16.02.2015
PUMA SE DE0006969603
DGAP-News: PUMA SE: PUMA achieves Full-Year Guidance
DGAP-News: PUMA SE / Key word(s): Final Results
PUMA SE: PUMA achieves Full-Year Guidance
16.02.2015 / 10:00
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PRESS RELEASE
PUMA achieves Full-Year Guidance
New strategic direction "Forever Faster" successfully launched
Herzogenaurach, February 16, 2015
2014 Fourth Quarter Facts
- Consolidated sales grow to EUR 751 million, a currency adjusted
increase of 6.3%
- Positive trend in Footwear continues in Q4, up 4.3% currency adjusted
- Improvement of gross profit margin from 43.2% to 45.0%
- OPEX increase mainly due to "Forever Faster" marketing campaign
- EBIT before special items improves to EUR 11 million compared to EUR 1
million in Q4 2013
- Strong rise of net earnings due to special items booked in Q4 prior
year
- Rihanna announced as new PUMA Brand Ambassador
2014 Full Year Facts
- PUMA's full-year consolidated net sales increase by 3.3% currency
adjusted to around
EUR 3 billion
- Slight improvement of gross profit margin to 46.6% despite adverse
currency fluctuations
- OPEX rise as planned due to "Forever Faster" marketing campaign as well
as new sponsoring contracts
- EBIT reaches EUR 128 million
- Net earnings (2014: EUR 64.1 million; PY: EUR 5.3 million) and EPS
(2014: EUR 4.29; PY:
EUR 0.36) improved strongly; no special items
booked in 2014
Bjørn Gulden, Chief Executive Officer of PUMA SE: "The fourth quarter
developed as we had hoped, with a solid increase in sales and even stronger
improvement in EBIT and net earnings. We are especially pleased to see that
we again, for the second quarter in a row, had growth in our footwear
sales. Our full-year results are also in line with expectations. We stopped
the decline in sales and made progress with all our strategic priorities.
We now have a clear positioning, which will be strengthened through
increased investment into marketing and a clear use and celebration of our
assets. We are further focusing on communicating stories clearly. We have
made strides in improving our product and are working with our retailers to
further improve the quality of our distribution. Additionally, we have
started to improve our IT foundation and operations, to ensure a faster,
leaner, and more efficient set up in the coming years. In 2015, we will
continue to work towards our mission of becoming the Fastest Sports Brand
in the world while further improving our business along all strategic
priorities. The addition of Rihanna, as a Brand Ambassador and as one of
our creative directors, is a commitment to our increased focus on the
female consumer segment, as we truly believe that the "future is female".
We know that the turnaround will take time but feel that 2014 was a turning
point. We expect 2015 to confirm that we are moving in the right
direction."
Fourth Quarter 2014
Strong fourth quarter performance
In comparison with last year, consolidated sales in the fourth quarter of
2014 recovered and rose from EUR 698.3 million to EUR 750.8 million, which
represents a currency adjusted increase of 6.3%. This was driven mainly by
a stronger demand in the Americas as well as a considerable upwards trend
in Accessories and further recovery in footwear sales.
In the EMEA region, sales increased slightly by 0.6% currency adjusted to
EUR 224.8 million, as economic conditions in some continental European
countries remained challenging, while the UK enjoyed a very solid
performance.
Revenues in the Americas region increased strongly by 15.0% currency
adjusted to EUR 319.3 million. Solid performances in the USA and Canada and
strong growth rates in Argentina, Brazil and Mexico drove this performance.
Sales in the Asia/Pacific region rose slightly by 0.7% currency adjusted to
EUR 206.7 million. While China and India grew, Korea and Japan performed
below last year's levels.
PUMA's Footwear sales in the fourth quarter improved, up for the second
quarter in a row, by 4.3% currency adjusted to EUR 310.7 million. Apparel
sales improved by 3.6% currency adjusted to EUR 293.0 million, while
Accessories saw its sales increase sharply, up 17.1% currency adjusted to
EUR 147.1 million despite adverse market developments in the Golf category.
PUMA's gross profit margin increased from 43.2% to 45.0% in the fourth
quarter of 2014. Lower price reductions supported by a better product mix
in the quarter helped to improve the margin in Footwear and Apparel.
Footwear gross profit margin increased from 39.5% to 41.6%. Apparel margin
rose from 44.7% to 47.1%, while the margin for Accessories decreased
slightly from 48.4% to 47.8% impacted by the current weakness within the
Golf business.
