Herzogenaurach, Germany, July 29, 2010
PUMA AG ANNOUNCES ITS CONSOLIDATED FINANCIAL RESULTS FOR THE SECOND QUARTER AND FIRST HALF OF 2010

Highlights Second Quarter:

  • Consolidated sales up by 2.5%
  • Gross profit margin improved to a strong 50.3%
  • Overall cost structure continues to improve
  • Operating result at € 64.1 million, up 1.7%
  • EPS rise 16.4% from € 2.55 to € 2.97
  • Integration of Cobra Golf according to schedule
  • Share-buyback program initiated

Highlights January-June:

  • Consolidated sales post a slight increase of 0.1%
  • Gross profit margin up versus last year at 51.3%
  • Strong improvement in cost structure as a result of the cost reduction program
  • Operating result before special items improved to € 183.2 million , up 3.4% versus last year
  • EBT increase by 185,5% to 181 million with EPS jumping to € 8.48 from € 2.92 last year
  • Working Capital and Cash position continue to improve

Outlook 2010:

  • Management confirms expected sales growth in the low to mid single-digits due to a strong improvement in the overall outlook
  • EBIT before special items is expected to increase compared to last year
  • Phase 4 Revisited (2011-2015): New refined strategy to unfold PUMA’s long-term potential will be presented with Q3 results

Jochen Zeitz, CEO: “PUMA performed according to plan in the second quarter and we are gearing up for solid growth in the second half of the year based on a strong outlook. Given an overall improvement of the global economies as well as our decisive measures taken in the past 18 months to adjust our organization and processes to the new market realities, we feel ready to re-engage with our long-term expansion plan as of next year. “Phase IV revisited 2011-2015” shall enable us to significantly tap into PUMA’s long-term sales potential of 4 billion Euros and beyond.”


Sales and Earnings Development

Global Brand Sales

PUMA’s brand sales in the second quarter – comprised of consolidated and license sales – increased by 1.3% in Euro terms.


Consolidated Sales

Consolidated sales in the second quarter increased by 2.5% in Euro terms to € 615.4 million. Currency neutral, consolidated sales softened by 4.8% on high comparables after closeout sales and a high inventory availability last year. Deliveries in June were impacted by late product deliveries and there were no pre-shipments unlike last year. On a currency-neutral basis, Footwear sales were down by 9.7% at € 321.2 million and Apparel sales fell by 5.3% to € 208.6 million. Due to first time consolidations, Accessories sales improved significantly by 20.6% to € 85.6 million.

After the first six months, consolidated sales were down by 3.7% currency-neutral but increased by 0.1% in reported terms to € 1,298.5 million. Sales in EMEA and Asia/Pacific were below last year’s levels. Sales in the Americas region, however, increased 12.7% currency-neutral despite of the overall challenging market environment after both sub regions – North America and Latin America – sustained their positive performances from the first quarter. Footwear sales declined currency-neutral by 7.2% to € 700.1 million. Apparel sales decreased by 2.0% to € 435.4 million. Accessories sales, however, advanced by 8.9% to € 163.1 million.

Gross Profit Margin

In the second quarter, the gross profit margin improved by 30 basis points from 50.0% last year to 50.3%. This increase mainly results from a lower share of closeout sales that more than offset negative impacts from currency hedging, the regional mix and higher raw material costs. After the first six months, PUMA’s gross profit margin reached 51.3% after 51.1% last year. Footwear reported 50.6% compared to 49.7% and Apparel 52.7% versus 52.3%. Accessories declined to 50.7% from 54.9% last year, which is mainly due to the increase in the scope of consolidation with the inclusion of Cobra Golf.

Operating Expenses

Operating expenses increased by 3.4% to € 250.5 million in the second quarter due to the inclusion of the Cobra Golf business into the consolidation as well as currency effects. Omitting these two factors, OPEX would be below last year. In the first six months operating expenses declined by 0.7% to € 492.8 million, which translates into a cost ratio of 37.9% after 38.2%.

EBIT

The operating result came in at € 64.1 million in the quarter after € 63.1 million last year. As a percentage of sales, the EBIT ratio dropped slightly to 10.4% from 10.5%. Adjusted by costs stemming from the Cobra integration, the EBIT margin would have improved compared to last year.

