adidas AG : adidas AG: adidas Group Full Year 2012 Results

          adidas AG : adidas AG: adidas Group Full Year 2012 Results

adidas AG / adidas AG: adidas Group Full Year 2012 Results . Processed and
transmitted by Thomson Reuters ONE. The issuer is solely responsible for the
content of this announcement.

For immediate release  
Herzogenaurach, March 7, 2013

Q4 2012 highlights:

  oCurrency-neutral Group sales up 1%
  oTaylorMade-adidas Golf sales increase 15%
  oGreater China and European Emerging Markets grow 12% and 9%, respectively

Full year 2012 highlights:

  oCurrency-neutral Group sales up 6% to a new record level of
    € 14.9 billion
  oadidas and TaylorMade-adidas Golf sales increase 10% and 20%, respectively
  oGross margin improves 0.2pp to 47.7% despite significant pressure from
    input costs
  oGoodwill impairment in an amount of € 265 million
  oOperating margin excluding goodwill impairment improves to 8.0%
  oEarnings per share excluding goodwill impairment increase 29%
    to a record level of € 3.78
  oNet cash position of € 448 million at year-end
  oGroup inventories down 1% at year-end
  oManagement to propose a 35% higher dividend of € 1.35 per share

Outlook

  oGroup sales to increase at a mid-single-digit rate
  oOperating margin to improve to a level approaching 9.0%
  oEarnings per share to be in the range of € 4.25 to € 4.40

"2012 has been another successful year for the adidas Group," commented
Herbert Hainer, adidas Group CEO. "Our products and brands were again at the
fore, not only being the most visible at the year's major sports events, but
also enjoying several important market share victories along the way. The
resulting margin improvements and significant cash flow generation underpin
the trajectory and value we are unlocking with our Route 2015 strategic plan."

Commercial irregularities discovered at Reebok India Company
As announced in an ad hoc release on April 30, 2012, commercial irregularities
were discovered at Reebok India Company. The discovery of these irregularities
resulted in the identification of material errors in the prior period
financial statements of Reebok India Company. As a consequence of these
errors, material misstatements are also included in the consolidated financial
statements of adidas AG for the 2011 financial year and for previous financial
years, which have to be corrected in accordance with IAS 8. These corrections
are reflected in the consolidated financial statements as at December 31,
2012, in which the comparative figures for the year 2011 are restated and the
opening balance sheet for 2011 is corrected to the extent that earlier periods
are affected. The results of these restatements led to a reduction of net
income attributable to shareholders of € 58 million for 2011. In addition,
shareholders' equity of the opening balance sheet for 2011 is negatively
impacted by € 153 million.

adidas Group currency-neutral sales increase 1% in the fourth quarter
In the fourth quarter of 2012, Group revenues grew 1% on a currency-neutral
basis. Currency-neutral sales in Retail and Other Businesses increased 9% and
7%, respectively. Sales in the Wholesale segment were down 4% on a
currency-neutral basis. Currency-neutral revenues in Western Europe decreased
4%, primarily as a result of high prior year comparisons due to the sell-in of
event-related products for the UEFA EURO 2012 and the London 2012 Olympic
Games. In European Emerging Markets, currency-neutral sales were up 9% as a
result of double-digit revenue growth at Reebok. Group sales in NorthAmerica
were down 8% on a currency-neutral basis, as growth at adidas and
TaylorMade-adidas Golf was more than offset by declines at Reebok, mainly due
to the non-recurrence of prior year related NFL licence sales. In Greater
China, Group sales were up 12% on a currency-neutral basis, driven by strong
double-digit sales gains at adidas Sport Style. Currency-neutral revenues in
Other Asian Markets grew 4%, due to increases at Reebok and TaylorMade-adidas
Golf. In Latin America, adidas Group sales were up 4% on a currency-neutral
basis driven by growth at adidas and TaylorMade-adidas Golf. Currency
translation effects had a positive impact on sales in euro terms. Group
revenues grew 4% to €3.369billion in the fourth quarter of 2012 from €3.241
billion in 2011.

