INVESTOR DAY - JUNE 7, 2018
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INVE S TOR DAY - JUNE 7, 2018
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 Eyewear vision and strategy. 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.
2STRATEGIC THE ONE AN KEY LOOKING
RATIONALE AND ONLY INNOVATIVE ACHIEVEMENTS AHEAD
LUXURY BUSINESS
EYEWEAR MODEL
COMPANYSTRATEGIC RATIONALE
STRATEGIC RATIONALE
The Eyewear Market is Relevant and Growing
2017 AND 2020 GLOBAL EYEWEAR 2017 PREMIUM FRAMES AND
MARKET BY SEGMENT SUNGLASSES
Values, €B
8 %
G R 130
C A
15% Sunglasses
105
14% €13B at WHS
29% Frames value*
28%
45
Lenses 30
58%
56% Contact Lenses
15
Optical Acc.
2017 2020E Frames and White Label Premium Frames
Sunglasses and and Sunglasses
Off-the-shelf
Note: Retail Values, 2017 Market Data; *Based on the average Retail / Wholesale Ratio in the Eyewear industry (2.3x); €/$ Fx at 1.13x
Source: Euromonitor, Worldwide Luxury Markets Monitor Bain & Company and Altagamma 5STRATEGIC RATIONALE
High-End Frames and Sunglasses Competitive Arena
HIGH-END* FRAMES AND SUNGLASSES COMPETITIVE ARENA
WHS Value, €B 20+ Players, 70+ Brands
Others
~13
~3 **
~10
Premium Others High-End
Frames and
Sunglasses
Note: *Estimated High-end Wholesale Value; Brands included in the Panel: >€180-190 SRP in Italy, €190-200 SRP in Europe; the majority of styles of the selected Brands above €220 SRP; **Officially
distributed by Kering Eyewear starting from January 2019 6STRATEGIC RATIONALE
A Strategic Category for Luxury Brands
Low
■ Eyewear is a strategic category
for global luxury and high-end Frames
brands
■ Frames and Sunglasses
Jewelry
represent an outstanding Apparel
opportunity for luxury brands to Entry
Price
attract new consumers, given
their affordable entry price and Shoes
their role as an aspirational Watches
fashion accessory
Bags
■ The Sunglasses segment has the
highest growth potential
High
Low High
Category Growth
(2017 vs. 2016)
Notes: Estimates based on the typical offering and positioning of a Luxury Fashion Player; Entry price of Watches and Jewelry categories referring to the fashion offering
Source: Worldwide Luxury Markets Monitor Bain & Company and Altagamma 7STRATEGIC RATIONALE
A Profitable Business
STANDARD P&L STRUCTURE % ON REVENUES
Revenues 100%
Gross Margin ~60%
■ A profitable category for global
luxury and high-end brands
Royalties & Marketing ~23%
■ Average Gross Margin at 60%
Contribution
■ EBIT at 10-11%
Salesforce ~7%
Other G&As ~19-20%
EBIT ~10-11%
Notes: Standard P&L based on Best Practices
8THE ONE AND ONLY LUXURY EYEWEAR COMPANY
THE ONE AND ONLY LUXURY EYEWEAR COMPANY
The Strategic Pillars to Build Kering Eyewear
PRODUCT
Much closer to each brand’s DNA
■ Fully reflect brands’ identities and new
trends in the Eyewear category
■ Enable a closer collaboration between the
Design teams
10THE ONE AND ONLY LUXURY EYEWEAR COMPANY
The Strategic Pillars to Build Kering Eyewear
QUALITY
An unparalleled and unseen level of quality in the
Eyewear category
■ Leverage on a network of carefully selected suppliers
which are the best-in-class in the industry
■ Choose the best materials and manufacturers, starting
from a specific style and its characteristics (material,
specific features, price point, etc.)
