MERLENE
OTTEY
TABLE OF CONTENTS
INTRODUCTION
4
OUR STORES ���������������������������������������������������������������������������50
TIMELINE 2018 ��������������������������������������������������������������������������4
TO OUR SHAREHOLDERS �������������������������������������������������������17
CEO Letter ������������������������������������������������������������������������������������� 18
Report by the Supervisory Board ������������������������������������������������20
PUMA 70 ����������������������������������������������������������������������������������23
COMPANY OVERVIEW
31
BRAND �������������������������������������������������������������������������������������31
OUR PEOPLE ���������������������������������������������������������������������������53
People@PUMA �����������������������������������������������������������������������������54
PUMA - A Great Place to Work ����������������������������������������������������57
HR goes Digital ����������������������������������������������������������������������������� 61
SUSTAINABILITY ��������������������������������������������������������������������63
FOREVER FASTER Sustainability �����������������������������������������������64
Aiming Higher �������������������������������������������������������������������������������65
Meaningful Progress and Impact������������������������������������������������66
Select Sections of PUMA’s 2018 Sustainability Performance ���� 69
PRODUCT ��������������������������������������������������������������������������������33
Where We Are Going ��������������������������������������������������������������������82
Teamsport �������������������������������������������������������������������������������������34
Running and Training ����������������������������������������������������������������36
Basketball �������������������������������������������������������������������������������������39
Golf ������������������������������������������������������������������������������������������������� 41
Motorsport ������������������������������������������������������������������������������������43
Sportstyle ��������������������������������������������������������������������������������������45
Licensing ���������������������������������������������������������������������������������������48
Accessories ����������������������������������������������������������������������������������� 49
Endnotes ���������������������������������������������������������������������������������������84
Corporate Governance �����������������������������������������������������������������85
INDEPENDENT ASSURANCE STATEMENT ���������������������������86
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INFO
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PUMA Annual Report 2018
COMBINED MANAGEMENT REPORT
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RISK AND OPPORTUNITY REPORT �������������������������������������124
OVERVIEW 2018�����������������������������������������������������������������������90
SUPPLEMENTAL REPORT AND OUTLOOK �������������������������129
PUMA GROUP ESSENTIAL INFORMATION ���������������������������92
Commercial Activities and Organizational Structure ����������������92
Targets and Strategy ��������������������������������������������������������������������92
CONSOLIDATED FINANCIAL STATEMENTS
131
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ��132
Product Development and Design ����������������������������������������������93
CONSOLIDATED INCOME STATEMENT �������������������������������133
Sourcing ���������������������������������������������������������������������������������������� 94
Employees �������������������������������������������������������������������������������������97
Management System �������������������������������������������������������������������98
Information regarding the Non-financial Report �����������������������99
ECONOMIC REPORT ���������������������������������������������������������������99
General Economic Conditions �����������������������������������������������������99
Sales ��������������������������������������������������������������������������������������������100
Regional Development ��������������������������������������������������������������� 101
Results of Operations �����������������������������������������������������������������103
Dividends ������������������������������������������������������������������������������������� 106
Net Assets and Financial Position �������������������������������������������� 107
Cash Flow ������������������������������������������������������������������������������������ 109
Statement regarding the Business Development
and the Overall Situation of the Group ���������������������������������������111
COMMENTS ON THE GERMAN
GAAP FINANCIAL STATEMENTS OF PUMA SE������������������� 112
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME ��������������������������������������������������134
CONSOLIDATED STATEMENT OF CASH FLOWS ����������������135
STATEMENT OF CHANGES IN EQUITY ��������������������������������136
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS ����������������������������������������������������137
DECLARATION BY THE LEGAL REPRESENTATIVES ���������� 196
INDEPENDENT AUDITOR´S REPORT ����������������������������������197
ADDITIONAL INFORMATION
202
GRI CONTENT INDEX ������������������������������������������������������������203
THE PUMA SHARE ����������������������������������������������������������������206
PUMA YEAR-ON-YEAR COMPARISON ��������������������������������208
PUMA GROUP DEVELOPMENT ��������������������������������������������209
FURTHER INFORMATION ����������������������������������������������������� 116
Information concerning Takeovers ������������������������������������������� 116
IMPRINT
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Compensation Report ���������������������������������������������������������������� 117
Corporate Governance Report including the
Statement on Corporate Governance in accordance
with § 289f and § 315d HGB ������������������������������������������������������� 119
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PUMA Annual Report 2018
4
PUMA Annual Report 2018 JANUARY
THE BEGINNING OF A HISTORIC YEAR
2018 was a historic year for us� Not only did we celebrate 70 years
of the PUMA brand, but also 50 years of one of our most iconic
shoes: the PUMA SUEDE�
On this occasion, the PUMA Archive exhibited its treasures for
the first time on the PUMA BRIDGE, which connects both office
buildings at our headquarters in Herzogenaurach�
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FEBRUARY
ON YOUR MARKS, GET SET, GO!
In February, we announced a historic record: we passed the
mark of four billion euros in sales in 2017� And as a growing
business needs more space, the completion of the new office
building at our headquarters in Herzogenaurach, Germany, came
just in time. After two years of planning and construction, we
merged our two locations in Herzogenaurach into one. The new,
modern, glassy complex can accommodate up to 550 employees.
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PUMA Annual Report 2018 MARCH
USAIN BOLT’S TRY-OUT AT BVB
The world’s fastest man, Usain Bolt, was looking for a new career
opportunity: professional football player� After an unparalleled
career in athletics, he challenged himself playing with Borussia
Dortmund’s A-team. After his try-out in the Signal Iduna Park,
he declared: “Borussia Dortmund is a top international club,
and I will use everything I learned to improve myself�“
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APRIL
PUMA PUSHES SPORT AND FASHION FORWARD
WITH PHENOM LUX AND THUNDER SPECTRA
The first design collaboration between PUMA and Selena
Gomez has been eagerly awaited ever since we announced the
partnership with the American singer, actress and producer.
With the PHENOM LUX, the waiting came to an end and the shoe
sold out rapidly�
On the men’s side, there was a highlight as well: The THUNDER
SPECTRA disrupted conventional street style. With its bold,
chunky design, the sneakers made their way into sneaker
rotations worldwide�
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PUMA Annual Report 2018 MAY
PUMA’S CHANGE IN OWNERSHIP OPENS
DOORS TO ITS COMEBACK TO MDAX
As announced in January, our majority shareholder Kering S.A.
distributed part of their PUMA shares to their shareholders, thus
reducing their stake in our company� The effective reduction of
their total share capital from 86% to 16% in May led to a greater
free float of PUMA stocks, allowing PUMA to make its comeback
to the German MDAX in June.
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JUNE
PUMA PLAYERS ILLUMINATE THE WORLD CUP
An impressive roster of PUMA football players stepped on the
world’s biggest stage: With our PUMA FUTURE and PUMA
ONE football boots, our players illuminated the soccer world
championship in Russia�
Two of the three top-scorers were equipped by PUMA: Antoine
Griezmann and Belgium’s Romelu Lukaku. With France winning
the title, three PUMA players were crowned World Champions:
Antoine Griezmann, Olivier Giroud and Adil Rami.
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PUMA Annual Report 2018 JULY
NEW KITS FOR OUR NEW PUMA FOOTBALL CLUBS
PUMA further strengthened its position in football by signing
some of Europe’s most prestigious teams: A.C. Milan in Italy,
Olympique de Marseille in France, and Borussia Mönchenglad-
bach in Germany�
In July, the first interpretations of their iconic jerseys were
revealed and acclaimed by their fans�
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AUGUST
HIGHER, FASTER, FURTHER AT THE EUROPEAN
TRACK AND FIELD CHAMPIONSHIP
Our top track and field athletes competed at the European
Championship in Berlin. German sprinter Tatjana Pinto, for
instance, won the bronze medal in the 4 x 100-meter relay.
Europe’s fastest man, French sprinter Jimmy Vicaut, was also
the fastest in the semi-finals, but couldn’t compete in the final
due to an injury�
In perfect time for the championship, we released the HYBRID
Runner, a highly technological running shoe that fuses IGNITE
FOAM and NRGY beads to create a hybrid foam.
German PUMA Athletes
Alexandra Wester and Tatjana Pinto
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PUMA Annual Report 2018 SEPTEMBER
BACK TO THE HOOPS!
After two decades of absence, we’re back on basketball courts,
thus adding another sports category to our business. With the
support of Jay-Z, we are taking a different approach, looking at
basketball through a cultural lens�
With the CLYDE COURT DISRUPT, we have the perfect product
to conquer the basketball courts again� Embodying the spirit and
style set by our iconic basketball legend Walt “Clyde” Frazier in
the 1970s, we take cues from the past and apply them to today’s
standards and beyond�
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Walt „Clyde“ Frazier, Deandre Ayton and Adam Petrick
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PUMA Annual Report 2018
OCTOBER
ADRIANA LIMA JOINS THE PUMA FAMILY
International supermodel and sports ace Adriana Lima joined
our PUMA family. Adriana keeps herself fit and healthy with
boxing, weight lifting, and jump rope. Working out every day for
several hours and managing her life between fashion and
sports, she is the perfect ambassador for our Women’s Training
category�
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PUMA Annual Report 2018 NOVEMBER
A CLASSIC FROM THE ARCHIVE RE-INVENTED
Reflecting on our heritage, we reissued the CELL Endura,
a classic from our PUMA Archive. In the 90s, we created the
PUMA CELL technology, which was one of the most durable and
resilient cushioning technologies of the day�
The 2018 CELL Endura stays true to its original technology, main-
taining the running tech details of the original model, but comes
with new materials and new production techniques� It features
distinctive eyelets, a chunky silhouette, and a sleeker toe shape.
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PUMA Annual Report 2018
DECEMBER
SHE RUNS THE WORLD
31 goals scored in 29 matches: with this impressive track
record, Ada Hegerberg surpassed her male counterparts. After
a phenomenal season with Lyon, PUMA player Ada Hegerberg
was named the world’s best female football player of 2018. She
made history by becoming the first woman ever to win football’s
most prestigious award, the Ballon d’Or.
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PUMA Annual Report 2018 T
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PUMA Annual Report 2018
For you as shareholders, the year has also been quite eventful. Our majority
shareholder, Kering S.A., distributed some 70% of PUMA shares to its share-
holders, a spinoff that sharply increased our free float from 13% to 55%. I am
happy to welcome all the new investors, who have joined us this year. In June,
after the change in ownership was completed, PUMA made its comeback to the
MDax. In March, we also hosted our first Capital Markets Day since 2010, where
we presented our mid-term guidance for 2021 / 2022.
The reentry into the basketball strategy and category has been another major
milestone for us. We are excited to be back on court with the CLYDE COURT
DISRUPT, our first elite performance basketball shoe in nearly two decades. There
is no sport that unites performance and lifestyle the way basketball does, and we
are thrilled to be working with Jay-Z as our creative director and perfect partner
for our unique strategy. We are now well represented in the NBA by a mix of very
talented young players, including the top picks of the NBA Draft as well as
excellent veteran players such as DeMarcus Cousins, a four-time NBA All Star.
Football’s 2018 World Cup in Russia was a great stage for our teams and
players. We were represented by the teams from Serbia, Switzerland, Senegal
and Uruguay, who all played a respectable tournament. In terms of individual
players, the PUMA strikers Romelu Lukaku and world champion Antoine
Griezmann both had excellent performances on the pitch. Equipped with special
editions of the PUMA ONE and PUMA FUTURE football boots, they stood out as
two of the top three scorers in the tournament�
The strategic priorities of our FOREVER FASTER strategy continue to be brand
heat and desirability, a competitive product range, a leading offer for women,
improved quality of distribution, organizational speed, and now a strong reentry
into basketball as the latest addition�
The PUMA brand is built on credibility from its long history and tradition in sports.
PUMA is associated with some of the greatest sporting legends such as Pelé,
Maradona, Usain Bolt, Tommie Smith, Martina Navratilova, Boris Becker, Merlene
Ottey, Lothar Matthäus, Heike Drechsler, Linford Christie and many more. Today
PUMA continues to strengthen its position as a sports brand through partnerships
with some of the most elite ambassadors such as Lewis Hamilton, Bryson
DeChambeau, Sergio Agüero, Antoine Griezmann, Borussia Dortmund, Olym-
pique de Marseille and AC Milan. In 2019, we are excited to welcome the interna-
tional top clubs Manchester City and Valencia CF to the PUMA family.
PUMA also frequently works with the most relevant cultural and fashion icons
to connect with young trend-setting audiences. This has made PUMA one of the
hottest sports and fashion brands for young consumers� The partnerships that
we have had with Rihanna and Selena Gomez have defined a new way for cultural
influencers and brands to interact. In 2018, PUMA has further capitalized on this
success and has entered a partnership with supermodel Adriana Lima as an
ambassador for Women’s Training.
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18
Bjørn Gulden
CEO LETTER
DEAR PUMA SHAREHOLDERS,
2018 has been yet another successful year for PUMA, with some remarkable
events. We have strengthened the PUMA brand on a global basis, with double-digit
growth rates in all regions. Double-digit growth rates in all product segments
demonstrate PUMA’s highly competitive product range. We still have a lot to
improve, but we feel we are moving our brand and company in a good direction.
These results encourage us to keep working hard and executing against our
FOREVER FASTER strategy, in order to exploit PUMA’s enormous potential and
reach our goal of becoming the fastest sports brand in the world. We are
confident we will achieve the mid-term financial goals we have set out for
2021 / 2022, and the strong results in 2018 confirm that we are on the right track.
PUMA Annual Report 2018
For our product creation teams, the ambition is to create “Cool Stuff that Works”
and to respond to trends as quickly as possible. In 2018, we were among the first
sports brands to react to the “chunky shoes” trend with our THUNDER fashion
sneakers, and we were able to nurture and leverage the trend further with the
RS-0 and our latest model, the RS-X. We proved that our FOREVER FASTER
spirit is deeply ingrained into the way we do business. One of PUMA’s greatest
design icons, the SUEDE, celebrated its 50th anniversary in 2018, and in its
honor, we released many exclusive editions of this timeless silhouette throughout
the course of the year. For PUMA, innovation is at the heart of product design. The
HYBRID running shoe is the latest addition to our Running and Training collection,
combining two of our most innovative technologies, IGNITE Foam and NRGY
beads. With superior cushioning and energy return, this running shoe is ideal
for longer and faster runs. In our Golf category, we have attracted a lot of atten-
tion to our COBRA ONE Length irons, a unique advance that gives the player a
full set of irons all of the same length, and the COBRA KING F9 driver with the
SPEEDBACK technology, which combines a highly aerodynamic clubhead shape
with a low center of gravity�
Female consumers are increasingly participating in athletic activities world-
wide, and remain a top priority for PUMA. Women are not only continuing to take
inspiration from athletic wear for their everyday wardrobe, but they have also
driven the growth in popularity of sports such as yoga, Pilates and high-intensity
interval training (HIIT). Building on PUMA’s fashion expertise and sports
credibility, as well as a profound understanding of the modern female athletic
consumer, PUMA has delivered on its positioning of “Where the Gym Meets the
Runway.” Key styles behind our women’s footwear business were the training
shoes DEF Y and MUSE. Supported by our ambassadors Selena Gomez,
Cara Delevingne and Adriana Lima, we want to inspire women everywhere
to stay true to themselves�
PUMA has continuously improved the quality of its distribution and expanded its
presence in key sports performance and Sportstyle retailers around the world�
PUMA remains dedicated to strengthening its relationships with key retail part-
ners by being a flexible and service-oriented business partner, always easy to
do business with. Improved sell-through has further helped PUMA to gain more
shelf space in our partners’ retail stores in 2018. We have achieved higher sell-
through in wholesale accounts, like-for-like sales growth in our own retail
stores, the extension of our retail store network, and continued strong growth
in our eCommerce business. On a regional basis, we have continued to grow in
Europe despite a difficult market environment. In China, sales growth has
accelerated even further. In the Americas, sales increased significantly with
both North and Latin America contributing with double-digit growth rates in
constant currency�
greater focus was put on the development of a new ERP system to be rolled-out
in 2019 and the following years. PUMA’s International Trading Organization saw
further improvements in the fields of capacity management and collaboration
regarding the sharing of performance data� The new product development
system, implemented in 2017, was further enhanced and rolled-out to all
divisions. In 2019, PUMA has started the construction of a new multichannel
distribution center in Geiselwind, Germany, which will be operational in 2021.
Sustainability remains a key priority for PUMA. We have reconfirmed our
commitment to the 10 principles of the UN Global Compact, and have aligned
our sustainability program with the United Nations Sustainable Development
Goals. In 2018, we were well on track to reach our 10FOR20 sustainability
targets. We are also proud to acknowledge that we have already hit our 2020
material targets for cotton, polyester, leather, and cardboard. Consequently, we
will increase our ambition level from 50% more sustainable cotton and polyester
to 90%, and have established a new target for responsible down feathers. With
our first carbon-neutral product collection launched in partnership with British
online retailer ASOS, we have once again begun to communicate sustainability
attributes of products� Our sustainability efforts have been acknowledged by
our readmission into the FTSE4GOOD Sustainability Index as well as an improved
rating for the Carbon Disclosure Project. To help the fight against climate
change on an industry scale, we took a leading role in the development of the
Fashion Charter on Climate Action under the umbrella of the United Nations
Climate Program. While we are stepping up our game to hit our 2020 sustainability
targets, we are already working on our sustainability strategy for 2025, which
will be communicated in our next Annual Report.
In closing, I would like to thank our employees for their commitment to PUMA.
It is their hard work, their alignment with our FOREVER FASTER strategy, and
their dedication to the brand that has enabled us to deliver such strong results
in 2018� Our people are our most important resource� I would also like to thank
you, our shareholders, for your support. Your commitment is a sign of your
appreciation and trust, and we will do everything within our power to ensure that
PUMA remains an attractive investment for you. I am optimistic that we have
excellent momentum in our business, and are very well positioned in the
marketplace�
In 2018, PUMA further invested in IT infrastructure. A new Security Operations
Center was implemented to maximize protection from outside threats, and a
Bjørn Gulden
Chief Executive Officer PUMA
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PUMA Annual Report 2018
REPORT BY THE
SUPERVISORY BOARD
DEAR SHAREHOLDERS,
Last year was an eventful year for PUMA SE.
Kering S.A. distributed the majority of its
PUMA shares to its own shareholders by
means of a dividend in kind. As a result, Kering
is no longer the majority shareholder of PUMA.
The change in the shareholder structure has
prompted PUMA to change the management
structure of PUMA SE from monistic to dual-
istic. As a result, managing the company is now
the responsibility of the Management Board, as
is customary in German stock corporations�
The three managing directors were appointed
as members of the Management Board� The
members of the Administrative Board were
elected as members of the Supervisory Board
by the Annual General Meeting, which ensures
the continuity of the Board’s work. These topics
were discussed in detail at the company’s
Annual General Meeting in 2018. The preparation and follow-up of the separation
of PUMA SE from the scope of consolidation of the Kering Group shaped the work
of the Supervisory Board of PUMA SE during the reporting period. The work of the
Supervisory Board described below refers to the work of the Administrative Board
and the Supervisory Board�
Jean-François Palus
In the financial year 2018, the Supervisory Board has exercised all its duties under
the law, statutes, and company rules. The Supervisory Board has dealt extensively
with the status and the development of PUMA and has regularly advised and
supervised the Management Board in its management of the company�
In this regard, the Supervisory Board has in its four regular meetings dis-
cussed and resolved on the company’s business policies, all relevant aspects
of corporate development and corporation planning, the company’s economic
situation, including its net assets, financial position and results of operations,
and all key decisions for the Group� All members participated in drawing up
the resolutions� The Management Board has informed the Supervisory Board
regularly, comprehensively, and in a timely manner in written and verbal form
about the implementation of all decisions and about all major business
transactions. Furthermore, in 2018 two extraordinary and a constitutive
meeting of the Supervisory Board took place�
The Supervisory Board discussed in detail all of the company’s key business
transactions, based on the repor ts by the Management Board and the
committees, and presented its own ideas. The Management Board has provided
the Supervisory Board with information on any deviations of the business
performance from the expected figures. The Supervisory Board verified all of
these explanations using the supporting documents submitted. The Supervisory
Board was involved in all key decisions at an early stage. In addition, the
Chairman of the Supervisory Board maintained, and continues to maintain,
regular verbal or written contact with the CEO and keeps himself informed of
all major developments. Overall, these discussions did not give rise to any
doubts that the Management Board were managing the Group in anything other
than a lawful and proper manner�
Main advisory focus
In the financial year 2018, the focus was primarily on the following topics: Audit
and approval of the 2017 financial statements, consequences of the distribution
of the dividend in kind by Kering S.A. and measures to be taken, one-time
dividend to PUMA’s shareholders, mid-term outlook, change from the monistic
to the dualistic governance structure, conclusion of credit facility agreements,
setting the agenda for the Annual General Meeting of April 12, 2018, ongoing
business and sales development, the Group’s financial position, business
planning for 2018, and medium-term planning, including investments, com-
pliance and internal control system as well as material litigation in the Group�
In addition, the Supervisory Board confirmed the target figures for the proportion
of women on the Supervisory Board, the Management Board, and the two
management levels below the Management Board set by the Administrative
Board in the monistic structure, as well as the competence profile and diversity
concept for the Supervisory Board�
As every year, the Personnel Committee and the Supervisory Board set the
target achievements for 2017 and decided on the bonus for the members of the
Management Board�
Against the background of the need to conclude new employment contracts with
the members of the Management Board, the Personnel Committee and the
Supervisory Board dealt with the remuneration of the Management Board� In
order to review all Management Board employment contracts and to ensure the
appropriateness of the individual remuneration, the Supervisory Board obtained
a benchmark analysis taking into account the peer group companies defined by
the Supervisory Board� The benchmark analysis was evaluated by the Personnel
Committee and the resulting measures were prepared for the Supervisory Board�
The Supervisory Board examined the appropriateness of the remuneration of the
Management Board and determined that it was appropriate in terms of amount
and structure. In addition, the Supervisory Board was informed about the status
of the implementation of the General Data Protection Regulation�
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PUMA Annual Report 2018
Conflicts of interest
The members of the Supervisory Board are required to disclose any conflicts of
interest immediately. In the past year, no such disclosures were made.
Committees
In its constitutive meeting on June 6, 2018, the Supervisory Board established
three committees to perform its duties� The Board receives regular reports on
their work� The members of the committees are listed in the Notes to the
Consolidated Financial Statements�
Personnel Committee
The Personnel Committee is responsible for entering into and making changes
to Management Board employment contracts and for establishing policies for
Human Resources and personnel development� It met twice in 2018� Discussions
focused on recommendations for setting bonus payments for the members of the
Management Board� The Supervisory Board was given a respective recommen-
dation for a resolution. Moreover, as described above, the Personnel Committee
dealt with the new Management Board employment contracts and the
appropriateness of the remuneration for the Management Board members�
Audit Committee
The Audit Committee held four regular meetings in financial year 2018. In
particular, the Audit Committee is responsible for accounting issues and
monitoring the accounting process, the effectiveness of the internal control
system, risk management and the risk management system, internal audits,
compliance, and the statutory audit of the financial statements, with particular
regard to the required independence of the statutory auditors, issuing the audit
mandate to the statutory auditors, defining the audit areas of focus, any
additional services to be performed by the auditors, and the fee agreement.
Sustainability Committee
The Sustainability Committee was abolished after the transition from the
monistic to the dualistic management system�
Nominating Committee
The Nominating Committee proposes suitable shareholder candidates to the
Supervisory Board for its voting recommendations to the Annual General
Meeting. It held one meeting in the last financial year. The Nominating Committee
recommended to the Supervisory Board that the Supervisory Board proposes
the election of Mr. Jean-François Palus (Group Managing Director and member
of the Supervisory Board of Kering S.A., Paris / France), Mr. Jean-Marc Duplaix
(Chief Financial Officer (CFO) of Kering S.A., Paris / France), Mr. Thore Ohlsson
(President of Elimexo AB, Falsterbo / Sweden) and Ms. Béatrice Lazat (Human
Resources Director, Kering S.A., Paris / France) at the Annual General Meeting
on April 12, 2018.
Corporate Governance
As in previous years, the Supervisory Board addressed current developments
in the German Corporate Governance Code (GCGC) in the financial year 2018.
The GCGC contains essential statutory regulations and recommendations for
the management and supervision of listed companies and standards for respon-
sible corporate governance� The corporate governance standards have long
been a part of the corporate routine�
Pursuant to Paragraph 3.10 of the GCGC, the Supervisory Board reports on cor-
porate governance in the Corporate Governance Report. With very few excep-
tions, the company satisfies the requirements of the GCGC and explains these
system-related exceptions in the Statement of Compliance. The Statement of
Compliance of November 9, 2018, is available to our shareholders at any time
on the company’s website under http://about.puma.com/en/investor-
relations/corporate-governance/declaration-of-compliance�
Annual financial statements adopted
The annual financial statements for PUMA SE prepared by the Management Board
in accordance with German Commercial Code (Handelsgesetzbuch / HGB), the
consolidated financial statements and the combined management report for
PUMA SE and the PUMA Group, each for the financial year 2018, prepared in
accordance with Section 315a HGB on the basis of the International Financial
Reporting Standards (IFRS) have been audited by the statutory auditors Deloitte
GmbH Wirtschaftsprüfungsgesellschaft, Munich, who were appointed at the
Annual General Meeting on April 12, 2018, and commissioned by the Supervisory
Board to audit the annual financial statements and the consolidated financial
statements, and have been given an unqualified auditor’s opinion.
In their report, the statutory auditors conclude that PUMA’s institutionalized risk
management system, in accordance with Section 91(2) of the German Stock
Corporation Act (Aktiengesetz / AktG), is capable of detecting at an early stage,
and countering, any developments that might jeopardize the continuity of the
company as a going concern� The Supervisory Board has been updated by the
Management Board regularly on all relevant risks in this regard, in particular
their assessments of market and procurement risks, financial risks (including
currency risks), and organizational risks.
The accounting records, the audit reports from the statutory auditors, and the
Management Board’s and Super visor y Board’s recommendation on the
appropriation of net profit were made available to all members of the Supervisory
Board in a timely manner� At the meeting of the Audit Committee on February
13, 2019, and at the subsequent Supervisory Board meeting held on the same day,
the statutory auditors reported on the key results of their audit and discussed
them in detail with the Management Board and the members of the Supervisory
Board� No discrepancies were detected�
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PUMA Annual Report 2018
The Supervisory Board reviewed in detail the annual financial statements, the
combined management report for PUMA SE and the PUMA Group, the Manage-
ment Board’s and the Supervisory Board’s recommendation on the appropriation
of net profit and the consolidated financial statements, and raised no objections.
In accordance with the recommendation of the Audit Committee, the Supervisory
Board agreed with the results of the audit of both statements, and approved the
annual financial statements of PUMA SE and the consolidated financial statements
for the 2018 financial year. The 2018 annual financial statements have thus been
adopted�
The Supervisory Board and the Management Board resolved to propose to the
Annual General Meeting a distribution of a dividend of € 3.50 per dividend-entitled
share for the financial year 2018. In this context, the liquidity situation of the
company, the financing, and the effects on the capital market were discussed.
A total amount of around € 52 million will be paid out in dividends from
PUMA SE’s net income. The remaining net income of around € 92 million will
be carried forward�
Finally, in its meeting on February 13, 2019, the Supervisory Board was presented
the first draft of the combined non-financial report in accordance with §§ 315c
in conjunction with §§ 289c to 289e of the German Commercial Code (HGB) and
the state of data collection was discussed. When the non-financial report is
finalized, it will be submitted to the Supervisory Board for approval.
Report on relationships with affiliated companies
Until May 16, 2018, PUMA SE has been a dependent company of Kering S.A., which
in turn is a subsidiary of Artémis S.A. (due to the voting right majority), pursuant
to Section 17 of the German Stock Corporation Act (AktG)� The report by the
Management Board on relations with affiliated companies (Dependent Company
Report) specified in Section 312 AktG has been made available to the Supervisory
Board. The report has been reviewed by the statutory auditors, who issued the
following auditor’s opinion:
“We have duly examined and assessed the report and hereby certify that:
1. the information contained in the report is correct,
2� the payments made by the corporation in the legal transactions listed in the
report were not unduly high and
3. regarding the other measures listed in the report, there are no circumstances
indicating a materially different assessment from that of the Management
Board.”
After a thorough review, the Supervisory Board agreed with the Dependent
Company Report prepared by the Management Board and approved the auditors’
findings. No objections were raised.
Personnel changes in the Supervisory Board
There were the following changes in personnel on the part of the shareholder
representatives in the financial year 2018: The Annual General Meeting on April
12, 2018, elected a Supervisory Board consisting of six members. The members
are Mr. Jean-François Palus (Group Managing Director and member of the
Supervisory Board of Kering S.A., Paris / France), Mr. Jean-Marc Duplaix (Chief
Financial Officer (CFO) of Kering S.A., Paris / France), Mr. Thore Ohlsson (Pres-
ident of Elimexo AB, Falsterbo / Sweden) and Ms. Béatrice Lazat (Human
Resources Director, Kering S.A., Paris, France) as shareholder representatives,
and Mr. Martin Koeppel (Chairman of the Works Council of PUMA SE), and
Mr. Bernd Illig (Administrator IT Systems PUMA SE) as employees’ represen-
tatives. Each of their terms of office end with the close of the Annual General
Meeting that adopts the resolutions approving the actions of the Board for the
financial year 2022.
Thanks
We would like to express our gratitude and recognition to the Management
Board, the management teams at the Group companies, the Works Council, and
all our employees for their hard work and their outstanding cooperation in 2018�
Herzogenaurach, February 13, 2019
On behalf of the Supervisory Board
Jean-François Palus
Chairman
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PUMA Annual Report 2018
SINCE 1948, PUMA HAS RELENTLESSLY PUSHED SPORT
AND CULTURE FORWARD BY CREATING FAST PRODUCTS
FOR THE WORLD’S FASTEST ATHLETES� WE DRAW
STRENGTH AND CREDIBILITY FROM OUR HERITAGE IN
SPORTS THAT ASSOCIATES US WITH SOME OF THE
GREATEST SPORTS LEGENDS: PELÉ, MARADONA,
TOMMIE SMITH, BORIS BECKER, LOTHAR MATTHÄUS,
LINFORD CHRISTIE, JUST TO NAME A FEW�
Helmut Fischer, also known as “Mr. PUMA”, knows our brand’s history
better than anyone else. Part of the PUMA family since 1978, he was
the first advertising director of the brand. Over the past four decades,
the avid collector has collected more than 8,000 shoes, numerous
pieces of apparel, autographs and other memorabilia.
It is thanks to him that PUMA can now build up its first corporate
archive� On the following pages you will be able to catch a glimpse of
Fischer’s greatest treasures from the PUMA Archive.
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PUMA Annual Report 2018
1952
SUPER ATOM
The launch of PUMAʼs SUPER ATOM in 1952 creates
a stir. Rudolf Dassler collaborates with experts,
such as West Germanyʼs national coach Sepp
Herberger to develop the worldʼs first boot with
screw- in studs.
In addition to the successful product launch, this
marks the beginning of PUMA’s football heritage.
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PUMA Annual Report 2018
1968
SACRAMENTO
With the SACRAMENTO brush spike, PUMA disrupts
track and field. This innovative brush sole features
68 small, brush-like bristles in the front area of the
foot – maximizing traction and minimizing resistance
on the newly introduced tartan lanes�
This spike leads various athletes to victory and world
records. Right before the Olympic Games in Mexico,
the spike is deemed “too dangerous” and is conse-
quently banned. This decision has not been rectified
until today�
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PUMA Annual Report 2018
1968
PUMA SUEDE
Over the past 50 years, the PUMA SUEDE has become
a timeless classic. Basketball legend Walt “Clyde”
Frazier made this shoe popular in the 70’s, wearing
different colorways at each match� This is just one of
many stories around the street style icon SUEDE.
em�
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PUMA Annual Report 2018
1970
PUMA KING
With the PUMA KING, we create another revolutionary
product. Its flat structure makes it lighter, while the
soft leather increases comfort. Wearing the PUMA
KING, Pelé wins the World Cup 1970 and is crowned
“player of the tournament”.
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PUMA Annual Report 2018
1985
BORIS BECKER
Boris Becker needs a special shoe to help him take
even more risks on the court without incurring
injuries. This mid-top tennis shoe prevents ankle
turning and provides the tennis star with the confi-
dence and protection to take flight.
In 1985, he wears this colored tennis shoe during his
legendary victory in Wimbledon.
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PUMA Annual Report 2018
1998
JIL SANDER
As the first sports brand, we merge sports and
fashion through a cooperation with star designer
Jil Sander. Fusing two PUMA icons – the PUMA KING
and the running shoe EASYRIDER - we set the trend
for sport-inspired styles, designed for the street.
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PUMA Annual Report 2018
2009
WHO FASTER?
This is truly the world’s fastest shoe: In 2009,
Usain Bolt smashes the world record, running the 100
meters in 9.58 seconds. This spike is custom-made
following Bolt’s technical and design demands.
The shoe bears his signature phrase “Who faster?”,
which he usually shouts after winning a race�
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PUMA Annual Report 2018
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PUMA Annual Report 2018
Adam Petrick
BRAND STRATEGY
INTERVIEW WITH ADAM
PETRICK, GLOBAL DIRECTOR
BRAND MARKETING
PUMA JUST CELEBRATED ITS 70TH
ANNIVERSARY. HOW WOULD YOU
DESCRIBE PUMA’S EVOLUTION AS
A BRAND SINCE 1948?
Adam Petrick: When I think about “evolu-
tion” in our brand, I like to start by thinking
about Rudolf Dassler’s goals and objectives
for our company, and what he felt sport
stood for� He believed that the work we do
here is a constant pursuit of progress and
achievement – particularly with a focus on
athletic performance, but also in the pursuit
of bringing people together emotionally�
FOREVER FASTER means that there’s always something out there that we can
be doing better, especially thrilling and uniting people in new, innovative ways.
That mantra comes directly from him and his words�
It’s interesting that in the long arc of a brand, even if you go astray for some time,
you often come back to the things that were most important at the beginning�
Though there may have been a period when we stepped away from sport and
placed a greater emphasis on style or fashion, we can now zoom-out fully and
say that this “middle period” was quite useful to our overall development. It
gave us a dimension that is a valuable differentiator for us today as we seek to
blend and leverage a range of sport and cultural influences to drive progress.
Through the course of 70 years, we have come right back to where we needed
to be: grounded in the vision of our founder but enriched by our journey�
WHAT DO YOU THINK IS PUMA’S BIGGEST ACCOMPLISHMENT IN 2018?
Our most significant accomplishment in 2018 has been the re-entry into
performance Basketball, giving us a powerful new platform in sports and
setting a new standard for approaching a sport category through the culture
and influences that surround it. Expanding our portfolio of performance
categories from Golf, Track & Field, and Football into something that is a
commercial, mainstream sport in some of our most important markets –
that’s a big deal.
We’ve been able to sharpen our performance credibility to demonstrate our
sporting point of view in a more cohesive and coherent way, especially in the
US, and we’ve done a lot to create brand heat for the company overall. We
can confidently say that Basketball has helped us to sell more football boots,
more fashion sneakers, even more branded apparel.
WHAT DOES IT MEAN FOR THE BRAND?
Throughout 2018, we’ve also become clearer about what it means to participate
in “sport culture.” We made a lot of progress in Football culture whether it’s
understanding our football-obsessed teen as our core consumer, or signing a
new generation of exciting athletes who are unique individuals on and off the
pitch. I think Golf has always been a category where PUMA capitalizes on
golfing culture.
Now, I believe we are finally defining our method and approach to sports in a
way that is consistent with our brand’s ethos and energy in all of our categories.
We’ve sharpened our focus on blending style and technology in Motorsport
and that’s starting to really pay dividends. Even our training initiatives are
reaching into the cultures of fitness, wellness, and health, and are proving
what we mean when we say, “Sport Culture is Sport.”
IN A FAST-PACED AND HIGHLY COMPETITIVE SPORTSWEAR INDUSTRY,
WHAT IS PUMA DOING TO KEEP GROWING AND STAND OUT FROM ITS
COMPETITORS?
I think that with each passing year, we are getting better and better at focusing
on the culture around sports, and thinking about the ways to impact the people
who are a part of that culture, as efficiently and effectively as possible. In 2019,
we have a huge opportunity to improve the techniques that we use to commu-
nicate across the board� The communications channel shift that we have ob-
served over the last several years suits PUMA very well.
The trends we see in the market and among consumers play to our strengths:
social media power, word of mouth storytelling, influencer marketing. These com-
munication channels are built around the ways that our “Generation Hustle” con-
sumers speak to one another� These trends also demonstrate that we need to
recognize that the kid who’s into Basketball might also be into Football, might also
be into Golf, might also be into Motorsport, and doesn’t necessarily care which
category their products are coming from – as long as they’re relevant and cool
and interesting� If we continue to evolve our thinking in that sort of enlightened
way and address Sport Culture across the board – the fashion of sports, the
music of sports, the gaming, the humor, the inside knowledge of sports, and so
on – that’s our differentiation point. That’s how we are going to win.
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PUMA Annual Report 2018
PUMA CAN LOOK BACK ON A
GREAT YEAR IN SPORTS, FILLED
WITH EXCITEMENT, INNOVATION,
PERFORMANCE, AND STYLE�
Founded in 1948 by Rudolf Dassler, PUMA has
been equipping the world’s fastest athletes
with innovative products ever since� Its strong
reputation for fast and innovative product
designs go across its Performance categories
Football, Running and Training, Basketball,
Golf, and Motorsport.
In addition, we keep pushing sports and fashion
forward with our trend-setting Sportstyle
category, which develops a range of lifestyle
products that have their roots in sports�
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TEAMSPORT ����������������������������������������� 34
RUNNING AND TRAINING ��������������������36
BASKETBALL ����������������������������������������39
GOLF ������������������������������������������������������41
MOTORSPORT �������������������������������������� 43
SPORTSTYLE ��������������������������������������� 45
LICENSING ������������������������������������������� 48
ACCESSORIES ���������������������������������������49
PUMA Annual Report 2018
TEAMSPORT
IN 2018, PUMA FOOTBALL TOOK ITS GAME TO NEW LEVELS
BY ADDING GROUNDBREAKING NEW PRODUCTS AND
SIGNING NEW PARTNERSHIPS WITH EXCITING TEAMS
AND WORLD-CLASS PLAYERS. ON TOP OF THIS, OUR
CLUBS AND PLAYERS ENJOYED A VERY SUCCESSFUL
YEAR, MAKING WAVES ACROSS THE WORLD OF FOOTBALL�
WELCOME TO THE PUMA FAMILY
In 2018, we succeeded in strengthening our position as a leading football brand,
adding exciting teams and players to our roster.
European giants AC Milan, Olympique de Marseille, and Borussia Mönchenglad-
bach joined the PUMA family, as well as Swedish top-flight team BK Häcken.
New player additions caused a buzz with the signings of Romelu Lukaku
(Manchester United), Luis Suárez (FC Barcelona), David Silva (Manchester City),
Vincent Kompany (Manchester City), Axel Witsel (Borussia Dortmund), and
Dejan Lovren (Liverpool)�
ILLUMINATING THE WORLD CUP
The undisputed highlight of 2018 was, of course, the FIFA World Cup in Russia.
Of the four national teams representing PUMA, Switzerland reached the
knock-out stages, while Uruguay made it to the quarterfinals.
Our individual players put up a remarkable show, above all Antoine Griezmann,
who was voted “Man of the Match” as he led France to victory in the final. He was
joined in lifting the trophy by fellow PUMA athletes Adil Rami and Olivier Giroud.
Griezmann and newly-signed Belgian striker Romelu Lukaku were among the
top three goal-scorers in the tournament.
These performances showcased our tournament footwear, the “illuminate pack.”
We provided both FUTURE and PUMA ONE boots with new technology and mate-
rial upgrades elevated in a striking color combination�
The PUMA ONE introduced FUSEFIT technology to a football boot for the first
time, delivering a more streamlined silhouette and a super-soft-kangaroo
-leather upper for supreme comfort and touch on the ball. The FUTURE received
an evolved NETFIT upper for even more customizable lacing options, thus im-
proving our players’ agility and reactivity on the pitch.
34
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct BOLT LINKS UP WITH BORUSSIA DORTMUND
FEATURE STORY
One of the biggest surprises in football in 2018 came
in the form of the world’s fastest man, Usain Bolt,
joining up with Borussia Dortmund� Immediately fol-
lowing the end of his active athletics career, Usain linked
up with the Bundesliga giants for a training experience.
During an exhibition game at the club’s training center,
Bolt scored two goals and impressed with his perfor-
mance to the delight of a huge crowd and international
media that had gathered to see the sprint legend�
Following his BVB experience, Usain captained the
World XI at 2018 Soccer Aid game played in front of
72,000 spectators, helping to raise a record £ 6.7 million
for UNICEF. Usain subsequently played for Central Coast
Mariners in Australia, featuring in a series of friendly
games�
PUMA PLAYERS: FOREVER SUCCESSFUL
The year ended on a fantastic high for Ada Hegerberg (Olympique Lyonnais
Féminin), who was the debutant winner of the women’s Ballon D’Or award. In
her honor, PUMA gifted Ada with her very own customized version of the PUMA
ONE, engraved with the words ‘Believe in Yourself’ – a true inspiration to young
and ambitious women in football. The entire Ballon D’Or top three consisted of
PUMA players, with Pernille Harder (VfL Wolfsburg) and Dzenifer Marozsán
(Olympique Lyonnais Féminin) as runners-up. In the men’s category, world cham-
pion Antoine Griezmann was ranked third, while Sergio Agüero (Manchester City),
Diego Godín (Atletico Madrid), and Luis Suárez (FC Barcelona) were shortlisted.
MORE HEAT COMING IN 2019
After such a successful year full of achievements, new product releases,
disruptive campaigns, and new signings, it is vitally important to keep this
momentum going. That’s exactly what we aim to do in 2019, with even more ex-
citing partnerships and products coming your way�
On the product side, we will bring a new upgraded version of our two football
boot silos FUTURE and PUMA ONE with the release of the POWER UP pack.
Under the seasonal theme of gaming, we will leverage the crossover between
gaming and football to engage the modern football consumer�
World Champion Antoine Griezmann
Showcased at the FIFA World Cup 2018:
PUMA FUTURE (left) and PUMA ONE
(right) in the “Illuminate Pack”
In terms of new signings, we are proud to announce that PUMA will be partnering
with the City Football Group in a groundbreaking agreement� This partnership
will encompass the sponsorship of Manchester City (England), Girona (Spain),
Melbourne City (Australia), Sichuan Jiuniu F.C. (China), and Club Atlético Torque
(Uruguay). They will be joined by Valencia CF in Spain’s La Liga, completing our
portfolio of title-challenging clubs across Europe’s top five leagues.
35
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct
Cuban long-jump talent Juan-Miguel Echevarria
RUNNING & TRAINING
WHAT AN EXTRAORDINARY YEAR FOR PUMA’S
RUNNING & TRAINING UNIT, FILLED WITH NUMEROUS
MEDALS, RECORDS, AND EXCITING NEW SIGNINGS�
It is the very essence of PUMA to provide the fastest performance products to
benefit the fastest athletes on the planet. Blending technology, style, and culture,
we help athletes rule the track and become FOREVER FASTER�
HIGHER, FASTER, FARTHER
The legendary blue tartan tracks of the Olympic Stadium in Berlin were the
showcase of one of the highlights of 2018’s athletic year: the 24th European
Athletics Championships. PUMA of course did not miss out in the competition.
Our latest partner, the Norwegian Athletics Federation, reached new heights,
finishing 8th in the nations’ rankings – their best result in the history of this
tournament – while high jumper Marie-Laurence Jungfleisch won her first
international medal, getting bronze for the German team.
At the IAAF World Indoor Championships, triple jumper Will Claye won the gold
medal in Birmingham, while the young Cuban long-jump talent Juan-Miguel
Echevarria also took first place in his discipline with a jump of 8.46 meters.
Later that year, he ended up the 2018 World leader in Long Jump with a result of
8�68 meters�
At the CAC Games, which took place in Colombia, PUMA athletes won a total of
16 gold medals. And during the NACAC Senior Championships in Toronto, which was
co-sponsored by PUMA, additional medals were added to the collection.
Jamaican discus thrower Fedrick Dacres achieved his farthest throw, being
nominated ‘Athlete of the year of NACAC’ after a very impressive season.
Other notable results of the NACAC Games were Jenna Prandini’s gold medal in the
100 meters� Jenna was also the second female – after Merlene Ottey in 1982 – to win
the NCAA 100 meters and the National Outdoor 200 meters in the same year�
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PUMA Annual Report 2018
PUMA INTRODUCES HYBRID –
DESIGNED FOR THE EVERYDAY RUNNER
Fusing technology with style, PUMA introduced the new footwear silhouette
HYBRID in 2018. HYBRID reinvented midsole technology, combining two of
PUMA’s most performative technologies – IGNITE and NRGY. While the NRGY
beads provide ultimate cushioning, the IGNITE FOAM returns all energy. Instant
comfort is provided thanks to the knitted upper and its sock-like fit. This runner
is a real game-changer for both men and women.
LEWIS HAMILTON TAKES 24 / 7 TO THE NEXT LEVEL
Lewis Hamilton loves workouts that are not constricted to the gym� The multiple
Formula One world champion was once again the face of the 24 / 7 campaign,
that offers men a wardrobe that performs not only in the gym, but also on the
street� PUMA and Lewis Hamilton took over Marseille for the launch of the
training shoe Mantra FUSEFIT. With its aggressive rubber wrap-up, this shoe
provides stability in every workout while allowing quick, agile movements. The
knitted FUSEFIT upper allows customizable lacing while maintaining a sock-like
feel. This shoe helps men find their sport and push themselves to the next level.
TEAM FASTER GOES TO MIAMI
FEATURE STORY
White beaches, palm trees, romantic sunsets: Miami has a lot to offer. This year, the
Magic City hosted PUMA’s annual “Team Faster Summit.” The perfect background to
welcome a new member to the team: supermodel Adriana Lima, who is not only a bad
ass on the runways but also a kick-ass boxer. She was bold enough to challenge Usain
Bolt in the ring. He admitted: “I might be the fastest with my feet, but she certainly is fast
with her fists.” Having its fastest team in town, PUMA unveiled its latest training inno-
vations: the MODE XT for women and JAAB XT for men.
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PUMA Annual Report 2018
Selena Gomez wearing her STRONG GIRL collection
International supermodel Adriana Lima trains with PUMA
STRONG GIRL SELENA DEFIES THE NORM
As the ultimate inspiration for daring women, Selena Gomez is the muse
behind PUMA’s new Women’s training silhouette DEFY. She bravely opposes
conventions and carves her own lane without apologizing. Its platform sole,
inspired by the resurgence of the chunky-shoe trend, defies training standards
and goes beyond style. The platform fully supports side-to-side movement,
includes PROFOAM (PUMA’s energy-return foam), and provides lightweight
cushioning that adds functionality and brings style to training�
The most anticipated collection of the year was the STRONG GIRL collection,
Selena’s first collaboration with PUMA and a statement of strength and con-
fidence for today’s girls. The collection comprised footwear, apparel, and
accessories for bold and feminine looks. Blending Selena’s personal style with
PUMA’s classic court and running shoes, the SG Runner, a new shoe designed
and constructed by Selena Gomez, was one of the key pieces of the collection.
FROM RUNWAY TO THE GYM,
ADRIANA LIMA JOINS THE PUMA FAMILY
In autumn 2018, we were proud to international supermodel Adriana Lima
as the latest ambassador for our Women’s Training business. Adriana Lima
is a role model to millions of women, inspiring strength, grace, and confidence.
She is not only a supermodel who works out to prepare for fashion shows, but
she loves sports, especially boxing. Lima takes our female consumers on her
personal training journey, sharing her healthy and balanced lifestyle with
them�
38
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct BASKETBALL
BACK TO THE HOOPS
After a 20-year absence from the Basketball world, PUMA made a sensational
return to this sport in 2018. With our rich heritage, our unique approach and
strong stance in culture PUMA made headlines globally, excited the world of
basketball, and disrupted the U.S. marketplace.
LOOKING AT BASKETBALL THROUGH THE CULTURAL LENS
For PUMA, Basketball goes way beyond what happens on the court. Our goal is
to enhance and uplift performance basketball by mixing in the cultural elements
that surround the sport, breaking away from traditional lanes by putting our
focus on music, art, community, entertainment and fashion.
To make this happen, we partnered with none other than one of entertainment’s
biggest names: cultural icon Jay-Z. Taking the role of PUMA’s Creative Director
for the basketball category, Jay now oversees our creative strategy, creative
marketing and product design�
THE PUMA HOOPS SQUAD
To bring our strategy to life, we managed to secure some of the top players of
the 2018 NBA Draft in Marvin Bagley III (Sacramento Kings), Deandre Ayton
(Phoenix Suns), Zhaire Smith (Philadelphia 76ers), Michael Porter Jr. (Denver
Nuggets), and Kevin Knox (New York Knicks). We also signed partnership deals
with Rudy Gay (San Antonio Spurs), Danny Green (Toronto Raptors), DeMarcus
Cousins (Golden State Warriors), Terry Rozier (Boston Celtics), rounding out an
extremely impressive roster of NBA talent.
We were also proud to sign the WNBA’s biggest star, Skylar Diggins-Smith
(Dallas Wings), and anticipate adding many more players from the WNBA in the
coming seasons�
39
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct knit upper paired with our new Hybrid Foam technology, which offers extremely
responsive cushioning that reduces the impact of landings and enables quick
movements�
The Disrupt triggered positive noise around the industry and put PUMA HOOPS
into the daily conversation of basketball in the U.S. market.
WE’RE JUST GETTING STARTED...
For 2019, we plan to continue on our successful path. We will not only expand
our footwear range, but also add apparel and accessories to our collection –
to be worn on and off the court�
And of course we will have our eyes on potentially expanding our sports marketing
roster in both the NBA, WNBA, and this year’s upcoming 2019 draft.
The CLYDE COURT DISRUPT
pays tribute to basketball
legend and style icon
Walt “Clyde“ Frazier
LIFETIME CONTRACT FOR WALT “CLYDE” FRAZIER
FEATURE STORY
PUMA DISRUPTS THE COURT
Our approach of disrupting the game and conquering the hearts of basketball
players and fans is epitomized by the launch of our first new performance
Basketball footwear in nearly two decades: the Clyde Court Disrupt� The ag-
gressive colorway and sleek silhouette are tribute to the spirit and style of
basketball icon Walt “Clyde” Frazier. It features PUMA’s latest innovations
in footwear technology for an enhanced performance on the court: a lightweight
New York City, 1973, NBA shooting star Walt “Clyde”
Frazier partnered up with PUMA with the aim of
standing out. The result: a light low-top suede
leather shoe that gave him the support and flexibility
he needed to perform his signature moves� But not
only that. Their ever-changing color combinations
made him a style icon�
Last summer, we paid homage to our heritage in
basketball and signed Walt “Clyde” Frazier to a life-
time contract�
40
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct
PUMA’s celebrated P Cap continues to be Rickie Fowler’s go-to on tour
GOLF
COBRA PUMA GOLF PUSHES THE BOUNDARIES
OF PERFORMANCE & STYLE
In 2018, COBRA PUMA Golf stood for innovation, performance, and style, delivering
on-trend, performance-ready golf apparel, footwear, and accessories along with
game-changing equipment that helped golfers play with confidence and style, all
in the pursuit of game enjoyment�
AMBASSADORS WITH WINNING STYLE
Our athletes and ambassadors are bold, stylish, and extremely talented. In 2018,
they were crucial in increasing awareness, generating excitement, and providing
Tour-level validation for our key products.
Rickie Fowler closed out 2017 with a record-breaking win at the Hero World
Challenge, followed by a successful 2018 season that included six top 10s, and
a stellar runner-up finish at The Masters at Augusta National.
Bryson DeChambeau’s 2018 was one for the history books, finishing with nine
top 10s, and four wins, two of them coming during the exclusive FedExCup
Playoff events, catapulting him to number five in the Official World Golf
Rankings�
Lexi Thompson closed out the year, cruising to a four-shot victory at the CME
Group Tour Championship, displaying her tremendous talent, undeniable deter-
mination and unwavering drive to succeed�
41
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct Lexi Thompson in PUMA’s
PWRSHAPE skirt
Bryson DeChambeau after his stunning
win at the Memorial Tournament
COBRA continued to advance the ONE Length trend, introducing KING F8 ONE
Length, the second iteration of irons in the category. Aiding in the success of the
ONE Length irons, which surpassed all 2018 sales forecasts, was DeChambeau’s
incredible play and multiple wins, providing crucial Tour validation and aware-
ness around the unique irons�
ON-TREND & PERFORMANCE READY
The Spring / Summer’18 collection showcased fresh, fashionable patterns,
a versatile color palette, and cutting-edge technical elements designed to en-
hance on-course performance and provide looks that turn heads whether
golfers are in bunkers or at the office. 2018 also introduced new PWRSHAPE TM
TECHNOLOGY in women’s bottoms, engineered to provide a smooth, slimming
effect and the ultimate support. The four-way stretch fabric is soft, breathable,
and provides unrestricted range of motion, while the bonded waistband and
flatlock seam construction deliver maximum comfort.
MORE EXCITEMENT AND INNOVATION TO COME…
COBRA Golf will continue to introduce breakthrough technologies in 2019,
creating buzz and excitement around its innovative equipment, including the
KING F9 SPEEDBACK line up, delivering the ultimate formula for speed.
PUMA Golf is on trend to continue making a splash in the footwear category
with ‘NXT’ level golf shoes as well as on the apparel side with its highly anti-
cipated Jackpot Pant and new FUSIONYARN Flex and ALTERKNIT Technology
in its apparel�
SUEDE G
COBRA GOLF – DOING THINGS DIFFERENTLY
When it comes to product design and creation, COBRA Golf continues to push
the boundaries of what is possible, delivering groundbreaking technologies
throughout its entire product lineup�
In 2018, the brand introduced the KING F8 and F8+ drivers, featuring the industry’s
first CNC PRECISION MILLED driver face, paired with revolutionary 360 Aero
Technology, delivering the smartest, fastest, and most precise driver. COBRA’s
first fully-machined driver face utilizes a unique multi-directional CNC milling
pattern that delivers the highest level of precision for superior performance�
Additionally, COBRA continued to revolutionize the golf space with the intro-
duction of the first set of smart golf clubs, incorporating COBRA CONNECT’s
electronically-enabled grips in the entire KING F8 family. With COBRA CONNECT,
golfers can go beyond guesswork with detailed statistics and analysis on dis-
tance and accuracy, and track improvements with every club in the bag.
FEATURE STORY
To celebrate the 50th anniversary of PUMA’s iconic
SUEDE’s, the brand introduced the Throwback col-
lection which included the SUEDE G, the same iconic
style of a classic SUEDE shoe with modern perfor-
mance technologies ideally suited for the golf
course� Building off the retro design of the SUEDE G,
PUMA’s Throwback Collection for men and women
included accessories and apparel that pay homage
to yesteryear, including a polo, corduroy bottoms,
P Cap, and a T7 Jacket, delivering timeless style
from head to toe�
42
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct MOTORSPORT
FAST, FASTER, PUMA MOTORSPORT: WE LOOK BACK AT
AN INCREDIBLE YEAR OF SPEED, PASSION, AND POLE
POSITIONS�
Driven by innovation, creativity, and state-of-the-art technology, we deliver
ultra-high-performance racing equipment to the world’s fastest teams and
drivers, giving them the confidence and safety they need to perform on the
racetrack, while offering stylish apparel, footwear, and accessories to their fans.
Max Verstappen, Kimi Räikkönen, and Lewis Hamilton on the podium in Austin
NO PODIUM WITHOUT A PUMA
In Formula One, PUMA partners with the three teams that have been dominating
the sport’s top flight for years: Scuderia FERRARI, MERCEDES-AMG PETRONAS,
and Aston Martin RED BULL RACING.
2018 marked the year in which Lewis Hamilton was crowned World Champion
for the fifth time. He also spearheads our Men’s training campaign 24 / 7.
Winning eleven races this season, he also allowed his MERCEDES-AMG
PETRONAS team to take the Constructors’ World Championship for the second
time in a row. Scuderia FERRARI and Aston Martin RED BULL RACING followed
the unstoppable Mercedes team, ranking second and third respectively.
In addition, we are official suppliers of BMW MOTORSPORT in the racing series
DTM, IMSA, WEC, and Formula E, and of Team Penske in NASCAR and IndyCar,
providing them with the best possible equipment to be FOREVER FASTER�
The MERCEDES-AMG PETRONAS lifestyle collection has speed and style in its genes
43
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct MOVING THE RACE FORWARD TO THE FUTURE
With a form that recalls the sleekest lines on race cars, PUMA created one of
the most iconic sneakers of the early 2000s: the Future Cat. Updating this
asymmetrical, avant-garde silhouette with our latest technology, we brought
new excitement for low-profile sneakers to motorsport fans worldwide.
FULL SPEED INTO 2019
We are proud to announce a new, prestigious partner: Porsche Motorsport.
Starting 2019, PUMA will become technical supplier of the Porsche work teams
competing in the FIA World Endurance Championship (WEC) and the IMSA
WeatherTech SportsCar Championship (IWSC). Additionally, PUMA enters a
strategic partnership with Porsche Design, which features engineered products
that will perform at the top level and stand for the fusion of lifestyle and
performance wear�
The BMW Motorsport product line pleases
sports and fashion fans alike
FROM THE RACETRACK TO THE CAT WALK
We fuel the passion of motorsport fans across the globe with our PUMA Lifestyle
product range, taking inspiration from the performance gear worn by our part-
nered drivers and teams. Our licensed apparel, footwear, and accessories
collections leverage both the unique identity of the racing teams and PUMA’s
heritage in the world of motorsport�
In 2018, we experienced a true hype for PUMA Motorsport products, as excellent
results were achieved across all product categories and licenses, resulting in
increased shelf-space in stores and promising years ahead.
