29.07.2014
PUMA SE DE0006969603
DGAP-News: PUMA SE: PUMA's First Half Results in line with Guidance (news with additional features)
DGAP-News: PUMA SE / Key word(s): Half Year Results/Change of
Personnel
PUMA SE: PUMA's First Half Results in line with Guidance (news with
additional features)
29.07.2014 / 08:00
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PRESS RELEASE
PUMA's First Half Results in line with Guidance
Negative Impact of Volatile Currencies Continues
Herzogenaurach, 29 July 2014
2014 Second Quarter Facts
- Currency adjusted sales increase slightly to EUR 652 million
- Gross profit margin improves to 46.7%, up 70 basis points vs. last year
- OPEX stable despite World Cup marketing expenditures
- EBIT of EUR 13 million
2014 Half Year Facts
- Currency adjusted sales flat at EUR 1.38 billion
- Gross profit margin stable at 47.7%
- Slight OPEX reduction of 1.2%
- EBIT of EUR 71 million
- EPS amounts to EUR 2.66
- Free cash flow increases by EUR 40 million due to improved working
capital
- Successful launch of Arsenal partnership
Bjørn Gulden, Chief Executive Officer of PUMA SE: "PUMA's second quarter
sales and operating profit developed in line with our expectations. I was
very happy with PUMA's visibility during the World Cup in Brazil. Feedback
on both our dual-colored Tricks football boots and our national team
jerseys with ACTV technology has been great. The sell-through of these
products has been excellent and exceeded our expectations. In addition, we
celebrated a successful Arsenal launch in July, followed by very good
initial sales at Retail of Arsenal replica jerseys. We are now looking
forward to launching our new "Forever Faster" marketing campaign in August,
which is another step in the process of becoming the "fastest sports brand
in the world". But, as I have said all along: We know that the
repositioning of PUMA and the turnaround of the business will take time.
However, I feel we are making progress on all our key strategic priorities
and we have initiated the right projects to make 2014 the start of the
turnaround."
Second Quarter 2014
Sales increase slightly
PUMA's consolidated sales in the second quarter of 2014 were in line with
expectations, rising by 0.6% currency adjusted to EUR 652 million. However,
due to continued currency weakness in Turkey, Russia, South Africa, India,
Japan and the Americas, sales declined by 5.8% in Euro terms.
Performance in the Americas improves
In the EMEA region, sales declined by 1.4% currency adjusted to EUR 256
million as strong performances in the United Kingdom and Switzerland could
not entirely offset a decline in French and Scandinavian wholesale
revenues.
Sales in the Americas increased by 4.6% currency adjusted to EUR 251
million, as key account initiatives like the PUMA Labs at Footlocker
contributed to the performance improvement in North America, and Latin
America benefited from increased Teamsport sales, particularly in Chile and
Mexico.
Sales in the Asia/Pacific region declined by 2.3% currency adjusted to EUR
146 million despite solid growth in Korea and India, as performance in
Japan was pressured by the sales tax increase at the beginning of the
quarter which led to a decline across categories.
Product segment trends continue
PUMA's currency adjusted Footwear sales declined by 9.1% in the second
quarter to EUR 278 million despite improved Teamsport sales.
Apparel sales, however, improved by 12.8% currency adjusted to EUR 241
million as the World Cup supported strong performances in replica jerseys
as well as training and fan wear, particularly for the Italian, Chilean and
African teams.
Accessories sales also improved by 3.4% currency adjusted to EUR 134
million due to continued demand for PUMA's socks and bodywear. However,
Golf equipment sales declined during the quarter due to the weaker golfing
environment.
Gross profit margin improves
PUMA's gross profit margin increased from 46.0% to 46.7% for the second
quarter of 2014 as promotional activities declined compared to the same
period last year. Footwear gross profit margin decreased from 44.1% to
42.7% due to the product and category mix. Apparel margins rose from 47.0%
to 48.2% and the margin for Accessories increased from 49.2% to 52.4%.
