 93
commercial paper Other current financial liabilities € in millions
Eurobond – 998 398 1,487 2,883
Equity-neutral convertible Dec. 31, 2023 Dec. 31, 2022
498 – – – 498
bond Forward exchange contracts 103 146
Total 527 1,035 424 1,487 3,473 Customer with credit balances 94 68
Revaluation of total return swap1 – 46
Embedded derivatives 1 0
The eurobond issued in October 2014 with a term of twelve years and a volume of € 400 million has a Sundry 67 164
coupon of 2.25% and matures in October 2026. The eurobond was issued with a denomination of € 1,000. Other current financial liabilities 266 424
The bond was issued with a spread of 100 basis points over the corresponding average euro swap rate,
1 Since the financial year 2023, the change in the fair value of the total return swap is presented together with the original investment as one unit of account
with the issue price being 99.357%. within other current financial assets respectively long-term financial assets. The change in the fair value of the total return swap is shown in the Note 'Financial
instruments'.

In 2020, adidas issued three rated eurobonds with a size of € 500 million and denominations of € 100,000
The line item ‘Sundry’ mainly relates to payables due to customs authorities.
each. The four-year eurobond maturing in September 2024, with a coupon of 0.00% and the 15-year
eurobond maturing in September 2035, with a coupon of 0.625% were issued in September 2020. These
Further information about forward exchange contracts is contained in these Notes. ► SEE NOTE 28
bonds were priced with a spread of 33 basis points and 63 basis points, respectively, above the
corresponding euro mid-swap rate. The issue price was fixed at 100.321% and 99.360%, respectively. In
adidas’ inaugural sustainability bond placement in September 2020, an eight-year eurobond was issued
with a coupon of 0.00% maturing in October 2028. The sustainability bond was priced with a spread of 40
18 Other provisions
basis points above the corresponding euro mid-swap rate. The issue price was fixed at 99.410%. Proceeds
from the issuance were used in accordance with adidas’ sustainability bond framework. Eligible Other provisions consist of the following:
sustainable projects include investments into sustainable materials and processes, as well as projects
with a positive impact on the community. More specifically, this includes the sourcing of recycled
Other provisions € in millions
materials for sustainably manufactured products, investments into renewable energy production and Change in Currency Thereof
Jan. 1, discounted translation Dec. 31, non-
energy-efficient buildings,and various initiatives aimed at creating lasting change in underrepresented 2023 Additions amount Usage Reversals differences 2023 current
communities. Marketing 26 9 – (14) (1) 10 29 0
Personnel 222 133 (6) (105) (20) (11) 214 73
In November 2022 adidas AG issued two eurobonds with a size of € 500 million each. The three-year Returns and warranty 815 563 2 (656) (29) (49) 646 –
eurobond maturing in November 2025 bears a coupon of 3.00% and was issued at 99.901% issue price. The Taxes, other than income taxes 71 18 (3) (20) (10) (4) 53 –
Customs 267 57 (10) (31) (26) (5) 253 70
seven-year eurobond maturing in November 2029 bears a coupon of 3.125% and was issued at 99.272%
Sundry 275 136 – (73) (15) (7) 317 44
issue price. These bonds were priced with a spread of 20 and 45 basis points, respectively, above the
Other provisions 1,677 916 (16) (899) (101) (67) 1,511 188
corresponding euro mid-swap rate.

In September 2018, adidas AG issued a € 500 million equity-neutral convertible bond with a coupon of
Marketing provisions mainly consist of provisions for promotion contracts, which are comprised of
0.05% which was redeemed on September 12, 2023.
obligations to clubs and athletes.
Further details on future cash outflows are provided in these Notes. ► SEE NOTE 28
Provisions for personnel mainly consist of provisions for short- and long-term variable compensation
components as well as of provisions for social plans relating to restructuring measures.

Provisions for returns and warranty primarily arise due to the obligation of fulfilling customer claims with
regard to the return of products sold by adidas. The amount of the provision follows the historical
development of returns and warranty as well as current agreements.

Provisions for taxes other than income taxes mainly relate to value added tax, real estate tax, and motor
vehicle tax.

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Sundry provisions mainly include provisions for onerous contracts as well as for dismantling and 20 Accrued liabilities
restoration costs.
Accrued liabilities consist of the following:
Non-current provisions mainly consist of provisions for long-term variable compensation components with
a time frame of three to four years, discounted with country-specific interest rates. Accrued liabilities € in millions
Management follows past experience from similar transactions when assessing the recognition and the Thereof: Thereof:
measurement of provisions; in particular, external legal opinions are considered for provisions for Dec. 31, 2023 non-current Dec. 31, 2022 non-current
customs risks and for litigation and other legal risks. All evidence from events until the preparation of the Goods and services not yet invoiced 835 – 994 4
consolidated financial statements is taken into account. Marketing and sales 969 – 1,124 3
Personnel 439 – 258 0
Sundry 30 – 42 –
19 Lease liabilities Accrued liabilities 2,273 – 2,419 7

Lease liabilities consist of the following:

Accrued liabilities for marketing and sales mainly consist of accruals for distribution, such as discounts,
Lease liabilities € in millions rebates, and sales commissions.

Dec. 31, 2023 Dec. 31, 2022 Accrued liabilities for personnel mainly consist of accruals for outstanding salary payments, such as
Land and buildings 2,528 2,918 bonuses and overtime, as well as outstanding vacation.
Technical equipment and machinery 17 33
Other equipment, furniture and fixtures 38 35 Sundry accrued liabilities include accruals for interest.
Lease liabilities 2,584 2,986

21 Other current liabilities

The contractual payments for lease liabilities held by adidas as at December 31, 2023, in an amount of
€ 3.0 billion (2022: € 3.4 billion), mature as follows: Other current liabilities consist of the following:

Contractual payments for lease liabilities € in millions Other current liabilities € in millions
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
Within 1 year 652 715 Tax liabilities other than income taxes 247 248
Between 1 and 5 years 1,571 1,760 Liabilities due to personnel 37 52
After 5 years 765 901 Liabilities due to social security 28 33
Total 2,988 3,376 Deferred income 108 77
Contract liabilities 1 3
Donation pledge 20 –
Interest recognized on lease liabilities in 2023 amounted to € 86 million (2022: € 83 million). Sundry 47 39
Other current liabilities 488 452
Expenses from leases classified as short-term, low-value, or variable are excluded from the
measurement of the lease liability. Further information on total expenses relating to short-term, low-
value, and variable leases is provided in these Notes. ► SEE NOTE 31 In 2023, the line item ‘Sundry’ mainly relates to marketing expenses.

In 2023, the total cash outflows for leases, including the above-mentioned leases not included in the
calculation of the lease liability, amounted to € 831 million (2022: € 846 million).

230 231
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

22 Other non-current financial liabilities (‘Betriebsrentengesetz’) and under general German labor legislation. Active existing employees and new
entrants are entitled to benefits in accordance with the general company agreement ‘Core Benefits: adidas
company pension plan.’ This is a pension plan with a basic employer contribution, possible salary
Other non-current financial liabilities consist of the following:
sacrifices, and additional matching contribution. Thus, the contributions to this pension plan are partly
Other non-current financial liabilities € in millions paid by the employee and partly paid by the employer. The contributions are transferred into benefit
components. The benefits are paid out in the form of a pension, a lump sum, or installments. The pension
Dec. 31, 2023 Dec. 31, 2022 plans in Germany are financed using book reserves, a contractual trust arrangement (CTA) and, for certain
Forward exchange contracts 6 6 former members of the Executive Board of adidas AG, a pension fund (‘Pensionsfonds’) in combination
Currency options – 1 with a reinsured provident fund (‘Unterstützungskasse’).
Revaluation of total return swap1 – 37
Other non-current financial liabilities 6 44
The final salary defined benefit pension scheme in the UK is closed to new entrants and to future accrual.
The benefits are mainly paid out in the form of pensions. The scheme operates under UK trust law as well
1 Since the financial year 2023, the change in the fair value of the total return swap is presented together with the original investment as one unit of account
within other current financial assets respectively long-term financial assets. The change in the fair value of the total return swap is shown in the Note 'Financial as under the jurisdiction of the UK Pensions Regulator and therefore is subject to a minimum funding
instruments'. requirement. The Trustee Board is responsible for setting the scheme’s funding objective, agreeing the
contributions with the company, and determining the investment strategy of the scheme.
Further information about forward exchange contracts is provided in these Notes. ► SEE NOTE 28
The legal framework for employer-provided benefits to cover healthcare costs for retirees in the United
States is primarily governed by the Employee Retirement Income Security Act (ERISA) and the Internal
23 Pensions and similar obligations Revenue Code (IRC). These laws establish the rules and regulations that employers must follow when
providing these benefits to their employees. The fully unfunded medical plan is open to new participants
adidas has recognized post-employment benefit obligations arising from defined benefit plans. The who have, at the end of their employment, completed at least 10 years of service, are at least 55 years of
benefits are provided pursuant to the legal, fiscal, and economic conditions in each respective country and age, and are entitled to subsidized medical care. The plan provides medical, pharmaceutical, dental and
mainly depend on the employees’ years of service and remuneration. ophthalmologic services from retirement until maximum the age of 65 (or without age limit until death for
a closed group of retirees). At age 65 they are expected to receive state medical benefits from US
Pensions and similar obligations € in millions Medicare.

Dec. 31, 2023 Dec. 31, 2022

Breakdown of the present value of the significant obligations arising from defined benefit pension € in
Liability arising from defined benefit pension plans 136 114 millions
Similar obligations 0 1
Pensions and similar obligations 136 115 Dec. 31, 2023 Dec. 31, 2022
Germany UK USA Germany UK USA
Active members 217 – 21 200 – 21
The liability arising from defined benefit pension plans consists on the one hand of assets from defined Former employees with vested
163 32 – 131 31 –
benefit pension plans in an amount of € 3 million (2022: € 4 million), and on the other hand of provisions rights
for pensions and similar obligations in an amount of € 139 million (2022: € 118 million). Pensioners 99 5 10 91 6 10
Total 478 37 31 422 37 31
Defined contribution pension plans
The total expense for defined contribution pension plans amounted to € 82 million in 2023
(2022: € 91 million). The Group’s pension plans are subject to risks from changes in actuarial assumptions, such as the
discount rate, salary, and pension increase rates, and risks from changes in mortality. A lower discount
Defined benefit pension plans rate results in a higher defined benefit obligation and/or in higher contributions to the pension funds.
Given the company’s diverse subsidiary structure, different defined benefit pension plans exist, comprising Lower than expected performance of the plan assets could lead to an increase in required contributions or
a variety of post-employment benefit arrangements. The company’s major defined benefit pension plans to a decline of the funded status.
relate to adidas AG and its subsidiary in the UK. The defined benefit pension plans generally provide
payments in case of death, disability, or retirement to former employees and their survivors. The The following tables analyze the defined benefit plans, plan assets, present values of the defined benefit
obligations arising from defined benefit pension plans are partly covered by plan assets. In addition, there pension plans, expenses recognized in the consolidated income statement, actuarial assumptions, and
are significant obligations from a plan to cover the medical costs of pensioners in the USA. further information.

In Germany, adidas AG grants its employees contribution-based and final-salary-defined benefit pension
schemes, which provide employees with entitlements in the event of retirement, disability, and death.
German pension plans operate under the legal framework of the German Company Pensions Act

232 233
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Amounts for defined benefit pension plans recognized in the consolidated statement of financial position € in Remeasurements, such as gains or losses arising from changes in the actuarial assumptions for defined
millions benefit pension plans or a return on the plan assets exceeding the interest income, are immediately
recognized outside the income statement as a change in other reserves in the consolidated statement of
Dec. 31, 2023 Dec. 31, 2022 comprehensive income.
Present value of funded obligation from defined benefit pension plans 568 507
Fair value of plan assets (492) (453) Pension expenses for defined benefit pension plans € in millions
Funded status 76 54
Year ending Year ending
Present value of unfunded obligation from defined benefit pension plans 57 55
Dec. 31, 2023 Dec. 31, 2022
Effect of asset ceiling in accordance with IAS 19.64 3 4
Current service cost 34 41
Net defined benefit liability 136 114
Net interest expense 5 4
Thereof: liability 139 118
Thereof: interest cost 24 12
Thereof: adidas AG 72 55
Thereof: interest income (19) (8)
Thereof: asset (3) (4)
Past service (credit) (2) (1)
Thereof: adidas AG – –
Loss on plan settlements – 0
Expenses for defined benefit pension plans (recognized in the consolidated
37 44
income statement)
The determination of assets and liabilities for defined benefit plans is based on actuarial valuations. In Actuarial losses/(gains) on liability 29 (243)
particular, the present value of the defined benefit obligation is driven by financial variables (such as the Thereof: due to changes in financial assumptions 37 (260)
discount rates or future increases in salaries) and demographic variables (such as mortality and employee Thereof: due to changes in demographic assumptions (1) 0
turnover). The actuarial assumptions may differ significantly from the actual circumstances and could lead Thereof: due to experience adjustments (7) 17
to different cash flows. (Return)/loss on plan assets (not included in net interest income) (20) 64
Change in asset ceiling (excluding interest cost) (2) 4
Weighted average actuarial assumptions in % Remeasurements for defined benefit pension plans (recognized as
decrease/(increase) in other reserves in the consolidated statement of 7 (175)
Dec. 31, 2023 Dec. 31, 2022 comprehensive income)
Discount rate 3.9 4.4 Total 45 (131)
Expected rate of salary increases 4.2 4.0
Expected pension increases 2.1 2.1
Of the total pension expenses recorded in the consolidated income statement, an amount of € 21 million
(2022: € 29 million) relates to employees of adidas AG and € 4 million (2022: € 5 million) relates to
Breakdown of the acturial assumptions in % employees in the US. The pension expense is mainly recorded within other operating expenses. The
production-related part of the pension expenses is recognized within cost of sales.
Dec. 31, 2023 Dec. 31, 2022
Germany UK USA Germany UK USA
Discount rate 3.6 4.8 4.9 4.2 5.0 5.1
Expected rate of salary increases – – – – – –
Expected pension increases 2.2 2.2 – 2.2 2.2 –

The weighted average actuarial assumptions as at the balance sheet date are used to determine the
defined benefit liability at that date and the pension expense for the upcoming financial year.

The actuarial assumptions for withdrawal and mortality rates are based on statistical information available
in the various countries. In Germany, the Heubeck 2018 G mortality tables are used. In the UK,
assumptions are based on the S3 base table, and in the US they are based on the Pri-2012 base table. The
mortality tables in the UK and in the US were modified to account for future changes in life expectancy.

As in the previous year, the calculation of the pension liabilities in Germany, the UK, and the US is based
on discount rates determined using the ‘Mercer Yield Curve (MYC)’ approach.

234 235
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Present value of the defined benefit obligation € in millions Fair value of plan assets € in millions

2023 2022 2023 2022

Present value of the obligation from defined benefit pension plans Fair value of plan assets as at January 1 453 503
562 768
as at January 1
Currency translation differences 1 (2)
Currency translation differences (0) 4 Pensions paid (9) (4)
Current service cost 34 41 Contributions by the employer 8 11
Interest cost 24 12 Contributions paid by plan participants 2 1
Contribution by plan participants 2 1 Interest income from plan assets 19 8
Pensions paid (23) (17) Return/(loss) on plan assets (not included in net interest income) 20 (64)
Payments for plan settlements – (1)
Fair value of plan assets as at December 31 492 453
Actuarial losses/(gains) 29 (243)
Thereof: due to changes in financial assumptions 37 (260)
Thereof: due to changes in demographic assumptions (1) –
The majority of plan assets are attributable to Germany (2023: 83%, 2022: 82%) and the UK (2023: 7%,
Thereof: due to experience adjustments (7) 17
2022: 8%).
Past service (credit) (2) (1)
Business combinations/transfers/divestitures – (2) Part of the plan assets in Germany is held by a trustee under a Contractual Trust Arrangement (CTA) for
Present value of the obligation from defined benefit pension plans the purpose of funding the pension obligations of adidas AG and insolvency insurance with regard to part of
625 562
as at December 31
the pension obligations of adidas AG. The trustee is the registered association adidas Pension Trust e.V.
The investment committee of the adidas Pension Trust determines the investment strategy with the goal to
match the pension liabilities as far as possible and to generate a sustainable return. In 2023, no additional
Of the total actuarial losses recognized in equity, an amount of € 6 million (2022: gain of € 164 million)
employer funding contribution was transferred to the trustee. The plan assets in the registered
relates to pension schemes at adidas AG, less than € 1 million as a gain (2022: loss of € 2 million) to the
association are mainly invested in fixed income funds, equity funds and real estate. Another substantial
UK and a gain of € 1 million (2022: € 7 million) to the US.
part of the plan assets in Germany is invested in insurance contracts via a pension fund and a provident
fund. For this portion, an insurance entity is responsible for the determination and the implementation of
In the following table, the effects of reasonably conceivable changes in the actuarial assumptions on the
the investment strategy.
present value of the obligation from defined benefit pension plans are analyzed for Germany, the UK, and
the US. In addition, the average duration of the obligation is shown.
In the UK, the plan assets are held in an external trust. In principle the investment strategy is aligned with
the structure of the pension obligations in these countries. In the rest of the world, the plan assets consist
Sensitivity analysis of the obligation from defined benefit pension plans € in millions
predominantly of insurance contracts.

Dec. 31, 2023 Dec. 31, 2022

The expected total employer contributions for the 2024 financial year amount to € 31 million. Thereof,
Germany UK USA Germany UK USA
€ 25 million relates to benefits directly paid to pensioners by the subsidiaries and € 6 million to employer
Present value of the obligation from
478 37 31 422 37 31 contributions paid into the plan assets. In 2023, the actual return on plan assets (including interest
defined benefit pension plans
income) was € 39 million (2022: loss of € 56 million).
Increase in the discount rate by
448 34 30 396 34 30
0.5%
Reduction in the discount rate by Composition of plan assets € in millions
512 41 32 450 40 32
0.5%
Average duration of the obligations Dec. 31, 2023 Dec. 31, 2022
14 18 8 13 17 7
(in years) Cash and cash equivalents 31 26
Equity instruments 128 110
Bonds 136 129
Since many pension plans are closed to future accrual, the salary trend plays a minor role in determining Real estate 99 94
pension obligations. Due to the fact that with the introduction of the Core Benefits arrangement, German Pension plan reinsurance 46 46
pension plans are mainly paid as lump sums, the pension increase rate and the mortality assumption have Investment funds 35 35
significantly less impact than the discount rate when calculating the pension obligations. Other assets 18 14
Fair value of plan assets 492 453

All equities and bonds are traded freely and have a quoted market price in an active market.

236 237
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

At each balance sheet date, the company analyzes the over- or underfunding and, where appropriate, Based on the authorization granted by resolution of the Annual General Meeting of May 12, 2021, until
adjusts the composition of plan assets. August 6, 2026,

As of December 31, 2023, the plan assets eligible for offsetting are required to be reduced by € 3 million ─ by issuing new shares against contributions in kind and/or cash once or several times by no more than
(2022: € 4 million) due to the application of IAS 19.64. The reduction of € 1 million will be recognized € 20,000,000 altogether (Authorized Capital 2021/II), and, subject to Supervisory Board approval, to
mainly as an increase in other reserves in the consolidated statement of comprehensive income. exclude residual amounts from shareholders’ subscription rights, to wholly or partly exclude
shareholders’ subscription rights when issuing shares against contributions in kind and to exclude
shareholders’ subscription rights when issuing shares against contributions in cash if the new shares
24 Other non-current liabilities against contributions in cash are issued at a price not significantly below the stock market price of the
company’s shares already quoted on the stock exchange at the point in time when the issue price is
Other non-current liabilities consist of the following: ultimately determined, which should be as close as possible to the placement of the shares; this
exclusion of subscription rights can also be associated with the listing of the company’s shares on a
Other non-current liabilities € in millions foreign stock exchange.

