adidas Group History

1949

The foundation

18 August - adidas is registered as a company, named after its founder: 'Adi' from Adolf and 'Das' from
Dassler.

50s

The 'Miracle of Bern'

1954 - The 'Miracle of Bern' Germany battle Hungary with a competitive advantage. They are wearing
adidas soccer boots which for the first time feature removable studs.
60s

Higher

Driven by a desire to help all athletes committed to performance, adidas manufactures equipment for
what some consider "fringe sports". Unconventional high jumper Dick Fosbury launches himself up and
over in adidas footwear.

70s

The "adidas" team wins

Crowning moment: Franz Beckenbauer, the "Kaiser", raising the World Cup in victory salute. Germany
had just beaten Holland 2-1 in the 1974 final.

80s

The transition

After AdiDassler's death, Adi's wife Kthe, his son Horst, and his daughters carry on the business.
90s

With a new management

Under the CEO Robert Louis-Dreyfus, adidas is moving from being a manufacturing and sales based
company to a marketing company.

1995

adidas goes public

Flotation of the company on the Frankfurt and Paris Stock Exchange.

1996

A splendid year

The "three-stripes company" equips 6,000 Olympic athletes from 33 countries. adidas athletes win 220
medals, including 70 gold. Apparel sales increase 50%.
1997

adidas-Salomon AG

adidas AG acquires the Salomon Group with the brands Salomon, TaylorMade, Mavic and Bonfire in
December 1997. The new company is named adidas-Salomon AG.

1999

The new brands

The integration of the new brands is gaining momentum. The new TaylorMadeFireSole clubs boost
sales. Salomon in-line skates take off with high double-digit growth during the first half of 1999.

2000

New management

Following personnel changes, the new management initiates an ambitious Growth and Efficiency
Program. Major sports events such as the European Soccer Championship EURO 2000 and the
Olympic Summer Games, where swimmer Ian Thorpe takes three gold medals, contribute to the
companys success.
2005

Sale of Salomon

The Salomon Group (including Salomon, Mavic, Bonfire, Clich and ArcTeryx) is being sold to Amer
Sports in October 2005. The new adidas Group is focusing even more on its core strength in the athletic
footwear and apparel market as well as the growing golf category. The legal name of the company will
change to adidas AG in May/June 2006.

2006

adidas-Salomon AG acquires Reebok

The closing of the Reebok transaction on January 31, 2006 marks a new chapter in the history of the
adidas Group. By combining two of the most respected and well-known brands in the worldwide
sporting goods industry, the new Group will benefit from a more competitive worldwide platform, well-
defined and complementary brand identities, a wider range of products, and a stronger presence across
teams, athletes, events and leagues.

What We Do
For over 80 years the adidas Group has been part of the world of sports on every level, delivering state-
of-the-art sports footwear, apparel and accessories. Today, the adidas Group is a global leader in the
sporting goods industry and offers a broad portfolio of products. Products from the adidas Group are
available in virtually every country of the world. Our strategy is simple: continuously strengthen our
brands and products to improve our competitive position and financial performance.

adidas
Footwear, apparel, accessories

Reebok
Footwear, apparel and accessories
TaylorMade-adidasGolf
Golf Equipment: metalwoods, irons putters, golf balls, footwear, apparel and accessories

Rockport
Dress, casual and outdoor footwear, apparel and accessories

CCM-Hockey
Hockey equipment and apparel

Activities of the company and its around 170 subsidiaries are directed from the Group's headquarters in
Herzogenaurach, Germany. It is also home to the adidas brand. Reebok Headquarters are located in
Canton, Massachusetts. TaylorMade-adidas Golf is based in California. The company also
operates creation centres and development departments at other locations around the world,
corresponding to the related business activity.

adidas Sourcing Ltd., a fully-owned subsidiary headquartered in Hong Kong, is the worldwide sourcing
agent for the adidas Group.
Effective December 31, 2010, the adidas Group employed 42,541 people.

Our Mission
The adidas Group strives to be the global leader in the sporting goods industry with brands built on a
passion for sports and a sporting lifestyle.

