“PUMA has built up a strong momentum in women’s soccer over the past 10 years collaborating closely with pioneering partners that have redefined the game on a global and local stage. Today, we are proud to be one of the founding partners of Women’s Professional Soccer in what promises to be a new pioneering chapter for women’s soccer,” said PUMA Chairman & CEO Jochen Zeitz. “The WPS partnership provides PUMA with a perfect platform to reinforce the brand’s positioning as the most desirable sportlifestyle brand in the world as well as underline our continued commitment to women’s sports.”

With the WPS partnership, PUMA further underlines its commitment to women’s soccer where it already has long-term partnerships with the likes of two-time FIFA™ World Player of the Year Marta da Silva of Brazil, who was drafted by the WPS Los Angeles Sol, U.S. National Team star Leslie Osborne, who will be playing for WPS in the Bay Area, and several Club teams in Europe including Swedish champion’s Umea IK, UEFA Women’s Cup Champions in 2003 and 2004.

“To have PUMA, the world’s leading sportlifestyle brand, as a founding partner in Women’s Professional Soccer is a great endorsement for our league,” said Commissioner Tonya Antonucci. “We are proud to have PUMA’s commitment to support, supply and grow the league and we recognize the creative, stylish and unique ways PUMA will promote WPS and women’s soccer on the whole.”

PUMA will have a presence in each market and stadiums for WPS games, as well as the WPS All-Star Game, WPS playoffs and WPS Championship game. PUMA and WPS have agreed to cross-promotional marketing opportunities via national print media, online media and television. This agreement also marks PUMA as an official licensee of the WPS for items including on field and sportlifestyle apparel, footwear and a wide variety of accessories.

PUMA is a leader in the game of soccer with a European portfolio of five National Teams, including current FIFA World Cup™ holders Italy, Austria, Switzerland, Bulgaria and Czech Republic. In addition to being the official supplier to these European teams, PUMA has a long standing relationship with 11 African soccer Federations including the current CAF African Cup of Nations™ holders, Egypt, Ghana, Cameroon, Angola, Ivory Coast, Morocco, Senegal, Tunisia and Namibia. In the U.S., PUMA has worked with all-star Major League Soccer athletes such as Matt Reis, Brian Ching and Dwayne De Rosario.

“We are thrilled and proud of PUMA’s Volvo Ocean Race debut success and wish to congratulate the PUMA Ocean Racing Crew on fighting for an excellent second place in a sensational race”, said Jochen Zeitz, PUMA Chairman and CEO. “PUMA’s participation in the Volvo Ocean Race was the most innovative marketing campaign the company has ever launched and proved to be an extremely successful starting signal for our sailing category with the investment having been paid more than off. Sales of PUMA´s Volvo Ocean Race merchandising collection exceeded our expectations.”

Skipper Ken Read commented: “This race has been an amazing journey for PUMA Ocean Racing. It seems like a lifetime ago since we first announced PUMA’s entry in the Volvo Ocean Race in March 2007 and here we are today, having just sailed over 50,000 miles, visited 10 countries and been awarded the trophy for second place in the race. It’s been an absolute dream. But it’s not just been a yacht race. Any successful business like this is all about the people. And we have the best people I have ever been associated with in sailing. Through the PUMA Ocean Racing team and the extensive activity associated with the program around the world, PUMA has brought hundreds of thousands of new fans to the sport of sailing, and I maintain that the sport is now changed forever.”

Over 5 million people visited the Volvo Ocean Race stopover villages and seen PUMA’s il mostro, PUMA City and our local market initiatives. Over 44,000 customers and PUMA employees were taken for a sailing tour on a PUMA yacht either before the start or in one of the stopover ports of the race.

PUMA’s eye-catching sailing yacht “il mostro”, the innovative PUMA Sailing Collections, the innovative marketing initiatives launched at the numerous stop-over ports, PUMA City and the successful performance of the PUMA Ocean Racing Crew generated extensive media coverage that more than offset PUMA’s investment in the Volvo Ocean Race. The value of the media coverage on PUMA’s entry in the Volvo Ocean Race was estimated to exceed USD 40 million.

PUMA used the 11 port destinations of the Race to activate complex onshore marketing strategies. PUMA used every single race location – Alicante, Cape Town, Cochin in India, Singapore, Qingdao in China, Rio de Janeiro, Boston, Galway in Ireland, Marstrand in Sweden, Stockholm and finally St. Petersburg – to not only position PUMA as a Sailing brand, but to convey PUMA’s overall brand message, creating visibility for other PUMA categories through media and star-studded events. Such activities have set a new marketing benchmark in the growing sport of sailing. At the same time, while the sport of sailing is often perceived to be very exclusive, PUMA aimed to break down this misconception. The PUMA Ocean Racing campaign has successfully begun to broaden the sports’ audiences, with an inclusive, fun outlook on the sport.

