In the following interview, Herbert Hainer, adidas Group CEO, reviews the first nine months of 2009 and discusses the Group’s strategic and financial outlook.

(1)

Nine Months Report 2009

(2)

adidas Group Nine Months Report 2009 02

adidas Group segmental information

€ in millions

Nine months 2009 Nine months 2008 Change 3rd quarter 2009 3rd quarter 2008 Change

adidas

Net sales 5,779 6,004 (3.8%) 2,111 2,218 (4.8%)

Gross profit 2,708 2,947 (8.1%) 995 1,104 (9.9%)

Gross margin 46.9% 49.1% (2.2pp) 47.1% 49.8% (2.7pp)

Operating profit 789 951 (17.1%) 373 439 (15.0%)

Operating margin 13.7% 15.8% (2.2pp) 17.7% 19.8% (2.1pp)

Reebok

Net sales 1,497 1,587 (5.7%) 591 665 (11.1%)

Gross profit 487 603 (19.2%) 205 242 (15.4%)

Operating profit (130) 2 — 17 25 (34.0%)

Operating margin (8.7%) 0.1% (8.8pp) 2.8% 3.8% (1.0pp)

TaylorMade-adidas Golf

Net sales 633 614 3.2% 184 197 (6.2%)

Gross profit 249 278 (10.6%) 72 84 (14.6%)

Operating profit (23) 54 (142.0%) (4) 11 (137.7%)

Operating margin (3.6%) 8.8% (12.4pp) (2.3%) 5.7% (8.0pp)

Table of Contents Financial Highlights

Operational and Sporting Highlights Interview with the CEO

Our Share

Interim Group Management Report Group Business Performance

— Economic and Sector Development

— Income Statement

— Balance Sheet and Cash Flow Statement adidas

Reebok

TaylorMade-adidas Golf Subsequent Events and Outlook

Interim Consolidated Financial Statements (IFRS)

Consolidated Balance Sheet Consolidated Income Statement Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to Interim Consolidated Financial Statements Segmental Information Segmental Information by Brand Segmental Information by Region Management Boards

Financial Calendar 2009/2010 Contact

03 04 05 10

12 12 12 13 17 19 21 23 25 28 28 29 30 31 32 33

35 35 36 37 38 39

(3)

adidas Group Nine Months Report 2009 03 To Our Shareholders Financial Highlights

Financial highlights (IFRS)

Nine months 2009 Nine months 2008 Change 3rd quarter 2009 3rd quarter 2008 Change Operating highlights (€ in millions)

Net sales 7,923 8,225 (3.7%) 2,888 3,083 (6.3%)

Operating profit 465 963 (51.7%) 336 473 (29.0%)

Net income attributable to shareholders 226 588 (61.6%) 213 302 (29.7%)

Key ratios (%)

Other operating expenses

as a percentage of net sales 41.0% 39.1% 1.8pp 35.1% 34.9% 0.2pp

Operating margin 5.9% 11.7% (5.8pp) 11.6% 15.3% (3.7pp)

Effective tax rate 34.2% 30.5% 3.7pp 30.3% 29.6% 0.7pp

Net income attributable to shareholders

as a percentage of net sales 2.9% 7.1% (4.3pp) 7.4% 9.8% (2.5pp)

Operating working capital

as a percentage of net sales¹⁾ 25.6% 24.5% 1.2pp 25.6% 24.5% 1.2pp

Equity ratio 35.9% 35.0% 0.9pp 35.9% 35.0% 0.9pp

Financial leverage 70.2% 78.5% (8.3pp) 70.2% 78.5% (8.3pp)

Balance sheet and cash flow data (€ in millions)

Total assets 9,105 9,456 (3.7%) 9,105 9,456 (3.7%)

Inventories 1,652 1,812 (8.8%) 1,652 1,812 (8.8%)

Receivables and other current assets 2,544 2,829 (10.1%) 2,544 2,829 (10.1%)

Working capital²⁾ 1,530 2,105 (27.3%) 1,530 2,105 (27.3%)

Net borrowings 2,294 2,593 (11.5%) 2,294 2,593 (11.5%)

Shareholders’ equity 3,268 3,306 (1.1%) 3,268 3,306 (1.1%)

Capital expenditure 156 238 (34.3%) 40 106 (62.2%)

Net cash provided by/(used in) operating activities 122 (100) 222.4%

Per share of common stock (€)

Basic earnings 1.17 2.96 (60.5%) 1.10 1.54 (28.9%)

Diluted earnings 1.13 2.78 (59.4%) 1.03 1.44 (28.5%)

Operating cash flow 0.63 (0.50) 225.8%

Share price at end of period 36.17 37.70 (4.2%) 36.17 37.70 (4.2%)

Other (at end of period)

Number of employees 39,524 37,485 5.4% 39,524 37,485 5.4%

Number of shares outstanding 193,515,512 198,178,337³⁾ (2.4%) 193,515,512 198,178,337³⁾ (2.4%) Average number of shares 193,515,512 198,868,061⁴⁾ (2.7%) 193,515,512 195,806,311⁴⁾ (1.2%) Rounding differences may arise in percentages and totals.

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

1) Twelve-month trailing average.

2) 2008 restated due to reclassification of long-term to short-term borrowings.

3) All shares except treasury shares carry full dividend rights.

4) After deduction of treasury shares.

Nine months net sales

€ in millions

2005¹⁾ 5,115

2006²⁾ 7,836

2007 7,879

2008 8,225

2009 7,923

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.

Nine months net income attributable to shareholders

€ in millions

2005¹⁾ 386

2006²⁾ 469

2007 530

2008 588

2009 226

1) Includes continuing and discontinued operations.

