Adidas : Financial Supplement (PDF) 9M Results

FINANCIAL SUPPLEMENT

JANUARY - SEPTEMBER

FINANCIAL SUPPLEMENT FOR THE FIRST NINE MONTHS 2020

TABLE OF CONTENT

Consolidated Statement of
Financial Position	03
Condensed Consolidated Income Statement	05
Consolidated Statement of
Comprehensive Income	06
Consolidated Statement of
Changes in Equity	07
Consolidated Statement of Cash Flows	08

2020 MONTHS NINE FIRST THE FOR SUPPLEMENT FINANCIAL ADIDAS

To enhance readability, registered trademarks as well as references to rounding differences are omitted in this publication.

Financial Supplement - 9M 2020

CONSOLIDATED STATEMENT OF	CONDENSED CONSOLIDATED	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF
FINANCIAL POSITION	INCOME STATEMENT	COMPREHENSIVE INCOME	CHANGES IN EQUITY	CASH FLOWS

		September		September		Change in %		December
		30, 2020	30, 2019		31, 2019
Assets
Cash and cash equivalents		3,224		2,349		37.3		2,220
Short-term financial assets		0		6		(97.2)		292
Accounts receivable		2,607		3,247		(19.7)		2,625
Other current financial assets		772		699		10.4		544
Inventories		4,676		3,677		27.2		4,085
Income tax receivables		128		78		65.2		94
Other current assets		955		892		7.1		1,076
Assets classified as held for sale		0		-		n.a.		-
Total current assets		12,363		10,946		12.9		10,934
Property, plant and equipment		2,180	2,213	(1.5)	2,380
Right-of-use assets		2,648		2,919		(9.3)		2,931
Goodwill		1,233		1,276		(3.4)		1,257
Trademarks		785		886		(11.4)		859
Other intangible assets		244		216		13.2		305
Long-term financial assets		351		361		(2.8)		367
Other non-current financial assets		375		418		(10.4)		450
Deferred tax assets		1,170		723		61.9		1,093
Other non-current assets		113		150		(24.2)		103
Total non-current assets		9,100		9,162		(0.7)		9,746
Total assets		21,463	20,109	6.7	20,680

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Financial Supplement - 9M 2020

CONSOLIDATED STATEMENT OF	CONDENSED CONSOLIDATED	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF
FINANCIAL POSITION	INCOME STATEMENT	COMPREHENSIVE INCOME	CHANGES IN EQUITY	CASH FLOWS

		September		September		Change in %		December
		30, 2020	30, 2019		31, 2019
Liabilities and equity
Short-term borrowings		1,726	414	316.7	43
Accounts payable		1,710		2,354		(27.4)		2,703
Current lease liabilities		598		559		6.9		733
Other current financial liabilities		289		227		27.5		235
Income taxes		630		379		66.4		618
Other current provisions		1,371		1,304		5.1		1,446
Current accrued liabilities		2,204		2,266		(2.7)		2,437
Other current liabilities		394		483		(18.4)		538
Total current liabilities		8,923		7,986		11.7		8,754
Long-term borrowings		2,590	1,599	62.0	1,595
Non-current lease liabilities		2,309		2,547		(9.3)		2,399
Other non-current financial liabilities		94		92		2.1		92
Pensions and similar obligations		267		260		2.5		229
Deferred tax liabilities		247		297		(16.7)		280
Other non-current provisions		215		205		4.8		257
Non-current accrued liabilities		8		12		(38.6)		9
Other non-current liabilities		19		7		178.3		7
Total non-current liabilities		5,750		5,020		14.5		4,868
Share capital		195	197	(0.8)	196
Reserves		(247)		347		n.a.		45
Retained earnings		6,584		6,572		0.2		6,555
Shareholders' equity		6,532		7,115		(8.2)		6,796
Non-controlling interests		259	(12)		n.a.	261
Total equity		6,791		7,103		(4.4)		7,058
Total liabilities and equity		21,463	20,109	6.7	20,680

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Financial Supplement - 9M 2020

CONSOLIDATED STATEMENT OF	CONDENSED CONSOLIDATED	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF
FINANCIAL POSITION	INCOME STATEMENT	COMPREHENSIVE INCOME	CHANGES IN EQUITY	CASH FLOWS

