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PUMA SE: Sales growth across all regions driven by Footwear

DGAP-News: PUMA SE / Key word(s): Quarter Results/Half Year Results
PUMA SE: Sales growth across all regions driven by Footwear

24.07.2015 / 08:00

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PRESS RELEASE

Sales growth across all regions driven by Footwear

Currency effects continue to have negative impact on margins

Herzogenaurach, 24 July 2015

2015 Second Quarter Facts
- Currency adjusted sales up by 7.6% to EUR 772.7 million (+18.5%
reported)

- Strong growth in Footwear driven by Running and Training categories

- Gross profit margin stable at 46.7% despite adverse currency effects

- OPEX increase based on additional marketing activity, IT investments
and currency impacts

- Operating income (EBIT) comes in at EUR 6.8 million

- Tretorn trademark rights sold

- PUMA-sponsored national football team of Chile wins Copa América title
for the first time

2015 Half Year Facts
- Currency adjusted sales grow across all regions by 5.9% to EUR 1,594.1
million, exceeding expectations

- Gross profit margin falls by 90 basis points to 46.8% due to currency
effects

- OPEX rise by 19.1% to EUR 708.5 million due to higher marketing
activities, retail expansion and IT investments as well as adverse
currency impacts compared to last year

- Operating income (EBIT) amounts to EUR 44.3 million

- Earnings per share come in at EUR 1.44

- Innovative IGNITE running product platform shows good sell-through



Bjørn Gulden, Chief Executive Officer of PUMA SE: "We saw a continued
positive development of our sales in Q2. This was again driven by a strong
growth in Footwear. We have said that growth in footwear is key for us to
turn the company around and feel that the investment in new and innovative
products is starting to pay off. The negative effect of currencies is
continuing to hurt our gross profit margin and increase our operational
expenses, thus reducing our earnings. We are of course working to offset
the impact of this by gradually increasing sales prices in markets that are
hurt by the negative effects, and we are, when possible, moving some of the
sourcing to the local markets. These measures are currently not enough to
totally offset the loss in reported gross profit margin. Despite the
pressure on margins, we have decided to continue our investments in
marketing, IT, and in the modernizing of our retail network. We believe
these investments are needed to regain the strength of the brand and to
ensure long-term growth for the company. We have a vision of becoming the
fastest sports brand in the world and know that we have to invest now to
achieve our goal long term. Furthermore, we confirm our financial guidance
from Q1."

Second Quarter 2015

Currency adjusted sales exceed expectations
In the second quarter of 2015, PUMA's consolidated sales improved by 7.6%
currency adjusted to
EUR 772.7 million and were above our expectations. This positive
development was primarily driven by the growth in Footwear sales across all
regions. In reported terms, consolidated sales rose a strong 18.5%.


Growth in all regions
Second-quarter sales for the EMEA region (Europe, Middle East and Africa)
rose by 3.9% currency adjusted to EUR 270.5 million. The development was
particularly encouraging in Germany, France and Turkey, while Italy and
Switzerland suffered a decline on high comparables (last year's World Cup
replica sales not repeating this year).

Sales performance in the Americas was stronger in the second quarter with
growth in both, North and Latin America. Currency adjusted sales increased
by 11.6% to EUR 328.4 million. In particular, Argentina and Mexico showed
above average sales developments.

Asia/Pacific (APAC) showed a satisfying second-quarter performance, with
sales rising by 6.2% currency adjusted to EUR 173.8 million. The increase
was primarily attributable to good performances in China and India, each
reporting double-digit growth.

Footwear leads product segment performance
Sales in Footwear increased for the fourth quarter in a row, rising by
16.2% currency adjusted to
EUR 358.8 million. This development was mainly driven by the Running,
Training and Sportstyle categories and especially the PUMA IGNITE product
platform.

Apparel sales were broadly flat at EUR 263.3 million. This is against high
comparables in the second quarter 2014, when sales in replica jerseys
driven by the FIFA World Cup were particularly strong.

Accessories grew by 3.6% currency adjusted to EUR 150.7 million and
developed in line with our expectations.

Gross profit margin stable
Gross profit margin was stable at 46.7%, despite significant negative
currency effects. The footwear gross profit margin decreased slightly from
42.7% to 42.3%, the apparel margin rose from 48.2% to 50.7% and the margin
for accessories fell from 52.4% to 50.0%.

Higher OPEX in line with expectations
Operating expenditures (OPEX) - significantly impacted by adverse currency
effects - saw an increase of 20.4% in reported terms, rising to EUR 357.4
million. During the quarter, we continued to invest heavily in marketing
activities to strengthen PUMA's positioning as the Fastest Sports Brand in
the World. The main cause for the increase was higher media spend and the
partnerships with global sports and pop culture icons Rihanna and Arsenal,
which both commenced in the second half of 2014. The opening of new retail
stores at selected locations and investing into the IT-infrastructure also
contributed to the increase of OPEX in the second quarter. In constant
currencies, the increase in OPEX amounts to 10.6% versus last year.

