Highlights Second Quarter:

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

Highlights January-June:

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

Outlook 2010:

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

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

Sales and Earnings Development

Global Brand Sales

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

Consolidated Sales

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

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

Gross Profit Margin

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

Operating Expenses

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

EBIT

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

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

Financial Result/Income from associated companies

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

Net Earnings

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

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

Net Assets and Financial Position

Equity

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

Working Capital

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

Capex/Cashflow

In the first six months, the company invested € 23.3 million versus € 27.4 million last year. The reduction in capital expenditure together with a solid improvement in working capital led to a strong increase in PUMA’s free cashflow before acquisitions of € 77.3 million from € 45.1 million last year. An outflow of € 101.9 million versus € 61.0 million last year related to acquisitions.

Cash Position

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

Share Repurchase

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

Other Events

Spain Arbitration Ruling

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

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

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

Outlook 2010

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

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This document contains forward-looking information about the Company’s financial status and strategic initiatives. Such information is subject to a certain level of risk and uncertainty that could cause the Company’s actual results to differ significantly from the information discussed in this document. The forward-looking information is based on the current expectations and prognosis of the management team. Therefore, this document is further subject to the risk that such expectations or prognosis, or the premise of such underlying expectations or prognosis, become erroneous. Circumstances that could alter the Company’s actual results and procure such results to differ significantly from those contained in forward-looking statements made by or on behalf of the Company include, but are not limited to those discussed be above.

The more flexible and international structure of a one-tier European Corporation permits that Jochen Zeitz – in his new role as Executive Chairman of the Board – can continue to be responsible for PUMA’s next phase of its corporate development while also providing PPR’s future Sport & Lifestyle Division with his extensive and unique expertise in the sportlifestyle sector. PUMA will become a core brand within this new division.

In the role of Head of PPR’s Sport & Lifestyle Division, Zeitz will act as a member of PPR’s Executive Committee. Within the framework of the Division’s strategy developed by PPR, Jochen Zeitz will be responsible for setting up the organisation and will be in charge of operations in order to build a portfolio of strong, complementary brands within the sport and lifestyle arena in the future. These brands, and PUMA in particular, will benefit from international growth opportunities and new synergies derived from complementary consumer universes and pooled resources. Zeitz will assume his new responsibilities as Head of PPR’s Sport & Lifestyle Division after the search for a CEO of PUMA has been completed.

“I strongly believe in PUMA’s future potential as an innovation leader and icon for the sport and lifestyle industry backed by its strong brand. I am confident that Jochen Zeitz, together with the new CEO in charge of the PUMA brand, will bring PUMA to the next step. We will now look into expanding our sport and lifestyle investments in the coming years with PUMA as a core brand in our future portfolio”, François-Henri Pinault, Chairman and CEO of PPR, said.

The new management structure shall facilitate the implementation of PUMA’s five-year strategic company plan. The conversion into an SE will not infringe PUMA’s working arrangements and will proceed in close coordination with the respective employee representation bodies. PUMA’s five year strategic plan 2011-2015 will be released together with PUMA’s third-quarter results on October 26.

With immediate effect Jochen Zeitz will also assume the newly created role of Chief Sustainability Officer (CSO) at PPR. This measure not only underlines PPR’s strong commitment to Sustainability but is also a clear acknowledgement and is an opportunity to expand on PUMA’s pioneering role in this area, taking into account PUMA’s strong environmental and social commitment under the umbrella of PUMAVision.

“I will – in cooperation with the Personnel Committee – personally conduct the search for the future CEO of the PUMA brand” said Jochen Zeitz. “While all necessary preparations will be taken, I will remain CEO of PUMA. When the new CEO is appointed, I will ensure a seamless handover and implementation of the company’s five-year strategic plan which we have been diligently working on during the course of this year. After then 18 years as CEO of PUMA, I look forward to evolving my role within PUMA as well as the PPR Group and am passionate to further pursue responsible business opportunities within a sustainable social and environmental context.”

PUMA AG has initiated a comprehensive special audit by an independent auditing firm, appointed a new local management in Greece and put a halt to further irregularities. According to the preliminary findings of the audit, it is suspected that the Greek joint venture partner, along with members of the Greek local management, has committed a series of criminal acts.

As most of the irregularities have occurred prior to the fiscal year 2010, PUMA will have to restate its prior-year financial statements in line with IAS 8, i.e. adjust the 2009 comparative figures in the 2010 financial report. In total, the maximum extraordinary write-off effect should not exceed pre-tax 115 million Euros and does not affect the cash position. An estimated amount of up to 15 million Euros should affect fiscal year 2010 with the remainder applying to previous years.

Due to these irregularities and the general market situation in Greece, the company is further planning a restructuring in Greece that could lead to additional one-time charges of approximately 15 million Euros in the fourth quarter. As a consequence, it is likely that one-time charges of up to 30 million Euros will be booked in the fourth quarter of fiscal year 2010. A note to financial statements will be included in the third quarter results to be released on 26 October 2010.

PUMA AG’s Management and Supervisory Board have resolved to assert all claims according to civil and criminal law against the Greek Joint Venture minority partner and members of the local Greek management.

Highlights Third Quarter:

• Consolidated sales at € 784 million, up 16.5% in Euro terms
• Gross profit margin remains at 50%
• Operating result before special items improves by 15.3% to € 113 million
• EPS rise from € 4.50 to € 5.16
• Usain Bolt remains long-term brand asset for PUMA
• PUMA AG to take over full control in China and Hong Kong
• Irregularities discovered in Greece

Highlights January-September:

• Consolidated sales increased 5.7% in Euro terms
• Gross profit margin slightly down versus last year at 50.8%
• Operating result before special items improved by 7.7% to € 296.1 million
• EBT before tax improved by 83.2% to € 292.0 million
• EPS increased to € 13.65 from € 7.42 last year
• Continued improvement in equity ratio

Outlook 2010:

• Based on a strong sales performance in the third quarter as well as an improvement in the overall outlook for the fourth quarter, Management now expects sales to be up in the mid to high single-digit for the full year 2010.
• Management expects an increase in EBIT before special items versus last year.
• Extraordinary one-time charge from PUMA Hellas S.A. affects results for 2010 as well as previous year.

Jochen Zeitz, CEO: “Unfortunately, the discovery of irregularities committed by our Greek Joint Venture Partner is casting a shadow on our solid financial performance in the quarter. However, we are pleased to see that PUMA’s operational performance improved significantly in the third quarter as we post a strong rise in sales and operating results. We expect the sales outlook to further improve for the fourth quarter and as a result we raise our forecast of growth to mid to high single digits for the full year 2010. Looking further ahead, we are positive about our capabilities and game plan to execute and deliver on our new “Back on The Attack” Plan 2015 with a potential of reaching four billion Euros. We have prepared our organization and are aligning our processes accordingly to execute our new plan. We are confident and optimistic about the large opportunities to further tap into our brand’s potential growth drivers that we will reveal today during our investor day presentations at the PUMAVision Headquarters in Herzogenaurach.”

