First HalF Year report 2008

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First HalF Year report 2008

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Financial Highlights 03 Operational and Sporting Highlights 04

Interview with the CEO 05 Our Share 10 Group Management Report 12 - Group Business performance 12 -- economic and sector Development 12

-- income statement 13 -- Balance sheet and Cash Flow 17

- adidas 19 - reebok 21 - taylorMade-adidas Golf 23

- subsequent events 25 - outlook 26

Consolidated Financial Statements 29 - responsibility statement 29 - Consolidated Balance sheet 30 - Consolidated income statement 31 - Consolidated statement of Cash Flows 32

- Consolidated statement of recognized income and expense 33

Notes 34 Segmental Information 37 - segmental information by Brand 37 - segmental information by region 38

Management Boards 39 Financial Calendar 2008 / 2009 40

Contact 41

aDiDas Group seGMental inForMation

€ in millions

1st Half Year 1st Half Year 2nd Quarter 2nd Quarter

2008 2007 Change 2008 2007 Change

adidas net sales Gross profit Gross margin operating profit operating margin reebok net sales Gross profit Gross margin operating profit operating margin taylorMade-adidas Golf net sales

Gross profit Gross margin operating profit operating margin

3,787 3,454 9.6 % 1,818 1,635 11.2 %

1,843 1,613 14.2 % 879 754 16.5 %

48.7 % 46.7 % 2.0 pp 48.3 % 46.1 % 2.2 pp

512 461 11.1 % 175 191 (8.2 %)

13.5 % 13.3 % 0.2 pp 9.6 % 11.7 % (2.0 pp)

923 1,038 (11.1 %) 469 514 (8.8 %)

361 394 (8.2 %) 193 201 (3.9 %)

39.2 % 37.9 % 1.2 pp 41.2 % 39.1 % 2.1 pp

(24) 4 (679.6 %) (11) (1) (787.5 %)

(2.6 %) 0.4 % (3.0 pp) (2.4 %) (0.2 %) (2.2 pp)

417 419 (0.4 %) 226 239 (5.4 %)

194 186 4.4 % 105 107 (1.9 %)

46.5 % 44.3 % 2.1 pp 46.4 % 44.7 % 1.7 pp

43 27 59.8 % 19 27 (29.3 %)

10.3 % 6.4 % 3.9 pp 8.6 % 11.5 % (2.9 pp) FIRSt HalF YEaR 2008

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First HalF Year report 2008 --- adidas Group 2004¹⁾

2005¹⁾ 2006²⁾ 2007 2008

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.

First HalF Year net sales

€ in millions

3,190

4,887 4,938

5,142 2,906

First HalF Year net inCoMe attriButaBle to sHareHolDers

€ in millions 2004¹⁾ 2005¹⁾ 2006²⁾ 2007 2008

1) includes continuing and discontinued operations.

171

226 232 116

FinanCial HiGHliGHts (iFrs)

1st Half Year 1st Half Year 2nd Quarter 2nd Quarter

2008 2007 Change 2008 2007 Change

operating Highlights (€ in millions) net sales

operating profit

net income attributable to shareholders Key ratios (%)

Gross margin

operating expenses as a percentage of net sales operating margin

effective tax rate

net income attributable to shareholders as a percentage of net sales operating working capital as a percentage of net sales¹⁾

equity ratio Financial leverage

Balance sheet and Cash Flow Data (€ in millions) total assets

inventories

receivables and other current assets Working capital

net borrowings shareholders‘ equity Capital expenditure

net cash provided by operating activities per share of Common stock (€) Basic earnings

Diluted earnings operating cash flow share price at end of period other (at end of period) number of employees number of shares outstanding²⁾ average number of shares³⁾

rounding differences may arise in percentages and totals.

all Group figures comprise the brand segments and HQ / Consolidation.

1) twelve-month trailing average.

2) all shares except treasury shares carry full dividend rights.

3) after deduction of treasury shares.

286

5,142 4,938 4.1 % 2,521 2,400 5.0 %

490 417 17.4 % 208 188 10.3 %

286 232 23.0 % 116 104 11.7 %

49.6 % 47.1 % 2.5 pp 50.1 % 47.4 % 2.7 pp 40.9 % 39.6 % 1.3 pp 42.7 % 40.5 % 2.2 pp

9.5 % 8.5 % 1.1 pp 8.2 % 7.8 % 0.4 pp

31.5 % 32.0 % (0.5 pp) 30.8 % 31.6 % (0.8 pp)

5.6 % 4.7 % 0.9 pp 4.6 % 4.3 % 0.3 pp

24.2 % 25.6 % (1.4 pp) 24.2 % 25.6 % (1.4 pp) 31.6 % 33.7 % (2.1 pp) 31.6 % 33.7 % (2.1 pp) 82.3 % 81.2 % 1.1 pp 82.3 % 81.2 % 1.1 pp

8,679 8,761 (0.9 %) 8,679 8,761 (0.9 %)

1,806 1,716 5.2 % 1,806 1,716 5.2 %

2,343 2,212 5.9 % 2,343 2,212 5.9 %

1,898 1,978 (4.1 %) 1,898 1,978 (4.1 %)

2,260 2,395 (5.6 %) 2,260 2,395 (5.6 %)

2,746 2,948 (6.9 %) 2,746 2,948 (6.9 %)

129 92 40.1 % 74 57 29.9 %

17 27 (36.6 %)

1.42 1.14 24.9 % 0.59 0.51 14.7 %

1.35 1.09 24.3 % 0.56 0.49 14.2 %

0.09 0.13 (35.6 %)

40.11 46.78 (14.3 %) 40.11 46.78 (14.3 %)

34,834 28,518 22.1 % 34,834 28,518 22.1 % 203,644,960 203,567,060 0.0 % 203,644,960 203,567,060 0.0 % 200,415,758 203,565,047 (1.5 %) 198,388,447 203,567,060 (2.5 %)

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First HalF Year report 2008 --- adidas Group to our sHareHolDers - operational and sporting Highlights second Quarter 2008

operational anD sportinG HiGHliGHts seConD Quarter 2008

-apRIl-

02.04. adidas and the ajax amsterdam football club announce the extension of their sponsorship deal until 2019.

18.04. adidas Japan opens its 10th performance Centre and 9th originals store in roppongi Hills, tokyo. taylorMade- adidas Golf also opens a new store in the same building complex on the same day. 19.04. picture 01 taylorMade- adidas Golf presents its new tour Burner^® campaign featuring the most important characteristics of its top metalwood.

