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HALF YEAR REPORT 2021 HALF YEAR REPORT TABLE OF CONTENTS FINANCIAL HIGHLIGHTS (IFRS) ______________________________________________________________________________________________________________________ 1 BUSINESS PERFORMANCE __________________________________________________________________________________________________________________________ 2 ECONOMIC AND SECTOR DEVELOPMENT ____________________________________________________________________________________________________________________ 2 INCOME STATEMENT _______________________________________________________________________________________________________________________________________ 2 STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CASH FLOWS ____________________________________________________________________________________ 4 BUSINESS PERFORMANCE BY SEGMENT _____________________________________________________________________________________________________________ 6 EMEA ______________________________________________________________________________________________________________________________________________________ 6 NORTH AMERICA ___________________________________________________________________________________________________________________________________________ 7 GREATER CHINA ___________________________________________________________________________________________________________________________________________ 7 ASIA-PACIFIC ______________________________________________________________________________________________________________________________________________ 8 LATIN AMERICA ____________________________________________________________________________________________________________________________________________ 8 OUTLOOK ___________________________________________________________________________________________________________________________________________ 9 GLOBAL ECONOMIC GROWTH TO RECOVER IN 2021 __________________________________________________________________________________________________________ 9 SPORTING GOODS INDUSTRY TO RECOVER NOTABLY IN 2021 _________________________________________________________________________________________________ 9 ADIDAS INCREASES OUTLOOK FOR FULL YEAR 2021 __________________________________________________________________________________________________________ 9 RISKS AND OPPORTUNITIES _______________________________________________________________________________________________________________________________ 10 CONSOLIDATED STATEMENT OF FINANCIAL POSITION_______________________________________________________________________________________________ 11 CONDENSED CONSOLIDATED INCOME STATEMENT _________________________________________________________________________________________________ 13 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME _________________________________________________________________________________________ 14 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ______________________________________________________________________________________________ 15 CONSOLIDATED STATEMENT OF CASH FLOWS ______________________________________________________________________________________________________ 16 EXPLANATORY NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) AS AT JUNE 30, 2021 _________________________ 18 RESPONSIBILITY STATEMENT ______________________________________________________________________________________________________________________ 32 To enhance readability, registered trademarks as well as references to rounding differences are omitted in this publication.

 HALF YEAR REPORT 2021

		1				2	3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

FINANCIAL HIGHLIGHTS (IFRS)

							First half year	First half year
								2021	2020 Change

Operating Highlights (€ in millions)
Net sales							10,345		7,733	34%
-------------------------	---	---	---	---	---	---	--------	-------	-------	----
Gross profit								5,362	3,898	38%

Other operating expenses								4,154	4,156	0%

EBITDA								1,804	425	324%

Operating profit / (loss)								1,248	(215)	n.a.

Net income / (loss) from continuing operations 890 (217) n.a.

---	---	---	---	---	---	---	---	---	---	---
Net income / (loss) attributable to shareholders 955 (264) n.a.

---	---	---	---	---	---	---	---	----	----	---

Key Ratios
Gross margin							51.8%	50.4%		1.4pp
------------	---	---	---	---	---	---	-------	-------	---	-----
Other operating expenses in % of net sales 40.2% 53.8% (13.6pp)

------------------	---	---	---	---	---	---	-------	--------	--------	-----
Operating margin							12.1%	(2.8%)	14.8pp

Effective tax rate							24.5%	22.4%		2.1pp

Net income attributable to shareholders in % of net sales 9.2% (3.4%) 12.6pp

---	---	---	---	---	---	---	---	---	---	---
Average operating working capital in % of net sales1 21.4% 23.2% (1.8pp)

--------------------------------	---	---	---	---	---	---	-------	--------	----------	-----
Equity ratio2							32.5%	30.7%		1.8pp

Adjusted net borrowings3/EBITDA4								0.9	2.3	(1.4)

Financial leverage							44.3%	80.1%	(35.8pp)

Return on equity2							13.4%	(4.2%)	17.7pp


Balance Sheet and C ash Flow Data (€ in millions)
Total assets							21,877	20,301		8%
------------------------------------	---	---	---	---	---	---	--------	--------	-------	-----
Inventories								4,054	5,213	(22%)

Receivables and other current assets								4,257	3,694	15%

Operating working capital								4,213	4,506	(7%)

Shareholders’ equity								7,106	6,230	14%

Capital expenditure								183	217	(16%)

Net cash generated from / (used in) operating activities 1,077 (819) n.a.

------------------------------	---	---	---	---	---	---	---	------	--------	----

Per Share of Common Stock (€)
Basic earnings								4.52	(0.97)	n.a.
Diluted earnings								4.52	(0.97)	n.a.

Net cash generated from / (used in) operating activities 5.52 (4.19) n.a.

----------------------------	---	---	---	---	---	---	--------	--------	----	----
Dividend								3.00	–	n.a.

Share price at end of period							313.90	233.60		34%


Other (at end of period)
Number of employees							58,007	61,445		(6%)
Number of shares outstanding 195,066,060 195,032,889 0%

----------------------------------	---	---	---	---	---	---	-------------	-------------	----	---
Average number of shares							195,066,060	195,266,358		0%

1 Twelve-month trailing average.
2 Based on shareholders' equity.
3 Adjusted net borrowings = short-term borrowings + long-term borrowings and future cash used in lease and pension liabilities – cash and cash equivalents and short-term financial assets.
4 EBITDA of last twelve months.
All income and expenses of the Reebok business are reported as discontinued operations as of the first quarter 2021. The prior year figures of the consolidated income statement and the
consolidated statement of cash flows have been restated to show the discontinued operations separately from continuing operations.

HALF YEAR REPORT 2021 1 2 3 AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) BUSINESS PERFORMANCE ECONOMIC AND SECTOR DEVELOPMENT GLOBAL ECONOMY RECOVERS IN FIRST HALF OF 20211 Around the globe, economies have been recovering from the enormous negative shock the coronavirus pandemic had caused. The pace of this recovery, however, remains uneven. Developed economies have been benefiting from substantial vaccination progress and fiscal support, while world trade continues to be constrained by supply bottlenecks and travel restrictions. Economic activity is being dampened among developing economies by a partial withdrawal of macroeconomic support and somewhat limited access to vaccines amid an emergence of new coronavirus variants. Against this backdrop, consumer confidence rebounded despite elevated unemployment rates and heightened policy uncertainty. SPORTING GOODS INDUSTRY RETURNS TO GROWTH IN THE FIRST SIX MONTHS OF 2021 In the first half of 2021, the global sporting goods industry recovered from negative impacts caused by lockdown and quarantine measures as a result of the coronavirus pandemic. The return of major amateur and professional sports events, as well as elevated health awareness, drove demand for sporting goods, and consumers returned to retail stores in all parts of the world. The industry also benefited from excess household spending, while coronavirus pandemic-related disruptions, supply chain challenges as well as the geo-political situation weighed on the recovery of the sector. INCOME STATEMENT FOCUS ON CONTINUING OPERATIONS Due to the planned divestiture of the Reebok business, all related income and expenses are reported as discontinued operations at the end of June 2021. All figures related to the 2020 financial year in this report refer to the company’s continuing operations unless otherwise stated. ADIDAS WITH STRONG FINANCIAL PERFORMANCE IN THE FIRST HALF OF 2021 In the first half of 2021, revenues increased 40% on a currency-neutral basis. In euro terms, revenues grew 34% to € 10.345 billion (2020: € 7.733 billion). This growth was achieved against the backdrop of prolonged lockdowns in many parts of the world, industry-wide supply chain challenges and the geo- political situation. From a category perspective, growth was driven by exceptional increases in all strategic performance categories amid the return of major sports events, while the lifestyle category recorded excellent growth as well. From a regional perspective, on a currency-neutral basis, sales were driven by exceptional increases in all strategic growth markets EMEA, North America and Greater China. Both Asia- Pacific and Latin America grew at strong double-digit rates as well. Gross margin improved 1.4 percentage points to 51.8% in the first six months of 2021 (2020: 50.4%). While negative currency fluctuations as well as the less favorable channel mix weighed on the gross margin development, this was more than offset by a significantly better pricing mix due to lower promotional activity as well as the non-recurrence of last year’s inventory allowances and purchase order cancellation costs. 1 Source: World Bank, Global Economic Prospects. 2

 HALF YEAR REPORT 2021

1		2		3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

Royalty and commission income increased 29% to € 31 million (2020: € 24 million), while other operating income declined 50% to € 10 million (2020: € 20 million).

KEY FINANCIAL HIGHLIGHTS
	First half	First half

	year 2021	year 2020	Change
Operating Highlights (€ in millions)
Net sales1		10,345	7,733	34%

Operating profit/(loss)1				1,248	(215)	n.a.

Net income/(loss) from continuing operations1 890 (217) n.a.

---	---	---	---	---	---	---
Net income/(loss) attributable to shareholders2 955 (264) n.a.

-------------	---	---	---	-------------	-----	-----
Key Ratios
Gross margin1				51.8% 50.4%		1.4pp

Other operating expenses in % of net sales1 40.2% 53.8% (13.6pp)


Operating margin1				12.1% (2.8%)	14.8pp

Per Share of Common Stock (€)

-----------------	---	---	---	------	--------	----
Diluted earnings2				4.89	(1.35)	n.a.