Sales and Earnings Development

Global Brand Sales

Sales under the PUMA brand, which include consolidated and license sales, improved by 15.1% to € 828.6 million in the third quarter. In total, the quarter marked a very solid performance against the background of a still challenging global economic environment.

After nine months, global brand sales increased 4.8% and were close to € 2.2 billion despite a flat first half of the year.

Consolidated Sales

Currency-adjusted consolidated sales were up 6.5% to € 784.3 million in the quarter, which represents an increase of 16.5% in Euro terms. Footwear rose 6.0% currency-neutral to € 417.2 million, and Apparel sales improved by 1.3% to € 263.8 million. Accessories sales reported a significant improvement of 25.0% to € 103.3 million, which derives from organic growth as well as first time consolidations. In terms of regions, the Americas grew strongest with 26.7% currency-neutral while APAC advanced 1.4% currency-adjusted. EMEA softened slightly 1.1%.

After nine months, consolidated sales were up 5.7% in Euro terms and flat (-0.1%) currency-neutral at € 2,082.8 million. Despite a challenging market environment, sales in the Americas region jumped a strong 24.9 % with North- and Latin America reporting double-digit sales growth. Sales performance in the EMEA region was impacted by unfavorable market conditions in Southern and Eastern European countries and, therefore, posted a currency-adjusted decrease of 5.6%. Sales in Asia/Pacific were up 1.5% in reported terms but decreased 7.9% due to the strong fluctuations in currencies. In terms of segments, Footwear stood at € 1,117.2 million, representing a currency-neutral decline of 2.7% and Apparel sales softened slightly by 0.8% to € 699.2 million. Accessories sales, however, grew by 14.6% to € 266.4 million.

Gross Profit Margin

In the third quarter, PUMA’s gross profit margin decreased by 180 basis points to 50%. The decline was caused by price sensitivities in the EMEA region as well as changes in the regional as well as product mix.

After nine months, the gross profit margin stood at 50.8% after 51.4% last year. PUMA’s margin in Footwear remained flat at 50.2% while Apparel was at 51.6% after 52.2%. Accessories posted 51.1% compared to last year’s 54.8%. This decrease stems from the impact of the newly acquired and integrated Cobra Golf business carrying a low margin as the former owner, Acushnet, provided sales services outside the US until end of August.

Operating Expenses

The OPEX increased by 10.4% to € 283.6 million in the quarter. This rise is caused by the extension of the scope of business after Cobra Golf was included as well as currency impacts. On a comparable basis, operating expenses were flat, which is reflected in an improved OPEX ratio of 36.2%.

In the first nine months, operating expenses rose by 3.1% to € 776.4 million, which translates into an improved cost ratio of 37.3% versus last year’s 38.2%. The cost savings are a direct result of PUMA’s restructuring and reengineering program, which will be finalized during the fourth quarter 2010.

EBIT

In the third quarter, PUMA’s operating result before special items improved significantly by 15.3% to € 113.0 million versus € 98.0 million last year. As a percentage of sales, this translates into an operating margin of 14.4% compared to 14.5% last year.

As of September 30th, 2010, the operating result before special items rose 7.7% from € 275.1 million to € 296.1 million. The operating margin stood at a solid 14.2% compared to 14.0% last year.

Financial Result/Income from Associated Companies

The financial result shows a negative € 1.9 million for the third quarter and was flat versus last year.

For the first nine months, the financial result improved from € -5.6 million to € -4.6 million, while € 0.5 million of income was generated by associated companies.

Net Earnings

In the third quarter, PUMA’s pre-tax profit (EBT) improved by 15.7% to € 111.1 million after € 96.0 million. This led to an improvement in net earnings, which increased € 9.7 million or a strong 14.2% to € 77.6 million. Earnings per share went up to € 5.16 in the quarter compared to € 4.50 last year.

In the first nine months, earnings before tax stood at € 292.0 million versus € 159.4 million, an increase of 83.2%, while net earnings improved by 83.5% to € 205.5 million from € 112.0 million. Consequently, earnings per share jumped from € 7.42 to € 13.65. The operational tax ratio came in at 29.6% after being at 27.9% last year.

Net Assets and Financial Position

Equity

As of September 30th, 2010, the balance sheet total climbed by 18.4% to € 2,436.5 million. This increase was mainly caused by the inclusion of Cobra Golf as well as currency effects. The equity ratio improved from 59.1% in the previous year to 60.1% this year.

Working Capital

In reporting terms, inventories grew by 27.1% to € 452.9 million while – on a comparable basis – inventories rose by 6.3% to support the expected sales increase in the upcoming quarter. Due to the increase in sales in the quarter, accounts receivables were up by 14.2% (4.7% on a comparable basis), reaching € 606 million. Working capital totaled € 594.2 million (ex acquisition € 518 million) compared to € 523.3 million last year.

Capex/Cashflow

The company invested € 35.5 million in the first nine months into property, plant and equipment versus € 40.8 million last year. An outflow of € 102.4 million (last year: € 75.8 million) is related to acquisitions.

The free cashflow before acquisitions reached € 46.4 million compared to € 145.1 million last year.

Cash position

Total net cash position at the end of September increased to € 360.7 million from € 339.5 million last year, underlining PUMA’s strong financial position.

Share Repurchase

PUMA AG continued its share buyback program in the third quarter and, as of the reporting date, the company purchased 102,219 of its own shares. This equals 0.7% of the share capital and reflects an investment of € 23,4 million.

Other Events

Spain Arbitration Ruling

As announced within the 2010 half-year year financial statements, PUMA AG has filed a cancellation recourse against the arbitration ruling regarding the PUMA trademark rights in Spain. As of the reporting date, legal council and advisers continue to believe that a favourable outcome in this case is more likely than not.

PUMA takes over full control of Business in China as of January 1, 2011

PUMA AG will acquire the remaining 49% of the shares of its long-term Chinese joint venture Liberty China Holding Ltd, effective 1 January 2011, to be in full control of its business activities in China and Hong Kong. Liberty has been a Joint Venture between PUMA and Swire Resources Ltd., of which PUMA has owned 51%. Under the Liberty holding, PUMA China Ltd. and PUMA Hong Kong Ltd. have been responsible for the distribution of PUMA products in China for several years and will continue to do so.

