FOREWORD 04 MISSION 06 MANAGEMENT REPORT 11 SHARE 44 CORPORATE GOVERNANCE REPORT 46 MARKETING 49 CONSOLIIDATED FINANCIAL STATEMENTS 75

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2 049 FOREWORD 04 MISSION 06 MANAGEMENT REPORT 11 Phase IV Start Better Than Expected 11 General Economic Conditions 12 Phase IV Strategy 13 Business Development in Results of Operations 29 Dividend 21 Regional Development 22 Net Assets and Financial Position 24 Cashflow 26 Value-Based Management 28 Product Development and Design 30 Sourcing 31 Employees 33 Risk Management 36 Disclosures pursuant to Section 315 (4) HGB 40 Orders Position 41 Outlook 42 SHARE 44 CORPORATE GOVERNANCE REPORT 46 MARKETING 49 Brand Strategy 51 Marketing 53 Football 55 Golf 57 I m Going 59 Running 61 Moto 63 Urban Mobility 65 Mongolian Shoe BBQ 67 Holiday 69 Retail 71 Corporate Social Responsibility 73 CONSOLIIDATED FINANCIAL STATEMENTS 75 Consolidated Balance Sheet 76 Consolidated Income statement 77 Consolidated Cashflow statement 78 Changes in equity 79 Development of Fixed Assets 80 Notes to the consolidated financial statements 82 Auditors Report 116 REPORT OF THE SUPERVISORY BOARD 117 BOARD OF MANAGEMENT 119

4 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 051 Brand Strategy PUMA seeks to be the most desirable Sportlifestyle company by developing a sustainable, iconic global brand, built upon core values such as design innovation and inclusiveness, and communicated through all consumer touch points, from product to distribution to marketing. The result is a holistic and memorable brand experience that builds meaningful and long-term relationships with consumers. Through the first three phases of PUMA s corporate development plan, the brand embarked on the transition from a rebellious alternative that appealed to a niche consumer to a cool, globally relevant Sportlifestyle brand for a broader audience. With that mission accomplished and Phase IV now fully underway, the next stage of brand development is to reinforce core values while increasing global awareness of our concepts and products. Themes of sophistication, individuality, and cosmopolitanism will be woven together to create a culturally relevant brand story that resonates with our increasingly diverse consumer base.

6 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 053 Marketing PUMA s marketing strategy is to solidify the brand s status as a global icon, requiring the creation of a focused and culturally-relevant message to its consumers. In 2006, this strategy was represented in large global campaigns such as Willkommen zum Fußball and I m Going, which displayed the broad spectrum of Sportlifestyle, from the sports arena to the fashion world. Each campaign communicated the hallmark values of the PUMA brand - innovative design, inclusiveness, sophistication and individuality. In 2007, this message will continue to evolve as PUMA expands its position in the Sportlifestyle market. A new brand campaign will kick-off on TV in Q2 and will be complimented by the continuation of the successful I m Going and Holiday ad campaigns. In addition, 2007 will see the brand launch its sophisticated Urban Mobility collection and the continued development of PUMA s motorsport, golf and football categories.

8 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 055 Football In 2006 the world s attention turned to football, and PUMA as one of the leading football brands was right in the middle of things, starting with our involvement in the African Cup of Nations in Egypt in January all the way through to the final of the World Cup in Germany as one of the leading football brands. The African Cup of Nations provided the platform for the launch of the new v-series performance concept, which was supported with an on-field presence consisting of more PUMA-sponsored teams than any other supplier. The marketing campaign also harnessed the spirit, color and pageantry of Africa on and off the field to continue PUMA s inclusive message. In the summer, the World Cup took center stage as the best teams from around the globe converged on Germany. PUMA rose to the occasion, delivering an innovative product offering that was supported with a tournament-high 12 sponsored teams (including world champion Italy), our largest-ever advertising campaign and a strong on-the-ground brand presence in Germany. Looking just a bit down the road reveals more exciting opportunities for PUMA Football. The 2008 European Championships will be hosted by the PUMA-sponsored nations of Switzerland and Austria, and the 2010 World Cup will be in Africa, a continent that has become closely linked with the PUMA brand. After our success in 2006, we are in a solid position to capitalize on the exciting opportunities ahead and continue the ascension of PUMA Football.

