Operator: Ladies and gentlemen, welcome to the adidas AG Full Year 2025 Conference Call and Live Webcast. I am Maura, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Sebastian Steffen, Senior Vice President, Investor Relations, Corporate Communications and Corporate Strategy. Please go ahead.

Sebastian Steffen: We just realize it's a long title. Thanks very much, Maura. Good evening, good afternoon, good morning, everyone, wherever you're joining us today, and welcome to our full year 2025 conference call. Our presenters today are our CEO, Bjorn Gulden; and our CFO, Harm Ohlmeyer. I know that there's a lot to talk about today, and we will kick it off in a second with Bjorn and Harm, who will provide the details for 2025. They will be sharing with you our operational and financial highlights for last year, present our outlook for 2026 and of course, also talk about our outlook for '27 and '28. [Operator Instructions] And now before I hand over to Bjorn, we will, of course, kick it off with a video. [Presentation]

Bjorn Gulden: Yes. Hello also from my side. I'm sure you have spent some time looking at our numbers already. But I think in the interest of all of us, I'll take you through the story that I think we have achieved in '25, and then we will talk '26 and even a little bit further as we go ahead. As a sports romantic, I have to remind you again that in a very complicated world with many negative things, there are also great sports events. And I do think that the Winter Olympics in Italy was one of them. And we felt that our athletes and our teams did very well. And don't forget that I'm a Norwegian, so I have to remind you all the time who's on the top. And I also tell you that I'm extremely proud of being Norwegian when it gets to sport. I also remind you that the Paralympics is starting in 2 days, which is also a very important sports event, and I hope all of you have a chance also to support that. Which then links into our plan, you remember that '25 is the third year that we work together. We promised you that we would be a good company in '25. And to be very honest with you, when I look back, I think actually '25 was a fantastic year for us, not only in the numbers that we will get to, but more with what the brand achieved for visibility, performance, product and actually showing that we are a good company. And I think this is what adidas has always been when you look from the outside in and you look what people are looking at, adidas has been and is a very, very good company to work for. And I think you see that when we achieve a lot of prizes from the outside and not prizes that you can buy, but actually prizes where people look at you in competition with other companies. And I can also say that at my age, looking at all the young people who wants to work for us, it's obvious that we currently are an attractive company to actually be associated with. And it is also important for us that although there is a focus on, of course, the numbers and there is a focus on many things, we also want to be -- continue to be a good citizen. And we look at that for what we do for the planet environment and also, of course, how we work on the human rights side. And you've probably seen from the targets that we are achieving them, we will continue to do things as a good citizen that will make the planet and the world a better place because I do think that's still important in a, as I said, pretty complicated world. It's also important to look at that we actually have 64,000 employees that works for us directly. And if you then take into account suppliers and everything, you talk about more than 1 million people. So of course, we have a great responsibility as a company. And when you know that we have 180 nationalities employed, then you also know the task with different culture and different backgrounds, we have a huge responsibility. I'm also proud of knowing that we now have 52% of our workforce being female to 48% male. And not because it's a target, but actually it showcases the evolution of this business. And again, I think I can say that the female consumer is now more important than the male consumer, and it's good to see that the company is also moving in that direction. And although in some parts of the world, gender equality is not something to be measured and talked about, we actually do and it's nice to see that 41% of our leadership are now women. And we do believe that in the next years, that will increase. And if it's 50% or 48% or 52%, it doesn't really matter, but we should be a company that has gender balance, not necessarily because we have to, but actually because it makes sense to be a good company making the right products and concepts for our consumer. If you then go into what you are interested in the numbers, again, I'm probably just repeating what you already know, but Q4 was also better than we had expected. And as you can see, we grew 11% currency neutral for the adidas brand in Q4. And remember that we're also comparing against the year before when we had YEEZY and there's a 1 percentage difference in those numbers. Especially proud is, of course, that we had more than 50 -- almost 51% gross margin in Q4, which is normally a quarter where you lose margin. And that showcases again that the quality of our sales was very high in a pretty, I would say, discounted and volatile market. That gave us a profit of the EUR 164 million. That is almost up 3x what we had last year. Remember that Q4 is always from a profitability in our industry, especially for us, but also for other company, almost a breakeven quarter. And again, that's why we are very happy with that result. That gave us a 13% growth when you look to the adidas brand, the 3% difference to the 10% is, of course, the old YEEZY, and that's a sale of almost EUR 25 billion and gross margin approaching 52%, which I think is all-time high without YEEZY. And then a profitability on an EBIT level of EUR 2.056 billion, which is up 54%. And to be honest with you, higher than what we would have expected both 1, 2 and 3 years ago. When you look at where the growth is coming from, the left side is Q4 and the right side is the full year. And you see that even in North America, we grew 10%. And yes, I think we've said it many times, our focus going forward is, of course, to improve our business in the U.S. We are not by far where we should be, and that's not necessarily due to the American team, but more us as a company, and we will talk more about that as we move ahead. Europe, after 2 fantastic years with growth, another one at 10%. Of course, Europe, we have much higher market share, and we are market leader in many markets. So the growth here going forward will probably not be at the level that in other regions, but a very, very strong performance. And again, it should be like that since we have our headquarters sitting in the middle of Europe. Greater China, another year, up 13%, very happy with the development of the business and the team. And I think you'll also start to see a lot of influence actually of the Chinese organization in other parts of the world, and we will get back to that when we talk about the product. Japan and South Korea, the same, growing at 14%. We used to be market leader in those markets, and we are gaining share. Same thing here, very, very happy with the development. LatAm has been on fire for the last 3 years. We are a market leader in the region and in most other countries and again, growing at 22%. Emerging markets, which again are in a very, very tough situation. Remember that they are responsible, I think, for 72 different countries. And right now sitting in Dubai as an organization and looking into the terrible conflict that we have in the area. Happy to report that no one is injured, but of course, they're having a terrible situation, many of them sitting in shelters. And we also had one franchise stores actually being hit by a rocket and destroyed. So again, I am very proud of the team and also, of course, maybe not so important now, but the performance in '25 being up 17%, very impressive. That gives us then an 11% growth in Q4 for the brand and then 13% for the full year. We talked about the channels every time we speak. You see here a very balanced, what should I say, growth in wholesale on retail, which is brick-and-mortar and e-com. I'm happy to report that we comped in our full price stores and in our factory outlets. And we added around 90 net stores during the year. I think we opened 247 new ones, and we closed 158. So growth both on the like-for-like, which is important, but also expanding into better stores. And you see the e-com, very, very good development. And again, our global e-com team working very well with the markets, we are slowly becoming a very good e-com operator again, which I think adidas used to be. That gives us the famous 60% wholesale and 40% D2C. I think we told you about that already 3 years ago. And on retail, meaning brick-and-mortar at 23% and e-com at 17%. There's not a goal in itself to be 60-40, but that's actually mathematically what happens with the geographical mix we have. And as I said before, there are markets that will be more e-com because that's the distribution. There will be markets that will have more D2C. And again, depending on the growth rate we have in the different parts of the world, this -- what should I say ratio might change, but we actually do believe that 60-40 is very healthy currently. Same thing here. You know because we repeat it again and again that our markets should adopt retail concepts that fits into their market, both from a cultural and architectural point of view. And you see here stores around the world where the storefronts are not the same because we don't want to have all the stores look the same. We want to look great in the market. And that's also what we feel the teams are doing. And the same thing goes actually, believe it or not, for e-com. The pipes are global, meaning that the buildup of the sites are the same. They have access to all the same content, but it probably makes sense as you see here that we're using different celebrities or different culture relevant persons to market the same things in the different markets. And the local teams again adopt them to optimize the performance of the sites in the different markets. So exactly the same logic in the digital world as we do in the physical world. When it gets to the divisions, we have said in the 3 years that we need growth and lead in footwear. You can see here, again, growing 12%. But we also said that there is a time when apparel needs to get into the lead because the visibility of the brand and the chances to actually build brand heat and apparel has been around the corner. And you have seen an accelerated growth in apparel during the year. I'm very happy then to showcase that we actually grew apparel during the full year at 15%. Accessories building the growth. Remember, we told you that we had some issues in sourcing for the U.S. market, meaning that we were negative in the last quarter. The U.S. business is now flattish. So we have sorted out some of the problems. And then globally, especially accessories that are linked to soccer World Cup, especially balls, are highly, highly up. And you should expect this number to continue to actually be positive during the quarters of '26. That gives us the 58% footwear, 35% apparel and 7% accessories. Again, a very healthy growth where, then, what should I say, most of the business then being in footwear. But you should expect that apparel growth rate could be actually higher than footwear for a period, and that is probably also what will be best for our P&L, at least short term. Our performance business now growing at 15%. So mathematically, you will then understand that performance grows quicker than lifestyle, which again is positive. And sometimes lifestyle will grow quicker and sometimes performance. But in the long run, it is, of course, important that we establish a very solid performance business in all categories being both the global ones and the local ones. Important here, football, our DNA, growing at 12%. I think it's fair to say that wherever you research, you will probably agree that we now are the market leader again in football. Running coming, of course, from a lower base, but accelerating the growth. I think the Q4 quarter had a growth of 36%. So that means 29% for the full year. Training becoming a real growth vehicle again at 13% Basketball, negative through the first 3 quarters, but then positive in Q4. So now that is also growing. Outdoor, a little bit better than flattish. Golf, slightly down. And I think that's following the market. Specialist sports, which also are there for sports marketing visibility growing at 12% and the U.S. sports then being up 9% following the growth in the U.S. market. A very solid, I would say, pattern for our performance business. We told you, I think, since a year that the 4 categories we need to win in globally is football. It's our DNA. Running because it's the biggest category. Training because it's important because globally, every, what