Outlook report

Global economy

According to the winter forecast published by the Kiel Institute for the World Economy (ifw Kiel) on 12 December 2024, the global economy is facing increased economic policy uncertainty in a phase of already moderate momentum. The announcements of the new US administration are decisive in this regard. However, it is unclear what measures will actually be taken. Experts at the ifw Kiel expect global gross domestic product (GDP) to increase by 3.1% in 2025, following growth of 3.2% in 2024. The expected decline in inflation towards the 2% target is likely to be slow. In the opinion of the experts at the ifw Kiel, the main risks to the economic forecast for 2025 are that monetary policy will remain restrictive for longer than expected. Furthermore, there are still major risks to the global economy due to a possible escalation of geopolitical conflicts. Trade conflicts could also escalate further, although they could also be less severe than expected.

In addition to the economic forecast by the ifw Kiel, we would like to refer in the following to the International Monetary Fund (IMF) outlook published in January 2025. IMF experts expect global gross domestic product (GDP) to increase by 3.3% in 2025, with global growth expected to remain stable, though not particularly strong. This means that the growth outlook is below the historical average of 3.7% from 2000 to 2019. According to IMF experts, global inflation is still continuing its downward trend, but there are signs that progress is slowing in some countries and that higher inflation is persisting in a small number of cases. In those places where inflation is more persistent, central banks are more cautious in the easing cycle, keeping a close eye on economic and labour market indicators and exchange rate developments. Some central banks are raising interest rates, marking a point of divergence in monetary policy.

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 2025. Based on the Euromonitor report, we expect currency-adjusted growth in the sporting goods industry of around 2.9% in 2025. We expect demand for sporting goods to increase in 2025 as the trend towards increased sports activities and healthier lifestyles continues and becomes even more significant. 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 2025, such as the UEFA Euro 2024 women's football championship in Switzerland and the World Athletics Championships in Japan, will help to support growth in the sporting goods industry.

OUTLOOK 2025

In 2024, PUMA achieved sales growth across all regions and product divisions and improved its gross profit margin while the operating result (EBIT) remained stable. PUMA focused on its strategic priorities of brand elevation to improve its full price realisation in the future and on building the foundation for sustainable growth by strengthening its performance business and building consumer relevance in the Sportstyle Prime market.

In 2025, PUMA anticipates that geopolitical tensions and macroeconomic challenges will continue, especially trade disputes and currency volatility, which is expected to weigh on consumer sentiment and demand in key markets. Against this backdrop, PUMA expects currency adjusted sales to grow in the low- to mid-single-digit percentage range. But Latin America segment will grow faster than the general forecast in terms of currency-adjusted sales. While the environment remains volatile and challenging, the company will continue to focus on its controllables, executing its brand elevation strategy and taking decisive actions to address its cost basis with its nextlevel programme.

The nextlevel cost efficiency programme is expected to incur one-time costs of up to € 75 million in 2025, which are related to the closure of unprofitable owned & operated retail stores, restructuring expenses and other one-time non-operating costs. In return, the company expects to generate additional EBIT of up to € 100 million in 2025. The net contribution from the nextlevel cost efficiency programme to EBIT in 2025 is projected to be up to € 25 million.

In order to provide a reliable outlook for the underlying performance of the business, the company provides an adjusted EBIT outlook for 2025, excluding one-time costs. Considering the one-time costs and net contribution from the nextlevel programme, continued investments in marketing, retail stores and infrastructure, PUMA expects an adjusted EBIT in the range of € 520 million to € 600 million for the financial year 2025 (2024: € 622.0 million).

PUMA plans to continue investing in its retail store network and e-commerce business, along with warehouse and digital infrastructure, to enable its long-term growth objectives and therefore anticipates capital expenditures (CAPEX) of around € 300 million in 2025 (2024: € 263.0 million).

* Excluding one-time costs such as restructuring expenses and other one-time non-operating costs

PUMA is committed to addressing short-term challenges while continuing to prioritise investments into the brand and infrastructure as foundation for mid to long term success.

FOUNDATION FOR LONG-TERM GROWTH

The Management Board and Supervisory Board have set the long-term strategic priorities. The implementation of the action plans is being carried out in a targeted and value-oriented manner. PUMA's brand-strengthening strategy is complemented by the ‘nextlevel’ efficiency programme, which will create the basis for positive medium and long-term development.

Herzogenaurach, 11 March 2025

The Management Board

Freundt Neubrand Valdes

This is a translation of the German version. In case of doubt, the German version shall apply.