DISCLAIMER - Kering€¦ · Résultat opérationnel courant en M€ et marge en % 12.02.2019 ENDETTEMENT FINANCIER NET CASH FLOW LIBRE OPÉRATIONNEL +29,4% +34,0% 2 206 2 955 2017

DISCLAIMER

This presentation does not constitute an offer of securities for sale in the United States of America or any other jurisdiction.

Certain information contained in this document may include projections and forecasts. They express objectives based on current assessmentsand estimates of the Group’s executive management which are subject to numerous factors, risks and uncertainties. Consequently, reportedfigures and assessments may differ significantly from projected figures. The following factors among others set out in the ReferenceDocument (Document de Référence) filed with the French Financial Markets Authority (Autorité des Marchés Financiers - AMF) on March 28,2018, which is available on Kering’s website at www.kering.com, may cause actual figures to differ materially from projected figures: anyunfavorable development affecting consumer spending in the activities of the Group in France and abroad, notably for products and servicessold by our Luxury brands, the events, crises, fears, and resulting costs of complying with environmental, health and safety regulations andall other regulations with which Group companies are required to comply; the competitive situation on each of our markets; exchange rate andother risks related to international activities; risks arising from current or future litigation. Kering gives no commitment to updating and/orrevising and/or commenting any projections and forecasts, or their impact on the results and perspectives of the Group, which may becontained in this presentation.

The information contained in this document has been selected by the Group’s executive management to present Kering’s Full year 2018results. This document has not been independently verified. Kering makes no representation or undertaking as to the accuracy orcompleteness of such information. None of the Kering or any of its affiliates representatives shall bear any liability (in negligence orotherwise) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.

IN NO WAY DOES KERING ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THEINFORMATION PROVIDED IN THIS PRESENTATION. INFORMATION IN THIS PRESENTATION, INCLUDING FORECAST FINANCIALINFORMATION, SHOULD NOT BE CONSIDERED AS ADVICE OR RECOMMENDATION TO INVESTORS OR POTENTIAL INVESTORS INRELATION TO HOLDING, PURCHASING OR SELLING SECURITIES OR OTHER FINANCIAL PRODUCTS OR INSTRUMENTS AND DOESNOT TAKE INTO ACCOUNT YOUR PARTICULAR INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR NEEDS. BEFORE ACTING ONANY INFORMATION YOU SHOULD CONSIDER THE APPROPRIATENESS OF THE INFORMATION HAVING REGARD TO THESE MATTERS,ANY RELEVANT OFFER DOCUMENT AND IN PARTICULAR, YOU SHOULD SEEK INDEPENDENT FINANCIAL ADVICE. ALL SECURITIESAND FINANCIAL PRODUCT OR INSTRUMENT TRANSACTIONS INVOLVE RISKS, WHICH INCLUDE (AMONG OTHERS) THE RISK OFADVERSE OR UNANTICIPATED MARKET, FINANCIAL OR POLITICAL DEVELOPMENTS AND, IN INTERNATIONAL TRANSACTIONS,CURRENCY RISK. READERS ARE ADVISED TO REVIEW THE COMPANY'S REFERENCE DOCUMENT AND THE COMPANY'S APPLICABLEAMF FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISION.

12.02.2019 2

INTRODUCTION

FRANÇOIS-HENRI PINAULTCHAIRMAN & CEO

POWERFUL CULTURE AT THE ROOT OF OUR SUCCESS

VISION, STRATEGY, EXECUTION,FINANCIAL DISCIPLINE

HEALTHY, BALANCED AND PROFITABLE GROWTH

A FAVORABLE…BUT COMPLEX ENVIRONMENT

VALUE CREATION AND SHAREHOLDER RETURN

INCREASE IN REVENUE +€2.8BN

INCREASE IN EBIT +€1.3BN

POWERFUL CULTURE AT THE ROOT OF OUR SUCCESS

VISION, STRATEGY, EXECUTION,FINANCIAL DISCIPLINE

HEALTHY, BALANCED AND PROFITABLE GROWTH

12.02.2019

2018, AN EXCELLENT YEAR FOR KERING

A FAVORABLE…BUT COMPLEX ENVIRONMENT

VALUE CREATION AND SHAREHOLDER RETURN

INCREASE IN REVENUE +€2.8BN

INCREASE IN EBIT +€1.3BN

4

ANALYSIS OF RESULTS

JEAN-MARC DUPLAIX GROUP CHIEF FINANCIAL OFFICER

ANALYSIS OF RESULTS

JEAN-MARC DUPLAIX GROUP CHIEF FINANCIAL OFFICER

Western Europe33% (+24%)

North America20% (+38%)

Asia Pacific 32% (+34%)

RoW7% (+23%)

Japan8% (+24%)

2,691

3,944

2017 restated* 2018

10,81613,665

2017 restated* 2018

OUTSTANDING OPERATING PERFORMANCES

% comparable growth**

€3,944mup 47%from 2017 restated

FCF AND NET DEBT (€m)

FCF of €2,955mNet debt down Debt-to-EBITDA ratio of 0.4x

• Group CAPEX: €828m, 6.1% of revenue• Operating FCF close to €3bn• Net debt halved at €1,711m

€13,665m+26.3% reported+29.4% comparable

GROUP REVENUE (€m)

As a % of revenue and (% comparable growth)

24.9%

28.9%

Group recurring operating income in €m and margin in %

12.02.2019

NET DEBTFCF FROM OPERATIONS

+29.4%+34.0%

2,206

2,955

2017 restated* 2018

• Exceptional increase in EBIT and margin

• EBIT doubled over two years

• Virtuous operating leverage

6

* PUMA, Volcom, Stella McCartney and Christopher Kane have been reclassified under discontinued operations, in accordance with IFRS 5** At constant scope and exchange rates

