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:

• 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. 

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

end of announcement                               euro adhoc

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

Original-Content von: PUMA SE, übermittelt durch news aktuell

Weitere Meldungen: PUMA SE

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