PUMA RELAY 2014 Annual Report 2014 PUMA TIMELINE OUR highlights IN 2014 JAN FEB MAR apr maY june julY aUG SEP oct noV DEC evoPOWER Launch “PUMA Lab” Roll-Out World Cup Kit Launch Lexi Thompson’s First Major PUMA Village Closure FIFA World Cup™ in Brazil Arsenal FC Kit Launch “Forever Faster” Campaign Retail Business Relocation Becker OG Release F1-Championship for Hamilton New Global Ambassador Rihanna PUMA introduces its most Together with Foot Locker PUMA reveals the new COBRA PUMA golfer Lexi PUMA continues to optimize The FIFA World Cup™ in PUMA becomes the official kit PUMA’s global ”Forever With the finalization of the PUMA reissues the Becker Lewis Hamilton of PUMA PUMA and Rihanna powerful football boot USA, PUMA starts rolling national kits for its eight Thompson becomes the its organizational setup Brazil proves to be a great partner of top English Premier Faster” campaign, relocation of its Global and OG, the classic mid-top partnered MERCEDES AMG announce a new multi- to date, the evoPOWER. out its “PUMA Lab” retail national football teams second-youngest major – with the closure of the stage for PUMA’s innovative League club Arsenal FC. The the biggest marketing European Retail Organiza- shoe that 17-year-old PETRONAS F1 team wins year partnership, starting Inspired by barefoot concept in over 125 doors heading to the World Cup winner in LPGA Tour PUMA Village Development kits and eye-catching partnership kicks off with the campaign in the company’s tion from Oensingen, Swit- Boris Becker wore during his second drivers’ World January 2015. Rihanna kicking, it is designed and successfully expands in Brazil. The kits feature history at 19 with her Center in Vietnam and “Tricks” boots. PUMA launch of Arsenal’s kits for history, marks the start zerland, to the headquarters his famous Wimbledon Championship ahead of will serve as one of the to enhance a player’s its market presence PUMA’s new football apparel victory at the Kraft the relocation of its achieves its best ever sell- 2014/15 through a twenty of PUMA’s repositioning in Herzogenaurach, PUMA win in 1985. teammate Nico Rosberg. brand’s Creative Directors natural kicking ability, throughout the US. innovation PWR ACTV. Nabisco Championship. Lifestyle Business Unit to through of football boots, meter high water projection as a true Sports Brand completes its last major con- directly influencing PUMA’s power and accuracy. Herzogenaurach. with Tricks widely sold out. on London’s River Thames. to consumers and retail solidation project in 2014. Women’s collections. partners. CONTENT 1 | TO OUR SHAREHOLDERS 3 Stakeholder and Industry Collaboration 65 Dividends 98 Notes to the Consolidated Foreword 4 Anti-Corruption Efforts 66 Regional Development 99 Financial Statements 128 The Way Ahead 67 Net Assets and Financial Position 101 Auditor´s Certificate 168 2 | COMPANY OVERVIEW 7 Our Employees 68 Cash Flow 103 Company 7 Independent Assurance Statement 76 Compensation Report 105 5 | REPORT BY THE ADMINIstRATIVE Strategic Priorities 8 Risk and Opportunity Management 107 BOARD 169 Operations Strategy 10 3 | GROUP MANAGEMENT REPORT 78 Information Concerning Takeovers 112 Brand 12 Overview 2014 79 Supplemental Report and Outlook 114 6 | GRI INDEX 173 Brand Strategy 13 PUMA Group Essential Information 81 Corporate Governance Report 116 Product 15 Commercial Activities and 7 | THE PUMA SHARE 183 Design Language 16 Organizational Structure 81 4 | CONSOLIDATED FINANCIAL Performance 18 Targets and Strategy 82 STATEMENts 121 8 | FURTHER INFORMATION 186 Lifestyle 27 Product Development and Design 84 Consolidated Statement Distribution 32 Sourcing 85 of Financial Position 122 Distribution Strategy 33 Employees 87 Consolidated Income Statement 123 Sustainability 35 Management System 89 Consolidated Statement of Our Sustainability Strategy 36 Economic Report 90 Comprehensive Income 124 Our Sustainability Targets 42 General Economic Conditions 90 Consolidated Statement of Cash Flow 125 Social Sustainability 44 Sales 91 Statement of Changes in Equity 126 Environmental Sustainability 53 Results of Operations 95 Changes in Fixed Assets 127 TO OUR SHAREHOLDERS Foreword PUMA’s CEO Bjørn Gulden about the milestones in 2014, the importance of the new partnership with Rihanna and the company’s priorities for 2015 and beyond: Interview 4 1 | TO OUR SHAREHOLDERS FOREWORD Interview with CEO Bjørn Gulden “We have initiated In PUMA’s Annual Report 2013 and on many other occasions you spoke of the the turnaround, challenges PUMA is facing, such as the lack of brand heat or commercial products. but are not there yet” What did we achieve in 2014 to tackle that? Looking back at 2014, we made progress on all of our key strategic priorities internally and externally. Internally, many important decisions have been turned from words Bjørn