INVESTOR PRESENTATION

Transcription

1 INVESTOR PRESENTATION SEPTEMBER 2016

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 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 4th, 2016 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 Luxury Goods and Sport & Lifestyle brands, 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; 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 has been selected by the Group s executive management to present Kering s Full Year 2015 and Half Year 2016 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. INFORMATION IN THIS PRESENTATION, INCLUDING FORECAST FINANCIAL INFORMATION, SHOULD NOT BE CONSIDERED AS ADVICE OR A RECOMMENDATION TO INVESTORS OR POTENTIAL INVESTORS IN RELATION TO HOLDING, PURCHASING OR SELLING SECURITIES OR OTHER FINANCIAL PRODUCTS OR INSTRUMENTS AND DOES NOT TAKE INTO ACCOUNT YOUR PARTICULAR INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR NEEDS. BEFORE ACTING ON ANY INFORMATION YOU SHOULD CONSIDER THE APPROPRIATENESS OF THE INFORMATION HAVING REGARD TO THESE MATTERS, ANY RELEVANT OFFER DOCUMENT AND IN PARTICULAR, YOU SHOULD SEEK INDEPENDENT FINANCIAL ADVICE. ALL SECURITIES AND FINANCIAL PRODUCT OR INSTRUMENT TRANSACTIONS INVOLVE RISKS, WHICH INCLUDE (AMONG OTHERS) THE RISK OF ADVERSE OR UNANTICIPATED MARKET, FINANCIAL OR POLITICAL DEVELOPMENTS AND, IN INTERNATIONAL TRANSACTIONS, CURRENCY RISK. 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

3 GROUP OVERVIEW 3

4 EMPOWERING PREMIUM BRANDS A world leader in apparel and accessories, developing an ensemble of powerful brands Kering Luxury Kering Sport & Lifestyle 4

5 OUR STRATEGIC VISION: FOUR PILLARS 1 MULTIBRAND MODEL 2 ORGANIC GROWTH 3 VALUE CREATION BY GROUP AND BRANDS Balanced portfolio: - of complementary brands - built through acquisitions and developed through organic growth Business model and management aimed at leveraging: - differentiated cycles and degrees of maturity - growth dynamics specific to each brand Foundation: Secular growth of our markets Capital: Attractiveness of our brands Growth lever: Same-store performance Accelerator: Online presence Edge provided by integrated, specialized group (industrial operations, logistics, real estate,licensing...) Optimization of organizations and processes Growth in Free Cash Flow from operations Improving return on invested capital 4 SUSTAINABILITY Social responsibility (Women in the workplace, gender parity ) Environmental responsibility (ep&l, sourcing, industrial operations ) Creativity and leadership 5

6 OUR STRATEGIC VISION: FOUR PILLARS 1 MULTIBRAND MODEL PHASE I CONSTRUCTION Balanced portfolio: SOFT LUXURY HARD LUXURY SPORT&LIFESTYLE - of complementary brands - built through acquisitions and developed through organic growth Business model and management aimed at leveraging: Flagship brand Pillar brands Gucci BV YSL Balenciaga Jewelry Boucheron Pomellato Dodo Qeelin Generalist Puma - differentiated cycles and degrees of maturity - growth dynamics specific to each brand Emerging brands AMQ SMC Brioni CK Watches Ulysse Nardin Girard-Perregaux Specialist Volcom PHASE II ORGANIC GROWTH Nurture and magnify the growth potential of each brand Clear, coherent positioning Focused or streamlined product offerings Organization in place, multiple synergies Supply chain undergoing optimization Ongoing adaptation of DOS network Ability to grow in changing environment 6

7 OUR STRATEGIC VISION: FOUR PILLARS 2 ORGANIC GROWTH CAPITAL LEVER ACCELERATOR BRAND ATTRACTIVENESS SAME-STORE PERFORMANCE ONLINE PRESENCE Creation: energy, audacity Products: quality, innovation, collections Customer experience & service: distinctiveness Communications: coherence, visibility Develop productivity and sales density Optimize in-store product allocations Extensive transversal retail excellence program Enhanced CRM & clienteling Constantly review and upgrade store locations Store opening criteria, selectivity & arbitrage A fundamental vector to build, disseminate & maintain image of our brands Further develop channel & functionalities to offer seamless, high-end service to current and future clients 7

