PUMA Annual Report 2020 | Quarterlytics

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FY2020 Annual Report · PUMA

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Annual Report 2020

PUMA
FAMILY

Annual Report 2020 ↗ Table of Contents

TABLE OF CONTENTS

04
05

TO OUR SHAREHOLDERS
CEO Letter

Report by the Supervisory Board

14 OUR PEOPLE
15

PUMA family

Culture

Personal Journey

24
25

SUSTAINABILITY
Foreword

PUMA’s 10FOR25 Sustainability Strategy

Social Aspects

Health and Safety

Environment

Summary and Outlook

GRI Index

Deloitte Assurance Statement

Annual Report 2020 ↗ Table of Contents

163 CONSOLIDATED FINANCIAL

STATEMENTS
Consolidated Statement of Financial Position

Consolidated Income Statement

Consolidated Statement of

Comprehensive Income

Consolidated Statement of Cash Flows

Statement of Changes In Equity

164

166

167

168

170

172 Notes to the Consolidated

Financial Statements

261 Declaration by the Legal Representatives

262

Independent Auditor’s Report

270 ADDITIONAL INFORMATION
271

The PUMA Share

273

275

278

PUMA Year-on-Year Comparison

PUMA Group Development

Imprint

100

102

104

COMBINED MANAGEMENT REPORT
FOR THE FINANCIAL YEAR 2020
Overview 2020

PUMA Group Essential Information

Commercial Activities and

Organizational Structure

Targets and Strategy

Product Development and Design

Sourcing

Employees

107 Management System

108

Information regarding the

Non-financial Report

Economic Report

General Economic Conditions

Sales

109

110

112 Regional Development

114 Results of Operations

118 Dividends

119 Net Assets and Financial Position

122

125

Cash Flow

Statement regarding the Business

Development and the Overall Situation

of the Group

126

Comments on the Financial Statements of

PUMA SE in accordance with the German

130

132

139

Commercial Code (HGB)

Further Information

Information concerning Takeovers

Compensation Report

Corporate Governance Statement in

accordance with Section 289f and Section

315d HGB

150 Risk and Opportunity Report

161 Outlook Report

Annual Report 2020 ↗ To our Shareholders

TO OUR SHAREHOLDERS

CEO Letter

Report by the Supervisory Board

Annual Report 2020 ↗ To our Shareholders

CEO-LETTER

↗ BJØRN GULDEN

CHIEF EXECUTIVE OFFICER PUMA

DEAR SHAREHOLDERS,

I hope this letter finds you healthy and in good spirit despite all the negative impact of
COVID-19. 2020 was surely a very difficult year for all of us - for me it was definitely the most
difficult year in my life.

We started the year 2020 with a very positive feeling: we had a very solid order book, our sales at
the end of 2019 were strong, our new products were very well received and the start in January
was also positive.

Then COVID-19 hit the city of Wuhan in China and we immediately set our focus on securing our
supply chain as approx. 30% of our sourcing is done in the country as well as on reducing the
damage from the “shutdown” of physical retail in China. During the first two weeks, we did not
even think that this would turn into a global pandemic.

It then became obvious that COVID-19 was unfortunately spreading globally and that we were in a
situation we had never been in before. We were in the middle of a worldwide pandemic in which
basically all physical retail stores selling sports and sports-inspired products had to shut down
globally during the months of March and April.

Back then we quickly focused on three main areas: Deal with COVID, continue to drive the
business and continue to do the right thing, such as focusing on Sustainability and #REFORM.

Annual Report 2020 ↗ To our Shareholders

Deal with COVID meant first and foremost to ensure the health and safety of our people. Among
other things, this included the following measures: organize work from home wherever possible,
set up digital communication tools, buy and distribute masks for our employees, organize regular
testing (PCR and Quick Tests), sanitize our working spaces on a regular basis, install health and
safety equipment in all our stores and in general do whatever we could to ensure that our PUMA
employees felt as good and safe as possible. I am very proud of how our People & Organization
teams (previously called Human Resources) around the world worked and organized all these
measures. So far, we have been lucky: none of our almost 16,000 employees has died of COVID-
19 and “only” four colleagues were hospitalized, but recovered 100% and are fully back to work.

The second priority was to secure financing and liquidity. The uncertainty around the pandemic
and its impact on our business has made us act quickly to secure as much financing as possible.
We did not know if the lockdowns would last one month, two months or even longer. We prepared
for a “worst case scenario” of a four-month lockdown and managed to get financing that would
“keep us alive” throughout this period. A consortium of twelve banks led by the German state-
owned Kreditanstalt für Wiederaufbau (KfW) gave us an additional credit line of € 900 million -
together with existing credit facilities this provided us with a total financing of around €1,800
million.

We never used this additional credit line and it has been replaced by other credit facilities in the
meantime. The KfW-led credit line was not a “gift” by the German state. It was a regular credit
line for which we paid high, above-market fees for availability and that gave the KfW preference
compared to other creditors. Nevertheless, this credit line was crucial for us because it gave us
security and allowed us to make sound business decisions in a time of high uncertainty. I would
like to thank the KfW and the other eleven banks for their fast and unbureaucratic processes, and
for making this “life insurance” available to us.

The third priority was to quickly find solutions to continue working upstream with our retail
partners and downstream with our suppliers. Our objective was to avoid high cancellations that
could have caused massive problems for our suppliers including the loss of thousands of jobs
among their employees. We offered all our retail partners delayed deliveries and extended
payment terms. We slowed down shipments, asked our suppliers to slow down their production
without laying off people and to extend payment terms by one month. We agreed to hold some
inventories in the factories, some in temporary warehouses in Asia and of course in our normal
warehouses. Most retailers agreed to this approach and I am very proud that we managed to get
through 2020 with cancelling less than 1% of our orders with our suppliers. We continue to work
with all of our suppliers and none of them had to lay off workers due to the crisis.

As most physical retail stores had to shut down globally in March and April, the eCommerce
channels became even more important. Our focus was to strengthen our own puma.com
channel, the marketplaces, the pure eCommerce players, but also the eCommerce channels of
our Brick & Mortar retail partners. This caused massive changes in our marketing activities with
budget shifts to performance marketing and significant pressure on our logistics to service the
increased eCommerce demand. I am very pleased on how quickly and flexible both our marketing
and logistics teams acted during this turbulent time.

Annual Report 2020 ↗ To our Shareholders

We also continued to drive the business during this period. This meant maximizing our sales
short-term while at the same time investing into the development of new product ranges and
strong marketing in order to continue the positive mid-term momentum for the brand. We did
everything to please and service our retail partners in the best way possible, we rather gave deep
discounts instead of building excess inventories, we continued to develop full new collections for
the year 2021 and used the marketing opportunities that will benefit PUMA mid-term while we
reduced our overall marketing spent. During the crisis, we signed football icon Neymar Jr., the
most exciting rookie in the NBA LaMelo Ball, the currently most popular female artist Dua Lipa
and the very youth culture relevant DJ Snake. All these exciting additions to the PUMA family
were done because we are confident that they will further strengthen the relevance of our brand
both during the pandemic and also later in the “new normal”.

I am very thankful that our supervisory board showed us their trust and support by allowing us to
do these investments in the middle of the year.

We also continued to focus on what we call “do the right thing”. This includes both our social
responsibility and the environmental sustainability of our business practices. We want to be a
good corporate citizen and have a positive impact on our society as a whole. As part of our
#REFORM platform, we focused on three main aspects: gender equality, an end to systematic
racism and LGTBQ+ rights. Everybody on this planet should be treated equally and we at PUMA
want to do our part to fight any form of discrimination. Sustainability also continued to be a key
focus area for us, and we strive to leave the planet to our children in a better condition than we
inherited it from our parents. In 2020, we launched our 10FOR25 sustainability targets which will
guide our ambitious sustainability actions until 2025. We also continue to support the UN Global
Compact and its 10 principles for sustainable development. We also launched multiple
sustainable product collections as well as our new FOREVER BETTER communication platform.
Both responsibility and sustainability are and will continue to be an important part of PUMA’s
values.

After a very difficult second quarter during which most of the markets had either lockdowns or
other restrictions, we experienced a very strong third quarter. In the third quarter, our Net Sales
increased by 13.3% (in constant currency) to € 1,583 million – the highest revenue PUMA has
ever had in a quarter – and the third quarter EBIT of € 190 million (12% of Net Sales) shows the
potential of our company. The fourth quarter started with 25% growth in October before new
restrictions, especially in Europe, slowed our revenue growth once again. We ended the fourth
quarter with Net Sales being up 9.1% (in constant currency) and an EBIT of € 63 million (+15% vs
last year).

The full financial year 2020 was “destroyed” mainly due to the terrible second quarter, but I hope
that the strong second half of 2020 demonstrated the continued momentum of PUMA. We are
very optimistic about the future of both the sports industry and for PUMA. During the pandemic,
we have seen that the consumers continued to buy our products, queued up in front of the
sneaker stores when they reopened, started to do more individual sports and we foresee team
sports to “explode” again once the restrictions will be lifted. We see a continued trend for
sportive casual wear both in footwear and apparel, comfort being more and more important to
the consumer and sports brands still being in strong demand across all markets.

Annual Report 2020 ↗ To our Shareholders

While we do not have a “crystal ball”, we clearly foresee that the pandemic will continue to have a
negative impact on our business also in 2021. We believe that the negative impact will be
strongest in the first half and believe that it will weaken during the second half. Given the
uncertainty around the future development of the pandemic, we do not feel comfortable giving
you a specific financial outlook for the full year. But as of today, we expect that 2021 will be a
better financial year than 2020, both in terms of Net Sales and EBIT.

Let us hope that 2022 will be a “new normal” year.

Stay strong and stay healthy,

Bjørn Gulden
Chief Executive Officer PUMA

Annual Report 2020 ↗ To our Shareholders

REPORT BY THE SUPERVISORY BOARD

↗ JEAN-FRANÇOIS PALUS
↗ JEAN-FRANÇOIS PALUS
CHAIRMAN OF THE
CHAIRMAN OF THE
SUPERVISORY BOARD
SUPERVISORY BOARD

DEAR SHAREHOLDERS,

In the financial year 2020, PUMA had to overcome unique and unforeseeable challenges due to the COVID-
19 pandemic. In particular, the negative effect on our full-year revenue and earnings due to closed retail
stores all over the world and the uncertainty regarding the future development, forced us to withdraw our
guidance for the financial year 2020 in March 2020. However, thanks to the strategy and actions of PUMA’s
Management Board and the dedication of all our employees, we managed to mitigate the negative impact of
the COVID-19 pandemic without hindering our mid-term growth momentum. We protected the health and
safety of our employees, ensured sufficient financial liquidity, worked very closely with our suppliers to
stabilize the supply chain, drove additional sales wherever possible and continued to be a reliable and
flexible business partner. The Management Board, in close cooperation with the Supervisory Board, always
reacted decisively and consistently and took measures to mitigate the impact of the COVID-19 pandemic
while investing into the future of PUMA. Thereby, we laid the foundation for a successful 2021, in which
PUMA will return to growth.

In the financial year 2020, 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,
particularly in view of the COVID-19 pandemic, 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 discussed and resolved on the
Company’s business policies, all relevant aspects of corporate development and corporate planning, the
Company’s economic situation, including its net assets, financial position and results of operations, and all
key decisions for the Group. 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

Annual Report 2020 ↗ To our Shareholders

decisions and about all major business transactions. Furthermore, in 2020 one extraordinary meeting of the
Supervisory Board took place. Urgent matters were decided via circular resolutions using electronic means
of communication. All members participated in drawing up the resolutions. Whenever necessary,
representatives of the shareholders and employees held separate preliminary discussions prior to the
meetings.

Plenary Supervisory Board

Jean-François Palus

Thore Ohlsson

Héloïse Temple-Boyer

Fiona May

Martin Köppel

Bernd Illig

Attendance at meetings
(referring to regular and extraordinary
meetings)

Attendance in %

5/5

100

The Supervisory Board discussed in detail all of the Company’s key business transactions, based on the
reports by the Management Board and the Committees, and presented its own ideas. The Management
Board has provided the Supervisory Board with detailed information on any deviations of the business
performance from the budgeted figures, both in writing and orally. The Supervisory Board verified these
explanations using the supporting documents, which were always submitted in appropriate time before the
meetings. 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
any indication that the Management Board was managing the Group in anything other than a lawful and
proper manner.

The Supervisory Board members took part, on their own initiative, in the educational and training measures
necessary for the performance of their duties. The Company supports the Supervisory Board members in
their training activities, for example by having the Legal Department regularly review changes in the legal
framework for the Supervisory Board and report about them in the meetings. The Supervisory Board
intensively dealt with the Act Implementing the Second Shareholders' Rights Directive (ARUG II) introducing
the legal requirement to approve a compensation system for the members of the Management Board and
with the German Act Concerning Measures Under the Law of Companies, Cooperative Societies,
Associations, Foundations and Commonhold Property to Combat the Effects of the COVID-19 Pandemic.

MAIN ADVISORY FOCUS

In the financial year 2020, the focus was primarily on the following topics: Audit and approval of the 2019
financial statements and the non-financial report, continuous assessment of the impacts and the handling
of the COVID-19 pandemic, approval of the loan under participation of the state owned bank Kreditanstalt
für Wiederaufbau (KfW), later in the year the partial refinancing of the KfW loan, setting the agenda for the
Annual General Meeting of May 7, 2020, approval of the Management Board’s decisions regarding the
conduct of the Annual General Meeting as a virtual shareholders’ meeting without the physical presence of
shareholders or their proxies, ongoing business and sales development, markets and trends, the Group’s
financial position, business and budget planning for 2021 and medium-term planning, including
investments, further improvements of the compliance management and the internal control system as well
as material litigation in the Group.

Annual Report 2020 ↗ To our Shareholders

As every year, the Personnel Committee and the Supervisory Board determined the target achievements for
the variable remuneration of the Management Board members related to 2019 and decided on the bonus
for the members of the Management Board. Upon recommendation of its Personnel Committee the
Supervisory Board made a decision on target setting for the Management Board compensation for the
financial year 2020.

CONFLICTS OF INTEREST

The members of the Supervisory Board are required to disclose to its Chair any conflicts of interest without
undue delay. In the past year, no such disclosures were made.

COMMITTEES

The Supervisory Board has established three committees to perform its duties: The Personnel Committee,
the Audit Committee and the Nominating Committee. The Personnel Committee and the Audit Committee
each comprise two shareholder representatives and one employee representative. The Nominating
Committee is composed only of shareholder representatives. The composition of the committees can be
found in the notes to the consolidated financial statements. The Supervisory Board receives regular reports
on their work.

PERSONNEL COMMITTEE

The Personnel Committee has the task of preparing the conclusion and amendment of employment
contracts with the members of the Management Board and establishing policies for Human Resources and
personnel development. It met twice in 2020 and mainly dealt with the compensation system for the
Management Board to be proposed to the shareholders for resolution at the Annual General Meeting in
2021. Furthermore, the discussions focused on proposals for determining the bonus payments for the
members of the Management Board and the definition of the targets for 2020. The Supervisory Board was
given corresponding recommendations for resolutions.

Personnel Committee

Attendance at meetings

Attendance in %

Jean-François Palus

Fiona May

Martin Köppel

AUDIT COMMITTEE

2/2

100

The Audit Committee held four regular meetings in financial year 2020. In particular, the Audit Committee
is responsible for the review of the accounting, particularly comprising the consolidated financial
statements and the group management report (including the Corporate Social Responsibility reporting),
interim financial information and the single entity financial statements in accordance with the German
Commercial Code (HGB). It is furthermore responsible for monitoring the accounting process, the
effectiveness of the internal control system, the risk management system, the internal audit system,
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. In
addition, heads of Group functions were available for reports and questions on individual agenda items at
committee meetings.

Annual Report 2020 ↗ To our Shareholders

Audit Committee

Thore Ohlsson

Héloïse Temple-Boyer

Bernd Illig

Attendance at meetings

Attendance in %

4/4

100

NOMINATING COMMITTEE

The Nominating Committee has the task of proposing suitable candidates to the Supervisory Board for its
election proposals to the Annual General Meeting. It held no meeting in the last financial year.

CORPORATE GOVERNANCE

As in previous years, the Supervisory Board addressed current developments in the German Corporate
Governance Code (GCGC) in the financial year 2020. The GCGC contains essential statutory regulations and
recommendations for the management and supervision of listed companies and standards for responsible
corporate governance. The corporate governance standards have long been a part of the corporate routine.
Accordingly, the Supervisory Board also considered the adjustments in the GCGC effective as of March 20,
2020.

Pursuant to Principle 22 of the GCGC, the Supervisory Board reports on corporate governance in the
Corporate Governance Statement. With very few exceptions, 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, 2020 is available to our shareholders at any time on the Company’s website
under https://about.PUMA.com/en/investor-relations/corporate-governance at STATEMENT OF
COMPLIANCE.

ANNUAL FINANCIAL STATEMENTS ADOPTED

The annual financial statements for PUMA SE prepared by the Management Board in accordance with the
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 2020,
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 May 7,
2020 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 its assessments of market and procurement risks, financial
risks (including currency risks as well as risks due to the COVID-19 pandemic) and organizational risks.

The accounting records, the audit reports from the statutory auditors and the Management Board’s and
Supervisory 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
23, 2021 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.

Annual Report 2020 ↗ To our Shareholders

The Supervisory Board reviewed in detail the annual financial statements, the combined management
report for PUMA SE and the PUMA Group, the Management 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 financial year 2020. The 2020 annual financial statements
have thus been adopted.

The Management Board and the Supervisory Board resolved to propose to the Annual General Meeting a
distribution of a dividend of € 0.16 per dividend entitled share to the shareholders for the financial year
2020. In this context, the liquidity situation of the Company, the financing and the effects on the capital
market were discussed. The payout is conditional to an overall sound macroeconomic environment. A total
amount of around € 23.9 million will be paid out in dividends from PUMA SE’s retained earnings. The
remaining retained earnings of around € 366.5 million will be carried forward.

In its meeting on February 23, 2021, the Supervisory Board was presented the state of data collection for
the non-financial report in accordance with §§ 315c in conjunction with §§ 289c to 289e of the German
Commercial Code (HGB). As soon as the non-financial report is finalised, it will be submitted to the
Supervisory Board for approval and will be published on the website of the Company by April 30, 2021.

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 2020.

Herzogenaurach, February 23, 2021

On behalf of the Supervisory Board

Jean-François Palus
Chairman

Annual Report 2020 ↗ Our People

OUR PEOPLE

PUMA family

Culture

Personal Journey

Annual Report 2020 ↗ Our People

PUMA FAMILY

Over the past few years, our main strategic priorities have been to put our employees first, continue our
digital transformation, and build an agile learning organization. This foundation supported us as we tackled
the main challenges of 2020. During this year marked by the pandemic, our priority more than ever was to
keep our PUMA family safe, informed, and engaged.

Our employees are our most important asset. Giving prompt and accurate information about the pandemic
and its immediate effects on their day-to-day routine was essential. During the period when most markets
were in lockdown and nearly all employees were being asked to work from home, our existing digital
infrastructure and our flexible work schedules and mobile working policies helped us to quickly adjust to
the new work requirements and even expedited our digital transformation. This enabled us to adapt to the
new business requirements and stay connected with our employees while they were working from other
locations. During the pandemic, our digital learning platform was leveraged to support our employees in
the areas of wellbeing, resilience and mindfulness, and professional development.

All those measures contributed to high employee engagement and helped the PUMA family to master this
challenging year; we feel well equipped to continue on our path to greater growth.

DIGITILIZATION

In 2020, we greatly accelerated the digitalization of our business processes, making them even simpler and
faster around the world. Since 2017, we have been using “Workday” as our main software solution for
nearly all HR processes. This gives employees and managers access to all the processes and tools required
to carry out everyday personnel management tasks. Managers also have access to user-friendly
dashboards that show them information and give them data-driven insights, which are necessary for their
planning and personnel management. The analysis of our global data, which is centrally available, gives us
a solid basis for strategic decisions and measurable results. Using Microsoft Teams globally, we were well
prepared for the challenges that global contact and travel restrictions presented and able to continue
working together smoothly.

COMMUNITY ENGAGEMENT

2020 was also a challenging year for community engagement. Due to local regulations mandating fewer
social contacts and social distancing, we often had to change the way we engage with our local
communities through projects all around the world and find new ways of engaging. One example of our
activities was the “Big Smile” project. PUMA Ukraine donated items to orphanages for the children’s first
day of school. PUMA employees in Hong Kong provided laptops to underprivileged children to support their
home-schooling activities. In Germany, employees packed food parcels containing special treats such as
cookies, chocolate, and specialty coffee to distribute to local food banks, which then handed them out to
people in need.

Our goal was to reach a total number of hours spent on community engagement equal to our annual
average FTE (full-time equivalent). We encouraged all our employees around the world to participate and
record projects and employee engagement on an online platform. In total, initiatives led by our subsidiaries
on five continents contributed a total of 19,023 hours (2,376 for PUMA SE) of community engagement.
Projects ranged from protecting the environment and promoting health and fitness to fighting
discrimination and supporting the education of children in need. Often these projects were carried out in
cooperation with local non-profit organizations. Considering that the number of FTEs in 2020 was 13,016
(919 for PUMA SE), we reached our target.

↗ G.01 COMMUNITY ENGAGEMENT 2020

EEMEA
7,852
41%

Europe
3,791
20%

Annual Report 2020 ↗ Our People

Asia/Pacific
5,915
31%

Latin America
1,296
7%

North America
169
1%

CHARITY CAT

Charity Cat was founded in 2004 by a team of about 20 PUMA employees. Since then, this non-profit
organization has grown to include many other PUMA employees and even some external members.

All members are volunteers who donate their free time to different charitable projects, both local and
international, supporting long-term collaborations as well as short-term work for good causes.

Charity Cat supported organizations such as "from heart to heart" in the Philippines, which carried out a
large rice supply campaign in a Philippine village to support the poorest; the "Bambamarca" health center
in Peru for the construction of a hospital; the "Fundación Sonrisas de León" in Colombia, which distributes
food and support to further develop poor and structurally weak neighborhoods in Cartagena; as well as the
"Fonmeh" orphanage in Haiti and the "Kinder- und Jungendhaus BOLLE" in Berlin.

Annual Report 2020 ↗ Our People

CULTURE

The PUMA working culture is unique and driven by our employees. In the year of the pandemic, our culture
clearly helped us to take fast decisions, be agile, and have the resilience and trust in one another to find
new solutions and ways of working. A key factor is the diversity of our teams and the ongoing effort to
ensure that communication with all of our employees is transparent and swift.

DIVERSITY & EQUALITY

Diversity and equality were important topics around the world this year after scenes of police brutality in
the United States kicked off widespread protests in many countries. As a company with offices all across
the globe and employees of many different nationalities and backgrounds, it was important for us to ease
our employees’ concerns and reiterate our strong belief that diversity makes us better. Diversity and
equality are the most important ingredients for the growth of our brand. Diverse teams with different
skillsets and backgrounds are a crucial resource when it comes to creative thinking, decision-making, and
driving innovation forward.

We have made this belief in diversity and inclusion a part of PUMA’s working culture and we encourage all
of our employees to show their own personality. One of our values as an employer sums this up as: “Be
You!”. This also means that a fair work environment and equal opportunities for all PUMA employees,
regardless of their gender, nationality, ethnicity, religion, disability, age, or sexual orientation, have been a
cornerstone of our policy for many decades. These commitments are also reiterated in our PUMA Code of
Ethics (2005) and in our Diversity Charter (2010).

In 2020, we conducted a global survey, rolled out locally, to understand how our employees feel about
equality at PUMA. We invited our employees to engage in open dialog on this topic with the senior
management at all PUMA locations all over the world. We also set up the Employee Resource Group PUMA
North America and similar informal advisory committees elsewhere to make sure our employees know that
we are listening to their concerns regarding diversity and equality. We also raised awareness of this topic
on our internal communication channels and invited employees to talk openly about racism, discrimination
and equality, and how it impacts their lives.

Moreover, we organized additional training sessions on diversity and equality. For our employees, we run
online training course campaigns – through LinkedIn Learning and Good Habitz, for example – and used
virtual learning nuggets to provide further perspectives on the topic. Furthermore, we emphasized diversity
and equality as part of our management training programs ILP and Speed Up.

To show that we welcome people of all sexual orientations at PUMA, the front of our PUMA Brand Center lit
up in the colors of the rainbow during Pride Month. Plus, a live DJ set was streamed from our PUMA Bridge
for a virtual Pride event in Nuremberg in cooperation with CSD Nuremberg. Our employees also engaged in
several activities together with CSD Nuremberg which were possible given the local safety measures.

PUMA welcomes all genders and constantly strives to be an attractive place for people of all genders to
work. In 2020, we continued to see a well-balanced gender distribution across all locations. The male-to-
female ratio was 50% to 50%.

We continued to work on extending this gender balance to all management levels and raising the proportion
of women in leadership positions. In order to empower women, we offer specific training and access to
inspirational networks. We believe that the interaction with experienced female executives will encourage
our female employees to aim for leadership positions at PUMA. In 2020, 43% of management positions
across the group were held by women.

Annual Report 2020 ↗ Our People

↗ T.01 PERCENTAGE OF WOMEN IN MANAGEMENT POSITIONS (in %)

Region

Europe

EEMEA

North America

Latin America

Asia/Pacific

Total

2016

2017

2018

2019

2020

We have already reached our target to have at least 30% female representation on the Supervisory Board
and 20% on the Management Board. We are on track to reach our ambitious targets to have 30% female
representation at the first management level below the Management Board and 40% female representation
at the second management level below the Management Board, in each case by October 2021.

WELLBEING

At PUMA, fostering the wellbeing of our people is a top priority. Therefore, we are dedicated to constantly
improving the health and wellbeing of our employees by offering a wide range of services and benefits. The
wellbeing approach was started at our headquarters in Herzogenaurach. It has now been embraced by all
PUMA subsidiaries around the world and has been adapted to local needs and regulations. This topic has
never been more important than during the COVID-19 pandemic of 2020.

Our wellbeing approach focuses on four aspects: Flex, Social, Finance, and Athlete. As a sports brand, we
focus on giving our employees as many options as possible to live their passion for sports. Therefore, we
offer different training courses such as yoga, jumping fitness, and body toning. Besides our huge variety of
courses, we provide free gym access, sports courts for football, basketball, and tennis, as well as beach
volleyball. A major highlight of 2020 was the opening of our new tennis court at the PUMA headquarters in
Herzogenaurach. We also introduced our Room of Silence, which can be used for meditation, prayer, or just
to find a calm minute.

During much of the pandemic, it was no longer possible to hold wellbeing events, including training
courses. Sports facilities also had to be closed in many countries. In order to support our people while
working from home, we converted our initiatives into digital offerings. We did this by placing an extended
focus on our 360-degree wellbeing approach, offering support in the areas of sports, resilience, nutrition,
and creative childcare solutions. We created the PUMA Home Academy, a global platform which hosted the
categories Wellbeing, Learning, and Engage. Besides daily information, we offered online sports and yoga
sessions, daily nutrition and recipe ideas, as well as activities with kids for parents who work at home. Our
regular “Be Well Weeks”, where we promote a healthy lifestyle, usually covering a variety of topics such as
nutrition, health checks, and information about the latest trends in exercise and sport, had to be held
digitally in 2020.

FLEXIBLE WORKING CONDITIONS

At PUMA, we focus on creating an attractive work environment in order to positively influence employee
engagement and foster loyalty to the company and commitment to our goals. Flexibility in the workplace
allows our workforce to arrange their working conditions to balance their professional and private lives.

Annual Report 2020 ↗ Our People

Offering flexible working hours, mobile working, and part-time work, we were well prepared to give our
employees the maximum flexibility to meet the challenges posed by the pandemic.

In Germany, employees can take advantage of free consulting and placement services provided by a
cooperation partner. Offering a parent-child office, daycare spots, and summer camps for children during
school breaks, our headquarters in Herzogenaurach were awarded the German “Audit Beruf & Familie”
(audit workandfamily) certificate. During the past year, we also provided virtual childcare by introducing
online classes for children during school holidays to support our employees working from home.

Our goal is to minimize the number of employee-initiated exits and to keep the percentage of employees in
permanent employment above 80%. In 2020, 88% of our employees worldwide had a permanent contract
and the employment of over 29% of our employees was covered by a collective bargaining agreement. The
turnover rate is strongly dependent on the share of the retail business in the respective markets and the
region. In total, the turnover rate was 17% (4% for non-retail employees and 25% for retail employees). The
percentage of employees working part-time was 21% at the end of 2020.

↗ T.02 EMPLOYMENT CONTRACTS (PERMANENT /FIXED TERM)

Total

Female

Male

Diverse

Total

Female

Male

Diverse

Permanent

Fixed Term

EUROPE

EEMEA

3,190

1,602

1,588

3,672

1,482

2,190

North America

2,093

1,139

954

Latin America

1,820

659

1,161

Asia/Pacific

3,831

2,325

1,504

Total

14,606

7,207

7,397

627

215

760

404

359

122

414

244

2,094

1,182

268

345

160

911

Annual Report 2020 ↗ Our People

↗ T.03 EMPLOYMENT CONTRACTS (FULL-TIME / PART-TIME) (in %)

Employment contracts

Female

Male

Diverse

Full-time

Part-time

Total

100

OCCUPATIONAL HEALTH AND SAFETY

Providing a work environment that keeps our employees healthy and safe is a key priority. The corona
pandemic was handled directly by our top management from the start. In frequent update calls, our CEO
and our Global Director People & Organization directly addressed our PUMA community
globally by providing new information on both the business situation and health and safety measures. From
early on we implemented a new strict hygiene and safety concept, which complied with all applicable health
and safety regulations, i.e. distancing rules, installing hand-sanitizer dispensers and a requirement to wear
masks. We are constantly reviewing our hygiene and safety measures and are adjusting them to the present
circumstances. This included buying protective gloves and masks, as well as rapid tests when they
became available. This way we kept the risk of infection to an absolute minimum.

We set ourselves the goal of consistently reducing the average injury rate every year. In 2020, our goal was
to stay below an injury rate of 0.50 according to the Occupational Safety and Health Administration (OSHA).
As well as conducting safety-related training courses at all our locations, we also offer online training
programs to prepare employees for potential emergency situations and thus reduce the number of
accidents. Last year, we conducted a total of 21,143 hours of safety training. Over the past year, 6,482
employees were trained in fire safety and 5,240 in first aid. The overall number of safety training hours
increased by 35% compared to the previous year, demonstrating PUMA’s continued focus on this issue.

On a global scale, only 51 occupational accidents which required work to be stopped were recorded in 2020.
This is a decline of 11% compared to the previous year and continues the positive trend seen in recent
years. According to the Occupational Safety and Health Administration (OSHA), this equates to an injury rate
of 0.35 compared to 0.37 in 2019, meaning we improved our performance. The (OSHA) injury rate for PUMA
SE stood at 0.13 and was at 0.22 in the previous year.

A further indicator of employee engagement and the health of our workforce is the rate of absence due to
sickness, which was 1.68% in 2020. The rate of occupational diseases is zero.

↗ G.02 INJURY RATE ACCORDING TO OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION

(OSHA rate)

0.84

0.81

0.72

0.37

0.35

Annual Report 2020 ↗ Our People

FEEDBACK

Feedback is an essential part of our PUMA culture and feedback from inside and outside enables us to
constantly improve. In 2020, the feedback function in Workday was extended to include a new feature - the
feedback certificates - where employees can give one another feedback quickly and easily. This is another
initiative to foster an open feedback culture which supports regular conversations and learning
opportunities for employees and managers alike. During the year, pulse surveys were also conducted in
order to quickly obtain employee feedback on current topics and thereby gain valuable insights from our
employees. In addition, regular benchmarking is carried out with the industry and this is reflected, for
example, in our Top Employer certification, our Great Place to Work award, and the audit berufundfamilie.

AWARDS

During 2020, PUMA received several awards which recognize our ongoing efforts to create a diverse,
inclusive, and equal workforce.

We are proud to have been recognized by the Financial Times for the second year in a row in its “Diversity
Leaders” ranking for Europe. PUMA North America was also listed as one of the “Best Employers for
Diversity” in 2020 among 500 companies across all industries that demonstrate a strong commitment to
diversity and inclusion. As part of our continued efforts to further develop PUMA’s working culture, we
received the “Top Employer” award for the second consecutive year in Europe and also proudly received
this award for the first time in South Africa. Underlining our global efforts, we also received the “Great
Place to Work” award for India and Argentina.

Annual Report 2020 ↗ Our People

PERSONAL JOURNEY

As a company, we can only reach our goals if we attract, recruit, and retain talent for PUMA. Competing for
the best suitable talent on the market, our intention is to raise awareness of PUMA as an employer of
choice which offers challenging roles, while providing professional talent management and unique
development opportunities.

RECRUITING

It is crucial that we are perceived as an employer of choice and attract external candidates who want to join
the unique PUMA working culture. In order to connect with these potential candidates, we use digital
platforms and social media for our target group-specific, individual recruiting measures, as well as our
career website. Last year, we optimized the candidate journey in our ATS Applicant Tracking System
(Workday) to even better meet the needs of external and internal applicants. At the same time, we
reconsidered our global recruitment standards, aligned and communicated with our P&O colleagues across
all markets. Extensive networks of qualified applicants and up-to-date candidate pools help us to quickly fill
vacancies.

TALENT MANAGEMENT

We believe that our employees are the driver of their personal career journey. With an integrated talent
management approach, we foster a feedback and results-driven culture at PUMA and a self-driven learning
attitude. We regularly evaluate all employees, set up individual development plans, and identify the right
people to prepare them to drive PUMA’s future.

We conduct talent conferences globally to assess the entire PUMA workforce, including all levels of
management. Employees are evaluated on criteria such as individual performance and competencies,
potential, ambition, and mobility. The targeted analysis of our employees’ profiles allows us to match
internal talent with upcoming vacancies. This helps us to find potential successors within the company and
to foresee and address our organization’s future competency needs. Last year, we were able to fill most of
our key positions worldwide through internal promotions or horizontal transfers.

DEVELOPMENT

Our employees’ ongoing professional and personal development also ensures that our workforce has the
necessary expertise both to guarantee internal growth and to drive the business. Therefore, we offer a wide
range of training courses and workshops, both online and offline, standardized or specially tailored to
individual needs.

Shifting our focus to a self-driven learning culture, we provide a state-of-the-art learning infrastructure
integrated into the Workday Human Capital Management system for internal and external training courses.
With the launch of LinkedIn Learning and Good Habitz, more than 16,500 different online training courses
are available for personal and professional development across a wide variety of learning categories. In
2020, we continued to adapt our training offerings to the challenges resulting from the increased amount of
time spent working from home. Learning content such as mental wellbeing, resilience, mindfulness, and
emotional stability, which was also promoted through Home Academy, helps us as an employer to provide
our employees worldwide with the best possible support during the pandemic. Due to contact restrictions,
face-to-face training was largely replaced by virtual concepts to enable us to continue to provide this
training. In 2020, 17,372 employees worldwide participated in training courses and workshops over a total
of 122,256 hours.

Our clear goal is to build an agile learning organization. To kick-start this, we continued to drive our agile
coach program where PUMA employees from all departments are trained in agile ways of working.

Annual Report 2020 ↗ Our People

First, best practices were generated in our business and resonated well with external and internal project
participants. We have also piloted and evaluated a blended approach on selected training courses, which we
will extend to additional training courses in 2021.

LEADERSHIP TRAINING ILP / ILP2

During this time of unprecedented change, the role that PUMA leaders play in fulfilling our mission to
become forever faster has become more important than ever before. To reach our goals, we rely on
resilient managers who can navigate through the crisis and master the new complex challenges the
pandemic presents. The set of competencies we defined, which are necessary to successfully lead a team in
an increasingly complex and volatile work environment, prepared our leaders well for the challenges faced
through the pandemic. PUMA leaders receive intensive training and coaching, including interactive
learning, roleplay simulations and best practice learning, as well as joint projects. Particular points of focus
include mindful leadership, agile working methods, and diversity and inclusion. The program consists of
different modules, providing leaders with the opportunity to apply the newly acquired knowledge in between
seminars. To ensure seamless leadership development, most courses in 2020 were digital and participants
connected with their trainers and peers through MS Teams.

SPEED UP / SPEED UP2

Accelerating our employees’ progress is essential for organizational success. Driving that ambition, two
selective development programs, Speed Up and Speed Up2, are designed to unlock the potential of our
talent. To prepare them for the next steps in their career, we provide an intense curriculum, including
cross-functional projects and tasks, coaching, mentoring, job swaps, and targeted training courses.
Participants also benefit from exposure to top management and establish strong networks globally. Due to
the current situation, we developed a virtual kick-off module for the third global cohort, which we identified
in 2020, and will start in 2021.

FUTURE TALENTS

Identifying talent at a very early stage is key to fostering the next generation of employees who will
contribute to PUMA’s future success. A varied range of initiatives at universities, both locally and
internationally, gives us the opportunity to approach potential employees and identify suitable candidates.
We offer a lot of options within an international working environment, creating the perfect conditions for
people starting their careers. In 2020, 14 dual-program students and trainees joined the PUMA
headquarters in Herzogenaurach. In total, PUMA had 43 apprentices and dual-program students by the end
of 2020, majoring in a range of subjects from International Business to IT. Another way of getting to know
PUMA is an internship, where students are given the opportunity to gain six months’ work experience.

Annual Report 2020 ↗ Sustainability

SUSTAINABILITY

Foreword

PUMA’s 10FOR25 Sustainability Strategy

Social Aspects

Health and Safety

Environment

Summary and Outlook

GRI Index

Deloitte Assurance Statement

Annual Report 2020 ↗ Sustainability

“THE COVID-19 PANDEMIC HAS SHOWN
THE IMPORTANCE OF SUSTAINABILITY AND
PARTNERSHIP.”
- Foreword Anne-Laure Descours, CSO

↗ ANNE-LAURE DESCOURS

CHIEF SOURCING OFFICER (CSO)

2020 was the first year of our new 10FOR25 sustainability strategy. Before the COVID-19 crisis, we saw the
interest of our customers, investors, employees, and other stakeholders in our sustainability programs
increase significantly. Despite the pandemic, this trend continued and even intensified during 2020, as we
launched our first sustainability-focused lighthouse collections in partnership with First Mile and Central
St. Martins London.

2020 clearly was dominated by the pandemic. We had started the year with fresh momentum when the virus
hit our sourcing and sales market. Our sourcing team worked hard to shift production orders from one
country to another while assisting the affected vendors to ensure they were kept afloat financially and
workers’ health was protected.

Annual Report 2020 ↗ Sustainability

Then the virus spread globally and lockdowns in almost all sales markets brought our business to a halt in
April and May. In an effort to ensure PUMA’s financial stability, we worked very closely with our
manufacturers and customers to delay orders, extend payment terms and react flexibly to the challenging
business environment.

Our established PUMA Vendor Finance Program, which is linked to our suppliers’ sustainability
performance, proved very valuable during this time and we saw the amount of financed volume more than
double on previous years.

To protect our business partners and their hundreds of thousands of workers, we also refrained from
canceling orders. During all of 2020, we canceled less than 1 % of our orders and in the rare cases where
we had to cancel orders, we covered the costs for materials and other expenses our suppliers had incurred.

As our People and Organization team was protecting our own staff with strict hygiene measures, an
extended work-from-home policy, and flexitime, our sustainability team worked with other brands and our
suppliers to ensure our manufacturing partners also applied effective hygiene measures. We closely
monitored the number of factories which had to temporarily shut down production and any potential
implications for the workers due to the closures.

Having the ability to articulate one’s needs and concerns is a key tenet of human rights. Providing workers
with avenues to advocate for themselves is a top priority for PUMA as part of our commitment to being a
fair market leader. In addition to the internal PUMA hotline system, in 2020 we continued to promote third-
party grievance platforms such as MicroBenefits and Amader Kotha. By December 2020, our worker
hotlines counted a record number of 1,122 cases and we succeeded in solving almost all of them.

Throughout the year, we have kept an open dialogue with relevant stakeholders including governments,
international organisations and other interested parties, to ensure that our long-standing human rights due
diligence mechanisms are updated, communicated and observed, as we are committed to comply with any
latest regulations.

Our factory level auditing and capability building programs and environmental protection programs were
affected by travel restrictions. Nevertheless, we continued our efforts where possible and managed to
record 490 factory audits, 127 facility level Higg Index Environmental Assessments and 125 wastewater
tests.

We finished the year by issuing green finance tools for PUMA, by hitting our 2025 target of using 100% more
sustainable cotton fabrics already in 2020 and by training our designers on the principles of circularity.

We look forward to overcoming the COVID-19 crisis in 2021 and are determined to accelerate our
sustainability journey for our customers, employees, suppliers, investors, and the wider PUMA family. We
believe we are stronger together and responsible business conduct is not only an ethical imperative but
also makes perfect business sense.

Annual Report 2020 ↗ Sustainability

PUMA’S 10FOR25 SUSTAINABILITY STRATEGY

Our 10FOR25 sustainability strategy is an evolution of our previous sustainability strategy which was built
on creating maximum positive impact. Following an extensive materiality analysis process and stakeholder
dialogue, we decided to merge our Human Rights and Social Compliance categories, upgrade our Material
targets to Product targets and add the new target categories of Circularity, Plastics and the Oceans, Fair
Wages, and Biodiversity. In order to keep the number of target areas manageable, we removed Stakeholder
Dialogue, Environmental Profit and Loss (EP&L) accounting, and Corporate Governance from our target
matrix. Stakeholder Dialogue and EP&L will be continued as important tools to measure and finetune our
sustainability targets. Because corporate governance is growing in importance, it will be reported
separately in future.

With our new 10FOR25 sustainability strategy we continue our path to fully integrate sustainability into all
our core business functions. Sustainability targets are included in the bonus arrangements of every
member of our global Leadership team, from the CEO to the team heads.

After working hard on our sustainability performance in the background rather than center stage, we
decided to communicate our sustainability efforts more actively in the future and have added this new focus
to the strategic priorities for PUMA.

STAKEHOLDER DIALOGUE

During 2020 we continued our active stakeholder dialogue, although in a different way. Because all
sustainability-related conferences and meetings in our industry had to be conducted virtually, we also held
our Regional Supplier and Stakeholder Round Table Meetings in the form of virtual events. As we were
deeply involved in global industry-level stakeholder meetings about social compliance, climate change, and
chemicals, we decided to postpone our own global stakeholder meeting scheduled for 2020. This freed up
resources for our top management to participate in the annual event of the UN-lead Fashion Industry
Charter for Climate Action (attended by our CEO), and the Industry Summit on Social Compliance (attended
by our CSO). Other PUMA business leaders participated in the Copenhagen Fashion Summit. In addition, we
trained our design and product teams on the concept of circularity with the help of the expert organization
Circle Economy.

We also engaged in regional one-on-one consultations with key organizations including Better Work
Vietnam, Bangladesh and Indonesia, the Fair Labor Association, the Fair Wage Network, the International
Organization for Migration, other brands, and critical suppliers to review our workplan on human rights,
health, safety, and fair income for 2025. Next year, we plan to engage in even more partnerships for training
courses on women empowerment and to continue to open up our hotline to include migrant workers by
using specific guidelines and tools.

Despite tight budgets due to the implications of the pandemic, we retained our partnerships with all
relevant sustainability organizations and even added new memberships with the formalization of the
Fashion Pact and the Industry Summit into own organizations.

↗ G.01 MATRIX OF KEY PARTNERSHIP INITIATIVES

Annual Report 2020 ↗ Sustainability

AFIRM: Apparel and Footwear International RSL Management, BCI: Better Cotton Initiative, CDP: Carbon Disclosure Project,
FESI: Federation of the European Sporting Industry, FFC: Fair Factories Clearinghouse, FSC: Forest Stewardship Council, FLA:
Fair Labor Association, GIZ: German Corporation for International Cooperation, IFC: International Finance Corporation, ILO:
International Labor Organization, IPE: Institute of Public and Environmental Affairs, ITC: International Training Center, RMG:
Ready Made Garments, SAC: Sustainable Apparel Coalition, SLCP: Social and Labor Convergence Program, UNFCC: United
Nations Framework Convention Climate Change, WRI: World Resource Institute, WWF: World Wide Fund for Nature, ZDHC: Zero
Discharge of Hazardous Chemicals Foundation

Annual Report 2020 ↗ Sustainability

MOST MATERIAL ASPECTS

For the new target period, we reviewed our most material aspects based on a detailed materiality analysis
conducted in 2018/2019, including external and internal stakeholder interviews, a survey, and a stakeholder
dialogue meeting. Coordinated by Business for Social Responsibility (BSR), the process resulted in the
materiality matrix displayed in Graph G.02 below. Although the Water and Air target is not specifically
identified in the formal materiality analysis process, we retained this target, the only one we did not achieve
in the last reference period. Honoring our commitment to the Fashion Pact as well as the growing
importance of the issue, we also included a new target: Biodiversity.

↗ G.02 MOST MATERIAL ASPECTS

• Responsible Sourcing of Raw Materials

• Supply Chain Transparency

• Good Supplier Working Conditions

• Worker Health and Safety

• Living Wage

• Chemical Use and Discharge

• Climate Change Strategy

• Sustainable Product Design and Development

• Sustainable Plastics and Packaging

• Circularity

• Human Rights

• Diversity and Inclusion

TOPIC

• Responsible Sourcing of Raw Materials

• Supply Chain Transparency

• Good Supplier Working Conditions

• Worker Health and Safety

• Living Wage

• Chemical Use and Discharge

• Climate Change Strategy

• Sustainable Product Design and Development

• Sustainable Plastics and Packaging

• Circularity

• Human Rights

• Diversity and Inclusion

TARGET ISSUES

Products

Human Rights

Health and Safety

Fair Income

Chemicals

Climate

Products

Plastic and Oceans

Circularity

Human Rights

↗ G.03 PUMA’S 2025 SUSTAINABILITY TARGETS

Annual Report 2020 ↗ Sustainability

Human Rights
(SDG 3, 5, 8 and 10*)

Biodiversity
(SDG 14 and 15*)

Fair Income
(SDG 1, 2 and 10*)

Products
(SDG 12*)

Health and Safety
(SDG 3*)

PUMA SUSTAINABILITY TARGETS

2025

Circularity
(SDG 9, 12, 14 and 15*)

Chemicals
(SDG 3 and 6*)

Water and Air
(SDG 6, 14 and 15*)

Climate
(SDG 7 and 13*)

Plastics and the Oceans
(SDG 3, 14, and 15*)

*SDG: United Nations Sustainable Development Goals

PUMA 10FOR25 SUSTAINABILITY TARGETS PERFORMANCE SUMMARY

↗ T.01 PUMA 10FOR25 SUSTAINABILITY TARGETS PERFORMANCE SUMMARY

Target

Baseline

Action scheduled for 2021

Target for 2025

Status

Equal gender distribution
in almost all PUMA
entities; no specific
training yet in factories

ITC-ILO training on
harassment and violence
at work for local
sustainability staff (train
the trainer)

Target 1: Train 100,000
direct and indirect staff
members on women
empowerment

Not started yet

T2 supplier mapping
ongoing; subcontractor
mapping not yet started

Complete T2 supplier
mapping; start
comprehensive T3
supplier mapping

Target 2: Map
subcontractors and T2
suppliers for human
rights risks

In progress

Human
Rights

19,000 community hours
(some activities paused
due to COVID-19)

Increase level of
community engagement
to 23,000 hours

Target 3: 25,000 hours of
global community
engagement per year

In progress

Zero fatal accidents
since 2018

ITC-ILO training on OHS
for sustainability staff
(train the trainer)

Target 1: Zero fatal
accidents (PUMA and
suppliers)

Achieved for 2020

Supply-chain injury rate
reduced from 0.5 to 0.4

ITC-ILO training on OHS
for sustainability staff
(train the trainer)

Target 2: Reduce
accident rate to 0.5
(PUMA and suppliers)

Achieved for 2020

Bangladesh Accord in
transition; other
activities paused in 2020
due to COVID-19

Resume Building Safety
Assessment Program in
2021; conduct building
inspections in India and
Pakistan

Target 3: Building safety
policy operational in all
high-risk countries

In progress

Health and
Safety

Annual Report 2020 ↗ Sustainability

Target

Baseline

Action scheduled for 2021

Target for 2025

Status

Chemicals

Water and
Air

0.59% of RSL failure
cases at the product
level among all products

Pilot OEKO-TEX®-
certified polyester used
in footwear; continue
staff and supplier
training

1.2% RSL failure rate

Reduce RSL failure rate
to below 1.1%

VOC index of 15 gr/pair

Continue VOC Reduction
Program

Target 1: Ensure 100% of
PUMA products are safe
to use

Achieved for 2020

Target 2: Reduce
Restricted Substances
List (RSL) failures to
under 1%

In progress

Target 3: Reduce organic
solvent usage to under
10 gr/pair

In progress

Target achieved for all
parameters (90%
compliance with ZDHC
Wastewater Guidelines
on parameter level)

Draft ZDHC Air Emission
Guidelines issued;
supplier mapping
completed

Roll out supplier
chemical conformity
reports

Target 1: 90%
compliance with ZDHC
Wastewater Guidelines

Achieved for 2020

Start air emissions
testing

Target 2: 90%
compliance with ZDHC
Air Emissions Guidelines

Not started yet

2% water reduction in
textile production YOY

Expand Water Efficiency
Program

Target 3: 15% of water
reduction per pair or
piece based on 2020
baseline

Not started yet

Initial mapping of 1.5
degree alignment
completed

Execute alignment as
part of wider industry
target (Fashion Industry
Charter)

Target 1: Align PUMA’s
Climate target with 1.5
degrees global warming
scenario

In progress

100% renewable
electricity for PUMA
entities (including RECs)

100% renewable
electricity for PUMA
entities

Target 2: 100%
renewable electricity for
PUMA entities

Achieved

Climate

Solar Photovoltaic
Feasibility Programs in
place; first suppliers
started purchasing off-
site renewable electricity

Finalize feasibility
studies and start
installing solar panels;
accelerate off-site
renewable electricity
purchase

Target 3: 25% renewable
energy for core suppliers

In progress

400 tons of plastic bags
used in PUMA stores

50% reduction to
200 tons

Target 1: Eliminate
plastic bags from PUMA
stores globally

In progress

Joined Microfiber
Consortium

Test PUMA’s main
synthetic fabrics for
microfiber shedding

Target 3: Support
scientific research on
microfibers

In progress

Internal circularity
training and workshop;
biodegradability
standards introduced

Continue research until
standards are met

Target 3: Research
biodegradable plastics
options for products

In progress

Plastics and
the Oceans

Annual Report 2020 ↗ Sustainability

Target

Baseline

Action scheduled for 2021

Target for 2025

Status

Circularity

Task force launched
under leadership of
PUMA Retail team

Pilot takeback scheme in
one market

Target 1: Establish
takeback schemes in all
major markets

In progress

Apparel: 1.6 gr/piece
Footwear: 17.1 gr/pair
Textiles: 8.9 kg/ton
Leather: 0.2 kg/m2

Expand program to
reduce production waste
to landfills

Target 2: Reduce
production waste to
landfills by at least 50%

Not started yet

0.6% recycled cotton
used; recycled leather
and rubber used at pilot
scale

Expand use of recycled
cotton, leather, and
rubber; add recycled
nylon

Target 3: Develop
recycled material options
for cotton, leather, and
rubber

Target achieved; usage
figures will be reported
going forward

Target achieved for
cotton and down, and
99.5% for polyester
(apparel and
accessories). Leather
(footwear) close to target
97.9%.

