Press Releases
Bulgari: strong growth in profits in the third quarter 2002
- Turnover: Euro 180.2 million (-1%)
- Operating profit: Euro 23.6 million (+51%)
- Net profit: Euro 14.0 million (+74%)
Rome, November 14, 2002 – Bulgari, the Italian Contemporary Jeweller announced today in Rome its consolidated results of the first nine months of 2002. Turnover in the third quarter remained essentially unchanged from Euro 181.5 million of 2001 to Euro 180.2 million in 2002 (-0.7%). At constant exchange rates the increase was of approx. 3%.
In the first nine months turnover was of Euro 518.6 million compared to the Euro 540.3 million in 2001
Operating profit in the third quarter registered an increase of 50.7% from 15.7 Euro million to 23.6 Euro million of the same period of the previous year. During the period January – September 2002 the Group posted an operating profit of Euro 56.6 million with a decrease of 26.8% compared to Euro 77.3 million the year before.
Net profit in the third quarter was equal to Euro 14.0 million with an increase of 73.6% (8.0 Euro million in the third quarter 2001). During the first nine months of 2002 net profit was equal to Euro 36.5 million against Euro 56.2 million of the previous year (-35.0%).
Revenues in the third quarter 2002 were characterized by a strong recovery of watch sales (+11.4%) thanks to a significant upturn of orders on behalf of the distribution network. In the first quarter 2002 watch sales had registered a decrease of 29.2% and a 13.6% decrease during the second quarter.
Jewellery sales, which declined by 6.7%, had though, to cope with the strong base of the third quarter of 2001 (+43.8%). The perfume division registered in the third quarter a decrease of 12.7%, penalized by the comparison with high sales levels of the previous year (+26.3%) and by the slowdown of the German and the American markets. Accessories sales performed well - with an 11.0% increase, notwithstanding the crisis of the travel retail channel and the brilliant base of the third quarter of 2001 (+25.5%).
As far as sales per geographical area in the third quarter 2002 are concerned, the good performance of Italy (+9.6%) has to be stressed, despite the already outstanding results during the same period of the previous year (+20.8%) and the significant decline in tourism. Sales in Europe, excluding Italy, registered a decrease of 16.5% and were penalized by a slowdown in turnover in the French and in the German market. The United States witnessed a growth of +6.3% in volume (and were almost constant if expressed in Euro). Japan registered a sales downturn of 3.8%, whereas in volume sales increased by 0.6%.
The contribution margin was of 62.9% during the third quarter (66.2% in the same period of the previous year) and, even if positively influenced by the improved product mix, was deeply penalized by the exchange rate effect (mostly due to the weakened Yen and US Dollar versus the Swiss Franc) and by the strong appreciation of gold.
Total operating expenses in the third quarter (excluding advertising and promotion investments) were equal to Euro 74.4 million against Euro 79.3 million of the same period of 2001 (-6.2%). This confirms the efficiency of the rationalization plans of our structure.
Advertising and promotion expenses in the third quarter were equal to Euro 15 million against Euro 25 million in the same period of the previous year (-38.6%) thus representing 8.5% of turnover against 13.8% of the previous year (data influenced by the significant investments for the Lucea and BLV Pour Homme launches and the opening of the new flagship store in Paris, Avenue Montaigne). The figure invested during the first nine months of 2002 amounts to Euro 49 million against Euro 67 million in 2001 and Euro 50 million in 2000.
The reduction of inventory levels continued in this third quarter, reaching euro 519 million at 30.09.02, versus Euro 577 million at 30.09.01, Euro 548 million at 31.12.2001 and Euro 531 million at 30.06.2002.
Net indebtedness of the Group further decreased to Euro 247 million against the Euro 345 million at 30.09.2001, to Euro 284 million at 31.12.2001 and to Euro 268 million at 30.06.2002.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, commented: “Notwithstanding the fact that the third quarter was still characterized by events that had a negative impact on our business, I am satisfied with these results as they are in line with our plans and because they show that:
- Sales volumes are once again growing compared to the previous year;
- Watch sales are increasing, after the penalizing reduction of orders on behalf of retailers;
- The contribution margin, although influenced by the negative trend of exchange rates is again increasing;
- Operating expenses are strongly decreasing;
- Inventory decreased according to our plans;
- The Group further reinforced its financial position.
