14.05.2013
PUMA SE DE0006969603
DGAP-News: PUMA SE: Trading Environment dents PUMA's First Quarter Sales and Profit
DGAP-News: PUMA SE / Key word(s): Quarter Results
PUMA SE: Trading Environment dents PUMA's First Quarter Sales and
Profit
14.05.2013 / 08:00
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PRESS RELEASE
Trading Environment dents PUMA's First Quarter Sales and Profit
Herzogenaurach, May 14, 2013
2013 First Quarter Facts
- Consolidated sales fall by 2.3% currency adjusted to EUR 782 million
- EPS reduced from EUR 4.92 to EUR 3.36
- Transformation and Cost Reduction Program on track
- New Chief Executive Officer Björn Gulden appointed
- PUMA partner Borussia Dortmund reaches Champions League final
Michael Laemmermann, Chief Financial Officer of PUMA SE: 'In the current
challenging business climate, especially in Europe and in Asia, we are
continuing to implement our Transformation and Cost Reduction Program aimed
at improving efficiencies and our cost base. This will increase PUMA's
profitability in the long-term. Confirming our increased focus on
Performance, PUMA's visibility and credibility as a premium football brand
have been further enhanced with Borussia Dortmund's progress to the
Champions League final.'
Sales Performance by Region
Business climate in Europe remains challenging
Sportlifestyle company PUMA recorded a decline in first quarter sales as
Eurozone retail spending continued to weaken and sales in Asia were
affected by an unusually long winter. Sales fell by 2.3% in currency
adjusted terms to EUR 782 million when compared to the first quarter of
2012.
PUMA's sales in the Americas improved by 1.8% currency adjusted to EUR 260
million. There were strong performances in Mexico and Brazil, where
Teamsport was bolstered by Rio de Janeiro soccer club Botafogo, and
Argentina, where Lifestyle collections are resonating well. Our Cobra PUMA
Golf division continues to deliver outstanding results, which is also
reflected in rising sales in North America.
Sales in the EMEA region were impacted in particular by the softening in
retail spending, exacerbated be the unusually long winter, and fell by 4.8%
currency adjusted to EUR 348 million.
Strong performances in Russia, Turkey and the D-A-CH region, where classic
footwear models such as the Suede and new Motorsport apparel lines
resonated well, could not completely offset weak performances in Italy and
France. Steadfastly high levels of unemployment in the southern regions of
the Eurozone added to the difficult retail environment.
In the Asia/Pacific region, sales declined by 2.9% currency adjusted to EUR
173 million. India, supported by excellent sales in Running and Teamsports,
and Australia delivered positive performances which could not quite offset
the less satisfactory numbers from Japan, where there was an unusually
harsh winter, and China, where Fitness & Training products in particular
did not perform as expected.
Satisfying retail performance
PUMA's Retail sales increased by 13.9% currency adjusted to EUR 135
million, representing a 17.3% share of total sales. This rise in sales was
supported by excellent results from our e-commerce business, particularly
in North America.
Sales Performance by Segment
Lack of Sporting Events impacts Footwear Sales; Mobium on the Rise
In the first quarter of 2013, Accessories performed exceptionally well
during the first three months of 2013, rising by 11.9% currency adjusted to
EUR 152 million. This outstanding performance was once again led by Cobra
PUMA Golf and our North American joint venture for socks and bodywear.
Apparel sales declined modestly in the first quarter by 1.1% currency
adjusted to EUR 256 million. Although Fundamentals were lower, Cobra PUMA
Golf and Running continued to perform well. In Teamsport, the spotlight
remains firmly on our most successful team, Borussia Dortmund, whose
journey to this season's Champions League final at the end of May has
captured the imagination of football fans around the world underlining
PUMA's position as a premium football brand.
PUMA has also recently successfully introduced its ISPO award winning PUMA
ACTV and RCVR performance apparel. By fusing compression technology with
inbuilt athletic taping, ACTV and RCVR apparel increase the body's
performance and improve its recovery times, taking this category to the
next level.
Footwear sales declined by 7.8% currency adjusted to EUR 373 million. The
decline was caused in part by the Teamsport category, which did not perform
as well in a non-event year, and Training & Fitness was impacted by the
shrinking demand for toning products. In Lifestyle PUMA's new range of
Suede and Archive Lite Models were very well received, with our Future
Suede Lite and TX-3 shoes resonating extremely well with consumers in the
Asia/Pacific region.
Following the launch of 'The Nature of Performance' brand platform to
revitalize our Performance categories, PUMA Running was invigorated by our
new Adaptive Running shoe, the PUMA Mobium Elite. The Mobium Elite is
delivering encouraging sell-through in many markets, including the United
States and Asia/Pacific region.
Transformation Program being implemented according to plan
The implementation of PUMA's Transformation Program continued during the
first quarter. The set up of PUMA's new Business Unit, supported by our
Performance and Lifestyle pillars, is now complete and the evolution to a
market and consumer focused organization continues. Each of PUMA's six
Business Units will be managed by one fully accountable Business Unit
General Manager. Each team is wholly situated at one location to be able to
react faster to consumer trends and optimize each team's efforts. PUMA's
European consolidation of 23 countries into 7 areas is also on track, with
our D-A-CH and Iberia areas now established. In retail, 45 underperforming
stores were closed by the end of the first quarter.
