Press Releases
Bulgari: strong growth in 2003
- Turnover: 759 million Euro (+5% at constant exchange rates)
- Operating profit: 117 million Euro (+9%)
- Net profit: 92 million Euro (+21%)
- Proposed dividend: 0.11 Euro per share (+49%)
Rome, March 29 2004 - The Board of Directors of Bulgari S.p.A. approved today the consolidated financial statements as of 31 December 2003. The entire year was still characterized by unfavorable economic and political conditions, but despite this, the Group obtained remarkable commercial, economic and financial results in 2003.
Turnover: consolidated turnover for the year 2003 was equal to 759 million Euro with an increase of 5% at constant exchange rates (-2% at current exchange rates). As far as sales per geographic area are concerned, significant sales increases were posted in the Far East over 20% at comparable exchange rates despite the strong negative impact of the Sars epidemic in the second quarter of the year. Sales trend within the American market shows an important increase - over 9% at comparable exchange rates (+21% in the fourth quarter 2003) - thus confirming the recovery of this market. Also, sales results in Japan are strongly increasing - by 11% at comparable exchange rates. Sales in Italy and in the rest of Europe remained essentially unchanged compared to 2002, due to the negative economic outlook and to the reduction of tourism, penalized by the strong increase of the Euro and by the constant international tensions. All product categories, with the only exception of watches, registered a sales increase. Jewelry posted, at comparable exchange rates, an increased of 13%, accessories of 49% and fragrances of 8%. Watches, with a decrease of about 10%, were influenced by the general slowdown of the market of this product category.
Contribution margin: contribution margin was equal to 474 million Euro, against 469 million Euro of the previous year (+1%). The impact on sales went from 60,6% to 62,5%. This significant improvement was obtained despite the strong increase of the Euro compared to all other currencies thanks to the better integration and to the constant improvement of production processes.
Operating profit: the operating profit went from 108 million Euro in 2002 to 117 million Euro in 2003, with an increase of 9% compared to the previous year. In terms of impact on net sales the operating profit went from 13,9% of the year 2002 to 15,4% of the year 2003. A careful improvement of the optimization processes of the Group was decisive for such increase, which started in 2002 and continued throughout the entire 2003. Thanks to these activities all operating costs, with the exception of promotion and advertising expenses, were reduced. The latter increased by 6%, from 76 million Euro in 2002 to 81 million Euro in 2003 (10.6% of turnover), in line with the Groups objectives.
Net profit: net profit was equal to 92 million Euro with an increase of 21% compared to 76 million Euro of the previous year and represents the 12.1% of turnover (9.8% in 2002). The significant increase can be attributed to a careful cost control of non-operating expenses and to the reduction of financial charges.
Net indebtedness of the Group at 31/12/2003 was equal to 45 million Euro compared to the net indebtedness of the previous year which was of 136 million Euro. This strong reduction can be attributed to the high cash-flow generated by the operating management besides an improved inventory management and logistics cycle. Therefore, the stock decreased from 477 million Euro at the end of 2002 to 430 million Euro at 31.12.2003 (-10%). The gearing - ratio between indebtedness and equity thus further improved, and went from 25% to 8%.
Total investments in tangible and intangible fixed assets (equal to 38.2 million Euro) were referring mainly to the enlargement and opening of new, exclusive BVLGARI stores.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented: I am extremely satisfied with the results obtained in 2003, on one hand because they were achieved in very unfavorable economic and political conditions, on the other because they were obtained despite significant investments for a further expansion of the Group itself. I would also like to underline that two fundamental objectives were achieved in the past year: first of all we created highly innovative and creative products, secondly we further improved our profitability despite the fact that the market allowed only moderate growth in sales volumes. Although the current geo-political situation remains uncertain, I am still confident that 2004 will be a year of further growth also thanks to the launch of new, extraordinary products.
The Board of Directors has also approved the financial statements of the parent company Bulgari S.p.A. closing at 31/12/2003 with a net profit of 30 million Euro (against 22 million Euro in 2002). Total revenues - consisting almost entirely of royalties paid by subsidiaries and franchisees for the use of the Bvlgari trademark were of 46 million Euro (47 million Euro in 2002), decreasing by about 3%.
Finally the Board of Directors approved the distribution of a dividend of Euro 0.11 per share compared to Euro 0.074 of the year before (+49%). 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. The Board further approved to submit to the approval of the Annual General Meeting the date of May 27th, 2004 for the dividend payment by clipping coupon n. 10 on May 24th, 2004.
| 2003 | Q4 2003 | Variation %2003/2002 FULL YEAR |
Variation% 2003/2002 FOURTH QUARTER |
|||
|---|---|---|---|---|---|---|
| In M.Euro | REPORTED | AT COMP.FX RATES |
REPORTED | AT COMP.FX RATES |
||
| Jewels | 307.6 | 99.1 | +4.7 | +12.9 | +0.4 | +7.6 |
| Watches | 244.2 | 83.3 | -16.6 | -10.6 | -15.5 | -9.5 |
| Perfumes | 136.7 | 44.9 | +3.1 | +8.5 | +12.2 | +19.3 |
| Accessories | 55.7 | 15.9 | +39.5 | +48.9 | +15.5 | +22.3 |
| Royalties/other | 15.1 | 4.1 | +4.8 | N/A | +4.4 | N/A |
| Total | 759.3 | 247.3 | -1.9 | +4.9 | -3.1 | +3.5 |
| 2003 | Q4 2003 | Variation % 2003/2002 FULL YEAR |
Variation% 2003/2002 FOURTH QUARTER |
|||
|---|---|---|---|---|---|---|
| In Eur Mio | REPORTED | AT COMP.FX RATES |
REPORTED | AT COMP.FX RATES |
||
| ITALY | 105.5 | 34.7 | -1.6 | N/A | -3.4 | N/A |
| EUROPE EX IT. | 189.7 | 55.5 | -0.9 | N/A | -2.4 | N/A |
| AMERICAS | 108.7 | 39.7 | -6.2 | +9.2 | +4.6 | +21.4 |
| JAPAN | 166.4 | 56.8 | +0.9 | +10.7 | -6.6 | +0.2 |
| FAR EAST | 142.6 | 46.6 | +7.5 | +20.2 | +7.0 | +18.7 |
| M.EAST/OTH. | 46.4 | 14.0 | -24.6 | N/A | -29.9 | N/A |
| Total | 759.3 | 247.3 | -1.9 | +4.9 | -3.1 | +3.5 |
BVLGARI GROUP
| M.EURO | 2003 | 2002 |
|---|---|---|
| REVENUES | 759.3 | 773.6 |
| OPERATING PROFIT | 116.9 | 107.6 |
| EBIT MARGIN (OP.PROF./REV) | 15,4% | 13,9% |
| NET PROFIT | 92.1 | 76.1 |
| NET MARGIN (NET PROF/REV) | 12,1% | 9,8% |
Data hereinabove indicated are still subject to auditing.