FOR IMMEDIATE RELEASE Herzogenaurach, March 10, 2021

adidas presents growth strategy ‘Own the Game’ until 2025

• Strategic focus on brand credibility, consumer experience and sustainability

• adidas brand architecture to be sharpened
• Shift to a DTC-led business model
• E-commerce sales to double to between € 8 billion and € 9 billion
• 9 out of 10 adidas articles will be sustainable
• Digital transformation supported by investments of more than € 1 billion
• Mindset of innovation as an enabler across the entire company
• Revenues to increase at a rate of between 8% and 10% p.a. on average 2021-2025
• Operating margin to reach a level of between 12% and 14%
• Net income to increase at a rate of between 16% and 18% p.a. on average 2021-2025
• Total cash return to shareholders to be between € 8 billion and € 9 billion

Today, adidas introduced its new strategy ‘Own the Game’ at a virtual Investor & Media Day.
Main strategic focus of ‘Own the Game’ is to strengthen the credibility of the adidas brand, to
create a unique consumer experience and to continue to expand the company's activities in
the area of sustainability. The new strategy is designed to significantly increase sales and
profitability as well as gain market share until 2025. More than 95% of sales growth is
expected to come from the five strategic categories: Football, Running, Training, Outdoor, and
Lifestyle. As building direct relationships with its target audience plays an increasingly
important role, adidas will evolve its operating model to address consumers more directly. As
a result, the company’s direct-to-consumer (DTC) business is projected to account for around
half of the company's total net sales by 2025 and to generate more than 80% of the targeted
top-line growth. The company's e-commerce business is forecast to double to between
€ 8 billion and € 9 billion. From a market perspective, the company will focus on Greater
China, EMEA (Europe, Middle East, and Africa) and North America. Overall, these three
strategic markets are expected to account for around 90% of sales growth until 2025. In
addition, nine out of ten adidas articles will be made from sustainable materials by 2025. The
company draws confidence from the success of its previous strategy ‘Creating the New’, its
strong market position as well as attractive growth prospects for the sporting goods industry
as a whole.

“‘Own the Game’ is a growth and investment strategy, which will lead adidas into a successful
future. Our strategy is deeply rooted in sport, puts the consumer at the heart of everything we
do and is brought to life by our people. Our strategic focus is on increasing credibility of the
adidas brand, elevating the experience for our consumers and pushing the boundaries in

1
sustainability,” said adidas CEO Kasper Rorsted. “To successfully execute our strategy, we
will continue to significantly invest into our people, our brand and the digital transformation
of the company.”

Strong growth of sales, profitability, and cash flow

With its new strategy, the company aims to increase sales by an average of between 8% and
10% per annum on a currency-neutral basis over the four-year period between 2021 and 2025.
Gross margin is forecast to expand to a level of between 53% and 55%, and the operating
margin to a level of between 12% and 14% by 2025. Net income from continuing operations is
also projected to increase substantially by an average of between 16% and 18% per year over
the four-year period between 2021 and 2025. Driven by the significant top-line growth and
strong bottom-line expansion, adidas will generate substantial cumulative free cash flow until
2025. The majority of this – between € 8 billion and € 9 billion – will be distributed to
shareholders through regular dividend pay-outs in a range of between 30% and 50% of net
income from continuing operations, complemented with share buybacks.

Given the impact of the coronavirus pandemic, the company’s financial ambition has the 2021
financial year – rather than 2020 – as a baseline. For 2021, the company expects currency-
neutral net sales to increase at a mid- to high-teens rate. Gross margin is forecast to increase
to a level of around 52% in 2021 and the operating margin is projected to rebound to a level of
between 9% and 10%. Net income from continuing operations is anticipated to increase to a
level of between € 1.25 billion and € 1.45 billion this year.

