BJØRN GULDEN, CHIEF EXECUTIVE OFFICER OF PUMA SE:

THIRD QUARTER 2022

Sales increased by 16.9% (ca) to € 2,354.4 million (+23.9% reported), representing the highest quarterly sales in PUMA’s history. The Americas region recorded a strong sales growth of 18.8% (ca). Sales in EMEA were up 18.5% (ca), driven by strong growth across almost all key markets in Europe. The Asia/Pacific region recorded sales growth for the first time this year (+9.8% ca). While COVID-19 related lockdown measures still impacted the business in Greater China, other key markets in Asia/Pacific delivered strong growth. Sales in Footwear were up 33.2% (ca) and Apparel grew 9.9% (ca), driven by continued strong demand for our Performance categories like Running & Training, Teamsports and Basketball, as well as for Sportstyle. Sales in Accessories were down 10.2% (ca) because of a softer leg- and bodywear-business, especially in North America.

PUMA’s Wholesale business increased by 19.9% (ca) to € 1,864.6 million and the Direct-to-Consumer (DTC) business was up by 6.5% (ca) to € 489.7 million. Sales in owned & operated retail stores increased 4.2% (ca) and e-commerce increased 11.8% (ca). We continued to focus on our strategy of being the best partner for our retailers, which supported the strong growth in our Wholesale distribution channel. At the same time, better product availability led to stronger growth in DTC, predominantly in e-commerce.

The gross profit margin decreased by 60 basis points to 46.8%, mainly caused by higher sourcing prices due to raw materials and freight rates as well as an unfavorable channel mix, while price adjustments and currencies had a positive impact.

Operating expenses (OPEX) increased by 25.8% to € 853.2 million as a result of higher marketing expenses, a higher number of retail stores in operation as well as higher sales-related distribution costs. Because of ongoing operational inefficiencies due to COVID-19, especially in supply chain and warehousing, the OPEX ratio increased to 36.2% (Q3 2021: 35.7%).

The operating result (EBIT) increased by 12.6% to € 257.7 million (Q3 2021: € 228.9 million) and the EBIT margin came in at 10.9% (Q3 2021: 12.0%).

Net earnings increased by 1.8% to € 146.4 million (Q3 2021: € 143.8 million), reflecting a decrease in the financial result due to currency effects. Consequently, earnings per share amounted to € 0.98 (Q3 2021: € 0.96).

NINE MONTHS 2022

Sales increased by 18.2% (ca) to € 6,268.5 million (+24.4% reported). Americas led the growth with a 28.1% (ca) increase in sales, followed by the EMEA region with all key markets in Europe contributing strong growth to a 21.4% (ca) increase in sales. Sales in the Asia/Pacific region were down 3.7% (ca) due to geopolitical tensions and COVID-19 related lockdown measures in Greater China, while other major markets in Asia/Pacific recorded strong growth. All product divisions delivered a solid growth, with Footwear being up 24.0% (ca), Apparel up 14.7% (ca) and Accessories up 8.9% (ca).

The Wholesale business was up 21.8% (ca) to € 4,956.0 million and the Direct-to-Consumer business (DTC) increased by 6.4% (ca) to € 1,312.5 million with growth in owned & operated retails stores (+11.1% ca) and a decline in e-commerce (-2.1% ca).

The gross profit margin decreased by 100 basis points to 46.8% (9M 2021: 47.8%). This was mainly caused by an unfavorable geographical and channel mix as well as higher sourcing prices due to raw materials and freight rates, which were partially offset by currencies and price adjustments.

Operating expenses (OPEX) increased by 22.2% to € 2,357.3 million (9M 2021: € 1,929.5 million). Higher marketing expenses, a higher number of retail stores in operation, higher sales-related distribution and warehousing costs, as well as operational inefficiencies due to COVID-19 contributed to this increase. However, the respective OPEX ratio decreased to 37.6% (9M 2021: 38.3%) as a result of higher sales growth and continued OPEX control.

The operating result (EBIT) increased by 22.0% to € 600.1 million (9M 2021: € 492.1 million) due to strong sales growth and continued OPEX control. Consequently, the EBIT margin came in at 9.6% (9M 2021: 9.8%).

Net earnings increased by 16.7% to € 352.1 million (9M 2021: € 301.7 million) and earnings per share were € 2.35 (9M 2021: € 2.02).

WORKING CAPITAL

The working capital increased by 86.2% to € 1,339.0 million (September 30, 2021: € 719.0 million). Inventories were up by 72.3% to € 2,350.2 million (September 30, 2021: € 1,363.9 million). The current inventory level is strongly impacted by currency effects, higher raw material prices and freight rates as well as earlier product purchasing. In addition, the third quarter last year was comparably low due to COVID-19 related factory closures in South Vietnam. Trade receivables increased by 21.9% to € 1,290.3 million (September 30, 2021: € 1,058.6 million), mainly as a result of strong sales growth. On the liabilities side, trade payables increased by 50.5% to € 1,810.2 million (September 30, 2021: € 1,202.8 million).

OUTLOOK 2022

PUMA achieved record sales and EBIT in the first nine months of 2022 based on continued brand momentum, successful product launches and the best possible service to our retail partners and consumers.

While the first nine months of the year have been strong for PUMA, we continue to navigate in a highly uncertain geopolitical, macroeconomic and competitive environment. The situation in Ukraine, a global energy crisis, persistent inflation and rising interest rates are leading to uncertain consumer behavior and volatile demand. COVID-19-related restrictions are still impacting business in Greater China, and higher freight rates and raw material prices continue to put pressure on margins. At the same time, the overall inventory levels have increased at both retailers and brands. The higher inventory levels, combined with uncertainty and volatility in the markets, are leading to increased promotional activity and retailers ordering later and more conservatively.

Despite the highly uncertain environment, PUMA reiterates its 2022 outlook for currency adjusted mid-teens sales growth, and an operating result (EBIT) in a range of € 600 million to € 700 million (2021: € 557 million). PUMA’s net earnings are expected to improve accordingly. The development of the gross profit margin and OPEX-ratio will continue to depend largely on the extent and duration of the negative impacts described above. In line with previous expectations, PUMA estimates that inflationary pressures from higher freight rates and raw material prices, as well as operational inefficiencies due to COVID-19 and the Ukraine crisis will dilute the profitability in 2022.

In line with the strategy, PUMA will continue to focus on managing short-term challenges without compromising the mid-term momentum of the brand. Consequently, sales growth and market share gains will have priority over short-term profitability. The strong and profitable growth in the first nine months of the year, a strong order book, an exciting product line-up as well as very good feedback from retailers and consumers make us confident for the mid-term success and growth of PUMA.