Corporate | 9 February 2017 10:00
PUMA SE: PUMA improves in 2016
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DGAP-News: PUMA SE / Key word(s): Final Results/Quarter Results
Sales growth across all regions and product segments and improved operating results in Fourth Quarter and Full Year
Herzogenaurach, February 9, 2017 2016 Fourth-Quarter Facts – Sales increase by 10% currency adjusted to EUR 958 million (+9% reported) with growth across all regions and product segments – Gross profit margin up 180 basis points at 44.6% – OPEX increase by 13% caused by higher marketing and retail investments as well as higher sales related variable costs – Improvement in operating result (EBIT) by 30% to EUR 14 million – FENTY PUMA by Rihanna Creeper awarded “Shoe of the Year 2016” by Footwear News in the US 2016 Full-Year Facts – PUMA’s full-year sales up 10% currency adjusted to EUR 3,627 million (+7% reported) – Gross profit margin improved by 20 basis points to 45.7%, despite stronger US Dollar – Improved operating leverage with OPEX increasing by only 6% – Operating result (EBIT) up 33% to EUR 128 million – Earnings per share increased from EUR 2.48 last year to EUR 4.17 in 2016 – Strong improvement in Free Cashflow from EUR -99 million 2015 to EUR 50 million 2016 – An increase of the dividend from EUR 0.50 to EUR 0.75 per share for the financial year 2016 will be proposed – Strong performances by PUMA athletes at the UEFA EURO 2016 and Olympic Games in Rio – Continued strong visibility of PUMA’s women’s category through “FENTY PUMA by Rihanna” – fashion shows and launch of the “DO YOU” communication platform with model, actress and activist Cara Delevingne
Bjørn Gulden, Chief Executive Officer of PUMA SE:
Fourth Quarter 2016
The
EMEA
region performed extraordinarily well, reporting a double-digit growth rate of 13.4% currency adjusted to EUR 298.4 million (+10.4% reported). This was achieved in spite of strong comparable sales last year (Q4 2015 +21% currency adjusted).
The
Asia/Pacific
(APAC) region performed well with sales increasing by 6.8% currency adjusted to EUR 266.8 million (+11.1% reported). China was the main driver of this positive development.
Apparel showed moderate growth in the quarter with sales increasing by 3.7% currency adjusted to EUR 366.6 million (+3.3% reported), as sales in Q4 last year were driven by the Euro Cup replica business. Sales in Accessories improved by 7.5% currency adjusted to EUR 175.6 million (+7.5% reported), driven by a strong performance of our North American accessory business in the fourth quarter.
Gross Profit Margin and Operating Expenses:
Operating expenses (OPEX) increased by 12.6% to EUR 416.6 million. The increase of operating expenses in the quarter is mainly due to further marketing and retail investments as well as higher sales related variable costs in connection with the growing retail and eCommerce revenues.
Operating Result and Net Earnings:
Taxes on income in the fourth quarter showed an income of EUR 0.4 million (prior year: expense of EUR -2.8 million) as a consequence of the adjustment of tax provisions, after tax audits for prior years were finalized. The net earnings attributable to non-controlling interests increased from EUR 11.1 million to EUR 17.2 million because of the strong business development of our North American joint ventures – distributing accessories in the region -during the fourth quarter. As a consequence, net earnings came in at EUR -4.6 million compared to EUR -4.3 million last year, translating into earnings per share of EUR -0.31 after EUR -0.29 in the fourth quarter of 2015.
Full Year 2016
Sales in the EMEA region showed the highest increase, rising by 13.2% currency adjusted to EUR 1,382.7 million (+9.9% reported), with France and the DACH area (Germany, Austria, Switzerland) having developed particularly well. From a product perspective, all three product segments recorded double-digit growth in the region. In the Americas region, sales rose by 8.3% currency adjusted to EUR 1,339.6 million. Both, North- and Latin America contributed to this positive development. In Euro terms sales grew only by 2.2%, as the weakness of currencies in Latin America, notably in Argentina, continued to have a negative impact on reported sales. The Asia/Pacific region was also a strong driver of the overall growth of PUMA in 2016. Sales were up by 8.5% currency adjusted to EUR 904.5 million (+10.5% reported). China with a double-digit increase and India with a strong momentum supported the growth in the region. Sales in PUMA’s Footwear segment amounted to EUR 1,627.0 million, representing an improvement of 12.6% currency adjusted (+8.0% reported). The Running, Sportstyle and Fundamentals categories all achieved major gains. Apparel sales grew by 9.6% currency adjusted to EUR 1,333.2 million (+7.1% reported) with a positive development in all product categories except Motorsport. Accessories sales rose by 5.9% currency adjusted to EUR 666.5 million (+4.7% reported) thanks to a continued strong socks and bodywear business, in spite of a flattish golf hardware business. Including eCommerce, PUMA’s own and operated retail sales increased by 12.5% currency adjusted to EUR 794.3 million. This represents a share of 21.9% of total sales in 2016 (21.4% in 2015). The reasons for this rise are a like-for-like sales growth in our retail stores and the extension of our retail store network, as well as a strongly growing eCommerce business.
