Half Year 2026 adidas AG Earnings Call

Speaker #1: Evening, good afternoon, and good morning. Wherever you're joining us today. Welcome to our Q2 2026 results conference call. Our presenters today are our CEO, Björn Golden, and our CFO, Harm Olmaye.

Sebastian Steffen: Hello, everyone. Good evening, good afternoon, and good morning, wherever you are joining us today. Welcome to our Q2 2026 Results Conference Call. Our presenters today are our CEO, Bjørn Gulden, and our CFO, Harm Ohlmeyer. Before Bjørn and Harm will take you through the key developments of the second quarter and share their expectations, let me just quickly remind you that you limit your initial questions to two during the Q&A session to allow as many people as possible to ask their questions. Now, without any further ado, over to you, Bjørn.

Speaker #1: Before Björn and Harm will take you through the key developments of the second quarter and share So before Björn So before Björn and Harm will take you through the key developments of the second quarter and share their expectations, let me just quickly remind you that you limit your initial questions to 2 during the Q&A session to allow as many people as possible to ask their questions.

Speaker #1: And now, without any further ado, over to you, Björn.

Speaker #2: Thanks. Seb and hello everybody. Yeah, you have seen our announcement. We have seen the reaction. I'm sure we will have a lot of interesting questions.

Bjørn Gulden: Thanks, Seb, and hello, everybody. You have seen our announcement. We have seen the reaction. I am sure we will have a lot of interesting questions. Before we go into the update of the business, you have also seen the other announcement that says that Harm, that decided not to extend his contract when it goes out in March 2028, have now announced that he will leave, and that we have found a successor together in Birgit. I think before I go into that in detail, I think I hand over to you, Harm, so you can say a couple of words.

Speaker #2: But before we go into the update of the business, you have also seen the other announcement that says that Harm that decided not to extend his contract when it goes out in March 28.

Speaker #2: Have now announced that he will leave. And that we have found, you know, a successor together in Birgitt. And I think before I go into that in detail, I think I can hand over to you, Harm, so you can say a couple of words.

Speaker #3: Yeah, thank you, Björn. And yeah, of course, it's one of our jobs as leaders to find a good successor. And I'm very, very pleased that we have found Birgitt.

Harm Ohlmeyer: Thank you, Bjørn. Of course, it is one of our jobs as leaders to find a good successor, and I am very, very pleased that we have found Birgit, and I am even more pleased that it will be a smooth transition because I know her very well. Secondly, we are handing over a very healthy business to her. I am really, really pleased with that transition. Of course, I am also very privileged to talk about 29 years with the brand and 10 years of serving as the CFO. That has been a privilege. I always joke that my kids, who are 27 and 25, do not know anything else but adidas. That has to change at some stage. Again, I am very, very pleased with the support that I got from the board, from many of you over the last 10 years.

Speaker #3: And I'm even more pleased that I'm in the it will be a smooth transition because I know we're very well. And then secondly, we're handing over a very, very healthy business to her.

Speaker #3: So I'm really, really pleased with that, you know, transition. Of course, you know, I'm also very privileged to talk about, you know, 29 years with the brand and 10 years of serving as the CFO.

Speaker #2: Björn. questions to two. During the Q&A questions. And now, without any further ado,

Speaker #3: everybody. Yeah, you have seen our announcement. We have seen the reaction. I'm sure we will have a lot of interesting questions. But before we go into the update of the business, you have also seen the other announcement that says that Harm that decided not to extend his contract when it goes out in March 28.

Speaker #3: That has been, a privilege. I always joke that my kids who are 27 and 25 don't know anything else, but Adidas that has to change at some stage.

Speaker #3: But again, I'm very, very pleased with the support that I got from the board, from many of you over the last, you know, 10 years.

Speaker #3: And of course, I will be around, you know, for another quarter or a bit longer until year end. So stay tuned for that one.

Harm Ohlmeyer: Of course, I will be around for another quarter or a bit longer until year-end, so stay tuned for that one. Of course, the timing is always something you decide, like any athlete does as well. As Bjørn said, when you are not going to extend your contract, you start thinking about what is the right timing. I believe handing over a well-run company now, of course, we can always get better, but it feels very, very good. Having the right successor feels even better. I am really looking forward to the next couple of months and then, I am very respectful for the time afterwards, but I am also looking forward to that. Stay tuned.

Speaker #3: Have now announced that he will leave. And that we have found, you know, a successor together in Birgitt. And I think before I go into that in detail, I think I can hand over to you, Harm, so you can say a couple of words.

Speaker #3: And of course, the timing is always something you decide, like any athlete does as well. And as Björn said, when you're not going to extend your contract, you start thinking about what is the right timing.

Speaker #2: Yeah, thank you, Björn. And yeah, of course, it's one of our jobs as leaders to find a good successor. And I'm very, very pleased that we have found Birgitt.

Speaker #3: And I believe, you know, handing over a well-run company now, of course, we can always get better. But it feels very, very good. And having the right successor feels even better.

Speaker #2: And I'm even more pleased that I'm in the it will be a smooth transition because I know we're very well. And then secondly, we're handing over a very, very healthy business to her.

Speaker #3: So I'm really looking forward to the next, you know, couple of months. And then, I'm very, you know, respectful for the time afterwards. But I'm also looking forward to that.

Speaker #3: So stay tuned.

Speaker #2: So I'm really, really pleased with that, you know, transition. Of course, you know, I'm also very privileged to talk about, you know, 29 years with the brand and 10 years of serving as the CFO.

Speaker #2: thanks, Harm. And I think also from my side, I'm sure we will talk about this later. But when I came on board, one of the requirements for me was that you would stay.

Bjørn Gulden: Thanks, Harm. I'm sure we will talk about this later, but when I came on board, one of the requirements for me was that you would stay. I had a guy I knew and I could trust so we could start the process of bringing the company back again. For now, also, thank you, and I'm sure we will talk more about that later. In that process of finding a successor, we had then the luck, to be honest, to find Birgit, who spent 25 years with the company earlier, then left to learn retail, being the CFO of C&A. When she then had the chance to become available, we took the chance that is then the timing of this. Birgit will join us 1 September, and then stay in the board.

Speaker #2: That has been, a privilege. I always joke that my kids who are 27 and 25 don't know anything else, but Adidas that has to change at some stage.

Speaker #2: So I had a guy I knew, and I could trust. So we could start the process of bringing the company back again. So for now, also, thank you.

Speaker #2: But again, I'm very, very pleased with the support that I got from the board, from many of you over the last, you know, 10 years.

Speaker #2: And later. And in that process of finding a successor, we had then the luck to be honest, to find Birgitt. Who spent 25 years with the company earlier, then left to learn retail, being the CFO of CNA.

Speaker #2: And of course, I, I will be around, you know, for another quarter or a bit longer until year end. So stay tuned for that one.

Speaker #2: And, and of course, the timing is always something you decide, like any athlete does as well. And as Björn said, when you're not going to extend your contract, you start thinking about what is the right timing.

Speaker #2: And when she then had the chance to become available, we took the chance. And that is then the timing of this Birgitt will join us September 1st.

Speaker #2: And, and I believe, you know, handing over a well-run company now, of course, we can always get better. But it feels very, very good.

Speaker #2: And then stay, you know, in the board. Harm will be the CFO till the end of the year. And they will then work together to make a smooth transition.

Speaker #2: And having the right successor feels even better. So I'm really looking forward to the next, you know, couple of months. And then, I'm very, you know, respectful for the time afterwards.

Bjørn Gulden: Harm will be the CFO till the end of the year. They will then work together to make a smooth transition. Very, very happy. I think she knows the company, she knows the industry. Again, now having worked for a vertical retailer, she also brings with her the retail competence that is great to have. To close that, and move into the business update, it should be a surprise for you that we would like to celebrate also in your eyes, a little bit of World Cup. Again, a great event, here is a little bit reminder of our visibility in that tournament. I hope you agree it was a great tournament and especially for us, and me, probably like you, feel I'm a soccer expert.

Speaker #2: So very, very happy I think she knows the company. She knows the industry. And again, now having worked for a vertical retailer, she also brings with her the retail competence that is great to have.

Speaker #2: But I'm also looking forward to that. So stay tuned.

Speaker #3: thanks, Harm. And I think also from my side, I'm sure we will talk about this later. But when I came on board, one of the, requirements for me was that you would stay, so I had a guy I knew, and I could trust.

Speaker #2: So to close that, and move into the business update, it should be a surprise for you that we would like to celebrate also in your eyes a little bit of World Cup.

Speaker #3: So we could start the process of bringing the company back again. So for now, also, thank you. And I'm sure we will talk more about that later.

Speaker #2: Again, a great event. And here is a little bit reminder of our visibility in that tournament. I hope you agree. It was a great tournament.

Speaker #3: And in that process of finding a successor, we had then, the luck to be honest, to find Birgitt, who spent 25 years with the company earlier, then left to learn retail, being the CFO of CNA.

Speaker #2: And especially for us. And me, probably like you, feel I'm a soccer expert. And I summarized the tournament as follows. France had the best players.

Bjørn Gulden: I summarized the tournament as follows: France had the best players, Spain had the best team, Argentina the best attitude, playing for the flag, the country, and for Messi. The most fun team was, of course, the Norwegians. I think it was a great pleasure to see my countrymen not only performing, but also being extremely visible. I can tell you, it shows you how much impact a World Cup tournament has at home. I don't think Norwegians have been in such a good mood as long as I've been on this planet. It's good to add some peace. Again, Spain winning the tournament. Again, having been with us, we have a fantastic relationship to the federation. I think you agree they look good. One of the ways of showing how close we are is this picture the day after the tournament when they celebrated.

Speaker #3: and when she then, had the chance to become available, we took the chance that that is then, the timing of this, Birgitt will join us September 1st.

Speaker #2: Spain had the best team. Argentina the best attitude playing for the flag, the country, and for Messi. But then the most fun team was, of course, the Norwegians.

Speaker #3: and then stay, you know, in the board, Harm will be the CFO till the end of the year, and they will then work together, to make a smooth, transition.

Speaker #2: I think it was a great pleasure to see my countrymen, not only performing, but also being extremely visible. And I can tell you, it shows you how much impact World Cup tournament has at home.

Speaker #3: So, very, very happy, I think she knows the company. She knows the industry. and again, now having worked for a vertical retailer, she also brings with her the retail competence, that is great.

Speaker #2: I don't think Norwegians have been in such a good mood as long as I've been on this planet. So it's good to add some peace.

Speaker #3: to have. So to close that, and move into the business update, it should be a surprise for you that we would like to celebrate also in your eyes a little bit of World Cup.

Speaker #2: . Again, Spain winning the tournament. Again, having been with us, we have a fantastic relationship to the federation. I think you agree. They look good.

Speaker #3: again, a great event. And here is a little bit reminder of our visibility, in that tournament.

Speaker #2: One of the ways of showing how close we are is this picture the day after the tournament when they celebrated their bus was branded only with us.

Speaker #4: Thanks. What do I know about soccer? Nothing. I know about football. Benito football.

Bjørn Gulden: Their bus was branded only with us and the team and many, many of the players, of course, also playing in our shoes. Our sports marketing has a great relationship with the federation that currently is by far the most successful one in soccer in general, by male, female, and also in the youth. I am also, as I wrote in my quote, extremely proud what the team has done in general when it gets to campaigns, planning the product, planning the activations. I think I said, I believe even adidas would have been proud. I probably think it's the best executed campaign that has ever happened in this industry when you look across the globe. I will also quickly just summarize the tournament, because there was a lot of criticism before. Too many teams, 3 nations, too many cities.

Speaker #2: And the team and many, many of the players, of course, also playing in our shoes. And our sports marketing has a great relationship with the federation that currently is by far the most successful one in soccer in general, by male, female, and also in the youth.

Speaker #5: The greatest show on turf, the biggest ever seen on planet Earth.

Speaker #2: I am also, as I wrote in my quote, extremely proud what the team has done. In general, when it gets to campaigns, planning, you know, the product planning, the activations, I think I said I believe even Adidas they would have been proud.

Speaker #3: Si es solo fútbol, solo fútbol.

Speaker #2: And I probably think it's the best executed campaign that has ever happened in this industry when you look across the globe. I would also quickly just summarize the tournament, because there was a lot of criticism before too many teams three nations too many cities.

Speaker #5: The day of planet stops for a game. Oh, what a save. That's a beautiful first touch. Pedro Porro Williams. Spain are the champions. Spain have seized their second star.

Speaker #2: And when you look at it, I think the additions of the teams only made it more interesting. It was kind of cool to see Curaçao or Cap Verde playing.

Bjørn Gulden: When you look at it, I think the additions of the teams only made it more interesting. It was kind of cool to see Curaçao, Cape Verde playing. The stadiums were full. The atmosphere was great. For us, having 14 teams that I think we equipped well to reaching the final, you know that we sold close to 18 million jerseys, which again, is far, far more than we have ever sold before. Of course, Mexico being the best, our friends in Argentina the second, and even Germany, who didn't have a great result, had commercially a much bigger success than we've seen before. I have seen in the commentary that I think there is some misunderstandings on how a World Cup sales is being done.

Speaker #2: The stadiums were full. The atmosphere was great. And for us, having 14 teams that I think we equipped well to reaching the final, you know that we sold close to 18 million jerseys.

Speaker #5: The kings of Europe. Have conquered the world.

Speaker #2: Which again, is far, far more than we have ever sold before. And of course, Mexico being the best, our friends in Argentina the second.

Speaker #3: Well, I hope you agree. It was a great tournament, and especially, for us. and, me, probably like you, feel I'm a soccer expert. and I summarized the tournament as follows.

Speaker #2: And even Germany, who didn't have a great result, had commercially a much bigger success than we've seen before. I have seen in the commentary that I think there is some misunderstandings on how a World Cup sales is being done.

Speaker #2: You have to remember that we started selling in World Cup product delivering into the trade already in Q4 last year. That had both selling and sell out in Q1 and Q2.

Bjørn Gulden: You have to remember that we started selling in World Cup product, delivering into the trade already in Q4 last year, that had both sell-in and sell-out in Q1 and Q2. To be honest with you, we're still selling World Cup product, as you can imagine, especially now, in Spain, because the jersey now has two stars. The period for this 1.5 to 1.7 billion is, of course, not only in the summer months, and I think, in some of your spreadsheets, I think this has been a misunderstanding. When you then look at the campaigns, again, yes, we spent 212 more marketing in the quarter. I think we told you that also upfront. Of course, that doesn't have a payback in commerciality in the same period.

Speaker #2: And to be honest with you, we still selling World Cup product. As you can imagine, especially now in Spain, because the jersey now has two stars.

Speaker #2: So the period for these 1.5 to 1.7 billion is, of course, not only in the summer month. And I think in some of your spreadsheets, I think this has been a misunderstanding.

Well, I hope you agree. It was a great tournament, and especially for us. Um, and, uh, me—and probably like you—feel I'm a soccer expert, uh, and I summarized the tournament as follows: France had the best players. Spain had the best team. Uh, Argentina had the best attitude, playing for the flag, the country, and for Messi. But then the most fun team was, of course, the Norwegians. Um, I think it was a great pleasure to see my countrymen not only performing, uh, but also being extremely visible. Um, and I can tell you, it shows you how much impact World Cup tournaments have at home. Um, I don't think Norwegians have been in such a good mood as long as I've been on this planet. So—

It's good that some people.

Speaker #2: When you then look at the campaigns, again, yes, we spent 212 more marketing in the quarter I think we told you that also upfront.

Speaker #2: And of course, that doesn't have a payback in commerciality in the same period. We meant or were sure that for the brand heat going forward and also during the tournament, we had to invest in media.

Bjørn Gulden: We meant, or were sure that for the brand heat going forward, and also during the tournament, we had to invest in media, and we choose to do a lot of activations around the world to showcase the brand. If you also look at our campaign, the Backyard Legends, it was to bring back the beauty of soccer, the way we used to play it at home and not so serious. Everything that we can measure, the engagement around this campaign was great. The creatives are very proud that it's now even being nominated for an Emmy. Let's see if we have a chance. The way we looked on the pitch, I hope you agree, designs, both home and away, great. Mexico, even with a third jersey. We looked fresh. Remember, we did double branding.

Speaker #2: And we choose to do a lot of activations around the world to showcase the brand. If you also look at our campaign, you know, the backyard legends, it was to bring back the beauty of soccer the way we used to play it at home and not so serious.

Um, again, Spain winning the tournament. Um, again, having been with us, we have a fantastic relationship with the Federation. I think you agree, they look good. Um, one of the ways of showing how close we are is this picture the day after the tournament, when they celebrated. Their bus was branded only with us and the team, and many, many of the players, of course, also playing in our shoes. Um, and our Sports Marketing has a great relationship with the Federation, that currently is by far the most successful one in soccer in general—male, female, and also in the youth.

Speaker #2: And everything that we can measure, the engagement around this campaign was great. And the creatives are very proud that it's now even being nominated for an Emmy.

Speaker #2: So let's see if we have a chance. The way we looked on the pitch, I hope you agree. Designs both home and away, great.

I am also as I wrote in my quote, to extremely proud was the team has done in general when it gets to campaigns planning. Uh, you know, the products planning the activations. Uh, I think I said, I believe even now the dust would have been proud, um, and I probably think it's the best executed campaign, uh, that uh, has ever happened in this industry. When you look um across the globe.

Speaker #2: Mexico even with the third jersey. We looked fresh. Remember we did double branding. We had, you know, the performance logo and wider stripes on the home.

I would also quickly just summarize the tournament, because there was a lot of criticism before—too many teams, three nations, too many cities.

Bjørn Gulden: We had the performance logo and wider stripes on the home, and then we had the trefoil and the narrower stripes on the way. We did also, for the first time in history, equip the referees with a lot of variations. First of all, they all had three stripes. Never happened before. We gave them different colors depending on how the two teams were playing. We did also change the three on the ball, for the semifinals and the final into the gold version. The referee then had black with gold logos. I think it's the first time we started to get orders for referee jerseys around the world that people would like to buy. Also, the event itself, and not only the game, but the opening, the halftime and opening shows, the ball captains that you see in the right corner.

Speaker #2: And then we had the tree foil and the narrower stripes on the way. We did also for the first time in history equip the referees.

Speaker #2: With a lot of variations. First of all, they all had three stripes. Never happened before. And we gave them different colors depending on how the two teams were playing.

Speaker #2: We did also change the triangle ball for the semifinals and the final into the gold version. And the referee then had black with gold logos.

Speaker #2: I think it's the first time we started to get orders for referee jerseys around the world that people would like to buy. Also the event itself, and not only the game, but the opening the what should I say, halftime and opening shows, the ball captains that you see in the right corner, we used our celebrities of our partners and made it an event much, much bigger than only the two game teams playing at each other.

And when you look at it, um, I think the additions of the teams, only only made it more interesting. It was kind of cool to see it as. So, a couple of playing, um, stadiums were full, the atmosphere was great. Um, and for us having 14 teams that I think we equipped well to reaching the final, you know, that we sold close to 18 million jerseys, uh, which again is far far more than we have ever sold before. And of course, Mexico being the best, um, our friends in Argentina, the second and even Germany, who didn't have a great result, had commercially a much bigger success.

Uh, than we've seen before.

I have seen in the commentary that I think there is some misunderstanding on how I work up. Sales is being done. You have to remember that we started selling in World Cup products, delivering into the trade already in.

Bjørn Gulden: We used our celebrities, our partners, and made it an event much, much bigger than only the two teams playing at each other. I can assure you that everybody that was involved felt very happy being part of it. The culture around it. We had activations, as I said, all over the world. You see on the upright corner, on the left side, the home of soccer in New York, which had more than 250,000 visitors. We had basically activations in all markets where we then both made it an event, watched games, had concerts, and again, put color to the tournament, branded, of course, with our adidas products. Stores, and I think this is also important. Of course, we then put more space to these kind of product in our stores, also in cities, in countries that were not qualified.

Speaker #2: And I can assure you that everybody that was involved felt very, very, very happy being part of it. Then the culture around it, we had activations as I said all over the world.

Speaker #2: You see on the upright corner on the left side, the home of soccer. In New York, which had more than a quarter million visitors.

Q4 last year that had both selling and sell-out in Q1 and Q2. And to be honest with you, we are still selling World Cup products, as you can imagine—especially now in Spain, because the jersey now has two stars. So, the period for these €1.5 to €1.7 billion is, of course, not only in the summer months, and I think in some of your spreadsheets this has been a misunderstanding.

Speaker #2: And we had basically activations in all markets. Where we then bought, made it an event, watch games, had concerts. And again, put color to the tournament branded, of course, with our Adidas product.

Speaker #2: And then stores and I think this is also important. Of course, we then put more space to these kind of product in our stores also in cities in countries that were not qualified.

When you then look at the campaigns. Um, again, yes, we spend 212 more Marketing in the quarter. I think we told you that also up front and of course, that doesn't have a payback in commerciality in the same period we meant, um, or for sure that for the brand Heat going forward and also during the tournament we had to invest in media and we choose

...to do a lot of activations around the world to showcase the brand.

Speaker #2: And the reason for this was not only to increase sales, which happened in many places, but of course to celebrate the event. And here is the important that when you put World Cup products in, you have to take something out.

Bjørn Gulden: The reason for this was not only to increase sales, which happened in many places, but of course, to celebrate the event. Here is important that when you put World Cup products in, you have to take something out. That's why you cannot just add it on top, because, of course, it's cannibalizing some other products that would have been there. When the tournament is over and World Cup is out, then of course, something else gets in. So you can never take an event and just add it to the spreadsheet, because that's not how retail works. The activations, which had many different goals. Here you see from Mexico, where we had a huge event day before the opening, again, to activate the moment. Same thing we talked about, New York, where we had celebrities, concerts, games, youth tournaments. The stores here, for example, in Paris.

If you also look at our campaign, you know, the backyard Legends, it was to bring back the beauty of soccer. The way we used to play it at home and not so serious. Um and everything that we can measure um the engagement around this campaign was great.

Speaker #2: That's why you cannot just add it on top. Because of course, it's cannibalizing some other products that would have been there when the tournament is over and World Cup is out, then of course something else gets in.

That is now even being nominated nominated for an Emmy. So let's see. Um, if we have a chance,

Speaker #2: So you can never take an event and just add it to the spreadsheet. Because that's not how retail works. The activations which had many different goals.

Speaker #2: Here you see from Mexico where we had a huge event day before the opening. Again, to activate the moment. Same thing, we talked about New York where we had celebrities, concerts, games, new tournaments.

Speaker #2: The stores here, for example, in Paris, we had even in China who wasn't qualified, a huge activation celebrating our campaign and the tournament. We even had Pedri flying from Spain to China right after the tournament to continue the soccer culture heat that is building also in China and the story goes on.

the way we looked on the pitch. I hope you agree. Um, designs, uh, both Home and Away. Great Mexico, even with the third Jersey, um we look fresh. Remember we did double branding. We had, you know, the performance logo and wider stripes on the home. And then we had the 3 foil and the narrower stripes on the way we did also for the first time in history, equipped the referees with a lot of variations. First of all, they all had free Stripes never happened before and we gave them different colors, depending on how the 2 teams were playing.

Bjørn Gulden: We had even in China, who wasn't qualified, a huge activation, celebrating our campaign and the tournament. We even had Pedri flying from Spain China right after the tournament to continue the soccer culture heat that is building also in China. The story goes on. Here is from Sydney, here is from Japan, then you put it all together, the branding of the adidas campaign visible everywhere. Everything that we had control over, we were very happy, except for one thing, and this is this picture. You did probably notice that suddenly all the brands had pink boots, which, of course, none of us was happy with. Cannot explain to you how it happened. Probably retail should have told us. They didn't, we ended up in the first games looking the same.

We did also change the 3 on the ball for the quarter, for the semi-finals, and the final into the Gold version and the referee then had a black with gold logos. I think it's the first time we started to get orders for refrigerators is around the world that people would like to buy.

Speaker #2: Here's from Sydney. Here's from Japan. And when you put it all together, the branding of the campaign visible everywhere. So everything that we had control over, we were very happy.

Speaker #2: Except for one thing, and this is this picture. You did probably notice that certainly all the brands had pink boots. Which of course none of us was happy with.

Also, the event itself and not only the game, but the opening, um, the, what should I say, half time and opening shows the ball caps that you see in the right corner, uh, we used our celebrities, our partners and made it an event much, much bigger than only the 2 games, uh, teams playing at each other. Um, and I can assure you that everybody that was involved, uh, felt very

Very, very happy to be part of it.

Speaker #2: Cannot explain to you how it happened. Probably retail should have told us. They didn't. And we ended up in the first games looking the same.

Speaker #2: We then tried as quickly as we could to get our sports marketing to change into the new collection, which is now going into store.

Bjørn Gulden: We then tried as quickly as we could to get our sports marketing to change into the new collection, which is now going into store. As of the quarterfinal, you would have seen many of the players going into the new colorway, which is then white, dark blue, and red. Again, I hope next time we are better at not having the same colors. Not only soccer. In general, I think the visibility of a brand across many, many sports, being golf, being Formula 1, being tennis, being rugby, whatever, and running, has never been stronger. Again, we are investing in more partnerships to strengthen the visibility in sports because as you know, we reduced that some years ago, and I'm starting to be very, very happy on how we look in the different stadiums and arenas and also the content that is then being produced in media.

Speaker #2: So as of the quarterfinal, you would have seen many of the players going into the new colorway, which is then white, dark blue, and red.

Speaker #2: Again, I hope next time we are better at not having the same colors. Not only soccer, in general, I think the visibility of a brand across many, many sports being golf, being Formula One, being tennis, being rugby, whatever, and running, has never been stronger.

Then the culture around it. Uh, we had activations, as I said all over the world, you see, on the upright corner on the left side, the home of soccer in New York, which had more than a quarter million visitors. And we had basically activations in all uh markets where we then bought made, it an event watch games had concerts uh and again put color to the tournament branded of course uh, with our Adidas uh product.

And then stores and I think this is also important. Of course, we then put

More space.

Speaker #2: And again, we are investing in more partnerships to strengthen the visibility in sports. Because as you know, we reduced that some years ago and I'm starting to be very, very happy on how we look in the different stadiums and arenas.

It's kind of product in our stores also in cities in countries that were not qualified. And the reason for this was not only to increase sales which happened in many places, but of course, to celebrate the event.

Speaker #2: And also the content that is then being produced in media. So all that then caused a sale of 6.7 billion euro, which is the highest nominal value we have ever done in a quarter.

Bjørn Gulden: All that then cost a sale of EUR 6.7 billion, which is the highest nominal value we have ever done in a quarter. That is a 14% currency-neutral growth. The gross margin above 52%, of course, also led by the high share of D2C, which we will get back to, but also controlling the markdown and having a big share of full price face. That gave us then the famous EUR 574 million EBIT, that despite us having invested EUR 12 million more in marketing. As we have said now many times, this overinvestment in marketing will, of course, not continue in Q3 and Q4. If you add Q2 into Q1, you get EUR 13.3 billion, which is also nominal, the highest that we ever had, which then also for the full H1 gives you 14% growth. Margin a little bit lower in Q1. That is at 51.8%.

Speaker #2: And that is a 14% currency neutral growth. The gross margin above 52, of course, also led by the high share of D2C, which we will get back to.

And here is the important that when you put worker products in, you have to take something out. That's why you cannot just add it on top. Because, of course, it's cannibalizing. Some other products that would have been there when the tournament is over and World Cup is out. Then of course, something else gets in and so you can never take an event and just add it to the spreadsheet because that's not how retail works.

The activations, which had many different goals—here you see from Mexico, where we had a huge event the day before the opening, again to activate the moment.

Speaker #2: But also controlling the markdown and having a big share of full price sales. And that gave us then the famous 574 EBIT. Despite us having invested 1 million more in marketing, and as we have said now many times, this over investment in marketing would of course not continue in Q3 and Q4.

Speaker #2: If you add Q2 into Q1, you get the 13.3 billion, which is also nominal the highest that we ever had, which then also for the full half year gives you 14% growth margin, a little bit lower in Q1.

Speaker #3: Japan. And then you put it all together, the branding of the Adidas campaign, visible everywhere. So everything that we had control over, we were very happy.

Speaker #2: So that's at 51.8. Remember the share of D2C was then lower. And that gives you then a half year result of 1279, which is an EBIT percentage of 9.6, which is then also despite the 200 million more marketing still almost a 10% EBIT.

Speaker #3: Except for one thing, and this is this picture, you did probably notice, that certainly all the brands had pink boots. Which of course none of us was happy with.

