Until the end of 2013, PUMA will continue to be the official supplier of performance, training and lifestyle apparel and footwear for Usain Bolt. Bolt will play a pivotal role in PUMA’s global marketing campaigns and serve as the central figure in the sportlifestyle company’s London 2012 Olympic program, expected to be launched early in 2011. PUMA and Bolt will continue to collaborate on the development of key product lines, building on the 2010 “Bolt Collection” launch, a range of apparel, footwear and accessories that the sprinter helped develop which include graphic elements representative of Bolt and his beloved Jamaica. Compelling new product initiatives will be launched in 2011 and the years that follow.

Bolt and PUMA have forged a close relationship over his formative years. When the World’s Fastest Man was just a boy of 16 in 2003, PUMA signed the junior sprinter. The brand and the athlete have matured together and Bolt, now 24, has emerged as the one of the world’s most talented Track and Field athletes, winning three gold medals in the 2008 Beijing Olympics and smashing two world records in the 100m (9:58) and 200m (19:19) at the World Championships in Berlin in 2009. PUMA, like many Bolt enthusiasts, believes the best is yet to come.

“Usain Bolt has been a revelation for Track & Field athletics,” said Jochen Zeitz, Chairman and CEO of PUMA AG. “He’s shined a global spotlight on the sport; his winning personality and phenomenal physical prowess are a unique combination. The way he both engages his fans and is energized by them has helped his popularity escalate to extraordinary levels over the past two years.” Zeitz continues, “Usain has been a tremendous force for the PUMA brand. He embodies the joy, playfulness and irreverence that are the cornerstone of our brand. His Lightning Bolt ‘To Di World’ pose from the Beijing Games in 2008 is now one of the most recognizable symbols in sport. He’s obviously a lot of fun to work with. From a performance standpoint, he has reset the bar for speed on the track, and we’re not sure he’s even hit his top gear yet. It’s going to be an exciting few years ahead and we’re thrilled to be along for the ride.”

“PUMA’s been by my side since the beginning, before anyone knew what I was capable of achieving,” said Usain Bolt. “They saw potential in me and they took a chance, supporting me all the way, especially when things weren’t easy for me due to injuries I suffered in my teens. We’ve been partners in the truest sense of the word since day one, and so it’s an easy decision to re-sign with them,” continued Bolt. “PUMA gets me; we fit together. They take the business of running seriously, but we also know how to have fun, to be spontaneous. We both bring a lot of personality to the sport.”

While Usain Bolt is undeniably one of the brand’s greatest ambassadors, PUMA’s investment in Track & Field in Jamaica is far more extensive than supporting him alone. Since 2002, PUMA has also sponsored the Jamaican Amateur Athletic Association (JAAA), which is the governing body for Track and Field in Jamaica, and the Jamaican Olympic Association. In addition to this, PUMA helps to foster young talent through sponsorship of 7 high school track and field programs. This partnership also drives the annual ISSA Boys & Girls Track and Field Championships, dubbed “The Champs” which is lauded as the most popular sporting event in Jamaica and the place where many of the world-renowned sprinters got their start. Additionally, PUMA is a partner of pre-Champs meets including the Gibson Relays and various Invitationals. Outside of the high school sphere, PUMA is the main partner of the Reggae Marathon, which takes place each December in Jamaica and draws distance runners from all over the world.

For more information about PUMA and Usain Bolt, please visit:

http://www.puma.com/running or www.puma.com

The more flexible and international structure of a one-tier European Corporation permits that Jochen Zeitz – in his new role as Executive Chairman of the Board – can continue to be responsible for PUMA’s next phase of its corporate development while also providing PPR’s future Sport & Lifestyle Division with his extensive and unique expertise in the sportlifestyle sector. PUMA will become a core brand within this new division.

In the role of Head of PPR’s Sport & Lifestyle Division, Zeitz will act as a member of PPR’s Executive Committee. Within the framework of the Division’s strategy developed by PPR, Jochen Zeitz will be responsible for setting up the organisation and will be in charge of operations in order to build a portfolio of strong, complementary brands within the sport and lifestyle arena in the future. These brands, and PUMA in particular, will benefit from international growth opportunities and new synergies derived from complementary consumer universes and pooled resources. Zeitz will assume his new responsibilities as Head of PPR’s Sport & Lifestyle Division after the search for a CEO of PUMA has been completed.

