Performance Third Quarter 2012

• Consolidated sales increase 6.0% in Euro terms
• EBIT before special items decreases by 16.7% to € 98.8 million
• Special items € 80 million due to Transformation and cost reduction program
• EPS down from € 5.45 to € 0.81

Performance First Nine Months of 2012

• Consolidated sales grow 7.8% in Euro terms
• EBIT before special items reduced by 13.0% to € 247.9 million
• EBIT including special items € 168.6 million
• EPS declines from € 13.15 to € 7.53
• Equity ratio improves from 62.9% to 65.2%

Outlook for the Financial Year 2012

PUMA’s Management maintains its 2012 sales guidance at a mid-single digit rate in Euro terms.

• Transformation Program complemented by immediate cost cutting measures as the difficult business environment in particular in Europe required short-term adjustments.
• Management expects annual net earnings to be significantly below those of 2011, impacted in particular by the one-time expenses.

“PUMA posted a moderate increase in sales in the third quarter despite the challenging business climate in Europe,” said Franz Koch, CEO of PUMA SE. “We have taken decisive actions to overcome the issues we are currently facing in particular in Europe. Our Transformation Program 2010-2015 in combination with immediate cost cutting measures and a strengthened product pipeline in Performance and Lifestyle for next year will provide a solid basis for sustainable and desirable growth.”

Challenging Business Climate in Europe continues to slow down sales growth

 Sales Performance by Segment

PUMA’s third quarter consolidated sales grew by 6.0% in Euro terms and by 0.5% currency adjusted to € 892.2 million.

Footwear sales rose by 2.5% to € 441.9 million, supported by continuing demand for the lightweight running footwear range PUMA Faas and also Heritage styles such as the evergreen Suede Classics and our Archive Lite Mid and Low designs. PUMA’s success in its running footwear range was underlined by the Olympic Summer Games that saw PUMA’s blend of Sportlifestyle at its best: Outstanding athletic performances, combined with cool events in town. However, the positive performance in our Running category was dampened by declines in the Fitness & Training and Motorsport categories in PUMA’s mature markets.

Apparel sales increased by 5.6% to € 311.2 million, fueled not only by continued strength in our Cobra PUMA Golf division, but also by sales of replica jerseys as part of our Teamsport category. PUMA has had tremendous success with Borussia Dortmund replica and fan wear, which has played an important part in our sales performance in Germany this year.

Accessories continued to climb strongly, up 20.1% to € 139.1 million with strong results in our American sock and bodywear business and also in Golf. In September, PUMA was part of a sensational finish at the 2012 Ryder Cup when Cobra PUMA Golf athlete Ian Poulter, the undisputed player of the tournament, won all four matches he played in the prestigious competition between the best golfers from Europe and the USA.

Over the first nine months of this year, consolidated sales improved by 7.8% in Euro terms or by 3.3% currency adjusted to € 2.46 billion. Footwear sales rose 2.2% in Euro terms, Apparel sales were up 9.8% supported by strong sales in Running and other performance items, and Accessories rose 23.4%, with Cobra PUMA Golf products resonating well with consumers.

Sales Performance by Region

 Growth continues in the Americas

In regional terms, sales in EMEA declined by 3.4% to € 396.7 million as the economic slow-down in Europe and restrained consumer spending continued to have a severe impact on PUMA’s business performance. Strong numbers from Germany and Russia could not completely offset the slowdown elsewhere. However, PUMA continued its excellent performance in the Americas with sales growing by 20.5% in Euro terms (10.6% currency adjusted) to € 283.2 million in the third quarter, with Argentina, Brazil and Mexico all providing strong double digit increases and continued growth in North America. Asia/Pacific posted a gain of 8.3% in Euro terms to € 212.3 million with good numbers from Korea and India in particular. Growth in China has slowed down due to a challenging overall market environment and high inventory levels in the market.

First-nine-month sales in EMEA were down 2.5% with most markets in Western Europe continuing to face challenges, although Germany returned satisfying figures, as did Turkey. Conversely, sales in the Americas rose strongly by 18.3% with good results across both North and Latin America. North America benefitted in particular from continued growth in our socks and bodywear subsidiary as well as Cobra PUMA Golf. Asia/Pacific increased by 14.9%, supported again by excellent numbers from India and also Japan.

Sales Performance Retail

 Retail continues to grow

PUMA’s owned and operated retail operations generated higher sales numbers. Third-quarter retail sales were € 165.0 million, an increase of 22.7% compared to € 134.0 million for the third quarter of 2011 and equal to 18.5% of total sales. For the first nine months to the end of September, retail sales were up 20.4% from € 363.0 million to € 437.0 million, delivering 17.7% of total sales compared to 15.8% at the same stage last year. Comparable sales rose at existing stores and PUMA continues to open new selective stores in profitable locations. However, a considerable amount of retail stores in mature markets are not generating satisfying contributions and will be part of the retail store network optimization. PUMA’s e-commerce business is growing and has contributed positively.

Margins, Expenses and Profitability

 Gross Profit Margin fell in Q3 and for the first nine months of 2012

The gross profit margin declined to 48.2% in the third quarter of 2012, under pressure from input costs and unfavorable trading conditions in Europe. Footwear fell from 49.8% to 46.1%, mainly impacted by inventory clearances which have led to a stock reduction in the footwear category in the third quarter, ahead of the launch of our new ranges for Spring/Summer 2013. Apparel fell marginally from 50.3% to 50.1%. Accessories, however, rose from 50.0% to 50.6% compared to 2011.

