setting the pace »»»

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nine months RepoRt 2007

setting the pace

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NiNe MoNths RepoRt 2007 › adidas Group › › Financial Highlights 02

Nine Months Nine Months 3rd Quarter 3rd Quarter

2007 2006 Change 2007 2006 Change

adidas

Net sales 5,465 5,248 4.1% 2,012 1,941 3.7%

Gross profit 2,605 2,462 5.8% 992 925 7.2%

Gross margin 47.7% 46.9% 0.8pp 49.3% 47.7% 1.6pp

Operating profit 856 778 9.9% 395 365 8.4%

Operating margin 15.7% 14.8% 0.8pp 19.6% 18.8% 0.9pp

Number of employees at end of period 16,884 14,176 19.1% 16,884 14,176 19.1%

Reebok¹⁾

Net sales 1,765 1,828¹⁾ (3.4%) 728 778 (6.5%)

Gross profit 686 636¹⁾ 7.9% 293 283 3.2%

Gross margin 38.9% 34.8%¹⁾ 4.1pp 40.2% 36.4% 3.8pp

Operating profit 89 71¹⁾ 25.1% 84 58 44.6%

Operating margin 5.0% 3.9%¹⁾ 1.1pp 11.6% 7.5% 4.1pp

Number of employees at end of period 6,711 7,831 (14.3%) 6,711 7,831 (14.3%)

taylorMade-adidas Golf²⁾

Net sales 609 658 (7.5%) 190 194 (2.2%)

Gross profit 270 289 (6.7%) 84 85 (0.8%)

Operating profit 42 50 (17.1%) 15 15 (0.7%)

Operating margin 6.8% 7.6% (0.8pp) 7.8% 7.7% 0.1pp

Number of employees at end of period 1,410 1,412 (0.1%) 1,410 1,412 (0.1%)

1) 2006 figures only include eight months of the nine-month period.

2) Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.

adidas Group segmental information € in millions contents

02 Financial highlights

04 operational and sporting highlights third Quarter 2007

05 interview with the ceo 10 our share

12 group management Report 12 › Group Business Performance 12 » Economic and Sector Development 13 » Income Statement

18 » Balance Sheet and Cash Flow 20 › adidas

22 › Reebok

25 › TaylorMade-adidas Golf 27 › Subsequent Events and Outlook 31 consolidated Financial statements 31 › Consolidated Balance Sheet 32 › Consolidated Income Statement 33 › Consolidated Statement of Cash Flows 34 › Consolidated Statement of Recognized

Income and Expense 35 notes

38 segmental information

38 › Segmental Information by Brand 39 › Segmental Information by Region 40 management Boards

41 Financial calendar 2007/2008 42 contact

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NiNe MoNths RepoRt 2007 › adidas Group › › Financial Highlights 03

Nine Months Nine Months 3rd Quarter 3rd Quarter

2007 2006¹⁾ Change 2007 2006¹⁾ Change

operating highlights (€ in millions)

Net sales 7,879 7,836 0.6% 2,941 2,949 (0.3%)

Operating profit 889 829 7.1% 471 409 15.2%

Net income attributable to shareholders 530 469 12.9% 298 244 22.2%

Key Ratios (%)

Operating expenses as a percentage of net sales 37.3% 35.1% 2.2pp 33.4% 31.9% 1.5pp

Operating margin 11.3% 10.6% 0.7pp 16.0% 13.9% 2.2pp

Effective tax rate 32.0% 31.9% 0.1pp 32.0% 30.9% 1.1pp

Net income attributable to shareholders

as a percentage of net sales 6.7% 6.0% 0.7pp 10.1% 8.3% 1.9pp

Operating working capital

as a percentage of net sales²⁾ 25.7% 25.7% 0.0pp 25.7% 25.7% 0.0pp

Equity ratio 35.4% 32.1% 3.3pp 35.4% 32.1% 3.3pp

Financial leverage 71.1% 94.6% (23.5pp) 71.1% 94.6% (23.5pp)

Balance sheet and Cash Flow Data (€ in millions)

Total assets 8,738 8,973 (2.6%) 8,738 8,973 (2.6%)

Inventories 1,596 1,498 6.6% 1,596 1,498 6.6%

Receivables and other current assets 2,471 2,531 (2.4%) 2,471 2,531 (2.4%)

Working capital 2,126 2,109 0.8% 2,126 2,109 0.8%

Net borrowings 2,201 2,728 (19.3%) 2,201 2,728 (19.3%)

Shareholders’ equity 3,096 2,885 7.3% 3,096 2,885 7.3%

Capital expenditure 154 179 (13.8%) 62 77 (18.8%)

Net cash provided by operating activities 246 275 (10.4%)

per share of Common stock (€)

Basic earnings 2.60 2.31 12.7% 1.46 1.20 22.0%

Diluted earnings 2.46 2.18 12.6% 1.37 1.12 21.9%

Operating cash flow 1.21 1.35 (10.5%)

Share price at end of period 46.00 37.10 24.0% 46.00 37.10 24.0%

other (at end of period)

Number of employees 29,529 25,877 14.1% 29,529 25,877 14.1%

Number of shares outstanding 203,625,060 203,496,860 0.1% 203,625,060 203,496,860 0.1%

Average number of shares 203,583,762 203,337,185 0.1% 203,583,762 203,337,185 0.1%

Rounding differences may arise in percentages and totals.

