Adidas Ag · XETR:ADS
Adidas — Adidas Ag Ord — Q2 2024 Earnings Presentation
59 slides from Adidas's earnings presentation, Jul 31, 2024
Slide 1: Q2 Results
Slide 2: Happy Birthday, adidas! Celebrating 75 Years
HAPPY BIRTHDAY, ADIDAS! CELEBRATING 75 YEARS OF ADIDAS
Slide 3: Strong First Half of the Year of Sports
Slide 4: Strong Second Quarter of the Year of Sports
STRONG SECOND QUARTER OF THE YEAR OF SPORTS Q2 2024 CURRENCY-NEUTRAL NET SALES UP 11% Y-0-Y Underlying business (excl. Yeezy) up 16% Y-O-Y currency-neutral GROSS MARGIN OF 50.8%, UNDERLYING BUSINESS UP ~+1.5PP * — Significantly smaller Yeezy business had a negative impact on Y-0-Y reported (-0.1pp)
Slide 5: Celebrating the Year of Sports
oat to BOL- % IRO2 OPA AMERICA 2024 < i CELEBRATING oe THE YEAR OF SPORTS
Slide 6: Federations: Celebrating Euro in Germany
6 FEDERATIONS NEA ‘a ar JERSEYS SOLD CELEBRATING EURO IN GERMANY SPAIN WINS TOURNAMENT
Slide 7: Spain: On a Winning Streak
le ak hed Gi WORLD! CUP 2023 NATIONS LEAGUE 2024 EURO 2024 u19 A 24 SPAIN: ON A WINNING STREAK
Slide 8: Celebrating Copa America in the USA
sane COPA AMERICg Be. gl oomeeaze 024 : i E AGES DYA COVERAGE Sue CELEBRATING COPA AMERICA IN THE USA ARGENTINA WINS TOURNAMENT AFTER ADIDAS FINAL
Slide 9: Roadmap to Success 2026
2026 ROADMAP TO SUCCESS 2023 2024 BETTER COMPANY BREAK EVEN COMPANY AND TRANSITION
Slide 10: Q2 2024 Revenue Growth by Market
Q2 2024 REVENUE GROWTH BY MARKET woRTH EUROPE 1 bugnuee"® AMERICA 1 UNDERLYING +199 a + 19 % 244 JAPAN/ o 0 1+2% VS, 2023 LATIN EMERGING AMERICA BUSINESS MARKETS 1 BUSINESS.” 0 0 +33 % 1+34% +25 % 1+28% VS. 202: VS. 2023 GREATER UNDERLYING CHINA) BUSINESS +9% 149% VS. 2023 UNDERLYING SOUTH KOREA 1 B
Slide 11: H1 2024 Revenue Growth by Market
H1 2024 REVENUE GROWTH BY MARKET woRTH EUROPE 1 bugnuee"® AMERICA 1 UNDERLYING +179 a + 17 % 17 JAPAN/ o 0 1-5% VS, 2023 LATIN EMERGING AMERICA BUSINESS MARKETS 1 BUSINESS.” 0 0 +25% 1+25% +21 % 1+22% VS. 202: VS. 2023 GREATER UNDERLYING CHINA BUSINESS +8% 148% VS. 2023 UNDERLYING SOUTH KOREA 1 BUSI
Slide 12: Q2 2024 Revenue Growth by Channel
Q2 2024 REVENUE GROWTH BY CHANNEL 41% e—___— DTC 22% OWN RETAIL 19% OWN E-COM 59% WHOLESALE +17% +15% -6% +31% WHOLESALE OWN RETAIL E-COM_ EXCL. (INCL. FRANCHISE) YEEZY Q2 2024 CHANNEL GROWTH Q2 2024 CHANNEL SPLIT
Slide 13: New and Improved Retail and Wholesale Experiences
2 a FOOTEO-CKER JD ACTIVATION BERLEN: PARIS NEW AND IMPROVED RETAIL AND WHOLESALE EXPERIENCES
Slide 14: Q2 2024 Revenue Growth by Product Division
Q2 2024 REVENUE GROWTH BY PRODUCT DIVISION 6% ACCESSORIES \ | 61% FOOTWEAR 33% APPAREL +17% +6% -8% FOOTWEAR APPAREL ACCESSORIES Q2 2024 PRODUCT DIVISION GROWTH Q2 2024 PRODUCT DIVISION SPLIT
