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Financial Figures/Balance Sheet
Herzogenaurach (euro adhoc) - PUMA's 2012 Sales meet Expectations
Transformation and Cost Reduction Program impact Profitability
Herzogenaurach, February 14, 2013
2012 Fourth Quarter Highlights
- PUMA's consolidated sales climb by 11.7% in Euro terms to EUR 804.7
- Gross profit margin declines to 44.6% due to inventory clearance.
- EBIT before special items falls slightly to EUR 42.8 million.
- Special items of EUR 98.2 million booked in the quarter.
- Net earnings come in at EUR -42.6 million, impacted by special items.
2012 Full Year Highlights
- PUMA's full year consolidated sales rise by 8.7% in Euro terms to just
under EUR 3.3 billion.
- Gross profit margin abates to 48.3%.
- EBIT before special items softens by 12.8% to EUR 290.7 million.
- Special items of EUR 177.5 million caused by Transformation and
Reduction Program, Spain Arbitration and restructuring of businesses in
Greece, Cyprus and Bulgaria.
- EBIT including special items totals EUR 113.2 million.
- EPS amount to EUR 4.69 after EUR 15.36 last year.
Outlook for the Financial Year 2013
- Transition Period defined within our strategy extended into 2013
- Launch of "The Nature of Performance" brand platform and new product
innovations to revitalize Performance categories
- Management expects 2013 sales unchanged from the 2012 level
- Management envisages an increase in EBIT before special items of low- to
mid-single digits and a significant improvement of net earnings
"Despite a continuously challenging market environment, particularly in Europe,
PUMA delivered a strong sales performance in the fourth quarter, enabling us to
meet our sales projections for the full year of 2012," said Franz Koch, CEO of
PUMA SE. "We have completed defining the scope of PUMA's Transformation and
Cost Reduction Program, and will continue with the implementation of all
measures throughout 2013 to improve the company's profitability. I want to
reiterate that it is not our priority to push for sales growth at any cost, but
instead focus on improving desirability for the PUMA brand."
Strong performances in Asia and North America give impetus to PUMA's Fourth
Quarter Sales Growth
PUMA delivered a strong sales performance in the fourth quarter of 2012.
Boosted by double-digit sales growth in Asia and North America, PUMA's
consolidated sales increased by nearly 12% in Euro terms or 8.7% currency
adjusted to EUR 804.7 million from October 1 to December 31. The numbers
supported by the performance of Cobra PUMA Golf, with its products resonating
exceptionally well with consumers.
Sales Performance by Segment
All of PUMA's product segments grew in the fourth quarter of 2012. Footwear was
up by 8.6% in Euro terms to EUR 367.9 million. On the Performance side,
Faas footwear family continued to appeal to consumers while the PUMA Suede
range fuelled sales in PUMA's Lifestyle footwear business.
Apparel climbed by 15.2% in Euro terms to EUR 316.6 million after
demand for Fitness & Training gear. Accessories rose by 12.3% in reported terms
to EUR 120.1 million driven by our US joint ventures Janed and Wheat as well
our Cobra PUMA Golf business.
Sales Performance by Region
While PUMA's sales increased in all regions, performance in the Asia/Pacific
region was exceptionally satisfactory during the fourth quarter. Sales rose by
16.2% to EUR 246.7 million while PUMA expanded in virtually all markets.
and India in particular excelled on the back of demand for evoSPEED Apparel
products. Seasonal factors also played a part, with winter collections gaining
traction with consumers, especially PUMA branded duffel coats and parka
collections in Korea, China and Japan.
PUMA was also able to reverse the slight declines from previous quarters in the
EMEA region, with sales rising by 7.0% in Euro terms to EUR 253.4 million.
performance was supported by strong growth in Germany, Sweden and Switzerland
delivering satisfying growth rates. PUMA's Lifestyle footwear ranges sold well,
especially the PUMA Suede in developed countries as well as our Motorsport
collections in emerging markets.