10 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 057 Golf In spring 2006, PUMA launched its first golf collection. PUMA Golf, a line of Footwear, Apparel and Accessories, combines sophistication, styling and color to add excitement to a traditional and staid marketplace. The launch of PUMA Golf was supported by highly visible sports marketing and advertising. On the course, PUMA s player portfolio showcased some of the brightest young stars on tour. Geoff Ogilvy, sported his new PUMA Golf products while marching to victory at the 2006 U.S. Open, the Accenture Match Play Championships and the Grand Slam of Golf, while other notable PUMA athletes such as Erica Blasberg and Nicole Perrot, in the LPGA, and Johan Edfors, on the European Tour, ensured PUMA Golf was visible throughout the year. Player sponsorship was complemented by a television, print and outdoor campaign featuring Ogilvy and Blasberg. In 2007, PUMA Golf will take to the road with its Travel Golf concept. This collection of Footwear, Apparel and Accessories is designed to be an all-in-one solution for anyone who wants to take their golf game with them, whether for business or pleasure. The new line features stylish Apparel and Footwear that all packs up into the statement piece, the Golf Travel Bag.

12 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 059 I m Going In the fall of 2006, PUMA kicked off a new advertising campaign, called I m Going, designed to communicate the brand s more sophisticated and fashion-forward dimension. The striking campaign images showcased an aspirational and premium feel, marking a new direction for PUMA s Apparel advertising. In 2007, the campaign will broaden its focus, showcasing products from the Urban Mobility and Women s emotion collections, while maintaining the same cutting-edge aesthetic.

14 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 061 Running PUMA Running took a significant step forward in 2006 with its Complete Running product range, which aims to making running uncomplicated, stylish and enjoyable. The statement concept and major PR story for Complete Running in 2006 was Train Away. Designed to address the needs of globe-trotting runners, Train Away consisted of an innovative product range smartly designed to be eminently packable for travel and stylish for wearing in an urban environment. The concept was complemented by virtual training tours created for four major cities of the world (London, Berlin, Paris and New York), downloadable onto a runner s mp3 player. More than downloads illustrate the high demand for this innovative concept. The Complete range was also supported with sports marketing centered on athletes from the PUMA-sponsored national teams of Sweden and Jamaica. In particular, PUMA was one of the main sponsors of the European Athletic Championships, held in Gothenburg, which generated significant visibility for PUMA Running across the continent. In 2007, PUMA Complete Running will continue with the mission of making running enjoyable and inclusive, offering a new product range that marries form and function into a sophisticated and functional collection. This includes some of PUMA s most advanced running shoes yet to hit the market.

16 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 063 Moto In 2006 PUMA launched Moto as a successful extension of its industry-leading motorsport category. Moto, with widespread popularity and a reputation for drama and style, provides an opportunity to diversify the product range and appeal to a new consumer segment while further developing PUMA s brand values. PUMA quickly established credibility within the Moto market with the debut of the Moto 1000 performance boot, worn by professional riders on the Moto GP circuit. The technologically advanced boot used innovative design to offer riders a market-leading degree of protection. Drawing inspiration from the performance range and the aesthetic of Moto, PUMA also created a lifestyle collection of design-driven Footwear and Apparel products. In 2007 PUMA will expand its involvement in Moto with a new partnership with Ducati, the iconic Italian motorcycle manufacturer. In addition to supplying the Ducati Moto GP team with race product, PUMA will launch a collection of Ducati co-branded lifestyle Footwear, Apparel and Accessories.

18 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 065 Urban Mobility In 2007 PUMA will continue the Urban Mobility concept that was introduced in 2005 with a new range of Accessories designed for life in an urban center. Our mission is to use PUMA s brand values of sophistication and convenience to develop a product range that addresses some of the practical challenges of city living and transportation. The result is product in which form, function and material choice work together - such as in a wooden belt-buckle to ease the annoyance of security lines in airports - to yield innovative functionality and an eye-catching aesthetic.

20 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 067 Mongolian Shoe BBQ After the successful introduction of PUMA s Mongolian Shoe BBQ in 2005, PUMA expanded the program in the summer of 2006 with a new online store and a fresh silhouette, the RS100. Retaining the inspiration of the original concept, Mongolian Shoe BBQ continues to give consumers a distinctive shoe making experience. The new online store offers a virtual shoe cooking experience inspired by the style of Mongolian Barbeque cuisine. Customers design their own shoe from an assortment of materials and fabrics to cook up a one-of-a-kind pair of Mongolian Shoe BBQ sneakers. Going forward, Mongolian Shoe BBQ will continue to develop as the industry benchmark for customization with new styles and fabric options.