Maintain cotton,
polyester, and down
performance; achieve
target for leather;
increase percentage of
certified polyester used
in footwear

Target 1: Procure 100%
of cotton, polyester,
leather, and down from
certified sources

Achieved for 2 out of 4
materials

Products

16.7% of recycled
polyester used

Implement developed
material strategy;
explore opportunity to
recycle pre-consumer
apparel waste

Target 2: Increase
recycled polyester use to
75% (apparel &
accessories)

In progress

81% of apparel and 47%
of accessories classified
as more sustainable

Increase percentage
further

Target 3:
90% of apparel and
accessories classified as
more sustainable

In progress

24% of footwear with at
least one more
sustainable component

Use more sustainable
materials for each part of
our footwear

90% of all footwear
contains at least one
more sustainable
component

Bangladesh and
Cambodia assessed
during previous period;
work paused in 2020 due
to COVID-19

33% core T1 factories
have elected workers'
representative

Fair Income

Assess one additional
country (Indonesia)

Target 1: Fair-wage
assessments for top 5
sourcing countries

In progress

Conduct supplier and
staff training on
workers’ committees;
develop tool to assess
the efficiency of workers’
committees

Target 2: Effective and
freely elected worker
representatives at all
core suppliers

In progress

90% of core T1 and T2
suppliers use bank
transfer payments

Follow up on factories
with no digital payment

Target 3: Ensure bank
transfer payments for all
core suppliers

In progress

Annual Report 2020 ↗ Sustainability

Target

Baseline

Action scheduled for 2021

Target for 2025

Status

Attended Fashion Pact’s
biodiversity webinars

Learn more about
biodiversity SBTs

Target 1: Support setting
up a biodiversity SBT

Not started yet

Cotton target achieved;
leather target (97.9%)
achieved; viscose target
achieved (sourced
exclusively from a
reliable supplier
(Lenzing))

Biodiversity

Achieve target for
leather

Target 2: Procure 100%
of cotton, leather, and
viscose from certified
sources

2 out of 3 materials
achieved

No exotic skins or hides
used

Publish new Animal
Welfare Policy

Target 3: Zero use of
exotic skins or hides

Achieved

ILO: International Labor Organization, ITC: International Training Center, OHS: Occupational Health and Safety, REC: Renewable
Energy Attribute Certificates, RSL: Restricted Substances List, SBT: Science-Based Target, SLCP: Social and Labor
Convergence Program, T2 Supplier: supplier of materials or components, T3 Supplier: supplier of yarn hides, etc., VOC: Volatile
Organic Compound, ZDHC: Zero Discharge of Hazardous Chemicals

The 10FOR25 targets also are linked directly to the four main sustainability-related risks identified in our
due diligence process:

A. Potential human rights violations or incidents in our supply chain (T1 and T2*)

B. Potential incidents of environmental pollution in our supply chain (T1 or T2)

C. Potential non-compliance with chemical regulations during production (T1 or T2)

D. Negative effects of climate change

Further details on PUMA’s overall risk management can be found in the Risk Management section.
Net risks as outlined in the CSR Directive Implementation Act (§315c in relation to §289c, section 3,
number 3 and 3 German Commercial Code (HGB), were not identified in 2020.

* T1 manufacturers of PUMA products; T2 manufacturers of materials and components

Annual Report 2020 ↗ Sustainability

↗ G.04 PUMA SUSTAINABILITY ORGANISATION 2020

CEO PUMA
(Bjørn Gulden)

CSO PUMA
(Anne-Laure Descours)

CFO PUMA
(Michael Lämmermann)

Corporate
Sustainability
Steering Committee
(Sourcing, Legal,
Communication, HR, etc.)

Head of Corporate
Sustainability
(Stefan Seidel)

Senior Head of
Supply Chain
Sustainability
(Veronique Rochet)

Corporate
Sustainability Team

Team Head
Social
Sustainability
(Viola Wan)

Team Head
Environmental
Sustainability
(Vincent Chen)

Social
Sustainability Team

Environmental
Sustainability Team

SCOPE OF DATA COLLECTION

In this report we cover the PUMA Group. We have provided separate reports for PUMA SE and the
PUMA Group within the “Governance and our People” section only. Our materiality analysis and EP&L
clearly indicate that a major aspect of our impact originates in the manufacturing of materials and
components, not in the assembly of finished goods. We therefore have extended our data collection to
include our core suppliers of components and materials.

DATA SOURCES

To ensure a high level of transparency and promote the sharing of environmental and social data with our
industry peers, we have chosen to use external databases, most of which are publicly accessible:

• The Fair Factories Clearinghouse for sharing compliance-audit data with other brands
• The wastewater platform from the Zero Discharge of Hazardous Chemicals Foundation (ZDHC) for

sharing supplier data on wastewater testing

• The ZDHC Chemicals Gateway for the use of safe chemicals (pilot)
• The China-based NGO IPE for the publication of suppliers’ environmental data
•

IPE’s Green Supply Chain Map of environmental performance data of some of our core suppliers in
China http://wwwen.ipe.org.cn/GreenSupplyChain/Main.html
• The HIGG Index Platform from the Sustainable Apparel Coalition

https://apparelcoalition.org/the-higg-index/

Also, we use our sustainability data collection tool to record social and environmental performance data
from PUMA-owned and -operated sites and from the core suppliers that manufacture our products.

Annual Report 2020 ↗ Sustainability

SOCIAL ASPECTS

2020 was dominated by the COVID-19 pandemic. Our major challenges regarding social sustainability
aspects were:

A. To protect our PUMA staff members and their jobs

B. To work with our business partners, particularly our suppliers, to help them maintain social protection
for their staff

C. To ensure the physical and mental wellbeing of our direct and indirect employees

Our highlights in 2020 included:

• Diversified tools for factory workers to voice their opinions; capturing more than 17,500 workers’

feedback concerning improvement via a mobile APP survey – a 224% increase – with 99.9% resolution of
substantial issues

• Zero fatal accidents at PUMA and its direct suppliers for the third year in a row
• Accelerated pace towards shared industry compliance-assessment tools; increase in the percentage of

converted external compliance reports from 43% to 54%

• 490 audit reports from 406 suppliers despite travel restrictions and partial lockdowns
• Closer engagement with suppliers through frequent and open dialog including quarterly surveys and

webinars

HUMAN RIGHTS

Relates to United Nations Sustainable Development Goals 3, 5, 8 and 10

Examples of the 10FOR25 human rights targets:
Target 1: Train 100,000 direct and indirect staff on women empowerment
Target 2: Map subcontractors and T2 suppliers for human rights risks
Target 3: 25,000 hours of community engagement globally per year

KPIs:
• Percentage of worker complaints resolved
• Number of factories with an A, B+, B-, C or D grade
• Number of T2 suppliers and subcontractors included in our risk mapping
• Number of zero-tolerance issues prevailing at year end
• Number of employee hours spent on community engagement (KPI shared with HR)
• Number of workers trained on women empowerment

Annual Report 2020 ↗ Sustainability

PUMA’s sustainability policies are aligned with the United Nations’ Declaration of Human Rights, the
International Labor Organization’s Core Labor Conventions, and the ten principles of the United Nations
Global Compact. The observance of human rights was part of our first Code of Conduct developed in 1993
and has guided our business ethics ever since. In 2019, we established a Responsible Purchasing Policy and
a related training program to ensure our sourcing practices are aligned with our Code of Conduct. In 2020,
we focused on keeping our suppliers in business and safeguarding workers’ health, employment, and
income through several measures including:

1. Order and Production Management

• Minimizing order cancellations; 0.35% of orders were canceled in 2020
• The canceled orders were not yet in production, we compensated for raw material liabilities
• Agreeing on order delays with our customers during the difficult lockdown period
• Extending our production lead times by 19% on average to facilitate more flexibility along the supply

chain

2. Financing and Payments

• Expanding our PUMA Vendor Financing Program with an increase in supplier participation from 21% in
2019 to 30% in 2020. Average usage of the program in 2019 was 10% (USD 196m) of the invoice volume
with eligible vendors, which increased to 31% in 2020 (USD 587m)

• Extending payment terms for our suppliers and our customers
• Paying all orders in full and on time
• No late-delivery penalties

3. Guidance and Best-Practices Sharing

Our Sustainability team held three virtual meetings with our suppliers to share best practices and
guidelines on social distancing, hygiene measures, and on-time and full payment to workers. Close to 700
people from more than 300 factories attended each session.

↗ T.02 ORDER CANCELLATIONS DUE TO COVID-19

Cancellations (%)

Full Year 2020

FTW

APP

ACC

Total

0.43%

0.34%

0.10%

0.35%

In previous years, we had conducted human rights risk assessments at the corporate and the supply chain
level and communicated the results in our 2016 and 2017 Annual Reports. The most salient risks to human
rights are forced or bonded labor in our supply chain and, at the farm level, child labor.

It has been the long-standing practice of PUMA to continuously and rigorously monitor our supply chain and
conduct human rights due diligence on all of our suppliers globally, including those in major production
hubs such as Vietnam, Bangladesh and China. When we became aware of the report by the Australian
Strategic Policy Institute (ASPI), we appreciated it as an opportunity to further review our supply chain. As a
result of the assessments, we could find no evidence supporting the allegations.

Annual Report 2020 ↗ Sustainability

Due to the COVID-19 pandemic, we postponed our activities to eliminate recruitment fees in Taiwan to 2021.

Our Community Engagement Program also has been affected severely by the pandemic. Nevertheless, the
efforts of our employees to create positive impact locally by supporting social, health, and environmental
causes continued where possible and we were able to donate 19,000 community hours in 2020.

SOCIAL COMPLIANCE

Compliance with our Vendor Code of Conduct remains the foundation of our human rights due diligence
process. Since 1999, all direct PUMA suppliers have been frequently audited for compliance with ILO Core
Labor Standards, internationally accepted Health and Safety provisions, and basic environmental
standards. In recent years, we have also included our most relevant material and component suppliers in
our audit program.

Each year, we collect between 300 and 500 audit or assessment reports issued by PUMA’s Compliance
team, the ILO Better Work Program, our industry peers, or independent experts accredited by the Social
and Labor Convergence Program (SLCP).

Despite travel restrictions and partial lockdowns, in 2020 we were able to collect 490 audit reports from 406
suppliers. Four percent of our T1 suppliers failed to meet our requirements. If the company in question was
an active PUMA supplier, we worked together to improve the situation. A pass grade was awarded to 89% of
companies subjected to a second audit. Seven factories did not manage to sufficiently improve their
performance and were consequently removed from our active supplier factory base. Applicants that failed
their first audits were not taken on as suppliers.

Our Social and Labor Compliance Program has been accredited by the Fair Labor Association since 2007
and was re-accredited most recently in 2019.

To avoid duplication and prevent auditing fatigue, in 2020 we increased the percentage of shared
assessments to 54%, from 43% in 2019. As part of our commitment to the Industry Summit and the Social
and Labor Convergence Program, we will further increase our adoption of SLCP-based assessments to at
least 50% in 2022. We believe that SLCP is an ideal tool for building long-term relationships with suppliers
and supporting them to own their social and labor data.

We employ a team of compliance experts spread across all our major sourcing regions. They regularly visit
and audit our core manufacturing partners. We also work with external compliance auditors and with the
International Labor Organization’s Better Work Program. Each PUMA supplier factory has to undergo one
mandatory compliance audit per year and all issues identified need to be remedied as part of a corrective-
action plan.

Annual Report 2020 ↗ Sustainability

↗ T.03 AUDIT RESULTS 2018-2020

Number of factories audited

2020

2019

2018

A (Pass)

B+ (Pass)

B- (Pass)

C (Fail)

D (Fail)

Total

116

125

338

107

126

121

377

Pass/Fail (%)

96/4

97/3

94/6

406

418

95/5

148

128

380

473

94/6

91/9

The extensive nature of the SLCP verified data set has helped to identify additional issues for remediation,
which explains why the number of factories with A and B+ grades decreased. We noticed improvements in
occupational health and safety, risk management and transparency. Reducing overtime and increasing
social security coverage remains a focus of our efforts.

Beyond auditing, we track social key performance indicators such as average payments vs. minimum wage
payments, overtime hours or coverage by collective bargaining agreements. Those data are discussed
under the Fair Wages target.

We operate multiple worker voice channels. If workers are not satisfied with the responses offered by
factories via their respective internal grievance system, we encourage the use of the PUMA Hotline to raise
complaints or request consultations. Phone numbers and email addresses for this hotline are published on
our Code of Conduct posters displayed at every factory globally. We also use WeChat, Zalo, Facebook, and
other social media to connect with workers and have established more formalized compliance and human
resources apps at selected core suppliers.

In 2020, a total of 101 complaint issues were raised to PUMA’s feedback system across six countries, 44%
more than during the previous year. Our team resolved 99% of them. Also, we received 1,021 feedback
requests from workers through the MicroBenefits Program in China and Vietnam and the Amader Kotha
Helpline in Bangladesh. Initially established as a project by the Alliance for Bangladesh Worker Safety
following the Rana Plaza tragedy, the hotline provides a safe, timely, and effective communication channel
for the purpose of identifying and resolving safety and other concerns of workers of PUMA’s Bangladesh
suppliers. Last year, workers raised 703 issues concerning safety, compensation, abuse, etc., a 123%
increase year-over-year. Calls related to COVID-19 represented almost half of the total calls received
between March and July 2020. Using the app-based technology provided by MicroBenefits in China and
Vietnam, we covered more than 30,000 workers from 20 core suppliers. In 2020, we received and resolved
318 grievances or queries from those apps.

We also received five third-party complaints from external organizations related to PUMA’s manufacturing
partners. They focused on freedom of association, fair compensation, and discrimination. Four complaints
were resolved by year end, one is still under follow-up due to the fact that we received it late in the year.

↗ T.04 WORKERS’ COMPLAINTS 2018 – 2020

Workers’ complaints

Total received – external channels

Total received – PUMA Hotline

Total confirmed

Resolved

Not resolved

Resolved (%)

Annual Report 2020 ↗ Sustainability

2020

1021

101

984

983

2019

2018

99.9%

100%

↗ CASE STUDY

In spring of 2020, we received a tip-off through the Amader Kotha Helpline of possible workers’
retrenchment in one of the Bangladeshi factories producing for PUMA. We immediately engaged
with the supplier and the Better Work Bangladesh team. Due to the complexity of the case, it took
months to evaluate the nature of the process and to investigate whether labor laws were being
followed. Nevertheless, a Memorandum of Understanding (MoU) with the affected workers and the
factory was signed. Over the summer, a trade union federation contacted PUMA and other brands
with concerns related to the retrenchment of workers. PUMA worked with the other brands, Better
Work Bangladesh, the employer association, and IndustriAll to coordinate a peaceful resolution.
After the signing of an MoU, workers were re-instated or compensated.

All issues identified during our auditing and hotline activities are classified as zero-tolerance issues (such
as child labor or forced labor), critical issues, or other issues.

As the name implies, zero-tolerance issues lead to the immediate failure of an audit. If these issues are
reported for a new factory, the factory will not be allowed to produce PUMA goods. Established suppliers
must remedy all zero-tolerance issues immediately by conducting a root-cause analysis and implementing
preventive measures to avoid the issue from reoccurring in the future. As a last resort, business
relationships will be terminated if the factory fails to cooperate. Other issues also are followed up by our
Compliance team.

Annual Report 2020 ↗ Sustainability

During 2020, we identified and were able to remedy four zero-tolerance issues (workers’ compensation
below legal requirement, failure to renew business license).

↗ T.05 ZERO-TOLERANCE ISSUES (ZTIS) FOR THE LAST THREE YEARS

Country

Bangladesh

Cambodia

China

Indonesia

Vietnam

Total

2020

2019

2018

Total

ENGAGEMENT WITH BETTER WORK

Despite the challenges we were facing, in 2020 PUMA continued to be a committed partner of Better
Work. Established as a partnership between the UN’s International Labor Organization and the
International Finance Corporation, a member of the World Bank Group, Better Work brings
governments, global brands, factory owners, unions, and workers together to improve working
conditions in the garment industry and the competitiveness of the sector. By ensuring its suppliers
participate in the program, PUMA supports factory ownership and long-term solutions built on effective
worker-management dialog, efficient management systems, and a commitment to ongoing learning and
improvement. PUMA collaborates on national and policy-level issues, using its voice to support positive
change in the apparel sector more broadly. We look forward to continuing to work together to help make
the global garment industry more resilient and responsible.

TARA RANGARAJAN
Head of Communications, Brand Engagement, and Americas, Better Work

Annual Report 2020 ↗ Sustainability

FAIR INCOME

Target description:
• Carry out fair-wage assessments including mapping of a specific wage ladder for top five sourcing

countries to help improve their wage levels and practices

• Ensure bank transfer payment to workers by all core suppliers by 2022
• Ensure effective and freely elected worker representation at all core T1 suppliers through collaboration

with other brands

Relates to United Nations Sustainable Development Goals 1, 2 and 10

KPIs:
• Percentage of average wages compared to minimum wage
• Percentage of workers with permanent contracts
• Percentage of workers with social insurance coverage
• Percentage of workers paid via bank transfer
• Percentage of factories with freely elected worker representation
• Percentage of factories with collective bargaining agreements
• Number of countries with fair wage assessments over the last five years

For the definition of fair wages, PUMA follows the requirements for compensation set out in the Code of
Conduct published by the Fair Labor Association (FLA):

Every worker has a right to compensation for a regular work week that is sufficient to meet the worker’s
basic needs and provide some discretionary income. Employers shall pay at least the minimum wage or the
appropriate prevailing wage, whichever is higher, comply with all legal requirements on wages, and provide
any benefits required by law or contract. Where compensation does not meet workers’ basic needs and
provide some discretionary income, each employer shall work with the FLA to take appropriate actions that
seek to progressively realize a level of compensation that does.

https://www.fairlabor.org/our-work/labor-standards

The Fair Wage Network conducted wage assessments in Bangladesh and Cambodia and evaluated the wage
systems of selected factories across 12 dimensions, focusing on five major areas: legal compliance, wage
levels, wage adjustments, pay systems, and social dialog and communication.

https://fair-wage.com/12-dimensions/

As part of our efforts to ensure fair wage practices at the factories of our suppliers, we have defined the full
payment of minimum wage as a zero-tolerance issue. This means that to be taken on as or to remain active
PUMA suppliers, companies have to pay minimum wages in full compliance with local regulations.
Provisions around payment of overtime hours and social insurance also are clearly articulated in the PUMA
Code of Conduct and are scrutinized regularly based on our Compliance Audit Program.

For other dimensions of fair wages, we had asked the Fair Wage Network to conduct formal fair wage
assessments at our core suppliers based in Bangladesh (2018) and Cambodia (2019). We had planned to
expand these efforts to Indonesia in 2020 but postponed them to a time after the COVID-19 pandemic.

Annual Report 2020 ↗ Sustainability

↗ T.06 FAIR INCOME TARGET STATUS

Sub-targets

Bank transfer payment (% of core T1 and T2 suppliers)

Percentage of core T1 factories with freely elected worker representation

Fair wage assessments
(mapping of a specific wage ladder for top five sourcing countries)

Baseline 2020

Target 2025

90%

33%

100%

2 out of 5

5 out of 5

The formal fair wage assessments revealed generally high levels of performance in the following areas:

Payment of wages:

Wages were found to be paid regularly and in full

Minimum wage:

Starting wage level at least at or above the minimum wage

Wage costs:

General increase in wage costs over the last three years which confirms
moderate wage improvements

In Bangladesh, areas that require improvement include the lack of social dialog on income to ensure wages
cover workers’ expenses. While social dialog on wages has been identified as performing high in Cambodia,
further efforts should be made for workers to access the necessary information on minimum wage.

Also, we will expand the use of the Fair Labor Association’s Fair Wage Dashboard to gauge wages based on
diverse benchmarks (minimum wage, average wage, living wage) aligned with other FLA members.

↗ CASE STUDY

In 2016, the FLA assessed a strategic facility in rural Tay Ninh Province, Vietnam. A follow-up
assessment to measure remediation progress was conducted in 2019; hours of work and
compensation violations were identified. The piece-rate system in place at the factory discouraged
workers from taking sick leave or breaks during the workday, putting pregnant workers and new
mothers at disproportionate risk. Workers earned an average net monthly wage of 74% of the Global
Living Wage Coalition’s living wage estimate. Further, the average worker’s compensation for
overtime constituted 60% of their total wages. PUMA and the factory worked together to identify the
root causes of the violations related to hours of work and compensation. On average, the workers’
net monthly wage increased by 43% between 2016 and 2019. By 2019, the average net wage for
workers had increased to 4.7 million VND (roughly USD202) and overtime wages had decreased to
1.6 million VND (roughly USD71). By adjusting the factory’s payment system and production
planning, PUMA and the factory successfully reached a living-wage agreement for the workers.

Table T.07 confirms that most of our core suppliers pay basic wages that exceed minimum wage
significantly, 13% on average. Adding overtime and bonus payments, this figure increases to 54.7%, a
reduction from previous years which can be attributed to the financial implications of the COVID-19
pandemic and a reduction of average overtime from 7.1 to 5.4 hours per week. Social insurance coverage
increased by 2% to 95.6% and the percentage of permanent workers was raised from 69.1% to 74.4%.

↗ T.07 SOCIAL KPIS PUMA CORE SUPPLIERS 2018-2020

Annual Report 2020 ↗ Sustainability

2020

KPI

Gross wage paid above minimum wage
excluding overtime and bonuses (%)

Gross wage paid above minimum wage
including overtime and bonuses (%)

SOUTH ASIA

SOUTHEAST ASIA

EMEA

2020

2019

2018

Bangladesh

India

Pakistan

China

Cambodia

Indonesia Philippines

Vietnam

Turkey

Average

14.8

13.9

34.5

7.0

8.8

4.9

0.0

31.7

1.6

13.0

17.6

20.9

51.1

13.9

Workers covered by social insurance (%)

100.0

Overtime (hours per week)

10.5

0.0

Workers covered by a collective
bargaining agreement (%)

Female workers (%)

Permanent workers (%)

Annual turnover rate (%)

Injury rate (%)

Number of suppliers

0.0

41.6

0.0

45.0

100.0

34.8

0.4

7.7

0.9

39.9

99.9

0.0

8.8

99.9

21.8

0.0

168.3

55.5

69.1

14.6

94.1

61.2

29.4

55.2

0.6

100.0

4.5

48.3

83.7

44.0

46.5

0.2

31.9

91.0

4.6

0.0

80.1

62.3

28.8

0.2

19.4

89.3

22.8

100.0

6.1

5.4

3.2

0.0

100.0

70.8

88.2

8.5

0.7

79.8

45.6

42.0

0.2

0.0

58.6

100.0

24.2

0.2

54.7

95.6

5.4

26.9

58.8

74.4

29.9

0.4

73.1

93.6

7.1

25.4

59.4

69.1

38.2

0.5

*Data received from 58 PUMA core suppliers representing 81.4% of 2020 production volume; reporting period for data collection: November 2019 – October 2020

83.7

95.3

6.1

26.7

56.0

68.0

36.8

0.6

Annual Report 2020 ↗ Sustainability

HEALTH AND SAFETY

Target description:
• Zero fatal accidents
• Reduce accident rate to 0.5 at PUMA and at suppliers
• Building safety operational in high-risk countries

Relates to United Nations Sustainable Development Goal 3

Examples of the 10FOR25 action plan:
• Expand building safety projects to include Indonesia
• Ensure professional risk assessments are conducted regularly

KPIs:
• Number of fatal accidents at Tier 1 and core Tier 2 factories
• Average injury rate at PUMA (reported in the Our People section)
• Average injury rate at core Tier 1 suppliers
• Number of factories subject to our Building Safety Assessment Program

Due to special circumstances resulting from the COVID-19 pandemic, in 2020 we added the following
measures and KPIs:

•
•

Informing our supplier base that we expect full compliance with national health and safety measures
In the absence of national health and safety measures, demanding compliance with the safety measures
recommended by the ILO Better Work Program and/or the World Health Organization

• Best-practices sharing of suppliers on health and safety measures during our Round Table Meetings

Ensuring safe working conditions for our own employees and hundreds of thousands of indirect employees
at our manufacturing partners is an ethical imperative but also makes good business sense. In 2015, we set
a target of zero fatal accidents and also aimed to reduce the number of work-related accidents.

Apart from our ongoing auditing program that includes occupational health and safety assessments, we
implemented our Building Safety Assessment Program in countries where we identified risks. We also set
up professional risk assessments at all our major manufacturing partners.

Annual Report 2020 ↗ Sustainability

From 2015 to the end of 2019, our Building Safety Assessment Program covered the following countries:

↗ T.08 BUILDING SAFETY ASSESSMENT PROGRAM

Country

Bangladesh

India

Indonesia

Pakistan

No. of factories

Comments

Part of our ongoing membership
of the Bangladesh Accord

In partnership with
AsiaInspection

In partnership with Elevate

None of our suppliers have been involved in any structural building safety incidents or factory fires since
2015.

As part of our audit program, we continue to ascertain that our suppliers conduct health and safety risk
assessments and have functional health and safety committees in place.

We are happy to report that we recorded zero fatal accidents at our suppliers for 2018, 2019, and 2020 as
well as slightly reduced accident rates at our core suppliers.

↗ T.09 INJURY RATES AT CORE SUPPLIERS

Country

Bangladesh

Cambodia

China

Indonesia

Vietnam

Average

Fatal accidents

Injury rate
2020

Injury rate
2019

Injury rate
2018

0.4

0.2

0.6

0.2

0.4

0.3

0.5

0.2

0.3

0.5

0.3

3.2

0.5

0.3

0.6

As we believe that the health and safety of the people working for PUMA and in PUMA production always
come first, we will continue to work with our own entities and suppliers to avoid infections and accidents.

Annual Report 2020 ↗ Sustainability

ENVIRONMENT

The purpose of our environmental efforts is to ensure that PUMA and its suppliers are in full environmental
compliance and any negative impact on the environment is reduced.

We frequently conduct efficiency audits at our own entities. Compulsory in the European Union, these audits
help us identify energy saving opportunities at our offices, stores, and warehouses and roll them out on a
global basis.

As far as our suppliers are concerned, our PUMA compliance audits (detailed in the Human Rights section)
contain a dedicated section on environmental and chemical compliance. For example, during each audit we
inspect environmental permits, waste management, and effluent treatment plants.

In addition, we continued to ask all our core suppliers to complete the Environmental Facilities Module
developed by the Sustainable Apparel Coalition. In 2020, a total of 127 assessments – a 19% increase
compared to 2019 – were subjected to external verification, which equates to an on-site environmental
audit. This figure is complemented by audits our suppliers frequently undergo to obtain environmental
certifications such as those issued by bluesign®, OEKO-TEX® GOTS, GRS, or the Leather Working Group.

↗ T.10 ENVIRONMENTAL ASSESSMENTS OF SUPPLIERS

Assessment Type

HIGG FEM 3.0

bluesign®

Leather Working Group

2020

2019

2018

127

107

Going forward, we will continue to encourage our suppliers to carry out environmental assessments that
follow industry standards. In 2020, we also developed a scoring system for the HIGG Facility Environmental
Module of the Sustainable Apparel Coalition. We will report our core suppliers’ aggregate scores starting in
2021.

Further data on the environmental performance of PUMA and our suppliers can be found in the Climate and
the EP&L sections.

CLIMATE

Target description:
Existing science-based CO2 emission target:
• Reduce greenhouse gas emissions from PUMA’s own entities (Scope 1 and 2) by 35% compared to the

2017 baseline (absolute reduction)

• Reduce emissions from PUMA’s supply chain (Scope 3: purchased goods and services) by 60% relative

to sales

Annual Report 2020 ↗ Sustainability

New 1OFOR25 targets
• Align PUMA’s CO2 emission target with a 1.5 degree scenario (that is, what is required to limit global

warming to 1.5 degrees)

• Move 100% of PUMA’s own entities to renewable electricity
• Expand the use of renewable energy at PUMA’s core suppliers to 25%

Relates to United Nations Sustainable Development Goals 7 and 13

Examples of the 10FOR25 action plan:
• Work with industry peers on climate action through the Fashion Industry Charter for Climate Action and

the Fashion Pact

• Join industry-level energy efficiency programs for suppliers in our top five sourcing regions
• Join industry-level programs for renewable energy in our top five sourcing regions
• Replace all coal-fired boilers at PUMA’s core suppliers
• Reduce emissions from the transport of goods by transitioning to more carbon-efficient modes of

transport

• Gradually transition to materials with a lower carbon footprint such as recycled polyester
• Switch all PUMA offices, stores, and warehouses to renewable electricity tariffs or renewable energy

attribute certificates

• Gradually move PUMA’s fleet vehicles to alternative engines (hybrid, electric, or hydrogen)

Indirect CO2 emissions from own entities (Scope 2)
Indirect CO2 emissions from manufacturing, business travel, and transport of goods (Scope 3)

KPIs:
• Direct CO2 emissions from own entities (Scope 1)
•
•
• Percentage of core suppliers covered by energy efficiency programs
• Percentage of core suppliers covered by renewable energy programs
• Percentage of core suppliers with coal fired boilers (Tier 1 and Tier 2)

During the UN Climate Conference in Paris in 2015, PUMA agreed to set a science-based CO2 emissions
target. In 2018, PUMA co-founded the Fashion Industry Charter for Climate Action, an industry-wide
coalition which aims at aligning the fashion industry’s emissions with the targets included in the Paris
Agreement. One year later, PUMA agreed and published its science-based emission target (SBT) with the
SBT Coalition and joined the Fashion Pact, which also includes a climate action commitment.

In 2020, we continued our transition to renewable energy for the offices, stores, and warehouses under our
control. Through renewable energy tariffs and the purchase of renewable energy attribute certificates
(RECs) where no such tariffs were available, we increased the coverage of renewable electricity within our
own Scope 2 emissions to 100%. To further reduce our Scope 1 emissions, which can be attributed largely
to the vehicles in our fleet, in 2020 we introduced the first six hydrogen cars and expanded the number of
electric cars from two to nine. For the future, we plan to increase the number of cars with alternative
engines by 10% each year.

We combined our SBT agreement with an increased effort to support the use of renewable electricity by
purchasing RECs for countries where PUMA has a major presence and renewable electricity cannot be
purchased directly. We purchased RECs worth 50% of PUMA’s emissions from electricity for 2018
retroactively and increased that figure to 74% in 2019 and to 100% in 2020.

In this way, we managed to lower our combined Scope 1 and 2 emissions by 71% compared to 2019 and by
89% compared to 2017. Taking these RECs into account, we already have hit our science-based emissions

Annual Report 2020 ↗ Sustainability

target of 35% for Scope 1 and 2 emissions. We also achieved the absolute 45% reduction required to align
our target with a 1.5 degree scenario.

Over the coming years, we will aim at replacing the RECs certificates with renewable energy tariffs and/or
power purchase agreements where possible and as mentioned above, expanding the percentage of cars
equipped with alternative engines by 10% each year.

For our Scope 3 emissions, we decided to focus entirely on purchased goods and services since this also is
the category in which many of our indirect emissions are created. In addition, we set a target to reduce
emissions from the transport of goods by 20% relative to the volume transported.

To reduce the emissions from the production of our PUMA goods, we worked with our suppliers on several
programs ranging from energy efficiency to installing on-site solar photovoltaic power plants to generate
renewable energy. The details are shown in the table below:

↗ T.11 SUPPLIER CLIMATE ACTION PROGRAMS

Country

Vietnam China/Taiwan

Bangladesh

Cambodia

Indonesia

Total

Efficiency Program

Clean by
Design (CbD)

Low Carbon
Manu-
facturing
Program
(LCMP)

Partnership
for Cleaner
Textiles
(PaCT)

Renewable Energy Program

GIZ Solar PV

GIZ Solar PV GIZ Solar PV GIZ Solar PV

Number of factories covered
(energy efficiency/renewable
energy projects)

Percentage of core factories
covered (energy efficiency/
renewable energy projects)

Percentage of core factories
with coal fired boilers

50%

24%

80%

13%

34%

In 2021, we will continue working with all our core suppliers to agree on individual reduction plans. We also
plan to launch a program to replace the coal fired boilers used by our core supplier base, ideally under the
umbrella of the Fashion Industry Charter for Climate Action.

Annual Report 2020 ↗ Sustainability

↗ CASE STUDY

When the sun rises over the outskirts of Ho Chi Minh City in Vietnam, the large flat roof of the
Leading Star factory starts to generate electricity and reduce carbon emissions in PUMA’s supply
chain.

The factory, which makes knits and woven apparel for PUMA, installed solar panels on its roof last
year in cooperation with PUMA and German development agency GIZ PDP. After the first phase of
the project was completed in December 2020, Leading Star was able to reduce its carbon emissions
from electricity by 25%. Per year, this installation alone will save 1,331 tonnes of CO2. There are
plans to expand the solar installation so that half of the electricity used by the factory will come from
solar panels.

In China, Ningbo Shenzhou implemented the Clean by Design Program. Thanks to better resource
data management, increased staff awareness, steam valve and pipeline insulation, and an
equipment upgrade, it has seen annual energy savings of up to 7.7% and water savings of up to
13.0%. CO2 emissions have been reduced by 9.7%.

PUMA CLIMATE ACTION PROGRAM

PUMA continues to play a key role in driving industry action, both through a leadership role in the UN-
convened Fashion Industry Charter for Climate Action and through an active role in the Fashion Pact, a
global coalition of companies in the fashion and textile industry working together to help stop global
warming, restore biodiversity, and protect the oceans. PUMA has not only taken decisive action to meet
its own goals around operational and supply chain renewable energy sources, but it has also supported
the rollout of a collective program to rapidly scale improvements on sourcing renewable energy within
key countries. I look forward to seeing even more ambition from PUMA in the future, as it continues its
leadership role on climate action, delivers its existing goals, and aligns its climate targets with a 1.5-
degree pathway.

LAILA PETRIE
CEO 2050, Co-Chair of the Fashion Industry Charter Steering Committee,
Climate delivery partner for the Fashion Pact

↗ G.05 AGREED EMISSION TARGETS (SCOPE 1 AND 2*) (t CO2e)

Annual Report 2020 ↗ Sustainability

Including renewable energy attribute certificates

The reduction of our Scope 3 emissions at the factory level is complemented by purchases of more
sustainable – and therefore less carbon-intensive – raw materials. In 2020, we used 82.8% bluesign®- or
OEKO-TEX®-certified polyester and 16.7% recycled polyester for apparel and accessories, 100% cotton from
the Better Cotton Initiative, and 97.9% leather from Leather Working Group medal rated tanneries. In
addition, 99.0% of our primary paper and cardboard packaging was recycled or FSC-certified paper. By
2025, we aim to use 75% recycled polyester.

Annual Report 2020 ↗ Sustainability

↗ T.12 SCOPE 1 AND SCOPE 2 CO2E EMISSIONS FROM PUMA

CO2e emissions1-6
(absolute figures)

2020

2019

2018

2017

% Change
2019/2020

% Change
2017/2020

Scope 1 – direct CO2e emissions fossil fuels

4,179

6,326

6,918

7,678

-34%

-46%

Vehicle fleet

Heating

Scope 2 – indirect CO2e emissions
(location based)

Scope 2 – indirect CO2e emissions
(market based)

1,985

3,618

4,073

4,134

-45%

-52%

2,194

2,708

2,845

3,545

-19%

-38%

29,839

40,986

43,366

40,029

-27%

-25%

1,078

11,533

22,128

40,029

-91%

-97%

Electricity (location-based)

28,761

39,282

42,145

38,914

-27%

-26%

Electricity (market-based)

9,828

20,907

38,914

-100%

Steam

1,078

1,705

1,221

1,115

-37%

-3%

Total Scope 1 and 2 (location-based)

34,018

47,312

50,284

47,707

-28%

-29%

Total Scope 1 and 2 (market-based)

5,257

17,858

29,046

47,707

-71%

-89%

Scope 1 and 2 relative to sales
(t CO2e per € million sales) (location-based)

Scope 1 and 2 relative to sales
(t CO2e per € million sales) (market-based)

6.5

8.6

10.8

11.5

-24%

-43%

1.0

3.2

6.2

11.5

-69%

-91%

Annual Report 2020 ↗ Sustainability

↗ T.13 PUMA’S SCOPE 3 CO2E EMISSIONS FROM SELECTED VALUE CHAIN ACTIVITIES

CO2e emissions1-6
(absolute figures)

2020

2019

2018

2017

% Change
2019/2020

% Change
2017/2020

Scope 3 – indirect CO2e emissions from
corporate value chain

211,108

250,240

222,315

208,525

-16%

Purchased goods and services – Tier 1 suppliers

113,561

123,769

126,590

123,061

-8%

Fuel- and energy-related activities*

2,855

Upstream transportation and distribution

91,775

107,744

104,347

105,380

-15%

-13%

Inbound

Outbound**

Business travel

67,842

98,386

-31%

23,933

9,358

5,961

6,994

156%

242%

1,751

18,727

15,582

14,394

-91%

-88%

Upstream leased assets*

1,166

Total Scope 1-3 (market-based)

216,365

268,098

251,361

256,232

-19%

-16%

Annual sales PUMA (in € million)

5,234

5,502

4,648

4,136

-5%

27%

Total Scope 1-3 relative to sales
(t CO2e per € million sales) (market-based)

Total Scope 3 relative to sales
(t CO2e per € million sales)

41.3

48.7

54.1

62.0

-15%

-33%

40.3

45.5

47.8

50.4

-11%

-20%

* Emissions from the respective Scope 3 categories were reported under Scope 1 and 2 in previous years.

** In 2020, upstream outbound values were adjusted to fully cover the e-commerce business and exclude B2B express

volumes.

1. PUMA’s greenhouse gas reporting is in line with the GHG Protocol International Accounting Standard.

2. Methodological changes over the last three years have influenced results. In 2020, updated emission factors were applied

and the consolidated structure changed due to full alignment with the GHG Protocol.

3. The consolidation scope follows the operational control approach, including PUMA-owned or -operated offices, warehouses,

stores, and own industrial sites (Argentina).

4. Outsourced Tier 1 production is accounted in the Scope 3 emissions under Purchased goods and services, covering CO2

emissions from all three product divisions (Accessories, Apparel, and Footwear).

5. PUMA applied emission factors from internationally recognized sources such as the International Energy Agency (IEA)

(2019) and DEFRA Conversion Factors (2020). For some Scope 3 emissions, emission factors are based on supplier- and
industry-specific emission factors.

6. For sea freight transportation, PUMA follows the recommendation and new methodology of the Clean Cargo Working Group
that has transitioned from the use of tank-to-wheel (TTW) CO2 to well-to-wheel (WTW) CO2-equivalent emission factors for
all fuels.

Annual Report 2020 ↗ Sustainability

CHEMICALS

Target description:
• 100% of all PUMA products are safe to use
• Reduce RSL failures to below 1%
• Reduce organic solvent usage under 10 gr/pair

Relates to Sustainable United Nations Development Goals 3 and 6

KPIs:
• Number and pass rate of Restricted Substance List (RSL) tests
• Percentage of failure cases at the product level among all styles gone to sales
• Percentage of chemicals used by our core suppliers who are in compliance with the Manufacturing

Restricted Substances List (MRSL) issued by the Zero Discharge for Hazardous Chemicals Foundation
(ZDHC)

• VOCs used in footwear production (VOC index for shoes)

While the effects of potentially hazardous chemicals on human health have yet to be assessed in full, PUMA
takes precautionary measures to prevent harm to human health and the environment from its products and
operations.

All the materials used in PUMA products are subject to our Restricted Substance List (RSL) Testing
Program to ensure compliance with global chemicals regulations.

Rather than applying internal testing standards, for our tests we rely on the AFIRM Group’s Product RSL
and on the Manufacturing RSL developed by the Hazardous Chemicals Foundation (ZDHC).

Since 2018, we have increased the number of RSL tests from 5,318 to 7,465 and decreased our failure rate
from 1.9% to 1.2%. When materials fail an RSL test, they cannot be used for PUMA products until the failure
has been corrected and they successfully pass the test. In this way, we mitigate the risk of product-level
RSL failures.

↗ G.06 2020 RSL FAILURE RATE BY DIVISION (%)

Annual Report 2020 ↗ Sustainability

↗ T.14 RSL TEST STATISTICS 2018-2020

2020

2019

2018

Variation 2019/2020
(%)

Variation 2018/2020
(%)

Product
Division

No. of
test
reports

Compliance
rate (%)

No. of
test
reports

Compliance
rate (%)

No. of
test
reports

Compliance
rate (%)

No. of
test
reports

Compliance
rate

No. of
test
reports

Compliance
rate

Footwear

5,117

99.3

4,668

99.2

3,512

98.4

Apparel

1,318

98.9

1,239

Accessories

Others

878

152

96.8

91.4

99.1

96.2

988

764

639

97.1

37.4

100.0

100

157.6

-8.6

181.5

9.6

6.4

0.1

-0.2

0.6

45.7

33.4

14.9

Total

7,465

98.8

6,605

98.9

5,318

98.1

13.0

-0.1

40.4

0.9

-0.3

-8.6

0.7

At the manufacturing level, as part of our Zero Discharge of Hazardous Chemicals commitment we
continued to ban the intentional use of 11 priority chemical groups classified as particularly hazardous. This
phase-out was supported by the increased use of bluesign®- and OEKO-TEX®-certified materials. While the
use of most of these chemical groups was never intentional, poly-fluorinated chemicals (PFCs) were used
until 2017 for water repellent finishes on apparel and footwear products. In 2020, we engaged in detailed
discussions with Gore-Tex on the potential use of its bluesign®-certified membranes and finishes which are
either completely PFC-free or free from PFCs of environmental concern.

The phase-out of hazardous substances is reflected in the results of wastewater tests performed by our
core wet-processing suppliers: compliance levels of over 94% for each of the parameters listed in the ZDHC
MRSL. Most parameters show compliance rates of 100% or close to 100%, except for harmful AZO Dyes
(98% compliance) and PFCs (94% compliance). Although phased out by PUMA, the two chemicals still were
found in a small number of samples because we share production lines with other brands and retailers.

During 2020, we also successfully piloted the MRSL tracking tool BHive by Goblu. This tool uses a relatively
simple mobile phone application at the chemical-inventory level to track and trace the percentage of MRSL-
compliant chemicals used by suppliers.

With the help of our footwear suppliers we managed to further reduce the number of solvents or volatile
organic compounds (VOCs) per pair to below 15 grams in line with our target projection for 2020. This
reduction was a direct result of our long-standing VOC Program, which saw the first targets achieved as
early as 2003. We are confident that the use of new technologies such as hotmelt adhesives, water-based
adhesives, and improved VOC content in the products of major adhesive suppliers will help us reduce the
amount of organic solvents to below 10 gr/pair by 2025.

↗ G.07 VOC INDEX DEVELOPMENT OVER TIME*

Annual Report 2020 ↗ Sustainability

* Since 2019 figure-based for core suppliers in alignment with the general reporting scope

WATER AND AIR

Annual Report 2020 ↗ Sustainability

Target description:
•

Industry good practice for effluent treatment is met by 90% of core PUMA suppliers with wet-processing
facilities
Industry good practice for air emissions is met by 90% of core PUMA suppliers with significant
emissions

•

• Reduce water consumption at PUMA core suppliers per pair or piece by 15% (based on 2020 baseline)

Relates to United Nations Sustainable Development Goals 6, 14 and 15

Examples of the 10FOR25 action plan:
• Ensure regular wastewater testing at relevant suppliers
• Ensure regular air-quality assessments at relevant suppliers
• Support the development of an industry-wide air quality standard

KPIs:
• Percentage of core suppliers meeting good practice standards for wastewater
• Percentage of core suppliers meeting good practice standards for air emissions
• Percentage of water saved per pair/piece

Since 2015, we have increased the number of wastewater tests from 33 to 72 suppliers and 125 test reports,
covering approximately 96% of all our core suppliers with industrial wet-processing facilities.

The test results confirm that priority hazardous chemicals have been phased out as planned. Regarding the
conventional wastewater parameters that apply only to suppliers that discharge their wastewater directly
into natural water bodies, in 2019 we failed to hit our target of 90% compliance for one out of 17 parameters
(coliform bacteria). However, our suppliers closed this gap in 2020. Consequently, all our core suppliers
now are 90% in compliance with the ZDHC Wastewater Guidelines (foundational level). This means we also
have achieved our last remaining wastewater target from the 10FOR20 cycle.

Annual Report 2020 ↗ Sustainability

↗ G.08 SUPPLIER PERFORMANCE TO ZDHC WASTEWATER QUALITY GUIDELINE –

CONVENTIONAL PARAMETERS

In terms of heavy metals and the chemical parameters regulated in the ZDHC MRSL, the suppliers we
tested were able to keep their high compliance rates above 90% for each parameter measured, with the
exception of antimony. However, antimony is exempt from the ZDHC Wastewater Guidelines for polyester
producers because they use it as a catalyzer.

↗ G.09 SUPPLIER PERFORMANCE TO ZDHC WASTEWATER QUALITY GUIDELINE –

HEAVY METALS

* Antimony is exempt for mills that produce or dye polyester fabric.

Annual Report 2020 ↗ Sustainability

↗ G.10 SUPPLIER PERFORMANCE TO ZDHC WASTEWATER QUALITY GUIDELINE –

RESTRICTED CHEMICALS

Since the publication of the ZDHC Air Emission Guidelines was delayed by the impact of COVID-19 in 2020,
we decided to conduct an internal study to monitor our supply chain’s performance regarding air
emissions. We examined a random sample of 30 core factories air emissions test reports (including point
sources of gas and ambient air quality) for compliance with global (covering major supply chain regions
such as China, Vietnam, Bangladesh, Cambodia, and Indonesia) and local regulations. The result shows that
100% of the core factories sampled were compliant.

Annual Report 2020 ↗ Sustainability

PLASTICS AND THE OCEANS

Target description:
• Support initiative and scientific research on microfibers, work with core suppliers to reduce microfiber

release

• Research biodegradable polyester for use in PUMA products
• Eliminate plastic bags from PUMA stores and review the impact of hangers and fixtures

Relates to United Nations Sustainable Development Goals 3, 14 and 15

KPIs:
• Tons of plastic bags used in PUMA stores
• Percentage of PUMA offices that have eliminated single-use plastic
• Percentage of plastic packaging recycled

↗ T.15 ELIMINATION OF SINGLE USE PLASTICS

Sub-targets

Plastic shopping bags (stores, tons)

Plastic bags (product packaging, tons)

Plastic bags recycled (product packaging, recycled (%))

Offices that have eliminated single-use plastic (%)

Baseline 2020

Target 2025

400

245

4.9%

100%

Plastic pollution of our oceans is one of the most urgent challenges to sustainability of our time. As a
company that uses polymers for most of its products, we have a special responsibility to work on this issue.
Avoiding plastic pollution also is one of the three pillars of the Fashion Pact, of which PUMA is a founding
member. Also, several countries and regions have formed initiatives to ban certain types of single-use
plastics or plastic bags.

Therefore, we have added the Plastics and the Oceans target to our 10FOR25 sustainability strategy.

Plastic shopping bags and single-use plastics aggravate the problem of plastic pollution significantly. By
eliminating them from our stores and office environment we can set a positive example for our consumers
and colleagues and at the same time reduce our use of plastics by several hundred tons per year.

In recent years, we switched our shopping bags to FSC-certified paper bags or polyethylene bags with 80%
recycled content. During 2020, our Retail division devised a detailed plan to completely phase out plastic
bags from our global stores.

Our stores ordered 430 tons of polyethylene bags in 2019 and 400 tons in 2020. We plan to halve this figure
in 2021. By 2023 at the latest, we want to replace all polyethylene bags for consumers with paper bags.

At the same time, we switched other plastic items in our retail stores, such as hangers and shoe fixtures, to
recycled polymers. We also started working on more environmentally friendly solutions for our B2B
product packaging for apparel and accessories, which is also based on polyethylene bags, in collaboration
with the Fashion Pact.

Annual Report 2020 ↗ Sustainability

At our offices, we have challenged our catering partners and employees to avoid single-use plastics such as
coffee cups, lids, stirring sticks, cutlery, or straws.

While Plastics and the Oceans is a new target and we are not quite there yet on a global scale, we have
started to eliminate single-use coffee cups and cutlery, for example, at our headquarters in Germany.

CIRCULARITY

Target description:
• Set up or join product takeback schemes in major markets
• Reduce production waste to landfills by at least 50% (shared target)
• Develop recycled materials as alternatives to leather, rubber, cotton, and polyurethane (shared targets)

Relates to United Nations Sustainable Development Goals 9, 12, 14 and 15

KPIs:
• Percentage of major markets with takeback scheme
• Amount of waste sent to landfills
• Percentage of recycled polyester, cotton, leather, rubber, and polyurethane

↗ T.16 CIRCULARITY TARGET STATUS

Sub-targets

Takeback schemes

Recycled material options
(leather, rubber, cotton, and polyurethane)

Production waste to landfills:

Baseline 2020

Target 2025

Pilot in Hong Kong

3 out of 4 available
(polyurethane under research)

All major
markets
covered

4 out of 4

Apparel: 1.6 gr/piece
Footwear: 17.1 gr/pair
Textiles: 8.9 kg/ton
Leather: 0.2 kg/m2

50% reduction

PUMA’s exploration of the issue of circularity dates back to 2011 when we partnered with Cradle to Cradle
co-founder Michael Braungart. Our rich history as the first company in our industry to develop a Cradle to
Cradle-certified collection – our InCycle collection launched in 2013 – led us to put circularity back on the
agenda with our 10FOR25 sustainability strategy.

We are aware that the linear business model currently applied in our industry is far from the ideal concept
of a circular economy. Despite our best efforts to use more sustainable materials at scale, PUMA is no
exception.

Therefore, we have set circularity targets for ourselves, for example, scaling up the use of recycled
polyester and cotton and using recycled alternatives to leather, rubber, and polyurethane (PU), the
materials we use most frequently after cotton and polyester.

Annual Report 2020 ↗ Sustainability

We also have started to encourage our suppliers to reuse and recycle the fabric waste they are creating for
PUMA production, either through applications outside of our industry or ideally, by recycling offcuts into
polyester or cotton yarns.

At the end of 2020, our material toolboxes included recycled options for all the above materials and nylon.
For recycling and recycled PU, we have entered into a research project with a large chemical company and
aim to announce our first pilot in 2021.

To demonstrate our responsibility as a producer and to secure options for more circular material streams
in the future, we also have set the target to offer takeback schemes in all our major markets by 2025.

In our efforts to extend the lifespan of our products and re-integrate used materials into our production, we
started a project group headed by our Retail division. We aim to pilot the first takeback options in 2021,
complementing our existing takeback pilot scheme in Hong Kong.

At the same time, we partnered with Circle Economy and held a virtual workshop on the definition and
concept of a circular economy and circular product design for our designers, product line managers,
developers, and sourcing teams. The training addressed the challenges and opportunities in our industry to
enhance the cyclability of our products, for example, by designing for longevity, easy disassembly,
modularity, etc.

To communicate our use of recycled materials, we launched our First Mile collection made from recycled
plastic bottles. The concept was well-received and was promoted by several PUMA ambassadors including
Formula One champion Lewis Hamilton and Antoine Griezmann, the star of Spanish football club
FC Barcelona.

In 2021, we plan to scale up our use of recycled materials. We will continue our partnership with First Mile
and launch our first collections made from recycled cotton.

Annual Report 2020 ↗ Sustainability

PRODUCTS

Target description:
• 90% of PUMA apparel and accessories products contain >50% more sustainable materials
• 90% of our footwear contains at least one more sustainable component
•

Increase use of recycled polyester (apparel and accessories) to 75% by 2025 (shared target)

Relates to United Nations Sustainable Development Goal 12

KPIs:
• Percentage of apparel and accessories with 50% more sustainable material
• Percentage of footwear with at least one more sustainable component
• Percentage of recycled polyester used in apparel and accessories

The PUMA Environmental Profit and Loss Account (EP&L) attributes more than 50% of our environmental
impact to material and raw-material production. Against this background, we have decided to prioritize the
large-scale use of more sustainable raw materials. In our 10FOR20 strategy, we had set 90% targets for
more sustainable raw materials such as cotton, polyester, leather, and cardboard.

For the new targets we intend to have achieved by 2025, we have extended previous targets and have
agreed to source 100% of our cotton, polyester, leather, down feathers, and cardboard from more
sustainable sources. In addition to measuring the use of more sustainable materials, we will now also
determine the percentage of more sustainable products, that is, products made with a significant
proportion of more sustainable materials. As defined in our PUMA Sustainability Index, or S-Index, more
sustainable apparel or accessories products have at least 50% more sustainable materials. For footwear,
we currently measure sustainability as including one or more components made from more sustainable
materials.

↗ G.11 PUMA FOREVER BETTER PYRAMID

Annual Report 2020 ↗ Sustainability

KPIs:

↗ T.17 MORE SUSTAINABLE PRODUCTS STATUS

Product Category

Baseline 2020

Target 2025

Apparel with at least 50% more sustainable material

Accessories with at least 50% more sustainable material

Footwear with at least one more sustainable component

81%

47%

24%

90%

Our long-term efforts to scale up more sustainable materials in partnership with our material suppliers
has helped us achieve our target of using 100% more sustainable cotton as early as 2020, five years ahead
of schedule. For polyester (99.5% in apparel and accessories), leather (98% in footwear), and cardboard
(99% shoeboxes and labels) we came very close to achieving our targets.

↗ G.12 MORE SUSTAINABLE MATERIALS DEVELOPMENT

As in previous years, a large percentage of our more sustainable materials can be attributed to cotton from
the Better Cotton Initiative, bluesign®- and/or OEKO-TEX®-certified polyester, and Leather Working Group
(LWG)-certified leather. In addition, we only use down feathers certified by the Responsible Down Standard,
and 100% of our viscose is made by Lenzing, one of the world’s leading viscose suppliers with a proven
track record on sustainability. Therefore, more than 80% of our apparel products already are classified as
more sustainable products, in line with the definition in our PUMA Sustainability Index.

In accessories we also have made good progress: 47% of our products are more sustainable.

Coverage and calculation are more complex for footwear because all our shoes are made from a number of
components. The main materials we use include polyester, polyurethane, rubber, leather, and nylon. In line
with our previous targets, we have achieved 98% coverage of LWG-certified leather. For the other
materials, in 2020 our Sourcing teams worked to find more sustainable solutions that also are cost-
efficient. For example, we now are using recycled materials for all our counters and many of our linings and
have replaced the polyester-based backing of all polyurethane (PU) materials, which we use as an
alternative to leather, with recycled polyester.