8 OUR STRATEGIC VISION: FOUR PILLARS 3 VALUE CREATION VALUE CREATION Focus on organic growth R E V E N U E Slower network expansion Optimization of geo-pricing OPERATIONS CAPITAL EMPLOYED R E T U R N W O R K I N G C A P I T A L Higher store productivity Supply Chain Management Adaptation of organizations New planning & inventory management tools Focus on W orking Capital optimization Enhanced CAPEX allocation I m p r o v e d r e t u r n o n i n v e s t e d c a p i t a l & g e n e r a t i o n o f f r e e c a s h f l o w f r o m o p e r a t i o n s C A P E X Reduction of store development costs Lower investments in exceptional real estate projects USE OF CASH M & A a n d F I N A N C I A L S T R U C T U R E No major acquisitions in 2016 Dividend a priority Gradual deleveraging N e t d e b t r e d u c t i o n 8

9 OUR STRATEGIC VISION: FOUR PILLARS 4 SUSTAINABILITY AMBITIOUS TARGETS 9

10 H RESULTS HIGHLIGHTS AND PERFORMANCE 10

11 2016 FIRST-HALF RESULTS KEY HIGHLIGHTS REVENUE (comparable growth*) Focus on organic growth: delivering strong performance in both Luxury and S&L Q2 H1 2,969m +6.9% 5,693m +5.5% RECURRING OPERATING INCOME Gross profit margin up 160 bps Tight control over Opex and benefit from operating leverage, while selectively investing in growth 811m +5% yoy RECURRING OPERATING MARGIN Luxury and S&L both contributing to margin improvement 14.2% +20bps yoy CAPEX (gross figure) Capex/Revenue ratio below 4% on enhanced operating Capex allocation and lower corporate investment 224m -26% yoy FCF Back to normalized robust FCF generation 323m + 265m yoy NET DEBT Focus on net debt reduction 5,067m - 270m yoy *: at constant scope and exchange rates 11

12 2016 FIRST-HALF RESULTS OPERATING PERFORMANCES GROUP H1 REVENUE +5.5% comparable, +3.3% reported GROUP H1 REVENUE BY QUARTER comparable growth in % In m Change (%) +11.4% Revenue Reported Comparable (*) Luxury 3, % +4.0% Sport & Lifestyle 1, % +9.1% +6.9% +5.5% +4.0% +5.2% +4.0% +2.6% +7.0% +9.1% Corporate & others Kering total 5, % +5.5% Kering Group Luxury Sport & Lifestyle Q1 16 Q2 16 H1 16 GROUP H1 RECURRING OPERATING INCOME +4.9% reported H1 RECURRING OPERATING INCOME BRIDGE In m In m Recurring Operating Income H1 16 Reported change (%) Recurring Operating margin (%) Luxury % 21.7% % +35 (35) +48 Luxury EBIT: + 34m (15) +10 (5) % Sport & Lifestyle % 2.7% Corporate & others (77) -7.6% - Kering total % 14.2% H1 15 Gucci BV Saint Laurent Other Brands S&L Corporate H1 16 (*): at constant scope and exchange rates 12

13 LUXURY ACTIVITIES H revenue: +4.0% comparable Achieving strong performances against high comps R e v e n u e c h a n g e i n m, a n d c o m p a r a b l e g r o w t h i n % 3,762-1% 0% +4% +5% -8% 3,878 In m H1 16 Reported change Revenue 3, % Recurring operating income Recurring operating income margin EBITDA EBITDA margin % % +4.2% +0.3pt +2.7% Gross CAPEX % H1 15 FX impact Scope Retail Wholesale Royalties and others H1 16 Half-Year revenue up 4% comparable Well-balanced growth between retail (+4%) and wholesale (+5%) Comparable revenue up 5% in Q2 Consistent across channels: Retail +5 %, Wholesale +7% Sequential acceleration in retail despite demanding comparison base (Q2 15 retail +13%) Reversing last year trends, emerging markets leading growth in retail (+9%, o/w Asia Pacific +6%), while mature markets decelerate but remain resilient (+2% in retail) Record H1 Recurring operating income level Gucci back to growth Contribution from Saint Laurent sharply higher Brand reinvestment and market headwinds weighing on BV and Other Brands Recurring operating income margin up 30 bp Ongoing CAPEX selectivity 3.7% of revenue vs. 4.3% in H