22 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 069 Holiday For the fourth consecutive year, PUMA marketing supported the annual holiday season with a comprehensive advertising campaign. This year s theme was Holiday Heroes and starred award-winning actress Michelle Yeoh in the campaign creative. The program -- which consisted of print, outdoor, online and television executions -- highlighted the beauty and elegance of martial arts combined with the style and sophistication of PUMA products.

24 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 071 Retail PUMA s Retail expansion continued to develop consistently in the past year. In total, 91 Concept Stores were open by the end of The introduction of our new leading Concept Store-Design allows us to better meet the diverse changes in the market and we have moved forward in achieving our goals that we have been pursuing since our first store opening in 1999 creating a holistic PUMA brand experience and mastering the science of retail. This is to say, that our stores aren t just brand museums, but they first-and-foremost should contribute positively to PUMA s profitability. The innovative new store design is the result of our retail-specific knowledge and experience we have accumulated as well as refinement of the PUMA brand since The idea behind the new design features a Ship Container concept. All fixture elements are positioned in the space and can be mixed and matched in different ways giving each store the opportunity to create its own individual style. Additionally the new Concept Store-Design supports the shift to a 4-quarter selling process, which was introduced in The system with its flexible module concept offers our customers a recurring brand experience, enables a quicker product distribution and thus leads to higher sales. The new design was presented for the first time in our newly opened Concept Store at Union Square, in New York and will be expanded to all Concept Stores worldwide. The introduction of the PUMA/Evisu denim collection in our Concept Stores and the online expansion of the popular Mongolian Shoe BBQ event mark further highlights. For the future PUMA plans to implement new concepts in PUMA Retail, as the Concept Stores offer the perfect platform for the brand to present innovative products and at the same time provide the possibility to create a unique brand experience.

26 BOARD OF MANAGEMENT REPORT OF THE SUPERVISORY BOARD FINANCIAL STATEMENTS MARKETING CORPORATE GOVERNANCE SHARE MANAGEMENT REPORT MISSION FOREWORD 073 Corporate Social Responsibility PUMA fully recognizes its responsibilities as a global company. Our social and environmental responsibility is an integral aspect of our corporate development strategy. All of PUMA s dealings are aligned with the principle of Sustainable Development to meet the demands of today s generation without impairing the opportunities of the generations of tomorrow. The realization of sustainability is supported by our Code of Conduct that is binding for manufacturers, as well as a Code of Ethics that is binding for PUMA staff. PUMA s S.A.F.E. Team (Social Accountability and Fundamental Environmental Standards) makes sure the Code of Conduct is complied to by all manufacturers through extensive and thorough audits and reaudits. PUMA S.A.F.E. also works towards increasing capacity for compliance through participation in the development, implementation and monitoring of social and environmental projects with key stakeholders in sensitive regions. As a graduating member of the Fair Labor Association (FLA), PUMA subjects a certain percentage of manufacturers of PUMA products to external unannounced social audits on an annual basis. The results of these audits are published on the FLA homepage. In conformity with the S.A.F.E. principle of Transparency, PUMA continues to publish the names of its manufacturers which can be obtained on the webpage of the FLA. The value of PUMA s efforts in environmental and social areas is gaining greater importance as acknowledged by specialized experts and sustainability analysts. In 2006, PUMA became a member of the Dow Jones World and STOXX Sustainability Indices while remaining listed in the FTSE4Good Index. PUMA also joined the UN Global Compact, working to advance ten principles in the areas of human rights, labor, the environment and anti-corruption. PUMA continues to engage with key stakeholders through the hosting of annual meetings for key interest groups and participation in CSR dialogues worldwide. PUMA is a current board member in the CSR committee of the World Federation of Sports Goods Industries (WFSGI). We communicate our activities through sustainability reports, which are prepared in accordance with the Global Reporting Initiative (GRI) guidelines. Our involvement in Corporate Social Responsibility ensures that our goal, to become the most desirable Sportlifestyle company, encompasses more than just financial success but is also in line with environmental and social criteria.

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