Through the full take over, PUMA’s position in China will be further strengthened and maximized, making sure that the Sportlifestyle Company taps into the enormous potential that the largest market in Asia offers. PUMA will be in sole charge of driving its growth strategy to capture all opportunities on the Chinese market as part of PUMA’s five-year growth strategy. The impact on the consolidated financial statements will be insignificant, as the joint venture had already been consolidated within PUMA AG at 100% since its inception

Irregularities committed by Greek Joint Venture partner

As already mentioned in our ad hoc release on 25. October 2010, irregularities were discovered at PUMA’s Joint Venture ‘PUMA Hellas S.A.’ in Greece, which will affect PUMA’s consolidated financial statements for the full year 2010 and require a restatement of the 2009 figures in the 2010 statements. All necessary measures have been initiated and are on-going. For further information and details please refer to the ad hoc release of Monday, 25 October 2010, on www.about.puma.com

Outlook Full Year 2010

The second half of the year continues to show solid sales growth which should more than offset the flat performance in the first half of the year. Therefore, management now expects full year consolidated sales to grow at a mid to high single digit rate. Considering slight changes in the gross margin, operating result before special items should improve compared to last year.

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This document contains forward-looking information about the Company’s financial status and strategic initiatives. Such information is subject to a certain level of risk and uncertainty that could cause the Company’s actual results to differ significantly from the information discussed in this document. The forward-looking information is based on the current expectations and prognosis of the management team. Therefore, this document is further subject to the risk that such expectations or prognosis, or the premise of such underlying expectations or prognosis, become erroneous. Circumstances that could alter the Company’s actual results and procure such results to differ significantly from those contained in forward-looking statements made by or on behalf of the Company include, but are not limited to those discussed be above.

PUMA achieved a company score of 86 points, while the average score in the industry amounted to 54 points. The scores reflect the company’s performance across economic, environmental and social criteria compared to its industry peers and range on a scale from 0 to 100%. SAM, an investment boutique focused exclusively on Sustainability Investing, together with Dow Jones Indexes, rated PUMA’s economic dimension at 86, the environmental dimension at 100 while the social dimension was given a score of 80 in the year 2010.

Through PUMAVision, PUMA’s sustainability concept, the Sportlifestyle company has launched numerous initiatives to drive PUMA to cleaner, greener, safer and more sustainable systems and practices. PUMA’s longstanding work and efforts to improve social, labour and environmental standards throughout its operations date back to 1999. From that time, the company has continuously incorporated environmentally-friendly practices to reduce its impact on the planet and realized several successful large-scale initiatives such as sourcing of raw materials through the Cotton made in Africa campaign to building the capacity of its suppliers as well as the offsetting the company’s CO2 emissions as of 2010.

Highlights January – March 2011

• Consolidated sales increased by 13.2% in Euro terms to a record high of € 773 million

• Gross profit margin back to a strong, sector leading 52.4%

• EBIT 2.1% above last year at € 111.0 million

• Net earnings improved by 7.1% to € 77.7 million

• EPS increased to € 5.17 from € 4.81 last year

Outlook 2011:

• Based on the success of the past quarter and the positive business development, Management targets the milestone of € 3 billion in sales for the full year 2011.

• To support business growth and the “Back on the Attack” growth strategy, investments in marketing, sales, product development as well as process optimization will continue to affect the OPEX ratio.

• Despite expected moderate price increases in sourcing costs related to raw materials and wages for the 2nd half, Management still foresees continuous improvement of net earnings by mid single-digits.

Jochen Zeitz, CEO: “The first quarter performance was a strong start to 2011 and our Back on the Attack growth plan, as PUMA managed to generate strong sales growth. We were even able to mitigate the negative impact we saw from the disastrous events in Japan last month as our Asian/ Pacific region contributed with an increase in sales to the overall solid company performance. For the full year 2011 we continue to expect an increase in net earnings in the mid single-digit percentage range with sales targeting the € 3 billion milestone for the first time. PUMA continues to execute on the Back on the Attack company growth plan and performs at levels consistent with reaching the long-term target of € 4 billion in sales by 2015. The recent approval of our shareholders to convert PUMA from the German Aktiengesellschaft PUMA AG to the European Corporation PUMA SE will provide our company with a broader international profile, helping to tap into the many opportunities the international Sportlifestyle market offers.

Sales and Earnings Development January-March 2011

Global Brand Sales

Worldwide PUMA brand sales – comprised of consolidated and license sales – rose by 12.5% in Euro terms (8.8% currency adjusted) to € 811.1 million from € 720.8 million last year.

Consolidated Sales

PUMA’s first quarter consolidated sales reached € 773.4 million, rising 9.3% in currency adjusted terms and an impressive 13.2% in Euro terms when compared to the first quarter of 2010. This represents PUMA’s best ever first quarter. All product segments showed considerable growth: Footwear up 6.8% currency adjusted at € 417.2 million, Apparel up 2.2% at € 241.8 million, and Accessories posting a superb 42.4% increase at € 114.4 million. The strong performance in the Accessories product segment was also supported by the inclusion of Cobra Golf into the consolidation.
In regional terms, sales in EMEA grew by 4.4% currency adjusted to € 374.5 million, Asia/ Pacific posted a gain of 6.9% to € 163.9 million and PUMA continued its excellent performance in the Americas with sales growing by 19.9% to € 235.1 million.

Gross Profit Margin

The gross profit margin remained at an industry leading 52.4%, which is testament to PUMA’s continuing efforts to maximize returns and efficiencies. The Footwear segment had a gross profit margin of 51.3%, up from 50.9%. Apparel stood at 53.7%, down slightly from 53.9%. Accessories were at 54.0%, also down slightly from 55.7%.

Operating Expenses

Operating expenses before special items rose by 21.6% to € 298.6 million during the first quarter of 2011. As a percentage of sales, this represents an increase from 35.9% to 38.6% compared to last year. Reasons for this rise include currency fluctuations, as well as additional investments in Marketing, Sales and Product Design to fuel our “Back on the Attack” growth plan.

EBIT

Operating profit came in as expected, improving to € 111.0 million from € 108.7 million. This represents 14.4% of consolidated sales, down slightly from a rate of 15.9% at this time last year.

Financial Result / Income from associated companies

The financial result improved from € -1.4 million to € -0.2 million, including € 0.9 million from our investment in Wilderness.

Earnings before Taxes

PUMA’s EBT rose from € 107.3 million to € 110.8 million.
Tax expenses declined from € 34.8 million to € 33.1 million and the tax rate dropped from 32.4% to a normalized tax rate of 29.9%.

Net Earnings

Consolidated net earnings increased to € 77.7 million from € 72.5 million in 2010, an increase of 7.1%. Earnings per share rose from € 4.81 to € 5.17, and diluted earnings per share rose from € 4.80 to € 5.15.