Bjørn Gulden: Remember, the share of D2C was then lower. That gives you then an H1 result of EUR 1,279 million, which is an EBIT percentage of 9.6%. Despite the EUR 200 million more marketing, still almost a 10% EBIT. If you look at the geographies, you see Q2 on the left side and H1 on the right side. North America, again, we know we have a lot of catch up to do, but strong numbers with 17% and 15%. Europe at only 6%. I have to remind you again that the growth in Europe the last 2 years has been very strong. Get back to what the numbers were in D2C. Greater China, in a market where big competitors are having negative numbers, very strong at 15% and 16%. The combination of South Korea and Japan, 18% and 21%.

Speaker #3: Cannot explain to you how it happened. Probably retail should have told us, they didn't. And we ended up in the first games looking the same.

Speaker #2: If you look at the geographies, you see Q2 on the left side. And first half on the right side. So North America, again, we know we have a lot of catch up to do.

Speaker #3: We then, tried as quickly as we could to get our sports marketing to change into the new collection, which is now going into store.

Speaker #2: But strong numbers with 17 and 15. Europe at only 6. I have to remind you again that the growth in Europe, the last two years have been very strong.

Speaker #2: Get back to what the numbers were in D2C. Greater China, in a market where big competitors are having negative numbers, very strong at 15 and 16.

Period cannot explain to you how it happened. Probably retail should have told us, uh, they did, and we ended up in the first games looking the same. We then tried as quickly as we could to get our Sports Marketing, to change into the new collection, which is now going into store. So, as of the quarterfinal, you would have seen many of the players going into the new colorway, which is then white dark blue, um, and read. Uh, again I hope next time we are better at not having the same, uh, colors.

Speaker #2: The combination of South Korea and Japan, 18 and 21. LatAm on fire, especially in Mexico, but also of course in Argentina and Brazil, 28 and 27.

Bjørn Gulden: LATAM on fire, especially in Mexico, but also, of course, in Argentina and Brazil, 28% and 27%. Then emerging markets, despite 10 of the markets practically being in war, up 12% and 11%. Again, you summarize it, and you're then at the 14%, both for the quarter and for the H1. When you then look into the channel, the wholesale. Remember, wholesale is where we sell into the trade, not out, but into the trade, at only 6%. This has been the pattern for a long time. When we started the sell-in period for Q1 and Q2, it was actually flat. Then an unbelievable growth in the D2C business with 23% in our brick and mortar and even 27% in e-com. Remember, this is sell out to the consumer and then tells you the demand for the product with the consumers.

Not only soccer in general, I think the visibility of a brand across many many sports um being golf being Formula 1, being tennis, being Ruby, whatever and running has never been stronger.

Speaker #2: And then emerging markets despite 10 of the markets practically being in war, up 12 and 11. And again, you summarize it and you then at the 14% both for the quarter and for the first half.

Speaker #2: When you then look into the channel, the wholesale, and remember wholesale is where we sell into the trade. Not out, but into the trade.

The visibility in sports because as you know, we reduce that some years ago and I'm starting to be very, very happy on how we look in the different stadiums and Arenas and also the content that is then being produced, um, in Media.

Speaker #2: At only 6. This has been the pattern for a long time. And when we started the selling period for Q1 and Q2, it was actually flat.

So, all that then caused um a sale of 6.7 billion Euro, which is the highest nominal value we have ever done in a quarter and that is the 14% currency in neutral growth.

Speaker #2: And then an unbelievable growth in the D2C business with 23% in our brick and mortar and even 27 and e-com. And remember this is sell out to the consumer and then tells you to demand for the product with the consumers.

The gross margin I bought. 52 of course, also led by the high share of d2c, which

Speaker #2: That gives you then a split of 5743. Again, this is not a strategic move, but it's actually what the consumer is choosing. I'll give you now the D2C numbers per region, just so you understand how strong the demand was.

Bjørn Gulden: That gives you then a split of 57%/43%. Again, this is not a strategic move, but it's actually what the consumer is choosing. I'll give you now the D2C numbers per region, just so you understand how strong the demand was. You see in North America, the D2C in the quarter was even 39%. In Europe, 12%, so twice what the sell-in demand was. Greater China at 22%, LATAM at 37%, emerging at 24%, and the combination South Korea and Japan at 25%. I'm telling you this because it is a great situation to be in that your sell out is stronger than sell in. I had never seen numbers like this before. Again, that's probably why we are celebrating a little bit more than you do because we clearly see that product and marketing and how we activate it is actually working for both her and him.

we'll get back to but also uh controlling the markdown uh and having a big share uh of full price space and that give us then the famous 574 a bit uh despite of having investment

Speaker #2: You see in North America, the D2C in the quarter was even 39. In Europe, 12. So twice what the sell in demand was. Greater China at 22.

Speaker #2: LatAm at 37. Emerging at 24. And the combination South Korea and Japan at 25. I'm telling you this because it is a great situation to be in that you sell out is stronger than sell in.

One million more in marketing. And as we have said now many times, this overinvestment in marketing will not continue in Q3 and Q4. If you add '22 into Q1, you get the €13.3 billion, which is also, nominally, the highest that we ever had. Which then also, for the full half year, gives you 40%. Gross margin is a little bit lower in Q1; so that's at 51.4%. That's 82 basis points lower. And that gives you then a half year—

Speaker #2: I had never seen numbers like this before. And again, that's probably why we are celebrating our little bit more than you do. Because we clearly see that product and marketing and how we activate it is actually working for both her and him.

Sold the 1279, which is an Abit percentage of 9.6, uh, which is then also, despite the 200 million more marketing, still almost a 10% AIT. If you look at the geographies you see,

Speaker #2: If you then look at the execution, same thing. Both our e-com and our physical stores of course with global concepts, but then localized depending on what is relevant.

Bjørn Gulden: If you then look at the execution, same thing, both our e-com and our physical stores, of course, with global concepts, but then localized depending on what is relevant. That's why you see front of stores and also in e-com, then being targeting to the demand in the market. If you then look at divisions, yes, footwear growing at only 1, apparel growing at 35, and accessory growing as 20. I don't know if you remember, but we did flag this to you 6, 9 months ago, that we would see a stagnation in footwear, especially on the lifestyle side, because of the amount of product in the market. But that we will see a demand for apparel growing dramatically, not only because of World Cup, but of course, also because of World Cup.

Speaker #2: That's why you see front of stores and also the different pages in e-com then being targeting to the demand in the market. If you then look at divisions, yes, footwear growing at only 1.

On the left side and first half on the right side. So North America again. We know we have a lot of catch up to do with strong numbers with 17 and 15 Europe at only 6 have to remind you again that the growth in Europe the last 3 years have been very strong. Get back to what the numbers were in DC.

Greater China is in a market where big competitors are having negative numbers, but we're very strong at 15 and 16.

Speaker #2: Apparel growing at 35. And accessory growing as 20. I don't know if you remember, but we did flag this to you 6, 9 months ago.

The combination of South Korea and Japan, 18 and 21 the last time on fire, especially in Mexico. But also of course, in Argentina and Brazil, 28 and 27. And then Emerging Markets, despite 10 of the markets,

Speaker #2: That we would see a stagnation in footwear, especially on the lifestyle side. Because of the amount of product in the market. But that we will see a demand for apparel growing dramatically.

Practically being in War, uh, of 12 and 11 and again, you summarize it. Uh, and you then at the 14% vote for the quarter and for the first half,

Speaker #2: Not only because of World Cup, but of course also because of World Cup. I think you agree that when people are buying product to go to the stadium, they buy replicas and tops and not necessarily shoes.

Bjørn Gulden: I think you agree that when people are buying product to go to the stadium, they buy replicas and tops and not necessarily shoes. The accessory business is following the heat of the brand. You will continue, in my opinion, when I look at the order book, to see footwear being flattish in Q3, but then you will start see it growing again in Q4. So again, you cannot plan this in details because you don't know what is happening in the D2C business, but the pattern has been known for a long time. That means that in the mix in the quarter, footwear is 52%, apparel at 40%, and accessory at 8%. You will see this start to change again to be more footwear-led at the back end of the year. Then, again, we are a sports brand first.

Speaker #2: And the accessory business is following the heat of the brand. You will continue in my opinion, when I look at the order book, to see footwear being flattish in third quarter.

We didn't look into the channel, the whole sale. And remember, wholesale is where we sell into the trade, not out, but into the trade, uh, at only 6, this has been the pattern for a long time. And when we started the selling period for q1 and Q2, it was actually flat.

Speaker #2: But then you will start seeing it growing again in the fourth quarter. So again, you cannot plan this in details because you don't know what is happening in the D2C business.

Speaker #2: But the pattern has been known for a long, long time. That means that in the mix in the quarter, footwear is 52, apparel at 40, and accessory at 8.

Speaker #2: You will see this start to change again to be more footwear led at the back end of the year. And then again, we are a sports brand first.

And then an unbelievable growth in the d2c business with 23%, uh, in our brick and mortar, and even 207 and e-com. And remember, this is sell out to the consumer and then tells you the demand for other products, um, with the consumers that gives you, then the split of 57.43. Um, again, this is not a strategic move, but it's actually, uh, what the consumer, uh, is choosing.

Speaker #2: That's what Adidas gave us. We are investing in performance. I told you three, four years ago that we will try to create heat around the brand.

Bjørn Gulden: That's what Adi Dassler gave us. We are investing in performance. I told you 3, 4 years ago that we will try to create heat around the brand, sell lifestyle product, and then get the consumer into our performance product because they like the brand. We thought already then that we will have technologies and product, what should I say, pipelines that would start to work as we were getting closer to 2025 and 2026. That's also what happened. You see here the performance business is growing at 39%. Yes, football, of course, inflated by World Cup, but running now, I think for the Q3, growing almost 30%, trading almost double-digit, and motorsport growing 70%.

Speaker #2: Sell lifestyle product and then get the consumer into our performance product. Because they like the brand. And we thought already then that we will have technologies and product what should I say, pipelines that would start to work as we were getting closer to 25 and 26.

Speaker #2: And that's also what happened. You see here the performance business is growing at 39%. Yes, football of course inflated by World Cup. But running now, I think for the third quarter growing only almost 30%.

I'll give you now the need to see numbers uh per region. Just you understand how strong the demand was, you see in North America that need to see in the quarter was even 39 in Europe 12. So twice or what the sale in demand was created China at 22 last time at 37 emerging at 24 and the combination. So, 3 in Japan at 25, I'm telling you this because it is a great situation to be in that you sell out the stronger than sell in. Uh, I had never seen numbers like this before. And again, that's probably why we are celebrating our little bit more than

You do, because we clearly see that product and marketing and how we activate it is actually working for both her. Um, and him

if you then look at the execution,

Speaker #2: Training almost double digit. And motor sport growing 70%. The only negative number here that I would be what should I say, working hard on is the basketball.

Bjørn Gulden: The only negative number here that I would be, what should I say, working hard on is the basketball, but I told you that that will take a little bit of time. Remember, this is performance basketball, so the absolute number is actually very small. If you then look at the different categories from the consumer point of view, I think it's fair to say that we are winning in running. We are winning competitions on the road, on the track. We are sponsoring big events, and our running shoes in general are having great sell-throughs, which was not the case 3 years ago. The category training, again, everything that is hybrid training is growing fast.

Speaker #2: But I told you that that will take a little bit of time. And remember this is performance basketball. So the absolute number is actually very small.

Speaker #2: If you then look at the different categories from the consumer point of view, I think it's far fair to say that we're winning and running.

Um, same thing, both our e-com, uh, and our physical stores, of course, with global Concepts. But then localized, depending on what is relevant. That's why you see front of stores and also, uh, the different pages in e-com, uh, then being uh, targeting, uh, to the demand in the market.

Speaker #2: We are winning competitions on the road, on the track. We are sponsoring big events. And our running shoes in general are having great sell-throughs, which was not the case three years ago.

Speaker #2: The category training again, everything that is hybrid training is growing fast. Yes, we are not the partner of the events. But we sponsor a lot of athletes.

Bjørn Gulden: Yes, we are not the partner of the events, but we sponsor a lot of athletes, and are seeing a great demand both in HYROX and in CrossFit, and you see some of the winners on this picture. In general, the visibility in sports, winning events, and therefore getting the image of being a performance brand again is strengthening. You see some of the sports here, and I will note, Sultans is a nickname of the Turkish women's volleyball team who won the Nations League, which is a new asset for us. Again, probably the most known team for women's sports in Turkey. Again, a great thing for us. The recipe in performance, we have told you launch technologies to win events and be visible with designs, and then you scale it into the commercial.

Speaker #2: And are seeing a great demand both in high rocks and in CrossFit. And you see some of the winners on this picture. In general, the visibility in sports winning events and therefore getting the image of being a performance brand again is strengthening.

35, an accessory growing is 20. I don't know if you remember, but we did flag this to 6 9:00 that we would see a stagnation in Twitter, especially on the lifestyle side because of the amount of product in the market. But that we will see a demand for a product growing dramatically. Not only because of World Cup, but of course. Also because of worker, I think you agree that when people are buying product to go to the stadium, they buy replicas and tops and not necessarily issues, and the accessory business is following the heat of the brand you will continue in my opinion, when I look at the order book to see foots were being flattish, um, in third quarter, but then you will start seeing it growing again in the fourth quarter.

Speaker #2: You see some of the sports here. And I will note Sultans is a nickname of the Turkish women's volleyball team who won the nations league, which is a new asset for us.

So, again, you cannot plan this in detail because you don't know what is happening in the D2C business, but the pattern has been known for a long, long time.

Speaker #2: And again, probably the most known team for women's sports in Turkey. Again, a great thing for us. So the recipe in performance, we have told you, you launch technologies to win events and be visible with designs.

That means that in the mix and the quarter future is 52, a parallel at 40 and assessor at 8.

See this start to change again to be more suitable at at the back end of the year.

Speaker #2: And then you scale it into the commercial. Adizero Evo 3, Evo SL. And here you see both the Evo SL from a running point of view and then stretched even into SL Zipper.

Bjørn Gulden: Adizero, Evo 3, Evo SL, and here you see both the Evo SL from a running point of view and then stretched even into SL Zipper that, yes, is the Evo SL construction with a zipper and with different stripes execution going across the upper. Many versions about this and a huge success both in the running side and in the lifestyle side. In soccer the same. Here you see F50 Hyperfast Evo, which is the shoe that the professional player is playing at. Then the takedown in the new color where we take the same look and feel, almost the same last, even down to the price point of €60. Hero to high-low in all categories.

Speaker #2: That yes, is the Evo SL construction with a zipper and with different stripes execution going across the upper. Many, many versions about this. And a huge success both in the running side and in the lifestyle side.

And then again, we are a sports brand first—that's what adidas gave us. Uh, we are investing in performance. I told you three or four years ago that we would try to create heat around the brand, sell lifestyle products, and then get the consumer into our performance product because they like the brand. And we thought already then that we would have technologies and product, um, what should I say, pipelines that would start to work as we were getting closer to '25 and '26.

Speaker #2: In soccer the same. Here you see F50 hyper fast Evo, which is the shoe that the professional players playing at. And then the takedown in the new color where we take the same look and feel almost the same last, even down to the price point of 60 euros.

Speaker #2: So hero to high low in all categories. Also in training, here you see maybe the most innovative training shoe for hybrid training, meaning high rocks.

Bjørn Gulden: Also in training, here you see maybe the most innovative training shoe for hybrid training, meaning HYROX, and then the takedown, which is then a huge commercial shoe with bookings over 1 million pair already, same system. In general, we have talked to you about printed technologies. Now we have a printed basketball shoes, which is being played in college and also will be played in NBA. Some of the players are now having it in the summer season camp. The second shoe is the printed soccer boot that one of the MLS players, Cav Sullivan, played already last week, a fully printed shoe. The technology of printed shoes is now also hitting the top athletes, which is new. First signature shoe on women since a long time. You see it here from Sophie Cunningham.

Speaker #2: And then the takedown, which is then a huge commercial shoe with bookings over a million pair already same system. If you then look at in general we have talked to you about printed technologies.

And that's also what happened. You see here, the performance business is growing at 39%. Yes, football, of course, inflated by World Cup. But running now, I think for the third quarter growing only third almost 30% trading, almost double digit and motor sport growing 70%. The only negative number here, that I would be uh what should I say? Working hard on is the basketball but I told you that that will take a little bit of time. And remember, this is performance basketball. So the absolute number uh, is actually very small.

If you then look at the different categories from the...

Speaker #2: So now we have a printed basketball shoes, which is being played in college and also will be played in NBA. Some of the players are now having it in the summer season camp.

Speaker #2: The second shoe is the printed soccer boot. That one of the MLS players Kav Sullivan played already last week. Fully printed shoe. So the technology of printed shoes is now also hitting the top athletes, which is new.

Consumer point of view. I think it's far too. Fair to say that we are winning and running. Uh, we are winning competitions on the road on the track. Uh, we are sponsoring big events and our running shoes in general are having great centers, which was not the case 3 years ago.

The category training again, everything that is hybrid training, is growing fast. Yes we are not the partner of the events.

Speaker #2: First signature shoe on women's since a long, long time. You see it here from Sophie Cunningham. Same thing again. Dedicated to her. Selling very well already in retail.

The sponsor, a lot of athletes, um, and uh, are seeing a great demand, both in high rocks and in CrossFit and you see some on the winners, um, on this, uh, picture.

Bjørn Gulden: Same thing again, dedicated to her, selling very well already in retail. Then because of the vest and the cooling jacket that we had in Formula 1 was now transferred into the World Cup, so the teams were wearing the same equipment. We even have cooling boots for the players, so they could actually wear while they were sitting before the games or during the game, if you were on the bench. We had Zverev in our 3D Climacool winning the French Open. Of course, we have now many versions of the HyperBoost hitting the market, which in my opinion, is the best foam that you can have in comfort running.

Speaker #2: And then because of the investment in volleyball, the crazy flight seven same thing. Innovation also in apparel. You see in the cooling vest and the cooling jacket that we had in Formula One.

Speaker #2: Was now transferred into the World Cup. So the teams were wearing the same equipment. We even had cooling boots for the players so they could actually wear while they were sitting before the games or during the game if you were on the bench.

In general, the visibility in sports, winning events and therefore getting the image of being a performance brand. Again is strengthening you see some of the sports here and I will note, you know, saltans is a nickname of the Turkish women's volleyball team who won the nation's League, which is a new asset for us and again, probably the most known, uh, Team for women's sports in turkey. Again, a great thing, uh, for us,

Speaker #2: We had Sverev in our 3D climate cool. Winning the French Open. And of course we have now many versions of the hyper boost hitting the market, which in my opinion is the best form that you can have in comfort running.

Speaker #2: I think we told you before that the 23rd and 24th of September we will have an innovation day which you will be invited where our innovation people will then take you through the pipeline of innovation both conceptually and also finished product.

Bjørn Gulden: I think we told you before that the 23rd and 24th of September, we will have an innovation day, which you will be invited, where our innovation people will then take you through the pipeline of innovation, both conceptually and also finished product, so that you can ease at the belief that we have lack of innovation, because we don't. We know that the performance side, over time, drives the lifestyle side. You also know that we have had a great success on the lifestyle side over the last three years. The lifestyle business in the quarter was, of course, less, so only 2%. Now we need to be honest that part of the football product that you saw is growing almost 80% are, of course, lifestyle product, but it's classified as football.

Speaker #2: So that you can ease at the believe that we have lack of innovation because we don't. So then we know that the performance side over time drives the lifestyle side.

Speaker #2: You also know that we have had a great success on the lifestyle side of the last three years. The lifestyle business in the quarter was of course less.

Speaker #2: So only 2%. And now we need to be honest that part of the football product that you saw is growing almost 80% are of course lifestyle product.

So the recipe, um, in performance, we have told you, you launch Technologies to Vin events and be visible, the designs, and then you scale it into the commercial. It is zero EVO 3, Evo SL. And here you see both the eosl from a running point of view and then stretched even into SS, zipper that. Yes, is the eosl construction with a simpler and with different Stripes like execution going across, um, the upper, many, many versions about this and a huge successful in the running side. And in the lifestyle side in soccer the same here, you see a 50 hyperforce Evo, which is the shoe that the the professional player is playing at. And then they take down in the new color where we take the same look and feel almost the same loss even down to the price point of 60, so 0 to high low in all categories.

Also, in training.

Speaker #2: But it's classified as football. So I think if you really honest the consumer that used to buy a sportswear and original product in this quarter has also bought football product.

Bjørn Gulden: I think if you're really honest, the consumer that used to buy a sportswear, an original product, in this quarter has also bought football product. Maybe that is a little bit misleading, but it's very hard to classify this accurate. If you now look at it here, yes, we are using our athletes also in lifestyle activations, but we also have a lot of non-athletes or people coming from different, I would say, parts of entertainment that are then used for marketing lifestyle product. You see Timothée Chalamet, you see Kendall Jenner, you see Bad Bunny, and the activations here is, of course, both global and local, and there is a huge amount of activities going on. We would still say that, especially for her, we have the hottest shoes and silhouettes in the market. Many of them has been stretched into new silhouettes.

A huge commercial shoe, with bookings of over a million pairs already. Same system.

Speaker #2: So maybe that is an a little bit misleading, but it's very hard to classify this accurate. If you then look at it here, yes, we are using our athletes also in lifestyle activations.

If you then look at in general, we have talked to you about printed Technologies. So now we have a printed basketball shoes which is being played in college and also will be played in MBA, some of the players are now having it in the pre.

Thomas camp.

Speaker #2: But we also have a lot of non-athletes or people coming from different I would say parts of entertainment that are then used for marketing lifestyle product.

Speaker #2: You see Timothée Chalamet. You see Kendall Jenner. You see Bad Bunny and and and. And the activations here is of course both global and local.

Speaker #2: And there is a huge amount of activities going on. We would still say that especially for her we have the hottest shoes and silhouettes in the market.

The second shoe is the printed soccer boot. Um, that 1 of the MLS players, you know, cap Solomon, uh, played already last week fully printed shoe. Um, so the technology of printed shoes is now also heating the top athletes, which is new. Uh, first thing that's a shoe on women's, it's a long, long time. Um, you see it here from Sophie Cunningham.

Speaker #2: Many of them has been stretched into new silhouettes. So the samba for example into both ballerinas, into mules, into Mary Janes. We have a lot of low profile and we have running shoes built on all constructions and on new constructions.

Same thing again. Uh, dedicated to her uh, selling very well already in retail and then because of the investment in volleyball, the crazy flight 7 uh same thing.

Bjørn Gulden: The Samba, for example, into both ballerinas, into mules, and into Mary Janes. We have a lot of low profile, and we have running shoes built on old constructions and on new constructions. Again, I have not the feeling that there's anything else in the marketplace that is hotter than we have across the globe. I would mention to you that court is coming back, especially in triple wide. Again, the Stan Smith sector will start to grow again, and you will see many versions in addition to the OG Stan Smith, and you will see many activations with many different partners. Apparel, huge growth, not only in World Cup, but also in modern silhouettes, and, of course, fabrics.

Speaker #2: And again, I have not the feeling that there's anything else in the marketplace that is hotter than we have across the globe. And I would mention to you that corp is coming back especially Triple White.

Innovation also in apparel—you see, the cooling vest and the cooling jacket that we had in Formula 1 was not transferred into the World Cup. So the teams were wearing the same equipment. We even have cooling boots for the players, so they could actually wear them while they were sitting before the games or during the game, if you want, on the bench.

Speaker #2: So again, the Stan Smith sector almost start to grow again. And you will see many versions in addition to the OG Stan Smith. And you will see many activations with many different partners.

We have Severin, our 3D climber, cool, winning the French Open. And of course, we have now many versions of the Hyperburst hitting the market, which, in my opinion, is the best form that you can have in comfort running.

I think we told you before that, the 23rd and 24th, um, of September, we will have an innovation day.

Speaker #2: Apparel, huge growth not only in World Cup but also in modern silhouettes and of course fabrics. I think especially online we look extremely fresh.

Bjørn Gulden: I think especially online, we look extremely fresh and we do see the heat, especially with her all over the world, although some of the products vary from region to region. When your brand is hot, your apparel is hot, and your footwear is hot, you automatically then sell more accessories, and this is also what happened with us. Also, in addition to soccer balls, which, of course, has been growing because of World Cup, but we have fixed most of the sourcing issues we have, and therefore you saw a 20% growth in accessories. With that kind of background, I hand back to you, Harm, where you can take them through more of the financials.

We will be invited, where our Innovation people will then take you through the pipeline of innovation, both conceptually and also finished product, so that you can ease any concerns about the belief that we have a lack of innovation, because we—

Speaker #2: And we do see the heat especially with her all over the world. Although some of the product vary from region to region. And then when your brand is hot your apparel is hot and your footwear is hot you automatically then sell more us.

So let me know that the performance side of a Time, Drive the lifestyle side. You also know that we have had a great success on the lifestyle side of the last 3 years.

Speaker #2: Also in addition to soccer balls which of course has been growing because of World Cup. But we have fixed most of the sourcing issues we have.

Speaker #2: And therefore you saw a 20% growth in accessories. So with that kind of background I'll hand back to you Harm where you can take them through more of the financials.

Speaker #1: Thank you Björn and of course you're looking forward to get some more details on the financials. And I want to start as always with the top line.

Harm Ohlmeyer: Of course, we're looking forward to get some more details on the financials. I want to start, as always, with the top line. As Bjørn already said, 40% currency-neutral growth has been not just a record quarter from a top-line point of view, but also has been a record H1. In addition to that, we also had the highest retail sales ever in a quarter. All of these are credit to the teams that created the product and executed on the sales side. Very pleased with the top line. When it comes to the gross profit, I would like to go a little deeper on this one and have a little bridge. I want to go on the right-hand side, starting from the bottom to the top.

The lifestyle business, um, in the quarter, uh, was of course, less so only 2%. And now we need to be honest. That part of the football product that you saw is growing, almost 80% are, of course, lifestyle products, but it's classified as Circle. So I, I think if you really honest, the consumer that used to buy a sportsman, an original product in this quarter has also bought football products. So maybe that is an ambition and a little bit misleading but it's very hard to classify this, um, accurate.

Speaker #1: As Björn already said 40% currency neutral growth has been not just a record quarter from a top line point of view but also has been a record first half and in addition to that we also had the highest retail sales ever in the quarter.

if you don't look at it here, yes, we are using our athletes, also, in lifestyle activations, but we also have a lot of non-athletes or people coming from different, uh,

Let's say, uh, parts of entertainment that are then.

Speaker #1: So all of these are credit to the teams that created the product and executed on the sales side. So very very pleased with the top line.

Speaker #1: When it comes to the gross profit I would like to go a little deeper on this one and have a little bridge. I want to go on the right hand side starting from the bottom to the top.

Used for marketing lifestyle products. You see Timothy Chalamet, you see Kendall Jenner, you see Bad Bunny, and the activations here are, of course, both global and local. Um, and there's a huge amount of activities.

Uh, going on.

Speaker #1: Of course we had US tariffs already last year in the second quarter but this year a little bit higher. it. There are some mixed effect on the sourcing cost.

Harm Ohlmeyer: Of course, we had US tariffs already last year in Q2, but this year, a little bit higher, giving the full impact of it. There's some mixed effect on the sourcing cost and a little bit on freight, and I'm just really saying a little bit on freight because it links to the war surcharge that we get into the Middle East. When it comes to FX, it's actually neutral. You might be surprised, but there's benefits on the US dollar as we hedged on this one. There are also other currencies, like the Korean won, the Japanese yen, Argentinian peso, Turkish lira, whatsoever, and these countries are meanwhile pretty significant. It's eating up the benefits on the dollar, so it's fairly neutral. We had a small amount of US tariff refund. I know there are different phases.

Speaker #1: A little bit on fright and I'm just really saying a little bit on freight because this links to the war surcharge that we get into the Middle East.

Speaker #1: And then when it comes to AFX it's actually neutral. You might be surprised but there's benefits on the US dollar. As we hedged on this one but there are also other currencies like the Korean won, the Japanese yen, Argentinian peso, Turkish lira, whatsoever.

We would still say that especially for her. We have the hottest shoes and Celts in the market, many of them has been stretched into new Silhouettes. So the sambar, for example, in to both ballerinas into mules, uh, into Mary Janes, uh, we have a lot of more profile and we have running shoes built.

Speaker #1: And these countries are meanwhile pretty significant. So it's eating up the benefits on the dollar. So it's fairly neutral. We had a small amount of US tariffs refund.

Uh on all constructions and on new constructions. And again I'm not the feeling that there's anything else in the marketplace that is hotter uh than we have across the globe.

Speaker #3: sector will start to grow again. And you will see many versions in addition to the OG Stan Smith, and you will see many activations with many different, partners.

Speaker #1: I know there are different phases. We only have recognized the first phase where we got some cash returned already. It has been a small amount and we will talk later about the remaining phases and you saw it in the notes already.