In the Americas, PUMA continued to increase sales at a favorable rate,
improving by 12.2% in reported terms to EUR 304.5 million. This growth was
mainly by the Cobra PUMA Golf business as well as by undiminished demand for
Fitness, Lifestyle and Motorsport products.
Sales Performance Retail
PUMA's retail business increased by a significant 23.0%, with the company
operating 60 additional stores when compared to the fourth quarter of last
year. As in the three previous quarters, our comparable store sales developed
positively, while E-commerce sales rose by 23.4% over the same period.
Margin, Expenses and Profitability
PUMA's fourth quarter gross profit margin declined from 46.7% to 44.6%. The
Footwear margin fell sharply from 46.6% to 41.8%, due to inventory clearances
during the quarter and unfavorable hedging rates as well as a shift in the
regional mix. The gross profit margin for Apparel, however, improved from 45.9%
to 46.6% and Accessories declined from 49.0% to 48.0%.
Operating expenses in the fourth quarter continued to rise, by 10.0% from
292.3 million to EUR 321.5 million. This was equivalent to 40.0% of sales and
OPEX ratio improvement from 40.6% in 2011. The absolute increase in operating
expenses is mostly attributable to higher marketing and retail expenses on the
back of our increased retail portfolio as well as continuing IT and supply
chain infrastructure improvements.
The EBIT before special items fell by 11.2% to EUR 42.8 million in the
quarter from last year's EUR 48.1 million and also as a percentage of sales,
6.7% to 5.3%.
In addition to the special items of EUR 79.3 million reported in the
quarter, PUMA recorded a further EUR 98.2 million in special items for the
three months of 2012. These additional items consist of the arbitral award in
December related to the trademark rights in Spain, the restructuring of our
distribution set-up and the closure of our subsidiaries in Greece, Cyprus and
Bulgaria, as well as the streamlining of our product and endorsement portfolio.
The fourth quarter financial result further improved from EUR -8.9 million
neutral, largely as a result of a decline of foreign exchange impacts.
EBT in the fourth quarter fell from EUR 39.3 million to EUR -55.4 million.
earnings consequently also declined from EUR 33.1 million to a loss of EUR
million in the quarter and Earnings per share followed suit, reduced from
2.21 to EUR -2.85. These drops all stem from the special items booked in
PUMA reaches 2012 Full Year Sales Target
2012 was an exceptional year for PUMA in many ways. The Football Euro Cup in
June, the conclusion of PUMA's second Volvo Ocean Race in July and the Summer
Olympics in August turned 2012 into a year full of major sports highlights.
These events provided the perfect platform for PUMA to generate global brand
visibility and desirability.
In terms of product, 2013 will be a pioneering year for PUMA, as the company re-
energizes its Performance positioning through the introduction of a new cross-
category brand platform: The Nature of Performance. The Nature of Performance
unifies all of PUMA's performance categories with a consistent voice, look and
feel and serves as the inspiration for a collection of innovative new products
in the Football, Running, Training, Fitness and Golf categories.
PUMA's management began to implement the company's Transformation and Cost
Reduction Program throughout the second half of 2012, laying the groundwork for
substantial financial improvements going forward. The program entails the set
up of a new business model in Europe by reducing the number of reporting
entities from 23 countries to seven areas as well as a strong European
management paradigm. The areas DACH (Germany, Austria, Switzerland), IBERIA
(Spain, Portugal), UKIB (UK, Ireland and Benelux), SCANDINAVIA (Denmark,
Finland, Norway, Sweden), EASTERN EUROPE (Estonia, Latvia, Lithuania, Poland
and Slovakia, Czech Republic, Hungary), FRANCE and ITALY have all been
The Transformation and Cost Reduction Program includes the closure of
approximately 90 unprofitable stores, mostly in established markets, which has
also begun. However, PUMA will continue to open new stores in selected
profitable locations throughout 2013, primarily in emerging markets. PUMA
expects to be operating 540 stores at the end of 2013 compared with 590 stores
at the end of 2012.
