adidas Group Investor Day

November 8, 2010

Global Sales Strategic Initiatives Herbert Hainer

Global Sales Mission

Get the products onto the feet, into the hands, in the shopping bags of the Consumer

We want to be ready to strike at the POS

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Three Distinctive Channels

Wholesale

Own Retail

eCommerce

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Global Sales Strategic Priorities

North America

Integrated distribution roadmap

Greater China

Increase controlled space to >45% Three Attack markets to generate 50% of sales growth

Russia

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Integrated Distribution Roadmap

What is it? A joint approach in every market for agreed Top 100 cities to identify where we want our brands successfully represented our blueprint for the future!

Why do we need it? Provides a joined-up approach to growing our business Cements the integrity and presence of our brands within a market Grows market share in underpenetrated affluent cities Eliminates duplication of effort Clusters own investment to achieve scale and site excellence

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5 Strategic Priority Areas In Global Operations

DELIVER BASICS PRIORITY 1: Ensure costcompetitiveness PRIORITY 2: Industry-leading product availability

MAKE A DIFFERENCE PRIORITY 4: Support growth battle fields PRIORITY 5: Modernise Group infrastructure

PRIORITY 3: Faster to POS

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North America Provides Largest Revenue Growth Potential

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WIN THE HEARTS AND MINDS OF HIGH SCHOOL KIDS ON THE FIELD AND IN THE HALLWAY

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Why The High School Consumer?

16.3m high school kids $16.1bn spending 20% industry spend 80% higher spending than college kids Influencers and purchasers of sport and fashion

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How To Win The High School Consumer

Increasing mind share and purchase intent with relevant brand communication Creating strong product franchises to increase brand momentum Driving sell-thru and market share where it matters

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Generation US 2015 Focus Sports

7 Million High School Athletes Basketball Football Soccer Baseball Running

Training

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Team Is The Foundation Of Sport

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Team Is The Foundation Of Sport

Why:
$1.5bn industry with big halo effect Direct and authentic for the high school kid

How:
Industry-leading team service engine Innovation leadership through aiT support Increased investments in US sports

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Team Strategic Formula

US Sports + SLD = adidas team sports

Service Speed to market Seamless organisation

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Increasing Mind Share And Purchase Intent

Why:
Direct correlation to sales and margin growth

How:
With brand communication that is: Consistent Relevant Irreverent

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Establish 3 Key Marketing Pillars Per Year

Why:
Less complexity Sharpened brand focus Drives brand momentum

How:
3 franchises as focal point per year Aligned global/local focus on development

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- Key Marketing Pillar In 2010

adizero F50

adizero Scorch

adizero Sonic

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- Key Marketing Pillar In 2010

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- Key Marketing Pillar In 2010

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- Key Marketing Pillar In ... 2011

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Training

- Key Marketing Pillar In ... 2011

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adidas Originals

- Key Marketing Pillar In ... 2011

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Wholesale Distribution Strategy

Distribution channels 2009

Field / Specialty 34%

Distribution channels 2015

Moderate Dept Field / Specialty

32% Moderate Dept

30%

16%

7% Strategic Dept

Strategic Dept

9%
Sporting Goods 19%

6% Mall

Sporting Goods

23%

24%

Mall

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Wholesale Distribution Strategy

Sporting Goods to be the largest distribution channel in 2011 Mall to grow at double-digit rate in 2011 Mall and Sporting Goods will account for nearly 50% of sales in 2015 Reductions to the discount channel headlines the reduction in Moderate Department Stores

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Summary
Focus:
Consumer: High school kids Sports: Team sports Marketing: 3 key pillars per year Distribution: Wholesale

Double-digit
growth per annum

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Excessive Growth Rates Until 2008

6,000 1,000

Number of franchise stores

1)

5,000

4,000 600 3,000 400 2,000 200

1,000

0 2004 2005 2006 2007 2008 2009 2010

1) Brand adidas only 2) Total China sales brand adidas

Sales ( in millions)

800

2)

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China Facing Tough Challenges Recently

Competition intensifies
Marketplace more and more crowded

Local brands gaining market and mind share

Vertical retailers

Local brands eye international expansion

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adidas GREATER CHINA CHANGING THE RULES

2010-2011 TRANSFORM
ORGANISATION AND

2012-2013 CATCH UP
AND ACCELERATE

2014-2015 GAIN BACK LEADERSHIP

GTM PROCESSES

REVENUE

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China Consumer More Sophisticated

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Category Attack In High Tier Cities

WOMENS TRAINING
B E C O M E

MENS TRAINING G A I N
LEADERSHIP

RUNNING G A I N
LEADERSHIP

A BRAND OF CHOICE
FOR WOMEN

BY 2012

BY 2015

G A I N
LEADERSHIP

CHALLENGE
LEADERSHIP

E M B R AC E
UNEXPLOITED
OPPORTUNITIES

BUILD
NEW SOURCE

BY 2015
FOOTBALL

BY 2015
BASKETBALL

OF GROWTH

HARDWARE

BEYOND

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Its Time To Unleash Originals

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Weve Only Started To Touch The Lower Tier Opportunity

Our city coverage in 2010
2000 1800 1600 1400 1200 1000 800 600 400 200 0 Not covered Covered
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Today: Only 247 cities with 100,000+ MAC population

1700+
T7 T6 T5 T4 T1-T3

~550

But Lower Tiers Matter More As China Gains In Wealth

Our city coverage in 2015 (planned)
2000 1800 1600
T7 T6 T5 T4 T1-T3

By 2015: 576 cities with 100,000+ MAC population

1400+
1400 1200 1000 800 600 400 200 0 Not covered Covered

850

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Lower Tier City Expansion

Store expansion roadmap

City-by-city footprint plan to match local retail environment Segmentation to match purchase patterns of high vs. low spenders Accessible pricing options to complement range POS increase of 2,500 by 2015

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Leverage Global Retail Expertise

Targets large-scale turnarounds Leverage global expertise and local knowledge Rapid feedback Model stores to benchmark

BEFORE

AFTER
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We Play To Win Commercially

Double-digit growth per annum

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Expand Leadership In Russia

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adidas Group Market Share In Russia around 60% in 2010

1 3 2
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Growth Driven By adidas And Reebok Own Stores

Over 700 stores in 2010

75% of sales through own retail in 2010

YTD Sep 2010 comparable store sales +21%

Fully integrated joint operating model

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Best Russian Sports Marketing Assets

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Improve Productivity In Existing Stores

Improved product offering Best sellers Seasonal offer Inventory management Pricing

Volume growth

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Improve Productivity In Existing Stores

Drive consumers into the store Effective in-store product communication Visual merchandising

Increase Units Per Transaction (UPT)

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Increase Store Base

Stand-alone stores Multi-brand factory outlets In existing and new malls

Over 1,000 stores in 2015

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Highest Growth Coming From Training

Training = 50% of sales

Expanding entry price point offer Leading in fitness top price point ranges Focusing on seasonal products

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Become The Leader In Outdoor In Russia

Leading in Outdoor by 2015

Outdoor windows In-store category call-out Drive traffic and conversion 350 doors with outdoor corner in 2011

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Increase Group Market Share By 50% In Outdoor

2010
Other 44% adidas 15% Reebok 8%

2015
Other 36% adidas 28%

Outventure 33%

Reebok 9% Outventure 27%

23%

adidas Group outdoor market share

37%

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adidas Group Market Share In Russia Around 70% by 2015

Total market share to be around 70%

1 3 2
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