(4)

adidas Group Nine Months Report 2009 04 To Our Shareholders Operational and Sporting Highlights

Operational and Sporting Highlights

Third quarter 2009

15.07. Picture 01 Reebok and supermodel Bar Rafaeli launch Reebok’s highlight shoe EasyTone™

throughout Europe. 24.07. adidas and UEFA announce the extension of their long-term partnership for the UEFA Champions League and also an agreement for the newly created UEFA Europa League as well as for the UEFA Super Cup. 13.08. Picture 02 adidas celebrates its greatest moments to mark its 60th anniversary. Adi Dassler registered his company “Adolf Dassler adidas Sportschuhfabrik” in August 1949. 15.08. The IAAF Athletic World Championships in Berlin begin.

adidas and Reebok are highly visible throughout the whole event. 16.08. Picture 03 TaylorMade- adidas Golf Tour Staff professional Y. E. Yang wins the US PGA Championship. 16.08. R&B superstar MC Fabolous and Reebok team up to debut the Reebok Classic Remix footwear collection, sold exclusively at select Foot Locker locations throughout the USA. 21.08. Reebok Russia celebrates the launch of Alexander Ovechkin’s Reebok apparel line called the Ovechkin Signature Collection.

02.09. Picture 04 TaylorMade Golf introduces Penta TP, a new tour ball designed to deliver a superior

balance of performance in five key shot categories. 02.09. adidas Group is awarded No. 2 in the DAX-30 category and No. 3 overall in the Manager Magazin’s “Best Annual Reports 2009” ranking.

04.09. For the tenth consecutive time, adidas AG is selected to join the Dow Jones Sustainability Group Indexes. 10.09. Picture 05 The adidas sponsored German women’s football team celebrates its fifth straight continental title at the UEFA WOMEN’S EURO 2009™ in Helsinki. 21.09. adidas and UEFA announce the extension of their long-term partnership for UEFA EURO 2012™ and UEFA EURO 2016™. 21.09. Picture 06 In support of the peace initiative PEACE ONE DAY adidas and PUMA shake hands for the first time after six decades. As a sign of amicable cooperation, employees as well as the CEOs of both companies, Herbert Hainer and Jochen Zeitz, play football together.

28.09. adidas announces its partnership with the European Rugby Cup, the organiser of both the Heineken Cup and the Amlin Challenge Cup.

02

04

05

06

03 01

(5)

adidas Group Nine Months Report 2009 05 To Our Shareholders Interview with the CEO

In the following interview, Herbert Hainer, adidas Group CEO, reviews the first nine months of 2009 and discusses the Group’s strategic and financial outlook.

Interview with the CEO

Despite the difficult economic environment, the adidas Group has made significant progress in improving its financial position in 2009. A strong reduction in Group inventories and receivables has led to a decrease in net borrowings of 12%

compared to the prior year. Although consumer and retail conditions remain challenging, the backdrop of the forth- coming major sports event year and a promising product pipeline lead to cautious optimism for the future.

Herbert Hainer adidas Group CEO

(6)

Herbert, you expected to see improvements in your financial performance in the third quarter compared to the first half of the year. Are you happy with the development and can you outline where you have seen progress?

This year, our industry and our Group – like so many others – have faced unprecedented challenges. However, we have tackled the challenges head-on.

We have successfully adapted to our surroundings, and our drive for operational excellence has meant that despite these challenges we have moved forward.

And as a consequence I am happy to report that during the third quarter we have significantly strengthened our overall financial position. While our top-line development has not materially altered since the first half, declining 7%

currency-neutral both for the quarter and for the nine months, we have seen a significant improvement in profitability. Despite persisting headwinds such as impacts from clearance activities, higher input costs and currency devaluation effects, tight control of operating expenses has led to a much stronger profit for the quarter compared to the first half of this year. Diluted earnings per share in the third quarter were down 29% to € 1.03 which compares to the 93% decline witnessed in the first six months. Although this is still below where we would like, I believe we have shown tremendous progress on balance sheet management. Inventories and receivables are now down 8% and 7% currency- neutral, respectively. This has led to a 12% reduction in net borrowings year-on- year and a 20% decline since the highs of the first quarter. Therefore, I believe we can be satisfied with our achievements so far this year.

Now that the greater part of the year is behind us – do you believe the worst is over? What is your perception of the current consumer environment around the globe?

In terms of our Group’s financial results development – yes, I strongly believe the

worst is over. The results I just outlined are clear evidence of the stability of our

business model. But let’s make no mistake: We continue to feel the pressure on

the top and bottom line as retailers and consumers safeguard their cash. This is

particularly so in North America and Western Europe. Retail customers are

taking a cautious stance on the upcoming holiday period – keeping inventory

levels in check as consumers delay purchases and stay value-conscious. Eastern

European markets still remain challenged. In Russia, while sales in roubles

continue to be positive for the first nine months, we did see some deceleration

in the third quarter. And the weaker rouble remains an issue. Alone this year, the

rouble devaluation has reduced our Group revenue performance by two

percentage points. Moving to Asia, we continue to see mixed developments as

declines in Japan and China are being partly offset by solid growth in the rest of

the region. In China, while we are making good progress in managing through

the inventory bubble, we have not seen a major upswing in consumer demand

yet. Finally, the consumer environment in Latin America continues to be the most

robust. While we expect this to continue, like the rest of our international

competitors, we will have to find an answer to the import duties currently being

implemented by governments in Brazil and Argentina. In the short term, this will

undoubtedly affect our business in this region.

(7)

The adidas segment saw an improvement in its revenue trend in the third quarter. What have been the main highlights for the brand in the past few months?

Currency-neutral sales declined 6% in the quarter but despite the decrease we have definitely taken market and mind share in several categories. At the beginning of the year, I told you that while being diligent on cost in times of crisis, it is also imperative not to lose sight of the principles that have built our success. These include staying innovative, engaging the consumer and investing in future growth opportunities. Let’s take running as an example, which was a very active category this summer. adidas had a great IAAF World Track & Field Championships in Berlin, with our athletes capturing 41 medals. This was the first event that highlighted our new long-term partnership with the IAAF. A month later, at the Berlin Marathon, adidas capped off another successful event with a spectacular win by Haile Gebrselassie. With this type of validation, runners are more and more choosing adidas, and our performance running business has reaped the benefits, increasing at a high-single-digit rate even in this tough retail environment. Our innovation pipeline in running has never been stronger as we drive our ambition to be the most personalised of all running brands. A few weeks ago we introduced the next generation of miCoach products including the miCoach Pacer and miCoach Zone as well as enhancements to our web services. The realtime coaching works in sync with the personalised training plans created by specialist coaches.

