09.02.2017
PUMA SE DE0006969603
DGAP-News: PUMA SE: PUMA improves in 2016
DGAP-News: PUMA SE / Key word(s): Final Results/Quarter Results
PUMA SE: PUMA improves in 2016
09.02.2017 / 10:00
The issuer is solely responsible for the content of this announcement.
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PRESS RELEASE Q4 2016
PUMA improves in 2016
Sales growth across all regions and product segments and improved operating
results in Fourth Quarter and Full Year
Herzogenaurach, February 9, 2017
2016 Fourth-Quarter Facts
- Sales increase by 10% currency adjusted to EUR 958 million (+9%
reported) with growth across all regions and product segments
- Gross profit margin up 180 basis points at 44.6%
- OPEX increase by 13% caused by higher marketing and retail investments
as well as higher sales related variable costs
- Improvement in operating result (EBIT) by 30% to EUR 14 million
- FENTY PUMA by Rihanna Creeper awarded "Shoe of the Year 2016" by
Footwear News in the US
2016 Full-Year Facts
- PUMA's full-year sales up 10% currency adjusted to EUR 3,627 million
(+7% reported)
- Gross profit margin improved by 20 basis points to 45.7%, despite
stronger US Dollar
- Improved operating leverage with OPEX increasing by only 6%
- Operating result (EBIT) up 33% to EUR 128 million
- Earnings per share increased from EUR 2.48 last year to EUR 4.17 in
2016
- Strong improvement in Free Cashflow from EUR -99 million 2015 to EUR 50
million 2016
- An increase of the dividend from EUR 0.50 to EUR 0.75 per share for the
financial year 2016 will be proposed
- Strong performances by PUMA athletes at the UEFA EURO 2016 and Olympic
Games in Rio
- Continued strong visibility of PUMA's women's category through "FENTY
PUMA by Rihanna" - fashion shows and launch of the "DO YOU"
communication platform with model, actress and activist Cara Delevingne
Bjørn Gulden, Chief Executive Officer of PUMA SE:
"The fourth quarter developed as expected with solid growth in both sales
and EBIT. We have seen a continued increase of interest in our products and
brand both from consumers and retailers. The sell-through of our new
product launches has been good.
2016 ended as we had hoped with revenue growth in all regions and product
segments as well as a significant increase in EBIT and net earnings. The
year has confirmed, that our strategy has been right and we will continue
to invest in our mission of becoming the Fastest Sports Brand in the World.
We feel confident that we will continue to see revenue growth and a
significant increase in earnings again in 2017."
Fourth Quarter 2016
Sales:
PUMA's sales growth continued in the fourth quarter 2016, improving by
10.1% currency adjusted to EUR 958.2 million (+9.0% reported) with positive
developments in all regions and product segments.
The EMEA region performed extraordinarily well, reporting a double-digit
growth rate of 13.4% currency adjusted to EUR 298.4 million (+10.4%
reported). This was achieved in spite of strong comparable sales last year
(Q4 2015 +21% currency adjusted).
In the Americas region, sales increased by 9.9% currency adjusted to EUR
393.0 million with growth in North- and Latin America. In Euro terms sales
grew by 6.7%, as the weakness of currencies in Latin America, notably in
Argentina, continued to have a negative impact on reported sales.
The Asia/Pacific (APAC) region performed well with sales increasing by 6.8%
currency adjusted to EUR 266.8 million (+11.1% reported). China was the
main driver of this positive development.
Footwear continued to drive the strongest growth among the three product
segments, showing an improvement of sales for the tenth quarter in a row.
Sales were up 17.6% currency adjusted (+15.3% reported) and amounted to EUR
416.0 million, with success particularly coming from the Sportstyle and
Fundamentals categories.
Apparel showed moderate growth in the quarter with sales increasing by 3.7%
currency adjusted to EUR 366.6 million (+3.3% reported), as sales in Q4
last year were driven by the Euro Cup replica business.
Sales in Accessories improved by 7.5% currency adjusted to EUR 175.6
million (+7.5% reported), driven by a strong performance of our North
American accessory business in the fourth quarter.
Gross Profit Margin and Operating Expenses:
Despite ongoing negative currency impacts from a stronger US Dollar, PUMA
managed to improve the gross profit margin in the fourth quarter by 180
basis points to 44.6%. This was achieved mainly by selective price
adjustments and lower discounts. In addition, a higher share of own retail
sales, which carry a higher margin, had a positive effect on the gross
profit margin. The Footwear margin increased by 300 basis points from 38.6%
to 41.6%. The Apparel margin was stable at 46.5% and the Accessories margin
improved from 43.7% to 47.6%.