Net Assets and Financial PositionEquity

Total assets (as of 31st March 2011) increased by 11.3% from € 2.068,5 million to € 2.303,2 million. This rise stems mainly from the expansion of the consolidated group, as Cobra Golf is included this year. The equity ratio declined slightly from 61.2% to 60.6%. However, in absolute figures, shareholders’ equity increased by 10.3% to € 1.395,9 million from € 1.265,7 million. As a consequence, PUMA’s balance sheet remains very strong.

Working Capital

PUMA’s overall Working Capital went up by 13.9% to € 598.1 million. On the asset side, inventories went up by 24.9% from € 371.8 million to € 464.3 million, supporting our expected sales growth in the upcoming quarters and trade receivables also increased, up 11.0% from € 520.4 million to € 577.8 million. Considering the change in scope and the strong increase in sales during the quarter, the trade receivables developed positively.
On the liabilities side, trade liabilities rose 25.8% from € 270.4 million to € 340.2 million.

Cashflow/Capex

The Free Cashflow (before acquisitions) came in at € -113.5 million versus € -71.6 million last year. The additional outflow was caused mainly by the increase in working capital and tax payments.
The payments for acquisitions are related to the purchase of the remaining shares of PUMA China, as announced in our third quarter results last year.
For Capex, the company spent € 10.8 million versus € 7.7 million in last year’s first quarter. The increase derives from investments in the improvement of organizational processes and IT, which are necessary components of our growth strategy.

Cash Position

Total cash (as of 31st March 2011) dropped by 29.1% to € 300.8 million from € 424.2 million last year. Bank debts were reduced by 25.9% from € 52.3 million to € 38.8 million. As a result, the net cash position decreased 29.6%, from € 371.9 million to € 262.0 million.

Share buyback

PUMA continued with its share buy back program and purchased 51.720 shares for € 10.9 million during the first quarter.

Other Events

PUMA AG converts to a Societas Europaea (SE)

As previously reported, PUMA’s shareholders returned a positive vote in April’s Annual General Meeting on the conversion from a German ‘Aktiengesellschaft’, or AG, to a European ‘Societas Europaea’, or SE. The conversion is expected to be completed latest by July.

Outlook 2011

As the first quarter visibly demonstrates, PUMA’s “Back on the Attack” strategy is already taking effect, with higher investment in marketing and product being offset by significant increases in sales with a stable gross profit margin. Taking into account the risk of higher input prices in the form of raw materials and wages for the second half of the year, PUMA’s outlook for 2011 continues to be favourable. We continue to expect an improvement in net earnings in the mid single digit range for 2011 whilst targeting the € 3 billion milestone in sales.

As part of PUMA’s long-term sustainability plan, the analysis was commissioned in recognition that producing and selling PUMA products has a wide impact along the entire supply chain. By identifying the most significant environmental impacts, PUMA will develop solutions to address these issues, consequently minimizing both business risks and environmental effects. PUMA’s E P&L statement provides an unprecedented and detailed level of understanding, sets a new benchmark in corporate environmental reporting and will hopefully serve as a catalyst for others to join an industry-wide engagement.

The first results of PUMA’s E P&L have revealed that the direct ecological impact of PUMA’s operations translates to the equivalent of €7.2 million of the overall impact valuation. An additional €87.2 million falls upon four tiers along the supply chain. In total, this leads to an overall environmental impact of GHG and Water Consumption of PUMA’s operations and the supply chain of €94.4 million. By putting a monetary value on the environmental impacts, PUMA is preparing for potential future legislation such as disclosure requirements. These costs will serve as a metric for the company when aiming to mitigate the footprint of PUMA’s operations and all supply chain levels and will not affect PUMA’s net earnings.

“The E P&L statement is a milestone in PUMA’s mission to become the most desirable and sustainable Sportlifestyle company in the world. It is an essential tool and a shift in how companies can and should account for and, ultimately, integrate into business models the true costs of their reliance on ecosystem services and PPR HOME will encourage and collaborate with the industry to adopt this tool,” said Jochen Zeitz, Chairman and CEO of PUMA and Chief Sustainability Officer PPR. “Gaining a better understanding of the source of the natural goods and services PUMA relies on and the declining availability of the basic resources required for our business growth, will help PUMA build a more resilient and sustainable business model and ultimately better manage its impacts on the environment.”

PUMA chose GHG emissions and water for the first analysis in their E P&L development as they were considered to be the most significant environmental impacts. The economic valuation of these impacts (please refer to www.about.puma.com for details of methodology) by PwC (GHG emissions) and Trucost (water use), estimated a value per tonne of CO2e at €66 and an average water value of €0.81/ m3. The analysis found that:

• Including the full supply chain, the overall impact was valued at €94.4 million in total for 2010 with greenhouse gases equating to €47.0 million and water to €47.4 million.

• Of the total, PUMA’s operations accounted for 15% of the overall GHG emissions analysed, and 0.001% of water consumption. This is the equivalent to €7.2 million of the overall valuation.

• The remaining GHG and water consumption – the equivalent of €87.2 million – fell upon its entire supply chain.

“Fundamentally, this analysis is about risk management for the environment, and for business, because you cannot separate the two,” said Alan McGill, partner, PwC Sustainability and Climate Change. “This is a first for a company to measure and value the impact of its business in this way and gives PUMA a unique and challenging insight into their supply chain. It’s a game–changing development for businesses to integrate environmental issues into their current business model like this, because it provides a basis for embedding their reliance on ecosystem services into business strategy. Tackling the impacts will need concerted efforts by the businesses in their supply chain as PUMA shares a common but differentiated responsibility with other brands at the production facilities,” he continued.

Analyses of the water and GHG impacts were performed across PUMA’s value chain, including the operations of raw material and product suppliers as well as logistic services, which PUMA has limited control over.

• Tier 4: Raw material production, such as cotton farming, oil drilling, etc.

• Tier 3: The processing of raw materials, such as leather tanneries, chemical industry, oil refining

• Tier 2: Outsourced processes such as embroiders, printers, outsole production

• Tier 1: The manufacturing of its products

• PUMA core operations: Design, logistics services, warehousing, head office functions and retail

Biggest Environmental Impact Derives from Raw Material Production

The analyses have shown that the biggest environmental impacts in the value chain occur, not through PUMA’s core operations but at the level of its Tier 4 suppliers, where raw materials are derived from natural resources, such as the cultivation and harvesting of cotton, cattle ranching for leather, and natural rubber production. This part of the supply chain accounts for 36% of the total GHG (€16.7 million) and 52% of water consumption (€24.7 million); indicating that the most water intensive activity in the production of a t-shirt occurs at the initial step – the cultivation of cotton.

This analysis provides the first results of the first stage in a three-stage process to consider PUMA’s and its supply chain’s environmental, social and economic impacts, ultimately leading to the development of an all encompassing Environmental, Social and Economic Profit and Loss Account.

