adidas AG Annual Shareholders Meeting

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adidas AG Annual Shareholders Meeting
May 11, 2017 / 08:30AM GMT 

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Corporate Participants
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   *  Igor Landau
      Adidas AG - Chairman of the Supervisory Board
   *  Kasper Bo Rorsted
      Adidas AG - CEO and Member of Management Board

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Presentation
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 Igor Landau,  Adidas AG - Chairman of the Supervisory Board   [1]
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 Well, I think we can begin. Ladies and gentlemen, in my capacity as Chairman of the Supervisory Board, it is my great pleasure to open our 2017 Annual General Meeting. On behalf of the Supervisory Board and the Executive Board, I would like to give a cordial welcome to all shareholders and shareholder representatives, to the members of the press and our guests. I would also like to welcome the shareholders following the Annual General Meeting via the Internet.

 Welcome also to the notaries, Ms. Birgit Stoll from Fürth; and Mr. Stefan Weinman from Nuremberg. Ms. Stoll has been asked to take the minutes of today's Annual General Meeting.

 I also welcome, Mr. Karl Braun, Haiko Schmidt, Hannes Engelmann and (inaudible) of KPMG, Berlin, who audited the accounts for the 2016 financial year.

 I would like to take this opportunity to introduce you to the members of the Executive Board, who are all present and to state their responsibilities. Mr. Kasper Rorsted, Chief Executive Officer; Mr. Roland Auschel, in charge of global sales; Mr. Glenn Bennett, in charge of global operations; Mr. Eric Liedtke, in charge of global brands; and Mr. Robin Stalker, Chief Financial Officer and Labor Director; as well as Harm Ohlmeyer, member of the executive board.

 As you can see, compared to last year, there has been a change in the composition of the executive board. I would, therefore, like to introduce the new members to you. Beginning, of course, with our new Chief Executive Officer, Kasper Rorsted. Kasper joined the company as an executive board member on August 1, 2016. On October 1, 2016, he succeeded Herbert Hainer as Chief Executive Officer of adidas AG. We have prepared this change for a long time, and in a professional manner so as to ensure a smooth transition at the helm of the company. And we believe that our efforts have been successful.

 Before joining adidas, Kasper Rorsted, who hails from Denmark, was the CEO of Henkel for 8 extremely successful years. Henkel is a Dutch company, and just like adidas, is known for being an international player with good growth rates and a strong commitment to sustainability. Kasper previously held positions at well-known companies such as Oracle, Compaq and Hewlett-Packard, where he gained extensive management experience. We are convinced that Kasper and the adidas top management team will continue to drive the company's dynamic growth strategy and will lead adidas to new levels of success. So welcome, Kasper, although it's been a few months.

 Another new member of the executive board is Harm Ohlmeyer. He was already appointed to the executive board in March 2016. Harm will succeed our long-standing Chief Financial Officer, Robin J. Stalker, who is going to resign from the executive board today, at the end of this Annual General Meeting. I would like to take this opportunity to thank Robin for his extremely successful work. The success story of adidas is closely linked with Robin's work. During his term of office as an executive board member and CFO from 2001 to 2017, adidas' sales increased more than threefold and profits, more than fivefold. In this period, the company's value increased from EUR 3 billion to more than EUR 38 billion. Well, I knew that he would enjoy the news about the stock price, in particular.

 Now these are outstanding achievements for which I would like to express my sincere thanks to you, dear Robin. On behalf of the supervisory board, all adidas employees and I think also on behalf of our shareholders.

 I'm sure not many chief financial officers can look back on such excellent results. We respect your decision not to extend your contract, which is due to expire in March 2018 after more than 16 years as the company's CFO. And now we would like to wish you all the best for the future.

 Robin's successor, Harm Ohlmeyer, joined the company in 1998. In the past few years, Harm has been instrumental in the company's digital transformation. In fact, since 2011, Harm and his team have increased adidas' e-commerce sales from EUR 50 million to EUR 1 billion, and that's not the end. Previously, Harm Ohlmeyer had held a number of positions in the company's finance organization, for example, as Senior Vice President, Finance of the adidas brand; and Senior Vice President, Finance of TaylorMade-adidas Golf in Carlsbad, California. As CFO and Labor Director, Harm will contribute this knowledge and his expertise in finance to the executive board in order to continue driving the company's dynamic and profitable growth.

 Another change concerns our long-standing executive board member, Glenn Bennett, who will resign from the executive board in the summer. He will be succeeded by Gil Steyaert, who is currently the Managing Director of our Western Europe region. Gil Steyaert will belong to the executive board as of tomorrow. Glenn has been a member of the executive board of adidas AG for 20 years. He decided to relinquish his executive board mandate which is due to expire in March 2018 for personal reasons. Although he will still be working for us for another few months, I would like to take this opportunity to congratulate Glenn on his outstanding career and to thank him for his excellent work. During his term of office, adidas has truly developed into a global player with production and logistics growing accordingly. At the same time, Glenn and his team turned adidas into a company with an exemplary record on sustainability issues. Glenn, for these outstanding achievements, we would like to express our sincere gratitude on behalf of all employees and shareholders.

 Glenn's successor, Gil Steyaert, joined the company in 1999. We was born in Belgium and has French citizenship. Gil started as a Managing Director in France, and then became a Managing Director in the U.K. Since 2013, he has successfully managed our largest market, Western Europe. Under his leadership, our Western European business grew by 50% to EUR 5.3 billion. He successfully harmonized and simplified our processes in Europe. He will bring this knowledge and his in-depth market expertise to his new role as the executive board member responsible for global operations.

 Finally, I would like to welcome Karen Parkin to the executive board of adidas AG. At yesterday's supervisory board meeting, she was appointed to the executive board of adidas AG with effect from tomorrow. Karen has been the company's head of HR since November 2014. We are pleased that such an important area as human resources is once again represented at the separate executive board function at the executive board level.

 Committed and motivated employees are the basis for the success of this company. Creating the right corporate culture and supporting our employees is therefore, a key element of the long-term business strategy, Creating the New.

 Karen Parkin and her team made important contributions to the development of this strategy. Karen, who has a British and an American passport, has been with adidas for 20 years, and has worked at several locations in England, the U.S.A. and at headquarters in Herzogenaurach. We are convinced that in her new role as executive board member, Karen will ensure that adidas will remain one of the most attractive employers in the world. I would like to congratulate Karen, Gil and Harm most warmly on their appointments. The supervisory board is looking forward to a successful collaboration.

 I would also like to emphasize that we are very pleased that we have been able to fill these 3 executive positions with excellent internal candidates. Moreover, we have fulfilled our goal to appoint a woman to the executive board of adidas by June 30, 2017. From our perspective, the generation change on the executive board has been affected with the changes outlined. This international and experienced team will now focus on further implementing the company's strategy in a consistent, disciplined and successful manner.

 In addition to the changes on the executive board in the past financial year, there have also been some personnel changes on the supervisory board. On May 12, 2016, 1 year ago, in accordance with the proposal of the executive board and the supervisory board, the annual general meeting resolved to increase the number of supervisory board members from 12 to 16. The additional shareholder representatives on the supervisory board, Mr. Ian Gallienne and Mr. Nassef Sawiris were elected by the Annual General Meeting on May 12, 2016. The additional employee representatives, at the request of the Central Works Council of adidas AG, Ms. Roswitha Hermann and Mr. Michael Storl were appointed by the relevant court with effect from June 24, 2016. Their terms of office ended with the announcement of the election results of the employees by election on October 6, 2016. In this by-election, Mr. Udo Müller and Mr. Kurt Wittmann were elected as employee representatives. And I believe that these 2 gentlemen are with us here on stage today. The supervisory board is also present today in its entirety.

 Ladies and gentlemen, due to the international composition of the management, it cannot be ruled out that some of the questions will be answered in English, and that there will also be statements in English. Thus, all statements will be interpreted simultaneously into German by Swan Interpreters, and transmitted via headphones. Instructions on how to use the headphones were provided on the projection screen and in the information for shareholders and proxy's leaflet even before the beginning of this Annual General Meeting.

 Just to remind you, you will find German on channel 1 and English on channel 2. Headphones and receivers are available at the entrance to the meeting hall.

 Ladies and gentlemen, to ensure that today's Annual General Meeting can be held within a reasonable and appropriate time frame and to facilitate the smooth running of this meeting, we will restrict ourselves to announcing only the most essential regulations and organizational remarks. All the important information you might need about this meeting can be found in the information for shareholders and proxy's leaflet you received at the registration desk.

 Can I ask you to please take note of this information, especially, the sections concerning the attendance list, the voting procedure, early departure from the meeting and the granting of powers of representation. Copies of this leaflets are available from the information counter in the upper fourier. However, I would point out that in any case of doubt, my remarks will always take precedence over the information contained in the leaflet.

 Before we proceed to the business of the meeting, I state for the record that this Annual General Meeting has been duly convened in accordance with the law and the company's Articles of Association by publication in the German Federal Gazette on March 21, 2016 -- '17, sorry, and that all the other documents pertaining to the convocation of this meeting were duly published, for instance, on the company's website. The invitation containing the agenda and the resolutions proposed by the executive board and the supervisory board, or the supervisory board only were sent to all shareholders and published on the company's website.

 The company did not receive any requests to amend the agenda pursuant to section 122, paragraph 2 of the German Stock Corporation Act (aktiengesetz). It did not receive any countermotions from shareholders to be made available in accordance with section 126, paragraph 1, German Stock Corporation Act, nor did it receive any nominations by shareholders with regard to the election of the auditor in accordance with section 127 of the German Stock Corporation Act.

 The invitation to this year's Annual General Meeting as well as all other disclosable documents are available at the information counter in the upper fourier. In particular, I would like to draw your attention to the revised resolution proposal of the executive board and supervisory board on the appropriation of retained earnings, to which I will come back later. As announced in the invitation, the company did in fact have to adjust the overall dividend payout because after the resolution on the appropriation of retained earnings have been published, treasury shares of the company were used as consideration for conversions of the company's convertible bond, issued on March 21, 2012. As long as they were held by the company, these treasury shares did not carry any dividend rights. However, following the conversion, these shares have become entitled to dividend payments. Notwithstanding this, the payment of EUR 2 per share, as announced in the resolution proposal, remains unchanged. All pertinent information has also been available on the company's website since the 21st of March, 2017, the day when this AGM was convened, and it will be available until the end of this meeting. The revised resolution proposal on the appropriation of retained earnings has been available on the company's website since May 2, 2017, and is also available at the information counter in the upper fourier today.

 You also got a copy at the registration counter, along with your voting card block. Most of these documents are also available in English.

 The attendance list is currently being prepared. I will announce the attendance count as soon as the attendance list has been finalist -- finalized, and no later than before the first vote. A copy of the attendance list will be available for inspection at the speaker's desk. The same applies to any updates to the attendance list.

 Following the report of the executive board, we will have a discussion on all agenda items in the course of a so-called general debate. Since it is in everyone's interest that this AGM is conducted swiftly, I would ask those shareholders and shareholder representatives who would like to take the floor to summarize their statements and questions on all agenda items in one contribution, and to speak exclusively from the rostrum here in the meeting hall.

 For persons in wheelchairs, a handheld microphone is available at the speaker's desk.

 In the interest of all participants, remarks and shouts from the hall will be disregarded. If you wish to take the floor, please present your voting card block to our staff at the speaker's desk, tell them your name and complete a speaker's registration form.