		Nine	Nine
		months	months
	2020	2019		Change
Net sales	14,297		17,802	(19.7%)
Cost of sales	7,141		8,367	(14.6%)
Gross profit	7,155		9,435	(24.2%)
(% of net sales)	50.0%		53.0%		(3.0pp)
Royalty and commission income	58		111	(48.1%)
Other operating income	30		18	61.0%
Other operating expenses	6,717		7,149	(6.0%)
(% of net sales)	47.0%		40.2%		6.8pp
Marketing and point-of-sale expenses	1,843		2,200	(16.2%)
(% of net sales)	12.9%		12.4%		0.5pp
Operating overhead expenses1	4,874		4,949	(1.5%)
(% of net sales)	34.1%		27.8%		6.3pp
Operating profit	526		2,416	(78.2%)
(% of net sales)	3.7%		13.6%		(9.9pp)
Financial income	19		28	(31.1%)
Financial expenses	128		112	13.8%
Income before taxes	417		2,331	(82.1%)
(% of net sales)	2.9%		13.1%		(10.2pp)
Income taxes	126		594	(78.8%)
(% of income before taxes)	30.2%		25.5%		4.7pp
Net income from continuing operations	291		1,737	(83.2%)
(% of net sales)	2.0%		9.8%		(7.7pp)
(Loss)/gain from discontinued operations,	(5)		74		n.a.
net of tax
Net income	286		1,811	(84.2%)
(% of net sales)	2.0%		10.2%		(8.2pp)
Net income attributable to shareholders	281		1,809	(84.4%)
(% of net sales)	2.0%		10.2%		(8.2pp)
Net income attributable to non-controlling	4		2	117.2%
interests

Third	Third
quarter	quarter
2020	2019	Change
5,964	6,410	(7.0%)
2,981	3,071	(2.9%)
2,984	3,339	(10.6%)
50.0%	52.1%	(2.1pp)
24	37	(36.9%)
10	7	34.0%
2,223	2,486	(10.6%)
37.3%	38.8%	(1.5pp)
579	753	(23.0%)
9.7%	11.7%	(2.0pp)
1,644	1,733	(5.1%)
27.6%	27.0%	0.5pp
794	897	(11.6%)
13.3%	14.0%	(0.7pp)
6	12	(53.2%)
44	44	0.1%
755	865	(12.7%)
12.7%	13.5%	(0.8pp)
177	220	(19.7%)
23.5%	25.5%	(2.0pp)
578	644	(10.4%)
9.7%	10.1%	(0.4pp)
(1)	2	n.a.
577	646	(10.8%)
9.7%	10.1%	(0.4pp)
546	646	(15.5%)
9.1%	10.1%	(0.9pp)
31	1	4281.3%

Basic earnings per share from continuing operations (in €)

Diluted earnings per share from continuing operations (in €)

Basic earnings per share from continuing and discontinued operations (in €)

Diluted earnings per share from continuing and discontinued operations (in €)

1.47	8.76	(83.2%)
1.47	8.76	(83.2%)
1.44	9.13	(84.2%)
1.44	9.13	(84.2%)

2.80	3.26	(14.2%)
2.80	3.26	(14.2%)
2.80	3.27	(14.6%)
2.80	3.27	(14.6%)

1 Aggregated distribution and selling expenses, general and administration expenses, sundry expenses and impairment losses (net) on accounts receivable and

contract assets.

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Financial Supplement - 9M 2020

CONSOLIDATED STATEMENT OF	CONDENSED CONSOLIDATED	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF
FINANCIAL POSITION	INCOME STATEMENT	COMPREHENSIVE INCOME	CHANGES IN EQUITY	CASH FLOWS

Nine months	Nine months	Third quarter	Third quarter
2020	2019	2020	2019

Net income after taxes

Items of other comprehensive income that will not be reclassified subsequently to profit or loss

Remeasurements of defined benefit plans (IAS 19), net of tax1

Net (loss)/gain on other equity investments (IFRS 9), net of tax

Subtotal of items of other comprehensive income that will not be reclassified subsequently to profit or loss

Items of other comprehensive income that will be reclassified to profit or loss when specific conditions are met

Net gain/(loss) on cash flow hedges and net foreign investment hedges, net of tax

Net gain/(loss) on cost of hedging reserve - options, net of tax

Net (loss)/gain on cost of hedging reserve - forward contracts, net of tax

Currency translation differences

Subtotal of items of other comprehensive income that will be reclassified to profit or loss when specific conditions are met

Other comprehensive income

Total comprehensive income

286			1,811		577		646

(9)	(0)	(9)	(1)
(2)	11	0	(1)
(10)	10	(9)	(1)

78	20	(64)	74
8	(13)	(1)	(11)
(21)	16	(3)	(0)
(357)	190	(179)	111
(292)			213		(248)		174
(302)	224	(257)	173
(17)	2,035	319	819

Attributable to shareholders of adidas AG		(11)	2,033	301	818
Attributable to non-controlling interests		(6)		2		19		1

1 Includes actuarial gains or losses relating to defined benefit obligations, return on plan assets (excluding interest income) and the asset ceiling effect.

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Financial Supplement - 9M 2020

CONSOLIDATED STATEMENT OF	CONDENSED CONSOLIDATED	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF
FINANCIAL POSITION	INCOME STATEMENT	COMPREHENSIVE INCOME	CHANGES IN EQUITY	CASH FLOWS

Share	Capital	Cumulative	Hedging	Cost of	Cost of	Other	Retained	Share-	Non-	Total
capital	reserve	currency	reserve	hedging	hedging	reserves	earnings	holders'	controlling	equity
		translation		reserve -	reserve -			equity	interests
		differences		options	forward
					contracts