We reached a broader consumer base, going beyond the classic Formula One
fan, as we benefitted from the growing popularity of BMW MOTORSPORT and
MERCEDES-AMG PETRONAS lifestyle apparel in the hip-hop scene.
We continued to push design and fashion forward, launching groundbreaking
products such as the Evocat Sock LS sneaker, which brought PUMA an additional
iF Design Award in 2018. Designed for the Scuderia FERRARI lifestyle range,
this astonishing shoe fuses PUMA’s evoKNIT technology with street style and
comfort�
SPECIAL RACE GEAR FOR A VERY
SPECIAL OCCASION
FEATURE STORY
At the Abu Dhabi Grand Prix, Hollywood star Will
Smith played a viral social media prank on his buddy
Lewis Hamilton. Smith kidnapped Hamilton, tying
him to a chair right before the race� The “Men in
Black” star wanted to get a “once in a lifetime op-
portunity,” discreetly replacing the Formula One
champion to compete in the race himself�
PUMA was one of the co-conspirators, providing Will
Smith full MERCEDES-AMG PETRONAS Motorsport
race gear, which was specially crafted for him in
Italy. Luckily, this was all a joke and Hamilton could
compete and win the season’s final race.
44
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct SPORTSTYLE
ANYONE AS PASSIONATE ABOUT SPORTS AS WE ARE CAN
SHOW IT EVEN OUTSIDE OF THE GYM, FIELD, OR TRACK�
With PUMA’s range of innovative, sports-inspired lifestyle products as well as
classic silhouettes, we reach out to anyone looking for an authentic style rooted
in sports. Our Sportstyle designs reflect our rich sporting heritage and attitude,
and the message is clear: We’re always FOREVER FASTER�
SUEDE 50 #FORALLTIME
Celebrating the SUEDE’s legacy with the SUEDE 50 campaign, PUMA tapped
into creatives, designers, and artists to put their spin on the iconic silhouette.
From Swarovski crystal-studded sneakers to designs inspired by MCM, Pepsi,
Barbie, and Hello Kitty, the SUEDE’s 50th anniversary celebrations brought to
life unique iterations of the classic silhouette under the motto #FORALLTIME�
A must-have sneaker for every generation over the last five decades, the time-
less classic rules the streets in style�
WHERE THE GYM MEETS THE RUNWAY
Continuing our commitment to empower women with the right products,
PUMA launched street-ready silhouettes that epitomized their individuality,
style, and performance. Keeping the sneaker game on point, we introduced an
Archive-inspired all-new CALI for women, featuring brand ambassador Selena
Gomez. Channeling West Coast vibes, the re-imagined CALI silhouette
conquered the streets in style with its cool and understated aesthetics�
With progressive design and performance-inspired details, the MUSE collection
launched in 2018 echoed PUMA’s #DoYou campaign, inspiring women to be
confident, motivated, and uncompromising in every aspect of life. Sported by
brand ambassador Cara Delevingne, the sneakers epitomized individuality,
style, and performance.
45
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct FUTRO - A MIX OF FUTURE AND RETRO
FUTRO is where we react to and influence street culture. In 2018, PUMA
embraced the future and honored the past by resurrecting OG-inspired styles
with the launch of two new Futro franchises: THUNDER and RS. Each shoe
remixed current trends with classic PUMA details and technologies.
FUTRO is a term originally conceived by PUMA’s SELECT partner ADER ERROR,
and is used by PUMA as a new product classification and design ethos, guiding
us as we create future street icons with our retro sport DNA�
THUNDER
The brand’s unconventional approach to chunky
design first came to the fore with the launch of
THUNDER. Inspired by the 90’s running silhouette and
the PUMA x McQueen collaboration, the sneakers
payed homage to past collaborations and silhouettes
ahead of their time. The exaggerated tooling, blown-up
proportions, and loud color-blocking reserved a spot
for the THUNDER in the global fashion community.
RS
This year marked PUMA’s reboot of the 80’s Running
System (RS) range with the all-new RS-0 model. With
an innovative design that evolved from the past and is
distinctly future-looking, the sneakers were rein-
vented and rebooted for a new world. Later in the year,
PUMA took it to the next level with the introduction of
RS-X, which was all-things extreme, exaggerated, and
remixed.
Pushing culture forward, 2018 also saw PUMA partner with powerful brands
that exemplified extreme reinvention in their respective industries. From Hasbro
and Mattel to SEGA, Polaroid, and Roland, the most iconic FUTRO stories were
brought to life with exclusive drops that successfully broke the monotony of
streetwear through innovation in design, style, and technology.
West Coast Vibes: Selena Gomez wears the CALI
46
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct
CELL - SINCE 1998
When PUMA CELL technology first arrived in 1998,
it was revolutionary� Celebrating 20 years of the OG
sneaker, CELL was pulled straight from the Archive
in a new context that highlighted its chunky glory and
throwback good looks for a new era of streetstyle�
Leading the pack with two pinnacle models from the
90’s, CELL ENDURA and CELL VENOM were rein-
troduced in 2018 as street-ready silhouettes.
A ROSTER OF CREATIVES
Partnering with up-and-coming brands across the world, PUMA has worked
with creative trailblazers like ADER ERROR to elevate sports-inspired style. In
their debut collection with PUMA, ADER ERROR, as the Creative Director, put
FUTRO as the main theme, bringing their forward-thinking aesthetic and fusing
their fondness for nostalgia onto iconic PUMA silhouettes. With two successful
drops and more in the works, PUMA x ADER ERROR capsule collections were
all things extreme and FUTRO, perfectly fusing street sensibilities to sport-
inspired silhouettes. 2018 also saw PUMA work with designers on OUTLAW
MOSCOW, ATELIER NEW REGIME and HAN KJØBENHAVN that perfectly fused
runway-worthy styles with sports-inspired street wear.
PUMA X ADER ERROR collection
Playful designs: PUMA x tinycottons
KIDS
In 2018, PUMA introduced a range of capsule collections for kids in partnership
with popular brands like Hot Wheels, Transformers, and Barbie. This year also
witnessed the return of successful collaborations with Justice League and
tinycottons for a collection designed with bright colors and playful patterns that
give every style a unique personality�
MORE EXCITING STYLES AND COLLABORATIONS TO COME...
Riding on the success of bold and futuristic silhouettes, PUMA is launching
brand-new sneakers like ALTERATION and STORM, while also bringing back
court classics like RALPH SAMPSON and ROMA, as well as new iterations of
CELL that exemplify the brand’s sport-meets-fashion approach. Continuing with
FUTRO, 2019 will see new iterations of RS and CALI dropping amazing new
stories throughout the year�
In terms of collaborations, PUMA will announce new and inspiring partnerships
that encapsulate a vibrant mix of creative brands and trailblazers from the
fashion and music industries for a modern, experiential approach to sports-
inspired fashion�
47
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct LICENSING
PUMA’S STRATEGY FOR LICENSING FOCUSES ON BUILDING
PRESENCE AND AWARENESS IN PRODUCT CATEGORIES
THAT ARE OUTSIDE ITS CORE AREAS, BUT WHICH
COMPLEMENT AND ENHANCE ITS OWN PRODUCTS�
PUMA’s licensees offer desirable and compelling products to the end consumer,
while adding value to PUMA’s brand strength and appeal.
PUMA partners with specialized market leaders with the aim of maintaining the
highest standards of quality across all complementary product categories�
These brands design, develop, manufacture, and distribute products with PUMA
trademarks in line with PUMA’s brand positioning, specifically targeting the
PUMA consumer.
PUMA WATCHES BY FOSSIL
PUMA and watch manufacturer Fossil have joined forces through a multi-year
global license partnership agreement for the design, development, and distribu-
tion of PUMA-branded watches and smartwatches. The agreement is a long-
term collaboration which sets both companies on an exciting journey to develop
compelling products with a sporty design that can be worn for training purposes
as well as for everyday activities�
The first collection of analog watches will be available worldwide in Spring /
Summer’19. The products will be available on puma.com and in selected PUMA
stores, as well as in selected department stores, specialty retailers, and
e-commerce channels in Fossil Group‘s global network.
PUMA EYEWEAR BY KERING EYEWEAR
Since July 2015, PUMA has partnered with Kering Eyewear for the key category
of Sunglasses and Optical Frames. 2018 was a year of consolidation of the PUMA
Eyewear business with specific focus on the Performance, Sportstyle, Active
and Kids’ categories. With its extensive distribution system in around
100 countries, Kering Eyewear has launched two seasonal collections per
year since the start of the partnership�
PUMA WORKWEAR BY WATEX
PUMA workwear is a range of apparel specifically developed by PUMA’s new
license partner WATEX and aimed at the workwear market. The collection was
introduced to the trade at A+A in Düsseldorf in October 2017 and, since then, has
successfully launched at selected accounts and countries�
PUMA SAFETY FOOTWEAR BY ISM
An established German manufacturer and distributor of safety shoes, ISM has
been PUMA’s partner for PUMA safety shoes for well over a decade. The PUMA
safety shoe collection enjoys distribution in more than 35 countries and in 2018,
ISM continued to distribute the product offer under various product lines, such
as “Urban,” “Technical,” and “Motion”.
PUMA FRAGRANCES BY L’ORÉAL
PUMA’s license partner in the Personal Care category is L’Oréal, who in 2016
launched the first body sprays in France. Since then, L’Oréal have developed
nine deodorant sprays and fragrances and extended their distribution to include
mainly Germany and a few other countries in Eastern Europe and Latin America�
PUMA optical frames by Kering Eyewear
48
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct Our accessories combine all the attributes PUMA stands for: quality, creativity,
and innovation. Our bag and headwear ranges perfectly complete every outfit,
while convincing with functionality and style�
REFINED ACCESSORIES REFINE EVERY
SPORTSTYLE OUTFIT
The ARCHIVE SUEDE BOW WOMEN’S BACKPACK turned quite a few heads with
its feminine interpretation of the classic PUMA backpack, combining an
enchanting bow with pastel colors� Displayed in an ad campaign featuring
Cara Delevingne, the SUEDE BOW backpack was an instant success and sold
out immediately�
Toward the end of the year, Selena Gomez launched her first collection for
PUMA. As one can guess from its name, the STRONG GIRL collection has
strength stitched into every piece. With confident colors and bold silhouettes
from head to toe, the collection was elevated by refined accessories, including
beanies, bags and gloves.
SUEDE 50 BOOSTS VISIBILITY THROUGH EXCITING
PARTNERSHIPS
In 2018, PUMA celebrated the 50th anniversary of its legendary shoe, the
SUEDE, with 37 unique collaborations in partnership with some of the most
prestigious names from the worlds of music, fashion, street, and pop culture.
Accessories rounded-up the key styles of the SUEDE 50 initiative and even
rivaled the shoe in terms of popularity: The HELLO KITTY BACKPACK, the
PUMA X KARL LAGERFELD SHOULDER BAG or the BARBIE caps – just to name
a few – brought a lot of visibility to our accessories category and products sold
out fast�
DRIVING PERFORMANCE INNOVATION
With our STANCE HOODED BACKPACK, PUMA developed the ideal companion
for street running, bringing the best of our innovation, performance, and design
together, as the backpack minimizes carry stress and maximizes performance
in an urban environment during the day� This backpack was awarded the indus-
try’s most prestigious prizes: The Red Dot Award for Product Design and the
iF Design Award�
WORN BY CHAMPIONS
Worn by our assets at the world’s biggest sports events, our caps increasingly
find their place on the podium. Golf champions Rickie Fowler and Bryson
DeChambeau never compete without their stylish caps, while in Formula One,
RED BULL RACING driver Max Verstappen and Scuderia FERRARI’s Sebastian
Vettel love to wear their Motorsport Teamwear caps throughout the season�
49
Classic with a feminine twist: the SUEDE BOW BACKPACK
SUEDE 50 special: PUMA X
KARL LAGERFELD collection
ACCESSORIES
PUMA’S ACCESSORIES BUSINESS UNIT COMPLEMENTS
OUR PRODUCT RANGE WITH APPEALING AND VARIED
COLLECTIONS, COVERING SPORTSTYLE, RUNNING,
TRAINING, AND MOTORSPORT�
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationProduct O
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PUMA Store in Guangzhou, China
TOP OPENINGS 2018
IN 2018, WE FURTHER EXTENDED AND IMPROVED OUR
RETAIL NETWORK, OPENING NEW STORES IN EXCITING
LOCATIONS, WHILE GIVING SOME OF OUR EXISTING
STORES A NEW LOOK�
The majority of our full-price stores and factory outlets worldwide follow the
FORE VER FASTER store concept, offering a broad selection of PUMA’s
Performance and Sportstyle products. This helps us to fulfil our mission of
becoming the fastest sports brand in the world�
In addition, PUMA opened further SELECT Stores, offering a dedicated space to
its premium sportstyle products, featuring the brand’s newest product ranges
and high-profile collaborations.
GUANGZHOU, CHINA
PUMA opened its largest full-price store of 2018 in Guangzhou, China. With
252 square meters of sales area, the store offers a wide range of products from
its Sportstyle, Motorsport, Teamsport, and Running & Training categories.
PARIS, FRANCE
The newly refitted store is based in Boulevard de Sébastopol, at the very heart
of Paris. With over 200 square meters of sales area, the store space offers a full
range of commercial products from PUMA’s Performance and Sportstyle
categories, as well as special limited collections.
PUMA Annual Report 2018
MARINA BAY SANDS, SINGAPORE
In March 2018, PUMA opened a new SELECT Store at Marina Bay Sands in
Singapore. The retail concept is elevated and features the best of PUMA’s
Sportstyle range, with a focus on its premium products. One key section of
the store is the impressive footwear wall-display showcasing the latest
lineup of PUMA SELECT sneakers.
MADRID, SPAIN
PUMA reopened its factory outlet store in Madrid in summer 2018. The store is
located in the Las Rozas Village, a go-to place for shopping fans. The PUMA
store has 155 square meters of sales area, offering a wide range of apparel,
footwear, and accessories, with a particular focus on Motorsport.
HONG KONG, CHINA
Another brand-new SELECT store was inaugurated in Hong Kong in August 2018.
The store is located in the Elements Shopping Mall and features the brand’s latest
products and collaborations. With 110.5 square meters of sales area, the store
space offers all premium products like ADER ERROR or PUMA x TYAKASHA.
SELECT store at
Marina Bay Sands
in Singapore
Madrid factory outlet store in Las Rozas Village
Teamsport section at the Guangzhou store
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PUMA Annual Report 2018
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PEOPLE@PUMA ���������������������������������� 54
PUMA - A GREAT PLACE TO WORK �����57
HR GOES DIGITAL ���������������������������������61
PUMA Annual Report 2018
PEOPLE@PUMA
As a company, we can only reach our goals when we have the right people. We
depend on finding, connecting, and developing the right talent, thereby ensuring
PUMA´s future growth.
Competing for the best talent on the market, our intention is to raise awareness
of PUMA as a top employer that offers challenging roles in international teams,
while providing professional talent management and great development
opportunities�
DIVERSITY:
ENSURING A DIVERSE AND INCLUSIVE ENVIRONMENT
PUMA’s team spirit thrives on the diversity of people with various skills, back-
grounds, and experiences. PUMA’s unique company culture reflects, embraces,
and respects the individuality of every single person, while providing the
opportunity for all employees to achieve their full potential� This is the key to
creating effective and competitive teams that drive forward innovation and
success. At our headquarters in Herzogenaurach alone, we employ people from
59 different nationalities�
Dietmar Knoess
DEAR SHAREHOLDER,
Our people are our most important asset, as they
enable PUMA to push sports and fashion forward.
Their combined talent, dedication, and creativity help
us to become the world’s fastest sports brand.
Recruiting, managing, and retaining talent, as well as
developing well-performing teams and leaders, is at
the core of our mission. We aim to offer our employees
an attractive work environment and a unique corporate
culture. We are committed to improving our em-
ployees’ wellbeing, helping them achieve a good
work-life balance and encouraging their personal
development�
To help us master our role as a leading employer,
we have defined a set of values that describe our
unique work culture and serve as a guideline for
our employees. Under the label SPEED AND SPIRIT,
we inspire our people to follow the principles BE
DRIVEN, BE VIBRANT, BE TOGETHER, and BE YOU.
2018 was an exciting year for the brand and an important year for the development
of our company. We reinforced our efforts in talent management, implemented
our new office concept at our international PUMA locations, and sped up our
processes through digitalization�
A big thank you to our employees, who put all their efforts, dedication, and
passion into making PUMA as successful as it is today.
Sincerely,
Dietmar Knoess
Global Director Human Resources
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PUMA Annual Report 2018
T�1 WOMEN IN LEADING POSITIONS – PUMA GROUP (in %)
Region
Europe
EEMEA
North America
LATAM
APAC
TOTAL
2018
2017
2016
2015
2014
31
43
48
38
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35
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TALENT MANAGEMENT:
FINDING AND FOSTERING THE BEST PEOPLE
Our integrated and consistent talent management drives our performance and
development culture. We identify and promote talent within teams and across
functions, regardless of their job level.
This includes offering a wide range of tailored trainings to accelerate professional
development towards becoming a leader, providing the required skills to manage
teams�
Having implemented systematic talent conferences, we assess the entire PUMA
workforce every year. Such conferences are conducted worldwide, involving all
levels of management, up to and including the Management Board.
Employees are being evaluated on criteria such as individual performance and
competencies, potential, ambition, career progression, and mobility. The targeted
analysis of our employees’ profiles allows us not only to prepare individual devel-
opment plans, but also to match internal talent with vacancies, helping us to find
potential successors within the company� This process has a proven track record
of attractive career and development opportunities for our employees and efficient
succession planning�
Speed Up / Speed Up2
With Speed Up and Speed Up2 we provide personal development programs for
employees, with the aim of preparing selected talent for the next step in their
careers. Designed for upcoming or seasoned leaders, both programs offer
targeted training, consisting of interdisciplinary projects and tasks, mentoring
and coaching, as well as job rotations. An additional component of the Speed Up
programs lies in raising the participants’ visibility at top management level,
while encouraging them to build cross-functional networks.
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Based on this belief, we committed ourselves to the PUMA Code of Ethics (2005)
and to our Diversity Charter (2010) to ensure a fair work environment and equal
opportunities for all PUMA employees, regardless of their gender, nationality,
ethnicity, religion, disability, age, or sexual orientation.
Last year, 86% of our employees worldwide held permanent contracts, while 41%
of our people were covered by a collective bargaining agreement�
Another strength of our teams lies in the well-balanced gender distribution:
Across all PUMA locations, the male to female ratio is 52 percent to 48%, a stable
tendency over the past years� This shows we provide a work environment equally
attractive to women and men�
At PUMA, we promote gender balance at all management levels. We continue
our efforts to raise the proportion of women across all levels of management�
In 2018, the groupwide percentage of women in management positions amounted
to 40%�
Until the end of October 2021, we want to achieve an even more ambitious goal:
We aim to have at least 30% of women on the Supervisory Board, 20% on the
Management Board, while having 30% and 40% of women at the two manage-
ment levels below the Management Board respectively�
Additionally, we offer women specific training and access to inspirational net-
works. The interaction with experienced female executives should encourage
our female employees to aspire to leadership positions within the Group�
PUMA Annual Report 2018
LEARNING: EMPOWERING LIFELONG LEARNING
At PUMA, learning is not only part of our culture, but is a key part of our strategy
to constantly train our people and offer them a development path. We support
our employees in their lifelong learning, which has become a necessity in a world
that changes at an ever-increasing pace.
In 2018, we were excited to host PUMA’s first Design Sprint, gathering Europe’s
most promising design students, who got the chance to prove themselves to
PUMA’s designers and Creative Directors. After two days of brainstorming,
sketching, and creating drafts, the students showcased their results to PUMA
top executives on the PUMA BRIDGE.
Our efforts in learning and training include the integration of FUTURE
CHAMPIONS into our workforce, along with the personal development of our
employees and managers�
Another promising event was the INNOVATION SPRINT, a hackathon offering
students with a tech or digital background the chance to work on real cases,
such as the improvement of the PUMA TRACK app.
This way we ensure we have the right competencies available today as well as
tomorrow�
Future Champions
Identifying talent at a very early stage is key to fostering the next generation of
employees that will contribute to PUMA’s future success.
In this context, we offer high school graduates and students a multitude of options
to start a career in a challenging international work environment�
To spot our FUTURE CHAMPIONS, we cooperate with a large range of univer-
sities and schools at an international level. Throughout the year, PUMA hosts
various events specially designed for students at our international headquarters
and abroad�
EMPOWERING THE NEXT GENERATION
In 2018, 15 dual-program
student s and tr ainees
joined the PUMA Head-
quarters in Herzogenau-
rach. In total, PUMA had
49 apprentices and dual-
progam students by the
end of 2018, majoring in
a range of subjects, from
International Business
to IT�
Events like these offer students of different academic backgrounds the oppor-
tunity to look behind the scenes, get first practical experience in their domain,
and learn from professionals. Some participating students were even identified
for an internship�
LEARN@PUMA
Beyond attracting new talent, we are committed to continuously developing our
people in the best possible way�
Learning is optimized when it’s done 70% on the job, 20% by learning from
others, and 10% with training and self-study. With this formula in mind, we have
designed our PUMA learning program, which offers a wide range of training and
workshops, either pre-defined or tailored to individual needs, both on-site and
online�
In 2018, 14,884 employees worldwide participated in training courses and work-
shops over a total of 132,450 hours.
ILP und ILP2
At PUMA, it is a key priority to develop leaders who can navigate through
complexity and master challenging experiences. Our modular International
Leadership Programs, ILP and ILP2, have been set up to provide the best
preparation and support for unlocking our peoples’ abilities to lead teams in
our company. Conducted at a global level and across all regions, they convey
a general understanding of what leadership means at PUMA, while providing
the needed skills and tools to become a successful leader. With modules
including “mindful leadership,” “agile working methods,” and “leading diverse
teams,” we help participants to fulfill their role, while preparing them for
future challenges�
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PUMA Annual Report 2018
PUMA –
A GREAT PLACE TO WORK
Offering an attractive and pleasant work environment, on and off the job, has a
proven positive impact on employee engagement, increasing loyalty and
commitment to the company�
This is what we had in mind when we developed our new office concept, which
provides our employees with the working conditions of the future. We also
created a unique wellbeing program, which takes care of employees’ health and
supports them in balancing their work and private lives�
We are proud to see that our efforts continued to be rewarded by major
international experts, based on employee feedback. In 2018, we won more than
20 Employer Awards worldwide, recognizing PUMA’s unique work culture and
the ongoing pursuit of offering a workplace where our employees can grow and
take on new opportunities, while finding the right work-life balance.
In Germany, PUMA was ranked seventh of 1,000 companies in the “Top National
Employer Award” by business magazine FOCUS, while coming in second at the
Leading Employer Award. On Glassdoor, PUMA has established itself as the top
employer of the industry, reaching the fifth position in the national ranking.
For the third consecutive year, PUMA Nordics have received the Swedish Award
“Karriärföretagen.” In Asia, our teams based in China, Taiwan, the Philippines,
and Hong Kong received the “ HR-Asia Award.” In the United States, our Boston
and Carlsbad teams were ranked in the Top 10 among the “101 Best and
Brightest” employers.
2018
N ATI O N A L
E M P LOY E R
2018
GERMANY’S BEST
EMPLOYERS
IN COMPARSION
I N CO O P E R ATI O N WITH
FOCUS–BUSINESS
0 1 | 2 0 1 8
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PUMA’S OFFICE CONCEPT:
CREATING THE WORKPLACE OF THE FUTURE
After two years of construction, our new headquarter office building “NOHO” in
Herzogenaurach was completed in the summer 2018. The new part, which is
connected with the existing building through the PUMA BRIDGE, has an effective
area of 10,200 square meters, spreading across six floors. It can accommodate
up to 550 employees, providing space for future growth. In total, our global head-
quarters have a capacity of almost 2,000 employees. Having all teams centralized
in one place supports our mission to become FOREVER FASTER�
This new building provides state-of the-art offices that foster communication,
teamwork, and productivity. After having conducted a survey among our work-
force, we developed an innovative global office concept that transforms our
offices into dynamic environments for creativity, focus, and connection. Depending
on the type of work they are doing, our employees can choose between the
different areas and a variety of office features. The friendly office design, which
incorporates light colors, natural materials, and large windows, helps people feel
at home while working. We have been refurbishing all of our international offices
according to these principles�
PUMA Annual Report 2018
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WELLBEING@PUMA: IMPROVING OUR
EMPLOYEES’ WELLBEING
At PUMA, fostering the wellbeing of our people is a top priority. Our wellbeing
approach merges four aspects: FLEX, SOCIAL, FINANCE, and ATHLETE�
Pioneered in our headquarters in Germany, this comprehensive wellbeing
program has been embraced by all PUMA locations around the world and was
adapted to local needs and regulations�
We are proud to have received the German “audit beruf & familie” (job & family)
certificate again last year, after our headquarters had been reaudited successfully.
FLEX
For us, flexible working is the basic equipment all our players need to have.
We know that our employees are looking for dynamic careers in modern
workplaces, and we give our best to provide a range of solutions that suit the
different stages in their lives. The group-wide average age of our employees
is 33. With flexible working hours, mobile working, sabbaticals, as well as a
range of family services and childcare opportunities, we support a healthy
work-life balance. We offer and promote part-time opportunities: In 2018 our
part-time employment ratio was 23%.
PUMA Annual Report 2018
T�2 EMPLOYMENT CONTRACTS (FULL-TIME / PART-TIME)
IN HEADCOUNTS - PUMA GROUP
GENDER DISTRIBUTION
Employment contracts
Female
Male
Diverse
TOTAL
Full-time
Part-time
Totaltime
5�152
1�990
7�142
6�259
1�990
7�612
2
11
13
11.413
3.354
14.767
T�3 EMPLOYMENT CONTRACTS (PERMANENT / TEMPORARY)
IN HEADCOUNTS - PUMA GROUP
Regions
Europe
EEMEA
LATAM
APAC
TOTAL
PERMANENT
TEMPORARY
Male Female Diverse
Male Female Diverse
1,509
1,395
1,732
1,072
1,238
774
1,166
1,511
6,747
5,977
10
0
1
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229
81
235
103
219
867
354
111
291
61
347
1,164
0
0
2
0
0
2
North America
1,102
1,225
PARENT-CHILD-OFFICE
Last year, we refurbished our
Parent Child Office at our
headquarters in Herzogen-
aurach. If needed, it offers
parents the possibilit y to
bring their children to the
office and work while their
children play in the room�
ATHLETE
What connects our employees is their common love for sports. We offer them
the best conditions to work out whenever they feel like it� A major highlight in
2018 was the opening of our new sports facilities at the PUMA Headquarters in
Herzogenaurach�
Football, volleyball, TRX, or yoga - there’s something for every sports fan. The
new building offers a variety of different sports facilities including a gym, an
outdoor area with a soccer pitch, and basketball and beach volleyball courts.
The new fitness area has two course rooms and state-of-the-art training
equipment�
We offer a variety of sporting events and activities throughout the year, as well
as regular internal sports classes using our own sports facilities� No fewer than
36 events and 23 weekly sports classes were organized for our people at our
headquarters in 2018, with a total of 1,253 registrations. Similar initiatives and
courses are being adopted worldwide�
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PUMA Annual Report 2018
G�1 HOURS OF COMMUNITY ENGAGEMENT ACTIVITIES PER REGION
Total: 19,724
EEMEA (3,547)
APAC
(6,794)
LATAM
(2,254)
Europe
(3,698)
North America
(3,431)
CHARITY CAT
A team of about 20 PUMA employees founded
Charity Cat in 2004. Since then a lot of PUMA
employees, but also some external mem-
bers, have joined the organization. All team
members are volunteers and donate their
free time to different charitable projects�
With the help of PUMA, Charity Cat gets the
possibility to use PUMA’s infrastructure and
other internal resources, such as no longer
needed product samples�
Throughout the year, Charity Cat regularly
sets up huge product sample giveaways and
encourages PUMA employees at the Head-
quarters in Herzogenaurach to donate an
appropriate amount of money for a good cause
in return�
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COMMUNITY ENGAGEMENT:
CREATING A POSITIVE IMPACT FOR THE COMMUNITY
Thanks to our employees all around the world, we were able to continue our
engagement with local communities� Our goal was to reach a total of hours spent
on community engagement that equals the number of our average FTE (Full
Time Equivalent) employees per year�
We reached out to all of our people worldwide to inform them about the ongoing
projects and encourage them to participate. In addition, an online platform has
been set up on which projects and engagement can be registered� Local Human
Resources departments found new partners in their communities and initiated
a variety of projects�
In total, initiatives led by our subsidiaries in five regions racked up to a total of
19,724 hours (1,589 for PUMA SE) of community engagement, focused on
protecting the environment, promoting health and fitness, fighting
discrimination, and supporting children with their education. Considering that
the average number of FTEs in 2018 was 12,192 (1,041 for PUMA SE), we far
exceeded our target.
PUMA Annual Report 2018
HR GOES DIGITAL
In 2018, we pushed our digital frontiers faster and further. In our mission to
become the fastest sports brand in the world, we are striving to offer digital
solutions that respond to our employees’ needs and offer potential candidates
a state-of-the-art digital journey.
Furthermore, we aim to simplify and align our HR processes worldwide, aiming
to set up the infrastructure we need to enable future growth�
PUMA’S NEW CAREER PAGE: OFFERING
A STATE-OF-THE-ART DIGITAL CANDIDATE EXPERIENCE
In 2018, we relaunched our corporate website with an extensive career section
at its heart. Focusing on candidates’ needs, the new career section enables
finding relevant open positions fast, while giving deep insight into PUMA’s
unique corporate culture. Through our location and team pages, candidates
can get a first glimpse of their potential future workplace and learn more about
teams and responsibilities�
OCCUPATIONAL HEALTH AND SAFETY:
KEEPING OUR EMPLOYEES HEALTHY AND SAFE
Providing a work environment that keeps our employees healthy and safe is a
key priority. We have set ourselves the goal to consistently reduce the average
injury rate every year. In 2018, our goal was to stay below an injury rate of 1.0 ac-
cording to the Occupational Safety and Health Administration (OSHA)� Con-
ducting safety-related training courses in all of our locations, we additionally
offer online training programs to prepare employees for potential emergency
situations and thus reduce the number of accidents�
In 2018, we conducted a total of 12,096 hours of safety training. Over the past
year, 6,039 employees have been trained in fire safety and 2,720 in first aid.
On a global scale, only 101 occupational accidents that implied work loss were
registered in 2018. According to the OSHA, it is equivalent to an injury rate of
0.81 compared to 0.72 in 2017, showing that we have achieved our goal for 2018.
For PUMA SE in Germany, the (OSHA) injury rate stood at 0.90.
G�2 INJURY RATE ACCORDING TO OCCUPATIONAL SAFETY AND
HEALTH ADMINISTRATION (OSHA rate)
1�0
0�8
0�6
0�4
0�2
0
1�07
0�87
0�84
0�81
0�72
2014
2015
2016
2017
2018
OSHA rate (work accidents / 100 full-time emoloyees)
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PUMA Annual Report 2018
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We have put our focus on creating a seamless candidate experience that allows
candidates to intuitively navigate between the different platforms, including
the corporate sections of the website, review channels, and the job search
function�
WORKDAY: SIMPLIFYING WORLDWIDE HR PROCESSES
We continue to simplify and accelerate business processes through digita-
lization� After introducing WORKDAY, one of the world’s leading human capital
management system in 2017, we rolled out this system to include other
modules such as “talent and performance,” “time & absence management,”
and “learning”.
Having implemented WORKDAY in all our locations, we now have a worldwide
solution for recording work time, vacation, and other absences. Employee
profiles and organizational charts can also be consulted in a few clicks.
WORKDAY also makes life easier for our employees, offering them an easy-
to-use platform on which they can track their working time, manage their
absences, recruit or apply for open positions, and track their performance
and pay�
PUMA LEARNING PLAZA:
MAKING LEARNING INSTANTLY ACCESSIBLE
Digital learning is not the next big thing – at PUMA it is the big thing right now. We
have enriched our learning catalogue with a wide offer of online courses, acces-
sible according to our employees’ needs: Anytime, anywhere, and on any device.
Our learning platform PUMA LEARNING PLAZA is available to all PUMA
employees and managers worldwide�
We have developed and designed customized PUMA trainings, such as the
onboarding eLearning training “Inside PUMA,” which offers valuable insight into
the company, our product creation cycle, and brand strategy.
For our E-learning course “PUMA Talent Development Talk,” we received the
“eLearning Award 2019.” This content supports our managers worldwide, while,
at the same time, allowing them to familiarize themselves with the topic of talent
development talks, ensuring they are prepared to speak to their team members.
In addition, employees can access selected business booklets, articles, and
TED videos. We also offer our employees free access to the interactive learning
platform lynda.com�
PUMA Annual Report 2018
FOREVER FASTER SUSTAINABILITY
AIMING HIGHER
MEANINGFUL PROGRESS AND IMPACTS
SELECT SECTIONS OF PUMA’S 2018
SUSTAINABILITY PERFORMANCE
64
65
66
69
HUMAN RIGHTS AND SOCIAL COMPLIANCE �����������������������69
REDUCING IMPACTS ON THE ENVIRONMENT �������������������� 72
HEALTH, SAFETY & CHEMICALS COMPLIANCE ����������������� 79
WHERE WE ARE GOING
ENDNOTES
CORPORATE GOVERNANCE
82
84
85
6363
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability FOREVER FASTER
SUSTAINABILITY
MESSAGE FROM
MICHAEL BENNETT,
GLOBAL DIRECTOR SOURCECO
At PUMA, we endeavor to be the fastest
sports brand in the world. We understand
that achieving this ambitious goal requires
a clear, focused strategy, but we also
recognize that the challenges facing the
world from a sustainability perspective will
not be solved by the actions of any single
brand or company. It is only through
collective action with our industry peers via
industry-wide initiatives and organizations,
that progress will be made on key sustain-
ability issues, such as climate change and
human rights.
Michael Bennett
We believe that exercising our influence in corporate sustainability means taking
our work out of the board room and into the factories where our products are
made, and into the marketplace where they are sold. In 2011, PUMA became the
first company to place a monetary value on its environmental impact, funda-
mentally shifting the landscape of corporate sustainability and the way we
operate. Since then, we have maintained our commitment to sustainability in
areas including product innovation, such as our climate-neutral collection in
collaboration with ASOS, and the use of more sustainable materials such as
Better Cotton and bluesign® certified polyester.
To ensure alignment with global priorities, we launched our 10FOR20 Targets
in 2015, linking each of PUMA’s 2020 targets to the relevant United Nations
Sustainable Development Goals. Under this sustainability strategy, we have
continued to develop and implement initiatives across our supply chain, both in
regions in which PUMA operates, and where our products are manufactured.
For example, our award-winning vendor financing program incentivizes
environmental and social responsibility by rewarding suppliers who score
highest with better financing options; in addition, we rolled out the Zero
Discharge of Hazardous Chemicals Foundation (ZDHC) waste water guidelines
in our main wet processing factories.
Looking at 2020 and beyond, we will continue working with our industry peers
and pushing industry-wide initiatives to help usher a more sustainable future
for the next generations of athletes, customers, and people everywhere.
Sincerely,
Michael Bennett
Global Director SourceCo
The Sustainable Development Goals (SDGs) from the United Nations define the
global development priorities for 2030 and look to join efforts among business,
governments and civil society around a defined set of targets. PUMA’s 10FOR20
Strategy supports the SDGs’ implementation in the regions where PUMA
operates and where PUMA products are manufactured. Throughout this
sustainability chapter, we highlight which SDG(s) we suppor t with our
sustainability targets.
6464
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability AIMING HIGHER
INTERVIEW WITH STEFAN SEIDEL,
HEAD OF CORPORATE SUSTAINABILITY
HOW IS PUMA TAKING ACTION IN
TERMS OF SUSTAINABILITY?
At PUMA, our sustainability focus is clear:
we are committed to creating positive
social and environmental impact by taking
action to dive deeper into our supply chain,
permeating all aspects of our operations,
and expanding our par tnerships with
various industry groups and sustainability
organizations. We believe that a commit-
ment to the future of our planet and its
people is not only a social obligation, but
that it’s good for business, too.
Furthermore, we are proud to have initiated and strengthened partnerships
in 2018, including a Fashion Charter for Climate Action launched at the United
Nations Climate Conference in Poland. This agreement to work with our industry
peers toward significant advances has the potential to effect changes far more
impactful than what any one brand could achieve alone.
WHAT ARE YOU MOST LOOKING FORWARD TO IN 2019 AND BEYOND?
We are excited to continue our progress on our trajectory toward our 10FOR20
Targets and to provide positive contributions to business performance along the
way. We will continue to work on our existing targets and take new topics into
consideration: Through our refreshed materiality analysis, we identified more
sustainable products, plastics, circularity and living wages as additional topics
of focus to address in our sustainability strategy beyond 2020.
Stefan Seidel
WHAT CAN YOU TELL US ABOUT PUMA’S SUSTAINABILITY JOURNEY?
We started over 20 years ago with our first Code of Conduct and by establishing
social compliance processes. It was an important step, as it provided us with
the foundation for our sustainability program in 1999. We soon established
ourselves as sustainability pioneers, which enabled us to shape expectations
around sustainability, rather than just respond to them. We were for instance
the first major company to place a monetary value on the environmental impact
of our operations and the first in the fashion industry to agree to eliminate
hazardous chemicals from our supply chain.
WHAT WERE THE MAJOR ACHIEVEMENTS MADE IN 2018?
Following our spin-off from Kering in 2018, we were re-admitted into the
FTSE4Good sustainability index while retaining our Oekom prime rating. Now
operating as an independently-listed company, we see a fresh opportunity to
take our sustainability to the next level, which will flow into our work in 2019 and
the development of our 2030 vision and strategy.
6565
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability MEANINGFUL PROGRESS
AND IMPACT
This report provides a summary of the progress we made during the calendar
year 2018 towards our 10FOR20 Sustainability Targets, while also highlighting
those areas where challenges remain.
Anticipating growing consumer demand for sustainably designed and produced
lines of PUMA products, we emphasized enhanced research and innovation in this
area. After many years of contributing to initiatives around improving the perfor-
mance of our global supply chain, we are proud to report that several are now
scaled up within the industry, including tools from the Zero Discharge of
Hazardous Chemicals Foundation and the Social and Labor Convergence
Program. Furthermore, in a demonstration of our commitment to transparency,
we have also published on our website the lists of our most important Tier 1 and
Tier 2 suppliers.
PROGRESS ON 10FOR20 TARGETS
Now more than halfway through the five-year period PUMA allotted for meeting
our 10FOR20 targets, 2018 was the time to take a critical look at our progress
on each one. This inquiry found that we have made good progress thus far, with
8 of our 10FOR20 Targets on track. Below is a comprehensive table of our
targets for each area, as well as the updated status of each:
T�1 10FOR20 TARGETS’ PROGRESS
Target
Baseline 2015
Performance 2018
Planned Action 2019
Target 2020
01
Stakeholder
Engagement
02
Human Rights
03
Social
Compliance
• Talks at Banz Stakeholder
Meeting
• Regional Supplier Round
Table Meetings
• Regional Supplier Round Tables
• Materiality Analysis refreshment
involving internal and external
stakeholders
• Alternate global stakeholder meet-
ing between Europe and Asia
• Continue Round Tables in all major
• Stakeholder dialogue
• Public reporting
• Consumer information
sourcing markets
• Human Rights Screening
• 19,000 hours of community
• Merge Human Rights and Social
engagement
• Follow up on Human Rights Assess-
ments from previous years
• First warehouse assessment realized
Compliance Target areas
• Continue community engagement
work and support of Soccer Aid
• Expand warehouse assessments
• Embed Human Rights across
our operations and suppliers
• Positively impact communities
where PUMA is present
Status
On track
On track
• All Tier 1 suppliers
frequently audited
• Workers complaints
• Started roll out of Joint industry
assessment tool (SLCP) in China
• 39% of audits shared with other
received and progressed
organizations
• All major component and material
suppliers audited
• No Zero Tolerance Issues
prevailing at year-end
• Expand roll out of joint industry
assessment tool (SLCP) to at least
two more countries
• Increase percentage of shared
• Compliance with industry
On track
standards / ILO Core Conventions
for all core suppliers, including
suppliers of finished goods as
well as component and material
suppliers
• Amount of Zero Tolerance Issues
audits to 50%
prevailing at year end: 0
04
• Science Based Target
(SBT) development
announced
• Industry Working Group on Climate
Change formed under the umbrel-
la of UNFCCC
• Start working groups under
Climate Charter including work
on sector based SBT
Climate Change
• Climate Charter developed and
• Continue supplier energy efficiency
• Science Based Reduction Target to
be developed and implemented
SBT – not on
track
launched at COP 24
• 3% interim reduction target
achieved
• PUMA (Scope 1&2) relative
to sales: -6.2%
Suppliers (Scope 3): -5%
programs
• Start project on reducing
emissions from air freight
3% relative
reduction on
track
6666
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability
Target
Baseline 2015
Performance 2018
Planned Action 2019
Target 2020
Status
05
• Commitment to Zero
Discharge
of Hazardous Chemicals
• PFCs phased out
• RSL failure rate remaining
• Keep RSL failure rate below 3%
• Roll out ZDHC Chemicals Gateway
• Zero discharge of hazardous
On track
chemicals from our supply chain
below 3%
• VOC index for footwear 17.7g / pair
for MRSL check of supplier
chemical inventories
(target 20g / pair)
• Reduce VOC consumption per pair
of shoes to 16g / pair
Chemicals
06
Water & Air
07
Materials
EP&L
08
09
Health & Safety
10
Governance
• Start of wastewater testing
• ZDHC wastewater guideline
• Increase compliance rates to
and publication
tests at 58 suppliers with wet
processing
• Compliance rates of 71%
(chemicals) and 52%
(conventional parameters)
ZDHC wastewater guideline to 90%
(chemicals) and 70% (conventional
parameters)
• Support finalization of ZDHC
guideline on air emissions
• Industry good practice on water
treatment and air emissions are
met by 90% of PUMA core
suppliers
Not on track
Water and Air
need to speed
up efforts
• bluesign® (polyester),
• Apparel:
• Apparel:
• More sustainable materials used
On track
Leather Working Group
(leather), and FSC (paper
& cardboard) certification
used in significant volumes
Cotton - BCI 50%
Polyester - bluesign®: 66%
• Footwear: Leather - LWG: >99%
• Accessories: Polyester -
bluesign® 46%
• Cardboard & Paper-FSC: 92%*
*including supply chain and
corporate consumption
Cotton - BCI 75%
Polyester -
bluesign®/Oeko-Tex®: 75%
• Footwear: Leather - LWG: 90%
• Accesories:
bluesign®/Oeko-Tex®: 75%
• Cardboard & Paper - FSC: 90%
• New Targets:
Responsible Down (RDS): 90%
Better PU: Target in development
for our key materials:
• BCI 90%
• bluesign® 90% LWG 90%
• FSC 90%
• RDS 90%
• Better PU: Target in development
• Kering Group EP&L
• PUMA EP&L 2017 published
• Calculate EP&L independent from
• Continue to report impact on
On track
published
(including PUMA figures)
Kering
an annual basis
• Reduce EP&L impact per sales
• PUMA EP&L value significantly
value
reduced
• Occupational Health and
• Fatal Accidents
Safety (OHS) part of
compliance audits
PUMA: 0
Suppliers: 0
• Zero fatal accidents
• Average injury rate of PUMA
entities below 1
• Injury Rate
PUMA: 0.8
Core T1 Suppliers: 0.6
• Zero fatal accidents
• Injury rates below industry
average
• Significantly reduce injury rates
On track
• PUMA Code of Ethics
• PUMA Code of Ethics training
• Ensure PUMA staff (with a
• Maintain and run a state-of the-art
On track
training
with low participation rate
participation rate: 99% (staff with
email accounts)
• Ethics training
• 93% of core suppliers trained in
participation rate: 60%
anti-corruption
corporate email account) training
rate remains over 90%
• Roll out supplier anti-corruption
training to non-core suppliers
compliance system
BCI: Better Cotton Initiative, EP&L: Environmental Profit and Loss, FSC: Forest Stewardship Council, LWG: Leather Working Group, MRSL: Manufacturing Restricted Substances List, PFC: Perfluorinated Chemicals,
PU: Polyurethane, RDS: Responsible Down Standard, RSL: Restricted Substances List, SBT: Science-Based Target, VOC: Volatile Organic Compound.
6767
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability SOME HIGHLIGHTS FROM OUR 2018 RESULTS ARE:
Direct results
• With the support of our material suppliers, we achieved our 2020 material
targets for cotton, polyester, leather and cardboard at the end of 2018, two
years ahead of schedule.
• Our worker complaints resolution rate remains above-target at 100%,
reflecting the commitment our suppliers have made to building better work-
places by listening to workers and addressing their concerns.
• Our China-based suppliers have made progress on improving social insur-
ance coverage for employees, and we will continue our efforts to partner
with them to further improve coverage rates.
• We launched the Partnership for Cleaner Textile program in Bangladesh on
energy efficiency and renewable energy in partnership with the World
Bank’s International Finance Corporation and our major suppliers in
Bangladesh. This provides funding and pathways to lower environmental
pollution and reduce operating costs for suppliers.
Better tools and tracking
• The Zero Discharge of Hazardous Chemicals – Wastewater Guidelines were
rolled out to 58 of the wet processing units in our supply chain. This enables
us to respond more effectively to situations where local water quality can be
improved.
• We rolled out the new Sustainable Apparel Coalition Higg Index Environ-
mental Facilities tool to 188 factories, allowing for the accurate measure
and scoring of a supplier’s sustainability performance.
• We successfully piloted the assessment tool of the Social and Labor
Convergence Program in China. Rather than using our own auditing tool, we
thereby encourage further the use of shared audits, which made up 39% of
our audits in 2018.
REMAINING CHALLENGES
One goal of PUMA has been to publish science-based CO2 emission targets,
which require an absolute reduction of greenhouse gas emissions in line with
the Paris Agreement under the United Nations Framework Convention for
Climate Change. While our emissions relative to sales are constantly being
reduced, rapid business growth in recent years has made achieving an absolute
reduction as an individual company challenging. Therefore, we worked with our
industry peers and UN Climate during 2018 on an industry-wide climate change
program. A result of these efforts was the launch of the Fashion Charter for
Climate Action alongside 42 other signatories in December. One of the working
groups formed during the Charters’ launch will develop a sector decarbonization
approach – which will make it easier for PUMA to publish – and later on achieve
– our own science-based emission target.
On the way to hitting our target of 90% compliance with industry good practices
on water treatment, we currently stand at 71% for chemicals and 52% for
conventional wastewater parameters, a clear indication that we must accelerate
our efforts. For air quality we are still waiting for an industry standard to be
finalized. This is planned by the Zero Discharge of Hazardous Chemical Foun-
dation for 2019.
MORE SUSTAINABLE PRODUCTS
In our continued focus on what our customers look for, we responded to
increased demand for more sustainable products with the 2018 launch of a
climate-neutral apparel collection in partnership with ASOS. In footwear, we
won a PETA Vegan Fashion Award, while from an industry perspective, we
achieved respectable ratings in a number of independent rankings including
the Carbon Disclosure Program, Fashion Revolution, Corporate Information
Transparency Index and Know the Chain.
ENHANCED TRANSPARENCY
We recognize the importance of transparency in our supply chain. As part of
our commitment to facilitate it, we make publicly available the list of our core
component and material suppliers (Tier 2) and our core suppliers (Tier 1).
6868
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability SELECT SECTIONS OF PUMA’S
2018 SUSTAINABILITY
PERFORMANCE
In this year’s annual report, our sustainability section focuses on the topics that
were highlighted as most important by internal and external stakeholders during
our most recent materiality analysis.
HUMAN RIGHTS AND SOCIAL COMPLIANCE
PUMA is defined not only by the products we create, but by the lives we improve.
This not only applies to our customers, but also to our workers and the commu-
nities in which they live. We aim to ensure that our products are manufactured
in workplaces where human rights are respected. On a daily basis, our global
sustainability team (located in nine countries over three continents) collaborates
with our manufacturing partners to improve working conditions, ensure workers
are treated fairly, and certify that factory conditions meet safety standards.
We describe below our work and plans for improvement through our capability-
building projects, audits system, worker feedback systems, and use of social
key performance indicators across our suppliers.
Capability Building
Our capability-building initiatives are grounded in our endeavor to align our
sourcing practices with the principles of sustainable development. PUMA works
with suppliers on capability-building initiatives to build resilience and self-
sufficiency in these areas. In 2018, our work included an expanded partnership
with the International Labor Organization’s Better Work program in Bangladesh,
training over 1,000 workers on issues related to women’s empowerment in the
workplace. More broadly, we trained 315 PUMA suppliers at our annual supplier
Round Table Meetings on how to avoid forced labor. This was done in collaboration
with the International Organization of Migration, or other expert organizations,
which highlighted the connection between recruitment fees paid by migrant
workers in countries like Mauritius and Taiwan and potential forced-labor
issues. Migrant workers are the group considered most exposed to signifi cant
risks of forced labor in supply chains.
PUMA adheres to the UN Declaration of Human Rights, the International Labor
Organization’s Core Labor Conventions, and the ten principles of the United Nations
Global Compact–these have been reflected in our Code of Conduct since 1993 and
in our Code of Ethics since 2005. We will continue to build on this enduring com-
mitment to improve the lives and working conditions of the workers we rely on.
Audits
Social audits remain an important pillar of measuring human rights impacts
as they illuminate areas for improvement across our supply chain. In 2018, we
continued our partnership with the Fair Labor Association, the Better Work
Program of the International Labor Organization and International Finance
Corporation, and the Social and Labor Convergence Program (SLCP), sup-
porting the rollout of the SLCP in China. Additionally, we engaged various
regional organizations to ensure supplier compliance to international human
rights and labor standards. As duplicative audits by numerous brands can create
an administrative burden on a single vendor and be an inefficient use of
resources, we heightened our collaborative efforts in this area to increase the
percentage of shared audits with other companies from 27% to 39% of PUMA
suppliers. In this way, we are enabling our value chain to receive two sets of
benefits, reducing costs and resources and maximizing the efficiency of how we
monitor our collective supply chain as an industry.
PUMA’s social audits evaluate the status of workers’ situations in areas such as
freedom of association, health, safety, appropriate wages, fair treatment and
working hours. In 2018, we continued to achieve nearly 100% compliance
monitoring of our active Tier 1 manufacturing partners. We also audited our
most important Tier 2 suppliers and piloted an audit in a PUMA warehouse.
In total, we conducted 536 audits in 473 factories with 94% of our Tier 1 earning
a passing grade. Since the prior year, Tier 1 vendor compliance improved by 2%,
continuing our positive trajectory. 6% failed to meet our requirements and if an
active PUMA supplier, we worked with these partners to improve the situation.
47% received passing grades of those that received a second audit. Eleven fac-
tories could not sufficiently improve their performance and were consequently
delisted from our active supplier factory base. Those that applied to be suppliers
but failed their first audits were not admitted.
6969
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability In 2019, we plan to further increase the passing grade within our T1 and core T2
suppliers to 95%.
T�2 AUDIT PERFORMANCE 2015-2018
Tier Level
Ratings
A (Pass)
B+ (Pass)
B- (Pass)
C (Fail)
D (Fail)
Total
Pass Rate (in %)
94
2018
2017
2016
2015
T1
T2
T1
T2
T1
T2
T1
T2
82
148
128
17
5
380
15
29
42
7
0
93
92
87
122
118
18
9
354
92
13
27
34
3
1
78
95
58
166
87
28
5
344
90
12
26
32
12
2
84
83
36
156
75
25
9
301
89
1
16
12
2
31
94
Workers’ Feedback
Having the ability to articulate one’s needs and concerns is a key tenet of human
rights. Providing workers with avenues to use their voices to advocate for
themselves is a top priority for PUMA as part of our commitment to playing fairly
as a market leader.
In 2008, we developed Worker Voice, a workers’ feedback system that enables
vendor employees to share concerns in a confidential manner, as well as for
outside parties to provide input to PUMA. The objective of Worker Voice is to
understand if our sustainability initiatives create a positive impact for workers
and effectively identify areas for further improvement. PUMA responds directly
to concerns raised through this system and shares them with vendor manage-
ment, upholding worker confidentiality, to take collaborative action and arrive
at holistic and appropriate resolutions.
We are pleased to see that our efforts in 2018 have given our workers a platform
for voicing complaints, advocating for their needs, and ensuring that their
concerns are acknowledged. We expanded our Worker Voice coverage by
including more than 4,000 workers who participated in a well-being survey
among nine Chinese core suppliers through an app-based technology. In total,
44 workers across eight countries took advantage of PUMA’s feedback system,
compared to 74 in 2017. Our team resolved all complaints raised, 5% more than
the year prior. We also received three third-party complaints from external
organizations related to PUMA manufacturing partners, after ten complaints in
the year prior. Two external third-party complaints focused on the right to
freedom of association and one focused on fair compensation. Of these, two
were resolved and one is still pending a decision in local labor courts.
In 2019, we aim to keep our resolution rate for workers complaints consistently
above 90% and resolve all third-party complaints.
T�3 WORKERS’ COMPLAINTS AND RESOLUTION RATES 2015-2018
Worker Complaints
2018
2017
Total Received
Total Confirmed
Resolved
Not Resolved
Resolution Rate (in %)
55
44
44
0
100
81
74
70
4
95
2016
72
n.a.
70
2
97
2015
150
n.a.
148
2
99
Social Key Performance Indicators (S-KPIs)
Social Key Performance Indicators (S-KPIs) help us measure and report on
important aspects of our business that affect worker health and safety, fair
wages, and diversity and inclusion. These S-KPIs include:
1. The average number of work accidents per 100 full-time employees
2. Payment of workers at our manufacturing partners compared to
local minimum wages
3. Female representation among our workers
4. Average hours of overtime work per week
5. Coverage under social insurance provisions
6. Percentage of fixed-term vs. permanent contracts
7. Workers covered by a collective bargaining agreement
Table 4 shows that 95% of workers employed at our core suppliers are covered
by social insurance. In addition, 68% have a permanent working contract, four
percentage points more than in 2017. Over the last year, we have experienced
improvements in the areas of overtime hours and coverage by collective bar-
gaining agreements, by almost one hour less per week and five percentage-point
7070
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability
increase respectively. These improvements have a direct impact on worker well-
being and ensure that more of the people employed by our suppliers have access
to the help they need, when they need it.
While PUMA does not measure the payment of a “living wage”, table 4 indicates
that on average, our core suppliers pay 21% above legally mandated minimum
wages in their respective countries. Adding overtime and bonuses, this increases
to 84%.
Our plans for improvement are to further increase the percentage of permanent
contracts and workers covered by social insurance over time, while maintaining
an average salary structure well above minimum wages. We will also continue
to highlight the importance of freedom of association and collective bargaining
as an enabling right for all other labor standards.
T�4 S-KPIS FROM PUMA T1 CORE SUPPLIERS*
LATIN AMERICA
SOUTH ASIA
EAST AND SOUTHEAST ASIA
EMEA
2018
AVERAGE
2017
AVERAGE
2016
AVERAGE
r
o
d
a
v
l
a
S
l
E
o
c
i
x
e
M
h
s
e
d
a
l
g
n
a
B
n
a
t
s
i
k
a
P
i
a
n
h
C
a
i
d
n
I
a
i
d
o
b
m
a
C
a
i
s
e
n
o
d
n
I
m
a
n
t
e
i
V
y
e
k
r
u
T
6.9
63.7
38.0
15.0
29.5
7.1
5.2
1.2
40.2
2.1
20.9
26.1
22.1
S-KPI
Gross wage paid above minimum wage
excluding overtime and bonuses (in %)
Gross wage paid above minimum wage
including overtime and bonuses (in %)
16.8
246.4
110.0
Workers covered by social insurance (in %)
99.8
Overtime work (hours per week)
Workers covered by a collective
bargaining agreement (in %)
Female workers (in %)
Permanent workers (in %)
Annual turnover rate (in %)
Injury Rate
0.4
0.0
71.5
100
17.6
0.8
100
7.4
0.0
48.2
8.3
100
9.6
0.0
41.4
100
63.3
30.3
0.2
0.3
22.5
93.5
0.0
0.0
22.0
100
10.6
0.0
38.0
184.9
57.4
100
0.2
0.0
3.6
100
47.5
0.0
65.6
18.2
86.7
57.8
21.5
79.7
0.5
100
6.9
47.7
85.5
15.2
31.3
3.2
37.3
99.7
7.2
33.3
89.8
84.3
16.9
0.3
102.7
20.6
94.6
6.8
98.8
80.1
51.2
30.9
0.3
100
4.3
0.0
60.5
100
40.0
0.0
83.7
95.3
6.1
26.7
56.0
68.0
36.8
0.6
86.7
95.7
6.8
21.5
59.3
63.6
40.3
0.4
69.1
95.9
6.6
35.7
64.2
n.a.
n.a.
n.a.
* Data received from 50 PUMA core suppliers representing 74% of 2018 production volume
Reporting period for data collection: November 2017 – October 2018
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PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability
REDUCING IMPACTS ON THE ENVIRONMENT
By making intentional business decisions about what we produce and how, we
strive toward our target to provide people with a planet in which they can play.
Climate change threatens our ability to live well in the long term, because it
threatens the health and availability of the natural resources we enjoy today.
Our customers can only be athletes when they have clean air and water, and a
field on which to compete. According to the Intergovernmental Panel on Climate
Change (IPCC), even if overall global warming is limited to below two degrees
Celsius as agreed by the United Nations in Paris, there will still be wide-ranging
consequences for low-lying regions, human health, and the health of our ocean
ecosystems, where those hardest-hit are likely to be some of the world’s most
vulnerable communities.
