“We are proud to be sponsor of the “Squadra Azzura” beyond the World Cup in 2014. The long-term strategic partnership with the Italian Football Association underlines PUMA’s reinforced commitment to further strengthen its position as one of the leading football brands,” said Jochen Zeitz, CEO and Chairman of PUMA AG.

With the victory of the Italian “Squadra Azzura”, for the first time in company history, a PUMA sponsored National Team has won the World Cup in 2006.

“We are thrilled to announce PUMA’s entry into the Volvo Ocean Race – one of the world’s iconic sporting events,” said Jochen Zeitz, CEO and Chairman, PUMA AG. “Its global reach, lifestyle appeal and true sporting characteristics match the PUMA brand perfectly and provide PUMA with exciting new opportunities to make a strong mark in the world of sailing, on and off the water. This continues our strategy outlined in Phase IV of our long-term plan to expand into new product categories and explore the potential of the brand.”

Volvo Ocean Race CEO Glenn Bourke welcomed PUMA’s involvement in the race. “Obviously I am delighted for the Volvo Ocean Race that a company with such global gravitas as PUMA has decided to come on board,” Bourke said. “What I am most pleased about is that a big consumer brand sees the race as a viable mechanism for promoting its brand and showcasing its products. This race is hugely demanding psychologically, physically and emotionally on everybody involved in it and we are confident that our new partner PUMA has what it takes to support the racers with high quality and innovative Sportlifestyle products.”

The PUMA Racing Team will be skippered by Ken Read. Considered one of the world’s most accomplished racers, the U.S.-born Read has twice helmed America’s Cup programs in 2000 and 2003. He was named “United States Rolex Yachtsman of the Year” twice and has over 40 World, North American and National Championships to his credit. Read joined the Ericsson Racing Team for the last four legs of the 2005-06 Volvo Ocean Race and was immediately “hooked” by the boats and the race itself.

“Running and skippering a Volvo Ocean Race program is a dream come true. I’m very proud to be part of the PUMA Racing Team and to take the lead in this new and exciting venture with them,” says Ken Read. “I believe PUMA is the type of company that the sailing world needs, which can think outside the box and deliver this sport to an entirely new group of consumers. It’s going to be an incredible journey for all of us.”

The entry into competitive sailing extends PUMA’s focus into premium lifestyle sports – a category PUMA has forged through its Formula 1 partnerships, motor sports collaborations such as Ducati, and the launch of a Sportlifestyle golf collection in 2006. Through this latest venture, PUMA continues its growth plan by entering yet another premium category. It is expected to launch the first collection in mid 2008. However, PUMA’s engagement will require initial investments already beginning with Q2 2007. Further details of the Volvo Ocean Race program will be provided at a later stage.

The legendary around-the-world yacht race blends state-of-the-art design and technology, elite sporting performance and extreme adventure into one global event. The Volvo Ocean Race began in 1973 as the “Whitbread Round the World Race”. It is a high-endurance, physically-challenging race in the world’s fastest monohull, where men and women compete at the top of their game, sailing continent to continent, in an easterly direction around the globe. The race takes approximately nine months to complete, covers 39,000 nautical miles in challenging and often dangerous waters, and is broken into 11 separate legs. The Volvo Ocean Race 2008-09 challenge will have at least 12 ports of call, including ports in Middle East, India and Asia – places never before visited in race history.

The agreement further consolidates PUMA’s strong brand identity with the excitement and passion of African football. Adding another African national team to the long list of PUMA-sponsored teams Ivory Coast, Ghana, Cameroon, Egypt, Tunisia, Senegal, Togo, Morocco, Mozambique, Angola and Botswana, puts PUMA squarely at the forefront of African football for the 2008 African Cup of Nations and the build-up to the 2010 World CupTM.

The Namibian Football Association was founded in 1990 and affiliated to FIFA and CAF in 1992.

Jochen Zeitz, CEO of PUMA AG: “PUMA Korea will ensure to maximize the PUMA brand potential on the South Korean market with the aim to become the most desirable sportlifestyle company worldwide.”

With the new subsidiary PUMA accelerates its regional expansion in the Phase IV of the long-term company development plan. The South Korean market represents one of the largest markets for PUMA’s distribution in Asia. The aim of PUMA Korea is to fully explore the PUMA brand potential in the South Korean market in the coming years.

