HEM. Christian Dior. Ghizlane BOUHARROU. Yousra RABHI. Master 1 Finance d entreprise. Campus HEM Rabat

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1 Ghizlane BOUHARROU Yousra RABHI Master 1 Finance d entreprise 1 Campus Rabat

2 Outline: I. presentation 1. group 2. Key people 3. Shareholders 4. Holdings II. Financial statements 1. P&L 2. Balance sheet III. valuation 1. Discounted Cash flow 2. Stock multiplier 2

3 group Christian Dior SE, through its subsidiaries, engages in the production, distribution, and retail of fashion and leather goods, wines and spirits, perfumes and cosmetics, and watches and jewelry. It provides fashion products and accessories for men, women, and babies; fragrance and beauty products, including fragrance, makeup, and skincare products; and jewelry and timepieces. The company offers its fashion and leather goods under the Louis Vuitton, Céline, Loro Piana, Fendi,.. It also operates retail stores under the DFS Galleria, Sephora, Le Bon Marché; and offers publications under the Les Echos-Investir and the Royal Van Lent-Feadship brands. Christian Dior SE sells its products in France and rest of Europe; the United States; Japan and rest of Asia; and internationally. As of June 30, 2014, it operated 3,758 stores. The company also sells its products through distributors and Internet. Christian Dior SE was founded in 1946 and is headquartered in Paris, France. Presentation Name Christian Dior SE Ticker ONPL Exchange LSE Founded 1946 Market Cap 27,905 million Global Paris, France Headquarters Number of 113,143persons employees 3

4 Key people Name Bernard Arnault Sidney Toledano Pierre Godet Florian Ollivier Eric Guerlain Renaud Donnedieu de Vabres Christian de Labriffe Jaime de Marichalar y Sàenz de Denis Dalibot Ségolène Frère Gallienne Title Chairman & Chief Executive Officer Group Managing Director, COO & Director Director & Group Managing Director Chief Financial Officer Vice Chairman Independant Director Independant Director Independant Director Director Independant Director Presentation Shareholders Name Equities % Arnault Family % Norges Bank Investment Management % FIL Investment Advisor (UK) Ltd % Christian Dior SE % The Vanguard Group, Inc % Mellon Capital Management Corp % Capital Research & Management Co. (World Investors) % BlackRock Fund Advisors % Morgan Stanley Investment Management, Inc % RBC Global Assest Management (UK) Ltd % 4

5 Holdings Name Equities % Valuation LVMH (MC) % $ Christian Dior (CDI) % $ HERMES INTL (RMS) % $ Presentation 5

6 Income Statement In millions of EUR (except for per share items) Fiscal data as of Jun REVENUE AND GROSS PROFIT Total revenue 35,081 30,867 4,750 OPERATING EXPENSES Cost of revenue total 12,307 10,558 1,631 Selling, general and admin. expenses, total 16,475 14,249 2,234 Depreciation/amortization Unusual expense(income) Other operating expenses, total (19) Total operating expense 29,083 24,969 3,889 Operating income 5,998 5, Other, net (48) (19) (14) INCOME TAXES, MINORITY INTEREST AND EXTRA ITEMS Net income before taxes 8,683 5, Financial Statements Provision for income taxes 2,518 1, Net income after taxes 6,165 3, Minority interest (3,787) (2,467) (350) Net income before extra. Items 2,378 1, Total extraordinary items Net income 2,378 1, Net Income 2500 Net Income; Gross margin 64.92% Net profit margin 17.57% Operating margin 17.10%

7 Revenue 35 Return on assets 10.18% Return on equity 21.38% Return on investment 20.07% Financial Statements Year on year Christian Dior SE grew net income 66.88% from 1.43bn to 2.38bn primarily through revenue growth (30.87bn to 35.08bn). For while the costs associated with cost of goods, selling, general and administrative and debt all increased as a percentage of sales, the 13.65% growth in revenues contributed enough to still see net income improve. 7