“I strongly believe in PUMA’s future potential as an innovation leader and icon for the sport and lifestyle industry backed by its strong brand. I am confident that Jochen Zeitz, together with the new CEO in charge of the PUMA brand, will bring PUMA to the next step. We will now look into expanding our sport and lifestyle investments in the coming years with PUMA as a core brand in our future portfolio”, François-Henri Pinault, Chairman and CEO of PPR, said.

The new management structure shall facilitate the implementation of PUMA’s five-year strategic company plan. The conversion into an SE will not infringe PUMA’s working arrangements and will proceed in close coordination with the respective employee representation bodies. PUMA’s five year strategic plan 2011-2015 will be released together with PUMA’s third-quarter results on October 26.

With immediate effect Jochen Zeitz will also assume the newly created role of Chief Sustainability Officer (CSO) at PPR. This measure not only underlines PPR’s strong commitment to Sustainability but is also a clear acknowledgement and is an opportunity to expand on PUMA’s pioneering role in this area, taking into account PUMA’s strong environmental and social commitment under the umbrella of PUMAVision.

“I will – in cooperation with the Personnel Committee – personally conduct the search for the future CEO of the PUMA brand” said Jochen Zeitz. “While all necessary preparations will be taken, I will remain CEO of PUMA. When the new CEO is appointed, I will ensure a seamless handover and implementation of the company’s five-year strategic plan which we have been diligently working on during the course of this year. After then 18 years as CEO of PUMA, I look forward to evolving my role within PUMA as well as the PPR Group and am passionate to further pursue responsible business opportunities within a sustainable social and environmental context.”

PUMA AG has initiated a comprehensive special audit by an independent auditing firm, appointed a new local management in Greece and put a halt to further irregularities. According to the preliminary findings of the audit, it is suspected that the Greek joint venture partner, along with members of the Greek local management, has committed a series of criminal acts.

As most of the irregularities have occurred prior to the fiscal year 2010, PUMA will have to restate its prior-year financial statements in line with IAS 8, i.e. adjust the 2009 comparative figures in the 2010 financial report. In total, the maximum extraordinary write-off effect should not exceed pre-tax 115 million Euros and does not affect the cash position. An estimated amount of up to 15 million Euros should affect fiscal year 2010 with the remainder applying to previous years.

Due to these irregularities and the general market situation in Greece, the company is further planning a restructuring in Greece that could lead to additional one-time charges of approximately 15 million Euros in the fourth quarter. As a consequence, it is likely that one-time charges of up to 30 million Euros will be booked in the fourth quarter of fiscal year 2010. A note to financial statements will be included in the third quarter results to be released on 26 October 2010.

PUMA AG’s Management and Supervisory Board have resolved to assert all claims according to civil and criminal law against the Greek Joint Venture minority partner and members of the local Greek management.

Highlights Third Quarter:

• Consolidated sales at € 784 million, up 16.5% in Euro terms
• Gross profit margin remains at 50%
• Operating result before special items improves by 15.3% to € 113 million
• EPS rise from € 4.50 to € 5.16
• Usain Bolt remains long-term brand asset for PUMA
• PUMA AG to take over full control in China and Hong Kong
• Irregularities discovered in Greece

Highlights January-September:

• Consolidated sales increased 5.7% in Euro terms
• Gross profit margin slightly down versus last year at 50.8%
• Operating result before special items improved by 7.7% to € 296.1 million
• EBT before tax improved by 83.2% to € 292.0 million
• EPS increased to € 13.65 from € 7.42 last year
• Continued improvement in equity ratio

Outlook 2010:

• Based on a strong sales performance in the third quarter as well as an improvement in the overall outlook for the fourth quarter, Management now expects sales to be up in the mid to high single-digit for the full year 2010.
• Management expects an increase in EBIT before special items versus last year.
• Extraordinary one-time charge from PUMA Hellas S.A. affects results for 2010 as well as previous year.

Jochen Zeitz, CEO: “Unfortunately, the discovery of irregularities committed by our Greek Joint Venture Partner is casting a shadow on our solid financial performance in the quarter. However, we are pleased to see that PUMA’s operational performance improved significantly in the third quarter as we post a strong rise in sales and operating results. We expect the sales outlook to further improve for the fourth quarter and as a result we raise our forecast of growth to mid to high single digits for the full year 2010. Looking further ahead, we are positive about our capabilities and game plan to execute and deliver on our new “Back on The Attack” Plan 2015 with a potential of reaching four billion Euros. We have prepared our organization and are aligning our processes accordingly to execute our new plan. We are confident and optimistic about the large opportunities to further tap into our brand’s potential growth drivers that we will reveal today during our investor day presentations at the PUMAVision Headquarters in Herzogenaurach.”

