Press Releases
Strong results for the Bulgari Group: turnover +33%, net profit +34%
Rome, March 28 2000
The Board of Directors of Bulgari S.p.A. approved today the consolidated financial statements as of 31 December 1999, showing a consolidated net profit Euro 59 million with an increase of 34% compared to Euro 44.1 million in 1998.
In 1999 the Bulgari Group posted a net consolidated turnover of Euro 485 million, up 33% from Euro 365.3 in 1998, at constant exchange rates of about 27%.
Consolidated operating profit rose to Euro 81.4 million from to Euro 53.5 million the previous year. Operating margin increased to 16.8% from 14.6% in 1998, benefiting by a better absorption of fixed costs due to a significant increase of turnover. Total communication expenditures increased by 22.5% and represent 12.6% of the turnover (13.6% in 1998). The reorganization of the Group continued in 1999 and brought about the replacement of many information technology procedures and the establishment of new positions within the Group. In particular, the entire logistic and production cycle was completely revised.
Francesco Trapani, CEO of the Bulgari Group commented: '1999 was a very positive year, despite the fact that it didn't start under the best conditions due to a difficult economic situation in several markets. The results obtained confirm the positive trend of previous years and are a logic consequence of coherent and constant efforts as well as of several important investments. This is why we reached a dimension which allows us to smoothly continue our expansion strategy.'
Sales increased in all major markets. Growth was particularly strong in Japan (+60%), in the Far East (+58%), in America (+26%) and in Europe (+20%). At the end of 1999 the number of Bvlgari stores had grown to 95 while the network of authorized watch retailers had risen to over 450 (almost half of them distribute also jewellery) and perfume doors to over 9,500 units.
In the jewellery segment new precious rings such as Goccia and Astrea were presented as well as the Corona engagement rings. In the second semester the B.Zero1 ring was introduced and was an immediate success. Ovale was presented to reinforce the important ladies' watch segment. Furthermore, the first Home Designs collection - a complete line of porcelain products, crystal stem and barware and silver flatware - was launched, following the license agreement signed with Rosenthal.
During 1999 investments in tangible fixed assets reached Euro 23 million against Euro 18 million in 1998, mainly due to the opening and refurbishing of Bvlgari stores and offices for administrative and production purposes. During the same year intangible fixed assets amounted to Euro 9.4 million mainly related to the purchase and implementation of software procedures (1998 Euro 5.5 million).
Net indebtedness of the Group at 31/12/99 was equal to Euro 42.2 million compared to the net liquidity of the previous year which was of Euro 7 millions . This variation is mainly due to the increase in net working capital which passed from Euro 163.7 million in 1998 to Euro 236.5 million in 1999 mainly thanks to the strong increase in turnover. The rotation of net working capital underwent a slight deterioration between 1998 and 1999, changing from 2.2 to 2.0 times the annual turnover.
The Board of Directors has also approved the financial statements of the parent company Bulgari S.p.A. closing at 31/12/99 with a net profit of Euro 23.8 million. Total revenues (consisting almost entirely of royalties paid by subsidiaries and franchisees for the use of the Bvlgari trademark) were up about 37.5% to Euro 42.6 million (in 1998 Euro 32.0 million).
Finally the Board of Directors approved the distribution of a dividend of Euro 0,0568 per share compared to Euro 0.0413 of the year before. The accounts will be submitted to the approval of the next Annual General Meeting taking place in Rome on April, 28th on first call and on May 2nd on second call.
BULGARI GROUP
TURNOVER CONTRIBUTION PER GEOGRAPHIC AREA
| 1999 | 1998 | 1997 | |
|---|---|---|---|
| ITALY | 13% | 14% | 13% |
| EUROPE | 24% | 27% | 28% |
| AMERICA | 23% | 24% | 22% |
| JAPAN | 22% | 18% | 17% |
| FAR EAST | 14% | 12% | 15% |
| MIDDLE EAST/OTHERS | 4% | 5% | 5% |
| TOTAL | 100% | 100% | 100% |
Source: Bulgari SpA
BULGARI GROUP
BREAKDOWN BY PRODUCT CATEGORY
| 1999 | 1998 | 1997 | |
|---|---|---|---|
| JEWELLERY | 32% | 33% | 38% |
| WATCHES | 45% | 42% | 45% |
| PERFUME | 16% | 19% | 14% |
| ACCESSORIES | 4% | 3% | 1% |
| ROYALTIES | 3% | 3% | 2% |
| TOTAL | 100% | 100% | 100% |
Source: Bulgari SpA
BULGARI GROUP
SUMMARIZED FINANCIAL FIGURES (IN MILLION EURO)
| 1999 | 1998 | |
|---|---|---|
| TURNOVER | 485 | 365.3 |
| OPERATING PROFIT | 81.4 | 53.5 |
| % OP.PROF./ TURNOVER |
16.8 | 14.6 |
| NET PROFIT | 59 | 44.1 |
| % NET PROF./ TURNOVER |
34 | 12.1 |
Source: Bulgari SpA
Non audited results
For further information:
Francesca Zanoni (+39-06-688 10 594)
Francesca.Zanoni@Bulgari.com