PUMA AG Rudolf Dassler Sport

PUMA AG announces its consolidated financial results for the 4th Quarter and Financial Year of 2008

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Herzogenaurach (euro adhoc) - Herzogenaurach, Germany, February 18, 2009 - PUMA AG announces its consolidated

financial results for the 4th Quarter and Financial Year of 2008

Highlights 4th Quarter    . Consolidated sales up more than 7% currency-adjusted reaching EUR 561 million

. Gross profit margin below last year due to close out sales    . Operational result reached EUR 37 million, down 29% versus last year . Special items at EUR 25 million impact net earnings    . EPS at EUR 0.60 versus EUR 2.40

Highlights January - December   . Global brand sales up 2.9%   . Consolidated sales up 8.5% currency-adjusted   . Gross profit margin 51.8% compared to 52.3%   . Operational result at EUR 350 million or 13.9% of sales   . EBIT including special items at EUR 325 million   . EPS at EUR 15.15 compared to EUR 16.80

Outlook 2009   . Orders at EUR 1,153 million versus EUR 1,218 million   . Challenging market environment expected

The year 2008 was  in  particular  highlighted  by  major  sports   events.  PUMA successfully capitalized  on  these  events  and   continued  to  strengthen  its position as a desirable sportlifestyle brand. In the autumn  of  2008,  however, the world economy began to slow  down  significantly  in  connection  with  the global financial crisis.

Despite the decline in consumer spending, PUMA succeeded in posting   new  record sales. Currency-adjusted, global brand sales  rose  by   2.9%  to  almost  EUR 2.8 billion. Currency-adjusted consolidated sales grew by as much as  8.5%  to  over EUR 2.5 billion. Consolidated sales thus grew for the 14th consecutive year, with ten of these years at double-digit rates. The  gross  profit  margin   reached  a strong 51.8% and was with 50 basis points slightly below previous  year's  level due to the difficult market environment, particularly  in  the  fourth  quarter. The operating profit before special items totaled EUR 350.4 million  or  13.9% of sales, compared to 15.7% in the previous year. PUMA's position is one of  strong profitability, which is leading within the  sporting  goods   industry.  However, earnings are affected by special  items   associated  with  the  global  economic slowdown  and,  in   particular,    the    difficult    consumer    environment.    In consideration of the special items, earnings per share were EUR 15.15 compared to EUR 16.80 in the previous year.


Sales and Earnings Development 4th Quarter 2008

Consolidated sales rose solidly in the fourth quarter 2008 despite a continuous deterioration of the consumer environment. Sales increased currency-adjusted  by 7.3% and by 11.3% in Euro terms to EUR 561.3 million. All regions  contributed to the growth: Sales in EMEA rose currency-adjusted 5.5%, Americas sales grew  6.6% and Asia/Pacific went up 10.7%. Footwear sales increased 6.2%  and  Apparel  was up 5.8%. Sales in  Accessories  contributed  a  strong  26.1%  increase to  the growth. The gross profit margin in the fourth quarter was squeezed by  close  out  sales and inventory devaluations and fell by 480  basis  points  from  last  year  to 46.8%. All regions and product segments were affected. SG&A increased by 6.3% to EUR 230.9 million,  which  helped  to  reduce  the cost ratio from 43.1% to 41.1%. The improvement in the cost ratio did not  completely offset the softening of the gross profit margin. Operating profit declined by 29.0% from EUR 52,4 million  to  EUR  37.2  million  or from 10.4% to 6.6% as a percentage of sales. Measures that had been  implemented to tackle the effects  of  the  global  economic  slow-down  and  the difficult consumer environment had an impact of EUR  25  million  on fourth  quarter EBIT. Including these special items, earnings per share were at EUR 0.60 compared  to EUR 2.40 in the previous year.

Sales and Earnings Development January-December 2008

Global brand sales Global PUMA brand sales, comprised of consolidated and licensed sales,  rose  by 2.9% to EUR 2.8 billion after currency adjustments. In  Euro  terms,  brand sales rose 1.1%. Currency-adjusted footwear sales rose by 2.3% to EUR  1,471.6 million, and Apparel sales climbed by 5.1% to EUR 969.7 million. Accessories posted a 0.5% decrease to EUR 326.7 million. In terms of regions, solid growth was  achieved in the EMEA and Americas regions. Sales in Asia/Pacific  decreased  slightly.  EMEA contributed  53.0% (52.3%),  America  25.8%  (25.3%),  and  Asia/Pacific  21.3% (21.5%) to global brand sales.

