Corporate | 16 February 2015 10:00
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PUMA SE / Key word(s): Final Results
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
– 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:
Fourth Quarter 2014
Strong fourth quarter performance
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
Full Year 2014
PUMA’s full-year sales increased 3.3% currency adjusted
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
Slightly improved Gross Profit Margin
Marketing efforts drive OPEX
Operating Result (EBIT) before special items in line with guidance
No Special Items in 2014
Operating Result (EBIT) after special items increased
Net Earnings / Earnings per share increase
Net Assets and Financial Position
Working Capital position continues to improve
Cashflow / Capex
Cash Position improved
Dividend
To be the Fastest Sports Brand in the world
Strategic priorities
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.
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 – kerstin.neuber@puma.com Investor Relations: Beate Gabriel – Finance – PUMA SE – +49 9132 81 2375 – beate.gabriel@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 2015-02-16 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: | investor-relations@puma.com | |
| 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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