1 Figures reflect continuing operations as a result of the planned divestiture of the Reebok business.

2 Includes continuing and discontinued operations.
Other operating expenses, including depreciation and amortization, consist of marketing and point-of-sale
as well as operating overhead expenses. In the first half of 2021, other operating expenses were flat at
€ 4.154 billion (2020: € 4.156 billion). As a percentage of sales, other operating expenses decreased
13.6 percentage points to 40.2% (2020: 53.8%). Marketing and point-of-sale expenses amounted to
€ 1.157 billion (2020: € 1.174 billion), a 1% decline compared to the prior year. The company significantly
increased its digital marketing investments to support its DTC storytelling and e-commerce business,
while physical activities remained restrained in many parts of the world during a significant portion of the
first six months of the year. As a percentage of sales, marketing and point-of sale expenses declined by 4.0
percentage points to 11.2% in the first half of 2021 (2020: 15.2%). Operating overhead expenses remained
flat at € 2.997 billion (2020: € 2.983 billion). Efficiency measures and the non-recurrence of extraordinarily
high purchase order cancellation costs in the prior year period were offset by increased logistics costs
resulting from the significant e-commerce growth as well as temporary stranded costs related to the
intended divestiture of Reebok in the amount of around € 120 million. As a percentage of sales, operating
overhead expenses decreased 9.6 percentage points to 29.0% (2020: 38.6%). In the first six months of
2021, adidas recorded an operating profit of € 1.248 billion (2020: loss of € 215 million), resulting in an
operating margin of 12.1% (2020: -2.8%).
Financial income was down 67% to € 6 million (2020: € 17 million) while financial expenses decreased
9% to € 75 million (2020: € 82 million). Consequently, net financial expenses amounted to € 69 million
compared to € 65 million in the prior year’s period. The company recorded income taxes of € 289 million
resulting in a tax rate of 24.5%. During the six month period, the company incurred net income from
continuing operations of € 890 million (2020: loss of € 217 million), resulting in basic and diluted earnings
per share (EPS) from continuing operations of € 4.52 (2020: € -0.97). ► SEE FINANCIAL HIGHLIGHTS
In the first half of 2021, adidas’ gain from discontinued operations net of tax amounted to € 72 million
(2020: loss of € 74 million). As a result, the net income attributable to shareholders, which, in addition to
the net income from continuing operations, includes the gain from discontinued operations, came in at
€ 955 million (2020: loss of € 264 million). Consequently, both basic and diluted EPS from continuing and
discontinued operations were € 4.89 (2020: € -1.35).
3

 HALF YEAR REPORT 2021

1		2	3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

The total number of shares outstanding remained stable in the first half of 2021. The average number of shares used in the calculation of EPS was 195,066,060. ► SEE FINANCIAL HIGHLIGHTS STATEMENT OF FINANCIAL POSITION AND STATEMENT OF CASH FLOWS Changes in the statement of financial position are discussed in relation to the respective positions at the end of June 2020. PLANNED DIVESTITURE OF THE REEBOK BUSINESS IMPACTS BALANCE SHEET ITEMS At June 30, 2021, all assets and liabilities of the Reebok business are presented as assets and liabilities classified as held for sale due to a concrete plan to sell that business. At the end of the first half of 2021, assets of € 1,674 million and liabilities of € 667 million were allocated to the Reebok business. However, a restatement of the 2020 balance sheet items is not permitted under IFRS. ASSETS At the end of June 2021, total assets were up 8% to € 21.877 billion compared to the prior year (2020: € 20.301 billion), mainly driven by an increase in current assets. Total current assets increased 29% to € 14.136 billion at the end of June 2021 (2020: € 10.931 billion). Cash and cash equivalents were up 106% to € 4.151 billion (2020: € 2.018 billion), as net cash generated from operating activities was only partly offset by net cash used for investing and financing activities. Inventories decreased 22% to € 4.054 billion versus the prior year level of € 5.213 billion. This decline reflects strong sell-through of the company’s products and successful inventory management across all markets. On a currency-neutral basis, inventories also decreased 22%. Accounts receivable increased by 24% to € 2.324 billion (2020: € 1.869 billion), reflecting the company’s strong top-line growth. On a currency-neutral basis, receivables were up 26%. Other current assets rose 1% to € 1.057 billion (2020: € 1.051 billion). Assets classified as held for sale increased to € 1.674 billion due to the planned divestiture of the Reebok business. ► SEE NOTE 04 Total non-current assets decreased 17% to € 7.741 billion at the end of June 2021 (2020: € 9.369 billion). Fixed assets were down 19% to € 6.248 billion (2020: € 7.739 billion). Deferred tax assets were down 1% to € 1.154 billion (2020: € 1.166 billion). STRUCTURE OF STATEMENT OF FINANCIAL POSITION1 (IN % OF TOTAL ASSETS)

			June 30, 2021	June 30, 2020

Assets (€ in millions)			21,877	20,301

Cash and cash equivalents				19.0	9.9

Accounts receivable	10.6	9.2

Inventories	18.5	25.7

Fixed assets	28.6	38.1

Other assets	23.3	17.1

1 For absolute figu res, see adidas AG Consolidated Statement of Financial Position.
LIABILITIES AND EQUITY
Total current liabilities remained virtually flat at € 9.161 billion at the end of June 2021 (2020:
€ 9.137 billion). Accounts payable were down 16% to € 2.165 billion (2020: € 2.575 billion), mainly due to
the normalization of payment terms. On a currency-neutral basis, accounts payable also decreased 16%.
Short-term borrowings declined 44% to € 682 million at the end of June 2021 (2020: € 1,217 million),
mainly reflecting lower borrowings compared to prior year, partly offset by the reclassification of a
4

 HALF YEAR REPORT 2021

1		2	3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

eurobond (nominal value € 600 million) due to its maturity in October 2021. Liabilities classified as held for sale increased to € 667 million due to the planned divestiture of the Reebok business. Total non-current liabilities increased 14% to € 5.357 billion at the end of June 2021 (2020: € 4.693 billion). Long-term borrowings increased 55% to € 2.473 billion compared to the prior year (2020: € 1.599 billion), reflecting various bond placements in the second half of 2020. The non-current lease liability declined 7% to € 2.206 billion (2020: € 2.374 billion) mainly due to the reclassification related to the planned divestiture of the Reebok business. The total number of shares outstanding remained fairly stable and slightly increased by 33,171 shares to 195,066,060 at the end of June 2021 compared to the prior year. ► SEE FINANCIAL HIGHLIGHTS Shareholders’ equity increased 14% to € 7.106 billion at the end of June 2021 (2020: € 6.230 billion) mainly due to the increase in net income. Consequently, the company’s equity ratio increased 1.8 percentage points from 30.7% to 32.5%. STRUCTURE OF STATEMENT OF FINANCIAL POSITION1 (IN % OF TOTAL LIABILITIES AND EQUITY)

			June 30, 2021	June 30, 2020

Liabilities and equity (€ in millions)			21,877	20,301

Short-term borrowings				3.1	6.0

Accounts payable	9.9	12.7

Long-term borrowings	11.3	7.9

Other liabilities	42.0	41.6
Total equity	33.6	31.9

1 For absolute fig ures, see adidas AG Consolidated Statement of Financial Position.
OPERATING WORKING CAPITAL
Operating working capital decreased 7% to € 4.213 billion at the end of June 2021 (2020: € 4.506 billion).
On a currency-neutral basis, operating working capital was down 5%. Average operating working capital
as a percentage of sales decreased 1.8 percentage points to 21.4% (2020: 23.2%), reflecting the company’s
accelerating top-line momentum and focus on tight inventory management. ► SEE FINANCIAL HIGHLIGHTS
LIQUIDITY ANALYSIS
In the first half of 2021, net cash generated from operating activities was € 1.172 billion (2020 net cash
used: € 824 million). This development was driven by the operating profit generated during the period as
well as the decrease in operating working capital. Net cash used in investing activities rose to € 86 million
(2020 net cash generated: € 51 million). The majority of investing activities in the first half of 2021 related
to spending for property, plant and equipment, such as investments into controlled space and the further
development of the company’s headquarter infrastructure. Net cash used in financing activities totaled
€ 945 million (2020 net cash generated: € 601 million), mainly due to the dividend paid to shareholders.
Also as a result of these developments, cash and cash equivalents increased € 2.133 billion from € 2.018
billion at the end of June 2020 to € 4.151 billion at the end of June 2021. Adjusted net borrowings at June
30, 2021, amounted to € 3.146 billion, representing a decline of € 1.842 billion compared to adjusted net
borrowings of € 4.988 billion at the end of June 2020. This development was mainly due to cash generated
from operating activities, partly offset by an increase in long-term borrowings. The company’s ratio of
adjusted net borrowings over EBITDA amounted to 0.9. ► SEE FINANCIAL HIGHLIGHTS
5

 HALF YEAR REPORT 2021

1			2			3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

BUSINESS PERFORMANCE BY SEGMENT At the beginning of 2021, we launched our new strategy ‘Own the Game’ for the period until 2025. As part of this strategy, we are focusing our growth efforts on the three strategic markets Greater China, EMEA and North America. To be able to execute this strategy successfully, adidas has changed its organizational structure. Since January 1, 2021, adidas manages Greater China as a separate market. The remaining Asia-Pacific (APAC) market now comprises Japan, South Korea, Southeast Asia and the Pacific region. The change reflects the increasing importance of Greater China as a growth market for the company. In addition, adidas created the EMEA (Europe, Middle East and Africa) market. To better leverage economies of scale, the company has integrated the former markets Europe, Russia/CIS and Emerging Markets into the newly formed EMEA market. The markets North America and Latin America remain unchanged. Compared to the first half of 2020 when adidas’ top line was negatively impacted by the very large number of temporary store closures as result of the coronavirus pandemic, sales in all segments continued to recover and grew at a double-digit rate in both Performance and Lifestyle in the first half of 2021. In most segments, lower inventory write-offs and a more favorable pricing mix due to less promotional activity had a positive effect on the gross margin development. At the same time, a less favorable channel and category mix, negative currency developments and higher sourcing costs negatively impacted the gross margin development in most segments. Operating expenses as a percentage of sales declined in all segments, resulting in higher operating margins across all segments. EMEA Sales in EMEA increased 41% on a currency-neutral basis. In euro terms, sales increased 38% to € 3.680 billion. Gross margin in EMEA decreased 0.1 percentage points to 50.8%, as lower inventory write-offs and a more favorable pricing mix due to less promotional activity were more than offset by a less favorable channel and category mix, negative currency developments, and higher sourcing costs. Operating expenses grew 3% to € 1.082 billion, reflecting higher marketing expenditure. As a percentage of sales, operating expenses were down 10.1 percentage points to 29.4%. The operating margin increased 10.0 percentage points to 21.5%. Operating profit in EMEA increased 157% to € 792 million.

