04 — Model & Assumptions
How the forecast is actually built
No step here requires reading Python to understand. The calculation chain, every assumption behind it, and where each number traces back to are shown directly — the model is authoritative, this page is a window into it, not a separate description of it.
Calculation chain
RevenueBaseline product-division revenue × (1 + growth assumption)
EBITDARevenue × EBITDA margin assumption
Operating profitEBITDA − D&A (held at baseline run-rate, scaled with revenue)
NOPATOperating profit × (1 − effective tax rate)
Free cash flowNOPAT + D&A − change in working capital − capex
Assumption register
Click a row for its source and guidance context.
Revenue growth8.0%Medium confidenceLow sensitivity
- Source
- Adidas_Report_2024.pdf, Targets – Results – Outlook
- Guidance context
- adidas FY2025 guidance: “high-single-digit rate” (interpreted as 7–9%)
- Fiscal year
- FY2025
EBITDA margin11.6%Medium confidenceMedium sensitivity
- Source
- Derived, not disclosed — see src/model.py
- Guidance context
- Not disclosed directly — back-solved from operating-profit guidance of €1,700–1,800m at 8% revenue growth
- Fiscal year
- FY2025
Working capital21.5%High confidenceHigh sensitivity
- Source
- Adidas_Report_2024.pdf, Targets – Results – Outlook
- Guidance context
- adidas FY2025 guidance: 21–22% of net sales (actual FY2025: 23.0%)
- Fiscal year
- FY2025
Capex€600mHigh confidenceMedium sensitivity
- Source
- Adidas_Report_2024.pdf, Targets – Results – Outlook
- Guidance context
- adidas FY2025 guidance: around €600m
- Fiscal year
- FY2025
Effective tax rate26.5%Low confidenceNot simulated sensitivity
- Source
- Adidas_Report_2024.pdf, Financial Highlights (FY2024 actual)
- Guidance context
- No FY2025 guidance given — carried forward at FY2024's actual rate (26.5%)
- Fiscal year
- FY2025
Data lineage — an example
Source disclosureadidas_Report_2024.pdf, Targets – Results – Outlook, “2025 Outlook” column
↓
Extracted factOperating profit guidance: €1.7bn – €1.8bn
↓
Model assumptionEBITDA margin back-solved to hit the €1.75bn midpoint at 8% revenue growth (11.6%)
↓
Forecast outputBase-case operating profit: €1.75bn
What this is not
- A multi-company benchmark. One company, two driver dimensions (product division, channel), three fiscal years.
- A price/volume analysis. adidas doesn’t disclose that split — product division and channel growth are the real drivers used here.
- A track record. One backtest point. A single win over a naive baseline is not evidence the driver-based approach generalizes.
- A trading or investment signal. This is a methodology exercise on public financial disclosures.