Dec. 31, 2023 Dec. 31, 2022 The authorization to exclude subscription rights under this authorization, however, may only be used to
Deferred income 4 6 the extent that the pro-rata amount of the new shares in the nominal capital together with the pro-rata
Liabilities due to personnel 0 – amount in the nominal capital of other shares that have been issued by the company since
Donation pledge 95 – May 12, 2021, subject to the exclusion of subscription rights, on the basis of an authorized capital or
Sundry 4 0 following a repurchase or for which subscription or conversion rights or subscription or conversion
Other non-current liabilities 103 6 obligations have been granted through the issuance of convertible bonds and/or bonds with warrants
while excluding subscription rights, does not exceed 10% of the nominal capital existing on the date of
the entry of this authorization with the commercial register or – if this amount is lower – on the
respective date on which the resolution on the utilization of the authorization is adopted. The previous
25 Shareholders’ equity sentence does not apply to the exclusion of subscription rights for residual amounts. The Authorized
Capital 2021/II must not be used to issue shares within the scope of compensation or participation
programs for Executive Board members or employees or for members of the management bodies or
As at December 31, 2023, the nominal capital of adidas AG amounted to € 180,000,000 divided into
employees of affiliated companies.
180,000,000 registered no-par-value shares and was fully paid in.

Each share grants one vote and is entitled to dividends starting from the commencement of the year in Contingent capital 2022
which it was issued. Treasury shares held directly or indirectly are not entitled to dividend payment in The following overview of the contingent capital is based on § 4 section 4 of the Articles of Association of
accordance with § 71b German Stock Corporation Act (Aktiengesetz – AktG). As at the balance sheet date, adidas AG as well as on the underlying resolution of the Annual General Meeting held on May 12, 2022.
adidas AG held 1,450,916 treasury shares, corresponding to a notional amount of € 1,450,916 in the
nominal capital and consequently to 0.81% of the nominal capital. The nominal capital is conditionally increased by up to € 12.5 million divided into not more than 12,500,000
no-par-value shares (Contingent Capital 2022). The contingent capital increase serves the issuance of
no-par-value shares when exercising option or conversion rights or fulfilling the respective option and/or
Authorized capital 2021/I and 2021/II
conversion obligations or when exercising the company’s right to choose to partially or in total deliver
The Executive Board of adidas AG did not utilize the existing amount of authorized capital of up to
registered no-par-value shares of the company instead of paying the due amount to the holders or
€ 70 million in the reporting period.
creditors of bonds issued by the company or a subordinated group company up to May 11, 2027, on the
The authorized capital of adidas AG, which is set out in § 4 sections 2 and 3 of the Articles of Association as basis of the authorization resolution adopted by the Annual General Meeting on May 12, 2022. The new
shares will be issued at the respective option or conversion price to be established in accordance with the
at the balance sheet date, entitles the Executive Board, subject to Supervisory Board approval, to increase
aforementioned authorization resolution. The contingent capital increase will be implemented only if
the nominal capital based on the following authorizations:
bonds are issued in accordance with the authorization resolution adopted by the Annual General Meeting
Based on the authorization granted by resolution of the Annual General Meeting of May 12, 2021, until on May 12, 2022, (Agenda Item 7) and only to the extent that option or conversion rights are exercised or
August 6, 2026, the holders or creditors of bonds obligated to exercise the option or conversion obligation fulfill their
obligations to exercise the warrant or convert the bond, or to the extent that the company exercises its
─ by issuing new shares against contributions in cash once or several times by no more than rights to choose to deliver no-par-value shares in the company for the total amount or a partial amount
€ 50,000,000 altogether and, subject to Supervisory Board approval, to exclude residual amounts from instead of payment of the amount due and insofar as no cash settlement, treasury shares or shares of
shareholders’ subscription rights (Authorized Capital 2021/I); another public-listed company are used to service these rights. The new shares carry dividend rights from
the commencement of the financial year in which the shares are issued. In the event that, at the time of
issuance of the new shares, no resolution on the appropriation of retained earnings for the financial year
directly preceding the year in which the shares are issued has been passed, the Executive Board is

238 239
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

authorized, to the extent legally permissible, to determine that the new shares will carry dividend rights Changes in the percentage of voting rights
from the commencement of the financial year directly preceding the year in which the shares are issued. Pursuant to § 160 section 1 no. 8 AktG, information must be provided on the existence of shareholdings
Furthermore, the Executive Board is authorized to stipulate additional details concerning the that have been notified to adidas AG in accordance with § 33 section 1 or section 2 German Securities
implementation of the contingent capital increase. Trading Act (Wertpapierhandelsgesetz – WpHG).

The Executive Board is authorized, subject to Supervisory Board approval, to exclude shareholders’ The table ‘Notified reportable shareholdings’ reflects reportable shareholdings in adidas AG as at the
subscription rights to the bonds insofar as this is necessary for residual amounts and also insofar as and balance sheet date that have each been notified to adidas AG. In each case, the details relate to the most
to the extent that this is necessary for granting subscription rights to holders or creditors of bonds already recent voting rights notification received by adidas AG from the parties obligated to notify. All voting rights
issued before, which they would be entitled to as shareholders upon exercising their option or conversion notifications disclosed by adidas AG in the year under review are available on the corporate website.
rights or upon fulfilling their option and/or conversion obligations or upon exercising a right to delivery of ► ADIDAS-GROUP.COM/VOTING_RIGHTS_NOTIFICATIONS
shares referring to shares of the company. Finally, the Executive Board is authorized, subject to
Supervisory Board approval, to also exclude shareholders’ subscription rights insofar as the bonds are Notified reportable shareholdings
issued against contributions in cash and after the Executive Board has concluded, following an
Total of voting rights
examination in accordance with its legal duties, that the issue price of the bonds is not significantly below Date of reaching, Notification obligations and Voting rights attached to shares
exceeding or Reporting attributions in accordance attached to Instruments and instruments
the hypothetical market value computed using recognized, in particular, financial calculation methods and Notifying party falling below threshold with WpHG shares (in %) (in %) (in %)
the number of shares issued does not exceed 10% of the nominal capital, neither at the point of becoming The Goldman Sachs Group,
December 12, 2023 5% §§ 34, 38 par. 1 no. 1, 2 0.18 4.77 4.95
effective nor – in case this amount is lower – at the point of exercising the aforementioned authorization. Inc., Wilmington, DE, USA
BlackRock, Inc., New York, §§ 34, 38 par. 1 no. 1,
Shares which are issued or sold in accordance with § 186 section 3 sentence 4 AktG during the term of this New York, USA1
October 11, 2023 5%
2
5.33 0.29 5.62
authorization until its utilization shall be attributed to the aforementioned limit of 10%. Furthermore, Ministry of Finance on
§§ 34, 38 par. 1 no. 1,
shares that are to be issued or granted during the term of this authorization on the basis of a bond issued behalf of the State of October 10, 2023 3% 3.02 0.21 3.23
2
Norway, Oslo, Norway
with the exclusion of subscription rights in accordance with this provision utilizing another authorization Ségolène Gallienne-Frère1 August 9, 2023 5% § 34 7.62 – 7.62
shall be attributed to the aforementioned limit of 10%. The total number of shares that are issued under Gérald Frère1 March 15, 2023 5% §§ 34, 38 par. 1 no. 1 7.62 0.24 7.86
bonds based on this authorization with the exclusion of subscription rights and shares that are issued from The Capital Group
Companies, March 2, 2023 5% § 34 5.03 – 5.03
an authorized capital with the exclusion of subscription rights during the term of the authorization may not Inc., Los Angeles, USA
exceed 10% of the nominal capital on the date of the entry of this authorization with the Commercial Flossbach von Storch AG,
February 10, 2023 3% §§ 34, 38 par. 1 no. 2 3.57 0.05 3.61
Register. Cologne, Germany
Elian Corporate Trustee
(Cayman) Limited, Camana
September 16, 2022 5% §§ 34, 38 par. 1 no. 2 3.12 3.33 6.46
In the period up until the balance sheet date, the Executive Board of adidas AG did not issue any bonds Bay, Grand Cayman,
Cayman Islands1
based on the authorization granted on May 12, 2022, and consequently did not issue any shares from the
The Desmarais Family
Contingent Capital 2022. Residuary Trust, Montreal, November 30, 2020 5% § 34 6.89 – 6.89
Canada1

Repurchase and use of treasury shares 1 Voluntary group notification due to threshold crossing on the subsidiary level.

The Annual General Meeting on May 11, 2023, granted the Executive Board an authorization to repurchase
The details on the percentage of shareholdings and voting rights may no longer be up to date.
adidas AG shares up to an amount totaling 10% of the nominal capital until May 10, 2028. The authorization
may be used by adidas AG but also by its subordinated Group companies or by third parties on account of
adidas AG or its subordinated Group companies or third parties assigned by adidas AG or one of its Capital management
subordinated Group companies. The Executive Board of adidas AG did not make use of this authorization in The company’s policy is to maintain a strong capital base so as to uphold investor, creditor, and market
the reporting period. confidence and to sustain future development of the business.

In the 2023 financial year, adidas AG transferred 11,886 treasury shares to the Chief Executive Officer adidas seeks to maintain a balance between a higher return on equity that might be possible with higher
Bjørn Gulden as reimbursement for the variable compensation forfeited at his former employer. Based on levels of borrowings and the advantages and security afforded by a sound capital position. The company
the share price at the time, the 11,886 treasury shares transferred had a value of € 2,040,826 further aims to maintain adjusted net borrowings below two times EBITDA (Earnings before interests,
corresponding to a notional amount of € 11,886 in the nominal capital and consequently to approx. 0.01% taxes, depreciation and amortization and impairment losses and reversals) over the long term. adidas
of the nominal capital. received strong first-time investment-grade ratings by both Standard Poor’s and Moody’s in August
2020. Standard Poor’s gave adidas an ‘A+’ rating, and Moody’s granted the company an ‘A2’ rating. The
Therefore, taking into account the 1,462,802 shares held by adidas AG as at December 31, 2022, and the initial outlook for both ratings was ‘stable’ as both rating agencies recognized the company’s strong credit
11,886 shares transferred to the Chief Executive Officer, this results in 1,450,916 treasury shares held as metrics, robust liquidity profile, and conservative financial policies. In November 2022, both Standard &
at the balance sheet date. ►SEE DISCLOSURES PURSUANT TO § 315A AND § 289A OF THE GERMAN COMMERCIAL CODE AND EXPLA NATORY Poor’s and Moody’s revised their outlook for adidas to ‘negative’ due to a deterioration in credit metrics
REPORT amid pressure on the company’s operating performance from economic as well as company specific
challenges. In February 2023, Standard Poor’s lowered its rating on adidas to ‘A-‘, while Moody’s
downgraded the company to ‘A3’, both with a ‘negative’ outlook. These downgrades reflected a further

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

downward revision of credit metrics following the release of the company’s financial guidance for 2023. In Reserves
December 2023 and January 2024 Standard Poor’s and Moody’s issued reports affirming ‘A-‘ rating with Reserves within shareholders’ equity are as follows:
‘negative’ outlook and ‘A3’ rating with ‘negative’ outlook respectively. Overall, adidas' investment grade
credit ratings continue to ensure an efficient access to capital markets. ─ Capital reserve: primarily comprises the paid premium for the issuance of share capital as well as
expenses recognized for share-based payment for Executive Board members and third parties.
Financial leverage amounts to 98.6% (2022: 121.2%) and is defined as the ratio between adjusted net
borrowings in an amount of € 4.518 billion (2022: € 6.047 billion) and shareholders’ equity in an amount of ─ Cumulative currency translation differences: comprises all foreign currency differences arising from
€ 4.580 billion (2022: € 4.991 billion). EBITDA amounted to € 1.358 billion for the financial year ending the translation of the financial statements of foreign operations.
December 31, 2023 (2022: € 1.874 billion). The ratio between adjusted net borrowings and EBITDA
amounted to 3.3 for the 2023 financial year (2022: 3.2). ─ Hedging reserve: comprises the effective portion of the cumulative net change in the fair value of cash
flow hedges (intrinsic value for options and spot component for forward contracts) related to hedged
Composition of EBITDA € in millions transactions that have not yet occurred, hedges of net investments in foreign subsidiaries, and the
effective portion of the cumulative net change in the fair value of the total return swap.
2023 2022

Income before taxes 65 388 ─ Cost of hedging reserve – options: comprises the effective portion of the cumulative net change in the
fair value of cash flow hedges reflecting cost of hedging of options (time value and premium).
Adjustments for:
Depreciation, amortization, and impairment losses 1,212 1,375 ─ Cost of hedging reserve – forward contracts: comprises the effective portion of the cumulative net
Reversals of impairment losses (42) (4) change in the fair value of cash flow hedges reflecting cost of hedging of forward contracts (forward
Interest income (39) (23) component).
Interest expense 162 138
EBITDA as at December 31 1,358 1,874 ─ Other reserves: comprises the remeasurements of defined benefit plans consisting of the cumulative
net change of actuarial gains or losses relating to the defined benefit obligations, the return on plan
assets (excluding interest income) and the asset ceiling effect, the remeasurement of the fair value of
In 2020, the definition of the net borrowings was adjusted to the criteria of the company’s internal financial the equity investments measured at fair value through other comprehensive income, expenses
guidelines and is therefore reported as adjusted net borrowings. It mainly complements the net recognized for share option plans, and effects from the acquisition of non-controlling interests, as well
borrowings reported up to that point by the present value of future payment obligations from leasing and as reserves required by law.
pension commitments. The method of calculating adjusted net borrowings was revised in 2022 to align it
with general market practice and the approach of the rating agencies. ─ Retained earnings: comprises both amounts that are required by the Articles of Association and
voluntary amounts that have been set aside by adidas. The reserve includes the unappropriated
The composition of the adjusted net borrowings is presented below: accumulated profits less dividends paid, and consideration paid for the repurchase of adidas AG shares
exceeding the nominal value. In addition, the item includes the effects of the employee stock purchase
Composition of adjusted net borrowings € in millions plan and the transition effects of the implementation of new IFRSs.

Dec. 31, 2023 Dec. 31, 2022 The capital reserve includes restricted capital in an amount of € 4 million (2022: € 4 million). Furthermore,
Short-term borrowings 549 527 other reserves include additional restricted capital in an amount of € 136 million (2022: € 98 million).
Long-term borrowings 2,430 2,946
Current lease liability 545 643 Distributable profits and dividends
Non-current lease liability 2,039 2,343 Profits distributable to shareholders are determined by reference to the retained earnings of adidas AG
Pensions and similar obligations 139 118 and calculated under German commercial law.
Factoring 70 112
Subtotal 5,772 6,689 Based on the resolution of the 2023 Annual General Meeting, the dividend for 2022 was € 0.70 per share
(total amount: approx. € 125 million).
Cash and cash equivalents 1,431 798
Short-term financial assets 34 – The Executive Board of adidas AG will propose to use retained earnings of adidas AG in an amount of
Less trapped cash 211 155 € 411 million as reported in the 2023 financial statements of adidas AG for a dividend payment of € 0.70
Less accessible cash and cash equivalents 1,254 643 per share and to carry forward the subsequent remaining amount.

As at February 20, 2024, 178,549,084 dividend-entitled shares exist. This would result in a dividend
Adjusted net borrowings 4,518 6,047
payment of € 125 million.

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

26 Share-based payment Further information about the purchase of shares for the employee stock purchase plan is provided in
these Notes. ► SEE NOTE 25

Equity-settled share-based payment transactions with employees

In 2016, adidas announced the introduction of an open-ended employee stock purchase plan (the ‘plan’).
Equity-settled share-based payment transactions with third parties
In 2023, adidas entered into a promotion and advertising contract that includes a share-based payment
The plan is operated on a quarterly basis, with each calendar quarter referred to as an ‘investment
transaction with third parties. The contract has a term of up to five years. The agreement grants a transfer
quarter.’
of shares, which correspond up to a value of US $ 26 million. In 2023, no transfer of shares took place.
The plan enables employees to purchase adidas AG shares with a 15% discount (‘investment shares’) and
The expenses for shares are recognized over the vesting period of five years. In 2023, this amounts to a
to benefit from free matching shares. Currently, eligible employees of adidas AG and 17 other subsidiaries
provision of € 7 million.
can participate in the plan. Up to two weeks before the start of an investment quarter, each eligible
employee can enroll for the plan. The company accepts enrollment requests on the first day of the relevant
investment quarter. This is the grant date for the investment and matching shares. The fair value at the Equity-settled share-based payment for Executive Board members
vesting date is equivalent to the fair value of the granted equity instruments at this date. The employees In 2018, adidas established a ‘Long-Term Incentive Plan’ (‘LTIP’) for Executive Board members.
invest an amount up to 10% of their gross base salary per quarter in the plan. A few days after the end of
the investment quarter, the shares are purchased on the market at fair market value and transferred to The LTIP 2021/2025 pursues the goal of aligning the long-term performance-based variable remuneration
the employees. Thereby the amount invested during the quarter plus the top-up from adidas is used. of the Executive Board with the performance of the company and thus with the interests of the
These shares can be sold at any time by the employee. If the shares are held for a period of one year after shareholders. Against this background, the LTIP 2021/2025 is share-based. It consists of five annual
the last day of an investment quarter, employees will receive, as a one-off, free matching shares (one tranches (2021 to 2025), each with a term of five years. Each of the five annual tranches consists of a
matching share for every six adidas AG shares acquired). This plan currently constitutes an equity-settled performance year and a subsequent four-year holding period. For the 2021/2025 LTIP, the Supervisory
share-based payment for both elements. For the component of the matching shares relating to the Board has set financial and ESG-related performance criteria for each of the five performance years.
specific period of service an appropriate discount is taken into account. The effects are presented in the
The annual LTIP tranche (‘Grant Amount’) is paid to the Executive Board members after approval of the
following table:
consolidated financial statements and is to be fully invested by the Executive Board members in the
Equity-settled share-based payment transactions with employees acquisition of adidas AG shares. The shares acquired are subject to a holding period, which ends at the end
of the fourth financial year following the performance year. Only after the end of the holding period can the
As at Executive Board members dispose of the shares.
Dec. 31,
2022 As at December 31, 2023
21st 21st 22nd 23rd 24th 25th As of December 31, 2023, the total number of adidas AG shares acquired since 2019 as part of the variable
investment investment investment investment investment investment
quarter quarter quarter quarter quarter quarter performance-based compensation and subject to a holding period amounts to 57,247 no-par-value shares
Oct. 3, Oct. 3, Jan. 2, Apr. 3, Jul. 3, Oct. 2, (2022: 78,698 no-par-value shares acquired since 2018). The number of adidas AG shares acquired by the
Grant date
2022 2022 2023 2023 2023 2023
Share price at grant date (in €) 119.00 119.00 127.70 163.04 176,62 164.60 members of the Executive Board is shown below:
Share price at December 31 (in €) 127.46 184.16
Number of granted investment shares based on the share price
48,555 33,696
LTI Bonus: Acquisition of shares in the context of the long-term variable compensation in €
as at December 31
Number of actually purchased investment shares – 44,789 38,150 37,966 40,409 – LTIP tranche 2022 2021 2020 2019
Outstanding granted matching shares based on the share price
7,465 – 6,358 6,328 6,735 5,616 Grant amount – 14,182,500 1,482,105 9,244,573
as at December 31 or actually purchased investment shares
Average remaining vesting period in months as at December 31 Payout amount – 7,449,357 778,475 4,825,271
12 – 3 6 9 12
(in months)
Purchase price – 210.10 270.75 255.00
Number of purchased shares – 35,455 2,872 18,920
End of lock-up period – Dec. 31, 2025 May 31, 2024 May 31, 2023
The number of forfeited matching shares during the period amounted to 4,646 (2022: 3,557).