+400bp

x1.3

2017 2017 restated* 2018

0.9x 1.1x 0.4x

- €1,705m

GROUP RECURRING OPERATING INCOME (€m)

2 691

3 944

2017 retraité* 2018

10 81613 665


PERFORMANCES OPÉRATIONNELLES REMARQUABLES

% croissance comparable**

3 944 M€en croissance de 47%vs. 2017 retraité

GÉNÉRATION DE FCF ET DETTE NETTE (en M€)

Un FCF de 2 955 M€Une dette nette en baisse,un ratio de 0,4x EBITDA

• CAPEX groupe : 828 M€ soit 6,1% du CA• Le FCF opérationnel avoisine 3 Mds€• À 1 711 M€, la dette nette est divisée par

deux

13 665 M€+26,3% en publié+29,4% en comparable

CHIFFRE D’AFFAIRES GROUPE (en M€)Europe de l’Ouest

33% (+24%)

Amérique du Nord20% (+38%)

Asie Pacifique32% (+34%)

Autres pays7% (+23%)

Japon8% (+24%)

% du CA et (% croissance comparable)

24,9%

28,9%

Résultat opérationnel courant en M€ et marge en %

12.02.2019

ENDETTEMENTFINANCIER NET

CASH FLOW LIBRE OPÉRATIONNEL

+29,4%+34,0%

2 206

2 955


• Progression exceptionnelle de l’EBITet de la profitabilité

• Doublement du résultat opérationnel courant en deux ans

• Effet vertueux du levier opérationnel

6

* Puma, Volcom, Stella McCartney et Christopher Kane ont été reclassés en activités abandonnées, conformément à la norme IFRS 5** À taux de change et périmètre comparables

+400pb

x1,3

2017 2017 retraité* 2018

0,9x 1,1x 0,4x

-1 705 M€

RÉSULTAT OPÉRATIONNEL COURANT (en M€)

2 691

3 944


10 81613 665








deux



33% (+24%)




Japon8% (+24%)


24,9%

28,9%


12.02.2019



+29,4%+34,0%

2 206

2 955





6


+400pb

x1,3

2017 2017 retraité* 2018

0,9x 1,1x 0,4x

-1 705 M€


2 691

3 944

2017 retraité*2018

10 81613 665

2017 retraité*2018

PE

RFO

RM

AN

CE

S O

PÉ

RATIO

NN

ELLE

S R

EM

AR

QU

AB

LES

% croissance com

parable**

3 944M

€en croissance de 47%vs. 2017 retraité

GÉ

NÉ

RAT

ION

DE

FCF E

T DE

TTE

NE

TTE

(en M€)

Un FC

F de 2 955 M€

Une dette nette en baisse,

un ratio de 0,4x EBITD

A

•C

AP

EX groupe : 828 M

€ soit 6,1% du C

A•

Le FCF opérationnel avoisine 3 M

ds€•

À 1 711 M

€, ladette nette est divisée par

deux

13 665M

€+26,3%

en publié+29,4%

en comparable

CH

IFFRE

D’A

FFAIR

ES

GR

OU

PE

(en M€)

Europe de l’Ouest

33% (+24%

)

Amérique

du Nord20%

(+38%)

AsiePacifique

32% (+34%

)

Autrespays

7% (+23%

)

Japon8%

(+24%)

% du C

A et (% croissance com

parable)

24,9%

28,9%

Résultat opérationnel courant en M

€ et marge en %

12.02.2019

EN

DE

TTE

ME

NT

FIN

AN

CIE

R N

ET

CA

SH

FLO

W L

IBR

E

OP

ÉR

ATIO

NN

EL

+29,4%+34,0%

2 206

2 955

2017 retraité*2018

•Progression exceptionnelle de l’E

BIT

et de la profitabilité

•D

oublement du résultat opérationnel courant

en deux ans

•Effet vertueux du levier opérationnel

6

* Puma, Volcom

, Stella McC

artney et Christopher Kane ont été reclassés en activités abandonnées, conform

ément à la norm

e IFRS 5

** À taux de change et périmètre com

parables

+400pb

x1,3

20172017 retraité*

2018

0,9x1,1x

0,4x

-1 705 M€

RÉ

SU

LTAT O

PÉ

RAT

ION

NE

L CO

UR

AN

T (en M€)

2 691

3 944

2017 retraité*2018

10 81613 665

2017 retraité*2018

PE

RFO

RM

AN

CE

S O

PÉ

RATIO

NN

ELLE

S R

EM

AR

QU

AB

LES

% croissance com

parable**

3 944M

€en croissance de 47%vs. 2017 retraité

GÉ

NÉ

RAT

ION

DE

FCF E

T DE

TTE

NE

TTE

(en M€)

Un FC

F de 2 955 M€

Une dette nette en baisse,

un ratio de 0,4x EBITD

A

•C

AP

EX groupe : 828 M

€ soit 6,1% du C

A•

Le FCF opérationnel avoisine 3 M

ds€•

À 1 711 M

€, ladette nette est divisée par

deux

13 665M

€+26,3%

en publié+29,4%

en comparable

CH

IFFRE

D’A

FFAIR

ES

GR

OU

PE

(en M€)

Europe de l’Ouest

33% (+24%

)

Amérique

du Nord20%

(+38%)

AsiePacifique

32% (+34%

)

Autrespays

7% (+23%

)

Japon8%

(+24%)

% du C

A et (% croissance com

parable)

