“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.

Never out of the news for long, Balotelli wore PUMA boots on pitch for the first time last week in AC Milan’s game against Roma and again in the Milan Derby last night. The PUMA evoPOWER Stampa FG were covered in the news headlines that have defined his career to date.

Sports brand PUMA is proud to announce a new long-term partnership with the International Icon Mario Balotelli. The Italy Striker becomes the latest sporting sensation to join PUMA’s family of star players and athletes that includes Usain Bolt, Sergio Agüero, Cesc Fàbregas, Marco Reus, Radamel Falcao and Rickie Fowler.

Never out of the news for long, Balotelli wore PUMA boots on pitch for the first time last week in AC Milan’s game against Roma and again in the Milan Derby last night. The PUMA evoPOWER Stampa FG were covered in the news headlines that have defined his career to date.

Mario Balotelli is a key signing for PUMA and will become a key asset in PUMA’s brand and football communication over the coming years. PUMA’s long-standing partnership with the Italian Football Association (FIGC) is another strategic focus in which the Italian Centre Forward will play a significant role.

Speaking about the new partnership with PUMA, Mario Balotelli said: “This is a great move for me. From the early conversations I had with PUMA it was clear that they understand me, my personality and my ambition. The product and marketing plans they have developed are very exciting and I will be proud to be associated with everything I have seen. PUMA’s support for the Italian National team was another instrumental reason for me signing this contract and I am sure that the coming years will bring many good things for us all.”

Björn Gulden, CEO of PUMA, commented: “Mario Balotelli is a world class football player who will become a key ambassador for PUMA as his passion, speed, agility and power make him a perfect fit for our brand. With the FIFA World Cup in Brazil ahead of us, 2014 will be an important year for PUMA. Having Mario to complement an already strong sports-marketing portfolio, he will support our new brand mission ‘Forever Faster’ which will have a significant impact for the PUMA brand.”

Imagery and further assets can be downloaded from the PUMA Press Centre: about.puma.com/en/Newsroom

PUMA and Arsenal will work together to bring further innovation into the sports brand’s performance apparel range. Both organisations will work collaboratively on a global strategy to drive mutual growth across all football markets, achieved through PUMA’s global sales network, international tours and integrated marketing activities. Arsenal also presents PUMA with its most prominent platform to showcase performance products through its significant global fanbase, profile and reputation.

Having extended and deepened its relationship with the FIGC (Italian Football Federation), signed 2013 UEFA Champions LeagueTM finalists Borussia Dortmund and bolstered its player portfolio with Sergio Agüero, Cesc Fàbregas, Mario Balotelli, Radamel Falcao, Olivier Giroud and Yaya Touré amongst others; PUMA is defining itself as the clear number three football brand.

Bjoern Gulden, Chief Executive Officer for PUMA said: “Arsenal have been a key strategic target for PUMA for a number of years now. Through a clear commercial vision, a well-defined sports marketing strategy and a relentless enthusiasm within the PUMA organisation, we’re proud to have signed this partnership with a truly global football club. As we enter a new era in our company history, Arsenal represents a major commercial and marketing opportunity to reinforce PUMA’s credibility as a global sports brand, and we have full confidence the plans in place to activate this partnership will have a significant global impact.”

Ivan Gazidis, Chief Executive Officer at Arsenal Football Club said: “We are excited to be partnering with PUMA, a company whose football heritage and record of innovation have a strong affinity with our own. This represents another important step forward in Arsenal’s progression on and off the pitch.”

Imagery and further assets can be downloaded from the PUMA Press Centre: about.puma.com/en/Newsroom

Media Contacts:

PUMA
Tim Stedman, International PR, PUMA
+49 151 1474 3148
tim.stedman@puma.com

Arsenal
Mark Gonnella, Communications Director
+44 207 704 4010
mgonnella@arsenal.co.uk

Katie Baldwin, Senior PR Manager
+44 207 704 4010
kbaldwin@arsenal.co.uk

CONFIDENT THAT NEW STRATEGIC DIRECTION “FOREVER FASTER” WILL INITIATE TURNAROUND

2013 Fourth Quarter Facts

• Consolidated sales at € 698 million, a currency adjusted decline of 4.7%
• OPEX improve for the fourth consecutive quarter, down 4.8% against the same quarter last year
• EBIT before special items of € 1.1 million
• Special items of € 129 million booked, as indicated last November, consisting of mostly non-cash effective impairments
• EPS declines to € -7.71 due to impact of special items