8 Balance sheet In millions of EUR (except for per share items) Financial Statements Fiscal data as of Jun ASSETS Cash And Short Term Investments 3,028 2,822 2,242 Total Receivables, Net 3,589 3,105 2,781 Total Inventory 10,704 9,593 8,716 Prepaid expenses Other current assets, total Total current assets 18,260 16,280 14,605 Property, plant & equipment, net 11,418 10,501 9,282 Goodwill, net 10,365 9,626 8,497 Intangibles, net 16,242 15,363 13,987 Long term investments 1,153 7,697 7,189 Note receivable - long term Other long term assets Total assets 60,030 61,059 54,958 LIABILITIES Accounts payable 3,602 3,164 2,971 Accrued expenses 1,569 1,378 1,268 Notes payable/short-term debt 3,479 4,451 2,424 Current portion long-term debt/capital leases 915 1,922 1,926 Other current liabilities, total 2,638 2,121 1,897 Total current liabilities 12,203 13,036 10,486 Total long term debt 6,130 4,390 4,219 Total debt 10,524 10,763 8,569 Deferred income tax 5,738 5,194 4,708 Minority interest 16,047 18,367 17,093 Other liabilities, total 9,639 8,102 7,439 Total liabilities 49,757 49,089 43, Total debt/total equity 1.02 Total debt/total capital Assets Debt Christian Dior SE has a Debt to Total Capital ratio of 28.56%, a lower figure than the previous year's 36.67%. 8

9 DISCOUNTED CASH FLOW (FREE CASH FLOW TO EQUITY) The calculations below outline how a value for Christian Dior SE is arrived at by discounting future cash flows to their present value. A 2 stage model is used which includes 5 years of growth followed by perpetual stable growth. All values in EUR Millions unless otherwise stated. Valuation 5 year cash flow forecast Levered FCF (EUR, Millions) 3,897 4,392 5,224 5,555 5,907 Present Value Discounted (@ 9.8%) Present value of next 5 years cash flows: 18,680 Terminal Value Terminal Value = FCF2020 (1 + g) (Discount Rate g) Terminal Value = 5,907 ( %) (9.77% 1.9%) 3,551 3,646 3,950 3,827 3,707 Terminal value based on the Perpetuity Method where growth (g) = 1.9%: 76,729 Present value of terminal value: 48,151 Equity Value Equity Value (Total value) = Present value of next 5 years cash flows + terminal value Value = Total value / Shares Outstanding ( 66,831 / 179) Value per share: Current discount (share price of 155.8): 58% 9

10 Stock Multiplier Current Share Price is Dividends Payout Ratio & Dividend Yield Christian Dior SE's dividends per share for the six months ended in Jun was Its dividends per share for the trailing twelve months ended in Jun was Its Dividend Payout Ratio for the six months ended in Jun was 0.33 Christian Dior SE's Dividend Payout Ratio for the quarter that ended in Jun is calculated as Dividend Payout Ratio = Dividends Per Share / Earnings per Share = 1.25 / = 0.33 Dividend Yield = Most Recent Full Year Dividend / Current Share Price Valuation = 3.2 / = 2.05 % Days Inventory & Inventory Turnover Christian Dior SE's Days Inventory for the fiscal year that ended in Jun is calculated as Days Inventory = Average Inventory / COGS * Days in Period = ( (Inventory + Inventory )) / 2 ) / COGS * Days in Period = ( ( ) / 2 ) / * 365 = / * 365 = Inventory Turnover = Cost of Goods Sold / Average Inventory = 6110 / =

11 Return on Equity Christian Dior SE's annualized Return on Equity (ROE) for the fiscal year that ended in Jun is calculated as ROE = Net Income / ( (Total Equity + Total Equity) / 2 ) = 2378 / ( ( ) / 2 ) = 2378 / = % Price earnings Ratio: Christian Dior SE's P/E Ratio for today is calculated as P/E Ratio = Share Price / Earnings per Share = / = Valuation Dividend Yield Dividends Payout Ratio Price earnings Ratio Return on Equity Days Inventory 11