24,9%

28,9%

Résultat opérationnel courant en M

€ et marge en %

12.02.2019

EN

DE

TTE

ME

NT

FIN

AN

CIE

R N

ET

CA

SH

FLO

W L

IBR

E

OP

ÉR

ATIO

NN

EL

+29,4%+34,0%

2 206

2 955

2017 retraité*2018

•Progression exceptionnelle de l’E

BIT

et de la profitabilité

•D

oublement du résultat opérationnel courant

en deux ans

•Effet vertueux du levier opérationnel

6

* Puma, Volcom

, Stella McC

artney et Christopher Kane ont été reclassés en activités abandonnées, conform

ément à la norm

e IFRS 5

** À taux de change et périmètre com

parables

+400pb

x1,3

20172017 retraité*

2018

0,9x1,1x

0,4x

-1 705 M€

RÉ

SU

LTAT O

PÉ

RAT

ION

NE

L CO

UR

AN

T (en M€)

2 691

3 944


10 81613 665








deux



33% (+24%)




Japon8% (+24%)


24,9%

28,9%


12.02.2019



+29,4%+34,0%

2 206

2 955





6


+400pb

x1,3

2017 2017 retraité* 2018

0,9x 1,1x 0,4x

-1 705 M€


2 691

3 944


10 81613 665








deux



33% (+24%)




Japon8% (+24%)


24,9%

28,9%


12.02.2019



+29,4%+34,0%

2 206

2 955





6


+400pb

x1,3

2017 2017 retraité* 2018

0,9x 1,1x 0,4x

-1 705 M€


2 691

3 944


10 81613 665








deux



33% (+24%)




Japon8% (+24%)


24,9%

28,9%


12.02.2019



+29,4%+34,0%

2 206

2 955





6


+400pb

x1,3

2017 2017 retraité* 2018

0,9x 1,1x 0,4x

-1 705 M€


2 691

3 944


10 81613 665








deux



33% (+24%)




Japon8% (+24%)


24,9%

28,9%


12.02.2019



+29,4%+34,0%

2 206

2 955





6


+400pb

x1,3

2017 2017 retraité* 2018

0,9x 1,1x 0,4x

-1 705 M€


2 691

3 944


10 81613 665








deux



33% (+24%)




Japon8% (+24%)


24,9%

28,9%


12.02.2019



+29,4%+34,0%

2 206

2 955





6


+400pb

x1,3

2017 2017 retraité* 2018

0,9x 1,1x 0,4x

-1 705 M€


ANOTHER YEAR OF SIGNIFICANT PROFITABLE GROWTH

Revenue: €13,247m +26.0% reported+29.1% comparable

• Eight consecutive quarters of 20%+ comparable growth

• Continuing clear sector outperformance

12.02.2019

• Sustained growth throughoutthe year…

• …on top of high comps

In €m

Revenue Recurringoperating income

Recurring operating income reported change

(%)

Recurringoperating income

margin (%)

Luxury 13,247 4,191 +44.8% 31.6%

Corporate & other 418 (247) -20.9% n.a

Kering 13,665 3,944 +46.6% 28.9%

LUXURY

REVENUE AND RECURRING OPERATING INCOME

GROUP REVENUE

Luxury industry % organic growth

+32%+26%

+33% +31%+37%

+31%+27%

+23%

Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18

7

% comparable growth

% comparable growth

+4.0% +6.9% +10.5% +10.4%+37.1% +29.7% +35.8% +34.0%

+36.6%+31.5%

+27.5% +24.2%

Q1 Q2 Q3 Q42016 non retraité 2017 retraité 2018non-restated restated

RECORD REVENUE AND PROFITABILITY2018 REVENUE: +26.0% REPORTED, +29.1% COMPARABLE

LUXURY ACTIVITIES

In €m2018

Reported change

Revenue 13,247 +26.0%

Recurring operating incomeRecurring operating income margin

4,19131.6%

+44.8%+4.1pt

Gross CAPEXAs % of revenue

6104.6%

+29.6%+0.1pt

12.02.2019

Royalties and others

Retail2017 restated FX

+31%

Wholesale 2018

10,513

+24% +10%

-2%

13,247

8

2018: EXCEPTIONAL GROWTH• Fueled by retail (+31%) and across all regions• E-commerce up 71%• FX impact negative in H1 (-7pt), neutral in H2

Q4: +23% ON TOP OF HIGH COMPS• Retail +25%, double-digit growth in all regions

RECURRING OPERATING INCOME UP 45%• Strong operating leverage at Gucci, Saint Laurent

and Balenciaga• Bottega Veneta repositioning underway• Investments to bolster our growth drivers

BEST-IN-CLASS OPERATING INCOME MARGIN: 31.6%• Significant increase: +4.1pt

SELECTIVE CAPEX UNDER CONTROL

In €mX%: comparable change

12.02.2019 9

GUCCI

EXCELLENT PERFORMANCE UNDERSCORING BRAND MOMENTUM2018 REVENUE: +33.4% REPORTED, +36.9% COMPARABLE

In €m2018

Reported change

Revenue 8,285 +33.4%


3,27539.5%

+54.2%+5.3pt


3133.8%

+25.8%-0.2pt

+19%Q4 18

comparable growth

+29% +26% +42% +21% TOTAL+28%+6% +37%

+45% 8,285

6,211 +29% +44% +36%+30% +31%

Retail (85% of sales): +38%

2018: REVENUE TOPS €8BN• Very strong growth on top of extremely high comps since

H2 2016• Well-balanced performance across product categories and

clientele segments • Retail up 38% under particularly healthy conditions (stable

network, full-price sales, higher traffic and productivity); e-commerce up 70%

Q4: REVENUE UP 28%• Retail up 29%, wholesale up 21%

RECURRING OPERATING INCOME UP 54% PASSES THE €3BN MARK• Positive impact from higher gross margin (distribution mix,

production organization, higher sell-through)• Highly favorable operating leverage• Ongoing investments to sustain momentum (stores,

communications, CRM, digital)

