adidas-Salomon 2003 results:

adidas-Salomon 2003 results:
Net Income Rises 14% to euro 260 Million Currency-neutral Sales Up 5% 


HERZOGENAURACH, Germany, March 10  /PRNewswire-FirstCall/ -- 

   * Gross margin of 44.9%; highest ever
   * Income before taxes grows 12%
   * Net borrowings reduced by euro 552 million; financial leverage of 70%
     lowest since the acquisition of Salomon and TaylorMade
   * Key performance metrics expected to improve further in 2004

  Currency-neutral sales up 5% in 2003


In 2003, currency-neutral sales for the adidas-Salomon Group grew 5%. In euro
terms, sales declined 4% to reach euro 6.267 billion in 2003 from euro 6.523
billion in 2002.

Brand adidas leads segment growth in 2003

From a brand perspective, adidas posted the most substantialgains with sales up
5% on a currency-neutral basis. Primary contributors to this growth were the
Sport Performance running and training categories. Salomon sales were up 2% on a
currency-neutral basis, mainly as a result of higher sales of Mavic cycling
components, outdoor footwear and Salomon apparel. TaylorMade-adidas Golf sales
grew 4% on a currency-neutral basis. Strong increases in the TaylorMade iron and
putter categories as well as at adidas Golf more than offset the negative sales
effect fromthe non-renewal of a licensing and distribution agreement with
Slazenger Golf at the end of 2002 as well as lower metalwood and golf ball
sales. Currency effects from a strong euro, especially versus the US dollar,
negatively impacted sales in euro terms. At brand adidas, sales in euro terms
declined 3% to euro 4.950 billion in 2003 from euro 5.105 billion in 2002.
Salomon sales in euros were down 4% to euro 658 million from euro 684 million in
the prior year, and TaylorMade-adidas Golf sales in euroterms declined by 10%
to euro 637 million from euro 707 million in 2002.

                   2002            2003     Change y-o-y     Change y-o-y
                  euro in         euro in   in euro terms   currency-neutral
                 millions  millions        in %              in %
   adidas          5,105           4,950          (3)                5
   Salomon           684             658          (4)                2
   TaylorMade-
    adidas Golf      707             637         (10)                4
   Total           6,523           6,267          (4)                5

  adidas-Salomon sales by brand in 2003, "Total" includes HQ/Consolidation


  Currency-neutral sales growth in all regions except North America


On a regional basis, currency-neutral sales for adidas-Salomon in Europe grew
8%. The major drivers of this growth were strong increases in Italy and the UK
as well as continued solid performance in France and the emerging markets. In
North America, Group sales declined 6% on a currency-neutral basis, reflecting a
weakness in demand for most adidas product lines. In Asia, sales increased 7% on
a currency-neutral basis driven by stronger sales in Japan, China and India.
Latin America was the fastest growing region for the Group in 2003 with
currency-neutral sales up 35%, reflecting particularly strong performance in
Brazil and Argentina. Once again, the strong euro negatively impacted sales in
euro terms. Sales in euros for adidas-Salomon in Europe increased 5% toeuro
3.365 billion in 2003 from euro 3.200 billion in 2002. In North America, sales
in euros declined 20% to euro 1.562 billion in 2003 versus euro 1.960 billion in
the prior year. In euro terms, sales in Asia were down 4% to euro 1.116 billion
from euro 1.166 billion in 2002, and in Latin America sales in euros grew 10% to
reach euro 179 million in 2003 versus euro 163 million in 2002.

                   2002            2003     Change y-o-y     Change y-o-y
                  euro in         euro in   in euro terms   currency-neutral
                 millions        millions        in %              in %
   Europe          3,200           3,365           5                 8
   North America   1,960           1,562         (20)               (6)
 Asia            1,166           1,116          (4)                7
   Latin America     163             179          10                35
   Total           6,523           6,267          (4)                5

  adidas-Salomon sales by region in 2003, "Total" includes HQ/Consolidation


  Group gross margin at record level of 44.9%


The adidas-Salomon gross margin grew 1.7 percentage points to 44.9% of sales in
2003, up from 43.2% in 2002. This is the highest level ever and reflects the
impact of increased adidas own-retail activities, an improving product mix and
the stronger euro. As a result of this development, the Group's gross profit
remained virtually unchanged at euro 2.814 billion versus euro 2.819 billion in
2002 despite lower sales ineuro terms.

Operating expenses reduced

Operating expenses, including selling, general and administrative expenses
(SG&A) and depreciation and amortization (without goodwill), declined by 1% to
euro 2.324 billion in 2003 from euro 2.343 billion in 2002. As a percentage of
sales, however, operating expenses increased 1.2 percentage points to 37.1% in
2003 (2002: 35.9%). The main contributors to this increase were the continued
expansion of own-retail activities and the extension of promotion and
advertising contracts with renegotiated conditions. As a result of these
developments, operating profit for the Group increased 3% to euro 490 million in
2003 from euro 477 million in 2002 and operating margin increased 0.5 percentage
points to 7.8% in 2003from 7.3% in 2002.

