Kering Sa · EURONEXT:KER
Kering Sa — H1 2015 Earnings Presentation
43 slides from Kering Sa's earnings presentation, September 2015
Slide 1: Investor Presentation September 2015
2015I n v e s t o r P r e s e n t a t i o n September 2015
Slide 2: 2
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Slide 3: 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 4: Kering: Empowering Premium Brands
Investor Presentation Kering Empowering Premium Brands 4
Slide 5: Empowering premium brands
Investor Presentation Empowering premium brands ∞ A world leader in apparel and accessories, developing an ensemble of powerful brands Kering Luxury Kering Sport & Lifestyle 5
Slide 6: Analysis of 2015 first-half results
Investor Presentation Analysis of 2015 first-half results 6
Slide 7: Key highlights
2015 first-half results Key highlights ∞ H1 2015: Solid performances in an environment that remains volatile – Group revenues up 17% as reported and up 3.5% comparable, with sharp contrasts between quarters – Positive FX movements boosting reported sales but mixed impact on Group H1 results due to h
Slide 8: Operating performances
2015 first-half results Operating performances Group H1 Revenue: +17% reported, + 3.5% comparable Group H1 Revenue by quarter (% in comparable growth) In €m Change (%) +8.0% +7.7% +7.1% +5.3% +3.5% +3.7% Revenue Reported Comparable (*) +2.8% Luxury 3,762 +17.8% +2.8% -0.6% Sport & Lifestyle 1,731 +1
Slide 9: Luxury activities H1 15 revenue: +2.8% comparable
Luxury activities H1 15 revenue: +2.8% comparable Resilient H1 on sharp Q2 rebound X%: comparable growth +7% -7% Reported -1% 3,762 +2% In €m H1 15 change (*) +12% Revenue 3,762 +17.8% 3,194 Retail (72% of H1 15 revenue) Recurring operating income 806 +0.0% Comp growth (%) Q2 15 H1 15 Recurring oper
Slide 10: Gucci H1 15 revenue: -1.6% comparable
H1 15 revenue: -1.6% comparable Renewed brand momentum taking shape X%: comparable growth Reported Retail (84% of sales): +3% In €m H1 15 change -4% +10% -21% -13% 1,874 Revenue 1,874 +11.8% +6% +2% +13% 1,676 Recurring operating income 502 -4.9% Recurring operating income margin 26.8% -4.7pt EBITDA
Slide 11: Update on action plans and first achievements
Update on action plans and first achievements H1 2015 H2 2015 Timing of January / February June From end of June End of Q3/ Early Q4 collections Men & Women Fashion Show Cruise 2016 M&W Fashion Show Cruise collection F/W 15-16 collection F/W 15-16 first progressively in stores presentation products
Slide 12: Bottega Veneta H1 15 revenue: +6.4% comparable
H1 15 revenue: +6.4% comparable Another strong first half, fueled by Western Europe X%: comparable growth Reported Retail (83% of sales): +7% In €m H1 15 change +2% +17% 629 -8% +39% +11% Revenue 629 +19.7% -1% +44% 525 Recurring operating income 180 +10.4% Recurring operating income margin 28.6% -2
Slide 13: Saint Laurent H1 15 revenue: +24.3% comparable
H1 15 revenue: +24.3% comparable Sustained growth across the board X%: comparable growth Reported Retail (64% of sales): +26% In €m H1 15 change +22% +22% 443 +15% -12% +32% +45% Revenue 443 +38.2% +38% 321 Recurring operating income 61 +47.9% Recurring operating income margin 13.7% +1.0pt EBITDA 80
Slide 14: Other Luxury brands H1 15 revenue: +1.0% comparable
Other Luxury brands H1 15 revenue: +1.0% comparable Good operating performances in Soft Luxury, but tough first half in Watches X%: comparable growth +13% -6% Reported +11% +10% 815 In €m H1 15 change (*) +8% Revenue 815 +21.5% 671 Retail (39% of H1 15 revenue) Recurring operating income 64 -14.1% C
Slide 15: Sport & Lifestyle H1 15 revenue: +5.3% comparable
