Risk and opportunity report

For sustainable business success and to secure competitiveness, PUMA consciously takes risks in order to successfully implement the corporate strategy and make targeted use of opportunities. Comprehensive internal management systems are in place for this purpose that ensure effective and holistic risk and opportunity management.

Principles of risk and opportunity management

PUMA pursues the goal of identifying, assessing and effectively managing material or potentially existence-threatening risks and opportunities at an early stage. To this end, an interactive, management-oriented approach as well as a comprehensive internal control and risk management system is integrated into the corporate organisation. These systems strengthen Group-wide risk and opportunity awareness and promote well-founded decision-making processes. Although they cannot guarantee absolute security, they contribute to the achievement of strategic corporate goals, the protection of company assets, reliable financial reporting as well as compliance with legal requirements and standards. At the same time, PUMA creates transparency towards stakeholders and ensures that potential threats to the continued existence of the company are recognised in good time. The Management Board is supported by regular reports from the Group Internal Audit, Risk Management & Internal Control and Group Compliance functions in the effectiveness assessment and appropriateness of the internal control and risk management system as well as systematic compliance with legal and internal requirements. Identified weaknesses are systematically assessed and addressed through targeted actions. Furthermore, the responsible functions bear the operational responsibility for ensuring compliance with relevant control mechanisms and policies as well as implementing and continuously monitoring an effective internal control and risk management system in their areas of responsibility. The central components of PUMA's internal control and risk management system include the following elements:

• Risk management system: The risk management system ensures a standardised procedure for identifying and assessing material or potentially going-concern-threatening corporate risks, including their potential impacts and probability of occurrence. It defines clear responsibilities as well as established process flows and is firmly integrated into operational corporate governance. The risk management system is based on the COSO standard. A detailed description of the system can be found in the following chapter “Risk management system”.
• Internal Control System: The Internal Control System represents a structured and consistent process applied throughout the company with the aim of ensuring effective control processes. It serves the systematic identification of control weaknesses and the assessment of relevant risks in the areas of strategy, operations, finance, sustainability and compliance. The Internal Control System follows the COSO standard and is firmly integrated into the operational business processes. A detailed description of the system can be found in the “Internal control system” section below.
• Compliance Management System: The Compliance Management System ensures a systematic approach to preventing, detecting and handling potential violations of laws and regulations. It is based on regular risk assessments, clearly defined guidelines, target group-specific training measures and a strong compliance culture. The PUMA Code of Ethics is a central component and defines binding values and standards of conduct for all employees. The global and anonymous whistleblowing platform “SpeakUp” can be used to report potential violations. PUMA ensures comprehensive protection against reprisals. All incoming reports are investigated confidentially, and appropriate action is taken promptly in the event of confirmed violations.
• Internal Audit System: Internal Audit contributes significantly to the improvement of management as well as to the monitoring and further development of business processes within the PUMA Group. This is achieved through a systematic and consistent implementation of independent audits, objective consulting services and targeted initiatives to strengthen control and management mechanisms. The selection of specific audit areas is based on a risk-oriented annual audit plan that takes into account the risk areas relevant to the Management Board and the Audit Committee. Internal Audit regularly reports to the Management Board and the Audit Committee on material audit results and the implementation status of recommended actions.

Risik management system

Overall responsibility for the risk management system lies with the Management Board of PUMA SE (§ 91(3) AktG). The Management Board regularly reports to the Audit Committee of the Supervisory Board, which also has a right to information from the operational departments (§ 107(4) AktG).

The design, review and further development of the system are carried out in the Risk Management Committee, which comprises the Management Board and selected executives. The operational coordination of the risk management process is the responsibility of the risk management function of the Group Internal Audit, Risk Management & Internal Control department. This function also prepares the regular risk reporting for the Risk Management Committee.

The risk management system is continuously monitored in terms of its appropriateness and effectiveness and adapted or further developed when required. The methodology and structure are objectively assessed by the Management Board, which is supported by the Internal Audit department as an independent audit body. As part of its regular audit activities, the Internal Audit department also monitors the effectiveness of and compliance with risk management processes and guidelines in the subsidiaries and central corporate functions. In addition, the results of the annual audit of the financial statements of PUMA SE are incorporated into the assessment and further development of the system. In this context, the system is assessed regarding its fundamental suitability to be able to identify risks that endanger the company’s existence at an early stage.

Responsibilities, processes and procedures are bindingly defined in PUMA’s enterprise risk guidelines. The structure and specific design of the system are structured as follows:

The risk management system is based on the COSO framework (Committee of Sponsoring Organisations of the Treadway Commission) and is simultaneously adapted to PUMA’s corporate structure and culture. The managers of central functional areas and the managing directors of the sales subsidiaries are responsible for risk identification, assessment and control. General information on risk management as well as training materials are made available to all employees.

Risk identification is carried out Group-wide based on a bottom-up principle in regular interviews (every six months or ad hoc during the year). The results are reported via established reporting channels to the risk management function and, where relevant, to local monitoring bodies. In addition, a top-down approach is carried out in the Risk Management Committee by the Management Board and global management in order to consider interdependencies and validly assess the overall risk situation. Outside the regular process, material changes to existing risks as well as newly identified risks can be reported properly and in a timely manner via internal communication channels.