1) Including Reebok business segment from February 1, 2006 onwards. Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.

2) Twelve-month trailing average.

Financial highlights (iFRs)

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Nine Months Net sales € in millions

2003 2004¹⁾ 2005¹⁾ 2006²⁾ 2007

4,913 4,664 5,115 7,836 7,879 1) Figure reflects continuing operations as a result of the divestiture of the

Salomon business segment in 2005.

2) Including Reebok business segment from February 1, 2006 onwards.

Including Greg Norman apparel business from February 1, 2006 to November 30, 2006.

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Nine Months Net income Attributable to shareholders

€ in millions

2003 2004¹⁾ 2005¹⁾ 2006²⁾ 2007

234 295 386 469 530 1) Includes continuing and discontinued operations.

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NiNe MoNths RepoRt 2007 › adidas Group ›

operational and sporting highlights third Quarter 2007

July

adidas and LA Galaxy launch the redesigned Galaxy team uniform and logo for the 2007 season, timed with Galaxy’s media introduc- tion of international football star David Beckham.

TaylorMade-adidas Golf Tour Staff professional Jason Day be- comes the youngest player to win a PGA Tour-sponsored event.

August

adidas Group Executive Board members and top managers welcome investors and analysts at our 8th Investor Day taking place at Reebok headquarters in Canton, Massachusetts, USA.

Presentations focus on the Group’s medium-term strategic direction and our brands’ targets, priorities and key initiatives in 2008 and beyond.

Reebok launches its newest global marketing campaign “Two People in Everyone” highlighting that consumers have separate sport and lifestyle personalities.

The German Football Association (DFB) and adidas announce the long-term extension of their successful partnership of more than 50 years until 2018.

Numerous adidas and Reebok athletes win gold at the 11th IAAF World Championships in Osaka, Japan. These include adidas sponsored pole vaulter Yelena Isinbayeva and sprinters Tyson Gay, Veronica Campbell, Jeremy Wariner and Allyson Felix as well as Reebok sponsored heptathlete Carolina Kluft.

september

adidas sponsored and No. 1 ranked tennis star Justine Henin cap - tures her 2nd US Open title in New York, USA, and her 7th Grand Slam crown. On the men’s side, adidas sponsored Serbian tennis player Novak Djokovic reaches his career-first Grand Slam singles final, taking him to No. 3 in the world rankings.

adidas is the official supplier to the 6th Rugby World Cup in France, which is kicked off with 20 rugby nations playing, as well as the Principle Sponsor of the rugby federations of New Zealand and Argentina. Reebok is the outfitter of Wales.

Rockport launches a new collection of men’s dress, casual and outdoor footwear featuring the adidas Torsion^® System Technology.

Defending his Berlin Marathon title, adidas sponsored long- distance legend Haile Gebrselassie breaks the world record, clocking 2:04:26.

The adidas sponsored German women’s team wins the FIFA Women’s World Cup final in China against Brazil, making them the first nation to successfully defend their title.

For the 8th consecutive time, adidas AG is included in the Dow Jones Sustainability Indexes, which analyze the social, environmental, and financial performance of more than 300 companies worldwide. Further, adidas AG is again included into the FTSE4 Good Index.

July August september

› Operational and Sporting Highlights Third Quarter 2007 04

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interview with the ceo

› Interview with the CEO 05

the adidas group turned in a strong performance in the first nine months of 2007.

Based on this development, the group has reconfirmed its guidance for the full year. With the highest increase in brand adidas backlogs in over nine years, the group is well positioned for what promises to be an exciting 2008.

in the following interview, herbert hainer, adidas group chairman and ceo,

reviews the first nine months of the year, and discusses the group’s strategic

and financial outlook for the remainder of 2007 and beyond.

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Herbert, the adidas Group has now delivered over 20% earnings growth for two consecutive quarters.

How do you evaluate your performance in the third quarter? And can we expect these positive trends to continue in Q4?

Brand adidas sales are up a strong 8% currency- neutral in the first nine months and backlog growth has accelerated during the quarter to an impressive 16%. What are the main drivers of this development?

We’ve said for a long time that raising profitability is the most critical component of our strategy to drive long- term growth and increase shareholder value – and the third quarter highlights the advances we continue to make toward this important goal. Underlying gross and operating margins improved in all brand segments during the quarter. Add to that strong progress on our Reebok integration cost synergies and the absence of purchase price accounting impacts that artificially lowered Reebok’s gross margin last year, and our third quarter gross margin increased 3.6 percentage points versus the prior year level to 48.6%. This, coupled with solid top-line growth despite macroeconomic headwinds and difficult retail conditions in several key markets, helped us grow earnings by 22%. And as preparations hit high gear for two of the world’s biggest sporting events next year, we are expecting even stronger top- and bottom-line growth in the fourth quarter.

Performance is central to our Group’s philosophy and nowhere is this more visible than at brand adidas.

