Good evening, good afternoon, good morning, everyone, wherever you're joining us virtually today, and welcome to our Q3 2022 results conference call. As you know, it has been quite an intensive couple of days and weeks, given all the recent announcements, and of course, this call will definitely be somewhat special as well. In a second, our CEO, Kasper Rorsted, will kick things off with some personal words. Afterwards, our CFO, Harm Ohlmeyer, will walk you through our presentation and take the time at the end to answer your questions. As usual, I would like to ask you that during the Q&A session, you limit your initial questions to two in order to allow as many people as possible to ask their questions. Now, a last time, over to you, Kasper. Thank you very much, Sebastian, and also hello from my side. As you know, this is the last earnings conference call that I'll open as the adidas CEO, and after my opening remarks, I'll leave the rest of the presentation, also question and answers to Harm, who will take over as interim CEO until the end of the year. First of all, I'd like to thank you for following all developments here at adidas closely over the last few years, and I enjoyed the professionalism and our personal encounters. adidas is an iconic sports brand, and I'm very happy that I had the opportunity to be part of this fantastic company for the last six years. As a company, we made great strides in strategic areas of our business. We have substantially advanced our digital abilities and grew our online sales by a factor more than five. In North America, the world's largest sporting goods market, adidas has doubled its sales. We also strengthened our leadership position in sustainability and increased diversity inclusion throughout the company. We have divested, you know, in a successful way, TaylorMade, CCM Hockey, and Reebok so that the company is now able to fully focus its efforts solely on the adidas brand. I'm proud of this achievement, and I'm proud of our team. The past three years have been marked by several external factors that disrupted our business significantly. They were challenging as they were marked by the economic consequences of the pandemic and geopolitical tensions. It requires huge efforts to master these challenges. This is why enabling a restart now is the right thing to do, both for the company and for me personally. You might know that Bjørn and I know each other quite well. Bjørn has done a tremendous job at Puma, and I'm wishing him and the entire adidas team all the best of luck and success. With this, I'd like to thank you again, and I'll hand over to Harm. Harm, have a good call. Thank you very much, everyone. Thank you, Kasper. Before I start with the Q3 earnings, let me say thank you to you on behalf of the board and all adidas employees for your leadership, achievements, and passion for the three stripes. I'm sure you will spend quite some time skiing in the coming weeks, but I hope that you will continue to cheer us on from the sidelines. We wish you all the very best for your future endeavors. With that being said, let's move to the agenda of our call today. In a second, I will start with a recap of our business development and financial performance in the third quarter. Given that we had already pre-announced our high-level quarterly results three weeks ago, I will keep this part relatively short. We can always discuss any detailed questions you might have during the Q&A part today or afterwards in the individual conversations between you, myself, Sebastian, and the IR team. I want to spend the most of the time on a comprehensive operational update and our outlook for the remainder of this year and our high-level view on 2023. With that, let's kick it off. While we continue to operate in a very dynamic environment characterized by several external challenges, the consumer remains at the heart of everything we do. As you can see, we delivered multiple consumer highlights across all of our key categories in this third quarter. In football, we launched the federation kits for the upcoming FIFA World Cup with impressive media feedback as excitement builds up for the event. In addition, the Rick and Morty X SpeedPortal performed strongly among our Gen Z consumers, driving an increase in our football footwear revenues of more than 20% during the quarter. In running, we scaled our offer for all types of athletes. Our Adizero Track and Field grew credibility in reigniting the super spike debate around the world's fastest sprinters, while the UB22 won the leading T3 award for best women's running shoe. In addition, 4DFWD more than tripled its sales as we scale the franchise with new iterations and colorways. Sustainability and performance continue to go hand in hand as we introduced a Made to Be Remade and made with nature versions of the Ultraboost, driving excitement and growth in one of our most iconic franchises. In outdoor, we leveraged our leading partnership with Parley for the Terrex Free Hiker Parley, while training saw the introduction of an HIIT collection and a dedicated Stella McCartney maternity line for women. Moving to lifestyle and our Forum franchise, which is the best example that our hype-to-scale approach works. Not only did we see a Bad Bunny co-collaboration drop being oversubscribed 40 x, we saw the entire franchise growing by more than 50%. In addition, we scaled our NMD franchise with new drops of the NMD V3 and the hiking-inspired Pharrell NMD S1 Ryat. In lifestyle apparel, we continued to premiumize our offer with a new chapter of our successful Y-3 partnership and the second drop of Originals Blue Version. Let's now have a look on the progress made in our strategic focus areas. First, credibility. The three stripes took center stage at an incredible UEFA Women's Euro this summer as we leveraged the tournament for dedicated activations on and off the pitch, underlining that adidas is the number one football brand for all players. In addition, Karim Benzema took home his first Ballon d'Or. We celebrated his very own Impossible is Nothing moment and leveraged it through limited adidas signature footwear and jersey drops. Our most prominent technical running franchise, Adizero Adios Pro, continued to deliver win after win, while our latest outdoor campaign encouraged all athletes to reach their personal summits. I also would like to call out our world-class athletes, such as Patrick Mahomes and Aaron Rodgers, driving performance credibility and sales growth of more than 30% in our U.S. sports category as the NFL kicked off. Second on experience. For the first time ever, we brought together more than 60 of our top partners, including Leo Messi, Trae Young, Stefanos Tsitsipas, and Shaunae Miller-Uibo, to offer adiClub members the opportunity of a lifetime to be sponsored by adidas. A strong proof point of what our brand has to offer for our most valuable consumers. Exclusive access to our partners alongside money can't buy experiences, both online and offline. Third, sustainability. In sustainability, we show what's possible with the latest adidas by Stella McCartney viscose tracksuit, an industry-first piece made in collaboration with 12 pioneering partners. A statement of intent to demonstrate the potential of circular garment production and to move us closer to our goal to help end plastic waste. Now turning to the numbers. Let me discuss our strengths and weaknesses for the third quarter. On the strength side, we saw continued double-digit increases in markets excluding Greater China, with revenues up 12% as growth accelerated in Latin America and Asia Pacific. In the performance category, strong product innovation is not only helping us to drive brand heat, but also double-digit growth, with football up 36% and running up 24%. The strong sell-through of our product also enabled double-digit e-com growth in North America, EMEA, and Latin America. On the weaknesses side, the war in Ukraine and inflationary pressures weighed on growth in EMEA, despite the strong underlying performance in Europe and the emerging markets, where revenues grew 9% and 43% respectively. The underlying improvement in Greater China was masked by inventory takebacks of more than EUR 200 million in the quarter, while own retail revenues were up 7%, reflecting robust sell-out. Our profitability development was negatively impacted by several one-offs in Q3. I will provide more details about these in a few minutes. Lastly, we see elevated inventory levels for the overall marketplace as well as for adidas. While as a result of this, we expect promotional activity to intensify, it is definitely worth looking at the inventory increase in more detail. There are some important developments behind the large increase that are key to understand, and I will get to that in a little later. Turning to our P&L at a glance. Revenues were up 4% currency neutral while being up 11% in euro terms. Gross margin was down to 49.1% as a significantly better pricing mix and favorable currency movements were more than offset by increased supply chain costs, higher discounting, and an inferior market mix. Our operating profit came in at EUR 564 million, reflecting an operating margin of 8.8% amid continued investment into the launch of new products as well as our physical and digital platforms. Final net income from continuing operations for the quarter came in at EUR 66 million, somewhat below the preliminary numbers due to tax implications related to the termination of the Yeezy partnership. As you know, our P&L development in the quarter is significantly impacted by several one-off costs, totaling amount almost EUR 300 million on the net income level. Please bear with me as I will give all the details shortly. Looking at our strategic growth markets in Greater China, our top-line development continues to be severely impacted by the challenges we face, which I will discuss in detail in the