PUMA has also assessed its sponsorship portfolio and terminated endorsement
contracts that are either unprofitable or are no longer part of PUMA's core
categories going forward. Within this context, PUMA has decided to focus its
activities in the Sailing category on endorsing the America's Cup and ORACLE
TEAM USA for 2013. Beyond 2013, PUMA will cease the production of Sailing
products, and focus instead on its Outdoor business, for which Sailing has
served as the perfect springboard. PUMA has also decided to exit all European
Rugby activities, including the endorsement of the Irish Rugby Football Union
beyond the 2013/14 season.
Full year sales increase to almost EUR 3.3 billion
Consolidated sales for the Full Year climbed 8.7% in Euro terms or 4.6%
currency adjusted to EUR 3,270.7 million. With this record result, PUMA
its sales target for the full year.
Sales Performance by Region
While sales in EMEA softened by 0.8% in Euro terms to EUR 1.3 billion due to
weaker performance in Western Europe, there were strong performances in
Germany, Russia and Turkey in 2012. The Americas delivered a satisfying
performance, including North America, Mexico and Argentina, increasing in Euro
terms by 16.6% to EUR 1.13 billion. Asia/Pacific was equally strong, rising
15.3% to EUR 841.7 million, supported by good numbers in Japan and India
Sales Performance by Segment
In terms of segments, Footwear grew 3.6% in Euro terms to EUR 1.6
Apparel rose by 11.2% to EUR 1.15 billion, while Accessories posted an
20.7% increase to EUR 523.6 million also bolstered by consolidation effects
the new joint ventures.
Retail sales climb by EUR 109.0 million
Sales in our owned and operated retail outlets rose by 21.2% in 2012 to EUR
million, an increase of EUR 109.0 million from 2011. This is due in part to
expansion of our retail base compared to the end of 2011. As a percentage of
total turnover, retail sales rose from 17.9% to 19.1%. E-commerce also posted a
gain, up 16.5% for the year.
Gross profit margin eases to 48.3%
For the full year, PUMA's gross profit margin moved down from 49.6% to 48.3% in
2012. This was due to a combination of factors, most notably inventory
clearance, the regional mix and also continued input cost pressure in the form
of wage inflation in the Far East. The Footwear margin declined from 49.1% to
46.5%. Apparel rose slightly, from 49.6% to 49.8% whereas Accessories fell,
from 51.6% to 50.5%.
PUMA's full year operating expenses rose by 11.0% in 2012, from EUR
million to EUR 1,307.5 million, slightly ahead of and equal to 40.0% of
Marketing and Retail rose by 10.7% to EUR 609.3 million, and also slightly as
percentage of sales to 18.6% after 18.3% last year, caused by supporting a
double event year and the increasing number of stores operated by PUMA. Other
Selling Expenses rose 11.4% to EUR 431.1 million. Similarly, Research, Design
Development costs rose 10.3% to EUR 84.9 million as PUMA continues to
its product pipeline. General and Administrative Expenses were up 5.0% to
205.0 million. Despite this, the expense ratio declined from 6.5% to 6.3% in
2012 due to cost saving measures. The Company reported other operating income
of EUR 22.9 million compared to EUR 32.2 million in 2011.
Earnings before special items
EBIT before special items declined 12.8% to EUR 290.7 million as a result
higher costs and lower than expected margins. As a percentage of sales this is
equal to 8.9% for the year compared to last year's 11.1%.
PUMA recorded EUR 124.9 million in special items that are related to
Transformation and Cost Reduction Program. These have been incurred mainly by
restructuring the European region, optimizing the retail portfolio, adjusting
the product and endorsement portfolio, and reorganizing our global functions
and local subsidiaries.