11THE ONE AND ONLY LUXURY EYEWEAR COMPANY
The Strategic Pillars to Build Kering Eyewear
DISTRIBUTION
Fully aligned with each brand’s image and
positioning
■ Establish a qualitative distribution, selecting and serving
only the best doors worldwide
■ Maintain a tight control over the market through a
direct control of the salesforce
12THE ONE AND ONLY LUXURY EYEWEAR COMPANY
Kering Eyewear
Our Mission Our Portfolio of Brands
■ Be the world leader in Luxury & High-end Eyewear
(Frames and Sunglasses), developing a unique ‘ensemble’
of powerful brands
*
■ Empower our brands to go beyond their limits in
Eyewear, supporting their capacity to lead and innovate, to
realize their artistic and financial potential, in the most
imaginative and sustainable manner
Note: *From January 2019
13November Feasibility Study Start 2013
October Kering Eyewear Set-up May 2014-2020 Business Plan Approval 2014
June The Official Launch 2015
October The Gucci Launch 2016
October The Cartier Launch following The Partnership with Richemont 2017
AN
STRATEGIC
INNOVATIVE
RATIONALE
BUSINESS
MODELAN INNOVATIVE BUSINESS MODEL
A Complex Category for a Luxury Player as the Starting Point
NOT AN ‘EASY TO MAKE’ LONG LEAD-TIME OF FRAGMENTED DISTRIBUTION LUXURY AS A NICHE
PRODUCT PRODUCTION
■ Several Components ■ Average Production time of 3 ■ Wholesale as the main ■ Mass segment is predominant
months business model in the category
■ Multiple materials
■ Multiple Competences ■ 7 Different Channels to be
■ Different Suppliers working Covered
on the same styles
Luxury means uncompromised Luxury means selecting the Luxury means serving only the Luxury means direct control
quality for each and every best manufacturers worldwide best stores worldwide over the distribution through
component employed sales, marketing
and training teams
20AN INNOVATIVE BUSINESS MODEL
Design and Product
Development
Marketing &
Communications
■ A constructive interaction with
Design and Product
Development is key
■ In an internalized business model,
DESIGN
all key creative processes are at the heart
strongly integrated with the
brand’s Creative teams
Supply Chain and Sales and
Manufacturing Distribution
21AN INNOVATIVE BUSINESS MODEL
Design and Product
Development
■ Designers specifically dedicated to the brands, working ■ A dedicated and specialized Asian Design team to
full time at the brands’ offices (e.g. in Rome for Gucci and develop specific shapes, styles and fittings specific for the
Paris for Saint Laurent) Asian markets
■ A London-based dedicated Design team to guarantee full ■ An in-house state of the art Prototype team and CAD
integration with the British brands (e.g. Stella McCartney, (Computer-Aided Design) Lab to guarantee quality,
Alexander McQueen, McQ, Christopher Kane) flexibility and execution speed during Collection Approvals
and Special Projects
22AN INNOVATIVE BUSINESS MODEL
Design and Product
Development
1. MARKETING ANALYSIS
2. INSPIRATION
■ A unique way of working together,
based on 4 phases: Marketing Analysis,
AN
Inspiration, Ideation and Implementation INTEGRATED
■ An efficient, collaborative and holistic PROCESS
design approach to anticipate time to
market
4. IMPLEMENTATION
3. IDEATION
23AN INNOVATIVE BUSINESS MODEL
Design and Product
Development
A SHORTENED LEAD-TIME TO PRODUCTION CALENDAR ALIGNMENT
Eyewear
Brand Collections
COLLECTION Collections
BRIEFING
DESIGN Cruise SS Pre-Fall FW
HAND-MADE
PROTOTYPES
COLLECTION SS
APPROVAL
ENGINEERING
KICK-OFF
4 weeks FW
4 weeks
2 weeks Fashion-show
specific style
10 weeks
