Kering Sa · EURONEXT:KER
Kering Sa — Kering Sa Ord — FY2023 Earnings Presentation
59 slides from Kering Sa's earnings presentation, Feb 8, 2024
Slide 1: 2023 Full-Year Results
2023 FULL-YEAR RESULTS FEBRUARY 8, 2024
Slide 2: Disclaimer
DISCLAIMER This presentation does not constitute an offer of securities for sale or an invitation or inducement to invest in securities in France, in the United States of America or in any other jurisdiction. Certain information contained in this presentation may include perspectives and trends or o
Slide 3: Introduction
INTRODUCTION F RANÇO I S - HENRI PI NAULT C H A I R MA N A N D C E O
Slide 4: FY23 Key Figures
FY23 KEY FIGURES REVENUE RECURRING OPERATING INCOME FCF FROM OPERATIONS €4.7bn €2.0bn €19.6bn 24.3% margin €3.3bn (excl. real estate) PEOPLE ENVIRONMENTAL FOOTPRINT PLANET 49,000 -58% CDP AAA List employees 2015-2023 EP&L intensity Climate – Water – Forests 08.02.2024 4
Slide 5: Nurturing Our Houses Desirability and Exclusivity: Collections & Products
NURTURING OUR HOUSES DESIRABILITY AND EXCLUSIVITY COLLECTIONS & PRODUCTS FASHION SHOWS CREATIVITY ICONICITY 08.02.2024 5
Slide 6: Nurturing Our Houses Desirability and Exclusivity: Communications
NURTURING OUR HOUSES DESIRABILITY AND EXCLUSIVITY COMMUNICATIONS BRAND POWER ACTIVATIONS & CLIENT VISIBILITY ENGAGEMENT 08.02.2024 6
Slide 7: Nurturing Our Houses Desirability and Exclusivity: Distribution
NURTURING OUR HOUSES DESIRABILITY AND EXCLUSIVITY DISTRIBUTION RETAIL UPGRADE EXPAND RELOCATE OPEN WHOLESALE: RATIONALIZE - RETAILIZE 08.02.2024 7
Slide 8: Nurturing Our Houses Desirability and Exclusivity: Ateliers
NURTURING OUR HOUSES DESIRABILITY AND EXCLUSIVITY ATELIERS OPENING OF NEW ATELIERS STRATEGIC SUPPLIERS - INTERNALIZATION YSL BV BOUCHERON KERING EYEWEAR SCANDICCI (IT) VIGONZA (IT) BBCFG - PARIS UNT (JURA, FR) 28,700 sqm 5,500 sqm 08.02.2024 8
Slide 9: Expanding Our Reach
EXPANDING OUR REACH PHOTO A VENIR ? EYEWEAR BEAUTÉ HOUSES ACQUISITION OF 30% STAKE IN FULL INTEGRATION LAUNCH OF KERING BEAUTÉ AND VALENTINO WITH PATH TO OF MAUI JIM ACQUISITION OF CREED CONTROL 08.02.2024 9
Slide 10: Delivering on Our Sustainability Commitments
DELIVERING ON OUR SUSTAINABILITY COMMITMENTS CLIMATE TRACEABILITY SOURCING & INNOVATION ON TRACK TO ACHIEVE SBT 1.5 - 77% REACHING 100% TRACEABILITY 97% • 100% ALIGNMENT WITH KERING 75% GOAL: -90% IN GHG EMISSIONS IN KEY RAW MATERIALS STANDARDS FOR SUSTAINABLE (SCOPE 1 & 2) BY 2030 VS 2015 BY 2025 P
Slide 11: Our 2024 Priorities
oUCCI ne, W506 OUR 2024._PRIORITIES — ee Ee ee eee
Slide 12: Taking Gucci to Its Next Stage
TAKING GUCCI TO ITS NEXT STAGE GUCCI TODAY AN ICONIC MEGABRAND WITH NEED TO REINFORCE A UNIQUE EQUITY CERTAIN LUXURY ATTRIBUTES DISTINCTIVE IDENTITY AESTHETIC THE ARCHETYPE OF ITALIAN LUXURY CRAFTSMANSHIP AND 100-YEAR+ HERITAGE PERCEPTION FASHION AUTHORITY WITH RECOGNIZED CODES AND ICONS A POWERFUL