At PUMA, we believe in doing our part to contribute to a healthy ecosystem
for all to thrive in. We summarize below our current work and future plans
for addressing climate change, materials use, sustainable product design,
sustainable packaging, water use and chemicals management throughout
our supply chain.
Environmental Key Performance Indicators (E-KPIs)
We hold ourselves accountable to our sustainability strategy by collecting and
publishing data on the average water consumption, CO2 emissions, and waste
for finished goods manufacturing within our major product categories. These
Environmental Key Performance Indicators (E-KPIs) allow us to quickly evaluate
the results of our actions in finished goods manufacturing.
We are pleased to report that we have made clear improvements on all reported
E-KPIs since our baseline year 2015. The reductions in CO2 emissions as well
as energy and water usage per piece or pair produced show that our multiple
energy efficiency programs and consistent reporting of core suppliers have
generated positive momentum, eliminating unnecessary consumption and
increasing energy and water efficiency. In addition, a number of our suppliers
have already switched to or installed renewable energy sources, including
bio-mass boilers and solar photovoltaic panels at their facilities.
T�5 E-KPIS PROGRESS FROM PUMA T1 CORE SUPPLIERS (in %)
PUMA’s sustainability strategy focuses on reducing our own carbon emissions
through the following measures:
Variation Footwear
Variation Apparel
E-KPI
Unit
2018 / 2017 2018 / 2015 2018 / 2017 2018 / 2015
• The use of energy efficient vehicles, buildings and devices
• The direct purchase of renewable electricity where available
• The purchase of renewable energy certificates where
a direct purchase is not feasible
We are aiming to reduce carbon emissions within our supply chain through the
following additional initiatives:
• Working with logistics service providers who are leaders
in fighting climate change
• Energy efficiency programs for our core suppliers
• Supporting selected suppliers to invest in renewable energy creation
• Switching from conventional to more sustainable raw materials
• Engaging with our industry peers for industry-wide climate solutions
l /
Piece
or pair
kWh /
Piece
or pair
kg /
Piece
or pair
g /
Piece
or pair
Water
Energy
CO2
Waste
-15
-11
-7
-6
-33
-44
-38
-18
-31
-4
-17
-15
-3
-27
6
-8
7272
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability T.6 E-KPIS FOOTWEAR PRODUCTION 2015-2018*
T.8 E-KPIS TEXTILES
Variation
2018 / 2017
(in %)
3.0
-2.0
0.0
n.a.
2017
119.3
13.7
4.5
299.6
E-KPI
Water
Energy
CO2
Waste
Unit
m³ / Ton
MWh / Ton
Ton CO2e /
Ton
kg / Ton
2018
122.8
13.4
4.5
70.6*
Figures derived from 18 core fabric mills in Asia and Europe
* Sludge is no longer included in Waste KPIs
T.9 E-KPIS LEATHER
E-KPI
Water
Energy
CO2
Waste
Unit
2018
2017
Variation
2018 / 2017
(in %)
m³ water
/ m2
kWh / m2
Tons CO2e
/ m2
kg /m2
90.2
8.7
3.2
0.9*
91.8
9.1
3.4
1.6
-2.0
-5.0
-2.0
n.a.
Figures derived from 6 core tanneries in Asia
* Sludge no longer included in Waste KPIs
E-KPI
Unit
Water
l / Pair
Energy
kWh /
Pair
CO2
kg / Pair
2018
12.3
1.2
0.9
WEIGHTED VALUE
2017
14.5
1.4
1.0
2016
18.4
1.6
1.1
2015
18.3
1.5
1.4
Waste
g / Pair
108.5
115.9
105.2
113.6
* Figures derived from 21 out of 21 core suppliers worldwide,
covering 90% of PUMA production worldwide
* Figures cover only core Tier 1 suppliers
* Includes all types of energy
T.7 E-KPIS APPAREL PRODUCTION 2015-2018*
WEIGHTED VALUE
E-KPI
Unit
Water
l / Piece
Energy
kWh /
Piece
CO2
kg / Piece
Waste
g / Piece
2018
4.2
0.6
0.3
46.5
2017
7.6
0.7
0.3
44.0
2016
8.0
0.7
0.4
49.3
2015
6.8
0.6
0.4
50.6
* Figures derived from 18 out of 19 core suppliers worldwide,
covering 74% of PUMA production worldwide
* Figures cover only core Tier 1 suppliers
* Includes all types of energy
In addition to finished goods manufacturing, we are also working with our major
materials suppliers on reducing their environmental impact and improving their
resource efficiency.
The next tables provide average consumption figures for the manufacturing of
textile fabrics and leather. We use these figures to benchmark our fabric and
leather suppliers over time and against one another. This helps us to prioritize
those suppliers for efficiency programs, where we expect to achieve the largest
impact.
7373
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability Sustainable Product Design and Development
We believe that the use of more sustainable materials is crucial for designing
and developing products that both anticipate evolving consumer demand and
facilitate more environmentally resilient consumption. In 2018, we re-empha-
sized the need for our teams to design and develop more sustainable products.
Utilizing our PUMA Sustainability-Index (S-Index), our benchmark for more
sustainable products, we have encouraged our product team to significantly
increase the use of more sustainable materials in their collections.
This year also saw the launch of new collaborations with ASOS, the British
fashion and retailer, and SONRA, a German footwear brand that creates shoes
from sustainably tanned leather. Both product lines emphasize local sourcing
and production to minimize the distance to market (reducing emissions relating
to transport of materials and goods). Furthermore, in the case of the collabo-
ration with ASOS, emissions from the production phase were offset with a
renewable energy project established in Turkey, rendering the line effectively
carbon-neutral.
Sourcing and Efficient Use of more Sustainable Product Materials
Consumer and environmental trends over the past year have underscored the
importance of responsible sourcing and manufacturing to provide customers
with high-quality products whose origins reflect the values of those who use
them. PUMA has continued to push its longstanding commitment to these values
to enable a smooth transition to sourcing sustainable materials. Although these
resource expenditures and associated negative impacts from producing raw
materials are embedded in the operations of our partners, we continue to reach
deep into our supply chain to achieve better environmental outcomes. Sourcing
better materials helps reduce and avoid operations that accelerate environ-
mental challenges, such as heavy water consumption, CO2 emissions, pesticide
damage to ecosystems, animal cruelty, and harm to human health.
As part of our 10FOR20 Sustainability Strategy, we established ‘volume targets’
for sourcing more sustainable versions of key product materials, including
cotton (Better Cotton Initiative or organic) and Polyester (bluesign® or
Oeko-Tex®-certified, or recycled). Our efforts since 2015 have enabled us to meet
our targets two years early (notably, the target for sustainable leather and FSC
cardboard sourcing was 90%). This early achievement provided us with the
opportunity to level up our ambition, so we increased our target for both more
sustainable cotton and polyester sourcing by 40 points to 90% of our total
procurement for both materials. We continued to aim higher by adding a new
global volume target for Responsible Down Standard-certified down feathers
(90%), as well as for better (i.e. solvent-reduced) polyurethane (500,000 pieces).
Alone, the 10,370 tons of BCI-certified cotton we used in 2018 will enable water
expenditure savings during cotton farming of between 3% and 20%, depending
on the regions where the farming takes place. At an average water consumption
of ten cubic meters per kilogram of cotton, even a 3% savings amounts to 3.1 mil-
lion cubic meters of water saved, an amount capable of filling approximately
15 million bath tubs.
7474
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability T�10 KEY MATERIALS TARGETS AND PROGRESS 2015-2018 (in %)
Material
BCI and / or organic Cotton*
bluesign®, Oeko-Tex® and / or recycled Polyester**
LWG Medal-rated leather
FSC certified and / or recycled
Paper & cardboard
RDS-certified down feathers
Better PU (Polyurethane)
New 2020
Target
Previous 2020
Target
90
90
90
90
90
50
50
90
90
-
2018
50
86
(bluesign® 61)
> 99
92
-
500k pieces
Pilot
First production
Pilot
2017
2016
2015
40
47
99
95
-
19
24
94
78
-
-
3
15
99
85
-
-
In 2018, we added organic cotton to BCI cotton
*
** In 2018, we added Oeko-Tex® and recycled polyester to bluesign®
Maximizing Resource Utilization
Our industry needs to redefine the concept of “waste”. Our more sustainable
product strategy also includes the reduction of waste created during the pro-
duction process, through more efficient use of resources. The result is a more
streamlined consumption of raw materials that lightens our environmental
impact. We are discovering and innovating around new ways to take material
‘waste’ that would otherwise be discarded and reincorporate it back into the
production of PUMA products. For example, small pieces in the ‘first run’ of
producing footwear soles can be melted together for a different collection or
put into packaging or components of other products. This reduces the contribu-
tions to landfills, which emit methane, a greenhouse gas, and directly contributes
to climate change.
In 2018, we continued to develop initiatives with suppliers to discover and imple-
ment the reusability of waste materials in production processes. This begins
with front-end design and development decisions, such as our renewed focus
on expanding S-Index product requirements to including recycled materials.
Our objective has been to find simple and feasible solutions for production pro-
cesses that create a net benefit in terms of environmental impact, where rein-
corporating reusable material is not excessively laborious or energy-intensive.
More Sustainable Plastics and Packaging
2018 brought new insights into how ocean plastic pollution and microplastics
may endanger human health, ecosystems, and the wildlife that relies on them.
Given the potential consequences of plastics in the environment, our responsible
use of polyester, polyurethane, and polyethylene is a top priority for PUMA. The
topic has been as well raised as relevant issue for PUMA by a variety of stake-
holders, including environmental NGOs, own employees and customers.
Following is a summary of actions taken in 2018 with regard to polyester, poly-
urethane, polyethylene, as well as streamlining our cardboard packaging and
hangtags. Together, these efforts aim to reduce the impact that PUMA’s plastic
usage generates, which helps protect forests, and leads to less ocean pollution
and lower volumes of landfill waste. In many cases, this also reduces our costs,
making what is best for the environment, best for our business.
7575
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability Polyester used on PUMA products: Polyester is the most widely used
plastic-based material across PUMA product lines.
Footwear packaging and hangtags:
• We increased our 2020 target of sourcing certified sustainable polyester by
40 points to 90%. Our 2018 actual level of sourcing was 86%, taking into
consideration bluesign®, Oeko-Tex® and recycled polyester certifications.
• PUMA established plans to join a research program on microfibers in early
2019 to explore how we can best take action in this area to make significant
positive impact. This builds on our participation in related industry meetings
and our own efforts to closely follow existing and emerging research.
Polyurethane used on PUMA products: Polyurethane is widely used on PUMA
shoes and accessories.
•
In 2018, we initiated sourcing for better (solvent-reduced) polyurethane,
to reduce the amount of dimethylformamid or DMFa, a chemical that is
widely used in conventional polyurethane processing.
Polyethylene used for bags and packaging:
• All PUMA retail stores have completed implementation of bans on the use
of plastic bags.
• For our outlet stores, any plastic bags used must contain at least
80% recycled content (effective beginning of 2019).
• We have worked to reduce the thickness of polybags (used for packaging
PUMA apparel and accessories) to decrease the use of polyethylene.
• We continued our research on replacing polyethylene with a more
sustainable material.
• We ensured the PUMA shoe box, primarily cardboard and paper,
continues to be made of 92% recycled paper content and certified
by the Forest Stewardship Council (FSC©).
• Our cardboard-based hangtags are also fully FSC©-certified.
CO2 Emissions
In line with the United Nation’s Paris Agreement, PUMA is committed to
contributing its fair share to limit global warming to well below two degrees
Celsius. In 2019, we will continue our development of a science-based CO2
emissions target. In the interim, PUMA established an internal target of 3%
reduction relative to sales. This ensures that we continue to take goal-oriented
actions. To check our pace toward the 3% reduction milestone, the first step is
tracking CO2 emissions–which also helps identify key areas to make significant
changes in our supply chain, both in our direct operations and in those of our
supply chain partners.
The scope of our CO2 emissions tracking includes key environmental perfor-
mance data for PUMA offices, stores and warehouses, and from business travel.
Reaching deeper into our supply chain, we also include emissions from Tier 1
suppliers and transport partners. In summary, 2018 saw a 5.3% combined
reduction of tons of CO2 per million euros of turnover per year over the year prior.
This equals 3.3 tons of CO2 per million euros of turnover per year which is
equivalent to over 3,000 passenger cars taken off the roads.
We were able to reduce our emissions relative to sales for our own offices, stores
and warehouses, for example by abandoning an old and less efficient building
at our headquarters. We also reduced the emissions from the Tier 1 suppliers
of our goods as described on table 5.
However, we also recorded an over-proportional increase in airfreight caused
by the increased volume of goods produced and shipped, as well as a substantial
increase in business travel. In 2019, we will work on reversing the negative trend
in those two areas.
7676
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability T�11 CO2e EMISSIONS BREAKDOWN BY SOURCE (1-7)
CO2e Emissions (Absolute Figures)
Scope 1 - Direct CO2e emissions fossil fuels (T)
Car Fleet (T)
Heating (T)
Scope 2 - Indirect CO2e emissions electricity & steam (T)
Electricity (T)
Steam (T)
Scope 3 - Other indirect CO2e emissions [T]
Business Travel Transportation (T)
B2B Goods Transport (T)
B2C Goods Transport (T)
Manufacturing in Tier 1 Suppliers (T)
TOTAL SCOPE 1-3 [T]
Annual sales PUMA (in € million)
TOTAL CO2e EMISSIONS RELATIVE TO SALES
(in tons CO2e per € million sales per year)
2018
6,918
4,073
2,845
43,366
42,145
1,221
2017
7,678
4,134
3,545
40,029
38,914
1,115
2016
6,854
3,746
3,107
37,300
36,046
1,254
2015
7,296
4,087
3,209
35,591
34,445
1,146
222,315
208,525
196,896
192,305
15,582
74,182
5,961
14,394
64,076
6,994
12,167
48,484
16,223
126,590
123,061
120,023
272,599
256,232
4,648.3
4,135.9
241,049
3,626.7
10,191
57,085
6,321
118,708
235,192
3,387.4
Variation
2018 / 2017
(in %)
Variation
2018 / 2015
(in %)
-9.9
-1.5
-19.7
8.3
8.3
9.5
6.6
8.3
15.8
-14.8
2.9
6.4
12.4
-5.2
-0.4
-11.3
21.8
22.4
6.6
15.6
52.9
29.9
-5.7
6.6
15.9
37.2
58.6
62.0
66.5
69.4
-5.3
-15.5
1. PUMA uses own methodology for CO2 accounting, with reference to the GHG protocol.
2. The consolidation scope follows the operational control approach, including PUMA-owned or operated offices, warehouses, stores and own industrial sites (Argentina).
3. Outsourced Tier 1 production is accounted in the scope 3 emissions, covering CO2 emissions from all three divisions (Accessories, Apparel, and Footwear).
4. Due to the Kering spin-off we reviewed the scope in our sustainability reporting tool. From this year on, we will apply the “min. 90% rule” for data collection from PUMA entities,
covering min. 90% of PUMA’s FTE employees worldwide. The residual will be extrapolated.
5. PUMA applies the market-based approach for scope 2, using emission factors by ADEME. In addition to the market-based approach,
the location-based approach is used in the CDP questionnaire. Scope 3 emissions factors are based on additional company and industry-specific emission factors.
6. Data includes extrapolations or estimations where no real data could be provided.
7. Methodological changes over the last three years influence results.
7777
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability Water Use
The access to clean and safe water is a fundamental human right. Availability of
adequate clean water is essential for health as well as social and economic
development.
We recognize that industrial water consumption comprises 22% of global water
use as per findings by the United Nations, which underscores our opportunity
to make a positive difference toward higher availability and water quality in local
communities and on the ecosystems on which they rely. In 2018, we stepped up
our commitment and delivered better results in the areas of water efficiency
and wastewater management to achieve improvements in the communities
where PUMA products are made.
Water Efficiency
In 2018, we continued a collaboration with the World Bank’s International
Finance Corporation on running programs focused on water efficiency (as well
as energy efficiency and climate-change performance). Through this partner-
ship, we established two resource efficiency programs with eleven core facto-
ries in our major sourcing countries, Vietnam and Bangladesh. Those programs
enable participating factories to undergo a detailed resource efficiency audit,
followed by proposals on how to improve their efficiency in a cost-effective way.
Frequent reporting and help from the IFC to identify the right finance tools for
implementation round out the program’s scope.
Ongoing benchmarking and the phase out of ineffective suppliers have led to
an average reduction of water use in finished goods manufacturing of 33% for
footwear and 38% for apparel between 2015 and 2018 see tables 5.
On Tier 2 or the material supplier level, we have not yet been able to replicate
these savings. However, we have started to measure water consumption
from Tier 2 suppliers and hope to realize resource efficiency gains in the
coming years.
Wastewater Management
Textile production requires large volumes of water as a solvent for chemicals
and dyes as well as to wash and rinse products. This series of operations is
known as wet processing. PUMA focuses water efficiency efforts on facilities
with wet processing operations as they represent the most water-intensive
stage of production. Because wet processing typically occurs at the material
supplier level (Tier 2), we include major suppliers from this category in our
wastewater testing program to comprehensively understand the impacts of our
supply chain.
Firstly, compliance with relevant national wastewater standards is a precondi-
tion for all suppliers interested in conducting business with PUMA. Ensuring
wastewater standards is thus a required component of our frequent PUMA
compliance audits conducted for all potential and existing suppliers globally.
The PUMA wastewater testing program is aligned to the wastewater quality
guideline of the Zero Discharge of Hazardous Chemicals Foundation (ZDHC),
which was developed and published with the help of PUMA in 2016. Since its
inception, we have been able to consistently increase the scope of the program,
from 33 suppliers in 2015 to 58 in 2018.
Testing includes both traditional wastewater parameters and hazardous chem-
icals and includes 183 different chemicals. A failure within one single parameter
leads to a non-compliant rating. The results show that heavy metals are hardly
found in the wastewater of our wet-processing supply chain. Regarding priority
hazardous chemicals, the compliance rate improved from 67% in 2017 to 71%
last year, meaning that seven out of ten suppliers did not find any such chemicals
in their wastewater. For conventional wastewater parameters, such as pH value,
biological oxygen demand or color, we still see room for improvement, despite
a minor increase in compliance rates from 48% to 52%. While typically not toxic,
the release of colored or hot wastewater can still have a negative effect on the
receiving water body and local environment.
In 2019, we will use the experiences gained from two years of wastewater testing
according to the ZDHC guideline to work with those suppliers whose compliance
rates remain below our standards. Training programs developed by the ZDHC,
and used across ZDHC member brands, will assist us in this effort.
7878
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability T�12 WASTEWATER TESTS STATISTICS 2015-2018
Number of reports
Number of factories
Compliance Rate* Hazardous Chemicals (in %)
Compliance Rate* Heavy Metals (in %)
Compliance Rate* Physical Parameters (in %)
* Factories
** Excluding the parameter E-Coli, where unclear sampling methods have led to unclear results
HEALTH, SAFETY & CHEMICALS COMPLIANCE
Our commitment to health and safety is foundational to how we operate and a
guiding principle that informs our supply chain partnerships. Our view extends
from the suppliers’ employees, to the local communities in which PUMA oper-
ates and consumers. We demonstrate this by exceeding local legal requirements
when required to reduce the negative impacts of chemicals used in our supply
chain in the communities we serve. We also adhere to the highest legal standards
for product safety in all countries in which we operate.
While the effects of potentially hazardous chemicals on human health have yet
to be completely assessed, PUMA takes precautionary measures to prevent
potential harm to human health and the environment from its products and
operations. These measures include supporting working groups with industry
peers to further research the topics and better management of natural
resources used in operations.
2018
104
58
71
100
52**
2017
2016
2015
Variation
2018 / 2017
Variation
2018 / 2015
54
42
67
78
48**
61
44
n.a.
n.a.
n.a.
33
33
n.a.
n.a.
n.a.
50
16
+4
+22
+4
71
25
n.a.
n.a.
n.a.
Furthermore, to facilitate our chemical sustainability strategy, PUMA has
adopted the Restricted Substances List of the AFIRM Group, and the Manufac-
turing Restricted Substances List of the ZDHC. Both groups work as industry
leaders on chemical management best practices. This provides us not only with
the industry standards for streamlining our processes, but also gives us the
opportunity to coordinate alongside other members in our industry on which
chemicals we use, enabling greater and more systemic impact within global
supply chains. We mandate that all materials used for PUMA products be tested
in accordance with our Restricted Substances List (“RSL”) before the start of
production in independent and accredited third-party laboratories.
Table 13 provides an overview of the RSL testing results and certifications
between 2015 and 2018. We are pleased to report compliance rates of over 97%
for all product divisions in 2018, with an average compliance rate of 98.1%,
representing a 6.2% improvement over the 2015 average.
In addition to our materials testing program, PUMA also conducts random
testing of finished products to confirm full compliance with legal requirements
and the AFIRM Restricted Substances List. During 2018 our random testing
confirmed full compliance of all tested products.
7979
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability T�13 RESTRICTED SUBSTANCES LIST TESTS STATISTICS 2015-2018
2018
2017
2016
2015
No. of
Test
Reports
Com-
pliance
Rate (in %)
No. of
Test
Reports
Com-
pliance
Rate (in %)
No. of
Test
Reports
Com-
pliance
Rate (in %)
No. of
Test
Reports
Com-
pliance
Rate (in %)
Variation
2018 / 2017
Variation
2018 / 2015
No. of
Test
Reports
(in %)
Com-
pliance
Rate (in %)
No. of
Test
Reports
Com-
pliance
Rate (in %)
3,512
988
764
54
5,318
98.4
98.0
97.1
100
98.1
2,707
925
753
44
4,429
97.9
99.1
96.0
95.5
97.8
1,781
500
677
78
3,028
96.0
98.0
94.1
93.6
95.8
1,150
480
624
82
2,336
92.1
93.1
92.0
93.9
92.3
30
7
1
23
20
0.5
-1.1
1.1
4.5
0.3
205
106
22
-34
128
6.3
4.9
5.1
6.1
5.8
Product Division
Footwear
Apparel
Accessories
Others*
Total
* Packaging and labeling materials
Phase Out of Hazardous Chemicals
PUMA is committed to supporting the global agenda of managing chemical use
carefully – especially for those that are considered hazardous – as well as to
phasing out those that raise health-related or environmental concerns.
In 2011, PUMA made a historic commitment to eliminate priority hazardous
chemicals from our supply chain, co-founding the Zero Discharge of Hazardous
Chemicals (ZDHC) Foundation initiative. That same year PUMA was the first
company to agree to a public “Detox” commitment with Greenpeace. We agreed
to proactively phase out hazardous chemicals, not only from finished PUMA
products, but also from the production cycle across our global business. In our
continuous pursuit of this goal, we have partnered with several industry peers
to implement a Manufacturing Restricted Substances List, using standards
developed by the ZDHC.
We are proud of our progress on the phase-out of two major hazardous chem-
icals groups in 2018. First, perfluorinated chemicals (PFCs), typically used for
water-repellent coatings, are considered environmental contaminants, because
they fail to break down once they have been used. In addition, they disrupt normal
chemical processes in living things and can have negative effects on immune
function. We are happy to announce that we have completed this phase-out and
that PUMA products are now PFC-free.
We also worked on our long-term reduction of organic solvents or volatile
organic compounds (VOCs) in footwear production. Since VOCs easily evaporate,
exposure can occur through inhalation and lead to negative health effects for
workers in footwear factories. VOCs can also cause an unpleasant smell in
products.
A reduction in the use of VOCs therefore protects both workers and consumers.
Our efforts demonstrate steady improvement over recent years, reducing con-
sumption per pair of shoes from 40.2 grams per pair in 2010 to 17.7 grams per
pair in 2018. This result falls below 18 grams per pair for the first time, meeting
the EU Eco Label requirement. We are encouraged by this success and confident
that we are on track to achieve our target of 15 grams per pair by 2020.
8080
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability
66.7
56.2
18
15
46.8
43.0
42.2
39.8
41.2
40.2
37.0
33.1
30.7
28.7
24.1
21.2
20.9
17.7
We also traced the phase-out of other chemicals listed on the Manufacturing
Restricted Substances List through chemical inventory checks, our wastewater
testing program, and through regular compliance audits. We are proud to report
that the results of these tests and audits indicate that chemicals from the Man-
ufacturing Restricted Substances List are no longer intentionally used during
the manufacturing of PUMA products. However, we learned that traces of
banned chemicals are still found in 29% of wastewater samples, so we will con-
tinue to work toward improvement in this area in 2019.
Our targets for specific materials include the responsible use of chemicals
during the raw-material phase, including the growth phase for agricultural
products such as cotton. We look forward to accelerating our efforts toward
achieving full compliance with the Manufacturing Restricted Substances List in
2019, and to eliminating the use of priority hazardous chemicals from our supply
chain by 2020, which is our ultimate goal.
8181
F.1 VOC INDEX PROGRESS FOR FOOTWEAR PRODUCTION 2003-2018g / pair of shoes70 –60 – 50 –40 –30 –20 –10 –0 –2003200420052006200720082009201020112012201320142015201620172018 Actual value (g / pair) EU Eco Label (18g / pair) 2020 Target (15g / pair)PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability WHERE WE ARE GOING
In order to best serve the needs of a quickly evolving planet and the communities
that rely on it, PUMA is committed to ensuring that our sustainability strategy
remain dynamic to align our vision for the future with the most relevant needs
of the communities we serve. Following our spin-off from Kering and in an effort
to keep our own priorities as relevant and impactful as possible to meet current
challenges and anticipate future ones, PUMA introduced a new sustainability
organizational structure and conducted a review of our list of top priorities in
2018 to inform our current strategy and optimize the focus of our efforts in 2019.
To be able to move faster on each thematic program area, we appointed separate
leads for Social and Environmental Sustainability as well as for Chemicals and
OHS. In order to better work with our suppliers where the impact is greatest,
our social and environmental leads are both based in Asia.
T�14 SUSTAINABILITY ORGANIZATIONAL CHART PUMA 2018
PUMA Management Board
Sustainability Committee
CEO PUMA
Corporate
Sustainability
Steering Commitee
Global Director
SourceCo
COO PUMA
Head of Corporate
Sustainability
Team Head
Social
Sustainability
Senior Manager
Environmental
Sustainability
Senior Manager
Chemicals and OHS
CFO PUMA
Corporate
Sustainability Team
Social
Sustainability Team
Environmental
Sustainability Team
Chemicals and OHS
Team
8282
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability OUR VISION FOR 2030
As we approach 2020, we have also begun to build the foundations for our 2030
vision, using our trajectory thus far, as well as scientific projections of future
environmental conditions, as a platform on which to shape our strategy and
establish concrete goals.
During the year 2019 we will work on our sustainability targets beyond 2020.
Building on our rich history in sustainability efforts and the renewed materiality
analysis from 2018, we will consult our most important stakeholders before
finalizing our new target set – which again will aim to maximize the positive
impact we create for our customers and athletes, but also employees, suppliers,
and communities around us, as well as for the planet.
The highest-ranking governance body at PUMA in terms of sustainability is
the Management Board of PUMA SE. The Management Board is informed and
consulted about PUMA’s sustainability strategy and performance during regular
meetings with the Global Director SourceCo and Head of Sustainability.
UPDATING OUR PRIORITIES FOR 2019
At PUMA, we define materiality by gathering feedback from our stakeholders to
help us identify and focus on PUMA’s most material aspects from the sustain-
ability perspective as well as the highest influence on business success. To en-
sure that our current sustainability strategy is actively supporting the United
Nations Sustainable Development Goals (“SDGs”), we conducted a review of
those topics we have classified as most material to inform our strategy and drive
our efforts.
This review analyzed our 10FOR20 targets alongside the SDGs and global
sustainability trends and included engaging with our internal and external stake-
holders to seek their input as we refined our strategy. Building on previous
exercises, the results confirmed that most of the topics covered by our current
strategy continue to be important and should remain in focus in the upcoming
years. These include human rights, worker health and safety, chemical man-
agement and addressing the threat of climate change. In addition, we identified
new topics which we found to be increasingly relevant, such as sustainable
product design, innovation around plastics and packaging, and circularity.
The results of our updated materiality analysis were shared with the PUMA
Management Board and provided us with an refreshed list of emphases for our
sustainability strategy going forward that maps to our 10FOR20 targets. These
are our most material topics:
OUR PRIORITIES
• Supply chain transparency
• Chemical use and discharge
• Good supplier working
• Climate change strategy
conditions
• Living wage
• Human rights
• Diversity and inclusion
• Sustainable product design
and development
• Worker health and safety
• Sustainable plastics
• Responsible sourcing of
and packaging
raw materials
• Circularity
8383
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability HOW WE REPORT
This report constitutes a combined non-financial report in accordance with sec-
tions 289b to 289e and 315b, 315c in conjunction with 289c to 289e of the German
Commercial Code (HGB).
The reporting period covered is January 1st, 2018 to December 31st, 2018.
No restatements of information have been made in this report.
We have provided separate reports for PUMA SE and the PUMA Group within
the “Governance and People at PUMA” section only. Separate reporting of other
sustainability data would not add any meaningful new information or value and
would require significant additional resources, so we have omitted it here.
Information about PUMA’s business model is set out in the Financial section of
this Annual Report on page 92.
ENDNOTES
STAKEHOLDER ENGAGEMENT
PUMA engages in substantive dialogues with its internal and external stake-
holders and integrates their feedback in the decision-making process. Regional
teams identify, map and prioritize their stakeholders. The consolidated
information shows the engagement priority for each stakeholder. During the
year 2018, we did not conduct a global stakeholder dialogue meeting, but instead
focused on our annual supplier round-table meetings in all major sourcing re-
gions as well as interviews and a stakeholder survey as part of our updated
materiality analysis.
The stakeholders with whom PUMA engages include employees, NGOs (inter-
national and local), suppliers, workers / unions, academia, trade / industry
associations, investors, consumers, international institutions, retailers,
external monitors, service providers and the media.
PUMA continues to place a strong emphasis on industry collaboration. There-
fore, PUMA engages throughout the year with a number of international orga-
nizations including the Better Work Program, the Fair Labor Association, the
Sustainable Apparel Coalition, the Zero Discharge of Hazardous Chemicals
Foundation, the Apparel and Footwear International Restricted Substances List
Management Group as well as the United Nations Climate Secreteriat. In addi-
tion, we partner with relevant certification organizations regarding the use of
specific materials, such as bluesign® Technologies, the Leather Working Group,
the Better Cotton Initiative, the Forest Stewardship Council and Textile Exchange.
Our global initiatives are supported by regional partnerships with organizations
such as the Bangladesh Accord on Fire and Building Safety, the Indonesia Pro-
tocol on Freedom of Association and the German Partnership for Sustainable
Textiles. Lastly, we are active members of the World Federation of the Sporting
Goods Industry as well as the European Sporting Goods Industry Federation.
For more information on our stakeholder engagement please visit:
http://about.PUMA.com/en/sustainability/stakeholders
8484
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability CORPORATE GOVERNANCE
COMPLIANCE MANAGEMENT SYSTEM AT PUMA
PUMA is a global sports company, aiming for sustainable growth and innovation.
PUMA recognizes the legal risks inherent in running a global business in a fast-
paced environment where laws and customs differ from country to country. PUMA
has introduced a compliance management system (CMS) to identify, control and
monitor compliance risks at an early stage. By developing policies as well as
advising and training employees, the CMS aims to prevent potential financial
losses or reputational damage for the company and to prevent misconduct.
PUMA’s compliance organization consists of a Chief Compliance Officer based
at the headquarter in Herzogenaurach and reporting to the CEO of PUMA SE
and a network of Local Compliance Officers. Local compliance Officers have
been appointed for operating subsidiaries in all regions to ensure that Compli-
ance measures are rolled out globally and to give employees a local point of
contact. As an additional method of preventing and detecting incidents, we have
implemented an electronic whistleblowing system which offers employees an
additional channel to report suspected compliance violations. Employees are
encouraged to report their concerns to their manager, Local Compliance Officer
or HR Business Partner. However, if this is not possible for some reason, they
can report from anywhere at any time, anonymously if they choose, by using a
web-based platform. Incidents are reported to the top management, investi-
gated immediately and thoroughly, and the required disciplinary steps are taken
where necessary.
The PUMA Code of Ethics sets out the principles governing our actions and
values. It contains rules on the handling of conflicts of interest, personal data,
insider information and prohibits anti-competitive behavior as well as corruption
in any form. The Code of Ethics is an integral part of every employment contract.
In order to further reduce the risk of misconduct, the PUMA Code of Ethics is
accompanied by concrete guidelines governing selected risk areas in detail.
ANTI-CORRUPTION MEASURES
The fight against corruption is one of the core topics of the Compliance Manage-
ment System. At PUMA, we have a zero-tolerance approach regarding bribery
and corruption and this is clearly communicated by top-level management.
Employees are regularly familiarized with the rules of the Code of Ethics and
the Group guidelines, can access them on the Compliance site on the Intranet
and are thus made aware of compliance regulations. Every year, PUMA rolls-out
a group-wide mandatory e-learning unit on the PUMA Code of Ethics. To make
sure that employees are familiar with all topics described in the Code of Ethics,
the e-learning covers different topics every year. The e-learning that was
launched in October 2018 focussed on conflicts of interest as a form of bribery,
confidentiality of information and financial integrity. Sponsor of the campaign
was the Management Board of PUMA SE, above all the CEO Bjørn Gulden, who
promoted the e-learning lessons to all PUMA employees. The completion rate
of this e-learning on the reference date 31 October 2018 was appr. 99% of PUMA
Group (PUMA SE appr. 99%) employees with a corporate email account.
In addition, special face-to-face training sessions were held on individual topics
such as antitrust and anti-corruption, which raise awareness of the essential
legal framework and internal company regulations.
Highlights: 99% of all PUMA staff with email account globally completed
our Code of Ethics training and 93% of our core suppliers were trained in
corruption measures
To emphasise PUMA‘s commitment to the fight against corruption along the
supply chain, we have explicitly included appropriate principles of conduct in the
PUMA Code of Conduct in 2016. The Code of Conduct sets out the minimum
standards to which our partners in the supply chain must adhere. In 2017, we
added anti-corruption clauses to the contracts with our suppliers on this basis.
They oblige our contractual partners to establish or further develop appropriate
systems for fighting bribery and corruption in their respective companies. PUMA
controls compliance with these requirements within the scope of its annual
SAFE audits. In 2018, 93% of all PUMA‘s core suppliers submitted their certifi-
cates of the UN Global Compact e-learnings tool on the subject in order to raise
awareness of the fight against corruption. We provide our suppliers with our
guidelines for combating and preventing bribery and corruption in order to
facilitate the establishment of appropriate internal standards.
8585
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability INDEPENDENT AUDITOR’S
REPORT ON A LIMITED
ASSURANCE ENGAGEMENT
CONCERNING SUSTAIN-
ABILITY INFORMATION
ACCORDING GRI *
To PUMA SE, Herzogenaurach (Germany)
OUR ENGAGEMENT
We have performed a limited assurance engagement on the disclosures made
within the section “Sustainability” and “Our People” within the group report 2018
– Combined Financial and Sustaina-bility Report (hereinafter: “sustainability
report”) of PUMA SE, Herzogenaurach (Germany), (herein-after: “the Company”)
for the period from January 1 to December 31, 2018.
In the course of our review we did not examine and assess the non-financial
information concerning their accordance based on § 315c HGB (German
Commercial Code) in conjunction with §§ 289c to 289e HGB. In addition, the
examination of references to internal or external sources of documentation and
expert opinions was not subject of our engagement.
RESPONSIBILITY OF THE LEGAL REPRESENTATIVES
The Legal Representatives of the Company are responsible for the preparation
of the sustainability report in compliance with the Sustainability Reporting
Standards of the Global Reporting Initiative provided in the “Core” option
(hereafter: “GRI criteria”) as well as for the selection of the disclosures to be
assessed.
This responsibility of the Company’s Legal Representatives includes the
selection and application of appropriate methods for the sustainability reporting
as well as making assumptions and estimates related to individual sustainability
* We have issued an independent assurance report in German language, which is
authoritative. The following text is a convenience translation of the independent
practitioner’s assurance report.
disclosures, which are reasonable in the circumstances. In addition, the Legal
Representatives are responsible for such internal control they have determined
necessary to enable the preparation of the sustainability report that is free from
material misstatements, whether intentional or unintentional.
PRACTITIONER’S DECLARATION RELATING TO
INDEPENDENCE AND QUALITY
We are independent of the Company in accordance with the provisions under
German commercial law and professional requirements, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
Our audit company applies the German national legal requirements and the
German profession’s pronouncements for quality control, in particular the
by-laws governing the rights and duties of public auditors and chartered
accountants (Berufssatzung für Wirtschaftsprüfer und vereidigte Buchprüfer)
as well as the IDW Standard on Quality Control 1: Requirements for Quality
Control in Audit Firms [IDW Qualitätssicherungsstandard 1: Anforderungen an
die Qualitätssicherung in der Wirtschaftsprüferpraxis (IDW QS 1)], which comply
with the International Standard on Quality Control 1 (ISQC 1) issued by the
International Auditing and Assurance Standards Board (IAASB).
PRACTITIONER’S RESPONSIBILITY
Our responsibility is to express a limited assurance conclusion on the disclosures
within the sustainability report, based on the assurance engagement we have
performed.
We conducted our assurance engagement in compliance with the International
Standard on Assurance Engagements (ISAE) 3000 (Revised): “Assurance
Engagements other than Audits or Reviews of Historical Financial Information”
issued by the IAASB. This standard requires that we plan and perform the
assurance engagement in a form that enables us to conclude with limited
assurance that nothing has come to our attention that causes us to believe that
the information disclosed in the sustainability report of the Company for the
period from January 1 to December 31, 2018 has not been prepared, in all
material respects, in compliance with the relevant GRI criteria. In a limited
assurance engagement the assurance procedures are less in extent than for a
reasonable assurance engagement and, therefore, a substantially lower level
of assurance is obtained. The assurance procedures selected depend on the
practitioner’s professional judgment.
8686
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability Within the scope of our limited assurance engagement, which was performed
from January to March 2019, we conducted, amongst others, the following audit
procedures and other activities:
• Obtaining an understanding of the structure of the sustainability organization
and of the stakeholder engagement
•
Interview of the Legal Representatives and the relevant employees that
participated in the preparation of the sustainability report about the
preparation process, about the internal control system relating to the
process as well as about the disclosures within the sustainability report at
the headquarter in Herzogenaurach (Germany)
•
Identification of risks of material misstatement within the sustainability
report
• Analytical assessment of disclosures within the sustainability report
PURPOSE OF THE ASSURANCE STATEMENT
We issue this report on the basis of the engagement agreed with the Company.
The limited assurance engagement has been performed for purposes of the
Company and the report is solely intended to inform the Company on the results
of the assurance engagement.
LIABILITY
The report is not intended to provide third parties with support in making
(financial) decisions. Our responsibility exclusively refers to the Company and
is also restricted under the engagement agreed with the Company on January
15, 2019 as well as in accordance with the “General engagement terms for
Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften (German public
auditors and German public audit firms)” from January 1, 2017 of the Institut der
Wirtschaftsprüfer in Deutschland e.V. We do not assume any responsibility
to third parties.
• Comparison of selected disclosures with corresponding data in the
consolidated financial statements and combined management report
Munich (Germany), March 1, 2019
• Evaluation of the presentation of the disclosures
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
PRACTITIONER’S CONCLUSION
Based on the assurance work performed and evidence obtained, nothing has
come to our attention that causes us to believe that the information disclosed in
the sustainability report of the Company, for the period from January 1 to
December 31, 2018 has not been prepared, in material respects, in compliance
with the relevant GRI criteria.
Our opinion does not cover the non-financial information concerning their
accordance based on § 315c HGB (German Commercial Code) in conjunction
with §§ 289c to 289e HGB. In addition, the examination of references to internal
or external sources of documentation and expert opinions was not subject of
our engagement.
Christof Stadter
[German Public Auditor]
p.p. Thomas Krick
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PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationSustainability 8
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IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional Information
OVERVIEW 2018
PUMA GROUP ESSENTIAL INFORMATION
90
92
COMMERCIAL ACTIVITIES AND ORGANIZATIONAL
STRUCTURE ����������������������������������������������������������������������������92
COMMENTS ON THE GERMAN GAAP FINANCIAL
STATEMENTS OF PUMA SE
FURTHER INFORMATION
112
116
INFORMATION CONCERNING TAKEOVERS ������������������������ 116
TARGETS AND STRATEGY ������������������������������������������������������92
COMPENSATION REPORT ���������������������������������������������������� 117
CORPORATE GOVERNANCE REPORT INCLUDING
THE STATEMENT ON CORPORATE GOVERNANCE
IN ACCORDANCE WITH § 289F AND § 315D HGB ��������������� 119
RISK AND OPPORTUNITY REPORT
SUPPLEMENTAL REPORT AND OUTLOOK
124
129
Combined Management Report:
This report combines the Management Report of the PUMA Group
and the Management Report of PUMA SE.
PRODUCT DEVELOPMENT AND DESIGN ������������������������������93
SOURCING �������������������������������������������������������������������������������94
EMPLOYEES ����������������������������������������������������������������������������97
MANAGEMENT SYSTEM ���������������������������������������������������������98
INFORMATION REGARDING THE
NON-FINANCIAL REPORT �����������������������������������������������������99
ECONOMIC REPORT
99
GENERAL ECONOMIC CONDITIONS ��������������������������������������99
SALES ������������������������������������������������������������������������������������100
REGIONAL DEVELOPMENT ��������������������������������������������������101
RESULTS OF OPERATIONS ��������������������������������������������������103
DIVIDENDS ����������������������������������������������������������������������������106
NET ASSETS AND FINANCIAL POSITION ���������������������������107
CASH FLOW ���������������������������������������������������������������������������109
STATEMENT REGARDING THE BUSINESS DEVELOPMENT
AND THE OVERALL SITUATION OF THE GROUP ���������������� 111
89
PUMA Geschäftsbericht 2018PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional Information Our majority shareholder Kering S.A. distributed some 70% of PUMA shares to
its shareholders, a spinoff which sharply increased our free float from 13% to
55%. As a result, we changed our governance structure from a monistic
management system to a dualistic system with a Management Board
(“Vorstand”) and a Supervisory Board (“Aufsichtsrat”). After the change in
ownership was completed, PUMA made its comeback to the M-Dax in June 2018.
Another highlight, both from a sports and business perspective, was PUMA’s
re-entry into the basketball category. With the help of Jay-Z, PUMA’s Creative
Director for Basketball, we rolled out an exciting campaign, which was well re-
ceived by athletes, media and fans alike. Our first shoe in this category in a long
time, the Clyde Court Disrupt, was quickly sold out in its market debut. We added
to our credibility by signing some of the biggest names in basketball, such as
Skylar Diggins-Smith, Terry Rozier, Rudy Gay, Danny Green and four-time NBA
All-star DeMarcus Cousins. In addition, we contracted the Number 1 picks in
this year’s NBA draft Deandre Ayton, Marvin Bagley III, Kevin Knox, Michael
Porter Jr and Zhaire Smith.
In football, the FIFA World Cup 2018 in Russia offered us the perfect stage to
present our brand and innovative performance products. We achieved high
visibility during the tournament thanks to our four partnered national teams
Uruguay, Switzerland, Serbia and Senegal and our impressive roster of players.
With Uruguay and Switzerland PUMA assured its presence in the knockout
stage, while with Antoine Griezmann and Romelu Lukaku two of the three top
scorers of the tournament were PUMA players. Antoine Griezmann was even
awarded “FIFA Man of the Match” after scoring the winning goal in the final. All
our players were equipped with special editions of the football boots PUMA
FUTURE or PUMA ONE. Furthermore, we have enlarged our players’ roster with
international football stars, including Barcelona and Uruguay striker Luis
Suarez, Vincent Kompany (Manchester City), Axel Witsel (Borussia Dortmund),
David Silva (Manchester City), Dejan Lovren (FC Liverpool) and Davie Selke
(Hertha BSC).
In 2018, our Running and Training category was driven by the extraordinary
performances of our athletes in track and field along with the introduction of
first-class products. For example, the 19-year-old Cuban Juan Miguel
Echevarria did not only win the Diamond League Meeting in Stockholm, but also
the IAAF title “Highlight of the Season 2018” with his incredible long-jump of
8.83 meters. We also enlarged our portfolio by signing additional top athletes
like Europe’s “fastest man”, French sprinter Jimmy Vicaut.
With the running shoe HYBRID, we delivered an entirely new definition of midsole
technology to the market. Meanwhile, the biggest highlights of 2018 in our
Women’s category were the shoe models PHENOM and DEFY, advertised by
popstar and social media influencer Selena Gomez, along with the announcement
of supermodel Adriana Lima as an ambassador for Women’s training.
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Michael Lämmermann
OVERVIEW 2018
2018 was an exciting and successful year for PUMA, filled with many highlights
in sports and business. In the year of our 70th anniversary, we kept going full
steam ahead towards our goal of becoming the world’s fastest sports brand.
With our return to basketball and the signings of European top football clubs,
like A.C. Milan and Olympique de Marseille, we further strengthened our position
in sports performance, while our partnered teams, athletes and federations
were very successful.
Footwear was a large revenue contributor in 2018, even though changing
consumer tastes presented us with some challenges. We proved, however, that
our FOREVER FASTER spirit has become deeply engrained into the way we
conduct our business. When consumers demanded more “chunky shoes” during
the year, a reemerging fashion trend from the 1990s, we reacted swiftly with our
successful new style platforms Thunder, RS-0 and the RS-X. With the unique
CELL Platform, we also revived a true PUMA classic from the nineties.
PUMA Annual Report 2018
Once again, the PUMA partnered teams – Mercedes-AMG Petronas, Scuderia
FERRARI and Red Bull Racing – dominated the Formula One season, deciding
the championship between themselves. Finally, the title was claimed by
Mercedes and Lewis Hamilton, who also won the fifth drivers’ title of his career.
More good news for PUMA Motorsport was the hype surrounding their lifestyle
products, which were particularly tangible on the US and French markets.
In Golf, our players Rickie Fowler, Lexi Thompson and Bryson DeChambeau
continued to add excitement to the brands PUMA and COBRA Golf, with their
many sporting successes. Bryson DeChambeau, for instance, caused a stir with
his ONE Length irons, achieving five tournament victories with this to-date
unique technology, that provides all irons with the same length.
Another milestone birthday rounded up PUMA’s anniversary year: In our sport-
style category, the SUEDE, one of our greatest classics, turned 50. We marked
this occasion with a string of collaborations and special editions with several
designers, artists and brands. Throughout the year, new editions of the SUEDE
were emblazoned with designs by fashion icon Karl Lagerfeld, rock legend Paul
Stanley and cartoon character Hello Kitty to name but a few.
Inspired by Tommie Smith, who made a mark against racism and social
inequality with his legendary “silent gesture” at the 1968 Olympics, PUMA
launched the #REFORM campaign in Autumn 2018. With the help of activists
from the world of sports, music and entertainment, among others American
rapper Meek Mill, the program supports NGOs and encourages conversations
around issues such as universal equality and criminal justice reform in the
United States.
With the move of our employees into the new office building, the extension of our
company headquarters in Herzogenaurach was completed. The new offices with
space for 550 employees were designed according to an innovative design
concept and impress with state-of-the-art equipment, light-flooded offices and
flexible workplaces. A top-equipped fitness studio with the latest equipment and
classrooms, as well as outdoor facilities for football, basketball and volleyball,
offer our employees a comprehensive range of sports.
The consistent implementation of our FOREVER FASTER corporate strategy
and our ability to react quickly and flexibly to changes and trends in market
conditions have contributed to PUMA’s strong sales growth in the financial year
2018. This shows that, with regard to increasing our brand heat and improving
our product range, we are also on the right path. PUMA’s sales rose in the
financial year 2018 currency-adjusted by 17.6%. Therefore, the currency-ad-
justed sales growth in a high single-digit percentage rate prospected in the
previous Management Report for 2018 and the forecast of currency-adjusted
sales growth of 14% to 16%, that was adjusted upwards during the year, were
exceeded. In the reporting currency, the Euro, this corresponds to an increase
in sales of 12.4% from € 4,136 million in the previous year to € 4,648 million in
2018. The relatively large difference between currency-adjusted sales growth
(+17.6%) and the change in the sales in the reporting currency, the Euro, (+12.4%)
is due to the weakness of a large number of currencies against the Euro.
Nevertheless, PUMA was able to fully achieve its financial targets for the past
financial year.
PUMA’s gross profit margin improved in the financial year 2018 by 110 basis
points from 47.3% to 48.4%. This, in addition to the sales growth, significantly
increased profitability in 2018. The main drivers for the development of the gross
profit margin were further improvements in sourcing, higher sales of new
products with a higher margin, and a higher proportion of our own retail sales.
Other operating income and expenses increased by 11.8% in the financial year
2018 due to ongoing investment in marketing, retail and IT. In terms of sales,
this meant an improvement in the cost ratio from 41.7% in the previous year to
41.5%, which also contributed to the improvement in profitability in 2018.
The operating result (EBIT) increased in the financial year by 37.9% from
€ 244.6 million to € 337.4 million and was therefore above the guidance given
in the beginning of 2018, which had originally forecasted an operating result
within a range of between € 305 million and € 325 million. The forecast, as
adjusted during the year, of an operating result within a range of between
€ 325 million and € 335 million was therefore slightly exceeded in the past
financial year.
The significant improvement in profitability in 2018 was also reflected in the
increase in net earnings and earnings per share, which increased by 38.0%
compared to the previous year. Net earnings increased from € 135.8 million
in the previous year to € 187.4 million, and the earnings per share increased
accordingly from € 9.09 in the previous year to € 12.54.
PUMA’s dividend policy foresees a distribution of 25% to 35% of net earnings. In
accordance with this, the Management Board and the Supervisory Board will
propose a dividend of € 3.50 per share for the financial year 2018 at the Annual
General Meeting on April 18, 2019. This corresponds to a payout ratio of 27.9%.
The PUMA share was again included in the M-DAX in June 2018, as the free
float increased from just under 13% to 55% due to the reduction in Kering‘s
shareholding and, as a result, the trading volume of the PUMA share also
increased significantly. The share price developed very positively in 2018 and
stood at € 427.00 at the end of the year. This represents an increase of 17.6%
compared to the previous year’s € 363.00. The market capitalization of the
PUMA Group increased accordingly to around € 6.4 billion (previous year:
€ 5.4 billion).
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PUMA Annual Report 2018
PUMA GROUP ESSENTIAL
INFORMATION
COMMERCIAL ACTIVITIES AND ORGANIZATIONAL
STRUCTURE
The company operates as European corporation, PUMA SE, with Group head-
quarters in Herzogenaurach, Germany. Our internal reporting activities are
based according to three regions (EMEA, the Americas and Asia / Pacific) and
three product segments (footwear, apparel and accessories). A detailed
description of the various segments can be found in chapter 26 of the Notes to
the Consolidated Financial Statements.
Our revenues are derived from the sale of products from the PUMA and Cobra
Golf brands via the wholesale and retail trade, as well as from sales in our own
retail and online stores. We market and distribute our products worldwide
primarily via our own subsidiaries. There are distribution agreements in place
with independent distributors in a small number of countries.
As of December 31, 2018, 103 subsidiaries were controlled directly or indirectly
by PUMA SE. Our subsidiaries carry out various tasks at the local level, such as
sales, marketing, product development, sourcing and administration. A full list
of all subsidiaries can be found in chapter 2 of the Notes to the Consolidated
Financial Statements.
TARGETS AND STRATEGY
PUMA aims to become the fastest sports brand in the world. For this reason,
we have focused on five priorities over the past few years: brand heat, a
competitive product range, a leading offer for women, an improved distribution
quality and organizational speed. Positive feedback from retail partners around
the world, better sell-through as well as improved financial results in 2018
confirm that PUMA is on the right track. In 2018, we have added a sixth priority:
re-entering basketball with the aim to strengthen our position on the North-
American sports market.
The PUMA brand draws strength and brand heat from its unique heritage in
sports. PUMA is associated with some of the greatest sports legends: Pelé,
Maradona, Usain Bolt, Tommie Smith, Boris Becker, Lothar Matthäus, Linford
Christie, and many more. Today, PUMA continues to strengthen its position as
a sports brand through partnerships with some of the most elite ambassadors:
star strikers Antoine Griezmann, Romelu Lukaku, Sergio Agüero and Luis
Suarez, international top clubs Arsenal F.C., Borussia Dortmund and A.C. Milan,
golf stars Lexi Thompson and Rickie Fowler, the five-time Formula One world
champion Lewis Hamilton, Canadian sprinter André De Grasse and the Jamaican
and Cuban Olympic Federations.
In its Sportstyle category, that offers a lifestyle product-range, PUMA has also
developed a unique way of working with cultural and fashion icons to connect
with young trend-setting audiences. This has made PUMA one of the hottest
sports and fashion brands for young consumers. The partnerships PUMA enters
with stars like Selena Gomez, Cara Delevingne and Adriana Lima, open new
doors to an authentic interaction with our target group, aged 16 to 24.
On the product side, PUMA follows a simple and catchy mantra: “Cool stuff that
works”. Our 2018 bestsellers, such as the running shoe HYBRID, the football
boots PUMA FUTURE and PUMA ONE or the successful new Sportstyle
silhouettes Thunder, RS-0 and RS-X, follow that principle.
The “Women’s” category continues to be a priority for PUMA. Not only because
the number of women who do sports is constantly increasing worldwide, but
also because they are trendsetters in taking inspiration from athletic wear for
their everyday wardrobe. PUMA has defined its design principle for women as
“where the gym meets the runway”. Our women’s business has again bolstered
the brand in 2018. Key styles were among others the training shoes DEFY and
MUSE. With our strong standing among women, PUMA is uniquely positioned
to capitalize on this growing segment within the global sportswear market.
A major highlight for us in 2018 was PUMA’s re-entry into the basketball
category. To us, it is not only the performance on the court that matters, but also
the culture surrounding the sport. In addition, our return to basketball is a key
building block to sharpening our overall sports performance credibility in North
America and hence extend our business in other sports categories. We are
excited that JAY-Z has taken the role of Creative Director for PUMA Basketball.
In this function, he is overseeing the creative strategy, marketing, and product
design for all basketball related products. With the CLYDE COURT DISRUPT,
our first basketball silhouette after more than 20 years of absence, we see
ourselves well positioned.
PUMA has continuously improved the quality of its distribution and expanded its
presence in key sports performance and Sportstyle accounts around the world.
PUMA remains dedicated to strengthening its relationships with key retailers
by being a flexible and service-oriented business partner. Improved sell-through
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9292
PUMA Annual Report 2018
has further helped PUMA to gain more shelf space in our partners’ retail stores
in 2018. We have been able to record higher sell-through in wholesale, expand
our retail store network and achieve like-for like sales growth in our own retail
stores, while registering continued strong growth of our eCommerce business.
Furthermore, PUMA continued to upgrade its owned-and-operated retail store
network with further refurbishments. On a regional basis, we have continued to
grow in Europe despite a difficult market environment, while in China sales
growth has accelerated even further, underpinned by approximately 400 store
openings through our partners. In North America we have received a very good
response to our basketball offering so far.
In 2018, PUMA further invested into its IT infrastructure with a strong focus on
Business Intelligence, Planning and IT Security. Concerning the latter, a new
Security Operations Center was implemented to maximize protection from out-
side threats. Additional focus was put on the development of a new ERP system
to be rolled-out in 2019 and the following years. PUMA’s International Trading
Organization, which manages global order and invoice flows centrally, saw
further improvements in the fields of capacity management and collaboration
regarding the sharing of performance data. The new product development
system, implemented in 2017, was further enhanced and rolled-out to all
divisions. Furthermore, PUMA put additional efforts into the modernization of
distribution centers in various countries around the globe.
In addition to these six priorities, social, economic and environmental
sustainability remains a core value for PUMA. In 2018, we continued to execute
our 10FOR20 sustainability strategy with a focus on creating positive impact
through industry collaboration. Together with many industry peers, we started
to roll out a harmonized assessment methodology on social and environmental
compliance for our core suppliers. Moreover, we developed an Industry Charter
for Climate Action under the umbrella of UN CLIMATE CHANGE, which will come
into effect 2019. We also launched a sustainability focused and carbon neutral
apparel collection together with our customer ASOS. Our efforts were recog-
nized by PUMA’s return to the FTSE4Good Index for sustainable companies, as
well as by winning the PETA fashion award for a vegan shoe.
The year 2018 was exciting and eventful. Thanks to our commitment to the
FOREVER FASTER strategy and our fantastic team at PUMA we have taken a
further and significant step of becoming the fastest sports brand in the world.
PRODUCT DEVELOPMENT AND DESIGN
When Rudolf Dassler founded the company back in 1948, his vision was to create
shoes that give athletes the speed, agility and spirit of a puma, inspiring them
in competition and empowering them to win. With our mission statement
FOREVER FASTER, we stay true to our initial purpose: As the World’s fastest
sports brand, we offer athletes the products that help them unleash their full
potential and allow them to express their personality and style.
FOREVER FASTER also stands for the rapid development and implementation
of new technologies and designs: Fast decision-making and agile production
pipelines allow the brand to quickly react to consumer trends and deliver
relevant products to the market.
With clear seasonal creative directions and a consistent visual language, our
designers, under the guidance of PUMA’s Global Creative Director Torsten Hoch-
stetter, create products that both capture the Zeitgeist and set future trends.
The fusion of sport and style is what makes PUMA products desirable, as they
not only meet performance needs, but also look great.
Spring-Summer 2018, for instance, was all about the FIFA World Cup 2018 and
the “Euphoria” of football fans, while our Women’s offer followed the principle
“En pointe”, inspired by the dancers of the New York City Ballet and their
powerful grace. Our Autumn-Winter 2018 creative direction focused on concepts
such as “New Skool”, which thoughtfully curated and reinterpreted iconic styles
of the 80s and 90s with bold geometries and modern color block.