On a nine-month basis, the gross profit margin declined 110 basis points from 50.6% to 49.5%. Footwear fell from 49.8% to 47.9%. Apparel remained steady at 50.9% while Accessories moved lower from 52.4% to 51.2% due to higher input costs and the competitive Teamsport business.

Operating Expenses increase

Third-quarter operating expenses rose by 9.5% to € 336.1 million in the third quarter of the year compared to € 307.0 million last year. Retail costs have continued to rise as PUMA has increased the number of retail stores it owns and operates, whilst the Olympics and associated costs meant that marketing was significantly higher than over the same period in 2011. As well as continuing to invest steadily in RD&D in order to further strengthen our product portfolio, we are continuing to enhance our supply chain and IT-systems.

For the first nine months of 2012, OPEX rose by 11.3% or € 100.5 million from € 885.5 million to € 986.0 million, impacted as above by increased marketing, retail and RD&D expenditures as well as investments in line with the accelerated Transformation Program. The OPEX has also been impacted by currency effects which alone led to an increase of 450 basis points.

Operating result before Special Items

As a result of the lower gross profit margin and increased operating costs related to the Transformation Program, the operating result before special items declined by 16.7% to € 98.8 million during the third quarter of 2012. On a nine months basis EBIT before special items fell by 13.0% to € 247.9 million, an EBIT margin of 10.1%

Special Items

PUMA recorded a total of € 80 million in special items that are related to the Transformation Program during the third quarter. These have been mainly incurred by restructuring the European region, optimizing the retail portfolio and reorganizing its global operations and functions.

EBIT after special items

EBIT including special items were equal to € 19.6 million for the third quarter and € 168.6 million for the nine months to the end of September.

Financial Result

The financial result was positive at € 1.7 million compared to € -2.1 million in the third quarter of 2011, due mainly to positive currency developments. Similarly, for the year to date, the financial result improved from € -3.9 million to € -0.9 million.

Earnings before Taxes

PUMA’s third-quarter EBT was down 81.7% to € 21.3 million. The quarterly tax ratio decreased from 30.0% to 27.7%.

EBT also fell for the first nine months of the year from € 281.1 million to € 167.7 million after special items, a drop of 40.3%. The company reported an improved tax rate of 28.9% compared to last year’s 30.0%.

Net Earnings decline

As a consequence of continued pressure on the gross profit margin, increased expenditures and the special items in particular, consolidated net earnings fell by 85.1% to € 12.2 million. Earnings per share therefore fell to € 0.81.
For the first nine months of 2012, net earnings weakened by 42.8% to € 112.8 million and EPS decreased to € 7.53.
Net Assets and Financial Position

Equity

Total assets as of September 30, 2012 grew by 6.5% from € 2,423 million to € 2,580 million, mainly due to an increase in inventories. The equity ratio improved from 62.9% to 65.2% when compared to the third quarter of 2011. In absolute figures, shareholders’ equity increased by 10.3% from € 1,524 million to € 1,682 million.

Working Capital related Assets and Liabilities

Looking at assets, inventories rose by 21.3% in Euro terms to € 646.0 million or 16.8% currency adjusted. This increase is significantly lower than in previous quarters and testament that our efforts to reduce the current over-stock levels have been successful in the quarter. Inventories have generally advanced in the wake of continued retail expansion as well as higher average prices per unit on stock. Trade receivables rose only slightly to € 623.7 million, which is due to a sharper focus and reflects PUMA’s dedication to improve outstanding days. On the liabilities side, trade payables fell slightly to € 382.9 million.

Cashflow/ CAPEX

The Free Cashflow (before acquisitions) came in at € -82.7 million compared to € -89.4 million for the same period in 2011, with working capital increases offset by lower tax payments. The payments for acquisitions relate to the purchase of the outstanding Dobotex shares, effected on January 1, 2012.
CAPEX increased by 21.4% to € 54.2 million and continued for the most part to be related to investments aligned with the “Back on the Attack” growth plan, such as supply chain initiatives, IT projects and profitable retail store extension.

Cash Position

The total cash position as of September 30, 2012 was reduced by 9.4% from € 289.5 million to € 262.2 million, affected by the purchase of the remaining Dobotex shares. Including bank debts, the net cash position decreased 19.5% from € 255.1 million to € 205.4 million.

Implementation Status of PUMA’s Transformation Program and Cost Reduction Measures

PUMA has progressed with and has already begun to implement major parts of its Transformation Program which was introduced in 2010 as a new development phase with the aim to reduce complexity and increase operational efficiencies in the long run. In addition, immediate cost reduction measures were initiated to improve the overall current financial performance.

New Regional Business Model: At the core of the program is the setup of a new regional business model which will initially be rolled out in Europe and then gradually be extended to the remaining regions. The European organizational structure has now also been expanded to include several central and eastern European Union member states (Czech Republic, Poland, Hungary, Slovakia and the Baltic nations). Furthermore, PUMA has reduced the number of organizational entities from 23 countries to seven areas in order to reduce complexity of the business. Each area has a full management team and P&L responsibility, while each country will focus its activities on the commercial side of the business. The seven areas are: DACH (Germany, Austria, Switzerland), IBERIA (Spain, Portugal), UKIB (Belgium, Ireland, Luxemburg, Netherlands, UK), NORDICS (Denmark, Finland, Norway, Sweden) EASTERN EUROPE (Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Slovakia), FRANCE and ITALY.

Consolidation of Warehouse Portfolio: Correspondingly, PUMA has initiated the consolidation process of its warehouse portfolio across Europe in order to generate further efficiencies and cost savings with the long-term objective to align the warehouse network with the new area structure.

