Kering Sa · EURONEXT:KER
Kering Sa — Investor Presentation (May 2024)
67 slides from Kering Sa's investor presentation, May 2024
Slide 1: Investor Presentation May 2024
INVESTOR PRESENTATION MAY 2024
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: Kering at a Glance
KERING AT ‘A GLANCE
Slide 4: FY23 Key Figures
FY23 KEY FIGURES REVENUE RECURRING OPERATING INCOME NET INCOME €4.7bn €2,983m €19.6bn 24.3% margin Attributable to the Group FCF FROM OPERATIONS PEOPLE SUSTAINABILITY €2.0bn 49,000 -58% as of Dec. 31, 2023 Environmental footprint* €3.3bn (excl. real estate) 57% women managers CDP AAA List Climate –
Slide 5: Kering Has Become a Pure Luxury Player
KERING HAS BECOME A PURE LUXURY PLAYER TRANSFORMATION TIMELINE OVERVIEW CREATING AND SHARING VALUE FOR THE LONG TERM PPR acquires PPR becomes Launch of Kering 42% in Gucci Kering Beauté, acquisitions of Acquisitions of Acquisitions of Creed, and 30% stake • Over the past years, Kering has transforme
Slide 6: Developing a Complementary Ensemble of Iconic Luxury Houses
DEVELOPING A COMPLEMENTARY ENSEMBLE OF ICONIC LUXURY HOUSES OUR HOUSES DIFFERENT SCALES AND MATURITY (FY23 Revenue and Recurring Operating income in €m) Soft Luxury Hard Luxury Adjacent businesses 24.3% 33.1% 30.5% 6.0% 19.0% 18.4% Other * Houses 2021 Revenue Rec. Op. income XX% Rec. Op. margin * Ke
Slide 7: Expanding into High-Growth Adjacent Segments
EXPANDING INTO HIGH-GROWTH ADJACENT SEGMENTS • Successful dev elopment of a pr ofitable €1.5bn L u xury Eyewear s e g ment t h r o ugh o r g anic g r o wt h , p a r t ners hips a n d a c q uis it ions • Th e eyewear seg ment en h ances b ran d eq u ity and pr ov ides an entry point to the Luxury uni
Slide 8: Expanding into High-Growth Adjacent Segments: Beauty
EXPANDING INTO HIGH-GROWTH ADJACENT SEGMENTS LAUNCH EARLY 2023 Feb. 2023 Oct. 2023 RECRUITMENT OF A TEAM OF EXPERTS Creed acquisition START OF PRODUCT DEVELOPMENT ACQUISITION OF CREED • Launch of Kering Beauté early 2023 to further develop the Beauty category of our Houses, a natural extension of th
Slide 9: Investing in Growth Platforms with Innovation at Our Core
INVESTING IN GROWTH PLATFORMS WITH INNOVATION AT OUR CORE PRODUCTION & MANUFACTURING A DEMAND-DRIVEN SUPPLY CHAIN DIGITAL CAPABILITIES • Strategic parts of the production • AI p o we r e d m o d els t o i mp ro ve s h o rt- • Real-time access to a single source of such as prototyping, sampling and t
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 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 12: Our Ongoing Journey: Going Forward
OUR ONGOING JOURNEY GOING FORWARD WE WILL CONTINUE INVESTING IN AND WE WILL REINFORCE EXCLUSIVITY COLLECTIONS & PRODUCTS • Leveraging and balancing on heritage & fashion components • Sophistication of the offer (design, materials and categories) • Segmentation through product mix and pricing D I S T
Slide 13: 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 14: Our 2024 Priorities
OUR 2024 PRIORITIES
Slide 15: 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 16: Taking Gucci to Its Next Stage
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 Investor Presentation - May 2024 16
Slide 17: 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 18: The Beauty Roadmap
THE BEAUTY ROADMAP 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 DESIR
Slide 19: Q1 Revenue
Q1 24 REVENUE
Slide 20: Q1 Group Revenue
Q1 24 GROUP REVENUE KEY HIGHLIGHTS REVENUE CHANGE (in €m and comparable change YoY) • REVENUE -11% REPORTED, -10% COMPARABLE – ADVERSE MACRO BACKDROP – W EAK TRAFFIC W EIGHING ON RETAIL -11% reported – W HOLESALE DOW N 5,077 – FX HEADWIND, POSITIVE SCOPE FROM CREED +2% 4,504 -10% -3% • REGIONAL TREN
Slide 21: Q1 Group Revenue by Segment and Region
