Kering Sa · EURONEXT:KER
Kering Sa — PPR — FY2010 Earnings Presentation
41 slides from Kering Sa's earnings presentation, Feb 17, 2011
Slide 1: 2010 Annual Results
An adventure of enterprise 2010 Annual Results February 17, 2011
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: 2010: an outstanding year
An adventure of enterprise 2010: an outstanding year François-Henri Pinault
Slide 4: Outstanding operating and financial performances
Outstanding operating and financial performances Sales up nearly 8% (+ 4% on a comparable basis) Growth across all activities driven by success of our sales initiatives Sharp acceleration in the second half Strong growth in EBIT, up 24% Higher EBIT from all of our activities Sharp increase i
Slide 5: Further steps in the implementation of our strategy in 2010
Further steps in the implementation of our strategy in 2010 Focusing on global Luxury and Sports & Lifestyle brands Disposal of Conforama Towards a transformation of the Group profile: More coherent More global Faster growth More profitable 2010 Annual results 5
Slide 6: Analysis of 2010 results
An adventure of enterprise Analysis of 2010 results Jean-François Palus
Slide 7: Operating performance
Operating performance €m CONTINUING OPERATIONS 2010 2009 Change Revenue 14,605 13,584 + 7.5% Gross profit 7,429 6,684 + 11.2% Gross profit margin 50.9% 49.2% + 1.7pt Recurring operating income 1,531 1,240 + 23.5% Recurring operating income margin 10.5% 9.1% + 1.4pt EBITDA 1,861 1,574 + 18.2% EBITDA
Slide 8: Fnac: 2010 revenue +1.3% comparable
2010 revenue: +1.3% comparable EBIT margin unchanged Quarterly sales - 0.7% Key figures (€m) 2010 Change 1,558 Revenue* 4,473 + 2.2% + 1.6% + 3.2% + 2.5% Recurring operating income 188 + 3.3% 999 Recurring operating income margin 4.2% + 0.0pt 982 934 EBITDA 252 - 2.2% EBITDA margin 5.6% - 0.3pt Gros
Slide 9: Redcats: 2010 revenue +0.8% comparable
2010 revenue: +0.8% comparable EBIT margin: +1.4 pt Quarterly sales + 0.4% Key figures (€m) 2010 Change - 0.5% - 1.9% + 5.7% 924 Revenue* 3,427 + 1.3% 844 852 816 Recurring operating income 165 + 43.9% Recurring operating income margin 4.8% + 1.4pt EBITDA 214 + 26.2% EBITDA margin 6.2% + 1.2pt Gross
Slide 10: Puma: 2010 revenue +2.2% comparable
2010 revenue: +2.2% comparable EBIT margin: +0.2 pt Quarterly sales Key figures (€m) 2010 Change + 5.4% - 2.2% Revenue* 2,695 + 10.5% - 7.3% + 15.3% 784 Recurring operating income 337 + 12.7% 683 + 0.2pt 615 623 Recurring operating income margin 12.5% EBITDA 393 + 9.2% EBITDA margin 14.6% - 0.2pt Gr
Slide 11: Gucci Group: 2010 revenue +12.2% comparable
2010 revenue: +12.2% comparable EBIT margin: +2.0 pts Quarterly sales Key figures (€m) 2010 Change + 16.7% + 14.4% + 6.1% + 10.9% Revenue* 4,010 + 18.3% 1,146 1,041 Recurring operating income 897 + 29.7% 895 929 Recurring operating income margin 22.4% + 2.0pts EBITDA 1,056 + 26.6% EBITDA margin 26.3
Slide 12: Gucci: 2010 revenue +11.0% comparable
2010 revenue: +11.0% comparable EBIT margin: +1.4 pt Quarterly sales Key figures (€m) 2010 Change + 13.8% + 14.8% Revenue* 2,666 + 17.6% + 5.3% + 9.4% 781 Recurring operating income 765 + 23.9% 627 670 Recurring operating income margin 28.7% + 1.4pt 589 EBITDA 873 + 22.9% EBITDA margin 32.7% + 1.4pt
Slide 13: Bottega Veneta: 2010 revenue +19.3% comparable
2010 revenue: +19.3% comparable EBIT margin: +3.3 pts Quarterly sales Key figures (€m) 2010 Change + 27.3% + 27.3% Revenue* 511 + 27.0% + 11.0% + 10.5% 144 Recurring operating income 133 + 45.2% 137 + 3.3pts 116 Recurring operating income margin 26.1% 114 EBITDA 147 + 42.3% EBITDA margin 28.8% + 3.1
Slide 14: Yves Saint Laurent: 2010 revenue +9.6% comparable
2010 revenue: +9.6% comparable Positive EBIT Quarterly sales Key figures (€m) 2010 Change + 13.0% + 17.8% Revenue* 269 + 13.3% - 0.7% + 6.7% 78 74 Recurring operating income 12 + €21m 59 59 Recurring operating income margin 4.3% EBITDA 21 + €19m EBITDA margin 7.9% Gross capex 7 + 79.5% Q1 Q2 Q3 Q4 *
Slide 15: Other brands: 2010 revenue +13.2% comparable