Optimization of Retail Portfolio: PUMA has decided to close a total of approximately 80 unprofitable stores with the focus on mature markets, while the company will continue to open new selected stores in profitable locations primarily in emerging markets. By the end of December 2013, PUMA aims to operate around 540 stores worldwide, compared to its current 590 stores.

Termination of Collaboration and Endorsement Contracts: PUMA has decided to divest unprofitable collaborations and endorsement contracts in line with the overall consolidation of its product portfolio.

Reducing Product Collections: PUMA is planning to downsize its overall product palette by 30% by the end of 2015. The number of articles has already been aligned with the company’s core categories. The major portion of the article reduction will come from streamlining regional and local ranges. The first significant results of this rationalization and simplification will be visible in Spring/Summer 2013.

Establishment of Business Units: PUMA will evolve its international organization establishing seven Business Units (Teamsport; Running, Training and Fitness; Golf; Fundamentals; Motorsport; Lifestyle; Accessories and Licensing). Product management, design, development and product-specific marketing will be clustered under each Business Unit. Establishing the Business Unit structure will help PUMA to press ahead with its sharpened focus on Performance as well as Lifestyle categories.

Further actions are currently under investigation, to be put in place during the fourth quarter of the year.

Outlook for the Financial Year 2012

Against the backdrop of a difficult business environment in particular in Europe, PUMA’s management has complemented its 2010-2015 Transformation Program with immediate cost reduction measures. The above actions require one-time costs of € 80 million which were booked in the third quarter. PUMA expects that these one-time expenses will be amortized within two to three years.

PUMA’s management continues to forecast annual sales rising by mid-single digits in Euro terms and net earnings significantly decreasing from last year’s level due to the aforementioned one-off expenses.

Franz Koch will remain CEO of PUMA until the end of March, and work in close collaboration with the new Chairman of the Administrative Board, Jean-François Palus, also PPR Group Managing Director, in order to secure PUMA’s on-going operational transformation and generate profitable growth.

Jean-François Palus, Chairman of the Administrative Board of PUMA SE, stated:

“Together with Jochen Zeitz, Franz Koch has been the driver of strategic key initiatives and has strongly contributed to PUMA’s development over the past few years. I would like to warmly thank Franz for his efforts, commitment and dedication to PUMA, as well as his contribution to evolving the organization and management team. Going forward with the future CEO, who we aim to hire by spring 2013, we will pursue the reorganization of the company, focus on product innovation and marketing, and will continue to devote the necessary resources to the development of the brand. We are now going to write a new chapter for PUMA and thanks to the commitment and enthusiasm of the teams I’ve been meeting around the world, I am fully confident in our ability to realize the huge potential of this iconic brand”.

“The agreement requires PUMA to underwrite the costs and to cut off business with any factory that refuses to make necessary safety upgrades. It gives workers and their unions a role in the process according to the non-profit Worker Rights Consortium,” said Caroti at PUMA’s stakeholder meeting at the Banz monastery in Bad Staffelstein in front of 67 participants from non-governmental organizations, academia, suppliers and corporations.

PUMA sources 11% of its apparel products from six supplier factories in Bangladesh. All PUMA suppliers in Bangladesh were A to B+-rated after having been audited by PUMA’s audit team.

PUMA has defined clear mandatory standards for all suppliers in the “PUMA.Safe Handbook of Occupational Health and Safety,” which includes specifications on working safety as well as the architecture and structural engineering aspects of their buildings (See Chapter 9 on about.puma.com/en/Sustainability/Codes-and-Handbooks). Following the building collapse in Bangladesh in April, we immediately contacted all PUMA suppliers to receive confirmation from the suppliers that they are following these regulations and to request the structural engineering certificates for all buildings. Future audits of supplier factories will be carried out with a renewed focus on these aspects.

A special guest at PUMA’s 10th annual stakeholder meeting – that focussed on the question “How to let Consumers live and support Sustainability” – was Nazma Akter, President of the Bangladesh Combined Garment Workers Federation and a former child worker in an apparel factory, who elaborated on the working conditions in Bangladesh supplier factories and called upon PUMA to increase the sourcing volumes from Bangladesh in order to support the important apparel industry of the country.

PUMA’s stakeholder meeting took place from June 3 to 4, 2013.

A full list of PUMA suppliers is available on:

The Joint Roadmap, Version 2, presents the ZDHC Group’s long term vision, interim 2015 milestones and 2020 goals. It builds on the previous Joint Roadmap document and sets out a new plan, incorporating and reflecting comments received from a wide range of stakeholders, including textile industry suppliers and associations, government agencies in Asia, Europe and the United States, non-governmental organisations, international development organisations and the chemical industry.

“To achieve the goal of systemic change and commercialisation of new, preferred alternative chemistries, we will need to transform the industry’s manufacturing inputs and processes. This requires full collaboration amongst thousands of organisations,” said Jessica Wollmuth, ZDHC Programme Manager. “Good progress has been achieved thus far, and the Joint Roadmap, Version 2, lays a firm foundation for creating an apparel and footwear industry that delivers high quality products using safe chemistries.”