The final results completing Stage 1 – to be released in autumn this year – will see the inclusion of additional environmental key performance indicators such as acid rain and smog precursors, volatile organic compounds, waste and land use change, completing the valuation of the significant environmental impacts in PUMA’s value chain.

As the impacts of PUMA’s operations not only refer to the natural environment, Stage 2 will require collaboration with other corporate and civil society stakeholders in tackling the complexities of social factors in sustainability such as fair wages, safety and working conditions, enabling the development of an Environmental and Social P&L account.

Stage 3 will complete the other side of the equation, moving to the equally complex area of valuing the social and economic benefits from PUMA’s operations through the creation of jobs, tax contributions, philanthropic initiatives and other value-adding elements. These benefits will then be offset against the environmental and social costs calculated in Stages 1 and 2, hence completing PUMA’s Environmental, Social and Economic P&L statement. Stage 3 will require a strong collaborative effort to develop robust valuation methodologies and approaches. This challenge will have resonance with the corporate sector as more and more companies actively undertake similar analyses throughout their supply chains.

“Companies that understand their dependence on natural resources along the value chain are well placed to manage underlying risk from rising raw material costs and scarcity of supply issues”, said Dr. Richard Mattison, CEO of Trucost. “Companies are already facing increasing input costs as a result of rising commodity prices related to climate change and water availability. PUMA is now positioned to address these challenges in advance and we have helped provide them with management tools to minimise risk, hedge against uncertainty and identify new opportunities to optimise the sustainability of its products.”

PUMA’s Response to the Results to Minimize Risks

To reduce the impact, PUMA will start by using these findings to better direct its sustainability efforts and initiatives. PUMA’s sustainability scorecard, which was introduced in early 2010 and sets targets such as 100% sustainable packaging and 25% reductions of carbon, energy, water for 2015, has already begun to address the environmental impacts at PUMA’s operations and Tier 1 supplier levels. PUMA will examine how to adjust the targets set in its current sustainability scorecard and look for solutions along the entire supply chain.

In order to target solutions that address the levels of the greatest impact from tier two to four, PUMA and PPR HOME will look to play a catalytic role in raising awareness that the current business model is outdated and needs decisive reforms, forging partnerships and collaborations to explore new and innovative ways to differentially attribute the responsibilities and equitably share the costs of these, while building capacity at suppliers’ factories and developing new materials and products.

Raising Awareness

PUMA and PPR HOME are sharing the results of the E P&L with other industry players and corporations to leverage adopting a new business model that takes the costs of using natural resources within business operations into account.

This analysis will also help to better assess the relative environmental impacts of sourcing from different countries and regions. Down the line it will allow PUMA to improve supply chain management and reduce supply chain risks.

Developing synergies and partnerships

PUMA’s majority shareholder, PPR, has recently joined the World Business Council for Sustainable Development (WBCSD), which could provide an appropriate platform for constructive debate on the issue of differentiated responsibility and equitable sharing of the costs of environmental impacts while exploring new business models to help reduce these costs in future. For many years, PUMA has been engaging with other global initiatives, industry dialogues and corporate alliances to address sustainability challenges such as: the UN Global Compact, the Fair Labor Association, the Carbon Disclosure Project and, most recently, the 2 Degree Initiative and PPR’s luxury brands have been long-term members of organizations such as the Sustainable Luxury working group (set up by the Business for Social Responsibility) and the RJC (Responsible Jewellery Council).

PUMA will soon join the Sustainable Apparel Coalition, an industry-wide group of leading apparel and footwear brands, manufacturers, experts and the United States Environmental Protection Agency to reduce the environmental and social impacts of apparel and footwear products. This underpins PUMA’s effort to increase collaborations with its industry peers to address the environmental impacts occurring at all shared levels of the supply chain.

Building Capacity to Create Snowball Effect

PUMA will focus even more attention on capacity building projects in collaboration with other industry players to help Tier 1 supplier management identify weak points in their operations by offering training programs and by enabling them to make improvements, independently. For more than six years, PUMA has carried out capacity building projects together with other industry brands to improve environmental and social conditions at Tier 1 supplier factories.

Over the past decade PUMA has ensured that Tier 1 suppliers are committed to adhere to PUMA’s environmental and social standards. The company will now require Tier 1 suppliers to guarantee that all of their suppliers in the next tier down follow the same guidelines. Through this it is hoped that over time all suppliers will comply with PUMA’s Code of Conduct and Environmental, Social and Health & Safety standards.

Innovating for the Development of Sustainable Materials and Products

By 2015, 50% of PUMA’s international collections will be manufactured according to PUMA’s internal sustainability standard, PUMA S-Index, using more sustainable materials such as recycled polyester, that take into account the enormous environmental impact of raw material production. PUMA will investigate the opportunity to address the impact of Tier 1 to Tier 4 suppliers through the innovative development of more sustainable materials and products.

In his previous role, Franz Koch has been in charge of Global Strategy for PUMA and therefore the long-term strategic group development. He was instrumental in developing PUMA’s growth strategy “Back on the Attack 2011-15” with its clear mission for PUMA to become the most desirable and sustainable Sportlifestyle company.

Besides Franz Koch (CEO), PUMA SE’s Managing Directors are Klaus Bauer (Operations), Stefano Caroti (Commerce), Antonio Bertone (Marketing) and Reiner Seiz (Supply Chain). No longer part of the management team is Melody Harris-Jensbach. The separation has been mutually agreed between the company and herself. The Product function that Harris-Jensbach has held, will not be filled with a managing director role in the foreseeable future, and will report directly to Koch.

The European Corporation is a legal form for companies that operate in several member states within the European Union. It facilitates cooperation across borders and is therefore – due to the international orientation of PUMA as a brand and company – a logical step to support the strategic growth of the Sportlifestyle company in the next phase of its development. More than 90 percent of PUMA’s staff of about 9700 is employed outside of Germany, whilst equally 90 percent of PUMA’s sales are generated abroad.

With the structure of PUMA as an SE, participation by PUMA’s employees will gain more importance. In addition to the national works councils in PUMA’s subsidiaries, PUMA SE will also have an SE works council – a panel of around 30 employee representatives from 26 countries. The SE works council will observe the rights of European Employees on information and consultation at PUMA SE. Furthermore, the employees will be represented on the Administrative Board of PUMA SE by three employee representatives from Europe.

The transformation of PUMA into a European Corporation was welcomed by the grand majority of shareholders. At PUMA’s 2011 Annual General Meeting in April, 99.82 percent of shareholders had voted in favour of the resolution of transforming PUMA AG into an SE, as suggested by the Board of Management and the Supervisory Board.