2010 revenue: +13.2% comparable EBIT margin: +4.0 pts Quarterly sales Key figures (€m) 2010 Change + 18.5% + 8.9% + 5.1% Revenue* 564 + 16.8% + 21.9% 161 x 2.1 143 Recurring operating income 51 134 127 Recurring operating income margin 9.1% + 4.0pts EBITDA 72 + 63.8% EBITDA margin 12.7% + 3.6pts Gro
Slide 16: Financial performance
Financial performance €m 2010 2009 Change Recurring operating income 1,531 1,240 + 23.5% Other non-recurring operating income and expenses (194) (374) Financial charges (254) (364) Corporate income tax (304) (173) Income from equity affiliates 36 1 Net income from discontinued operations 200 665 Con
Slide 17: Free cash flow from operations
Free cash flow from operations €m 2010 2009 Cash flow before taxes, dividends and interest 1,778 1,484 Change in working capital requirement (before taxes) (151) 200 Corporate income tax paid (251) (232) Net cash flow from operating activities 1,376 1,453 Acquisition of fixed operating assets (343)
Slide 18: Net financial indebtedness
Net financial indebtedness €m Net indebtedness at December 31, 2009 4,367 Free cash flow from operations (1,081) Net interest paid and dividend received 242 Free cash flow (839) Dividends paid 439 Net investments in financial assets (221) Other 35 Net indebtedness at December 31, 2010 3,781 2010 Ann
Slide 19: Dividend
Dividend Dividend per share +15.0% - 4.3% +6.1% 3.50 In € 3.45 3.30 3.30 +10.3% 3.00 2.72 2005 2006 2007 2008 2009 2010* Dividend payout 60.7% 63.2% 58.6% 55.2% 52.9% 48.9% 47.7% 48.3% 47.6% 42.2% 43.5% 39.5% 2005** 2006** 2007** 2008** 2009** 2010* % of recurring net income, Group share, from conti
Slide 20: Strategy & Outlook
An adventure of enterprise Strategy & Outlook François-Henri Pinault
Slide 21: Our vision
Our vision Pursue the strategic transformation of PPR into a global group focusing on Apparel and on Accessories, through iconic brands with: worldwide stature strong growth potential high margins 2010 Annual results 21
Slide 22: A transformation whose pace we control
A transformation whose pace we control Significant organic growth potential of the Group Acquisitions and disposals subject to strict value-creation criteria Sale of Conforama on excellent terms Targets with high growth prospects Seeking significant industrial synergies in Sports & Lifestyle
Slide 23: A new mode of organization
A new mode of organization PPR, architect and developer of synergies Strengthening resources available to the brands Development of support functions and cross-brand operational departments Evolution of PPR’s role through a more integrated organization around two Business Groups: Sports &
Slide 24: 2011 outlook
2011 outlook PPR to fully benefit from its strategic refocus as pace of world economic recovery accelerates Strong organic growth potential across all activities Retail: market share gains, strengthening web leadership, cost control Puma: intensification of investments, product responsivenes
Slide 25: Appendices
An adventure of enterprise Appendices
Slide 26: Revenue
Revenue (before inter-company eliminations) €m Change 2010 2009 In €m as % Fnac 4,473.3 4,375.1 98.2 + 2.2% Redcats 3,435.8 3,386.4 49.4 + 1.5% Puma 2,706.4 2,447.3 259.1 + 10.6% Gucci Group 4,010.7 3,390.3 620.4 + 18.3% Gucci Division 2,666.1 2,266.4 399.7 + 17.6% Bottega Veneta 510.6 402.1 108.5 +
Slide 27: Q4 2010 revenue: €1,558m
Q4 2010 revenue: €1,558m -0.7% comparable; +0.1% reported Breakdown of Q4 2010 revenue Breakdown of Q4 2010 revenue by country by product category Other Italy Switzerland 5% Belgium 4% 3% Books & Home +4.3% 4% +8.7% -4.4% Stationery electronics Brazil +4.6% 20% 50% 4% France +0.0% +1.8% +11.5% 69% -
Slide 28: Q4 2010 revenue: €924m
Q4 2010 revenue: €924m +0.4% comparable; +2.2% reported Breakdown of Q4 2010 revenue by region Further strong growth in online sales, up 11% La Redoute resilient in tough environment Other 11% US Large Sizes up 0.5% -5.5% Sharp growth in Sport & Outdoor, up 9% France 42% -1.3% US 37% +2.8% R
Slide 29: Q4 2010 revenue: €623m