And you will hear lots more from us on this front in the coming year. In terms of other successes during the quarter, our Sport Style business remains on track for a record year, growing 7% currency-neutral in the quarter. On the profitability side, the brand maintained a healthy operating margin of 17.7% for the quarter, and inventories are also in much better shape, down in all regions except for Latin America. Based on all of these facts, I think it is fair to say adidas has made the most out of the difficult environment.

You mentioned in the summer that you are convinced Reebok is turning the corner. Are you still confident this is the case?

Absolutely. I am convinced we are really starting to hit the mark this year with Reebok. The brand is on a good path to claim ownership in the evolving muscle toning category. After the initial success in the US and Japan in the first half, EasyTone™ is now a worldwide phenomenon. And to support our drive in this area, Reebok is making a statement with its first major television effort in the US since 2007. JUKARI Fit to Fly™ has also established a global presence with 17 locations across four continents and more launches planned before year-end. Even though all these initiatives are starting to bite, 2009 has seen considerable challenges for Reebok, and these unfortunately still dominate our financial results. Nevertheless, we are making progress. Although currency-neutral sales declined 12% in the third quarter, improvements in our product mix are starting to kick in. This is visible as the segment returned to profitability in the third quarter after heavy losses in the first half. Of particular note is that gross margin declined at the lowest rate of all our segments as our efforts to reduce and eliminate unprofitable price points begin to bear fruit. Looking forward, our product pipeline and creative platform for 2010 will drive momentum. In toning for example, we will expand the product offering beyond walking and women’s and support the entire initiative through a holistic communications approach. In addition, we will already start priming the pump this month for the next JUKARI™ workout installation, which is slated to debut worldwide next spring. Select gym chains from around Europe will get a sneak preview of how the unique blend of Cirque du Soleil’s artistry and Reebok’s fitness expertise has resulted in yet another amazing workout. And as a final teaser, in early 2010, Reebok will launch a new marketing campaign showing how the brand redefines sport to bring back the fun in everything it does.

Through a fun, bold and provocative feel, I believe this will be a catalyst to bring a

very fresh and differentiating Reebok voice to the industry.

(8)

One of your priorities this year has been to increase market share in the golf category. Given that your sales are down, has TaylorMade-adidas Golf been successful in this regard? And do you see room for further improvement?

The golf industry is challenged more than most by the economic downturn. Our sales are down 5% currency-neutral in the first nine months, and profits have also suffered significantly as we have moved quickly to adjust price points to retail conditions. But taken in context, this is a solid performance considering the golf market is projected to decline in the mid teens this year. As you have just alluded to, a core tenet of our long-term strategy for TaylorMade-adidas Golf is to create strong positions across all golf product categories in which we compete, similar to those we hold in metalwoods. Therefore, it is with great pleasure that I can share the news with you today that TaylorMade has achieved the status as the No. 1 selling iron brand in golf in the US – a position our major competitor had held for more than a decade. This is a truly groundbreaking accomplishment. The success comes in the wake of the Burner irons’ remarkable momentum at retail, both on and off course, where it has stood as the No. 1 iron model for several months. To be a leader in our industry and in any sports category, understanding the needs of the athlete and demands of the sport are of the utmost importance.

And this is where TaylorMade-adidas Golf excels, with the richest and deepest connection to tour pros all around the world. When I look forward, I only see potential for further market share improvements, all similar to before – driven by innovation. In footwear we have launched our newest and most stable golf shoe to date, the TOUR360 4.0. This shoe incorporates adidas Golf’s Advanced THiNTech low-profile technology which brings golfers 32% lower to the ground than conventional cleat systems. After three years of research and development, TaylorMade also just recently introduced the Penta TP golf ball, designed to deliver a superior balance of performance in the five key shot categories. We have proven time and time again that with an intense belief, proper planning, and unmatched effort in the marketplace, anything is possible. Our success in the iron category is only another chapter in our rich history as we continue to push to become the best performing, most complete and leading company in golf.

With the qualification round for the 2010 FIFA World Cup™ almost complete, are you still convinced that you will generate a new record level of sales in football next year?

There is always great anticipation before a World Cup year. We have mastered the art of exploiting the potential of big football events not only as meaningful revenue generators, but also as long-term innovation and brand recognition drivers. From today’s standpoint, I have no hesitation in reconfirming that 2010 will yet again be a record year for our football business. We will have the most comprehensive representation of any brand in South Africa. Already, we know we will have at least 10 teams competing for honours, far in excess of the six teams sporting adidas in Germany in 2006. And there is still potential for this number to grow in November.

From a product and communication perspective our approach will have the same

vigour as always, launching new products and marketing initiatives every month

from now until June. We have already started with a bang, introducing the

PREDATOR

^®

_X, a new football boot designed with French football legend Zinedine

Zidane, that achieves the highest ball power, swerve and control ever found in any

PREDATOR

^®

. These are exactly the attributes we will bring to the competition as

we continue to stretch our lead in the football category around the globe.

(9)

What’s your outlook on the rest of the year and where do you see things moving in 2010?

I believe we have an exciting fourth quarter ahead of us. We will start teasing the market with some important new products across all brands, and I expect football fever will start to grip the consumer in advance of next year’s mega event. This should also become visible in our financial results in the form of positive top-line stimulus. But don’t forget we will increase marketing to ensure our initiatives get off to a fast start. In summary, we will not be able to beat last year’s record earnings in the fourth quarter, but we expect to generate at least a small profit. In terms of 2010, it is still a little premature to give concrete guidance. Consumers and retailers are still hovering between fear and optimism. Frankly, although I am cautiously optimistic, I still see challenges for some key markets such as the US and China persisting into the first half of next year. However, we do have reasonable clarity on a few factors that have been significantly negative for our profitability this year. Relief on input costs and improvements in operating expenses following our cost-saving initiatives are factors that will support enhanced profitability next year. But still there will also be some headwinds like currency effects and import duties that will temper our performance. Nevertheless, we are well prepared to face any challenges thrown our way. With a firm grip on inventories, a better financial position and a leaner organisation, we turn into the 2010 event year with innovative products, exciting concepts and clear focus on the tasks at hand.