ZDHC Group achievements in the past year include having:

• Completed chemical use and management surveys, and wastewater testing for approximately 150 analytes at 20 facilities in Bangladesh, China, India, Taiwan China and Vietnam
• Completed a chemical inventory that is the most complete, publicly available compilation of information on chemicals used in the textile industry
• Developed training materials in English and Chinese
• Developed and delivered training to suppliers
• Engaged with more than 350 potential stakeholders
• Completed system mapping, critical to the understanding of the interconnected issues, leverage points and stakeholders involved.
• Agreed to timelines for the phase out of C8 chemistry by no later than January 1, 2015
• Worked with suppliers to address the most pressing chemicals of concern, starting with APEOS, and will continue to do so in 2013
• Worked to identify safer chemistries and mechanisms to incentivise chemical suppliers to invest in these alternatives

“Building on the knowledge gained during the first full year of implementation, the Joint Roadmap, Version 2 provides an overview of the guiding principles and long-term vision of the ZDHC group, and defines key activities that will catalyse industry change,” said Wollmuth. By implementing tasks in seven workstreams defined in the Roadmap, specifically Chemical Hazard Assessment, Prioritisation and Action, Training, Right to Know, Assessment and Auditing, Management Systems Approach, Structure and Documentation Stakeholder Partnering, and Chemicals Management Best Practices Pilot. The ZDHC Group will develop and promote industry best practices to deliver a safer and cleaner environment. “Our goal is ambitious, and the ZDHC Group and partners are fully committed to working together to achieve it, “ said Wollmuth.

“Torsten Hochstetter is a proven expert in the sporting goods and fashion design industry,” said Björn Gulden, CEO of PUMA. “I am pleased that with Torsten we have a long-standing design expert coming onboard of PUMA bringing an extensive experience and know how to our company.”

German-native Hochstetter has a broad international experience in the sports and fashion industry. Before joining PUMA, he was Creative Director at American surfwear company O’Neill. Prior to that, he used to work for Adidas in Germany, USA and Japan, holding positions such as Creative Director Sport Performance and Creative Director Sport Style. He started off his professional career at German fashion company S. Oliver in 1993. Hochstetter has a Fashion Design degree from Ent-Art Polimoda in Florence and completed a tailoring apprenticeship. He is fluent in English, Italian, Dutch and Japanese.

2013 Second Quarter Facts

• Consolidated sales decline by 4.0% currency adjusted to € 692 million
• Strong sales growth in the UK, India and Russia
• Southern Europe and the Far East remain challenging
• Ongoing Transformation and Cost Reduction Program implementation leads to lower operating expenses
• EPS retreats from € 1.78 to € 1.17
• New CEO, COO and Global Creative Director have taken up office
• Multi-award winning Mobium Elite running shoe is gathering momentum

2013 First Six Months Facts

• Consolidated sales decrease by 3.1% currency adjusted to € 1.47 billion
• Gross profit margin equal to 47.7%
• EPS amounts to € 4.54

Michael Laemmermann, Chief Financial Officer of PUMA SE: “Despite sluggish performances in Southern Europe and the Far East as well as currency headwinds impacting sales, PUMA’s second quarter performance was in line with our full-year guidance. We have pushed forward with our Transformation and Cost Reduction Program and continued to reduce the number of underperforming retail stores. With our new Chief Executive and Chief Operating Officers as well as Global Creative Director onboard, we are well positioned to secure profitable, long term growth.”

Sales Performance by Region

PUMA’s consolidated sales declined by 4.0% currency adjusted from € 753 million to € 692 million as a result of lower sales in all regions during the second quarter of 2013. Sales in Euro terms fell by 8.0% due to negative currency effects in various countries, notably in Japan, Argentina and South Africa.

Eastern European growth boosted by Russian Market

The EMEA region recorded a decline of 4.7% currency adjusted with sales of € 266 million in the second quarter. PUMA’s sales performance in Eastern Europe bucked the current sluggish business trend in Europe, delivering mid-single digit sales growth currency adjusted. Russia in particular rose strongly, delivering strong double-digit currency adjusted growth against a background of continuing retail portfolio optimization. Sales in Turkey rose likewise, driven in particular by an improved retail performance. However, these excellent performances were more than offset by slowing sales in Western and Southern Europe with France and Italy in particular not meeting expectations within the region.

In the Americas sales softened by 1.3% currency adjusted to € 267 million in the second quarter of 2013, including strong comparables. While sales in the US market decreased slightly and performance in Chile slowed, Canada and Argentina improved significantly. Golf products resonated particularly well with consumers in Canada, while in Argentina improved product availability due to increased local production underpinned strong sales growth.

Sales in the Asia/Pacific region fell by 7.2% currency adjusted to € 159 million, declining in nearly all markets. Although India continues to deliver another excellent quarterly performance, where our cricket offering continues to perform, and sales in Japan were positive on a currency adjusted basis, this was compensated by slow-downs in Korea and China, where some wholesalers have consolidated and high inventories persist within the market.

Mixed half-year regional performance

During the first six months of 2013, sales in EMEA declined by 4.8% currency adjusted to € 614 million as major markets continued to underperform. However, the Americas performed much better, with sales being up slightly by 0.2% currency adjusted to € 527 million. Asia/Pacific finished down by 5.0% currency adjusted at € 333 million for the first half of the year.

Retail Business continues to grow as Transformation Program takes effect

PUMA has continued to optimize its retail portfolio, notably by closing non-performing stores in line with the Transformation and Cost Reduction Program. This, combined with the opening of new, profitable stores and an improved e-commerce platform, has helped to propel PUMA’s retail performance. Retail Sales increased by 3.4% currency adjusted in the second quarter to € 149 million and by 8.1% during the first six months of the year to € 284 million, which represents 19.3% of our total sales.

Sales Performance by Segment

Innovative Running Shoe Mobium is making Strides

Currency adjusted Footwear sales moved down by 7.3% to € 330 million in the second quarter of 2013. Although our Lifestyle category continues to perform well, Motorsport did not meet expectations and Teamsport was lower due to high comparables from last year’s sales triggered by the Euro 2012. However, PUMA’s top-selling adaptive running shoe Mobium Elite has won multiple awards. It has garnered accolades across the globe, including Most Innovative (Competitor Magazine/US), Best New Technology (Go Multi/South Africa) and Best Debut (Runner’s World China). PUMA’s Mobium Elite will continue to evolve and thrive with new colors and hues available in the coming seasons. The new evoSPEED football boot, which was launched in the second quarter, is also off to a good start with positive sell-through rates at major football specialty retailers.