Income before taxes increases 12%

Income before taxes grew 12% to euro 438 million in 2003, compared to euro 390
million in the prior year. Operational progress was enhanced by significantly
lower financial expenses which declined 44%. Lower average debt levels and
interest rates contributed to the better result. In addition, financial expenses
in 2002 included non-recurring negative currency effects from devaluations of
foreign currencies in Brazil, Turkey and Argentina. These were not repeated in
2003.

Net income grows 14% to highest ever level

Net income increased by 14% to a record level of euro 260 million in 2003 from
euro 229 million in 2002. Basic and diluted earnings per share, both at euro
5.72 in comparison to euro5.04 in 2002, were at the upper end of the Group's
targeted earnings range. Minority interests, which declined by 17%, and a fairly
stable tax rate at 38.0% (2002: 37.9%) supported the Group's favorable net
income level.

adidas-Salomon Chairman and CEO Herbert Hainer stated: "Despite tough market
conditions due to global uncertainties and exchange rate differentials, which
widened throughout the year, our financials clearly indicate that we have made
major headway in the past twelve months. We grew our currency- neutral sales in
2003 by 5%, delivered a record gross margin and posted our highest earnings
ever. These achievements reflect our Group's commitment and ability to
continuously deliver high-quality financial performance."

Net borrowings reduced by euro 552 million

Net borrowings at December 31, 2003 were euro 946 million, down 37% or euro 552
million versus euro 1.498 billion at the end of the prior year. This represents
the largest reduction in the Group's history, supported by continued strict
working capital management. In addition, positive currency effects and the
equity increase related to the Group's convertible bond issue positively
impacted net borrowings. As a consequence, the Group's financial leverage
improved 69 percentage points to 70% in 2003 versus 139% in the prior year.

Successful working capital management continues

As a result of focused working capital reduction initiatives undertaken
throughout 2003, inventories were reduced by 2% to euro 1.164 billion in 2003
from euro 1.190 billion in 2002 with improvements at all brands within the
Group. On a currency-neutral basis, inventories increased 5%, which is in line
with sales growth expectations for 2004. Receivables were reduced by 17% to euro
1.075 billion versus euro 1.293 billion in the prior year. On a currency-
neutral basis, the decline was 10% reflecting strict discipline in the Group's
trade terms management as well as concerted collection efforts at all brands. In
addition, year-end receivables development was positively impacted by lower
fourth quarter revenues in North America compared to the particularly strong
sales in the region during the same period in the prior year.

Recommended dividend of euro 1.00 per share

The adidas-Salomon Executive and Supervisory Boards will recommend a dividend of
euro 1.00 per share for the 2003 fiscal year at the Annual General Meeting on
May 13, 2004. With a total payout of over euro 45 million the proposal
represents a payout ratio of 17% of net income and reflects adidas- Salomon's
continued commitment to improve the Group's financial position while also
creating substantial value for the shareholders. This proposal is in line with
the Group's dividend policy, which recommends a payout ratio of between15 and
20% of consolidated net income.

Fourth quarter sales at euro 1.354 billion currency-neutral

In the fourth quarter of 2003, adidas-Salomon sales declined by 4% on a
currency-neutral basis mainly as a result of unfavorable comparisons with the
prior year period, where sales in North America and at TaylorMade-adidas Golf
were particularly strong. In euro terms, sales decreased 10% to euro 1.354
billion in 2003 from euro 1.511 billion in 2002. Gross margin increased 5.4
percentage points versus the prior year to 47.8% of sales (2002: 42.5%). Fourth
quarter operating profit decreased 37% to euro 42 million in 2003 from euro 66
million in 2002. Net income reached euro 27 million. This equates to basic
earnings per share of euro 0.58 and represents a decrease of 9% versus the prior
year (2002: euro 29 million or euro 0.64 per share).

Year-end order backlogs reflect mixed development

adidas currency-neutral order backlogs at the end of 2003 grew 2% versus the
prior year. This increase was mainly driven by apparel backlog growth of 13%
which represents the highest apparel order increase in more than four years and
highlights the strength of the adidas "Apparel Breakthrough" initiative.
Footwear orders declined 7%, reflecting weakness in NorthAmerica due to
declines in all major categories except football. In euro terms, brand adidas
order backlogs declined 5%.