2013 Full Year Facts

• PUMA’s full year consolidated sales are in line with guidance, declining by 3% currency adjusted to around € 3 billion
• Gross profit margin decreases to 46.5%
• Solid OPEX reduction: The Transformation and Cost Reduction Program drives the OPEX down 6.9% year on year
• Improved working capital position, led by strong focus on inventories and receivables management, resulting in a € 37 million improvement in free cash flow
• EBIT before special items reaches € 191.4 million
• EPS declines to € 0.36 due to impact of special items

Key sales figures at a glance

Bjoern Gulden, Chief Executive Officer of PUMA SE: “2013 has been a challenging year for PUMA and there is no doubt that we have issues in terms of lack of brand heat, commercial products and desirable distribution. Nonetheless, PUMA is a great brand and with our new brand positioning as the Fastest Sports Brand in the World, we have a clear vision of where we want to go. “Forever Faster” is not only our new brand statement, it is also our new mindset. PUMA is about fast products, fast athletes, fast designs and fast decision making. With the re-signing of Usain Bolt, and signing of Arsenal FC and Mario Balotelli, we further demonstrate that we are a true sports brand. Together with our great assets and new creative agency, we will launch our new campaign to the consumers in Q3/2014 which is fueled by PUMA’s biggest media investment in the last decade. This is not a quick fix, but 2014 marks the start of the turnaround”.

Fourth Quarter 2013

2013 trends reflected in fourth quarter sales performance

Group sales in the fourth quarter of 2013 remained under pressure with sales declining 4.7% currency adjusted and 13.2% in Euro terms from € 805 million to € 698 million. This drop was driven mainly by weakening currencies in Japan, Russia, Turkey and various countries in Latin America.

In the EMEA region, sales declined by 7.6% currency adjusted to € 226 million as economic conditions across most of Europe remained challenging. Solid sales growth in Russia and Turkey was not enough to offset weaker performances in Western and Southern European countries.

Revenues in the Americas region decreased by 3.5% currency adjusted to € 268 million, where solid performances in the USA and Canada were offset by decreases in Latin America. Mexico and Chile in particular declined on high comparables after strong performances last year.

Sales in the Asia/Pacific region decreased by 2.8% currency adjusted to € 205 million. While India continued to grow across multiple categories (Running, Training/Fitness), the rest of the region performed either at or slightly below last year’s levels.

In terms of segments, PUMA’s Footwear sales in the fourth quarter declined by 12.9% currency adjusted to € 291 million as pressure continued across most categories. Apparel sales fell slightly by 1.1% currency adjusted to € 284 million. Accessories sales improved by 10.6% currency adjusted to € 123 million.

Special items booked in the fourth quarter

PUMA’s gross profit margin declined from 44.6% to 43.2% in the fourth quarter of 2013. This was mainly due to selective discounting to clean up inventory and FX impacts. Footwear gross profit margin decreased from 41.8% to 39.5%. Apparel margins fell from 46.6% to 44.7% and the margin for Accessories rose from 48.0% to 48.4%.

Operating expenditures continued to decline further, thanks to the positive impact from the measures implemented in the ongoing Transformation and Cost Reduction Program. As a consequence, OPEX was reduced by 4.8% from € 322 million to € 306 million in the quarter. Despite the continuous reduction in OPEX, the decline in sales combined with the lower gross profit margin led to a decrease in EBIT (before special items) to € 1.1 million.

As announced with the third-quarter results in November last year, PUMA booked € 129 million of special items in the fourth quarter, consisting mostly of non-cash effective impairments of goodwill and trademarks as well as costs related to the strategic initiatives. Those include the centralization of PUMA’s international product functions from London and the intended centralization of Global and European Retail operations from Switzerland to its Herzogenaurach headquarters as well as the closure of the PUMA Village development center in Vietnam.

As a result, PUMA’s quarterly Operating Result (EBIT) declined to € -128 million and earnings per share fell to € -7.71.

Full Year 2013

PUMA’s full year sales declined 3% currency adjusted

Consolidated sales were in line with guidance for 2013 and declined by 3.0% currency adjusted and 8.7% in Euro terms to around € 3.0 billion. Sales in the EMEA region decreased by 4.4% currency adjusted to € 1.22 billion, where weak French and Italian markets were partially offset by a strong performance in the United Kingdom. In the Americas, sales decreased slightly by 0.7% currency adjusted to € 1.06 billion. In Asia/Pacific, sales fell by 4.0% currency adjusted to € 711 million as declines in Korea and Oceania could only be partially offset by increases in India.

