26.07.2018
PUMA SE DE0006969603
DGAP-News: PUMA SE: Strong Quarter with 15% growth in sales and 33% growth in EBIT PUMA confirms EBIT target for the full year 2018
DGAP-News: PUMA SE / Key word(s): Half Year Results/Quarter Results
PUMA SE: Strong Quarter with 15% growth in sales and 33% growth in EBIT PUMA
confirms EBIT target for the full year 2018
26.07.2018 / 08:00
The issuer is solely responsible for the content of this announcement.
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PRESS RELEASE Q2 2018
Strong Quarter with 15% growth in sales and 33% growth in EBIT
PUMA confirms EBIT target for the full year 2018
Herzogenaurach, July 26, 2018
2018 Second Quarter Facts
- Sales increase by 15% currency-adjusted to EUR 1,049 million (+8%
reported) with double-digit growth in all regions and product segments
- Gross profit margin improves to 48.6% mainly due to more sales of new
products carrying a higher margin and positive currency effects
- Operating expenses (OPEX) increase 11% due to higher sales related
variable costs, higher marketing and retail investments
- Operating result (EBIT) up by 33% to EUR 58 million (last year: EUR 43
million)
- PUMA share included in MDAX
- Governance structure of PUMA SE changed from monistic SE to dualistic SE
- Long-term partnership with Belgian football star Romelu Lukaku announced
- Antoine Griezmann and Lukaku claim second and third Top Scorer rank at
World Cup
- PUMA announces re-entry into Basketball category
2018 Half-Year Facts
- Sales increase by 18% currency adjusted to EUR 2,180 million; reported
growth is only 10.5% due to the negative impact from currency translation
- Gross profit margin up 160 basis points at 48.4%
- Operating expenses (OPEX) increase 9% related to intensified marketing
activities, higher sales related variable costs and higher retail
investments
- Operating result (EBIT) improves by 50% from EUR 114 million to EUR 170
million
- Net earnings increase from EUR 71.5 million last year to EUR 98.5 million
and earnings per share increase from EUR 4.79 last year to EUR 6.59
respectively
- Women's category continues successful "Do You" campaign
Bjørn Gulden, Chief Executive Officer of PUMA SE:
"The second quarter developed positively for us with sales growing
organically 15% and EBIT increasing 33%. All regions and all product
divisions posted double digit organic growth. The continued strength of the
Euro gave us headwind in reported sales, but along with other currency
effects, this also impacted our gross margin positively.
The first six months of the year showed major shifts in product trends and
consumer demand, especially for footwear. But we feel that our "fast
attitude" and quick reaction time allowed us to continue our growth.
We got very positive feedback to our plans of re-entering the Basketball
category and both - the announcements of our new NBA players and the
revelation of the product - were well received from retailers and basketball
fans.
The World Cup in Russia was a good event for us with PUMA players Antoine
Griezmann and Romelu Lukaku making it almost to the top of the scorer list
in second and third place. The launches of the collections for our new top
clubs AC Milan, Olympique de Marseille and Borussia Mönchengladbach were
further highlights and have shown our commitment to football.
Despite the changes in product trends and the uncertain business environment
caused by volatile currency rates and difficult global trade environment, we
feel confident that we will reach our full-year EBIT target between EUR310
million and EUR 330 million which is a growth of around 30%."
Second Quarter 2018
PUMA's sales growth continued in the second quarter of 2018. Sales rose by
15.0% currency-adjusted to EUR 1,049.2 million. All regions contributed with
double-digit increases. Footwear continued to be the main growth driver and
Apparel and Accessories also grew at a double-digit rate. However, currency
translation effects due to the strength of the Euro against most other
currencies negatively impacted the sales development in reported terms
(+8.3%).
The gross profit margin improved to 48.6% in the second quarter (last year:
46.5%). The increase is mainly related to more sales of new products with a
higher margin, further sourcing improvements and positive currency effects.
Operating expenses (OPEX) rose by 11.1% to EUR 456.3 million in the second
quarter. The increase of operating expenses is due to further marketing
activities and higher sales related variable costs based on increased sales
volumes and higher retail investments related to the increase of our store
count.
The operating result (EBIT) increased from EUR 43.4 million last year to EUR
57.6 million due to a strong sales growth combined with an improved gross
profit margin.
Net earnings increased from EUR 21.9 million to EUR 31.1 million and
earnings per share were up from EUR 1.46 in the second quarter last year to
EUR 2.08 correspondingly.
First Half-Year 2018
Sales for the first half-year 2018 were up by 18.3% currency adjusted to EUR
2,180.3 million. All regions showed double-digit growth with Footwear being
the main growth driver. The strong Euro against most other currencies
significantly impacted our reported sales growth, that amounted to 10.5% in
the first half of 2018.
