Adidas SPR2011 Performance

42PERFORMANCE COUNTS / Sustainability Progress Report 2011

Performance

ceo statement 3

our aPProacH to sustaInaBIlIty 5

HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

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TOTALEMEAAmericasAsia

• emea (13%)

• americas (20%)

• asia (67%)


PerforMAnCeSupply ChAiN

1. nuMber of suPPlier fACTories In the course of any calendar year there is a notable movement of factories, as suppliers are added or removed, because business entities are created, bought or sold by the adidas Group, or intermediaries, such as agents, are hired or their services are terminated. the data we are reporting here is a snapshot in time, a static point capturing the situation at the end of 12 months of these movements. Data is presented on a year-on-year basis, as at the 31st December.

In 2011, we worked with 1,232 independent factories (excluding factories of our licensees) who manufacture adidas Group products in 63 countries. 67% of the factories are located in the asia Pacific region, 20% in the americas and 13% in europe, middle east and africa (emea). over one quarter, or exactly 28%, of all these factories are in china.

the total number of supplier factories is almost the same as in 2010. It is estimated however that over the course of 2011 approximately 20% of the supply chain turned over, with supplier factories being added and exited in equal number.

Number of supplier factories (excluding own factories and licensee factories)

• 2009 775 168 185 1,128•2010 851 215 170 1,236• 2011 833 242 157 1,232

Supplier factories by region in 2011 (excluding own factories and licensee factories)

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


2. fACTories by CounTrycompared with year-on-year data for 2010, there was an almost unchanged number of total factories worldwide.

there are many reasons for the lack of change in total numbers of factories while increasing or decreasing at national levels.

the trend in Brazil is fewer new factories, but improved compliance by existing business entities with fuller disclosure of manufacturing locations. In asia Pacific region, Indonesia and vietnam grew marginally, a response to higher operating costs in china. In china, additional factories have been added as suppliers have built secondary facilities to access labour in more remote locations, while retaining their existing coastal manufacturing facilities as product development and management hubs.

there has also been a marked decline in the number of factories in other countries. In India, we have seen factory consolidation following the Group’s integration of local sourcing activities by brand adidas and reebok. there has also been rationalisation of the supply chain in south Korea, taiwan and thailand.

Number of supplier factories per country1 ASiA

Total number of factories

Country 2009 2010 2011

australia 10 3 4Bangladesh 9 6 7cambodia 8 16 13china 308 337 349Hong Kong 2 2 1India 77 99 84Indonesia 64 79 80Japan 63 59 60Korea 52 44 37laos 0 1 1macao 2 1 0madagascar 2 2 0malaysia 7 6 9mauritius 1 1 2new Zealand 5 1 1Pakistan 8 13 16Philippines 17 17 18singapore 1 1 1sri lanka 8 7 8taiwan 27 35 27thailand 41 45 38vietnam 63 76 77

Total Asia 775 851 833

AMEriCAS

Total number of factories

Country 2009 2010 2011

argentina 13 19 22Brazil 27 50 63canada 32 29 33chile 1 1 1colombia 2 3 4costa rica 2 0 0Dominican republic 1 1 2el salvador 3 4 4Guatemala 3 4 4Haiti 0 0 4Honduras 5 6 5mexico 12 19 20nicaragua 1 3 6Paraguay 1 1 2Peru 4 4 0united states 61 71 72

Total Americas 168 215 242

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


EMEATotal number of factories

Country 2009 2010 2011

Belarus 1 1 0Belgium 0 0 1Bosnia and Herzegovina 1 1 1Bulgaria 1 1 1czech republic 3 3 3Denmark 1 1 0egypt 3 2 2finland 1 1 1france 3 3 2Georgia 0 0 1Germany 19 23 27Greece 4 3 0Hungary 0 1 1Israel 2 1 1Italy 24 18 20Jordan 1 1 1lesotho 2 3 1lithuania 2 2 3macedonia 1 1 1moldova 1 1 1Poland 8 9 8Portugal 9 9 7romania 3 1 2russia 7 4 0slovakia 0 1 2slovenia 3 4 3south africa 19 13 10spain 15 15 11swaziland 2 2 0sweden 7 7 5switzerland 1 2 3tunisia 3 1 2turkey 16 13 17ukraine 2 2 0united Kingdom 19 20 19Zimbabwe 1 0 0

Total EMEA 185 170 157

glObAlTotal number of factories

Country 2009 2010 2011

total asia 775 851 833total americas 168 215 242total emea 185 170 157

Total global 1,128 1,236 1,2321 Independent supplier production sites of the adidas Group,

excluding licensee factories and own production sites.