RECORD OPERATING MARGIN AT 39.5%

TARGETED CAPEX• Further deployment of new store concept


North America

Asia Pacific

2017 Western Europe

Japan RoW Wholesale Royalties and others

2018

+14%

12.02.2019 10

SAINT LAURENT

EXECUTION OF STRATEGY AND GROWTH TRAJECTORY2018 REVENUE: +16.1% REPORTED, +18.7% COMPARABLE

In €m2018

Reported change

Revenue 1,744 +16.1%


45926.3%

+21.9%+1.2pt


895.1%

+21.9%+0.2pt

+20%Q4 18

comparable growth

+22% +18% +22% +14% TOTAL+19%+30% +14%

+20%+11%

+21%

1,502+27%

1,744+21% +19%

+10%Retail (68% of sales): +19%

2018: SUSTAINED GROWTH ONGOING• On very high comps after seven consecutive years of 20%+

growth• Retail up 19% on like-for-like and openings• Very favorable reception of Ready-to-Wear; strong appeal of

accessories, in particular Leather Goods (carryover and newness)

• Wholesale up 21%

Q4 UP 19%• Retail and e-commerce up 21%• Double-digit growth of wholesale

RECURRING OPERATING INCOME UP 22%• Critical mass provides room to combine operating leverage

and further strategic investments

OPERATING MARGIN ABOVE 26%• Solid and more gradual margin progression on mix of growth

(like-for-like/openings)

CAPEX STEADY AROUND 5% OF REVENUE• Store opening and renovation plans


North America

Asia Pacific

2017 Western Europe

Japan RoW Wholesale Royalties and others

2018

12.02.2019 11

BOTTEGA VENETA

TOWARDS A NEW PHASE OF GROWTH2018 REVENUE: -5.7% REPORTED, -3.4% COMPARABLE

In €m2018

Reported change

Revenue 1,109 -5.7%


24221.8%

-17.7%-3.2pt


696.2%

+34.5%+1.9pt

-8%Q4 18

comparable growth

-9% 0% -3% +2% TOTAL-3%+1% +8%

-1%

North America

AsiaPacific

2017 Western Europe

Japan RoW Wholesale

1,109

1,176

-12% -1%+2% +3% +2%

Royalties and others

2018

-3%

Retail (82% of sales): -5%

2018: LOWER REVENUE• Retail down 5%• Europe impacted by lower tourist spend; mixed performances

in other regions, particularly Asia Pacific• Reset of product offering initiated towards year end

Q4 DOWN 3%• Retail down 4%• Wholesale up 2% • Very encouraging reception of Daniel Lee’s initial

Spring/Summer pieces and Pre-Fall collection

REDUCED RECURRING OPERATING INCOME• Operating deleverage mitigated by cost control• Targeted increase in investments to accompany brand

repositioning and strengthen product development capabilities

OPERATING MARGIN AT 21.8%

CAPEX FOCUSED ON NETWORK IMPROVEMENT• Selective store openings• Iconic projects, including new high-visibility flagships (Madison

Avenue, Ginza, Dubai Mall) and store renovations


12.02.2019 12

OTHER HOUSES

MAJOR GROWTH DRIVERS2018 REVENUE: +29.8% REPORTED, +32.1% COMPARABLE

In €m2018

Reported change

Revenue 2,109 +29.8%


21510.2%

+114.0%+4.0pt


1396.6%

+42.1%+0.5pt

1,624

2,109

2017 restated Retail Royalties and others

Wholesale 2018

+4%+44%

+24%

2018 REVENUE EXCEEDS €2BN• Growth fueled by Couture & Leather Goods, led by Balenciaga

and Alexander McQueen• Second consecutive year of growth in Watches, with promising

new initiatives; solid performance from Jewelry• Retail now the main distribution channel

Q4 REVENUE UP 25%• Sharp increases across all regions on top of high comps• Balenciaga’s exceptional momentum continues• Alexander McQueen: sequential acceleration

RECURRING OPERATING INCOME MORE THAN DOUBLES• Remarkable operating leverage at Balenciaga due to scale• Ongoing development plans, notably at Alexander McQueen

and Boucheron

OPERATING MARGIN ABOVE 10%

CAPEX FOCUSED ON NETWORK EXPANSION• Openings and retailization, notably at Balenciaga, Alexander

McQueen and Boucheron


12.02.2019 13

CORPORATE & OTHER

KERING EYEWEAR: OUTSTANDING PERFORMANCE• Consolidated revenue of €391m, up 46% comparable• Very strong growth of Gucci• Cartier launch resounding success• Enthusiastic reception of initial Balenciaga and Montblanc

collections (available early 2019)

Q4: FURTHER ACCELERATION, UP 72% COMPARABLE• Double-digit growth in all regions and distribution networks

GOOD CONTROL OVER UNDERLYING RECURRING OPERATING RESULT • Positive contribution from KEYE, up from 2017• Disciplined management of corporate costs (ex. LTI) in the

context of ambitious transformation projects

CAPEX: STRENGTHEN OUR GROWTH PLATFORM• Accelerated modernization of IT systems, expansion of Group

logistics capabilities, KEYE investments (logistics center)• Includes final installment of Safilo compensation, paid in 2018

In €m2018 2017

Total recurring operating resultUnderlying resultCorporate Long-term incentive plan

(247)(183)

(64)

(204)(170)

(34)