Risk assessment is performed using a systematic methodology based on quantitative criteria, combining probability of occurrence and potential damage. The probability of occurrence is classified in percent; the extent of damage is based on the planned operating result for the upcoming financial year, unless otherwise described. The resulting risks are classified within ranges on a four-level scale from low to medium and significant to high, including risks from the use of financial instruments. PUMA follows a net risk approach, addressing those risks that remain after existing control and management measures have been taken into account. The results flow as aggregated risk groups into a comprehensive matrix, which depicts the overall risk situation and the materiality of individual risks in the significance levels low, moderate, material and critical.

The operational management of identified risks is performed by the respective risk owners. Actions include avoidance, reduction, diversification and/or transfer in order to achieve an acceptable residual risk. Material or potentially existence-threatening risks are managed in close coordination with the Risk Management Committee. To assess the risk-bearing capacity, the risk portfolio is compared against PUMA's planned operating result.

Internal control system

PUMA's internal control system applies Group-wide and comprises principles, procedures and actions defined by management, which are anchored in all material business processes, including financial and sustainability reporting. It is based on the internationally recognised COSO framework and is applied uniformly in all 100% subsidiaries. It serves the management of material risks, the enhancement of efficiency and effectiveness of processes, proper reporting as well as compliance with legal requirements. The system is continuously developed further to identify potential enhancements at process level, to derive appropriate recommendations for action and to systematically track their implementation. The up-to-date status and appropriateness of the control environment is also monitored by independent monitoring bodies such as the Supervisory Board and the Audit Committee.

The Management Board of PUMA SE bears overall responsibility for the internal control system and regularly reports to the Audit Committee of the Supervisory Board. The internal control function within the Group Internal Audit, Risk Management & Internal Control Department is responsible for operational coordination and also prepares regular reports for the Management Board. Responsibilities, tasks and processes are defined in binding guidelines. The internal control system is based on five core components: control environment, risk assessment, control activities, information and communication, and monitoring activities.

The control environment forms the basis of the internal control system and defines binding principles for the behaviour of all employees and the management within the PUMA Group. These standards are formalized in internal policies and procedures and are supplemented by external regulations. As part of the risk assessment, both material risks at the Group level and risks of daily business operations are identified and evaluated. The objective of the internal control system is to manage these risks through appropriate control activities. The implementation and timeliness of the controls are reviewed annually through a Group-wide Internal Control Self-Assessment (ICSA). In this context, the internal control function ensures that all material segments, both at the level of the Parent company and the subsidiaries, are included in the process. The managers of the business units evaluate the existing control framework based on internal and external policies as well as best-practice standards. The level of implementation of the control objectives is subsequently verified independently by the internal control function and reported to the Management Board, the Audit Committee, and the statutory auditors. The internal audit function takes the results into account in its risk-oriented audit planning. Subsequently, information and communication regarding risks and control activities support well-founded decision-making at all levels. The internal control function supports the process through regular coordination and close collaboration with all those responsible, as well as through targeted awareness training. The effectiveness of the internal control system is monitored via a standardised Group-wide software system that structures and documents the ICSA process. On this basis, results are analysed, and recommendations are developed and coordinated with the responsible units. The implementation of defined actions is continuously monitored and systematically tracked.

Main features of the internal control and risk management system as it realtes to the group´s accounting process

The Management Board of PUMA SE is responsible for the preparation and accuracy of the annual and consolidated financial statements and the combined management report. Furthermore, it is responsible for the implementation and regular monitoring of an appropriate internal control and risk management system with regard to the consolidated financial statements and the disclosures in the combined management report. The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) applicable in the EU and the supplementary provisions of the HGB, AktG and SEAG. Certain disclosures are based on current estimates by the Management Board and the management.

To ensure the regularity, reliability and transparency of financial reporting, PUMA has a group-wide internal control and risk management system.

The conceptual framework for accounting is continuously reviewed to ensure that amendments in the regulatory environment are taken into account in a timely manner. Relevant specialist departments are regularly informed about current accounting-related matters and deadlines to be met in the financial statement preparation process. The financial statement information reported by PUMA SE and its subsidiaries forms the basis for the preparation of the consolidated financial statements and is processed in the central consolidation system. The individual steps of the financial statement preparation process are subject to both manual and IT-supported controls. The professional qualification of the employees involved in the accounting process is ensured through structured selection procedures and needs-based training measures. The four-eyes principle is anchored in the consolidated financial statement process. In addition, financial statement information is subject to defined release and approval processes. Supplementary control measures include, in particular, target/actual comparisons and analytical reviews of the composition and changes in material items. To protect against unauthorized access, role-based access and authorisation concepts are implemented in the accounting-relevant IT systems.

