annual report 2002 - Pumajobs.puma.com/wp-content/themes/aboutPUMA_theme/financial-repor… · running universe PUMA has made equal strides via the ... (Central European and International

annual report 2002

marketing

puma.com

c o n t e n tMission 5 Letter to Shareholders 7 Strategy 8

Intro to Phase III 10 Marketing 12 Retail 14

Italy 16 Shudoh 18 Complete-Serie 20 Motorsport 22

Serena 24 Co-op 26 Nuala 28 96hours 29 Platinum 30

Rudolf Dassler Schuhfabrik 31 Special Edition 32

Social & Environmental Responsibility 34

Launched via a gallery exhibition at London’s Old Truman Berwery, PUMA’s LimitedEdition Thrift collection, crafted exclusively from second hand materials, sold outwithin 24 hours.

5

Mission

Brand“to be one of the most desirable sports brands in the world”

Corporate“to be the first truly virtual sports company”

7

Letter to Shareholders

Dear Fellow Shareholders,

2002 was by far the most successful year in PUMA’shistory. As a company we achieved record sales and,more importantly, record profitability. As a brand weadded gleam to our image by delivering on our promiseof targeting innovative products and marketing conceptsto our global clientele. In doing so we have elevated ourbrand awareness and established a solid platform forfuture development and growth.

We have successfully captured the essence ofSportliefstyle through a long-term marketing agreementwith Jamaica, giving PUMA a foothold at all major AthleticChampionships as well as the Olympic Games.Celebrating Cameroon’s team at the World Cup wedeveloped a sleeveless shirt that succeeded in turningheads while also fusing fashion with sport. Our recentsigning of the Italian National Football Team underscoresour ongoing commitment to professional sports and willprovide a strong extension to the creative and alternativeapproach witnessed in 2002 with Cameroon’s NationalTeam. On the tennis court, sporting PUMA’s signaturesleeveless shirt, Serena Williams won every Grand Slamshe played and captured the number one ranking fromher sister.

A quick look at PUMA’s product line provides clearindication that we have not only built upon existingcollections, but have also successfully broadened ourofferings to encompass new business areas. As such,PUMA’s expanded 2002 Shudoh Collection has set thestandard for technical innovation for football. Within therunning universe PUMA has made equal strides via theComplete Collection. Encompassing CELL technologyComplete encompasses the highest level of functionalityand comfort possible. Having broadened its portfolio ofpartnerships, PUMA’s Formula-1 initiatives now span fiveteams and provide a strong catalyst for growth vialifestyle adaptation of racing products. Our yoga-inspiredNuala line, developed in cooperation with ChristyTurlington, continues to offer flexibility and style bylending itself perfectly to the needs of the active woman.A robust offering on luxury goods rounds out PUMA’sproduct range.

Although PUMA’s success cannot be attributed to anysingle source, several interwoven factors have played asignificant part. At the heart lies the contribution of eachof our Team Members. Their commitment and innovativeapproach to realizing our ultimate goals has beenparamount. Concurrently, our dedication to “mixing it up”has allowed us to stay at the forefront of the industry andtake a deeper root in the hearts of our consumers.

Looking forward, we realize that the key to our continuedsuccess lies in our speed and agility. We will continue tomake strategic investments to always keep our brandfresh and innovative. With the continued support of ourconsumers, shareholders, partners, and team memberswe are confident that we can successfully tackle thechallenges that the future brings with it.

Best regards,

Jochen Zeitz

8

The CompanyStrategy

In 2002, we took significant steps toward our goal ofbeing the most desirable Sportliefstyle brand in the worldby fusing the creative influences from the world of sport,lifestyle and fashion. To achieve this end, our brandtemplate emphasizes PUMA’s distinctiveness,individualism, spontaneity, internationalism and sportingheritage. An important part of our brand strategy is

maintaining vigilant watch over our distribution channels,ensuring that we maintain the high level of desirabilitynecessary for sustainable growth. Concurrently, in areaswhere licensee growth is desired, we will provide solidguidance and strict alertness to make certain that thebrand’s objectives and direction are maintained.