22.04. adidas launches the football campaign “Dream Big”, in which the world’s biggest football stars meet the world’s smallest football teams. 25.04. reebok launches its new website www.reebok.com. 30.04. picture 02 adidas Ceo and Chairman Herbert Hainer and ueFa president Michel platini present the “europass gloria”, the official ball for the

Final of ueFa euro 2008™ in Vienna.

-MaY-

17.05. reebok sponsors the 25th “avon running” women’s run in Berlin with over 13,000 participants. 20.05. picture 03

reebok’s running shoe “premier smoothfit Cushion” is awarded the plus X seal for innovation by the plus X award, europe’s biggest technology contest. 27.05. picture 04 16 oversized F50 football boots, inspired by characteristic elements and the flags of the countries participating in the ueFa euro 2008™, are delivered to the teams and placed near their training camps for the duration of the tournament. 28.05. reebok announces that three future nFl players, Joe Flacco, Kenny phillips and Dan Connor, have signed multi-year endorsement agreements. 28.05. adidas launches mi originals, a custom ization tool that offers consumers the chance to design their own individual lifestyle products.

-JuNE-

02.06. reebok and Vulcabras s. a. announce the formation of a joint venture company to conduct the distribution of reebok products in argentina. 05.06. in light of its excellent performance measured in terms of globally recognized corporate responsibility standards, adidas aG is reaffirmed as a member company of the Ftse4Good index. 07.06. the european Football Championship kicks off in Basel, switzerland. With Germany, France, spain, romania and Greece,

adidas sponsors a total of five teams at ueFa euro 2008™. 07.06. adidas sponsored athlete ana ivanovic wins the French open and becomes the world’s new no. 1 women’s tennis player. 10.06. nearly 40 analysts and investors join the

Group’s CFo robin stalker and investor relations team for an investor Field trip to China. store and factory visits as well as extensive presentations outline the Group’s strategy in asia. 17.06. picture 05 the Boston Celtics with adidas superstar Kevin Garnett win the nBa Finals. 29.06. picture 06 With spain and Germany, adidas has two teams competing

head-to-head for the european Championship title. spain wins this three-striped Final.

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First HalF Year report 2008 --- adidas Group to our sHareHolDers - interview with the Ceo

interVieW WitH tHe Ceo the adidas Group has excelled in the first half of 2008, achieving double-digit top- and bottom-line growth. the ueFa euro 2008™ – which concluded with an all-adidas final – was an outstanding victory for the brand.

Despite challenging market conditions, a powerful global platform and a strong product pipeline put the Group well on track to achieve its 2008 goals.

Herbert Hainer

Ceo and Chairman of the executive Board

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First HalF Year report 2008 --- adidas Group

in tHe FolloWinG interVieW, HerBert Hainer, aDiDas Ceo anD CHairMan, reVieWs tHe First HalF oF 2008, anD DisCusses tHe Group’s strateGiC anD FinanCial outlooK.

HerBert, Has tHe aDiDas Group’s FinanCial perForManCe For tHe First siX MontHs liVeD up to Your eXpeC tations?

Our performance has been nothing short of exceptional in the first half of 2008, particularly in light of weaker consumer confidence and difficult macro conditions in several key markets. Despite these headwinds, we were able to reach several new milestones for the Group during the period. Sales surpassed € 5 billion, growing at 12 % on a currency-neutral basis.

All regions with the exception of North America grew at double-digit rates, with outstanding contributions coming from both the adidas and TaylorMade-adidas Golf segments.

Even more impressive is the expansion of our gross margin which grew two and a half percentage points to 49.6 % for the first half – punctuated by our first-ever gross margin of over 50 % which we achieved in the second quarter. In fact, we more than offset the planned increases in operating expenses largely related to marketing initiatives surrounding this summer’s major sporting events. And as a result, our net income for the first half grew 23 %. The progress made on our share buyback program during the period means earnings per share grew even faster - increasing 25 %. These results have more than met our expectations. They demonstrate the health of our business and place us on a clear path to achieving the goals we set for the full year.

in an interVieW prior to tHe ueFa euro 2008™ You CorreCtlY preDiCteD spain WoulD Be tHe Winner.

Can tHe aDiDas BranD also ClaiM ViCtorY FroM tHis FootBall speCtaCular?

One of our key campaigns for football in 2008 was entitled “Dream Big” and we did a lot more than dream – we executed.

What more can you ask for than an all-adidas final between Spain and Germany? And even more striking was the dominance of our individual stars, underscoring our position as the innovator in performance footwear. More players lined out in adidas footwear than any other brand. And it is no surprise that players in our footwear scored more than half of all the tournament goals. This, combined with our product and marketing initiatives, will result in 2008 being the most successful year in our over 50-year history in the sport. Our football business will grow more than 50 % compared to the last European Champion- ships four years ago and sales this year will also eclipse our record performance of the 2006 World Cup year by a double- digit rate.

“our performance has been nothing short of exceptional in the first half of 2008, … with outstanding contributions coming from both the adidas and taylorMade-adidas Golf segments.”

“our football business will eclipse our record performance of the 2006 World Cup year by a double-digit rate.”

to our sHareHolDers - interview with the Ceo

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BranD aDiDas sales GroWtH aCCelerateD in tHe seConD Quarter, inCreasinG 19 % CurrenCY-neutral.

is tHis inCrease purelY a result oF tHe MaJor sportinG eVents?

Major sporting events are an important platform to showcase adidas’ credentials as the leading sports brand in the world.

Time and again we have consistently converted the opportunities that these high-profile events provide into meaningful business – either through direct event-related revenues or by using the stage to drive ongoing brand awareness and build an emotional connection to the consumer. The UEFA EURO 2008™ and the Olympic Games in Beijing are in no small way play- ing an important role in the overall development of brand adidas in 2008. But we are by no means reliant on these large- scale events for the brand to succeed in the long term – because sport is not just about a single sporting occasion. It’s an ingredient of everyday life for athletes and consumers all around the world. We have market-leading positions across the globe, and we have higher exposure to the rapidly growing emerging markets than our competitors. All our strategic catego- ries have shown strong increases in the first half, and this is very reassuring. We can now say with confidence that in 2008 we will grow brand sales at a double-digit rate for the fourth year in a row. Without this broad-based strength and the ongoing desirability of the brand to a multitude of consumers, this type of performance would not be possible.

reeBoK Has sHoWn soMe siGns oF iMproVeMent in tHe seConD Quarter. neVertHeless, BaCKloGs reMain ratHer WeaK. Can You upDate us on HoW You see tHe Business proGressinG For tHe reMainDer oF tHe Year anD anY neW initiatiVes You HaVe taKen to reinViGorate tHe BranD?