Herbert, thank you for this interview.

(10)

adidas Group Nine Months Report 2009 10 To Our Shareholders Our Share

Our Share

In the third quarter, international stock mar- kets continued to gain momentum. The main drivers for this development were economic indicators signalling the financial and eco- nomic crisis had passed its trough. Investor confidence improved strongly, which resulted in significant increases across all global indi- ces. Towards the end of the quarter, however, concerns about the sustainability of the eco- nomic recovery weighed on market sentiment.

The DAX-30 gained 18% and the Dow Jones increased 15% compared to the end of June.

The adidas AG share outperformed both indices over the three-month period and rose by 34%.

Global stock markets driven by expectation of upcoming economic recovery

In the third quarter, international stock markets sustained the upward trend from the previous quarter and gained sub- stantially. This was mainly due to major economic indicators signalling that the economic and financial crisis had passed its trough and to rising expectations of an approaching recovery.

Better than expected corporate results and news flow during the Q2 earnings season supported the positive trend. However, towards the end of the quarter, increasing doubts concern- ing the magnitude and the speed of an economic recovery weighed on market sentiment. More and more investors feared that recent share price increases were a result of fiscal and monetary stimuli rather than of fundamental economic improvement. Due to the strong performance in the third quarter, the DAX-30 increased 18% during the first nine months to 5,675 points. The adidas AG share closed the nine-month period up 33% at € 36.17 (December 31, 2008: € 27.14). The MSCI World Textiles, Apparel & Luxury Goods Index, which comprises the Group’s main competitors, gained 44% during the same period.

The adidas AG share

Number of shares outstanding

third quarter average 193,515,512 at September 30¹⁾ 193,515,512

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 Index Excellence Global Ethibel Index Excellence Europe ASPI Eurozone Index

1) All shares carry full dividend rights.

Historical performance of the adidas AG share and important indices at September 30, 2009 in %

YTD 1 year 3 years 5 years since IPO

adidas AG 33 (4) (3) 29 274

DAX-30 18 (3) (5) 46 158

MSCI World Textiles, Apparel

& Luxury Goods 44 8 1 44 124

(11)

adidas Group Nine Months Report 2009 11 To Our Shareholders Our Share

adidas AG share price increases strongly in third quarter In line with general market conditions, our share price decreased at the beginning of the third quarter. On August 5, the adidas Group announced its results for the first half year, which were well received by investors and analysts due to better than anticipated operating margin and inventory development. Our share price gained 6% on the day of the earnings release. Several broker recommendation upgrades and price target revisions continued to support the adidas AG share price on the days immediately following the results. From the second half of August onwards, the adidas AG share performed in line with the market until further analysts’ upgrades and positive comments on the German retail sector caused the share price to gain strongly and outperform the market in mid- September. Accordingly, the adidas AG share finished the quarter at € 36.17, representing an increase of 34% compared to the end of June 2009. During the three-month period, the DAX-30 gained 18%, whereas the MSCI World Textiles, Apparel

& Luxury Goods Index improved by 29%.

Number of ADRs increases

The number of Level 1 ADRs (American Depository Receipts) increased during the three-month period compared to the end of the second quarter. At September 30, 2009, 5.2 million ADRs were outstanding (June 30, 2009: 4.8 million). Nevertheless, this represents a decline compared to the year-end 2008 level of 8.9 million. The Level 1 ADR closed the quarter at US$ 26.65, reflecting a 38% increase versus the end of December 2008, and an increase of 40% compared to the end of the second quarter.

adidas AG again included in Dow Jones Sustainability Indexes For the 10th consecutive time, adidas AG has been selected to join the Dow Jones Sustainability Indexes (DJSI), the world’s first global sustainability index family tracking the performance of the leading sustainability-driven companies worldwide.

In the category “Clothing, Accessories & Footwear”, adidas AG was rated as industry leader in sustainability issues and corporate responsibility for the seventh time in a row. In addition, the adidas Group was named “Global Supersector Leader”

2009/2010, being identified as the top company for the sector

“Personal & Household Goods” for the second consecutive time.

No changes in shareholder base

In the third quarter of 2009, the Group received no voting rights notifications according to article 21, section 1 of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG).

Directors’ dealings reported on corporate website

The purchase or sale of adidas AG shares (ISIN DE0005003404) or related financial instruments, as defined by article 15a WpHG, conducted by members of our Executive or Supervisory Boards, by key executives or by any person in close relation- ship with these persons, is reported on our website www.

adidas-Group.com/directors_dealings. In the third quarter of 2009, adidas AG received notification that Christian Tourres, member of the adidas AG Supervisory Board, had sold 50,000 shares on August 5, 2009.

Share price development in 2009¹⁾

Dec. 31, 2008 September 30, 2009

150

125

100

75

50 adidas AG DAX-30

MSCI World Textiles, Apparel & Luxury Goods 1) Index: December 31, 2008 = 100.

(12)

adidas Group Nine Months Report 2009 12 Interim Group Management Report Group Business Performance — Economic and Sector Development

Group Business Performance

In the first nine months of 2009, the adidas Group results were negatively impacted by significantly slowing consumer demand and high levels of promotional activity due to the adverse macroeconomic climate. Currency- neutral Group sales decreased 7% as a result of declines in all segments. In euro terms, adidas Group revenues decreased 4% to € 7.923 billion from € 8.225 billion in 2008. Group gross margin declined 4.3 percentage points to 45.1%

(2008: 49.4%), mainly driven by higher clear- ance sales, higher input costs and currency devaluation effects. Consequently, the Group’s gross profit declined 12% to € 3.576 billion in the first nine months of 2009 versus € 4.062 bil- lion in 2008. Group operating margin decreased 5.8 percentage points to 5.9% from 11.7% in 2008, due to the lower gross margin as well as higher other operating expenses as a percent- age of sales. Group operating profit declined 52% to € 465 million in the first nine months of 2009 versus € 963 million in 2008. Group net income attributable to shareholders decreased 62% to € 226 million from € 588 million in 2008.