Jochen Zeitz, CEO and Chairman, PUMA AG: “The PUMA Board of Management is convinced that PPR, as one of the world’s top fashion and retail companies will be the perfect partner for PUMA, one of the world’s leading Sportlifestyle companies. Both companies have a European background and ideally complement each other with regard to their global perspective. With the support of PPR, we plan to strengthen our position as the leading company in the Sportlifestyle market with a continued focus on long-term sustainable growth.

The PUMA Board of Management unanimously believes that PPR’s engagement is in the best interests of the company and that the announced offer price per share of EUR 330 for the voluntary public take-over offer is fair. Based on a preliminary fairness opinion issued by Lehman Brothers and subject to review of the offer document, the Board of Management will recommend the offer to the PUMA Shareholders.

Last year PUMA strengthened its external design portfolio through a partnership with Alexander McQueen, which included a jointly-launched Footwear collection. Along with other top designers, McQueen is also part of the PPR Group. Going forward PUMA can utilize PPR’s premium segment design and sourcing expertise, contributing to the further improvement of PUMA’s product offering. Additionally, PPR’s experience in worldwide retail, wholesale and multi-brand management will provide valuable support to PUMA’s brand expansion plans.

In a “Letter of Intent“ to the PUMA Board of Management, PPR has emphasized its strong interest in PUMA and assures its solid confidence in the company as well as its full support regarding the implementation of the Phase IV goals of PUMA’s long-term development plan.

Francois-Henri Pinault, CEO and Chairman of PPR: “PUMA is one of the leading Sportlifestyle companies in the world. The successful expansion strategy as well as the long-term growth potential of PUMA complement the PPR portfolio perfectly. We guarantee PUMA’s continuity as an autonomous company within the PPR Group and we will support the management with our resources and our know-how in strengthening PUMA’s unique brand positioning.

In the context of the planned transaction there will be no changes with regard to staffing. The PPR Group acknowledges and fully supports that the current board, management and employees of PUMA will continue to work on the successful implementation of the company’s strategy. The employees of PUMA have contributed importantly – with their passion, their creativity and their continuous innovation – to the success of PUMA. The “Letter of Intent” of PPR furthermore states that these corporate values will be ensured in the future. Additionally, all PUMA locations including headquarter locations in Herzogenaurach, Hong Kong and Boston will retain their full independence.

“This is a special day as we introduce our PUMA Racing Team and unveil the colors of our boat in this wonderful setting of Boston Harbor,” said Jochen Zeitz, CEO and Chairman, PUMA AG. “We are extremely pleased that the City of Boston, the State of Massachusetts and Save the Harbor are welcoming the Volvo Ocean Race as an official port of call and, as a company, we are proud to be able to call Boston the home of our North American and international brand headquarters for more than a decade.”

PUMA has offices in Boston’s Marine Industrial Park, where the Global Marketing headquarters are located, and Westford, Massachusetts, where PUMA North America is based. PUMA officials worked closely with the local government to help bring the Volvo Ocean Race to Boston.

Said Mayor Thomas M. Menino, City of Boston: “We are delighted that Boston has been selected as the only North American stopover for the 2008-2009 Volvo Ocean Race. World Class events like this, with great partners like PUMA, Volvo and Save the Harbor/Save the Bay give folks from our neighborhoods and visitors from across the region and around the world another reason to rediscover all that Boston Harbor and waterfront have to offer.”

“Today, Massachusetts is all about innovation and opportunity. Governor Patrick and I are proud to have our capital city selected as the only North American port of call for the Volvo Ocean Race, we are proud to have innovative companies like PUMA headquartered here in the state, and we are particularly proud of Boston Harbor and Massachusetts Bay,” said Secretary Daniel O’Connell, Dept. of Housing & Economic Development, Commonwealth of Massachusetts.

“The choice of Boston as a North American stopover for the 2008-09 Volvo Ocean Race is a welcome addition to the ground-breaking route. Boston has a proud association with international sailing and sailors. There has been great enthusiasm from everyone involved in making the Boston stopover happen. I fully expect that Boston will put on a tremendous show when the race comes to town,” said Glenn Bourke, CEO, Volvo Ocean Race.

“It’s a major fillip for the Volvo Ocean Race and the sport of sailing to have involvement from an iconic global consumer brand such as PUMA. There is definitely synergy between us – the Volvo Ocean Race leads the way on advanced design with the Volvo Open 70, while PUMA brings great energy and creativity to the design of their sports lifestyle products.”

