DGAP-News: PUMA SE: PUMA meets Full-Year Sales Guidance
DGAP-News: PUMA SE / Key word(s): Final Results
PUMA SE: PUMA meets Full-Year Sales Guidance
20.02.2014 / 10:00
PUMA meets Full-Year Sales Guidance
Confident that new strategic direction 'Forever Faster' will initiate
Herzogenaurach, February 20, 2014
2013 Fourth Quarter Facts
- Consolidated sales at EUR 698 million, a currency adjusted decline of
- OPEX improve for the fourth consecutive quarter, down 4.8% against the
same quarter last year
- EBIT before special items of EUR 1.1 million
- Special items of EUR 129 million booked, as indicated last November,
consisting of mostly non-cash effective impairments
- EPS declines to EUR -7.71 due to impact of special items
2013 Full Year Facts
- PUMA's full year consolidated sales are in line with guidance,
declining by 3% currency adjusted to around EUR 3 billion
- Gross profit margin decreases to 46.5%
- Solid OPEX reduction: The Transformation and Cost Reduction Program
drives the OPEX down 6.9% year on year
- Improved working capital position, led by strong focus on inventories
and receivables management, resulting in a EUR 37 million improvement
in free cash flow
- EBIT before special items reaches EUR 191.4 million
- EPS declines to EUR 0.36 due to impact of special items
Bjoern Gulden, Chief Executive Officer of PUMA SE: '2013 has been a
challenging year for PUMA and there is no doubt that we have issues in
terms of lack of brand heat, commercial products and desirable
distribution. Nonetheless, PUMA is a great brand and with our new brand
positioning as the Fastest Sports Brand in the World, we have a clear
vision of where we want to go. 'Forever Faster' is not only our new brand
statement, it is also our new mindset. PUMA is about fast products, fast
athletes, fast designs and fast decision making. With the re-signing of
Usain Bolt, and signing of Arsenal FC and Mario Balotelli, we further
demonstrate that we are a true sports brand. Together with our great assets
and new creative agency, we will launch our new campaign to the consumers
in Q3/2014 which is fueled by PUMA's biggest media investment in the last
decade. This is not a quick fix, but 2014 marks the start of the
Fourth Quarter 2013
2013 trends reflected in fourth quarter sales performance
Group sales in the fourth quarter of 2013 remained under pressure with
sales declining 4.7% currency adjusted and 13.2% in Euro terms from EUR 805
million to EUR 698 million. This drop was driven mainly by weakening
currencies in Japan, Russia, Turkey and various countries in Latin America.
In the EMEA region, sales declined by 7.6% currency adjusted to EUR 226
million as economic conditions across most of Europe remained challenging.
Solid sales growth in Russia and Turkey was not enough to offset weaker
performances in Western and Southern European countries.
Revenues in the Americas region decreased by 3.5% currency adjusted to EUR
268 million, where solid performances in the USA and Canada were offset by
decreases in Latin America. Mexico and Chile in particular declined on high
comparables after strong performances last year.
Sales in the Asia/Pacific region decreased by 2.8% currency adjusted to EUR
205 million. While India continued to grow across multiple categories
(Running, Training/Fitness), the rest of the region performed either at or
slightly below last year's levels.
In terms of segments, PUMA's Footwear sales in the fourth quarter declined
by 12.9% currency adjusted to EUR 291 million as pressure continued across
most categories. Apparel sales fell slightly by 1.1% currency adjusted to
EUR 284 million. Accessories sales improved by 10.6% currency adjusted to
EUR 123 million.
Special items booked in the fourth quarter
PUMA's gross profit margin declined from 44.6% to 43.2% in the fourth
quarter of 2013. This was mainly due to selective discounting to clean up
inventory and FX impacts. Footwear gross profit margin decreased from 41.8%
to 39.5%. Apparel margins fell from 46.6% to 44.7% and the margin for
Accessories rose from 48.0% to 48.4%.
Operating expenditures continued to decline further, thanks to the positive
impact from the measures implemented in the ongoing Transformation and Cost
Reduction Program. As a consequence, OPEX was reduced by 4.8% from EUR 322
million to EUR 306 million in the quarter. Despite the continuous reduction
in OPEX, the decline in sales combined with the lower gross profit margin
led to a decrease in EBIT (before special items) to EUR 1.1 million.
As announced with the third-quarter results in November last year, PUMA
booked EUR 129 million of special items in the fourth quarter, consisting
mostly of non-cash effective impairments of goodwill and trademarks as well
as costs related to the strategic initiatives. Those include the
centralization of PUMA's international product functions from London and
the intended centralization of Global and European Retail operations from
Switzerland to its Herzogenaurach headquarters as well as the closure of
the PUMA Village development center in Vietnam.
As a result, PUMA's quarterly Operating Result (EBIT) declined to EUR -128
million and earnings per share fell to EUR -7.71.