Reebok’s brand revitalization is continuing. We have worked hard on the brand positioning, the product offering, and improving its distribution. It will take time, of course, and with the economic situation where it is, this may be longer than we originally expected. That said, Reebok delivered a satisfactory performance, growing in all regions except North America in the second quarter. Despite difficult market conditions, we saw 2 % currency-neutral growth year-on-year, which marks the first growth for the segment in five quarters. This is an improvement. However, we must continue to remain focused on driving profitable growth, even if this means sacrificing sales in the short term.

We are off to a solid start in the third quarter, having launched several new campaigns. In fact, we recently hosted a spec- tacular event celebrating our multi-year contract with driving ace Lewis Hamilton, giving our customers a behind-the-scenes look at “The Athlete within the Driver”. This partnership will enable us to showcase the new and improved Reebok brand to a whole new audience. And of course we are looking forward to the upcoming Beijing 2008 Olympic Games, where Reebok is sponsoring high-profile local hero Yao Ming. Many steps are already in place to maximize the brand’s new opportunities during the remainder of the year. But of course we know there is still a lot of work to be done.

“We can now say with confidence that in 2008 we will grow [adidas] brand sales at a double-digit rate for the fourth year in a row.”

“reebok’s brand revitalization is continuing … But of course we know there is still a lot of work to be done.”

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HoW is taYlorMaDe-aDiDas GolF MeasurinG up to WHat is reporteD to Be a CHallenGinG GolF enVironMent?

TaylorMade-adidas Golf’s growth of 11 % currency-neutral in the first half is a terrific achievement and we have once again captured market share in key categories. We even managed to accelerate our second quarter growth in the highly competi- tive US market. We remain dominant in the all-important metalwoods category and the launch of our new line of golf balls is allowing us to make strong inroads in the premium ball segment. Another striking highlight is the improvement in profit- ability. TaylorMade-adidas Golf delivered a double-digit operating margin in the first six months of the year for the first time since 2003. Like in many other segments of the sports industry, the environment is tough and we need to be mindful of the challenging consumer environment as well as rising input costs. Nevertheless, I fully expect the TaylorMade-adidas Golf segment to continue its strong outperformance relative to the market and remain on a direct path toward becoming the number one performance brand in the sport.

tHere is lots oF talK aBout MaCro ConDitions. HoW Do You see tHe aDiDas Group staCKinG up aGainst tHese CHallenGes?

These concerns are certainly valid, and we are keeping a close watch on macro conditions. However, this is a great example of the extraordinary value of our global footprint. From a regional standpoint, we are focused on the right places. We are leading the industry in emerging markets where the rising middle class continues to be a powerhouse for future growth. For instance, sales in China and Russia are both up over 50 % compared to the prior year, which is having an immensely positive impact on our financial performance. And even in some of the more challenging mature markets, we are showing tremen- dous resilience with solid growth in the UK and Japan. Our focus on improving the quality of distribution through closer cooperation with our trade partners and expanding our controlled space activities is really bearing fruit. And our scale gives us the tools and bargaining power to successfully mitigate many of the cost increases we currently face. Although we still have work to do with Reebok, this kind of broad-based strength makes it possible for our Group to continue performing even in difficult times.

“taylorMade-adidas Golf delivered a double-digit operating margin in the first six months of the year for the first time since 2003.”

“From a regional standpoint, we are focused on the right places.”

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aFter tHe stronG start to tHe Year Do You see anY sCope to inCrease Your Full Year GuiDanCe?

Our performance to date puts us firmly on track to achieve our full year targets and in several instances we now expect to even exceed our original goals. Although growth in the second half of the year will be slower, in line with the phasing of our product launches and this year’s major sporting events, the Group’s top line will grow at a high-single-digit currency-neutral rate. All brand segments will contribute to this development. In fact, brand adidas revenues will exceed our initial guidance and grow at a low-double-digit rate, versus the originally projected high-single-digit rate. Gross margin will also show a stronger improvement than originally projected and will exceed the top end of our previously anticipated range of between 47.5 % and 48.0 %. Our operating margin will also expand faster than initial expectations and approach 10.0 % versus origi- nal guidance of at least 9.5 %. And for the eighth consecutive year this will result in our net earnings growing at a double- digit rate which we expect to be at least 15 %.

aHeaD oF tHe openinG oF tHe BeiJinG 2008 olYMpiC GaMes, WHat Can You tell us aBout tHe iMpaCt tHis Great eVent Will HaVe on Your Group?

The Olympic Games is a very special event. For athletes it’s a once-in-a-lifetime opportunity to win medals, break records or achieve personal bests. For viewers, it’s a unique occasion to witness over two weeks of thrilling competition, courage and passion for sport – all the things that are at the very core of our company. That’s why we are proud to be so closely involved with the event and the athletes participating. Consumers in China and all around the world will see first hand our unrivalled commitment to performance sport. And the impact on our business will be very powerful. In 2008, China will become our second-largest revenue market after the US. And I fully expect the visibility and excitement we generate for our brands during this event to create a halo effect sustaining the momentum of our Group in this important market well into the future.

HerBert, tHanK You For tHis interVieW.

“our performance to date puts us firmly on track to achieve our full year targets and in several instances we now expect to even exceed our original goals.”

“i fully expect the visibility and excitement we generate for our brands during the olympic Games to create a halo effect sustaining the momentum of our Group in China well into the future.”

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First HalF Year report 2008 --- adidas Group to our sHareHolDers - our share

our sHare in the second quarter of the year, international stock markets remained volatile. Factors that negatively impacted stock markets in the first three months per- sisted throughout the second quarter. the subprime crisis and its aftermath, new record oil prices and inflationary pressure all pro- foundly affected international stock market development. Despite the lowering of interest rates in the usa, the Dow Jones decreased by 7 % and the DaX-30 lost 2 % compared to the end of March. over the three-month period, the adidas aG share declined 5 %.

tHe aDiDas aG sHare

number of shares outstanding

first half year average ¹⁾ 200,415,758

at June 30 ²⁾ 203,644,960

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 ethibel pioneer Vigeo aspi eurozone 1) after deduction of treasury shares.

2) all shares excluding treasury shares carry full dividend rights.