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

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3. AdidAs grouP liCenseesIn 2011, the adidas Group worked with 44 licensees whose suppliers manufactured products in 269 factories in 45 countries.

the total number of licensee factories is lower than the number reported in 2010, but the number of sourcing countries remains similar. In some cases the factories producing for licensees of cosmetics, watches and glasses, are very stable, highly capitalised, and specialised manufacturing facilities. a majority of the licensees are however apparel producers and as with the adidas Group’s own direct sourcing arrangements licensees see expansion and contraction of the numbers of factories throughout the course of a year. for this reason, the data we are reporting here is a snapshot in time, a static point capturing the situation at the end of 12 months of these movements.

adidas group licensees

2009 2010 2011

licensees 41 45 44factories producing for licensees1

288 307 269

Production countries 44 45 451 this might include factories which produce both, for the adidas

Group directly as well as for licensees/agents.

adidas and reebok licensees divided by product range in 2011

AuDiTS AND TrAiNiNg

4. nuMber of fACTory AudiTs/visiTs And TrAining sessions During 2011, 1,591 factory visits (including 1,501 factory audits) were undertaken for management and worker interviews, reviews of policies, practices and documents, facility inspections and training sessions at different levels in our supply chain. the sea team conducted 170 training sessions and workshops for suppliers, licensees, workers and adidas Group employees.

Number of factory audits/visits and trainings*

•factory audits/visits 1,592 1,451 1,591•Trainings 216 193 170* Including multiple audits/visits in the same factory conducted by the adidas Group sea team and external monitors, but excluding fla audits.

Including audits in licensee factories; visits involving management and worker interviews, document review, facility inspections and trainings on-site. audit data for 2011 includes environmental audits conducted at supplier sites; these were not recorded in previous data sets.

• footwear (5%)

• Watches (2%)

• Glasses (2%)

• cosmetics (2%)

• Hardware (30%)

• apparel (59%)

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

• fundamental (45%)

• Performance (20%)

• sustainability (35%)


5. nuMber of TrAining sessions divided by region And TyPefor 2011, there were fewer training sessions conducted by sea than in the previous two years, but the number of training participants increased significantly, nearly 800 people more. the number of fundamental and performance training sessions was reduced, whereas sustainability training sessions increased slightly. reasons for this were:

1. there were less individual but more group (i.e. more than one supplier) training sessions undertaken that offer both higher efficiencies but also the added advantage of cross-learning and best practice sharing among suppliers.

2. Due to longer term and more mature business relationships, the demand for more sophisticated and advanced trainings (sustainability training sessions) was achieved.

Number of training sessions divided by region and type1

Type and number of training

fundamental2 Performance3 sustainability4 Total

region 2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 20115

asia 47 33 34 48 33 31 32 33 53 127 99 118americas 53 55 32 13 18 4 1 7 5 67 80 41emea 19 12 10 0 0 0 3 2 1 22 14 11Total 119 100 76 61 51 35 36 42 59 216 193 1706

1 trainings conducted for suppliers, workers, licensees, agents and adidas Group employees.2 fundamental training covers: Workplace standards & sea introduction; ffc training; sea policies & soPs.3 Performance training covers: specific labour, health, safety and environmental issues.4 sustainability training covers: sustainable compliance guideline & KPI improvement; factory self-audits (factory internal audits).5 In 2011, nearly 3,000 people participated in these trainings.6 Including 83 group training sessions, i.e. trainings with participation of more than one supplier, business entity or licensee.

Supplier trainings by type in 2011

6. nuMber of AudiTs divided by region And TyPeIn 2011, the sea team conducted 1,501 social compliance and environmental audits (including external monitoring audits). the total number of Initial assessments – the first approval stage for new entry factories – and Performance audits for our established suppliers was slightly higher than in 2010. as a new category, we added the number of environmental audits conducted at supplier sites. already in 2010 more than 100 environmental audits and verification visits took place. We recorded and disclosed them separately in last year’s report but added them in the below table for reasons of completeness and transparency. In order to not change all tables and graphs that were published last year, we decided to exclude the 2010 environmental data from the total 2010 number.

In addition to these audits, suppliers’ sites were the subject of multiple other visits by compliance staff to discuss specific remedial issues, to follow up project work or conduct training sessions.

meeting the high demand for Initial assessments remained a challenge in 2011, particularly in asia Pacific where new factories were proposed in more remote locations and a wide range of countries. there was a total of 476 Initial assessments, of which about 80% were in asia, with china accounting for nearly 50% of all assessments conducted. overall 20.8% of candidate factories were rejected either out rightly, or for failure to remediate threshold issues in a timely manner.

