Press Releases
Bulgari: continues its growth - increase in sales volumes and profits in the first nine months of 2003
- Turnover 512 million Euro (-1%)
- Revenues at comparable exchange rates +6%
- Operating profit 62 million Euro (+10%)
- Net profit 44 million Euro (+20%)
Rome, November 13 2003 - The Board of Directors of Bulgari S.p.A. approved today the consolidated financial statements as of 30 September 2003. In the first nine months of 2003 turnover was of 512.0 million Euro, and was of 518.6 million Euro for the same period in 2002, showing a decrease of 1.3%. At constant exchange rates the increase was of 5.6%.
Operating profit in the first nine months of 2003 was equal to 62.1 million Euro, compared to 56.6 million Euro of the same period 2002, posting an increase of 9.8%. Net profit in the first nine months of 2003 was of 43.9 million Euro against 36.5 million Euro of the same period of 2002 (+20.2%).
Turnover in the third quarter was of 181.9 million Euro and was of 180.2 million Euro of the third quarter 2002, showing an increase of 0.9%. At comparable exchange rates the increase was equal to 8.1%.
In the third quarter the operating profit increased from 23.6 million Euro in 2002 to 27.0 million Euro in the same period of 2003 (+14.6%). Net profit in the third quarter increased from 14.0 million Euro in 2002 to 18.9 million Euro in the same period of 2003 (+35.1%).
During the first nine months of this year, at comparable exchange rates and compared to the same period of the previous year, jewellery sales increased by 15.6%, accessories by 63%, perfume by 3.9%. Perfume sales had witnessed a slow-down due to the imminent launch of the new fragrance Omnia . Watch sales registered a decrease of 12.9% still influenced by the negative trend of the entire sector.
At comparable exchange rates, the increase of revenues in the third quarter - compared to the same period of the previous year - registered a very good increase in sales of jewellery (+20.7%), fragrances (+48%) and accessories (+39%). Watch sales were very weak posting a decrease of 22.9%.
This significant decrease is penalised by the comparison with third quarter results of 2002, which registered an increase of 14.6% at comparable exchange rates due to the launch of the B.zero1 watch collection. Actually, watch sales this year were almost unchanged (53 million Euro during Q1, 54 million Euro during Q2 and Q3).
As far as the geographic areas are concerned in the first nine months of 2003 Italy (-0.7%) and Europe excluding Italy (-0.2%) remained essentially unchanged. Japan (+17.1% at comparable exchange rates) and the Far East (+7.7% at current rates) registered a strong increase, despite the strong growth during the same period of the previous year. The US continued its slow recovery, showing an increase of 3.4% at comparable exchange rates.
The contribution margin during the first nine months of this year was equal to 315.9 million Euro against 313.9 million Euro of the previous year with an increase from 60.5% to 61.7% on sales, thanks to a better integration of the production process and an improved efficiency, despite the negative exchange rate effect. Furthermore, in the third quarter 2003 the contribution margin negatively influenced by the product mix was equal to 60.5% against 60.9% of the previous year.
Total operating expenses ex advertising and promotion in the nine months decreased by about 2% from 208.4 million Euro of the first nine months of 2002 to 204.2 million Euro in the same period of 2003. During the third quarter the variation was equal to 4.8%. Advertising and promotion expenses, both during the quarter and the first nine months of this year, increased by about 1% thus impacting on the consolidated turnover of the first nine months of 2003 by 9.7% against 9.4% of the nine months of 2002.
As a result, the operating profit in the first nine months of 2003 was equal to 62.1 million Euro against 56.6 million Euro during the first nine months of 2002, showing an increase of 9.8%. Operating margin in the first nine months of 2003 went to 12.1% from 10.9% in 2002. During the third quarter the operating profit reached 27.0 million Euro against 23.6 million Euro in the quarter of the previous year with an increase of 14.6%.
Due to further improvement of the financial situation, cost control of non operating expenses and an average tax rate slightly higher compared to the previous period, net profit in the first nine months of 2003 reached 43.9 million Euro against 36.5 million Euro in the nine months of the previous year (+20.2%).
During the first nine months of this year net margin increased from 7.0% to 8.6%.
