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## Dear Fellow Shareholder, 

2004 was another remarkable year in the development of our company and brand. Our financial results continued to outperform the industry by any measure and we enhanced PUMA’s position as a brand icon at the epicenter of today’s overlapping worlds of Sport, Lifestyle and Fashion. At the same time, we took many steps toward ensuring that our organization is capable of handling the increased demands of success and provides a solid foundation for PUMA’s long-term plans. 

In many ways, 2004 was a year of both financial continuation and new milestones. Our branded sales grew for the 11th straight year, reaching over €2 billion for the first time. Consolidated sales grew 20% to €1.5 billion, marking the 10th consecutive year of growth. Our gross profit margin substantially outpaced the industry at 51.9%, marking the first time in industry history (as far as we can tell) that one of the major companies recorded a full year GPM over 50%. Net earnings, which improved faster than sales for the 6th consecutive year, increased 44%. We’re quite pleased that our consistency over the past several years is now just as noteworthy as our 2004 record results. 

Most importantly, we delivered value to your investment in PUMA. Our return on equity once again led the industry by a substantial margin at 48%. The end result of our financial performance was an appreciation of 45% in your share price in 2004. Since we initiated Phase II of PUMA’s long-term growth strategy in 1998, the PUMA share has risen from €11.25 to €202.30 at the end of 2004. 

We have been able to generate these returns in part by giving PUMA a voice that has helped to define the concept of Sportlifestyle, and 2004 provided several opportunities to reaffirm our category leadership. The Summer Olympics provided a world stage for us to show that the tiny island nation of Jamaica not only produces some of the fastest humans in the world, but also enjoys a distinctive cultural blend of sport and fun. Earlier in the summer our partnership with the Italian National Team led our marketing efforts at the European Football Championships, where the Azzuri played along with three other PUMA-sponsored teams – Czech Republic, Switzerland and Bulgaria. In our “Two Sides, One Goal” campaign, we focused on the role that the fans play in supporting their team. Towards the end of 2004 we formed partnerships with seven-time Formula One world champion Michael Schumacher and the Ferrari team, which are kicking into high gear in 2005. And with their reputation for tradition, design, Italian flair, performance and luxury, Ferrari is yet another perfect fit with the PUMA brand. 

Meanwhile, our overall brand campaign, “Hello”, evolved in 2004 to incorporate PUMA-sponsored athletes in the ads. Shot by well-known fashion photographer Juergen Teller, “Hello” provides depth to our brand message by communicating layers of emotion and spontaneity while simultaneously reaffirming PUMA’s relevance to top-level athletes in a brand-appropriate way. Of course, the common thread between these campaigns is that they all support PUMA’s values: A new way of looking at sport, discovery, performance, design, spontaneity, imagination, innovation, and very importantly, individuality. 