In 2018, we introduced a broader product range to the market, mixing innovative
technologies with bold styles. This mix was proven to be on point, as PUMA’s
improved sell-through performance and the continued positive response of
retail partners and customers showed.
For its return to Basketball, PUMA introduced its first basketball silhouette in
more than 20 years: the Clyde Court Disrupt, which was first brought to the
market in an aggressive colorway in October 2018. Engineered for the court,
with swagger for the street, the Clyde Court Disrupt catches the spirit and style
set down by NBA icon Walt Clyde Frazier. The shoe’s technical features, including
PUMA’s Hybrid Foam technology and a lightweight knit upper, provide the player
with the support and flexibility they need to perform on court. Additional models
followed, such as the Halloween special edition X-RAY, the PURPLE GLOW, the
OCEAN DRIVE and the PEACE ON EARTH right before Christmas.
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9393
PUMA Annual Report 2018
Another milestone of 2018 was the introduction of HYBRID, the latest addition
to the brand’s Running & Training product line. Combining two of its most
innovative technologies - IGNITE FOAM and NRGY beads - PUMA offers an
entirely new definition of mid sole technology. With superior cushioning and
energy return, this running shoe is ideal for longer and faster runs.
With the launches of the THUNDER and the new editions of the Running System
(RS) and CELL, PUMA paid tribute to its most iconic silhouettes of the 80s and
90s, while responding to 2018’s “chunky shoe” trend.
The THUNDER, with its retro color blocking and disruptive design, was an instant
success, as the first two product drops were sold out worldwide within hours.
The PUMA CELL Endura, a classic from the PUMA Archive, with its durable and
resilient cushioning technology, celebrated its comeback thanks to new
materials and state of the art production techniques. PUMA‘s “Future Retro“
product range draws its inspiration from the past to inspire future designs.
Key styles of our Women’s footwear business were the training silhouettes
MUSE, PHENOM and DEFY, while the CALI and NOVA enriched our Sportstyle
range.
The highly exclusive PHENOM LUX marked Selena Gomez’s first design
collaboration with PUMA. This stylish performance shoe was not only made to
stand out, but also to help out: the sales benefitted the Lupus Research Alliance,
the world’s leading private funder of Lupus research, an autoimmune disease,
from which Selena Gomez also suffers.
One of the most notable training silhouettes for Women’s, the DEFY, literally
defied training standards, by merging high energy return and high fashion in
one shoe.
Research and product development at PUMA mainly comprise the areas of
innovation (new technologies), product design and model and collection devel-
opment. The research and product development activities range from the
analysis of scientific studies and customer surveys through the generation of
creative ideas to the implementation of innovations in commercial products. The
activities in research and product development are directly linked to sourcing
activities.
As of December 31, 2018, a total of 946 people were employed in research and
development / product management (previous year: 894). In 2018, research and
development / product management expenses totaled € 97.8 million (previous
year: € 98.5 million), of which € 54.0 million (previous year: € 53.4 million)
related to research and development.
SOURCING
The Sourcing Organizationn
PUMA’s sourcing functions, referred to as the central management of the sourcing
of products for PUMA and PUMA Group’s own brand, Cobra, are merged in PUMA
Group Sourcing (PGS.). PUMA’s global trading entity, PUMA International Trading
GmbH (PIT), with head office in PUMA’s corporate headquarters Herzogenaurach
(Germany), is the Group company mainly responsible for PUMA Group Sourcing.
PIT coordinates product sourcing from independent manufacturers by sourcing
products itself from the manufacturers and selling them to PUMA distribution
subsidiaries or supporting PUMA distribution subsidiaries directly in the local
sourcing of products via local manufacturers. Additionally, PIT manages
the cooperation with PUMA’s suppliers worldwide and oversees the production
processes at the different sourcing sites in Hong Kong, China, Vietnam,
Bangladesh, India, Portugal, South Africa, Brazil and Mexico. Furthermore, PIT
carries out a centralized hedging against currency risks. The centralized control
of these processes guarantees a high degree of transparency within the supply
chain, reduces sourcing complexity and creates efficiencies through largely
automated processes.
PUMA Group Sourcing (PGS) collaborates with a network of independent
manufacturers worldwide. The aim is to offer an optimal service so as to meet
global requirements for service, quality and safety, along with environmental and
social aspects in the supply chain. Under the six core principles of partnership,
transparency, flexibility, speed, simplicity, and effectiveness, the central sourcing
responsibility allows for continuous improvements with regard to sourcing costs,
sourcing flexibility and the necessary delivery reliability. This guarantees
distribution subsidiaries high-level service and a sustainable production and
supply chain. Additionally, PUMA’s sustainability function (Corporate Sustain-
ability Department, formerly PUMA SAFE) is successfully integrated into the PGS
organization since 2016. This ensures that social and environmental issues and
standards of good corporate governance are integrated into day-to-day sourcing
activities.
In 2018, further operating improvements could be implemented in sourcing, in
particular with regards to the centralization and standardization of processes and
systems, capacity management, data analysis and business intelligence. In 2018,
the operational improvements over the last few years have made a significant
contribution to the successful handling of the significantly increased sourcing
volume, especially in the apparel segment, with the existing sourcing organization
setup. Additionally, PUMA Group Sourcing established a new office in Portugal to
manage the local sourcing of high quality products with short lead times.
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9494
PUMA Annual Report 2018
Furthermore, 2018 saw the successful continuation of the innovative financing
program for PUMA suppliers. This program allows for receivables of the suppliers
from goods delivered to PUMA to be paid more quickly provided they meet certain
sustainability criteria. As a result, financial scope was created for new invest-
ments for suppliers. In addition, the program for suppliers also acts as a financial
incentive for complying with its standards regarding ecology, labor law and
society, as well as continuously improving them.
The Sourcing Markets
During the financial year 2018, PGS via PIT collaborated with 152 independent
suppliers (previous year: 160) in 33 countries worldwide. Thus, a certain
continuity is apparent for the supplier base. The strategic cooperation with
long-term partners was one of the key competitive advantages in 2018 to ensure
stable sourcing of a significantly increased sourcing volume, in particular in the
apparel segment.
F�1 SOURCING MARKETS 2018 (Amount)
Africa (1%)
America (3%)
Europe (2%)
Asia (94%)
Asia remains the strongest sourcing region overall with 94% of the total volume,
followed by America with 3%, and EMEA with also 3% (thereof Europe with 2%
and Africa with 1%).
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9595
PUMA Annual Report 2018
F�2 SOURCING REGIONS OF PUMA GROUP SOURCING
AMERICAS
EMEA
APAC
AMERICAS (3%)
APAC (94%)
EMEA (3%)
As a result, the six most important sourcing countries (91% of the total volume)
are all located on the Asian continent. Once more, Vietnam was the strongest
production country with a total of 32%. China followed at 24%. Cambodia was in
third place at 14%, one percentage point up from 2017. Bangladesh, which
focuses on apparel, is in fourth place at 13%. Bangladesh thus increased its
share of the sourcing volume from 10% in the previous year to 13% in 2018.
Indonesia, which focuses on footwear production, produces 4% of the total
volume and is in fifth place. India is in sixth place at 3%.
Rising wage costs and macroeconomic influences, such as changes in the trade
environment, have continued to influence sourcing markets in 2018. Such
impacts need to be taken into account in allocating the production. This is a
significant component of our sourcing strategy so as to ensure the secure and
competitive sourcing of products and, furthermore, to successfully manage the
increasing sourcing volumes due to the positive company development.
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9696
PUMA Annual Report 2018
EMPLOYEES
Number of employees
The global number of employees on a yearly average was 12,192 employees in
2018 compared to 11,389 in the previous year. This increase resulted mainly from
the retail area due to the increased number of own retail stores.
Personnel expenses in 2018 increased overall by 0.9% from € 549.1 million to
€ 5 53.8 million. On average, personnel expenses were € 45.4 thousand
compared to € 48.2 thousand in the previous year.
F�3 DEVELOPMENT EMPLOYEES
14,000 –
12,000 –
10,000 –
8,000 –
6,000 –
4,000 –
2,000 –
0 –
2014
2015
2016
2017
2018
Employees (annual average)
Employees (year-end)
As of December 31, 2018, the number of employees was 12,894, compared to
11,787 in the previous year. This represents a 9.4% increase in the number of
employees compared to the previous year. The development in the number of
employees per area is as follows:
F�4 EMPLOYEES (Year-end)
Marketing / Retail /
Sales
Research & Development /
Product management
Administration and
general units
0
2,000
4,000
6,000
8,000
10,000
2018
2017
Talent Recruitment and Development
Our employees are our most important capital for our business success. They
are at the center of our human resources strategy which focuses particularly
on talent recruitment and development. Against the backdrop of our unique
company culture, we provide workplaces worldwide that are aligned with
modern and agile work methods and ensure the wellbeing of our employees.
In order to continue to expand our position in the market, it is essential that
we have highly qualified and motivated personnel and are perceived as an
attractive employer. Our diverse recruitment activities allow us to recruit
external talent in advance, appropriate to the target group, via various
channels, including in par ticular through a proactive direct approach,
thereby boosting our workforce. In addition, we have expanded our activities
at c olleges and universities nationally and internationally to identif y
potential future employees even earlier.
The digitalization and related simplification and acceleration of business
processes made further progress in 2018. After we globally introduced
“Workday”, a leading Human Capital Management System, in 2017, we expanded
the system this year by adding the “talent and performance”, “time recording
and absence management” and “learning” modules. This gives us a worldwide
system for recording working hours as well as vacations and other absences in
Workday. The learning module functions as a platform for all e-learning courses
and on-site training. The training module also provides employees with the
option of creating learning content and sharing it with colleagues.
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PUMA Annual Report 2018
Our aim is to help each of our employees to develop, in an international
environment as well, and at the same time successfully and sustainably keep
them loyal to our company. As a central component of current competitiveness,
this allows us both as a company and as an employer to maintain a dynamic
environment and to be able to keep up with market changes. Based on the Workday
software, a systematic succession plan is created as part of talent management
in addition to the performance assessment and target-setting. Talent available in
the company is identified in the annual employee interviews and fostered using
individual development plans. This type of talent management means that we can
offer our employees attractive career and development opportunities and secure
forward-looking succession planning at the same time.
The continuous professional and personal development of our employees also
guarantees that our workforce has the necessary skills to ensure steady growth
and market expertise. In our efforts to provide adequate entry-level and
development opportunities to talented individuals at all levels, we also promote
the systematic training of our professionals and managers as well as a range
of different training and dual-track (combined work-study) programs. The range
of training we provide includes a number of online or offline training courses
and workshops that are standardized or personally tailored to individual needs.
The continuous development of our PUMA training programs ensures that our
employees always have innovative and diverse opportunities to add to their
qualifications, acquire new skills and build on existing expertise. This approach
helps employees achieve their personal goals and helps the company achieve
its goals as well.
In particular, we also offer a large number of seminars with the aim of developing
employees and managers over the longer term, giving them the opportunity to
apply their newly acquired knowledge in practice between the individual modules
and then to discuss this with other seminar participants. Our internal leadership
program, consisting of several modules, comprises the ILP (“International
Leadership Program”) and ILP2 seminars. These contain a number of measures
to equip employees with the required skills and knowledge to be able to lead
their team. They include intensive training and coaching, including interactive
learning, roleplay simulations and best practice learning, as well as joint
projects. The focus is therefore particularly on “Mindful Leadership” as well as
agile work methods.
Using Speed Up and Speed Up², we carry out human resources development
programs for employees on various levels. Various groups consisting of top
talents are given intensive preparation for the next step in their careers by taking
on interdisciplinary projects and tasks, targeted training courses, mentoring,
and coaching as well as rotating between jobs. Increased visibility to upper
management, the creation of cross-function cooperation and establishing a
strong network are also important components of this program.
Compensation
We at PUMA offer our employees a targeted and competitive compensation
system, which consists of several components. In addition to a fixed base salary,
the PUMA bonus system, profit-sharing programs and various social benefits
and intangible benefits form part of a performance-based compensation
system. We also offer long-term incentive programs for the senior management
level that honor the sustainable development and performance of the business.
In 2018, the bonus system was standardized worldwide and made even more
transparent. Incentives are now exclusively linked to PUMA’s corporate goals.
MANAGEMENT SYSTEM
We use a variety of indicators to manage our performance in relation to our top
corporate goals. We have defined growth and profitability as being key targets
within finance-related areas. Our focus therefore is on improving sales, the
gross profit margin, and operating result (EBIT). These are the financial control
parameters that are of particular significance. Moreover, we aim to minimize
working capital and improve free cash flow. Our Group’s Planning and
Management System has been designed to provide a variety of instruments in
order to assess current business developments and derive future strategy and
investment decisions. This involves the continuous monitoring of key financial
indicators within the PUMA Group and a monthly comparison with budget
targets. Any deviations from the targets are analyzed in detail and appropriate
countermeasures are taken should such deviations have a negative impact.
Changes in sales are also influenced by currency exchange effects. This is why
we also state any changes in sales in Euro, the reporting currency, adjusted for
currency exchange effects in order to provide information that is relevant to the
decision-making process when assessing the revenue position. Currency-
adjusted sales volumes are used for comparison purposes and are based on the
values that would arise if the foreign currencies included in the consolidated
financial statements were not translated at the average rates for the previous
reporting year but were instead translated at the corresponding average rates
for the current year. As a result, currency-adjusted figures are not to be regarded
as a substitute or as superior financial indicators, but should instead always be
regarded as additional information.
We use the indicator free cash flow in order to determine the change in cash
and cash equivalents after deducting all expenses incurred to maintain or
expand the organic business of the PUMA Group. Free cash flow is calculated
from the cash flow from operating activities and investment activities. We also
use the indicator free cash flow before acquisitions, which goes beyond free
cash flow and includes an adjustment for incoming and outgoing payments that
are associated with shareholdings in companies.
We use the indicator working capital in order to assess the financial position.
Working capital is the difference between other current assets - including in
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9898
PUMA Annual Report 2018
particular inventories and trade receivables - and current liabilities. Amounts
that are received in connection with financing activities are not included in
working capital.
Non-financial performance indicators are of only minor importance at PUMA
as control variables.
INFORMATION REGARDING THE NON-FINANCIAL REPORT
In accordance with Sections 289b and 315b of the German Commercial Code
(HGB), we are required to make a non-financial declaration for PUMA SE and
the PUMA Group within the Management Report or present a non-financial
report external to the Management Report, in which we report on environmental,
social and other non-financial aspects. PUMA has been publishing Sustainability
Reports since 2003 under the provisions of the Global Reporting Initiative (GRI)
and since 2010 has published financial data and key sustainability indicators in
one report. In this context, we report the information required under Sections
289b and 315b of the HGB in the Sustainability chapter of our Annual Report. The
Annual Report for the financial year 2018 will be available from April 18, 2019,
on the following page of our website:
https://about.puma.com/en/investor- relations/financial-reports
Furthermore, significant sustainability information can be found on PUMA’s
website under Sustainability at any time:
http://about.puma.com/en/sustainability
ECONOMIC REPORT
GENERAL ECONOMIC CONDITIONS
Global Economy
According to the winter forecast by the Kiel Institute for the World Economy (IFW
Kiel) on December 11, 2018, the global economy slowed over the course of 2018.
In addition to uncertainty caused by increasing trade policy conflicts –
particularly between the United States of America and China – the tightening of
monetary policy in the United States, in particular, contributed to the slowing
down of growth. For 2018, IFW Kiel’s experts expect an increase in global gross
domestic product (GDP) of 3.7%, which represents a slight reduction of 0.1%
compared to its summer forecast.
The slowdown in economic development in 2018 is evident both in the advanced
economies and in the emerging markets. While 2017 was marked by synchronous
growth, 2018 saw differences in economic development between the individual
countries and groups of countries increase. In the industrial nations, expansion
in the United States continued at a faster pace, supported by significant fiscal
stimuli, while the economies of the euro zone and Japan lost considerable
momentum. In the emerging markets, growth slowed to varying degrees, partly
due to poorer financing conditions due to a more restrictive monetary policy on
the part of the US Federal Reserve. While large parts of Asia, Russia and parts
of South America continued their growth trend, Argentina and Turkey fell into
recession.
Sporting goods industry
The sporting goods industry continued to grow strongly in 2018. This development
was primarily driven by higher private household income, which enabled an
increase in consumer spending on sporting goods. The global fitness boom also
continued in 2018. Plenty of movement, a healthy lifestyle, and the accompanying
increase in free-time sporting activities are still in fashion worldwide across
large parts of the population. At the same time, there continued to be a strong
demand for sporting everyday clothes in 2018.
The e-commerce business was a strong driver of growth in the sporting goods
industry in 2018. Many commercial opportunities were taken advantage of in
order to improve the purchasing experience for consumers, such as mobile
technology and social media. In terms of major sporting events of the last year,
it was particularly the Football World Cup in Russia that supported the growth
of the sporting goods industry.
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9999
PUMA Annual Report 2018
SALES
Illustration of Sales Development in 2018 compared to the
Outlook
PUMA’s 2017 Management Report had predicted a currency-adjusted growth in
sales of around 10% for the financial year 2018. This forecast was increased
several times throughout the year and PUMA then expected a currency-adjusted
sales increase of between 14% and 16% for financial year 2018. PUMA was able
to surpass the revised forecast for financial year 2018, exceeding the originally
planned sales target.
More details on sales development are provided below.
Net Sales
PUMA’s net sales rose in the financial year 2018 in the reporting currency, the
Euro, by 12.4% to € 4,648.3 million. Currency-adjusted sales increased by 17.6%.
In particular, the Asia / Pacific region, driven by China, showed a strong
double-digit growth in sales. In terms of products, apparel was the main driver
of sales growth.
F�5 SALES (in € million)
2018
2017
2016
2015
2014
2,000
2,500
3,000
3,500
4,000
4,500
5,000
The most important segment for PUMA – footwear – recorded a growth trend
persistent for 18 quarters at the end of financial year 2018. The strongest
growths were in the Sportstyle and Running and Training categories. Sales
increased in the reporting currency, the Euro, by 10.6% to € 2,184.7 million,
meaning that the footwear segment exceeded the sales mark of € 2 billion for
the first time. Currency-adjusted sales growth of 16.6% was achieved. The
proportion of this segment in total sales fell slightly from 47.7% in the previous
year to 47.0% in 2018.
In the apparel segment, sales increased in the reporting currency, the Euro, by
17.1% to € 1,687.5 million. Currency-adjusted sales increased by 22.2%. The
Sportstyle category was the main driver of sales growth. In addition, the
introduction of new products in the Teamsport and Motorsport categories
contributed to this growth. The apparel segment accounted for 36.3% of Group
sales (previous year: 34.9%).
In the accessories segment, sales increased in the reporting currency, the Euro,
by 7.8% to € 776.1 million. This represents a currency-adjusted increase of
11.0%. The increase resulted particularly from higher sales of socks and
bodywear. Its share in Group sales reduced slightly from 17.4% in the previous
year to 16.7% in 2018.
F�6 SALES BY PRODUCT SEGMENTS (in € million)
2,500 –
2,000 –
1,500 –
1,000 –
500 –
0 –
2014
2015
2016
2017
2018
Accessories
Apparel
Footwear
Retail Businesses
PUMA’s retail activities include direct sales to our consumers (“Direct to
Consumer business”). This includes PUMA’s own retail stores, the so-called
“Full Price Stores”, “Factory Outlets”, and e-commerce online sales. Our own
retail store activities ensure regional availability of PUMA products and the
presentation of the PUMA brand in an environment suitable to our brand
positioning.
PUMA’s retail sales increased in the financial year 2018 by a currency-adjusted
24.0% to € 1,127.5 million. This corresponds to a 24.3% share in total sales
(previous year: 23.2%). The increase of PUMA’s retail sales resulted from both
the increase in sales on a comparable floor area basis compared to last year
and from the targeted expansion of our portfolio of own retail stores. In addition
to the opening of additional retail stores at selected locations worldwide,
optimizing the portfolio also included modernizing existing retail stores in line
with the FOREVER FASTER store concept. This makes it possible to present
PUMA products and related technologies in an even more attractive environment
and strengthens PUMA’s position as a sports brand.
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100100
PUMA Annual Report 2018
Our e-commerce business recorded a far above-average growth in 2018. This was
brought about by, for example, the expansion of the product range in online stores
worldwide and by our targeted sales promotions in the online business. In addition,
our e-commerce activities on special days in the online business such as Singles’
Day in China on November 11 and the world’s biggest online shopping day, known
as “Black Friday / Cyber Monday”, turned out to be particularly successful.
F�7 RETAIL SALES (in € million)
1,250 –
1,000 –
750 –
500 –
250 –
0 –
– 25%
– 20%
– 15%
2014
2015
2016
2017
2018
Retail sales
In % of sales
Licensing Business
For various product segments, such as fragrances, eyewear, and watches,
PUMA issues licenses authorizing independent partners to design, develop,
manufacture, and sell these products. Revenue from license agreements also
includes some sales licenses for various markets. License sales, which are not
part of PUMA’s consolidated sales, but which are, however, the basis for PUMA’s
licensing and commission income, increased in 2018 in the reporting currency,
the Euro, by 7.4% to € 121.9 million. PUMA’s resulting licensing and commission
income increased in 2018 by 3.2% to € 16.3 million.
F�8 LICENSE SALES (in € million) / ROYALTY AND COMMISSION INCOME
(in %)
250 –
200 –
150 –
100 –
50 –
0 –
– 20%
– 16%
– 12%
– 8%
– 4%
– 0%
2014
2015
2016
2017
2018
REGIONAL DEVELOPMENT
In the following explanation of the regional distribution of sales, the sales are
allocated to the respective region of the customer (“Customer Site”). It is divided
into three geographic regions (EMEA, America and Asia / Pacific). A more
detailed regional presentation of the sales according to the registered office of
the respective Group company can be found in chapter 26 in the Notes to the
Consolidated Financial Statements.
PUMA’s sales increased in 2018, by currency-adjusted 17.6%. All regions
contributed to this currency-adjusted development with double-digit growth
rates.
In the EMEA region, sales rose in the reporting currency, the Euro, by 9.4% to
€ 1,800.3 million. This corresponds to a currency-adjusted increase in sales of
11.4%. A particularly strong increase came from France, Spain and the United
Kingdom (UK), which showed double-digit growth in sales. Russia, Ukraine,
Turkey and the United Arab Emirates also grew strongly with double-digit
growth rates. However, the strength of the Euro against, for example, the Turkish
Lira led to significant negative currency exchange effects on sales in the
reporting currency, the Euro.
The EMEA region accounted for 38.7% of Group sales in 2018 in comparison to
39.8% last year.
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101101
PUMA Annual Report 2018
In terms of the product segments, sales of footwear recorded a currency-
adjusted increase of 8.6%. Sales from apparel increased by a currency-adjusted
18.4% and sales from accessories grew by a currency-adjusted 6.6%.
F�10 AMERICAS SALES (in € million)
F�9 EMEA SALES (in € million)
2,000 –
1,750 –
1,500 –
1,250 –
1,000 –
750 –
500 –
250 –
0 –
2014
2015
2016
2017
2018
Sales in the America region increased in the reporting currency, the Euro, by
7.9% to 1,612.5 million. Currency-adjusted sales rose by 16.9%, with both North
and Latin America showing double-digit growth rates and thereby contributing
to the increase in revenue. The weakness of the Argentine Peso against the Euro
did, however, lead to significant negative currency exchange effects on sales in
the reporting currency, the Euro. The share of the America region in Group sales
decreased from 36.1% in the previous year to 34.7% in 2018.
In terms of the product segments, both footwear (currency-adjusted +11.7%
compared to the previous year), apparel (+25.2%), and accessories (+17.7%)
showed very good double-digit growth.
2,000 –
1,750 –
1,500 –
1,250 –
1,000 –
750 –
500 –
250 –
0 –
2014
2015
2016
2017
2018
In the Asia / Pacific region, sales growth was particularly strong. Here, sales
increased in the reporting currency, the Euro, by 24.2% to € 1,235.5 million. This
corresponds to a currency-adjusted increase in sales of 28.8%. The main drivers
of growth in the region were Greater China and Korea, which each showed an
above-average double-digit growth rate. By contrast, sales in Japan grew
moderately compared to the previous year with a high single-digit percentage
rate. The share of the Asia / Pacific region in Group sales increased from 24.1%
in the previous year to 26.6% in 2018.
In the product segments, sales from footwear increased by a currency-adjusted
37.9%. Sales from apparel increased by a currency-adjusted 23.9% and
accessories recorded a rise in sales of a currency-adjusted 7.2%.
F�11 ASIA / PACIFIC SALES (in € million)
1,500 –
1,250 –
1,000 –
750 –
500 –
250 –
0 –
2014
2015
2016
2017
2018
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102102
PUMA Annual Report 2018
RESULTS OF OPERATIONS
T�1 INCOME STATEMENT
Sales
Cost of sales
Gross profit
Royalty and commission income
Other operating income and expenses
Operating result (EBIT)
Financial result / Income from associated companies
Earnings before taxes (EBT)
Taxes on income
Tax rate
Net earnings attributable to non-controlling interests
Net earnings
Weighted average shares outstanding (million)
Weighted average shares outstanding, diluted (million)
Earnings per share in €
Earnings per share, diluted in €
Illustration of Earnings Development in 2018 compared to the
Outlook
In the outlook of the 2017 Annual Report, PUMA forecasted a slight improvement
in the gross profit margin for financial year 2018. PUMA expected an increase
in a mid-to-high single-digit percentage rate for other operating income and
expenses. The forecast for the operating result (EBIT) was within a range of
between € 305 million and € 325 million. In addition, a significant improvement
in net earnings was expected.
These forecasts were raised slightly several times during the year and PUMA
thereafter expected an improvement in the gross profit margin of around 100
basis points compared to the previous year (2017: 47.3%), an increase in other
operating income and expenses in the low double-digit percentage range and an
2018
2017
€ million
%
€ million
%
+ / –%
100.0
-52.7
47.3
0.4
-41.7
5.9
-0.3
5.6
-1.5
-0.8
3.3
4,648.3
-2,399.0
2,249.4
16.3
100.0
-51.6
48.4
0.4
4,135.9
-2,181.5
1,954.3
15.8
-1,928.4
-41.5
-1,725.6
337.4
-24.0
313.4
-83.6
-26.7%
-42.4
187.4
14.947
14.947
12.54
12.54
7.3
-0.5
6.7
-1.8
-0.9
4.0
244.6
-13.4
231.2
-63.3
-27.4%
-32.2
135.8
14.943
14.943
9.09
9.09
12.4
10.0
15.1
3.2
11.8
37.9
79.6
35.5
32.0
31.7
38.0
0.0
0.0
38.0
38.0
operating result (EBIT) within a range of between € 325 million and € 335 million.
In accordance with the previous forecasts, Management expected a significant
improvement in net earnings for the financial year 2018.
PUMA was able to fully achieve the increased forecasts in 2018, and even slightly
exceed them. This means that PUMA exceeded the originally targeted improve-
ment in operating result for 2018.
More details on earnings development are provided below.
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103103
PUMA Annual Report 2018
Gross Profit Margin
Gross profit improved in the financial year 2018 by 15.1% from € 1,954.3 million
to € 2,249.4 million. The gross profit margin increased by 110 basis points from
47.3% to 48.4%, particularly because of improvements in sourcing and higher
sales of new products with a higher margin. In addition, the higher share of own
retail sales and the development of the regional sales mix had a small positive
effect on the gross profit margin. In 2018, there were no exchange rate effects
on the gross profit margin compared with the previous year, as effects during
the year offset each other on a full-year basis.
The gross profit margin in the footwear segment increased from 45.5% in the
previous year to 45.8% in 2018. The apparel gross profit margin improved from
49.0% to 50.9% and the gross profit margin for accessories also increased from
48.5% to 50.3%.
F�12 GROSS PROFIT (in € million) / GROSS PROFIT MARGIN (in %)
2,500 –
2,250 –
2,000 –
1,750 –
1,500 –
1,250 –
1,000 –
– 50%
– 45%
– 40%
2014
2015
2016
2017
2018
Gross profit
Gross profit margin
Other Operating Income and Expenses
In the past financial year, further planned investment was made in marketing
so as to increase PUMA’s brand heat and to position PUMA as the fastest sports
brand in the world. Investments in the modernization of our own retail stores
and in the opening of further retail stores also continued. Furthermore, progress
was made in modernizing our IT infrastructure. This led to an overall increase
in operating income and expenses in the financial year 2018 of 11.8% from
€ 1,725.6 million to € 1,928.4 million. As a percentage of sales, the cost ratio
improved from 41.7% to 41.5%. The decrease in the cost ratio confirms the
consistent focus on the strict control of other operating income and expenses,
which continues to be a high priority for PUMA, and which contributed to the
improvement of the operating result in the financial year 2018.
F�13 OPERATING EXPENSENS (as a % of sales)
45 –
40 –
35 –
2014
2015
2016
2017
2018
Within sales expenses, the expenses for marketing / retail grew by 13.2% from
€ 822.9 million to € 931.2 million. This development is primarily connected to
the consistent implementation of the FOREVER FASTER brand campaign and
the increased number of own retail stores. At 20.0% of sales, the cost ratio
remained almost unchanged compared to the previous year. Other sales expenses,
which mainly include sales-related variable costs and transportation costs, in-
creased by 19.1% to € 592.4 million. This increase is primarily due to higher
sales-related expenses from operating our own retail stores and from the e-com-
merce business. The cost ratio of other sales expenses in 2018 was 12.7% of sales.
Research and Development / Product Management expenses remained almost
stable compared to the previous year at € 97.8 million and the cost ratio fell
slightly to 2.1%. Other operating income in the past financial year amounted to
€ 21.1 million and consisted primarily of income arising from the release of
provisions. Administrative and general expenses increased in 2018 by 6.9% from
€ 307.0 million to € 328.1 million. The slight increase resulted from, amongst
other things, higher expenses in warehousing, logistics and IT. The cost ratio of
administrative and general expenses decreased from 7.4% to 7.1%. Depreciation
/ amortization are included in the relevant costs and total € 81.5 million (previous
year: € 70.3 million). This represents a 15.9% increase in depreciation /
amortization compared to the previous year.
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104104
PUMA Annual Report 2018
Operating result (EBIT)
Operating result increased by 37.9% from € 244.6 million in the previous year
to € 337.4 million in 2018. This result is slightly above the adjusted EBIT forecast
within a range of between € 325 million and € 335 million. The significant
improvement in profitability in 2018 resulted from the strong growth in sales
combined with the improvement in the gross profit margin. The EBIT margin
rose accordingly from 5.9% in the previous year to 7.3%.
F�14 OPERATING INCOME - EBIT (in € million)
400 –
300 –
200 –
100 –
0 –
– 15%
– 10%
– 5%
– 0%
2014
2015
2016
2017
2018
Operating income
as a % of sales
Financial Result
The financial result decreased in 2018 from € -13.4 million in the previous year to
€ -24.0 million. This development was primarily due to the increase in expenses
from currency conversion differences from € 6.9 million in the previous year to
€ 14.4 million in 2018.
Financial income improved slightly from € 10.3 million in the previous year to
€ 11.6 million in 2018. Financial income includes interest income of € 4.0 million
(previous year: € 4.1 million) and income from interest components related to
currency hedging contracts of € 7.6 million (previous year: € 6.3 million).
In contrast, however, there was a slight increase in interest expenses from
€ 14.3 million to € 15.1 million. The remaining financial expenses arising from
the valuation of pension plans and from interest components related to currency
hedging contracts amounted to € 4.5 million in 2018 (previous year: € 4.2 million).
The result from associated companies, which is included in the financial result,
was € -1.5 million in the financial year 2018 (previous year: € 1.6 million).
Earnings before taxes (EBT)
In the financial year 2018, PUMA generated earnings before taxes of € 313.4 million,
an improvement of 35.5% from the previous year (€ 231.2 million). Tax expenses
were € 83.6 million compared to € 63.3 million in the previous year, and the tax
ratio decreased slightly from 27.4% to 26.7% in 2018.
Net Earnings Attributable to Non-controlling Interests
Net earnings attributable to non-controlling interests relate to companies in
the North American market, in each of which the same shareholder holds a
minority stake. The earnings attributable to this shareholder increased in the
financial year 2018 by 31.7% to € 42.4 million (previous year: € 32.2 million).
These companies concern Janed, which distributes socks and bodywear, PUMA
Accessories North America and PUMA Kids Apparel that focuses on selling
clothing for children, and their respective subsidiaries in Canada.
Net Earnings
Net earnings increased in the financial year 2018 by 38.0% from € 135.8 million
to € 187.4 million. The significant improvement in net earnings mainly resulted
from the strong growth in sales combined with the improvement in the gross
profit margin. While the financial result decreased in 2018, the slight decline in
the tax rate had a positive effect on net earnings. Earnings per share and diluted
earnings per share increased accordingly by 38.0% to € 12.54 compared to
€ 9.09 in the previous year.
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105105
PUMA Annual Report 2018
DIVIDENDS
The Management Board and the Supervisory Board will propose to the Annual
General Meeting on April 18, 2019, to distribute a regular dividend of € 3.50 per
share for the financial year 2018 from PUMA SE’s retained earnings under
commercial law. As a percentage of net earnings, the payout ratio amounts to
27.9%. This is in accordance with the current dividend policy of PUMA SE, which
foresees a payout ratio of 25% to 35% of net earnings. The dividends will be
distributed in the days following the Annual General Meeting at which the
resolution on the distribution is adopted. In the previous year, a one-time special
dividend of € 12.50 was distributed.
F�15 E ARNINGS / DIVIDEND PER SHARE (in €)
15.00 –
12.50 –
10.00 –
7.50 –
5.00 –
2.50 –
0.00 –
– 15.00
– 12.50
– 10.00
– 7.50
– 5.00
– 2.50
– 0.00
2014
2015
2016
2017*
2018
Earning per share
one-time special dividend
*
Dividend per share
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106106
PUMA Annual Report 2018
NET ASSETS AND FINANCIAL POSITION
T�2 BALANCE SHEET
Cash and cash equivalents
Inventories
Trade receivables
Other current assets (working capital)
Other current assets
Current assets
Deferred taxes
Other non-current assets
Non-current assets
Total assets
Current financial liabilities
Trade liabilities
Other current liabilities (working capital)
Other current liabilities
Current liabilities
Deferred taxes
Pension provisions
Other non-current liabilities
Non-current liabilities
Shareholders’ equity
Total liabilities and shareholders’ equity
Working capital
- in % of consolidated sales
12 / 31 / 2018
12 / 31 / 2017
€ million
%
€ million
463.7
915.1
553.7
187.7
72.6
2,192.8
207.6
806.8
1,014.4
3,207.2
20.5
705.3
447.3
22.1
1,195.2
47.7
28.9
213.1
289.7
1,722.2
3,207.2
503.9
10.8%
14.5
28.5
17.3
5.9
2.3
68.4
6.5
25.2
31.6
415.0
778.5
503.7
164.0
23.6
1,884.8
207.9
761.1
969.0
%
14.5
27.3
17.7
5.7
0.8
66.0
7.3
26.7
34.0
100.0
2,853.8
100.0
1.0
22.6
10.7
2.6
37.0
1.3
1.0
2.6
4.9
58.1
100.0
0.6
22.0
13.9
0.7
37.3
1.5
0.9
6.6
9.0
53.7
100.0
29.0
646.1
306.1
75.2
1,056.5
37.6
29.7
73.3
140.7
1,656.7
2,853.8
493.9
11.9%
+ / –%
11.7
17.5
9.9
14.5
207.2
16.3
-0.2
6.0
4.7
12.4
-29.2
9.2
46.1
-70.6
13.1
27.0
-2.9
190.6
106.0
4.0
12.4
2.0
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107107
PUMA Annual Report 2018
Equity Ratio
PUMA continues to have an extremely solid capital base. As of December 31,
2018, total assets increased by 12.4% from € 2,853.8 million in the previous year
to € 3,207.2 million. As the shareholders’ equity increased by 4.0% from
€ 1,656.7 million to € 1,722.2 million, there was a mathematical decline in the
equity ratio from 58.1% in the previous year to 53.7%, due in particular to the
distribution of the special dividend.
F�16 TOTAL ASSETS (in € million) / EQUITY RATIO (in %)
4,000 –
3,500 –
3,000 –
2,500 –
2,000 –
1,500 –
1,000 –
– 70%
– 65%
– 60%
– 55%
– 50%
– 45%
– 40%
2014
2015
2016
2017
2018
Total assets
Equity ratio
Working Capital
Despite the significant increase in sales and the increased number of our own
retail stores, working capital rose only slightly in the past financial year by 2.0%
from € 493.9 million to € 503.9 million.
Inventories increased by 17.5% from € 778.5 million to € 915.1 million. This
increase is related to the planned sales growth from the 2019 spring / summer
collection. In addition, the change in the presentation of expected returns in the
balance sheet due to IFRS 15 led to an extension of the balance sheet total and
an increase in inventories and other current liabilities. Trade receivables
increased by 9.9% from € 503.7 million to € 553.7 million. Other current assets
included in working capital increased by 14.5% from € 164.0 million to
€ 187.7 million.
On the liabilities side, trade liabilities increased by 9.2% from € 646.1 million to
€ 705.3 million. Other current liabilities included in working capital increased
significantly due to the balance sheet extension (IFRS 15) by 46.1% from
€ 306.1 million to € 447.3 million.
F�17 WORKING CAPITAL (in € million)
800 –
700 –
600 –
500 –
400 –
300 –
200 –
100 –
0 –
– 25%
– 20%
– 15%
– 10%
– 5%
– 0%
2014
2015
2016
2017
2018
Working Capital
as a % of sales
Other Assets and Other Liabilities
Other current assets, which include the positive market value of derivative
financial instruments, increased compared to the previous year from
€ 23.6 million to € 72.6 million.
Other non-current assets, which mainly comprises intangible assets and
property, plant and equipment, rose as a consequence of the investments in
non-current assets by 6.0% from € 761.1 million to € 806.8 million.
Other current liabilities, which include the negative market value of derivative
financial instruments, decreased compared to the previous year from
€ 75.2 million to € 22.1 million.
Pension provisions remained almost stable compared to the previous year at
€ 28.9 million (previous year: € 29.7 million).
Other non-current liabilities increased from € 73.3 million in the previous year
to € 213.1 million, mainly due to the issue of promissory note loans totaling
€ 160.0 million.
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108108
PUMA Annual Report 2018
CASH FLOW
T�3 CASH FLOW STATEMENT
Earnings before tax (EBT)
Financial result and non-cash effected expenses and income
Gross cashflow
Change in current assets, net
Tax payments and dividends received
Net cash from operating activities
Payments for acquisitions / proceeds from the sale of shareholdings
Payment for investing in fixed assets
Other investing activities
Net cash used in investing activities
Free cashflow
Free cashflow (before acquisitions)
- in % of consolidated sales
Net cash used in financing activities
Effect on exchange rates on cash
Change in cash and cash equivalents
Cash and cash equivalents at beginning of the financial year
Cash and cash equivalents at year-end
* Prior-year figures adjusted, see notes to the consolidated financial statements chapter 27 (notes to the cash flow statement)
2018
2017*
€ million
€ million
+ / –%
313.4
84.7
398.0
-38.0
-81.9
278.1
23.5
-130.2
1.4
231.2
99.7
330.9
-50.6
-41.5
238.8
0.0
-122.9
12.7
-105.3
-110.3
172.9
149.4
3.2%
-128.3
4.2
48.7
415.0
463.7
128.5
128.5
3.1%
-34.9
-5.3
88.3
326.7
415.0
35.5
-15.1
20.3
-25.0
97.2
16.5
-
5.9
-88.6
-4.5
34.5
16.3
-
-
-
-44.8
27.0
11.7
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109109
PUMA Annual Report 2018
The increase in earnings before taxes (EBT) in the financial year 2018 led to
an increase in gross cash flow by 20.3% from € 330.9 million to € 398.0 million.
The financial result and the non-cash effected expenses and income, which
include in particular the depreciation on property, plant and equipment, were
€ 84.7 million in 2018.
F�18 GROSS CASHFLOW (in € million)
400 –
300 –
200 –
100 –
0 –
2014
2015
2016
2017
2018
The continuing strong focus on working capital management significantly
contributed to the improvement of the cash flow from operating activities. Net
cash from operating activities increased from € 238.8 million in the previous
year to € 278.1 million. This resulted from the decline in net current assets* in
addition to the increased earnings before tax in 2018. By contrast, the cash
outflow from tax payments and dividends received increased to € 81.9 million.
Cash outflow from investing activities in the year under review fell slightly
from € 110.3 million to € 105.3 million. The investment in non-current assets
included in this figure rose in 2018 from € 122.9 million in the previous year to
€ 130.2 million and represented primarily investments in own retail stores, IT
infrastructure, distribution centers and the completion of the new administration
building in Herzogenaurach. The other cash inflows of € 24.9 million (previous
year: € 12.7 million) relate in particular to cash inflows from the sale of share-
holdings and cash inflows from asset disposals.
* Net working capital includes normal working capital line items plus current assets
and liabilities which are not normally part of the working capital calculation.
The free cash flow before acquisitions is the balance of the cash inflows and
outflows from operating and investing activities. In addition, an adjustment is
made for cash inflows and outflows that relate to shareholdings. The increase
of earnings before tax in 2018 was the main driver for the improvement of free
cash flow before acquisitions by 16.3% from € 128.5 million to € 149.4 million.
As a percentage of sales, the free cash flow before acquisitions was 3.2%
compared to 3.1% in the previous year.
F�19 FREE CASHFLOW (before acquisitions) (in € million)
200 –
150 –
100 –
50 –
0 –
-50 –
-100 –
2014
2015
2016
2017
2018
Cash flow from financing activities for the financial year 2018 was attributable
to the payment of a one-time dividend of € 186.8 million to shareholders of
PUMA SE and dividend payments of € 55.7 million to non-controlling interests.
On the other hand, net cash inflows from taking up financial liabilities amounted
to € 126.8 million. Taking into account interest payments, the cash outflow from
financing activities amounted to € 128.3 million (previous year: cash outflow of
€ 34.9 million).
As of December 31, 2018, PUMA had cash and cash equivalents of € 463.7 million,
an increase in cash and cash equivalents of 11.7% compared to the previous year
(€ 415.0 million). The PUMA Group also had credit facilities totaling € 691.9 million
as of December 31, 2018 (previous year: € 497.1 million). Unutilized credit lines
totaled € 501.0 million on the reporting date, compared to € 440.2 million in the
previous year.
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110110
PUMA Annual Report 2018
With regard to the consolidated balance sheet, we believe that PUMA
continues to have an extremely solid capital base. At the balance sheet date,
the equity of the PUMA Group was more than € 1.7 billion and the share-
holders’ equity ratio was just under 54%. Furthermore, the consistent focus
on working capital management contributed to the fact that working capital
increased by only 2% compared to the previous year despite the significant
increase in sales.
The increase in earnings before taxes (EBT) and the continued strong focus on
the working capital management in the past financial year also contributed to a
significant improvement in cash flow. The free cash flow before acquisitions
compared to the same period last year increased by 16.3% to € 149.4 million.
Cash and cash equivalents amounted to € 463.7 million on the balance sheet
date (previous year: € 415.0 million).
As a result, the PUMA group is characterized by an overall solid asset, financial
and income situation at the time the combined management report was
prepared. This enables the Management Board and the Supervisory Board to
propose a dividend of € 3.50 per share for the financial year 2018 to the Annual
General Meeting on April 18, 2019. In accordance with the dividend policy, this
corresponds to a payout ratio of 27.9% of the net earnings.
STATEMENT REGARDING THE BUSINESS DEVELOPMENT
AND THE OVERALL SITUATION OF THE GROUP
Overall, the management is very satisfied with the course of business and the
economic development in the past financial year. In 2018, PUMA was able to fully
meet or even slightly exceed its financial targets, which had already been raised
during the year. We owe this in particular to our ability to react quickly and flexibly
to changes in our dynamic business environment. For example, volatile exchange
rates, the strength of the Euro against a large number of major currencies, and
the trade conflict between China and the United States of America led to
uncertainties in the trading environment. In addition, major changes in product
trends and consumer demand, particularly in footwear, have necessitated a quick
response to these changes. We are of the opinion that PUMA managed these
challenges very well in the past financial year thanks to our “fast attitude”. The
success of our measures is also reflected in the business results of the past year.
We see this as further confirmation that we are on the right track with the
consistent implementation of the FOREVER FASTER corporate strategy.
PUMA was again able to record strong sales growth in the past financial year
with a currency-adjusted increase in sales of 17.6%. This meant that sales of our
products in our own retail stores and at our wholesale customers continued to
improve. In our opinion, this is primarily due to the increase in our brand heat
and the competitiveness of our product range. In 2018, we were also once again
able to make significant improvements in terms of profitability, with the
operating result (EBIT), net earnings and earnings per share increasing by
around 38% compared to the previous year. In addition to the strong sales
growth, this is primarily due to the improvement in the gross profit margin and
also to the decrease in cost ratio of other operating expenses. At € 337.4 million,
the operating result in the past financial year was even slightly above our
forecast of € 325 million to € 335 million, which had been raised during the year.
Earnings per share rose significantly compared to the previous year from € 9.09
to € 12.54. We thus fully achieved our profitability targets in the past financial
year and even slightly exceeded them.
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111111
PUMA Annual Report 2018
COMMENTS ON THE
GERMAN GAAP FINANCIAL
STATEMENTS OF PUMA SE
PUMA SE’s financial statements have been prepared pursuant to the rules of
the German Handelsgesetzbuch (HGB - German Commercial Code).
PUMA SE is the parent company of the PUMA Group. PUMA SE’s results are
significantly influenced by the directly and indirectly held subsidiaries and
shareholdings. The business development of PUMA SE is essentially subject to
the same risks and opportunities as the PUMA Group.
PUMA SE is responsible for the wholesale business in the DACH region, consisting
of the home market of Germany, Austria and Switzerland. Furthermore, PUMA SE
is also responsible for the pan-European distribution for individual key accounts
and sourcing products from European production countries as well as global
licensing management. In addition, PUMA SE acts as a holding company within
the PUMA Group and is as such responsible for international product development
and merchandising, international marketing, and the global areas of finance,
operations as well as PUMA’s strategic direction.
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112112
PUMA Annual Report 2018
RESULTS OF OPERATIONS
T�4 PROFIT AND LOSS STATEMENT (GERMAN GAAP, HGB)
Sales
Other operating income
Material expenses
Personnel expenses
Depreciation
Other operating expenses
Total expenses
Financial result
Income before taxes
Income tax
Net income
Sales rose in the financial year 2018 by 7.3% to € 675.3 million. The increase
resulted from both increased product sales and commission income from
license management and higher other sales. Revenue from PUMA SE product
sales increased by 8.9% to € 329.5 million. The licensing and commission income
included in sales increased by 4.6% to € 303.0 million. The other revenue, which
mainly consisted of recharges of costs to affiliated companies, rose by 16.2% to
€ 42.8 million.
Other operating income amounted to € 50.8 million in 2018 (previous year:
€ 60.7 million) and includes in particular realized and unrealized gains from
currency conversion related to the measurement of receivables and payables
in foreign currencies.
The total expenditure from material expenses, personnel expenses, deprecia-
tions / amortizations and other operating expenses increased only slightly
compared to the previous year by 0.9% to € 838.8 million (previous year:
€ 831.0 million). The increase in material expenses was associated with the in-
crease in sales. Depreciation / amortization increased primarily due to invest-
ments in the new administration building in Herzogenaurach, and continued
investments in IT. Other operating expenses fell compared to the previous year,
2018
2017
€ million
%
€ million
675.3
50.8
-224.9
-101.7
-20.1
-492.1
100.0
7.5
-33.3
-15.1
-3.0
-72.9
-838.8
-124.2
212.9
100.1
-16.8
83.3
31.5
14.8
-2.5
12.3
629.2
60.7
-201.9
-105.5
-15.8
-507.8
-831.0
279.1
137.9
-9.3
128.7
%
100.0
9.6
-32.1
-16.8
-2.5
-80.7
-132.1
44.4
21.9
-1.5
20.4
+ / –%
7.3
-16.4
11.4
-3.6
26.7
-3.1
0.9
-23.7
-27.4
81.2
-35.3
which is mainly attributable to the reduction in losses from currency conversion.
In addition, the transfer of individual sponsoring contracts to affiliated compa-
nies contributed to the decline in other expenses.
The financial result decreased compared to the previous year by 23.7% to
€ 212.9 million. The decline was due in particular to lower dividends from affil-
iated companies. This was offset by higher income from the transfer of profits
from affiliated companies. As in the previous year, there were no write-downs
on financial assets in 2018.
Income before taxes decreased in 2018 by 27.4% from € 137.9 million to
€ 100.1 million. Taxes on income amounted to € 16.8 million (previous year:
€ 9.3 million) and were mainly composed of expenses for withholding taxes for
the current year totaling € 9.3 million and income tax for the current year totaling
€ 1.0 million and totaling € 6.5 million for previous years. Net income amounted
to € 83.3 million compared to € 128.7 million in the previous year.
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PUMA Annual Report 2018
NET ASSETS
T�5 BALANCE SHEET (GERMAN GAAP, HGB)
Total non-current assets
Inventories
Receivables and other current assets
Cash and cash equivalents
Total current assets
Others
Total Assets
Equity
Accruals / provisions
Liabilities
Others
12 / 31 / 2018
12 / 31 / 2017
€ million
%
€ million
657.9
52.9
576.4
59.5
688.8
14.0
48.4
3.9
42.4
4.4
50.6
1.0
559.8
57.9
524.6
119.4
701.9
10.5
%
44.0
4.6
41.2
9.4
55.2
0.8
1,360.6
100.0
1,272.2
100.0
564.3
101.5
694.5
0.3
41.5
7.5
51.0
0.0
665.7
102.8
502.1
1.6
52.3
8.1
39.5
0.1
Total Liabilities & Shareholders’ Equity
1,360.6
100.0
1,272.2
100.0
+ / –%
17.5
-8.8
9.9
-50.2
-1.9
32.6
6,9
-15.2
-1.3
38.3
-
6,9
Non-current assets increased in 2018 by 17.5% to € 657.9 million. The increase
is mainly due to capital increases at subsidiaries of PUMA SE, which led to an
increase in shareholdings. Investments in the new administrative building in
Herzogenaurach and in IT also contributed to the increase.
Within current assets, inventories decreased by 8.8% to € 52.9 million. By
contrast, trade receivables and receivables from affiliated companies rose
compared to the previous year by 9.9% to € 576.4 million. This development is
due to the increase in sales and financing requirements of affiliated companies
at the reporting date. Cash and cash equivalents decreased compared to the
previous year by 50.2% to € 59.5 million.
On the liability side, equity decreased, in spite of the net income for 2018, by
15.2% to € 564.3 million. This was due to the distribution of the € 186.8 million
one-time special dividend for the financial year 2017 in 2018. This led to a
decrease in the equity ratio at the balance sheet date from 52.3% to 41.5%.
Provisions remained virtually unchanged from the previous year. The increase
in liabilities by 38.3% to € 694.5 million resulted mainly from the issuance of
promissory note loans of € 160.0 million in 2018.
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PUMA Annual Report 2018
FINANCIAL POSITION
T�6 CASH FLOW STATEMENT (GERMAN GAAP, HGB)
Cash flow from operating activities
Cash flow from investing activities
Free Cash Flow
Cash flow from financing activities
Change in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at year-end
Cash flow from operating activities decreased compared to the previous year
to € -12.9 million. This is primarily due to an increase in working capital at the
balance sheet date, due to higher receivables from affiliated companies. Cash
outflow from investing activities rose from € -68.3 million to € -72.7 million
due to the increased investment in non-current assets. This led to a decline in
free cash flow from € -70.5 million in the previous year to € -85.6 million in 2018.
Cash flow from financing activities showed a cash inflow of € 25.7 million in
2018 (previous year: € 116.8 million). In 2018, this was primarily caused by the
distribution of the special dividend for the year 2017 in 2018. On the other hand,
PUMA SE issued promissory note loans. This led to an overall reduction in cash
and cash equivalents from € 119.4 million to € 59.5 million. In addition, PUMA SE
has access to a syndicated credit line of € 350.0 million, which was not utilized
as of the balance sheet date. This facility is used for general corporate financing,
such as the financing of short-term, seasonal requirements from the purchase
of goods.
2018
2017
€ million
€ million
+ / –%
-12.9
-72.7
-85.6
25.7
-59.9
119.4
59.5
-2.2
-68.3
-70.5
116.8
46.3
73.1
119.4
>100
6.4
21.4
-78.0
>-100
63.3
-50.2
OUTLOOK
In line with the Group forecast, PUMA SE expects an increase in sales of around
10% and a moderate increase in earnings before taxes for the financial year 2019.
RELATIONSHIPS WITH AFFILIATED COMPANIES
At the end of the dependent company report of the Management Board for the
financial year 2018, the following statement was given: “Under the circumstances
which were known to the Management Board at the time when the transactions
listed in the report on relationships with affiliated companies were made,
PUMA SE received an appropriate consideration in all cases. There were no
reportable measures taken or not taken in the reporting period”.
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PUMA Annual Report 2018
FURTHER INFORMATION
INFORMATION CONCERNING TAKEOVERS
The following information, valid December 31, 2018, is presented in accordance
with Art. 9 p. 1 c) (ii) of the SE Regulation in conjunction with Sections 289a, 315a
German Commercial Code (HGB). Details under Sections 289a, 315a HGB which
do not apply at PUMA SE are not mentioned.
Composition of the subscribed capital
(Sections 289a [1][1][1], 315a [1][1][3] HGB)
On the balance sheet date, subscribed capital totaled € 38,611,107.84 and was
divided into 15,082,464 no-par-value shares with a proportional amount in the
statutory capital of € 2.56 per share. As of the balance sheet date, the Company
held 130,994 treasury shares.
Shareholdings exceeding 10% of the voting rights
(Sections 289a [1][1][3], 315a [1][1][3] HGB)
As of December 31, 2018, there was one shareholding in PUMA SE that exceeded
10% of the voting rights. It was held by the Pinault family via several companies
controlled by them (ranked by size of stake held by the Pinault family: Financière
Pinault S.C.A., Artémis S.A. and Kering S.A.). The shareholding of Kering S.A.
in PUMA SE amounted to 15.7% of the share capital according to Kering’s press
release from May 16, 2018. The shareholding of Artémis S.A. and Kering S.A.
amounts to 44.22% of the share capital according to their voting rights notifica-
tion as of May 24, 2018.
Statutory provisions and regulations of the Articles of Association on the
appointment and dismissal of the members of the Management Board and
on amendments to the Articles of Association (Sections 289a [1][1][6],
315a [1][1][6] HGB)
Regarding the appointment and dismissal of the members of the Management
Board, reference is made to the applicable statutory requirements of § 84
German Stock Corporation Act (AktG). Moreover, Section 7[1] of PUMA SE’s
Articles of Association stipulates that Management Board shall consist of two
members in the minimum; the Supervisory Board determines the number of
members in the Management Board. The Supervisory Board may appoint deputy
members of the Management Board and appoint a member of the Management
Board as chairperson of the Management Board. Members of the Management
Board may be dismissed only for good cause, within the meaning of Section 84[3]
of the German Stock Corporation Act (AktG) or if the employment agreement is
terminated, in which case a resolution must be adopted by the Supervisory
Board with a simple majority of the votes cast.
Amendments to the Articles of Association of the Company require a resolution
by the Annual General Meeting. Resolutions of the Annual General Meeting
require a majority according to Art. 59 SE Regulation and Sections 133[1], 179
[2] [1] German Stock Corporation Act (AktG) (i.e. a simple majority of votes and
a majority of at least three quarters of the share capital represented at the time
the resolution is adopted). The Company has not made use of Section 51 SEAG.
Authority of the Management Board to issue or repurchase shares
(Sections 289a [1][1][7], 315a [1][1][7] HGB)
The authority of the Management Board to issue shares result from Section 4
of the Articles of Association and from the statutory provisions:
Authorized Capital
The Management Board shall be authorized with the approval of the Supervisory
Board to increase the share capital of the Company by up to EUR 15,000,000.00
by issuing, once or several times, new no par-value bearer shares against
contributions in cash and / or kind until 11 April 2022 (Authorized Capital 2017).
In case of capital increases against contributions in cash, the new shares may
be acquired by one or several banks, designated by the Management Board,
subject to the obligation to offer them to the shareholders for subscription
(indirect pre-emption right).
The shareholders shall generally be entitled to pre-emption rights. However,
the Management Board shall be authorized with the approval of the Supervisory
Board to partially or completely exclude pre-emption rights
•
to avoid peak amounts;
•
in case of capital increases against contributions in cash if the pro-rated
amount of the share capital attributable to the new shares for which
pre-emption rights have been excluded does not exceed 10% of the share
capital and the issue price of the newly created shares is not significantly
lower than the relevant exchange price for already listed shares of the same
class, Section 186 (3) sentence 4 AktG. The 10% limit of the share capital
shall apply at the time of the resolution on this authorization by the Annual
General Meeting as well as at the time of exercise of the authorization. Shares
of the Company (i) which are issued or sold during the term of the Authorized
Capital 2017 excluding shareholders’ pre-emption rights directly or respec-
tively applying Section 186 (3) sentence 4 AktG or (ii) which are or can be issued
to service option and convertible bonds applying Section 186 (3) sentence
4 AktG while excluding shareholders’ pre-emption rights during the term of
the Authorized Capital 2017, shall be counted towards said limit of 10%.;
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PUMA Annual Report 2018
•
•
in case of capital increases against contributions in cash insofar as it is
required to grant pre-emption rights regarding the Company’s shares to
holders of option or convertible bonds which have been or will be issued by
the Company or its direct or indirect subsidiaries to such an extent to which
they would be entitled after exercising option or conversion rights or fulfilling
the conversion obligation as a shareholder;
in case of capital increases against contributions in kind for carrying out
mergers or for the (also indirect) acquisition of companies, participation in
companies or parts of companies or other assets including intellectual
property rights and receivables against the Company or any companies
controlled by it in the sense of Section 17 AktG.