Annual Report 2020 ↗ Sustainability

By the end of 2020, 24% of our footwear products had at least one major component classified as more
sustainable. This calculation is based on the use of 98% more sustainable leather (from LWG-certified
tanneries). In 2021, we will work on more accurate internal reporting and on scaling up the use of more
sustainable materials with a clear vision to achieve our 2025 targets.

Besides switching our core materials to more sustainable versions, our product teams have created several
sustainability-focused collections and initiatives. Under our Forever Better Platform, we launched two
lighthouse initiatives in 2020: First Mile, and our Day Zero collection in partnership with Central St. Martin’s
College, London.

While First Mile emphasized the collection and recycling of used plastic bottles and on the related human
stories, our Day Zero collection was inspired by the severe water shortage in Cape Town, South Africa. It
focused on water saving technologies such as dope-dyed polyester or digital printing.

Complementing our lighthouse initiatives, we had further sustainability focused collections in our product
ranges, for example our Time4change and Downtown collections.

↗ T.18 DEVELOPMENT OF MORE SUSTAINABLE MATERIAL USAGE*

Division

Material Targets

% of Total
2020

% of Total 2019

% of Total
2018

Target
2025

100%

BCI cotton: 80%
Organic cotton: 2%

82%

50%

100%

BCI cotton: 99.4%
Recycled cotton: 0.6%

Polyester:
bluesign®: 35.5%
OEKO-TEX®: 45.35%
Recycled: 18.7%

RDS-certified down feathers

Apparel

bluesign®: 55%
OEKO-TEX®: 42%
Recycled: 1%

99.5%

100%

Viscose from green-shirt rated
fiber producers**

Viscose from green-
shirt rated fiber
producers**

100%

98%

66%

100%

BCI cotton: 100%

Polyester:
bluesign®: 57.6%
OEKO-TEX®: 40.4%
Recycled: 2.1%

LWG Medal Rated
leather/recycled leather

Accessories

Footwear

Recycled polyester

100%

97.9%

12.1%

Recycled or natural rubber

11.9%

Recycled or solvent-free PU

Number of vegan styles

bluesign®: 54%
OEKO-TEX®: 46%

100%

46%

100%

97.7%

99%

100%

TBD

Product
packaging

Recycled paper and
cardboard: 86.3%
FSC-certified: 12.7%

99%

Product packaging

100%

92%

100%

* Figures excluding trims and licensee production, in line with previours years' reporting

** Green-shirt rated fiber producers, as determined by the annual Canopy Hot Button report, encourage existing fiber

suppliers to commit to CanopyStyle and a Canopy Audit (https://hotbutton.canopyplanet.org/).

Annual Report 2020 ↗ Sustainability

BIODIVERSITY

Target description:
• Support the industry in setting a science-based target for biodiversity
• 100% of cotton, leather, and down procured from certified sources (shared target)
• Zero use of exotic skins and hides

Relates to United Nations Sustainable Development Goals 14 and 15

KPIs:

↗ T.19 SUSTAINABLY SOURCED BIO-BASED MATERIALS*

Sub-targets

Baseline 2020

Target 2025

Science Based Target (SBT)

Cotton (BCI and/or recycled)

Leather (LWG-certified tanneries)

Down (RDS-certified)

Sustainably sourced viscose / MMCF

Cardboard and paper (FSC and/or recycled)

* excluding trims and licensee production

Joined Fashion Pact
activities on
biodiversity

100%

98%

100%

99% (product
packaging supply
chain)

SBT set

100%

Scientific reports point to the fact that the loss of biodiversity has increased over the last decade. Once
extinct, species can never be brought back and are lost forever. Not only because our logo features a wild
animal, we have decided to dedicate one of our 10FOR25 targets to biodiversity.

PUMA’s impact on biodiversity is indirect yet severe. We use approximately 30,000 tons of cotton and 2,400
tons of leather per year for our products. Both cotton farming and cattle ranching require extensive land
use and have been cited to reduce biodiversity, for example, by transitioning virgin forest to farmland in
South America or depleting the Aral Lake in Central Asia for cotton farming during the Soviet Union era.

In addition, our annual paper and cardboard consumption amounts to 18,500 tons (supply chain only), the
equivalent of 6,000 trees.

To mitigate the loss of biodiversity resulting from the production of our materials, we have set ambitious
targets: As of 2020, 100% of our cotton fibers, 97.9% of our leather, and 99% of our cardboard originates
from preferred sources such as BCI cotton, LWG-certified leather, and recycled and/or FSC-certified
cardboard.

In addition, in 2020 we mapped out our viscose supply chain to ensure that we procure 100% of our viscose
from suppliers committed to reducing the risk of sourcing from Ancient and Endangered Forests.

Annual Report 2020 ↗ Sustainability

In 2021, we will publish an updated Animal Welfare policy and plan to increase our preferred leather and
paper/cardboard volumes to 100%. Not least because we are a signatory to the Fashion Pact, we also will
continue to expand our biodiversity strategy.

ENVIRONMENTAL PROFIT AND LOSS ACCOUNT AND E-KPIS

At PUMA, we pioneered the concept of an EP&L in 2011 with the publication of our first corporate EP&L on
climate and water. Since then, the EP&L has been expanded into other impact categories and has been
further developed by Kering, PUMA’s former majority owner. Today, we continue to collect supply chain
data to populate our PUMA EP&L, which we consider to be a good indicator of where the highest impact lies
within our value chain, rather than a precise measurement tool. Because determining the individual values
is very complex, we have incorporated the results of the 2019 EP&L into this report. We plan to publish our
2020 EP&L in 2021.

↗ G.13 EP&L RESULTS 2019

The chart above shows that the environmental impact of our value chain is dominated by material
processing, while product assembly and raw material production also are important stages of our value
chain.

↗ G.14 PUMA EP&L TREND 2015-2019* (in € million)

Annual Report 2020 ↗ Sustainability

* Since 2019 expanded scope of covered business activities and impacts

Our EP&L trend from 2015 to 2019 clearly indicates an increase in the EP&L value and in revenue. This
means that our environmental footprint also is expanding. Compared to the increased revenue, our EP&L
value has remained stable.

With our ambitious product sustainability targets and updated supplier data in our EP&L we hope to reduce
the EP&L value per revenue significantly over the next five-year target period.

For an overview of the environmental KPIs of PUMA’s entities and core Tier 1 suppliers, please see figures
T.20 and T.21 below. Together with data on our material consumption and manufacturing locations (T.22
and T.23 below), these figures form the basis of the PUMA EP&L.

Annual Report 2020 ↗ Sustainability

↗ T.20 E-KPIS PUMA AND TIER 1 PRODUCTION – ENERGY1-4

Energy (MWh)

Energy from electricity (PUMA own entities)

Non-renewable electricity consumption

2020

2019

2018

2017

% Change
2019/2020

% Change
2017/2020

12,683

29,766

52,508

-100%

Electricity consumption from renewable
sources (green tariffs and on-site photovoltaic)

10,839

11,547

11,695

11,611

Electricity consumption guaranteed with EACs

50,526

37,269

25,051

-6%

36%

-7%

n/a

Total electricity consumption
(PUMA own entities)

Percentage of renewable electricity
consumption (excluding EACs)

Percentage of renewable electricity
consumption (including EACs)

Energy from non-renewable fuels
(oil, natural gas, etc.)

61,365

61,499

66,512

64,119

-4%

18%

16%

15%

18%

100%

79%

55%

18%

10,739

10,975

11,724

14,430

-2%

-26%

Energy from steam

6,247

7,915

5,734

5,155

-21%

Total energy consumption (PUMA own entities)

78,350

80,389

83,970

83,704

-3%

21%

-6%

Non-renewable energy consumption from
PUMA production (Tier 1) (MWh)*

Renewable energy consumption from
PUMA production (Tier 1) (MWh)*

Percentage of renewable energy consumption
from PUMA production

Includes Tier 1 suppliers

221,641

246,160

195,866

194,881

-10%

14%

3,013

1. Figures include PUMA-owned or -operated offices, warehouses, and stores.

2. Data includes extrapolations or estimates where no real data could be provided.

Includes our own production sites in Argentina. All other production is outsourced to independent supplier factories, some
warehouse operations are outsourced to independent logistic providers. Franchised stores are excluded.

4. Methodological changes over the last three years have influenced results.

Annual Report 2020 ↗ Sustainability

↗ T.21 E-KPIS WASTE, PAPER AND WATER OF PUMA AND TIER 1 PRODUCTION

2020

2019

2018

2017

% Change
2019/2020

% Change
2017/2020

Waste, paper, and water

Waste PUMA own entities (tons)

3,021

3,154

4,877

5,293

-4%

-43%

Recycled waste PUMA own entities (tons)

847

1,111

2,282

3,419

-24%

-75%

Recycled waste PUMA own entities (%)

28%

35%

47%

65%

Waste from PUMA production
(Tier 1 suppliers, tons)

23,498

24,205

16,682

14,686

-3%

60%

Percentage production waste to landfills
(Tier 1)

Paper and cardboard consumption PUMA
(tons)*

Certified or recycled paper and cardboard
consumption PUMA (tons)

Percentage of certified or recycled paper
consumption (%)

Paper and cardboard consumption from
PUMA production (shoe boxes, hangtags) (tons)

Percentage of certified or
recycled paper and cardboard consumption
from PUMA production (%)

2,638

2,281

2,292

2,756

16%

-4%

1,848

1,818

1,120

2,025

-9%

70%

80%

49%

74%

18,538

14,863

13,607

14,129

25%

31%

99%

100%

98%

n/a

Water PUMA own entities (m3)

96,569

95,291

89,676

106,397

Water from PUMA production Tier 1 suppliers
(k m3)

2,332

2,572

2,030

2,149

-9%

Including paper bags, office paper, and cardboard consumption of offices, warehouses, and stores

1. Figures include PUMA-owned or -operated offices, warehouses, and stores.

2. Data includes extrapolations or estimations where no real data could be provided.

Includes own production sites in Argentina. All other production is outsourced to independent supplier factories, some
warehouse operations are outsourced to independent logistic providers. Franchised stores are excluded.

4. Methodological changes over the last three years have influenced results.

We continue to work with our core suppliers to reduce their environmental footprint. In 2020, we joined the
Apparel Impact Institute’s Clean by Design Program and expanded our cooperation with the International
Finance Corporation on resource efficiency and renewable energy in Bangladesh. We joined forces with the
German Development Agency GIZ to conduct solar photovoltaic feasibility studies at 22 suppliers across
Asia. Also, we worked with the World Wildlife Fund to train our suppliers on climate action.

There is an overall trend of carbon emission reduction (within our core Tier 1 suppliers) per pair of footwear
(28%) or piece of apparel product (26%) since 2017. During the same period, our core Tier 1 suppliers have
been able to reduce the amount of water per piece of apparel significantly by 39%, while water consumption
at Tier 1 footwear suppliers increased by 4%.

Apparel and footwear suppliers reported an increase in production waste of 23% and 25% respectively,
figures that show there still is work to be done on that KPI. However, as detailed in this report, most of our
Tier 1 production waste is recycled, with only 9% of waste ending up in landfills.

Annual Report 2020 ↗ Sustainability

↗ T.22 FOOTWEAR E-KPI RESULTS

Summary of supplier e-KPIs

Weights

Change

Value

Energy/pair (kWh)

CO2/pair (kg)

Water/pair (l)

Waste/pair (g)

2020

2019

2018

2017 2019-2020 2017-2020

1.31

0.74

1.30

0.96

1.25

0.93

1.40

1.00

-7%

-23%

-26%

15.08

15.21

12.30

14.50

144.80

126.66

108.51

115.90

-1%

14%

25%

Number of
Suppliers

Waste to landfills/pair (g)

↗ T.23 APPAREL E-KPI RESULTS

Summary of supplier e-KPIs

Weights

Change

Value

Energy/piece (kWh)

CO2/piece (kg)

Water/piece (l)

Waste/piece (g)

2020

2019

2018

2017 2019-2020 2017-2020

0.56

0.22

4.60

0.57

0.24

4.39

0.57

0.26

4.20

0.72

0.31

7.58

-2%

-23%

-28%

-39%

54.27

56.33

46.50

44.00

-4%

23%

Number of
Suppliers

Waste to landfills/piece (g)

1.6

Since 2017, we also have been measuring average environmental key performance indicators (E-KPIs) from
fabric and leather manufacturing. As we have included our main material suppliers in our energy and water
efficiency programs and other brands also have expanded their resource efficiency programs to include our
shared material suppliers, we can see a positive trend in performance. Some of the CO2 emissions
reductions can be attributed to coal and oil for boilers being replaced with less polluting fuel sources such
as rice husk or natural gas.

↗ T.24 LEATHER E-KPI RESULTS

Summary of supplier e-KPIs

Weights

Change

Value

Energy/m2 (kWh)

CO2/m2 (kg)

Water/m2 (l)

Waste/m2 (kg)

2020

2019

2018

2017 2019-2020 2017-2020

7.0

2.7

8.2

3.2

8.7

3.2

9.1

3.4

-14%

-23%

-15%

-20%

68.3

74.7

90.2

91.8

-8%

-26%

0.7

0.8

1.6

-13%

-56%

Number of
factories

Annual Report 2020 ↗ Sustainability

↗ T.25 TEXTILES E-KPI RESULTS

Summary of supplier e-KPIs

Weights

Change

Value

Energy/t (kWh)

CO2/t (t)

Water/t (m3)

Waste/t (kg)

2020

2019

2018

2017 2019-2020 2017-2020

13,049.1

12,636.3 13,386.80 13,679.11

4.47

4.37

4.45

-5%

103.4

105.5

122.78

119.30

-2%

-13%

78.9

62.08

70.63

299.59

27%

-74%

Number of
factories

Annual Report 2020 ↗ Sustainability

SUMMARY AND OUTLOOK

Looking back at our last target cycle with the 10FOR20 Targets, we can say that we have achieved one of the
targets we had missed, related to the wastewater quality from our core suppliers with wet-processing
facilities. In 2019, we reported a failure to achieve 90% compliance with the parameter of coliform bacteria.
This gap was closed in 2020. Likewise, we were able to achieve our long-term target of 15grams VOC per
pair of shoes, after having reported 15.4 grams in 2019. We exceeded our 90% target for more sustainable
cotton, up from 82% in 2019 to 100% in 2020. This leaves us with only the air quality target open from the
previous target period, and we also made some progress here by checking a sample of 30 core factories for
compliance to local air quality regulations. The check revealed full compliance for all of the factories
reviewed.

2020 was dominated by the global COVID-19 pandemic and the new challenges it brought for PUMA and our
business partners. Our strategy to collaborate closely with our core suppliers and wholesale partners paid
off during this difficult period. As a result, we were able to limit order cancellations and support our
suppliers with our long-term Vendor Financing Program that is linked to sustainability. Taking this concept
further, we also secured green financing tools for PUMA, in collaboration with ING and Bank of America.

By and large, our 10FOR25 target cycle started out successfully. We significantly increased our internal and
external communications on more sustainable products via our Forever Better Platform
https://about.puma.com/en/forever-better.

At the same time, we were able to source 100% of our cotton, (close to 100%) polyester, viscose and down
feathers for our apparel and accessories ranges from responsible sources. Our footwear division also made
good progress, with nearly all leather as well as paper and cardboard coming from responsible sources.

In addition to introducing more sustainable versions for our base materials, we increased the percentage of
recycled polyester in apparel from 1% in 2019 to 18.7% in 2020 and have started to use recycled cotton
(0.6%). In line with our circularity targets, we developed recycled options for leather, rubber, and nylon and
trained our design and development teams on the principles of circularity.

The reduction of our carbon footprint due to the decrease in air-freight and employee business travel
clearly can be attributed to the COVID-19 crisis. More importantly, we accelerated the transition to
renewable energy: We leased the first six hydrogen cars for PUMA’s fleet, increased our own renewable
electricity coverage to 100%, and assisted our suppliers with introducing on-site or off-site renewable
energy. The base of our program has been secured and we hope to be able to expand it to meet our
ambitious targets by 2025.

Last but not least, we are happy to report that the pandemic has caused the PUMA family to come even
closer together. We look forward to a great 2021 and will keep working hard every day to continue our
sustainability journey.

Annual Report 2020 ↗ Sustainability

GRI INDEX

Index to Separate Combined Non-Financial Report and GRI Content

This report constitutes a separate combined non-financial report in accordance with sections 289b to 289e
and 315b, 315c in conjunction with 289c to 289e of the German Commercial Code (HGB). This consolidated
non-financial report consists of the chapter "Sustainability", the section "Culture" in the chapter "Our
People" as well as the sections "Corporate Social Responsibility" and "Complance Management System" in
the Chapter "Further Information".

The reporting period covered is January 1st, 2020 to December 31st, 2020. 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 98. We have not identified any most significant non-financial performance indicators
according to §289c, section 3, number 5 German Commercial Code (HGB). This combined sustainability
report has undergone a voluntary “limited assurance” with focus on accordance with German CSR
Implementation Act (CSR-RUG) by Deloitte.

Since 2003 PUMA’s sustainability reports are based on the guidelines of the Global Reporting Initiative
(GRI), which developed detailed and widely recognized standards on sustainability reporting. This report has
been prepared in accordance 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.

GENERAL DISCLOSURES

ORGANIZATIONAL PROFILE

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

a. A description of the organization’s activities.
b. Primary brands, products, and services, including
an explanation of any products or services that are
banned in certain markets.

102-1

102-2

102-3

102-4

102-5

Name of the
organization

Activities, brands,
products, and
services

Location of
headquarters

Location of
operations

Ownership and legal
form

102-6 Markets served

a. Markets served, including:

i. Geographic locations where products and

services are offered;

ii. Sectors served;
iii. Types of customers and beneficiaries.

102-7

102-8

Scale of the
organization

Information on
employees and other
workers

The reporting organization shall report the following
information:
a. Total number of employees by employment contract

(permanent and temporary), by gender.

b. Total number of employees by employment contract

(permanent and temporary), by region.

c. Total number of employees by employment type

(full-time and part-time), by gender.

d. Whether a significant portion of the organization’s
activities are performed by workers who are not
employees. If applicable, a description of the nature
and scale of work performed by workers who are
not employees.

e. Any significant variations in the numbers reported
in Disclosures 102-8-a, 102-8-b, and 102-8-c (such
as seasonal variations in the tourism or agricultural
industries).

f. An explanation of how the data have been compiled,

including any assumptions made.

102-9

Supply chain

102-10 Significant changes
to the organization
and its supply chain

a. Significant changes to the organization’s size,

structure, ownership, or supply chain, including:
i. Changes in the location of, or changes in,

operations, including facility openings, closings,
and expansions;

ii. Changes in the share capital structure and the
other capital formation, maintenance, and
alteration operations (for private sector
organizations);

* CSR Directive Implementation Act: Index to Non-Financial Statement

102-103

139, 177

112-114

104, 166

19, 20, 104

102

110-114

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

iii. Changes in the location of suppliers, the

structure of the supply chain, or relationships
with suppliers, including selection and
termination.

27-28

Description

CSR Directive
Implementation*

Page

5-7

33, 150-160

Description

CSR Directive
Implementation*

Page

37, 139-149

Description

CSR Directive
Implementation*

Page

The reporting organization shall report the following
information:
a. Governance structure of the organization, including

committees of the highest governance body.
b. Committees responsible for decision-making on
economic, environmental, and social topics.

139-149

27-28

102-11 Precautionary

principle or
approach

102-12 External initiatives

102-13 Membership of

associations

STRATEGY

102-14 Statement from
senior decision-
maker

102-15 Key impacts, risks,

and opportunities

ETHICS AND INTEGRITY

102-16 Values, principles,

standards, and
norms of behavior

GOVERNANCE

102-18 Governance

structure

102-21 Consulting

stakeholders on
economic,
environmental, and
social topics

* CSR Directive Implementation Act: Index to Non-Financial Statement

STAKEHOLDER ENGAGEMENT

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

102-40 List of stakeholder
groups

102-41 Collective
bargaining
agreements

102-42

Identifying and
selecting
stakeholders

102-43 Approach to
stakeholder
engagement

102-44

Important topics and
concerns

REPORTING PRACTICE

102-45 Entities included in

the consolidated
financial statements

27-28

19, 43

27-28

The reporting organization shall report on the following
information:
a. Key topics and concerns that have been raised
through stakeholder engagement, including:
i. How the organization has responded to those key

topics and concerns, including through its
reporting;

ii. The stakeholder groups that raised each of the

key topics and concerns.

Description

CSR Directive
Implementation*

Page

178-182

The reporting organization shall report the following
information:
a. A list of all entities included in the organization’s

consolidated financial statements or equivalent
documents.

b. Whether any entity included in the organization’s
consolidated financial statements or equivalent
documents is not covered by the report.

102-46 Defining report

content and topic
boundaries

The reporting organization shall report the following
information:
a. An explanation of the process for defining the report

29, 34

content and the topic boundaries.

b. An explanation of how the organization has
implemented the Reporting Principles

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

* CSR Directive Implementation Act: Index to Non-Financial Statement

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

102-53 Contact point for

questions regarding
the report

102-54 Claims of reporting
in accordance with
the GRI Standards

102-55 GRI content index

102-56 External assurance

274

73-89

90-92

The reporting organization shall report the following
information:
a. The claim made by the organization, if it has
prepared a report in accordance with the GRI
Standards, either:
i.

‘This report has been prepared in accordance
with the GRI Standards: Core option’;

ii. ‘This report has been prepared in accordance

with the GRI Standards: Comprehensive option’.

The reporting organization shall report the following
information:
a. The GRI content index, which specifies each of the

GRI Standards used and lists all disclosures
included in the report.

b. For each disclosure, the content index shall include:
i. The number of the disclosures (for disclosures

covered by the GRI Standards);

ii. The page number(s) or URL(s) where the

information can be found, either within the
report or in the other published materials;

iii. If applicable, and where permitted, the reason(s)
for omission when a required disclosure cannot
be made.

The reporting organization shall report the following
information:
a. A description of the organization’s policy and current
practice with regard to seeking external assurance
for the report.

b. If the report has been externally assured:

i. A reference to the external assurance report,
statements, or opinions. If not included in the
assurance report accompanying the
sustainability report, a description of what has
not been assured and on what basis, including
the assurance standards used, the level of
assurance obtained, and any limitations of
assurance process;

ii. The relationship between the organization and

the assurance provider;

iii. Whether and how the highest governance body
or senior executives are involved in seeking
external assurance for the organization’s
sustainability report.

* CSR Directive Implementation Act: Index to Non-Financial Statement

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

63-64

SPECIFIC STANDARD DISCLOSURES

ENVIRONMENTAL TOPICS

MANAGEMENT APPROACH

Materials

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

MATERIALS

Description

CSR Directive
Implementation*

Page

301-1 Materials used by
weight or volume

Part omitted: Materials used by weight or volume
Reason: Confidentiality constraints
Explanation: The total materials’ weights are obtained
to calculate the target progress. For confidentiality
reasons, only the percentages reached are disclosed.

* CSR Directive Implementation Act: Index to Non-Financial Statement

63-64

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

46-47

MANAGEMENT APPROACH

Energy

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

ENERGY

302-3

Energy intensity

Description

CSR Directive
Implementation*

Page

51-52, 70-71

The reporting organization shall report the following
information:
a. Energy intensity ratio for the organization.
b. Organization-specific metric (the denominator)

chosen to calculate the ratio.

c. Types of energy included in the intensity ratio;

whether fuel, electricity, heating, cooling, steam, or
all.

d. Whether the ratio uses energy consumption within

the organization, outside of it, or both.

* CSR Directive Implementation Act: Index to Non-Financial Statement

MANAGEMENT APPROACH

Emissions

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

EMISSIONS

305-1

305-2

305-3

305-4

305-5

Direct (Scope 1) GHG
emissions

Energy indirect
(Scope 2) GHG
emissions

Other indirect
(Scope 3) GHG
emissions

GHG emissions
intensity

Reduction of GHG
emissions

* CSR Directive Implementation Act: Index to Non-Financial Statement

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

47-48

Description

CSR Directive
Implementation*

Page

51-52

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

SOCIAL TOPICS

MANAGEMENT APPROACH

Supplier Social Assessment

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

SUPPLIER SOCIAL ASSESSMENT

Description

CSR Directive
Implementation*

Page

414-1

New suppliers that
were screened using
social criteria

The reporting organization shall report the following
information:
a. Percentage of new suppliers that were screened

using social criteria.

414-2

Negative social
impacts in the
supply chain and
actions taken

The reporting organization shall report the following
information:
a. Number of suppliers assessed for social impacts.
b. Number of suppliers identified as having significant

37-40

actual and potential negative social impacts.
c. Significant actual and potential negative social

impacts identified in the supply chain.

d. Percentage of suppliers identified as having

significant actual and potential negative social
impacts with which improvements were agreed upon
as a result of assessment.

e. Percentage of suppliers identified as having

significant actual and potential negative social
impacts with which relationships were terminated as
a result of assessment, and why.

* CSR Directive Implementation Act: Index to Non-Financial Statement

MANAGEMENT APPROACH

Freedom of Association and Collective Bargaining

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

37-38, 41

FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING

Description

CSR Directive
Implementation*

Page

42-43

407-1

Operations and
suppliers in which
the right to freedom
of association and
collective bargaining
may be at risk

The reporting organization shall report the following
information:
a. Operations and suppliers in which workers’ rights to

exercise freedom of association or collective
bargaining may be violated or at significant risk
either in terms of:
i. Type of operation (such as manufacturing plant)

and supplier;

ii. Countries or geographic areas with operations

and suppliers considered at risk.

b. Measures taken by the organization in the reporting

period intended to support rights to exercise
freedom of association and collective bargaining.

* CSR Directive Implementation Act: Index to Non-Financial Statement

MANAGEMENT APPROACH

Forced or Compulsory Labor

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

35-37

FORCED OR COMPULSORY LABOR

Description

CSR Directive
Implementation*

Page

409-1

Operations and
suppliers at
significant risk for
incidents of forced
or compulsory labor

The reporting organization shall report the following
information:
a. Operations and suppliers considered to have

significant risk for incidents of forced or compulsory
labor either in terms of:
i. Type of operation (such as manufacturing plant)

36-37

and supplier;

ii. Countries or geographic areas with operations

and suppliers considered at risk.

b. Measures taken by the organization in the reporting
period intended to contribute to the elimination of all
forms of forced or compulsory labor.

* CSR Directive Implementation Act: Index to Non-Financial Statement

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

35-37

MANAGEMENT APPROACH

Human Rights Assessment

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

HUMAN RIGHTS ASSESSMENT

Description

CSR Directive
Implementation*

Page

412-1

Operations that have
been subject to
human rights
reviews or impact
assessments

The reporting organization shall report the following
information:
a. Total number and percentage of operations that

have been subject to human rights reviews or human
rights impact assessments, by country.

* CSR Directive Implementation Act: Index to Non-Financial Statement

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

18, 20

Description

CSR Directive
Implementation*

Page

MANAGEMENT APPROACH

Occupational Health and Safety

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

OCCUPATIONAL HEALTH AND SAFETY

403-2

Types of injury and
rates of injury,
occupational
diseases, lost days,
and absenteeism,
and number of
work-related
fatalities

* CSR Directive Implementation Act: Index to Non-Financial Statement

Annual Report 2020 ↗ Sustainability

MANAGEMENT APPROACH

Diversity and Equal Opportunity

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

Description

CSR Directive
Implementation*

DIVERSITY AND EQUAL OPPORTUNITY

Description

CSR Directive
Implementation*

405-1

Diversity of
governance bodies
and employees

The reporting organization shall report the following
information:
a. Percentage of individuals within the organization’s
governance bodies in each of the following diversity
categories:
i. Gender;
ii. Age group: under 30 years old, 30-50 years old,

over 50 years old;

b. Percentage of employees category in each of the

following diversity categories:
i. Gender;
ii. Age group: under 30 years old, 30-50 years old,

over 50 years old;

iii. Other indicators of diversity where relevant (such

as minority or vulnerable groups).

* CSR Directive Implementation Act: Index to Non-Financial Statement

Page

17-18, 146-147

Page

17-18, 146-147

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

141-142

Description

CSR Directive
Implementation*

Page

141-142

ECONOMIC TOPICS

MANAGEMENT APPROACH

Anti-Corruption

103-1

103-2

103-3

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

ANTI-CORRUPTION

205-2

Communication and
training about anti-
corruption policies
and procedures

* CSR Directive Implementation Act: Index to Non-Financial Statement

Annual Report 2020 ↗ Sustainability

Description

CSR Directive
Implementation*

Page

150-151

156

MANAGEMENT APPROACH

Economic Performance

103-1

103-2

103-3

201-2

Explanation of the
material topic and
its boundary

The management
approach and its
components

Evaluation of the
management
approach

Financial
implications and
other risks and
opportunities due to
climate change

* CSR Directive Implementation Act: Index to Non-Financial Statement

Annual Report 2020 ↗ Sustainability

MANAGEMENT APPROACH

Tax

207-1

Approach to tax

Description

A description of the approach to tax, including:
i. whether the organization has a tax strategy and, if
so, a link to this strategy if publicly available;
ii. the governance body or executive-level position

within the organization that formally reviews and
approves the tax strategy, and the frequency of this
review;

iii. the approach to regulatory compliance;
iv. how the approach to tax is linked to the business and

sustainable development strategies of the
organization.

„WE PAY OUR FAIR SHARE“ is
the core principle the PUMA-
Group is taking into
consideration for its global tax
strategy. In this regard, PUMA
fully commits to act in
accordance with all international
tax regulations and to fulfill any
tax obligations arising from its
business activities.

PUMA is not following artificial
structures solely to save taxes
by those. Of course, taxes play a
role in business decisions so to
know those and so to do the
right thing, however, tax
consequences are not the
relevant drivers for failing a final
sign off on business strategies
in this regard.

It is key for PUMA to pay an
appropriate portion of its pre-tax
profit to tax administrations in
the respective countries. Paying
tax is accepted as a general
business principle of PUMA. An
effective tax rate of around 25%
over the last years confirms to
this. As it’s a general principle
for PUMA to follow tax rules and
to pay applicable taxes, taxes as
such are not a material issue
within the sustainably approach.
Consequently, Puma does not
report in detail on the GRI-
Standard in this regard.

Annual Report 2020 ↗ Sustainability

DELOITTE ASSURANCE STATEMENT

INDEPENDENT AUDITOR’S REPORT ON A LIMITED ASSURANCE ENGAGEMENT

Translation – German version prevails

To PUMA SE, Herzogenaurach

Our engagement
We have performed a limited assurance engagement on the Separate Non-Financial Group Report of PUMA
SE (hereinafter: “the Company”) in accordance with Section 315b German Commercial Code (HGB), which
was combined with the Non-Financial Report of the parent company, PUMA SE, Herzogenaurach, in
accordance with Section 289b German Commercial Code (HGB) for the period from January 1 to December
31, 2020 (hereinafter: “Combined Non-Financial Report”). This Combined Non-Financial Report consists of
the chapter “Sustainability”, the section “Culture” in the chapter “Our People” and the sections
“Compliance Management System” and “Corporate Social Responsibility” in the chapter “Corporate
Governance Statement in accordance with Section 289f and Section 315d HGB” of the Annual Report 2020 of
PUMA SE, Herzogenaurach. The sections under “Environmental Profit and Loss Account” (EP&L) including
tables G.13 and G.14 in the chapter “Sustainability” as well as case studies and references to interviews, the
Company's website and external websites were not part of our engagement.

Responsibility of the legal representatives
The legal representatives of PUMA SE are responsible for the preparation of the Combined Non-Financial
Report in accordance with Sections 315b, 315c German Commercial Code (HGB) in connection with Sections
289c to 289e German Commercial Code (HGB).

In preparing the Combined Non-Financial Report, the legal representatives used the Sustainability
Reporting Standards of the Global Reporting Initiative (GRI) with the option “Core” and have indicated these
within the Combined Non-Financial Report.

The responsibility of the Company’s legal representatives includes the selection and application of
appropriate methods for preparing the Combined Non-Financial Report as well as making assumptions and
estimates related to individual non-financial 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 Combined Non-Financial Report that is free from material
misstatements, whether intentional or unintentional.

The accuracy and completeness of the environmental data in the Combined Non-Financial Report are
inherently subject to limits that result from the manner in which data is collected and calculated and
assumptions made.

Practitioner´s responsibility
Our responsibility is to express a limited assurance conclusion on the Combined Non-Financial Report,
based on the assurance engagement we have performed.

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.

Annual Report 2020 ↗ Sustainability

Our audit firm applies the German national legal requirements and the German professional
pronouncements on quality control, in particular the Professional Charter for German Public Auditors and
German Sworn Auditors (Berufssatzung für Wirtschaftsprüfer und vereidigte Buchprüfer) as well as the
Quality Assurance Standard: Quality Assurance Requirements in Audit Practices (IDW QS 1) promulgated by
the Institut der Wirtschaftsprüfer (IDW), which comply with the International Standard on Quality Control 1
(ISQC 1) issued by the International Auditing and Assurance Standards Board (IAASB).

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 Combined Non-Financial Report
has not complied, in all material respects, with Sections 315b, 315c in connection with Sections 289c to
289e German Commercial Code (HGB). 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.

Within the scope of our limited assurance engagement, which was performed from November 2020 to April
2021, 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 relevant employees that participated in the preparation of the
Combined Non-Financial Report about the process of preparation, the measures on hand and
precautionary measures (system) for the preparation of the Combined Non-Financial Report as well as
about the information within the Combined Non-Financial Report
Identification of the risks of material misstatement within the Combined Non-Financial Report

•
• Analytical evaluation of selected disclosures within the Combined Non-Financial Report
• Reconciliation of the disclosures within the Combined Non-Financial Report with the respective data

within the consolidated financial statements as well as the management report

• Evaluation of the presentation of the disclosures

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 Combined Non-Financial Report of the Company,
for the period from January 1 to December 31, 2020 has not complied, in all material aspects, with Sections
315b, 315c German Commercial Code (HGB) in connection with Sections 289c to 289e German Commercial
Code (HGB). The audit opinion only refers to the chapter “Sustainability”, the section “Culture” in the
chapter “Our People” and the sections “Compliance Management System” and “Corporate Social
Responsibility” in the chapter “Corporate Governance Statement in accordance with Section 289f and
Section 315d HGB” of the Annual Report 2020 of PUMA SE, Herzogenaurach. Our opinion does not refer to
sections under “Environmental Profit and Loss Account” (EP&L) including tables G.13 and G.14 in the
chapter “Sustainability” as well as case studies and references to interviews, the Company's website and
external websites.

Annual Report 2020 ↗ Sustainability

Purpose of the assurance statement
We issue this report on the basis of the engagement agreed with PUMA SE, Herzogenaurach. The limited
assurance engagement has been performed for purposes of PUMA SE, Herzogenaurach, and the report is
solely intended to inform PUMA SE, Herzogenaurach, 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 PUMA SE, Herzogenaurach, and is also restricted under the engagement
agreed with PUMA SE, Herzogenaurach, on November 13, 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.

Munich/Germany, April 6, 2021

Deloitte GmbH (cid:2)(cid:1)

Wirtschaftsprüfungsgesellschaft

Signed:

Dr. Thomas Reitmayr

Sebastian Dingel

(German Public Auditor)

Annual Report 2020 ↗ Combined Management Report

COMBINED MANAGEMENT REPORT
FOR THE FINANCIAL YEAR 2020

100

102

104

Overview 2020

PUMA Group Essential Information

Commercial Activities and Organizational Structure

Targets and Strategy

Product Development and Design

Sourcing

Employees

107 Management System

108

109

110

Information regarding the Non-financial Report

Economic Report

General Economic Conditions

Sales

112 Regional Development

114 Results of Operations

118 Dividends

119 Net Assets and Financial Position

122

125

126

130

132

139

Cash Flow

Statement regarding the Business Development and the Overall Situation of the Group

Comments on the Financial Statements of PUMA SE in accordance

with the German Commercial Code (HGB)

Further Information

Information concerning Takeovers

Compensation Report

Corporate Governance Statement in accordance with Section 289f and Section 315d HGB

150 Risk and Opportunity Report

161 Outlook Report

Combined Management Report:
This report combines the Management Report of the PUMA Group
and the Management Report of PUMA SE.

Annual Report 2020 ↗ Combined Management Report

OVERVIEW 2020

↗ MICHAEL LÄMMERMANN

CHIEF FINANCIAL OFFICER PUMA

Throughout 2020, the COVID-19 pandemic presented PUMA with several challenges that affected almost all
parts of our business. When the pandemic started in China in January, some factories of our suppliers had
to shut down or could not operate at full capacity, which was a challenge for our supply chain. To ensure the
safety and health of our customers and employees, we implemented hygiene measures at our offices,
warehouses and retail stores. As the virus spread to other parts of the world, large sporting events were
either cancelled or postponed and most of our owned and operated stores had to be closed completely or
partially in the second quarter. While the third quarter was once again very strong, new lockdowns and
travel restrictions had a negative impact on our business in the fourth quarter. We had to quickly react to all
of these changes. PUMA’s mantra was to survive and manage this crisis short-term without hindering our
mid-term momentum. Therefore, we determined three key objectives: to limit the inevitable decline in sales
as much as possible, to secure the supply chain and to reduce costs as well as to ensure liquidity.

To make sure that our brand did not lose momentum, we continued to invest in a full line of products for the
upcoming seasons and welcomed several new marketing partners. In September, we signed a long-term
contract with football star Neymar Jr., one of the most successful athletes of his generation. Neymar Jr.
played in the PUMA KING football boot, which was also worn in the past by PUMA football legends Pelé,
Cruyff and Maradona. We also welcomed English singer and songwriter Dua Lipa as a Women’s
ambassador, who will appear in important campaigns for the brand. Canadian model Winnie Harlow joined
the PUMA family in early 2020, and already headed the marketing campaigns for several new footwear
franchises, including the KYRON and the MILE RIDER.

We expanded our presence in basketball by signing one of the top picks of the 2020 NBA draft, LaMelo Ball.
At the start of the year, we signed Grammy Award-winning artist J. Cole, who combines the worlds of music
and basketball. PUMA also announced a partnership with creative director June Ambrose, who will create
girls and women’s collections throughout 2021 and beyond.

Annual Report 2020 ↗ Combined Management Report

In football, Dutch club PSV Eindhoven, and Ukrainian club Shakhtar Donetsk as well as the national
federations of Iceland and Paraguay joined the PUMA family, just to name a few. To also expand our brand’s
presence in other teamsports, we signed the German Handball Federation. In track and field, we signed a
new partnership with the Australian and South African Athletics Federations. PUMA also signed Jamaican
athletes Tajay Gayle, the long-jump World Champion, as well as Omar McLeod, the reigning Olympic
Champion in 110-meter hurdles and the 2017 World Champion over the same distance.

Our regular sell-in meetings, during which we usually welcome sales managers from all over the world in
Herzogenaurach, were held digitally for the first time in 2020 because of the pandemic. We also looked for
ways to design and develop our products digitally, without the need for people to travel to the factories in
Asia, and with a reduced number of samples to be physically shipped from those factories to Germany. For
the most part, we also communicated digitally with our retail partners, for example during pre-line and
sell-in meetings.

We maintained a strong dialogue with our manufacturers, customers, landlords, banks, logistic partners
and other partners to ensure that we took measures together to sustain the entire value chain. To ensure
that our manufacturing partners could continue to operate, we cancelled as few orders as possible, while
securing more favorable payment terms. We also worked with our retail partners, logistic partners and
suppliers to adjust delivery dates and at the same time to extend payment terms to share the burden across
the whole value chain.

Despite the crisis, we did not neglect the social and environmental aspects of our supply chain and
announced our ten new sustainability targets for 2025, 10FOR25. Examples of these targets include PUMA’s
commitment to further lower its CO2 emissions and to use at least 75% recycled polyester across all
apparel and accessories products by 2025. We are also in the process of phasing out plastic bags from all of
our retail stores globally.

To further strengthen our e-commerce business in this exceptional time, we quickly reacted to the
increased demand in our e-commerce stores and strongly increased our investments in performance
marketing. We improved the speed of our e-commerce platform PUMA.com and adapted our offering to the
stay-at-home situation by giving more space to leisurewear as well as sports apparel. Our e-commerce
business delivered strong growth in 2020.

We also made good progress with the upgrade of our logistics network, as we opened our new distribution
center in Indianapolis, USA. The center will speed up delivery times, as most US customers can now be
reached within two days. We continued to work on our central European warehouse in Geiselwind,
Germany, which is expected to be operational in the second quarter of 2021.

When sales slowed down sharply in the first half of the year, we reacted quickly by reducing costs and cash
outflows wherever possible. We also secured additional liquidity to ensure that we could survive the crisis,
together with our partners. In May, PUMA secured a new credit facility of €900 million through a banking
consortium of twelve banks, including a direct participation of the Kreditanstalt für Wiederaufbau (KfW) of
€625 million. So far, we have not made use of this credit facility and by the end of the year we reduced it by
€700 million to only €200 million. In December, for refinancing purposes, PUMA secured new promissory
note loans of €250 million and increased its existing credit lines at banks by €450 million. We used short-
time work programs or comparable foreign schemes to reduce costs. The suspension of the dividend
payment and the suspension of 100% of the Management Board’s salary as well as the reduction of salaries
of our senior management by 25%-35% in April and May 2020 were essential measures to reduce cash
outflow.

Annual Report 2020 ↗ Combined Management Report

When many of our brand ambassadors and consumers were confined at home, we looked for new ways of
engaging with our audience. We created a series of live videos on social media platforms, which we called
#StrongerTogether. These live videos included talks with our football ambassadors Sergio Agüero and
Nikita Parris, yoga sessions with Sportstyle ambassador Cara Delevingne, interviews with Formula 1 driver
Max Verstappen or workouts with pole vaulter Mondo Duplantis. Apart from supporting PUMA’s social
media channels and e-commerce, these videos also created significant coverage in traditional media
outlets.

Even though regular competitions, such as the Olympic Games in Tokyo, were cancelled or postponed in
2020, our athletes still entered the history books and set new personal bests. PUMA athlete Armand
“Mondo” Duplantis entered the history books this year by setting a new pole vault world record. In
February, he cleared 6.18-meters at an indoor event and in September, he broke the 26-year-old outdoor
record by jumping 6.15-meters. In June, Norway's Karsten Warholm achieved the current best result ever
in a solo race in the 300-metre hurdles. In motorsport, PUMA brand ambassador Sir Lewis Hamilton
became Formula 1 World Champion for the seventh time, equaling Michael Schumacher's existing record of
seven world titles. In golf, PUMA player Bryson DeChambeau won the U.S. Open.

The COVID-19 pandemic has shown that local relevance is key and that the market situation can vary
significantly between regions. To reflect this, we empowered decision-making by local management even
more. Additionally, different countries have different sports that people follow and participate in. One of the
best examples of local relevance is our partnership with Virat Kohli, the captain of the Indian national
cricket team. Cricket is by far the most popular sport in India and by partnering with Virat, PUMA gains
credibility as a sports brand in India.

PUMA’s sales and business development in the financial year 2020 were characterized by temporal and
regional differences during the course of the COVID-19 pandemic. PUMA started the year with a very
positive order book and strong and balanced growth in all regions. Following a good start to the year for
China with double-digit sales growth in wholesale, e-commerce and our own retail stores, the Chinese
market shut down in the last week of January. For the following six weeks, almost all business in China -
with the exception of e-commerce - came to a standstill. As China began to recover from mid-March, the
virus spread around the world, leaving nearly 80% of our own retail stores and many of our retail partners’
stores closed by the end of the first quarter. As a result, PUMA’s sales declined by 1.3% currency-adjusted
during the first quarter. The business environment was particularly difficult in April and May, with most of
our own stores and those of our retail partners closed during this period. Retail stores began to open again
from June onwards, initially in EMEA and Asia, and later in North America. Due to this extremely difficult
business environment, PUMA recorded a currency-adjusted sales decrease of 30.7% during the second
quarter. After 85% of PUMA’s own retail stores reopened at the beginning of July and the business
environment improved significantly, third-quarter sales saw a currency-adjusted increase of 13.3% year-
on-year, driven by a very strong recovery in EMEA and the Americas.
During the fourth quarter, however, the number of COVID-19 infections again rose sharply worldwide. This
once again led to restrictions and consumer sentiment worsened. PUMA nevertheless achieved a currency-
adjusted sales growth of 9.1% in the fourth quarter. By adding up the four quarters, sales for the full year
2020 recorded a currency-adjusted decrease of 1.4%. In the reporting currency, the Euro, this corresponds
to a decrease in sales of 4.9% from €5,502 million in the previous year to €5,234 million in 2020. PUMA
therefore managed to keep the sales decrease resulting from the COVID-19 pandemic in 2020 to a
minimum.

The negative impact of the COVID-19 pandemic not only affected PUMA’s net sales, but was also the main
reason for the decline in profitability respectively operating result (EBIT) during the past financial year.
PUMA’s gross profit margin fell by 180 basis points from 48.8% in the previous year to 47.0% in 2020. This
was mainly due to negative currency exchange effects from hedging due to a less favorable annual average
US dollar hedging rate in 2020 compared to the previous year. In addition, increased sales promotions to
limit the decline in sales as far as possible and to optimize inventory levels, alongside increased write-
downs on inventories, contributed to the decline in gross profit margin in 2020. By contrast, the higher

Annual Report 2020 ↗ Combined Management Report

share of sales from our own-retail activities, including our e-commerce business, and an improved regional
sales mix had a slightly positive effect on the development of gross profit margin.

The strong focus on cost-saving measures implemented directly in response to the COVID-19 pandemic at
the end of the first quarter and during the second quarter led to a 0.3% decrease in other operating income
and expenses during the financial year 2020. Nevertheless, compared to sales, the cost ratio increased
from 41.3% in the previous year to 43.3%. Higher costs for warehousing and logistics in connection with
increased e-commerce business and higher write-downs on receivables were offset by reduced spending in
sales and marketing.

Due to the decline in sales and gross profit margin, which could not be compensated for by the reduction in
other operating expenses, the operating result (EBIT) saw an overall decrease of 52.5%, from
€440.2 million in the previous year to €209.2 million in 2020. This corresponds to a decline in EBIT margin
from 8.0% in the previous year to 4.0% in 2020. The declining financial result, resulting from higher interest
expenses and higher negative currency conversion differences, also contributed to a 69.9% year-on-year
reduction in consolidated net earnings and earnings per share in the past financial year. Consolidated net
earnings fell from €262.4 million in the previous year to €78.9 million, while earnings per share fell
accordingly from €1.76 in the previous year to €0.53. This enabled PUMA to achieve positive net earnings
and positive earnings per share during the past financial year, despite the severe negative impact of the
COVID-19 pandemic, particularly in the second quarter.

Positive net earnings enable the Management Board and the Supervisory Board to propose a dividend
payout of €0.16 per share for the financial year 2020 to the Annual General Meeting on May 5, 2021. This
corresponds to a payout ratio of 30.3% of consolidated net earnings and is in accordance with PUMA’s
dividend policy, which foresees a payout ratio of 25% to 35% of consolidated net earnings. However,
payment is subject to the condition that the macroeconomic conditions allow for a payout. The dividend was
waived in the previous year in order to reduce cash outflows during the COVID-19 pandemic.

The performance of the PUMA share price during 2020 was also strongly influenced by the negative effects
of the COVID-19 pandemic. Based on the previous year’s numbers, PUMA’s share price started 2020 at a
price of €68.35, before falling to a low of €42.14 in mid-March 2020, at the height of the COVID-19 crisis on
the capital markets worldwide. The PUMA share price then recovered significantly from this low by the end
of the year, rising to €92.28 - an increase of 35.0% on the previous year. The market capitalization of the
PUMA Group increased accordingly to around €13.8 billion at year-end 2020 (previous year: €10.2 billion).

Annual Report 2020 ↗ Combined Management Report

PUMA GROUP ESSENTIAL INFORMATION

COMMERCIAL ACTIVITIES AND ORGANIZATIONAL STRUCTURE

PUMA SE operates as a European stock corporation with Group headquarters in Herzogenaurach, Germany.
In the internal reporting, our business activities are mapped according to three regions (EMEA, the
Americas and Asia/Pacific) and three product divisions (footwear, apparel and accessories). A detailed
description can be found in the segment reporting in chapter 25 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 directly to consumers in our own retail stores 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, 2020, 101 subsidiaries were controlled directly or indirectly by PUMA SE. Our
subsidiaries carry out various tasks at the local level, such as distribution, 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 has continued its brand mission to become the fastest sports brand in the world. Therefore, we
continued to focus on the following six strategic priorities: create brand heat, develop product ranges that
are right for our consumers, build a comprehensive offer for women, improve the quality of our distribution,
increase the speed and efficiency of our organizational infrastructure and strengthen our positioning in the
North American market by leveraging our re-entry into basketball. In 2020, we also added an even stronger
focus on local relevance and sustainability as additional strategic priorities for PUMA.

For more than 70 years, PUMA has created brand heat by partnering with the most famous and successful
athletes: Usain Bolt, Sir Lewis Hamilton, Pelé, Maradona, Tommie Smith, Boris Becker, Linford Christie,
Serena Williams, Heike Drechsler and Martina Navratilova, just to name a few. Today, PUMA continues to
strengthen its position as a sports brand through partnerships with some of the most famous
ambassadors: the Italian national football team, star strikers Antoine Griezmann, Romelu Lukaku, Sergio
Agüero and Luis Suarez, top football manager Pep Guardiola, international top clubs Manchester City,
Borussia Dortmund, Valencia CF, Olympique Marseille and AC Milan, golf stars Lexi Thompson, Rickie
Fowler and Bryson DeChambeau, seven-time Formula 1 world champion Sir Lewis Hamilton, Norwegian
hurdler and world champion Karsten Warholm, Canadian sprinter André De Grasse, Swedish pole vault
world record holder Mondo Duplantis and the Jamaican and Cuban Olympic Federations. In 2020, we also
added Brazilian football star Neymar Jr. to our roster of world-class assets, underlining our continued
focus on the football category. Teaming up with the best athletes, teams and federations is key in keeping
the credibility of the PUMA brand at the highest levels. To connect with young, trend-setting consumers,
PUMA also drives brand heat by working with icons of culture and fashion such as Selena Gomez, Cara
Delevingne, Winnie Harlow and Dua Lipa. This has made PUMA one of the hottest sports and fashion brands
for young consumers.

PUMA aims to design “cool stuff that works” and in 2020, we significantly improved our product offering
across all our business units. In performance footwear, we keep on moving forward with the revolutionary
PUMA ULTRA football boot and our running & training shoes based on our proprietary NITRO, HYBRID and
XETIC technology platforms.

Annual Report 2020 ↗ Combined Management Report

In Sportstyle, we continued to see strong sell-through of our key footwear product families of RS, RIDER,
and CALI. The demand from our consumers for these franchises has been maintained through the launch of
strong new models in 2020. The Classics pillar with models such as the iconic SUEDE, the RALPH
SAMPSON or the SPEEDCAT also continued to perform strongly throughout the year.

In apparel and accessories, we saw a good development across the portfolio, especially from motorsport
and basketball apparel as well as our essentials offering, which includes socks and underwear.

Our COBRA Golf and PUMA Golf business also showed a strong performance in 2020, mainly driven by
higher sales of our innovative COBRA Golf clubs. Especially our COBRA Golf SPEEDZONE Drivers enjoyed
market share growth globally with the introduction of the innovative CNC Milled Infinity Face leading to
maximum ball speed and higher precision - a first in the golf industry.

Creating a leading product offer for women remains a priority for PUMA and we continue our mission to be
the most fashion-forward sports brand for the female consumer. In 2020 we evolved our positioning of
“PUMA owns the space where the gym meets the runway” as more and more women take up sports
worldwide and athletic wear has long made its way into everyday outfits. As we identified a culture shift in
our female consumer from “me” to “we” we defined our new “She Moves Us” communications platform,
which celebrates women who move together to achieve and connect – through sport, culture and values.

Returning to basketball, with an approach that resonated well on and off the court, was an important step
towards increasing our credibility as a sports brand in North America. With the support of JAY-Z, our
Creative Director for basketball, we developed a strong product offering across footwear, apparel and
accessories that can be worn on and off the court. We also continued to work with highly talented NBA
players across several teams and gained great on-court visibility when PUMA athletes Kyle Kuzma and
Danny Green won this year’s NBA Championship with the Los Angeles Lakers. Signing a long-term
partnership with the top 2020 NBA prospect LaMelo Ball further underlines our commitment to basketball.
Our basketball business also continues to grow beyond the key North American market, and we saw
continued strength in our performance basketball product portfolio and basketball inspired Sportstyle
product families such as the RALPH SAMPSON.

While basketball is especially important for North America, we also focused on ensuring strong local
relevance in all our other markets worldwide. As the PUMA brand and products continue to resonate well
around the world, we see an increased need to focus on the sports, ambassadors, collaboration partners
and communication platforms that are most relevant in the different markets. A good example for this is
India, where we have a market-leading position in part due to our strong presence in the nation’s most
popular sport of cricket and our long-term partnership with Virat Kohli, the captain of the Indian national
cricket team. We also continued to strengthen our position in other locally relevant sports such as handball,
netball, rugby or Australian rules football. Over the years, we have also established a strong portfolio of
locally relevant brand ambassadors and influencers that complement our roster of top global assets and
strengthened our presence on locally relevant communication platforms such as Weibo, Youku or WeChat
in China. In order to be closer to the market and to ensure a strong local relevance of our products, we also
have Regional Creation Centers in key markets such as North America, Europe, India, China and Japan that
work in part on joint product creation projects with local collaboration partners.