EMEA AT A GLANCE € IN MILLIONS
Change
				First half		First half
---	---	---	---	----------------	---	--------------	---	---
(currency-
				year 2021		year 2020 Change	neutral)
--------------------------	---	---	---	------------	-------	--------------------	-----------	---
Net sales					3,680	2,670	38%	41%
Gross profit					1,870	1,360	38%	–

Gross margin				50.8%		50.9% (0.1pp)		–

Segmental operating profit					792	308	157%	–

Segmental operating margin				21.5%		11.5% 10.0pp		–

 HALF YEAR REPORT 2021

1			2			3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

NORTH AMERICA Sales in North America increased 38% on a currency-neutral basis. In euro terms, sales rose 27% to € 2.406 billion. Gross margin in North America increased 4.2 percentage points to 45.5%. Lower inventory write-offs and a more favorable pricing mix due to less promotional activity more than offset a less favorable channel and category mix, as well as higher sourcing costs. Operating expenses decreased 12% to € 661 million, reflecting a decline in both marketing expenditure and operating overhead costs. Operating expenses as a percentage of sales decreased 12.0 percentage points to 27.5%. The operating margin increased 16.2 percentage points to 18.6%. Operating profit in North America rose 893% to € 447 million.

NORTH AMERICA AT A GLANCE € IN MILLIONS
Change
				First half		First half
---	---	---	---	----------------	---	--------------	---	---
(currency-
				year 2021		year 2020	Change neutral)
--------------------------	---	---	---	------------	-------	------------	-------------------	---
Net sales					2,406	1,892	27%	38%
Gross profit					1,094	781	40%	–

Gross margin				45.5%		41.3%	4.2pp	–

Segmental operating profit					447	45	893%	–
Segmental operating margin				18.6%		2.4%	16.2pp	–


GREATER CHINA
Sales in Greater China increased 38% on a currency-neutral basis. In euro terms, sales rose 37% to
€ 2.405 billion.
Gross margin in Greater China was down 2.1 percentage points to 54.0%. Lower inventory write-offs were
more than offset by a less favorable channel, category and pricing mix, negative currency developments
and higher sourcing costs. Operating expenses were up 21% to € 542 million, reflecting an increase in
both marketing expenditure and operating overhead costs. Operating expenses as a percentage of sales
declined 2.9 percentage points to 22.5%. The operating margin increased 0.8 percentage points to 31.5%.
Operating profit in Greater China rose 40% to € 758 million.
GREATER CHINA AT A GLANCE € IN MILLIONS
----------------------------------------	---	---	---	---	---	---	---	---
Change
				First half		First half
---	---	---	---	----------------	---	--------------	---	---
(currency-
				year 2021		year 2020	Change neutral)
--------------------------	---	---	---	------------	-------	------------	-------------------	---
Net sales					2,405	1,757	37%	38%
Gross profit					1,299	987	32%	–

Gross margin				54.0%		56.2%	(2.1pp)	–

Segmental operating profit					758	540	40%	–

Segmental operating margin				31.5%		30.7%	0.8pp	–


7

 HALF YEAR REPORT 2021

1			2			3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

ASIA-PACIFIC Sales in Asia-Pacific increased 26% on a currency-neutral basis. In euro terms, sales rose 21% to € 1.135 billion. Gross margin in Asia-Pacific declined 0.3 percentage points to 52.4%. Lower inventory write-offs were more than offset by a less favorable channel, category and pricing mix, negative currency developments and higher sourcing costs. Operating expenses were down 7% to € 317 million, reflecting a decline in both marketing expenditure and operating overhead costs. As a percentage of sales, operating expenses decreased 8.5 percentage points to 27.9%. The operating margin increased 8.1 percentage points to 25.1%. Operating profit in Asia-Pacific rose 78% to € 285 million.

ASIA-PACIFIC AT A GLANCE € IN MILLIONS
Change
				First half		First half
---	---	---	---	----------------	---	--------------	---	---
(currency-
				year 2021		year 2020 Change	neutral)
--------------------------	---	---	---	------------	-------	--------------------	-----------	---
Net sales					1,135	939	21%	26%
Gross profit					595	494	20%	–

Gross margin				52.4%		52.6% (0.3pp)		–

Segmental operating profit					285	160	78%	–
Segmental operating margin				25.1%		17.1%	8.1pp	–


LATIN AMERICA
Sales in Latin America increased 81% on a currency-neutral basis. In euro terms, sales rose 59% to
€ 645 million.
Gross margin in Latin America increased 1.5 percentage points to 48.2%, as lower inventory write-offs and
a more favorable pricing mix due to less promotional activity more than offset a less favorable channel
mix, negative currency developments and higher sourcing costs. Operating expenses were down 3% to
€ 190 million, reflecting a decline in operating overhead costs. Operating expenses as a percentage of
sales were down 18.5 percentage points to 29.4%. The operating margin increased 19.1 percentage points
to 18.8%. Operating profit in Latin America rose to € 121 million.
LATIN AMERICA AT A GLANCE € IN MILLIONS
----------------------------------------	---	---	---	---	---	---	---	---
Change
				First half		First half
---	---	---	---	----------------	---	--------------	---	---
(currency-
				year 2021		year 2020 Change	neutral)
--------------------------	---	---	---	------------	-----	--------------------	-----------	---
Net sales					645	406	59%	81%
Gross profit					311	189	64%	–

Gross margin				48.2%		46.7%	1.5pp	–

Segmental operating profit					121	(1)	n.a.	–

Segmental operating margin				18.8%		(0.2%) 19.1pp		–


8

HALF YEAR REPORT 2021 1 2 3 AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) OUTLOOK2 GLOBAL ECONOMIC GROWTH TO RECOVER IN 20213 Global GDP is forecast to grow 5.6% in 2021, with the recovery projected to be more robust than initially expected. Due to rapid vaccination progress in major economies, the recovery is expected to be unevenly distributed and, in some cases, delayed. It largely reflects sharp rebounds in some major economies amid highly unequal vaccine access, with many poorer countries facing subdued prospects. The strength of the near-term global recovery is largely attributable to a few major economies, such as the United States and China, with many emerging market and developing economies lagging behind. The United States and China are each expected to contribute over one-quarter of global growth in 2021. SPORTING GOODS INDUSTRY TO RECOVER NOTABLY IN 2021 In the absence of any major delay in the pandemic recovery or other macroeconomic shocks, we expect the global sporting goods industry to recover notably in 2021. Consumer confidence is forecast to rebound amid widespread vaccination and effective pandemic management as well as major sports events returning to the global stage. While extended lockdown periods, quarantine measures and physical store closures are still forecast to have an adverse impact in the short term, the sporting goods industry is projected to remain fundamentally attractive in the long term, as existing global trends are accelerating. Sports-inspired apparel and footwear (‘athleisure’) keeps evolving as a structural component of the broader fashion landscape, complemented by increasing sports participation rates as well as rising awareness for health and wellness. In addition, sustainability is expected to further gain in importance amid growing environmental awareness of consumers. Moreover, purchasing behavior is forecast to further shift toward online and social channels, and consumer insights generation along with the creation of premium shopping experiences become increasingly important. For the sporting goods sector, risks related to disruptions caused by the coronavirus pandemic, supply chain challenges, re-escalating trade tensions as well as the geo-political situation remain. ADIDAS INCREASES OUTLOOK FOR FULL YEAR 2021 While adidas continues to be impacted by Covid-19-related lockdowns, industry-wide supply-chain challenges and the geo-political situation, the company has increased its top- and bottom-line outlook for 2021. Given the accelerating top-line momentum, the company now expects currency-neutral sales to increase at a rate of up to 20% year-over-year in 2021, driven by strong double-digit improvements in all markets. This new outlook reflects sales growth of up to 7% in the second half of the year compared to the 2020 level, which will be fueled by an array of innovative product releases, including the re-introduction of NMD, one of adidas’ most successful franchises in recent history. In addition, the company’s Futurecraft 4D 2 This Management Report contains forward-looking statements that reflect Management’s current view with respect to the future development of adidas. The outlook is based on estimates that we have made on the basis of all the information available to us at the time of completion of this First Half Year Report. In addition, such forward-looking statements are subject to uncertainties as described in the Risk and Opportunity Report of the adidas 2020 Annual Report which are beyond the control of the company. In case the underlying assumptions turn out to be incorrect or described risks or opportunities materialize, actual results and developments may materially deviate (negatively or positively) from those expressed by such statements. adidas does not assume any obligation to update any forward-looking statements made in this Management Report beyond statutory disclosure obligations. 3 Source: World Bank, Global Economic Prospects. 9

HALF YEAR REPORT 2021 1 2 3 AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) portfolio will be significantly expanded by the introduction of the 4D FWD Pulse. The scaling of the well- established ZX franchise will continue with the introduction of the ZX 5K Boost. The Forum franchise, after having been successfully incubated throughout the first two quarters of the year, will quadruple in size during the second half of the year driven by several iterations as well as dedicated marketing activities. In addition, major sport events, including the Olympic Games in Japan, the start of the club football season in Europe and the kick-off to the NFL season in the US, as well as grassroots activities around the world will provide ideal platforms to tell brand and product stories in front of global and local audiences. The company’s full-year gross margin forecast continues to be for a level of around 52.0%. The operating margin is now expected to increase to a level of between 9.5% and 10% (previously: 9% to 10%). Net income from continuing operations is now projected to increase to a level of between € 1.4 billion and € 1.5 billion (previously: € 1.25 billion to € 1.45 billion). The company’s profitability outlook continues to include temporary stranded costs related to the intended divestiture of Reebok. In 2021, these costs are expected to amount to around € 250 million on the operating profit level and to impact net income from continuing operations by approximately € 200 million. The medium-term growth outlook is not impacted by these costs as adidas anticipates that only around 30% of the € 250 million will reoccur in 2022 and that by 2023 the stranded costs will be fully eliminated. RISKS AND OPPORTUNITIES Uncertainties regarding the further development of the coronavirus pandemic remain high, in particular in light of rising infection rates in Asia and Europe. Compared to the assessment in the 2020 Annual Report, the company’s risk profile has slightly deteriorated due to an increased risk related to consumer demand as a consequence of the geo-political situation and product supply due to additional supply chain challenges. Macroeconomic, regulatory and currency risks could also have a high impact on the company’s financial results. While we still see major opportunities related to consumer demand and product offering as well as data analytics in the mid to long term, we consider upside potential related to short-term opportunities as limited. Nevertheless, given the company’s strong risk-bearing capacity due to its current liquidity position and financial health, Management does not foresee any material jeopardy to the viability of the company as a going concern. We remain confident that the earnings strength forms a solid foundation for our business development and provides the necessary resources to pursue future opportunities. 10