The shares of PUMA SE, which have been traded at the stock exchange since 1986, will remain
listed on the Xetra as well as Frankfurt floor trade under WKN 6969603/ISIN DE0006969603.

Highlights Second Quarter 2011

• Consolidated sales increased by 14.1% currency adjusted to a record second quarter high of € 674 million

• Gross profit margin holding up well at 49.1% despite pressure from external factors

• EBIT 3.2% above last year at € 55.4 million

• Net earnings up 10.6% to € 37.6 million

• EPS up to € 2.51 from € 2.26 last year

Highlights First Half 2011

• Consolidated sales up by 11.5% currency adjusted to a record € 1.45 billion

• Gross profit margin still a strong 50.9%

• EBIT 2.5% above last year at € 166.4 million

• Net earnings improved by 8.2% to € 115.3 million

• EPS increased to € 7.69 from € 7.07 last year

Outlook for the Financial Year 2011

• PUMA’s continued business success over the past six months confirmed the Management view that the 3 billion milestone in sales for the full year of 2011 is attainable.

• Sourcing cost increases caused by rising prices for commodities and higher wages in Asia will continue to impact gross margins. PUMA will continue to support business growth and the “Back on the Attack” growth strategy; thus investments in marketing, sales, product development as well as process optimization will continue to affect overall expenses.

• Although increases in sourcing costs and continued investments in brand and product will impact overall operational results, management foresees continuous improvement of net earnings by mid single-digits for the full year.

“I could not have asked for a better start to my new position as PUMA’s CEO than to announce the best second quarter in PUMA’s history in terms of sales, a performance that underlines our ambition to achieve our sales target of 3 billion Euros for this year,” said Franz Koch, CEO of PUMA SE. “The investments into our core markets, in line with our Back on the Attack company growth strategy, have started to pay off and we will continue to strengthen our brand and product in order to become the most desirable and sustainable sportlifestyle company in the world.“

PUMA’s Q2 Sales Record underpinned by Running Category and strong Growth in Latin America and Asia

With the global economic recovery having gained strength, the Sportlifestyle company PUMA posted a strong second quarter growth in consolidated sales of 14.1% currency-adjusted and 9.4% in Euro terms to € 673.5 million compared to last year, representing PUMA’s best ever second quarter sales performance.

PUMA Faas is building up momentum

With all product categories contributing to this increase, Footwear rose 16.2% currency adjusted to € 352.6 million, Apparel went up 10.7% to € 224.3 million and Accessories again posted an eye catching 15.0% increase to € 96.7 million. In particular, PUMA’s Running category grew significantly, boosted by the ongoing top seller PUMA Faas, a lightweight neutral racer for tempo runs and racing. The shoe is constructed with BioRide Technology, an integrated system that provides more natural running rhythm and enhanced speed. Another Performance category that performed well in the second quarter was Cobra-PUMA-GOLF as a result of synergies arising from the Cobra Golf integration.

In the Teamsport category, PUMA claimed another champion title with Uruguay winning the Copa America for the 15th time, building on their fourth place at the 2010 FIFA World Cup. The team also achieved their second-ever qualification for the FIFA Confederations Cup to be held in Brazil in 2013. Uruguay beat Paraguay 3-0 in Sunday’s final, becoming the most successful team in the tournament’s history. The FIFA Women’s World Cup in Germany provided another great opportunity, where PUMA further strengthened its brand awareness in Women’s Football. PUMA sponsored eight PUMA players on the German team as well as international stars from England, Canada, Norway, Sweden, France and the USA as well as brand ambassador Marta of Brazil, who all sported the PUMA Speed v1.11 football boot. In fact, the v1.11 scored most goals in the tournament, 16 in total.

Over the first half of this year sales across all categories increased in pace. Footwear sales were up 9.9% (10.9% currency adjusted), Apparel sales were up 7.0% (6.1% currency adjusted) and Accessories were up 29.4% (28.3% currency adjusted) partly due to the full year effect of Cobra golf.

Latin America and Asia remain the main growth areas

In regional terms, PUMA continued its excellent performance in the Americas with sales growing by 16.9% currency-adjusted to € 226 million. Latin America and Asia excelled with a strong double-digit rise with Lifestyle and PUMA’s Motorsport categories being the main growth drivers.

Sales in EMEA grew by 9.2% currency-adjusted to € 290 million with satisfying performances in both Western and Eastern Europe. Spain advanced significantly after a PUMA subsidiary was opened in the second quarter of last year. Women’s Fitness (Bodytrain) increased by double-digit rates.

Asia/Pacific posted a gain of 20.1% currency adjusted to € 158 million, as sales in Japan have recovered much faster than anticipated in the aftermath of the earthquake disaster, posting double-digit growth. PUMA’s Lifestyle (PUMA Social), Running (Faas and light-weight gear) and Fitness (Bodytrain) categories drove the overall growth.

Half-year EMEA sales are up 7.3% (6.5% currency adjusted), the Americas are up a satisfying 14.3% (18.4% currency adjusted) and Asia/Pacific is up an impressive 16.5% (13.0% currency adjusted).

Gross Profit Margin at industry-leading levels

The gross profit margin remained at an industry leading 49.1%, which is testament to PUMA’s continuing efforts to maximize returns and efficiencies.

The Footwear segment had a gross profit margin of 48.1%, down from 50.7%. Apparel stood at 48.9%, down from 52.1%. Both segments were impacted by slightly higher sourcing costs as well as negative currency impacts from hedging. Accessories were at 53.3%, a sharp jump from 46.3% which is based on last year’s impact of the Cobra takeover.

Overall the half year gross profit margin is down slightly to 50.9% after 51.5% last year. The Footwear margin is currently at 49.8%, Apparel at 51.4% and Accessories at 53.7%.

Operating Expenses

Operating expenses rose by 10.3% to € 279.9 million during the second quarter of 2011. As a percentage of sales, this represents a slight increase from 41.2% to 41.6% compared to last year. For the full year to the end of June 2011, OPEX rose by 15.9% to € 578.5 million. Increases in expenditure arose from our continued investments outlined in our 5-year growth plan and the full year effects caused by the extension of the scope of consolidation with Cobra and PUMA Spain now fully included.

EBIT

Operating profit came in as expected, improving to € 55.4 million from € 53.6 million. This represents 8.2% of consolidated sales, down slightly from a rate of 8.7% at this time last year. On a half year basis EBIT is up slightly to € 166.4 million.

Financial Result / Income from associated companies

The financial result declined from € -1.3 million to € -1.6 million, however, the half year number improved from € -2.7 million last year to € -1.8 million.