                  Footwear              Apparel            Total
  Change     in euros  currency-   in euros  currency-   in euroscurrency-
   y-o-y                neutral               neutral               neutral
   in %
   Europe          1        4           11        13           6       9
   North America (38)     (26)         (17)       (2)        (31)    (18)
   Asia   (8)       1           28        40           8      18
   Total         (14)      (7)           6        13          (5)      2

  adidas order backlogs by product category and region as at
  December 31, 2003

  Net income growth of at least 10% expected for 2004


Based on early market indications, as well as backlog development and feedback
from retailers, the Group expects currency-neutral sales growth of around 3 to
5% in 2004. Higher sales at key brands, coupled with higher gross marginsand an
improving operating margin, are expected to produce net income growth of at
least 10% versus the prior year.

Herbert Hainer continued: "We are now concentrating all our efforts on
strengthening our position in 2004. The European Football Championships in
Portugal and the Summer Olympics in Athens are events which will enthuse
athletes and consumers the world over. Our products and brands will be center
stage and, propelled by our new "Impossible is Nothing" brand campaign, we are
looking to deliver top- and bottom-line growth in 2004 and beyond."

  Please visit our corporate website: http://www.adidas-salomon.com/


   adidas-Salomon
   CONSOLIDATED INCOME STATEMENT (IFRS)
   4th QUARTER 2003

   euro IN MILLIONS                          2003     2002       Change
                                                               2003/2002

   NET SALES                                1,354    1,511       (10.4)%
   COST OF SALES                              706      869       (18.7)%
   GROSS PROFIT                               648      642          0.9%
      (% OF NET SALES)                      47.8%    42.5%         5.4PP
   SELLING, GENERAL AND ADMINISTRATIVE
    EXPENSES                                  583      548          6.3%
  (% OF NET SALES)                      43.0%    36.3%         6.8PP
   DEPRECIATION AND AMORTIZATION
    (EXCL. GOODWILL)                           23       28       (16.3)%
   OPERATING PROFIT                            42       66       (36.5)%
   (% OF NET SALES)                       3.1%     4.4%       (1.3)PP
   GOODWILL AMORTIZATION                       11       11        (2.5)%
   ROYALTY AND COMMISSION INCOME               11       12        (9.3)%
   FINANCIAL EXPENSES, NET           5       18       (72.1)%
   INCOME BEFORE TAXES AND MINORITY INTERESTS  37       49       (24.8)%
      (% OF NET SALES)                       2.7%     3.2%       (0.5)PP
   INCOME TAXES                                12       17       (32.3)%
      (% OF INCOME BEFORE TAXES AND
        MINORITY INTERESTS)                 32.1%    35.6%       (3.5)PP
   MINORITY INTERESTS                           2       (2)     (161.9)%
   NET INCOME                                  27       29        (8.8)%
      (% OF NET SALES)                       2.0%     1.9%         0.0PP
   BASIC EARNINGS PER SHARE (IN euros)       0.58     0.64        (8.8)%


   NET SALES
   euro IN MILLIONS                          2003     2002       Change
                2003/2002

   adidas                                     933    1,055       (11.6)%
   Salomon                                    268      260          2.9%
   TaylorMade-adidas Golf                     150191       (21.5)%

   EUROPE                                     688      660          4.4%
   NORTH AMERICA                              313      477       (34.4)%
   ASIA                                       299      325        (8.1)%
   LATIN AMERICA                               48       42         14.7%



ROUNDING DIFFERENCES MAY ARISE IN PERCENTAGES AND TOTALS FOR FIGURES PRESENTED
IN MILLIONS AS CALCULATION IS ALWAYS BASED ON THE FIGURES STATED IN THOUSANDS.

   adidas-Salomon
   CONSOLIDATED INCOME STATEMENT (IFRS)
   YEAR ENDED DECEMBER 31, 2003

   euro IN MILLIONS                          2003     2002       Change
                                                               2003/2002

   NET SALES                               6,267    6,523        (3.9)%
   COST OF SALES                            3,453    3,704        (6.8)%
   GROSS PROFIT                             2,814    2,819        (0.2)%
      (% OF NET SALES)                      44.9%    43.2%         1.7PP
   SELLING, GENERAL AND ADMINISTRATIVE
    EXPENSES                                2,228    2,245        (0.8)%
      (% OF NET SALES)                      35.6%    34.4%         1.1PP
   DEPRECIATION AND AMORTIZATION
    (EXCL. GOODWILL)                   96       97        (1.7)%
   OPERATING PROFIT                           490      477          2.8%
      (% OF NET SALES)                       7.8%     7.3%         0.5PP
   GOODWILL AMORTIZATION                       45       45        (1.3)%
ROYALTY AND COMMISSION INCOME               42       46        (8.4)%
   FINANCIAL EXPENSES, NET                     49       87       (43.6)%
   INCOME BEFORE TAXES AND MINORITY INTERESTS 438      390         12.3%
      (% OF NET SALES)            7.0%     6.0%         1.0PP
   INCOME TAXES                               167      148         12.7%
      (% OF INCOME BEFORE TAXES AND
        MINORITY INTERESTS)                 38.0%    37.9%         0.1PP
   MINORITY INTERESTS           (11)     (14)      (16.7)%
   NET INCOME                                 260      229         13.8%
      (% OF NET SALES)                       4.2%     3.5%         0.6PP
   BASIC EARNINGS PER SHARE (IN euros)       5.72     5.04        13.6%