PUMA improved the quality of its distribution and expanded its presence in key Sports Performance and
Sportstyle accounts around the world. We continued to strengthen the relationships with our retailers by
being a flexible and service-oriented business partner, also throughout the COVID-19 crisis. By improving
sell-through, we further expanded the shelf space given to us in our partners’ retail stores. In parallel, we
also continued to invest in our direct-to-consumer business which includes our owned-and-operated retail
stores as well as our e-commerce business. Due to mandatory store closures during the COVID-19 crisis
and an accelerated shift towards digital, we saw strong growth in our e-commerce business and invested in
our respective front-end and back-end capabilities. We continued to improve the user experience and
product offering on our existing e-commerce channels and launched a new e-commerce site in the
important Mexican market. We also increased our investments into performance marketing to drive traffic

Annual Report 2020 ↗ Combined Management Report

and conversion in all our e-commerce channels. Furthermore, PUMA continued to upgrade its owned-and-
operated retail store network and opened selective new doors around the world.

Operationally, we continued to improve infrastructure, processes and systems that are required to support
our overall growth ambition. In 2020, a strong focus was put on expanding our logistical network in key
markets. Our new, highly automated multi-channel distribution center in Indianapolis, USA successfully
went live in the second quarter of 2020 and an additional multi-channel distribution center in Geiselwind,
Germany is expected to open in the second quarter of 2021. New state-of-the-art distribution centers like
the ones in Geiselwind and Indianapolis are providing us with the required back-end infrastructure to
support our future growth in the wholesale and direct-to-consumer channels.

Beyond distribution center expansion, PUMA continued to focus on standardization of ERP systems and
enhancements of product development tools. This, combined with improvements of the overall IT
infrastructure, enabled faster and better communication and information exchange within PUMA and with
our external partners. Due to the travel restrictions during the COVID-19 crisis, we also invested in
additional digital capabilities along the whole go-to-market process, from virtual product development to
virtual sell-in meetings.

In sourcing, the long-term collaboration with suppliers remains the key component of our sourcing strategy
to ensure a stable sourcing base, consistent quality of our products and being well prepared for changes in
the trade environment. The strong collaboration with our suppliers, who are mainly based in Far East, has
helped us during the COVID-19 crisis and contributed to a very resilient supply chain situation throughout
the year.

While social, economic and environmental sustainability has always been a core value for PUMA, we want
to place an even higher strategic emphasis on this topic with a special focus on increasing the number of
sustainable products in our ranges and stronger consumer-facing communication. In 2020 we officially
announced our 10FOR25 targets that outline our ambitious sustainability-related objectives until the year
2025 and which link back to the United Nation’s Sustainable Development Goals. In 2020, we also launched
our FOREVER BETTER communication platform that will serve as the overarching umbrella of all our
consumer-facing communication on sustainability. Because of our increased focus on developing more
sustainable products, we successfully introduced the PUMA x FIRST MILE and PUMA x CENTRAL SAINT
MARTINS sustainability collections with strong feedback from our retailers and end consumers. Other
product highlights include the Time4Change youth collection made of organic cotton. PUMA also continued
its leading role at the Fashion Charter for Climate Action and continued to work with key stakeholders on
all levels to promote more sustainable business practices within our industry. In relation to human rights,
we took all required actions to safeguard our suppliers and workers during the pandemic by honoring our
purchasing commitments and ensuring that all workplace safety and legal standards are met through our
long-standing social compliance program.

PRODUCT DEVELOPMENT AND DESIGN

In 2020, we significantly improved our product offering across all our business units. As a company with
more than 70 years of history of moving sports and culture forward, our designers have access to a vast
archive and often take inspiration for tomorrow’s styles from yesterday’s classics.

The RIDER, originally a running shoe from the 1980s, was one of our most important footwear styles in 2020
and it was introduced in several new versions and colors throughout the year.

In our Sportstyle business unit, we continued to see strong sell-through of our main footwear franchises RS
and CALI. The appetite from our consumers for these franchises was maintained, as we launched several
new models in 2020, such as the RS Fast.

The RS even found its way into our lineup of golf products, where it sold well as the RS-G golf shoe.

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Together with Grammy-winning artist J.Cole, PUMA also designed a basketball shoe that uses RS foam, the
RS-DREAMER. It was worn on the basketball court by our PUMA Hoops athletes and sold out quickly.

Classic silhouettes, including the iconic PUMA SUEDE or the SPEEDCAT, also continued to perform well
throughout the year. We brought together some of the most iconic shoes from our history, such as the
RALPH SAMPSON, the ROMA and the RIDER to create the Rudolf Dassler Legacy Collection.

In performance footwear, we continued to develop the revolutionary PUMA ULTRA football boot, which was
relaunched in August as the ULTRA 1.1. This boot featured PUMA exclusive MATRYXEVO® technology, which
provides a very high level of stability, durability and traction.

In Motorsport, PUMA made the dreams of motorsport fans come true, as we sold the professional racing
boot SPEEDCAT PRO, which Formula One drivers such as Sir Lewis Hamilton, Max Verstappen or Charles
Leclerc wear on race day, to a wider audience for the first time.

In Running & Training, shoes based on our proprietary HYBRID technology sold well. As part of a sponsored
research collaboration with MIT Design Lab, PUMA also developed a new cushioning technology called
XETIC. It combines the properties of mechanical cushioning and foam. XETIC was first introduced in the
CALIBRATE RUNNER and will continue to be used in footwear styles across different business units.

Our COBRA Golf and PUMA Golf business also showed a strong performance in 2020, driven by high sales of
our innovative golf clubs, such as the SPEEDZONE Driver. This product was used by Bryson DeChambeau to
win the U.S. Open, which boosted demand. PUMA Golf also launched the Excellent Golf Wear Collection,
which was designed to perform on the course but remained routed in lifestyle.

In apparel and accessories, we saw a good development across the portfolio, especially in Motorsport, Core
and Prime apparel, where we presented several special collections.

Alongside PUMA ambassador and LGBTQ+ activist Cara Delevingne, we launched the “From PUMA with
Love” pack to celebrate Pride Month. The Unity Collection highlighted PUMA’s sports heritage, and featured
simple black and white designs with pops of color, drawn from international flags. In a collaboration with
New York design studio KidSuper, PUMA combined elements of football culture with retro tailoring, bold
prints, vivid color combinations.

In Motorsport, PUMA released two legacy collections with Porsche, which were inspired by the history of
the German car brand and the legendary Porsche 911 Turbo.

We also continued to offer products for professional gamers and launched a new collection with esports
brand Cloud9, which for the first time also included matching footwear.

We also presented new collections with a focus on sustainability. Our sportswear collection with First Mile
is made with recycled yarn that is manufactured from plastic bottles collected in the First Mile network. Our
collaboration with London-based design school Central Saint Martins implemented cutting edge dyeing
technologies such as “Dope Dye” and digital printing, to reduce the use of chemicals and water.

Still at an experimental stage, our innovation department presented the “Design to Fade” biodesign project,
which explored sustainable alternatives for dyeing and making textiles.

Research and product development at PUMA mainly comprise the areas of innovation (new technologies),
product design and model and collection development. 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.

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As of December 31, 2020, a total of 1,049 people were employed in research and development/ product
management (previous year: 999). In 2020, research and development/ product management expenses
totaled €102.6 million (previous year: €114.3 million), of which €56.6 million (previous year: €61.7 million)
related to research and development.

SOURCING

THE SOURCING ORGANIZATION

PUMA Group’s sourcing functions, referred to as PUMA Group sourcing (PGS), manages all sourcing
related activities for PUMA and Cobra, including vendor selection, product development, price negotiation
and production control. These activities are centrally managed by PUMA International Trading GmbH (PIT),
the group’s global trading entity, with its head office in the Corporate headquarters in Herzogenaurach
(Germany). In addition, PIT is responsible for procurement and supply into the PUMA distribution channels
worldwide. PIT receives volume forecasts from PUMA subsidiaries and licensees worldwide, translates
these forecasts into production plans which are subsequently distributed to the referenced vendors. The
PUMA subsidiaries confirm their forecasts into purchase orders to PIT, which in turn consolidates these
requirements and purchases from the vendors. There is a clear buy/sell relationship between the sales-
subsidiaries and PIT and between PIT and the vendors, for added transparency.

The centralization of both the sourcing and procurement functions, along with the rollout of a cloud-based
purchase order collaboration and payment platform, linking the sales-subsidiaries, PIT and the vendors,
has enabled the digitalization of the supply chain creating transparency, operational efficiency and reducing
complexity. For example, container fill rates are optimized, foreign currency risks are managed by PIT
directly via a centralized currency hedging policy, and all payments to vendors are automated and paper
free.

In order to meet our customers’ requirements concerning service, quality, social and environmental
compliance we focus on six core strategic pillars of collaboration, product, quality, growth management,
margins and landed cost, and sustainability. The centralization of sourcing and procurement allows for
continuous improvements in all of these areas.
Furthermore, the integration of the PUMA sustainability function (social, environmental and chemical) into
PGS, ensures these focus areas are part of our day to day business.

This year has been exceptionally challenging for almost all parts of our business and not least for our
supply chain, especially in the first half of the year. When the COVID-19 pandemic first hit China and other
parts of Asia, our suppliers had to close their factories or could only operate at reduced capacity. We
immediately focused our efforts on tracking and restoring production capacities with our partners. As the
supply chain situation in Asia improved, Europe, America and the remaining parts of the world were
impacted by COVID-19 and consequential lockdowns. Many stores of our wholesale partners, as well as our
own retail stores, had to close temporarily and therefore no longer accepted new products. From the
beginning we emphasized the responsibility to find solutions in such exceptional circumstances together
with our partners. We wanted to sustain the entire value chain and get through this crisis together. PUMA
cancelled very few orders with suppliers, in total less than 1% of the total order volume 2020. We agreed
with some suppliers on longer lead times in order to react to the decreased demand in the sales markets.
We were in close conversation with our manufacturers, customers, lessors, banks, logistics partners and
other partners to find solutions and, for example, to extend payment terms in order to spread the burden of
the COVID-19 pandemic across the entire value chain.

Another key aspect to mitigate the impact on the supply chain was the PUMA Vendor Financing Program,
which has been in place since 2016 and saw increased adoption among our partners during this year. The
program allows vendors to be paid earlier and is based on PUMA's credit rating. The International Finance
Corporation (IFC), the banks BNP Paribas and HSBC, as well as our newest partner Standard Chartered,

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offer our suppliers attractive financing conditions and the opportunity to maintain their own credit lines
under this program.

THE SOURCING MARKETS

During the financial year 2020, PIT purchased from 139 independent suppliers (previous year: 131) in 31
countries worldwide. Strategic cooperation with long-standing partners not only remained one of the key
competitive advantages, but also proved crucial in 2020 to ensure stable sourcing in such exceptional times.

Asia remains the strongest sourcing region overall with 96% of the total volume, followed by EMEA with 2%
(thereof Europe with 1% and Africa with 1%) and the Americas with 2%.

As a result, the six most important sourcing countries (94% of the total volume) are all located on the Asian
continent. Once more, Vietnam was the strongest production country with a total of 35%. Vietnam thus
continued to increase its share of the sourcing volume by two percentage points compared to 2019. China
followed at 26%. Bangladesh, which focuses on apparel, is in third place at 14%. Cambodia was in fourth
place at 13%. Indonesia, which focuses on footwear production, produces 4% of the total volume and is in
fifth place. India is in sixth place at 2%.

Rising wage costs, fluctuating commodity prices and macroeconomic influences, such as changes in the
trade environment due to tariffs, have continued to influence sourcing markets in 2020. Such impacts need
to be taken into account in allocating the production to ensure a secure and competitive sourcing of
products. In this regard sourcing has extended its local supply chain for the China sales-subsidiary to
provide the right organizational setup with a focus on design, costing and lead time. To mitigate the
negative impact of the international trade environment, alternative sourcing locations for the US market
have been used since the fourth quarter of 2019.

↗ G.01 SOURCING REGIONS OF PUMA (in %)

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EMPLOYEES

NUMBER OF EMPLOYEES

The global number of employees on a yearly average was 13,016 employees in 2020, compared to 13,348 in
the previous year. The annual average number of employees saw a slight decline due to short-time work
programs or comparable foreign schemes as a result of the COVID-19 pandemic. Personnel expenses
decreased overall by 8.9% in 2020, from €640.5 million to €583.7 million. On average, personnel expenses
per employee were €44.8 thousand, compared to €48.0 thousand in the previous year.

↗ G.02 DEVELOPMENT EMPLOYEES

As of December 31, 2020, the number of employees was 14,374, compared to 14,332 in the previous year.
This represents a slight increase of 0.3% in the number of employees compared to the previous year. The
development in the number of employees per area is as follows:

↗ G.03 EMPLOYEES (Year-end)

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TALENT RECRUITMENT AND DEVELOPMENT

The past financial year has been marked by the extraordinary challenges posed by the global COVID-19
pandemic. Nevertheless, we have managed to successfully master all that 2020 threw at us, adapting
locally to the new conditions as quickly as possible - with our main focus being on the well-being of our
employees. The development of our organization through digital transformation and the establishment of
an agile learning platform and culture provided the basis for this rapid adaptability. This was another
reason why we were able to keep our business operating as smoothly as possible during the various phases
of extensive social distancing measures imposed by governments around the world and the expansion of
existing mobile working (working from home) arrangements within the workforce. The provision of
additional IT equipment and targeted support for the mental well-being of our employees during the crisis
were key elements. During these COVID-19 times, of course particular emphasis was placed on creating a
safe working environment and avoiding financial cuts for our employees. Thanks to the strong feeling of
solidarity and a high level of engagement among our employees, we feel well-positioned to continue along
our path to further growth.

To further expand our position in the market, it is crucial to have highly qualified and motivated staff whom
we can retain for the long term. Particularly in this constantly changing and increasingly complex
environment, the creativity and innovative strength of our employees are an important element in ensuring
our competitiveness and facilitating growth in the future.

We use digital platforms and social media for our target group-specific, individual recruiting measures, as
well as our career website, to attract external candidates. A range of initiatives at universities gives us the
opportunity to approach potential employees and identify suitable candidates. Extensive networks of
qualified applicants and candidate pools help us to quickly fill vacancies. In the competitive labor market,
being an attractive employer and being perceived as such by current and potential employees are of critical
importance. Top employer rankings and multiple awards evidence PUMA's attractiveness.

Digitalization and the associated global simplification and acceleration of business processes were driven
forward in 2020. Since 2017, we have been using the “Workday” software solution for almost all personnel
processes. This software provides employees and managers with the processes and tools required for daily
personnel management. In addition, easy-to-use dashboards provide managers with the information and
data-driven insights they need for planning and management. The analysis of our centrally available global
data provides a solid basis for strategic decisions and measurable results.

Our aim is to develop our employees in an international environment and at the same time successfully and
sustainably retain them in our company. 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. We
identify the talent available within the group as part of annual performance reviews and global talent
conferences and foster talent development based on individual development plans. This type of talent
management means that we can offer our employees attractive career and development opportunities.
Over the past year, we continued to fill the majority of our key positions through internal promotions or
horizontal moves around the world.

In order to cope with the dynamic changes in the market and be successful in the long run, it is essential
that our workforce has the necessary expertise to guarantee continuous growth and market competence,
particularly in times of major transformation and extensive change. We ensure this through the ongoing
professional and personal development of our employees. For this reason, we expanded the range of
training that we provide, which includes a number of online and offline training courses and workshops,
either standardized or tailored to individual needs, even further in 2020. With “LinkedIn Learning” and
“Good Habitz” our employees have been able to access more than 16,500 different online training courses
since the beginning of last year. A wide range of learning categories are available for self-directed personal
and professional development. Learning content covering topics such as mental well-being, resilience,
mindfulness and emotional stability in particular helped us as an employer to provide the best possible
support to our employees around the world in this exceptional situation. Due to social distancing measures,

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face-to-face training was largely replaced with digital options so that we could continue to offer these
courses.

With a range of apprenticeships and dual-study programs, as well as study-related internships, we offer
adequate entry-level and development opportunities for talented individuals at all levels. In addition, we
actively promote the systematic development of our professionals and managers.

All managers worldwide complete our internal global leadership training program, consisting of the ILP
(“International Leadership Program”) and ILP². In this way, we ensure a common understanding of
leadership globally throughout the company. The program helps to develop participants over a longer
period, provides them with the opportunities to apply the newly acquired knowledge in practice between the
individual modules and to share knowledge with other seminar participants to learn from each other. They
receive intensive training and coaching, including interactive learning, role play simulations and best
practice learning, as well as joint projects. The digitalization and the changing work environment lead to
new challenges for managers in particular. The key topics are therefore coaching, mindful leadership and
agile working methods. The training course “from employee to manager” prepares staff that are about to
take on a management role for the first time. In addition to the training module, the program also offers
individual coaching.

Using Speed Up and Speed Up², we conduct development programs for employees at different 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 job rotations. Increased visibility to upper management, the creation of cross-functional cooperation and
establishing a strong network are also important components of this program.

WORKS COUNCIL

The trust-based collaboration with the Works Councils is an important part of our corporate culture. In
2020, the European Works Council of PUMA SE represented employees from 13 European countries and
had 16 members. The German Works Council of PUMA SE has 15 members and represents the employees
of the PUMA Group in Germany. A designated member of the Works Councils represents the interests of
employees with disabilities.

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 form part of an attractive and performance-based compensation system. In
addition, we offer our employees comprehensive services in the areas of further development, employee
motivation, health management and wellbeing. We also offer long-term incentive programs for the senior
management level that honor the sustainable development and performance of the business. The bonus
system is transparent and globally standardized. Incentives are exclusively linked to company goals. Due to
the global COVID-19 pandemic, members of senior management around the world voluntarily gave up part
of their base salary and the entire long-term incentive for 2020 to improve cash flow and earnings. To
reward the special efforts made by our employees in this challenging time, we also gave a PUMA product
voucher to all PUMA Group employees worldwide. This is particularly beneficial to employees in the lower
pay grades.

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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 key targets within finance-related areas. Our focus therefore is on
improving sales 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 in the event such deviations have a negative impact.

Changes in net 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 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.

We use the indicator working capital in order to assess the financial position. Working capital is essentially
the difference between current assets - including in particular inventories and trade receivables - and
current liabilities. Cash and cash equivalents, the positive and negative market values of derivative financial
instruments and current finance and lease liabilities are not included in working capital.

Non-financial performance indicators are of only minor importance at PUMA.

The calculation of the key financial control parameters that PUMA uses is defined as follows:

The recognition of net sales is based on the provisions of IFRS 15 Revenue from contracts with customers.

PUMA’s gross profit margin is calculated as cost of sales divided by net sales. Cost of sales mainly
comprise the carrying amounts of inventory that were recognized as expenses during the reporting period.

PUMA’s operating result (EBIT) is the sum of net sales and royalty and commission income, minus cost of
sales and other operating income and expenses (OPEX). EBIT is defined as operating result, less
depreciation and amortization, provisions and impairment loss, before interest (= financial result) and
before taxes. The financial result includes interest income and interest expenses as well as currency
conversion differences. The EBIT margin is calculated as EBIT divided by net sales.

PUMA’s working capital is calculated based on the sum of current assets less the sum of current liabilities.
In addition, cash and cash equivalents and positive and negative market values of derivative financial
instruments are deducted. The market values of derivative financial instruments are recognized in the
balance sheet in the items Other Current Assets and Other Current Liabilities, not attributable to working
capital. Current financial and lease liabilities are also not part of working capital.

We also use the EBITDA indicator, which represents the operating result before interest (= financial result),
taxes and depreciation and amortization, to assess the results of operations. EBITDA is calculated based on
the operating result (EBIT) adding depreciation and amortization, which may also contain any incurred

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impairment expenses relating to fixed assets and financial assets. The EBITDA margin is calculated as
EBITDA divided by net sales.

INFORMATION REGARDING THE NON-FINANCIAL REPORT

In accordance with Sections 289b and 315b of the German Commercial Code (Handelsgesetzbuch - HGB),
we are required to make a non-financial declaration for PUMA SE and the PUMA Group within the
Combined Management Report or present a non-financial report external to the Combined 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 Non-financial Report for the financial year 2020 will be available by April 30, 2021,
at the latest on the following page of our website: https://about.PUMA.com/en/investor-relations/financial-
reports

Furthermore, important sustainability information can always be found in the Sustainability section of
PUMA’s website: http://about.PUMA.com/en/sustainability

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ECONOMIC REPORT

GENERAL ECONOMIC CONDITIONS

GLOBAL ECONOMY

According to the winter forecast issued by the Kiel Institute for the World Economy (ifw Kiel) dated
December 16, 2020, in the past financial year the global economy suffered a historic downturn due to the
COVID-19 pandemic. The experts at ifw Kiel expect global gross domestic product (GDP) to decline by 3.8%
overall in 2020, which is by far the strongest economic decline in the past 70 years. Following the drastic
economic downturn caused by the COVID-19 pandemic in the spring, the global economy recovered strongly
until the fall; however, growth weakened during the fourth quarter as a result of a further wave of infections
and the measures to contain it. Nevertheless, with the exception of only a few countries, economic
development remains on an upward trend, especially in Europe. This is due, not least, to the continued
strong expansionary monetary policy pursued by central banks in industrialized countries. The majority of
these banks have again extended the expansionary measures they introduced in the spring in response to
the COVID-19 crisis, or have pushed back expectations for the timing of tightening measures. Interest rates
in the emerging markets have also tended to fall further in recent months. Expansionary economic policies
and an expectation of overcoming the pandemic, mainly due to success in the development of an effective
vaccine against COVID-19, are already being reflected in the financial markets.

SPORTING GOODS INDUSTRY

2020 was a very difficult year for the sporting goods industry. Wide-reaching lockdown measures and area-
wide retail store closures aimed at containing the COVID-19 pandemic had a very negative impact on the
sporting goods industry worldwide, particularly during the second quarter. Furthermore, this could only be
partially offset by rising e-commerce sales. In addition, the sporting goods industry was further impacted by
the cancellation or postponement of major sporting events, such as the European Football Championship
and the Tokyo Olympic Games. However, as a result of the COVID-19 pandemic, more exercise and physical
activity, as well as an increasingly healthy and sustainable lifestyle, continued to gain in importance for an
ever-increasing proportion of the world’s population. The “stay-at-home” situation has also resulted in the
increased popularity of athletic footwear and leisure/athletic apparel as an integral part of everyday fashion
(“athleisure”).

109

Annual Report 2020 ↗ Combined Management Report

SALES

ILLUSTRATION OF SALES DEVELOPMENT IN 2020 COMPARED TO THE OUTLOOK

PUMA’s 2019 Management Report had predicted a currency-adjusted growth in net sales of around 10% for
the financial year 2020. However, due to the significant negative impact and considerable uncertainty of the
COVID-19 pandemic, this forecast had to be withdrawn when the results were published for the first quarter
of 2020.

More details on sales development in the financial year 2020 are provided below.

NET SALES

PUMA’s net sales in the reporting currency Euro decreased by 4.9% to €5,234.4 million in the financial year
2020 as a result of the worldwide negative impact of the COVID-19 pandemic (previous year:
€5,502.2 million). Sales recorded a currency-adjusted decrease of 1.4%. PUMA therefore managed to keep
the sales decrease resulting from the COVID-19 pandemic in 2020 to a minimum.

↗ G.04 SALES (€ million)

In the Footwear division, sales fell in the reporting currency, the Euro, by 7.2% to €2,367.6 million.
Currency-adjusted sales decreased by 3.1%. The decline in sales affected all categories, except Sportstyle
and Basketball. The share of this division in total net sales fell from 46.4% in the previous year to 45.2% in
2020.

In the Apparel division, sales fell in the reporting currency, the Euro, by 4.6% to €1,974.1 million. Sales saw
a currency-adjusted decrease of 1.5%. A decline in sales was recorded in all categories except Sportstyle,
Motorsport and Basketball. The share of the Apparel division increased slightly to 37.7% of Group sales
(previous year: 37.6%).

110

Annual Report 2020 ↗ Combined Management Report

In the reporting currency, the Euro, the Accessories division recorded a slight sales increase of 1.3% to
€892.7 million, despite the COVID-19 pandemic. This corresponds to a currency-adjusted sales growth of
3.5%. Higher sales, particularly of socks, bodywear and Cobra golf clubs, contributed to this increase in
sales. The division’s share in Group sales increased accordingly from 16.0% in the previous year to 17.1% in
2020.

↗ G.05 SALES BY PRODUCT DIVISIONS (€ million)

RETAIL BUSINESSES

PUMA’s own retail activities include direct sales to our consumers (“Direct to Consumer business”). This
includes selling to our customers in PUMA’s own retail stores, the so-called “Full Price Stores”, “Factory
Outlets”, and the e-commerce business on our own online platforms. Our own retail businesses 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 by 6.4% currency-adjusted to €1,424.5 million in the financial year 2020. This
corresponds to a share of 27.2% in total sales (previous year: 25.4%). While sales at PUMA’s own retail
stores declined in 2020 due to restrictions aimed at containing the COVID-19 pandemic and the resulting
temporary closure of stores in many countries around the world, our e-commerce business recorded
strong growth of over 60%, supported by an increased focus on performance marketing and successful
promotions. In addition, our e-commerce activities on special days in the online business - such as Singles’
Day in China, the world’s biggest online shopping day, on November 11, as well as “Black Friday” on
November 27 and “Cyber Monday” on November 30 - turned out to be particularly successful.

111

Annual Report 2020 ↗ Combined Management Report

↗ G.06 RETAIL SALES

LICENSING BUSINESS

PUMA grants licenses to independent partners for various product divisions, such as watches, glasses,
safety shoes and gaming accessories such as the Playseat. In addition to design, development and
manufacture, these companies are also responsible for product distribution. Income from license
agreements also includes some distribution licenses for different markets. PUMA’s royalty and commission
income decreased by 36.0% to €16.1 million in the financial year 2020. Alongside the negative effects of the
COVID-19 pandemic, this decrease was due, among other things, to the expiry of license agreements at the
end of 2019.

REGIONAL DEVELOPMENT

In the following explanation of the regional distribution of sales, the sales are allocated to the customer’s
actual region (“customer site”). It is divided into three geographical regions (EMEA, the Americas 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 25 of the Notes to the Consolidated Financial
Statements.

PUMA’s net sales fell in the reporting currency, the Euro, by 4.9% in the financial year 2020. This
corresponds to a currency-adjusted sales decrease of 1.4% compared to the previous year. All regions were
affected by the significant negative impact of the global COVID-19 pandemic.

In the EMEA region, sales fell in the reporting currency, the Euro, by 0.9% to €1,982.9 million. This
represents a slight sales increase of 1.5%, currency adjusted. While sales growth was achieved in France,
Spain, Russia, Ukraine and Turkey, for example, Italy, the UK, the Nordics and South Africa, among others,
recorded declining sales. The EMEA region accounted for an increased 37.9% of Group sales in 2020,
compared to 36.4% in the previous year.

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Annual Report 2020 ↗ Combined Management Report

With regard to product divisions, sales revenue from Footwear recorded a currency-adjusted decline of
0.9%. Sales of Apparel saw a currency-adjusted increase of 5.4% due to positive developments in the
Sportstyle and Motorsport categories. Accessories sales were down by 0.4%, currency adjusted.

↗ G.07 EMEA SALES (€ million)

In the Americas region, sales fell in the reporting currency, the Euro, by 8.7% to €1,775.2 million. Currency-
adjusted sales decreased by 3.0%. Both North America and Latin America recorded negative currency
exchange effects and a decrease in sales. In particular, the weakness of the Argentine peso against the
Euro had a significant negative impact on sales in Latin America in the reporting currency, the Euro. The
share of the Americas region in Group sales decreased slightly from 35.3% in the previous year to 33.9% in
2020.

With regard to product divisions, both Footwear (currency-adjusted -3.3%) and Apparel (currency-adjusted
-9.6%) recorded a decline in sales compared to the previous year. By contrast, sales in the Accessories
division saw a currency-adjusted increase of 9.5%, due in particular to an increase in sales of Cobra golf
clubs, socks and bodywear.

↗ G.08 AMERICAS SALES (€ million)

In the Asia/Pacific region, sales fell in the reporting currency, the Euro, by 5.2% to €1,476.3 million. This
corresponds to a currency-adjusted sales decrease of 3.2%. While a positive sales development was seen in
Greater China in 2020, sales fell in India, Japan and South Korea, among other countries. The share of the
Asia/Pacific region in Group sales fell slightly from 28.3% in the previous year to 28.2% in 2020.

113

Annual Report 2020 ↗ Combined Management Report

In terms of product divisions, sales revenue from Footwear (currency-adjusted -5.2%) and from Apparel
and Accessories (both currency-adjusted -1.5%) saw a decrease.

↗ G.09 ASIA/PACIFIC SALES (€ million)

RESULTS OF OPERATIONS

↗ T.01 INCOME STATEMENT

Net Sales

Cost of sales

Gross profit

2020

2019

€ million

+/- %

5,234.4

100.0%

5,502.2

100.0%

-2,776.4

-53.0%

-2,815.8

-51.2%

2,458.0

47.0%

2,686.4

48.8%

-4.9%

-1.4%

-8.5%

Royalty and commission income

16.1

0.3%

25.1

0.5%

-36.0%

Other operating income and expenses

-2,264.9

-43.3%

-2,271.3

-41.3%

-0.3%

Operating result (EBIT)

209.2

4.0%

440.2

8.0%

-52.5%

Financial result

-46.8

-0.9%

-22.6

-0.4%

107.2%

Earnings before taxes (EBT)

162.3

3.1%

417.6

7.6%

-61.1%

Income taxes

Tax rate

-39.2

-0.7%

-108.6

-2.0%

-63.9%

24.2%

26.0%

Net earnings attributable to non-controlling
interests

-44.2

-0.8%

-46.6

-0.8%

-5.1%

Net earnings

78.9

1.5%

262.4

4.8%

-69.9%

Weighted average shares outstanding
(million)

Weighted average shares outstanding,
diluted (million)

Earnings per share in €

Earnings per share, diluted in €

149.56

0.53

149.52

1.76

0.0%

-69.9%

114

Annual Report 2020 ↗ Combined Management Report

ILLUSTRATION OF EARNINGS DEVELOPMENT IN 2020 COMPARED TO THE OUTLOOK

In the outlook of the 2019 Annual Report, PUMA forecasted a slight improvement in the gross profit margin
for the financial year 2020. PUMA expected a slightly weaker increase of other operating income and
expenses (OPEX) compared to net sales. The forecast for the operating result (EBIT) was within a range of
between €500 million and €520 million. In addition, a significant improvement in net earnings was expected
for the financial year 2020. However, due to the significant negative impact and considerable uncertainty of
the COVID-19 pandemic, this forecast had to be withdrawn when the results were published for the first
quarter of 2020.

More details on earnings development in the past financial year are provided below.

GROSS PROFIT MARGIN

PUMA’s gross profit in the financial year 2020 decreased by 8.5% from €2,686.4 million to €2,458.0 million.
The gross profit margin fell by 180 basis points from 48.8% to 47.0%. This was mainly due to negative
currency exchange effects from hedging due to a less favorable annual average US dollar hedging rate in
2020 compared to the previous year. In addition, increased sales promotions to limit the decline in sales as
far as possible and to optimize inventory levels, alongside increased write-downs on inventories,
contributed to the decline in gross profit margin in 2020. In contrast, the higher proportion of sales from
our own-retail activities and an improved regional sales mix had a slightly positive effect on the
development of gross profit margin.

The gross profit margin in the Footwear division decreased from 46.4% in the previous year to 45.7% in
2020. The Apparel gross profit margin fell from 51.1% to 48.5%, and in Accessories it also decreased from
50.5% to 47.0%.

↗ G.10 GROSS PROFIT/GROSS PROFIT MARGIN

115

Annual Report 2020 ↗ Combined Management Report

OTHER OPERATING INCOME AND EXPENSES

The strong focus on cost-saving measures implemented directly in response to the COVID-19 pandemic at
the end of the first quarter and during the second quarter led to a slight decrease in other operating income
and expenses of 0.3%, from €2,271.3 million to €2,264.9 million in the financial year 2020. Nevertheless,
compared to sales, the cost ratio increased from 41.3% in the previous year to 43.3%.

↗ G.11 OPERATING EXPENSES (€ million)

Within sales expenses, marketing/ retail expenses decreased by 5.6% to €1.050,2 million, while the cost
ratio remained almost unchanged compared to the previous year at 20.1% of sales. Other sales expenses,
which mainly include sales-related costs and costs for warehousing and logistics, increased by 4.9% to
€743.9 million. This increase was mainly due to higher costs for warehousing and logistics in connection
with the increased e-commerce business. The cost ratio of the other sales expenses was 14.2% of sales in
2020 compared to a cost ratio of 12.9% in the previous year.

Research and development/ product management expenses decreased by 10.2% to €102.6 million
compared to the previous year and the cost ratio fell slightly to 2.0%. Other operating income in the past
financial year amounted to €0.4 million and consisted primarily of income arising from the sale of fixed
assets. General and administrative expenses increased by 8.5% to €368.8 million in 2020, mainly due to
increased write-downs on receivables, as the negative macroeconomic impact of the COVID-19 pandemic
increased the risk of default on receivables in the financial year 2020. This led to an increase in the cost
ratio of general and administrative expenses to 7.0%. Depreciation and amortization is included in the
relevant costs and total €275.7 million (previous year: €246.4 million). In addition, the respective costs
include impairment losses relating to goodwill and right-of-use assets totaling €18.0 million (previous year:
€0.0 million).

RESULT BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)

The result before interest (= financial result), taxes, depreciation and amortization (EBITDA) decreased by
26.8%, from €686.6 million to €502.9 million, in the financial year 2020. The EBITDA margin reduced
accordingly from 12.5% in the previous year to 9.6% in 2020.

116

Annual Report 2020 ↗ Combined Management Report

OPERATING RESULT (EBIT)

The decline in sales and gross profit margin due to the negative impact of the COVID-19 pandemic, which
could not be compensated for by the reduction in other operating expenses, led to an overall decrease in
the operating result (EBIT) of 52.5%, from €440.2 million in the previous year to €209.2 million in 2020. This
corresponds to a decline in EBIT margin from 8.0% in the previous year to 4.0% in 2020.

↗ G.12 OPERATING RESULT - EBIT

FINANCIAL RESULT

The financial result decreased in 2020 from a total of €-22.6 million in the previous year to €-46.8 million.
This development is attributable, on the one hand, to losses from currency conversion differences
amounting to €-3.9 million in 2020 compared to gains from currency conversion of €10.2 million in the
previous year. On the other hand, the interest result, the net balance of interest income and interest
expenses, fell from a total of €-32.8 million in the previous year to €-42.9 million in 2020. The decrease in
interest result was mainly attributable to an increase of €11.6 million in expenses from interest
components related to cash flow hedging (“swap points”).

EARNINGS BEFORE TAXES (EBT)

In the financial year 2020, PUMA generated earnings before taxes of €162.3 million. This corresponds to a
decrease of 61.1% compared to the previous year (€417.6 million). Tax expenses were €39.2 million
compared to €108.6 million in the previous year, while the tax rate decreased slightly from 26.0% to 24.2%
in 2020.

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 these interests
decreased by 5.1% to €44.2 million in the financial year 2020 (previous year: €46.6 million). These
companies concern PUMA United North America and PUMA United Canada. The business purpose of these
companies is the sale of socks, bodywear and children’s apparel on the North American market.

117

Annual Report 2020 ↗ Combined Management Report

NET EARNINGS

In the financial year 2020, consolidated net earnings decreased by 69.9% from €262.4 million to
€78.9 million, enabling PUMA to achieve positive net earnings despite the significant negative effects of the
COVID-19 pandemic. Earnings per share and diluted earnings per share decreased accordingly from €1.76
in the previous year to €0.53 in 2020.

DIVIDENDS

Based on the positive net earnings, the Management Board and the Supervisory Board propose to the
Annual General Meeting on May 5, 2021 that a dividend of €0.16 per share be paid out from retained
earnings of PUMA SE for the financial year 2020. The payout ratio for financial year 2020 is 30.3% of
consolidated net earnings. This is in accordance with PUMA SE’s dividend policy, which foresees a payout
ratio of 25% to 35% of consolidated net earnings. The payment of the dividend is to take place in the days
after the Annual General Meeting at which the decision is made on the payout. However, payment is subject
to the condition that the macroeconomic conditions allow for a payout. The dividend was waived in the
previous year in order to reduce cash outflows during the COVID-19 pandemic.

↗ G.13 EARNINGS/DIVIDEND PER SHARE (in €)

118

Annual Report 2020 ↗ Combined Management Report

NET ASSETS AND FINANCIAL POSITION

↗ T.02 BALANCE SHEET

Cash and cash equivalents

655.9

14.0%

518.1

11.8%

26.6%

12/31/2020

12/31/2019

€ million

+/- %

Inventories

Trade receivables

Other current assets (working capital)

Other current assets

Current assets

Deferred taxes

Right-of-use assets

Other non-current assets

Non-current assets

Total assets

Current financial liabilities

Trade payables

Other current liabilities (working capital)

Current lease liabilities

Other current liabilities

Current liabilities

Deferred taxes

Pension provisions

Non-current lease liabilities

Other non-current liabilities

Non-current liabilities

Shareholders’ equity

1,138.0

24.3%

1,110.2

25.4%

621.0

174.5

23.7

13.3%

3.7%

0.5%

611.7

196.0

45.2

14.0%

4.5%

1.0%

2,613.0

55.8%

2,481.2

56.7%

277.5

877.6

916.0

5.9%

18.7%

19.6%

237.7

719.0

940.3

5.4%

16.4%

21.5%

2,071.0

44.2%

1,897.0

43.3%

4,684.1

100.0%

4,378.2

100.0%

121.4

941.5

526.2

156.5

127.2

2.6%

20.1%

11.2%

3.3%

2.7%

10.2

843.7

524.9

144.8

35.3

0.2%

19.3%

12.0%

3.3%

0.8%

2.5%

1.5%

-11.0%

-47.6%

5.3%

16.7%

22.1%

-2.6%

9.2%

7.0%

11.6%

0.3%

8.0%

1,872.8

40.0%

1,558.9

35.6%

20.1%

40.6

38.2

775.2

193.4

0.9%

0.8%

16.6%

4.1%

53.0

34.1

600.5

211.4

1.2%

0.8%

13.7%

4.8%

1,047.4

22.4%

899.0

20.5%

1,763.9

37.7%

1,920.3

43.9%

Total liabilities and shareholders’ equity

4,684.1

100.0%

4,378.2

100.0%

Working capital

- in % of net sales

465.8

8.9%

549.4

10.0%

-23.3%

11.8%

29.1%

-8.6%

16.5%

-8.1%

7.0%

-15.2%

119

Annual Report 2020 ↗ Combined Management Report

EQUITY RATIO

PUMA continues to have an extremely solid capital base. As of the balance sheet date, the shareholders’
equity of the PUMA Group decreased by 8.1%, from €1,920.3 million in the previous year to €1,763.9 million
as of December 31, 2020. Despite positive consolidated net earnings in the past financial year, negative
effects of the changes in value recognized directly in equity - particularly in connection with the currency
conversion of financial statements of foreign subsidiaries that do not prepare their accounts in the
reporting currency, the Euro, and the market valuation of derivative financial instruments in connection
with cash flow hedging - contributed to a decrease in the Group’s equity. As of the balance sheet date, the
balance sheet total rose by 7.0%, from €4,378.2 million in the previous year to €4,684.1 million. This
resulted in a decrease of the equity ratio, from 43.9% in the previous year to 37.7% as of December 31,
2020.

↗ G.14 TOTAL ASSETS/EQUITY RATIO

WORKING CAPITAL

Despite the significant negative impact of the COVID-19 pandemic on our sales development in 2020, we
managed to reduce working capital by 15.2% from €549.4 million in the previous year to €465.8 million as
of December 31, 2020. In relation to net sales in the respective financial year, this corresponds to a
decrease in the working capital ratio from 10.0% in the previous year to 8.9% at the end of 2020.

As a result of sales promotions over the past financial year aimed at limiting the decline in sales as far as
possible and to optimize inventory levels, inventories increased only slightly by 2.5% from €1,110.2 million
to €1,138.0 million as of the balance sheet date. Despite sales growth in the third and fourth quarters of
2020, trade receivables increased only slightly by 1.5%, from €611.7 million to €621.0 million. In contrast,
other current assets included in working capital decreased by 11.0% from €196.0 million to €174.5 million.

120

Annual Report 2020 ↗ Combined Management Report

On the liabilities side, trade payables increased by 11.6%, from €843.7 million to €941.5 million, due to
extended payment terms with our suppliers. Other current liabilities, which are included in working capital
and include, among other things, customer bonus and warranty provisions, increased only slightly by 0.3%
from €524.9 million to €526.2 million in 2020.

↗ G.15 WORKING CAPITAL

OTHER ASSETS AND OTHER LIABILITIES

Other current assets, which only include the positive market value of derivative financial instruments,
decreased compared to the previous year from €45.2 million to €23.7 million.

Right-of-use assets increased by 22.1% compared to the previous year, from €719.0 million to
€877.6 million. This increase was mainly due to the expansion of our logistics network and the opening of
our new distribution center in Indianapolis, USA. The right-of-use assets referred to own retail stores
totaling €355.2 million (previous year: €419.6 million), warehouses and offices totaling €464.3 million
(previous year: €281.7 million) and other lease items, mainly technical equipment and machines and motor
vehicles, totaling €58.1 million as of December 31, 2020 (previous year: €17.7 million). On the liabilities
side, this led to an increase in current and non-current lease liabilities.

Other non-current assets, which mainly comprise intangible assets and property, plant and equipment,
decreased slightly by 2.6% from €940.3 million to €916.0 million in 2020. This decline was due to lower
investment in fixed assets in order to limit cash outflows as far as possible during the course of the COVID-
19 pandemic.

The current financial liabilities, which include both current liabilities to banks and the current portion of the
promissory note loans (€100.0 million; previous year: €0.0 million), increased from €10.2 million in the
previous year to €121.4 million as of December 31, 2020.

Other current liabilities, which include the negative market value of derivative financial instruments,
increased from €35.3 million to €127.2 million, due to the weaker US Dollar exchange rate on reporting
date December 31, 2020 compared to the balance sheet date in the previous year.

Pension provisions increased from €34.1 million in the previous year to €38.2 million.

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Annual Report 2020 ↗ Combined Management Report

Other non-current liabilities, which mainly include promissory note loans totaling €145.0 million (previous
year: €160.0 million), amounted to €193.4 million (previous year: €211.4 million) as of the balance sheet
date.

CASH FLOW

↗ T.03 CASH FLOW STATEMENT

Earnings before taxes (EBT)

Financial result and non-cash expenses and income

Gross cash flow

Change in net current assets

Tax payments and dividends received

Net cash from operating activities

Payments for acquisitions

Payments for investing in fixed assets

Other investing activities

Net cash used in investing activities

Free cash flow

Free cash flow (before acquisitions)

- in % of net sales

Dividend payments to equity holders of the parent company

Dividend payments to non-controlling interests

Proceeds from borrowings

Repayments of borrowings

Repayments of lease liabilities

Other proceeds/payments

Net cash used in financing activities

Exchange rate-related changes in cash and cash equivalents

Change in cash and cash equivalents

Cash and cash equivalents at the beginning of the financial year

Cash and cash equivalents at the end of the financial year

2020

2019

€ million

+/- %

162.3

360.4

522.8

-11.9

-89.3

417.6

-61.1%

287.2

25.5%

704.8

-25.8%

-44.5

-73.2%

-111.5

-19.9%

421.5

548.8

-23.2%

0.0

-1.2

-151.0

-218.4

-30.9%

5,5

0,8

-145.5

-218.7

-33.5%

276.0

5.3%

0.0

-45.6

94.2

0.0

330,0

-16.4%

331.2

-16.7%

6.0%

-52.3

-100.0%

-18.6

145.1%

0.0

-17.6

-100.0%

-135.0

-140.8

-4.2%

-43.0

-43.6

-1.5%

-129.2

-272.9

-52.6%

-8.9

137.8

518.1

655.9

-2.8

54,3

153.9%

463.7

11.7%

518.1

26.6%

122

Annual Report 2020 ↗ Combined Management Report

NET CASH FROM OPERATING ACTIVITIES

Gross cash flow decreased by 25.8% from €704.8 million to €522.8 million in 2020. This decrease was due
to lower earnings before taxes (EBT -61.1%). In contrast, non-cash expenses increased as a result of the
increase in right-of-use assets, which led to higher depreciation and amortization in 2020.

↗ G.16 GROSS CASH FLOW (€ million)

A strong focus on working capital management significantly contributed to the fact that the cash outflow
from the change in net current assets* improved from €-44.5 million in the previous year to €-11.9 million
in the financial year 2020. The cash outflow from tax payments and dividends received decreased from
€-111.5 million in the previous year to €-89.3 million. Overall, this resulted in a decrease in net cash from
operating activities by €127.3 million, from €548.8 million to €421.5 million. Despite the significant negative
impact of the COVID-19 pandemic in 2020, PUMA was therefore able to largely limit the decline in net cash
from operating activities.

NET CASH USED IN INVESTING ACTIVITIES

Net cash used in investing activities decreased in the financial year 2020, from €218.7 million to
€145.5 million. Due to the significant negative impact of the COVID-19 pandemic, we reacted quickly and
adjusted our investment planning for 2020 accordingly to limit cash outflows as far as possible. This
resulted in a decrease of investments in fixed assets from €218.4 million in the previous year to
€151.0 million in 2020. The investments mainly concerned logistics and IT infrastructure. As a result of the
COVID-19 pandemic, investments in own retail stores declined in the past financial year.

* Net current assets include working capital line items plus current assets and liabilities, which are not part of the working

capital calculation. Current lease liabilities are not part of the net current assets.

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FREE CASH FLOW BEFORE ACQUISITIONS

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 incoming and outgoing payments that relate to
shareholdings, where applicable.

Free cash flow before acquisitions decreased from €331.2 million in the previous year to €276.0 million in
the financial year 2020. Free cash flow before acquisitions was 5.3% of net sales compared to 6.0% in the
previous year.

↗ G.17 FREE CASH FLOW (BEFORE ACQUISITIONS) (€ million)

NET CASH USED IN FINANCING ACTIVITIES

The net cash used in financing activities decreased overall from a cash outflow of €272.9 million in the
previous year to a cash outflow of €129.2 million in 2020. This decrease resulted, on the one hand, from the
waiver of dividend payments for the financial year 2019 to PUMA SE shareholders, in order to limit cash
outflows in 2020 as far as possible during the course of the COVID-19 pandemic. On the other hand,
proceeds from borrowings of €94.2 million in 2020, compared with the repayment of financial liabilities of
€17.6 million in the previous year, contributed to the decrease in net cash used in financing activities.

The net cash used in financing activities also included payouts to non-controlling interests totaling
€45.6 million (previous year: €18.6 million) and the repayment of lease liabilities and related interest
expenses totaling €164.3 million in 2020 (previous year: €170.5 million).

As of December 31, 2020, PUMA had cash and cash equivalents of €655.9 million, an increase of 26.6%
compared to the previous year (€518.1 million). The PUMA Group also had credit lines totaling
€1,639.1 million as of December 31, 2020 (previous year: €687.6 million). Unutilized credit lines totaled
€1,372.7 million on the balance sheet date, compared to €514.1 million in the previous year. In order to
ensure the liquidity of the PUMA Group, even in the event of a longer lasting pandemic, we have therefore
secured additional credit lines in the past financial year as a contingency reserve, in line with our strategic
priorities for dealing with the COVID-19 pandemic.

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STATEMENT REGARDING THE BUSINESS DEVELOPMENT AND THE OVERALL
SITUATION OF THE GROUP

2020 was a very difficult year for the sporting goods industry due to the COVID-19 pandemic. Our approach
was to manage the crisis short term without hindering PUMA’s mid-term momentum. Accordingly, our
primary goal was to survive the crisis, to recover and then to emerge stronger from the crisis with growth.
The health and safety of our employees, business partners and customers were given top priority. We were
also very focused on limiting the inevitable decline in sales wherever possible, protecting the supply chain,
reducing costs and securing liquidity.

With respect to our organizational development and progress within our logistics network, the opening of
the new Indianapolis distribution center in the USA was a major milestone for PUMA. In addition, work
continued in 2020 at our new logistics center for Central Europe located in Geiselwind, Germany, which is
expected to become operational in the second quarter of 2021.

We are very proud of how we have handled this difficult period so far. Our employees worldwide have
helped us survive this crisis thanks to their flexibility, pragmatism, determination and positive attitude. In
doing so, they have worked closely with our manufacturers, customers, lessors, banks, logistics partners
and other partners to ensure that we are able to find solutions together to maintain the business and value
chain. Our long-standing and reliable cooperation with many of our partners was one of the most important
success factors for us in managing the pandemic during the past financial year.

The sales development seen in the individual quarters, which varied considerably during the year due to the
development of the COVID-19 pandemic, resulted in a currency-adjusted sales decrease of 1.4% for the full
year 2020 compared to 2019. While sales in wholesale and in our own retail stores declined, our e-
commerce business recorded significant sales growth. PUMA therefore managed to keep the sales
decrease resulting from the COVID-19 pandemic in 2020 to a minimum. However, despite the cost reduction
measures initiated immediately at the end of the first quarter and during the second quarter, the COVID-19
pandemic had a significant negative impact on our profitability. As a result of the decline in sales and gross
profit margin, which could not be compensated for by cost-saving measures, our operating result (EBIT)
saw an overall decrease of 52.5% to €209.2 million in 2020 (previous year: €440.2 million). Earnings per
share amounted to €0.53 in 2020 (previous year: €1.76). Despite the severe negative impact of the COVID-19
pandemic, particularly in the second quarter, PUMA was thus able to achieve positive net earnings and
positive earnings per share for the full year 2020.

With regard to the balance sheet, we believe that PUMA continues to have an extremely solid capital base.
As of the balance sheet date, the PUMA Group’s equity amounted to more than €1.7 billion and the equity
ratio was just under 38%.

Our consistent focus on strict working capital management and our efforts to secure our liquidity in 2020
have resulted in an increase in cash and cash equivalents (to €655.9 million) and an increase in our
unutilized credit lines as of the balance sheet date (to €1,372.7 million). In this context, the new credit line
of €900 million, taken out in May last year via a banking consortium of twelve banks - including a direct
commitment by the German state-owned development bank KfW (Kreditanstalt für Wiederaufbau) in the
amount of €625 million - was already reduced by €700 million to just €200 million at the end of 2020, as
PUMA secured new promissory note loans of €250 million in December 2020 for refinancing purposes and
increased its existing credit lines with banks by €450 million.

As a result, the net asset, financial and income situation of the PUMA Group is overall solid at the time the
Combined Management Report was prepared. This enables the Management Board and the Supervisory
Board to propose to the Annual General Meeting on May 5, 2021, a dividend of €0.16 per share for the
financial year 2020. This corresponds to a payout ratio of 30.3% in relation to the consolidated net earnings
and is in line with our dividend policy.

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COMMENTS ON THE FINANCIAL STATEMENTS
OF PUMA SE IN ACCORDANCE WITH THE GERMAN
COMMERCIAL CODE (HGB)

The annual financial statements of PUMA SE are prepared in accordance with the rules of the German
Commercial Code (German GAAP, HGB), taking into account the SEAG (German SE Implementation Act) and
the German Stock Corporation Act (AktG).

PUMA SE is the parent company of the PUMA Group. PUMA SE’s results are to a large extent 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 wholesale business in the DACH area, consisting of the home market of
Germany, Austria, and Switzerland. Furthermore, PUMA SE is also responsible for pan-European
distribution for individual key accounts and for 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, merchandising, international
marketing, the global areas of finance, operations and PUMA’s strategic direction.

RESULTS OF OPERATIONS

↗ T.04 PROFIT AND LOSS STATEMENT (GERMAN GAAP, HGB)

Net Sales

709.7

100.0%

722.3

100.0%

2020

2019

€ million

+/- %

-1.7%

Other operating income

40.4

5.7%

62.1

8.6%

-34.9%

Other operating expenses

-512.1

-72.2%

-560.8

-77.6%

Material expenses

Personnel expenses

Depreciation

Total expenses

Financial result

Income before taxes

Taxes on income

Net income

-237.2

-33.4%

-233.8

-32.4%

1.5%

-94.2

-25.4

-13.3%

-107.2

-14.8%

-12.1%

-3.6%

-24.8

-3.4%

-868.9

-122.4%

-926.6

-128.3%

359.5

240.7

-11.0

229.7

50.7%

33.9%

-1.6%

32.4%

223.5

81.3

-12.8

68.5

30.9%

11.3%

-1.8%

9.5%

235.4%

2.6%

-8.7%

-6.2%

60.8%

195.9%

-14.0%

Net sales decreased overall by 1.7% to €709.7 million in the financial year 2020, due to the negative impact
of the COVID-19 pandemic. This was the result of decreased revenue from product sales as well as reduced
commission income in connection with license management. Revenue from PUMA SE product sales
decreased by 1.2% to €350.5 million. The royalty and commission income included in net sales decreased
by 1.9% to €329.2 million. Other revenue, which mainly consisted of recharges of costs to affiliated
companies, totaled €30.0 million in 2020 (previous year: €32.1 million).

