adidas-Salomon 2004 First Nine Months Results:

adidas-Salomon 2004 First Nine Months Results:
Net income rises 26%







HERZOGENAURACH, Germany, Nov. 3  /PRNewswire-FirstCall/ -- Third quarter
currency-neutral sales grow 9%

Third quarter net sales for the Group increased 9% on a currency-neutral basis
with improvements coming from all brands and regions. This represents growth of
5% in euro terms to euro 1.953 billion in 2004 from euro 1.853 billion in the
third quarter of 2003. Gross margin improved 2.8 percentage points to 47.8% of
sales from 45.0% in the prior year. Third quarter operating profit grew 16% to
euro 313 million in 2004 from euro 270 million in the prior year. Net income
was up 19% reaching euro 179 million versus euro 150 million in 2003. This
equates to basic earnings per share of euro 3.92 and represents an increase of
18% versus the prior year (2003: euro 3.31 per share).

First nine months Group sales up 6% on a currency-neutral basis

Currency-neutral sales for the Group rose 6% in the first nine months of 2004.
In euro terms, revenues increased 3% to euro 5.044 billion in 2004 from euro
4.913 billion in the first nine months of 2003.

"The first nine months of 2004 have been exceptionally successful for
adidas-Salomon - financially and operationally," commented adidas-Salomon
Chairman and CEO Herbert Hainer. "We've delivered an impressive turnaround in
the key region North America, we are on track with our raised performance
targets for the year, and we were the dominant brand at the Olympic Games in
Athens and the European Football Championships in Portugal."

adidas leads top-line growth in the first nine months

Sales growth at adidas set the pace for Group performance in the first nine
months of 2004. Currency-neutral adidas revenues rose 7%. The success of the
football category as well as the "Apparel Breakthrough" initiative was the
major contributor to this development. At Salomon, revenues grew by 5% on a
currency-neutral basis during the first nine months of 2004, mainly driven by
positive developments in the apparel, cycling and nordic categories. Revenues
for TaylorMade-adidas Golf increased 4% on a currency-neutral basis driven by
growth in the metalwoods category, in particular relating to the success of the
new r7 Quad driver. The putter and apparel categories also reported strong
growth. Currency effects from a strong euro, especially versus the US dollar,
negatively impacted sales at all brands in euro terms. As a result, adidas
sales in euro terms were up 3% to euro 4.155 billion in the first nine months
of 2004 from euro 4.017 billion in the same period of 2003. Salomon sales in
euro terms were up 2% to euro 399 million in the first nine months of 2004 from
euro 390 million in the prior year. TaylorMade-adidas Golf sales in euro terms
declined 2% to euro 477 million in 2004 from euro 487 million in 2003.

                    Nine months  Nine months  Change y-o-y  Change y-o-y
                       2003         2004      in euro terms currency-neutral
                       euro         euro           in %          in %
                    in millions  in millions
  adidas               4,017        4,155            3            7
  Salomon                390          399            2            5
  TaylorMade-adidas
   Golf                  487          477           (2)           4
  Total                4,913        5,044            3            6

  adidas-Salomon sales by brand in 2004, "Total" includes HQ/Consolidation

  Positive regional sales development


From a regional perspective, Group sales in Europe grew 4% on a currency-
neutral basis during the first nine months, driven in particular by solid
increases in France, Iberia, the UK and the emerging markets. In North America,
Group sales increased 2% on a currency-neutral basis, mainly due to growth in
the Sport Heritage division and Sport Performance apparel categories. In Asia,
currency-neutral sales increased 16% driven by double- digit growth in Japan
and China. In Latin America, currency-neutral sales increased 35% in the first
nine months, making it the fastest growing region within the Group.
Double-digit sales increases in Argentina, Brazil and Mexico were the main
components of this improvement. In euro terms, currency translation effects
negatively impacted sales in the first nine months in all regions. Sales in
Europe increased 3% in euro terms to euro 2.767 billion in the first nine
months of 2004 from euro 2.677 billion in the prior year. In North America,
sales in euros declined 7% to euro 1.161 billion in 2004 from euro 1.249
billion in 2003. In euro terms, sales in Asia improved 12% to euro 912 million
in 2004 from euro 817 million in 2003. In Latin America, sales in euros grew
26% to euro 164 million in the first nine months of 2004 from euro 130 million
in 2003.