Slide 13: Taking Gucci to Its Next Stage: Ambition
TAKING GUCCI TO ITS NEXT STAGE NEW PERSPECTIVE AN AMBITION MOVE GUCCI WHERE VISION IT BELONGS OPERATING MODEL UNIQUE POSITIONING SPANNING LUXURY AND FASHION ARTISTIC DIRECTOR AND LEADERSHIP 08.02.2024 13
Slide 14: Four Pillars
TAKING GUCCI TO ITS NEXT STAGE ENHANCE BRAND CONSIDERATION FOUR PILLARS ENHANCE EXCLUSIVITY CREATIVE PROPOSITION PRODUCT & COLLECTIONS COMMUNICATIONS DISTRIBUTION LUXURY TOUCHPOINTS CLIENT ENGAGEMENT ENHANCE QUALITY ENHANCE EFFICIENCY DESIGN, MANUFACTURING ORGANIZATION AND CARE PROCESSES STORE OPERA
Slide 15: Expanding into Beauty
EXPANDING INTO BEAUTY LAUNCH EARLY 2023 Feb. 2023 Oct. 2023 Creed acquisition RECRUITMENT OF A TEAM OF EXPERTS START OF PRODUCT DEVELOPMENT ACQUISITION OF CREED 08.02.2024 15
Slide 16: Expanding into Beauty: Opportunity and Roadmap
EXPANDING INTO BEAUTY THE BEAUTY OPPORTUNITY ROADMAP GROW AND LEVERAGE CREED A SUBSTANTIAL BUSINESS FOR FASHION BRANDS 1 AS PLATFORM FRAGRANCE MOST RELEVANT LAUNCH FIRST FRAGRANCES TO INITIATE JOURNEY 2 (FROM H2 2024) A NATURAL ADJACENCY FOR OUR HOUSES 3 BUILD PORTFOLIO AND SCALE HIGH-END ENSURES DE
Slide 17: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES ORGANIC SHAREHOLDER GROWTH RETURN – Continued investm ent – Dividend payout at c.50%* in our Houses and platform s – Flexible Share Buyback approach – 5% to 7% Capex to sales A HEALTHY FINANCIAL SITUATION AND FCF GENERATION FUEL HIGH-POTENTIAL ADJACENT BUSINESSES SEIZE
Slide 18: Our Ongoing Journey
OUR ONGOING JOURNEY SINCE 2013 TO BUILD AND SCALE A COMPLEMENTARY ENSEMBLE WE HAVE BEEN INVESTING IN OF ICONIC LUXURY HOUSES LUXURY JEWELRY ADJACENT REVENUE REVENUE BUSINESSES x3 x4 +€1.6bn RETAIL CUMULATED A&P SPEND SHARE CAPEX AD J AC E N C I E S & VISIBILITY D E S I R AB I L I T Y SELECTIVE M&A +
Slide 19: Our Ongoing Journey: Going Forward
OUR ONGOING JOURNEY GOING FORWARD WE WILL CONTINUE INVESTING IN AND WE WILL REINFORCE EXCLUSIVITY COLLECTIONS & PRODUCTS C O M M U N I C AT I O N S DISTRIBUTION VISIBILITY D E S I R AB I L I T Y AD J AC E N C I E S & SELECTIVE M&A TO UNLEASH OUR FULL POTENTIAL LONG-TERM GROWTH 08.02.2024 19
Slide 20: Analysis of Results
ANALYSIS OF RESULTS A RM E LLE P O ULO U GROUP CHIEF FINANCIAL OFFICER
Slide 21: FY Group Revenue
FY 23 GROUP REVENUE FY REVENUE CHANGE FY REVENUE BREAKDOWN BY REGION (in €m and comparable change YoY) (as a % of FY total revenue and % YoY reported change) -4% reported 20,351 +2% RoW Western Europe 7% (+0pt) 28% (+0pt) 19,566 -2% -4% Asia Pacific North America 35% (+3pt) 23% (-4pt) FY 22 Comparab
Slide 22: A Year of Investment
A YEAR OF INVESTMENT GROUP RECURRING OPERATING INCOME & MARGIN (€M & %) FCF FROM OPERATIONS (€M) NET DEBT (€M)*** -15% 8,504 5,589 4,746 3,208 3,321 1,983 27.5% 24.3% 2,306 FY 22 FY 23 FY 22 FY 23 excl. FY 23 YE 22 YE 23 real estate acquisition and disposal • HIGHER AVERAGE SELLING PRICE • FCF +4% Y
