EANS-News: PUMA posts 6.1% Sales Growth in the First Quarter
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Financial Figures/Balance Sheet
Herzogenaurach (euro adhoc) - PRESS RELEASE
PUMA posts 6.1% Sales Growth in the First Quarter
Profitability affected by slow-down in Europe
Herzogenaurach, April 25, 2012
Highlights First Quarter 2012
- Consolidated sales increase by 6.1% to EUR 820.9 million.
- Gross profit margin falls by 120 basis points to 51.2%.
- EBIT decline by 8.1% to EUR 102 million.
- Net earnings decrease slightly, by 4.9% to EUR 74 million.
- EPS decline from EUR 5.17 to EUR 4.92.
- Long-term contractual partnership with the Italian Football Federation
extended.
Outlook for the Financial Year 2012
- Management reiterates full-year sales target of high single-digit growth
for 2012.
- Management continues to see net earnings increasing in the mid-single
digit range for 2012.
"After a strong finish in 2011, PUMA's first-quarter sales growth could not
keep pace with that of recent quarters, translating into weaker bottom line
results, said Franz Koch, CEO of PUMA SE. "Our first quarter sales performance
indicates that we are facing challenges in Europe. As a consequence, we have
begun to respond to these challenges, optimizing the efficiency of our business
model in the EMEA region. In addition, I am confident that the product
innovations we have in the pipelines will contribute to achieving our full-year
sales and earnings targets against the background of this extraordinary sports
year."
Sales Performance By Region
EMEA sales decline in a challenging consumer environment
With consumer spending remaining sluggish within the Eurozone, Sportlifestyle
company PUMA's first-quarter sales increased by 6.1% in Euro terms and 4.2%
currency adjusted to EUR 820.9 million compared to last year.
Sales in the EMEA region softened by 1.4% currency adjusted to EUR 368
million,
as restrained consumer spending in the wake of the financial crisis in the
Eurozone continued to impact demand. In addition to the challenging overall
business climate, the late arrival of winter in Europe dampened sales at
wholesale accounts and retailers, which slowed the in-take of spring
collections and therefore had an effect on PUMA's first-quarter sales.
As a consequence, PUMA has begun to respond to these challenges, optimizing the
efficiency of its business model in the EMEA region. To this end Sergio Bucher,
formerly PUMA's Head of Global Retail, was appointed the new General Manager
for Europe. In line with the transformation outlined in the "Back on the
Attack" growth strategy, the company is currently in the process of
streamlining the country organizations and centralizing some of the back-office
functions on a regional level.
A strong sales performance in Asia/Pacific and the Americas counterbalanced the
softening sales in the EMEA region. Fuelled by growth in India, Korea and
Japan, which all saw significant demand for PUMA's Motorsport, Running and
Lifestyle products, Asian sales climbed 10.2% currency adjusted to EUR
192.1
million.
Sales in the Americas improved by 8.5% currency adjusted to EUR 260.8
million.
Within the Latin American region, Mexico, Argentina and Brazil in particular
posted strong, double-digit growth rates. North America was up, supported by
the new joint ventures Wheat Accessories and Janed socks and bodywear.
Sales Performance By Segment
Footwear sales soften primarily in mature markets
Footwear sales declined 2.1% currency adjusted to EUR 414.6 million in the
first
quarter. However, PUMA has seen promising results of some of its major recent
footwear product launches.
For example, the ARCHIVE LITE, an ultralight shoe with a contemporary look, is
generating a double-digit sell-through in key leading doors in various
countries in Europe and Asia. These styles have a distinct unique selling
point, are bold, young and colorful and are the proof that PUMA is heading in
the right direction. PUMA has extended its Lightweight Concept, incorporating
further styles for the fourth quarter to fully capitalize on this opportunity.
The relevance of the Lightweight concept also applies to PUMA's Performance
categories. In 2012, PUMA's Year of Speed, the company will be launching a new
performance collection at the end of May that for the first time encompasses
all of PUMA's sport categories. Inspired by Usain Bolt, the collection answers
every athlete's need for speed by taking performance technology and
innovations, and incorporating them in footwear and apparel developed for
various sports.
Sales in the Apparel segment climbed 8% currency adjusted to EUR 267.6
million.