 You'll find the speaker's desk at the front of the hall, to the right of the podium as seen from your seat, right here. Requests to speak can be submitted as of now.

 For good order's sake, I would point out that we are neither recording nor keeping shorthand records of the statements made by shareholders or shareholder representatives. Questions will only be recorded in so far as this is required for answering those questions. As a matter of principle, attendees are not allowed to make video or audio recordings or to take pictures during the Annual General Meeting. Only selected press photographers and television crews are permitted to make video and audio recordings of Mr. Rorsted during his speech. They have been asked to respect our shareholders' personality rights and will leave the meeting hall after Mr. Rorsted's speech. The entire Annual General Meeting, including the general debate, will be webcast live on the Internet, subject to technical availability of the website.

 At this point, I would ask all those carrying a mobile phone to please turn it off while in the meeting hall. Thank you. The attendance area, also referred to as the area of presence, comprises those parts of the (inaudible) that are generally accessible to shareholders once they have passed the registration desk. May I remind you that, unfortunately, smoking is not permitted in the entire building and in the reception tent. Should you wish to leave the AGM before the end, please contact our staff at the exit counter, who will also be happy to assist you in granting any powers of representation. So much for the formalities and my organizational remarks.

 Now ladies and gentlemen, I turn to the agenda for today's meeting. Item 1 is the presentation of the adopted annual financial statements of adidas AG and of the approved consolidated financial statements as of December 31, 2016, of the combined management report of adidas AG and of the adidas Group. The explanatory report of the executive board on the disclosures pursuant to section 289, paragraph 4; section 315, paragraph 4, German Commercial Code as well as of the supervisory board report for the 2016 financial year.

 Ladies and gentlemen, I would now like to pass the floor to Kasper Rorsted. Kasper?

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 Kasper Bo Rorsted,  Adidas AG - CEO and Member of Management Board   [2]
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 Shareholders, ladies and gentlemen, on behalf of my colleagues on the executive board and the employees of adidas, I would like to welcome you all to our 2017 Annual General Meeting at the City Hall in Fürth. I also like to extend a very warm welcome to everyone following this AGM digitally via our webcast.

 I'm delighted to be able to report to you today on a financial year for the first time as the CEO of adidas AG. But before I begin, I'd like to emphasize one point. Most of the figures I am presenting to you today are based on the work of my predecessor, Herbert Hainer, and his management team. I only took up office as Chief Executive Officer on October 1, 2016. Therefore, I wish to thank Herbert Hainer. He handed over a company that is in very good shape.

 Next I wish to join Igor Landau in paying tribute to Robin Stalker, our long-standing CFO; and Glenn Bennett, our long-standing Head of Global Operations. Robin, Glenn, on behalf of the entire company, I'd like to thank you for your outstanding achievements. You have made a significant contribution to the success of adidas, and you can be proud of what you have achieved. Thank you so much.

 At the same time, I'd like to welcome my new colleagues, Karen, Gil and Harm, to the executive board. All 3 of them have worked successfully for the company in various functions, both in and outside Germany for many years. The board team now has the perfect set up, an experienced international and diverse team. I'm looking forward to good and successful cooperation.

 Please allow me now to outline the development of the company with a focus on 3 main topics. These topics are: first, the results of the adidas group in 2016; second, the further development of our long-term strategy, Creating the New, and the related financial targets up to year-end 2020; and third, our outlook for the current year 2017.

 adidas, ladies and gentlemen, is more than just numbers. Our strategy, Creating the New, is based on a fundamental belief, and that is through sport, we have the power to change lives. And we do this every day. We empower people to live an active life. We teach life skills through sport. We create sustainable products. But see for yourselves.

 (presentation)

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 Kasper Bo Rorsted,  Adidas AG - CEO and Member of Management Board   [3]
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 All athletes set themselves goals. We, too, have a clear goal: we want to be the best sports company in the world. To achieve this goal, we design, build and sell the best sports and fitness products in a sustainable way. In connection with these products, we offer our consumers the best service and the best experience. Ultimately, however, it won't be us who decides whether we are the best. It will be our consumers, athletes, teams, business partners, the media, and last but not least, you, our shareholders. You will decide. If they all say that we are the best, we will have achieved our goal.

 Last year, we came closer to achieving our mission. All in all, 2016 was an exciting sports year. The European Football Championship in France, the Copa América and the Olympic Games in Rio placed sport center-stage worldwide. adidas used all 3 events to further increase the awareness and popularity of the brand. Major sport events provide impetus to the business. They highlight the fact that the sporting goods industry is, in fact, an attractive growth industry.

 2016 was also marked the first full year in which we executed our long-term corporate strategy, Creating the New. We presented Creating the New to you in the spring of 2015. Our results prove that our strategy is paying off.

 The focus of Creating the New is to significantly increase the desirability of our brands. Because only with desirable brands can we grow sales and improve profitability on a sustainable basis. Creating the New is based on 3 strategic pillars: speed, cities and open source. We've made considerable progress in all 3 areas. Take speed, for example. The fastest athlete will be the winner. That's true for almost every type of sport, and the same is true for our industry. adidas, therefore, intends to become the first true fast sports company. We want to be in a position to always offer our consumers exactly the products they want to buy, whenever, wherever and however they want.

 We achieved key milestones on the road to this goal in 2016. The first pilot the SPEEDFACTORY, for instance, was opened in Ansbach, Germany. SPEEDFACTORY is a future-oriented project. Here, by means of smart manufacturing, we can produce individualized sports footwear fast. We will become faster by making our entire production and logistics more agile. Essentially, there are 3 speed programs that will help us achieve higher speed: first, we identify products upfront for which we anticipate high sales volumes; second, we manufacture products in-season, when we see that demand is high; and third, we define ranges that are never out of stock.

 Altogether, in 2016, we were able to generate around 15% of total sales with products manufactured on these Speed programs. This speed has a double positive impact. We increased consumer -- customer satisfaction because our consumers get the product they are looking for right away. And we improved the company's profitability, because we'll normally be able to sell these products without granting any discounts.

 Next, cities. Megacities account for 80% of global consumption. In addition, these cities influence trends globally. What's trendy in New York today, will be popular all over the world tomorrow. Therefore, we are focusing our sales and marketing activities on the world's major metropolitan areas, New York, Los Angeles, London, Paris, Shanghai and Tokyo. In 2016, we achieved an increase in desirability, revenues and market share of the adidas brand in all of these cities.

 And last but not least, Open Source. By Open Source, we mean open collaboration between adidas and partners from industry, sport and entertainment. This includes, for example, our partnership with chemical company BASF in the development of the Boost sole technology. Thanks to Boost, adidas succeeded in gaining significant market share in 2016, in particular in the running footwear category. The company's collaboration with Kanye West has also been a commercial success which has generated additional brand heat.

 So as you can see, ladies and gentlemen, the sporting goods industry is interesting and attractive. Thanks to our strategy, Creating the New, we are ideally positioned to grow faster than the total market in this industry.

 We were very successful in this respect in 2016. Not only did we achieve our targets, we overdelivered on them, with sales growing by 18% on a currency-neutral basis. In euros, revenue grew 14% or EUR 2.4 billion to EUR 19.3 billion, that's the highest revenue in the company's history.

 The adidas brand, by far our biggest brand, grew 22% and generated sales of EUR 16.3 billion. That, too, is a new record.

 Our net income grew rapidly, rising 41% to EUR 1.02 billion. That's the first time that adidas has generated more than EUR 1 billion in net income. These are impressive results which are extremely pleasing, but I don't want to present just the sunny side of our financials to you, our shareholders. As in every company, adidas too has areas in which we can and must improve.

 Reebok, for instance, maintained its growth trajectory with an increase of 6%. The bottom line, however, is that Reebok did not deliver a positive profit contribution to our company.

 Our operating margin improved from 6.5% to 7.7%, but it remains significantly below the levels of many of our competitors.

 In the course of my speech, you will hear how we are tackling these 2 issues. Because obviously, we wanted to make Reebok profitable in the long-term and to significantly increase the company's operating margin.

 Overall, however, the company's development in 2016 was very pleasing. This was also reflected in our share price. In 2016, the adidas share was top of the league in the DAX 30 for the second consecutive year with an increase of 67%. In the same period, the DAX 30 rose just 7%. Additionally, the adidas share significantly outperformed the shares of our main competitors. I'm sure you have been following the share price development closely.

 We, the management team, are aware that the share price not only reflects our 2016 results. We know that a considerable portion of expectations for the future is included in our share price. You expect us to continue to deliver strong sales growth and significant profitability improvements in the years ahead, and we intend to deliver.

 I will explain to you how, in more detail, in a moment. The company's growth was driven by the adidas brand, which grew by 22%. And please note that the growth rates I cite here are always on a currency-neutral basis. adidas brand products resonated extremely well with consumers around the world. This is true both in our sports products and of the products we have positioned in the lifestyle area.

 Franchises such as UltraBOOST, NMD and Yeezy took top spots in the rankings for the most desirable sneakers. The Superstar was the best-selling shoe in the United States in 2016. This was the first time in decades that adidas took the top position in this ranking.

 Our sales with sports products grew by 13%. Within the adidas brand, we have assigned a role to each category which it has to fulfill. For football, the role is clear. Football is the world's most popular sport. If we want to be the best sports company, we have to be the #1 in football, and we are.

 In Western Europe, the biggest and the most important market, we were able to regain the top position last year. This was made possible, first and foremost, by our successful X and ACE football boots. In addition, with the new Glitch concept, we created a lot of buzz in social media. Glitch is the first football boot with interchangeable outer skins and inners shoes. We developed this boot in close collaboration with young football players.

 Running offers adidas the greatest growth potential. We intend to double our sales in this category by 2020. In 2016, we achieved strong double-digit growth. This momentum is being driven by the outstanding acceptance of innovative products such as UltraBOOST and AlphaBOUNCE. We will continue to invest in successful product franchises with these technologies for men and women. In addition, we offer our consumers unique experiences in all matters of running. For example, digitally, through the integration of the Runtastic apps.

 Of course, adidas offers products for a wide range of other sports: Tennis, training, swimming, outdoor, handball, volleyball, baseball, rugby, to name just a few. This is important to underline the core of the adidas brand because this core clearly is and will remain sport.

 Our lifestyle offering, adidas Originals, builds on these deep roots in sport. Today's Originals are yesterday's sports shoes. Just think of the Stan Smith tennis shoe. It was developed for the sport of tennis back in 1973. In 2016, it was again one of the most popular lifestyle shoes. This combination of credibility in sport and attractiveness in the lifestyle area gives us a competitive advantage.

 At the same time, based on our history, we can develop completely new, innovative products. Outstanding examples here include NMD, Tubular and EQT.

 Our Originals products met with extremely strong demand last year. Sales soared by 45%. The Reebok brand grew 6% in 2016. One positive aspect of this development is that Reebok grew in almost all regions around the world. It was only in North America that Reebok did not grow. In fact, sales there fell by 1%. In this region, we have to better succeed in convincing consumers of Reebok's positioning. Reebok is focusing wholly on the fitness consumer in sports. Fitness is a growth market with more and more people wanting or needing to stay fit and healthy. Therefore, we still see significant potential for Reebok as a fitness brand. Reebok also profits from its successful history. Reebok Classics products posted double-digit growth rates.

 From a regional perspective, the picture is positive across the board. In 2016, the company's sales grew at double-digit rates in almost all regions, with the sole exception being Russia, where revenues increased at a single-digit rate.

