2007 Annual Results : Outstanding 2007 performances
Outstanding 2007 performances
- Substantial growth in recurring operating income: +33%
- Net income from continuing operations, Group share, at record level: €1,058 million (+51%)
- Further growth in free cash flow from operations: +32%
François-Henri Pinault, Chairman and Chief Executive Officer, said: “PPR once again achieved outstanding operational and financial performances in 2007, and I wish to thank all our teams for their contribution. These results reflect the strength of our brands and retail concepts, active in the fastest-growing consumer and luxury goods segments in over 90 countries. Our success is also due to the ongoing implementation of our strategy, which gives the Group a remarkably dynamic and balanced profile, a key competitive edge in today’s tougher economic environment. PPR is confident in delivering another year of growth and improved financial performances in 2008, while pursuing its expansion in high-growth markets.”
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Sharp growth in 2007 revenues
In 2007, PPR achieved revenues from continuing operations of €19.8 billion, up 16% on a reported basis and 7% on a comparable basis compared to 2006. The year was marked by the acquisition and first-time consolidation of Puma, which has enhanced PPR’s portfolio of global brands with strong growth potential.
Notable growth in recurring operating income
Group recurring operating income amounted to €1,696 million, up 33% compared to 2006. The recurring operating margin rose by a sizable 1.1 point, to 8.6% of revenues. This remarkable growth was primarily driven by sharp rises in recurring operating income at CFAO (+27%), Fnac (+15%) and all Gucci Group brands (+29%). The Gucci Group brands posting the strongest improvements were Bottega Veneta (+69%), Yves Saint Laurent (+35%) and Yves Saint Laurent Beauté, which doubled its recurring operating income.
Excluding Puma, recurring operating income was up 14% and recurring operating margin stood at 8.1%.
Net income from continuing operations, Group share, reaches record level
PPR achieved a 51% increase in Group share of net income from continuing operations, which reached a record €1,058 million in 2007. This strong gain is attributable to the positive financial impact of the Puma consolidation and significant growth in Group operating performances, as well as strict control over financial expenses and current taxes.
Excluding the Puma contribution, consolidated net income from continuing operations at historical group structure totaled nearly €1 billion for the year ended December 31, 2007, an increase of 33% compared to 2006.
Net income, Group share stood at €922 million, up 35% compared to 2006.
Group share of net income from continuing operations excluding non-current items increased by 27% to €904 million in 2007.
Net earnings per share stood at €7.19, up more than 27% compared to 2006. Excluding non-current items, net earnings per share from continuing operations rose by over 20% to €7.05 for the year ended December 31, 2007.
A solid financial structure
The PPR Group balance sheet at December 31, 2007 reflects the impact of the acquisition and first-time full consolidation of Puma.
Free cash flow from operations reached €1,394 million in 2007, a substantial 32% increase over 2006. Excluding the impact of the consolidation of Puma, free cash flow from operations at historical Group structure was up nearly 12% compared to 2006.
Capital employed increased by 36% compared to the previous year-end. Excluding the Puma consolidation, capital employed at PPR historical Group structure amounted to €12,375 million as of December 31, 2007, virtually unchanged from the prior-year level.
Shareholders’ equity rose by €1,537 million compared to December 31, 2006. This rise reflects the increase in minority interests, primarily attributable to the entry of Puma within the Group scope of consolidation.
PPR net indebtedness amounted to €6,121 million as of December 31, 2007. The change primarily reflects the acquisition of 63.6% of the Puma share capital in 2007.
A significantly higher dividend
Pursuing its policy of sustained dividend growth, the Board of Directors will ask the June 9, 2008 Shareholders’ Meeting to approve a dividend payment of €3.45 per share, representing a 15% increase compared to the dividend for 2006. The dividend will be payable as of June 16, 2008.
A project for strategic agreement was concluded between PPR and L’Oréal regarding YSL Beauté.
Notwithstanding changes expected in its economic environment and thanks to the geographical balance of its activities, the power of its brands and retail concepts, the relevance of its business models and the talent of its teams, PPR expects to achieve another year of growth and improved financial performances in 2008.
The Group’s consolidated financial statements (as at December 31, 2007) are available at www.ppr.com.
Download the press release (pdf - 168Ko)
You may attend the presentation of the 2007 Annual Results today at 8.30 am Paris time at the« PublicisCinema » - 129, avenue des Champs-Élysées – 75008 Paris.
A live videocast (Real and Windows Media Player formats) as well as the presentation slides (PDF) will be available at 8.30am Paris time at www.ppr.com. A replay will be available later in the day.
You will also have the opportunity to podcast the presentation at www.ppr.com later in the day.
PPR develops a portfolio of high-growth global brands. Through its general consumer brands and its luxury brands, PPR generated sales of EUR 19.8 billion in 2007. The Group is present in 90 countries with approximately 93,000 employees. PPR shares are listed on Euronext Paris (# 121485, PRTP.PA, PPFP).
To explore the universe of PPR brands, go to www.ppr.com: Fnac, Redcats Group (La Redoute, Vertbaudet, Somewhere, Cyrillus, Daxon, Ellos, The Sportsman’s Guide, The Golf Warehouse and brands of the plus-size division), Conforama, CFAO, Puma and the Luxury brands of Gucci Group (Gucci, Bottega Veneta, Yves Saint Laurent, YSL Beauté, Balenciaga, Boucheron, Sergio Rossi, Alexander McQueen and Stella McCartney).
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