Kering Sa · EURONEXT:KER
Kering Sa — FY2015 Earnings Presentation
44 slides from Kering Sa's earnings presentation, May 2016
Slide 1: Investor Presentation May 2016
INVESTOR PRESENTATION M AY 2 0 1 6
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 projections and forecasts. They express objectives based on current assessments and estimates of the
Slide 3: Empowering Premium Brands
EMPOWERING PREMIUM BRANDS A world leader in apparel and accessories, developing an ensemble of powerful brands Kering Luxury Kering Sport & Lifestyle 4
Slide 4: INVESTOR PRESENTATION
INVESTOR PRESENTATION 5
Slide 5: 2015 Operating Performance
2015 OPERATING PERFORMANCE GROUP REVENUE DYNAMICS GROUP REVENUE BREAKDOWN Change in % By region, and comparable growth in % FY 13 FY 14 FY 15 RoW 10% (+3%) Western 15.4% Europe 31% (+10%) Asia Pacific FY15 revenue 4.5% 4.6% 26% (-1%) €11.6bn 4.0% 4.0% 0.1% Comparable growth * Reported growth Japan N
Slide 6: 2015 Operating Performance
2015 OPERATING PERFORMANCE GROUP RECURRING OPERATING INCOME GROUP EBITDA In €m, change and recurring operating margin in % In €m, change and EBITDA margin in % +3% -1% 1,664 -44 +65 2,056 +27 1,647 -5% +6% +3% 1,991 0 16.6% 14.2% 17.8% 19.8% 2014 H1 change H2 change 2015 2014 H1 change H2 change 201
Slide 7: Our Strategic Vision: Four Pillars
OUR STRATEGIC VISION: FOUR PILLARS VALUE CREATION BY 1 MULTIBRAND MODEL 2 ORGANIC GROWTH 3 GROUP AND BRANDS • Balanced portfolio: • Edge provided by integrated, - of complementary brands • Foundation: specialized group (industrial Secular growth of our markets operations, logistics, real - built thr
Slide 8: Four Pillars: Multibrand Model
OUR STRATEGIC VISION: FOUR PILLARS 1 MULTIBRAND MODEL PHASE I CONSTRUCTION • Balanced portfolio: SO FT LUXURY HARD LUXURY SPO RT&LI FESTYLE - of complementary brands - built through acquisitions and Flagship brand Gucci Boucheron developed through organic Pomellato Generalist Jewelry growth Dodo Pum
Slide 9: Four Pillars: Organic Growth
OUR STRATEGIC VISION: FOUR PILLARS 2 ORGANIC GROWTH CAPITAL LEVER ACCELERATOR BRAND ATTRACTIVENESS SAME-STORE PERFORMANCE ONLINE PRESENCE • Creation: • Develop productivity and sales energy, audacity density • A fundamental vector • Optimize in-store product to build, disseminate & maintain • Produc
Slide 10: Four Pillars: Value Creation
OUR STRATEGIC VISION: FOUR PILLARS 3 VALUE CREATION VALUE CREATION Focus on organic growth REVENUE Slower network expansion Optimization of geo-pricing OPERATIONS Higher store productivity Improved RETURN Supply Chain Management return on Adaptation of organizations invested capital & ge
Slide 11: Four Pillars: Sustainability
OUR STRATEGIC VISION: FOUR PILLARS 4 SUSTAINABILITY AMBITIOUS 2012-2016 TARGETS 12
Slide 12: Analysis of 2015 Results
ANALYSIS OF 2015 RESULTS 13
Slide 13: Luxury Activities
LUXURY ACTIVITIES 2015 revenue: +16.4% reported; +4.1% comparable Solid operating performance X%: comparable growth Reported +7% -3% 0% 7,865 In €m 2015 change +10% +2% Revenue 7,865 +16.4% 6,759 Recurring operating income 1,708 +2.5% Recurring operating income margin 21.7% -2.9pt EBITDA 2,025 +5.5%
Slide 14: Detailed Performances of Luxury Brands
DETAILED PERFORMANCES OF LUXURY BRANDS GUCCI BOTTEGA VENETA 2015 revenue: +0.4% comparable 2015 revenue: +3.2% comparable Reported Reported In €m 2015 change In €m 2015 change Revenue 3,898 +11.5% Revenue 1,286 +13.7% Recurring operating income 1,032 -2.2% Recurring operating income 375 +4.8% Recurr
Slide 15: Sport & Lifestyle Activities
SPORT & LIFESTYLE ACTIVITIES 2015 revenue: +13.5% reported; +5.9% comparable Confirmed growth trajectory X%: comparable growth Reported In €m 2015 change +12% +9% 3,683 +6% -1% Revenue 3,683 +13.5% 3,245 +3% Recurring operating income 95 -31.1% Recurring operating income margin 2.6% -1.6pt EBITDA 16