operational update of this presentation. While our own retail revenues increased 7% in the third quarter, reflecting a robust sell-out, product takebacks in the amount of more than EUR 200 million during the quarter reduced sell-in significantly and contributed to the revenue decline of 27% for the market as a whole. Sales in North America were up 8% as we achieved double-digit growth in D2C, reflecting strong sell-through of new product launches across both performance and lifestyle. From a category perspective, growth in North America was driven by double-digit growth in football, running, training, and US sports, while significant increases in basketball drove growth in originals. In EMEA, revenues grew 7% despite the loss of revenue in Russia CIS of more than EUR 100 million, driven by strong double-digit D2C growth in both Europe at almost 20% in emerging markets with an increase of more than 50%. Moving on to our strategic growth channels. The elevated consumer experience across all touch points and successful sell-through of new products drove D2C growth of 6%, excluding Russia CIS. D2C revenues were up 13%. E-com increased 8%, reflecting strong double-digit growth in EMEA, North America, and Latin America. Our D2C first mindset is best represented through our membership program, adiClub. We continue to roll out new value propositions as we speak and have additional go lives excite our members. At the end of Q3, we had almost 290 million members in our program. From a category perspective, as mentioned before, football continued its exceptional growth trajectory with an increase of 36% as we capitalize on the consumer excitement ahead of the FIFA World Cup. In addition, running achieved growth of 24% as latest iterations of our successful franchises resonate extremely well against the background of continued wins at the world's major races. We are driving credibility at the top of the running pyramid by scaling our offer for everyday runners. To give you an example, both Adizero and Supernova franchises grew more than 50% during the quarter. Basketball was up 16% in Q3, particularly reflecting the strong momentum of the Forum franchise. As you know, this is just the beginning when it comes to adidas Basketball. Before I move to the financial part, allow me one more comment on our category performance. When looking at these growth rates, performance being up 23% in the quarter, football increasing 36%, running 24%, basketball 16%. You need to keep in mind that all of these growth rates already include a significant drag from our China and Russia businesses. If adjusted for these effects, growth on all of these categories would be even higher, which speaks to the strong momentum that we are enjoying. With that, let's turn to the financials now. As always, let me start by discussing the development in our markets, where I want to focus on Latin America and Asia Pacific, as we had already discussed the top line development in three larger markets before. Latin America continues its exceptional growth story with revenue increasing 51% in Q3, driven by strong double-digit increases in both performance 63% and lifestyle was 30%. At the same time, growth in Asia Pacific accelerated 15%, driven by double-digit growth in both performance and lifestyle. Particularly strong increase in football, 60%, running, 55%, and basketball, 29%. In terms of market profitability, I would like to call out Latin America and Asia Pacific with strong operating margins of 26.2% and 23.2% respectively. While North America and EMEA are just falling short of the 20% operating margin level, our profitability in Greater China remains under pressure, reflecting continued investment into the market as we remain convinced about its potential for the years to come. If you take a closer look at the top line development during the quarter, you will see that we experienced robust momentum in all markets except Greater China during the first two months of Q3. This is reflected in the 7% growth or +13% in currency-neutral growth excluding China in July and August. In contrast, deteriorating traffic trends in Greater China, as well as slowing consumer demand in major Western markets, weighed on the revenue development in September, leading to flat net sales for the month. Key markets like the UK, Germany and also the US were particularly affected by the slowdown. Let me now take a look at the full company P&L. As a result of the monthly trends just discussed, revenues for the quarter increased 4% currency neutral, or 11% in reported terms, to EUR 6.4 billion, reflecting the significant positive translation effect in the quarter. As I had mentioned earlier, our P&L was negatively impacted by several one-offs in Q3, Russia, cash pooling, customs risk, and a recently settled legal dispute. While I will give you the details in a minute, I would like to highlight the underlying Q3 P&L, excluding one-offs already at this point in time. While our reported gross margin declined 1 percentage point to 49.1%, the underlying gross margin, excluding one-offs, would have come in at around 50%, pretty much in line with the prior year levels. As usual, you will see the drivers of the gross margin development on the next chart. Other operating expenses grew 20% during the quarter, with the majority of the increase driven by the one-off costs and currency movements, in addition to investment into the brand, the launch of new products, digital and D2C. Our reported operating profit reached EUR 564 million, reflecting an operating margin of 8.8% as we continued investing into D2C and the launch of new products. Excluding one-offs, the operating profit would have been around EUR 800 million and the operating margin around 12% respectively, so somewhat above the prior level. Please note that the reported income tax figure of EUR 345 million includes both one-offs related to Russia as well as indirect tax implications from the Yeezy termination. As mentioned before, the tax implications related to the termination of the Yeezy partnership are also the reason why the final figure for the net income from continuing operations at EUR 66 million differs from the preliminary figures published on October 20th. This negative tax effect will have no impact on the full-year as it will be fully compensated by a related positive tax effect of similar size in Q4. Just for the sake of completeness, our net income from continuing operations, excluding one-offs, would have been around EUR 350 million. Turning to gross margin drivers for the third quarter. I would like to start with sourcing first. As mentioned in the past, we were already confronted with a strong increase in supply chain costs in the first half of 2022, which reflects a combination of significantly higher freight and product costs. In Q3, we saw a continuation of that trend. Second, our mix continued to be negatively impacted by the significant sales decline in Greater China, partly offset by a better channel mix amid our continued focus on D2C. Third, FX provided somewhat stronger tailwind in the third quarter, while we had already benefited from slightly positive FX in the first half of the year. Fourth, on pricing, as previously discussed, we had implemented first price increases on D2C exclusives in the first half and saw the consumer responding well to it. In Q3, our gross margin development profited from broad-based price increases at a mid- to high single-digit rate on average. At the same time, we faced increased promotional activity both in China as part of our efforts to clear excess inventory and also in major Western markets, which to some degree we had anticipated in the summer already, given that the supply shortages of the past 12 months, which had led to unusually high share of full price sales, had come to an end. However, given the slowdown in consumer demand and the inventory buildup in the marketplace, the level of discounting that we have been experiencing since September was more significant than initially expected. Increased promotional activity given the high inventory in the marketplace will continue to weigh on our gross margin during the remainder of the year and is one of the reasons for our adjusted gross margin guidance of around 47% for the full-year. This implies a gross margin of around 40% in Q4 and, as a result, a significant deterioration versus the 49.7% achieved during the first nine months of the year. In addition to the aforementioned discounts, we expect a significant impact from unfavorable currency movements for two reasons. First of all, this relates to the unhedged portion, which given the strong appreciation of the US dollar versus the euro and other currencies, is having an increasingly large effect towards the end of the year. Second, all of the spring/summer 2023 products that we are shipping in December will already carry the significantly less favorable hedging rate for next year. Furthermore, the termination of the adidas Yeezy partnership will also leave its mark on our gross margin as this represents very high price product, which is to a large degree sold through our own channels and at very limited discounts. On the positive side, these headwinds will be partly compensated by a more favorable channel mix in Q4 as wholesale restocking has come to an end. Let me now provide you with additional detail on the several one-off costs that are impacting the company's bottom line in the second half of 2022. First, the largest portion of the one-off cost is related to our decision to wind down our business operations in Russia. To give you some examples, these include costs related to terminating lease agreements, permanently closing our stores, as well as costs related to the write-off of hedging contracts, deferred tax assets, distribution centers, et cetera. The majority of these costs already occurred in Q3 with a minor portion expected in Q4. Second, we