06.11.2015
PUMA SE DE0006969603
DGAP-News: PUMA SE: Results in line with expectations
DGAP-News: PUMA SE / Key word(s): Quarter Results/9-month figures
PUMA SE: Results in line with expectations
06.11.2015 / 08:00
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PRESS RELEASE
Results in line with expectations
Growth in all product categories / positive trend in Footwear continues
Herzogenaurach, November 6, 2015
2015 Third Quarter Facts
- Reported sales up by 8.4% to EUR 914 million (+3.1% currency adjusted)
- Growth in Footwear driven by Running and Training category
- Gross profit margin down 50 basis points to 45.8% due to adverse
currency effects
- OPEX increase due to marketing/retail activity, IT investments, and
currency impacts
- Operating result (EBIT) comes in at EUR 41 million
- First appearance of Rihanna in PUMA TV ads and first Rihanna inspired
footwear launch
- Second wave of Forever Faster marketing campaign focuses on Training
featuring IGNITE XT and PUMA brand ambassadors
- PUMA athlete Usain Bolt wins three gold medals in Beijing, underlining
PUMA being the Fastest Sports Brand in the World
2015 Nine Month Facts
- Reported sales grow by 12.9% (+4.9% currency adjusted) to EUR 2,509
million, in line with expectations
- Gross profit margin falls by 80 basis points to 46.4% due to currency
effects
- OPEX amount to EUR 1,090 million due to higher marketing activities,
retail expansion, and IT investments as well as adverse currency
impacts
- Operating result (EBIT) amounts to EUR 85 million
- Earnings per share come in at EUR 2.77
- Performance products especially in Running and Training have continued
to show good sell-through
Bjørn Gulden, Chief Executive Officer of PUMA SE:
"PUMA's sales in the third quarter developed as expected with growth in all
product categories. I am happy to see that our footwear category has
increased for the fifth quarter in a row. I am especially pleased to see
that also the sell-out at retail to the end consumer is continuously
improving in all categories. The launch of the first PUMA BY RIHANNA shoe,
the "Creeper", has been extremely successful and most retailers have sold
out within hours or days. We have generally seen a very positive
development in our Women's business and we will put even more focus on the
female consumer going forward. The continued volatile currency trends in
some markets and the weakness of the Euro, especially towards the US
Dollar, continues to put pressure on gross profit margin, OPEX, and net
earnings. We have taken and will continue to take countermeasures but, as
already indicated in the last two quarters, we cannot fully offset these
negative impacts on our earnings. Good feedback from retailers, better
sell-out and a solid order book validate our outlook for the fourth quarter
and allow us to confirm our full-year guidance."
Third Quarter 2015
Currency adjusted sales in line with expectations
In the third quarter of 2015, sales developed as anticipated: PUMA
generated consolidated sales of EUR 914.4 million, representing an increase
of 3.1% currency adjusted. In reported terms, the growth versus last year
was 8.4%.
Americas outperform EMEA and Asia/Pacific region
In the third quarter, sales in the EMEA region (Europe, Middle East, and
Africa) declined slightly by 3.6% currency adjusted to EUR 375.7 million.
This result compares against high prior year figures, when last year's
performance was positively impacted by the Arsenal launch in the third
quarter and included sales of Tretorn (the trademark rights were sold in
the second quarter 2015). Without these effects, sales in the EMEA region
would have been flat in the third quarter.
Growth in the Americas continued, with North and Latin America both showing
strong performances, with sales up 10.8% currency adjusted to EUR 325.1
million. The United States were one of the key growth drivers with sales
increasing double-digit.
In Asia/Pacific (APAC), sales were up 5.0% currency adjusted to EUR 213.6
million. While China and India showed substantial growth within the region,
sales in Korea declined.
Performance products drive sales growth in all product segments
Footwear continued to grow as in the last quarters and is the main driver
of PUMA's total increase in net sales: Sales of EUR 408.4 million represent
a rise of 3.5% currency adjusted. This development is mainly due to the
growth of our Running and Training category with the IGNITE and Descendant
product platforms.
In the Apparel segment, the sales growth of 2.5% currency adjusted to EUR
346.9 million was mainly attributable to the success of the Training
products.
Sales with Accessories went up 3.7% currency adjusted to EUR 159.1 million,
supported by strong sales in Europe and North America.
