Thursday, July 28, 2016
2016 First-Half Results - Very good first-half operating and financial performances
Sales growth accelerating in second quarter, for both Luxury and Sport & Lifestyle
Higher margins, free cash flow from operations and net income
First-half consolidated revenue up 5.5% on a comparable basis, at €5,693 million
Recurring operating income up 4.9%
Recurring operating margin up 20 basis points, higher in both Luxury and Sport & Lifestyle
Net income, Group share up 9.9%
- Faster revenue growth in the second quarter, 6.9% on a comparable basis:
o Luxury activities: comparable sales up 5.2% in the quarter
- Gucci: new creative impetus and strategic initiatives delivering results
- Bottega Veneta: ongoing adverse impact of lower tourism
- Yves Saint Laurent: sustained robust growth and net income up sharply
- Other Luxury brands: improving trends
o Sport & Lifestyle activities: faster growth and better margins for Puma
François-Henri Pinault, Kering's Chairman and Chief Executive Officer, commented: "We are pleased with the performances we have delivered in the first half of 2016. Overall growth in our Luxury activities in the second quarter significantly outpaced the level reached in the first three months of the year. Gucci's creative momentum and ambitious strategy, launched last year, are delivering tangible results: sales growth is accelerating in the second quarter on top of tough comps; recurring operating income is up 7% in the first half. As anticipated, our Sport & Lifestyle activities resumed operating growth, thanks to healthy revenue trends. Our cash flow generation is up sharply – it was one of the top priorities we set for ourselves at the beginning of the year. We owe these achievements to our integrated, effective multibrand model, and to well-designed, well-executed strategic action plans. In an environment that remains uncertain, we intend to carry out the steadfast implementation of our strategy and maintain a strict operating and financial discipline; together with the commitment of all our teams, this reinforces our confidence that we will progress along the current growth path.”
Key financial indicators
Consolidated revenue for the first half of 2016 amounted to €5,693 million, up 3.3% on the first six months of 2015 as reported and 5.5% based on a comparable Group structure and exchange rates. Exchange rate fluctuations had a negative impact on revenue during the period. Comparable revenue growth was solid in both mature markets (led by Western Europe and Japan) and emerging markets. Revenue generated outside the eurozone accounted for 78% of the consolidated total in the first six months of 2016.
The Group's gross margin for the first half of 2016 was €3,602 million, up €202 million, or 6%, over the first-half 2015 level as reported.
Recurring operating income rose 4.9% year on year as reported to €811 million. Recurring operating margin amounted to 14.2% for the Group as a whole, with the Luxury activity posting an increase to 21.7%. Recurring operating margin for the Sport & Lifestyle activity was 2.7%.
EBITDAamounted to €1,011 million, up 4% over the first-half 2015 level, and the EBITDA margin widened by 20 basis points on a reported basis to 17.8%.
Net income, Group share totalled €465 million versus €423 million for the first half of 2015. Adjusted for non-recurring items net of tax, net income from continuing operations, Group share rose 6.5% year on year to €521 million. Earnings per share amounted to €3.69 in the first half of 2016, up 10% compared to the first half of 2015.
A world leader in apparel and accessories, Kering develops an ensemble of powerful Luxury and Sport & Lifestyle brands: Gucci, Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Brioni, Christopher Kane, McQ, Stella McCartney, Tomas Maier, Boucheron, Dodo, Girard-Perregaux, JeanRichard, Pomellato, Qeelin, Ulysse Nardin, Puma, Volcom and Cobra. By ‘empowering imagination’ in the fullest sense, Kering encourages its brands to reach their potential in the most sustainable manner.
Present in more than 120 countries, the Group generated revenue of more than €11.5 billion in 2015 and had more than 38,000 employees at year end. The Kering (previously PPR) share is listed on Euronext Paris (FR 0000121485, KER.PA, KER.FP).
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