Global Edition

Results from TaylorMade-adidas

12.15am 11th November 2002 - Corporate

TaylorMade-adidas Golf has announced record revenues for both the third-quarter and nine months ended 30th September 2002. Third-quarter revenues of EUR 137 million were 21% higher than the same quarter in 2001, marking the fourteenth consecutive quarter in which revenues have exceeded those in the prior year. In constant currency, revenues would have increased 34% for the quarter.

For the nine months ended 30th September 2002 revenues reached EUR 516 million, an 18% increase from the same period in 2001. In constant currency, revenues would have increased 22% during the period.

Metalwood revenues, fuelled by the recently launched tour-leading R500 Series drivers, increased 29% during the quarter and were the primary contributor to the third-quarter’s record results. The company points to this sales result as being particularly notable in light of the US marketplace challenges created by the announcement on 6th August 2002 of significant changes in the USGA’s previous proposal on higher COR limits.

Golf balls were once again an important contributor to the company’s overall revenue growth behind the continued strength of the Maxfli brand. Market share for the Maxfli brand has increased significantly during the last year, attaining the No. 2 unit market position in the ultra-competitive premium ball segment. The brand’s momentum is expected to continue with the recent introduction of three new premium performance balls: the M3 Tour, the M3 Tour LT and the A3.

“The results we have achieved are remarkable but even more so in light of the challenging market environment that has existed in the US and globally throughout the year,” said TaylorMade-adidas Golf president Mark King. “In addition to the soft retail environment, the change in the USGA’s proposal on COR created some unique product and marketing challenges.”

“Nevertheless,” King continued, “within three weeks of this announcement we were already shipping USGA-conforming R500 Series drivers to our customers, underscoring the agility and execution capabilities of our global operations team and the investments we have made over the last three years in our supply-chain platform. The challenges we have faced and continue to overcome are indicative of the’can-do’ attitude of our people and the overall strength of our products.”

On a geographic basis, the US showed the highest revenue growth for the quarter at 35%, followed by Europe at 24% and then Asia at 9%. For the nine months ended 30th September 2002 all regions recorded double-digit revenue increases as compared to the same period in the previous year, led by Europe at 22% and followed by the US and Asia at 20% and 19%, respectively.

“I am extremely pleased with how well our business is balanced regionally,” said TaylorMade-adidas Golf CEO Jim Stutts. “One of our primary objectives during the last three years was to globalise our brands. The progress we have made towards this strategic objective is evident in the fact that our revenues are split almost equally between US and non- US markets. In addition, we have gained significant market share in Asia and are now clearly a leading player in this important region.”

“Three years ago,” continued Stutts, “we set out to create industry-leading products that the best players in the world would embrace. As we look at equipment usage on tour today, we believe we have made enormous strides towards this objective. On the PGA Tour, the number of TaylorMade drivers being played has consistently been more than double the number of the nearest competitor. In addition, during one stretch of the third-quarter, TaylorMade accomplished the “trifecta” of winning the driver, fairway wood and iron counts at five consecutive PGA Tour events. This level of usage by the best players in the world speaks volumes about the quality of our products and our commitment to being the best performance company in golf.”

TaylorMade-adidas Golf www.taylormadegolf.com

www.maxfli.com www.adidadasgolf.com

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