Gross CAPEX 218 134

In €m

27

495

2018 Total Corporate and Other

2018 KEYE external sales

Royalties and intragroup

eliminations

Other revenue2018 KEYE consolidated sales

391418

-104

Mainly PUMA contribution: net income and net capital gain of

€1.18bn

FINANCIAL PERFORMANCE

In €m 2018 2017*Revenue 13,665 10,816

Gross margin 10,198 7,916

Recurring operating income 3,944 2,691

Other non-recurring operating income and expenses

Finance costs, net

Income tax expense

Share in earnings of equity-accounted companies

(222)

(207)

(868)

12

(164)

(220)

(551)

(4)

Net income from continuing operations

Net income from discontinued operations

2,659

1,095

1,752

113

Net income of consolidated companies

Of which net income, Group share3,754

3,7151,865

1,786

Net income, Group share, from continuing operations excluding non-recurring items 2,817 1,887

Net income, Group share, per share (in euro)

Net income per share from continuing operations, Group share, excluding non-recurring items (in euro)

29.49

22.36

14.17

14.97

12.02.2019

1

14

* PUMA, Volcom, Stella McCartney and Christopher Kane have been reclassified under discontinued operations, in accordance with IFRS 5.Reminder: PUMA IFRS 5 from January 1 to May 16, 2018 and Equity-accounted since May 16, 2018.

1

In €m 2018 2017*

Cash flow before taxes, dividends and interests

Change in working capital requirement

Income tax paid

4,392

(52)

(562)

3,125

(36)

(316)

Net cash flow from operating activities 3,778 2,773

Acquisition of fixed operating assets

Sale of fixed operating assets

(828)

5

(605)

38

Free cash flow from operations 2,955 2,206

12.02.2019 15

FREE CASH FLOW FROM OPERATIONS

* Restated data

2017-2018 CHANGE

CHANGE IN NET FINANCIAL DEBT

IN €M AND NET DEBT / EBITDA RATIO

12.02.2019

367

187

168 94

Free cash flow from

operations

Net debt at Dec. 31, 2018

Net interest paid and dividend received

Net debt at Dec. 31, 2017

Restatement for discontinued

operations as of Jan.1, 2018

Dividend paid Purchase of Kering shares

Other acquisitions and disposals

22

Other movements

0.4x

3,049

-2,955

780

1,711

0.9x

16

12.02.2019 17

BALANCE SHEET AND OPERATING WORKING CAPITAL

In €m Dec. 31, 2018 Dec. 31, 2017

Intangible Assets

Tangible Assets

Other Non-current Assets (Liabilities)

Total Non-current Assets

Operating Working Capital

Other Current Assets (Liabilities)

Total Current Assets (Liabilities)Net Assets held for sale

Provisions

9,793

2,229

654

12,676

2,518

(3,404)

(886)350

(367)

14,580

2,268

(1,349)

15,499

2,825

(2,275)

550-

(374)

Capital employed 11,773 15,675

Shareholders’ Equity

Net Debt

10,062

1,711

12,626

3,049

Total Sources 11,773 15,675

Operating Working Capital(in €m and as % of revenue)

Debt-to-equity ratio

17.0%

18.4%

IFRS 16 – LEASES

12.02.2019

MAIN CHANGES

• Replaces IAS 17 as from January 1, 2019 First application of IFRS 16 in H1 2019 financial statements

• General principlesHenceforth, lease contracts* must be accounted for by lessees as follows:

IMPACT ON PERFORMANCE MEASUREMENTS

FIRST INDICATIONS

• Fixed rent (capitalized): 45% of total rental expense

• Variable rent (still in Opex): 55% of total rental expense

• Application of the modified retrospective approach as of Jan. 1, 2019 (note 2.2.4 to the consolidated financial statements)

• Estimated impact on debt of around €3.7bn**

• Publication of Alternative Performance Measures to enablebetter readability of financial statements

18

* Excluding leases with initial term of one year or less or leases with a low-value underlying asset

EBITDA, Recurring operating income, Operating income

Finance costs

Debt as accounted for in balance sheet and associated ratios

Net cash from operating activities

Net cash from financing activities

Affecting a number of KPIs used to effectively monitor operating performance

BALANCE SHEETBEFORE AFTER

Off-balance sheetcommitments

(non actualized)

AssetsRight-of-use(actualized value of fixed rents)

LiabilitiesAssociated leaseliability

P&LBEFORE AFTER

Rental expensesin Opex

OpexVariable leaseexpense + rentalcharges

D&A right-of-use amortization

Net finance costsInterest expenserelating to leaseliability

** based on current stage of contracts review

OUR MODEL

FRANÇOIS-HENRI PINAULT CHAIRMAN & CEO

Organic growth& value creation

12.02.2019 20

A UNIQUE GROWTH & PERFORMANCE MODEL

Strengthen ourcompetitive advantages

Creative, responsible, nimble, innovative, quality of executionGrowth platform

LONG TERM FINANCIAL

PERFORMANCE

MERCHANDISING DISTRIBUTIONRETAIL METRICS

# DOS stableSelective buybacks and store

enlargement

Travel Retail opportunities(organic growth, buybacks,

new openings)10% of sales in medium term

E-commerce€1bn sales in medium term

12.02.2019 21

ACHIEVE OUR VALUE CREATION POTENTIALGUCCI – MEDIUM-TERM LEVERS & AMBITIONS

Strong double-digit growth in all product categories

% ofFY18 sales

Newness30% Carryover

70%

Other7%

W&J4%

Shoes18%

RTW14%

LeatherGoods

57%2 0 1 8

• Maintaining fashion contentin new introductions

• Support to existing pillars

• Maximize the efficiency of the product assortment

• Development in High Jewelry

• Further potential in Fragranceand Cosmetics

# DOS YE 2018 : 540

E-commerce70% growth in 2018

c.6% retail sales

Openings in untapped countriesand increased penetration

+84 in 2018

Prior concept

56%

Newconcept

44%c.20k

> 30k40k+

YE 15 YE 17 YE 18

Sales / sq.m. (€)

c.45k

c.50k

Ambition Best-in-class

Sales / sq.m.(€)