After six months, the operating result before special items increased by 3.4% to € 183.2 million from € 177.1 million, which translates into an operating margin of 14.1% versus 13.6% last year.

Financial Result/Income from associated companies

Due to lower interest rates and lower accumulation of interest on purchase price liabilities from acquisitions, the financial result in the second quarter was at € -1.5 million versus € -2.1 million last year. After six months, the financial result stood at € -2.7 million compared to € -3.7 million last year. An income of € 0.4 million was generated from associated companies in the quarter.

Net Earnings

The company’s pre-tax profit (EBT) was € 63.1 million in the second quarter versus € 61.0 million last year. Net earnings totaled € 44.8 million versus € 38.5 million, representing an increase of 16.4%. This translates into earnings per share of € 2.97 compared to € 2.55 last year.

In the first half, EBT rose significantly to € 180.9 million from € 63.4 million last year. As a result, net earnings improved by 190.4% to € 127.9 million from € 44.0 million. Earnings per share were at € 8.48 compared to € 2.92. The operational tax ratio was calculated at 29.3% versus last year’s 26.5%.

Net Assets and Financial Position

Equity

As of June 30, 2010, total assets were up by 16.1% to € 2,377.6 million. The equity ratio improved from 56.6% in last year to 61.7% in spite of a higher balance sheet total.

Working Capital

Net inventory increased by 5.7% to € 456.8 million but decreased 5.7% on a currency-adjusted basis. Accounts receivable increased by 8.1% from € 502.8 million to € 543.4 million, which compares to a currency-adjusted decrease of 0.7%. Working capital improved to € 521.7 million from € 540.6 million last year – showing again a significant improvement compared to previous quarters and thus underpinning our strong focus on managing working capital.

Capex/Cashflow

In the first six months, the company invested € 23.3 million versus € 27.4 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 before acquisitions of € 77.3 million from € 45.1 million last year. An outflow of € 101.9 million versus € 61.0 million last year related to acquisitions.

Cash Position

Given the strong focus on cash management, total cash at the end of June rose by 49.8% from € 302.7 million to € 453.4 million and bank debts declined by 28.8% from € 44.8 million to € 31.9 million this year. As a result, net cash was up from € 257.9 million to € 421.5 million this year, representing a remarkable increase of 63.4%.

Share Repurchase

PUMA AG started its share buyback program and purchased 55,892 of its own shares during the second quarter, which equals 0.4% of the share capital and reflects an investment of € 12.9 million.

Other Events

Spain Arbitration Ruling

According to an arbitration ruling the former Spanish license holder Estudio 2000 S.A., which owned several PUMA trademark rights, has been obliged to vest these to PUMA AG. Through the vesting of all of the word, image and combined PUMA trademark rights in Spain, PUMA AG would ultimately own all trademark rights and take over the operational business in Spain, hence ensuring a consistent brand management strategy. According to the arbitration ruling, the vesting of the trademark rights is subject to a one-time payment of up to 98 million Euros to Estudio 2000 S.A. However, after a thorough legal assessment, PUMA AG will challenge the ruling and believes that a favourable outcome is more likely than not. PUMA now confirms that a cancellation recourse will be filed within the next days. This potential is classified as a contingent liability which has not been recognized as a liability in the financial statements.

PHASE IV Revisited (2011-2015) – New refined strategy to unfold PUMA’s long-term potential

PUMA’s initial Phase IV expansion plan was slowed down by the global economic crisis that curbed PUMA’s sales progress. With an improved outlook of the global economy, which should lead to a reasonable market recovery, PUMA’s management is revisiting its long term development plan, leading to a refined strategy, aligned with today’s market realities, to unfold PUMA’s long-term potential. The strategy and impact of “Phase IV Revisited 2011-2015” will be laid out in detail – together with the release of PUMA’s third quarter results – on October 26th at the Brand Center of PUMAVision Headquarters in Herzogenaurach, Germany.