Earnings before Taxes

PUMA’s second quarter EBT rose from € 52.3 million to € 53.8 million. They also rose from € 159.6 million to € 164.6 million on a half yearly basis. Quarterly tax expenses declined from € 18.2 million to € 16.2 million and the tax rate dropped from 34.9% to a normalized tax rate of 30.0%.

Net Earnings

Consolidated net earnings increased by 10.6% to € 37.6 million from € 34.0 million in 2010. Earnings per share rose from € 2.26 to € 2.51, and diluted earnings per share were up from € 2.25 to € 2.51.

For the first half of 2011, net earnings rose by 8.2% to € 115.3 million. EPS increased by 8.8% to € 7.69.

Net Assets and Financial Position

Equity

Total assets (as of 30th June 2011) grew by 2.6% from € 2,284.8 million to € 2,343.4 million. This rise is primarily attributable to an increase in non-current assets in the form of deferred taxes and non-current assets as a result of our ongoing capital investment program. The equity ratio rose from 58.6% to 59.4%. In absolute figures, shareholders’ equity increased by 4.1% to € 1,392.5 million from € 1,338.3 million. PUMA’s balance sheet remains strong.

Working Capital

PUMA’s overall Working Capital went up by 13.0% to € 509 million. On the asset side, inventories went up by 12.1% from € 453.1 million to € 508.0 million, supporting our continued and expected sales growth. Trade receivables also increased, up 5.0% from € 497.1 million to € 522.0 million. This again is an effect of our growth in sales compared to this point in time last year. On the liabilities side, trade payables rose 7.6% from € 395.4 million to € 425.3 million.

Cashflow/ Capex

The Free Cashflow (before acquisitions) came in at € -9.2 million versus € 57.2 million last year. The additional outflow resulted from tax payments and higher working capital needed as well as higher CAPEX. The payments for acquisitions are related to the purchase of the outstanding shares in our Chinese venture. For Capex, the company spent € 29.1 million versus € 18.5 million in 2010. The increase derives mainly from investments in the improvement of organizational processes and IT as well as in the expansion of our Retail store portfolio, which are necessary components of our growth strategy.

Cash Position

Total cash (as of 30th June, 2011) dropped by 21.6% to € 351.6 million from € 448.3 million last year. Bank debts were reduced by 41.2% from € 51.5 million to € 30.3 million. As a result, the net cash position decreased 19.0%, from € 396.8 million to € 321.3 million.

Share buyback

PUMA continued with its share buy-back program and purchased 72.853 shares for € 15.7 million during the second quarter. The company now holds 173.377 shares in total as treasury stock which equals 1.15% of the subscribed capital.

Other Events

PUMA AG converts to a Societas Europaea (SE)

With the completion of the transformation on July 25th,, 2011, Franz Koch has become Chief Executive Officer, with Jochen Zeitz taking over as Chairman of the Administrative Board of PUMA SE. At the same time, he will lead PPR’s Sport & Lifestyle Division. In this role, he will ensure PUMA SE’s continuous and strategic growth within the framework of the next phase of development and support the drive to sustainability as PPR’s Chief Sustainability Officer.

SPANISH Court Ruling

As already announced in an ad hoc release on 17th of June, 2011 the arbitration ruling of 2nd June, 2010 by a Spanish arbitration panel regarding the one-time payment of 98 million Euros has been repealed by the District Court of Madrid. PUMA is therefore no longer obliged to pay the amount of 98 million Euros.

Outlook for the Financial Year 2011

PUMA continues to target the € 3 billion sales mark for the full year which reflects a continuation of our first-half sales. There will, however, continue to be pressure on gross profit margins in the shape of higher raw material prices and Asian wage increases, although PUMA has thus far shown an ability to keep its gross profit margins at the highest level within the industry. Despite higher operating expenditures which are in line with the overall strategy, PUMA expects absolute net earnings to improve in the mid single digit range.

Highlights Third Quarter 2011

• Consolidated sales increased by 10.2% currency adjusted to € 841.6 million

• Gross profit margin remained at 50.0% despite volatile input prices

• EBIT improved by 1,8% to € 118.6 million

• Net earnings remained flat at € 81.7 million

• EPS are up to € 5.45 from € 5.43

• PUMA has signed football stars Agüero, Falcao and Fàbregas

Highlights First Nine Months of 2011

• Consolidated sales climbed 11.0% currency adjusted to € 2.3 billion

• Gross profit margin remained at a sector-best 50.6%

• EBIT rose by 2.2% to € 285.0 million

• Net earnings improved by 4.7% to € 197.1 million

• EPS increased from € 12.51 to € 13.15

Outlook for the remainder of the Financial Year 2011

• PUMA’s management reiterates that PUMA’s target is € 3 billion in sales for the full year.

• In light of PUMA’s “Back on the Attack” growth strategy, investments and expenses will remain at a high level, and gross profit margins will continue to be stressed based on procurement price volatilities.

• Management continues to foresee an improvement of net earnings in mid single-digits for the full year.

“PUMA posted a very solid sales performance for the fifth consecutive quarter,” said Franz Koch, CEO of PUMA SE.”This underpins our 5-year growth strategy, which is already delivering results. After a strong performance in the first nine months of this year, we are now approaching our sales target of € 3 billion for the full year, and despite continuing cost pressures we maintain our forecast of an improvement in net earnings in mid single-digits.“

Asia/Pacific and Latin America drive PUMA’s Sales Growth in the Third Quarter – Performance Business accelerating

PUMA’s third-quarter consolidated sales rose 10.2% currency adjusted and 7.3% in Euro terms to € 841.6 million compared to last year, representing the most successful quarterly performance in the firm’s history. Asia and Latin America provided the platform for these numbers, underpinning the excellent overall result with double-digit growth.

With all product categories contributing to this increase, Footwear rose 7.0% currency adjusted to € 431.1 million, Apparel went up 13.8% to € 294.7 million and Accessories climbed 13.9% to € 115.8 million.

PUMA’s Running category in particular grew significantly, boosted by Usain Bolt’s spectacular performances at the Track & Field World Championships in Daegu and by the light-weight concept which includes our best selling PUMA Faas range. The shoe is constructed with BioRide Technology which provides runners with a naturally responsive ride. PUMA’s Women’s Fitness category is growing strongly, a consequence of enhanced targeting of the female consumer demographic with PUMA’s Bodytrain concept. PUMA’s Sailing category also improved, as sales have been accelerating in the run-up to PUMA’s participation in the Volvo Ocean Race 2011-2012. Given the duration of this sailing marathon and in the light of our new extended range of outdoor products, PUMA expects the positive performance of its Sailing category to continue.