Sport & Lifestyle H1 15 revenue: +5.3% comparable Sustained growth trajectory X%: comparable growth Reported In €m H1 15 change +13% +11% 1,731 +4% +1% 1,499 +0% Revenue 1,731 +15.5% Recurring operating income 38 -45.8% Recurring operating income margin 2.2% -2.5pt o/w Puma 41 o/w Other Brands (3) P
Slide 16: Financial performance
Financial performance In €m H1 15 H1 14 (*) Recurring operating income 773 817 Other non-recurring operating income and expenses (42) 1 Net financial charges (**) (136) (104) Corporate income tax (141) (146) Share in earnings of associates (3) (2) Net loss from discontinued operations (11) (363) Con
Slide 17: Free cash flow from operations
Free cash flow from operations H1 15 Free cash flow bridge (change in €m) 635 -326 160 -80 -90 309 299 -211 -30 58 Free cash flow H1 14 non- FCF H1 14 excl. Luxury FCF SLS FCF change Other operations FCF H1 15 before H1 15 hedge Safilo early Free cash flow from operations recurring cash real estate
Slide 18: Change in net financial debt
Change in net financial debt H1 15 net financial debt bridge (in €m) 209 5,337 85 81 5,043 537 4,391 -58 92 Net debt at Free cash flow Net interest paid Dividends paid Purchases of Financing related Other movements Net debt at December from operations and dividend Kering shares to discontinued (tran
Slide 19: Conclusion and Outlook
Investor Presentation Conclusion and Outlook 19
Slide 20: Conclusion & Outlook
2015 first-half results Conclusion & Outlook ∞ Commendable performance in H1 2015 – Sharp Q2 top-line rebound; solid operating profitability in Luxury ∞ Gucci on track to deploy new creative vision and execute action plans – New dynamic and promising developments – Contemporary vision expressed acro
Slide 21: Principles for Sustainable Investing and Corporate Governance overview
Investor Presentation Principles for Sustainable Investing and Corporate Governance overview 21
Slide 22: Foreword
François-Henri Pinault Foreword 22
Slide 23: Operation of the Board of Directors
Governance Operation of the Board of Directors 11 5 4 5 Directors Independent Women Committees Audit committee Strategy and – Jean-Pierre DENIS (Chairman)* development committee – Patricia BARBIZET (Chairwoman) – Patricia BARBIZET – Yseulys COSTES* – Yseulys COSTES* Board of – – Philippe LAGAYETTE*
Slide 24: Sustainability: Vision and targets
Sustainability Vision and targets 24
Slide 25: Vision and targets: EP&L
Sustainability Vision and targets ep&l PUBLISHING A GROUP WIDE EP&L FOR ALL LUXURY AND SPORT & LIFSTYLE BRANDS BY 2016 BY 2016. 25
Slide 26: Targets: progress to date
Sustainability Targets: progress to date 26
Slide 27: Environmental Profit & Loss account
Sustainability Environmental Profit & Loss account € 27
Slide 28: Group EP&L results
KERING ENVIRONMENTAL PROFIT & LOSS Group EP&L results DISCOVER MORE www.kering.com/en/sustai nability/epl 28
Slide 29: 2015 first-half results: Appendices
2015 first-half results Appendices 29
Slide 30: H1 15 operating performances
H1 15 operating performances Reported figures In €m H1 15 H1 14 (*) Change CONTINUING OPERATIONS Revenue 5,513 4,710 +17.0% Gross profit 3,399 3,002 +13.2% Gross profit margin 61.7% 63.7% Recurring operating income 773 817 -5.4% Recurring operating income margin 14.0% 17.4% EBITDA 972 972 - EBITDA m
Slide 31: H1 15 revenue
H1 15 revenue Change In €m, continuing operations H1 15 H1 14 (*) €m % Gucci 1,874.2 1,676.3 197.9 +11.8% Bottega Veneta 629.2 525.5 103.7 +19.7% Saint Laurent 443.1 320.6 122.5 +38.2% Other brands 815.5 671.2 144.3 +21.5% Luxury 3,762.0 3,193.6 568.4 +17.8% Puma 1,601.2 1,386.1 215.1 +15.5% Other b
Slide 32: Luxury activities H1 revenue: €3,762m
