SUPPLEMENTAL REPORT
There were no events after the balance sheet date which may have a material effect on the net assets, financial position and results of operations of PUMA Group.
With regard to the future development of PUMA’s shareholder structure, we would like to make reference to the ad-hoc communication from PUMA SE on January 11, 2018.
OUTLOOK
GLOBAL ECONOMY
Due to the stimulating monetary and financial policy, experts from the Kieler Institut für Wirtschaft (Kiel Institute for the World Economy) expect a further strong increase in global GDP for 2018 in its winter forecast of December 13, 2017. After a growth in global GDP of 3.8% in 2017, an increase of 3.9% is forecasted for 2018. This is a slight increase of growth prospects by 0.2 percentage points compared to the summer forecast in 2017 (GDP growth in 2018 + 3.7%). Improvement compared to the summer forecast, may, in advanced economies, result on the one hand from persistently good investment conditions for companies, that contribute to increasing profits due to more favorable financial conditions and, on the other hand, should have a positive influence on the good mood among consumers and the increasing available income in private households.
With regard to emerging countries, higher raw material prices and a robust foreign economy justify the slight increase in growth prospects.
Risks for the forecast appear in particular to exist in the financial environment in connection with the persistent normalization of monetary policy. In contrast, the uncertainties originating from the political environment appear overall to have diminished somewhat compared to the previous year’s forecast.
SPORTING GOODS INDUSTRY
If there are no significant negative effects on the part of macroeconomic development, we continue to expect stable growth in the sporting goods industry in 2018. It must be assumed that the interest in sporting activity and health awareness will continue to increase, thereby strengthening the demand for sporting articles. Higher wages and increasing domestic consumption in emerging countries should continue to stimulate the global consumption of sporting articles in 2018. Furthermore, the football World Cup in Russia in 2018 should contribute to supporting growth in the sporting goods industry.
OUTLOOK 2018
Based on the positive business development in 2017 with strong sales growth and a significant improvement in profitability, the management is confident that 2018 will be another positive year for the Company and that PUMA is well positioned to carry forward the brand’s momentum.
For the full year 2018, we expect that currency-adjusted net sales will increase by approximately 10%. The gross profit margin is forecasted to improve slightly (2017: 47.3%). Operating expenses (OPEX) are expected to increase at a mid to high single-digit rate, as PUMA will continue to invest in marketing, retail and IT.
At the current exchange rate levels, PUMA’s management expects that the operating result (EBIT) in 2018 will improve significantly due to higher sales and a slightly improved gross profit margin. The EBIT is therefore expected to come in between € 305 million and € 325 million (2017: € 244.6 million). Net earnings will also continue to improve significantly in 2018.
INVESTMENTS
Investments totaling around € 125 million are planned for 2018. The significant part of investments concern investments in infrastructure in order to create the operating requirements for planned long-term growth. Likewise, further investments are made in the new building and the expansion and modernization of the Company’s own retail stores.
ENDATION FOR LONG-TERM GROWTH
The Managing Directors and the Administrative Board have established long-term strategic priorities. Action plans are being implemented in a targeted, value-oriented manner. PUMA’s management believes that the Forever Faster corporate strategy will lay the foundations for positive mid-term and long-term development.