Outlook 2010

Given a strong outlook in sales for the second half, we continue to expect sales growth in the low to mid single digits for the full year 2010. Gross profit margins should remain unchanged to last year’s level. EBIT before special items is expected to 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.

Photo Credits: Robert Ashcroft/ PUMA
Herzogenaurach, Germany, August 24, 2010
USAIN BOLT RENEWS SPONSORSHIP CONTRACT WITH PUMA

Jamaican to Play Lead Role in Sportlifestyle Brand’s Global Marketing Activity

Jamaican sprint superhero, world record holder and Olympic gold medalist Usain Bolt announced today he has renewed his contract with global sportlifestyle brand and long-term sponsor PUMA until the end of 2013. While the specific terms of the contract are undisclosed, the figure is by far the largest ever given to a Track & Field athlete, positioning Bolt as a top earner in the world of sport, a further acknowledgement of his astonishing achievements over the past two years.

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

Herzogenaurach, Germany, October 18, 2010
PUMA AG TO CONVERT INTO EUROPEAN CORPORATION PUMA SE

PUMA CEO Jochen Zeitz to become executive chairman of PUMA SE board and to head sport & lifestyle division of PPR in addition to a new sustainability role

Sportlifestyle company PUMA AG intends to be transformed into a European Corporation, trading under the name of PUMA SE (SE = Societas Europaea). The transformation is subject to approval at PUMA’s 2011 Annual General Meeting in April. PUMA CEO Jochen Zeitz is designated to become Executive Chairman of the one-tier PUMA SE Board ensuring a continuous strategic management of the company’s next phase of its corporate development. Jochen Zeitz will remain CEO of PUMA until a new CEO has been appointed. He will coordinate the search in close cooperation with PUMA’s Personnel Committee. François-Henri Pinault, Chairman and CEO of PPR, also appointed Jochen Zeitz Head of PPR’s new Sport & Lifestyle Division. PPR is PUMA’s majority shareholder with some 71% of voting rights as of September, 30, 2010.

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.”

Photo Credits: Robert Ashcroft/ PUMA
Herzogenaurach, Germany, October 18, 2010
PUMA AG TO CONVERT INTO A SOCIETAS EUROPAEA (SE) / JOCHEN ZEITZ TO BECOME EXECUTIVE CHAIRMAN OF PUMA SE BOARD

The Sportlifestyle brand PUMA will become a core brand of PPR’s new Sport & Lifestyle Division. In the framework of the next phase of its corporate development, PUMA AG intends to adopt a new legal form by transforming into a European Corpo­ration, PUMA SE. As part of the transformation, PUMA intends to convert its current two-tier board structure with a management board and a supervisory board to the internationally com­mon structure of a one-tier Board. Additionally, managing directors will be responsible for the general management of PUMA SE.

The annual general meeting of Puma AG will be asked to vote on the change of corporate form in April 2011.

Upon the conversion into an SE, Jochen Zeitz will become Executive Chairman of the PUMA SE Board. In the meantime, while all necessary preparations will be taken, Mr. Zeitz will remain in his current role until a new CEO of PUMA has been appointed. Thereupon Jochen Zeitz will as­sume the new position as head of PPR’S new Sport & Lifestyle Division.

Photo Credits: Robert Ashcroft/ PUMA

Herzogenaurach, Germany, October 25, 2010
IRREGULARITIES COMMITTED BY GREEK JOINT VENTURE PARTNER TO AFFECT PUMA AG’S CONSOLIDATED FINANCIAL STATEMENTS

AD HOC RELEASE PURSUANT TO § 15 WpHG

PUMA AG Rudolf Dassler Sport (ISIN: DE00069696303 WKN: 696960)

PUMA WAY 1, D-91074 Herzogenaurach

PUMA AG’s Management Board announces that irregularities, discovered at its Joint Venture ‘PUMA Hellas S.A.’ in Greece, will affect PUMA’s consolidated financial statements.

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.

Photo Credits: Robert Ashcroft/ PUMA
Herzogenaurach, Germany, October 26, 2010
PUMA AG ANNOUNCES ITS CONSOLIDATED FINANCIAL RESULTS FOR THE THIRD QUARTER AND FIRST NINE MONTHS OF 2010

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.