Full Year 2013
PUMA's full year sales declined 3% currency adjusted
Consolidated sales were in line with guidance for 2013 and declined by 3.0%
currency adjusted and 8.7% in Euro terms to around EUR 3.0 billion. Sales
in the EMEA region decreased by 4.4% currency adjusted to EUR 1.22 billion,
where weak French and Italian markets were partially offset by a strong
performance in the United Kingdom. In the Americas, sales decreased
slightly by 0.7% currency adjusted to EUR 1.06 billion. In Asia/Pacific,
sales fell by 4.0% currency adjusted to EUR 711 million as declines in
Korea and Oceania could only be partially offset by increases in India.
Performances by segment varied. Footwear sales declined by 8.6% currency
adjusted to EUR 1.37 billion in 2013. Sales in Apparel fell slightly
by 1.2% currency adjusted to EUR 1.06 billion. Sales in Accessories
continued to increase by 9.7% currency adjusted to EUR 549 million.
Sales growth continued in PUMA's Retail Business
In line with the Transformation and Cost Reduction Program, unprofitable
PUMA Stores were closed, while new stores with a particular focus on
profitable new locations in emerging markets were opened. PUMA's full year
retail sales rose by 5.6% currency adjusted to EUR 623 million in 2013,
equal to 20.9% of total sales.
Gross Profit Margin declines
PUMA's full year gross profit margin declined from 48.3% to 46.5%, driven
by Footwear gross profit margin, which declined from 46.5% to 43.7%.
Looking to other categories, Apparel margins fell from 49.8% to 48.3% and
margins in Accessories decreased slightly, from 50.5% to 49.8%. The reasons
for the decline were increased discounting to clean up inventory, negative
hedging/foreign exchange impacts and an unfavorable shift within the
product and regional mix.
Transformation and Cost Reduction Program continues to improve efficiencies
PUMA continued to implement the Transformation and Cost Reduction Program
throughout 2013. As a result, the company has become more efficient. PUMA's
European operations have been streamlined by consolidating 23 countries
into seven areas. Furthermore, and in line with the above, six warehouses
were closed in Europe in 2013. PUMA has continued to optimize the retail
portfolio as outlined previously by closing 73 of the originally planned 91
stores, with the remainder to be closed during 2014. PUMA has cancelled
product categories like Rugby in the northern hemisphere and Sailing that
were not viable or were no longer part of the company's core categories.
The related sponsorships have been discontinued. As a consequence of these
consistent efforts PUMA was able to drive down the full year OPEX, which
improved by 6.9% from EUR 1.31 billion to EUR 1.22 billion.
Operating Result (EBIT) before special items weakens
The continued OPEX improvement was not enough to fully offset the decline
in sales and gross profit margin. PUMA's EBIT before special items declined
from EUR 291 million to EUR 191 million for the full year, equivalent to
6.4% of sales.
PUMA booked EUR 129 million in special items during the fourth quarter. The
majority of the special items consist of the impairment of non-current
assets, in particular goodwill and trademarks, and are non-cash effective.
Other items included one-time costs associated with the strategic
initiatives of the new Management team, such as the closure of the PUMA
Village development center in Vietnam as well as the relocation of PUMA's
international product functions from London and the intended centralization
of Global and European Retail operations from Switzerland to its
Operating Result including special items (EBIT)
As a result, PUMA's Operating Result including special items (EBIT) for the
full year declined to EUR 63 million, equivalent to 2.1% as a percentage of
For the full year, PUMA's financial result was equal to EUR -8.7 million,
deriving mainly from foreign currency fluctuations throughout the year.
Net Earnings / Earnings per share decline
Full year consolidated net earnings fell from EUR 70 million in 2012 to EUR
5 million in 2013, with earnings per share declining from EUR 4.69 to EUR
Net Assets and Financial Position
Working Capital position continues to improve
The Group's working capital declined by 15.3% from EUR 624 million to EUR
528 million as result of the strong focus on inventories and receivables.
Inventories decreased 5.7% from EUR 553 million to EUR 521 million at the
end of 2013 and trade receivables declined by 16.5% from EUR 507
million to EUR 423 million, reflecting PUMA's ongoing strong balance sheet
Cashflow / Capex
PUMA's Free Cashflow improved from EUR -8 million at the end of 2012 to EUR
29 million at the end of 2013. This was due to lower Working Capital
requirements, reduced Capex and the lower payments for acquisitions
compared to last year.
Net Cash Position
PUMA's year end Net Cash Position remained stable at EUR 361 million
compared to last year's EUR 363 million.
The Administrative Board will propose a dividend of EUR 0.50 per share for
the financial year 2013, the same as for 2012, at the Annual General
Meeting on the 13th May 2014.
In line with PUMA's new mission to become the Fastest Sports Brand in the
World, PUMA has continued to streamline its business operations to make
processes faster and more efficient. In order to accelerate PUMA's
development process, the new management team took the decision last year to
divest from the PUMA Village development centre in Vietnam, and also to
relocate its international product functions from the London office to its
headquarters in Herzogenaurach. In addition, PUMA decided to establish an
end-to-end process responsibility for the whole product development process
under the umbrella of PUMA Group Sourcing. Moreover, PUMA intends to
relocate the PUMA Global and European Retail Headquarters as well as
European E-Commerce, which are currently based in Oensingen in Switzerland,
to Herzogenaurach. Through this move, the alignment and collaboration with
key functions like Global Merchandising, the Business Units and the
European Region will improve significantly and become faster.