                    Nine months  Nine months  Change y-o-y  Change y-o-y
                       2003         2004      in euro terms currency-neutral
                       euro         euro           in %          in %
                    in millions  in millions
  Europe               2,677        2,767            3            4
  North America        1,249        1,161           (7)           2
  Asia                   817          912           12           16
  Latin America          130          164           26           35
  Total                4,913        5,044            3            6

  adidas-Salomon sales by region in 2004, "Total" includes HQ/Consolidation

  Group gross margin up 3.3 percentage points


adidas-Salomon gross margin grew 3.3 percentage points to 47.4% in the first
nine months of 2004 (2003: 44.1%). This represents the highest first nine
months gross margin in the history of the Group and reflects lower clearance
sales combined with higher clearance margins, the improved product mix as well
as increased adidas own-retail activities. Favorable currency effects due to
the Group's international sourcing structure were also a significant factor in
this development. As a result of the strong gross margin expansion, gross
profit for the Group rose 10% in the first nine months of 2004 to reach euro
2.390 billion versus euro 2.166 billion in 2003.

Operating profit grows 22%

Operating expenses, including selling, general and administrative expenses
(SG&A) and depreciation and amortization (excluding goodwill), increased by 7%
to euro 1.841 billion in the first nine months of 2004 from euro 1.718 billion
in 2003. As a percentage of sales, this equates to 36.5%, which is 1.5
percentage points higher than the 2003 level of 35.0%. This development
reflects increased marketing expenditures for the UEFA EURO 2004(TM) European
Football Championships and the Athens 2004 Olympic Games(TM). Operating
expenses were also impacted by the continued expansion of adidas own-retail
activities as well as higher doubtful debt provisions at TaylorMade-adidas Golf
in the first quarter of this year. Group operating profit increased 22% to euro
549 million in 2004 from euro 448 million in the first nine months of 2003,
reflecting the Group's strong gross margin development in the period.
Similarly, the operating margin grew 1.8 percentage points to 10.9% in the
first nine months of 2004 versus 9.1% in the same period in 2003.

Income before taxes up 24%

As a result of the strong operational improvements during the first nine months
of 2004, the Group's income before taxes grew 24% to euro 499 million from euro
401 million in 2003. Financial expenses increased by 6% to euro 47 million in
2004 from euro 44 million in the first nine months of 2003. This is a result of
positive effects from the valuation of balance sheet items in foreign currency
in 2003 which were not repeated in 2004 and which more than offset the lower
interest expenses in 2004. Goodwill amortization rose 2% during the first nine
months of 2004 to euro 34 million (2003: euro 34 million). Royalty and
commission income increased 2% to euro 32 million in 2004 from euro 31 million
in 2003.

Net income grows 26%

Net income for the Group increased 26% to euro 295 million in the first nine
months of 2004 from euro 234 million in 2003. Solid sales increases, coupled
with the strong gross and operating margins, were the drivers of this
improvement. Minority interests decreased 4% to euro 12 million in 2004 (2003:
euro 13 million). The Group tax rate was unchanged at 38.6%. As a result, basic
earnings per share increased 26% to euro 6.46 for the first nine months of 2004
versus euro 5.14 in 2003.

Working capital development reflects strict discipline in trade terms
management

Group inventories grew 4% to euro 1.134 billion at the end of the first nine
months of 2004 from euro 1.088 billion in 2003. On a currency-neutral basis,
inventories increased 8%, mainly as a result of higher goods in transit to meet
increasing demand in North America and Asia. Receivables at adidas- Salomon
were reduced by 4% to euro 1.398 billion at the end of the first nine months of
2004 versus euro 1.455 billion in the prior year. On a currency- neutral basis,
this represents a decline of 1% and reflects strict discipline in the Group's
trade terms management and concerted collection efforts at all brands.

Net borrowings reduced by euro 510 million

Net borrowings at September 30, 2004 were euro 913 million, down 36% or euro
510 million versus euro 1.423 billion in the prior year. Strong bottom- line
profitability was the primary driver of this improvement. As a consequence, the
Group's financial leverage improved 59 percentage points to 55% at the end of
September 2004 versus 114% on the same date in 2003.

Mixed regional adidas order backlog development at the end of the third quarter

Currency-neutral order backlogs for adidas grew 5% (+2% in euros) at the end of
the third quarter of 2004. Overall apparel orders increased 8% on a
currency-neutral basis, or 5% in euro terms, reflecting the ongoing success of
the "Apparel Breakthrough" initiative. Footwear backlogs grew 3% on a
currency-neutral basis and were stable in euros. From a regional perspective,
in Europe, orders decreased 4% currency-neutral  (-4% in euros). This shortfall
was mainly due to the increasingly difficult retail environment in most major
markets which led to changing order patterns and a more reorder- and
auto-replenishment-oriented business in the region. In North America,
currency-neutral order backlogs were up 6% and remained stable in euro terms.
In Asia, currency-neutral backlogs grew 30% (+23% in euros).