The total amount of shares issued or to be issued based upon this authorization
while excluding shareholders’ pre-emption rights may neither exceed 20% of
the share capital at the time of the authorization becoming effective nor at the
time of exercising the authorization; this limit must include all shares which
have been disposed of or issued or are to be issued during the term of this
authorization based on other authorizations while excluding pre-emption rights
or which are to be issued because of an issue of option or convertible bonds
during the term of this authorization while excluding pre-emption rights. The
Management Board shall be entitled with the approval of the Supervisory Board
to determine the remaining terms of the rights associated with the new shares
as well as the conditions of the issuance of shares.
The Management Board of PUMA SE did not make use of the existing Authorized
Capital in the current reporting period.
Conditional Capital
The Annual General Meeting of 12 April 2018 has authorized the Management
Board until 11 April 2023 with the approval of the Supervisory Board to issue
once or several times, in whole or in part, and at the same time in different
tranches bearer and / or registered convertible bonds and / or bonds with
warrants, and participation rights and / or participating bonds or combinations
thereof with or without maturity restrictions in the total nominal amount of up
to EUR 1,000,000,000.00 (Conditional Capital 2018).
The share capital is conditionally increased by up to EUR 7,722,219.52 by issue
of up to 3,016,492 new no-par bearer shares. The conditional capital increase
shall only be implemented to the extent that option / conversion rights are
exercised or the option / conversion obligations are performed or tenders are
carried out and to the extent that other forms of performance are not applied.
No use has been made of this authorization to date.
Authorization to purchase treasury shares
The resolution adopted by the Annual General Meeting on May 6, 2015 authorized
the company to purchase treasury shares up to a value of 10% of the share
capital until May 5, 2020.
Significant agreements of the Company which are subject to a change of
control as a result of a takeover bid and the resulting effects
(Section 289a [1][1][8], 315a [1][1][8] HGB)
Material financing agreements of PUMA SE with its creditors contain the
standard change-of-control clauses. In the case of change of control the cred-
itor is entitled to termination and early calling-in of any outstanding amounts.
For more details, please refer to the relevant disclosures in the Notes to the
Consolidated Financial Statements (chapter 18).
COMPENSATION REPORT
Management Board (Managing Directors until July 9, 2018)
Compensation for the Management Board (Managing Directors of the monistic
PUMA SE until July 9, 2018), which is set by the Supervisory Board (Administrative
Board of the monistic PUMA SE until July 9, 2018), consists of non- performance-
based and performance-based components. The non-performance-based
components consist of a fixed salary and non-cash compensation, whereas the
performance-based components consist of bonuses and components with a
long-term incentive effect. Along with job assignments and performance of each
individual Management Board member, the criteria for calculating the total
remuneration are the economic situation, long-term strategic planning and
related targets, the long-term durability of targeted results and the company’s
long-term prospects.
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PUMA Annual Report 2018
A fixed salary is paid out monthly as non-performance-based basic compensa-
tion. In addition, the Management Board members receive non-cash compen-
sation, such as company cars, pension contributions and insurance premiums.
In principle, these benefits are granted to all Management Board members in
an equal manner and are included in the non-performance-based compensa-
tion. The fixed compensation for the three Management Board members
amounted to € 2.3 million in the financial year (previous year: € 2.1 million).
Non-cash compensation totaled € 0.1 million (previous year: € 0.1 million).
The bonus component of performance-related compensation is mainly based
on the PUMA Group’s operating result (EBIT) and free cash flow and is staggered
according to the degree to which targets are met. In addition, qualitative indi-
vidual goals are set. An upper limit is also agreed. In the financial year, variable
bonuses came to € 2.7 million (previous year: € 3.9 million).
Pro-rata provisions totaling € 5.8 million (previous year: € 8.4 million) were
set up for the existing compensation program (virtual shares / monetary units)
with long-term incentives (from the years 2016 to 2018) for Management Board
members in financial year 2018 according to the vesting periods. The perfor-
mance-based program is based on the medium-term performance of the
PUMA SE share. The shares from the 2016 and 2017 programs that were based
on the medium-term performance of the Kering SA share were valued as of
the reporting date of 12 / 31 / 2017 and converted into virtual shares / monetary
units of PUMA SE. Further information on this program can be found in chapter
19 of the Notes to the Consolidated Financial Statements.
For the financial year 2019, a new modern compensation program with a long-
term incentive for Management Board members will be introduced, which is to
be decided on by the Supervisory Board in early 2019.
Management Board members have pension commitments as part of deferred
compensation, which are paid from the aforementioned performance-based
and / or non-performance-based remuneration for which the company has
taken out reinsurance for pension commitments. The proportion of the pension
capital that is already financed through contributions to the pension liability in-
surance is deemed to be vested. During the financial year, PUMA allocated
€ 0.5 million for Management Board members (previous year: € 0.4 million).
The present value of the pension benefits granted to active Management Board
members in the amount of € 10.1 million as of December 31, 2018 (previous year:
€ 4.5 million) was offset against the pledged asset value of the pension liability
insurance policy, which was of an equal amount.
There were pension obligations to former members of the Management Board
and their widows / widowers amounting to € 3.2 million (previous year: € 3.3 million)
as well as contribution-based pension commitments in connection with deferred
compensation of former members of the Management Board and Managing
Directors amounting to € 10.6 million (previous year: € 10.3 million). Both items
are accordingly recognized as liabilities under pension provisions, unless they
are offset against asset values of an equal amount. Pension obligations to former
members of the Management Board and their widows / widowers amounted to
€ 0.2 million (previous year: € 0.2 million).
Supervisory Board (Administrative Board until July 9, 2018)
In accordance with the Articles of Association, the Super visor y Board
(Administrative Board of the monistic PUMA SE until July 9, 2018) has at least
three members; it currently consists of six members. The compensation of
the Supervisory Board is comprised of a fixed and a performance-based compo-
nent. The total fixed compensation amounted to € 0.2 million (previous year:
€ 0.3 million).
In conformity with § 15 of the Articles of Association, each Supervisory Board
member receives a fixed annual compensation of € 25,000.00, which is payable
at the end of the Annual General Meeting for the respective financial year. The
fixed compensation is increased by an additional fixed annual amount of
€ 25,000.00 for the Chairman of the Supervisory Board, € 12,500.00 for the Vice
Chairman of the Supervisory Board, € 10,000.00 for the Chairman of a committee
and € 5,000.00 for each member of a committee. The definitive committees here
are the Personnel Committee, the Audit Committee and the Sustainability
Committee.
In addition to the fixed compensation, each Supervisory Board member receives
annual performance-based compensation equal to € 20.00 for each € 0.01 by
which the earnings per share figure as disclosed in the consolidated financial
statements exceeds a minimum amount of € 16.00 per share. The perfor-
mance-based compensation amounts to a maximum of € 10,000.00 per year.
The Chairman of the Supervisory Board receives € 40.00 for every € 0.01 in profit
per share and a maximum of € 20,000.00 per year, and the Deputy Chairman
receives € 30.00 for ever y € 0.01 in profit per share and a maximum of
€ 15,000.00 per year. As earnings per share in the financial year are below the
minimum amount, no performance-related remuneration is payable.
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A member of the Supervisory Board who is only active for part of a financial year
receives pro rata remuneration calculated on the basis of the period of activity
determined for full months.
CORPORATE GOVERNANCE REPORT INCLUDING THE
STATEMENT ON CORPORATE GOVERNANCE IN
ACCORDANCE WITH § 289F AND § 315D HGB
Effective implementation of the principles of corporate governance is an important
aspect of PUMA’s corporate policy. Transparent and responsible corporate
governance is a key prerequisite for achieving corporate targets and for increasing
the Company’s value in a sustainable manner. The Management Board and the
Supervisory Board work closely with each other in the interests of the entire Com-
pany to ensure that the Company is managed and monitored in an efficient way
that will ensure sustainable added value through good corporate governance. In
the following the Management Board and the Supervisory Board report on the
corporate governance at PUMA SE in accordance with Section 3.10 of the German
Corporate Governance Code. This section also includes the Statement of Compli-
ance in accordance with Art. 9(1)c(ii) of the SE Regulation (SE-VO) in conjunction
with Section 289f and Section 315d HGB.
PUMA SE has the legal form of a European company (Societas Europaea, or SE).
Being an SE headquartered in Germany, PUMA SE is subject to European and
German law for SEs while remaining subject to German stock corporation law.
As a company listed in Germany, PUMA SE adheres to the German Corporate
Governance Code (DCGK).
Until July 9, 2018, PUMA SE had a monistic management system with an
Administrative Board as the uniform management and control body. The man-
aging directors managed the company’s day-to-day business. After the former
majority shareholder of the company, Kering S.A., had announced that it would
distribute a portion of its PUMA shares, corresponding to approximately 70% of
the share capital of PUMA SE, to the shareholders of Kering S.A. by means of a
dividend in kind, the Annual General Meeting of PUMA SE on April 12, 2018 decided
to replace the previous monistic management system with the dualistic
management system consisting of the Management Board as the management
body and the Supervisory Board as the supervisory body. The corresponding
amendment to the Articles of Association took effect on July 9, 2018.
Statement of Compliance pursuant to Section 161 AktG for 2018:
In their Statement of Compliance the Management Board and the Supervisory
Board of PUMA SE declare at least once a year whether the DCGK has been and
is being observed. On November 9, 2018, the Management Board and the
Supervisory Board declared that PUMA SE has complied and will comply with
the recommendations of the DCGK (version dated February 7, 2017) since the
last Statement of Compliance dated November 9, 2017, with the following excep-
tions and, if not, why not.
Exceptions to the Code’s recommendations
•
In derogation of No. 3.8 p. 3 of the Code, members of the Supervisory Board
are provided with D&O insurance with no deductible. The Supervisory Board
feels that it can dispense with a deductible for members of the Supervisory
Board, because the D&O insurance is group insurance for people in Germany
and abroad, and a deductible is fairly unusual abroad.
• According to No. 4.2.3 p. 2 s. 4 of the Code both positive and negative
developments shall be taken into account when determining variable
remuneration components. As regards negative developments this
recommendation is deviated from, since the structure of the PUMA Monetary
Unit Plan may not fully comply with the purpose of the recommendation, but
it comes fairly close.
•
•
In derogation of No. 4.2.3 p. 2 s. 6 of the Code the compensation of the
members of the Management Board does not show the maximum amount
limits in total or their variable compensation components. This is due to the
fact that neither the existing PUMA Monetary Units Plans 2016 / 2017 / 2018
nor the PUMA Board Member Bonus Plan nor the discretionary extra bonus
clause provide for a maximum amount.
In derogation of No. 4.2.3 p. 2 s. 8 of the Code subsequent amendments to
the performance targets or comparison parameters are not excluded. This
provides the possibility to the Supervisory Board to react to extraordinary
effects using its equitable discretion.
• According to No. 4.2.3 p. 3 of the Code the target level of pension benefits for
every pension commitment shall be established by the Supervisory Board.
Due to the defined contribution plans, PUMA does not comply with this
recommendation.
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•
•
•
•
In derogation of No. 4.2.3 p. 5 of the Code no limits on severance payments for
premature termination as a managing director due to a change of control have
been agreed until June 5, 2018. As part of the change of the governance
structure from a monistic SE to a dualistic SE and the conclusion of new
service agreements with the members of the Management Board, a limit has
been included into the agreements. Insofar the Code recommendation has
been fully met since the conclusion of the agreements on June 6, 2018.
In accordance with the authorization by the Annual General Meeting on April
12, 2018, pursuant to Section 286 p. 5 HGB, the Company shall not publish
the amounts of compensation for individual members of the Management
Board until the authorization expires (Nos. 4.2.4 and 4.2.5 of the Code). The
members of the Management Board shall adhere to the authorization when
they prepare the annual financial statements. Based on the authorization of
the Annual General Meeting, and in derogation of No. 4.2.5 p. 3 of the Code
the information stated in this Section regarding the compensation of the
members of the Management Board is not included in the Compensation
Report.
In derogation of No. 5.4.6 p. 2 s. 2 of the Code, members of the Supervisory
Board receive performance-based compensation that is not linked to the
sustainable success of the Company. The compensation was authorized by
the Annual General Meeting on April 12, 2018, it is stipulated in the Articles
of Association and is deemed to be proper and correct by PUMA SE.
In derogation of No. 5.4.6. p. 3 of the Code, the compensation of the Super-
visory Board members is not shown individually. In the opinion of PUMA SE,
this is not additional information relevant to the capital market as the re-
spective remuneration regulations included in the Articles of Association
are in the public domain.
Herzogenaurach, November 09, 2018
PUMA SE
For the Management
Board
For the Supervisory
Board
Bjørn Gulden
Michael Lämmermann
Jean-François Palus
Relevant disclosures of corporate governance practices that are
applied beyond the regulatory requirements
CORPORATE SOCIAL RESPONSIBILITY
In order to fulfill our ecological and social responsibility as a global sporting
goods manufacturer, PUMA has developed groupwide guidelines on
environmental management and on compliance with workplace and social
standards. PUMA is convinced that only on such a foundation can a lasting and
sustainable corporate success be achieved. That is why PUMA is committed to
the principles of the UN Global Compact. The PUMA Code of Conduct prescribes
ethical and environmental standards with which both employees and suppliers
are required to comply. The PUMA Code of Conduct was revised in 2016 and
explicitly addresses PUMA’s obligation and commitment in respect of human
rights and combating corruption. Detailed information on the company’s
corporate social responsibility strategy can be found in the Sustainability section
of the Annual Report or on the company’s homepage (http://about.PUMA.com
under “SUSTAINABILITY”).
COMPLIANCE MANAGEMENT SYSTEM
Compliance with laws and internal regulations and values are of key importance
for PUMA’s corporate governance. For this reason, PUMA has introduced a
compliance management system (CMS) to identify, control and monitor compli-
ance risks at an early stage. By developing policies as well as advising and
training employees, the CMS aims to prevent potential financial losses or
reputational damage from the company and to prevent misconduct.
The Code of Ethics of the PUMA Group sets out the principles governing our
actions and values. In addition to the general principles of conduct described as
well in the PUMA Code of Conduct, among other things, the policy contains rules
on the handling of conflicts of interest, personal data, insider information and
prohibits anti-competitive behavior as well as corruption in any form. The Code
of Ethics is an integral part of every employment contract. In order to further
reduce the risk of misconduct, the PUMA Code of Ethics is accompanied by
concrete guidelines governing selected risk areas in detail.
With the help of various measures such as risk-based face-to-face trainings
and e-learnings, the employees of the PUMA Group are familiarized with the
relevant legal regulations and internal guidelines and trained. In the past finan-
cial year, training was provided in particular in the areas of anti-corruption and
antitrust law. In 2018, all PUMA employees were instructed by the CEO of
PUMA SE to complete an e-learning course on the Code of Ethics including
modules on managing conflicts of interest, financial integrity and confidentiality.
The clear tone from the top led to 99% of PUMA employees successfully
completing the e-learning on the Code of Ethics.
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The Management Board have overall responsibility for the proper functioning
of the CMS. The Management Board is supported by a compliance organization
consisting of a Chief Compliance Officer and compliance officers in the most
important operational Group companies. The Audit Committee of the Super-
visory Board of PUMA SE is regularly informed about the current status of the
implementation of the compliance structures and serious compliance violations.
The Chief Compliance Officer works closely with the Legal Department and
Internal Audit. In addition, regular meetings of the PUMA SE Risk & Compliance
Committee are held. Among other things, the committee analyses and evaluates
compliance risks and defines and adopts appropriate measures (policies,
training courses, etc.).
After the separation from Kering PUMA introduced a new whistleblower
platform operated by an external provider that is available to PUMA employees
throughout the Group and to whom unethical, illegal or criminal activities can
be reported - if desired, anonymously as well. The introduction of the new plat-
form was communicated throughout the Group by the CEO and the communi-
cation was accompanied by appropriate information material. In addition to the
complaint system for PUMA employees, there is a worldwide hotline for external
whistleblowers from the supply chain.
Description of the working practices of the Management Board
and the Supervisory Board
PUMA SE has three bodies - the Management Board, the Supervisory Board and
the Annual General Meeting.
MANAGEMENT BOARD
The Management Board of PUMA SE manages the company on its own respon-
sibility with the goal of sustainable value creation. It develops PUMA’s strategic
orientation and coordinates it with the Supervisory Board. In addition, it ensures
group-wide compliance with legal requirements and an effective risk manage-
ment and internal control system.
The members of the Management Board are appointed by the Supervisory
Board. The Supervisory Board has set a general age limit of 70 years for the
members Management Board. The Management Board currently consists of
three members and has a CEO. Further information on the areas of responsi-
bility of the members of the Management Board can be found in the Notes to the
Consolidated Financial Statements (last chapter).
The members of the Management Board are obliged to disclose conflicts of in-
terest to the Supervisory Board without delay and to inform the other members
of the Management Board accordingly. They may only assume secondary activ-
ities, in particular supervisory board and comparable mandates outside the
PUMA Group, with the prior consent of the Supervisory Board. In the past fiscal
year, the members of the Management Board of PUMA SE did not report any
conflicts of interest.
The principles of cooperation of the Management Board of PUMA SE are set out
in the Rules of Procedure for the Management Board, which can be viewed at
http://about.PUMA.com under “Corporate Governance”.
SUPERVISORY BOARD
The German Co-determination Act does not apply to PUMA SE as a European
company. Rather, the size and composition of the Supervisory Board are
determined by the Articles of Association of PUMA SE and the Agreement on the
Involvement of employees in PUMA SE dated July 11, 2011 and its amendment
dated February 7, 2018. The Supervisory Board of PUMA SE consists of six
members, four of whom are shareholder representatives and two of whom are
employee representatives. The term of office of the current Supervisory Board
members ends at the end of the Annual General Meeting which resolves on the
discharge of the members of the Supervisory Board for the financial year 2022.
Further information on the members of the Supervisory Board can be found in
the Notes to the Consolidated Financial Statements (last chapter).
The Supervisory Board monitors and advises the Management Board on the
implementation of the strategy. It appoints the members of the Management
Board and may dismiss them at any time for good cause. In addition, it decides
on the remuneration system and determines the respective remuneration of the
members of the Management Board. The Management Board informs the
Supervisory Board regularly, promptly and comprehensively about all issues of
relevance to the Company relating to planning, business development, the risk
situation, risk management and compliance. It deals with deviations in the
course of business from the established plans and targets, stating the reasons.
The Supervisory Board is involved by the Management Board in decisions of
paramount importance for the company or beyond the ordinary course of
business of PUMA SE and the PUMA Group.
ANNUAL GENERAL MEETING
The shareholders of PUMA SE exercise their rights, in particular their
information and voting rights, at the Annual General Meeting. Each share has
one vote. Our shareholders can exercise their voting rights themselves or
through a proxy appointed by the company and bound by instructions. All
documents and information on the Annual General Meeting are available on the
website of PUMA SE.
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Description of the working practices and
the composition of the committees of the Supervisory Board
The Supervisory Board meets at least every three months. Meetings must
also be held if the best interests of the Company so require or if a member
of the Super visor y Board requests that the meeting be convened. The
Supervisory Board has established three committees to perform its duties
and receives regular reports on their work. The principles of cooperation of
the Supervisory Board of PUMA SE and the duties of the committees are set
out in the Rules of Procedure for the Supervisory Board, which can be viewed
at http://about.PUMA.com under “Corporate Governance”.
The Personnel Committee consists of three members. The Personnel Com-
mittee is responsible for entering into and making changes to the Management
Board members’ employment contracts and for establishing policies for
Human Resources and personnel development. The entire Supervisory Board
decides on issues involving the Management Board members’ compensation
based on recommendations from the Personnel Committee.
The Audit Committee consists of three members. The Chairman of the Audit
Committee must be an independent shareholder representative and must have
expertise in the fields of accounting and auditing in accordance with Section
100(5) AktG. In particular, the Audit Committee is responsible for accounting
issues and monitoring the accounting process, the effectiveness of the internal
control system, the risk management system, internal audits, compliance and
the statutory audit of the financial statements, with particular regard to the
required independence of the statutory auditors, issuing the audit mandate to
the statutory auditors, defining the audit areas of focus, any additional services
to be performed by the auditors and the fee agreement. The recommendation
of the Supervisory Board on the selection of the statutory auditors must be
based on a corresponding recommendation by the Audit Committee. Once the
Annual General Meeting has appointed the statutor y auditors, and the
Supervisory Board has issued the audit assignment, the Audit Committee shall
work with the statutory auditors to specify the scope of the audit and the audit
areas of focus. The statutory auditors shall attend a meeting to review the annual
financial statements and the consolidated financial statements and shall report
on the key findings of their audit. They shall also inform the Committee about
other services they have provided in addition to auditing services and shall
confirm their independence. Each month, the Audit Committee shall receive
financial data on the PUMA Group, which will allow the tracking of developments
in net assets, financial position, results of operations and the order books on a
continual basis. The Audit Committee shall also deal with issues relating to the
balance sheet and income statement and shall discuss these with Management.
Inaddition, when the internal audit projects are completed, the Audit Committee
shall receive the audit reports, which must also include any actions taken.
The Nominating Committee has three members, who may only be representatives
of the shareholders on the Supervisory Board. The Nominating Committee
proposes suitable shareholder candidates to the Supervisory Board for its voting
recommendations to the Annual General Meeting.
The current composition of the committees can be found in the Notes to the
Consolidated Financial Statements (last chapter).
Diversity Concept for the Supervisory Board
a) Objectives for the composition of the Supervisory Board
The Supervisory Board of PUMA SE is composed in such a way that its members
as a group possess the appropriate knowledge, skills and professional experience
necessary for the proper performance of their duties. The composition of the
Supervisory Board is primarily determined by appropriate qualification, taking
into account diversity and the appropriate involvement of women. Based on
Section 5.4.1 of the Code, the Supervisory Board has set targets for his composition
that have been fulfilled. In detail:
• The members of the Supervisory Board as a group have the experience and
knowledge in the field of management and / or monitoring market-oriented
companies as well as in the business segments and sales markets of PUMA.
• A sufficient number of members have strong international backgrounds.
•
Including the employees’ representative on the Supervisory Board, the
Supervisory Board has an appropriate number of independent members.
• The Chairman of the Audit Committee has specialist knowledge and
experience in the application of accounting principles and internal control
procedures and is independent.
• The members have sufficient time to perform his / her mandate in the
Supervisory Board.
• The Supervisory Board prevents potential significant and not only temporary
conflicts of interest of its members by regularly monitoring and critically
scrutinizing its members’ other activities.
• According to Section 1(4) of the Rules of Procedure for the Supervisory
Board, Supervisory Board members may, in principle, not be over 70 years
of age and their maximum term of office may not exceed three terms.
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b) Profile of skills and expertise
The Supervisory Board has determined a competence profile for the entire
Board. It stipulates that the members of the Supervisory Board as a whole must
cover the following professional competencies:
the Management Board and 30% for the second management level. At Group
level, the proportion of women is expected to increase to 30% for the first
management level below the Management Board and to 40% for the second
management level. All implementation deadlines run until October 31, 2021.
• Managing of large or mid-sized international companies
• Leadership experience in the sporting or luxury goods industry
The current composition of the Supervisory Board largely implements the
diversity concept. With regard to the target figure for the proportion of women on
the Supervisory Board, targets have been set to be achieved by October 31, 2021.
•
International corporate background
• Leadership experience with various distribution channels,
including e-commerce
• Expertise in building strong international brands
• Marketing, sales and digital know how
• Financial expertise (accounting, treasury, risk management,
corporate governance)
• Expertise in serving on the Administrative or Supervisory Boards of
publicly listed companies
• Experience with mergers & acquisitions
• Understanding of the industrial constitution law and advocating the
interests of the employees
• HR expertise
•
IT expertise
The Supervisory Board of PUMA SE is currently composed in such a way that it
has the competence profile as an overall body.
c) Commitments to promote the participation of women in
management positions in accordance with Art. 9(1)c(ii)
of the SE Regulation (SE-VO) in connection with Section 76(4)
and Section 111(5) AktG
The Supervisory Board has adopted the targets set by the Administrative Board
for the proportion of women on the Supervisory Board, at the level of the
Management Board and the two management levels below the Management
Board. For the Supervisory Board of PUMA SE a target of 30% women was set;
for the level of the Management Board a target of 20% was set, on the condition
that the Management Board of PUMA SE consists of five or more members. The
Supervisory Board adopted targets of 25% for the first management level below
Diversity Concept for the Management Board
The Supervisory Board and the Management Board promote an agile, open
corporate culture in which the advantages of diversity are consciously utilized
and everyone can freely unfold their potential for the best of the company. PUMA
strives to fill Management Board positions and senior management positions
primarily with people developed within the company.
The Supervisory Board’s decision regarding a particular appointment to the
Management Board is always taken in consideration of the Company’s best
interests based on the professional and personal suitability of the candidate. It
must be ensured that the members of the Management Board as a whole have
the knowledge, skills and experience required for the best possible fulfillment
of the tasks of a member of the Management Board of a sporting goods
manufacturer such as PUMA. It is not necessary for every member of the
Management Board to reflect all technical requirements of all areas of the
Management Board. The diversity concept for the Management Board therefore
stipulates that gender, internationality, age, educational background and
experience must be taken into account in its composition:
• Gender
PUMA aims to have 20% women on the Management Board by October 31, 2021,
provided that the Board has five or more Management Board members. In order
to achieve this goal, the Management Board ensures that an appropriate
proportion of female candidates are included on the succession lists within the
framework of the internal global management structure for the development of
junior staff for the Management Board. In the future, the participation of women
in the Management Board is to be guaranteed in the event of a necessary
replacement, in particular by giving special consideration to women in various
equally qualified candidates. Insofar as external candidates are to be appointed,
suitably qualified female candidates shall be considered in particular. The same
applies to the filling of management functions. In order to involve women even
more in management functions in the future, PUMA promotes the compatibility
of family and career, for example through part-time and half-day models as well
as flexible working hours and the provision of childcare places.
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•
Internationality
PUMA is a globally operating company. An appropriate number of board
members must therefore have international experience either due to their origin
or due to their many years of professional experience abroad.
• Age
The Supervisory Board ensures a balanced age structure in the Management
Board. This is important to ensure the continuity of the Management Board’s
work and to facilitate smooth succession planning. In principle, members of the
Management Board may not be older than 70 years.
• Training and experience background
With regard to the educational and professional background, the selection of
Management Board members should be based on the competencies required
in the PUMA Management Board in general as well as for the respective
Management Board with regard to corporate management, strategy
development, finance and accounting, supply chain, sales and HR. The same
criteria apply here as were developed for the competence profile of the
Supervisory Board. These competencies do not have to be acquired as part of
university studies or other educational training, but may also have been acquired
in other ways within or outside PUMA.
The current composition of the Management Board largely implements the
diversity concept. With regard to the target figure for the proportion of women
on the Management Board, targets have been set for the period up to 31 October
2021.
Directors’ Dealings
In the reporting year, the members of the Management Board and the members
of the Supervisory Board have acquired no PUMA shares. No sales were re-
ported to us.
RISK AND
OPPORTUNITY REPORT
Entrepreneurial activities are always associated with uncertainties and risks.
This is particularly true for the fast-paced sports and lifestyle industry in which
PUMA operates. Due to the global nature of business in this industry, PUMA is
constantly exposed to risks and opportunities that must be identified and
managed. Here, we need an effective risk and opportunity management through
which risks and opportunities can be systematically recognized and monitored.
A risk is defined as one or more future events with unplanned, adverse effects
for the company up to and including any threat to the continued existence of the
company. Similarly, an opportunity is defined as one or more events with
unplanned, positive consequences for the company.
The members of the PUMA SE Management Board, who acted as managing
directors through July 2018, have overall responsibility for the risk and opportunity
management system. The “Risk Management Committee” (hereinafter “RMC”) is
a management-level committee responsible for the design and monitoring of the
risk management system, thereby acting as the first point of contact for risk
report preparation. The task of operationally coordinating and implementing the
Group-wide risk management system has been transferred to Group Internal
Audit & GRC (Governance, Risk Management & Internal Control). Opportunity
management is not part of risk management. Individual interviews (risk interviews)
are conducted with select executives at the management level below the
Management Board (risk owners) throughout the company at regular intervals
(currently twice a year). The objective of these interviews is to systematically
identify, validate and categorize risks and record countermeasures. The Group
Internal Audit & GRC department provides a uniform framework for the
assessment of risks. The assessment considers probability of occurrence, the
potential effect, and the control of the risk in question.
The risks identified and assessed during the risk interviews are presented to
the RMC in an aggregated form (the risk heat map). The RMC consists of a fixed
group of executives from various corporate divisions, including the Management
Board. The position of RMC Chairman is always filled by a member of the
Management Board. The results of the RMC meetings are reported to the Audit
Committee (sub-committee of the Supervisory Board) by the Chair of the RMC
and the Head of the Group Internal Audit & GRC department. An integrated GRC
tool used to document the risk management processes is available to the Group
Internal Audit & GRC department and to the risk owners.
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PUMA also has a comprehensive reporting and controlling system, which is an
essential component of its risk management approach. PUMA’s reporting and
controlling system is based on monthly financial reporting as well as the review
and plausibility reports on reported information issued by Controlling.
Managers analyze opportunities and risks in annual planning discussions
around the world, setting targets and defining courses of action based on the
results. The comprehensive reporting system continuously monitors and
generates reports on compliance with the set targets. This enables PUMA to
promptly identify any deviations or negative developments, and to initiate any
necessary countermeasures in a timely manner.
RISK AND OPPORTUNITY CATEGORIES
Macroeconomic Developments
As a Group that operates internationally, PUMA is exposed to global macro-
economic developments and the associated risks. For example, economic
developments in important sales markets may have an effect on consumer
behavior. This can have positive or negative effects on the planned sales and
results. Likewise, political changes, exchange rate fluctuations, changes to
the legal framework, such as in connection with a disorderly Brexit, and social
developments may have an effect.
Overall, PUMA manages these challenges with geographic diversification and
the development of alternative scenarios for the possible occurrence of serious
events. This applies in particular to political developments and possible changes
of legal framework conditions which are continuously monitored by PUMA.
Brand Image
Brand image and brand desirability are of key importance for PUMA, as consumer
behavior can have a negative effect on the brand as well as a positive one.
Accordingly, PUMA has formulated the guiding principle of “We want to become
the fastest sports brand in the world” in order to underline the company’s
long-term direction and strategy. The FOREVER FASTER brand promise does
not just stand for PUMA’s product range as a sports company, but also applies to
all company processes.
PUMA manages brand image risks in particular through cooperation with brand
ambassadors who embody the core of the brand and PUMA’s brand values (“cou-
rageous”, “confident”, “determined” and “fun-loving”), and have a large potential
for influencing PUMA’s target group. PUMA has therefore strengthened its posi-
tion as a sports brand through its partnerships with top athletes such as sprint
legend Usain Bolt, star striker Antoine Griezmann and Formula One star Lewis
Hamilton. In football, PUMA entered into long-term sponsorship agreements with
leading clubs such as Borussia Mönchengladbach, Olympique Marseille and AC
Milan in 2018. PUMA’s return to basketball in 2018 is also in this context. PUMA
reaches young trendsetters via brand ambassadors and collaborations from the
cultural and fashion scene, such as Jay-Z, Cara Delevingne and Selena Gomez.
Counterfeit Products
Counterfeit products can cause damage to consumer confidence in the brand
and can devalue PUMA’s brand image. For this reason, PUMA has made fighting
brand piracy a top priority. PUMA’s intellectual property team does more than
just protect a strong global intellectual property portfolio of brands, designs
and patents. PUMA also works closely with customs and other law-enforcement
authorities around the world and provides input regarding the implementation
of effective laws to protect intellectual property.
Sourcing and the Supply Chain
The majority of PUMA products is produced in selected markets in Asia, in
particular in China, Vietnam, Bangladesh and India. Production in these
countries and transport to distribution countries is associated with significant
risks for PUMA. For instance, certain risks may result from factors such as
exchange rate fluctuations, changes in taxes and customs duties or trade
restrictions, but also natural disasters and political instability, as well as the
international threat of terrorism.
Moreover, risks may result from an overdependence on individual manufacturers.
The portfolio is regularly reviewed and adjusted to avoid creating a dependence
on individual suppliers and sourcing markets. Generally, long-term master
framework agreements are agreed upon to secure production capacities
required in the future.
Furthermore, there is a risk that suppliers will violate core ILO (International
Labour Organization) labor standards, not comply with environmental standards
or use hazardous chemicals in production. This would violate PUMA
requirements to suppliers and also result in negative reporting. Adherence to
applicable standards is ensured through regular audits of supplier companies.
Climate change and increasing customer requirements with regard to
sustainability are leading to a stronger ecological focus both in our own locations
and along the production and supply chain. More efficient use of resources as
well as minimization of CO2 emissions and use of sustainable materials in
production are expressions of PUMA’s sustainability strategy.
Product and Market Environment
The risk posed by market-specific product influences, in particular the risk of
substitutability in the highly competitive sport and lifestyle market is decisively
countered by the early recognition and taking advantage of relevant consumer
trends. Only those companies that identify these trends at an early stage will be
able to gain an edge over their competitors.
Targeted investments in product design and product development are to ensure
that the characteristic PUMA design of the entire product range is consistent
with the overall brand strategy (FOREVER FASTER), thereby creating a unique
level of brand recognition. PUMA is focusing, for example, on the expansion and
improvement of the product range for women as part of the “The future is
female” initiative.
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Retail and e-commerce
PUMA operates various distribution channels (including traditional trade,
PUMA’s own retail stores and e-commerce platforms) in order to reduce the
dependency on individual distribution paths. The focus on the company’s own
retail stores and its own e-commerce platforms should furthermore ensure
that PUMA products are presented exclusively in the desired brand environment.
Distribution through the company’s own retail stores and e-commerce platforms
is, however, also associated with various risks for PUMA. This includes the
necessary investments in expansion and infrastructure, setting up stores,
higher fixed costs and leases with long-term lease obligations which can have
an adverse impact on profitability should business decline. On the other hand,
extending the value chain can deliver higher gross profit margins and provide
better control over distribution. In addition, PUMA-owned retail stores can
deliver the PUMA brand experience directly to the end customer.
In order to avoid risks and take advantage of opportunities, PUMA performs
in-depth location and profitability analyses before making investment decisions.
As a result of the company’s reporting and controlling system, negative trends
can be detected early on, and the countermeasures required to manage
individual stores can be taken accordingly. In e-commerce, global activities are
harmonized and investments in the IT platform are made to further optimize
purchase transaction settlement and further improve the purchasing experience
for consumers.
Reporting in the Media
A negative media report about PUMA, such as a product recall, infringement of
laws, or internal or external requirements, can also do significant damage to
the brand and ultimately result in the loss of sales and profit, regardless of
whether these events actually happened or were just rumors. PUMA manages
this risk by way of careful press and PR work, which is managed from the
Group’s headquarters in Herzogenaurach, Germany. In addition, PUMA regularly
seeks an open dialog with key external stakeholders (e.g. NGOs), and this has
been institutionalized in the “Global Stakeholder Dialogues” which take place
regularly.
Organizational Challenges and Project Risks
The organizational structure of PUMA with the Group’s headquarters in
Herzogenaurach, a central sourcing organization and globally positioned
distribution companies, gives the Group a global orientation. This results in a risk
for PUMA that the flows of goods and information are not sufficiently supported
by modern IT infrastructure. For this reason, existing business processes must
be continually optimized and adapted. This is carried out systematically through
targeted optimization projects, which are planned and managed centrally by a
staff member.
Personnel Department
The creative potential and commitment and performance of PUMA employees are
important factors for the success of any business and the source of significant
opportunities as well. PUMA encourages independent thinking and action, which
are key in an open corporate culture with flat hierarchies.
PUMA’s human resources strategy seeks to ensure the long-term sustainability
of this successful philosophy. To achieve this goal, a control process is in place to
detect and assess human-resource risks. Accordingly, special attention has been
paid to managing talent, identifying key positions and high-potential individuals,
and optimizing talent placement and succession planning. PUMA has instituted
additional national and global regulations and guidelines to ensure compliance
with legal provisions. PUMA will continue to make targeted investments in the
human-resource needs of particular functions or regions in order to meet the
future requirements of its corporate strategy.
Legal Risks
As an internationally operating Group, PUMA is exposed to various legal risks.
These include contractual risks or risks that a third party could assert claims
and litigation for infringement of its trademark rights, patent rights or other
rights. The continuous monitoring of contractual obligations and the integration
of internal and external legal experts in contractual matters is to ensure that
any legal risks are avoided.
Compliance Risks
PUMA is exposed to the risk that employees violate laws, directives and company
standards (compliance violations). These risks, such as theft, fraud, breach of
trust, embezzlement and corruption, as well as deliberate misrepresentations
in financial reporting, may lead to significant monetary and reputational damage.
PUMA therefore makes use of various tools to manage these risks. They include
an integrated compliance management system, the internal control system,
Group controlling and the internal audit department. As part of the Compliance
Management System, awareness measures are carried out on important com-
pliance subjects, such as corruption prevention and cartel law and corresponding
guidelines are introduced in the Group. PUMA employees also have access to
an integrity system for reporting unethical behavior.
Currency Risks
As an international company, PUMA is subject to currency risks resulting from
the disparity between the respective amounts of currency used on the
purchasing and sales sides and from exchange-rate fluctuations.
PUMA’s biggest sourcing market is Asia, where most payments are settled in
US dollars (USD), while sales of the PUMA Group are mostly invoiced in other
currencies. PUMA manages currency risk in accordance with internal
guidelines. Currency forward contracts are used to hedge existing and future
financial liabilities in foreign currencies.
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To hedge signed or pending contracts against currency risk, PUMA only
concludes currency forward contracts on customary market terms with
reputable international financial institutions. As of the end of 2018, the net
requirements for the 2019 planning period were adequately hedged against
currency effects.
Foreign exchange risks may also arise from intra-group loans granted for
financing purposes. Currency swaps and currency forward transactions are
used to hedge currency risks when converting intra-group loans denominated
in foreign currencies into the functional currencies of the Group companies
(Euro).
In order to disclose market risks, IFRS 7 requires sensitivity analyses that show
the effects of hypothetical changes in relevant risk variables on earnings and
equity. The periodic effects are determined by relating the hypothetical changes
caused by the risk variables to the balance of the financial instruments held as
of the balance sheet date. The underlying assumption is that the balance as of
the balance sheet date is representative for the entire year.
Currency risks as defined by IFRS 7 arise on account of financial instruments
being denominated in a currency that is not the functional currency and is mon-
etary in nature. Differences resulting from the conversion of the individual
financial statements to the Group currency are not taken into account. All
non-functional currencies in which PUMA employs financial instruments are
generally considered to be relevant risk variables.
Currency sensitivity analyses are based on the following assumptions:
Material primary monetary financial instruments (cash and cash equivalents,
receivables, interest-bearing debt, liabilities from finance leases and
non-interest-bearing liabilities) are either denominated directly in the functional
currency or transferred into the functional currency through the use of currency
forward contracts.
Currency forward contracts used to hedge against payment fluctuations caused
by exchange rates are part of an effective cash-flow hedging relationship
pursuant to IAS 39. Changes in the exchange rate of the currencies underlying
these contracts have an effect on the hedge reserve in equity and the fair value
of these hedging contracts.
Counterparty Risks
Because of its business activities, PUMA is exposed to default risk that is
managed by continuously monitoring outstanding receivables and recognizing
impairment losses, where appropriate. The default risk is limited where possible
by credit insurance and the maximum default risk is reflected by the carrying
amounts of the financial assets recognized on the balance sheet. Furthermore,
default risks result to a lesser extent from the counterparty’s other contractual
financial obligations such as bank deposits and derivative financial instruments.
Liquidity Risk
PUMA continually analyzes short-term funding requirements through rolling
cash flow planning at the level of the individual companies in coordination with
the central treasury department. In order to ensure solvency, financial flexibility
and a strategic liquidity cushion at all times, a liquidity reserve is maintained in
the form of cash and confirmed credit lines.
In 2018, the PUMA Group implemented an independent financing concept after
the distribution of the majority shareholding of Kering S.A. A syndicated credit
line of € 350.0 million was taken out for this purpose. The syndicated credit line
was not utilized as of December 31, 2018.
To finance medium and long-term funding requirements that cannot be covered
directly from the cash flow from operating activities, promissory note loans were
issued for the first time in July 2018 in four tranches, one tranche each with a
variable and fixed coupon over 3 years (total € 100.0 million) and one tranche
each over 5 years (total € 60.0 million).
Interest-Rate Risks
At PUMA, changes in interest rates do not have a significant impact on interest
rate sensitivity and therefore do not require the use of interest rate hedging
instruments.
Summary
PUMA’s risk management system allows the company to fulfill the legal
requirements pertaining to corporate control and transparency. In 2018, there
was no material change in the assessment of the risk situation. The Management
assumes that, in an overall assessment of the company’s risk situation, the risks
are limited and manageable. Due to the extremely solid balance sheet structure,
in particular the high equity ratio and the positive business outlook, the
management does not see any substantial threat to the continued existence of
the PUMA Group.
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MAIN FEATURES OF THE INTERNAL CONTROL AND RISK
MANAGEMENT SYSTEM AS IT RELATES TO THE GROUP’S
ACCOUNTING PROCESS
PUMA SE’s Management Board is responsible for the preparation and accuracy
of the annual financial statements, the consolidated financial statements and
the combined management report of PUMA SE. The consolidated financial
statements were prepared in accordance with the International Financial
Reporting Standards that apply in the EU, the requirements of the German
Commercial Code (HGB), the German Stock Corporation Act (AktG) and the
German SE Implementation Act (SEAG). Certain disclosures and amounts are
based on current estimates made by management and the Management Board.
The company’s Management Board is responsible for maintaining and regularly
monitoring a suitable internal control and risk management system covering
the consolidated financial statements and the disclosures in the combined
management report. This control and risk management system is designed to
ensure the compliance and reliability of the internal and external accounting
records, the presentation and accuracy of the consolidated financial statements,
and the combined management report and the disclosures contained therein.
It is based on a series of process-integrated monitoring steps and encompasses
the measures necessar y to accomplish these, internal instructions,
organizational and authorization guidelines, the PUMA Code of Ethics, a clear
separation of functions within the Group and the dual-control principle. The
adequacy and operating effectiveness of these measures are regularly reviewed
by the Group Internal Audit & GRC department.
For monthly financial reporting and consolidation, PUMA has a Group-wide
reporting and controlling system that allows it to regularly and promptly detect
deviations from projected figures and accounting irregularities and, where
necessary, to take countermeasures.
The risk management system can regularly, as well as on an ad-hoc basis,
identify events that could affect the company’s economic performance and its
accounting process so that it can analyze and evaluate the resulting risks and
take the necessary actions to counter them.
In preparing the consolidated financial statements and the combined
management report, it is also sometimes necessary to make assumptions and
estimates that are based on the information available on the balance sheet date
and which will affect the reported amounts and recognition of assets and
liabilities, income and expenses, contingent liabilities, and other data that must
be reported, as well as how these are classified.
The Supervisory Board’s Audit Committee meets regularly with the independent,
statutory auditors, the Management Board, and the Group Internal Audit & GRC
department to discuss the results of the statutory audits of the financial
statements and of the audit review with regard to the internal control and risk
management system as it relates to the accounting process. The auditor reports
to the Supervisory Board during the balance-sheet meeting on the results of
annual and consolidated financial statements.
In addition to the risk and opportunity management described, the Group
Internal Audit & GRC department carries out so-called “internal control self-
assessments” (ICSA) at the process level for all essential business processes.
In these, process owners evaluate the existing control framework on the basis
of best-practice standards. The objective is to continuously improve the internal
control system and to identify specific risks at process level. The results of the
ICSA are reported to the Audit Committee and are used specifically by the Group
Internal Audit & GRC department in risk-oriented audit planning.
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SUPPLEMENTAL
REPORT AND OUTLOOK
SUPPLEMENTAL REPORT
There were no events after the balance sheet date which may have a material
effect on the net assets, financial position and results of operations of the
PUMA Group.
Mr. Lars Radoor Sørensen has resigned as a member of the Management Board
of PUMA SE with effect from January 31, 2019. With effect from February 1, 2019,
the Supervisory Board of PUMA SE appointed Ms. Anne-Laure Descours to the
Management Board as Chief Sourcing Officer.
OUTLOOK
Global Economy
After the global economy slowed down in 2018, the experts of the Kiel Institute
for World Economy (IFW Kiel), in their winter forecast of December 11, 2018,
expect the global gross domestic product (GDP) to rise by 3.4% in 2019. This
corresponds to a slight decline of 0.3% on the GDP forecast for 2018. The pace
of expansion is expected to slow slightly in 2019, both in the advanced economies
and in the emerging markets. Risks for the growth outlook lie in particular in an
intensification of trade conflicts, a disorderly Brexit and a further tightening of
monetary policy in the United States of America. Experts’ forecasts, however,
predict that a solution for the trade disputes will be found and there will therefore
be no significant slowdown in economic development over the course of the year
2019.
Sporting goods industry
If there are no significant negative effects on the part of macroeconomic devel-
opment, we continue to expect stable growth in the sporting goods industry in
2019. It can be assumed that the trend for sporting activities and a healthy life-
style will continue and the demand for sporting goods will therefore also con-
tinue to rise.
Outlook 2019
Our business developed strongly in 2018, both in terms of sales and profitability.
We are confident that the positive development will continue in 2019.
For the full year 2019, we therefore expect currency-adjusted sales growth of
around 10%. We forecast the gross profit margin to show a slight improvement
compared to last year (2018: 48.4%) and operating expenses (OPEX) to increase
at a slightly lower rate than sales. Based on the current exchange rate levels,
management expects an operating result (EBIT) for the financial year 2019 in a
range between € 395 million and € 415 million (2018: € 337.4 million). Manage-
ment also expects a significant improvement of net earnings in 2019.
The new accounting standard relating to lease accounting (IFRS 16), which is
effective since January 1, 2019, leads to a capitalization of the operating leases
on the balance sheet (approximately € 618 million on January 1st, 2019). The
outlook for the operating result (EBIT) in a range of € 395 million to € 415 million
(see above) includes a positive effect of approximately € 16 million caused by
the new accounting standard. This effect on the operating result is composed
of a decrease in rental expenses of approximately € 153 million and an increase
in depreciation for leases of approximately € 137 million. Taking into account
further interest and deferred tax effects of IFRS 16, the estimated impact on net
earnings in 2019 is a negative amount of approximately € 7 million.
Please refer to the Notes to the Consolidated Financial Statements, Chapter 1
General, for a detailed description of the new accounting standards and the
effects of the first-time application of IFRS 16 Leases.
Investments
Investments in fixed assets of around € 200 million are planned for 2019. The
majority of these investments will be in infrastructure in order to create the
operating requirements for the planned long-term growth. The increase
compared with the investments in 2018 mainly relates to planned investments
in our own distribution and logistics centers. Further investments will also be
made in the expansion and modernization of the Group’s own retail stores.
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Foundation for Long-Term Growth
The Management Board and the Supervisory Board have set the long-term
strategic priorities. Action plans are being implemented in a targeted and
value-oriented manner. The management believes that the corporate strategy
FOREVER FASTER provides the basis for medium- and long-term positive
development. We therefore confirm our medium-term target of an average
annual growth rate of currency-adjusted sales of around 10% (CAGR) and the
achievement of a 10% EBIT margin by 2021 / 2022.
Herzogenaurach, January 30, 2019
The Management Board
Bjørn Gulden
Michael Lämmermann
Lars Radoor Sørensen
This is a translation of the German version.
In case of doubt, the German version shall apply.
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130130
PUMA Annual Report 2018
8
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CONSOLIDATED FINANCIAL STATEMENTS
131
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ��������������132
CONSOLIDATED INCOME STATEMENT �������������������������������������������133
CONSOLIDATED OF COMPREHENSIVE INCOME ����������������������������134
CONSOLIDATED STATEMENT OF CASHFLOWS �����������������������������135
STATEMENT OF CHANGES IN EQUITY ��������������������������������������������136
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ���������137
DECLARATION BY THE LEGAL REPRESENTATIVES ����������������������196
INDEPENDENT AUDITOR´S REPORT ����������������������������������������������197
131
IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional Information
2,192.8
1,884.8
Current liabilities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
T�1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (in € million)
ASSETS
Notes
12 / 31 / 2018
12 / 31 / 2017
Cash and cash equivalents
Inventories
Trade receivables
Income tax receivables
Other current financial assets
Other current assets
Current assets
Deferred income taxes
Property, plant and equipment
Intangible assets
Investments in associates
Other non-current financial assets
Other non-current assets
3
4
5
23
6
7
8
9
10
11
12
12
463.7
915.1
553.7
33.9
111.2
115.2
415.0
778.5
503.7
26.8
66.7
94.1
207.6
294.6
437.5
0.0
65.4
9.4
207.9
260.1
412.9
16.6
51.7
19.8
Non-current assets
1,014.4
969.0
TOTAL ASSETS
3,207.2
2,853.8
LIABILITIES AND
SHAREHOLDERS‘ EQUITY
Current financial liabilities
Trade payables
Income taxes
Other current provisions
Other current financial liabilities
Other current liabilities
Deferred income tax liabilities
Pension provisions
Other non-current provisions
Liabilities from acquisitions
Other non-current financial
liabilities
Other non-current liabilities
Non-current liabilities
Subscribed capital
Group reserves
Retained earnings
Treasury stock
Equity attributable to the
shareholders of the parent
Non-controlling interests
Shareholders‘ equity
TOTAL LIABILITIES AND
SHAREHOLDERS‘ EQUITY
Notes
12 / 31 / 2018
12 / 31 / 2017
13
13
23
16
13
13
8
15
16
17
13
13
18
18
18
18
18
20.5
705.3
68.0
39.6
57.2
29.0
646.1
54.7
86.2
94.9
304.6
145.5
1,195.2
1,056.5
47.7
28.9
26.3
3.3
180.7
2.9
289.7
38.6
146.8
37.6
29.7
34.6
4.8
30.9
3.0
140.7
38.6
50.7
1,546.7
1,566.1
-28.9
-30.0
1,703.3
1,625.5
18.9
31.2
1,722.2
1,656.7
3,207.2
2,853.8
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132132
PUMA Annual Report 2018
CONSOLIDATED INCOME STATEMENT
T�2 CONSOLIDATED INCOME STATEMENT (in € million)
Sales
Cost of sales
Gross profit
Notes
20, 26
26
26
2018
2017
4,648.3
4,135.9
-2,399.0
-2,181.5
2,249.4
1,954.3
Royalty and commission income
16.3
15.8
Other operating income and
expenses
21
-1,928.4
-1,725.6
Operating income (EBIT)
337.4
244.6
Result from associated companies
Financial income
Financial expenses
Financial result
Earnings before taxes (EBT)
Taxes on income
Consolidated net earnings
for the year
attributable to:
22
22
22
23
-1.5
11.6
-34.1
-24.0
313.4
-83.6
1.6
10.3
-25.3
-13.4
231.2
-63.3
229.8
168.0
Non-controlling interest
18
-42.4
-32.2
Equity holders of the parent
(net earnings)
Earnings per share (€)
Earnings per share (€)-diluted
Weighted average shares outstanding
(million)
Weighted average shares
outstanding, diluted (million)
187.4
12.54
12.54
135.8
9.09
9.09
14.947
14.943
14.947
14.943
24
24
24
24
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133133
PUMA Annual Report 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
T�3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in € million)
Net earnings before attribution
Currency changes
Cashflow hedge
Release to the income statement
Market value for cashflow hedges
Neutral effects of available-for-sale financial assets*
Share in the other comprehensive income of at equity accounted
investments
Items expected to be reclassified to the income statement in the future
Remeasurements of the net defined benefit liability
Neutral effects financial assets through other comprehensive income
(FVTOCI) *
Items not expected to be reclassified to the income statement
in the future
Other result
Comprehensive income
attributable to:
Non-controlling interest
Equity holder of the parent
After tax
2018
Tax impact
2018
Before tax
2018
After tax
2017
Tax impact
2017
Before tax
2017
229.8
-11.7
42.9
35.6
-0.2
66.7
0.3
9.1
9.4
76.1
305.9
43.4
262.5
229.8
-11.7
46.4
37.2
-0.2
71.8
0.6
9.1
9.7
81.5
311.3
43.4
267.8
168.0
-114.9
-43.8
-55.0
3.8
-0.4
-210.3
1.0
1.0
-209.3
-41.4
29.2
-70.6
-3.5
-1.6
-5.1
-0.3
0.0
-0.3
-5.4
-5.4
-5.4
168.0
-114.9
-43.9
-59.1
3.8
-0.4
-214.5
1.3
1.3
-213.2
-45.2
29.2
-74.5
0.1
4.2
0.0
4.2
-0.3
-0.3
3.9
3.9
3.9
* Due to the first-time application of IFRS 9, the line “Neutral effects of available-for-sale financial assets“ in the statement of comprehensive income was allocated to those components that will
not be reclassified to the income statement in the future and renamed “Neutral effects of financial assets in the FVTOCI category“. Prior year figures have not been adjusted.
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134134
PUMA Annual Report 2018
CONSOLIDATED STATEMENT OF CASHFLOWS
T�4 CONSOLIDATED STATEMENT OF CASHFLOWS (in € million)
Notes
2018
2017*
Notes
2018
2017*
Operating activities
Earnings before tax (EBT)
Adjustments for:
Depreciation
Non-realized currency gains / losses, net
Result from associated companies
Financial income
Financial expenses
Changes from the sale of fixed assets
Changes to pension accruals
Other non-cash effected expenses /
income
Gross Cashflow
Changes in receivables and other
current assets
Changes in inventories
Changes in trade payables and other
current liabilities
313.4
231.2
81.5
-15.7
1.5
70.4
15.7
-1.6
-11.3
-10.1
19.7
1.0
-0.6
18.5
1.7
-0.4
9, 10
11
22
22
15
8.6
5.6
27
398.0
330.9
5, 6, 7
-61.2
-92.8
4
-122.8
-117.2
13
146.0
159.4
Cash inflow from operating activities
360.1
280.3
Dividends received
Income taxes paid
Net cash from operating activities
11, 12
0.9
1.0
23
27
-82.9
-42.6
278.1
238.8
Investing activities
Proceeds from the sale of long-
term shareholdings
11
23.5
0.0
Purchase of property and equipment
9, 10
-130.2
-122.9
Proceeds from sale of property and
equipment
Payment for other assets
Interest received
1.5
-3.6
3.5
12,6
-1.7
1.8
12
22
Cash outflow from investing activities
-105.3
-110.3
Financing activities
Changes in leasing liabilities
13
-1.8
-0.2
Raising / (-) Repayment of current
financial liabilities
Raising of non-current financial
liabilities
Dividend payments to equity holders of
the parent
Dividend payments to non-controlling
interests
Interest paid
Other changes
13
-16.6
-12.1
13
145.2
15.4
18
-186.8
-11.2
18
22
-55.7
-13.4
-12.6
-11.6
0.0
-2.0
Cash outflow from financing activities
27
-128.3
-34.9
Exchange rate-related changes in cashflow
Change in cash and cash equivalents
Cash and cash equivalents at beginning
of the financial year
4.2
48.7
-5.3
88.3
415.0
326.7
Cash and cash equivalents at the end of
the financial year
3, 27
463.7
415.0
* Prior-year figures adjusted, see Notes to the Consolidated Financial Statements
chapter 27 (Notes to the Cash flow statement)
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135135
PUMA Annual Report 2018
STATEMENT OF CHANGES IN EQUITY
T�5 STATEMENT OF CHANGES IN EQUITY (in € million)
Subscribed
capital
Reserves
Retained
earnings
Treasury
stock
Equity
before non-
controlling
interests
Non-
controlling
interests
TOTAL
equity
Capital
reserve
Revenue
reserves
Difference
from
currency
conversion
Cash flow
hedges
At equity
accounted
investments
38.6
193.7
55.6
-100.9
54.3
0.5
1,496.6
-31.4
1,706.9
4.8
4.8
-111.7
-111.7
-99.1
-99.1
-0.4
-0.4
55.0
-1.8
0.8
135.8
135.8
-11.2
-55.0
9.4
9.4
-13.0
-13.0
78.8
78.8
-0.2
-0.2
20.0
187.4
187.4
-186.8
-20.0
135.8
-206.4
-70.6
15.3
32.2
-2.9
29.2
1,722.2
168.0
-209.3
-41.4
-11.2
-13.4
-24.6
1.4
-1.8
2.2
187.4
75.0
262.5
-1.8
2.2
1,656.7
229.8
76,1
305.9
31.2
42.4
1,1
43.4
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-186.8
-55.7
-242.5
38.6
192.6
115.3
-212.6
-44.8
0.2
1,566.1
-30.0
1,625.5
12 / 31 / 2016
Net Earnings
Net income directly recognized
in equity
Total comprehensive income
Dividends paid to equity holders
of the parent company /
non-controlling interests
Transfers to revenue reserves
Repurchase of equity instruments
Utilization / Issue of shares
12 / 31 / 2017
Net Earnings
Net income directly recognized
in equity
Total comprehensive income
Dividends paid to equity holders
of the parent company /
non-controlling interests
Transfers to revenue reserves
Repurchase of equity instruments
Utilization / Issue of shares
1.0
1.1
2.2
2.2
12 / 31 / 2018
38.6
193.6
144.7
-225.6
34.1
-0.0
1,546.7
-28.9
1,703.3
18.9
1,722.2
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136136
PUMA Annual Report 2018
NOTES TO THE
CONSOLIDATED FINANCIAL
STATEMENTS
1. GENERAL
Under the “PUMA” brand name, PUMA SE and its subsidiaries are engaged in
the development and sale of a broad range of sports and sports lifestyle
products, including footwear, apparel and accessories. The company is a
European stock corporation (Societas Europaea / SE) and parent company of
the PUMA Group; its registered office is on PUMA WAY 1, 91074 Herzogenaurach,
Germany. The competent registry court is in Fürth (Bavaria), the register
number is HRB 13085.