24AN INNOVATIVE BUSINESS MODEL
Design and Product
Development
PRODUCT COLLECTIONS TO MEET SPECIFIC MARKET NEEDS
■ Collections fully aligned with market requirements, thanks to continuous feedback from our partners and
agility to react quickly to customers and market input
■ Product Managers and Designers working closely together to develop products specific to market needs
■ Optical capsule dedicated to US consumers
■ Dedicated products for specific channels (e.g. Travel Retail)
■ Universal Fit styles as an adaptation of International styles (including Asian, Korean and Japanese fit)
■ Asian designs specifically developed for the Asian Market
2526
AN INNOVATIVE BUSINESS MODEL
Supply Chain and
Manufacturing
■ A flexible sourcing strategy, based on a network of very carefully selected suppliers offering a broad range of
technologies, which allows:
■ A boundaries-free creative and product development process
■ A unique product enrichment (technical & qualitative solutions) through specific know-how coming from a
diversified suppliers’ base
■ Lead-time optimization / reduction
■ Perfect alignment with Fashion calendars (SS, FW, PR events in March and October, Cruise, Fashion shows)
■ On-time collection presentation to key Customers / Sales teams through industrialized product (TCS at Strike
events)
■ A new way of working in planning production quantities
27AN INNOVATIVE BUSINESS MODEL
Supply Chain and
Manufacturing
PRODUCTION LOCALIZATION
Units produced (Value, %)
■ 42 active Suppliers as per June
2018, from 4 countries (Italy, China*
China, Japan and France) France ~ 5%
~5%
■ Italy as the main manufacturing
h u b f o r K e r i n g E y e w e a r,
accounting for ~65% of total
production needs Italy
~65% Japan
~ 25%
Note: *Including Suppliers based in Hong Kong and Taiwan
28AN INNOVATIVE BUSINESS MODEL
Supply Chain and
Manufacturing
CADORE
OVER 20 SUPPLIERS LOCATED IN ITALY ~10 Suppliers in the Area
■ Across the two most important Eyewear districts in the
world: Cadore and Valdobbiadene
■ Providing: VALDOBBIADENE
~10 Suppliers in the Area
■ Unique craftsmanship skills and competences
■ Proven manufacturing expertise
■ Quality and innovation
■ Unparalleled ability to immediately react to
market needs, efficiently managing the open
portfolio
■ Higher flexibility in product allocation
■ Reduced investments on fixed assets
2930
AN INNOVATIVE BUSINESS MODEL
Supply Chain and
Manufacturing
STRATEGIC PRODUCT PARTNERSHIP AGREEMENT (SPPA) WITH SAFILO
■ Product Partnership with Safilo covering the Product Development,
Manufacturing and Supply of Gucci Eyewear between December 2015 and
December 2020
Rules of Engagement
■ Minimum quantity commitment agreed and decreasing annually
■ Safilo as the main producer for Made in Italy products
■ Delivery calendars and quality standards firmly set
31AN INNOVATIVE BUSINESS MODEL
Supply Chain and
Manufacturing
MANUFACTURE CARTIER LUNETTES
Having a plant in France mainly dedicated to Cartier is a competitive advantage
■ Guarantee Made in France and continuity with the brand’s DNA
■ Develop products with very “specific” know-how such as solid gold, wood and horn in line with market request
Our Goals
■ Increase volumes and plant saturation
■ Boost production efficiencies
■ Enhance competences on specific production phases (soldering, lacquering) and rebalance direct / indirect
workforce ratio
MAKE MCL THE BEST-IN-CLASS PRODUCTION FACILITY IN THE INDUSTRY
32AN INNOVATIVE BUSINESS MODEL
Marketing and
Communication
STRONG BRAND INTEGRATION
■ From external partners to colleagues: a new relationship with our brands