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

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2011201020092008


But this number also includes factories that were rejected but given a second chance to remediate non-compliances. at the end of 2011, these factories were neither rejected nor accepted but in a status of ‘rejected with a second visit’. see also data on ‘termination and rejections’.

the rejection rate reported during the last three years actually represents a much lower figure than our real first time rejection rate due to the reporting limitations of our compliance database, the ffc. therefore, in 2011, we were only able to look at the final designation of the factories and not include those who had a preliminary rejection but successfully completed a remediation and were subsequently sea accepted. We know that we have many factories which had been “sea rejected with second visit” after Initial assessment. In 2012, we will be able to accurately report a “first time rejection” rate.

audits conducted by external monitors were commissioned by adidas Group entities, including licensees with indirect sourcing models.

In total, there was audit coverage of 61% of all active suppliers in 2011, which signifies an increase by 3% compared to 2010. the audit coverage of all active suppliers in region asia increased by 3% to a total of 77%, with higher risk countries like china, India, Indonesia, thailand and vietnam showing more than 80% audit coverage.

our monitoring programme is characterised by a risk management approach – this means that we explicitly do not envisage audit coverage of 100% in every country where our factories are located.

Number of audits divided by region and type

initial Assessments1

Performance Audits2

environmental Audits

Total

region 2009 2010 2011 2009 2010 2011 20104 2011 2009 20104 2011

asia 406 355 381 853 788 790 (118) 114 1,261 1,142 1,285americas 49 59 50 63 78 75 0 0 112 137 125emea 28 33 45 47 37 46 0 0 75 71 91Total3 483 447 476 963 903 911 (118) 114 1,448 1,350 1,5011 every new supplier factory has to pass an Initial assessment to prove compliance with the Workplace standards prior to order placement.2 audits conducted in approved supplier factories.3 Includes audits done in licensee factories. In addition, there was a considerable number of full environmental assessments conducted

for selected suppliers in asia.4 the number of environmental audits was recorded and disclosed separately in 2010; therefore it is not included in the total number of

audits for 2010.

Number of audits in supplier factories

• sea team 861 948 844 861•ExternalMonitor 400 500 506 640• Total 1,261 1,448 1,350 1,501

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

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EMEAAmericasAsia


initial Assessments by CountryAsia Americas eMeA

Bangladesh 14 argentina 7 Belarus 2cambodia 7 Brazil 5 Bosnia and Herzegovina 1china 234 canada 2 egypt 9India 19 costa rica 1 Georgia 1Indonesia 27 Dominican republic 2 Jordan 1Japan 2 el salvador 3 Kenya 1Korea 8 Guatemala 4 russia 1malaysia 4 Honduras 2 south africa 1mauritius 2 mexico 12 tunisia 1Pakistan 7 nicaragua 5 turkey 10Philippines 9 Paraguay 5 ukraine 1sri lanka 2 united states 2 united Kingdom 16taiwan 9thailand 7 vietnam 30 Asia Total 381 Americas Total 50 EMEA Total 45

7. nuMber of AudiTs ConduCTed in liCensee fACToriesthe lower number of Initial assessments indicates a fewer number of new entries to the supply chain and as shown in section 3, the total number of factories making for licensees has shrunk by a little over 12% between 2010 and 2011. although the number of Performance audits declined compared to 2010, these represented a higher percentage of licensee suppliers being subject to more in-depth compliance work.

Number of audits conducted in licensee factories1

initial Assessments2

Performance Audits3

environmental Audits4

Total

region 2009 2010 2011 2009 2010 2011 2011 2009 2010 2011

asia 97 58 54 151 171 142 9 248 229 205americas 7 13 6 8 18 15 0 15 31 21emea 5 6 5 5 10 9 0 10 16 14Total 109 77 65 164 199 166 9 273 276 2401 this might include factories which produce both, for the adidas Group directly as well as for licensees/agents.2 every new factory has to pass an Initial assessment to prove compliance with the Workplace standards prior to order placement.3 audits conducted in approved factories.4 environmental audits in licensee factories were recorded and disclosed as such for the first time in 2011.

Number of audits in licensee factories by region

• 2009 248 15 10•2010 229 31 16• 2011 205 21 14

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


Number of audits in licensee factories by audit type

• Ia 122 109 77 65•PA 59 164 199 166• ea 0 0 0 9• Total 181 273 276 240

8. key PerforMAnCe indiCATor (kPi) AssessMenT And C-rATingWe audit our suppliers against our standards and rate them according to their performance. We use an innovative way to rate the supplier on its ability to deliver fair, healthy and environmentally-sound workplace conditions in an effective manner. the following table shows the average audit score by unit of measure for those active core suppliers that were rated against the six units of measure in the KPI to date. each unit of measure is scored out of 100%.

