The new PUMA store will act as a laboratory or incubator for the brand to experiment with new ideas and infuse the PUMA personality with the design sensibility of experts from various industries. Each collection in the store is created to stand-alone, however, they are being presented as a together under one roof for the first time with the opening of the new store.

“After embarking into the sport-fashion segment in the mid-1990’s, we felt it was time to create a PUMA environment that showcases the inherent design of these products,” said Jochen Zeitz, CEO and Chairman of PUMA AG. “This store is a first in many respects. PUMA is the first to take the sport-fashion concept a step further by creating a multi-branded store environment. The Meatpacking District store will also provide a setting to connect directly with a cutting edge consumer.”

Two distinctive logos, the jumping cat and the formstrip, typically identify PUMA product to consumers. The existing PUMA Concept Stores utilize the jumping cat branding as its focal point for design direction. In contrast, the PUMA Store Meatpacking District takes its lead for interior design from the brand’s signature formstrip. Intended to highlight the unique aspects of a multitude of collections in an inclusive space, the store also has a black interior that provides a neutral backdrop to focus consumers on the designs of each range. Each of the fixtures in the store is inspired by sport and it is designed to be a place where all of PUMA’s sport-fashion brands can intersect and interact in a unique way. This is shown through new graphics that incorporate the individual logos of all of these collections.

New York, specifically the Meatpacking District, draws the right clientele to support a retail environment dedicated specifically to PUMA’s sport-fashion collections. Known for embracing design and progressive thought, New York is also the center of fashion for the United States. Just as the PUMA Concept Store in New York is the right fit for Broadway in Soho, this new PUMA store is uniquely suited for W 14th Street in the Meatpacking District.

German Chancellor Gerhard Schroeder has joined Pelé and PUMA Chairman and CEO, Jochen Zeitz, at 14:45 CET for a brief statement and photo opportunity to celebrate the German sportswear brand’s renewed partnership with the famed football legend.

“Love, passion and football are the three words that come to mind when thinking about Pele,” said Jochen Zeitz, PUMA Chairman and CEO. “We are inspired by Pelé’s presence and we are excited to be working with this remarkable football legend once again.”

While the eyes of the world focus on Germany as the host nation of the 2006 football world championships, this partnership is especially poignant for PUMA. This brand initiative will position Pelé as the brand’s football ambassador while PUMA’s active players promote the brand’s technical football range on the pitch.

“I am very pleased to be working with PUMA once again,” said Pelé. “Over the years PUMA has been my brand and it is great to reunite with them so we can create some excitement for the football fans leading into 2006.”

PUMA AG announces its consolidated financial results for the 1st Quarter of 2005

Highlights Q1:

• Global brand sales increase more than 18% currency-neutral
• Consolidated sales grew almost 14% (currency-neutral)
• Gross profit margin on highest level in company’s history at 53.4%
• EBIT margin increases to 26.5%
• EPS improves by 13.5% from €5.00 to €5.68

Outlook 2005:

• Future orders once again increase by more than 6% currency-neutral and reach €812 million
• Management reaffirms sales and earnings expectations for 2005

Sales and Earnings Development January through March 2005

Global brand sales up over 18%

PUMA’s worldwide branded sales, which include consolidated and license sales, rose 18.1% currency-neutral or, in Euro by 16.3% to €639 million. Footwear sales improved by 13.3% (in Euro 11.5%) to €376 million, Apparel by 21.5% (19.7%) to €211 million and Accessories by a strong 46.9% (45.1%) to €52 million.

Consolidated sales almost 14% above last year

Consolidated sales increased for the 25th consecutive quarter and continued with another double-digit growth of 13.7% currency-neutral in Q1. In Euro, this means an increase of 11.9% to €497 million. Sales in the largest segment, Footwear, were up 12.1% (in Euro 10.6%) to €338 million and Apparel by 12.4% (11.2%) to €124 million. Accessories realized the strongest growth rate with 32.5% (30.1%) and sales climbed to €35 million. All regions contributed positively to this performance.

Mayfair is an asset management company that manages the investments of Günter and Daniela Herz and their families. The company invests in property, financial and business assets.

Jochen Zeitz, CEO of PUMA AG: “We welcome Mayfair as a new shareholder and also welcome the investment in the company, particularly in view of PUMA’s strategic plans as part of Phase IV of the long-term development of the company.”

PUMA will make its announcement on Phase IV of the strategic development of the brand and the company as scheduled in the last week of July.

“With the borders of the European Union shifting eastward, Poland’s position as a key market is further underlined,” said Jochen Zeitz, PUMA CEO and Chairman, attending a press conference in Warsaw. Confirming the strategic importance of the continued collaboration he added, “PUMA has successfully established itself in this important market, and in doing so the partnership with the Polish FA has been a major contributor. Both parties have a strong heritage in football, but more importantly they have their eyes set on what promises to be an exciting future.”