INCONSIStENt aNd uNStaBlE MaCROECONOMIC ENvIRON- MENt HaMpERS MaRkEt GROwtH IN FIRSt HalF OF 2008 international stock markets, the DaX-30 and the adidas aG share declined during the first six months of 2008. negative news flow at the beginning of the year continued in the second quarter. the us Consumer Confidence index sank to a 26-year low in april. Major declines in consumer confidence were also recorded in europe and Japan. During the same period, banks reported significant further write-offs related to the subprime crisis. the oil price exceeded the cri tical point of us $ 120 in May for the first time, followed by a series of new oil price records. on June 30, the oil price reached an all-time high at us $ 143 per barrel. as a result, the world economy was bur- dened by inflationary pressure. in China, inflation reached the highest level in eleven years, with consumer prices in May increasing by 7.7 % on a year-over-year basis. in the euro Zone, inflation in May rose to its highest level since the creation of the euro Zone in 1999 (3.7 %). in the usa, consumer prices rose by 4.2 % in May, also above market expectations.

With the exception of a short-term upturn in mid-May following a period of positive corporate earnings development and mod- estly better-than-expected us economic data, capital markets responded negatively to these macroeconomic trends in the second quarter. as a result, all major international stock indices closed the first half of 2008 with double-digit performance declines. the DaX-30 declined 20 % during the first six months to 6,418 points. the adidas aG share developed similarly, down 22 % over the same period. the MsCi World textiles, apparel

& luxury Goods index, which comprises the Group’s main competitors, lost 13 % in this period. the index outperformed our share and the DaX-30 due to its heavy weighting in north america, where market indices outpaced those of Germany across all sectors.

HistoriCal perForManCe oF tHe aDiDas aG sHare

and important indices at June 30, 2008 in %

YtD 1 year 3 years 5 years since ipo adidas aG

DaX-30

MsCi World textiles, apparel & luxury Goods

(22) (14) 16 115 315

(20) (20) 40 99 192

(13) (15) 31 121 134

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adIdaS aG SHaRE pRICE dEClINES IN SECONd QuaRtER the adidas aG share started the second quarter with sub- dued share price development in april. investors and analysts took a cautious stance towards our share, most visible in low trading volumes ahead of the Group’s first quarter results in early May. these financial results, which exceeded market expec tations and included strong performance by the adidas and taylorMade-adidas Golf brands, led to a 16 % increase of our share price in the ten subsequent days. as a result, we significantly outperformed competitors during the period.

Despite the Group’s investor Field trip to China in June, which led several analysts to raise estimates, the adidas aG share price declined in line with strong decreases in the footwear, luxury and retail sectors. as a result, our share price at the end of June was € 40.11, down 5 % compared to March 31, 2008. this development was in line with the MsCi World t extiles, apparel & luxury Goods index, which also decreased by 5 % during the period. the DaX-30 index declined 2 % during the second quarter.

SHaRE BuYBaCk pROGRaM CONtINuEd adidas aG initiated a share buyback program on January 29, 2008, under which own shares totaling up to 5 % of the company’s stock capital with an aggregate value of up to € 420 million can be repurchased via the stock exchange between January and november 2008.

During the second quarter, the Group purchased over 3.3 million shares at an average price of € 41.99 per share. the total buyback volume amounted to around € 139 million. Between the start of the program on January 30 and June 30, 2008, adidas aG repurchased around 6.5 million shares in total, at an average price of € 42.01 per share. this represents a total buyback volume of around € 274 million.

some of the shares repurchased in the period up to the end of the second quarter have already been cancelled ^{see Sub-}

sequent Events. the company also plans to cancel the other repurchased shares and further shares repurchased, thus increasing future earnings per share. Weekly updates on the progress of our share buyback are available on our corporate website www.adidas-Group.com/sharebuyback.

sHareHolDer riGHts notiFiCations reCeiVeD in Q2 2008

to our sHareHolDers - our share

adRS OutpERFORM COMMON StOCk the number of level 1 aDrs (american Depositary receipts) at the end of the second quarter was virtually unchanged compared to the number at the end of the first quarter. on June 30, 2008, 12.8 million aDrs were outstanding. this figure is higher compared to both December 31, 2007 when 11.1 million aDrs were outstanding, as well as the prior year level of 12.2 million. the level 1 aDr closed the quarter at us $ 31.45, reflecting a decrease of 15 % compared to the end of December 2007. However, due to the appreciating euro, the aDr developed better than our common stock in the first six months of 2008.

HIGHER dIvIdENd paId at the annual General Meeting on May 8, 2008, shareholders approved the adidas aG executive and supervisory Boards’ € 0.50 per share dividend recommen- dation for the financial year 2007 (2006: € 0.42). the dividend was paid on May 9, 2008. Based on the number of shares outstanding at the time of the annual General Meeting, this represents a 16 % dividend payout increase to € 99 million (2006:

€ 85 million), outpacing the 2007 earnings growth of 14 %. the payout ratio remained stable at 18 % (2006: 18 %). these figures were impacted by the decrease in the number of shares with dividend rights, due to our share buyback program.

CHaNGES IN SHaREHOldER BaSE in the second quarter of 2008, the Group received ten voting rights notifications accord- ing to article 21, section 1 of the German securities trading act (Wertpapierhandelsgesetz – WpHG) listed in the adjacent table.

dIRECtORS’ dEalINGS REpORtEd ON CORpORatE wEBSItE the purchase or sale of adidas aG shares (isin De0005003404) or related financial instruments, as defined by article 15 a WpHG, conducted by members of our executive or supervisory Boards, by key executives or by any person in close relationship with these persons, is reported on our website www.adidas- Group.com/directors_dealings. in the second quarter of 2008, adidas aG received notification that Christian tourres, a member of the adidas aG supervisory Board, had sold 100,000 shares on May 8, 2008.

sHare priCe DeVelopMent in 2008 ¹⁾

Dec. 31, 2007 June 30, 2008

100

80

60

— adidas aG

— DaX-30

— MsCi World textiles, apparel & luxury Goods 1) index: December 31, 2007 = 100

50 130

Date of threshold Voting rights (in % of Date of

notification notifying party crossed total shares outstanding) change

apr. 11 uBs aG > 3 % 7,170,164 apr. 08

(3.52 %)

apr. 18 uBs aG < 3 % 5,296,454 apr. 14

(2.60 %) apr. 22 Barclays Global > 3 % 6,131,853 apr. 17

investors uK (3.01 %)

Holdings limited

apr. 23 Barclays Global < 3 % 6,089,172 apr. 21

investors uK (2.99 %)

Holdings limited

May 05 uBs aG > 3 % 7,105,549 apr. 28

(3.49 %)