Slide 16: Financial Performance
FINANCIAL PERFORMANCE In €m 2015 2014 11,584 10,038 Revenue Gross Margin 7,074 6,296 Recurring operating income 1,647 1,664 Other non-recurring operating income and expenses (394) (112) Net financial charges (249) (197) Corporate income tax (322) (326) Share in earnings of associates (2) (1) Net res
Slide 17: Free Cash Flow from Operations
FREE CASH FLOW FROM OPERATIONS 2014-2015 CHANGE In €m 204 -243 1,078 -349 -30 660 2014 Change from Change from Hedging Eyewear early 2015 operations (Luxury, exceptional real impact termination payment Sport, Corporate) estate operations 18
Slide 18: Change in Net Financial Debt
CHANGE IN NET FINANCIAL DEBT 2014-2015 BRIDGE In €m and net debt / EBITDA ratio 148 4,679 76 4,535 -4 4,391 -660 562 166 2.2x 2.3x 2.2x Net debt at Free cash flow Net interest paid Dividend paid Purchase of Discontinued Translation Net debt at December from and dividend Kering shares activities impa
Slide 19: 2015 Balance Sheet
2015 BALANCE SHEET Healthy financial structure CONDENSED BALANCE SHEET LIQUIDITY OVERVIEW (in €m) €23.8bn 1,770 €11.6bn Equity Non-current €18.5bn assets €3.1bn Non-current liabilities 693 639 €3.3bn 593 Current 536 liabilities 448 Current €4.2bn Gross debt assets €5.8bn Cash €1.1bn Actif Assets Pas
Slide 20: Unchanged Dividend
UNCHANGED DIVIDEND DIVIDEND PER SHARE (in €) 4.00 4.00 3.75 3.75 3.50 2011 2012 2013 2014 2015* DIVIDEND PAYOUT (in %) 102.2% 59.8% 61.6% 64.0% 59.4% 49.6% 41.8% 42.9% 37.3% 38.5% 2011** 2012** 2013** 2014 2015* %%du ofRNPG poursuivi recurring courant net income, group share %%du ofcash flow cash av
Slide 21: Focus on Gucci and Bottega Veneta
FOCUS ON GUCCI AND BOTTEGA VENETA 22
Slide 22: Gucci Update: Rejuvenation on Track
GUCCI UPDATE: REJUVENATION ON TRACK 2016 2015 2015 2016 2015 2017+ 2016 PRODUCT BRAND BRAND POSITIONING PERCEPTION EXPERIENCE • Simplified offering • New, energetic creative vision • New online presence, coherent & integrated • High-impact product identity • Contemporary design • Deployment of new s
Slide 23: Gucci Update: Rejuvenation on Track
GUCCI UPDATE: REJUVENATION ON TRACK STREAMLINED OFFERING EXPANDED CLIENT BASE (# SKUs, Leather Goods, Shoes, RTW, index 100) FASHION AUTHORITY RESTORED • Local clientele returning in our stores: France, Italy, -21% Germany, UK… -32% • New, younger clients -60% • Regained sales momentum: RTW, Shoes •
Slide 24: Gucci Highlights
GUCCI HIGHLIGHTS S/S 2016 NEWNESS IN THE STORES SUCCESSFUL F/W 2017 FASHION SHOWS Shinsegae Gangnam, Seoul NEW COLLABORATIONS WITH KEY PRE-FALL 2016 ADVERTISING CAMPAIGN DEPARTMENT STORES NEW STORE CONCEPT ROLL- OUT UPDATING TOUCHPOINTS Redesigned Gucci App website launch redesigned Children floor a
Slide 25: Bottega Veneta Highlights
BOTTEGA VENETA HIGHLIGHTS SS 2016 FASHION COLLECTION - HANDBAGS SS 2016 FASHION COLLECTION - SHOES WOMEN HANDBAGS STYLES CRAFTSMANSHIP STYLES BUCKET BAG INTARSIA SANDALS (Nappa and Crocodile) SHOULDER BAG BEVERLY BAG SS 2016 CRUISE COLLECTION SANDALS SS 2016 CRUISE COLLECTION OLIMPIA BAG ESPADRILLAS
Slide 26: Analysis of Q1 Revenue
ANALYSIS OF Q1 REVENUE 27
Slide 27: Q1 2016 Revenue: 2,724 M€
Q1 2016 REVENUE: 2,724 M€ +2.7% reported; +4.0% comparable REVENUE BY DIVISION GROUP REVENUE BREAKDOWN In €m By region, and comparable growth in % Change (%) RoW 11% (+7%) Western Q1 16 Europe Revenue Reported Comparable (*) 31% (+10%) Luxury 1,804 +2.8% +2.6% Asia Pacific Sport & Lifestyle 913 +2.6
Slide 28: Luxury Activities Q1 2016
LUXURY ACTIVITIES Q1 2016 revenue: 1,804 M€ +2.8% reported; +2.6% comparable REVENUE CHANGE BY REGION AND CHANNEL REVENUE BREAKDOWN BY REGION ( i n € m , a n d c o m p a r a b l e g r o w t h i n %) ( o n t o t a l Q 1 r e v e n u e , i n %) RoW +3% -16% 1,804 7% +3% 1,754 +0% Western Europe 32% Asi