After four consecutive quarters of decline, operating expenditures in the
fourth quarter of 2014 increased as a result of the intensified marketing
activities of PUMA. As a consequence - although PUMA maintained its focus
on a strict cost management - total OPEX rose by 8.6% from EUR 306.2
million to EUR 332.4 million during the quarter. Combined with the increase
in sales and the improved gross profit margin, this led to the higher EBIT
(before special items) of
EUR 10.6 million. As no special items were recorded in the fourth quarter
of 2014 (prior year:
EUR 129.0 million), the Operating Result (EBIT) increased significantly.
Earnings per share in the fourth quarter of 2014 came in at EUR -0.30.
Full Year 2014
PUMA's full-year sales increased 3.3% currency adjusted
Consolidated sales were in line with the guidance for 2014 and increased by
3.3% currency adjusted to around EUR 3.0 billion, which corresponds to a
slight decline of 0.4% in Euro terms, reflecting the currencies headwind
registered throughout the year. All regions contributed to growth, posting
currency adjusted growth rates in the year.
Sales in the EMEA region increased by 1.3% currency adjusted to EUR 1.2
billion, where strong performance in the United Kingdom more than offset
weaker French and Italian markets.
In the Americas, sales improved significantly by 6.7% currency adjusted to
EUR 1.1 billion thanks to a strong demand particularly from the U.S.,
Canada, Argentina and Mexico.
In Asia/Pacific, sales rose by 1.9% currency adjusted to EUR 696 million,
as a strong demand from India and China outbalanced a decline in Japan,
which was mostly related to the weaker Golf category.
In 2014, Footwear sales decreased due to a weaker first half by 2.4%
currency adjusted to
EUR 1.3 billion, while the second half showed growth in the segment. Sales
in Apparel rose by 7.6% currency adjusted to EUR 1.1 billion. Sales in
Accessories continued to improve and showed a significant increase of 9.3%
currency adjusted to EUR 586 million.
Sales growth continued in PUMA's Retail Business
In line with PUMA's strategy, PUMA continued to optimize its retail network
in 2014. While the company continued to open stores with a particular focus
on profitable new locations in growth markets, it carried on its program of
selective closures of unprofitable stores at the same time. As such,
comparable store sales were positive in the year and full-year retail sales
rose by 3.9% currency adjusted to EUR 618 million in 2014, equaling 20.8%
of total sales.
Slightly improved Gross Profit Margin
PUMA's full-year gross profit margin increased slightly from 46.5% to
46.6%, driven by positive margin developments in Apparel and Accessories
that were able to more than offset the decline in Footwear. Footwear margin
for the full-year stood at 42.6% versus 43.7% in the previous year. Margin
in Apparel increased significantly from 48.3% to 49.5%. Accessories gross
profit margin also increased from 49.8% to 50.0%.
Marketing efforts drive OPEX
Due to the increased marketing expenses for the "Forever Faster" brand
campaign, the football world cup in Brazil as well as the sponsoring of
additional football clubs and athletes, the full-year OPEX increased by
4.9% from EUR 1,216.9 million to EUR 1,276.8 million. At the same time,
savings were realized in other areas in line with the ongoing strict cost
management.
Operating Result (EBIT) before special items in line with guidance
As a consequence of the effects outlined above, full-year EBIT before
special items declined from EUR 191.4 million to EUR 128.0 million. This
corresponds to a 4.3% margin on net sales.
No Special Items in 2014
PUMA's 2014 results were not affected by any special items, while in the
previous year, PUMA recorded EUR 129.0 million.
Operating Result (EBIT) after special items increased
As a result, PUMA's EBIT after special items for the full year improved
from EUR 62.5 million to EUR 128.0 million, equivalent to an increase from
2.1% to 4.3% as a percentage of sales.
Financial Result improved
For the full year, PUMA's financial result improved from EUR -8.7 million
to EUR -6.2 million.
Net Earnings / Earnings per share increase
Full-year consolidated net earnings rose from EUR 5.3 million in 2013 to
EUR 64.1 million in 2014, with earnings per share increasing from EUR 0.36
to EUR 4.29.
Net Assets and Financial Position
Working Capital position continues to improve
The Group's working capital significantly declined by 13.8% from EUR 528.4
million to EUR 455.7 million. Inventories increased from EUR 521.3 million
to EUR 571.5 million at the end of 2014, while trade receivables rose from
EUR 423.4 million to EUR 449.2 million. As per the balance-sheet date,
trade liabilities increased from EUR 373.1 million to EUR 515.2 million as
a result of higher inventories and because of timing of payments.