should I say, consumer trains, it might be a different way of doing it, but very important for us. And then basketball, of course, because of the cultural relevance in the U.S., but also globally. I hope and think you agree that our football business did extremely well in '25, not only from the 12% growth, but also from the visibility and the way we looked and of course, also the way our teams and players, what should I say, performed. I am very proud to say that adidas is back again as a leader in where adidas was probably the pioneer in the industry. Running for 3 years, we've said it has a priority. We spent a lot of time establishing credibility again, signing athletes, developing the best performance shoes that exist. We are winning a lot of races because we have the best athletes and the best shoes. Extremely proud of what we did in the majors. You know there are 6 majors, so you can win 12 times in the 2 genders. We won more than half of them. And not only did we win, we were on the podium, I think, in all of the majors. And it wasn't only in '25. It started now also in '26. The first marathon was now in Tokyo and our male runners were 1 and 3 with Tadese and Alex. And in women, we were 2 and 3. So we took 4 out of 6 podium places, again, showcasing that our product is really, really, really good. In running, again, the adizero range is for those people who like to run fast, and it's been the credit builder -- credibility builder. We then said that we will take the look and bring it into a normal runner, and we did that with Evo SL, maybe the most seen running shoes in the market right now. The volume on the shoe is approaching 10 million pairs. So it's been a very successful, what should I say, launch and execution. We have then gone further with the everyday runner with Supernova, modern version, a really, really good franchise for normal people like myself. And then where we have not been competitive is in what we call comfort running, which we will talk about later, but that's where we're launching Hyperboost in the next couple of weeks and months as the most comfortable foam that you can find in the industry. We talked about training. As I said, there's many versions of training and people train differently in different regions. We have seen a huge development in so-called hybrid training. And therefore, we have signed a lot of athletes, and we have built special product for hybrid training. And hybrid is, of course, where you combine running cardio with strength. And it is then logic that we take a running shoe and we combine it with a strength shoe, and that's what we've done with the adizero Dropset, which has tested fantastic and has a huge order book for the next, what should I say, season. As an example of how serious we take this, we actually, what should I say, almost build a hybrid, what should I say, stadium in our brand center. And last week, we had both the world-class athletes, many world champions together with our own employees, then doing a full, what should I say, competition in our facilities. And again, it showcases how great it is to work for a sports company like ours when you can do these things, great engagement and many of our people were really exhausted, which was cool to see. We also see a clear, what should I say, development in the training fitness area for her, where there is a blend of lifestyle, fashion and sports, and you have seen many collabs happening in the market. We do, of course, also do collabs, but I think the best collab we do is that we actually are now doing original sport where we take the Trefoil, the Three stripes and the original, what should I say, fashion direction and we do it with the functional performance fabrics. The pictures you see here as examples of it. And I don't need to tell you that the reaction from the trade actually globally has been extremely positive, and we see this as a game changer for us in the women's training area. And it might be that we will also see similar development on the men's side. And then basketball, yes, we know that we have not been competitive compared to our biggest competitor, and there's a huge way to go. But again, the new team who has been in place for around 12 months have been a game changer. We have built a lot of new products. We have an innovation pipeline. And when you look at the players at the All-Star weekend, Anthony Edwards was named MVP. VJ Edgecombe won the Rookie MVP and Damian, although he's injured, even won the 3-point contest. So again, the visibility of adidas in AllStar was great. And I know that both on the performance shoes, the signature shoes and the lifestyle, there is a lot of good expectations in the market about our product. Motorsport, we have 1 year behind us with the relationship with Mercedes, AMG PETRONAS, successful both the way we look, the way we produce content. And actually, the commercial side of it is more than EUR 100 million. So we achieved all what should I say, the targets we have and are very, very close to the 2 drivers and the team in developing new products for the future. You know that we added our neighbor. I mean, the Audi headquarter is 100 kilometers from here. So when they went into Formula 1, it was a natural thing that we do it together. They debut in Formula 1 next week. And again, the reaction to the range has been great and the 2 drivers, they've been here many, many times. And we will then have 2, I would call them German-rooted teams together with adidas and Three stripes in the Formula 1 circuits, and we really look forward to that, knowing that the merchandise, the fan base is increasing and it's a good, good thing for our brand, both from an image and from a commercial point of view. And then in the, what should I say, footsteps of adidas, we are back again focusing on many, many local sports and also smaller sports, both to get credibility and visibility. And that also goes into the U.S. Yes, we have a long way to go to be a real, real, real sports brand in the U.S. And of course, we would like to have more college teams, and we would like to have more athletes and we would like to have leagues, but it takes a while. But I think it's extremely cool to see that we had both teams in the NCAA final, when Indiana beat Miami, all the players in adidas, that was a great feeling. But it wasn't only there. We also won the volleyball tournament, and we won the NCAA soccer. And again, this showcases again that our sports marketing people in U.S. now have the freedom and the resources to do what is right for the American market. And that will, of course, continue, although we all know that it will take time to get the visibility and credibility that we need to be fully competitive in that market. This page is probably the one I'm mostly proud of because 2 years ago, people said that adidas didn't have the right product and they didn't have performance product. I would say that we are more than competitive in all sports we compete, and you will see that on this page. Our product people, our development, design and innovation people are as good as anybody else, if not better. And I'm very, very happy with the pipeline of product that is currently hitting the market and actually a little bit proud of it, which I think is in line with what Adi Dassler would have wished from us. Same thing in apparel. It is important for us that our athletes look good, feel good and perform well. And it's the same thing there. We are innovating and investing in product development in all the sports we are in. And I would say in 99% of the, what should I say, situation, we also look good. There was a couple of things that wasn't that good, but that will always happen. And then back to innovation. Innovation is, of course, an investment where people are allowed to try things that haven't existed before. We have quite some innovation when it gets to foam, when it gets to carbon, when it gets to how to treat it. You see it here actually with oxygen and with Colas. We are working a lot on additive or printed, and we are very, very close to actually launching performance shoes that are printed. We are working both with heating and with Climacool systems. And there are some really interesting, what should I say, technologies now coming out also in apparel when it gets to fit compression and also Climacool. So again, same thing here, a lot of very, very energetic innovators that we give the freedom also to bring people or bring product to the market. And sometimes, like you see here, we were able to take together with Mercedes AMG product to the, what should I say, to real activities and set world record. Sibusiso running 5: 59: 20 in a 100k in a very, very good documented, what should I say, event, an enormous effort from, of course, the athletes, but also from our own people and from Mercedes AMG, again, showcasing something that you can see online. It's a very, very emotional project. And out of that, you will see many products that will also go commercial. And then I mentioned comfort. I personally believe that comfort is something that we and other sports brand maybe haven't focused enough on. We do know that some brands have had tremendous success focusing on comfort. And now we are at the point where we also focus on it. On this slide, you see a lot of footwear models that has been designed and developed with comfort in mind. And the most important thing there is, of course, the new Boost foam, which is Hyperboost. You remember probably that Boost was the most comfortable foam in the industry, shoes like NMD and Ultraboost, but also the most successful YEEZY shoes all had Boost in them. Boost had one problem. It was too heavy. And that's why our innovation team had the brief since 3 years to develop Boost, but to be much lighter. And the answer is HyperBoost, 40% lighter than the old Boost and therefore, a performance foam extremely comfortable and light. And you see here some of the silhouettes that are on the way of hitting the market, both in performance, but also in lifestyle. Adidas Performance growing at 15%, Lifestyle growing at 12%, and you see both Originals and Sportswear growing double digit. I think that you would agree that we have partners that are extremely relevant on a global scale. You see some of them here. I mean, newly signed Kendall Jenner. I mean we know about Grace and the other ones I probably don't need to present. I hope that you saw Bad Bunny at Super Bowl halftime. I think it's the first time in the history where the halftime show was dominated by one brand, not only him wearing his own shoe, the BadBo 1 but also the dances being in Three stripes. And again, very, very proud to see that halftime show, but also proud to see that the shoes blew out very quickly. And of course, there will be releases now in different colors around the world that you can actually buy. Same with our, what should I say, a very close relationship to Pharrell. He's on development with us the Jellyfish was Shoe of the Year in the U.S. And you will see his design direction, both on the high end and the more commercial rolling out in different versions and colors. And here, you see the XLG, which is already doing very well in the U.S. And again, lifestyle, yes, there has been a lot of talk about our Terrace, the Samba, Gazelle and Spezial. But I think you now have to widen it because all the shoes you see here from the Samba all the way down to running and actually soccer culture shoes are selling at quite some high volumes everywhere. And I think right now, it is important to extend the range globally and not forget that the Terrace product is actually continuing to be very, very strong. I would remind you that the Stan Smith is a look that you will see more and more of at the back end of '26. And I don't think I'm wrong if I believe that you and maybe your kids would like to wear Stan Smith in '27. There are very clear indications that, that is going to be a big shoe. But of course, you're also allowed to carry any of the other shoes. Apparel, we did talk about the need 3 years ago to innovate in apparel. 3 years ago, most of our lifestyle product, both in Originals and in Sportswear were Fleece, fleece, fleece. Now you see denim, you see satin, you see knit and you see completely new design elements. A great job from our apparel team, and I don't need to tell you that right now, many of these products are really flying off the shelf and especially online, where some of the good online players are really, really able to showcase newness and freshness all the time. So we continue to see Three stripes dominating the Sportswear side. And again, Three stripes, maybe the most known element of any sports brand in the world. And it's fair to say that we now have a run on Three stripes, and we try also, of course, to do that in a very, very, what should I say, adidas-like way, taking care of it with not overdoing a bit, but at the same time, showing it in many innovative way. So I think with that, I've tried to tell you the story of what's going on with the brand. And then I'll hand over to Harm that Harm can actually do the details of the numbers.