Harm Ohlmeyer: We only have recognized the first phase where we got some cash returned already. It has been a small amount, and we will talk later about the remaining phases, and you saw it in the notes already. There's probably something in H2 that we haven't recognized in Q2 in the amount of $250 to $300 million that we still would expect to come towards us at some stage. The biggest piece that is actually moving the gross margin in Q2 was very disciplined pricing, very disciplined on promotions. Of course, when you're growing 27% in e-com and 23% in retail, it has a positive channel mix as well. The upper two are actually the moving part of the 51.7% to 52.5%. Very well done and very happy with the D2C growth that we have seen.

Speaker #3: Apparel, huge growth not only in World Cup, but also in modern silhouettes, and of course fabrics. I think especially online, we look extremely fresh.

Speaker #1: There's probably something in the second half that we haven't recognized in the second quarter. In the amount of 250 to 300 million US dollar that we still would expect to come towards us at some stage.

Speaker #3: And we do see, the heat, especially with her all over the world, although some of the product vary from region to region. And then with your brand is hot, your apparel is hot, and your footwear is hot, you automatically then sell more accessories.

Speaker #1: The biggest piece that is actually moving the gross margin in the second quarter was very disciplined. Pricing very disciplined on promotions and of course when you're growing 27% in e-commerce and 23% in well.

Speaker #3: And this is also what will happen with us. Also, in addition to soccer balls, which of course has been growing because of World Cup, but we have fixed most of the sourcing issues we have, and therefore you saw a 20% growth in accessories.

Speaker #1: So the upper two are actually the moving part of the 51.7 to 50 2.5. So very well done and very happy with the DTC growth that we have seen.

Speaker #3: So with that kind of background, I'll hand back to you, Harm, where you can take them through more of the financials.

Speaker #1: Of course what you're interested in is the increase in the marketing and POS expenses and the operating overheads. So with the 30% growth in marketing and the 12% operating overheads.

Harm Ohlmeyer: Of course, what you're interested in is the increase in the marketing and POS expenses and the operating overheads. With the 30% growth in marketing and 12% operating overheads, I want to immediately go a little deeper, even so we have some leverage on the operating overheads overall. I want to explain that step-by-step, starting with marketing. Of course, in marketing, we always said we want to make the World Cup not just winning it commercially, which we no doubt did with the teams that we had and the two teams in the final. We also wanted to make sure that we use that platform to win as a brand. That's why we invested significantly more than EUR 200 million. The exact amount is actually EUR 212 million, as Bjørn said.

Speaker #1: Thank you, Björn. And, of course, you're looking forward to get some more details on the financials. and I wanna start as always with the top line.

Speaker #1: I want to immediately go a little deeper. Even so we have some leverage on the operating overheads overall. But I want to explain that step by step.

Speaker #1: As Björn already said, 40% currency neutral growth has been not just a record quarter, from a top line point of view, but also has been a record, you know, first half and in addition to that, we also had a, you know, highest retail sales ever in the quarter.

Speaker #1: Starting with the marketing. And of course in marketing we always said we want to make the World Cup not just winning it commercially which we no doubt did with the teams that we had and the two teams in the final.

Speaker #1: So all of these, are credit to the teams that created the product and executed, on the sales side. So very, very pleased, with the top line.

Speaker #1: But we also wanted to make sure that we use that platform to win as a brand. And that's why we invested significantly. More than 200 million the exact amount is actually 212 million as Björn said.

Speaker #1: When it comes to the gross profit, I would like to go a little, little deeper on this one and have a little bridge. I wanna go on the right-hand side, starting from the bottom to the top.

Speaker #1: And yes we indicated around 150 million earlier but we want to invest but it has been so successful. The two teams in the final having the ball having sell out records and North America and Latin America so we decided then short term to invest even more to pave the opportunity for the future.

Harm Ohlmeyer: Yes, we indicated around EUR 150 million earlier we want to invest, but it has been so successful with two teams in the final, having the ball, having sellout records in North America and Latin America. We decided then, short term, to invest even more to pave the opportunity for the future. Secondly, yes, with growth in e-commerce of 27% and growth in retail 23%, there's a lot of variable cost in D2C. Especially in e-commerce, there's platform fees, there's freight cost to the consumer, there's customer service fees. When you're growing that much, you might even pay a little bit more on customer service. This is what we see in e-commerce. There's a lot of variable fees. Of course, in retail, we leverage much more. We also build up some pop-up stores. We also had extra staffing in the DCs.

Speaker #1: Of course, we had US tariffs already last year in this, second quarter, but this year a little bit higher, you know, giving the, the full impact of it.

Speaker #1: there are some mixed effect on the sourcing cost. A little bit on Friday, and I'm just really saying a little bit on Friday because this links to the war surcharge that we get into the Middle East.

Speaker #1: Secondly yes with growth in e-commerce of 27% and growth in retail 23% there's a lot of variable cost in DTC. Especially in e-commerce there's platform fees.

Speaker #1: And then when it comes to AFX, it's actually neutral. you might be surprised, but there's benefits on the US dollar. You know, as we hedged on this one, but there are also other currencies like the Korean Won, the Japanese yen, Argentinian peso, Turkish lira, whatsoever.

Speaker #1: There's freight cost to the consumer. There's customer service fees. And when you're going that much you might even pay a little bit more on customer service.

Speaker #1: And, and these countries are, you know, meanwhile pretty significant. So it's eating up the benefits on the dollar. So it's fairly neutral. We had a small amount of US tariffs refund.

Speaker #1: This is what we see in e-commerce. There's a lot of variable fees. And of course in retail we leverage much more. But we also build up some pop-up stores.

Speaker #1: We also had extra staffing in the DCs. We had a lot of things that we did in order to fulfill the needs of the consumers.

Speaker #1: I know there are different phases. We only have recognized, the first phase where we got some, some retur some, some cash returned already. it has been a small amount, and we will talk later about the remaining phases and you saw it in the notes already.

Harm Ohlmeyer: We had a lot of things that we did in order to fulfill the needs of the consumers and kept investing into this one. Rest assured, maybe we could have said that earlier, but very clearly in H2, you will see a normalized marketing spend. On the full year, you should calculate in your spreadsheets around the 12%, and you will see a much lower growth in Q3 and Q4 on the operating overheads. It was really related to the D2C growth in Q2. Again, I take it on me that I could have probably explained that earlier. That's definitely a learning on my side. When we go further down the P&L, I talked about the operating profit already. Still an 8.5% operating profit with the EUR 574 million, 5% up.

Speaker #1: And kept investing into this one. And rest assured maybe we could have said that earlier but very clearly in the second half you will see a normalized marketing spend.

Speaker #1: There's probably something in the second half, that we haven't recognized in the, in in the second quarter. In the amount of 250 to 300 million US dollar, that we still would expect to come towards us at some stage.

Speaker #1: And on the full year you should calculate in your spreadsheets around the 12%. And you will see a much lower growth in Q3 and Q4 on the operating overheads.

Speaker #1: The biggest piece that is actually moving the gross margin in the second quarter was very disciplined. You know, pricing very disciplined on promotions. And of course, when you're growing 27% in e-commerce and 27, 23% in retail, it has a positive channel mix as well.

Speaker #1: It was really related to the DTC growth in the second quarter and again I take it on me that I could have probably explained that earlier.

Speaker #1: That's definitely a learning on my side. When we go further down the P&L I talked about the operating profit. Already still an 8.5% operating profit with the 574 million.

Speaker #1: So the upper two are actually the moving part of the 51.7 to 50, 2.5. So very well done and very happy with the DTC growth that we have seen.

Speaker #1: 5% up. And again it's primarily as the gross margin is compensated for the operating overhead increase in DTC. It's primarily attributed to the marketing where we have been optimistic to spend and potentially even overspend on the event.

Harm Ohlmeyer: Again, it's primarily as the gross margin is compensating for the operating overhead increase in D2C. It's primarily attributed to the marketing, where we have been opportunistic to spend and potentially overspend on the event. When we go further down the line, no surprises on the financial expenses on the income taxes. Income tax around 25%, similar to Q1, which leads to net income growth that is similar to the operating profit growth. Operating profit 5%, net income 6%. So far to the P&L, very happy where we are, very happy what we've achieved in Q2, but also in H1. Which leads to the balance sheet, I want to start with inventories again. Currency neutral up 12%, but I want to immediately go into the details of that. Again, I said on the last call, we will be around the same as end of Q1.

Speaker #1: Of course, what you, what you're interested in is, the increase in the marketing and POS expenses and the operating overheads. So with the 30%, you know, growth in marketing and the 12% operating overheads, I want to immediately go a little deeper.

Speaker #1: When we go further down the line no surprises on the financial expenses or on the income taxes. Income tax around 25%. Similar to Q1 which leads to a net income growth that is similar to the operating profit growth.

Speaker #1: Even so, we have some leverage on the operating overheads overall. but I wanna explain that, you know, step by step, starting with the marketing.

Speaker #1: and of course, in marketing, we always said we want to make the World Cup not just, you know, winning it commercially, which we no doubt did, with the teams that we had and the two teams in the final.

Speaker #1: Operating profit 5%. Net income 6%. So far to the P&L very happy where we are. Very happy what we've achieved in Q2 but also in the first half.

Speaker #1: But we also wanted to make sure that we use that platform to win as a brand. And that's where we, you know, invested significantly.

Speaker #1: Which leads to the balance sheet and I want to start with inventories again. Current neutral up 12% but I want to immediately go into the details of that.

Speaker #1: more than 200 million, the exact amount is actually 212 million as Björn said. And yes, we indicated around 150 million, you know, earlier, but we want to invest, but it has been so successful, two teams in the final, having the ball, having, you know, sell-out records in North America and Latin America.

Speaker #1: Again I said on the last call we will be around the same as end of Q1. We came in a little higher. Some of that is linked to the Middle East where we are not selling through as much as we would have wished.

Harm Ohlmeyer: We came in a little higher. Some of that is linked to the Middle East, where we are not selling through as much as we would have wished. Count it a double-digit amount there. Of course, some FX plays into the absolute amount as well. But the most important point for me is that the composition of that inventory, 90% of that inventory is current or future seasons or goods in transit as we have it on the board, and only 9% is previous seasons. That is not even enough to clear our factory outlets and our planned buy for the factory outlets globally is north of 50%. It gives you an indication the inventory is very healthy and I have no concerns for H2. Secondly, it comes to accounts receivables.

Speaker #1: Counted a double digit amount there. And of course some FX placed into the absolute amount as well. But the most important point for me is that the composition of that inventory.

Speaker #1: So we decided then, you know, short term to invest even more to pave the, the, the opportunity for the future. Secondly, yes, with growth in e-commerce of 27% and growth in retail 23%, there's a lot of variable cost in DTC.

Speaker #1: And 90% of that inventory is current or future seasons. Or goods in transit as we have it on the boat. And only 9% is previous seasons.

Speaker #1: Especially in e-commerce, there's platform fees, there's freight cost to the consumer, there's customer service fees, and when you're growing that much, you might even pay a little bit more customer service.

Speaker #1: And that is not even enough to clear our factory outlets and our planned buy for the factory outlets globally is north of 50%. So it gives you an indication the inventory is very very healthy and I have no concerns for the second half.

Speaker #1: This is what we see in e-commerce. There's a lot of variable fees. And of course, in retail, we leverage much more, but we also build up some pop-up stores.

Speaker #1: We also had extra staffing in the DCs. We had a lot of things that we did in order to fulfill the needs of the consumers.

Speaker #1: Secondly it comes to accounts receivables. They are slightly up with 13%. A little bit higher than what you have seen on the wholesale growth.

Harm Ohlmeyer: They are slightly up with 30%, a little bit higher than what you have seen on the wholesale growth. There's some timing effects in there. We, of course, work with some of our partners as well to make sure we support them in the right way during the World Cup. That is also something that you will see coming down the Q3 as we're collecting post-World Cup. Payments have normalized, and of course, operating working capital is slightly up compared to inventories and accounts receivables who combine these two. Talking about operating working capital, of course, that direction doesn't look good, as you know, we invested into holding the inventory and receivables for the World Cup.

Speaker #1: And kept investing into this one. And rest assured, maybe we could have, you know, said that earlier, but very clearly in the second half, you will see a normalized marketing spend.

Speaker #1: Some timing effects in there. We of course worked with some of our partners as well to make sure we support them in the right way during the World Cup.

Speaker #1: But that is also something that you will see coming down the third quarter as we collecting post World Cup payables have normalized. And of course operating working capital is slightly up compared to inventories and accounts receivables if you combine these two.

Speaker #1: And on the full year, you should, you know, calculate in your spreadsheets around the 12%, and you will see a much lower growth in Q3 and Q4 on the operating overheads and what's really related, to the DTC growth in the second quarter.

Speaker #1: Talking about operating working capital of course that direction doesn't look good. But as you know we invested into holding the inventory and receivables for the World Cup.

Speaker #1: And again, I take it on me that I could have probably explained that earlier. That's definitely a learning on my side. When we go further down, the, the P&L, I talked about the operating profit.

Speaker #1: It was the right decision to win this one commercially. And our guidance is 22 to 23%. And there's no reason to not believe that we get to that guidance until the end of the year and you can hold me personally accountable for it that we get to that guidance of 22 to 23%.

Harm Ohlmeyer: It was the right decision to win this one commercially. Our guidance is 22% to 23%, there's no reason to not believe that we get to that guidance until the end of the year, you can hold me personally accountable for it, that we get to that guidance of 22% to 23%. Also that is going the right direction. To sum it all up, you see it also on the cash and cash equivalents. Despite doing a share buyback of EUR 500 million the first tranche and then already EUR 250 million on the second tranche and paying a dividend of EUR 500 million, we added to our cash and we are almost at EUR 1.2 billion. Also that is something where we made tremendous improvement in the H1 compared to last year, there's more to come.

Speaker #1: already, still an 8.5% operating profit with the 574 million, 5% up. And again, it's primarily as the gross margin is compensated for the operating overhead increase in DTC, it's primarily attributed to the marketing where we have been opportunistic to spend and potentially even overspend on the event.

Speaker #1: So also that is going the right direction. To sum it all up you see it also on the cash and cash equivalents. Despite doing a share buyback of 500 million the first tranche and then already 250 million on the second tranche.

Speaker #1: When we go further down the line, no surprises on the financial expenses or on the income taxes. Income tax around 25%. similar to Q1, which leads to a net income growth that is similar to the operating profit growth, operating profit 5%, net income 6%.

Speaker #1: And paying a dividend of 500 million. We added to our cash and we are almost at 1.2 billion. Also that is something where we made tremendous improvement in the first half compared to last year.

Speaker #1: And there's more to come so I'm very optimistic from a cash flow generation point of view there's another 1.2 to 1.3 billion cash flow coming in the second half.

Speaker #1: So far to the P&L, very happy where we are, very happy what we've achieved in Q2, but also in the first half. which leads to the balance sheet, and I wanna start with inventories again.

Harm Ohlmeyer: I'm very optimistic from a cash flow generation point of view. There's another EUR 1.2 to 1.3 billion cash flow coming in the H2 and will help us to finish on a very strong cash balance for the end of the year. Talking about the share buyback and the dividends, EUR 500 million has been done in the first tranche. We already did EUR 250 million, around EUR 250 million in the second tranche. There's 1,380,000 shares being bought back. Together with the dividend, we will return to shareholders around EUR 1.5 billion this year. You all know we could not have done that without being in such a healthy situation as a company. Very, very happy where we are.

Speaker #1: And will help us to finish on a very strong cash balance for the end of the year. Talking about the share buyback and the dividends.

Speaker #1: Current neutral up, you know, 12%, but I want to immediately go into the details of that. again, I, I said on the last call, we will be around the same as end of Q1.

Speaker #1: 500 million has been done in the first tranche. We already did 250 million around 250 million the second tranche with 1,380,000 shares being bought back.

Speaker #1: we came in a little higher, some of that is linked to the Middle East, where we are not selling through as much as we would have wished.

Speaker #1: So together with the dividend we will return to shareholders around 1.5 billion this year. And you all know we could not have done that without being in such a healthy situation as a company.

Speaker #1: you know, counted, you know, a double-digit amount there. And of course, some FX plays into the absolute amount as well. But the most important point for me is that the composition of that inventory.

Speaker #1: So very very happy where we are. You also see that with the cash and cash equivalents how it's developing. Despite the share buyback and also in the adjusted net borrowings we are finally going the right direction again.

Speaker #1: And 90% of that inventory is current or future seasons, or goods in transit as we have it on the boat. And only 9% is previous seasons, and that is not even enough to clear our factory outlets and our planned buy for the factory outlets globally is north of 50%.

Harm Ohlmeyer: You also see that with the cash and cash equivalents, how it's developing despite the share buyback and also in adjusted net borrowings, we are finally going the right direction again, moving from EUR 5.5 to 5.2 billion. What's important for our S&P and Moody's, that also leverage ratio is consistently remaining below our policy of 2.0. We are actually improving from 1.7 to 1.6. Also there, we are very diligent on how we're using our cash and how we return to shareholders, we are feeling very good about the H2. With that, talking about the H2, back to Bjørn.

Speaker #1: Moving from 5.5 to 5.2 billion. And what's important for our S&P and Moody's that also leverage ratio is consistently remaining below our policy of 2.0.

Speaker #1: So it gives you an indication the inventory is very, very healthy, and I have no concerns for the second half. Secondly, it comes to accounts receivables.

Speaker #1: So we are actually improving from 1.7 to 1.6. So also there we have very diligent on how we're using our cash and how we return to shareholders.

Speaker #1: they are slightly up with 30%, a little bit higher than what you have seen on the wholesale growth. And some timing effects in there, we of course work with some of our partners as well to make sure we support them in the right way during the World Cup.

Speaker #1: And we are feeling very good about the second half. With that talking about the second half back to Björn.

Speaker #2: Thanks Arm. Yeah you've seen this slide many times. When we started three and a half years ago we had some issues and we said that we needed that time to go through the process and that in 26 we will then be a healthy and a successful company.

Speaker #1: But that is also something that you will see coming down the third quarter as we collecting, you know, post-World Cup payables have normalized. And of course, operating working capital is slightly up compared to inventories and accounts receivables if you combine these two.

Bjørn Gulden: Thanks, Harm. You've seen this slide many times. When we started three and a half years ago, we had some issues, and we said that we needed that time to go through the process and that in 2026 we will then be a healthy and a successful company. We can always do better, but we felt that we have delivered what we told you, and feel that the platform for this company is actually in great shape. The ambition, again, for each market should be the number one in the market. Of course, they will not all achieve it, but at least we're having a discussion what is necessary in the different markets. It should not be a surprise that outside of the US, we are starting to actually be number one in many markets.

Speaker #2: And we can always do better but we felt that we have delivered what we told you and feel that the platform for this company is actually in great shape.

Speaker #1: Talking about operating working capital, of course, that direction doesn't look good, but as you know, we invested into holding the inventory and receivables for the World Cup.

Speaker #1: It was the right decision to win this one commercially, and our guidance is 22 to 23%. And there's no reason to, to not believe that we get to that guidance until the end of the year and you can hold me personally accountable for it, that we get to that guidance of 22 to 23%.

Speaker #2: The ambition again for each market should be the number one in the market. Of course they will not all achieve it but at least we having a discussion what is necessary in the different markets.

Speaker #2: And it should be a surprise that outside of the US we are starting to actually be number one in many markets. In the US I've said many times it would be unrealistic knowing how far behind we are and that we have many many years that we need to invest to kind of be competitive.

Speaker #1: so also that is going the right direction. To sum it all up, you see it also on the cash and cash equivalents. Despite you know, inve you know, doing a share buyback of 500 million the first tranche and then already 250 million on the second tranche, and paying a dividend of 500 million, we added to our cash and we are almost at 1.2 billion.

Bjørn Gulden: In the US, I've said many times it would be unrealistic knowing how far behind we are, and that we have many years that we need to invest to kind of be competitive with the leader. We still believe that we have plans, investments, and resources then to double our business. I think you saw growing 15% and 17%, we are on the way, also to get closer to that. The business model that we talk about, you've seen many times, too, to be a global brand with a local mindset. I hope you agree that you have to start with the consumer and the athlete. To do that, you need to be close to him and her, and that happens in most markets and regions. Then you need a strong global headquarter that facilitates for innovation, concept systems, and the frame.

Speaker #2: With the leader but we still believe that we have plans investments and resources then to double our business and I think you saw growing 15 70%.

Speaker #1: Also, that is something where we made tremendous improvement in the first half compared to last year, and there's more to come. So I'm very optimistic from a cash flow generation point of view, there's another, you know, 1.2 to 1.3 billion cash flow coming in the second half.

Speaker #2: We are on the way also to get closer to that. The business model that we talk about you've seen many times too. To be a global brand with a local mindset.

Speaker #2: I hope you agree that you have to start with the consumer and the athlete. And to do that you need to be close to him and her and that happens in most markets and regions.

Speaker #1: And we'll help us, to finish on a very strong you know, cash balance for the end of the year. Talking about the share buyback and the dividends, you know, 500 million has been done in the first tranche.

Speaker #2: And then you need a strong global headquarter that facilitates for innovation concept systems and the frame. And that we then need a network of people both local and global that work together and it's fair to say that we now have a leadership group globally of 32 people.

Speaker #1: We already did 250 million around 250 million the second tranche, with 1,380,000 shares being bought back. So together with the dividend, we will return to shareholders, shareholders around 1.5 billion this year.

Bjørn Gulden: That we then need a network of people, both local and global, that work together. It's fair to say that we now have a leadership group globally of 32 people. We spent also two days after World Cup in New York. I feel very, very strong about the team, and feel that we have made many changes. Most of the people, if not almost all, are internal promotions. They know adidas, they have the right culture, which adidas should stand for, and I feel we are a really, really good team. It should also not be a surprise that then we locally need a footprint in product and activations that fits the market. When you see on the left side, we added the Penn State and University of Tennessee colleges, universities to be more visible in American sports.

Speaker #1: And you all know, we could not have done that without being in such a healthy situation as a company. So very, very happy where we are.

Speaker #2: We spent also two days after World Cup in New York. And I feel very very strong about the team and feel that we have made many many changes and most of the people if not almost all are internal promotions.

Speaker #1: You also see that, with the cash and cash equivalents, how it's developing. Despite the share buyback and also in the dusted net borrowings, we are finally going the right direction again, moving from 5.5 to 5.2 billion.

Speaker #2: So they know Adidas. They have the right culture which Adidas should stand for. And I feel very really really good team. It should also not be a surprise that then we locally need a footprint in product and activations that fits the market.

Speaker #1: And what's important for our, you know, you know, S&P and Moody's, that also leverage ratio is consistently remaining below our policy of 2.0. So we are actually improving from 1.7 to 1.6.

Speaker #1: So also there, we are very diligent on how we're using our cash and how we return to shareholders and we are feeling very good about the second half.

Speaker #2: And when you see on the left side we added the Penn State and Tennessee colleges universities to be more visible in American sports. And that's a journey that we probably should have done a long time ago.

Speaker #1: With that, talking about the second half, back to Björn.

Bjørn Gulden: That's a journey that we probably should have done a long time ago, but that we have started and John and his team are very aggressive that side. That is the way then to be a real American sport brand. The same goes for other markets. Here you see Korea when it gets to baseball. You see Ranveer Singh, who's a cricket player that we then in India are using also, in our originals and lifestyle collection. In China, which is on fire, we even have a premium luxe collection above everything because we clearly see that the consumer with a lot of money is also trending towards our brand because of what the local team is doing with our global concepts. The same go for stores. The rule is to activate what is relevant for the consumer.

Speaker #2: But that we have started and Jonah and his team very aggressive of that side. And that is the way then to be a real American sports brand.

Speaker #2: Thanks, Arm. yeah, you've seen this slide many times. When we started three and a half years ago, we had some issues, and we said that we needed that time to go through the process and that in '26, we will then be a healthy and, and a successful company.

Speaker #2: At the same goes for all the markets here. You see Korea when it gets to baseball. You see runway Singh who's a cricket player that we then in India using also in our regionals and lifestyle collection.

Speaker #2: And you know, we can always do better, but we felt that we have delivered what we told you, and feel that the platform for this company is actually in great shape.

Speaker #2: And in China which is on fire we even have a premium looks collection above everything. Because we clearly see that the consumer with a lot of money is also trending towards our brand.

Speaker #2: the ambition, again, for each market should be the number one in, in the market. Of course, they will not all achieve it, but at least we are having a discussion what is necessary in the different markets.

Speaker #2: Because of what the local team is doing with our global concepts. And the same goes for stores. The rule is to activate what is relevant for the consumer.

Speaker #2: and it should be a surprise, that outside of the US, we are starting to actually be number one in many markets. In the US, I've said many times, it will be unrealistic knowing how far behind we are and that we have many, many years that we need to invest to kind of be competitive.

Speaker #2: And that's why at any point in time around the world there might be different activation should not be a surprise for you that Barcelona right now is still celebrating the World Cup and the win of Spain.

Bjørn Gulden: That's why at any point in time around the world, there might be different activation. Should not be a surprise for you that Barcelona right now is still celebrating the World Cup and the win of Spain, while in other areas, we have turned into lifestyle or local partners. Again, there's a lot more energy in the teams when they can do what they think is relevant. The same goes for, I would say, normal activations. Why activate something in a market that is not relevant? I think we have found the recipe for that, and the energy in the markets are very, very, very high. Coming out of the World Cup, you might say, So what is happening now? Well, right now in soccer, we're launching all the club jerseys. Remember last year, the start of the sales of club jerseys was slow.

Speaker #2: with the leader, but we still believe that we have plans, investments, and resources then to double our business and I think you saw growing 15, 70%.

Speaker #2: While in other areas we have turned into lifestyle or local partners and again there's a lot more energy in the teams when they can do what they think is relevant.

Speaker #2: we are on the way, also to get closer to that. The business model that we talk about, you've seen many times too, to be a global brand with a local mindset.

Speaker #2: And the same goes for I would say normal activations. Why activate something in a market that is not relevant and I think we have found the recipe for that and the energy in the markets are very very very high.

Speaker #2: I hope you agree that you have to start with the consumer and the athlete, and to do that, you need to be close to him and her and that happens in most mar-markets and regions.

Speaker #2: And then you need a strong global headquarter that facilitates for innovation, concept, systems, and the frame. and that we then need a network of people, both local and global, that work together and, and it's fair to say that we now have a leadership group globally of 32 people.

Speaker #2: Coming out of the World Cup you might say so what is happening now. Well right now in soccer we launching all the club jerseys.

Speaker #2: And remember last year the start of the sales of club jerseys was slow. Now it's actually the opposite. And I think it has to do coming out of the World Cup is a huge interest in football again.

Bjørn Gulden: Now it's actually the opposite. I think it has to do coming out of the World Cup, there's a huge interest in football again. Of course, when I look at our product, I think both with the home jersey and with the three, four away jerseys, we look extremely good, and our bookings for the time being also very, very good sales numbers. In the women's training area, you have seen that many brands have had collections that have been either with collab partners or there has been brand that not necessarily come from sport-sport. Instead of doing a collab, we then decided to do Originals Sport. We have that consumer through our fashion and especially on the footwear side. We have then designed, with her in mind, an OG sport collection with functional fabrics, great colors, very, I would say, functional and good-looking cuts.

Speaker #2: we spent also, two days after, World Cup, in New York. and I feel very, very strong about the team, and feel that we have made, you know, many, many changes, and most of the people, if not almost all, are internal promotions.

Speaker #2: And of course when I look at our product I think both with the home jersey and with the tree fall away jerseys we look extremely good.

Speaker #2: And our bookings for the time being also very very good sales numbers. In the women's training area you have seen that many brands have had collections that have been either with collab partners or there has been brand that not necessarily come from sport.

Speaker #2: So they know Adidas, they have the right culture, which Adidas should stand for. And I feel we are a really, really good, team. It should also not be a surprise that then we locally need a footprint in product and activations that fits the market.

Speaker #2: Sport. Instead of doing a collab we then decided to do original sport. We have that consumer through our fashion and especially on the footwear side.

Speaker #2: And when you see on the left side, we added the Penn State and Tennessee, colleges, universities, to be more visible in American sports. And that's a journey that we probably should have done a long time ago, but that we have started and Björn and his team, very aggressive on that side.

Speaker #2: And we have then designed with her in mind an OG sport collection with functional fabrics great colors very very I would say functional and good looking cuts.

Speaker #2: And that is the way then to be a real American sports brand. At the same goes for other markets here. You see, you know, Korea, when it gets to baseball, you see, runway Singh, who's a cricket player that we then in India using also, in our regionals and lifestyle collection.

Speaker #2: Been in the stores around the world for a week. And the reaction both from what we can measure in interest but also in sales has been great.