With the intended closure of the Oensingen (Switzerland) office, we will
also finalize the integration of PUMA Schweiz AG into the DACH area. In the
future, the Swiss office will focus on Sales, with all other functions
provided by the DACH Area headquarters in Herzogenaurach.
Brand and Marketing Update
In December, we announced a new long-term partnership with international
football icon Mario Balotelli. As another key signing for PUMA, Mario will
be a major force in driving the brand's performance message. With his
passion, speed, agility and power he is a perfect fit to support PUMA's
repositioning as a true Sports Brand and the company's mission to be
Ahead of the 2014 FIFA World Cup in Brazil, where PUMA will have a strong
on-pitch presence of eight teams (Italy, Switzerland, Ghana, Cameroon,
Ivory Coast, Algeria, Uruguay and Chile), we recently revealed our latest
product innovation in football: PUMA's revolutionary evoPOWER boot.
Inspired by the freedom of movement of barefoot kicking, evoPOWER features
the most advanced PUMA technologies to date and is scientifically proven to
be the world's most powerful football boot. The evoPOWER will be worn on
pitch by Cesc Fàbregas, Marco Reus, Mario Balotelli, Yaya Touré, Dante and
As PUMA enters a new era as the Fastest Sports Brand in the world, we have
sealed a long-term partnership with Arsenal Football Club, representing the
biggest deal in both PUMA's and Arsenal's history. This clearly underlines
our positioning as the global number three brand in football. Effective 1st
July 2014, PUMA will not only become Arsenal's official kit partner but has
also acquired wide-ranging licensing rights to drive mutual growth across
all football markets.
Highlights in other PUMA categories included Usain Bolt's fifth World
Athlete of the Year award at the 2013 IAAF World Athletics Gala in Monaco,
the contract extension with Swedish-born professional golfer Jonas Blixt
and the signing of the Australian golf legend and Hall of Famer Greg
Norman, who will once again be a global brand ambassador for Cobra PUMA
Golf, collaborating on product development and sporting Cobra clubs at a
variety of appearances, tournaments and events.
Outlook for the Financial Year 2014
In 2014, PUMA will reposition itself to again become a true Sports Brand.
PUMA is excited to launch its new brand statement 'Forever Faster' through
a global media campaign in the Autumn/Winter season 2014 - the company's
biggest media campaign in the last decade. This re-ignition of the brand
heat was kicked off by extending the partnership with the fastest athlete
on the planet, Usain Bolt, and was further fuelled by signing one of the
world's top football clubs, Arsenal FC, and Italian superstar Mario
Balotelli. Moreover, in the coming year of football, 25% of all
participating teams at the World Cup in Brazil will be wearing PUMA
jerseys. With the signing of iconic sports marketing assets and the launch
of high performance product innovations like the world's most powerful
football boot evoPOWER, and with more to come, PUMA proves and will
continue to demonstrate its competence as a true Sports Brand in 2014 and
will also leverage its clear positioning in sports to sell sports-inspired
In addition to increasing brand heat and upgrading the product engine,
PUMA's priorities in 2014 are to replace lower tier distribution with
higher tier distribution and to improve the relationships with our
retailers in order to drive sales quality and sell-through. In close
collaboration with key accounts, PUMA will build dedicated product and
marketing programs which will help to regain shelf space and improve
sell-through. While weaker first-half sales are expected, the rebuilt trust
of PUMA's retail partners will start to materialize in the form of
increased orders for the second half of the year. With the support of the
Forever Faster media campaign and the partnership with Arsenal, the second
half of the year is expected to compensate for the shortfall in sales
experienced in the first half of the year.
PUMA therefore expects its net sales to be flat in 2014, but with improved
revenue quality. Assuming minor input price inflation and stable
currencies, the gross profit margin is expected to improve slightly due to
sourcing improvements and favorable changes in the product mix.
Driven by strong marketing investments in media and sports assets, although
combined with strict ongoing control of other costs, PUMA's OPEX will
increase. Management therefore anticipates an EBIT margin before special
items of approximately 5% of net sales in 2014.
However, due to the special items booked in 2013, management expects a
significant improvement in the net profit margin, which is expected to come
in at approximately 3.0% of net sales. (2013: 0.2%).
2014 will be a turnaround year for PUMA where the brand will be
re-established in the market place and bring PUMA back to a path of
profitable and sustainable growth in the mid-term.
Kerstin Neuber - Corporate Communications - PUMA SE - +49 9132 81 2984 -
Carl Baker - Finance - PUMA SE - +49 9132 81 3188 - firstname.lastname@example.org
Notes to the editors:
- This press release and financial reports are posted on
- 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.
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
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Company: PUMA SE
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