The Volvo Ocean Race was the perfect platform to launch the PUMA Sailing performance and lifestyle collections and reach new target consumers. PUMA launched a full range of nautical inspired apparel, footwear and accessories, from offshore sailing gear to onshore lifestyle fashion. The PUMA Sailing Performance collection was developed and tested by the PUMA Ocean Racing team itself, and was worn by the crew throughout the entire race. Every single item worn by the PUMA Ocean Racing team from apparel to footwear and accessories, worn both on and off the water and in extreme conditions, was made by PUMA. PUMA delivered an impressive testament of its expertise and know-how in the new sailing category which was built up in no time to compete at the highest level in every respect. The first PUMA Sailing Lifestyle collections hit the stores at the beginning of 2008.

PUMA’s entry into sailing opened up further opportunities for entering other categories, such as the outdoor market. The Volvo Ocean Race served as a perfect test laboratory for PUMA’s outdoor products as the crew had to be equipped with apparel and footwear suitable for extreme weather conditions – from freezing cold to burning heat.

PUMA’s retail expertise manifested itself by providing a unique shopping experience in PUMA City at the stop-over ports. Retail expectations were exceeded, after sales in PUMA City on a single day in Boston topped daily sales in any PUMA store ever worldwide.

PUMA City is a mobile architecture and has accompanied our sailing crew during parts of the Race, being shipped to and assembled at the stop-over ports in Alicante and Boston to host celebrations, press events, entertainment and in-port race viewing. A unique retail space offered a selection of the PUMA Sailing, Motorsport, Urban Mobility and PUMA Archives apparel, footwear and accessories as well as the entire Volvo Ocean Race merchandise collection. PUMA City – that won the ‘Best Retail Space’ award by American publication Travel + Leisure – is a massive 11,000 square-foot structure made from twenty-four long steel shipping containers, each weighing in at eleven tons.

The 11-men strong crew around skipper Ken Read raced 10 legs of the race since the start in Alicante, Spain last October, and visited 10 countries in Africa, Asia, South and North America. Every leg of the race brought intense weather conditions, crazy boat speeds, navigation of dangerous seas and uncharted waters, broken equipment and even injuries onboard. They crossed the equator four times, experienced temperatures ranging between 0 and 35 degrees Celsius, consumed over 8,250,000 calories of mostly freeze-dried food, desalinated 140 litres of water per day for cooking and drinking, used 5,560 square metres of sail material to make 24 sails and over 2.5 kilometres of rope on il mostro.

“We at PUMA have already done a lot to mitigate PUMA’s negative impact on our planet,” said Jochen Zeitz, Chairman and CEO of PUMA. “Through our PUMAVision category puma.safe, we started to more accurately measure the carbon footprint of our offices worldwide, which will help us to identify areas where we can further reduce our carbon footprint. As Methane released by cows is responsible for 18% of gas emissions, PUMA is supporting the “Meat Free Monday” campaign and encourages its employees to do the same by avoiding meat consumption at least once a week on Mondays.”

Sir Paul McCartney said: “I think many of us feel helpless in the face of environmental challenges, and it can be hard to know how to sort through the advice about what we can do to make a meaningful contribution to a cleaner, more sustainable, healthier world. Having one designated meat free day a week is actually a meaningful change that everyone can make, that goes to the heart of several important political, environmental and ethical issues all at once. For instance it not only addresses pollution, but better health, the ethical treatment of animals, global hunger and community and political activism.”

“Meat Free Monday” is an initiative by Sir Paul McCartney and his daughters Stella and Mary to encourage meat-eaters to forgo carnivorous meals for one day each week. The campaign website www.supportMFM.org provides additional information on tasty and healthy alternatives, while the website www.carbonneutralbeef.com can provide additional information on what the meat industry has been doing to reduce its impact.

Under puma.safe, PUMA is bringing together all of it’s longstanding work on environmental issues and decent work in decent workplaces, and combining it with new initiatives that will drive us to cleaner, greener, safer and more sustainable systems and practices. Earlier this year PUMA supported the environmental movie “HOME” by bringing this powerful commentary on the major environmental and social issues challenging our world to as many viewers as possible. At PUMA we know that creating awareness of our environment’s emergency state is crucial and acting on that awareness through positive action is our contribution to a more responsible corporate ethic.

PUMAVision unites all PUMA initiatives that come under the heading ‘Corporate Social Responsibility’, giving them a coherent direction and framework. It comes from a vision of a world that is better than the one we know now—a world that is safer, more peaceful and more creative. The PUMAVision programs puma.safe (focusing on environmental and social issues), puma.peace (supporting global peace), and puma.creative (supporting artists and creative organizations), reflect PUMA’s commitment to social and environmental responsibility and define the partnerships and initiatives PUMA will support and pursue.

