BULGARI GROUP. FRANCESCO TRAPANI Chief Executive Officer FLAVIA SPENA Chief Financial and Organization Officer RENATA CASARO Head of IR

Transcription

1 BULGARI GROUP FRANCESCO TRAPANI Chief Executive Officer FLAVIA SPENA Chief Financial and Organization Officer RENATA CASARO Head of IR HSBC LUXURY CONFERENCE Paris, June 3rd

2 Q RELEASE FINANCIAL HIGHLIGHTS EUR M. Q EUR M. Q1 EUR M. Q1 2009/Q1 % DELTA REVENUES % DOS: MSD* REVENUES AT COMP. FX 30.6% CONTRIBUTION MARGIN % on Sales % % 26.1% EBIT(OPERATING LOSS) % on Sales (23.8) 13.4% % NET PROFIT (LOSS) (29.3) 22.8 % on Sales 16.5% 9.9% * = Revenues in Directly Operated Stores decreased Mid SingleDigit at current exchange rates during Q1 09 2

3 Q RELEASE REVENUES BY PRODUCT CATEGORY FIRST QUARTER 2009 Q1 2009/Q1 REPORTED AT COMP.FX PRODUCT CATEGORY EUR M. % ON TOTAL SALES % DELTA JEWELRY % 15.3% 22.6% WATCHES % 30.0% 37.6% PERFUME & COSMETICS % 25.6% 31.4% ACCESSORIES % 33.5% 44.7% HOTEL % 19.7% ROYALTIES AND OTHER % 23.8% TOTAL % 23.1% 30.6% 3

4 Q RELEASE JEWELLERY NEW LAUNCHES % of total revenues in Q REVENUES Eur M. Q Q DELTA AT COMP. EXCHANGE RATES 22.6% 4.3% PARENTESI COCKTAIL Directly Operated Stores: 12.2% at comparable exchange rates No drastic mix changes Basel launches will have the main impact starting from Q2 BULGARIBULGARI 4

5 Q RELEASE WATCHES NEW LAUNCHES % of total revenues in Q REVENUES Eur M. Q Q DELTA AT COMP. EXCHANGE RATES 37.6% 6.7% SOTIRIO Directly Operated Stores: 25.1% at comparable exchange rates; Basel Fair launches will impact from Q2 onwards; Tight Company control on commercial terms, credit limits, deliveries. ASSIOMA D, NEW STEEL DIAMOND VERSION 5

6 Q RELEASE PERFUME AND COSMETICS 19.7% of total revenues in Q REVENUES Eur M. Q Q DELTA AT COMP. EXCHANGE RATES 31.4% 15.6% OMNIA GREEN JADE Direct Distribution* channel: 2.8% at comparable exchange rates; Travel Retail and Domestic Distribution: very strong destocking; Sales with final clients are up; Market share gain in Q BLV II NEW LAUNCH, ON SHELF FROM SEP 09 * USA, Germany, France, Italy, Switzerland, Belgium, Holland, Austria, Spain, Portugal 6

7 Q RELEASE ACCESSORIES NEW LAUNCHES % of total revenues in Q REVENUES Eur M. Q Q DELTA AT COMP. EXCHANGE RATES 44.7% 4.6% Dedicated Accessories DOS: flattish performance; Wholesale channel suffers the most, especially in Japan. 7

8 Q RELEASE REVENUES BY GEOGRAPHICAL AREA Q1 2009/Q1 FIRST QUARTER 2009 % DELTA % ON TOTAL REPORTED AT COMP.FX GEOGRAPHICAL AREAS EUR M. SALES EUROPE % 25.5% Of which Italy % 15.7% AMERICAS % 36.5% 44.3% ASIA % 16.8% 30.4% Of which Japan Of which Rest of Asia % 24.2% 19.0% 14.6% 37.6% 22.3% MIDDLE EAST/ OTHER % 24.1% TOTAL % 23.1% 30.6% DIRECTLY OPERATED STORES SALES PERFORMANCE AT COMPARABLE EXCHANGE RATES: Italy: flattish; France, Switzerland and UK: up, ranging from singledigit to doubledigit: South Korea and Australia: up, ranging from strong to very strong doubledigit; All other DOS performed better than the Total shown above. 8

9 Q RELEASE REVENUE BREAKDOWN BY GEOGRAPHICAL AREA Americas 10,8% Q1 08: 13.1% Middle East/Other 6,4% Q1 08: 6.5% Rest of Asia 24,2% ASIA 46,5% Q1 08: 43.0% Q1 08: 21.8% Japan 22,3% Europe 36,3% Q1 08: 21.2% Q1 08: 37.4% 9