Balance at December 31, 2018

Other comprehensive income

Net income

Total comprehensive income

Repurchase of adidas AG shares

Repurchase of adidas AG shares due to equity- settled share-based payment

Reissuance of treasury

199	887	(574)	(3)	(3)	(5)	(180)	6,054		6,377	(13)		6,364
			190	20	(13)	16	10				224	0		224
														1,809		1,809	2		1,811
				190		20		(13)		16		10		1,809		2,033		2		2,035
(3)													(621)		(624)				(624)
(0)													(21)		(21)				(21)

shares due to equity- settled share-based payment

Dividend payment

Equity-settled share- based payment

Balance at September 30, 2019

Balance at December 31, 2019

Other comprehensive income

Net income

Total comprehensive income

Repurchase of adidas AG shares

Repurchase of adidas AG shares due to equity- settled share-based payment

Reissuance of treasury shares due to equity- settled share-based payment

Equity-settled share- based payment

First-time consolidation due to obtaining control in accordance with IFRS 10

Balance at September 30, 2020

0

25

25

							(664)	(664)
							(10)	(10)
197	887	(384)	17	(16)	12	(170)	6,572	7,115
196	887	(470)	(150)	(10)	6	(218)	6,555	6,796
		(347)	78	8	(21)	(10)	-	(292)
							281	281
		(347)	78	8	(21)	(10)	281	(11)
(1)							(256)	(257)
(0)							(21)	(21)

0														25		25
	(0)		(0)

195

887

(816)

(73)

(2)

(14)

(229)

6,584

6,532

	25
(2)	(666)
	(10)
(12)	7,103
261	7,058
(10)	(302)
4	286
(6)	(17)
	(257)
	(21)
	25
	(0)
3	3
259	6,791

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Financial Supplement - 9M 2020

CONSOLIDATED STATEMENT OF	CONDENSED CONSOLIDATED	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF
FINANCIAL POSITION	INCOME STATEMENT	COMPREHENSIVE INCOME	CHANGES IN EQUITY	CASH FLOWS

		Nine months		Nine months
		2020	2019
Operating activities:
Income before taxes		417		2,331
Adjustments for:
Depreciation, amortization and impairment losses		1,074		884
Reversals of impairment losses		(2)		(2)
Interest income		(19)		(24)
Interest expense		124		107
Unrealized foreign exchange (gains)/losses, net		(18)		13
Losses on sale of property, plant and equipment and intangible assets, net		5		7
Other non-cash expense		3		6
Payment for external funding of pension obligations (CTA)		-		(4)
Operating profit before working capital changes		1,584		3,319
Increase in receivables and other assets		(174)		(1,061)
Increase in inventories		(778)		(177)
(Decrease)/increase in accounts payable and other liabilities		(1,217)		69
Cash (used in)/generated from operations before taxes		(585)		2,149
Income taxes paid		(289)		(519)
Net cash (used in)/generated from operating activities - continuing operations		(874)		1,630
Net cash used in operating activities - discontinued operations		-		(7)
Net cash (used in)/generated from operating activities		(874)		1,623

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Financial Supplement - 9M 2020

CONSOLIDATED STATEMENT OF	CONDENSED CONSOLIDATED	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF	CONSOLIDATED STATEMENT OF
FINANCIAL POSITION	INCOME STATEMENT	COMPREHENSIVE INCOME	CHANGES IN EQUITY	CASH FLOWS

		Nine months		Nine months
		2020	2019
Investing activities:
Purchase of trademarks and other intangible assets		(46)		(65)
Proceeds from sale of trademarks and other intangible assets		3		0
Purchase of property, plant and equipment		(265)		(347)
Proceeds from sale of property, plant and equipment		3		10
Proceeds from sale of a disposal group		1		3
Proceeds from sale of/(Purchase of) short-term financial assets		289		(0)
Proceeds from disposal of discontinued operations net of cash disposed		21		21
Purchase of investments and other long-term assets		(42)		(72)
Interest received		19		22
Net cash used in investing activities - continuing operations		(17)		(428)
Net cash generated from investing activities - discontinued operations		-		-
Net cash used in investing activities		(17)		(428)
Financing activities:
Repayments of long-term borrowings		(1)		-
Proceeds from issuance of a bond		995		-
Reverse transaction of buyback of Eurobonds		11		-
Interest paid		(102)		(89)
Repayments of lease liabilities		(399)		(447)
Dividend paid to shareholders of adidas AG		-		(664)
Dividend paid to non-controlling interest shareholders		-		(2)
Repurchase of treasury shares		(257)		(604)
Repurchase of treasury shares due to share-based payments		(21)		(21)
Proceeds from reissuance of treasury shares due to share-based payments		18		18
Proceeds from short-term borrowings		1,683		334
Repayments of short-term borrowings		(14)		-
Net cash generated from/(used in) financing activities - continuing operations		1,912		(1,474)
Net cash generated from financing activities - discontinued operations		-		-
Net cash generated from/(used in) financing activities		1,912		(1,474)
Effect of exchange rates on cash		(16)	(1)
Increase/(decrease) of cash and cash equivalents		1,005		(280)
Cash and cash equivalents at beginning of year		2,220		2,629
Cash and cash equivalents at end of period		3,224		2,349

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