 In Western Europe, demand for adidas and Reebok products remained unbroken. We grew at a double-digit rate in all major markets in the region. After an already good 2015, the adidas brand achieved another 20% increase in 2016. Reebok achieved a similarly high growth rate of 18%. And nevertheless, our margins came under pressure. This was partly due to the appreciation of the U.S. dollar against the euro, which makes our products more expensive in the sourcing process. And a further negative effect was due to the strong depreciation of the British pound against the euro. All in all, however, we are ideally placed and positioned in Western Europe with leading positions in numerous markets, also here in Germany, our home market.

 Our business in North America can be summed up in 2 sentences. We are very pleased with our progress in North America, but not satisfied with our position. North America is our industry's biggest market. It accounts for more than 1/3 of the global sales generated with sports footwear and sports apparel. For us, North America accounts for only just under 1/5 of sales, and that's not enough. Therefore, we need to grow significantly in the U.S. We were successful in this respect in 2016. Sales were up 24% with the adidas brand growing an impressive 30%.

 But despite all the successes, we need to remain realistic. There is still a huge gap in sales between us at #2 and our main competitor, and we are not as profitable. We're therefore, continuing to specifically invest in this market in order to lay the foundations for healthy and sustainable growth.

 Let's turn to Asia. Maybe, like me, you regularly hear in the news that economic growth in China is leveling off. Now I've been traveling to China for many years now, and I am convinced that the economic development in China is stable. China is growing and we are profiting from this. Enthusiasm for sport is increasing from year to year. In addition, the Chinese government is actively promoting sports. With a sales increase of 28% in 2016, Greater China was our region with the highest growth rate. We were able to slightly improve our margin. Our position in China is extremely good. Therefore, I am optimistic as far as the further development in this market is concerned.

 In Latin America, we likewise grew at a double-digit rate again in 2016. This is a remarkable performance considering the fact that several countries in the region are facing major challenges. This is particularly true of the region's largest economy, Brazil. Therefore, we are currently adapting the structure of our business in Brazil. We expect we'll continue to face high volatility of the economies and currencies in Latin America. Therefore, as a company, we need to act flexibly in this market.

 To summarize the development in most important regions and in our largest categories in 2016, we can say, we grew in the key product categories and markets. We gained market share, and our success is built on a very broad and very solid foundation.

 On the basis of our excellent results, we are proposing to this Annual General Meeting a dividend of EUR 2 per share, that's EUR 0.40 or 25% more than for the 2015 financial year. With this proposal, the payout ratio is 39.6%, and that's almost exactly in the middle of our long-term target payout ratio of between 30% and 50%.

 The continuation of our share buyback program also demonstrates just how much confidence we, the management, have in the long-term financial strength of the company. Between November 8, 2016, and January 31, 2017, we conducted the third tranche of our long-term share buyback program. We repurchased shares to a value of EUR 300 million. The average purchase price per share was EUR 140.96.

 As at January 31, 2017, the total number of shares bought back within the framework of our shareholder return program, which was initiated in 2014, amounted to, 11,146,969 shares. This translates into a notional amount of 5.33% of the company's issued share capital.

 In 2016 and up until today, as a result of conversion rights that were exercised, a total of 4,455,001 treasury shares were delivered to holders of adidas AG's convertible bond. adidas AG, therefore, now holds 6,691,968 treasury shares, this represents 3.2% of the company's nominal capital. You will find more information about our share buyback program in the notes to the annual report.

 Ladies and gentlemen, as mentioned earlier, adidas is more than just numbers. This statement is underlined in particular by our sustainability strategy. We are one of the very few companies who have integrated sustainability into their business model. Let me give you 2 examples. First, our Parley products, for which we use ocean plastic waste. The Parley shoe UltraBOOST Uncaged was the best-selling shoe at the opening of our new adidas brand store on New York's Fifth Avenue.

 Second, the use of sustainably produced cotton in our apparel. For 2016, we had set ourselves the goal that 60% of the cotton we use should be sustainably produced. Now we actually achieved 68%. In 2 years time, we want to reach 100%, and I'm sure we'll achieve that goal.

 But sustainable products are only the most visible part of our strategy. We use sustainable methods in all areas of our value chain. And of course, we also assume responsibility for the people who make our products. The best proof of this are the feedback hotlines which workers on site, in the factories, can call anonymously at any time.

 For us, our work in this area is not tactics designed to achieve a competitive advantage. We see our focus on sustainability as an obligation for a global company such as adidas. Therefore, we're pleased that we were again included in the major sustainability indices in 2016, and that we were named industry leader.

 It is not only investors who value our commitment to sustainability. We know from surveys that this is equally the case with our consumers and with our employees. They want to be proud of the company they work for. Our outstanding reputation is, therefore, a major reason why young people worldwide would like to work for adidas.

 In fact, last year, we received 1 million job applications, 44% more than in the previous year. We created 5,000 new jobs worldwide, 800 of them in Germany.

 We are proud of our corporate culture. On the one hand, we promote and also expect creativity, confidence and a collaborative spirit. On the other hand, we offer a working environment characterized by openness and tolerance. We're a global company. Therefore, it is a given for us that we support diversity in all of its aspects. People representing 100 nationalities work at our headquarters in Herzogenaurach alone. That doesn't mean that we cannot improve further still. Our employees further development is, in fact, one of my personal priorities. To me, one of my most important tasks is to ensure we have excellent future leaders.

 Over the past few months, I have met thousands of adidas employees and have found that we have outstanding people at all levels. We need to provide them with better support in the advancement of their careers.

 We intend to generally fill leadership positions with our own talent. The new board appointments show you that we are doing precisely this. Our new board members are leaders who have worked successfully for adidas in various positions for many years.

 As well as personnel development in general, an increase in the number of women in leadership positions is particularly important to me. 50% of the population and 50% of adidas' employees are women. At our top management level, we have 2 women in a total of 24 positions, and that's not enough.

 In our extended leadership group though, 22% of members are women, but that can only be the beginning. In the medium-term, we intend to increase the share of women in management positions globally to 32%. This is a defined bonus relevance target for my board colleagues and myself. At the end of 2016, this figure was 29.5%. Therefore, under the leadership of our Chief HR Officer, Karen Parkin, we'll make sure that we further increase the percentage of women in management positions.

 Last year, in order to strengthen our employees' ties with the company even further, we introduced an attractive stock purchase plan for employees, around 3,000 employees in Germany, the Netherlands, Hong Kong and the United States have already registered. They are now shareholders of adidas AG, and we intend to extend this plan this year.

 Our employees and our culture are key factors for the company's success. Therefore, they are a core element of Creating the New.

 Over the past few months, we have worked intensively on measures aimed at accelerating our growth and improving our profitability in a sustainable way. In the following second part of my report, I'd like to explain what exactly these measures are and what targets we aim to achieve by 2020.

 The foundation for our plans going forward remains our Creating the New strategy. Our results prove that this strategy has gained traction. We will, therefore, maintain our focus topics, speed, cities and open source. But we are now supplementing them with the following topics: portfolio, North America, One adidas and digital. Let me walk you through these topics. First, portfolio. As a company, we want to focus our competencies on the development and marketing of sports, footwear and apparel. As a result, the company will further sharpen the focus of its brand portfolio. In 2016, we had already announced the sale of Mitchell & Ness. We reinvested the proceeds from the divestiture, a double-digit million amount, to drive key initiatives within the framework of Creating the New.

 In addition, we had announced last year that we're seeking a buyer for the golf brands TaylorMade, Adams Golf and Ashworth. I can now announce that we have completed this process. Yesterday, we entered into a definitive agreement with KPS Capital Partners. The sale would be completed later in 2017.

 I'd like to take this opportunity to thank all TaylorMade employees for their contributions to our company and wish them all the best for the future under their new owners.

 We are also currently seeking a buyer for the ice hockey brand, CCM. Here, the sales process is still in its initial stages.

 But there are already several interested parties, because CCM is a popular and well-known brand. By clearing up our portfolio, we can focus even more strongly on our main brands, adidas and Reebok.

 At this point, please allow me to make a few comments on Reebok. We've developed an extensive action plan for Reebok. This includes targeting significant top and bottom line improvements, in particular, in the U.S. market by 2020. We are convinced that these measures will be effective and then Reebok will make a sustainable positive contribution to the value of this company. For there is one thing I'd like to make unequivocally clear, only those who make a sustainable positive contribution to the company's value can be part of the company. This applies for all brands, all categories and all markets.

 Second, North America. As I already mentioned, adidas was the fastest-growing brand in the U.S. in 2016. Nevertheless, adidas is underrepresented in the world's largest sporting goods market. Therefore, we will continue to invest above the usual level in our U.S. business. Areas of focus will be personnel, digital, infrastructure and marketing. We expect that North America, along with the regions of Western Europe and Greater China, will contribute substantially to the company's growth in the coming years.

 Third, One adidas. The set of measures under the roof of One adidas encompasses numerous initiatives aimed at improving and simplifying our business. This includes standardizing processes, further reducing the number of items offered and harmonizing marketing activities. We're building a standardized IT infrastructure, centralizing global functions and making our distribution centers fit for the future. This way, we will significantly improve the company's efficiency.

 Fourth, digital. The adidas.com and rebook.com websites are already the most global, the largest and the most profitable points of sale we have. As part of a digitization campaign, we plan to significantly drive direct sales through our e-commerce platforms. It is the consumer who decides when and where they would like to buy a particular product, and they are increasingly deciding to order via the Internet. Manufacturers and retailers will have to adjust to this trend if they wish to remain successful in the long term. We're expanding our online sales activities. And at the same time, we're working with our retail partners in this area so that we can grow together. Current examples in this respect are Slando in Europe, Footlocker in United States, and Tencent in China. E-commerce revenues in our own platforms are projected to increase to EUR 4 billion by 2020 compared to EUR 1 billion in 2016. In addition, we intend to accelerate the utilization of digital processes at every stage of the value chain. Digital technologies such as 3D creation, 3D printing and smart manufacturing methods are already used in development and production.

 All in all, these technologies enable us to respond to the needs of our consumers even faster and even better. Based on a successful 2016 and the acceleration of our creating the new strategy, we see ourselves in a position to set more ambitious long-term targets. We outlined these targets at our annual results announcement in March. Here again is an overview of these targets in comparison to our originally targeted results.

 We expect sales to increase at a rate between 10% and 12% on average per year 2015 and 2020. We had previously forecasted sales to increase at a high single-digit rate. We are projecting net income from continuing operations to grow between 20% and 22% on average per year in the same period. We had previously expected an increase of around 15% on average. These figures, shareholders, are important. They are the figures by which you should measure the company's performance. They're also the figures you can use to measure me, together with my colleagues.

 I don't expect our development to always move in a straight line. There will probably be the occasional quarter that doesn't live up to our expectations. In my view, against the background of the political and economic turbulences worldwide in a global business, this is almost inevitable. Therefore, it should be of key importance to us all that the company develops in a sustainable, positive way. Our targets up until 2020 are ambitious. We know that we have a lot of work ahead of us to achieve these targets, but adidas is in good shape, and the way forward is clear. Through the acceleration of Creating the New, we will enhance the desirability of the adidas and Reebok brands. At the same time, we as a company will become better and more efficient, enabling us to improve our profitability. I believe you will agree with me in saying that if adidas continues to grow and become significantly more profitable, this is the best way to sustainably increase the value of the company.