The adequacy and effectiveness of these measures are regularly reviewed by the Group Internal Audit, Risk Management & Internal Control department. There are areas for improvement in the further development of change management for our IT systems, especially for migration projects; any control weaknesses are analysed in detail and appropriate countermeasures are undertaken. The Audit Committee of the Supervisory Board discusses the results of audits of the internal control and risk management system with regard to accounting and reporting in regular meetings with the independent auditors, the Management Board and the Group Internal Audit, Risk Management & Internal Control department. In the balance sheet meeting, the auditor also reports to the Supervisory Board on the results of the audit of the annual and consolidated financial statements.

Statement on the adequacy and effectiveness of the systems

Risik and opportunity situation

PUMA defines risks as potential future developments or events that may lead to negative deviations from the targets of growth above the industry average and sustainable profits. Similarly, opportunities are understood as developments or events that may result in positive deviations from targets. Risk management is carried out group-wide involving the Management Board as well as global and local management, unless expressly stated otherwise. Opportunity management is the responsibility of operational management in the respective regions, markets, and specialist areas and is not part of the formal risk management system.

Explanation of the risk situation

The material risks of the PUMA Group are presented below. These are aggregated into risk groups and classified as low, moderate, material or critical based on the current assessment for the year 2026. The following overview and the explanatory descriptions show the risk groups in the order of their relative importance according to the last survey in the financial year 2025. In addition, changes in the risk classification compared to the previous year are shown. It should be noted that risks that are currently classified as low, assessed as not relevant or are not yet known at the current time could potentially have a negative impact on the corporate strategy and target achievement. Supplementary information on risks related to environmental, social and governance (ESG) matters is included in the sustainability statement.

PUMA's risk portfolio continues to reflect the ongoing geopolitical and macroeconomic volatility as well as industry-wide developments. This includes, in particular, persistent geopolitical tensions, the impacts of US tariffs, and general market volatility. Additional risks arise from company-specific challenges such as weakening brand desirability as well as changes in the distribution channel mix and distribution quality. These developments have been classified as critical by management and addressed with targeted risk mitigation actions.

Risk overview table

¹ Disclosed as “business partners” exposure in the Risk & Opportunity Report 2024.

² Disclosed as exposure under "Product and market environment" in the Risk and opportunity report 2024. Due to the adjustment, a presentation of the change compared with the previous year is not possible.

³ Reported as an "Information Technology" exposure in the 2024 risk & opportunity report.

⁴ Disclosed in the Risk and Opportunity Report 2024 as "monitoring of working conditions" and "sustainability" exposure. Due to the adjustment, a presentation of the change compared to the previous year is not possible.

⁵ Disclosed as an exposure in the 2024 risk & opportunity report under "Product and market environment". Due to the adjustment, a presentation of the change compared to the previous year is not possible.

Macroeconomic development

As an internationally operating enterprise, PUMA is exposed to diverse challenges and uncertainties that affect the global economy. The resulting risks may impact both PUMA’s sales and sourcing markets. Macroeconomic factors such as economic downturns, changes in interest rates, as well as inflation and cost pressures, can have a direct impact on consumer behaviour, production costs, sales, and profit margins. Furthermore, global events, including political and social changes, geopolitical tensions, natural disasters or epidemics, can impair supply chain activities or change consumer sentiment. These developments are regularly reflected in general economic conditions.

PUMA addresses these challenges through close and continuous alignment with the regions and key markets. Critical developments affecting the business environment, such as price increases, supply chain interruptions or geopolitical tensions, are continuously identified, monitored and actively addressed. In addition, PUMA develops alternative scenarios to analyse potential events and to prepare suitable actions. Moreover, the Management Board is regularly updated about country-specific and macroeconomic developments and defines necessary action plans on this basis to respond flexibly and in a timely manner to changed economic conditions.

Procurement & supply chain

As a globally operating enterprise, PUMA relies on efficient, capable, and resilient sourcing and supply chains to ensure the worldwide availability of its products and reliable business operations. The predominant production in Asian countries such as China, Vietnam, Cambodia, Bangladesh, Indonesia, and India is associated with material risk factors. These include rising or volatile sourcing, wage, and logistic costs, potential bottlenecks for raw materials and components, quality risks, and potential dependencies on individual suppliers or production sites. Additionally, geopolitical tensions, increasing state protectionism, trade conflicts, changed tariff structures, and stricter regulatory requirements can impair the stability of global sourcing and supply chains and have a negative impact on PUMA's business operations and financial condition. Furthermore, the transport of goods to sales markets is subject to risks such as delays or failures by logistics and warehousing service providers, caused by extraordinary events as well as human or system-related errors.

To mitigate risks, PUMA has a comprehensive framework for sourcing and supply chain management. Continuous review and adjustment of the supplier and country portfolio reduce the risk of one-sided dependencies. Long-term framework agreements secure future production capacities and increase planning certainty. Close communication with PUMA subsidiaries enables early identification of developments and corresponding adjustment of forecasts. Structured quality control processes as well as partnership-like, direct collaboration with suppliers ensure the quality and availability of products. Additionally, PUMA continuously monitors political, economic, and legal conditions and has specifically intensified collaboration with suppliers and logistics partners to further strengthen the resilience of the supply chain and to be able to react to changes early. Cooperation with logistics and warehousing service providers is ensured through clearly defined selection processes, uniform contract structures, and continuous monitoring of relevant performance indicators.