In general, the units of measure showed higher scores achieved in 2011, especially in management commitment/responsiveness and management systems. this illustrates the take-up from our engagement with suppliers to implement human resources and health & safety management systems in their workplaces.

kpi Assessment and C-ratingkPi unit of Measure – Average score in % 2009 2010 2011

management commitment and responsiveness 43.43 43.61 48.51management systems 47.59 48.81 52.09Worker-management communication and industrial relations 64.04 64.86 67.38compliance training for workers and management 59.25 58.49 61.55transparency in communication and reporting 70.46 70.29 72.29compliance performance 57.63 58.17 59.50KPI cumulative score 47.41 47.28 50.37

In 2010, we have adjusted our c-rating system for factory assessment, raising the bar for factory performance and increasing the 2c threshold to an average score of 30% or more. the revised clustering for our c-ratings is shown below.

kPi score (%) new C-rating

0-29 1c30-59 2c60-79 3c80-89 4c90-100 5c

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

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the bar graph below shows comparable data for the past three years using the new rating classification. the number of factories that were the subject of KPI assessments to date in each specific year is indicated in the footnote. for 2011, we see that from 2005, where we started to assess suppliers with the KPI assessment tool, to date more than 571 active suppliers were KPI-assessed.

In 2011, sea increased the issuance of warning letters to non-performing suppliers, where serious and ongoing issues were not resolved despite close engagement. a warning letter has an immediate negative impact to a factory’s KPI score, hence the increased number of 2c suppliers overall. there was some improvement by poorly performing 1c suppliers, and this too contributed to an increased number of factories graded 2c.

the total number of 3c and 4c factories increased, but in percentage terms this is masked by the number of new entry factories that received low initial KPI scores in the 2c range.

a parallel environmental KPI tool has been developed and is being tested. from 2012 we will begin to report environmental ratings of tier 1 manufacturing operations and tier 2 material suppliers.

percentage of kpi-assessed factories by C-rating*

• 2009 21% 40% 29% 9% 1%•2010 19% 48% 25% 7% 1%• 2011 8% 53% 28% 9% 2%* number of factories that were KPI-assessed to date: 2009 (347), 2010 (547) and 2011 (571).

9. indePendenT flA AudiTssince joining the fla in 1999, more than 280 Independent external monitoring (Iem) audits and verification visits have been conducted at adidas Group suppliers. the number of conventional independent monitoring visits conducted by fla accredited monitors has gone down because more of the conventional Iem requirements of the fla have been redirected to an engagement in value-added fla projects focused on reducing and eliminating chronic non-compliance issues or improving monitoring methodologies.

In 2011, fla activities included one independent external monitoring visit and four verification visits. seven factories participated in one fla special project in asia and the americas. these so-called re-directed audits are fla participating company engagements in specific project work that addresses resolution of chronic compliance issues in the global workplace and the development of new auditing tools and methodologies, such as the sustainable compliance Initiative, which will standardise labour, health & safety monitoring practices and content across a number of fla participating brands. re-directs are substituted for independent external monitoring visits to factories. this substitution option is only available to fla accredited programmes. the term derives from the ‘re-direction’ of Iem fees to financially support specific project work by the fla to address chronic compliance issues.

independent FlA Audits1

flA year Period No. of Audits

4th2 Jan – Dec 2005 305th Jan – Dec 2006 436th Jan – Dec 2007 157th Jan – Dec 2008 198th Jan – Dec 2009 169th Jan – Dec 2010 16

10th Jan – Dec 2011 121 as part of the fla membership; the numbers include Independent

external verification audits.2 Including audits conducted for reebok before it was acquired by

the adidas Group in 2006.

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


ENFOrCEMENT

10. wArning leTTers Warning letters are an essential part of our enforcement efforts and are triggered when we find ongoing serious non-compliance issues that need to be addressed by our suppliers. In 2011, we issued a total of 48 warning letters across eight countries.

the largest number of warning letters continued to be issued in asia, where nearly 70% of all supplier factories are located. compared to the previous year, the number of first warning letters has dropped from 47 to 41 but the number of second warning letters increased from 2 to 7. this reflects sea’s overall efforts in 2011 to raise the bar on supplier performance, with reduced tolerance for ongoing non-compliances. suppliers who receive second warning letters have one step left before notification of possible termination of the manufacturing agreement and they receive focused monitoring activity by sea.

It is difficult to generalise as to the grounds for a warning letter, as this may be issued based on a single non-conformance which is unresolved, or multiple breaches of our standards. the range of issues that resulted in warning letters in 2011 included poor management commitment, excessive working hours, non-payment of wages and benefits, poor electrical, fire or chemical safety, poor communication and transparency problems.