Diluted earnings per share decreased 59% to

€ 1.13 in the first nine months of 2009 versus

€ 2.78 in 2008.

Quarterly consumer confidence development by region

Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009

USA¹⁾ 61.4 38.6 26.9 49.3 53.1

Euro Zone²⁾ (19) (31) (34) (25) (19)

Japan³⁾ 31.4 26.2 28.9 37.6 40.7

1) Source: Conference Board.

2) Source: European Commission.

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

Exchange rate development¹⁾

€ 1 equals

Average

rate 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Average rate 2009²⁾ USD 1.4702 1.3917 1.3308 1.4134 1.4643 1.3650 GBP 0.7956 0.9525 0.9308 0.8521 0.9093 0.8868 JPY 152.39 126.14 131.17 135.51 131.07 129.42 1) Spot rates at quarter-end.

2) Average rate for the first nine months.

Economic and sector development

Global economy shows first signs of stabilisation

After a strong decrease in the first half of 2009, the decline in global economic activity moderated significantly in the third quarter. However, towards the end of the three-month period some economic indicators signalled that recent growth momentum was primarily built upon fiscal and monetary stimuli rather than a fundamental recovery. In Europe, indus- trial output for the region was stable to slightly up, while consumer confidence brightened only moderately from low levels. Economic indicators for the European emerging markets suggested a lower rate of GDP declines than in previous quarters. In the USA, GDP returned to growth after almost two years of recession. This was mainly due to a rebound in private consumption, an increase in residential investments and a slower decrease of business inventories. Nevertheless, unemployment rates approached new record highs, which fuelled concerns about the long-term recovery of the US economy. In Asia, signs of an improving economic environment continued to prevail. Japan benefited from increasing public investment and exports, although private consumption remained relatively weak. In China, government stimulus supporting domestic demand offset a persistent weakness in exports and resulted in accelerated GDP growth in the quarter. In Latin America, the most recent data suggests that economic activity recovered during the quarter, however without positive spill over effects on the region’s labour markets.

Sporting goods industry still affected by low levels of consumer confidence

During the third quarter of 2009, the sporting goods industry continued to be affected by low levels of consumer confidence. Private consumption remained subdued due to rising unemployment rates in many regions of the world. In Europe, sporting goods sales declined due to consumers trading off higher price point purchases for cheaper buys as a consequence of increasing unemployment. In the USA, sporting goods sales continued to decline year-over-year as retailers focused on keeping inventory levels low amid lacklustre consumer demand. In Asia, the industry’s growth engine over the last couple of years, industry sales continued to be weak.

In China, retailers made further progress in the clearance of excess inventories although consumer demand remained subdued. In Japan, industry sales continued to be negatively affected by weak private consumption. In Latin America, the industry continued to grow solidly, even though momentum slowed slightly owing to more cautious consumer spending.

(13)

adidas Group Nine Months Report 2009 13 Interim Group Management Report Group Business Performance — Income Statement

Nine months net sales

€ in millions

2005¹⁾ 5,115

2006²⁾ 7,836

2007 7,879

2008 8,225

2009 7,923

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

Nine months net sales by segment¹⁾

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

adidas 73%

TaylorMade- adidas Golf 8%

Reebok 19%

Income Statement

Consolidation of new businesses impacts Reebok and TaylorMade-adidas Golf results

In the first nine months of 2009, the performance of the adidas Group was impacted by the consolidation of new companies in Latin America in the Reebok segment and of Ashworth, Inc. in the TaylorMade-adidas Golf segment. Effective April 1, 2008, the adidas Group acquired 99.99% of the shares of Reebok Pro- ductos Esportivos Brazil Ltda. (formerly Comercial Vulcabras Ltda.), the distribution company for Reebok products in Brazil and Paraguay. Effective June 2, 2008, Reebok also founded a new company in Argentina, in which the adidas Group holds 99.99% of the shares. Ashworth, Inc., a leader in cotton casual golf apparel, has been consolidated within the adidas Group since November 20, 2008.

Third quarter adidas Group currency-neutral sales decrease 7%

During the third quarter of 2009, Group sales declined 7%

on a currency-neutral basis. Currency movements positively impacted Group sales in euro terms. Group revenues decreased 6% in euro terms to € 2.888 billion in the third quarter of 2009 from € 3.083 billion in 2008.

Third quarter adidas Group currency-neutral sales decline in all segments

In the third quarter of 2009, adidas Group currency-neutral sales declined in all segments. Currency-neutral adidas segment revenues decreased 6%. Double-digit growth in Latin America was offset by declines in all other regions. Currency- neutral sales in the Reebok segment decreased 12% in the third quarter of 2009 versus the prior year due to declines in all regions. At TaylorMade-adidas Golf, currency-neutral revenues decreased 12%, driven by declines in North America and Asia. Sales recorded in the HQ/Consolidation segment, which reflect revenues not attributable to the adidas, Reebok or TaylorMade-adidas Golf segments, decreased 53% currency- neutral in the third quarter. HQ/Consolidation accounts for less than 1% of Group sales.

In euro terms, adidas sales decreased 5% in the third quarter of 2009 to € 2.111 billion from € 2.218 billion in 2008. Sales at Reebok declined 11% to € 591 million versus € 665 million in the prior year. TaylorMade-adidas Golf sales in euro terms decreased 6% to € 184 million from € 197 million in 2008. HQ/

Consolidation sales decreased 55% to € 2 million from € 4 million in the prior year.

adidas Group currency-neutral sales decline 7%

in first nine months

In the first nine months of 2009, Group revenues decreased 7%

on a currency-neutral basis, as a result of lower sales in all business segments. The adidas segment decreased 7%, the Reebok segment 9% and the TaylorMade-adidas Golf segment 5%. Currency translation effects positively impacted sales in euro terms. Group revenues in euro terms declined 4% to

€ 7.923 billion in the first nine months of 2009 from € 8.225 billion in 2008.

