PUMA AG announces its consolidated financial results for the 4th Quarter and Financial Year 2004

Highlights Q4:

• Consolidated sales up 20%
• 51.9% strongest gross profit margin in a fourth quarter
• EBT above expectation
• EPS reaches 2.31 € versus 1.51 € in last year’s quarter

Highlights FY 2004:

• Worldwide brand sales exceed € 2 billion for the first time
• Consolidated sales up almost 23% currency adjusted
• Gross profit margin reaches new record at 51.9%
• EBT once again on record level with €371 million
• EPS increases 43% to 16.06 €
  
  

Outlook:

• Management expects new record in sales and further increase in earnings
• Future orders increase by nearly 18% currency adjusted
  
  

In the 2004 financial year, PUMA continued the positive development of previous years and further expanded its position as a desirable Sportlifestyle brand. The financial targets set at the beginning of the year were significantly exceeded. The financial year closed with double-digit growth for the sixth consecutive year. For the first time, worldwide brand sales reached the € 2 billion mark with a currency-adjusted increase of over 21%. Consolidated sales rose 23%. In addition to the strong sales growth, the gross profit margin likewise climbed to a new record high of nearly 52%. Pre-tax profit reached € 371 million, growing faster than sales for the sixth consecutive year. Earnings per share jumped from € 11.26 to € 16.06. At year-end, PUMA’s share was listed at € 202.30. This corresponds to another significant value increase of 45% compared to the end of the previous year.

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

Highlights Q1:

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

Outlook 2005:

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

Sales and Earnings Development January through March 2005

Global brand sales up over 18%

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

Consolidated sales almost 14% above last year

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Phase IV Guidance

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

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

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

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

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

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

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

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

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

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

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

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

PUMA AG announces its consolidated financial results for the 2nd Quarter and First Half-Year of 2005

Highlights Q2:

• Strong performance from top to bottom
• Consolidated sales with 13% increase better than expected
• Gross profit margin above 53%
• EBIT margin at 21%
• EPS increase from 3.28 € to 3.64 €

Highlights H1:

• Global brand sales reached almost €1.2 billion
• Consolidated sales total €892
• Gross profit margin with 53% at record level
• EBIT margin at 24%
• EPS jumps from 8.28 € to 9.32 €

Outlook 2005:

• Future orders increase by 7% to €772 million marking the 38th consecutive quarter of order increase
• Management raises sales guidance from mid to high single digit growth to up to 10%
• 5th consecutive year of record earnings expected for 2005

Sales and Earnings Development

Global brand sales reach almost €1.2 billion in six months

PUMA’s worldwide branded sales, including consolidated and license sales, totaled €529 million during Q2 thus marking a 14.3% increase on a currency-neutral basis or 13.9% in Euro. During the first six months branded sales grew 16.4% currency-neutral. In Euro terms, growth was 15.2% to €1,168 million. Footwear sales rose currency-neutral by 16.3% (in Euro 14.5%) to €676 million, Apparel by 14.5% (12.7%) to €393 million and Accessories by 34.4% (32.6%) to €99 million.

Consolidated sales better than expected

In Q2, consolidated sales grew 13.2% currency-neutral or 12.3% in Euro reaching €395 million and well ahead of expectation. Within the segments Footwear rose by 16.7% currency-neutral (in Euro 15.7%), Apparel increased 1.7% (1.6%) and Accessories jumped 23% (22.5%). Currency-neutral sales for the first six months grew by 13.4%, also significantly better than expected. In Euro terms, sales increased 12.1% to €892 million. Footwear was up 14.1% currency-neutral (in Euro 12.8%) to €603 million, Apparel 7.3% (6.7%) to €224 million and Accessories 27.9% (26.4%) to €65 million.

Gross profit margin on a record level

In Q2, gross profit margin reached strong 53.2% compared to 51% last year, representing a further margin improvement of 220 basis points. Thus, the gross profit margin remained on a record high for the first six months, jumping from 51.4% to 53.3%. By segments, the Footwear margin increased from 52.8% to 53.6%. The strongest performance was in Apparel where margin was up 460 basis points to 53.4%. Accessories also showed impressive margin growth from 46.9% to 50.3%.