Operating income (EBIT)
The rise in operating expenses led to a decrease of operating income (EBIT)
from EUR 12.6 million to EUR 6.8 million.

Financial result
In the second quarter, the financial result declined from EUR -1.3 million
last year to EUR -5.7 million this year due to unfavorable impacts from
currency conversion.

Net earnings
Net earnings came in at EUR -3.3 million in the second quarter, resulting
in earnings per share of EUR -0.22.

First Half-Year 2015

In the first half-year 2015, consolidated sales increased by 5.9% currency
adjusted to EUR 1,594.1 million and were above our expectations. In
reported terms, the improvement is significantly higher with an increase of
15.7%.

All regions contribute to sales growth
In the EMEA region, sales rose by 1.8% currency adjusted to EUR 612.2
million. Germany, France, Spain and Turkey showed a positive development in
Europe, while the Middle East and Africa regions continued their solid
performance.

In the Americas, sales grew by 8.7% currency adjusted to EUR 617.4 million.
Argentina and Mexico stood out within the Latin American region, driving
double-digit growth, while North America was growing at a mid-single-digit
pace with acceleration in the second quarter.

Asia/Pacific also developed well, with an increase of 8.6% currency
adjusted to EUR 364.5 million. Performances in China and India were strong,
while sales in Japan were stagnant and Korea declined in a difficult
economic environment.

Footwear supported by IGNITE
In terms of product segments, Footwear was positively impacted by the
successful launch of the PUMA IGNITE product platform, leading to an
overall increase of 11.7% currency adjusted to EUR 736.9 million. The
Running, Training, and Football categories were the main growth drivers.
Apparel also grew with sales amounting to EUR 543.1 million (+2.7%), while
Accessories decreased slightly to EUR 314.1 million (-0.9%).

PUMA's retail sales grew
Supported by the increased number of stores operating (44 more stores
compared to one year ago; 4 less than at the end of 2014), retail sales
increased by 9.3% currency adjusted to EUR 322.2 million in the first half
of 2015. This represented 20.2% of total sales compared to 19.6% last year.

Gross profit margin impacted by adverse currency effects
PUMA has already taken and will continue to take countermeasures to offset
the negative currency impact on the gross profit margin. The effect of
these measures helped us to limit the impact on the gross profit margin to
90 basis points for the first half-year, as the second quarter gross profit
margin was stable. However, PUMA cannot currently fully neutralize the
impact of volatile currencies, as prices can only be adjusted very
carefully in order not to impact consumer demand. Furthermore, in some
countries, the costs of hedging outweigh its financial benefits, or in some
instances, currency hedging is not possible at all. In addition, we are
considering to source products more in local markets in order to reduce the
exposure to foreign currencies in these markets. PUMA's gross profit margin
for the first half-year went down by 90 basis points to 46.8%. The footwear
gross profit margin decreased from 43.4% to 42.6%, apparel margin was
largely stable at 50.7% and the margin for accessories decreased from 50.9%
to 49.8%.

Continued higher OPEX due to heavy marketing activities
PUMA's operating expenses (OPEX) increased by 19.1% to EUR 708.5 million,
as negative currency effects continued to have an impact and the company
continued its marketing activities. Opening up new stores and investing
into IT-infrastructure also contributed to the rise in OPEX. At the same
time, PUMAs management continued to put a strong emphasis on strict control
of other operating costs. In constant currencies, the increase in OPEX
amounts to 9.7% versus last year.

Operating result (EBIT)
Operating income was down by 37.7% to EUR 44.3 million in the first half
2015, impacted by the negative currency effects already described.

Financial result
The financial result was almost stable at EUR -4.8 million compared to EUR
-4.5 million in the first half year of 2014.

Net earnings / earnings per share
Half-year consolidated net earnings came in at EUR 21.5 million,
representing earnings per share of EUR 1.44 compared to EUR 2.66 in the
prior year.

Net Assets and Financial Position

Increase in inventory and trade receivables broadly aligned with sales
growth
To ensure product availability and support sales growth as well as a higher
demand from new stores, inventories increased by 20.6% to EUR 704.5
million. This represents a currency adjusted increase of 13.4%. Trade
receivables went up by 13.1% to EUR 523.8 million, broadly in line with
reported sales growth. Trade payables were at EUR 557.9 million, rising
27.6% compared to last year's figure. In total, working capital rose 7.3%
to EUR 640.0 million.