10 Q RELEASE GROUP PROFIT & LOSS EUR M. Q Q1 Q1 2009/ Q1 EUR M. EUR M. % DELTA REVENUES % CONTRIBUTION MARGIN % % on Sales 64.6% 67.1% VARIABLE SELLING EXPENSES (8.4) (10.3) 18.6% PERSONNEL COSTS (51.0) (46.3) +10.2% OTHER GENERAL EXPENSES (39.5) (38.5) +2.5% AMORTIZATION AND DEPRECIATION (16.1) (12.5) +28.5% ADVERTISING AND PROMOTION (23.7) (26.0) 8.7% TOTAL OPERATING EXPENSES % on Sales (138.8) 77.9% (133.7) 57.7% +3.8% 3.4% at comp. FX EBIT % on Sales (23.8) 13.4% % TOTAL FINANCIAL COST FX Loss Interest (8.4) (4.1) (4.3) (3.9) CURRENT AND DEFERRED TAXES MINORITY INTEREST PROFIT (1.0) 0.2 NET PROFIT % on Sales (29.3) 16.5% % 10

11 Q RELEASE CONTRIBUTION MARGIN (% ON SALES) 67,1% 64,9% 64,7% 64,6% Q Q Q1 Q Q1 08 had benefitted from a very strong gold hedging positive impact Note: as of Q1 the Contribution Margin includes the economic impact of the gold hedging transactions. 11

12 Q RELEASE OPERATING EXPENSES DETAIL OPERATING EXPENSES DETAIL Trends at both reported and comparable exchange rates Q EUR M. Q1 EUR M. Q / Q1 DELTA % REPORTED Q / Q1 DELTA % COMPARABLE FX TOTAL OPERATING EXPENSES % 3.4% Of which: PERSONNEL EXPENSES % +2.7% OTHER GENERAL EXPENSES % 4.5% AMORTIZATION AND DEPR % +19.3% THE COST DEVELOPMENT IN Q IS ON TRACK WITH THE FY 2009 COST ROADMAP PRESENTED TO THE FINANCIAL COMMUNITY IN APRIL, UPDATED AND AVAILABLE IN THE NEXT PAGES 12

13 Q RELEASE ADVERTISING AND PROMOTION +1.3% 8.7% , Q1 Q EUR MILLIONS 11.3% 11.2% 13.3% ADVERTISING AND PROMOTION AS A % ON REVENUES 13

14 BETWEEN ETERNITY AND HISTORY YEARS OF ITALIAN JEWELS PALAZZO DELLE ESPOSIZIONI EXHIBITION, 22 May Sept

15 BETWEEN ETERNITY AND HISTORY YEARS OF ITALIAN JEWELS PALAZZO DELLE ESPOSIZIONI EXHIBITION, 22 May Sept

16 BETWEEN ETERNITY AND HISTORY YEARS OF ITALIAN JEWELS OPENING JESSICA ALBA 16

17 BETWEEN ETERNITY AND HISTORY YEARS OF ITALIAN JEWELS SAVE THE CHILDREN REWRITE THE FUTURE CAMPAIGN 17

18 Q RELEASE NET WORKING CAPITAL EUR M. Q Q1 Q RECEIVABLES INVENTORY PAYABLES OTHER RECEIVABLES AND PAYABLES TOT NWC + 4.3% at comp. FX 18

19 Q RELEASE CASH FLOW DETAILS EUR M. MARCH 2007 MARCH MARCH 2009 NET INDEBTEDNESS AT (46.9) (140.9) (303.6) (16.7) CHANGE in WORKING CAPITAL (51.3) (86.6) 5.8 CASH FLOW from INVESTING ACTIVITY (6.5) (19.4) (17.8) (12.2) (2.8) (0.6) 9.1 (16.0) 0.0 (1.4) (2.0) (13.2) (5.4) OTHER (9.5) 26.7 (6.8) TOTAL (33.7) (43.9) (35.4) NET INDEBTEDNESS AT (80.6) (184.8) (338.9) CASH FLOW from P&L CAPITAL EXPENDITURE* ACQUISITION OF COMPANIES GUARANTEE DEPOSIT OTHER DIVIDENDS * Both March 08 and March 09 include the Museum, figures were restated 19

20 Q RESULTS BALANCE SHEET HIGHLIGHTS GEARING 9% % 22% % 792 AVAILABLE FACILITIES* by MATURITY <12 months: M.Eur ( 57%) >12m, <24m: 37.8 M.Eur ( 5%) >24 months: M.Eur ( 38%) TOTAL: M.Eur (100%) EUR M Q Q NET EQUITY Q1 *As of end of May 2009 Q NET DEBT 20