Brand & product

The sport and lifestyle industry is characterised by the pivotal importance of a strong brand image and effective storytelling as well as constant innovation, frequent trend changes, evolving consumer preferences, and intense competition. PUMA faces the challenge of significantly strengthening its brand desirability and continuously improving and differentiating its products to capture consumer interest and gain an edge over its competitors. Brand and product risks can arise from unanticipated, late, or insufficient responses to consumer demand. Constant changes in sport and lifestyle trends and long product lifecycles bear the risk of creating products that may not fully resonate with consumers, launching them at the wrong time, with the wrong marketing support or placing them in the wrong distribution channels. As a result, these risks could lead to a loss in market share, sales shortfalls, and diminished brand attractiveness.

PUMA addresses these challenges with a stringent consumer orientation across all markets. Marketing investments are made more precisely, and organisational structures are aligned so that product development and storytelling are integrated. The aim is to engage in authentic and effective storytelling that inspires both wholesale partners and consumers. In addition, PUMA is increasingly focusing on the consistent management of its product families and the sustainable development of product icons in order to create clear recognition and identification among its consumers. As part of its strategic direction, PUMA is focusing on the Football, Running, Training and Sportstyle Prime & Select categories to drive future growth. Performance is a priority for the PUMA brand across all product categories. Furthermore, to mitigate this risk, systematic market research is conducted to identify relevant consumer trends as early as possible. Through targeted investments in product design and development, PUMA ensures that the product range appeals to consumers around the world and aligns with PUMA's brand positioning. PUMA's brand image is also strengthened through collaborations with celebrity brand ambassadors who embody PUMA's brand values and have great potential to influence PUMA's target audience. These ambassadors are carefully selected according to the requirements and needs of the brand and the company.

Distribution structure

PUMA relies on diversified distribution channels, including the wholesale business with retail partners as well as the Direct-to-Consumer (DTC) business with own and self-operated retail stores and e-commerce platforms. Through this strategy, PUMA reduces the dependency on individual distribution channels and/or retail partners. In the wholesale business, risks exist due to intense competition, increasing price pressure and the shift in consumer behaviour towards the integration of brick-and-mortar and digital retail. These developments require a continuous adjustment of the distribution structures. The DTC business is also associated with investment and cost risks, for instance due to necessary expansions of the infrastructure, retail store fittings and modernizations, rising fixed costs and commitments from long-term lease agreements. During the reporting period, the risk was assessed as increased due to lower distribution quality and the associated ongoing streamlining of the distribution structure. In addition, the announced preliminary agreement to acquire a large share package will give rise to further opportunities and risks in the Greater China segment.

To minimise exposure, PUMA pursues the goal of appearing less commercial in both wholesale and the DTC business and selectively further developing the distribution channel mix in order to sustainably improve both profitability and brand perception. While both channels remain a central component of the distribution strategy, PUMA aims for higher DTC growth to approach the industry average. In wholesale, the focus is increasingly on brand-driven segments such as Performance and Sportstyle, rather than on purely commercial distribution channels. Furthermore, to reduce exposure, PUMA carries out permanent monitoring of the distribution channels and regular reporting by Controlling and the special functions. In the retail business, investment decisions regarding the development of new formats and concepts for stores are preceded by detailed location and profitability analyses. In e-commerce, global activities are unified and investments in the IT infrastructure are made to further improve the shopping experience for PUMA’s consumers.

Currency

PUMA, as an internationally operating corporation, is exposed to transactional foreign currency risks. These currency risks arise to the extent that the exchange rates of currencies in which purchasing and sales transactions, as well as credit transactions and receivables, are conducted fluctuate against the reporting currency of the PUMA Group, the euro. The aim of foreign currency risk management is to limit the impacts of fluctuations in exchange rates.

PUMA's largest procurement market is the Asian market, where payment flows are primarily conducted in US dollars (USD), while the PUMA Group's sales are largely invoiced in other currencies. PUMA manages currency risk in accordance with an internal policy. In line with the Group policy, significant risks are hedged up to a coverage ratio of 95% of the estimated foreign currency risks arising from expected purchasing and sales transactions over the next twelve to fifteen months. To hedge foreign currency risk, foreign exchange forward contracts and currency options are typically used, with a maturity of approximately twelve months from the balance sheet date. For significant risks subject to high hedging costs, high coverage ratios can only be achieved over shorter time periods.

PUMA exclusively enters into standard foreign exchange forward contracts and currency options with renowned international financial institutions to hedge already concluded or anticipated contracts. As of the end of 2025, the net exposure for the planning period of 2026 was adequately hedged against currency fluctuations, where possible.

Furthermore, foreign currency risks may arise from intra-group loans issued for financing purposes. To hedge currency risks associated with converting intra-group loans denominated in foreign currencies into the functional currencies of the Group companies (EUR), currency swaps and foreign exchange forward contracts are used.