Cashflow / Capex
As a consequence of the higher working capital requirement, the free cash
flow before acquisitions was at EUR -167.8 million compared with EUR -69.7
million for the same period last year.

Cash and cash equivalents
PUMA's cash and cash equivalents went up from EUR 300.0 million to EUR
337.9 million, while borrowings increased due to the higher working capital
requirements as part of PUMA's short term financing activities.

Tretorn

PUMA sold trademark rights of Tretorn
Continuing our focus on our core categories under the PUMA and COBRA
brands, we have divested of our industrial property rights of the Tretorn
subgroup, which include trademark rights, patents and designs. In addition,
the related operating business was sold and the respective entities were
excluded from the scope of consolidation accordingly. Due to the very small
size of the Tretorn business with respect to sales, profit and net assets,
these transactions had no material impact on the results and financial
position of the PUMA group.

Brand and Product Update

Underlining our strong position in Teamsport, PUMA achieved a great
visibility at both the Copa América in Chile and the FIFA Women's World Cup
in Canada. At the Copa América, PUMA partnered host nation Chile crowned
their stellar performance throughout the tournament with their first
continental trophy. The PUMA team secured their triumph with a penalty
shootout over archrival Argentina and its PUMA star Sergio Agüero, who was
amongst the tournament's best goal scorers with three goals. Agüero's run
of success follows an outstanding English Premier League 2014/15 season,
finishing as the top scorer with 26 goals. In Germany, Bundesliga's top
scorer list was led by PUMA player Alexander Meier of Eintracht Frankfurt
with 19 goals. At the FIFA Women's World Cup, PUMA star Marta made the
headlines by becoming the all-time leading scorer of Women's World Cup
history, while Germany's Célia Å aÅ ić finished the tournament as the top
goal scorer with six goals. Together with the three participating PUMA
teams Cameroon, Ivory Coast and Switzerland, more than 50 PUMA players
contributed to a strong on-pitch presence for PUMA.

Both the Copa América and the FIFA Women's World Cup in Canada served as a
great stage for the introduction of PUMA's innovative football boot
evoSPEED SL. The newly revealed boot is PUMA's lightest match boot to date
thanks to a super light and almost translucent textile upper material.
Whilst maintaining the necessary stability, the low weight PUMA SPEEDFRAME
adds to the overall lightweight theme of the evoSPEED SL. Designed to give
footballers a new game advantage enhancing speed and agility, the evoSPEED
SL is worn on pitch by some of the world's best players including Sergio
Agüero, Marco Reus, Radamel Falcao, Marco Verratti, and Antoine Griezmann.
At the end of May, our top football club Arsenal FC became the most
successful club in the history of the English FA Cup with a record of 12
wins by outplaying Aston Villa to win 4:0 in the Final. Two weeks later, we
launched the much anticipated 2015/16 Arsenal home kit for the second year
of our partnership. The kit combines a modern approach to materials with a
traditional silhouette and was launched through a live show at the Emirates
Stadium by club legend and PUMA ambassador Thierry Henry.

In our Running and Training category, we built on the successful
introduction of our revolutionary running technology IGNITE and continued
to develop the IGNITE platform with the launch of IGNITE PWRCOOL. PWRCOOL
is PUMA's innovative cooling technology designed to keep the body at an
optimal temperature to preserve energy and is incorporated into a complete
collection of thermo-regulated apparel and Footwear designed with CoolCELL:
highly functional materials that draw sweat away from the skin while
anatomically placed air flow features offer superior temperature
regulation. PUMA's long history of working with Jamaican athletes such as
the Fastest Man in the World, Usain Bolt, and Olympic medalist Hansle
Parchment, provided the perfect conditions to test PWRCOOL as part of the
development process.

In early May, COBRA PUMA GOLF athlete Rickie Fowler powered his way to a
stunning victory at The Players Championship in Ponte Vedra Beach, Florida,
with the greatest finish in the 34-year history of the event. Fowler was
decked out in PUMA Golf apparel and equipped with his COBRA Golf clubs.
With this signature style and world class performance, Rickie Fowler
continues to reinforce COBRA PUMA GOLF's message of game enjoyment coupled
with excellence.

Strategy Update

The first half of this year has shown that PUMA is well under way in
improving its product engine. Our stronger sales performance, especially in
Footwear underlines the increased attractiveness of our products. With our
successful product initiatives in the Spring/Summer season we have
underlined PUMA's mission of becoming the Fastest Sports Brand in the
World.

