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1
BULGARI GROUPFIRST HALF 2008 RESULTS
ROME, 1ST AUGUST 2008
2
-7.1%
-18.0%
12.4%
-3.7%
6.5%
4.0%
8.3%
DELTA
H108/07
10.8%117.4
24.1%
113.1
22.3%
EBIT BEFORE A&P
% on Sales
3.9%(55.3)
11.4%
(62.2)
12.3%
A&P
% on Sales
31.5%58.4
12.0%
54.2
10.7%
NET PROFIT
% on Sales
17.8%62.1
12.7%
50.9
10.1%
EBIT
% on Sales
8.8%310.9
63.8%
331.0
65.4%
CONTRIBUTION MARGIN
% on Sales
8.9%
14.8%
487.0506.4REVENUES
REVENUES – AT COMP. FX
DELTA
H1 07/06
H1
2007
H1
2008
EUR M.
FIRST HALF 2008 RESULTS
FINANCIAL HIGHLIGHTS
Please refer to note on page 14 for information on previous years’ restatements
3
8.3%
-
24.2%
4.2%
-
5.6%
-1.5%
7.7%
AT COMP.FX
4.0%
19.0%
18.3%
0.1%
-3.2%
1.9%
-4.9%
3.0%
% GROWTH
REPORTED
H1 2008/H1 2007
14.7OTHER
108.3PERFUME DIVISION
383.4JWA DIVISION
506.4TOTAL
3.6OTHER (incl. FR royalties)
41.4ACCESSORIES
125.8WATCHES
212.6JEWELRY
EUR M.
FIRST HALF
2008
PRODUCT CATEGORY
FIRST HALF 2008 RESULTS
REVENUE EVOLUTION BY PRODUCT LINE
ROADMAP: MEDIUM-TERM POSITIVE DRIVERS
ROADMAP: AREAS OF CONCERN
4
JEWELLERY HIGHLIGHTS
• PRICING POWER LEADS TO INCREASED MARGINON CORE BUSINESS CATEGORY
• LAUNCHES H1: MONOLOGO + NEW BB
• Q2 07 INCLUDED A SINGLE HIGH JEWELLERY SALE OFUSD 13.5 M.EXCLUDING THIS SALE FROM H1 07 REVENUES, H1 08GROWTH WOULD HAVE BEEN +12.7%
7.7%
212.6
H1
2008
H1
2007
42%
of total revenues inH1 2008
20.8%
206.5
GROWTH AT COMP.
EXCHANGE RATES
REVENUES – Eur M.
JEWELRY
5
-1.5%
125.8
H1
2008
H1
2007
25%
of total revenues inH1 2008
10.2%
132.4
GROWTH AT COMP.
EXCHANGE RATES
REVENUES – Eur M.
WATCHES
WATCHMAKING HIGHLIGHTS
REPOSITIONING OF THE BRAND– MORE MEDIUM AND HIGH-END WATCHES IN THE MIX– DISCONTINUATION OF ENTRY-PRICE COLLECTIONS
WATCH COMPONENTS SHORTAGES PERSIST
LAUNCHES H1: DIAGONO SHIPMENT STARTED AT THE VERY END OF H12008, WHEREAS ASSIOMA D.’S WAS COMPLETED IN H1 2007
6
ACCESSORIES
5.6%
41.4
H1
2008
H1
2007
8%
of total revenues inH1 2008
-8.2%
40.6
GROWTH AT COMP.
EXCHANGE RATES
REVENUES – Eur M.