Luxury activities H1 15 revenue: €3,762 m +2.8% comparable; +17.8% reported RoW Western Revenue y-o-y change 7% Europe 31% in €m % comparable % reported Q1 15 1,754 -2.6% +10.9% H1 15 Asia Pacific Q2 15 2,008 +8.0% +24.6% 32% revenue Japan 10% North America 20% Number of directly operated stores 442
Slide 33: Gucci H1 revenue: €1,874m
H1 15 revenue: €1,874 m - 1 . 6 % c o m p a r a b l e ; + 11 . 8 % r e p o r t e d RoW Western Revenue y-o-y change 7% Europe 24% in €m % comparable % reported Q1 15 869 -7.9% +3.7% H1 15 Q2 15 1,005 +4.6% +19.9% revenue Asia Pacific North America 38% 21% Japan 10% Number of directly operated stores
Slide 34: Bottega Veneta H1 revenue: €629m
H1 15 revenue: €629 m +6.4% comparable; +19.7% reported RoW 3% Western Revenue y-o-y change Europe 29% in €m % comparable % reported Q1 15 290 +3.1% +15.6% H1 15 Q2 15 339 +9.3% +23.5% revenue Asia Pacific North America 40% 13% Japan 15% Number of directly operated stores 97 100 52 53 58 59 29 28 We
Slide 35: Saint Laurent H1 revenue: €443m
H1 15 revenue: €443 m +24.3% comparable; +38.2% reported RoW Revenue y-o-y change 7% in €m % comparable % reported Western Asia Pacific Europe Q1 15 211 +21.2% +33.8% 23% H1 15 39% Q2 15 232 +27.3% +42.5% revenue Japan 7% North America 24% Number of directly operated stores 56 52 33 33 22 21 21 22 W
Slide 36: Other Luxury brands H1 revenue: €815m
Other Luxury brands H1 15 revenue: €815 m +1.0% comparable; +21.5% reported RoW Revenue y-o-y change 10% in €m % comparable % reported (*) Western Asia Pacific Europe Q1 15 384 -4.5% +14.4% 17% H1 15 45% Q2 15 432 +6.4% +28.6% revenue Japan 8% North America 20% Number of directly operated stores 111
Slide 37: Sport & Lifestyle H1 revenue: €1,731m
Sport & Lifestyle H1 15 revenue: €1,731 m +5.3% comparable; +15.5% reported RoW Revenue y-o-y change 21% in €m % comparable % reported Western Europe Q1 15 890 +3.7% +12.7% H1 15 28% Asia Pacific revenue Q2 15 841 +7.1% +18.6% 15% Japan 7% North America 29% 37
Slide 38: H1 15 recurring operating income
H1 15 recurring operating income Change In €m, continuing operations H1 15 H1 14 (*) €m % Gucci 501.6 527.6 (26.0) -4.9% Bottega Veneta 180.1 163.1 17.0 +10.4% Saint Laurent 60.5 40.9 19.6 +47.9% Other brands 63.8 74.3 (10.5) -14.1% Luxury 806.0 805.9 0.1 +0.0% Puma 40.7 70.8 (30.1) -42.5% Other bra
Slide 39: H1 15 EBITDA
H1 15 EBITDA Change In €m, continuing operations H1 15 H1 14 (*) €m % Gucci 587.1 596.4 (9.3) -1.6% Bottega Veneta 198.6 177.7 20.9 +11.8% Saint Laurent 79.6 52.3 27.3 +52.2% Other brands 95.4 99.0 (3.6) -3.6% Luxury 960.7 925.4 35.3 +3.8% Puma 68.4 95.0 (26.6) -28.0% Other brands 1.7 1.8 (0.1) -5.6
Slide 40: H1 15 net financial costs and income tax
H1 15 net financial costs and income tax In €m H1 15 H1 14 (*) Cost of net debt (64.2) (86.0) Other financial income and expenses (72.0) (18.3) Financial costs (net) (136.2) (104.3) In €m H1 15 H1 14 (*) Tax on recurring income (126.3) (129.9) Tax on non-recurring items (15.1) (16.1) Total tax charg
Slide 41: H1 15 Free cash flow from operations
H1 15 Free cash flow from operations In €m H1 15 H1 14 (*) Cash flow before taxes, dividends and interest 895 944 Change in working capital requirement (excluding taxes) (428) (261) Corporate income tax paid (148) (175) Net cash flow from operating activities 319 508 Acquisition of fixed operating a
Slide 42: H1 15 condensed consolidated balance sheet
H1 15 condensed consolidated balance sheet In €m H1 15 H1 14 (*) Goodwill, brands & other intangible assets – Net 15 100 14 361 Other net non-current assets 503 4 Net current assets 1 555 1 039 Provisions (365) (391) CAPITAL EMPLOYED 16 793 15 013 Net assets held for sale 28 (66) SHAREHOLDERS’ EQUIT
Slide 43: Empowering Imagination