Kering Sa · EURONEXT:KER
Kering Sa — H1 2022 Earnings Presentation
57 slides from Kering Sa's earnings presentation, September 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION SEPTEMBER 2022
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 presentation may include projections and forecasts or other forward-looking statements. They are not historical facts and
Slide 3: H1 2022 Results
t an | A i nH lie RESULTS. aE a SE
Slide 4: Solid Group Topline Momentum
SOLID GROUP TOPLINE MOMENTUM H1 REVENUE (€M) H1 REVENUE BREAKDOWN BY REGION H1 +23% reported +16% comparable* YoY % of total revenue and YoY reported change Q2 +20% reported +12% comparable* YoY RoW Western Europe 7% (+1pt) H1 26% (+5pt) +28%* vs. 2019 9,930 8,047 7,638 4,974 Q2 3,853 5,378 4,157 As
Slide 5: Consistent Quarterly Dynamic vs. 2019
CONSISTENT QUARTERLY DYNAMIC VS. 2019 COMPARABLE GROWTH VS. 2021 COMPARABLE GROWTH VS. 2019 +30% +21% +27% +28% +16% +12% GROUP Q1 22 Q2 22 H1 22 Q1 22 Q2 22 H1 22 +23% +32% +32% +32% RETAIL +17% +12% 77% OF H1 SALES * Q1 22 Q2 22 H1 22 Q1 22 Q2 22 H1 22 * % based on Revenue before Eliminations Inve
Slide 6: Q2 22 Group Revenue by Channel
Q2 22 GROUP REVENUE BY CHANNEL RETAIL – YOY COMPARABLE Q2 19 Q2 20 Q2 21 Q2 22 O/W +98% E-COMMERCE +22% YOY 16% OF RETAIL SALES +14% +12% 78% (= YOY) 1,599 DOS -42% +40 NET VS. YE 2021 22% ROYALTIES LUXURY BRANDS KERING EYEWEAR (= YOY ) & OTHER W H O L E S AL E & OTHER +8% +17% +31% +12% YoY % weigh
Slide 7: Q2 22 Group Retail by Region
Q2 22 GROUP RETAIL BY REGION Q2 19 Q2 20 Q2 21 Q2 22 VS. Q2 19 +71% +94% +15% WESTERN EUROPE +14% -66% +263% NORTH AMERICA +8% +100% +2% -49% +93% +45% +9% JAPAN +1% -62% +53% +22% ASIA PACIFIC +15% -12% -15% +322% ROW +7% +24% +67% -70% % comparable change Investor Presentation - September 2022 7
Slide 8: All Houses Contributing to EBIT Growth
ALL HOUSES CONTRIBUTING TO EBIT GROWTH RECURRING OPERATING INCOME (€M) +26% +56 -6 2,820 +140 +38 +163 28.4% +192 2,237 27.8% H1 21 Gucci Saint Laurent Bottega Veneta Other Houses Kering Eyewear Eliminations H1 22 & Corporate Investor Presentation - September 2022 8
Slide 9: Healthy Cash Flow Generation and Financial Situation
HEALTHY CASH FLOW GENERATION AND FINANCIAL SITUATION FCF FROM OPERATIONS (€M) NET DEBT (€M)* 2,354 2,049 942 619 168 H1 21 H1 22 H1 21 YE 21 H1 22 FCF OVER €2BN USUAL SEASONALITY IN NET DEBT POSITION VS. GROUP CAPEX AT €361M, 3.6% OF REVENUE YEAR-END OPERATING WORKING CAPITAL AT 14.3% OF LTM
Slide 10: Gucci: Elevating the Brand
GUCCI ELEVATING THE BRAND
Slide 11: Gucci H1 22 Revenue
H1 22 REVENUE: +15% REPORTED, +8% COMPARABLE (€M, and YoY comparable growth in %) +8% +9% +27% 5,173 4,479 91% of H1 sales H1 21 Retail Wholesale Royalties H1 22 and others Of which Q2 22 +2% +21% +24% +4% comp growth • H1 +10% VS. 2019, Q1 AND Q2 AT THE SAME PACE • Q2 CHINA DRAG OFFSET BY STRENGTH
Slide 12: Gucci Key Figures
KEY FIGURES €M H1 2022 H1 2021 Change Revenue 5,173 4,479 +15% Recurring operating income 1,886 1,694 +11% Margin (%) 36.5% 37.8% -1.3pt Gross CAPEX 154 125 +24% As % of revenue 3.0% 2.8% +0.2pt • SOLID EBIT WHILE NURTURING BRAND ELEVATION – Step-up in com munications intensity, initiated in H2 21 a
Slide 13: Saint Laurent: Delivering New Highs
SAINT LAURENT DELIVERING NEW HIGHS
Slide 14: Saint Laurent H1 22 Revenue