During 2007 the brand has exceeded our expectations, by expanding leading positions in sports cate gories such as football and tennis while at the same time making big strides in several others. In the first nine months, our running, basketball, training and women’s categories are all up at strong double-digit rates, and looking at our backlogs there is clearly more to come. The 16% currency-neutral backlog increase, driven by growth in all regions, represents the brand’s highest in more than nine years. Especially impressive this quarter is Europe, where backlogs grew a record 20%, the highest growth rate in the region since 1998. And while orders for the UEFA EURO 2008™ had a strong positive impact, it is important to note that each of the strategic categories we highlighted at our recent Investor Day helped drive this growth.

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NiNe MoNths RepoRt 2007 › adidas Group › › Interview with the CEO 07

There has been a considerable amount of newsflow recently in the football segment.

Can you give us an update on the world’s most popular sports category?

How are things shaping up at Reebok? Are current developments at the brand in line with your expectations and have you taken any further steps to accelerate the brand’s turnaround?

Whether it be the contested extension of our promotion contract with the German Football Federation (DFB) or a potential acquisition of Umbro, consolidation in the football category is now in full gear. However, whatever happens, I believe our commitment to the athlete and our promotion partners sets us apart from all our competitors, and consolidation certainly has no bearing on that. Brand adidas is committed to remaining the undisputed leader in football. This means working with the best teams and players around the globe, which is highlighted by our recent contract extension with the German and Greek federations, whose teams have already qualified for the UEFA EURO 2008™ next summer. But it also means delivering the best products and marketing. And here nobody does it better. In Q4 and in 2008, look for products and brand communication that showcase our commitment to innovation, style and performance. Our product pipeline is the strongest we have ever had. We will bring these products to market on an almost monthly basis between now and the big summer of football ahead.

As I mentioned in my answer to your first question, increasing profitability is the top priority for each of our brand segments. And while I would like to have seen more top-line growth at Reebok this year, especially in North America and the UK, I firmly believe we are doing all the right things to ensure that we turn around the brand. That means focusing first on helping the brand achieve profitability, which is much more in line with the other segments of our business, and then driving the top-line growth we know the brand is capable of. So let me talk about improving profitability. We do have a lot of progress to show here. Excluding the accounting effects from the purchase price charges related to the acquisition, we have improved operating profit in the Reebok segment by more than 15% in Q3. Looking forward to the coming quarters, we are well positioned for continued improvement. With respect to revenues, we are delivering big growth in Asia and Latin America.

Here too, momentum is on our side, so we expect even bigger increases in the next several quarters. And

even in North America, our footwear backlogs are showing an important sequential improvement, despite a

significantly lower level of business with one of the region’s leading retailers as a result of efforts to improve

the health of the brand with that account.

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Herbert, where do you see your golf business headed, and how is the Group positioning itself for the future?

What is your view on the larger economic picture, and how do you see it affecting the Group in the next 12 months?

The golfer remains one of the most sophisticated consumers around, demanding a high level of person- alization and customization. Continuous innovation and delivery of best-in-class technologies is essential for success in the golf industry and TaylorMade-adidas Golf is the unrivaled leader in this respect. You only have to look at our performance in metalwoods this year where, despite fierce competition and technological hype, we extended our leadership position in golf’s most prestigious category. We brought two new driver families to the market in 2007 which quickly became the industry’s leading two drivers.

Growth rates have accelerated in this category every quarter and in all regions. But our success is not just limited to metalwoods. At adidas Golf, footwear and apparel continue to grow at strong double-digit rates and for the first time ever we have gained the number one footwear position in Japan. But don’t forget that it was this time last year when we divested the Greg Norman Collection wholesale apparel business.

Excluding this effect, revenues have grown 8% on a currency-neutral basis during the first nine months, and a strong 14% in the third quarter. We are pleased with these developments, and will be putting a special focus on improving profitability in 2008.

Clearly there are issues that are affecting how consumers are feeling right now. Consumer confidence indicators have worsened during the course of the year, with Japan and the US seeing the lowest levels since 2004 and 2005 respectively, and the EU losing gains made in the early part of 2007. The third quarter had its share of challenges but you can see how well we can deal with it. We just continue to make our Group better able to perform – a new and exciting product mix, more efficient operations, and strict financial discipline. Economies and consumers vary around the globe, and our reach ensures that we can benefit from economies that will outperform – you see this in our growing presence in Asia and Russia.

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NiNe MoNths RepoRt 2007 › adidas Group › › Interview with the CEO 09

So looking out to the remainder of 2007, how confident are you that you will be able to deliver on your full year financial goals?

With an exciting 2008 just around the corner, are you confident the adidas Group is well positioned to deliver sustainable profitable performance?

Herbert, thank you for this interview.

Very confident. Following our strong performance in the first nine months, we are very much on track to achieving the goals we set for ourselves in 2007. At the Group level, we expect mid-single-digit currency- neutral revenue growth, driven by brand adidas where we now project sales to increase at a high-single-digit currency-neutral rate. We expect our gross margin to be at the higher end of our guided range of 45 to 47%, and our operating margin to be around 9%. As a result, we are extremely confident that we will achieve net income growth at a rate approaching 15%.