Strong performance in licensed business

The licensed business grew a strong 19.1% to €134 million in Q2, and 26.7% after six months to €276 million. A particularly strong performance in the Asian region contributed to the high double-digit growth. As a consequence, royalty and commission income was up 28.7% to €13.8 million in Q2 and 20.5% to €26.3 million in the first half.

SG&A increase due to extension of own retail business

Total SG&A expenses increased in the second quarter from €112 million to €137 million or from 31.7% to 34.5% of sales. In the first six months, total expenses increased by 19.9% to €278 million. As a percentage of sales, SG&A went up from 29.1% to 31.1%. The increase was mainly due to the extension of the own retail business. In the first half, Marketing/Retail expenditures accounted for €128 million or 14.4% of sales versus 12.5% last year. Product development and design expenses rose by 8.8% to €19 million, or 2.1% of sales. Other selling, general and administrative expenses were up 14.1% to €130 million, or from 14.3% to 14.6% as a percentage of sales. Due to the higher investments in retail operations, depreciation increased by 31.1% to €6 million in Q2 and by 27.2% to €11 million respectively.

High profitability continues

EBIT climbed from €74 million to €82 million in Q2 and from €191 million to €213 million in H1 leading to an EBIT margin of 20.7% and 23.9% respectively. In Q2, pre-tax profit increased stronger than expected by 10.5% to €84 million and by 12.3% to €216 million in H1. The tax rate declined from 30.9% to 29.3% this year. As a result, net earnings rose from €52 million to €59 million in Q2 and from €132 million to €150 million in H1. This yields in a net margin of 14.9% similar to last years second quarter and to 16.8% versus 16.6% after six months.

Earnings per share During the second quarter, earnings per share jumped 11% to €3.64 or €3.61 diluted. Year-to-date earnings per share rose by 12.6% to €9.32 and to €9.24 diluted.

Net Assets and Financial Position

Equity ratio greater 60%

The capital structure improved once again. Despite the 36.6% increase in the balance sheet total to €1,187 million, equity ratio was up to a new record level of 63.2%. This development underscores the strong financial position of the PUMA Group.

Net cash position increased

Cash and cash equivalents jumped from €225 million to €370 million and bank debts increased from €14 million to €37 million. Therefore, net cash position rose with a strong double-digit growth of 58.2% from €210 million to €332 million.

Regional expansion affected working capital

Inventories increased by 15% to €242 million and receivables were up by 26.2% to €319 million. Total working capital at the end of June increased 57% and amounted to €320 million compared with €204 million last year. The increase was mainly due to the regional expansion during the first half of 2005.

Capex/Cashflow

Capex increased as anticipated from €16 million to €38 million. Tax payments rose from €28 million to €65 million. Due to these effects as well as the inventory shift from December to January cash-outflow was €8 million in first half of 2005. At the end of June, PUMA held 685,000 own shares or 4.1% of total share capital.

Regional Development

From a regional perspective sales in the EMEA-region (Europe, Middle East, Africa) reached €240 million in Q2, a slight increase versus last year but significantly better than the order books at end of Q1. Year to date, sales increased by 5.5% (in Euro terms 5.8%) to €598 million. This represents 67% of total consolidated sales. The gross profit margin increased further by 210 basis points and reached very strong 55.3% compared to 53.2% last year. Orders on hand at the end of June accounted for €486 million, a decline of 7.9% compared with last year, which can be attributed to higher than expected sales in Q2 as well as a delayed order income due to Spring/Summer sales meetings in some key countries taking place one month later than last year. Adjusted by these effects, the order book would stand at around –3%.

The Americas reported sales of €108 million in Q2, a currency-neutral growth of an impressive 55.1% (in Euro 51.2%). This represents a further acceleration since the beginning of the year as well as since Q1. First six months sales increased currency-neutral 46.3% (40.2%) to €203 million. The region now accounts for 23% of consolidated sales. The gross profit margin in this region improved by 160 basis points during the first six months and reached 48.2% compared with 46.6% last year. Orders on hand increased significantly and reached €205 million with a currency neutral growth of 63.1% or 66.3% in Euro terms. The US market achieved a remarkable sales growth of 42.4% in Q2 and 36.3% in H1. The order backlog improved significantly by the end of June, reaching US$ 211 million or an outstanding growth rate of 60.8%.