incurred one-offs related to accelerated cash pooling in high inflationary countries. While repatriating the cash comes at a cost which is reflected in our Q3 numbers, it still makes economic sense given the devaluation of the cash if it were to stay in those countries. Third, we are building higher provisions for a customs-related risk in Europe. While we feel quite strong about our position, we have already built a provision in Q3 and expect to do similar in Q4. The fourth one-off is related to a recently settled legal dispute related to a patent case which also had a negative impact in Q3. Lastly, we have established a business improvement program to safeguard the company's profitability in 2023 with negative one-offs to occur in the fourth quarter of 2022. I will get to the details of this a little later. I just provided background on the one-offs from a qualitative perspective. Let's now have a look at their size and the relative decomposition by type and P&L item. In Q3, we incurred one-offs in the amount of almost EUR 300 million on net income, with the majority related to Russia, followed by cash pooling, the legal dispute, and customs risk. If you take a closer look on which P&L items are affected above the net income line, you will see that around 50% occur within cost of sales, while the majority is related to operating overheads with around 55%, followed by financial expenses and income taxes. For the full-year, we expect to incur around EUR 500 million of one-offs on the net income level, while the majority of the full-year impact is also related to Russia with around 45%. Customs risk represent around 20%, followed by cash pooling, the legal dispute, and the business improvement program. With regard to the impact on different P&L items for the full-year, you can see that around a quarter of the EUR 500 million relates to cost of sales impacting our gross margin, while the majority is also expected to be reflected in operating overheads with around 55%, followed by financial expenses and income taxes. Now turning to the balance sheet. Looking at the end of Q3, our inventories increased 63% on a currency neutral basis or 72% in reported terms. The slowing consumer demand in major Western markets and a further deterioration of traffic trends in Greater China in September has clearly led to a significant inventory buildup for us and the industry as a whole. However, there are also other important drivers behind the significant increase, which I will discuss in a second. Receivables increased 4% currency neutral and payables were up 67% currency neutral. The increase of the latter is of course directly related to last year's factory lockdowns in Vietnam and the resulting significantly higher sourcing volume this year. Now let's take a closer look at the underlying inventory development. As you can see from the slide, EUR 1.6 billion of the total EUR 2.7 billion increase, so around 60% of the year-on-year growth is due to four special effects. Firstly, as you know, last year's stock level was significantly too low as the inventory position was impacted by the supply shortages as a result of the factory lockdowns in Vietnam. Part of this year's increase is reflecting the catch-up mechanism from last year. Secondly, we continue to see global lead times being approximately one month longer than usual. This means that we are ordering sooner to make sure our product arrives on time. It also means, however, that we are carrying one additional month of stock. Certainly, the strengthening of the US dollar drove part of the inventory growth. Lastly, the average cost per piece increased significantly. This increase is driven by higher freight costs, higher FOBs, and to a lesser degree, the different product mix. If you take these effects into account, this leaves you with around EUR 1.1 billion or 21% of underlying inventory increase, which is still quite significant, but at the same time, much closer to our order book and initial Q4 growth aspirations. When looking at the composition of the inventory, we definitely see an overhang of apparel inventory as the market is more fragmented, with more ability to trade down and more price-conscious, less brand-savvy consumer. On the footwear side, the strong momentum of our product, Forum, Adizero, Supernova, X, et cetera, differentiates us from the competition and helps us limiting the inventory increase and subsequent discounting. Region-wise, the inventory increase was the strongest in North America. The inventory normalization going forward will be driven by four distinct actions, mainly focused on North America and core Europe. Firstly, we will be clearing excess inventory aggressively and as a result, expect a significant impact on our gross margin in Q4 from higher discounting, something we talked about a few minutes ago. Secondly, we are significantly decreasing our overall buying volume for spring/summer 2023. Thirdly, we are lowering the planned purchases for our more than 1,000 factory outlets in order to have the space to clear our excess inventory. Finally, we will technically repurpose existing evergreen and carryover products. If you cannot sell that black yoga pant, a white training tee, or a regular Stan Smith now, the product can still be perfectly used in spring 2023. This might not be ideal in terms of working capital, but it helps us to limit the discounting in Q4 and generate an attractive margin next year as the product was still bought at significantly better hedging rates in 2022. Let me provide you some tangible examples from our inventory normalization plan for core Europe. We are now only operating with around 10% planned buys for our factory outlets, compared to up to 50% in a normalized environment. In terms of overall buying volume, we have reduced our buying volume for spring/summer 2023 by a double-digit percentage compared to the fall/winter 2022 season. Overall, our inventory level has peaked at the end of Q3 and is expected to decline from here onward. While the underlying decrease toward the end of Q4 will still be masked by an adverse impact from our decision to terminate the Yeezy partnership, we already expect a meaningful inventory reduction by the end of Q1, and by the end of Q2, we should be back to a normalized level. Let me now provide you with an update where we stand from an operational point of view. While we continue to face heightened uncertainty externally, we are making strong progress internally as we focus on the things we can control and double down on continued momentum in the majority of our strategic focus areas. We are posting exceptional growth rates in our performance categories. More than 85% of our markets are growing double digits and elevated physical and digital experiences are bringing our direct connections with consumers to the next level. Let's now take a closer look at all of these aspects. I just said that we are posting strong double-digit growth rates in our performance categories, which combined grew 16% in the first nine months of the year. Football was up 30%, running increased 16%, and US sports grew 28%. While the latter might be relatively small in size, it's important for the positioning of the adidas brand and its authentication in all important US markets is massive. Turning to the momentum we are enjoying around the globe, I will let the numbers speak for themselves. North America increased 14%. Europe was up 9%. Emerging markets + 31%, and Latin America grew 42%. All of these numbers are year-to-date September numbers. While our D2C focus is clearly paying off in all of these markets, let's not forget that we are also able to grow market share with our strategic alliance partners. Overall, I'm proud to report that markets representing more than 85% of our business, so including APAC, grew 12% in the first nine months. That's despite all of the macroeconomic challenges we have been confronted with. We have always said that D2C is our main playground and ensuring a seamless, enhanced consumer journey, a key priority for us as a brand. Physical experience plays a main role there, as we are inspiring consumers firsthand with three stripes products and stories. Recent improvements of our store fleet provide strong proof points for this elevated physical consumer experience. What they all share in common, true connections with the local culture, countless consumer-facing digital touchpoints, and integrated sustainability concepts with our latest product innovations at the core. At the same time, we are bringing our digital experience to the next level, especially our members benefit from a vast array of benefits in our end-to-end ecosystem. Our latest members week in almost 35 countries, offered our most exclusive brand stories in collaboration with Marvel's Black Panther or unique raffles with some of our top athletes like Lionel Messi, Donovan Mitchell, or Garbiñe Muguruza. Talking about our unique value proposition on World Mental Health Day, we announced a new partnership with Calm, the world's leading mental health platform. The partnership will kick off in the UK and the US with adiClub members being able to redeem points to unlock premium services, something no other brand is able to offer. On CONFIRMED, sneakerheads are going after our golden ticket that grants prioritized access to product drops or get invited to augmented reality raffles for a chance to win physical products. Speaking of combining digital and physical worlds, by scanning the QR code on our latest Made to Be Remade Ultraboost, consumers are offered detailed insights about the product sustainability credentials alongside a direct incentive to return the product to us and our recycled partners after usage. You have just seen that we remain focused on leveraging the momentum across our performance categories. The majority of our markets, as well as when it comes to the elevated consumer experience we