ACCESSORIES HIGHLIGHTS
22 TWIN AND ACCESSORY-ONLY STORES AS OF JUNE 2008 SUCCESSFUL STORE CONCEPT AND IMPROVED PRODUCT OFFER DRIVE A
DRAMATICALLY IMPROVED PRODUCT AND PRICE MIX:
MIX EVOLUTION:– EYEWEAR 4%– LEATHER GOODS 84% ( OF WHICH > 30% BAGS)– TEXTILES 12%
BAGS TICKET EVOLUTION IN DOS (STAND-ALONE, TWINS)– BAGS ABOVE EUR 1,000 REPRESENT 65% OF BAG SALES– BAGS ABOVE EUR 1,500 REPRESENT 33% OF BAG SALES
• NEW FLORENCE FACTORY CONTRIBUTION STILL VERY LIMITED
7
PERFUME HIGHLIGHTS
• AQUA POUR HOMME MARINE LAUNCH
• Q1 2008
• EXCEPT ITALY: JUNE 2008
• JASMIN NOIR LAUNCH
• Q3 2008
• EXCEPT USA: AUGUST 2008
• OWNED SUBSIDIARY DIRECT DISTRIBUTION STRATEGY INITIATED A FEWYEARS AGO (10 COUNTRIES+TRAVEL RETAIL) CONTINUES TO SHOWIMPRESSIVE RETURN ON SALES
• 2007 W/WIDE SELECTIVE BRANDS RANKING: BVLGARI IS NOW N°9
24.2%
108.3
H1
2008
H1
2007
21%
of total revenues inH1 2008
21.7%
91.5
GROWTH AT COMP.
EXCHANGE RATES
REVENUES – Eur M.
PERFUME
8
8.3%
-
13.1%
4.6%
23.1%
-4.8%
-
-
ATCOMP.FX
4.0%
11.0%
8.1%
3.8%
12.8%
-16.2%
7.5%
-9.3%
% GROWTH
REPORTED
H1 2008/H1 2007
506.4TOTAL
32.9MIDDLE EAST/ OTHER
209.0
104.8
104.2
ASIA
Of which Japan
Of which rest of Asia
68.9AMERICAS
195.6
58.2
EUROPE
Of which Italy
EUR M.
FIRST HALF2008
GEOGRAPHICAL AREA
FIRST HALF 2008 RESULTS
REVENUE EVOLUTION BY GEOGRAPHICAL AREA
9
7.5%
195.6
H1
2008
H1
2007
39%
of total revenues inH1 2008
10.9%
181.9
GROWTH REPORTED
REVENUES – Eur M.
EUROPE
EUROPE HIGHLIGHTS
ITALY: H1 08 DOWN 9.3% (H1 07:+15.7%)
REST OF EUROPE: H1 08 UP 16.7% (H1 07: + 8.5%)
GERMANY, RUSSIA, FRANCE VERY BUOYANT
PARIS: THE NEW AVENUE GEORGE V STORE WILL OPEN IN OCTOBER
10
-4.8%
68.9
H1
2008
H1
2007
14%
of total revenues inH1 2008
26.7%
82.1
GROWTH AT COMP.
EXCHANGE RATES
REVENUES – Eur M.
AMERICAS
AMERICAS HIGHLIGHTS
IN 2007, TWO EXCEPTIONAL UNIQUE PIECES WERE SOLD AT THERENOVATED FIFTH AVENUE FLAGSHIP
– IN Q2 07: USD 13.5 M.
– IN Q3 07: USD 9.5 M.
IN H1 2008 ACCESSORIES SALES IN USA WERE UP BY 80%
NUMBER OF TWIN STORES IN USA: 4
11
4.6%
104.8
H1
2008
H1
2007
21%
of total revenues inH1 2008
-9.0%
101.0
GROWTH AT COMP.
EXCHANGE RATES
REVENUES – Eur M.
JAPAN
JAPAN HIGHLIGHTS
MAIN CITIES OUTPERFORM REST OF THE COUNTRY
TOKYO OUTPERFORMS OTHER MAIN CITIES (TRUE ALSO IN DEPT.STORES)
OWNED STORES OUTPERFORM DEPARTMENT STORES
GINZA STREET IS THE UNDISPUTED HEART OF LUXURY IN ASIA, NOT ONLY IN JAPAN
ONLY 7 MONTHS SINCE ITS OPENING, THE NEW GINZA TOWER FLAGSHIP SHOWS:
– GINZA TOWER TRAFFIC: +13% IN H1 08 vs [KOMATSU+MATSUYA] IN H1 07
– GINZA TOWER REVENUES: +180% IN H1 08 vs [KOMATSU+MATSUYA] IN H1 07
HIGH TICKET ITEMS ON THE RISE DUE TO GROWING POLARIZATION
BRIDAL BUSINESS: WEDDINGS NOT GROWING, BUT AVERAGE AGE RISE TRANSLATESINTO MORE BRANDED ENGAGEMENT RINGS vs UNBRANDED, AND HIGHER PRICES.