Number of warning letters issued to adidas group suppliers*1st

warning2nd

warning3rd and final warning –> recommended termination

Total warning letters

Country 2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

argentina 1 – – – – – – – – 1 – –Bangladesh 1 1 4 – – – – – – 1 1 4cambodia 1 2 2 – – 1 – – – 1 2 3china 10 18 16 2 – 3 – 1 – 12 19 19Guatemala 1 – – – – – – – – 1 – –India 7 9 7 2 1 – – – – 9 10 7Indonesia 2 4 5 – 1 2 – – – 2 5 7Korea – 1 – – – – – – – – 1 –mexico – 2 1 – – – – – – – 2 1nicaragua – – 1 – – – – – – – 1Pakistan – 1 – – – – – – – – 1 –Peru 1 1 – – – – – – – 1 1 –Philippines 4 – – – – – – – – 4 – –sri lanka – 1 – – – – – – – – 1 –syrian arab rep. – 1 – – – – – – – – 1 –thailand 1 – – – – – – – – 1 – –vietnam 5 6 5 – – 1 – – – 5 6 6Total 34 47 41 4 2 7 0 1 0 38 50 48* Including warning letters issued by licensees and agents. But excluding warnings to main suppliers for the non-disclosure of subcontractors,

which is issued either directly through business entities, or by the adidas Group legal department where there is a breach of contract obligations under a manufacturing agreement.

11. TerMinATions And rejeCTions

We work closely with our suppliers to help them improve their performance. However, in the past where we have faced situations of severe or repeat non-compliance we have terminated our business relationship with suppliers. In 2011, we terminated agreements with thirteen suppliers for compliance reasons.

We also work closely with Global operations and other business entities to pre-screen potential new suppliers. our so-called Initial assessments are uncovering threshold or zero tolerance issues. a total of 476 Initial assessments were conducted in 2011. on 31 December 2011, we identified that during the reporting period 99 factories have been either rejected directly after an Initial assessment due to zero tolerance issues, or they were in a status of “rejected with a second visit” at the end of 2011, which means they were rejected after the Initial assessment but given the chance to remediate non-compliance issues in a specific timeframe. suppliers who have threshold issues (that is, serious but remediable non-compliances) are given three months to remediate those issues prior to re-auditing for final sea acceptance. as a result, at the end of 2011, 20.8% of potential new supplier factories were rejected for threshold or zero-tolerance non-compliance issues. as in previous years, china dominates the number of new supplier initial assessments and corresponding rejection rates are high. In India, newly disclosed or proposed suppliers were also subject to rigorous assessments and due to weak remedial efforts resulting in a high rejection rate.

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


the rejection rate reported during the last three years actually represents a much lower figure than our real first time rejection rate due to the reporting limitations of our compliance database, the ffc. therefore, in 2011, we were only able to look at the final designation of the factories and not include those who had a preliminary rejection but successfully completed a remediation and were subsequently sea accepted. We know that we have several factories which had been “sea rejected with second visit” after Initial assessment. In 2012, we will be able to accurately report a “first time rejection” rate.

rejections by region after initial Assessment due to compliance problems

• 2009 77 5 7 89•2010 72 6 15 93• 2011 82 10 7 99

Number of business relationship terminations/rejections after initial Assessment due to compliance problems ASiA

no. of terminations per country no. of rejections after iA per country

Country 2009 2010 2011 2009 2010 2011

Bangladesh 1 – – 6 3 8cambodia – – – 3 5 1china 7 – 2 49 43 56India – – 1 1 13 5Indonesia – – 6 4 1 2Korea – – – 2 – 2malaysia – – – 1 – 1Pakistan – – – – 2 1Philippines – – – – – 1sri lanka – – – 2 – –thailand – – – 1 2 –vietnam – – – 8 3 5

AMEriCASno. of terminations per country no. of rejections after iA per country

Country 2009 2010 2011 2009 2010 2011

Brazil 1 – – 1 1 1canada – – – 2 – –Dominican republic – – – – 1 –el salvador – – – 1 – –Guatemala – – – – 4 –Honduras – – – – – 1mexico – – 1 1 – 6nicaragua – – – – – 2

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

0

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40

60

80

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120

TOTALEMEAAmericasAsia


EMEAno. of terminations per country no. of rejections after iA per country

Country 2009 2010 2011 2009 2010 2011

Belarus – – – – 1 1egypt – – – 3 3 3Jordan – – – 1 2 1russia – – – – 3 –south africa – – – 2 – –turkey – – 3 – 5 2ukraine – – – – 1 –Zimbabwe – – – 1 – –

glObAlno. of terminations per country no. of rejections after iA per country

2009 2010 2011 2009 2010 2011

Global 9 0 13 89 93 99

ENvirONMENT

12. CerTifiCATions obTAined by AThleTiC fooTweAr suPPlier siTes ProduCing for The inTernATionAl MArkeT

We have limited control over the direct environmental impacts of the manufacturing process and how our suppliers act. the best way to influence the environmental impacts at our suppliers’ factories is to encourage the introduction of environmental management systems, and we have made implementing such a system mandatory for all our core suppliers. achieving certification to a management system requires factory managers to plan, manage and review their own environmental performance.