TRAFFIC

CONVERSION

RETENTION

TRAFFIC

CONVERSION

RETENTION

2 0 1 9 & B E Y O N D

% of FY18 sales

62%of sales with Millennials

Growth from all age groupsand all nationalities

Chinese35%

American22%

European12%

Japanese6%

Other Asian19%

Other6%

% of FY18 sales

CLIENT METRICS SUPPLY CHAINDIGITAL LEADERSHIP

Adaptation to higher volumes

Reduction of lead time

Better control over qualityand value chain

12.02.2019 22

ACHIEVE OUR VALUE CREATION POTENTIALGUCCI – MEDIUM-TERM LEVERS & AMBITIONS

2 0 1 8

CRM, clienteling tools and initiatives

Customer Hub across channels

Launch in EMEA end 2018,US live mid 2019,full rollout 2020

Ongoinginternalization

(own factories + supervisedproduction)

55% of media allocated to digital

gucci.com 367.5m visits57+ million social media followers

>60% of media spend allocated to digital in

2019 / MT

Native digitalcontent

2 0 1 9 & B E Y O N D

COHERENT AND SUSTAINABLE DEVELOPMENTREVENUE €10BN / EBIT MARGIN 40%+ MEDIUM TERM

12.02.2019 23

ACHIEVE OUR VALUE CREATION POTENTIALSAINT LAURENT – MAINTAINING MOMENTUM

CONTINUING IMPROVEMENT INSALES DENSITY

• New tools and initiatives deployedto enhance client engagement

• Unique client experience

219 DOS AT 2018 YE

• Openings, notably in EMEA, NorthAmerica and Greater China, travelretail opportunities

• Relocations

• Significant investments in and aroundfashion shows, key drivers of brand image

• Unique aesthetic interpreted across all supports, with growing digital presence

LEVERAGE BRAND TERRITORY & NARRATIVE

ONGOING WORK ON BALANCE ACROSS

CATEGORIES

• Iconic, essentially Parisian Ready-to-Wear fueling desirability

• Driving Leather Goods and Shoes

PRODUCT OFFERING AND MERCHANDISING

LIKE-FOR-LIKE GROWTH

NETWORK EXPANSION

COMMUNICATIONS AND IMAGE

IN LINE WITH MT/LT AMBITIONS PRESENTED IN 2017 REVENUE €2BN THEN €3BN / EBIT MARGIN 25% , THEN 27%

12.02.2019 24

ACHIEVE OUR VALUE CREATION POTENTIALREPOSITIONING BOTTEGA VENETA

NEXT STEPSFEBRUAR Y 2019 : F /W FASHION SHOW – LAT E Q2 2019 : FALL COLLECT ION IN ST ORES

279 DOS AT 2018 YE • Relocations, enlargements, new flagships

LOYAL CLIENTELE, MODEST ACQUISITION

RATIO

• Expansion of client base (nationalities, demographics)

• Strengthened communications, new messaging, expanded digital presence

IMPACT AND BRAND AWARENESS STILL

RESTRICTED

ESTABLISHED LEGITIMACY IN ACCESSORIES

• Reinvention of Ready-to-Wear

• Renewed Leather Goods offering

DISTRIBUTION

CLIENTS

COMMUNICATION

PRODUCT OFFERING AND MERCHANDISING

12.02.2019 25

ACHIEVE OUR VALUE CREATION POTENTIALOTHER HOUSES

COUTURE & LEATHER GOODS

• Build on the Houses’ creative codes and their distinctive RTW positioning to grow the other categories, and transform theminto global brands

• Expansion of store networks− Balenciaga: 156 DOS at 2018 YE (+35), flagship opening in Milan via

Montenapoleone and buybacks (U.A.E., China, Thaïland, Malaysia, Australia)− AMQ: 63 DOS at 2018 YE (+7), London Old Bond Street flagship open

• Sharp growth in 2018 and ambitious expansion plans• Balenciaga, 4th Group brand, to pass €1bn mark in 2019• AMQ target: doubling retail network in medium term

JEWELRY

• Investment plan underway to reinforce the notoriety and presence of the brand

• Jewelry / High Jewelry collections emphasizing bold creativeinspiration

• Spectacular renovation of Hôtel de Nocé, place Vendôme, reopening of flagship in December

• Target openings in Asia in 2018 and beyond, renovation of existing network

TRANSFORM AND RELAUNCH

12.02.2019 26

POWERFUL CULTUREUNITING AN ENSEMBLE OF COMPLEMENTARY HOUSES

PURSUE GROWTH INVEST IN DEVELOPMENT

STRENGTHEN AND MONITOR

• Ensure gradual normalization of growthtrajectory

• Progressive elevation of operating margin• Substantial FCF generation,

normative Capex level

• Levers: untapped markets, expandeddistribution networks, broadened productoffering

• Opex & Capex investments• Significant potential to raise margins in short /

medium term• Future growth drivers

• New Creative Directors• In-depth work on positioning, product offering,

distribution network, supply chain• Investments required in the short term• Significant operating leverage in medium term

• Precision watchmaking product positioning• Offering and distribution enhancement

underway• Implementation of cost synergies• Gradual recovery of profitability ongoing