At the heart of our company strategy is the focus oncontinuously pursuing a more flexible and efficientorganization that is fit to thrive in an increasingly dynamicand fast-paced industry. To this extent, over the course ofthe past few years, we have decentralized our structureon the way to creating the first truly virtual sportscompany.

To help manage the matrix organizational structure, wehave created the Group Executive Committee, whichincorporates the functions of brand management,product, finance, growth management, legal andorganizational structure into one core body. The resultingcross-functional communication further enhances PUMA’scorporate agility. Implementing this nimble structure will

enable PUMA to realize efficiencies in areas such asproduct lifecycle, management and sourcing. The endresult should help reduce lead times and costs, whileconcurrently fostering improvement in quality. Theseadvances are part of a constantly evolving process inwhich our corporate strategy and structure lends uscompetitive advantage.

Complimenting the Board of Management, consisting ofJochen Zeitz, Martin Gaensler, and Ulrich Heyd, theadditional members of the Group Executive Committeeare: Antonio Bertone (Brand Management), Peter Mahrer(Central European and International Sales), Dieter Bock(Finance), and Klaus Bauer (Operations and HumanResources).

Brand

Corporate

11

Das Unternehmen

10

The Company

Striving to reach even greater heights, 2002 marked thebeginning of PUMA’s Phase III growth plan. Phase III, acontinuation of the two preceding stages that focused onachieving a solid financial and brand platformrespectively, aims to further explore the potential of thebrand by generating desirable and profitable growth.Although desirable growth continues to be the preliminarygoal of the company, PUMA plans on tapping into asignificant part of the potential annual sales of €2 billionduring Phase III. Efforts to achieve average double-digitsales growth on a group-wide level through 2006 will besupported by strong investments in R&D, Marketing andRetail.

To reach our Phase III goals we will need to remainfocused on the long term. Our attention will be onimproving our distribution strategy, continuing to uniquelycombine sport with lifestyle and constantly innovating in

everything we do from marketing initiatives to ourproducts. Tied to our long-term goal is the continuedexpansion of our retail business to ensure that thisventure generates 10% of corporate sales by the end ofPhase III. The development of a web-based supply chainmanagement system will also help achieve greateroperational efficiencies and create a foundation fordelivering on the company’s growth objectives. Adding ahuman dimension to the growth equation, PUMA’s PhaseIII plan also supports the broadening of the company’sleadership structure through the introduction of a GroupExecutive Committee, consisting of the Board ofManagement as well as four Global Functional Directors.

Intro to Phase III

Group Executive Committee

Martin Gänsler Peter Mahrer Antonio Bertone Jochen Zeitz Dieter Bock Klaus Bauer Ulrich Heyd

12

The Company

In 2002, PUMA focused on marketing and advertisingconsistent with our brand strategy - mixing it up. Buildingup to the 2002 World Cup, we launched the Shudoh Sushicampaign, which presented our unique take on soccer.With TV spots featuring English Premier League starsNicholas Anelka and Robert Pires doing battle in a ShudohSushi bar, we created a memorable campaign that wasdistinctively PUMA. Similarly, our newly designedsleeveless jersey for the Cameroon national team turnedheads and demonstrated on a global platform that evenwhen it comes to something as traditional as a footballjersey, PUMA will find a way to mix it up. In the fall, wecontinued to create headlines with Serena Williams’ catsuit debut at the US Open, as Serena generated cause onher own by making the Open her third Grand Slam title ofthe year.

