Nine Months 2008 Results:

11/6/2008, 7:31 AM (Source: GlobeNewswire)
Currency-neutral Group sales grow 11% in the third quarter
and year-to-date


* Q3 earnings per share increase 6%, nine months earnings per share
grow 14%
* 2008 Group guidance reconfirmed


Third quarter adidas Group currency-neutral sales grow 11%
During the third quarter of 2008, Group revenues grew 11% on a
currency-neutral basis, driven by double-digit sales growth in the
adidas and TaylorMade-adidas Golf segments. While adidas revenues
increased 15%, TaylorMade-adidas Golf sales grew 12% on a
currency-neutral basis. Revenues in the Reebok segment declined 1%.
Currency movements negatively impacted Group sales in euro terms.
Group revenues grew 5% in euro terms to ¤ 3.083 billion in the third
quarter of 2008 from ¤ 2.941 billion in 2007.

Third quarter EPS increases 6%
The Group's gross margin increased 0.4 percentage points to 49.0%
(2007: 48.6%) in the third quarter as a result of an improving
regional mix, further own-retail expansion and favorable currency
movements. These effects more than offset higher sourcing costs.
Group gross profit increased 6% to ¤ 1.511 billion (2007: ¤ 1.429
billion). The Group's operating margin decreased 0.7 percentage
points to 15.3% in the third quarter of 2008 versus 16.0% in the
prior year as a result of higher operating expenses as a percentage
of sales. Operating profit, however, increased slightly to
¤ 473 million versus ¤ 471 million in 2007. The Group's net income
attributable to shareholders grew 2% to ¤ 302 million (2007:
¤ 298 million), supported by a lower tax rate. As a result of the
lower weighted average number of shares due to the share buyback
program, earnings per share increased at a stronger rate. Basic EPS
for the third quarter grew 6% to ¤ 1.54.

adidas Group currency-neutral sales grow 11% in the first nine months
of 2008
During the first nine months of the year, Group revenues increased
11% on a currency-neutral basis, driven by double-digit sales growth
in the adidas and TaylorMade-adidas Golf segments. The adidas segment
grew 16%, the Reebok segment decreased 2% and TaylorMade-adidas Golf
segment sales increased 11%. Currency movements negatively impacted
Group sales in euro terms. Group revenues grew 4% in euro terms to ¤
8.225 billion in the first nine months of 2008 from ¤ 7.879 billion
in 2007.

"We have again delivered a strong set of financial results. Momentum
in the adidas and TaylorMade-adidas Golf segments has clearly
continued," commented adidas Group CEO and Chairman Herbert Hainer.
"And this is despite mounting pressure on retail markets and consumer
spending around the globe."


+---------------------------------------------------------------------+
| | Nine | Nine | Change | Change y-o-y |
| | Months | Months |y-o-y in| currency-neutral |
| | 2008 | 2007 | euro | |
| | | | terms | |
|-----------------+--------+--------+--------+------------------------|
| | ¤ in | ¤ in | in % | in % |
| |millions|millions| | |
|-----------------+--------+--------+--------+------------------------|
|adidas | 6,004 | 5,465 | 10 | 16 |
|-----------------+--------+--------+--------+------------------------|
|Reebok | 1,587 | 1,765 | (10) | (2) |
|-----------------+--------+--------+--------+------------------------|
|TaylorMade-adidas| 614 | 609 | 1 | 11 |
|Golf | | | | |
|-----------------+--------+--------+--------+------------------------|
|HQ/Consolidation | 20 | 40 | (51) | (46) |
|-----------------+--------+--------+--------+------------------------|
|Total | 8,225 | 7,879 | 4 | 11 |
+---------------------------------------------------------------------+