Highlights Second Quarter:

• Consolidated sales up more than 4% in Euro terms and flat currency-adjusted
• Gross profit margin at 50%
• First impact of cost savings program: total operating expenses below last year’s level
• Operational result at € 63 million slightly above last year
• EPS at € 2.55 compared to € 2.98
• Strong improvement in inventories

Highlights First Six Months:

• Global brand sales reach almost € 1.4 billion
• Consolidated sales up almost 4% in Euro terms and slightly up currency-adjusted
• Gross profit margin remains above 51%
• Operating result before special items at € 177 million
• EPS before restructuring at € 8.51 compared to € 8.74 last year

Outlook 2009:

• Management expects that market environment remains challenging for the second half of 2009
• The implemented reengineering and restructuring program will continue as planned
• Continuing strong focus on working capital and cash flow improvement

Jochen Zeitz, CEO: “Despite an ongoing challenging market environment and the global economic recession, PUMA achieved a solid performance in the first half of 2009. The restructuring and reengineering program has already shown first effects and we will continue to strictly proceed while focusing on efficient measures to strengthen the brand and its products in the coming quarters.”

Sales and Earnings Development

Global branded sales

Sales under the PUMA brand, which include consolidated and license sales, reached € 636.5 million during the second quarter, a currency-adjusted decrease of 2.6% and an increase of 1.2% in Euro terms. Altogether, the quarter marked a solid performance in a globally challenging environment.

During the first six months, branded sales declined currency-neutral 2.9%. In Euro terms, sales increased 0.3% reaching € 1,374.1 million. On a currency-neutral basis, Footwear sales were down by 1.1% to € 745.6 million and Apparel 7.0% to € 460.9 million. Accessories increased by 1.3% to € 167.7 million.

Licensed business

The licensed business decreased in the second quarter by 32.2% currency-adjusted to € 36.2 million and by 37.5% to € 76.4 million for the first half due to the take-over of a licensee.

Based on licensed sales, the company realized a royalty and commission income of € 5.2 million in the second quarter versus € 6.4 million in the previous year’s quarter and € 10.2 million versus € 13.4 million year-to-date.

Consolidated sales

Currency-adjusted consolidated sales were flat compared to last year but increased in Euro terms a solid 4.1% to € 600.3 million. On a currency-neutral basis, Footwear was down 2.0% reaching € 330.0 million, and Apparel decreased 5.7% to € 203.8 million. Accessories improved by a strong 41.2% to € 66.4 million, which is mainly due to first time consolidations.

After six months, consolidated sales were up 0.4% on a currency-neutral basis and 3.8% in Euro terms to € 1,297.7 million. In spite of a challenging market environment, sales in the Americas region increased,whereas EMEA and Asia/Pacific were below last year’s level. In total, Footwear sales were € 727.1 million, representing a currency-neutral decrease of 1.4% and Apparel sales decreased 7.0% to € 426.3 million due to high comparables, which resulted from replica sales relating to the Football Euro Cup last year. Accessories were up a strong 49.1% to € 144.3 million.

Gross profit remains above 51%

The overall market environment paired with a change in the regional sales mix caused the reduction in gross profit margin in the second quarter from last year’s 52.5% to 50.0%. After six months, a gross profit margin of 51.1% was achieved compared to 53.0%. Footwear reported 49.7% versus 53.4%, Apparel 52.3% compared to 52.5% and Accessories increased to 54.9% versus 52.1% last year.

Operating expenses

Due to first effects from the reengineering and restructuring program, operating expenses decreased in the second quarter by 1.8% to € 242.2 million or from 42.8% to 40.3% of sales. During the first half, operating expenses increased only 1.8% to € 496.2 million, representing a cost ratio of 38.2% versus last year’s 39.0%.

Marketing/Retail expenses decreased 3.6% to € 253.1 million as last year’s Olympic Games and Euro Cup required a higher spending level. As a result, the cost ratio declined from 21.0% to 19.5% of sales. Other selling expenses increased by 14.4% to € 158.9 million, or from 11.1% to 12.2% of sales, mainly due to first time consolidations and currency impacts. Expenses for product development and design were up 14.7% to € 28.9 million, or as a percentage of sales from 2.0% to 2.2%. Other general and administration expenses were down a strong 9.3% and totaled € 55.3 million, representing 4.3% of sales versus 4.9% last year. Depreciation which is included in operating expenses increased by 16.3% to € 31.0 million due to full year effects from last year’s retail expansion.

Operational result before special items

PUMA achieved a solid operating result of € 63.1 million in the second quarter versus € 62.3 million last year. As a percentage of sales this relates to a margin of 10.5% compared to 10.8%.