 HALF YEAR REPORT 2021

1				2		3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION ADIDAS AG CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS) € IN MILLIONS June 30, 2021 June 30, 2020 Change in % December 31, 2020



Assets
Cash and cash equivalents					4,151	2,018	105.7	3,994
----------------------------------	---	---	---	---------	---------	-------	--------	-------
Short-term financial assets					–	6	n.a.	0

Accounts receivable					2,324	1,869	24.4	1,952

Other current financial assets					810	653	24.0	702

Inventories					4,054	5,213	(22.2)	4,397

Income tax receivables					66	121	(45.5)	109

Other current assets					1,057	1,051	0.6	999

Assets classified as held for sale					1,674	–	n.a.	0

Total current assets				14,136	10,931		29.3	12,154

					–	–
Property, plant and equipment 2,065 2,293 (9.9) 2,157

--------------------------	---	---	---	---	-------	-------	--------	-----
Right-of-use assets					2,430	2,733	(11.1)	2,430

Goodwill					1,199	1,258	(4.7)	1,208

Trademarks					16	820	(98.0)	750

Other intangible assets					261	284	(7.9)	252

Long-term financial assets					276	351	(21.4)	353

Other non-current financial assets 243 340 (28.7) 414
Deferred tax assets					1,154	1,166	(1.0)	1,233
------------------------	---	---	---	---	-------	-------	--------	-----

Other non-current assets					96	124	(22.5)	103

Total non-current assets 7,741 9,369 (17.4) 8,899

-------------	---	---	---	---------	---------	---	------	-------
Total assets				21,877	20,301		7.8	21,053

 HALF YEAR REPORT 2021

1				2		3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

ADIDAS AG CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS) € IN MILLIONS June 30, 2021 June 30, 2020 Change in % December 31, 2020



Liabilities and equity
Short-term borrowings					682	1,217	(44.0)	686
---------------------------------------	---	---	---	---	--------	--------	--------	------
Accounts payable					2,165	2,575	(15.9)	2,390

Current lease liabilities					480	639	(24.9)	563

Other current financial liabilities					340	265	28.5	446

Income taxes					686	588	16.5	562

Other current provisions					1,433	1,373	4.3	1,609

Current accrued liabilities					2,260	1,933	16.9	2,172

Other current liabilities					450	547.0	(17.6)	398

Liabilities classified as held for sale					667	–	n.a.	–

Total current liabilities					9,161	9,137	0.3	8,827

Long-term borrowings					2,473	1,599	54.7	2,482

Non-current lease liabilities 2,206 2,374 (7.1) 2,159

---	---	---	---	---	---	---	---	---
Other non-current financial liabilities 98 46 113.0 115

--------------------------------	---	---	---	---	-----	-----	-------	---
Pensions and similar obligations					234	245	(4.5)	284

Deferred tax liabilities 189 224 (15.7) 241
Other non-current provisions					134	179	(25.4)	229
-------------------------------	---	---	---	---	-----	-----	--------	---

Non-current accrued liabilities					6	9	(35.4)	8

Other non-current liabilities					18	16	11.9	17

Total non-current liabilities 5,357 4,693 14.2 5,535

-------------------------	---	---	---	---	--------	-------------	-------	------
Share capital					195	195	0.0	195

Reserves					(190)	(2) 8,799.1		(474)

Retained earnings					7,101	6,037	17.6	6,733

Shareholders’ equity					7,106	6,230	14.0	6,454

Non-controlling interests					253	240	5.2	237


Total equity					7,358	6,471	13.7	6,691

Total liabilities and equity 21,877 20,301 7.8 21,053

---	---	---	---	---	---	---	---	---

						HALF YEAR REPORT 2021

		1			2				3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

CONDENSED CONSOLIDATED INCOME STATEMENT ADIDAS AG CONDENSED CONSOLIDATED INCOME STATEMENT (IFRS) € IN MILLIONS1

										Second		Second

  First half     First half         quarter     quarter
year 2021    year 2020    Change    2021    2020    Change

Net sales						10,345		7,733	33.8%	5,077		3,352	51.5%
Cost of sales 4,983 3,835 30.0% 2,446 1,631 49.9%

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Gross profit 5,362 3,898 37.5% 2,632 1,720 53.0%

---	---	---	---	---	---	---	---	---	---	---	---	---	---
(% of net sales) 51.8% 50.4% 1.4pp 51.8% 51.3% 0.5pp
Royalty and commission income 31 24 29.5% 17 9 95.7%

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Other operating income 10 20 (50.2%) 2 18 (86.1%)

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Other operating expenses 4,154 4,156 (0.0%) 2,107 2,010 4.9%

---	---	---	---	---	---	---	---	---	---	---	---	---	---
(% of net sales) 40.2% 53.8% (13.6pp) 41.5% 60.0% (18.5pp)

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Marketing and point-of-sale expenses 1,157 1,174 (1.4%) 616 525 17.2%

---	---	---	---	---	---	---	---	---	---	---	---	---	---
(% of net sales) 11.2% 15.2% (4.0pp) 12.1% 15.7% (3.5pp)

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Operating overhead expenses2 2,997 2,983 0.5% 1,492 1,484 0.5%

---	---	---	---	---	---	---	---	---	---	---	---	---	---
(% of net sales) 29.0% 38.6% (9.6pp) 29.4% 44.3% (14.9pp)

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Operating profit / (loss) 1,248 (215) n.a. 543 (263) n.a.

---	---	---	---	---	---	---	---	---	---	---	---	---	---
(% of net sales) 12.1% (2.8%) 14.8pp 10.7% (7.8%) 18.5pp
Financial income							6	17	(67.2%)		4	13	(70.0%)
------------------	---	---	---	---	---	---	----	---	---------	---	----	----	-------

Financial expenses							75	82	(8.7%)		37	42	(11.0%)

Income / (loss) before taxes 1,179 (279) n.a. 510 (292) n.a.

---	---	---	---	---	---	---	---	---	---	---	---	---	---
(% of net sales) 11.4% (3.6%) 15.0pp 10.0% (8.7%) 18.8pp
Income taxes							289	(63)		n.a. 123		(49)	n.a.
------------	---	---	---	---	---	---	-----	----	---	----------	---	------	----

(% of / income / (loss) before taxes) 24.5% 22.4% 2.1pp 24.0% 16.9% 7.1pp

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Net income / (loss) from continuing operations 890 (217) n.a. 387 (243) n.a.

---	---	---	---	---	---	---	---	---	---	---	---	---	---
(% of net sales) 8.6% (2.8%) 11.4pp 7.6% (7.2%) 14.9pp
Gain / (loss) from discontinued operations, net of tax 72 (74) n.a. 20 (74) n.a.

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Net income / (loss) 962 (291) n.a. 407 (317) n.a.
(% of net sales) 9.3% (3.8%) 13.1pp 8.0% (9.4%) 17.5pp
Income / (loss) attributable to shareholders 955 (264) n.a. 397 (295) n.a.

---	---	---	---	---	---	---	---	---	---	---	---	---	---
(% of net sales) 9.2% (3.4%) 12.6pp 7.8% (8.8%) 16.6pp
Net income / (loss) attributable to non-controlling interests 7 (27) n.a. 11 (22) n.a.

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Basic earnings per share from continuing operations (in €) 4.52 (0.97) n.a. 1.93 (1.13) n.a.

---	---	---	---	---	---	---	---	---	---	---	---	---	---
Diluted earnings per share from continuing operations (in €) 4.52 (0.97) n.a. 1.93 (1.13) n.a.

---	---	---	---	---	---	---	---	---	---	---	---	---	---

Basic earnings per share from continuing and discontinued
							4.89	(1.35)		n.a. 2.03		(1.51)	n.a.
---	---	---	---	---	---	---	--------	-------	---	--------------	---	----------	-----
operations (in €)
D il u	t e d e a r	n i n g s per share from continuing and discontinued
------	--------------	------------------------------------------------------	---	---	---	---	-------	-------	---	-------------	---	---------	-----
		)					4.89	(1.35)		n.a. 2.03		(1.51)	n.a.
op e	r a t io n s	(i n €
1 Comparative informa tion for 2020 has been adjusted due to the classification of th e R eebok business a s discontinued o pe rations.

---	---	---	---	---	---	---	---	---	---	---	---	---	---
2 Aggregated distribution and selling expenses, general and administration expenses, sundry expenses and impairment losses (net) on accounts receivable and contract assets.

 HALF YEAR REPORT 2021

1			2					3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ADIDAS AG CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS) € IN MILLIONS

					First half		First half		Second		Second
					year 2021		year 2020	quarter 2021
										quarter 2020
Net income / (loss) after taxes 962 (291) 407 (317)
Items of other comprehensive income that
will not be reclassified subsequently to
profit or loss

---	---	---	---	---	---	---	---	---	---	---	---
Remeasurements of defined benefit plans
						43		0		6	(19)
---	---	---	---	---	---	----	---	---	---	---	----
(IAS 19), net of tax1
Net (loss) / gain on other equity investments
----------------------------------------------	---	---	---	---	---	-----	---	-----	---	---	---
						(1)		(2)		3	(2)
(IFRS 9), net of tax
Subtotal of items of other comprehensive
-----------------------------------------	---	---	---	---	---	---	---	---	---	---	---

income that will not be reclassified 41 (1) 10 (21) 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
						100		142		(6)	(120)
---	---	---	---	---	---	-----	---	-----	---	-----	-----
net foreign investment hedges, net of tax
Net (loss) / gain on cost of hedging reserve –
-----------------------------------------------	---	---	---	---	---	-----	---	---	---	-----	---
						(5)		9		(2)	9
options, net of tax
Net gain / (loss) on cost of hedging reserve –
-----------------------------------------------	---	---	---	---	---	----	---	------	---	---	---
						10		(17)		5	23
forward contracts, net of tax
Currency translation differences 145 (177) 8 (34)

Subtotal of items of other comprehensive


income that will be reclassified to profit or 251 (44) 5 (123)
loss when specific conditions are met
Other comprehensive income						292		(45)		14	(143)
---------------------------	---	---	---	---	---	------	---	-------	---	-----	------

Total comprehensive income 1,254 (336) 422 (460)

---	---	---	---	---	---	---	---	---	---	---	---
Attributable to shareholders of adidas AG 1,239 (311) 413 (432)

---	---	---	---	---	---	---	---	---	---	---	---
Attributable to non-controlling interests 15 (24) 8 (28)
1 Includes actuarial gains or losses relating to defined benefit obli ga tions, return on plan as sets (excluding inter e st income) and the ass e t c eiling effect.