Sales and Earnings Development

Global Brand Sales

Sales under the PUMA brand, which include consolidated and license sales, improved by 15.1% to € 828.6 million in the third quarter. In total, the quarter marked a very solid performance against the background of a still challenging global economic environment.

After nine months, global brand sales increased 4.8% and were close to € 2.2 billion despite a flat first half of the year.

Consolidated Sales

Currency-adjusted consolidated sales were up 6.5% to € 784.3 million in the quarter, which represents an increase of 16.5% in Euro terms. Footwear rose 6.0% currency-neutral to € 417.2 million, and Apparel sales improved by 1.3% to € 263.8 million. Accessories sales reported a significant improvement of 25.0% to € 103.3 million, which derives from organic growth as well as first time consolidations. In terms of regions, the Americas grew strongest with 26.7% currency-neutral while APAC advanced 1.4% currency-adjusted. EMEA softened slightly 1.1%.

After nine months, consolidated sales were up 5.7% in Euro terms and flat (-0.1%) currency-neutral at € 2,082.8 million. Despite a challenging market environment, sales in the Americas region jumped a strong 24.9 % with North- and Latin America reporting double-digit sales growth. Sales performance in the EMEA region was impacted by unfavorable market conditions in Southern and Eastern European countries and, therefore, posted a currency-adjusted decrease of 5.6%. Sales in Asia/Pacific were up 1.5% in reported terms but decreased 7.9% due to the strong fluctuations in currencies. In terms of segments, Footwear stood at € 1,117.2 million, representing a currency-neutral decline of 2.7% and Apparel sales softened slightly by 0.8% to € 699.2 million. Accessories sales, however, grew by 14.6% to € 266.4 million.

Gross Profit Margin

In the third quarter, PUMA’s gross profit margin decreased by 180 basis points to 50%. The decline was caused by price sensitivities in the EMEA region as well as changes in the regional as well as product mix.

After nine months, the gross profit margin stood at 50.8% after 51.4% last year. PUMA’s margin in Footwear remained flat at 50.2% while Apparel was at 51.6% after 52.2%. Accessories posted 51.1% compared to last year’s 54.8%. This decrease stems from the impact of the newly acquired and integrated Cobra Golf business carrying a low margin as the former owner, Acushnet, provided sales services outside the US until end of August.

Operating Expenses

The OPEX increased by 10.4% to € 283.6 million in the quarter. This rise is caused by the extension of the scope of business after Cobra Golf was included as well as currency impacts. On a comparable basis, operating expenses were flat, which is reflected in an improved OPEX ratio of 36.2%.

In the first nine months, operating expenses rose by 3.1% to € 776.4 million, which translates into an improved cost ratio of 37.3% versus last year’s 38.2%. The cost savings are a direct result of PUMA’s restructuring and reengineering program, which will be finalized during the fourth quarter 2010.

EBIT

In the third quarter, PUMA’s operating result before special items improved significantly by 15.3% to € 113.0 million versus € 98.0 million last year. As a percentage of sales, this translates into an operating margin of 14.4% compared to 14.5% last year.

As of September 30th, 2010, the operating result before special items rose 7.7% from € 275.1 million to € 296.1 million. The operating margin stood at a solid 14.2% compared to 14.0% last year.

Financial Result/Income from Associated Companies

The financial result shows a negative € 1.9 million for the third quarter and was flat versus last year.

For the first nine months, the financial result improved from € -5.6 million to € -4.6 million, while € 0.5 million of income was generated by associated companies.

Net Earnings

In the third quarter, PUMA’s pre-tax profit (EBT) improved by 15.7% to € 111.1 million after € 96.0 million. This led to an improvement in net earnings, which increased € 9.7 million or a strong 14.2% to € 77.6 million. Earnings per share went up to € 5.16 in the quarter compared to € 4.50 last year.

In the first nine months, earnings before tax stood at € 292.0 million versus € 159.4 million, an increase of 83.2%, while net earnings improved by 83.5% to € 205.5 million from € 112.0 million. Consequently, earnings per share jumped from € 7.42 to € 13.65. The operational tax ratio came in at 29.6% after being at 27.9% last year.