Nine months net sales growth by segment

Sales increase strongly in nearly all regions
During the first nine months of the year, adidas Group sales grew at
double-digit rates in all regions except North America where revenues
declined. Group sales in Europe grew 13% on a currency-neutral basis
in the first nine months of 2008 as a result of strong increases in
most countries. In North America, Group revenues declined by 7% on a
currency-neutral basis due to lower sales in the USA. Sales for the
Group in Asia increased 23% on a currency-neutral basis in the first
nine months of 2008, driven by particularly strong growth in China.
In Latin America, currency-neutral sales grew 39% in the first nine
months of the year, with double-digit increases coming from all of
the region's major markets. This development was also supported by
the first-time consolidation of Reebok's joint ventures in the
region. Currency translation effects negatively impacted sales in
euro terms in all regions. Sales in Europe increased 9% in euro terms
to ¤ 3.776 billion in 2008 from ¤ 3.455 billion in 2007. Revenues in
North America decreased 17% to ¤ 1.871 billion in 2008 from ¤ 2.248
billion in the prior year. In euro terms, revenues in Asia grew 16%
to ¤ 1.875 billion in 2008 from ¤ 1.616 billion in 2007. Sales in
Latin America grew 34% to ¤ 647 million in 2008 from ¤ 484 million in
the prior year.


+-------------------------------------------------------------------+
| | Nine | Nine | Change | Change y-o-y |
| | Months | Months | y-o-y | currency-neutral |
| | 2008 | 2007 | in euro | |
| | | | terms | |
|----------+----------+----------+---------+------------------------|
| | ¤ in | ¤ in | in % | in % |
| | millions | millions | | |
|----------+----------+----------+---------+------------------------|
| Europe | 3,776 | 3,455 | 9 | 13 |
|----------+----------+----------+---------+------------------------|
| North | 1,871 | 2,248 | (17) | (7) |
| America | | | | |
|----------+----------+----------+---------+------------------------|
| Asia | 1,875 | 1,616 | 16 | 23 |
|----------+----------+----------+---------+------------------------|
| Latin | 647 | 484 | 34 | 39 |
| America | | | | |
|----------+----------+----------+---------+------------------------|
| Total[1] | 8,225 | 7,879 | 4 | 11 |
+-------------------------------------------------------------------+

Nine months net sales growth by region
[1] Including HQ/Consolidation.

Record Group gross margin
The Group gross margin increased by 1.7 percentage points to 49.4%
during the first nine months of 2008 (2007: 47.7%), driven by
improvements in the adidas and TaylorMade-adidas Golf segments. This
highest-ever first nine months rate was related to an improving
regional and product mix, increased own-retail activities as well as
favorable currency movements. Cost synergies resulting from the
Reebok integration into the adidas Group also continued to have a
positive impact. Input price increases had only a modest negative
impact on the cost of sales development in the first nine months of
2008. As a result of the Group's strong top-line growth and gross
margin improvement, gross profit for the adidas Group rose 8% in the
first nine months of 2008 to reach ¤ 4.062 billion versus ¤ 3.755
billion in the prior year.

Operating margin improves by 0.4 percentage points
The Group's operating margin grew 0.4 percentage points to 11.7% in
the first nine months of 2008 (2007: 11.3%) as the increase in gross
margin more than offset higher operating expenses as a percentage of
sales. Operating expenses as a percentage of sales increased by 1.2
percentage points to 38.5% in the first nine months of 2008 from
37.3% in 2007. This development was primarily driven by higher
marketing expenses as a percentage of sales in the adidas segment
related to this year's major sporting events. Increased expenses to
support the Group's growth in emerging markets such as Russia also
impacted this development. Operating profit for the Group increased
8% in the first nine months of 2008 to reach ¤ 963 million versus
¤ 889 million in 2007.

Net financial expenses increase 9%
Net financial expenses increased 9% to ¤ 113 million in the first
nine months of 2008 from ¤ 104 million in the prior year. The
increase was primarily due to exchange rate variances. Lower
financial income also contributed to this development.

Income before taxes increases by 8%
Despite higher net financial expenses, income before taxes as a
percentage of sales increased by 0.4 percentage points to 10.3% in
2008 from 10.0% in 2007 as a result of the Group's operating margin
increase. Income before taxes for the adidas Group grew 8% to ¤ 850
million in the first nine months of 2008 from ¤ 785 million in 2007.