							HALF YEAR REPORT 2021

	1				2				3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ADIDAS AG CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IFRS) € IN MILLIONS Cost of Cumulative Cost of hedging

					currency		hedging	reserve -				Share-		Non-
Share Capital translation Hedging reserve - forward Other Retained holders’ controlling Total

capital   reserve    differences   reserve    options    contracts   reserves   earnings    equity    interests   equity

Balance at 196 887 (470) (150) (10) 6 (218) 6,555 6,796 261 7,058 December 31, 2019 Other comprehensive

					(180)		142	9	(17)	(1)		(48)		3	(45)
income
Net income (264) (264) (27) (291)

Total comprehensive (180) 142 9 (17) (1) (264) (311) (24) (336) income Repurchase of

			(1)								(256)	(257)			(257)
adidas AG shares
Repurchase of
--------------	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
adidas AG shares due to
equity-settled share-			(0)								(14)	(14)			(14)
---------------------	---	---	---	---	---	---	---	---	---	---	------	------	---	---	----
based payment

---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Reissuance of treasury
shares due to e quity-
settled share-based			0								17		17		17
--------------------	---	---	---	---	---	---	---	---	---	---	----	---	---	---	---
payment

---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Equity-settled share-
based pa yment											(1)		(1)		(1)
--------------	---	---	---	---	---	---	---	---	---	---	-----	---	---	---	---
First-time consolidation
due to obtaining control
														3	3
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
in accordance with
IFRS 10

---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance at 195 887 (650) (9) (1) (11) (220) 6,037 6,230 240 6,471
June 30, 2020
Balance at

 195      887      (850)      (250)      (3)      (23)      (235)      6,733      6,454      237     6,691

December 31, 2020 Other comprehensive

					137		100	(5)	10	41		284		9	292
income
Net income											955	955		7	962
----------	---	---	---	---	---	---	---	---	---	---	-------	------	---	----	----

Total comprehensive 137 100 (5) 10 41 955 1,239 15 1,254 income Repurchase of adidas AG shares due to

			(1)								(15)	(15)			(15)
equity-settled share-
based payment

---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Reissuance of treasury
shares due to e quity-
			1								14		15		15
---	---	---	---	---	---	---	---	---	---	---	----	---	---	---	---
settled share-based
payment

----------------	---	---	---	---	---	---	---	---	---	---	-------	-------	---	---	-----
Dividend payment											(585)	(585)			(585)

Equity-settled share- based payment (1) (1) (1)

Balance at

195    887    (712)    (150)    (7)    (14)    (194)    7,101    7,106    253   7,358

June 30, 2021

					HALF YEAR REPORT 2021

	1			2			3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

CONSOLIDATED STATEMENT OF CASH FLOWS ADIDAS AG CONSOLIDATED STATEMENT OF CASH FLOWS (IFRS) € IN MILLIONS

								First half		First half
								year 2021		year 2020

Operating activities:
Income / (loss) before taxes									1,179	(279)
----------------------------	---	---	---	---	---	---	---	---	-------	-------

Adjustments for:
Depreciation, amortization and impairment losses 568 645
Reversals of impairment losses									(7)	(1)
---------------------------------------	---	---	---	---	---	---	---	---	-----	----

Interest income									(5)	(16)

Interest expense									69	77

Unrealized foreign exchange losses, net									9	9

Losses on sale of property, plant and equipment and intangible assets, net 4 3

--------------------------------	---	---	---	---	---	---	---	---	-----	---
Other non-cash (income) /expense									(6)	0

Operating profit before working capital changes 1,810 438

---	---	---	---	---	---	---	---	---	---	---
(Increase) / decrease in receivables and other assets (553) 610

Decrease / (increase) in inventories									13	(1,142)

Decrease in accounts payable and other liabilities (82) (539)

---	---	---	---	---	---	---	---	---	---	---
Cash generated from / (used in) operations before taxes 1,189 (632)

-----------------	---	---	---	---	---	---	---	---	-------	-----
Income taxes paid									(112)	(186)

Net cash generated from / (used in) operating activities – continuing operations 1,077 (819)


Net cash generated from / (used in) operating activities – discontinued operations 95 (6)

Net cash generated from / (used in) operating activities 1,172 (824)



Investing activities:
Purchase of trademarks and other intangible assets (53) (33)
Purchase of property, plant and equipment									(130)	(176)
---------------------------------------------------	---	---	---	---	---	---	---	---	-------	-----

Proceeds from sale of property, plant and equipment									0	2

Proceeds from sale of a disposal group									12	–

Proceeds from disposal of discontinued operations									29	–

Proceeds from sale of short-term financial assets									0	288

Purchase of investments and other long-term assets 55 (37)

-----------------	---	---	---	---	---	---	---	---	---	---
Interest received									5	16

Net cash (used in) / generated from investing activities – continuing operations (81) 59

---	---	---	---	---	---	---	---	---	---	---
Net cash used in investing activities – discontinued operations (5) (8)

Net cash (used in) / generated from investing activities 86 51



16

				HALF YEAR REPORT 2021

	1			2		3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

ADIDAS AG CONSOLIDATED STATEMENT OF CASH FLOWS (IFRS) € IN MILLIONS

							First half		First half
							year 2021	year 2020

Financing activities:
Reverse transaction of buyback of Eurobonds								–	11
Interest paid								(54)	(66)

Repayments of lease liabilities								(267)	(226)

Dividend paid to shareholders of adidas AG								(585)	–

Repurchase of treasury shares								–	(257)

Repurchase of treasury shares due to share-based payments (15) (14)

---	---	---	---	---	---	---	---	---	---
Proceeds from reissuance of treasury shares due to share-based payments 12 12

---	---	---	---	---	---	---	---	---	---
(Repayments of) / proceeds from short-term borrowings (17) 1,165

---	---	---	---	---	---	---	---	---	---
Net cash (used in) / generated from financing activities – continuing operations (926) 624

---	---	---	---	---	---	---	---	---	---
Net cash used in financing activities – discontinued operations (19) (23)

Net cash (used in) / generated from financing activities (945) 601

Effect of exchange rates on cash								15	(29)

Increase / (decrease) of cash and cash equivalents 157 (201)

Cash and cash equivalents at beginning of year 3,994 2,220


Cash and cash equivalents at end of period 4,151 2,018

---	---	---	---	---	---	---	---	---	---

HALF YEAR REPORT 2021 1 2 3 AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) EXPLANATORY NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) AS AT JUNE 30, 2021 01 GENERAL The interim consolidated financial statements of adidas AG and its subsidiaries (collectively ‘adidas,’ the ‘Group’ or ‘the company’) for the first half year ending June 30, 2021, are prepared in compliance with International Financial Reporting Standards (IFRS), as endorsed by the European Union (EU). The company applied all International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and Interpretations of the IFRS Interpretations Committee effective as at June 30, 2021, insofar as they have already been adopted into European law. These interim consolidated financial statements were prepared in compliance with International Accounting Standard IAS 34 ‘Interim Financial Reporting.’ Accordingly, these interim consolidated financial statements do not include all of the information and notes required for consolidated financial statements at financial year-end. Therefore, these interim consolidated financial statements should be read in conjunction with the 2020 annual consolidated financial statements. The accounting policies as well as principles, practices and presentation applied in the consolidated financial statements for the year ending December 31, 2020, also apply to the interim consolidated financial statements for the first half year ending June 30, 2021. The following new accounting standards and interpretations as well as amendments to existing standards, which were issued by the IASB and are effective in the EU for financial years beginning on January 1, 2021, have been applied for the first time: Interest Rate Benchmark Reform Phase 2 – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 ─ Amendments to IFRS 4 Incurance Contracts - deferral of IFRS 9 ─ These do not have any material impact on the interim consolidated financial statements of adidas AG. Further information can be found in the 2020 Annual Report. New accounting standards and interpretations as well as amendments to existing standards that are not yet effective in the EU or effective for financial years beginning after January 1, 2021, are not expected to have any material impact on the consolidated financial statements. The amendment to IFRS 16 ‘Covid-19-Related Rent Concessions’ published by the IASB on May 28, 2020, and effective for financial years beginning on or after June 1, 2020, was originally limited to rent concessions that were due on or before June 30, 2021. The IASB has decided to extend the period during which the concessions can be applied to financial years beginning on or after April 1, 2021. This decision will not impact adidas, as adidas has not applied and will not apply the option provided in this amendment regarding the treatment of rent concessions relating to the coronavirus pandemic. The option allows lessees to treat rental concessions in connection with the coronavirus pandemic not as lease modifications within the meaning of IFRS 16 but to realize the effects of the rental concessions in the periods in which they are granted. 18