Net Assets and Financial Position

Equity

As of September 30th, 2010, the balance sheet total climbed by 18.4% to € 2,436.5 million. This increase was mainly caused by the inclusion of Cobra Golf as well as currency effects. The equity ratio improved from 59.1% in the previous year to 60.1% this year.

Working Capital

In reporting terms, inventories grew by 27.1% to € 452.9 million while – on a comparable basis – inventories rose by 6.3% to support the expected sales increase in the upcoming quarter. Due to the increase in sales in the quarter, accounts receivables were up by 14.2% (4.7% on a comparable basis), reaching € 606 million. Working capital totaled € 594.2 million (ex acquisition € 518 million) compared to € 523.3 million last year.

Capex/Cashflow

The company invested € 35.5 million in the first nine months into property, plant and equipment versus € 40.8 million last year. An outflow of € 102.4 million (last year: € 75.8 million) is related to acquisitions.

The free cashflow before acquisitions reached € 46.4 million compared to € 145.1 million last year.

Cash position

Total net cash position at the end of September increased to € 360.7 million from € 339.5 million last year, underlining PUMA’s strong financial position.

Share Repurchase

PUMA AG continued its share buyback program in the third quarter and, as of the reporting date, the company purchased 102,219 of its own shares. This equals 0.7% of the share capital and reflects an investment of € 23,4 million.

Other Events

Spain Arbitration Ruling

As announced within the 2010 half-year year financial statements, PUMA AG has filed a cancellation recourse against the arbitration ruling regarding the PUMA trademark rights in Spain. As of the reporting date, legal council and advisers continue to believe that a favourable outcome in this case is more likely than not.

PUMA takes over full control of Business in China as of January 1, 2011

PUMA AG will acquire the remaining 49% of the shares of its long-term Chinese joint venture Liberty China Holding Ltd, effective 1 January 2011, to be in full control of its business activities in China and Hong Kong. Liberty has been a Joint Venture between PUMA and Swire Resources Ltd., of which PUMA has owned 51%. Under the Liberty holding, PUMA China Ltd. and PUMA Hong Kong Ltd. have been responsible for the distribution of PUMA products in China for several years and will continue to do so.

Through the full take over, PUMA’s position in China will be further strengthened and maximized, making sure that the Sportlifestyle Company taps into the enormous potential that the largest market in Asia offers. PUMA will be in sole charge of driving its growth strategy to capture all opportunities on the Chinese market as part of PUMA’s five-year growth strategy. The impact on the consolidated financial statements will be insignificant, as the joint venture had already been consolidated within PUMA AG at 100% since its inception

Irregularities committed by Greek Joint Venture partner

As already mentioned in our ad hoc release on 25. October 2010, irregularities were discovered at PUMA’s Joint Venture ‘PUMA Hellas S.A.’ in Greece, which will affect PUMA’s consolidated financial statements for the full year 2010 and require a restatement of the 2009 figures in the 2010 statements. All necessary measures have been initiated and are on-going. For further information and details please refer to the ad hoc release of Monday, 25 October 2010, on www.about.puma.com

Outlook Full Year 2010

The second half of the year continues to show solid sales growth which should more than offset the flat performance in the first half of the year. Therefore, management now expects full year consolidated sales to grow at a mid to high single digit rate. Considering slight changes in the gross margin, operating result before special items should improve compared to last year.

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This document contains forward-looking information about the Company’s financial status and strategic initiatives. Such information is subject to a certain level of risk and uncertainty that could cause the Company’s actual results to differ significantly from the information discussed in this document. The forward-looking information is based on the current expectations and prognosis of the management team. Therefore, this document is further subject to the risk that such expectations or prognosis, or the premise of such underlying expectations or prognosis, become erroneous. Circumstances that could alter the Company’s actual results and procure such results to differ significantly from those contained in forward-looking statements made by or on behalf of the Company include, but are not limited to those discussed be above.

“With the acquisition and full control over managing all aspects of the PUMA brand, we will ensure that we better capitalize on future opportunities and accelerate brand development in Asia Pacific within the next phase of our company’s development” said Jochen Zeitz, Chairman and CEO of PUMA. “We thank Swire for being our partner in the first stage of our business operations in China and Hong Kong.”

