PUMA AG Rudolf Dassler Sport

EANS-News: PUMA AG announces its Consolidated Financial Results for the Third Quarter and First Nine Months of 2010

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quarterly report

Herzogenaurach (euro adhoc) - Herzogenaurach, Germany, October 26,
2010 - PUMA AG announces its Consolidated          Financial Results for
the Third Quarter and First Nine Months of 2010

Highlights Third Quarter:

• Consolidated sales at EUR 784 million, up 16.5% in Euro terms    • Gross profit margin remains at 50%    • Operating result before special items improves by 15.3% to EUR 113 million    • EPS rise from EUR 4.50 to EUR 5.16    • Usain Bolt remains long-term brand asset for PUMA    • PUMA AG to take over full control in China and Hong Kong    • Irregularities discovered in Greece

Highlights January-September:

• Consolidated sales increased 5.7% in Euro terms    • Gross profit margin slightly down versus last year at 50.8%    • Operating result before special items improved by 7.7% to EUR 296.1 million    • EBT before tax improved by 83.2% to EUR 292.0 million    • EPS increased to EUR 13.65 from EUR 7.42 last year    • Continued improvement in equity ratio

Outlook 2010:

@@start.t2@@• Based on a strong sales performance in the third quarter as  well  as  an
         improvement in the overall outlook for the fourth quarter, Management now
         expects sales to be up in the mid to high single-digit for the full  year
      • Management expects an increase in EBIT before special items  versus  last
      • Extraordinary one-time charge from PUMA Hellas S.A. affects  results  for
         2010 as well as previous year.@@end@@

Jochen Zeitz, CEO: "Unfortunately, the discovery of irregularities committed  by our Greek Joint Venture Partner is casting  a  shadow   on  our  solid  financial performance in  the  quarter.  However,  we are  pleased  to  see  that  PUMA´s operational performance improved significantly in the third quarter as  we  post a strong rise in sales and operating results. We expect  the  sales  outlook  to further improve for the fourth quarter and as a result we raise our forecast  of growth to mid to high single digits for the  full  year 2010.  Looking  further ahead, we are positive about our capabilities and  game  plan  to  execute  and deliver on our new "Back on The Attack" Plan 2015 with a potential  of  reaching four billion Euros. We have prepared  our  organization  and  are  aligning  our processes accordingly to execute our new plan. We are confident  and optimistic about the large opportunities to further tap into our brand´s  potential  growth drivers that we will reveal today during our investor day presentations  at  the PUMAVision Headquarters in Herzogenaurach."

Sales and Earnings Development

Global Brand Sales Sales under the PUMA  brand,  which  include   consolidated  and  license  sales, improved by 15.1% to EUR 828.6   million  in  the  third  quarter.  In  total, the quarter marked a very solid  performance  against  the  background  of  a  still challenging global economic environment.

After nine months, global brand sales increased 4.8% and were  close to  EUR 2.2 billion despite a flat first half of the year.

Consolidated Sales Currency-adjusted consolidated sales were up 6.5% to  EUR  784.3  million  in the quarter, which represents an increase of 16.5%  in  Euro  terms.  Footwear  rose 6.0% currency-neutral to EUR 417.2 million, and Apparel sales improved by 1.3% to EUR 263.8 million. Accessories sales reported a significant improvement  of 25.0% to EUR 103.3 million, which derives from organic growth  as   well  as  first time consolidations. In terms of regions, the   Americas  grew  strongest  with  26.7% currency-neutral while  APAC   advanced  1.4%  currency-adjusted.  EMEA  softened slightly 1.1%.

