adidas AG : adidas AG: First Quarter 2013 Results

              adidas AG : adidas AG: First Quarter 2013 Results

adidas AG / adidas AG: First Quarter 2013 Results . Processed and transmitted
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For immediate release    
Herzogenaurach, May 3, 2013

First Quarter 2013 Results:

Group sales stable on a currency-neutral basis
Gross margin grows 2.4 percentage points to record level of 50.1%
Net income attributable to shareholders up 6% to € 308 million
adidas Group confirms full year guidance

  oTaylorMade-adidas Golf sales increase 13% currency-neutral
  oGroup operating margin up 1.1 percentage points
  oNet borrowings down 72% to € 180 million at quarter-end
  oInventories decrease 2% on currency-neutral basis

adidas Group currency-neutral sales remain stable in the first quarter of 2013
In the first quarter of 2013, Group revenues were stable on a currency-neutral
basis as a result of sales increases in Retail and Other Businesses. Currency
translation effects had a negative impact on sales in euro terms. Group
revenues decreased 2% to € 3.751 billion in the first quarter of 2013 from
€3.824 billion in 2012.

Group sales supported by growth in Retail and Other Businesses
In the first quarter of 2013, currency-neutral Wholesale revenues decreased 3%
due to double-digit  sales declines at  Reebok. Currency-neutral Retail  sales 
increased 6% versus the prior year, driven by sales growth at both adidas  and 
Reebok. Revenues in Other Businesses were  up 9% on a currency-neutral  basis, 
driven by double-digit sales increases at TaylorMade-adidas Golf.

Currency translation effects had a negative impact on segmental sales in  euro 
terms. Wholesale revenues decreased 5% to € 2.481 billion in the first quarter
of 2013 from € 2.614  billion in 2012. Retail  sales grew 4% to  €722million 
versus € 693 million in the prior year. Sales in Other Businesses rose 6% to €
548 million (2012: € 517 million).

"Our Group has delivered  a solid performance in  the first quarter of  2013," 
commented Herbert Hainer,  adidas Group  CEO. "We  delivered stable  revenues, 
despite running against  high prior  year comparisons  due to  the sell-in  of 
event-related products  for  the London  Olympics  and the  European  Football 
Championships as well as facing a continuation of macroeconomic challenges  in 
Europe. And, we delivered strong margin progress which is our top priority for
the year.  Our  relentless focus  on  quality  sales growth  resulted  in  our 
highest-ever quarterly gross margin, above 50% for only the second time in our
history."

            First quarter   First   Change y-o-y Change y-o-y currency-neutral
                2013       quarter    in euro
                            2012       terms
            € in millions   € in        in %                 in %
                          millions
Wholesale       2,481       2,614       (5)                   (3)
Retail           722         693         4                     6
Other            548         517         6                     9
Businesses
Total^1)        3,751       3,824       (2)                    0

First quarter net sales development by segment
1) Rounding differences may arise in totals.

Currency-neutral sales increase in most regions
In the first quarter of 2013, currency-neutral adidas Group sales grew in  all 
regions except Western  Europe and  Other Asian Markets.  Revenues in  Western 
Europe decreased  6% on  a currency-neutral  basis, as  growth in  France  and 
Poland was more than offset by sales  declines in Spain, Italy and the UK.  In 
European Emerging  Markets, Group  sales increased  3% on  a  currency-neutral 
basis due to  sales growth in  the Middle East,  South Africa and  Russia/CIS. 
Sales for the  adidas Group  in North America  grew 3%  on a  currency-neutral 
basis, driven by 5% growth at adidas and 19% growth at TaylorMade-adidas Golf.
Sales  in   Greater  China   increased  6%   on  a   currency-neutral   basis. 
Currency-neutral revenues in Other Asian Markets declined 4%, as  double-digit 
increases in South Korea were more than offset by sales declines in Japan.  In 
Latin America, sales grew 12%  on a currency-neutral basis, with  double-digit 
increases in most of the region's major markets. Currency translation  effects 
had a mixed impact on regional sales in euro terms.

                   First        First     Change y-o-y      Change y-o-y
                  quarter      quarter      in euro       currency-neutral
                    2013         2012        terms
                    € in         € in         in %              in %
                  millions     millions
Western Europe     1,096        1,174         (7)                (6)
European            433          430           1                  3
Emerging
Markets
North America       890          869           2                  3
Greater China       409          385           6                  6
Other Asian         533          594          (10)               (4)
Markets
Latin America       390          372           4                 12
Total^1)           3,751        3,824         (2)                 0

First quarter net sales development by region
1) Rounding differences may arise in totals.