■ Continuous interaction during collection development ensuring full alignment with brand
trends
■ Eyewear fully integrated into our brands’ worlds and categories
■ 360° activities and projects
33AN INNOVATIVE BUSINESS MODEL
Marketing and
Communication
PRODUCT COMMUNICATION
■ Eyewear fully integrated into the core ■ Collaboration and synergy during
category collection campaign shooting
A 360° approach fully integrated
with each of our brands’ image and
PR & EVENTS platform DIGITAL
■ Communication timing reflecting fashion ■ Eyewear present in all digital activities
seasonality and platforms
■ Conceive, design and manage trade tools
IN-STORE VISIBILITY and special projects hand-in-hand
34AN INNOVATIVE BUSINESS MODEL
Marketing and
Communication
MARKET-RELEVANT CONTENT AND STORYTELLING
■ Customer-centric campaigns, created and developed together with our brands to meet specific market needs
■ Custom-made Point of Sales creativity
■ Dedicated advertising and communication assets
■ Enriched experience through additional tools (e.g. digital in-store retailtainment features)
■ Extensive use of local key opinion leaders, celebrities, brand ambassadors
■ Digital activations through specific platforms (e.g. WeChat, Weibo, Hypebeast in Asia), leveraging on digital
content developed in synergy with the brands
■ Strong and consistent executions at all levels for specific market (out-of-home, print, digital, in-store, airports)
35AN INNOVATIVE BUSINESS MODEL
Distribution
SELECTIVE DISTRIBUTION
■ To ensure alignment between doors and each of our brands’ image and positioning
■ Selection of Optical Retailers based on objective standards, to guarantee a qualitative presentation of the
products and a luxury service to consumers
■ Selective distribution allows a more effective, productive and integrated management of brand investment
in the Point of Sales
■ Full consistency between target distribution and brand positioning:
■ Objective qualitative criteria applied globally to both brick and mortars and E-Tailers
■ Predefined Distribution Contract also extended to Minimum Order Quantities by brand
36AN INNOVATIVE BUSINESS MODEL
Distribution
AN INNOVATIVE DISTRIBUTION STRATEGY
PRODUCT TRADE MARKETING
STRATEGY MARKETING CAMPAIGNS
STRATEGY
High-end /
Niche
■ From a disorganized distribution approach to distribution SUPREME Limited Tailor
Editions Made Exclusive
segments based on quality of the Point of Sales, location and Fashion
consumer targets Fashion
Show
PRESTIGE Show Special
Creativity
■ From an undifferentiated offering to Product, Marketing, Styles
Trade Marketing and Marketing campaigns specific to each Point of Sales
cluster, to convey a tailor-made approach in each segment profile
GLAM
Main
■ Distribution strategy consistent with brand priorities in terms Main-
stream Institutional Commercial
of markets and channels Collection Campaigns
■ Projects and activities focusing on “benchmark cities” DIFFUSION
ONLY
■ Support and tools consistent with distribution segment Entry-Level/
needs Mainstream
Number of doors
37AN INNOVATIVE BUSINESS MODEL
Distribution
DOORS SEGMENTATION CRITERIA
■ Distribution network set-up based on two main criteria:
SUPREME
■ Selective distribution for high-end market focusing on qualitative
～500 Doors
and quantitative criteria: survey completed and dedicated
distribution contract signed for each door
Selective
PRESTIGE
■ Qualified distribution for Sport & Lifestyle brands ～4,000
■ To further expand distribution:
Qualitative
GLAM