Harm Ohlmeyer: Thank you, Bjorn, and ready to have break now for a couple of minutes as I go through the financial update. So good morning, good afternoon from my side as well. And as always, I want to shed some light into the P&L, the balance sheet, but also an update on the share buyback, where we are. So starting with the P&L, as always, Bjorn alluded to some of these numbers already. The most important one is the 13% currency neutral growth for the adidas brand. I want to highlight that again, we can't say it often enough. I mean the total company grew currency neutral, including the YEEZY impact, 10% and reported 5%. So there's a 5 percentage point difference between currency neutral and reported. That is around EUR 1 billion. I'll come back to that in a second because that's an important number to remember in '25 when it comes to the operational performance versus the reported performance. Gross profit, very solid. I give some details, to double-click on that as well. And the operating profit, as Bjorn mentioned, EUR 2.056 billion, 54% up in a very difficult market. So definitely very proud of what we have achieved. When you look at the guidance and how we started, we started March 5 last year with double digit for the adidas brand. We have always been very confident on that one. We said high single digit currency neutral on the reported, including the YEEZY impact from '24, where we had around EUR 700 million of YEEZY sales and an operating profit of EUR 1.7 billion to EUR 1.8 billion. I know at some stage, I got criticized that we changed the guidance 4 times in '24. So we told you that we're not going to change it 4 times again, but we did once on October 21. And what we changed there is not the double digit for the adidas brand, but we still had the high single-digit net sales growth, but improved the operating profit to EUR 2 billion. And now finally, we came in, as you read this morning and actually in the pre-release already, 30% growth for the adidas brand, 10% reported currency neutral, including the YEEZY impact and an operating profit of EUR 2.056 billion. Now I think what's important coming back to the currency impact and the YEEZY sales. You see the quarterly breakdown and the growth percentages in the first quarter, second, third and fourth, 17%, 12%, 12% and 11%, overall 13%, pretty significant. And then when you look at the quarterly breakdown, I think it's important, something you get lost into the percentages, it's important and probably even going forward even more so that we talk about absolute growth. And when you see the quarters, pretty much every quarter is growing absolutely in the amount that On is growing, which is, of course, celebrated quite a bit and rightfully so. But this absolute amount shows you the progress that we have done. And for the full year, would have been -- or it was actually EUR 2.8 billion on operational growth for the adidas brand. And then, yes, part of the truth is that we couldn't comp the YEEZY sales from '24, which is EUR 700 million. And as I just mentioned, the 5 percentage points has a negative FX of around EUR 1 billion. That's why in the books, you only see the EUR 1.1 billion growth. But I think the most important number here is the EUR 2.8 billion that we grew operationally, credit to all the marketing and sales teams around the world. Talking about the fourth quarter very quick. Again, great trajectory with 11% growth for the adidas brand. There, again, it's a big gap between currency neutral and reported 8 percentage points. The main reason for that is not just FX overall, but it's also hyperinflation when it comes to Argentina and Turkey. As you guys in the investor community know, when it comes to hyperinflation, we always need to use the spot rate at the last month to apply it for the full year. That's why the impact in Q4 is always a little bigger than the previous quarters. And that's why it is 8 percentage points in Q4. Bjorn mentioned already the improvement on the bottom line, so I don't need to repeat that again. From the top line, going to gross profit, and I want to double-click on that one right away because it's more important to dissect that a little bit. So again, coming from 50.8% in '24. Now underlying, again, similar to the EUR 2.8 billion growth that we have on the top line, we also made good progress to improve our gross margin product costs, not just because the volume is growing and we are doing a good job in sourcing, but we are also the brand or meaningful brand that gives our suppliers margin because we are growing the business. Not every brand can say that nowadays. And that's why we have an improvement there. The freight costs have more than normalized. It's normal course of business in a volatile environment, of course. Business mix, Bjorn mentioned the 60-40. We still made some improvements from a D2C point of view. So that's a positive business mix and also across the categories. And then pricing and discounting, we have remained very disciplined. It's a neutral element in that underlying driving as other brands are much more discounting and being promotional, not just in Q4 in '25. Of course, here, you have an FX again. And again, the FX is not just a U.S. dollar topic. It's definitely your other currencies as well, whether it's the Argentinian peso, Japanese yen, Korean won, it's Turkish lira. And even nowadays, it's British pound. So -- and I come back to that when it comes to '26, what that really means. The tariffs, we talked about a lot since April. But also here, you see the gross effect and then the mitigation that we have, which is primarily in '25, the discounts that we get from our suppliers. So there's a net impact of roughly 50 basis points. And again, when we promised a healthy company in '26, we also said, ideally, we get to a 52% margin. As Bjorn said, we are probably even ahead of it if the tariffs haven't been hit us, and it would have been 50 basis points on top of the 51.6%. So we would have exceeded the 52% already and would have called out being a healthy company. Now going into '26, what is the first indication for the gross margin driver to be transparent to all of you? We believe we have done a great job on the product cost. So we are considering that as being neutral. The same on freight, whatever is happening in the Middle East, I think we can manage it. We are on top of it. We built a lot of resilience when it comes to our supply chain and logistics. So probably more neutral effect. The same on the business mix. We always talked about the 60-40 wholesale and D2C, but also the categories as performance is now even growing faster than lifestyle. It's probably a neutral one as well. Still opportunities on pricing and discounting. It differences by market. But overall, we still believe there are opportunities unlike other brands, and we see that as a slight positive. But then I have to talk about FX and tariffs a little bit, which is a negative, which is again, on the FX, on the transactional side, we have a positive on the euro to the U.S. dollar. It's not as positive as you all might hope for in '26. But rest assured, as we are moving into '27 and Bjorn will talk about it later on, we have significant benefits coming towards us in '27 because don't forget, just 14 months ago, the euro to the U.S. dollar was around 1.03. Then we had times of 1.20. We are very comfortably hedged going into '27, but there's already some benefits in '26. But unfortunately, we have other currencies and very significant markets as well like Turkey, Argentina, Japan, Korea, Brazil, Mexico, but also the U.K. These are significant markets. They are all significantly above EUR 500 million in size, and they weigh on our transactional FX as well. That's what you will see later on, in the bridge. This roughly is EUR 100 million, and then there's another EUR 100 million on the FX that we get on the translation again. You will see that later on in the bridge, but very much looking forward to '27 as well when we get some of the benefits of the currencies. Going further down the line, it's a story of investing into marketing. We always said the last 3 years, we are going to saving ourselves to profitability through saving on marketing. even as a percentage, 