May 09 uBs aG > 5 % 10,408,790 May 05

(5.11 %)

May 13 uBs aG < 5 % 7,676,650 May 06

(3.77 %)

May 14 uBs aG < 3 % 4,998,440 May 07

(2.45 %)

May 16 uBs aG > 3 % 7,085,804 May 12

(3.48 %)

May 26 uBs aG < 3 % 2,228,212 May 20

(1.09 %)

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First HalF Year report 2008 --- adidas Group Group ManaGeMent report -- Group Business performance - economic and sector Development

eConoMiC anD seCtor DeVelopMent

ECONOMIC GROwtH SlOwS IN tHE SECONd QuaRtER OF 2008 the world economy continued to show signs of a global economic downturn throughout the second quarter of 2008.

the financial crisis, record inflation rates, record oil prices and the continuing housing slump all hampered economic growth during the period. in the usa, GDp growth weakened in the second quarter of 2008, driven by lower household spending and weaker corporate results. increasing food and fuel prices drove yearly inflation in the euro Zone to record heights and contributed to record-low consumer confidence.

in asia, growth continued to be strong during the second quarter, despite increases in energy prices and labor costs.

in Japan, economic expansion decelerated due to weakened household spending, a tight fiscal policy and additional pressure on exports. though affected by the slowdown of the global economy, increasing commodity and agricultural product prices sustained growth in latin america.

GlOBal SpORtING GOOdS INduStRY pERFORMaNCE dIvERGES aMONG REGIONS During the second quarter of 2008, the sporting goods industry continued to grow in all mar kets with the exception of north america. the ueFa euro 2008™ provided positive impetus to otherwise slow retail markets in Western europe. However, sporting goods sales in the uK remained challenging due to the promotional retail environment. in north america, deterioration of the retail environment continued as a result of lower household spending and weak consumer confidence. Mall-based retailers were the most affected by these developments. the asian market continued to grow solidly, driven by China and other emerging markets. strong economic growth and the excitement around the upcoming olympic Games both contributed to this development. after two years of industry decline, the Japanese sporting goods industry appears to have bottomed out, although it continues to face a challenging promotional environment. in latin america, despite concerns regarding spill-over effects from slowdowns in other regions, the industry grew solidly, in line with the overall economy.

Group Business perForManCe in the first half of 2008, the adidas Group delivered strong financial performance. Currency-neutral adidas Group sales increased 12 %, driven by strong development in the adidas and taylorMade- adidas Golf segments. in euro terms, revenues of the adidas Group grew 4 % to € 5.142 billion from € 4.938 billion in 2007. the Group’s gross margin increased 2.5 percentage points to 49.6 % in 2008 (2007: 47.1 %) driven by improvements in all brand segments. Consequently, the Group’s gross profit increased 10 % to reach € 2.552 bil- lion in the first half of 2008 versus € 2.326 billion in 2007. the Group’s operating margin grew 1.1 percentage points to 9.5 % in the first half of 2008 from 8.5 % in 2007. the Group’s gross margin improve ments more than offset an oper- ating expense increase as a percentage of sales.

the Group’s operating profit improved 17 % to

€ 490 million in the first half of 2008 versus

€ 417 million in 2007. the Group’s net income attributable to shareholders grew 23 % to

€ 286 million in the first half of 2008 from

€ 232 million in 2007, largely as a result of the Group’s strong operational development. Basic earnings per share grew 25 % to € 1.42 in the first half of 2008, versus € 1.14 in 2007. similarly, diluted earnings per share increased 24 % to

€ 1.35 (2007: € 1.09).

eXCHanGe rate DeVelopMent¹⁾

€ 1 equals

average Q3 Q4 Q1 Q2 average

rate 2007 2007 2007 2008 2008 rate 2008 ²⁾

usD GBp JpY

1) spot rates at quarter-end.

2) average rate for the first half year.

Q2 Q3 Q4 Q1 Q2

2007 2007 2007 2008 2008

usa¹⁾ euro Zone²⁾ Japan³⁾

1) source: Conference Board.

2) source: european Commission.

3) source: economic and social research institute, Government of Japan.

1.3709 1.4179 1.4721 1.5812 1.5764 1.5306 0.6845 0.6968 0.7334 0.7958 0.7923 0.7751 161.19 163.55 164.93 157.37 166.44 160.60

105.3 99.5 90.6 65.9 50.4

(2) (6) (9) (12) (17)

44.6 43.8 38.8 36.5 32.3

QuarterlY ConsuMer ConFiDenCe DeVelopMent

by region

(13)

13

First HalF Year report 2008 --- adidas Group 2004¹⁾

2005¹⁾ 2006²⁾ 2007 2008

1) Figure reflects continuing operations as a result of the divestiture of the salomon business segment in 2005.

inCoMe stateMent

MaJOR IMpaCtS ON OpERatIONal pERFORMaNCE the operational performance of the adidas and reebok segments in the first half of 2008 was positively impacted by the realization of revenue and cost synergies resulting from the integration of the reebok business into the adidas Group. incremental revenue was mainly realized in the reebok segment, in particular in countries for which reebok had purchased the distribution rights effective January 1, 2007, such as russia and China.

revenue synergies also had a small positive impact on the adidas segment due to increased revenues related to the nBa license business, which was transferred from reebok to the adidas brand in 2006. Cost synergies resulting from the com- bination of adidas and reebok sourcing activities also continued to have a positive impact on the cost of sales. these were partly offset by integration costs 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 full year revenue synergies of around € 250 million (2007: around € 100 million) and net cost synergies of around

€ 105 million (2007: around € 20 million).

adIdaS GROup CuRRENCY-NEutRal SalES INCREaSE BY 14 % IN Q2 During the second quarter of 2008, Group sales growth accelerated to 14 % on a currency-neutral basis as a result of growth in all three brand segments. Currency movements negatively impacted Group sales in euro terms. Group revenues grew 5 % in euro terms to € 2.521 billion in the second quarter of 2008 from € 2.400 billion in 2007.

dOuBlE-dIGIt SalES GROwtH at adIdaS IN Q2 the adidas segment showed the highest segmental growth within the Group in the second quarter of 2008. Currency-neutral adidas segment revenues increased 19 %, driven by double-digit growth in all major performance categories. strong sales related to the ueFa euro 2008™ also played an important role. Currency- neutral sales in the reebok segment increased 2 % versus the prior year in the second quarter of 2008. strong growth in emerging markets offset negative sales development in north america, the uK and Japan due to on going efforts to reposi tion the brand in these markets. at taylorMade- adidas Golf, currency-neutral revenues increased 6 %, due to growth in all major categories. sales recorded in the HQ/

Consolidation segment, which reflect revenues not attri b- utable to the adidas, reebok or taylorMade-adidas Golf segments, decreased 27 % currency-neutral in the second quarter due to the expiration of our sourcing cooperation agreement with amer sports Corporation in the first quarter of 2008.