 Let's now turn to the third and last part of my report today, our outlook for the current year. Let's begin with our Q1 results, which we released last week. We had a strong start into the year, consumer demand for our products remains strong across the world. Sales grew by 16%, with the adidas and Reebok brands posting double-digit increases. We also continued to grow strongly in our key markets, North America up 31%, Greater China up 30%, and Western Europe up 10%. And e-commerce was again the channel with the greatest momentum, up 53%. Net income grew faster than sales rising 30% to EUR 455 million. Based on these results in the first quarter, I'm able to confirm today our outlook for 2017. We continue to expect strong top and bottom line growth for the full year. We aim to again grow sales at a double-digit rate. Net income is also targeted to grow at a double-digit rate to a level between EUR 1.2 billion and EUR 1.225 billion.

 Ladies and gentlemen, I hope I've been able to give you a overview of the company's development last year. At the same time, I hope that you share my confidence in our growth prospects.

 Before closing my report with a few personal remarks, I'd like to sum up the key points of my speech.

 We are convinced that through sport, we have the power to change lives. The sporting goods industry is a growth industry. With our strategy, Creating the New, we are ideally positioned to benefit from this growth and to gain market share above the usual level. We provided impressive proof of this capability in 2016, 2016 was a successful year. In 2017, we intend to again significantly grow our top and bottom lines. With the acceleration of our strategy, we will deliver even better results than originally planned by the end of 2020. We will now execute this strategy in a disciplined manner, that is the prerequisite for further strong growth and for a significant improvement in our profitability.

 Ladies and gentlemen, I'm new to this industry and this company, therefore, I'd like to close my report with a few personal remarks. Over the past 9 months, I made myself familiar intensively with the sporting goods industry. I'm excited about the momentum this industry offers. I have visited all our key markets and I've met thousands of employees. I've got to know our key trade partners. I have been to our factories. I've had meetings with our partners from the world of sport. I have attended investor briefings and media sessions. I spent a lot of time with the Supervisory Board and the employee representatives as well with my board colleagues and our leaders. During these meetings, I did a lot of listening because I wanted to find out what our employees and partners think about our company, our brands and our products. Everybody I spoke with confirmed that we enjoy an outstanding reputation. At the same time, they've given me key impetus as to how we can become even better because that is what we strive to do. We are very good but we know that we can and must become even better, and this is exactly what we're going to do.

 In closing, therefore, I'd like to thank the Supervisory Board and, in particular, you, Igor, for placing your trust in me to successfully lead this great company. At the same time, I'd like to extend my sincere thanks to the 60,000 adidas employees, never before have I worked in a company where the employees have displayed such great passion for the company's brands and products. This passion is catching. It is motivational and most importantly, it forms the basis of our success. I'm proud to be part of the adidas team and I look forward to achieving many more successes together. Thank you for your attention, ladies and gentlemen.

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 Igor Landau,  Adidas AG - Chairman of the Supervisory Board   [4]
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 Kasper, thank you very much for your remarks. Ladies and gentlemen, copies of Mr. Rorsted's speech are available to interested shareholders at the information counter. They're available in English and German. In addition to the speech, along with the presentation, will be available on the company's website, this afternoon at the latest.

 At this point, I would like to ask the ladies and gentlemen from the press, the photographers and television crews to leave the meeting hall. Thank you.

 Ladies and gentlemen, I believe that I'm speaking on your behalf if I thank all employees of adidas AG and the Executive Board for the continued dedication, which they have shown to the company, and I would also include the Works Council in thanking you. Can I ask the Executive Board to convey these thanks to all members of the staff.

 The 2016 Annual Report includes the consolidated financial statements, which were prepared in accordance with the International Financial Reporting Standards. The statements prepared by the Executive Board were audited by KPMG, and KPMG issued an unqualified opinion on the 2016 consolidated financial statements and the auditor also approved without qualification the annual financial statements of adidas AG, prepared in accordance with the HGB requirements and the combined management report of adidas AG and the adidas Group. The financial statements, the Executive Board's proposal regarding the appropriation of retained earnings and the auditor's report were submitted to all Supervisory Board members in time.

 Following an in-depth review of the consolidated financial statements, the annual financial statements and the combined management report of adidas AG and the adidas Group, the Supervisory Board approved the result of KPMG's audit. The annual financial statements prepared by the Executive Board as of December 31, 2016, as well as the consolidated financial statements were approved by the Supervisory Board at this meeting, on March 7, 2017. The annual financial statements have thus been adopted.

 Following prior examination by the Audit Committee, the Supervisory Board also examined and subsequently approved the Executive Board's proposal for the appropriation of retained earnings. The Supervisory Board's balance sheet meeting on the 7th of March, 2017, was attended by all members of the Executive and Supervisory Board. Further participants included Mrs. (inaudible) of KPMG, who gave a detailed report on the most important results of their audit.

 Concerning the Supervisory Board's report, which you can find on Pages 20 to 26 of the Annual Report and which also covers the activities of the Supervisory Board's committees, I would like to highlight the following points. One, in the past fiscal year, the Supervisory Board was comprehensively and promptly informed by the Executive Board, both verbally and writing, on all relevant aspects of the company's strategy, the company's plans going forward, including its plans on financing, investment and HR activities, the Group's business performance, the financial position and profitability as well as on possible effects of the current state of economy on the group. The Supervisory Board was involved in all of the company's crucial decisions at an early stage. Furthermore, the Executive Board reported to the Supervisory Board on matters concerning the company's risk profile, risk management and compliance policies as well as all groups' important decisions and business transactions, regularly, extensively and in a timely manner.

 In between Supervisory Board meetings, the Chairman of the Audit Committee, Mr. Herbert Kauffmann, and I, regularly discussed any topical issues with the Chief Executive Officer and the Chief Financial Officer, and we then discussed these topics and after that reported to the entire Supervisory Board.

 In the past financial year, in addition to various operating topics, the Supervisory Board dealt on several occasions, the Supervisory Board dealt with Executive Board matters in addition to the subject matter of compensation, we also dealt with personnel changes. For instance, as mentioned earlier, in January last year, we resolved to appoint Mr. Kasper Rorsted as a member of the Executive Board with effect from the 1st of August 2016, and as the new Chief Executive Officer with effect from October 1, 2016. As well as the quarterly financial reporting, the Supervisory Board dealt with the following topics concerning the company's operations in fiscal 2016, the current status of target achievement of the long-term strategic business plan covering the period up to the year 2020, which plan is entitled Creating the New, the profitability in Retail segment, the critical importance of digital brand, e-commerce and the launch of the digital transformation, which is a related topic, the planned change of location in the U.S. from Canton to Boston, and the resultant new developments and measures of Reebok. And we also looked at strategy review of a potential sale of parts of the golf business and the respective current status of the negotiations regarding the planned sale of the golf brands, TaylorMade, Adams Golf and Ashworth. The relationship between the Executive Board and the Supervisory Board was marked in every respect by good productive cooperation and trust. The declaration of the compliance prepared by the Executive Board and the Supervisory Board pursuant to Section 161 of the German Stock Corporation Act, Aktiengesetz, was issued last year on February 15, 2016. On the 3rd of March, 2016, an intra-year change was made to the declaration of compliance of February 16, 2016, and another deviation from the code was declared with regard to the number of external mandates a Supervisory Board member may hold. The 2017 declaration of compliance was issued on the 13th of February, 2017.

 For further details on the declaration of compliance, I would refer you to the Corporate Governance report, which you'll find on Page 27 of our annual report, which also includes the Corporate Governance declaration. The full wording of the declaration of compliance of February 13, 2017, can be found both in the annual report on Page 27 as well as on the company's website.

 The compensation system applicable to the Executive Board members since the 2015 fiscal year was already approved by you, dear shareholders, at the Annual General Meeting last year on May 7. Changes in the structure of the compensation system have not happened, so I probably assume rightly that, that system is sufficiently known to you. I would also refer you to the compensation report, Page 32 of the annual report, where you can find further details and it also includes more information on the compensation system and a breakdown of the individual Executive Board compensation packages.

 Ladies and gentlemen, I would now like to bring the remaining agenda items before the meeting. These agenda items are as follows: Item 2, appropriation of retained earnings; Item 3, resolution on the ratification of the actions of Executive Board for the 2016 financial year; Item 4, resolution on the ratification of the actions of the Supervisory Board for the 2016 financial year; Item 5, resolution on the amendment of Section 18, compensation of the Supervisory Board of the Articles of Association; Item 6, resolution on the cancellation of the authorized capital, pursuant to Section 4, Paragraph 2 of the Articles of Association on the creation of new authorized capital against contributions in cash, together with the authorization to exclude subscription rights as well as on the respective amendments to the Articles of Association; Item 7, resolution on the cancellation of the authorized capital pursuant to Section 4, Paragraph 3 of the Articles of Association on the creation of a new authorized capital against contributions in kind, together with the authorization to exclude or disapply subscription rights as well as on the respective amendment to the articles; and Item 8, resolution on the cancellation of the authorized capital, pursuant to Section 4, Paragraph 4 of the articles on the creation of a new authorized capital against contributions in cash, together with the authorization to disapply subscription rights as well as on the respective amendment to the Articles of Association; and finally, Item 9, appointment of the auditors and the Group auditors for the 2017 financial year as well as of the auditors for a possible review of the first half year financial report and other interim financial reports for the 2017 financial year, and the 2018 financial year, prior to the Annual General Meeting of Shareholders in 2018.

 Before I open the general debate, I would like to inform you that the attendance list, which is required pursuant to Section 129 of the German Stock Corporation Act is now available and that I have passed it on to the notary. A copy of the attendance list is available for inspection at the speaker's desk. I will now announce the initial attendance count.

 Of the nominal capital of the company, which amounts to EUR 209,216,186 -- no, that was 209 million divided into 209,216,186 no par value shares, we have here represented at today's AGM 135,213,080 no par value shares carrying the same number of votes. It's easier to understand that this corresponds to 64.36% of the nominal capital entitled to vote. I have signed -- no, I haven't, I will. I am now signing the attendance count list. And as I said, it will be available for your inspection at the speaker's desk. Viola.

 With that, I would like to open the general debate, that is the discussion of all agenda items 1 to 9. And can I ask all speakers to focus exclusively on the subject matters on the agenda today. Let's hope for the best.

 Those shareholders or shareholder representatives taking the floor, will you please give your name and present your voting card block at the speaker's desk, unless you haven't done so already, I will then call the speakers individually during the general debate, and when it's your turn to speak, I would ask you to proceed to the rostrum and ask your questions. Your questions and the questions posed by other speakers will be collected and answered on block, unless it makes more sense, of course, that we answer the question directly. Since your remarks will be translated simultaneously by sworn interpreters, so we can be sure that your contributions will also be properly understood by those members of the Executive Board who do not speak German, and hence, all of your questions will be answered or can be answered.

 As I said earlier, any answers given in English will also be interpreted simultaneously into German. So I already have a number of requests to speak. And first, I would like to call Mr. Yeager who represents the association for the protection of investors, the SDK (foreign language) to the podium. After that, I will ask Ms. [Straubinger] to come to the podium. And after that, Ms. [Krensler, Katarina] from Nuremberg . Mr. Yeager, the floor is yours.