As at December 31, 2023, the total expenses recognized relating to investment shares amounted to
€ 3.4 million (2022: € 4.3 million). Cash-settled share-based payment transactions with employees
In 2017, adidas implemented a Long-Term Incentive Plan (LTIP), which is a share-based remuneration
Expenses recognized relating to vesting of matching shares amounted to € 3.3 million in 2023 (2022: scheme with cash settlement. ‘RSUs’ (‘Restricted Stock Units’) are granted on the condition that the
€ 3.3 million). beneficiary is employed for three or four years by adidas AG or one of its subsidiaries in a position where
they are not under notice during that period. This minimum period of employment pertains to the calendar
As at December 31, 2023, a total amount of € 5 million (2022: € 5 million) was invested by the participants year in which the RSUs are granted and the three subsequent calendar years. As an exception in 2022 and
in the stock purchase plan and was not yet transferred into shares by the end of December 2023. 2023, RSUs were granted with a minimum term of employment of one and two years, respectively.
Therefore, this amount has been included in ‘Other current financial liabilities.’ ► SEE NOTE 17

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

The total value of the cash remuneration payable to senior management is recalculated on each reporting Cash-settled share-based payment transactions with employees
date and on the settlement date, based on the fair value of the RSUs, and recognized through an
appropriate increase in the provision as personnel expenses that are spread over the period of service of As at December 31, 2022
Plan year 2019 2020 2021 2022
the beneficiary. Furthermore, social security contributions are considered in the calculation of the fair
4-year 3-year 4-year 3-year 4-year 3-year 4-year 3-year 2-year 1-year
value, if appropriate for the respective country regulations and the seniority of the participants. All Tranche
tranche tranche tranche tranche tranche tranche tranche tranche tranche tranche
changes to the subsequent measurement of this provision are reported under personnel expenses. Share price as at
127.46 – 125.77 127.46 121.70 125.77 117.13 121.70 125.77 127.46
December 31 (in €)
Number of granted RSUs
Once a year, one tranche with a three-year term and another with a four-year term are issued. The based on the share price 108,039 – 24,667 102,877 227,521 37,745 102,523 236,945 2,149 2,149
number of RSUs granted depends on the seniority of the beneficiaries. In addition, for the four-year plan, as at December 31 (in €)
Average risk-free interest
the number of RSUs also depends on the achievement of a financial and ESG-related target. In addition, in rate based on the share 1.07% – 1.28% 1.07% 1.55% 1.28% 1.74% 1.55% 1.28% 1.07%
2022 and 2023, the option to issue two additional tranches with a two-year and a one-year maturity was price as at December 31
exercised. Average remaining vesting
period as at December 31 – – 12 – 24 12 36 24 12 –
(in months)
The value of one RSU is the average price of the adidas AG share as quoted for the first 20 stock exchange
trading days in January of the respective financial year. The effects are presented in the following table:
The fair value is based on the closing price of the adidas AG share on December 31, 2023, adjusted for
Cash-settled share-based payment transactions with employees future dividend payments.

As at December 31, 2023

In 2023, this resulted in an expense of € 59 million (2022: € 36 million). The corresponding provision
Plan year 2020 2021
amounted to € 80 million (2022: € 57 million).
4-year 3-year 4-year 3-year
Tranche
tranche tranche tranche tranche
Share price as at December 31 (in €) 184.16 – 183.47 184.16
Number of granted RSUs based on the share price as at December 31 (in €)
Average risk-free interest rate based on the share price as at December 31
20,405
3.61%
–
–
182,438
3.60%
26,257
3.61%
27 Non-controlling interests
Average remaining vesting period as at December 31 (in months) – – 12 –
This line item within equity comprises the non-controlling interests in subsidiaries that are not directly or
indirectly attributable to adidas AG.

Cash-settled share-based payment transactions with employees

Non-controlling interests are assigned to two subsidiaries both as at December 31, 2023, and as at
As at December 31, 2023 December 31, 2022.
Plan year 2022 2023

Tranche
4-year 3-year 2-year 1-year 4-year 3-year 2-year 1-year For the following subsidiaries with non-controlling interests, the main financial information is presented
tranche tranche tranche tranche tranche tranche tranche tranche
combined.
Share price as at December 31 (in €) 182.22 183.47 182.22 183.47 180.61 182.22 183.47 184.16
Number of granted RSUs based on the share price
as at December 31 (in €)
77,407 206,748 2,130 – 304,563 111,577 11,972 9,010 Subsidiaries with non-controlling interests
Average risk-free interest rate based on the share
3.47% 3.60% 3.61% – 3.24% 3.47% 3.60% 3.61%
price as at December 31 Principal
Average remaining vesting period as at
24 12 – – 36 24 12 – place of Ownership interests held by
December 31 (in months) Legal entity name business non-controlling interests
Dec. 31, 2023 Dec. 31, 2022
Agron, Inc. USA 100% 100%
adidas Israel Ltd. Israel 15% 15%

The following table presents the main financial information on subsidiaries with significant non-controlling
interests before elimination.

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Financial information on subsidiaries with non-controlling interests € in millions 28 Financial instruments

Non-controlling interests
Additional information to financial instruments
Dec. 31, 2023 Dec. 31, 2022
Carrying amounts of financial instruments and their fair values including hierarchy according to IFRS 13 € in millions
Thereof: Thereof:
Total Agron, Inc. Total Agron, Inc.
Category December 31, 2023 December 31, 2022
Net sales 669 520 751 556 Carry- Carry-
ing Fair ing Fair
Net income 61 62 32 25 amount value Level 1 Level 2 Level 3 amount value Level 1 Level 2 Level 3

Net income attributable to non-controlling

61 62 26 25 Financial assets
interests
Cash and cash equivalents
Cash and cash equivalents Amortized cost 596 – – – 726 – – –
Other comprehensive income (14) (14) 24 20
Fair value through
Cash equivalents 835 835 – 835 – 72 72 – 72 –
Total comprehensive income 47 48 56 45 profit or loss
Fair value through
Total comprehensive income attributable to Short-term financial assets
profit or loss
34 34 – 34 – – – – – –
48 48 47 45
non-controlling interests
Accounts receivable Amortized cost 1,906 – – – 2,529 – – –
Other current financial assets
Current assets 384 288 398 307 Derivatives used in hedge
n.a. 67 67 – 67 – 168 168 – 168 –
accounting
Non-current assets 140 116 165 124
Derivatives not used in Fair value through
Current liabilities (139) (65) (139) (78) 21 21 – 21 – 65 65 – 65 –
hedge accounting profit or loss
Non-current liabilities (11) – (24) – Other investments n.a. 8 8 – 8 – 78 78 – 78 –
Net assets 373 340 399 353 Other financial assets Amortized cost 658 – – – 703 – – –
Long-term financial assets
Net assets attributable to non-controlling
interests according to the consolidated 345 340 360 353 Fair value through
Other equity investments 91 91 – – 91 89 89 – – 89
profit or loss
statement of financial position
Fair value through
other
Other equity investments 83 83 1 – 82 86 86 2 – 84
comprehensive
Net cash generated from operating activities 64 77 15 (11)
income
Net cash used in investing activities (0) (10) (30) (20) Fair value through
Other investments 44 44 – 44 – 42 42 – 42 –
Net cash used in financing activities (27) (33) (41) (21) profit or loss
Other investments n.a. 83 83 – 83 – 83 83 – 83 –
Net increase of cash and cash equivalents 37 34 (56) (52)
Loans Amortized cost – – – – 0 – – –
Dividends paid to non-controlling interests Other non-current financial
33 33 22 22
during the year1 assets
Derivatives used in hedge
1 Included in net cash used in financing activities. n.a. 2 2 – 2 – 1 1 – 1 –
accounting
Derivatives not used in Fair value through
– – – – – – – – – –
hedge accounting profit or loss
Fair value through
Earn-out components 301 301 – – 301 227 227 – – 227
profit or loss
Other financial assets Amortized cost 115 – – – 108 – – –

Financial assets per level 1 1,095 474 2 508 400

Financial liabilities
Short-term borrowings
Bank borrowings Amortized cost 49 – – – 29 – – –
Eurobond Amortized cost 500 488 488 – – – – – – –
Convertible bond Amortized cost – – – – – 498 490 490 – –
Accounts payable Amortized cost 2,276 – – – 2,908 – – –
Current accrued liabilities Amortized cost 842 – – – 997 – – –
Current accrued liabilities for
Amortized cost 565 – – – 808 – – –
customer discounts
Other current financial
liabilities
Derivatives used in hedge
n.a. 88 88 – 88 – 127 127 – 127 –
accounting

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Carrying amounts of financial instruments and their fair values including hierarchy according to IFRS 13 € in millions Reconciliation of fair value hierarchy Level 3 in 2023 € in millions

Category December 31, 2023 December 31, 2022 Realized Unrealized

Carry- Carry- Fair
ing Fair ing Fair Fair value value
amount value Level 1 Level 2 Level 3 amount value Level 1 Level 2 Level 3 Jan. 1, Dis- Currency Dec. 31,
2023 Additions posals Gains Losses Gains Losses Transfers translation 2023
Derivatives not used in Fair value through
15 15 – 15 – 64 64 – 64 – Investments in
hedge accounting profit or loss
other equity
Other financial liabilities Amortized cost 163 – – – 232 – – –
instruments held 87 – – – – 2 – – – 89
Lease liabilities n.a. 545 – – – 643 – – – for trading
Long-term borrowings (FAHfT)
Bank borrowings Amortized cost 44 44 – 44 – 63 63 – 63 – Investments in
other equity
Eurobond Amortized cost 2,386 2,234 2,234 – – 2,883 2,604 2,604 – – 2 – – – – – – – – 2
instruments
Non-current accrued (FVTPL)
Amortized cost – – – – – 4 4 – – –
liabilities Investments in
Other non-current financial other equity
84 3 (0) – – – (4) – – 82
liabilities instruments
(FVOCI)
Derivatives used in hedge
n.a. 6 6 – 6 – 44 44 – 44 – Earn-out
accounting
components 227 – – – – 74 – – – 301
Lease liabilities n.a. 2,039 – – – 2,343 – – – (assets)

Financial liabilities per level 2,721 – 154 – 3,095 298 –

Thereof: aggregated by category

according to IFRS 9 Reconciliation of fair value hierarchy Level 3 in 2022 € in millions
Financial assets at fair value
1,326 495
through profit or loss (FVTPL) Realized Unrealized
Financial assets at fair value Fair
through other comprehensive 83 86 Fair value value
Jan. 1, Dis- Currency Dec. 31,
income (FVOCI) 2022 Additions posals Gains Losses Gains Losses Transfers translation 2022
Thereof: equity investments
Investments in
(without recycling to profit 83 86
other equity
and loss)
instruments held 87 – – – – 0 – – – 87
Financial assets at amortized for trading
3,275 4,067
cost (AC) (FAHfT)
Financial liabilities at fair value Investments in
15 64
through profit or loss (FVTPL) other equity
2 – – – – – – – – 2
Financial liabilities at instruments
6,825 8,423 (FVTPL)
amortized cost (AC)
Investments in
Level 1 is based on quoted prices in active markets for identical assets or liabilities. other equity
80 6 (0) – – 4 (3) (3) – 84
Level 2 is based on inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices). instruments
Level 3 is based on inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). (FVOCI)
Promissory notes
12 – (12) – – – – – – –
(FVTPL)
Earn-out
components – 247 – – – – (20) – – 227
(assets)

Due to the short-term maturities of cash and cash equivalents, short-term financial assets, and accounts
receivable and payable, as well as other current financial receivables and payables, their respective fair
values equal their carrying amount.

The fair values of non-current financial assets and liabilities are estimated by discounting expected future
cash flows using current interest rates for debt of similar terms and remaining maturities and adjusted by
a company-specific credit risk premium or measured at market prices.

Fair values of long-term financial assets are based on quoted market prices in an active market or are
calculated as present values of expected future cash flows.

adidas designated certain investments as equity securities at fair value through other comprehensive
income (equity), because the company intends to hold those investments for the long term in order to gain

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

insights into innovative production technologies and trends. The designation of certain equity instruments Financial instruments Level 3 measured at fair value
at fair value through other comprehensive income (equity) is based on a strategic Management decision.
Inter-relationship between
significant
Significant unobservable unobservable inputs and fair
In accordance with IFRS 13, the following tables show the valuation methods used in measuring Level 1, Type Valuation method inputs value measurement Category
Level 2, and Level 3 fair values, as well as the significant unobservable inputs used. No reclassifcations This equity security does not have a quoted
market price in an active market. Existing
between hierachy levels were made in 2023. A review of the hierachy levels is carried out regularly by contractual arrangements (based on the
Investment in FC Fair value
adidas. Bayern München
externally observable dividend policy of FC See column ‘Valuation
through profit
Bayern München AG) are used in order to method’
AG or loss
calculate the fair value on the balance sheet
date. These dividends are recognized in other
financial income.
The estimated fair value
Financial instruments Level 1 measured at fair value would increase by 11%
The valuation is based on the DCF Method, (decrease by 13%) if gross
considering Monte Carlo Simulations to Risk-adjusted royalty income were 10%
Significant Earn-out simulate future gross royalty income. The maturity-specific higher (10% lower). Fair value
unobservable components derived earn-out payments are discounted using discount rate (11.3% – The estimated fair value through profit
Type Valuation method inputs Category (assets) a risk-adjusted discount rate. The fair value 12.1%), gross royalty would increase by 1% or loss
adjustment is recognized in discontinued income (decrease by 1%) if the
The fair value is based on the market price of the operations. risk-adjusted discount rate
Convertible bond Not applicable Amortized cost was 1pp lower (1pp
convertible bond on the balance sheet date.
higher).
The fair value is based on the market price of the The significant inputs (financing rounds) used to
Eurobond Not applicable Amortized cost
eurobond on the balance sheet date. Investments in measure fair value include one or more events
Fair value other equity where objective evidence of any changes was Fair value
See column ‘Valuation
instruments (fair identified, considering expectations regarding through profit
through value through future business development. The fair value
method’
or loss
Other equity The fair value is based on the market price of the
Not applicable other profit or loss) adjustment is recognized in other financial
investments investment on the balance sheet date.
comprehensive result.
income The option to measure equity instruments at fair
value through other comprehensive income
Investments in
upon implementation of IFRS 9 has been
other equity
exercised. The significant inputs (financing Fair value
instruments (fair
rounds) used to measure fair value include one See column ‘Valuation through other
Financial instruments Level 2 measured at fair value value through
or more events where objective evidence of any method’ comprehensive
other
changes was identified, considering income
comprehensive
expectations regarding future business
Significant income)
development. The fair value adjustment is
unobservable recognized in other reserves.
Type Valuation method inputs Category
Cash equivalents The discounted cash flow method is applied,
and which considers the present value of expected
short-term financial payments, discounted using a risk-adjusted
Fair value Net gains/(losses) on financial instruments recognized in the consolidated income statement € in millions
Not applicable through profit or
assets discount rate. Due to their short-term maturities,
loss
(money market it is assumed that their respective fair value is Year ending Year ending
funds) equal to the notional amount. Dec. 31, 2023 Dec. 31, 2022
Long-term financial Financial assets classified at amortized cost (AC) (9) (79)
Fair value
assets The fair value is based on the market price of the
Not applicable through profit or Financial assets at fair value through profit or loss (FVTPL) 69 (4)
(investment assets on the balance sheet date.
loss
securities) Thereof: designated as such upon initial recognition – –
In 2023, adidas applied the par method (forward n.a./fair value Thereof: classified as held for trading 2 0
Forward exchange
NPV) for all currency pairs to calculate the fair Not applicable through profit or
contracts Equity instruments at fair value through profit or loss (FVTPL) – –
value, implying actively traded forward curves. loss
Equity instruments at fair value through other comprehensive income (FVOCI) – –
adidas applies the Garman-Kohlhagen model, n.a./fair value
Currency options which is an extended version of the Black- Not applicable through profit or Financial liabilities at amortized cost (AC) 3 24
Scholes model. loss Financial liabilities at fair value through profit or loss (FVTPL) – –
Fair value Thereof: designated as such upon initial recognition – –
Share option (cash
adidas applies the Black-Scholes model. Not applicable through profit or
settled) Thereof: classified as held for trading – –
loss
The fair value is based on the market price of the n.a./fair value
Total return swap
adidas AG share on the balance sheet date, Not applicable through profit or
(for own shares)
minus accrued interest. loss Net gains or losses on financial assets measured at amortized cost comprise mainly impairment losses
and reversals.

Net gains or losses on financial assets or financial liabilities classified as fair value through profit or loss
include the effects from fair value measurements of the derivatives that are not part of a hedging
relationship, and changes in the fair value of other financial instruments as well as interest expenses.

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Net gains or losses on equity instruments at fair value through profit or loss mainly include fair value adidas uses a combination of different hedging instruments, such as forward exchange contracts,
adjustments based on the respective valuation method. ► SEE TABLE ‘FINANCIAL INSTRUMENTS LEVEL 3 MEASURED AT FAIR currency options, and swaps, to protect itself against unfavorable currency movements. These contracts
VALUE’ are generally designated as cash flow hedges.

