First Quarter revenue 21 April 2016 2018 First Quarter revenue - - PowerPoint PPT Presentation

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First Quarter revenue 21 April 2016 2018 First Quarter revenue - - PowerPoint PPT Presentation

2016 First Quarter revenue 21 April 2016 2018 First Quarter revenue April 24, 2018 DISCLAIMER This presentation does not constitute an offer of securities for sale in the United States of America or any other jurisdiction. Certain


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2016 First Quarter revenue 21 April 2016

2018 First Quarter revenue April 24, 2018

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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 March 28, 2018 which is available on Kering’s website at www.kering.com 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 1st quarter 2018 revenue. 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.

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Q1 2018 REVENUE: PURE PLAYER DELIVERS SUPERIOR GROWTH

OUTSTANDING COM PARABLE REVENUE GROWTH ON A CHALLENGING COM PARISON BASE

* At constant scope and exchange rates ** For Q1 18, Puma, Volcom and Stella McCartney are treated as discontinued operations (IFRS 5). To reflect this, 2017 figures have been restated of Puma, Stella McCartney and Volcom (PF = Pro Forma). See appendix for full details KERING CONTINUING OPERATIONS

Q1 18: €3,108m

Q1 17 PF: €2,445m

+27.1% reported +36.5% comparable*

TOTAL HOUSES

Q1 18: €2,999m

Q1 17 PF: €2,352m

+27.5% reported +36.8% comparable*

CORPORATE & OTHERS

Q1 18: €109m

Q1 17 PF: €93m

+16.8% reported +27.2% comparable*

DISCONTINUED OPERATIONS** PUMA: Q1 18: €1,135m Q1 17: €1,009m Other: Q1 18: €106m Q1 17: €120m +36.5% Q1 18 % comparable revenue growth +28.6% +24.6% +28.4% +27.4% +37.0% +29.7% +35.7% +33.9% Q1 17 Q2 17 Q3 17 Q4 17 Kering as previously reported Kering Pure Player (pro forma in 2017) 24.04.2018 4

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TOTAL HOUSES

REVENUE CHANGE BY REGION AND CHANNEL

(in €m, and comparable growth in %)

Q1 2018 revenue: 2,999 M€

+27.5% reported; +36.8% comparable

  • Further strength in retail (+40%), all regions up high double digit

‒ North America and APAC leading, up 54% and 42% respectively. Acceleration in Hong Kong and Macau, Mainland China sustained ‒ Japan posting a very strong performance, Western Europe remains solid despite softer tourism trends with locals robust overall ‒ e-commerce revenue more than doubled

  • Wholesale up 30%: broad-based appreciation of collections; good

quarter in watches

  • FX a significant hit
  • Brand emotion spread across all touchpoints to create and

fuel customer engagement

  • Healthy organic growth, well balanced across regions and

nationalities, driven by like-for-like and selective store

  • penings
  • Number of DOS at end of March: 1,347 (continuing
  • perations)

‒ 11 net openings during the quarter

REMARKABLE Q1 ON TOUGH COMPS AND FX DRAG CREATIVITY AND INNOVATION DRIVE OUTPERFORMANCE IN A FAVORABLE ENVIRONMENT

2,352

  • 7%

Q1 2017

+40% +30%

FX impact Retail Wholesale

2,999

Royalties and others

+2%

Q1 2018

Western Europe 32% North America 18% Asia Pacific 34% RoW 7%

REVENUE BREAKDOWN BY REGION

(on total Q1 revenue, in %)

Japan 9%

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GUCCI

RoW Western Europe

+43% +64% +59%

Asia Pacific

+49%

Japan

+44% 1,354

Q1 2017

+44%

Retail (85% of sales): +50% Q1 2018

  • 4%

Wholesale

1,867

Royalties and others North America

Q1 2018 revenue: 1,867 M€

+37.9% reported; +48.7% comparable

Western Europe 28% North America 20% Japan 8% Asia Pacific 37% RoW 7%

REVENUE BREAKDOWN BY REGION

(on total Q1 revenue, in %)

REVENUE CHANGE BY REGION AND CHANNEL

(in €m, and comparable growth in %)

OUTSTANDING PERFORMANCE ACROSS THE BOARD

  • Retail up 50% driven by LfL and full-price sales

‒ all categories and nationalities up strong double digit ‒

  • n high comps, growth led by North America and APAC, further strength

in Japan and sustained momentum in Western Europe ‒

  • nline sales up triple digit, driven by the US
  • Wholesale up 44% on unwavering success of Alessandro