HALF YEAR REPORT 2021 1 2 3 AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) The preparation of financial statements in conformity with IFRS requires the use of assumptions and estimates that affect reported amounts and related disclosures. The first half of 2020 was significantly impacted by the coronavirus pandemic. Further information can be found in Note 8 of the first half year report 2020. Compared to the first half of 2020, business development in the first half of 2021 was less impacted by the effects of the coronavirus pandemic. Nevertheless, due to the ongoing pandemic, it is still difficult to predict the resulting effects on assets and liabilities as well as income and expenses. Estimates and assumptions relevant to the financial statements were made to the best of our knowledge, based on current events and measures. In particular, judgments and discretion are used in assessing the recoverability of deferred tax assets, in impairment tests for non-financial assets, in determining allowances for inventories and accounts receivable, and in the calculation of provisions. There were no changes in the scope of consolidation in the first half of 2021. The interim consolidated financial statements and the interim Group management report were not audited in accordance with § 317 German Commercial Code (Handelsgesetzbuch – HGB) nor reviewed in accordance with § 115 section 5 German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) by an auditor. Costs that are incurred unevenly during the financial year are anticipated or deferred in the interim consolidated financial statements only if it would be also appropriate to anticipate or defer such costs at the end of the financial year. The results of operations for the first half year ending June 30, 2021, are not necessarily indicative of results to be expected for the entire year. The interim consolidated financial statements are presented in euros (€) and, unless otherwise stated, all values are presented in millions of euros (€ in millions). Due to rounding principles, numbers presented may not sum up exactly to totals provided. 02 REVENUE The sales of the company in certain product categories are seasonal, and therefore, revenues and attributable earnings may vary within the financial year. In the years before the coronavirus pandemic, sales and earnings tended to be strongest in the first and third quarters of the financial year because these coincided with the launch of the spring/summer and fall/winter collections, respectively. In the first half of 2021, sales stabilized but variations may still occur due to the ongoing coronavirus pandemic. Shifts in the share of sales and attributable earnings of particular product categories or in the regional composition may occur throughout the year. A disaggregation of revenue into product categories is contained in these Notes. ► SEE NOTE 08 03 DISCONTINUED OPERATIONS On February 16, 2021, the company decided to begin a formal process aimed at divesting Reebok. Due to the concrete plans to sell Reebok and the approval by the respective committees, the Reebok operating business is reported as discontinued operations and classified as a disposal group held for sale at the end of the first quarter. The fair value was determined based on the basis of existing non-binding purchase price offers at this point of time. The transaction is expected to be completed later in 2021. 19

 HALF YEAR REPORT 2021

1		2	3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

Reebok was previously neither classified as assets held for sale nor as discontinued operations. The prior year figures of the consolidated income statement and the consolidated statement of cash flows have been restated to show the discontinued operations separately from continuing operations. The results of the Reebok operations are shown as discontinued operations in the consolidated income statement: DISCONTINUED OPERATION REEBOK First half First half

€ in millions			year 2021	year 2020
Operational business
Net Sales				823	600
Expenses				(666)	(658)

Gain / (loss) from operating activities before taxes 157 (58)

------------	---	---	---	------	----
Income taxes				(78)	(12)
Gain / (loss) from operating activities, net of tax 78 (69)

-----------------------------	---	---	---	------	---
Transaction costs, net of tax				(10)	–
Gain / (loss) from discontinued operations, net of tax 68 (69)

---	---	---	---	---	---
Basic earnings per share from discontinued operations (€) 0.35 (0.36)
Diluted earnings per share from discontinued operations (€) 0.35 (0.36)
Rounding differences may arise in percentages and totals for figures presented in millions as calculation is alway s b ased on the figures s ta ted in thousands.
Gains from discontinued operations for the first half year ending June 30, 2021, in an amount of
€ 72 million (2020: losses of € 74 million) are entirely attributable to the shareholders of adidas AG. The
gains from discontinued operations also include besides Reebok an amount of € 4 million (2020: loss
€ 5 million) relating to divestitures in previous years.
Total net loss of cumulative foreign currency translation differences for discontinued operations reflected
within equity amount to € 225 million. For the first half year 2021 the loss within equity amount to
€ 125 million. For 2020 the gain within equity amount to € 368 million.
The income tax expense related to discontinued operations amounts to € 76 million. This amount includes
the revaluation of deferred tax assets and liabilities as a result of the tax rate change in the UK
(€ 34 million).

 HALF YEAR REPORT 2021

1	2	3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

04 ASSETS AND LIABILITIES HELD FOR SALE At June 30, 2021, the disposal group Reebok was stated at carrying amount and comprised the following major classes of assets and liabilities: GROUP OF ASSETS AND LIABILITIES Assets classified as held-for-sale € in millions June 30, 2021


Accounts receivable				207
Inventories				388

Other current financial assets				36

Other current assets				42

Total current assets				673

Long-term financial assets				12
Property, plant and equipment				66

Right-of-use assets				108

Goodwill				27

Trademarks				757

Deferred tax asset				24

Other non-current financial assets				6

Total non-current assets				1,000
Total assets				1,673
Liabilities classified as held for sale € in millions June 30, 2021

-----------------------	---	---	---	---
Accounts payable				174
Current lease liability				29

Other current provisions				60

Other current accrued liabilities				112

Other current financial liabilities				12

Other current liabilities				18

Total current liabilities				405

Non-current lease liability				123
Provision for pensions and similar obligations				6

Deferred tax liability				108

Other non-current provisions				18

Other non-current accrued liabilities				2

Other non-current financial liablilities				4

Other non-current liablilities				2

Total non-current liabilities				263

Total liabilities				667

At June 30, 2021, the company assessed the fair value of the disposal group on the basis of existing non- binding purchase price offers at this point of time. There was no indication for any impairment of the disposal group. Further information on the allocation of goodwill is contained in these Notes. ► SEE NOTE 09


21

 HALF YEAR REPORT 2021

1				2				3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

05 SHAREHOLDERS’ EQUITY During the period from January 1, 2021, to June 30, 2021, the nominal capital of adidas AG remained unchanged. Consequently, on June 30, 2021, the nominal capital of adidas AG amounted to € 200,416,186 divided into 200,416,186 registered no-par-value shares. In the 2016 financial year, adidas AG introduced an employee stock purchase plan in favor of employees of adidas AG and its affiliated companies. adidas AG purchased shares in connection with this employee stock purchase plan in the first six months of the 2021 financial year. More details on the repurchase of adidas AG shares and use of treasury shares in connection with the employee stock purchase plan in the first six months of the 2021 financial year are set out in the tables ‘Repurchase of adidas AG shares and use of treasury shares in the context of the employee stock purchase plan2021’ and ‘Repurchase of adidas AG shares and use of treasury shares in the context of the employee stock purchase plan 2021/matching shares’. REPURCHASE OF ADIDAS AG SHARES AND USE OF TREASURY SHARES IN THE CONTEXT OF THE EMPLOYEE STOCK PURCHASE PLAN 2021 Total price

					in €	Average		Amount		Amount
				(excluding		purchase		in the		in the
				incidental			price	nominal		nominal
Purchase Number of purchasing per share capital capital Issuance date
date shares costs) in € in € in % to employees
January 8,											January 12,
-----------	---	------	---	------------	---	------	---	------	---	----	------------	-----
		23,652		6,992,862.30		295.66		23,652		0.01
2021												2021
April 9,											April 13,
		24,032		6,757,458.75		281.19		24,032		0.01
2021												2021

REPURCHASE OF ADIDAS AG SHARES AND USE OF TREASURY SHARES IN THE CONTEXT OF THE EMPLOYEE STOCK PURCHASE PLAN 2021/ MATCHING SHARES Total price

					in €	Average		Amount		Amount
				(excluding		purchase		in the		in the
				incidental			price	nominal		nominal
Purchase Number of purchasing per share capital capital Issuance date
date shares costs) in € in € in % to employees
January 8,											January 12,
-----------	---	-----	---	------------	---	------	---	-----	---	-----	------------	-----
		2,843		840,550.80		295.66		2,843		0.001
2021												2021
April 9,											April 13,
		3,817		1,073,286.45		281.19		3,817		0.002
2021												2021

On May 12, 2021, the Annual General Meeting of adidas AG approved the proposal of the Executive Board and Supervisory Board on the appropriation of retained earnings for the 2020 financial year in the amount of € 3.00 per share. The dividend was paid on May 18, 2021. Based on the number of dividend-entitled shares at the time of the Annual General Meeting, this results in a dividend distribution of € 585,198,180. On June 30, 2021 adidas AG held a total of 5,350,126 treasury shares, corresponding to a notional amount of € 5,350,126 in the nominal capital and consequently 2.67% of the nominal capital. In accordance with § 71b German Stock Corporation Act (Aktiengesetz - AktG), the treasury shares held directly or indirectly do not confer any rights to the company. 22

							HALF YEAR REPORT 2021

	1					2				3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

06 FINANCIAL INSTRUMENTS CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS AND THEIR FAIR VALUES INCLUDING HIERARCHY ACCORDING TO IFRS 13 € IN MILLIONS

					Category				June 30, 2021					December 31, 2020

    Carrying    Fair             Carrying    Fair
    amount    value   Level 1   Level 2   Level 3    amount    value   Level 1   Level 2   Level 3


Financial assets
Cash and cash equivalents
Cash and cash equivalen ts Amortized 2,383 – – – – 1,762 – – – –
					cost
---	---	---	---	---	-----	---	---	---	---	---	---	---	---	---	---
Fair value

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----
through
Cash equivalents						1,768	1,768	–	1,768	–	2,232	2,232		– 2,232	–
----------------	---	---	---	---	---	-----	-----	---	-----	---	-----	-----	---	-------	---
profit or
loss

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----
Fair value
through
Short-term financial assets							– –	–	–	–		0	0	–	0 –
---------------------------	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
profit or
loss

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----
Amortized
Accounts receivable					cost	2,324	–	–	–	–	1,952		–	–	– –
-------------------	---	---	---	---	-----	-----	---	---	---	---	-----	---	---	---	---
Other current financ ial assets

Derivatives used in hedge					Hedge

accounting    119    119    –    119    –    163    163    –    163    –

accounting

					Fair value
Derivatives not used in hedge					through
							32 32	–	32	–		32	32	–	32 –
accounting					profit or
loss

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----
Fair value
through
Promissory notes						147	147	–	–	147		6	6	–	– 6
----------------	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
profit or
loss

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----
Amortized
Other financial assets					cost	511	–	–	–	–	511		–	–	– –
----------------------	---	---	---	---	-----	---	---	---	---	---	---	---	---	---	---
Long-term financial asse ts

Fair value

					through
Other equity investments profit or 89 89 – – 89 89 89 – – 89
loss

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----
Fair value
through
Other equity investments					other		73 73	–	–	73		80	80	–	– 80
------------------------	---	---	---	---	------	---	-----	---	---	---	---	---	---	---	----
compre-
hensive
					income
---	---	---	---	---	------	---	-------	---	---	-----	---	---	---	---	-----
Fair value
through
Other investments							26 25	–	251	–		35	37	–	372 –
-----------------	---	---	---	---	---	---	-----	---	---	---	---	---	---	---	-----
profit or
loss