Currency-neutral revenues decline in all product categories Currency-neutral Group sales declined in all categories in the first nine months of 2009. Currency-neutral footwear sales decreased 5% during the period driven by declines in all segments. First nine months apparel sales decreased 6% on a currency-neutral basis, due to declines in the adidas and Reebok segments. Apparel sales in the TaylorMade-adidas Golf segment grew as a result of the consolidation of the Ashworth business. Currency-neutral hardware sales declined 19%

compared to the prior year, due to decreases in all segments.

In euro terms, footwear sales decreased 2% to € 3.660 billion in the first nine months of 2009 (2008: € 3.741 billion). Apparel sales declined 2% to € 3.498 billion (2008: € 3.582 billion).

Hardware sales decreased 15% to € 766 million in the first nine months of 2009 from € 902 million in 2008.

(14)

Nine months currency-neutral net sales growth¹⁾ by segment and region in %

Europe North

America Asia Latin

America Total

adidas (8) (12) (8) 17 (7)

Reebok (9) (15) (8) 25 (9)

TaylorMade-

adidas Golf 19 (2) (16) 22 (5)

Total (8) (11) (9) 19 (7)

1) Versus the prior year.

Nine months net sales growth in €¹⁾ by segment and region in %

Europe North

America Asia Latin

America Total

adidas (9) (3) 3 8 (4)

Reebok (10) (7) (5) 17 (6)

TaylorMade-

adidas Golf 7 7 (5) 20 3

Total (9) (3) 1 10 (4)

1) Versus the prior year.

Nine months net sales by region¹⁾

1) Excluding HQ /Consolidation.

Europe 44%

Asia 24%

Latin America 9%

North America 23%

Currency-neutral sales decrease in nearly all regions Currency-neutral adidas Group sales declined in all regions except Latin America in the first nine months of 2009. Group sales in Europe decreased 8% on a currency-neutral basis, due to declines in most major markets impacted by the non- recurrence of strong prior year sales related to the UEFA EURO 2008™. In North America, Group sales decreased 11%

on a currency-neutral basis due to declines in both the USA and Canada. Sales for the adidas Group in Asia decreased 9%

on a currency-neutral basis, mainly as a result of declines in Japan and China. In Latin America, sales grew 19% on a currency-neutral basis, with double-digit increases in most of the region’s major markets, supported by the new Reebok companies in Brazil/Paraguay and Argentina.

In euro terms, sales in Europe decreased 9% to € 3.442 billion in the first nine months of 2009 from € 3.776 billion in 2008. Sales in North America declined 3% to € 1.822 billion from € 1.871 billion in 2008. Revenues in Asia grew 1% to

€ 1.894 billion in the first nine months of 2009 from € 1.875 billion in 2008. Sales in Latin America grew 10% to € 713 million from € 647 million in the prior year.

Gross margin negatively impacted by higher clearance sales The gross margin of the adidas Group decreased 4.3 percentage points to 45.1% in the first nine months of 2009 (2008:

49.4%). This development was mainly due to higher clearance sales, higher input costs and currency devaluation effects, in particular related to the Russian rouble. As a result, gross profit for the adidas Group declined 12% in the first nine months of 2009 to € 3.576 billion versus € 4.062 billion in the prior year.

Currency-neutral royalty and commission income decreases 8%

Royalty and commission income for the adidas Group decreased 8% on a currency-neutral basis mainly due to the non-recurrence of royalties from distribution part- ners in the Reebok segment in Brazil/Paraguay and Argen- tina. The distribution partnerships in these countries were replaced by own companies whose sales were consolidated for the first time effective April and June 2008, respectively. In euro terms, royalty and commission income decreased 2% to

€ 63 million in the first nine months of 2009 from € 64 million in the prior year.

Other operating income grows 33%

Other operating income increased 33% to € 72 million in the first nine months of 2009 from € 54 million in 2008. This develop ment was mainly due to the release of accruals for personnel costs from 2008.

(15)

Nine months gross profit

€ in millions

2008 4,062

2009 3,576

Nine months operating profit

€ in millions

2008 963

2009 465

Nine months other operating income

€ in millions

2008 54

2009 72

Nine months other operating expenses

€ in millions

2008 3,217

2009 3,246

Moderate growth of other operating expenses

Other operating expenses as a percentage of sales increased 1.8 percentage points to 41.0% in the first nine months of 2009 from 39.1% in 2008. In euro terms, other operating expenses increased 1% to € 3.246 billion in the first nine months of 2009 from € 3.217 billion in the prior year, mainly as a result of higher expenses to support the Group’s development in emerging markets. Costs related to reorganisation, higher allow- ances for doubtful debts and the integration of the Ashworth business also contributed to this development.

Global employee base grows due to own-retail expansion On September 30, 2009, the Group had 39,524 employees, which represents an increase of 5% versus 37,485 in the previous year. This development is primarily related to new employees in adidas and Reebok own retail, mainly on a part- time basis. Compared to the end of 2008, an increase in the number of employees in own retail more than offset the effects of reorganisation initiatives at Reebok and TaylorMade-adidas Golf and the implementation of a hiring freeze throughout the adidas Group.

Operating margin declines 5.8 percentage points

The operating margin of the adidas Group decreased 5.8 percentage points to 5.9% in the first nine months of 2009 (2008:

11.7%). The decline was due to the decrease in Group gross margin as well as higher other operating expenses as a percentage of sales. As a result, Group operating profit decreased 52% to € 465 million versus € 963 million in 2008.

Financial income down 37%

Financial income decreased 37% to € 15 million in the first nine months of 2009 from € 23 million in the prior year, mainly due to changes in the fair value of financial instruments.

Financial expenses increase 1%

Financial expenses increased 1% to € 137 million in the first nine months of 2009 (2008: € 136 million). Negative exchange rate variances were partly offset by a decline in interest expenses.