PUMA’s five-year company strategy envisages a long-term sales potential of 4 billion Euros deriving from organic growth through assessing growth potential in mature and emerging markets and prioritizing investment opportunities among other.

As part of its ambitious strategy plan for the region Asia Pacific, PUMA will expand its business in China by upgrading and opening PUMA Stores with new store designs and strengthening its cooperation with its existing business partners.

PUMA’s Chief Executive Officer and Chief Sustainability Officer of PUMA’s majority shareholder PPR Jochen Zeitz who received the award from Federal Environment Minister Dr. Norbert Röttgen at the award ceremony in Düsseldorf said: “We are very pleased that PUMA’s extensive endeavours to become not only the most desirable but also the most sustainable Sportlifestyle Company worldwide have been recognized and rewarded with the German Sustainability Award. I am convinced that it must become a given that every company has to be sustainable and I am grateful that the German Sustainability Award acknowledges sustainable business strategies and hence underpins the imperative for corporations to change their business practices for the better.”

PUMA has been collecting E-KPIs (Environmental Key Performance Indicators) from all its offices and stores worldwide for the last five years and identified several key areas that need to be dealt with in order to further reduce PUMA’s “paw print”. To address these issues, PUMA has laid out ambitious targets to be achieved by 2015 as part of the company’s long-term sustainability program. Within this context, PUMA will introduce a Sustainability Index, the so-called S-Index that serves as an internal benchmark for sustainable products and communicates the products’ sustainable features to consumers. 50% of PUMA’s international collections will be manufactured according to the PUMA S-Index standard by 2015, using sustainable materials such as organic cotton, Cotton Made in Africa or recycled polyester as well as applying best practice production processes.

Furthermore, PUMA wants to reduce CO2, energy, water and waste in PUMA offices, stores, warehouses and direct supplier factories by 25% over the next four years. Introducing a paperless office policy will curtail paper usage by 75% and more efficient product transport solutions by our logistic partners should reduce their CO2 emissions by 25%. To monitor these objectives PUMA has also established an external Advisory Board of experts in sustainability to consult on PUMA’s mission and audit PUMA’s sustainability program.

The German Sustainability Award which runs in its third year has been established to reward role model corporations which combine business success with social responsibility and environmental protection. Special focus is on consistent sustainability management of business and brand. 560 companies had entered their application into the competition.

“We are very happy to announce the continuation of our partnership with the Cameroon Football Federation,” said Jochen Zeitz, Chairman and CEO of PUMA. “During the fourteen years we have worked with them, their forward thinking has allowed us to undertake and execute several exciting and innovative projects that simply would not be possible with other federations. They are one of our key partners in World football, and we have some great ideas that we look forward to unveiling in the coming months and years.”

“PUMA is a key partner for us, and when the previous agreement concluded there was never any question that we wouldn’t re-sign with them,” said Iya Mohammed, President of the Cameroon Football Federation. “PUMA understands implicitly what we want to achieve, and it is a privilege to work with a company with the same values and ambition. We look forward to working with them for many years to follow.”

In addition to the Cameroon national team sponsorship, PUMA also sponsors individual Cameroon players including captain and record goalscorer striker Samuel Eto’o, Benoit Assou-Ekotto, Stephane Mbia, Landry Nguemo and Mohammadou Idrissou.

In keeping with PUMA’s mission to be the most sustainable sportslifestyle brand, the Cameroon Football Federation will take a carbon neutral stance for the entirety of the partnership. Using UNEP’s carbon neutral standard, PUMA and the Cameroon Football Federation will offset the carbon footprint of the Federation through the next FIFA World Cups™.

PUMA’s commitment to Africa extends beyond team and player partnerships, as well. PUMA will continue to support a number of grass roots initiatives across the continent. Coinciding with this announcement, 10,000 durable footballs were delivered to Africa following a joint pledge in collaboration with Intersport® earlier this year, a third of which will go to football projects in Cameroon. PUMA was also the official sponsor and fanwear supplier of the 2010 African Cup of Nations in Angola.

For more information about PUMA Football, please visit www.pumafootball.com.

“The goal of our PUMA.Peace initiative is to create programs that foster a more peaceful world than the one we live in today,” said Jochen Zeitz, Chairman and CEO of PUMA. “Each of us can make a difference in this world as individuals, as corporations and through strategic partnerships. Moreover, at PUMA we feel that we are uniquely positioned to contribute to making the world a better place for generations to come. Our PUMA.Peace program recognizes the power of sport to bridge divides and unite people around the world through a common language. We are extremely honored to receive a Peace and Sport Award in support of our endeavors.”