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----
Amortized
Other investments					cost		87 –	–	–	–	149		–	–	– –
-----------------	---	---	---	---	-----	---	----	---	---	---	---	---	---	---	---
Loans Amort iz e d 0 0 – – – 0 0 – – –
					c o s t
---	---	---	---	---	---------	---	---	---	---	---	---	---	---	---	---
Other non -current financial assets

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----

Derivatives used in hedge					Hedge
accounting accounting 18 18 – 18 – 14 14 – 14 –
					Fair value
-------------------------------	---	---	---	---	-----------	---	-------	---	---	-----	---	---	---	---	-----
Derivatives not used in hedge					through
						108	108	–	108	–		99	99	–	99 –
accounting					profit or
					loss

Fair value through

Promissory notes							– –	–	–	–	166	166		–	– 166
profit or
loss

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----
Fair value
through
Earn-out components							– –	–	–	–		12	12	–	– 12
-------------------	---	---	---	---	---	---	---	---	---	---	---	---	---	---	----
profit or
loss

---	---	---	---	---	---	---	-------	---	---	-----	---	---	---	---	-----

						HALF YEAR REPORT 2021

	1				2				3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS AND THEIR FAIR VALUES INCLUDING HIERARCHY ACCORDING TO IFRS 13 € IN MILLIONS

				Category				June 30, 2021					December 31, 2020

    Carrying    Fair             Carrying    Fair
    amount    value   Level 1   Level 2   Level 3    amount    value   Level 1   Level 2   Level 3

Amortized

Other financial assets				cost	117	–	–	–	–	114	–	–	–	–
Assets classified as held for sale Amort iz e d 1,674 – – – – – – – – –
				c o s t
---	---	---	---	---------	---	---	---	---	---	---	---	---	---	---
Financial assets per level – – – 2,070 309 – – – 2,577 352


Financial liabilities
Short-term borrowings
Amortized
Bank borrowings cost 82 – – – – 87 – – – –

Amort iz e d     600    600    600    –    –    599    605    605    –    –

Eurobond
				c o s t
Accounts pay able Amort iz e d 2,165 – – – – 2,390 – – – –

				c o s t
Current accrued l iabilities Amort iz e d 801 – – – – 939 – – – –
				c o s t
---	---	---	---	---------	---	---	---	---	---	---	---	---	---	---
C u r r e nt a c c r u e d li a bilities for Amort iz e d 801 – – – – 743 – – – –
cu s t o m	e r d i s c o u n	t s		c o s t
----------	------------------	---	---	---------	---	---	---	---	---	---	---	---	---	---
Other current financial liabilities

--------------------------	---	---	---	------	---	---	---	---	---	---	---	---	---	---
Derivatives used in hedge				Hedge

accounting    157    157    –    157    –    258    258    –    258    –

accounting

				Fair value
Derivatives not used in hedge				through
						26 26	–	26	–	24	24	–	24	–
accounting				profit or
loss

---	---	---	---	---	---	-------	---	---	-----	---	-----	---	-----	---
Amortized
Other financial liabilities				cost	158	–	–	–	–	164	–	–	–	–
---------------------------	---	---	---	-----	---	---	---	---	---	---	---	---	---	---
Current lease liabilities n.a. 480 – – – – 563 – – – –

Long-term borrowings


Amortized
Bank borrowings						91 –	–	–	–	103	–	–	–	–
---------------	---	---	-----	--------	---	------	---	---	---	----	---	---	---	---
				cost
			Amort	iz e d
Eurobond 1,889 1,944 1,944 – – 1,888 1,987 1,987 – –
				c o s t
---	---	---	-----	--------	---	---	---	---	---	---	---	---	---	---
			Amort	iz e d
Convertibl e bond 493 628 628 – – 491 631 631 – –
				c o s t
---	---	---	---	-------	---	---	---	---	---	---	---	---	---	---
Non-current accr ued liabilities Amort iz e d 1 0 – – – 2 0 – – –

				c o s t
O th e r n o n-current financial –

lia b il it ie s D e r iv a t iv e s used in hedge H e d g e 5 5 – 5 – 26 26 – 26 – n

ac c	o u t in g		acco	un t in g
				Fair value
Derivatives not used in hedge				through
						34 34	–	34	–	85	85	–	85	–
accounting				profit or
loss

---	---	---	---	---	---	-------	---	---	-----	---	-----	---	-----	---
Amortized
Other financial liabilities				cost		– –	–	–	–	4	–	–	–	–
---------------------------	---	---	---	-----	---	---	---	---	---	---	---	---	---	---
Non-current lease liabili ties n.a. 2,206 2,206 – – – 2,159 – – – –

Amortized Liabilities classified as held for sale cost 667 – – – – – – – – – Financial liabilities per level – – 3,172 222 – – – 3,2230 393 –

Thereof: aggregated by category according to IFRS 9 Financial assets at fair value

through profit or loss					2,170					2,670
(FVTPL)
Thereof: designated as such
upon initial recognition						–				–
--------------------------	---	---	---	---	---	---	---	---	---	---	---	---	---	---
(Fair Value Option – FVO)
						87				87
---	---	---	---	---	---	---------	---	---	-----	-----	-----	---	-----	---
Thereof: held for trading (FAHfT)


24

			HALF YEAR REPORT 2021

	1		2		3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS AND THEIR FAIR VALUES INCLUDING HIERARCHY ACCORDING TO IFRS 13 € IN MILLIONS

		Category		June 30, 2021			December 31, 2020

    Carrying    Fair             Carrying    Fair
    amount    value   Level 1   Level 2   Level 3    amount    value   Level 1   Level 2   Level 3

Financial assets at fair value

through other			73			80
comprehensive income (FVOCI)
Thereof: debt instruments – –

Thereof: equity investments (without recycling to 73 80 profit and loss) Financial assets at amortized cost

			7,096			4,489
(AC)
Financial liabilities at fair value
thro ugh profit or loss
			119			108
---	---	---	---	---	---	---	---
(FVTPL)
			–			–
---	---	---	------------	---	-------	--------	---------
Thereof: held for trading (FLHfT)

Financial liabilities at amortized cost (AC) 7,747 7,409


1 Net gains in the amount of € 1 million and gains in the amount of € 0 million due to currenc y translation differences were recogn ized in equity i n 2021
2 Net gains in the amount of € 0 million and losses in the amount of € 2 million due to currency translation differences were recognized in equity in 2020

Level 1 is based on quoted prices in active markets for identical assets or liabilities. 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). Level 3 is based on inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).


25

						HALF YEAR REPORT 2021

	1				2				3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

RECONCILIATION OF FAIR VALUE HIERARCHY LEVEL 3 IN 2020 € IN MILLIONS

									Realized		Unrealized
					Fair value							Currency	Fair value

Jan. 1,2020   Additions   Disposals   Gains   Losses   Gains   Losses   translation    Dec. 31, 2020

Investments in other equity instruments held

						84	–	–	–	–	2	–	–	87
for trading (FAHfT)
I n v e s t m ents in othe r equity instruments 2 – – – – – – – 2
( F V T P	L )
---------	-----	---	---	---	---	---	---	---	---	---	---	---	---	---
I n v e s tm ents in other equity instruments 78 3 – – – – (2) – 79
( F V O C	I)
---------	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Promissory notes (FVTPL) 182 – (1) – (3) 9 – (15) 171

Earn-out components – assets (FVTPL) 45 – (41) – – 12 – (4) 12



RECONCILIATION OF FAIR VALUE HIERARCHY LEVEL 3 IN 2021 € IN MILLIONS
									Realized		Unrealized
---	---	---	---	---	-------------	---	---	---	---------	---	-----------	--------------	---	---
					Fair value							Currency
Fair value

Jan. 1,2021   Additions   Disposals   Gains   Losses   Gains   Losses   translation   June 30, 2021

Investments in other equity instruments held

						87	–	–	–	–	–	–	–	87
for trading (FAHfT)
I n v e s t	m ents in othe r equity instruments
-----------	------------------------------------	---	---	---	---	----	----	----	----	----	----	----	----	---
						2	–	–	–	–	–	–	–	2
( F V T P L )
I n v e s tm ents in other equity instruments
	I)					79	1	(6)	–	–	–	(1)	–	73
---	---	---	---	---	---	-----	----	------	----	----	----	------	----	---
( F V O C
Promissory notes (FVTPL) 171 – (20) – – – (9) 5 147

Earn-out components – assets (FVTPL) 12 – (21) 9 – – – – –


The valuation methods used in measuring Level 1, Level 2 and Level 3 fair values remain unchanged and
can be found in the Notes to the 2020 consolidated financial statements.
NET GAINS/(LOSSES) ON FINANCIAL INSTRUMENTS RECOGNIZED IN THE CONSOLIDATED INCOME STATEMENT € IN MILLIONS
										Period ending		Year ending
---	-------------------------------	---	---	---	---	---	---	---	---	----------------	---	----------------	-----	---

										June 30, 2021		Dec. 31, 2020
	Financial assets classified at
											(3)		(114)
amortized cost (AC)
	Financial assets at fair value through
---	---------------------------------------	---	---	---	---	---	---	---	---	---	---	---	---	---
												1	18
profit or loss (FVTPL)
	Thereof: designated as such upon											–	–
---	---------------------------------	---	---	---	---	---	---	---	---	---	---	-----	-----	---
initial recognition
	Thereof: classified as held for trading											–	2
---	---------------------------------------	---	---	---	---	---	---	---	---	---	---	----	----	---

Equity instruments at fair value through

												–	–
profit or loss (FVTPL)
	Equity instruments at fair value through
---	-----------------------------------------	---	---	---	---	---	---	---	---	---	---	---	---	---
												–	–
other comprehensive income (FVOCI)
	Financial liabilities at amortized cost (AC)											1	39
---	--------------------------------------------	---	---	---	---	---	---	---	---	---	---	----	-----	---

Financial liabilities at fair value through

												–	–
profit or loss (FVTPL)
	Thereof: designated as such upon
---	---------------------------------	---	---	---	---	---	---	---	---	---	---	---	---	---
												–	–
initial recognition
	Thereof: classified as held for trading											–	–
---	---------------------------------------	---	---	---	---	---	---	---	---	---	---	----	------	---

