Wednesday, February 15, 2023
Very solid 2022 performances, mixed fourth quarter
Group revenue: €20,351 million
up 15% reported, up 9% comparable
Recurring operating income: €5,589 million
Net income attributable to the Group: €3,614 million
Recommended ordinary dividend raised to €14 per share
“All our Houses posted record revenues and contributed to higher operating income in 2022. But these good performances were not uniformly up to our ambitions and potential. Beyond the challenges some of our Houses faced, notably towards the end of the year, we are convinced that we are pursuing the right strategy for the long term. Our 47,000 people share a strong entrepreneurial culture as well as values of responsibility and engagement. Together, we nurture the desirability and exclusivity of our brands, so they all achieve market positions commensurate with their unique heritage and recognized creativity. In an environment that remains uncertain, I have no doubt that 2023 will be another year of success for our Houses and of growth for our Group.”
François-Henri Pinault, Chairman and Chief Executive Officer
- Group revenue exceeded €20 billion in 2022, an increase of 15% as reported and 9% on a comparable basis.
- Revenue from the directly operated retail network, which includes e-commerce sites, rose 10% on a comparable basis in 2022, driven in particular by Western Europe and Japan.
- In the fourth quarter of 2022, total sales were down 2% year-on-year as reported and 7% on a comparable basis, with mixed performances across Houses and regions.
- All Group activities contributed to the 11% rise in recurring operating income, which reached €5.6 billion. Recurring operating margin was 27.5%.
- Net profit attributable to the Group amounted to €3.6 billion, up 14%.
- Free cash flow from operations remained high, at over €3.2 billion.
Gucci: strengthening fundamentals in a challenging year
Gucci’s 2022 revenue amounted to €10.5 billion (up 8% as reported and up 1% on a comparable basis). Sales in the directly operated retail network grew 1% on a comparable basis. Wholesale revenue was stable year-on-year.
In the fourth quarter of 2022, Gucci’s revenue was down 14% on a comparable basis relative to the same period in 2021. In directly operated stores, sales dropped 15% from a very high base and were significantly affected by the situation in China during the quarter.
Gucci’s recurring operating income totaled €3.7 billion in 2022. Recurring operating margin was 35.6%, notably reflecting investments aimed at nurturing the House’s future growth.
Yves Saint Laurent: performance in line with the House’s ambitions
Yves Saint Laurent’s 2022 revenue amounted to €3.3 billion, up 31% as reported and 23% on a comparable basis. Sales from the House’s directly operated retail network rose sharply, up 28%, while wholesale revenue was up 6%.
In the fourth quarter of 2022, sales rose 4% on a comparable basis, thanks to good performance in the directly operated retail network, where sales were up 7%. Wholesale revenue declined 13%.
Yves Saint Laurent achieved recurring operating income of over €1 billion in 2022, and its recurring operating margin exceeded 30%.
Bottega Veneta: record year, timeless positioning
Bottega Veneta’s 2022 revenue amounted to €1.7 billion, up 16% as reported and 11% on a comparable basis. Growth was driven by the directly operated retail network, where sales rose 15% on a comparable basis. Wholesale revenue was stable year-on-year.
Fourth quarter 2022 sales were up 6% on a comparable basis, supported by good momentum in the directly operated retail network (up 4%) and in wholesale (up 13%).
Bottega Veneta achieved recurring operating income of €366 million in 2022, yielding a recurring operating margin of 21%.
Other Houses: sharp growth and long-term investments
2022 revenue from Other Houses amounted to €3.9 billion, an increase of 18% as reported and 16% on a comparable basis. Growth was driven by the directly operated retail network, where sales were up 27% on a comparable basis. Wholesale revenue was down 6% on a comparable basis.
Balenciaga had an excellent 2022, despite a difficult month of December. Alexander McQueen performed well in the handbags and ready-to-wear categories, and Brioni confirmed its recovery.
Kering’s Jewelry Houses once again achieved outstanding progress and reached significant milestones. Boucheron posted firm, steady growth, while Pomellato continued to perform well in Western Europe and Japan. Finally, Qeelin grew at a rapid pace.
In the fourth quarter of 2022, revenue of Other Houses was down 4% on a comparable basis. Sales in the Other Houses’ directly operated retail network rose 2% during the quarter, driven by double-digit growth in Western Europe and Japan, while wholesale revenue was down 26%.
The Other Houses generated recurring operating income of €558 million in 2022, an increase of 22%. Recurring operating margin was 14.4%.
Kering Eyewear and Corporate
Kering Eyewear’s 2022 revenue broke through the billion-euro mark (up 58% as reported and up 27% on a comparable basis) to €1.1 billion, confirming the validity of its strategy and boosted by the contributions of Lindberg and Maui Jim. This excellent performance was confirmed in the fourth quarter of 2022, with revenue up 30% on a comparable basis.
Kering Eyewear’s 2022 recurring operating income was €203 million, 2.5 times the 2021 level.
After deduction of corporate costs, the 2022 recurring operating income of the Kering Eyewear and Corporate segment amounted to a negative €88 million, a material improvement compared to 2021.
Net financial expense totaled €260 million in 2022, a year-on-year improvement of 5%.
The effective tax rate on recurring income was 27.8%.
Net income attributable to the Group was sizable at €3.6 billion.
Earnings per share were up 15%.
Cash flow and financial position
Free cash flow from operations exceeded €3.2 billion in 2022.
At December 31, 2022, Kering’s net debt amounted to €2.3 billion.
At its February 14, 2023 meeting, Kering’s Board of Directors decided to ask shareholders to approve a cash dividend of €14.00 per share at the Annual General Meeting to be held on April 27, 2023 to approve the financial statements for the year ended December 31, 2022.
An interim dividend of €4.50 per share was paid on January 18, 2023. If approved, a final dividend of €9.50 would be paid on May 4, 2023.
To achieve its long-term vision, Kering invests in the development of its Houses, enabling them to continuously strengthen their desirability and the exclusivity of their distribution, strike a perfect balance between creative innovation and timelessness, and achieve the highest standards in terms of quality, sustainability, and experience for their customers.
In an environment of ongoing economic and geopolitical uncertainty in the near term, Kering will continue to execute on its strategy and vision, in pursuit of two key ambitions: maintain a trajectory of profitable growth resulting in high levels of cash flow generation and return on capital employed, and confirm its status as one of the most influential groups in the Luxury industry.
At its February 14, 2023 meeting, Kering’s Board of Directors, chaired by François-Henri Pinault, approved the consolidated financial statements for 2022. The consolidated financial statements have been audited and are in the process of being certified.
A global Luxury group, Kering manages the development of a series of renowned Houses in Fashion, Leather Goods and Jewelry: Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin, as well as Kering Eyewear. By placing creativity at the heart of its strategy, Kering enables its Houses to set new limits in terms of their creative expression while crafting tomorrow’s Luxury in a sustainable and responsible way. We capture these beliefs in our signature: “Empowering Imagination”. In 2022, Kering had over 47,000 employees and revenue of €20.4 billion.
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