■ Introduction of a third criterion: the Gucci qualitative distribution ～19,500
■ Three distribution clusters with a differentiated Product,
Marketing, Trade Marketing and Go-to-Market action plan DIFFUSION
Diffusion
(Supreme, Prestige, Glam) ONLY
～6,000 Doors
■ Minimum qualitative requirements
■ Brand adjacencies as an “entry condition” # of doors
38AN INNOVATIVE BUSINESS MODEL
KERING EYEWEAR OFFERING Distribution
>650
Price
Positioning 350
(SRP, €)AN INNOVATIVE BUSINESS MODEL
Sales
A WELL-ESTABLISHED GLOBAL PRESENCE WITH THE BEST TEAM IN THE INDUSTRY
Re-write the history of Eyewear through:
■ Direct control of key markets, with a lean organizational structure, leveraging on Kering Group local
presence
■ Highly selected network of distributors, perfectly matching the company’s mission and its long-term
strategy
■ Strong relevance of centralized and shared channels (e.g. Travel Retail and DOS), in synergy with our
brands
■ Expertise vs. geography-driven approach (pooled expertise on E-Tailers in the UK, Department Stores in the
US, International Key Accounts in Italy)
■ Long-lasting relationships with key partners
■ Upscale events, offering a luxury experience to the customers
40AN INNOVATIVE BUSINESS MODEL
Sales
SYNERGIES IN THE SHARED CHANNELS ARE KEY
■ A fully dedicated centralized team, working hand-in-hand with brand Merchandising teams, based in HQ
■ A unique and dedicated approach to our 15 brands’ directly-operated and franchising stores (including
fashion specialists attending brand showrooms) to unleash the full potential of Eyewear category
■ Best-in-class Travel Retail team leading the way also for other product categories
■ Full Eyewear integration thanks to:
■ Presence in all brands’ Sales campaign
■ In-store delivery timing in line with the other categories (allowing ‘total look’ concept and cross-selling
opportunities)
■ Enhanced sell-out thank to Regional Eyewear Expert teams and collaborative planning based on sell-out
and stock data sharing
■ Close liaison with brands’ regional offices, working directly with Store Managers for Training, Visual
Merchandising Guideline implementation and Incentive Plan definition
41KEY
STRATEGIC
ACHIEVEMENTS
RATIONALEKEY ACHIEVEMENTS
2017 Key Figures and Facts
Value, €M
352
■ Sales in line with target at €352M (contribution to
consolidated revenue €272M) 272
■ Profitability* at Kering Eyewear level at 5%
■ A complete and balanced portfolio of 15 brands, all
successfully activated, covering all segments in Luxury & High-
end fashion
■ 7 collections, >3,000 styles and >14,000 SKUs
developed
■ ~500 additional people (~300 hired and ~200 fromMCL
integration), >930** end of 2017
Sales Royalties Intercompany Consolidated
Revenue at
Kering Level
Notes: *EBIT on Sales, Profitability at ~0% at Kering Group level; **Including Sales Agents and Temporary Staff
43KEY ACHIEVEMENTS
An Established Company with a Lean Organization
OUTSTANDING PEOPLE RAMP-UP SINCE 2015 UNIQUE SET OF HIGHLY SKILLED PROFESSIONALS
People, #
932*
Gender (%)
58% 42%
440
Nationality (%)
198 63% 37%
Average Age 36 y
December 2015 December 2016 December 2017
■ In 2017: ~300 people hired and an additional ~200 ■ A carefully managed in-house HR Selection Process
from MCL to ensure the recruitment of the best people in the
industry, keeping hiring costs under control
■ Lean organizational structure to innovate the “way of
working” and to quickly adapt to changes ■ A clear competitive advantage recognized by the
industry
Notes: *Including Sales Agents and Temporary Staff
44KEY ACHIEVEMENTS