Cashflow / Capex
PUMA's Free Cashflow improved from EUR 29.2 million at the end of 2013 to
EUR 39.3 million at the end of 2014. This was mainly due to lower Working
Capital requirements and was achieved despite an increase in CAPEX.
Cash Position improved
PUMA's year end Cash Position improved to EUR 401.5 million compared to
last year's EUR 390.1 million.
Dividend
The Administrative Board will propose a stable dividend of EUR 0.50 per
share for the financial year 2014 at the Annual General Meeting on 6th May
2015.
Strategy Update
To be the Fastest Sports Brand in the world
In 2013, Bjørn Gulden (CEO) introduced PUMA's new mission statement: To be
the Fastest Sports Brand in the world. The company's mission not only
reflects PUMA's new brand positioning of being Forever Faster, it also
serves as the guiding principle for the company expressed through all of
its actions and decisions. Our objective is to be fast in reacting to new
trends, fast in bringing new innovations to the market, fast in
decision-making and fast in solving problems for our partners.
Strategic priorities
Our strategy encompasses five strategic priorities: the repositioning of
PUMA as the World's Fastest Sports Brand, the improvement of our product
engine, the optimization of our distribution quality, increasing the speed
within our organization and infrastructure, and renewing our IT
infrastructure. In 2014, we continued to make further progress on all our
key strategic priorities to ensure that the year marks the start of a
turnaround.
In terms of our brand repositioning, August 2014 saw the successful launch
of our worldwide Forever Faster brand campaign - the biggest marketing
campaign in PUMA's history. This marked the start of our repositioning as a
true sports brand to our consumers and retail partners. The objective of
the campaign is to demonstrate that PUMA is back in sports and that our
brand has great assets and a distinctive attitude: Brave, confident,
determined, and joyful. We achieved this goal by focusing our campaign on
customers in 35 countries. In the first three months after the start, our
advertising generated 1 billion TV impressions in our target group as well
as 31 million online views. The market surveys showed a very positive
consumer reception. The launch of this campaign marked the start of a
long-term marketing strategy, which will be continued in 2015 and run
through the Rio de Janeiro Olympic Games in 2016 and beyond.
To improve our product engine, we initiated key projects to enhance our
product designs, develop more innovative technologies and increase the
commercial appeal of our product range. The first results have already been
implemented for the 2015 collections, and the feedback from our retail
partners make us very confident that we are heading in the right direction.
In order to improve the quality of our revenues and distribution, we have
developed joint product and marketing programs with our key retailers to
showcase our brand in the right retail environment and drive sell-through
with our partners. In February 2014, together with our partner Foot Locker
USA, we introduced the jointly developed retail concept "PUMA Lab" and
successfully rolled it out in the US market. The success of the PUMA Lab
has not only improved our business with Foot Locker USA but also generated
a positive spill-over effect onto other key retailers in the US marketplace
- both with performance and lifestyle accounts. In 2015, we will continue
to foster collaborations and launch further product and marketing programs
with our most important key accounts in every region.
In 2014, we also continued to optimize our organizational structure and
setup by making them leaner and faster. With the finalization of the
relocation of our Global and European Retail Organization from Oensingen,
Switzerland, to our Headquarters in Herzogenaurach as of September 30th, we
completed the last out of our three major consolidation projects in 2014.
This relocation followed the closure of our PUMA Village Development Center
in Vietnam in May and the relocation of our Lifestyle Business Unit from
London to our Headquarters in Herzogenaurach in June. In 2015, we will be
focusing on standardizing and optimizing processes between PUMA and its
partners. The key projects in this area are the implementation of a
sourcing organization to manage global order and invoice flows and the
conceptual design of a European trading company to optimize regional flows
of goods.
Another strategic priority is the renewal and expansion of our IT
infrastructure to create a basis for more extensive optimization measures.
In 2015, we will focus on three areas: optimize our basic IT
infrastructure, start the implementation of a standard ERP system to
support sourcing and trading functions, and set-up platforms to improve the
design, development and planning processes. We are very confident that our
investments in these areas will lay the foundation for a lean and efficient
company in the future.
Brand and Marketing Update
At the end of 2014, we added global cultural icon Rihanna to our roster.
