adidas-Salomon Canada Launches Integrated Enterprise Portal With Magic Software's eDeveloper.

Business Editors/High-Tech Writers

IRVINE, Calif.--(BUSINESS WIRE)--Jan. 20, 2004

Project Yields Hard Cost Savings

and Immediate Four-to-One Return on Investment

Magic Software Enterprises (Nasdaq:MGIC), a leading provider of state-of-the-art business integration and development technology, announced today that adidas-Salomon AG's Canadian subsidiary (adidas-Salomon Canada, responsible for the adidas, Salomon, and Taylor Made/adidas Golf brands in Canada) has launched innovative new enterprise portals at www.adidas.ca, www.tmag.ca, www.salomonsports.ca, and www.adidas-salomon.ca, using eDeveloper (www.magicsoftware.com/edeveloper) and integration technology from Magic Software.

The enterprise web portal integrates all business-to-consumer (B2C), business-to-business (B2B), and business-to-employee (B2E) functionality for the company's three major brands -- adidas, Salomon, and Taylor Made -- with sophisticated business process integration occurring between a trendy, youth-oriented web site, a powerful IBM iSeries platform, and a legacy HP 3000 system.

The site has been fully integrated into the global adidas-Salomon web site, www.adidas.com, with functionality that is the envy of the company worldwide.

"Using eDeveloper, we have refined and integrated our 3 distinct supply chains with B2C and B2B features like a sophisticated eCatalog and an SKU specific store locator, B2B features such as order and shipment tracking and on-the-fly invoice generation, and B2E features such as query bases sales analysis and item master generation," said Paul Leone, Vice President of Logistics and Information Technology at adidas-Salomon Canada. "In short, we have web-enabled our entire enterprise IT infrastructure with hard cost savings that put our immediate, provable ROI at four-to-one."

The system has allowed adidas-Salomon Canada to reduce printing costs for retail catalogs by $100,000 annually and affect savings of from $30,000 to $40,000 annually by eliminating shrinkage and lost shipments through foolproof box-by-box electronic documentation of carton contents.

"But how can you put a price tag on the modernization of your entire enterprise? The benefits of delivering business on demand are enormous," stated Leone. "When customers have complete visibility to their outstanding orders, recent shipments, UPC code, and browse our catalogs on line with real-time availability info, coupled with our internal employees having a wealth of newly developed tools at their fingertips, then this speaks volumes as to the value proposition that eDeveloper provides. Additionally, eDeveloper has become the glue that has joined these two rather disparate hardware platforms, in the IBM iSeries and the HP3000."

"eDeveloper provides adidas-Salomon Canada with an agility that allows business rules to be implemented quickly in a manner that achieves efficiencies previously impossible, while leveraging investments in existing technology," said Oren Inbar, CEO of Magic Software Enterprises North American Subsidiary. "Our message to customers is simple, to maximize return on investment in the shortest time, don't replace legacy systems unless it is absolutely necessary. Instead, use eDeveloper to modernize applications and integrate into new technologies and systems."

About adidas-Salomon AG

adidas-Salomon AG is the second largest manufacturer of sporting goods worldwide, with a global estimated market share of about 15%. Its products, which include leading brands such as adidas, Salomon, Taylor Made (golf), Mavic (cycling), Bonfire (winter sports), and Erima (swimming), are present in all major markets around the world. The company employs approximately 13,000 globally. For more information, please visit the adidas-Salomon Canada web site, www.adidas.com/ca.

About Magic Software Enterprises

Magic Software Enterprises, a subsidiary of Formula Systems (Nasdaq:FORTY), develops, markets, and supports software development, deployment, and integration technology that enables enterprises to accelerate the process of building and deploying applications that can be rapidly customized and integrated with existing systems. Magic technology, applications, and professional services are available through a global network of subsidiaries, distributors, and Magic solutions partners in approximately 50 countries. The Company's North American subsidiary is located at 17310 Redhill Avenue #270, Irvine, CA 92614-5637, telephone [phone], fax [phone], http://www.magicsoftware.com/.

Formula Systems is an international information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products, and producing computer-based solutions.

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors, including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions both here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the Company's most recent annual report and other filings with the Securities and Exchange Commission.