Operating expenses (OPEX) increased by 12.6% to EUR 416.6 million. The
increase of operating expenses in the quarter is mainly due to further
marketing and retail investments as well as higher sales related variable
costs in connection with the growing retail and eCommerce revenues.
Operating Result and Net Earnings:
The operating result (EBIT) grew by 30.2% to EUR 14.1 million. This
development is a result of the increase of sales and the improvement of the
gross profit margin in the quarter.
Taxes on income in the fourth quarter showed an income of EUR 0.4 million
(prior year: expense of EUR -2.8 million) as a consequence of the
adjustment of tax provisions, after tax audits for prior years were
finalized. The net earnings attributable to non-controlling interests
increased from EUR 11.1 million to EUR 17.2 million because of the strong
business development of our North American joint ventures - distributing
accessories in the region -during the fourth quarter.
As a consequence, net earnings came in at EUR -4.6 million compared to EUR
-4.3 million last year, translating into earnings per share of EUR -0.31
after EUR -0.29 in the fourth quarter of 2015.
Full Year 2016
Sales:
In the financial year 2016, PUMA's sales improved by 10.2% currency
adjusted to EUR 3,626.7 million (+7.1% reported). The currency-adjusted
increase was slightly above the sales guidance for the full year 2016,
which had anticipated currency adjusted growth to be in the high single-
digit range. All regions and product segments contributed to the positive
development with Footwear being the main growth driver.
Sales in the EMEA region showed the highest increase, rising by 13.2%
currency adjusted to EUR 1,382.7 million (+9.9% reported), with France and
the DACH area (Germany, Austria, Switzerland) having developed particularly
well. From a product perspective, all three product segments recorded
double-digit growth in the region.
In the Americas region, sales rose by 8.3% currency adjusted to EUR 1,339.6
million. Both, North- and Latin America contributed to this positive
development. In Euro terms sales grew only by 2.2%, as the weakness of
currencies in Latin America, notably in Argentina, continued to have a
negative impact on reported sales.
The Asia/Pacific region was also a strong driver of the overall growth of
PUMA in 2016. Sales were up by 8.5% currency adjusted to EUR 904.5 million
(+10.5% reported). China with a double-digit increase and India with a
strong momentum supported the growth in the region.
Sales in PUMA's Footwear segment amounted to EUR 1,627.0 million,
representing an improvement of 12.6% currency adjusted (+8.0% reported).
The Running, Sportstyle and Fundamentals categories all achieved major
gains.
Apparel sales grew by 9.6% currency adjusted to EUR 1,333.2 million (+7.1%
reported) with a positive development in all product categories except
Motorsport.
Accessories sales rose by 5.9% currency adjusted to EUR 666.5 million
(+4.7% reported) thanks to a continued strong socks and bodywear business,
in spite of a flattish golf hardware business.
Including eCommerce, PUMA's own and operated retail sales increased by
12.5% currency adjusted to EUR 794.3 million. This represents a share of
21.9% of total sales in 2016 (21.4% in 2015). The reasons for this rise are
a like-for-like sales growth in our retail stores and the extension of our
retail store network, as well as a strongly growing eCommerce business.
Gross Profit Margin and Operating Expenses:
The gross profit margin improved 20 basis points from 45.5% last year to
45.7% for the full year 2016. Selective price adjustments and sourcing
improvements were the main drivers that more than offset the negative
currency impact from the stronger US Dollar in 2016 compared to 2015. This
was especially true in the Footwear segment where margins increased from
41.2% to 42.5%. However, Apparel margins eased from 49.3% to 48.4% and the
Accessories margins declined slightly from 48.0% to 47.9% in 2016.
Operating expenses (OPEX) increased by 5.7% and amounted to EUR 1,544.5
million in 2016. The increase is mainly due to additional marketing
activities as well as investments in our own retail store network and IT-
infrastructure. Other operating functions managed to keep costs stable.
Operating Result and Net Earnings:
The operating result (EBIT) improved by 32.6% from EUR 96.3 million to EUR
127.6 million. This result is slightly above our EBIT guidance for the full
year 2016 of a range between
EUR 115 million and EUR 125 million. With sales growing faster than
operating expenses, PUMA was able to benefit from operating leverage, while
in addition the gross profit margin improved slightly.