Sales in the Apparel segment declined by 6.8% currency adjusted to € 227 million. While the Lifestyle and Fitness categories remained below expectations in the second quarter, PUMA’s football category benefitted from Borussia Dortmund’s outstanding performances in the Champions League.

Accessories climbed by 10.9% currency adjusted to € 136 million, as our joint ventures for socks and bodywear continued to outperform. Cobra PUMA Golf – one of PUMA’s currently most successful categories – grew by double digits. Golf professional and PUMA partner Jonas Blixt recently underscored Cobra PUMA Golf’s burgeoning reputation, winning the Greenbrier Classic, his first US PGA tournament of the year. With his Cobra Clubs and PUMA Apparel and Footwear, Jonas cleared up the field to win by two strokes.

Varied half yearly segment sales

Footwear sales in the first half of the year were down by 7.5% currency adjusted to € 703 million. Likewise Apparel, where sales retreated by 3.8% currency adjusted to € 483 million. Accessories, however, advanced by 11.4% currency adjusted to € 288 million.

PUMA has had great successes with its partnered athletes and teams in the first half of the year. The focus now turns to the Track & Field World Championships in Moscow in August, where PUMA will be partnering eight national teams in the competition. Their performances will not only further improve PUMA’s brand visibility but also our product expertise in the Running category.

Transformation and Cost Reduction Program in line with plan

PUMA continued to realize its quarterly objectives in effecting the Transformation and Cost Reduction Program during the second quarter of 2013. The company’s retail portfolio delivered growth whilst being optimized, as unprofitable stores were closed and at the same time new, profitable stores opened in the second quarter. PUMA has now closed 60 stores within the Transformation Program since the beginning of the year, which also impacted the total sales number.

In line with the Transformation and Cost Reduction Program, PUMA has also continued with its divestiture of non-core marketing and sponsorship assets and will continue to do so in the second half of the year. In addition, there has been further streamlining within PUMA’s European operations, as the organization follows its path towards a more efficient, fully regional setup, and also amongst our business unit structure, both helping us to become a more market and consumer focused organization.

This is all part of the management’s clear aim of invigorating the brand desirability and rejuvenating the product offering, with a sharp focus on core markets and categories. PUMA continues to foster an entrepreneurial culture and cultivate strong sales forces in its markets, thriving on the high motivation of its employees.

Margin, Expenses and Profitability

Gross Profit Margin abates

The expected pressure on margins continued during the second quarter of 2013, pushing PUMA’s gross profit margin down from 49.1% to 46.0%. Ongoing currency headwinds arising from negative hedging positions compared to the same period last year, increased promotional activity as well as the regional and Footwear product mix combined to exert pressure on the margin. Footwear margin dropped from 48.3% to 44.1%, further impacted by discounts. Apparel fell from 49.4% to 47.0% and Accessories fell from 51.1% to 49.2%

The gross profit margin also declined over the first six months of the year from 50.2% to 47.7%. Footwear moved down from 48.9% to 45.1%, Apparel retreated from 51.5% to 49.4% and Accessories ebbed from 51.5% to 51.0%.

Maintained OPEX focus delivers an improved OPEX ratio

As PUMA continues to implement the Transformation and Cost Reduction Program laid out last year, the Company continues to benefit in terms of reduced operating expenditure throughout the firm. Operating expenditures declined by almost 11% from € 327 million to € 292 million during the second quarter of 2013, underpinning our efforts to further improve the overall efficiency of our organization. This OPEX reduction has resulted in a decrease in the OPEX ratio by 130bps year-on-year to 42.2% in the second quarter.

OPEX also fell during the first half of 2013 compared to 2012 and improved from € 650 million to € 602 million, with OPEX ratio decreasing to 40.8%.

Operating Result (EBIT) weakens

Although, and as mentioned above, PUMA continues to achieve significant savings through the Cost Reduction Program, those could not offset the decline in sales and gross profit margin. As a result, EBIT declined from € 47 million to € 31 million in the second quarter. Similarly, half-year EBIT declined from € 149 million to € 110 million, equal to an EBIT margin of 7.5%.

Financial Result

The second quarter financial result was broadly stable at € -4 million. Currency fluctuations during the first half of the year moved the financial result down from € -3 million to € -8 million compared to last year.

Earnings before Taxes (EBT) soften

EBT for the second quarter was down from € 43 million to € 27 million with tax expenses also declining, reflecting a lower tax rate of 24.5% in the quarter. PUMA’s half-year EBT also fell from € 146 million to € 102 million, with the tax rate improving to 28.0%.

Net Earnings / Earnings per share decline

PUMA’s consolidated net earnings retreated from € 27 million to € 18 million during the second quarter of 2013. Earnings per share fell from € 1.78 to € 1.17. Net earnings also declined during the first half of 2013 from € 101 million to € 68 million with EPS decreasing from € 6.72 to € 4.54.

Net Assets and Financial Position

Working Capital improves

As a result of PUMA’s continued emphasis on tight inventory management, inventories as of June 30th were 5.6% lower at € 635 million compared to last year. Group trade receivables were also 11.9% lower at € 513 million compared to last year. The Group’sworking capital has therefore developed positively from € 707 million to € 685 million at the end of June 2013.

Cashflow / Capex

PUMA’s Free Cashflow continued to improve during the first half of the year, moving from € -147 million to € -112 million. This is a result of lower payments for acquisitions and reduced Capex in 2013. The Free Cashflow (before acquisitions) came in at € -92 million compared to € -57 million for the same period in 2012.