   NET SALES
   euro IN MILLIONS                          2003     2002       Change
                                                               2003/2002

   adidas                                   4,950    5,105        (3.0)%
   Salomon  658      684        (3.8)%
   TaylorMade-adidas Golf                     637      707       (10.0)%

   EUROPE                                   3,365    3,200          5.2%
   NORTH AMERICA                            1,562    1,960       (20.3)%
   ASIA                                     1,116    1,166        (4.3)%
   LATIN AMERICA                              179      163          9.9%



ROUNDING DIFFERENCES MAY ARISE IN PERCENTAGES AND TOTALS FOR FIGURES PRESENTED
IN MILLIONS AS CALCULATION IS ALWAYS BASED ON THE FIGURES STATED IN THOUSANDS.

   adidas-Salomon
   CONSOLIDATED BALANCE SHEET (IFRS)

  euro IN MILLIONS                     Dec. 31         Dec. 31      Change
                                       2003            2002

  CASH AND CASH EQUIVALENTS               190              67         180.9%
  SHORT-TERM FINANCIAL ASSETS              89               9         951.8%
  ACCOUNTS RECEIVABLE                   1,075           1,293        (16.8)%
  INVENTORIES                           1,164           1,190         (2.2)%
  OTHER CURRENT ASSETS                    259             267         (3.0)%
  TOTAL CURRENT ASSETS                  2,777           2,826         (1.7)%

  PROPERTY, PLANT AND EQUIPMENT, NET      345             366         (5.8)%
  GOODWILL, NET                           591             639         (7.5)%
  OTHER INTANGIBLE ASSETS, NET            104             115        (10.1)%
  LONG-TERM FINANCIAL ASSETS             88              87           1.1%
  DEFERRED TAX ASSETS                     178             170           5.2%
  OTHER NON-CURRENT ASSETS                105              58          81.4%
  TOTAL NON-CURRENT ASSETS              1,411           1,435  (1.7)%

  TOTAL ASSETS                          4,188           4,261         (1.7)%

  ACCOUNTS PAYABLE                        592             668        (11.4)%
  INCOME TAXES                            158             112          40.3%
  ACCRUED LIABILITIES AND PROVISIONS      455             451           0.8%
  OTHER CURRENT LIABILITIES               139             149         (6.6)%
  TOTAL CURRENT LIABILITIES             1,344           1,381         (2.7)%

  LONG-TERM BORROWINGS     1,225           1,574        (22.2)%
  PENSIONS AND SIMILAR OBLIGATIONS        105              99           6.4%
  DEFERRED TAX LIABILITIES                 66              51          28.0%
  OTHER NON-CURRENT LIABILITIES            35    19          86.6%
  TOTAL NON-CURRENT LIABILITIES         1,432           1,743        (17.9)%

  MINORITY INTERESTS                       57              56           1.9%
  SHAREHOLDERS' EQUITY                  1,356           1,081         25.4%

  TOTAL LIABILITIES, MINORITY
   INTERESTS AND SHAREHOLDERS' EQUITY   4,188           4,261         (1.7)%

  ADDITIONAL BALANCE SHEET INFORMATION
  OPERATION WORKING CAPITAL             1,646           1,814         (9.2)%
  WORKING CAPITAL    1,433           1,445         (0.8)%
  NET TOTAL BORROWINGS                    946           1,498        (36.8)%
  FINANCIAL LEVERAGE                    69.8%          138.5%



ROUNDING DIFFERENCES MAY ARISE IN PERCENTAGES AND TOTALS FOR FIGURES PRESENTED
IN MILLIONS AS CALCULATION IS ALWAYS BASED ON THE FIGURES STATED IN THOUSANDS. 

DATASOURCE: adidas-Salomon



CONTACT:  Media, Jan Runau, Head of Corporate PR, [phone], Anne

Putz, Corporate PR Manager, [phone]; or Investors, Natalie M. Knight,

Head of Investor Relations, [phone], Dr. Charlotte Brigitte Loos,

Investor Relations Manager, [phone], or Hendric Junker, Investor

Relations Manager, [phone], all of adidas-Salomon; or U.S. Media

Relations, Doug Donsky of Edelman Financial, [phone], for

adidas-Salomon



Web site:  http://www.adidas-salomon.com/ 

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