We are committed to continuously strengthening our brands and products to improve our competitive
position.

We are innovation and design leaders who seek to help athletes of all skill levels achieve peak
performance with every product we bring to market.

We are consumer focused and therefore we continuously improve the quality, look, feel and image of
our products and our organisational structures to match and exceed consumer expectations and to
provide them with the highest value.

We are a global organisation that is socially and environmentally responsible, that embraces creativity
and diversity and is financially rewarding for our employees and shareholders.

We are dedicated to consistently delivering outstanding financial results.

Strategy
Our goal as a Group is to lead the sporting goods industry with brands built upon a passion for sports
and a sporting lifestyle. Inspired by our heritage, we know that a profound understanding of the
consumer and customer is essential to achieving this goal. To anticipate and respond to their needs, we
continuously strive to create a culture of innovation, challenging ourselves to break with convention and
embrace change. By harnessing this culture, we push the boundaries of products, services and processes
to strengthen our competitiveness and maximise the Groups operational and financial performance.
This, in turn, will drive long-term value creation for our shareholders.

Creating shareholder value

Creating value for our shareholders through significant cash flow generation drives our overall decision-
making process. Therefore, we are focused on rigorously managing those factors under our control,
making strategic choices that will drive sustainable revenue and earnings growth, and ultimately cash
flow. For each of our segments, we pursue the avenues for growth which we expect to be most value-
enhancing, with particular emphasis on improving profitability. In addition, rigorously managing
working capital and optimising our capital structure remain key priorities for us. As always, we are
committed to increasing returns to shareholders with above-industry-average share price performance
and dividends.

Presentation of Route 2015

In November 2010, the Group unveiled its 2015 strategic business plan named "Route 2015". This plan
is the most comprehensive the adidas Group has ever prepared, incorporating all brands, sales channels
and Group functions globally.
Based on our strong brands, premium products, extensive global presence and our commitment to
innovation and the consumer, we aspire to outperform total market growth (both GDP and sporting
goods market) and to grow our bottom line faster than our top line. In addition, the Group plans to lay
the foundation for leadership in the sporting goods industry by outgrowing our major competitor over
the next five years. The plan aims at growing the revenues of the adidas Group by 45% to 50%
currency-neutral from 2010 to 2015. In addition, the Group targets a compounded annual earnings
growth rate of 15% and aims to reach an operating margin of 11% sustainably by 2015 at the latest.

Diverse brand portfolio

Consumers want choice. Whether it is the athlete looking for the best possible equipment, or the casual
consumer searching for the next fashion trend, we are inspired to develop and create experiences that
engage consumers in long-lasting relationships with our brands. To maximise our consumer reach, we
have embraced a multi-brand strategy.
This approach allows us to tackle opportunities from several perspectives, as both a mass and a niche
player, providing distinct and relevant products to a wide spectrum of consumers. In this way, each
brand is able to keep a unique identity and focus on its core competencies, while simultaneously
providing our Group with a broad product offering, increasing our leverage in the marketplace.

Investments focused on highest-potential markets and channels

As a Group, we target leading market positions in all markets where we compete. However, we have
prioritised our investments based on those markets which offer the best medium- to long-term growth
and profitability opportunities. In this respect, we continue to place a considerable emphasis on
expanding our activities in the emerging markets, particularly China and Russia, as well as building
market share in underpenetrated markets such as the United States.
No matter in which market we operate, we recognise that consumer buying behaviour and the retail
landscape are unique. Therefore, to fully exploit market opportunities, we tailor our distribution strategy
to present our brands to the consumer in the most impactful way. This is achieved by following a
distinctive but coordinated channel approach. To this end, we strive to provide our customers with
superior service to secure prime shelf space for our brands, while continuing our commitment to
building a strategic competency in own retail and e-commerce.

