First Quarter revenue 2016 - 21 April 2016 2020 First Quarter Revenue April 21, 2020 - Kering Brand Portal
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2016
First Quarter
revenue
21 April 2016 2020 First Quarter Revenue
April 21, 2020
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 26, 2020 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 our Luxury 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 1 st quarter 2020 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. 21.04.2020 2
Q1 2020 REVENUE: HEAVY IMPACT FROM COVID-19
GROUP REVENUE LUXURY HOUSES CORPORATE & OTHER
€3,203m €3,066m €137m
o/w Kering Eyewear €130m
-15.4% reported -16.0% reported +0.2% reported
-16.4% comparable* -16.9% comparable* -1.3% comparable*
INCREASING PERCENTAGE OF RETAIL STORES CLOSED AS OF MARCH 31
NETWORK CLOSED DURING Q1 BY REGION
55% 40,0%
40% 20,0%
25%
0,0%
10%
-5% -20,0%
-20%
-40,0%
-35%
-60,0%
-50%
-65% -80,0%
Week 1
Week 2
Week 3
Week 4
Week 5
Week 6
Week 7
Week 8
Week 9
Week 10
Week 11
Week 12
Week 13
Mainland Hong Macau Korea Rest of APAC Japan W. North RoW Total
China Kong APAC Europe America
% stores closed WW Retail sales Luxury (comp) Closed Open
* At constant scope and exchange rates
21.04.2020 3
LUXURY HOUSES
Q1 2020 REVENUE: €3,066m
-16.0% REPORTED, -16.9% COMPARABLE
REVENUE CHANGE BY REGION AND CHANNEL REVENUE BREAKDOWN BY REGION
(in €m, and comparable growth in %) (on total Q1 revenue, in %)
RoW
3,648 +1% 7% (+1pt)
Western Europe
3,066 32% (+3pt)
-19% -7% -23%
Asia Pacific
32% (-6pt)
Q1 2019 FX impact Retail Wholesale Royalties Q1 2020
Japan North America
and others 9% (=) 20% (+2pt)
AN UNPRECEDENTED QUARTER
• Extreme monthly variations
– S t a r t i n g wi t h a s t r o n g J a n u a r y ( u p s o l i d d o u b l e d i g i t s )
– A d i f f i c ul t F e b r u a r y ( A s i a P a c i f i c s t o r e c l o s u r e s , t o u r i s m d e c l i n e i n t h e r e g i o n a n d W e s t er n E u r o p e )
– W or s e ni n g s i t u a t i o n i n M a r c h ( a l l s t o r e s c l o s i n g g r a d u a l l y i n E u r o p e a n d A m e r i c a, f o l l o we d b y c e n t r al l o g i s t i c s a n d p r o d u c t i on
facilities later in March)
• Comparable revenue decline led by Asia Pacific
21.04.2020 4
LUXURY HOUSES
AN UNPRECEDENTED QUARTER CONTRIBUTION OF KEY REGIONS TO RETAIL
COMP. REVENUE CHANGE IN Q1
• RETAIL -19% COMP. RoW
Japan
– A s i a P a c i f i c : c . 2 / 3 o f t h e d e c r e as e i n a b s o l u te t e r m s , l e d b y
Hong Kong SAR North
– G r a d u a l i m p r o v e m ent i n M a i n l a n d C h i n a t h r o u g h ou t M a r c h America
– E - c o m m er c e u p 2 1 % wi t h M a i n l a n d C h i n a u p t r i p l e d i g i t s
Western Greater
– E - c o m m er c e p e n e t r at i o n r i s i n g t o 9 % o f r e t a i l s a l e s ( + 3 p p Yo Y) Europe China
Rest of
APAC
• NATIONALITIES AND LOCALS vs. TOURISTS SPENDING
– D i f f e r e nt i a ted s i t u a t i o n a c r o s s b r a n d s , a c c o r di n g t o :
EXPOSURE TO CHINESE CLUSTER AND LOCAL
– L Y c o m pa r i s on b a s e SPEND VS. Q1 20 RETAIL DECLINE (IN COMP.)