OPEX flat
Operating expenditures were broadly unchanged for the quarter at EUR 297
million, despite increased marketing expenditures associated with the World
Cup in Brazil.
Operating Result (EBIT) declines
The negative currency impact on sales and gross profit led to a decline in
PUMA's operating profit (EBIT) from EUR 31 million to EUR 13 million for
the second quarter of 2014. The EBIT ratio decreased from 4.5% to 1.9%.
Financial Result
The financial result improved from EUR -4.1 million to EUR -1.3 million in
the second quarter. The result remained negative due mainly to currency
conversion impacts.
Net earnings
PUMA's consolidated net earnings declined from EUR 18 million to EUR 4
million impacted in part by a slightly higher tax rate in the quarter due
to tax expenses related to prior years. As a result, earnings per share
decreased from EUR 1.17 to EUR 0.28 in the second quarter of the year.
Half Year 2014
Currency adjusted sales were flat in the first half of 2014 at EUR 1.38
billion. Continued currency weakness in the aforementioned countries led to
a decline of 6.5% in Euro terms.
Varied regional performance in the first half
Sales in the EMEA region declined by 0.5% currency adjusted to EUR 593
million, where strong performances in the United Kingdom and Turkey were
not enough to entirely offset lower sales in France and Scandinavia.
Currency adjusted sales in the Americas increased by 2.1% to EUR 486
million with improvements in some major markets including the USA and
Canada, while Chile performed well in Latin America.
Asia/Pacific sales declined by 2.2% currency adjusted to EUR 299 million as
decreases in Japan and Oceania could not be fully compensated for by
increases in India and Korea.
Apparel and Accessories increase
In terms of product segments, Footwear sales declined by 8.0% currency
adjusted to EUR 598 million in the first half of the year. Sales in Apparel
increased by 7.6% currency adjusted to
EUR 487 million, and Accessories sales also rose by 6.6% currency adjusted
to EUR 292 million.
PUMA's Retail sales rise
PUMA's retail sales increased by 2.9% currency adjusted to EUR 270 million
in the first half of 2014, equal to 19.6% of total sales, as comparable
sales in our stores improved during the period.
Gross Profit Margin stable
PUMA's half year gross profit margin was unchanged at 47.7%. The decline in
Footwear margin from 45.1% to 43.4% was offset by the increase in the
Apparel margin from 49.4% to 50.9%. Accessories margin was stable at 50.9%
for the first six months of the year.
Slight decline in half year OPEX
PUMA's operating expenditure improved slightly thanks to continued
expenditure discipline despite the higher marketing costs associated with
an event year. Half year OPEX improved by 1.2% from EUR 602 million to EUR
595 million.
Operating Result (EBIT) lower
Weak currencies continued to impact reported sales and gross profit. PUMA's
EBIT therefore declined from EUR 110 million to EUR 71 million for the half
year, equivalent to 5.2% of sales. The negative currency development during
2014, particularly in Emerging Markets, had a negative impact of approx.
EUR 15 million on the EBIT, equal to 1.1% of net sales.
Financial Result
For the half year, PUMA's financial result improved from EUR -8.0 million
to EUR -4.5 million. The negative result was caused mainly by the impact of
foreign currency fluctuations.
Net Earnings / Earnings per share decline
Half year consolidated net earnings fell from EUR 68 million to EUR 40
million, with earnings per share declining from EUR 4.54 to EUR 2.66.
Net Assets and Financial Position
Working Capital position continues to improve
PUMA's continued emphasis on the balance sheet delivered positive results.
Inventories declined by 7.9% to EUR 584 million and trade receivables also
decreased by 9.8% to EUR 463 million. As trade payables remained stable,
the Group's working capital improved by 13.0% to EUR 596 million.
Cashflow / Capex
PUMA's Free Cashflow improved from EUR -112 million to EUR -72 million for
the first six months of 2014. This was mainly due to lower Working Capital
requirements.
Capital expenditure rose from EUR 19 million to EUR 31 million as PUMA
continued to invest in the opening and refurbishment of selected retail
stores, as well as office and IT equipment.