The Jamaican Federation represents one of the latestadditions to the PUMA team, and will be a focus of ourmarketing efforts in 2003, leading up to the WorldAthletics Championships. Jamaica perfectly embodiessport and lifestyle, and instantly conjures images thatpersonify the PUMA brand. We will also continue with ourTravis 199 campaign, featuring X-Games and GravityGames motocross gold medallist Travis Pastrana. Alsofeatured in 2003 will be an updated version of the

successful PUMA Lifestyle campaign – “Originals.” PUMA’spresence in the world of professional motor racing will beboosted this year as several new agreements bring thecompany’s sponsorship activities to a total of five FormulaOne teams, as well as the World Rally Championship.

PUMA also mixed things up outside of the stadium in2002. Our Thrift collection enjoyed a successful launch byappearing in a gallery exhibition in London in September.The 96 Hours concept, an innovative approach to clothingfor the international business traveler, was featured inseveral prominent magazines and brought a morecontemporary and sophisticated dimension to PUMA’smarketing endeavors.

Most recently, we shook the football world by announcingthat it had signed the Italian National Football Team. Theagreement, which makes PUMA the official supplier to allassociated teams, took effect on January 1, 2003 andprovides the perfect platform for displaying PUMA’scommitment to sports with style. By fusing PUMA’s strongsoccer heritage with the impressive skills of three-timeworld champion Italy, PUMA has once again bolstered itspresence in professional sports with a head-turningpartnership.

Marketing

14

The Company

On the retail front, we have continued with our company-owned sports boutiques expansion. During the year PUMAopened stores in eight major metropolitan cities. Thesenew locations complement our already strong roster ofconcept stores and bring the total number of PUMA sportsboutiques to sixteen, thereby surpassing our goal ofhaving fifteen stores operational by the end of 2002.

By opening boutiques in key retail locations we havetaken an important step in the profitable evolution of thebrand. The stores offer unprecedented opportunities tomaximize our brand experience by showcasing PUMAproducts in an innovative manner with our traditional

forward-looking nuances. By forging closer relationshipswith our target consumers, and meeting them where theyshop, concept stores also function as testing grounds fornew and fresh ideas. Most importantly, concept stores arecreated with the underlying goal of becoming a profitableextension of the brand.

Looking forward, PUMA’s retail strategy is anothercornerstone of our company’s Phase III expansion. Notonly does our retail development help bring us closer toour consumers, but it also supports our retailers bycreating a platform on which the brand is expressed in itspurest form.

Retail

15

The Company

General Overview

16

The Company

After rattling football’s foundations at the World Cup withCameroon’s attention-grabbing sleeveless-shirt, PUMAended 2002 with an equally strong statement. In theyear’s closing weeks, PUMA announced a long-termagreement with the Italian Football Association (F.I.G.C.)in which the three-time World Cup winner and PUMA haveteamed up to begin a new era in football history.

The agreement, which officially commenced on January1, 2003, will serve as a basis to strengthen the boundaries

traditionally associated with promotional sportspartnerships. In the partnership PUMA becomes theofficial supplier of all on field, sideline, training andrepresentation apparel, accessories as well as a selectionof footwear offerings. By fusing PUMA’s innovative stylewith Italy’s elegance, flair and emotions, the partnershippositions PUMA to recapture leadership in the dynamicFootball arena by doing it our way!

Italy

shudoh No Limits. Only Choices.Radical Quickness, Constant Power, Real Customization

18

The CompanyProduct

Having just completed its second season, PUMA’s Shudohline continues to maintain its position as one of theworld’s most technologically innovative soccer collections.Shudoh, derived from the Japanese word for “the way tobecome the master of soccer,” reflects PUMA’scommitment to exceeding the needs of professionalathletes by creating products that encompass form,function, fit and power.

In 2002 the Shudoh signature boot was improved toincorporate a fine-tuned upper construction with a new

exciting colorway. The Shudoh incorporates the technicalfeatures of a performance running shoes in a pro footballboot, thus combining a glove-like fit and minimal weightwith stability, traction and shooting support. The Shudohaccessories line was augmented by the addition of thedimpled soccer ball, high-performance shin guards andinjury-preventing goalkeeper gloves.

