Kering Sa · EURONEXT:KER
Kering Sa — PPR — FY2011 Earnings Presentation
47 slides from Kering Sa's earnings presentation, Feb 16, 2012
Slide 1: 2011 Annual Results
2011 Annual! Results February 16, 2012 PPR
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: 2011: an outstanding year
2011 annual results 2011: an outstanding year François-Henri Pinault Chairman & CEO 2011 annual results 3
Slide 4: A highly successful year
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 2011 annual results 4
Slide 5: 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 6: 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 2011 annual res
Slide 7: Analysis of 2011 results
2011 annual results Analysis of 2011 results Jean-François Palus Group General Manager 2011 annual results 7
Slide 8: Operating performance
Operating performance 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% EBITD
Slide 9: Luxury division: 2011 revenue +22.2% comparable
2011 revenue: +22.2% comparable Luxury EBIT margin: +2.2pts division 5 500 27,0% 25.7% In €m 2011 Change5 000 26,0% 25,0% 23.5% 4,917 Revenue 4,917 +22.6% 4 500 24,0% 23,0% 21.4% Recurring operating income 1,263 +33.8% 4 000 4,011 22,0% Recurring operating income margin 25.7% +2.2pts 3 500 21,0% 3,3
Slide 10: Gucci: 2011 revenue +18.7% comparable
2011 revenue: +18.7% comparable EBIT margin: +1.8pt 3 500 31,0% 30.2% In €m 2011 Change 30,0% 3 000 28.4% 29,0% 3,143 Revenue 3,143 +17.9% 27.3% 28,0% 2,666 27,0% Recurring operating income 948 +25.2%2 500 26,0% Recurring operating income margin 30.2% +1.8pt 2,266 25,0% 2 000 EBITDA 1,071 +23.9% 24,
Slide 11: Bottega Veneta: 2011 revenue +33.6% comparable
2011 revenue: +33.6% comparable EBIT margin: +4.5pts 800 30.0% 31,0% 30,0% In €m 2011 Change 29,0% 700 28,0% 683 +33.7% 25.5% 683 27,0% Revenue 26,0% 600 205 +57.1% 25,0% Recurring operating income 22.8% 24,0% Recurring operating income margin 30.0% +4.5pts 500 511 23,0% 22,0% 220 +53.0% 400 21,0% E
Slide 12: Yves Saint Laurent: 2011 revenue +32.3% comparable
2011 revenue: +32.3% comparable EBIT margin: +8.1pts 27,0% 26,0% 25,0% In €m 2011 Change 400 24,0% 23,0% 22,0% 21,0% 20,0% 354 +31.4% 300 354 19,0% Revenue 18,0% 17,0% 16,0% 41 4.4x 269 15,0% Recurring operating income 11.6% 14,0% 200 238 13,0% 11.6% 12,0% Recurring operating income margin +8.1pts 1
Slide 13: Other brands: 2011 revenue +23.6% comparable
2011 revenue: +23.6% comparable EBIT margin: +1.0pt 9.4% 10,0% In €m 2011 Change 800 8.4% 9,0% 8,0% Revenue 738 +30.6% 700 738 7,0% Recurring operating income 69 +47.0% 5.2% 6,0% 600 Recurring operating income margin 9.4% +1.0pt 5,0% 565 4,0% EBITDA 93 +37.0% 500 484 3,0% EBITDA margin 12.6% +0.6pt
Slide 14: Sport & Lifestyle division: 2011 revenue +10.5% comparable
Sport & 2011 revenue: +10.5% comparable Lifestyle A year of investments division Other countries In €m 2011 Change 23% Western Europe 33% +21% +6% Revenue 3,156 +16.6% Recurring operating income 347 +2.8% Recurring operating income margin 11.0% -1.5pt Japan 12% EBITDA 407 +3.7% +10% EBITDA margin 12
Slide 15: Puma: 2011 revenue +10.6% comparable
2011 revenue: +10.6% comparable In line with Back on the attack strategic plan 18,0% 17,0% 16,0% In €m 2011 Change 3 200 12.2% 12.5% 11.1% 15,0% 14,0% 13,0% 12,0% 11,0% 3 000 10,0% 9,0% Revenue 3,009 +11.2% 3,009 8,0% 7,0% 6,0% 5,0% 4,0% Recurring operating income 333 -1.2% 2 800 3,0% 2,0% 1,0% 0,0%
Slide 16: Volcom and Electric: 2011 revenue +8.2% comparable
2011 revenue: +8.2% comparable Successful integration Other countries 16% +9% In €m 2011* Western Europe 25% +8% Revenue 147 Recurring operating income 14 Recurring operating income margin 9.2% EBITDA 16 EBITDA margin 10.9% North America Gross capex 4 59% +8% * Integrated since July 1, 2011 X%: % of
Slide 17: Fnac: 2011 revenue -3.6% comparable
2011 revenue: -3.6% comparable A challenging year Switzerland Belgium 3% 5% -8.1% Brazil 0.4% 6% In €m 2011 Change 5.5% Portugal 7% Revenue 4,165 -3.2% -8.7% Recurring operating income 103 -46.5% Spain Recurring operating income margin 2.5% -2.0pt 10% 0.4% EBITDA 174 -31.5% France EBITDA margin 4.2%
Slide 18: Financial performance
Financial performance 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) 255
Slide 19: Free cash flow from operations
Free cash flow from operations 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 assets (