PUMA works towards a better world for generations to come through the PUMAVision platform. Through the initiatives of PUMA.Peace, PUMA is providing real and practical expressions of this vision by strategically implementing long-term partnerships, creating initiatives and raising global awareness for these projects. PUMA.Peace works to inspire and educate individuals around the globe that peace is possible and utilizes sport as a vehicle to achieve this goal.

PUMA continues to raise awareness for the United Nations International Day of Peace; an annual day of global ceasefire and non-violence on September 21, and partners with the non-profit organization that inspired the days creation, Peace One Day. In 2008, PUMA.Peace and Peace One Day launched One Day One Goal, a global football movement that celebrates Peace Day with goodwill matches played around the world, and in many cases between communities previously in conflict. In 2010, over 3,000 One Day One Goal commemorative football matches were played around the globe on or around Peace Day in every UN Member State.

PUMA.Peace initiated a symbolic truce with adidas in 2009, after a 6-decade rivalry started by the companies founding brothers, as a commitment to Peace Day and to establish a new legacy of peace between the companies. The companies played a mixed One Day One Goal football match between employees, including CEOs Jochen Zeitz and Herbert Hainer, and in 2010 the town of Herzogenaurach where the companies are headquartered also joined in and put aside its history of conflict to play for the “Peace One Day Cup”.

In 2010, PUMA launched a long term partnership to champion independent documentary films, with Channel 4 BRITDOC Foundation. Through the establishment of the PUMA.Creative Documentary Fund, the company will dedicate financial support, creative counsel and industry recognition to international documentary filmmakers, whose creative storytelling highlights social justice, peace and environmental issues.

PUMA.Peace will continue to develop initiatives that promote and support peace across the globe. In addition to PUMA’s Award for the Best Corporate Social Responsibility (CSR) Initiative, five other Peace and Sport Awards were distributed last night including: the Grand Prix for the Peace and Sport Image of the Year, the Award for Best Peace Project from an International Sports Federation, the Award for the Sports Event for Peace of the Year, and the Award for the Sports Non-Governmental Organization of the Year. Winners were selected by a jury composed of eminent figures, invested at the highest level in activities for the promotion of peace through sport.

PUMA achieved a company score of 86 points, while the average score in the industry amounted to 54 points. The scores reflect the company’s performance across economic, environmental and social criteria compared to its industry peers and range on a scale from 0 to 100%. SAM, an investment boutique focused exclusively on Sustainability Investing, together with Dow Jones Indexes, rated PUMA’s economic dimension at 86, the environmental dimension at 100 while the social dimension was given a score of 80 in the year 2010.

Through PUMAVision, PUMA’s sustainability concept, the Sportlifestyle company has launched numerous initiatives to drive PUMA to cleaner, greener, safer and more sustainable systems and practices. PUMA’s longstanding work and efforts to improve social, labour and environmental standards throughout its operations date back to 1999. From that time, the company has continuously incorporated environmentally-friendly practices to reduce its impact on the planet and realized several successful large-scale initiatives such as sourcing of raw materials through the Cotton made in Africa campaign to building the capacity of its suppliers as well as the offsetting the company’s CO2 emissions as of 2010.

As part of PUMA’s long-term sustainability plan, the analysis was commissioned in recognition that producing and selling PUMA products has a wide impact along the entire supply chain. By identifying the most significant environmental impacts, PUMA will develop solutions to address these issues, consequently minimizing both business risks and environmental effects. PUMA’s E P&L statement provides an unprecedented and detailed level of understanding, sets a new benchmark in corporate environmental reporting and will hopefully serve as a catalyst for others to join an industry-wide engagement.

The first results of PUMA’s E P&L have revealed that the direct ecological impact of PUMA’s operations translates to the equivalent of €7.2 million of the overall impact valuation. An additional €87.2 million falls upon four tiers along the supply chain. In total, this leads to an overall environmental impact of GHG and Water Consumption of PUMA’s operations and the supply chain of €94.4 million. By putting a monetary value on the environmental impacts, PUMA is preparing for potential future legislation such as disclosure requirements. These costs will serve as a metric for the company when aiming to mitigate the footprint of PUMA’s operations and all supply chain levels and will not affect PUMA’s net earnings.