Michele’s collections

DRIVING HEALTHY, CONSISTENT GROWTH

  • Balanced by product categories and customer age groups
  • Solid carryover base along with appetite for newness; acclaimed Fall

Winter 18/19 Show

  • Continuous transformation and innovation, new organizational model
  • Inauguration of Gucci ArtLab on April 19
  • Continued rollout of new store concept
  • Number of DOS at end of March: 533

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SAINT LAURENT

Royalties and others Wholesale

+32% +3%

Retail (63% of sales): +15% Q1 2018

408

Q1 2017

  • 1%

364

Western Europe

+24%

Japan

+23%

Asia Pacific

+27%

RoW

+17%

North America

REVENUE BREAKDOWN BY REGION

(on total Q1 revenue, in %)

REVENUE CHANGE BY REGION AND CHANNEL

(in €m, and comparable growth in %)

Q1 2018 revenue: 408 M€

+12.0% reported; +19.6% comparable

Western Europe 36% North America 21% Japan 8% Asia Pacific 29% RoW 6%

FURTHER SOLID GROWTH

  • Retail up 15% on very high comps

‒ double-digit increases in all regions ex. Western Europe impacted by slower Asian tourism spending ‒ Excellent performance in North America, Japan and APAC, particularly Hong Kong

  • Another strong quarter for wholesale (+32%) driven by

Western Europe

DELIVERING ON STRATEGY

  • Fashion leadership further enhanced by the Winter 18

Fashion Show in the iconic Paris setting of Trocadéro

  • Very successful introductions of new products in all

categories; continued performance of carryovers

  • Ongoing selective expansion of retail network
  • Number of DOS at end of March: 190

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BOTTEGA VENETA

+11%

Western Europe

  • 13%

Q1 2017

280 +11%

RoW Asia Pacific

  • 4%

261 +6%

Retail (84% of sales): +2%

  • 11%

Royalties and others Q1 2018 Wholesale Japan

+6%

North America

REVENUE BREAKDOWN BY REGION

(on total Q1 revenue, in %)

REVENUE CHANGE BY REGION AND CHANNEL

(in €m, and comparable growth in %)

Q1 2018 revenue: 261 M€

  • 6.8% reported; +0.7% comparable

Western Europe 25% North America 10% Japan 17% Asia Pacific 42% RoW 6%

COMPARABLE GROWTH UP SLIGHTLY

  • Retail up 2% on tougher sequential comparison base

‒ Western Europe impacted by deceleration in Chinese tourism ‒ North America up double-digit driven by locals and tourists ‒ APAC improving driven by Macau and Hong Kong recovery ‒ Japan robust supported by tourism

  • Small decline in wholesale; sell-out trends improving

NEW MILESTONES

  • Growing visibility thanks to impactful communication strategy,

enhanced store network (Opening of NY Maison on Madison Ave) and updated visual merchandising (windows, in-store animation)

  • Appetite for newness in Leather Goods confirmed; to be broadened

and further amplified throughout the year

  • Very positive trends in Ready-to-Wear; rebalancing the collections’

architecture in Women’s Shoes

  • Number of DOS at end of March: 271

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OTHER HOUSES

+24% +57%

Wholesale Q1 2017*

354 463

Retail Q1 2018 Royalties and others

+7%

REVENUE BREAKDOWN BY REGION

(on total Q1 revenue, in %)

REVENUE CHANGE BY REGION AND CHANNEL

(in €m, and comparable growth in %)

Q1 2018 revenue: 463 M€

+31.0% reported; +37.9% comparable

Western Europe 45% North America 14% Japan 10% Asia Pacific 21% RoW 10%

… JEWELRY & WATCHES SOLID

  • Plans to reinforce positioning of Boucheron, Pomellato and

Qeelin yielding initial results

‒ New collections and extension of iconic lines, investment in store network and communications across all touchpoints

  • Improved trends in Watches

‒ Growing visibility of Girard-Perregaux and Ulysse Nardin at SIHH ‒ Strong product launches leveraging core pillars, sharper brand image

  • Number of DOS at end of March: 353 (continuing activities)

COUTURE & LEATHER GOODS OUTSTANDING GROWTH…

  • Across all distribution channels
  • Retail up double-digit in all regions:

‒ Exceptional momentum at Balenciaga driven by RTW and Shoes, reflecting strong appreciation of collections for Women and impressive breakthrough in Men ‒ Alexander McQueen showing accelerating trends across regions, benefiting from product offer rebalancing in RTW and reengineering in Shoes; rising share of full- price sales and e-commerce momentum * : Q1 2017 pro forma data excluding Stella McCartney 9 24.04.2018

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CORPORATE & OTHERS KERING EYEWEAR UPDATE

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WELL-ESTABLISHED COMPANY WITH UNIQUE POSITIONING

  • 15 brands successfully activated
  • All collections developed with the distinctive DNA of each brand
  • Superior product quality and service level clearly recognized by

customers and final consumers

  • Integration of Manufacture Cartier Lunettes
  • Continued
  • rganization

ramp-up with no disruption for the business

  • 3 new direct subsidiaries (Australia, Korea and Malaysia) opened

in Q1 2018, ensuring tight control on selective distribution

  • JD.com Kering Eyewear online store up and running

STRONG Q1

  • Total sales of €127m, net consolidated revenue of €101m
  • Complete, balanced portfolio of brands enriched by successful

integration of Cartier, Alaïa and Altuzarra

  • Gucci strong momentum confirmed
  • Robust Saint Laurent performance accelerating
  • Outstanding launch of Cartier

ADDITION OF BALENCIAGA PARTNERSHIP, FIRST COLLECTION AVAILABLE IN JANUARY 2019

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CONCLUSION

  • Pure Player new profile enables significant Group outperformance

‒ in a favorable backdrop for the industry despite high comparison base and FX headwinds

  • Distribution of Puma shares to be completed mid-May subject to AGM approval
  • Healthy and consistent organic growth…

‒ driven by creativity and innovation

  • … combined with strict financial discipline to create value

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Q & A

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APPENDIX

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APPENDIX

Reminder of April 6, 2018 press release

Subsequent to the press releases dated January 11 and March 28, 2018, respectively, announcing:

  • Project to distribute in kind PUMA shares to Kering shareholders,
  • Agreement between Kering and Ms. Stella McCartney regarding the sale and purchase of the Group’s stake in her eponymous brand,

Kering notes that it intends to apply IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, to account for both of these assets in its Q1 2018 revenue reporting. Starting on the effective date of the distribution in kind of PUMA shares to Kering shareholders, scheduled for May 16, 2018 subject to approval by Kering shareholders at its April 26 AGM, the interest retained in PUMA will be shown within Investments in equity accounted companies for an amount relating to the Group’s share in equity and net income, as long as Kering will hold a significant influence in PUMA’s governance. Stella McCartney will be classified under Non-current Assets Held for Sale and Discontinued Operations until the effective sale date of Kering’s shareholding interest to Ms. Stella McCartney, due to occur in Q1 2019. Furthermore, in accordance with Kering’s strategy to fully dedicate itself to the development of its Luxury Houses, Volcom no longer constitutes a core asset and Kering has initiated a disposal process. Starting with its Q1 2018 revenue reporting, Kering will also apply IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, to Volcom.

2017 quarterly sales pro forma figures are available on kering.com

(1) Figures have been restated of Puma, Stella McCartney and Volcom (IFRS 5) (2) Comparable scope and exchange rates 15 24.04.2018

In euro millions Q1 2018 Q1 2017 (1) Actual Variation Comparable Variation (2) Gucci 1,866.6 1,354.0 +37.9% +48.7% Yves Saint Laurent 408.2 364.4 +12.0% +19.6% Bottega Veneta 261.2 280.4

  • 6.8%

+0.7% Other Houses 463.3 353.7 +31.0% +37.9% Total Houses 2,999.3 2,352.5 +27.5% +36.8% Corporate and others 108.5 92.9 +16.8% +27.2% KERING CONTINUING OPERATIONS 3,107.8 2,445.4 +27.1% +36.5% DISCONTINUED OPERATIONS Puma 1,135.2 1,008.9 +12.5% +21.4% Other activities 106.2 119.8

  • 11.4%
  • 4.9%
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Gucci • Saint Laurent • Bottega Veneta Balenciaga • Alexander McQueen • Brioni • Christopher Kane • Tomas Maier Boucheron • Pomellato • Dodo • Qeelin • Ulysse Nardin • Girard-Perregaux Kering Eyewear

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