12.4%. That is probably close to the highest we have ever done. And you see it in the trajectory on the top line as well that we are very well invested from a marketing point of view. And what's even important, and you all want to see that tremendous leverage on the operating overheads coming from 34.2% to 31.4%, so 280 basis points or 4% down. Yes, some help with currencies. Yes, some help with onetime in '24. But overall, definitely going in the right direction. And without that, we couldn't have grown our operating profit by 54%. Then, of course, we looked critically at Q3 when we came from operating profit to net income, but also here for the full year and with help in Q4, you see that we are translating the 54% growth in operating profit to a 67% net income growth. How did we do that? The net financial expenses went up by 10%. That is on the one hand, because we carry less cash on the balance sheet. And because of that, we have less interest income. And primarily because of Turkey, the hyperinflation weighs on financial expenses. That is the main reason why we are slightly up compared to '24, but also that is normalizing in '26. And you see that we have a good trajectory on the income taxes. We went down from 26.5% to 24.3%. We always said as we become a normal and healthy company, you will see the benefits in our tax rate as well as we become more profitable. And you should assume also in '26 that we will play around 24% to 25% of tax rate as you start updating your financial models. So overall, very, very good net income growth of 67% and even more so on basic earnings per share of 76%. Now that's the P&L. Now moving to the balance sheet. Inventories up 70% or currency neutral 23%. I want to deep dive into that one right away. You might remember that we started '23 with a challenge in inventories with EUR 6 billion coming out of '22. In hindsight, we believe we have been too disciplined on the inventory in '23, coming down to EUR 4.5 billion. One reason was, yes, very disciplined because it was a problem. Secondly, our top line grew faster than we would have expected, and that's why we went too low. It normalized in '24, and now we have some special effects in '25. On the one hand, of course, we are preparing for further top line growth in '26, and this is the real volume growth, not just what you see reported because there's FX impacts. We have some early product purchases to secure availability for our World Cup because that's important. You all know it's not just a significant event for the brand, but also commercially significant for us. And after some challenges with supply chain hiccups here and there for the industry, we actually managed to have some earlier inbounds at year-end. So rest assured that for the quarters to come, we will bring that further down. And you should assume that we make progress in the first half of '26. And you can take me serious at year-end '26, you will see a number that is below the EUR 5.8 billion. Now what's even more important and testament to a good inventory position, what is the goods on hand and goods in transit and what is actually current inventory. You see that the goods on hand, that is what we have in our DCs around the world is actually 72% and only 7% of the total inventory is not current season. These are things that are sitting in factory outlets. That's what we say again, we have good full price sell-through. We have current inventory and 28% is actually goods in transit. So on the ship somewhere around the world or on a train or on a truck, wherever we are around the world. So very, very current, and it's the most current inventory we have seen for many, many years. Really quick, the rest of the balance sheet. Accounts receivables, of course, up as we are growing with our retail partners. That's normal, especially in Q4 as we have shipped in quite a bit with the growth that we had. Accounts payable are slightly down. That is, as you know, what we need to pay to our suppliers in Asia as we get the shipments going. And then the operating working capital is, of course, up as well, but that is mainly attributable to the inventories that I just explained. And also there, when we go to the deep dive, we came from not so good average working capital over net sales in '22 and '23. We went probably too low in '24 with 19.7%. I always said if you get below 20%, you're an excellent company, but we are definitely a healthy company if you're anywhere between 21% to 22%. So we are slightly up given the reasons that I explained around the inventory, but I'm pretty sure we will get that to the range of 21% to 22% in '26. Now talking about capital expenditures as well, another piece where we have been very disciplined. So we spent less in '25 and where do we spend it? It's most importantly that we spent more than half of it in areas where the consumer will see it. It's either new retail stores. As Bjorn mentioned, there's 90 net openings. We have renovated or upgraded some retail stores around the world. We are investing into shop-in-shop. That's where the majority of the CapEx is going into where the consumer sees it. We are investing into our IT infrastructure, whether it's S/4HANA that we are rolling out around the world, but definitely also in our digital ecosystem, which will always be updated and will never be finished, and that's where the investment is going into and also there, the consumer will see it. And on logistics, you see it's pretty small. Why? We always said we have an infrastructure that can cater towards the EUR 30 billion business. The truth is also that there will be some markets where we are by far the market leader in Latin America, some of the emerging markets where we need to invest in one or the other DC. But you see from a CapEx point of view, it's not dramatic. So we have the infrastructure that we need for the future. Of course, the working capital, especially the inventory led to less cash than we originally had planned. It's EUR 1.6 billion at year-end. It's down from last year, but it's also important that we put that in correlation to what is our cash overall, what is our adjusted net borrowings and most importantly, what are our net leverage ratios, and that is important for our credit agencies as well. So we are very, very strong from a leverage ratio. We have an internal policy of being below 2.0x. We are still coming from above 3x to now 1.4x in '25. And that's why it's important to mention, even given the cash that we have on the balance sheet, we have a strong investment-grade rating from both S&P with A and stable outlook and also Moody's and A3 and a stable outlook because we've made a lot of progress in the last couple of years and is being recognized by them with the efforts that we have done. Because we have a strong balance sheet, we also propose an increase of 40% of the dividend. So going from EUR 2 per share to EUR 2.80. We believe that's the right amount. The shares outstanding, of course, is the number that was at year-end that is changing as we do the share buyback, but that would amount without the share buyback to EUR 500 million dividend. It's a payout ratio of 36%. We believe that's around right amount, absolute and also ratio considering our share buyback of up to EUR 1 billion in '26. And you know that we had a first tranche that is finishing latest by March 18 of EUR 500 million. You see here as of yesterday evening, we have already bought back the amount of EUR 400 million or 2.6 million shares. So definitely, the banks have accelerated in the last couple of days. but also well progressed, and you will see the benefit of that in the future. So overall, when you see the return to shareholders, which, of course, all of you are interested in, we had EUR 357 million in the year '24 only through dividends. And you see now the combination of dividend and the share buyback in '26 will return EUR 1.5 billion, around EUR 1.5 billion to shareholders, and we believe that's pretty significant. And we also believe we can only do that if you carry a strong balance sheet and if you're a healthy company, which we believe we are, and you will see further on that we will strengthen that one with our midterm plan. With that, I'm happy to hand over to Bjorn again.