The Lifestyle and Performance collections resonated well with consumers in all
markets. Running, Lifestyle and Golf apparel products in particular were in
demand. PUMA further expects an increase in Apparel sales on the back of UEFA
Euro 2012.
Accessories jumped 19% currency adjusted to EUR 138.7 million, where Cobra
PUMA
Golf continues to deliver an outstanding performance, while the new joint
venture for socks and bodywear in the North American market follows suit.
PUMA's Teamsport category was further strengthened in the first quarter by the
signing of a long-term sponsorship contract with the Slovak Football
Association, and the confirmation of a new long-term contractual partnership
with the Italian Football Federation that sees PUMA now actively managing the
entire licensing portfolio of the Federation's assets on a global basis. PUMA
also expanded its international club portfolio by signing the Brazilian Club
Botafogo from Rio de Janeiro and the Italian Serie A club US Palermo. In
addition, PUMA extended its partnership with French football club Girondins de
Bordeaux. The Teamsport business is expected to benefit not only from these new
acquisitions, but also from the UEFA Euro 2012 in Poland/ Ukraine in June.
PUMA Running was driven by the light-weight PUMA Faas range, which includes the
ongoing best-seller PUMA Faas 300. The Running category will receive a further
support in the second quarter with the unveiling of Olympic performance and
lifestyle collections of the Jamaican athletics team designed by Cedella
Marley, daughter of Reggae legend Bob Marley, at the beginning of June.
Motorsport remained active during the first quarter. PUMA boosted its Formula 1
portfolio by signing new contracts with Mercedes GP Petronas. Nico Rosberg then
provided the perfect start to this partnership, scoring his maiden F1 victory
in his Mercedes AMG Petronas car at the Chinese Grand Prix in Shanghai two
weeks ago.
Sales in Sailing also continued to increase as the marketing activities around
the Volvo Ocean Race and the press coverage of PUMA's most recent success in
this ocean marathon have been positive. In the current America's Cup World
Series PUMA, who serves as the exclusive licensee for the America's Cup Event
Authority and the PUMA-sponsored Team ORACLE Racing, are getting prepared for
the next exciting regattas in Venice in May and Newport, Rhode Island in June.
Expenses and Profitability
Gross Profit Margin softens to 51.2% in the first quarter of 2012
Input price pressures were mainly responsible for the drop of the gross profit
margin in the first quarter, which comprised 51.2% of group sales, down from
52.4% at the same point last year. Hedging also had a negative effect, as did
the product and regional mix.
As a consequence, Footwear fell back from 51.3% to 49.5%, Apparel dropped
slightly from 53.7% to 53.5% and Accessories declined from 54.0% to 51.9% which
is mainly due to the first time inclusion of the newly added US sock and
bodywear business, which carries lower margins.
Satisfying retail performance
Retail sales constituted EUR 122 million, or 14.9% of total sales, in the
first
three months of 2012, an improvement of 15.2% year on year, underlined by
positive comparable sales in the current store portfolio and newly opened
stores in 2012.
Operating Expenses rise as growth strategy is implemented
Operating expenses rose by 8.0% to EUR 322 million in the first quarter of
2012,
as the "Back on the Attack" growth strategy continues to be implemented. This
represents 39.3% of group sales compared to 38.6% in 2011. This increase was
mostly due to rising marketing, research, design and development expenditures.
Another component of the increase is the expansion of the retail store
portfolio over the past twelve months.
Operating Result (EBIT) impacted by drop in gross profit margin
Operating profit declined in the first three months of 2012 from EUR
111.0
million to EUR 102.0 million, caused mainly by the drop in gross profit
margin.
The moderate increase in operating expenses was in line with PUMA's plans. As a
consequence, the EBIT ratio decreased from 14.4% last year to 12.4% this year.
Financial Result / Income from associated companies improves
The financial result improved from EUR -0.2 million to EUR 1.1 million in the
first
quarter due to positive currency developments.
Earnings before Taxes (EBT) lower
PUMA's first-quarter EBT was lower at EUR 103.1 million in 2012 compared to
EUR
110.8 million in 2011, representing 12.6% of group sales compared to 14.3% at
this time last year. Tax expenses also fell from EUR 33.1 million to EUR
27.9
million, representing a tax rate of 27.1% versus 29.9% for the comparable
period in 2011.