PUMA’s five-year growth plan “Back on the Attack” already yielding fruit

As previously detailed, PUMA is continuing to work on improving its performance categories without losing sight of its Sportlifestyle positioning as a brand. This was laid out in the company’s growth strategy one year ago, which focused on strengthening PUMA’s Sports Performance business alongside its lifestyle segment. To further boost PUMA’s brand visibility on international football pitches and underline our position as the No. 3 football brand, PUMA signed three of the world’s top football stars during the third quarter: Manchester City’s Sergio Agüero, Atletico Madrid’s Falcao and FC Barcelona’s Cesc Fàbregas.

PUMA also introduced its new football boot, the Powercat 12. These boots will be worn by Fàbregas, Nemanja Vidic of Manchester United and Gianluigi Buffon, goalkeeper of the Italian National Team, amongst others. This innovative boot features the new PUMA 3D DUO Power Shooting Technology, applied to the inside of the boot.

Cobra-PUMA-Golf also continues to perform well, where the 360 degree offering appeals to discerning consumers. PUMA also congratulates its brand ambassador and golf professional Lexi Thompson who, at 16 years of age, has become the youngest ever winner on the LPGA tour in America.

Asia/Pacific and Latin America remain the main growth areas in the quarter

In regional terms, PUMA continued its excellent performance in Asia/Pacific, with sales growing by 16.4% currency-adjusted to € 196.0 million. Light-weight Running gear such as the Faas range and Women’s Fitness products (Bodytrain) drove the overall growth in this region.

EMEA also performed well, posting an increase of 9.5% currency adjusted to € 410.6 million. Russia, Turkey, Spain and Germany in particular contributed to this performance.

Sales in the Americas grew by 6.7% currency-adjusted but were down 0.7% in Euro terms at € 235.0 million. Latin America delivered a remarkable top-line performance, reflecting broad-based double-digit growth across all countries in the region, while North America had to comp against strong double-digit growth numbers from the previous year.

Consolidated sales for the nine-month period climbed 11.0% currency adjusted (9.9% in Euro terms) to € 2.29 billion. EMEA sales rose 7.7% (7.6% currency adjusted), the Americas improved a satisfying 8.7% (14.2% currency adjusted) and Asia/Pacific climbed an impressive 16.4% (14.3% currency adjusted).

Nine-month sales across all product categories continued to climb. Footwear sales were up 7.5% (9.5% currency adjusted), Apparel sales increased 8.8% (8.9% currency adjusted) and Accessories grew 22.7% (22.8% currency adjusted), due in part to the full year effect of the Cobra golf acquisition last year.

Gross Profit Margin remains at industry-leading levels despite cost pressure

PUMA’s ongoing efficiency drive has resulted in a third quarter gross profit margin of 50.0%, which remains the industry leading number.

The Footwear segment had a gross profit margin of 49.8%, up from 49.7%. Apparel stood at 50.3%, up from 50.0%. Accessories were at 50.0%, a decline from 51.8% which can be attributed to higher procurement costs.

For the first nine months of 2011, gross profit margin is down slightly to 50.6% from 51.0% compared to last year. The Footwear margin is currently at 49.8% down from 50.4%, Apparel down from 51.9% to 50.9% and Accessories up from 51.2% to 52.4%.

Operating Expenses

Operating expenses rose by 9.7% to € 307.0 million during the third quarter of 2011. As a percentage of sales, this represents a slight increase from 35.7% to 36.5% compared to last year. For the full year to the end of September 2011, Operating expenses rose by 13.6% to € 885.5 million. Increases in expenditure arose from our continued investments outlined in our 5-year growth plan and the full year effects caused by the extension of the scope of consolidation with Cobra and PUMA Spain now fully included. The majority of those incremental increases went into Marketing, Product Design and enhancements in our supply chain.

EBIT

Operating profit improved to € 118.6 million from € 116.6 million in line with expectations. This represents 14.1% of consolidated sales versus 14.9% at this time last year. On a nine month basis EBIT was up 2.2% to € 285.0 million.

Financial Result / Income from associated companies

The financial result declined from € -1.4 million to € -2.1 million, however, the nine month number improved from € -4.1 million last year to € -3.9 million.

Earnings before Taxes

PUMA’s third quarter EBT rose from € 115.1 million to € 116.6 million. They also rose from € 274.8 million to € 281.1 million on a nine month basis. Quarterly tax expenses increased from € 33.4 million to € 34.9 million and the tax rate increased from 29.0% to 30.0% in the quarter but improved from 31.5% to 30.0% as of September 30, 2011.

Net Earnings

Consolidated net earnings were flat at € 81.7. Earnings per share rose from € 5.43 to € 5.45, and diluted earnings per share were up from € 5.39 to € 5.45.
For the first nine months of 2011, net earnings rose by 4.7% to € 197.1 million. EPS increased by 5.1% to € 13.15.

Net Assets and Financial Position

Equity

Total assets(as of September 30, 2011) grew by 4.5% from € 2,319.0 million to € 2,422.5 million. This rise is primarily attributable to an increase in both inventories and trade receivables based on the additional volume in business. The equity ratio rose sharply from 57.8% to 62.9%, signifying further improvement in our capital base. In absolute figures, shareholders’ equity increased by 13.7% from € 1,340.2 million to € 1,524.3 million.

Working Capital

PUMA’s overall Working Capital went up by 35.0% to € 668.7 million. On the asset side, inventories went up by 18.5% from € 449.2 million to € 532.4 million, supporting our continued and expected sales growth in addition to our new styles and offerings. Trade receivables also increased, up 13.3% from € 538.9 million to € 610.5 million. This again is an effect of our growth in sales compared to this point in time last year.

Cashflow/ Capex

The Free Cashflow (before acquisitions) came in at € -89.4 million versus € 57.9 million last year. The additional outflow resulted from tax payments and higher working capital needed as well as higher CAPEX. For Capex, the company spent € 44.6 million versus € 35.5 million in 2010. The increase derives mainly from investments in the improvement of organizational processes and IT systems as well as in the expansion of our Retail store portfolio, all of which continue to be integral components of our growth strategy.

Cash Position

Total cash (as of September 30, 2011) dropped by 30.7% to € 289.5 million from € 417.9 million last year. Bank debts were reduced by 39.9% from € 57.2 million to € 34.4 million. As a result, the net cash position decreased 29.3%, from € 360.7 million to € 255.1 million.

Share buyback

PUMA did not activate its share buyback program during the third quarter of 2011.

Outlook for the Financial Year 2011

Going into the final quarter of 2011, we reiterate that PUMA’s target is €3 billion in sales for the full year. Our overall outlook remains positive despite the current uncertainty afflicting various markets at this time. We anticipate ongoing input cost volatility, although we have demonstrated in the third quarter that our ability to maintain gross profit margins remains undiminished. As previously communicated, our current elevated operating and capital expenditures are an integral part of our growth strategy. None the less, we continue to expect full year net earnings to improve in the mid-single digit range.