During 2023, no dividends regarding equity instruments at fair value through other comprehensive income Furthermore, translation impacts from the conversion of non-euro-denominated results into the
were recognized. company’s functional currency, the euro, might lead to a material negative impact on the company’s
financial performance.
Net gains or losses on financial liabilities measured at amortized cost include effects from early
settlement and reversals of accrued liabilities and refund liabilities. Further information about the accounting and hedge accounting treatment is included in these Notes.
► SEE NOTE 02
Notional amounts of all outstanding currency hedging instruments € in millions
Exposures are presented in the following table:
Dec. 31, 2023 Dec. 31, 2022
Forward exchange contracts 7,893 11,917 Exposure to foreign exchange risk based on notional amounts € in millions
Currency options 407 461
Total 8,300 12,377 USD GBP JPY CNY

As at December 31, 2023

Exposure from firm commitments and forecast
Fair values € in millions (4,684) 869 474 375
transactions
Balance sheet exposure including
(369) (18) (22) 148
Dec. 31, 2023 Dec. 31, 2022 intercompany exposure

Positive Negative Positive Negative Total gross exposure (5,053) 851 452 523
fair value fair value fair value fair value Hedged with currency options 353 – 54 –
Forward exchange contracts 81 (109) 225 (152) Hedged with forward contracts 2,761 (765) (257) (356)
Currency options 9 (1) 7 (1) Net exposure (1,939) 86 249 167
Total 90 (110) 233 (153)
As at December 31, 2022
Exposure from firm commitments and forecast
(5,879) 880 442 834
transactions
Notional amounts of outstanding US dollar hedging instruments € in millions Balance sheet exposure including
(258) 14 4 168
intercompany exposure
Dec. 31, 2023 Dec. 31, 2022
Total gross exposure (6,137) 894 446 1,002
Forward exchange contracts 3,449 5,669
Hedged with currency options 450 – 11 –
Currency options 353 450
Hedged with forward contracts 3,590 (696) (317) (753)
Total 3,802 6,119
Net exposure (2,097) 197 140 249

Financial risks The exposure from firm commitments and forecast transactions was calculated on a one-year basis.
Currency risks
Currency risks, to which adidas is particularly exposed, are a direct result of multi-currency cash flows In line with IFRS 7 requirements, the company has calculated the impact on net income and shareholders’
within the company. The vast majority of the transactional risk arises from product sourcing in US dollars, equity based on changes in the most important currency exchange rates. The calculated impacts mainly
while sales are typically denominated in the functional currency of the respective companies. The result from changes in the fair value of the hedging instruments. The analysis does not include effects that
currencies in which these transactions are mainly denominated are the US dollar, British pound, Japanese arise from the translation of the company’s foreign entities’ financial statements into the company’s
yen, and Chinese renminbi. reporting currency, the euro. The sensitivity analysis is based on the net balance sheet exposure, including
intercompany balances from monetary assets and liabilities denominated in foreign currencies. Moreover,
As governed by the company’s Treasury Policy, adidas has established a hedging system on a rolling basis all outstanding currency derivatives were re-evaluated using hypothetical foreign exchange rates to
up to 24 months in advance, under which the vast majority of the anticipated seasonal hedging volume is determine the effects on net income and equity.
secured approximately six months prior to the start of a season. In rare instances, hedges are contracted
beyond the 24-month horizon. Based on this analysis, a 10% increase in the euro versus the US dollar at December 31, 2023, would have
led to a € 17 million increase in net income.

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Sensitivity analysis of foreign exchange rate changes € in millions Credit risks

A credit risk arises if a customer or other counterparty to a financial instrument fails to meet its
USD GBP JPY CNY
contractual obligations. adidas is exposed to credit risks from its operating activities and from certain
As at December 31, 2023 financing activities. Credit risks arise principally from accounts receivable and, to a lesser extent, from
EUR +10% EUR +10% EUR +10% EUR +10% other third-party contractual financial obligations such as other financial assets, short-term bank
deposits, and derivative financial instruments. Without taking into account any collateral or other credit
Equity (198) 66 27 24
enhancements, the carrying amount of financial assets and accounts receivable represents the maximum
Net income 17 2 2 (8)
exposure to credit risk.
EUR -10% EUR -10% EUR -10% EUR -10%
Equity 263 (81) (33) (29)
At the end of 2023, there was no relevant concentration of credit risk by type of customer or geography.
Net income (20) (2) (3) 9
The company’s credit risk exposure is mainly influenced by individual customer characteristics. Under the
As at December 31, 2022 company’s credit policy, new customers are analyzed for creditworthiness before standard payment and
EUR +10% EUR +10% EUR +10% EUR +10% delivery terms and conditions are offered. Tolerance limits for accounts receivable are also established for
Equity (264) 60 30 50 each customer. Both creditworthiness and accounts receivable limits are monitored on an ongoing basis.
Net income 13 (1) (0) (4) Customers that fail to meet the company’s minimum creditworthiness are, in general, allowed to purchase
products only on a prepayment basis.
EUR -10% EUR -10% EUR -10% EUR -10%
Equity 335 (74) (36) (61)
Other activities to mitigate credit risks include retention of title clauses as well as, on a selective basis,
Net income (15) 2 0 4
credit insurance, the sale of accounts receivable without recourse, and bank guarantees. Further
quantitative information on the extent to which credit enhancements mitigate the credit risk of accounts
receivable is included in these Notes. ► SEE NOTE 05
The more negative market values of the US dollar hedges would have decreased shareholders’ equity by
€ 198 million. A 10% weaker euro at December 31, 2023, would have led to a € 20 million decrease in net
At the end of 2023, no customer accounted for more than 10% of accounts receivable.
income. Shareholders’ equity would have increased by € 263 million. The impacts of fluctuations of the
euro against the British pound, the Japanese yen, and the Chinese renminbi on net income and
The Treasury department arranges currency, commodity, interest rate, and equity hedges, and invests
shareholders’ equity are also included in accordance with IFRS requirements.
cash with major banks of a high credit standing throughout the world. adidas subsidiaries are authorized
to work with banks rated BBB+ or higher. Only in exceptional cases are subsidiaries authorized to work
However, many other financial and operational variables that could potentially reduce the effect of
with banks rated lower than BBB+. To limit risk in these cases, restrictions are clearly stipulated, such as
currency fluctuations are excluded from the analysis. For instance:
maximum cash deposit levels. In addition, the credit default swap premiums of the company’s partner
banks are monitored on a monthly basis. In the event that the defined threshold is exceeded, credit
─ Interest rates, commodity prices, and all other exchange rates are assumed constant.
balances are shifted to banks compliant with the limit.

─ Exchange rates are assumed at a year-end value instead of the more relevant sales-weighted average
adidas furthermore believes that the risk concentration is limited due to the broad distribution of the
figure, which the company utilizes internally to better reflect both the seasonality of its business and
investment business of the company with a high number of globally operating banks. At December 31,
intra-year currency fluctuations.
2023, no bank accounted for more than 10% of the investments of adidas. Including subsidiaries’ short-
term deposits in local banks, the average concentration was 2%. This leads to a maximum exposure of
─ The underlying forecast cash flow exposure (which the hedge instrument mainly relates to) is not
€ 91 million in the event of default of any single bank. The investment exposure was further diversified by
required to be revalued in this analysis.
investing into AAA-rated money market funds.

─ Operational aspects, such as potential discounts for key accounts, which have high transparency
In addition, in 2023, adidas held derivatives of foreign exchange with a positive fair market value in the
regarding the impacts of currency on our sourcing activities (due to their own private label sourcing
amount of € 90 million. The maximum exposure to any single bank resulting from these assets amounted
efforts), are also excluded from this analysis.
to € 28 million and the average concentration was 8%.

─ The credit risk is not considered as part of this analysis.

In accordance with IFRS 7, the following table includes further information about set-off possibilities of
derivative financial assets and liabilities. The majority of agreements between financial institutions and
The company also largely hedges balance sheet risks. Due to its strong global position, adidas is able to
adidas include a mutual right to set off. However, these agreements do not meet the criteria for offsetting
partly minimize the currency risk by utilizing natural hedges. The company’s gross US dollar cash flow
in the statement of financial position, because the right to set off is enforceable only in the event of
exposure calculated for 2023 was around € 4.1 billion at year-end 2023, which was hedged using forward
counterparty defaults.
exchange contracts, currency options, and currency swaps.

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The carrying amounts of recognized derivative financial instruments, which are subject to the agreements Financing and liquidity risks
mentioned here, are also presented in the following table: Liquidity risks arise from not having the necessary resources available to meet maturing liabilities with
regard to timing, volume, and currency structure. In addition, the company faces the risk of having to
Set-off possibilities of derivative financial assets and liabilities € in millions accept unfavorable financing terms due to liquidity restraints. The Treasury department uses an efficient
cash management system in order to make best use of the operating cash flow. A twelve-month rolling
2023 2022
cash flow forecast on a monthly basis is established to manage liquidity risk. In line with the Financial
Assets Policy, adidas aims to maintain a target leverage ratio and a target twelve months liquidity coverage.
Gross amounts of recognized financial assets 96 233 Committed and uncommitted credit lines ensure further financial flexibility. Overall, adidas’ investment
Financial instruments which qualify for set-off in the statement of financial grade credit ratings ensure an efficient access to capital markets.
– –
position
Net amounts of financial assets presented in the statement of financial position 96 233 At December 31, 2023, cash and cash equivalents together with marketable securities amounted to
Set-off possible due to master agreements (83) (132) € 1.465 billion (2022: € 0.798 billion). Moreover, the company maintains € 3.648 billion
Total net amount of financial assets 13 101 (2022: € 4.090 billion) in bilateral credit lines, which are designed to ensure sufficient liquidity at all times.
Thereof, € 1.864 billion has been firmly committed since December 2023 as part of a syndicated credit
Liabilities facility with our core banks.
Gross amounts of recognized financial liabilities (126) (235)
Financial instruments which qualify for set-off in the statement of financial Future cash outflows arising from financial liabilities that are recognized in the consolidated statement of
– –
position financial position are presented in the table.
Net amounts of financial liabilities presented in the statement of financial
(126) (235)
position
This includes payments to settle obligations from borrowings as well as cash outflows from cash-settled
Set-off possible due to master agreements 83 132
derivatives with negative market values. Financial liabilities that may be settled in advance without penalty
Total net amount of financial liabilities (43) (103) are included on the basis of the earliest date of potential repayment. Cash flows for variable-interest
liabilities are determined with reference to the conditions at the balance sheet date.

Interest rate risks

Changes in global market interest rates affect future interest payments for variable-interest liabilities. As
adidas does not have material variable-interest liabilities, even a significant increase in interest rates
should have only slight adverse effects on the company’s profitability, liquidity, and financial position.

To reduce interest rate risks and maintain financial flexibility, a core tenet of the company’s financial
strategy is to continue to use surplus cash flow from operations to reduce short-term gross borrowings.
Beyond that, adidas may consider adequate hedging strategies through interest rate derivatives in order to
mitigate interest rate risks.

Share price risks

Share price risks arise due to the Long-Term Incentive Plan (LTIP), which is a share-based remuneration
scheme with cash settlement. In order to mitigate share price risks, it is company strategy to hedge
against share price fluctuations. Swaps are used to hedge the Long-Term Incentive Plan and are classified
as cash flow hedges.

In line with IFRS 7 requirements, adidas has calculated the impact on net income based on changes in the
company’s share price. A 10% increase in the adidas AG share price versus the closing share price at
December 31, 2023, would have led to a € 5 million increase in net income and a € 4 million increase in
shareholders’ equity, whereas a 10% decrease in the adidas AG share price versus closing share price at
December 31, 2023, would have led to a € 5 million decrease in net income and would have decreased
shareholders’ equity by € 4 million.

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Future cash outflows € in millions Financial instruments for the hedging of foreign exchange and share price risk
As at December 31, 2023, adidas held the following instruments to hedge exposure to changes in foreign
More
currency and share price:
Up to Up to Up to Up to Up to than
1 year 2 years 3 years 4 years 5 years 5 years Total
Average hedge rates
As at
December 31, 2023
Maturity
Bank borrowings 48 19 19 7 – – 93
As at December 31, 2023 short-term long-term
Eurobond1 543 543 428 19 519 1,037 3,089
Equity-neutral Foreign currency risk
– – – – – – –
convertible bond
Net exposure (€ in millions) 939 245
Accounts payable 2,276 – – – – – 2,276
Forward exchange contracts
Other financial
163 – – – – – 163 Average EUR/USD forward rate 1.096 1.100
liabilities
Accrued liabilities2 842 – – – – – 842 Average EUR/GBP forward rate 0.881 0.876
Derivative financial Average EUR/JPY forward rate 141.099 149.574
3,915 321 – – – – 4,236
liabilities Average EUR/CNY forward rate 7.453 7.738
Total 7,787 883 447 26 519 1,037 10,699 Option exchange contracts
Average EUR/USD forward rate 1.103 1.100
As at
December 31, 2022 Average EUR/GBP forward rate – –
Bank borrowings 29 19 19 19 7 – 93 Average EUR/JPY forward rate 146.908 –
Eurobond1 43 543 543 428 19 1,556 3,132 Average USD/CNY forward rate – –
Equity-neutral
498 – – – – – 498 Equity risk
convertible bond
Net exposure (€ in millions) 12 90
Accounts payable 2,908 – – – – – 2,908
Other financial Total return swap
232 – – – – – 232
liabilities Average hedge rate 277.298 199.049
Accrued liabilities2 997 – – – – 4 1,001
Derivative financial
5,183 296 30 – – – 5,509
liabilities
Average hedge rates
Total 9,890 858 592 447 26 1,560 13,373

1 Including interest payments. Maturity

2 Accrued interest excluded.
As at December 31, 2022 short-term long-term

adidas ended the year 2023 with an adjusted net borrowings of € 4.518 billion (2022: € 6.047 billion). Foreign currency risk
Further information in the methodology for calculating adjusted net borrowings is provided in these Notes. Net exposure (€ in millions) 1,548 154
► SEE NOTE 25
Forward exchange contracts
Average EUR/USD forward rate 1.096 1.064
Average EUR/GBP forward rate 0,865 0,877
Average EUR/JPY forward rate 133.215 135.203
Average EUR/CNY forward rate 7.269 7.191
Option exchange contracts
Average EUR/USD forward rate 1.040 1.000
Average EUR/GBP forward rate – –
Average EUR/JPY forward rate 130.000 –
Average USD/CNY forward rate – –

Equity risk
Net exposure (€ in millions) 78 83
Total return swap
Average hedge rate 305.639 229.294

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

The amounts at the reporting date relating to items designated as hedged items were as follows: The amounts relating to items designated as hedging instruments and hedged ineffectiveness were as
follows:
Designated hedged items as at December 31, 2023 € in millions
Designated hedge instruments € in millions
Balances remaining in
the cash flow hedging
reserve from hedge 2023 During the period 2023
Change in value used for relationships for which
calculating hedge hedge accounting is no Carrying
ineffectiveness Hedging reserve Cost of hedging reserve longer applied amount
Changes
Foreign currency risk Changes in the
in the value Amount
Sales (145) 40 (19) – Line value of the Amount from Amount
item in of the hedging Line item from cost of Amount reclass-
Inventory purchases (34) (66) 19 – statement hedging instru- Hedge in income hedging hedging reclassified Line item
of financial instrument ineffec- statement reserve reserve ified from in income
Net foreign investment risk – (265) – – position ment recog- tiveness which trans- trans- from cost of statement
Nomi- where the recognized in recog- includes ferred ferred hedging hedging affected
Equity risk nal Lia- hedging nized in cost of nized in hedge to to reserve reserve by the
amo- As- bili- instrument hedging hedging profit or ineffec- inven- inven- to profit to profit reclass-
Long-Term Incentive Plans (46) (0) – – unt sets ties is included reserve reserve loss tiveness tory tory or loss or loss ification
Foreign ex Other
change financial
2,798 60 (19) 145 (140) – Net Sales – – 20 63 Net Sales
contracts – assets/
sales liabilities
Designated hedged items as at December 31, 2022 € in millions
Foreign
Other
exchange
Balances remaining in financial Cost of Cost of
contracts – 3,040 2 (69) 34 (49) – (76) 75 – –
the cash flow hedging assets/ sales sales
reserve from hedge inventory
liabilities
Change in value used for relationships for which purchases
calculating hedge hedge accounting is no
ineffectiveness Hedging reserve Cost of hedging reserve longer applied Foreign
exchange Other
contracts – financial Financial Financial
Foreign currency risk – – – – – – – – – –
net foreign assets/ result result
Sales (205) 104 (63) – invest- liabilities
ments
Inventory purchases 76 31 8 –
Total
Net foreign investment risk 50 (265) – – return Other
Other
swap – financial Financial
102 (11) – 46 – – – – (23) – operating
Equity risk Long-Term assets/ result
expenses
Long-Term Incentive Plans 85 (23) – – Incentive liabilities
Plans

The hedging reserves of € 265 million for net foreign investment risk contains hedges of € 181 million
related to the Chinese renminbi and € 76 million to the Russian ruble for which by the end of 2023 no
outstanding hedging instruments were in place anymore.

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

The following table provides a reconciliation by risk category of components of equity and analysis of OCI
Designated hedge instruments € in millions
items, net of tax, resulting from cash flow hedge accounting:

2022 During the period 2022

Changes of reserves by risk category € in millions
Carrying
amount
Changes Cost of
Changes in the Hedging hedging
in the value Amount
Line value of the Amount from Amount reserve reserve
item in of the hedging Line item from cost of Amount reclass-
statement hedging instru- Hedge in income hedging hedging reclassified Line item (150) (64)
of financial instrument ineffec- statement reserve reserve ified from in income Balance at January 1, 2023
position ment recog- tiveness which trans- trans- from cost of statement
Nomi- where the recognized in recog- includes ferred ferred hedging hedging affected Cash flow hedges
nal Lia- hedging nized in cost of nized in hedge to to reserve reserve by the
amo- As- bili- instrument hedging hedging profit or ineffec- inven- inven- to profit to profit reclass- Changes in fair value:
unt sets ties is included reserve reserve loss tiveness tory tory or loss or loss ification
Foreign ex Other
Foreign currency risk – sales (54) 103
change financial Foreign currency risk – inventory purchases (165) 78
3,081 102 2 205 (134) – Net Sales – – (182) 64 Net Sales
contracts – assets/
sales liabilities Foreign currency risk – net foreign investment – –
Foreign
Other
Amount no longer recognized in OCI:
exchange
financial Cost of Cost of Foreign currency risk 56 (138)
contracts – 3,897 85 (54) (76) (39) – 249 84 – –
assets/ sales sales
inventory Contracts during the year 1 14
liabilities
purchases
Amount included in the cost of non-financial items:
Foreign
exchange Other Foreign currency risk – inventory purchases – –
contracts – financial Financial Financial
– – – (50) – – – – – – Tax on movements of reserves during the year 70 3
net foreign assets/ result result
invest- liabilities
Equity hedges
ments
Total Changes in fair value: 46 –
return Other
Other Amount reclassified to profit or loss (23) –
swap – financial Financial
161 – (82) (85) – – – – 67 – operating
Long-Term assets/ result Balance at December 31, 2023 (217) (4)
expenses
Incentive liabilities
Plans

Changes of reserves by risk category € in millions

Some of the initial planned exposure for purchases and sales in foreign currencies ceased to exist, which
Cost of
led to certain overhedge positions. In accordance with IFRS 9, hedge accounting was immediately
Hedging hedging
discontinued for hedging instruments that were no longer covered by a purchase or sales transaction, and, reserve reserve
at the time the over-hedged status was determined, the fair value was transferred from the hedging
Balance at January 1, 2022 (109) (20)
reserve to the income statement. In 2023, a gain of € 9 million was reclassified into the net sales and a
loss of € 7 million was reclassified into the cost of sales. Cash flow hedges
Changes in fair value:
In addition, hedging instruments not designated as hedge accounting in accordance with IFRS 9 were Foreign currency risk – sales 10 11
canceled to minimize the economic risk. Foreign currency risk – inventory purchases 122 37
Foreign currency risk – net foreign investment (50) –
Amount no longer recognized in OCI:
Foreign currency risk (68) (149)
Contracts during the year (37) 57
Amount included in the cost of non-financial items:
Foreign currency risk – inventory purchases – –
Tax on movements on reserves during the year 59 7
Equity hedges
Changes in fair value: (85) –
Amount reclassified to profit or loss 67 –
Balance at December 31, 2022 (90) (58)

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

In order to determine the fair values of derivatives that are not publicly traded, adidas uses generally Income from government grants is reported as a deduction from the related expenses and amounted to
accepted quantitative financial models based on market conditions prevailing at the balance sheet date. € 27 million in 2023 (2022: € 36 million).