Slide 23: FY Group Revenue by Channel
FY 23 GROUP REVENUE BY CHANNEL R E T AI L I N C L . E - C O M M ER C E Y o Y D I R E C T L Y O P E R AT E D S T O R E S +4% +4% +0% 1,771 78% -2% +89 NET* VS. YE 22 -6% Q1 23 Q2 23 Q3 23 Q4 23 FY 23 WHOLESALE WHOLESALE ROYALTIES 22% LUXURY BRANDS KERING EYEWEAR & OTHER W H O L E S AL E AN D O T H E
Slide 24: FY Retail Revenue by Region
FY 23 RETAIL REVENUE BY REGION YOY COMPARABLE CHANGE BY REGION BY QUARTER WESTERN EUROPE NORTH AMERICA JAPAN ASIA PACIFIC ROW Q1 23 Q2 23 Q3 23 Q4 23 Q1 23 Q2 23 Q3 23 Q4 23 Q1 23 Q2 23 Q3 23 Q4 23 Q1 23 Q2 23 Q3 23 Q4 23 Q1 23 Q2 23 Q3 23 Q4 23 +30% +28% +26% +22% +15% +13% +10% +8% +4% +5% +1% -1%
Slide 25: Q4 and FY Group Revenue
Q4 AND FY 23 GROUP REVENUE REVENUE BREAKDOWN BY SEGMENT % YoY change In €m Q4 Change (%) FY Change (%) Q4 23 Q4 22 Reported Comp. FY 23 FY 22 Reported Comp. Gucci 2,528 2,733 -8% -4% 9,873 10,487 -6% -2% Saint Laurent 835 903 -8% -5% 3,179 3,300 -4% -1% Bottega Veneta 431 469 -8% -4% 1,645 1,740 -5%
Slide 26: Gucci
Slide 27: Gucci FY Revenue: -6% Reported, -2% Comparable
FY 23 REVENUE: -6% REPORTED, -2% COMPARABLE (in €m, and YoY comparable growth in %) 10,487 +11% 9,873 -2% -5% 91% of sales FY 22 Retail Wholesale Royalties FY 23 and others • Q4 RETAIL DOWN 4% COMP — Sequential improvement in North America and APAC — Resilience in Leather Goods and Women’s RTW — Reo
Slide 28: Gucci Key Figures
KEY FIGURES In €m FY 23 FY 22 Change Revenue 9,873 10,487 -6% Recurring operating income 3,264 3,732 -13% Margin (%) 33.1% 35.6% -2.5pt Gross CAPEX 435 408 +7% As % of revenue 4.4% 3.9% +0.5pt • RECURRING OPERATING MARGIN DILUTION — Lack of topline momentum prompting operating deleverage — Sustained
Slide 29: Saint Laurent
SAINT LAURENT
Slide 30: Saint Laurent FY Revenue: -4% Reported, -1% Comparable
FY 23 REVENUE: -4% REPORTED, -1% COMPARABLE (in €m, and YoY comparable growth in %) 3,300 +4% +18% 3,179 -26% 81% of sales FY 22 Retail Wholesale Royalties FY 23 and others • Q4 RETAIL STABLE — Strong performance in APAC and Japan, N. America and W.Europe down but improving sequentially — Good recep
Slide 31: Saint Laurent Key Figures
KEY FIGURES In €m FY 23 FY 22 Change Revenue 3,179 3,300 -4% Recurring operating income 969 1,019 -5% Margin (%) 30.5% 30.9% -0.4pt Gross CAPEX 186 112 +66% As % of revenue 5.8% 3.4% +2.4pt • RECURRING OPERATING MARGIN ABOVE 30% — Gross margin up on channel mix — Investments in brand and client expe
Slide 32: Bottega Veneta
BOTTEGA VENETA
Slide 33: Bottega Veneta FY Revenue: -5% Reported, -2% Comparable
FY 23 REVENUE: -5% REPORTED, -2% COMPARABLE (in €m, and YoY comparable growth in %) 1,740 +4% +51% 1,645 -24% 82% of sales FY 22 Retail Wholesale Royalties FY 23 and others • Q4 RETAIL +5% — Solid retail performance driven by North America and resilience in W. Europe, encouraging signs in APAC, esp.