Bjørn Gulden: It's been in the stores around the world for a week, and the reaction, both from what we can measure in interest but also in sales, has been great. So another dimension of being very, very strong with her. You heard about Hyperboost, which we started in comfort running. We are now extending the form into lifestyle. So here you see Hyperboost Euphoria, and the same thing here, initial reaction great. Then we will build out bigger collections with the Hyperboost as we go forward. On the fashion side, we have a great cooperation with ASOS. You've probably seen it, that we do test collections almost as fashion shows. Depending on the reaction, we then scale certain items. We do this on a regular basis. So far, it's only been for her, but going forward, it will now also be for him.

Speaker #2: So another dimension of being very very strong with her. You have heard about Hyper Boost which we started in comfort running. We are now extending the form into lifestyle.

Speaker #2: And in China, which is on fire, we even have a premium looks collection, a bow everything. Because we clearly see, that the consumer with a lot of money is also trending towards our brand.

Speaker #2: So here you see Hyper Boost Euphoria and the same thing here initial reaction great. And then we will build out bigger collections with the Hyper Boost as we go forward.

Speaker #2: Because of, what the local team is doing with our global concepts. And the same goes for stores. the rule is to activate what is relevant, for the consumer and that's why at any point in time around the world, there might be different activation should not be a surprise for you that Barcelona right now is still, celebrating the World Cup and the win of Spain.

Speaker #2: On the fashion side we have a great cooperation with ASOS you probably seen it that we do test collections almost as fashion shows. And depending on the reaction we then scale certain items.

Speaker #2: We do this on a regular basis. So far it's only been for her. But going forward it will now also be for him. And it's a very unique business model that has been very successful both for them and for us.

Speaker #2: While in other areas, we have turned into lifestyle or local partners, and again, there's a lot more energy in the teams, when they can do what they think i-is, relevant.

Bjørn Gulden: It's a very unique business model that has been very successful both for them and for us. When we look at it, both on the performance side and on the lifestyle side, we feel that we have enough momentum to continue the growth. In addition to what I just told you about, we will also start to load up the FIFA Women's World Cup. That will happen in 2027, but you will see activations already in 2026. You know it's in Brazil, and I think we all agree we need to lift the activities around women's soccer. You will have a new Adizero Pro 5 coming for Berlin Marathon, where I wouldn't be surprised if she runs another world record. Then we will have Anthony Edwards coming with his third version of a signature shoe.

Speaker #2: So when we look at it both on the performance side and on the lifestyle side we feel that we have enough momentum to continue the growth.

Speaker #2: In addition to what I just told you about we will also start to load up the FIFA Women's World Cup that will happen in 27.

Speaker #2: But you will see activations already in 26. You know it's in Brazil and I think we all agree we need to lift the activities around women's soccer.

Speaker #2: You will have a new Adi Zero Pro 5 coming for Berlin Marathon where I wouldn't be surprised if you run another world record. And then we will have Anthony Edwards coming with his third version of a thing that you shoot.

Speaker #2: This is just part of it that we think will assure then the growth and the interest in the brand also in the second half of the year.

Bjørn Gulden: This is just part of it that we think will assure then the growth and the interest in the brand also in the H2 of the year. When you look at the guidance, you know we started with high single digits and EUR 2.3 billion in sales. We updated the guidance this morning and said we now believe in 9% to 10% growth, and we kept the profit at EUR 2.3 billion. I'm sure in your spreadsheet, you said, this means then 6% growth in the H2. Yes, that's the math. The reason why we don't go higher is that if you look at our wholesale business, it's currently trending at 6% and 7%, and you cannot plan your D2C business higher because you don't know.

Speaker #2: When you look at the guidance you know we started with high single digit and 2.3 billion in sales. We updated the guidance this morning and said we now believe in 9 to 10 percent growth.

Speaker #2: And we kept the profit at 2.3 billion. I'm sure in your spreadsheet you said so this means then 6 percent growth in the second half.

Speaker #2: Yes that's the math. The reason why we don't go higher is that if you look at our wholesale business it's currently trending at 6 7 percent.

Speaker #2: And you cannot plan your D2C business higher because you don't know. But there is a chance when I look at the trend that it will be higher and then of course there is an upside to this.

Bjørn Gulden: There is a chance when I look at the trend that it will be higher, and of course, there is an upside to this. I also will tell you that the EUR 2.3 billion does not include any tariffs going into the future. There's a small booking in Q2 that is not really relevant. As you know, there is about EUR 300 million sitting there, where there is a pretty high probability that we will get it. Far, we haven't booked it. I know competitors have. We will, of course, tell you if we book it. That was through 2026. We told you that 2027 and 2028, we should continue the momentum. We, as a company, will not change our business plan because we believe in our business model, we believe that is the right one.

Speaker #2: I also will tell you that the 2.3 billion does not include any tariffs going into the future. There is a small booking in Q2 that is not really relevant.

Speaker #2: And as you know there is about 300 million sitting there where there is a pretty high probability that we will get it. So far we haven't booked it.

Speaker #2: I know competitors have. But we will of course tell you if we book it. That was through 26. We then told you that 27 and 28 we should continue the momentum.

Speaker #2: We as a company will not change our business plan because we believe and our business model we believe that is the right one. But of course there are improvements that we can do when it gets to continue to decrease complexity and optimize processes systems and organization.

Bjørn Gulden: Of course, there are improvements that we can do when it gets to continue to decrease complexity and optimize processes, systems, and organization. We will, of course, utilize AI to help us on this. I do think you also agree, we need short-term to be successful, but without putting long-term in danger. We feel, although looking at today you might disagree, that we are delivering what we said, and that we're giving adidas the platform to be a very successful company going forward. Just to finalize, we still confirm that we believe we can grow EUR 2 billion every year in 2027 and 2028, which will then bring us into the famous double-digit EBIT margin. Which, again, under a certain condition, are not many brands who are doing. I think with that, we have kind of told the story, and I'm handing back again to you, Sebastian.

Speaker #2: And we will of course utilize AI to help us on this. And I do think you also agree we need short term to be successful but without putting long term in danger.

Speaker #2: And we feel although looking at today you might disagree that we are delivering what we said. And that we're giving Adidas the platform to be a very successful company going forward.

Speaker #2: And then just to finalize we still confirm that we believe we can grow 2 billion every year in 27 and 28 which will then bring us into the famous double digit EBIT margin which again under the certain condition are not many brands who are doing.

Speaker #2: So I think with that we have kind of told the story. And I'm handing back again to you Sebastian.

Speaker #1: Yeah thanks very much Björn. Maura we are now ready to take questions.

Sebastian Steffen: Yeah, thanks very much, Bjørn. Maura, we are now ready to take questions.

Speaker #3: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your telephone. You will hear a tone to confirm that you have entered the queue.

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode, and eventually turn off the volume from the webcast while asking a question. In the interest of time, please limit yourself to two questions. Anyone who has a question may press star and one at this time. The first question comes from the line of Grace Smalley from Morgan Stanley. Please go ahead.

Speaker #3: If you wish to remove yourself from the question queue you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question.

Speaker #3: In the interest of time please limit yourself to two questions. Anyone who has a question may press star and one at this time. The first question comes from the line of Grace Smalley from Morgan Stanley.

Speaker #3: Please go ahead.

Speaker #4: Hi good afternoon. Thank you. My first question will be on the footwear business. If you could just go into further detail on what you're seeing in lifestyle footwear and how would you think about the outlook for the lifestyle footwear into the second half of this year and into 2027.

Grace Smalley: Hi. Good afternoon. Thank you. My first question will be on the footwear business. If you could just go into further detail on what you're seeing in lifestyle footwear and how we should think about the outlook for the lifestyle footwear into the H2 of this year and into 2027. When you look at the total footwear business, would you expect it to continue to decelerate from here, and could it potentially turn negative into the H2? Do you actually expect the business to improve from here as, hopefully, the kind of competitive dynamic changes? My second question would just be on the US. Very clear that you executed very well in the World Cup in the Q2.

Speaker #4: And when you look at the total footwear business would you expect it to continue to decelerate from here and could it potentially turn negative into the second half or do you actually expect the business to improve from here as hopefully the kind of competitive dynamic changes.

Speaker #4: And then my second question would just be on the US very clear that you executed very well on the World Cup in the second quarter.

Speaker #4: Beyond sort of the short term benefit from the World Cup how are you thinking about the long term impact and whether you've been able to use this event really as a catalyst to gain lasting consumers but also I guess lasting shelf space with your US retail partners as well.

Grace Smalley: Beyond sort of the short-term benefit from the World Cup, how are you thinking about the long-term impact and whether you've been able to use this event really as a catalyst to gain lasting consumers, but also, I guess, lasting shelf space with your US retail partners as well? Thank you very much.

Speaker #4: Thank you very much.

Speaker #2: Yeah good questions. I do think when you do your store checks you will see that the lifestyle footwear especially for him is currently pretty heavily discounted.

Bjørn Gulden: They are good questions. I do think when you do your store checks, you will see that the lifestyle footwear, especially for him, is currently pretty heavily discounted. That is because major brands have quite some inventory that have been sold in, and very famous, what you would say, franchises that used to be full price are now currently at a discount. That means that newness onto the shelf for full price is not easy, at least not scaled. We see that if we keep the styles on our D2C business, we are able then to keep a higher price. Then you know that this is a fine balance. I do think that you will see a flat-ish lifestyle shoe market in the beginning of the year, hopefully, you will see an improvement in Q4, Q1.

Speaker #2: And that is because major brands have quite some inventory that have been sold in. And very famous what should I say franchises that used to be full price are now currently at a discount.

Speaker #2: That means that newness onto the shelf of full price is not easy at least not scaled. And we see that if we keep the styles on our D2C business we are able then to keep a higher price.

Speaker #2: And then you know that this is a fine balance. I do think that you will see a flattish lifestyle shoe market in the beginning of the year and hopefully you will see an improvement in Q4 Q1.

Speaker #2: I guesstimate and you know I cannot tell you what will happen in D2C because I don't know. But if I look at our order book we should turn into growth again in footwear in Q4.

Bjørn Gulden: I guesstimate, I cannot tell you what will happen in D2C because I don't know, if I look at our order book, we should turn into growth again in footwear in Q4, because that's what we see. That could be accelerated if the inventory in general, also from other companies in the chains, are changing. When it gets to the World Cup, yes, it's clearly that many retailers, in addition to us in US, made money with us during this time, that when a retailer makes money with you, he or she would, of course, like to make more money. There is a big chance that we will then have increasing buys and more shelf space with many retailers.

Speaker #2: Because that's what we see. And that could be accelerated if the inventory in general also from other companies in the chains are changing. When it gets to the World Cup yes it's clearly that many retailers in addition to us in US made money with us.

Speaker #2: During this time and that when the retailer makes money with you he or she would of course like to make more money. So there is a big chance that we will then have increasing buys and more shelf space with many retailers.

Speaker #2: Had the feeling that all the big retailers also performance have a different view on our brand and our business than they've had before. And that our local team with investments that they've done in college sport in merchandise but also the senior signing of baseball players and American football players and also doing local campaigns we are on the way of being also more seen as a sports brand for the consumer both him and her in the US.

Bjørn Gulden: Had the feeling that all the big retailers, also in performance, have a different view on our brand and our business than they've had before, that our local team, with investments that they've done in college sport, in merchandise, also the signing of baseball players and American football players, also doing local campaigns, we are on the way of being also more seen as a sports brand for the consumer, both him and her, in the US. If you then add the Originals Sport, which actually was targeting her in the US, it was kind of designed with an American female consumer in mind, I do think that you will see more three stripes and more of our product also in the performance area. I think on footwear, we are already there with her.

Speaker #2: If you then add the OG sport which actually was targeting her in the US it was kind of the sign with an American female consumer in mind.

Speaker #2: I do think that you will see more three stripes and more of our product also in the performance on footwear we are already there with her.

Speaker #1: Face with your U.S. retail partners as well. Thank you very much.

Speaker #2: yeah, good questions. I do think when you do your store checks you will see that the lifestyle footwear, especially for him, is currently pretty heavily discounted.

Speaker #2: And we of course hope with all the things we have in the pipeline that we can get more shelf space also for him in American street retail and we are pretty optimistic coming out of a 15 17 percent growth in the US for the future.

Bjørn Gulden: We of course hope with all the things we have in the pipeline, that we can get more shelf space also for him, in American street retail. We are pretty optimistic coming out of a 15% to 17% growth in the US for the future. As you know, that's also the market where we need more growth. Of course, it's the one that we are behind, by a stretch, and have a lot of work to do. I would say positive development.

Speaker #2: And that is because major brands have quite some inventory that has been sold in, and very famous—what should I say—franchises that used to be full price are now currently at a discount.

Speaker #2: But as you know that's also the market where we need more growth. And of course it's the one that we are behind by a stretch.

Speaker #2: That means that newness onto the shelf for full price is not easy, at least not at scale. And we see that if we keep the styles on our D2C business, we are able then to keep a higher price.

Speaker #2: And have a lot of work to do. But I would say positive development.

Speaker #4: Great. Thank you very much.

Grace Smalley: Great. Thank you very much.

Speaker #2: And then, you know that this is a fine balance. I do think that you will see a flattish lifestyle shoe market in the beginning of the year, and hopefully you will see an improvement in Q4 and Q1.

Speaker #3: Next question comes from the line of Geoff Lowery from Rothschild & Co Redbird. Please go ahead.

Operator: Next question comes from the line of Geoff Lowery from Rothschild & Co Redburn. Please go ahead.

Speaker #5: Yeah hi there. Just coming back on this footwear performance issue at the moment. Is this performance of the footwear any stronger in your own DTC relative to your sell out in wholesale?

Geoff Lowery: Yeah. Hi there. Just coming back on this footwear performance issue at the moment. Is this performance of the footwear any stronger in your own DTC relative to your sell out in wholesale? I am just looking for things that could give us encouragement about the potency of that product when the wholesale overstock completes. The second question is a rather basic one. For Q2, was 5% EBIT growth the profit plan or is there EUR 50 million, EUR 60 million of investment in marketing that came into the quarter that perhaps wasn't there three or six months ago in your plan? Thank you.

Speaker #2: I guesstimate, and you know, I cannot tell you what will happen in D2C because I don't know, but if I look at our order book, we should turn into growth again in footwear in Q4.

Speaker #2: Because that's what we see. And that could be accelerated, you know, if the inventory in general also from other companies in the chains are changing.

Speaker #5: I'm just looking for things that could give us encouragement about the potency of that product when the wholesale overstock completes. And then the second question is is a rather basic one.

Speaker #2: When it gets to the World Cup, yes, it's clearly that many retailers in addition to us in U.S. made money with us during this time.

Speaker #5: For Q2 was 5 percent EBIT growth the profit plan or is there 50 60 million of investment in marketing that came into the quarter that perhaps wasn't there three or six months ago in your plan.

Speaker #2: And that when the retailer makes money with you, he or she would of course like to make more money. So there is a big chance that we will then have increasing buys and more sales space with many retailers.

Speaker #5: Thank you.

Speaker #2: Yes the sell through in our own channel is higher than in wholesale. That's correct. But that's also because the offer is wider. And you think on performance I would actually say that the sell through also in wholesale is strong.

Bjørn Gulden: Yes. The sell-through in our own channel is higher than in wholesale. That's correct. That's also because the offer is wider. You think on performance, I would actually say that the sell-through also in wholesale is strong. It's the lifestyle, both sell-in and sell out, especially for him, which is lagging currently. It has been lagging, I would say, for the last six months because of the discount that is in the market. When it gets to your second questions on if there was any additional marketing, yes, there was some activations that came on top. I think we said that we have an extra marketing of about EUR 212 million, and I think that the first guesstimates we had was around EUR 150. It is true that during the tournament, we took decisions to actually activate more based on local needs. That is correct.

Speaker #2: Had the feeling that all the big retailers also performance have a different view on our brand and our business than they've had before. And that our local team with investments that they've done in college sport, in merchandise, but also the senior signing of baseball players and American football players, and also doing local campaigns, we are on the way of being also more seen as a sports brand for the consumer both him and her in the U.S.

Speaker #2: It's the lifestyle both selling and sell out especially for him which is lagging currently. And it has been lagging I would say for the last six months.

Speaker #2: Because of the discount that is in the market. When it gets to your second questions on if there was any additional marketing yes there was some activations that came on top.

Speaker #2: If you then add the OG sport, which actually was targeting her in the U.S., it was kind of designed with an American female consumer in mind. I do think that you will see more Three Stripes and more of our product also in the performance area.

Speaker #2: I think we said that we had an extra marketing of about 212 million and I think that the first guesstimates we had was around 150.

Speaker #2: So it is true that during the tournament we took decisions to actually activate more based on local needs. That is correct.

Speaker #2: And I think on footwear, we are already there with her. And we, of course, hope with all the things we have in the pipeline, that we can get more sales space also for him in American street retail and we are pretty optimistic coming out of a 15, 17 percent growth in the U.S.

Speaker #5: Great. Thank you very much.

Geoff Lowery: Great. Thank you very much.

Speaker #3: Next question comes from the line of Anisha Sherman from Bernstein Société Générale. Please go ahead.

Operator: Next question comes from the line of Aneesha Sherman from Bernstein Societe Generale. Please go ahead.

Speaker #6: Thank you so much. I have two questions please. One kind of following on the prior question around wholesale. You've talked about holding back wholesale growth while competitors are being very promotional.

Speaker #2: for the future. But as you know, that's also the market where we need more growth. And of course, it's the one that we are behind, you know, by a stretch.

Aneesha Sherman: Thank you so much. I have two questions, please. One kind of following on the prior question around wholesale. You've talked about holding back wholesale growth while competitors being very promotional. As we're seeing some of those big promotional phases with these big retailers starting to wind down, we've seen that in North America, we've seen that with some recent announcements in China. Are you more optimistic about opening up wholesale sell-in, and does that help Q3 at all, or is that more Q4 into Q1? Related to this, a second question around operating overheads. You're currently very DTC heavy, which as you mentioned, is higher cost in terms of overheads. How important is that wholesale DTC balance for you to be able to meet your midterm goal of reaching sub 30% operating overheads? Thank you.

Speaker #2: And have a lot of work to do. But I would say positive

Speaker #6: As we're seeing some of those big promotional phases with big retailers starting to wind down. We've seen that in North America. We've seen that with more optimistic about opening up wholesale sell in and does that help Q3 at all or is that more Q4 into Q1?

Speaker #1: Great. Thank you very much. Next question, counsel on the line of Josh Lowery from Rothschild & Co., Redbird. Please go ahead.

Speaker #6: And then a second related to this a second question around operating overheads. You're currently very DTC heavy which as you mentioned is higher cost in terms of overhead.

Speaker #3: Yeah, hi there. Just coming back to this footwear performance issue at the moment. Is the performance of the footwear any stronger in your own DTC relative to your sell-out in wholesale?

Speaker #6: How important is that wholesale DTC balance for you to be able to meet your midterm goal of reaching sub 30 percent operating overhead? Thank you.

Speaker #3: I'm just looking for things that could give us encouragement about the potency of that product when the wholesale overstock completes. And then the second question is, is a rather basic one.

Speaker #2: The second question is that should you only be DTC then your margin is higher and your overhead is higher. Then you know the 30 percent doesn't mean anything.

Bjørn Gulden: The second question is that should you only be D2C, then your margin is higher and your overhead is higher, then the 30% doesn't mean anything. The 30% is based on a 60/40 split. You have to remember that if you sell D2C, your margin is much higher, but then also your cost percentage is higher, but your EBIT should also be higher. We're not dependent on holding the 30 should the split go to a higher D2C part than the 40. Again, I have to admit that there wasn't any goal to actually accelerate D2C, but it was the demand that was so strong. As we said before, the order book from retailers the last 6 months was very cautious. As you probably have seen yourself, you know the reason.

Speaker #3: For Q2, was 5% EBIT growth the profit plan, or is there $50–60 million of investment in marketing that came into the quarter that perhaps wasn’t there 3 or 6 months ago in your plan?

Speaker #2: So the 30 percent is based on a 60 40 split. So you have to remember that if you sell DTC your margin is much higher.

Speaker #2: But then also your cost percentage is higher. But you're able it should also be higher. So we're not dependent on holding the 30 should the split go to a higher DTC part than the 40.

Speaker #3: Thank you.

Speaker #2: Yes, the sell-through in our own channel is higher than in wholesale, that's correct. But that's also because the offer is wider. And if you think on performance, I would actually say that the sell-through also in wholesale is strong.

Speaker #2: But again I have to admit that there wasn't any goal to actually accelerate DTC. But it was the demand that was so strong. And as we said before the order book from retailers the last six months was very cautious.

Speaker #2: It's the lifestyle, both selling and sell-out, especially for him, which is lagging currently. And it has been lagging, I would say, for the last six months.

Speaker #2: And as you probably have seen yourself you know the reason. So again this is not a strategy that we're driving but it's actually the result of where the consumer is shopping.

Speaker #2: Because of the discount that is in the market. When it gets to your second question on if there was any additional marketing—yes, there were some activations that came on top.

Bjørn Gulden: Again, this is not a strategy that we're driving, but it's actually the result of where the consumer is shopping. Should this be a pattern that continue, then the split between wholesale retail would then move from 60/40 to something else. You should expect the growth in the gross margin and therefore also a growth in the overhead, but the EBIT should also grow to be more than 10%. This is the way the math work. When it gets to the cleaning up the wholesale, I mean, first of all, what you talk about China and competitors, that will not happen in the next month because remember, when you're switching off part of a wholesale channel, that takes more time.

Speaker #2: Should this be a pattern that continue then the split between wholesale retail would then move from 60 40 to something else. Then you should expect the growth in the gross margin and therefore also a growth in the overhead.

Speaker #2: I think we said that we had an extra marketing of about $212 million, and I think the first guesstimates we had were around $150 million.

Speaker #2: But then the EBIT should also grow to be more than 10 percent. This is the way the math work. When it gets to the cleaning up the wholesale I mean first of all what you talk about China and competitors that will not happen in the next months because you remember when you're switching off part of a wholesale channel that takes more time.

Speaker #2: So, it is true that during the tournament, we took decisions to actually activate more based on local needs. That is correct.

Speaker #3: Great. Thank you very much.

Speaker #1: Next question comes from the line of Anisha Sherman from Bernstein Société Générale. Please go ahead.

Speaker #2: So I'm not sure that will have an impact. And you also probably know that our business in China is on fire. So we don't need any help there.

Bjørn Gulden: I'm not sure that will have an impact, and you also probably know that our business in China is on fire, we don't need any help there. I think the wholesale community that is difficult right now on footwear has been in Europe and in the US. We hope and we believe when we look at the order book that Q4 would actually be an improvement. Again, we don't control it alone, right? Yes, wholesale footwear should start to improve. If that is Q4 or Q1, I don't know. As always, what we try when we see that something shouldn't work, that we don't get the growth, we will try to get the growth somewhere else. Important for us is that we have enough growth to actually hit our targets, and that is what we have done.

Speaker #4: Thank you so much. I have two questions, please. One kind of following on the prior question around wholesale. You've talked about holding back wholesale growth while competitors are being very promotional.

Speaker #2: I think the wholesale community that is difficult right now on footwear has been in Europe and in the US. And we hope and we believe and we look at the order book that Q4 would actually be an improvement.

Speaker #4: As we're seeing some of those big promotional phases with big retailers starting to wind down, you know, we've seen that in North America, we've seen that with some recent announcements in China.

Speaker #2: But again we don't control it alone right. So yes wholesale footwear should start to improve. If that is Q4 or Q1 I don't know.

Speaker #4: Are you more optimistic about opening up wholesale selling, and does that help Q3 at all, or is that more Q4 into Q1? And then a second—related to this—a second question around operating overheads.

Speaker #2: And as always what we try when we see that something shouldn't work that we don't get the growth then we will try to get the growth somewhere else.

Speaker #2: Important for us is that we have enough growth to actually hit our targets. And that is what we have done. And then without doing anything that actually hurts the brand and I do think you agree that Q2 there was nothing in distribution or activations that would hurt the brand.

Speaker #4: You're currently very DTC-heavy, which, as you mentioned, is higher cost in terms of overhead. How important is that wholesale/DTC balance for you to be able to meet your midterm goal of reaching sub-30 percent operating overhead?

Bjørn Gulden: Without doing anything that actually hurts the brand. I do think you agree that Q2, there was nothing in distribution or activations that would hurt the brand. I think everything that you can measure was the opposite, that the brand came out of World Cup and the quarter stronger than it went into it. We are internally, with what we can control, actually very happy and not a little bit sad that we've not been able to actually explain it to you in a way that you would be happy, too. Maybe over time, or I'm pretty sure that will actually change.

Speaker #4: Thank you.

Speaker #2: I think everything that you can measure was the opposite. That the brand came out of World Cup and the quarter stronger than it went into it.

Speaker #2: The second question is that should you only be D2C, then your margin is higher and your overhead is higher. Then, you know, the 30 percent doesn't mean anything.

Speaker #2: So we are internally what we can control actually very happy. And are a little bit sad that we've not been able to actually explain it to you in a way that you would be happy to.

Speaker #2: So the 30 percent is based on a 60/40 split. So you have to remember that if you sell D2C, your margin is much higher.

Speaker #2: But maybe over time or I'm pretty sure that will actually change.

Speaker #2: But then also your cost percentage is higher. But your EBIT should also be higher. So we're not dependent on holding the 30 should the split go to a higher D2C part than the 40.

Speaker #6: Thank you. Very clear.

Aneesha Sherman: Thank you. Very clear.

Speaker #3: Next question comes from the line of Jürgen Kolb from Kepler Chevreux. Please go ahead.

Operator: Next question comes from the line of Jürgen Kolb from Kepler Cheuvreux. Please go ahead.

Speaker #2: But again, I have to admit that there wasn't any goal to actually accelerate D2C, but it was the demand that was so strong. And as we said before, the order book from retailers over the last six months was very cautious.

Speaker #5: Thanks very much. Indeed. Two ones. First one on China. In China you reached a 27.6 percent EBIT margin in H1 if my calculation is correct here.

Jürgen Kolb: Thanks very much indeed. Two ones. First one on China. In China, you reached a 27.6% EBIT margin in H1, if my calculation is correct here. We're getting closer to the 30% again or above 30%, what used to be the peak margin or the strong margin in China. Initially, I think in the past, you indicated that you think high 20s could be possible. This is where we are right now. What do you think is still in China? How much margin potential do you see given the fact that obviously your brand is on fire, you're adding a luxury component, one of the main competitor is making some strategic decisions which may open up possibilities. Maybe some words on China, if you have.

Speaker #2: And as you probably have seen yourself, you know the reason. So again, this is not a strategy that we're driving, but it's actually the result of where the consumer is shopping.

Speaker #5: So we're getting closer to the 30 percent again or about 30 percent what used to be the peak margin or the strong margin in China.

Speaker #5: Initially I think in the past you indicated that you think high 20s could be possible. This is where we are right now. What do you think is still in China?

Speaker #2: Should this be a pattern that continues, then the split between wholesale and retail would move from 60/40 to something else. Then you should expect growth in the gross margin and therefore also growth in overhead.

Speaker #5: How much margin potential do you see given the fact that obviously your brand is on fire. You're adding a luxury component. You're one of the main competitor is making some strategic decisions which may open up possibilities.

Speaker #2: But then the EBIT should also grow to be more than 10 percent. This is the way the math works. When it gets to the cleaning up the wholesale, I mean, first of all, what you talk about China and competitors, that will not happen in the next months because you remember when you're switching off part of a wholesale channel, that takes more time.

Speaker #5: So maybe some words on China if you have. And then secondly the gross margin obviously in the second quarter was strong with all the puts and takes.

Sebastian Steffen: Secondly, the gross margin, obviously in Q2 was strong with all the puts and takes that affected the business, but led to a very strong gross profit margin and indication for a brand heat. What do you think is possible for H2, but also maybe a first look into 2027, with your indications on hedging again and all the other impacting factors. Thanks very much.

Speaker #2: So I'm not sure that will have an impact. And you also probably know that our business in China is on fire. So we don't need any help there.

Speaker #5: That affected the business but led to a very strong gross profit margin and indication for a brand heat. What do you think is possible for the second half but also maybe a first look into 2027 with your indications on hedging again and all the other impacting factors.

Speaker #2: I think the wholesale community that is, you know, difficult right now on footwear has been in Europe and in the U.S. And, you know, we hope and we believe when we look at the order book that Q4 would actually be an improvement.

Speaker #5: Thanks very

Speaker #2: But again, we don't control it alone, right? So yes, wholesale footwear should start to improve. If that is Q4 or Q1, I don't know.