Notes to the Consolidated Income Statement 31 Cost by nature

Supplementary information on the expenses by nature is detailed below.
29 Other operating income
Cost of materials represents the amount of inventories recognized as an expense during the period.
Other operating income consists of the following:
Depreciation of tangible and right-of-use assets, amortization of intangible assets, and impairment losses
Other operating income € in millions and reversals of impairment losses on those assets are primarily included within other operating
expenses unless they are directly attributable to the production costs, in which case the expenses are
Year ending Year ending included within the cost of sales. Impairment losses on goodwill are presented as a separate line item in
Dec. 31, 2023 Dec. 31, 2022 the consolidated income statement.
Income from transitional service agreements 50 156
Income from release of accrued liabilities and other provisions 7 7 Personnel expenses are primarily included within other operating expenses unless they are directly
Gains from disposal of fixed assets 7 3 attributable to the production costs, in which case the expenses are included within the cost of sales.
Sundry income 7 7
Other operating income 71 173 Expenses relating to leases of low-value assets exclude short-term leases of low-value assets.

Expenses by nature € in millions

The decrease in income from transition services agreements relates to contracts with the buyer of the
Year ending Year ending
Reebok business from 2022. adidas discontinued these services in 2023.
Dec. 31, 2023 Dec. 31, 2022

Cost of materials 11,189 11,798

30 Other operating expenses Depreciation and amortization 1,095 1,220

Thereof: included within the cost of sales 13 51
Expenses are presented by function according to the ‘cost of sales method’ in the income statement with Thereof: included within personnel expenses 11 10
the exception of impairment losses (net) on accounts receivable and contract assets which are disclosed in Impairment losses 108 154
a separate line item as required by IFRS 9 ‘Financial Instruments.’ Reversals of impairment losses (34) (4)
Wages and salaries 2,580 2,444
Other operating expenses presented by functions include marketing and point-of-sale expenses, Social security contributions 266 276
distribution and selling expenses, and general and administration expenses, as well as sundry expenses Pension expenses 119 136
less any income from government grants, if applicable.
Personnel expenses 2,964 2,856
Expense relating to short-term leases 19 14
Marketing and point-of-sale expenses consist of promotion and communication spending such as
Expense relating to leases of low-value assets 1 0
promotion contracts, advertising, events, and other communication activities. However, they do not include
Expense relating to variable lease payments 122 118
marketing overhead expenses, which are presented in distribution and selling expenses.

The distribution and selling expenses consist of sales force and sales administration costs, direct and
indirect supply chain costs, and marketing overhead expenses, as well as expenses for research and Further information on expenses by function is provided in these Notes. ► SEE NOTE 30
development, which amounted to € 151 million in 2023 (2022: € 153 million).

General and administration expenses include the functions IT, Finance, Legal, Human Resources, and
Facilities & Services, as well as General Management.

Sundry expenses consist mainly of costs for one-time effects as well as losses from disposal of fixed
assets.

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32 Financial income/Financial expenses 33 Hyperinflation

Financial result consists of the following: Due to the rapid devaluation of the Argentinian peso and the Turkish lira, Argentina and Turkey are
considered to be hyperinflationary and as a result, the application of IAS 29 was adopted for the first time
Financial income € in millions in the third quarter of 2018 (Argentina) and the second quarter of 2022 (Turkey). The financial statements
of those subsidiaries that have the Argentinian peso or Turkish lira as a functional currency had been
Year ending Year ending restated for the change in the general purchasing power retrospectively since January 1, 2018 (Argentina),
Dec. 31, 2023 Dec. 31, 2022
and January 1, 2022 (Turkey). The financial statements are based on a historical cost approach. The prior-
Interest income from financial instruments measured at amortized cost 39 23
year figures of the Argentinian peso are stated in terms of the measuring unit current at December
Interest income from non-financial assets 0 0
31, 2022. Pursuant to IAS 21 ‘Effects of Changes in Foreign Exchange Rates,’ paragraph 42, the
Other 40 16
comparative amounts of the previous reporting period were not restated for the Turkish lira.
Financial income 79 39

The Argentinian price index at December 31, 2023, was 44,914.03 (2022: 15,047.61). The price index in
Turkey at December 31, 2023, was 1,859.38 (2022: 1,128.45).
Financial expenses € in millions
Both for Argentina and for Turkey, for the translation into the presentation currency (euro), all amounts
Year ending Year ending
were translated at the closing rate at December 31, 2023. The net assets in the subsidiary’s local financial
Dec. 31, 2023 Dec. 31, 2022
statements were adjusted for changes in the price level.
Interest expense on financial instruments measured at amortized cost 157 125
Thereof: interest expense on lease liabilities 86 83
In 2023, the respective loss on the net monetary position has amounted to € 56 million (2022: € 34 million)
Interest expense on other provisions and non-financial liabilities 3 12
and is recognized in the financial expenses.
Net foreign exchange losses 121 166
Other 2 17
Financial expenses 282 320
34 Income taxes
adidas AG and its German subsidiaries are subject to German corporate and trade taxes. For the years
Interest income from financial instruments, measured at amortized cost, mainly consists of interest
ending December 31, 2023 and 2022, the statutory corporate income tax rate of 15% plus a surcharge of
income from bank deposits and loans calculated using the ‘effective interest method.’
5.5% thereon is applied to earnings. The municipal trade tax is approximately 11.4% of taxable income.
Interest income/expense from financial instruments at fair value through profit or loss mainly includes
For non-German subsidiaries, deferred taxes are calculated based on tax rates that have been enacted or
interest payments from investment funds as well as net interest payments from interest derivatives not
substantively enacted by the closing date.
being part of a hedging relationship. Unrealized gains/losses from fair value measurement of such
financial assets are shown in other financial income or expenses.
Deferred tax assets and liabilities
Interest expense on financial instruments measured at amortized cost mainly includes interest on lease Deferred tax assets and liabilities are offset if:
liabilities as well as interest on borrowings calculated using the ‘effective interest method.’
─ the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
Interest expense on other provisions, and non-financial liabilities in particular, include effects from the ─ the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same
measurement of other provisions at present value and interest on non-financial liabilities such as tax taxation authority on either:
payables. ─ the same taxable entity; or
─ different taxable entities which intend either to settle current tax liabilities and assets on a net
Information regarding investments, borrowings, and financial instruments is also included in these Notes. basis, or to realize the assets and settle the liabilities simultaneously, in each future period in
► SEE NOTE 13 ► SEE NOTE 16 ► SEE NOTE 28 which significant amounts of deferred tax liabilities or assets are expected to be settled or
recovered.

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

As a result they are presented in the consolidated statement of financial position as follows: remaining unrecognized deferred tax assets relate to subsidiaries operating in markets where the
realization of the related tax benefit is not considered probable.
Deferred tax assets/liabilities € in millions
adidas does not recognize deferred tax liabilities for unremitted earnings of non-German subsidiaries to
Dec. 31, 2023 Dec. 31, 2022 the extent that they are expected to be permanently invested in international operations. These earnings,
Deferred tax assets 1,358 1,216 the amount of which cannot be practicably computed, could become subject to additional tax if they were
Deferred tax liabilities (147) (135) remitted as dividends or if the company were to sell its shareholdings in the subsidiaries.
Deferred tax assets, net 1,211 1,082
Tax expenses
The movement of deferred taxes net is as follows: Tax expenses are split as follows:

Movement of deferred taxes € in millions Income tax expenses € in millions

2023 2022 Year ending Year ending

Dec. 31, 2023 Dec. 31, 2022
Deferred tax assets, net as at January 1 1,082 1,141
Deferred tax income 149 (76) Current tax expenses 271 156

Change in consolidated companies – 23 Deferred tax income (147) (23)

Change in deferred taxes attributable to remeasurements of defined benefit plans Income tax expenses 124 134
3 (44)
recorded in other comprehensive income 1
Change in deferred taxes attributable to the change in the effective portion of the
fair value of qualifying hedging instruments recorded in other comprehensive 1 21
The deferred tax income includes tax expense of € 7 million in total (2022: tax expense of € 6 million)
income2
related to the origination and reversal of temporary differences.
Currency translation differences (23) 17
Deferred tax assets, net as at December 31 1,211 1,082
The company’s applicable tax rate is 27.4% (2021: 27.4%), being the applicable income tax rate of
1 See Note 23. adidas AG.
2 See Note 28.

Gross company deferred tax assets and liabilities after valuation allowances, but before appropriate The company’s effective tax rate differs from the applicable tax rate of 27.4% as follows:
offsetting, are attributable to the items detailed in the table below:
Tax rate reconciliation
Deferred taxes € in millions
Year ending Dec. 31, 2023 Year ending Dec. 31, 2022
Dec. 31, 2023 Dec. 31, 2022 € in millions in % € in millions in %
Non-current assets 480 462 Expected income tax expenses 18 27.4 106 27.4
Current assets 334 245 Tax rate differentials (5) (8.4) (59) (15.1)
Liabilities and provisions 622 852 Non-deductible expenses and tax-free income 61 92.4 (160) (41.2)
Accumulated tax loss carry-forwards 260 126 Losses for which benefits were not
recognizable and changes in valuation (1) (2.1) 251 64.6
Deferred tax assets 1,696 1,685
allowances
Non-current assets 356 421 Changes in tax rates 0 0.3 (7) (1.7)
Current assets 17 71 Other, net 2 3.8 (3) (0.6)
Liabilities and provisions 113 111 Withholding tax expenses 50 76.0 5 1.2
Deferred tax liabilities 485 603 Income tax expenses 124 189.2 134 34.5
Deferred tax assets, net 1,211 1,082

In 2023, the effective tax rate was 189.2%. The effective tax rate in 2022 was 34.5%.
Deferred tax assets are recognized only to the extent that the realization of the related benefit is probable.
For the assessment of probability, in addition to past performance and the respective prospects for the The line item ‘Non-deductible expenses’ includes tax expense/benefits relating to tax-free income,
foreseeable future, appropriate tax structuring measures are also taken into consideration. movements in provisions for uncertain tax positions and tax expense/benefits relating to prior periods. In
2023, the tax income relating to prior periods is € 9 million (2022: tax income of € 118 million).
Deferred tax assets for which the realization of the related tax benefits is not probable decreased from
€ 406 million to € 308 million for the year ending December 31, 2023. The majority of this amount relates
to capital tax losses in the US, which expire in 2027 and can only be offset against capital income. The

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For 2023, the line item ‘Losses for which benefits were not recognizable and changes in valuation 35 Earnings per share
allowances’ mainly relates to valuation allowances in respect of Russia (€ 12 million) and a release to the
valuation allowances for the US and Argentina (€ 13 million). For 2022, this line item mainly related to
Basic earnings per share are calculated by dividing the net income from continuing operations attributable
changes in valuation allowances for the US, Argentina, and Brazil. to shareholders by the weighted average number of shares outstanding during the year, excluding
ordinary shares purchased by adidas and held as treasury shares. If negative earnings per share are
For 2023, the total tax benefit arising from previously unrecognized tax losses, credits or temporary
reported, according to IAS 33.41, no anti-dilutive effect may be taken into account.
differences in prior years that is used to reduce current tax expense was € 6 million, mainly relating to
Argentina and Lebanon (2022: € 5 million). Earnings per share
For 2023, there were no effects of changes in tax rates that exceed € 1 million. For 2022, this line item Continuing operations Discontinued operations Total
mainly reflected a tax rate change in Switzerland. Year ending Year ending Year ending Year ending Year ending Year ending
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
Net (loss)/ income from continuing
The group is within the scope of the OECD Pillar Two model rules (Global Minimum Tax). Pillar Two (58) 254 – – – –
operations (€ in millions)
legislation was enacted in Germany, the jurisdiction in which the company is incorporated, and will come Net income attributable to non-
61 26 – – – –
controlling interests (€ in millions)
into effect from January 1, 2024. Since the Pillar Two legislation was not effective at the reporting date, the
Net (loss)/income attributable to
group has no related current tax exposure. The group applies the exception to recognizing and disclosing (120) 228 44 384 (75) 612
shareholders (€ in millions)
information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the Weighted average number of shares 178,543,596 183,263,629 178,543,596 183,263,629 178,543,596 183,263,629
amendments to IAS 12 issued in May 2023. Basic earnings per share (€) (0.67) 1.25 0.25 2.09 (0.42) 3.34

Under the legislation, the group is liable to pay a top-up tax for the difference between its Global Anti-Base Net (loss)/income attributable to
(120) 228 44 384 (75) 612
shareholders (€ in millions)
Erosion (GloBE) effective tax rate per jurisdiction and the 15% minimum rate. The vast majority of entities
Net (loss)/ income used to determine
within the group have an effective tax rate that exceeds 15%, with material exceptions for subsidiaries in diluted earnings per share (120) 228 44 384 (75) 612
the United Arab Emirates, Hongkong and Switzerland. (€ in millions)
Weighted average number of shares 178,543,596 183,263,629 178,543,596 183,263,629 178,543,596 183,263,629
Dilutive effect of share-based
The group is in the process of assessing the impact of the Pillar Two legislation. Based on prior years and payments
14,019 4,458 14,019 4,458 14,019 4,458
the accounting profit for the financial year 2023, this assessment process results in an additional expected Weighted average number of shares
178,557,615 183,268,087 178,557,615 183,268,087 178,557,615 183,268,087
tax exposure in a low two digit € million range. The group might not be exposed to paying Pillar Two for diluted earnings per share

income taxes in relation to most jurisdictions. This is due to the impact of specific adjustments envisaged Diluted earnings per share (€) (0.67) 1.25 0.25 2.09 (0.42) 3.34

in the Pillar Two legislation which give rise to different effective tax rates compared to those calculated in
accordance with paragraph 86 of IAS 12.

Due to the complexities in applying the legislation and calculating GloBE income, the quantitative impact of Additional information
the enacted or substantively enacted legislation is not yet reasonably estimable.

36 Segmental information
adidas operates predominantly in one industry segment – the design, distribution, and marketing of
athletic and sports lifestyle products.

As at December 31, 2023, following the company’s internal management reporting by markets and in
accordance with the definition of IFRS 8 ‘Operating Segments,’ five operating segments were identified:
EMEA, North America, Asia-Pacific, Greater China, and Latin America.

Each market comprises all wholesale, retail, and e-commerce business activities relating to the
distribution and sale of products of the adidas brand to retail customers and end consumers.

Other Businesses includes the business activities of the Y-3 label and other subordinated businesses
which are not monitored separately by the chief operating decision-maker. Also, certain centralized
corporate functions do not meet the definition of IFRS 8 for an operating segment. This includes, in
particular, functions such as Global Brands and Global Sales (central brand and distribution

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management), central treasury, and global sourcing as well as other headquarter functions. Assets, Segmental information II € in millions
liabilities, income, and expenses relating to these corporate functions are presented in the reconciliations.
Impairment losses
Capital Depreciation and and reversals of
expenditure1 amortization1 impairment losses 1
The chief operating decision-maker for adidas has been defined as the entire Executive Board of
2023 2022 2023 2022 2023 2022
adidas AG.
EMEA 120 146 292 335 27 116
North America 73 73 159 156 18 (1)
Net sales represent revenue from contracts with customers. There are no intersegment sales between the Greater China 50 78 205 256 10 6
reportable segments. Accounting and valuation policies applied for reporting segmental information are Asia-Pacific 35 52 126 134 21 5
the same as those used for adidas. ► SEE NOTE 02 Latin America 31 29 57 56 – –
Reportable segments 309 378 838 937 77 126
The results of the operating segments are reported in the line item ‘Segmental operating profit.’ This is Other Businesses 2 1 2 2 – 1
defined as gross profit minus other operating expenses plus royalty and commission income and other Total 311 379 840 940 77 126
operating income attributable to the segment, without considering headquarter costs and central 1 Year ending December 31.
expenditure for marketing.
The following table shows the net sales (with third parties) broken down by segment and product group.
Segmental assets include accounts receivable as well as inventories. Only these items are reported to the
chief operating decision-maker on a regular basis. Depreciation, amortization, impairment losses (except Net sales (with third parties) € in millions
for goodwill), and reversals of impairment losses as well as capital expenditure for tangible and intangible
assets are part of the segmental reporting, even though segmental assets do not contain tangible and EMEA North America Greater China Asia-Pacific
2023 2022 2023 2022 2023 2022 2023 2022
intangible assets. Depreciation and amortization as well as impairment losses and reversals of
Footwear 4,611 4,529 2,826 3,641 1,819 1,709 1,234 1,177
impairment losses not directly attributable to a segment are presented under line items ‘HQ’ and
Apparel 3,059 3,464 1,920 2,242 1,293 1,379 863 917
‘Consolidation’ in the reconciliations.
Accessories and Gear 565 556 474 522 78 91 157 148
Total 8,235 8,550 5,219 6,404 3,190 3,179 2,254 2,241
Segmental liabilities only contain accounts payable from operating activities as there are no other liability
items reported regularly to the chief operating decision-maker. Latin America Reportable segments Other Businesses Total
2023 2022 2023 2022 2023 2022 2023 2022
Interest income and interest expenses as well as income taxes are not allocated to the reportable Footwear 1,530 1,288 12,020 12,344 36 59 12,056 12,402
segments and are not reported separately to the chief operating decision-maker. Apparel 617 668 7,752 8,670 53 62 7,806 8,732
Accessories and Gear 145 147 1,418 1,464 65 29 1,483 1,493
Segmental information I € in millions Total 2,291 2,104 21,190 22,478 155 150 21,344 22,628

Net sales Segmental Segmental Segmental

(third parties)1,2 operating profit1,2 assets1,3 liabilities1,3
2023 2022 2023 2022 2023 2022 2023 2022 Reconciliations
EMEA 8,235 8,550 1,280 1,678 2,633 2,960 256 294 The following tables include reconciliations of segmental information to the aggregate numbers of the
North America 5,219 6,404 273 989 1,737 2,589 123 139 consolidated financial statements, taking into account items which are not directly attributable to a
Greater China 3,190 3,179 553 322 735 1,361 184 218
segment.
Asia-Pacific 2,254 2,241 472 486 624 712 59 78
Latin America 2,291 2,104 482 474 865 811 111 128
Net sales (third parties) € in millions
Reportable segments 21,190 22,478 3,061 3,949 6,594 8,434 732 856
Other Businesses 155 150 36 27 48 49 4 4
Year ending Year ending
Total 21,344 22,628 3,096 3,976 6,642 8,483 736 861 Dec. 31, 2023 Dec. 31, 2022
1 2022 figures adjusted due to a shift between the Latin and North America segments. Reportable segments 21,190 22,478
2 Year ending December 31.
3 At December 31.
Other Businesses 155 150
HQ / Consolidation 83 (117)
Total net sales 21,427 22,511

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Operating profit € in millions Assets € in millions

Year ending Year ending Dec. 31, 2023 Dec. 31, 2022
Dec. 31, 2023 Dec. 31, 2022
Accounts receivable and inventories of reportable segments 6,594 8,434
Operating profit for reportable segments 3,061 3,949 Accounts receivable and inventories of Other Businesses 48 49
Operating profit for Other Businesses 36 27 Accounts receivable and inventories of HQ (211) 20
HQ (2,015) (2,169) Current financial assets 2,220 1,811
Central expenditure for marketing (823) (934) Other current assets 1,159 1,418
Consolidation 9 (203) Non-current assets 8,211 8,563
Operating profit 268 669 Total 18,020 20,296
Financial income 79 39
Financial expenses (282) (320)
Income before taxes 65 388 Liabilities € in millions