2008 will also be an opportunity for the world to see and feel the excitement generated by the Olympics

in Beijing and the UEFA EURO 2008™ in Austria and Switzerland. And these two events will bring our

brands front and center in what I am convinced is going to be a great year for the adidas Group. We will

enter the year stronger than ever, and our expectations are high on many fronts. The outstanding backlog

development at brand adidas proves that we are set to extend our market-leading positions in both Europe

and Asia. At Reebok, we will continue to revitalize the brand, with major new product technologies and global

brand communication. At TaylorMade-adidas Golf, we will continue to build on our reputation for being

the most innovative and relevant golf brand in the market today. It is with this confidence that we can give

you preliminary guidance for 2008 of high-single-digit currency-neutral revenue growth and net earnings

growth that will exceed that of 2007.

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our share

in the third quarter of the year, international stock markets were heavily impacted by the crisis on the Us subprime mort- gage market. this led to a sharp downturn across global indices in July. As a reaction to the turbulences, the Federal Reserve intervened twice by lowering interest rates. After- wards, stock markets recovered and regained some of their previous losses. the DAX-30 lost 1% and closed the quarter at 7,862 points. the adidas AG share lost 2% over the period.

overall share price performance positive in First nine months of 2007

International stock markets, the DAX-30 and the adidas AG share price showed strong performance in the first nine months of 2007 as a result of positive macroeconomic indicators, robust company earnings as well as buoyant merger and acquisition activity. Although capital markets and our share price experienced a downturn at the beginning of the third quarter resulting from the crisis on the US subprime mortgage market, the adidas AG share price increased 22% during the first nine months of 2007, outperforming the DAX-30 (+19%) and the MSCI World Textiles, Apparel & Luxury Goods Index (+11%), which comprises the Group’s main competitors.

Over the twelve-month period ending September 30, the adidas AG share increased 24%, whereas the DAX-30 gained 31% and the MSCI World Textiles, Apparel & Luxury Goods Index advanced 26%.

mixed share price Development in third Quarter

At the beginning of the third quarter, international stock markets, the DAX-30 and our share price lost ground due to an intensification of the US subprime mortgage market crisis.

The adidas AG share price also suffered from concerns about the short-term business outlook for Reebok in advance of the Group’s earnings release at the beginning of August.

The weak state of the US mall-based business and several earnings announcements from suppliers and retailers which were below expectations also negatively contributed to this de velopment. To calm international stock markets and reduce the risk of a sharp slowdown of the US economy, the Federal Reserve lowered interest rates. In early August, our Group released quarterly earnings exceeding market expectations.

This resulted in a positive market reaction on the day of the announcement. Afterwards, however, our share price trended down in line with the overall market. After our Investor Day event, it regained somewhat during the rest of the period as a result of widespread positive response to the Group’s medium- term strategic initiatives. The adidas share closed the quarter at € 46.00, representing a decrease of 2% compared to the end of the second quarter. The DAX-30 decreased 1% and the MSCI World Textiles, Apparel & Luxury Goods Index improved 2% over the same period.

› Our Share 10

the adidas AG share

Number of shares outstanding

nine months average 203,583,762 at September 30 203,625,060 ¹⁾

Type of share No-par-value share

Free float 100%

Initial Public Offering November 17, 1995 Share split June 6, 2006 (in a ratio of 1: 4)

Stock exchange All German stock exchanges

Stock registration number (ISIN) DE0005003404

Stock symbol ADS, ADSG.DE

Important indices DAX-30

MSCI World Textiles, Apparel & Luxury Goods Deutsche Börse Prime Consumer Dow Jones STOXX Dow Jones EURO STOXX Dow Jones Sustainability FTSE4Good Europe Ethibel Excellence

1) All shares carry full dividend rights.

share price Development in 2007¹⁾

120

110

100

90

Dec. 31, 2006 Sept. 30, 2007

adidas ag DaX-30

msci World textiles, apparel & Luxury goods 1) Index: December 31, 2006 = 100

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NiNe MoNths RepoRt 2007 › adidas Group › › Our Share 11

aDRs influenced by situation on Us stock market

The number of Level 1 ADRs (American Depositary Receipts) decreased slightly by 2% in the third quarter, reflecting capital market uncertainty with regard to the subprime mortgage crisis and the North American sporting goods market.

At September 30, 2007, 11.9 million ADRs were outstanding (June 30, 2007: 12.2 million). This figure is higher compared to both December 31, 2006, when 11.3 million ADRs were out - standing, as well as the 5.6 million level on September 30, 2006.

The Level 1 ADR closed the third quarter at US $ 32.80, representing an increase of 3% compared to the end of the second quarter of 2007. Compared to the year-end 2006 level and the level on September 30, 2006, our ADR advanced 30% and 38%, respectively. This represents improvements of 8 and 14 percentage points above the performance of our common stock and reflects the strength of the euro compared to the US dollar.

Directors’ Dealings Reported on our corporate Website Purchase or sale transactions of adidas AG shares (ISIN DE0005003404) or related financial instruments, as de fined by article 15a of the German Securities Trading Act (Wert- papierhandelsgesetz – WpHG), conducted by members of our Executive or Supervisory Boards, by key executives or by any person in close relationship with these persons are reported on our website www.adidas Group.com/directors_dealings. In the third quarter, adidas AG received no such notifications.

changes in shareholder Base

In the third quarter of 2007, adidas AG did not receive any voting right notifications according to article 21, section 1 WpHG.

adidas included in Dow Jones sustainability indexes and Ftse4good index

For the eighth consecutive time, adidas AG has been included in the Dow Jones Sustainability Indexes. The DJSI World and DJSI STOXX indexes analyze the social, environmental and financial performance of more than 300 companies worldwide. adidas was rated an industry leader on sustainability issues and Corporate Social Responsibility in the category

“Clothing, Accessories & Footwear”. Further, adidas AG was again included into the FTSE4Good Index. Companies in this index series meet stringent social, ethical and environmental criteria and are positioned to capitalize on the benefits of responsible business practice.

investor Relations service enhanced

In the third quarter, we continued to enhance our service to shareholders. In late August, we held our Investor Day at the Reebok headquarters in Canton, Massachusetts, USA.