After six months the operating result was down 5.9% from € 188.1 million to € 177.1 million. The operating margin stood at 13.6% compared to 15.0% last year.

Special Items – Restructuring charge

The reengineering and restructuring program that led to a one-time charge of 110 million in the first quarter will, for the most part, be finalized at the end of 2010. The program should provide for a more efficient business platform aligned to an expectedly challenging environment in the upcoming quarters.

Taking the special items into account, EBIT after six months amounted to € 67.1 million compared to € 188.1 million last year.

Financial result

The financial result reflects negative € 2.1 million for the second quarter versus an income of € 0.1 million last year. Negative € 3.7 million impacted the first half, while last year showed an income of € 1.0 million. Significantly lower interest rates and the accumulation of interest on purchase price liabilities led to this negative impact on the financial result.

Earnings

The company’s pre-tax profit (EBT) accounts for € 61.0 million in the second quarter versus € 62.4 million last year. Net earnings totaled € 38.5 million versus € 45.6 million, a decline of 15.6%. This results in earnings per share of € 2.55 compared to € 2.98 in the quarter.

Before restructuring costs, EBT accounts for € 173.4 million versus € 189.2 million for the first half and net earnings for € 128.4 million versus € 135.7 million, a decline of 5.4%. As a consequence, earnings per share were at € 8.51 compared to € 8.74. The operational tax ratio was calculated at 26.5% versus last year’s 28.5%.

Taking into account the restructuring costs, EBT was at € 63.4 million and net earnings at € 44.0 million in the first half of the year. Earnings per share were at € 2.92 versus € 8.74 last year.

Regional Development

Sales in the EMEA region reached € 288.3 million in the second quarter, a currency-adjusted decrease of 1.4%. Year-to-date, sales were down by 2.3% to € 654.4 million, representing 50.4% of consolidated sales. Gross profit margin was at a strong 53.5% compared to 54.5% last year.

Second quarter sales in the Americas were up 6.9% currency-adjusted, reaching € 168.6 million. First half sales increased 9.2% to € 346.7 million. The region now accounts for 26.7% of consolidated sales. Gross profit margin stood at 47.1% compared to 48.9% last year.

In the US market, sales increased by 4.8% to $ 132.7 million in the second quarter and by 4.1% to $ 271.4 million after six months.

Sales in the Asia/Pacific region decreased in the second quarter by 4.5% currency-adjusted to € 143.4 million and 2.8% after six months reaching € 296.7 million. The total region accounts for 22.9% of sales. Gross profit margin reached 50.5% versus 53.6% last year.

Net Assets and Financial Position

Equity

As of June 30, 2009, total assets climbed by 15.0% to € 2,047.8 million. Due to the higher balance sheet total, the equity ratio stood at 56.6% after 60.7% in the previous year.

Working capital

In reporting terms, inventories grew 3.0% to € 432.1 million. Inventories were down 0.7% on a comparable basis, showing a strong improvement versus end of Q1. Accounts receivables were up 6.2% (3.1% on a comparable basis), reaching € 502.8 million. Working capital totaled € 540.6 million (ex acquisition € 524.9 million) compared to € 552.1 million last year, manifesting a strong improvement in this area from the first quarter.

Capex/Cashflow

For Capex, the company spent € 24.6 million in the first half versus € 50.6 million last year. Due to the reduced capital expenditure as well as a solid improvement in working capital, PUMA’s free cashflow reached € 45.1 million compared to an outflow of € 23.6 million in last year’s comparison, representing a strong improvement over last year.

An outflow of € 61.0 million (last year: € 19.7 million) is related to acquisition cost. Taking the acquisition cost into account, the free cashflow was € -15.8 million compared to € -43.3 million last year.

Cash position

Total cash end of June stood at € 302.7 versus € 288.2 million last year. Bank debts were down from € 65.6 million to € 44.8 million. As a result, the net cash position increased from € 222.6 million to € 257.9 million year over year, underlying PUMA’s strong focus on efficient cash management.

Outlook 2009 – Market environment remains challenging

A solid first half performance and a pro-active restructuring and reengineering program, which has achieved improvements in operating expenses, working capital and free cashflow, have enabled PUMA to protect its industry leading key-financial parameters. Further improvements should be realized over the next 18 months as the program continues to yield additional efficiencies and cost savings. However, we remain highly cautious and anticipate a continued challenging and volatile retail industry due to the decline of private consumption as a result of the weakness in the global economy, which may negatively impact sales in second half.

