Corporate | 29 July 2014 08:00
|
PUMA SE / Key word(s): Half Year Results/Change of Personnel
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
Performance in the Americas improves
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
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
Operating Result (EBIT) declines
Financial Result
Net earnings
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
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
PUMA’s Retail sales rise
Gross Profit Margin stable
Operating Result (EBIT) lower
Financial Result
Net Assets and Financial Position
Working Capital position continues to improve
Cashflow / Capex
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
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 7 th 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:
Investor Relations: Carl Baker – Finance – PUMA SE – +49 9132 81 3188 – carl.baker@puma.com 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,
Notes relating to forward-looking statements:
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 29.07.2014 Dissemination of a Corporate News, transmitted by DGAP – a company of EQS Group 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: | investor-relations@puma.com | |
| 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 |
|
|
| 279678 29.07.2014 |