H1 22 REVENUE: +42% REPORTED, +34% COMPARABLE (€M, and YoY comparable growth in %) +10% +39% 1,481 +41% 1,046 77% of H1 sales H1 21 Retail Wholesale Royalties H1 22 and others Of which Q2 22 +35% +9% +39% +31% comp growth • H1 GROWTH ON STEADY EXECUTION OF BRAND STRATEGY • CONTINUED STRENGTH IN Q2 –
Slide 15: Saint Laurent Key Figures
KEY FIGURES €M H1 2022 H1 2021 Change Revenue 1,481 1,046 +42% Recurring operating income 438 275 +59% Margin (%) 29.6% 26.3% +3.3pt Gross CAPEX 25 24 +2% As % of revenue 1.7% 2.3% -0.6pt • RECORD H1 EBIT MARGIN, UP 3.3PT YOY – Strong operating leverage on healthy topline m omentum – Favorable chann
Slide 16: Bottega Veneta: Building Long-Term Value
BOTTEGA VENETA BUILDING LONG-TERM VALUE
Slide 17: Bottega Veneta H1 22 Revenue
H1 22 REVENUE: +18% REPORTED, +13% COMPARABLE (€M, and YoY comparable growth in %) +19% +22% 834 -4% 708 78% of H1 sales H1 21 Retail Wholesale Royalties H1 22 and others Of which Q2 22 +19% -15% +17% +10% comp growth • H1: NEW MILESTONES IN ICONIZATION STRATEGY • FURTHER RETAIL MOMENTUM IN Q2 – Ret
Slide 18: Bottega Veneta Key Figures
KEY FIGURES €M H1 2022 H1 2021 Change Revenue 834 708 +18% Recurring operating income 168 130 +29% Margin (%) 20.1% 18.3% +1.8pt Gross CAPEX 35 24 +45% As % of revenue 4.2% 3.4% +0.8pt • EBIT MARGIN BACK TO 20% – Gross profit m argin expansion led by supportive product and channel m ix, com bined wi
Slide 19: Other Houses
OTHER HOUSES UNLEASHING REVENUE AND PROFIT POTENTIAL
Slide 20: Other Houses H1 Revenue
OTHER HOUSES H1 22 REVENUE: +32% REPORTED, +29% COMPARABLE (€M, and YoY comparable growth in %) +16% +54% 1,955 +38% 1,485 -3% 61% of H1 sales H1 21 Scope Retail Wholesale Royalties H1 22 & Other Of which Q2 22 -2% +33% +9% +45% +24% comp growth • H1 REVENUE REACHING €2BN • Q2 UP DOUBLE-DIGIT IN BOT
Slide 21: Other Houses Key Figures
OTHER HOUSES KEY FIGURES €M H1 2022 H1 2021 Change Revenue 1,955 1,485 +32% Recurring operating income 337 197 +71% Margin (%) 17.3% 13.3% +4.0pt Gross CAPEX 63 60 +5% As % of revenue 3.2% 4.0% -0.8pt • DELIVERING RECORD EBIT CONTRIBUTION – Both Soft Luxury and Jewelry contributing to EBIT growth –
Slide 22: Kering Eyewear / Corporate
KERING EYEWEAR C O R P O R AT E
Slide 23: Kering Eyewear and Corporate
KERING EYEWEAR AND CORPORATE KERING EYEWEAR FOCUS KEY FIGURES (€M, and YoY growth in %) +6% 576 €M H1 2022 H1 2021 +18% Revenue* 591 396 +26% Kering Eyewear 576 383 Other 15 13 383 Recurring operating income** (7) (63) Kering Eyewear 111 52 Corporate (118) (115) Gross CAPEX 84 112 H1 21 Kering Compa
Slide 24: Financial Performance
FINANCIAL PERFORMANCE €M H1 2022 H1 2021 Revenue 9,930 8,047 Gross margin 7,378 5,942 Recurring operating income 2,820 2,237 Other non-recurring operating income and expenses (13) (17) Financial result (19) (126) Income tax expense (747) (595) Share in earnings of equity-accounted companies 2 1 Net
Slide 25: Free Cash Flow from Operations
FREE CASH FLOW FROM OPERATIONS €M H1 2022 H1 2021 Cash flow before taxes, dividends and interests 3,503 2,895 Change in working capital requirement (476) 12 Income tax paid (617) (209) Net cash flow from operating activities 2,410 2,698 Acquisitions of property, plant and equipment and intangible as
Slide 26: Change in Net Financial Debt