Dec. 31, 2023 Dec. 31, 2022

Capital expenditure € in millions Accounts payable of reportable segments 732 856
Accounts payable of Other Businesses 4 4
Year ending Year ending Accounts payable of HQ 1,540 2,048
Dec. 31, 2023 Dec. 31, 2022
Current financial liabilities 1,359 1,594
Reportable segments 309 378
Other current liabilities 4,503 4,755
Other Businesses 2 1
Non-current liabilities 4,957 5,688
HQ 193 317
Total 13,095 14,945
Total 504 695

Geographical information
Depreciation and amortization € in millions
Net sales (third parties) are shown in the geographic market in which the net sales are realized. Non-
Year ending Year ending current assets are allocated to the geographic market based on the domicile of the respective subsidiary
Dec. 31, 2023 Dec. 31, 2022 independent of the segmental structure and consist of tangible assets, goodwill, trademarks, other
Reportable segments 838 937 intangible assets, right-of-use assets, and other non-current assets.
Other Businesses 2 2
HQ 255 280 Geographical information by market € in millions
Total 1,095 1,220
Net sales (third parties) Non-current assets
Year ending Year ending
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
Impairment losses and reversals of impairment losses € in millions
EMEA 8,450 8,567 3,095 3,238
Year ending Year ending North America 5,225 6,398 1,216 1,367
Dec. 31, 2023 Dec. 31, 2022 Greater China 3,208 3,195 936 1,136
Reportable segments 77 126 Asia-Pacific 2,254 2,241 722 809
Other Businesses – 1 Latin America 2,291 2,109 165 160
HQ (2) 23 Total 21,427 22,511 6,134 6,710
Total 75 150

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Geographical information by country € in millions In 2023, the following changes in financial liabilities impacted the net cash used in financing activities:

Net sales (third parties) Non-current assets Impact of change in financial liabilities on net cash used in financing activities € in millions
Year ending Year ending
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 Non-cash effects
Net Transfer
Germany, Europe 1,345 1,558 1,353 1,367 (payments) / IFRS 16 within Effect of
proceeds in lease Fair value financial exchange
USA, North America 4,819 5,959 1,120 1,269 Jan. 1, 2023 the period1 obligations adjustments liabilities rates Other1 Dec. 31, 2023
Short-term
527 (522) – – 519 – 25 549
borrowings
Long-term
2,946 (50) – – (519) – 52 2,430
borrowings
37 Additional cash flow information Lease liabilities 2,986 (689) 292 – – (91) 86 2,584
Total 6,459 (1,260) 292 – – (91) 163 5,564

In 2023, net cash generated from operating activities compared to the prior year results was primarily due 1 Since the 2023 financial year, interest payments and interest expenses have been reported separately in the reconciliation of financial liabilities in 'Net payments/receipts in the period' and
'Other'. The reconciliation for 2022 has been adjusted accordingly.
to a decrease in operating working capital requirements. In particular the reduction in inventories
contributed to the net cash generated.

The net cash used in investing activities in 2023 is mainly related to an increase in spending on intangible
Impact of change in financial liabilities on net cash used in financing activities € in millions
assets and property, plant, and equipment such as investments in the furnishing and fitting of own retail
stores, in new office buildings and IT systems. Non-cash effects
Net
(payments) / IFRS 16 Transfer to Effect of
Net cash used in financing activities mainly related to the repayment of the convertible bond, repayments proceeds in lease Fair value liabilties exchange
Jan. 1, 2022 the period1 obligations adjustments held for sale rates Other1 Dec. 31, 2022
of lease liabilities, interests paid, and dividend paid to shareholders of adidas AG.
Short-term
29 (39) – – 513 – 24 527
borrowings
The effects resulting from the application of IAS 29 ‘Accounting in hyperinflationary countries’ are Long-term
2,466 969 – – (513) – 24 2,946
recorded below the cash flow from financing activities in the line ‘IAS 29 hyperinflation effects in operating, borrowings
Lease liabilities 2,836 (719) 795 – – (9) 83 2,986
investing and financing cashflows’. The net effect in 2023 amounts to € 82 million (2022: € 64 million). The
Total 5,331 210 795 – – (9) 131 6,459
previous year’s value of cash and cash equivalents changed by € 0 million (2022: € 20 million) due to the
indexation of the opening balance of cash and cash equivalents in Argentina and Turkey.
1 Since the 2023 financial year, interest payments and interest expenses have been reported separately in the reconciliation of financial liabilities in 'Net payments/proceeds in the period' and
'Other'. The reconciliation for 2022 has been adjusted accordingly.

Net cash used in discontinued operations € in millions

Year ending Year ending

Dec. 31, 2023 Dec. 31, 2022
Net cash used in operating activities
Net cash used in investing activities
–
–
(85)
–
38 Other financial commitments and contingencies
Net cash used in financing activities – (6)
adidas has other financial commitments for promotion and advertising contracts, which mature as follows:
Net cash used in discontinued operations – (91)

Financial commitments for promotion and advertising € in millions

Dec. 31, 2023 Dec. 31, 2022

Within 1 year 1,291 1,251
Between 1 and 5 years 3,620 2,974
After 5 years 1,507 717
Total 6,418 4,942

Commitments with respect to promotion and advertising contracts maturing after five years have
remaining terms of up to 12 years from December 31, 2023. The increase compared to the prior year
mainly relates to the prolongation of major sports marketing contracts.

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adidas has other financial commitments for leasing and other rental obligations which mature as follows: an outflow of resources. Therefore, a provision was not recognized in the consolidated statement of
financial position.
Financial commitments for other contracts € in millions
In connection with the financial irregularities of Reebok India Company in 2012, various legal uncertainties
Dec. 31,2023 Dec. 31,2022 were identified. At this stage, the respective ultimate risk cannot be determined conclusively. However,
Within 1 year 46 80 based on opinions obtained from external counsel and internal assessments, Management assumes that
Between 1 and 5 years 117 197 the possibility of any cash outflow in settlement is remote. Therefore, no material negative influence on
After 5 years 51 79 the assets, liabilities, financial position, and profit of the company is expected.
Total 214 356
In connection with the termination of the Yeezy partnership, adidas has initiated arbitration proceedings
against Kanye West and entities controlled by him (Defendants) claiming, among others, damages. In this
The contracts regarding these leases with expiration dates of between one and ten years partly include context, Defendants filed certain counterclaims against adidas. Management currently believes that these
renewal options and price adjustment clauses. counterclaims will not result in any cash outflow; therefore, no material negative influence on the assets,
liabilities, financial position, and profit or loss of the Group is expected.
Service arrangements
adidas has outsourced certain logistics and information technology functions, for which it has entered into In 2023, plaintiff Hampton Roads Shipping Association – International Longshoremen’s Association Funds
long-term contracts. Financial commitments under these contracts mature as follows: –, an entity which had purchased adidas American Depository Receipts (ADRs) representing adidas AG
shares, initiated a securities class action at the US District Court in Portland (Oregon).
Financial commitments for service arrangements € in millions
The plaintiff alleges that the company “recklessly or intentionally made false or misleading statements”
Dec. 31, 2023 Dec. 31, 2022 regarding risks arising from the business partnership with its former partner Kanye West and/or the
Within 1 year 364 397 company’s public commitments to diversity and inclusion by allegedly failing to disclose certain
Between 1 and 5 years 673 481 statements and other misconduct of Kanye West.
After 5 years 417 3
Total 1,454 881 With respect to loss causation and damages, plaintiff points to specific share price drops for adidas ADRs
that it connects to adidas’s alleged misstatements or omissions. Also, on behalf of other adidas ADR
holders, plaintiff seeks monetary compensation for damages suffered from price drops of adidas ADRs.
The increase compared to the prior year mainly relates to an obligation entered into in connection with The proceedings are at an early stage and a concrete amount of damage is not yet specified.
logistics services.
The company rejects these allegations in full and filed a motion to dismiss in February 2024. Management
Contingent liabilities believes that the complaint will not have any material influence on the assets, liabilities, financial position
As of December 31, 2023, contingent liabilities exist in connection with guarantees from leases in the and profit or loss of the company.
amount of € 62 million. These mainly relate to the Reebok business and could not be terminated upon its
sale.
39 Related party disclosures
Litigation and other legal risks
The company is currently engaged in various lawsuits resulting from the ordinary course of business, According to the definitions of IAS 24 ’Related Party Disclosures,’ the Supervisory Board and the Executive
mainly in connection with commercial and partnership agreements as well as intellectual property rights. Board of adidas AG have been identified as related parties who receive compensation essentially in
The risks triggered by these lawsuits are covered by provisions if and to the extent a reliable estimate of connection with their function as key management personnel. These consolidated financial statements
the company’s potential liability can be made. In the opinion of Management, the ultimate liabilities contain detailed information about the compensation of the Supervisory Board and the Executive Board of
resulting from such claims will not materially affect the assets, liabilities, financial position and profit or adidas AG. ► SEE NOTE 40
loss of the company. ► SEE NOTE 18
In addition, a brand ambassador agreement was in place between adidas and the Supervisory Board
The company is in dispute with the local revenue authorities in South Africa (SARS) with regard to the member Jackie Joyner-Kersee. For her services under this agreement, Jackie Joyner-Kersee in 2023
customs value of imported products. In June 2018, SARS issued a ruling claiming a customs payment received a fixed compensation of € 0.2 million (2022: € 0.1 million). As of the reporting date, there were no
including interest and penalties for the years 2007 to 2013 totaling ZAR 1,871 million (€ 92 million). adidas outstanding balances in this context.
has applied for a suspension of the payment demand and in 2019 instituted legal action against the
decision before the High Court in South Africa. In case the court rules in favor of SARS, adidas intends to Members of the Executive Board and Supervisory Board and their close family members are free to buy or
appeal the decision at the Supreme Court of South Africa. Based on external legal opinions, Management sell shares of the Company on the market. The shares held by this group of persons are regularly entitled
currently believes that it is more likely than not that the claim made by SARS will eventually not result in to dividends, so that the dividend, as resolved by the 2023 Annual General Meeting, was paid out per share
held to these persons in 2023. The employee representatives on the Supervisory Board are also entitled to

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participate in the adidas AG employee stock purchase program. Shares are purchased at a discount of 15% 40 Other information
on the same terms as for other employees. Participants who hold their self-acquired shares for at least
one year will subsequently receive one share for every six shares held without additional payment,
Employees
provided they are still adidas employees at that time. ► SEE NOTE 25
The average numbers of employees are as follows:

Members of the Executive Board and Supervisory Board may purchase products from the Company in the
Employees
ordinary course of business.
Year ending Year ending
In addition to their compensation for their Supervisory Board activities, the employee representatives on Dec. 31, 2023 Dec. 31, 2022
the Supervisory Board continued to receive salaries under their normal employment contracts. These Own retail 30,839 31,698
were not influenced by their Supervisory Board activities. Sales 2,874 3,204
Logistics 7,647 8,530
A schedule of the adidas AG subsidiaries included in the consolidated financial statements is shown in Marketing 4,553 4,742
Attachment I to the notes to the consolidated financial statements. Balances and transactions between the Central administration 5,093 5,287
Company and its subsidiaries that are related parties have been eliminated in consolidation and are not Production 479 520
presented in these Notes. ► SEE SHAREHOLDINGS Research and development 993 1,051
Information technology 5,009 4,810
In addition, adidas Pension Trust e.V., a registered association, is regarded as a related party. Based on a Total 57,485 59,842
Contractual Trust Arrangement, adidas Pension Trust e.V. manages the plan assets in the form of an
administrative trust to fund and protect part of the pension obligations of adidas AG. Employees, senior
executives, and members of the Executive Board of adidas AG can be members of the registered
Accountant service fees for the auditor of the financial statements
association. adidas AG has the right to claim a refund of pension payments from adidas Pension Trust e.V.
The expenses for the audit fees comprise the expenses of adidas AG, Herzogenaurach.
under specific contractually agreed conditions. As of December 31, 2023, adidas Pension Trust e. V. held
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft was elected, starting 2023, to carry out
plan assets of € 368.2 million (2022: € 331.7 million) in trust for adidas AG. In 2023, adidas AG made lease
the audit procedures.
payments of € 7.0 million (2022: € 6.3 million) to adidas Pension Trust e.V. As of December 31, 2023, there
were outstanding liabilities to adidas Pension Trust e.V. in the amount of € 0.7 million (2022: € 0 million).
Fees € in millions
There were no material outstanding receivables from adidas Pension Trust e.V. as of December 31, 2023
(2022: € 0.1 million). ► SEE NOTE 23 2023
Audit services 2
The non-profit foundation adidas Stiftung, Herzogenaurach, established in 2023, together with its
Other confirmation services 1
subsidiary (collectively ‘the foundation’), is also considered a related party of adidas AG. In 2023, adidas AG
Tax consultancy services –
contributed a total amount of € 1.3 million to the foundation's endowment capital and its other assets for
Other services –
the permanent and sustainable fulfilment of the foundation's purpose.
Sum 3

In addition, as part of a donation agreement, adidas AG has committed to make a donation in a total
amount of € 115.3 million over several years to the foundation. This amount was outstanding in full as of
Expenses for the audit fees of PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft were
December 31, 2023 and recognized as an other liability. Furthermore, there is a service agreement for the
mainly related to the audits of both the consolidated financial statements and the financial statements of
temporary provision of certain services by adidas AG in 2024, for which remuneration of around
adidas AG, the review of essential components of the consolidated interim financial statements as of June
€ 0.3 million was agreed.
30, 2023, as well as the audit of the financial statements of its subsidiary, adidas CDC Immobilieninvest
GmbH.

Other confirmation services relate to confirmation services provided for by law or contract, such as the
audit of the non-financial statement, the audit of the project management and the project methodology of
the new ERP system and other contractually agreed confirmation services.

Compensation of the Supervisory Board and the Executive Board of adidas AG

Supervisory Board
Pursuant to the Articles of Association of adidas AG, the Supervisory Board members’ total annual
payment, including attendance fees, amounted to € 2.8 million (2022: € 2.8 million).

Members of the Supervisory Board were not granted any loans or advance payments in 2023.

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The consolidated financial statements contain additional information on an existing brand ambassador Provisions for pension entitlements have been created for the former members of the Executive Board
agreement between adidas and the supervisory board member Jackie Joyner-Kersee. ► SEE NOTE 39 who resigned on or before December 31, 2005, and their surviving dependents, in an amount of
€ 43.6 million in total as at December 31, 2023 before offsetting with the assets of the ‘adidas Pension
Executive Board Trust e.V.’ (prior year: € 28.6 million). There are pension commitments towards former Executive Board
In 2023, the total compensation of the members of the Executive Board amounted to € 40.3 million members who resigned after December 31, 2005, which are covered by a pension fund or a pension fund in
(2022: € 22.0 million), € 12.3 million thereof related to short-term benefits (2022: € 6.5 million). The short- combination with a reinsured pension trust fund. From this, indirect obligations amounting to
term benefits comprise the one-year Performance Bonus, the performance criteria of which include € 38.1 million (prior year: € 35.0 million) arise for which no provisions were created due to financing
currency neutral sales growth, operating margin and individual performance criteria. For share-based through the pension fund and pension trust fund. Provisions for pension entitlements have been created
payments, expenses amounting to € 11.3 million (2022: € 4.7 million) were recognized in the 2023 financial for two former members of the Executive Board who resigned on or after December 31, 2019, in an
year. Of the total compensation, an overall amount of € 15.5 million is attributable to severance payments, amount of € 3.4 million (2022: 3.1 million).
settlement payments and amounts for non-competition clauses. In the previous year, no share-based
payments were granted. Post-employment benefits (costs for accrued pension entitlements for members Companies opting for exemption under § 264 (3) HGB
of the Executive Board) totaled € 1.2 million in 2023 (2022: € 3.5 million). As of December 31, 2023, the The subsidiary adidas CDC Immobilieninvest GmbH, Herzogenaurach, is opting for exemption under
present value of the pension commitments for members of the Executive Board in office during the § 264 (3) HGB.
financial year amounted to € 11.2 million in 2023 (2022: € 15.3 million).

As of December 31, 2023, there are provisions for short-term variable compensation components for
members of the Executive Board amounting to € 4.5 million. There were no provisions in the 2022 financial
41 Information relating to the German coperating governance code
year.
Information pursuant to § 161 German Stock Corporation Act (Aktiengesetz – AktG)
The current members of the Executive Board were not granted any loans or advance payments in 2023. In December 2023, the Executive Board and Supervisory Board of adidas AG issued an updated Declaration
of Compliance in accordance with § 161 AktG and made it permanently available to the shareholders. The
Total compensation of the members of the Supervisory Board and the Executive Board pursuant to §314 (1) in conjunction full text of the Declaration of Compliance is available on the company’s corporate website.
with §315e HGB
The total compensation of the members of the Executive Board in the 2023 financial year amounted to
€ 23.8 million (2022: € 6.5 million). Thereof, € 10.9 million (2022: € 6.5 million) related to short-term 42 Events after the balance sheet date
benefits. Moreover, Executive Board members appointed after January 1, 2021, are not granted benefits
under the company pension scheme. Instead, they receive a so-called pension allowance in the form of an At the start of the 2024 financial year, the Group's internal reporting structure was adjusted for
adequate lump-sum amount, which is directly paid out to the Executive Board members annually. In this management purposes.
context, Bjørn Gulden received € 1.1 million and Arthur Hoeld € 0.3 million in the 2023 financial year. For
the 2023 financial year, the Executive Board was granted an LTIP bonus amounting to € 7.6 million. In 2022 Since January 1, 2024, the EMEA market has been divided into two separate markets, Europe and
no LTIP bonus was granted. Any LTIP Bonus granted must be invested in full in the acquisition of adidas Emerging Markets. Russia is allocated to the ‘other businesses’ as it is no longer monitored separately by
AG shares after deduction of taxes and social security contributions. These shares are subject to a lock-up the chief operating decision-makers due to the discontinuation of business activities. In addition, the Asia-
period which ends upon expiry of the fourth financial year after the performance year. The LTIP payout Pacific market has been split into two separate markets, Japan and South Korea, and Southeast Asia and
amount is considered earned only after expiry of the lock-up period and only then can the Executive Board Pacific have been merged with the new Emerging Markets market. The North America, Latin America and
members dispose of the shares at their own discretion. By contrast, the amount deducted for income tax China markets remain unchanged.
and social security contributions is already fully earned at the time of payout following the adoption of the
consolidated financial statements by the Supervisory Board. Moreover, Bjørn Gulden was granted 11,886 In line with this reporting structure of the company for management purposes by market and in
adidas AG shares as reimbursement for the variable compensation forfeited at his former employer which accordance with the definition of IFRS 8 'Operating Segments', seven operating segments have thus been
are subject to a four-year lock-up period. The gross amount to be matched by the company in this regard identified as of January 1, 2024: Europe, Emerging Markets, North America, China, Latin America, Japan,
was € 3.9 million. The increase of total compensation in comparison to the previous year is mainly and South Korea. Due to the small size of the two operating segments Japan and South Korea, they are
attributable to the fact that the Executive Board members were neither granted a Performance Bonus nor combined for external segment reporting as Japan/South Korea.
an LTIP Bonus in 2022.
Due to the change in the operating segments and the associated groups of cash-generating units, both a
The total annual compensation to be paid to the members of the Supervisory Board in accordance with the reallocation of goodwill and an impairment test of goodwill were carried out as at January 1, 2024. There
Articles of Association of adidas AG, including attendance fees, totaled € 2.8 million (2022: € 2.8 million). was no need for impairment in this context.