3-Year Sales Evolution
Full Year Sales Value, €M
352 ■ 2017 Full Year Sales at €352M
■ >100 countries served (20 directly through 10
subsidiaries*)
■ Tight control over distribution through >200 Brand
Ambassadors and innovative Sales Campaigns in
74 prestigious venues, local roadshows and top-quality
Kering Eyewear showrooms
10
2015 2016 2017
Notes: *Number of Subsidaries at the end of 2017, 13 as per May 2018
45KEY ACHIEVEMENTS
2017 Revenues Split
BY AREA
Value, %
Americas
~ 20%
Centralized
Channels*
~ 40%
■ Centralized Channels* at 40%, opportunity to
further expand APAC and Americas
APAC
~ 15%
EMEA
~ 25%
Notes: *Centralized Channels include Global Travel Retail, International Key Accounts, Brand Boutiques, EMEA and LATAM Distributors
46KEY ACHIEVEMENTS
2017 Revenues Split
BY CHANNEL
Value, %
Distributors
~ 15%
■ 3O’s* representing ~50% of Total Revenues 3O's*
~ 50%
GTR, IKA,
DOS, DS**
~ 35%
Notes: *Opticians, Optometrists, Ophthalmologists; *Global Travel Retail, International Key Accounts, Brand Boutiques, Department Stores
47KEY ACHIEVEMENTS
2017 Revenues Split
BY CATEGORY
Volumes, %
Optical
~ 30%
■ Further potential for optical category
Sun
~ 70%
48KEY ACHIEVEMENTS
2017 Revenues Split
BY GENDER
Kids Volumes, %
~ 2%
Unisex
~ 20%
■ Women representing the biggest segment
(~48%), strong opportunity to boost the
Unisex segment (now at ~20%) Women
~ 48%
Men
~ 30%
49KEY ACHIEVEMENTS
Internalization vs. Licensing
2017 SALES VS. LAST YEAR UNDER PREVIOUS LICENSEE
Sales Value, % 350%
250%
200%
■ 2017 Full Year Kering Eyewear Revenues 150%
significantly better than the last comparable 100%
year under a Licensing Business Model*
15%
Internalized since 2017 2015 2015 2015 2015 2015
Notes: *2014 for Saint Laurent, Bottega Veneta and Alexander McQueen, Stella McCartney, Puma; 2016 for Gucci
50KEY ACHIEVEMENTS
Design and Product
Development
7 COLLECTIONS AND >3,000 STYLES DEVELOPED
FW 2015 SS 2016 FW 2016 SS 2017 FW 2017 SS 2018 FW 2018
(Collezione 1)
650
550 Styles
Styles 500
Styles 450
Styles
400
300 Styles
200 Styles
Styles
51KEY ACHIEVEMENTS
Supply Chain and
Operations
UNITS PRODUCED MIX BY MATERIAL (%, IN 2017)
# of units (M) Volumes (%)
~ 3x Titanium, Gold,
5%
Horn, Wood
Injection
3%
Metal
25%
Acetate
67%
2016 2017
52KEY ACHIEVEMENTS
Marketing and
Communication
THE 360º PROJECT WITH CARTIER AS A PERFECT EXAMPLE OF KERING EYEWEAR’S STRONG
INTEGRATION WITH BRANDS
■ Eyewear presence in all global Brand Communication ■ Extra outdoor and digital investment in key markets to
platforms: exploit all synergies with in-store visibility activities:
■ Instagram ■ Billboards in high-traffic locations
■ Facebook ■ A widespread, high-proximity outdoor network
through free standing units in Milan
■ Twitter
■ Tailor-made Windows
■ Linkedin
■ New Institutional Windows
■ Cartier Website Homepage
5354
KEY ACHIEVEMENTS
Sales and
Distribution
A GLOBAL PRESENCE AND A NEW WAY TO SERVE THE MARKET
■ A strong presence established worldwide, with more than 12,000 Customers and 30,000 Doors served every day,
13 Subsidiaries and ~50 highly selective Distributors
■ An established presence in key Department Stores in US, Europe and Asia
■ Multiple flawlessly executed projects involving dedicated products, visibility and tools: e.g. Gucci Hero
Campaign dedicated to Global Travel Retail, Boucheron limited edition in the Middle East and Saint Laurent SS
2018 Asian Campaign featuring Z Tao
55KEY ACHIEVEMENTS
Sales and
Distribution
A LUXURY APPROACH FOR ALL SALES EVENTS
■ Amazing venues selected ■ Impeccable execution and ■ Obsession for detail to deliver a