Gross Profit Margin and Operating Expenses:
Operating expenses (OPEX) increased by 5.7% and amounted to EUR 1,544.5 million in 2016. The increase is mainly due to additional marketing activities as well as investments in our own retail store network and IT-infrastructure. Other operating functions managed to keep costs stable.
Operating Result and Net Earnings:
The financial result improved from EUR -11,2 million last year to EUR -8,7 million this year due to lower interest payments and lower expenses from currency conversion. The tax rate for the full year 2016 came in at 25.7% compared to 27.5% last year. The adjustment of tax provisions, after tax audits for prior years were finalized, contributed to the decrease of the tax rate. Net earnings improved by 68.0% and came in at EUR 62.4 million (last year: EUR 37.1 million). This result translates into earnings per share of EUR 4.17 compared to EUR 2.48 in 2015.
Working Capital
Cashflow
Dividend proposal of EUR 0.75
Brand and Strategy Update
In our
Teamsport
category, PUMA’s five participating teams in the UEFA Euro 2016 in France secured an on-field presence of almost 40% across all matches. A major highlight was France’s Antoine Griezmann, who was voted ‘Player of the Tournament’ by UEFA after being the top scorer. Stars like PUMA player Olivier Giroud, who ranked third in the tournament’s scoring table and Portugal’s Rui Patrício, who was voted the Goalkeeper of the Tournament, sported PUMA’s yellow-pink “Tricks” boots on the pitch.
In our Running category, a memorable event for PUMA were last summer’s Olympics in Rio, where PUMA sprint star Usain Bolt again showed a spectacular, world-class performance by winning an Olympic Gold medal in each of the three sprinting events. Ahead of the 16th edition of the IAAF Track and Field World Championships scheduled to be held in London in summer this year, we are excited to see continued amazing performances of the Fastest Man in the world. In our Motorsport category, Nico Rosberg was crowned F1 champion, while PUMA-partnered teams MERCEDES AMG PETRONAS, Red Bull and Scuderia Ferrari claimed the first three places in the Constructors’ Championship. Another highlight was set by our partner BMW Motorsport and their driver Marco Wittmann, who clinched the 2016 DTM Championship for the second time after 2014. Our iconic success style, the “FENTY PUMA by Rihanna” Creeper, was repeatedly sold out worldwide within mere hours of hitting the stores as soon as we launched new colourways throughout the year. The Creeper has demonstrated again and again that it is currently the hottest piece of footwear around and has consequently been named “the only choice for the 2016 Shoe of the Year” by Footwear News. In terms of strategy , we have continued to make progress along our five key priorities: creating brand heat for PUMA as the Fastest Sports Brand in the World, further improving the product engine with a strong pipeline of exciting and commercial products, optimizing PUMA’s distribution quality through stronger sell-through with key retail partners. Furthermore we enhanced our organizational speed and business processes as well as strengthened PUMA’s women’s business. These priorities will be at the center of our strategy going forward. While we still have a lot of work ahead of us, we feel that 2016 took us a big step forward within each of these areas. We have further strengthened our brand heat by leveraging our brand ambassadors and cultivating the hype in social media. We are proud to have long-standing partnerships with some of the world’s greatest athletes, such as the Olympic legend Usain Bolt, who has been with PUMA for 15 years. Additionally, we have new relationships with up-and-coming stars and talents like the charismatic Olympic Silver-and Bronze-medalist André De Grasse, the one-of-a-kind Cara Delevingne, the R&B star and style icon The Weeknd, and of course, Rihanna who made a major impact in 2016. On the product side, we introduced a number of key styles. The distinctive PUMA Fierce has been an instant hit in terms of distribution, media coverage and most importantly sales. Other new key footwear styles were the performance shoe IGNITE Dual and the IGNITE Evoknit, a style for Street Running that comes with a form-fitting, mid-height knitted upper. Our FENTY collection, that features apparel and footwear, was very well received by the press, retail partners and our consumers. Independent research has shown that we have gained market shares in most geographies and channels, showing that PUMA products are again resonating well with consumers, which was also echoed by our retail partners.