Photo Credits: Robert Ashcroft/ PUMA
Herzogenaurach, Germany, October 27, 2010
PUMA TAKES OVER FULL CONTROL OF BUSINESS IN CHINA

The Sportlifestyle company PUMA will acquire 100% 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 Hong Kong and Mainland 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 large potential that the biggest 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 company strategy.

“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.

Herzogenaurach, Germany, November 27, 2010
PUMA RECEIVES GERMAN SUSTAINABILITY AWARD FOR AMBITIOUS SUSTAINABILITY STRATEGY

Sportlifestyle company PUMA today received the German Sustainability Award 2010 in the category “Most Sustainable Strategy”. The jury rewarded PUMA’s ambitious strategy that envisages the transition of the company’s product portfolio to sustainable products. PUMA’s sustainability concept PUMAVision combined the sustainable business process with creativity and innovation, said the jury headed by Dr. Günther Bachmann, Secretary General of the Council for Sustainable Development.

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.

Herzogenaurach, Germany, December 01, 2010
PUMA EXTENDS LONG-TERM PARTNERSHIP WITH CAMEROON FOOTBALL FEDERATION

PUMA and the Cameroon Football Federation (FECAFOOT) announced today in Yaounde, Cameroon, a long-term extension of its current partnership, through which the sportlifestyle company will continue to be the official supplier of team kits, training apparel/apparatus and a partner for replica merchandise. This latest agreement is effective through the next FIFA World Cups™.

The relationship between PUMA and the Cameroon Football Federation was first formed in 1996. In the years that followed, PUMA developed for Cameroon the first sleeveless kit for a football team, the first all-in-one kit and the first continental kit called the PUMA Africa Unity Kit which launched in 2010. This latest football innovation raised money for biodiversity causes in Africa in collaboration with the United Nations Environmental Programme (UNEP), with Cameroon using the kit as a third kit at the 2010 World Cup™ in South Africa with Ghana, Ivory Coast and Algeria.

“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.

Photo Credits: Robert Ashcroft/ PUMA
Monaco, December 02, 2010
PUMA RECEIVES PEACE AND SPORT AWARD

PUMA Amongst Best Initiatives to Foster Peace through Sport named at Peace and Sport Awards Ceremony 2010 in Monaco

On December 1, 2010, PUMA received the Award for the Best Corporate Social Responsibility (CSR) Initiative at the prestigious Peace and Sport Awards 2010 for its PUMA. Peace program and multilayered campaigns to support global peace. The awards ceremony was part of the 4th annual Peace and Sport International Forum in Monaco. HSH Prince Albert II of Monaco and Joel Bouzou, President and Founder of the organization, paid tribute to achievements that best embody the role of sport to promote dialogue and build bridges between divided communities. Six awards were given to recognize people and initiatives in sport, which made key contributions to social stability in the world during the previous year, at a gala event on December 1 for over 500 distinguished guests from the world of politics, sports, the private sector and civil society.

“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.

Herzogenaurach, Germany, December 18, 2010
PUMA BECOMES INDUSTRY LEADER IN DOW JONES SUSTAINABILITY INDEX

The Sportlifestyle company PUMA AG has been rated the sustainability leader within its sector in the Dow Jones Sustainability Index (DJSI), one of the most recognized indexes for sustainable investment worldwide. Having been a component of the Dow Jones World Index and the Dow Jones Europe Index since 2006, PUMA was ranked the leading company with regards to its sustainability program in the DJSI Tex Clothing Accessories and Footwear sector for the first time in 2010.

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.