Consolidated sales up 8.5% currency-adjusted Consolidated sales increased for the fourteenth consecutive year,  with  double- digit growth rates in ten of these years. 2008 currency-adjusted sales   rose  by 8.5% to EUR 2,524.2 million and in Euro terms 6.4%. Sales from the  company's own retail operations grew by 15.3% to  EUR   468.6  million  in  2008.  The  share of consolidated sales rose from 17.1% to 18.6%.

In terms of segments, Footwear sales grew currency-neutral by 6.3% to EUR 1,434.3 million. In particular, the Teamsport, Running and Lifestyle  units  contributed to this performance. Currency-adjusted Apparel sales  improved  by  9.6%  to  EUR  899.3  million. The Teamsport, Running and Fundamentals units posted solid performances. Sales in Accessories, which includes bags, balls and  sports   accessories,  rose currency-adjusted by 21.7% to EUR 190.6 million, with  almost  all  product areas contributing significantly to the rise.

Gross profit margin remains at a high level The gross profit margin decreased by 50 basis points to 51.8%  in  2008  and  is therefore   still  leading  within  the  sporting  goods  industry.  In  absolute figures, the gross profit margin grew  from  EUR  1,241.7  million   to  EUR 1,306.6 million, or by 5.2%. The decrease in margin stems from  higher  devaluations  of increased inventories that were necessary in the face  of  the  market  slowdown and to the higher close-out sales in the fourth quarter. In Footwear, the gross profit margin was at 51.7% compared to 52.3%  last  year; Apparel reached 51.9% after 52.2%, and Accessories achieved  51.7%  compared  to 52.8%.

Operating Expenses

Other operating expenses - comprised of selling expenses, expenses   for  product development and design, and administration and general expenses -  increased  by 8.5% in 2008, rising from EUR 905.2 million to  EUR  982.0  million  before special items, or from 38.1% to 38.9% as a percentage of  sales.  The  increase  in  the cost ratio resulted  from  scheduled  brand  investments,  particularly  in  the Marketing and Retail segment.

As part of selling expenses, investments  in  Marketing/Retail   increased  by  a total of EUR 80.2 million or 17.9% to EUR 528.6 million. The cost  ratio  rose from 18.9% to  20.9%  of  sales.  This increase  derived  from  investments  in  the selective expansion of the company's retail operations and stepped-up  marketing activities for the major sports events in 2008.

Expenses for product development and design decreased from EUR 58.1 million  to EUR 55.1 million, or from 2.4% to 2.2%  as  a  percentage of  sales.  The  decrease resulted from  a  weakening  in  the  US   dollar  compared  to  the  Euro  as  a significant portion of development costs is financed in  US  dollars.  Like-for- like, expenses for product development and design exceeded the  previous   year's level.

Other selling, general and administration  expenses  were  unchanged from  last year at EUR 398.4 million. As a percentage of sales this   represents  an improved cost ratio from 16.8% to 15.8%.

Operating Expenses include depreciations of EUR 55.9 million in total. This is an increase in depreciations of 21.4% compared to last year, which  mainly  results from the scheduled expansion of the company's own retail  operations.  Operating expenses before depreciation increased by 50 basis points from  36.2%  to  36.7% of sales.

Operational Result

Operational result before special items declined 5.8% from EUR 372.0 million to EUR 350.4 million. As a percentage  of  sales,  this   corresponds  to  an  operating margin of 13.9%, compared to 15.7% in the previous year.  The  decrease  in  the operating margin derives exclusively from the scheduled brand  investments.  The decrease  in the  operating  margin  derives  exclusively  from  the  scheduled investments related to increased marketing around the major  sports   events  and selective  retail  expansion.  Excluding  these  costs,   the  operating    margin exceeded last year's level.

Special Items

PUMA has taken measures to tackle the effects of the  difficult   current  market environment. The special items associated with these measures had an  impact  of EUR 25 million in total on PUMA's EBIT in the fourth  quarter  of  2008. Expenses related to special items include  depreciation  of  inventories,  reorganization expenses as well as impending losses.

After adjusting for the special items, EBIT  amounted  to  EUR  325.4 million or 12.9% of sales.

Financial Result

The financial result was at EUR 1.1 million compared to  EUR  10.5   million  in the previous year. This includes interest income of EUR 11.9 million  (previous year: EUR 21.2 million), as well as interest expenses of EUR 6.7 million  (previous year: EUR  5.3  million).   Measured  against  the  average  net  financing  base, this corresponds to a rate of return of 1.7% compared to 3.9% in the   previous  year. The financial result  also  includes  expenses  from long-term  purchase  price liabilities from corporate acquisitions amounting to  EUR  3.1  million (previous year: EUR 3.5 million), and EUR 1.0 million (previous year: EUR 2.0 million) from  the valuation of pension plans.