Around 80 analysts and investors attended the event where management gave an update on the Group’s medium-term strategic direction and major 2008 product and advertising initiatives. On August 9, we hosted our third retail investor online chat session. Natalie Knight, Vice President Investor Relations, answered questions related to our Group, especially the second quarter results. The next chat will be held on November 9, 2007 at 3 pm (CET). It will be accessible via www.adidas-Group.com/investors.

historical performance of the adidas AG share and important indices at september 30, 2007 in %

Year-to- 1 3 5 Since

date year years years IPO

adidas AG 22 24 64 166 429

DAX-30 19 31 102 184 257

MSCI World Textiles, Apparel & Luxury

Goods 11 26 78 210 176

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› Group Management Report 12

group Business performance

in the first nine months of 2007, currency-neutral sales for the adidas Group increased 5%, mainly driven by a strong sales increase at brand adidas as well as underlying sales growth in the taylorMade-adidas Golf segment. in euro terms, revenues of the adidas Group grew 1% to € 7.879 bil - lion in the first nine months of 2007 from € 7.836 billion in 2006. the Group’s gross margin increased 2.8 percentage points to 47.7% in 2007 (2006: 44.9%) due to improvements in all segments. Consequently, the Group’s gross profit in- creased 7% to reach € 3.755 billion in the first nine months of 2007 versus € 3.518 billion in 2006. the Group’s operat- ing margin increased 0.7 percentage points to 11.3% in the first nine months of 2007 from 10.6% in 2006, primarily driven by the higher gross margin which more than offset higher operating expenses as a percentage of sales. the Group’s operating profit increased 7% to € 889 million in the first nine months of 2007 versus € 829 million in 2006.

the Group’s net income attributable to shareholders increased 13% to € 530 million in the first nine months of 2007 from € 469 million in 2006 as a result of the operating profit increase, lower net financial expenses and a decrease of minority interests. As a consequence, basic earnings per share also increased 13% to € 2.60 in the first nine months of 2007 versus € 2.31 in the prior year.

economic and sector Development

World economy influenced by situation in credit markets In the third quarter of 2007, the global economy was strongly influenced by the crisis on the US subprime mortgage market and its spillover effects on international credit and capital markets. Consumer confidence indicators have worsened during the course of the year, with Japan and the USA seeing the lowest level since 2004 and 2005 respectively, and the EU paring gains made in the early part of 2007. In Europe, economic sentiment decreased in the third quarter. Export growth remained robust, however, despite record high euro exchange rates versus all major foreign currencies. In the USA, continued corrections in the residential real estate market, rising oil prices and increased inflation drove lower private consumption and a visible slowdown. The Asian econo - mies remained healthy and continued to expand with the exception of Japan where slowing business investment and weak consumption growth suppressed economic growth. In Latin America, markets continued to grow in most countries and remained relatively unaffected by the impact of recent macroeconomic developments.

Regional industry growth Rates Diverge

During the third quarter, the sporting goods industry delivered a mixed performance. In Western Europe, the largest sporting goods markets showed a relatively stable development. A continuously difficult retail landscape in the UK was offset by a positive development in the region’s other mature markets and continued strong growth in emerging markets. Average selling prices remained stable. In North America, the retail environment remained challenging, due to the continued underperformance of mall-based retailers.

Sporting goods retailers, however, continued to perform well.

Average selling prices decreased moderately year-over-year for many brands. In Asia, the market continued to grow with China being the main contributor. In Japan, however, the market remained weak in line with overall retail conditions.

Average selling prices increased modestly in most countries of the region with the exception of Japan. In Latin America, the industry grew solidly in line with the overall economy and average selling prices remained stable.

exchange Rate Development¹⁾ € 1 equals

Average Average

rate Q4 Q1 Q2 Q3 rate

2006²⁾ 2006 2007 2007 2007 2007²⁾ USD 1.2448 1.3170 1.3318 1.3505 1.4179 1.3445 GBP 0.6850 0.6715 0.6798 0.6740 0.6968 0.6765 JPY 144.15 156.93 157.32 166.63 163.55 160.36 1) Spot rates at quarter-end.

2) Average rate for the first nine months.

