I n v e s t o r P r e s e n t a t i o n. Paris October 2013

Transcription

1 2013 I n v e s t o r P r e s e n t a t i o n Paris October 2013

2 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 notably projections and forecasts. They express objectives based on current assessments and estimates of the Group s executive management which are subject to numerous factors, risks and uncertainties. Consequently, reported figures and assessments may differ significantly from projected figures. The following factors among others set out in the Reference Document (Document de Référence) filed with the French Financial Markets Authority (Autorité des Marchés Financiers- AMF) on April 18, 2013 which is available on Kering s website at may cause actual figures to differ materially from projected figures: any unfavourable development affecting consumer spending in the activities of the Group in France and abroad, notably for products and services sold by the Retail brands or for Luxury Goods, the events, crises, fears, and resulting costs of complying with environmental, health and safety regulations and all other regulations with which Group companies are required to comply; the competitive situation on each of our markets; the impact of current or future public regulations; exchange rate and other risks related to international activities; risks arising from current or future litigation. Kering gives no commitment to updating and/or revising and/or commenting any projections and forecasts, or their impact on the results and perspectives of the Group, which may be contained in this presentation. The information contained in this document have been selected by the Group s executive management to inform about the 2012 full year results and H results. This document has not been independently verified. Kering makes no representation or undertaking as to the accuracy or completeness of such information. None of the Kering or any of its affiliates representatives shall bear any liability (in negligence or otherwise) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. IN NO WAY DOES KERING ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED IN THIS PRESENTATION. READERS ARE ADVISED TO REVIEW THE COMPANY'S REFERENCE DOCUMENT AND THE COMPANY'S APPLICABLE AMF FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISION. 2

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4 Kering Empowering Imagination 4

5 I n v e s t m e n t Thesis (1/2) Unique combination Unique combination of global luxury and premium sports & lifestyle brands, enjoying: Leading positions in their respective segments Broad consumer appeal as self-fulfillment and indulgence increasingly drive buying decisions Considerable organic growth potential Management Management experienced in propelling brands and operations beyond their instinctive limits while giving them autonomy and creative freedom Central organization Central organization realigned to create value above and beyond what operating units can generate independently 5

6 I n v e s t m e n t Thesis (2/2) Human values Strong human values at the core of our success and transformation Value chain Mastering the entire value chain of our brands Flexible production and distribution infrastructure Total control over design, development and brand characteristics Financial and operational Financial and operational disciplines Relentless monitoring & challenging of business and financial plans Strong cash flow generation, robust capital structure to support longterm growth 6

7 W h o We are Young company celebrating its 50th birthday this year Longstanding heritage in specialized distribution Unique expertise in assessing consumer tastes, expanding retail concepts, developing new formats, channels and brands Entered the Luxury goods universe in 1999 with an initial stake in Gucci; Gained full control over the House and its portfolio built around it in 2004 Initiated a second strategic pillar in premium Sport & Lifestyle brands with the acquisition of a controlling interest in Puma in 2007 In 2012, we further accelerated the transformation and streamlining of our organization to enable all our brands to fully benefit from the power of the Group In 2013, we change the name of our Group, to better reflect the achievement of this transformation. In 2013, PPR becomes Kering 7

8 O u r Mission & management principles Our mission To empower our brands to reach their full global potential in a sustainable and responsible way Two coherent product areas: apparel and accessories Two fast-growing market segments: Luxury Goods and Sport & Lifestyle Our management principles Freedom within a framework Empower the development of our key assets the brands and help them reach beyond their limits We are a group and act as a group A single worldwide corporate team Kering Asia and Kering Americas to bring corporate support closer to the brands HR talent development driving the Group forward New governance Expanded Executive Committee Streamlined, more operational, closer to our customers 8

9 K e r i n g E f f e c t A better integrated Group Strategic joint venture with Yoox in Luxury Development of monobrand e-commerce sites Sustainable development guidelines Group strategies: human resources, real estate, brand marketing Shared service centers 9

10 L u x u r y d i v i s i o n Drivers of future growth and profitability Pertinent multibrand business model: Well-rounded ensemble of complementary brands Designs, manufactures and markets leather goods, shoes, ready-to-wear, jewellery & watches Highly differentiated positioning between brands, substantial organic growth potential Characterized by The exceptional quality of its products A unique talent pool, from design to craftsmanship, from marketing to retail A highly controlled distribution network and a rigorous communication policy 10

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12 S p o r t & L i f e s t y l e d i v i s i o n Drivers of future growth and profitability Puma One of the world s leading Sportlifestyle companies Designs and develops footwear, apparel and accessories Sport Performance and Lifestyle labels include categories such as Football, Running, Motorsports and Golf Products originating in sports, continuing and amplifying in lifestyle and on to fashion Rigorous and energetic Transformation Plan being implemented in 2013 Volcom Innovative designer, marketer and distributor of premium quality clothing and accessories Iconic brand, with a strong heritage in skateboarding, surfing and snowboarding Brand inspired by the energy of youth culture Synergies and complementarity with Puma & considerable growth potential 12

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14 H Solid operating performances in the first half 14

15 S o l i d o p e r a t i n g p e r f o r m a n c e s i n t h e f i r s t h a l f Key H1 13 highlights Luxury division drives solid Group operating performance Consolidated revenue up 4% in constant currency terms, accelerating in Q2 (up 5%) Further improvement in Group s EBIT margin, reaching 18.0% Recurring net income, Group share up 4% Free cash flow from operations up 14% Further headway in Group transformation Consolidation and investments around the Group s two strategic pillars Fnac de-merger and Redcats disposals Kering name overwhelmingly approved by shareholders, signing the Group s transformation 15