(16)

Nine months net income attributable to shareholders

€ in millions

2005¹⁾ 386

2006²⁾ 469

2007 530

2008 588

2009 226

1) Includes continuing and discontinued operations.

Nine months income before taxes

€ in millions

2008 850

2009 343

Income before taxes decreases 60%

Income before taxes (IBT) as a percentage of sales decreased 6.0 percentage points to 4.3% in the first nine months of 2009 from 10.3% in 2008. This was mainly a result of the Group’s operating margin decrease. IBT for the adidas Group declined 60% to € 343 million from € 850 million in 2008.

Net income attributable to shareholders declines 62%

The Group’s net income attributable to shareholders decreased 62% to € 226 million in the first nine months of 2009 from

€ 588 million in 2008. The Group’s lower operating profit was the primary reason for this development. The Group’s tax rate increased 3.7 percentage points to 34.2% in the first nine months of 2009 (2008: 30.5%), mainly due to a less favourable regional earnings mix.

Minority interests down

The Group’s minority interests decreased to negative € 1 million in the first nine months of 2009 from positive € 2 million in 2008. The decline was primarily due to the buyout of the Reebok joint venture partner in Spain, effective January 2009.

Basic and diluted earnings per share decrease 61% and 59% respectively

Basic earnings per share decreased 61% to € 1.17 in the first nine months of 2009 versus € 2.96 in 2008. The weighted average number of shares used in the calculation of basic earnings per share decreased to 193,515,512 in the first nine months of 2009 (2008 average: 198,868,061) due to the share buyback programme from January to October 2008. Diluted earnings per share in the first nine months of 2009 decreased 59% to

€ 1.13 from € 2.78 in the prior year. The weighted average number of shares used in the calculation of diluted earnings per share was 209,247,568 (2008 average: 214,671,394). The dilutive effect largely results from approximately sixteen million additional potential shares that could be created in relation to our convertible bond.

(17)

adidas Group Nine Months Report 2009 17 Interim Group Management Report Group Business Performance — Balance Sheet and Cash Flow Statement

Balance sheet structure¹⁾ in % of total liabilities and equity

Liabilities and equity Sep. 30, 2009 Sep. 30, 2008

Total liabilities and

equity (€ in millions) 9,105 9,456

1) For absolute figures see Consolidated Balance Sheet, p. 28.

Balance sheet structure¹⁾ in % of total assets

Assets Sep. 30, 2009 Sep. 30, 2008

Total assets

(€ in millions) 9,105 9,456

1) For absolute figures see Consolidated Balance Sheet, p. 28.

Total equity 36.0

Other liabilities 24.7

Long-term borrowings 22.9

Accounts payable 9.8

Short-term borrowings 6.6

Other assets 14.9

Fixed assets 42.8

Inventories 18.2

Accounts receivable 20.5

Cash and cash equivalents 3.6

35.1 26.0 26.5 8.2 4.2

15.2 41.2 19.2 21.7 2.7

Balance Sheet and Cash Flow Statement Total assets decrease 4%

At the end of September 2009, total assets decreased 4%

to € 9.105 billion versus € 9.456 billion in the prior year. An increase in non-current assets was more than offset by a decrease in current assets. Compared to December 31, 2008, total assets also decreased 4%.

Group inventories down 9%

Group inventories decreased 9% to € 1.652 billion at the end of September 2009 versus € 1.812 billion in 2008. On a currency- neutral basis, inventories were down 8%. This development was mainly due to reduced production volumes as well as clearance of excess inventories at all brands, partly offset by higher inventories in Latin America.

Accounts receivable decrease 9%

At the end of September 2009, Group receivables decreased 9%

to € 1.866 billion (2008: € 2.055 billion). On a currency-neutral basis, receivables were down 7%. This decrease reflects the decline in sales as well as strict discipline in the Group’s trade terms management despite the difficult economic situation in most markets.

Other current financial assets down 8%

Other current financial assets decreased 8% to € 136 million at the end of September 2009 from € 147 million at the end of September 2008. This development was mainly due to lower fair values of financial instruments.

Other current assets down 21%

Other current assets decreased 21% to € 456 million at the end of September 2009 from € 579 million in 2008, mainly as a result of a decrease in prepayments.

(18)

adidas Group Nine Months Report 2009 18 Interim Group Management Report Group Business Performance — Balance Sheet and Cash Flow Statement

Fixed assets remain stable

Fixed assets remained stable at € 3.893 billion at the end of September 2009 versus € 3.897 billion at the end of September 2008. Additions of € 405 million were related to continued own- retail expansion, investment into the Group’s IT infrastructure as well as the acquisition of Ashworth, Inc. and Textronics, Inc.

Additions were partly offset by depreciation and amortisation of

€ 277 million as well as disposals in an amount of € 64 million.

In addition, negative currency translation effects in an amount of € 68 million on fixed assets denominated in currencies other than the euro impacted this development. Compared to December 31, 2008, fixed assets decreased 4%.

Assets held-for-sale decrease 68%

At the end of September 2009, assets held-for-sale decreased 68% to € 18 million (2008: € 57 million). The decline was mainly due to the transfer of assets held-for-sale which are no longer in the scope of a sale to fixed assets. At the end of September 2009, assets held-for-sale mainly related to the planned sale of land and buildings in Herzogenaurach, Germany.

Accounts payable grow 15%

Accounts payable increased 15% to € 892 million at the end of September 2009 versus € 775 million at the end of September 2008. On a currency-neutral basis, accounts payable were also up 15%. This development was mainly due to improved terms with our suppliers.

Other current financial liabilities increase 175%

Other current financial liabilities increased 175% to € 149 million at the end of September 2009 from € 54 million at the end of September 2008, primarily due to an increase in the fair value of hedging instruments.

Accrued liabilities decrease 17%

Accrued liabilities decreased 17% to € 612 million at the end of September 2009 compared to € 733 million at the end of September 2008, due to timing of payments. In addition, liabilities in connection with promotion partnership contracts decreased.