Quarterly Consumer Confidence Development by Region

Q3 Q4 Q1 Q2 Q3

2006 2006 2007 2007 2007

USA¹⁾ 105.9 110.0 108.2 105.3 99.8

Euro Zone²⁾ (8) (6) (4) (2) (6)

Japan³⁾ 45.6 47.3 46.7 44.3 43.9

1) Source: Conference Board 2) Source: European Commission

3) Source: Economic and Social Research Institute, Government of Japan

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income statement

consolidation changes impact operating Results

In the first nine months of 2007, several consolidation chang es influenced the reported results for the Group and the seg - ments. The business of Reebok International Ltd. (USA) and its subsidiaries has been consolidated within the adidas Group since February 1, 2006. As a result, Reebok’s 2006 first nine months results contained only eight months of the nine-month period, whereas in 2007 nine months of Reebok’s results are consolidated. This had a positive impact on the comparison of Reebok sales to the prior year, while the segment’s gross and operating margins were negatively impacted. In addition, sales and operating margin at TaylorMade-adidas Golf were negatively impacted by the divestiture of the Greg Norman Collection (GNC) wholesale business, which was completed on November 21, 2006.

synergies support operational performance

The operational performance of the adidas and Reebok segments was positively impacted by the realization of reve - nue and cost synergies resulting from the integration of the Reebok business into the adidas Group. Revenue synergies were mainly related to the Reebok segment due to incre- mental sales increases in several countries, in particular Russia and China, for which Reebok had purchased the dis- tribution rights, effective January 1, 2007. Revenue synergies also had a positive impact on sales development in the adidas segment as a result of higher revenues from the licensed business. Cost synergies resulting from the combination of the sourcing activities of adidas and Reebok had a positive impact on the cost of sales of both segments, in particular for adidas due to the higher volume of products sourced compared to Reebok. This positive impact on the Group’s gross margin was largely offset by integration costs in the HQ/Consolidation segment and to a lesser extent at adidas and Reebok which negatively impacted the Group’s operating expenses. This development is in line with our expectations for the Group to realize revenue synergies of around

€ 100 million and net cost synergies of around € 17.5 million in the full year 2007.

Lower ppa effect positively impacts operational performance

Reebok’s results continue to be negatively impacted by purchase price allocation charges, however to a significantly lesser extent compared to the prior year. In the first nine months of 2007, Reebok’s operating margin was negatively impacted by total PPA charges of € 10 million versus

€ 71 million in 2006.

strong Decrease of minority interests

The Group’s minority interests decreased strongly compared to the prior year due to the purchase of the remaining 49% of shares from the joint venture partner of the adidas subsid- iary in Korea, effective September 1, 2006. This had a positive impact on the Group’s non-operational performance.

Nine Months Net sales € in millions

2003 2004¹⁾ 2005¹⁾ 2006²⁾ 2007

4,913 4,664 5,115 7,836 7,879 1) Figure reflects continuing operations as a result of the divestiture of the

Salomon business segment in 2005.

Nine Months 2007 Net sales by segment

HQ / Consolidation 1% adidas 69%

TaylorMade-adidas Golf 8%

Reebok 22%

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adidas group currency-neutral sales increase 3% in Q3 Third quarter Group revenues grew 3% on a currency-neutral basis. This development was driven by sales increases at both adidas and TaylorMade-adidas Golf. Reebok sales, however, declined. On a regional basis, sales grew solidly in all regions except North America. Currency movements negatively impacted revenues in euro terms. Group sales in euro terms remained virtually stable at € 2.941 billion in the third quarter of 2007 (2006: € 2.949 billion).

Q3 sales growth Driven by sales increases at adidas Solid growth in the adidas and TaylorMade-adidas Golf segments contributed to the Group’s sales increase in the third quarter of 2007. Currency-neutral adidas revenues increased 7% during the period. Currency-neutral sales in the Reebok segment decreased 2%. At TaylorMade-adidas Golf, currency- neutral revenues increased 4%, negatively impacted by the divestiture of the GNC wholesale business. On a like-for- like basis, revenues increased 14%. Sales recorded in the HQ/ Consolidation segment, which reflect revenues not attributable to the adidas, Reebok or TaylorMade-adidas Golf segments and primarily comprise sales of Salomon products as part of our cooperation agreement with Amer Sports Corporation, decreased by 65% on a currency-neutral basis mainly due to the expiration of the footwear sourcing cooperation agreement. Currency translation effects negatively impacted sales in all segments in euro terms. adidas sales in euro terms increased 4% to € 2.012 billion in the third quarter of 2007 from € 1.941 billion in 2006. Sales at Reebok decreased 7% to € 728 million versus € 778 million in the prior year. TaylorMade-adidas Golf sales in euro terms decreased 2% to € 190 million in 2007 from € 194 million in 2006. HQ/ Consolidation sales decreased 67% to € 12 million from € 36 million in the prior year.

adidas group currency-neutral sales grow 5% in the First nine months of 2007

During the first nine months of 2007, Group revenues increased 5% on a currency-neutral basis, driven by sales growth in the adidas segment, the inclusion of an additional month in the Reebok segment versus the prior year and underlying sales increases at TaylorMade-adidas Golf. On a reported basis, how - ever, TaylorMade-adidas Golf revenues declined, neg atively impacted by the divestiture of the GNC wholesale business.

On a regional basis, adidas Group currency-neutral sales grew in all regions except North America. Currency movements negatively impacted Group sales in euro terms. Group revenues grew 1% in euro terms to € 7.879 billion in the first nine months of 2007 from € 7.836 billion in 2006. On a like-for-like basis, including Reebok’s revenues for the full nine-month periods of both years and excluding the effect from the divestiture of the GNC wholesale business, sales increased 4%.