The consolidated financial statements of PUMA SE and its subsidiaries
(hereinafter shortly referred to as the “Group” or “PUMA”) were prepared in
accordance with the “International Financial Reporting Standards (IFRS)”
accounting standards issued by the International Accounting Standards Board
(IASB), as they are to be applied in the EU, and the supplementary accounting
principles to be applied in accordance with Section 315e (1) of the German
Commercial Code. The IASB standards and interpretations, as they are to be
applied in the EU, which are mandatory for financial years as of January 1, 2018,
have been applied.
The preparation of the consolidated financial statements was based on historical
acquisition and manufacturing costs, with the exception of the profit or loss
assessment of financial assets and liabilities at fair value.
The items contained in the financial statements of the individual Group
companies are measured based on the currency that corresponds to the
currency of the primary economic environment in which the company operates.
The consolidated financial statements are prepared in Euros (EUR or €). The
presentation of amounts in millions of Euros with one decimal place may lead
to rounding differences since the calculation of individual items is based on
figures presented in thousands.
The cost of sales method is used for the income statement.
The following new and amended standards and interpretations have been used
for the first time in the current financial year:
T�6
Standard
Title
First-time adoption in
the current financial year
IFRS 9
IFRS 15
Financial Instruments
Revenue from Contracts with Customers
and the associated Clarifications
Amendment IAS 40
Transfers of Investment Property
Amendment IFRS 2
Amendment IFRS 4
IFRIC 22
Classification and Measurement of
Share-based Payment Transactions
Applying IFRS 9 Financial Instruments with
IFRS 4 Insurance Contracts
Foreign Currency Transactions and
Advance Consideration
AIP 2014-2016
Annual Improvements to IFRS Standards
The standards and interpretations used for the first time as of January 1, 2018
had the following effects on the consolidated financial statements:
Adoption of IFRS 9-Financial Instruments
In the past financial year, PUMA adopted the new standard IFRS 9 Financial
Instruments (as amended in July 2014) and the associated amendments to other
IFRS standards. In accordance with the transition rules of IFRS 9, the previous
year’s figures were not adjusted. In relation to the accounting of hedge
relationships, PUMA made use of the elective right to continue applying the rules
of IAS 39 for hedge accounting.
137137
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The first-time adoption of IFRS 9 in the past financial year had no significant
effect on the asset, financial and earnings position of the PUMA Group.
IFRS 9 contains regulations for the recognition, measurement and derecognition
of financial instruments. Thus the accounting of financial instruments that was
previously performed under IAS 39 (Financial instruments: recognition and
measurement) was replaced in the current financial year by accounting under
IFRS 9. This includes, among other things, a new impairment model based on
expected credit defaults.
Under IFRS 9, the subsequent measurement of financial instruments is carried
out according to the classification at “amortized cost” (AC), at “fair value through
profit or loss” (FVPL) or at “fair value through other comprehensive income”
(FVOCI). The classification is based on two criteria: the Group’s business model
for asset management and the question whether the contractual cash flows of
the financial instruments represent “exclusively payments of principal and
interest” toward the outstanding principal amount. The evaluation of the Group’s
business model was carried out at the date of first-time adoption, January 1,
2018. The judgment of whether the contractual cash flows from debt instruments
consist solely of principal and interest was made based on the facts and
circumstances at the date of initial recognition of the assets.
The first-time adoption of IFRS 9 had no effect on the opening balance as of
January 1, 2018.
The following table shows an overview of the classification and measurement
of financial assets under IAS 39 in comparison to IFRS 9. There were no changes
with respect to the measurement.
T�7
Financial assets
IAS 39
Category
Measurement
Business model
Measurement
IFRS 9
Cash and Cash Equivalents
Loans and Receivables (LAR) Amortized Cost
Trade Receivables
Loans and Receivables (LAR) Amortized Cost
Other Financial Assets
Loans and Receivables (LAR) Amortized Cost
Hold
Hold
Hold
Amortized Cost
Amortized Cost
Amortized Cost
Non-Current Investments
Available for Sale (AfS)
Fair Value Through Other
Comprehensive Income
(FVOCI)
Hold and Sell
Fair Value Through Other
Comprehensive Income
(FVOCI)
138138
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The categories “Held to Maturity” (HtM) and “Assets at fair value through profit
or loss” (AFV) have not been used at PUMA so far. Accordingly, there are no
financial instruments to be assigned in the past financial year to the business
model “Sell” and measured under IFRS 9 at “fair value through profit or loss”
(FVPL).
For non-current investments (equity instruments), IFRS 9 continues to allow
measurement at fair value through other comprehensive income (FVOCI). But
if these investments are sold or written down, the unrealized gains and losses
from these investments as of this date are to be transferred in future to retained
earnings under IFRS 9 and not posted to the income statement as previously
specified in IAS 39.
The classification and measurement of financial liabilities under IFRS 9 is
carried out largely with the same specifications as under IAS 39. The Group has
so far not measured any “liabilities at fair value through profit or loss” (LFV).
Accordingly, there were no changes in relation to the classification and
measurement of the financial liabilities.
With respect to the new impairment model of IFRS 9 for the value adjustment of
debt instruments, there was no major change in the amount of the value
adjustments, since PUMA particularly holds current trade receivables. These
trade receivables do not include interest components and, in most cases, credit
insurance is in place to limit the amount of the anticipated loss. Accordingly, it
was not necessary to adjust the amount of the value adjustments in the opening
balance as of January 1, 2018.
The introduction of IFRS 9 led to changes in IFRS 7 and required additional
disclosures in the Notes to the Consolidated Financial Statements.
Adoption of IFRS 15-Revenue from Contracts with Customers
In the past financial year, PUMA adopted for the first time the new standard IFRS
15 Revenue from Contracts with Customers (as amended in April 2016). In
accordance with the transition rules of the modified retrospective approach in
IFRS 15, the previous year‘s figures were not adjusted.
IFRS 15 prescribes when and in what amount revenues are to be recognized.
The standard provides a single, principle-based, five-step model that applies to
all contracts with customers. The date of revenue recognition will be determined
by the transfer of control to the customer. In each case, a check must be carried
out as to whether the power of disposition is transferred to the customer on a
period or specific time basis.
In the course of the first-time adoption of IFRS 15, no significant changes were
identified in relation to the date and amount of revenue recognition. For revenues
from the sale of products, there were no conversion effects, since control is
generally transferred to the customer when the products are delivered and
revenues and income continue to be recognized at this point in time. There were
likewise no changes from the accounting treatment of the granting of trademark
rights, since the previous accounting approach matched the rules of IFRS 9. In
addition, PUMA has not entered into any long-term contracts and multi-
component agreements.
The changed recognition and measurement methods with respect to revenue
recognition are described in chapter 2 of the Notes in the paragraph on
“Recognition of Sales Revenues.” Apart from additional disclosures in the Notes
regarding the sales revenues, the adoption of IFRS 15 in the past financial year
had no significant effect on the asset, financial and earnings position of the
PUMA Group.
The effect of the first-time adoption of IFRS 15 in the past financial year on
individual relevant items of the financial statements is explained below.
The change in the balance-sheet presentation of refund liabilities led to a
transfer on the liabilities side of € 50.2 million from the Other Current Provisions
to the Other Current Liabilities. Moreover, this led to a rise in inventories in the
amount of € 27.2 million with no effect on income; these now also include
customers’ product refund claims. On the liabilities side, this likewise led to an
increase in the Other Current Liabilities. As a result, there was an increase of
€ 27.2 million in total assets and liabilities with the first-time adoption as of
January 1, 2018.
139139
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The first-time adoption of IFRS 15 in the past financial year led in specific cases
to a different presentation of payments to customers in the income statement.
Such payments to customers were henceforth recognized as a reduction in sales
revenues rather than as an increase in operating expenses. In total, payments
to customers amounting to € 25.3 million were thus recognized differently in
the income statement. This did not have a significant effect on the PUMA Group’s
earnings position.
In addition, due to the first-time adoption of IFRS 15, more comprehensive
disclosures in the notes to the financial statements were required in order to
provide more informative and relevant information to users of the financial
statements than previously. The required breakdown of revenues from contracts
with customers can be found in chapter 20 of the Notes to the Consolidated
Financial Statements.
The first-time adoption of the other standards and interpretations applicable as
of January 1, 2018 did not have any effect on the consolidated financial statements.
Another effect of the first-time adoption of IFRS 15 is related to the presentation
of customer bonuses, which were previously recognized under Trade Liabilities
and now are likewise assigned to the Other Current Liabilities as part of the
refund liabilities. As a result, there was a transfer of € 46.8 million with the
first-time adoption as of January 1, 2018.
The amounts of the refund claim and the refund obligation as of December
31, 2018 are indicated separately in the Notes.
There was no effect on equity in the opening balance as of January 1, 2018 due
to the first-time adoption of IFRS 15.
The effects on the relevant items of the financial statements as of January 1, 2018
are comprised as follows:
T�8 (in € million)
Effects as of
1 / 1 / 2018
Assets
Inventories
Current liabilities
Trade liabilities
Other current provisions
Other current liabilities
As previous-
ly reported
IFRS 15
Transfers
Adjusted
778.5
+27.2
805.7
646.1
86.2
145.5
-46.8
-50.2
+124.3
599.4
36.0
269.8
Shareholders’ equity
1,656.7
0.0
1,656.7
140140
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The following standards and interpretations have been released, but will only
take effect in later reporting periods and are not applied earlier by the Group:
T�9
Standard
Endorsed
IFRS 16
IFRIC 23
Amendment IFRS 9
Endorsement pending
Amendment IAS 19
Amendments to IAS 28
AIP 2015-2017
Title
Leases
Uncertainty over Income Tax Treatments
Prepayment Features with Negative Compensation
Plan Amendment, Curtailment or Settlement
Long-term Interests in Associates and Joint Ventures
Annual Improvements to IFRS Standards
Amendments to the Conceptual Framework
Revised Conceptual Framework
Amendments to IFRS 3
Definition of a Business
Amendments to IAS 1 and IAS 8
Definition of Materiality
IFRS 17
Insurance Contracts
* Adjusted by EU endorsement, if applicable
Date of first-time
adoption*
Planned adoption
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2020
1 / 1 / 2020
1 / 1 / 2020
1 / 1 / 2021
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2019
1 / 1 / 2020
1 / 1 / 2020
1 / 1 / 2020
1 / 1 / 2021
The new standard IFRS 16 Leases will mean that, in the future, all leases will
have to be capitalized in the balance sheet in form of a right of use asset and a
corresponding leasing liability. In all cases, the presentation in the income
statement is made as a financing transaction, i.e. the right of use is generally
depreciated on a straight-line basis and the lease liability is carried forward
using the effective interest method.
The new standard is to be applied for financial years beginning on or after
January 1, 2019. With regard to the first-time adoption, PUMA has decided to
apply the modified retrospective method. Thus, there was no adjustment of the
previous year’s figures. In addition, PUMA has decided to utilize the application
facilitation for short-term leases with a term of less than 12 months and leased
assets of low value.
PUMA mainly concludes leasing contracts as an operating lessee. The
application of IFRS 16 results in the following effects on the presentation of the
Group’s asset, financial and earnings position: With regard to the minimum
rental payments for operating lease agreements, which are shown under Other
Financial Obligations, the adoption of IFRS 16 will lead to an increase in non-
current assets due to the balance-sheet recognition of rights of use. Accordingly,
financial liabilities will increase as a result of the recognition of the corre-
sponding liabilities. This will therefore lead to a significant increase in balance
sheet total and a corresponding reduction in the equity ratio of the PUMA Group.
In addition, the nature of the expenses arising from these leases will change, as
IFRS 16 replaces the operating lease expenses previously recognized on a
straight-line basis with depreciation of rights of use and interest expenses for
liabilities. This will therefore have a positive effect on operating result (EBIT) in
the income statement. In addition, IFRS 16 requires the repayment share of lease
payments that are not classified as short-term or low-value leases to be shown
as part of the cash flow from financing activities, with the result that the cash
flow from operating activities will improve.
The present operating lease volume is shown in the Notes under chapter 28 (Other
Financial Obligations: Obligations from Operating Lease). It is expected that the
141141
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements conversion effect will mainly affect the properties leased by PUMA (retail, offices
and warehouses). A provisional quantitative estimate shows that in this regard as
of January 1, 2019 the Group will record a right of use on the balance sheet in the
amount of € 618 million and a corresponding lease liability. The provisional effects
on the income statement in the financial year 2019, taking into account further
lease contracts that will be entered into in 2019, show a reduction in lease
expenses by around € 153 million, an increase in amortizations by around
€ 137 million and an increase in interest expenses by around € 26 million.
Under IAS 17, all lease payments for operating leases were recognized under
Cash Flow from Operating Activities. The adoption of IFRS 16 in the financial
year 2019 will lead to an increase of around € 145 million in Cash Flow from
Operating Activities and an equivalent reduction in Cash Flow from Financing
Activities.
The company does not anticipate the remaining standards mentioned above to
have a significant impact on the consolidated financial statements.
2. SIGNIFICANT CONSOLIDATION,
ACCOUNTING AND VALUATION PRINCIPLES
Consolidation Principles
The consolidated financial statements were prepared as of December 31, 2018,
the reporting date of the annual financial statements of the PUMA SE parent
company, on the basis of uniform accounting and valuation principles according
to IFRS, as applied in the EU.
Subsidiaries are companies in which the Group has existing rights that give it
the current ability to direct the relevant activities. The main activities are those
that have a significant influence on the profitability of the company. Control is
therefore considered to exist if the Group is exposed to variable returns from its
relationship with a company and has the power to govern those returns through
its control of the relevant activities. As a rule, control is based on PUMA’s direct
or indirect majority of the voting rights. Consolidation begins at the point in time
from which control is possible. It ends when this no longer exists.
The capital consolidation of the subsidiaries acquired after January 1, 2005 is
based on the acquisition method. Upon initial consolidation, the assets, debts
and contingent liabilities that can be identified as part of a business combination
are stated at their fair value as of the acquisition date, regardless of the non-
controlling interests. At the time of the acquisition, there is a separately
exercisable right to vote on whether the interests of the non-controlling
shareholders are valued at fair value or at proportional net asset value.
The surplus of the acquisition costs arising from the purchase that exceeds the
Group’s share in the net assets stated at fair value is reported as goodwill. If the
acquisition costs are lower than the amount of the net assets stated at fair value,
the difference is reported directly in the income statement.
Based on the structure of agreements with shareholders holding non-
controlling interests in specific Group companies, PUMA is already the economic
owner when it has a majority stake. The companies are fully included in the
consolidated financial statements and, therefore, non-controlling interests are
not disclosed. The present value of the capital shares attributable to the
non-controlling shareholders and the present value of the residual purchase
prices expected due to corporate performance are included in the capital
consolidation as acquisition costs for the holdings. The costs directly attributable
to the purchase and later differences of the present values of the expected
residual purchase prices are recognized in the income statement in accordance
with IFRS 3.
With respect to the remaining controlling interests, losses attributable to
non-controlling interests are allocated to the latter even if this results in a
negative balance in non-controlling interests.
Receivables within the Group are offset against internal liabilities. As a general
rule, any set-off differences arising from exchange rate fluctuations are
recognized in the income statement to the extent that they accrued during the
reporting period. If receivables and liabilities are long-term and capital-
replacing in nature, the currency difference is recognized directly in equity and
under Other Comprehensive Income.
In the course of the expense and income consolidation, inter-company sales and
intra-group income are offset against the expenses attributable to them. Interim
profits not yet realized within the Group as well as intra-group investment
income are eliminated by crediting them in the income statement.
142142
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Group of consolidated companies
In addition to PUMA SE, the consolidated financial statements include all
subsidiaries in which PUMA SE directly or indirectly holds existing rights that
give it the current ability to direct the relevant activities. At present, control of
all Group companies is based on a direct or indirect majority of voting rights.
Associated companies are accounted for in the Group using the equity method.
The changes in the number of Group companies (including the parent company
PUMA SE) in the financial year 2018 were as follows:
T�10
As of 12 / 31 / 2017
Formation of companies
Disposal of companies
As of 12 / 31 / 2018
110
1
7
104
The addition to the group of consolidated companies relates to the formation of
PUMA Teamwear Benelux B.V., Netherlands.
The disposals in the group of consolidated companies relate to the liquidation
of the companies PUMA Sport Hrvatska d.o.o., Croatia, Liberty China Holding
Ltd, British Virgin Islands, Kalola Pty. Ltd., Australia and World Cat Vietnam Co.
Ltd, Vietnam. In addition, PUMA Vertrieb GmbH, Germany was merged and
Admiral Teamsports Ltd., Great Britain, was sold.
In addition, the shares in Wilderness Holdings Ltd., Botswana, were sold.
The changes in the group of consolidated companies did not have a significant
effect on the net assets, financial position and results of operations.
143143
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The Group companies are allocated to regions as follows:
T�11
No. Companies / Legal Entities
PARENT COMPANY
1. PUMA SE
EMEA
2. Austria PUMA Dassler Ges. m.b.H.
3. Dobotex Austria GmbH
4. PUMA Czech Republic s.r.o.
5. PUMA Denmark A / S
6. PUMA Estonia OÜ
7. PUMA Finland Oy
8. PUMA FRANCE SAS
9. Dobotex France SAS
10. PUMA International Trading GmbH
11. PUMA Europe GmbH
12. PUMA Sprint GmbH
13. PUMA Mostro GmbH
14. Dobotex Deutschland GmbH
15. PUMA United Kingdom Ltd.
16. PUMA Premier Ltd.
17. Dobotex UK Ltd.
Country
City
Shareholder
Share in
Capital
Germany
Herzogenaurach
Austria
Austria
Salzburg
Salzburg
Czech Republic
Prague
Denmark
Skanderborg
Estonia
Finland
France
France
Germany
Germany
Germany
Germany
Germany
Great Britain
Great Britain
Tallinn
Espoo
Paris
Herzogenaurach
Herzogenaurach
Herzogenaurach
Herzogenaurach
Düsseldorf
London
London
Illkirch-Graffenstaden
indirect
direct
indirect
indirect
indirect
indirect
indirect
indirect
direct
direct
direct
indirect
indirect
indirect
indirect
indirect
indirect
direct
direct
direct
indirect
indirect
indirect
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%*
100%*
100%*
100%
100%
100%
144144
Great Britain
Manchester
18. Branded Sports Merchandising UK Ltd.
Great Britain
London
19. Genesis Group International Ltd.
Great Britain
Manchester
20. Sport Equipment Hellas S. A. of Footwear, Apparel and Sportswear u.Li.
Greece
21. Sport Equipment TI Cyprus Ltd. u.Li.
22. PUMA Italia S.r.l.
23. Dobotex Italia S.r.l.
24. PUMA Sport Israel Ltd.
* Subsidiaries which are assigned to be economically 100% PUMA Group
Cyprus
Italy
Italy
Israel
Athens
Nikosia
Assago
Assago
Hertzeliya
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements T�11
No. Companies / Legal Entities
Country
City
Shareholder
Share
in Capital
EMEA
25. PUMA Malta Ltd.
26. PUMA Racing Ltd.
27. PUMA Benelux B.V.
28. PUMA Teamwear Benelux B.V.
29. PUMA International Sports Marketing B.V.
30. Brand Plus Licensing B.V.
31. Dobotex International B.V.
Malta
Malta
Netherlands
Netherlands
Netherlands
St.Julians
St.Julians
Leusden
Leusden
Leusden
Netherlands
's-Hertogenbosch
indirect
indirect
direct
indirect
direct
direct
Netherlands
's-Hertogenbosch
indirect
32. Branded Sports Merchandising B.V.
Netherlands
's-Hertogenbosch
indirect
33. Dobotex B.V.
34. Dobo Logic B.V.
Netherlands
's-Hertogenbosch
indirect
Netherlands
Tilburg
indirect
35. Dobotex Licensing Holding B.V.
Netherlands
's-Hertogenbosch
indirect
36. PUMA Norway AS
37. PUMA Polska Sp. z o.o.
38. PUMA Sports Romania Srl
39. PUMA-RUS o.o.o.
40. PUMA Slovakia s.r.o.
41. PUMA Sports Distributors (Pty) Ltd.
42. PUMA Sports South Africa (Pty) Ltd.
43. PUMA Iberia S.L.U
44. Dobotex Spain S.L.
45. Nrotert AB
46. PUMA Nordic AB
47. Nrotert Sweden AB
48. Dobotex Nordic AB
Norway
Poland
Romania
Russia
Slovakia
South Africa
South Africa
Spain
Spain
Sweden
Sweden
Sweden
Sweden
Oslo
Warsaw
Bucharest
Moscow
Bratislava
Cape Town
Cape Town
Madrid
Barcelona
Helsingborg
Helsingborg
Helsingborg
Helsingborg
indirect
indirect
indirect
indirect
indirect
indirect
indirect
direct
indirect
direct
indirect
indirect
indirect
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
145145
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements T�11
No. Companies / Legal Entities
Country
City
Shareholder
EMEA
49. Mount PUMA AG (Schweiz)
50. PUMA Retail AG
51. Dobotex Switzerland AG
52. PUMA Spor Giyim Sanayi ve Ticaret A.S.
53. PUMA Ukraine TOV
54. PUMA Middle East FZ LLC
55. PUMA UAE LLC
* Subsidiaries which are assigned to be economically 100% PUMA Group
Switzerland
Switzerland
Switzerland
Turkey
Ukraine
Oensingen
Oensingen
Oensingen
Istanbul
Kiew
United Arab Emirates
Dubai
United Arab Emirates
Dubai
direct
indirect
indirect
indirect
indirect
indirect
indirect
Share
in Capital
100%
100%
100%
100%
100%
100%
100%*
146146
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements T�11
No. Companies / Legal Entities
Country
City
Shareholder
Share
in Capital
Americas
56. Unisol S.A.
57. PUMA Sports Ltda.
58. PUMA Canada, Inc.
59. PUMA CHILE S.A.
60. PUMA SERVICIOS SPA
61. PUMA México Sport, S.A. de C.V.
62. Servicios Profesionales RDS, S.A. de C.V.
63.
Importaciones RDS, S.A. de C.V.
64. Dobotex de México, S.A. de C.V.
65.
Importationes Brand Plus Licensing, S.A. de C.V.
66. Distribuidora Deportiva PUMA S.A.C.
67. Distribuidora Deportiva PUMA Tacna S.A.C.
68. PUMA Retail Peru S.A.C.
69. PUMA Sports LA S.A.
70. PUMA Suede Holding, Inc.
71. PUMA North America, Inc.
72. Cobra Golf Incorporated
73. PUMA Accessories North America, LLC
74. PUMA North America Accessories Canada, LLC
75. Janed, LLC
76. Janed Canada, LLC
77. PUMA Kids Apparel North America, LLC
78. PUMA Kids Apparel Canada, LLC
Argentina
Buenos Aires
Brazil
Canada
Chile
Chile
Mexico
Mexico
Mexico
Mexico
Mexico
Peru
Peru
Peru
Sao Paulo
Toronto
Santiago
Santiago
Mexico City
Mexico City
Mexico City
Mexico City
Mexico City
Lima
Tacna
Lima
Uruguay
Montevideo
USA
USA
USA
USA
USA
USA
USA
USA
USA
Westford
Westford
Carlsbad
New York
New York
New York
New York
New York
New York
indirect
indirect
indirect
direct
indirect
direct
indirect
direct
indirect
indirect
indirect
indirect
indirect
direct
indirect
indirect
indirect
indirect
indirect
indirect
indirect
indirect
indirect
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
85%
85%
51%
51%
51%
51%
147147
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Country
City
Shareholder
Share
in Capital
T�11
No. Companies / Legal Entities
Asia / Pacific
79. PUMA Australia Pty. Ltd.
80. White Diamond Australia Pty. Ltd.
81. White Diamond Properties Pty. Ltd.
82. PUMA China Ltd.
83. Dobotex China Ltd.
84. Guangzhou World Cat Information Consulting Services Company Ltd.
85. World Cat Ltd.
86. Development Services Ltd.
87. PUMA International Trading Services Ltd.
88. PUMA Asia Pacific Ltd.
89. PUMA Hong Kong Ltd.
90. Dobotex Ltd.
91. PUMA Sports India Private Ltd.
92. PUMA India Corporate Services Private Ltd.
93. World Cat Sourcing India Private Ltd.
94. PT PUMA Cat Indonesia Ltd.
95. PUMA JAPAN K.K.
96. PUMA Korea Ltd.
97. Dobotex Korea Ltd.
Australia
Australia
Australia
China
China
China
Hongkong
Hongkong
Hongkong
Hongkong
Hongkong
Hongkong
India
India
India
Indonesia
Japan
Korea
Korea
Melbourne
Melbourne
Melbourne
Shanghai
Shanghai
Guangzhou
Bangalore
Bangalore
Bangalore
Jakarta
Tokyo
Seoul
Seoul
98. PUMA Sports Goods Sdn. Bhd.
Malaysia
Kuala Lumpur
99. PUMA New Zealand Ltd.
100. PUMANILA IT Services Inc.
101. PUMA Sports SEA Trading Pte. Ltd.
102. PUMA SEA Holding Pte. Ltd.
103. PUMA Taiwan Sports Ltd.
104. World Cat Vietnam Sourcing & Development Services Co. Ltd.
New Zealand
Philippines
Singapore
Singapore
Taiwan
Vietnam
Auckland
Manila
Taipei
Ho Chi Minh City
indirect
indirect
indirect
indirect
indirect
indirect
direct
direct
indirect
direct
indirect
indirect
indirect
indirect
indirect
indirect
indirect
direct
indirect
indirect
indirect
indirect
indirect
indirect
indirect
indirect
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
148148
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements PUMA Mostro GmbH, PUMA Sprint GmbH, PUMA International Trading GmbH
and PUMA Europe GmbH have made use of the exemption under Section 264 (3)
of the HGB.
Currency Conversion
As a general rule, monetary items in foreign currencies are converted in the
individual financial statements of the Group companies at the exchange rate
valid on the balance sheet date. Any resulting currency gains and losses are
immediately recognized in the income statement. Non-monetary items are
converted at historical acquisition and manufacturing costs.
The assets and liabilities of foreign subsidiaries, the functional currency of which
is not the Euro, have been converted to Euros at the average exchange rates
valid on the balance sheet date. Expenses and income have been converted at
the annual average exchange rates. Any differences resulting from the currency
conversion of net assets relative to exchange rates that had changed in
comparison with the previous year, were adjusted against equity.
The significant conversion rates per Euro are as follows:
T�12
CURRENCY
USD
CNY
JPY
GBP
2018
2017
Reporting
date
exchange
rate
1.1450
7.8751
Average
exchange
rate
1.1810
7.8081
Reporting
date
exchange
rate
1.1993
7.8044
Average ex-
change rate
1.1297
7.6290
125.8500
130.3959
135.0100
126.7112
0.8945
0.8847
0.8872
0.8767
The currency area Argentina has been in a hyperinflationary environment since
2018. The effects on the consolidated financial statements was analyzed in
accordance with IAS 29 and IAS 21.42. The application of the aforementioned
standards would have resulted in an increase of € 10.3 million in assets (mainly
property, plant and equipment and intangible assets as well as inventories), a
decrease of € 0.2 million in liabilities and an adjustment of € 10.5 million in
shareholders‘ equity. Furthermore, the operating result (EBIT) would have
decreased by € 2.2 million. The effects were deemed immaterial and did not
lead to an adjustment in the Group accounting.
Derivative Financial Instruments / Hedge Accounting
Derivative financial instruments are recognized at fair value at the time a
contract is entered into and thereafter. At the time a hedging instrument is
concluded, PUMA classifies the derivatives either as hedges of a planned trans-
action (cash flow hedge) or as hedges of the fair value of a recognized asset or
liability (fair value hedge).
At the time when the transaction is concluded, the hedging relationship between
the hedging instrument and the underlying transaction as well as the purpose
of risk management and the underlying strategy are documented. In addition,
assessments as to whether the derivatives used in the hedge accounting
compensate effectively for a change in the fair value or the cash flow of the
underlying transaction are documented at the beginning of and continuously
after the hedge accounting.
Changes in the market value of derivatives that are intended and suitable for
cash flow hedges and that prove to be effective are adjusted against equity,
taking into account deferred taxes. If there is no complete effectiveness, the
ineffective part is recognized in the income statement. The amounts recognized
in equity are recognized in the income statement during the same period in
which the hedged planned transaction affects the income statement. If, however,
a hedged future transaction results in the recognition of a non-financial asset
or a liability, gains or losses previously recorded in equity are included in the
initial valuation of the acquisition costs of the respective asset or liability.
Changes in the fair value of derivatives that qualify for and are designated as fair
value hedges are recognized directly in the consolidated income statement,
together with changes in the fair value of the underlying transaction attributable
to the hedged risk. The changes in the fair value of the derivatives and the change
in the underlying transaction attributable to the hedged risk are reported in the
consolidated income statement under the item relating to the underlying trans-
action.
The fair values of the derivative instruments used to hedge planned transactions
and to hedge the fair value of a recognized asset or liability are shown under
other current financial assets or other current financial liabilities.
149149
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Leasing
Leases are to be classified either as finance leases or operating leases. Leases
where the Company, in its capacity as the lessee, is responsible for all significant
opportunities and risks that arise from the use of the lease object are treated
as finance leases. All other leases are classified as operating leases. The lease
payments from operating leases are recorded as an expense over the term of
the contract.
Cash and Cash Equivalents
Cash and cash equivalents include cash and bank balances. To the extent that
bank deposits are not immediately required to finance current assets, they are
invested as risk-free fixed-term deposits, presently for a term of up to three
months. The total amount of cash and cash equivalents is consistent with the
cash and cash equivalents stated in the cash flow statement.
Cash and cash equivalents, which are valued at amortized cost, are subject to
the value adjustment requirements under IFRS 9 “Financial Instruments.”
PUMA monitors the credit risk of these financial instruments, taking into
consideration the economic situation, the external credit rating and / or the
premiums for credit default swaps (CDS) of other financial institutions. The
credit risk from cash and cash equivalents is classified as immaterial, due to
the relatively short terms and the investment-grade credit rating.
Inventories
Inventories are valued at acquisition or manufacturing costs or at the lower net
realizable values derived from the selling price on the balance sheet date. The
acquisition cost of merchandise is determined using an averaging method. Value
adjustments are adequately recorded, depending on age, seasonality and
realizable market prices, in a manner that is standard throughout the Group.
Trade Receivables
Trade Receivables are initially measured at the transaction price and
subsequently at amortized cost with deduction of value adjustments. The trans-
action price according to IFRS 15 “Revenue from Contracts with Customers” is
the amount of the consideration expected by the company for the delivery of
goods or the provision of services to customers, not taking into account the
amounts collected for outside third parties.
For determining the value adjustments to trade receivables, PUMA uniformly ap-
plies the simplified method in order to determine the lifetime expected credit
losses in accordance with the specifications of IFRS 9 “Financial Instruments”.
Therefore, trade receivables are classified by geographic region into suitable
groups with shared credit risk characteristics. The expected credit losses are
calculated using a matrix that presents the age structure of the receivable claims
and depicts a likelihood of loss for the individual maturity bands of the claims on
the basis of historic credit loss events and future-based factors. The percentage
rates for the loss likelihoods are checked regularly to ensure they are up to date.
If objective indications of a credit impairment are found regarding the trade re-
ceivables of a certain customer, a detailed analysis of the specific credit risk of
this customer is conducted and an individual value adjustment is recognized for
the trade receivables with respect to this customer. If a credit insurance is in place,
it is taken into account in the amount of the value adjustment.
Other assets
Other assets are initially stated at fair value, taking into account transaction
costs, and subsequently valued at amortized costs after deduction of value
adjustments.
Other Financial Assets are classified based on the business model for control
and the cash flows of the financial assets. In the Group, financial assets are held
exclusively under a business model that provides for “holding” the asset until
maturity, in order to collect the contractual cash flows. Therefore, the
subsequent valuation of the Other Financial Assets is always carried out at
amortized cost. The business model “trading” and the category “measured at
fair value through profit or loss” (FVPL) are not used.
The non-current assets contain loans and other assets. Non-interest bearing
non-current assets are discounted in principle at cash value if the resulting
effect is significant.
Non-Current Investments
The investments recognized under Non-Current Financial Assets belong to the
category “measured at fair value through other comprehensive income” (FVOCI),
since these investments are held over the long term for strategic reasons.
All purchases and disposals of non-current investments are recorded on the
trade date. Non-current investments are initially recognized at fair value plus
transaction costs. They are also recognized at fair value in subsequent periods
if this can be reliably determined. Unrealized gains and losses are recognized
in Other Comprehensive Income, taking into account deferred taxes. The gain
or loss on disposal of long-term investments is transferred to retained earnings.
The category “measured at fair value through profit or loss” (FVPL) is not used
in the Group.
Property, Plant and Equipment
Property, plant and equipment are stated at acquisition costs, net of accumulated
depreciation. The depreciation period depends on the expected useful life of the
respective item. The straight-line method of depreciation is applied. The useful
life depends on the type of the assets involved. Buildings are subject to a useful
life of between ten and fifty years, and a useful life of between three to ten years
is assumed for movable assets. The acquisition costs of property, plant and
equipment also include interest on borrowings in accordance with IAS 23,
insofar as these accrue and the effect is significant.
150150
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Repair and maintenance costs are recorded as an expense as of the date on
which they were incurred. Substantial improvements and upgrades are
capitalized to the extent that the criteria for capitalization of an asset item apply.
As a general rule, lease objects, the contractual basis of which is to be classified
as a finance lease, are shown under property, plant and equipment; initially they
are accounted for at fair value or the lower present value of the minimum lease
payments and net of accumulated depreciation in subsequent accounting
periods.
Goodwill
Goodwill resulting from a business acquisition is calculated based on the
difference between the purchase price and the fair value of the acquired asset
and liability items. Goodwill from acquisitions is largely attributable to the
intangible infrastructure acquired and the associated opportunity to make a
positive contribution to corporate value.
Goodwill amounts are allocated to the Group’s cash-generating units that are
expected to benefit from the synergy effects resulting from the business
combination.
An impairment test of goodwill per cash-generating unit (usually the countries)
is performed once a year as well as whenever there are indicators of impairment
and can result in an impairment loss. There is no reversal of an impairment loss
for goodwill. See chapter 10 for further information, in particular regarding the
assumptions used for the calculation.
Other Intangible Assets
Acquired intangible assets largely consist of concessions, intellectual property
rights and similar rights. These are measured at acquisition costs, net of
accumulated depreciation. The useful life of intangible assets is between three
and ten years. Depreciation is carried out on a straight-line basis.
If the capitalization requirements of IAS 38.57 “Intangible Assets” are met
cumulatively, expenses in the development phase for internally generated
intangible assets are capitalized at the time they arise. In subsequent periods,
internally generated intangible assets and acquired intangible assets are
measured at cost less accumulated amortization and impairment losses. In the
Group, own work capitalized is generally depreciated on a straight-line basis
over a useful life of 3 years.
The item also includes acquired trademark rights, which are assumed to have
an indefinite useful life in light of the history of the brands and due to the fact
that the brands are continued by PUMA.
Impairment of Assets
Intangible assets with an indefinite useful life are not written down according to
schedule, but are subjected to an annual impairment test. Property, plant and
equipment and other intangible assets with finite useful lives are tested for
impairment if there is any indication of impairment in the value of the asset
concerned. In order to determine whether there is a requirement to record the
impairment of an asset, the recoverable amount of the respective asset (the
higher amount of the fair value less costs to sell and value in use) is compared
with the carrying amount of the asset. If the recoverable amount is lower than
the carrying amount, the difference is recorded as an impairment loss. The test
for impairment is performed, if possible, at the level of the respective individual
asset, otherwise at the level of the cash-generating unit. Goodwill, on the other
hand, is tested for impairment only at the cash-generating unit level. If it is
determined within the scope of the impairment test that an asset needs to be
written down, then the goodwill, if any, of the cash-generating unit is written
down initially and, in a second step, the remaining amount is distributed
proportionately over the remaining assets. If the reason for the recorded
impairment no longer applies, a reversal of impairment loss is recorded to the
maximum amount of the amortized cost. There is no reversal of an impairment
loss for goodwill.
Impairment tests are performed using the discounted cash flow method. For
determining the fair value less costs to sell and value in use, the expected cash
flows are based on corporate planning data. Expected cash flows are discounted
using an interest rate in line with market conditions.
The impairment test for trademarks with an indefinite useful life is subjected to
an impairment test based on the relief-from-royalty method within the financial
year or when the occasion arises. If indications of a value impairment of a self-used
trademark should arise, the recoverability of the trademark is not only valued
individually using the relief-from-royalty method, but the recoverable amount of
the cash-generating unit to which the trademark is to be allocated is determined.
See chapter 10 for further information, in particular regarding the assumptions
used for the calculation.
Holdings in associated companies
Associated companies represent shareholdings, over which PUMA has a
significant influence, but which do not qualify as subsidiaries or joint ventures.
Significant influence is generally assumed when PUMA holds, directly or
indirectly, at least 20 percent, but less than 50 percent, of the voting rights.
Holdings in associated companies are accounted for using the equity method.
Here, the shares are initially recognized at their acquisition cost and are
subsequently adjusted for the pro rata changes in the Company’s net assets that
are attributable to PUMA. Any recognized goodwill is shown in the carrying
amount of the associated company.
151151
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Within the scope of the impairment test, the carrying amount of a company
valued at equity is compared with its recoverable amount provided that there is
an indication that the asset has decreased in value. If the recoverable amount
is lower than the carrying amount, the difference is recorded as an impairment
loss. If the reasons for the previously recorded impairment no longer apply, a
write-up is recognized in the income statement.
Financial Debt, Other Financial Liabilities and Other Liabilities
As a general rule, these items are recognized at their acquisition cost, taking
into account transaction costs and subsequently measured at amortized cost.
Non-interest or low-interest-bearing liabilities with a term of at least one year
are recognized at present value, taking into account an interest rate in line with
market conditions, and are compounded until their maturity at their repayment
amount. Liabilities from finance lease agreements are recorded as of the
beginning of the lease transaction at the amount of the present value of the
minimum lease amount, or at the lower fair value, and are adjusted by the
repayment amount of the lease installments.
The category “measured at fair value through profit or loss” (FVPL) is not used
in the Group in relation to financial liabilities.
As a general rule, current financial liabilities also include those long-term loans
that that have a maximum residual term of up to one year.
Provisions for Pensions and Similar Obligations
In addition to defined benefit plans, some companies apply defined contribution
plans, which do not result in any additional pension commitment other than the
current contributions. The pension provision under defined benefit plans is
generally calculated using the projected unit credit method. This method takes
into account not only known pension benefits and pension rights accrued as of
the reporting date, but also expected future salary and pension increases. The
defined benefit obligation (DBO) is calculated by discounting expected future
cash outflows at the rate of return on senior, fixed-rate corporate bonds. The
currencies and maturity periods of the underlying corporate bonds are
consistent with the currencies and maturity periods of the obligations to be
satisfied. In some of the plans, the obligation is accompanied by a plan asset. In
that case, the pension provision shown is reduced by the plan asset.
Revaluations, consisting of actuarial profits and losses, changes resulting from
use of the asset ceiling and return on plan assets (without interest on the net
debt) are immediately recorded under Other Comprehensive Income. The
revaluations recorded in Other Comprehensive Income are part of the retained
earnings and are no longer reclassified into calculation of profit and loss. Past
service costs are recorded as an expense if changes are made to the plan.
.
Other Provisions
Provisions are recognized if the Group, as a result of a past event, has a current
obligation and this obligation is likely to result in an outflow of resources with
economic benefits, the amount of which can be reliably estimated. The provisions
are recognized at their settlement value as determined on the basis of the best
possible assessment and are not offset by income. Provisions are discounted if
the resulting effect is significant.
Provisions for the expected expenses from warranty obligations pursuant to the
respective national sales contract laws are recognized at the time of sale of the
relevant products, according to the best estimate in relation to the expenditure
needed in order to fulfill the Group’s obligation.
Provisions are also recognized to account for onerous contracts. An onerous
contract is assumed to exist where the unavoidable costs for fulfilling the
contract exceed the economic benefit arising from this contract.
Provisions for restructuring measures are also recorded if a detailed, formal
restructuring plan has been prepared, which has created a justified expectation
that the restructuring measures will be carried out by those concerned due to
its implementation starting or its major components being announced.
Treasury shares
Treasury stock is deducted from equity at its market price as of the date of
acquisition, plus incidental acquisition costs. Pursuant to the authorization of the
Annual General Meeting, treasury stock can be repurchased for any authorized
purpose, including the flexible management of the Company’s capital
requir ements.
Management Incentive Programs
PUMA uses cash-settled share-based payments and key performance
indicator-based long-term incentive programs.
For share-based remunerations with cash compensation, a liability is recorded
for the services received, and measured with its fair value upon recognition.
Until the debt is cleared, its fair value is recalculated on every balance sheet
date and on the settlement date and all changes to the fair value are recognized
in the income statement.
During the three-year term of the respective programs, the medium-term
targets of the PUMA Group with regard to EBIT, cash flow and gross profit
margin are determined for key figure-based compensation procedures and
recognized in the income statement with their respective degree of target
achievement.
152152
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Recognition of Sales Revenues
The Group recognizes sales revenues from the sale of sporting goods. The sales
revenues are measured at fair value of the consideration to which the Group
expects to be entitled from the contract with the customer, taking into account
returns, discounts and rebates. Amounts collected on behalf of third parties are
not included in the sales revenues. The Group records sales revenues at the
time when PUMA fulfills its performance obligation to the customer and has
transferred the promised product to the customer.
The Group sells footwear, apparel and accessories both to wholesalers and
directly to customers through its own retail stores. Meanwhile, the sales-related
warranty services cannot be purchased separately and do not lead to services
that go beyond the assurance of the specifications at the time of the transfer of
risk. Accordingly, the Group records warranties in the balance sheet in
conformity with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
In the case of sales of products to wholesalers, the revenue is recorded at the
date on which the right of disposal for the products is transferred to the cus-
tomer, in other words, when the products have been shipped to the specific
location of the wholesaler (delivery). After delivery, the wholesaler bears the
inventory risk and has full right of disposal over the manner and means of
distribution and the selling price of the products. In the case of sales to end
customers in the Group’s own retail stores, the sales revenues are recorded at
the date when the right of disposal of the products is transferred to the end cus-
tomer, in other words, the date on which the end customer buys the products in
the retail shop. The payment of the purchase price is due immediately with the
purchase of the products by the customer.
Under certain conditions and according to the contractual stipulations, the cus-
tomer has the ability to exchange products or return them for a credit. The
amount of the expected returns is estimated on the basis of experience and is
deducted from sales revenues by a provision for returns. The asset value of the
right arising from the product return claim is recorded under Inventories, and
leads to a corresponding reduction of Cost of Sales.
Royalty and Commission Income
The Group records Royalty and Commission Income from the licensing of
trademark rights to third parties. Income from royalties is recognized in the
income statement in accordance with the statements to be submitted by the
license holders. In certain cases, values must be estimated in order to permit
accounting on an accrual basis. Commission income is invoiced if the underlying
purchase transaction is classified as realized.
Advertising and Promotional Expenses
Advertising expenses are recognized in the income statement as of the date of
their accrual. As a general rule, promotional expenses stretching over several
years are recognized as an expense over the contractual term on an accrual
basis. Any expenditure surplus resulting from this allocation of expenses after
the balance sheet date are recognized in the form of an impairment of assets or
a provision for anticipated losses in the financial statements.
Product Development
PUMA continuously develops new products in order to meet market requirements
and market changes. Research costs are expensed in full at the time they are
incurred. Development costs are also recognized as an expense when they do not
meet the recognition criteria of IAS 38 “Intangible Assets”.
Financial Result
The financial result includes the results from associated companies as well as
interest income from financial investments and interest expenses from loans
and in connection with financial instruments. Financial results also include
interest expenses from discounted non-current liabilities and from pension
provisions that are associated with acquisitions of business enterprises or arise
from the valuation of pension commitments.
Exchange rate effects that can be directly allocated to an underlying transaction
are shown in the respective income statement item.
Income Taxes
Current income taxes are determined in accordance with the tax regulations of
the respective countries in which the Company conducts its operations.
Deferred taxes
Deferred taxes resulting from temporary valuation differences between the IFRS
and tax balance sheets of individual Group companies and from consolidation
procedures are charged to each taxable entity and shown either as deferred tax
assets or deferred tax liabilities. Deferred tax assets may also include claims for
tax reductions that result from the expected utilization of existing losses carried
forward to subsequent years and which is sufficiently certain to materialize.
Deferred tax assets or liabilities may also result from accounting treatments that
do not affect the income statement. Deferred taxes are calculated on the basis of
the tax rates that apply to the reversal in the individual countries and that are in
force or adopted as of the balance sheet date.
Deferred tax assets are shown only to the extent that the respective tax
advantage is likely to materialize. Value adjustments are recognized on the basis
of the past earnings situation and the business expectations for the foreseeable
future, if this criterion is not fulfilled.
Assumptions and Estimates
The preparation of the consolidated financial statements requires some
assumptions and estimates that have an impact on the amount and disclosure
of the recognized assets and liabilities, income and expenses, as well as
contingent liabilities. The assumptions and estimates are based on premises,
153153
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements which in turn are based on currently available information. In individual cases,
the actual values may deviate from the assumptions and estimates made.
Consequently, future periods involve a risk of adjustment to the carrying amount
of the assets and liabilities concerned. If the actual development differs from
the expectation, the premises and, if necessary, the carrying amounts of the
relevant assets and debts are adjusted with an effect on profit or loss.
All assumptions and estimates are continuously reassessed. They are based on
historical experiences and other factors, including expectations regarding
future global and industry-related trends that appear reasonable under the
current circumstances. Assumptions and estimates are made in particular with
regard to evaluating the control of companies with non-controlling shares and
in the measurement of goodwill and brands, pension obligations, derivative
financial instruments and taxes. The most significant for ward-looking
assumptions and sources of estimation and uncertainty as of the reporting date
concerning the above-mentioned items are discussed below.
Evaluation of control of companies with non-controlling interests
The Group holds 51% of the capital of Janed LLC, Janed Canada LLC, PUMA Kids
Apparel North America LLC and PUMA Kids Apparel Canada LLC and 85% of
the capital of PUMA Accessories North America LLC and PUMA North America
Accessories Canada LLC. With regards to these companies, the profit
participation deviates from the existing capital shares in favour of the identical
non-controlling shareholder. PUMA, on the other hand, receives increased
license fees.
The contractual agreements of these companies stipulate that PUMA has the
majority of the voting rights in the general meeting and thus has the power over
these companies. PUMA is exposed to fluctuating returns from sales-related
license fees and controls the relevant activities of the companies. Accordingly,
the companies are included in the consolidated financial statements as
subsidiaries by way of full consolidation, with non-controlling interests reported.
Goodwill and Brands
A review of the impairment of goodwill is based on the calculation of the value in
use. In order to calculate the value in use, the Group must estimate the future cash
flows from those cash-generating units to which the goodwill is allocated. To this
end, the data used were from the three-year plan, which is based on forecasts of
the overall economic development and the resulting industry-specific consumer
behavior. Another key assumption concerns the determination of an appropriate
interest rate for discounting the cash flow to present value (discounted cash flow
method). Trademarks are valued using the relief-from-royalty method taking into
account an unchanged royalty rate of 8%. See chapter 10 for further information,
in particular regarding the assumptions used for the calculation.
Pension Obligations
Pension obligations are determined using an actuarial calculation. This calculation
is contingent on a large number of factors that are based on assumptions and
estimates regarding the discount rate, the expected return on plan assets, future
wage and salary increases, mortality and future pension increases. Due to the
long-term nature of the commitments made, the assumptions are subject to
significant uncertainties. Any change in these assumptions has an impact on the
carrying amount of the pension obligations. At the end of each year, the Group
determines the discount rate applied to determine the present value of future
payments. This discount rate is based on the interest rates of corporate bonds
with the highest credit rating that are denominated in the currency in which the
benefits are paid and the maturity of which corresponds to that of the pension
obligations. See chapter 15 for further information, in particular regarding the
parameters used for the calculation.
Taxes
Tax items are determined taking into account the various prevailing local tax
laws and the relevant administrative opinions and, due to their complexity, may
be subject to different interpretations by persons subject to tax on the one hand
and the tax authorities on the other hand. Differing interpretations of tax laws
may result in subsequent tax payments for past years; depending on the
management’s assessment, these differing opinions may be taken into account.
The recognition of deferred taxes, in particular with respect to tax losses carried
forward, requires that estimates and assumptions be made concerning future
tax planning strategies as well as the expected timing and amount of future
taxable income. The taxable income from the relevant corporate planning is
derived for this judgment. This takes into account the past financial position and
the business development expected in the future. Deferred tax assets on losses
carried forward are recorded in the event of companies incurring a loss only if
it is highly probable that future positive income will be achieved that can be offset
against these tax losses carried forward. Please see chapter 8 for further
information and detailed assumptions.
Derivative Financial Instruments
The assumptions used for estimating derivative financial instruments are based
on the prevailing market conditions as of the balance sheet date and thus reflect
the fair value. See chapter 25 for further information.
154154
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 3. CASH AND CASH EQUIVALENTS
As of December 31, 2018, the Group has € 463.7 million (previous year:
€ 415.0 million) in cash and cash equivalents. The average effective interest rate
of financial investments was 0.8% (previous year: 0.5%). There are no restric-
tions on disposition.
4. INVENTORIES
Inventories are allocated to the following main groups:
T�13 (in € million)
Raw materials, consumables and supplies
Finished goods and merchandise /
inventory
Footwear
Apparel
Accessories / Others
Goods in transit
Right to return goods*
TOTAL
2018
18.0
313.2
213.6
109.0
228.0
33.5
915.1
2017
12.2
296.6
191.4
100.2
178.0
-
778.5
* New line item (see chapter 1 Adoption of IFRS 15)
The table shows the carrying amounts of the inventories net of value adjustments.
Of the value adjustments of € 64.4 million (previous year: € 51.5 million), approx.
68.1% (previous year approx. 69.6%) were recognized as expense under costs of
sales in the 2018 financial year.
The amount of inventories recorded as an expense during the period is
substantially equivalent to the cost of sales shown in the consolidated income
statement.
The right to return goods represents the merchandise value of the products
when the customer’s right to return is exercised.
5. TRADE RECEIVABLES
This item consists of:
T�14 (in € million)
Trade receivables, gross
Less value adjustments
Trade receivables, net
2018
591.3
-37.7
553.7
2017
541.5
-37.8
503.7
The value adjustments to Trade Receivables relate to receivables in connection
with sales revenues from contracts with customers and developed as follows:
T�15 (in € million)
Status of value adjustments as of 1 / 1
Change in Scope
Exchange rate differences
Additions
Utilization
Releases
Status of value adjustments as of
12 / 31
2018
37.8
0.0
-0.2
9.9
-8.0
-1.7
37.7
2017
39.0
0.0
-1.7
9.7
-7.1
-2.1
37.8
155155
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements
The age structure of the trade receivables is as follows:
T�16 (in € million)
2018
Gross carrying amount–Trade receivables
Value adjustment
Net carrying amount–Trade receivables
Expected loss rate
2017
Gross carrying amount–Trade receivables
Value adjustment
Net carrying amount–Trade receivables
Expected loss rate
Total
591.3
37.7
553.7
Total
541.5
37.8
503.7
Not due
0–30 days
31–90 days
91–180 days
Over 180 days
478.9
5.7
473.3
1.2%
53.8
0.7
53.0
1.4%
22.2
3.6
18.6
16.1%
8.1
3.3
4.9
28.3
24.5
3.8
40.1%
86.4%
Not due
0 –3 0 days
31–90 days
91–180 days
Over 180 days
426.0
1.7
424.3
0.4%
51.1
0.6
50.5
1.2%
23.0
2.0
21.0
8.9%
8.0
3.5
4.5
33.4
29.9
3.5
44.3%
89.5%
With respect to the net carrying amount of trade receivables, PUMA assumes
that the debtors will satisfy their payment obligations.
156156
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 6. OTHER CURRENT FINANCIAL ASSETS
This item consists of:
8. DEFERRED TAXES
Deferred taxes relate to the items shown below:
T�17 (in € million)
T�19 (in € million)
Fair value of derivative financial
instruments
Other financial assets
TOTAL
2018
72.6
38.6
111.2
2017
23.5
43.2
66.7
The amount shown is due within one year. The fair value corresponds to the
carrying amount.
The increase of derivative financial instruments is mainly due to a higher
US-Dollar exchange rate.
7. OTHER CURRENT ASSETS
This item consists of:
T�18 (in € million)
Prepaid expense relating to the subsequent
period
Other receivables
TOTAL
2018
2017
49.7
65.5
115.2
42.8
51.3
94.1
The amount shown is due within one year. The fair value corresponds to the
carrying amount.
Tax loss carryforwards
Non-current Assets
Current Assets
Provisions and other liabilities
Deferred tax assets (before netting)
Non-current Assets
Current Assets
Provisions and other liabilities
Deferred tax liabilities (before netting)
Deferred tax assets, net
2018
76.2
41.6
46.8
63.5
228.0
53.5
8.6
6.1
68.2
159.9
2017
92.2
29.0
43.5
60.2
224.8
42.1
5.6
6.8
54.5
170.4
Of the deferred tax assets, € 105.5 million (previous year: € 97.9 million) are
current, and of the deferred tax liabilities € 11.8 million (previous year:
€ 10.7 million) are current.
As of December 31, 2018, tax losses carried forward amounted to a total of
€ 541.1 million (previous year: € 542.9 million). This results in a deferred tax
asset of € 147.6 million (previous year: € 148.2 million). Deferred tax assets were
recognized for these items in the amount at which the associated tax advantages
are likely to be realized in the form of future profits for income tax purposes.
Accordingly, deferred tax assets for tax loss carryforwards in the amount of
€ 71.4 million (previous year: €56.0 million) were not recognized; of these,
€ 71.1 million (previous year: € 54.4 million) cannot expire, but € 13.3 million
(previous year: € 13.4 million) will never be usable due to the absence of future
expectations. The remaining unrecognized deferred tax assets of € 0.3 million
(previous year: € 1.6 million) will expire within the next seven years.
Other receivables mainly include VAT receivables amounting to € 41.9 million
(previous year: € 35.9 million).
In addition, no deferred taxes were recognized for deductible temporary
differences amounting to € 4.8 million (previous year: € 13.9 million).
Deferred tax liabilities for withholding taxes from possible dividends on
retained earnings of subsidiaries that serve to cover the financing needs of the
respective company were not accumulated, since it is most likely that such
temporary differences will not be cleared in the near future.
157157
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Deferred tax assets and liabilities are netted if they relate to a taxable entity
and can in fact be netted. Accordingly, they are shown in the balance sheet as
follows:
The changes in deferred tax liabilities were as follows:
T�20 (in € million)
Deferred tax assets
Deferred tax liabilities
Deferred tax assets, net
The changes in deferred tax assets were as follows:
T�21 (in € million)
Deferred tax assets, previous year
Recognition in the income statement
Adjustment against Other Comprehensive
Income
Deferred tax assets
2018
207.6
47.7
159.9
2018
207.9
11.0
-11.4
207.6
2017
207.9
37.6
170.4
2017
229.5
-11.5
-10.0
207.9
T�22 (in € million)
Deferred tax liabilities, previous year
Recognition in the income statement
Adjustment against Other Comprehensive Income
Deferred tax liabilities
2018
37.6
8.1
2.1
47.7
2017
63.1
-19.0
-6.5
37.6
9. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at their carrying amounts consist of:
T�23 (in € million)
Land and buildings, including buildings
on third-party land
Technical equipment and machines
Other equipment, factory and office equipment
Payments on account and assets under
construction
TOTAL
2018
2017
121.4
20.8
137.3
89.7
10.1
122.0
15.2
38.3
294.6
260.1
The carrying amount of property, plant and equipment is derived from the
acquisition costs. Accumulated depreciation of property, plant and equipment
amounted to € 325.4 million (previous year: € 289.5 million).
The item Other equipment, factory and office equipment includes leased objects
(finance leasing) in the amount of € 0.2 million (previous year: € 0.2 million), and
under the item Technical equipment and machines, € 8.3 million (previous year:
€ 0.4 million) relates to finance leasing.
158158
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The changes in property, plant and equipment in the 2018 financial year are shown in
“Changes in Fixed Assets” in Appendix 1 to the notes of the consolidated financial
statements. Impairment expenses that exceed current depreciation during the
reporting year are included in the amount of € 0.6 million (previous year: € 0.0 million).
10. INTANGIBLE ASSETS
Intangible assets mainly include goodwill, intangible assets with indefinite
useful lives, assets associated with the Company’s own retail activities, and
software licenses.
Goodwill and intangible assets with indefinite useful lives are not amortized
according to schedule. Impairment tests with regard to goodwill were performed
in the past financial year using the discounted cash flow method. These were
based on data from the respective three-year plan. The recoverable amount was
determined on the basis of the value in use. This did not result in an impairment
loss.
In connection with the Golf business unit (CPG–Cobra PUMA Golf), the Cobra
brand exists as an intangible asset with an indefinite useful life of € 124.2 million
(previous year: € 118.6 million). The carrying amount of the Cobra brand is
significant in comparison to the overall carrying amount of the intangible assets
with an indefinite useful life. The latter was assigned to the North America
business segment, where the headquarters of Cobra PUMA Golf is located. The
recoverable amount of the Cobra brand (level 3) was determined using the relief
from royalty method. A discount rate of 6.1% p.a. (previous year: 7.3% p.a.), a
royalty rate of 8% (previous year: 8%) and a 2% growth rate (previous year: 3%)
were applied.
If indications of a value impairment of a self-used trademark should arise, the
trademark is not only valued individually using the relief-from-royalty method,
but the recoverable amount of the cash-generating units to which the trademark
is to be attributed is determined. There were no indications of this in 2018.
In the financial year, development costs in connection with Cobra brand golf
clubs amounting to € 1.7 million (previous year: € 1.8 million) were capitalized.
