Message from the Chairman
In 2019, Kering once again demonstrated the relevance of its business model. The Group’s revenue totaled €15.9 billion, an increase of 13.3% on a comparable basis with 2018. This growth was driven by all our business segments. Our recurring operating income reached a historical high of €4.8 billion, an increase of 19.6%. In four years, our operating income has increased threefold, and our Houses’ sales have doubled. We owe this excellent performance to our strong corporate culture, built on an ambitious drive for innovation. Above all, these results reflect the commitment and talent of our 38,000 employees. I would like to sincerely thank each and every one of them. With these key assets, Kering can maintain high levels of growth over the long term.
Competitive thanks to our multi-brand model
This outstanding growth is the product of our integrated business model and the decisive advantage it gives us. Drawing on the Group’s synergies, our complementary Houses are achieving healthy organic growth, fueled by creativity, innovation and flawless execution.
Gucci, which will mark its 100th anniversary in 2021, remains the backbone of our portfolio. The House delivered a performance in line with its ambitions, generating 13.3% growth in revenue on a comparable basis—a milestone made all the more remarkable since Gucci more than doubled its sales between 2016 and 2019. This tremendous momentum is driven by the brand’s digital excellence, its constant innovation, and of course, its exceptional collections.
Saint Laurent doubled its sales in four years, topping the €2 billion mark. Through its distinctive identity and an ability to combine the core values of its heritage with uncompromising contemporary design, the House still has immense untapped potential.
Bottega Veneta has been totally reinvented with the arrival of Creative Director Daniel Lee, in June 2018. This renewed creativity has proved successful with ultra-desirable collections and a return to growth. Such success demonstrates that our efforts and investment can reinvigorate the brand in the medium term.
Our Other Houses recorded revenue of €2.3 billion, an increase of 17.8% on a comparable basis. Within this, two growth drivers stand out. Following its staggering development in 2018, Balenciaga continued its impressive growth, achieving a major sales milestone in 2019. Meanwhile, Alexander McQueen continued its impressive growth trajectory throughout the year. Our Jewelry Houses also contributed to the Group’s growth, performing superbly, while our Watch Manufactures have reinforced their reputation and positioning.
We intend to step up our investment to develop our brands, with a specific focus on accelerating distribution and communication.
Lastly, Kering Eyewear, which has been fully operational for just four years, is cementing its status as a forward-thinking and key player in eyewear.
Making Kering the most influential Luxury group
We remain confident in the trends now happening in our industry. Furthermore, we are convinced of our core business, as our financial results are complemented by an ambitious sustainability strategy and an unwavering commitment to a range of issues affecting the environment and society.
Three years after announcing a new set of targets in our sustainability strategy, we published our first progress report outlining our accomplishments and the challenges that lie ahead. Among the major breakthroughs, between 2015 and 2018 we reduced our overall impact by 14% in EP&L intensity. For the same period, we also reduced our global greenhouse gas emissions (boutiques and other locations) by 77% in EP&L intensity. These indicators are proof that we are on track to meet our targets. In 2019, our commitment and efforts were recognized by the Group’s presence, for the third consecutive year, on the Carbon Disclosure Project’s Climate Change A-List. Kering also remains the leading company in the Textile, Apparel and Luxury sector in the Corporate Knights ranking of the Global 100 most sustainable corporations in the world.
Our economy and markets must ride out uncertainties, whether in the form of changes in customs regulations, currency fluctuations or geopolitical tensions. The Covid-19 epidemic, although it does not call into question the structural drivers of the Luxury industry, is a case in point. Major and temporary crises may occur, compounding the complexity of our markets.
More than ever, flexibility and vigilance are paramount to anticipating disruptions and seizing the opportunities they bring. Our solid financials, coupled with our strong internal culture and singular vision of putting creativity at the service of modern, audacious Luxury mean we can look to the future with confidence and determination.