Nine Months 2007 Net sales Growth in € by segment and Region¹⁾ in %

North Latin

Europe America Asia America total

adidas 3 (5) 7 31 4

Reebok²⁾ 6 (12) 11 21 (3)

TaylorMade-adidas Golf³⁾ 8 (18) 9 16 (8)

total 3 (10) 8 29 1

1) Versus the prior year.

2) Reebok nine months 2006 results only included eight months of the nine-month period.

Nine Months 2007 Currency-Neutral Net sales Growth by segment and Region¹⁾ in %

North Latin

Europe America Asia America total

adidas 4 3 14 36 8

Reebok²⁾ 7 (5) 17 31 2

TaylorMade-adidas Golf³⁾ 8 (12) 18 25 (1)

total 5 (3) 15 35 5

1) Versus the prior year.

2) Reebok nine months 2006 results only included eight months of the nine-month period.

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adidas segment Drives top-Line growth in the First nine months of 2007

The adidas segment set the pace for the Group’s organic sales growth in the first nine months of 2007. Currency- neutral adidas segment revenues increased 8% during the period. Currency-neutral sales in the Reebok segment grew 2%, driven by the inclusion of January, which was not consolidated in 2006. On a like-for-like basis, sales declined by 4% in the first nine months of 2007. This comparison reflects sales for the full nine-month periods of both years and excludes sales related to the NBA and Liverpool licensed businesses which were transferred to brand adidas in the first half of 2006. At TaylorMade-adidas Golf, currency- neutral revenues decreased 1%, negatively impacted by the divestiture of the GNC wholesale business. On a like-for-like basis, TaylorMade-adidas Golf sales increased 8%. Sales recorded in the HQ/Consolidation segment decreased by 58%

on a currency-neutral basis mainly due to the expiration of the footwear sourcing cooperation agreement with Amer Sports Corporation. Currency translation effects negatively impacted sales in all segments in euro terms. adidas sales increased 4% to € 5.465 billion in the first nine months of 2007 from € 5.248 billion in 2006. Sales at Reebok decreased 3%

to € 1.765 billion versus € 1.828 billion in the prior year.

TaylorMade-adidas Golf sales declined 8% to € 609 million in 2007 from € 658 million in 2006. HQ/Consolidation sales decreased 61% to € 40 million from € 101 million in the prior year.

sales increase in nearly all Regions

adidas Group sales grew in all regions except North America.

This growth was driven by positive development at adidas and TaylorMade-adidas Golf as well as the consolidation of nine months of Reebok’s revenues in 2007 versus only eight months in the prior year. adidas Group sales in Europe during the first nine months of 2007 grew 5% on a currency-neutral basis. In North America, Group sales declined 3%. Sales for the adidas Group in Asia increased 15%. In Latin America, sales increased 35%. Currency translation effects negatively impacted sales in euro terms in all regions. Sales in Europe increased 3% in euro terms to € 3.455 billion in 2007 from

€ 3.339 billion in 2006. Sales in North America decreased 10% to € 2.248 billion in 2007 from € 2.492 billion in the prior year. Revenues in Asia grew 8% to € 1.616 billion in 2007 from

€ 1.494 billion in 2006. Sales in Latin America grew 29% to

€ 484 million in 2007 from € 375 million in the prior year.

group apparel sales grow strongly

From a product category perspective, Group sales growth in the first nine months of the year was largely driven by the apparel category. Currency-neutral footwear sales increased 3% during the period with strong increases in the adidas and TaylorMade-adidas Golf segments being partly offset by declines in the Reebok segment. Apparel sales grew 9%

on a currency-neutral basis during the first nine months of 2007. Strong increases in the adidas and Reebok segments were partly offset by a decline at TaylorMade-adidas Golf due to the divestiture of the GNC wholesale business despite strong increases in adidas Golf apparel sales. Hardware sales decreased 2% on a currency-neutral basis following excep- tionally strong prior year sales in the adidas segment related to the 2006 FIFA World Cup™. Currency trans lation effects negatively impacted sales in all categories in euro terms. As a result, footwear sales in euros declined 1% to € 3.730 billion in the first nine months of 2007 (2006: € 3.754 billion).

Ap parel sales in euro terms grew 4% to € 3.274 billion in the first nine months of 2007 from € 3.137 billion in the prior year. Hardware sales in euros decreased 7% to € 876 million in 2007 from € 945 million in 2006.

Nine Months 2007 Net sales by Region ¹⁾

Latin America 6% Europe 44%

Asia 21%

North America 29%

1) Excluding HQ/Consolidation.

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gross margin increases by 2.8 percentage points

The gross margin of the adidas Group increased by 2.8 percentage points to 47.7% in the first nine months of 2007 (2006:

44.9%), driven by underlying improvements in all segments.

Cost synergies resulting from the combination of the adidas and Reebok sourcing activities, which positively affected both segments’ cost of sales, as well as the non- recurrence of negative impacts from purchase price allo cation in the Reebok segment (2006: € 64 million) also positively impacted this development. As a result, gross profit for the adidas Group rose 7% in the first nine months of 2007 to reach

€ 3.755 billion versus € 3.518 billion in the prior year.

