Puma Se Unsp/Adr

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the Q3 2025 earnings call of Puma SE. Throughout today's recorded presentation, all participants will be in listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Manuel Bösing, Director, Investor Relations. Please go ahead.

Thank you very much, Maura. Hello, everyone, and welcome to PUMA's conference call for the third quarter of 2025. Joining me today are our CEO, Arthur Höld, and our CFO, Markus Neubrand. Arthur and Markus will take you through the presentation, and afterwards, we'll open the floor for questions. Before we begin, please note the cautionary statements regarding forward-looking information on the next slide. For the Q&A, we kindly ask you to limit your initial questions to two per person so that as many participants as possible have the opportunity to join the discussion. With that, I'll hand it over to you, Arthur.

Thank you, Manuel, and good afternoon and welcome from my side here as well, from Herzogenaurach. Very happy that we can share with you today an assessment of where I see PUMA after three months in the job, but also equally more important, our plans to move forward. Let me just briefly make a personal comment that I'm incredibly excited about the opportunity to lead PUMA into the future. I'm very excited about the legacy, the credibility that this brand has And also about the potential that we will jointly here as a company and as a brand build on in the future. It's an opportunity to rebuild and reconnect one of the strongest brands in the sporting goods industry. And I'm a strong believer in the future and in the potential of the cat. Well, let me start. Why is that? First and foremost, it is based on the strong, strong archive and the strong brand history that Puma has 70 years, 77 years since its foundation in 1948. When you go through decades of sporting history, you'll always see Puma at the very forefront. But it was with our football players that have been dominating the fields and the pitches across the world, starting with the Portuguese star Ezebio Maradona Pelé, Croy, Lothar Matthäus. Puma was always there when it mattered, when the big games were being played. Still today, Usain Bolt is the fastest man on earth. The fastest man who has clocked their time with the support of Puma and the incredible shoes we provided for him. But also in the era of where sports meets style and sports meets culture, our groundbreaking innovation with Jill Zander back in the days set the tone for an entire industry. We fast forward to today, our athletes. Our athletes are winning and our athletes are performing in Puma products, apparel, footwear, accessories. Only recently, Wander Duplantis didn't only win the gold medal in the Tokyo Track and Field Athletics Championships, but he also did it with great style, setting another new world record. The captain of a German basketball team, Dennis Schröder, another Puma athlete, took the German team to become European and world champion at the very same time. And also, when you look at the qualification status, the teams that have already qualified and secured their position for the 2026 World Cup in North America, out of the 28 teams, seven will be wearing Puma. So we're absolutely up at the top on an on-par with competition. And why is that? because we at Puma are providing the best platforms and the best technologies for athletes to win and succeed. When you look at Nitro, arguably the most innovative running platform that is in the market today. Winning awards, but equally or even more important, getting amazing feedback by athletes. Athletes are wearing the product to set records, to win races, and to improve their personal bests. And Nitro, I would say, is one of the most or the best kept secrets in our industry and provides significant potential. Equally, we have relaunched our collaboration and extended our collaboration with Hyrox, a fitness and running movement that will only gain traction in the years to come. It is already a drawing. Huge crowds and huge audiences, participants from all over the world, wherever the events take place. In most cities to date, High Rocks participation is higher than of the marathons. Marathons have been run for more than 100 years, and High Rocks as an event series is only seven years old. PUMA is the exclusive partner when it comes to product development and communication around High Rocks as a future growing sports. And last but not least, of course, we're very proud of our global reach. We have so many, many partnerships, being it in the field of soccer with the likes of Man City, being it in Formula One or our style collaborations with ASAP Rocky, just to name a few of them. And it also highlights that we're one of the very, very few brands that is credible in pretty much all sports that matter around the globe. Puma is well positioned in all categories where athletes are competing, where records are broken, and where new standards are being achieved. And finally, Of course, we are a brand very proud of that. We are a brand that is well-known and well-liked everywhere around the globe. We are present, we're noticed, and we're certainly a brand that has a global reach, dating back to a long history, but also our achievements over time. Yet, of course, at this point in time, it is important that we do consider and do recognize the shortcomings and the issues that Puma has is having right now and what is holding Puma back to succeed. First and foremost, I would like to address the notion of a lack of brand heat. What you see here on the slide is a research that we've commissioned at the beginning of the year, which clearly states a situation that we are not happy with. We are a brand that is lagging behind our competitors at the moment. We're certainly a brand that doesn't command the same attention or brand love or brand heat that is required in order to succeed in the market. Second to that, we're also realizing that our share, our channel mix between DTC and wholesale is not on par with competition. On the right hand side, you see the industry benchmark, which basically says that most competitors are having their business 60% in wholesale with customers and 40% in DTC. Our share is only 30% in DTC, which means it limits our opportunity to showcase our product, to excite consumers directly with our storytelling, and also determine how we're going to show up in the marketplace. It also is worthwhile notifying that out of a global top 10 customers that we service, three of them are in the segment that we call mass merchants. Mass merchants are usually places where off-price business, off-season business is sold in a very wide distribution and in a not very brand-enhancing manner. This is certainly an issue for us as a brand, and that is something