are offering across all touchpoints. At the same time, we have to acknowledge that we are facing several market and company-specific challenges that we need to overcome as one team together with our nearly 60,000 employees around the globe. The good thing is, I know we have what it takes, and that overcoming these challenges will only make us better. While I have previously discussed challenges related to one-offs and excess inventory, I'm now going to focus on the current situation in Greater China, impacts from the Yeezy termination, as well as several cost headwinds we face as a company. Starting with Greater China. We continue to see several market-specific challenges that are affecting our entire industry. The strict zero COVID-19 policy with nationwide restrictions remains in place amid more than 2,000 daily new COVID-19 cases in November. As a consequence, offline traffic is subdued due to the imminent risk of new lockdowns. In addition, local lifestyle influencers are still hesitant to collaborate with Western brands. While these challenges are industry-wide in nature, we also have to admit that we face additional company-specific challenges. Due to the slower than expected recovery from the market-specific challenges just mentioned, our inventory levels, which were higher at the start of the sluggish market and development, remain significantly elevated and will keep us busy for some more months. In addition, we have been highly dependent on lifestyle influencers historically, making us more exposed to the sudden loss in followership last year. Our somewhat more limited sports partner portfolio hasn't helped either in this situation. While we continue to make huge progress on our digital capabilities, activities, and reach, our ability to interact directly with the Chinese consumer, which is particularly important nowadays, is somewhat more limited. When taking a closer look at the effectiveness of our marketing initiatives, we need to acknowledge that while localized, we run too many small campaigns, creating too little impact on our target consumer. Ultimately, our point of sale landscape lacks efficiency due to a retail footprint that is not differentiated enough. Let me be very clear. We are aware of both the market and the company-specific challenges, and our teams work diligently on executing the comprehensive turnaround plan to set our business in Greater China up for success. This turnaround plan includes distinct initiatives aimed at different parts of our business. To drive a normalization of inventory levels, we are reducing orders for upcoming seasons and are executing inventory takebacks to clean the full price channel for the launch of new product innovation. We will continue to leverage our factory outlets and upcoming commercial moments to speed up this process. To put our progress into perspective, we already executed inventory takebacks in the amount of more than EUR 200 million in the third quarter. The other half of the previously communicated EUR 400 million takebacks in H2 will follow in the fourth quarter. While both our local creation center and in-house marketing agency are already driving an increased degree of localization, we are moving away from the previous activation model centered around lifestyle influencers and shift gears towards social, communities, membership, and closer to the point of sale. In addition, we have started to significantly right-size our China organization to reflect the current size of the business and growth profile. At the same time, we are increasing our focus on building our sports partner portfolio and just recently have signed an agreement with the Chinese Tennis Association, while also increasing our efforts into grassroots marketing. Accelerating the scaling of our own digital ecosystem in China will continue to be a priority alongside the ongoing rebranding of our adiClub membership program. To better differentiate our retail footprint, we are diligently reassessing the efficiency of our retail fleet, closing unprofitable stores, while at the same time continuing to invest in key cities and locations. Now turning our focus to Yeezy. As publicly communicated on October 25, we had terminated the partnership with Ye immediately, ended production of Yeezy branded products, and stopped all payments to Ye and his companies. This decision is expected to have a short-term negative impact of up to EUR 250 million on the company's net income in 2022. I can confirm that adidas is the sole owner of all design rights related to existing product as well as previous and new colorways under the partnership, and we intend to make use of these rights as early as 2023. Let's have a more detailed look on the incremental Yeezy business. Given the high seasonality of the Yeezy business, where we are typically generating around 1/3 of the total annual revenues and almost 40% of the annual profit contribution in Q4, we expect the revenue shortfall related to the immediate termination of the partnership of around EUR 500 million. As mentioned, the expected net income shortfall is forecasted to reach up to EUR 250 million in Q4. In this context, let me emphasize that the implied profitability of the Yeezy business is overstated due to the fact that its cost only includes those expenses that are directly related to the product and the business. In other words, it does not include any further central cost allocation for sourcing, digital, retail or any other services that this part of our business has been benefiting from and that were essential for its success. Going forward, we will leverage the existing inventory with the exact plans being developed as we speak. At the same time, we will save around EUR 300 million related to royalty payments and marketing fees. In combination, this will help us to compensate the vast majority of the top and the bottom-line impact in 2023. Talking about 2023, we forecast several cost headwinds. First, the strengthening of the US dollar against the euro will have an adverse effect as our sourcing is mostly dollar-denominated. Second, FOBs are expected to increase driven by higher raw material and product costs. Third, freight rates are still forecasted to be at elevated levels. Fourth, we expect salary adjustments to compensate for inflation. To tackle the challenging market environment and mitigate these cost headwinds, we established a business improvement program to safeguard our profitability in 2023. The program consists of eight structural initiatives in four areas. Let me now provide you with some examples for each of the four areas. Across our headquarters functions, we will adjust the size of the organization to the size of the business and installed a hiring freeze since mid-September. In addition, we will accelerate the expansion of our global business services footprint and expand the scope of it. In brands, we are increasing our marketing efficiency by focusing our brand spending and activation efforts on key countries, cities and franchises, as well as optimizing the effectiveness and efficiency of all communication layers. In our markets, we have launched an operating excellence program to improve our retail profitability as well as to optimize our store footprint, pricing architecture and discount desk. Ultimately, in global operations, we are implementing FOB mitigation measures by consolidating our material toolboxes, the range size, prioritizing our IT spend towards initiatives linked to D2C growth and consumer experience enhancements, and assessing levers to reduce return costs. While the program will result in one-offs of EUR 50 million in the fourth quarter of 2022, the program is expected to compensate cost headwinds of up to EUR 500 million in 2023. In addition, it's expected to deliver a positive profit contribution of around EUR 200 million next year. The total positive impact from the eight initiatives next year will be around EUR 700 million. That brings me to the outlook. Let's start with our expected top-line growth profile, both for Q4 as well as for the full-year 2022. On October 20th, we adjusted our full-year top-line guidance to mid-single-digit growth as a result of the deteriorating traffic trend in Greater China, implying a mid- to high-teens increase for the total company in Q4. After the decision to terminate the adidas Yeezy partnership on October 25th, we subsequently had to incorporate the expected revenue shortfall of around EUR 500 million into our expectations for the fourth quarter and the full-year 2022. As a consequence, we now expect currency-neutral revenues in Q4 to grow at a mid-single-digit rate, resulting in low-single-digit growth for the total company in fiscal year 2022. If you go back to the monthly growth profile, you can see why three weeks ago we had still been optimistic to be able to grow at mid- to high-teens rate in Q4. In October, our revenue growth accelerated to more than 20%, supporting our optimism about the top line development during the remainder of the year. However, as you all know, the strong underlying improvement will now be masked by the around EUR 500 million adverse revenue impact from the termination of the Yeezy partnership I had just explained. This doesn't change our positive view on the underlying sales development, which in the fourth quarter will be supported by three main growth drivers. First, the FIFA World Cup. As mentioned before, we expect a tailwind of up to EUR 400 million event-related net sales overall, with the majority of this benefit to occur in Q4 as we prioritize our own D2C business. Second, our comprehensive product pipeline. I have highlighted the underlying momentum in key categories, and there's much more to come in Q4, including the launch of adidas Basketball, technical running innovations, and the scale-up of our sportswear offering and further premiumization of lifestyle. Third, and on a more technical