To improve the quality of
distribution
, we continued to strengthen our relationships with key strategic accounts and built new partnerships with strong retailers in both established and emerging markets. One of the best examples is our long-standing strong relationship with Foot Locker in North America. For several years, we have now rolled out our jointly developed retail concept “PUMA Lab”. This has helped to lift product sell-through well beyond the “PUMA Lab” doors, especially in Foot Locker’s women-only banner Six:02, where PUMA sales more than doubled in 2016. PUMA has also gained traction with other important customers in the US, and also in Europe, where PUMA returned to double-digit growth rates in many markets. In China, our retail partners such as Belle and the YY Group opened around 200 additional PUMA doors in 2016.
The improvements in systems, processes and organizational speed over the last two years, led to even more flexibility in our supply chain in 2016. A standardized global IT foundation allows for faster and better communication. We have relocated employees closer to our suppliers’ production sites, increased local-for-local production in countries such as India and Mexico and moved into a new highly-automated warehouse in the United States. This all will ensure faster lead times for key markets in line with our strategy of being Forever Faster. Our Women’s business received a lot of attention in 2016. Building on PUMA’s fashion credibility and sports authenticity, as well as profound understanding of the modern female athletic consumer, we have positioned PUMA to address the segment “where the gym meets the runway”. Women worldwide are more and more participating in sports, while taking inspiration from athletic wear for their everyday wardrobe. In 2016, PUMA successfully introduced cross-category collections by merging sports and fashion. With our “DO YOU” campaign, which aims to inspire confidence in women around the world, we are changing the way we address the female consumer. In addition, we are collaborating with a number of famous female brand ambassadors such as Rihanna, Kylie Jenner, Cara Delevingne and the New York City Ballet to tell a powerful story. The reactions to our “FENTY PUMA by Rihanna” runway shows during the New York and Paris Fashion Weeks have been overwhelmingly positive and have created major social media buzz. Our women-specific collections are among the best performers in terms of both sell-in and sell-through. Many major retailers provided additional space for our female collections. In many accounts, the success of our women’s line was actually a door opener to expand our shelf space with men’s and kids styles.
Outlook 2017
We will continue to work very closely with our retail partners. With our improved product offering including recently launched styles such as the Fierce, Basket Heart, IGNITE Dual and IGNITE Evoknit as well as our FENTY collection we will continue to work hard to get more of the right PUMA products on the shelves of our retail partners. In combination with further investments in our own retail and eCommerce business we will support our direct to consumer business. This should enable us to attract new customers and to increase our market share in most geographies as well as to improve our sell-through across all product categories. For the full year 2017 we expect that currency-adjusted net sales will increase at a high single-digit rate. The gross profit margin is forecasted to improve to approximately 46.0% (2016: 45.7%). Operating expenses (OPEX) are expected to increase at a mid to high single-digit rate, as PUMA will continue to invest in marketing, in the modernization and expansion of the owned and operated retail store network and in IT-infrastructure. At the same time, management will continue to place a strong emphasis on strict control of other operating costs. At the current exchange rate levels, PUMA’s management expects that the operating result (EBIT) will improve significantly in 2017, thanks to operating leverage, as sales will increase stronger than OPEX, combined with a slightly improved gross profit margin. EBIT for the full year 2017 is therefore expected to come in between EUR 170 million and EUR 190 million. Net earnings will also continue to improve significantly in 2017. PUMA’s management is optimistic that 2017 is another important year with great opportunities and that PUMA is well positioned to carry the brand’s positive momentum into 2017 and beyond. Financial Calendar FY 2017:
April 12, 2017 Annual General Meeting April 25, 2017 Quarterly Statement Q1 2017 July 26, 2017 Interim Report Q2 2017 October 24, 2017 Quarterly Statement Q3 2017 The financial releases and other financial information are available on the Internet at “about.puma.com”.
Media Relations:
Investor Relations:
Notes to the editors: – The 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 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 10,000 people worldwide, and is headquartered in Herzogenaurach/Germany. For more information, please visit http://www.puma.com
09.02.2017 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
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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: | 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, Tradegate Exchange |
| End of News | DGAP News Service |