BRIDAL BUSINESS IN JAPAN FOR BVLGARI IN H1 08: +31%, AT GINZA TOWER +61%
12
23.1%
104.2
H1
2008
H1
2007
21%
of total revenues inH1 2008
55.0%
92.3
GROWTH AT COMP.
EXCHANGE RATES
REVENUES – Eur M.
REST OF ASIA
REST OF ASIA HIGHLIGHTS
GREATER CHINA NOW REPRESENT MORE THAN 11.4% OF REVENUES
MACAO: OPENING OF A SECOND LOCATION (THE VENETIAN) IN Q2 08
BETWEEN JAPAN AND CHINA THERE IS… KOREA! VERY SOUND PERFORMANCEDUE TO MORE RESILIENT REAL ESTATE AND STOCK MARKET vs AVERAGE ANDIN SPITE OF A STORE CLOSING FOR TECHNICAL REASONS
THE GROUP KEEPS ON INVESTING AGGRESSIVELY IN THE AREA
13
12.6%(248.8)
51.1%
(280.1)
55.3%
TOTAL OPERATING EXPENSES% on Sales
-18.0%62.1
12.7%
50.9
10.1%
EBIT% on Sales
962,1%-97.7%194.9%
0.3(4.1)0.1
3.0(0.1)0.4
TOTAL FINANCIAL GAIN (LOSSES)CURRENT AND DEFERRED TAXESMINORITY INTEREST LOSS (PROFIT)
54.2
10.7%
(22.0)
(93.4)
(77.2)
(25.4)
(62.2)
331.0
65.4%
506.4
H1 2008
-7.1%
5.1%
14.6%
8.1%
29.1%
12.4%
6.5%
4.0%
H1 2008/2007
DELTA
(20.9)
(81.5)
(71.4)
(19.7)
(55.3)
VARIABLE SELLING EXPENSES
PERSONNEL COSTS
OTHER GENERAL EXPENSES
AMORTIZATION AND DEPRECIATION
ADVERTISING AND PROMOTION
58.4
12.0%
NET PROFIT% on Sales
310.9
63.8%
CONTRIBUTION MARGIN
% on Sales
487.0REVENUES
H1 2007EUR M.
FIRST HALF 2008 RESULTSGROUP PROFIT & LOSS
Please refer to note on page 14 for information on previous years’ restatements
14
64,9%65,4%
63,9%
H1 2006 H1 2007 H1 2008
FIRST HALF 2008 RESULTSCONTRIBUTION MARGIN (% ON SALES)
EUR/USD: +15.1% (H1 08 AVE/ H1 07 AVE)
GOLD/USD: +38.4 % (H1 08 AVE/ H1 07 AVE)
EFFICENCIES IN MANUFACTURING ANDDISTRIBUTION
PRODUCT MIX
PRICE INCREASES
PERFUME DIRECT DISTRIBUTION
NEGATIVE IMPACT
ON CONTRIBUTION MARGIN IN %
POSITIVE IMPACT
ON CONTRIBUTION MARGIN IN %
Note: for H1 2008 and H1 2007 the Contribution Margin includes the economic impact of the gold hedging
transactions.
+ 160 BPS
15
55 62
H1 2007 H1 2008
FIRST HALF 2008 RESULTSADVERTISING AND PROMOTION
102
76 81
96
116 113120
2001 2002 2003 2004 2005 2006 2007
11.0%
ADVERTISING AND PROMOTION AS A % ON REVENUES
+12.4%
11.4% 12.3%
MILAN’S STAZIONE CENTRALE AQUA POUR HOMME MARINE ADVERTISING
16
656
-115
694
-155
760
-292
30.06.06 30.06.07 30.06.2008
NET EQUITY NET CASH
GEARING
18% 22%
FIRST HALF 2008 RESULTSBALANCE SHEET HIGHLIGHTS
38%
17
108.0
46.9
154.8
(107.0)
(86.9)
(20.1)
(0.9)
(20.7)
0.8
18.9
(59.1)
78.0
19.7
58.4
JUNE
2007
151.3
140.9
292.2
(73.0)
(96.1)
23.1
(78.3)
(38.6)
(9.2)
(30.5)
(110.4)
79.9
25.7
54.2
JUNE
2008
65.6
49.9
115.5
(74.7)
(74.5)
(0.1)
9.1
(29.9)
5.8
33.2
(29.0)
62.2
17.8
44.4
JUNE2006
NET DEBT AT BEGINNING OF PERIODNET DEBT AT THE END OF PERIOD
NET INDEBTEDNESS Incr./(Decr.)