Slide 20: Net financial indebtedness
Net financial indebtedness 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 indebtedness at
Slide 21: Dividend
Dividend Dividend per share In € + 6.1% - 4.3% Dividend payout * Subject to April 27, 2012 AGM approval. ** Published not restated. 2011 annual results 21
Slide 22: PPR transformation on track
2011 annual results PPR transformation on track François-Henri Pinault Chairman & CEO 2011 annual results 22
Slide 23: 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 2011 annual results 23
Slide 24: 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 25: Our Strengths
Our Strengths Unique ensemble of premium consumer brands enjoying: Strong equity, leading positions, huge consumer appeal, significant pricing power Considerable organic growth potential Strong human values at the core of our success and transformation Mastering the entire value chain of o
Slide 26: 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 27: 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 28: 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 29: 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 30: 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 31: 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 32: Appendix
2011 annual results Appendix 2011 annual results 32
Slide 33: 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 34: Q4 2011 revenue: Luxury division
Q4 2011 revenue: 1,398.4 M€ Luxury +18.6% comparable; +22.1% reported division X%: Comparable growth +47% 1,398.4 M€ +20% +25% +5% +16% 1,145.6 M€ % du Q4 11 sales 29% 20% 14% 31% 6% Number of directly operated stores 2011 annual results 34
Slide 35: Q4 2011 revenue: Gucci
Q4 2011 revenue: 886.5 M€ +12.2% comparable; +13.6% reported X%: Comparable growth +75% 886.5 M€ +11% +19% +3% 780.7 M€ +5% % du Q4 11 sales 25% 21% 14% 35% 5% Number of directly operated stores 2011 annual results 35
Slide 36: Q4 2011 revenue: Bottega Veneta
Q4 2011 revenue: 199.8 M€ +35.7% comparable; +38.8% reported X%: Comparable growth +46% +47% 199.8 M€ +38% +10% +45% 144.0 M€ % du Q4 11 sales 26% 16% 20% 34% 4% Number of directly operated stores 2011 annual results 36
Slide 37: Q4 2011 revenue: Yves Saint Laurent
Q4 2011 revenue: 103.3 M€ +32.6% comparable; +33.1% reported X%: Comparable growth +56% (1%) 103.3 M€ +39% +12% 77.6 M€ +34% % du Q4 11 sales 42% 26% 8% 16% 8% Number of directly operated stores 2011 annual results 37
Slide 38: Q4 2011 revenue: Other brands
Q4 2011 revenue: 208.8 M€ +27.3% comparable; +45.7% reported X%: Comparable growth +55% +11% 208.8 M€ +25% +42% +5% 143.3 M€ % du Q4 11 sales 44% 16% 15% 18% 7% Number of directly operated stores 2011 annual results 38
Slide 39: Q4 2011 revenue: Sport & Lifestyle division
Q4 2011 revenue: 785.1 M€ Sport & +13.3% comparable; +25.9% reported Lifestyle division X%: Comparable growth +25% 785.1 M€ +12% +12% +12% +7% 623.4 M€ % du Q4 11 sales 24% 24% 15% 14% 23% Of which Volcom: 64.6 M€, +9.6% comparable in Q4 2011 2011 annual results 39
Slide 40: Q4 2011 revenue: Puma
Q4 2011 revenue: 720.5 M€ +13.6% comparable; +15.6% reported X%: Comparable growth +26% 720.5 M€ +13% +10% +14% 623.4 M€ +6% % du Q4 11 sales 25% 21% 15% 14% 25% 2011 annual results 40
Slide 41: Q4 2011 revenue: Fnac
Q4 2011 revenue: 1 447.3 M€ -3.4% comparable; -3.3% reported Breakdown of Q4 2011 revenue Breakdown of Q4 2011 revenue by country by product category Services 6% Switzerland Books & -1.9% Home Belgium 3% Stationery electronics 5% -10.6% 21% 50% Brazil -1.1% 5% -0.7% -1.3% France +12.0% 71% Portugal
Slide 42: Recurring operating income
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 43: EBITDA 2011
EBITDA 2011 Change In €m 2011 2010 €m % Gucci 1,071.2 864.6 206.6 + 23.9% Bottega Veneta 220.2 143.9 76.3 + 53.0% Yves Saint Laurent 50.2 19.0 31.2 2.6x Other brands 92.6 67.6 25.0 + 37.0% Luxury 1,434.2 1,095.1 339.1 + 31.0% Puma 391.4 393.0 (1.6) - 0.4% Volcom 16.0 - 16.0 - Sport & Lifestyle 407.4
Slide 44: Financial charges and 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 45: 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 46: Debt ratios
Debt ratios In €m * Published, not restated ** Pro forma 2011 annual results 46
Slide 47: Liquidity
Liquidity In €m NFD 3,396 M€ * Gross debt minus cash & cash equivalents and financing of customer loans ** Gross debt 2011 annual results 47