“The E P&L statement is a milestone in PUMA’s mission to become the most desirable and sustainable Sportlifestyle company in the world. It is an essential tool and a shift in how companies can and should account for and, ultimately, integrate into business models the true costs of their reliance on ecosystem services and PPR HOME will encourage and collaborate with the industry to adopt this tool,” said Jochen Zeitz, Chairman and CEO of PUMA and Chief Sustainability Officer PPR. “Gaining a better understanding of the source of the natural goods and services PUMA relies on and the declining availability of the basic resources required for our business growth, will help PUMA build a more resilient and sustainable business model and ultimately better manage its impacts on the environment.”

PUMA chose GHG emissions and water for the first analysis in their E P&L development as they were considered to be the most significant environmental impacts. The economic valuation of these impacts (please refer to www.about.puma.com for details of methodology) by PwC (GHG emissions) and Trucost (water use), estimated a value per tonne of CO2e at €66 and an average water value of €0.81/ m3. The analysis found that:

• Including the full supply chain, the overall impact was valued at €94.4 million in total for 2010 with greenhouse gases equating to €47.0 million and water to €47.4 million.

• Of the total, PUMA’s operations accounted for 15% of the overall GHG emissions analysed, and 0.001% of water consumption. This is the equivalent to €7.2 million of the overall valuation.

• The remaining GHG and water consumption – the equivalent of €87.2 million – fell upon its entire supply chain.

“Fundamentally, this analysis is about risk management for the environment, and for business, because you cannot separate the two,” said Alan McGill, partner, PwC Sustainability and Climate Change. “This is a first for a company to measure and value the impact of its business in this way and gives PUMA a unique and challenging insight into their supply chain. It’s a game–changing development for businesses to integrate environmental issues into their current business model like this, because it provides a basis for embedding their reliance on ecosystem services into business strategy. Tackling the impacts will need concerted efforts by the businesses in their supply chain as PUMA shares a common but differentiated responsibility with other brands at the production facilities,” he continued.

Analyses of the water and GHG impacts were performed across PUMA’s value chain, including the operations of raw material and product suppliers as well as logistic services, which PUMA has limited control over.

• Tier 4: Raw material production, such as cotton farming, oil drilling, etc.

• Tier 3: The processing of raw materials, such as leather tanneries, chemical industry, oil refining

• Tier 2: Outsourced processes such as embroiders, printers, outsole production

• Tier 1: The manufacturing of its products

• PUMA core operations: Design, logistics services, warehousing, head office functions and retail

Biggest Environmental Impact Derives from Raw Material Production

The analyses have shown that the biggest environmental impacts in the value chain occur, not through PUMA’s core operations but at the level of its Tier 4 suppliers, where raw materials are derived from natural resources, such as the cultivation and harvesting of cotton, cattle ranching for leather, and natural rubber production. This part of the supply chain accounts for 36% of the total GHG (€16.7 million) and 52% of water consumption (€24.7 million); indicating that the most water intensive activity in the production of a t-shirt occurs at the initial step – the cultivation of cotton.

This analysis provides the first results of the first stage in a three-stage process to consider PUMA’s and its supply chain’s environmental, social and economic impacts, ultimately leading to the development of an all encompassing Environmental, Social and Economic Profit and Loss Account.

The final results completing Stage 1 – to be released in autumn this year – will see the inclusion of additional environmental key performance indicators such as acid rain and smog precursors, volatile organic compounds, waste and land use change, completing the valuation of the significant environmental impacts in PUMA’s value chain.

As the impacts of PUMA’s operations not only refer to the natural environment, Stage 2 will require collaboration with other corporate and civil society stakeholders in tackling the complexities of social factors in sustainability such as fair wages, safety and working conditions, enabling the development of an Environmental and Social P&L account.

Stage 3 will complete the other side of the equation, moving to the equally complex area of valuing the social and economic benefits from PUMA’s operations through the creation of jobs, tax contributions, philanthropic initiatives and other value-adding elements. These benefits will then be offset against the environmental and social costs calculated in Stages 1 and 2, hence completing PUMA’s Environmental, Social and Economic P&L statement. Stage 3 will require a strong collaborative effort to develop robust valuation methodologies and approaches. This challenge will have resonance with the corporate sector as more and more companies actively undertake similar analyses throughout their supply chains.