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Questions and Answers
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 Unidentified Shareholder,    [1]
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 Mr. Chairman, ladies and gentlemen, I'm [Gad] Yeager, I speak on behalf of the SDK Association for the Protection of Small Shareholders. The figures of the adidas AG company are impressive, 18% increased gross margin is better, profit increased to more than $1 billion, 25% higher dividend to EUR 2 and a skyrocketing stock price. So it is justified that in 2016, the adidas stock price for the second time, consecutively by the way, showed the best performance in the German DAX Index. adidas has become an absolute favorite among shareholders, and if our new CEO, Kasper Rorsted, manages to achieve what he announced in March by 2020, then I think we have a lot of reason to stay and become even more enthusiastic about the share as shareholders. Achieving these goals by 2020, however, is not going to be a picnic, it is probably going to be a very strenuous triathlon because not everything at adidas is tops, we have weak points, we have room for improvement, things that need to be cleaned up and, of course, competitors aren't sitting on their hands. One weak spot of our company is still the relatively low profitability. Last year, the operating margin went from 6.5% to 7.7%, but especially compared with the a competitor, Nike, whose operating margin is about 13%, and this means that the profitability at adidas is not satisfactory yet. One problem child when we look at profitability is still Reebok. The upward trend cannot be overlooked. It is obvious, but the growth in 2016 of 6% is clearly less than the adidas top line growth. And also, the gross margin of 37% of Reebok is still lagging behind adidas clearly. In 2016, Reebok still made deficits, we assume, despite all progress expectations in Reebok have not been fulfilled. One negative aspect I noticed is that especially in the home market of Reebok in the U.S. last year and during the first quarter '17, the figures went down. Mr. Rorsted also mentioned this, hence, my question, what are the reasons why on the North American market where in recent years, a lot of investments were made, the efforts of Reebok are really not bearing fruit very much? And since all these efforts we're not very successful, a new plan with new measures was announced to increase sales and profitability of Reebok in North America, separation of the brands adidas and Reebok, a new corporate office, closing 150 shops, et cetera, reducing headcount. So my question on this, how high will the transformation cost of this restructuring be at Reebok? And what are your target in terms of top and bottom line? And Mr. Rorsted, how much patience will you show with Reebok? How much time will you give Reebok to fulfill the expectations we have with regard to Reebok with profitability and top line? Online business. In March, you, Mr. Rorsted, announced that you wanted to focus more and increase the online business instead of the original target of EUR 2 million by 2020, EUR 4 billion are supposed to be made online. For profitability reasons, this is something that is comprehensible, the margins in the online business are clearly higher than elsewhere. The traditional sports trade sees the expansion plans of adidas as kind of a threat, some dealers are worried, and they fear that they will be second choice or second priority when being supplied with adidas goods, how would you respond to the criticism from retailers, and how will you be able to increase the online business and stay a fair partner to those retailers and not annoy them? So what is going to be adidas' position here and what measures have you planned specifically to achieve the EUR 4 billion online sales target by 2020? A few words on digitalization. This is a big topic and it concerns not just the Internet appearance, it also includes athletes, social medias using customer information, the digital controller processes, et cetera, et cetera. So my question is: at adidas, is there already a digital strategy, which is seamless and comprises all parts of the company. If so, what is it like? What is that digital strategy of adidas? One area of digitalization is of course, digital production, the so-called Speed factories, as we could read after the test phase this year, mass production is intended to start in the United States, a second Speed factory where we built the 2 factories in [Anspar] and the 1 in the U.S. together are supposed to output 1 million shoes or pairs of shoes together. When do you expect those 2 Speed factories to work profitably and when will you achieve that annual production number of 1 million per year, when will that be achieved? It is adidas' target to become the first fast sports goods manufacturer, and the Executive Board defined for 2020, a 20% of sales should be achieved with products based on speed programs. Right now, this figure is 15%, as Mr. Rorsted just said. So when will the product be speed-ready? When will we be able to count the product among the speed products and what is adidas doing to achieve this by 2020 to achieve half of its net sales with speed products? Another measure to improve profitability of a group is selling off the golf businesses. Now we heard that the transaction in 2017 will involve a high 2-digit or 3-digit million amount, which is going to be a burden, but also, the ice hockey business is going to be shared, CCM. Since the growth prospects aren't very good and it's considered not to be the core business of adidas, now I think, here, the sales also went down by 13% in that area. Now just to get a feeling of what size the ice hockey business has at adidas, I would like to have the approximate CCM sales volume. Is CCM writing black figures at the moment? And Mr. Rorsted mentioned that the sales process has just been initiated, but is there a specific idea when that CCM sale will be finalized? On United States, we see in the annual report that North America remains a strategic priority. Mr. Rorsted mentioned this as well. When you want to get closer to Nike, you have to win market share in the United States. Thanks to marketing budget, which is higher than average, adidas' sales, which rose by almost 30% in the U.S., and also, in the first quarter 2017, we had another 31% increase in sales. Nevertheless, the market position on the largest sports market in the world is far from satisfactory. The market share in the U.S. is slightly about 10% for adidas, and the distance to Nike in America is still huge. Now to improve the position in the U.S. and in order to increase profitability number of measures are intended to contribute to brand attractiveness with consumers, what measures will these be? And how high will the marketing expenditure be in the running year? What market position and what market share is adidas going for in the U.S.? What sales figure is going to be the target in the United States market? In the U.S., we see certain protectionist tendencies, President Trump would like to levy import duties on goods imported into the U.S. to step-up production in the country. How does the Executive Board see the danger of high import duties being implemented, which will affect the import of sports articles into the United States? And does adidas have a plan in case that high import duties will be imposed on sports articles? So much for my question. Now Mr. Stalker will end his job as CFO, and Mr. Bennett will follow him leaving. I would like to thank the 2 gentlemen, Mr. Stalker and Bennett, on behalf of all the shareholders, for their successful work at SAP. Thank you. Ladies and gentlemen, in the past 2 years, adidas AG showed an excellent performance. Mr. Rorsted, as the new CEO, did not just jump on the train and sat back, he stepped on the accelerator and made the goals for 2020 even higher. This is impressive and this is, of course, good for us. I would like to wish Mr. Rorsted and the whole team the best of success and always a good instinct for the right decision for the future of adidas. Thank you.

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 Igor Landau,  Adidas AG - Chairman of the Supervisory Board   [2]
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 Thank you, Mr. Yeager. I now call Ms. [Straubinger]

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 Unidentified Shareholder,    [3]
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 Ladies and gentlemen, Mr. Landau, my name is Ms. [Straubinger], I represent shareholders of adidas AG, who transferred their voting rights to the German Association of Retail Investors. Now this is your first year at adidas, Mr. Rorsted, and it has become clear that you have chosen a new focus, different from Mr. Hainer, consumers are even more in the foreground of your activities, and this is what your company is going to focus on, and there's also going to be clear consolidation of brands because of the sale of many brands. adidas and Reebok are still there, TaylorMade has been sold, ice hockey activities under the brand name of CCM Hockey are about to be sold. So far, the sales process has not been successfully concluded, is this because of the price or is it because this business isn't quite so attractive right now? And when will you be able to report to us that CCM as well was sold. Let's now come to the weakest point of adidas, that's Reebok. Now we have not come to grips with Reebok. I believe that we should have drawn the necessary conclusions much earlier, and I would ask myself whether it's not high time to maybe better sell Reebok. Yes, Reebok may be growing, and with this, I would like to anticipate some of your answers, but the margin is poor. You've mentioned it. All in all, Reebok is generating a loss. When are you going to manage the turnaround at Reebok if we were to stick with Reebok? And what is going to be new at Reebok? Is it the case that the strategy hasn't been clear for a very long time? One thing is sure, we're not going to remain patient for much longer. Let's now come to adidas. In the American market, the weight carried by adidas wasn't big enough. Although your success in Europe and Asia is great, it is still the U.S. we need to look at. Now of course, we have grown significantly in the first quarter and we've made progress, but the gap separating us from our largest competitor, and I'm not going to name it again now, this gap is still here and we haven't managed to make it smaller in recent years. Now you're trying out new concepts all the time, but you are not actually making progress. adidas Originals and adidas Neo are the brands, why do you think that you will be able to successful, please explain the new concept, please explain its sustainable aspect, what are the new requirements for your team? And let's be clear, adidas must be successful in the short-term here as well. adidas is getting closer to consumers. One thing that could bring adidas closer to its customers is the Speed factory. Within a short period of time, Speed factory should be able to answer the requirements of customers at very short notice. How are you going to do that? Is it going to be the case that customers can actually wait for their pairs of shoes to be produced in the shops? And you're also using 3D printers, will you be able to maintain the level of quality? And a very exciting issue, you've come up with a new type of sustainability using waste, fishing nets from the oceans are being used to produce shoes. So far, few pairs of shoes have been sold, but is this just the beginning? Are you going to continue along these lines? What are the margins with these products and what are your plans for the future? And instead of recycling plastic, couldn't you just be using environmentally friendly materials in the first place? Companies and athletes, in order to obtain their goals and to be successful, they need 4 things, courage, stamina, talent and luck. I'm quite sure that adidas is courageous, talented and shows a lot of stamina. So all that remains to me to say is I wish you luck. Thank you for your attention.

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 Igor Landau,  Adidas AG - Chairman of the Supervisory Board   [4]
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 Thank you very much. May I now give the floor to Ms. [Krensler]?

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 Unidentified Shareholder,    [5]
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 Mr. Landau, Mr. Rorsted, ladies and gentlemen, the shareholders, my name is Katarina [Krensler], I'm a member of the German Women Lawyers Association, djb, and I work at the University. I'm here also to represent the association of ethical shareholders. We are looking for an equal position of women in all areas of society. This includes equal opportunities in companies such as yours. Achieving this objective has become part of our dedicated project. Ever since 2009, we've been visiting AGMs of big stock-listed companies. Our questions are directed at members of the Supervisory Board and Executive Board, respectively. We have issued numerous statements, we've been to many different AGMs in Germany, and initiated projects along these lines. We also went to other EU countries to visit general meetings. In doing so, we have made our contribution to make sure that the law on equal participation of men and women has entered into force. Now we would like to know what you did in your company to implement this law, increasing the number of women in executive positions requires structural changes, I've got the following question relating to this. The new version of the German Stock Corporation Act considers the 30% share as a minimum requirement only. The djb demands a share of 40%. The German Law on Panel Composition stipulates a share of 50% for federal government secondment to public panels as of 2018. The share of women on the Supervisory Board of your company is 25%. What is your limit? 1 of the 4 members of your General Committee was a woman, 1 of the 3 members of the Nomination Committee was a woman. Have you also set yourselves a target for how many women should be on your committees in future? And if so, how many? If not, do you really think that this is enough? The Supervisory Board is required to set a target for the composition of the Executive Board. Your target is to appoint 1 woman to the Executive Board by 30 June 2017, a target that you've already achieved, as you stated earlier. What are your reasons for such a low share? The Executive Board is required to set a target for the composition of the first 2 management levels, your target is a share of 18% women for the first management level and 30% of women for the second management level by June 30, 2017, what are your reasons for this target? How many women and how many men were promoted in your company last year? Please mention the absolute and percentage figures. For the equal participation -- the law for the equal participation and development of female talent at executive management levels must be implemented and this is the management's task to do it. Who is responsible for the result? Is there are reporting chain via the Executive Board to the Supervisory Board? Auditing firms recommend an analysis of staff review, promotion and remuneration structures in order to increase the share of women in management positions. In your company, have you carried out an analysis of the reasons for this low share of women, for instance, by making use of an auditing firm services? If so, what was the result. If not, when are you planning to do this? Thank you.