Photo Credits: Conné/ PUMA
Herzogenaurach, Germany, February 15, 2011
PUMA AG ANNOUNCES ITS CONSOLIDATED FINANCIAL RESULTS FOR THE FOURTH QUARTER AND FINANCIAL YEAR 2010

Highlights Fourth Quarter 2010

  • Consolidated sales increased by 28.2% to € 623 million, posting record sales
  • Gross profit margin softened to 45.4% due to shift in regional mix, hedging, and sourcing prices
  • Operating result before special items increased by 2.6% to € 41.1 million
  • EPS improved to € 0.93
  • PUMA’s “Back on the Attack” plan presented in October outlined the company’s future growth strategy

Highlights January – December 2010

  • Consolidated sales increased by 10.6% in Euro terms to more than € 2.7 billion for the first time
  • Gross profit margin stood strong at 49.7%
  • Operating result before special items improved by 12.7% to € 337.8 million
  • EBT more than doubled to € 301.5 million
  • Net earnings improved by 154.0% to € 202.2 million
  • EPS increased significantly to € 13.45 from € 5.28 last year
  • Balance sheet ratios and cash position remained strong

Outlook 2011

  • Despite a lack of major sporting events in 2011, Management expects sales to increase by mid to high single-digits for the full year.
  • Due to investments in marketing, product and process optimization that are part of our “Back on the attack” strategy, management expects the OPEX ratio to increase.
  • Net Earnings expected to improve by mid single-digits assuming a modest increase in sourcing costs related to raw materials and wages.

Jochen Zeitz, CEO: “We finished the year with record sales in a strong quarter, contributing to an overall solid sales and operational performance in 2010, which clearly demonstrates the strength of our brand and company in an improving consumer environment. I am pleased to see that our sales outlook also continues to look positive and that PUMA’s organic growth is more than intact. We are well positioned to tap into PUMA’s full brand potential with our strategic five-year company growth plan. Our focus will now be to develop and grow our existing core product categories as well as PUMA’s key strategic markets, and to invest in marketing and R&D while continuing to boost our sales globally.”

The Year 2010

PUMA is back on the attack! In the past financial year 2010, PUMA posted a new record in sales and managed to increase profitability accordingly. Hence, PUMA has successfully overcome the economic crisis and has laid the foundation to achieve the growth targets defined for the coming years.

The football World Cup on the African continent, where PUMA sponsored seven of the participating teams, of which four were African teams, proved to be a particular highlight for the PUMA brand in 2010. Furthermore, the Company celebrated the extension of the sponsoring agreement with Usain Bolt, and also witnessed Sebastian Vettel being crowned as the youngest world champion in the history of Formula One. Sebastian Vettel belongs to the Red Bull racing team, which was sponsored by PUMA. In addition to these sporting highlights, PUMA set new standards in 2010 through the introduction of a revolutionary new packing system, “Clever Little Bag” which was part of a comprehensive sustainability drive that was introduced to the public with the mission of PUMA to be the most desirable and sustainable Sportlifestyle company.

In the full year 2010, global brand sales increased by 3.1% currency-adjusted, while consolidated sales rose by 3.6% currency-adjusted. In Euro terms sales increased by 10.6% to more than € 2.7 billion successfully resuming the positive sales trend that was interrupted by the financial crisis in 2009. PUMA’s gross profit margin decreased slightly to 49.7%, maintaining its position in the upper echelons of the sporting goods industry. The cost reduction, reorganization and process optimization measures that had already been initiated by Management in the year before were continued in 2010. However, one-off expenses of € 31.0 million, which are related to the discovery of fraudulent activities at a joint venture in Greece, incurred in the reporting year, which also required a restatement of the comparative figures for December 31, 2009.

Including the above-mentioned special items, the operating profit (EBIT) more than doubled to 306.8 million from € 146.4 million last year, and earnings per share stood at € 13.45, compared to € 5.28 in the previous year.

PUMA’s expansion strategy was successfully continued in 2010 by means of acquisition of the “Cobra Golf” brand, completing our product range within the golf category with clubs. Within the scope of its sustainability strategy, PUMA acquired a 20.1% stake in Wilderness Holdings Ltd., a company dedicated to responsible eco-tourism and nature conservation.

PUMA’s share price was € 248.00 at the end of the year, posting an increase of 7.0% year-on-year, which resulted in market capitalization of approximately € 3.7 billion.

