Press Releases
Bulgari: strong results in 2002
Indebtedness cut into half
- Turnover: 774 million Euro (+1%)
- Operating profit: 108 million Euro (+5%)
- Net profit: 76.1 million Euro (+12%)
Rome, March 27 2003 – The Board of Directors of Bulgari S.p.A. approved today the consolidated financial statements as of 31 December 2002. The entire year of 2002 was significantly influenced by an unfavorable economic and political situation. Despite this, the Group obtained positive results thanks to an intense work on all internal variables, such as product, organization and network.
Turnover: consolidated turnover in 2002 was of 774 million Euro, against 766 million Euro of the previous year, showing an increase of 1% (3% at comparable exchange rates).
Concerning sales per geographic area, the good performance of the Japanese and the Italian market can be underlined. All product categories, even if penalized by a negative impact of exchange rates, registered an increase in turnover. The only exception were watches, which slightly decreased in turnover (-1%), but increased in volume.
Gross profit: the gross profit was of 478 million Euro, against the 496 million Euro of 2001 (-4%). This value was obtained despite the negative trend of dollar, yen and an increased price of gold. This result was achieved only thanks to a significantly increased efficiency in operations.
Operating profit: the operating profit grew by 5.4% reaching 108 million Euro, against the 102 million Euro of 2001. The operating margin increased therefore from 13.3% in 2001 to 13.9% in 2002.
This increase of the operating profit was obtained thanks to attentive revision of all operational processes, which brought about an increase in efficiency. This has, therefore, allowed to reduce operating costs by about 6% and also to maintain operating costs before advertising and promotion investments basically unchanged.
At the same time, the Group continued to invest significantly in the reinforcement of the distribution network (enlargement of stores in Zurich, Tokyo Ginza, Hong Kong and Los Angeles), as well as in the development of new products in all product categories.
The total of investments in advertising and promotion were of 76 million Euro (10% of turnover), against 102 million Euro in 2001 (-25%) benefiting from the reduction of tariffs and a more attentive use of marketing tools.
Net profit: net profit was of 76.1 million Euro, against 68.2 million Euro of 2001, showing an increase of 12%. Net margin went from 8.9% to 9.8%.
The inventory of the Group decreased by 13% from 547 million Euro in 2001 to 477 million Euro. The inventory rotation was therefore of about 220 days. This result contributed significantly in reducing the net indebtedness of the Group, which was more than cut in half. It was of 284 million Euro in 2001 and is of 136 million Euro today (reduction of 148 million Euro).
The gearing - ratio between indebtedness and equity - improved significantly, going from 60% to 25%. Total investments in tangible fixed and intangible assets (33 million Euro) were referring mainly to the enlargement and opening of new stores and were largely financed by the operational cash flow of 116 million Euro.
Francesco Trapani: "Bulgari focused - in a year that was significantly influenced by uncertain political and economic conditions, with a definitely negative impact on the luxury business - on strengthening its product offer and on reinforcing our organizational structure. I think that our results proved our efforts successful. In fact, not only did our sales volume continue to grow, but, more important, it increased by an exceptional 17% compared to the already extraordinary high growth levels of year 2000.
Also, net and operating profits registered a strong increase. I would like to underline that we continued to invest, mainly in the enlargement of our product offer as well as in strengthening our distribution network.
It is important to underline how the improved production and logistic processes allowed to balance out the negative exchange rate impact and, at the same time, to bring the inventory back to operationally correct levels.
An outlook of 2003 is, of course, strongly influenced by the evolution of the economic and political situation. I am, however, optimistic, because we can definitely count on an exceptionally strong brand and on the solid organizational structure of the Group."
The Board of Directors has also approved the financial statements of the parent company Bulgari S.p.A. closing at 31/12/02 with a net profit of Euro 22.1 million (Euro 35.7 million in 2001). Total revenues - consisting almost entirely of royalties paid by subsidiaries and franchisees for the use of the Bvlgari trademark – were of 47 million Euro (50 million Euro in 2001), decreasing by about 6%.
Finally the Board of Directors approved the distribution of a dividend of Euro 0.074 per share compared to Euro 0.062 of the year before (+19%). The accounts will be submitted to the approval of the next Annual General Meeting taking place in Rome on April, 29th 11 am on first call and on May, 6th at 11 am on second call.
BULGARI GROUP 2002
REVENUES BY GEOGRAPHICAL AREA
| 2002 ME | 2002 growth% | 2002 weight % | 2001 ME | 2001 growth % | |
|---|---|---|---|---|---|
| ITALY | 107.3 | +3% | 14% | 104.3 | +19 |
| EUROPE (EX. ITALY) | 191.4 | -3% | 25% | 198.0 | +24 |
| AMERICAS | 115.9 | -2% | 15% | 118.3 | -16 |
| JAPAN | 164.9 | +7% | 21% | 153.7 | +7 |
| FAR EAST | 132.7 | -7% | 17% | 142.0 | +27 |
| M.EAST/OTHERS | 61.4 | 24% | 8% | 49.8 | +59 |
| TOTAL | 773.6 | 1% | 100% | 766.1 | +13% |
BULGARI GROUP 2002
REVENUES BY PRODUCT CATEGORY
| 2002 ME | 2002 growth% | 2002 weight % | 2001 ME | 2001 growth | |
|---|---|---|---|---|---|
| JEWELS | 293.8 | +2% | 38% | 287.7 | +26% |
| WATCHES | 292.9 | -1% | 38% | 295.9 | -6% |
| PERFUMES | 132.6 | +5% | 17% | 126.5 | +37% |
| ACCESSORIES | 39.9 | +4% | 5% | 38.5 | +48% |
| ROYALTIES/OTH | 14.4 | -18% | 2% | 17.5 | +11% |
| TOTAL | 773.6 | +1% | 100% | 766.1 | +13% |
BULGARI GROUP
FINANCIAL HIGHLIGHTS (IN MILLION EURO)
| 2002 | 2001 | |
|---|---|---|
| TURNOVER | 773.6 | 766.1 |
| OPERATING PROFIT | 107.6 | 102.1 |
| %OP.PROF./TURNOVER | 13.9% | 13.3% |
| NET PROFIT | 76.1 | 68.2 |
| %NET PROF./TURNOVER | 9.8% | 8.9% |
Non audited results
For further information: Francesca Zanoni (+39-06.688 10 594) Francesca.Zanoni@Bulgari.com