Former members of the Executive Board and their surviving dependents received a total of € 21.9 million No other company-specific subsequent events are known that might have a material influence on the
in benefits in the 2023 financial year (2022: € 16.7 million). assets, liabilities, financial position, and profit or loss of the company.

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Date of preparation
The Executive Board of adidas AG prepared and approved the consolidated financial statements for
Shareholdings
submission to the Supervisory Board on February 20, 2024. It is the Supervisory Board’s task to examine
the consolidated financial statements and give their approval.
Shareholdings of adidas AG, Herzogenaurach, as at December 31, 2023
Herzogenaurach, February 20, 2024 Share in capital
Company and domicile held by 1 in %
Germany
The Executive Board of adidas AG
1 adidas Beteiligungsgesellschaft mbH 2 Herzogenaurach (Germany) directly 100
2 adidas CDC Immobilieninvest GmbH Herzogenaurach (Germany) 11 100
3 adidas Insurance & Risk Consultants GmbH 2 Herzogenaurach (Germany) directly 100
Europe (incl. Middle East and Africa)
4 adidas International Trading AG Lucerne (Switzerland) 9 100
5 adidas sport gmbh Lucerne (Switzerland) directly 100
6 adidas Austria GmbH Klagenfurt (Austria) directly 100
7 runtastic GmbH Pasching (Austria) 9 100
BJØRN GULDEN ARTHUR HOELD HARM OHLMEYER 8 adidas France S.a.r.l. Strasbourg (France) directly 100
CHIEF EXECUTIVE OFFICER, GLOBAL SALES CHIEF FINANCIAL OFFICER 9 adidas International B.V. Amsterdam (Netherlands) directly 93.97
GLOBAL BRANDS 8 6.03
10 adidas International Marketing B.V. Amsterdam (Netherlands) 9 100
11 adidas International Property Holding B.V. Amsterdam (Netherlands) 68 100
12 adidas Infrastructure Holding B.V. Amsterdam (Netherlands) 9 100
13 adidas Benelux B.V. Amsterdam (Netherlands) directly 100
14 adidas Ventures B.V. Amsterdam (Netherlands) 9 100
MICHELLE ROBERTSON MARTIN SHANKLAND 15 adidas (UK) Limited Stockport (Great Britain) 9 100

GLOBAL OPERATIONS 16 Trafford Park DC Limited Stockport (Great Britain) 12 100

GLOBAL HUMAN RESOURCES,
17 adidas Pensions Management Limited Stockport (Great Britain) 15 100
PEOPLE AND CULTURE
18 adidas (Ireland) Limited Kildare (Ireland) 9 100
19 adidas International Re DAC Dublin (Ireland) 9 100
20 adidas España S.A.U. Zaragoza (Spain) 1 100
21 adidas Italy S.p.A. Monza (Italy) 9 100
22 adidas Portugal - Artigos de Desporto, S.A. Lisbon (Portugal) 9 100
23 adidas Business Services, Lda. Moreira da Maia (Portugal) 9 98
directly 2
24 adidas Norge AS Oslo (Norway) directly 100
25 adidas Sverige Aktiebolag Solna (Sweden) directly 100
26 adidas Suomi Oy Vantaa (Finland) 9 100
27 adidas Danmark A/S Them (Denmark) 9 100
28 adidas CR s.r.o. Prague (Czech Republic) directly 100
29 adidas Budapest Kft. Budapest (Hungary) directly 100
30 adidas Bulgaria EAD Sofia (Bulgaria) directly 100
31 LLC "adidas, Ltd." Moscow (Russia) directly 100
32 adidas Poland Sp. z o.o. Warsaw (Poland) directly 100
33 adidas Romania S.R.L. Bucharest (Romania) 9 100
34 adidas Baltics SIA Riga (Latvia) 9 100
35 adidas Slovakia s.r.o. Bratislava (Slovak Republic) directly 100
36 adidas Trgovina d.o.o. Ljubljana (Slovenia) directly 100
37 SC 'adidas-Ukraine' Kiev (Ukraine) directly 100
Almaty (Republic of
38 adidas LLP directly 100
Kazakhstan)
39 adidas Serbia DOO Beograd Belgrade (Serbia) 9 100
40 adidas Croatia d.o.o. Zagreb (Croatia) 9 100
41 adidas Hellas Single Member S.A. Athens (Greece) directly 100
42 adidas (Cyprus) Limited Limassol (Cyprus) directly 100
43 adidas Spor Malzemeleri Satis ve Pazarlama A.S. Istanbul (Turkey) 9 100
44 adidas Emerging Markets L.L.C Dubai (United Arab Emirates) indirectly 51
8 49

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Shareholdings of adidas AG, Herzogenaurach, as at December 31, 2023 Shareholdings of adidas AG, Herzogenaurach, as at December 31, 2023
Share in capital Share in capital
Company and domicile held by 1 in % Company and domicile held by 1 in %
45 adidas Emerging Markets FZE Dubai (United Arab Emirates) 9 100 85 adidas (Thailand) Co., Ltd. Bangkok (Thailand) directly 100
46 adidas Levant Limited Dubai (United Arab Emirates) 45 100 86 adidas Australia Pty Limited Mulgrave (Australia) 9 100
47 adidas Levant Limited - Jordan Amman (Jordan) 46 100 87 adidas New Zealand Limited Auckland (New Zealand) directly 100
48 adidas Imports & Exports Ltd. Cairo (Egypt) 49 99.98 88 adidas Vietnam Company Limited Ho Chi Minh City (Vietnam) 9 100
9 0.02 adidas (Mauritius) Limited (formerly: Reebok (Mauritius)
89 Port Louis (Mauritius) 58 100
49 adidas Sporting Goods Ltd. Cairo (Egypt) 9 99.81 Company Limited)

directly 0.19 Latin America

50 adidas Israel Ltd. Holon (Israel) 9 85 90 adidas Argentina S.A. Buenos Aires (Argentina) 9 76.96

51 adidas Morocco LLC Casablanca (Morocco) directly 100 1 23.04

52 adidas (South Africa) (Pty) Ltd. Cape Town (South Africa) directly 100 Refop de Argentina S.A. (formerly: Reebok Argentina
91 Buenos Aires (Argentina) directly 96.25
S.A.)
53 adidas Arabia Trading Riyadh (Saudi Arabia) directly 100
9 3.75
North America
92 adidas do Brasil Ltda. São Paulo (Brazil) 1 100
54 adidas North America, Inc. Wilmington, Delaware (USA) 9 100
93 adidas Franchise Brasil Servicos Ltda. São Paulo (Brazil) 92 99.99
55 adidas America, Inc. Portland, Oregon (USA) 54 100
directly 0.01
56 adidas International, Inc. Portland, Oregon (USA) 54 100
REFOP Produtos Esportivos Brasil Ltda. (formerly:
57 adidas Team, Inc. Des Moines, Iowa (USA) 54 100 94 São Paulo (Brazil) 9 100
Reebok Produtos Esportivos Brasil Ltda.)
58 adidas Holdings LLC Wilmington, Delaware (USA) 54 69 95 adidas Chile Limitada Santiago de Chile (Chile) directly 99
62 31 3 1
59 adidas Indy, LLC Wilmington, Delaware (USA) 54 100 96 adidas Colombia Ltda. Bogotá (Colombia) directly 100
Marina Del Rey, California 97 adidas Perú S.A.C. Lima (Peru) directly 99
60 Stone Age Equipment, Inc. 55 100
(USA)
95 1
North Charleston, South
61 Spartanburg DC, Inc. 55 100 98 adidas de Mexico, S.A. de C.V. Mexico City (Mexico) directly 100
Carolina (USA)
62 adidas Pluto Corporation Wilmington, Delaware (USA) 9 100 99 adidas Industrial, S.A. de C.V. Mexico City (Mexico) directly 100
63 adidas Canada Limited Woodbridge, Ontario (Canada) 9 100 Refop de Mexico, S.A. de C.V. (formerly: Reebok de
100 Mexico City (Mexico) directly 100
Mexico, S.A. de C.V.)
Asia-Pacific
101 adidas Latin America, S.A. Panama City (Panama) directly 100
64 adidas Sourcing Limited Hong Kong (China) 4 100
102 Concept Sport, S.A. Panama City (Panama) 9 100
65 adidas Hong Kong Limited Hong Kong (China) 1 100
103 3 Stripes S.A. Montevideo (Uruguay) directly 100
adidas Trading (Far East) Limited (formerly: Reebok
66 Hong Kong (China) 54 100 104 Tafibal S.A. Montevideo (Uruguay) directly 100
Trading (Far East) Limited)
67 adidas (Suzhou) Co., Ltd. Suzhou (China) 1 100 105 Raelit S.A. Montevideo (Uruguay) directly 100

68 adidas Sports (China) Co., Ltd. Shanghai (China) 1 100 106 adidas Sourcing Honduras, S.A. San Pedro Sula (Honduras) 54 100

69 adidas (China) Ltd. Shanghai (China) 9 100 107 adisport Corporation San Juan (Puerto Rico) 9 100

70 adidas Sports Goods (Shanghai) Co., Ltd Shanghai (China) 69 100 108 adidas Sourcing El Salvador, S.A. de C.V. Antiguo Cuscatlán (El Salvador) 9 99.95

71 adidas Logistics (Tianjin) Co., Ltd. Tianjin (China) 12 100 directly 0.05

72 adidas Business Services (Dalian) Limited Dalian (China) 9 100 1 The number refers to the number of the company.
73 adidas Japan K.K. Tokyo (Japan) 9 100 2 Profit and loss transfer agreement.

74 adidas Korea LLC. Seoul (Korea) directly 100

75 adidas Korea Technical Services Limited Busan (Korea) 64 100
76 adidas India Private Limited New Delhi (India) directly 10.67
9 89.33
77 adidas India Marketing Private Limited New Delhi (India) 76 98.62
9 1
directly 0.37
78 adidas Technical Services Private Limited Gurgaon (India) 64 100
79 Refop India Company (formerly: Reebok India Company) Gurgaon (India) 58 99.03
89 0.91
55 0.07
80 PT adidas Indonesia Jakarta (Indonesia) 9 99.67
directly 0.33
81 adidas (Malaysia) Sdn. Bhd. Petaling Jaya (Malaysia) directly 60
9 40
82 ADIDAS PHILIPPINES, INC. Taguig City (Philippines) directly 100
83 adidas Singapore Pte Ltd Singapore (Singapore) directly 100
84 adidas Taiwan Limited Taipei 9 100

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Responsibility Statement Copy of the Auditor’s Report

To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated Based on the final results of our audit we issued the following unqualified auditor’s report dated
financial statements give a true and fair view of the assets, liabilities, financial position, and profit or loss February 23, 2024:
of the Group, and the Group Management Report, which has been combined with the Management Report
of adidas AG, includes a fair review of the development and performance of the business and the position
of the Group, together with a description of the material opportunities and risks associated with the
“Independent auditor’s report”
expected development of the Group.
To adidas AG, Herzogenaurach
Herzogenaurach, February 20, 2024

Report on the audit of the Consolidated Financial Statements and of the Group
Management
Audit Opinions
BJØRN GULDEN
We have audited the consolidated financial statements of adidas AG, Herzogenaurach, and its subsidiaries
CHIEF EXECUTIVE OFFICER,
GLOBAL BRANDS (the Group), which comprise the consolidated statement of financial position as at 31 December 2023, and
the consolidated statement of comprehensive income, consolidated statement of profit or loss,
consolidated statement of changes in equity and consolidated statement of cash flows for the financial
year from 1 January to 31 December 2023, and notes to the consolidated financial statements, including
material accounting policy information. In addition, we have audited the group management report of
adidas AG, which is combined with the Company’s management report, for the financial year from
1 January to 31 December 2023. In accordance with the German legal requirements, we have not audited
the content of those parts of the group management report listed in the “Other Information” section of our
ARTHUR HOELD HARM OHLMEYER
auditor’s report.
GLOBAL SALES CHIEF FINANCIAL OFFICER

In our opinion, on the basis of the knowledge obtained in the audit,

─ the accompanying consolidated financial statements comply, in all material respects, with the IFRSs as
adopted by the EU and the additional requirements of German commercial law pursuant to § [Article]
315e Abs. [paragraph] 1 HGB [Handelsgesetzbuch: German Commercial Code] and, in compliance with
these requirements, give a true and fair view of the assets, liabilities, and financial position of the
MICHELLE ROBERTSON MARTIN SHANKLAND Group as at 31 December 2023, and of its financial performance for the financial year from 1 January
GLOBAL HUMAN RESOURCES, GLOBAL OPERATIONS to 31 December 2023, and
PEOPLE AND CULTURE
─ the accompanying group management report as a whole provides an appropriate view of the Group’s
position. In all material respects, this group management report is consistent with the consolidated
financial statements, complies with German legal requirements and appropriately presents the
opportunities and risks of future development. Our audit opinion on the group management report
does not cover the content of those parts of the group management report listed in the “Other
Information” section of our auditor’s report.

Pursuant to § [Article] 322 Abs. 3 Satz [sentence] 1 HGB [Handelsgesetzbuch: German Commercial Code],
we declare that our audit has not led to any reservations relating to the legal compliance of the
consolidated financial statements and of the group management report.

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Basis for the Audit Opinions Net realizable values are calculated based on discretionary planning assumptions as to the sales
We conducted our audit of the consolidated financial statements and of the group management report in proceeds realizable in the ordinary course of business less necessary selling costs, which are derived
accordance with § 317 HGB and the EU Audit Regulation (No. 537/2014, referred to subsequently as on the basis of historical observable data. In particular, the age (seasonality) of the inventories and the
“EU Audit Regulation”) in compliance with German Generally Accepted Standards for Financial Statement selected sales channel to be used in future sales are significant. The impairment test resulted in a
Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). write-down on inventories as of the balance sheet date amounting to EUR 317 million in total.
We performed the audit of the consolidated financial statements in supplementary compliance with the
International Standards on Auditing (ISAs). Our responsibilities under those requirements, principles and The outcome of this valuation is dependent to a large extent on the estimates made by the executive
standards are further described in the “Auditor’s Responsibilities for the Audit of the Consolidated directors with respect to the inputs for the future net realizable values and other factors having an
Financial Statements and of the Group Management Report“ section of our auditor’s report. We are influence on value, and is therefore subject to considerable uncertainty. Against this background and
independent of the group entities in accordance with the requirements of European law and German due to the complex nature of the valuation, this matter was of particular significance in the context of
commercial and professional law, and we have fulfilled our other German professional responsibilities in our audit.
accordance with these requirements. In addition, in accordance with Article 10 (2) point (f) of the EU Audit
Regulation, we declare that we have not provided non-audit services prohibited under Article 5 (1) of the 2. As part of our audit, we analyzed among other things the impairment testing process and assessed
EU Audit Regulation. We believe that the audit evidence we have obtained is sufficient and appropriate to identified controls with respect to implementation, appropriateness and operating effectiveness.
provide a basis for our audit opinions on the consolidated financial statements and on the group Furthermore, we evaluated the key inputs used to calculate net realizable values based on historical
management report. data and our understanding of the business. We verified the mathematical accuracy of the calculation
logic used in the impairment test.
Key Audit Matters in the Audit of the Consolidated Financial Statements
We were able to satisfy ourselves that the estimates and assumptions made by the executive directors
Key audit matters are those matters that, in our professional judgment, were of most significance in our
in connection with the appropriate measurement of inventories were sufficiently substantiated and
audit of the consolidated financial statements for the financial year from 1 January to 31 December 2023.
documented.
These matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our audit opinion thereon; we do not provide a separate audit opinion on these
3. The Company’s disclosures relating to the accounting policies applied with respect to the "inventories"
matters.
line item are contained in section 2 of the notes to the consolidated financial statements "Summary of
significant accounting policies". In addition, the disclosures on "inventories" are contained in section 7,
In our view, the matters of most significance in our audit were as follows:
"Inventories".

1. Recoverability of inventories
2. Recognition of revenue, taking into account expected returns
2. Recognition of revenue, taking into account expected returns
1. In the Company's consolidated financial statements, revenues amounting to EUR 21,427 million are
Our presentation of these key audit matters has been structured in each case as follows:
reported.

1. Matter and issue

Revenue is recognized from the sale of goods in the "Wholesale", "E-commerce" and "Own retail" sales
2. Audit approach and findings channels if the Company satisfies a performance obligation by transferring a specified asset to a
customer. An asset is deemed to have been transferred if the customer obtains control of that asset.
3. Reference to further information
Revenue is recognized in the amount to which the Company has a claim when the power to control an
Hereinafter we present the key audit matters: asset is transferred.

1. Recoverability of inventories Customers of the Company have the option, subject to certain conditions, of exchanging or returning
1. In the Company's consolidated statement of financial position, inventories amounting to goods in exchange for a credit. The amounts regarding expected returns are estimated by the executive
EUR 4,525 million (25% of total assets) are reported. directors based on experiences with regard to historic return rates and accrued for a return provision
against revenues.
Inventories are initially recognized at cost, taking into account directly attributable incidental acquisition
costs and cost reductions. The carrying amount of recognized inventories must be reduced if the The asset embodying the right to receive goods returned by the customer is measured at the carrying
inventories are damaged or (partially) obsolete and the expected net realizable values are less than the amount of the respective inventories less settlement costs.
costs.
The revenues have a significant influence on the Group's net profit or loss for the year and represent
At the balance sheet date, the costs are compared against the net realizable values, which are one of the most significant performance indicators for adidas. Due to the large transaction volume with
determined by deducting the directly attributable selling costs to be incurred prior to sale of the respect to the sale of merchandise in three different sales channels and the potential risk in general of
inventories from the sales proceeds expected to be generated. notional revenues and the uncertainty with regard to estimates of expected returns, in our view the

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

existence and accrual of revenues from the sale of merchandise were of particular significance in the In connection with our audit, our responsibility is to read the other information mentioned above and, in so
context of our audit. doing, to consider whether the other information

2. With respect to the audit of the existence and accrual of revenue, we first assessed the design, ─ is materially inconsistent with the annual financial statements, with the management report
implementation and operating effectiveness of internal controls, including the functioning of IT-based disclosures audited in terms of content or with our knowledge obtained in the audit, or
controls with respect to outgoing goods and the acceptance of goods, invoices and the payment
settlement. In addition, we examined the presentation of revenue recognition in the Group-wide ─ otherwise appears to be materially misstated.
accounting policy to assess whether it complied with IFRS 15.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
Furthermore, in the context of substantive audit procedures, we obtained evidence (in particular information, we are required to report that fact. We have nothing to report in this regard.
delivery certificates, invoices and receipts of payments) of the existence and accrual of revenue in order
to assess whether the recognized and accrues revenues were based on a corresponding shipment or Responsibilities of the Executive Directors and the Supervisory Board for the Consolidated Financial
transfer of goods. In addition, we evaluated the mathematical correctness of the executive directors' Statements and the Group Management Report
calculation of expected returns. We compared the expected returns against historical, sales channel- The executive directors are responsible for the preparation of the consolidated financial statements that
specific return rates and the returned merchandise recorded in the financial accounting records. comply, in all material respects, with IFRSs as adopted by the EU and the additional requirements of
German commercial law pursuant to § 315e Abs. 1 HGB and that the consolidated financial statements, in
We were able to satisfy ourselves that the estimates and assumptions made by the executive directors compliance with these requirements, give a true and fair view of the assets, liabilities, financial position,
in connection with the appropriate accounting treatment of the revenue were sufficiently substantiated and financial performance of the Group. In addition, the executive directors are responsible for such
and documented. internal control as they have determined necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud (i.e., fraudulent financial
3. The Company’s disclosures relating to the accounting policies applied with respect to the recognition of reporting and misappropriation of assets) or error.
revenue from merchandise are contained in section 2 of the notes to the consolidated financial
statements "Summary of significant accounting policies". In preparing the consolidated financial statements, the executive directors are responsible for assessing
the Group’s ability to continue as a going concern. They also have the responsibility for disclosing, as
Other Information applicable, matters related to going concern. In addition, they are responsible for financial reporting based
The executive directors are responsible for the other information. The other information comprises the on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease
following non-audited parts of the group management report: operations, or there is no realistic alternative but to do so.