Development costs are allocated to the item Other Intangible Assets in “Changes
in Fixed Assets”. Current amortization of development costs amounted to
€ 1.1 million in the financial year (previous year: € 0.6 million).
The changes in intangible assets in the financial year are shown in “Changes in
Fixed Assets” of Appendix 1 to the notes of the consolidated financial statements.
Other intangible assets include advance payments in the amount of € 21.3 million
(previous year: € 8.7 million).
The current amortization of intangible assets in the amount of € 17.2 million
(previous year: € 14.3 million) is included in the Other operating expenses. Of
this, € 3.5 million pertains to sales and distribution expenses (previous year:
€ 2.1 million), € 1.2 million to expenses for product management / merchandising
(previous year: € 0.1 million), € 0.0 million to development expenses (previous
year: € 0.6 million) and € 12.5 million to administrative and general expenses
(previous year: € 11.5 million). As in the previous year, there were no impairment
expenses that exceed current depreciation.
Goodwill is allocated to the Group’s identifiable cash-generating units (CGUs)
according to the country where the activity is carried out. Summarized by
regions, goodwill is allocated as follows:
T�24 (in € million)
PUMA UK
Genesis
Subtotal Europe
PUMA South Africa
Subtotal EEMEA
PUMA Canada
Janed
Subtotal North America
PUMA Argentina
PUMA Chile
PUMA Mexico
Subtotal Latin America
PUMA China
PUMA Taiwan
Subtotal Greater China
PUMA Japan
Subtotal Asia / Pacific
(without Greater China)
Dobotex
TOTAL
2018
2017
1.6
6.8
8.4
2.2
2.2
9.1
1.9
11.1
15.2
0.5
10.1
25.9
2.5
12.8
15.3
43.5
43.5
139.4
245.7
1.6
6.9
8.5
2.4
2.4
9.5
1.8
11.3
14.6
0.5
9.6
24.7
2.5
12.6
15.1
40.6
40.6
139.4
241.9
159159
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements
Assumptions used in conducting the impairment test in 2018:
T�25
Europe
EEMEA*
North America*
Tax rate
(range)
WACC before
tax (range)
WACC after
tax (range)
17.0%–19.0%
7.6%–7.9%
28.0%
26.4%
15.3%
8.2%
6.7%
11.4%
6.5%
Sensitivity analyses with regard to the impairment tests carried out at the
balance sheet date show that neither an increase in discount rates of one
percentage point each nor a reduction in growth rates of one percentage point
each results in any indication of impairment. The sensitivity analysis with a one
percentage point increase in the discount rate and the sensitivity analysis with
a one percentage point reduction of the growth rate likewise do not show any
indication of impairment.
The following table contains the assumptions for the performance of the
impairment test in the previous year:
Latin America
27.0%–30.0%
10.3%–39.5%
8.0%–52.6%
T�26
Greater China
17.0%–25.0%
7.0%–9.0%
6.1%–7.2%
Asia / Pacific (without
Greater China)*
Dobotex*
30.0%
25.0%
8.3%
7.8%
6.1%
6.3%
* The information for EEMEA, North America, Asia / Pacific (without Greater China)
and Dobotex relates in each case to only one cash-generating unit (CGU)
The tax rates used for the impairment test correspond to the actual tax rates in
the respective countries. The cost of capital (WACC) was derived from observable
market data.
In addition, a growth rate of 2% (previous year: 3%) is generally assumed. A
growth rate of less than 2% (previous year: less than 3%) was only used in
justified exceptional cases. The reduction of the growth rate in the perpetual
annuity reflects a lower long-term inflation expectation.
The cash-generating unit ‘Dobotex’ includes goodwill of € 139.4 million (previous
year: € 139.4 million), which is significant in comparison to the overall carrying
amount of the goodwill. The recoverable amount was determined by a
value-in-use calculation with a discount rate of 7.8% p.a. (previous year: 7.6%
p.a.) and a growth rate of 2% (previous year: 2%).
Europe
EEMEA*
North America*
Tax rate
(range)
WACC before
tax (range)
WACC after
tax (range)
17.0%–19.3%
8.7%–8.8%
28.0%
26.4%
17.4%
8.6%
7.6%
13.3%
7.0%
Latin America
25.5%–35.0%
11.0%–26.4%
8.9%–22.7%
Greater China
17.0%–25.0%
9.0%–10.7%
7.9%–8.7%
Asia / Pacific (without
Greater China)*
Dobotex*
30.0%
25.0%
10.3%
9.6%
7.6%
7.6%
* The information for EEMEA, North America, Asia / Pacific (without Greater China)
and Dobotex relates in each case to only one cash-generating unit (CGU)
A growth rate of 3% was generally assumed, and a growth rate of under 3% has
only been used in exceptional cases where this is justified.
160160
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 11. HOLDINGS IN ASSOCIATED COMPANIES
Due to the loss of significant influence in Wilderness Holdings Ltd. in May 2018,
the valuation of the investment using the equity method was discontinued. The
investment was then sold in July 2018. The income / expenses in connection with
the end of at-equity valuation and the sale are recognized under Other operating
income and expenses.
The following overview shows the aggregated benchmark data of the associated
companies recognized at equity. The values represent the values based on the
entire company and do not relate to the shares attributable to the PUMA Group.
Due to the end of the equity method, data are no longer presented for 2018.
T�27 (in € million)
Income relating to continuing operations
Other result
Comprehensive income
2018
n / a
n / a
n / a
2017
8.3
-0.1
8.2
Dividends received amount to € 0.6 million (previous year: € 0.8 million).
The balance sheet date of Wilderness Holdings Ltd. is February 28, 2018.
12. OTHER NON-CURRENT ASSETS
Other non-current financial and non-financial assets consist of:
T�28 (in € million)
Non-current investments
Fair value of derivative financial
instruments
Other financial assets
Total of other non-current
financial assets
Other non-current non-financial assets
Other non-current assets, total
2018
36.6
3.1
25.6
65.4
9.4
74.7
2017
28.0
1.6
22.1
51.7
19.8
71.5
The non-current investments relate to the 5.0% shareholding in Borussia
Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien (BVB) with registered
office in Dortmund, Germany.
The other financial assets mainly include rental deposits of € 22.5 million
(previous year: € 19.2 million). The other non-current non-financial assets
mainly include deferrals in connection with promotional and advertising
agreements.
In the 2018 financial year, there were no indicators of impairment of other
non-current assets.
161161
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 2018
Residual term of
up to 1
year
1 to 5
years
over 5
years
20.5
170.4
705.3
3.3
41.8
6.5
94.9
Total
190.9
705.3
3.3
41.8
6.5
94.9
154.9
154.9
22.8
8.3
45.5
20.7
0.8
42.2
2.1
7.5
2.2
1,274.2
1,087.6
185.5
1.4
1.4
13. LIABILITIES
The residual terms of liabilities are as follows:
T�29 (in € million)
Financial liabilities
Trade payables
Liabilities from acquisitions
Other liabilities
Liabilities from other taxes
Liabilities relating to social security
Payables to employees
Refund liabilities *
Liabilities from market valuation of forward exchange transactions
Liabilities from finance leases
Other liabilities
TOTAL
* New line item (see chapter 1 Adoption of IFRS 15)
PUMA has confirmed credit facilities amounting to a total of € 691.9 million
(previous year: € 497.1 million). Under financial liabilities, € 1.5 million
(previous year: € 0.0 million) was utilized from credit lines granted only until
further notice. Unutilized credit lines totaled € 501.0 million as of December
31, 2018, compared to € 440.2 million the previous year.
The effective interest rate of the financial liabilities ranged between 0.1% and
8.4% (previous year: 1.0% to 14.7%).
The liabilities from refund obligations result from contracts with customers and
include obligations from customer return rights as well as obligations connected
with customer bonuses.
2017
Residual term of
up to 1
year
29.0
646.1
1 to 5
years
27.9
4.8
over 5
years
Total
56.8
646.1
4.8
35.6
7.1
96.1
75.2
0.4
32.0
35.6
7.1
96.1
72.3
0.3
29.0
2.9
0.1
1.9
954.3
915.5
37.6
1.2
1.2
162162
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The table below shows the cash flows of the original financial liabilities and of
the derivative financial instruments with a positive and negative fair value:
T�30 CASH FLOWS FROM NON-DERIVATIVE AND DERIVATIVE FINANCIAL LIABILITIES (in € million)
Carrying
amount
2018
190.9
705.3
8.3
3.3
36.4
CASHFLOW
2019
CASHFLOW
2020
CASHFLOW
2021 ET SEQ.
Interest
Repayment
Interest
Repayment
Interest
Repayment
0.8
20.5
705.3
0.8
36.4
2,461.2
2,402.0
0.7
7.1
0.8
3.3
366.5
363.0
1.4
163.3
6.6
0.0
Non-derivative financial liabilities
Financial liabilities
Trade payables
Liabilities from finance leases
Liabilities from acquisitions
Other liabilities
Derivative financial liabilities and assets
Cash-Inflow from forward exchange transactions
Cash-Outlow from forward exchange transactions
The current financial liabilities can be repaid at any time.
163163
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The following values were determined in the previous year:
T�31 CASH FLOWS FROM NON-DERIVATIVE AND DERIVATIVE FINANCIAL LIABILITIES (in € million)
Non-derivative financial liabilities
Financial liabilities
Trade payables
Liabilities from finance leases
Liabilities from acquisitions
Other liabilities
Derivative financial liabilities and assets
Cash-Inflow from forward exchange transactions
Cash-Outlow from forward exchange transactions
Carrying
amount
2017
56.8
646.1
0.4
4.8
22.4
CASHFLOW
2018
CASHFLOW
2019
CASHFLOW
2020 ET SEQ.
Interest
Repayment
Interest
Repayment
Interest
Repayment
1.3
29.0
646.1
0.3
22.3
2,152.9
2,197.0
0.3
10.1
0.1
17.7
0.1
4.8
0.1
0.0
383.0
380.6
164164
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 14. ADDITIONAL DISCLOSURES ON FINANCIAL INSTRUMENTS
T�32 (in € million)
ASSETS
Cash and cash equivalents
Trade receivables
Other current financial assets
Derivatives with hedging relationship (fair value) (current and non-current)
Derivatives without hedging relationship (fair value)
Other non-current financial assets
Non-current investments
LIABILITIES
Financial liabilities (current and non-current)
Trade payables
Liabilities from acquisitions
Liabilities from finance leases
Other financial liabilities
Derivatives with hedging relationship (fair value) (current and non-current)
Derivatives without hedging relationship (fair value)
Total financial assets at amortized cost
Total financial liabilities at amortized cost
Total financial assets at FVOCI
Measurement
categories
under IFRS 9*
Carrying
amount
2018
Fair value
2018
Carrying
amount
2017
Fair value
2017
1) AC
AC
AC
n.a.
2) FVPL
AC
3) FVOCI
2) AC
AC
AC
n.a.
AC
n.a.
2) FVPL
463.7
553.7
38.6
75.7
0.0
25.6
36.6
190.9
705.3
3.3
8.3
36.4
22.5
0.3
463.7
553.7
38.6
75.7
0.0
25.6
36.6
190.9
705.3
3,3
8,3
36.4
22.5
0.3
1,081.6
1,081.6
935.9
36.6
935.9
36.6
415.0
503.7
43.2
25.0
0.1
22.1
28.0
56.8
646.1
4.8
0.4
22.4
75.2
0.0
984.0
730.1
28.0
415.0
503.7
43.2
25.0
0.1
22.1
28.0
56.8
646.1
4.8
0.4
22.4
75.2
0.0
984.0
730.1
28.0
1) AC = at Amortised Cost
2) FVPL = Fair value through Profit or Loss
3) FVOCI = Fair value through Other Comprehensive Income
*
Financial instruments and their previous-year values were assigned to valuation categories according to the newly applicable IFRS 9. A transition of the previous-year
values from the valuation categories under IAS 39 to IFRS 9 can be found in chapter 1 (General) of the Notes to the Consolidated Financial Statements.
165165
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Financial instruments that are measured at fair value in the balance sheet were
determined using the following hierarchy:
Level 1: Use of prices quoted on active markets for identical assets or liabilities..
Level 2: Use of input factors that do not involve the quoted prices stated under
Level 1, but can be observed for the asset or liability either directly (i.e., as price)
or indirectly (i.e., derivation of prices).
Level 3: Use of factors for the valuation of the asset or liability that are based
on non-observable market data.
The fair values of derivatives with a hedging relationship at the balance sheet
date are determined on the basis of current market parameters, i.e. reference
prices observable on the market, taking into account forward premiums and
discounts. The discounted result of the comparison of the forward price on the
reporting date with the forward price on the valuation date is included in the
measurement. The fair values are also checked for the counterparty’s
non- performance risk. In doing this, PUMA calculates credit value adjustments
(CVA) or debt value adjustments (DVA) on the basis of an up / down method,
taking current market information into account. No material deviations were
found, so that no adjustments were made to the fair value determined.
Net result by measurement categories:
The fair value of the financial assets of the category “fair value through OCI”
(FVOCI) was determined on the basis of Level 1. The market values of derivative
assets or liabilities were determined on the basis of Level 2.
T�33 (in € million)
Cash and cash equivalents, trade receivables and other assets have a short
residual maturity. Accordingly, as of the reporting date, the carrying amount
approximates fair value. Receivables are stated at nominal value, taking into
account deductions for default risk.
The carrying amount of loans receivable approximates the fair value as of the
reporting date.
The fair values of other financial assets correspond to their carrying amount,
taking into account prevailing market interest rates. Other financial assets
include € 30.4 million (previous year: € 25.7 million) that were pledged as
rental deposits at usual market rates.
The current liabilities to banks can be repaid at any time. Accordingly, as of the
reporting date, the carrying amount approximates fair value. The non-current
bank liabilities consist of fixed-interest loans. The carrying amounts correspond
to the repayment amounts.
Trade payables have a short residual maturity. The carrying amounts therefore
approximate fair value.
Pursuant to the contracts entered into, purchase price liabilities associated with
acquisitions of business enterprises lead to payments. The resulting nominal
amounts were discounted at a reasonable market interest rate, depending on
the expected date of payment. As of the end of the financial year, the market
interest rate only affects one company and is 0.7% (previous year: 0.6%).
The fair values of other financial liabilities are determined based on the present
values, taking into account the prevailing interest rate parameters.
Financial Assets at amortised cost (AC)
Financial Liabilities at amortised cost (AC)
Derivatives without hedging relationship
Financial assets measured at fair value
through other comprehensive income
(FVOCI)
Total
2018
-1.0
-22.0
-0.4
9.1
-14.3
2017
-3.2
-15.3
-0.3
3.8
-15.0
The net result was determined by taking into account interests, currency
exchange effects, impairment losses as well as gains and losses from sales.
General administrative expenses include the write-downs of receivables.
15. PENSION PROVISIONS
Pension provisions result from employees’ claims for benefits, which are based
on the statutory or contractual regulations applicable in the respective country,
in the event of invalidity, death or when a certain retirement age has been
reached. Pension commitments in the PUMA Group include both benefit- and
contribution-based pension commitments and include both obligations from
current pensions and rights to pensions payable in the future. The pension
entitlements are financed by both provisions and funds.
The risks associated with the pension commitments mainly concern the
usual risks of benefit-based pension plans in relation to possible changes in
the discount rate and, to a minor degree, inflation trends and recipient
166166
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements longevity. In order to limit the risks of changed capital market conditions and
demographic developments, plans with the maximum obligations were
agreed or insured a few years ago in Germany and the UK for new hires. The
specific risk of obligations based on salary is low within the PUMA Group.
The introduction of an annual cap in 2016 for pensionable salary in the UK
plan now covers this risk for the highest obligations. The UK plan is therefore
classified as a non-salary obligation.
T�34 (in € million)
Present Value of Pension Claims 12 / 31 / 2018
Salary-based obligations
Annuity
One-off payment
Non-salary-based obligations
Annuity
One-off payment
The following values were determined in the previous year:
T�35 (in € million)
Present Value of Pension Claims 12 / 31 / 2017
Salary-based obligations
Annuity
One-off payment
Non-salary-based obligations
Annuity
One-off payment
Germany
UK
Other Companies
PUMA Group
0.0
0.0
25.7
7.1
0.0
0.0
37.6
0.0
7.3
8.1
0.0
0.0
7.3
8.1
63.3
7.1
Germany
UK
Other Companies
PUMA Group
0.0
0.0
20.3
6.8
0.0
0.0
41.5
0.0
6.5
6.2
0.0
0.0
6.5
6.2
61.8
6.8
167167
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements
The main pension arrangements are described below:
The changes in the present value of pension claims are as follows:
The general pension scheme of PUMA SE generally provides for pension
payments to a maximum amount of € 127.82 per month and per eligible
employee. It was closed for new members beginning in 1996. In addition,
PUMA SE provides individual commitments (fixed sums in different amounts)
as well as contribution-based individual commitments (in part from salary
conversion). The contribution-based commitments are insured plans. There
are no statutory minimum funding requirements. The scope of obligation for
domestic pension claims amounts to € 32.7 million at the end of 2018 (previous
year: € 27.1 million) and thus comprises 38.1% of the total obligation. The fair value
of the plan assets relative to domestic obligations amounts to € 22.3 million. The
corresponding pension provision amounts to € 10.3 million.
The defined benefit plan in the United Kingdom has not been available to new
hires since 2006. This defined benefit plan includes salary and length of
ser vice-based commitments to provide old age, invalidity and sur viving
dependents’ retirement benefits. In 2016, a growth cap of 1% p.a. was
introduced on the pensionable salary. Partial capitalization of the old-age
pension is permitted. There are statutory minimum funding requirements. The
obligations regarding pension claims under the defined benefit plan in the UK
amount to € 37.6 million at the end of 2018 (previous year: € 41.5 million) and
thus accounts for 43.9% of the total obligation. The obligation is covered by
assets amounting to € 30.5 million. The provision amounts to € 7.1 million.
T�36 (in € million)
Present Value of Pension Claims
1 / 1
Cost of the pension claims earned in the
reporting year
Past service costs
(Profits) and losses from settlements
Interest expense on pension claims
Employee contributions
Benefits paid
Effects from transfers
Actuarial gains (-) and losses
Currency exchange effects
Present Value of Pension Claims
12 / 31
2018
81.3
7.2
-0.1
0.0
1.8
0.2
-1.7
-0.1
-2.4
-0.4
2017
80.3
3.4
0.0
0.0
1.7
0.2
-2.3
0.2
-0.2
-2.0
85.8
81.3
168168
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The changes in the plan assets are as follows:
T�37 (in € million)
Plan Assets 1 / 1
Interest income on plan assets
Actuarial gains and losses (-)
Employer contributions
Employee contributions
Benefits paid
Effects from transfers
Currency exchange effects
Plan Assets 12 / 31
2018
51.6
1.2
-1.8
6.8
0.2
-0.9
0.0
-0.2
56.9
The pension provision for the Group is derived as follows::
T�38 (in € million)
Present value of pension claims from
benefit plans
Fair value of plan assets
Financing Status
Amounts not recorded due to the maximum
limit applicable to assets
Pension Provision 12 / 31
2018
85.8
-56.9
28.9
0.0
28.9
2017
48.8
1.1
1.1
3.1
0.2
-1.4
0.0
-1.4
51.6
2017
81.3
-51.6
29.7
0.0
29.7
In 2018, benefits paid amounted to € 1.7 million (previous year: € 2.3 million).
Contributions in 2019 are expected to amount to € 2.2 million. Of this, € 1.1 million
is expected to be paid directly by the employer. Contributions to external plan
assets amounted to € 6.8 million in 2018 (previous year: € 3.1 million).
Contributions in 2019 are expected to amount to €2.0 million.
The changes in pension provisions are as follows:
T�39 (in € million)
Pension Provision 1 / 1
Pension expense
Actuarial gains (-) and losses recorded in
Other Comprehensive Income
Employer contributions
Direct pension payments made by the
employer
Transfer values
Currency exchange differences
Pension Provision 12 / 31
of which assets
of which liabilities
2018
29.7
7.7
-0.6
-6.8
-0.8
-0.1
-0.2
28.9
0.0
28.9
2017
31,6
4.0
-1.3
-3.1
-0.9
0.2
-0.7
29.7
0.0
29.7
169169
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The expenses in the 2018 financial year are structured as follows:
Actuarial gains and losses recorded in Other Comprehensive Income:
T�40 (in € million)
T�41 (in € million)
Cost of the pension claims
earned in the reporting year
Past service costs
Income (-) and expenses
from plan settlements
Interest expense on pension claims
Interest income on plan assets
Administration costs
Expenses for Defined Benefit Plans
of which personnel costs
of which financial costs
2018
2017
7.2
-0.1
0.0
1.8
-1.2
0.0
7.7
7.1
0.6
3.4
0.0
0.0
1.7
-1.1
0.0
4.0
3.4
0.6
In addition to the defined benefit pension plans, PUMA also makes contributions
to defined contribution plans. Payments for the financial year 2018 amounted to
€ 12.5 million (previous year: € 11.7 million).
Revaluation of Pension Commitments
Actuarial gains (-) and losses resulting
from changes in demographic
assumptions
Actuarial gains (-) and losses resulting
from changes in financial assumptions
Actuarial gains (-) and losses due to
adjustments based on experience
Revaluation of Plan Assets
Amounts not recorded due to the maximum
limit applicable to assets
Adjustment of administration costs
Total Revaluation Amounts recorded
directly in Other Comprehensive Income
2018
-2.4
0.8
-2.5
-0.7
1.8
0.0
0.0
2017
0.0
-0.6
-0.1
0.5
-1.1
0.0
0.0
-0.6
-1.3
170170
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Plan assets investment classes:
T�42 (in € million)
Cash and cash equivalents
Equity instruments
Bonds
Investment funds
Derivatives
Real estate
Insurance
Others
Total Plan Assets
2018
1.4
0.0
0.0
17.3
5.6
3.1
24.6
4.9
56.9
Of which investment classes with a quoted market price:
T�43 (in € million)
Cash and cash equivalents
Equity instruments
Bonds
Investment funds
Derivatives
Real estate
Insurance
Others
2018
1.4
0.0
0.0
17.3
5.6
3.1
0.0
4.9
2017
0.3
0.0
1.3
18.5
7.1
3.5
16.4
4.5
51.6
2017
0.3
0.0
1.3
18.3
7.1
3.2
0.0
4.5
The plan assets are used exclusively to fulfill defined pension commitments.
Legal requirements exist in some countries for the type and amount of financial
resources that can be chosen; in other countries (for example Germany) they
can be chosen freely. In the UK, a board of trustees made up of Company
representatives and employees is in charge of asset management. Its
investment strategy is aimed at long-term profits and low volatility. It was
revised in 2017 and 2018 and the risk profile was reduced.
The following assumptions were used to determine pension obligations and
pension expenses:
T�44
Discount rate
Future pension increases
Future salary increases
2018
2.41%
2.31%
1.70%
2017
2.30%
2.42%
1.55%
The indicated values are weighted average values. A standard interest rate of
1.75% was applied for the Euro zone (previous year: 1.75%).
The following overview shows how the present value of pension claims from
benefit plans would have been affected by changes to significant actuarial
assumptions.
T�45 (in € million)
Effect on present value of pension claims if
the discount rate were 50 basis
points higher
the discount rate were 50 basis
points lower
2018
2017
-6.7
4.9
-7.4
6.0
Plan Assets with a quoted Market Price
32.3
34.7
Plan assets still do not include the Group’s own financial instruments or real
estate used by Group companies.
The weighted average duration of pension commitments is 17 years.
Salary and pension trends have only a negligible effect on the present value of
pension claims due to the structure of the benefit plans.
171171
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 16. OTHER PROVISIONS
T�46 (in € million)
Provisions for:
Warranties*
Purchasing risks
Others*
TOTAL
j
,
s
t
n
e
m
t
s
u
d
a
y
c
n
e
r
r
u
C
s
r
e
f
s
n
a
r
t
e
r
*
7
1
0
2
n
o
i
t
i
d
d
A
n
o
i
t
a
z
i
l
i
t
U
l
a
s
r
e
v
e
R
2.3
7.2
0.0
0.1
1.0
9.6
-1.2
-0.2
-7.1
-0.1
8
1
0
2
1.9
9.8
61.2
-0.3
23.9 -16.8 -13.7
54.3
70.6
-0.2
34.4 -25.1
-13.9
65.9
* Adjusted opening values related to customer return rights (see chapter 1 Adoption of
IFRS 15)
The warranty provision is determined on the basis of the historical value of sales
generated during the past six months. It is expected that the majority of these
expenses will fall due within the first six months of the next financial year. Pur-
chasing risks mainly relate to material risks and to moulds required for the
manufacturing of footwear.
The provisions for warranties and purchasing risks contain no non-current
provisions (previous year: € 0.0 million).
Other provisions comprise risks in connection with litigation in the amount of
€ 25.9 million (previous year: € 30.0 million), provisions for asset retirement
obligations, and other risks in the amount of € 28.4 million (previous year:
€ 31.2 million). Other provisions include € 26.3 million (previous year:
€ 34.6 million) in non-current provisions.
Short-term provisions are expected to be paid out in the following year, while
long-term provisions are not expected to be paid out until the end of the following
year at the earliest.
17. LIABILITIES FROM THE ACQUISITION
OF BUSINESS ENTITIES
Pursuant to the contracts entered into, purchase price liabilities associated with
acquisitions of business enterprises lead to payments. The resulting nominal
amounts were discounted at a reasonable market interest rate, depending on
the expected date of payment.
The existing purchase price liability relates to the acquisition of Genesis Group
International Ltd. and is made up as follows:
T�47 (in € million)
Due within one year
Due in more than one year
TOTAL
18. EQUITY
2018
0.0
3.3
3.3
2017
0.0
4.8
4.8
Subscribed Capital
The subscribed capital corresponds to the subscribed capital of PUMA SE. As
of the balance sheet date, the subscribed capital amounted to € 38.6 million and
is divided into 15,082,464 bearer shares. Each no-par-value share corresponds
to € 2.56 of the subscribed capital (share capital).
172172
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements
Changes in the circulating shares:
T�48
2018
2017
Circulating shares as of
1 / 1
share
14,946,356
14,939,913
Issue of Treasury Stock
share
5,114
6,443
Circulating shares as of
12 / 31
share
14,951,470
14,946,356
Capital Reserve
The capital reserve includes the premium from issuing shares, as well as
amounts from the grant, conversion and expiration of share options.
Retained Earnings and Net Profit
Retained earnings and net profit include the net income of the financial year as
well as the income of the companies included in the consolidated financial
statements achieved in the past to the extent that it was not distributed.
Reserve from the Difference Resulting from Currency Conversion
The equity item for currency conversion serves to record the differences from
the conversion of the financial statements of subsidiaries with non-Euro
accounting compared to the date of first consolidation of the subsidiaries.
Cash Flow Hedges
The “cash flow hedges” item includes the market valuation of derivative financial
instruments. The item amounting to € 34.1 million (previous year: € -44.8 million)
is offset by deferred taxes of € -1.4 million (previous year: € 3.7 million).
Treasury Stock
The resolution adopted by the Annual General Meeting on May 6, 2015 authorized
the company to purchase treasury shares up to a value of 10% of the share
capital until May 5, 2020. If purchased through the stock exchange, the purchase
price per share may not exceed or fall below 10% of the closing price for the
Company’s shares with the same attributes in the XETRA trading system (or a
comparable successor system) during the last three trading days prior to the
date of purchase.
The Company did not make use of the authorization to purchase treasury stock
during the reporting period.
As of the balance sheet date, the Company holds a total of 130,994 PUMA shares
in its own portfolio, which corresponds to 0.86% of the subscribed capital.
Authorized Capital
As of December 31, 2018, the Company’s Articles of Association provide for
authorized capital totaling € 15,000,000:
Pursuant to Section 4.2. of the Articles of Association, the Management Board
is authorized with the consent of the Supervisory Board to increase the Company’s
share capital by April 11, 2022 by up to € 15,000,000 (Authorized Capital 2017)
by issuing new no-par value bearer shares against cash and / or non-cash
contributions on one or more occasions. In case of capital increases against
contributions in cash, the new shares may be acquired by one or several banks,
designated by the Management Board, subject to the obligation to offer them to
the shareholders for subscription (indirect pre-emption right). The shareholders
shall generally be entitled to pre-emption rights. However, the Management
Board is authorized with the consent of the Supervisory Board to exclude share-
holders’ subscription rights in whole or in part in the cases specified in Section
4.2. of the Articles of Association.
The Management Board of PUMA SE did not make use of the existing authorized
capital in the current reporting period.
Conditional Capital
By resolution of the Annual General Meeting of April 12, 2018, the Management
Board was authorized until April 11, 2023, with the consent of the Supervisory
Board, through one or more issues, altogether or in parts and in various tranches
at the same time, to issue bearer or registered options and / or convertible bonds,
profit-sharing rights or participation bonds or a combination of these instruments
with or without a term limitation in a total nominal amount of up to
€ 1,000,000,000.00 (Conditional Capital 2018).
In this connection, the share capital was increased conditionally by up to
€ 7,722,219.52 by the issue of up to 3,016,492 new units of registered stock. The
conditional capital increase will be performed only insofar as use is made of
options or conversion rights or a conversion or option obligation is fulfilled or
insofar as deliveries are made and if other forms of fulfillment are not used
for servicing.
No use has been made of the authorization to date.
173173
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Dividends
The amounts eligible for distribution relate to the retained earnings of PUMA SE,
which is determined in accordance with German Commercial Law.
Capital Managements
The Group’s objective is to retain a strong equity base in order to maintain both
investor and market confidence and to strengthen future business performance.
The Management Board and the Supervisory Board will propose to the Annual
General Meeting that a dividend of € 3.50 per circulating share, or a total of
€ 52.3 million (with respect to the circulating shares as of December 31, 2018),
be distributed to the shareholders from the retained earnings of PUMA SE for
the 2018 financial year.
Proposed appropriation of the retained earnings of PUMA SE:
T�49
Retained earnings of PUMA SE as of
December 31 (in € million)
Retained earnings available for distribution
(in € million)
Dividend per share (in €)
2018
2017
144.5
268.0
144.5
3.50
268.0
12.50
Number of circulating shares (share)*
14,951,470
14,946,356
Total dividend (in € million)*
Carried forward to the new accounting
period (in € million)*
52.3
92.2
186.8
81.2
* Previous year‘s values adjusted to the outcome of the Annual General Meeting
Non-controlling interests
The non-controlling interest remaining as of the balance sheet date relates to the
company PUMA Accessories North America, LLC with € 1.3 million (previous year:
€ 4.9 million), Janed, LLC with € 14.6 million (previous year: € 21.3 million), PUMA
Kids Apparel North America, LLC with € 0.0 million (previous year: € 1.3 million),
and Janed Canada, LLC with € 3.0 million (previous year: € 2.4 million), PUMA
North America Accessories Canada, LLC with € 0.1 million (previous year:
€ 0.5 million) and PUMA Kids Apparel Canada, LLC, with € -0.2 million (previous
year: € 0.8 million); see also chapter 30.
Capital management relates to the consolidated shareholders’ equity of PUMA.
This is shown in the consolidated balance sheet as well as in the reconciliation
statement concerning “Changes in Equity.”
19. MANAGEMENT INCENTIVE PROGRAM
In order to tie the management to the company with a long-term incentive, virtual
shares with cash settlement and other long-term incentive programs are used
at PUMA.
The current programs are described below:
Explanation of “virtual shares”, termed “monetary units”
Monetary units were granted on an annual basis beginning in 2013 as part of a
management incentive program. Monetary units are based on the PUMA and
Kering share performance. Each of these monetary units entitles the holder to
a cash payment at the end of the term. This is dependent on the year-end price
determined for the PUMA share (component 1), which is weighted at 70%, and
on the year-end price determined for the Kering share (component 2), which is
weighted at 30%. Component 1 compares the success with the average virtual
stock appreciation rights of the last 30 days of the previous year. Component 2,
on the other hand, measures success by comparing the performance of the
Kering share against the average performance of a reference portfolio in the
luxury and sports sector over the same period. These monetary units are subject
to a vesting period of three years. After that, there is an exercise period of two
years (in the period in April and October) which can be freely used by participants
for the purposes of execution. The fundamental exercise condition after the
vesting period is the existence of an active employment relationship with PUMA
until the end of the vesting period.
Component 2 was transferred into Component 1 in 2018 on account of the Kering
spin-off. This relates to the programs with the issue dates of 2016 and 2017, since
they are still in the vesting period. The conversion occurred as of 1 / 1 / 2018 with
a Component 2 value of 581 EUR / monetary unit and a Component 1 value of
371 EUR / monetary unit. The monetary units of Component 2 were measured
in EUR with the value 581 EUR / monetary unit and then transferred into
converted Component 1 monetary units at the same time (371 EUR / monetary
unit). After this conversion, the converted programs and subsequent programs
will be subject only to the provisions of Component 1.
174174
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements In the financial year 2018, an expense of € 5.8 million was established for this
purpose on the basis of the employment contract commitments to the managing
directors.
T�50 VIRTUAL SHARES (MONETARY UNITS)
Issue date
Term
Vesting period
Base price component 1
Base price component 2
Reference value component 1 at the end of the financial year
Reference value component 2 at the end of the financial year
Reference value component 2 at the conversion date
Reference value component 1 at the conversion date
Participants in year of issue
Participants at the end of the financial year
Number of monetary units component 1 as of 1 / 1 / 2018
Number of monetary units component 1 exercised in the FY
Final number of monetary units component 1 as of
12 / 31 / 2018
1 / 1 / 2013
1 / 1 / 2014
1 / 1 / 2015
1 / 1 / 2016
1 / 1 / 2017
1 / 1 / 2018
5
3
224.00
152.00
N / A
N / A
N / A
N / A
4
2
0
0
0
5
3
232.00
144.00
N / A
N / A
N / A
N / A
3
3
5,250
-5,250
0
3,208
5
3
174.00
167.00
N / A
N / A
N / A
N / A
3
3
7,965
-7,965
0
3,692
5
3
200.00
166.00
444.00
N / A
581.00
371.00
3
3
6,300
0
6,300
3,393
5
3
240.00
249.00
296.00
N / A
581.00
371.00
3
3
6,519
0
6,519
2,693
5
3
Years
Years
371.00
EUR / share
N / A
EUR / share
148.00
EUR / share
N / A
EUR / share
N / A
EUR / share
N / A
EUR / share
3
3
11,744
0
11,744
N / A
Persons
Persons
Shares
Shares
Shares
Shares
Number of monetary units component 2 as of 1 / 1 / 2018
577
Conversion of monetary units component 2 to component
1 in 2018
Number of converted monetary units component 1
exercised in the FY
Final number of converted monetary units component
1 as of 12 / 31 / 2018
Number of monetary units component 2 exercised in the FY
Final number of monetary units component 2
as of 12 / 31 / 2018
Total monetary units
N / A
N / A
N / A
5,093
4,217
N / A
Shares
N / A
N / A
N / A
0
0
N / A
Shares
N / A
-577
0
0
N / A
-3,208
N / A
-3,692
0
0
0
0
5,093
N / A
N / A
11,393
4,217
N / A
N / A
10,736
N / A
N / A
N / A
11,744
Shares
Shares
Shares
Shares
175175
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Explanation of the “Game Changer 2.0-2021” program
In 2018, the long-term incentive program “Game Changer 2.0” was introduced.
Participants in this program consist mainly of top executives reporting to the
Management Board and individual key positions in the PUMA Group. The aim of
this program is to tie these employees to the company on a long-term basis and
to allow them to share in the medium-term success of the Company.
The LTIP “Game Changer 2.0” consists of two plan parts, a Performance Cash
Plan and a Performance Share Plan, each with a 50% share. The Performance
Cash Plan gives a reward for PUMA’s financial performance, while the
Performance Share Plan gives a reward for its performance in the capital
market.
The performance period of the Performance Cash Plan is three years and is based
on the medium-term objectives of the PUMA Group in terms of EBIT (70%), cash
flow (15%) and net sales (15%). Payment is made in cash and is limited to a
maximum of 200% of the granted proportionate target amount (cap).
The Performance Share Plan uses virtual shares to manage the incentive. The
term is up to five years, divided into a three-year performance period and a
subsequent, two-year exercise period, in which the virtual shares are paid out
in cash. The share price at the exercise date determines the value of a virtual
share. Payment is limited to a maximum of 200% of the granted proportionate
target amount (cap).
The program is subject to the condition that the individual participant is in an
unterminated employment relationship with a company of the PUMA Group as
of 12 / 31 / 2020.
This commitment consisting of share-based remuneration transactions with
cash compensation is recorded as personnel provisions and revalued on every
balance sheet date at fair value. Expenses are likewise recorded over the vesting
period. Based on the market price on the balance sheet date, the provision for
this program amounts to € 10.0 million at the end of the financial year (previous
year: € 12.2 million).
Explanation of the “Game Changer 2018” program
In addition, another global long-term incentive program called “Game Changer
2018” was launched in 2015. Participants in this program consist mainly of top
executives reporting to the managing directors and individual key positions in
the PUMA Group. The aim of this program is to bind this group of employees to
the company on a long-term basis and to allow them to share in the medium-term
success of the Company.
The term of the program is 3 years and is based on the medium-term objectives
of the PUMA Group in terms of EBIT (70%), cash flow (15%) and gross profit
margin (15%). For this purpose, a corresponding provision is set up each year
when the respective currency-adjusted targets are met. The resulting savings
were paid out to the participants in March 2018. The payment was subject to the
condition that the individual participant was in an unterminated employment
relationship with a company of the PUMA Group as of 12 / 31 / 2017. No further
expenses were incurred for this program in the year under review.
Explanation of the “Game Changer 2019” program
In 2016, the global “Game Changer 2019” program was launched, which is
subject to the same parameters as the “Game Changer 2018” program
(employment relationship until 12 / 31 / 2018 and payout March 2019). Provisions
of € 0.8 million were set aside for this program in the year under review.
Explanation of the “Game Changer 2020” program
In 2017, the global “Game Changer 2019” program was launched, which is
subject to the same parameters as the “Game Changer 2018” program
(employment relationship until 12 / 31 / 2019 and payout March 2020). Provisions
of € 1.2 million were set aside for this program in the year under review.
Explanation of the Momentum 2020 program
In addition, a global program called “Momentum” was launched in 2017, which is
subject to the same parameters (employment until December 31, 2019 and payout
in March 2020) as the Game Changer programs. The difference to the Game
Changer programs lies in the different participants. While the participants in the
Game Changer programs consist of top executives, the “Momentum” program
includes employees who are not part of this group. Provisions of € 0.8 million were
set aside for this program in the year under review.
176176
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Provisions totaling € 1.3 million were set aside for this program in the year under
review.
20. NET SALES
The net sales of the Group are broken down by product segments and distribution
channels as follows:
T�51 GAME CHANGER 2.0 (PERFORMANCE SHARE PLAN)
Program addendum
Issue date
Term
Vesting period
2021
1 / 1 / 2018
5
3
Years
Years
Base price at program start
371.00
EUR / share
Reference value at the end of the financial
year
444.00
EUR / share
Participants in year of issue
Participants at the end of the financial year
48
48
Number of “virtual shares” as of 1 / 1 / 2018
4,666
People
People
Shares
Number of “virtual shares” exercised in
the FY
Final number of “virtual shares” as of
12 / 31 / 2018
0
Shares
4,666
Shares
T�52 BREAKDOWN BY DISTRIBUTION CHANNELS (in € million)
Wholesale
Retail
TOTAL
2018
3,520.8
1,127.5
2017
3,175
961
4,648.3
4,135.9
T�53 BREAKDOWN BY PRODUCT SEGMENTS (in € million)
Footwear
Apparel
Accessories
TOTAL
2018
2,184.7
1,687.5
776.1
2017
1,974.5
1,441.4
719.9
4,648.3
4,135.9
21. OTHER OPERATING INCOME AND EXPENSES
According to the respective functions, other operating income and expenses
include personnel, advertising, sales and distribution expenses as well as rental
and leasing expenditure, travel costs, legal and consulting expenses and other
general expenses. Typical operating income that is associated with operating
expenses was offset. Rental and lease expenses associated with the Group’s
own retail stores include sales-dependent rental components.
177177
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Other operating income and expenses are allocated based on functional areas
as follows:
Overall, other operating expenses include personnel costs, which consist of:
T�54 (in € million)
2018
2017
Sales and distribution expenses
1,523.6
1,320.4
Product management / merchandising
Research and development
Administrative and general expenses
43.8
54.0
328.1
45.1
53.4
307.0
Other operating expenses
1,949.5
1,725.9
Other operating income
Total
Thereof scheduled depreciation
Thereof impairment expenses
21.1
0.3
1,928.4
1,725.6
81.5
0.6
70.3
0.0
Within the sales and distribution expenses, marketing / retail expenses account
for a large proportion of the operating expenses. In addition to advertising and
promotional expenses, they also include expenses associated with the Group’s
retail activities. Other sales and distribution expenses include logistic expenses
and other variable sales and distribution expenses.
In the consolidated financial statements of PUMA SE, fees of € 0.9 million (previous
year: € 0.9 million) are recorded as operating expenses for the auditor of the
consolidated financial statements. The fees break down into costs for audit
services amounting to € 0.8 million (previous year: € 0.7 million), other assurance
services amounting to € 0.1 million (previous year: € 0.2 million), in particular for
EMIR audits and the review of the combined non-financial report as well as for tax
consultancy services of € 0.0 million (previous year: € 0.0 million).
Other operating income includes mainly income from the release of provisions
in the amount of € 12.1 million (previous year: € 0.0 million) and other income in
the amount of € 9.0 million (previous year: € 0.3 million).
T�55 (in € million)
Wages and salaries
Social security contributions
Expenses from share-based remuneration
with cash compensation
Expenses for retirement pension and other
personnel expenses
TOTAL
2018
437.0
56.8
2017
428.3
57.3
5.8
8.4
54.1
553.8
55.1
549.1
In addition, cost of sales includes personnel costs in the amount of € 8.2 million
(previous year: € 12.8 million).
The average number of employees for the year was as follows:
T�56 EMPLOYEES
Marketing / retail / sales and distribution
Research & development / product
management
Administrative and general units
2018
8,851
909
2,432
2017
7,986
891
2,511
Total annual average
12,192
11,389
As of the end of the year, a total of 12,894 individuals were employed (previous
year: 11,787).
178178
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 22. FINANCIAL RESULT
This financial result consists of:
23. INCOME TAXES
T�57 (in € million)
T�58 (in € million)
Current income taxes
Germany
Other countries
Total current income taxes
Deferred taxes
TOTAL
2018
2017
16.8
69.7
86.5
-2.9
83.6
9.3
61.5
70.7
-7.5
63.3
In general, PUMA SE and its German subsidiaries are subject to corporate
income tax, plus a solidarity surcharge and trade tax. Thus, a weighted mixed
tax rate of 27.22% continued to apply for the financial year.
Result from associated companies
Interest income
Others
Financial income
Interest expense
Interest accrued on liabilities from
acquisitions
Valuation of pension plans
Expenses from currency-conversion
differences, net
Others
Financial expenses
Financial Result
2018
-1.5
4.0
7.6
11.6
-15.1
0.0
-0.6
-14.4
-3.9
-34.1
-24.0
2017
1.6
4.1
6.3
10.3
-14.3
0.0
-0.6
-6.9
-3.6
-25.3
-13.4
The result from associated companies comprises the current result from the
shareholding in Wilderness Holdings Ltd. until the end of the at-equity valuation
(see also chapter 11).
The financial income includes interest income of € 4.0 million (previous year:
€ 4.1 million), interest components (SWAP points) of € 7.3 million (previous year:
€ 6.0 million) from financial instruments in connection with currency derivatives,
and dividend income of € 0.3 million (previous year: € 0.3 million) from the
investment in Borussia Dortmund GmbH & Co. KGaA (BVB).
The financial expenses include interest expenses from financial liabilities of
€ 15.1 million (previous year: € 14.3 million) and interest components (SWAP
points) of € 3.9 million (previous year: € 3.6 million) from financial instruments
in connection with currency derivatives.
In addition, expenses from currency-conversion differences of € 14.4 million
(previous year: € 6.9 million) are included, which are to be assigned to the
financing area.
179179
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements
Reconciliation of the theoretical tax expense with the effective tax expense:
The calculation is shown in the table below:
T�59 (in € million)
T�60
2018
313.4
2017
231.2
Net Earnings € million
2018
187.4
2017
135.8
Earnings before income tax
Theoretical tax expense
Tax rate of the SE = 27.22%
(previous year: 27.22%)
Taxation difference with respect to other
countries
Other tax effects:
Income tax for previous years
Losses and temporary differences for
which no tax claims were recognized
Changes in tax rate
Non-deductible expenses for tax purposes
and non-taxable income and other effects
Effective tax expense
Effective tax rate
85.3
-7.1
0.5
16.5
0.6
-12.3
83.6
26.7%
62.9
-7.1
4.1
4.0
8.7
-9.3
63.3
27.4%
The tax effect resulting from items that are directly credited or debited to equity
is shown directly in the statement of comprehensive income.
Other effects include withholding tax expenses in the amount of € 7.5 million
(previous year: € 9.7 million).
24. EARNINGS PER SHARE
The earnings per share are determined in accordance with IAS 33 by dividing
the consolidated annual surplus (consolidated net earnings) attributable to the
shareholder of the parent company by the average number of circulating shares.
Average number of circulating shares
14,947,323
14,943,161
Diluted number of shares
14,947,323
14,943,161
Earnings per share €
Earnings per share, diluted €
12.54
12.54
9.09
9.09
25. MANAGEMENT OF THE CURRENCY RISK
In the 2018 financial year, PUMA designated “forward purchase USD” currency
derivatives as cash flow hedges in order to hedge the amount payable of
purchases denominated in USD, which is converted to Euros.
The nominal amounts of open rate-hedging transactions, which relate mainly
to cash flow hedges, refer to currency forward transactions in a total amount
of € 2,401.8 million (previous year: € 2,287.4 million). These underlying
transactions are expected to generate cash flows in 2019 and 2020. For further
information, please refer to chapter 13.
The market values of open hedging transactions on the balance sheet date consist of:
T�61 (in € million)
Currency forward contracts, assets
(see chapter 6 and 12)
Currency forward contracts, liabilities
(see chapter 13 and 14)
Net
2018
75.7
-22.8
52.9
2017
25.1
-75.2
-50.1
The changes in effective cash flow hedges are shown in the schedule of changes
in shareholders’ equity and the statement of comprehensive income.
In order to disclose market risks, IFRS 7 requires sensitivity analyses that show
the effects of hypothetical changes in relevant risk variables on earnings and
180180
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements equity. The periodic effects are determined by relating the hypothetical changes
caused by the risk variables to the balance of the financial instruments held as
of the balance sheet date. The underlying assumption is that the balance as of
the balance sheet date is representative for the entire year.
Currency risks as defined by IFRS 7 arise on account of financial instruments
being denominated in a currency that is not the functional currency and is
monetary in nature. Differences resulting from the conversion of the individual
financial statements to the Group currency are not taken into account. All
non-functional currencies in which PUMA employs financial instruments are
generally considered to be relevant risk variables.
Currency sensitivity analyses are based on the following assumptions:
Material primary monetary financial instruments (cash and cash equivalents, receiv-
ables, interest-bearing debt, liabilities from finance leases, non- interest-bearing li-
abilities) are either denominated directly in the functional currency or transferred into
the functional currency through the use of currency forward contracts.
Currency forward contracts used to hedge against payment fluctuations caused
by exchange rates are part of an effective cash-flow hedging relationship
pursuant to IAS 39. Changes in the exchange rate of the currencies underlying
these contracts have an effect on the hedge reserve in equity and the fair value
of these hedging contracts.
If, as of December 31, 2018, the USD had appreciated (devalued) against all other
currencies by 10%, the hedge reserve in equity and the fair value of the hedging
contracts would have been € 126.2 million higher (lower) (December 31, 2017:
€ 120.4 million higher (lower)).
Currency risks and other risk and opportunity categories are discussed in
greater detail in the Combined Management Report under the Risk and
Opportunity Management section as well as in chapters 2 and 13 of the Notes to
the consolidated financial statements.
26. SEGMENT REPORTING
Segment reporting is based on geographical regions in accordance with our
internal reporting structure. The geographical region forms the business
segment. Sales revenues, operating result (EBIT) and other segment information
are allocated to the corresponding geographical regions according to the
registered office of the respective Group company.
The internal management reporting includes the following reporting segments:
Europe, EEMEA (Eastern Europe, Middle East and Africa), North America, Latin
America, Greater China, Rest of Asia Pacific (excluding Greater China) and
Dobotex. These are reported as reportable business segments in accordance
with the criteria of IFRS 8.
The reconciliation includes information on assets, liabilities, expenses and
income in connection with centralized functions that do not meet the definition
of business segments in IFRS 8. Central expenses and income include in
particular global sourcing, central treasury, central marketing and other global
functions of the company headquarters.
The company’s chief operating decision-maker is defined as the entire
Management Board of PUMA SE.
With the exception of Dobotex‘s sales of products amounting to € 26.9 million
(previous year: € 22.4 million), there are no significant internal sales between
the business segments, which are therefore not included in the presentation.
The operating result (EBIT) of the business segments is defined as gross profit
less the attributable other operating expenses plus royalty and commission
income and other operating income, but not taking into account the costs of the
central departments and the central marketing expenses.
The external sales, operating result (EBIT), inventories and trade receivables of
the business segments are regularly repor ted to the chief operating
decision-maker. Investments, depreciation and long-term assets at the level of
the business segments are not regularly reported to the chief operating
decision-maker. Intangible assets are allocated to the business segments in the
manner described under chapter 10. Segment liabilities, the financial result and
income taxes are not allocated to the business segments and are therefore not
reported to the chief operating decision maker at the business segment level.
Long-term assets, investments and depreciation relate to additions and
depreciation of property, plant and equipment and intangible assets during the
past financial year. In addition, total impairment expenses in the amount of
€ 0.6 million (previous year: € 0.0 million) were recognized. These relate to the
Europe segment for € 0.6 million (previous year: € 0.0 million).
Since PUMA is only active in one business field, the sporting goods industry,
products are additionally allocated according to the footwear, apparel and
accessories product segments in accordance with the internal reporting
structure.
Further changes in segment reporting in the year under review resulted from
the fact that the previous CPG (Cobra PUMA Golf) business segment, which had
previously been allocated to central areas, no longer existed in the year under
review. The CPG business activities are now allocated to the individual regions.
The previous year‘s figures have been adjusted accordingly.
181181
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements T�62 REGIONS (in € million)
Europe
EEMEA
North America
Latin America
Greater China
Asia / Pacific (without Greater China)
Dobotex
EXTERNAL SALES
EBIT
INVESTMENTS
1-12 / 2018
1-12 / 2017
1-12 / 2018
1-12 / 2017
1-12 / 2018
1-12 / 2017
1,171.2
523.2
1,163.1
431.7
534.0
553.0
272.0
1,080.0
481.7
1,052.7
425.9
367.3
480.3
248.1
164.1
81.5
180.0
61.1
153.4
83.5
91.4
814.9
172.5
69.3
143.2
45.4
95.5
72.3
80.5
678.7
15.0
12.2
13.9
11.1
21.7
9.2
3.4
86.5
20.8
15.0
8.0
8.2
18.5
8.9
0.3
79.7
TOTAL BUSINESS SEGMENTS
4,648.3
4,135.9
Europe
EEMEA
North America
Latin America
Greater China
Asia / Pacific (without Greater China)
Dobotex
TOTAL BUSINESS SEGMENTS
DEPRECIATION
INVENTORIES
TRADE RECEIVABLES (3RD)
1-12 / 2018
1-12 / 2017
1-12 / 2018
1-12 / 2017
1-12 / 2018
1-12 / 2017
7.6
7.7
11.6
6.9
15.4
7.3
2.8
59.4
7.4
7.0
12.0
6.4
9.7
7.4
2.8
262.5
130.7
258.9
93.5
87.0
98.4
48.3
250.4
102.8
199.1
86.2
63.0
79.7
42.1
131.3
67.9
109.0
96.2
36.0
71.0
37.8
108.7
78.4
83.5
102.0
25.5
62.2
32.1
52.8
979.3
823.3
549.2
492.5
182182
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Continuation T�62 REGIONS (in € million)
Europe
EEMEA
North America
Latin America
Greater China
Asia / Pacific (without Greater China)
Dobotex
TOTAL BUSINESS SEGMENTS
LONG-TERM ASSETS
1-12 / 2018
1-12 / 2017
44.7
29.5
187.9
47.4
32.1
73.0
143.9
558.5
41.1
27.8
179.3
46.9
25.9
68.0
141.1
530.1
T�63 PRODUCT (in € million)
EXTERNAL SALES
GROSS PROFIT MARGIN
1-12 / 2018
1-12 / 2017
1-12 / 2018
1-12 / 2017
Footwear
Apparel
2,184.7
1,974.5
1,687.5
1,441.4
Accessories
776.1
719.9
45.8%
50.9%
50.3%
45.5%
49.0%
48.5%
TOTAL BUSINESS
SEGMENTS
4,648.3
4,135.9
48.4%
47.3%
183183
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements T�64 RECONCILIATIONS (in € million)
EBIT
INVESTMENTS
DEPRECIATION
1-12 / 2018
1-12 / 2017
1-12 / 2018
1-12 / 2017
1-12 / 2018
1-12 / 2017
Total business
segments
Central areas
Central expenses Marketing
Consolidation
EBIT
Financial result
EBT
814.9
-199.4
-278.2
0.0
337.4
-24.0
313.4
678.7
-205.8
-228.3
0.0
244.6
-13.4
231.2
Total business
segments
Central areas
Consolidation
TOTAL
86.5
51.8
0.0
79.7
43.3
0.0
138.2
122.9
59.4
22.8
0.0
82.1
52.8
17.6
0.0
70.3
Total business segments
Not allocated to the business segments
TOTAL
INVENTORIES
TRADE RECEIVABLES (3RD)
LONG-TERM ASSETS
1-12 / 2018
1-12 / 2017
1-12 / 2018
1-12 / 2017
1-12 / 2018
1-12 / 2017
979,3
-64,2
915,1
823,3
-44,8
778,5
549,2
4,5
553,7
492,5
11,3
503,7
558,5
173,6
732,1
530,1
142,8
673,0
27. NOTES TO THE CASH FLOW STATEMENT
The cash flow statement was prepared in accordance with IAS 7 and is structured
based on cash flows from operating, investment and financing activities. The
indirect method is used to determine the cash outflow / inflow from operating
activities. The gross cash flow, derived from earnings before income taxes and
adjusted for non-cash effective income and expense items, is determined within
the cash flow from operating activities. Cash outflow / inflow from operating
activities, reduced by investments in property, plant and equipment as well as
intangible assets is referred to as free cash flow.
Interest payments were reclassified from cash provided by operating activities
to cash used in financing activities in the year under review due to their financing
nature and in order to provide more relevant information. The previous year‘s
figures were adjusted accordingly.
The cash and cash equivalents shown in the cash flow statement comprise all
cash and cash equivalents shown in the balance sheet under “Cash and cash
equivalents“, i.e. cash on hand, cheques and short-term bank balances.
184184
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements The following table shows the cash and non-cash changes in financial liabilities
in accordance with IAS 7.44A:
T�65 TRANSFER OF FINANCIAL LIABILITIES TO THE CASH INFLOW / OUTFLOW FROM FINANCING ACTIVITIES 2018
Financial liabilities
Liabilities from finance leases
Current financial liabilities
Non-current financial liabilities
TOTAL
Non-cash changes
Cash changes
As of
1 / 1 / 2018
(in € million)
Currency
changes
Others
As of
12 / 31 / 2018
(in € million)
0.4
29.0
27.9
57.3
0.2
8.1
-2.6
5.7
9.4
0.0
0.0
9.4
-1.8
-16.6
145.2
126.9
8.3
20.5
170.4
199.2
Notes
13
13
13
T�66 TRANSFER OF FINANCIAL LIABILITIES TO THE CASH INFLOW / OUTFLOW FROM FINANCING ACTIVITIES 2017
Financial liabilities
Liabilities from finance leases
Current financial liabilities
Non-current financial liabilities
TOTAL
Non-cash changes
Cash changes
As of
1 / 1 / 2018
(in € million)
Currency
changes
Others
As of
12 / 31 / 2017
(in € million)
0.7
44.3
14.8
59.7
0.0
-3.2
-2.3
-5.6
0.0
0.0
0.0
0.0
-0.2
-12.1
15.4
3.1
0.4
29.0
27.9
57.3
Notes
13
13
13
Lease liabilities of € 8.3 million are divided into current lease liabilities
(€ 0.8 million), contained in other current financial liabilities, and non-current
lease liabilities (€ 7.5 million), which are part of other non-current financial
liabilities. Non-current financial liabilities of € 170.4 million are part of other
non-current financial liabilities.
185185
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 28. CONTINGENCIES AND CONTINGENT LIABILITIES
Contingencies
As in the previous year, there were no reportable contingencies.
Further Other Financial Obligations
Furthermore, the Company has other financial obligations associated with
license, promotional and advertising agreements, which give rise to the
following financial obligations as of the balance sheet date:
Contingent Liabilities
As in the previous year, there were no reportable contingent liabilities.
T�68 (in € million)
Under license, promotional and
advertising agreements:
2019 (2018)
2020–2023 (2019–2022)
from 2024 (from 2023)
2018
2017
227.4
867.8
5.0
181.8
542.6
367.6
TOTAL
1,100.2
1,092.0
As is customary in the industry, the promotional and advertising agreements
provide for additional payments on reaching pre-defined goals (e.g. medals,
championships). Although these are contractually agreed upon, they naturally
cannot be exactly foreseen in terms of their timing and amount.
In addition, there are other financial obligations totaling € 238.8 million, of which
€ 143.3 million relate to the years from 2020. These include service agreements
of € 124.3 million as well as other obligations of € 114.5 million.
