Outlook report

Global economy

In their winter forecast dated 13 December 2023, experts at the Kiel Institute for the World Economy (Kiel Institut für Weltwirtschaft – IfW Kiel) expect global gross domestic product (GDP) to increase by 2.9% in 2024, following growth of 3.1% in 2023. Meanwhile, inflation is rapidly on the decline, and central banks are expected to start cutting interest rates in the first half-year of 2024. However, there are currently no prospects of an economic upturn. A high level of uncertainty about the economic conditions is slowing things down in the advanced economies, and fiscal incentives are tapering out. In China, economic momentum remains subdued, in view of structural issues. According to experts at IfW Kiel, the risks to the economic forecast for 2024 are primarily financial and political in nature. Among other things, there is uncertainty about developments in China, where orderly consolidation in the property sector is still not guaranteed. In addition, geopolitical risks have stemmed from the increasingly prominent differences between China and the United States. Irrespective of this, the outcome of the upcoming presidential elections in the United States in November harbours considerable economic and political uncertainty.

Sporting goods industry

Unless the geopolitical environment has any significant negative impact on the overall economic environment, we expect growth in the sporting goods industry in 2024. We expect demand for sporting goods to increase in 2024 as the trend towards increased sports activities and healthier lifestyles continues and becomes even more significant following the COVID-19 pandemic. This applies equally to the increasing popularity of athletic footwear and leisure/athletic apparel as an integral part of everyday fashion ("athleisure"). We also assume that major sporting events in the coming year, such as the Summer Olympics in Paris and the UEFA Euro 2024 men's football championship in Germany, will help to support growth in the sporting goods industry.

Outlook 2024

We expect geopolitical and macroeconomic headwinds as well as currency volatility to persist in 2024. These conditions already led to muted consumer sentiment and volatile demand in 2023 and we expect these effects to continue in 2024, particularly in the first half of the year.

In this continued challenging environment, we are fully focused on executing our strategic priorities: elevating the brand, increasing product excellence and improving our distribution quality - especially in the key markets US and China. For us, 2024 is not only the year of sport with major events such as the Olympic Games, Euro 2024 and the Copa America providing the perfect platform to showcase our strong product innovation and credibility as a performance brand. It is also the year in which PUMA will invest in a new global brand campaign to improve its positioning as the fastest sports brand in the world.

Supported by the continued brand momentum and despite ongoing global geopolitical and macroeconomic challenges, PUMA expects to achieve mid-single-digit currency-adjusted sales growth and an operating result (EBIT) in the range of € 620 million to € 700 million for the financial year 2024 (2023: € 621.6 million). The outlook assumes that the future devaluation of the Argentine peso will be fully compensated by corresponding price increases in Argentina.

We expect net income (2023: € 304.9 million) to change in 2024 in line with the operating result.

As in previous years, PUMA will continue to focus on managing short-term challenges without compromising the brand's medium- and long-term momentum. Our sales growth and market share gains will take priority over short-term profitability. The exciting product range for 2024 and the very good feedback from retail partners as well as consumers give us confidence for the medium- and long-term success and continued growth of PUMA.

Investments

Investments in fixed assets of around € 300 million are planned for 2024. The majority of these investments will be in infrastructure in order to create the operating conditions required for the planned long-term growth. The investments mainly concern own distribution and logistics centers, investments in the expansion and modernisation of the Group's own retail stores and investments in IT infrastructure.

Foundation for Long-Term Growth

The Management Board and the Supervisory Board have set long-term strategic priorities. Action plans are being implemented in a targeted and value-oriented manner. We believe that the corporate strategy "Forever Faster" provides the basis for mid- and long-term positive development.

Herzogenaurach, 7 February 2024

The Management Board

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