EQUITY Incr./(Decr.)
DIVIDENDSOTHER CHANGES IN EQUITY
TOTAL CASH FLOW
DEPRECIATION & AMORTIZATION
CASH FLOW from P&L
CHANGE in WORKING CAPITAL
CASH FLOW from OPERATING ACTIVITY
NEW INVESTMENTS (Incr) / DecrOTHER L/T ASSETS & L. (Incr.)/Decr
NET RESULT
EUR M.
FIRST HALF 2008 RESULTSCASH FLOW DETAILS
18
611.4
5.6
(160.1)
610.1
155.8
H1 2007
731.5
9.0
(184.1)
725.5
181.1
H1 2008
544.7
4.3
(152.2)
550.1
142.5
H1 2006
OTHER RECEIVABLESAND PAYABLES
TOT NWC
PAYABLES
INVENTORY
RECEIVABLES
EUR. M
10
FIRST HALF 2008 RESULTSNET WORKING CAPITAL
19
31.5
7.8
23.7
30.06.07
25.6
6.0
19.6
30.06.06
31.5
7.2
24.3
30.06.08
INTANGIBLEExcluding Goodwill
Including KeyMoney
TOTAL
TANGIBLE
EUR M.
FIRST HALF 2008 RESULTSCAPEX
20
245
54
42
149
31.12.2007
249
57
40
152
31.03.2008
252
55
42
155
30.06.2008
TRAVEL RETAIL
AND WHOLESALE STORES
DOS BOUTIQUES
FRANCHISEES
TOTAL STORES
RETAIL NETWORK EVOLUTION
21
QUESTIONS & ANSWERS
CORPORATE WEB SITE
http://www.bulgari.com
For more information about the the Bulgari products please join the dedicatedmailing list.
BULGARI INVESTOR RELATIONS WEBSITEhttp://ir.bulgari.com
In order to receive updates via e-mail on the quarterly results releases, pleaseadd your name and e-mail address to the Alerting Service.
22
DisclaimerDisclaimer
This document is for institutional investors only and is not available to private customers. This document isbeing supplied to a limited number of recipients and it may not be distributed, published or reproduced in wholeor in part or disclosed by recipients to any other person.Under no circumstances shall this document constitute an offer to sell, an invitation to acquire or the solicitationof an offer to buy securities in any jurisdiction.
Each investor contemplating purchasing securities issued by Bulgari S.p.A or any of its subsidiaries should makeits own independent investigation of the financial condition and affairs, and its own appraisal of thecreditworthiness of Bulgari S.p.A or any of its subsidiaries and should carefully consider the high risks involvedin purchasing these securities.
This document contains certain forward looking statements and key financial goals which reflect management’scurrent views, estimates, and objectives. The forward looking statements and key financial goals involve certainrisks and uncertainties that could cause actual results to differ materially from those contained in the forwardlooking statements and key financial goals.
Potential risks and uncertainties include, amongst other things, internal, industry and external factors, such asgeneral economic conditions
23
RESTATEMENT 2007
51.8
56.5
222.3
346.5
OLD
Q4 07
EUR M.
51.840.840.834.434.423.923.9NET PROFIT
57.547.246.336.235.425.926.3EBIT
223.8166.8166.5165.4165.2145.4146.3CONTRIBUTIONMARGIN
346.5257.4257.9262.2262.6224.9225.1REVENUES
RESTATEDRESTATEDOLDRESTATEDOLDRESTATEDOLD
Q3 07
EUR M.
Q2 07
EUR M.
Q1 07
EUR M.
THE FOLLOWING ELEMENTS WERE RESTATED:
GOLD HEDGING FROM FINANCIAL COST/INCOME TO CONTRIBUTION MARGIN;
COMMISSIONS TO PERFUME DISTRIBUTORS NOW DEDUCTED FROM SALES, PREVIOUSLY INVARIABLE EXPENSES;
WITHHOLDING TAXES FORM GENERAL EXPENSES TO CURRENT TAXES