Creating a flexible supply chain

Speed and agility are key to outpacing the competition. We are committed to meeting the full range of
customer and consumer needs by ensuring product availability in the correct size and colour, providing
game-changing technical innovations and also the latest high-end fashion product to the highest quality
standards. A key strategic priority is to shorten creation and production lead times by continuously
improving our infrastructure, processes and systems. By sharing information from point of sale to source
and vice versa, we strive to connect and more closely integrate the various elements of our supply chain,
to enable quick reaction to changing consumer trends. To this end, we focus on building maximum
flexibility. While leveraging the efficiency of common infrastructure and processes, the Group strives to
provide tailored solutions for all our business models, be it the wholesale or retail channels, or the
performance-oriented or style-oriented businesses.

Leading through innovation

Everyone in the adidas Group is responsible for driving innovation. Therefore, we foster a culture of
challenging convention and embracing change, and require all areas of the Group to generate at least one
new meaningful innovative improvement per year. In particular, we believe that technological evolution
and cutting-edge design in our products are essential to achieving sustainable leadership in our industry.
Beyond this, enhancing services for our customers and implementing more efficient and effective
internal processes are other areas where our organisation strives to innovate.

Develop a team grounded in our heritage

Our culture is continuously shaped by influences from the past and the present as well as our future
aspirations. We perpetuate our founders commitment to the athlete/consumer, pride in what we do,
quality and love of sport. We win as a team through open communication, collaboration and our shared
values found in sport. Therefore, we foster a corporate culture of performance, passion, integrity and
diversity by creating a work environment that stimulates innovation, team spirit, and achievement based
on strong leadership and employee engagement.

Becoming a sustainable company

Like any global business, the adidas Group must manage wide-ranging commercial and competitive
pressure to deliver increased financial returns and growth. At the same time, we are accountable for our
employees and have a responsibility towards the workers in our suppliers factories and also for the
environment. We are committed to striking the balance between shareholder interests and the needs and
concerns of employees and workers and the environment, or, in short, to becoming a sustainable
company. We report publicly on the steps we take to have a more positive impact on society and the
planet.

Supervisory Board
The Supervisory Board of adidas AG - in accordance with the German Co-Determination Act
(Mitbestimmungsgesetz - MitBestG) is composed of twelve members, of which six members are elected
by the Annual General Meeting and six members are elected by the employees.

The core functions of the Supervisory Board include the appointment and dismissal of Executive Board
members, the supervision and consultancy of the Executive Board, the approval of the financial
statements as well as the authorisation of important operative planning and corporate decisions.

The term in office of all members of the Supervisory Board started with the end of the Annual General
Meeting of adidas AG on May 7, 2009. By rotation, the next Supervisory Board elections will be held in
2014.

For further information on the Supervisory Board members, please see our overview below.

MEMBERS OF THE SUPERVISORY BOARD

Igor Landau

Chairman

Born:

1944

Nationality:

French

Exercised Profession:

Former Chief Executive Officer of Aventis S.A., Paris, France

read more

Sabine Bauer*

Deputy Chairwoman

Born:

1963

Nationality:

German

Exercised Profession:

Chairwoman of the Central Works Council,

adidas AG

WilliSchwerdtle

Deputy Chairman
Born:

1953

Nationality:

German

Exercised Profession:

Management Consultant, Hofheimam Taunus, Germany

read more

Dieter Hauenstein*

Born:

1957

Nationality:

German

Exercised Profession:

Member of the Works Council Herzogenaurach, adidas AG

Dr. Wolfgang Jger*

Born:

1954

Nationality:

German

Exercised Profession:

Managing Director, Hans-Bckler-Stiftung, Dsseldorf, Germany

Dr. Stefan Jentzsch

Born:

1960
Nationality:

German

Exercised Profession:

Partner, Perella Weinberg Partners UK LLP, London, Great Britain

read more

Herbert Kauffmann

Born:

1951

Nationality:

German

Exercised Profession:

Management Consultant, Stuttgart, Germany

read more

Roland Nosko*

Born:

1958

Nationality:

German

Exercised Profession:

Trade Union Official, IG BCE, Headquarters Nuremberg, Nuremberg, Germany

read more

Alexander Popov

Born:

1971
Nationality:

Russian

Exercised Profession:

Chairman, RFSO "Lokomotiv", Moscow, Russia

Hans Ruprecht*

Born:

1954

Nationality:

German

Exercised Profession:

Sales Director Customer Service, Central, adidas AG

Heidi Thaler-Veh*

Born:

1962

Nationality:

German

Exercised Profession:

Member of the Central Works Council, adidas AG

Christian Tourres

Born:

1938

Nationality:

French

Exercised Profession:
Former Member of the Executive Board of
adidas AG

*Employee representative

ur Executive Board is composed of four members who reflect the diversity and internationality of the
Group. Each member is responsible for a major business area within the Group.