14 GUCCI H1 16 revenue: +5.4% comparable Recreating the dream: from positive signs to tangible results R e v e n u e c h a n g e i n m, a n d c o m p a r a b l e g r o w t h i n % Retail (83% of sales): +5% In m H1 16 Reported change +20% -2% +3% +1% +10% +13% -21% 1,948 Revenue 1, % 1,874 Recurring operating income Recurring operating income margin % +7.0% +0.8pt EBITDA EBITDA margin % +4.1% Gross CAPEX % H1 15 Western Europe North America Japan Asia Pacific RoW Wholesale Royalties and others H1 16 of which Q2 16 comp growth +20% 0% +5% +3% +14% +15% -8% TOTAL +7% H1 16: comparable revenue growth above 5% Healthy retail, wholesale up double digit, softer decline in royalties in Q2 as anticipated Strong comparable growth in Q2 at +7% Retail up 7% vs. very high comp base - New collections (RTW, Shoes, Leather Goods): full-price momentum building up month after month - Sustained trends in Western Europe, QoQ improvement in Japan and North America, Asia-Pacific positive Wholesale up 15%, sharp increase in orders per door Resuming recurring operating income growth (+7%) and margin expansion (+80 bps) Balancing profitability and targeted investment in growth Opex Efficient Capex allocation More than 20 stores converted to new concept in H1 16 Slower pace of openings confirmed, further optimization of DOS network: 7 net closings since YE 15 14

15 BOTTEGA VENETA R e v e n u e c h a n g e i n m, a n d c o m p a r a b l e g r o w t h i n % H1 16 revenue: -9.1% comparable Facing short-term headwinds while investing in long-term brand value Retail (82% of sales): -10% In m H1 16 Reported change % -20% -13% -3% n.m -5% n.m 571 Revenue % Recurring operating income Recurring operating income margin % -19.4% -3.2pt EBITDA EBITDA margin % -15.9% Gross CAPEX % H1 15 Western Europe North America Japan Asia Pacific RoW Wholesale Royalties and others H1 16 of which Q2 16 comp growth -25% -18% -19% +2% n.m. -6% n.m. TOTAL -10% H1 16 revenue penalized by tourism slowdown and high comp base Q2 comparable revenue down 10% Retail down 11% on strong comp, esp. in Western Europe - Impact of Asian tourism slowdown/decline in key regions. APAC back to positive led by Mainland China and RoA, confirming relocation of demand - Leather Goods suffering, but Shoes up double digit - Further H2 initiatives to reignite brand desire and exclusivity: in-depth product offer renewal, update of displays and customer touchpoints Wholesale down on decision to contain markdowns Recurring operating income and margin Top-line trends prompting operating deleverage Strict cost control but reinvestment to accelerate brand rebalancing and support new developments CAPEX down on phasing and priority to DOS network reengineering and store refurbishment DOS network: net reduction of 4 stores, o/w 13 closings (7 in APAC) c.50 stores undergoing refurbishment to accommodate Shoes 15