Including eCommerce, PUMA's own and operated retail sales increased by 23.7%
currency adjusted to EUR 490.0 million. This represented a share of 22.5% of
total sales for the first half of 2018 (21.8% in the previous year). The
reasons for the rise are a like-for-like sales growth in our own retail
stores, the extension of our retail store network and a continued strong
growth of our eCommerce business.
The gross profit margin improved by 160 basis points from 46.8% to 48.4% in
the first half of 2018. The increase came mainly from more sales of new
products with a higher margin and further sourcing improvements. In
addition, positive currency effects materialized in the second quarter.
Operating expenses (OPEX) increased 9.3% and amounted to EUR 893.7 million.
The increase was driven by higher sales related variable costs, intensified
marketing activities and investments in the refurbishment and expansion of
our own retail store network.
The operating result (EBIT) grew by 49.6% from EUR 113.6 million last year
to EUR 169.8 million in the first half of 2018 due to a strong sales growth
and a higher gross profit margin. This corresponds to an EBIT-margin of 7.8%
compared to 5.8% in the first half last year.
Net earnings improved by 37.8% and came in at EUR 98.5 million (last year:
EUR 71.5 million). This translates into earnings per share of EUR 6.59
compared to EUR 4.79 in the first half of 2017.
Working Capital
Currency effects and our continued focus on working capital management led
to a decrease of working capital of 2.1% to EUR 685.2 million. Without these
currency effects, working capital would have increased by approximately 6%,
which is lower than the growth in our business. Inventories were up 4.7% at
EUR 890.5 million and trade receivables grew by 12.8% to EUR 633.6 million.
On the liabilities side, trade payables and other current liabilities were
up by 16.2% to a total of EUR 1,026.8 million.
Cashflow
As a result of the increase in earnings before taxes (EBT) and the positive
working capital development, the free cash flow improved from EUR -117.9
million to EUR -103.3 million in the first half of 2018. Cash and cash
equivalents increased, as did our bank liabilities due to the dividend
payment (EUR 186.8 million) made in the second quarter. As a result, our net
cash position declined to EUR 88.8 million (last year: EUR 152.4 million).
Outlook 2018
Our full-year guidance for EBIT remains unchanged and we continue to expect
the operating result to come in between EUR 310 million and EUR 330 million.
This is now the combined effect of a currency-adjusted increase of net sales
between 12% and 14% (previous guidance: between 10% and 12%), a gross profit
margin improvement of approximately 100 basis points, and a high
single-digit rate increase in OPEX related to additional investments in
sports marketing and higher sales related variable costs. Management still
expects that net earnings will improve significantly in 2018.
Change of Governance Structure
Following the distribution of approximately 70% of the PUMA shares by Kering
S.A. to its shareholders, PUMA's free float has increased from approximately
14% to 55%. The distribution took place on May 16th and was accompanied by
investor communication, including road shows and a capital markets day, on
PUMA's side. The feedback from the financial community confirms the
confidence into PUMA's strategy and opportunities.
PUMA's Annual General Meeting resolved on April 12, 2018 to replace the
existing monistic management system of the Company with the dualistic
management system and to amend the Articles of Association accordingly. The
dualistic management system consists of the Management Board (Vorstand) as
the management body and the Supervisory Board (Aufsichtsrat) as the
supervisory body. The changes to the Articles of Association were entered
into the Commercial Register of the Local Court in Fürth on July 9, 2018.
Accordingly, the change in the governance structure became effective on that
day. The Management Board consists of Bjørn Gulden (CEO), Michael Lämmermann
(CFO) and Lars Sørensen (COO). The Supervisory Board consists of
Jean-Francois Palus (Chairman), Jean-Marc Duplaix, Béatrice Lazat, Thore
Ohlsson elected by the shareholders and Martin Köppel as well as Bernd Illig
elected by the employees.
Brand and Strategy Update
Thanks to our partnered athletes and teams as well as our other brand
ambassadors, PUMA successfully strengthened both its sports and lifestyle
positioning in the first half of 2018.
A major highlight was the announcement of PUMA's re-entry into the
Basketball category. Jay-Z has taken the role of Creative Director for PUMA
Basketball. In this capacity, he will be overseeing the creative strategy,
creative marketing, and product design for all basketball-related products.
Marvin Bagley, Deandre Ayton, Zhaire Smith, Michael Porter Jr. and Rudy Gay
are the first NBA players to wear performance PUMA basketball shoes on court
in 20 years. In addition to a clear commitment to performance on the court,
PUMA will leverage its credibility in the cultural environment around
basketball, which is getting increasing attention of American consumers. Our
re-entry into the Basektball category is clearly a commitment to the North
American market and a building block to strengthening our business also in
other performance categories.
In Football, all eyes were on the FIFA World Cup 2018 in Russia. Our four
national teams - Uruguay, Switzerland, Serbia and Senegal - along with a
variety of outstanding individual players ensured a high visibility of the
PUMA brand during the tournament. Half of our partnered teams reached the
second stage, while two out of the top three scorers of the tournament,
Antoine Griezmann (2nd) and Romelu Lukaku (3rd), are PUMA players.