Bjorn Gulden: Thanks, Harm. And then you probably remember our road map that we started talking about 4 years ago that said '25, we should be a good company. And then in '26, we wanted to define ourselves to be a healthy company. And I think we have now added successful because with the numbers we're showing you and the evolution we've had over the 4 years, we think adidas is then healthy and successful. I want to again, although I do it many, many, many times, again, repeat the way we look at our business model. And I hope you agree that it all has to start with the consumer and the athlete because that's in the end, our customer. And the closer you are to the consumer or the athlete, the better decisions will you do. And that's why we believe in a world that is getting more and more complicated and more and more diversified, we need to be closer to the consumer. And that means that the markets will have to take more responsibility in the decisions whatever we define a market to be, it can be a country or it can be a region. But important is that we define where we want to go to make what decisions. And that's not sitting in a central office and believing that we know what's happening all over the world. And this is important because if you want to be EUR 25 billion, EUR 30 billion, EUR 35 billion, EUR 40 billion, you need to make good decisions when it gets to what kind of product are you bringing, developing and sourcing where and not try to believe that you can do the same all over the world. So global will always exist and headquarter will stay here in Herzo and we will, of course, develop systems, processes and frames and also innovation and even run some of the categories very stringent, but we will be more and more local in the way we actually make decisions because there is no alternative at this size. And that means, again, that we will make decisions as close as we can to the consumer, and we need very, very good people, not only in headquarter, but also in the local market. And I am extremely proud to see the energy we have now all over the world and the positivity our management in the market show how they think they can reach growth in the future. And when you then look at it, living this kind of world means that not everything looks the same. There are stores that look different. There are products that are hot in one market and not exist in others. And this is the way the world currently is. And I know there are different opinion about this, but I think we all agree here that there is no alternative. And it could look like when we do a Superstar campaign, and don't forget Superstar is not only a shoe, Superstar is also an apparel word and it is an expression of a consumer, then the frame of the campaign will look the same, but how we execute it, where we execute it can actually be then different from market to market, and you see some examples of it here. It is also true that creativity doesn't only happen in Herzo, in our headquarter, but it happens all over the world. And I assume if you are on social media, you see in the tank jacket. And this China design that was meant to be for the Chinese New Year went viral all over the world, and now we have a demand in every market around the globe. And that showcases again the creativity power that we have and that we can exploit when we have the right attitude and the right systems. It is also true that there are local developments and local fashion shows and local relevance that we do only for the market like you see here. And that's not only in China, it is, of course, also in other markets. It is also true that to be a sports brand, we need to make sure we are in the sports that are relevant. And I don't need to tell you that part of the problem we had in the U.S. of not being what we should be is, of course, that we haven't been visible in American sports the way we should for many, many years. And again, I can assure you that we are doing everything we can to build that over time. But of course, we also have to admit that it takes time. You can't sign the biggest colleges or sign any leagues or the biggest players unless they are free or unless you identify them early. But our sports marketing teams, both globally and especially now in the U.S. are, of course, very, very active, making sure that we can build a base that we can grow from. But it's not only in the U.S. This is a topic we have talked about many times, the cricket in India or the Rugby in New Zealand or even rugby in France. I mean, the cultural relevance of that is very important. It could also be netball for the women in Australia or winter sport for that sake in my country in Norway. We want to be like Adi Dassler made it the sports brand that are in the relevant sports, both commercially and non-commercially, so we can have the ambition of being the #1 sports brand in all the markets. We do know that we will not be the #1 in all markets. We should have the ambition, except for in the U.S., where I think the distance to Nike is so big that we should first have a target of actually doubling our business. All other responsible people in the market should have the ambition of being #1. That doesn't mean we will be it, but it means that they have to identify what they would need to theoretically be #1. And then it is a priority for global then in what markets we have the resources to do it and where the priorities sit. And again, there is no doubt that from the global point of view, it is mostly important now that we keep the leadership where we have it, that we ambition in all markets. And then in addition to that, specifically target the American consumer from America. And again, for the people that are afraid that we will lose the control of the brand, you shouldn't be, because an adidas employee sitting in China or sitting in India or sitting in America is absolutely as much worth and should be as knowledgeable as a Norwegian sitting here in Germany. And then we have to, and unfortunately, we see it again, we are in a very, very fast-changing environment. And you have seen all these headlines, there are jobs being cut in Germany. There are conflicts that are terrible. And that, of course, means again that we need an extremely agile organization with people that are, a, allowed to make decisions and have the attitude of making decisions. And again, being a global brand with a local mindset is easy to say, but it also has to do with the people and the culture. And I hope you agree that over the last 3 years, we have created brand heat and credibility in all our divisions, and we have connected much better with our consumer. We have taken leadership in many markets and in many categories. But of course, we are not where we think we should be at the end. We still have many things to improve. But if you look at the sales increases of the adidas brand, you see that we have grown now twice 13%. And if you really look at the real growth of the adidas brand, it's even much higher. The brand growth of adidas was EUR 5.5 billion because then you have to remember that we lost EUR 1.3 billion of the YEEZY business and we had an FX impact on our top line of almost EUR 2 billion. And that, of course, then reduces this growth to be then only EUR 2.3 billion when the original growth was actually EUR 5.5 billion. I think it's important that you don't forget that. And it is the same on the profit side. We went from EUR 268 million up to EUR 2.056 billion, so more than EUR 2 billion in profit. But again, if you look at the adidas brand's operating profit growth, it's even EUR 2.3 billion on top of the EUR 669 million. The YEEZY business we lost, contributed to EUR 700 million. The FX impact on the bottom line was EUR 300 million. And then the tariffs that hit us in '25 were also EUR 100 million, and that gives you then the reduction in the profit from what we really created. And I think you need to give us some credibility for this because it's reality and it's not really in our control. So again, I'm not saying that everything we do is great, but I'm saying we work for a fantastic company and a fantastic brand, and we have moved in the right direction, and we are very, very aware of what our challenges are. We believe in an operating model that empower more the markets. And of course, that has many, many, what should I say, tasks that we need to solve, but we think it's the only way. If you then look at '26, the underlying growth for the adidas brand is actually EUR 2 billion, and that is then the high single-digit growth that we talk about. But again, sitting in Europe, the FX impact will reduce the reported one by an estimate of around EUR 800 million to EUR 900 million that we currently see. And again, this is just because we're sitting in a euro land in Germany and it's not operational. If you then look at the profit bridge, it's the same. You started with the EUR 2.056 billion, which we rounded here to EUR 2.1 billion. The underlying development that we promised you is actually EUR 650 million improvement. But then there are non-mitigated tariffs of EUR 200 million and an FX impact of around EUR 200 million that actually reduces this then by EUR 400 million. It is a little bit strange, but if that hadn't happened, and again, these 2 things are outside of our thing, you would actually be at the 10% EBIT, which was the number we talked about 4 or 3.5 years ago. Again, not an excuse, but it is things that you have to have in our mind. When it gets to the tariffs, you could ask, so why can't you mitigate them all? Well, you cannot get the price increases through the market right now because of discounts. And it doesn't help if you put up the price on the shoe box if discount increases. And I think it's fair to say in the American market and actually also in the U.S. market, there's a lot of deals in the market from other brands that takes down the realized price. We also, in all these numbers that we talk about have not adjusted any tariffs for the changes that you see in the last 2 weeks. So the high court's or the Supreme Court's decision that all the tariffs were illegal, we are not taking any positive things into these numbers. And also the lower rate of the 10% and 15% that they issued compared to the 19%, 20% and other, this upside is also not in the numbers. If the Supreme Court's decision should be upheld and we could, what should I say, get back tariffs, you're talking about EUR 300 million, EUR 400 million that we have paid of so-called illegal tariffs. But I think we all know that there's a long way to get that back, and we are not accounting for it at this point in time, but there is an upside to it. So with all that, our official guidance is then high single-digit growth in local currencies and an operating profit or an EBIT of EUR 2.3 billion with all the considerations that we have talked about. And again, I then have to repeat again that in the 4-year plan, we said healthy company, it was a 10% EBIT with the 50%, 52%, the 12% and the 30%, which ironically is what we would actually hit if we didn't have the FX and the tariff thing in '26. So we actually believe that we have, from an operational point of view, delivered what we should do. And you know what, there is an upside after this in '27 and '28 that things will turn, and that's why we probably feel a little bit more comfortable than maybe some of you do. For '27 and '28, we want to stay a successful company. And to do that, we need to optimize our working model, and that means decreased complexity or increased simplicity, which is kind of the same thing and then optimize both processes systems and of course, the organization to also formally work towards this new goal because we have broken a lot of internal processes and systems to actually be where we are because we have focused so hard on the consumer that we have not been able to catch up to actually formalize that. And of course, that's a stress on both organization and systems and still with quite some dis-efficiencies. We think we have to do this to win in the new global real world short and long term because we don't believe that the world will go back again to be one global marketplace where everybody wants the same and the your supply chain can be one big systems that works on averages. We actually believe, unfortunately, that the complexity when it gets to consumer demand and supply chain will continue to be very complicated. And we think the brands that maneuver through that, the best way will actually win and we want to win. So when you look at then the period '25 through to '28, you know the results for '25. We told you that '26 is high single-digit growth for the brand, EUR 2.3 billion in EBIT. We will continue to add around EUR 2 billion on the top line, and that would then cause with everything that we are aware of around 10% EBIT in '27. We think we can continue to do EUR 2 billion in increase also in '28, and that would then with some leverage and actually be EBIT margin above 10%. And again, I think it's important that we don't only talk percentages because the percentage we don't sell, we actually sell money or gain money. And I think you agree that EUR 2 billion yearly growth is more important than a percentage number. That means that from an operating profit point of view, you are in the mid-teens CAGR. And that will, of course, if we execute properly and the world are somewhat stable, generate a very strong cash flow. And in addition to the share buyback we announced for '26, we have been authorized by the Supervisory Board to actually buy back shares up to EUR 1 billion each year. And I think that's also what you could expect should we be able to do what we think we should and of course, in a world that is somewhat working stable. We have not talked about the Capital Markets Day to showcase what we do because we have said we want to focus in the next months on really getting ready for the World Cup. Yes, the uncertainty currently in Middle East are asking some questions, but I'm pretty sure that it will be a very successful World Cup, and we have a lot of work to do to make sure that we will show up and that all our marketing that actually starts very soon are going to be as good as we want it to be. But we would then to showcase the confidence that we have after World Cup, invite you in September. I think the preliminary date is the 23 and 24 to actually show you the pipeline of innovation and product going forward because there's a lot of innovation, especially in the performance products, but of course, also in lifestyle that I think you will be interesting to see. So we will call it an Innovation Day and invite you, and I'm sure Sebastian will inform you about that in the near future. I think that's kind of the story. I think you saw in the announcement a couple of other, what should I say, announcement. One is that Thomas, which has been our Chairman for a long time and which I think we all have worked very well with, has told us that he will resign as a Chairman by the AGM. And again, I think we're all very thankful at least in the time that I've been here, we've had a very, very good and close relationship, and I wish him all the best. We have then been able to talk Nassef Sawiris to be our Chairman. I mean, he's been with the company for a long, long time. He's a big fan of the brand. He's interested in our industry, very knowledgeable and again, a person that we have worked with for a long time and look forward to. So we hope that he will be confirmed at the AGM. Ian Gallienne, we hope will be reelected, same profile and extremely close to the brand. And then as a new member, the proposal is Mathias Dopfner, who will bring a lot of expertise and a global knowledge that I think will do our Board well. And we all look forward to work with these people and at the same time, wish Thomas all the best. In addition to that, I think we're all extremely happy that Michelle agreed to extend her contract. She is a long-term adidas employee, knows the industry, has a great, great heart for our people and a really good understanding of what is needed and works very close with all of us. So not only congratulations, but thank you. And then, yes, you can't get rid of me again. I will stay around because I don't know what else to do, and I feel energized and I feel I can bring something. And again, it is an honor actually to sit with the Three stripes and be part of it also for the future. And I wouldn't do it if I didn't believe that we have a great future, and I can contribute at least for another, what should I say, time period. I think with that, I'll hand back again to you, Seb, and then we see where we go from there.