ENTREPRENEURIALCULTURE

-SUSTAINABLE DEVELOPMENT

-TALENT

TRANSFORMATION & GROWTH PLATFORM

JEAN-FRANÇOIS PALUSGROUP MANAGING DIRECTOR

12.02.2019 28

TRANSFORM TO STRENGTHEN OUR COMPETITIVE ADVANTAGES

C H A L L E N G E S

Anticipate and adapt to evolutions in our business,

markets, clients and Houses

A M B I T I O N SA N D M E A N S

Client-centric strategy

Improve operating efficiency

Boost top-line momentum, raise profitability,

reduce working capital

Transformand personalizeclient relationship

Develop new expertiseCRM & AI factory, Innovation cell

Adaptlogistics capabilities

ModernizeIT systems

INNOVATION

IN-STOREEXPERIENCE

CLIENT SERVICE SOCIALCOMMERCE

SUPPLY CHAIN& LOGISTICS

E-COMMERCE& OMNICHANNEL

DATA, CRM & AI

CLIENT

12.02.2019 29

E-COMMERCE VALUE CHAIN INTERNALIZATION

• Take full control of client experience, online and offline

• Exceed client expectations

• Implement full omnichannelstrategy and deploy new functionalities

• Improve financial profile of e-commerce activities

• 360° vision of client and client journey

• New omnichannel capabilities, improved client serviceLarger product assortment, improvedavailability, shorter delivery time

• Increased financial contribution from e-commerce

− Higher revenue, gradual absorption of costbase, inventory optimization

− End of profit sharing, neutral impact from2021, then accretive

• Exit venture at expiration dateZero impact on debt and earnings

G O AL S B E N E F I T SM E AN S

• New technological e-commerce platform

• New integrated logistics setup

• Integration of client service and relationship with media agencies

• Internalization of back-office functions

• Creation of e-commerce center ofexcellence

• 2018-20 Opex and Capex ramp up

2018 2019 H1 2020Technical and operational implementation, start of migration

LaunchDecision and overall design of project

SCOPE AND TIMELINE :

EVENING

Saint LaurentEvening

12.02.2019 30

CLIENT AT THE HEART OF DIGITAL ECOSYSTEM

ONLINE

REMOTELYIN STORE

LUCEDeployment of application for Sales Associates• Personalize client relationship• Increase efficiency of SAs• Improve client engagement• Reach 100% of DOS by end of H1

2019 at Gucci, YSL, BV and AMQ• Increase of average ticket

LUMIÈRE• Use data to boost relevance and

personalization of communications• Adapt our strategy to the specifics of

various digital platforms, notably in China

• Raise conversion rate

KERING SIGNATURE– CLIENT SERVICE• Take expertise in-house to provide

clients with tailor-made services at each step of their journey

• Significantly improve performance• In time, provide coverage through five

regional hubs

Saint LaurentSpring SummerView thisemail in your browser

12.02.2019 31

DEVELOPMENT OF NEW EXPERTISE

CRM FACTORY

AI FACTORY

INNOVATION CELL

• Artificial Intelligence as additional performance lever• Deployment of a team of data scientists, first pilots

launched in 2019• Projects underway:

− Target high-potential customers− Optimize sell through− Reduce inventory shortages

• Creation of Group CRM center of excellence

• Support CRM initiatives of our brands and raise theirefficiency

• Create and implement new customer journeys to generate incremental sales

• Business models

• Client experience

• New innovative materials

• Technologies

12.02.2019 32

ADAPT OUR LOGISTICS INFRASTRUCTURE

LOGISTICTOOLS

LOGISTICSYSTEMS

Adapt to growth of activity

Reduce lead time – Improve service

Develop omnichannel functions – Optimize inventory

Optimize return logistics

Take better advantage of Free Trade Agreements

Reduce unit logistical costs

OPERATING MODELS

12.02.2019 33

MODERNIZATION OF INFORMATION SYSTEMS

HRNew collaborative tools

MA

ST

ER

DA

TAM

AN

AG

EM

EN

TB

US

INE

SS

INT

EL

LIG

EN

CE

SALES & CLIENTSLumière

LuceData AnalyticsPoint of Sales SUPPLY CHAIN

Sales & OperationsPlanning

Allocation& Replenishment

DISTRIBUTION

E-COMMERCEINTERNALIZATION

Front-end platform

Order ManagementSystem

FINANCE

E R P

12.02.2019 34

MAINTAIN STEADY, SUSTAINABLE GROWTH MOMENTUM

• Manage brand portfolio

• Straightforward shareholderreturn policy

• Debt reduction

• Room to seize opportunities

• Attractive brands, desirableproducts

• Organic growth

• Ongoing market share gains

• Leverage potential of our Housesaccording to their maturity level

• Increase productivity of stores and systems

• Continuous adaptation of organizations

• Cost control

• Invest for growth: products, client experience, talents,…

• Raise margins

• Optimize Working Capital

• Pursue Group investments

• Improve ROCE

SUSTAINLONG-TERM…

…PROFITABLE GROWTH

STRONG CASH FLOW GENERATION

BALANCEDCAPITAL

ALLOCATION

DIVIDEND PAYOUT

(in €)

DIVIDEND UP 75%

3.75 4.00 4.00 4.606.00

10.50

2013 2014 2015 2016 2017 2018

+75%

12.02.2019

DIVIDEND PER SHARE

* Restated data

Proposed to April 24, 2019 AGM€3.5 per share interim dividend paid on January 17, 2019

€7.0 per share balance to be paid on May 6, 2019

38.4% 42.9% 49.6% 45.3% 40.1% 47.0%64.0% 59.4%

102.2%

57.1%

37.3%47.8%

2013* 2014 2015 2016 2017* 2018

in % of recurring net income, Group share in % of available cash flow

35

(in %)