16 SAINT LAURENT R e v e n u e c h a n g e i n m, a n d c o m p a r a b l e g r o w t h i n % H1 16 revenue: +24.2% comparable Delivering strong top line and significant operating leverage % Retail (68% of sales): +31% +34% +49% +24% +54% +10% +19% 548 In m H1 16 Reported change Revenue % Recurring operating income Recurring operating income margin % +80.2% +6.2pt EBITDA EBITDA margin % +62.1% Gross CAPEX % H1 15 Western Europe North America Japan Asia Pacific RoW Wholesale Royalties and others H1 16 of which Q2 16 comp growth +21% +28% +39% +38% +75% +2% +17% TOTAL +22% Sustained H1 revenue trend Driven by retail across all regions and product categories Another high growth quarter: Q2 revenue up 22% Retail sales up double-digit, progression in all product categories (Leather Goods, RTW, Shoes) Wholesale up single digit, notably on phasing of deliveries Sharp increase in recurring operating income and margin Highly positive like-for-like top-line growth and scale effect, combined with disciplined Opex management, unleashing operating leverage potential CAPEX down Consistent with current DOS network consolidation phase Strong appreciation of both seasonal collections and Permanent styles 16

17 OTHER LUXURY BRANDS H1 16 revenue: 0% comparable A contrasted first half, but promising changes and new directions R e v e n u e c h a n g e i n m, a n d c o m p a r a b l e g r o w t h i n % 815-1% +2% -11% In m H1 16 Reported change 811 Revenue % Recurring operating income Recurring operating income margin EBITDA EBITDA margin % % -23.8% -1.8pt -17.0% Gross CAPEX % H1 15 Retail Wholesale Royalties and others H1 16 Contrasted performance in H1 Couture & Leather Goods (C&LG) offsetting ongoing pressure on Watches & Jewellery (W&J) Improving trends in Q2 driven by Wholesale Stella McCartney and Alexander McQueen continuing to lead growth Balenciaga new collections very well received, to hit stores in H2 Brioni building foundation for creative spark, renewed momentum A positive quarter in Jewellery and a slight improvement in Watches Recurring operating income and margin: overall pressure masking diverse situations Good performance at Balenciaga and SMC Selective growth investments at AMQ and ongoing adaptation of production capacity at Brioni Operating deleverage in Watches, partially mitigated by synergies and cost rationalization CAPEX up driven by Brioni, down for all other brands Investment in two major flagship relocations (Paris and NYC) together with new store concept 17

18 SPORT & LIFESTYLE ACTIVITIES H1 16 revenue: +9.1% comparable Robust revenue trends, back to profit growth R e v e n u e c h a n g e i n m, a n d c o m p a r a b l e g r o w t h i n % +15% +1% +7% +12% +11% 1,797 In m H1 16 Reported change 1,731 Revenue 1, % Recurring operating income Recurring operating income margin EBITDA EBITDA margin % % +25.3% +0.5pt +14.3% Gross CAPEX % H1 15 Western Europe North America Japan Asia Pacific RoW H1 16 of which Q2 16 comp growth +23% +2% +5% +14% +13% TOTAL +11% Puma delivering double-digit comparable growth in H1, with revenue acceleration in Q2 to +13% (from +8% in Q1). In Q2: Apparel (+20%) benefitted from soccer jerseys for the Euro Cup, growing solidly in all regions Footwear (+8%) and Accessories (+15%) showing rapid progress Growth across all regions, led by Western & Eastern Europe and APAC, with strong developments in Mainland China Puma: improving profitability despite currency headwinds Enhanced pricing power thanks to renewed brand momentum and product innovation Profitability back on growth track, up 60 bps in H1 to 3.1% Puma FY16 guidance reiterated High growth in e-commerce, esp. in Mainland China Volcom: wholesale still penalized by the weakness of specialized Action Sports retailers in North America, while retail revenue up 18

19 FINANCIAL PERFORMANCE In m H1 16 H1 15 Revenue 5,693 5,513 Gross margin Recurring operating income Gross profit margin Recurring operating income margin 3, % % 3, % % Other non-recurring operating income and expenses Net financial charges Corporate income tax Share in earnings of associates Net result from discontinued operations (86) (101) (138) (5) 0 (42) (136) (141) (3) (11) Consolidated net income Of which net income, Group share Net income, Group share, from continuing operations excluding nonrecurring items Net income, Group share, per share (in euro) Net income per share from continuing operations, Group share, excluding nonrecurring items (in euro)