Speaker #2: Your calculation on China is correct. Your conclusion that we have. Brand on fire is also correct. I would like to add that the diversity in the product that we have in China today is much stronger than when it peaked at 30.

Bjørn Gulden: Your calculation on China is correct. Your conclusion that we have brand on fire is also correct. I would like to add that the diversity in the product that we have in China today is much stronger than when it peaked at 30%. I think when you go back to those days, the best brands were selling, I call it commodities with logos on, and you know that the margin on cotton hoodies and T-shirts and stuff are very high. If you look at the product now, the local team is investing in sports, and they're investing in a big variety of segments. I think that the solidity of our business is much, much stronger, and I still do think that the high 20s is a realistic, what should I say, margin. You also have to remember that we're now sourcing local.

Speaker #2: And as always, what we try—when we see that something shouldn't work, that we don't get the growth—then we will try to get the growth somewhere else.

Speaker #2: Important for us is that we have enough growth to actually hit our targets. And that is what we have done. And then, without doing anything that actually hurts the brand—and I do think you agree that in Q2, there was nothing in distribution or activations that would hurt the brand.

Speaker #2: I think when you go back to those days the Western brands were selling I call it commodities with logos on. And you know that the margin on cotton hoodies and T-shirts and stuff were very high.

Speaker #2: If you look at the product now the local team is investing in sports. And they're investing in a big variety of segments. So I think that the solidity of our business is much much stronger.

Speaker #2: I think everything that you can measure was the opposite. That the brand came out of World Cup and the quarter stronger than it went into it.

Speaker #2: So, we are, internally—what we can control—actually very happy, and are a little bit sad that we haven't been able to actually explain it to you in a way that you would be happy, too.

Operator: Ladies and gentlemen, welcome to the adidas AG Q2 2026 conference call and live webcast. I am Moira, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Sebastian Steffen, Head of Investor Relations. Please go ahead.

Operator: Ladies and gentlemen, welcome to the adidas AG Q2 2026 conference call and live webcast. I am Moira, the conference call operator. I would like to remind you that all participants will be in listen only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Sebastian Steffen, Head of Investor Relations. Please go ahead.

Speaker #2: And I still do think that the high 20 is high 20s is a realistic what you as a margin. You also have to remember that we're now sourcing local.

Speaker #2: But maybe over time, or I'm pretty sure that we'll actually change.

Speaker #4: Thank you. Very clear.

Speaker #2: So we're sourcing in China with Chinese currency. So the variances we have on hedging and stuff in China is almost zero. But at the same time because we're sourcing in China we are closer to the market.

Bjørn Gulden: We are sourcing in China with Chinese currency, so the variances we have on hedging and stuff in China is almost zero. At the same time, because we are sourcing in China, we are closer to the market. There is a lot more replenishment and changes in the buy, which then takes the risk down, which again, should then reduce the markdowns, and in the wholesale business, reduce the takebacks. We see all these things currently happening. I can also say to you that we are balancing much more the business from a quarter to quarter. We used to have Filling in the wholesale partners and then do a lot of take backs in Q4. What we are trying to do now is, of course, reduce the amount of take backs totally, and then actually if there are, managing that month by month and quarter by quarter.

Speaker #1: Next question comes from the line of Jürgen Kolb from Kepler Chevreux. Please go ahead.

Speaker #3: Thanks very much. Indeed. Q1's first one on China. In China, you reached a 27.6 percent EBIT margin in H1, if my calculation is correct here.

Speaker #2: So there's a lot more replenishment and changes in the buy which then takes the risk down which again should then reduce the markdowns and in the wholesale business reduce the take backs.

Speaker #3: So we're getting closer to the 30 percent. Again, or about 30 percent, what used to be the peak margin or the strong margin in China.

Sebastian Steffen: Thanks very much, Moira, and hello, everyone. Good evening, good afternoon, and good morning, wherever you are joining us today. Welcome to our Q2 2026 results conference call. Our presenters today are our CEO, Bjørn Gulden, and our CFO, Harm Ohlmeyer. Before Bjorn and Harm will take you through the key developments of the second quarter and share their expectations, let me just quickly remind you that you limit your initial questions to two during the Q&A session to allow as many people as possible to ask their questions. Now, without any further ado, over to you, Bjorn.

Sebastian Steffen: Thanks very much, Moira, and hello, everyone. Good evening, good afternoon, and good morning, wherever you are joining us today. Welcome to our Q2 2026 results conference call. Our presenters today are our CEO, Bjørn Gulden, and our CFO, Harm Ohlmeyer. Before Bjorn and Harm will take you through the key developments of the second quarter and share their expectations, let me just quickly remind you that you limit your initial questions to two during the Q&A session to allow as many people as possible to ask their questions. Now, without any further ado, over to you, Bjorn.

Speaker #2: And we see all these things currently happening. And I can also say to you that we are balancing a much more the business from a quarter to quarter.

Speaker #3: Initially, I think in the past you indicated that you think high 20s could be possible. This is where we are right now. What do you think is still in China?

Speaker #2: We used to have filling in the wholesale partners and then do a lot of take backs in Q4. And what we are trying to do now is of course reduce the amount of take backs totally and then actually if there are managing that month by month and quarter by quarter.

Speaker #3: How much margin potential do you see given the fact that obviously your brand is on fire, you're adding a luxury component? You're one of the main competitor is making some strategic decisions which may open up possibilities.

Speaker #2: So I think the local team has the business much more under control than they had before. The impact of a competitor's action in China is unknown.

Bjørn Gulden: I think the local team has the business much more under control than they had before. The impact of a competitor's action in China is unknown. We have seen and heard what they are doing, but I think it is far too early to say how that is going to be executed and the impact that that will have. Again, as soon as we know and we see, you will probably see it and hear it from us. I think we will first have to see if it happens and how it happens. Gross margin, I think I leave up to you, Harm.

Speaker #3: So maybe some words on China, if you have any. And then secondly, the gross margin obviously in the second quarter was strong, with all the puts and takes.

Speaker #2: I mean of course we have seen and heard what they're doing. But I think it's far too early to say how that's going to be executed and the impact that that will have.

Speaker #3: That affected the business, but led to a very strong gross profit margin and indication for a brand heat. What do you think is possible for the second half, but also maybe a first look into 2027?

Bjørn Gulden: Thanks, Seb, and hello, everybody. You have seen our announcement. We have seen the reaction. I'm sure we will have a lot of interesting questions. Before we go into the update of the business, you have also seen the other announcement that says that Harm, who decided not to extend his contract when it goes out on 28 March, has now announced that he will leave, and that we have found a successor together in Birgit. I think before I go into that in detail, I will hand over to you, Harm, so you can say a couple of words.

Bjørn Gulden: Thanks, Seb, and hello, everybody. You have seen our announcement. We have seen the reaction. I'm sure we will have a lot of interesting questions. Before we go into the update of the business, you have also seen the other announcement that says that Harm, that decided not to extend his contract when it goes out in 28 March, have now announced that he will leave, and that we have found a successor together in Birgit. I think before I go into that in detail, I think I hand over to you, Harm, so you can say a couple of words.

Speaker #2: And again as soon as we know and we see you will probably see us. But I think we will first have to see if it happens and how it happens.

Speaker #3: With your indications on hedging again and all the other impacting factors. Thanks very much.

Speaker #2: Gross margin I think I leave up to you. Farm.

Speaker #5: Yeah. Jürgen on the gross margin. Of course we are very happy what we have achieved in the first half. And of course in the second quarter but there was a significant part on D to C and the football business and jerseys and full price.

Harm Ohlmeyer: Yeah, Björn, on the gross margin, of course, we are very happy what we have achieved in H1 and of course in Q2. But there was a significant part on D2C and the football business, the jerseys and full price. We want to continue to be disciplined in H2. The puts and takes is, yes, there will be less D2C, there will be less football business. On the other hand, what Björn just explained, maybe the promotion levels with some of our competitors will ease a little bit in H2. That should be a benefit. Again, I am not going to talk about the Middle East or whatsoever. That is hopefully under control. It is more important for next year.

Speaker #2: Your calculation on China is correct. Your conclusion that we have a brand on fire is also correct. I would like to add that the diversity in the product that we have in China today is much stronger than when we peaked at 30.

Speaker #5: So we want to continue to be disciplined in the second half. And the puts and takes is I mean yes there will be less D to C.

Speaker #5: There will be less football business. But on the other hand what Bjorn just explained maybe the promotion levels with some of our competitors will ease a little bit in the second half.

Speaker #2: I think when you go back to those days, the Vestal brands was selling, I call it commodities with logos on. And you know that the margin on cotton, hoodies, and T-shirts and stuff were very high.

Harm Ohlmeyer: Yeah. Thank you, Bjorn. Of course, it's one of our jobs as leaders to find a good successor, and I'm very pleased that we have found Birgit, and I'm even more pleased that it will be a smooth transition because I know her very well. Secondly, we are handing over a very healthy business to her. I'm really pleased with that transition. Of course, I'm also very privileged to talk about 29 years with the brand and 10 years of serving as the CFO. That has been a privilege. I always joke that my kids, who are 27 and 25, don't know anything else but adidas. That has to change at some stage. Again, I'm very pleased with the support that I got from the board, from many of you over the last 10 years.

Harm Ohlmeyer: Yeah. Thank you, Bjorn. Of course, it's one of our jobs as leaders to find a good successor, and I'm very pleased that we have found Birgit, and I'm even more pleased that it will be a smooth transition because I know her very well. Secondly, we are handing over a very healthy business to her. I'm really pleased with that transition. Of course, I'm also very privileged to talk about 29 years with the brand and 10 years of serving as the CFO. That has been a privilege. I always joke that my kids, who are 27 and 25, don't know anything else but adidas. That has to change at some stage. Again, I'm very pleased with the support that I got from the board, from many of you over the last 10 years.

Speaker #5: That should be a benefit. And again I'm not going to talk about the Middle East or whatsoever. That's hopefully under control. It's more important for the next year for next year we are very clearly getting some tailwind from the US dollar and most importantly what we got for it to a little bit of a surprise is some of the currencies of Japanese yen Korean won.

Speaker #2: If you look at the product now, the local team is investing in sports. And they're investing in a big variety of segments. So I think that the solidity of our business is much, much stronger.

Harm Ohlmeyer: For next year, we are very clearly getting some tailwind from the US dollar, and most importantly, what we got probably to a little bit of a surprise is some of the currencies of Japanese yen, Korean won, some of Argentinian peso and Turkish lira. Many of these currencies have actually stabilized. You saw it on our top line development as well when it comes to reported and the currency neutral. We are very optimistic that we get a full benefit of the tail end from the US dollar and not so much headwind from the other currencies going into next year. That is an early indication, but definitely we would expect the margin going up next year compared to whatever we deliver this year.

Speaker #2: And I still do think that the high 20s is a realistic, what you, as a margin. You also have to remember that we are now sourcing locally.

Speaker #5: Some of Argentinian peso and Turkish lira. Many of these currencies have actually stabilized. You saw it on our top line development as well when it comes to reported and the currency neutral.

Speaker #2: So we're sourcing in China with Chinese currency. So the variances we have on hedging and stuff in China is almost zero. But at the same time, because we're sourcing in China, we are closer to the market.

Speaker #5: So we're very optimistic that we get a full benefit of the tailwind from the US dollar and not so much headwind from the other currencies going into next year.

Speaker #5: And but that's an early indication but definitely we would expect the margin going up the next year compared to whatever we deliver this year.

Harm Ohlmeyer: Of course, I will be around for another quarter or a bit longer until year-end. Stay tuned for that one. Of course, the timing is always something you decide, like any athlete does as well. As Björn said, when you're not going to extend your contract, you start thinking about what is the right timing. I believe handing over a well-run company now—of course, we can always get better—but it feels very good, and having the right successor feels even better. I'm really looking forward to the next couple of months, and then I'm very respectful of the time afterwards, but I'm also looking forward to that. Stay tuned.

Harm Ohlmeyer: Of course, I will be around for another quarter or a bit longer until year-end, stay tuned for that one. Of course, the timing is always something you decide, like any athlete does as well. As Björn said, when you're not going to extend your contract, you start thinking about what is the right timing. I believe handing over a well-run company now, of course, we can always get better, but it feels very good, and having the right successor feels even better. I'm really looking forward to the next couple of months, and then I'm very respectful for the time afterwards, but I'm also looking forward to that. Stay tuned.

Speaker #2: So there's a lot more replenishment and changes in the buy, which then takes the risk down, which again should then reduce the markdowns. And in the wholesale business, reduce the takebacks.

Speaker #5: Very good. Thanks very much guys.

Jürgen Kolb: Very good. Thanks very much, guys.

Speaker #3: Next question comes from the line of Wendy Liu from JP Morgan. Please go ahead.

Speaker #2: And we see all these things currently happening. And I can also say to you that we are balancing a much more the business from a quarter to quarter.

Operator: Next question comes from the line of Wendy Liu from JPMorgan. Please go ahead.

Speaker #4: Hi. Good afternoon. Thanks for taking my questions. I have two also. One is on marketing and I appreciate that you invested a bit more taking opportunity from the World Cup.

Wendy Liu: Hi, good afternoon. Thanks for taking my questions. I have two also. One is on marketing. I appreciate that you invested a bit more taking opportunity from the World Cup. How do you evaluate the ROI from marketing investment? Has the investment in marketing translated to interest in adidas more broadly and beyond the World Cup, and how do you track that? Second question on lifestyle footwear. I was wondering if you reflect back on your strategy on Terrace and on Superstar, what are your takeaways and how much of the perhaps very successful playbook with Samba can be replicated to Stan Smith?

Speaker #2: You know, we used to have filling in the wholesale partners and then do a lot of takebacks in Q4. And what we are trying to do now is, of course, reduce the amount of takebacks totally.

Speaker #4: How do you evaluate the ROI from marketing investment? Has the investment in marketing translated to interest in Adidas more broadly and beyond the World Cup and how do you track that?

Speaker #2: And then actually, if there are managing that month by month and quarter by quarter. So I think the local team has the business much more under control than they had before.

Bjørn Gulden: Thanks, Harm. I think also from my side, I'm sure we will talk about this later, but when I came on board, one of the requirements for me was that you would stay. I had a guy I knew and I could trust so we could start the process of bringing the company back again. For now, also, thank you, and I'm sure we will talk more about that later. In that process of finding a successor, we had then the luck, to be honest, to find Birgit, who spent 25 years with the company earlier, then left to learn retail, being the CFO of C&A. When she then had the chance to become available, we took the chance, and that is then the timing of this. Birgit will join us 1 September, and then stay in the board.

Bjørn Gulden: Thanks, Harm. I think also from my side, I'm sure we will talk about this later, but when I came on board, one of the requirements for me was that you would stay. I had a guy I knew and I could trust so we could start the process of bringing the company back again. For now, also, thank you, and I'm sure we will talk more about that later. In that process of finding a successor, we had then the luck, to be honest, to find Birgit, who spent 25 years with the company earlier, then left to learn retail, being the CFO of C&A. When she then had the chance to become available, we took the chance, and that is then the timing of this. Birgit will join us 1 September, and then stay in the board.

Speaker #2: The impact of a competitor's action in China is unknown. I mean, of course, we have seen and heard what they're doing. But I think it's far too early to say how that's going to be executed and the impact that that will have.

Speaker #4: And then second question on lifestyle footwear. I was wondering if you have any if you reflect back on your strategy on tariffs and on superstar what are your takeaways and how much of the perhaps very successful playbook with samba can be replicated to Stan Smith.

Speaker #2: And again, as soon as we know and we see you will probably see it and hear it from us. But I think we will first have to see if it happens and how it happens.

Speaker #2: Gross margin, I think I leave up to you. Arm?

Speaker #5: Yeah, Jürgen on the gross margin. Of course, we are very happy what we have achieved in the first half. And of course, in the second quarter, but there was a significant part on D2C and the football business, the jerseys, and full price.

Speaker #2: Your first question again we decided to overinvest in Q2 because the event the World Cup was a platform for us to show the DNA of the brand.

Bjørn Gulden: Your first question, again, we decided to over-invest in Q2 because the event, the World Cup, was a platform for us to show the DNA of the brand. It's not to show the brand only in the world of soccer or football, but to actually showcase the brand. That's why we invested so much in it. To calculate an ROI doesn't really work, because if it worked, we will all do the same, right? I think you have to look at it in many aspects. Everything that you can measure, the awareness, the engagement around the brand are very positive. To transfer that into conversion and then into monetary is something you do in school, but it doesn't really work in the real business.

Speaker #5: So we want to continue to be disciplined in the second half. And the puts and takes is, I mean, yes, there will be less D2C.

Speaker #2: And it's not to show the brand only in the world of soccer or football but actually showcase the brand. That's why we invested so much in it.

Bjørn Gulden: Harm will be the CFO till the end of the year, and they will then work together to make a smooth transition. Very happy. I think she knows the company, she knows the industry. Again, now having worked for a vertical retailer, she also brings with her the retail competence that is great to have. To close that and move into the business update, it should be a surprise for you that we would like to celebrate also in your eyes, a little bit of World Cup. Again, a great event, and here is a little bit reminder of our visibility in that tournament.

Bjørn Gulden: Harm will be the CFO till the end of the year, and they will then work together to make a smooth transition. Very happy. I think she knows the company, she knows the industry. Again, now having worked for a vertical retailer, she also brings with her the retail competence that is great to have. To close that and move into the business update, it should be a surprise for you that we would like to celebrate also in your eyes, a little bit of World Cup. Again, a great event, and here is a little bit reminder of our visibility in that tournament.

Speaker #5: There will be less football business. But on the other hand, what Bjorn just explained, maybe the promotion, you know, levels with some of our competitors will ease a little bit in the second half.

Speaker #2: To calculate an ROI doesn't really work because if it worked we would all do the same right. So I think you have to look at it in many aspects.

Speaker #2: Everything that you can measure the awareness the engagement around the brand are very very positive. But to transfer that into conversion and then into monetary is something you do in school but it doesn't really work in the real business.

Speaker #2: What it has done and I think you agree is that to grow 14 percent in this environment we will see what other people report shows you that it has actually worked also short term.

Bjørn Gulden: What it has done, and I think you agree, is that to grow 14% in this environment, we will see what other people report, shows you that it has actually worked also short-term. How much of that is marketing and how much of that is organic and how much is that because we have the distribution is very difficult to measure. Everything that we do measure, and digital you can measure much more accurate than you can in other parts, everything that is upper funnel has actually helped us all the way down to the lower funnel. I do think that the brand, in almost all markets, are much stronger today than it was three years ago. The peak of the measurements were actually done just before the tournament. We have no measurements now after the tournament.

Bjørn Gulden: Hey, listen to me. What do I know about soccer? Nothing. I know about football. Benito, football. A million. The greatest show on turf, the biggest ever seen on planet Earth.

Bjørn Gulden: Hey, listen to me. What do I know about soccer? Nothing. I know about football. Benito, football. A million. The greatest show on turf, the biggest ever seen on planet Earth.

Yeah, you're on the gross margin. Of course, we have very happy. What we have achieved in the first half and of course in the second quarter. But there was a significant part on on d2c and uh the football business in the jerseys and full price. So we want to continue to be disciplined in the second half and the puts and takes is I mean um yes there will be less D to C. There will be less football business but on the other hand what Bean just explained maybe the promotion you know, levels with some of our our competitors will ease a little bit in the second half that should be a benefit um and again I'm not going to talk about the Middle East or whatsoever. Um, that's hopefully under control. It's more important for the uh next year for next year, we are very clearly getting some Tailwind, you know, from the US dollar and most importantly, what we got for you, a little bit of a surprise as some of the currencies of Japanese Yen. Again, Korean War, some of Argentine,

Speaker #2: How much of that is marketing and how much of that is organic and how much is that because we have the distribution is very very difficult to measure.

Speaker #2: But everything that we do measure and digital you can measure much more accurate than you can in other parts everything that is upper funnel has actually helped us all the way down to the lower funnel.

Opinion, you know, peso and and Turkish Lera. Um, many of these currencies have actually stabilized. You saw it on our Topline development as well when it comes to reported and and and that the currency neutral. So we are very optimistic that we get a full benefit of the talent from the US dollar and not So Much headwind from the other currencies going into next year. Um and um but that's a

Bjørn Gulden: I hope you agree it was a great tournament, especially for us, me, probably like you, feel I'm a soccer expert, I summarize the tournament as follows: France had the best players, Spain had the best team, Argentina the best attitude, playing for the flag, their country, and for Messi. The most fun team was, of course, the Norwegians. I think it was a great pleasure to see my countrymen not only performing, but also being extremely visible. I can tell you, it shows you how much impact a World Cup tournament has at home. I don't think Norwegians have been in such a good mood as long as I've been on this planet. It's good to add some peace. Spain winning the tournament. Having been with us, we have a fantastic relationship to the federation.

That's an early indication. But definitely, we would expect the margin going up next year, compared to whatever we deliver this year.

Speaker #2: And I do think that the brand in almost all markets are much stronger today than it was three years ago and the peak of the measurements were actually done just before the tournament.

Very good. Thanks very much, guys.

Next question, comes from the line of Wendy Lu from JP Morgan. Please go ahead.

Speaker #2: We have no measurements now after the tournament. So I would say that our marketing people has done a great job. But remember that doesn't necessarily only be paid media.

Bjørn Gulden: I would say that our marketing people has done a great job. Remember, that doesn't necessarily only be paid media, it is also the organic, and what the consumer sees, hears, and not only what the marketeers then sell you as paid. The lifestyle success that we had on Terrace with different models is of course a playbook that we're using. You remember when we are testing things, what we do is that we are launching products at the higher end in limited quantities. We are seeding products, then we try both brick and mortar in the market and also digital to measure where the demand is, then we scale. That is a playbook that we're using everywhere. You have to do it locally.

Speaker #2: It is also the organic. And what the consumer sees hears and not only what the marketers then sell you as paid. The lifestyle success that we had on tariffs with different models is of course a playbook that we using you remember when we are testing things what we do is that we are launching products at a higher end in limited quantities.

Bjørn Gulden: I hope you agree it was a great tournament, especially for us, me, probably like you, feel I'm a soccer expert, I summarize the tournament as follows: France had the best players, Spain had the best team, Argentina the best attitude, playing for the flag, their country, and for Messi. The most fun team was, of course, the Norwegians. I think it was a great pleasure to see my countrymen not only performing, but also being extremely visible. I can tell you, it shows you how much impact a World Cup tournament has at home. I don't think Norwegians have been in such a good mood as long as I've been on this planet. It's good to add some peace. Spain winning the tournament. Having been with us, we have a fantastic relationship to the federation.

Speaker #2: We are seeding products and then we try both brick and mortar in the market and also digital to measure whether demand is and then we scale.

Speaker #2: And that is a playbook that we using everywhere. But you have to do it locally. You cannot measure these things global because the demand and the timing of demand in Europe might be different than the US and Korea which is leading on the trend side might be ahead of everybody.

Also, uh, 1 is on, uh, marketing and I appreciate that you invested a bit more taking opportunity from the World Cup. Um, how do you evaluate the, uh, Roi from marketing investment? Um, has the investment in marketing translated to interesting Adidas, more broadly, and Beyond the World Cup, and, uh, how do you track that? Uh, and then second question, uh, on, um lifestyle, uh, Footwear, um, I was wondering, uh, you know, if you have any um you know, if you reflect back on um your um strategy on terrorism and on Superstar, what are your takeaways and how much of you know the perhaps very successful uh Playbook with uh sambar can be replic replicated to sense this?

Bjørn Gulden: You cannot measure these things global because the demand and the timing of demand in Europe might be different than the US, and Korea, which is leading on the trend side, might be ahead of everybody. This is a network of information that our people are using all the time. The playbook might vary, but the logic is always the same. I do think that Stan Smith, we have big indications from fashion shows, from consumer groups, from research, that this direction is coming. The initial sales of the product that we have in limited is also working very well. Remember, we took all these products out of the market so that there shouldn't be any discount that the Stan Smiths around. I feel that we have, what should I say, done the work in parallel with what we have done on other launches.

Speaker #2: So this is a network of information that our people are using all the time. And the playbook might vary but the logic is always the same.

Um your first question um again we decided to over invest in Q2 because the event the World Cup was a platform for us to show the DNA of the brand.

Speaker #2: I do think that Stan Smith we have big indications from fashion shows from consumer groups from research that this direction is coming. And the initial sales of the product that we have in limited is also working very well.

Speaker #2: And remember we took all these products out of the market so that there shouldn't be any discount that the Stan Smiths around. So I feel that we have what should I say done the work in parallel with what we have done on other launches.

And it's not to show the brand only in the world of soccer or football, but they actually showcase the brand. That's why we invested so much in it to calculate an Roi. It doesn't really work because if it worked we will do the same, right? So I think you have to look at it in many aspects, everything that you can measure the awareness.

Bjørn Gulden: I think you agree they look good. One of the ways of showing how close we are is this picture, the day after the tournament, when they celebrated. Their bus was branded only with us and the team, and many of the players, of course, also playing in our shoes. Our sports marketing has a great relationship with the federation that currently is by far the most successful one in soccer in general, by male, female, and also in the youth. I am also, as I wrote in my quote, extremely proud what the team has done in general when it gets to campaigns, planning the product, planning the activations. I think I said I believe even adidas would have been proud. I probably think it's the best-executed campaign that has ever happened in this industry when you look across the globe.

Bjørn Gulden: I think you agree they look good. One of the ways of showing how close we are is this picture, the day after the tournament, when they celebrated. Their bus was branded only with us and the team, and many of the players, of course, also playing in our shoes. Our sports marketing has a great relationship with the federation that currently is by far the most successful one in soccer in general, by male, female, and also in the youth. I am also, as I wrote in my quote, extremely proud what the team has done in general when it gets to campaigns, planning the product, planning the activations. I think I said I believe even adidas would have been proud. I probably think it's the best-executed campaign that has ever happened in this industry when you look across the globe.

The engagement around the brand, uh, are very, very positive but to transfer that into conversion, uh, and then into monetary, it's something you do in school. But it doesn't really work in the real business.

Speaker #2: And then it's not only Stan Smith. That's one thing that I think you should look at. But I think also on running lifestyle if you see the development of EYSL if you see what is happening around the jellyfish which we are now opening up in distribution with Pharrell.

Bjørn Gulden: Then, it's not only Stan Smith. That's one thing that I think you should look at. I think also in running lifestyle, if you see the development of EYSL, if you see what is happening around the Jellyfish, which we're now opening up in distribution with Pharrell, if you look at what we're doing with Hyperboost, there's many, many elements that, in our opinion, deserves a wider role with our retailers.

Speaker #2: If you look at what we're doing with Hyper Boost there's many many elements that in our opinion deserves a wider role with our retailers.

Speaker #2: And as long as we don't get it we will then hold back and do it in our own distribution both digital and brick and mortar.

Bjørn Gulden: As long as we don't get it, we will then hold back and do it in our own distribution, both digital, and brick and mortar. That's why I think when we get to Q4, you will start to see stronger growth in footwear again. We didn't expect footwear to grow in Q2. We knew that the World Cup would put the focus on apparel and not on footwear. I'm not sure why that was a surprise, but we never thought that anything else would happen, to be honest.

What it has done. And, and I think you agree is that to grow 14% in this environment, we will see what other people report shows you that it has actually worked. Also short term, how much of that is marketing and how much of that is organic? And how much is that? Uh, because we have the distribution, it's very, very difficult to measure. But everything that we do measure and, you know, digital, you can measure much more accurate than you can in other parts.

Speaker #2: And that's why I think when we get to Q4 you will start to see stronger growth in footwear again. But we didn't expect footwear to grow in Q2.

Speaker #2: And we knew that the World Cup would put the focus on apparel and not on footwear. So I'm not sure why that was a surprise but we never thought that anything else would happen to be honest.

Bjørn Gulden: I will also quickly just summarize the tournament because there was a lot of criticism before. Too many teams, three nations, too many cities. When you look at it, I think the additions of the teams only made it more interesting. It was kind of cool to see Curaçao, Cape Verde playing. The stadiums were full. The atmosphere was great. For us, having 14 teams that I think we equipped well to reaching the final, you know that we sold close to 18 million jerseys, which again, is far more than we have ever sold before. Of course, Mexico being the best, our friends in Argentina the second, and even Germany, who didn't have a great result, had commercially a much bigger success than we've seen before.

Bjørn Gulden: I will also quickly just summarize the tournament because there was a lot of criticism before. Too many teams, three nations, too many cities. When you look at it, I think the additions of the teams only made it more interesting. It was kind of cool to see Curaçao, Cape Verde playing. The stadiums were full. The atmosphere was great. For us, having 14 teams that I think we equipped well to reaching the final, you know that we sold close to 18 million jerseys, which again, is far more than we have ever sold before. Of course, Mexico being the best, our friends in Argentina the second, and even Germany, who didn't have a great result, had commercially a much bigger success than we've seen before.