Griezmann, who led the French team to victory with his goal, was named "FIFA
Man of the Match" in the World Cup final. Together with Olivier Giroud and
Belgian striker Romelu Lukaku, Griezmann ensured a high visibility of our
brand in the final matches of the competition. Our players wore PUMA's
latest technologies, the PUMA FUTURE and PUMA ONE, in customized editions.
In club football, the end of the 2017/18 season was marked by excellent
performances of our players on the pitch. All goals of the UEFA Europa
League final were scored by PUMA players, as Griezmann and Gabi shot the
three goals to Atlético Madrid's victory. In Mexico, PUMA-partnered team
Santos Laguna won the Liga MX Clausura, the closing tournament of the top
level Mexican football league.
With Olympique de Marseille, A.C. Milan, Borussia Möchengladbach and São
Paulo football club Palmeiras joining the roster of the brand's prestigious
football clubs, PUMA will strengthen its position in international football
for the upcoming seasons. The 2018/19 jerseys of the newly signed clubs have
just been revealed and received positive fan and media feedback.
In Running and Track & Field, our sponsored athletes impressed with world
class performances. The 19-year old Cuban Juan Miguel Echevarria took the
first place at the Stockholm Diamond League Meeting with his incredible long
jump of 8.83m, which was chosen as the "2018 Season Highlight" by the IAAF.
At the XXI Commonwealth Games, PUMA athletes won an impressive total of
eleven medals. Olympic and World Championship silver medalist Will Claye won
the men's Triple Jump by setting a new world-leading mark with 17.43m at the
World Indoor Championships in Birmingham.
Earlier this year, we enlarged our portfolio of federations by signing a
long-term partnership with the Norwegian Athletic Federation. Furthermore,
PUMA is proud to have two new top athletes joining its roster: French
sprinter and European record holder in 100m Jimmy Vicaut and Italian high
jumper Gianmarco Tamberi.
In Motorsport, our three partnered F1 Teams MERCEDES AMG PETRONAS, Scuderia
FERRARI and RED BULL RACING continue to dominate in Formula One, being
currently ranked among the top three positions, both in the drivers' and the
constructors' championships.
Our strategy has continued to focus on our five priorities: Increasing brand
heat, offering a competitive product range, proposing a leading offer for
women, improving the quality of distribution and strengthening our
organizational infrastructure. We feel that PUMA is on the right track as
our strategy, marketing and products are starting to show results. This has
been once again confirmed by improved financial results, increased
sell-through performance and the continued positive feedback from our retail
partners.
Working with the right influencers and letting them communicate on behalf of
our brand has become an essential part of our strategy: We have contracted
new athletes, cultural icons and influencers, who have helped to further
fuel PUMA's brand heat, such as Selena Gomez, the most followed person on
Instagram. Selena has been working alongside PUMA's design team to create
exciting products for our female consumers.
Our Women's category continued our successful "Do You" campaign with its
powerful ambassadors, including Cara Delevingne and the dancers of the New
York City Ballet. Key styles behind our women's footwear business were the
training shoes PHENOM, MUSE and MUSE ECHO, while the newly launched DEFY
showed promising first results.
Four-time Formula One World Champion Lewis Hamilton embodies the Men's
training proposition "24/7". With this product line, PUMA has redefined its
performance philosophy, offering products that perform everywhere from the
gym to the street - 24/7. As part of this collection, PUMA just launched the
training shoe Mantra FUSEFIT.
Another footwear success was the recently launched THUNDER, which won the
hearts of the fashion-forward crowd with its disruptive design, and its
bulky, unapologetic look. The first two product drops sold out within hours.
Quality of distribution remains a focus for PUMA. We continue to give high
priority to the benefit of our retail partners. We work hard every day to
ensure that our contribution to their business is positive and further
improving. Feedback from our retail patners continues to be good. Retailers
in most channels have started to dedicate more shelf space to PUMA, allowing
for our business to be based on a broader selection of styles.
We have also continued to improve our organizational structure and
infrastructure. One aspect with high visibility is the completion of our
extended headquarters building in Herzogenaurach, that now hosts more than
1,000 employees together under one roof in a state of the art facility. This
not only allows for faster communication and better alignment, but also adds
to our great team spirit.
Financial Calendar FY 2018:
February 12, 2018 Financial Results FY 2017
April 12, 2018 Annual General Meeting
April 24, 2018 Quarterly Statement Q1 2018
July 26, 2018 Interim Report Q2 2018
October 25, 2018 Quarterly Statement Q3 2018
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
13,000 people worldwide, and is headquartered in Herzogenaurach/Germany. For
more information, please visit http://www.puma.com
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26.07.2018 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.
The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
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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: MDAX
Listed: Regulated Market in Frankfurt (Prime Standard), Munich;
Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Hanover, Stuttgart, Tradegate Exchange
End of News DGAP News Service
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