Herbert Hainer - CEO

Born:
1954 in Dingolfing (Bavaria),
Germany

Nationality:
German

read more

Glenn Bennett
Born:
1963 in New Hampshire, U.S.A.

Nationality:
American

read more
Robin J. Stalker
Born:
1958 in Palmerston North,
New Zealand

Nationality:
New Zealand

read more

Erich Stamminger
Born:
1957 in Rosenberg/Rgland, Germany

Nationality:
German

read more

How adidasWas Created From Waste Materials To Worlds No.1 Sports Shoes
Manufacturer

How adidasWas Created From Waste Materials To Worlds No.1 Sports Shoes Manufacturer

The success story of adidas is an amazing grass to grace story. From practically scavenging for raw
materials and turning them into valuable footwear, the Dassler family, led by Adi, from the laundry of
their house, created and turned adidas into worlds largest maker of sports goods.

Its a story that will fire you up as entrepreneur, or business manager, knowing that with quality ideas,
focus, perseverance, and determination to succeed, nothing can stand on your way to success.
The creation of adidas can be traced to the early 1900s when AdiDassler started a little shoe-making
business at the back of his mothers wash kitchen in Herzogenaurach, Bavaria, Germany, after returning
from World War I. Though a trained baker, his baking skill however offered him little chance of getting
a job at the time. Therefore, turning to his innate exceptional craftsmanship, he began making shoes.

Because the country was just coming out from war, shoe-making materials were practically unavailable.
To keep his business going therefore, he resorted to using materials from old tires, helmets, army tents,
tank materials, and rucksacks, which he could scavenge. Also, to keep his business going in the face of
poor electricity supply at the time, the innovative and creative Adi built a shoe trimmer and other
equipment powered by a stationary bicycle.

His first shoes were bedroom slippers that had soles made from used tires. However, for his deep love
for sports, he later converted the slippers into distinctive lightweight gymnastics and soccer shoes with
nailed-on cleats. Demands for the shoes rose astronomically, reaching 100 pairs a day in 1926. With the
huge demand, the company was able to build a factory, and Adis brother, Rudi, and his father quit their
jobs to join him, and the business became known as the Dassler Brothers Shoe Factory.

Adi wasnt only an expert shoe-maker; he was also a master marketer, whose goal was not only to sell
his shoes in Germany or Europe, but the whole world. And his major strategy to achieving this goal was
to expose his shoes at the Olympics by persuading athletes to wear them for free and to observe
improvement in their performance.

This was a new marketing strategy which Adi was bringing to the industry, and which shot up his
companys sales after the German team to the 1928 Olympics wore his shoes. In the following Olympics
in Los Angelis, athletes who wore Dassler shoes all won metals, an observation that brought the Dassler
brand name to be synonymous with victory in the minds of athletes.
Then came the 1936 Olympics, an opportunity Adi would never miss to once again show his shoes to
the world and intensify the association with winning that his shoes were impressing on the minds of
athletes worldwide.

When the Games started, Adi drove to the Olympic village with a suitcase full of spikes and convinced
Jesse Owens, U.S. sprinter, to use Dassler shoes in the competition. With Owens winning four gold
medals running on Dassler shoes, which the world saw, demands from national teams, trainers, and
individual athletes from all over the world for Dassler shoes skyrocketed. The companys sales drove to
200,000 pairs yearly before World War II broke out.