Speaker #4: Great. Thank you.

Wendy Liu: Great. Thank you.

Speaker #3: The next question comes from the line of Adam Cochrane from Deutsche Bank. Please go ahead.

Operator: The next question comes from the line of Adam Cochrane from Deutsche Bank. Please go ahead.

Um, everything that is up a funnel. That's actually helped us all the way down to the lower funnel. Um, and I do think that the brand, uh, in almost all markets are much stronger today than it was 3 years ago. And the peak of the measurements, were actually don't just before the tournament, we have no measurements now after the, the tournament. So, I would say that our marketing people has done a great job, uh, but remember that doesn't necessarily only be paid media. It is also also the organic uh, and and what you know the consumer sees

Speaker #5: Good afternoon. And just like I say thanks for all your help Harm over the last well not for me 20 years but certainly for you that long.

Adam Cochrane: Good afternoon. Just like to say thanks for all your help, Harm, over the last, well, not for me 20 years, but certainly for you that long. The questions I've got really relate to, first of all, on the wholesale performance. I do understand that the sales being weaker into the channel, maybe both in Q2 and into the H2. I just wanted to really confirm how much of this is adidas' choice to limit the retailer demand for the product compared to retailers actually ordering less product. Within that, if you have taken the decision not to chase volume, especially in Europe, great for the full price sort of sell-through. Is there any risk that you lose the shelf space that you've worked so hard to regain with the retailers over the last couple of years?

Here's um, and not only what the marketeers then sell you as as paid.

Speaker #5: The questions that I've got really relate to first of all on the wholesale performance. I do understand that the sales being weaker into the channel maybe both in Q2 and into the second half.

Speaker #5: I just want to really confirm how much of this is adidas's choice to limit the retailer demand for the product compared to retailers actually ordering less product.

The lifestyle um success that we had on Tara's, you know, with the different models is of course, A playbook that we're using. Um, you remember, when we are testing things, what we do is that we are launching products at the higher end in limited quantities, we are feeding products. And then we try both brick and mortar in the market and also digital to measure whether the demand is. And then we scale

Bjørn Gulden: I have seen in the commentary that I think there is some misunderstandings on how a World Cup sales is being done. You have to remember that we started selling in World Cup product, delivering into the trade already in Q4 last year that had both sell-in and sell out in Q1 and Q2. To be honest with you, we're still selling World Cup products, as you can imagine, especially now in Spain, because the jersey now has two stars. The period for this EUR 1.5 to 1.7 billion is, of course, not only in the summer months. I think in some of your spreadsheets, I think this has been a misunderstanding. When you then look at the campaigns, again, yes, we spent 212 more marketing in the quarter. I think we told you that also up front.

Bjørn Gulden: I have seen in the commentary that I think there is some misunderstandings on how a World Cup sales is being done. You have to remember that we started selling in World Cup product, delivering into the trade already in Q4 last year that had both sell-in and sell out in Q1 and Q2. To be honest with you, we're still selling World Cup products, as you can imagine, especially now in Spain, because the jersey now has two stars. The period for this EUR 1.5 to 1.7 billion is, of course, not only in the summer months. I think in some of your spreadsheets, I think this has been a misunderstanding. When you then look at the campaigns, again, yes, we spent 212 more marketing in the quarter. I think we told you that also up front.

Speaker #5: And within that if you have taken the decision not to chase volume especially in Europe great for the full price sort of sell through.

Speaker #5: But is there any risk that you lose the shelf space that you've worked so hard to regain with the retailers over the last couple of years?

And that is a Playbook that we're using everywhere. Uh, but you have to do it locally. You cannot measure these things Global because the demand and the timing of the demand in Europe, might be different than the US and Korea which is leading on the trend side, might be ahead of everybody. So this is a network of information that our people are using all the time. Um and the Playbook might vary, but the logic is always the same. Um,

Speaker #5: And then the second question is your implied sales growth of around 6 percent does seem quite a slowdown from what you achieved in the first half.

Adam Cochrane: The second question is, your employed sales growth of around 6% does seem quite a slowdown from what you achieved in H1, especially with some World Cup sales still to come through in Q3. It should probably be a couple of hundred million EUR still coming through. You talk about the recovery in footwear in Q4, inventory up 13%. Are you seeing anything with regards a slowdown in current trading in July, either on DTC particularly or wholesale, that has made you more cautious on the outlook? Thanks.

Speaker #5: Especially with some World Cup sales still to come through in the third quarter. It should probably be a couple of hundred million euros still coming through.

Speaker #5: And you talk about the recovery in footwear in the fourth quarter. Inventory up 13 percent. So are you seeing anything with regards a slowdown in current trading in July either on DTC particularly or wholesale that has made you more cautious on the outlook?

Bjørn Gulden: Of course, that doesn't have a payback in commerciality in the same period. We meant, or were sure, that for the brand heat going forward, also during the tournament, we had to invest in media, we choose to do a lot of activations around the world to showcase the brand. If you also look at our campaign, the Backyard Legends, it was to bring back the beauty of soccer the way we used to play it at home and not so serious. Everything that we can measure, the engagement around this campaign was great. The creatives are very proud that it's now even being nominated for an Emmy. Let's see if we have a chance. The way we looked on the pitch, I hope you agree, designs, both home and away, great. Mexico, even with a third jersey. We looked fresh.

Bjørn Gulden: Of course, that doesn't have a payback in commerciality in the same period. We meant, or were sure, that for the brand heat going forward, also during the tournament, we had to invest in media, we choose to do a lot of activations around the world to showcase the brand. If you also look at our campaign, the Backyard Legends, it was to bring back the beauty of soccer the way we used to play it at home and not so serious. Everything that we can measure, the engagement around this campaign was great. The creatives are very proud that it's now even being nominated for an Emmy. Let's see if we have a chance. The way we looked on the pitch, I hope you agree, designs, both home and away, great. Mexico, even with a third jersey. We looked fresh.

I do think that transmit, we have big indications from, you know, fashion shows from consumer groups from research that this direction is coming. And the initial sales of the product that we have in limited is also working very well. And remember we took all these products out of the market so that they shouldn't be any discount that the stands fits around. So, I feel that we have, uh, what should I say, don't the work, um, in parallel with what we have done on all the launches, uh, and then you know, it's not

Speaker #5: Thanks.

Speaker #2: No. The answer to your last question no. July was strong. But we only sitting on our order book that mirrors the wholesale business. And as you see that was trending around 6 percent.

Bjørn Gulden: No. The answer to your last question, no. July was strong. We're only sitting on an order book that mirrors the wholesale business. As you see, that was trending around 6%. D2C to forecast that for Q3 and Q4 is very difficult. I think you assume that. I don't think you have any retailers in the world that forecast as double-digit like-for-like growth. Yes, it might be cautious, and the max is 6%, right? Should we reach 9.5%, 9.9%, then what you need in H2 is 6%. Is there an upside to it? Yes, there is. Again, you know us, we're trying to tell you what we are sure about. It's the same with the EBIT. We could have booked now, tariffs back like all the brands do and then look better. Maybe we should.

Speaker #2: And did you see to forecast that for the third and fourth quarter is very difficult. I think you assume that I don't think you have any retails in the world that forecast this double digit like for like growth.

Speaker #2: So yes it might be cautious. And the math is 6 percent right? Should we reach 9.5 9.9 percent then what you need in the second half is 6.

Speaker #2: Is there an upside to it? Yes there is. But again you know us. We're trying to tell you what we are sure about. It's the same with the EBIT.

Speaker #2: We could have booked now tariffs back like other brands do and then look better. Maybe we should. We didn't. Because we want to make sure that we actually deliver what we say.

We didn't expect to to grow in Q2. And we we knew that the World Cup put the focus on apparel and not on Footwear. So I'm not sure why that was a surprise. But we never thought that anything else would happen to be honest.

Bjørn Gulden: Remember, we did double branding. We had the performance logo and wider stripes on the home, we had the Trefoil and the narrower stripes on the way. We did, for the first time in history, equip the referees with a lot of variations. First of all, they all had three stripes. Never happened before. We gave them different colors depending on how the two teams were playing. We did change the three on the ball for the semifinals and the final into the gold version, the referee had black with gold logos. I think it's the first time we started to get orders for referee jerseys around the world that people would like to buy.

Bjørn Gulden: Remember, we did double branding. We had the performance logo and wider stripes on the home, we had the Trefoil and the narrower stripes on the way. We did, for the first time in history, equip the referees with a lot of variations. First of all, they all had three stripes. Never happened before. We gave them different colors depending on how the two teams were playing. We did change the three on the ball for the semifinals and the final into the gold version, the referee had black with gold logos. I think it's the first time we started to get orders for referee jerseys around the world that people would like to buy.

Great. Thank you.

Bjørn Gulden: We didn't, because we want to make sure that we actually deliver what we say. When it gets to the wholesale business and holding back versus conservative buys, that's very different from market to market. I think it is fair to say that in Europe, the general retailer was very careful booking, so it wasn't necessary that we hold back volumes. What we did is that when we saw the environment, we were holding back models because we didn't want to go into a discounted environment. In other markets, we are holding back because we saw that the demand in our D2C was so high, that we decided to hold back. This is a decision that the markets are taking, and it's very different from market to market.

The next question comes from the line of Adam Cochran from.

Speaker #2: When it gets to the wholesale business and holding back versus conservative buys that's very different from market to market. I think it is fair to say that in Europe the general retailer was very very careful booking.

Mocha Bank.

Please go ahead.

Speaker #2: So it wasn't necessary that we hold back volumes but what we did is that when we saw the environment we were holding back models because we didn't want to go into discounted environment.

Good afternoon, just like to say. Thanks for all your, uh, your help calm over the last. Well, not not for me, 20 years, but certainly for, uh, for you that long, um, the questions, uh, I've got really relate to

Uh, first of all, on the the wholesale, uh, performance. Um, I do understand that the sales being weaker into the channel, maybe both.

Speaker #2: In other markets we have holding back because we saw that the demand in our DTC was so high that we decided to hold back.

Speaker #2: But this is a decision that the markets are taking. And it's very very different from market to market. I am sure that many retailers around the world when they see these numbers and also when they saw what was happening were trying to get more merchandise.

Bjørn Gulden: The event itself, the opening, the, what should I say, halftime and opening shows, the ball captains that you see in the right corner. We used our celebrities, our partners, made it an event much, much bigger than only the two teams playing at each other. I can assure you that everybody that was involved felt very happy being part of it. The culture around it. We had activations, as I said, all over the world. You see on the upright corner on the left side, the home of soccer in New York, which had more than a quarter million visitors. We had basically activations in all markets where we both made it an event, watched games, had concerts, put color to the tournament, branded, of course, with our adidas products.

Bjørn Gulden: The event itself, the opening, the, what should I say, halftime and opening shows, the ball captains that you see in the right corner. We used our celebrities, our partners, made it an event much, much bigger than only the two teams playing at each other. I can assure you that everybody that was involved felt very happy being part of it. The culture around it. We had activations, as I said, all over the world. You see on the upright corner on the left side, the home of soccer in New York, which had more than a quarter million visitors. We had basically activations in all markets where we both made it an event, watched games, had concerts, put color to the tournament, branded, of course, with our adidas products.

Bjørn Gulden: I am sure that many retailers around the world, when they see these numbers and also when they saw what was happening, were trying to get more merchandise and would like to have more merchandise, as you know, the availability then is necessarily sitting in what they want. Again, I think when you check with the retailers, I think we were very good during Q2 to replenish what was available. I think we also had big volumes of the relevant products. Of course, there were also products that were high in demand that we were running out of inventory. There is a mix. I also think that growing 14% in the first 6 months of this year in this environment is not something that you do easily.

Speaker #2: And we'd like to have more merchandise. But as you know the availability then is necessarily sitting in what they want. And again I think when you check with the retailers I think we were very good during Q2 to replenish what was available.

In Q2 and, and into the second half, I just want to really confirm how much of this is, is adidases choice. To limit the retailer demand for the product compared to retailers, actually ordering less products. Um, and within that you, if you have taken the decision, not to chase volume, especially in Europe, great for the, the full price, uh, sort of sell through. But is there any risk that you lose the Shelf space that you? You've worked so hard to regain, uh, with the the retailers, um, over the last couple of years. Um, and then the second question is your employed sales growth of, of around 6% does seem

Speaker #2: I think we also had big volumes of the relevant product. But of course there were also product that were high in demand where we were running out of inventory.

Speaker #2: So there is a mix. I also think that growing 14 percent in the first six months of this year in this environment is not something that you do easily.

Speaker #2: It's maybe a little bit surprising that people don't think this is good. Especially when you see the numbers from our competitors which I think had zero growth.

Bjørn Gulden: It's maybe a little bit surprising that people don't think this is good, especially when you see the numbers from our competitors, which I think had zero growth. It is a little bit difficult to understand. Again, we are conservative in the way we look at things. Especially with the uncertainty that we had around tariffs and supply chain issues, freight increases, and oil price, it hasn't been that easy to actually get to where we are. We might be a little bit more happy with ourselves than you guys are, and we apologize for that. Maybe you, me, and other people should have communicated differently.

Quite a Slowdown from what you achieved, uh, in in the first half. Um, especially with some World Cup sales still to come through in the third quarter, should probably be a couple hundred million euros, still coming through. And you talk about the recovery in Footwear in the in the fourth quarter inventory, up 13%. So are you seeing anything with regards a Slowdown in current, trading in July, either on DTC particularly or wholesale that has made you more cautious on the Outlook, thanks.

Speaker #2: It is a little bit difficult to understand. And again we are conservative in the way we look at things. And especially with the uncertainty that we had around tariffs and supply chain issues and freight increases and oil price.

Bjørn Gulden: Stores, I think this is important. Of course, we put more space to these kind of product in our stores, in cities in countries that were not qualified. The reason for this was not only to increase sales, which happened in many places, but of course, to celebrate the event. Here it is important that when you put World Cup products in, you have to take something out. That's why you cannot just add it on top, because, of course, it's cannibalizing some other products that would have been there. When the tournament is over and World Cup is out, of course, something else gets in. You can never take an event and just add it to the spreadsheet, because that's not how retail works. The activations, which had many different goals.

Bjørn Gulden: Stores, I think this is important. Of course, we put more space to these kind of product in our stores, in cities in countries that were not qualified. The reason for this was not only to increase sales, which happened in many places, but of course, to celebrate the event. Here it is important that when you put World Cup products in, you have to take something out. That's why you cannot just add it on top, because, of course, it's cannibalizing some other products that would have been there. When the tournament is over and World Cup is out, of course, something else gets in. You can never take an event and just add it to the spreadsheet, because that's not how retail works. The activations, which had many different goals.

Speaker #2: It hasn't been that easy to actually to get where we are so we might be a little bit more happy with ourselves than you guys are.

Speaker #2: And we apologize for that. Maybe you me and other people should have communicated differently. But there's no doubt the platform where the brand is standing going out of Q2 is much stronger than it was going.

Bjørn Gulden: There's no doubt that the platform where the brand is standing going out of Q2 is much stronger than it was going into Q1 and Q2, because the World Cup has added another dimension in many markets because people have made money with us. We have attracted both the male and the female consumer to our brand that we didn't have before. The soccer culture, we don't know how long it will last, but products that are connected to soccer are also much higher in demand than it's been before. We see, ironically, that coming out of World Cup replicas, the club replicas is also starting to work.

Speaker #2: Q1 and Q2 because the World Cup has added another dimension in many markets because people have made money with us. We have attracted both the male and the female consumer to our brand that we didn't have before.

Bjørn Gulden: Here you see from Mexico, where we had a huge event day before the opening, again, to activate the moment. Same thing, we talked about New York, where we had celebrities, concerts, games, youth tournaments. The stores here, for example, in Paris. We had even in China, who also qualified, a huge activation celebrating our campaign and the tournament. We even had Pedri flying from Spain to China right after the tournament to continue the soccer culture heat that is building also in China. The story goes on. Here is from Sydney, here is from Japan, and then you put it all together, the branding of the adidas campaign visible everywhere. Everything that we had control over, we were very happy. Except for one thing, and this is this picture.

Bjørn Gulden: Here you see from Mexico, where we had a huge event day before the opening, again, to activate the moment. Same thing, we talked about New York, where we had celebrities, concerts, games, youth tournaments. The stores here, for example, in Paris. We had even in China, who also qualified, a huge activation celebrating our campaign and the tournament. We even had Pedri flying from Spain to China right after the tournament to continue the soccer culture heat that is building also in China. The story goes on. Here is from Sydney, here is from Japan, and then you put it all together, the branding of the adidas campaign visible everywhere. Everything that we had control over, we were very happy. Except for one thing, and this is this picture.

Speaker #2: And the soccer culture. We don't know how long it will last but products that are connected to soccer are also much high in demand than it's been before.

No, the answer to your last question. No, July was strong. Uh, but you know, we only sitting on our order book that mirrors the wholesale business. And as you see, that was trending around 6% and need to see to forecast that for the third. And fourth quarter is very difficult. I, I think you assume that I don't think you have any retails in the world that forecast is double digit like for like growth. So, um, yes, it might be cautious and the max is 6%, right? So we reached 9.5, 949% then what you need in the second half is 6. Is there an upside to it? Yes, there is. Um, but again, you know us we're trying to tell you, you know what? We are sure about. It's the same with the are bits. We could have booked now, you know, uh terrorist back, like all the brands do and then look better. Maybe we should we didn't because we want to make sure that we actually deliver, uh, what we say.

Speaker #2: And we see ironically that coming out of World Cup replicas the club replicas is also starting to work. And when you then add that we certainly are a running brand again which we haven't been for a long time.

Bjørn Gulden: When you add that we certainly are a running brand again, which we haven't been for a long time, we have another big category that is growing 30%, which not only in performance running has the potential, but if you have running styles that do well on performance, it's easier to also, with some tweaks of the product, to get it on the shelf for lifestyle. Again, comparing apples by apples and going back to where we were a year and 2 years ago, we are much, much further. Of course, we are dependent on that we are in an environment where we can grow, and that we do a good job, which I actually think that our people are doing constantly.

Speaker #2: We have another big category that is growing 30 percent which not only in performance learning has the potential but if you have running styles that develop performance it's easier to also with some tweaks of the product to get it on the shelf for lifestyle.

Speaker #2: So again comparing Apple by Apple and going back to where we were a year and two years ago we are much much further. But of course we are dependent on that we are in an environment where we can grow.

Speaker #2: And that we do a good job which I actually think that our people are doing constantly.

Speaker #5: Great. Thanks.

Adam Cochrane: Great. Thanks.

Bjørn Gulden: You did probably notice that suddenly all the brands had pink boots, which of course, none of us was happy with. Cannot explain to you how it happened. Probably retail should have told us. They didn't, and we ended up in the first games looking the same. We tried as quickly as we could to get our sports marketing to change into the new collection, which is now going to store. As of the quarterfinal, you would have seen many of the players going into the new colorway, which is then white, dark blue, and red. Again, I hope next time we are better at not having the same colors. Not only soccer. In general, I think the visibility of a brand across many sports, being golf, being Formula One, being tennis, being rugby, whatever, and running, has never been stronger.

Bjørn Gulden: You did probably notice that suddenly all the brands had pink boots, which of course, none of us was happy with. Cannot explain to you how it happened. Probably retail should have told us. They didn't, and we ended up in the first games looking the same. We tried as quickly as we could to get our sports marketing to change into the new collection, which is now going to store. As of the quarterfinal, you would have seen many of the players going into the new colorway, which is then white, dark blue, and red. Again, I hope next time we are better at not having the same colors. Not only soccer. In general, I think the visibility of a brand across many sports, being golf, being Formula One, being tennis, being rugby, whatever, and running, has never been stronger.

Speaker #1: Next question comes from the line of Andreas Lehmann from Adobe HF. Please go ahead.

When it gets to the wholesale business and holding back versus conservative buys, that's very different from Market to Market, I, I think it is fair to say that in Europe. Um, the general retailer was very, very careful booking. So it wasn't necessary that we hold back volumes, but what we did is that when we saw the environment, we were holding back models because we didn't want to go into it. Um, discounted environment. Um, in all the markets we have holding back because we saw that the demand in our d2c was so high that we decided to hold back. But this is a decision that, uh, the markets are taking and it's very, very different from Market to Market. I am sure that many retailers around the world when they see these numbers. And also, when they saw what was happening, but trying to get more merchandise, I would like to have more merchandise but as you know, the availability then is necessary.

Operator: Next question comes from the line of Andreas Riemann from ODDO BHF. Please go ahead.

Speaker #4: Yes. Good afternoon. The first topic the World Cup again. So far it sounds like the remaining World Cup business in Q3 will be gross margin accretive or is there some World Cup product left that you have to discount now that certain teams didn't make it that far?

Andreas Riemann: Yes, good afternoon. The first topic, the World Cup, again. It sounds like the remaining World Cup business in Q3 will be gross margin accretive, or is there some World Cup product left that you have to discount now that certain teams didn't make it that far? Probably an easy one. The second topic is oil. The high oil price now affects transport costs and later probably also input costs. Would you say it is unlikely that the sports brands can raise the prices in this environment so that it will hurt the brand's margins at one point, maybe in 2027? Do you say oil is not as relevant as we all think?

Speaker #4: Probably an easy one. And second topic is oil. The high oil price now affects transport costs and later probably also input costs. So would you say it is unlikely that the sports brands can raise the prices in this environment so that it will hurt the brand's margins at one point maybe in '27?

Really sitting in what they want and and again uh, I think when you check with the retailers, I think we were very good during Q2 to replenish what was available. I think we also had you know big volumes of the relevant products, but of course, there were also products that were high in demand they were running out of inventory, you know? So there is a mix. Um, I also think that growing 14% in the first 6 months of this year, in this environment, it's not something that you do easily. Um,

Speaker #4: Or do you say oil is not as relevant as we all think?

Speaker #2: I mean you're German right? So I have to say that the only place where there might be inventory based on performance would be the German inventory.

Bjørn Gulden: You're German, right? I have to say that the only place where there might be inventory based on performance would be the German inventory. I think all other inventories compared to what we bought are fine. We all know, and this is important to say, that Germany is playing Nations League in September, October with a new coach, which happens to be our partner. We will be pretty active in celebrating the German team, also in the second half. I don't think we will have a huge amount of inventory that will be dangerous for the margin. When it looks to the rest of the business in Q3, I think Spain and Argentina are the two markets that will ask for new products. A, Spain, because of the success, and as I said, they now have jerseys with two stars.

Maybe a little bit. Surprising that people don't think this is good. Especially when you see the numbers from our competitors, which I think at zero growth. Um it is it is a little bit difficult to understand. Um, and again, um, you know, we are conservative in the way, we look at things, um, and especially

Bjørn Gulden: Again, we are investing in more partnerships to strengthen the visibility in sports, because as you know, we reduced that some years ago, and I am starting to be very happy on how we look in the different stadiums and arenas, and also the content that is then being produced in media. All that then cost a sale of EUR 6.7 billion, which is the highest nominal value we have ever done in a quarter, and that is a 14% currency-neutral growth. The gross margin above 52%, of course, also led by the high share of D2C, which we will get back to, but also controlling the markdown, and having a big share of full price sales. That gave us then the famous EUR 574 million EBIT, that despite us having invested EUR 12 million more in marketing.

Bjørn Gulden: Again, we are investing in more partnerships to strengthen the visibility in sports, because as you know, we reduced that some years ago, and I am starting to be very happy on how we look in the different stadiums and arenas, and also the content that is then being produced in media. All that then cost a sale of EUR 6.7 billion, which is the highest nominal value we have ever done in a quarter, and that is a 14% currency-neutral growth. The gross margin above 52%, of course, also led by the high share of D2C, which we will get back to, but also controlling the markdown, and having a big share of full price sales. That gave us then the famous EUR 574 million EBIT, that despite us having invested EUR 12 million more in marketing.

Speaker #2: I think all other inventories compared to what we bought are fine. But then we all know and this is important to say that Germany is playing nations league in September October with a new coach which happened to be our partner.

Speaker #2: So we will be pretty active in celebrating the German team also in the second half. So I don't think we will have a huge amount of inventory that will be dangerous for the margin.

Speaker #2: When it looks to the rest of the business in Q3 then I think Spain and Argentina are the two markets that will ask for new product.

Speaker #2: A Spain because of the success. And as I said they now have jerseys with two stars. And there's a difference between two stars and one stars and there are then developments around that.

Bjørn Gulden: There's a difference between two stars and one star, there are then developments around that. Argentina, of course, it will depend on what Messi is doing, should it be, I don't know, that he will then play a goodbye game or then, of course, there will be a lot of activities around him. I think all other federations, maybe with the exception of Italy, who are restocking everything because they were not qualified. I would assume that they, with Roberto as a coach, would also have a demand which is higher. As I said, the demand currently from everything with Real Madrid, for example, with José back and Bayern Munich, all the Clubs are very positive. I would see that the apparel trend on soccer can actually continue also with full margin.

Speaker #2: And then Argentina of course it will depend on what Messi is doing. But should it be should it be I don't know. But should it be that he will then play a goodbye game or then of course there will be a lot of activities around him.

Bjørn Gulden: As we have said now many times, this overinvestment in marketing would, of course, not continue in Q3 and Q4. If you add Q2 into Q1, you get the EUR 13.3 billion, which is also nominal, the highest that we ever had, which then also for the full H1 gives you 14% growth. Margin, little bit lower in Q1, that is at 51.8%. Remember, the share of D2C was then lower. That gives you then a H1 result of EUR 1,279 million, which is an EBIT percentage of 9.6%, which is then also despite the EUR 200 million more marketing, still almost a 10% EBIT. If you look at the geographies, you see Q2 on the left side, and H1 on the right side. North America, again, we know we have a lot of catch-up to do, but strong numbers with 17% and 15%. Europe at only 6%.

Bjørn Gulden: As we have said now many times, this overinvestment in marketing would, of course, not continue in Q3 and Q4. If you add Q2 into Q1, you get the EUR 13.3 billion, which is also nominal, the highest that we ever had, which then also for the full H1 gives you 14% growth. Margin, little bit lower in Q1, that is at 51.8%. Remember, the share of D2C was then lower. That gives you then a H1 result of EUR 1,279 million, which is an EBIT percentage of 9.6%, which is then also despite the EUR 200 million more marketing, still almost a 10% EBIT. If you look at the geographies, you see Q2 on the left side, and H1 on the right side. North America, again, we know we have a lot of catch-up to do, but strong numbers with 17% and 15%. Europe at only 6%.

Speaker #2: I think all other federations maybe with the exception of Italy who are restocking everything because they were not qualified I would assume that they with Mancini as a coach would also have a demand which is higher.

So, we might be a little bit more happy with ourselves than you guys are, and we apologize for that. Maybe you, me, and other people should have communicated differently. But there's no doubt that the platform with the brand, standing going out of Q2, is much stronger than it was going into, you know, Q1 and Q2. Because the World Cup has added another dimension in many markets, because people have made money with us, we have attracted both the male and the female consumer to a brand that we didn't have before, and the SOA culture—we don't know how long it will last. The products that are connected to soccer are also much higher in demand than they've been before. And we see, ironically, that coming out of World Cup replica, the club replicas are also starting to work, and when you then add that, we certainly are a running brand again—which we haven't been for a long time. Uh, we have another big category that is growing 30%, which, not only in performance running, has the potential that, you know, if you have running style...

Speaker #2: And then as I said the demand currently from everything with Real Madrid for example with Mourinho back and Bayern Munich and all the federations are actually clubs are very positive.

Speaker #2: So I would see that there are parallel trend on soccer can actually continue also with full margin. When it gets to the oil price you have to remember that the oil price have varied a lot.

files that develop on performance is easier to also meet some tweaks or the product to get it on the Shelf, uh, for lifestyle. So again, comparing Apples by apples and, and going back to where we were a year and 2 years ago, we are much much further, uh, but of course, we are dependent on that. We are in an environment where we can grow, um, and that we do a good job, which I I actually think that our people are doing constantly.

Okay, thanks.

Bjørn Gulden: When it gets to the oil price, you have to remember that the oil price has varied a lot. We've had peaks on the oil price much higher than we have today. When you look at the input price, there has been price increases. Then decreases again in this period when it gets to the cost of the product. The freight hasn't been that bad when it gets to inbound because we have long-term contracts. We haven't been hit that much. On e-com, where you're actually shipping to the consumer, with the growth we have, of course, had increases. This is, what should I say, a very diversified picture on the impact of oil price. I think the oil price is now around 90.

Next question comes from the line of Andrea sleman from Adobe HF. Please go ahead.