Fourth quarter operating profit negatively impacted by goodwill impairment  of 
€ 265 million
The Group's  gross margin  increased  2.0 percentage  points to  47.6%  (2011: 
45.6%) in  the fourth  quarter,  as the  positive  impact from  product  price 
increases, a  more favourable  product and  regional sales  mix as  well as  a 
larger share of higher-margin  Retail sales more than  offset the increase  in 
input costs.  Group  gross  profit  increased 8%  to  €1.603  billion  (2011: 
€1.478billion). Other operating expenses as a percentage of sales  increased 
1.5 percentage points to 49.0% compared to 47.5% in the prior year,  primarily 
due to higher marketing  investments as a  percentage of sales  as well as  an 
increase in operating  overhead expenses.  For the fourth  quarter, the  Group 
reported an  operating  loss  of  €  239 million,  as  a  result  of  goodwill 
impairment losses in an amount  of € 265 million,  which more than offset  the 
positive effects of an increase in gross margin. Excluding goodwill impairment
losses, operating profit  amounted to  €26million compared to  € 18  million 
last year. Net loss attributable to shareholders excluding goodwill impairment
losses amounted to € 7 million versus net income attributable to  shareholders 
of €3million last year.

adidas Group currency-neutral sales grow 6%
In 2012, Group revenues grew  6% on a currency-neutral  basis, as a result  of 
double-digit  sales  increases  in  Retail  and  Other  Businesses.   Currency 
translation effects  had a  positive  impact on  sales  in euro  terms.  Group 
revenues grew 12% to € 14.883 billion in 2012 from € 13.322 billion in 2011.

Group sales  increase  driven  by  double-digit growth  in  Retail  and  Other 
Businesses
In 2012, currency-neutral Wholesale revenues increased 2%, as sales growth  at 
adidas more  than offset  sales declines  at Reebok.  Currency-neutral  Retail 
sales increased 14% versus the prior year, driven by 7% comparable store sales
growth as  well  as  new  store  openings in  line  with  the  Group's  retail 
expansion. Revenues  in Other  Businesses were  up 17%  on a  currency-neutral 
basis,  mainly   driven   by  a   strong   double-digit  sales   increase   at 
TaylorMade-adidas Golf. Currency translation effects had a positive impact  on 
segmental sales in euro terms.

                2012       2011^1)  Change y-o-y Change y-o-y currency-neutral
                                      in euro
                                       terms
            € in millions   € in        in %                 in %
                          millions
Wholesale       9,533       8,949        7                     2
Retail          3,373       2,793        21                   14
Other           1,977       1,580        25                   17
Businesses
Total^2)       14,883      13,322        12                    6

2012 net sales development by segment
1) Restated according to IAS 8.
2) Rounding differences may arise in totals.

Currency-neutral sales increase in all regions
In 2012, revenues in Western Europe increased 3% on a currency-neutral  basis, 
primarily as a result of double-digit sales increases in the UK and Poland. In
European Emerging Markets,  Group sales  increased 15%  on a  currency-neutral 
basis due  to  double-digit  growth  in  most  of  the  region's  markets,  in 
particular Russia/CIS. Sales for the adidas Group in North America grew 2%  on 
a currency-neutral basis,  with sales increases  in both the  USA and  Canada. 
Sales  in  Greater   China  increased   15%  on   a  currency-neutral   basis. 
Currency-neutral revenues in  Other Asian  Markets grew 7%,  driven by  strong 
increases in Japan  and South  Korea. In  Latin America,  sales grew  8% on  a 
currency-neutral basis, with  double-digit increases in  most of the  region's 
major markets, in  particular Argentina.  Currency translation  effects had  a 
mixed impact on regional sales in euro terms.

                    2012         2011^1)    Change         Change y-o-y
                                             y-o-y       currency-neutral
                                            in euro
                                             terms
                € in millions € in millions  in %              in %
Western Europe      4,076         3,922        4                3
European            1,947         1,597       22                15
Emerging
Markets
North America       3,410         3,102       10                2
Greater China       1,562         1,229       27                15
Other Asian         2,407         2,103       14                7
Markets
Latin America       1,481         1,369        8                8
Total^2)           14,883        13,322       12                6

2012 net sales development by region
1) Restated according to IAS 8.
2) Rounding differences may arise in totals.

Group gross margin increases 0.2 percentage points
The gross margin of the adidas Group increased 0.2 percentage points to  47.7% 
in 2012  (2011:  47.5%), above  Management's  initial expectations  of  around 
47.5%. The positive  impact from  product price increases,  a more  favourable 
product and regional  sales mix  as well as  a larger  share of  higher-margin 
Retail sales more than  offset the increase in  input costs. Gross profit  for 
the adidas Group grew 12% in 2012 to € 7.103 billion versus € 6.329 billion in
the prior year.