The 121-page document covers the reporting period 2007/2008 and has exclusively been published online for environmental reasons. It details PUMA’s progress to enhance working and social standards in its supply chain, build capacity at its suppliers’ factories, broaden its range of sustainable products and reduce the company’s environmental footprint through the PUMAVision category puma.safe. It furthermore outlines PUMA’s activities in supporting artists and creative organizations through the category puma.creative and its initiatives to support global peace through puma.peace.

Download the full report here.

“Our 2007/2008 PUMAVision Sustainability Report is a testament to the fact that we at PUMA do not simply talk about sustainable development, we take action,” said Jochen Zeitz, Chairman and CEO of PUMA. “We are proud of our successes over the years and of our commitment to sustainability and the highest ethical standards, but realize that when it comes to corporate responsibility, there is and will always be room for improvement. Now, more than ever, we are deepening our commitments and dedicating ourselves to a strategy that sees the ‘whole’ as a sum of its parts—our PUMAVision. As we work towards a safer, more peaceful, and more creative world, we will continue to expand our outreach as corporate global citizens beyond the boundaries of business, not only for the benefit of our stakeholders, but for all.”

Highlights of the visually appealing document include:

• A portrait of the concept PUMAVision
• A transparent description of PUMA’s response to the challenges it faces in its supply chain operations, capacity building projects and brand collaboration initiatives
• The expansion of PUMA’s range of sustainable products through Fair Trade footballs and apparel from “Cotton Made in Africa”
• A detailed account of PUMA’s numerous initiatives to protect the environment, including the progress on reaching targets of a 25% reduction of energy and water consumption as well as waste creation for offices by 2010 and decreasing its carbon footprint
• An outline of PUMA’s worldwide activities in cooperation with the charity organization “Peace One Day” to raise awareness for global peace
• An account of its sponsorship of the art exhibition 30 Americans to support the work of 31 African-American artists
• A recap of PUMA’ numerous projects on the African continent

The report has been certified by TÜV Rheinland, which “is confident that PUMA AG operates a meaningful and adequate system to collect, measure, control and steer their sustainability activities and that the PUMA 2007/2008 Sustainability Report presents information and facts that give a realistic impression on the sustainability performance of the company.”

The Global Reporting Initiative has reconfirmed an A+ rating for the document.

PUMA’s endeavours to enhance its social and environmental standards are ongoing. The Sportlifestyle company endorses the campaign “Seal the Deal!” led by the United Nations. This campaign aims at strengthening political will and public support for reaching a comprehensive global climate agreement at the Climate Change Conference in Copenhagen, Denmark, in December 2009 to help prevent global warming and further climate change. As a participant in the Carbon Disclosure Project, PUMA is actively working on reducing its direct and indirect climate gas emissions.

PUMA is committed to working in ways that contribute to the world by supporting creativity, sustainability and peace, and by staying true to the values of being Fair, Honest, Positive and Creative in decisions made and actions taken. The foundation for our activities is PUMAVision—a concept that guides our work with its three core programs, puma.creative, puma.safe and puma.peace.

The joint initiative aims at raising awareness for PEACE ONE DAY and the necessity of peaceful cohabitation. adidas and PUMA will also take the message and idea of PEACE ONE DAY into the football stadiums in Munich and Stuttgart through surprise highlights during the halftimes of the German premier league games FC Bayern München – 1. FC Nürnber and VfB Stuttgart – 1. FC Köln on 19 September.

„We at adidas are very proud to support PEACE ONE DAY together with PUMA.
We firmly believe that sport can bring the world together. Sport has shown this at countless occasions in the past and we are committed to the positive values found in sport: performance and passion, teamwork and fair play,” said Herbert Hainer, CEO of adidas AG. “I am looking very much forward to our adidas and PUMA football match and I hope that our joint initiative helps to raise further awareness for PEACE ONE DAY around the world.”

Jochen Zeitz, Chairman and CEO of PUMA, said: „We are uniting on this day as a commitment to Peace Day. Our common goal being that our collaboration today will help create awareness for the day. Kofi Annan once said that ‘individuals can make a difference and collectively we can make a major contribution’. I believe that is the case also for companies. And our unity, in support of Peace Day, is a small step in a positive direction as well as an expression of the united power of sport in a world which we are all responsible for.”

The companies adidas and PUMA were founded by the brothers Rudolf and Adi Dassler in the 1940s. Until they separated and went their own ways, they both owned a factory called “Gebrüder Dassler Sportschuhfabrik” where they together manufactured sports shoes – quite successfully as the world records of Jesse Owens proved. In the last decades, adidas and PUMA became worldwide leading brands. Both companies are still based in Herzogenaurach, Germany.

Both teams, which were made up of 40 employees of both competitors as well as a few local journalists, demonstrated their support for PEACE ONE DAY on the premises of the adidas headquarters and proved that sport can help overcome boundaries and promote a peaceful cohabitation.