Capex significantly declined from € 34 million to € 19 million, with lower investments in retail stores and other equipment.

Cash Position

As a consequence of the elements mentioned above, PUMA’s net cash position improved from € 236 million to € 291 million at the end of the second quarter.

General Matters

New Chief Operating Officer and Global Creative Director appointed

PUMA has appointed Andy Koehler as Chief Operating Officer (COO), who took up his position on June 1st. Andy, who succeeds former COO Klaus Bauer, is part of PUMA’s new management team built around PUMA’s new CEO Bjoern Gulden. Andy takes control of the Operations, Supply Chain Management, Logistics and IT functions.

To strengthen product and design, PUMA has created the new position of Global Creative Director as part of its Transformation Program and appointed to it Torsten Hochstetter. Torsten is responsible for designing, creating and developing the Sport Performance and Sport Lifestyle collections of the brand, touching on all product categories including Footwear, Apparel and Accessories. Torsten will work hands-on with all respective PUMA design teams worldwide.

Outlook for the Financial Year 2013

Full-year guidance remains unchanged from the first quarter

Following PUMA’s sales performance for the first half year 2013, Management continues to expect a low to mid single-digit decline in currency adjusted full-year net sales as well as pressure on the gross profit margin during the second half. As a consequence, and also based on continued OPEX improvements, Management reiterates its first quarter guidance and expects an increase in net earnings compared to 2012.

Now aged 27, Usain Bolt has been training and competing in PUMA since 2003, most recently wearing the evoSPEED performance spike which led him to the finish line at the 2012 Olympic Games in London and the 2013 IAAF World Championships in Moscow, where he won a total of six gold medals. He has been the face of multiple global marketing campaigns orchestrated by the PUMA, and will be the focus of product initiatives and brand marketing communication in 2014 and beyond.

Usain Bolt commented, “PUMA has been with me since the very beginning. They recognised my talent at an early age and have supported me throughout, especially in the early years when I had some difficult times due to injuries. Their work and commitment to Jamaica is also very important to me. I have always been very happy to be a part of the PUMA family, I am proud to represent them and delighted to continue with them for the years ahead.”

Bjoern Gulden, CEO for PUMA said, “Usain Bolt has been a partner of PUMA since he was sixteen years old. With our support, he grew from a young athlete with huge potential to a World and Olympic Champion, claiming the title of the World’s Fastest Man. We are very proud to extend our sponsorship contract with him because Usain is the perfect ambassador of the PUMA brand. He will play a crucial role in our future product concepts as well as brand communications leading towards the Olympic Games in Rio 2016 and beyond.”

In addition to its contract endorsement with Usain Bolt, PUMA has a longstanding commitment to Jamaican Track & Field. Since 2002, PUMA has partnered with the JAAA (Jamaica Athletics Administrative Association) and the JOA (Jamaica Olympic Association). PUMA also helps to foster young talent through sponsorship of high school track and field programs, and works with various grass roots activities in Jamaica.

2013 Third Quarter Facts

• Consolidated sales decline by 1.4% currency adjusted to € 813 million
• Further improvement in operating expenses, down 8% in the quarter, however not fully offsetting lower sales and gross profit decline
• EBIT before special items down to € 80 million
• EPS climbs from € 0.81 to € 3.53, due to impact from special items in Q3 2012
• Further improvement in working capital during third quarter, leading to an increase in the free cash flow

2013 First Nine Months Facts

• Consolidated sales decline by 2.5% currency adjusted to € 2.3 billion
• Gross profit margin below last year at 47.5%
• OPEX continually reduced throughout the year, in line with the ongoing Transformation and Cost Reduction Program
• Net Earnings up from € 113 million in 2012 to € 121 million in 2013
• EPS rises from € 7.53 last year to € 8.07 this year

Special items announced

• Special items of approximately € 130 million (one-off charges, primarily non cash) expected to be booked in the fourth quarter of 2013
  
  

Key Sales Figures at a Glance

Bjoern Gulden, Chief Executive Officer of PUMA SE: ”Sales and profitability for the third quarter developed as expected. Analyses have shown the need for further, mainly non-cash, one-off charges. Special items of around € 130 million are therefore expected to be booked in the fourth quarter. We know that our business is currently in a difficult position with challenging sell-throughs, sub-optimal distribution and low brand heat. But we also know that PUMA is an amazing brand with a great history, global awareness, fantastic logos, great assets and talented people. I am therefore convinced that – although it will take some time – we will turn this business around and make ‘the cat’ shine again.”

Sales Performance by Region

PUMA’s sales performance in the third quarter of 2013 was in line with full year guidance. Consolidated sales softened by 1.4% currency adjusted in the quarter. In Euro terms, sales declined by 8.9% from € 892 million to € 813 million due to the continuing currency volatility generated by several countries.

EEMEA and UK continue to grow

Third-quarter EMEA sales declined by 1.7% currency adjusted to € 378 million, as the business climate in Western Europe continued to be challenging. However, PUMA performed well in the UK, primarily due to strong sales of our Lifestyle and women’s fitness ranges. Despite these improved figures, poor consumer sentiment and depressed household spending across much of Europe, particularly in southern countries, outweighed the increases. There was, however, another encouraging performance in the Eastern European region.

Sales in the Americas were up by 0.7% currency adjusted to € 261 million in the third quarter of 2013. PUMA developed positively in North America and Argentina.
The Asia/Pacific region was weak across nearly every country in the third quarter, falling by 3.7% currency adjusted to € 174 million. The only exception was India, which delivered an encouraging performance with increased sales in the Running and Lifestyle categories.