In Q2, the Asia/Pacific region increased sales currency-neutral by strong 16.2% and by 14.3% in Euro terms to €47 million. After six months the sales growth was currency-neutral 9.7% (in Euro 6.1%) and reached in total €91 million. This region contributed 10% to consolidated sales. The gross profit margin improved significantly from 47.6% to 51.3%. Like-for-like, orders on hand were up 3.9% (in Euro 1.6%) totaling €81 million.

Outlook 2005

Total orders on hand as of June 30, 2005 increased currency-neutral by 6.2% marking the 38th consecutive quarter of order increase. In Euro terms, total orders were up by 6.7% to €772 million. The orders are mainly for delivery in the second half of 2005.

By segment, Footwear orders were up by 6.9% currency-neutral (in Euro 7.4%) to €536 million. Apparel orders increased to €195 million, an increase of 4.6% (5.1%) and Accessories totaled €40 with a growth of 5% (4.8%).

Based on the strong results achieved so far this year as well as the order outlook, management raises sales guidance from previously mid to high single digit growth to up to 10%. Gross profit margin is also expected to reach the higher end of the guidance between 51% and 52%, or even possibly above. SG&A expenses are forecasted slightly above 31% on sales and EBIT margin should be clearly above 20%. With a tax rate of approximately 29%, management expects net earnings to come in between €264 million and €274 million. This translates to significantly above €16 per share or a mid to high single digit increase on a like for like basis. All in all 2005 should once again set new records in sales as well as become the 5th consecutive year with record earnings.

Due to the expected results for 2005, PUMA will close Phase III one year ahead of the original plan as all set targets should be significantly surpassed. Since the beginning of the long-term oriented business phases in 1993 this would add up to sales growing eleven years in a row as well as nine years delivering double digit growth and record earnings.

Jochen Zeitz, CEO: “We are very pleased with the first half of 2005. PUMA continues to record strong growth and shows an acceleration in our order book versus last quarter, while our expanding gross margins reflect the strong desirability of the PUMA brand. With this momentum we are now able to successfully conclude our current Phase III one year ahead of schedule and turn our focus to Phase IV of the company development.”

The aim of this partnership is to jointly explore the tremendous potential of the PUMA brand with its high brand awareness in the critical China market as well as to further enhance its already solid position in Hong Kong.

Jochen Zeitz, CEO and Chairman of PUMA AG: “Swire Pacific has successfully gained initial traction for PUMA in its markets and they possess very valuable market know-how that, combined with our knowledge, will allow us to further accelerate our rapid expansion in this highly important area. Our goal is to at least quadruple sales in the next 5 years and to firmly establish PUMA in the top 3 of the industry’s global brands in China.”

Christopher Pratt, Executive Director of Swire Pacific’s Trading and Industrial Division: “This is a very exciting development. PUMA is a leading edge Sportlifestyle brand which has seen remarkable global growth in the past years. The new venture has set ambitious targets for growth in the China market in the coming years and I have every confidence they will be achieved.”

PUMA AG announces its consolidated financial results for the 3rd Quarter and First Nine Months of 2005

Highlights Q3:

• Another record quarter in sales and earnings
• Branded sales rise more than 18% and consolidated sales more than 16%
• Gross profit margin above 52%
• Strong EBIT margin remains above 24%
• Net earnings increases by almost 12% and EPS reaches 5.70 € versus 5.14 €

Highlights First Nine Months:

• Global brand sales strongly up by over 16%
• Growth in consolidated sales accelerates to almost 14%
• Gross profit margin remains around 53%
• EBIT margin at 24%
• >EPS jumps from 13.42 € to 15.02 €

Outlook 2005:

• Future orders up by more than 10% marking the 39th consecutive quarter of order increase
• Management now expects double-digit sales growth and confirms the 5th consecutive year of record earnings for 2005