„Our joint football match in support of PEACE ONE DAY and Global Peace Day was a unique experience for the participating players and our employees. It showed that everyone – and companies as well – can make their contribution to peace,” said the two Chief Executives Jochen Zeitz and Herbert Hainer. “The symbolic handshake of adidas and PUMA helped to raise awareness for Global Peace Day and the necessity for non-violence and ceasefire.”

Particularly for this memorable football game, adidas and PUMA had created a football kit in black and white that sported adidas’ three stipe logo as well as PUMA’s leaping cat. The kit is part of a limited collection of 80 pieces, that will be auctioned for PEACE ONE DAY.

Football celebrity Alexander Hleb, player of German premier league club VfB Stuttgart and captain of the Belarus national team, supported the initiative by signing autographs and giving PEACE ONE DAY footballs to the fans onsite.

Following the match adidas and PUMA employees went together to PUMA’s Brand Center in Nuremberg to watch the movie „The Day after Peace“ by British actor and director Jeremy Gilley.

Last weekend, both companies had already taken the message and idea of PEACE ONE DAY into the football stadiums of Munich and Stuttgart. During the halftimes of the German premier league games FC Bayern Munich – 1. FC Nuremberg and VfB Stuttgart – 1. FC Cologne adidas and PUMA employees took part in a penalty shoot out with former premier league goalkeeper Walter Junghans and shared PEACE ONE DAY balls with the fans.

The companies adidas and PUMA were founded by the brothers Rudolf and Adi Dassler in the 1940s. Until they separated and went their own ways, they both owned a factory called “Gebrüder Dassler Sportschuhfabrik” where they together manufactured sports shoes – quite successfully as the world records of Jesse Owens proved. In the last decades, adidas and PUMA became worldwide leading brands. Both companies are still based in Herzogenaurach, Germany.

“PUMA’s new development center PUMA Village sets unprecedented standards in our industry,” said Jochen Zeitz, Chairman and CEO of PUMA. “This trend-setting concept of a product development center with over 40 PUMA suppliers under one roof, working tightly together, will increase PUMA’s speed to market, reduces our cost base and makes sure that our products are of excellent quality. It underpins PUMA’s current restructuring efforts to streamline our business operations throughout all steps of the value chain.”

“After three years of planning und building we have created a unique place for all our creative people to work directly with the prototype factories in a fast and professional way. Nearly all of our product categories as well as technologies will be developed at the PUMA Village in order to ensure that our entire product service and product quality goals are achieved”, said Reiner Seiz, Chief Supply Chain Officer of PUMA.

In line with PUMA’s sustainability concept PUMAVision, PUMA Village features a number of environmentally friendly assets. On top of the building, a water reservoir was installed for collecting rain water during all seasons of the year and especially during the rainy season from May to November. This water will be used to complement the water supply, for cooling purposes in the hot season as well as for gardening. In terms of energy saving a louver was installed to protect the office and factory building from direct sunlight which reduces the heating up of the building. Solar panels provide energy for warm water consumption and air-conditioning.

puma.safe, the department of Social and Environmental Affairs, is based in PUMA Village as well. puma.safe works towards raising work and production standards worldwide, developing new sustainable products and reducing our carbon footprint. As all of PUMA’s manufacturers have to adhere to PUMA’s environmental and safety standards, all manufacturing units and their workers based in PUMA Village have to comply with PUMA’s standards as well. A special on Health & Safety educated officer will permanently monitor the General Constructor’s working team, making sure that all standards are being adhered to during the production processes.

Highlights Third Quarter:

• Consolidated sales at € 673 million, a decline of 5.5% versus last year’s third quarter
• Gross profit margin at 51.9%, up from 50% in the second quarter
• Total operating expenses 2.5% below last year’s level as a result of ongoing cost savings program
• Operating result at € 98 million, reflecting a decrease of 21.6% in the quarter
• EPS at € 4.50 after € 5.81 last year
• Continued strong reduction in inventories and improvement in net cash position

Highlights First Nine Months:

• Global brand sales above € 2 billion
• Consolidated sales slightly up in Euro terms and 2% down currency-adjusted
• Gross profit margin remains above 51%
• Operating result before special items at € 275 million
• EPS before restructuring at € 13.01 after € 14.55 last year

Outlook 2009:

• The ongoing reengineering and restructuring program is expected to continue until the end of 2009
• The strong emphasis on improving working capital and focus on cash generating activities seen in the first three quarters will continue as planned

Jochen Zeitz, CEO: “The business environment has continued to be as challenging as we had expected, which resulted in a decrease in sales and profits. Despite this most difficult market, we generated a profit in all three quarters so far and we expect to be profitable in Q4 again. We hope to see first signs of an improving business environment in the run up to the Football World Cup in South Africa, where PUMA through its strong ties with African Football has a home field advantage.”