20 CHANGE IN NET FINANCIAL DEBT H1 16 NET FINANCIAL DEBT BRIDGE In m ,067 4, Net debt at December 31, 2015 Free cash flow from operations Net interest paid and dividend received Dividend paid Purchase of Kering shares and financial investments Other movements Net debt at June 30, 2016 H1 15 reported ,337 20

21 2016 FIRST-HALF RESULTS CONCLUSION Gucci back on healthy growth track and delivering tangible results SOLID PERFORMANCES 1 MULTIBRAND MODEL Strong performances confirmed at YSL, AMQ and SMC New initiatives at Bottega Veneta and Brioni Puma revenue and profit growth trajectory confirmed PERTINENT STRATEGY 2 FOCUS ON ORGANIC GROWTH Bold new steps to nurture brand attractiveness and uniqueness Luxury DOS count down overall, multiple initiatives to consolidate, adapt the store network and enhance its productivity Very solid revenue trends against tough comps and challenging DISCIPLINED EXECUTION 3 VALUE CREATION environment Recurring operating income and margin up Capex discipline, healthy FCF generation and net debt reduction as anticipated 21

22 H RESULTS IN DETAIL 22

23 2016 FIRST-HALF REVENUE Change In m H1 16 H1 15 m % Gucci 1, , % Bottega Veneta (58.0) -9.2% Saint Laurent % Other brands (4.2) -0.5% Luxury 3, , % Puma 1, , % Other brands (19.4) -14.9% Sport & Lifestyle 1, , % Corporate & Others (1.3) -6.7% Kering 5, , % 23

24 H1 16 RECURRING OPERATING INCOME Change In m H1 16 H1 15 m % Gucci % Bottega Veneta (35.0) -19.4% Saint Laurent % Other brands (15.2) -23.8% Luxury % Puma % Other brands (4.4) (2.3) (2.1) n.m. Sport & Lifestyle % Corporate & Others (76.6) (71.2) (5.4) -7.6% Kering % 24

25 H1 16 EBITDA Change In m H1 16 H1 15 m % Gucci % Bottega Veneta (31.6) -15.9% Saint Laurent % Other brands (16.2) -17.0% Luxury % Puma % Other brands (1.4) 1.7 (3.1) n.m. Sport & Lifestyle % Corporate & Others (55.9) (59.0) % Kering 1, % EBITDA: defined as recurring operating income + net charges to depreciation, amortisation and provisions on non-current operating assets, recognised in recurring operating income 25

26 H1 16 NET FINANCIAL COSTS AND INCOME TAX In m H1 16 H1 15 Cost of net debt Other financial income and expenses (62.3) (38.4) (64.2) (72.0) Financial costs (net) (100.7) (136.2) In m H1 16 H1 15 Tax on recurring income Tax on non-recurring items (167.6) 29.4 (126.3) (15.1) Total tax charge (138.2) (141.4) Effective tax rate 22.1% 23.8% Recurring tax rate 23.6% 19.8% 26

27 H1 16 FREE CASH FLOW FROM OPERATIONS In m H1 16 H1 15 Cash flow before taxes, dividends and interests Change in working capital requirement (excluding taxes) Corporate income tax paid 952 (246) (163) 895 (428) (148) Net cash flow from operating activities Acquisition of fixed operating assets Sale of fixed operating assets (224) 4 (303) 42 Free cash flow from operations

28 H1 16 CONDENSED CONSOLIDATED BALANCE SHEET In m H1 16 H1 15 Goodwill, brands and other intangible assets - net Other net non-current assets Net current assets Provisions 15, ,436 (340) 15, ,555 (365) Capital Employed 16,727 16,793 Net assets held for sale - 28 Shareholders Equity 11,660 11,483 Net debt 5,067 5,337 28