Sales and Earnings Development 4th Quarter 2010

In the fourth quarter 2010 consolidated sales increased by 16.1% currency-adjusted and 28.2% in Euro terms, reaching € 623.4 million and hence record sales in the company history.
All regions contributed positively to this performance. Currency adjusted sales in EMEA were up 8.8%, Americas sales increased significantly by 27.8% and Asia/Pacific improved by 13.1%.
Footwear sales increased by 15.7% currency-adjusted and Apparel by 16.9%. Sales in Accessories increased by 15.1%, while first time consolidation effects had only a minor impact on this category in Q4.
The gross profit margin decreased to 45.4%, down 500 basis points from last year’s fourth quarter. This decline is partially attributable to the change in the regional sales mix and traditionally higher close-out sales as well as an unfavourable hedging position and higher input costs.
Operating expenses increased disproportionately compared to the growth of sales by 17.6% to € 246.9 million. As a result, the cost ratio significantly improved from 43.2% to 39.6%.
The operating profit (before special items) increased by 2.6% from € 40.0 million to € 41.1 million. Including special items, the operating profit improved significantly from € 6.7 million to € 27.9 million or from 1.4% to 4.5% as a percentage of sales.
The earnings per share amount to € 0.93 in the quarter, after a loss in the prior year.

Sales and Earnings Development January-December 2010

Global Brand Sales

Worldwide brand sales comprised of consolidated and license sales increased by 3.1% to € 2,862.1 million in financial year 2010 after currency adjustments. In reported terms (Euro), brand sales were up 9.8% compared to last year.

Consolidated Sales

Consolidated sales increased currency-adjusted by 3.6% to € 2,706.4 million in financial year 2010. In Euro terms consolidated sales rose by 10.6% and exceeded the threshold of € 2.7 billion for the first time. PUMA’s sales performance has thereby returned to the long-term growth trend of 16 years that had been halted in 2009 by the financial crisis. The Footwear segment posted a sales increase of 1.1% currency-adjusted to € 1,424.8 million. This represented a share in consolidated sales of 52.6% compared to 54.0% in the previous year. Currency-adjusted sales in the Apparel segment rose by 3.8% to € 941.3 million. The share in consolidated sales increased to 34.8% from 34.6% last year. Currency-adjusted Accessories sales grew by 14.9% to € 340.3 million, which is mainly attributable to the expansion of the consolidated group as a result of the acquisition of Cobra Golf. As a consequence, the share of the Accessories segment in consolidated sales increased to 12.6% compared to 11.4% in the previous year.

Gross Profit Margin

The gross profit margin declined by 110 basis points to 49.7% and continues to be among the upper echelons of the sporting goods industry. The margin drop derives, in particular, from the change in the regional sales mix, a slight increase in sourcing costs and unfavourable hedging positions in 2010 compared with 2009. In absolute figures, however, the gross profit margin increased from € 1,243.1 million to € 1,344.8 million or 8.2%. In terms of product segments, the gross profit margin in Footwear was at 48.9% compared to 49.8% last year. The Apparel margin decreased from 51.3% to 50.6% and Accessories decreased from 54.1% to 50.6%, which stems from the impact of the newly acquired and integrated Cobra Golf business.

Operating Expenses

Operating expenses before special items rose – disproportionately to the growth of sales – by 6.4% to € 1,026.1 million in 2010. This increase derives from currency impacts and the extension of the scope of business after Cobra Golf and the new subsidiary PUMA Spain were included. As a percentage of sales, PUMA managed to reduce the cost ratio to 37.9% after 39.4% in the previous year. This is also a direct result from the cost reduction program of 2009.
Marketing and Retail expenses remained almost unchanged at € 501.3 million. However, the corresponding cost ratio dropped significantly from 20.5% to 18.5% of sales. Owing to the rise in sales revenues and expansion of the consolidated group, other selling expenses increased by 12.6% to € 348.8 million or from 12.7% to 12.9% as a percentage of sales. Expenses for product development and design increased from € 58.1 million to € 63.6 million or decreased from 2.4% to 2.3% as a percentage of sales. Other General & Administration expenses increased by 11.9% to € 147.9 million which derives from acquisitions and currency effects. As a result, the cost ratio increased slightly from 5.4% to 5.5% of sales. Furthermore, operating income amounted to € 35.5 million after € 35.7 million last year.
Depreciation was at € 55.2 million. Compared to the previous year, this corresponds to a decrease of 8.4%, underlining PUMA’s cautious investment policy.