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 Igor Landau,  Adidas AG - Chairman of the Supervisory Board   [6]
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 Thank you. Now there is nobody else on my list, but maybe you've changed your mind and somebody would like to ask a question. All right. If that is not the case, Kasper, over to you to answer the questions.

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 Kasper Bo Rorsted,  Adidas AG - CEO and Member of Management Board   [7]
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 Let me start with Mr. Yeager. Mr. Yeager, you asked a total of 20 questions and we're trying to answer them as best we can. You asked about Reebok and about the success we had with our measures in North America, where do we stand. In the past few years, we changed Reebok from a traditional sports brand to a fitness brand, which is excellently positioned to be the best fitness brand in the world. The brand was able to continuously increase its margin over the past quarters. And nevertheless, in its home market, there was no growth possible. In addition, the profitability of the brand doesn't meet our expectations. Despite annual sales of almost EUR 2 billion, Reebok is not profitable, and this is why, in 2016, we announced a plan to accelerate sales growth in Reebok in the U.S. and to increase profitability. As part of this plan, the company set up a joint management team for Reebok that closes the gap between the U.S. and the rest of the world, and thus, makes it possible to further focus on the requirements of U.S. clients -- U.S. customers. This is something that will create an environment that is absolutely tailored at the needs of fitness and Reebok as a fitness brand. We're going to change our location to Boston in the course of the midyear in order to be successful in the North American market in the future. We must make sales more efficient, this is why we decided that the number of Reebok shops in North America should be optimized in 2016. 20 of our own retail shops were closed and the number of Reebok fitness stores was almost halved last year. In 2017, another 50 shops should be closed. We are confident that the initiated measures will show a positive impact on the operating and financial strength of Reebok, and thus, make sure that sales growth, especially in North America, can be accelerated and the profitability of the brand can be improved considerably in future. What are the sales targets for Reebok? As you know, we don't make any statements regarding profitability at brand level. But as I like to emphasize, Reebok is an important part of our family, but as any family member, Reebok, too, must make its contribution to overall success. The profitability of the brand does not meet our expectations. We are confident that the restructuring plan, which we initiated for Reebok will bring about the necessary profitability improvement. As far as sales are concerned, we also expect clear improvement, we expect average growth by 2020 between 7% and 9%. But it's not about the quantity of sales, but about the quality of sales. You also asked a question regarding restructuring costs. One-off costs in connection with restructuring at Reebok amounts to a total of around EUR 30 million. The total amount was incurred in 2016 in the second half of the year and was thus posted accordingly, that is last year. You also asked a question regarding our level of patience vis-a-vis Reebok and what our goals are regarding Reebok. As has been mentioned, Reebok's restructuring plan runs for a total of 3 to 4 years and we can safely assume that it will take some time for us to achieve our targets, but I can tell you that we are very targeted and structured in our approach, but you certainly can't solve problems overnight, problems that haven't developed overnight. You also asked a question about whether the specialist trade will suffer from our e-commerce plans and what we do about that? We currently generate EUR 1 billion through e-commerce. By 2020, this number is going to rise to EUR 4 billion, according to our projections. We set ourselves the target of having sales between EUR 25 billion and EUR 27 billion through e-commerce, and that means that a large share still remains with our specialty trade. And by the way, many of these trade companies think that Footlocker have their own e-commerce channels. What makes us different from them is that we can offer a whole range online. In the end, it's going to be the consumer who decides where to buy. And it's not just in our industry that consumers opt for online buying, but in other industries as well. And this is the situation that everybody must get accustomed to. You also asked what measures we are taking in order to achieve our e-commerce target. As a part of our digitalization strategy, we are planning to boost e-commerce, and in this context, we're currently undertaking significant investments aiming at making our websites, www.adidas.com and www.rebook.com and making them unique as consumer experience, and the allocation of products and the exclusive availability of products through our website are factors in this plan. Moreover, we're going to keep investing in the infrastructure of our online business to make sure that in the future, we can offer an even better service concerning the buying process, the availability of products and delivery times. Our e-commerce is going to be moved closer to center stage to make sure that there is a close link between consumers and our online business. Another question of yours was about how adidas positions itself vis-a-vis trade. Now no question, we're going to remain an important and fair partner for specialist trade. Wholesale is going to remain an important partner of ours in the future. Over 120,000 stores made available through our wholesale partners means that we have a unique network and points of contact with our consumers. We're very proud of that, and this is why our position in wholesale is going to focus on important customers of ours. At the center, we focus on those in our important metropolitan cities. Controlled space remains an important factor in this strategy. Our target is that by 2020, over 60% of our overall sales should go through controlled space. Wholesale remains to play an important part in this development. And last, but not least, we're going to work towards integrating wholesale even more than before with our own retail activities. You asked a question about the Speed factories and profitability. When will the number of 1 million pairs of shoes be reached in the Speed factories? As part of our Speed factory initiative, which we filled with life together with our partners, we're developing completely new technologies and processes to make this production innovation successful and to achieve our targets for the Speed factory, namely to produce shoes where demand is totally customized to the requirements of our consumers. Even though we celebrated the first success with our Speed factory in 2016, and the first 500 pairs of running shoes were produced in our Speed factory in Ansbach, we mustn't forget that we're still at the beginning of a long journey. With the view to the low volumes, it doesn't come as a surprise that profitability right now is not a performance indicator for the Speed factories, and it would be misleading to speak about details right now, but there is no doubt that the profitability of our Speed factories is going to increase going forward. After 2016, when the first 500 pairs of shoes were produced in our Speed factory in Ansbach, we will now start serious production this year and we'll increase our production accordingly. This is a great success story and we are aiming at producing 500,000 pairs of shoes at our Speed factories in Ansbach and Atlanta, respectively. Last year, we sold 1 million pairs of shoes per day. So you can imagine that this is indeed a long way to go. Is there a digital strategy at adidas that covers all parts of the company? We are right now working full steam for the implementation of our digital strategy, which is part of the acceleration plan of Creating the New. Digitalization means much more than just increasing the financial target of boosting sales in e-commerce from EUR 1 billion in 2016 to EUR 4 billion by 2020. Digitalization comprises all processes along the supply chain and value-creation chain, and we're looking at every individual step on the way. Digitalization will help us creating direct relationships with our consumers. Today, when we create and produce our product, digital processes like 3D are being used, and creative new ways like the Speed factory are being implemented. You also asked more questions about the Speed factory, you said, by 2020, 50% of your sales should be generated by products that are being produced as part of speed programs, it's not about the Speed factory. What preconditions must a product meet in order to be a fast product? In order to make desirable products available to our consumers at any time and offering them a unique consumer experience, we need to be close to our consumers to know what they want and to be able to react quickly, and this is why Speed is a very effective lever for us. This is why we set ourselves the target that by 2020, we want to be the fastest sporting goods company and the number of fast products, in all our products produced should be increased by that time to 50%. Now from initial product creation to production, we are looking at a period of less than 2 months. This is clearly below industry average, which ranges between 6 and 9 months.

 You asked about North America, about the market share target we have in North America. Please understand that for competitive reasons, we are not going to state any such numbers for North America. Suffice it to say that at the end of 2016, our market share was at around 8%. That's clearly better than in the previous year but is still significantly lower than in all other regions worldwide. And this is why you can rest assured that in future years we're driving for a clear increase of market share in North America.

 You went on to ask the following question. North America is a strategic market for you. What are the measures you take in order to increase brand desirability? As part of our 2020 strategy, Creating the New, we are placing a much greater focus on North America, and we keep investing in this market -- marketing and communication first and foremost. In addition, with our executives in North America, we have an American at the helm of the company that is marking, who knows consumer, which is and who has an excellent network to work with. In recent years, we managed to build up a much stronger team around him by investing into Portland and in making the necessary resources available. All of this will help us increase our visibility in this very important market. It is important that U.S.-relevant sports categories like baseball, basketball, high school, college sports are represented. Meanwhile, we have many partnerships with around 100 colleges and more than 3,000 high schools. And in American football and baseball, the most important sports in the U.S., we have over 100 athlete each. And in basketball, James Harden is definitely one of the best players this season, who, week after week, increases our brand awareness and represents our brand. And this will make a significant contribution to increasing the credibility of our brand in North America to be perceived as a U.S. sports brand. At the same time, our focus on North America will be characterized in developing product and brand messages that are tailored to the North American market, in particular.

 Mr. [Yeager], three questions regarding CCM. You asked about the sales volume of CCM. And in 2016, the figure was EUR 271 million. Second question, is CCM in the black? Now Mr. Yeager , you will understand we can't disclose any information on the profitability of our brands. Third question, are there any specific ideas as to when we're going to sell CCM? Well, the sales process started just recently, so it's still in its initial phases. However, at this point, I can assure you that there are several interested parties. And by the way, that's not surprising, if you ask me, because, after all, CCM Hockey is an outstanding and very credible ice hockey brand. But, of course, we'll inform you and the public as soon as we have more news in this regard.

 Let's stay with North America because you also asked about the sales targets for North America. In 2016, the adidas brand had sales of EUR 2.9 billion, and we planned to have EUR 5 billion in 2020, plus Reebok. So this is a very ambitious sales target for North America at EUR 5 billion.

 You also asked about our marketing spend in North America. The precise information for point-of-sale and marketing investments are not disclosed by region. What I can tell you is that in this area in North America, last year, we increased our spend to ensure that we can implement our strategic business plan here. In 2016, the investments for marketing and point-of-sale measures were more than 50% above the 2014 figure. All in all, in total, the point-of-sale spending and marketing spend for the entire company in 2016 around the world were EUR 2.521 billion.

 You also asked about border taxes in the U.S. I want to think about that. Well, first of all, should there be an import levy, all companies in this industry would be affected, including our competitors across the board. So, therefore, in this context, we can assume that the cost of all industries will be -- additional costs will be passed on to the consumers. So the Americans, consumers and employees, would be suffering at the end of the day. Sports articles would be more expensive. That would jeopardize some jobs, and there'd be no mass production. We employ 13,000 people in United States, and we're planning to hire more people. All of this would be jeopardized if our products would have to be made more expensive because of an import levy. So, therefore, the risk as far as we are concerned from our perspective is considered to be rather low. Right. I think I've answered the other questions.

 Ms. [Straubinger], you also asked a number of questions, 7 to be precise. First, Reebok. Well, Reebok, we should have -- shouldn't we have exited Reebok at an earlier point in time? Should we sell Reebok? That was your question. Of course, we don't believe that and let me explain why. As mentioned in my speech, we're not going to sell Reebok because we are still convinced of the strategic positioning of the brand and its relevance in the market. Reebok focuses exclusively on fitness consumers. Its goal is to become the best fitness brand in the world. Fitness is an important gross market because more and more people want to be and need to be healthy and fit. We also want to be the innovation leader in fitness. Reebok is a pioneer in terms of new fitness activities and development of new technologies and products. So Reebok does have lots of opportunities for the future, and we are confident about this brand's future, although we do know that we have to do a certain amount of homework, especially as far as the profitability of this brand is concerned and its growth in its home market, the United States. In my presentation and when I answered Mr. [Yeager's] question, I think I addressed the underlying measures in great detail and what we're going to do to make sure that Reebok is going to make an important and substantial profit contribution to the company.

 You also asked what's new at Reebok. We want to make Reebok successful for the future, so we're working full speed on our restructuring plan, which was published in March of 2017. So we're not going to sell Reebok. We are convinced that the measures we are taking are going to be successful.