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Other operating income amounted to €40.4 million in 2020 (previous year: €62.1 million) and includes in
particular realized and unrealized gains from currency conversion related to the measurement of
receivables and liabilities in foreign currencies.

The total expenditure from material expenses, personnel expenses, depreciation and other operating
expenses decreased by 6.2% to €868.9 million compared to the previous year (2019: total of €926.6 million).
The increase in material expenses compared to the previous year was mainly due to higher inventory write-
downs. The decrease in personnel expenses was related to short-term work programs resulting from the
COVID-19 pandemic and lower performance-related staff bonuses. Other operating expenses decreased
year-on-year due to cost-saving measures implemented directly in response to the COVID-19 pandemic at
the end of the first quarter and during the second quarter. However, the decrease in marketing and
administration expenses was partially offset by higher costs for warehousing and logistics.

The financial result improved by 60.8% compared to the previous year, to €359.5 million. The increase was
mainly due to significantly higher dividends from shareholdings in affiliated companies, while the income
from the transfer of profits from affiliated companies decreased and expenses from loss transfers
increased.

Despite a slight decline in sales, the decreased expenses and the improved financial result led to a
significant increase in earnings before taxes of 195.9%, from €81.3 million in the previous year to
€240.7 million in 2020. Taxes on income amounted to €11.0 million (previous year: €12.8 million).
Accordingly, PUMA SE’s net income under German Commercial Code (German GAAP, HGB) increased by
235.4% in the financial year 2020 to €229.7 million (previous year: €68.5 million).

NET ASSETS

↗ T.05 BALANCE SHEET (GERMAN GAAP, HGB)

Total fixed assets

Inventories

Receivables and other current assets

Cash and cash equivalents

Total current assets

Others

Total assets

Shareholders’ equity

Accruals/provisions

Liabilities

12/31/2020

12/31/2019

€ million

1,072.0

58.5%

1,053.7

63.0%

65.5

424.3

260.2

750.0

11.5

3.6%

23.1%

14.2%

40.9%

0.6%

59.8

504.8

47.2

611.8

8.0

815.1

89.0

929.4

44.5%

4.9%

50.7%

582.8

112.1

978.6

3.6%

36.6%

0.5%

34.8%

58.5%

1,833.5

100.0%

1,673.5

100.0%

30.2%

-16.0%

2.8%

450.8%

6.7%

-20.6%

Total liabilities and shareholders’ equity

1,833.5

100.0%

1,673.5

100.0%

+/- %

1.7%

9.5%

22.6%

43.6%

9.6%

39.9%

-5.0%

9.6%

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Fixed assets increased by 1.7% to €1,072.0 million in 2020, mainly due to further investments in IT
infrastructure

Within current assets, inventories increased by 9.5% to €65.5 million. In contrast, receivables and other
current assets fell by 16.0% to €424.3 million compared to the previous year. This development is primarily
due to the decrease in receivables from affiliated companies. The decrease in receivables from affiliated
companies as of the balance sheet date resulted from offsetting these receivables against liabilities to
affiliated companies. Cash and cash equivalents increased by 450.8% to €260.2 million compared to the
previous year.

On the liabilities side, equity rose by 39.9% to €815.1 million, as a result of the net income in 2020. This led,
despite an increased balance sheet total, to an increase of the equity ratio at the balance sheet date, from
34.8% in the previous year to 44.5% as of December 31, 2020.

Accruals and provisions decreased by 20.6% to €89.0 million compared to the previous year due to lower
provisions for personnel and outstanding invoices. The decrease in liabilities by 5.0% to €929.4 million was
mainly due to reduced liabilities to affiliated companies as a result of the offsetting. In contrast, liabilities to
banks increased as a result of the issue of new promissory note loans in 2020.

FINANCIAL POSITION

↗ T.06 CASH FLOW STATEMENT (GERMAN GAAP, HGB)

Net cash from operating activities

Net cash used in investing activities

Free cash flow

Net cash from financing activities

Change in cash and cash equivalents

Cash and cash equivalents at the beginning of the financial year

Cash and cash equivalents at the end of the financial year

2020

2019

€ million

+/- %

24.9

-194.7

-169.9

382.8

213.0

47.2

260.2

27.6

-114.0

-86.4

-9.8%

70.8%

96.6%

74.2

>100%

-12.2

>-100%

59.5

47.2

-20.7%

>100%

Net cash from operating activities in 2020 is based on the significant increase in earnings before taxes.
However, taking into account the equally significant increase in non-cash expenses in connection with
higher dividends from shareholdings in affiliated companies, the net cash from operating activities in the
past financial year was almost unchanged at €24.9 million (previous year: €27.6 million).

The net cash used in investing activities in 2020 includes investments in fixed assets and cash outflows
from the granting of receivables to affiliated companies. This resulted in an overall decrease in free cash
flow from €-86.4 million in the previous year to €-169.9 million in 2020.

Net cash from financing activities showed a cash inflow of €382.8 million in 2020 (previous year:
€74.2 million). The cash inflow was mainly attributable to an increase in liabilities to affiliated companies
and an increase in liabilities to banks due to the issue of new promissory note loans. In order to limit cash
outflows during the COVID-19 pandemic, the dividend payout was waived in 2020. In the previous year, a
payout of €52.3 million to equity holders was included in the net cash used in financing activities.

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OUTLOOK

We expect a moderate increase in net sales in PUMA SE’s financial statements under German Commercial
Code (German GAAP, HGB) for the financial year 2021. However, due to significant lower dividends from
shareholdings in affiliated companies, we expect earnings before taxes to decline significantly in the
financial year 2021.

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FURTHER INFORMATION

INFORMATION CONCERNING TAKEOVERS

The following information, valid December 31, 2020, 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][1] HGB)
On the balance sheet date, subscribed capital totaled € 150,824,640.00 and was divided into 150,824,640 no-
par value shares with a proportional amount in the statutory capital of € 1.00 per share. As of the balance
sheet date, the Company held 1,240,781 treasury shares.

Shareholdings exceeding 10% of the voting rights (Sections 289a [1][1][3], 315a [1][1][3] HGB)
As of December 31, 2020, 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.S. and Kering S.A.). The shareholding of Kering S.A. in
PUMA SE amounted to 9.8% of the share capital according to Kering’s press release from October 6, 2020.
The shareholding of Artémis S.A.S. and Kering S.A. together amounts to 38.3% of the share capital.

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 AktG or if the employment
agreement is terminated, for which in each 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] 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 € 15,000,000.00 by issuing, once or several times, new no-par value
bearer shares against contributions in cash and/or kind until April 11, 2022 (Authorized Capital 2017). In
case of capital increases against contributions in cash, the new shares may, partially or completely, 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).

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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 respectively 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%;
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 or parts of companies, participation in 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 2017 in the current
reporting period.

Conditional Capital

The Annual General Meeting of April 12, 2018 has authorized the Management Board until April 11, 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 option and/or convertible bonds, and participation
rights and/or participating bonds or combinations thereof with or without maturity restrictions in the total
nominal amount of up to € 1,000,000,000.00.

The share capital is conditionally increased by up to € 30,164,920.00 by issue of up to 30,164,920 new no-par
value bearer shares (Conditional Capital 2018). 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.

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Authorization to purchase treasury shares

The resolution adopted by the Annual General Meeting on May 7, 2020 authorized the Management Board to
purchase treasury shares up to a value of 10% of the share capital until May 6, 2025.

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 creditor is entitled to termination and early calling-in of any
outstanding amounts.

For more details, please refer to the relevant disclosures in chapter 17 of the Notes to the Consolidated
Financial Statements.

COMPENSATION REPORT

COMPENSATION PHILOSOPHY

The Management Board compensation system is designed to create incentives for a sustainable and profit-
oriented company performance. The objective of the compensation system is to stimulate the
implementation of long-term Group strategy by ensuring that the relevant success parameters that govern
the performance-based compensation are aligned with the PUMA SE management system. Furthermore,
the long-term interests of our shareholders are taken into account by making the variable compensation
strongly dependent on the performance of the PUMA SE share.

With a greater share of performance-based and therefore variable compensation, the intention is to reward
the contribution of our Management Board members towards a sustainable development of our Company,
while negative deviations from the set targets will result in a significant reduction of variable compensation.

An updated Management Board compensation system that complies with the requirements of the German
Act Implementing the Second Shareholder Rights Directive (Gesetz zur Umsetzung der zweiten
Aktionärsrechterichtlinie, ARUG II) and the recommendations of the German Corporate Governance Code
as amended on December 16, 2019 is to be submitted to the Annual General Meeting for approval on May 5,
2021.

GOVERNANCE IN COMPENSATION MATTERS

It is the responsibility of the PUMA SE Supervisory Board to determine the compensation of the
Management Board. The entire Supervisory Board decides on matters relating to the compensation of the
Management Board members based on the respective recommendations of the Personnel Committee
which is comprised of members of the Supervisory Board. Criteria for calculating the total compensation
are the responsibilities and performance of the individual Management Board member, the economic
situation of PUMA SE, long-term strategic planning and related goals, the sustainability of targeted results
and the Company’s long-term prospects.

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OVERVIEW OF COMPENSATION ELEMENTS

The compensation of the Management Board consists of non-performance-based and performance-based
components. The non-performance-based components comprise the basic compensation, company
pension contributions and other fringe benefits, while the performance-based components are divided into
two parts, a bonus and a component with long-term incentive effect:

↗ G.18 TARGET COMPENSATION STRUCTURE

CHANGE IN COMPENSATION COMPONENTS IN 2020 DUE TO THE COVID-19 PANDEMIC AND LOAN
COMMITMENTS FROM KFW BANKENGRUPPE

At the beginning of the COVID-19 pandemic in March 2020, all members of the Management Board of
PUMA SE voluntarily waived their respective basic compensation for the months of April and May 2020 to
show solidarity with those employees of PUMA for whom short-time work was applied for and with other
employees who also forwent part of their remuneration for the months of April and May 2020. For the same
reason, all members of the Supervisory Board also waived part of their annual compensation.

In addition, all members of the Management Board waived their respective bonus payment for the financial
year 2020, including the bonus for the individual performance of members of the Management Board. The
Management Board thus complied with a requirement for the granting of a loan with the participation of
KfW Bankengruppe. Nevertheless, provisions of €1.9 million were set up in the financial year 2020 for a
long-term incentive program in 2020 on account of individual contractual obligations toward the members
of the Management Board. In 2021, the Supervisory Board will decide on the provision of a long-term
incentive program for the financial year 2020 and will grant an allocation only on the condition that doing so
is in compliance with the requirements of KfW Bankengruppe.

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TARGET COMPENSATION STRUCTURE

NON-PERFORMANCE-BASED COMPENSATION AND FRINGE BENEFITS

Basic Compensation
The members of the Management Board receive a fixed basic salary which is paid monthly. This salary is
based on the duties and responsibilities of the member of the Management Board. For employment periods
of less than twelve months in a calendar year, all compensation payments are paid on a prorated basis. For
the months of April and May 2020, the members of the Management Board voluntarily waived their basic
compensation.

Fringe Benefits
In addition, the Management Board members receive in-kind compensation, such as use of company cars,
accident insurance and D&O insurance. These are part of the non-performance-based compensation.

Company Pension
Pension benefits are available for the members of the Management Board in the form of deferred
compensation paid out of the performance-based and/or the non-performance-based compensation, for
which the Company has taken out pension liability insurance. The proportion of the pension capital that is
already financed through contributions to the pension liability insurance is deemed to be vested.

Performance-based Compensation
In addition to the non-performance-based compensation, the members of the Management Board receive
performance-based and therefore variable compensation. The amount of this compensation is based on the
attainment of previously defined financial and non-financial targets. It consists of a bonus and a component
with a long-term incentive effect. In the event of any outstanding performance, the Supervisory Board may,
at its discretion, grant the members of the Management Board a voluntary one-off payment.

Short-term variable Compensation — Bonus
All members of the Management Board waived short-term variable compensation for the financial year
2020. However, the short-term variable compensation system as it would have been applied if the
Management Board had not waived it in 2020 is described below for the sake of completeness.

As part of the performance-based compensation, the bonus is primarily based on the financial goals of the
operating result (EBIT) and free cash flow (FCF) of the PUMA Group and the individual performance of the
respective Management Board member as well as the attainment of Group-wide sustainability targets. The
two financial success targets are weighted with 60% for EBIT and 20%, respectively, for FCF. The individual
performance is included in the calculation with a weighting of 15%. The degree to which the sustainability
targets have been achieved is taken into account in the calculation with a weighting of 5%. If 100% of the
target is achieved (“target bonus”), the amount of the bonus is 100% of the annual basic compensation for
the Chair of the Management Board and the Management Board members.

The aforementioned performance targets are combined. For EBIT, FCF and the sustainability targets, the
bandwidth of possible target attainments ranges from 0% to 150%. It is therefore possible that no short-
term variable compensation at all is paid out if minimum targets are not attained.

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↗ G.19 STI-PLAN

An identical target attainment curve has been created, respectively, for the two financial goals. If the budget
target for EBIT or FCF is reached, the target attainment is 100% (target value). If EBIT/FCF are less than
95% of the target value, this results in a target attainment of 0%. If EBIT/FCF reach 95% of the target value,
the target attainment is 50%. If EBIT/FCF reach 120% or more of the target value, the target attainment is
limited to 150% (maximum value). Target attainments between the determined target attainment points are
interpolated. This results in the following target attainment curve for the EBIT and FCF performance
targets:

↗ G.20 TARGET ATTAINMENT CURVE EBIT/FCF

Individual Performance Target Attainment
The Supervisory Board assesses the individual performance of the Management Board member based on
previously defined criteria, such as sustainable leadership, strategic vision and good corporate governance.
The Supervisory Board determines target criteria for assessing individual performance every year. At the
end of the performance period, the Supervisory Board evaluates the degree of attainment of the target
criteria. Target attainment can be between 0% and 150%.

Target Attainment Sustainability Targets
The sustainability targets include goals to reduce CO2 emissions, compliance targets and occupational
health and safety objectives. They are applied throughout the PUMA Group and measured quantitatively on
a standardized basis. The Supervisory Board determines four target criteria for calculating the
sustainability targets every year. At the end of the performance period, the Supervisory Board evaluates the
degree of attainment of the target criteria. Target attainment can be between 0% and 150%.

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Long-term variable share-based compensation
In the financial year 2020, no long-term variable compensation was granted to members of the
Management Board. The Supervisory Board thus complied with a requirement for the granting of a loan
with the participation of KfW Bankengruppe. Nevertheless, provisions of €1.9 million were set up in the
financial year 2020 for a long-term incentive program in 2020 on account of individual contractual
obligations toward the members of the Management Board. In 2021, the Supervisory Board will decide on
the provision of a long-term incentive program for the financial year 2020 and will grant an allocation only
on the condition that doing so is in compliance with the requirements of KfW Bankengruppe. The long-term
incentive program then to be granted will be in line with the compensation system that will be presented for
approval at the upcoming Annual General Meeting.

Rules for Terminating Management Board Activity and other Contractual Provisions
In the event of a temporary disablement due to illness, the Management Board member retains his or her
entitlement to full contractual compensation up to a total duration of six months but for no longer than the
end of the employment contract. The Management Board member must offset payments received from
health insurance companies or pension insurances in the form of sick pay or pension benefits against the
compensation payments, insofar as these benefits are not fully based on contributions by the Management
Board member.

In the case of an early termination of the employment contract without good cause within the meaning of
section 626 (1) of the German Civil Code (BGB), any payments to be agreed to the Management Board
member, including fringe benefits, will not exceed the amount of two annual compensations (severance
cap) and must not exceed the value of the compensation for the remaining duration of the Management
Board employment contract. The calculation of the severance cap is based on the total compensation of the
past financial year and also on any expected total compensation for the current financial year. In the event
of an early termination of the employment contract before the end of the relevant performance period for
the bonus and/or the three-year vesting period of the long-term variable compensation, the contract makes
no provision for an early payout of the variable compensation components. If the member of the
Management Board becomes permanently disabled during the term of the employment contract, the
contract is terminated on the day on which the permanent disability is determined. A permanent disability
exists within the meaning of this provision, if the member of the Management Board is no longer able, due
to illness or accident, to fulfill the responsibilities assigned to him or her. In this respect, the specific duties
and particular responsibility of the member of the Management Board must be taken into account.

If the member of the Management Board dies during the term of the employment contract, his or her widow
or widower and children, provided they have not yet reached the age of 27, are entitled as joint creditors to
receive the unreduced continued payment of the fixed compensation for the month in which the death
occurred and for the six following months, but for no longer than up to the end of the regular term of the
contract.

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MANAGEMENT BOARD COMPENSATION

The following tables show the compensation paid during the financial year and inflows during or for the
reporting year and the total related pension expenses for all Management Board members. *

↗ T.07 COMPENSATION PAID (€ million)

Basic Compensation

Fringe Benefits

Total

Short-term variable compensation

Long-term variable share-based compensation

LTI 2019 (2019 to 2021)

Total variable compensation

Pension expenses

Total compensation

2019

2020

2020
(min)

2020
(max)

2.0

0.1

2.1

2.7

3.9

6.6

0.4

9.1

1.7

0.1

1.8

0.0

0.4

2.2

1.7

0.1

1.8

0.0

0.4

2.2

1.7

0.1

1.8

0.0

0.4

2.2

* The grants and inflows shown below include the portion of the compensation of Ms. Anne-Laure Descours granted to Ms.

Descours for her services as a member of the Management Board of PUMA SE. In addition, Ms. Descours receives
compensation for her function as General Manager PUMA Group Sourcing of World Cat Ltd, Hong Kong, a subsidiary of
PUMA SE.

T.08 INFLOW (€ million)

Basic Compensation

Fringe Benefits

Total

Short-term variable compensation

Long-term variable share-based compensation

LTI 2016 (2016 to 2018)

LTI 2017 (2017 to 2019)

Total variable compensation

Pension expenses

Total compensation

When adding the individual items, there may be slight deviations as a result of rounding.

2019

2020

2.0

0.1

2.1

2.7

1.7

4.3

0.4

6.8

1.7

0.1

1.8

2.6

6.7

16.0

0.4

18.3

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Pension benefits are available for the members of the Management Board in the form of deferred
compensation paid out of the performance-based and/or the non-performance-based compensation, for
which the Company has taken out pension liability insurance. 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 €0.4 million for members of the Management Board (previous year:
€0.4 million). The present value of the pension benefits granted to active Management Board members of
€13.0 million as of December 31, 2020 (previous year: €10.8 million) was netted against the equally high
and pledged asset value of the pension liability insurance on the balance sheet. The majority of the present
value is attributable to the pension benefits financed by deferred compensation.

COMPENSATION FOR FORMER MANAGEMENT BOARD MEMBERS

In the reporting year, €0.8 million was spent on pro-rata basic compensation, pro-rata fringe benefits and
short-term and long-term variable compensation for former members of the Management Board.

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 the deferred compensation of former members of the Management Board and Managing
Directors amounting to €11.3 million (previous year: €11.6 million). Both items were recognized as
liabilities within pension provisions to the extent they were not offset against asset values of an equal
amount. Pension obligations to former members of the Management Board and their widows/widowers
were incurred amounting to €0.2 million (previous year: €0.2 million).

SUPERVISORY BOARD COMPENSATION SYSTEM

In the reporting year, all members of the Supervisory Board waived part of their annual compensation. The
following describes the Supervisory Board compensation system if no components are waived.

The Supervisory Board compensation system has been changed to purely fixed compensation. The Articles
of Association were amended following the shareholders' decision at the Annual General Meeting on May 7,
2020. As for the Management Board, the relevant criteria for calculating the compensation are the
responsibilities and performance of the individual Supervisory Board member, the economic situation of
PUMA SE, the long-term strategic planning and related goals, the sustainability of achieved results and the
Company’s long-term prospects. For this reason, the Supervisory Board compensation consists of a fixed,
non-performance-based amount.

The Supervisory Board compensation conforms to § 15 of the Articles of Association, according to which
each Supervisory Board member receives a fixed annual compensation of € 25,000.00. This amount is
payable after the Annual General Meeting for the respective financial year. In addition to the fixed, annual
compensation, the members of the Supervisory Board are entitled to an increase of their fixed
compensation based on their position on the board and their membership of committees. The Chair of the
Supervisory Board and the Vice Chair receive an additional fixed annual amount of € 25,000.00 and
€ 12,500.00, respectively. The chair of a committee additionally receives € 10,000.00, and the members of a
committee € 5,000.00, respectively. The respective committees are the Personnel Committee, the Audit
Committee and the Sustainability Committee.

A member of the Supervisory Board who is only active for part of a financial year receives prorated
remuneration calculated on the basis of the period of activity determined for full months.

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SUPERVISORY BOARD COMPENSATION

The compensation for the Supervisory Board for financial years 2019 and 2020 are shown in the table below.

↗ T.09 SUPERVISORY BOARD COMPENSATION (€ million)

Total

Fixed compensation

Committee compensation

Total

2019

0.2

2020

0.1

2019

0.0

2020

0.0

2019

0.2

2020

0.1

CORPORATE GOVERNANCE STATEMENT IN ACCORDANCE WITH SECTION 289F
AND SECTION 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 and
the Supervisory Board work closely with each other in the interests of the entire Company 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 Principle 22 of the German Corporate
Governance Code (DCGK). This section also includes the Statement of Compliance in accordance with Art.
9(1)c(ii) of the SE Regulation (SE-VO) in conjunction with Section 289f and Section 315d German Commercial
Code (HGB). Pursuant to Section 317(2) Sentence 6 of the HGB, the purpose of the audit of the statements
pursuant to Section 289f (2) and (5) and Section 315d of the HGB is limited to determining whether such
statements have actually been provided.

PUMA SE has the legal form of a European company (Societas Europaea, or SE). Being a 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.

PUMA SE has a dual management system featuring strict personal and functional separation between the
Management Board and the Supervisory Board (two-tier board). Accordingly, the Management Board
manages the company while the Supervisory Board monitors and advises the Management Board.

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STATEMENT OF COMPLIANCE PURSUANT TO SECTION 161 AKTG FOR 2020:

The Management Board and the Supervisory Board of PUMA SE declare that - since the last Statement of
Compliance from November 9, 2019 - PUMA SE has been and will be in compliance with the
recommendations issued by the “Government Commission on the German Corporate Governance Code” in
its version dated February 7, 2017 (“Code 2017”) and its version dated December 16, 2019 (effective as of
March 20, 2020, “Code 2020”), with the exceptions mentioned below.

EXCEPTIONS TO THE RECOMMENDATIONS OF THE CODE 2017

In the period since the last Statement of Compliance was issued on November 9, 2019, the following
recommendations of the Code 2017 have not been complied with. With the announcement of the Code 2020
on March 20, 2020, the Code 2017, which was valid until then, was replaced by the Code 2020.

•

In derogation of No. 3.8 p. 3 of the Code 2017, 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.
In derogation of No. 4.2.3 p. 2 s. 6 of the Code 2017 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. PUMA complies with the Code 2017 with regard to the PUMA Monetary
Units Plan for 2019 as it provides for a maximum amount.
In derogation of No. 4.2.3 p. 2 s. 8 of the Code 2017 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 2017 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.
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 2017 the information stated in this Section regarding the compensation of the
members of the Management Board is not included in the Compensation Report.

• The Annual General Meeting of PUMA SE decided on May 7, 2020 to convert the remuneration of the

Supervisory Board to a purely fixed compensation and to delete § 15.3 of the Articles of Association for
this purpose. Since prior to this resolution of the Annual General Meeting the remuneration of the
Supervisory Board contained a variable component to allow members of the Supervisory Board to
participate in the success of the company, there was a deviation from No. 5.4.6 p. 2 s. 2 of the Code
2017, since the performance-related remuneration was not linked to a sustainable corporate
development. The deviation no longer exists since May 7, 2020.
In derogation of No. 5.4.6. p. 3 of the Code 2017, the compensation of the Supervisory Board members is
not shown individually. In the opinion of PUMA SE, this is not additional information relevant to the
capital market as the respective remuneration regulations included in the Articles of Association are in
the public domain.

•

EXCEPTIONS TO THE RECOMMENDATIONS OF THE CODE 2020

Since the announcement of the Code 2020 on March 20, 2020, all recommendations of the Code 2020 have
been (with the below mentioned exception) and will be complied with, as far as PUMA has to comply with
these recommendations.

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The Annual General Meeting of PUMA SE decided on May 7, 2020 to convert the remuneration of the
Supervisory Board to a purely fixed compensation and to delete § 15.3 of the Articles of Association for this
purpose. Since prior to this resolution of the Annual General Meeting the remuneration of the Supervisory
Board contained a variable component to allow members of the Supervisory Board to participate in the
success of the company, there was a deviation from G. 18 s. 2 of the Code 2020, since the performance-
related remuneration was not linked to the long-term development of the company. The deviation no longer
exists since May 7, 2020.

Herzogenaurach, November 9, 2020
PUMA SE

For the Management Board

For the Supervisory Board

Bjørn Gulden

Michael Lämmermann

Jean-François Palus

The Statement of Compliance can be downloaded on the company's homepage (http://about.PUMA.com
under “INVESTOR RELATIONS / CORPORATE GOVERNANCE”). The Statements of Compliance of the past
five years are also accessible on this website.

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. 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

PUMA’s management acts in compliance with laws and self-imposed standards of conduct. PUMA has set
up a Compliance Management System (CMS) to systematically prevent, detect and sanction violations in the
areas of corruption, money laundering, conflicts of interest, antitrust law, fraud and embezzlement.
Violations of the law or internal guidelines will not be tolerated.

The PUMA Code of Ethics is an important building block of the CMS and is binding for employees of all
subsidiaries worldwide. It defines the guidelines and values that shape PUMA's identity. PUMA expects all
employees to be aware of these values and to act accordingly. The Code of Ethics contains rules, among
other things, on dealing with conflicts of interest and personal data and prohibits insider trading, anti-
competitive behavior and corruption in any form. In order to familiarize employees with the rules of the
Code of Ethics and to establish uniform behavioral guidelines, the Code of Ethics is flanked by specific
Group-wide guidelines.

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All employees are familiarized with the regulatory areas of the Code of Ethics through ongoing mandatory
e-learning. In addition, employees selected on the basis of risk-based principles are given in-depth
knowledge in classroom training or more comprehensive e-learnings. In 2020, the e-learning on the Code
of Ethics covered the topics of anti-corruption and reporting of compliance violations (“speak up culture”).
All PUMA employees were encouraged by the CEO of PUMA SE to complete the e-learning. The clear Tone
from the Top resulted in 98.7% of PUMA employees Group-wide (98.3% PUMA SE) successfully completing
the e-learning on the Code of Ethics. In-depth e-learning took place in the area of antitrust law for all sales
employees in the PUMA Group. 99% of the employees in the target group completed the e-learning. Due to
the COVID-19 pandemic, classroom training was replaced by virtual training. For example, a “train the
trainer” course was held for employees from the Social Sustainability area. These were then able to
communicate PUMA's expectations in the areas of anti-corruption and conflict of interest clearly and
consistently in their own training sessions with sourcing suppliers.

In 2020 PUMA developed a comprehensive Business Partner Due Diligence Policy. Upon a risk-based
approach all existing processes regarding the onboarding of high-risk business partners were analyzed,
consolidated and redefined. In the future, the due diligence process will be supported by a compliance
screening tool to which all local compliance officers will have access.

The Management Board is responsible for the proper functioning of the CMS. It is supported by a
compliance organization consisting of the Chief Compliance Officer and compliance officers in the main
operating Group companies. The Chief Compliance Officer of PUMA SE reports directly to the CEO of
PUMA SE. The local Compliance Officers also serve as direct contact persons for employees and support
them by appropriate communication measures as well as in dealing with and processing compliance
incidents. To facilitate cooperation within the global compliance organization, regular virtual meetings are
held with local Compliance Officers. These provide an opportunity to exchange experience and knowledge.
This informal exchange of information is supplemented by a compliance reporting process, which was
documented and formalized in written form in 2020. This process includes, among other things, that the
Chief Compliance Officer reports to the Audit Committee of the Supervisory Board of PUMA SE about the
current status of the implementation of 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” take place. At the meetings of this committee,
compliance risks are analyzed and evaluated and appropriate measures (guidelines, training, etc.) are
defined and approved. The review of the implementation of the requirements in the compliance guidelines
is regularly part of the audit plan of the internal audit department.

PUMA has a Group-wide electronic whistleblower platform, which is operated by an external provider and
to which employees and third parties can report protected illegal or unethical conduct. Violations from all
risk areas can be reported. Insofar as they do not fall within the competence of the compliance
organization, the responsible specialist departments are responsible for identifying and taking measures.
The introduction of the platform was communicated throughout the Group by the CEO and the
communication was flanked by appropriate information material. Every year, the local compliance officers
expressly draw attention to the whistleblower system through appropriate communication measures or in
face-to-face training sessions. Whistleblowers who report misconduct in good faith are protected from
retaliation. All reports are followed up immediately and, if confirmed, appropriate measures are taken. In
2020, the Compliance department at headquarters received 47 reports of alleged violations. The majority of
cases did not fall within the remit of the Compliance department. In two cases from 2019 in which
allegations of corruption were made, the investigation was concluded in 2020 without the allegations being
confirmed. In addition to the whistleblower platform, there is a global hotline for whistleblowers from the
supply chain.

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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 responsibility 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
management 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 responsibility of
the members of the Management Board and their mandates can be found in the Notes to the Consolidated
Financial Statements (last chapter). No member of the Management Board has, in aggregate, more than
two Supervisory Board mandates in non-group listed companies or comparable functions.

The members of the Management Board are obliged to disclose conflicts of interest to the Chair of the
Supervisory Board and to the CEO without undue delay and to inform the other members of the
Management Board accordingly. They may only assume sideline activities, 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 “INVESTOR RELATIONS /
CORPORATE GOVERNANCE”.

SUPERVISORY BOARD

The German Codetermination 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. Shareholder representatives
are being elected individually. CVs of the individual Supervisory Board members are available on the
Internet and are updated regularly. 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, their
mandates and the term of their membership can be found in the Notes to the Consolidated Financial
Statements (last chapter). Supervisory Board members who are not a member of any Management Board of
a listed company have not accepted more than five Supervisory Board mandates at non-group listed
companies or comparable functions.

The Supervisory Board appoints the members of the Management Board and may dismiss them at any time
for good cause. Initial appointments are for three years. The Supervisory Board determines the
remuneration system for the Management Board and reviews it regularly (most recently in 2018). It
determines the individual total compensation of each member of the Board of Management, taking into
account the ratio of the Management Board compensation to compensation in the MDAX (horizontal
comparison) and to the average compensation of the first management level below the Management Board
(n-1) as well as to the average compensation of all employees (vertical comparison). The relevant workforce
is the workforce of PUMA SE. Variable compensation components have a multi-year, mainly future-related
assessment basis. Variable remuneration components that last several years are not paid out prematurely.
Starting in the 2019 fiscal year, the Supervisory Board has set maximum limits for the individual

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compensation of the Management Board both in total and with regard to its variable components. It is
planned to submit a further developed Management Board remuneration system to the Annual General
Meeting on May 5, 2021 for approval, which complies with the requirements of the Act Implementing the
Second Shareholders' Directive (ARUG II), follows the recommendations of the Code 2020 and is even more
strongly aligned with shareholder interests.

The Supervisory Board monitors and advises the Management Board on the implementation of the strategy.
The Management Board informs the Supervisory Board regularly, promptly and comprehensively about all
issues of relevance to the Company relating to strategy, planning, business development, the risk situation,
risk management and compliance management system. 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 to which it has rights of approval.

Together with the Management Board, the Supervisory Board ensures succession planning for future
Management Board positions and key functions in the PUMA Group. On the basis of group-wide talent
conferences, the Management Board develops recommendations for potential internal successor
appointments, which it discusses regularly with the Supervisory Board. In making its recommendations, the
Management Board takes into account the Diversity Concept adopted by the Supervisory Board for the
composition of the Management Board (see below).

Between the meetings, the Chair of the Supervisory Board is in regular contact with the CEO in order to
discuss issues of strategy, business development, the risk situation, risk management and compliance of
PUMA. Prior to Supervisory Board meetings, the Management Board or the CEO regularly speaks
separately to the employee representatives and the shareholder representatives. At the end of the regular
meetings, the Supervisory Board always has the opportunity to discuss issues even in the absence of the
Management Board. It also makes regular use of this opportunity. The members of the Supervisory Board
also participate in the meetings by telephone or video conference.

The Supervisory Board regularly reviews the efficiency of its activities. The last time this review took place
was at the beginning of 2019. The Supervisory Board was supported by an external law firm that generated
56 questions that were answered by each of the Supervisory Board members. The results were evaluated
and implementation measures agreed upon.

No Supervisory Board member is a member of a governing body of, or exercises advisory functions at,
significant competitors of the company; no Supervisory Board member holds any personal relationships
with a significant competitor of the company.

The company supports the Supervisory Board in its training activities, for example by having the Legal
Department regularly review changes in the legal framework for the Supervisory Board and address them
in the meetings. In an onboarding program, new members of the Supervisory Board not only receive
training from the legal department on their rights and duties, but also have the opportunity in particular to
meet the members of the Management Board and other executives for a bilateral exchange on current
management issues and thus gain an overview of relevant topics of the company.

The principles of cooperation of the Supervisory Board of PUMA SE are set out in the Rules of Procedure for
the Supervisory Board, which can be viewed at http://about.PUMA.com under “INVESTOR RELATIONS /
CORPORATE GOVERNANCE”.

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SHAREHOLDERS AND 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.

As part of our comprehensive investor relations and public relations work, we are in close contact with our
shareholders. We inform shareholders, financial analysts, shareholders' associations, the media and the
interested public comprehensively and regularly about the situation of the Company and inform them
without undue delay about significant business changes. The Chair of the Supervisory Board is also
prepared to discuss Supervisory Board-specific issues with investors within an appropriate framework.

In addition to other communication channels, we make intensive use of the Company's website for our
investor relations work. At http://about.PUMA.com/en/investor-relations, all material information
published in the 2020 financial year, including annual, quarterly and half-yearly financial reports, press
releases, voting rights announcements by major shareholders, presentations and the financial calendar,
can be accessed.

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 Supervisory 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 “INVESTOR RELATIONS / CORPORATE GOVERNANCE”.

The Personnel Committee consists of three members. The Personnel Committee 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 members of the Personnel Committee are Jean-François Palus
(Chair), Fiona May and Martin Koeppel.

The Audit Committee consists of three members. The Chair 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 the review of the accounting
comprising particularly of the consolidated financial statements and the group management report
(including CSR reporting), interim financial information and the single entity financial statements in
accordance with the German Commercial Code (HGB). It is furthermore responsible for monitoring the
accounting process, the effectiveness of the internal control system, the risk management system, the
internal audit system, 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 statutory 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

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sheet and income statement and shall discuss these with the Management Board. In addition, when the
internal audit projects are completed, the Audit Committee shall receive the audit reports, which must also
include any actions taken. The members of the Audit Committee are Thore Ohlsson (Chair), Héloïse
Temple-Boyer and Bernd Illig.

The Nominating Committee has three members, who are 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 members of the
Nominating Committee are Jean-François Palus (Chair), Héloïse Temple-Boyer and Fiona May.

The current composition of the committees can further 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 C.1 of the Code
2020, 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. Details of this are presented under lit. b) of this chapter.

• A sufficient number of members have strong international backgrounds. This target has been clearly
surpassed simply because of the international origins of Jean-François Palus, Héloïse Temple-Boyer,
Thore Ohlsson and Fiona May.

• The Supervisory Board has an appropriate number of independent members. With Jean-François Palus,
Héloïse Temple-Boyer, Thore Ohlsson and Fiona May four out of six members of the Supervisory Board
are considered independent.
The Code 2020 does not contain a conclusive definition of independence regarding the shareholder
representatives in the supervisory board, but rather lists examples of circumstances that may indicate a
lack of independence. It is the task of the supervisory board to assess the independence of the
members of the supervisory board on the basis of these indications and evaluate whether a member
has a personal or business relationship with the company or its management board that may cause a
substantial – and not merely temporary – conflict of interest. Against this backdrop, PUMA’s
Supervisory Board believes that there are currently no specific indications of relevant circumstances or
relationships for any member of the Supervisory Board that could constitute a material and not merely
temporary conflict of interest and that would therefore interfere with their independence.
With regard to Supervisory Board members Jean-François Palus and Héloïse Temple-Boyer, the
Supervisory Board is of the opinion that their functions as Directeur Général Délégué of Artémis S.A.S.
do not impair their independence within the meaning of the Code 2020. Artémis S.A.S. is not a
controlling shareholder, as Artémis S.A.S. is neither a majority shareholder nor does it have a de facto
majority at the Annual General Meeting.
With regard to the members of the Supervisory Board Mr. Jean-François Palus and Mr. Thore Ohlsson,
the Supervisory Board believes that the length of their tenure as members of the Supervisory Board,
which each exceeds 12 years, does not interfere with their independence within the meaning of the Code
2020 as it does not give rise to a material conflict of interest. This is due to the fact that Mr. Palus and
Mr. Ohlsson currently hold positions in the management and supervisory boards of several other
companies. They both have demonstrated a high level of professionalism during their long experience in
the management of various companies and the Supervisory Board believes that both would avoid any
circumstances that may give rise to conflict of interest. There are no other indications of a conflict of
interest in Mr. Palus’ and Mr. Ohlsson’s person.

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Jean-François Palus as the Chair of the Supervisory Board, Thore Ohlsson as the Chair of the Audit
Committee and Jean-François Palus as the Chair of the Personnel Committee are all considered
independent from the Management Board, the company and a controlling shareholder. No former
member of the Management Board is member of the Supervisory Board.

• Thore Ohlsson, the Chair of the Audit Committee has specific knowledge and experience in applying

accounting principles and internal control procedures, is familiar with audits and is independent. Jean-
François Palus and Héloïse Temple-Boyer also bring this specific knowledge with them.

• The members have sufficient time to perform his/her mandate in the Supervisory Board. Prior to each
election proposal, the Supervisory Board examines whether the candidates concerned are able to
complete the time required for the office.

• 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. There were
no indications of actual conflicts of interest in the 2020 financial year. If a conflict of interest would
occur each member of the Supervisory Board informs the Chair of the Supervisory Board without undue
delay.

• 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. In setting this age limit, the Supervisory Board deliberately decided against a rigid
maximum age limit and in favor of a flexible rule limit that provides the necessary leeway for an
appropriate assessment of the circumstances of the individual case, sufficiently broadly defines the
circle of potential candidates and also allows re-election. Thore Ohlsson has reached the statutory age
limit. After careful consideration, he was nevertheless proposed by the Supervisory Board for re-
election in 2018 in order to ensure the necessary continuity after the spin-off from Kering S.A. in the
best interests of the company. All other Supervisory Board members did not reach the standard age
limit at the time of their election.

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:

• Managing of large or mid-sized international companies (Jean-François Palus, Héloïse Temple-Boyer,

Thore Ohlsson)

• Leadership experience in the sporting or luxury goods industry (Jean-François Palus, Héloïse Temple

•

Boyer, Thore Ohlsson, Fiona May)
International corporate background (Jean-François Palus, Héloïse Temple-Boyer, Thore Ohlsson, Fiona
May)

• Leadership experience with various disribution channels, including e-commerce (Jean-François Palus,

Thore Ohlsson)

• Expertise in building strong international brands (Jean-François Palus, Héloïse Temple-Boyer, Thore

Ohlsson, Fiona May)

• Marketing, sales and digital know how (Jean-François Palus, Héloïse Temple-Boyer, Thore Ohlsson)
• Financial expertise (accounting, treasury, risk management, corporate governance) (Jean-François

Palus, Thore Ohlsson, Héloïse Temple-Boyer)

• Expertise in serving on the Administrative or Supervisory boards of publicly listed companies (Jean-

François Palus, Heloise Temple-Boyer)

• Experience with mergers & acquisitions (Jean-François Palus, Thore Ohlsson)
• Understanding of the industrial constitution law and advocating the interests of the employees (Martin

Koeppel, Bernd Illig)

• HR expertise (Jean-François Palus)
•

IT expertise (Bernd Illig).

The Supervisory Board of PUMA SE is currently composed in such a way that it has the competence profile
as an overall body.

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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), SECTION 111(5) AKTG

The Supervisory Board shall define a target figure for the proportion of women on the Supervisory Board
and the Management Board. The Management Board, for its part, shall set target figures for the proportion
of women in the two management levels below the Management Board.

For the Supervisory Board of PUMA SE, a target figure of 30% has been set for the targeted proportion of
women. The implementation period for this target is October 31, 2021. As of December 31, 2020, the six-
member Supervisory Board included two women, Fiona May and Héloïse Temple-Boyer, resulting in a
female representation of 33%.

The Supervisory Board has set a target of 20% for the Management Board, provided that PUMA SE has five
or more members. The implementation period for this target is October 31, 2021. The Management Board,
which consisted of three members as of December 31, 2020 including Anne-Laure Descours, will be
composed of 33% women and 66% men.

Together with the Supervisory Board, the Management Board has set a target of 25% for the first
management level below the Management Board and 30% for the second management level below the
Management Board. At Group level, the proportion of women is to increase to 30% for the first management
level below the Management Board and to 40% for the second management level. The implementation
deadline here, too, is October 31, 2021.

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 the technical requirements laid out in the following. 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. With Anne-Laure Descours a woman is represented on
the Management Board. The proportion of women on the Management Board is therefore currently 33%.

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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. Notwithstanding the several years of international experience of all board members, this goal has
been exceeded simply because of the international origins of Bjørn Gulden and Anne-Laure Descours.

- 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. All members of the
Management Board are below the standard age limit.

- 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 members of the board have all the above mentioned competences.

The current composition of the Management Board implements the diversity concept.

REMUNERATION REPORT

The remuneration report prepared by the Management Board and the Supervisory Board is published at
https://about.PUMA.com/en/investor-relations/corporate-governance.

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RISK AND OPPORTUNITY REPORT

PUMA is continuously exposed to opportunities and risks in the competitive, fast-paced and international
sport and lifestyle industry. The risk strategy is therefore to take business risks in a calculated manner in
order to implement the corporate strategy with all its opportunities. For this purpose, effective risk and
opportunity management is required so that opportunities can be recognized and utilized, and risks
identified and managed at an early stage. We define risks as potential future developments or events that
may lead to a negative deviation from targets for the company. Similarly, opportunities are potential future
developments or events that may result in a positive deviation from targets.

RISK MANAGEMENT SYSTEM

PUMA takes a conscious and controlled approach to risks in order to achieve the company's goals. The aim
of the risk management system is to identify and manage material or even existence-threatening risks in
particular at an early stage in order to support the achievement of the company's goals. In addition,
compliance with the related laws, regulations and standards must be ensured, as well as transparency in
relation to the risk situation from the perspective of partners such as customers, suppliers and investors.
Therefore, PUMA has established an appropriate risk management organization which is able to identify
risks at an early stage and manage them in accordance with the corporate strategy and promote risk
awareness within the PUMA Group to facilitate risk-based decisions. Opportunity management is not part of
the risk management system and is the responsibility of operational management teams.

The Management Board of PUMA SE bears overall responsibility for the risk management system. The
Management Board regularly updates the Audit Committee of the Supervisory Board of PUMA SE. The Risk
Management Committee, which consists of the PUMA SE Management Board and selected managers, is
responsible for the design, review and adaptation of the risk management system. The risk management
function of the Group Internal Audit, Risk Management & Internal Control Department has been assigned to
prepare regular risk reports for the Risk Management Committee. Their remit is to enhance operational
coordination of the risk management process and support risk owners. The responsibilities, tasks and
processes relating to the risk management system are defined in guidelines. The structure and design of
the risk management system is as follows:

↗ G.21 RISK MANAGEMENT SYSTEM

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The risk owners are mainly the managers of the functional areas and the managing directors of the
subsidiaries. Risks are identified by performing a bottom-up analysis within the risk owner's area of
responsibility and are regularly reported to the risk management function and/or the local monitoring
bodies in structured interviews or on an ad-hoc basis. The risks are assessed using a systematic
methodology based on the probability of occurrence, extent of damage and level of control using qualitative
criteria. Regular risk identification and assessment is carried out by the risk management function every
six months with all major functional areas. The risks recorded and assessed are also reviewed in a top-
down assessment by the Risk Management Committee. This ensures that adequate consideration is given
to interdependencies and the overall risk situation.

The risk owners are responsible for the operational management of identified risks. Risks can be managed
by avoiding, reducing, diversifying or transferring the risk in order to achieve the aimed and acceptable
residual risk. Within the reporting process, material or even existence-threatening risks are coordinated
and managed with the Risk Management Committee or the Management Board. The methodology and
structure of the risk management system are continuously assessed in terms of their effectiveness, and
adapted or improved when required.

RISKS

The following explanations of risk categories are presented based on their relative importance.

COVID-19 PANDEMIC

The COVID-19 pandemic was identified as a new risk in the financial year 2020 and was considered the most
significant business risk for the PUMA Group. This risk relates to the macroeconomic and social impacts of
the pandemic, caused for example by lockdowns, government-ordered closures of retail stores, restrictions
on store opening hours, a reduction in store traffic, travel restrictions and social distancing measures, the
cancellation or postponement of major sporting events, and the exclusion or limitation in the numbers of
spectators. These consequences have led or may in the future lead to declines in revenue and challenges in
maintaining business operations. Furthermore, we are faced with new requirements, regulations and
further measures in relation to the health and safety of our employees and customers. The COVID-19
pandemic has also had a negative impact on existing sourcing and supply chain risks, as well as default
risks of receivables.

In 2020 the COVID-19 pandemic has developed rapidly and dynamically, and the extent and duration of the
resulting impact on our business was and remains extremely difficult to predict. However, we assume that
the situation created by the COVID-19 pandemic will not be long term.

Our aim is to survive this crisis, to stabilize and recover, and then to emerge stronger than before without
hindering PUMA's mid-term growth. Our approach is local, as different markets are going through these
phases at different times. Our main focus is on the health and safety of our employees and customers,
securing the liquidity of the PUMA Group by securing credit lines, maintaining close and reliable
cooperation with our partners, suppliers and customers, strengthening and expanding the supply chain,
digitalizing key business processes and further strengthening our e-commerce business. In particular, we
strengthened the partnership with our suppliers by cancelling only a very small proportion of orders with
our suppliers and agreeing extended payment terms in return. The unused credit lines of the PUMA Group
serve as a safety reserve for the potential consequences of the COVID-19 pandemic. The significant
increase in credit lines in the 2020 financial year results from the conclusion of a syndicated credit facility in
May of €900 million from 11 commercial banks and the Kreditanstalt für Wiederaufbau (KfW) as “bridge
financing” for a maximum of 2 years. This credit line has not been used so far and could already be reduced
by €700 million to only €200 million by the end of 2020. For the refinancing and planned redemption of this
“bridge financing”, we secured a new promissory note loan in the amount of €250 million with a term of 3 or
5 years and increased existing syndicated credit lines by €450 million.

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SOURCING AND SUPPLY CHAIN

The majority of PUMA products is produced in selected Asian countries, in particular in Vietnam, China,
Bangladesh, Cambodia, Indonesia and India. Production in these countries contains considerable risks for
us. These risks arise, for example, from changes in sourcing and wage costs, supply bottlenecks for raw
materials or components, and quality issues, as well as from the possibility of 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 the
required production capacities for the future. A quality control process and the direct and partnership-like
collaboration with manufacturers should permanently secure the quality and availability of our products.
Sourcing and the supply chain must also react to risks, like changes in duties and tariffs as well as trade
restrictions. The transport of products to the distribution countries is also exposed to the risk of delays and
failures by warehouse and logistics service providers.

We therefore continuously analyze political, economic and legal framework conditions and have further
enhanced our close cooperation with our logistics partners in order to be able to react to changes in the
supply chain early on and to continuously strengthen the supply chain. The collaboration with warehouse
and logistics service providers is accordingly secured by selection processes, consistent contractual terms
and permanent monitoring of relevant indicators.

The COVID-19 pandemic caused delays and interruptions in sourcing and supply chain operations,
especially in the first half of the financial year 2020, and this led to an increase in the individual risk. To
counter this risk, we have intensified our cooperation with suppliers and logistics partners in order to be
able to react flexibly and solution-oriented to the circumstances.

INFORMATION TECHNOLOGY

The ongoing digitalization of the business environment exposes PUMA to risks in information technology.
Key business procedures and processes may be significantly disrupted by the failure of IT systems, and
external attacks or wrong behaviour may result in the loss of confidential and sensitive data, as well as high
costs, loss of revenue and reputational damage.

To mitigate these risks, we continuously carry out technical and organizational measures and invest in the
renewal and security of our IT landscape. IT systems are regularly checked, maintained and undergo
security tests. In addition, all employees are continuously sensitized using guidelines, training courses and
information campaigns.

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.

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BRAND IMAGE

Brand image and brand desirability are of key importance for us, as consumer behavior can have a negative
effect on the brand as well as a positive one. Accordingly, we have 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.

We manage brand image risks in particular through cooperation with brand ambassadors who embody the
core of the brand and PUMA's brand values (“brave,” “confident,” “determined” and “joyful”) and have a
large potential for influencing PUMA's target group. Therefore, we are strengthening our position as a
sports brand through partnerships with top athletes such as star striker Antoine Griezmann, sprint legend
Usain Bolt, multiple Formula 1 world champion Sir Lewis Hamilton, pro golfer Rickie Fowler, NBA player
Danny Green, cricketer Virat Kohli, 400-meter hurdles world champion Karsten Warholm, and many other
top athletes. In 2020, superstar and professional football player Neymar Jr. also became a PUMA brand
ambassador. In football, PUMA has long-term sponsorship agreements with top clubs, such as Manchester
City, Borussia Dortmund, AC Milan, Olympique Marseille and the Italian national team. PUMA also
intensified its involvement in basketball, athletics, handball and other sports. We reach young trendsetters
via brand ambassadors and collaborations in the music, movie and fashion scene, such as Jay-Z, Meek Mill,
Adriana Lima, Cara Delevingne, Selena Gomez, Winnie Harlow and Dua Lipa, and also increasingly via
global and local influencers in social networks.

MACROECONOMIC DEVELOPMENTS

As an internationally operating group, PUMA is exposed to global macroeconomic developments and the
associated risks having an impact on our sales and sourcing markets. 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, social developments and
environmental events can also be reflected in changes in legal and macroeconomic conditions. This may
happen, for example, in connection with protest movements such as those seen in Hong Kong and other
parts of the world, or as a consequence of Brexit.

Overall, we manage 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 in legal framework conditions which are continuously monitored by PUMA and
incorporated into appropriate measures, such as the adjustment of the supply chain to the UK due to the
Brexit.

ORGANIZATIONAL CHALLENGES AND PROJECT RISKS

PUMA's organizational structure with its group headquarters in Herzogenaurach, a central sourcing
organization and globally positioned distribution companies gives the group a global orientation. This
results in a risk for us that the flow of goods and information are not sufficiently supported by modern
warehouse, logistics and 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 the specialized departments.

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

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with internal guidelines. Currency forward contracts are used to hedge existing and future financial
liabilities in foreign currencies.

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
2020, the net requirements for the 2021 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 (EUR).

In order to disclose market risks, IFRS 7 requires sensitivity analysis 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 that are denominated in a
currency that is not the functional currency and are 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 analysis are based on the following assumptions: Material original monetary financial
instruments (cash and cash equivalents, receivables, interest-bearing and non-interest-bearing liabilities)
are either denominated in the functional currency or are transferred into the functional currency using
currency forward transactions.

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.

DEFAULT RISKS

PUMA's business activities result in the company being 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. Due to the negative
macroeconomic effects of the COVID-19 pandemic, the default risk of receivables increased in the financial
year 2020. As a result, value adjustments to receivables increased compared to the previous year.
Furthermore, default risks to a lesser extent arise from the counterparty's other contractual financial
obligations such as bank deposits and derivative financial instruments.

LIQUIDITY RISK

PUMA continually analysis short-term capital requirements through rolling cash flow planning at the level
of the individual companies in coordination with the central Treasury department. PUMA maintains a
liquidity reserve, for example, in the form of cash and confirmed credit facilities in order to ensure the
company's solvency, financial flexibility and a strategic liquidity buffer. In this respect, as of December 31,
2020, the PUMA Group had unused credit lines totaling €1,372.7 million.