Currency translation effects negatively impacted sales in all segments in euro terms in the second quarter of 2008.

adidas sales in euro terms increased 11 % to € 1.818 billion from € 1.635 billion in 2007. sales at reebok decreased 9 % to € 469 million versus € 514 million in the prior year.

taylorMade-adidas Golf sales in euro terms declined 5 % to

€ 226 million from € 239 million in 2007. HQ /Consolidation sales decreased 34 % to € 7 million from € 11 million in the prior year.

Group ManaGeMent report -- Group Business performance - income statement

First HalF Year net sales

€ in millions

3,190

4,887 4,938

5,142 2,906

First HalF Year net sales BY seGMent¹⁾

1) HQ / Consolidation accounts for less than 1 % of sales.

reebok 18 % taylorMade-

adidas Golf 8 % 74 % adidas

(14)

14

1) excluding HQ / Consolidation.

StRONG REvENuE GROwtH IN all CatEGORIES sales increased in all product categories. in the first half of 2008, currency-neutral footwear sales grew 6 %. the adidas segment, driven by soccer sales, and the taylorMade-adidas Golf segment both grew strongly in footwear while the reebok segment was down. Currency-neutral apparel revenues grew 19 % during the first six months of 2008, driven by gains in all brand segments, in particular adidas soccer apparel.

Hardware sales increased 9 % on a currency-neutral basis in the first half, driven by improvements in the adidas and taylorMade- adidas Golf segments. Currency translation effects negatively impacted sales in all categories in euro terms. Footwear revenues declined 1 % in euro terms to

€ 2.392 billion in the first half of 2008 from € 2.417 billion in 2007. apparel sales in euros grew 12 % to € 2.186 billion in the first half of 2008 from € 1.949 billion in the prior year.

Hardware revenues in euro terms decreased 1 % to € 564 million in 2008 from € 572 million in 2007.

adIdaS GROup CuRRENCY-NEutRal SalES GROw 12 % IN tHE FIRSt HalF OF 2008 During the first six months of 2008, Group revenues increased 12 % on a currency-neutral basis, driven by double-digit sales growth in the adidas and taylorMade-adidas Golf segments. the adidas segment grew 16 %, the reebok segment decreased 2 % and taylorMade- adidas Golf segment sales increased 11 %. Currency movements negatively impacted Group sales in euro terms. Group revenues grew 4 % in euro terms to € 5.142 billion in the first half of 2008 from € 4.938 billion in 2007.

SalES INCREaSE StRONGlY IN NEaRlY all REGIONS adidas Group sales grew at double-digit rates in all regions except north america where revenues declined. First half Group sales in europe grew 16 % on a currency-neutral basis as a result of strong increases in nearly all countries. in north america, Group revenues declined by 8 % on a currency- neutral basis due to lower adidas and reebok sales in the usa. sales for the Group in asia increased 25 % on a currency- neutral basis in the first half of 2008, driven by particularly strong growth in China. in latin america, currency-neutral sales grew 29 % in the first half of the year, with double-digit increases coming from all of the region’s major markets. this development was supported by the first-time consolidation of reebok’s joint ventures in the region. Currency trans lation effects negatively impacted sales in euro terms in all regions.

sales in europe increased 11 % in euro terms to € 2.352 billion in 2008 from € 2.116 billion in 2007. revenues in north america decreased 19 % to € 1.160 billion in 2008 from € 1.429 billion in the prior year. in euro terms, revenues in asia grew 17 % to

€ 1.214 billion in 2008 from € 1.036 billion in 2007. sales in latin america grew 23 % to € 381 million in 2008 from € 310 million in the prior year.

Group ManaGeMent report -- Group Business performance - income statement First HalF Year net sales GroWtH (CurrenCY-neutral) ¹⁾

by segment and region in %

First HalF Year net sales GroWtH ¹⁾

by segment and region in %

north latin

europe america asia america total

adidas reebok

taylorMade-adidas Golf total

1) Versus the prior year.

north latin

europe america asia america total

adidas reebok

taylorMade-adidas Golf total

1) Versus the prior year.

19 (7) 27 19 16

(3) (14) 21 105 (2)

31 4 13 79 11

16 (8) 25 29 12

15 (18) 20 14 10

(7) (24) 9 83 (11)

14 (8) 7 58 0

11 (19) 17 23 4

First HalF Year net sales BY reGion¹⁾

latin america 7 % 46 % europe

24 % asia north america

23 %

(15)

15

RECORd GROup GROSS MaRGIN the gross margin of the adidas Group increased by 2.5 percentage points to 49.6 % in the first half of 2008 (2007: 47.1 %), driven by improvements in all brand segments. this highest-ever first half year rate was related to an improving regional and product mix, increased own-retail activities as well as favorable currency movements.

Cost synergies resulting from the reebok integration into the adidas Group also continued to have a positive impact. input price increases had only a modest negative impact on the cost of sales development in the first half of 2008. as a result of the Group’s strong top-line growth and gross margin improvement, gross profit for the adidas Group rose 10 % in the first half of 2008 to reach € 2.552 billion versus € 2.326 billion in the prior year.

CuRRENCY-NEutRal ROYaltY aNd COMMISSION INCOME StaBlE royalty and commission income for the adidas Group was stable compared to the prior year on a currency-neutral basis. in the adidas segment, royalty and commission income grew due to increased sales by external licensees. reebok segment royalty and commission income declined due to the repurchase of distribution rights in Brazil and paraguay. in euro terms, royalty and commission income for the adidas Group decreased by 7 % to € 41 million in the first half of 2008 from € 45 million in the prior year.

Group ManaGeMent report -- Group Business performance - income statement

OpERatING ExpENSES INCREaSE operating expenses as a percentage of sales increased by 1.3 percentage points to 40.9 % in the first half of 2008 from 39.6 % in 2007. this development was primarily driven by higher marketing expenses as a percentage of sales in the adidas segment in connection with this year’s major sporting events. increased expenses to support growth in emerging markets such as russia in both the adidas and reebok segments also impacted this development. in absolute terms, operating expenses for the adidas Group increased by 8 % to € 2.103 billion in the first half of 2008 from € 1.954 billion in the prior year.