29. OTHER FINANCIAL OBLIGATIONS
Obligations from Operating Lease
The Group rents and leases offices, warehouses, facilities and fleets of vehicles
and sales rooms for its own retail business. Rental agreements for the retail
business are concluded for terms of between five and fifteen years. The
remaining rental and lease agreements typically have residual terms of between
one and five years. Some agreements include options to renew and price
adjustment clauses.
Total expenses resulting from these agreements amounted in 2018 to
€ 174.1 million (previous year: € 163.2 million), of which € 27.7 million (previous
year: € 19.9 million) were sales-related.
As of the balance sheet date, the obligations from future minimum rental
payments for operating lease agreements are as follows:
T�67 (in € million)
Under rental and lease agreements:
2019 (2018)
2020–2023 (2019–2022)
from 2024 (from 2023)
TOTAL
2018
2017
142.8
355.7
376.7
875.2
128.1
286.6
86.8
501.4
The increase is related to the expansion of the retail store network and the
distribution centers.
186186
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 30. INFORMATION ON NON-CONTROLLING INTERESTS
The summarized financial information about subsidiaries of the Group in which
non-controlling interests exist is presented below. This financial information
relates to all companies with non-controlling interests in which the identical
non-controlling shareholder holds an interest. The financial information of Janed
LLC, including its subsidiary Janed Canada LLC, is also disclosed as a separate
note. The figures represent the amounts before intercompany eliminations.
T�69 DISCLOSURES RELATED TO NON-CONTROLLING INTERESTS (in € million)
Current Assets
Non-current Assets
Current Liabilities
Non-current Liabilities
Equity attributable to equity holders of the parent
Non-controlling interests
Sales
Net income
Profit attributable to non-controlling interests
Other comprehensive income of non-controlling interests
Total comprehensive income of non-controlling interests
Dividends paid to non-controlling interests
Net cash provided by operating activities
Net cash used in investing activities
Cash inflow / outflow from financing activities
Change in cash and cash equivalents
12 / 31 / 2018
12 / 31 / 2017
Total
thereof
Janed
41.6
3.8
21.7
0.0
23.7
18.9
24.1
3.8
6.5
0.0
21.3
17.6
Total
50.4
3.6
18.3
0.0
35.7
31.2
thereof
Janed
33.9
3.6
10.3
0.0
27.2
23.7
1-12 / 2018
1-12 / 2017
265.8
146.6
215.6
117.2
42.8
42.4
1.1
43.4
55.7
48.3
0.0
-56.1
-7.6
33.9
33.5
0.9
34.4
40.5
36.4
0.0
-40.8
-4.4
32.5
32.2
-2.9
29.2
13.4
19.6
0.0
-13.7
5.2
25.1
24.8
-2.3
22.5
11.5
14.3
0.0
-11.8
2.0
187187
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 31. MANAGEMENT BOARD (MANAGING DIRECTORS
UNTIL JULY 9, 2018) AND SUPERVISORY BOARD
(ADMINISTRATIVE BOARD UNTIL JULY 9, 2018)
Disclosures pursuant to § 314 (1) No. 6 HGB
In accordance with the Act on Disclosure of Management Board Compensation of
August 3, 2005, the disclosure of the individual earnings of the members of the
Management Board or Managing Directors may be dispensed with for a period of
5 years pursuant to Section 285 (9) (a) sentences 5-8; Section 314 (1) No. 6 (a) sen-
tences 5-8 of the HGB, if the Annual General Meeting passes a resolution in this
regard by a 75% majority.
Pursuant to the resolution of the Annual General Meeting of April 12, 2018, the
Company was authorized to refrain from disclosures pursuant to Section 285 (9)
(a) sentences 5-8 and Section 314 (1) No. 6 (a) sentences 5-8 of the HGB with re-
spect to the financial year beginning on January 1, 2018 and all subsequent
financial years ending December 31, 2022 at the latest.
The Management Board and the Supervisory Board are of the opinion that the
shareholders’ justified interest in information is sufficiently accounted for by the
disclosure of the total compensation of the Management Board members. The
Supervisory Board will ensure that individual compensation is appropriate in
accordance with its statutory duties.
Management Board (Managing Directors until July 9, 2018)
Compensation for the Management Board (managing directors of the monistic
PUMA SE until July 9, 2018), which is set by the Supervisory Board (administrative
board of the monistic PUMA SE until July 9, 2018), consists of non- performance-
based and performance-based components. The non-performance-based
components consist of a fixed salary and non-cash compensation, whereas the
performance-based components consist of bonuses and components with a
long-term incentive effect. Along with job assignments and performance of each
individual Management Board member, the criteria for calculating the total
remuneration are the economic situation, long-term strategic planning and
related targets, the long-term durability of targeted results and the company’s
long-term prospects.
A fixed salary is paid out monthly as non-performance-based basic compensation.
In addition, the Management Board members receive non-cash compensation,
such as company cars, pension contributions and insurance premiums. In
principle, these benefits are granted to all Management Board members in an
equal manner and are included in the non-performance-based compensation.
The fixed compensation for the three Management Board members amounted to
€ 2.3 million in the financial year (previous year: € 2.1 million). Non-cash
compensation totaled € 0.1 million (previous year: € 0.1 million).
The bonus component of performance-related compensation is mainly based on
the PUMA Group’s operating result (EBIT) and free cash flow and is staggered
according to the degree to which targets are met. In addition, qualitative individual
goals are set. An upper limit is also agreed. In the financial year, variable bonuses
came to € 2.7 million (previous year: € 3.9 million).
Pro-rata provisions totaling € 5.8 million (previous year: € 8.4 million) were set
up for the existing compensation program (virtual shares / monetary units) with
long-term incentives (from the years 2016 to 2018) for Management Board
members in financial year 2018 according to the vesting periods. The
performance-based program is based on the medium-term performance of the
PUMA SE share. The shares from the 2016 and 2017 programs that were based
on the medium-term performance of the Kering SA share were valued as of the
reporting date of 12 / 31 / 2017 and converted into virtual shares / monetary units
of PUMA SE. Further information on this program can be found in chapter 19 of
the Notes to the Consolidated Financial Statements.
For the financial year 2019, a new modern compensation program with a long-
term incentive for Management Board members will be introduced, which is to
be decided on by the Supervisory Board in early 2019.
Management Board members have pension commitments as part of deferred
compensation, which are paid from the aforementioned performance-based and
/ or non-performance-based remuneration for which the company has taken out
reinsurance for pension commitments. The proportion of the pension capital that
is already financed through contributions to the pension liability insurance is
deemed to be vested. During the financial year, PUMA allocated € 0.5 million for
Management Board members (previous year: € 0.4 million). The present value
of the pension benefits granted to active Management Board members in the
amount of € 10.1 million as of December 31, 2018 (previous year: € 4.5 million)
was offset against the pledged asset value of the pension liability insurance
policy, which was of an equal amount.
There were pension obligations to former members of the Management
Board and their widows / widowers amounting to € 3.2 million (previous year:
€ 3.3 million) as well as contribution-based pension commitments in connection
with deferred compensation of former members of the Management Board
and M anaging Directors amounting to € 10.6 million (previous year:
€ 10.3 million). Both items are accordingly recognized as liabilities under pension
provisions, unless they are offset against asset values of an equal amount.
Pension obligations to former members of the Management Board and their
widows /widowers amounted to € 0.2 million (previous year: € 0.2 million).
188188
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements Supervisory Board (Administrative Board until July 9, 2018)
In accordance with the Articles of Association, the Supervisory Board (Adminis-
trative Board of the monistic PUMA SE until July 9, 2018) has at least three
members; it currently consists of six members. The compensation of the Super-
visory Board is comprised of a fixed and a performance-based component. The
total fixed compensation amounted to € 0.2 million (previous year: € 0.3 million).
In conformity with § 15 of the Articles of Association, each Supervisory Board
member receives a fixed annual compensation of € 25,000.00, which is payable
at the end of the Annual General Meeting for the respective financial year.
The fixed compensation is increased by an additional fixed annual amount of
€ 25,000 for the Chairman of the Supervisory Board, € 12,500 for the Vice
Chairman of the Supervisory Board, € 10,000 for the Chairman of a committee
and € 5,000 for each member of a committee. The definitive committees here
are the Personnel Committee, the Audit Committee and the Sustainability
Committee.
In addition to the fixed compensation, each Supervisory Board member receives
annual performance-based compensation equal to € 20.00 for each € 0.01 by
which the earnings per share figure as disclosed in the consolidated financial
statement s exceeds a minimum amount of € 16.0 0 per share. The
performance-based compensation amounts to a maximum of € 10,000.00 per
year. The Chairman of the Supervisory Board receives € 40.00 for every € 0.01
in profit per share and a maximum of € 20,000.00 per year, and the Deputy
Chairman receives € 30.00 for every € 0.01 in profit per share and a maximum
of € 15,000.00 per year.
A member of the Supervisory Board who is only active for part of a financial year
receives pro rata remuneration calculated on the basis of the period of activity
determined for full months.
32. RELATED PARTY RELATIONSHIPS
In accordance with IAS 24, relationships to related companies and parties that
control or are controlled by the PUMA Group must be reported, unless such
related parties are already included as consolidated companies in the
consolidated financial statements of PUMA SE. Control is defined as the ability
to determine an entity’s financial and business policies and benefit from its
activities.
Kering S.A., Paris, holds 15.7% of the share capital of PUMA SE as of the
reporting date, according to information provided by Kering S.A. in the press
release on May 16, 2018. Kering S.A. is controlled by Artémis S.A., Paris. To-
gether, Artémis S.A. (a wholly-owned subsidiary of Financière Pinault S.C.A.)
and Kering S.A. hold 44.22% of the share capital according to a voting rights
announcement dated May 24, 2018. Consequently, all companies that are directly
or indirectly controlled by Artémis S.A. and are not included in the consolidated
financial statements of PUMA SE are considered related companies.
In addition, the disclosure obligation pursuant to IAS 24 extends to transactions
with associated companies as well as transactions with other related companies
and parties. These include non-controlling shareholders in particular.
Transactions with related companies and parties largely concern the sale of
goods and ser vices. These sales were concluded under normal market
conditions that are also customary with third parties.
189189
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements In addition, dividend payments of € 55.7 million were made to non-controlling
shareholders in the financial year 2018 (previous year: € 13.4 million).
Apart from the dividend income of € 0.6 million (previous year: € 0.8 million), there
were no other accounting transactions with associated companies.
Receivables from related companies and parties are, with one exception, not
subject to value adjustments. Only with respect to the receivables from a
non- controlling shareholder and its group of companies were gross receivables
in the amount of € 52.2 million adjusted in value for a subsidiary of PUMA SE in
Greece as of December 31, 2018 (previous year: € 52.2 million). As in the previous
year, no expenses were recorded in this respect in the financial year 2018.
As of December 31, 2018, there were no liabilities to companies included in the
Kering Group arising from financing activities (previous year: € 0.0 million).
The Management Board as well as the members of the Supervisory Board of the
PUMA Group are related parties within the meaning of IAS 24. The services and
compensation of this group of individuals is shown in chapter 31.
As part of consulting, service and employment contracts, members of the
Super visor y Board received compensation from PUMA in the amount of
€ 0.2 million (previous year: € 0.1 million).
The following overview illustrates the scope of the business relationships:
T�70 (in € million)
Companies included
in the Artémis Group
Companies included
in the Kering Group
Other related parties
and persons
TOTAL
T�71 (in € million)
Companies included
in the Artémis Group
Companies included
in the Kering Group
Other related parties
and persons
TOTAL
DELIVERIES AND
SERVICES
RENDERED
DELIVERIES AND
SERVICES
RECEIVED
2018
2017
2018
2017
0.0
2.3
0.7
2.9
0.0
3.6
0.3
3.9
0.0
2.0
19.6
21.6
0.0
5.7
16.6
22.4
NET RECEIVABLES
FROM
LIABILITIES TO
2018
2017
2018
2017
0.0
0.8
0.0
0.8
0.0
1.3
0.1
1.4
0.0
0.0
4.7
4.8
0.0
2.3
2.8
5.1
190190
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements 33. CORPORATE GOVERNANCE
In November 2018, the Management Board and the Supervisory Board submitted
the required compliance declaration with respect to the recommendations
issued by the Government Commission German Corporate Governance Code
pursuant to Section 161 of the AktG (Aktiengesetz, German Stock Corporation
Act) and published it on the Company’s website (www.puma.com). Please also
refer to the Corporate Governance Report in the Combined Management Report.
34. EVENTS AFTER THE BALANCE SHEET DATE
There were no events after the balance sheet date which may have a material
effect on the net assets, financial position and results of operations of the PUMA
Group.
Mr. Lars Radoor Sørensen has resigned as a member of the Management Board
of PUMA SE with effect from January 31, 2019. With effect from February 1, 2019,
the Supervisory Board of PUMA SE appointed Ms. Anne-Laure Descours to the
Management Board as Chief Sourcing Officer.
35. DATE OF RELEASE
The Management Board of PUMA SE released the consolidated financial state-
ments on January 30, 2019 for distribution to the Supervisory Board. The task
of the Supervisory Board is to review the consolidated financial statements and
state whether it approves them.
Herzogenaurach, January 30, 2019
The Management Board
Bjørn Gulden
Michael Lämmermann
Lars Radoor Sørensen
This is a translation of the German version.
In case of doubt, the German version shall apply.
191191
PUMA Annual Report 2018IntroductionCompany OverviewCombined Management ReportConsolidated Financial StatementsAdditional InformationNotes to the Consolidated Financial Statements APPENDIX 1 OF THE CONSOLIDATED FINANCIAL STATEMENTS
Changes in Fixed Assets
T�72 CHANGES IN FIXED ASSETS 2017
PURCHASE COSTS
ACCUMULATED DEPRECIATION
CARRYING AMOUNTS
Balance
1 / 1 / 2017
€ million
Currency
changes
and other
changes
Changes
in group of
consolidated
companies
Balance
12 / 31 / 2017
€ million
Balance
1 / 1 / 2017
€ million
Dis posals
Currency
changes
and other
changes
Changes
in group of
consolidated
companies
Additions /
retransfers 1)
Additions /
retransfers
Balance
12 / 31 / 2017
€ million
Balance
12 / 31 / 2017
€ million
Balance
12 / 31 / 2016
€ million
Dis posals
167.1
17.9
-8.4
0.4
2.0
1.9
-29.0
131.8
-58.8
0.0
-0.9
19.2
-7.5
3.4
-0.1
-5.3
-2.1
18.5
-42.1
89.7
108.4
0.6
-9.1
10.1
10.4
R
e
p
o
r
t
357.4
-21.0
62.4
-38.5
360.2
-241.3
15.1
-48.7
36.6
-238.2
122.0
116.1
17.3
559.7
-4.5
-33.6
25.6
92.0
-0.1
38.3
0.0
0.0
-68.5
549.5
-307.5
0.0
18.5
0.0
-56.1
0.0
55.7
-289.5
38.3
260.1
17.3
252.1
PROPERTY, PLANT
AND EQUIPMENT
Land, land rights
and buildings
including buildings
on third party land
Technical equipment
and machines
Other equipment,
factory and office
equipment
Payments on
account and assets
under construction
INTANGIBLE
ASSETS
Goodwill
297.1
-8.9
288.2
-46.7
0.4
-46.3
241.9
250.4
Intangible fixed
assets with an
unlimited or
indefinite useful life
Other intangible
fixed assets
152.6
-16.3
136.3
-17.7
134.7
584.4
-3.6
-28.8
31.0
31.0
0.0
0.0
-6.1
-6.1
156.0
-96.9
580.5
-161.3
0.0
2.9
3.3
-17.7
118.5
134.9
-14.3
-14.3
4.6
4.6
-103.7
-167.7
52.4
412.8
37.8
423.1
0.0
1) There was no impairment for fixed assets and intangible assets in the financial year 2017, see chapters 9 and 10.
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PUMA Annual Report 2018
T�73 CHANGES IN 2018
PURCHASE COSTS
ACCUMULATED DEPRECIATION
CARRYING AMOUNTS
Balance
1 / 1 / 2018
€ million
Currency
changes
and other
changes
Changes
in group of
consolidated
companies
Balance
12 / 31 / 2018
€ million.
Balance
1 / 1 / 2018
€ million
Dis posals
Currency
changes
and other
changes
Changes
in group of
consolidated
companies
Additions /
retransfers1)
Additions /
retransfers
Balance
12 / 31 / 2018
€ million.
Balance
12 / 31 / 2018
€ million.
Balance
12 / 31 / 2017
€ million.
Dis posals
PROPERTY, PLANT
AND EQUIPMENT
Land, land rights
and buildings
including buildings
on third party land
Technical equipment
and machines
Other equipment,
factory and office
equipment
Payments on
account and assets
under construction
INTANGIBLE
ASSETS
131.8
34.7
3.7
-1.2
169.0
-42.1
19.2
-1.4
14.4
-0.5
31.7
-9.1
0.0
0.7
-6.4
-2.9
0.9
-47.6
121.4
89.7
0.4
-10.9
20.8
10.1
360.2
4.7
67.6
-28.4
404.1
-238.2
-0.3
-55.6
27.3
-266.8
137.3
122.0
38.3
549.5
-42.5
-4.5
20.3
106.0
-1.0
15.2
15.2
38.3
0.0
-31.0
620.0
-289.5
0.4
-65.0
0.0
28.7
-325.4
294.6
260.1
Goodwill
288.2
3.9
-1.6
290.5
-46.3
-0.1
1.6
-44.8
245.7
241.9
Intangible fixed
assets with an
unlimited or
indefinite useful life
Other intangible
fixed assets
136.3
5.6
141.9
-17.7
-17.7
124.2
118.5
156.0
580.5
0.7
10.3
32.2
32.2
-5.3
-6.9
0.0
183.7
-103.7
616.1
-167.7
-0.3
-0.5
-17.2
-17.2
5.1
6.7
0.0
-116.1
67.6
52.4
-178.6
437.4
412.8
1) There was an impairment for fixed assets in the amount of € 0,6 million in the financial year 2018, see chapter 9. No impairment loss was recognized for intangible assets (see chapter 10)
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PUMA Annual Report 2018
APPENDIX 2 OF THE CONSOLIDATED FINANCIAL
STATEMENTS
BODIES
STATUS: 12 / 31 / 2018
MANAGEMENT BOARD
Bjørn Gulden
Chief Executive Officer (CEO)
Membership of other supervisory boards and controlling bodies:
• Tchibo GmbH, Hamburg
• Borussia Dortmund GmbH & Co. KGaA, Dortmund
• Salling Group A / S, Brabrand / Denmark
(previously Dansk Supermarked A / S)
• Pandora A / S, Copenhagen / Denmark
Michael Lämmermann
Chief Financial Officer (CFO)
Lars Radoor Sørensen (until January 31, 2019)
Chief Operating Officer (COO)
Membership of other supervisory boards and controlling bodies:
• Scandinavian Brake Systems A / S, Svendborg / Denmark
• Hoyer Group A / S, Copenhagen/Denmark
• Skiold A / S, Sæby / Denmark
SUPERVISORY BOARD
Jean-François Palus
(Chairman)
London, United Kingdom
Group Managing Director and member of the Administrative Board of Kering
S.A., Paris / France, responsible for Strategy, Operations and Organization
Membership of other supervisory boards and controlling bodies:
• Kering Americas, Inc., New York / USA
• Volcom, LLC., Costa Mesa / USA
• Kering Tokyo Investment Ltd., Tokyo / Japan
• Pomellato S.p.A, Milan / Italy
• Sowind Group S.A., La Chaux-de-Fonds / Switzerland
• Guccio Gucci SpA., Florence / Italy
• Gucci America, Inc., New York / USA
• Christopher Kane Ltd., London / United Kingdom
• Manufacture et fabrique de montres et chronomètres Ulysse Nardin Le
Locle S.A., Le Locle / Switzerland
• Kering Eyewear S.p.A., Padua / Italy
• Yugen Kaisha Gucci LLC, Tokyo / Japan
• Birdswan Solutions Ltd., Haywards Heath / West Sussex / United Kingdom
• Paintgate Ltd., Haywards Heath / West Sussex / United Kingdom
• Stella McCartney Ltd., Haywards Heath / West Sussex / United Kingdom
• Kering Asia Pacific Ltd., Hong-Kong / China
• Kering South East Asia PTE Ltd., Singapore
• Altuzarra LLC, New York / USA
• Tomas Maier Holding LLC, New York / USA
• Tomas Maier Distribution LLC, New York / USA
• Tomas Maier LLC, New York / USA
Thore Ohlsson
(Deputy Chairman)
Falsterbo, Sweden
President of Elimexo AB, Falsterbo / Sweden
Membership of other supervisory boards and controlling bodies:
• Docktricks AB, Uppsala / Sweden
• Elite Hotels AB, Stockholm / Sweden
• Tomas Frick AB, Vellinge / Sweden
• Tjugonde AB, Malmö / Sweden
• Dahlqvists Fastighetsförvaltning AB, Kristianstad / Sweden
• Dofab AB, Malmö / Sweden
• Orrefors Kosta Boda AB, Kosta / Sweden
Jean-Marc Duplaix
Paris, France
Chief Financial Officer (CFO) of Kering S.A., Paris / France
Membership of other supervisory boards and controlling bodies:
• Redcats S.A., Paris / France
• E_lite S.p.A., Milan / Italy
• Pomellato S.p.A., Milan / Italy
• Kering Japan Ltd., Tokyo / Japan
• Kering Tokyo Investment Ltd., Tokyo / Japan
• Kering Luxembourg S.A., Luxembourg / Luxembourg
• Qeelin Holding Luxembourg S.A., Luxembourg / Luxembourg
• E-Kering Lux S.A., Luxembourg / Luxembourg
• Luxury Fashion Luxembourg S.A., Luxembourg / Luxembourg
• Kering Spain S.L. (previously named Noga Luxe S.L.), Barcelona / Spain
• Kering Eyewear S.p.A., Padua / Italy
• GPo Holding S.A.S., Paris / France
• Design Management Srl, Florence / Italy
• Design Management 2 Srl, Florence / Italy
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PUMA Annual Report 2018
• Kering Studio S.A.S., Paris / France
• Balenciaga Asia Pacific Ltd., Hong Kong / China
• Kering Eyewear Japan Ltd., Tokyo / Japan
• Redcats Management Services S.A.S., Paris / France
• Balenciaga S.A., Paris / France
• Kering Investments Europe B.V., Amsterdam / Netherlands
• Altuzarra LLC, New York / USA
• Pomellato Japan Co. Ltd., Tokyo / Japan
• Bottega Veneta Japan Ltd., Tokyo / Japan
• Richard Ginori Asia Pacific Co. Ltd., Tokyo / Japan
• Kering Korea Ltd., Seoul / Republic of Korea
Béatrice Lazat
Paris, France
Human Resources Director, Kering S.A., Paris / France
Membership of other supervisory boards and controlling bodies:
• Castera S.A.R.L., Luxembourg / Luxembourg
• Luxury Goods Services S.A., Cadempino / Switzerland
• Augustin S.A.R.L., Paris / France
• Prodistri S.A., Paris / France
• Conseil et Assistance S.N.C., Paris / France
Martin Koeppel
(Employees’ Representative)
Weisendorf, Germany
Chairman of the Works Counsel of PUMA SE
Gernot Heinzel
(Employees’ Representative)
Hausen, Germany
Key Account Manager Shoe Chains Germany South
Member until 9 July 2018
Bernd Illig
(Employees’ Representative)
Bechhofen, Germany
Administrator IT Systems of PUMA SE
Member since 9 July 2018
SUPERVISORY BOARD COMMITTEES
Personnel Committee
• Jean-François Palus (Chairman)
• Béatrice Lazat
• Martin Koeppel
Audit Committee
• Thore Ohlsson (Chairman)
• Jean-Marc Duplaix
• Gernot Heinzel (until 9 July 2018)
• Bernd Illig (since 9 July 2018)
Sustainability Committee (until 9 July 2018)
• Jean-François Palus (Chairman)
• Béatrice Lazat
• Martin Koeppel
Nominating Committee
• Jean-François Palus (Chairman)
• Jean-Marc Duplaix
• Béatrice Lazat
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PUMA Annual Report 2018
DECLARATION BY THE
LEGAL REPRESENTATIVES
We state to the best of our knowledge that the consolidated financial statements
give a true and fair view of the net assets, financial position and results of oper-
ations of the Group in accordance with the applicable accounting principles, and
that the Group management report, which is combined with the Management
report of PUMA SE for the financial year 2018, provides a true and fair view of
the course of the development and performance of the business and the position
of the Group, together with a description of the principal risks and opportunities
associated with the expected performance of the Group.
Herzogenaurach, January 30, 2019
The Management Board
Bjørn Gulden
Michael Lämmermann
Lars Radoor Sørensen
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PUMA Annual Report 2018
INDEPENDENT
AUDITOR’S REPORT
TO PUMA SE, HERZOGENAURACH
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
AND OF THE COMBINED MANAGEMENT REPORT
Audit Opinions
We have audited the consolidated financial statements of PUMA SE, Herzogen-
aurach, and its subsidiaries (the Group), which comprise the consolidated
balance sheet as at 31 December 2018, the consolidated income statement, the
consolidated statement of comprehensive income, the consolidated statement
of changes in equity and the consolidated cash flow statement for the financial
year from 1 January to 31 December 2018 as well as the notes to the consolidated
financial statements, including a summary of significant accounting policies. In
addition, we have audited the combined management report of PUMA SE for the
financial year from 1 January to 31 December 2018. In accordance with the
German legal requirements, we have not audited the statement on corporate
governance and the corporate governance report specified in Chapter “Corpo-
rate Governance Report including the Statement on Corporate Governance
pursuant to § 289f and § 315d HGB” of the combined management report. With
the German legal requirements, we have not audited the content of those parts
of the notes to the consolidated financial statements and of the combined
management report as specified in the Chapter “Other information” of our
independent auditor´s report.
In our opinion, on the basis of the knowledge obtained in the audit
•
•
the accompanying consolidated financial statements comply, in all material
respects, with the International Financial Reporting Standards (IFRS) as
adopted by the EU, and the additional requirements of German commercial
law pursuant to Section 315e (1) German Commercial Code (HGB) and, in
compliance with these requirements, give a true and fair view of the assets,
liabilities, and financial position of the Group as at 31 December 2018, and
of its financial performance for the financial year from 1 Januar y to
31 December 2018, and
the accompanying combined management report as a whole provides an
appropriate view of the Group’s position. In all material respects, this
combined management report is consistent with the consolidated financial
statements, complies with German legal requirements and appropriately
presents the opportunities and risks of future development. Our audit
opinion on the combined management report does not cover the content of
the statement on corporate governance and the corporate governance
report specified in Chapter “Corporate Governance Report including the
Statement on Corporate Governance pursuant to § 289f and § 315d HGB” of
the combined management report.
Pursuant to Section 322 (3) Sentence 1 German Commercial Code (HGB), we
declare that our audit has not led to any reservations relating to the legal
compliance of the consolidated financial statements and of the combined
management report.
Basis for the Audit Opinions
We conducted our audit of the consolidated financial statements and of the
combined management report in accordance with Section 317 German
Commercial Code (HGB) and the EU Audit Regulation (No. 537 / 2014; referred to
subsequently as “EU Audit Regulation”) and in compliance with German Generally
Accepted Standards for Financial Statement Audits promulgated by the Institut
der Wirtschaftsprüfer (IDW). Our responsibilities under those requirements and
principles are further described in the “Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements and of the Combined Management Report”
section of our auditor’s report. We are independent of the group entities in
accordance with the requirements of European law and German commercial and
professional law, and we have fulfilled our other German professional
respon sibilities in accordance with these requirements. In addition, in accordance
with Article 10 (2) Point (f) of the EU Audit Regulation, we declare that we have not
provided non-audit services prohibited under Article 5 (1) of the EU Audit
Regulation. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinions on the consolidated financial
statements and on the combined management report.
Key Audit Matters in the Audit of the Consolidated Financial
Statements
Key audit matters are those matters that, in our professional judgment, were of
most significance in our audit of the consolidated financial statements for the
financial year from 1 January to 31 December 2018. These matters were
addressed in the context of our audit of the consolidated financial statements
as a whole and in forming our audit opinion thereon; we do not provide a sepa-
rate audit opinion on these matters.
In the following we present the key audit matters we have determined in the
course of our audit:
1. Recoverability of goodwill
2. Recoverability of the Cobra brand
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Our presentation of these key audit matters has been structured as follows:
a) Description (including reference to corresponding information in the
consolidated financial statements)
b) Auditor’s response
1. Recoverability of goodwill
a) The consolidated financial statements of PUMA SE show goodwill in the
amount of mEUR 245.7 corresponding to approximately 7.7% of the
consolidated balance sheet total or 14.3% of the group equity.
Each financial year or in case of respective signs of impairment, goodwill is
subject to impairment tests. The impairment tests are performed by PUMA SE
by applying the “discounted cash flow method”. The valuation is based on the
present values of the future cash flows. The company’s valuation model is
based on future cash flows, which are in turn based on the effective three-year
plan and valid at the date the impairment test. This detailed planning phase
is extended with the assumption of long-term growth rates. The discounting
is performed using the weighted average cost of capital (WACC). Here, the
realizable amount is determined on the basis of the value in use and a possible
need for impairment is determined by comparing the value in use with the
carrying amount.
The outcome of this valuation highly depends on the legal representatives’
assessment of future cash flows, the WACC rate applied and the long-term
growth rate and therefore involves uncertainties and discretion. Thus, the
assessment of the recoverability of the goodwill was classified as a key audit
matter within the scope of our audit.
Information on the goodwill, provided by the legal representatives, is disclosed
in Chapter 2 “Significant Consolidation, Accounting and Valuation Principles”
and in Chapter 10 “Intangible Assets” of the notes to the consolidated financial
statements.
b) Within the scope of our risk-oriented audit, we gained an understanding of the
systematic approach applied when performing the impairment test. We
satisfied ourselves, that the valuation model used adequately presents the
requirements of the relevant standards, whether the necessary input data
are completely and accurately determined and whether the calculations
within the model are performed correctly. We satisfied ourselves of the
appropriateness of the future cash flows used for the computation by
reconciling these cash flows particularly with the effective three-year plan
as well as by interviewing the legal representatives or persons appointed by
them with regard to the material assumptions underlying this plan. In addition,
we performed a critical assessment of the plan under consideration of
general and industry-specific market expectations.
Since a material portion of the value in use results from the forecasted cash
flows for the period after the three-year plan (phase of perpetuity), we in
particular critically assessed the sustainable growth rate used within the
perpetuity phase by means of general and industr y-specific market
expectations. Since relatively low changes of the discounting rate may materially
affect the amount of the realizable value, we have also checked the parameters
used when determining the WACC rate involving internal valuation experts from
the financial advisory sector and reproduced the computation scheme.
Due to the material significance and taking into account the fact that the
assess ment of the goodwill also depends on the economic framework
conditions that cannot be influenced by the Group, we performed in addition a
critical assessment of the sensitivity analyses performed by PUMA SE for the
cash-generating units (so-called CGUs) with low headroom (present values
compared to the carrying amount) in order to be able to assess a possible
impairment risk in case of change of a material valuation assumption.
2. Recoverability of the Cobra brand
a) The consolidated financial statements of PUMA SE disclose for the Cobra
brand a brand value of mEUR 124.2 corresponding to approximately 3.9% of
the consolidated balance sheet total or 7.2% of the group equity.
The Cobra brand is subject to an impairment test conducted annually or in case
of a triggering event. The impairment test is conducted by PUMA SE based on
the relief from royalty method. According to this approach, the value of the brand
results from future royalty that a company would have to pay for the use of the
brand if they had to license it. The approach uses forecasted revenue generated
with the Cobra brand based on the effective three-year plan, valid at the time
the impairment test is conducted. Subsequently, the projection period is
extended assuming long-term growth rates. The discounting is performed by
means of the weighted average cost of capital (WACC). The recoverable amount
and the need for impairment is determined by comparing the value in use with
the carrying amount. If there are indications of impairment of the brand used
by the Group, the recoverability of the brand is assessed by reference to the
recoverable amount of the cash-generating unit to which the brand is allocated.
The outcome of this valuation highly depends on the legal representatives’
assumption of future revenue to be generated with the Cobra brand, the
royalty rate and the long-term growth rate as well as the WACC rate applied
and therefore involves uncertainties and discretion. Thus, the assessment of
the recoverability of the Cobra Brand was classified as key audit matter within
the scope of our audit.
Information on the Cobra brand, provided by the legal representatives, is
disclosed in Chapter 2 “Significant Consolidation, Accounting and Valuation
Principles” and in Chapter 10 “Intangible Assets” of the notes to the consolidated
financial statements.
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b) As part of our risk-oriented audit, we first examined on the basis of the information
available to us and in discussions with the legal representatives or persons
appointed by them, that there are no indications of impairment of the brand and
that the recoverability of the brand can be assessed by use of the relief-from-
royalty method as part of the impairment test. We have followed the methodolog-
ical procedure for performing the impairment test using the relief-from-royalty
method. In this regard we examined, whether the valuation model adequately
reflects the conceptual requirements of the relevant standards, whether the
necessary input data are completely and accurately determined and whether the
calculations applied to the model are made correctly. We satisfied ourselves of
the appropriateness of the assumed future revenue underlying the computation
(Cobra branded sales) by reconciling these sales particularly with the effective
three-year plan as well as by interviewing the legal representatives or persons
appointed by them with regard to the material assumptions underlying this plan.
In addition, we performed a critical assessment of the plan taking into account
general and industry-specific market expectations.
Since a material portion of the value in use results from the forecasted revenue
for the period following the three-year plan (phase of perpetuity), we particularly
reviewed the sustainable growth rate applied to the perpetuity phase by means
of general and industry-specific market expectations. As even relatively small
changes of the expected royalty rate and the used discount rate may have a
material effect on the value in use, we also assessed the parameters involved
in the assumed royalty rate and determination of the discount rate involving
internal valuation experts from the financial advisory sector and recalculated
the computation scheme. Additionally, we reviewed the applied royalty rate
based on industry-specific average rates.
Due to the material significance and as the measurement of the brand also depends
on general economic conditions that are beyond the Group’s control, we additionally
reviewed the sensitivity analyses concerning the Cobra brand originally conducted
by PUMA SE in order to be able to determine a potential impairment risk in case a
material assumption underlying the measurement changes.
Other information
The legal representatives are responsible for the other information. The other
information comprises:
•
•
the statement on corporate governance pursuant to Section 289f German
Commercial Code (HGB) specified in Chapter “Corporate Governance Report
including the Statement on Corporate Governance pursuant to § 289f and
§ 315d HGB” of the combined management report,
the corporate governance report pursuant to No. 3.10 of the German
Corporate Governance Code specified in Chapter “Corporate Governance
Report including the Statement on Corporate Governance pursuant to
§ 289f and § 315d HGB” of the combined management report,
•
•
•
the legal representatives‘ confirmation relating to the consolidated financial
statements and to the combined management report pursuant to Section 297
(2) Sentence 4 and Section 315 (1) Sentence 5 German Commercial Code
(HGB), respectively,
the combined non-financial report which will be published after the issuance
of this auditor´s report and
the remaining parts of the Annual Report which will be published after the
issuance of this auditor´s repor t, with the exception of the audited
consolidated financial statements and combined management report and
our auditor’s report.
Our audit opinions on the consolidated financial statements and on the combined
management report do not cover the other information, and consequently we
do not express an audit opinion or any other form of assurance conclusion
thereon.
In connection with our audit, our responsibility is to read the other information
and, in so doing, to consider whether the other information
•
is materially inconsistent with the consolidated financial statements, with the
combined management report or our knowledge obtained in the audit, or
• otherwise appears to be materially misstated.
Responsibilities of the Legal representatives and the Supervisory
Board for the Consolidated Financial Statements and the
Combined Management Report
The legal representatives are responsible for the preparation of the consolidated
financial statements that comply, in all material respects, with IFRSs as adopted
by the EU and the additional requirements of German commercial law pursuant
to Section 315e (1) German Commercial Code (HGB) and that the consolidated
financial statements, in compliance with these requirements, give a true and
fair view of the assets, liabilities, financial position, and financial performance
of the Group. In addition, the legal representatives are responsible for such
internal control as they have determined necessary to enable the preparation
of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the legal representatives
are responsible for assessing the Group’s ability to continue as a going concern.
They also have the responsibility for disclosing, as applicable, matters related
to going concern. In addition, they are responsible for financial reporting based
on the going concern basis of accounting unless there is an intention to liquidate
the Group or to cease operations, or there is no realistic alternative but to do so.
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PUMA Annual Report 2018
Furthermore, the legal representatives are responsible for the preparation of
the combined management report that, as a whole, provides an appropriate view
of the Group’s position and is, in all material respects, consistent with the
consolidated financial statements, complies with German legal requirements,
and appropriately presents the opportunities and risks of future development.
In addition, the legal representatives are responsible for such arrangements
and measures (systems) as they have considered necessary to enable the
preparation of a combined management report that is in accordance with the
applicable German legal requirements, and to be able to provide sufficient
appropriate evidence for the assertions in the combined management report.
The Supervisory Board is responsible for overseeing the Group’s financial
reporting process for the preparation of the consolidated financial statements
and of the combined management report.
Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements and of the Combined Management Report
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the combined
management report as a whole provides an appropriate view of the Group’s
position and, in all material respects, is consistent with the consolidated
financial statements and the knowledge obtained in the audit, complies with
the German legal requirements and appropriately presents the opportunities
and risks of future development, as well as to issue an auditor’s report that
includes our audit opinions on the consolidated financial statements and on
the combined management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with Section 317 German Commercial Code
(HGB) and the EU Audit Regulation and in compliance with German Generally
Accepted Standards for Financial Statement Audits promulgated by the Institut
der Wirtschaftsprüfer (IDW) will always detect a material misstatement.
Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated
financial statements and this combined management report.
We exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated
financial statements and of the combined management report, whether due
to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our audit opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit of the
consolidated financial statements and of arrangements and measures
relevant to the audit of the combined management report in order to design
audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an audit opinion on the effectiveness of these systems.
• Evaluate the appropriateness of accounting policies used by the legal
representatives and the reasonableness of estimates made by the legal
representatives and related disclosures.
• Conclude on the appropriateness of the legal representatives’ use of the
going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required
to draw attention in the auditor’s report to the related disclosures in the
consolidated financial statements and in the combined management report
or, if such disclosures are inadequate, to modify our respective audit opin-
ions. Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or conditions may cause the
Group to cease to be able to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated
financial statements, including the disclosures, and whether the consolidated
financial statements present the underlying transactions and events in a
manner that the consolidated financial statements give a true and fair view
of the assets, liabilities, financial position and financial performance of the
Group in compliance with IFRSs as adopted by the EU and with the additional
requirements of German commercial law pursuant to Section 315e (1)
German Commercial Code HGB).
• Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the Group to
express audit opinions on the consolidated financial statements and on
the combined management report. We are responsible for the direction,
super vision and per formance of the group audit. We remain solely
responsible for our audit opinions.
• Evaluate the consistency of the combined management report with the
consolidated financial statements, its conformity with German law, and the
view of the Group’s position it provides.
• Perform audit procedures on the prospective information presented by the
executive directors in the combined management report. On the basis of
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PUMA Annual Report 2018
GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE ENGAGEMENT
The German Public Auditor responsible for the engagement is Stefan Otto.
Munich, 30 January 2019
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
Christof Stadter
Wirtschaftsprüfer
[German Public Auditor]
Stefan Otto
Wirtschaftsprüfer
[German Public Auditor]
sufficient appropriate audit evidence we evaluate, in particular, the
significant assumptions used by the executive directors as a basis for the
prospective information, and evaluate the proper derivation of the
prospective information from these assumptions. We do not express a
separate audit opinion on the prospective information and on the assumptions
used as a basis. There is a substantial unavoidable risk that future events
will differ materially from the prospective information.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a statement that we have
complied with the relevant independence requirements, and communicate with
them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, the related safeguards.
From the matters communicated with those charged with governance, we
determine those matters that were of most significance in the audit of the
consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter.
OTHER LEGAL AND REGULATORY REQUIREMENTS
Further information pursuant to Article 10 of the EU Audit
Regulation
We were elected as group auditor by the annual general meeting on 12 April 2018.
We were engaged by the Supervisory Board on 24 October 2018. We have been
the group auditor of PUMA SE, Herzogenaurach, without interruption since the
financial year 2012.
We declare that the audit opinions expressed in this auditor’s report are
consistent with the additional report to the audit committee pursuant to Article
11 of the EU Audit Regulation (long form audit report).
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PUMA Annual Report 2018
ADDITIONAL INFORMATION
202
GRI CONTENT INDEX ����������������������������������������������������������������������� 203
THE PUMA SHARE ��������������������������������������������������������������������������� 206
PUMA YEAR-ON-YEAR COMPARISON ������������������������������������������� 208
PUMA GROUP DEVELOPMENT ������������������������������������������������������ 209
8
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202
GRI CONTENT INDEX
Since 2003 PUMA’s sustainability reports are based on the guidelines of the
Global Reporting Initiative (GRI), which developed detailed and widely recognised
standards on sustainability reporting. This report has been prepared in accor-
dance with the GRI Standards: Core option. This option enables us to report on
the impacts related to our economic, environmental, social, and governance
performance. It includes topics that are material to PUMA’s business and our
key stakeholders and that constitute our sustainability targets. These targets
have been systematically developed in accordance with the feedback from
PUMA’s stakeholders.
GRI Standard
Page
GRI Standard
Page
Activities, brands, products, and services
General Disclosures
Organizational profile
102-1 Name of the organization
102-2
102-3 Location of headquarters
102-4 Location of operations
102-5 Ownership and legal form
102-6 Markets served
102-7
102-8
Scale of the organization
Information on employees and other workers
d. No significant portion of the organization’s activities are
performed by workers who are not employees
e. No significant variations in the numbers reported in
Disclosures 102-8-a, 102-8-b, and 102-8-c
f. Figures are complete records
102-9 Supply chain
102-10
Significant changes to the organization
and its supply chain
102-11 Precautionary Principle or approach
102-12 External initiatives
102-13 Membership of associations
Strategy
102-14
102-15
Statement from senior decision-maker
Key impacts, risks, and opportunities
Ethics and integrity
92
92
92
95-96
119
100, 111
97, 103
59
94, 95
90, 93, 95,
100-101
79
85
85
19
124-128
Governance
102-18 Governance structure
102-21
Consulting stakeholders on economic, environmental, and
social topics
119-124
85
Stakeholder engagement
102-40 List of stakeholder groups
102-41 Collective bargaining agreements
Identifying and selecting stakeholders
102-42
102-43 Approach to stakeholder engagement
102-44 Key topics and concerns raised
Reporting practice
Entities included in the consolidated financial statements
102-45
102-46 Defining report content and topic Boundaries
102-47 List of material topics
102-48 Restatements of information
102-49 Changes in reporting
102-50 Reporting period
102-51 Date of most recent report
102-52 Reporting cycle
102-53
102-54
102-55 GRI content index
102-56 External assurance
Contact point for questions regarding the report
Claims of reporting in accordance with the GRI Standards
85
55
85
85
84-85
144-146
66, 69, 84
84
85
85
85
Year 2017
69
211
203
203-205
86-87
102-16
Values, principles, standards, and norms of behavior
69, 84
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GRI Standard
Page
GRI Standard
Specific Standard Disclosures
Environment topics
GRI 103: Management Approach 2016
Materials
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
GRI 301: Materials 2016
301-1 Materials used by weight or volume
Part Omitted: Materials used by weight or volume
Reason:
Explanation:
Confidentiality constraints
The total materials’ weights are obtained to
calculate the target progress. For confidentiality
reasons only the percentages reached are dis-
closed.
GRI 103: Management Approach 2016
Energy
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
GRI 302: Energy 2016
302-3 Energy intensity
GRI 103: Management Approach 2016
Emissions
Explanation of the material topic and its Boundary
The management approach and its components
103-1
103-2
103-3 Evaluation of the management approach
GRI 305: Emissions 2016
305-1 Direct (Scope 1) GHG emissions
305-2
305-3 Other indirect (Scope 3) GHG emissions
305-4 GHG emissions intensity
305-5 Reduction of GHG emissions
Energy indirect (Scope 2) GHG emissions
74, 75
74-76
74-76
73-76
72
72-73
72-73
73
76
76
76
77
77
77
77
77
Social topics
GRI 103: Management Approach 2016
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
GRI 414: Supplier Social Assessment 2016
414-1
414-2
New suppliers that were screened using social criteria
Negative social impacts in the supply chain and actions taken
GRI 103: Management Approach 2016
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
GRI 407: Freedom of Association and Collective Bargaining 2016
Operations and suppliers in which the right to freedom of
407-1
association and collective bargaining may be at risk
GRI 103: Management Approach 2016
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
GRI 409: Forced or Compulsory Labor 2016
409-1
Operations and suppliers at significant risk for incidents of
forced or compulsory labor
GRI 103: Management Approach 2016
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
Page
69
69
69
69
70-71
70-71
70-71
70-71
71
69-70
69-70
69-70
69
69-71
69-71
69-71
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PUMA Annual Report 2018
Page
GRI Standard
Economic topics
GRI 103: Management Approach 2016
103-1
103-2
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Explanation of the material topic and its Boundary
The management approach and its components
GRI 205: Anti-corruption 2016
205-2
Communication and training about anti-corruption
policies and procedures
GRI 103: Management Approach 2016
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
GRI 201: Economic Performance 2016
201-2
Financial implications and other risks and opportunities
due to climate change
GRI Standard
Social topics
GRI 412: Human Rights Assessment 2016
412-1
Operations that have been subject to human rights
reviews or impact assessments
GRI 103: Management Approach 2016
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
GRI 403: Occupational Health and Safety 2016
403-2
Types of injury and rates of injury, occupational diseases,
lost days, and absenteeism, and number of work-related
fatalities
Part Omitted: a. Types of injury, occupational disease rate
69-70
69-70
69-71
70-71
71
(ODR), lost day rate (LDR), absentee rate (AR),
and work-related fatalities, for all employees.
b. Types of injury, and work- related fatalities,
for all workers
(excluding employees) whose work, or work-
place, is controlled by the organization.
Information unavailable
There were no fatalities in the
reporting year 2018. Types of injury, lost day
rate and absentee rates are not reported as
the topic boundary extends beyond the
reporting organization.
Reason:
Explanation:
GRI 103: Management Approach 2016
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
GRI 416: Customer Health and Safety 2016
416-1
Assessment of the health and safety impacts of product
and service categories
79
79
79-80
79-80
GRI 103: Management Approach 2016
103-1
103-2
103-3 Evaluation of the management approach
Explanation of the material topic and its Boundary
The management approach and its components
GRI 405: Diversity and Equal Opportunity 2016
405-1 Diversity of governance bodies and employees
54-55, 122-124
54-55, 122-124
54-55, 122-124
54-55, 123-124
Page
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82
124-125
124-125
124-125
125
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205205
PUMA Annual Report 2018
THE PUMA SHARE
The PUMA share also had a very positive performance in 2018. The share started
into the year at a price of € 363.00 and moved in the following twelve months in a
range between € 317.00 (February 13, 2018 / -12.7%) and € 525.00 (June 5, 2018 /
+44.6%). At the end of the year (December 28, 2018), the PUMA share was trading
at € 427.00, 17.6% above the closing price of the previous year. Market capitaliza-
tion rose accordingly from € 5.4 billion to € 6.4 billion at the end of 2018.
The PUMA share was included in the MDAX in June 2018, after the free float
increased from just under 13% to 55% due to the reduction in Kering’s share-
holding and, as a result, the trading volume of the PUMA share also increased
significantly. The average daily trading volume increased from 6,689 shares in
the previous year to an average of 44,386 shares in 2018.
Compared to the MDAX, which fell by 17.6% in 2018, the PUMA share developed
significantly better, gaining 17.6%.
T�1 KEY DATA PER SHARE
End of year price
Highest price listed
Lowest price listed
Daily trading volume (Ø)
Earnings per share
Gross cashflow per share
Free cashflow (before acquisitions) per share*
Shareholders' equity per share
Dividend per share
€
€
€
amount
€
€
€
€
€
2018
427.00
525.00
317.00
44,386
12.54
26.63
9.99
115.22
3.50
2017
363.00
391.40
243.50
6,689
9.09
22.15
8.60
110.87
12.50
2016
249.65
249.65
168.20
3,392
4.17
12.24
3.78
2015
198.65
212.85
141.85
9,416
2.48
9.00
-6.58
2014
172.55
235.00
157.10
7,209
4.29
11.52
4.23
2013
235.00
249.40
205.35
11,086
0.36
15.44
3.33
2012
224.85
274.00
210.10
24,739
4.69
21.89
5.58
115.28
108.39
108.32
100.22
106.73
0.75
0.50
0.50
0.50
0.50
* adjusted prior-year figures, see chapter 27 in the notes to the consolidated financial statements as of December 31, 2018
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206206
PUMA Annual Report 2018
F�1 PUMA SHARE PERFORMANCE / TRADING VOLUME
(in €)
600 –
500 –
400 –
300 –
200 –
100 –
0 –
(amount)
– 400,000
– 300,000
– 200,000
– 100,000
– 0
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Trading Volume
Share price
F�2 SHARE DEVELOPMENT - REBASED
160 –
140 –
120 –
100 –
80 –
60 –
40 –
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
PUMA
MDAX
The PUMA share has been regis-
tered for the regulated market on
German stock exchanges since
1986. It is listed in the Prime Stan-
dard Segment and the Mid-Cap
Index MDAX of the German Stock
E xchan ge [D eu t s che B ör s e].
Moreover, member ship in the
FTSE4Good index was once again
confirmed.
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207207
PUMA Annual Report 2018
PUMA YEAR-ON-YEAR
COMPARISON
T�2 PUMA YEAR-ON-YEAR COMPARISON (in € million)
2018
2017
Deviation
2018
2017
Deviation
Sales
Consolidated sales
- Footwear
- Apparel
- Accessories
Result of operations
4,648.3
2,184.7
1,687.5
4,135.9
1,974.5
1,441.4
776.1
719.9
Gross profit
2,249.4
1,954.3
EBIT
EBT
Net earnings
Profitability
337.4
313.4
187.4
244.6
231.2
135.8
12.4%
10.6%
17.1%
7.8%
15.1%
37.9%
35.5%
38.0%
Gross profit margin
48.4%
47.3%
1.1% pt
EBT margin
Net earnings margin
Return on capital employed
(ROCE)
Return on equity (ROE)
Balance sheet information
6.7%
4.0%
25.8%
10.9%
5.6%
3.3%
1.2% pt
0.7% pt
20.7%
5.1% pt
8.2%
2.7% pt
Shareholders‘ equity
1,722.2
1,656.7
4.0%
- Equity ratio
Working capital
- in % of consolidated sales
53.7%
503.9
10.8%
58.1%
-4.4% pt
493.9
2.0%
11.9%
-1.1% pt
Cashflow and investments
Gross cashflow
Free cashflow*
Investments (before acquisition)
Acquisition investments
Employees
Number of employees (annual
average)
Sales per employee (k€)
PUMA share
Share price (in €)
Average outstanding shares (in
million)
Number of shares outstanding (in
million)
Earnings per share (in €)
Market capitalization
Average trading volume
(amount / day)
398.0
172.9
130.2
0.0
330.9
128.5
122.9
0.0
20.3%
34.5%
5.9%
-
12,192
381.3
11,389
363.1
7.1%
5.0%
427.00
363.00
17.6%
14,947
14,943
0.0%
14,947
14,943
12.54
6,384
9.09
5,426
0.0%
38.0%
17.7%
44,386
6,689
563.6%
* adjusted prior-year figures, see chapter 27 in the notes to the consolidated financial
statements as of December 31, 2018
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208208
PUMA Annual Report 2018
PUMA GROUP DEVELOPMENT
T�3 PUMA GROUP DEVELOPMENT (in € million)
Sales
Consolidated sales
4,648.3
4,135.9
3,626.7
3,387.4
2,972.0
2,985.3
3,270.7
3,009.0
2,706.4
2,447.3
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009*
- Change in %
- Footwear
- Apparel
- Accessories
Result of operations
Gross profit
- Gross profit margin
Royalty and commission income
EBIT1)
- EBIT margin
EBT
- EBT margin
Net earnings
- Net margin
Expenses
Marketing / retail
Personnel
Balance sheet
Total assets
Shareholders‘ equity
- Equity ratio
Working capital
- thereof: inventories
12.4%
14.0%
7.1%
14.0%
-0.4%
-8.7%
8.7%
11.2%
10.6%
-3.0%
2,184.7
1,687.5
776.1
2,249.4
48.4%
16.3
337.4
7.3%
313.4
6.7%
187.4
4.0%
931.2
553.8
3,207.2
1,722.2
53.7%
503.9
915.1
1,974.5
1,627.0
1,506.1
1,282.7
1,372.1
1,595.2
1,539.5
1,424.8
1,321.7
1,441.4
1,333.2
1,244.8
1,103.1
1,063.8
1,151.9
1,035.6
719.9
666.5
636.4
586.3
549.4
523.6
433.9
941.3
340.3
846.2
279.4
1,954.3
1,656.4
1,540.2
1,385.4
1,387.5
1,579.0
1,493.4
1,344.8
1,243.1
47.3%
45.7%
45.5%
46.6%
46.5%
48.3%
15.8
244.6
5.9%
231.2
5.6%
135.8
3.3%
822.9
549.1
15.7
127.6
3.5%
118.9
3.3%
62.4
1.7%
732.3
493.1
16.5
96.3
2.8%
85.0
2.5%
37.1
1.1%
697.6
483.8
19.4
128.0
4.3%
121.8
4.1%
64.1
2.2%
599.7
425.3
20.8
191.4
6.4%
53.7
1.8%
5.3
0.2%
544.1
415.7
19.2
290.7
8.9%
112.3
3.4%
70.2
2.1%
609.3
438.8
49.6%
17.6
333.2
11.1%
320.4
10.6%
230.1
7.6%
550.7
393.8
49.7%
50.8%
19.1
337.8
12.5%
301.5
11.1%
202.2
7.5%
501.3
354.1
20.6
299.7
12.2%
138.4
5.7%
79.6
3.3%
501.2
320.2
2,853.8
2,765.1
2,620.3
2,549.9
2,308.5
2,530.3
2,581.8
2,366.6
1,925.0
1,656.7
1,722.2
1,619.3
1,618.3
1,497.3
1,597.4
1,605.2
1,386.4
1,133.3
58.1%
493.9
778.5
62.3%
61.8%
63.5%
64.9%
536.6
718.9
532.9
657.0
455.7
571.5
528.4
521.3
63.1%
623.7
552.5
62.2%
58.6%
58.9%
534.0
536.8
404.5
439.7
323.2
344.4
1) EBIT before special items
*
adjusted comparable figures according to IAS 8, see chapter 3 in the notes to the consolidated financial statements as of December 31, 2010
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209209
PUMA Annual Report 2018
T�3 PUMA GROUP DEVELOPMENT (in € million)
Cashflow
Free cashflow**
Investments (incl. acquisitions)
Profitability
Return on equity (ROE)
Return on capital employed (ROCE)
Additional information
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009*
172.9
130.2
10.9%
25.8%
128.5
122.9
8.2%
20.7%
49.7
91.1
3.6%
10.3%
-98.9
79.5
2.3%
7.9%
39.3
96.4
4.0%
11.5%
29.2
76.3
0.4%
5.6%
-8.2
172.9
4.4%
8.6%
16.8
115.3
14.3%
28.7%
17.1
163.6
14.6%
31.7%
167.3
136.3
7.0%
20.3%
Number of employees (year-end)
12,894
11,787
11,495
11,351
11,267
10,982
11,290
10,836
9,697
9,646
Number of employees
(annual average)
PUMA share
Share price (in €)
Earnings per share (in €)
Average outstanding shares (in
million)
Number of shares outstanding (in
million)
Market capitalization
12,192
11,389
11,128
10,988
10,830
10,750
10,935
10,043
9,313
9,747
427.00
12.54
363.00
249.65
198.65
172.55
235.00
224.85
225.00
248.00
231.84
9.09
4.17
2.48
4.29
0.36
4.69
15.36
13.45
5.28
14.947
14.943
14.940
14.940
14.940
14.940
14.967
14.981
15.031
15.082
14.947
6,384
14.943
14.940
14.940
14.940
14.940
14.939
14.935
14.981
15.082
5,426
3,730
2,968
2,578
3,511
3,359
3,360
3,715
3,497
adjusted comparable figures according to IAS 8, see chapter 3 in the notes to the consolidated financial statements as of December 31, 2010
*
** adjusted prior-year figures, see chapter 27 in the notes to the consolidated financial statements as of December 31, 2018
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PUMA Annual Report 2018
PUBLISHER
PUMA SE
PUMA Way 1
91074 Herzogenaurach
Germany
+49 (0)9132 81-0
www.about.puma.com
CORPORATE COMMUNICATIONS
Agathe Zakarian
Manager Corporate Communications
agathe.zakarian@puma.com
INVESTOR RELATIONS
Johan-Philip Kuhlo
Head of Corporate Strategy &
Investor Relations
johan-philip.kuhlo@puma.com
HUMAN RESOURCES
Dietmar Knoess
Director Human Resources
dietmar.knoess@puma.com
SUSTAINABILITY
Stefan Seidel
Head of Corporate Sustainability
stefan.seidel@puma.com
BRAND DESIGN
Jan Hippchen
Shane Finegan
PHOTO CREDITS
Blanca Melendez (p. 56)
Christoph Maderer (p. 18, 32, 54, 64, 65, 90)
Jad Sherif / WR12 (p. 43)
Conné (p. 6)
Michael Steele – Getty Images for IAAF (p. 36)
Tom Ziora (p. 53, 54, 55, 57, 58, 59, 60, 61, 62)
DESIGN AND REALISATION
Publicis Pixelpark Erlangen
eine Zweigniederlassung der
Publicis Pixelpark GmbH
www.publicispixelpark.de
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