Medium and long-term funding requirements that cannot be directly covered by net cash from operating
activities are financed by taking out medium and long-term loans. For this purpose, various promissory
note loans were issued in July 2018, December 2019 and December 2020, each in several tranches with a

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fixed and a variable coupon and each with different residual terms. The utilized promissory note loans total
€245.0 million as at December 31, 2020 and have a remaining term of between one and five years.

DISTRIBUTION STRUCTURE

PUMA utilizes various distribution channels, such as the traditional wholesale business with our retail
partners and the PUMA-owned retail and e-commerce business to reduce its dependency on individual
distribution channels. The wholesale business is defined by strong partnerships and represents the largest
revenue share overall. The company's own retail and e-commerce business is intended to ensure a higher
gross profit margin, better control on distribution and presentation of PUMA products exclusively in the
desired brand environment.

In the wholesale business, up-and-coming retailers, including those offering their own brands, and
competitors pose the risk of intensified competition for consumers and market shares. Consumer purchase
behavior is also changing, focusing more on e-commerce and a combination of stationary and digital trade.
This requires continuous adjustment of the distribution structure. Distribution through the company's own
retail stores and e-commerce channels is, however, also associated with various risks for us. These include
the necessary investments in expansion and infrastructure, setting up and refurbishing stores, higher fixed
costs and leases with long-term lease obligations. This can have an adverse impact on profitability in case
of a business decline.

In order to avoid risks, we carry out permanent monitoring of distribution channels and regular reporting by
the Controlling and specialized departments. A detailed location and profitability analysis is carried out in
our distribution channels before making any investment decision. The company's reporting and controlling
system allows us to detect negative trends early on, and to take the countermeasures required to manage
individual stores. 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 shopping experience for
consumers.

COUNTERFEIT PRODUCTS

Counterfeit products can undermine consumer confidence in the brand and damage PUMA's brand image.
Fighting brand piracy is therefore a high priority for us. The PUMA team responsible for the protection of
intellectual property not only ensures that we have a strong global portfolio of property rights, such as
brands, designs and patents, but also works closely with customs and police forces and provides input
regarding the implementation of effective legislation to protect intellectual property.

REPORTING IN THE MEDIA

A negative media report about PUMA, such as a product recall, the infringement of laws or internal or
external requirements, and exposure on social media in this age of “fake news”, as well as workforce
diversity and tolerance, can also cause significant damage to brand image and ultimately result in the loss
of sales and profit, regardless of whether these events actually happened or were just rumors.

We encounter this risk via careful press, social media and public relations work and through monitoring of
the press and social media environment. This is managed from the group headquarters in Herzogenaurach,
Germany, and the subsidiary in the U.S. In addition, PUMA continuously seeks an open dialog with key
external stakeholders, such as suppliers, NGOs and industry initiatives, and has institutionalized this as
part of regularly held “Sustainability Stakeholder Meetings.”

SUSTAINABILITY

Sustainability topics are highly important in sourcing, but also throughout the entire value chain. There is a
risk that suppliers will violate core labor standards of ILO (International Labour Organization), not comply
with environmental standards or use hazardous chemicals in production. This would violate our

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requirements to suppliers and also lead to negative reporting and potentially to a loss of revenue.
Adherence to applicable standards is ensured through regular audits of supplier companies.

In addition, climate change and the resulting increase in customer requirements with regard to
sustainability are leading to a stronger ecological focus in our product range, both at our own locations and
along the production and supply chain. A more efficient use of resources and reduction of greenhouse gas
emissions as well as the increased use of sustainable production materials are crucial parts of our
sustainability strategy.

PUMA's sustainability report (the Non-financial Report) for the financial year 2020 will be available by April
30, 2021 at the latest on the following page of our website: https://about.PUMA.com/en/investor-
relations/financial-reports. Furthermore, important sustainability information can always be found in the
Sustainability section on PUMA's website: http://about.PUMA.com/en/sustainability

PERSONNEL DEPARTMENT

The creative potential, commitment and performance of PUMA employees are important factors for
successful business development. We encourage independent thinking and action, which are key in an open
corporate culture with flat hierarchies. Our human resources strategy seeks to ensure this successful
philosophy on a long-term and sustainable basis. To achieve this goal, a control process is in place to detect
and assess human-resource risks. Accordingly, special attention has been paid to talent management,
identifying key positions and high-potential individuals, and optimizing talent placement and succession
planning. We have also instituted additional national and global regulations and guidelines to ensure
compliance with legal provisions and safeguard the health and safety of our employees. We will continue to
make targeted investments in the human-resource needs of particular functions or regions in order to
meet the future requirements of our 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. Therefore, we use various tools to manage these risks. This includes 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 regarding critical
compliance topics, such as corruption prevention and cartel law, and corresponding guidelines and a global
network of compliance officers are introduced in the group. PUMA employees also have access to an
whistleblowing system for reporting unethical behavior.

TAX RISKS

In an international business environment, applicable tax regulations must be observed. By means of
appropriate internal rules of conduct, employees are required to comply with and adhere to the relevant tax
regulations. In addition to compliance with national tax regulations to which the individual group companies
are subject, there are increasing risks in the course of intra-group transfer pricing, which must be applied
for various internal business transactions in accordance with the arm's length principle between individual
group companies. In all tax areas PUMA has taken adequate precautions with internal and external tax
experts in order to comply with the relevant tax regulations, but also to be able to react to changes in the

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Annual Report 2020 ↗ Combined Management Report

constantly changing tax environment. For the group-internal transfer prices a corresponding
documentation exists, which was prepared according to international and national requirements and
standards. There are guidelines and specifications for determining transfer prices for intra-group
transactions that are customary for foreign companies, which comply with the applicable procedural rules
and are binding on the employees acting on behalf of the group. By means of internal tax reporting, external
and internal tax experts are able to control and monitor tax developments at PUMA on an ongoing basis.
Both the Management Board and the Supervisory Board are continuously informed about tax developments
at PUMA in order to identify and avoid tax risks as early as possible.

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.

RISK OVERVIEW TABLE

The following table summarizes the risk categories described above based on their relative importance and
any changes during the year:

↗ T.10 OVERVIEW OF RISK CATEGORIES (Order according to relative importance)

Classification of
risk category

Description

Change
compared to
previous year

COVID-19 Pandemic

Strategic

Sourcing and Supply Chain

Operational

E.g. store closures, supply problems,
employee and customer health

New

E.g. sourcing costs, supply bottlenecks,
quality issues

(COVID-19) ↗

Information Technology

Operational

E.g. cyberattacks, system failures

Product and Market Environment

Strategic

E.g. trends, customer requirements

Brand Image

Strategic

E.g. brand heat, brand ambassadors

Macroeconomic Developments

Strategic

E.g. economic development, political
situation, legal framework conditions

Organizational Challenges and Project
Risks

Strategic

E.g. IT infrastructure, construction
projects

Currency Risks

Default risks

Liquidity Risk

Financial

E.g. exchange rate fluctuations

Financial

E.g. payment claims against customers

(COVID-19) ↗

Financial

E.g. cash, credit lines

Distribution Structure

Strategic

E.g. change in the distribution landscape

Counterfeit Products

Regulatory

E.g. brand piracy

Reporting in the Media

Strategic

E.g. negative press, social media

Sustainability

Regulatory

E.g. human rights, environmental
standards

Personnel Department

Operational

E.g. key positions

Legal Risks

Compliance Risks

Tax Risks

Regulatory

E.g. trademark law, patent law

Regulatory

E.g. fraud, corruption

Financial

E.g. transfer prices

Interest-Rate Risks

Financial

E.g. variable-rate financial liabilities

↗

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Annual Report 2020 ↗ Combined Management Report

OPPORTUNITIES

Opportunities should be identified by PUMA at an early stage, assessed and - where possible - used. Due to
the close connection to the relevant goals, identified opportunities are incorporated into planning by
Controlling. Operational management teams in the respective regions, markets and departments are
responsible for opportunity management. The following key opportunity categories were identified for the
planning period and beyond.

In terms of macroeconomic conditions, the effects of the COVID-19 pandemic are currently seen as
strengthening of the sport and lifestyle sector. If PUMA succeeds in emerging stronger from the crisis
without hindering mid-term growth potential, the company has an opportunity to increase its market share.
At a time when working from home is increasing and indoor and team sports are limited, items such as
running, fitness, golf and lounge products have become more relevant. The product range in these areas is
therefore being expanded and improved. Furthermore, postponed sporting events such as the Olympic
Games and the European Football Championship, as well as the easing of restrictions, may lead to a further
increase in the consumption of sporting goods or catch-up effects. In addition, there are opportunities in
the regulatory environment, for example in connection with a reduction in trade restrictions and
protectionism, particularly in connection with the outcome of the US election.

In terms of the distribution structure, the COVID-19 pandemic has significantly accelerated the growth of
the e-commerce business. Stronger partnerships in the wholesale business also offer opportunities for
future business development. New sales formats and improvements to the shopping experience in our own
retail stores can also open up positive business prospects. In this area, new, state-of-the-art multi-channel
distribution centers in key markets will also support the further optimization of delivery capacity in the
future.

In information technology, improved, tailored communication with customers via digital channels and new
ways of presenting products, for example, offer opportunities. In addition, new or more efficient processes
may add value or result in cost optimization. Here, too, the COVID-19 pandemic has accelerated the
digitalization of important business processes, for example with regard to product design and the
purchasing process for our wholesale customers. It has also contributed to the further development of the
IT environment.

With end customers paying more attention to sustainability, there is an opportunity to make further
progress with existing PUMA activities and improve communication in this area, which could increase
demand for sustainable products.

Furthermore, in the area of finance, for example, favorable exchange rate developments offer the
opportunity to positively influence the group's financial results.

OVERALL ASSESSMENT OF THE RISK AND OPPORTUNITY SITUATION

The assessment of the overall risk situation of the Group and PUMA SE is the result of a consolidated view
of the risk and opportunity categories described above. Compared to what was presented in our 2019
Annual Report, our assessment of PUMA's overall risk situation has been expanded mainly to account for
the effects of the COVID-19 pandemic described above, which is currently the biggest challenge. The
Management Board is currently not aware of any significant risks that, either individually or in combination
with other risks, could jeopardize the continued existence of the Group and PUMA SE.

However, we cannot exclude the possibility that in the future factors that are currently unknown to us or
that we currently assess as immaterial might influence the continued existence of the Group and PUMA SE
and its consolidated companies. Also due to the extremely solid balance sheet structure and equity ratio, as
well as the strong liquidity position and the positive business outlook, the Management Board does not see
any significant threat to the continued existence of the PUMA Group and PUMA SE.

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Annual Report 2020 ↗ Combined Management Report

MAIN FEATURES OF THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
AS IT RELATES TO THE GROUP'S ACCOUNTING PROCESS

The Management Board of PUMA SE 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 by the Management Board and the management.

The 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
necessary to accomplish these, such as internal instructions, organizational and authorization guidelines,
the relevant company guidelines (e.g. “Anti-Corruption/Anti-Bribery,” “Cyber Fraud”), 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, Risk Management & Internal Control
Department.

For monthly financial reporting and consolidation, PUMA has a group-wide reporting and controlling
system that allows 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
presented.

The Audit Committee of the Supervisory Board meets on a regular basis with the independent statutory
auditors, the Management Board and the Group Internal Audit, Risk Management & Internal Control
Department to discuss the results of the internal audits and statutory audits with reference to the internal
control and risk management system as it relates to the accounting process. At the annual meeting on the
financial statements, the auditor reports to the Audit Committee and to the Supervisory Board on the
results of the audit of the annual and consolidated financial statements.

159

Annual Report 2020 ↗ Combined Management Report

In addition to the measures described, the Group Internal Audit, Risk Management & Internal Control
Department carries out so-called Internal Control Self-Assessments (ICSA) for all essential business
processes across the Group. In this way, the internal control system is expanded beyond the accounting
process, in line with the framework of the Committee of Sponsoring Organizations of the Treadway
Commission (COSO), to support the objectives of ensuring proper financial reporting, improving the
efficiency and effectiveness of the processes, and ensuring compliance with legal framework conditions.
The use of a standardized software system (GRC tool) is intended to ensure the systematic and uniform
implementation of ICSA across the entire company. In these, process owners evaluate the existing control
framework based on internal and external guidelines and best-practice standards. The objective is to
continuously improve the internal control system and to identify specific risks and potential for
improvement in the control environment at process level in order to define appropriate recommendations
for action and enable these to be implemented timely by the process owners. The results of the ICSA are
reported to the Audit Committee and the statutory auditors and are used specifically by the Group Internal
Audit, Risk Management & Internal Control Department in risk-oriented audit planning.

160

Annual Report 2020 ↗ Combined Management Report

OUTLOOK REPORT

GLOBAL ECONOMY

Following the historic economic downturn resulting from the global COVID-19 pandemic in 2020, experts at
the Kiel Institute for the World Economy (ifw Kiel) expect global gross domestic product (GDP) to rise
robustly by 6.1% in 2021 (winter forecast dated December 16, 2020). The strong recovery of the global
economy is based on the assumption that the population will become increasingly vaccinated in 2021 and
that the risks of infection will be sustainably reduced, leading to a progressive normalization of economic
conditions. Provided that vaccination programs are implemented quickly and comprehensively, this should
help to reduce economic uncertainty and increasing household consumption spending, supported by low
interest rates and income-supporting fiscal policies. However, the greatest risks to economic development
stems from uncertainty about the future course of the COVID-19 pandemic, should vaccination of the
population turn out to be more difficult or take longer than expected. At the same time, the normalization
process could also take place more quickly if conditions are favorable, leading to greater economic
momentum.

SPORTING GOODS INDUSTRY

Provided that the continued course of the COVID-19 pandemic does not result in a renewed significant
negative impact on the macroeconomic conditions, we expect the sporting goods industry to grow in 2021.
We expect demand for sporting goods to increase in 2021 as the trend toward increased sports activities
and healthier lifestyles continues and becomes even more significant as a result of the COVID-19 pandemic.
This applies equally to the increasing popularity of athletic footwear and leisure/athletic apparel as an
integral part of everyday fashion (“athleisure”). We also expect that major sporting events postponed to
2021 - the Tokyo Summer Olympics and the European Football Championship - will also help to support
growth in the sporting goods industry.

OUTLOOK 2021

Our sales and profitability rebounded strongly in the third quarter of 2020 after a very weak second quarter,
which was severely impacted by the COVID-19 pandemic. Given this strong rebound, we anticipated that
2021 would become what 2020 was initially supposed to be: a year characterized by double-digit sales
growth compared to the 2019 baseline and a strong improvement in our operating result (EBIT) driven by a
slight improvement in our gross profit margin and operational leverage (2019 EBIT: €440.2 million).

However, as we enter the year 2021 more than 50% of the retail stores that are selling our products in
Europe are currently closed due to various lockdown measures. As the number of COVID-19 cases
continues to rise around the world, more and more markets are closing down retail stores in compliance
with local restrictions and several governments have already extended their lockdowns into February or
even March. By consequence, a part of our business in 2021 will be once again negatively impacted by the
COVID-19 pandemic despite a strong orderbook and high demand from our retail partners and customers.
We will continue to mitigate the consequences of the COVID-19 pandemic wherever possible but foresee a
negative impact on our business especially in the first half of 2021.

We currently believe that the first quarter and also the beginning of the second quarter will be heavily
impacted but that we will see a recovery until the end of the second quarter and strong improvements
throughout the third and fourth quarter. Given that vaccination campaigns are already under way in almost
all parts of the world, we remain confident especially for the second half of 2021. For the full year 2021 we
consequently expect at least a moderate increase in sales in constant currency (2020: €5,234.4 million) and
that both our operating result (EBIT 2020: €209.2 million) and net earnings (2020: €78.9 million) will show a

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Annual Report 2020 ↗ Combined Management Report

significant improvement compared to 2020. The development of our gross profit margin and our OPEX-ratio
for 2021 will depend on the degree and duration of the negative impact of the COVID-19 pandemic on our
sales.

Our quick recovery in the third quarter and the beginning of the fourth quarter of 2020 and our strong
orderbook for the year 2021 combined with very good feedback from retailers and customers around the
world make us confident for the mid-term success and growth of PUMA.

INVESTMENTS

Investments in fixed assets of around €200 million are planned for 2021. The majority of these investments
will be in infrastructure in order to create the operating conditions required for the planned long-term
growth. The investments mainly concern own distribution and logistics centers and further investments in
the expansion and modernization of the Group’s own retail stores.

FOUNDATION FOR LONG-TERM GROWTH

The Management Board and the Supervisory Board have set long-term strategic priorities. Action plans are
being implemented in a targeted and value-oriented manner. We believe that the corporate strategy
“Forever Faster” provides the basis for medium- and long-term positive development.

Herzogenaurach, February 2, 2021

The Management Board

Gulden

Lämmermann

Descours

162

Annual Report 2020 ↗ Consolidated Financial Statements

CONSOLIDATED FINANCIAL
STATEMENTS

164

166

167

168

170

Consolidated Statement of Financial Position

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Cash Flows

Statement of Changes In Equity

172 Notes to the Consolidated Financial Statements

261 Declaration by the Legal Representatives

262

Independent Auditor’s Report

163

Annual Report 2020 ↗ Consolidated Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS

↗ T.01 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS

Cash and cash equivalents

Inventories

Trade receivables

Income tax receivables

Other current financial assets

Other current assets

Current assets

Deferred tax assets

Property, plant and equipment

Right-of-use assets

Intangible assets

Other non-current financial assets

Other non-current assets

Non-current assets

Total assets

12/31/2020

12/31/2019

Notes

€ million

655.9

518.1

1,138.0

1,110.2

621.0

611.7

21.3

52.9

34.2

76.6

124.1

130.5

2,613.0

2,481.2

277.5

406.9

877.6

443.5

58.8

6.8

237.7

394.8

719.0

454.6

71.5

19.3

2,071.0

1,897.0

4,684.1

4,378.2

164

LIABILITIES AND SHAREHOLDERS' EQUITY

Current financial liabilities

Trade payables

Income taxes

Current lease liabilities

Other current provisions

Other current financial liabilities

Other current liabilities

Current liabilities

Non-current lease liabilities

Deferred tax liabilities

Pension provisions

Other non-current provisions

Other non-current financial liabilities

Other non-current liabilities

Non-current liabilities

Subscribed capital

Capital reserve

Other reserves

Treasury stock

Equity attributable to the shareholders of the parent

Non-controlling interests

Shareholders' equity

Total liabilities and shareholders' equity

Annual Report 2020 ↗ Consolidated Financial Statements

12/31/2020

12/31/2019

Notes

€ million

121.4

941.5

89.2

156.5

35.3

151.1

377.8

10.2

843.7

88.9

144.8

34.8

60.5

376.0

1,872.8

1,558.9

775.2

600.5

40.6

38.2

38.9

53.0

34.1

43.2

153.7

163.8

0.7

1,047.4

150.8

84.8

4.4

899.0

150.8

83.0

1,514.2

1,668.0

-27.4

-28.1

1,722.4

1,873.6

17, 29

41.5

46.7

1,763.9

1,920.3

4,684.1

4,378.2

165

↗ T.02 CONSOLIDATED INCOME STATEMENT

Sales

Cost of sales

Gross profit

Royalty and commission income

Other operating income and expenses

thereof impairment losses on trade receivables
and other financial assets

Operating result (EBIT)

Financial income

Financial expenses

Financial result

Earnings before taxes (EBT)

Taxes on income

Consolidated net earnings for the year

attributable to:

Non-controlling interests

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)

Annual Report 2020 ↗ Consolidated Financial Statements

2020

2019

Notes

€ million

19, 25

5,234.4

5,502.2

-2,776.4

-2,815.8

2,458.0

2,686.4

16.1

25.1

-2,264.9

-2,271.3

-30.7

-3.4

209.2

440.2

35.4

-82.3

-46.8

25.8

-48.4

-22.6

162.3

417.6

-39.2

-108.6

123.1

309.0

17, 29

44.2

78.9

0.53

46.6

262.4

1.76

149.56

149.52

149.56

149.52

166

Annual Report 2020 ↗ Consolidated Financial Statements

↗ T.03 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Consolidated net earnings before attribution

Currency changes

Cash flow hedge

Release to the income statement, net after tax

Market value for cashflow hedges, net after tax

Items expected to be reclassified to the income statement in the future

Remeasurements of the net defined benefit liability, net after tax

Neutral effects financial assets through other comprehensive income (FVTOCI),

net after tax

Items not expected to be reclassified to the income statement in the future

Other result

Comprehensive income

attributable to: Non-controlling interests

Equity holders of the parent

In contrast to the previous year, the tax amounts included in the other result are listed in chapter 8.

2020

2019

€ million

123.1

309.0

-138.9

1.9

8.1

-87.7

-218.5

-3.3

-14.7

-18.0

-236.5

-113.4

40.4

-153.8

34.2

-77.1

-41.0

-4.1

3.4

-0.7

-41.8

267.3

46.9

220.4

167

Annual Report 2020 ↗ Consolidated Financial Statements

↗ T.04 CONSOLIDATED STATEMENT OF CASH FLOWS

Operating activities

Earnings before taxes (EBT)

Adjustments for:

2020

2019

Notes

€ million

162.3

417.6

Depreciation and impairment

9, 10, 11

Non-realized currency gains/losses, net

Financial income

Financial expenses

Changes from the sale of fixed assets

Changes to pension provisions

Other non-cash effected expenses/income

Gross cash flow

Changes in receivables and other current assets

5, 6, 7

293.8

26.3

-35.4

78.4

2.4

-1.0

-4.0

522.8

-50.0

246.4

1.9

-15.3

48.4

2.1

-1.2

5.0

704.8

-69.8

Changes in inventories

Changes in trade payables and other current liabilities

Net cash from operational business activities

Dividends received

Income taxes paid

Net cash from operating activities

-109.7

-188.8

147.7

510.8

0.0

214.1

660.3

0.3

-89.3

-111.8

421.5

548.8

168

Investing activities

Payment for acquisitions

Annual Report 2020 ↗ Consolidated Financial Statements

2020

2019

Notes

€ million

0.0

-1.2

Purchase of property and equipment

9, 11

-151.0

-218.4

Proceeds from sale of property and equipment

Payment for other assets

Interest received

Net cash used in investing activities

Financing activities

Repayment of lease liabilities

Repayment of current financial liabilities

Raising of current financial liabilities

Repayment of non-current financial liabilities

Dividend payments to equity holders of the parent

Dividend payments to non-controlling interests

Interest paid

Net Cash used in financing activities

17, 29

Exchange rate-related changes in cash and cash equivalents

Change in cash and cash equivalents

Cash and cash equivalents at beginning of the financial year

Cash and cash equivalents at end of the financial year

3, 26

1.6

-4.5

8.4

2.3

-6.0

4.5

-145.5

-218.7

-135.0

-140.8

0.0

-10.4

112.5

-18.3

0.0

-45.6

-43.0

0.0

-7.1

-52.3

-18.6

-43.6

-129.2

-272.9

-8.9

137.8

518.1

655.9

-2.8

54.3

463.7

518.1

169

Annual Report 2020 ↗ Consolidated Financial Statements

↗ T.05 STATEMENT OF CHANGES IN EQUITY (€ million)

Subscribed
capital

Capital
reserve

Other reserves

Revenue
reserves incl.
Retained
Earnings

Difference
from currency
conversion

Cash flow
hedges

Treasury
stock

Equity
before non-
controlling
interests

Non-
controlling
interests

12/31/2018

38.6

193.6

1,691.5

-225.6

34.1

-28.9

1,703.3

Consolidated net earnings of the year

Net income directly recognized in equity

Total comprehensive income

Dividends paid to equity holders of the parent
company / non-controlling interests

Decrease of capital of non-controlling interests

262.4

-0.7

261.7

-52.3

1.5

-42.8

262.4

-42.0

220.4

-52.3

Increase of capital from the company's own funds

112.2

-112.2

Utilization / Issue of treasury stock

1.6

0.7

2.3

18.9

46.6

0.3

46.9

-18.6

-0.5

TOTAL
equity

1,722.2

309.0

-41.8

267.3

-70.9

-0.5

2.3

12/31/2019

150.8

83.0

1,900.9

-224.2

-8.8

-28.1

1,873.6

46.7

1,920.3

170

Annual Report 2020 ↗ Consolidated Financial Statements

Subscribed
capital

Capital
reserve

Other reserves

Revenue
reserves incl.
Retained
Earnings

Difference
from currency
conversion

Cash flow
hedges

Treasury
stock

Equity
before non-
controlling
interests

Non-
controlling
interests

12/31/2019

150.8

83.0

1,900.9

-224.2

-8.8

-28.1

1,873.6

Consolidated net earnings of the year

Net income directly recognized in equity

Total comprehensive income

Dividends paid to equity holders of the parent
company / non-controlling interests

78.9

-18.0

-135.9

60.9

-135.9

-78.8

Utilization / Issue of treasury stock

1.8

0.8

78.9

-232.7

-153.8

0.0

2.5

46.7

44.2

-3.9

40.4

-45.6

TOTAL
equity

1,920.3

123.1

-236.5

-113.4

-45.6

2.5

12/31/2020

150.8

84.8

1,961.8

-360.0

-87.6

-27.4

1,722.4

41.5

1,763.9

171

Annual Report 2020 ↗ Consolidated Financial Statements

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

1. GENERAL

Under the PUMA and Cobra Golf brand names, 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 (HGB). The IASB standards and interpretations, as they are to be
applied in the EU, which are mandatory for financial years as of January 1, 2020, have been applied.

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.06 NEW AND AMENDED STANDARDS AND INTERPRETATIONS

Standard

Title

First-time adoption in the
current financial year

Amendments to IFRS 16

COVID-19 related Rent Concessions

Amendments to Conceptual Framework

Updated Conceptual Framework

Amendments to IAS 1 and IAS 8

Definition of Material

Amendments to IFRS 3

Definition of a Business

Amendments to IFRS 9, IAS 39, IFRS 7

Interest Rate Benchmark Reform (Phase 1)

172

Annual Report 2020 ↗ Consolidated Financial Statements

The standards and interpretations used for the first time as of January 1, 2020 had the following effects on
the consolidated financial statements:

AMENDMENTS TO IFRS 16 COVID-19-RELATED RENT CONCESSIONS

The amendments to IFRS 16 in respect of COVID-19-related rent concessions enable lessees to make use
of a practical recognition exemption. This means that PUMA, as a lessee, may waive the evaluation of
whether COVID-19-related rent concessions – e.g. a deferral of or exemption from rent/lease payments for
a specific period of time – constitute lease modifications as defined in IFRS 16. PUMA has decided to make
use of this elective right for all rent concessions that fall within the scope of this measure and to apply the
recognition exemption retroactively from January 1, 2020.

This practical recognition exemption applies only to rent concessions that are a direct consequence of the
COVID-19 pandemic and that meet the following requirements cumulatively:

(a) The change to the lease payments may only result in a change to the consideration that is
substantively equal to or less than the consideration before the rent concessions were granted.
Accordingly, a (net) increase to the consideration would not fall within the scope of the practical
recognition exemption.

b) The provision may only be exercised for payments that would have been due on or before June 30,
2021 pursuant to the original contractual agreement.

c) The changes must not be accompanied by any additional material changes to the terms and
conditions of the contract. For example, a three-month suspension of lease payments before June 30,
2021, combined with a three-month lease extension at the end of the agreement term under practically
the same conditions, does not constitute a material change to the contractual terms or conditions.

Where the above conditions are met, PUMA may represent the rent concessions on the balance sheet as if
they were variable lease payments and recognize them in the income statement in the period in which the
rent concessions were granted. In the case of final exempted lease payments, it must be checked whether
the lease liability is to be written off in accordance with the provisions of IFRS 9 “Financial Instruments.”
This simplifies the recognition of rent concessions on the balance sheet, as it is no longer necessary to
check whether the conditions for a contractual modification apply and any changes must not be recognized
as a contractual modification in the balance sheet.

As a result of this practical recognition exemption, in the financial year 2020 PUMA recognized
€13.7 million in rent concessions as variable lease payments in the income statement. This also led to a
reversal of lease liabilities in almost the same amount. Furthermore, lease payments were deferred and,
for some contracts, the underlying lease term was extended by a period of up to three months. In these
cases, no adjustment was made to the amount of lease liabilities.

The information regarding leases in financial year 2020 is presented in chapter 10.

173

Annual Report 2020 ↗ Consolidated Financial Statements

CHANGES IN OTHER STANDARDS AND INTERPRETATIONS

The amendments to the other standards and interpretations described below, which were to be initially
adopted as of January 1, 2020, did not affect the PUMA consolidated financial statements.

The amendments concern the revision of the IFRS Conceptual Framework, which includes revised
definitions of assets and liabilities, along with new guidelines on measurement and write-off, reporting and
disclosure. Alongside the revised Conceptual Framework, amendments to references to the conceptual
framework in some standards were also issued.

Changes to IAS 1 and IAS 8 (Definition of Material) further clarify the definition of “material” and align the
various definitions used in the Conceptual Framework and in the standards themselves.

The narrowly defined amendments to IFRS 3 (Definition of a Business) aim to clarify whether an entity has
acquired a business or a group of assets. The amendments are applicable to all business combinations and
asset acquisitions for which the acquisition date is on or after January 1, 2020.

The interest rate benchmark reform (amendments to IFRS 9, IAS 39 and IFRS 7) concerns specific
requirements for the accounting of hedge relationships in interest rate hedge deals. As PUMA does not use
interest rate hedging instruments, this amendment has no effect on the consolidated financial statements.

174

Annual Report 2020 ↗ Consolidated Financial Statements

NEW, BUT NOT YET MANDATORY STANDARDS AND INTERPRETATIONS

The following standards and interpretations have been released but will only become effective in later
reporting periods and are not applied earlier by the Group.

Title

Date of adoption *

Planned adoption

↗ T.07

Standard

Endorsed

Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and
IFRS 16

Amendments to IFRS 4

Endorsement pending

Amendments to IFRS 3

Amendments to IAS 37

Amendments to IAS 16

Interest Rate Benchmark
Reform (Phase 2)

Extension of the temporary
exemption from the
Application of IFRS 9 in
IFRS 4

References to the
Conceptual Framework

Onerous contracts: Contract
performance costs

Property, plant and
equipment: Proceeds before
intended use

1/1/2021

1/1/2022

Annual Improvements
2018 – 2020

Improvements to IFRS 1,
IFRS 9, IFRS 16 and IAS 41

IFRS 17 (including
amendment IFRS 17)

Insurance contracts

1/1/2023

Amendments to IAS 1

Classification of liabilities as
current or non-current

1/1/2023

Amendments to IFRS 10
and IAS 28

Sale or contribution of
assets

postponed indefinitely

* Adjusted by EU endorsement, if applicable

PUMA does not expect any significant effects on the consolidated financial statements from these
amendments.

175

Annual Report 2020 ↗ Consolidated Financial Statements

2. SIGNIFICANT CONSOLIDATION, ACCOUNTING AND VALUATION PRINCIPLES

CONSOLIDATION PRINCIPLES

The consolidated financial statements were prepared as of December 31, 2020, 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 recognition of business combinations is based on the acquisition method. The assets, debts and
contingent liabilities that can be identified as part of a business combination are generally stated at their
fair value as of the acquisition date, regardless of the size of 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 consideration transferred that exceeds the Group’s share in the net assets stated at fair
value is reported as goodwill. If the consideration transferred is 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 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.

176

Annual Report 2020 ↗ 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 generally accounted for in the Group using the equity method. As of December
31, 2020, the Group does not comprise any associated companies.

The changes in the number of Group companies (including the parent company PUMA SE ) in the financial
year 2020 were as follows:

↗ T.08

As of

Formation of companies

Disposal of companies

As of

12/31/2019

102

12/31/2020

102

The addition to the group of consolidated companies relates to the formation of stichd NA, Inc., USA.

The disposal in the group of consolidated companies relates to the liquidation of PUMA Racing Ltd., Malta.

The changes in the group of consolidated companies did not have a significant effect on the net assets,
financial position and results of operations.

177

Annual Report 2020 ↗ Consolidated Financial Statements

The Group companies are allocated to regions as follows:

↗ T.09

as of Dec. 31, 2020

No.

Companies/Legal Entities

Country

City

Shareholder

Share in Capital

- parent company -

PUMA SE

EMEA

Austria Puma Dassler Gesellschaft m.b.H.

stichd austria gmbh

Puma Czech Republic s.r.o.

PUMA DENMARK A/S

PUMA Estonia OÜ

PUMA Finland Oy

PUMA FRANCE SAS

stichd france SAS

PUMA International Trading GmbH

PUMA Europe GmbH

PUMA Sprint GmbH

PUMA Mostro GmbH

stichd germany gmbh

PUMA Logistik-Verwaltungs GmbH

PUMA UNITED KINGDOM LTD

PUMA PREMIER LTD

STICHD UK LTD

10.

11.

12.

13.

14.

15.

16.

17.

18.

Germany

Herzogenaurach

Austria

Salzburg

Czech Republic

Prague

Denmark

Skanderborg

direct

indirect

Tallinn

Helsinki

Illkirch-Graffenstaden

indirect

Boulogne Billancourt

indirect

Herzogenaurach

direct

Herzogenaurach

indirect

Düsseldorf

indirect

Herzogenaurach

indirect

Estonia

Finland

France

Germany

Great Britain

London

Great Britain

Mansfield

indirect

100%

178

as of Dec. 31, 2020

Companies/Legal Entities

STICHD SPORTMERCHANDISING UK LTD

Country

Great Britain

City

London

GENESIS GROUP INTERNATIONAL LIMITED

Great Britain

Manchester

Sport Equipment Hellas S. A. of Footwear, Apparel and Sportswear u.Li.

Greece

Annual Report 2020 ↗ Consolidated Financial Statements

Shareholder

Share in Capital

No.

19.

20.

21.

22.

23.

24.

25.

26.

27.

28.

29.

30.

31.

32.

33.

34.

35.

36.

37.

38.

39.

40.

41.

PUMA ITALIA S.R.L.

STICHD ITALY SRL

Puma Sport Israel Ltd.

PUMA MALTA LIMITED

Puma Benelux B.V.

PUMA Teamwear Benelux B.V.

PUMA International Sports Marketing B.V.

stichd group B.V.

stichd international B.V.

Italy

Israel

Malta

Netherlands

Athens

Assago

Hertzeliya

St.Julians

Leusden

indirect

direct

indirect

direct

indirect

direct

Netherlands

's-Hertogenbosch

direct

Netherlands

's-Hertogenbosch

indirect

stichd sportmerchandising B.V.

Netherlands

's-Hertogenbosch

indirect

stichd B.V.

stichd logistics B.V.

stichd licensing B.V.

PUMA NORWAY AS

PUMA POLSKA sp. z o.o.

PUMA SPORTS ROMANIA SRL

PUMA-RUS o.o.o.

PUMA Slovakia s.r.o. v likvidácii

PUMA SPORTS DISTRIBUTORS (PTY) LTD

PUMA SPORTS S A (PTY) LTD

Netherlands

's-Hertogenbosch

indirect

Netherlands

's-Hertogenbosch

indirect

Netherlands

's-Hertogenbosch

indirect

Norway

Poland

Romania

Russia

Slovakia

Fornebu

Warsaw

Voluntari

Moscow

Bratislava

South Africa

Cape Town

South Africa

Cape Town

indirect

subsidiaries which are assigned to be economically 100% PUMA Group

100%

100%*

100%

179

as of Dec. 31, 2020

Companies/Legal Entities

PUMA IBERIA SLU

STICHDIBERIA S.L.

Nrotert AB

PUMA Nordic AB

Nrotert Sweden AB

stichd nordic AB

MOUNT PUMA AG

Puma Retail AG

stichd switzerland ag

PUMA Spor Giyim Sanayi ve Ticaret A.S.

PUMA UKRAINE LIMITED LIABILITY COMPANY

PUMA Middle East FZ-LLC

PUMA UAE (L.L.C)

Americas

No.

42.

43.

44.

45.

46.

47.

48.

49.

50.

51.

52.

53.

54.

55.

56.

57.

58.

59.

60.

61.

PUMA Sports Argentina S.A. (former Unisol S.A.)

Argentina

Buenos Aires

PUMA Sports Ltda.

PUMA Canada, Inc.

PUMA United Canada ULC

PUMA CHILE SpA

PUMA SERVICIOS SpA

PUMA México Sport, S.A. de C.V.

Brazil

Canada

Chile

Mexico

Sao Paulo

Toronto

Vancouver

Santiago

Mexico City

subsidiaries which are assigned to be economically 100% PUMA Group

Country

Spain

Sweden

Switzerland

City

Madrid

Helsingborg

Oensingen

Switzerland

Egerkingen

Turkey

Ukraine

Istanbul

Kiew

United Arab Emirates Dubai

Annual Report 2020 ↗ Consolidated Financial Statements

Shareholder

Share in Capital

Cornella de Llobregat

indirect

direct

indirect

direct

indirect

direct

indirect

direct

100%

100%*

100%

51%

100%

180

as of Dec. 31, 2020

No.

62.

63.

64.

65.

66.

67.

68.

69.

70.

71.

72.

73.

74.

75.

76.

77.

78.

79.

80.

81.

82.

83.

Companies/Legal Entities

Servicios Profesionales RDS, S.A. de C.V.

Importaciones RDS, S.A. de C.V.

GLOBAL LICENSE STICHD GROUP MEXICO S.A. de C.V.

Importationes Brand Plus Licensing S.A. de C.V.

Distribuidora Deportiva PUMA S.A.C.

Distribuidora Deportiva PUMA Tacna S.A.C.

PUMA Retail Peru S.A.C.

PUMA Sports LA S.A.

PUMA Suede Holding, Inc.

PUMA North America, Inc.

Cobra Golf Incorporated

PUMA United Canada Holding, Inc.

PUMA United North America LLC

Janed Canada, LLC

stichd NA, Inc.

Asia/ Pacific

PUMA Australia Pty. Ltd.

White Diamond Australia Pty. Ltd.

White Diamond Properties Pty. Ltd.

PUMA China Ltd. ((cid:24)(cid:7704)(cid:42)(cid:8)(cid:32)(cid:43)(cid:18)(cid:6726)(cid:28)(cid:39)(cid:13)(cid:16))

stichd china ltd. ((cid:26)(cid:31)(cid:38)(cid:35)(cid:6726)(cid:27)(cid:42)(cid:8)(cid:32)(cid:43)(cid:28)(cid:39)(cid:13)(cid:16))

Guangzhou World Cat Information Consulting Services Company Ltd.
((cid:22)(cid:21)(cid:20)(cid:24)(cid:12)(cid:25)(cid:17)(cid:6595)(cid:29)(cid:1747)(cid:28)(cid:39)(cid:13)(cid:16))

World Cat Ltd. ((cid:20)(cid:24)(cid:28)(cid:39)(cid:13)(cid:16))

Country

Mexico

Peru

Uruguay

USA

Australia

China

City

Mexico City

Lima

Tacna

Lima

Montevideo

Wilmington

Dover

Wilmington

Melbourne

Shanghai

Guangzhou

Hongkong

Annual Report 2020 ↗ Consolidated Financial Statements

Shareholder

Share in Capital

indirect

direct

indirect

direct

indirect

direct

100%

51%

100%

181

Companies/Legal Entities

Development Services Ltd.

PUMA International Trading Services Ltd.

PUMA ASIA PACIFIC LTD ((cid:24)(cid:41)(cid:9)(cid:19)(cid:14)(cid:28)(cid:39)(cid:13)(cid:16))

PUMA Hong Kong Ltd. ((cid:24)(cid:41)(cid:40)(cid:33)(cid:28)(cid:39)(cid:13)(cid:16))

stichd Limited

PUMA Sports India Private Ltd.

PUMA India Corporate Services Private Ltd.

World Cat Sourcing India Private Ltd.

PT. PUMA Cat Indonesia

PUMA Japan K.K. ((cid:3)(cid:7)(cid:4) (cid:1)(cid:5)(cid:2)(cid:6)(cid:30)(cid:23)(cid:11)(cid:36))

PUMA Korea Ltd. (푸마코리아 유한회사)

Stichd Korea Ltd

PUMA Sports Goods Sdn. Bhd.

PUMA New Zealand Ltd.

PUMANILA IT SERVICES INC.

PUMA Sports SEA Trading Pte. Ltd.

PUMA SEA Holding Pte. Ltd.

as of Dec. 31, 2020

No.

84.

85.

86.

87.

88.

89.

90.

91.

92.

93.

94.

95.

96.

97.

98.

99.

100.

101.

102.

Annual Report 2020 ↗ Consolidated Financial Statements

Country

City

Shareholder

Share in Capital

China

India

Indonesia

Japan

Korea (South)

Hongkong

Bengaluru

Jakarta

Tokyo

Seoul

Korea (South)

Incheon

Malaysia

Kuala Lumpur

New Zealand

Auckland

Philippines

Manila

Singapore

direct

indirect

direct

indirect

direct

indirect

100%

PUMA Taiwan Sports Ltd. ((cid:15)(cid:34)(cid:24)(cid:41)(cid:37)(cid:10)(cid:28)(cid:39)(cid:13)(cid:16)(cid:43)

China (Taiwan)

Taipei

World Cat Vietnam Sourcing & Development Services Company Limited
(CÔNG TY TNHH DỊCH VỤ PHÁT TRIỂN & NGUỒN CUNG ỨNG WORLD CAT
VIỆT NAM)

Vietnam

Ho Chi Minh City

indirect

100%

PUMA Mostro GmbH, PUMA Sprint GmbH, PUMA International Trading GmbH, PUMA Europe GmbH and PUMA Logistik-Verwaltungs GmbH have made use of the
exemption provision under Section 264 (3) of the German Commercial Code (HGB).

182

Annual Report 2020 ↗ Consolidated Financial Statements

CURRENCY CONVERSION

In general, 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.10

Currency

USD

CNY

JPY

GBP

2020

2019

Reporting date
exchange rate

Average exchange rate

Reporting date
exchange rate

Average exchange rate

1.2271

8.0225

126.4900

0.8990

1.1422

7.8747

121.8458

0.8897

1.1234

7.8205

121.9400

0.8508

1.1195

7.7355

122.0058

0.8778

The currency area Argentina has been in a hyperinflationary environment since 2018. The effects on the
consolidated financial statements were analyzed in accordance with IAS 29 and IAS 21.42. The application of
the aforementioned standards would have resulted in an increase in assets as of December 31, 2020 of
€14.7 million (mainly property, plant and equipment, intangible assets and inventories) and an adjustment
of equity of €14.7 million. Furthermore, the operating result (EBIT) would have decreased by €4.4 million.
The effects were considered insignificant and did not lead to an adjustment in the context of the group
accounting.

183

Annual Report 2020 ↗ Consolidated Financial Statements

ACCOUNTING AND VALUATION PRINCIPLES

FINANCIAL INSTRUMENTS

Financial instruments are classified and recognized in accordance with IFRS 9. 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 of whether the contractual cash flows of the financial instruments
represent “exclusively payments of principal and interest” toward the outstanding principal amount.

For long-term investments (equity instruments), IFRS 9 under certain conditions allows a measurement at
fair value through other comprehensive income (FVOCI). If these interests, however, are disposed of or
written off, the gains and losses from these interests which were not realized up to this point are
reclassified to retained earnings in accordance with IFRS 9.

DERIVATIVE FINANCIAL INSTRUMENTS/HEDGE ACCOUNTING

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.

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 transaction (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
measurement 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 transaction.

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 short-term and long-term financial assets
respectively liabilities.

184

Annual Report 2020 ↗ Consolidated Financial Statements

LEASES

PUMA has concluded leases exclusively as lessee.

The leases are respectively identified on an individual contract level. PUMA recognizes for all leases a
right-of-use asset and a respective lease liability, with the exception of short-term leases (defined as
leases with a term of no more than 12 months) and low-value lease agreements (with an acquisition value
of the assets of less than €5,000). In the case of a short-term lease or low-value lease, the Group
depreciates the lease payments on a straight-line basis over the term of the lease agreement as other
operating expense.

In addition, right-of-use assets are not recognized for intangible assets. PUMA has made use of the elective
right and decided not to apply IFRS 16 with regard to leases for intangible assets.

The lease liability at initial recognition is measured at the present value of the not yet paid lease payments
at the beginning of the lease agreement. The present value is calculated using the incremental borrowing
rate, as the interest rate underlying the lease contract is usually not known.

The following lease payments are included in the measurement of the lease liability:

• Fixed lease payments (including in-substance fixed payments), less any incentive payments to be

received;

• Variable lease payments based on an index or rate, initially measured based on the index or rate at the
start of the lease agreement; as a result, future adjustments after changes in the index or interest rate
remain unrecognized;

• Exercise price of purchase options, if PUMA is sufficiently certain that it will exercise them;
• Expected payments from residual value guarantees; and
• Penalties for the early termination of lease agreements, if PUMA is sufficiently certain that it will

exercise this termination option and if this was taken respectively into account when determining the
term of the lease agreement.

A number of lease agreements, particularly for real estate properties, contain extension and termination
options. When determining agreement terms, all facts and circumstances are taken into account that offer
an economic incentive to exercise the extension option or not exercise the termination option. The changes
in the term of a lease due to the exercise or non-exercise of such options are only taken into account for the
agreement term if they are sufficiently certain.

The lease liability is recognized as a separate line item on the consolidated balance sheet.

As described in chapter 1 above, from January 1, 2020 PUMA will apply the practical recognition exemption
for COVID-19-related rent concessions to all rent concessions falling within the scope of this measure.
Where the conditions are met, the rent concessions will be represented on the balance sheet as if they
were variable lease payments. Consequently, the rent concessions will be recognized in the income
statement in the period in which they were granted.

The subsequent measurement of the lease liability is done by increasing the carrying amount by adding the
accrued interest of the lease liability (using the effective interest method) and by reducing the carrying
amount of the lease liability by the lease payments made. Where COVID-19-related rent concessions involve
exemption from lease payments, the carrying amount of the lease liability is reduced by the exempted lease
payments.

If the term of the lease has changed and this is not a COVID-19-related rent concession, or if a material
event has led to a change in the assessment relating to the exercise of a purchase option, PUMA will
remeasure the lease liability by discounting the adjusted lease payments using an updated interest rate and
will adjust the corresponding right-of-use asset accordingly.

185

Annual Report 2020 ↗ Consolidated Financial Statements

If lease payments have changed due to index or interest rate changes or due to a change in the expected
payments to be made due to a residual value guarantee, PUMA will remeasure the lease liability by
discounting the adjusted lease payments using an unchanged discount rate. The corresponding right-of-use
asset is adjusted accordingly.

If a lease is changed and this is not a COVID-19-related rent concession, and the change in the lease is not
recognized as a separate lease, PUMA will remeasure the lease liability based on the lease term for the
new lease. As part of this, the changed lease payments are discounted using the updated interest rate at
the time the change becomes effective.

The right-of-use assets comprise the respective lease liability as part of initial measurement. Lease
installments that are paid before or at the beginning of the lease must be added. Lease incentives received
from the lessor must be deducted and initial direct costs must be included. If dismantling obligations exist
with regard to the leased assets, they are included in the measurement of the right-of-use assets. The
subsequent measurement of the right-of-use assets is at acquisition cost less accumulated depreciation
and impairment losses.

The right-of-use assets are generally depreciated over the term of the lease. If the useful life of the asset
underlying the lease is shorter, this limits the depreciation period accordingly. Depreciation starts with the
commencement of the lease.

The right-of-use assets are recognized as a separate line item in the consolidated balance sheet.

The right-of-use assets are subject to impairment of assets in accordance with IAS 36. As a general rule,
the right-of-use assets are tested for impairment (impairment test) if there is any indication that the value
of the asset could be impaired. The right-of-use assets, in particular in connection with the Group’s own
retail stores, are subjected to an impairment test if there are indicators or changes in planning
assumptions that suggest that the carrying amount of the assets may not be recoverable. For this purpose,
a so-called “triggering event test” is carried out after the annual budget planning has been prepared or on
an occasional basis.

The value in use is determined for each retail store using the discounted cash flow method. The value in use
is determined on the basis of the planned cash flows for the retail stores according to the budget, which is
prepared on a bottom-up basis and approved by management. The forecast period is derived from the
expected useful lives of the respective retail store and is reviewed annually. With reference to the bottom-
up budget, country- and CGU-specific sales and cost developments are used as a basis for the remaining
useful life. The growth rates used are based on the expected nominal retail growth in the respective market
for the respective planning year. All retail stores are experiencing growth rates in a single-digit to low
double-digit percentage range. Cash flows were discounted at a weighted average cost of capital rate of
between 3.7% and 18.9% when determining the value in use of retail stores. This was based on a risk-free
interest rate on equivalent term structures of 0.4% and a market risk premium of 7.8%. The value in use is
compared with the carrying amount of the assets allocated to the retail store (in particular, right-of-use
assets from the lease, tenant fixtures, inventories and proportionate corporate assets allocated to the
central areas). If the carrying amount of the assets of the retail stores exceeds the determined value in use,
the fair value of the cash-generating unit is also calculated. If an impairment occurs, the fair value of the
right-of-use asset is determined separately, taking into account materiality aspects, using internal or
external data sources.

Where there are indications that stores that have previously been written down have achieved a turnaround
and are again recoverable, an additional triggering event test is carried out and, where applicable, a
reversal of impairment loss is recorded to the maximum amount of the amortized costs.

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Variable lease payments that are not dependent on an index or interest rate are not included in the
valuation of the lease liabilities. These payments are recognized in the income statement as other expenses
as soon as PUMA has received the underlying benefit. This applies primarily to turnover-based rents for
retail stores.

As part of the practical expedient, IFRS 16 permits omitting to separate between non-leasing components
and leasing components. With regard to land and buildings, PUMA generally does not apply the practical
expedient so that the right-of-use assets relating to land and buildings only contain leasing components.
With regard to other right-of-use assets (comprising technical equipment & machines and motor vehicles),
the practical expedient is generally applied, as a result of which the leasing components and non-leasing
components are both recognized.

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 fixed-term deposits 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 are measured at amortized cost. They are subject to the impairment
requirements in accordance with IFRS 9 “Financial Instruments.” PUMA monitors the credit risk of these
financial instruments taking into account the economic situation, external credit rating and/or 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 of the
counterparty, which signals a low probability of default.

INVENTORIES

Inventories are measured 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, in the form of a provision for risks. The transaction 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 on behalf of third parties.

When determining the provision for risks for trade receivables, PUMA uniformly applies the simplified
method in order to determine the expected credit losses over the remaining lifetime of the trade
receivables (called “lifetime expected credit losses”) in accordance with the provisions of IFRS 9 “Financial
Instruments.” For this, trade receivables are classified by geographic region to suitable groups with shared
credit risk characteristics. The expected credit losses are calculated using a matrix that presents the age
structure of the receivables and depicts a likelihood of loss for the individual maturity bands of the
receivables 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 receivables of a certain customer, a detailed analysis of this
customer’s specific credit risk is conducted and an individual provision for risks is established 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 provision for risks.

187

Annual Report 2020 ↗ Consolidated Financial Statements

OTHER FINANCIAL ASSETS

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 generally held under a business model that provides for
“holding” the asset until maturity, in order to collect the contractual cash flows. The subsequent
measurement of the other financial assets is therefore always carried out at amortized cost, taking into
account the respective impairment losses. The business model “trading” is not used.

The non-current assets contain loans and other assets. Non-interest-bearing non-current assets are
discounted to present 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 the Other Comprehensive Income, taking into account deferred taxes. The gain or loss on disposal of
non-current investments is transferred to retained earnings.

The category “measured at fair value through profit or loss” (FVPL) is not used with regard to non-current
investments.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are measured 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.

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.

GOODWILL

Goodwill resulting from a business combination is calculated based on the difference between the
transferred consideration and the Group’s share in the fair value of the acquired assets and liabilities.

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 group of cash-generating units (usually the smallest company level at
which goodwill is monitored) is performed once a year and 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
11 for further details, in particular regarding the assumptions used for the calculation.

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Annual Report 2020 ↗ Consolidated Financial Statements

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 amortization. The useful life of intangible
assets is between three and ten years. Depreciation is done 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 amortized according to schedule but are subjected to
an annual impairment test. Property, plant and equipment, right-of-use assets, 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 level of a group of cash-
generating units. 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 group of cash-generating units is written down initially and, in
a second step, the remaining amount is distributed proportionately over the remaining assets within the
application scope of IAS 36. If the reason for the recorded impairment no longer applies, a reversal of
impairment loss is recorded to the maximum amount of the amortized costs. 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. As part of the fair value
determination less cost to sell, no special synergies of cash-generating units are taken into account, and
corporate planning data is adjusted to the assumptions of market participants, if required. Moreover, there
is a difference between the fair value less costs to sell and the value in use because the costs to sell are
also taken into account.

Trademarks with an indefinite useful life are subjected to an impairment test based on the relief-from-
royalty method during the financial year or when the occasion arises. Should indications of a value
impairment of a self-used trademark arise, the recoverability of the trademark is not only measured
individually using the relief-from-royalty method, but the recoverable amount of the group of cash-
generating units to which the trademark is to be allocated is also determined.

See chapter 11 for further details, in particular regarding the assumptions used for the calculation.