Slide 29: Sport & Lifestyle Activities Q1 2016
SPORT & LIFESTYLE ACTIVITIES Q1 2016 revenue: 913 M€ +2.6% reported; +7.0% comparable REVENUE CHANGE BY REGION AND CHANNEL REVENUE BREAKDOWN BY REGION ( i n € m , a n d c o m p a r a b l e g r o w t h i n %) ( o n t o t a l Q 1 r e v e n u e , i n %) RoW +11% +7% 19% +1% +8% 913 +9% 890 Asia Pacific
Slide 30: Focus on Governance and Sustainability
F O C U S O N G O V E R N A N C E A N D S U S TA I N A B I L I T Y 31
Slide 31: Governance
GOVERNANCE Operations of the board of directors 11 6 7 5 Directors Independent Women Committees Audit committee Strategy and development – Jean-Pierre DENIS (Chairman)* committee – Patricia BARBIZET – François-Henri PINAULT (Chairman) – Laurence BOONE* – Daniela RICCARDI* – Sophie L’HELIAS* Board of
Slide 32: Sustainability
SUSTAINABILITY Vision and targets 33
Slide 33: Sustainability: Sustainable Sourcing Targets
SUSTAINABILITY Share of sustainable sourcing: significant targets already achieved L E AT H E R PVC PRECIOUS SKINS FUR GOLD PAP E R & PAC K A G I N G As of 31 December 2015 34
Slide 34: Sustainability: Targets Achieved
SUSTAINABILITY Significant targets already achieved As of 31 December 2015 35
Slide 35: 2014 E-P&L Highlights
2014 E-P&L HIGHLIGHTS Discover more: www.kering.com/en/sustainability/epl 36
Slide 36: Appendices
APPENDICES 37
Slide 37: 2015 Revenue
2015 REVENUE Change In €m, continuing operations 2015 2014 €m % Gucci 3,898.0 3,497.2 400.8 +11.5% Bottega Veneta 1,285.8 1,130.5 155.3 +13.7% Saint Laurent 973.6 707.3 266.3 +37.7% Other brands 1,707.9 1,423.6 284.3 +20.0% Luxury 7,865.3 6,758.6 1,106.7 +16.4% Puma 3,403.4 2,990.2 413.2 +13.8% Othe
Slide 38: 2015 Recurring Operating Income
2015 RECURRING OPERATING INCOME Change In €m 2015 2014 €m % Gucci 1,032.3 1,056.0 (23.7) -2.2% Bottega Veneta 374.5 357.2 17.3 +4.8% Saint Laurent 168.5 105.1 63.4 +60.3% Other brands 132.7 147.3 (14.6) -9.9% Luxury 1,708.0 1,665.6 42.4 +2.5% Puma 92.4 128.0 (35.6) -27.8% Other brands 2.4 9.5 (7.1)
Slide 39: 2015 EBITDA
2015 EBITDA Change In €m 2015 2014 €m % Gucci 1,206.1 1,199.2 6.9 +0.6% Bottega Veneta 413.8 388.8 25.0 +6.4% Saint Laurent 207.9 130.9 77.0 +58.8% Other brands 197.6 200.3 (2.7) -1.3% Luxury 2,025.4 1,919.2 106.2 +5.5% Puma 150.7 178.6 (27.9) -15.6% Other brands 10.3 12.6 (2.3) -18.3% Sport & Lifes
Slide 40: 2015 Net Financial Costs and Income Tax
2015 NET FINANCIAL COSTS AND INCOME TAX In €m 2015 2014 Cost of net debt (129) (151) Other financial income and expenses (120) (46) Financial costs (net) (249) (197) In €m 2015 2014 Tax on recurring income (337) (268) Tax on non-recurring items 15 (58) Total tax charge (322) (326) Effective tax rate
Slide 41: 2015 Free Cash Flow from Operations
2015 FREE CASH FLOW FROM OPERATIONS In €m 2015 2014 Cash flow before taxes, dividends and interests 1,845 1,844 Change in working capital requirement (excluding taxes) (219) (160) Corporate income tax paid (331) (423) Net cash flow from operating activities 1,295 1,261 Acquisition of fixed operating
Slide 42: 2015 Condensed Consolidated Balance Sheet
2015 CONDENSED CONSOLIDATED BALANCE SHEET 2015 2014 In €m Goodwill, brands and other intangible assets - net 15,044 14,788 Other net non-current assets 569 310 Net current assets 1 071 924 Provisions (382) (394) Capital Employed 16,302 15,628 Net assets held for sale 0 25 Shareholders’ Equity 11,623
Slide 43: Kering brand list
Gucci • Bottega Veneta • Saint Laurent • Alexander McQueen • Balenciaga Stella McCartney • Christopher Kane • Brioni • Girard-Perregaux • JeanRichard • Boucheron • Pomellato Dodo • Qeelin • Ulysse Nardin • PUMA • Cobra Puma Golf • Volcom
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