Decision brief · FY2025
No threshold breached. 2 exposures ranked for action.Working capital is the largest exposure management can act on.
- What matters
- Working capital · Working CapitalLarge exposure on a firm assumption. The number is not in doubt — the question is whether working capital is being managed to it.
- At risk
- €640mswing in free cash flow across 21–23.5% — stated plausible rangeOne extra working capital point costs €256m of free cash flow.
- Tolerance
- Within toleranceNo configured threshold is breached at these assumptions.
- Control
- Highuncertainty low · materiality highControllability and uncertainty are stated judgements recorded in the client model, not measurements. Exposure is computed.
- Question
Is the plan assumption for working capital still the right one, and what would have to change for it to move?
- Owner
- Head of Treasury · suggested
- Next
- Next monthly working-capital reviewWatched by “Working capital above guided range”, which has not been triggered at these assumptions.
Outlook · FY2025
FY2025 outlook landed below actual operating profit even when built directly from adidas's own guidance, while working capital remains the largest source of forecast risk.
- Driver-based operating profit forecast missed actual FY2025 results by 14.9% (€1,750m vs. €2,056m actual).
- Working capital shows high sensitivity to free cash flow (high confidence assumption).
- Naive extrapolation missed by more on all three metrics — see Evidence.
Revenue forecast
€25.59bn
Operating profit forecast
€1.75bn
Free cash flow forecast
€1.07bn
Built as of FY2024 using only that year’s data and adidas’s own stated guidance — deltas shown are the forecast error against what actually happened, not a live re-forecast.
Ranked exposures
- Working capitalAct€640m
- EBITDA marginAct€226m
- CapexReview€60m
- Effective tax rateMonitor€70m
Backtested against actuals
Naive extrapolation Driver-based
Revenue
Operating profit
Free cash flow
Absolute forecast error vs. FY2025 actuals