189

Annual Report 2020 ↗ Consolidated Financial Statements

FINANCIAL DEBT, OTHER FINANCIAL LIABILITIES AND OTHER LIABILITIES

In general, these items are recognized at their acquisition cost, taking into account transaction costs and
subsequently recognized 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.

The category “measured at fair value through profit or loss” (FVPL) is not used with regard to financial
liabilities.

Current financial liabilities also include those long-term loans 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 the income statement. Past service costs are recorded as an
expense if changes are made to the plan.

Details regarding the assumed life expectancy and the mortality tables used are shown in chapter 15.

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 estimate and are not offset by income. Non-current provisions are discounted.

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.

190

Annual Report 2020 ↗ Consolidated Financial Statements

TREASURY STOCK

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
requirements.

MANAGEMENT INCENTIVE PROGRAMS

PUMA uses cash-settled share-based payments and key performance indicator-based long-term incentive
programs.

For cash-settled share-based payments, 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 operating result (EBIT), cash flow and gross profit margin are determined for key figure-based
compensation processes and recognized in the income statement as Other Provisions with their respective
degree of target achievement.

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 right of disposal over the 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 sales revenue is recorded at the date on which the right
of disposal over the products is transferred to the customer, 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 over the products is transferred to the end customer, 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 as soon as the customer purchases the products.

Under certain conditions and according to the contractual stipulations, the customer has the option to
exchange products or return them for a credit. The amount of the expected returns is estimated on the
basis of past 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.

191

Annual Report 2020 ↗ Consolidated Financial Statements

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 invoices to be
submitted by the licensees. 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. In general,
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.”

GOVERNMENT GRANTS

In the financial year 2020, PUMA received government grants related to income at a global level for the first
time as a result of the COVID-19 pandemic; these were then deducted from the corresponding expenses in
the income statement. Grants are received via country-specific, one-off emergency aid schemes relating to
the global COVID-19 pandemic and via country-specific short-time work programs, provided that they meet
the requirements of IAS 20 and other comparable measures.

Pursuant to IAS 20.7, government grants related to income are recognized when there is reasonable
assurance that the entity will comply with the conditions attaching to them and the grants will be received.
Grants related to income are deducted from the corresponding expenses in the income statement (net
presentation).

FINANCIAL RESULT

The financial result includes interest income from financial investments and interest expenses from loans,
along with interest income and expenses in connection with derivative financial instruments. Financial
results also include interest expenses from lease liabilities, discounted, non-current liabilities and from
pension provisions that are associated with business combinations or arise from the measurement 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
where the individual Group companies conduct their operations.

192

Annual Report 2020 ↗ Consolidated Financial Statements

DEFERRED TAXES

Deferred taxes resulting from temporary valuation differences between the IFRS and tax balance sheets of
individual Group companies and from consolidation procedures, which are levied by the same taxation
authority and can be netted, are charged to each taxable entity and recognized either as deferred tax assets
or deferred tax liabilities.

With regard to the leases that were capitalized, tax deduction potential is allocated to the respective right-
of-use asset. If temporary differences arise during subsequent valuation from a netting perspective of
right-of-use asset and lease liability, deferred tax items will be created, provided the requirements under
IAS 12 are met.

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 recognized 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 measurement and presentation of the recognized assets and liabilities, income and
expenses, as well as contingent liabilities. The assumptions and estimates are based on premises, 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 liabilities 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. PUMA applies scenarios that assume that the situation
created by the COVID-19 pandemic will not be long term. Accordingly, PUMA does not expect that the
impact on the consolidated financial statements will be significant or serious. Assumptions and estimates
are made in particular with regard to evaluating the control of companies with non-controlling interests,
the measurement of goodwill and brands, pension obligations, derivative financial instruments, leases and
taxes. The most significant forward-looking assumptions and sources of estimation and uncertainty as of
the reporting date concerning the above-mentioned items are discussed below.

Goodwill and Brands
A review of the impairment of goodwill is based on the calculation of the value in use as a leading valuation
concept. 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. As it is currently difficult to predict what the global consequences of the
COVID-19 pandemic will be in the short and medium term, these assumptions and estimates are generally
subject to increased uncertainty. However, it is assumed that COVID-19 vaccine will be made available and
that large parts of the population in the main PUMA markets will be immunized in 2021, and that
consequently, business activities for the financial year 2021 will largely normalize to the level seen before
the outbreak of the COVID-19 pandemic. Another key assumption concerns the determination of an
appropriate interest rate for discounting the cash flow to present value (discounted cash flow method). The

193

Annual Report 2020 ↗ Consolidated Financial Statements

“relief from royalty method” is used to value brands. See chapter 11 for further details, 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. The Group
determines at the end of each year 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 details, 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 using the most probable amount for the respective case.

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 expected dates of
occurrence and the 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. Due to the currently difficult to predict short- and medium-term
consequences of the global COVID-19 pandemic, these assumptions and estimates are generally subject to
increased uncertainty. 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 in the next 5 years. 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 24 for further
information.

Leases
The measurement of the lease liabilities is based on assumptions for the discount rates used, the lease
term and the identification of fixed lease payments. To determine the present value of future minimum
lease payments, PUMA uses country- and currency-specific interest rates on borrowings with compatible
terms. In addition to the basic lease period, the Group includes extension options in the determination of
the lease term if management is sufficiently certain that such an option will be exercised after taking into
account all facts and circumstances. The fixed lease payments also include firmly agreed upon minimum
amounts for agreements with a predominantly variable lease amount.

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Annual Report 2020 ↗ Consolidated Financial Statements

NOTES TO THE CONSOLIDATED BALANCE SHEET

3. CASH AND CASH EQUIVALENTS

As of December 31, 2020, the Group has €655.9 million (previous year: €518.1 million) in cash and cash
equivalents. The average effective interest rate of financial investments was 1.5% (previous year: 0.9%).
There are no restrictions on disposition.

INVENTORIES

Inventories are allocated to the following main groups:

↗ T.11 (€ million)

Raw materials, consumables and supplies

Finished goods and merchandise/inventory

Footwear

Apparel

Accessories/Other

Goods in transit

Inventory adjustments related to returns

Total

2020

15.4

324.7

273.9

128.3

351.7

43.9

2019

18.5

364.0

294.4

127.2

267.0

39.0

1,138.0

1,110.2

The table shows the carrying amounts of the inventories net of value adjustments. Of the value adjustments
in the amount of €115.7 million (previous year: €76.3 million), approx. 69.6% (previous year approx. 66.7%)
were recognized as an expense under cost of sales in the financial year 2020.

The amount of inventories recorded as an expense during the period mainly includes the cost of sales
shown in the consolidated income statement.

The right to return goods represents the merchandise value of the products where a return is expected.

195

5. TRADE RECEIVABLES

This item consists of:

↗ T.12 (€ million)

Trade receivables, gross

Less provision for risks

Trade receivables, net

Annual Report 2020 ↗ Consolidated Financial Statements

2020

2019

682.9

-61.9

621.0

648.5

-36.8

611.7

Due to an increase in sales in the third and fourth quarters of 2020, the gross carrying amounts of trade
receivables increased slightly. The negative effects caused by the COVID-19 pandemic led to an increased
probability of default on trade receivables as of December 31, 2020, resulting in an increase of the provision
for risks.

The change of the provision for risks for financial assets in the “trade receivables” class measured at
amortized cost relates to receivables in connection with sales revenues from contracts with customers and
has developed as follows:

↗ T.13 (€ million)

Status of provision for risks as of January 1

Changes in scope

Exchange rate differences

Additions

Utilization

Reversals

Status of provision for risks as of December 31

2020

36.8

0.0

-2.7

33.9

-3.1

-2.9

61.9

2019

37.7

0.0

0.1

4.9

-2.3

-3.6

36.8

196

Annual Report 2020 ↗ Consolidated Financial Statements

The age structure of the trade receivables is as follows:

↗ T.14 (€ million)

2020

Total

Not due

Gross carrying amount –
Trade receivables

Provision for risks

Net carrying amount –
Trade receivables

Expected loss rate

682.9

61.9

621.0

551.5

15.2

536.3

2.8%

0-30
days

56.7

4.1

52.6

7.3%

31-90
days

91-180
days

Over 180
days

15.9

2.6

13.3

11.7

2.8

47.1

37.2

8.9

9.9

16.4%

23.9%

78.9%

Receivables due for more than 90 days are allocated to Level 3 as “objectively impaired,” the remaining
receivables are allocated to Level 2.

↗ T.15 (€ million)

2019

Total

Not due

Gross carrying amount –
Trade receivables

Provision for risks

Net carrying amount –
Trade receivables

Expected loss rate

648.5

36.8

611.7

533.0

3.9

529.1

0.7%

0-30
days

54.9

2.1

52.8

3.8%

31-90
days

91-180
days

Over 180
days

23.4

3.5

19.9

9.4

3.1

6.3

27.8

24.2

3.6

14.9%

33.4%

86.9%

With respect to the net carrying amount of trade receivables, PUMA assumes that the debtors will satisfy
their payment obligations or that, in the event of a default, the net carrying amount will be covered by
existing credit insurance. There are no significant risk concentrations as the customer base is very broad
and there are no correlations.

197

Annual Report 2020 ↗ Consolidated Financial Statements

6. OTHER CURRENT FINANCIAL ASSETS

This item consists of:

↗ T.16 (€ million)

Fair value of derivative financial instruments

Other financial assets

Total

2020

23.6

29.3

52.9

2019

45.2

31.4

76.6

The amount shown is due within one year. The fair value corresponds to the carrying amount.

7. OTHER CURRENT ASSETS

This item consists of:

↗ T.17 (€ million)

Prepaid expense relating to the subsequent period

Other receivables

Total

2020

50.4

73.6

2019

63.1

67.4

124.1

130.5

The amount shown is due within one year. The fair value corresponds to the carrying amount.

Other receivables mainly include VAT receivables amounting to €38.9 million (previous year: €30.1 million).

198

8. DEFERRED TAXES

Deferred taxes relate to the items shown below:

↗ T.18 (€ million)

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

Annual Report 2020 ↗ Consolidated Financial Statements

2020

103.4

39.2

60.1

97.5

300.3

49.8

8.2

5.4

63.4

236.9

2019

89.5

39.6

48.7

79.7

257.5

61.2

7.9

3.7

72.7

184.8

Of the deferred tax assets €141.6 million (previous year: €117.1 million) are current, and of the deferred tax
liabilities €9.7 million (previous year: €8.9 million) are current.

As of December 31, 2020, tax losses carried forward amounted to a total of €571.7 million (previous year:
€515.0 million). This results in a deferred tax asset of €145.4 million (previous year: €141.4 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 €41.9 million (previous year: €52.0 million) were not
recognized; of these, €39.9 million (previous year: €51.3 million) cannot expire, but €11.3 million (previous
year: €13.6 million) will never be usable due to the absence of future expectations. The remaining
unrecognized deferred tax receivables of €2.1 million (previous year: €0.7 million) will expire within the
next six years.

In addition, no deferred taxes were recognized for deductible temporary differences amounting to
€6.3 million (previous year: €4.4 million) because their realization was not expected as of the balance sheet
date.

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.

199

Annual Report 2020 ↗ 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:

↗ T.19 (€ million)

Deferred tax assets

Deferred tax liabilities

Deferred tax assets, net

The changes in deferred tax assets (net) were as follows:

↗ T.20 (€ million)

Deferred tax assets, net as of January 1

Recognition in the income statement

Adjustment related to remeasurements of the net defined benefit liability,
recognized in other comprehensive income

Adjustment related to the market value of currency hedging contracts,
recognized in other comprehensive income

thereof released to profit and loss for the period

thereof fair value measurement of cash flow hedges

Exchange rate differences

Deferred tax assets, net as of December 31

9. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at their carrying amounts consist of:

↗ T.21 (€ million)

Land and buildings, including buildings on third-party land

Technical equipment and machinery

Other equipment, factory and office equipment

Assets under construction

Total

2020

2019

277.5

40.6

236.9

237.7

53.0

184.8

2020

184.8

56.7

2019

159.9

28.8

1.1

0.1

5.1

-11.0

236.9

-1,4

2.7

-6.3

184.8

2020

131.9

8.4

154.6

112.0

406.9

2019

118.0

9.8

175.3

91.7

394.8

200

Annual Report 2020 ↗ Consolidated Financial Statements

The carrying amount of property, plant and equipment is derived from the acquisition costs. Accumulated
depreciation of property, plant and equipment amounted to €411.4 million (previous year: €378.1 million).

The changes in property, plant and equipment in the financial year 2020 are shown in “Changes in Fixed
Assets” in Appendix 1 to the notes of the consolidated financial statements.

10. LEASES

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.

The carrying amounts for right-of-use assets recognized on the balance sheet relate to the following asset
classes:

↗ T.22 (€ million)

Land and buildings – Retail stores

Land and buildings – Warehouses & Offices

Others (Technical equipment & machines and motor vehicles)

Total

2020

2019

355.2

464.3

58.1

877.6

419.6

281.7

17.7

719.0

The changes in right-of-use assets in the financial year 2020 are shown in “Changes in Fixed Assets” in
Appendix 1 to the notes to the consolidated financial statements.

The following lease liabilities result:

↗ T.23 (€ million)

Current lease liabilities

Non-current lease liabilities

Total

2020

2019

156.5

775.2

931.7

144.8

600.5

745.3

201

Annual Report 2020 ↗ Consolidated Financial Statements

The amounts recognized in the income statement are as follows:

↗ T.24 (€ million)

Depreciation of right-of-use assets (incl. impairment losses)
(included in operating expenses)

Profit (-)/loss (+) from disposal/revaluation of right-of-use assets/liabilities
(included in operating expenses)

Interest expense (included in financial expenses)

Short-term leases (included in operating expenses)

Leases of low-value assets (included in operating expenses)

Variable lease payments (included in operating expenses)

Total

2020

2019

186.4

148.0

0.0

29.3

5.6

0.6

11.5

233.4

-0.3

29.7

6.9

0.7

28.3

213.4

Variable lease payments are incurred in connection with the Group’s own retail stores. These are based on
the sales revenue amount and are therefore dependent on the overall economic development.

As a result of the COVID-19 pandemic, PUMA was exempted from – by agreement with the lessors – rent
payments of €13.7 million (previous year: €0.0 million), which were recognized as variable lease payments
in the income statement.

Due to reduced earnings prospects, impairment expenses totaling €16.1 million were incurred in the
financial year 2020 (previous year: €0.0 million) relating to right-of-use assets in connection with the
Group’s own retail stores. There were no impairments to the other categories of right-of-use assets.

Total cash outflows from lease liabilities in 2020 amounted to €164.2 million (previous year: €170.5 million).

In 2020, PUMA entered into lease agreements that had not yet commenced by year-end. As a result, no
lease liabilities and corresponding right-of-use assets had been recognized as of December 31, 2020.
Future lease payments in connection with these agreements amount to €4.7 million (previous year:
€7.4 million) for the next year, €24.1 million for years two to five (previous year: €74.1 million) and
€9.0 million for the subsequent period (previous year: €176.7 million). The lease terms for these are up to
10 years.

202

Annual Report 2020 ↗ Consolidated Financial Statements

The maturity analysis of lease liabilities is as follows:

↗ T.25 (€ million)

Residual term of:

1 to 2 years

2 to 5 years

more than 5 years

Total (undiscounted)

Interests

Total

2020

2019

180.5

463.3

435.6

1,079.4

169.4

443.5

248.1

861.0

-147.7

-115.7

931.7

745.3

11. 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. The data from the three-year plan for the respective cash-generating unit or group of
cash-generating units was used as a basis for this. Planning on the level of the cash-generating units was
thereby derived from the PUMA Group’s three-year plan. Assuming that a COVID-19 vaccine is made
available and that large parts of the population in the main PUMA markets are immunized in 2021, Group-
level planning shows that business activities for the financial year 2021 will largely normalize to the level
seen before the outbreak of the COVID-19 pandemic. On this basis, and assuming that COVID-19 will not
have a long-term negative impact on the global economy, further sales growth and a further improved EBIT
margin are expected in subsequent financial years. Alongside the normalization of business activities to the
level seen before the outbreak of the COVID-19 pandemic, planned sales growth is based on the good future
growth prospects in the sporting goods industry and on the gaining of market shares by PUMA. This is to be
achieved, in particular, via the continued consistent implementation of the Forever Faster corporate
strategy and the increase in PUMA’s brand heat. The improvement in EBIT-margin in the planning period is
the result of a slight increase in gross profit margin due, for example, to a higher share of own retail sales
as a result of above-average growth of the e-commerce distribution channel. Furthermore, the slightly
weaker percentage increase of other operating income and expenses compared to sales is also expected to
contribute to the improvement of the EBIT-margin; for example, the operating requirements for planned
sales growth over the coming years have essentially been met, meaning that economies of scale can be
realized. The planning of investments and working capital is based on historical experience and is carried
out in accordance with strategic objectives. The future tax payments are based on current tax rates. For
periods beyond the budget planning, an annual growth rate is determined and used to forecast future cash
flows beyond the three-year period. The assumed growth rate is based on long-term expectations on
inflation rate and may not exceed the long-term average growth rates for the business area in which the
respective cash-generating unit, or group of cash-generating units, operates.

The recoverable amount for the respective cash-generating unit or group of cash-generating units was
determined on the basis of the value-in-use. This resulted in an impairment loss for one cash-generating
unit.

203

Annual Report 2020 ↗ Consolidated Financial Statements

The group of cash-generating units “South Africa” includes goodwill before impairment of €1.9 million
(previous year: €2.3 million). These are allocated to the EEMEA segment. Due to an adjustment of earnings
prospects, when calculating the recoverable amount an impairment loss of €1.9 million was incurred. The
recoverable amount of €30.3 million was determined by a value-in-use calculation with a discount rate of
12.4% p.a. (previous year: 10.8% p.a.) and a growth rate of 1.7% (previous year: 2.0%). The impairment is
included in the item “Other Operating Income and Expenses” in the consolidated income statement.

In connection with the Golf business unit (CPG – Cobra PUMA Golf), the Cobra brand exists as an intangible
asset with an indefinite useful life amounting to €115.9 million (previous year: €126.6 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. It was assigned to the North America business segment, where the
headquarter 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 6.4% p.a. (previous year: 5.9% p.a.), a
royalty rate of 8% (previous year: 8%) and a 1.7% growth rate (previous year: 2%) was used.

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 group of cash-
generating units to which the trademark is to be allocated is also determined. In 2020, there were no
indications of an impairment.

In the financial year, development costs in connection with Cobra brand golf clubs amounting to
€1.8 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 €2.3 million in the financial year (previous year: €1.8 million).

The changes in intangible assets in the financial year are shown in “Changes in Fixed Assets” of Appendix 1
to the notes to the consolidated financial statements. The item other intangible assets includes advance
payments in the amount of €22.8 million (previous year: €9.9 million).

The current amortization of intangible assets in the amount of €24.4 million (previous year: €23.5 million) is
included in the other operating expenses. Of this, €3.8 million relate to sales and distribution expenses
(previous year: €4.6 million), €0.1 million to expenses for product management/ merchandising (previous
year: €0.1 million), €2.3 million to development expenses (previous year: €1.8 million), and €18.3 million to
administrative and general expenses (previous year: €17.0 million). Impairment expenses exceeding
current depreciation of €1.9 million (previous year: €0.0 million) were incurred.

Goodwill is allocated to the Group’s identifiable group of cash-generating units (CGUs) according to the
countries where the activities are carried out. Summarized by regions, goodwill is allocated as follows:

204

Annual Report 2020 ↗ Consolidated Financial Statements

↗ T.26 (€ million)

PUMA UK

Genesis

Subtotal Europe

PUMA South Africa

Subtotal EEMEA

PUMA Canada

PUMA United

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)

stichd

Total

Assumptions used in conducting the impairment tests in 2020:

2020

2019

1.6

6.8

8.4

0.0

9.1

1.8

10.9

14.2

0.5

9.3

24.1

2.5

13.0

15.5

43.3

1.7

7.2

8.8

2.3

9.8

2.0

11.7

15.5

0.5

10.7

26.8

2.5

13.3

15.8

44.9

139.4

241.5

139.4

249.7

↗ T.27

Europe

EEMEA*

North America*

Latin America

Greater China

Asia/ Pacific
(without Greater China)*

stichd*

Tax rate
(range)

WACC before tax
(range)

WACC after tax
(range)

19.0%

28.0%

26.7%

8.0%-8.1%

16.3%

8.0%

6.8%

12.4%

6.3%

27.0%-30.0%

10.7%-51.3%

8.2%-60.3%

20.0%-25.0%

7.0%-9.5%

5.7%-7.5%

31.8%

25.0%

8.7%

7.6%

6.3%

6.1%

* The information for EEMEA, North America, Asia/ Pacific (without Greater China) and stichd relates in each case to only one

cash-generating unit (CGU)

205

Annual Report 2020 ↗ Consolidated Financial Statements

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 a weighted average cost of capital calculation taking into
account a market-weighted five-year average debt/equity structure and financing costs, respectively taking
into account the main competitors of the respective group of cash-generating units.

In addition, a growth rate of 1.7% (previous year: 2%) is generally assumed. A growth rate of less than 1.7%
(previous year: less than 2%) was applied only in justified exceptional cases, where the long-term
expectations on inflation rate for the country in which the cash-generating unit operates were lower than
the assumed growth rate; this applies, in particular, to Japan and Taiwan.

The cash-generating unit stichd includes goodwill of €139.4 million (previous year: €139.4 million), which is
significant in comparison to the overall carrying amount of goodwill. The recoverable amount was
determined by a value-in-use calculation with a discount rate of 6.1% p.a. (previous year: 5.9% p.a.) and a
growth rate of 1.7% (previous year: 2%).

Sensitivity analyses with regard to the impairment tests carried out as of the balance sheet date show that
neither an increase in discount rates by one percentage point, respectively, nor a reduction in growth rates
by one percentage point, respectively, results in any indication of impairment. Furthermore, due to the
increased uncertainty as a result of the COVID-19 pandemic, in the financial year 2020 additional sensitivity
analyses were carried out with regard to the impairment tests. Alongside an increase in discount rates by
one percentage point, respectively, and a simultaneous reduction in growth rates by one percentage point,
respectively, these analyses also assume a reduction in operating result (EBIT) of 10% respectively in the
underlying three-year plan. This resulted in an indication of impairment in the amount of €1.6 million.

The following table contains the assumptions for the performance of the impairment test in the previous
year:

↗ T.28

Europe

EEMEA*

North America*

Latin America

Greater China

Asia/ Pacific
(without Greater China)*

stichd*

Tax rate
(range)

WACC before tax
(range)

WACC after tax
(range)

19.0%

28.0%

26.7%

7.4%-7.5%

14.4%

7.6%

6.4%

10.8%

6.1%

27.0%-30.0%

9.9%-31.2%

7.7%-56.6%

20.0%-25.0%

6.8%-7.8%

5.8%-6.3%

31.8%

25.0%

8.1%

7.2%

5.9%

* The information for EEMEA, North America, Asia/ Pacific (without Greater China) and stichd relates in each case to only one

cash-generating unit (CGU)

206

Annual Report 2020 ↗ Consolidated Financial Statements

12. OTHER NON-CURRENT ASSETS

Other non-current financial and non-financial assets consist of:

↗ T.29 (€ million)

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

2020

25.3

2.5

30.9

58.8

6.8

65.6

2019

40.0

1.3

30.1

71.5

19.3

90.8

The 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 €26.8 million (previous year: €26.8 million).
The other non-current non-financial assets mainly include deferrals in connection with promotional and
advertising agreements.

207

Annual Report 2020 ↗ Consolidated Financial Statements

13. LIABILITIES

The residual terms of liabilities are as follows:

↗ T.30 (€ million)

Financial liabilities

Trade payables

Other liabilities*

Liabilities from other taxes

Liabilities relating to social security

Payables to employees

Refund liabilities

Liabilities from derivative financial instruments

Other liabilities

Total

* The maturity analysis on lease liabilities is presented in chapter 10.

2020

Residual term of

2019

Residual term of

Total

up to 1 year

1 to 5 years

over 5 years

Total

up to 1 year

1 to 5 years

over 5 years

266.4

941.5

50.5

9.9

79.0

227.4

135.2

36.0

121.4

941.5

50.5

9.9

79.0

227.4

126.9

35.1

145.0

8.3

0.8

173.5

843.7

39.5

7.2

114.0

208.3

38.2

38.1

10.2

843.7

39.5

7.2

114.0

208.3

34.1

38.0

163.3

4.0

0.8

1,745.9

1,591.8

154.1

1,462.5

1,295.1

168.2

0.1

PUMA has confirmed credit lines amounting to a total of €1,639.1 million (previous year: €687.6 million). This significant increase compared with the previous year is a
consequence of securing additional credit lines in order to safeguard PUMA against any negative cash shortfalls resulting from the COVID-19 pandemic. In May 2020, for
example, a syndicated credit line of €900.0 million was agreed with 11 commercial banks and the KfW (Kreditanstalt für Wiederaufbau) to provide “bridge financing” for a

208

Annual Report 2020 ↗ Consolidated Financial Statements

maximum period of 2 years. By the end of December, €700.0 million had already been refinanced through a new promissory note loan (€250.0 million) with 3 and 5-year
terms and an adjustment and increase of the previously €350.0 million syndicated credit facility to a new €800.0 million.

Under financial liabilities, €0.0 million (previous year: €0.0 million) was utilized from credit lines granted only until further notice. Unutilized credit lines totaled
€1,372.7 million as of December 31, 2020, compared to €514.1 million the previous year.

The effective interest rate of the financial liabilities ranged between 0.1% and 14.8% (previous year: 0.1% to 8.5%).

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.

The table below shows the cash flows of the non-derivative financial liabilities and of the derivative financial instruments with a positive and negative fair value:

The current financial liabilities can be repaid at any time.

↗ T.31 CASH FLOWS FROM NON-DERIVATIVE AND DERIVATIVE FINANCIAL LIABILITIES (€ million)

Non-derivative financial liabilities

Financial liabilities

Trade payables

Other liabilities

Derivative financial liabilities and assets

Cash-Inflow from derivative financial instruments

Cash-Outflow from derivative financial instruments

Carrying
amount 2020

266.4

941.5

24.6

Cashflow 2021

Cashflow 2022

Cashflow 2023 et seq.

Interest

Repayment

Interest

Repayment

Interest

Repayment

0.8

121.4

941.5

24.2

2,893.7

2,999.4

0.7

1.6

145.0

0.1

495.3

502.0

0.3

209

Annual Report 2020 ↗ Consolidated Financial Statements

The following values were determined in the previous year:

↗ T.32 CASH FLOWS FROM NON-DERIVATIVE AND DERIVATIVE FINANCIAL LIABILITIES (€ million)

Non-derivative financial liabilities

Financial liabilities

Trade payables

Liabilities from acquisitions

Other liabilities

Derivative financial liabilities and assets

Cash-Inflow from derivative financial instruments

Cash-Outflow from derivative financial instruments

Carrying
amount 2019

173.5

843.7

26.9

Cashflow 2020

Cashflow 2021

Cashflow 2022 et seq.

Interest

Repayment

Interest

Repayment

Interest

Repayment

0.7

10.2

843.7

26.9

2,847.9

2,831.1

0.6

103.3

0.7

60.0

0.0

506.3

505.1

210

Annual Report 2020 ↗ Consolidated Financial Statements

14. ADDITIONAL DISCLOSURES ON FINANCIAL INSTRUMENTS

↗ T.33 (€ 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

Other financial liabilities (current and non-
current)

Derivatives with hedging relationship
(fair value) (current and non-current)

Derivatives without hedging relationship
(fair value)

Measurement
categories
under IFRS 9

Carrying
amount
2020

Fair value
2020

Carrying
amount
2019

Fair value
2019

1) AC

655.9

621.0

29.3

655.9

621.0

29.3

518.1

611.7

31.4

518.1

611.7

31.4

n.a.

25.7

45.5

2) FVPL

3) FVOCI

0.4

30.9

25.3

266.4

941.5

0.4

30.9

25.3

266.4

941.5

1.1

30.1

40.0

173.5

843.7

1.1

30.1

40.0

173.5

843.7

24.6

26.9

n.a.

134.9

36.6

2) FVPL

0.3

1.6

Total financial assets at amortised cost

1,337.1

1,191.3

Total financial liabilities at amortised cost

1,232.5

1,044.1

Total financial assets at FVOCI

25.3

40.0

1) AC = at amortised cost
2) FVPL = fair value through PL
3) FVOCI = fair value through OCI

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.

211

Annual Report 2020 ↗ Consolidated Financial Statements

The fair value of the investments held for strategic reasons only refers to equity instruments of the category
“fair value through OCI” (FVOCI) and is determined on the basis of level 1. The market values of derivative
assets or liabilities were determined on the basis of level 2.

Cash and cash equivalents, trade receivables and other receivables have short maturities. 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 fair values of other financial assets correspond to their carrying amount as the interest calculation
occurs at the prevailing market interest rates on the balance sheet date. Other (current and non-current)
financial assets include €34.2 million (previous year: €34.6 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 amount represents a reasonable approximation of their fair value as the interest rate differential is
not significant at the reporting date.

Trade payables have short residual maturities; their carrying amounts therefore approximate fair value.

The remaining financial liabilities have short residual maturities; the recognized amounts therefore
approximate fair value.

The fair values of derivative financial instruments 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:

↗ T.34 (€ million)

Financial assets at amortised cost

Financial liabilities at amortised cost

Derivatives without hedging relationship

Financial assets at FVOCI

Total

2020

-21.0

-8.5

1.6

-14.7

-42.6

The net result was determined by taking into account interest income and expense, currency exchange
effects, changes in provisions for risks as well as gains and losses from sales.

General administrative expenses include changes in risk provisions for receivables.

2019

4.7

-6.5

-2.1

3.4

-0.5

212

Annual Report 2020 ↗ Consolidated Financial Statements

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 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 for pensionable salary in the UK plan in 2016 covers this risk for the highest
obligations. The UK plan is therefore classified as a non-salary obligation.

↗ T.35 (€ million)

Present Value of Pension Claims 12/31/2020

Salary-based obligations

Annuity

One-off payment

Non-salary-based obligations

Annuity

One-off payment

Total

Germany

Other
Companies

PUMA
Group

0.0

35.0

7.5

42.5

0.0

49.0

0.0

49.0

10.2

10.0

0.0

10.2

10.0

84.0

7.5

20.2

111.7

213

Annual Report 2020 ↗ Consolidated Financial Statements

The following values were determined in the previous year:

↗ T.36 (€ million)

Present Value of Pension Claims 12/31/2019

Salary-based obligations

Annuity

One-off payment

Non-salary-based obligations

Annuity

One-off payment

Total

Germany

Other
Companies

PUMA
Group

0.0

28.0

7.3

35.3

0.0

44.8

0.0

44.8

9.4

9.2

0.0

18.6

9.4

9.2

72.8

7.3

98.7

The main pension arrangements are described below:

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 €42.5 million at the end of 2020 (previous year:
€35.3 million) and thus comprises 38.0% of the total obligation. The fair value of the plan assets relative to
domestic obligations amounts to €31.6 million. The corresponding pension provision amounts to
€10.9 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 service-based commitments to provide old age, invalidity and
surviving 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 €49.0 million at the end of 2020 (previous year: €44.8 million) and thus accounts for 43.9% of the
total obligation. The obligation is covered by assets amounting to €37.0 million. The provision amounts to
€12.0 million.

214

Annual Report 2020 ↗ Consolidated Financial Statements

The changes in the present value of pension claims are as follows:

↗ T.37 (€ million)

Present Value of Pension Claims January 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 December 31

The changes in the plan assets are as follows:

↗ T.38 (€ million)

Plan Assets January 1

Interest income on plan assets

Actuarial gains and losses (-)

Employer contributions

Employee contributions

Benefits paid

Effects from transfers

Currency exchange effects

Plan Assets December 31

2020

98.7

2.7

0.0

1.5

6.7

-3.4

0.9

7.4

-2.8

111.7

2020

64.6

1.0

3.0

1.9

6.7

-1.6

0.0

-2.2

73.5

2019

85.8

2.3

0.0

2.0

1.0

-2.2

-0.4

8.0

2.2

98.7

2019

56.9

1.3

2.8

1.8

1.0

-1.0

0.0

1.8

64.6

215

Annual Report 2020 ↗ Consolidated Financial Statements

The pension provision for the Group is derived as follows:

↗ T.39 (€ 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 December 31

2020

111.7

-73.5

38.2

0.0

38.2

2019

98.7

-64.6

34.1

0.0

34.1

In 2020, benefits paid amounted to €3.4 million (previous year: €2.2 million). Contributions in 2021 are
expected to amount to €2.4 million. Of this, €0.9 million is expected to be paid directly by the employer.
Employer contributions to external plan assets amounted to €1.9 million in 2020 (previous year:
€1.8 million). Employer contributions in 2021 are expected to amount to €2.0 million.

The changes in pension provisions are as follows:

↗ T.40 (€ million)

Pension Provision January 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 December 31

of which assets

of which liabilities

2020

34.1

3.2

4.4

-1.9

-1.8

0.9

-0.7

38.2

0.0

38.2

2019

28.9

3.0

5.2

-1.8

-1.2

-0.4

0.4

34.1

0.0

34.1

216

Annual Report 2020 ↗ Consolidated Financial Statements

The expenses in the 2020 financial year are structured as follows:

↗ T.41 (€ 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

2020

2019

2.7

0.0

1.5

2.3

0.0

2.0

-1.0

-1.3

0.0

3.2

2.7

0.5

0.0

3.0

2.3

0.7

In addition to the defined benefit pension plans, PUMA also makes contributions to defined contribution
plans. Payments for the financial year 2020 amounted to €13.6 million (previous year: €14.0 million).

217

Annual Report 2020 ↗ Consolidated Financial Statements

Actuarial gains and losses recorded in Other Comprehensive Income:

↗ T.42 (€ 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

Plan assets investment classes:

↗ T.43 (€ million)

Cash and cash equivalents

Equity instruments

Bonds

Investment funds

Derivatives

Real estate

Insurance

Others

Total Plan Assets

2020

7.4

0.2

6.8

0.4

-3.0

0.0

4.4

2019

8.0

-0.8

8.1

0.7

-2.8

0.0

5.2

2020

2019

3.0

0.8

7.3

12.4

8.0

3.7

31.6

6.5

73.5

2.6

0.6

0.9

20.1

6.1

4.1

24.1

6.1

64.6

218

Annual Report 2020 ↗ Consolidated Financial Statements

Of which investment classes with a quoted market price:

↗ T.44 (€ million)

Cash and cash equivalents

Equity instruments

Bonds

Investment funds

Derivatives

Real estate

Insurance

Others

2020

2019

3.2

0.8

7.3

2.6

0.6

0.9

12.4

20.1

8.0

3.1

0.0

6.4

6.1

3.5

0.0

5.8

Plan Assets with a quoted Market Price

41.2

39.6

Plan assets still do not include the Group’s own financial instruments or real estate used by Group
companies.

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 tolerable volatility. It was revised once again in 2020 and the risk profile was reduced.

The following assumptions were used to determine pension obligations and pension expenses:

↗ T.45

Discount rate

Future pension increases

Future salary increases

2020

2019

1.28%

2.08%

1.65%

1.64%

2.16%

1.66%

The indicated values are weighted average values. A standard interest rate of 1.00% was applied for the
eurozone (previous year: 1.00%).

The 2018 G guideline tables were used as mortality tables for Germany. For the UK, the mortality was
assumed based on basic table series S2 taking into account life expectancy projections in accordance with
CMI2019 with a long-term trend of 1%.

219

Annual Report 2020 ↗ Consolidated Financial Statements

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.46 (€ 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

2020

2019

-7.3

8.4

-8.0

6.2

Salary and pension trends have only a negligible effect on the present value of pension claims due to the
structure of the benefit plans.

The weighted average duration of pension commitments is 18 years (previous year: 18 years).

220

16. OTHER PROVISIONS

↗ T.47 (€ million)

Provisions for:

Warranties

Purchasing risks

Litigation risks

Personnel

Others

Total

Annual Report 2020 ↗ Consolidated Financial Statements

2019

1.4

9.4

23.7

22.4

21.0

77.9

Currency
adjustments,
retransfers

0.0

-0.3

-0.6

0.0

-2.3

-3.3

2020

2019

Addition

Utilization

Reversal

Thereof
non-current

0.5

4.5

8.7

11.4

7.3

32.5

-0.5

0.0

-2.7

-15.1

-3.1

-21.4

-0.1

-7.9

-0.9

0.0

-2.6

-11.6

1.3

5.6

28.3

18.7

20.3

74.2

0.0

10.5

18.7

9.7

38.9

0.0

10.0

22.4

10.7

43.2

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. Purchasing risks relate primarily to materials and molds that are required for the manufacturing of
shoes.

Other provisions comprise in particular provisions in relation with dismantling obligations and other risks.

Current provisions are expected to be paid out in the following year, non-current provisions are expected to be paid out in a period of up to ten years. There are no
significant compounding effects. The recognition and measurement of provisions is based on past experience from similar transactions. All events until the preparation of
the consolidated financial statements are taken into account here.

221

Annual Report 2020 ↗ Consolidated Financial Statements

17. SHAREHOLDERS’ EQUITY

SUBSCRIBED CAPITAL

The subscribed capital corresponds to the subscribed capital of PUMA SE.

With resolution of the Annual General Meeting of April 18, 2019, the Company was authorized to carry out a
capital increase from Company funds and subsequently perform a stock split at a ratio of 1 to 10. As of the
balance sheet date, the subscribed capital in accordance with the Articles of Association corresponds to
€150,824,640.00 and is divided into 150,824,640 no-par value voting shares. This corresponds to a
proportional amount of €1.00 per share.

Changes in the circulating shares:

↗ T.48

Circulating shares as of January 1, share

Issue of new shares as part of the stock split on June 10, 2019

Issue of Treasury Stock

2020

2019

149,547,801

14,951,470

134,563,230

36,058

33,101

Circulating shares as of December 31, share

149,583,859 149,547,801

The issue of treasury stock relates to compensation payments in connection with promotional and
advertising agreements.

CAPITAL RESERVE

The capital reserve includes the premium from issuing shares, as well as amounts from the grant,
conversion and expiration of share options.

REVENUE RESERVES INCL. RETAINED EARNINGS

The revenue reserves incl. retained earnings include the net income of the financial year as well as the
income achieved in the past by the companies included in the consolidated financial statements to the
extent that it was not distributed.

DIFFERENCE 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 €-87.6 million (previous year: €-8.8 million) is offset by deferred taxes of €5.1 million
(previous year: €-0.1 million).

222

Annual Report 2020 ↗ Consolidated Financial Statements

TREASURY STOCK

The resolution adopted by the Annual General Meeting on May 7, 2020 authorized the Company to purchase
treasury shares up to a value of 10% of the share capital until May 6, 2025. If purchased through the stock
exchange, the purchase price per share may not exceed 10% or fall below 20% 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 1,240,781 PUMA shares in its own portfolio,
which corresponds to 0.82% of the subscribed capital.

AUTHORIZED CAPITAL

As of December 31, 2020, the Company’s Articles of Association provide for authorized capital totaling
€15,000,000.00:

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
€15,000,000.00 (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 shareholders’ 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.

In this connection, the share capital was increased conditionally by up to €30,164,920.00 by the issue of up
to 30,164,920 new units of registered stock (Conditional Capital 2018). 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.

DIVIDENDS

The amounts eligible for distribution relate to the retained earnings of PUMA SE, which is determined in
accordance with German Commercial Law.

The Management Board and the Supervisory Board will propose to the Annual General Meeting that a
dividend of €0.16 per circulating share, or a total of €23.9 million (with respect to the circulating shares as
of December 31, 2020), be distributed to the shareholders from the retained earnings of PUMA SE for the
financial year 2020.

223

Annual Report 2020 ↗ Consolidated Financial Statements

Proposed appropriation of the retained earnings of PUMA SE:

↗ T.49

Retained earnings of PUMA SE as of December 31, € million

Retained earnings available for distribution, € million

Dividend per share, €

Number of circulating shares*

Total dividend*, € million

Carried forward to the new accounting period*, € million

* Previous year's values adjusted to the outcome of the Annual General Meeting

2020

390.4

0.16

2019

160.7

0.00

149,583,859

149,553,847

23.9

366.5

0.0

160.7

A dividend payment is subject to PUMA's continued positive economic development in connection with the
ongoing COVID-19 pandemic.

NON-CONTROLLING INTERESTS

This item comprises the remaining shares of non-controlling interests. The composition is shown in
chapter 29.

CAPITAL MANAGEMENT

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.

Capital management relates to the consolidated equity of PUMA. This is shown in the consolidated balance
sheet as well as the reconciliation statement concerning “Changes in Equity.”

18. MANAGEMENT INCENTIVE PROGRAMS

In order to bind the management to the company by 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:

224

Annual Report 2020 ↗ Consolidated Financial Statements

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 share
performance. Each of these monetary units entitles the holder to a cash payment at the end of the term. The entitled cash payment compares the performance using the
average virtual appreciation rights of the last thirty trading days before the start of the year of issue with the virtual appreciation rights of the last thirty trading days
before the exercise date. Monetary units are subject to a vesting period of three years. After that, there is an exercise period of two years (starting with each quarterly
publication date for a period of 30 days) 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.

In the financial year 2020, an expense of €11.0 million was recorded for this purpose on the basis of the employment contract commitments to the Management Board
members.

↗ T.50 VIRTUAL SHARES (MONETARY UNITS)

Issue date

Term

Vesting period

Base price PUMA share at issue

Reference value PUMA-share at the end of the financial year

Participants in year of issue

Participants at the end of the financial year

Number of monetary units as of 1/1/2020

Number of monetary units exercised in the FY

Number of monetary units expired in the FY

Final number of monetary units as of 12/31/2020

1/1/2016

1/1/2017

1/1/2018

1/1/2019

1/1/2020

20.00

N/A

24.00

N/A

37.10

86.23

44.40

57.49

Years

67.69

EUR/share

28.74

EUR/share

Persons

88,620

107,360

117,440

97,320

65,993

-88,620

-107,360

-4,923

112,517

97,320

65,993

225

Annual Report 2020 ↗ Consolidated Financial Statements

In the financial year 2019, a stock split was performed with a ratio of 1:10. As a result of this, all past share
values were divided by a factor of 10 and all monetary units were multiplied by a factor of 10.

This commitment consisting of share-based remuneration transactions with cash compensation is
recorded as personnel provisions and remeasured at fair value on every balance sheet date, provided it has
not been exercised yet. The expenses are recorded over the vesting period. Based on the prorated average
share price of the last thirty trading days in 2020 and taking into account the intra-year exercise date in
2020, the provisions for this program amounted to €17.2 million at the end of the financial year.

EXPLANATION OF THE "GAME CHANGER 2020" PROGRAM

In addition, in 2017, an additional Long-Term Incentive Program, the global "Game Changer 2020" program,
was launched. 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 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 balance
of €3.7 million were paid out to the participants in March 2020. 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 December 31, 2019. No further expenses were incurred 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 2020
program. The difference to the Game Changer program lies in the different participants. While the
participants in the Game Changer program consist of top executives, the "Momentum" program includes
employees who are not part of this group.

In March 2020, an amount of €2.3 million was paid out to the participants. No further expenses were
incurred for this program in the year under review.

226

Annual Report 2020 ↗ Consolidated Financial Statements

EXPLANATION OF THE "GAME CHANGER 2.0 – 2021" PROGRAM

In 2018, the Long-Term Incentive Program (LTIP) "Game Changer 2.0" was launched. Participants in this
program consist mainly of top executives reporting to the Management Board and individual key positions
in the PUMA Group. The objective of this program is to retain these employees in 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 average medium-
term targets of the PUMA Group for 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. A payout is only possible at the three exercise times (6, 12 or 18 months
after the end of the performance period). The average share price of the last 30 trading days before the
exercise date determines the value of a virtual share. The payout is limited to a maximum of 200% of the
granted prorated target amount (cap) and is only performed if an exercise hurdle of +10% share-price
appreciation was exceeded once during the performance period.

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 December 31, 2020. A prorated share of €1.0 million
was set aside as a provision for the "Game Changer 2.0 – 2021" program during the reporting period and
€0.4 million was released.

EXPLANATION OF THE "GAME CHANGER 2.0 – 2022" PROGRAM

In 2019, the global "Game Changer 2.0 – 2022" program was launched, which is subject to the same
parameters as the "Game Changer 2.0 – 2021" program (employment relationship until December 31, 2021
and payout March 2022). In the reporting year, a prorated amount of €1.3 million was set aside as a
provision for this program and €0.2 million was released.

227

Annual Report 2020 ↗ Consolidated Financial Statements

EXPLANATION OF THE "GAME CHANGER 2.0 – 2023" PROGRAM

In 2020, the global "Game Changer 2.0 – 2023" program was launched, which is subject to the same basic
parameters as the "Game Changer 2.0 – 2021" program (employment relationship until December 31, 2022
and payout March 2023). However, as part of the Performance Share component, payment is limited to a
maximum of 300% of the granted proportionate target amount (cap). In the reporting year, a prorated
amount of €0.8 million was set aside as a provision for this program.

↗ T.51 GAME CHANGER 2.0 (PERFORMANCE SHARE PLAN)

Program addendum

Issue date

Term

Vesting period

Base price at program start

Reference value at the end of the financial year

Participants in year of issue

Participants at the end of the financial year

Number of “virtual shares” as of 1/1/2020

Number of “virtual shares” expired in the FY

Number of “virtual shares” exercised in the FY

2021

2022

2023

1/1/2018

1/1/2019

1/1/2020

37.10

74.20

43,000

-6,750

44.40

43.12

44,407

-5,167

Years

67.69

EUR/share

28.74

EUR/share

Persons

28,201

Final number of “virtual shares” as of 12/31/2020

36,250

39,240

28,201

In the financial year 2019, a stock split was performed with a ratio of 1:10. As a result of this, all past share
values were divided by a factor of 10 and all virtual shares were multiplied by a factor of 10.

228

Annual Report 2020 ↗ Consolidated Financial Statements

NOTES TO THE CONSOLIDATED
INCOME STATEMENT

19. SALES

The net sales of the Group are broken down by product divisions and distribution channels as follows:

↗ T.52 BREAKDOWN BY DISTRIBUTION CHANNELS (€ million)

Wholesale

Retail

Total

↗ T.53 BREAKDOWN BY PRODUCT DIVISIONS (€ million)

Footwear

Apparel

Accessories

Total

2020

2019

3,809.9

4,106.9

1,424.5

1,395.3

5,234.4

5,502.2

2020

2019

2,367.6

2,552.5

1,974.1

2,068.7

892.7

881.1

5,234.4

5,502.2

20. 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 turnover-based
rental components.

229

Annual Report 2020 ↗ Consolidated Financial Statements

Other operating income and expenses are allocated based on functional areas as follows:

↗ T.54 (€ million)

Sales and distribution expenses

Product management / merchandising

Research and development

Administrative and general expenses

Other operating expenses

Other operating income

Total

Of which personnel expenses

Of which scheduled depreciation

Of which impairment expenses

2020

2019

1,794.0

1,821.2

46.0

56.6

52.6

61.7

368.7

340.0

2,265.3

2,275.5

0.4

4.2

2,264.9

2,271.3

578.5

275.7

18.0

633.7

246.4

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 own retail activities. Other sales and distribution expenses include logistic
expenses and other variable sales and distribution expenses. The impairment expenses of €18.0 million
concern the impairment of goodwill (€1.9 million) and the impairment of right-of-use assets (€16.1 million).

In the consolidated financial statements of PUMA SE, fees of €0.8 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 of €0.7 million (previous year: € 0.8 million) and other assurance services
amounting to €0.1 million (previous year: €0.1 million), in particular for EMIR audits and the review of the
combined non-financial report as well as for tax consultancy services of less than €0.0 million (previous
year: less than €0.0 million).

Other operating income, which in the previous year mainly included income from the reduction of liabilities
from acquisitions in the amount of €2.1 million, comprises income from the sale of fixed assets in the
amount of €0.4 million (previous year: €2.0 million).

230

Annual Report 2020 ↗ Consolidated Financial Statements

Overall, other operating expenses include personnel costs, which consist of:

↗ T.55 (€ million)

Wages and salaries

Social security contributions

Expenses from share-based remuneration with cash compensation

Expenses for retirement pension and other personnel expenses

Total

2020

441.9

63.2

14.1

59.3

2019

490.2

66.8

12.6

64.2

578.5

633.7

In the financial year 2020, the personnel costs presented above include government grants amounting to a
figure in the low double-digit millions granted in connection with the global COVID-19 pandemic; this
amount was deducted from the corresponding expenses.

In addition, cost of sales includes personnel costs in the amount of €5.2 million (previous year:
€6.8 million).

The average number of employees for the year was as follows:

↗ T.56 EMPLOYEES

Marketing/ retail/ sales

Research & development/ product management

Administrative and general units

Total annual average

2020

9,654

1,002

2,361

2019

9,883

986

2,479

13,016

13,348

As of the end of the year, a total of 14,374 individuals were employed (previous year: 14,332).

231

21. FINANCIAL RESULT

The financial result consists of:

↗ T.57 (€ million)

Interest income

Income from currency-conversion differences, net

Others

Financial income

Interest expense

Interest expense – Leasing liability

Interest accrued on liabilities from acquisitions

Valuation of pension plans

Expenses from currency-conversion differences, net

Others

Financial expenses

Financial result

Annual Report 2020 ↗ Consolidated Financial Statements

2020

8.4

0.0

27.0

35.4

-14.1

-29.3

0.0

-0.5

-3.9

-34.5

-82.3

-46.8

2019

7.2

10.2

8.5

25.8

-13.9

-29.7

-0.1

-0.7

0.0

-4.1

-48.4

-22.6

The item Others in financial income includes interest components (SWAP points) of €27.0 million (previous
year: €8.2 million) from financial instruments in connection with currency derivatives, and dividend income
of €0.0 million (previous year: €0.3 million) from the investment in Borussia Dortmund GmbH & Co. KGaA
(BVB).

The item Others in financial expenses includes interest components (SWAP points) of €34.5 million
(previous year: €4.1 million) from financial instruments in connection with currency derivatives.

In addition, expenses from currency translation differences of more than €3.9 million (previous year:
income of €10.2 million) are included, which are to be assigned to the financing area.

232

22. INCOME TAXES

↗ T.58 (€ million)

Current income taxes

Germany

Other countries

Total current income taxes

Deferred taxes

Total

Annual Report 2020 ↗ Consolidated Financial Statements

2020

2019

11.0

84.9

95.9

-56.7

39.2

12.8

124.6

137.5

-28.8

108.6

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.

Reconciliation of the theoretical tax expense with the effective tax expense:

↗ T.59 (€ million)

Earnings before income tax

Theoretical tax expense

Tax rate of the SE = 27.22% (previous year: 27.22%)

Tax rate 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 rates

Non-deductible expenses for tax purposes and non-taxable income and other effects

Effective tax expense

Effective tax rate

2020

162.3

44.2

-7.1

-4.7

6.8

-0.4

0.4

39.2

24.2%

The tax effect resulting from items that are directly credited or debited to equity is shown in chapter 8.

2019

417.6

113.7

-12.8

-4.5

1.0

2.0

9.3

108.6

26.0%

233

Annual Report 2020 ↗ Consolidated Financial Statements

23. 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 shareholders of the parent company by the average
number of circulating shares.

The calculation is shown in the table below:

↗ T.60

Consolidated net earnings € million

Average number of circulating shares

Average number of circulating shares, diluted

Earnings per share in €

Earnings per share, diluted in €

2020

78.9

2019

262.4

149,561,440

149,521,683

149,561,440

149,521,683

0.53

1.76

24. MANAGEMENT OF THE CURRENCY RISK

In the financial year 2020, PUMA designated currency hedges as cash flow hedges in order to hedge the
amount payable of purchases denominated in USD, which is converted to euros, as well as for other
currency risks resulting from internal resale to PUMA subsidiaries.

Furthermore, currency swaps and currency forward transactions are used to hedge foreign exchange risks
when measuring intra-group loans denominated in foreign currencies.

The nominal amounts of open exchange rate-hedging transactions, which relate mainly to cash flow
hedges, refer primarily to currency forward transactions in a total amount of €3,026.5 million (previous
year: €2,842.6 million). These underlying transactions are expected to generate cash flows in 2021 and
2022. For further information, please refer to the explanations in chapter 13.

The market values of open exchange rate-hedging transactions on the balance sheet date consist of:

↗ T.61 (€ million)

Currency hedging contracts, assets (see chapters 6 and 12)

Currency hedging contracts, liabilities (see chapters 13 and 14)

Net

2020

26.1

-135.2

-109.1

2019

46.5

-38.2

8.3

The changes in effective cash flow hedges are shown in the schedule of changes in shareholders’ equity and
the statement of comprehensive income.

234

Annual Report 2020 ↗ Consolidated Financial Statements

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 sensitivity analyses are based on the following assumptions:

Material non-derivative monetary financial instruments (cash and cash equivalents, receivables, interest-
bearing debt, lease liabilities, non-interest-bearing liabilities) are either denominated directly in the
functional currency or transferred into the functional currency through the use of currency hedging
contracts.