Net income attributable to shareholders up 11%
The Group's net income attributable to shareholders increased 11% to
¤ 588 million in the first nine months of 2008 from ¤ 530 million in
2007. This development was supported by a lower tax rate and lower
minority interests. The Group's tax rate decreased by 1.5 percentage
points to 30.5% in the first nine months of 2008 (2007: 32.0%). The
Group's minority interests declined by 31% to ¤ 2 million in the
first nine months of 2008 from ¤ 4 million in the prior year.

Basic earnings per share increase 14%
Basic earnings per share increased 14% to ¤ 2.96 in the first nine
months of 2008 versus ¤ 2.60 in the prior year. The weighted average
number of shares used in the calculation of basic earnings per share
was 198,868,061 (2007 average: 203,583,762). Diluted earnings per
share in 2008 increased 13% to ¤ 2.78 from ¤ 2.46 in the prior year.
The weighted average number of shares used in the calculation of
diluted earnings per share was 214,671,394 (2007 average:
219,456,361).

Share buyback program completed
Under the share buyback program announced on January 29, 2008, adidas
AG purchased 2,705,313 shares at an average price of ¤ 38.20 during
the third quarter. The buyback volume amounted to ¤ 103 million in
the third quarter. The buyback program was continued in the fourth
quarter. On October 27, 2008, adidas AG announced the completion of
the program. Between January 30 and October 22, 2008, adidas AG
repurchased a total of 10,182,248 shares at an average price of ¤
40.21. This represents 5% of the stock capital at the time the
program started. The total buyback volume amounted to ¤ 409 million.

Working capital development supports further growth
Group inventories grew 14% to ¤ 1.812 billion at the end of the first
nine months of 2008 versus ¤ 1.596 billion in 2007. On a
currency-neutral basis, this represents an increase of 15%. This
development is due to business expansion in emerging markets and the
inventories related to the new Reebok joint ventures in Latin
America. Receivables for the Group increased 7% to ¤ 2.055 billion at
the end of the first nine months of 2008 versus ¤ 1.918 billion in
the prior year. On a currency-neutral basis, receivables increased
9%, which is below sales growth for the third quarter. This reflects
ongoing strict discipline in the Group's trade terms management and
concerted collection efforts in all segments.

Net borrowings increase by ¤ 392 million
Net borrowings at September 30, 2008 were ¤ 2.593 billion, up 18% or
¤ 392 million versus ¤ 2.201 billion in the prior year. The positive
impact of the Group's strong bottom-line profitability was more than
offset by the share buyback, investments in controlled space, other
capital expenditure and operating working capital needs.

adidas backlogs grow 4% on a currency-neutral basis
Backlogs for the adidas brand at the end of the third quarter
increased 4% versus the prior year on a currency-neutral basis. The
non-recurrence of prior year orders for UEFA EURO 2008(TM) related
product had a negative impact on football backlogs. The overall
improvement, however, was supported by increases in many other major
categories. In euro terms, adidas backlogs also grew 4%. Footwear
orders increased 6% in currency-neutral terms (+6% in euros) with
growth coming from all regions. Apparel backlogs grew 1% on a
currency-neutral basis (+1% in euros), driven by growth in Asia which
more than compensated declines in Europe and North America.


+------------------------------------------------------------------------------------+
| | Footwear | Apparel | Total[2] |
|---------+------------------------+------------------------+------------------------|
| |in ¤ | currency-neutral |in ¤ | currency-neutral |in ¤ | currency-neutral |
|---------+-----+------------------+-----+------------------+-----+------------------|
|Europe | (1) | 1 | (4) | (2) | (2) | 0 |
|---------+-----+------------------+-----+------------------+-----+------------------|
|North | 10 | 11 | (4) | (3) | 3 | 5 |
|America | | | | | | |
|---------+-----+------------------+-----+------------------+-----+------------------|
|Asia | 17 | 12 | 13 | 8 | 13 | 8 |
|---------+-----+------------------+-----+------------------+-----+------------------|
|Total | 6 | 6 | 1 | 1 | 4 | 4 |
+------------------------------------------------------------------------------------+

Year-over-year development of adidas order backlogs by product
category and region as at
September 30, 2008 (in %)
[2] Includes hardware backlogs.