Gross profit margin impacted by currency effects
At 45.8%, gross profit margin fell short of last year's figure by 50 basis
points, due to negative currency effects impacting cost of goods sold. The
footwear gross profit margin decreased from 41.9% to 41.2%, the apparel
margin rose from 49.6% to 49.8% and the margin for accessories fell from
50.3% to 49.1%.
OPEX in line with expectations
Operating expenditures (OPEX) amounted to EUR 381.9 million in the third
quarter. This represents an increase of 9.3% in reported terms versus the
third quarter in 2014. As in previous quarters, OPEX was again impacted by
negative currency effects, while PUMA continued to invest in marketing
activities to further strengthen the brand's positioning as the Fastest
Sports Brand in the World. Ongoing campaigns as well as an increased number
of own retail stores in operation also contributed to the higher OPEX. At
constant currencies, the increase in OPEX is limited to 4.3% versus last
year, reflecting tight underlying cost control.
Operating result (EBIT)
At EUR 41.1 million, the operating result was 11.2% below the last year's
figure.
Financial result
Unfavorable differences from currency conversions continued to weigh on the
financial result, which came in at EUR -5.1 million.
Net earnings
Net earnings of the third quarter amounted to EUR 20.0 million (compared to
EUR 28.9 million in the third quarter last year), resulting in earnings per
share of EUR 1.34 (compared to EUR 1.93 last year).
Nine Months 2015
In the period from January to September 2015, consolidated sales developed
in line with our expectations, rising by 4.9% currency adjusted to EUR
2,508.5 million. In reported terms, the increase is significantly higher at
12.9% as major currencies, in particular the US Dollar and the Chinese
Renminbi, strengthened against the Euro.
Americas particularly strong
In the EMEA region, sales were flat at EUR 987.9 million, as stronger sales
in Germany and Poland could not compensate for declines in other markets
such as Switzerland and Benelux.
The Americas showed the highest growth among the regions, with both North
and Latin America contributing to the increase of 9.4% currency adjusted to
EUR 942.4 million. Within Latin America, Argentina as well as Mexico stood
out with a solid double-digit growth.
Sales in Asia/Pacific were also strong, rising 7.2% currency adjusted to
EUR 578.2 million. This increase was supported by the positive development
in China and India, while sales in Japan were more muted.
All product segments contribute to growth
Footwear was the best performing segment in the first nine months, showing
an increase of 8.6% currency adjusted to EUR 1,145.3 million. The Running
and Training and the Teamsport categories supported this good result,
reflecting the relevance of PUMA's strategy to focus on performance.
Apparel rose 2.6% currency adjusted to EUR 890.0 million, positively
impacted by the development of Training products. Accessories increased
slightly by 0.6% currency adjusted to EUR 473.1 million.
PUMA's retail sales increase in absolute terms and on a comparable store
basis
PUMA increased the share of retail sales in total net sales from 19.5% to
20.4%. In absolute terms, retail sales rose to EUR 510.9 million (+9.5%
currency adjusted). This result was supported by improved sales on a
comparable store basis as well as an increased number of retail stores
operating (33 more stores compared to one year ago).
Gross profit margin impacted by adverse currency effects
Again, PUMA's gross profit margin for the period was strongly impacted by
negative currency effects. At 46.4%, it fell short of last year's result by
80 basis points. The footwear gross profit margin decreased from 42.9% to
42.1%, apparel margin was stable at 50.4% and the margin for accessories
decreased from 50.7% to 49.6%. PUMA will continue to take countermeasures
such as selective price increases to secure profitability, but such
adjustments are to be done carefully in order not to impact consumer
demand. Furthermore, in some countries, the costs of hedging outweigh its
financial benefits, or in some cases, currency hedging is not possible at
all. In addition, we are aiming to reduce such exposure to volatile
currencies by increasing the share of locally sourced products in some of
the most impacted markets.
OPEX increase as a result of strong marketing and retail activities
In the first nine months of 2015, operating expenses (OPEX) amounted to EUR
1,090.4 million, a 15.5% increase in reported terms. This rise stems from
unfavorable currency effects as well as strong marketing activities
including media investments and sponsorships of brand ambassadors. Opening
up new stores and investing into IT infrastructure also contributed to the
development. At constant currencies, the increase in OPEX is limited to
7.8% versus last year, as PUMA continued to put a strong emphasis on strict
control of other operating costs.
Operating result (EBIT)
Operating income came in at EUR 85.4 million compared to EUR 117.4 million
in the previous year.
Financial result
Unfavorable differences from currency conversions weighed on the financial
result, which fell to
EUR -9.9 million. These effects were in particular related to Latin
American countries and Turkey.