Currency hedging 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, 2020, 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 €151.9 million higher
(lower) (December 31, 2019: €150.6 million higher (lower)).

Currency risks and other risk and opportunity categories are discussed in greater detail in the Combined
Management Report in the Risk and Opportunity Management section as well as in chapters 2 and 13 of the
Notes to the consolidated financial statements.

235

Annual Report 2020 ↗ Consolidated Financial Statements

ADDITIONAL INFORMATION

25. SEGMENT REPORTING

Segment reporting is based on geographical regions in accordance with the PUMA internal reporting
structure, apart from stichd. The geographical region forms the business segment. Sales revenue, the
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 stichd. 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 central sourcing, central treasury, central marketing and other global
functions of the Company headquarters.

The Company’s main decision-maker is defined as the entire Management Board of PUMA SE.

With the exception of sales of goods by stichd amounting to €30.0 million (previous year: €32.7 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 considering
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 reported to the main decision-maker. Amounts recognized by the Group from the intra-group
profit elimination on inventories in connection with intra-group sales are not allocated to the business
segments in the way that they are reported to the main decision-maker. Investments, depreciation and non-
current assets at the level of the business segments are not reported to the chief operating decision-
maker. Intangible assets are allocated to the business segments in the manner described under chapter
11. 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.

Non-current assets and depreciation comprise the carrying amounts and depreciation of property, plant
and equipment, right-of-use assets and intangible assets during the past financial year. The investments
comprise additions to property, plant and equipment and intangible assets.

Since PUMA is active in only one business area, the sporting goods industry, products are additionally
allocated according to the footwear, apparel and accessories product segments in accordance with the
internal reporting structure.

236

Annual Report 2020 ↗ Consolidated Financial Statements

SEGMENT REPORTING 1-12/ 2020

↗ T.62 REGIONS (€ million)

Europe

EEMEA*

North America

Latin America

Greater China

Asia/ Pacific
(without Greater China) *

stichd **

External Sales

EBIT

Investments

1-12/2020

1-12/2019

1-12/2020

1-12/2019

1-12/2020

1-12/2019

1,229.3

1,267.6

688.0

735.8

1,349.5

1,408.7

403.2

788.9

460.0

315.5

516.6

755.7

521.4

296.3

104.4

129.1

160.6

59.2

209.6

33.3

79.0

182.6

124.2

220.3

95.5

251.3

62.5

87.6

44.7

11.8

23.3

3.3

17.0

7.4

3.3

76.2

23.3

20.7

8.4

29.4

9.8

4.1

Total business segments

5,234.4

5,502.2

775.2

1,023.9

110.8

172.0

Europe

EEMEA*

North America

Latin America

Greater China

Asia/ Pacific
(without Greater China) *

stichd

Depreciation

Inventories

Trade Receivables (3rd)

1-12/2020

1-12/2019

1-12/2020

1-12/2019

1-12/2020

1-12/2019

48.3

42.5

52.1

14.1

41.6

32.6

8.0

39.6

40.0

49.8

15.2

33.8

26.1

6.7

343.0

176.9

260.5

96.8

156.3

89.7

75.4

309.6

198.0

323.6

93.1

118.3

91.1

50.8

117.4

85.6

112.2

101.5

56.8

83.9

47.0

140.5

75.3

130.7

99.0

50.1

61.3

42.7

Total business segments

239.2

211.2

1,198.7

1,184.5

604.5

599.6

* Due to a change in the structure of the internal organization, Southeast Asia was allocated to the EEMEA region and the

prior-year figures were adjusted accordingly

** Due to a change in the internal reporting structure in financial year 2020, the previous year's figures have been adjusted by

reclassifying €14.8 million from EBIT of the stichd business segment to other business segments.

237

Annual Report 2020 ↗ Consolidated Financial Statements

↗ T.62 CONTINUATION T.62 REGIONS (€ million)

Europe

EEMEA*

North America

Latin America

Greater China

Asia/ Pacific (without Greater China) *

stichd

Total business segments

Long-term Assets

1-12/2020

1-12/2019

421.5

114.6

495.1

63.7

86.1

162.2

176.8

284.8

143.1

445.1

80.9

93.9

150.5

162.2

1,520.1

1,360.5

* Due to a change in the structure of the internal organization, Southeast Asia was allocated to the EEMEA region and the

prior-year figures were adjusted accordingly

↗ T.63 PRODUCT External Sales (€ million) Gross Profit Margin (in %)

Footwear

Apparel

Accessories

Total

External Sales

Gross Profit Margin

1-12/2020

1-12/2019

1-12/2020

1-12/2019

2,367.6

2,552.5

1,974.1

2,068.7

892.7

881.1

45.7%

48.5%

47.0%

46.4%

51.1%

50.5%

5,234.4

5,502.2

47.0%

48.8%

238

RECONCILIATIONS

↗ T.64 RECONCILIATIONS (€ million)

Total business segments

Central areas

Central expenses Marketing

Consolidation

EBIT

Financial result

EBT

Annual Report 2020 ↗ Consolidated Financial Statements

EBIT

1-12/2020

1-12/2019

775.2

1,023.9

-262.3

-303.8

0.0

209.2

-46.8

162.3

-251.1

-332.5

0.0

440.2

-22.6

417.6

Investments

Depreciation

1-12/2020

1-12/2019

1-12/2020

1-12/2019

Total business segments

110.8

172.0

239.2

211.2

Central areas

Consolidation

Total

36.9

0.0

47.7

0.0

36.5

0.0

35.2

0.0

147.7

219.6

275.7

246.4

Inventories

Trade Receivables (3rd)

Long-term assets

1-12/2020

1-12/2019

1-12/2020

1-12/2019

1-12/2020

1-12/2019

Total business segments

1,198.7

1,184.5

604.5

599.6

1,520.1

1,360.5

Not allocated to the
business segments

Total

-60.7

-74.3

1,138.0

1,110.2

16.5

621.0

12.1

207.9

208.0

611.7

1,728.0

1,568.5

239

Annual Report 2020 ↗ Consolidated Financial Statements

26. 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 ongoing operating activities. The gross cash flow, derived from earnings before income
tax and adjusted for non-cash income and expense items, is determined within the cash flow from ongoing
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.

The financial resource fund reported in the cash flow statement includes all payment methods and
equivalent payment methods shown under “Cash and cash equivalents,” i.e., cash in hand, checks and
current bank balances.

The following table shows the cash and non-cash changes in financial liabilities in accordance with IAS
7.44A:

↗ T.65 RECONCILIATION OF FINANCIAL LIABILITIES TO THE CASH INFLOW/

OUTFLOW FROM FINANCING ACTIVITIES 2020 (€ million)

Financial liabilities

Lease liabilities

Current financial liabilities

Non-current financial
liabilities

Total

Non-cash changes

Notes

As of
Jan. 1, 2020

Currency
changes

Others

Cash changes

As of
Dec. 31, 2020

745.3

10.2

163.3

918.8

-60.5

-1.3

0.0

-61.7

381.8

-135.0

0.0

381.8

112.5

-18.3

-40.7

931.7

121.4

145.0

1,198.1

240

Annual Report 2020 ↗ Consolidated Financial Statements

↗ T.66 RECONCILIATION OF FINANCIAL LIABILITIES TO THE CASH INFLOW/

OUTFLOW FROM FINANCING ACTIVITIES 2019 (€ million)

Financial liabilities

Lease liabilities*

Current financial liabilities

Non-current financial
liabilities

Total

Non-cash changes

Notes

As of
Jan. 1, 2019

Currency
changes

Others

Cash changes

As of
Dec. 31, 2019

623.9

20.5

170.4

814.8

12.2

0.1

0.0

12.3

250.0

-140.8

0.0

-10.4

-7.1

250.0

-158.4

745.3

10.2

163.3

918.8

* adjusted opening values (please refer to chapter 1 first-time application IFRS 16)

The lease liabilities of €931.7 million (previous year: €745.3 million) break down into current lease
liabilities of €156.5 million (previous year: €144.8 million) and non-current lease liabilities of €775.2 million
(previous year: €600.5 million).

The non-current financial liabilities of €145.0 million (previous year: €163.3 million) are part of the other
non-current financial liabilities.

27. CONTINGENCIES

CONTINGENCIES

As in the previous year, there were no reportable contingencies.

241

Annual Report 2020 ↗ Consolidated Financial Statements

28. OTHER FINANCIAL OBLIGATIONS

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:

↗ T.67 (€ million)

Under license, promotional and advertising agreements:

2021 (2020)

2022 – 2025 (2021 – 2024)

from 2026 (from 2025)

Total

2020

2019

286.1

617.6

244.4

277.6

613.7

336.4

1,148.1

1,227.8

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 €202.3 million, of which €140.1 million relate to the
years from 2022. These include service agreements of €167.3 million as well as other obligations of
€35.0 million.

29. DISCLOSURES RELATED TO 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 figures represent the amounts
before intercompany eliminations.

Evaluation of the control of companies with non-controlling interests:

The Group holds a 51% capital share in PUMA United North America LLC, PUMA United Canada ULC and
Janed Canada LLC (inactive company). With these companies, there are profit-sharing arrangements in
place which differ from the capital share for the benefit of the respective identical non-controlling
shareholder. PUMA receives higher license fees in exchange.

The contractual agreements with these companies respectively provide for PUMA a majority of the voting
rights at the shareholder meetings and thus the right of disposal regarding these companies. PUMA is
exposed to fluctuating returns from the turnover-based license fees and controls the relevant activities of
these companies. The companies are accordingly included in the consolidated financial statements as
subsidiaries with full consolidation with recognition of the shares of non-controlling interests.

The share of non-controlling interests existing on the balance sheet date relates to PUMA United North
America LLC, PUMA United Canada ULC and Janed Canada, LLC (inactive) with €41.5 million (previous
year: €46.7 million).

242

↗ T.68 (€ million)

Current assets

Non-current assets

Current liabilities

Non-current liabilities

Equity attributable to equity holders of the parent

Non-controlling interests

↗ T.69 (€ million)

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

↗ T.70 (€ million)

Net cash from operating activities

Net cash used in investing activities

Net cash used in financing activities

Changes in cash and cash equivalents

Annual Report 2020 ↗ Consolidated Financial Statements

12/31/2020

12/31/2019

51.9

3.5

14.6

0.0

40.8

41.5

2020

258.0

40.1

44.2

-3.9

40.4

45.6

2020

48.4

0.0

-49.2

-0.8

82.2

3.8

35.5

0.0

50.6

46.7

2019

298.3

47.1

46.6

0.3

46.9

18.6

2019

23.8

0.0

-23.4

0.1

243

Annual Report 2020 ↗ Consolidated Financial Statements

30. MANAGEMENT BOARD AND SUPERVISORY BOARD

Disclosures pursuant to Section 314 (1) No. 6 HGB (German Commercial Code [Handelsgesetzbuch])

Pursuant to Sections 286 (5), 314 (3) Sentence 1 HGB, the publication of the individual remuneration of the
members of the Management Board in accordance with Section 285 No. 9 a) Sentences 5 to 8 and Section
314 (1) No. 6 a) Sentences 5 to 8 HGB may be waived for five years if the Annual General Meeting so
resolves.

By resolution of the Annual General Meeting on April 12, 2018, the Company was authorized to waive the
disclosure requirements pursuant to Section 285 No. 9 a) Sentences 5 to 8 and Section 314 (1) No. 6 a)
Sentences 5 to 9 of the German Commercial Code for the financial year beginning January 1, 2018 and for
all subsequent financial years ending December 31, 2022 at the latest.

The Supervisory Board is of the opinion that the shareholders' legitimate interest in information is
sufficiently taken into account by disclosing the total remuneration of the members of the Management
Board. In accordance with its statutory obligations, the Supervisory Board will ensure the appropriateness
of individual remuneration.

COMPENSATION PHILOSOPHY

GOVERNANCE IN COMPENSATION MATTERS

244

Annual Report 2020 ↗ Consolidated Financial Statements

OVERVIEW OF COMPENSATION ELEMENTS

↗ G.01 TARGET COMPENSATION STRUCTURE

CHANGE IN COMPENSATION COMPONENTS IN 2020 DUE TO THE COVID-19 PANDEMIC AND LOAN
COMMITMENTS FROM KFW BANKENGRUPPE

245

Annual Report 2020 ↗ Consolidated Financial Statements

TARGET COMPENSATION STRUCTURE

NON-PERFORMANCE-BASED COMPENSATION AND FRINGE BENEFITS

Short-term variable Compensation — Bonus
All members of the Management Board waived short-term variable compensation for the financial year
2020.

However, the short-term variable compensation system as it would have been applied if the Management
Board had not waived it in 2020 is described below for the sake of completeness.

As part of the performance-based compensation, the bonus is primarily based on the financial goals of the
operating result (EBIT) and free cash flow (FCF) of the PUMA Group and the individual performance of the
respective Management Board member as well as the attainment of Group-wide sustainability targets. The
two financial success targets are weighted with 60% for EBIT and 20%, respectively, for FCF. The individual
performance is included in the calculation with a weighting of 15%. The degree to which the sustainability
targets have been achieved is taken into account in the calculation with a weighting of 5%. If 100% of the
target is achieved ("target bonus"), the amount of the bonus is 100% of the annual basic compensation for
the Chair of the Management Board and the Management Board members.

246

Annual Report 2020 ↗ Consolidated Financial Statements

↗ G.02 STI-PLAN

↗ G.03 TARGET ATTAINMENT CURVE EBIT/FCF

247

Annual Report 2020 ↗ Consolidated Financial Statements

248

Annual Report 2020 ↗ Consolidated Financial Statements

MANAGEMENT BOARD COMPENSATION

The following tables show the compensation paid during the financial year and inflows during or for the
reporting year and the total related pension expenses for all Management Board members. *

↗ T.71 COMPENSATION PAID (€ million)

Basic Compensation

Fringe Benefits

Total

Short-term variable compensation

Long-term variable share-based compensation

LTI 2019 (2019 to 2021)

Total variable compensation

Pension expenses

Total compensation

2019

2020

2020 (min)

2020 (max)

2.0

0.1

2.1

2.7

3.9

6.6

0.4

9.1

1.7

0.1

1.8

0.0

0.4

2.2

1.7

0.1

1.8

0.0

0.4

2.2

1.7

0.1

1.8

0.0

0.4

2.2

* The grants and inflows shown below include the portion of the compensation of Ms. Anne-Laure Descours granted to

Ms. Descours for her services as a member of the Management Board of PUMA SE . In addition, Ms. Descours receives
compensation for her function as General Manager PUMA Group Sourcing of World Cat Ltd, Hong Kong, a subsidiary of
PUMA SE.

↗ T.72 INFLOW (€ million)

Basic Compensation

Fringe Benefits

Total

Short-term variable compensation

Long-term variable share-based compensation

LTI 2016 (2016 to 2018)

LTI 2017 (2017 to 2019)

Total variable compensation

Pension expenses

Total compensation

2019

2020

2.0

0.1

2.1

2.7

1.7

4.3

0.4

6.8

1.7

0.1

1.8

2.6

6.7

16.0

0.4

18.3

When adding the individual items, there may be slight deviations as a result of rounding.

249

Annual Report 2020 ↗ Consolidated Financial Statements

€13.0 million as of December 31, 2020 (previous year: €10.8 million) was netted against the equally high
and pledged asset value of the pension liability insurance on the balance sheet. The majority of the present
value is attributable to the pension benefits financed by deferred compensation.

COMPENSATION FOR FORMER MANAGEMENT BOARD MEMBERS

In the reporting year, €0.8 million was spent on pro-rata basic compensation, pro-rata fringe benefits and
short-term and long-term variable compensation for former members of the Management Board.

SUPERVISORY BOARD COMPENSATION SYSTEM

In the reporting year, all members of the Supervisory Board waived part of their annual compensation. The
following describes the Supervisory Board compensation system if no components are waived.

The Supervisory Board compensation conforms to § 15 of the Articles of Association, according to which
each Supervisory Board member receives a fixed annual compensation of €25,000.00. This amount is
payable after the Annual General Meeting for the respective financial year. In addition to the fixed, annual
compensation, the members of the Supervisory Board are entitled to an increase of their fixed
compensation based on their position on the board and their membership of committees. The Chair of the
Supervisory Board and the Vice Chair receive an additional fixed annual amount of €25,000.00 and
€12,500.00, respectively. The chair of a committee additionally receives €10,000.00, and the members of a
committee €5,000.00, respectively. The respective committees are the Personnel Committee, the Audit
Committee and the Sustainability Committee.

A member of the Supervisory Board who is only active for part of a financial year receives prorated
remuneration calculated on the basis of the period of activity determined for full months.

250

Annual Report 2020 ↗ Consolidated Financial Statements

SUPERVISORY BOARD COMPENSATION

The compensation for the Supervisory Board for financial years 2019 and 2020 are shown in the table below.

↗ T.73 SUPERVISORY BOARD COMPENSATION (€ million)

Total

Fixed compensation

Committee compensation

Total

2019

0.2

2020

0.1

2019

0.0

2020

0.0

2019

0.2

2020

0.1

31. RELATED PARTY RELATIONSHIPS

In accordance with IAS 24, relationships to related companies and persons that control or are controlled by
the PUMA Group must be reported. All natural persons and companies that can be controlled by PUMA, that
can exercise relevant control over the PUMA Group or that are under the relevant control of another related
party of the PUMA Group are considered as related companies or persons within the meaning of IAS 24.

As of December 31, 2020, there was one shareholding in PUMA SE that exceeded 10% of the voting rights.
This is held by the Pinault family via several companies that the family controls (in order of proximity to the
Pinault family: Financière Pinault S.C.A., Artémis S.A.S. and Kering S.A.). The shareholding of Kering S.A. in
PUMA SE amounts to 9.8% of share capital according to Kering’s press release from October 6, 2020.
Together, Artémis S.A.S. and Kering S.A. hold 38.4% of the share capital. Since Artémis S.A.S. and Kering
S.A. hold more than 20% of the voting rights in PUMA SE, they are presumed to have significant influence
according to IAS 28.6. They and all other companies directly or indirectly controlled by Artémis S.A.S. that
are not included in the consolidated financial statements of PUMA SE are considered as related parties in
the following.

In addition, the disclosure obligation pursuant to IAS 24 extends to transactions with associated companies
as well as transactions with other related companies and persons. These include non-controlling
shareholders in particular.

Transactions with related companies and persons largely concern the sale of goods and services. These
were concluded under normal market conditions that are also customary with third parties.

251

Annual Report 2020 ↗ Consolidated Financial Statements

The following overview illustrates the scope of the business relationships:

↗ T.74 (€ million)

Companies included in the Artémis Group

Companies included in the Kering Group

Other related companies and persons

Total

↗ T.75 (€ million)

Companies included in the Artémis Group

Companies included in the Kering Group

Other related companies and persons

Total

Deliveries and services
rendered

Deliveries and services
received

2020

2019

2020

2019

0.0

1.7

0.0

1.7

0.0

2.2

0.0

2.2

0.0

0.2

17.1

17.3

0.0

0.4

18.5

18.9

Net receivables from

Liabilities to

2020

2019

2020

2019

0.0

5.5

0.0

7.9

In addition, dividend payments of €45.6 million were made to non-controlling shareholders in the financial
year 2020 (previous year: €18.6 million).

Receivables from related companies and persons 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, 2020 (previous year: €52.2 million). As in the previous year, no expenses were recorded in
this respect in the financial year 2020.

Classification of the remuneration of key management personnel in accordance with IAS 24.17:

The members of key management personnel in accordance with IAS 24 are the Management Board and the
Supervisory Board. These are counted as related parties.

In the financial year 2020, the expenses for key management personnel of PUMA SE for short-term benefits
amounted to €2.7 million (previous year: €5.9 million) and for share-based compensation €0.0 million
(previous year: €3.9 million). In addition, no expenses were incurred for other long-term benefits or for
benefits due to the termination of employment in the reporting year (previous year: €0.5 million).
Accordingly, total expenses for the reporting year amount to €2.7 million (previous year: €10.3 million).

The compensation report of PUMA SE contains further details on the compensation of the Management
Board and the Supervisory Board.

252

Annual Report 2020 ↗ Consolidated Financial Statements

32. CORPORATE GOVERNANCE

In November 2020, 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 statement in accordance with section 289f and section 315d HGB (Handelsgesetzbuch, German
Commercial Code) in the Combined Management Report.

33. EVENTS AFTER THE BALANCE SHEET DATE

The syndicated credit line of €200 million from 11 commercial banks and the Kreditanstalt für Wieder-
aufbau (KfW) existing as of December 31, 2020, which was concluded as "bridge financing" against possible
cash shortfalls due to the COVID-19 pandemic, was terminated on February 1, 2021 and is no longer
available as of February 15, 2021. The termination took place because PUMA was already able to refinance
itself in the 2020 financial year through a new promissory note loan (€250.0 million) with a term of 3
respectively 5 years and an increase of the syndicated credit facility previously amounting to €350.0 million
to a new €800.0 million.

34. DATE OF RELEASE

The Management Board of PUMA SE released the consolidated financial statements on February 2, 2021 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, February 2, 2021

The Management Board

Gulden

Lämmermann

Descours

This is a translation of the German version. In case of doubt, the German version shall apply.

253

Annual Report 2020 ↗ Consolidated Financial Statements

APPENDIX 1 OF THE CONSOLIDATED FINANCIAL STATEMENTS

↗ T.76 CHANGES IN FIXED ASSETS 2019 (€ million)

Purchase costs

Accumulated depreciation

Carrying amounts

Currency
changes
and other
changes

Changes
in group of
consolidated
companies

Additions/
retransfers

Balance
1/1/2019

Disposals

Balance
12/31/2019

Balance
1/1/2019

Currency
changes
and other
changes

Changes
in group of
consolidated
companies

Additions/
retransfers1)

Disposals

Balance
12/31/2019

Balance
12/31/2018

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

169.0

3.0

-0.7

171.3

-47.7

-0.1

-6.2

0.6

-53.4

117.9

121.4

22.5

-1.6

0.5

-0.2

21.3

-10.2

0.8

-2.3

0.2

-11.5

9.8

20.8

404.1

18.6

93.7

-27.6

488.7

-266.8

-4.7

-66.4

24.4

-313.4

175.3

137.3

15.2

-13.2

90.6

-0.9

91.7

15.2

610.8

3.8

187.8

-29.3

773.1

-324.7

-4.0

-74.9

25.2

-378.3

394.8

294.6

254

Purchase costs

Accumulated depreciation

Carrying amounts

Currency
changes
and other
changes

Changes
in group of
consolidated
companies

Additions/
retransfers

Balance
1/1/2019

Disposals

Balance
12/31/2019

Balance
1/1/2019

Currency
changes
and other
changes

Changes
in group of
consolidated
companies

Additions/
retransfers1)

Disposals

Balance
12/31/2019

Balance
12/31/2018

Annual Report 2020 ↗ Consolidated Financial Statements

409.6

8.2

97.7

-6.5

509.0

-90.3

1.0

-89.3

419.6

188.9

4.0

143.6

-4.5

332.0

-0.1

-51.0

0.8

-50.3

281.7

18.0

7.8

-1.0

24.8

616.5

12.3

249.0

-12.1

865.7

-0.8

-6.7

-0.1

-148.0

0.4

2.2

-7.0

17.7

-146.7

719.0

290.5

4.1

294.6

-44.8

-0.1

-44.9

249.7

245.7

141.8

2.4

144.2

-17.7

126.5

124.2

183.7

616.0

3.0

9.5

31.8

-2.4

216.1

-116.1

654.9

-178.6

-0.3

-0.5

-23.5

2.2

-137.8

78.3

67.5

-200.4

454.5

437.4

RIGHT-OF-USE
ASSETS

Real Estate –
Retail stores

Real Estate –
Warehouses &
offices

Others (technical
equipment
and machines and
vehicles)

INTANGIBLE
ASSETS

Goodwill

Intangible assets
with an indefinite
useful life

Other intangible
assets

In the financial year 2019 there was no impairment on property, plant and equipment (previous year: € 0.6 million, see chapter 9), on right-of-use assets (see chapter 10) and on intangible assets (see chapter 11).

255

↗ T.77 CHANGES IN FIXED ASSETS 2020 (€ million)

Purchase costs

Accumulated depreciation

Carrying amounts

Currency
changes
and other
changes

Changes
in group of
consolidated
companies

Additions/
retransfers

Balance
1/1/2020

Disposals

Balance
12/31/2020

Balance
1/1/2020

Currency
changes
and other
changes

Changes
in group of
consolidated
companies

Additions/
retransfers1)

Disposals

Balance
12/31/2020

Balance
12/31/2019

Annual Report 2020 ↗ Consolidated Financial Statements

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

171.3

13.2

6.4

-0.6

190.3

-53.4

0.9

-6.5

0.5

-58.3

131.9

117.9

21.3

-1.0

0.9

-0.1

21.1

-11.5

0.6

-2.0

0.1

-12.8

8.4

9.8

488.7

-18.5

51.8

-27.1

494.9

-313.4

20.1

-72.4

25.3

-340.4

154.6

175.3

91.7

-31.8

53.6

-1.5

112.0

91.7

773.1

-38.1

112.7

-29.3

818.3

-378.3

21.7

-80.9

25.9

-411.4

406.9

394.8

256

Purchase costs

Accumulated depreciation

Carrying amounts

Currency
changes
and other
changes

Changes
in group of
consolidated
companies

Additions/
retransfers

Balance
1/1/2020

Disposals

Balance
12/31/2020

Balance
1/1/2020

Currency
changes
and other
changes

Changes
in group of
consolidated
companies

Additions/
retransfers1)

Disposals

Balance
12/31/2020

Balance
12/31/2019

Annual Report 2020 ↗ Consolidated Financial Statements

509.0

-42.7

84.1

-13.2

537.2

-89.3

10.8

-114.4

10.9

-182.0

355.2

419.6

332.0

-76.2

321.1

-10.4

566.5

-50.3

8.8

-64.3

3.6

-102.2

464.3

281.7

24.8

45.4

6.0

-2.7

73.4

-7.0

-3.2

-7.7

2.6

-15.3

58.1

17.7

865.7

-73.4

411.2

-26.3

1,177.2

-146.7

16.5

-186.4

17.1

-299.6

877.6

719.0

294.6

-6.3

288.3

-44.9

-1.9

-46.8

241.4

249.7

144.2

-10.6

133.6

-17.7

115.9

126.5

216.1

-3.9

654.9

-20.8

34.8

-6.4

240.6

-137.8

662.5

-200.4

3.0

-24.4

-26.3

4.7

-154.6

86.1

78.3

-219.1

443.4

454.5

RIGHT-OF-USE
ASSETS

Real Estate –
Retail stores

Real Estate –
Warehouses &
offices

Others (techniqual
equipment and
machines and
vehicles)

INTANGIBLE
ASSETS

Goodwill

Intangible assets
with an indefinite
useful life

Other intangible
assets

In the financial year 2020 there was no impairment on property, plant and equipment (previous year: € 0.0 million, see chapter 9), impairment on right-of-use assets of € 16.1 million (previous year: € 0.0 million, see
chapter 10) and impairment on intangible assets of € 1.9 million (previous year: € 0.0 million, see chapter 11).

257

Annual Report 2020 ↗ Consolidated Financial Statements

APPENDIX 2 OF THE CONSOLIDATED FINANCIAL STATEMENTS

MEMBERS OF THE MANAGEMENT BOARD AND SUPERVISORY BOARD AND THEIR MANDATES
STATUS: DECEMBER 31, 2020

MEMBERS OF THE MANAGEMENT BOARD AND THEIR MANDATES

Bjørn Gulden
Chief Executive Officer (CEO)

Membership of other supervisory boards and controlling bodies:

• Salling Group A/S, Brabrand/Denmark (Chairman)
• Borussia Dortmund GmbH & Co. KGaA, Dortmund
• Tchibo GmbH, Hamburg

Michael Lämmermann
Chief Financial Officer (CFO)

Anne-Laure Descours
Chief Sourcing Officer (CSO)

MEMBERS OF THE SUPERVISORY BOARD AND THEIR MANDATES

Jean-François Palus
(Chairman)
Paris, France

Group Managing Director and member of the Board of Directors of Kering S.A., Paris/France, responsible
for Strategy, Operations and Organization

Membership of other supervisory boards and controlling bodies:1)

• Kering Americas, Inc., New York/USA
• Kering Tokyo Investment Ltd., Tokyo/Japan
• Sowind Group S.A., La Chaux-de-Fonds/Switzerland
• Guccio Gucci S.p.A., Florence/Italy
• Gucci America, Inc., New York/USA
• 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
• Kering Asia Pacific Ltd., Hong-Kong/China
• Kering South East Asia PTE Ltd., Singapore
• Boucheron S.A.S., Paris/France

1) All mandates of Mr Palus are mandates within the Kering-Group. Kering S.A. is a listed company.

All other companies within the Kering-Group are not listed.

258

Annual Report 2020 ↗ Consolidated Financial Statements

Thore Ohlsson
(Deputy Chairman)
Falsterbo, Sweden

President of Elimexo AB, Falsterbo/Sweden

Membership of other supervisory boards and controlling bodies:

• Elite Hotels AB, Stockholm/Sweden
• Tomas Frick AB, Vellinge/Sweden
• Tjugonde AB, Malmö/Sweden
• Dofab AB, Malmö/Sweden
• Orrefors Kosta Boda AB, Kosta/Sweden

Héloïse Temple-Boyer (member since April 18, 2019)
Paris, France

Deputy CEO of ARTÉMIS S.A.S., Paris/France

Membership of other supervisory boards and controlling bodies 2):

• Kering S.A., Paris/France
• Giambattista Valli S.A.S., Paris/ France
• Société d’exploitation de l’hebdomadaire le Point S.A., Paris/France
• Royalement Vôtre Editions S.A.S., Paris/France
• ACHP Plc, London/United Kingdom
• Christie’s International Plc, London/United Kingdom
• Palazzo Grassi S.p.A., Venice/Italy
• Compagnie du Ponant S.A.S., Marseille/France

Fiona May (member since April 18, 2019)
Calenzano, Italy

Independent Management Consultant

Membership of other supervisory boards and controlling bodies:

• R.C.S. Media Group Active Team Srl, Milano/Italy

Martin Koeppel
(Employees’ Representative)

Weisendorf, Germany

Chairman of the Works Counsel of PUMA SE

2) All mandates are mandates within the ARTÈMIS-Group. Kering S.A. is a listed company.

259

Annual Report 2020 ↗ Consolidated Financial Statements

Bernd Illig
(Employees’ Representative)

Bechhofen, Germany

Administrator IT Systems of PUMA SE

SUPERVISORY BOARD COMMITTEES

Personnel Committee
• Jean-François Palus (Chairman)
• Fiona May
• Martin Köppel

Audit Committee
• Thore Ohlsson (Chairman)
• Héloïse Temple-Boyer
• Bernd Illig

Nominating Committee
• Jean-François Palus (Chairman)
• Héloïse Temple-Boyer
• Fiona May

260

Annual Report 2020 ↗ Consolidated Financial Statements

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 operations 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 2020, 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, February 2, 2021

The Management Board

Gulden

Lämmermann

Descours

261

Annual Report 2020 ↗ Consolidated Financial Statements

INDEPENDENT AUDITOR’S REPORT

To PUMA SE, Herzogenaurach/Germany

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, Herzogenaurach/Germany, and its
subsidiaries (“PUMA” or “the Group”) which comprise the consolidated balance sheet as at 31 December
2020, and the consolidated income statement, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the financial
year from 1 January to 31 December 2020, and the notes to the consolidated financial statements, including
a summary of significant accounting policies. In addition, we have audited the combined management
report for the parent and the group (“combined management report”) of PUMA SE,
Herzogenaurach/Germany, for the financial year from 1 January to 31 December 2020. In accordance with
the German legal requirements, we have not audited the content of the consolidated corporate governance
statement included in the section “Corporate governance statement in accordance with Section 289f and
Section 315d German Commercial Code (HGB)” of the combined management 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) 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 2020 and of its financial performance for the financial year from 1 January to 31 December
2020, 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 consolidated corporate governance statement included in the section
“Corporate governance statement in accordance with Section 289f and Section 315d German
Commercial Code (HGB)” of the combined management report.

Pursuant to Section 322 (3) sentence 1 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 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

262

Annual Report 2020 ↗ Consolidated Financial Statements

responsibilities 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 judgement, were of most significance in our
audit of the consolidated financial statements for the financial year from 1 January to 31 December 2020.
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 separate 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

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 241.5
corresponding to approximately 5.2% of the consolidated balance sheet total or 13.7% of the group equity.

Each financial year or in case of signs of impairment, goodwill is subject to impairment tests. The
impairment tests are performed by PUMA SE applying the “discounted cash flow method”. The valuations
are based on the present values of the future cash flows which are in turn based on the three-year plan
(detailed planning horizon) valid at the date of the impairment test. This detailed planning horizon is
subsequently extended assuming long-term growth rates. Discounting is performed using the weighted
average cost of capital (WACC). Here, the recoverable 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 executive directors’ assessment of future cash inflows,
the long-term growth rates as well as the WACC rates applied for discounting and therefore involves uncer-
tainties 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 executive directors, is disclosed in chapter 2 “Significant
consolidation, accounting and valuation principles” and in chapter 11 “Intangible assets” of the notes to the
consolidated financial statements.

b) Within the scope of our risk-based audit approach, we particularly gained an understanding of the
systematic approach applied when performing the impairment tests. 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 taken over and whether the
calculations within the model are performed correctly. We assured ourselves of the appropriateness of the
future cash inflows used for the computation by particularly reconciling these cash flows with the current
three-year plan, as well as by interviewing the executive directors or persons appointed by them with

263

Annual Report 2020 ↗ Consolidated Financial Statements

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 respective value in use results from the forecast cash inflows for the period
after the three-year planning horizon (phase of perpetuity), we in particular performed a critical
assessment of the sustainable growth rate used within the perpetuity phase by means of general and
industry-specific market expectations. Since relatively low changes of the discount rate used may already
have a material effect on the amount of the recoverable amount, we also validated the parameters used for
determining the discount rate (WACC = weighted average cost of capital) involving internal experts from the
financial advisory sector and reproduced the computation scheme.

Due to the possibly material significance and taking into account the fact that the valuation of the goodwill
also depends on the economic framework conditions that cannot be influenced by the Group, we
additionally performed a critical assessment of the sensitivity analyses performed by PUMA SE for the
cash-generating units (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) For the Cobra brand, the consolidated financial statements of PUMA SE disclose a brand value in the
amount of mEUR 115.9 with an indefinite useful life, which corresponds to approximately 2.5% of the
consolidated balance sheet total or 6.6% 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 royalties that a company would have to pay for the use
of the brand if they had to license it. The approach uses forecast revenue generated from the Cobra brand
based on the effective three-year plan (detailed planning horizon) valid at the time the impairment test is
conducted. This detailed planning horizon is subsequently extended assuming long-term growth rates.
Discounting is performed using the weighted average cost of capital (WACC). Here, the recoverable 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. If there are indications of impairment of the brand
used by the Group itself, the recoverability of the brand is evaluated 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 executive directors’ assessment of the future revenue
generated from the Cobra brand, the royalty rate, the long-term growth rate as well as the WACC rate
applied for discounting and therefore involves uncertainties and discretion. Thus, 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 executive directors, is disclosed in chapter 2 “Significant
consolidation, accounting and valuation principles” and in chapter 11 “Intangible assets” of the notes to the
consolidated financial statements.

b) As part of our risk-based audit approach, we first examined on the basis of the information available to
us and in discussions with the executive directors and with persons appointed by them, that there are no
indications of impairment of the brand used by the Group itself and that the recoverability of the brand can
be assessed separately by use of the relief-from-royalty method as part of the impairment test. We have
followed the methodological 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 (Cobra branded sales) on which the computation is
based by reconciling these sales particularly with the effective three-year plan as well as by interviewing
the executive directors and 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

264

Annual Report 2020 ↗ Consolidated Financial Statements

industry-specific market expectations. Since a material portion of the value in use results from the forecast
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. We critically assessed the used royalty rate by based on
average industry rates.

Due to the potential material significance and as the measurement of the brand also depends on general
economic conditions that are beyond the Group’s control, we additionally critically assessed the sensitivity
analyses concerning the Cobra brand 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 executive directors and the supervisory board are responsible for the other information. The other
information comprises:

• the report of the supervisory board,
• the consolidated corporate governance statement pursuant to Section 315d HGB included in the section

“Corporate governance statement in accordance with Section 289f and Section 315d German
Commercial Code (HGB)” of the combined management report,

• the executive directors’ confirmation pursuant to Section 297 (2) sentence 4 and Section 315 (1) sentence
5 HGB, respectively, regarding the consolidated financial statements and the combined management
report,

• the separate combined non-financial statement which will be published after the issuance of this

auditor’s report, and

• all other parts of the annual report which will be published after the issuance of this auditor’s report,
• but not the consolidated financial statements, not the audited content of the group management report

and not our auditor’s report thereon.

The supervisory board is responsible for the report of the supervisory board. The executive directors and
the supervisory board as well are responsible for the declaration according to Section 161 German Stock
Corporation Act (AktG), which is part of the corporate governance statement pursuant to Section 289f and
Section 315d HGB included in the section “Corporate governance statement in accordance with Section 289f
and Section 315d German Commercial Code (HGB)” of the combined management report. Otherwise, the
executive directors are responsible for the other information.

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.

265

Annual Report 2020 ↗ Consolidated Financial Statements

In connection with our audit, our responsibility is to read the other information stated above and, in so
doing, to consider whether the other information

• is materially inconsistent with the consolidated financial statements, with the audited content of the

combined management report or our knowledge obtained in the audit, or

• otherwise appears to be materially misstated.

RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS AND THE SUPERVISORY BOARD FOR THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE COMBINED MANAGEMENT REPORT

The executive directors are responsible for the preparation of the consolidated financial statements that
comply, in all material respects, with IFRS as adopted by the EU and the additional requirements of German
commercial law pursuant to Section 315e (1) 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 executive directors 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 executive directors 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.

Furthermore, the executive directors 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 executive
directors 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 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.

266

Annual Report 2020 ↗ Consolidated Financial Statements

We exercise professional judgement and maintain professional scepticism 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 controls.

• 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 executive directors and the

reasonableness of estimates made by the executive directors and related disclosures.

• conclude on the appropriateness of the executive directors’ 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 opinions. 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
IFRS as adopted by the EU and with the additional requirements of German commercial law pursuant to
Section 315e (1) 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, supervision and performance 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 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 the auditor’s report unless law or regulation
precludes public disclosure about the matter.

267

Annual Report 2020 ↗ Consolidated Financial Statements

OTHER LEGAL AND REGULATORY REQUIREMENTS

REPORT ON THE AUDIT OF THE ELECTRONIC FILES OF THE CONSOLIDATED FINANCIAL STATEMENTS
AND OF THE COMBINED MANAGEMENT REPORT PREPARED FOR PUBLICATION PURSUANT TO SECTION
317 (3B) HGB

AUDIT OPINION

In accordance with Section 317 (3b) HGB, we have assessed with reasonable assurance whether the
electronic files of the consolidated financial statements and of the combined management report (hereafter
referred to as “ESEF files”) prepared for publication, contained in the accompanying file, which has the
SHA-256 value 7BE69424E242C20952ED8ECCAB6CFF8D4AB508CA52E98846CC3C5097B4CA1944, meet, in
all material respects, the requirements concerning the electronic reporting format (“ESEF format”)
pursuant to Section 328 (1) HGB. In accordance with the German legal requirements, this audit only covers
the transfer of the consolidated financial statements’ and the combined management report’s information
into the ESEF format, and therefore covers neither the information contained in these electronic files nor
any other information contained in the file stated above.

In our opinion, the electronic files of the consolidated financial statements and of the combined
management report prepared for publication contained in the accompanying file stated above meet, in all
material respects, the requirements concerning the electronic reporting format pursuant to Section 328 (1)
HGB. Beyond this audit opinion and our audit opinions on the accompanying consolidated financial
statements and on the accompanying combined management report for the financial year from 1 January to
31 December 2020 contained in the above “Report on the Audit of the Consolidated Financial Statements
and of the Combined Management Report”, we do not express any audit opinion on the information
contained in these electronic files and on any other information contained in the file stated above.

BASIS FOR THE AUDIT OPINION

We conducted our audit of the electronic files of the consolidated financial statements and of the combined
management report contained in the accompanying file stated above in accordance with Section 317 (3b)
HGB and on the basis of the IDW Draft Auditing Standard: Audit of the Electronic Files of the Annual
Financial Statements and of the Management Report prepared for Publication pursuant to Section 317 (3b)
HGB (IDW Draft AuS 410). Our responsibilities in this context are further described in the section “Auditor’s
Responsibilities for the Audit of the ESEF Files”. Our audit firm has applied the Quality Assurance Standard:
Quality Assurance Requirements in Audit Practices (IDW QS 1) promulgated by the Institut der
Wirtschaftsprüfer (IDW).

RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS AND THE SUPERVISORY BOARD FOR THE ESEF FILES

The executive directors of the parent are responsible for the preparation of the ESEF files based on the
electronic files of the consolidated financial statements and of the combined management report according
to Section 328 (1) sentence 4 no. 1 HGB and for the tagging of the consolidated financial statements
according to Section 328 (1) sentence 4 no. 2 HGB.

In addition, the executive directors of the parent are responsible for such internal control as they have
determined necessary to enable the preparation of ESEF files that are free from material violations against
the requirements concerning the electronic reporting format pursuant to Section 328 (1) HGB, whether due
to fraud or error.

The executive directors of the parent are also responsible for the submission of the ESEF files together with
the auditor’s report and the accompanying audited consolidated financial statements and the audited
combined management report as well as other documents to be filed with the publisher of the Federal
Gazette.

268

Annual Report 2020 ↗ Consolidated Financial Statements

The supervisory board is responsible for overseeing the preparation of the ESEF files as part of the financial
reporting process.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE ESEF FILES

Our objectives are to obtain reasonable assurance about whether the ESEF files are free from material
violations, whether due to fraud or error, against the requirements pursuant to Section 328 (1) HGB. We
exercise professional judgement and maintain professional scepticism throughout the audit. We also

• identify and assess the risks of material violations against the requirements pursuant to Section 328 (1)
HGB, 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 opinion.

• obtain an understanding of internal control relevant to the audit of the ESEF files 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 controls.

• assess the technical validity of the ESEF files, i.e. whether the file containing the ESEF files meets the

requirements of the Delegated Regulation (EU) 2019/815 in the version applicable as of the balance sheet
date as to the technical specification of this file.

• evaluate whether the ESEF files enable a XHTML copy of the audited consolidated financial statements
and of the audited combined management report whose content is identical with these documents.
• evaluate whether the ESEF files have been tagged using inline XBRL technology (iXBRL) in a way that

enables an appropriate and complete machine-readable XBRL copy of the XHTML copy.

FURTHER INFORMATION PURSUANT TO ARTICLE 10 OF THE EU AUDIT REGULATION

We were elected as group auditor by the annual general meeting on 7 May 2020. We were engaged by the
supervisory board on 15 September 2020. We have been the group auditor of PUMA SE, Herzogenaurach/
Germany, 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).

GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE ENGAGEMENT

The German Public Auditor responsible for the engagement is Dr Thomas Reitmayr.

Munich, February 2, 2021

Deloitte GmbH

Wirtschaftsprüfungsgesellschaft

signed:
(Dr. Thomas Reitmayr)

signed:
(Stefan Otto)

Wirtschaftsprüfer
[German Public Auditor]

269

Annual Report 2020 ↗ Additional Information

ADDITIONAL INFORMATION

271

273

275

278

The PUMA Share

PUMA Year-on-Year Comparison

PUMA Group Development

Imprint

270

Annual Report 2020 ↗ Additional Information

THE PUMA SHARE

The PUMA share had a very positive performance in the financial year 2020. The closing price of PUMA shares on the last trading day in the financial year 2020
(December 30) was € 92.28, which was 35.0% higher than the closing price of the previous year. The market capitalization of the PUMA Group rose accordingly from
€ 10.2 billion at the end of the financial year 2019 to € 13.8 billion at the end of the financial year 2020. PUMA shares started into 2020 at a price of € 68.35. In the
following twelve months, the price ranged between € 42.14 (March 18, 2020 / -38.3%) and € 92.28 (December 30, 2020 / +35.0%). The daily trading volume of PUMA shares
increased from an average of 387 thousand shares in the previous year to an average of 423 thousand shares in the financial year 2020. Compared to the MDAX, which
rose 7.7% in the financial year 2020, the PUMA share performed significantly better.

↗ T.01 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

2020

2019

2018

2017

2016

2015

2014

€

92.28

68.35

42.70

36.30

24.97

19.87

17.26

92.28

72.95

52.50

39.14

24.97

21.29

23.50

42.14

43.00

31.70

24.35

16.82

14.19

15.71

amount in thousands

€

423

0.53

3.50

1.85

387

1.76

4.71

2.22

444

1.25

2.66

1.00

9.09

2.21

0.86

4.17

1.22

0.38

2.48

0.90

-0.66

4.29

1.15

0.42

11.79

12.84

11.52

11.09

11.53

10.84

10.83

0.16

0.50

0.35

1.25**

0.08

0.05

* Disclosures for the prior periods were adjusted retroactively to the 1:10 stock split carried out in the second quarter of 2019

** one/time special dividend

271

Annual Report 2020 ↗ Additional Information

↗ G.01 PUMA SHARE PERFORMANCE / TRADING VOLUME

↗ G.02 SHARE DEVELOPMENT – REBASED

The PUMA share has been registered for the regulated market on German stock exchanges since 1986. It is
listed in the Prime Standard Segment and the Mid-Cap Index MDAX of the German Stock (Deutsche Börse).
Moreover, membership in the FTSE4Good index was once again confirmed.

272 272

Annual Report 2020 ↗ Additional Information

PUMA YEAR-ON-YEAR COMPARISON

↗ T.02 PUMA YEAR-ON-YEAR COMPARISON (in € million)

Sales

Consolidated sales

– Footwear

– Apparel

– Accessories

Result of operations

Gross profit

EBIT

EBT

Net earnings

Profitability

Gross profit margin

EBT margin

Net earnings margin

Return on capital employed (ROCE)

Return on equity (ROE)

Balance sheet information

Shareholders' equity

– Equity ratio

Working capital

– in % of consolidated sales

Cash flow and investments

Gross cash flow

Free cash flow

Investments (before acquisition)

Acquisition investments

2020

2019

Deviation

5,234.4

5,502.2

-4.9%

2,367.6

2,552.5

-7.2%

1,974.1

2,068.7

-4.6%

892.7

881.1

1.3%

2,458.0

2,686.4

-8.5%

209.2

440.2

-52.5%

162.3

417.6

-61.1%

78.9

262.4

-69.9%

47.0%

48.8%

-1.8%pt

3.1%

7.6%

-4.5%pt

1.5%

4.8%

-3.3%pt

15.1%

29.6%

-14.5%pt

4.5%

13.7%

-9.2%pt

1,763.9

1,920.3

-8.1%

37.7%

43.9%

-6.2%pt

465.8

549.4

-15.2%

8.9%

10.0%

-1.1%pt

522.8

704.8

-25.8%

276.0

330.0

-16.4%

151.0

218.4

-30.9%

0.0

1.2

-100.0%

273 273

Employees

Number of employees (annual average)

Sales per employee (k€)

PUMA share

Share price (in €)

Average outstanding shares (in million)

Number of shares outstanding as of Dec, 31 (in million)

Earnings per share (in €)

Market capitalization

Annual Report 2020 ↗ Additional Information

2020

2019

Deviation

13,016

13,348

402.2

412.2

-2.5%

-2.4%

92.28

68.35

35.0%

149.56

149.52

149.58

149.55

0.0%

0.53

1.76

-69.9%

13,804

10,222

35.0%

Average trading volume (amount/day)

422,629

386,863

9.2%

274 274

Annual Report 2020 ↗ Additional Information

PUMA GROUP DEVELOPMENT

↗ T.03 PUMA GROUP DEVELOPMENT (in € million)

Sales

Consolidated sales

– 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

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

5,234.4

5,502.2

4,648.3

4,135.9

3,626.7

3,387.4

2,972.0

2,985.3

3,270.7

3,009.0

-4.9%

18.4%

12.4%

14.0%

7.1%

14.0%

-0.4%

-8.7%

8.7%

11.2%

2,367.6

2,552.5

2,184.7

1,974.5

1,627.0

1,506.1

1,282.7

1,372.1

1,595.2

1,539.5

1,974.1

2,068.7

1,687.5

1,441.4

1,333.2

1,244.8

1,103.1

1,063.8

1,151.9

1,035.6

892.7

881.1

776.1

719.9

666.5

636.4

586.3

549.4

523.6

433.9

2,458.0

2,686.4

2,249.4

1,954.3

1,656.4

1,540.2

1,385.4

1,387.5

1,579.0

1,493.4

47.0%

48.8%

48.4%

47.3%

45.7%

45.5%

46.6%

46.5%

48.3%

49.6%

16.1

209.2

4.0%

162.3

3.1%

78.9

1.5%

25.1

440.2

8.0%

417.6

7.6%

262.4

4.8%

16.3

337.4

7.3%

313.4

6.7%

187.4

4.0%

15.8

244.6

5.9%

231.2

5.6%

135.8

3.3%

15.7

127.6

3.5%

118.9

3.3%

62.4

1.7%

16.5

96.3

2.8%

85.0

2.5%

37.1

1.1%

19.4

128.0

4.3%

121.8

4.1%

64.1

2.2%

20.8

191.4

6.4%

53.7

1.8%

5.3

0.2%

19.2

290.7

8.9%

112.3

3.4%

70.2

2.1%

17.6

333.2

11.1%

320.4

10.6%

230.1

7.6%

275

Annual Report 2020 ↗ Additional Information

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

1,050.2

1,112.1

583.7

640.5

931.2

553.8

822.9

549.1

732.3

493.1

697.6

483.8

599.7

425.3

544.1

415.7

609.3

438.8

550.7

393.8

4,684.1

4,378.2

3,207.2

2,853.8

2,765.1

2,620.3

2,549.9

2,308.5

2,530.3

2,581.8

1,763.9

1,902.3

1,722.2

1,656.7

1,722.2

1,619.3

1,618.3

1,497.3

1,597.4

1,605.2

37.7%

43.4%

53.7%

58.1%

62.3%

61.8%

63.5%

64.9%

63.1%

62.2%

465.8

549.4

1,138.0

1,110.2

503.9

915.1

493.9

778.5

536.6

718.9

532.9

657.0

455.7

571.5

528.4

521.3

623.7

552.5

534.0

536.8

276.0

151.0

330.0

218.4

172.9

130.2

128.5

122.9

49.7

91.1

-98.9

79.5

39.3

96.4

29.2

76.3

-8.2

172.9

16.8

115.3

Expenses

Marketing/retail

Personnel

Balance sheet

Total assets

Shareholders' equity

– Equity ratio

Working capital

– thereof: inventories

Cash flow

Free cash flow

Investments (incl. acquisitions)

Profitability

Return on equity (ROE)

Return on capital employed (ROCE)

15.1%

29.6%

25.8%

20.7%

10.3%

4.5%

13.8%

10.9%

8.2%

3.6%

2.3%

7.9%

4.0%

11.5%

0.4%

5.6%

4.4%

8.6%

14.3%

28.7%

Additional information

Number of employees (year-end)

14,374

14,332

12,894

11,787

11,495

11,351

11,267

10,982

11,290

10,836

Number of employees (annual average)

13,016

13,348

12,192

11,389

11,128

10,988

10,830

10,750

10,935

10,043

276

Annual Report 2020 ↗ Additional Information

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

PUMA share*

Share price (in €)

92.28

68.35

42.70

36.30

24.97

19.87

17.26

23.50

22.49

Earnings per share (in €)

0.53

1.76

1.25

0.91

0.42

0.25

0.43

0.04

0.47

22.50

1.54

Average outstanding shares (in million)

149.56

149.52

149.47

149.43

149.40

149.67

149.81

Number of shares outstanding as of Dec, 31
(in million)

149.58

149.55

149.51

149.46

149.40

149.39

149.35

Market capitalization

13,804

10,222

6,384

5,426

3,730

2,968

2,578

3,511

3,359

3,360

1) EBIT before special items

* Disclosures for the prior periods were adjusted retroactively to the 1:10 stock split carried out in the second quarter of 2019

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IMPRINT

PUBLISHER

PUMA SE

PUMA Way 1

91074 Herzogenaurach

Germany

+49 (0)9132 81-0

www.about.puma.com

CORPORATE
COMMUNICATIONS

Kerstin Neuber

Senior Head of Communications

kerstin.neuber@puma.com

INVESTOR RELATIONS

Gottfried Hoppe

Teamhead Investor Relations & Finance Strategy

gottfried.hoppe@puma.com

PEOPLE & ORGANIZATION

Dietmar Knoess

Global Director People & Organization

dietmar.knoess@puma.com

Annual Report 2020 ↗ Imprint

SUSTAINABILITY

Stefan Seidel

Head of Corporate Sustainability

stefan.seidel@puma.com

DESIGN AND
REALISATION

3st kommunikation GmbH

www.3st.de

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