In 2011, we worked with 27 athletic footwear suppliers who are certified in accordance with the international environmental management standard Iso 14001 and/or the workplace health & safety management standard oHsas 18001. these suppliers produced around 84% of the adidas Group’s global athletic footwear sourcing volume.

Certifications obtained by athletic footwear supplier sites producing for the international market1

number of fw suppliers iso 14001 ohsAs 18001

Country 2009 2010 2011 2009 2010 2011 2009 2010 2011

argentina 2 1 1 – – – – – –Brazil 2 2 2 – – – – – –cambodia – 1 1 – – – – – –china 7 14 13 7 10 10 7 10 10Germany2 1 1 1 1 1 1 – – –India 1 1 1 1 1 1 1 1 1Indonesia 6 9 8 3 4 6 3 4 6Italy3 1 1 1 – – – – – –Philippines 1 – – – – – – – –thailand 1 – – – – – – – –vietnam 10 10 11 7 8 9 7 8 9TOTAl 32 40 39 19 24 27 18 23 261 excluding factories from the rockport business segment and licensee factories.2 the site is subject to regular occupational health & safety inspections by authorities, although it does not hold a formal oHsas 18001 certification.3 Health & safety management system in place that is regularly inspected by local authorities.

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

51%

54%

57%

60%

63%

66%

69%

72%

OHSAS 18001ISO 14001


Certification of athletic footwear suppliers producing for the international export market in %

• 2009 59% 59%•2010 60% 60%• 2011 69% 67%

13. freighT TyPes used To shiP AdidAs And reebok ProduCTsIn 2011, we continued to register the environmental impact related to the transport of our goods. the relative use of air freight was slightly reduced for apparel and Hardware, but increased slightly for footwear.

Freight types used to ship adidas and reebok products1

% of product shipped 2009 2010 2011

Appareltruck 14 15 13sea freight 81 76 80air freight 4 8 7sea and air freight 1 1 0

hardware2

truck 1 2 2sea freight 97 95 96air freight 2 3 2sea and air freight 0 0 0

Footweartruck 2 1 1sea freight 97 97 96air freight 1 2 3sea and air freight 0 0 01 figures expressed as a percentage of the total number of products transported. Data covers products sourced through Global operations,

excluding local sourcing. Data for 2011 refers to adidas and reebok products, while in earlier years only adidas brand was covered.2 accessories and gear.

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


14. green CoMPAny dATA following our vision to become a zero emission company, the Green company Initiative was launched in 2008. this Initiative aims at improving the environmental performance at our own operations around the world. to achieve this goal, specific Group-wide targets were set in 2009 that focus on our administration offices, our distribution centres and manufacturing sites that we own, lease or rent.

since 2008 we have been specifically measuring the environmental footprint of our own locations and we have steadily increased the number of locations covered by our programme. a new data environmental reporting and management tool for our own sites and for our suppliers has been introduced for the first time for the 2011 reporting period. all data collected is automatically compared with the data reported in previous years. furthermore, the tool can be used to calculate KPIs and to follow up on targets, and it includes a library that features best practice solutions.

the 2008–2010 reports, including their complete data sets from reporting locations, have been migrated to the new reporting tool which enables us to:

• track and evaluate progress of our performance

• follow up and report on our targets

• learn from best practice.

In 2011, we reduced the number of sites that were included in the reporting. the original goal of having around 70–80% coverage of all in-house emissions remains unchanged. the locations that have been removed from reporting are sites that were either closing down in 2011, contributed less than 0.5% of total emissions or were located in buildings where the limitations of their tenancy contract meant they could not calculate specific resource use or emissions.