Slide 15: Q2 2024 Net Sales Growth by Category
Q2 2024 NET SALES GROWTH BY CATEGORY \ ORIGINALS, BASKETBALL, PARTNERSHIPS SPORTSWEAR PERFORMANCE SKATEBOARDING +16% +34% Excl. Yeezy +3% +14%
Slide 16: Celebrating Fashion at Paris Fashion Week
\t Paris Fashion Week, the Adidas Superstar Stole tl ) CELEBRATING FASHION AT PARIS FASHION WEEK
Slide 17: Celebrating Sport x Style at Paris Olympics Opening Ceremony
CELEBRATING SPORT X STYLE AT PARIS OLYMPICS OPENING CEREMONY
Slide 18: We Continue to Have the Hottest Shoes on the Street
WE CONTINUE TO HAVE THE HOTTEST SHOES ON THE STREET GAZELLE HANDBALL z _ SPEZIAL SCALED UP RETRO RUNNING fF SL "fa, F [ “. ™ \ SCALING UP Fe WS
Slide 19: Low Profile: From Fashion Trend to Sell-Through Success
LO PROFILE FROM FASHION TREND TO SELL-THROUGH SUCCESS Stella McCartney's Low-Profile adidas Shoe Makes it Look Admirably Easy Stella McCartney & adidas return with a new Court Boost sneaker, which is even better (& more stylish) than before. © ca cermany Nach dem Adidas-Samba-Hype: Ist das der nachs
Slide 20: We Continue to Have the Hottest Shoes on the Street
WE CONTINUE TO HAVE THE HOTTEST SHOES ON THE STREET SCALED UP REG OQ RUNNING (SL Tegy SCALING UP FUTURE
Slide 21: Showing Up Strong in the Streets
Unboxing the new it girl sneakers Adidas Campus 00s. SHOWING UP STRONG IN THE STREETS
Slide 22: zo Z
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Slide 23: And It Continues in Apparel
AND IT CONTINUES IN APPAREL TAKING FOOTBALL TO THE STREETS
Slide 24: Strong Lifestyle Portfolio
whs STRONG LIFESTYLE PORTFOLIO
Slide 25: But We Are a Sports Brand
— BUT WE ARE A SPORTS BRAND val AND OUR PERFORMANCE —#y OFFERING IS JUST “sd AS STRONG
Slide 26: Football
\Y FOOTBALL PREDATOR (a COPA
Slide 27: Pro Evo Ultraboost
PRO EVO 1 ULTRABOOST 5
Slide 28: Summer Strength Dropset
y! 4 a Me G}SUMMER 24 STRENGTH S DROPSET 3
Slide 29: Specialist Sports: Roland Garros Collection
» ECIALIST SPORTS = ROLAND GARROS COLLECTION
Slide 30: Terrex Agravic Speed Ultra
AAXTERREX( AGRAVIC SPEED ULTRA
Slide 31: bon
“oO = = o bon = = } 3°
Slide 32: Texas Tech Uniforms Warp Speed Collection
: 2a ae | TEXAS TECH =| UNIFORMS 7 \Y TEXAE TECH R\Y WARP SPEED COLLECTION BASEBALL
Slide 33: Basketball
Slide 34: Anthony Edwards' AE1s Fastest-Growing Signature Franchise
ANTHONY EDWARDS’ AE1S ARE THE FASTEST-GROWING SIGNATURE FRANCHISE adidas Samba AT FOOT LOCKER CELEBRATING WINS ACROSS CATEGORIES
Slide 35: Celebrating Our Winning Teams
REAL MADRID WINS MANCHESTER UNITED WOMEN - CHAMPIONS LEAGUE WIN FA CUP JUVENTUS WINS COPPA ITALIA é q Ip 2 : { AB in 4 | MANCHESTER UNITED MEN INDIA WINS CRICKET T20 WIN FA CUP WORLD CUP CELEBRATING OUR WINNING TEAMS...