Royalty and commission income grows strongly

Royalty and commission income for the adidas Group increased 21% on a currency-neutral basis. Increased adidas and Reebok licensee sales, which are not included in the Group’s total sales figures, and higher average royalty rates were the main drivers of this increase. In euro terms, royalty and commission income increased by 15% to € 71 million in the first nine months of 2007 from € 62 million in the prior year.

higher expenses at Reebok Drive operating expense increase

Operating expenses, including depreciation and amortiza- tion, comprise two major components: marketing working budget and operating overhead costs. Operating expenses as a percentage of sales increased by 2.2 percentage points to 37.3% in the first nine months of 2007 from 35.1% in 2006.

This increase primarily reflects one-time costs related to the integration of Reebok into the adidas Group as well as higher expenses in the Reebok segment for advertising, product development and initiatives to grow the brand in emerging markets. These expenses were heavily weighted towards the second quarter of the year. In absolute terms, operating expenses for the adidas Group increased by 7%

to € 2.937 billion in the first nine months of 2007 from

€ 2.750 billion in the prior year.

strong expansion in emerging markets Drives employee growth

At September 30, 2007, the adidas Group employed 29,529 people. This represents an increase of 14% versus the previous year’s level of 25,877 and a 12% increase since the end of 2006 when the Group employed 26,376 people. This increase is primarily related to new adidas segment employees in emerging markets as well as own-retail activities.

operating margin Reaches 11.3%

The operating margin of the adidas Group increased 0.7 percentage points to 11.3% in the first nine months of 2007 (2006:

10.6%). This reflects the Group gross margin increase, which more than offset higher operating expenses as a percentage of sales. As a result, operating profit for the adidas Group in - creased 7% in the first nine months of 2007 to reach € 889 mil - lion versus € 829 million in 2006.

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Nine Months operating profit € in millions

2006¹⁾ 2007

829 889 1) Including Reebok business segment from February 1, 2006 onwards.

Nine Months operating expenses € in millions

2006¹⁾ 2007

2,750 2,937 1) Including Reebok business segment from February 1, 2006 onwards.

2006¹⁾

2007

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Nine Months Gross profit € in millions

3,518 3,755 1) Including Reebok business segment from February 1, 2006 onwards.

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net Financial expenses Decrease 14%

Net financial expenses decreased 14% to € 104 million in the first nine months of 2007 from € 121 million in the prior year as a result of lower financial expenses following the strong reduction of net borrowings (see Balance Sheet and Cash Flow).

Financial income Down by 23%

Financial income decreased by 23% to € 25 million in the first nine months of 2007 from € 33 million in the prior year. This mainly reflects a strong decline in the Group’s cash position versus the beginning of 2006 when the Group held a signifi- cant cash position after the capital increase and the proceeds related to the divestiture of the Salomon business segment.

Both transactions were completed in the fourth quarter of 2005.

Financial expenses Decrease by 16%

Financial expenses decreased 16% to € 129 million in the first nine months of 2007 (2006: € 153 million) as a result of significantly lower gross borrowings versus the prior year.

This more than compensated higher financial expenses in January 2007 versus the prior year, which were related to the financing of the Reebok acquisition.

income Before taxes increases by 11%

As a result of the Group’s operating profit increase and lower net financial expenses, income before taxes for the adidas Group increased 11% to € 785 million in the first nine months of 2007 from € 709 million in 2006. As a percentage of sales, IBT increased by 0.9 percentage points to 10.0% in 2007 from 9.0% in 2006.

net income attributable to shareholders Up 13%

The Group’s net income attributable to shareholders increased 13% to € 530 million in the first nine months of 2007 from

€ 469 million in 2006. The increase in the Group’s operating profit, lower net financial expenses and lower minority interests contributed to this development. The Group’s minority interests declined by 72% to € 4 million in the first nine months of 2007 (2006: € 14 million) due to the buyout of the Group’s joint venture partner in Korea. The Group’s tax rate increased 0.1 percentage points to 32.0% in the first nine months of 2007 from 31.9% in the prior year.

Basic and Diluted earnings per share increase 13%

In line with the increase of the Group’s net income attributable to shareholders, basic earnings per share also increased 13% to € 2.60 in the first nine months of 2007 versus € 2.31 in 2006. The Group’s total number of shares outstanding increased by 128,200 shares to 203,625,060 at the end of the first nine months of 2007 from 203,496,860 at the end of the first nine months of 2006 as a result of shares from stock options exercised as part of Tranches I, II, III, IV and V of the Management Share Option Plan (MSOP) of adidas AG.

Consequently, the weighted average number of shares used in the calculation of basic earnings per share in the first nine months of 2007 was 203,583,762 (2006 average: 203,337,185).

Diluted earnings per share in the first nine months of 2007 also increased 13% to € 2.46 from € 2.18 in the prior year.

The weighted average number of shares used in the calculation of diluted earnings per share in the first nine months of 2007 was 219,456,361 (2006 average: 219,364,954). The dilu- tive effect mainly results from approximately sixteen million additional potential shares that could be created in relation to our outstanding convertible bond, for which conversion criteria were met for the first time at the end of the fourth quarter of 2004.

Nine Months Net income Attributable to shareholders

€ in millions

2003 2004¹⁾ 2005¹⁾ 2006²⁾ 2007

234 295 386 469 530 1) Includes continuing and discontinued operations.

Nine Months income Before taxes € in millions

2006¹⁾ 2007

709 785 1) Including Reebok business segment from February 1, 2006 onwards.