level, significantly easier comps as we will be running against the EUR 400 million top line drag from the supply shortages in Q4 2021. Let us now take a closer look at the first two buckets. With only a few days away to go until kickoff, our products will be omnipresent on the world's biggest stage, the FIFA World Cup. We started to launch event-related product back in March by revealing the ultimate official match ball, Al Rihla, driving nearly 50% net sales growth on football accessories and gear year to date September. In a phased approach, our official federation kits followed in the summer with strong consumer and media feedback. After the official match ball and kits, we complete our hero product offering with the introduction of colorful World Cup editions of our key football footwear franchises, X, Predator and Copa. Lastly, we will continue to leverage consumer excitement as things get serious on the pitch and are going to launch the official semi and final match ball in December. During the World Cup, we can build on a unique roster of more than 100 players. A core element of our activation plan are two dedicated campaigns. In the first campaign, which we'll launch tomorrow, adidas is creating the world's biggest football family reunion, spotlighting the fun in the game with interactive experience across social media platforms and a focus on Gen Z. Stay tuned for that. As part of the World Cup, we are going to endorse our product beyond the football category itself, across other key categories with the strong support of our players. We have carefully curated the product to be worn by our players and federations, not only on the pitch before and after the game, but also for training and lifestyle. As a result, and for the first time ever during a World Cup, you will see all three labels of our brand architecture come to life with dedicated product, performance, sportswear, and Terrex. We will leverage the unique setting and timing of this year's event, and for the first time ever, also offer winterized packs, given the northern hemisphere market needs. Our bold story of the world's biggest football family reunion will be consistently executed with an integrated omni-channel approach across the point of sale, digital and membership. All styles and tools used are designed in a modular way for different store formats and countries, ensuring consistent retail activation. In terms of digital, we will provide emotional experiences and optimized shopping journeys across our ecosystem, with planning right down to the daily level. Ultimately, our members will experience it all in the most exclusive way as we leverage our partners, provide selective campaign extensions, as well as hyperlocal physical events. Bringing it down to market level, we will use the unique opportunity to accelerate our underlying momentum in the emerging markets. From bringing our global campaign to life at the local point of sale, to augmenting the store landscape with pop-up stores, to introducing hyperlocal product and dedicated experiences at airports and fan zones. I think I can say it's going to be one of the best event activations in a long time. I'm definitely looking forward to the first whistle. Shifting gears and introducing the next big highlight, adidas Basketball. Our ambition for adidas Basketball could not be clearer. We are reimagining and disrupting the category with a lifestyle-led strategy and holistic end-to-end product offer across our brand architecture. First, we are authenticating adidas Basketball from the street to the court, while acknowledging that performance on the court drives credibility. Second, Jerry Lorenzo and Fear of God represent the pinnacle expression and new visual direction of adidas Basketball. Third, our marketing strategy focuses on next-gen athletes, partners that are part of the culture that surrounds the game and global activations. Talking activations, we have already kicked off the adidas Basketball launch with new versions of the Donovan Mitchell and Trae Young signature shoes, while Forum already represents our fastest-growing footwear franchise. All of these already have a direct link to the new creative direction of adidas Basketball. Rest assured, our new vision will also be properly introduced with an iconic anthem film in November to build up hype and anticipation for the official launch of adidas Basketball at the Fear of God Athletics presentation. Afterward, we'll drop our big moment, marking the first time we bring this vision to life and showcase our adidas Basketball proposition across all three labels. Ultimately, we will unveil the top of the house of basketball, the first Fear of God Athletics collection, which will enter our stores through immersive store takeovers, accompanied by an elevated online experience. Lacing up for running, where we celebrated Evans Chebet's impressive win in New York last weekend. Chebet crossed the finish line in two hours, eight minutes and 41 seconds, making him the first man to win the Boston and New York Marathon in the same year since 2011. It is also his fifth win in the last six marathons. So far in 2022, our most prominent technical running franchise, Adizero Adios Pro 3, delivered major marathon wins in New York, Boston, London, Chicago, Berlin, and at the World Athletics Championships in Oregon. Our strong double-digit growth year to September speaks to our ability to leverage this running credibility for the scale-up of everyday running franchises like Supernova or 4DFWD. We're not stopping there. Inspired by the success of our athletes, we continue to bring performance innovation in the market and just launched the Adizero Prime X Strung, featuring a data-driven footwear upper coded thread by thread for the long-distance runner. Moving on to sportswear at the junction of lifestyle and performance. After a successful launch of the first capsule collection, we introduced the second chapter of our new Gen Z specific offering with supremely comfortable as leisure wear for the colder season. As you saw previously, sportswear will also play a major role off-pitch around the World Cup in Qatar. Talking lifestyle, our most hyped fashion partnerships, Balenciaga and Gucci, continue to make headlines around the globe. While the Balenciaga product was revealed at an iconic Wall Street fashion show earlier this year, we are now dropping exclusive product through a series of dedicated pop-up stores and our CONFIRMED app. In addition, the overwhelming success of our first adidas x Gucci product drop is a clear proof point that we're on the right track with our strategy to premiumize our lifestyle offering. This also helps us to elevate our Originals proposition with a similar style to the latest adidas x Gucci drop, but at more affordable price points. The Adicolor 70s collection draws heavily on the historic silhouettes and classics such as the Gazelle. This is just the beginning of us leveraging our fashion partnerships for growth in Originals. Let me now give you an overview of our top-line outlook per market for 2022. I want to make it clear that this outlook reflects the further deterioration trends in Greater China and also incorporates the decision to terminate the Yeezy partnership. For Greater China, that means that we now expect currency neutral revenues to decline at a strong double-digit rate in 2022. The decision to terminate the adidas Yeezy partnership reduced our growth expectations for North America, EMEA, and Asia Pacific. Accordingly, we now expect mid-teens growth for North America, high single-digit growth for EMEA, and mid-single digit growth for APAC. Our growth expectations for Latin America remain unchanged. For total adidas, we now expect revenues to grow at a low single-digit rate in 2022. In addition to the deteriorated traffic trends and the impact from the termination of the Yeezy partnership, our profitability is also impacted by the higher clearance activity to reduce inventory levels and the one-off cost of around EUR 500 million. Incorporating all of these effects, our gross margin is now expected to reach a level of around 47%. The operating margin is expected to come in at around 2.5% in 2022, and net income from continuing operations is forecast to reach a level of around EUR 250 million. Before we conclude this presentation, let's now have a quick look at the underlying net income development in 2022 and the major puts and takes for 2023. While we will only provide our detailed guidance in March next year, I can already share with you that we expect a strong bottom-line improvement in 2023. This shouldn't come as a surprise, as the non-recurrence of the EUR 500 million one-off cost will have a similar positive impact on the net income development in 2023. In addition, our business improvement program will not only help us to mitigate cost headwinds of up to EUR 500 million next year, the program is also expected to deliver a profit contribution of around EUR 200 million in 2023. So far, so good. The further development of our profitability will largely depend on things that are mostly outside of our control. I have discussed adverse impacts of the development of consumer sentiment, FX or freight rates before. As a result, we focus on the things we can control. First, build on our underlying momentum. Second, drive our lifestyle business. Third, continue to elevate the consumer experience. Fourth, diligently address the challenges we face. We will closely monitor the environment and adjust our game plan whenever needed, switching between offense and defense, depending what the situation allows and requires. Before I sum it up, let me provide you with the effects on our CEO transition. As you heard yesterday, Bjørn Gulden is appointed as member of the executive board and CEO effective January 1, 2023. Kasper will step down as our CEO at the end of this week. In the interim, I will lead the company until year-end. To sum it up, we will leverage our continued momentum in key categories, markets, and D2C to drive strong underlying top line growth in the fourth quarter. We are excited about the upcoming FIFA World Cup and will leverage the world's biggest event for bold storytelling and the reveal of our unique product pipelines across a number of key categories. In addition, we will be diligently executing our actions, action plans to overcome market and company-specific challenges. Ultimately, the appointment of Bjørn Gulden ensures a smooth and timely CEO transition. We know Bjørn well and look forward to working with him and to a successful future for our company. With that, I'm very happy to take all your questions. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. First question is from the line of Jürgen Kolb from Kepler Cheuvreux. Please go ahead. Thank you very much and a special thanks for all these detailed information. Really quite comprehensive given obviously the lots of information we received over the last couple of months. I know it's very difficult, Harm, to you know even talking about the next months, but you have not talked about maybe the longer term implications of all that we've seen. I think all have still in our minds that you put our 2025 targets. Given this environment, maybe you have some additional comments on that level here. Probably an easier question on the inventory level. Could you give us a little bit of a breakdown as to how much of the inventories is kind of never out of stock products? How much is seasonal products? Just to get a better feeling about the quality of the inventory level. Thank you very much. Yeah. Thank you. I'm still trying to get my voice back here after the 55 minutes. First, on the longer term, 2025, I know you're all interested in what it means for Own the Game. The strategy is in place. We focus on executing it. Given where we are and the volatility that we have in the marketplace and around the world, we are laser sharp on focusing on 2023. Finishing the year strong and focusing on 2023. That's why we refrain from talking about 2025 at this point. On the inventory levels, the good news really is, as high as the inventories are in the industry and for us. It's all fresh inventory, and we are very diligently going through that inventory, whether it's apparel or footwear, you know, what is really evergreen, what is probably more seasonal. The vast majority of that can be reused for spring/summer 2023 or the respective quarters in 2023. Again, in hindsight, even some benefits because we bought them at better hedging rates, and at lower FOB. Even though it's not looking good on the inventory level, it's an opportunity for us to start, you know, fresh in 2023 and utilize that inventory. The good news is it's largely fall/winter 2022 inventory in Europe and North America. Okay, thanks very much, and best of luck. Thank you. Next question is from the line of Warwick Okines from BNP Paribas Exane. Please go ahead. Yeah, thanks very much, Harm. You talked about the weakness in the US and EMEA in September. I was just wondering if you could give a bit more detail around the sort of categories where you saw most of the slowdown, what areas of the business, or was it across the whole board? And then just in terms of China, you talked about right-sizing your store portfolio. How many directly operated stores do you have and how many have you closed year to date, please? Yeah, thanks, Warwick. First, when we talk about the weakness in September, I mean, some things we talked about before when consumers are coming back from their vacation and back to school, I mean, that's something we saw that slowly coming in in September. When it comes to categories, it's not really categories, you know, in specific, but it's rather apparel than footwear. That's where we see it's a more competitive marketplace in apparel than it is in sporting goods and footwear, where we can differentiate much clearer. Apparel there is really the product type where we see some downtrending and price sensitivity. That's on the September side. On the sizing of our point of sale in China, historically we had around 12,000 points of sale. Right now we are finishing around 8,000-9,000, you know, points of sale in China. This is what we're evaluating going to next year as well, that we make sure that we are closing unprofitable stores and make sure that we not just have fewer points of sale, but also bigger points of sale and differentiating these points of sale through the category-specific, you know, setups. That's what we are focusing on. We believe this might not be the end, but from a square footage or square meter point of view, we are getting close to the end because it will be more impactful stores going forward. That's probably the size that we have, 8,000-9,000. Thanks very much. Next question is from the line of Adam Cochrane from Deutsche Bank. Please go ahead. Hi, good afternoon. A question on the business improvement plan. You talked about the EUR 700 million benefit. Is this an annualized number or are these programs all taking place in the next couple of months so that they benefit from the first of January or do they build throughout the year? Would you be able to give us some flavor for how that develops over the quarters? Secondly, I've got a number of people asking about how the Yeezy product lines will work. Is the plan just to rebrand them as adidas, and can you achieve the same price points, et cetera? What are you, at the moment at least, intending to do about that? Thanks. Yeah, first on the business improvement program, I mean, clearly look at the EUR 700 million as an annualized number for 2023. These things have started already a couple of months ago, knowing what's coming towards us. It's clearly an annualized numbers, but it's in the motion already, but annualized for 2023. On Yeezy, very clearly, I want to repeat again that we are the sole owner of the IP rights, of current and future colorways. Of course, we have a lot of things, you know, in the archive as well. Definitely, the different plans that we are vetting right now, again, too early to say, you know, when and how we come up with these plans, but it's definitely, you know, current products, but also, you know, future products. As you say, not under the Yeezy label, but we also look at the current inventory that, you know, is relevant enough to close the gap in 2023 compared to 2022. Okay, thanks. Next question is from the line of Geoff Lowery from Redburn. Please go ahead. Yeah, hi, team. Just one question, please, on China. Do you have any sense of what the sell-out of your product in China is in the market? Because obviously we see a blended number between your sell-in and your DTC operations. Do you have any flavor of what the sell-out is? Secondly, on China, your comment about global inventories being normalized by the middle of next year, does that also apply to China specifically? Many thanks. Yeah, Jeff, first on China. Yes, we have visibility of the sell out. One indication that we you know said on the call as well is retail 7% up. Of course, as we are taking products back, we get fresher product in and that whenever we do that, and it's not because it's take out EUR 200 million in Q3 and EUR 200 million in Q4, but whenever we clean the marketplace and create space for new product, the sellout is improving of course in a much better way than the net sales are showing because it's sellout of fresh products. That's what we're seeing. Yes, it relates on the inventory cleanup in China as well. It will not be, you know, clean by the end of the year, but it's similar to what I said across the board for North America, Europe and China. We're also expecting to be at a much cleaner level by the mid of next year, which gives us, depending on the zero COVID policy and everything, but definitely a cleaner start going to next year. As I said, Q2 should be the first significant, you know, growth quarter next year, as Q1 was still a significant quarter and Q1 2022 in China. The second half is definitely what we're looking towards in China with the inventory being normalized. Great. Thank you very much. Next question is from the line of David Roux from Bank of America. Please go ahead. Good day, Harm, and thanks for taking my questions. Just two from my side. Firstly, on Yeezy. You spoke about the central costs supporting the Yeezy business away from the marketing and royalties, which I think was EUR 300 million. On the essential costs, I mean, what flexibility do you have to perhaps reduce these costs in the event that you don't perhaps get the revenue recovery on some of those Yeezy products that you're anticipating? Then my second question is on the China turnaround plan. I assume this will take some time to implement. How should we think about the cash costs associated with this plan? How are you thinking about the returns on this in terms of whether it's margin improvements or growth? Thank you. Yeah. First, on the Yeezy and the central cost, of course, there's some flexibility in it, but not all the flexibility. It was important for me to explain that we always look at the profitability of Yeezy, and we gotta look at that as an incremental profit, and that's really important because we have built an infrastructure. If we now, you know, scale after being somewhat muted on Stan Smith, for example, if you bring Stan Smith back, it's also an incremental profit at a very attractive margin with no additional cost. That's why I think we shouldn't get carried away of the single profitability of Yeezy 'cause all incremental on the, you know, platforms that we have built and any other products that we are scaling right now, whether it's the Forum or Stan Smith going forward or new products, will get the same benefit as we are incorporating with the Yeezy net sales. Again, on top of it, if we will