2
Investing into people, the brand, and digitalization
To successfully deliver on its strategy, adidas intends to invest consistently into its people and
its unique workplace. Furthermore, adidas will continue its efforts to ensure there is a level
playing field for all, as the company continues its Diversity & Inclusion journey. Investments
into product development, marketing, sponsoring and the company's digitalization are also
set to increase significantly over the next five years. adidas plans to invest around € 1 billion
more into the brand in 2025 compared to 2021. By 2025, the digital transformation of the
company will have been driven forward with investments amounting to over € 1 billion as well.

‘Own the Game’ – Overview

Credibility
adidas will sharpen its market position in Sport and Lifestyle through a clear brand
architecture. In Sport, the company will focus on the four most important categories: Football,
which is the biggest sport in terms of viewership, as well as Running, Training, and Outdoor,
the three biggest participation sports. In the company's lifestyle segment, adidas introduces
Sportswear as a new consumer proposition to address the growing relevance of the
‘athleisure’ trend toward sport-inspired leisurewear. At the same time, Originals will be
extended into the premium segment to ensure a stronger distinction of the respective product
offerings going forward. Until 2025, the five categories Football, Running, Training, Outdoor,
and Lifestyle are expected to account for more than 95% of revenue growth.

adidas is committed to attracting more female consumers. In order to achieve this, the
company will execute on a cross-category plan to achieve product excellence and to elevate
the women’s experience with the goal to grow currency-neutral net sales for its Women’s
business at a mid-teens rate on average per year between 2021 and 2025.

Experience
Consumers expect to receive a brand and shopping experience tailored to their preferences,
with personalized offerings in both digital and physical spaces. The transformation into a
direct-to-consumer-led business built around membership, enabled by a network of own-
retail stores and e-commerce, will therefore play an even more important role for adidas in
the future. Sales through DTC channels are projected to account for around half of the
company's total net sales by 2025 and to generate more than 80% of the company’s increase
in sales until 2025. The company's own e-commerce net sales are expected to double from
currently more than € 4 billion to between € 8 billion and € 9 billion. To achieve this, adidas
will continue to invest into e-commerce and into expanding its membership program. In 2025,
adidas aims to have tripled the number of members in its membership program from the

3
current level of more than 150 million to around 500 million. In addition, adidas’ own-retail
stores will be digitized with fully-fledged omnichannel capabilities. The focus on increasing
digitalization will be expanded to the company’s wholesale partners to ensure a seamless
experience for the consumer across all touchpoints.

adidas also seeks to drive membership through its engagement in megacities, doubling the
number of Key Cities from six to twelve: The company will build on its existing Key Cities
portfolio of Tokyo, Shanghai, Paris, London, New York, and Los Angeles, by adding Mexico City,
Berlin, Moscow, Dubai, Beijing, and Seoul. In addition to these twelve Key Cities, the strategic
markets Greater China, EMEA (Europe, Middle East, and Africa) and North America continue
to increase in importance. The company plans to invest overproportionately in these markets
to gain market share, as they are expected to jointly account for around 90% of net sales
growth until 2025.

Sustainability
For over two decades, sustainability has been an integral part of adidas’ philosophy. A
philosophy rooted in the company’s purpose that through sport adidas has the power to
change lives. In the years to come, adidas will once again significantly expand its commitment
to sustainability and move to a comprehensive consumer-facing program with a sustainable
offering at scale. Already today, six out of ten adidas articles are made from sustainable
materials. By 2025, nine out of ten will be sustainable as the company expands and further
innovates its 3-loop system: recycled loop (made from recycled materials), circular loop
(made to be remade), or regenerative loop (made with natural and renewable materials).
adidas has been researching fully recyclable or biodegradable materials for some time
already and aims to only use recycled polyester in every product from 2024 onward. In
addition, the communication and marketing for products made from sustainable materials
will be intensified, while product takeback programs will be rolled out at a large scale. adidas
is committed to reducing its CO2 footprint per product by 15% by 2025. To this effect, the
company is working closely with its partners in the global supply chain to reduce energy and
material consumption and make greater use of green energy sources. adidas aims to achieve
climate neutrality in its own operations by 2025 and overall climate neutrality by 2050.