The companys factory was commandeered by German forces to produce boots for its soldiers during
the war. When the war ended, Adi and his brother were again to start scavenging for materials to use in
rebuilding their shoe making business. They cleverly made use of materials from old American tank as
soles and army tents as canvas.

Not long after, a bitter quarrel broke out between Adi and Rudi, which led to their separation in 1948,
with Rudi going ahead to set up a competing shoe-making business, Puma, which he initially called
Ruda. With the brothers agreeing that neither of them should use the Dassler brand name, Adi initially
named his Addas before changing it to adidas.

Both companies prospered to become global businesses, however under the leadership of the brilliant,
innovative, creative, and marketing genius Adi, adidas grew in the mid 1900s to become the worlds
largest and fastest selling sports shoes manufacturer.

Adidas led the global industry for two principal reasons: Adis ability to continually create high quality
and innovative shoes that kept its competitors far behind, and his profound marketing savvy.

Some of his landmark inventions included, the first shoes designed for ice, and the first multi-studded
shoes; his improvement on soccer boot. For decades before 1957, the design of soccer boots was such
that they had metal studs mounted in leather. This made them heavy, especially when they are wet. But
Adi changed that. His design used nylon sole and molded rubber studs, which resulted in light, and
durable shoes, which was launched in 1957. Not long, rival shoe manufacturer, including Puma began
copying the innovation.

Another remarkable innovation Adi brought to the industry that took adidas to the worlds number one
position was the launch of its screw-studded soccer shoe, which enabled players to change worn out
cleats or replace cleats with longer or shorter types depending on the nature of the pitch they are playing.
This helped the German national football team to defeat the more favored Hungarian side by 3-2 on a
wet, muddy pitch, at the World Soccer Championship in Bern, Switzerland in 1954.

Following this triumph that was facilitated by the innovative soccer boot, the demand for it soared
about 2000 pairs were demanded daily.

Then came the invention Adi declared was his best contribution to the game of soccer. At 77 years in
1978, Adi, recognizing that players spend about 90 percent of their time on the pitch running, rather than
kicking the ball, invented an ultralight soccer boot with sole like sprint shoe. The boot also had
orthopedic footbed, and wider positioning of the studs to enable better traction. Since the FIFA World
Cup was holding in Argentina that year, the boot was also designed to counter the weight-increasing
effects of the humid Argentine climate. At that World Cup where it was first used, almost all the
participating teams wore it.

Adi is also credited for been the first to introduce the practice of selling branded sports bags and
clothing, which is now a common practice with athletic shoe manufacturers.

The companys excellent marketing strategies well complemented its innovative product creation.
Following its strategy of using the Olympic Games to expose its shoes to global audience, adidas, in the
1956 Olympic Games gave away its shoes to competing athletes for free, and at the end of the Games,
athletes who wore adidas shoes won a massive 72 medals and broke 33 records. Seeing this, sports
teams from all over the world wanted to wear adidas.

At the 1964 Olympics in Tokyo, athletes who wore adidas-shod cleared 80 percent of the total medal.
With athletes wearing adidas shoes winning medals upon medals at the Olympics, and other major world
Games and sports, adidas became and remained number one throughout the 1950s, 60s, and 70s the
world over.

The brand entered and took over the leadership of the U.S. athletic shoe market in the 1950s; and
expanded globally in the 1960s and 70s. As the 1970s closes, adidas was selling about 200,000 pairs of
its shoes per day in over 150 countries, with 24 factories in 17 countries. The companys other product
lines, including jerseys, track suits, balls, shorts, and athletic bags were equally leaders in their niches.

However, with Adis death later in 1978, shortly after his ultralight soccer shoe invention, the fortunes
of adidas started nose-diving, no thanks to the weak management team that took over the rein of the
company. Adidas management team, which consisted mainly of Adis relations, did not have the
creativity, innovativeness, marketing skill, and determination to continue leading the industry. And with
the strong and aggressive marketing strategies from competitors, such as Nike Inc. and Reebok Inc.
mounting, the company found itself lagging behind.