PUMA will continue to execute on all of the measures set out under the
Transformation and Cost Reduction Program in 2012 in order to benefit the
Company in both the mid- and long-term.
Margin, Expenses and Profitability
Gross Profit Margin softens to 49.1%
PUMA's gross profit margin fell from 51.2% to 49.1% year on year. Pressure
on the gross profit margin in the first quarter came in the most part from
two sources: Substantial currency headwinds due to the negative hedging
position in the first quarter of 2013 compared to the same period last
year, and also continued inventory management with a particular focus on
Footwear, combined with higher input costs. As a consequence, Footwear
margins dropped from 49.5% to 46.1% and Apparel retreated from 53.5% to
51.5%, while Accessories improved from 51.9% to 52.6%.
OPEX decrease as a result of the Transformation and Cost Reduction Program
The broad approach undertaken to reduce costs by PUMA under both programs
enabled the Company to reduce operating expenditure in nearly all areas,
resulting in a decrease in OPEX of 3.9% to EUR 310 million.
Operating Result (EBIT) impacted by drop in gross profit margin
Despite the cost savings achieved by the measures undertaken under the Cost
Reduction Program, operating profit declined in the first three months of
2013 from EUR 102 million to EUR 79 million due to the decline in sales and
gross profit margin. As a consequence, the EBIT ratio decreased from 12.4%
last year to 10.1% this year.
Financial Result declines
The financial result declined from EUR 1.1 million to EUR -4.0 million in
the first quarter, due mainly to negative currency conversion impacts.
Earnings before Taxes (EBT) retreat
PUMA's EBT for the first quarter declined to EUR 75 million in 2013
compared to EUR 103 million in 2012, representing 9.6% of sales compared to
12.6% for the same period last year. Consequently, tax expenses abated from
EUR 28 million to EUR 22 million, representing a tax rate of 29.3% versus
27.1% for the first quarter of 2012.
Net Earnings soften
Consolidated net earnings dropped by 32.0% from EUR 74 million to EUR 50
million. Earnings per share therefore also fell back from EUR 4.92 in 2012
to EUR 3.36 in the first quarter of 2013.
Net Assets and Financial Position
Equity continues to strengthen
PUMA's equity base continued to strengthen, with the equity ratio moving up
slightly from 66.4% to 66.7% compared to the first quarter of 2012.
Shareholder's equity is now equivalent to EUR 1,676 million, up from EUR
1,652 million.
Working Capital increases
PUMA's overall Working Capital increased by 7.0% to EUR 775 million due to
the reduction of working capital related liabilities. A continued strong
emphasis on inventory management resulted in almost flat stock levels at
EUR 592 million. Trade receivables declined by 4.3% to EUR 594 million, due
to the lower revenues in the quarter.
Cashflow / Capex
The Free Cashflow improved from EUR -200 million last year to EUR -154
million this year due to lower payments for acquisitions in spite of the
decline in earnings before tax.
Capex declined from EUR 14 million to EUR 9 million, which was mainly
invested in the opening and refitting of selected retail stores as well as
office and IT equipment.
Cash Position improved
PUMA's net cash position improved slightly from EUR 203 million to EUR 207
million at the end of the first quarter.
General Matters
New Chief Executive Officer appointed
PUMA SE's Administrative Board appointed Björn Gulden as PUMA's new Chief
Executive Officer (CEO), effective 1 July 2013. Björn brings to PUMA an
extensive international experience of nearly 20 years in the sporting goods
and footwear industry, where he has held a variety of senior management
positions.
Outlook for the Financial Year 2013
In view of PUMA's first quarter results and of continuing economic
uncertainty in certain key markets, Management now expects a low- to
mid-single-digit decline in currency-adjusted full-year net sales. This
forecast represents a slight downward revision compared to the guidance
provided with the 2012 full-year results.
Management reiterates its expectations for continued pressure on the gross
profit margin. Under these circumstances, PUMA is also unlikely to meet its
original guidance of low- to mid-single-digit growth in EBIT before special
items. However, PUMA's Management confirms that it expects net earnings to
increase compared to the 2012 level.
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.
PUMAPUMA is one of the world's leading Sportlifestyle companies that designs and develops footwear, apparel and accessories. It is committed to working in ways that contribute to the world by supporting Creativity, SAFE Sustainability and Peace, and by staying true to the principles of being Fair, Honest, Positive and Creative in decisions made and actions taken. PUMA starts in Sport and ends in Fashion. Its Sport Performance and Lifestyle labels include categories such as Football, Running, Motorsports, Golf and Sailing. Sport Fashion features collaborations with renowned designer labels such as Alexander McQueen, Mihara Yasuhiro and Sergio Rossi. The PUMA Group owns the brands PUMA, Cobra Golf and Tretorn. The company, which was founded in 1948, distributes its products in more than 120 countries, employs more than 10,000 people worldwide and has headquarters in Herzogenaurach/Germany, Boston, London and Hong Kong. For more information, please visit http://www.puma.com End of Corporate News --------------------------------------------------------------------- 14.05.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- 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: MDAX Listed: Regulierter Markt in Frankfurt (Prime Standard), München; Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, Stuttgart; Terminbörse EUREX End of News DGAP News-Service --------------------------------------------------------------------- 210866 14.05.2013
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