worldwide (Antibes, New York, brand-centric approach, through unique and luxurious experience
Milan, Shanghai) enhanced storytelling around to customers worldwide
Eyewear
5657
KEY ACHIEVEMENTS
Sales and
Distribution
APAC BEST PRACTICES
PRODUCT MARKETING APPROACH GO-TO-MARKET STRATEGY
■ Several styles developed ■ Dedicated advertising campaigns ■ Strategic partnerships established
specifically for the Asian market featuring local brand ambassadors with Top Retailers
■ Asian Fit and Design ■ Ni Ni for Gucci ■ Perfectly executed in-store events
■ Asian Styles representing >80% ■ Z Tao for Saint Laurent ■ Dedicated packaging
of Total Sales and the majority of
■ Comprehensive 360° activation ■ Exclusive styles
Best Sellers in Asia
through all relevant channels ■ Luxury concept store roll-out
■ Print, digital, out-of-home, in-shop
58KEY ACHIEVEMENTS
Sales and
Distribution
CENTRALIZED CHANNELS* BEST PRACTICES
PRODUCT MARKETING APPROACH GO-TO-MARKET STRATEGY
■ Products always in line with ■ Specific marketing campaigns to ■ Exclusive agreements in place
specific market needs engage local consumers with best retailers for each region
■ Cartier Domination in the Middle and channel
■ Boucheron Capsule Collection for
Middle East East
■ Implementation of collaborative
■ Gucci Hero Global Travel Retail planning for key brands based on
■ Dedicated Travel Retail products Campaign
with a unique appeal for sell-out and stock data sharing
international travelers ■ Multiple advertising tools to
maximize impact through all
■ Gucci for DFS relevant touchpoints
Notes: *Centralized Channels include Global Travel Retail, International Key Accounts, Brand Boutiques, EMEA and LATAM Distributors
59LOOKING
STRATEGIC
AHEAD
RATIONALELOOKING AHEAD
The Ambition
EXPECTED SALES EVOLUTION EXPECTED EBIT MARGIN EVOLUTION (ON SALES)
Value, €M Value, %
>750
352 >10%
~ 5%
2017 202y 2017 202y
Consolidated Revenue On Consolidated
at Kering Level (€M)
272 600 - 650
Revenue (%) ~ 0% >10%
61LOOKING AHEAD
Drivers For Future Growth
STRENGTHEN AND
EXPAND THE CORE
BUSINESS
Increase
Profitability
Offering
Evolution and
Expansion
Continue to invest in
Sustainability and
Innovation
Enhance
Distribution in
Consolidate WW new Channels
presence through
further expansion in
key strategic
markets
Ensure tighter
control over the
Value Chain
62LOOKING AHEAD
Ensure Tighter Control over the Value Chain
A NEW, FULLY AUTOMATED LOGISTICS CENTER WILL OPERATE STARTING FROM JANUARY 2019 AND WILL ENSURE:
■ End-to-end control over logistics processes and people
■ Higher efficiency compared to current outsourced model
■ Full compliance with Kering Eyewear’s quality standards
■ Smart automation to achieve flexibility
■ Dedicated solution to manage different product categories and customer needs
■ Shorter lead-time and higher quality as a consequence of lower manual work
■ Ownership to enable scalability
■ Ability to react quickly to volumes increase without affecting performance
63LOOKING AHEAD
Consolidate WW Presence Through Further Expansion in Key Strategic Markets
Existing Subsidiaries Markets’ served by High Potential Areas to
Distributors Serve Directly
■ Directly expand into key and
fast growing markets keeping
a lean organizational structure
and leveraging on Kering
Group’s local presence Middle East
South-East Asia
64LOOKING AHEAD
Expand Distribution in New Channels – Digital
■ Further strengthen existing strategic partnerships with top global fashion E-Tailers (Net-A-Porter, Mr Porter,
MatchesFashion, MyTheresa, etc.)