Sebastian Steffen: Yes. Thanks very much, Bjorn and Harm. And of course, also congratulations to Bjorn. Mora, we are now ready to take questions.

Operator: [Operator Instructions] The first question comes from the line of Edouard Aubin from Morgan Stanley.

Edouard Aubin: Congratulations, Bjorn, for getting your contract extended. So two for me on the top line actually. The first one is on lifestyle, which was still up 3% year-over-year in the fourth quarter. You mentioned in the preliminary remarks that Terrace was still strong, if I understood correctly. But maybe it was strong, but negative year-over-year. If that's the case, which kind of other franchises more than offset this headwind? And looking ahead, how do you see the different lifestyle franchise evolving in '26? So that's question number one. And then question number two, and sorry to go into the maybe the granularities of the guidance, apologies. But if you look at the benefit from the World Cup. Bjorn, I think in the past, you had kind of commented the EUR 1 billion type of top line. I know you already had some in '25. But as for my calculation, it would help about the top line of 3% in '26. So if I'm right with the math, that would imply kind of a mid-single-digit ex World Cup in '26 and then reaccelerating in '27 and '28. And if that's the case, kind of what makes you confident that you will have a reacceleration in '27 and '28?

Bjorn Gulden: I'll start with the second first. You know when you have EUR 1 billion in World Cup product, it doesn't mean that, that does cannibalize something else. In the merchandise, it's always like when you sell a lot of a national team, you will sell less of some clubs. So you have to be careful to believe that one sale is kind of just on top. If you think about a store that has 4 walls where there are World Cup products now, there will be other products next year. And last year, there were other products. So when we talk about the business, you can't just plug in that business and saying everything is equal. So we are very confident that, yes, the World Cup is part of it. And EUR 1 billion, you do the math and you say, it's 3%, yes. But it doesn't mean that the 3% is then missing when we get into '27 because it doesn't work like that. So we are confident that we can take any event or any merchandising team, and we can replace businesses as we go ahead. So there isn't any, what should I say, hole in the collection for '27 that doesn't give us the confidence. When it gets to your question about the headwind. I think it's a little bit tough to talk about headwinds. We have generated a lifestyle business that I think grew 12% for the full year. And I think everybody has been surprised by the longevity of Terrace. And we have, of course, not believed that we will grow Terrace double-digit every quarter for the next 10 years. We have said that we are launching newness in Terrace, and we're launching a lot of silhouettes in addition to it to grow the lifestyle business over time. And what we also told you was that when we have created the heat on footwear, there is a time when we were ready to also grow in apparel because you need to also grow in both areas, right, maybe with different timing. And with luck or good planning or execution in the second half accelerated the lifestyle part of apparel. I mean you know that footwear is almost 60% and apparel mid-30s, it is obvious for a while that you can grow then apparel quicker than footwear. When you look at the franchises, then Terrace is, of course, stagnating, but it's still at an extremely high level. I think you see it in the stores and you see it in the street. Then we said we were extending court into Campus, into Superstar and eventually, even into Stan Smith. And I think yes, many people will say, "Oh, Superstar is not working that well." Well, Superstar is not only a shoe. Superstar campaign is a look. So it's also an apparel collection that is doing excellent. And when you look at Kendall Jenner, the way she's dressing, that is a whole statement for the brand. So it might be that Superstar is not going to be the big issue in the next, I would say, quarters, but the court side of the business, if you add Terrace, if you add Superstar, and then the introduction of Stan Smith, you will see that the dominance of adidas on the court side will continue. And then what no one talks about more is that the low profile piece is an extension of that. And I don't need to tell you when the weather went warm now, I mean Ballerinas was going through the sky. So I'm not worried that we don't have the pipeline of Classics to actually continue to grow, especially on the court side. When it gets to the Running lifestyle side, then I have to admit that there has been other brands. I mean, New Balance with the retro, ASICS with the retro, and HOKA and On with their comfort that, of course, has been more dominant. We said that we need to bring newness and we didn't have the right silhouettes. We have done quite some business on retro, too. And that's why the whole Hyperboost is so important because that is the extension of performance into lifestyle that we've been looking for. And remember, again, I wasn't here so other people should take the success. But shoes like NMD, Ultraboost and everything we did with our friend at DC was clearly, clearly because also of the Boost foam. So we think we have engineered the products to be successful. And then again, not everything can grow higher than average. It doesn't work. And that's why we think that the growth we had during the year was very healthy. We see where we are now in Q1. So we feel, except for the circumstances right now when it gets to the terrible thing happening in the Middle East, we actually feel that the pipeline of product and what's going into market is very, very strong. So yes, we feel comfortable.

Operator: Next question comes from the line of Erwan Rambourg from HSBC.

Erwan Rambourg: I'd like to add my congrats to Bjorn for sticking around for longer, if I can put it that way. So I'll stick to two. China, very fast growing in Q4 last year. Does this continue? Are you seeing any change in the landscape vis-a-vis local competition? And is there a reason for China to continue to outperform other markets? Naively, I get the sense that football might be more relevant for LatAm in Europe than it might be for China, but I might be wrong on that. Any sense on whether China continues to outperform? And then second question, possibly more for Harm. In terms of margin expansion, if you look the 2, 3 years out that you detailed, if you look at gross margin expansion versus operating leverage, I suspect, given what you're mentioning about tariffs and FX, gross margin might not contribute that much this year, but maybe you have a more balanced contribution from gross margin expansion and operating leverage in the outer years. Is that the way to think about it? Maybe if you can help us think about the different buckets.

Bjorn Gulden: I think you're right that football and the World Cup in China is not a game-changing thing. We see that the Chinese business is built on lifestyle. It's also built on Running, and it's based on silhouettes not necessarily linked to football, although the soccer culture is actually doing also pretty well in China. We are extremely confident with the development in China because our team has really found the business model where they both develop and design their own stuff, but they also tweak global stuff. And because you can produce in a local market in the factories. And as you know, the Chinese retail market is mono-branded where you control the space even if you don't own the stores, I think that's the business model where we have most of the tools to actually be successful. The local brands have made huge improvements when you go back to the time after COVID, you probably remember also that Western brands are struggling with all the conflict coming from the Xinjiang cotton issue. Since then, I would say that we have answered in a way that we have focused on the Chinese consumer to our Chinese organization, giving them freedom and support to actually compete on the same level. And remember, our management in China are Chinese. They are industry people that used to work for us that then left and worked for Chinese brands and then came back again so they understand the model. So I am actually -- if I should look at it probably most confident with the Chinese market compared to any of the markets because I'm not sure what negativity should actually hit China, to be honest. So I think that China will continue to outperform. And as you know, it's a pretty profitable market. And again, very, very happy with the development. And then I think I'm handing over to you, Harm.

Harm Ohlmeyer: Erwan, a very good question. And I'll start probably with the gross margin. You're absolutely right. I mean '26, what we indicated earlier, we have EUR 200 million in tariffs that we have in the gross margin, and it's EUR 100 million more in '25. And we have EUR 100 million transactional FX impact in the margin. So that's why we look at '26 as being more stable compared to '25, that shows you already that operationally, we made good progress. And they're not going to go or entertain the discounting or promotions that other brands are doing. Otherwise, it can be done. But overall, rest assured, we know exactly how we have hedged for '27 already, especially for spring/summer, but we started early also in the -- dollar was pretty weak and weaker than today going into fall/winter '27 already, which is earlier than usual. So we know that we have a very, very good gross margin going into '27. That's the gross margin piece. So you're absolutely right, stable at '26, benefits in '27. And on the operating overhead leverage, you saw versus 31.4%, we are not yet where we want to be with the 30% or lower. So we'll definitely make progress year-end '26, and we'll continue to make progress into '27 as well to get eventually to that 30% or lower. You also need to see now it's becoming a ratio game. Of course, when you lose EUR 1 billion in top line, and you have a lot of operating overheads in euro, it's tougher to hit the ratio, right? So that's also part of the equation. But that also leads you to the third topic, as Bjorn indicated that we lost almost EUR 2 billion in translation impact on the top line. I mean this could also flip at some stage and then we have a different P&L, whether it's ratio absolute. So we become a much bigger net sales company all of a sudden, and that will definitely lead to absolute benefit, right, whatever the ratio will be. So that's pretty much where we are. So it's a very important question that we definitely don't take lightly.

Operator: Next question comes from the line of Jurgen Kolb from Kepler Cheuvreux.

Jurgen Kolb: Yes. And again, Bjorn, good that you don't have anything else to do and stay with us for some more years. Good to hear that. On the question side, on China, coming back to that. We know that China, there are 2 major trends Running, and Outdoor is actually quite strong. So I was wondering how TERREX is doing, especially in China? And if that is a real driving force for you guys maybe also go into other markets? And then coming back to the gross margin side again. In raw material maybe, how are you hedged there? How long can you kind of sustain the rising pressure from oil and oil derivatives? When would that become a nagging problem for the gross margin also going maybe into 2027?

Bjorn Gulden: The China market is, of course, not only Running and Outdoor. But from an activity point of view, you're pretty spot on that Running is booming. And as you know, we have worked very hard to kind of build credibility and then take the credibility down in price. The Evo SL is currently our best-selling shoe. And then in China, we also built even products below that with technology. So the pipeline in Running, both from a visibility, having events and having runners and also answering that with an offer that is targeting, I think we are in very good control. When it gets to Outdoor, you are actually right. Although the Outdoor in China goes in the street and a little bit up the mountain, it's not on the top of the mountain. So it's a combination of lifestyle and Performance. And you're probably referring to some of our competitors, the Chinese that have bought Western brands and has done excellent in that area. And TERREX, which is our answer to it, has started to build the same thing. So we are building, I would call it, EUR 150 shoes and below with, I would say, full technology, but that goes in the street and a little bit up the mountain. We are building light down jackets. We are building fleece and we're building collections that goes both on the street and a little bit of the mountains, so let's put it this way. And it's actually doing very well. And it's probably going to be our strongest TERREX market quickly if it isn't already. So you have identified 2 areas that are right. And again, not a surprise to you probably, but the Chinese team are then building, tweaking products for local production to actually then achieve high margin and also targeting the specs that is needed for China. So that is correct. When it gets to the raw materials, we don't hedge raw materials. You have to remember that we develop materials together with the suppliers, and the suppliers give us prices normally for a season. So they actually, if at all, are hedging the materials. We don't see a price increase in materials currently. So when you look at the oil price and the short term thing, the only place where we see it right now is on airfreight because that has exploded for obvious reasons. And we don't know yet what will happen to materials prices, but we are okay in our pricing, I would say, through at least first quarter of '27 when it gets to the agreements we have with the suppliers. Should this conflict cause other areas, then I'm sure we will have areas in freight and maybe even in materials. But right now, we don't have anything in the pipeline that you need to worry about that, that would have a major impact. And again, I hope, both of us hope that there should be no rockets left, so they need to talk, right? I mean that would be the objective and the dream, to be honest.

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

Geoff Lowery: Just one question, please. You've referenced a few times a promotional environment. I was just interested in your perspective on what sat behind that. Is that particular brands with particular product issues or inventory issues that they'll gradually work through? Or do you think this is a new cost of doing business more generally in terms of activating consumers?