16 S o l i d o p e r a t i n g p e r f o r m a n c e s i n t h e f i r s t h a l f H1 13 Operating performance overview In m Revenue Change % Recurring Operating Reported Comp. Income Change % Recurring operating margin % Luxury 3, % +7.9% % 25.6% Sport & Lifestyle 1, % -3.2% % 6.9% Corporate & Others (57) - - Total Kering 4, % +4.2% % 18.0% Luxury All brands contributing to strong growth in sales and results Comparable retail sales up 9% in H1 13 Acceleration in the second quarter (+9% in Q2) across most brands and regions Further margin improvement Sport & Lifestyle The challenging first half we had anticipated Product and channel refocus ahead of management transition at Puma 16

17 F i r s t - h a l f r e s u l t s Conclusion & Outlook Luxury Solid demand levels, notably in mature markets Healthy momentum in operating profitability Sport & Lifestyle New management focus on brand relaunch Limited short-term impact H1 underlying trends continuing in H2 17

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19 Appendix H key figures 19

20 H1 13 revenue In m H1 13 H1 12 Gucci 1, ,727.8 Bottega Veneta Saint Laurent Other brands Reported Change m % % 8.4% 14.2% 10.9% Luxury division 3, , % Puma 1, ,573.8 (99.9) -6.3% Other brands (7.2) -6.0% Sport & Lifestyle division 1, ,694.0 (107.1) -6.3% Corporate 13.1 (4.8) Kering total 4, , % 20

21 H1 13 recurring operating income In m H1 13 H1 12 Gucci Bottega Veneta Saint Laurent Other brands Reported Change m % % +12.8% +10.1% +16.1% Luxury division % Puma (39.0) -26.2% Other brands (2.6) n.m. Sport & Lifestyle division (41.6) -27.5% Corporate (56.6) (54.9) (1.7) -3.1% Kering total % 21

22 H1 13 operating performance In m CONTINUING OPERATIONS H1 13 H1 12 Revenue 4,678 4,614 Gross profit Gross profit margin 2, % 2, % Recurring operating income Recurring operating income margin % % EBITDA EBITDA margin % % 22

23 H1 13 financial performance In m H1 13 H1 12 Recurring operating income % Other non-recurring operating income and expenses Financial charges Corporate income tax Income from equity affiliates Net income from discontinued operations Consolidated net income Of which net income Group share (25) (97) (138) (1) (388) (24) (101) (168) 35 (61) Net income, Group share, from continuing operations excluding non-current items % Net income per share in Net income per share from continuing operations, Group share, excluding non-current items in % 23

24 H1 13 free cash flow from operations In m H1 13 H1 12 Cash flow before taxes, dividends and interest Change in working capital requirement (before taxes) Corporate income tax paid 913 (149) (165) 941 (265) (180) Net cash flow from operating activities Net acquisition of fixed operating assets (206) (151) Free cash flow from operations

25 Dividend In Dividend* per share (cash dividend, excl. Fnac shares to be distributed*) % % * 47.7% 63.2% 58.6% 48.3% Dividend payout 47.6% 52.9% 41.8% 59.8% 37.3% 61.6% 2008** 2009** 2010** 2011** 2012* % of recurring net income, Group share, from continuing operations % of free cash flow * Subject to June 18, 2013 AGM approval. ** Published not restated. 25

26 6,700 5,700 4,700 3,700 2,700 1,700 In m 5,510 4,367 FY 2012 Solvency NFD NFD/EBITDA ,781 3, , * 2009* 2010* 2011* * Published not restated 26

27 FY 2012 Liquidity In m 4,024 NFD 2,492 M (486) Confirmed undrawn credit lines 2013* 2014** 2015** 2016** 2017** beyond** 27 * Gross debt minus cash & cash equivalents and financing of customer loans ** Gross debt

28 Kering Heritage % stake in Gucci Group 2000 Acquisition of Boucheron 2001 Acquisition of Bottega Veneta, Balenciaga, Stella McCartney and Alexander McQueen 2002 Disposal of Guilbert mail order activity, Finaref and Facet (credit subs) 2003 Disposal of Pinault Bois & Matériaux and Guilbert contract activity Stake in Gucci Group raised to 99.4% Disposal of Rexel F - H Pinault appointed PPR group CEO 2006 Disposal of Printemps department stores 2007 PPR holds 62.1% of PUMA at the end of successful offer process 2008 Disposal YSL Beauté Acquisition of 23% stake in Girard Perregaux watch brand manufacturer IPO of 58% of CFAO Acquisition by Puma of Cobra Sale of Conforama to Steinhoff Acquisition of Volcom, Inc. Stake in Girard Perregaux raised to 50.1% Announced acquisition of Brioni (closed in Q1 12) Disposal of the remaining 42% stake in CFAO; disposal of Redcats US Acquisition of Qeelin Demerger of Fnac Acquisition of Christopher Kane Acquisition of Pomellato PPR becomes Kering 28

29 C o n t a c t s Kering Financial Communications Team Edouard CROWLEY +33 (0) edouard.crowley@kering.com

30 GUCCI BOTTEGA VENETA YVES SAINT LAURENT ALEXANDER McQUEEN BALENCIAGA BRIONI CHRISTOPHER KANE McQ STELLA McCARTNEY SERGIO ROSSI BOUCHERON DODO GIRARD-PERREGAUX JEANRICHARD POMELLATO QEELIN PUMA VOLCOM COBRA ELECTRIC TRETORN