Strong start into 2006: Q1 better than expected

Highlights Q1:

• Strong start into 2006: Q1 better than expected
• Consolidated sales rise almost 30%
• Gross profit margin remains above 52%
• EBIT margin above 20% despite strong brand investments
• EPS at €5.83 compared to €5.68

Outlook 2006:

• Further improvement in orders, now up by 35% to €1.1 billion, EMEA up double-digit y-o-y
• Management increases sales and earnings guidance for 2006

Sales and Earnings Development

Global branded sales rise more than 15%

PUMA’s worldwide branded sales, which include consolidated and license sales, rose 15.3% to €737 million or currency adjusted by 11.8%. Footwear sales improved by 12.5%, Apparel by strong 19.1% and Accessories by almost 20%.

Consolidated sales rise almost 30%

In Q1, consolidated sales grew 29.5% (currency adjusted 25.4%) to €643 million. Hence, sales developed significantly better than expected with positive contributions from almost all product segments and regions. As already announced, due to the license take-backs and new Joint Ventures the consolidated business was extended to Japan (Apparel), China/Hong Kong, Taiwan China, Canada and Argentina effective January 1, 2006. Furthermore, the fully owned subsidiaries in Dubai and India started their operating activities as of this year. Like-for-like, organic growth contributed a strong 10,7% and new consolidations 18.8% to the overall performance. In total, Footwear was up 18% (currency adjusted 14%) to €399 million, Apparel by a healthy 63.1% (59.8%) to €202 million and Accessories by 21.6% (19.3%) to €42 million.

Licensed business up almost 10% on a like-for-like basis

On a like-for-like basis, the licensed business increased by 9.9% to €87 million. However, due to the take-backs of the aforementioned license markets, total licensed sales declined by 34.1% versus prior year. Based on the remaining licensed business, the company realized a royalty and commission income of €8.5 million in the first quarter versus €12.5 million in the prior year.

Gross profit remains above 52%

In Q1, gross profit margin stood better than expected at 52.4% compared to 53.4% last year, despite the planned and implemented shift in the regional and product mix. The Footwear margin decreased from 53.6% to 52% and Apparel from 53.4% to 52.9%. Accessories margin increased from 51.1% to 53.4%.

SG&A expenses at 32%

Due to strong brand investments and regional expansion, total SG&A rose 45.4% to €205 million. As a percentage of sales, the cost ratio increased as expected from 28.4% to 31.9%. The increase was mainly driven by strong Marketing/Retail expenses.

Marketing/Retail expenses rose as expected by 60.8% to above €100 million, representing a cost ratio of 15.6% compared to 12.6% last year. Product development and design expenses increased by almost 39% to €13 million and, as a percentage of sales, from 1.8% to 2%. Other selling, general and administrative expenses were up 32.4% to €92 million and remained around last year’s level at 14.3% of sales.

EBIT margin above 20%

  Despite the strong brand investments EBIT, margin reached 20.6% and remained on a very high level. In absolute amounts EBIT increased by 0.5% to €132 million versus the intitial expectation of an earnings decline. Due to a strong increase in the financial results, pre-tax profit grew by more than 1% to €134 million. The tax ratio remained at 29.5 % and was unchanged versus last year’s quarter.

Earnings per share above last year

In Q1, net earnings grew by 2.5%. In absolute amounts, net earnings accounted for €93 million versus €91 million last year. The net return amounts to 14.5% versus 18.3%. Earnings per share reached €5.83, a 2.7% increase to last year’s €5.68. Diluted earnings per share were calculated at €5.78 compared with €5.63.

Net Assets and Financial Position

Equity ratio above 60%

Despite a 42.9% increase in the balance sheet total to €1,552 million, the equity ratio further improved. The end of March equity ratio reached 61.4% compared with 58.2% last year.

Solid net cash position

Cash and cash equivalents grew from €323 million to €354 million and bank debts increased from €22 million to €68 million. Therefore, net cash position slightly decreased from €302 million to €286 million due to the strong investments, the take-backs and Joint Ventures inseveral markets.