Michal Listkiewicz, President of the Polish Football Association: “We are very pleased to have extended the co-operation with a global brand of PUMA’s magnitude. The Polish FA has a proud international record and so does PUMA. As such, it feels very reassuring to work with a partner that shares our ambition concerning the future of Polish football.”

The Polish National Team endorses the PUMA Cellerator line – the brand’s established statement football concept in footwear, apparel and equipment. All Cellerator apparel takes advantage of PUMA’s AMT (Advanced Movement Technology), which incorporates articulated cut lines to reduce friction, ensuring the player has a complete freedom of movement. In addition, the textile and material selection across the range has been tailored to players’ requirements – be it breathability, ventilation, moisture management and, naturally, comfort. The FIFA approved Cellerator ball introduces the revolutionary Dimple II CW System developed and designed to boost speed and distance with controlled trajectory.

Poland, whose honors include an Olympic Games’ title (1972), an Olympic silver medal (1976) and two FIFA World Cup third place finishes (1974 and 1982), is currently in second place of their 2006 FIFA World Cup qualification campaign, facing Austria, Azerbaijan, England, Wales and Northern Ireland in Group 6.

Samoa Rugby Union Chairman, Tuilaepa Sailele Malielegaoi stated, “the Samoa Rugby Union is very excited about the relationship with PUMA.” He went on to say, “At this critical point in the rebuilding of our national rugby team we believe that PUMA’s innovative success with other sporting teams will also lead us to further success on the field and at the next Rugby World Cup.”

Samoa is considered one of the most fertile breeding grounds for rugby talent in the world; players of Samoan descent are currently on the roster of elite clubs and National teams in Australia and New Zealand. With a proud heritage in the game, Manu Samoa has firmly emerged on the professional rugby scene as a strong competitor with a combination of fast paced, powerful, dynamic play and flair.

After winning the 1993 Hong Kong Sevens, Samoa went on to success in the 1995 Rugby World Cup (RWC) in South Africa, where they reached the quarterfinals with wins over Argentina and Italy. At the 1999 RWC the team delivered a decisive and shocking victory over the host nation of Wales. Samoa went on to nearly defeat England, the eventual champions in 2003 at the RWC to secure a place in the finals. Looking ahead to the 2007 RWC, Manu Samoa will be major contenders and the team to watch.

The new agreement commences on October 15th, 2005 and includes all on field, sideline, training and representation apparel, as well as a selection of lifestyle offerings. Manu Samoa will debut their new PUMA kit at the Northern Hemisphere tour, which is scheduled to commence in November 2005.

“We are very excited to be working with the Moroccan Association”, says Jochen Zeitz, Chairman and CEO of PUMA AG. “PUMA has been strongly connected with athletics for many years. By adding the Moroccan Association to our athletics roster it furthers the brand’s positioning in this category and strengthens PUMA’s position as one of the leading suppliers in athletics.”

“We appreciate our new apparel supplier PUMA and are glad to cooperate with the company”, added Aziz Daouda, Technical Director of the Moroccan National Athletic Association. “Especially our common aim of engagement concerning youth training and our combined participation in the Olympic Games in Beijing 2008, which is of great importance to the Moroccan Association.”

During the last few years the Moroccan Athletic Association has enhanced its athletics development program and now possesses a successful international team. One of Morocco’s many outstanding athletes is the 27 year-old Hasna Benhassi who won the 1500m gold medal at the 2001 indoor championships in Lisbon and the 800m silver medal in the 2004 Athens Olympics.

Alongside the Moroccan Athletic Association, PUMA is also the official apparel supplier for the Swedish and Jamaican Athletic Associations.

In addition PUMA is in the process of setting up a fully owned subsidiary in the Middle East, located in Dubai, which will serve as a hub coordinating our efforts across the region. PUMA Middle East should be operative and consolidating sales as of January of next year for most countries in the region.

Jochen Zeitz, CEO and Chairman of PUMA AG: “We see significant potential for PUMA in India in the long run which we intend to fully explore in the early years of the market’s development. We thank Planet Sports for their work as a licensee for PUMA and look forward to jointly enhancing our retail structure with them in the future. Our new Middle East Hub will provide us with a platform to better coordinate as well as grow our business in the entire Middle East region.”

Jochen Zeitz, CEO and Chairman of PUMA AG: “Starlike has been very successful in delivering strong growth over the past few years while substantially increasing PUMA’s desirability and establishing us as a top 3 player in the market. With this mutually beneficial joint venture we will build on this strong position to further maximize the PUMA brand potential.”

Michael Lin, Chairman of Starlike: “Starlike is excited to start the new partnership with PUMA. With PUMA’s global strength and Starlike’s dynamic performance, we believe the combination will lead us to a great triumph in the future.

Category Expansion will encompass growth in existing business as well as entry into categories that are new to PUMA. In general, the company will take a multi-dimensional approach to category expansion, driving growth by making strong pushes across the full spectrum of sportlifestyle, from performance to fashion.

In addition to adding depth to PUMA via existing and new categories, the company will also add breadth by accelerating its Regional Expansion.