29 FY 2015 HIGHLIGHTS 29

30 2015 OPERATING PERFORMANCE GROUP REVENUE DYNAMICS GROUP REVENUE BREAKDOWN Change in % FY 13 FY 14 FY 15 By region, and comparable growth in % 15.4% RoW 10% (+3%) Western Europe 31% (+10%) 4.0% 4.5% 4.6% 4.0% Asia Pacific 26% (-1%) FY15 revenue 11.6bn 0.1% Comparable growth * Reported growth Japan 10% (+9%) North America 23% (+3%) TRENDS BY ACTIVITY DISSIMILAR QUARTERS Comparable growth in % Comparable growth in % 3.5% 5.6% 4.6% 2.8% 5.3% 4.1% 5.3% 6.4% 5.9% 9.8% 7.7% 8.0% 8.0% 7.2% 7.1% 3.1% 3.1% 3.7% 3.4% Group Luxury Sport & Lifestyle * : at constant scope and exchange rates H1 15 H2 15 FY % -2.6% Group Luxury Sport & Lifestyle Q1 15 Q2 15 Q3 15 Q

31 2015 OPERATING PERFORMANCE GROUP RECURRING OPERATING INCOME In m, change and recurring operating margin in % GROUP EBITDA In m, change and EBITDA margin in % 1, % -1% +27 1,647 +3% 1, % % 2, % 14.2% 17.8% 19.8% 2014 H1 change H2 change H1 change H2 change 2015 Real estate disposal impact 326 FREE CASH FLOW FROM OPERATIONS In m H1 14 H1 15 H2 14 H2 15 FY 14 FY 15 31

32 LUXURY ACTIVITIES X%: comparable growth 2015 revenue: +16.4% reported; +4.1% comparable Solid operating performance 6, % +2% +7% -3% 0% 7,865 In m 2015 Reported change Revenue 7, % Recurring operating income Recurring operating income margin 1, % +2.5% -2.9pt EBITDA EBITDA margin 2, % +5.5% Gross CAPEX % 2014 FX impact Scope Retail Wholesale Royalties and others 2015 Full Year revenue up 16% reported Boosted by FX Driven by good retail momentum (+7%), notably in Western Europe and Japan Comparable revenue up 7% in Q4 (+16% reported) Sharp rise in retail, up 9%, with mature countries up 12% and emerging markets up 4% Wholesale turns positive, up 4% Higher EBITDA and recurring operating income First-Half resilience Recurring operating income up 5% in H2, reflecting: - Stability at Gucci & Bottega Veneta - Sharp rise at Saint Laurent - Contained drop at Other Brands Lower margin dilution in H2 Ongoing CAPEX selectivity 5.0% of revenue vs. 5.5% in

33 DETAILED PERFORMANCES OF LUXURY BRANDS GUCCI r e v e n u e : % c o m p a r a bl e BOTTEGA VENETA r e v e n u e : % c o m p a r a bl e In m 2015 Reported change In m 2015 Reported change Revenue 3, % Revenue 1, % Recurring operating income Recurring operating income margin 1, % -2.2% -3.7pt Recurring operating income Recurring operating income margin % +4.8% -2.5pt Q4 Revenue: 1,100m y-o-y change: % reported, +4.8% comparable Q4 Revenue: 333m y-o-y change: + 4.3% reported, -3.1% comparable SAINT LAURENT r e v e n u e : % c o m p a r a bl e OTHER LUXURY BRANDS r e v e n u e : % c o m p a r a bl e In m 2015 Reported change In m 2015 Reported change Revenue % Revenue 1, % Recurring operating income Recurring operating income margin % +60.3% +2.4pt Recurring operating income Recurring operating income margin % -9.9% -2.5pt Q4 Revenue: 287m y-o-y change: % reported, +27.4% comparable Q4 Revenue: 495m y-o-y change: % reported, +10.6% comparable 33

34 SPORT & LIFESTYLE ACTIVITIES 2015 revenue: +13.5% reported; +5.9% comparable Confirmed growth trajectory X%: comparable growth 3,245 +3% +6% -1% +12% +9% 3,683 In m 2015 Reported change Revenue 3, % Recurring operating income Recurring operating income margin EBITDA EBITDA margin % % -31.1% -1.6pt -15.8% Gross CAPEX % 2014 Western Europe North America Japan Asia Pacific RoW 2015 Division benefiting from acceleration at Puma Puma comparable growth rate doubled vs Reflecting success of repositioning and new products, notably Footwear (+10% comparable) and solid Apparel performance (+6%) Balanced growth across regions, sharp rebound in Europe Strong Q4 (+12% comparable) and solid order book trends Puma growth investments affecting operating performance Currency fluctuations weighing on margins Milder operating margin drop in H2: -70bp vs. -260bp in H1 Contained growth of CAPEX Puma store openings: focus on emerging markets Other brands still impacted by unfavorable Action Sports market environment 34

