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Ticker: ETR: ADS Potential: 26.7% Price: 180.60
52Week High/Low
Market Profile
188-129.15
xxxEquity Report
Avg. Volume (3M) 683
Shares Out. 209.22 M Business Overview
Market Cap. 37 785 M The Adidas AG share is listed on the "Deutsche Brse" stock exchange in Frankfurt. The
Dividend Yield 1.08% stock is part of the DAX-30 index, which includes only the largest German companies
BETA 0.84 listed. It is the second largest sports manufacturer and biggest seller around the world and
EPS 5.59 the largest network in Europe. Beside sports goods, the company is also associated with
PER 32.31 the manufacture of clothing and wears accessories like shirts, bags, watches, belts etc.
Closing Price 180.60 Although Adidas is a global brand, it is facing fierce competition from other brands such
Nike and Under Armor. Other smaller competitors are: Puma, Umbro, Kappa, Warrior
Source: Thomson Reuters, Bloomberg
Sports. Besides this, there is regular competition from local players, substitutes and mar-
Share Price ket penetrators.
The strategy - Creating the New - is the attitude that leads the companys next five-year
plan into the future an exciting future, because the industry is growing in size and sco-
pe and will continue to do so. In fact, the sporting goods industry is growing faster than
most other industries, including consumer electronics.
Key Ratios 2016 2017E 2018F 2019F 2020F 2021F
Source: Thomson Reuters Eikon Total Revenues 19 291 21 392 23 788 26 508 29 616 33 168
Net Profit 936 1 021 1 204 1 424 1 796 2 013
EV/EBITDA / PER EBITDA Margin 9.3% 9.7% 10.1% 10.5% 11.3% 11.1%
Return on Assets 9.3% 8.9% 9.5% 10.4% 11.9% 12.2%
Return on Equity 14.5% 15.4% 16.3% 17.1% 18.7% 18.2%
Cash Cycle 66 68 68 68 68 68
Debt/Assets 57.4% 60.7% 60.6% 59.3% 57.1% 54.6%
Fin. Leverage 1.34 1.54 1.54 1.46 1.33 1.20
Interest Coverage 32.7 37.4 27.2 24.1 26.3 27.2
PER 51.2 48.4 42.7 37.4 30.8 28.4
Source: Team Estimates EV/EBITDA 422 602 656 683 716 731
NetDebt / EBITDA 4.85 4.95 4.71 4.37 3.79 3.60
ROC / WACC Source: Team Estimates
Investment Analysis
I issue a Buy recommendation based on the analysis done. Adidas AG at the current pri-
ce of 180.60 is undervalued based on the DCF estimated share value of 236.21.
Director
The Information represents our view as of the date hereof and is subject to change and/or withdrawal at any time with-
out notice. The Information may be based on (a) data that may no longer be current, (b) estimates that may involve high-
ly subjective assessments and (c) models that may change from time to time and be different from the assumptions and
models used by other persons.
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ing and transaction costs, credit considerations, market liquidity or bid-offer spreads.
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tions, modelling or back-testing used to develop such Information), which may have been developed based upon trade
and statistical services or other third party sources. Any data on past performance, modelling or back-testing contained
herein is no indication as to future performance.
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The value of any investment may fluctuate as a result of market changes.
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