In addition, as an international corporation with its own presence in numerous countries, PUMA is also exposed to translation risks. These arise during consolidation when the financial statements of foreign subsidiaries that do not report in euros are converted into the functional currency of the PUMA Group, the euro.

In high-interest and high-inflation countries, both transaction and translation risks can arise to a significant extent. PUMA does not hedge these risks, as the cost of hedging in high-interest countries, if hedging is even possible, often significantly exceeds the benefits of risk mitigation. Instead, the negative effects of currency fluctuations and inflation are primarily offset through price adjustments of products in the respective market.

To represent 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 applying hypothetical changes in risk variables to the portfolio of financial instruments as of the reporting date. It is assumed that the portfolio as of the reporting date is representative of the entire year.

Currency risks in the sense of IFRS 7 arise from financial instruments that are denominated in a currency other than the functional currency and are of a monetary nature. Exchange rate differences resulting from the conversion of individual financial statements into the group currency are not considered. The relevant risk variables are generally all non-functional currencies in which the group uses financial instruments.

The currency sensitivity analysis is based on the net balance sheet risk denominated in foreign currencies. This also includes intra-group monetary assets and liabilities. In addition, outstanding currency derivatives are revalued as part of the sensitivity analysis. It is assumed that all other influencing factors, including interest rates and commodity prices, remain constant. Furthermore, the effects of projected operational Cash Flows are disregarded.

The foreign exchange forward contracts used to hedge exchange rate-related payment fluctuations are designated in an effective cash flow hedge relationship in accordance with IFRS 9. Exchange rate changes in the currencies underlying these contracts have an impact on the hedging reserve in equity and on the fair value of these hedging instruments.

Liquidity and interest rate risks

PUMA continually analyses short- and medium-term capital requirements in coordination with the central Treasury department. Short-term liquidity management is based on rolling, conservative liquidity planning. For medium- to long-term liquidity planning, a financing model is used whose scenarios continue the conservative planning with a Base Case and take into account both operational and financial stress factors with a Downside Case. In order to ensure the company's solvency, financial flexibility and a strategic liquidity buffer, PUMA maintains a liquidity reserve in the form of cash and confirmed credit facilities, which are not fully utilised.

The credit lines consist of a syndicated loan, a bridge financing, several promissory note loans as well as committed credit lines. The financing instruments are predominantly denominated in euros and comprise both short and long-term maturities of between one and six years as well as variable and fixed-interest components. As is customary in the credit market, the financing instruments may be subject to a limitation on the disposal of fixed assets, maximum limits for secured liabilities as well as “cross-default” and “change-of-control” clauses. Furthermore, with the exception of the bridge financing, there are no additional covenants or material conditions. In the case of the bridge financing, there is additionally an early repayment obligation for the respective equivalent value if subscribed capital is increased, new financing instruments are issued, sales of assets above an equivalent value of € 10.0 million are made or dividend payments take place. All conditions of all credit agreements are met as of the balance sheet date. The Management Board continues to expect to be able to meet these in the future as well.

The reset announced for the first half of 2025 and the associated deterioration in key financial indicators led to a significantly negative free Cash Flow in 2025 and consequently to a high utilisation of the credit lines previously available (in particular the syndicated credit line). In order to increase the strategic liquidity cushion to a sufficient level, PUMA concluded a bridge financing agreement in December 2025 with a term of up to two years for a total of € 500.0 million. In May 2025, a promissory note loan totalling € 210.0 million with a term of four (€ 147.0 million) to six years (€ 63.0 million) was successfully placed. In addition, a new promissory note loan with a term of two years for € 65.0 million was issued in November 2025.

PUMA has confirmed credit lines totalling € 2,562.8 million, of which € 1,202.2 million had not been utilised as of 31 December 2025. The unutilised credit lines provide a material buffer for all scenarios to cover seasonal and extraordinary liquidity needs.

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 several tranches with fixed and variable coupons and different remaining terms (incl. the above-mentioned promissory note loans). The utilised promissory note loans amount to a total of € 630.7 million as of 31 December 2025, and have a remaining term of between/up to one and six years.

Changes in market interest rates around the world have an impact on future interest payments for variable interest liabilities. As PUMA only has a limited amount of variable interest-bearing liabilities, interest rate hedging instruments are used to a limited extent to limit the impacts of interest rate changes, including for the newly concluded promissory note.

Project

PUMA’s strategic programme portfolio includes important and critical projects to ensure that the flow of goods and information is sufficiently supported by modern warehouse, logistics and IT infrastructure. These include but are not limited to the implementation of IT systems to enhance operations, such as core value chain systems, e-commerce platforms, warehouses and supply chain. Risks associated with projects include ineffective change management, lack of resources, high costs, budget overruns, implementation delays, low user acceptance due to insufficient communication, increased vulnerability to potential data breaches and possible disruption of business processes. In addition, changing market conditions or technological developments may require adjustments to investments in warehouse, logistics and IT infrastructure and thus cause additional risks.

Due to company-specific challenges, PUMA has supplemented its strategic programme portfolio with a realignment (Reset) with the aim of reestablishing itself as a top-three sports brand worldwide, growing more strongly than the industry average in the medium term and generating healthy profits. This strategic realignment is associated with risks. These include, in particular, increased costs, operational disruptions, employee resistance as well as uncertainties regarding the expected profitability.