Net earnings / earnings per share
Net earnings for the first nine months came in at EUR 41.5 million compared
to EUR 68.6 million in the previous year, representing earnings per share
of EUR 2.77 (1-9/2014: EUR 4.59).
Net Assets and Financial Position
Increase in working capital to serve higher demand
To support sales growth and serving the higher demand from new retail
stores as well as ensuring product availability, inventories increased by
20.2% to EUR 689.5 million. Trade receivables went up by 3.3% to EUR 565.6
million. Trade payables were at EUR 509.0 million, rising 10.9% compared to
last year's figure. In total, working capital rose 11.8% to EUR 711.4
million.
Cashflow / CAPEX
As a result of the higher working capital requirements, the free cashflow
went down to EUR -248.0 million for the nine-month-period 2015 compared to
EUR -114.4 million as of September 30, 2014. The free cashflow was also
impacted by higher CAPEX, which grew from EUR 47.8 million last year to
EUR 54.6 million. This reflects our increased investment in IT and retail
stores.
Cash and cash equivalents
Cash and cash equivalents were also impacted by the higher working capital
requirements and decreased by 12.1% to 269.6 million, while borrowing
increased as part of PUMA's short term financing activities.
Brand and Product Update
In our Running and Training category, we benefitted from excellent athlete
and team performances at the 2015 IAAF World Championships in Beijing with
18 podium positions for PUMA sponsored athletes and teams. The World's
Fastest Man Usain Bolt once again proved his status as the greatest athlete
of all time with triumphs in the 100m, 200m and 4x100m relays, extending
his record-breaking personal haul of IAAF World Championships gold medals
to 11. The stellar performances of the Jamaican Team, which finished second
in the medals table after Kenya, as well as the performances of the other
PUMA teams including the Bahamas, Cuba, Grenada, Cayman Islands,
Switzerland and the Dominican Republic, secured a strong brand visibility
of PUMA throughout the competition.
The great achievements of our athletes in Beijing's National Stadium came
only shortly after the launch of our second major Forever Faster brand
campaign, which had a dedicated focus on Training. Asking the question
"What are you training for?" the campaign was brought to life through the
unique training stories of PUMA's most elite ambassadors such as Usain
Bolt, Rihanna, Sergio Agüero, Arsenal Football Club, and the Cuban National
Boxing team. The films intimately capture our athletes' motivations and
tactics to constantly improve through training. Underpinning this campaign
was PUMA's latest innovative footwear offering within the IGNITE franchise:
the IGNITE XT. This high intensity training shoe's responsive design
maximizes energy and movement throughout high intensity workouts.
In our Teamsport category, we recently launched the latest iteration of our
eye-catching Duality football boots, continuing the theme of two distinct
coloured boots in one pair. This was applied to PUMA's two football boot
families, evoPOWER and evoSPEED, and worn by PUMA stars such as Cesc
Fàbregas, Sergio Agüero, Marco Reus, and Antoine Griezmann. Furthermore,
PUMA introduced the new bright blue colourway of its lightest football boot
to date, the evoSPEED SL. It is worn on pitch by PUMA stars including
midfielder Marco Verratti, who helped to secure the qualification of the
PUMA partnered Italian national team for the 2016 UEFA European
Championship next year in France. PUMA teams Czech Republic, Slovakia,
Austria and Switzerland have also qualified.
In our successful Motorsports category, PUMA continues to be a leading
supplier with its outstanding Mercedes AMG Petronas and Scuderia Ferrari F1
teams. Mercedes' Lewis Hamilton won his third Formula 1 Drivers' World
Championship with his 10th victory of 2015 at a thrilling United States
Grand Prix two weeks ago. Having already grasped the Constructors'
Championship title for the second consecutive year prior to this, the
"Silver Arrows" are enjoying their most dominant season in more than 60
years.
In September, COBRA PUMA GOLF golfer Rickie Fowler enjoyed another victory
at The Deutsche Bank Championship at TPC Boston. Wearing his signature
orange apparel and equipped with his COBRA Fly-Z+ Driver, Fowler powered
his way to a victory. His looks consisted of PUMA apparel and footwear from
our 2015 Autumn/Winter collection, for example the Titantour, the coolest
shoe in golf. COBRA PUMA GOLF athlete Lexi Thompson recently won the LPGA
KEG Hana Bank Championship in South Korea, proving her outstanding talent
once again with her second victory of the year and sixth overall.