Bjorn Gulden: No, I do think that especially in Europe and America, these are issues to keep the space in distribution and of course, also inventory issues, and also retailers that are nervous, so they're buying these. It's a combination of many things. I think if you've been in the stores over the last 6 months, I think you've seen a lot of red marked product that normally wouldn't be red marked. So I think it's a combination of those 2 things. I don't think this is a long-term sustainable way because it doesn't make any sense for any of the brands or retail. So we are counting on that this will disappear over time.

Operator: Next question comes from the line of Warwick Okines from BNP Paribas.

Alexander Richard Okines: I wanted to ask the sort of same outlook question you've had already, but in millions of euros rather than percentages. The profit bridge you've given are very helpful. But in '25, you grew operating profits by EUR 700 million despite EUR 300 million headwinds of YEEZY and tariffs. And in '26, the headwinds are a bit bigger, EUR 400 million, but you're only expecting a EUR 250 million increase this year. So what is that bridge, please? And then second question is what would the EUR 200 million tariff headwind in '26 be if you were to take into account the news of the last 2 weeks?

Bjorn Gulden: You have to remember that the tariffs that has happened since he installed them, this part of those that he just installed, that has been deemed illegal, right? And then there are agreements between nations that are bilateral that are not illegal because if you make an agreement with a country like you did with India, that is not illegal. So there are different, what should I say, topics. If we calculate through all this, which is not easy because there are markets like China that have 5 different duty rates for 12 months receipt. Then the impact of the changes that he did, the 10% and the 15% after the Supreme Court compared to what it used to be, I would say it's probably EUR 30 million, EUR 40 million, but it's not really that relevant. If you look at all the duties or the tariffs that we have paid for the period that could be illegal, you are speaking close to EUR 400 million. So there is a big variance here between the different things. And I don't think any brand right now knows what we can expect, right? But it cannot be anything negative other than what you have seen. What you see is the worst case, right? It is the duties that were there before the Supreme Court said it was illegal. And there is no, what should I say, positivity on maybe claiming back paid duties. I think that's the only thing that I can tell you. On your first question, I'm not 100% sure what you asked, but the improvement in the profitability, everything being equal, it's actually EUR 650 million. And then you have the duty and the FX that takes you back EUR 400 million, right? So that's the only bridge I can do. The EUR 650 million is, of course, leverage and gross margin on the growth that you're having. So I don't know how else to answer it.

Harm Ohlmeyer: Just real quick, Warwick, I understand that you compare like the improvement that we did in '25 with the improvement that we plan to do in '26, right? But the detail is that is in the FX, where the FX impact is coming from the respective countries. And if the FX is primarily coming from the U.S. dollar, it's less of an impact, what we saw in '25. It's across many countries. And when it comes to Argentina, Turkey and Japan and Korea, what I just said, it's across countries that are more profitable, and that's part of the answer. So again, it's complex with all the countries that we're operating in. So there's not an easy bridge that we normally have in gross margin when it comes across all these countries and the currency impacts of all the detailed currencies. But I'm happy to do that in a one-on-one when we see each other on a roadshow.

Operator: The next question comes from the line of Robert Krankowski from UBS.

Robert Krankowski: Two questions for me, please. We talked about the gross margin that is going to be stable, and then there is a big benefit from the hedging of FX in 2027. But could you talk a bit about what kind of gross margin level you're assuming for by 2028? Previously, we talked about 50% to 52% to get to 10% EBIT margin, 12% marketing spend. Is it the same? And also, what kind of impact does performance, I guess, do to the growth at the beginning versus lifestyle. I mean, like what kind of gross margin gap are we talking about? Is it now better than it was historically, given assumptions that you did? And maybe secondly, if you could touch on like what has been the performance year-to-date. I guess, the environment is very volatile. But are we talking about the growth above high single digit? And what is the shape of the order book, if you could comment?

Bjorn Gulden: That was many questions and many difficult ones. I'll start with the last one is that the start of the year has been good. I think I'll leave it like that in a very volatile marketplace. That's both for retail and wholesale. So we are happy with where we are end of February. I think on all the other, when you start talking about margin in '28, you're jumping a little bit ahead. I do think that if we bring EUR 2 billion every year on the top line, there should be leverage on every cost line that you can think about. We know that we can improve our processes and systems, and we do know there's something called AI that we haven't even priced into the leverage. So I think we should continue to say that we think we can take market share that the growth in absolute terms that we talk about realistically is around EUR 2 billion a year. And then I think how far we get then on the EBIT margin then depends on all the other elements. And I think it will be very crazy for us now to start to define those bridges for '28 because I wouldn't know other than there should be improvements on many levels that then should please you as an investor. I don't know, Harm, if you want to add something to that.

Harm Ohlmeyer: No, absolutely. Now mapping out '28 gross margin. I mean, it's probably the most difficult KPI to manage even on a quarterly basis. But I mean whether it's the hedging, and it's not just the U.S. dollar, it's many currencies that we're hedging or not actually hedging because it's too expensive. There's footwear apparel, there's categories, there is country mix. I mean lot of things are happening. But looking forward, why we're so confident about where we are heading and that we are going beyond the 10% EBIT margin is definitely coming out of the cost leverage. We will be a more sizable company. There's no question. And again, if we're getting to a 52% margin or better, the key is that we leverage our infrastructure, right? And we will be a much bigger company. And the key to watch is how we leverage our infrastructure and our cost overall. And that's where we can do a lot, whether it's AI or other things where we can run the company differently. That is definitely the element that will bring us beyond the 10% EBIT.

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

Aneesha Sherman: I have two, please. Bjorn, the first one is when you first joined, you inherited a very early-stage Samba launch in early 2023. And you were able to grow it and make Terrace such a powerful driver over the last 3 years. You're now looking at the next stage, and rather than one kind of blockbuster product, you've got a wide range of products in Performance, lifestyle, apparel, et cetera. How do you think about that ramp-up in brand heat that you saw with Terrace playing out across a wider range of products? Do you need to have those 1 to 3 blockbuster products that really carry the brand? Or is it possible with a much wider range of products where each individual franchise is not as powerful? Just curious about your philosophy. And then a second one for Harm, please. When you think about costs, the cost base for 2026. You just said on the prior answer that you should have leverage on every item. If you can get to that EUR 2 billion incremental sales. For overheads, you've been at about EUR 7.8 billion for the last 2 years, if I take out those one-off costs for 2024. Is that a pretty steady state level you think you can stay at, in which case, you should see more leverage on the overhead line item? I'm just trying to bridge your operating margin guidance and see where the leverage could come from versus where there could be some deleverage. That would be helpful.

Bjorn Gulden: Well, I can tell you that I feel a lot better having many franchises doing well, both performance and lifestyle and both footwear and apparel doing well than putting my destiny on one franchise. I think we have to be very honest that at the beginning of '23, when the negativity and the performance of the company was not that great, it was a gift from heaven to see that we had a Samba that actually was in high demand. And I think we then did a great job scaling it and it ended up not being only the Samba, but what we later teach people that it's called Terrace. And it included Gazelle and Spezial and then later Campus and more shoes. So the risk we took at that point in time, I think for us, for many outsiders, "Are you crazy?" but we did what we felt we had to do. And of course, the portfolio of product we have now is much, much more healthy. I think many companies today, without mentioning names, are now hanging on one franchise or actually hanging on one look which, of course, is not very pleasant. So it is a clear tier goal for us to have a wider portfolio product and to always have the possibility to also create brand heat on apparel because let's face it, footwear has a much more narrow, what should I say, platform, and there's not that many trends. If you do apparel well, in addition to your performance and your lifestyle footwear business, you have a much, much bigger, what should I say, area to play in. And I think you agree that on apparel, the regional differences from a Tang jacket in Japan to a soccer culture item in U.K. that there are many, many variables that you are much, much, much more easier to play on, to be honest, to get business going. So very, very proud of what the product teams have done to expand the ranges. So we're not dependent on only the Samba, which for maybe 12 months was very unpleasant because if that hadn't worked, I might not have extended my contract. Let's put it that way. Harm?

Harm Ohlmeyer: Yes. When it comes to the cost base, you listened very well in the past. We indeed, excluding the one-offs, we are around the EUR 7.8 billion. Of course, there's some FX impact on that one as well, especially in '25. But on the other hand, I mean, when you're growing high single digit in '26 or the years to come, of course, you drive more volumes, it is not just done through pricing. And so you need to see that the absolute increase that we might have in cost is coming from freight cost, either you bring the product into the markets or you ship out to the retailers or to the consumers because you move more volume. Secondly, we said earlier that we have net 90 more retail stores. You got to pay rent, you have depreciation. You have people running these retail stores as well. There's some annualization effect. When it comes to all of the overall personnel expenses that we have, we try to keep it where it is because there's an expectation of salary increases, not just here in Europe but also in some markets where you have inflation, so it's going up, more than here probably in the headquarter. But of course, through some programs, we have fewer people. We can become more efficient over time, and that's what we're working through. So we definitely can do better. And then the leverage really comes from our DC infrastructure, it comes through our IT infrastructure, it comes through normal office costs that we have or less depreciation because we invest more disciplined on CapEx. But just staying flat on the EUR 7.8 billion is not that easy if you're growing the volume as well. But again, there's focus on it. We are, first and foremost, looking at the ratio and the leverage, but we can definitely do better, not even bringing out the big word of AI, but there are a lot of things that we can do better to become more efficient, but it's not always the same absolute number, right? The leverage is what we are focusing on.

Operator: Next question comes from the line of James Grzinic from Jefferies.

