Kering Sa · EURONEXT:KER
Kering Sa — PPR — Cheuvreux Pan-Euro Forum 2012
34 slides from Kering Sa's conference presentation, May 23, 2012
Slide 1: Investor Presentation
An adventure of enterprise Investor Presentation Cheuvreux Pan-Euro Forum 2012 23 May 2012
Slide 2: Disclaimer
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 notably projections and forecasts. They express objectives based on current assessments and estimates
Slide 3: Investment Thesis
Investment Thesis Unique combination of global luxury and premium sports & lifestyle brands, enjoying: Leading positions in their respective segments Broad consumer appeal as self-fulfillment and indulgence increasingly drive buying decisions Considerable organic growth potential Managemen
Slide 4: Who we are
Who we are Young company about to celebrate its 50th birthday Longstanding heritage in specialized distribution, giving us a unique expertise in assessing consumer tastes, expanding retail concepts, developing new formats, channels and brands Entered the premium branded good universe in 1999 w
Slide 5: Our Mission
Our Mission To empower our brands to reach their full global potential in a sustainable and responsible way Two coherent product areas: apparel and accessories Two fast-growing market segments: Luxury Goods and Sport & Lifestyle Investor Presentation 5
Slide 6: Where we operate
Where we operate Empower premium brands across four main categories Accessories and Leather Goods Apparel Footwear royalties 56% 12% 13% 19% 84% 7% 5% 4% LUXURY 35% 24% 25% 16% 31% 25% 15% 29% * 34% 51% 15% LIFESTYLE SPORT & 86% 1% 13% Note: Based on FY11 sales split. * Brioni consolidated startin
Slide 7: Our strengths
Our strengths Unique and burgeoning portfolio of brands Strong equity, leading positions and huge consumer appeal Considerable organic growth potential, significant pricing power Strong human values at the core of our success and transformation Mastering the entire value chain of our brand
Slide 8: Our management principles
Our management principles We give our brands freedom within a framework Empower the development of our key assets – the brands – and help them reach beyond their limits We are a group and act as a group A single worldwide corporate team PPR Asia and PPR Americas to bring corporate support
Slide 9: The PPR Effect
The PPR Effect Further strengthening the integration of the Group Cross-border expertise and support Development of new Hedging, fiscal, and working product categories and capital management Product development Finance & Logistics sourcing management Optimized and centralized (Sport & Life
Slide 10: Luxury division - Drivers of future growth and profitability
Luxury division - Drivers of future growth and profitability Collection of world-leading brands Designs, manufactures and markets leather goods, shoes, ready-to-wear, jewelry & watches A Group characterized by: The exceptional quality of its products A unique talent pool, from design to cr
Slide 11: Sport & Lifestyle division - Drivers of future growth and profitability
Sport & Lifestyle division - Drivers of future growth and profitability PUMA THE ultimate Sportlifestyle brand - one of the worlds’ largest providers of athletic footwear, apparel & accessories A business characterized by a brand value where product categories originating in sports are continu
Slide 12: Tomorrow's PPR – our 2020 ambitions
Tomorrow’s PPR – our 2020 ambitions €24 billion 1 PPR talent mobility revenue platform 40% revenue generated by Sport & Lifestyle Division €10 billion revenue in Asia 1 Group Environmental Profit & Loss Account 54% retail Over €1 billion revenue generated online Gender parity in the Group leadership
Slide 13: FY 2011 - A highly successful year
FY 2011 - A highly successful year Comparable Group sales up 9.3% Recurring net income, Group share, from continuing operations: +26.4% Further decrease in net debt: NFD/ EBITDA down to 1.8x Investor Presentation 13
Slide 14: Reaching another milestone in the strategic evolution of the group
Reaching another milestone in the strategic evolution of the group Excellent performances from the Luxury and Sport & Lifestyle divisions Strong growth momentum across all brands New brands with huge potential join the Group Recurring Recurring In €m % operating % operating Revenue Change inco
Slide 15: Well-balanced growth profile
Well-balanced growth profile Luxury and Sport & Lifestyle: revenues up 17.3% comparable 2011 revenue breakdown by region Other countries 12% +23% Japan Western 12% Europe +6% 32% +14% Asia Pacific 24% North America +26% 19% +18% X%: % of 2011 sales Y%: Comparable growth rate vs. 2010 Investor Presen
Slide 16: Conclusion & Outlook
Conclusion & Outlook Unique combination of global luxury and premium sport & lifestyle brands with considerable organic growth potential Broad consumer appeal as self-fulfilment and indulgence increasingly drive buying decisions Favorable geographic balance Increasingly flexible cost structu
Slide 17: Q1 highlights