Goodwill impairment in an amount of € 265 million
As a result of  the re-evaluation of medium-term  growth prospects of  several 
geographic regions and segments,  the adidas Group  has impaired goodwill  and 
recorded a € 265 million pre-tax charge as at December 31, 2012. The wholesale
cash-generating unit  North  America was  impaired  by €  106  million,  Latin 
America by € 41 million,  Brazil by € 15  million and Iberia by  €11million. 
The impairment loss was mainly  caused because of adjusted growth  assumptions 
for the Reebok brand, especially in  North America, Latin America and  Brazil, 
and an increase in the country-specific discount rates as a result of the euro
crisis. In addition, goodwill of €  68 million allocated to Reebok-CCM  Hockey 
was completely impaired and € 24  million allocated to Rockport was  partially 
impaired.  These  impairment   losses  are   primarily  the   result  of   the 
re-evaluation of future growth  prospects and, with  regard to Rockport,  also 
due to an increase in the discount rate. The impairment loss of
€ 265 million was non-cash  in nature and does  not affect the adidas  Group's 
liquidity.

Operating margin excluding goodwill impairment improves to 8.0%
Group  operating  profit  decreased  3%  to  €  920  million  in  2012  versus 
€953million in  2011. The  operating  margin of  the adidas  Group  declined 
1.0percentage points to 6.2% (2011: 7.2%). Excluding the goodwill  impairment 
losses, operating  profit  grew  24%  to  €  1.185  billion,  representing  an 
operating  margin  of  8.0%,  which  is  in  line  with  Management's  initial 
expectations of approaching 8.0%. This development resulted from the  increase 
in gross margin  and the  lower other operating  expenses as  a percentage  of 
sales.
Financial income up 17%
Financial income increased 17% to  € 36 million in 2012  from € 31 million  in 
the prior year, mainly due  to an increase in interest  income as a result  of 
higher average cash and cash equivalents during the year.

Financial expenses decrease 8%
Financial  expenses   decreased  8%   to  €   105  million   in  2012   (2011: 
€115million). A decrease in interest expenses of 9% was the main contributor
to the decline. Negative exchange rate effects were similar to the prior year.

Net income attributable to shareholders excluding goodwill impairment up29%
The Group's net income attributable to shareholders decreased to €526million
in 2012 from € 613 million in  2011. This represents a decrease of 14%  versus 
the prior year  level. Excluding  the goodwill impairment  losses, net  income 
attributable to shareholders was  € 791 million,  representing an increase  of 
29%. The Group's  tax rate increased  8.4 percentage points  to 38.4% in  2012 
(2011: 30.0%), mainly  due to non-tax-deductible  goodwill impairment  losses. 
Excluding the goodwill impairment losses, the effective tax rate was 29.3%.

Earnings per share excluding goodwill impairment reach € 3.78
In 2012,  basic and  diluted earnings  per  share amounted  to €  2.52  (2011: 
€2.93), representing a  decrease of  14%. Excluding  the goodwill  impairment 
losses, basic and  diluted earnings per  share reached a  new record level  of 
€3.78, which is above Management's initial  projections of € 3.52 to €  3.68. 
The weighted average number of shares used in the calculation was 209,216,186.

Group inventories down 1%
Group inventories decreased 1% to € 2.486 billion at the end of December  2012 
versus € 2.502 billion in 2011, due to  a reduction in goods in transit. On  a 
currency-neutral basis, inventories were up 1%, reflecting the Group's  strong 
focus on inventory management.

Accounts receivable increase 6%
At the end of December 2012, Group receivables increased 6% to €1.688billion
(2011: € 1.595 billion). On a currency-neutral basis, receivables were up  8%. 
This reflects the growth of the  Group's business over the past twelve  months 
as well as a reduction in allowances for doubtful debts due to an  improvement 
in accounts receivable past due date.

Net cash position of € 448 million
Net cash at December 31, 2012 amounted to € 448 million, compared to net  cash 
of € 90 million at  the end of December 2011,  reflecting an improvement of  € 
358 million. This  development was mainly  driven by the  cash flow  generated 
from operating  activities  and  financing activities  over  the  past  twelve 
months.  Currency  translation  had  a   positive  effect  in  an  amount   of 
€3million. The Group's ratio of net borrowings over EBITDA amounted to  -0.3 
at the end of December 2012 (2011: -0.1).

adidas Group currency-neutral sales to increase at a mid-single-digit rate  in 
2013
adidas Group sales are forecasted to increase at a mid-single-digit rate on  a 
currency-neutral basis in 2013. Currency translation is expected to negatively
impact top-line  development  in reported  terms.  Despite a  high  degree  of 
uncertainty regarding the global economic outlook and consumer spending, Group
sales development will be favourably impacted by the Group's high exposure  to 
fast-growing emerging markets as well as  the further expansion of Retail.  In 
addition, the  Group's  strength in  innovation  will lead  to  major  product 
launches throughout 2013, which  will more than  offset the non-recurrence  of 
sales related to  the UEFA EURO  2012 and  the London 2012  Olympic Games.  In 
terms of phasing, sales growth is projected to be weighted towards the  second 
half of the year.