– R e l a t i v e e x p o s ur e t o A s i a P a c i f i c , m i x o f n a t i o n a l i t i e s ,
e s p . we i g h t o f C h i n e s e c l u s t e r W W a n d i t s s p e n di n g a t
home vs. abroad 51%
% Chinese spend in Mainland China
– Common trend: 49%
– H e a v y r e p a t r i a ti o n o f s p e n d i n g 47% Gucci
45% Other Houses
Bottega Veneta
(Q1 19)
43%
• WHOLESALE -7% COMP. O N A CO M BINATI O N O F FACTO RS 41%
– More selective distribution
39%
– O r d e r a d j u s tm ent s Saint Laurent
37%
– L o g i s t i c s c e n t r al h u b c l o s u r e l a t e i n t h e q u a r t er
35%
% Chinese cluster (Q1 19)
Bubble size: value of Q1 20 revenue change
21.04.2020 5
GUCCI
Q1 2020 REVENUE: €1,804m
-22.4% REPORTED, -23.2% COMPARABLE
REVENUE CHANGE BY REGION AND CHANNEL REVENUE BREAKDOWN BY REGION
(in €m, and comparable growth in %) (on total Q1 revenue, in %)
RoW
5%
Retail (85% of sales): -24%
2,326
Western Europe
-20% 28%
-11% -19%
1,804
-32% -21% -20% -17%
Asia Pacific
37%
North America
21%
Q1 2019 Western North Japan Asia RoW Wholesale Royalties Q1 2020
Europe America Pacific and others Japan
9%
COVID-19 OVERSHADOWING BRAND STRENGTH
• Retail down 24%
– S t r o n g p o s i t i o n s i n A s i a P a c i f i c a n d h i g h p e n e t r a ti o n o n M a i n l a n d C h i n e s e c o n s um er i m p a c t i ng b r a n d ’ s d yn a m i c i n F e b r u a r y;
Gradual recovery of sales in Mainland China since early March
– C o n f i r m ed m o m e nt um i n N o r t h A m e r i c a i n J a n u a r y a n d F e b r u a r y, u p d o u b l e d i g i t s
– S t r o n g s t a r t t o t h e ye a r i n W e s te r n E u r o p e r e v e r s e d f r o m m i d - F e br uar y
– E - c o m m er c e p e n e t r at i o n a t 9 . 5 % o f r e t a i l s a l e s , l e d b y s t r o n g i n c r e a s es i n M a i n l a n d C h i n a a n d J a p a n
• Wholesale down; impact of logistics central hub shutdown late March
21.04.2020 6
SAINT LAURENT
Q1 2020 REVENUE: €435m
-12.6% REPORTED, -13.8% COMPARABLE
REVENUE CHANGE BY REGION AND CHANNEL REVENUE BREAKDOWN BY REGION
(in €m, and comparable growth in %) (on total Q1 revenue, in %)
RoW
Retail (63% of sales): -18%
6%
498 0%
-11% -17% 435 Western Europe
Asia Pacific
-34% -11% -6% -11% 38%
25%
Japan
7%
Q1 2019 Western North Japan Asia RoW Wholesale Royalties Q1 2020
Europe America Pacific and others
North America
24%
REGIONAL EXPOSURE MITIGATING DECLINE
• Retail down 18%
– S o m e p r o t e c t i on f r o m l o w r e l a t i v e p e n e t r at i o n i n A s i a P a c i f i c , s t r o n g p o s i t i o n wi t h l o c a l c l i e n t e l e s i n W es ter n E u r o p e a n d t h e
U S , a n d c u r r e nt l y l i m i t e d e x p o s ur e t o M a i n l a n d C h i n e s e c l i e n t e l e W W
– R o b u s t t r e n d s i n N o r t h A m e r i c a t h r o u g h l a t e F e b r u a r y, o f f s et b y M a r c h d o wn t u r n
– W es t er n E u r o p e s u p p o r t ed u n t i l e n d o f F e b r u a r y b y l o c a l c l i e n t e l e
– E - c o m m er c e p e n e t r at i o n a c c e l e r a ti n g , t h o u g h b r a n d n o t ye t l i v e o n l i n e i n M a i n l a n d C h i n a
• Wholesale down 6% following shipment discontinuation due to closure of logistics central hub
21.04.2020 7
BOTTEGA VENETA
Q1 2020 REVENUE: €274m
+10.3% REPORTED, +8.5% COMPARABLE
REVENUE CHANGE BY REGION AND CHANNEL REVENUE BREAKDOWN BY REGION
(in €m, and comparable growth in %) (on total Q1 revenue, in %)
RoW
Retail (76% of sales): -1%
9%
+55% +9% 274 Western Europe
+31%
+25% 30%
248 +74%
-19%
-20% Asia Pacific
32%
North America
Q1 2019 Western North Japan Asia RoW Wholesale Royalties Q1 2020 16%
Europe America Pacific and others Japan
13%
SUCCESSFUL REINVENTION PROVIDES SOME IMMUNITY
• Achievement in retail, nearly unchanged YoY
– O u t s t an di n g a p p r e c i a t i on o f t h e c o l l e c t i o ns b y l o c a l c l i e n t e l e s i n W es t er n E u r o p e a n d N o r t h A m e r i c a: b o t h r e g i o n s u p s t r o n g
double digits despite closure of all stores from mid-March
– A s i a - P a c i f i c m o s tl y p e n a l i ze d b y H K S A R a n d M a c a u ; J a p a n l a g g i n g
– E x c e p t i on al m o m e nt um o f e - c o m m er c e , r e v e n u e t r i p l e d f r o m l o w p e n e t r a ti o n b a s e