we have started to tackle, and I'll talk about that one in the very close future. Our product offering is also not cutting. You might ask yourself why that is. With outline three, very simple reasons for that. A, we have way too many products, and we're supplying way too many articles each and every season into the trade. That means our range is complex, and therefore our efforts don't really cut through. That also leads to the fact that our icons, the key products that Puma should be known for, are not really established. Consumers don't really know when you're asking them about Puma What is the key product that that brand stands for? And that is certainly a huge opportunity for us. And thirdly, on the page here, we also have to recognize that we're sometimes scaling our efforts too fast and too soon. We don't take the time to build up what could become a commercial success, what could become a great franchise with the right approach, with the right go-to-market, and with the right go-to-market and commercial strategy. So therefore, also, we're not efficient enough when it comes to our lifecycle management. That is also something that we have realized here at the company. Storytelling is not really as integrated as it should be. Between the product teams, the marketing teams, and the sales teams, we're acting too fragmented. We're too much organized in silos. but we therefore don't really create holistic and interesting enough marketing concepts that have a lasting commercial growth within the market. As a result of that, we do have to realize and to recognize that Puma as a brand has become too commercial over the years. Too commercial from a distribution perspective, too commercial from a pricing, and also from a promotion perspective. And that is something which applies globally for our brand, unfortunately. Consequence of that, and Marcus will talk a little bit more about that, is of course that we have acquired a high level of inventories. A high level of inventories both from our very own perspective, so in our own warehouses, in our stores, which has led to a very unfavorable situation over the last few quarters. At the same time, and that is on the right-hand side displayed here, we're not happy with our weak cover or the rate of sales within key and major customers. As this chart or this graph exemplifies we're overexposed. We have too much stock also with our customers to date, which leads to an unfavorable sellout situation. Our sales line in 2025 has dropped. We've alluded to that one already in our last call, and Marcus will elaborate further on that. Our expected EBIT loss in 2025 is also something which we have talked about, and that is a consequence of the dropping sales plan, but also about the measures that we have taken over the last few months. And we do, of course, also recognize that our cost base at the same time is absolutely not sustainable, and some who've taken immediate action on which we course correct for the future to come. So these are all things which we have recognized as weaknesses and as opportunities for us moving forward. Over the last few months, we've called into immediate actions to course correct them. So when I was talking about a lack and a deficiency in our distribution, we have started to clean up what we call undesirable wholesale business. We have stopped deliveries. We have taken a top-line hit with those undesirable customers, basically. We have started to clean up our overstocked wholesale partner. And I want to reiterate, we have started to clean up That is something which we'll continue to do in the next couple of quarters as well, actually. And also, most notably, we have reduced the discount in our very own channels. So whether it's e-commerce or retail, we have started to show up as a more healthy brand again. They come on to price points which consumers are absolutely willing to pay for our products. From a cash management perspective, we reduced our PO placement for next year. That means we'll deliver product and we'll deliver stock into the market according to demand that we see to avoid over-interested situation like we've built up in recent years. We're also very concerned and we've made great efforts moving forward with our account receivables and our overviews. From OPEX perspective, we have taken both tactical measures but also we have addressed our operational inefficiencies. We will also reduce significantly our range size and the complexity how we go to market as a brand. We are also announcing immediate restructuring measures. That means, for example, we are going to significantly reduce our product range. The amount of product that we're creating but also clarity with which how we're going to go to market and with which we have an integrated distribution that will be significantly focused and allow us to succeed and to penetrate the market much better than we've done in previous years. In order to improve our operating model, we're also going to be much more integrated future between the brands, the business unit, and our so-called go-to-market unit. We're also looking at a different way of orchestrating us between the global and the local entities in the future. One of the consequences is that over the year 2025 and 2026, we are going to reduce our workforce, our corporate workforce, by 1400 positions. That's about 20% of that population in Puma. 500 of those positions have already been covered with the Next Level Initiative, which was communicated first half of 2025, the remainder of that, so another 900 positions, will be used over the course of 2026. And that is certainly something which will be a clear effort for us in order to save costs and to expand our program further between 2025 and into 2026. We have also announced leadership changes. So two months ago, we have appointed a new chief operating officer with the name of Andreas Hubert. He will in the future be responsible for sourcing, logistics, and our digital and technology strategy. This year, this week also, we have announced the expansion of Maria Valdez's role. She will increase the responsibilities from chief product officer to now also be in charge of brand and marketing and go-to-market with her title now being chief brand officer. We have also added new leadership personnel to our team. We have a new leader of HR appointed two weeks ago. We have a new leader in retail, a channel that we've split from e-commerce from a global perspective, starting with us 1st of November. We also have a new leader in the VP&A area, Ian Stirling, and we have also with Manuel that is on the call with us today, a new leader of our Invest Relations team. So many changes also from a people and from a leadership perspective. And with that, I would like to hand over to Markus to take you through our current Q3 results.