Said Patricia A. Foley, President, Save the Harbor/Save the Bay: “With billions of public dollars invested in the Boston Harbor Clean-up and the Big Dig, and billions more invested in new waterfront development, we are looking forward to the fantastic opportunity that this stopover will provide to share the harbor with Bostonians, regional residents and visitors from around the world.”

PUMA announced its entry into the Volvo Ocean Race in late March with skipper Ken Read placed at the helm of the PUMA Racing Team. Read was on-hand for the unveiling on Friday, bringing the boat up from its training base in Newport, Rhode Island, after it made the trip across the Atlantic.

The exterior design of the training boat is uniquely PUMA. Conceptualized by Puma’s brand head, Antonio Bertone, with the help of ad agency GBH, the idea was to transform the boat into an object. In this particular case, the object is a shoe, taking inspiration from PUMA’s heritage.

“We wanted to have some fun with the design — basically have a floating shoe out on the water,” says Antonio Bertone, Group Functional Head Brand & Marketing. “So we had the boat painted to look like it’s made from leather and then stitched together. The boat and the Volvo Ocean Race on the whole is just a great platform for PUMA to express its creativity and design-forward thinking.”

The Volvo Ocean Race is a legendary around-the-world yacht race that blends state-of-the-art design and technology, elite sporting performance and extreme adventure into one global event. The Volvo Ocean Race began in 1973 as the “Whitbread Round the World Race”. The race takes approximately nine months to complete, covers 39,000 nautical miles in challenging and often dangerous waters, and is broken into 11 separate legs. The Volvo Ocean Race 2008-09 challenge will have at least 12 ports of call, including ports in Middle East, India and Asia – places never before visited in race history.

Consolidated sales up 7% currency neutral or 2% in Euro currency

Highlights Q1

• Consolidated sales up 7% currency neutral or 2% in Euro currency
• Gross profit margin at 52%
• BIT up 2% to € 135 million, representing 21% on sales
• EPS at € 6.02 compared to € 5.83

Outlook 2007

• Orders up currency neutral 1.4% to nearly € 1.1 billion
• Management now expects sales and earnings growth in the low single-digits

Sales and Earnings Development

Global branded sales up 9%

PUMA’s worldwide branded sales, which include consolidated and license sales, rose currency neutral 8.9% (3.5% in Euro terms) to € 762.1 million. Footwear sales improved by 9.7% to € 441.4 million, Apparel by 6.1% to € 253.3 million and Accessories by 14.8% to € 67.4 million.

Licensed business increased 15%

The licensed business increased by 15.2% currency neutral (13.3% in Euro terms) to € 106.3 million. The company realized a royalty and commission income of € 9.7 million in the first quarter versus € 8.5 million in the prior year, an increase of 14.0%.

Consolidated sales up 7%

In Q1, consolidated sales grew 7.4% currency neutral (2.0% in Euro terms) to € 655.8 million. Sales in Footwear were up 9.0% to € 413.5 million, Apparel by 4.8% to € 200.7 million and Accessories by 4.7% to € 41.7 million.

Gross profit at 52%

In Q1, gross profit margin reached 52.2% compared to 52.4% last year. The Footwear margin was slightly up from 52.0% to 52.1% and Accessories increased from 53.4% to 54.9%. Apparel reported 51.9% compared to 52.9% last year.

SG&A ratio below last year

In total, SG&A rose 1.0% to € 207.3 million in Q1 2007. As a percentage of sales, the cost ratio decreased slightly from 31.9% to 31.6%. Marketing/Retail expenses were down by 0.8% to € 99.8 million, representing a cost ratio of 15.2% compared to 15.6% in the previous year. Product development and design expenses increased by 3.0% to € 13.1 million and were flat at 2% of sales. Other selling, general and administrative expenses increased 2.7% to € 94.4 million, or slightly from 14.3% to 14.4% of sales.

EBIT margin stable

EBIT increased by 2.0% to € 134.8 million versus € 132.2 million last year. As a percentage of sales this relates to a stable EBIT margin of 20.6%.
Due to an increase in the financial results, pre-tax profit grew by 2.3% to € 137.2 million. The tax ratio was 29.1% versus 29.5% in last year’s quarter.

Earnings per share 3.3% above last year

In Q1, net earnings grew by 3.7%. In absolute amounts, net earnings accounted for € 96.6 million versus € 93.1 million last year. The net return amounts to 14.7% versus 14.5%. Earnings per share reached € 6.02, a 3.3% increase from last year’s € 5.83. Diluted earnings per share were calculated at € 6.01 compared with € 5.78.