 You asked about our U.S. strategy, North America, what's new about Originals and New. How can you score additional points? Can you explain the underlying concept? What about sustainability? And what time frame do you have for your management's targets? Generally speaking, we can say that the sporting goods industry has developed towards athleisure over the past few years. Our Originals business, which incidentally is less than 1/3 of our sales, today, consists of a very healthy mix of historical brands, Superstar, Stan Smith and Gazelle and modern products like NMD, Tubular or EQT. And the latter include our innovative technologies like BOOST, and they compete directly with the performance, the products of our competitors. And it's this part of our Originals business that's growing faster. In fact, 50% of our footwear sales are accounted for by Originals, and we think that this is a sustainable trend and that we are going to be one of the leading companies in this area. We can only benefit from this trend, and we can see the success already in North America. In everything we do, we focus on the consumer. That gives us end-to-end information on the most recent trends and what our consumers want and expect. That allows us to react even faster to any changes in consumers' requirements. Here, we invest in the markets and in categories, in qualitative and high-quality market trends, trend scouting and consumer surveys to ensure that we know exactly what our consumers want and how our brands can deliver on their requirements. As part of creating the New, we also introduced a Net Promoter Score system that allows us to analyze our brand's desirability even better. And yes, the Net Promoter Score tells us just how likely it is that consumers are going to recommend our brand to their friends and family. So NPS is an important part of our strategy and our consumer-focused organization, and it's a criterion for all employees, including the members of the executive board.

 Ms. [Strabinger], you also asked about TaylorMade and CCM. I think I answered the question about CCM because this question was also raised by Dr. Yeager . TaylorMade, last night, we announced that we've signed a contract for USD 425 million for TaylorMade, and this process will be completed in the course of the year.

 There was a question regarding our Speed factories. adidas is getting closer to the customer. That is why we set up those Speed factories. We want to be able to react faster to fashion trends. What exactly is this going to tell? Well, the Speed factory is an ultra-flexible Speed factory that can be located anywhere in the world. Speed factories are about speed, flexibility in production. We realigned conventional processes, and that allows us to offer consumers the products that they want and need. Speed factories are a new era in shoe manufacturing with unique position, design opportunities and very high-performance levels, we can make customize and personalize the products that meet exactly our consumers' wishes and requirements. In the far future, it might be possible that we can create and actually produce products in our stores.

 Ms. Straubinger , you also asked a detailed question regarding our sustainability and why we're doing it in this regard. Let me answer this question. We are a very proud Co-Founder of Parley for the Oceans. Parley is an organization that wants to raise awareness for the beauty importance and the vulnerability of our oceans. We have joint projects, and we want to stop the destruction of our oceans. We support Parley for the Oceans in their information policy and in the Ocean Plastic Program to stop the pollution of our oceans with plastic. Already, we've had several successes. Since April 2016, we've stopped using plastic bags in our stores around the world. In November 2016, we offered the first commercial products using Parley plastic, including football jerseys for Bayern Munich and Real Madrid or the UltraBOOST Uncaged Parley running shoe at 7,000 available pairs, which were sold out in no time at all. For the current financial year, there are even more promising projects with Parley. In 2017, there will be a total of 1 million shoes based on Parley plastic from the oceans. Yesterday, we launched 3 new Parley shoes UltraBOOST (inaudible) and the UltraBOOST Uncaged. Profitability of Parley products, you will understand that we can't disclose an information regarding the profitability of individual products or franchises for competitive reason. However, let me say this, the Parley for the Oceans volume has so far been very low indeed, and therefore, it hasn't been possible to achieve economies of scales and raise synergies so far, and, of course, this has an impact on the margins of these products. And as volumes raised is going to change, I'm confident that others have seen the success of the UltraBOOST Uncaged Parley, of which 7,000 units were available was sold out in no time at all. But please don't forget that the success of our commitment is not just about sales and profitability, our target group is -- our target group, they think that the condition of our oceans is important, and thanks to our partnership with Parley, we make it possible for them to make a difference. So our partnership with Parley for the Oceans increases our brand's desirability, and as a result, this lead -- this leads to an improvement in the Net Promoter Score. Already, we also used sustainable materials in our production. As part of our sustainability strategy, we've committed ourselves in our manufacturing processes to use sustainable materials in our processes and stores. The examples of environmentally friendly materials include sustainable cotton, so-called Better Cotton. For 2016, the target was 60%, but we over-delivered on that by 8%. So adidas is well on track to achieve its goal by the end of 2018 to achieve 100% Better Cotton. The Better Cotton Initiative is focused on efficient use of water, reduction of pesticides, fair working conditions in cotton productions. Secondly, recycled polyester. We want to avoid using new plastic as far as possible. Wherever possible, we use recycled polyester in the manufacturing of our products. In the spring summer season, around 20% of the volume is made of recycled polyester, and we're going to increase this percentage. Number three, dry dye. We're going to use waterless technologies in the production of our processes. And number four, biodegradable materials. In November 2016, we launched a prototype of the adidas Futurecraft shoe. It's an upper material that's made 100% of Biosteel fiber. It's nature-based and fully biodegradable, high-performance fiber developed by a German biotechnology company, AMSilk. It's a unique material, and it has features that are important for high performance. So the Biosteel fiber, for instance, is 50% lighter than conventional fibers and potentially the strongest available natural material. Thank you.

 Ms. Straubinger , you also asked a question about the 3D printing. We're making good progress in new technologies such as 3D printing. Just recently, we launched the Futurecraft project. Thanks to our open-source approach, we have an excellent network of partners that have a lot of expertise in this area, and we can rely on that expertise. We're going to over-deliver on the standards that we have defined for our products. There are other advantages, for instance, the reduction of the amount of material used. We're going to build on these technologies going forward and make it accessible to our consumers. I hope we've answered all of your questions with that. Thank you.

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 Unidentified Company Representative,    [8]
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 (foreign language) to start with, as you know, or as you have seen, we didn't wait until the law came to have 30% members within the (inaudible). So, of course, our (inaudible) is we follow the law, of course. We were, in fact, as I said in advance of the law, but part of that, we have no limit and no rule. What we want is, first, to have the right board members. If on top of that we can find woman, we are more than happy to have them, but we don't want to have special rules. I would say exactly the same with (inaudible). We are very happy to have fulfilled the goal that we set ourselves. We said we would like to have, if possible, 1 lady. In (inaudible), we had a good candidate. So we just decided to bring her in the (inaudible) [Karen]. We could have 2, we could have 3, we could have 4, but in fact, it really depends whom we need and who is the best candidate knowing that -- and we were happy to be able to do so, that, in general, we really prefer to a woman or candidates coming from within and not to have to look outside because, normally, a well-run company is a company which is able to generate its own [lightened] leading managers. At the same time, you heard that Kasper talk about improving the number of woman we have in lightened position under the (inaudible). We are totally supporting this initiative and I would say even more as part of the 3-year incentive plan that we have. You know that we have bonus which is a yearly plan, and we have also an incentive plan covering 3 years that we call the LTIP with a number of criteria. One of the criteria in the present LTIP '15 -- '17 is specifically related to the number of woman the (inaudible) will be able to bring in lightened position. So I think that what I wanted to say, we respect the law, but we don't want to fix rigid goals because we will always prefer quality before specie if I could say so.

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 Unidentified Company Representative,    [9]
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 You also said that the executive board has to find a target for the first 2 management levels. Your quota is 18% for the first and 30% for the second level. And do you want to achieve it by June 30? How do you explain those quotas? For the positions in the first and second management levels directly below the executive board, we defined our own target. We look at positions only with management responsibility and related salaries. This tight definition minimizes our personnel selection and gives us an accurate picture. This is a level of transparency that we deliberately want to achieve to underscore the importance of this issue. You mentioned the date of 30th of June, 2017. This is our deadline for the 2 levels below the executive board. We want to go from 11% to 18%, and women on the second level below the executive board are to increase from 26% to 30%. This quota or target is based on figures from March 2015 at the time the executive board decided that this is a realistic target. In the annual report 2017 -- sorry, in the annual report 2018, we're going to give you more information. The global quota should be 32%. We're a global employer, and we want to do more than legal requirements. Global careers are an important element of our talent management strategy and succession planning.

 You also asked about the implementation of the act on gender equality, the development of the female talent in management positions. You said that this is a management task. I think I've covered this topic in my speech, who was responsible for the results. Do you have a reporting chain, including the supervisory and executive boards? The executive board has one target, and that is to promote leadership. In this context, the global women quota of 32% is a long-term incentive target of the executive board. As described by Mr. Landau just a minute ago, the division managers and HR also have quota targets for the -- quotas for their targets. This year, the executive board created new management groups (inaudible) group, for the below the executive board, 20 members, of which 1 woman -- I'm sorry, 2 women, that was before the appointment of Karen Parkin. Therefore, it's now 19 plus 1. And the extended leadership, 111 people, of which 24 women or 22%. That will generate approval of women for our succession planning.

 Okay, 2 more questions. Ms. [Krensler], you also asked about the precise figure of men and women in the company that were promoted. At adidas AG, last year, there was a total 791 promotions, of which 405 or 51.2% were women and 386 or 48.8% were men.

 Secondly, you asked about a potential analysis. Looking at our total workforce, we had KPMG Germany in 2015, developed a simulation tool that allows us to project the development of our workforce, with a focus on the ratio of women and focus on the age structure. We use this tool to develop realistic quotas together with the division managers, and we also want to identify any counterproductive demographic developments at an early point in time so that we can factor them into our planning. The analysis of this data has shown that there is a rather high level of attrition among female managers on the first level and that we do not have enough female managers to fill those vacancies. So I think that answers this question.

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 Unidentified Company Representative,    [10]
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 So I hope we -- I hope we've answered all of your questions. I'm not saying to your satisfaction, but at least we've answered them. So let me ask at this point whether there are any other requests for the floor. If this is not the case, I state for the record that there are no more requests for the floor, that all questions have been answered and that the discussion on all items of the agenda is closed.

 Can I ask our notary that this be minuted? Thank you.

 The general debate on the agenda items is hereby closed. Thank you for this lively debate.

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Presentation
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 Unidentified Company Representative,    [1]
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 It is now no longer possible to grant powers of representation or to give voting instructions on the items of this year's agenda to the proxies appointed by the company neither via the Internet nor here in this hall. There it is. I was waiting for the signal. As you can tell from the acoustic signal, we are now about to begin the voting process.

 I would ask you to come to the assembly hall or not to leave it if possible. At the same time, I would like to remind you that votes can only be cast inside this hall, not in the foyer and not in the reception tent.

 We are now going to vote on the resolutions proposed by the executive board and the supervisory board under agenda items 3 to 8 and on the resolution proposed by the supervisory board only under agenda item 9.

 As published in the invitation to this Annual General Meeting in the German Federal Gazette on the 21st of March, 2017. Concerning agenda item 2, the appropriation of retained earnings, the revised resolution proposal on the appropriation of retained earnings published on the company's website as of May 2, 2017, is put to the vote. You received this together with your voting card block upon registration, and I will read it out again in a minute. The resolution proposals, including the revised resolution proposal on the appropriation of retained earnings, have been provided to you and have also been available throughout the entire meeting. So with your permission, I will therefore repeat only the salient points of the individual agenda items, including the proposed resolutions. The revised wording of the resolution proposed under agenda item 2 will be read out in full.