After nine months, consolidated sales were up 5.7% in Euro terms  and flat  (- 0.1%) currency-neutral at EUR  2,082.8  million.  Despite  a challenging market environment, sales in the Americas region jumped a strong 24.9  %  with  North- and Latin America reporting double-digit sales growth. Sales performance in the EMEA region was impacted by   unfavorable  market  conditions  in  Southern  and Eastern European countries and, therefore, posted a currency-adjusted  decrease of 5.6%. Sales in Asia/Pacific were up 1.5% in  reported  terms  but   decreased 7.9% due to the strong  fluctuations  in  currencies.  In   terms  of  segments, Footwear stood at EUR 1,117.2 million, representing a currency-neutral decline of 2.7%  and  Apparel  sales softened  slightly  by  0.8%  to  EUR  699.2 million. Accessories sales, however, grew by 14.6% to EUR 266.4 million.

Gross Profit Margin In the third quarter, PUMA´s gross profit margin decreased by 180  basis  points to 50%. The decline was caused by price sensitivities  in  the  EMEA  region  as well as changes in the regional as well as product mix.

After nine months, the gross profit margin  stood  at  50.8%  after   51.4%  last year. PUMA´s margin in Footwear remained flat at  50.2%   while  Apparel  was  at 51.6% after 52.2%. Accessories posted 51.1% compared to last year´s 54.8%.  This decrease stems from the impact of the newly acquired and integrated  Cobra  Golf business carrying a low margin as the former  owner,  Acushnet,  provided  sales services outside the US until end of August.

Operating Expenses

The OPEX increased by 10.4% to EUR 283.6 million in  the  quarter.   This  rise is caused by the extension of the scope of business after Cobra Golf  was  included as well as currency impacts. On a   comparable  basis,  operating  expenses  were flat, which is reflected in an improved OPEX ratio of 36.2%. In the first nine months, operating expenses rose by 3.1% to  EUR  776.4 million, which translates into an improved cost ratio of 37.3% versus last year´s   38.2%. The cost savings are a direct result of PUMA´s restructuring   and  reengineering program, which will be finalized during the fourth quarter 2010.


In the third quarter, PUMA´s operating  result  before  special   items  improved significantly by 15.3% to EUR 113.0 million versus EUR 98.0 million last year. As  a percentage of sales, this translates into an operating margin of 14.4%  compared to 14.5% last year.

As of September 30th, 2010, the operating result before special items rose  7.7% from EUR 275.1 million to EUR 296.1 million. The operating margin stood at  a solid 14.2% compared to 14.0% last year.

Financial Result/Income from Associated Companies

The financial result shows a negative EUR 1.9 million for the  third quarter and was flat versus last year.

For the first nine months, the financial result improved from EUR -5.6 million to EUR -4.6 million, while EUR 0.5  million  of  income was  generated  by associated companies.

Net Earnings In the third quarter, PUMA´s pre-tax profit (EBT) improved by 15.7% to  EUR 111.1 million after EUR 96.0 million. This led to an improvement in net earnings, which increased EUR 9.7 million or a strong 14.2% to EUR 77.6 million. Earnings per share went up to EUR 5.16 in the quarter compared to EUR 4.50 last year.

In the first nine months, earnings before tax stood at EUR 292.0 million versus EUR 159.4 million, an increase of 83.2%, while net earnings improved by 83.5%  to EUR 205.5 million from EUR 112.0 million.  Consequently,  earnings  per  share jumped from EUR 7.42 to EUR 13.65. The operational tax ratio came in at 29.6%  after being at 27.9% last year.

Net Assets and Financial Position


As of September 30th, 2010, the balance sheet  total  climbed  by   18.4%  to EUR 2,436.5 million. This increase was mainly caused by the inclusion of Cobra Golf as well as currency effects. The  equity   ratio  improved  from  59.1%  in  the previous year to 60.1% this year.

Working Capital

In reporting terms, inventories grew by 27.1% to EUR 452.9 million while  -  on a comparable basis - inventories rose  by  6.3%  to   support  the  expected  sales increase in the upcoming quarter. Due to the increase in sales in  the  quarter, accounts receivables were up by 14.2% (4.7% on a comparable basis),  reaching EUR 606 million. Working capital totaled EUR  594.2  million  (ex  acquisition  EUR 518 million) compared to EUR 523.3 million last year.