                      Footwear             Apparel              Total
  Change y-o-y
  in %           in euro  currency-   in euro  currency-  in euro  currency-
                          neutral              neutral             neutral
  Europe           (3)      (3)         (6)      (6)        (4)      (4)
  North America     0        6          (1)       5          0        6
  Asia              8       14          44       53         23       30
  Total             0        3           5        8          2        5



adidas order backlogs by product category and region as at September 30, 2004

Raised 2004 full year earnings target confirmed

As a result of the strong year-to-date performance and expectations for the
rest of 2004, adidas-Salomon confirms its improved sales and earnings guidance
as communicated in August. Group revenues are expected to be up by around 5% on
a currency-neutral basis, with double-digit growth in Asia and Latin America
and a mid-single-digit sales increase in Europe. Furthermore, the current sales
and order backlog development at adidas in North America makes the Group
confident that it will reach a currency-neutral sales increase of 3 to 5% in
this region on a full year basis. Group gross margin is projected to clearly
exceed 45% and operating margin will improve by at least one percentage point
versus the prior-year level. As a result of strong performance in the first
nine months of the year, Group earnings for the full year are expected to grow
by around 20%.

2005 Outlook

For the full year of 2005, adidas-Salomon anticipates mid- to high-single-
digit top-line growth. Earnings are expected to improve 10 to 15% over the
projected 2004 level.

Herbert Hainer stated, "Looking at our performance in the first nine months, we
have gained competitive momentum and we are going to keep pushing for the
remainder of this year and beyond. It's already clear that 2005 will be another
great year for adidas-Salomon. Our brands are strong and our market position is
improving. We are stronger and more competitive than we have ever been in the
past."

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


  adidas-Salomon
  CONSOLIDATED INCOME STATEMENT (IFRS)
  3rd QUARTER

  Euro in millions                                 2004     2003      Change
                                                                   2004/2003
  NET SALES                                       1,953    1,853       5.4 %
  COST OF SALES                                   1,019    1,018       0.1 %
  GROSS PROFIT                                      934      835      11.9 %
    (% OF NET SALES)                              47.8%    45.0%      2.8 PP
  SELLING, GENERAL AND ADMINISTRATIVE EXPENSES      597      540      10.6 %
    (% OF NET SALES)                              30.5%    29.1%      1.4 PP
  DEPRECIATION AND AMORTIZATION (EXCL. GOODWILL)     24       25     (1.1) %
  OPERATING PROFIT                                  313      270      15.8 %
    (% OF NET SALES)                              16.0%    14.6%      1.4 PP
  GOODWILL AMORTIZATION                              11       11       1.4 %
  ROYALTY AND COMMISSION INCOME                      11       11       0.8 %
  FINANCIAL EXPENSES, NET                            15       17     (9.1) %
  INCOME BEFORE TAXES AND MINORITY INTERESTS        298      254      17.4 %
    (% OF NET SALES)                              15.2%    13.7%      1.6 PP
  INCOME TAXES                                      113       96      17.3 %
    (% OF INCOME BEFORE TAXES AND MINORITY
      INTERESTS)                                  37.9%    37.9%    (0.0) PP
  MINORITY INTERESTS                                 (6)      (7)   (14.7) %
  NET INCOME                                        179      150      19.0 %
    (% OF NET SALES)                               9.2%     8.1%      1.0 PP
  BASIC EARNINGS PER SHARE (IN EURO)               3.92     3.31      18.4 %
  DILUTED EARNINGS PER SHARE (IN EURO)             3.91     3.31      18.2 %

  NET SALES

   Euro in millions                                2004     2003      Change
                                                                   2004/2003

  adidas                                          1,570    1,475       6.4 %
  Salomon                                           205      199       3.1 %
  TaylorMade-adidas Golf                            176      176     (0.3) %

  EUROPE                                          1,077    1,020       5.6 %
  NORTH AMERICA                                     454      459     (1.1) %
  ASIA                                              346      308      12.6 %
  LATIN AMERICA                                      65       52      25.3 %



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)
  NINE MONTHS ENDING SEPTEMBER 30

  Euro in millions                                 2004     2003      Change
                                                                   2004/2003

