Press Releases
Bulgari further accelerates its growth in the third quarter 2004
Third quarter 2004:
- Turnover: 202 million Euro (+11%)
- Turnover increase at comparable exchange rates (+13%)
- Operating profits: 35 million Euro (+30%)
- Net profits: 28 million Euro (+50%)
Rome, November 12 2004 - The Board of Directors of Bulgari S.p.A. approved today the consolidated financial statements for the Bulgari Group as of 30 September 2004.
Revenues in the third quarter were 201.6 million Euro compared to 181.9 million Euro in the same period of the previous year posting an increase of 11%. Turnover at comparable exchange rates increased by 13%. In the first nine months turnover was 554.4 million Euro (+8% at current exchange rates and +11% at comparable exchange rates) compared to 512.0 million Euro in the same period of 2003.
In the third quarter 2004 operating profits registered an increase of 30% from 27.0 million Euro to 35.2 million Euro. In the first nine months of the year the increase was +25% from 62.1 to 77.5 million Euro.
Net profits in the third quarter increased by 50% from 18.9 to 28.3 million Euro. In the first nine months of 2004 net profits posted an increase of 41% from 43.9 to 62.0 million Euro.
As far as product categories are concerned, in the third quarter 2004 jewellery sales registered a growth of 15%*, following the 21%* increase posted in 2003 thus confirming the extraordinary performance of this product category. The watch segment confirms the recovery already registered in the first semester of this year with a strong growth of revenues in this quarter (+24%*). Despite the high base of comparison (+39%* in the third quarter 2003) also accessories registered a further increase of revenues, +27%*. Fragrance sales that should be compared to the exceptional increase (+48%*) of the same period of the previous year due to the launch of Omnia - remained essentially unchanged compared to 2003 even in the third quarter of this year (-5%*).
As for the geographic areas, Bulgari continues its strong expansion in Japan with a further growth of 32%* in the third quarter 2004 following the excellent performance registered last year (+23%*).
Also the US continued posting a significant sales increase in the third quarter 2004 (+17%*) while the Far East reinforced its sales growth with a further increase of 14%*.
Europe and Italy showed signs of recovery. Despite Europe registered a downturn of revenues (-8%) in the third quarter 2004, this has to be compared with the very high growth rate in the third quarter 2003 (+25%). In particular, Italy registered a turnover increase of 18% in the third quarter 2004 compared to the third quarter 2003.
In the third quarter 2004 the contribution margin increased from 110.0 million Euro to 126.9 million Euro (+15% compared to the third quarter of the previous year). The percentage contribution margin also supported by the product mix increased by 250 basis points from 60.5% to 63.0%. In the first nine months of this year the improvement of the percentage contribution margin was 130 basis points (from 61.7% to 63.0%).
Operating costs in the quarter advertising and promotion expenses excluded were 70.8 million Euro compared to 67.5 million Euro in the same period 2003 (+5%). A significant increase (+35%) was registered for advertising and promotion expenses from 15.5 million Euro in the third quarter of 2003 to 20.9 million Euro in the third quarter 2004. In the first nine months of 2004 operating costs - advertising and promotion expenses excluded increased only by 2% while those for advertising and promotion by 29%.
Operating profits increased by 30% in the third quarter 2004 to 35.2 million Euro from 27.0 million Euro (+25% in the first nine months of 2004 to 77.5 million Euro from 62.1 million Euro). Operating margin therefore strongly improved both in the third quarter (17.4% compared to 14.9%) and in the first nine months of 2004 (14.0% compared to 12.1%).
Net profits increased by 50% in the third quarter of 2004 to 28.3 million Euro from 18.9 million Euro last year (+41% in the first nine months of 2004 to 62.0 million Euro from 43.9 million Euro) Net margin went therefore from 10.4% to 14.0% in the third quarter 2004 and from 8.6% to 11.2% in the first nine months of 2004.