not be able to compensate it fully, there's some flexibility in the cost, but there's definitely some fixed costs as well. On the China piece, do not expect additional, you know, cash, you know, impact on this one. We have built the plan already. It's in full motion. It's already, you know, underway and will come to fruition next year. The most important thing in China is, of course, on the one hand, getting normalized from an inventory point of view, and then getting our sports portfolio in the right, you know, place. Hopefully after zero COVID policy and some opening of China, that we have a better ability to get the one or the other influencer back as well. That just needs to be the first one, and we are very confident then the second and the third one will come very quickly as well, which will help us to represent us as a Western brand and a successful brand in China again. That's pending zero COVID and all the influencers, how quickly they will come back. Everything that we showed today is in full motion with no extra cost in 2023. That's helpful. Thank you. Next question is from Thomas Chauvet from Citi. Please go ahead. Good afternoon. My first question is a follow-up on Yeezy. You suggest you'll compensate the vast majority of the revenue and profit shortfall by rebranding the product, not paying the royalties and marketing. If that's the credible base case scenario, what was the rationale for doing this partnership in the first place and become so dependent on one single partnership if you could have achieved the same results without this artist? Keen to understand also how you want to approach collaborations in the future with existing or new partners. Secondly, what was the dedicated marketing spend for Yeezy as a percentage of sales? Will you reallocate a significant portion of that spend towards other lines? If so, what will be the priority between, you know, pushing Jerry Lorenzo, original or luxury collaboration, which have been much more visible this year? Just finally, if I may, to clarify some accounting, just small accounting question. In which part of the P&L were the royalties paid for the Yeezy contract captured within EBIT? Can you comment on risks of disputes over the termination of that contract? Anything we need to be aware of, especially for 2023? Thank you. Yeah. Thomas, lots of questions. I'm not sure that qualifies for two questions, but let me try to answer all of these. First of all, on the Yeezy collaboration, I mean, we said it numerous times, it has been probably the most successful collaboration ever done between, you know, an influencer musician, and a sports brand. So we have been proud of what we have built together. Again, it came to an end, as we said earlier, for the right reasons. But again, these collaborations will continue with other, you know, influencers as well. That is part of our business model. I don't understand the question why we have done it to begin with. But it's always something in the short term that we can compensate. In the midterm, we have a portfolio of influencers, a portfolio of, you know, sports, portfolios of, you know, musicians or influencers, and that's always the approach. That was the most successful one, and that's why it's not, you know, easy to replace in the short term. That's what we see in this year. We are confident through other collaborations to scale them up and through our product portfolio to compensate for it. Again, there will always be collaborations that we will build on. On the marketing spend, the EUR 300 million that I mentioned, it's a combination of royalty and marketing spend that will be not spent any more in 2023 because that was linked to the label of Yeezy, which we're not gonna use on new products, you know, going forward. As I said, there's always different portfolios. We will continue to work with Jerry Lorenzo. We will have a Bad Bunny, we have a Beyoncé, and of course, we have a lot of sports athletes that we are working with. This is part of the investment into the bigger brand and gives us halo to begin with. That's what Yeezy definitely did for the last couple of years as well. I think the last question was the accounting question, where the royalties will be booked. They're clearly in the EBIT and the royalty payments you would have found in the gross margin. Some of the marketing spend would've been in the marketing line, but the majority of the EUR 300 million you would find in the gross margin. Oh, the last question. There's another one. Maybe it was the fifth one, the risk of disputes. We believe we have a very solid contract in place that we of course terminated. So at this point, I would not be concerned about any disputes or any costs that are not even accounted for in 2022, but definitely no disputes going into 2023. Thank you, Harm. Next question is from the line of Omar Saad from Evercore ISI. Please go ahead. Thanks. Good evening. Thanks for taking my question. I was hoping maybe you could dive in a little bit deeper, what to expect with the basketball Jerry Lorenzo rollout, kind of size and breadth, timing. Also, maybe a little bit deeper on the running commentary, I think it's up 16%. How much of that is being driven by some of the new products? Then also, lastly, an update on the Originals business, especially some of the opportunities in North America, including the Foot Locker partnership. Thanks. First of all, on basketball, again, I wouldn't do justice to explain how deep the basketball, you know, launch will be from a product point of view. We will launch kind of the full set, not just what we launched then in December and early next year. What you will see in the launch events in December is the full breadth and depth of the basketball, you know, category, even though it doesn't all launch in the first months. We wanna make a big event that the consumer and of course the media sees the whole, you know, size and the ammunition that we have in basketball. Even so, it will be staggered from a launch point of view going into next year, month by month. On running, I mentioned to you earlier how successful also the Supernova is. The whole concept from hero to halo and building credibility first through the marathon wins that we have, and then commercializing these, you know, technical silos and more technical silos to come going forward with the, you know, Lightstrike technology and everything that is coming in 2023. That is always the concept and is working given the growth rates that we have. I could not tell you or would disclose in details by franchise, you know, how we commercialize that. Rest assured, with the growth rates that we have and that we continue to have next year, that is a hero to halo concept that is working. Maybe you can repeat the Foot Locker question. I'm not sure I captured that correctly, Omar. Sorry. Yeah. Both Originals and in the U.S. Foot Locker channels that we think you guys have highlighted as opportunities for the brand. You know, the Originals relaunch when a lot of that product hits the market, and then Yep. You know, the Foot Locker opportunity to expand the space in Foot Locker. Where do we stand on that? Thanks. Yeah. First and foremost, it was important for us to have a strategic, you know, partnership with Foot Locker that we have announced because we want to be more than just a product of Foot Locker. We are rolling out significantly, with significant investment outside the footwear walls. Whenever we do that at Foot Locker, we get much higher comps to, you know, prior to the footwear wall, you know, rollouts. Key to that is also not just the Originals product that we are bringing out, whether it's the Forum or the Rivalry that is coming soon, but also the setup is basketball is fundamental for the consumer that is shopping at Foot Locker. The combination of partnership first, footwear sales significantly across the US into many Foot Locker doors, much better comps, richness with new products coming in, and then basketball as a key, you know, opener to the Foot Locker consumer. That is definitely, you know, working so far, but it's a plan to accelerate that going into 2023. Thanks, Harm. Next question is from the line of James Grzinic from Jefferies International. Please go ahead. Yes, thank you. Good afternoon. I had two quick ones. The first one is, Harm, can you perhaps provide us with a split of inventory across apparel and footwear? To just get an understanding of how that average position really looks like in the two categories. Secondly, where do you think the overall marketing spend will be in 2022, and how, given your cost savings program, how do you expect that to develop in 2023, please? Well, James, first on the inventory, I mean, what I can tell you is that the increase is higher in apparel than it is in footwear. That we also said we want to be more promotional on the apparel side than on the footwear side. That's what I can tell you about apparel without going into further details. On the marketing spend, don't expect any fundamental change from a percentage of our net sales, neither in 2022 nor going into 2023. Maybe going the right direction in 2023, but we wanna see what really the flexibility is that we have in 2023. That's part of our business improvement programs, that we not just keep the ratio on a probably different net sales than we originally had planned on Own the Game. depending on what the net sales development will be in 2023, we want to at least keep the ratio, but potentially get better as we want to be as we want to get more out of what we spend, you know, in 2023. So far, we haven't had such a crisis or such a profitability for many, many years as we experienced in 2022. Now it's clearly a wake-up call to, you know, look at every euro again to do it more effectively in marketing and get more for the bang or for the buck, what we invest. Clearly keeping the ratio or better. Great. Thank you. Next