Earnings per share to increase to a level between € 4.25 and € 4.40
In 2013, the adidas Group  gross margin is forecasted  to increase to a  level 
between 48.0%  and  48.5% (2012:  47.7%).  Improvements are  expected  in  all 
segments. Group gross margin will  benefit from positive regional and  channel 
mix effects, as growth  rates in high-margin emerging  markets and Retail  are 
projected to be above  growth rates in more  mature markets and Wholesale.  In 
addition, improvements in the  Retail segment as well  as at the Reebok  brand 
will positively  influence  Group  gross margin  development.  However,  these 
positive effects  will  be partly  offset  by less  favourable  hedging  terms 
compared to  the prior  year as  well as  increasing labour  costs, which  are 
expected to negatively impact cost of sales.

In 2013, the  Group's other operating  expenses as a  percentage of sales  are 
expected to  decrease  modestly (2012:  41.3%).  Sales and  marketing  working 
budget expenses as  a percentage of  sales are  projected to be  at a  similar 
level compared to the prior year. Marketing investments to support new product
launches at all brands, as well as the expansion of Reebok's activities in the
fitness category, will be offset by the non-recurrence of expenses in relation
to the UEFA  EURO 2012 as  well as  the London 2012  Olympic Games.  Operating 
overhead expenditure  as  a  percentage  of sales  is  forecasted  to  decline 
modestly in 2013. Higher administrative  and personnel expenses in the  Retail 
segment due to the planned expansion of the Group's store base will be  offset 
by leverage in the Group's non-allocated central costs.

In 2013,  the Group  expects the  operating  margin for  the adidas  Group  to 
increase to  a  level approaching  9.0%  (2012 excluding  goodwill  impairment 
losses: 8.0%). Improvements in the Group's gross margin as well as lower other
operating expenses as  a percentage of  sales are expected  to be the  primary 
drivers of the improvement. The  Group tax rate is expected  to be at a  level 
between 28.0% and 28.5%  and thus more favourable  compared to the prior  year 
tax rate of 29.3% excluding goodwill  impairment losses. As a result of  these 
developments, earnings per share are expected to increase at a rate of 12%  to 
16% to a level between € 4.25  and € 4.40 (2012 excluding goodwill  impairment 
losses: € 3.78). This represents net income attributable to shareholders of  € 
890 million to € 920 million.

Management to propose dividend of € 1.35
In light of the strong cash flow generation in 2012 and resulting improved net
cash position at year-end,  Management will recommend paying  a dividend of  € 
1.35 to  shareholders at  the Annual  General Meeting  (AGM) on  May 8,  2013, 
representing an increase  of 35% compared  to the prior  year (2011: €  1.00). 
Subject to shareholder approval, the dividend will be paid on May 9, 2013. The
proposal represents a  payout ratio  of 35.7%  of net  income attributable  to 
shareholders excluding goodwill  impairment losses, compared  to 34.1% in  the 
prior year. This complies with the Group's dividend policy, according to which
Management intends to pay out between  20% and 40% of net income  attributable 
to shareholders annually. Based on the number of shares outstanding at the end
of 2012, the dividend payout will thus increase to €282million compared to €
209 million in the prior year.

Herbert Hainer stated: "We  are very well positioned  to again achieve  record 
sales in 2013. Our product pipeline is packed with game-changing  innovations, 
be it in  running, basketball,  football, lifestyle,  fitness or  golf. As  we 
continue our Route  2015 journey, our  focus remains on  quality growth.  2013 
will also see a  step change in  the pace of  operating margin expansion.  And 
this, in turn, will lead to another year of double-digit earnings growth."

                                     ***

Contacts:

Media Relations                       Investor Relations
Jan Runau                             John-Paul O'Meara
Chief Corporate Communication Officer Vice President Investor Relations
Tel.: +49 (0) 9132 84-3830            Tel.: +49 (0) 9132 84-2751

Katja Schreiber                       Christian Stoehr
Director Corporate Communication      Investor Relations Manager
Tel.: +49 (0) 9132 84-3810            Tel.: +49 (0) 9132 84-4989

Lars Mangels
Corporate Communication Manager
Tel.: +49 (0) 9132 84-2680

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



Attachment: Press release adidas Group Full Year 2012 Results

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