Slide 36: And Our Winning Athletes
US RECORD WORLD RECORD 150M” a NOAHLYLES PERES JEPCHIRCHIR ; 02:16:16 14°00 a QUALIFICA PARIS /0 bY} ANNA HAVO WORLD LONDON MARATHON AND OUR WINNING ATHLETES
Slide 37: Celebrating New Partnerships
AITANA | MICHAEL BONMATI THORBJORNSEN MICAH PARSONS MAYAR SHERIF — TIAREJENNINGS — ADIZERO 7 CELEBRATING NEW PARTNERSHIPS ONE LEAGUE VOLLEYBALL CSSF MIDDLESCHOOL ASTON VILLA EINTRACHT FRANKFURT COMO 1907 SKY SPORTS GOLF “B40: are Bunde. fg w E cryy GERMAN HOCKEY. FEDERATION
Slide 38: Celebrating Extended Partnerships
‘ ANTHONY EDWARDS SIGNED MULTI-YEAR CONTRACT EXTENS CELEBRATING EXTENDED PARTNERSHIPS
Slide 39: Financial Update
Slide 40: Q2 2024 Financial Results
Q2 2024 FINANCIAL RESULTS € IN MILLIONS NET SALES GROSS PROFIT % OF NET SALES 5,343 2,719 50.9% +9% eH +11% CN. INCL. YEEZY REVENUES OF ~€ 200M UNDERLYING BUSINESS (EXCL. YEEZY) +16% C.N. 50.8% -0.1PP
Slide 41: Gross Margin Development
GROSS MARGIN DEVELOPMENT [a] CETTE [a Ti 1.5e oa (a) ul [a] [a] i aa Wy, 50.8% M mead ~0.3PP ~2.0PP - GROSS cross 9 EEL MARGIN MARGIN Q2 2023 Q2 2024
Slide 42: Q2 2024 Financial Results
Q2 2024 FINANCIAL RESULTS ew em EE oe +9% INCL. YEEZY REVENUES OF ~€ 200M NET SALES 5,343 | sea2 | PCAN © | UNDERLYING BUSINESS (EXCL. YEEZY) +16% C.N. GROSS PROFIT 2,719 2,959 % OF NET SALES 50.9% 50.8% -0.1PP MARKETING & POS EXPENSES 617 za. INVESTMENTS INTO BRAND CAMPAIGN, % OF NET SALES 11.5% 12
Slide 43: Q2 2024 Financial Results
Q2 2024 FINANCIAL RESULTS ens was OPERATING PROFIT 176 SELES o—| cL. VEEZY CONTRIBUTION OF ~€ 50M -NAGAL WED > =a "GAL EES : EE INCOME BEFORE TAXES 123 +147% % OF NET SALES 2.3% 5.2% +2.9PP INCOME TAXES 27 +243% % OF NET SALES 21.9% 30.5% 8.6PP NET INCOME! 96 | a | +119%
Slide 44: Balance Sheet KPIs
BALANCE SHEET KPls INVENTORIES 5,540 4,544 18% |-17% C.N.
Slide 45: Inventory Development
INVENTORY DEVELOPMENT € IN BILLIONS RETURN TO HEALTHY INVENTORY LEVEL & COMPOSITION eee fiaieteieteieiene ~€ 1.0 BILLION IMPROVEMENT (-18% |-17% C.N.) NEE Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 2
Slide 46: Balance Sheet KPIs
BALANCE SHEET KPls € IN MILLIONS eI | s0uun2024 | INVENTORIES 5,540 | age | -18% |-17% C.N. ACCOUNTS RECEIVABLE 2,567 | am | +8% | +10% C.N. ACCOUNTS PAYABLE 2,210 | 2560 | +16% | +17% C.N. OPERATING WORKING CAPITAL 5,896 | ase | -19% |-18% C.N.
