Press Releases
Bulgari Group: turnover and profits grew in the first quarter 2003 (turnover: +3%; net profit: +27%)
Rome, May 14 2003 – Bulgari, the Italian contemporary jeweller announced in Rome today its consolidated first quarter results of 2003, posting a turnover of 160.6 million Euro with an increase of 3% compared to the same period of the previous year (+9% at constant exchange rates).
In the first quarter 2003 the Group's operating profit equalled 16.2 million Euro (+1%) and net profit grew from 9.0 to 11.4 million Euro (+27%). These results were obtained despite the very negative economic and political environment and are essentially in line with the Group's growth plan.
The contribution margin* was of 101.6 million Euro and increased by 6%, despite the significant penalisation due to a further reinforcement of the Euro against the Yen and the USD. This good result was obtained thanks to improved manufacturing efficiencies and to the further verticalization of the jewellery production (following the latest acquisition of the 50% stake of Crova S.p.A.).
During the same period, costs for advertising and promotion activities accounted for about 13.9 million Euro (+16% compared to the previous year). Other operating costs (71.4 million Euro in the first quarter 2003; 67.7 million Euro in the same period of 2002) increased by 5% especially due to the consolidation of the 50% stake in Crova S.p.A. The inventory equalled 492.0 million Euro at the end of March 2003, against 557.0 million Euro at 31.03.2002. The working capital (trade receivable, payables and inventory) witnessed a similar reduction, from 579.1 million Euro at the end of March 2002 to 505.0 million Euro at the end of this quarter (-13%). Indebtedness was almost cut into half, from 300.8 million Euro at the end of March 2002 to 159.4 million Euro at 31.03.2003. Consequently, the gearing decreased from 62% to 29%.
As far as product categories are concerned, the good performance of the jewellery (-1% but +6% at constant exchange rates) – that further increased its volume compared to the high levels of the first quarter 2002 (+17%) – has to be underlined. Watch sales increased by 1% (+6% at constant exchange rates) showing a recovery from the levels of the previous year. Perfume sales decreased by 9% (-6% at constant exchange rates) and were penalised by the slowdown of traffic not only in airports but, generally speaking, within the whole travel retail sector. Accessories confirmed, with an increase of 82%, their great success within the Bulgari product portfolio.
Concerning geographical areas, the excellent performance of sales in Japan (+17%, +28% at constant exchange rates), in the Far East (+25%) and in Italy (+15%) have to be highlighted. Europe – further penalised by the slowdown in tourism – witnessed a decrease of sales of 12%, while the Americas, which decreased by 12%, posted, at constant exchange rates, an increase of 4%.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, commented: "I am very satisfied with the good results obtained during the first quarter of the year, despite the war. Sales volumes, the very good level of the contribution margin, the effective cost control, the significant increase of net profit as well as the improvement of the financial situation are all objectives we reached and which are essentially in line with our expectations.
Unfortunately, an immediate return to a stable and serene business environment – a fundamental premise for further expanding our activities – seems temporarily postponed, due to the SARS effect. The SARS effect is negatively impacting our business in South East Asia, and is also influencing the flow of travellers with a consequent reduction of sales in all countries that are very dependent on it".
*internal production costs excluded
BULGARI GROUP
REVENUE GROWTH BY GEOGRAPHICAL AREA
| 1 Q 2003 | 1 Q 2002 | |
|---|---|---|
| ITALY | +15% | -16% |
| EUROPE (EXCL. ITALY) | -12% | +18% |
| AMERICA | -12% | -13% |
| JAPAN | +17% | +1% |
| FAR EAST | +25% | -25% |
| MIDDLE EAST - OTHER | -13% | -2% |
Source: Bulgari SpA
BULGARI GROUP
REVENUE BREAKDOWN BY GEOGRAPHICAL AREA
| 1 Q 2003 | 1 Q 2002 | |
|---|---|---|
| ITALY | 14% | 13% |
| EUROPE (EXCL. ITALY) | 25% | 29% |
| AMERICA | 14% | 16% |
| JAPAN | 21% | 19% |
| FAR EAST | 20% | 16% |
| MIDDLE EAST - OTHER | 6% | 7% |
| TOTAL | 100% | 100% |
Source: Bulgari SpA
BULGARI GROUP
REVENUE GROWTH BY PRODUCT LINE
| 1 Q 2003 | 1 Q 2002 | |
|---|---|---|
| JEWELS | -1% | +17% |
| WATCHES | +1% | -29% |
| PERFUMES | -9% | +13% |
| ACCESSORIES | +82% | -5% |
| ROYALTIES & OTHER | +10% | +28% |
Source: Bulgari SpA
BULGARI GROUP
REVENUE BREAKDOWN BY PRODUCT LINE
| 1 Q 2003 | 1 Q 2002 | |
|---|---|---|
| JEWELS | 38% | 40% |
| WATCHES | 33% | 34% |
| PERFUMES | 17% | 19% |
| ACCESSORIES | 9% | 5% |
| ROYALTIES & OTHER | 3% | 2% |
| TOTAL | 100% | 100% |
Source: Bulgari SpA
*unaudited results