It was scheduled to publish the detailed Green company performance review highlighting the achievements and progress of the Group’s Green company programme together with the entire sustainability Progress report 2011. When reviewing the environmental data sets as submitted by the business entities through the new environmental data tool, we noticed a range of deviations in data sets from previous years that have required us to conduct an accurate analysis to identify the root causes.

at the cut-off date for completion of the sustainability Progress report 2011, this review and analysis was still ongoing. so, the 2011 Green company performance review will be published at a later date in the year 2012. the review will be posted in the Green company section of our corporate website at www.adidas-group.com/en/sustainability/environment/our_Green_company_programme/default.aspx

EMplOyEES

15. eMPloyee sTATisTiCs

global employee base continues to grow

on 31 December 2011, the Group had 46,824 employees, which represents an increase of 10% versus 42,541 in the previous year. this development is primarily related to the expansion of the Group’s own-retail activities in emerging markets. an increase in the sales force as well as additional hirings within our Global operations function, in order to support the Group’s sales growth, also contributed to the overall increase in the number of employees. furthermore, a change in the internal definition of full-time equivalents also impacted this development.

on a full-time equivalent basis, our Group had 40,637 employees on 31 December 2011 (2010: 36,444). Due to the high share of employees working on a part-time basis in the retail segment, this figure is lower than the figure reported on a headcount basis.

at the end of 2011, 23% of our Group’s staff were employed in Western europe (2010: 23%), 33% in european emerging markets (2010: 34%), 25% in north america (2010: 24%), 4% in Greater china (2010: 4%), 9% in other asian markets (2010: 9%) and 6% in latin america (2010: 6%).

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


key Employee Statistics

index/reporting unit 2009 2010 2011

total number of employees 39,596 42,541 46,824

total employees (in %) male 50% 52% 50%female 50% 48% 50%

management positions held by (in %) male 69% 72% 73%female 31% 28% 27%

average age of employees (in years)1 31 33 30average length of service per employee (in years) 4.1 4 3.5annual training hours by employee (in hours) 7.3 13 171 at year-end

Total number of employees

20000

25000

30000

35000

40000

45000

50000

201120102009

total number of employees

39,596 42,541 46,824

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

16. heAlTh & sAfeTy sTATisTiCs for our MAin AdMinisTrATion offiCes, ProduCTion siTes And disTribuTion CenTres2009 2010 2011

Administration offices

injuries with >1 lost day

lost days due to injury

number of employees



number of employees



Number of employees

region EMEAadidas Group Headquarters – Wos Herzogenaurach, Germany 20 136 1651* 9 52 1972* 18 108 2354*adidas Group Headquarters – aDP Herzogenaurach, Germany 10 25 1146* 3 37 1148* 9 11 907*adidas Group Headquarters – WoGIt Herzogenaurach, Germany 2 4 568* 0 0 580* 3 11 801*adidas factory outlet, Herzogenaurach, Germany 3 11 150 4 24 150 1 18 150adidas office, amsterdam, netherlands n.a. n.a. n.a. n.a. n.a. n.a. 2 3 427adidas office, stockport, united Kingdom n.a. n.a. n.a. 0 0 478 0 0 479adidas office, landersheim, france n.a. n.a. n.a. 1 5 346 4 187 355adidas office, monza, Italy n.a. n.a. n.a. 2 65 260 13 72 287adidas office, Zaragoza, spain n.a. n.a. n.a. 2 17 220 1 33 230adidas office, moscow, russia n.a. n.a. n.a. 9 153 847 5 75 741region Americasadidas office, Portland, usa 10 112 850 0 0 850 0 0 781reebok Headquarters, canton, usa 0 0 1120 2 12 1153 1 4 1168taylormade-adidas Golf Headquarters, carlsbad, usa 4 58 877 18 47 870 13 7 948adidas Group administrative service Building 3, spartanburg, usa 0 0 180 0 0 193 0 0 0adidas office, Woodbridge, canada n.a. n.a. n.a. 0 0 170 0 0 192adidas office Baueri, Brasil n.a. n.a. n.a. 4 811 151 5 64 221region ApACadidas office, shanghai, china 0 0 600 0 0 490 0 0 580adidas office, taikoo shing, Hong Kong n.a. n.a. n.a. 2 65 362 0 0 397adidas Hong Kong ltd. office, shatin, Hong Kong n.a. n.a. n.a. n.a. n.a. n.a. 0 0 135adidas office, Gurgaon, India n.a. n.a. n.a. n.a. n.a. n.a. 0 0 250adidas office, seoul, south Korea n.a. n.a. n.a. 0 0 305 0 0 280adidas office, taipei, taiwan n.a. n.a. n.a. 0 0 110 0 0 128adidas office, singapore, singapore n.a. n.a. n.a. 0 0 199 0 0 207Total Administration Offices 49 346 3777 56 1288 7154 75 593 7956