Performances by segment varied. Footwear sales declined by 8.6% currency adjusted to € 1.37 billion in 2013. Sales in Apparel fell slightly by 1.2% currency adjusted to € 1.06 billion. Sales in Accessories continued to increase by 9.7% currency adjusted to € 549 million.

Sales growth continued in PUMA’s Retail Business

In line with the Transformation and Cost Reduction Program, unprofitable PUMA Stores were closed, while new stores with a particular focus on profitable new locations in emerging markets were opened. PUMA’s full year retail sales rose by 5.6% currency adjusted to € 623 million in 2013, equal to 20.9% of total sales.

Gross Profit Margin declines

PUMA’s full year gross profit margin declined from 48.3% to 46.5%, driven by Footwear gross profit margin, which declined from 46.5% to 43.7%. Looking to other categories, Apparel margins fell from 49.8% to 48.3% and margins in Accessories decreased slightly, from 50.5% to 49.8%. The reasons for the decline were increased discounting to clean up inventory, negative hedging/foreign exchange impacts and an unfavorable shift within the product and regional mix.

Transformation and Cost Reduction Program continues to improve efficiencies

PUMA continued to implement the Transformation and Cost Reduction Program throughout 2013. As a result, the company has become more efficient. PUMA’s European operations have been streamlined by consolidating 23 countries into seven areas. Furthermore, and in line with the above, six warehouses were closed in Europe in 2013. PUMA has continued to optimize the retail portfolio as outlined previously by closing 73 of the originally planned 91 stores, with the remainder to be closed during 2014. PUMA has cancelled product categories like Rugby in the northern hemisphere and Sailing that were not viable or were no longer part of the company’s core categories. The related sponsorships have been discontinued. As a consequence of these consistent efforts PUMA was able to drive down the full year OPEX, which improved by 6.9% from € 1.31 billion to € 1.22 billion.

Operating Result (EBIT) before special items weakens

The continued OPEX improvement was not enough to fully offset the decline in sales and gross profit margin. PUMA’s EBIT before special items declined from € 291 million to € 191 million for the full year, equivalent to 6.4% of sales.

Special Items

PUMA booked € 129 million in special items during the fourth quarter. The majority of the special items consist of the impairment of non-current assets, in particular goodwill and trademarks, and are non-cash effective. Other items included one-time costs associated with the strategic initiatives of the new Management team, such as the closure of the PUMA Village development center in Vietnam as well as the relocation of PUMA’s international product functions from London and the intended centralization of Global and European Retail operations from Switzerland to its Herzogenaurach headquarters.

Operating Result including special items (EBIT)

As a result, PUMA’s Operating Result including special items (EBIT) for the full year declined to € 63 million, equivalent to 2.1% as a percentage of sales.

Financial Result For the full year, PUMA’s financial result was equal to € -8.7 million, deriving mainly from foreign currency fluctuations throughout the year.

Net Earnings / Earnings per share decline

Full year consolidated net earnings fell from € 70 million in 2012 to € 5 million in 2013, with earnings per share declining from € 4.69 to € 0.36.

Net Assets and Financial Position

Working Capital position continues to improve

The Group’s working capital declined by 15.3% from € 624 million to € 528 million as result of the strong focus on inventories and receivables. Inventories decreased 5.7% from € 553 million to € 521 million at the end of 2013 and trade receivables declined by 16.5% from € 507 million to € 423 million, reflecting PUMA’s ongoing strong balance sheet management.

Cashflow / Capex

PUMA’s Free Cashflow improved from € -8 million at the end of 2012 to € 29 million at the end of 2013. This was due to lower Working Capital requirements, reduced Capex and the lower payments for acquisitions compared to last year.

Net Cash Position

PUMA’s year end Net Cash Position remained stable at € 361 million compared to last year’s € 363 million.

Dividend

The Administrative Board will propose a dividend of € 0.50 per share for the financial year 2013, the same as for 2012, at the Annual General Meeting on the 13th May 2014.

Strategy Update

In line with PUMA’s new mission to become the Fastest Sports Brand in the World, PUMA has continued to streamline its business operations to make processes faster and more efficient. In order to accelerate PUMA’s development process, the new management team took the decision last year to divest from the PUMA Village development centre in Vietnam, and also to relocate its international product functions from the London office to its headquarters in Herzogenaurach. In addition, PUMA decided to establish an end-to-end process responsibility for the whole product development process under the umbrella of PUMA Group Sourcing. Moreover, PUMA intends to relocate the PUMA Global and European Retail Headquarters as well as European E-Commerce, which are currently based in Oensingen in Switzerland, to Herzogenaurach. Through this move, the alignment and collaboration with key functions like Global Merchandising, the Business Units and the European Region will improve significantly and become faster.