CHANGE IN NET FINANCIAL DEBT H1 22 NET DEBT BRIDGE (€M) +152 942 +453 +648 168 +1,505 +65 0.1x -2,049 Net debt at FCF from operations Dividends paid Net interest paid Acquisition of Lease repayment Net financial Net debt at Dec. 31, 2021 and dividends Kering shares and related interests investments
Slide 27: ESG Update
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Slide 28: Membership of the Board of Directors
MEMBERSHIP OF THE BOARD OF DIRECTORS 6 INDEPENDENT DIRECTORS François-Henri Pinault Chairman and CEO 4 NON-INDEPENDENT DIRECTORS Yonca Dervisoglu Daniela Riccardi 13 Directors Jean-Pierre Denis Financière Pinault Climate Change Lead Represented by Tidjane Thiam Emma Watson Héloïse Temple-Boyer Chair
Slide 29: Board Focusing on Independence and Variety of Expertise
BOARD FOCUSING ON INDEPENDENCE AND VARIETY OF EXPERTISE As of 2010 2015 2021 Aug. 1 st, 2022 TOTAL NUMBER OF DIRECTORS 14 10 13 13 INDEPENDENCE (1) 57% 40% 55% 55% PROPORTION OF WOMEN (1) 28% 30% 55% 45% AVERAGE AGE 55 57 54 57 NATIONALITIES REPRESENTED 4 3 5 5 (1) Within the meaning of the Corporat
Slide 30: Role of the Lead Independent Director
ROLE OF THE LEAD INDEPENDENT DIRECTOR VERONIQUE WEILL Chair of the Board of Directors of CNP Assurances Member of the Board of Directors since 2022 Designated Lead Independent Director by the Board in April 2022 Member of the 4 Committees: Audit, Remuneration, Appointments & Governance, Sustainabili
Slide 31: Role of the Climate Change Lead
ROLE OF THE CLIMATE CHANGE LEAD JEAN-PIERRE DENIS Member of the Board of Directors since 2008 Designated Climate Change Lead by the Board in April 2022 Member of the Audit, Remuneration and Sustainability Committees Age: 62 French national Director expertise: The Climate Change Lead: • Ensures that
Slide 32: Board Governance
BOARD GOVERNANCE AUDIT REMUNERATION COMMITTEE COMMITTEE • Tidjane Thiam (Chairman / Independent Director) • Véronique Weill (Chairwoman / Independent Director) • Jean-Pierre Denis • Jean-Pierre Denis • Financière Pinault, represented • Financière Pinault, represented by Héloïse Temple-Boyer by Héloï
Slide 33: Components of Executive Corporate Officers' Remuneration
COMPONENTS OF EXECUTIVE CORPORATE OFFICERS’ REMUNERATION Annual fixed remuneration Annual variable remuneration Multi-annual variable remuneration (cash) (cash) (performance shares) Performance criteria Performance criteria (3 years) Proportion of women in Sustainability 10 % • Consideration of the
Slide 34: Crafting Tomorrow's Luxury: Our Roadmap for 2025
CRAFTING TOMORROW’S LUXURY: OUR ROADMAP FOR 2025 2025 ROADMAP WE CARE about our impact on the planet, on climate change, on natural resources by: • Reducing our environmental footprint through -40% EP&L • Preserving our raw materials through 100% traceability and compliance with our Kering Standards
Slide 35: Progressing on Our Sustainability Commitments
CRAFTING TOMORROW’S LUXURY: PROGRESSING ON OUR SUSTAINABILITY COMMITMENTS • 41% reduction in our environmental footprint (EP&L intensity 2015-21) • Extension of our environmental footprint to the consumer use and end-of-life phases of our products • Alignment of our Climate strategy with the 1.5°C s
Slide 36: Materiality: Targeting Our Main Priorities
MATERIALITY: TARGETING OUR MAIN PRIORITIES OUR CONTRIBUTION TO THE UN SDG • Results of the 2020/2021 materiality assessment confirmed that Kering’s strategic pillars are consistent with external stakeholders’ expectations • 2025 Sustainability Strategy dashboard identifies the contribution of our ac
