On December 31, 2009, the nominal capital of adidas AG (“the company”) amounted to € 209,216,186 divided into 209,216,186 no-par-value bearer shares and was fully paid in.
On May 6, 2010, the Annual General Meeting of the company resolved the conversion from no-par-value bearer shares into registered no-par-value shares. The corresponding amendments to the Articles of Association were entered into the commercial register on July 13, 2010 and thus became effective on the same date. On October 11, 2010, the no-par-value bearer shares of the company were converted into registered no-par-value shares (“registered shares”) see Our Share.
At the balance sheet date, the nominal capital of the company amounted to a total of € 209,216,186 and was divided into 209,216,186 registered shares. The nominal capital is fully paid in.
The nominal capital remained unchanged. Consequently, on February 15, 2011, the nominal capital of adidas AG amounts to € 209,216,186 and is divided into 209,216,186 registered shares.
Each share grants one vote and is entitled to dividends starting from the beginning of the year it was issued. Treasury shares held directly or indirectly are not entitled to dividend payment in accordance with § 71b German Stock Corporation Act (Aktiengesetz – AktG). As at February 15, 2011, the company does not hold any treasury shares.
The Executive Board of adidas AG did not make use of the existing amounts of authorised capital of up to € 95,000,000 in the 2010 financial year or in the period beyond the balance sheet date up to and including February 15, 2011. The following description of the existing authorised capital does not contain the cancellation of the Authorised Capital 2006, resolved by the Annual General Meeting on May 6, 2010, which had also not been made use of up to May 6, 2010.
The authorised capital of the company, which is set out in § 4 sections 2, 3 and 4 of the Articles of Association as at the balance sheet date, entitles the Executive Board, subject to Supervisory Board approval, to increase the nominal capital
until June 21, 2014
– by issuing new shares against contributions in cash once or several times by no more than € 50,000,000 and, subject to Supervisory Board approval, to exclude residual amounts from shareholders’ subscription rights (Authorised Capital 2009/I);
until June 21, 2012
– by issuing new shares against contributions in kind once or several times by no more than € 25,000,000 and, subject to Supervisory Board approval, to exclude shareholders’ subscription rights (Authorised Capital 2009/II);
until July 12, 2015
– by issuing new shares against contributions in cash once or several times by no more than € 20,000,000 and, subject to Supervisory Board approval, to exclude residual amounts from shareholders’ subscription rights and to exclude shareholders’ subscription rights when issuing the new shares at a value not essentially below the stock market price of shares with the same features (Authorised Capital 2010). The authorisation to exclude subscription rights pursuant to the previous sentence may, however, only be used to the extent that the pro-rata amount of the new shares in the nominal capital together with the pro-rata amount in the nominal capital of other shares which have been issued by the company since May 6, 2010, subject to the exclusion of subscription rights pursuant to or in accordance with § 186 section 3 sentence 4 AktG on the basis of an authorised capital or following a repurchase, or for which conversion or subscription rights or conversion or subscription obligations were granted after May 6, 2010, through the issuance of convertible bonds and/or bonds with warrants, with subscription rights excluded in accordance with § 186 section 3 sentence 4 AktG, does not exceed 10% of the nominal capital existing on the date of the entry of this authorisation into the commercial register or – if this amount is lower – as of the respective date on which the authorisation is used.
The following description of the Contingent Capital is based on § 4 section 5 of the Articles of Association of the company as well as on the underlying resolutions of the Annual General Meeting held on May 6, 2010. Additional contingent capital does not exist.