question is from the line of Aneesha Sherman from Bernstein. Please go ahead. Hi. Thank you. I have two questions. The first one is on China, you know, kind of looking at that business medium term. You've talked about cutting back orders, closing unprofitable stores, significantly reducing your footprint. Is it right to say that you're looking at perhaps a smaller and more profitable business medium term? And related to that, you know, last quarter, you talked about a medium-term margin target of 30% over time. How do you see that playing out? Is that still the target that you're envisioning with the store closures and profitability, or does that ramp up the target? My second question is on the DTC versus wholesale performance in North America and EMEA. There's obviously a difference in performance between the channels there. I'm curious, was that mainly due to kind of mixed effects and pricing or underlying demand, or were there some takebacks embedded in there? What's driving that differential? Thank you. Yeah. First on China. Clearly we believe in the midterm opportunity in China, but we also believe, given where we are with still a lot of lockdowns and muted consumer sentiment in China, and China has not opened up, it's really important that we get stronger before we get bigger. We are very confident to get to the right profitability, you know, in the short to midterm first, and then as the market is opening up, which we don't know when it's opening up, but when it's opening up, we want to be prepared that we have the right size inventory, that we are back to a, you know, better profitability. I'm not saying right now 'cause we gave the guidance in March that we get immediately to, you know, a 30% profitability again. That's the number one priority. When the market opens up, we believe the Western brand is well-positioned in China again and we can start growing significantly in China again. Clearly we believe in the midterm, we believe in the growth in China, but the market needs to open up. We wanna make sure that inventory is right and we are working on the profitability relentlessly to be ready for growth when the market is opening up. On DTC, you're right. I mean, DTC was growing faster in Europe and North America, and the reason is when we saw a more muted, you know, September, that we also made the decision to sell in more cautiously into wholesale as we are selling through in our DTC. Of course it's impacting some of the, you know, tremendous order books that we have where the conversion wasn't at the level that we used to have. So that's a result of that. We could always convert the order book, you know, better, but we also wanna make sure that we are not shipping in more than the consumer or our accounts can sell through. That's what we try to balance. That is clearly the effect, and that's why DTC is growing faster. Ms. Sherman, are you finished with your questions? Yeah. Sorry, I was on mute. Yeah. Harm, can you clarify? When you said the conversion wasn't as good, does that imply that you had some takebacks in there as well? Or was it just that you pulled back orders or you pulled back delivery of orders for the current fund? It is clearly the latter. There's no takebacks. It's the latter that we made the decision not to convert the full order books then, given the inventory situation. Got it. Thank you. Good. We have time for two more questions. Okay. Thank you, Sebastian. The next question is from Simon Irwin from Credit Suisse. Please go ahead. Hi. Thanks for taking my call. Could we just drill a little bit more into the numbers on Yeezy, in terms of the impact through 2023? I mean, given what you've said about the sales and EBIT impact in 2022, is it right to think of this business as being about EUR 1.8 billion in terms of sales? If you just pro forma the initial EBIT, then you're talking about something in the region of EUR 1 billion. Now obviously take off the EUR 300 million in terms of royalties and marketing you talked about, but you still end up with a net year-on-year decline of EUR 500 million. Is that what you think you can fill by reselling the Yeezy product? What do you think about the reputational risk of selling that Yeezy product, you know, even under an adidas label? Yeah. Simon, first, let me give you some more details on the Yeezy business. As mentioned, we will leverage the existing inventory that we have, which, with exact plans being developed as we speak. That should really help us to compensate the vast majority of around EUR 1.2 billion, around a EUR 1.2 billion business in 2022, right? That was the plan. It's not a EUR 1.8 billion that we need to anniversary. It is around a EUR 1.2 billion business that we need to anniversary in 2023. At the same time, in 2023, we will save on the EUR 300 million in marketing and royalty, as I mentioned earlier. We are far away from an EUR 800 million impact or EUR 1 billion that you mentioned. In combination, this will enable us to mitigate the vast majority of the bottom line impact of around EUR 400 million in 2023 as well. Again, looking at all the costs and the infrastructure and how we're gonna scale other product lines, so we are more compensating a EUR 1.2 billion in the top line and the EUR 400 million bottom line. That's how we look at it. In fact, given the large savings, it will be even easier to achieve rather the profitability in 2023 rather than the top line. That's how we look at it. Again, how we do that exactly, how we use the archive, how we utilize the existing inventory, how we rebrand, what we do with these products, we gotta do carefully, as you say. There might be some reputational topics that we need to be aware of, but at the same time, we also believe it can be done well. We own the IP, and we want to be confident about the IP and the silhouettes that we have and maybe some of different colorways. We are confident about executing the right plan. When we have decided what the right plan will be, but there are different options. Okay, thank you very much. The last question for today is from the line of Graham Renwick from Berenberg. Please go ahead. Mr. Renwick, can you please unmute your telephone? Hello, good afternoon. Sorry about that. Thanks for taking my questions. I just have two. Just thinking about momentum into the first half of 2023. You had a good step up in Q4. On the last call, you very helpfully provided us your growth in order books H2. I was just wondering how they are shaping up for H1. You've talked of a stronger product pipeline, but you're also a bit more cautious on buying for spring/summer. So just wondered what sort of growth order books are currently indicating into the first half. Just on 2023 net income, just wondering how we should interpret the net income bridge and the EUR 950 million start point you've given. There's a list of moving parts, of course, but the shaded area of the bridge looks to suggest you expect slightly more negatives than positives. I'm just wondering if we should be currently assuming that net income next year should be somewhere between EUR 750 million and EUR 950 million. Thank you. Yeah. Hi, Graham. First on the 2023 momentum. Not gonna comment on Q1 or Q2 right now. I mean, we give the guidance in March, and then we will give the guidance in March. We're not gonna comment on that at this stage. Secondly, when it comes to the net income bridge, as I mentioned, there's a lot of puts and takes we can only you know, speculate about the magnitude, whether it's in freight rates or the easy mitigation plan. In some cases it even remains uncertain whether the impact is going to be a positive or a negative. If you ask me today, I would indeed see a higher likelihood that there's some negative drivers while there will be some positive drivers. Again, it can clearly change. I have to admit, even as the CFO, I've never been in a situation in November to prepare a plan also to advisory board in such a volatile environment. We wanna keep it open, but we wanna make sure that we are rather focusing on the actions that need to be taken. We will come out in March with the right guidance. We remain confident with the product pipeline that we have. We always will, you know, play by the month, whether it's offense or defense. We wanna make sure that first and foremost, we have flexibility in the plan and that's what we need to get prepared for. The volatility and all the crises that we deal with since two and a half years will not go away in the short term. That we wanna keep some flexibility and give the right guidance in March and take the time. There's not an easy, you know, situation right now, but let's get used to the volatility and rest assured we give it a good shot in March then. Okay, great. Thank you, Harm. Thank you. Thanks very much, Graham. Thanks very much, Stuart, and thanks very much, Harm. Also thanks very much to all of you and thanks very much to everyone who sticks to our two question rule. Ladies and gentlemen, this concludes our Q3 2022 results conference call. I can only echo what Harm mentioned at the beginning. If you have any further questions, I can imagine that there are still going to be a few, be it today or over the next couple of weeks. Please feel free to reach out to any member of the IR team or myself. Actually, we're very much looking forward to meeting with many of you over the next days and weeks during upcoming roadshows or conferences. As in the past, this will be a combination of physical and virtual interactions. While it was previously COVID that prevented us from meeting in person, we're now back to more profound challenges like Tube strikes that actually don't allow me to meet with you in London over the next two days. I still hope that I'll be able to catch up with you in person over the next couple of weeks. With that, thanks very much for your participation. Have a good remainder of the day. All the best. Bye-bye.