In order to effectively manage project-related risks, e.g. in the area of warehouse-, logistics- and IT-infrastructure, PUMA has established respective project teams for the Group and regional project teams as well as guidelines to manage the introduction of new and existing projects that have a significant impact on the core value chain. In addition, as part of project management, a steering committee ensures that strategic projects and programmes are efficiently managed, monitored and supported. This approach enables project risks to be identified at an early stage and measures to be taken in good time. Through clear prioritisation and close coordination with stakeholders, project control is maintained beyond implementation to ensure success and alignment with business needs, including the continuous re-evaluation of projects and the resulting lower prospects of success or possible reversal.

To proactively manage the risks associated with the strategic realignment (reset), PUMA deploys its resources even more targetedly, establishes systematic monitoring and consistently tracks defined milestones. This ensures that potential deviations are detected at an early stage and necessary countermeasures can be implemented in a timely manner.

Digital & technology

The ongoing digitalisation of business environments brings new challenges to PUMA in the field of information technology which, – in case of incidents - may have an impact on our operations, data security and privacy, as well as overall performance. Key business procedures and processes, such as supply chain management, e-commerce, and financial reporting depend on digital services, infrastructure, and their unimpaired availability. Interruptions in service availability can disrupt essential processes and cause operational problems. Increasing sophistication of cyber-attacks, including the use of AI-based models, enables exposure to attacks using phishing, ransomware and malware that could compromise sensitive data and disrupt operations. Moreover, information security is of outmost importance for PUMA; the risk of a data breach might lead to financial loss, brand damage, legal claims, and loss of customer trust.

To mitigate these risks, we continuously implement technical and organisational measures. Key business procedures, processes and infrastructure related to information technology and security are established based on best-practice frameworks, regularly updated and controlled. These processes are subject to internal and external audits to ensure their reliability and the appropriateness of control mechanisms. Appropriate procedures and guidelines related to IT-incident response are in place and updated regularly. In addition, training and information campaigns are conducted regularly to increase awareness and knowledge on information security-related issues.

Credit risk

Due to its business activities, PUMA is exposed to credit risk on trade receivables. These risks consider delayed payments and losses of accounts receivables (e.g., default of a customer) as well as credit risks from counterparty's other contractual financial obligations (e.g., bank deposits, derivative financial instruments). This could lead to bad debt expenses and reduced liquidity and could have a negative impact on Cash Flow and profitability, as trade receivables are one of the most significant financial assets.

The risk of default is countered by continuous monitoring of outstanding receivables and payment targets as well as sufficient value adjustments. The credit risk is limited, if possible, by credit insurance. The maximum credit risk is reflected by the carrying amounts of the financial assets recognised in the balance sheet. In addition, credit risks also arise to a lesser extent from other contractual financial obligations of the counterparty, such as bank balances and derivative financial instruments. The objective of credit risk management is the limitation of potential bad debt losses.

Compliance

As an international group, PUMA is exposed to compliance risks resulting from the potential non-adherence to corporate governance rules, legal and regulatory requirements, or industry standards. These risks include fraud, conflict of interest, money laundering, corruption, violations of human rights, environmental protection and antitrust law, as well as deliberate misrepresentations in financial reporting which may lead to significant penalties, legal consequences, reputational damage and disruption to business operations.

PUMA has implemented various tools to manage such risks. This includes a functioning compliance management system, an internal control system, group controlling and internal audit departments to prevent, detect and sanction compliance-related topics at an early stage. Through the compliance management system, clear roles and responsibilities are assigned to group and local compliance functions. To ensure PUMA employees comply with PUMA‘s values, ongoing trainings, communication and awareness campaigns for policies and procedures are carried out. PUMA employees also have access to PUMA’s electronic whistleblowing system (SpeakUP) for reporting illegal or unethical behaviour, and violation of laws and PUMA policies.

Legal Information

As an internationally operating group, PUMA is exposed to various legal risks. These risks could arise from Intellectual Property (IP) infringements, such as the unauthorized use of PUMA-owned trademarks or patents, but also other copyright infringements pose a risk. This may result in legal disputes, brand damage or the loss of exclusive rights of use. As a brand company, PUMA also ensures that it does not infringe on the rights of third parties. Furthermore, PUMA takes action against counterfeit products, which are often of inferior quality and do not meet PUMA’s quality standards, damaging PUMA’s brand reputation and undermining consumer trust in the PUMA brand.

Continuous monitoring of the existing brand portfolio as well as compliance with commitments entered into is carried out by Puma’s globally operating legal team and through the integration of external legal experts in order to minimise legal risks. The legal team is responsible for the legal management of all material matters of PUMA and primarily for protecting Puma’s intellectual property, and therefore takes rigorous action against brand piracy. This not only ensures a robust global portfolio of property rights, such as trademarks, designs and patents, but also involves close collaboration with customs, police and other authorities and global engagement in associations and committees to ensure effective protection of intellectual property and to respond to new legal challenges.