Year-to-date regional performance varied

Consolidated sales declined 2.5% currency adjusted to € 2.3 billion in the first nine months of the year. The EMEA region was down by 3.6% currency adjusted to € 992 million. Performance in the Americas improved slightly with sales increasing by 0.4% currency adjusted to € 788 million and in Asia/Pacific sales were down by 4.5% currency adjusted to € 506 million over the period.

PUMA’s Retail Business continues to grow

In the third quarter, retail sales rose by 5.3% currency adjusted to € 161 million. For the first nine months of the year, they increased by 7.1% currency adjusted to € 446 million, equaling 19.5% of total sales. This growth was achieved despite PUMA operating a lower number of owned and operated retail stores and continues to justify the measures undertaken by the company’s Transformation and Cost Reduction Program.

Sales Performance by Segment

Footwear Sales continue to be difficult

PUMA’s third quarter Footwear sales declined by 7.1% currency adjusted to € 378 million. Although there were some positive signs from key styles in Running, Training & Fitness as well as Lifestyle, this was not sufficient to offset the downward pressure at category level. Apparel sales rose 3.4% currency adjusted to € 297 million, with nearly all Business Units up in the third quarter. Accessories likewise improved by 5.7% currency adjusted to € 138 million, thanks to an improved performance in football accessories as well as increased demand for PUMA’s socks and bodywear.

Year-to-date Footwear trend unchanged, Apparel improving, Accessories growing

In the first nine months of the year, sales in Footwear declined by 7.4% currency adjusted to € 1.1 billion. Apparel sales softened by 1.2% currency adjusted to € 780 million. Accessories continued to improve, up by 9.5% currency adjusted to € 426 million.

Margin, Expenses and Profitability 

Lower Gross Profit Margin

Due to changes in the product mix, selective discounting and currency headwinds, PUMA’s gross profit margin declined in the third quarter of 2013. Gross profit margin for the third quarter stood at 47.1%, compared to 48.2% over the same period last year. Footwear margin declined from 46.1% to 44.4%, Apparel margin was broadly unchanged at 49.9% and Accessories margin dropped from 50.6% to 48.6%.

Similarly, PUMA’s gross profit margin fell over the first nine months of the year, moving from 49.5% to 47.5%. Footwear declined from 47.9% to 44.9%, Apparel from 50.9% to 49.6% and Accessories from 51.2% to 50.2%.

Execution of Transformation and Cost Reduction Program continues

PUMA’s ongoing Transformation and Cost Reduction Program delivered further improvements to the company in the third quarter of 2013. The optimization of PUMA’s retail portfolio, where we have now closed over two thirds of the stores set out in the Program, has delivered the intended cost savings.

The company has also closed three warehouses in its efforts to streamline its logistical set up. We are also making progress on our article count reduction, with our 2013 collections streamlined by 10%.

A third consecutive quarter of OPEX reduction

As a result of the above mentioned Transformation Program, combined with ongoing cost control efforts, operating expenditures have been further reduced on a company-wide scale. Operating expenditures were once again lower when compared to last year, down 8.2% in the third quarter of 2013 from € 336 million to € 309 million.

Operating expenditures have been brought down from € 986 million to € 911 million for the first nine months of the year. As a consequence, PUMA’s OPEX ratio has decreased from 40.0% to 39.8%.

Operating Result (EBIT) before special items weakens

The continued improvement in OPEX delivered by the implementation of the Transformation Reduction Program has not been able to fully offset the current decline in sales and gross profit margin. Thus, when compared to last year, PUMA’s EBIT before special items has retreated in the third quarter from € 99 million to € 80 million. EBIT before special items also declined in the first nine months of 2013 from € 248 million to € 190 million, equivalent to a margin of 8.3%.

Financial Result

The financial result recorded for the third quarter was € -1.5 million, due mainly to continued currency fluctuations. For the first nine months similar impacts led to a result of € -9.5 million compared to € -0.9 million last year.

Net Earnings / Earnings per share improve

Consolidated net earnings rose in the third quarter of 2013 from € 12 million to € 53 million due to the impact from special items in 2012. Earnings per share improved correspondingly from € 0.81 to € 3.53. The first nine months of 2013 also saw improved net earnings from € 113 million to € 121 million. EPS therefore rose from € 7.53 to € 8.07.

Net Assets and Financial Position

Further strong improvement in Working Capital during the third quarter

PUMA’s continued focus on Working Capitalhas resulted in a decrease in inventoriesof 11.7% to € 570 million and a decrease in Group trade receivables by 16.1% to € 524 million at the end of the third quarter.

Cashflow / Capex

PUMA continued to improve Free Cashflow year-to-date, progressing from € -173 million to € -95 million. This was due to lower Working Capital needs, reduced Capex and investment activity. The Free Cashflow (before acquisitions)also improved from € -83 million to € -75 million.

Cash Position

As a result of the details outlined above, PUMA’s third quarter net cash position rose from € 205 million to € 246 million.

Brand Update

Over the last three months the new team has created a newly unified Brand Platform that will be rooted in the Sports DNA of the company, and which reconciles the Performance and Lifestyle sides of our brand. Previously, we have had two distinctive visions for each part of our business, which has led to confusion and a lack of clarity for our teams, our business partners, and ultimately our consumers.
We will start by focusing our efforts with a new mission statement – going forward, PUMA will be the Fastest Sports Brand in the World. This simplified mission will result in a single brand purpose and a single consumer message. PUMA will be: “Forever Faster“. The statement, a new tag line we will launch to consumers in 2014, reflects a 65 year history of making fast product designs for the fastest athletes on the planet.

