PUMA SE

EANS-News: PUMA SE
PUMA speeds up and extends Scope of Corporate Transformation Program


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Financial Figures/Balance Sheet


Herzogenaurach (euro adhoc) - PUMA speeds up and extends Scope of Corporate
Transformation Program

                          Herzogenaurach, July 26, 2012

Performance Second Quarter 2012

    - Consolidated sales increase 11.8% in Euro terms
    - Gross profit margin remains stable at 49.1%
    - EBIT decreases by 15.0% to EUR 47.1 million
    - Net earnings decline by 29.2% to EUR 26.7 million
    - EPS down from EUR 2.51 to EUR 1.78
    - Scope of Transformation Program will be expanded



Performance First Six Months of 2012

    - Consolidated sales grow 8.8% in Euro terms
    - Gross profit margin softens to 50.2%
    - EBIT reduced by 10.4% to EUR 149.1 million
    - Net earnings decline by 12.8% to EUR 100.6 million
    - EPS falls from EUR 7.69 to EUR 6.72


Outlook for the Financial Year 2012


    - PUMA's Management has revised its previous guidance  for  2012  net  sales
      growth from a high-single digit to a mid-single digit rate.
    - Transformation Program to be extended, resulting in one-time costs  of  up
      to EUR 100 million.
    - Management expects annual net earnings  to  decrease  significantly  after
      posting  EUR  230.1  million  of  net  earnings  last  year   due   to  
the
      aforementioned one-time expenses.


"Despite the  poor  consumer  sentiment  and  challenging  business  environment
particularly in Europe, PUMA achieved respectable sales  growth  in  the  second
quarter and first half  of  this  year,"  said  Franz  Koch,  CEO  of  PUMA  SE.
"However, pressure on gross profit margins  and  further  strategic  investments
related to our 'Back on  the  Attack'  plan  in  combination  with  a  weakening
European business impacted second quarter net earnings. We have therefore  taken
measures to secure sustainable and profitable growth by broadening the scope  of
our Transformation Program. This program is designed to  reduce  complexity  and
establish a more efficient business model, operating on a leaner cost base."



   Americas region and Accessories segment support PUMA's second quarter sales

                                     growth
                        Net earnings weaker than expected


Sales Performance by Segment

PUMA's second quarter consolidated sales grew by 11.8%  in  Euro  terms  and  by
6.0% currency adjusted to EUR 752.9 million.  Whereas  Footwear  sales  were 
flat
currency adjusted at EUR 370.9 million, with Teamsport and Running  balancing 
the
softening  sales  in  the  Motorsport  and  Fitness  categories,  Apparel  sales
increased by 7.9% to EUR 256.4 million, fueled in part by higher  demand  for 
fan
wear in the Teamsport category on the back of EURO 2012. Accessories  jumped  by
24.3% to EUR 125.6 million with strong results in all regions for our  Cobra 
Golf
products and our socks business.

The performances of the PUMA supported Italian and Czech teams  were  resounding
successes for  our  growing  football  category  and  clearly  underline  PUMA's
reinforced commitment to strengthen our brand visibility and position as one  of
the top three football brands. The "Squadra Azzurra" made it all the way to  the
final, while the Czech Republic  put  on  an  excellent  display  to  reach  the
quarter-finals. PUMA's main footwear style for the Euro 2012, the new  EvoSpeed,
worn by German striker Mario Gomez, was launched shortly  before  the  start  of
the tournament, generating strong sell-through figures.

In PUMA's Sportlifestyle business, the Archive Lite, an ultra-light shoe with  a
contemporary  look  that  derives  from  the  Suede  and  has  been  fused  with
performance technology such as the FAAS Foam and  mash,  continued  to  resonate
well with consumers.