To compound adidass problem, family members started fighting over control of the company, causing it
to lose more grounds to its competitors, as well as recording financial losses before they sold it for just
$289 million in 1989 to a French businessman and politician Bernard Tapie.
Tapie sold the company in 1993 to a group of European investors for $371 million. The new owners
implemented a number of severe cost-cutting and reorganization strategies, including moving production
to Asia, and increasing marketing budget to 11 percent from 6 to increase brand visibility.

The changes produced positive result for adidas, with profit gradually climbing back from DM 117.3
million in 1994 to DM 244.9 million in 1995. From there, adidas began bouncing back to catch up on
lost grounds. The company equipped 6,000 athletes from 33 countries to the 1996 Olympics. And at the
end of the Games athletes who used adidas won 70 gold and a total of 220 medals.

By sponsoring certain world sports tournaments, including the 1998 Soccer World Cup, and the
Womens World Cup in 1999,adidas achieved high global visibility, which it will equally get later this
year as the official apparel sponsor of the 2010 FIFA World Cup in South Africa. And by making
certain strategic acquisitions, such as the purchase of the Salomon Group in 1997, and Reebok in 2006,
adidas was set to compete favorably and regain its number one position in the years to come.

adidas Business Strategies

The success story of adidas throws up valuable strategies and keys to business success for business
managers and entrepreneurs to use for their business.

Here they are:

Starting Business With Little Or Nothing

With knowledge of what to do, the right attitude, focus, determination to succeed and creativity, you can
start a business with little or no money. You will be able to discover free or almost free resources you
never thought existed.

Adi didnt have the needed materials to make shoes from, or the electricity to produce his products, but
he never allowed that challenge to stop him. With the right attitude he scavenged for materials and
creatively made footwear of high value from them.

Marketing Skill Is Needed

To succeed in business does not stop at knowing how to create high quality products, knowing how to
sell them is equally important, if not more. Without the ability to sell, your income is stunted, and your
business suffers you need good cash flow to your business for it to be vibrant. To ensure this, you
should learn marketing, and continue to find effective strategies to market and sell your products.

Adis success in taking adidas to the top of the industry globally is attributed in no small measure to his
marketing genius, which enabled him to create innovative marketing campaigns repeatedly.

Continuing To Be Creative And Innovative

To be able to beat the competition and remain top in your industry, you cannot afford not to keep been
creative and innovative in your business. With such character, you will always be ahead of the
competition.

adidas domination of the global sports shoes industry in the 1950s, 60s, and 70s, was the high creativity
and innovation in product creation and marketing that it continually churned out.

Market Penetration Strategy

To get into a market newly, an effective strategy you can use is to give out your product for free to some
of your target customers for them to sample or test it. This allows you to prove to them what you believe
your product will do for its users, and for them to compare it with what is obtainable in the industry and
see which is better. This strategy is cheaper and more effective than trying to force your product down
their throat using advertising.
This was the strategy that Adi employed, and which worked like magic. Seeing Jesse Owens run and
clinch four gold medals at the 1936 Olympic Games on adidas shoes was enough to make every athlete
the world over want to wear it too.

Establish Solid Succession

If you are the owner of your business, you should begin to lay a solid foundation for the business to
continue running even after you are no longer there as soon as the business takes shape. It is not wise to
put family members who are unqualified and unmotivated in management positions; they will definitely
ruin the business. Instead, employ qualified and result-oriented professional managers to run it. With a
management system in place, you can be rest assured that the business will continue running after you
may have gone to the great beyond.

adidas fell from its glory in the 1980s after the death of its founder, Adi, as a result of his family
members in management positions fighting over the control of the business. Perhaps the business would
have since died also if it hadnt been sold and managed by professional managers.

Cutting Costs

To be able to compete effectively, especially in an industry where competition is high, you really need
to watch and find ways to cut your costs. If your competitors are selling at lower price and still keep
their quality than you because they have found a way to produce at lower cost, you will be losing your
market share in no time.

Cutting your costs does not only enable you to sell at competitive price, it also allows you to make good
profit, and be healthy.

Part of the strategies that brought adidas out of the woods was its new managements cost cutting
program, which included moving their production to Asia where costs were less.