Slide 47: Average Operating Working Capital Development
AVERAGE OPERATING WORKING CAPITAL DEVELOPMENT ASA % OF NET SALES a 27.1% 26.9% 25.7% 23.5% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 UPGRADED GUIDANCE TO DECREASE TO A LEVEL OF BETWEEN 21% AND 22%
Slide 48: Balance Sheet KPIs
BALANCE SHEET KPls € IN MILLIONS eI | s0uun2024 | INVENTORIES 5,540 | age | -18% |-17% C.N. ACCOUNTS RECEIVABLE 2,567 | am | +8% | +10% C.N. ACCOUNTS PAYABLE 2,210 | 2560 | +16% | +17% C.N. OPERATING WORKING CAPITAL 5,896 | ase | -19% |-18% C.N. CASH AND CASH EQUIVALENTS 993 | 660 | +67%
Slide 49: Q2 2024 Cash and Net Borrowings Development
Q2 2024 CASH AND NET BORROWINGS DEVELOPMENT CASH AND CASH EQUIVALENTS ADJUSTED NET BORROWINGS € IN MILLIONS € IN MILLIONS ‘ 993 —— Q2 2023 Q2 2024 Q2 2023 Q2 2024 PROGRESS TOWARD RETURNING TO TARGETED ADJUSTED NET BORROWINGS/EBITDA RATIO OF BELOW <2.0X
Slide 50: Outlook 2024
a a OUTLOOK 2024
Slide 51: FY 2024 Guidance Overview
FY 2024 GUIDANCE OVERVIEW FY 2024 ASSUMPTIONS GUIDANCE = ——_SELLING REMAINING VEEZY I 7 ——L_JULY 16 | INVENTORY ON AVERAGE AT COST NET SALES » ~€150 million additional GROWTH HIGH-SINGLE- topine contribution CURRENCY. DIGIT INCREASE = No further operating profit NEUTRAL contribution OPERATING SIGNIF
Slide 52: FY 2024 Guidance Yeezy
FY 2024 GUIDANCE YEEZY NET SALES OPERATING PROFIT LATEST FY 2024 GUIDANCE ES mae SE a JULY 16 ~€500M (PREVIOUSLY: ~€350M) ~€100M (PREVIOUSLY: ~€50M) Selling remaining inventory on average at cost
Slide 53: Stronger Underlying Business Than Expected
STRONGER UNDERLYING BUSINESS THAN EXPECTED FY 2024 GUIDANCE: OPERATING PROFIT INITIAL GUIDANCE UPDATED GUIDANCE LATEST GUIDANCE MARCH 13 APRIL 16 JULY 16 +€ 500 MILLION i e250M— ~€1 BN €50M e1s0m “E700M pee pon nn nn nnn BETTER UNDERLYING BUSINESS ~€500M er ease poneeeennl BETTER REALIZED) YEEZY UND
Slide 54: Strong Products Coming in H2 2024
ZNE ADICOLOR TERREX TRAILMAKER 2 AE 1 LOW PREDATOR MANIA MADE IN ADIZERO PRO 4 GERMANY’ RANGE STRONG PRODUCTS COMING IN H2 2024
Slide 55: Roadmap to Success 2026
2026 ROADMAP TO SUCCESS 10% NS GROWTH ~ 50-52% GROSS MARGIN 2023 2024 2025 2026 —< > ~ 30% OOH COMPANY eueey BREAK EVEN Goon > 10% EBIT AND TRANSITION COMPANY
Slide 56: Celebration of the Year of Sports Continues in Paris
2024 CELEBRATION OF THE YEAR OF SPORTS [=m CONTINUES [ia N PARIS a
Slide 57: Olympics and Paralympics 2024 in Paris
{ . Team Sierra Leone, Labrum, Best Paris Olympics 2024 Uniforms OLYMPICS AND PARALYMPICS 2024 IN PARIS 49 SHOES ACROSS 41 DISCIPLINES
Slide 58: Olympics Off to a Strong Start
TOM DALEY WINS 10M SYNCHRON SANGUK OH WINS GOLLY IN FENCING SABRE OLYMPICS OFF TO A STRONG START
Slide 59: Q&A