Sales and Earnings Development

Global Brand Sales

PUMA’s brand sales in the third quarter, which include consolidated and license sales, decreased by 7.6% in Euro terms, or by 8.3% currency-adjusted, to € 719.6 million.

After nine months, global brand sales declined currency-neutral 4.8%. In Euro terms, sales decreased by 2.6% to € 2,093.8 million. On a currency-neutral basis, Footwear sales were down by 5.3% to € 1,113.7 million and Apparel sales by 6.2% to € 719.1 million. Accessories sales increased by 1.3% to € 260.9 million.

Consolidated Sales

Consolidated sales in the third quarter decreased by 6.3% currency-neutral or by 5.5% in Euro terms to € 673.4 million. On a currency-neutral basis, Footwear sales were down by 13.0% at € 358.7 million, and Apparel sales decreased by 5.2% to € 238.1 million. Due to first time consolidations, Accessories sales improved significantly by 38.5% to € 76.6 million.

After the first nine months, consolidated sales were down by 2.0% on a currency-neutral basis but increased by 0.4% in Euro terms to € 1,971.1 million. Sales in EMEA and Asia/Pacific were below last year’s level. Sales in the Americas region, however, increased despite the challenging market environment. Footwear sales were down by 5.6% currency-neutral at € 1,085.8 million. Apparel sales decreased by 6.3% to € 664.3 million on high comparables last year after the Football Euro 2008 generated strong replica sales. Accessories sales increased significantly by 45.3% to € 221.0 million.

Gross Profit Margin

In the third quarter, the gross profit margin decreased from 53.6% last year to 51.9%. This decline mainly derives from further inventory reduction programs and changes in the product and regional mix, as well as higher raw material costs. After the first nine months, PUMA achieved a gross profit margin of 51.4% versus 53.2% last year. Footwear reported 50.2% compared to 53.1%, Apparel 52.2% versus 53.3% and Accessories increased to 54.8% from 53.3% last year.

Operating Expenses

Operating expenses decreased by 2.5% to € 256.9 million in the third quarter. During the first nine months, operating expenses remained at last year’s level of € 753.1 million, representing a cost ratio of 38.2% versus last year’s 38.3%.

Marketing/Retail expenses decreased by 4.7% to € 374.9 million mainly as a result of last year’s higher spending level in relation to the Olympic Games and Football Euro Cup. The cost ratio declined from 20.0% to 19.0% of sales. Other selling expenses increased by 10.4% to € 240.3 million, or from 11.1% to 12.2% of sales. Product development and design increased from 13.6% to € 43.4 million, or as a percentage of sales from 1.9% to 2.2%. Other general and administration expenses were down by 7.2% at € 94.6 million, representing 4.8% of sales versus 5.2% last year. Depreciation increased by 10.4% to € 44.7 million due to full year effects from last year’s retail expansion.

Operating Result before Special Items

Amid lower sales combined with the softened margin in the quarter, the operating result came in at € 98.0 million in the quarter versus € 125.0 million last year. As a percentage of sales, it fell to 14.5% from 17.5% last year.

After nine months, the operating result was down by 12.2% at € 275.1 million from € 313.2 million, while the operating margin was still double-digit with 14.0% versus 16.0% last year.

Special Items – Reengineering and Restructuring Program

The reengineering and restructuring program, which resulted in a one-time charge of € 110 million in the first quarter, will continue as planned and should be largely finalized by the end of 2009. The program will provide for a more efficient, leaner and faster business platform to adjust to the current market conditions.

Considering the restructuring charge, EBIT for the first nine months totaled € 165.1 million compared to € 313.2 million last year.

Financial Result

Due to lower interest rates and the accumulation of interest on purchase price liabilities from acquisitions, the financial result in the third quarter was at € -1.9 million versus € -0.5 million in last year’s quarter. After nine months the financial result stood at € -5.6 million compared to a slightly positive € 0.5 million last year.

Earnings

The company’s pre-tax profit (EBT) was € 96.0 million in the third quarter versus € 124.5 million last year. Net earnings totaled € 67.9 million versus € 89.0 million, a decline of 23.6%. This translated into earnings per share of € 4.50 compared to € 5.81.

Before restructuring costs, EBT came in at € 269.4 million versus € 313.7 million for the first nine months and net earnings totaled € 196.3 million versus € 224.7 million, representing a decline of 12.6%. Earnings per share were at € 13.01 compared to € 14.55. The operational tax ratio was calculated at 27.9% versus last year’s 28.7%.

Taking the restructuring costs into account, EBT was € 159.4 million and net earnings were € 112.0 million with earnings per share at € 7.42 versus € 14.55 last year, a decline of 49.0%.