The financial result improved from EUR -11,2 million last year to EUR -8,7
million this year due to lower interest payments and lower expenses from
currency conversion.
The tax rate for the full year 2016 came in at 25.7% compared to 27.5% last
year. The adjustment of tax provisions, after tax audits for prior years
were finalized, contributed to the decrease of the tax rate.
Net earnings improved by 68.0% and came in at EUR 62.4 million (last year:
EUR 37.1 million). This result translates into earnings per share of EUR
4.17 compared to EUR 2.48 in 2015.
Working Capital
Despite higher sales and business volumes as well as a higher number of
owned and operated retail stores, PUMA's working capital increased only
slightly by 0.7% to EUR 536.6 million. This development underpins the
strong performance of our working capital management. Inventories were up
9.4% at EUR 718.9 million in order to ensure product availability and to
support further growth as well as to meet the increased need for products
due to our additional retail stores. Trade receivables rose moderately by
3.3% to EUR 499.2 million and trade payables were up 11.7% to EUR 580.6
million.
Cashflow
The free cash flow before acquisitions improved significantly by EUR 154.8
million from a cash outflow of EUR -98.3 million last year to a cash inflow
of EUR 56.5 million in 2016. This achievement is a result of higher
earnings before taxes (EBT) combined with an improved working capital
development, in spite of the extended business volume. As of December 31,
2016, PUMA's cash position amounted to EUR 326.7 million compared to EUR
338.8 million at the balance sheet date last year.
Dividend proposal of EUR 0.75
Based on PUMA's positive business development in 2016 with an improvement
of profitability and cashflow, the Administrative Board will propose a EUR
0.25 increase of the dividend to
EUR 0.75 per share for the financial year 2016 at the Annual General
Meeting on April 12, 2017.
Brand and Strategy Update
The results achieved in 2016 show that PUMA is starting to gain momentum:
Throughout the year, we focused and invested in events, products, and
campaigns that took us yet again a step closer to becoming the Fastest
Sports Brand in the World. For us, 2016 was particularly exciting and
characterized by the following major highlights: The football tournaments
Copa América and UEFA Euro 2016, the Olympic Games in Rio and the fantastic
development of our women's category.
In our Teamsport category, PUMA's five participating teams in the UEFA Euro
2016 in France secured an on-field presence of almost 40% across all
matches. A major highlight was France's Antoine Griezmann, who was voted
'Player of the Tournament' by UEFA after being the top scorer. Stars like
PUMA player Olivier Giroud, who ranked third in the tournament's scoring
table and Portugal's Rui Patrício, who was voted the Goalkeeper of the
Tournament, sported PUMA's yellow-pink "Tricks" boots on the pitch.
Last week, PUMA player Adam Lallana of Liverpool F.C. was named 2016
England Player of the Year following a vote among members of the England
Supporters club.
Last Sunday, PUMA-sponsored Cameroon beat Egypt to win their fifth Africa
Cup of Nations football title with a fabulous goal in the 89th minute of
the final for a 2-1 come-from-behind victory.
In our Running category, a memorable event for PUMA were last summer's
Olympics in Rio, where PUMA sprint star Usain Bolt again showed a
spectacular, world-class performance by winning an Olympic Gold medal in
each of the three sprinting events. Ahead of the 16th edition of the IAAF
Track and Field World Championships scheduled to be held in London in
summer this year, we are excited to see continued amazing performances of
the Fastest Man in the world.
In our Motorsport category, Nico Rosberg was crowned F1 champion, while
PUMA-partnered teams MERCEDES AMG PETRONAS, Red Bull and Scuderia Ferrari
claimed the first three places in the Constructors' Championship. Another
highlight was set by our partner BMW Motorsport and their driver Marco
Wittmann, who clinched the 2016 DTM Championship for the second time after
2014.
Our iconic success style, the "FENTY PUMA by Rihanna" Creeper, was
repeatedly sold out worldwide within mere hours of hitting the stores as
soon as we launched new colourways throughout the year. The Creeper has
demonstrated again and again that it is currently the hottest piece of
footwear around and has consequently been named "the only choice for the
2016 Shoe of the Year" by Footwear News.
In terms of strategy, we have continued to make progress along our five key
priorities: creating brand heat for PUMA as the Fastest Sports Brand in the
World, further improving the product engine with a strong pipeline of
exciting and commercial products, optimizing PUMA's distribution quality
through stronger sell-through with key retail partners. Furthermore we
enhanced our organizational speed and business processes as well as
strengthened PUMA's women's business. These priorities will be at the
center of our strategy going forward. While we still have a lot of work
ahead of us, we feel that 2016 took us a big step forward within each of
these areas.