EBIT before special items

Operating profit before special items increased by 12.7% to € 337.8 million compared to € 299.7 million last year. As a percentage of sales, this corresponds to an improved operating margin of 12.5% versus 12.2% in 2009.

EBIT

The uncovering of irregularities at our joint venture in Greece resulted in one-off expenses of
€ 31.0 million in financial year 2010. In addition the comparative figures in the consolidated financial statements as of December 31, 2009 had to be restated (cf. Section 3 in the Notes to the consolidated financial statements). As a result, the retained earnings as of December 31, 2009 decreased by € 106.5 million. Including the special items, the operating profit (EBIT) generated in 2010 more than doubled to € 306.8 million from € 146.4 in the previous year. This corresponds to an operating margin of 11.3% as a percentage of sales after 6.0% in 2009. After reviewing and correcting this incident, Management does not expect further one-off expenses related to this matter. PUMA has asserted all claims according to criminal law against the Greek Joint Venture minority partner and members of the local Greek management. Currently, there is no new information relating to this matter.

Financial Result

Following PUMA’s acquisition of a 20.1% stake in Wilderness Holdings Ltd., a company dedicated to responsible ecotourism and nature conservation, the financial statements for 2010 include a financial result (€ 1.8 million) from an associated company. The total financial result amounted to € -5.3 million, compared to € -8.0 million in the previous year.
The financial result includes interest income amounting to € 4.4 million after € 3.8 million last year, as well as interest expenses of € 5.9 million after € 6.6 million in 2009. Furthermore, expenses relating to interest in connection with accumulated, long-term purchase price liabilities from corporate acquisitions of € 4.3 million (previous year: € 4.1 million), as well as expenses of € 1.3 million (previous year: € 1.1 million) derived from the valuation of pensions plans.

Earnings before Taxes

Compared to the previous year, earnings before taxes (EBT) rose significantly from € 138.4 million to
€ 301.5 million or from 5.7% to 11.1% as a percentage of sales. This improvement results from the increase in sales, the cost reductions generated through the restructuring program and lower one-off expenses. Tax expenses increased from € 61.1 million to € 99.3 million. The tax rate in the 2010 financial statements was 32.9% after 44.1% in 2009. In both years, one-off expenses that could not be claimed as tax-deductibles led to the high tax ratio.

Net Earnings

Consolidated net earnings increased to € 202.2 million after € 79.6 million in 2009. The net rate of return improved significantly to 7.5% compared to 3.3% in the previous year. Earnings per share increased from € 5.28 to € 13.45 while diluted earnings per share rose from € 5.27 to € 13.37.

Regional Development

Sales in the EMEA region decreased by 2.5% currency-adjusted to € 1,221.7 million. However, in Euro terms, sales increased by 1.5% compared to last year. The share of the EMEA region in consolidated sales amounted to 45.1% compared to 49.2%. In terms of product segments, currency-adjusted Footwear sales decreased 9.1%. Apparel sales, however, increased 2.1% currency-adjusted while Accessories sales rose 9.9%. The gross profit margin stood at 50.6% compared to 52.2% last year.
The Americas region posted an increase in currency-adjusted sales by 20.0% to € 855.9 million. The Latin America region contributed significantly to this performance. This resulted in an increase in the share in consolidated sales from 27.2% to 31.6%. Footwear sales were up by 16.8% currency-adjusted and Apparel sales posted a strong 21.8% increase. Accessories sales rose by 53.5% which is mainly due to the acquisition of Cobra Golf. The gross profit margin amounted to 46.6% after 48.2% in 2009.
Sales in the Asia/Pacific region decreased slightly by 2.6% currency-adjusted to € 628.8 million. However, sales increased by 8.8% in reported terms. The share in consolidated sales remained stable at 23.2% after 23.6% in 2009. Footwear sales decreased by 6.1% currency-adjusted and Apparel sales by 1.9% while Accessories sales posted a 5.4% increase. The gross profit margin improved from 50.8% to 52.0%.