Investor Presentation Q1 12 highlights Investor Presentation 17
Slide 18: 2012: Off to a good start on outstanding Luxury sales
2012: Off to a good start on outstanding Luxury sales Reported Comparable (Sales in €m) Q1 2012 change change (1) Luxury 1,458 +29.1% +17.8% Sport & Lifestyle 887 +14.6% +2.8% Sub-total 2,345 +23.2% +11.6% Fnac 916 -0.7% -0.8% Other & inter-company (3) ns ns PPR - Continuing operations 3,258 +15.4%
Slide 19: Q1 2012 revenue: Luxury division
Q1 2012 revenue: 1,458M€ Luxury +18% comparable; +29% reported division X%: Comparable growth +36% 1,458 M€ +17% +20% +17% +15% 1,129 M€ % of Q1 12 sales 32% 17% 12% 32% 7% Stellar performances on top of high comps (Q1 2011: comparable sales up 22%) Emerging markets close to 40% of sales (up 20%
Slide 20: Q1 2012 revenue: Fnac
Q1 2012 revenue: 916M€ -0.8% comparable; -0.7% reported Breakdown of Q1 2012 revenue Increasing contribution of online sales, up 18% by country to 12% of total sales Switzerland Belgium 3% Revenues in France down 2% 5% -9.8% Brazil +0.4% Market share gains 6% France Online sales up 15% (15%
Slide 21: Appendix
Investor Presentation Appendix Investor Presentation 21
Slide 22: PPR Heritage
PPR Heritage 1999 42% stake in Gucci Group 2000 Acquisition of Boucheron 2001 Acquisition of Bottega Veneta, Balenciaga, Stella McCartney and Alexander McQueen 2002 Disposal of Guilbert ‘mail order activity’, Finaref and Facet (credit subs) 2003 Disposal of Pinault Bois & Matériaux and Guilbert ‘con
Slide 23: Operating performance 2011
Operating performance 2011 In €m CONTINUING OPERATIONS 2011 2010 % Change Revenue 12,227 11,008 +11.1% Gross profit 6,224 5,369 +15.9% Gross profit margin 50.9% 48.8% +2.1pts Recurring operating income 1,602 1,370 +16.9% Recurring operating income margin 13.1% 12.4% +0.7pt EBITDA 1,911 1,649 +15.9%
Slide 24: Financial performance 2011
Financial performance 2011 In €m 2011 2010 Change Recurring operating income 1,602 1,370 +16.9% Other non-recurring operating income and expenses (58) (141) Financial charges (215) (240) Corporate income tax (317) (264) Income from equity affiliates 47 35 Net income from discontinued operations (13)
Slide 25: Financial charges Income tax 2011
Financial charges Income tax 2011 In €m 2011 2010 Cost of net indebtedness (216) (230) Other financial charges (net) 1 (10) Financial charges (net) (215) (240) In €m 2011 2010 Current tax (expense) / Income (319) (262) Tax on on-current items 2 (1) Total tax (317) (264) Effective tax rate 23.9% 26.7
Slide 26: Free cash flow from operations 2011
Free cash flow from operations 2011 In €m 2011 2010 Cash flow before taxes, dividends and interest 1,839 1,579 Change in working capital requirement (before taxes) (235) (144) Coprorate income tax paid (365) (243) Net cash flow from operating activities 1,240 1,193 Acquisition of fixed operating ass
Slide 27: Net financial indebtedness 2011
Net financial indebtedness 2011 In €m Net indebtedness at December 31, 2010 3,781 Free cash flow from operations (934) Net interest paid and dividend received 198 Dividends paid 454 Purchases of PPR shares 120 Purchases of Puma shares 300 Other disposals & acquisitions (577) Other 54 Net indebtednes
Slide 28: Condensed consolidated balance sheet 2011
Condensed consolidated balance sheet 2011 In €m 2011 2010 Goodwill, brands & other intangible assets - Net 14,546 14,740 Other net non-current assets 115 163 Net current assets 278 1,058 Provisions (364) (529) CAPITAL EMPLOYED 14,575 15,432 Net asset held for sale 570 SHAREHOLDERS’ EQUITY 11,750 11,
Slide 29: Debt ratios 2011
Debt ratios 2011 In €m * Published, not restated ** Pro forma Investor Presentation 29
Slide 30: Liquidity 2011
Liquidity 2011 In €m NFD 3,396 M€ * Gross debt minus cash & cash equivalents and financing of customer loans ** Gross debt Investor Presentation 30
Slide 31: Dividend 2011
Dividend 2011 Dividend per share 3.45 + 6.1% 3.50 3.50 In € - 4.3% 3.30 3.30 2007 2008 2009 2010 2011 Dividend payout 63.2% 59.8% 58.6% 48.9% 48.3% 52.9% 47.7% 47.6% 39.5% 41.8% 2007* 2008* 2009* 2010* 2011 % of recurring net income, Group share, from continuing operations % of free cash flow * Publ
Slide 32: Revenue 2011
Revenue 2011 Change In €m 2011 2010 €m % Gucci 3,143.2 2,666.1 477.1 + 17.9% Bottega Veneta 682.6 510.6 172.0 + 33.7% Yves Saint Laurent 353.7 269.2 84.5 + 31.4% Other brands 737.5 564.8 172.7 + 30.6% Luxury 4,917.0 4,010.7 906.3 + 22.6% Puma 3,009.0 2,706.4 302.6 + 11.2% Volcom 146.7 - 146.7 - Spor
Slide 33: Recurring operating income 2011
Recurring operating income 2011 Change In €m 2011 2010 €m % Gucci 947.7 757.2 190.5 + 25.2% Bottega Veneta 204.6 130.2 74.4 + 57.1% Yves Saint Laurent 40.9 9.4 31.5 4.4x Other brands 69.4 47.2 22.2 +47.0% Luxury 1,262.6 944.0 318.6 + 33.8% Puma 333.2 337.1 (3.9) - 1.2% Volcom 13.5 - 13.5 - Sport & L
Slide 34: Contacts – PPR Financial Communications
Contacts – PPR Financial Communications Alexandre de BRETTES +33 (0) 1 45 64 61 49 adebrettes@ppr.com Edouard CROWLEY +33 (0) 1 45 64 63 28 ecrowley@ppr.com Investor Presentation 34