Q1 24 GROUP REVENUE REVENUE BREAKDOWN BY SEGMENT REVENUE BREAKDOWN BY REGION (in €m) (as a % of Q1 24 total revenue and YoY reported change) Change (%) Q1 24 Q1 23 RoW Western Europe Revenue Revenue Reported Comp. 9% (+2pt) 27% (+2pt) Gucci 2,079 2,616 -21% -18% Saint Laurent 740 806 -8% -6% Bottega
Slide 22: Q1 Group Revenue by Channel and Region
Q1 24 GROUP REVENUE BY CHANNEL AND REGION -11% R E T AI L I N C L . E - C O M M Y o Y D I R E C T L Y O P E R AT E D S T O R E S 1,781* 74% WESTERN NORTH JAPAN ASIA ROW EUROPE AMERICA PACIFIC -9% -11% +16% -19% +6% WHOLESALE WHOLESALE ROYALTIES 26% LUXURY BRANDS KERING EYEWEAR & OTHER W H O L E S AL
Slide 23: Gucci Q1 Revenue
Q1 24 REVENUE: -21% REPORTED, -18% COMPARABLE (in €m, and YoY comparable growth in %) 2,616 +5% 2,079 -19% -7% 90% of sales Q1 23 Retail Wholesale Royalties Q1 24 and others • TRANSITION IN COLLECTIONS — Weak traffic, Asia Pacific the main drag — New collections ramping up as planned, representing l
Slide 24: Saint Laurent Q1 Revenue
Q1 24 REVENUE: -8% REPORTED, -6% COMPARABLE (in €m, and YoY comparable growth in %) 806 -4% +27% 740 -25% 78% of sales Q1 23 Retail Wholesale Royalties Q1 24 and others • GOOD RESILIENCE IN RETAIL — Sequential improvement in W.Europe, N.America and Japan, challenging market conditions in Asia Pacifi
Slide 25: Bottega Veneta Q1 Revenue
Q1 24 REVENUE: -2% REPORTED, +2% COMPARABLE (in €m, and YoY comparable growth in %) +9% 395 +4% 388 -25% 84% of sales Q1 23 Retail Wholesale Royalties Q1 24 and others • STRONG RETAIL PERFORMANCE — DD growth in North America, W. Europe and Middle East, resilience in Asia Pacific — Acclaimed collecti
Slide 26: Other Houses Q1 Revenue
OTHER HOUSES Q1 24 REVENUE: -7% REPORTED, -6% COMPARABLE (in €m, and YoY comparable growth in %) 890 +3% 824 -25% -10% 72% of sales Q1 23 Retail Wholesale Royalties Q1 24 and others • RETAIL UP 3%, WHOLESALE DOWN 25% • SOFT LUXURY — Balenciaga: retail trends improving in W.Europe and Japan; N.Americ
Slide 27: Kering Eyewear and Corporate
KERING EYEWEAR AND CORPORATE Q1 24 REVENUE (in €m, and YoY growth in %) +7% +73 536 +8% 463 433 -1% Q1 23 Comparable FX Q1 24 Other Q1 24 Kering Kering Kering Eyewear Eyewear Eyewear and Corporate • STRONG START TO THE YEAR IN EYEWEAR — Growth across key brands, Europe and Asia Pacific leading the w
Slide 28: FY 23 Results
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Slide 29: 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 30: 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 31: 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 32: ESG Update
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Slide 33: The Board of Directors Following 2024 AGM
THE BOARD OF DIRECTORS FOLLOWING 2024 AGM CHAIRMAN and CEO 13 Directors François-Henri Pinault 7 INDEPENDENT DIRECTORS 64 % independent(1) Véronique Weill Serge Weinberg Maureen Chiquet Yonca Dervisoglu Rachel Duan Dominique D’Hinnin Giovanna Melandri Lead Independent Director Chair of the Chair of
Slide 34: Materiality: Targeting Our Main Priorities
MATERIALITY: TARGETING OUR MAIN PRIORITIES OUR CONTRIBUTION TO THE UNITED NATIONS SDG • Results of the 2020/2021 materiality assessment confirmed that Kering’s strategic pillars are consistent with external stakeholders’ expectations • 2025 Sustainability Strategy dashboard shows progress made in pu
Slide 35: 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 36: The EP&L, Cornerstone of Our Environmental Approach
THE EP&L, CORNERSTONE OF OUR ENVIRONMENTAL APPROACH PROGRESS TOWARDS 2025 GOALS → In 2022, Kering achieved its EP&L target of 40% reduction 4 years ahead of time 84% of our impacts fall outside of our own operations → In 2023, Kering confirmed its trajectory to reduce its environmental footprint dem
Slide 37: Building Responsible Supply Chains