35 FINANCIAL PERFORMANCE In m Revenue 11,584 10,038 Gross Margin 7,074 6,296 Recurring operating income 1,647 1,664 Other non-recurring operating income and expenses Net financial charges Corporate income tax Share in earnings of associates Net result from discontinued operations (394) (249) (322) (2) 41 (112) (197) (326) (1) (479) Consolidated net income Of which net income, Group share Net income, Group share, from continuing operations excluding non-recurring items 1,017 1,177 Net income, Group share, per share (in euro) Net income per share from continuing operations, Group share, excluding nonrecurring items (in euro)

36 CHANGE IN NET FINANCIAL DEBT BRIDGE In m and net debt / EBITDA ratio 4, , , x 2.2x 2.3x Net debt at December 31, 2014 Free cash flow from operations Net interest paid and dividend received Dividend paid Purchase of Kering shares and financial investments Discontinued activities Translation impact foreign currency denominated debt Net debt at December 31,

37 2015 BALANCE SHEET Healthy financial structure CONDENSED BALANCE SHEET LIQUIDITY OVERVIEW (in m) 23.8bn 11.6bn Equity 1,770 Non-current assets 18.5bn 3.1bn 3.3bn Non-current liabilities Current liabilities Current assets 4.2bn 5.8bn Gross debt Cash 1.1bn Assets Actif Liabilities Passif 2016* 2017** 2018** 2019** 2020** au-delà** Beyond** Equity: 49% of total balance sheet Debt-to-equity ratio: 41% Average maturity lengthened Further reduction in cost of financing in 2015 * Gross debt minus cash & cash equivalents ** Gross debt 37

38 UNCHANGED DIVIDEND DIVIDEND PER SHARE (in ) * DIVIDEND PAYOUT (in %) 102.2% 41.8% 59.8% 61.6% 64.0% 37.3% 38.5% 42.9% 59.4% 49.6% 2011** 2012** 2013** * % du of RNPG recurring poursuivi net income, courant group share % du of cash available flow cash disponible flow * Subject to 29 April, 2016 AGM approval. Interim payment of 1.50 paid on January 25, 2016 ** Published not restated 38

39 FOCUS ON GOVERNANCE AND SUSTAINABILITY 39

40 GOVERNANCE Operations of the board of directors 11 Directors 6 Independent 7 Women 5 Committees Audit committee Jean-Pierre DENIS (Chairman)* Patricia BARBIZET Laurence BOONE* Sophie L HELIAS* Board of Directors Remuneration committee Strategy and development committee François-Henri PINAULT (Chairman) Daniela RICCARDI* Baudouin PROT Laurence BOONE* Sustainability committee Sophie L HELIAS (Chairwoman)* Patricia BARBIZET Yseulys COSTES* Jean-Pierre DENIS* Appointment committee Patricia BARBIZET (Chairwoman) Yseulys COSTES* Baudouin PROT Sapna SOOD* Sapna SOOD (Chairwoman)* Daniela RICCARDI* Jean-François PALUS François-Henri PINAULT * = independent director 40

41 SUSTAINABILITY Vision and targets: materiality matrix 41

42 ENVIRONMENTAL P&L An innovative tool to measure Kering s environmental footprint, and to respond to environmental challenges MAPPING OF THE ENVIRONMENTAL IMPACT IMPLEMENTATION OF TARGETED PROJECTS QUANTIFICATION & SEARCH FOR ALTERNATIVES 42

43 Gucci Bottega Veneta Saint Laurent Alexander McQueen Balenciaga Stella McCartney Christopher Kane Brioni Girard-Perregaux JeanRichard Boucheron Pomellato Dodo Qeelin Ulysse Nardin PUMA Cobra Puma Golf Volcom

44