Q&A

Appendix

12.02.2019 39

REVENUE

Reported change

in €m 2018 2017* €m %

GucciSaint Laurent

Bottega VenetaOther Houses

8,284.91,743.51,109.12,109.2

6,211.21,501.41,176.31,624.4

2,073.7242.1(67.2)484.8

+33.4%+16.1%

-5.7%+29.8%

Luxury – Total Houses 13,246.7 10,513.3 2,733.4 +26.0%

Corporate & Other 418.5 302.6 115.9 +38.3%

Kering 13,665.2 10,815.9 2,849.3 +26.3%

* Restated data

y-o-y change

in €m % comparable % reported

Q1 18

Q2 18

Q3 18

Q4 18

2,998

3,211

3,318

3,720

+36.9%

+31.3%

+27.1%

+23.3%

+27.6%

+26.2%

+27.2%

+23.5%

12.02.2019 40

LUXURY ACTIVITIES

Revenue breakdown by region

Western Europe 33%

North America20%

Japan9%

Asia Pacific32%

RoW6%

2018 REVENUE€13,247m +26.0% REPORTED, +29.1% COMPARABLE

NUMBER OF DIRECTLY OPERATED STORES

350

210 242

533

362

220 251

606

W estern Europe Nor th Am er ica Japan Em erg ing m arkets

YE 2017 restated: 1,335 YE 2018: 1,439

Western Europe29%

North America21%

Japan8%

Asia Pacific36%

RoW6%


y-o-y change


Q1 18

Q2 18

Q3 18

Q4 18

1,867

1,986

2,096

2,336

+48.7%

+40.1%

+35.1%

+28.1%

+37.9%

+34.3%

+34.9%

+28.0%

12.02.2019 41

GUCCI


116 119

72

222

116 11580

229


YE 2017: 529 YE 2018: 540


Western Europe35%

North America23%

Japan8%

Asia Pacific28%

RoW6%


y-o-y change


Q1 18

Q2 18

Q3 18

Q4 18

408

400

447

488

+19.6%

+19.8%

+16.1%

+19.4%

+12.0%

+15.5%

+16.5%

+20.0%

12.02.2019 42

SAINT LAURENT


47

29 30

78

54

34 32

99


YE 2017: 184 YE 2018: 219


Western Europe28%

North America11%

Japan16%

Asia Pacific39%

RoW6%


y-o-y change


Q1 18

Q2 18

Q3 18

Q4 18

261

291

259

298

+0.7%

-2.3%

-8.4%

-3.2%

-6.8%

-6.1%

-7.8%

-2.4%

12.02.2019 43

BOTTEGA VENETA

2018 REVENUE€1,109m -5.7% REPORTED, -3.4% COMPARABLE

61

30

59

120

62

33

59

125


YE 2017: 270 YE 2018: 279


Western Europe46%

Japan9%

Asia Pacific21%

RoW9%


y-o-y change


Q1 18

Q2 18

Q3 18

Q4 18

462

534

516

597

+38.6%

+34.7%

+32.2%

+25.5%

+31.6%

+30.6%

+32.2%

+26.0%

12.02.2019 44

OTHER HOUSES


126

32

81

113130

38

80

153


YE 2017 restated: 352 YE 2018: 401


North America15%

12.02.2019 45

RECURRING OPERATING INCOME

Reported change

in €m 2018 2017* €m %

GucciSaint Laurent


3,275.2459.4 242.0 214.4

2,124.1376.9294.0100.2

1,151.182.5

(52.0)114.2

+54.2%+21.9%-17.7%

+114.0%

Luxe – Total Houses 4,191.0 2,895.2 1,295.8 +44.8%

Corporate & Other (247.2) (204.5) (42.7) -20.9%

Kering 3,943.8 2,690.7 1,253.1 +46.6%

* Restated data

12.02.2019 46

EBITDA

Reported change

in €m 2018 2017* €m %

GucciSaint Laurent


3,514.6502.8284.3296.8

2,331.0422.1337.3161.2

1,183.680.7

(53.0)135.6

+50.8%+19.1%-15.7%+84.1%

Luxe – Total Houses 4,598.5 3,251.6 1,346.9 +41.4%

Corporate & Other (162.8) (128.8) (34.0) -26.4%

Kering 4,435.7 3,122.8 1,312.9 +42.0%

* Restated data

12.02.2019 47

NET FINANCIAL COSTS AND INCOME TAX

in €m 2018 2017*

Cost of net debtOther financial income and expenses

(77)(130)

(110)(110)

Financial costs (net) (207) (220)

in €m 2018 2017*

Tax on recurring incomeTax on non-recurring items

(904)36

(557)6

Total tax charge (868) (551)

Effective tax rate 24.7% 23.9%

Tax rate on recurring income 24.2% 22.6%

* Restated data

12.02.2019 48

STEADY SHAREHOLDER RETURN

2013-18:+23% average p.a.

*Target of 50% on average of recurring net income, Group share and available cash flow

DIVIDEND GROWTH LINKED TO GROUP PERFORMANCE

EXCEPTIONAL DISTRIBUTION IN KIND

SHARE REPURCHASE PROGRAM

Payout target of 50%*

of PUMA shares≈ €36 per share

as of May 16, 2018

Up to 1% of outstandingshare capital

0.3% repurchased at YE 2018

SUSTAINED GROWTH AND FINANCIAL PERFORMANCE

Gucci • Saint Laurent • Bottega Veneta • Balenciaga • Alexander McQueen • Brioni

Boucheron • Pomellato • Dodo • Qeelin • Ulysse Nardin • Girard -Perregaux

Kering Eyewear

Documents

DISCLAIMER - Kering€¦ · Résultat opérationnel courant en M€ et marge en % 12.02.2019 ENDETTEMENT FINANCIER NET CASH FLOW LIBRE OPÉRATIONNEL +29,4% +34,0% 2 206 2 955 2017