As announced on 20 December 2012, the former Spanish distributor and license
holder Estudio 2000 S.A., who owned several PUMA trademark rights in Spain, was
obliged to vest these to PUMA in accordance with the award of the arbitration
panel. According to this ruling, the transfer of the trademark rights is
subject to a one-time payment of EUR 42.2 million to Estudio 2000 S.A., which
to a one-off expense of EUR 24.6 million in 2012.
For Greece, Cyprus and Bulgaria, PUMA has appointed Sportswind, a local
distributor, to take over PUMA's business activities in these countries, as
PUMA wants to focus its efforts, initiatives and investments on its key
strategic markets. The distribution agreement should reduce PUMA's business
risks in these markets substantially while at the same time improve its sales.
PUMA will close its own operations in due course in these three markets. The
restructuring of the aforementioned distribution and operations resulted in
additional one-time costs of EUR 28.0 million.
Operational result after Special Items
The EBIT after special items for 2012 was EUR 113.2 million, or 3.5% as
percentage of sales.
The financial result for 2012 improved significantly and was EUR -0.9
compared to EUR -12.8 million in 2011 due to lower foreign exchange impacts
PUMA's financing activities.
Full year EBT was therefore EUR 112.3 million, or 3.4% of sales, while the
ratio remained stable at 28.9%.
As a result of our Transformation and Cost Reduction Program in 2012, net
earnings for the financial year 2012 were EUR 70.2 million, compared to EUR
million last year and EPS was therefore equal to EUR 4.69 and down from
year's EUR 15.36.
Net Assets and Financial Position
The equity ratio rose from 62.2% to 63.1%, which indicates continued
improvement in our capital base, despite the lower net earnings in 2012.
PUMA's overall Working Capital increased by 16.8% to EUR 623.7 million, due
particular to a decline of working capital related liabilities at the balance
sheet date. On the asset side, testament to PUMAs strict management,
Inventories rose only slightly, by 2.9% to EUR 552.5 million and
receivables actually decreased despite the rise in sales, down 4.9% to EUR
Cashflow / Capex / Cash Position
Free cashflow before acquisitions for the full year improved by 37.1% from
61.0 million to EUR 83.5 million in 2012 mainly due to lower tax payments.
regards to our Capex, PUMA's outgoings increased by 14.1% to EUR 81.2
related to store openings and IT investments. Payments for acquisitions more
than doubled to EUR 91.7 million, consisting for the most part of PUMA's
of all outstanding Dobotex shares at the beginning of the year. As a
consequence, the net cash position decreased by 12.1% to EUR 363.2 million.
The Administrative Board will propose at the Annual General Meeting on May 7,
2013, that a dividend of EUR 0.50 per share (EUR 2.00 in the previous year) be
for the financial year 2012. This is a result of the reduced earnings caused by
the special items undertaken under the Transformation and Cost Reduction
Program, the restructuring of the distribution in southern east European
countries and the Arbitration ruling in Spain.
The company did not buy back any of its own shares throughout the year,
including the fourth quarter of 2012. As of the balance sheet date, PUMA owned
143.185 of its own shares, equal to EUR 32.2 million.
Management expects that PUMA's sales in 2013 will remain at a level consistent
with that of 2012. This is due to the fact that the implementation of the
Transformation and Cost Reduction Program will continue throughout 2013, making
it a transitional year before PUMA will once again generate desirable,
profitable sales growth. However, as PUMA's Transformation and Cost Reduction
Program is geared towards improving the company's profitability, management
envisages an increase in EBIT before special items in the low- to mid-single
digits while net earnings should improve significantly.
Kerstin Neuber - Corporate Communications - PUMA SE - +49 9132 81 2984 -
Carl Baker - Finance - PUMA SE - +49 9132 81 3188 - email@example.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 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:
Telefon: +49 (0)9132 81-2984
end of announcement euro adhoc
company: PUMA SE
PUMA Way 1
phone: +49 (0)9132 81 0
FAX: +49 (0)9132 81-2246
sector: Consumer Goods
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