Slide 37: The EP&L, Cornerstone of Our Environmental Approach
THE EP&L, CORNERSTONE OF OUR ENVIRONMENTAL APPROACH PROGRESS TOW ARDS 2025 GOALS 86% of our impacts fall outside of our own operations 41% reduction in our EP&L intensity between 2015 and 2021 66% in raw material production step → Achieving Kering’s EP&L target 4 years ahead of time Investor Present
Slide 38: Mitigating Climate Change
MITIGATING CLIMATE CHANGE AN IMPACTFUL CLIMATE STRATEGY Science-based targets in line with the Paris Agreement towards achieving a 1.5°C pathway by 2030 and net zero by 2050 Ongoing support of Natural Climate Solutions within our supply chain • 90% reduction in absolute GHG emissions from Kering ope
Slide 39: Building Responsible Supply Chains
BUILDING RESPONSIBLE SUPPLY CHAINS OUR SUPPLY CHAIN STRUCTURE More than 92% suppliers in Europe, predominantly in Italy Western Europe (89.6%): strong government presence, comprehensive and mature labor law, highly developed social dialogue 4,107 3,420 suppliers audits in 2021 Gucci & Bottega Veneta
Slide 40: Protecting Biodiversity
PROTECTING BIODIVERSITY OUR COMMITMENT Becoming a nature positive company by 2025 by regenerating and protecting an area about six times our total land footprint across our full supply chain • Regenerating 1 million hectares of farms and rangelands in our supply chain landscapes by 2025, though the
Slide 41: The Regenerative Fund for Nature
THE REGENERATIVE FUND FOR NATURE • Launched in January 2021 in partnership with Conservation International • Objective: transition 1 million hectares of existing farms/rangelands into regenerative agricultural practices • 4 materials: leather, wool, cotton & cashmere • Timeline: 2021 – 2025 • 5 key
Slide 42: Our Circularity Ambition: Coming Full Circle
OUR CIRCULARITY AMBITION: "COMING FULL CIRCLE" LUXURY THAT LASTS Increasing the longevity of our products: durability by design, culture of repair and reuse Supporting new business models designed to keep our products in circulation for the longest possible time (e.g., second-hand) ADOPTING A HOLIST
Slide 43: Kering People
KERING PEOPLE 42,811 PEOPLE 37% 21% Men Offices W ORK ALL PLACE 63% 21% 58% Women Production Retail 12% 53% 35% 44% 4% 1% Men Generation Z Baby Americas EMEA APAC (>1995) Boomers (1945-1960) MANAGERS AGE 65% 30% Generation Y Generation X 56% 13,052 10,166 (1981-1995) (1961-1980) Women hires departur
Slide 44: Our People Vision
OUR PEOPLE VISION BE THE PREFERRED EMPLOYER BUILD A “LOVED” AND RESPECTED MULTI- IN LUXURY BRAND COMPANY for responsible, ambitious individuals who want joining strong Houses together with a shared culture and sense to make a difference in an open and diverse environment of purpose, which everyone u
Slide 45: Creating Diverse Leadership in All Houses
CREATING DIVERSE LEADERSHIP IN ALL HOUSES OUR COMMITMENT FOR 2025 WHERE WE ARE Increase diversity in key management positions, in terms Women at Kering account for: of gender and geography, to better reflect our business footprint DEVELOPMENT ACTIONS IN PLACE Recruitment: 45% 56% • gender parity emb
Slide 46: Advancing Workplace Equity
ADVANCING WORKPLACE EQUITY ENGAGING ALL LEVELS & LEADERSHIP COMMITMENT • Engagement of our Chairman and CEO, Inclusion & Diversity sponsor − At the origin of the creation of the Kering Foundation in 2008 that is committed to combating violence against women • 13 I&D active committees, one per House