Net Assets and Financial Position

Equity ratio at 61%

As of March 31, 2007, total assets climbed by 15.8% to € 1,797.7 million and the equity ratio reached 60.9% after 61.4% in the previous year.

WORKING CAPITAL

Inventories grew 21.4% to € 344.1 million, mainly due to the retail expansion and early deliveries from the Asian production. Receivables were up 9.1%, reaching € 519.2 million. Total working capital at the end of March totaled € 496.1 million compared to € 440.3 million last year.

CAPEX/CASHFLOW

For Capex, the company spent € 16.4 million in Q1 versus € 59.3 million in last year’s quarter, whereas € 1.6 million versus € 41.8 million were related to acquisitions. Free cashflow amounts to € -9.8 million compared to € -135.2 million last year or € -8.2 million versus € -93.4 million excluding acquisition costs.

Cash position

Total cash end of March stood at € 402.4 versus € 354.1 million last year. Bank debts were down from € 68.1 million to € 63.5 million. As a result, the net cash position improved from € 286.0 million to € 338.9 million year over year, but declined since end of December 2006, mainly due to further share buybacks.

Share Buyback/New Subscribed Capital

During Q1, PUMA purchased another 150,000 of its own shares. At quarter-end, 1,270,000 shares were held as treasury stock in the balance sheet, accounting for 7.4% of total share capital.
Effective April 10, 2007 all own shares were cancelled and share capital was reduced accordingly. Including the option rights (Management-Incentive-Program) exercised in April 2007, subscribed capital consists of 16,007,364 shares or € 40,978,851.84 as of today.

Regional Development

Sales in the EMEA-region increased currency adjusted 8.0% reaching € 360.9 million versus € 339.3 million last year, representing 55.0% of consolidated sales compared to 52.8%. Gross profit margin reached 53.7% compared to 55.2% last year. Orders in the EMEA-region were slightly up 0.8% currency adjusted which represents a decline in Euro terms of -0.8% to € 595.3 million.

Sales in the Americas were up currency neutral 4.5% to € 174.3 million. The region now accounts for 26.6% compared to 28.3%. Gross profit margin increased from 47.5% to 49.7%. The order volume decreased 8.6% currency adjusted to € 260.6 million.
Despite the announced consolidation in the US market, sales were only slightly down to $ 156.2 million in Q1. However, orders for US end-of-quarter declined 17.6%, which is mainly due to a business related adjustment with one key account that had seen a significant sales increase in the prior years, as well as a generally moderating environment in the US mall business.

The Asia/Pacific region showed a currency neutral sales increase of 8.6% to € 120.6 million with a strong double-digit increase in China. The total region accounts for 18.4% of sales versus 18.9% last year. The gross profit margin was down from 51.9% to 51.4%. End of March orders on hand were up currency adjusted by 20.0% totaling € 206.9 million.

Outlook 2007

Future orders up 1.4% to nearly € 1.1 billion
Consolidated orders were up currency adjusted by 1.4% to € 1,062.8 million. In terms of product segments, Footwear decreased by 4.5% to € 654.5 million, while Apparel was up 15.4% to € 343.2 million and Accessories 0.1% to € 65.1 million.

Management expects sales and earnings growth in the lower single-digits
Due to the order situation end of Q1, Management now expects for FY2007 sales and earnings growth in the low single-digits. Gross profit margin should range between 50%-51%. Due to already announced and expected investments in relation to the Volvo Ocean Race participation as well as other planned SG&A initiatives, total cost ratio is expected to be around or above 35% of sales. EBIT should therefore develop in line with sales while the tax rate should come in at last year’s level.

Jochen Zeitz, CEO: “We’re pleased to have started Q1 with continued growth despite difficult year-on-year comps. While the remainder of the off-year in terms of major sports events will certainly be challenging given our current order book, we continue to be fully focused on our long-term objectives.”