Strategy Update
Our sales for the first nine months of this year and the very positive
feedback from retailers around the world regarding our new products as well
as a strong order book confirm that we are on the right track. Our stronger
sales performance in Footwear underlines our progress in becoming the
Fastest Sports Brand in the World.
We have continued to improve our product offering for women and our
communication approach to them. Building on a strong heritage and
credibility with women, we have emphasized female consumers as a key growth
segment for PUMA. A key element of this strategy is our collaboration with
world-famous artist Rihanna as brand ambassador and Creative Director,
which we have taken to a new level. She plays a prominent role in our
second Forever Faster brand campaign, a multi-million euro media investment
with a dedicated focus on Training. Within the campaign, Rihanna is
featuring the training shoe IGNITE XT. Her first TV commercial for PUMA
initially aired in September.
Beyond a mere endorsement, PUMA has just launched the first in a series of
Rihanna-inspired footwear and apparel styles. The "Creeper" is the first
sneaker from PUMA by Rihanna under her FENTY Label. It remixes the iconic
PUMA Suede with a creeper sole inspired by the NYC punk rock scene with
high-end details and Rihanna's signature branding. The first limited
edition black and white colorway of the Creeper was available only on our
PUMA.com website and a PUMA-hosted pop-up store in New York's SoHo
neighborhood. The shoe generated unprecedented social media and PR coverage
for PUMA and sold out within hours. More colorways are currently being sold
via PUMA.com and key retail partners worldwide.
We will further optimize our product offering for women across our
performance and lifestyle categories in the coming seasons. This is not
limited to, but includes additional Rihanna-associated styles, such as the
boxing-inspired Eskiva shoe available in November 2015 and a complete
collection of footwear and apparel styles to be launched in 2016.
Our efforts to further improve our close collaboration with key retailers
are critical in our go-to-market strategy. The Creeper launch would not
have been possible without the close alignment of our product and marketing
teams with key retailers. Additionally in North America we have improved
our presence with shop-in-shops, special wall units and permanent in-store
communication at major sports accounts including Finish Line and Champs. As
for PUMA's owned and operated stores, we have continued to roll out our new
Forever Faster store layout to currently eleven locations worldwide.
Social, economic and environmental sustainability is a core value for all
of us at PUMA. We believe that keeping these dimensions in balance is
crucial to achieving sustainable business development. Therefore we
welcomed the opportunity of becoming an official partner of COP21. As an
official partner of the UN Climate Change Conference in Paris, we will
equip 180 students in charge of welcoming visitors from all over the world.
These trainee hosts and hostesses will wear specifically designed PUMA
outfits that are entirely made of organic cotton.
Outlook for the Financial Year 2015
The business development in the first nine months of 2015 was in line with
our expectations and our full-year guidance for 2015 remains unchanged.
We reiterate our expectation that adverse currency effects, particularly
the strengthening of the US Dollar versus nearly all other currencies, will
continue to impact PUMA's reported gross profit margin, OPEX and EBIT. PUMA
has already taken and will continue to take countermeasures, but the impact
will not fully offset the negative currency effects.
In the remainder of 2015, PUMA will continue to invest strongly in
marketing to further enhance and reinforce its new brand positioning. The
investments in the upgrade of PUMA's current IT-infrastructure and the
extension of our own retail store network will also continue. This will
result in an increase in OPEX that will be further impacted by negative
currency effects. At the same time, PUMA's management will continue to put
a strong emphasis on strict control of other operating costs.
Thanks to the countermeasures implemented and at the current exchange rate
levels, we expect a slightly softer drop in the gross profit margin for the
full-year at the lower end of the range of minus 100 to 150 basis points
versus last year. The improvement in gross profit margin due to these
countermeasures, however, comes at a slight negative effect on net sales.
Nonetheless, we continue to expect an increase in the medium single-digit
range for full-year currency-adjusted net sales and we reiterate our
expectation for a full-year EBIT in a range between EUR 80 million and
EUR 100 million, with net earnings impacted accordingly.
Media Relations:
Kerstin Neuber - Corporate Communications - PUMA SE - +49 9132 81 2984 -
[email protected]
Investor Relations:
Johan-Philip Kuhlo - Global Strategy - PUMA SE - +49 9132 81 3170 -
[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 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, 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 --------------------------------------------------------------------- 06.11.2015 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. 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: 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 --------------------------------------------------------------------- 409765 06.11.2015
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