With the intended closure of the Oensingen (Switzerland) office, we will also finalize the integration of PUMA Schweiz AG into the DACH area. In the future, the Swiss office will focus on Sales, with all other functions provided by the DACH Area headquarters in Herzogenaurach.

Brand and Marketing Update

In December, we announced a new long-term partnership with international football icon Mario Balotelli. As another key signing for PUMA, Mario will be a major force in driving the brand’s performance message. With his passion, speed, agility and power he is a perfect fit to support PUMA’s repositioning as a true Sports Brand and the company’s mission to be ‘Forever Faster’.

Ahead of the 2014 FIFA World Cup in Brazil, where PUMA will have a strong on-pitch presence of eight teams (Italy, Switzerland, Ghana, Cameroon, Ivory Coast, Algeria, Uruguay and Chile), we recently revealed our latest product innovation in football: PUMA’s revolutionary evoPOWER boot. Inspired by the freedom of movement of barefoot kicking, evoPOWER features the most advanced PUMA technologies to date and is scientifically proven to be the world’s most powerful football boot. The evoPOWER will be worn on pitch by Cesc Fàbregas, Marco Reus, Mario Balotelli, Yaya Touré, Dante and many others.

As PUMA enters a new era as the Fastest Sports Brand in the world, we have sealed a long-term partnership with Arsenal Football Club, representing the biggest deal in both PUMA’s and Arsenal’s history. This clearly underlines our positioning as the global number three brand in football. Effective 1st July 2014, PUMA will not only become Arsenal’s official kit partner but has also acquired wide-ranging licensing rights to drive mutual growth across all football markets.

Highlights in other PUMA categories included Usain Bolt’s fifth World Athlete of the Year award at the 2013 IAAF World Athletics Gala in Monaco, the contract extension with Swedish-born professional golfer Jonas Blixt and the signing of the Australian golf legend and Hall of Famer Greg Norman, who will once again be a global brand ambassador for Cobra PUMA Golf, collaborating on product development and sporting Cobra clubs at a variety of appearances, tournaments and events.

Outlook for the Financial Year 2014

In 2014, PUMA will reposition itself to again become a true Sports Brand. PUMA is excited to launch its new brand statement “Forever Faster” through a global media campaign in the Autumn/Winter season 2014 – the company’s biggest media campaign in the last decade. This re-ignition of the brand heat was kicked off by extending the partnership with the fastest athlete on the planet, Usain Bolt, and was further fuelled by signing one of the world’s top football clubs, Arsenal FC, and Italian superstar Mario Balotelli. Moreover, in the coming year of football, 25% of all participating teams at the World Cup in Brazil will be wearing PUMA jerseys. With the signing of iconic sports marketing assets and the launch of high performance product innovations like the world’s most powerful football boot evoPOWER, and with more to come, PUMA proves and will continue to demonstrate its competence as a true Sports Brand in 2014 and will also leverage its clear positioning in sports to sell sports-inspired lifestyle products.

In addition to increasing brand heat and upgrading the product engine, PUMA’s priorities in 2014 are to replace lower tier distribution with higher tier distribution and to improve the relationships with our retailers in order to drive sales quality and sell-through. In close collaboration with key accounts, PUMA will build dedicated product and marketing programs which will help to regain shelf space and improve sell-through. While weaker first-half sales are expected, the rebuilt trust of PUMA’s retail partners will start to materialize in the form of increased orders for the second half of the year. With the support of the Forever Faster media campaign and the partnership with Arsenal, the second half of the year is expected to compensate for the shortfall in sales experienced in the first half of the year.

PUMA therefore expects its net sales to be flat in 2014, but with improved revenue quality. Assuming minor input price inflation and stable currencies, the gross profit margin is expected to improve slightly due to sourcing improvements and favorable changes in the product mix.

Driven by strong marketing investments in media and sports assets, although combined with strict ongoing control of other costs, PUMA’s OPEX will increase. Management therefore anticipates an EBIT margin before special items of approximately 5% of net sales in 2014.

However, due to the special items booked in 2013, management expects a significant improvement in the net profit margin, which is expected to come in at approximately 3.0% of net sales. (2013: 0.2%).

2014 will be a turnaround year for PUMA where the brand will be re-established in the market place and bring PUMA back to a path of profitable and sustainable growth in the mid-term.

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.