Through this new multi-year partnership, Rihanna will serve as a global
brand ambassador. She will play a key role in PUMA's brand campaign Forever
Faster, featuring along PUMA's world-class athletes such as Usain Bolt and
Sergio Aguero. From Spring/ Summer 2016 on, she will serve as one of the
Creative Directors for PUMA, specially focusing on Women. Rihanna will
directly influence our Women's collections with her fresh, forward thinking
and non-traditional approach to sports, fitness and lifestyle. This marks
the start of a renewed focus on Women for the PUMA brand. In 2015, we will
further underscore our increased focus on female consumers by launching an
extended training range, starting with the Pulse XT, which will be endorsed
by Rihanna.
Our Autumn/Winter 2014 collection in Lifestyle saw a star reborn, when we
reissued the Becker OG, the classic mid top shoe that 17-year old Boris
Becker wore during his famous and groundbreaking Wimbledon win in 1985. A
timeless silhouette originally made for the tennis court, the Becker OG
merges the best of PUMA's performance heritage and design language.
In Motorsports, Lewis Hamilton of the PUMA-partnered Mercedes AMG Petronas
F1 team clinched his second drivers' World Championship ahead of his
teammate Nico Rosberg in the season-ending Abu Dhabi Grand Prix. Hamilton
wore the PUMA F1 Pro SLW, weighing only 99 grams. It is the lightest
Formula 1 shoe that currently exists.
The year 2015 has started very positively for PUMA as the 2015 Africa Cup
of Nations proved to be a fantastic stage for our football products with
Ivory Coast beating Ghana 9:8 in a thrilling penalty shootout, with both
teams being outfitted by PUMA. Led by their captain and PUMA star player
Yaya Touré, the "Elephants" put on a brilliant performance to claim their
second Africa Cup of Nations title after 1992. On the pitch in Equatorial
Guinea, Touré sported the next generation of our evoPOWER football boot,
designed to bring Power and Accuracy to a higher level. The innovative shoe
was launched at the beginning of this year through a "Head to Head"
campaign featuring PUMA key assets Mario Balotelli and Cesc Fàbregas.
In February 2015, a further innovation was launched in our running
category. Our most innovative running footwear technology to date,
introduced by the World's Fastest Man, Usain Bolt on New York City's Times
Square: IGNITE. Developed together with BASF over multiple years, IGNITE is
revolutionary to the business. PUMA's best ever, PU foam provides the
highest return of energy we have ever created, step-in comfort and
long-lasting durability with ForEverFoam. In subsequent seasons, additional
styles will be introduced and the IGNITE line will be expanded further
within our Running and Training category. In the second half of 2015, we
will continue our training and Ignite story with IGNITE XT trainer.
Outlook for the Financial Year 2015
After the successful launch of PUMA's Forever Faster campaign in autumn
2014, PUMA will continue its marketing investments in order to reposition
PUMA as the fastest sports brand of the world. The objective of PUMA's
brand repositioning is to increase brand heat and further replace lower
tier distribution with higher tier distribution in order to improve sales
quality and sell-through.
Together with improvements in the product offering, PUMA expects an
increase of its currency-adjusted net sales in the medium single-digit
range for the full year 2015, with sales in the first half expected to be
flat and growth occurring in the second half. The gross profit margin is
anticipated to improve slightly based on lower discounts and a favorable
product mix.
For 2015, PUMA is planning further strong investments in the "Forever
Faster" marketing campaign as well as in the upgrade of our current IT. We
are very confident that our investment in IT will lay the foundation for a
lean and efficient company in the future. As a consequence, PUMA's OPEX
will increase while management will continue to put a strong emphasis on
strict control of other operating costs.
The recent adverse developments of foreign exchange rates, particularly the
strengthening of the US-Dollar versus nearly all other currencies, could
lead to a significant negative impact on the reported gross profit margin
and the overall reported EBIT and net earnings of the PUMA group.
Because of these negative currency developments, PUMA has already taken and
will continue to take countermeasures, which should support a slight
increase in reported EBIT and net earnings.
Last year, PUMA has successfully taken the first steps to re-establish the
brand in the market place. 2015 will be the year to further enhance and
reinforce this brand positioning and to take a further step in getting PUMA
back to a path of profitable and sustainable growth.
Media Relations:
Kerstin Neuber - Corporate Communications - PUMA SE - +49 9132 81 2984 -
[email protected]
Investor Relations:
Beate Gabriel - Finance - PUMA SE - +49 9132 81 2375 -
[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
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
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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; Terminbörse EUREX
End of News DGAP News-Service
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