Over the first half of this year, consolidated sales improved by  8.8%  in  Euro
terms or by 5.1% currency adjusted to EUR  1.57  billion.  Footwear  sales 
slowed
down 1.2% currency adjusted. Apparel sales were up 8.0%  currency  adjusted  and
Accessories  rose  21.5%  currency  adjusted,  with  Cobra  Golf  and  the   new
Accessories joint venture in the US continuing to deliver excellent results.
Sales Performance by Region
Growth continues in the Americas and Asia
In regional terms, PUMA continued its  excellent  performance  in  the  Americas
with sales growing by 15.0% currency adjusted to EUR 278.7 million in  the 
second
quarter. Asia/Pacific posted a gain of 8.6% to EUR 190.6 million.  Sales  in 
EMEA
declined by 3.0% to EUR 283.6 million, due to the difficult market environment 
in
Europe and the weaker performance of the footwear category.

Half-year sales in the Americas rose strongly by 11.8%  currency  adjusted  with
good results across nearly all major markets.  Asia/Pacific  increased  by  9.4%
currency adjusted, supported by excellent numbers from India  and  Japan,  while
EMEA sales were down 2.1% currency adjusted with most markets not performing  at
the expected level, although Spain and Germany returned satisfying figures.

Sales Performance Retail
Retail posts solid growth
PUMA's retail operations  continue  to  provide  solid  growth.  Second  quarter

retail sales were EUR 150 million, 22.3% ahead  of  last  year's  EUR  122 
million,
representing 19.9% of total sales. From January to June, retail  sales  were  up
19% from EUR 228 million to EUR  272  million,  delivering  17.3%  of  total 
sales.
Increased volumes at existing stores, new store openings as  well  as  continued
growth  in  our  e-commerce  business  were  responsible   for   this   positive
development.

Margins, Expenses and Profitability

Gross Profit Margin remains steady in Q2, but falls in H1
PUMA was mostly able to allay the effects of continued input price pressures  in
the second quarter. The gross profit margin stayed flat at 49.1% in  the  second
quarter of 2012, supported by a favorable hedging impact compared to last  year.
However, the expected slight increase in margin did not materialize and we  were
therefore not able to offset higher input cost  and  margin  pressure.  Footwear
rose slightly from 48.1% to 48.3% and Apparel  improved  from  48.9%  to  49.4%.
Accessories, however, fell back from 53.3% to 51.1% compared to 2011.
On a half year basis, the gross profit margin  declined  70  basis  points  from
50.9% to 50.2%. Footwear fell from 49.8% to 48.9%. Apparel rose marginally  from
51.4% to 51.5% while  Accessories  moved  lower  from  53.7%  to  51.5%  due  to
increased golf club business, which carries lower margins.

Operating Expenses increase
Second quarter operating expenses continued to rise as set  out  in  our  growth
strategy. OPEX rose by 17.0% to EUR 327.4 million in the  second  quarter  of 
the
year compared  to  EUR  279.9  million  last  year.  Increased  expenditures 
were
necessary to support the Euro-Cup in Poland and Ukraine  and  first  initiatives
for the Olympics in London, while at the same time PUMA has been extending  RD&D
resources  and  initiatives  in  order  to  strengthen  the  company's   product
pipeline. In addition,  PUMA's  increased  number  of  retail  stores,  currency
impacts  and  the  extended  scope  of  consolidation  were  responsible  for  a
considerable portion of this increase.

For the first half of 2012, OPEX rose by 12.3% or EUR 71.4 million  from  EUR 
578.5
million to EUR 649.9 million, impacted by the same factors as the  second 
quarter
figures. In addition, higher costs incurred to build up the  groundwork  of  the
Transformation Program, such as standardized  ERP-IT-systems  and  the  regional
supply chain initiative.

EBIT declines due to lower than expected sales and higher expenses
Operating profit declined by 15.0% to EUR 47.1 million during the  second 
quarter
of 2012. On a half-year basis EBIT fell by  10.4%  to  EUR  149.1  million, 
which
represents an EBIT margin of 9.5%.