Regional expansion is planned to occur in markets that are currently run by PUMA as well as through several selective joint ventures and takebacks of its licensed business in its core segments. Management intends to start its regional expansion with majority owned Joint Ventures together with its current license partners in Japan (apparel business), China/Hong Kong and Taiwan China as well as fully owned subsidiaries in India and Dubai for the Middle East region, all of which are planned to be operational as of 1st of January 2006.

Phase IV will also be the first time that the company looks to selectively expand with brands other than PUMA. Towards the end of Phase IV, Non-PUMA brands could contribute up to 10% of overall business.

From today’s point of view, management now defines the long term Company Potential at €3.5 billion, of which the company is planning to capture a significant part in the coming five years.

The company will finance the expansion plan through its strong cash position and future cashflow generation, with an estimated total additional investment of up to €500 million over the next 5 years.

The company also intends to distribute a significant amount to its shareholders. PUMA is planning to gradually increase its dividend payout ratio from currently 6% to between 20% and 25%.

In addition, PUMA intends to increase its share buy back activities. PUMA now intends to fully utilize the total authorized repurchase program of up to 10% of share capital. Therefore, the current resolution of up to 800,000 shares will be extended to up to 1.6 million shares. The management considers an investment in PUMA’s shares to be in the company’s best interest while also ensuring flexible management of the company’s capital requirements. Hence, a total of up to an additional €500 million is now scheduled to be distributed to shareholders through a gradual increase in the dividend payout ratio as well as share buy-backs.

Phase IV Guidance

PUMA will kick-off Phase IV in the World Cup year 2006, which will be marked by a significant increase of brand investments, in particular into marketing, sales (including own retail) as well as product development and design.

Management is targeting double-digit annual sales growth, starting at between 20-30% in 2006, and continuing with double-digit average growth over the following four years. PUMA is also expecting to sustain an industry-leading gross profit margin of approximately 48% in the long run, with a 50-51% margin in 2006 and declining 0.5% annually, with the change from today’s levels primarily due to category and product mix, as well as the shift that is expected through the regional expansion. Due to the plan to reinvest parts of the strong profitability to kick start Phase IV, EBIT should initially decline to between 300 and 330 million in 2006, and should boost 2007 to a new record EBIT level, followed by a double digit average growth thereafter.

While absolute profits will be rising in the double-digits, the regional expansion should lower the EBIT margin as a large part of the royalty income will no longer be consolidated without it’s corresponding sales as well as due to regional sales percentages shifting. Therefore, EBIT margin is expected between 13% and 15% in 2006 and around 15% thereafter.

With an anticipated tax rate in a range of 30 – 33% and minority interest in a range between 0.5 and 1% of sales, net earnings should come in between 210 and 230 million in 2006, with double-digit growth in the following years.

As investments and share buybacks should be more significant in the beginning of Phase IV, PUMA expects the current net cash position to decline initially and later to gradually build up to be available for non-PUMA brand acquisitions and/or additional share buy backs beyond the new resolution.

Overall, in Phase IV PUMA anticipates achieving a high rate of return on investment as well as the creation of significant shareholder value.

PUMA further announces a change in the board of management. Ulrich Heyd, who has been a PUMA board member in charge of legal affairs and worldwide licensees for over 20 years and who has served the company for over 30 years, has decided to retire at the end of this year. Dieter Bock, member of the Group Executive Committee who has been with PUMA since 1979, will join the board of management with immediate effect, and will be in charge of PUMA Finance.

Jochen Zeitz, CEO: “At year end 2005, all set targets for Phase III should be reached or significantly surpassed. With our strong first-half performance and the successful close of Phase III, we now turn our focus to Phase IV of our strategic plan in which we are targeting to firmly establish PUMA as one of the top 3 brands in the global sporting goods market with the long term mission of becoming the most desirable sportlifestyle company.”

Hit Union combines deep local knowledge of the special Japanese textile market with an extensive manufacturing background. This joint venture will establish Japan as the 2nd largest market for PUMA and it immediately establishes PUMA in the top three brands in its segment in the country.

In 2003 PUMA bought back its footwear and accessories license in Japan and founded a fully owned subsidiary, PUMA Japan K.K. The aim of the joint venture is to have the critical Japanese business fully aligned under one umbrella while being able to continue to use the tremendous apparel expertise of its current license partner and thus to quickly explore the further potential of the PUMA brand in Japan.

Jochen Zeitz, CEO and Chairman of PUMA AG: “Hit Union have done an outstanding job with our business in the past, and now with our new partnership as well as our direct involvement in the management of all aspects of our brand, we will ensure that we jointly capitalize even more on future opportunities. Since Japan, and Tokyo in particular, is the epicenter of trends in the Asia/Pacific region, our focus is on further strengthening our position in this key market.”

Katsuyuki Tanabe, President and CEO of Hit Union: “Over the past years, PUMA apparel has become one of the leading brands in the Japanese market. Now with this joint venture partnership we look forward to being able to further accelerate our growth and desirability throughout Japan.”