The company invested EUR 35.5 million in the first  nine  months   into property, plant and equipment versus EUR 40.8 million last year. An  outflow  of  EUR 102.4 million (last year: EUR 75.8 million) is related to acquisitions.

The free cashflow before acquisitions reached EUR  46.4  million   compared  to EUR 145.1 million last year.

Cash position

Total net cash position at the end of September increased  to  EUR   360.7 million from EUR 339.5 million last year, underlining PUMA´s strong financial position.

Share Repurchase

PUMA AG continued its share buyback program in the third quarter and, as of  the reporting date, the company purchased 102,219 of its  own shares.  This  equals 0.7% of the share capital and reflects an investment of EUR 23,4 million.

Other Events

Spain Arbitration Ruling

As announced within the 2010 half-year year financial statements,   PUMA  AG  has filed a cancellation recourse against the arbitration ruling regarding the  PUMA trademark rights in Spain. As of the reporting date, legal council and  advisers continue to believe that a favourable outcome in this case is more  likely  than not.

PUMA takes over full control of Business in China as of January 1, 2011

PUMA AG will acquire the remaining 49% of the shares of  its   long-term  Chinese joint venture Liberty China Holding Ltd, effective 1  January  2011,  to  be  in full control of its business activities in China  and  Hong  Kong.  Liberty  has been a Joint Venture between PUMA and Swire Resources Ltd., of  which  PUMA  has owned 51%. Under the Liberty holding, PUMA China Ltd. and PUMA  Hong  Kong  Ltd. have been responsible for  the  distribution  of  PUMA  products  in   China  for several years and will continue to do so. Through  the   full  take  over,  PUMA´s  position  in  China  will  be    further strengthened and maximized, making sure that  the  Sportlifestyle   Company  taps into the enormous potential that the largest market in Asia  offers.  PUMA  will be in sole charge of driving its growth strategy to  capture  all  opportunities on the Chinese market as part of PUMA´s five-year growth  strategy.  The  impact on the consolidated financial statements will be  insignificant,  as  the   joint venture had  already  been  consolidated  within  PUMA  AG  at 100%  since  its inception

Irregularities committed by Greek Joint Venture partner

As already mentioned in our ad hoc release on 25. October  2010,   irregularities were discovered at PUMA´s Joint Venture `PUMA  Hellas S.A.´  in  Greece,  which will affect PUMA´s consolidated financial statements for the full year 2010  and require a restatement of the 2009 figures in the 2010 statements. All  necessary measures have been initiated and  are  on-going.  For  further  information  and details please refer to the ad hoc  release  of  Monday,  25  October 2010,  on www.about.puma.com

Outlook Full Year 2010

The second half of the year continues to show solid sales  growth   which  should more than offset the flat performance in the first half of the year.  Therefore, management now expects full year consolidated sales to grow at  a  mid  to  high single digit rate. Considering slight changes in  the  gross  margin,  operating result before special items should improve compared to last year.

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, Yasuhiro Mihara and Sergio Rossi. The PUMA Group owns  the  brands  PUMA,   Cobra and Tretorn.  The company, which was founded in 1948, distributes  its  products in more than 120 countries, employs more than 9,000  people  worldwide  and  has headquarters in Herzogenaurach/Germany, Boston, London and Hong Kong.  For  more information, please visit www.puma.com

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.

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.

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. -----------------------

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ots Originaltext: PUMA AG Rudolf Dassler Sport
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
Kerstin Neuber

Telefon: +49 (0)9132 81-2984

E-Mail: Kerstin.Neuber@puma.com

Branche: Consumer Goods
ISIN:      DE0006969603
WKN:        696960
Index:    Midcap Market Index, MDAX, CDAX, Classic All Share, HDAX,
              Prime All Share
Börsen:  Frankfurt / regulated dealing/prime standard
              Berlin / free trade
              Hamburg / free trade
              Stuttgart / free trade
              Düsseldorf / free trade
              Hannover / free trade
              München / regulated dealing

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