“Companies that understand their dependence on natural resources along the value chain are well placed to manage underlying risk from rising raw material costs and scarcity of supply issues”, said Dr. Richard Mattison, CEO of Trucost. “Companies are already facing increasing input costs as a result of rising commodity prices related to climate change and water availability. PUMA is now positioned to address these challenges in advance and we have helped provide them with management tools to minimise risk, hedge against uncertainty and identify new opportunities to optimise the sustainability of its products.”

PUMA’s Response to the Results to Minimize Risks

To reduce the impact, PUMA will start by using these findings to better direct its sustainability efforts and initiatives. PUMA’s sustainability scorecard, which was introduced in early 2010 and sets targets such as 100% sustainable packaging and 25% reductions of carbon, energy, water for 2015, has already begun to address the environmental impacts at PUMA’s operations and Tier 1 supplier levels. PUMA will examine how to adjust the targets set in its current sustainability scorecard and look for solutions along the entire supply chain.

In order to target solutions that address the levels of the greatest impact from tier two to four, PUMA and PPR HOME will look to play a catalytic role in raising awareness that the current business model is outdated and needs decisive reforms, forging partnerships and collaborations to explore new and innovative ways to differentially attribute the responsibilities and equitably share the costs of these, while building capacity at suppliers’ factories and developing new materials and products.

Raising Awareness

PUMA and PPR HOME are sharing the results of the E P&L with other industry players and corporations to leverage adopting a new business model that takes the costs of using natural resources within business operations into account.

This analysis will also help to better assess the relative environmental impacts of sourcing from different countries and regions. Down the line it will allow PUMA to improve supply chain management and reduce supply chain risks.

Developing synergies and partnerships

PUMA’s majority shareholder, PPR, has recently joined the World Business Council for Sustainable Development (WBCSD), which could provide an appropriate platform for constructive debate on the issue of differentiated responsibility and equitable sharing of the costs of environmental impacts while exploring new business models to help reduce these costs in future. For many years, PUMA has been engaging with other global initiatives, industry dialogues and corporate alliances to address sustainability challenges such as: the UN Global Compact, the Fair Labor Association, the Carbon Disclosure Project and, most recently, the 2 Degree Initiative and PPR’s luxury brands have been long-term members of organizations such as the Sustainable Luxury working group (set up by the Business for Social Responsibility) and the RJC (Responsible Jewellery Council).

PUMA will soon join the Sustainable Apparel Coalition, an industry-wide group of leading apparel and footwear brands, manufacturers, experts and the United States Environmental Protection Agency to reduce the environmental and social impacts of apparel and footwear products. This underpins PUMA’s effort to increase collaborations with its industry peers to address the environmental impacts occurring at all shared levels of the supply chain.

Building Capacity to Create Snowball Effect

PUMA will focus even more attention on capacity building projects in collaboration with other industry players to help Tier 1 supplier management identify weak points in their operations by offering training programs and by enabling them to make improvements, independently. For more than six years, PUMA has carried out capacity building projects together with other industry brands to improve environmental and social conditions at Tier 1 supplier factories.

Over the past decade PUMA has ensured that Tier 1 suppliers are committed to adhere to PUMA’s environmental and social standards. The company will now require Tier 1 suppliers to guarantee that all of their suppliers in the next tier down follow the same guidelines. Through this it is hoped that over time all suppliers will comply with PUMA’s Code of Conduct and Environmental, Social and Health & Safety standards.

Innovating for the Development of Sustainable Materials and Products

By 2015, 50% of PUMA’s international collections will be manufactured according to PUMA’s internal sustainability standard, PUMA S-Index, using more sustainable materials such as recycled polyester, that take into account the enormous environmental impact of raw material production. PUMA will investigate the opportunity to address the impact of Tier 1 to Tier 4 suppliers through the innovative development of more sustainable materials and products.

The verdict was reached on 14 June 2011. This outcome is a direct consequence of PUMA’s successful appeal against the arbitration ruling, which previously required remittance of said funds to the former Spanish licensee and holder of the remaining rights Estudio 2000 S.A. to vest the remaining trademark rights in Spain.

“The ruling by the District Court of Madrid is totally in line with what we had anticipated and frees us from the payment of 98 million Euros for the vesting of PUMA trademark rights,” said Jochen Zeitz, Chairman and CEO of PUMA AG. “We will now make full use of all the options available to us to secure all PUMA trademark rights in Spain.”

PUMA will continue its efforts in uniting all Spanish PUMA trademarks.