Net Earnings drop slightly
Consolidated net earnings dropped slightly by 4.9% from EUR 77.7 million to
EUR
73.9 million. Earnings per share therefore also fell back from EUR 5.17 in
2011
to EUR 4.92 in the first quarter of 2012.
Net Assets and Financial Position
Equity rises
Total assets as of March 31st rose by 7.9% from EUR 2,303 million to EUR
2,486
million due to increases in both inventories and trade receivables. The equity
ratio moved up from 60.6% to 66.4% when compared to the first quarter of 2011,
once again strengthening the capital base. Shareholder's equity is now
equivalent to EUR 1,652 million, up from EUR 1,396 million.
Working Capital increases
PUMA's overall Working Capital increased by 21.0% to EUR 723.7 million.
Looking
at assets, inventories rose by 26.4% to EUR 587.1 million. This is mainly due
to
anticipated sales growth in the upcoming quarters, continuous expansion of our
retail store network and higher average prices per unit. Trade receivables also
increased by 7.4% to EUR 620.5 million, broadly in line with sales growth.
Cashflow (before acquisitions) remains constant
The Free Cashflow (before acquisitions) remained constant at EUR -111.5
million.
Outflows consisted mostly of working capital increases. The payments for
acquisitions relate to the purchase of the outstanding Dobotex shares, effected
on the 1st of January 2012.
Capex continued to increase by 28.1% to EUR -13.8 million and went mainly
into
Retail stores, supply chain initiatives and IT projects as "Back on the Attack"
investments continued.
Cash Position reduced
The Total cash position was reduced by 18.3% from EUR 300.8 million to EUR
245.8
million, caused by the purchase of the remaining Dobotex shares. Including
stable bank debts, the net cash position finished at EUR 203.2 million.
Outlook for the Financial Year 2012
PUMA's management has taken actions to improve the company's cost structure and
strengthen product desirability to foster sales growth and profitability. PUMA
is confident of achieving the full year targets as outlined in the 2011 annual
report. Management continues to foresee sales increases in the high single-
digit range and an increase in net earnings in the mid-single digit range for
the full year.
[pic]
Rounding differences may be observed in the percentage and numerical values
expressed in millions of Euro since the underlying calculations are always
based on thousands of Euro.
[pic]
Rounding differences may be observed in the percentage and numerical values
expressed in millions of Euro since the underlying calculations are always
based on thousands of Euro.
[pic]
Rounding differences may be observed in the percentage and numerical values
expressed in millions of Euro since the underlying calculations are always
based on thousands of Euro.
Media Relation:
Ulf Santjer - Corporate Communications - PUMA SE - +49 9132 81 2489 -
ulf.santjer@puma.com
Kerstin Neuber - Corporate Communications - PUMA SE - +49 9132 81 2984 -
kerstin.neuber@puma.com
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,
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 |
PUMA is one of the world's leading Sportlifestyle companies that designs and
develops footwear, apparel and accessories. It is committed to working in ways
that contribute to the world by supporting Creativity, SAFE Sustainability and
Peace, and by staying true to the principles of being Fair, Honest, Positive
and Creative in decisions made and actions taken. PUMA starts in Sport and ends
in Fashion. Its Sport Performance and Lifestyle labels include categories such
as Football, Running, Motorsports, Golf and Sailing. Sport Fashion features
collaborations with renowned designer labels such as Alexander McQueen, Mihara
Yasuhiro and Sergio Rossi. The PUMA Group owns the brands PUMA, Cobra Golf and
Tretorn. The company, which was founded in 1948, distributes its products in
more than 120 countries, employs more than 10,000 people worldwide and has
headquarters in Herzogenaurach/Germany, Boston, London and Hong Kong. For more
information, please visit http://www.puma.com
Further inquiry note:
Kerstin Neuber
Telefon: +49 (0)9132 81-2984
E-Mail: Kerstin.Neuber@puma.com
end of announcement euro adhoc
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company: PUMA SE
PUMA Way 1
D-91074 Herzogenaurach
phone: +49 (0)9132 81 0
FAX: +49 (0)9132 81-2246
mail: investor-relations@puma.com
WWW: http://about.puma.com/?lang=de
sector: Consumer Goods
ISIN: DE0006969603
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