21 Q RELEASE CURRENT TRADING CURRENT TRADING TEMPERATURE: APRIL 2009 In our DOS, clear signs of improvement in the revenues at current FX: from minus midsingledigit in Q1 09 to plus mid to highsingledigit in April, although helped by High Jewellery Gradual improvement also in the wholesale business, even if to a lesser extent. 21

22 COSTS ROADMAP FOR 2009 AND SELLSIDE ANALYSTS FY2009 CONSENSUS* *calculated on 25 broker estimates received from May 13 to May

23 ROADMAP 2009 REVENUES M.Eur and % delta CONFERENCE CALL COMMENT DEMAND JanFebMar09<JanFebMar 08 but in line with expectations and not as bad as NovDec 08 BASIS Q108 +3% ; Q208 +5%, Q % ; Q408 10% CHANNEL MIX DOS better than wholesale Strong destocking in wholesale GEO MIX UK, Italy, SouthKorea, SouthChina, Australia positive at end February PRICING COMMERC. TERMS Being monitored as usual NEW LAUNCHES Launches in all price segments (JWA) New fragrance Reduced complexity and less SKUs No trade loading activity EXPECTED IMPACT ON PROFITABILITY FY FY 2009 ANALYST CONSENSUS MAX AVG MIN No guidance % % 991 8% % but we will provide you with current trading updates 23

24 ROADMAP 2009 COST OF GOODS SOLD AND GROSS MARGIN M.Eur and % delta CONFERENCE CALL COMMENT EXPECTED IMPACT ON PROFITABILITY Gems Cost of Labour The Group is hedged for FY 2009 Neutral Reduced purchases Neutral no big savings Reduction of 3 rd party product. Almost neutral (even if we should decide to initiate CIG=Temporary layoff scheme financed by the State) Saturation of internal capacity GROSS MARGIN MAX FY 2009 ANALYST CONSENSUS AVG MIN 384 COGS Gold and its hedging FY Broadly stable like 9m Best estimate around 64% % 64.3% 666 4% 64.3% % 63.0% % 63.8% *in italics, % on revenues 24

25 ROADMAP 2009 OPERATING EXPENSES: VARIABLE SELLING EXPENSES M.Eur and % delta VARIABLE SELLING CONFERENCE CALL COMMENT EXPECTED IMPACT on PROFITABILITY FY Perfume variable selling expenses weigh more than JWA variable selling Correlated with sales But with a negative nuance if perfume very strong 48 FY 2009 ANALYST CONSENSUS MAX AVG MIN 25

26 ROADMAP 2009 OPERATING EXPENSES: PERSONNEL M.Eur PERSONNEL COST NEGATIVE DRIVERS POSITIVE DRIVERS CONFERENCE CALL COMMENT EXPECTED IMPACT on PROFITABILITY FY REDUCTION OF HEADCOUNT IN 2009 Modest Reduction vs 08 (at constant FX) 190 CARRYOVER EFFECT OF HIRINGS Negative, significant CARRYOVER EFFECT OF SALARY REVIEWS (july) Negative, significant OPENING OF 1012 NEW DOS STORES IN 2009 Negative RESTRUCTURING COSTS, SEVERANCE PAY Negative oneoff REDUCED VACATION PAY PROVISION Positive, significant STRONG CONTROL OF OVERTIME Positive, modest (already in place) RESTRUCTURING Positive, significant FY 2009 ANALYST CONSENSUS MAX AVG MIN 26

27 ROADMAP 2009 OPERATING EXPENSES: OTHER GENERAL EXPENSES M.Eur OTHER GENERAL EXPENSES RENTS NONRENT CONFERENCE CALL COMMENT EXPECTED IMPACT on PROFITABILITY FY REDUCE DISCRETIONARY ITEMS, RENTS ARE NOT FLEXIBLE Flattish (at constant FX) 167 CARRYOVER EFFECT OF DOS OPENINGS Negative 80 IMPACT OF 2009 DOS OPENINGS Negative RENEGOTIATION OF EXPIRING LEASES Positive modest 20% of LEASES ARE RELATED TO SALES Correlated with Revenues STRONG REDUCTION OF TRAVEL, DISCRETIONALY CONSULTANCIES, UTILITIES AND OTHER Positive FY 2009 ANALYST CONSENSUS MAX AVG MIN 87 27