		HALF YEAR REPORT 2021

1		2		3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

07 EARNINGS PER SHARE Basic earnings per share are calculated by dividing the net income from continuing operations attributable 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 reported, according to IAS 33.41 no anti-dilutive effect may be taken into account. EARNINGS PER SHARE Continuing operations Discontinued operations Total First half year First half year First half year First half year First half year First half year

		2021	2020	2021	2020	2021	2020
Net income / (loss) from
continuing operations		890	(217)	–	–	–	–
----------------------	---	-----	-------	---	---	---	---
(€ in millions)
Net income / (loss) attributable
---------------------------------	---	---	---	---	---	---	---
to non-control ling interests
		7	(27)	–	–	–	–
---	---	---	------	---	---	---	---
(€ in millions)

---	---	---	---	---	---	---	---
Net income / (loss) attributable 883 (190) 72 (74) 955 (264)
to shareholde rs (€ in millions)
Weighted average number of shares 195,066,060 195,266,358 195,066,060 195,266,358 195,066,060 195,266,358
Basic earnings per share (€) 4.52 (0.97) 0.37 (0.38) 4.89 (1.35)

---	---	---	---	---	---	---	---
Net income / (loss) attributable
to shareholders (€ in millions) 883 (190) 72 (74) 955 (264)
Net income / (loss) used to

---	---	---	---	---	---	---	---
determine diluted earnings 883 (190) 72 (74) 955 (264)
per share (€ in millions)
Weighted average number of shares 195,066,060 195,266,358 195,066,060 195,266,358 195,066,060 195,266,358
Dilutive effect of share-based
		6,163	–	–	–	6,163	–
---	---	--------	----	----	----	--------	---
payments
Weighted average number of
---------------------------	---	---	---	---	---	---	---
shares for diluted earnings
195,072,223 195,266,358 195,066,060 195,266,358 195,072,223 195,266,358
per share
Diluted earnings per share (€) 4.52 (0.97) 0.37 (0.38) 4.89 (1.35)

HALF YEAR REPORT 2021 1 2 3 AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) 08 SEGMENTAL INFORMATION adidas operates predominantly in one industry segment – the design, distribution and marketing of athletic and sports lifestyle products. As at June 30, 2021, 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. In order to be able to successfully execute our new strategy ‘Own the Game’ for the period until 2025, adidas has changed its organizational structure. Since January 1, 2021, adidas manages Greater China as a separate market and integrated Russia/CIS and Emerging Markets into the European market. The operating segment Reebok North America which was reported in the internal management reporting until February 16, 2021, is not monitored anymore due to the reclassification of Reebok business as discontinued operations on February 16th, 2021. Therefore the segment North America only includes the business activities of adidas. Comparative segmental information has been retrospectively adjusted. Also the Reebok business activities in the other operating segments have been removed in the segment information for 2021 and 2020. 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 management), central treasury, global sourcing as well as other headquarter functions. Assets, liabilities, income and expenses relating to these corporate functions are presented in the reconciliations. The chief operating decision-maker for adidas has been defined as the entire Executive Board of adidas AG. Net sales represents revenue from contracts with customers. There are no intersegment sales between the reportable segments. Accounting and valuation policies applied for reporting segmental information are the same as those used for adidas. The results of the operating segments are reported in the line item ‘Segmental operating profit.’ This is defined as gross profit minus other operating expenses plus royalty and commission income and other operating income attributable to the segment or group of segments, however without considering headquarter costs and central expenses for marketing. Segmental assets include accounts receivable as well as inventories. Only these items are reported to the chief operating decision-maker on a regular basis. Segmental liabilities only contain accounts payable from operating activities as there are no other liability items reported regularly to the chief operating decision-maker. 28

 HALF YEAR REPORT 2021

1		2		3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

SEGMENTAL INFORMATION € IN MILLIONS

			Net sales	Segmental	Segmental	Segmental

   (thir d  parties)1     opera tin g profit1     assets2      li abilities2

2021    2020    2021    2020    2021    2020    2021    2020

EMEA 3,680 2,670 792 308 2,458 2,390 (186) (176) North America 2,406 1,892 447 45 1,540 1,555 (51) (41)


Greater China 2,405 1,757 758 540 1,219 1,240 (230) (266)

---	---	---	---	---	---	---
Asia-Pacific 1,135 939 285 160 600 699 (43) (72)

---	---	---	---	---	---	---
Latin America 645 406 121 (1) 507 532 (91) (55)

---	---	---	---	---	---	---
Reportable segments 10,272 7,665 2,404 1,053 6,325 6,415 (601) (609)

---	---	---	---	---	---	---
Other Businesses 73 68 17 10 52 59 8 (2)
Total 10,345 7,733 2,420 1,063 6,377 6,474 (593) (611)
1 First half year.
2 At June 30.

OPERATING PROFIT € IN MILLIONS First half First half


				year 2021	year 2020

Operating profit for reportable segments	2,404	1,053
Operating profit for Other Businesses	17	10

Segmental operating profit	2,420	1,063

HQ	(745)	(586)

Central expenditure for marketing	(373)	(429)
Consolidation	(54)	(263)

Operating profit/ (loss)	1,248	(215)

Financial income	6	17

Financial expenses					(75)	(82)

Income/ (loss) before taxes from continuing operations 1,179 (279)

---	---	---	---	---	---	---

NET SALES (THIRD PARTIES) € IN MILLIONS First half First half


				year 2021	year 2020

Footwear		5,766	4,495
Apparel		4,037	2,812

Hardware		542	426

Total	10,345		7,733

09	GOODWILL AND TRADEMARKS
Following the company’s internal management reporting by markets, the number of cash-generating units
decreased to a total of six, effective January 1, 2021. In the first quarter 2021, the number of cash-
generating units further decreased to a total of five as the cash-generating unit North America Reebok is
classified as a disposal group and shown in ‘Assets/liabilities classified as held for sale.’
Due to the changes in segmental reporting, the carrying amounts of acquired goodwill have been
reallocated to the new groups of cash-generating units in the first quarter 2021 as follows:
29

 HALF YEAR REPORT 2021

1				2					3
AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)

ALLOCATION OF GOODWILL

							Goodwill (€ in millions)

									(Re-)		(Re-)
						Aggregation		allocation		allocation

Dec. 31, 2020    EMEA    Asia-Pacific    adidas Golf    Jan. 1, 2021

Europe	593	(593)			n.a.
Emerging Markets	76	(76)			n.a.

EMEA	n.a.	669		25	694

North America	n.a.			77	77

Greater China	n.a.		269	10	280

Asia-Pacific	361		(269)	66	157

adidas Golf	178			(178)	n.a.

Total	1,208	-	-	-	1,208

Due to the change in the composition of the company’s operating segments and associated cash- generating units respectively, adidas assessed at January 1, 2021 whether goodwill or Reebok trademark impairments were required. The underlying value drivers and key assumptions for impairment testing purposes remained in principle unchanged compared to the impairment test performed for the consolidated financial statements as at December 31, 2020. In this context, there was no need for goodwill or Reebok trademark impairment. On February 16, 2021, the company decided to begin a formal process aimed at divesting Reebok. Reebok is reported as discontinued operations and classified as a disposal group held for sale as at June 30, 2021, accordingly. As a result, the goodwill allocated to the group of cash generating units Europe, Middle East and Africa (EMEA), North America, Greater China and Asia-Pacific (APAC) was split and reallocated between adidas and Reebok cash-generating units based on relative values (fair values), respectively. RECONCILIATION OF GOODWILL, NET € IN MILLIONS

							North		Greater

     EMEA      America      China      Asia-Pacific      Total

January 1, 2021					694		77		280		157	1,208
Reebok Disposal Group					(23)		-		(3)		(1)	(27)
Currency translation
					11		0		5		2	18
---	---	---	---	---	---	---	----	---	----	---	----	---
differences
June 30, 2021					682		77		282		158	1,199
--------------	---	---	---	---	-----	---	------	---	-------	---	-------	-------

In the first quarter 2021, the reallocated goodwill as well as the Reebok trademark in an amount of € 757 million were initially measured according to IAS 36 ‘Impairment of Assets’ and goodwill allocated to Reebok as well as the Reebok trademark were subsequently transferred to ’Assets/liabilities classified as held for sale’ due to the concrete plans to divest Reebok.


30

HALF YEAR REPORT 2021 1 2 3 AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) 010 EVENTS AFTER THE BALANCE SHEET DATE The seven-year € 600 million Eurobond, originally due on October 8, 2021, was already repaid by adidas on July 8, 2021. With the approval of the Supervisory Board, the Executive Board of adidas AG has decided to launch a new share buyback program in the second half of 2021. Starting on July 1, 2021, the company plans to buy back shares worth up to € 550 million until the end of the year. Until the finalization of these interim consolidated statements on July 26, 2021, adidas AG purchased a total of 226,850 shares for a total price of € 72,683,346. Besides this, there were no other major events between the end of the first half of 2021 and the finalization of these interim consolidated financial statements on July 26, 2021, that might have a material influence on the assets, liabilities, financial position, and profit or loss of the company. Herzogenaurach, July 26, 2021 The Executive Board of adidas AG 31

HALF YEAR REPORT 2021 1 2 3 AT A GLANCE INTERIM GROUP MANAGEMENT REPORT INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) RESPONSIBILITY STATEMENT To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim Group management report 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 expected development of the Group for the remaining months of the financial year. Herzogenaurach, July 26, 2021 KASPER RORSTED ROLAND AUSCHEL BRIAN GREVY CHIEF EXECUTIVE OFFICER GLOBAL SALES GLOBAL BRANDS HARM OHLMEYER AMANDA RAJKUMAR MARTIN SHANKLAND CHIEF FINANCIAL OFFICER GLOBAL HUMAN RESOURCES GLOBAL OPERATIONS 32

CONTACT ADIDAS AG ADI-DASSLER-STR. 1 91074 HERZOGENAURACH GERMANY Tel + 49 (0) 91 32 84 – 0 ► ADIDAS-GROUP.COM adidas ist a member of DIRK (German Investor Relations Association) INVESTOR RELATIONS investor.relations@adidas.com ► ADIDAS–GROUP.DE/INVESTORS © ADIDAS 2021 33