Shudoh

20

The CompanyProduct

The Complete Series continues to develop performancetrainers for runners with complex needs. Developed incollaboration with experienced athletes, Complete Seriesshoes have undergone extensive laboratory testing toassure the highest integrity of the line. Complete shoesfeature PUMA CELL technology, which allows gravitationalforces to absorb the pressure of each stride. By retaining90% of its original effectiveness throughout the life of

the shoe, the chances of injury are greatly reduced. Usingstate-of-the-art materials from GOODYEAR and 3M, PUMAlaunched the Complete Premise, a durable running shoefor those looking for a high-mileage trainer. Completeproducts continue to showcase PUMA’s dedication toequip performance-conscious athletes as they mastertheir form and speed.

Complete-Series

22

The CompanyProduct

Focused on bolstering its arsenal of statementpartnerships, PUMA’s 2003 motorsport lineup includesFormula One teams Sauber Petronas, Jordan Grand Prix,Minardi, Jaguar Racing and Panasonic Toyota. Roundingout PUMA’s partnerships, we have signed a new deal withWorld Rally Championship, and enjoy the continuedcooperation of Porsche and freestyle motocross championTravis Pastrana. Each of these agreements provides PUMA

with an additional foothold in the broad motorsportsegment. Jointly these partnerships offer PUMA aninvaluable opportunity to outfit teams and crews withfootwear, accessories and apparel that mirrors the specificneeds and challenges associated with these precisionsports. Statement products such as the CirCat and SpeedCat marry form with function and bring the look andstyling of motorsport to life’s daily race.

F1 and Motorsport

24

The CompanyProduct

Sporting her renown PUMA Catsuit among others, topseeded women’s tennis player Serena Williams turnedheads and set new standards for on-court attire. Thecollections showcased at the Grand Slams incorporated

high performance and innovative textiles, as well asfootwear that united performance with panache. Serenaaided in the collection’s design process thus ensuring thatour products remained true to the athlete’s needs.

Serena

26

The CompanyProduct

PUMA continues to set the benchmark in co-op ventures,pushing boundaries and generating interesting productsthat appeal to unique markets. This year, PUMA andYasuhiro Mihara teamed up for a third time to create anew collection of avant-garde shoes. The PUMA/Miharapartnership focuses on fusing sport with fashion. Eachcollaborative effort with Mihara has allowed PUMA todeliver innovative, high fashion designs and has propelledthe brand to markets and consumers previouslyuntouched. PUMA’s long-standing relationship with JilSander has been continued with a new collection of men’sand women’s shoes, highlighting the strong influence ofSportlifestyle in the world of fashion.

In cooperation with Marc Jacobs, Nuala recentlyintroduced the Christy bag, a limited edition yoga mat bagthat carries the signature styles of long-time friendsChristy Turlington and Marc Jacobs. Christy bag proceedswill go to CANCERcare, the oldest and largest nationalsocial service agency solely dedicated to providing free,professional support services to individuals afflicted withcancer.

Co-op

29

The CompanyProduct

28

The CompanyProduct

Often defined as “contemplative sport”, Nuala is theproduct of an organic partnership that reflects ChristyTurlington’s passion for the ancient discipline of yoga andPUMA’s commitment to create a superior mix of sport andlifestyle products. Using yoga as its foundation, Nuala

seeks synergy between the outer and inner beings andindividual and collective experiences. Nuala is more thana line of yoga-inspired active wear; it is a building blockfor limitless living aimed at providing fashion-conscious,independent women comfort for everyday life.