Reebok backlogs decline
Currency-neutral Reebok backlogs at the end of the third quarter of
2008 decreased 13% versus the prior year on a currency-neutral basis.
In euro terms, this also represents a decline of 13%. Footwear
backlogs decreased 10% in currency-neutral terms (-10% in euros).
Apparel backlogs declined by 23% on a currency-neutral basis (-24% in
euros). These developments largely reflect challenging market
conditions in Reebok's major markets. Due to the exclusion of the
own-retail business and the high share of at-once business in
Reebok's sales mix, order backlogs in this segment are not indicative
of the expected 2008 sales development.


+---------------------------------------------------------------------------------------+
| | Footwear | Apparel | Total[3] |
|---------+-------------------------+-------------------------+-------------------------|
| | in ¤ | currency-neutral | in ¤ | currency-neutral | in ¤ | currency-neutral |
|---------+------+------------------+------+------------------+------+------------------|
|Europe | (12) | (10) | (24) | (23) | (16) | (14) |
|---------+------+------------------+------+------------------+------+------------------|
|North | (23) | (22) | (23) | (22) | (22) | (21) |
|America | | | | | | |
|---------+------+------------------+------+------------------+------+------------------|
|Asia | (37) | (41) | (31) | (36) | (35) | (39) |
|---------+------+------------------+------+------------------+------+------------------|
|Total | (10) | (10) | (24) | (23) | (13) | (13) |
+---------------------------------------------------------------------------------------+

Year-over-year development of Reebok order backlogs by product
category and region as at
September 30, 2008 (in %)
[3] Includes hardware backlogs.

Group 2008 and 2009 outlook
adidas AG today confirms the Group financial guidance it has
previously communicated for 2008. adidas Group sales in 2008 are
expected to grow at a high-single-digit rate on a currency-neutral
basis. Brand adidas sales are forecasted to increase at a
low-double-digit currency-neutral rate. Sales guidance has changed
for the Reebok and TaylorMade-adidas Golf segments. Currency-neutral
Reebok segment sales are now forecasted to remain stable compared to
the prior year (previously mid- to high-single-digit increase).
Currency-neutral TaylorMade-adidas Golf sales are now forecasted to
increase at a high-single-digit rate (previously mid-single-digit
rate). Full year Group gross margin is expected to exceed 48.0%. The
Group operating margin is expected to approach 10.0% in 2008. Full
year net income attributable to shareholders is projected to grow by
at least 15% in 2008 versus the 2007 level of ¤ 551 million. This
will represent the eighth consecutive year of double-digit net income
growth for the Group.

Based on current order intake and retailer feedback, Management plans
to grow sales and net income again in 2009. However, as a result of
the uncertain global macroeconomic environment and the potential
impact on the Group's financial results, Management currently lacks
sufficient visibility on the Group's business development in the
coming year. Therefore, the adidas Group has decided to retract its
financial guidance for 2009. It is planned to provide a 2009 outlook
with the presentation of the Group's 2008 full year results in March
next year.

Herbert Hainer stated: "We are on a good path to reaching all of our
financial targets for 2008. However, the current state of the world
economy means we have challenges in front of us that require all our
energy and focus. But we are not sitting back and just waiting to
react. We are pro-actively looking at ways to ensure we drive healthy
top- and bottom-line growth again in 2009. This will be achieved
through tight cost control but also continued investments in our core
business segments."

***

Contacts:


Media Relations Investor
Relations
Jan Runau Natalie M. Knight
Chief Corporate Vice President
Communications Officer Investor
Relations
Tel.: +49 (0) 9132 84-3830 Tel.: +49 (0)
9132 84-2187

Anne Putz John-Paul O'Meara
Head of Corporate PR Senior Investor
Relations Manager
Tel.: +49 (0) 9132 84-2964 Tel.: +49 (0)
9132 84-2751

Kirsten Keck Dennis Weber
Corporate PR Manager Investor
Relations Manager
Tel.: +49 (0) 9132 84-6207 Tel.: +49 (0)
9132 84-4989


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


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