Obviously uncertainties linked to the macroeconomic and geopolitical situation remain, which could significantly impact the Group’s results. I am, however, convinced, that in a scenario similar to what we have seen in these last months, we should be able to close the entire year with sales volumes and a profitability similar to that of 2001.”
BULGARI GROUP FINANCIALS
| (M.Eur) | Q3 02 | Q3 01 | 30/09/02 | 30/09/01 | |
|---|---|---|---|---|---|
| REVENUES | 180,2 | 181,5 | 518,6 | 540,3 | |
| EBIT | 23,6 | 15,7 | 56,6 | 77,3 | |
| NET PROFIT | 14,0 | 8,0 | 36,5 | 56,2 | |
BULGARI GROUP REVENUE GROWTH BY PRODUCT CATEGORY
| Q3 '02 | Q3 '01 | 30/09/2002 | 30/09/2001 | |
|---|---|---|---|---|
| JEWELS | -7% | +44% | -1% | +39% |
| WATCHES | +11% | -17% | -11% | +6% |
| PERFUMES | -13% | +26% | +7% | +39% |
| ACCESSORIES | +11% | +26% | -1% | +61% |
| ROYALTIES + OTHER | -25% | +22% | -13% | +32% |
BULGARI GROUP REVENUE BREAKDOWN BY PRODUCT CATEGORY
| (M.Eur) | Q3 '02 | Q3 '02 | 30/09/2002 | 30/09/2001 | ||||
|---|---|---|---|---|---|---|---|---|
| JEWELS | 64,0 | 35% | 68,6 | 38% | 195,0 | 38% | 196,9 | 36% |
| WATCHES | 75,0 | 42% | 67,4 | 37% | 194,3 | 37% | 218,8 | 41% |
| PERFUMES | 29,1 | 16% | 33,4 | 18% | 92,6 | 18% | 86,4 | 16% |
| ACCESSORIES | 9,2 | 5% | 8,3 | 5% | 26,1 | 5% | 26,2 | 5% |
| ROYALTIES + OTHER | 2,9 | 2% | 3,8 | 2% | 10,5 | 2% | 12,0 | 2% |
| TOTAL | 180,2 | 100% | 181,5 | 100% | 518,6 | 100% | 540,3 | 100% |
BULGARI GROUP REVENUE GROWTH BY GEOGRAPHICAL AREA
| Q3 '02 | Q3 '01 | 30/09/2002 | 30/09/2001 | |
|---|---|---|---|---|
| ITALY | +10% | +21% | -3% | +41% |
| EUROPE (EXC. ITALY) | -16% | +41% | -3% | +37% |
| AMERICAS | -1% | -28% | -10% | -8% |
| JAPAN (*) | -4% | +5% | -2% | +9% |
| FAR EAST (*) | -3% | +20% | -14% | +44% |
| MIDDLE EAST AND OTHERS | +74% | +32% | +26% | +63% |
BULGARI GROUP REVENUE BREAKDOWN BY GEOGRAPHICAL AREA
| (M.Eur) | Q3 '02 | Q3 '01 | 30/09/2002 | 30/09/2001 | ||||
|---|---|---|---|---|---|---|---|---|
| ITALY | 25,9 | 14% | 23,7 | 13% | 71,2 | 14% | 73,3 | 14% |
| EUROPE (EXC. ITALY) | 40,4 | 22% | 48,4 | 27% | 134,6 | 26% | 138,2 | 26% |
| AMERICAS | 28,5 | 16% | 28,7 | 16% | 78,0 | 15% | 87,0 | 16% |
| JAPAN (*) | 35,8 | 20% | 37,2 | 20% | 104,1 | 20% | 105,8 | 19% |
| FAR EAST (*) | 32,4 | 18% | 33,6 | 19% | 89,1 | 17% | 103,1 | 19%, |
| MIDDLE EAST AND OTHERS | 17,2 | 10% | 9,9 | 5% | 41,6 | 8% | 32,9 | 6% |
| TOTAL | 180,2 | 100% | 181,5 | 100% | 518,6 | 100% | 540,3 | 100% |
(*) A portion of the revenues in the Japan and Far East categories have been reinstated also following the acquisition of a franchisee in South Korea.