Nuala

PUMA’s 96 Hours collection was developed with the globaljetsetter in mind. Using only the finest materials andcraftsmanship, the set fuses the necessities offunctionality and style. We have created a completelymodular apparel concept that allows the user to moveseamlessly from hour to hour and day to day. The singleelegant case contains 26 individual pieces in a clean colorpalette of black, white and coal that subtly come together

to suit the needs of the individual. Included in thepackage is a compact performance sport shoe, allowingfor the integration of leisure with business. Focused onthe fact that the typical international business trip lasts 96hours, four days and five nights, the 96 Hours collectionfrees the traveler from the bounds of time and distanceand showcases PUMA’s ability to make a high-endfunctional statement.

96hours

31

The CompanyProduct

30

The CompanyProduct

Available at high-end boutiques and department stores,the PUMA PLATINUM collection continues to break newground in the men’s premium footwear arena. PLATINUMtraditionally pulls influences from PUMA’s sport heritage,and recently has drawn inspiration from the prestige oftimeless sports like polo, yachting, and auto racing.PLATINUM provides consumers with sophistication andexceptional craftsmanship, with a hint of PUMA’s uniquemodern styling.

Platinum

The Rudolf Dassler collection recalls the innocence andtimelessness of Sport through its clean, simple, andprovocative styling. The Dassler footwear range is rootedin the heritage of soccer, tennis, running and boxingshoes of the late 1940’s and 50’s. Our collectionrepresents a time when people played sports forenjoyment and without underlying financial motives.Made of the finest leather and suede, the Dasslercollection keeps the materials and colors natural, but addsmodern technology in the sole to reduce weight andincrease comfort.

Rudolf Dassler Schuhfabrik

32

The CompanyProduct

PUMA’s Special Edition Collection is designed for the truetrendsetter – a PUMA fanatic that desires both originalityand exclusivity. Digging back through our archives, PUMAlaunched two Special Edition apparel products in 2002,

the Knitted Suit and the Letter Suit. Both items wereproduced in extremely limited quantities and selectivelyallocated to our concept stores and other notableretailers.

Special Edition

34

The Company

PUMA, in its capacity as a global player in the sportinggoods industry, feels an especially high degree ofresponsibility for the protection of social andenvironmental standards. This responsibility is reflected inour business practices. As such, we have taken a leadingrole in the development of a sustainable socialaccountability and environmental standards policy. Thepolicy’s goal is to establish an open dialogue between ourpartners to ensure that our corporate activities arefounded on the principles of sustainability, accountabilityand transparency.

The S.A.F.E. (Social Accountability & FundamentalEnvironmental Standards) policy has become thecornerstone in PUMA’s long-term corporate responsibility

action plan. The policy’s two-pronged approachguarantees that the needs and rights of all personsemployed with PUMA and its partners are respected,while also implementing benchmarks that ensure thatproduction standards, with regard to the environment,are continuously upheld.

By enveloping our partners in a constructive dialogue, ourS.A.F.E. audit teams maintain a symbiotic relationshipwith all vested parties. The ultimate goal is to createstrategic partnerships that lead to the mutual advance ofemployees, associates and PUMA as a whole. As such, werealize that becoming the most desirable Sportliefstylebrand encompasses more than just financial success.

During 2002 significant steps in the fields ofenvironmental and social affairs were realized. Theauditing of all licensee factories in accordance withS.A.F.E. standards has been successfully completed. In-depth training sessions have been arranged for all ofPUMA’s vendors. Furthermore, to ensure that the target ofPVC-free product-delivery by F/W 2003 is achieved, PUMAhas undertaken significant steps in its productionpractices. Our efforts to substitute organic solvents withorganic solvent-free systems in footwear production havealso been intensified.

PUMA’s unwavering dedication to the principles laid out inthe S.A.F.E. policy has earned us the 2002 CorporateEthics Award from the European Business Ethics Network,

Germany. The award celebrates the organization-wideprocesses that have been set into motion that promotestructurally effective corporate ethics projects andcorporate policy. By winning the award we have deepenedour commitment to upholding the highest possiblestandards both now and in the future.

For more information please refer to the newest versionof PUMA’s environmental and social report that will bepublished in 2003.

Social & Environmental Responsibility