Contingent Capital 2010
At the balance sheet date, the nominal capital is conditionally increased by up to € 36,000,000 divided into no more than 36,000,000 registered shares (Contingent Capital 2010). The contingent capital increase will be implemented only to the extent that holders or creditors of option or conversion rights or the persons obligated to exercise option or conversion duties on bonds issued by the company or a group company, pursuant to the authorisation of the Executive Board granted by the resolution adopted by the Annual General Meeting of May 6, 2010 up to May 5, 2015 and guaranteed by the company, exercise their option or conversion rights or, if they are obliged to exercise the option or conversion duties, meet their obligations to exercise the warrant or convert the bond, or to the extent that the company exercises its rights to choose to deliver shares in the company for the total amount or partially instead of a payment and insofar as no cash settlement, treasury shares or shares of another public-listed company are used to serve these rights. The new shares shall be issued at the respective option or conversion price to be established in accordance with the aforementioned authorisation resolution. The new shares shall carry dividend rights from the commencement of the financial year in which the shares are issued. The Executive Board is authorised, subject to Supervisory Board approval, to stipulate any additional details concerning the implementation of the contingent capital increase.
The Executive Board of adidas AG did not issue any option or conversion rights, or any shares from the Contingent Capital 2010 in the 2010 financial year or in the period beyond the balance sheet date up to and including February 15, 2011.
At the Annual General Meeting on May 6, 2010, the shareholders of the company cancelled the authorisation to repurchase adidas AG shares granted by the Annual General Meeting on May 7, 2009, which had not been used. At the same time, the Annual General Meeting granted the Executive Board a new authorisation to repurchase adidas AG shares up to an amount totalling 10% of the nominal capital until May 5, 2015. The authorisation may be used by the company but also by its subsidiaries or by third parties on account of the company or its subsidiaries or third parties assigned by the company or one of its subsidiaries. For further information see Disclosures pursuant to § 315 Section 4 of the German Commercial Code.
The authorisation was not utilised in the year under review and up to and including February 15, 2011.
Pursuant to § 160 section 1 no. 8 AktG, existing shareholdings which have been notified to the company in accordance with § 21 section 1 or section 1a of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) need to be disclosed.
The following table reflects shareholdings existing as at February 15, 2011 which have been notified to the company. The respective details are taken from the most recent voting rights notification received by the company. Note that the details on the percentage of shareholdings and voting rights may no longer be up-to-date.
Show table: Existing shareholdings as at February 15, 2011
All voting rights notifications disclosed by the company in the year under review and up to and including February 15, 2011 are available on the adidas Group website www.adidas-Group.com/voting_rights_notifications.
The Group’s policy is to maintain a strong capital base so as to uphold investor, creditor and market confidence and to sustain future development of the business.
The Group seeks to maintain a balance between a higher return on equity that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. Following the achievement of the medium-term goal of financial leverage below 50% in 2009, the Group aims to maintain net debt below two times EBITDA over the long term.
Financial leverage is derived by dividing net borrowings (short- and long-term borrowings less cash and cash equivalents as well as short-term financial assets) in an amount of € 221 million (2009: € 917 million) by shareholders’ equity in an amount of € 4.616 billion (2009: € 3.771 billion). EBITDA amounted to € 1.159 billion for the fiscal year ending December 31, 2010 (2009: € 780 million). The ratio between net borrowings and EBITDA amounted to 0.2 for the fiscal year ending December 31, 2010 (2009: 1.2).
Reserves within shareholders’ equity are as follows:
– Capital reserve: comprises the paid premium for the issuance of share capital.
– Cumulative translation adjustments: this reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
– Hedging reserve: comprises the effective portion of the cumulative net change in the fair value of cash flow hedges related to hedged transactions that have not yet occurred as well as of hedges of net investments in foreign subsidiaries.
– Other reserves: comprise the cumulative net change of actuarial gains or losses and the asset ceiling effect regarding defined benefit plans, expenses recognised for share option plans as well as fair values of available- for-sale financial assets.
– Retained earnings: comprise the accumulated profits less dividends paid.
Distributable profits to shareholders are determined by reference to the retained earnings of adidas AG and calculated under German Commercial Law.
The dividend for 2009 was € 0.35 per share (total amount: € 73 million), approved by the 2010 Annual General Meeting. The Executive Board of adidas AG will propose to shareholders a dividend payment of € 0.80 per dividend-entitled share for the year 2010 to be made from retained earnings of € 368 million reported as at December 31, 2010. The subsequent remaining amount will be carried forward.
209,216,186 dividend-entitled shares exist as at December 31, 2010, which would lead to a dividend payment of € 167 million.Top