28 ROADMAP 2009 OPERATING EXPENSES: A&P and D&A M.Eur ADVERT. AND PROMOTION D&A CONFERENCE CALL COMMENT EXPECTED IMPACT on PROFITABILITY FY FURTHER ENHANCE BRAND AWARENESS 125 TH ANNIVERS. Guidance: about 11% or slightly above th ANNIVERSARY, Save the Children ring, High Jewellery Auction, Exhibition Negative 54 Significatly Negative FY 2009 ANALYST CONSENSUS MAX AVG MIN 28

29 ROADMAP 2009 EBIT M.Eur and % delta CONFERENCE CALL COMMENT EXPECTATION EBIT NO GUIDANCE FY ,5% 10.3% FY 2009 ANALYST CONSENSUS MAX AVG MIN 89 20% 8.6% 68 39% 6.8% 41 63% 4.5% *in italics, % on revenues 29

30 ROADMAP 2009 FINANCIAL INCOME / COSTS FOREIGN EXCH. M.Eur CONFERENCE CALL COMMENT EXPECTED IMPACT on PROFITABILITY CURRENCY EXPOSURE HEDGING GAINS OR LOSSES TAX RATE FY 2009 ANALYST CONSENSUS MAX AVG MIN 28 FINANCIAL INCOME /COST DEBT FY Average Debt higher during 2009 Interest rate cost to go up because of maturity extension Negative Impact of hedging of 2009 flows done in (see Gross Margin!!) Negative on H1 09 On the rise, as guided for fy08 (in which we unexpectedly benefitted by a oneoff reduction) Negative High teens (1520%) 30

31 ROADMAP 2009 NET RESULT M.Eur And % delta CONFERENCE CALL COMMENT EXPECTATION NET RESULT NO GUIDANCE FY % 7.7% FY 2009 ANALYST CONSENSUS MAX AVG MIN % 6.3% 43 49% 4.3% 7 92% 0.8% *in italics, % on revenues 31

32 ROADMAP 2009 CAPEX M.Eur CAPEX CONFERENCE CALL COMMENT +10/12 new DOS openings of which one is a flagship (San Francisco), another few in USA and the rest in Asia ESPLICIT GUIDANCE Flattish (in 2010 more substantial reduction possible) CAPEX LATEST HISTORICAL DATA EUR M. FY FY 2009 ANALYST CONSENSUS MAX AVG MIN TANGIBLE INTANGIBLE Excluding Goodwill Including Key Money * ** TOTAL Museum GRAND TOTAL *see Cash Flow Capex slide in the FY presentation **see Cash Flow Capex slide in the FY presentation Museum figures were included in Other 32

33 ROADMAP 2009 NET WORKING CAPITAL M.Eur NWC CONFERENCE CALL COMMENT INVENTORY REDUCTION RE ALIGNMENT OF PRODUCTION ESPLICIT GUIDANCE Moderate Cash Generator FY FY 2009 ANALYST CONSENSUS MAX AVG MIN 745 NWC (of which 730 Inventory) 748* * Only 6 broker estimates as of 25 May 33

34 ROADMAP 2009 DEBT M.Eur DEBT CONFERENCE CALL COMMENT Increase of committed credit lines, extension of maturities EXPECTED IMPACT on BALANCE SHEET Moderate Reduction of Debt versus end 08 FY FY 2009 ANALYST CONSENSUS MAX AVG MIN

35 END QUESTION & ANSWERS 35

36 BVLGARI NEWSFLOW NEXT IR EVENTS June HSBC Luxury Goods Conference Paris July H Results Conference Call CET BULGARI INVESTOR RELATIONS WEBSITES: BULGARI CORPORATE WEBSITE 36

37 DISCLAIMER This document is for institutional investors only and is not available to private customers. This document is being supplied to a limited number of recipients and it may not be distributed, published or reproduced in whole or in part or disclosed by recipients to any other person. Under no circumstances shall this document constitute an offer to sell, an invitation to acquire or the solicitation of an offer to buy securities in any jurisdiction. Each investor contemplating purchasing securities issued by Bulgari S.p.A or any of its subsidiaries should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of Bulgari S.p.A or any of its subsidiaries and should carefully consider the high risks involved in purchasing these securities. This document contains certain forward looking statements and key financial goals which reflect management s current views, estimates, and objectives. The forward looking statements and key financial goals involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements and key financial goals. Potential risks and uncertainties include, amongst other things, internal, industry and external factors, such as general economic conditions 37

38 Q RELEASE NETWORK EVOLUTION Q1 FY Q DIRECTLY OPERATED STORES (DOS) FRANCHISEES TRAVEL RETAIL AND WHOLESALE STORES TOTAL STORES SAN FRANCISCO NEW FLAGSHIP STORE OPENING DEC