Sustainability

Sustainability is part of PUMA’s corporate philosophy and shapes decisions along the entire value chain, from material sourcing to environmental, labour and social standards. The risk is that an inadequate implementation of the sustainability strategy could lead to reputational damage, loss of customer trust, interruptions in the supply chain, higher costs or violations of regulatory requirements. The protection of human rights and ensuring fair working conditions along the value chain also have top priority for PUMA. Key risks can arise from violations of human rights within the supply chain, violations of social standards in production sites, child and forced labour, excessive workload and overtime, inadequate safety conditions, low wages, job uncertainty or inadequate qualification of employees.

PUMA manages sustainability risks via the FOREVER.BETTER strategy, which anchors measurable targets in all segments and is reported regularly to the management board, supervisory board and stakeholders. The strategy focuses on three primary areas of action: human rights, climate change mitigation, and circular economy, aligned with the UN Sustainable Development Goals. To monitor progress and for targeted further development towards the defined targets, PUMA systematically collects relevant data and performs risk analyses both within its own entity and at its suppliers’ sites. In addition, the entity maintains a continuous dialogue with stakeholders to closely monitor sustainability topics and promote ongoing enhancements. To contribute to the mitigation of labour, social and environmental risks, PUMA has established binding principles for its business partners that are consistent with relevant international frameworks such as the German Supply Chain Act, the Universal Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights, the ILO Core Labour Standards and the principles of the UN Global Compact. Regular audits and risk analysis at the suppliers’ sites assess compliance with these standards. Additionally, the structured stakeholder dialogue as well as partnerships with organisations such as the United Nations Framework Convention on Climate Change, the Fair Labour Association or the Partnership for Sustainable Textiles promote transparent communication and the exchange of best practice standards. Further information on sustainability topics can be found in the Sustainability Statement chapter of the group management report.

Tax law

As a global company PUMA is exposed to a complex tax environment with main challenges arising from cross-border transactions involving intercompany transfer of goods, services, and intellectual property. Tax risks may affect PUMA's consolidated net income. To minimise tax exposure, it is essential to optimise tax planning activities and ensure compliance with local and international laws and reporting requirements. In addition to compliance with national tax regulations applicable to individual group companies, there are increasing risks related to intra-group transfer pricing requirements. These must be applied for various internal business transactions in accordance with the arm's length principle between related parties. Different countries have implemented laws and guidelines for international taxes in alignment with the Organisation for Economic Cooperation and Development (OECD) recommendations to standardise transfer pricing requirements.

In order to manage tax-related risks effectively, PUMA has established a tax governance framework. This includes a tax organisation with internal and external tax experts, with the aim to comply with the relevant tax regulations and to react to changes in the constantly evolving tax environment. For the group-internal transfer pricing, corresponding documentation and policies are in place and aligned with international and national requirements and standards. Guidelines and regulations for determining transfer pricing for intragroup transactions apply to foreign subsidiaries. They comply with the applicable internal procedures and are binding for employees acting on behalf of the Group. By means of internal tax reporting, external and internal tax experts can control and monitor tax developments at PUMA on an ongoing basis. Training and awareness activities are performed on a regular basis to ensure relevant stakeholders are informed about current tax developments and acquire further expertise for tax treatment activities. Both the Management Board, and the Supervisory Board, are regularly informed about ongoing tax developments at PUMA to identify and avoid tax-related risks as early as possible.

Media & stakeholder activities

Media reports and social media content significantly shape the public perception of PUMA. Negative or inaccurate reporting, as well as speculation regarding PUMA, its business practices or products, can significantly damage the brand image and lead to misinterpretations of the corporate strategy, business performance or financial position. As a result, sales and profit losses could occur.

To manage these risks, PUMA relies on careful press and social media work as well as proactive exchange with relevant stakeholder groups. Continuous monitoring of the media and social media environment enables the early identification of potential reputational risks. Clearly defined crisis communication processes ensure that consistent, transparent and compliant communication is guaranteed promptly in all situations. If necessary, PUMA is also supported by external specialist consultants in the areas of communication and stakeholder management.

Personnel department

PUMA’s employees and their skills are primary success factors for achieving PUMA’s strategic and financial targets. Effective personnel management is therefore material for the stability and future viability of the entity. Risks can arise in particular from staffing shortfalls, intense competition for qualified specialists and managers, as well as from the potential departure of key personnel, whose loss could lead to a loss of know-how and impairments of critical business processes. Further risks can result from non-compliance with employment law as well as health and safety-related requirements, which could lead to accidents, regulatory consequences, operational interruptions, and reputational damage. During the reporting period, the exposure was assessed as increased, triggered by staff turnover within the scope of PUMA’s cost efficiency programme as well as by organisational and structural changes.

To manage risk, PUMA uses internal resources even more targetedly and intensifies recruitment for strategic key positions. Furthermore, the entity relies on a human resources strategy that promotes independent working, an open corporate culture, and flat hierarchies. A systematic control process identifies and assesses personnel-related risks and ensures that key personnel are identified early, further developed if necessary, and secured through structured succession planning. National and global policies ensure compliance with labour law as well as health and safety requirements. Regular analyses of employee retention, satisfaction, and reasons for joining support the targeted further development of personnel-related measures.