We have further strengthened our brand heat by leveraging our brand
ambassadors and cultivating the hype in social media. We are proud to have
long-standing partnerships with some of the world's greatest athletes, such
as the Olympic legend Usain Bolt, who has been with PUMA for 15 years.
Additionally, we have new relationships with up-and-coming stars and
talents like the charismatic Olympic Silver-and Bronze-medalist André De
Grasse, the one-of-a-kind Cara Delevingne, the R&B star and style icon The
Weeknd, and of course, Rihanna who made a major impact in 2016.
On the product side, we introduced a number of key styles. The distinctive
PUMA Fierce has been an instant hit in terms of distribution, media
coverage and most importantly sales. Other new key footwear styles were the
performance shoe IGNITE Dual and the IGNITE Evoknit, a style for Street
Running that comes with a form-fitting, mid-height knitted upper. Our FENTY
collection, that features apparel and footwear, was very well received by
the press, retail partners and our consumers. Independent research has
shown that we have gained market shares in most geographies and channels,
showing that PUMA products are again resonating well with consumers, which
was also echoed by our retail partners.
To improve the quality of distribution, we continued to strengthen our
relationships with key strategic accounts and built new partnerships with
strong retailers in both established and emerging markets. One of the best
examples is our long-standing strong relationship with Foot Locker in North
America. For several years, we have now rolled out our jointly developed
retail concept "PUMA Lab". This has helped to lift product sell-through
well beyond the "PUMA Lab" doors, especially in Foot Locker's women-only
banner Six:02, where PUMA sales more than doubled in 2016. PUMA has also
gained traction with other important customers in the US, and also in
Europe, where PUMA returned to double-digit growth rates in many markets.
In China, our retail partners such as Belle and the YY Group opened around
200 additional PUMA doors in 2016.
PUMA's owned and operated retail sales developed quite strongly throughout
the year based on a like-for-like sales growth, an increased number of own
retail stores in operation, as well as significant momentum in our
eCommerce business. We also continued our worldwide roll-out of the
"Forever Faster" store layout, which contributed to this positive
development. We will further use this momentum with our most important
accounts, own retail stores and eCommerce across all geographies in 2017 to
drive our sales growth.
The improvements in systems, processes and organizational speed over the
last two years, led to even more flexibility in our supply chain in 2016. A
standardized global IT foundation allows for faster and better
communication. We have relocated employees closer to our suppliers'
production sites, increased local-for-local production in countries such as
India and Mexico and moved into a new highly-automated warehouse in the
United States. This all will ensure faster lead times for key markets in
line with our strategy of being Forever Faster.
Our Women's business received a lot of attention in 2016. Building on
PUMA's fashion credibility and sports authenticity, as well as profound
understanding of the modern female athletic consumer, we have positioned
PUMA to address the segment "where the gym meets the runway". Women
worldwide are more and more participating in sports, while taking
inspiration from athletic wear for their everyday wardrobe. In 2016, PUMA
successfully introduced cross-category collections by merging sports and
fashion. With our "DO YOU" campaign, which aims to inspire confidence in
women around the world, we are changing the way we address the female
consumer. In addition, we are collaborating with a number of famous female
brand ambassadors such as Rihanna, Kylie Jenner, Cara Delevingne and the
New York City Ballet to tell a powerful story. The reactions to our "FENTY
PUMA by Rihanna" runway shows during the New York and Paris Fashion Weeks
have been overwhelmingly positive and have created major social media buzz.
Our women-specific collections are among the best performers in terms of
both sell-in and sell-through. Many major retailers provided additional
space for our female collections. In many accounts, the success of our
women's line was actually a door opener to expand our shelf space with
men's and kids styles.