Gulden (49), into action and those will help us become a faster and better company in the future. Chief Executive Officer, with We have made strides in developing com- PUMA since 2013. petitive products that mirror PUMA’s new “Forever Faster” positioning. We have im- proved our marketing, which now focusses “For me, ‘Forever Faster’ on fewer stories and a clear use of our as- sets. We have initiated important changes to is an attitude: We want to optimize our organizational setup. We have, be fast in making decisions, for example, closed our development center PUMA Village in Vietnam and relocated our fast in reacting to new Lifestyle Business Unit from London and trends and fast in bringing our Retail business from Oensingen to our headquarters in Herzogenaurach. And last innovations to the market.” but not least, we have started revamping our operations and IT foundation under the guidance of our newly appointed Chief Op- erating Officer, Lars Sørensen. 4 | PUMA RELAY TO OUR SHAREHOLDERS | 1 OUR What were external milestones? BRAND MISSION in making decisions, fast in reacting to new trends and fast in bringing innovations to the The year 2014 saw many great examples PUMA WILL BE THE market. We all know that PUMA is not there of our “Forever Faster” positioning that FASTEST SPORTS BRAND yet, but it is important that we look at “Forever were visible to our consumers and retailers. Faster” as the DNA of our company culture. We also worked on further extending our IN THE WORLD In autumn 2014, we were ready to launch brand ambassador list, when we added the first phase of our “Forever Faster” cam- Arsenal FC to our portfolio and extended paign, which basically had two objectives: to our contracts with Mercedes and BMW. And demonstrate to our consumers that PUMA of course, we signed Rihanna – what I am is back in sports and has athletes with the really proud of. was also an important milestone for PUMA. direction of who we want to be and where distinctive PUMA attitude, and secondly, to I am happy to say that all of this work trans- we are going. Throughout its history of over prove to our retail partners that we deliver “The positive feedback we lated into a product pipeline with exciting in- 65 years, PUMA always had a strong con- on our promises by investing in marketing. In received from our retailers in novations like evoPOWER in Football and nection to speed which is reflected in the the next phase, we will tie the campaign to terms of our new direction was our revolutionary IGNITE concept in Run- industry’s fastest logos, record-breaking products like the PUMA IGNITE and build a an important milestone for ning. In addition to that, we successfully athletes in different sports categories and consistent storyline leading up to the Rio de PUMA.” started initiatives to improve the quality of pioneering product innovations. For exam- Janeiro Olympic Games in 2016. our distribution like our “PUMA Lab” retail ple, PUMA was the first sports company to Our strong brand presence at the World Cup concept in the US market. fuse sports and fashion, creating a new era Did “Forever Faster” already have an in Brazil with eight partnered teams and our with immensely successful footwear icons effect on our business and financial pink and blue “Tricks” football boots as well In August 2014, PUMA launched its like Speed Cat, Future Cat and Mostro. Performances in 2014? as the Driver’s and Constructor’s Champion- “Forever Faster” campaign to the ship titles in Formula 1 for PUMA-supplied consumer. What are the messages we “It is important that we look at I think it is fair to say that we have initiated the Mercedes – to name only a few highlights want to convey? ‘Forever Faster’ as the DNA of turnaround, but we are not there yet. I have al- – also clearly proved that PUMA is back as our company culture.” ways said that the repositioning of PUMA and a sports brand. And then personally, I think First of all, “Forever Faster” and our mis- the turnaround of our business will take time that the positive feedback we received from sion to be the Fastest Sports Brand in the For me, “Forever Faster” can be best de- and we need to continue to build confidence our retailers in terms of our new direction world is more than just a campaign. It’s a scribed as an attitude: We want to be fast in the marketplace. But there were definitely PUMA RELAY | 5 1 | TO OUR SHAREHOLDERS OUR OBJECTIVE some signs in 2014 that our initiatives were this demand and I think that, if we do it right, yielding fruit. Our full-year results were in line IS TO BE THE Rihanna can be a game changer for PUMA. with expectations and we stopped the decline in PUMA’s sales. It was also very pleasant to FASTEST SPORTS BRAND “PUMA Relay” is the theme of this see that our Footwear segment returned to Annual Report for 2014.