BUILDING RESPONSIBLE SUPPLY CHAINS OUR SUPPLY CHAIN STRUCTURE Almost 92% suppliers in Europe, predominantly in Italy strong government presence, comprehensive and mature labor law, highly developed social dialogue 4,433 4,559 Active suppliers in our audits in 2023 database (comprehensive and (Tier
Slide 38: 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, through the
Slide 39: Acting for the Green Transition of Our Industry
ACTING FOR THE GREEN TRANSITION OF OUR INDUSTRY THE REGENERATIVE FUND FOR NATURE THE CLIMATE FUND FOR NATURE • Launched in January 2021 by Kering in partnership with the • Launched in December 2022 by Kering, supported by L’Occitane Group NGO Conservation International and managed by Mirova, a Natix
Slide 40: Coming Full Circle: Our Circularity Approach
COMING FULL CIRCLE : OUR CIRCULARITY APPROACH 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 HOL
Slide 41: Kering People
KERING PEOPLE 48,964 PEOPLE 37% 24% Men Support & logistics W ORK ALL PLACE 63% 21% 55% Women Production Sales 14% 53% 33% 43% 14% 1% Men Generation Z Baby Americas EMEA APAC (>1995) Boomers (1945-1960) MANAGERS AGE 59% 26% Generation Y Generation X 57% 13,403 11,275 (1981-1995) (1961-1980) Women hi
Slide 42: Appendix – Q1 Revenue
APPENDIX – Q1 24 REVENUE
Slide 43: Gucci Q1 2024 Revenue
Q1 2024 REVENUE €2,079m -21% REPORTED, -18% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION As of March 31, 2024 (net change vs. YE 23) RoW Western Europe RoW Western Europe 65 (-3 net) 103 (0 net) 8% 23% Asia Pacific North America Asia Pacific 184 (+1 net) 534 39% 111 (-1 net) North
Slide 44: Saint Laurent Q1 2024 Revenue
Q1 2024 REVENUE €740m -8% REPORTED, -6% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION As of March 31, 2024 (net change vs. YE 23) RoW RoW 27 (+1 net) Western Europe 9% Western Europe 70 (+1 net) 31% Asia Pacific Asia Pacific 114 (0 net) 311 30% Japan North America Japan North Ameri
Slide 45: Bottega Veneta Q1 2024 Revenue
Q1 2024 REVENUE €388m -2% REPORTED, +2% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION As of March 31, 2024 (net change vs. YE 23) RoW Western Europe RoW 23 (0 net) 62 (+3 net) 10% Western Europe 25% Asia Pacific North America Asia Pacific 115 (+1 net) 292 34% 49 (+1 net) Japan Japa
Slide 46: Other Houses Q1 2024 Revenue
OTHER HOUSES Q1 2024 REVENUE €824m -7% REPORTED, -6% COMPARABLE DIRECTLY OPERATED STORES REVENUE BREAKDOWN BY REGION As of March 31, 2024 (net change vs. YE 23, incl. scope) RoW Western Europe RoW 34 (+3 net) 133 (+2 net) 8% Western Europe 29% Asia Pacific 626 North America Asia Pacific 291 (+4 net)
Slide 47: Appendix – FY Results
APPENDIX – FY 23 RESULTS
Slide 48: Gucci
Slide 49: Gucci FY Revenue
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 50: 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 51: Saint Laurent
SAINT LAURENT
Slide 52: Saint Laurent FY Revenue
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 53: 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 54: Bottega Veneta
BOTTEGA VENETA
Slide 55: Bottega Veneta FY Revenue
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 56: 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 57: Other Houses
OTHER HOUSES
Slide 58: Other Houses FY Revenue
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 59: 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 60: Kering Eyewear Corporate
KERING EYEWEAR C O R P O R AT E
Slide 61: 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 62: 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 63: 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 64: 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 65: 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 66: Kering Houses
Gucci • Saint Laurent • Bottega Veneta • Balenciaga • Alexander McQueen • Brioni Boucheron • Pomellato • Dodo • Qeelin • Ginori 1735 Kering Eyewear • Kering Beauté
Slide 67: Empowering Imagination