Regional Development

In the EMEA region, third quarter sales decreased by 3.1% currency-neutral and totaled € 366.4 million in the third quarter. While the sales performance in Western Europe was impacted by promotional sales due to the current market situation, the EEMEA region managed to stay on prior year level. After nine months, sales were down by 2.6% to € 1,020.8 million, representing 51.8% of consolidated sales. Gross profit margin was at 53.2% compared to 55.2% last year.

Sales in the Americas were down by 11.2% currency-adjusted at € 165.4 million in the third quarter. After nine months, however, sales rose by 1.6% to € 512.1 million. The region now accounts for 26.0% of consolidated sales. Gross profit margin was at 47.9% compared to 48.9% last year.

In the US market, sales decreased by 11.3% to $ 129.5 million in the third quarter and by 1.4% to $ 400.9 million after nine months. For the Latin American region this quarter was characterized by the convergence of increased import restrictions and other conditions which had negative impacts on sales performance.

In the Asia/Pacific region, sales fell by 8.3% in the third quarter currency-neutral, but increased in Euro terms by 1.2% to € 141.6 million. After nine months, sales were down by 4.7% currency-neutral but increased by 8.5% in Euro terms to € 438.2 million, representing 22.2% of consolidated sales. Gross profit margin reached 51.1% versus 53.1% last year.

Net Assets and Financial Position

Equity

As of September 30, 2009, total assets were up by 7.9% to € 2,057.5 million. Based on the higher balance sheet total, the equity ratio stood at 59.1% after 62.3% in the previous year.

Working Capital

PUMA adhered to its plan to significantly reduce inventory, which improved by 17.5% to € 356.4 million. Accounts receivable were slightly below last year’s level at € 530.7 million. Working capital improved to € 523.3 million (ex acquisition € 507.6 million) from € 599.6 million last year – showing again a significant enhancement compared to previous quarters and thus underpinning our strong focus on managing working capital.

Capex/Cashflow

In the first nine months, the company invested € 40.8 million versus € 79.1 million last year. The reduction in capital expenditure together with a solid improvement in working capital led to a strong increase in PUMA’s free cashflow of € 145.1 million from € 17.2 million, showing a strong enhancement compared to last year. An outflow of € 75.8 million versus € 24.9 million last year is related to acquisitions. Taking these acquisitions into account, the free cashflow amounted to € 69.4 million versus an outflow of € 7.7 million last year.

Cash Position

Given the strong focus on cash management, total cash at the end of September rose from € 297.3 million to € 376.9 million and bank debts declined from € 61.1 million to € 37.4 million this year. As a result, net cash was up from € 236.2 million to € 339.5 million this year, a respectable increase of 43.7%.

Outlook 2009 – Market environment remains challenging in Q4

The market and consumer environment is expected to remain challenging. The reengineering and restructuring program is planned to be finalized by the end of the year and will generate improvements in efficiency and cost savings in the future.

PUMA will reduce its carbon footprint by converting to green energy such as solar power and other renewable sources, optimizing travel and logistics to reduce transport-related emissions and leasing more fuel-efficient cars for its company fleet, among other measures. The plan covers the breadth of PUMA’s worldwide operations, from direct emissions from PUMA’s offices, stores and warehouses to staff business travel and the shipping of goods.

Achim Steiner, UN Under-Secretary-General and UNEP Executive Director, said: “By becoming the first global sport brand to join the Climate Neutral Network, PUMA is showing how sport can play a powerful green role in a low-carbon world. Sport has the unique ability to catalyze action among millions of people around the world – we look forward to working with PUMA to green mass sporting events and to engage sports men and women and fans around the world on the environmental challenges facing this generation.”

Jochen Zeitz, CEO of PUMA, said: “We at PUMA constantly strive to make our contribution to environmental protection and mitigate PUMA’s negative impact on our planet. Most scientists agree that the continued unlimited emission of greenhouse gases will lead to irreversible damages to our climate and ecosystem. PUMA’s strategy to reduce its carbon footprint is a significant milestone within our sustainability concept PUMAVision that looks ahead to a world that is safer, more peaceful and more creative for the generations to come.”

The company’s Head Office in Germany already uses renewable energy including concrete core temperature control and solar power for electricity and water heating. Similarly, its Boston office has a large-scale solar power station.

PUMA also helps its suppliers to work actively to reduce their own emissions – its South African supplier, Impahla Clothing, became the first Carbon Neutral apparel supplier on the African continent. In addition, the company says it will work with industry peers to develop a common industry framework and share best practice.

“As a supporter of the UN Global Compact, PUMA endorses the Seal the Deal! Campaign supporting the signing of a binding international agreement on Climate Change following the Kyoto Protocol,” the company says in its carbon neutral strategy.