• Wholesale up sharply thanks to SS20 collection orders, despite limited delivery capacity towards end of quarter
21.04.2020 8
OTHER HOUSES
Q1 2020 REVENUE: €553m
-4.1% REPORTED, -5.4% COMPARABLE
REVENUE CHANGE BY REGION AND CHANNEL REVENUE BREAKDOWN BY REGION
(in €m, and comparable growth in %) (on total Q1 revenue, in %)
RoW
8%
577
-1%
553 Asia Pacific
-7%
-49% 22%
Western Europe
45%
Japan
Q1 2019 Retail Wholesale Royalties and others Q1 2020 9%
North America
16%
COUTURE & LEATHER GOODS JEWELRY & WATCHES
• Limited exposure to APAC, recent store network expansion and • Negative performance
retailization provide some protection
– D r i v e n b y wh o l e s a l e ( c . 6 0 % o f r e v e n u e m i x o n a v e r a g e )
– Balenciaga and Alexander McQueen resilient retail
– A n d h i g h W es te r n E u r o p e r e t a i l p r e s e n c e f o r B o u c h e r o n a n d
p e r f or m anc e i n W es t er n E u r o p e a n d t h e U S , n e a r l y o f f s ett i n g
P o m e l l a t o, h e a v i l y p e n a l i zi n g M a r c h p e r f or m a nc e
decline in Japan and APAC
– Qeelin bucking the trend
• Wholesale up, reflecting appreciation of the collections, despite
disruptions affecting deliveries late March
21.04.2020 9
FULLY MOBILIZED AGAINST COVID-19 PANDEMIC
SUPPORTING OUR EMPLOYEES, OUR
CONSUMERS AND SOCIETY
• Making health and safety of employees and clients our top priority
• Manufacturing medical equipment in Italy and France
• Masks and overalls in Gucci’s Italian workshop network
• Masks in the French workshops of Balenciaga and Yves Saint Laurent
• Importing masks from China for French and British health systems
• Supporting research on Covid-19 with a financial donation to Institut Pasteur
• Supporting innovative projects such as the “3D COVID” project, making bank of
3D printers available to the Public Hospitals of Paris
• Tackling the emergency needs through financial donations to:
• the Hubei Red Cross in China
• four major hospitals foundations in Italy in Kering’s Houses home regions
• the CDC Foundation in the US
• Backing initiatives supporting the fashion industry in the US
• Along with concrete initiatives from our Houses:
• Gucci, in support of the World Health Organization, and the Italian Civil
Protection Department
• Pomellato and Dodo through a crowdfunding initiative against domestic
violence in Italy
21.04.2020 10ENSURING BUSINESS CONTINUITY AND READINESS
SUPPLY CHAIN & LOGISTICS MERCHANDISING & DISTRIBUTION COST REDUCTION
• Inventory management of SS 20 • Adaptation of the collections and • Rent relief: ongoing negotiations with
merchandising (shelf life, depth and landlords
• Central management to allow inventory #SKUs in the assortment)
reallocation across regions or towards e- • Personnel variable remuneration, salary
commerce • Virtual showrooms & hiring freeze
• Regional warehouses still operating • Optimization of distribution and product • Reduction in executive compensation
allocation
• SG&A control, A&P
SOLID FINANCIAL STRUCTURE
CASH MANAGEMENT GETTING READY TO RESTART
LlQUIDITY SECURED
• Postponement of non-critical projects • Low financial leverage • Ensuring health and safety
• Safeguarding key capex projects related • No significant short-term maturities, well- • Resuming production and central
to growth platforms (digital, e-commerce, balanced bond repayment schedule logistics operations
IT, logistics) • Undrawn confirmed lines of credit: €3bn • Planning for gradual store reopenings
• Focus on inventory management • Strong support from our banks, extension and upcoming collections
of confirmed lines of credit, access to
financial markets • Be ever more agile, flexible, relevant
21.04.2020 11Q&A
APPENDIX: LUXURY HOUSES DOS NETWORK
NUMBER OF DIRECTLY OPERATED STORES
As of December 2019: 1,381 As of March 2020: 1,383
499 503
324 321
226 226 220 220
112 113
W estern Europe North America Japan APAC RoW
As of YE As of end of March Net openings
2019 2020 in the quarter
Breakdown by Houses
Gucci 487 487 -
Saint Laurent 222 224 +2
Bottega Veneta 268 264 -4
Other Houses 404 408 +4
Total Luxury Houses 1,381 1,383 +2
21.04.2020 13Gucci • Saint Laurent • Bottega Veneta
Balenciaga • Alexander McQueen • Brioni •
Boucheron • Pomellato • Dodo • Qeelin • Ulysse Nardin • Girard-Perregaux
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