Working capital

Inventories increased by 49.2% to €283 million and receivables were up by 34.4% to €476 million. Total working capital at the end of March increased 59.5% and amounted to €440 million compared with €276 million last year. The increase was mainly due to the regional expansion. Excluding the regional expansion inventories increased by 17% and receivables by 21%.

Capex/Cashflow

Capex increased from €21 million to €59 million, whereby €42 million are related to acquisitions. Tax payments rose from €21 million to €34 million. Due to these effects as well as the higher working capital due to the regional expansion, free cashflow was €-135 million compared to €-25 million last year.

Share Buyback

PUMA purchased another 50,000 of its own shares during the first three months. At quarter-end, a total of 940,000 shares were held as treasury stock, accounting for 5.6% of total share capital.

Regional Development

Change in regional mix

Due to the license take-backs and Joint Ventures, the regional mix changed significantly resulting in a more balanced regional business portfolio. Now, EMEA accounts for 52.8% (last year 72.2%), Americas for 28.3% (19%) and Asia/Pacific for 18.9% (8.8%).

Sales in the EMEA-region reached €339 million versus €359 million last year. The anticipated decline was due to the strong top-line performance in Q1 2005, hence leading to strong comp basis. Gross profit margin reached 55.2% compared to 55.6% last year. However, orders for EMEA now report a better than expected increase of nearly 12% to €600 million. All countries in this region contributed to the improvement.

Sales in the Americas continued to grow strongly. Currency adjusted, Q1 sales jumped 75.2% and in Euro terms by 93.1% to €182 million. The growth was due to a particularly strong organic business as well as the consolidation of Canada and Argentina. Gross profit margin increased from 46.1% to 47.5%. The order volume was up by a strong 87.8% to €310 million, or currency neutral by 71.6%.
In the US market, sales increased like-for-like by 62.4% to $157 million and end-of-quarter orders were up by strong 45.9%.

In the Asia/Pacific region sales increased by a strong 177.6% (currency-adjusted 179.5%) to €122 million. The organic growth contributed 17.7% to the overall performance and the remaining growth was contributed by the regional expansion. The gross profit margin increased by 100 basis points to 51.9%. As of March 31, 2006, orders on hand were up 114.6% (currency adjusted 115%) and totaled €187 million.

Outlook 2006

Future orders now up 35%

Consolidated orders further improved and increased by 35% (currency adjusted 31.3%) to €1,097 million. This represents the 41st consecutive quarter of order increase. In terms of product segments, Footwear increased by 29.8% (25.5%) to €720 million, Apparel 49.1% (46.4%) to €309 million and Accessories by 34.6% (32.1%) to €68 million.

Management increases sales and earnings guidance for FY2006

Due to a further improvement in the order position for the EMEA region and the overall strong performance in Q1, Management once again raises its sales forecast and now expects a growth of up to 35% for FY 2006, reaching almost €2.4 billion. The gross profit margin should range between 50% and 51%, given the anticipated shift in regional and product mix. The takeover of the license markets into the consolidated business will lead to a corresponding reduction in royalty and commission income. Selling, general and administrative expenses will be impacted in particular by disproportionately high marketing expenses relating to the World Cup and other PUMA campaigns, as well as by planned expansion of the Group’s retail operations and higher expenses for infrastructure. Overall operating expenses are assumed to rise to approximately 35% of sales. The operating margin is expected to decrease versus the prior year to approximately 15% of sales as a result of the brand-building investments in 2006 and conversion of the license businesses into consolidated business. Based on the higher top-line growth, Management also increases operating profit expectation to now around €360 million. The tax rate is expected to be below the original guidance and should be between 30% and 31%. As a result, net earnings are now expected to be only high single-digits below the previous year’s level. Thus, in absolute figures, net earnings are expected to significantly exceed the original expectations for 2006 communicated with the Phase IV strategy mid last year.

Jochen Zeitz, CEO: “We are pleased to have catalyzed our Phase IV growth plans with a Q1 above our expectations and the smooth integration of former licensee partners into our consolidated business. With the World Cup and other exciting initiatives still to come in 2006, we remain very positive in the outlook for the remainder of the year.“