Group gross margin increases 2.4 percentage points
The gross margin of the adidas Group increased 2.4 percentage points to  50.1% 
in the first quarter of  2013 (2012: 47.7%). The  positive impact from a  more 
favourable pricing, product and regional sales  mix as well as a larger  share 
of higher-margin Retail  sales contributed to  this development. Gross  profit 
for the adidas Group grew 3% in  the first quarter of 2013 to  €1.881billion 
versus € 1.826 billion in the prior year.

Operating margin improves 1.1 percentage points
Group operating profit increased 8% to €  442 million in the first quarter  of 
2013 versus € 409 million  in 2012. As a result,  the operating margin of  the 
adidas Group improved 1.1 percentage points  to 11.8% (2012: 10.7%). This  was 
primarily due to the positive effects from the increase in gross margin, which
more than offset  higher other operating  expenses as a  percentage of  sales. 
Other operating expenses as a percentage  of sales rose 1.2 percentage  points 
to 39.5% in the first quarter of 2013 from 38.4% in 2012. In euro terms, other
operating expenses increased 1% to € 1.482 billion (2012: € 1.467 billion), as
a result  of higher  marketing expenditure  as well  as the  expansion of  the 
Group's own-retail  activities. Thereof,  sales and  marketing working  budget 
expenditures amounted to  € 437 million,  which represents an  increase of  3% 
versus the prior year level (2012: € 426 million).

Financial income down 47%
Financial income decreased 47%  to € 4  million in the  first quarter of  2013 
from € 8  million in  the prior  year, mainly due  to a  decrease in  interest 
income.

Financial expenses decrease 30%
Financial expenses decreased 30% to € 19 million in the first quarter of  2013 
(2012: € 28 million). The decrease in interest expenses mainly contributed  to 
the decline.

Income before taxes as a percentage of sales increases 1.2 percentage points
Income before taxes (IBT) for the adidas Group increased 10% to € 427  million 
from  €  389  million  in  2012.  IBT  as  a  percentage  of  sales   improved 
1.2percentage points to  11.4% in  the first quarter  of 2013  from 10.2%  in 
2012. This was a result of the Group's operating margin increase and lower net
financial expenses.

Net income attributable to shareholders up 6%
The Group's net income attributable to shareholders increased to €308million
in the first quarter of  2013 from € 289 million  in 2012. This represents  an 
increase of 6% versus the prior year level. The Group's tax rate increased 2.0
percentage points to 27.5% in the first quarter of 2013 (2012: 25.5%),  mainly 
due to a less favourable earnings mix.

Basic and diluted earnings per share reach € 1.47
In the first quarter of 2013, basic and diluted earnings per share amounted to
€ 1.47 (2012: €  1.38), representing an increase  of 6%. The weighted  average 
number of shares used  in the calculation of  both basic and diluted  earnings 
per share  was  209,216,186  (2012  average: 209,216,186)  as  there  were  no 
potential dilutive shares in the quarter.

Group inventories decline 2% currency-neutral
Group inventories decreased 2%  to € 2.346  billion at the  end of March  2013 
versus €2.395 billion in 2012. On a currency-neutral basis, inventories  were 
also down  2%,  reflecting  the  Group's ongoing  strong  focus  on  inventory 
management.

Accounts receivable increase 3% currency-neutral
At the end of March  2013, Group receivables increased  3% to € 2.328  billion 
(2012: € 2.253 billion). On a currency-neutral basis, receivables were also up
3%. The  reduction  in  allowances  for doubtful  debts  contributed  to  this 
development.

Net borrowings decrease € 460 million
Net borrowings at March 31, 2013 amounted to € 180 million, which represents a
decrease of € 460 million, or 72%, versus € 640 million at the end of March
2012. The decrease was driven by the strong operating cash flow development
over the past 12 months. Currency translation had a positive effect of € 37
million. The Group's ratio of net borrowings over 12-month rolling EBITDA
decreased to 0.1 at the end of March 2013 versus 0.5 in the prior year.

adidas Group confirms guidance for the full year 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.

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.

Herbert  Hainer  stated:  "The  strong  first  quarter  results  confirm   our 
expectations to  deliver  another year  of  double-digit earnings  growth  and 
strong cash flow generation. Given the strong reception to our latest  product 
innovations and our full pipeline for the second half of 2013, I am  confident 
our earnings momentum will accelerate in line with our expectations as we move
through the year."

                                     ***

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

Lars Mangels                          Christian Stoehr
Corporate Communication Manager       Senior Investor Relations Manager
Tel.: +49 (0) 9132 84-2680            Tel.: +49 (0) 9132 84-4989

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

Attachment: Press release First Quarter 2013 Results

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