 No resolution needs to be passed under agenda item 1. Agenda item 2 concerns the resolution on the appropriation of retained earnings. At the time when the invitation to this AGM was published, the company held 8,060,090 treasury shares. Now the company holds 6,691,968 treasury shares, shares that do not confer any dividend rights to the company pursuant to Section 71b of the German Stock Corporation Act or Aktiengesetz. I think I mentioned that earlier. Due to the fact that conversion rights from the convertible bond issued by the company had to be serviced, the number of shares entitled to dividend payments increased to 202,524,218. As a result, and in contrast to the resolution proposal published in the invitation, the overall dividend payout has risen to EUR 405,048,436. The amount to be carried forward to the new financial year was reduced commensurately to EUR 23,859,911.49. Therefore, the executive board and the supervisory board proposed that the retained earnings reported in the adopted annual financial statements of adidas AG as December 31, 2016, amounting to EUR 628,908,347.49 be used as follows: to pay a dividend of EUR 2 for each no par value share carrying dividend rights, that is to say a total dividend payout of EUR 405,048,436; and to transfer EUR 200 million to other retained earnings and to carry forward the remaining amount of EUR 23,859,911.49 to the new financial year. The dividend to EUR per share

 (technical difficulty)

 Under agenda items 3 and 4, the management proposes that the actions of the members of the executive board and the supervisory board for the 2016 financial year be ratified. I wish to point out that pursuant to Section 136, Paragraph 1 of the German Stock Corporation Act, no member of either the executive board or the supervisory board may exercise any voting right on his or her own behalf or on behalf of any other person when the resolution on the ratification of his or her actions are passed for any shares which, in accordance with Section 136 of the German Stock Corporation Act, are subject to the exclusion of voting rights. No voting rights may be exercised by a third-party either. Thanks to organizational setup and technical checks and balances, we can ensure that any potential exclusions of voting rights are taken into account.

 Now agenda item 5, which concerns the resolution on the amendment of Section 18 of the Articles of Association regarding the compensation of the supervisory board members.

 Agenda item 6 concerns the cancellation of authorized capital pursuant to Section 4, Paragraph 2 of the articles, the creation of new authorized capital against contribution in cash, along with the authorization to disapply subscription rights as well as the commensurate amendment to the Articles of Association.

 Agenda item 7 concerns the resolution on the cancellation of the authorized capital pursuant to Section 4, Paragraph 3 of the Articles of Association on the creation of a new authorized capital against contributions in kind, along with the authorization to disapply subscription rights as well as the commensurate amendment to the articles.

 Agenda item 8 concerns the resolution on the cancellation of the authorized capital pursuant to Section 4, Paragraph 4 of the Articles of Association on the creation of a new authorized capital against contributions in cash, along with the authorization to disapply subscription rights as well as the respective amendment to the Articles of Association.

 Finally, the supervisory board proposes under agenda item 9a that KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin be appointed as auditors and group auditors for the 2017 financial year.

 Furthermore, under agenda item 9b, it is proposed that KPMG be appointed as auditors for a possible audit review of the 6-month financial report and any other interim financial reports for the 2017 financial year.

 Under agenda item 9c, the supervisory board proposes to appoint KPMG as auditors for a possible audit review for the 2018 financial year prior to the Annual General Meeting in 2018.

 In my capacity as Chairman of this meeting and pursuant to the inherent power vested in me by Section 22, Paragraph 2 of the company's Articles of Association, I have decided that the voting procedure be as follows: Voting will be carried out using the addition procedure. This means that we are only going to count the votes yes and no that are actually cast. For resolutions on the agenda items 2 to 4 as well as 9 of our Annual General Meeting today under the German Stock Corporation Act, a simple majority of the votes cast, that is the votes yes and no, is required. By contrast, the resolutions on agenda items 6, 7 and 8 require not only a simple majority of the votes cast but, in fact, a 3/4 majority of the share capital represented during the vote, that is 3/4 of the votes yes and no. For the resolution on agenda item 5, a simple majority of the share capital represented during the vote is required in addition to a simple majority of votes cast. I hope this has been clear.

 The votes may be cast by using the following 2 voting cards. First of all, voting card S1 for the agenda items 2 to 6, and the voting card S2 for the agenda items 7 and 9. The other cards that are part of your voting cards set are only kept in reserve. So please use these cards only if I explicitly ask you to do so.

 We will now show you on the projection screen the voting cards. We are asking you to use which are S1 and S2. We will keep showing you this picture during the entire voting process until the voting is finished.

 As you can see from the sample voting cards shown on the screen, each of the voting cards has boxes for each agenda item for voting yes or no. For agenda item 9, we have a subdivision into the subitems a, b and c. And for each paragraph, there is 1 box for a yes vote and for a no vote under each subitem. So if you would like to vote yes or no on the resolutions proposed by the executive board and supervisory board or by the supervisory board alone, please tick the appropriate box on your voting card. I must say that is a bit intricate here. If shareholders wish to abstain on individual agenda items, they can just leave the relevant agenda items empty on their voting cards. If a shareholder wishes to abstain on all items listed on a particular voting card, they do not need to submit that particular voting card. If a shareholder wishes to abstain on all agenda items put before the AGM today, they do not need to submit any voting card. If you tick both the yes and the no box next to 1 agenda item, your vote will be regarded as invalid. So you have to choose yes or no. When you cast your votes, please always use a blue or black pen. Please do not use a red pen for ticking the boxes because our card reader cannot read red ink. If you do not have a pen on you, the ladies and gentlemen collecting the votes have some spare pens for you.

 We will collect your voting cards on all agenda items in one go, that is, we will collect the voting cards S1 and S2 together. The voting cards will be counted electronically, supervised by the notary public. Please detach your voting cards carefully from the voting card block and please do not fold them.

 To speed up the voting process, with respect to the form and mode of voting, I determine the following: Any votes based on powers of representation and voting instructions issued by shareholders to banks, shareholders associations, persons or institutions that are equivalent to banks or shareholders associations or the proxies appointed by the company were recorded electronically before the start of this AGM. These electronically recorded votes are being checked or have been checked during the AGM by the relevant shareholder representatives, and they will be released in time for the vote. Ladies and gentlemen, we will now proceed to the voting on the agenda items 2 to 9.

 May I ask all shareholders who wish to participate in the voting to come to the main meeting on now so that you can hand in your voting cards. We will only collect voting cards in the main hall where the stage is. And we would appreciate it if you took part in the voting and would not leave the Annual General Meeting while the voting is in progress. Should you have to leave the meeting during the vote, I kindly ask you to deregister the exit counter and to inform our staff whether or not you appointed a proxy. I would now ask the tellers to collect the voting cards S1 and S2 now.

 Is there anybody who would still like to hand over their voting cards? Please raise your hands and let us know that you still want to vote. Voila. Anybody else? Thank you. Over there. And over there on the right is somebody. Yes or no? Right then.

 For the record, I state that all voting cards that were to be handed in have been collected, and I hereby close the voting. I will announce the results of the vote as soon as I have them. Normally, this process takes 15 to 20 minutes. Until we have the results, can I ask you to be a little patient? And we'll take a short break, and we'll be back in a few minutes' time.

 (Break)

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 Unidentified Company Representative,    [2]
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 So ladies and gentlemen, let's continue. Ladies and gentlemen, I now have the results of the vote on agenda items 2 to 9 and the update to the attendance list showing the attendance count at the time when the voting began.

 First of all, the update of the attendance count. It changed before the voting of the nominal capital of the company, which amounts to EUR 209,216,186 divided in the same number of no par value shares. We have here represented at the AGM EUR 135,207,121 no par value shares with the same number of votes, which translates into 64.63% of the nominal capital entitled to vote. I have signed the updated attendance count, and it is available for your inspection at the speaker's desk.

 I will pass this update to the notary public, and as I said, a printout is available for inspection at the speaker's desk. I will now announce the results of the vote.

 On the resolutions proposed under agenda items 2 to 9, pursuant to Section 130, Paragraph 2, Sentence 3 of the German Stock Corporation Act, when announcing the results for the individual agenda items, I would limit myself to stating only whether or not the required majority was reached to the extent that this is permitted by the law. The precise number of yes and no votes will be projected onto the screen, which you see behind me. We are also keeping available for you printouts of the voting results, and the results will also be available after the end of this meeting from the website of the company. With that, I'll come to the results of the voting.

 And just to remind you, the meeting has voted on the resolutions proposed by the executive board and the supervisory board or by the supervisory board only under agenda items 3 to 9 as published in the German Federal Gazette on the 21st of March, 2017. The revised resolution on the appropriation of retained earnings for both under agenda item 2 was put to the vote in the version available on the company's website since the 2nd of May, 2017, and which was read out to you today and which was also available in writing.

 So I'm now going to announce the result of the vote on each resolution individually as follows: For agenda item 2, resolution on the appropriation of retained earnings. The proposal has been approved with the required majority of the votes; agenda item 3, resolution on the ratification of the actions of the executive board members for the financial year 2016. The proposal has been approved with the required majority of the votes; agenda item 4, resolution on the ratification of the actions of the supervisory board for 2016 financial year. The proposal has been approved with the required majority of the votes; on agenda item 5, resolution on the amendment of Section 18 of the Articles of Association, the compensation of the supervisory board. The proposal has been approved with the required majority of the votes and of the represented nominal capital; on agenda item 6, resolution on the cancellation of the authorized capital pursuant to Section 4, Paragraph 2 of the Articles of Association on the creation of a new authorized capital against contributions in cash, together with the authorization to disapply subscription rights as well as on the respective amendments to the articles. The proposal has been approved with the required majority of votes and of the represented nominal capital; agenda item 7, resolution on the cancellation of the authorized capital pursuant to Section 4, Paragraph 3 of the Articles on the creation of new authorized capital against contributions in kind, together with the authorization to disapply subscription rights as well as on the respective amendment to the articles. The proposal has been approved with the required majority of the votes and of the represented nominal capital; agenda item 8, resolution on the cancellation of the authorized capital pursuant to Section 4, Paragraph 4 of the Articles of Association on the creation of a new authorized capital against contributions in cash, together with the authorization to disapply subscription rights as well as on the respective amendment to the articles. The proposal has been approved with the required majority of votes and of the nominal capital represented; agenda item 9, this was the appointment of the auditors and the group auditors for the 2017 fiscal year as well as of the auditor for a possible audit review of the first half year financial report and other interim financial reports for the 2017 financial year and for the fiscal year 2018 prior to the holding of the Annual General Meeting 2018; the proposals on the agenda items 9a, that is the appointment of the auditors and group auditors for 2017, agenda item 9b, the appointment of the auditors for a possible audit review of interim financial reports for 2017, and agenda item 9c, which is the appointment of the auditor for a possible audit review of interim financial reports for the 2018 financial year prior to the AGM 2018, have been approved, each with the required majority of the votes.

 The executive board and the supervisory board members would like to thank you for your confidence.

 With that, I declare this year's Annual General Meeting closed. I would like to thank all participants, both on the stage and behind the scenes, for supporting the holding of this Annual General Meeting.

 Ladies and gentlemen, I would like to thank you all for attending the Annual General Meeting of adidas AG today. With your presence and the contributions you have made, you have shown great interest in our company. I would also like to thank you for the pleasant atmosphere in which this meeting has been conducted.

 In conclusion, I would like to point out that our next Annual General Meeting of Adidas AG will take place on May 9, 2018, here in Fürth. Thank you very much, and see you in 1 year's time.




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