Q4 2010 revenue: €623m +15.3% comparable; +28.2% reported Breakdown of Q4 2010 revenue Breakdown of Q4 2010 revenue by region by product category Accessories 12% Asia Pacific EMEA +8.4% 29% +11.3% 36% +9.8% Footwear 49% +15.7% Apparel 39% +17.0% Americas 35% +25.5% X%: % of Q4 2010 revenue X%: compa
Slide 30: Q4 2010 revenue: €1,146m
Q4 2010 revenue: €1,146m +14.4% comparable; +23.3% reported Breakdown of Q4 2010 revenue by region Further sharp increase in Retail sales, up 16% Sustained growth in Wholesale, up 10% Other Fashion and Leather Goods up 16% 4% -6.6% Western Europe 31% Asia +13.4% Pacific 30% Number of directly
Slide 31: Q4 2010 revenue: €781m
Q4 2010 revenue: €781m +13.8% comparable; +23.3% reported Breakdown of Q4 2010 revenue by region Continued excellent momentum in Retail (+14%) and Wholesale (+13%) Other Sharp growth of Timepieces (+21%) 4% +16.2% Western Leather Goods up 14% Europe Greater China (50 DOS) up 31% 27% Asia +11
Slide 32: Q4 2010 revenue: €144m
Q4 2010 revenue: €144m +27.3% comparable; +39.9% reported Breakdown of Q4 2010 revenue by region Sharp growth in sales continues: Retail up 25% and Wholesale up 43% Other 3% Acceleration in Leather Goods (+31%) +37.0% Western Greater China (23 DOS) up 59% Europe 25% +28.0% Asia Pacific 32% Num
Slide 33: Q4 2010 revenue: €78m
Q4 2010 revenue: €78m +17.8% comparable; +24.0% reported Breakdown of Q4 2010 revenue by region Further strong growth in Retail sales (+14%) Other Acceleration in Wholesale (+32%) 8% Western 3 new DOS opened in China in Q4 Asia +33.8% Pacific Europe 13% 47% +14.4% +20.0% Number of directly ope
Slide 34: Q4 2010 revenue: €143m
Q4 2010 revenue: €143m +5.1% comparable; +9.9% reported Breakdown of Q4 2010 revenue by region Other 8% -46.4% Western Asia Pacific Europe 12% 47% +50.0% +8.0% Number of directly operated stores Total 2009: 125 Total 2010: 141 64 61 50 Japan 44 18% +9.8% 13 14 11 9 North America 15% Western North Am
Slide 35: Recurring operating income
Recurring operating income €m 2009: €1,240m 897 2010: €1,531m 22.4% 692 20.4% 337 299 12.5% 188 12.3% 165 182 115 4.2% 4.2% 4.8% 3.4% -48 -56 Redcats Fnac Puma Gucci Group Holdings X%: Recurring operating income margin 2010 Annual results 35
Slide 36: Recurring operating income
Recurring operating income €m Change 2010 2009 In €m as % Fnac 188.1 182.1 6.0 + 3.3% Redcats 165.0 114.7 50.3 + 43.9% Puma 337.1 299.0 38.1 + 12.7% Gucci Group 897.4 692.1 205.3 + 29.7% Gucci Division 765.2 617.7 147.5 + 23.9% Bottega Veneta 133.3 91.8 41.5 + 45.2% Yves Saint Laurent 11.6 (9.8) 21.
Slide 37: EBITDA
EBITDA €m Change 2010 2009 In €m as % Fnac 252.4 258.1 (5.7) - 2.2% Redcats 213.6 169.3 44.3 + 26.2% Puma 393.0 359.9 33.1 + 9.2% Gucci Group 1,055.8 833.9 221.9 + 26.6% Gucci Division 872.6 710.0 162.6 + 22.9% Bottega Veneta 147.0 103.3 43.7 + 42.3% Yves Saint Laurent 21.2 1.8 19.4 na Other brands
Slide 38: Financial charges, Income tax
Financial charges Income tax €m 2010 2009 Cost of net indebtedness (231) (229) Other financial charges (net) (23) (135) Financial charges (net) (254) (364) 2010 2009 Current tax (expense) / income (313) (228) Tax on non-current items 9 55 Total tax (304) (173) Effective tax rate 28.1% 34.3% Current
Slide 39: Condensed consolidated balance sheet
Condensed consolidated balance sheet €m 2010 2009 Change Goodwill, brands & other intangible assets 14,740 15,666 (926) Other net non-current assets 163 571 (408) Net current assets 1,058 (387) 1,445 Provisions (529) (560) 31 CAPITAL EMPLOYED 15,432 15,290 142 Net asset held for sale 24 (24) SHAREHO
Slide 40: Debt ratios
Debt ratios 7 000 4,00 3,95 €m 3,90 3,85 3,80 6,121 3,75 3,70 3,65 6 000 3,60 5,510 3,55 3,50 3,45 3,40 3,35 3,30 5 000 3,25 3,20 4,584 3,15 4,367 3,10 3,05 3.10 3,00 2,95 4 000 3,781 2,90 2,85 3,461 2,80 2,75 2,70 2,65 2.73 2,60 2,55 3 000 2,50 2,45 2.57 2,40 2.44 2,35 2,30 2,25 2,20 2,15 2,10 2 00
Slide 41: Liquidity
Liquidity €m 6,123 Net debt €3,781m 1,107 861 450 506 526 331 Undrawn 2011* 2012** 2013** 2014** 2015** beyond** confirmed lines of credit * Gross debt minus cash & cash equivalents and financing of customer loans ** Gross debt 2010 Annual results 41