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adidas Group
2011 Annual Report
GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
133
2011
Income Statement
Net sales increase 15%
Sales of adidas AG comprise external revenues from adidas and
Reebok product sales generated by adidas Germany, external
revenues from Y-3 products as well as group-internal revenues from
foreign subsidiaries. Reported revenues also include royalty and
commission income and other revenues. In 2011, adidas AG net sales
grew 15% to € 1.766 billion (2010: € 1.540 billion). More than half of
this increase is attributable to an increase in royalty and commission
income TABLE 55 .
03.2 Group Business Performance Financial Statements and Management Report of adidas AG
Financial Statements and
Management Report of adidas AG
adidas AG is the parent company of the adidas Group. It includes
operating business functions, primarily for the German market,
corporate headquarter functions such as Global Marketing, Group
Treasury, Taxes, Legal and Finance, and it also administers the share-
holdings of the company.
Operating activities and capital structure of adidas AG
The majority of the operating business consists of the sale of
merchandise to retailers and own-retail activities.
In addition to its own trading activities, the results of adidas AG are
significantly influenced by its holding function for the adidas Group.
This is reflected primarily in currency effects, transfer of costs for
services provided, as well as in interest result and income from invest-
ments in affiliated companies.
The opportunities and risks as well as the future development of
adidas AG largely reflect those of the adidas Group SEE RISK AND OPPOR-
TUNITY REPORT, P. 145
SEE SUBSEQUENT EVENTS AND OUTLOOK, P. 163 .
The asset and capital structure of adidas AG is significantly impacted
by its holding and financing function for the Group. For example, 57%
of total assets in 2011 relates to financial assets, which primarily
consist of shares in affiliated companies. Intercompany financial
accounts, through which transactions between affiliated companies
are settled, represent another 28% of total assets and 49% of total
liabilities and equity as at December 31, 2011.
Preparation of accounts
Unlike the consolidated financial statements, which are in conformity
with the International Financial Reporting Standards (IFRS), as
adopted by the European Union as at December 31, 2011, the following
financial statements of adidas AG have been prepared in accordance
with the rules set out in the German Commercial Code (Handels-
gesetzbuch – HGB).
54 Statement of income in accordance with HGB (condensed)
(€ in millions)
2011 2010
Net sales 1,766 1,540
Total output 1,766 1,540
Other operating income 1,254 1,280
Cost of materials (531) (480)
Personnel expenses (304) (275)
Depreciation and amortisation (69) (57)
Other operating expenses (2,125) (1,931)
Operating profit/(loss) (9) 77
Financial result 178 142
Extraordinary expenses 0 (19)
Taxes (58) (43)
Net income 111 157
Profit brought forward 201 211
Retained earnings 312 368
55 adidas AG net sales (€ in millions)
2011 2010
Royalty and commission income 922 806
adidas Germany 672 599
Foreign subsidiaries 113 77
Y-3 39 39
Other revenues 20 19
Total 1,766 1,540