Net Cash Position
PUMA's Net Cash Position at the end of the first half of the year improved
from EUR 233 million to EUR 267 million.
Brand Update
At the 2014 FIFA World Cup(TM) in Brazil, PUMA's eight partnered teams
secured a strong on-pitch visibility, participating in almost half of all
games in the tournament. The World Cup proved to be a great stage for
PUMA's innovative football products: Both our national team jerseys
featuring PUMA's apparel innovation PWR ACTV as well as PUMA's prominent
pink and blue interpretation of its revolutionary evoPOWER and evoSPEED
football boots 'Tricks', which could be seen in three quarters of all
games, were eye-catchers, creating lots of positive headlines. Combined
with high engagement rates on our social media channels, PUMA achieved its
best ever sell-through of football boots, with Tricks now widely sold out.
Starting July 1st PUMA has become the official kit partner of top English
Premier League club Arsenal FC. The company kicked off its new partnership
with the launch of the much-anticipated new Arsenal Home, Away and Cup kits
for the 2014/15 season. The jerseys were revealed through a spectacular
twenty meter high water projection on London's River Thames viewed from the
North Bank, transforming the EDF Energy London Eye into the iconic Clock
End. The jerseys generated impressive sell-through in its first week on
sale.
The fastest sports in the world, Formula 1, is currently dominated by the
world's fastest team, PUMA-supplied Mercedes AMG Petronas, with 9 wins in
the first 11 races. In a thrilling Hungarian Grand Prix ahead of Formula
1's four-week summer break, Lewis Hamilton finished third after starting
from the back of the grid. The Briton reduced the deficit to his teammate
Nico Rosberg, who is still leading the drivers' standings by 11 points
after his sensational win of the German Grand Prix at Hockenheim a week
before. With PUMA-partnered Ferrari driver Fernando Alonso currently
ranking fourth in the standings, almost all the top drivers are equipped
with PUMA race wear and the Evo Speed SLW Pro, the lightest shoe in the
Motorsports world.
Strategy Update
Our strategy encompasses the repositioning of PUMA as the World's Fastest
Sports Brand, the improvement of our product engine, the optimization of
our distribution quality and increasing the speed within our organization
and infrastructure. In the second quarter we continued to progress well on
all our key strategic priorities that are crucial to ensuring that 2014
marks the start of the turnaround.
In terms of our brand repositioning, we have created the biggest marketing
campaign in PUMA's history and are now ready to communicate the
repositioning of PUMA as a true Sports Brand to our consumers and retail
partners. The campaign demonstrates how our great athletes like Usain Bolt,
Mario Balotelli, Rickie Fowler, Marta, Lexi Thompson and Ferrari are the
epitome of our brand values: Brave, confident, determined, and joyful. The
campaign will be kicked-off on August 7th in North America, Latin America
and Asia-Pacific and will be rolled out to Europe and EEMEA shortly
afterwards. The launch of this campaign marks the start of a long-term
marketing strategy, with continuous investment up to the Rio de Janeiro
Olympic Games in 2016 and beyond.
To improve our product engine, we initiated key projects to improve our
product designs, develop more innovative technologies, and increase the
commerciality of our product range. The first results have already been
implemented for the coming Spring/Summer 2015 season, and the feedback from
our retail partners, as well as our initial indications for H1/2015, make
us very confident that we are heading in the right direction.
In order to improve the quality of our revenues and distribution, we are
developing joint product and marketing programs with our key retailers to
showcase our brand in the right retail environment and push sell-through
with our partners. The PUMA Lab at Foot Locker, which we launched in Feb
2014, has developed very positively and we increased the presence to 126
doors in the US. The success of the PUMA Lab has not only improved our
business with Footlocker but also generated a positive spill-over effect on
to other key retailers in the US marketplace - both with performance and
lifestyle accounts. In 2015, we will continue to foster our collaborations
and will launch further product and marketing programs with our most
important key accounts in every Region.