The financial situation showed a further improvement with an indebtedness that decreased from 247.5 million Euro at 30.09.02 to 155.7 million Euro at 30.09.03. Consequently, the gearing - ratio between indebtedness and equity between September 2002 and September 2003 decreased from 49% to 29%. The improvement of the financial situation was obtained thanks to the reduction of the inventory which decreased from 518.5 million Euro at 30/09/2002 to 466.8 million Euro at 30/09/2003.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, commented: Considering the current economic and geopolitical context I am satisfied with the results of these first nine months. They actually prove that, despite an extremely difficult scenario, Bulgari thanks to the strength of its brand and the excellent quality of its products continues its grow.
Furthermore, the fact that the watch market is still depressed for Bulgari as well as for the other companies operating in this sector is, on one hand, a concern to us but at the same time an opportunity. I believe this, also, because of an expected improvement of the economy and the confidence with respect to the launches of the new watch collections which we are going to present during the next months.
I am also extremely satisfied with the obtained results in our operations, which prove - once again the success of our strategy characterized by careful cost control and by the constant quest for efficiency."
BULGARI GROUP
FINANCIAL HIGHLIGHTS
| (M euro) | III Trim. 03 | III Trim. 02 | 30/09/03 | 30/09/02 | |
|---|---|---|---|---|---|
| Net revenues | 181,9 | 180,2 | 512,0 | 518,6 | |
| Operating profit | 27,0 | 23,6 | 62,1 | 56,6 | |
| Profit before taxes and minorities | 25,6 | 17,9 | 54,4 | 43,8 | |
| Net profit | 18,9 | 14,0 | 43,9 | 36,5 | |
BULGARI GROUP
REVENUE GROWTH BY PRODUCT CATEGORY
| III Trim '03 | III Trim '02 | 30/09/2003 | 30/09/2002 | |
|---|---|---|---|---|
| Jewels | +12% | -7% | +7% | -1% |
| Watches | -28% | +11% | -17% | -11% |
| Perfumes | +38% | -13% | -1% | +7% |
| Accessories | +30% | +11% | +52% | -1% |
| Royalties and oth | +26% | -25% | +5% | -13% |
BULGARI GROUP
REVENUES BY PRODUCT CATEGORY AND WEIGHT ON TOTAL REV.
| (M euro) | III Trim '03 | III Trim '02 | 30/09/2003 | 30/09/2002 | ||||
|---|---|---|---|---|---|---|---|---|
| Jewels | 71,9 | 39% | 64,0 | 35% | 208,5 | 41% | 195,0 | 38% |
| Watches | 54,1 | 30% | 75,0 | 42% | 161,0 | 31% | 194,3 | 37% |
| Perfumes | 40,3 | 22% | 29,1 | 16% | 91,8 | 18% | 92,6 | 18% |
| Accessories | 12,0 | 7% | 9,2 | 5% | 39,7 | 8% | 26,1 | 5% |
| Royalties and oth | 3,6 | 2% | 2,9 | 2% | 11,0 | 2% | 10,5 | 2% |
| Total | 181,9 | 100% | 180,2 | 100% | 512,0 | 100% | 518,6 | 100% |
BULGARI GROUP
REVENUE GROWTH BY GEO AREA
| III Trim '03 | III Trim '02 | 30/09/2003 | 30/09/2002 | |
|---|---|---|---|---|
| Italy | -16% | +10% | -1% | -3% |
| Europe (ex. Italy) | +25% | -16% | 0% | -3% |
| Americas | -7% | -1% | -11% | -10% |
| Japan | +10% | -4% | +5% | -2% |
| Far East | +3% | -3% | +8% | -14% |
| M/East and oth | -39% |
+74% |
-22% |
+26% |
BULGARI GROUP
REVENUES BY GEO AREA AND WEIGHT ON TOTAL REV.
| (M euro) | III Trim '03 | III Trim '02 | 30/09/2003 | 30/09/2002 | ||||
|---|---|---|---|---|---|---|---|---|
| Italy | 21,8 | 12% | 25,9 | 14% | 70,8 | 14% | 71,2 | 14% |
| Europe (ex. Italy) | 50,5 | 28% | 40,4 | 22% | 134,3 | 26% | 134,6 | 26% |
| Americas | 26,4 | 15% | 28,5 | 16% | 69,0 | 14% | 78,0 | 15% |
| Japan | 39,4 | 22% | 35,8 | 20% | 109,6 | 21% | 104,1 | 20% |
| Far East | 33,3 | 18% | 32,4 | 18% | 96,0 | 19% | 89,1 | 17% |
| M/East and oth | 10,4 | 5% | 17,2 | 10% | 32,3 | 6% | 41,6 | 8% |
Unaudited results