Explanation of the opportunity situation

Opportunities should be recognised, assessed and, where possible, exploited by PUMA at an early stage. Opportunity management is a company-wide responsibility that starts at the strategic level and extends through operational management to all employees. As part of the annual strategic planning, budget and medium-term process, identified opportunities are systematically integrated into PUMA's overall planning approach. For the planning period and beyond, PUMA has identified and defined several material opportunities.

PUMA looks back on more than 77 years of sports history and holds a unique position in sports and sports culture. PUMA’s extensive product archive, the long-standing partnerships with globally successful teams and athletes, including Manchester City, Borussia Dortmund and the Portuguese national team, as well as high visibility in international football leagues and on high-growth community platforms such as HYROX, form a solid foundation for the perception of the brand as an authentic and relevant player in sports. These factors strengthen PUMA’s credibility in numerous important sports and create a direct connection to millions of fans worldwide.

However, it became apparent last year that the PUMA brand has lost desirability. A too commercially oriented product offering that failed to succeed in the market and low distribution quality in 2025 led to a dilution of brand perception. In response to this, PUMA initiated a comprehensive reset with the aim of establishing itself globally as a top three sports brand, growing stronger than the industry average in the medium-term and achieving healthy profits. This reset opens substantial opportunities for the future development of the entity.

A significant opportunity arises from the strategic refocusing on PUMA's sports DNA. With a clear performance-first approach, PUMA ensures that products are consistently developed from sports and generate visible relevance there. Going forward, PUMA is focusing on the categories football, running, training and Sportstyle Prime & Select to drive future growth. Building on a strong heritage in football, the 2026 World Cup in the USA, Mexico and Canada offers an outstanding opportunity to showcase PUMA's products on a global stage. Performance innovations remain a key component of the brand strategy. In the running segment, PUMA will further develop its industry-leading NITRO™ technology to make the best athletes even faster. PUMA's successful positioning in the training segment, particularly through the long-term partnership with HYROX, opens up significant potential to expand market share in a high-growth performance category. Significant opportunities also arise in the Sportstyle segment. PUMA's exceptionally rich archive enables the upgrade of iconic products, while the performance-first approach contributes to sports performance increasingly shaping design trends. The combination of sports authenticity, innovative technology and design will lead to a sharper brand positioning that can create sustainable growth potential.

Another material opportunity lies in PUMA's revised brand operating model, which focuses on consistent alignment with consumers worldwide. Through more precise marketing investments, better managed product families based on the extensive PUMA archive, and the integrated development of products and story-telling, an integrated brand presence is created that conveys authentic and inspiring stories and produces products with which Puma’s consumers identify. This sustainably promotes Puma’s global brand strength. Initial steps to realise these opportunities have already been implemented through a realignment of the organisational structure, including the creation of a clear global management structure and the redistribution of responsibilities, particularly through the stronger integration of Brand Marketing, Product, Creative Direction, Innovation and Go-to-Market activities.

In addition to market-side potential, there are also significant strategic opportunities in sales. The streamlining of the wholesale business, the reduction of highly commercialised mass-produced goods and increased discipline in the Direct-to-Consumer channels create the basis for better sales quality and higher brand value creation. The stronger focus on brand-driven segments in wholesale and the further development of the distribution channel mix with the aim of a higher Direct-to-Consumer share improve control over the brand experience and enable higher margins. With the opening of the new flagship store on London's Oxford Street, there is also the opportunity to visibly redefine the PUMA brand and sustainably strengthen the consumer experience.

Material opportunities also arise from the planned reduction of the cost base. PUMA will specifically eliminate operational inefficiencies by streamlining the product range, including a significantly lower number of newly introduced articles per season. A globally clearly defined range reduces complexity, increases profitability and improves brand perception through a focused and higher-quality product offering. In addition, PUMA is extending its cost efficiency programme beyond the existing ‘nextlevel’ initiative in order to structurally address increased operating expenses and realise additional efficiency potential.

Overall, the reset programme opens up a multitude of strategic opportunities that will enable PUMA to become a global sports brand with global product ranges and global storytelling in all markets. While 2025 is a year of reset and 2026 will be a transition year, PUMA is confident that the above-mentioned actions, including their opportunities, are an important step to put PUMA back on a growth trajectory from 2027 onwards.

overall assessment of the risk and opportunity situation

The assessment of the overall risk and opportunity situation of the Group and PUMA SE is based on a consolidated view of the risk and opportunity categories described above for the financial year 2025. Although individual risks have increased, the overall risk situation has not changed significantly compared to the previous year. The Management Board is currently not aware of any risks that, individually, in aggregated form or in combination with other risks, could jeopardize the continued existence of the Group or PUMA SE. However, it cannot be excluded that in the future influencing factors, of which we are currently unaware or which we currently do not consider to be material, could have a significant impact on the continued existence of the Group, PUMA SE or individual consolidated companies.