Speaker #2: And we've had peaks on the oil price much higher than we have today. So when you look at the input price there has been price increases and then decreases again in this period.

Yes, good afternoon. Um, the first topic um, the World Cup again.

Speaker #2: When it gets to the cost of the product the freight hasn't been that bad when it gets to inbound because we have long-term contracts.

Bjørn Gulden: I have to remind you again that the growth in Europe over the last two years has been very strong. Get back to what the numbers were in D2C. Greater China, in a market where big competitors are having negative numbers, is very strong at 15% and 16%. The combination of South Korea and Japan: 18% and 21%. LATAM is on fire, especially in Mexico, but also, of course, in Argentina and Brazil, at 28% and 27%. Emerging markets, despite 10 of the markets practically being at war, are up 12% and 11%. You summarize it, and you're then at 14%, both for the quarter and for H1. You then look into the channel, the wholesale—and remember, wholesale is where we sell into the trade, not out, but into the trade—at only 6%. This has been the pattern for a long time.

Bjørn Gulden: I have to remind you again that the growth in Europe the last two years have been very strong. Get back to what the numbers were in D2C. Greater China, in a market where big competitors are having negative numbers, very strong at 15% and 16%. The combination of South Korea and Japan, 18% and 21%. LATAM on fire, especially in Mexico, but also of course, in Argentina and Brazil, 28% and 27%. Emerging markets, despite 10 of the markets practically being in war, up 12% and 11%. You summarize it, and you're then at the 14%, both for the quarter and for H1. You then look into the channel, the wholesale, and remember, wholesale is where we sell into the trade, not out, but into the trade, at only 6%. This has been the pattern for a long time.

Speaker #2: So we haven't been hit that much. But on e-com where you actually shipping to the consumer and with the growth we have we have of course had increases.

Speaker #2: So this is what should I say a very diversified picture on the impact of oil price. I think the oil price now around 90 if it goes a little bit more down we shouldn't have any input increases because of that because we were actually at the same level before all this uncertainty.

So far, it sounds like the remaining World Cup business in Q3 will be, uh, gross margin accretive. Or is there some World Cup left that is just a discount now that certain teams didn't make it that far? Probably easy—one. And the second topic is oil. The high oil price now affects transport costs and, later, probably also input costs. So, would you say it is unlikely that the sports brands can raise their prices in this environment, so that it will hurt the brands' margins at one point—maybe in '27?

Or do you say oil is not as relevant as we all think?

Bjørn Gulden: If it goes a little bit more down, we shouldn't have any input increases because of that, because we were actually at the same level before all this uncertainty. I'm not really concerned about the oil price right now. I was a lot more concerned two, three months ago, because then we were looking at completely different pricing on materials. That seems to be stabilized. When it gets to raising prices, it's easy to raise the prices for the shoe box or the price ticket. The question is, what discounts do you need to actually sell the product? The relevant prices are always what the consumer pays, not what's on the price tag. I think we have seen, especially in the US, that discounts ate up a lot of the tariff increases.

Speaker #2: So I'm not really concerned about the oil price right now. It was a lot more concerned two three months ago because then we were looking at completely different pricing on materials.

Speaker #2: And that seems to be stabilized. When it gets to racing prices it's easy to raise the prices for the shoebox or the price ticket.

Speaker #2: The question is what discounts do you need to actually sell the product because the relevant prices have always what the consumer pays not what's on the price tag.

Bjørn Gulden: When we started the sell-in period for Q1 and Q2, it was actually flat. We saw unbelievable growth in the D2C business, with 23% in our brick and mortar and even 27% in e-com. Remember, this is sell-out to the consumer and shows the demand for the product with the consumers. That gives you a split of 57/43. This is not a strategic move; it’s actually what the consumer is choosing. I'll give you now the D2C numbers per region, just so you understand how strong the demand was. You see in North America, the D2C in the quarter was even 39%. In Europe, 12%—so twice what the sell-in demand was. Greater China at 22%, LATAM at 37%, emerging at 24%, and the combination of South Korea and Japan at 25%.

Bjørn Gulden: When we started the sell-in period for Q1 and Q2, it was actually flat. An unbelievable growth in the D2C business with 23% in our brick and mortar and even 27% in e-com. Remember, this is sell out to the consumer and then tells you the demand for the product with the consumers. That gives you then a split of 57/43. This is not a strategic move, but it's actually what the consumer is choosing. I'll give you now the D2C numbers per region, just so you understand how strong the demand was. You see in North America, the D2C in the quarter was even 39%. In Europe, 12%, so twice what the sell-in demand was. Greater China at 22%, LATAM at 37%, emerging at 24%, and the combination South Korea and Japan at 25%.

Um, I mean you're German, right? So I have to say that the only place where there might be inventory, uh, based on performance if you see the German inventory, I think all other inventors compared to what we bought are fine. But then we all know and and this is important to say that Germany is playing, you know, the nation's league in September October, with a new coach, which happened to be our partner. Uh, so we will be pretty active in in celebrating the German team. Uh, also, uh, in the second half. So I, I don't think we will have a huge amount of inventory that will be, uh, dangerous for the margin.

Speaker #2: And I think we have seen especially in the US that discounts ate up a lot of the tariff increases. I think when you look at our margin we have been pretty good or lucky depending on how you see it.

When it looked to the rest of the business in Q3 then, I think Spain and Argentina are the 2 markets that will ask for new products. A Spain

Bjørn Gulden: I think when you look at our margin, we have been pretty good or lucky, depending on how you see it, by actually getting the prices that we need for the cost of the product. That's why you're running Gross margins above 52, which I don't think Adi has done very often without Yeezy. We feel that we have the different components of the margin pretty good in control right now.

Speaker #2: By actually getting the prices that we need for the cost of the product. And that's why you're running gross margins about 52 which I don't think Audi has done very often without EC.

Speaker #2: So we feel that we have the different components of the margin pretty good in control right now.

Speaker #4: Very good. And if the German really gets cheaper you can tell me.

Andreas Riemann: Very good. If the German rugby gets cheaper, you can tell me.

Speaker #2: Okay. I will.

Speaker #5: Maura, we have time for two more questions.

Bjørn Gulden: Okay, I will.

Sebastian Steffen: Maura, we have time for two more questions.

Speaker #1: Yes sir. The next question comes from the line of Piral Dadania from RBC. Please go ahead.

Operator: Yes, sir. The next question comes from the line of Piral Dadhania from RBC. Please go ahead.

Bjørn Gulden: I'm telling you this because it is a great situation to be in that the sell out is stronger than sell-in. I had never seen numbers like this before, and again, that's probably why we are celebrating a little bit more than you do because we clearly see that product and marketing and how we activate it is actually working for both her and him. You then look at the execution, same thing, both our e-com and our physical stores, of course, with global concepts, but then localized depending on what is relevant. That's why you see front of stores and also the different pages in e-com, then being targeting to the demand in the market. You then look at divisions, yes, footwear growing at only 1%, apparel growing at 35%, and accessory growing as 20%.

Bjørn Gulden: I'm telling you this because it is a great situation to be in that the sell out is stronger than sell-in. I had never seen numbers like this before, and again, that's probably why we are celebrating a little bit more than you do because we clearly see that product and marketing and how we activate it is actually working for both her and him. You then look at the execution, same thing, both our e-com and our physical stores, of course, with global concepts, but then localized depending on what is relevant. That's why you see front of stores and also the different pages in e-com, then being targeting to the demand in the market. You then look at divisions, yes, footwear growing at only 1%, apparel growing at 35%, and accessory growing as 20%.

Speaker #2: Thank you. Good afternoon. So my first question is on the guidance for 2026 please. I'm just wondering if we look at the 2.3 billion euros of targeted EBIT if you get incremental revenue contribution from DTC in the second half of the year is there any drop through to earnings from that or there isn't any leverage from DTC sales given the higher run rate OPEX that's required to fulfill that.

Piral Dadhania: Thank you. Good afternoon. My first question is on the guidance for 2026, please. I'm just wondering if we look at the EUR 2.3 billion of targeted EBIT, if you get incremental revenue contribution from DTC in the H2 of the year, is there any drop-through to earnings from that, or there isn't any leverage from DTC sales given the higher run rate OpEx that's required to fulfill that?

Because of of the success. And as I said, they now have jerseys with 2 stars. Um and you know there's a difference between 2 stars and 1 stars and there are then developments around that and then are the key. Now of course, it will depend on what message is doing but should it be? Should it be? I don't know. But should it be that he will then play a goodbye game or or then then of course there will be a lot of activities around him. I think all other all other federations. Maybe, with the exception of Italy, we are restocking everything because they were not qualified. I would assume that they even me as a coach would, also have a demand, Which is higher. And then, as I said, the the amount currently from everything, with the Real Madrid, for example, you know, with Mourinho, back and Bayern Munich, um, and all the federations are actually clubs are very positive. So I I would see that the apparel trend on soccer can actually continue also with the with the full margin.

When he gets to the oil price, you have to remember that oil prices have varied a lot, and we've had peaks in the oil price much higher than we have today.

Speaker #2: And just related to that I just thinking are we still on track to reach 10 percent margin by 2027 which does leave a lot of heavy lifting to do into next year.

So, when you look at the input price, there has been price increases and then decreases again in this period when it gets the cost of the product.

Piral Dadhania: Just related to that, I'm just thinking, are we still on track to reach 10% margin by 2027, which doesn't leave a lot of heavy lifting to do into next year from a margin perspective. Just secondly, on Stan Smith, I think, Bjørn, you mentioned that this is a trend that you're seeing building. Could you maybe give us a bit more indication about which regions or markets you're seeing that in and what your timings are around scaling this franchise into next year? Thank you very much.

Speaker #2: From a margin perspective and then just secondly on Stan Smith I think Bjorn you mentioned that this is a trend that you're seeing kind of building.

Speaker #2: Could you maybe give us a bit more indication about which regions or markets you're seeing that in and what your timings are around scaling this franchise into next year.

Speaker #2: Thank you very much. Your EBIT leverage on DTC is of course depend on where it is. There are markets that are extremely profitable on DTC and there's also a difference between e-com and concept stores and factory outlets.

Bjørn Gulden: I don't know if you remember, but we did flag this to you 6, 9 months ago, that we would see a stagnation in footwear, especially on the lifestyle side because of the amount of product in the market. We will see a demand for apparel growing dramatically, not only because of World Cup, but of course also because of World Cup. I think you agree that when people are buying product to go to the stadium, they buy replicas and tops and not necessarily shoes. The accessory business is following the heat of the brand. You will continue, in my opinion, when I look at the order book, to see footwear being flattish in Q3, but then you will start see it growing again in Q4.

Bjørn Gulden: I don't know if you remember, but we did flag this to you 6, 9 months ago, that we would see a stagnation in footwear, especially on the lifestyle side because of the amount of product in the market. We will see a demand for apparel growing dramatically, not only because of World Cup, but of course also because of World Cup. I think you agree that when people are buying product to go to the stadium, they buy replicas and tops and not necessarily shoes. The accessory business is following the heat of the brand. You will continue, in my opinion, when I look at the order book, to see footwear being flattish in Q3, but then you will start see it growing again in Q4.

Bjørn Gulden: Your EBIT leverage on DTC is, of course, depend on where it is. There are markets that are extremely profitable on DTC, and there's also a difference between e-com and concept stores and factory outlets, so it depends on where it is. In general, a DTC business, if you do it good, should be higher EBIT than wholesale. I think we are in line to do the 10% EBIT going forward. I'm not sure if you said it means that we need to do heavy lifting. I didn't catch it. There's always heavy lifting to do in this industry to deliver double-digit EBIT. I think we're closer to it than we ever have been. I'm not sure if it's heavy compared to what it's been before.

Speaker #2: So it depends on where it is. But in general DTC business if you do it good should be higher EBIT than wholesale. I think we are in line to do the 10 percent EBIT going forward.

Because of that—because we were actually at the same level before all this uncertainty. So I'm not really concerned about the oil price right now. I was a lot more concerned, you know, two or three months ago, because then we were looking at completely different pricing on materials, and that seems to have stabilized.

Speaker #2: I'm not sure if you said it means that we need to do heavy lifting. I didn't catch it. There's always heavy lifting to do in this industry.

Speaker #2: To deliver double digit EBIT. But I think we closer to it than we ever have been. So I'm not sure if it's heavy heavy compared to what it's been before.

When it gets to raising prices, you know, it's easy to raise the prices for, uh, the shoe box or the price ticket. The question is, what discounts do you need to actually sell the product? Because, you know, the relevant prices are always what the consumer pays, not what's on the price tag, and I think we have seen, especially in the US.

Bjørn Gulden: Again, you cannot plan this in details because you don't know what is happening in the D2C business, but the pattern has been known for a long time. That means that in the mix in the quarter, footwear is 52, apparel at 40, and accessory at eight. You will see this start to change again to be more football-led at the back end of the year. Again, we are a sports brand first. That's what adidas gave us. We are investing in performance. I told you three, four years ago that we will try to create heat around the brand, sell lifestyle product, get the consumer into our performance product because they like the brand.

Bjørn Gulden: Again, you cannot plan this in details because you don't know what is happening in the D2C business, but the pattern has been known for a long time. That means that in the mix in the quarter, footwear is 52, apparel at 40, and accessory at eight. You will see this start to change again to be more football-led at the back end of the year. Again, we are a sports brand first. That's what adidas gave us. We are investing in performance. I told you three, four years ago that we will try to create heat around the brand, sell lifestyle product, get the consumer into our performance product because they like the brand.

Speaker #2: And to be honest with you if we do a decent job with everything we can measure we should deliver it. And then when it gets to Stan Smith Stan Smith that always been a product that when it goes it actually goes global.

Bjørn Gulden: To be honest with you, if we do a decent job with everything we can measure, we should deliver it. When it gets to Stan Smith. Stan Smith had always been a product that when it goes, it actually goes global. Normally driven first of Europe, then going to Asia, and then less, of course, to a certain target group in the US. The higher end in the US has actually been very strong in demand. The triple white thing, even triple white Superstar, which is kind of a different, what should I say, type of shoe is doing very well. The triple white look is definitely coming back, and I would say globally, which, of course, is what we like with these kind of franchises.

Speaker #2: Normally driven first of Europe. Then going to Asia. And then less of course to a certain target group in the US. Although right now ironically the higher end in the US has actually been very strong in demand and the triple white thing even triple white superstar which is kind of a different what should I say type of shoe is doing very well.

That discounts 8 up a lot of the Tariff increases. Um, I I I I think when you look at our margin we have been pretty good or lucky depending on how you see it by actually getting, uh, the prices that we need for the the cost of the product and that's why you're running, you know. Gross margins about 52 which I don't think Hardy has done very often without the EC. So uh we we we feel that we have uh the different components of the margin uh, predicting control right now.

Very good. And if the German Judy gets cheaper, you can tell me.

Speaker #2: So the triple white look is definitely coming back. And I would say globally which of course is what we like with these kind of franchises.

Bjørn Gulden: We thought already then that we will have technologies and product, what should I say, pipelines that would start to work as we were getting closer to 2025 and 2026. That's also what happened. You see here the performance business is growing at 39%. Yes, football of course inflated by World Cup, running now, I think for the Q3, growing almost 30%, trading almost double digit, and motorsport growing 70%. The only negative number here that I would be, what should I say, working hard on is the basketball. I told you that that will take a little bit of time. Remember, this is performance basketball, so the absolute number is actually very small. If you then look at the different categories from the consumer point of view, I think it's fair to say that we are winning in running.

Bjørn Gulden: We thought already then that we will have technologies and product, what should I say, pipelines that would start to work as we were getting closer to 2025 and 2026. That's also what happened. You see here the performance business is growing at 39%. Yes, football of course inflated by World Cup, running now, I think for the Q3, growing almost 30%, trading almost double digit, and motorsport growing 70%. The only negative number here that I would be, what should I say, working hard on is the basketball. I told you that that will take a little bit of time. Remember, this is performance basketball, so the absolute number is actually very small. If you then look at the different categories from the consumer point of view, I think it's fair to say that we are winning in running.

Yes, sir. The next question comes from the line of PA from RBC. Please go ahead.

Speaker #5: Thank you. That's great.

Piral Dadhania: Thank you. That's great.

Speaker #1: Today's last question comes from the line of Warwick Okin from BNP Paribas. Please go ahead.

Operator: Today's last question comes from the line of Warwick Okines from BNP Paribas. Please go ahead.

Speaker #6: Thanks very much. I just want to ask two questions that come back on topics we've already talked about. Bjorn just to come back on wholesale.

Warwick Okines: Thanks very much. I just want to ask two questions that come back on topics we've already talked about. Bjørn, just to come back on wholesale. You said the H2 is trending at six, seven, so similar to the H1, but you're seeing a better Q4 footwear order book. What exactly is it that you're seeing in footwear? Is that the broader range getting traction or particular styles? Is there anything that's slowing to balance out that growth to be similar to the H1?

Speaker #6: You said the second half is trending at six, seven. So similar to the first half but you're seeing a better Q4 footwear order book.

Speaker #6: So what exactly is it that you're seeing in footwear? Is that the broader range getting traction or particular styles? And is there anything that's slowing to balance out that growth to be similar to the first half?

Speaker #6: And then if I may one for Harm on operating overheads take your point about the growth in DTC in Q2 driving a particular amount of cost growth.

Warwick Okines: Then if I may, one for Harm on operating overheads. I take your point about the growth in DTC in Q2 driving a particular amount of cost growth. Actually DTC was pretty strong in Q1 as well, and the growth in cost was very different in Q2. What drops away in the H2 to give you confidence that OpEx will be under control in H2? Thank you.

Bjørn Gulden: We are winning competitions on the road, on the track. We are sponsoring big events. Our running shoes in general are having great sell-throughs, which was not the case three years ago. The category training, again, everything that is hybrid training is growing fast. Yes, we are not the partner of the events, but we sponsor a lot of athletes, and are seeing a great demand both in HYROX and in CrossFit. You see some of the winners on this picture. In general, the visibility in sports, winning events, and therefore getting the image of being a performance brand again is strengthening. You see some of the sports here, and I will note, Sultans is a nickname of the Turkish women's volleyball team who won the Nations League, which is a new asset for us, again, probably the most known team for women's sports in Turkey.

Bjørn Gulden: We are winning competitions on the road, on the track. We are sponsoring big events. Our running shoes in general are having great sell-throughs, which was not the case three years ago. The category training, again, everything that is hybrid training is growing fast. Yes, we are not the partner of the events, but we sponsor a lot of athletes, and are seeing a great demand both in HYROX and in CrossFit. You see some of the winners on this picture. In general, the visibility in sports, winning events, and therefore getting the image of being a performance brand again is strengthening. You see some of the sports here, and I will note, Sultans is a nickname of the Turkish women's volleyball team who won the Nations League, which is a new asset for us, again, probably the most known team for women's sports in Turkey.

Thank you, good afternoon. Um, so my first question is on the guidance for 26, please. Um, I'm just wondering if, um, we look at the 2.3 billion euros of targeted ebit. If you get incremental Revenue contribution from BTC in the second half of the year, is there any drop through to earnings from that? Or there isn't any leverage from BTC sales, given the higher run rate of X, that's required to fulfill that. Um, and just related to that, I just thinking, are we still in on track to reach 10% margin by 27? Which doesn't leave a lot of heavy lifting to do into next year from a margin perspective. And then just, secondly, on Stan Smith. I think your new mentioned that this is a trend that you're seeing um, kind of building. Could you maybe give us a bit more indication about which regions or markets you're seeing that in and what your timings are around scaling this, uh, franchise, uh, into next year. Thank you very much.

Speaker #6: But actually DTC was pretty strong in Q1 as well and the growth in cost was very different in Q2. So what drops away in the second half to give you confidence that OPEX will.

Speaker #6: Be under control in H2? Thank you.

Uh you're a bit um leverage on. D2c is of course depend on where it is. So there are markets that are extremely profitable on d2c and there's also

Speaker #2: First of all of course we see the order book from Q3 Q4 and the wholesale business then growing in footwear. So we know there's a higher demand coming in Q4.

Bjørn Gulden: First of all, of course, we see the order book from Q3, Q4 in the wholesale business, then growing in footwear. We know there's a higher demand coming in Q4, and it's a combination of performance, running strong, soccer strong, and I would say also training strong. Then there is certain units on the lifestyle side that is getting bigger bookings. I do think the pattern is also, if you're really honest, that there was an apparel boom among our retailers that gave them more open to buy for apparel. Given that the freshness in apparel was less discounted, it was easier for them to book more apparel than footwear.

a difference between Ecom and concept stores and Factory Outlets so it depends on where it is, but in general, a d2c business if we do it. Good should be higher a bit um, than uh, wholesale.

Speaker #2: And it's a combination of performance. So running strong soccer strong. And I would say also training strong. And then there is certain units on the lifestyle side that is getting bigger bookings.

Uh I think we are in line to do the 10% debit going forward. I'm not sure if you said, it means that we need to do heavy lifting. I I didn't catch it.

Speaker #2: I do think the pattern is also if you really honest that there was a paddle boom among our retailers that gave them more open to buy for apparel.

Um, there's always heavy lifting to do in this industry to deliver double digit debit. Uh, but I think we're closer to it than we ever have been. Um, so I'm not sure if it's heavy heavy compared to what it's been before. Uh, and to be honest with you, if we do a decent job with everything we can measure, we should deliver it. Um,

Speaker #2: And given that the freshness in apparel was less discounted there was easier for them to book more apparel than footwear. And that when we get to Q4 I assume that the assumption is that they will have less inventory of what they have too much of.

Bjørn Gulden: Again, a great thing for us. The recipe in performance, we have told you launch technologies to win events and be visible with designs, you scale it into the commercial. Adizero, Evo 3, Evo SL, here you see both the Evo SL from a running point of view stretched even into SL Zipper, that, yes, is the Evo SL construction with a zipper and with different stripes execution going across the upper. Many versions about this and a huge success both in the running side and in the lifestyle side. In soccer, the same. Here you see F50 Hyperfast Evo, which is the shoe that the professional player is playing at. The takedown in the new color, where we take the same look and feel, almost the same last, even down to the price point of EUR 60.

Bjørn Gulden: Again, a great thing for us. The recipe in performance, we have told you launch technologies to win events and be visible with designs, you scale it into the commercial. Adizero, Evo 3, Evo SL, here you see both the Evo SL from a running point of view stretched even into SL Zipper, that, yes, is the Evo SL construction with a zipper and with different stripes execution going across the upper. Many versions about this and a huge success both in the running side and in the lifestyle side. In soccer, the same. Here you see F50 Hyperfast Evo, which is the shoe that the professional player is playing at. The takedown in the new color, where we take the same look and feel, almost the same last, even down to the price point of EUR 60.

Bjørn Gulden: When we get to Q4, I assume that the assumption is that they will have less inventory of what they have too much of, and that they will guide more open to buy again back to us on the lifestyle side. Again, you never have all this data. As you can see, we have a momentum in footwear in the performance side, and there's no reason why that should stop. The three major categories is football, running, and training. On the lifestyle side, with the launches we have, and leading into 2027, we see an increased interest both on men's and women's again. That should correspond then to a growth again in Q4. I'm more uncertain about footwear in Q3.

Speaker #2: And that they will guide more open to buy again back to us on the lifestyle side. But again you never have all this data but as you can see we have a momentum in footwear in the performance side and there's no reason why that should stop.

And then when it gets to Stan Smith, um, Stan Smith had always been a product that when it goes, it actually goes Global um normally driven first of Europe, then going to Asia and then less of course to a certain Target group in the US. Although right now ironically the higher end in the US has actually been very strong in demand um and the triple white thing, even triple white Superstar, which is kind of a different. Uh, what should I say? Uh, type of shoe is doing very well. So the triple white look is definitely coming back.

Speaker #2: And the three major categories is football running and training. And then on the lifestyle side with the launches we have and leading into 2027 we see an increased interest both on men's and women's again.

Um, and I would say, uh, globally—which of course is what we like with these kind of franchises.

Thank you, that's great.

Speaker #2: That should correspond then to a growth again in Q4. I'm more uncertain about footwear in Q3. It might be that it will turn stronger positive.

Those last question comes from the line of Warwick, okina from BNP pariba, please go ahead.

Bjørn Gulden: It might be that it will turn stronger positive. That is of course then dependent on that the inventory and the discounting goes down. Again, it's not a negative picture at all, to be honest. Again, the 6% is just the math. It's not saying that we were happy with 6%, but that is the math to get into our guidance. Harm?

Speaker #2: But that is of course then dependent on that the discounting goes down. So again it's not a negative picture at all to be honest.

Bjørn Gulden: Hero to high low in all categories. Also in training, here you see maybe the most innovative training shoe for hybrid training, meaning HYROX. The takedown, which is then a huge commercial shoe with bookings over 1 million pair already. Same system. In general, we have talked to you about printed technologies. Now we have a printed basketball shoes, which is being played in college and also will be played in NBA. Some of the players are now having it in the summer season camp. The second shoe is the printed soccer boot that one of the MLS players, Cav Sullivan, played already last week. Fully printed shoe. The technology of printed shoes is now also hitting the top athletes, which is new. First signature shoe on women since a long time. You see it here from Sophie Cunningham.

Bjørn Gulden: Hero to high low in all categories. Also in training, here you see maybe the most innovative training shoe for hybrid training, meaning HYROX. The takedown, which is then a huge commercial shoe with bookings over 1 million pair already. Same system. In general, we have talked to you about printed technologies. Now we have a printed basketball shoes, which is being played in college and also will be played in NBA. Some of the players are now having it in the summer season camp. The second shoe is the printed soccer boot that one of the MLS players, Cav Sullivan, played already last week. Fully printed shoe. The technology of printed shoes is now also hitting the top athletes, which is new. First signature shoe on women since a long time. You see it here from Sophie Cunningham.

Speaker #2: And again the six percent is just the math. It's not saying that we will happy with six percent but that is the math to get in to our guidance.

Speaker #5: Harm.

Speaker #7: Yeah. On the operating overheads yes I'm very confident that it will be different in Q3 and Q4. What is the reason for that? First of all yes we had good growth in DTC.

Harm Ohlmeyer: On the operating overheads, yes, I'm very confident that it will be different in Q3 and Q4. What is the reason for that? First of all, yes, we had good growth in D2C in Q1 as well, Warwick, but e-commerce was growing double the pace in Q2 versus Q1. Of course, this is where we have more variable costs compared to retail. On retail, it's really the one-time thing with pop-up stores in the US during the event. There's a lot of logistics and operating overheads linked to the World Cup that we invested just in Q2, event-related logistics, and again, staffing in retail stores to replenish every day twice and all these things.

Speaker #7: In Q1 as well Warwick. But e-commerce was growing double the pace in Q2 versus Q1. And of course this is where we have more variable cost compared to retail.

Speaker #7: And on retail it's really the one time thing with pop-up stores in the US during the event. There's a lot of logistics and operating overheads linked to the World Cup that we invested just in Q2 event related logistics.

Um, and then if I met 1 for harm, um, on operating overheads, uh, take your point about the, the growth in, in DTC, in Q2 driving a particular amount of of cost growth, but but actually DTC was pretty strong in q1 as well. And and the growth in cost was very different in Q2. Um, so what drops away in in the second half to give you confidence that Opex will will be under control in in H2. Thank you.

Speaker #7: And again staffing and retail stores to replenish and aggregate twice and all these things. And then lastly there will continue in the second half but just Q2 compared to Q1.

Harm Ohlmeyer: Lastly, it will continue in H2, but just Q2 compared to Q1, it's also we do the salary increases starting in April, and that, of course, as a global company, that's something you feel Q2 versus Q1, but you don't see that versus per year when it comes to Q3 or whatever. It's normalized. Just rest assured, Q3 and Q4 will be normalized both from a marketing but also from an operating overhead point of view, whatever the D2C growth will be. To the question earlier, if D2C will be better, we will make sure that it drops to the bottom line and will be reflected in the guidance then. That's where we are.

Speaker #7: It's also we do the salary increases in the starting in April. And that's of course as a global company. That's something you feel Q2 versus Q1.

Bjørn Gulden: Same thing again, dedicated to her, selling very well already in retail. Because of the investment in volleyball, the Crazyflight 7, same thing. Innovation also in apparel. You see in the cooling vest and the cooling jacket that we had in Formula 1 was now transferred into the World Cups to the teams who are wearing the same equipment. We even have cooling boots for the players, so they can actually wear while they were sitting before the games or during the game, if you were on the bench. We have Tsareva in our 3D Climacool winning the French Open. Of course, we have now many versions of the Hyperboost hitting the market, which in my opinion is the best foam that you can have in comfort running.