Slide 34: Bottega Veneta Key Figures
KEY FIGURES In €m FY 23 FY 22 Change Revenue 1,645 1,740 -5% Recurring operating income 312 366 -15% Margin (%) 19.0% 21.0% -2.0pt Gross CAPEX 105 92 +15% As % of revenue 6.4% 5.3% +1.1pt • RECURRING OPERATING MARGIN DOWN ON INVESTMENTS — Gross margin up on product, channel mix and pricing — Strong
Slide 35: Other Houses
Y) Oo Ww Ww a —) FO Or
Slide 36: Other Houses FY Revenue: -9% Reported, -8% Comparable
OTHER HOUSES FY 23 REVENUE: -9% REPORTED, -8% COMPARABLE (in €m, and YoY comparable growth in %) 3,874 +3% 3,514 -29% -7% 72% of sales FY 22 Retail Wholesale Royalties FY 23 and others • Q4 RETAIL UP 4% — All Houses up except Balenciaga — Drag of wholesale (-30%) • SOFT LUXURY IN Q4 — Balenciaga: no
Slide 37: Other Houses Key Figures
OTHER HOUSES KEY FIGURES In €m FY 23 FY 22 Change Revenue 3,514 3,874 -9% Recurring operating income 212 558 -62% Margin (%) 6.0% 14.4% -8.4pt Gross CAPEX 247 221 +12% As % of revenue 7.0% 5.7% +1.3pt • STRONG OPERATING DELEVERAGE — Unsupportive topline trends esp. in H2 — Lower fixed-cost absorptio
Slide 38: Kering Eyewear & Corporate
KERING EYEWEAR C O R P O R AT E
Slide 39: Kering Eyewear and Corporate
KERING EYEWEAR AND CORPORATE KERING EYEWEAR FOCUS KEY FIGURES (€M, and YoY growth in %) +35% €M FY 23 FY 22 +25% 1,502 Revenue 1,568 1,139 Kering Eyewear 1,502 1,115 Other 66 24 +10% 1,115 Recurring operating income (7) (88) Kering Eyewear 276 203 (as a % of revenue) 18.4% 18.2% Corporate & other (2
Slide 40: Financial Performance
FINANCIAL PERFORMANCE In €m FY 2023 FY 2022 Revenue 19,566 20,351 Gross margin 14,927 15,198 Recurring operating income 4,746 5,589 Other non-recurring operating income and expenses (103) (194) Financial result (410) (260) Income tax expense (1,163) (1,420) Share in earnings of equity-accounted comp
Slide 41: Free Cash Flow from Operations
FREE CASH FLOW FROM OPERATIONS FY 2023 FY 2023 FY 2022 Excl. real estate In €m acquisition and disposal Cash flow before taxes, dividends and interests 6,289 6,289 6,926 Change in working capital requirement (331) (396) (902) Income tax paid (1,425) (1,434) (1,746) Net cash flow from operating activ
Slide 42: Change in Net Financial Debt
CHANGE IN NET FINANCIAL DEBT FY 2023 NET DEBT* BRIDGE In €m and Net Debt / EBITDA ratio +5,483 8,504 -236 +1,030 1.3x 2,306 +1,754 +150 0.3x +1,338 -3,321 Net debt at FCF from Real estate Dividends paid Net interest paid Lease Net financial Disposal of Net debt at Dec. 31, 2022 operations excl. acqu
Slide 43: Balance Sheet: Healthy Financial Structure
BALANCE SHEET: HEALTHY FINANCIAL STRUCTURE INVENTORIES CONDENSED BALANCE SHEET In €m €4,550M 41,367 41,367 NET DEBT-TO- RECEIVABLES EQUITY RATIO 16,010 Equity 53% €1,151M Non-current assets 29,437 CAPITAL PAYABLES EMPLOYED €24,514M €2,200M 16,726 Non-current liabilities OPERATING WORKING CAP Current
Slide 44: Dividend Stable YoY
DIVIDEND STABLE YOY DIVIDEND PER SHARE 14.00 14.00* (In €) 12.00 8.00 8.00 2019 2020 2021 2022 2023 *Proposed to April 25, 2024 AGM €4.50 per share interim dividend paid on January 17, 2024 €9.50 per share balance to be paid on May 6, 2024 DIVIDEND PAYOUT 213.6% 96.4% 82.1% 45.2% 50.7% 44.5% 50.0% 4
Slide 45: Conclusion
CONCLUSION — : — is b.. Mth. ‘a rT
Slide 46: Q&A
Q&A
Slide 47: Appendix
APPENDIX
Slide 48: Crafting Tomorrow's Luxury: Sustainability Progress in 2023