One of the important initiatives was the launch of our new running
technology IGNITE in Q1. IGNITE has delivered very solid sell-in and
sell-through performance in both Wholesale and own Retail. In the second
quarter, we have further nurtured this product platform with the
introduction of IGNITE PWR COOL.
In Teamsport, we are claiming back territory with our two footwear
platforms evoSPEED and evoPOWER, which we continue to support with new
designs, materials and innovations such as the newly launched EvoSPEED SL,
which only weighs 103 grams. Both platforms have been prominently featured
in our marketing campaign this year and delivered high sell-through across
geographies.

PUMA and Kering Eyewear signed an eyewear partnership agreement for optical
frames and sunglasses to be launched in Spring/Summer 2016. These will be
divided into three main segments: Performance, Active and Sportstyle. In
line with PUMA's focus on sports performance, the range will also include
eyewear items specifically designed for Running and Golf.

We have continued to strengthen the PUMA brand with ongoing marketing
investments and enhanced marketing communication. Our campaign in the first
half of this year has focused on showing our athletes and products in
action.

In the second quarter, we have started featuring our newest brand
ambassador Rihanna prominently through an in-store marketing campaign
focusing on the season's female training styles. With this campaign we have
affirmed our strong commitment to women athlete consumers. Rihanna is an
ideal brand ambassador admired by women across the world, thanks to both
her personality and iconic style. While she is already generating positive
PR buzz for PUMA, Rihanna will be at the center of our ongoing marketing
campaign over the upcoming months. In a television commercial as well as
online and other offline media she will feature our IGNITE XT training shoe
and other commercial products. Rihanna is currently working closely with
our design teams. While the first Rihanna-inspired styles are already being
launched in the second half of 2015, her own collection will be in stores
in 2016.

The new in-store concept for PUMA's own retail was first revealed in our
full price store in Herzogenaurach earlier this year. Since then further
stores have been opened, including Hong Kong, Turkey and Mexico. In the new
PUMA stores we can better tell our product stories, reveal the technologies
behind them and strengthen PUMA's positioning as a sports brand. All new
and refurbished stores are showing above average performance and an
increased share of footwear sales.


Outlook for the Financial Year 2015

The positive sales development registered in the first half-year 2015 came
in above our expectations. Nonetheless, we still continue to expect an
increase in the medium single-digit range for full-year currency-adjusted
net sales. For the second half of 2015, we anticipate higher sales growth
in Q4 than in Q3.

However, as already expressed in the release of the first quarter results,
the adverse developments of foreign exchange rates since the beginning of
the year, particularly the strengthening of the US Dollar versus nearly all
other currencies, had a significant negative impact on PUMA's reported
gross profit margin. PUMA has already taken and will continue to take
countermeasures, but the impact will not fully offset the negative currency
impact on the gross profit margin. Therefore, we still expect a drop in the
gross profit margin for the full year in a range of 100 to 150 basis points
versus last year (2014: 46.6%).

In 2015, PUMA will continue to invest strongly in marketing to further
enhance and reinforce its new brand positioning. The investments in the
upgrade of PUMA's current IT-infrastructure and the extension of our own
retail store network will also continue. This will result in an increase in
OPEX that will be further impacted by negative currency effects. At the
same time, PUMA's management will continue to put a strong emphasis on
strict control of other operating costs.

Based on the business development in the first half-year 2015, we reiterate
our expectation that adverse currency effects will continue to impact our
gross profit margin, OPEX and EBIT. At the current exchange rate levels and
thanks to the countermeasures, that we have already implemented, we
reiterate our expectation for a full-year EBIT in a range between EUR 80
million and
EUR 100 million, with net earnings impacted accordingly.


Media Relations:

Kerstin Neuber - Corporate Communications - PUMA SE - [phone] -
[e-mail]

Investor Relations:

Johan-Philip Kuhlo - Global Strategy - PUMA SE - [phone] -
[e-mail]

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 Sports Brands, designing, developing,
selling and marketing Footwear, apparel and accessories. For over 65 years,
PUMA has established a history of making fast product designs for the
fastest athletes on the planet. PUMA offers performance and sport-inspired
lifestyle products in categories such as Football, Running, Training and
Fitness, Golf, and Motorsports. It engages in exciting collaborations with
renowned design brands to bring innovative and fast designs to the sports
world. The PUMA Group owns the brands PUMA, Cobra Golf, Dobotex and
Brandon. The company distributes its products in more than 120 countries,
employs more than 10,000 people worldwide, and is headquartered in
Herzogenaurach/Germany. For more information, please visit
http://www.puma.com



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Language: English
Company: PUMA SE
PUMA Way 1
91074 Herzogenaurach
Germany
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]
Internet: www.puma.com
ISIN: DE0006969603
WKN: 696960
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard), Munich;
Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Hanover, Stuttgart; Terminbörse EUREX


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380631 24.07.2015