Bjørn Gulden: Same thing again, dedicated to her, selling very well already in retail. Because of the investment in volleyball, the Crazyflight 7, same thing. Innovation also in apparel. You see in the cooling vest and the cooling jacket that we had in Formula 1 was now transferred into the World Cups to the teams who are wearing the same equipment. We even have cooling boots for the players, so they can actually wear while they were sitting before the games or during the game, if you were on the bench. We have Tsareva in our 3D Climacool winning the French Open. Of course, we have now many versions of the Hyperboost hitting the market, which in my opinion is the best foam that you can have in comfort running.

Um, first of all, of course we see the order book, um, from Q3 Q4 and the wholesale business, then growing in Footwear. So we know there's a higher demand coming in Q4, uh, and it's a combination of performance. So running strong, uh, soccer strong. Um, and I would say also training strong,

Speaker #7: But you don't see that versus prior year when it comes to Q3 or whatever. So it's normalized. So just rest assured Q3 and Q4 will be normalized both from a marketing but also from an operating overhead point of view whatever the DTC growth will be.

Speaker #7: And to the question earlier if DTC will be better we will make sure that it drops to the bottom line. And we'll reflect in the guidance then.

And then, there are certain units on the lifestyle side that are getting bigger bookings. Um, I do think the pattern is also, if you’re really honest, that there was a pile, boom, uh, among our retailers, um, that gave them more open-to-buy for apparel.

Speaker #7: So that's where we are.

Speaker #6: Very good. Thank

Speaker #3: Yeah. Thanks very much. Warwick. Thanks very much also Maura and thanks very much to Bjorn and Harm. And of course thanks to all of you for participating in our call today.

Warwick Okines: Very good. Thank you.

Sebastian Steffen: Yeah, thanks very much, Warwick. Thanks very much also, Maura, and thanks very much to Björn and Harm. Of course, thanks to all of you for participating in our call today. As always, if you have any follow-up questions, and I have the feeling that there may still be some, please feel free to reach out anytime to Adrienne, Philip, Chiara, or myself, or any other member of the IR team. We very much look forward to speaking to you. Before we wrap up, I just want to send out a quick reminder that we look forward to hopefully welcoming many of you here to our Home of Innovation event on 23 September and 24 September. Björn mentioned it.

Speaker #3: As always if you have any follow up questions and I have the feeling that there may still be some please feel free to reach out anytime to Adrian, other member of the IR team.

And given that the freshness in apparel was less discounted, there was easier for them to book, uh, more apparel and Footwear and that when we get to Q4, I assume um, that the assumption is that they will have less inventory. Or what they have too much of and that they will guide more open to buy again back to our

Bjørn Gulden: I think we told you before that the 23 September and 24 September, we will have an innovation day, which you will be invited, where our innovation people will then take you through the pipeline of innovation, both conceptually and also finished product, so that you can ease the belief that we have lack of innovation, because we don't. We know that the performance side over time drives the lifestyle side. You also know that we have had a great success on the lifestyle side over the last 3 years. The lifestyle business in the quarter. Now we need to be honest that part of the football product that you saw is growing almost 80% are, of course, lifestyle product, but it's classified as football.

Bjørn Gulden: I think we told you before that the 23 September and 24 September, we will have an innovation day, which you will be invited, where our innovation people will then take you through the pipeline of innovation, both conceptually and also finished product, so that you can ease the belief that we have lack of innovation, because we don't. We know that the performance side over time drives the lifestyle side. You also know that we have had a great success on the lifestyle side over the last 3 years. The lifestyle business in the quarter. Now we need to be honest that part of the football product that you saw is growing almost 80% are, of course, lifestyle product, but it's classified as football.

Speaker #3: We very much look forward to speaking to you. And before we wrap up I just want to send out a quick reminder that we look forward to hopefully welcoming many of you here to our home of innovation event on September 23 and 24.

Speaker #3: Bjorn mentioned it. We think if you come and look at the strong pipeline that we have for 2027 and also 2028 hopefully you will be able to better understand our confidence in our ability to continue to grow high single digit in 2027 and deliver on our 10 percent margin target.

Sebastian Steffen: We think if you come and look at the strong pipeline that we have for 2027 and also 2028, hopefully you will be able to better understand our confidence in our ability to continue to grow high single-digit in 2027 and deliver on our 10% margin target. If you haven't registered yet, there's still some time to do so. We will keep the registration off for a few more days, and we would be very happy to be able to welcoming you here on our beautiful three stripes campus in the fall. With that, thank you very much again for joining us today. We wish you a wonderful summer, great rest of the day, and look forward to catching up with you. Bye-bye.

Speaker #3: If you haven't registered yet there's still some time to do so. We will keep the registration off for a few more days. And we would be very happy to be able to welcoming you here on our beautiful three stripes campus in the fall.

Bjørn Gulden: I think if you're really honest, the consumer that used to buy a sportswear, an original product, in this quarter has also bought football product. Maybe that is a little bit misleading, but it's very hard to classify this accurate. Here, yes, we are using our athletes also in lifestyle activations, but we also have a lot of non-athletes or people coming from different, I would say, parts of entertainment that are then used for marketing lifestyle product. You see Timothée Chalamet, you see Kendall Jenner, you see Bad Bunny and the activations here is, of course, both global and local, and there is a huge amount of activities going on. We would still say that, especially for her, we have the hottest shoes and silhouettes in the market. Many of them has been stretched into new silhouettes.

Bjørn Gulden: I think if you're really honest, the consumer that used to buy a sportswear, an original product, in this quarter has also bought football product. Maybe that is a little bit misleading, but it's very hard to classify this accurate. Here, yes, we are using our athletes also in lifestyle activations, but we also have a lot of non-athletes or people coming from different, I would say, parts of entertainment that are then used for marketing lifestyle product. You see Timothée Chalamet, you see Kendall Jenner, you see Bad Bunny and the activations here is, of course, both global and local, and there is a huge amount of activities going on. We would still say that, especially for her, we have the hottest shoes and silhouettes in the market. Many of them has been stretched into new silhouettes.

Boss, uh, on the lifestyle side. Um, but again, you never have all these data, um, but as you can see, we have a momentum in Footwear, in the performance side. And there's no reason why that should stop and the 3 major categories is football running, uh, and training. Um, and then on the lifestyle side, with the launches we have, um, and leading into 27, uh, we see an increased interest bought on men's and women's again, that should correspond to a growth again. In Q4 I'm more uncertain about Food, Tours in in, in Q3 it might be that it will turn stronger positive, uh, but that is of course, then dependent on that the inventory and the discounting goes down. So, um, again, it's, it's not a negative picture at all to be honest. Um, and and again, the 6% is just the math, it's not saying that we will happy with 6% but that is the math to get in um, to our guidance.

Speaker #3: And with that thank you very much again for joining us today. We wish you a wonderful summer. Great rest of the day and look forward to catching up with you.

Here on the operating overhead. Um, yes. I'm very confident that it will be different in Q3 and Q4 what is the reason for the first of all? Yes, we had good growth. Indeed to see in q1 as well work. But e-commerce was growing double the pace in Q2 where those q1 and and of course this is where we have more variable cost compared to retail and on retail it's really the 1 time thing with pop-up stores in the US during the event. There's a lot of logistics and operating over. It's linked to the World Cup that we

Bjørn Gulden: The Samba, for example, into both ballerinas, into mules, into Mary Janes. We have a lot of low profile, and we have running shoes built on old constructions and on new constructions. Again, I have not the feeling that there is anything else in the marketplace that is hotter than we have across the globe. I would mention to you that court is coming back, especially in triple wide. The Stan Smith sector will start to grow again, and you will see many versions in addition to the OG Stan Smith, and you will see many activations with many different partners. Apparel, huge growth, not only in World Cup, but also in modern silhouettes, and of course, fabrics.

Bjørn Gulden: The Samba, for example, into both ballerinas, into mules, into Mary Janes. We have a lot of low profile, and we have running shoes built on old constructions and on new constructions. Again, I have not the feeling that there is anything else in the marketplace that is hotter than we have across the globe. I would mention to you that court is coming back, especially in triple wide. The Stan Smith sector will start to grow again, and you will see many versions in addition to the OG Stan Smith, and you will see many activations with many different partners. Apparel, huge growth, not only in World Cup, but also in modern silhouettes, and of course, fabrics.

Invested just in Q2 event related uh Logistics. Um and again, Staffing and retail stores um to replenish your average day twice and all these things. And then lastly, um, we will continue in the second half, but just Q2 compared to q1. It's also we do the salary increases in the, in the starting in April and that's, of course, as a global company. That's something you feel Q2 versus q1. But you don't see that, you know, where those per year, when it comes to Q3 or whatever, so it's normalized. So just rest assured, um, Q3 and Q4 will be normalized, both from a marketing but also from an operating and over at point of view, whatever the d2c growth will be. And to the question earlier, if you to see will be better, we will make sure that it drops to the bottom line and will be reflecting the guidance and so that's where we are.

Very good. Thank you.

Yeah. Thanks very much Warwick. Thanks very much, also Moira and uh thanks so much to Bern and harm, and of course, thanks to all of you for participating in our call today.

Bjørn Gulden: I think especially online, we look extremely fresh, and we do see the heat, especially with her all over the world, although some of the products vary from region to region. When your brand is hot, your apparel is hot, and your footwear is hot, you automatically then sell more accessories, and this is also what happened with us. Also, in addition to soccer balls, which of course has been growing because of World Cup, but we have fixed most of the sourcing issues we have, and therefore you saw a 20% growth in accessories. With that kind of background, I hand back to you, Harm, where you can take them through more of the financials.

Bjørn Gulden: I think especially online, we look extremely fresh, and we do see the heat, especially with her all over the world, although some of the products vary from region to region. When your brand is hot, your apparel is hot, and your footwear is hot, you automatically then sell more accessories, and this is also what happened with us. Also, in addition to soccer balls, which of course has been growing because of World Cup, but we have fixed most of the sourcing issues we have, and therefore you saw a 20% growth in accessories. With that kind of background, I hand back to you, Harm, where you can take them through more of the financials.

As always, if you have any follow-up questions, and I have the feeling that there may still be some, please feel free to reach out anytime to agent Phillip Kiara or myself or any other member of the team. We very much look forward to speaking to you, and before we wrap up, I just want to, you know, send out a quick reminder, that we look forward to hopefully welcoming many of you here to our home of innovation event on September.

Harm Ohlmeyer: Thank you, Björn. Of course, we are looking forward to get some more details on the financials. I want to start, as always, with the top line. As Björn already said, 40% currency neutral growth has been not just a record quarter from a top-line point of view, but also has been a record H1. In addition to that, we also had the highest retail sales ever in a quarter. All of these are credit to the teams that created the product and executed on the sales side. Very pleased with the top line. When it comes to the gross profit, I would like to go a little deeper on this one and have a little bridge. I want to go on the right-hand side, starting from the bottom to the top.

Harm Ohlmeyer: Thank you, Björn. Of course, we are looking forward to get some more details on the financials. I want to start, as always, with the top line. As Björn already said, 40% currency neutral growth has been not just a record quarter from a top-line point of view, but also has been a record H1. In addition to that, we also had the highest retail sales ever in a quarter. All of these are credit to the teams that created the product and executed on the sales side. Very pleased with the top line. When it comes to the gross profit, I would like to go a little deeper on this one and have a little bridge. I want to go on the right-hand side, starting from the bottom to the top.

Um a few more days and we would be very happy to be able to welcome you here on our beautiful 3 Stripes campus in the fall. And with that thank you very much again for joining us today. We wish you a wonderful summer great rest of the day and look forward to catching up with you. Bye bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your line. Goodbye.

Harm Ohlmeyer: Of course, we had US tariffs already last year in Q2, but this year, a little bit higher, giving the full impact of it. There is some mixed effect on the sourcing cost, a little bit on freight, and I am just really saying a little bit on freight because it links to the war surcharge that we get into the Middle East. When it comes to FX, it is actually neutral. You might be surprised, but there is benefits on the US dollar as we hedged on this one. But there are also other currencies like the Korean won, the Japanese yen, Argentinian peso, Turkish lira, whatsoever, and these countries are meanwhile pretty significant. It is eating up the benefits on the dollar, it is fairly neutral. We had a small amount of US tariff refund. I know there are different phases.

Harm Ohlmeyer: Of course, we had US tariffs already last year in Q2, but this year, a little bit higher, giving the full impact of it. There is some mixed effect on the sourcing cost, a little bit on freight, and I am just really saying a little bit on freight because it links to the war surcharge that we get into the Middle East. When it comes to FX, it is actually neutral. You might be surprised, but there is benefits on the US dollar as we hedged on this one. But there are also other currencies like the Korean won, the Japanese yen, Argentinian peso, Turkish lira, whatsoever, and these countries are meanwhile pretty significant. It is eating up the benefits on the dollar, it is fairly neutral. We had a small amount of US tariff refund. I know there are different phases.

Harm Ohlmeyer: We have only recognized the first phase, where we’ve already had some cash returned. It has been a small amount, and we will talk later about the remaining phases, which you saw in the notes already. There is probably something in H2 that we haven’t recognized in Q2—in the amount of $250 million to $300 million—that we would still expect to come to us at some stage. The biggest piece that is actually moving the gross margin in Q2 was very disciplined pricing, very disciplined on promotions. Of course, when you’re growing 27% in e-commerce and 23% in retail, it has a positive channel mix as well. The above two are actually the moving parts of the 51.7 to 52.5. Very well done and very happy with the D2C growth that we are seeing.

Harm Ohlmeyer: We only have recognized the first phase, where we got some cash returned already. It has been a small amount, and we will talk later about the remaining phases that you saw it in the notes already. There is probably something in H2 that we haven't recognized in Q2 in the amount of $250 to 300 million that we still would expect to come towards us at some stage. The biggest piece that is actually moving the gross margin in Q2 was very disciplined pricing, very disciplined on promotions. Of course, when you're growing 27% in e-commerce and 23% in retail, it has a positive channel mix as well. The upper two are actually the moving part of the 51.7 to 52.5. Very well done and very happy with the D2C growth that we are seeing.

Harm Ohlmeyer: Of course, what you're interested in is the increase in the marketing and POS expenses and the operating overheads. With the 30% growth in marketing and the 12% operating overheads, I want to immediately go a little deeper. Even so, we have some leverage on the operating overheads overall. I want to explain that step by step, starting with the marketing. Of course, in marketing, we always said we want to make the World Cup, not just winning it commercially, which we no doubt did with the teams that we had and the two teams in the final. We also wanted to make sure that we use that platform to win as a brand. That's why we invested significantly, more than EUR 200 million. The exact amount is actually EUR 212 million, as Björn said.

Harm Ohlmeyer: Of course, what you're interested in is the increase in the marketing and POS expenses and the operating overheads. With the 30% growth in marketing and the 12% operating overheads, I want to immediately go a little deeper. Even so, we have some leverage on the operating overheads overall. I want to explain that step by step, starting with the marketing. Of course, in marketing, we always said we want to make the World Cup, not just winning it commercially, which we no doubt did with the teams that we had and the two teams in the final. We also wanted to make sure that we use that platform to win as a brand. That's why we invested significantly, more than EUR 200 million. The exact amount is actually EUR 212 million, as Björn said.

Harm Ohlmeyer: Yes, we indicated around EUR 150 million earlier we're going to invest, but it has been so successful. There are two teams in the final having the ball, having sellout records in North America and Latin America. We decided then, short term, to invest even more to pace the opportunity for the future. Secondly, yes, with growth in e-commerce of 27% and growth in retail 23%, there is a lot of variable cost in D2C, especially in e-commerce. There are platform fees, there is freight cost to the consumer, there are customer service fees. When you're growing that much, you might even pay a little bit more on customer service. This is what we see in e-commerce. There is a lot of variable fees. Of course, in retail, we leverage much more. We also build up some pop-up stores. We also had extra staffing in the DCs.

Harm Ohlmeyer: Yes, we indicated around EUR 150 million earlier we're going to invest, but it has been so successful. There are two teams in the final having the ball, having sellout records in North America and Latin America. We decided then, short term, to invest even more to pace the opportunity for the future. Secondly, yes, with growth in e-commerce of 27% and growth in retail 23%, there is a lot of variable cost in D2C, especially in e-commerce. There are platform fees, there is freight cost to the consumer, there are customer service fees. When you're growing that much, you might even pay a little bit more on customer service. This is what we see in e-commerce. There is a lot of variable fees. Of course, in retail, we leverage much more. We also build up some pop-up stores. We also had extra staffing in the DCs.

Harm Ohlmeyer: We had a lot of things that we did in order to fulfill the needs of the consumers and kept investing into this one. Rest assured, maybe I could have said that earlier, but very clearly, in H2 you will see a normalized marketing spend. On the full year, you should calculate in your spreadsheets around the 12%. You will see a much lower growth in Q3 and Q4 on the operating overheads. It was really related to the D2C growth in Q2. Again, I take it on me that I could have probably explained that earlier. That's definitely a learning on my side. When we go further down the P&L, I talked about the operating profit already—still an 8.5% operating profit with the €574 million, 5% up.

Harm Ohlmeyer: We had a lot of things that we did in order to fulfill the needs of the consumers and kept investing into this one. Rest assured, maybe could have said that earlier, but very clearly in H2, you will see a normalized marketing spend. On the full year, you should calculate in your spreadsheets around the 12%, you will see a much lower growth in Q3 and Q4 on the operating overheads. It was really related to the D2C growth in Q2. Again, I take it on me that I could have probably explained that earlier. That's definitely a learning on my side. When we go further down the P&L, I talked about the operating profit already. Still an 8.5% operating profit with the EUR 574 million, 5% up.

Harm Ohlmeyer: It's primarily as the gross margin is compensated for the operating overhead increase in D2C is primarily attributed to the marketing, where we have been opportunistic to spend and potentially overspend on the event. When we go further down the line, no surprises on the financial expenses on the income taxes. Income tax around 25%, similar to Q1, which leads to a net income growth that is similar to the operating profit growth. Operating profit 5%, net income 6%. So far to the P&L, very happy where we are, very happy with what we've achieved in Q2, but also in H1. Leads to the balance sheet, and I want to start with inventories again. Currency neutral up 12%, I want to immediately go into the details of that.

Harm Ohlmeyer: It's primarily as the gross margin is compensated for the operating overhead increase in D2C is primarily attributed to the marketing, where we have been opportunistic to spend and potentially overspend on the event. When we go further down the line, no surprises on the financial expenses on the income taxes. Income tax around 25%, similar to Q1, which leads to a net income growth that is similar to the operating profit growth. Operating profit 5%, net income 6%. So far to the P&L, very happy where we are, very happy with what we've achieved in Q2, but also in H1. Leads to the balance sheet, and I want to start with inventories again. Currency neutral up 12%, I want to immediately go into the details of that.

Harm Ohlmeyer: I said on the last call we will be around the same as end of Q1. We came in a little higher. Some of that is linked to the Middle East, where we are not selling through as much as we would have wished. Count it a double-digit amount there. Of course, some FX plays into the absolute amount as well. The most important point for me is that the composition of that inventory and 90% of that inventory is current or future seasons or goods in transit as we have it on the board, and only 9% is previous seasons. That is not even enough to clear in our factory outlets. Our planned buy for the factory outlets globally is north of 50%. It gives you an indication the inventory is very healthy and I have no concerns for H2.

Harm Ohlmeyer: I said on the last call we will be around the same as end of Q1. We came in a little higher. Some of that is linked to the Middle East, where we are not selling through as much as we would have wished. Count it a double-digit amount there. Of course, some FX plays into the absolute amount as well. The most important point for me is that the composition of that inventory and 90% of that inventory is current or future seasons or goods in transit as we have it on the board, and only 9% is previous seasons. That is not even enough to clear in our factory outlets. Our planned buy for the factory outlets globally is north of 50%. It gives you an indication the inventory is very healthy and I have no concerns for H2.

Harm Ohlmeyer: Secondly, it comes to the accounts receivables. They are slightly up with 30%, a little bit higher than what you have seen on the wholesale growth. There's some timing effects in there. We of course work with some of our partners as well to make sure we support them in the right way during the World Cup. That is also something that you will see coming down Q3 as we're collecting post-World Cup. Payments have normalized operating working capital is slightly up compared to inventories and accounts receivables who combine these two. Talking about operating working capital, that direction doesn't look good, as you know, we invested into holding the inventory and receivables for the World Cup. It was the right decision to win this one commercially.

Harm Ohlmeyer: Secondly, it comes to the accounts receivables. They are slightly up with 30%, a little bit higher than what you have seen on the wholesale growth. There's some timing effects in there. We of course work with some of our partners as well to make sure we support them in the right way during the World Cup. That is also something that you will see coming down Q3 as we're collecting post-World Cup. Payments have normalized operating working capital is slightly up compared to inventories and accounts receivables who combine these two. Talking about operating working capital, that direction doesn't look good, as you know, we invested into holding the inventory and receivables for the World Cup. It was the right decision to win this one commercially.

Harm Ohlmeyer: Our guidance is 22% to 23%, there's no reason to not believe that we get to that guidance until the end of the year. You can hold me personally accountable for it that we get to that guidance of 22% to 23%. Also that is going the right direction. To sum it all up, you see it also on the cash and cash equivalents. Despite doing a share buyback of EUR 500 million the first tranche and then already EUR 250 million on the second tranche and paying a dividend of EUR 500 million. We added to our cash and we are almost at EUR 1.2 billion. That is something where we made tremendous improvement in H1 compared to last year, there's more to come. I'm very optimistic from a cash flow generation point of view.

Harm Ohlmeyer: Our guidance is 22% to 23%, there's no reason to not believe that we get to that guidance until the end of the year. You can hold me personally accountable for it that we get to that guidance of 22% to 23%. Also that is going the right direction. To sum it all up, you see it also on the cash and cash equivalents. Despite doing a share buyback of EUR 500 million the first tranche and then already EUR 250 million on the second tranche and paying a dividend of EUR 500 million. We added to our cash and we are almost at EUR 1.2 billion. That is something where we made tremendous improvement in H1 compared to last year, there's more to come. I'm very optimistic from a cash flow generation point of view.

Harm Ohlmeyer: There is another EUR 1.2 to 1.3 billion cash flow coming in H2 and will help us to finish on a very strong cash balance for the end of the year. Talking about a share buyback and the dividends. EUR 500 million has been done at the first tranche. We already did EUR 250 million, around EUR 250 million in the second tranche. There are 1,380,000 shares being bought back. Together with the dividend, we will return to shareholders around EUR 1.5 billion this year. You all know we could not have done that without being in such a healthy situation as a company. Very happy where we are. You also see that with the cash and cash equivalents, how it is developing despite the share buyback and also in the deficit net borrowings. We are finally going the right direction again, moving from EUR 5.5 to 5.2 billion.

Harm Ohlmeyer: There is another EUR 1.2 to 1.3 billion cash flow coming in H2 and will help us to finish on a very strong cash balance for the end of the year. Talking about a share buyback and the dividends. EUR 500 million has been done at the first tranche. We already did EUR 250 million, around EUR 250 million in the second tranche. There are 1,380,000 shares being bought back. Together with the dividend, we will return to shareholders around EUR 1.5 billion this year. You all know we could not have done that without being in such a healthy situation as a company. Very happy where we are. You also see that with the cash and cash equivalents, how it is developing despite the share buyback and also in the deficit net borrowings. We are finally going the right direction again, moving from EUR 5.5 to 5.2 billion.

Harm Ohlmeyer: What is important for our S&P and Moody's, that also leverage ratio is consistently remaining below our policy of 2.0. We are actually improving from 1.7 to 1.6. Also there, we are very diligent on how we are using our cash and how we return to shareholders, and we are feeling very good about H2. With that, talking about H2, back to Björn.

Harm Ohlmeyer: What is important for our S&P and Moody's, that also leverage ratio is consistently remaining below our policy of 2.0. We are actually improving from 1.7 to 1.6. Also there, we are very diligent on how we are using our cash and how we return to shareholders, and we are feeling very good about H2. With that, talking about H2, back to Björn.

Bjørn Gulden: Thanks, Harm. You have seen this slide many times. When we started three and a half years ago, we had some issues, and we said that we needed that time to go through the process, and that in 2026 we will then be a healthy and a successful company. We can always do better, but we felt that we have delivered what we told you, and feel that the platform for this company is actually in great shape. The ambition, again, for each market should be the number one in the market. Of course, they will not all achieve it, but at least we are having a discussion what is necessary in the different markets. It should be a surprise that outside of the US, we are starting to actually be number one in many markets.

Bjørn Gulden: Thanks, Harm. You have seen this slide many times. When we started three and a half years ago, we had some issues, and we said that we needed that time to go through the process, and that in 2026 we will then be a healthy and a successful company. We can always do better, but we felt that we have delivered what we told you, and feel that the platform for this company is actually in great shape. The ambition, again, for each market should be the number one in the market. Of course, they will not all achieve it, but at least we are having a discussion what is necessary in the different markets. It should be a surprise that outside of the US, we are starting to actually be number one in many markets.

Bjørn Gulden: In the US, I have said many times it would be unrealistic knowing how far behind we are, and that we have many years that we need to invest to kind of be competitive with the leader. We still believe that we have plans, investments, and resources then to double our business. I think you saw growing 15%, 70%, we are on the way also to get closer to that. The business model that we talk about, you have seen many times, too, to be a global brand with a local mindset. I hope you agree that you have to start with the consumer and the athlete. To do that, you need to be close to him and her, and that happens in most markets and regions. Then you need a strong global headquarter that facilitates for innovation, concept systems, and the frame.

Bjørn Gulden: In the US, I have said many times it would be unrealistic knowing how far behind we are, and that we have many years that we need to invest to kind of be competitive with the leader. We still believe that we have plans, investments, and resources then to double our business. I think you saw growing 15%, 70%, we are on the way also to get closer to that. The business model that we talk about, you have seen many times, too, to be a global brand with a local mindset. I hope you agree that you have to start with the consumer and the athlete. To do that, you need to be close to him and her, and that happens in most markets and regions. Then you need a strong global headquarter that facilitates for innovation, concept systems, and the frame.

Bjørn Gulden: That we then need a network of people, both local and global, that work together. It's fair to say that we now have a leadership group globally of 32 people. We also spent two days after the World Cup in New York. I feel very strongly about the team and feel that we have made many changes. Most of the people, if not almost all, are internal promotions. They know adidas, they have the right culture, which adidas should stand for. I feel we are a really good team. It should also not be a surprise that, locally, we then need a footprint in product and activations that fit the market. When you see on the left side, we added Penn State and Tennessee colleges, universities to be more visible in American sports.

Bjørn Gulden: That we then need a network of people, both local and global, that work together. It's fair to say that we now have a leadership group globally of 32 people. We spent also two days after World Cup in New York. I feel very strong about the team, feel that we have made many changes. Most of the people, if not almost all, are internal promotions. They know adidas, they have the right culture, which adidas should stand for, I feel we are a really good team. It should also not be a surprise that then we locally need a footprint in product and activations that fits the market. When you see on the left side, we added the Penn State and Tennessee colleges, universities to be more visible in American sports.

Bjørn Gulden: That's a journey that we probably should have done a long time ago, but that we have started, John and his team are very aggressive that side. That is the way then to be a real American sports brand. The same goes for other markets. Here you see Korea when it gets to baseball. You see Ranveer Singh, who's a cricket player that we then in India are using also in our Originals and lifestyle collection. In China, which is on fire, we even have a premium looks collection above everything, because we clearly see that the consumer with a lot of money is also trending towards our brand because of what the local team is doing with our global concepts. The same go for stores. The rule is to activate what is relevant for the consumer.

Bjørn Gulden: That's a journey that we probably should have done a long time ago, but that we have started, John and his team are very aggressive that side. That is the way then to be a real American sports brand. The same goes for other markets. Here you see Korea when it gets to baseball. You see Ranveer Singh, who's a cricket player that we then in India are using also in our Originals and lifestyle collection. In China, which is on fire, we even have a premium looks collection above everything, because we clearly see that the consumer with a lot of money is also trending towards our brand because of what the local team is doing with our global concepts. The same go for stores. The rule is to activate what is relevant for the consumer.

Bjørn Gulden: That's why at any point in time around the world, there might be different activation. Should not be a surprise for you that Barcelona right now is still celebrating the World Cup and the win of Spain, while in other areas, we have turned into lifestyle or local partners. Again, there's a lot more energy in the teams when they can do what they think is relevant. The same goes for, I would say, normal activations. Why activate something in a market that is not relevant? I think

Bjørn Gulden: That's why at any point in time around the world, there might be different activation. Should not be a surprise for you that Barcelona right now is still celebrating the World Cup and the win of Spain, while in other areas, we have turned into lifestyle or local partners. Again, there's a lot more energy in the teams when they can do what they think is relevant. The same goes for, I would say, normal activations. Why activate something in a market that is not relevant? I think