But “Forever” references more than just our history, and our commitment to our classic products. It’s a recognition of the endless pursuit of whatever is next – in performance innovations, in cultural trends, and in style and fashion. While “Faster” is more than just delivering the rational benefit of speed to athletes, we will have a single minded purpose of celebrating faster in every sense of the word – lighter products, better fit for greater agility, enhanced benefits that allow for extended training for speed, and every other possible way we can deliver the fastest products for the fastest performers. The phrase simultaneously references the emotional benefit of owning speed – the thrill, the fun, and the swagger of Usain Bolt himself, the man who best personifies this new strategy and ambition.

Forever Faster will be a part of a long term effort to clearly re-establish our brand in the minds of our customers. The third quarter of 2014 will see the consumer launch of this new brand strategy that will also encompass a new brand campaign creative direction, supported by a large scale media campaign.

While Forever faster is the new brand platform for PUMA, it will also be the guiding principles for the company in its action and decisions: Our objective is to be fast in reacting to new trends, fast in innovations, fast in decision making and fast in solving problems for our partners. As one consequence of the new mission to become forever faster, the new management team decided to divest from our PUMA Village development center in Vietnam to accelerate PUMA’s development process by bringing our developers directly to the factories.. This step helps to streamline the processes between design and source with the intention to become leaner, more efficient and more agile within the creation process. As a further consequence, PUMA plans to relocate its international product functions from the London office to its headquarters in Herzogenaurach.

Marketing Update

At the 2013 IAAF World Championships in Moscow in August, where PUMA partnered eight national teams, the World’s Fastest Man Usain Bolt continued his reign as track and field’s biggest star, adding another three gold medals to his stash to become the most successful athlete in World Championship history. Together with his teammates, Usain helped power the Jamaican men’s team to victory in every sprint event. With six Gold medals in total, Jamaica finished third in the medal table, an excellent result for the Caribbean island and continued testament to PUMA’s product expertise in terms of speed and performance.

As he is the perfect ambassador for PUMA, the company renewed its contract with Usain Bolt in September, continuing our successful partnership up until the 2016 Olympic Games in Rio de Janeiro and beyond.

PUMA partnered Borussia Dortmund continued to enthuse the viewing public with their sensational performances – both in the Bundesliga as well as on the international stage in the UEFA Champions League – thereby cementing their position as one of the most attractive club teams in world football. While PUMA star Marco Reus continues to play a crucial role in Dortmund’s ongoing success, another talented midfielder has joined the PUMA Football family. Spanish International Santi Cazorla, who was awarded player of the year in his first season at Arsenal, is a fantastic addition to PUMA’s portfolio of international top players.

In October, our Cobra PUMA Golf athlete Lexi Thompson secured her third professional win at only 18 years old at the Sime Darby LPGA tournament in Malaysia. Her easy going personality, competitive nature and skill not only draws fans in from all over the world but also make her a perfect brand ambassador for our continuously expanding Golf category.

Outlook for the Financial Year 2013

Full-year guidance

Following third quarter sales, Management reiterates its expectations for a low to mid-single-digit decline in currency adjusted full-year net sales.

In addition, PUMA’s Management also anticipates one-off charges, the majority of which will be non-cash effective, of approximately € 130 million to be booked in the fourth quarter of 2013. The majority of these special items will consist of impairments charges related to non-current assets. New initiatives announced include the closure of the product development centre in Vietnam and the intended transfer of our international product teams from London to Herzogenaurach.

Reflecting these new elements mentioned above, Management now expects 2013 full year net earnings to be positive, but significantly below those of 2012.

Rounding differences may be observed in the percentage and numerical values expressed in millions of Euro since the underlying calculations are always based on thousands of Euro.

Media Relations:

Kerstin Neuber – Corporate Communications – PUMA SE – +49 9132 81 2984 – kerstin.neuber@puma.com

Investor Relations:

 Carl Baker – Finance – PUMA SE – +49 9132 81 3188 – carl.baker@puma.com

Notes to the editors:

• This press release and financial reports are posted on about.puma.com.
• PUMA SE stock symbol:

Reuters: PUMG.DE, Bloomberg: PUM GY,

Börse Frankfurt: ISIN: DE0006969603– WKN: 6969603

Notes relating to forward-looking statements:

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.

Over the last three months PUMA’s new management team has created a unified brand platform and simplified mission: Forever Faster. The statement, a new tag line that will launch to consumers in 2014, reflects a 65-year history of making fast product designs for the fastest athletes on the planet.

JWT will work with PUMA to develop and define a fast-moving creative process poised to capitalize on culturally relevant sporting moments. The agency will immediately begin working on a project to re-ignite the brand heat, working with PUMA to define its new Forever Faster brand messaging before rolling out a new global brand campaign in the second half of 2014.

“In JWT, we have found an agile agency with a global reach that understands the PUMA brand and culture,” said Björn Gulden, CEO of PUMA. “The team quickly proved that they could deliver on our new mission to become the Fastest Sports Brand in the World. Together we’ll craft a more nimble creative structure that will allow us to support all of the company’s sporting and lifestyle categories with a single consumer message and streamlined creative concept across territories.”

The PUMA account will be led out of JWT’s flagship headquarters in New York, with offices across the agency’s network contributing regional insight and localization of the global brand campaign.

“PUMA is more than an advertising relationship for us; it’s a true brand and business partnership,” said Peter Sherman, CEO, JWT New York. “It will be a privilege to work with this team.”

PUMA is the latest in a string of new business wins for JWT New York in the last three months, which includes a consolidation of Energizer brands and a creative assignment from Google.