James Grzinic: Just a quick one really for Bjorn, a follow-up, I guess, to your answer to Geoff's question in terms of over inventory position in the industry, especially in North America and Europe. Do you feel that more broadly for the industry, we are in a bigger over inventory situation now compared to a year or 2 years ago? I'm just curious about hearing your thoughts on that. And perhaps if you can comment specifically even in big parts of the world like the U.S. and China, for instance.

Bjorn Gulden: No. I don't think I even said over inventory. I would say that I think brands are fighting to keep their sales by making deals with retailers. That doesn't necessarily have to be old inventory. So I don't think there is a huge inventory problem as such, like we had coming if you go 3 years back, especially in China and the U.S., there was a lot of inventory, including ourselves. I think if people are uncertain and to make sure that their wholesale business is holding up, people are making deals and the retailers are nervous, so they are asking for deals. So I think it's the right -- the special attitude that the business is currently having more than there is a lot of inventory hanging around them. I would describe it like that. I'm sure there are some inventory for certain brands who are negative in the top line in certain markets like in China, and I want to get rid of that inventory. But I think the issue is more that people are afraid of losing top line and therefore, making deals. I think that's the description I would give.

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

Andreas Riemann: Two questions also on the brand. So Bjorn, you are broadening the range with more categories. You had more wholesale partners every year. So how do you make sure that you don't stretch the adidas brand too far? Or from a different perspective, what are the things that you don't do to keep the brand hot? So any insight here would be appreciated. And the second one is related to takedown versions. You're not talking about takedown versions anymore. So are those products still growing? And then what categories are you offering these products if you do that? These would be my two questions.

Bjorn Gulden: Well, first of all, adding retail partners, I don't think I ever said that. What I've said is that we are servicing retail partners better in the sense that we take care of them and we have a much tighter dialogue with them, what kind of product we can build together, and that's both in Performance and in lifestyle, and it also includes in many areas, what you call takedowns in sportswear. I don't feel that we have an issue of controlling the brand because the people that are dealing with the retail in China and developing products in the U.S. or here are all adidas employees. And we all have the same interest. We have the same creative direction. We have the same calling card. We have the same technologies. But the point is that if you decide that China should have a lot of local in running shoes at price points between EUR 50 and EUR 100, I think the Chinese team knows that better than global product managers sitting in Germany. So it's not necessarily that we are widening neither distribution, which we're not, nor widening the categories that you said, it is more that we make much better decisions where the consumer is. Don't forget that the biggest mistake you can do in this industry is essentially push concepts out in the markets that no one wants because then they get discounted. And I think you agree that product that are heavily discounted does not bring, a, brand heat and, b, it does not bring you any margin. And I think if you go to the P&L, so many brands right now, you can measure the brand heat and assortment on the gross margin. And I think when you look at our gross margin build over the last 3 years, knowing that YEEZY is not there and we're approaching 52%, I don't think anybody can raise the question if we have the right range or if we're stretching the range. And so I don't think -- I don't know who told you this, but I don't agree with you that this is the case. What was the other one?

Andreas Riemann: Yes. What about the takedowns?

Bjorn Gulden: Yes, the takedown is, again, if you look at footwear, I mean, let's face it, every brand are doing takedowns. There aren't gazillions of variations. So if you look at our competitors, you will see that you see the same look in many price points. If you look at Nike Vomero you will see that in 5 different price points. If you look at New Balance, you will see the same look in all kinds of price points. So I think takedowns, we could call them something else, but taking a trend and multiply the offer to different distribution and price points has always been in this industry. So I don't see that as an issue either. What has been good for us or you can say negative is that the growth in originals has been higher than in Sportswear, which would tell you that the higher end has actually been more in demand where we have supplied it more than we have on the lower end. So people tend to say we are -- or I am to commercial and they try to build that story. I don't know if that's maybe to, what should I say, to less focus on themselves. I would measure the gross margin on the different brands. And then when they say they don't want to distribute where maybe we are distributing, I don't know any place where we distribute our product that our competitors are not. And it's very easy if you go to a store to see what brands are there, and I have never gone into a distribution where I'm the only brand, not in my previous jobs or on this job. So I think the brands that end up in the wrong channels are maybe because what they try to do in the right channels didn't work and then they have to clear it, right. So again, I don't agree with stretching distribution because I don't think you will find us in any distribution that you will say is wrong. If you do, then please call me because then, I would like to know about it myself.

Andreas Riemann: No, I only made the point because the number of wholesale partners, if I'm not mistaken, was growing from 100-plus to 200-plus in the last 3 years, if I'm not mistaken, right? That's why my question.

Bjorn Gulden: I don't know the number you're talking about. You're talking about visiting headquarter? That number you're referring to is that we double the amount of customers that can see our range here in Herzo. But that's the same. It's just, yes, but it's just better service. That doesn't mean that the new customers. We don't have more customers now as partners than we had 3 years ago. But it is true that they're all allowed, or not all, but many of them are allowed to actually come here to Herzo because that's why we have the campus. It's not secret place. This is a place where the adidas family, both our partners, our athletes, customers can come. So that's where you have the number from. But we don't have more distribution points and weaker quality distribution points now that we had 3 year -- I would say it's the opposite because we have a lot of clearance back in '23. So there might have been products in the wrong channels. And I don't think you'll find that now.

Sebastian Steffen: Maura, we have time for one more question.

Operator: So our last question for today comes from the line of Monique Pollard from Citi.

Monique Pollard: Just two from me. The first question was just given your commentary about being conservative on the wholesale sell-in for Europe and North America and also your comments on the level of discounting by some of the retailers in those markets. Just wondered if you have continued being so conservative that the wholesale sellers in regions into the first quarter or whether you've been a bit more bullish on the selling there? And then the final question, obviously, I understand that the situation at the moment, is very volatile. But just wondered within your EM segment, whether you could break out sort of MENA exposure for the key countries that have been impacted?

Bjorn Gulden: Well, I'll start with Emerging Markets and the situation. You know that we have 6 subsidiaries that are affected by this that are run out of the Dubai office. And of course, they are in a terrible situation and most of them sitting in lockdowns. And also from time to time, sitting in shelters. So the only focus in those markets the last couple of days has been the safety of our people. Business issues is not really relevant. When it gets to other markets in the regions, there are stores that are actually open and in certain of the markets, the government are asking us to keep them open. And if our people are then willing or want to keep them open, we do. So it's again the local decision on how we or how they, what should I say, behave in a very difficult situation, and our job from headquarters is just to support them. We even offered to charter planes and fly people out if that's what they want. And there's no financial limitation on anything that they can do. But as always in these situations, the people that are used to living in a volatile world have a different attitude than us and are extremely strong. And again, are doing fantastic things. The impact on the business, it's impossible to say right now, and it's not even something we look at, to be honest. When it gets to the global business, we don't see any impact short term on this. And there's no, what should I say, other means than being very close to everything that we can. There is an area where we'll see problems, that's on airfreight because of the situation in the airspace and a lot of planes being grounded that we will have delays on certain, what should I say, products that means air freight, that could be samples that we need for meetings. It could be special products for special events. But also that there is no impact right now that would adjust any numbers, to be honest. Same thing on the cost base, it's like, yes we see oil going up, but we currently don't have any guesstimates or estimates of what impact that could have. And in freight and all that, we currently have long-term contracts that also does react short term. So it's too early to say. And I think you agree, we all hope that as I said, that some of these countries will run out of rockets so that people will talk instead shooting at each other. And then the hope is, of course, talking will cause some kind of peace. I think that's the only thing that I can say. When it gets to the conservative selling in the wholesale, I think there is -- the quarter is more coming from that we have clearly not been willing to do these deals that we talked about. A lot of retailers, and I can understand them, are looking for deals, if it's clearance or if it is even production if they commit to bigger volumes where they will get a higher discount. And then that allows them again to sell discount. And I think if you follow the retail environment, especially in Europe and the U.S., you will see that there a lot of products that used to be full price are now discounted. And we have -- I mean, Mathieu is not here, but our Commercial Director has so far avoided to do these deals because it's your own business. As soon as you start to do it, it's like a drug, right? I mean if you are on to it, it's hard to get off it. And I think you see that in our gross margin that we have been able to kind of, at least in our own business and also the wholesale business, to avoid it, that our product has been discounted is, of course, there because if a retailer does 20% in the window or there's vouchers online, it also affect us, but it doesn't take our margin down because then it's the cost of the retailer, right? So again, we are looking at it. But we know running after every sale by making deals and are hoping and believing that the market will dry up in the sense that this is not necessary. And we hope that all the companies in our industry have the help that we can actually avoid it because it, of course, takes the profit pool in the industry down.

Sebastian Steffen: Thanks, Monique. Thanks, Maura. Thanks very much to Bjorn and Harm. And of course, as always, thanks very much to all of you for participating in our call today. As always, if you have any follow-up questions, please feel free to reach out to Adrian, Philipp, Chiara or myself. We very much look forward to speaking with you. In fact, we're actually looking forward to meeting with you as we will be on the road quite a bit, both here in Europe and also in the U.S. And lastly, you've heard it from Bjorn. We, of course, hope to welcome all of you here on our beautiful campus later this year for our Innovation Day. The details about this and the detailed timing at the end of September will follow soon. So thanks again for your participation. Speak soon. All the best. Bye-bye.