Outlook 2017
Based on the development in 2016, where we saw ongoing sales growth and an
improvement of profitability, we are confident that PUMA can continue the
momentum that it has gained as a brand. In 2017, we will further invest in
marketing and continue our Forever Faster brand communication to increase
our brand heat by leveraging our ambassadors and to position PUMA as the
fastest sports brand in the world. Our global marketing activities will
again be centered around athletes, including the World's Fastest Man and
sports icon Usain Bolt, star strikers like Sergio Agüero and Antoine
Griezmann, Golfstar Rickie Fowler, Arsenal Football Club, Borussia Dortmund
as well as global entertainment assets like multi-platinum recording
artist, designer and entrepreneur Rihanna, Kylie Jenner, Cara Delevingne
and the R&B star and style icon The Weeknd.
We will continue to work very closely with our retail partners. With our
improved product offering including recently launched styles such as the
Fierce, Basket Heart, IGNITE Dual and IGNITE Evoknit as well as our FENTY
collection we will continue to work hard to get more of the right PUMA
products on the shelves of our retail partners. In combination with further
investments in our own retail and eCommerce business we will support our
direct to consumer business. This should enable us to attract new customers
and to increase our market share in most geographies as well as to improve
our sell-through across all product categories.
For the full year 2017 we expect that currency-adjusted net sales will
increase at a high single-digit rate. The gross profit margin is forecasted
to improve to approximately 46.0% (2016: 45.7%). Operating expenses (OPEX)
are expected to increase at a mid to high single-digit rate, as PUMA will
continue to invest in marketing, in the modernization and expansion of the
owned and operated retail store network and in IT-infrastructure. At the
same time, management will continue to place a strong emphasis on strict
control of other operating costs.
At the current exchange rate levels, PUMA's management expects that the
operating result (EBIT) will improve significantly in 2017, thanks to
operating leverage, as sales will increase stronger than OPEX, combined
with a slightly improved gross profit margin. EBIT for the full year 2017
is therefore expected to come in between EUR 170 million and EUR 190
million. Net earnings will also continue to improve significantly in 2017.
PUMA's management is optimistic that 2017 is another important year with
great opportunities and that PUMA is well positioned to carry the brand's
positive momentum into 2017 and beyond.
Financial Calendar FY 2017:
February 9, 2017 Financial Results FY 2016
April 12, 2017 Annual General Meeting
April 25, 2017 Quarterly Statement Q1 2017
July 26, 2017 Interim Report Q2 2017
October 24, 2017 Quarterly Statement Q3 2017
The financial releases and other financial information are available on the
Internet at "about.puma.com".
Media Relations:
Kerstin Neuber - Corporate Communications - PUMA SE - +49 9132 81 2984 -
[email protected]
Investor Relations:
Johan-Philip Kuhlo - Head of Investor Relations - PUMA SE - +49 9132 81
2589 - [email protected]
Notes to the editors:
- The financial reports are posted on www.about.puma.com.
- PUMA SE stock symbol:
Reuters: PUMG.DE, Bloomberg: PUM GY,
Börse Frankfurt: ISIN: DE0006969603- WKN: 696960
Notes relating to forward-looking statements:
This document contains forward-looking statements about the Company's
future financial status and strategic initiatives. The forward-looking
statements are based on the current expectations and assumptions of the
management team. These are subject to a certain level of risk and
uncertainty including, but not limited to those described above or in other
disclosures, in particular in the chapter Risk and Opportunity Management
in the Group Management Report. In the event that the expectations and the
assumptions do not materialize or unforeseen risks arise, the Company's
actual results can differ significantly from expectations. Therefore, we
cannot assume responsibility for the correctness of these statements.
PUMA
PUMA is one of the world's leading Sports Brands, designing, developing,
selling and marketing footwear, apparel and accessories. For over 65 years,
PUMA has established a history of making fast product designs for the
fastest athletes on the planet. PUMA offers performance and sport-inspired
lifestyle products in categories such as Football, Running and Training,
Golf, and Motorsports. It engages in exciting collaborations with renowned
design brands to bring innovative and fast designs to the sports world. The
PUMA Group owns the brands PUMA, Cobra Golf and Dobotex. The company
distributes its products in more than 120 countries, employs more than
10,000 people worldwide, and is headquartered in Herzogenaurach/Germany.
For more information, please visit http://www.puma.com
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09.02.2017 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: PUMA SE
PUMA Way 1
91074 Herzogenaurach
Germany
Phone: +49 9132 81 0
Fax: +49 9132 81 2246
E-mail: [email protected]
Internet: www.puma.com
ISIN: DE0006969603
WKN: 696960
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard), Munich;
Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Hanover, Stuttgart, Tradegate Exchange
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