Financial Result
The financial result declined from EUR -1.6 million to EUR -3.7 million  due 
mainly
to negative  currency  developments.  Similarly,  for  the  year  to  date,  the
financial result moved down from    EUR -1.8 million to EUR -2.7 million.

Earnings before Taxes
PUMA's second quarter EBT was down 19.4% to EUR 43.3 million.  The  quarterly 
tax
ratio increased from 30.0% to 33.8%.

EBT also fell for the first half of the year from EUR 164.6 million to EUR 146.4
million, representing a drop of 11.0%. However, the company reported an
improved tax rate of 29.1% compared to last year's 30.0%.

Net Earnings decline
As a consequence of lower than expected gross  profit  and  increased  expenses,
consolidated net earnings decreased by  29.2%  to  EUR  26.7  million,  coming 
in
weaker than Management had anticipated. Earnings per share fell by  29.0%  to 
EUR
1.78.

For the first half of 2012, net earnings weakened by 12.8% to  EUR  100.6 
million
and EPS decreased by 12.6% to EUR 6.72.




                        Net Assets and Financial Position


Equity
Total assets as of June 30, 2012 grew by 10.1% from EUR 2,343 million to  EUR 
2,580

million, mainly due to an increase in inventories.  The  equity  ratio  improved
strongly from 59.4% to 65.7% when compared to the second  quarter  of  2011.  In
absolute figures, shareholders' equity increased by 21.8% from EUR  1,392 
million
to EUR 1,696 million.

Working Capital related Assets and Liabilities
Looking at assets, inventories rose by 26.1% currency adjusted or 32.3% in  Euro
terms to EUR 672.3 million. This is mainly due  to  the  continuing  expansion 
of
PUMA's retail store network and higher average prices per unit on  stock.  Trade
receivables also increased by 7.0% currency adjusted or 11.6% in Euro  terms  to
EUR 582.7 million, broadly in line with sales growth.  On  the  liabilities 
side,
trade payables increased by 10.4% to EUR 469.5 million.

Cashflow/ CAPEX
The Free Cashflow (before acquisitions) came in at EUR -57 million compared  to 
EUR
-9 million for the same period in 2011, with the outflows consisting  mostly  of
working capital increases. The payments for acquisitions relate to the  purchase
of the outstanding Dobotex shares, effected on January 1, 2012.

CAPEX increased by 17.1% to EUR 34 million and continued for the most part  to 
be
related to investments aligned with "Back on the Attack", such as  supply  chain
initiatives and IT projects.

Cash Position
The total cash position as of June 30, 2012 was reduced  by  19.8%  from  EUR 
352
million to EUR 282 million, affected by the  purchase  of  the  remaining 
Dobotex
shares. Including bank debts, the net cash position decreased 26.6% from  EUR 
321
million to EUR 236 million.


 PUMA's Transformation Program aiming at optimizing Business Model and improving
                                 Cost Structure

Given the challenges in its European business, coupled with increasing  pressure
on gross profit margins and the need for continued  strategic  investments  into

brand, product and the company's structure, PUMA's  management  has  decided  to
accelerate the Transformation Program, which began in 2011 under  the  aegis  of
the company's five-year growth plan.

This program aims to reduce complexity, increase operational  efficiencies,  and
streamline the company's cost bases. At the core of the program is the setup  of
a new regional business model which will initially be rolled out in  Europe  and
will then be extended to the remaining regions.

The  European  setup  will  be  simplified  by  consolidating  the   number   of

organizational entities within Europe from 23 countries to  seven  areas.  Areas
are groupings of countries where operations and back-office  functions  will  be
further centralized while each of the individual countries will  maintain  their
commercial functions to enable a stronger focus on the end-consumer.

Another key component of the new regional business model  is  the  establishment
of a fully regionalized supply chain, which  will  significantly  improve  order
management, inventory levels and turns, as  well  as  production  flows  on  the
sourcing side. In order to enable and benefit from  these  new  processes,  PUMA
has decided to roll out a globally harmonized IT systems landscape.