Shareholders’ equity decreases 1%

Shareholders’ equity declined 1% to € 3.268 billion at the end of September 2009 versus € 3.306 billion at the end of Septem- ber 2008. Negative currency translation effects in an amount of € 88 million, the buyback of adidas AG shares and a net loss on cash flow hedges more than offset the net income gener- ated during the last twelve months. Compared to December 31, 2008, shareholders’ equity decreased 3%.

Cash flow development reflects decreased working capital needs

In the first nine months of 2009, cash inflow from operating activities was € 122 million (2008: outflow of € 100 million).

The increase in cash provided by operating activities compared to the prior year was primarily due to lower working capital needs. Cash outflow for investing activities was € 58 million (2008: € 220 million) and was mainly related to spending for property, plant and equipment such as investments in the furnishing and fitting of adidas and Reebok own-retail stores and in IT systems. Cash inflows from financing activities were mainly related to proceeds from the issue of a five- year Eurobond in an amount of € 500 million. Cash outflow in an amount of € 404 million led to a corresponding change in short-term borrowings. Dividends paid in an amount of

€ 97 million also impacted this development. Consequently, net cash provided by financing activities totalled € 11 million (2008: € 281 million). As a result of this development, cash and cash equivalents increased by € 82 million to € 326 million at the end of September 2009 (December 31, 2008: € 244 million).

Net borrowings down € 299 million

Net borrowings at September 30, 2009 amounted to € 2.294 billion, which represents a decrease of € 299 million, or 12%, versus € 2.593 billion at the end of September 2008. Lower working capital requirements were the main reason for the net debt decline. This positive effect more than offset cash outflows in an amount of € 32 million in relation to the meanwhile com- pleted share buyback programme as well as negative currency translation effects in an amount of € 5 million. Consequently, the Group’s financial leverage decreased to 70.2% at the end of September 2009 versus 78.5% in the prior year.

Inventories¹⁾

€ in millions

2008 1,812

2009 1,652

1) At September 30.

Receivables¹⁾

€ in millions

2008 2,055

2009 1,866

1) At September 30.

Accounts payable¹⁾

€ in millions

2008 775

2009 892

1) At September 30.

Net borrowings¹⁾

€ in millions

2008 2,593

2009 2,294

1) At September 30.

Shareholders’ equity¹⁾

€ in millions

2008 3,306

2009 3,268

1) At September 30, excluding minority interests.

(19)

adidas Group Nine Months Report 2009 19 Interim Group Management Report adidas Business Performance

adidas at a glance

€ in millions

Nine months

2009 Nine months

2008 Change

Net sales 5,779 6,004 (4%)

Gross profit 2,708 2,947 (8%)

Gross margin 46.9% 49.1% (2.2pp)

Operating profit 789 951 (17%)

Operating margin 13.7% 15.8% (2.2pp)

Nine months adidas net sales

€ in millions

2005 4,545

2006 5,248

2007 5,465

2008 6,004

2009 5,779

adidas Business Performance

In the first nine months of 2009, currency- neutral sales in the adidas segment decreased 7%. In euro terms, segment sales declined 4%

to € 5.779 billion from € 6.004 billion in the prior year. Gross margin decreased 2.2 per- centage points to 46.9% (2008: 49.1%). This was mainly a result of higher input costs, currency devaluation effects as well as higher clearance sales. Gross profit decreased 8%

to € 2.708 billion in the first nine months of 2009 from € 2.947 billion in the prior year period. As a result of the decline in gross margin, operating margin decreased 2.2 per- centage points to 13.7% (2008: 15.8%).

Operating profit declined 17% to € 789 million in the first nine months of 2009 versus

€ 951 million in 2008.

Third quarter currency-neutral sales down 6%

In the third quarter of 2009, revenues for the adidas segment decreased 6% on a currency-neutral basis. Growth in the Sport Style division could not offset declines in major sports categories in the Sport Performance division. Currency movements positively impacted sales in euro terms. Sales were down 5%

in euro terms to € 2.111 billion from € 2.218 billion in the prior year.

Nine months currency-neutral segment sales decline 7%

Revenues for the adidas segment declined 7% on a currency- neutral basis in the first nine months of 2009. This development was a consequence of the challenging macroeconomic environment which negatively affected retailer and consumer demand. Currency-neutral footwear, apparel and hardware sales all decreased compared to the prior year. Currency movements positively impacted sales in euro terms. Segment sales declined 4% in euro terms to € 5.779 billion in the first nine months of 2009 from € 6.004 billion in 2008.

Currency-neutral adidas sales decline in nearly all regions Currency-neutral sales for the adidas segment in the first nine months of 2009 decreased in all regions except Latin America.

Revenues in Europe decreased 8% on a currency-neutral basis, mainly due to the non-recurrence of strong prior year sales related to the UEFA EURO 2008™ and difficult market conditions in most major European countries. Currency-neutral adidas sales in North America decreased 12% as a result of declines in both the USA and Canada. Sales in Asia decreased 8% on a currency-neutral basis due to declines in China and Japan. In Latin America, currency-neutral sales grew 17%, driven by double-digit increases in most major markets.

In euro terms, sales in Europe decreased 9% to € 2.874 billion in the first nine months of 2009 from € 3.159 billion in 2008.

Revenues in North America decreased 3% to € 814 million in 2009 from € 843 million in 2008. Sales in Asia increased 3% to

€ 1.507 billion in the first nine months of 2009 from € 1.467 billion in 2008, and revenues in Latin America improved 8% to

€ 538 million in 2009 versus € 497 million in the prior year.

Sport Performance declines 10% on a currency-neutral basis Sales in the Sport Performance division decreased 10% on a currency-neutral basis in the first nine months of 2009.

While revenues declined in all major sports categories, outdoor sales increased. The football category was strongly impacted by the non-recurrence of strong prior year sales in connection with the UEFA EURO 2008™. In euro terms, Sport Performance sales declined 7% in the first nine months of 2009 to € 4.495 billion from € 4.813 billion in the prior year.