■ Use a multi-brand portfolio approach with one contact point for all brands (covering both women’s and
men’s categories)
■ Develop exclusive collaborations for Capsule Collections, Avant-Première and Limited Editions
■ Leverage on unique synergies with multi-category brand marketing and social media campaigns
65LOOKING AHEAD
Expand Distribution in New Channels – Digital
EXPLOIT DIGITAL OPPORTUNITY IN CHINA...
■ China is the number one e-commerce market in the world and still showing a double-digit growth
■ E-commerce able to serve 3rd and 4th tier cities in China with little or no Eyewear retail presence
…THANKS TO STRATEGIC PARTNERSHIPS WITH KEY PLAYERS
■ In March 2018, Kering Eyewear opened a flagship store on JD.com platform
• JD.com is China’s largest retailer serving over 290 million customers
• JD.com acts as the only authorized distributor of Kering Eyewear products
The extraordinary results achieved so far through the flagship store make this partnership the first in a series of important
steps to further strengthen our online presence in China and worldwide
66CHINA DIGITAL OPPORTUNITY
Kering Eyewear on JD.com
Launch March 12
Unique Visitors >650,000*
Units Sold per week (#) >300*
Z
Notes: *End of May data; all the unauthorized resellers of Kering Eyewear products were closed before launching the Partnership with JD.com
67LOOKING AHEAD
Expand Distribution in New Channels – Shop-In-Shop
Partner with best-in-class retailers worldwide to establish a direct presence in key cities and locations
to be used as a marketing tool and a trend spotting feature
First shop-in-shop opened in partnership with Coterie in Beijing Sanlitun in May 2018
68LOOKING AHEAD
Continue to Invest in Sustainability and Innovation
3.
Sustainability into our corporate
DNA to educate our employees in their
2. day-to-day work habits
Work closely with our suppliers to
reduce environmental impacts
1.
across supply chain while preserving
Italian culture, craft and tradition
Create strategic Research and
Development partnerships for
innovative and sustainable materials to
revolutionize the Eyewear industry
• Ongoing partnership with Bio-on
to create biodegradable
spectacles
69LOOKING AHEAD
Offering Evolution – The Optical Category
TODAY’S OFFERING AMBITION
Volume, %
Volume, %
Optical
~30%
■ Fully exploit the Optical
potential of our brands
Optical
moving towards a more
45%
balanced offer
Sun
55%
Sun
~70%
70LOOKING AHEAD
Offering Evolution – The Unisex Segment
TODAY’S OFFERING AMBITION
Volume, % Volume, %
Kids Kids
~ 2% ~ 2%
Unisex
~ 20%
Unisex
■ Leverage on the “gender fluid” ~ 30%
trend further enlarge our
Unisex offering and attract Women
~ 40%
new consumers Women
~ 48%
Men
~ 30%
Men
~ 28%
71LOOKING AHEAD
Offering Expansion – Balenciaga
OUTSTANDING BRAND UNIQUE CODES AND ICONS
MOMENTUM
■ Leverage on the brand’s extraordinary
momentum to relaunch the Eyewear
category
■ Align Eyewear to Balenciaga’s DNA
and Creative Direction, through a
unique offering which fully covers all the
brand’s codes and icons
Source: Lyst Index Q1 2018; Business of Fashion: “Balenciaga is Kering’s Fastest Growing Brand”, May 22 2018
72LOOKING AHEAD
Increase Profitability
>10%
■ Increase Gross Margin
thanks to a fully
optimized Supply Chain
■ Exploit revenues full (MCL, SPPA, strengthened
Efficiency partnerships with key
potential and reach a
~5% proper scale across suppliers)
markets
Scalability
■ Add incremental business
leveraging on the
existing structure
EBIT 2017 EBIT 202y
7374
Q&A
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