NuMBER OF EMplOYEES INCREaSES at the end of June 2008, the adidas Group employed 34,834 people. this represents an increase of 22 % versus the previous year’s level of 28,518 and an 11 % increase since the end of 2007 when the Group employed 31,344 people. this increase is primarily related to new employees at adidas and reebok own retail, mainly on a part-time basis.

OpERatING MaRGIN INCREaSES BY 1.1 pERCENtaGE pOINtS the Group’s operating margin increased 1.1 percentage points to 9.5 % in the first half of 2008 (2007: 8.5 %). this is the highest first half operating margin since the acquisition of reebok. a strong gross margin increase was partly offset by higher operating expenses as a percentage of sales. operating profit for the adidas Group increased 17 % in the first half of 2008 to reach € 490 million versus € 417 million in 2007.

2007 2008

2,326 2,552

2007 2008

1,954

417 2,103

490 First HalF Year Gross proFit

€ in millions

First HalF Year operatinG eXpenses

€ in millions

First HalF Year operatinG proFit

€ in millions

(16)

16

NEt INCOME attRIButaBlE tO SHaREHOldERS up 23 % the Group’s net income attributable to shareholders increased 23 % to € 286 million in the first half of 2008 from € 232 million in 2007. the Group’s tax rate decreased by 0.5 percentage points to 31.5 % in the first half of 2008 (2007: 32.0 %) and thus also contributed to this development. the Group’s minority interests declined by 16 % to € 1 million in the first half of 2008 from € 2 million during the same period in the prior year.

BaSIC aNd dIlutEd EaRNINGS pER SHaRE INCREaSE 25 aNd 24 % Basic earnings per share increased 25 % to

€ 1.42 in the first half of 2008 versus € 1.14 in the prior year.

the Group’s total number of shares outstanding increased by 77,900 shares to 203,644,960 at the end of the first half of 2008 from 203,567,060 at the end of June 2007. this is the result of stock options exercised as part of tranches iii, iV and V of the Management share option plan (Msop) of adidas aG.

in the first half of 2008, adidas aG bought back 6,516,023 shares through a share buyback program which was initiated in January 2008. Consequently, the weighted average number of shares used in the calculation of basic earnings per share decreased to 200,415,758 (2007 average: 203,565,047).

Diluted earnings per share in 2008 increased 24 % to € 1.35 from € 1.09 in the prior year. the weighted average number of shares used in the calculation of diluted earnings per share was 216,211,434 (2007 average: 219,446,886). the dilutive effect largely results from approximately sixteen million additional potential shares that could be created in relation to our outstanding convertible bond, for which conversion criteria were first met at the end of the fourth quarter of 2004.

NEt FINaNCIal ExpENSES dECREaSE 3 % net financial expenses decreased 3 % to € 71 million in the first half of 2008 from € 73 million in the prior year as a result of lower average borrowings in 2008 compared to the first half of the prior year.

FINaNCIal INCOME dOwN 4 % Financial income decreased by 4 % to € 16 million in the first six months of 2008 from

€ 17 million in the prior year as a result of lower average cash and cash equivalents due to our improving cash management during the first half of 2008.

FINaNCIal ExpENSES dECREaSE 3 % Financial expenses decreased 3 % to € 87 million in the first half of 2008 (2007:

€ 90 million), mainly as a result of the lower level of average gross borrowings versus the prior year despite the Group’s share buyback activities. this development is a result of the Group’s strong free cash flow generation.

INCOME BEFORE taxES INCREaSES BY 22 % as a result of the Group’s operating margin increase as well as lower net financial expenses, income before taxes (iBt) as a percentage of sales increased by 1.2 percentage points to 8.1 % in 2008 from 7.0 % in 2007. income before taxes for the adidas Group grew 22 % to € 419 million in the first half of 2008 from € 344 million in 2007.

Group ManaGeMent report -- Group Business performance - income statement 2007 2008

344 419 First HalF Year inCoMe BeFore taXes

€ in millions

First HalF Year net inCoMe attriButaBle to sHareHolDers

€ in millions

2004¹⁾ 2005¹⁾ 2006²⁾ 2007 2008

1) including continuing and discontinued operations.

171 226

232 286 116

(17)

17

BalanCe sHeet anD CasH FloW stateMent

tOtal aSSEtS dECREaSE 1 % at the end of the first half of 2008, total assets decreased 1 % to € 8.679 billion versus

€ 8.761 billion in the prior year. this is the result of currency effects which mainly lowered the value of the Group’s us dollar- based non-current assets. Compared to the 2007 year-end level, total assets increased by 4 %.

INvENtORIES GROw 5 % Group inventories grew 5 % to

€ 1.806 billion at the end of the first half of 2008 versus

€ 1.716 billion in 2007. on a currency-neutral basis, this represents an increase of 16 %. this development is due to business expansion in emerging markets and inventories related to the newly established reebok joint ventures in latin america.

RECEIvaBlES dEClINE 3 % Group receivables decreased 3 % to € 1.641 billion at the end of the first half of 2008 versus

€ 1.689 billion in the prior year. on a currency-neutral basis, receivables increased 5 %, which is well below our net sales growth for the second quarter. this reflects ongoing strict discipline in the Group’s trade terms management and con- certed collection efforts in all segments.

OtHER CuRRENt aSSEtS INCREaSE 34 % other current assets increased 34 % to € 637 million at the end of the first half of 2008 from € 477 million in 2007, mainly due to higher prepayments for promotion contracts. Higher fair values of financial instruments also contributed to this development.

BalanCe sHeet struCture¹⁾

in % of total assets

BalanCe sHeet struCture¹⁾

in % of total liabilities and equity

Group ManaGeMent report -- Group Business performance - Balance sheet and Cash Flow statement

FIxEd aSSEtS dECREaSE 8 % Fixed assets decreased by 8 % to € 3.597 billion at the end of the first half of 2008 versus

€ 3.915 billion in 2007. this mainly reflects negative currency translation effects on fixed assets held in currencies other than the euro. additions of € 336 million were partly offset by depreciation and amortization of € 219 million as well as dis- posals in the amount of € 39 million.

aSSEtS HEld-FOR-SalE dECREaSE 3 % assets held-for-sale decreased 3 % to € 54 million at the end of the first half of 2008 (2007: € 56 million). two warehouses in the uK were reclassi- fied as assets held-for-sale at the end of 2007, and in the second quarter of 2008 some land and buildings in Herzogen aurach, which are no longer in the scope of a sale, were transferred back to fixed assets.

