Our Share

The adidas AG share developed strongly in 2007, increasing 36% and outperforming both the DAX-30 and the MSCI World Textiles, Apparel & Luxury Goods Index. Outstanding financial results throughout the year and growing confidence in the Group’s medium-term strategy were the drivers of this outperformance. The Group’s ADR and convertible bond also appreciated significantly in 2007. As a result of the Group’s strong operational performance in 2007, we intend to propose a higher dividend at the 2008 Annual General Meeting. Our shareholder base is becoming increasingly international and analyst support for the adidas AG share has strengthened significantly versus the prior year.

SIGNIFICANT Share Price Increase
After trading sideways at the beginning of the year, our share gained significantly following the release of our 2006 full year results in early March. Management’s financial guidance for 2007 and the confirmation of our Group’s medium-term targets strengthened investor sentiment. Buoyant merger and acquisition activity in our industry as well as shareholder notification and speculation around adidas AG also supported our share price development. In mid-2007, our share price declined in line with the DAX-30 and our sector as a result of the US subprime mortgage crisis. Our share price also suffered as a result of concerns about the short-term Reebok business outlook, the weak state of the US mall-based channel as well as several earnings announcements from suppliers and retailers which were below market expectations. Despite the positive reaction to our quarterly earnings release in early August, which exceeded consensus estimates, our share price trended downwards, in line with the overall market. Later in the month, our share price regained slightly after our Investor Day held in Canton, Massachusetts, USA, due to widespread positive response to the Group’s medium-term strategic initiatives. Positive news flow from our sector in September and October helped drive improvements in our share. At the beginning of November, our well-received nine months results supported a share rally throughout the remainder of the year. The adidas share closed 2007 at its all-time high of € 51.26. As a result of this development, our market capitalization increased significantly to € 10.4 billion at the end of 2007 versus € 7.7 billion at the end of 2006.

adidas AG Share A Member of Important Indices
The adidas AG share is included in a variety of high-quality indices around the world, most importantly the DAX-30 and the MSCI World Textiles, Apparel & Luxury Goods Index. The DAX-30 is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The MSCI World Textiles, Apparel & Luxury Goods Index comprises our Group’s major competitors. At December 31, 2007, our weighting in the DAX-30, which is calculated on the basis of free float market capitalization and 12-month share turnover, was 1.31 % (2006: 1.12 %). Our increased weighting compared to the prior year was largely a result of the significant increase in our market capitalization. In addition, average daily trading volume of the adidas AG share (excluding bank trades) rose from 2.0 million in 2006 to more than 2.2 million in 2007. Within the DAX-30, we ranked 21st on market capitalization (2006: 24) and 22nd on turnover (2006: 21) at year-end 2007.
 

adidas AG Market Capitalization at Year-End € in millions

STRONG SUSTAINABILITY TRACK RECORD REFLECTED IN INDEX MEMBERSHIPS
In recognition of our social and environmental efforts, adidas AG is part of several sustainability indices. In 2007, adidas AG was included in the Dow Jones Sustainability Indexes for the eighth consecutive year. The indexes rated the adidas Group as an industry leader on sustainability issues and corporate social responsibility in the category “footwear, clothing & accessories”. In addition, the adidas Group was again included in the FTSE4Good Index. This positive reassessment acknowledges the Group‘s social, environmental and ethical engagement, and encourages us to continue and intensify our efforts to improve our sustainability performance. Also, adidas AG was included in the Vigeo Group’s Ethibel Excellence, Ethibel Pioneer and ASPI Indices. The Ethibel Indices consist of companies that meet financial and sustainability performance criteria established by the independent organization Forum Ethibel. The ASPI Eurozone Index is the European index of reference for companies and investors wishing to commit themselves in favor of sustainable development and corporate social responsibility. Further, the adidas Group was included for the third consecutive time in the list of The Global 100 Most Sustainable Corporations in the World.

adidas AG Share Outperforms Major Indices
2007 was a successful year for the adidas AG share. Our share price increased by 36 % compared to the 2006 year-end level. As a result, our share significantly outperformed the DAX-30 (+ 22 %) as well as the MSCI World Textiles, Apparel & Luxury Goods Index (+ 8 %). The DAX-30 and the MSCI World Textiles, Apparel & Luxury Goods Index both started strongly in 2007, supported by positive macroeconomic trends, strong corporate news flow and merger and acquisition activity. However, index growth stalled in the second half of the year as a result of the crisis on the US subprime mortgage market, rising commodity prices and increasing fears about the US economy falling into a recession. Although the Federal Reserve intervened three times by cutting interest rates by a total of 75 basis points, the situation on the US market remained difficult with spill-over effects on the country’s economy as well as international credit and capital markets.

adidas AG Historically Outperforms Benchmark Indices
The adidas Group is committed to continuously enhancing shareholder value. The long-term development of our share price reflects investor confidence and the growth potential of our Group. Since our IPO in November 1995, our share has gained 490 %. This represents a clear outperformance of both the DAX-30 and the MSCI Index, which increased 266 % and 167 % respectively during the period.