* number of workplacesn.a. = not applicable as not included in reporting

58pErFOrMANCE COuNTS / sustainability Progress report 2011

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


own Production sites



number of employees



number of employees



Number of employees

region EMEAadidas footwear factory, scheinfeld 1, Germany 2 18 134 5 43 155 1 1 190adidas footwear factory scheinfeld 2, Germany 9 57 67 5 44 67 7 29 89reebok-ccm Hockey factory, tammela, finland 2 7 64 1 3 72 2 6 67region Americassports licensed Division factory, Indianapolis, usa 12 181 823 52 23 1204 26 565 1210sports licensed Division factory, mattapoisett, usa 0 0 106 0 2 108 1 120 104sports licensed Division factory, cedar rapids, usa 2 141 108 2 19 112 1 6 150reebok-ccm Hockey factory, st.Jean, canada 12 449 127 10 773 127 5 709 138reebok-ccm Hockey factory, st.Hyacinthe, canada 2 23 150 8 10 140 0 0 154adidas canada assembly factory, Brantford, canada 2 8 64 1 7 76 0 0 63region ApACadidas apparel factory, suzhou, china 0 0 600 0 0 243 3 38 249Total Own production Sites 43 884 2243 84 924 2304 46 1474 2414



ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


distribution Centres



number of employees



number of employees



Number of employees

region EMEAadidas Distribution centre, uffenheim, Germany 0 0 250 16 147 250 12 73 190adidas Distribution centre, caspe, spain n.a. n.a. n.a. 6 81 215 2 26 220adidas Distribution centre, Dettwiller, france n.a. n.a. n.a. 1 5 21 0 0 20adidas Distribution centre, manchester, united Kingdom n.a. n.a. n.a. 2 6 130 1 2 157adidas Distribution centre, Klimovsk, russia n.a. n.a. n.a. 1 67 400 0 0 455adidas Distribution centre, obukhiv, ukraine n.a. n.a. n.a. 0 0 30 0 0 44adidas Distribution centre, canot, Israel n.a. n.a. n.a. 0 0 28 0 0 40reebok-ccm Hockey factory, malung, sweden 0 0 110 1 4 76 0 0 78region Americasadidas Distribution centre 1 (apparel), spartanburg, usa 1 2 725 4 64 808 22 225 1012adidas Distribution centre 2 (footwear), spartanburg, usa 0 0 50 5 175 808 37 615 1010reebok-ccm Hockey Headquarters and Distribution centre, montreal, canada 39 1283 464 22 1612 179 22 1053 179adidas Distribution centre, adams Boulevard, Brantford, canada n.a. n.a. n.a. 1 7 114 3 18 104adidas Distribution centre, embu, Brasil n.a. n.a. n.a. 9 299 72 1 1 135adidas Distribution centre, Pudahuel, chile n.a. n.a. n.a. 20 107 120 18 105 128adidas Distribution centre, cuautitlan Izcalli, mexico n.a. n.a. n.a. 22 246 205 24 288 246region ApACadidas Distribution centre, suzhou, china 8 54 485 3 9 180 9 65 125adidas Hong Kong ltd., Distribution centre, Kwun tong, Hong Kong n.a. n.a. n.a. 1 8 290 2 46 41Total Distribution Centres 48 1339 2084 114 2837 3926 153 2517 4184

Total 140 2569 8104 254 5049 13384 274 4584 14554



ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42


COMMuNiTy AFFAirS

17. CoMMuniTy AffAirs sTATisTiCsIn 2011, we saw a further increase of donation requests compared to the previous year and 2009. Donation requests significantly varied in nature and purpose. all requests were carefully reviewed on the basis of the adidas Group corporate Giving Guidelines. In particular, we supported those requests which were in line with our policies and guidelines.

compared to 2010, the number of supported projects increased by 28%. the amount of product donations increased by 66%, in particular to support requests from aid organisations for product shipments that were used for relief efforts.

Community Affairs statistics*donation

requests receivedTotal number

of projects supported

region 2009 2010 2011 2009 2010 2011

emea 1,564 1,792 1,748 208 191 206latin america 150 131 69 3 3 11north america 5,784 6,429 7,763 569 733 983asia Pacific 108 69 112 78 38 38Total 7,606 8,421 9,692 858 965 1,238

units of products donated

volunteer hours

region 2009 2010 2011 2009 2010 2011

emea 17,246 53,545 67,240 4,213 5,234 3,911latin america 29,000 2,800 3,639 1,020 700 920north america 143,201 133,500 362,007 1,838 3,514 2,718asia Pacific 38,112 79,664 15,448 3,737 7,020 5,489Total 227,559 269,509 448,334 10,808 16,468 13,038* numbers include: brand activities, corporate activities, reebok foundation, adi Dassler fund.

ceo statement 3


HIGHlIGHts 2011 9

suPPlIers 12

envIronment 19

emPloyees 32

2012 mIlestones 36

Performance 42

Adidas SPR2011 Performance

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