CRAFTING TOMORROW’S LUXURY: PROGRESSING ON OUR SUSTAINABILITY COMMITMENTS IN 2023 • 58% reduction in our environmental footprint (2015 -2023 EP&L intensity) • 97% traceability for our key raw materials • 100% renewable electricity (aligned with RE100 guidelines) CARE • Kering selected for new Scienc
Slide 49: External Recognition of Our ESG Performance
EXTERNAL RECOGNITION OF OUR ESG PERFORMANCE KERING IS THE ONLY LUXURY COMPANY SYSTEMATICALLY INCLUDED IN ALL MAIN ESG RATINGS AND RANKINGS 2023 2023 2023 Dow Jones Sustainability Indices MSCI ESG Rating CDP included in DJSI World & Europe since 2013 84/100 S&P Global Ratings AAA AAA List (3rd Textil
Slide 50: Gucci FY 2023 Revenue and Quarterly Performance
FY 2023 REVENUE €9,873m -6% REPORTED, -2% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION At YE 23 (net change vs. YE 22) RoW Western Europe RoW Western Europe 68 (+4 net) 103 (0 net) 7% 24% Asia Pacific North America Asia Pacific 183 (+2 net) 538 39% 112 (+5 net) North America 23% J
Slide 51: Saint Laurent FY 2023 Revenue and Quarterly Performance
FY 2023 REVENUE €3,179m -4% REPORTED, -1% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION At YE 23 (net change vs. YE 22) RoW RoW 26 (+3 net) Western Europe 8% Western Europe 69 (+12 net) 31% Asia Pacific Asia Pacific 114 (+5 net) 308 29% Japan North America Japan North America 5% 27
Slide 52: Bottega Veneta FY 2023 Revenue and Quarterly Performance
FY 2023 REVENUE €1,645m -5% REPORTED, -2% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION At YE 23 (net change vs. YE 22) RoW Western Europe RoW 23 (+3 net) 59 (+4 net) 7% Western Europe 29% Asia Pacific North America Asia Pacific 114 (+4 net) 288 34% 48 (+9 net) Japan Japan 44 (-3 n
Slide 53: Other Houses FY 2023 Revenue and Quarterly Performance
OTHER HOUSES FY 2023 REVENUE €3,514m -9% REPORTED, -8% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION At YE 23 (net change vs. YE 22, incl.scope) RoW Western Europe RoW 31 (+1 net) 131 (-1 net) 7% Western Europe 32% Asia Pacific 618 North America Asia Pacific 287 (+25 net) 82 (+7 ne
Slide 54: Recurring Operating Income
RECURRING OPERATING INCOME In €m FY 23 FY 22 Reported change % Gucci 3,264 3,732 -13% Saint Laurent 969 1,019 -5% Bottega Veneta 312 366 -15% Other Houses 212 558 -62% Kering Eyewear and Corporate (7) (88) +92% Eliminations (4) 2 n.a. Kering 4,746 5,589 -15% 08.02.2024 54
Slide 55: EBITDA
EBITDA In €m FY 23 FY 22 Reported change % Gucci 3,999 4,416 -9% Saint Laurent 1,219 1,251 -3% Bottega Veneta 494 541 -9% Other Houses 585 888 -34% Kering Eyewear and Corporate 276 157 +75% Eliminations (4) 2 n.a. Kering 6,569 7,255 -9% 08.02.2024 55
Slide 56: Net Financial Costs and Income Tax
NET FINANCIAL COSTS AND INCOME TAX In €m FY 23 FY 22 Cost of net debt (108) (47) Other financial income and expenses (151) (89) Total financial result (excluding leases) (259) (136) Interest expense on lease liabilities (151) (124) Financial result (410) (260) FY 23 FY 22 Income tax expense on recur
Slide 57: Balance Sheet
BALANCE SHEET In €m Dec. 31, 2023 Dec. 31, 2022 Goodwill, brands and intangible Assets 15,290 11,410 Lease right-of-use Assets 4,984 4,929 Property, plant and equipment 5,341 3,388 Investments in equity-accounted companies 1,750 49 Net other Non-current Assets (Liabilities) (27) 753 Non-current leas
Slide 58: Kering Houses
Gucci • Saint Laurent • Bottega Veneta • Balenciaga • Alexander McQueen • Brioni Boucheron • Pomellato • Dodo • Qeelin • Ginori 1735 Kering Eyewear • Kering Beauté
Slide 59: a Cuusg olin
a Cuusg olin