ADR Outperforms Common Stock Due to Euro ApPreciation
Since its launch on December 30, 2004, our Level 1 American Depositary Receipt (ADR) facility has enjoyed great popularity among American investors. The Level 1 ADR closed the year at US $ 37.20, representing an increase of 48 % versus the prior year (2006: US $ 25.11). Due to the appreciating euro, the ADR outperformed our common stock. Despite growing volumes in the first half of the year, the number of year-end ADRs outstanding declined as a result of capital market uncertainty from the subprime mortgage crisis. The number of Level 1 ADRs outstanding decreased slightly to 11.1 million at year-end 2007 (2006: 11.3 million). In November 2007, we decided to list the adidas AG ADR on the international OTCQX. This electronic trading forum includes leading international companies with substantial operating businesses and credible disclosure policies. With this listing, we expect to further increase trading of our ADRs by US investors in 2008 and beyond.

Convertible Bond Trades at a Premium
The publicly-traded convertible bond closed the year at € 202.65, which is 31 % higher than its prior year level (2006: € 154.90). This represents a premium of around 0.8 % above par value of the share.

High and Low Share Prices per Month

Shareholder Structure 1)
1)	As at February 2008.

Higher Dividend Proposed
The adidas AG Executive and Supervisory Boards will recommend paying a dividend of € 0.50 to our shareholders at the Annual General Meeting (AGM) on May 8, 2008 (2006: € 0.42). Subject to the meeting’s approval, the dividend will be paid on May 9, 2008. The proposed dividend per share represents an increase of € 0.08 per share. This increase reflects the Group’s strong operational performance in 2007 and highlights our confidence in the Group’s future business performance. The total payout of € 102 million (2006: € 85 million) reflects an increase of our payout ratio to 19 % of net income (2006: 18 %). The dividend proposal follows our dividend policy, under which the adidas Group intends to pay out between 15 and 25 % of consolidated net income.

2007 AGM Resolves on the Authorization for SHARE BUYBACK
At the AGM on May 10, 2007, our shareholders approved an authorization to repurchase shares in an amount of up to 10 % of the stock capital until November 9, 2008. In January 2008, the Group initiated a share buyback program of up to 5 % of share capital.  see Subsequent Events

INCREASINGLY INTERNATIONAL INVESTOR BASE
Based on the amount of invitations to our AGM in May 2007, we estimate that adidas AG currently has around 80,000 shareholders. According to our latest ownership analysis conducted in February 2008, known institutional investors continue to account for approximately 96 % (2007: 96 %) of our shares outstanding. In the North American market, institutional shareholdings increased to 40 % (2007: 37 %). German institutional investors accounted for 11 % of adidas AG shares (2007: 12 %). The shareholdings in the rest of Europe excluding Germany decreased to 38 % (2007: 40 %). 2 % are held by institutional shareholders in other regions of the world (2007: 2 %). adidas Group Management, which comprises current members of the Executive and Supervisory Boards, continues to hold less than 5 % in total. Smaller, undisclosed holdings, which also include private investors, continued to account for 4 % (2006: 4 %).

Five-Year Share Price Development1)
1)	Index: December 31, 2002 = 100

Recommendation Split 1)
1)	At year-end 2007.                                                                                 Source: Bloomberg.

ANALYSTS RAISE RECOMMENDATIONS
The adidas Group continued to receive strong analyst support in 2007. Around 30 analysts regularly published research reports on adidas AG. In 2007, both Lehman Brothers and Goldman Sachs shifted coverage on our share to Europe from North America. This follows a similar trend initiated by other banks in 2006, after our acquisition of Reebok, which strongly consolidated the number of footwear and apparel suppliers in the USA. Now the majority of adidas coverage takes place in Europe. Analyst recommendations improved considerably throughout 2007, as confidence grew regarding our ability to deliver sustainable operating margin improvement and earnings growth. The majority of analysts are confident about the medium- and longterm potential of our Group. This is reflected in the recommendation split for our share as of December 31, 2007. 84 % of analysts recommended investors to “buy” our share in their last publication during the 12-month period (2006: 38 %). 16 % advised to hold our share (2006: 56 %). No analyst recommended a “sell” rating (2006: 6 %).

Award-Winning Investor Relations Activities
adidas AG strives to maintain continuous close contact to institutional and private shareholders as well as analysts. In 2007, Management and the Investor Relations team spent almost twenty full days on roadshows and presented at numerous national and international conferences. At the AGM in May 2007, we conducted a private shareholder survey regarding satisfaction with our share as an investment as well as our Investor Relations services. Survey results illustrated a high level of satisfaction from long-term shareholders and included feedback that more than one third of shareholders in attendance at our AGM use our Investor Relations website on a regular basis. In August, we held our eighth Investor Day in Canton, Massachusetts, USA, where Management presented updates on Group and brand strategies. The effectiveness of our Group’s Investor Relations activities was highlighted by the Institutional Investor’s 2007 Rankings, where buy-side participants ranked us as the best Investor Relations program in our sector. Further, adidas AG achieved the number two position in Extel’s Pan-European Survey 2007 for the luxury goods sector. Our Investor Relations products also ranked strongly. The print version of our 2006 Annual Report took third place in the DAX-30 by the “manager magazin” competition “The Best Annual Reports” including the top ranking for content. Our IR Website and Online Annual Report were ranked number one in the consumer goods industry in the annual MZ awards.

Extensive Financial Information Available Online
We offer extensive information around our share as well as the Group’s strategy and financial results on our corporate website.  www.adidas-Group.com/investors Our event calendar lists all conferences we attend and provides all presentations for download. In addition to live webcasts of all major events such as our Analyst Conference, the AGM and our Investor Day, we also offer podcasts of our quarterly conference calls. In 2007, we introduced a quarterly online chat and an RSS feed. In January 2008, we launched an event reminder service to ensure timely notification about upcoming corporate events to interested shareholders.