Slide 47: Appendix
APPENDIX
Slide 48: Q2 Group Revenue
Q2 22 GROUP REVENUE REVENUE BREAKDOWN BY SEGMENT % YoY change €M Q2 Change (%) H1 Change (%) Q1 22 Q2 22 Reported Comp. H1 22 Reported Comp. Gucci 2,591 2,582 +12% +4% 5,173 +15% +8% Saint Laurent 739 742 +40% +31% 1,481 +42% +34% Bottega Veneta 396 438 +15% +10% 834 +18% +13% Other Houses 973 982 +
Slide 49: Gucci H1 2022 Revenue Quarterly Performance
H1 2022 REVENUE €5,173M +15% REPORTED, +8% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION As of June 30, 22 (net change vs. YE 21) RoW Western Europe RoW Western Europe 62 (+8 net) 103 (- 4 net) 6% 22% Asia Pacific Asia Pacific 519 North America 182 (+10 net) 38% North America 100 (
Slide 50: Saint Laurent H1 2022 Revenue Quarterly Performance
H1 2022 REVENUE €1,481M +42% REPORTED, +34% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION As of June 30, 22 (net change vs. YE 21) RoW RoW Western Europe 7% Western Europe 24 (+2 net) 53 (+1 net) 28% Asia Pacific Asia Pacific 106 (+0 net) 271 26% Japan North America North America J
Slide 51: Bottega Veneta H1 2022 Revenue Quarterly Performance
H1 2022 REVENUE €834M +18% REPORTED, +13% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION As of June 30, 22 (net change vs. YE 21) RoW Western Europe RoW 16 (+0 net) 54 (+1 net) 8% Western Europe 24% Asia Pacific Asia Pacific 263 North America 109 (+0 net) 36% 36 (+0 net) Japan Japan
Slide 52: Other Houses H1 2022 Revenue
OTHER HOUSES H1 2022 REVENUE €1,955M +32% REPORTED, +29% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION As of June 30, 22 (net change vs. YE 21) RoW Western Europe RoW 29 (+1 net) 125 (+7 net) 8% Western Europe 34% Asia Pacific Asia Pacific 546 North America 243 (+5 net) 29% 69 (+6
Slide 53: Recurring Operating Income
RECURRING OPERATING INCOME €M H1 2022 H1 2021 Reported change % Gucci 1,886 1,694 +11% Saint Laurent 438 275 +59% Bottega Veneta 168 130 +29% Other Houses 337 197 +71% Kering Eyewear and Corporate (7) (63) +90% Eliminations (2) 4 n.a. Kering 2,820 2,237 +26% Investor Presentation - September 2022 53
Slide 54: EBITDA
EBITDA €M H1 2022 H1 2021 Reported change % Gucci 2,213 1,994 +11% Saint Laurent 545 361 +51% Bottega Veneta 251 213 +18% Other Houses 498 334 +49% Kering Eyewear and Corporate 112 45 +153% Eliminations (2) 4 n.a. Kering 3,617 2,951 +23% Investor Presentation - September 2022 54
Slide 55: Net Financial Costs and Income Tax
NET FINANCIAL COSTS AND INCOME TAX €M H1 2022 H1 2021 Cost of net debt (18) (22) Other financial income and expenses 57 (44) Total financial result (excluding leases) 39 (66) Interest expense on lease liabilities (58) (60) Financial result (19) (126) H1 2022 H1 2021 Income tax expense on recurring i
Slide 56: Balance Sheet
BALANCE SHEET €M June 30, 2022 Dec. 31, 2021 Goodwill, brands and intangible Assets 9,942 9,923 Lease right-of-use Assets 4,696 4,302 Property, plant and equipment 3,054 2,967 Net other Non-current Assets (Liabilities) 753 793 Non-current lease Liabilities (4,231) (3,826) Total Net Non-current Asset
Slide 57: Kering Brands
Gucci • Saint Laurent • Bottega Veneta • Balenciaga • Alexander McQueen • Brioni Boucheron • Pomellato • Dodo • Qeelin Kering Eyewear