Letter to Shareholders

Our industry is currently changing. The market segment that we created, Sportlifestyle, has proven to be fundamentally different from the traditional sporting goods business. Brand and product requirements, consumer consumption rates, and value chain relationships are all shifting as a result of the ever-growing use of our products as lifestyle accessories. In 2007, we continued to prepare PUMA to tackle those changes while working diligently towards our Phase IV targets. While we maintained industry leading profitability ratios, it proved difficult to follow our 2006 increase in sales of 34% with another year of strong growth. But we were able to make solid progress on our Phase IV roadmap, helping to position PUMA for the long-run.

 
We continued our geographic expansion by starting fully-owned subsidiaries in South Korea, Croatia and Romania, all of which became operational in January 2008. Additionally, we solidified our new Phase IV categories of Golf, Moto and Denim with successful new product launches, and also announced our launch of a sailing performance and lifestyle collection, headlined by our entry in the around-the-world 2008-09 Volvo Ocean Race in Alicante in October.
 
In our dynamic industry, innovation in business strategy is just as critical to our long-term success as innovation in our brand and product. Therefore, some of our most crucial accomplishments in 2007 involved the development and enhancement of our organizational and operational capabilities necessary to remain a leader in Sportlifestyle. In particular, we continue to focus on optimizing our value chain to help deliver improvements in productivity and speed-to-market.
We have also taken steps to integrate the functional expertise needed to succeed, by strengthening our Board as of this year in order to complement PUMA’s existing skill-set.
 
But 2007 may ultimately be remembered as the year in which we found our ideal long-term strategic shareholder in PPR, resulting in the pairing of two companies that share vision and a similar culture. Our newly forged partnership is a symbiotic relationship in which each company has the ability to support the other to further its strategic objectives. It’s been an entirely fluid integration, which has only reinforced the board’s belief that the take over offer of 330 Euros per share by
PPR was fair and in the best interest of our shareholders. In total, 35 percent of all shareholders accepted the offer last year, resulting in a 62.1 percent stake by PPR in PUMA, which includes the 27 percent stake that PPR acquired from the previous major shareholder. PUMA and PPR spent the second half of 2007 getting acquainted and initiated joint projects in several areas.
 
The Sportlifestyle industry continues to evolve at break-neck speed, and with our heritage in performance combined with our innovation in sports fashion, we are well prepared for the future. While we have come a long way since the beginning of Phase I in 1993, there is no question that PUMA’s best days are still ahead. From the 2008 Olympics in Beijing and the European
Championships, hosted by the PUMA-sponsored Swiss and Austrian football federations, to the 2010 World Cup in PUMA’s home away from home, Africa, to the increasing efficiencies achieved in our operations, to the unique ability to continuously define Sportlifestyle with PPR, our opportunities are plentiful.
 
Yet, as always in business, a lot still remains to be done to ensure that we convert opportunities to success. But with focus, discipline and determination, we will give our best to continue along our road to excellence and build the most desirable sportlifestyle company in the world.
 
We would like to take this opportunity to thank our customers, committed employees and shareholders for trusting us.
 
Best regards,
Jochen Zeitz
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