OtHER NON-CuRRENt aSSEtS INCREaSE 9 % other non- current assets grew by 9 % to € 170 million at the end of the first half of 2008 from € 155 million in 2007, mainly driven by an increase in non-current security deposits.

aCCOuNtS paYaBlE GROw 18 % accounts payable increased 18 % to € 928 million at the end of the first half of 2008 versus

€ 783 million in 2007. on a currency-neutral basis, accounts payable increased 33 %. this development is in line with the growth in inventories and also reflects the first-time conso li- dation of reebok’s newly established joint ventures in Brazil and argentina.

OtHER NON-CuRRENt lIaBIlItIES INCREaSE 46 % other non-current liabilities increased 46 % to € 63 million at the end of the first half of 2008 from € 43 million in 2007, primarily as a result of increased non-current forward contracts.

assets June 30, 2008 June 30, 2007

total assets (€ in millions) 8,679 8,761

1) For absolute figures see Consolidated Balance Sheet, p. 30.

Cash and cash equivalents 3.4

inventories 20.8

Fixed assets 41.4

other assets 15.5

accounts receivable 18.9

13.3 3.2 19.3 19.6

44.7

liablities and equity June 30, 2008 June 30, 2007

total liabilities and equity (€ in millions) 8,679 8,761 1) For absolute figures see Consolidated Balance Sheet, p. 30.

accounts payable 10.7

long-term borrowings 29.9

other liabilities 27.6

total equity 31.8 33.8

8.9 30.9

26.4

(18)

18

EQuItY dECREaSES duE tO CuRRENCY MOvEMENtS shareholders’ equity decreased 7 % to € 2.746 billion at the end of the first half of 2008 versus € 2.948 billion in 2007 due to the buyback of adidas aG shares and negative currency translation effects which more than offset the strong net income development during the period. Compared to the 2007 year-end level of € 3.023 billion, shareholders’ equity decreased 9 %.

CaSH FlOw REFlECtS SEaSONalItY OF BuSINESS in the first half of 2008, cash inflow from operating activities was

€ 17 million. Cash outflow for investing activities was € 85 million and was mainly related to spending for property, plant and equipment such as investment in furnishing and fitting of adidas and reebok own-retail stores. to finance these investing activities, as well as our share buyback of € 274 million, long-term borrowings increased by € 445 million. Consequently, net cash from financing activities increased by € 72 million.

NEt BORROwINGS REduCEd BY € 134 MIllION net borrowings at June 30, 2008 were € 2.260 billion, down 6 % or

€ 134 million versus € 2.395 billion in the prior year. strong bottom-line profitability and currency effects positively impacted this development. However, due to the decrease in shareholders’ equity, the Group’s financial leverage increased 1.1 percentage points to 82.3 % at the end of the first half of 2008 versus 81.2 % in the prior year. Compared to the 2007 year-end level of € 1.766 billion, net debt increased by

€ 494 million, reflecting the seasonality of our business as well as € 274 million used for the share buyback program of adidas aG in the first half of 2008.

aCCounts paYaBle¹⁾

€ in millions

inVentories¹⁾

€ in millions

reCeiVaBles¹⁾

€ in millions net BorroWinGs¹⁾

€ in millions

2007 2008 1) at June 30.

783 1,716

1,689 2,395

928 1,806

1,641 2,260

Group ManaGeMent report -- Group Business performance - Balance sheet and Cash Flow statement

sHareHolDers’ eQuitY¹⁾

€ in millions

2007 2008

1) at June 30, excluding minority interests.

2,948 2,746

(19)

19

First HalF Year report 2008 --- adidas Group 2004

2005 2006 2007 2008

SECONd QuaRtER 2008 CuRRENCY-NEutRal SalES I NCREaSE 19 % in the second quarter of 2008, revenues for the adidas segment grew 19 % on a currency-neutral basis.

the acceleration in the growth rate for the second quarter compared to the prior quarter was mainly driven by football sales. in euro terms, sales were up 11 % to € 1.818 billion from

€ 1.635 billion in the prior year.

FIRSt HalF CuRRENCY-NEutRal SEGMENt SalES up 16 % in the first half of 2008, revenues for the adidas segment grew 16 % on a currency-neutral basis. in euro terms, sales were up 10 % to € 3.787 billion in the first half of 2008 from € 3.454 billion in the prior year.

SpORt pERFORMaNCE REvENuES GROw 20 % ON a CuR RENCY-NEutRal BaSIS First half sales in the sport performance division increased 20 % on a currency-neutral basis.

revenues increased in all major product categories. the football category grew the highest, supported by sales related to the ueFa euro 2008™. adidas revenues benefited from the brand’s strong presence around the tournament as an official partner of the event and sponsor of five national teams, including champion spain. in euro terms, sport performance sales improved 14 % during the first six months of 2008 to

€ 3.058 billion from € 2.699 billion in the prior year.

SpORt StYlE SalES INCREaSE 1 % ON a CuRRENCY- NEutRal BaSIS sales in the sport style division grew 1 % on a currency-neutral basis in the first half of 2008. sales in the fashion category increased at a double-digit rate, while originals were stable. in euro terms, sport style sales decreased 5 % to € 705 million in the first half of 2008 (2007:

€ 739 million).

aDiDas Business perForManCe in the first half of 2008, currency-neutral sales at adidas grew 16 %. in euro terms, sales increased 10 % to € 3.787 billion from

€ 3.454 billion in the prior year. Gross mar- gin increased 2.0 percen tage points to 48.7 % (2007: 46.7 %), due to an improving regional and product mix, further own-retail expan- sion and favorable currency movements.

Gross profit grew 14 % to € 1.843 billion in the first half of 2008 from € 1.613 billion in 2007. operating margin increased 0.2 per- centage points to 13.5 % in 2008 (2007:

13.3 %), driven by both strong net sales and gross margin improvements. Consequently, operating profit increased 11 % to € 512 mil- lion in the first half of 2008 versus € 461 mil- lion in the prior year.

aDiDas at a GlanCe

€ in millions

1st Half Year 1st Half Year

2008 2007 Change

net sales Gross profit Gross margin operating profit operating margin

3,787 3,454 10 % 1,843 1,613 14 % 48.7 % 46.7 % 2.0 pp

512 461 11 %

13.5 % 13.3 % 0.2 pp

First HalF Year aDiDas net sales

€ in millions

Group ManaGeMent report -- Business performance by segment - adidas Business performance

2,816 3,308

3,454 3,787 2,584