  NET SALES                                       5,044    4,913       2.7 %
  COST OF SALES                                   2,654    2,747     (3.4) %
  GROSS PROFIT                                    2,390    2,166      10.3 %
    (% OF NET SALES)                              47.4%    44.1%      3.3 PP
  SELLING, GENERAL AND ADMINISTRATIVE EXPENSES    1,770    1,646       7.5 %
    (% OF NET SALES)                              35.1%    33.5%      1.6 PP
  DEPRECIATION AND AMORTIZATION (EXCL. GOODWILL)     71       72     (1.4) %
  OPERATING PROFIT                                  549      448      22.5 %
    (% OF NET SALES)                              10.9%     9.1%      1.8 PP
  GOODWILL AMORTIZATION                              34       34       1.8 %
  ROYALTY AND COMMISSION INCOME                      32       31       2.1 %
  FINANCIAL EXPENSES, NET                            47       44       5.9 %
  INCOME BEFORE TAXES AND MINORITY INTERESTS        499      401      24.4 %
    (% OF NET SALES)                               9.9%     8.2%      1.7 PP
  INCOME TAXES                                      193      155      24.3 %
    (% OF INCOME BEFORE TAXES AND MINORITY
      INTERESTS)                                  38.6%    38.6%    (0.0) PP
  MINORITY INTERESTS                                (12)     (13)    (4.2) %
  NET INCOME                                        295      234      26.1 %
    (% OF NET SALES)                               5.8%     4.8%      1.1 PP
  BASIC EARNINGS PER SHARE (IN EURO)               6.46     5.14      25.7 %
  DILUTED EARNINGS PER SHARE (IN EURO)             6.46     5.14      25.6 %


  NET SALES

  Euro in millions                                 2004     2003      Change
                                                                   2004/2003

  adidas                                          4,155    4,017       3.4 %
  Salomon                                           399      390       2.4 %
  TaylorMade-adidas Golf                            477      487     (1.9) %

  EUROPE                                          2,767    2,677       3.4 %
  NORTH AMERICA                                   1,161    1,249     (7.1) %
  ASIA                                              912      817      11.6 %
  LATIN AMERICA                                     164      130      26.l %



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 SHEETS (IFRS)

  Euro in millions  September 30 September 30      Change    December 31
                            2004         2003                      2003
  CASH AND CASH EQUIVALENTS  222           62       259.1%          190
  SHORT-TERM FINANCIAL
   ASSETS                    203           12      1612.1%           89
  ACCOUNTS RECEIVABLE      1,398        1,455       (3.9)%        1,075
  INVENTORIES              1,134        1,088         4.2%        1,164
  OTHER CURRENT ASSETS       333          292        14.3%          259
  TOTAL CURRENT ASSETS     3,290        2,908        13.1%        2,777

  PROPERTY, PLANT AND
   EQUIPMENT, NET            354          348         1.9%          345
  GOODWILL, NET              584          604       (3.2)%          591
  OTHER INTANGIBLE ASSETS,
   NET                       100          107       (6.4)%          104
  LONG-TERM FINANCIAL ASSETS  89           89       (0.2)%           88
  DEFERRED TAX ASSETS        189          203       (6.8)%          178
  OTHER NON-CURRENT ASSETS   116           99        16.6%          105
  TOTAL NON-CURRENT ASSETS 1,431        1,449       (1.2)%        1,411

  TOTAL ASSETS             4,721        4,357         8.4%        4,188

  SHORT-TERM BORROWINGS      464           --           --           --
  ACCOUNTS PAYABLE           494          456         8.4%          592
  INCOME TAXES               189          193       (2.0)%          158
  ACCRUED LIABILITIES
   AND PROVISIONS            592          512        15.5%          455
  OTHER CURRENT LIABILITIES  202          184         9.9%          139
  TOTAL CURRENT
   LIABILITIES             1,941        1,345        44.3%        1,344

  LONG-TERM BORROWINGS       874        1,497      (41.6)%        1,225
  PENSIONS AND SIMILAR
   OBLIGATIONS               112          108         3.9%          105
  DEFERRED TAX LIABILITIES    70           61        14.3%           66
  OTHER NON-CURRENT
   LIABILITIES                33           38      (12.5)%           35
  TOTAL NON-CURRENT
   LIABILITIES             1,088        1,703      (36.1)%        1,432

  MINORITY INTERESTS          36           61      (41.8)%           57
  SHAREHOLDERS' EQUITY     1,656        1,247        32.8%        1,356

  TOTAL LIABILITIES, MINORITY
  INTERESTS AND
   SHAREHOLDERS' EQUITY    4,721        4,357         8.4%        4,188

  ADDITIONAL BALANCE
   SHEET INFORMATION
  OPERATING WORKING
   CAPITAL                 2,038        2,087       (2.4)%        1,646
  WORKING CAPITAL          1,348        1,563      (13.7)%        1,433
  NET TOTAL BORROWINGS       913        1,423      (35.9)%          946
  FINANCIAL LEVERAGE       55.1%       114.1%     -59.0 PP        69.8%



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 Relations: Jan Runau, Head of Corporate PR,

[phone], or Anne Putz, Corporate PR Manager, [phone], both

of adidas-Salomon; U.S. Media Relations: Doug Donsky of Edelman Financial,

[phone], for adidas-Salomon; Investor Relations: Natalie M. Knight,

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

[phone], or Hendric Junker, [phone], or Sebastian Steffen,

[phone], all Investor Relations Managers, of adidas-Salomon 



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

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