We have also continued to optimize our organizational structure and setup
by making it faster. Our PUMA Village development center was closed on May
2nd. Our developers have moved to the sample rooms in our supplier
factories and are now closer to the production process. As of May 31st, we
have finalized the relocation of our Lifestyle Business Unit from London to
our Headquarters in Herzogenaurach and closed the London office
accordingly. The relocation of our Global and European Retail Organization
from Oensingen, Switzerland, to our Headquarters in Herzogenaurach is
progressing well and will be finalized as planned by the end of September.
Outlook for the Financial Year 2014
2014 continues to be a turnaround year for PUMA, where the brand will be
re-established in the market place and brought back to a path of profitable
and sustainable growth in the mid-term. To support this turnaround, PUMA
will continue to invest strongly in marketing and sports assets, while
maintaining tight control on other operating expenditures.
Given PUMA's results in the first half of the year, we continue to expect
flat full year currency adjusted net sales and a slight increase in the
gross profit margin, as PUMA replaces lower tier distribution with higher
tier distribution channels. OPEX is still expected to increase
significantly based on increased Marketing investments, particularly in the
second half of the year. PUMA's full year guidance for EBIT and Net
Earnings (approx. 5% and 3% of net sales respectively) remains unchanged
from the first quarter; we reiterate that the continued volatile currency
movements may have a negative impact of around 50 basis points on the EBIT
and Net Earnings margin for the year.
Change of Managing Director
Andy Koehler, Chief Operating Officer (COO), informed the Administrative
Board that he wishes to leave PUMA for personal reasons, effective 31 July
2014. During his time at PUMA, Andy Koehler laid the strategic groundwork
to accelerate the transformation process in his area of responsibility.
PUMA is thankful for his contributions and wishes him all the best for his
professional and personal future. He will be available to the Kering Group
as a consultant.
Lars Radoor Soerensen has been appointed Chief Operating Officer (COO) of
PUMA SE as of 1 August 2014. Lars joined PUMA in November 2013 and has led
the areas of Business Processes and Intelligence as well as Information
Technology. Prior to joining PUMA, Lars was previously the Chief Operating
Officer at Bestseller and Esprit and before that he held leadership roles
at Adidas and Lego. PUMA is confident that Lars is the right person to lead
its operations and looks forward to having him as its new COO.
Media Relations:
Kerstin Neuber - Corporate Communications - PUMA SE - +49 9132 81 2984 -
[email protected]
Investor Relations:
Carl Baker - Finance - PUMA SE - +49 9132 81 3188 - [email protected]
Notes to the editors:
- This press release and financial reports are posted on
www.about.puma.com.
- PUMA SE stock symbol:
Reuters: PUMG.DE, Bloomberg: PUM GY,
Börse Frankfurt: ISIN: DE0006969603- WKN: 6969603
Notes relating to forward-looking statements:
This document contains forward-looking information about the Company's
financial status and strategic initiatives. Such information is subject to
a certain level of risk and uncertainty that could cause the Company's
actual results to differ significantly from the information discussed in
this document. The forward-looking information is based on the current
expectations and prognosis of the management team. Therefore, this document
is further subject to the risk that such expectations or prognosis, or the
premise of such underlying expectations or prognosis, become erroneous.
Circumstances that could alter the Company's actual results and procure
such results to differ significantly from those contained in
forward-looking statements made by or on behalf of the Company include, but
are not limited to those discussed be above.
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, Training and
Fitness, Golf, and Motorsports. It engages in exciting collaborations with
renowned design brands such as Alexander McQueen and Mihara Yasuhiro to
bring innovative and fast designs to the sports world. The PUMA Group owns
the brands PUMA, Cobra Golf, Tretorn, Dobotex and Brandon. 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
End of Corporate News
+++++
Additional features:
Document: http://n.equitystory.com/c/fncls.ssp?u=VDVPRUPFWO
Document title: PDF Version
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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: Regulierter Markt in Frankfurt (Prime Standard), München;
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
Stuttgart; Terminbörse EUREX
End of News DGAP News-Service
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