Earnings Before Taxes

Earnings before taxes (EBT) reached EUR 326.4 million compared to EUR 382.6 million in the previous year, which represents a decrease of 14.7%. Return was at  12.9% compared to 16.1%. Tax expenses   decreased  from  EUR  110.9  million  to  EUR 94.8 million. The tax rate was at previous year's level of 29.0%.

Net Earnings Taking tax expenses and minority interests into account, net  earnings  in  2008 amounted to EUR 232.8 million after EUR 269.0 million  in  the  previous  year. The decline of 13.5% resulted from scheduled brand investments and special items  in connection with the measures taken. The net rate of return was 9.2% after  11.3% in the previous year. Earnings per share came  in  at  EUR 15.15,  compared to EUR 16.80, and diluted earnings per share were EUR 15.15, compared to EUR 16.78.

Regional Development

Currency-adjusted sales in the EMEA region rose by 6.8% to  EUR   1,299.3 million. In terms of segments, currency-adjusted Footwear sales increased  4.1%,  Apparel 8.8%, and Accessories 21.7%. The gross profit margin reached 53.5%  after  53.9% in the previous year. The operating margin (EBIT) accounted for 18.2% of  sales, compared to 21.2%.

Currency-adjusted sales in the Americas region rose by 8.1% to EUR   651.3 million despite negative order indications at  the  beginning   of  the  year.  Currency- adjusted Footwear sales were up 7.0%, and Apparel grew 6.1%. Accessories  posted a strong sales growth of 31.5%. The gross profit margin was 49.2%,  compared  to 50.7% in the previous year. The operating  margin  was  at  14.5%,  compared  to 17.6%. Currency-adjusted sales in the region's largest market,  the   US,  decreased  by 4.1% to USD 538.1 million. The performance was mainly  affected  by  an  ongoing difficult mall-based retail environment. However, sales were above  expectations as the sales performance  during  the  year  showed  a  significant  improvement compared to the order trend seen at the beginning of the  year.  In   the  second half of 2008, PUMA even achieved a growth in  sales   despite  a  negative  order book indication.

Currency-adjusted sales in Asia/Pacific grew by 13.0% to EUR 573.6   million. This improvement stems partly from the initial consolidation of  the  subsidiary  in Korea. Currency-adjusted Footwear sales climbed 12.7%,  Apparel  was  up  12.6%, and Accessories rose 16.0%. The gross profit  margin  increased  from  50.6%  to 50.8%. Operating margin remained at last year's level of 20.3%.

Net Assets and Financial Position

Equity ratio at 62%

The equity ratio as of  December  31,  2008  remained  unchanged  at 62.0%.  In absolute figures, shareholders' equity increased 1.9%,   rising  from  EUR 1,154.8 million to EUR 1,177.2 million. Total assets rose by 1.9% from EUR  1,863.0 million to EUR 1,898.7 million. This gives PUMA very solid financial resources and leaves it highly stable despite the global financial crisis.

Working Capital

Working capital increased by 7.3%, rising  from  EUR  406.5  million to  EUR 436.4 million, which corresponds to 17.3% of sales compared to 17.1% in  the  previous year.  Working  capital  includes   inventories,  trade  receivables  and    trade payables, as well as other current assets and current liabilities. The increase in working capital derives mainly  from  a  rise  in  inventory  of 15.3% to EUR 430.8 million, which is partly attributable to the  consolidation of Korea. Trade receivables were up only slightly  by  1.8%  to  EUR   396.5 million, which is an improvement relative to sales growth. Trade payables increased by  a total of 15.0% to EUR 269.1 million.


Gross cashflow decreased by 6.9% from EUR 420.2 million to EUR 391.1 million. Compared to the net cash provided by changes in net  current assets  of  EUR 3.0 million in the previous year, 2008 saw a net cash outflow  of  EUR  77.0 million. This outflow of cash stems primarily from  financing  the  inventory  increase. Taxes, interest and other payments  accounted  for  total  outflows  of  EUR 95.0 million, compared to  EUR  120.8  million  in  the  previous  year.  Tax payments included in the total decreased from EUR 115.2 million to EUR 88.3 million. In all, cash provided by operating activities amounted to EUR 219.1 million,  compared to EUR 302.4 million in the previous year.

Net cash used for investing activities increased from EUR 93.5 million to EUR 133.3 million.  The  expansion  of  retail     operations,    current    investments    and construction of "PUMA Plaza", the new corporate headquarters in  Herzogenaurach, accounted for EUR 119.2 million compared to EUR 103.4 million in the previous year. In  addition,  payments  for  purchase  price  liabilities  in connection  with corporate acquisitions in the amount of EUR 24.9 million were  recorded (previous year: EUR 9.4 million). Cash flow from  interest  income  decreased  from  EUR 21.3 million to EUR 11.9 million.