The Managing Board and the Supervisory Board have based their decision to support the Offer and to recommend to the PUMA Shareholders to accept the Offer on several considerations, including without limitation the following:

• The Managing Board and the Supervisory Board consider the Offer Price of EUR 330,00 per PUMA Share offered by the Bidder to be fair within the meaning of Section 31 para. 1 of the Takeover Act. The Offer Price exceeds the historical market prices of the PUMA Share; furthermore, the fairness of the Offer Price from a financial point of view is supported by the two Fairness Opinions provided by the investment banks Lehman Brothers and UBS. Potential synergies resulting from the future co-operation between PPR and PUMA have not been taken into consideration, it being understood that it is not intended to achieve synergies by way of shutdowns of business locations or reduction of staff.
• By combining the businesses of PUMA AG and PPR Group the market position of PUMA AG as the leading enterprise in the sportlifestyle sector is strengthened in the long term and a platform for the further worldwide development of the Company and the implementation of its business strategy is created. Through the combination with PPR, the PUMA Group does not only secure the support of a financially solid international group, but also profits from the global orientation of PPR Group, its comprehensive portfolio in the premium brand segment and PPR’s know-how and its numerous resources in the areas of international products, sales, multi-brand management, design and procurement. The Managing Board and the Supervisory Board are of the opinion that both groups complement each other very well with respect to their orientation and strategy and that PPR Group, being one of the internationally leading groups in fashion and trade, is an ideal partner for PUMA AG. Therefore, the Managing Board and the Supervisory Board are of the opinion that the completion of the Offer is in the best interest of PUMA AG and the PUMA Group.
• The Bidder has declared that PPR does not plan any staff reduction at PUMA AG as a consequence of its acquisition of control over the Company and that PPR does not intend to endeavour to procure any material changes to the terms and conditions of employment of PUMA AG and the current employee representation and employee structure at PUMA AG.

Melody Harris-Jensbach graduated at the Parson School of Design in New York and has considerable experience in the fashion industry, especially in the area design and product management, as well as managing global premium- and lifestyle brands such as Viventi by Bernd Berger, Laurel by Escada and Esprit Women’s Wear.

From 1998 to 2003 she held the position as Design Director Women’s Wear and has been member of the Senior Management of Esprit since then. In 2003 she took on the responsibility as International Product Director Women. She was responsible for the successful implementation of the market needs of all Woman’s segments in international key markets. In 2005 she also took over the Woman’s Casual Division, the Core Business of Esprit, which she manages up to today.

Melody Harris-Jensbach is American, married and has lived in Germany for more than 22 years. Based on her international work experience and her comprehensive know-how in the lifestyle and fashion industry, not only does she have the required qualification and expertise for taking over the position of Martin Gaensler in the PUMA Board, but she will also contribute to the further long-term development of PUMA.

Over his 25 year career with PUMA, Martin Gaensler has been serving as a Member of the Board since 1993 and since 1998 as Vice Chairman, overseeing Research, Development and Design as well as Sourcing. Based on his future personal plans he will retire from the business this year.

Jochen Zeitz, CEO and Chairman of PUMA AG: “With the appointment of Melody Harris-Jensbach we are delighted to not only have an excellent manager on board but also for the first time a female member joining the PUMA Board of Management. With her comprehensive experience and know-how in managing brands from the lifestyle and premium segment she will further strengthen the PUMA team and also contribute in supporting PUMA’s company strategy to become one of the most desirable Sportlifestyle companies.”

Martin Gaensler, Vice Chairman of the PUMA Board: “With the appointment of Melody as Member of the PUMA Board of Management, PUMA emphasizes and strengthens the global positioning of the company especially with regards to the future emerging markets and strategies. I am convinced that Melody will lead the PUMA Creative Team exceptionally well and also introduce important new elements for the future success. I could not wish for a better successor for my position.”

Melody Harris-Jensbach, future member of the PUMA Board: “It is an honor to become a part of such a dynamic corporation and I am looking forward to my new position. I can assure that the PUMA product philosophy and strategy will be continued with the same ‘heart and soul’ that makes this brand so desirable. I am proud to contribute my experience and talents that will support the success and continued global growth of PUMA.”

The change is based on the resolutions of PUMA AG’s shareholders’ meeting of 11 April 2007. The shareholders’ meeting had appointed Lindenberg, Stahl and Herz with the proviso that their appointment should end upon the expiry of the day on which the clearance of the business combination of PPR S.A. and PUMA AG pursuant to the EU Merger Control Regulation had been announced by the European Commission. At the same time, François-Henri Pinault, chairman of the administrative board of PPR S.A., Jean-François Palus, Chief Financial Officer of PPR S.A. and Grégoire Amigues, director for strategy and business development of PPR S.A. had been appointed with effect as from the beginning of the day following the day on which the EU merger clearance has been announced.

The term of office of these three shareholder representatives in the supervisory board will expire by the end of the shareholders’ meeting resolving on the discharge for the financial year 2011.