Net Assets and Financial Position

Equity

Total assets as of December 31, 2010, increased by 22.9% from € 1,925.0 million to € 2,366.6 million. This results from an increase in inventories and trade receivables – both partly currency-related – and an expansion of the consolidated group. Owing to a significant rise in total assets, the equity ratio declined slightly from 58.9% to 58.6%. However, in absolute figures, shareholders’ equity increased by 22.3% to € 1,386.4 million, compared to € 1,133.3 million. As in previous years, PUMA’s financial resources remain solid.

Working Capital

Working capital increased by 25.2%, rising from € 323.2 million to € 404.5 million. This increase stems from currency-related effects and the expansion of the consolidated group. As a percentage of sales, this corresponds to a slight increase from 13.2% to 14.9%. The rise in working capital is mainly attributable to the increase in inventories of 27.7% to € 439.7 million which is necessary to accommodate our expected sales growth in 2011 and an increase in trade receivables of 28.7% to € 447.0 million resulting from the strong increase in sales in Q4 as well as currency impacts.

Cashflow/Capex

The gross cashflow rose by 28.7% to € 358.4 million in 2010, which is due to the increase in earnings before taxes (EBT). The change in net current assets reflects a net cash outflow of € 97.0 million compared to a net cash inflow of € 116.8 million reported in the previous year. This derives from increases in inventories and trade receivables. Taxes, interest and other payments remained stable at € 92.0. In summary, cash provided by operating activities stood at € 169.4 million after € 303.9 million last year.
Net cash used for investing activities increased from € 136.6 million to € 152.3 million. This major portion of the increase is attributable to the payments for acquisitions, which rose by 32.5% from € 81.8 million in the previous year to € 108.4 million and relate mainly to the purchase of Cobra and Wilderness. Also included are current investments in fixed assets (Capex) which amount to € 55.2 million after € 54.5 million. As a result, the free cashflow declined from € 167.3 million to € 17.1 million. Excluding payments made for acquisitions in 2010, the free cashflow fell from € 249.1 million to € 125.5 million. As a percentage of sales, free cashflow (before acquisitions) amounted to 4.6% after 10.2%.
Net cash used for financing activities mainly includes dividend payments of € 27.1 million and investments relating to the purchase of treasury shares of € 23.4 million.
Cash and cash equivalents remained almost unchanged at € 479.6 million.

Dividend

The Board of Management and the Supervisory Board will propose to the Annual General Meeting on April 14, 2011, that a dividend of € 1.80 per share (the same as in the previous year) to be paid for the financial year 2010 from the retained earnings of PUMA AG. The unchanged dividend corresponds to the improvement in the consolidated result, while taking the restatement of last years financial results into consideration. The dividend is to be paid out on the day after the Annual General Meeting when the profit distribution is authorized.

Share buy back

In 2010, PUMA purchased 102,219 of its own shares and held 101,593 of its own shares at the end of the year resulting in an investment of € 23.4 million.

Other Events

PUMA AG to convert into a Societas Europaea (SE)

In our ad hoc release on October 25, 2010, PUMA AG outlined its intention to adopt a new legal structure by transforming into a European Corporation, PUMA SE. As part of the transformation, PUMA intends to convert its current two-tier board structure with a management board and a supervisory board to the more flexible and international structure of a one-tier Board. Additionally, managing directors will be responsible for the general management of PUMA SE.

At the upcoming annual general meeting in April 2011, the shareholders will be asked to vote on the change of PUMA AG’s corporate structure.

Outlook 2011

In 2010 – especially in the second half – economic conditions improved compared to 2009. Despite the lack of major sporting events, we believe that the company should achieve an increase in sales in the mid to high single-digit percentage range in the next two years. At last year’s investor conference, PUMA presented its five-year company strategy “Back on the Attack 2011-2015”, which aims at achieving a significant sales increase in particular within PUMA’s core markets, fueled by investments in brand and product complemented by optimized business processes, especially in the first couple of years of our expansion strategy. As a result, the expense ratio is expected to increase compared to the previous year’s level, while gradually decreasing in the subsequent years. We expect an improvement in net earnings in the mid single-digit percentage range for 2011 and 2012 on the basis of modest increases in procurement prices.

Photo Credits: Conné/ PUMA
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