─ non-financial statement to comply with §§ 289b to 289e HGB and with §§ 315b to 315c HGB included in Furthermore, the executive directors are responsible for the preparation of the group management report
different places of the group management report that, as a whole, provides an appropriate view of the Group’s position and is, in all material respects,
consistent with the consolidated financial statements, complies with German legal requirements, and
─ the section “Performance KPIs to track product availability and on-time in-full delivery” of the group appropriately presents the opportunities and risks of future development. In addition, the executive
management report directors are responsible for such arrangements and measures (systems) as they have considered
necessary to enable the preparation of a group management report that is in accordance with the
─ the disclosures marked as unaudited in section “Description of the main features of the internal applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the
control and risk management system process pursuant to § 315 section 4 German Commercial Code assertions in the group management report.
(Handelsgesetzbuch – HGB)” of the group management report
The supervisory board is responsible for overseeing the Group’s financial reporting process for the
The other information comprises further preparation of the consolidated financial statements and of the group management report.

─ the statement on corporate governance pursuant to § 289f HGB and § 315d HGB Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and of the Group
Management Report
─ all remaining parts of the annual report – excluding cross-references to external information – with Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
the exception of the audited consolidated financial statements, the audited group management a whole are free from material misstatement, whether due to fraud or error, and whether the group
report and our auditor’s report management report as a whole provides an appropriate view of the Group’s position and, in all material
respects, is consistent with the consolidated financial statements and the knowledge obtained in the audit,
Our audit opinions on the annual financial statements and on the management report do not cover the complies with the German legal requirements and appropriately presents the opportunities and risks of
other information, and consequently we do not express an audit opinion or any other form of assurance future development, as well as to issue an auditor’s report that includes our audit opinions on the
conclusion thereon. consolidated financial statements and on the group management report.

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ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in particular, the significant assumptions used by the executive directors as a basis for the prospective
accordance with § 317 HGB and the EU Audit Regulation and in compliance with German Generally information, and evaluate the proper derivation of the prospective information from these
Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer assumptions. We do not express a separate audit opinion on the prospective information and on the
(IDW) and supplementary compliance with the ISAs will always detect a material misstatement. assumptions used as a basis. There is a substantial unavoidable risk that future events will differ
Misstatements can arise from fraud or error and are considered material if, individually or in the materially from the prospective information.
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements and this group management report. We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
We exercise professional judgment and maintain professional skepticism throughout the audit. We also: control that we identify during our audit.

─ Identify and assess the risks of material misstatement of the consolidated financial statements and of We also provide those charged with governance with a statement that we have complied with the relevant
the group management report, whether due to fraud or error, design and perform audit procedures independence requirements, and communicate with them all relationships and other matters that may
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
for our audit opinions. The risk of not detecting a material misstatement resulting from fraud is higher threats or safeguards applied.
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
─ Obtain an understanding of internal control relevant to the audit of the consolidated financial are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
statements and of arrangements and measures (systems) relevant to the audit of the group regulation precludes public disclosure about the matter.
management report in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an audit opinion on the effectiveness of these systems. Other legal and regulatory requirements
Report on the Assurance on the Electronic Rendering of the Consolidated Financial Statements and the
─ Evaluate the appropriateness of accounting policies used by the executive directors and the Group Management Report Prepared for Publication Purposes in Accordance with § 317 Abs. 3a HGB
reasonableness of estimates made by the executive directors and related disclosures.
Assurance Opinion
─ Conclude on the appropriateness of the executive directors’ use of the going concern basis of We have performed assurance work in accordance with § 317 Abs. 3a HGB to obtain reasonable assurance
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to as to whether the rendering of the consolidated financial statements and the group management report
events or conditions that may cast significant doubt on the Group’s ability to continue as a going (hereinafter the “ESEF documents”) contained in the electronic file adidasag-2023-12-31-de.zip (SHA256
concern. If we conclude that a material uncertainty exists, we are required to draw attention in the hash value: f7cfad6e3dd2bf8e66077ce9a17bddfa0b222f09b8b59748606b8c82dc7777da) and prepared for
auditor’s report to the related disclosures in the consolidated financial statements and in the group publication purposes complies in all material respects with the requirements of § 328 Abs. 1 HGB for the
management report or, if such disclosures are inadequate, to modify our respective audit opinions. Our electronic reporting format (“ESEF format”). In accordance with German legal requirements, this
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, assurance work extends only to the conversion of the information contained in the consolidated financial
future events or conditions may cause the Group to cease to be able to continue as a going concern. statements and the group management report into the ESEF format and therefore relates neither to the
information contained within these renderings nor to any other information contained in the electronic file
─ Evaluate the overall presentation, structure and content of the consolidated financial statements, identified above.
including the disclosures, and whether the consolidated financial statements present the underlying
transactions and events in a manner that the consolidated financial statements give a true and fair In our opinion, the rendering of the consolidated financial statements and the group management report
view of the assets, liabilities, financial position and financial performance of the Group in compliance contained in the electronic file identified above and prepared for publication purposes complies in all
with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant material respects with the requirements of § 328 Abs. 1 HGB for the electronic reporting format. Beyond
to § 315e Abs. 1 HGB. this assurance opinion and our audit opinion on the accompanying consolidated financial statements and
the accompanying group management report for the financial year from 1 January to 31 December 2023
─ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or contained in the "Report on the Audit of the Consolidated Financial Statements and on the Group
business activities within the Group to express audit opinions on the consolidated financial statements Management Report" above, we do not express any assurance opinion on the information contained within
and on the group management report. We are responsible for the direction, supervision and
these renderings or on the other information contained in the electronic file identified above.
performance of the group audit. We remain solely responsible for our audit opinions.

Basis for the Assurance Opinion

─ Evaluate the consistency of the group management report with the consolidated financial statements,
We conducted our assurance work on the rendering of the consolidated financial statements and the
its conformity with German law, and the view of the Group’s position it provides.
group management report contained in the electronic file identified above in accordance with
§ 317 Abs. 3a HGB and the IDW Assurance Standard: Assurance Work on the Electronic Rendering, of
─ Perform audit procedures on the prospective information presented by the executive directors in the
Financial Statements and Management Reports, Prepared for Publication Purposes in Accordance with
group management report. On the basis of sufficient appropriate audit evidence we evaluate, in
§ 317 Abs. 3a HGB (IDW AsS 410 (06.2022)) and the International Standard on Assurance Engagements

296 297
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

3000 (Revised). Our responsibility in accordance therewith is further described in the "Group Auditor’s Further Information pursuant to Article 10 of the EU Audit Regulation
Responsibilities for the Assurance Work on the ESEF Documents" section. Our audit firm applies the We were elected as group auditor by the annual general meeting on 12 May 2022. We were engaged by the
IDW Standard on Quality Management: Requirements for Quality Management in the Audit Firm supervisory board on 14 December 2023. We have been the group auditor of the adidas AG,
(IDW QMS 1 (09.2022)). Herzogenaurach, without interruption since the financial year 2023.

Responsibilities of the Executive Directors and the Supervisory Board for the ESEF Documents We declare that the audit opinions expressed in this auditor’s report are consistent with the additional
The executive directors of the Company are responsible for the preparation of the ESEF documents report to the audit committee pursuant to Article 11 of the EU Audit Regulation (long-form audit report).
including the electronic rendering of the consolidated financial statements and the group management
report in accordance with § 328 Abs. 1 Satz 4 Nr. [number] 1 HGB and for the tagging of the consolidated Reference to an other matter – Use of the auditor’s report
financial statements in accordance with § 328 Abs. 1 Satz 4 Nr. 2 HGB. Our auditor’s report must always be read together with the audited consolidated financial statements and
the audited group management report as well as the assured ESEF documents. The consolidated financial
In addition, the executive directors of the Company are responsible for such internal control as they have statements and the group management report converted to the ESEF format – including the versions to be
considered necessary to enable the preparation of ESEF documents that are free from material non- filed in the company register – are merely electronic renderings of the audited consolidated financial
compliance with the requirements of § 328 Abs. 1 HGB for the electronic reporting format, whether due to statements and the audited group management report and do not take their place. In particular, the
fraud or error. “Report on the Assurance on the Electronic Rendering of the Consolidated Financial Statements and the
Group Management Report Prepared for Publication Purposes in Accordance with § 317 Abs. 3a HGB” and
The supervisory board is responsible for overseeing the process for preparing the ESEF documents as our assurance opinion contained therein are to be used solely together with the assured ESEF documents
part of the financial reporting process. made available in electronic form.

Group Auditor’s Responsibilities for the Assurance Work on the ESEF Documents German public auditor responsible for the engagement
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from The German Public Auditor responsible for the engagement is Christian Landau.
material non-compliance with the requirements of § 328 Abs. 1 HGB, whether due to fraud or error. We
exercise professional judgment and maintain professional skepticism throughout the assurance work. We
also
Nuremberg, February 23, 2024
─ Identify and assess the risks of material non-compliance with the requirements of § 328 Abs. 1 HGB,
whether due to fraud or error, design and perform assurance procedures responsive to those risks, PricewaterhouseCoopers GmbH
and obtain assurance evidence that is sufficient and appropriate to provide a basis for our assurance Wirtschaftsprüfungsgesellschaft
opinion.

Rainer Kroker Christian Landau

─ Obtain an understanding of internal control relevant to the assurance work on the ESEF documents in
Wirtschaftsprüfer Wirtschaftsprüfer
order to design assurance procedures that are appropriate in the circumstances, but not for the
purpose of expressing an assurance opinion on the effectiveness of these controls.

─ Evaluate the technical validity of the ESEF documents, i.e., whether the electronic file containing the
ESEF documents meets the requirements of the Delegated Regulation (EU) 2019/815 in the version in
force at the date of the consolidated financial statements on the technical specification for this
electronic file.

─ Evaluate whether the ESEF documents provide an XHTML rendering with content equivalent to the
audited consolidated financial statements and to the audited group management report.

─ Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in
accordance with the requirements of Articles 4 and 6 of the Delegated Regulation (EU) 2019/815, in the
version in force at the date of the consolidated financial statements, enables an appropriate and
complete machine-readable XBRL copy of the XHTML rendering.

298 299
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

Independent Practitioner’s Report on a Limited and the immanent risk that indeterminate legal terms may be interpreted differently, the legal conformity of
the interpretation is subject to uncertainties.

Reasonable Assurance Engagement on Non-financial Audit Firm’s Independence and Quality Management
Reporting28 We have complied with the German professional provisions regarding independence as well as other
ethical requirements.

To adidas AG, Herzogenaurach Our audit firm applies the national legal requirements and professional standards – in particular the
Professional Code for German Public Auditors and German Chartered Auditors (“Berufssatzung für
We have performed an assurance engagement on the combined non-financial statement of adidas AG, Wirtschaftsprüfer und vereidigte Buchprüfer“: “BS WP/vBP”) as well as the Standard on Quality
Herzogenaurach, (hereinafter the "Company") for the period from 1 January to 31 December 2023 Management 1 published by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany;
(hereinafter the "Combined Non-financial Statement") consisting of the sections of the combined IDW): Requirements to quality management for audit firms (IDW Qualitätsmanagementstandard 1:
management report denoted with ⌐ ¬ and [ ]. Anforderungen an das Qualitätsmanagement in der Wirtschaftsprüferpraxis - IDW QMS 1 (09.2022)), which
requires the audit firm to design, implement and operate a system of quality management that complies
In accordance with our engagement, we have divided the level of assurance to be obtained by us and with the applicable legal requirements and professional standards.

─ performed a reasonable assurance engagement on the sections denoted with [ ] in the Responsibility of the Assurance Practitioner
Combined Non-financial Statement and Our responsibility is to express a conclusion with reasonable assurance on the sections of the Combined
Non-financial Statement denoted with [ ] and a conclusion with limited assurance on the sections of the
─ performed a limited assurance engagement on the sections denoted with ⌐ ¬ in the Combined Combined Non-financial Statement denoted with ⌐ ¬ based on the assurance procedures we have
Non-financial Statement. performed.

Not subject to our assurance engagement are the external sources of documentation or expert opinions We conducted our assurance engagement in accordance with International Standard on Assurance
mentioned in the Combined Non-financial Statement. Engagements (ISAE) 3000 (Revised): Assurance Engagements other than Audits or Reviews of Historical
Financial Information, issued by the IAASB. This Standard requires that we plan and perform the
Responsibility of the Executive Directors assurance engagement to
The executive directors of the Company are responsible for the preparation of the Combined Non-financial
Statement in accordance with §§ (Articles) 315c in conjunction with 289c to 289e HGB ─ obtain reasonable assurance about whether the sections denoted with [ ] in the Combined Non-
("Handelsgesetzbuch": "German Commercial Code") and Article 8 of REGULATION (EU) 2020/852 OF THE financial Statement for the period from 1 January to 31 December 2023, other than the external
EUROPEAN PARLIAMENT AND OF THE COUNCIL of 18 June 2020 on establishing a framework to facilitate sources of documentation or expert opinions mentioned in the Combined Non-financial
sustainable investment and amending Regulation (EU) 2019/2088 (hereinafter the "EU Taxonomy Statement, have been prepared, in all material respects, in accordance with §§ 315c in
Regulation”) and the Delegated Acts adopted thereunder, as well as for making their own interpretation of conjunction with 289c to 289e HGB, and
the wording and terms contained in the EU Taxonomy Regulation and the Delegated Acts adopted
thereunder, as set out in section “EU-Taxonomy” of the Combined Non-financial Statement. ─ obtain limited assurance about whether any matters have come to our attention that cause us to
believe that the sections denoted with ⌐ ¬ in the Company’s Combined Non-financial Statement
This responsibility includes the selection and application of appropriate non-financial reporting methods for the period from 1 January to 31 December 2023, other than the external sources of
and making assumptions and estimates about individual non-financial disclosures of the Company that are documentation or expert opinions mentioned in the Combined Non-financial Statement, are not
reasonable in the circumstances. Furthermore, the executive directors are re-sponsible for such internal prepared, in all material respects, in accordance with §§ 315c in conjunction with 289c to 289e
control as the executive directors consider necessary to enable the preparation of a Combined Non- HGB and the EU Taxonomy Regulation and the Delegated Acts issued thereunder as well as the
financial Statement that is free from material misstatement whether due to fraud or error. interpretation by the executive directors disclosed in section "EU Taxonomy" of the Combined
Non-financial Statement.
The EU Taxonomy Regulation and the Delegated Acts issued thereunder contain wording and terms that
are still subject to considerable interpretation uncertainties and for which clarifications have not yet been The procedures performed for the limited assurance engagement part are less extensive than those
published in every case. Therefore, the executive directors have disclosed their interpretation of the EU performed for the reasonable assurance engagement part, and accordingly a substantially lower level of
Taxonomy Regulation and the Delegated Acts adopted thereunder in section “EU-Taxonomy” of the assurance is obtained. The selection of the assurance procedures is subject to the professional judgement
Combined Non-financial Statement. They are responsible for the defensibility of this interpretation. Due to of the assurance practitioner.

In the course of our assurance engagement, we have, amongst other things, performed the following
assurance procedures and other activities:
28 PricewaterhouseCoopers GmbH has performed a limited and reasonable assurance engagement on the German version of the combined non-financial
statement and issued an independent practitioner`s report in German language, which is authoritative. The following text is a translation of the independent
practitioner`s report.

300 301
ANNUAL R EP ORT 20 23 ANNUAL R EP ORT 20 23

─ Gain an understanding of the structure of the sustainability organisation and stakeholder Restriction of Use
engagement We draw attention to the fact that the assurance engagement was conducted for the Company’s purposes
and that the report is intended solely to inform the Company about the result of the assurance
─ Inquiries of the executive directors and relevant employees involved in the preparation of the engagement. Consequently, it may not be suitable for any other purpose than the aforementioned.
Combined Non-financial Statement about the preparation process, about the internal control Accordingly, the report is not intended to be used by third parties for making (financial) decisions based on
system relating to this process and about disclosures in the Combined Non-financial Statement it. Our responsibility is to the Company. We do not accept any responsibility to third parties. Our assurance
opinion is not modified in this respect.
─ Identification of likely risks of material misstatement in the Combined Non-financial Statement
Munich, February 23, 2024
─ Analytical procedures on selected disclosures in the Combined Non-financial Statement
PricewaterhouseCoopers GmbH
─ Reconciliation of selected disclosures with the corresponding data in the consolidated financial Wirtschaftsprüfungsgesellschaft
statements and group management report

─ Evaluation of the presentation of the Combined Non-financial Statement

Hendrik Fink ppa. Nico Irrgang

─ Evaluation of the process to identify taxonomy-eligible and taxonomy-aligned economic activities
Wirtschaftsprüfer
and the corresponding disclosures in the Combined Non-financial Statement
[German public auditor]

─ Inquiries on the relevance of climate-risks

In the course of our reasonable assurance engagement part on the sections denoted with [ ] in the
Combined Non-financial Statement, we have performed the following assurance procedures and other
activities in addition to those described above:

─ Identification of likely risks of material misstatement in the Combined Non-financial Statement

─ Evaluation of the internal control system in relation to the subject matter

─ Audit of processes for collecting, controlling, analysing and aggregating selected data from var-
ious locations on a test basis

─ Analytical assessment of selected disclosures in the Combined Non-financial Statement

In determining the disclosures in accordance with Article 8 of the EU Taxonomy Regulation, the executive
directors are required to interpret undefined legal terms. Due to the immanent risk that undefined legal
terms may be interpreted differently, the legal conformity of their interpretation and, accordingly, our
assurance engagement thereon are subject to uncertainties.

Assurance Opinion
In our opinion, the sections denoted with [ ] in the Combined Non-financial Statement for the period from
1 January to 31 December 2023 have been prepared, in all material respects, in accordance with §§ 315c
in conjunction with 289c to 289e HGB.
Based on the assurance procedures performed and evidence obtained, nothing has come to our attention
that causes us to believe that the sections denoted with ⌐ ¬ in the Company’s Combined Non-financial
Statement for the period from 1 January to 31 December 2023 are not prepared, in all material respects,
in accordance with §§ 315c in conjunction with 289c to 289e HGB and the EU Taxonomy Regulation and the
Delegated Acts issued thereunder as well as the interpretation by the executive directors disclosed in
section "EU Taxonomy" of the Combined Non-financial Statement.
We do not express an assurance opinion on the external sources of documentation or expert opinions
mentioned in the Combined Non-financial Statement.

302 303

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