The extended scope of  PUMA's  Transformation  Program  includes  the  continued
optimization of PUMA's retail portfolio mainly  in  Europe  and  North  America.
PUMA's retail strategy consists  of  the  selective  adding  of  new  stores  in
profitable locations, particularly in  Emerging  Markets,  while  closing  those
that are underperforming.

In addition, PUMA will further simplify its product portfolio  by  significantly
reducing the overall  number  of  articles  developed.  In  line  with  the  new
regional  business  model,  PUMA  will  develop  strong  global   and   regional
collections while trimming collections  that  are  created  for  specific  local
markets. Furthermore, collaboration and endorsement contracts  that  are  either
not viable or in line with PUMA's long-term strategy will be terminated.

In addition to the above  laid-out  measures,  PUMA  will  further  improve  the
company's cost structure by streamlining its global  and  regional  organization
setups.

PUMA's Management estimates that these actions will require  one-time  costs  of
up to EUR 100 million, which will ultimately result in higher cost efficiency 
and
working capital improvements in the upcoming years.

Managing Directors
Klaus Bauer (57), Chief Operating Officer,  informed  the  Administrative  Board
that he is not planning to extend his current contract beyond 2012  due  to  his
personal life planning. Michael Lämmermann (50), General Manager  Finance,  will
take on the position of Chief Financial Officer, effective January 1,  2013  and
will also be responsible for Legal in addition to Finance.

Klaus Bauer joined PUMA in 1989 and became a member of the Board  of  Management
in 2009. As Chief Operating Officer, Klaus Bauer  is  responsible  for  Finance,
Legal, Human Resources, IT, Logistics and Operations. He will remain  in  charge
of his duties until he leaves  the  company  at  the  end  of  the  year,  hence
ensuring a smooth transition and hand-over to both Michael  Lämmermann  and  the
successor as COO, who will be announced at a later date.

Michael Lämmermann joined PUMA in 1993 and became the  Director  of  Controlling
in 1998. He was then promoted to Chief Financial  Officer  and  Chief  Operating
Officer of PUMA North America, based in Westford, USA, a role he filled  for  10
years, before returning to Germany to  take  up  his  current  role  as  General
Manager Finance.

Antonio Bertone (39), Chief Marketing Officer, will also be leaving the  company
at the end of 2012 to pursue other career  opportunities  after  18  years  with
PUMA. Antonio Bertone will continue to work  for  PUMA  as  a  consultant  on  a
project basis, providing his skills and expertise in managing global  brand  and
marketing initiatives to PUMA. As Chief Marketing Officer,  he  oversees  PUMA's
global brand management and will also remain in charge of his duties  until  the
end of the year. His successor will  be  announced  at  a  later  date.  Antonio
Bertone had been a deputy member of PUMA AG's Board of Management since 2008.



                       Outlook for the Financial Year 2012



The above laid-out one-time costs of up to EUR 100 million will be booked  in 
the
second half of 2012.

Management expects PUMA's sales in the upcoming two quarters to grow, albeit  at
a reduced pace due to the increasingly difficult macro-economic environment  and
high levels of inventory in the markets.

The Management therefore revises its  previous  guidance  for  PUMA's  2012  net
sales growth from a high-single digit to a mid-single  digit  rate  and  expects
annual Net Earnings to decrease significantly from the EUR  230.1  million 
posted
last year, impacted by the aforementioned one-off expenses.
[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:
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  and
Mihara Yasuhiro. 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 about 11,000 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
indexes:     Midcap Market Index, MDAX, CDAX, Classic All Share, HDAX, Prime All
             Share
stockmarkets: free trade: Hannover, Berlin, Hamburg, Düsseldorf, Stuttgart,
             regulated dealing: München, regulated dealing/prime standard:
             Frankfurt 
language:   English
 

 

 



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