As a result, the "free cashflow" decreased  from  EUR  208.8  million to  EUR 85.8 million. Excluding the payments for acquisition, the free cash flow amounted  to EUR 110.7 million compared  to  EUR   218.3  million  in  the  previous  year. As  a percentage of sales, free cashflow (before acquisitions) was at  4.4%,  compared to 9.2%.

Net cash used for financing activities mainly includes dividend   payments  of EUR 42.5 million and investments of EUR 181.4 million for the purchase of own shares.

Cash reported as of December 31, 2008 totaled EUR 375.0  million,   compared  to EUR 522.5 million in the previous year.


Despite the impact on earnings through special items, the Board  of   Management and the Supervisory Board will propose a payout of a   dividend  of  2.75  Euros from the retained earnings of PUMA AG at the Annual General Meeting on May  13, 2009. As a percentage of consolidated net earnings, this represents an increase from 15.8% to 17.8% of the dividend pay-out rate. The dividend is to be paid on the day after the Annual  General  Meeting  who  will  authorize  the   dividend payout.

Own Shares

PUMA continued its share buy-back program and purchased another 100,000 of  its own shares during the fourth quarter. At closing date, 950,000 shares were held as treasury stock in the balance sheet, accounting  for  5.9%  of  total  share capital and representing a total investment of EUR 216.1 million.

Outlook 2009

As a result of the slowdown of the global  economy  and  the   deterioration  in consumer spending, order backlog as of year-end declined by 5.4%  or  currency- adjusted 5.8% to EUR 1,152.5 million. This includes mainly  deliveries scheduled for the first and second quarter of 2009. Currency-adjusted orders for Footwear decreased by 2.3% to EUR 698.3 million, and Apparel orders were down 12.4% to EUR 383.8 million. Currency-adjusted orders for Accessories stood at EUR 70.4 million and were unchanged from last year's level. Currency-adjusted orders in the EMEA region were  down  by  10.0%  to EUR 610.9 million. Orders  in  the  Americas  region  increased   significantly  by  19.9% currency-neutral  to  EUR  280.7  million.   Because  of  the    difficult market environment in the Asia/Pacific region orders declined  by  15.9%  to  EUR 260.7 million after several years of double-digit growth rates.

Performance in the year 2009 will be difficult to forecast due to   the  general ongoing market environment. However, PUMA is prepared to react appropriately in an uncertain  market  environment  and  to  a weak  economy.  The  implemented measures, which were already reflected in the expenses recorded on December 31, 2008, should contribute accordingly.

Jochen Zeitz, Vorstandsvorsitzender: "Despite a very difficult market situation and a weak consumer sentiment, PUMA managed to post new sales records in the last financial year. In particular, sales growth in the fourth quarter was solid. We have implemented measures in the fourth quarter to prepare us properly for the coming year and will react flexibly to further changes in the market environment."

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 is one of the world's leading sportlifestyle companies that designs and develops footwear, apparel and accessories.  It is committed to working in ways that contribute to the world by supporting Creativity, SAFE Sustainability and Peace, and by staying true to the values of being Fair, Honest, Positive and Creative in decisions made and actions taken. PUMA starts in Sport and ends in Fashion. Its Sport Performance and Lifestyle labels include categories such as Football, Running, Motorsports, Golf and Sailing. The Black label features collaborations with renowned designers such as Alexander McQueen, Yasuhiro Mihara and Sergio Rossi. The PUMA Group owns the brands PUMA, Tretorn and Hussein Chalayan.  The company, which was founded in 1948, distributes its products in more than 120 countries, employs more than 9,000 people worldwide and has headquarters in Herzogenaurach/Germany, Boston, London and Hong Kong. For more information, please visit www.puma.com

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

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

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

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ots Originaltext: PUMA AG Rudolf Dassler Sport
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
Kerstin Neuber

Telefon: +49 (0)9132 81-2984

E-Mail: Kerstin.Neuber@puma.com

Branche: Consumer Goods
ISIN:      DE0006969603
WKN:        696960
Index:    Midcap Market Index, MDAX, CDAX, Classic All Share, HDAX,
              Prime All Share
Börsen:  Börse Frankfurt / regulated dealing/prime standard
              Börse Berlin / free trade
              Börse Hamburg / free trade
              Börse Stuttgart / free trade
              Börse Düsseldorf / free trade
              Börse Hannover / free trade
              Börse München / regulated dealing

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