4
The execution of ‘Own the Game’ is supported by the further digitalization of the company as
well as innovation across all dimensions of adidas’ business.

Digital
The company's digital transformation is driven by investments of more than € 1 billion until
2025. Core processes across the entire value chain will be digitalized: from the creation
process with 3D design capabilities, via the sourcing of its products to selling it to customers
and consumers. In 2025, the vast majority of adidas’ sales will be generated with products
that were created and sold digitally. To achieve this, the company will expand its data and
technology expertise internally and increase the size of its tech team. In 2021 alone, adidas
will hire more than 1,000 tech and digital talents. The company is also investing into the new
ERP system S/4HANA.

Innovation
adidas will strengthen its innovation mindset across all areas of the company over the coming
years in order to continue to enable ground-breaking innovations, as already demonstrated in
the past with the Boost technology or the partnership with Parley for the Oceans. Recent
examples of such innovations are Futurecraft.Strung, a running shoe with an upper based on
athlete data – to be launched in 2022 – or new vegan, fully recyclable, and biodegradable
versions of the popular lifestyle silhouette Stan Smith. adidas aims to make one of its most
important and most successful franchises the most sustainable in its entire product portfolio.
Further innovations include several new tech platforms in Running, a swipe mechanism for
product feedback incorporated into the adidas app as well as dedicated and sustainable
Outdoor stores in the Alps called Terrex Mountain Lofts.

At the Olympics and major marathons, adidas athletes will compete in the adizero Adios Pro 2.
The running shoe is the second generation of the adizero Adios Pro that was successfully
launched in the second half of last year and in which both Peres Jepchirchir and Kibiwott
Kandie set new world records in the women’s and men’s half marathon. Further innovations
to create sustainable products and processes are already in the making. In the coming
months, adidas will launch the Ultraboost DNA Loop in larger quantities for the first time.
Once this version of the successful running shoe reaches the end of its life cycle, it can be
shredded to pieces and reused.

‘Creating the New’ as strong foundation

The company's new strategy ‘Own the Game’ builds on ‘Creating the New’, the strategy adidas
has successfully executed over the past five years from 2016 to 2020. ‘Creating the New’ was
introduced in March 2015 and centered around three strategic priorities: Open Source
partnerships, Key Cities and driving Speed in product manufacturing. Digitalization,

5
strengthening adidas’ positioning in North America, the standardization of processes under
ONE adidas, and sharpening the brand portfolio were then added in 2017.

Despite the negative impact resulting from the global coronavirus pandemic in 2020, ‘Creating
the New’ enabled the company to grow significantly in its strategic growth areas and to gain
market share: During the five years between 2015 and 2020, sales doubled in both North
America and Greater China, whereas e-commerce sales increased sevenfold. For the period
2015 to 2019, prior to the coronavirus pandemic, adidas successfully increased sales by a total
of around € 7 billion, operating margin improved around 5 percentage points, net income from
continuing operations grew by around € 1.2 billion, while at the same time marketing
investments increased by more than € 700 million. The strong operational performance also
translated into attractive shareholder returns. During the five-year period of ‘Creating the
New’, the adidas share price more than tripled.

Kasper Rorsted said: “Together with our more than 60,000 adidas employees, I look forward
to executing our new strategy. ‘Own the Game’ will enable us to continue growing in an
attractive industry, gaining market share, and creating sustainable value for all our
stakeholders. By 2025, adidas will be stronger, more sustainable and more digital than ever
before.”

***

Contacts:

Media Relations Investor Relations

[email protected] [email protected]
Tel.: +49 (0) 9132 84-2352 Tel.: +49 (0) 9132 84-2920

For more information, please visit adidas-group.com.