In the last 12 months net indebtedness of the Group was nearly halved from 156 million Euro as of 09/30/2003 to 89 million Euro as of 09/30/2004. The financial situation improved also thanks to the further optimisation of the networking capital that decreased from 503.0 million Euro as of 09/30/2003 to 496.0 million Euro as of 09/30/2004 despite the strong turnover increase. The further improvement in the inventory was also significant, with the rotation reduced from 219 days as of the end of September 2003 to 212 days as of the end of September 2004.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented: I continue to be very satisfied with the results reached by the Group so far, not only because they were achieved in a still uncertain and difficult environment but also because they prove a healthy and vigorous growth in all product categories and in all markets. In particular I would like to underline the strong recovery in watch sales that continue to register positive and encouraging signs as well as the further and ongoing turnover expansion in Japan. This market still represents for Bulgari a huge growth potential where we want to continue investing as confirmed by the opening of the mega store in Osaka last week.
Furthermore I am convinced that the steady success of Bulgari in all geographic areas is due both to the extraordinary strength of the brand and to the exceptional creativity of all new products we presented and which have been hailed by our clientele. Thinking about the product launches planned for next year, I am fully optimistic and very confident for the months to come. Finally, in light of the results reached by the Group and in presence of a good sales trend during the holiday season, for the full year 2004 sales at comparable exchange rates could likely reach a double digit growth rate and net profits a more than proportional increase..
* at comparable exchange rates
Bulgari is one of the global players on the luxury market. In 2003 the Group posted a turnover of 759 million Euro, a net profit of 92 million Euro. With a market cap (as of. 11.11.2004) of 2,531 million Euro, Bulgari relies on a distribution network of 190 stores in the most exclusive shopping areas in the world and on selected distributors. Bulgari has a product portfolio that ranges from jewels and watches to accessories and fragrances. The Group is controlled by the Bulgari family, holding 54% of shares. The remaining 46% is floating on the Milan Stock Exchange.
BULGARI GROUP FINANCIAL HIGHLIGHS THIRD QUARTER
| M.EURO | Q3 04 | Q3 03 | DELTA Q3 04/Q3 03 | |
|---|---|---|---|---|
| REVENUES | 201.6 | 181.9 | +10.9% | |
| OPERATING PROFIT | 35.2 | 27.0 | +30.1% | |
| NET PROFIT | 28.3 | 18.9 | +50.1% | |
BULGARI GROUP FINANCIAL HIGHLIGHS NINE MONTHS
| M.EURO | 9M 04 | 9M 03 | DELTA 9M 04/9M 03 |
|
|---|---|---|---|---|
| REVENUES | 554.4 | 512.0 | +8.3% | |
| OPERATING PROFIT | 77.5 | 62.1 | +24.7% | |
| NET PROFIT | 62.0 | 43.9 | +41.2% | |
BULGARI GROUP REVENUES BY PRODUCT CATEGORY THIRD QUARTER
| Q3 2004 | Q3 2003 | % growth Q3 2004/Q3 2003 |
||
|---|---|---|---|---|
| M.Euro | REPORTED | AT COMPARABLE FX RATES |
||
| JEWELS | 80.6 | 71.9 | +12.1% | < +14.5% |
| WATCHES | 65.1 | 54.1 | +20.4% | +23.6% |
| PERFUMES | 37.7 | 40.3 | -6.5% | -4.9% |
| ACCESSORIES | 15.1 | 12.0 | +26.2% | +27.1% |
| ROYALTIES & OTH. | 3.1 | 3.6 | -13.7% | N/A |
| TOTAL | 201.6 | 181.9 | +10.9% | +13.1% |
BULGARI GROUP REVENUES BY PRODUCT CATEGORY NINE MONTHS
| 9M 2004 | 9M 2003 | % growth 9M 2004/9M 2003 |
||
|---|---|---|---|---|
| M.Euro | REPORTED | AT COMPARABLE FX RATES |
||
| JEWELS | 233.5 | 208.5 | +12.0% | +15.0% |
| WATCHES | 174.6 | 161.0 | +8.5% | +12.6% |
| PERFUMES | 95.5 | 91.8 | +4.0% | +7.2% |
| ACCESSORIES | 42.1 | 39.7 | +6.1% | +8.5% |
| ROYALTIES & OTH. | 8.7 | 11.0 | -21.2% | N/A |
| TOTAL | 554.4 | 512.0 | +8.3% | 11.5% |
BULGARI GROUP REVENUES BY GEOGRAPHICAL AREA THIRD QUARTER
| Q3 2004 | Q3 2003 | % growth Q3 2004/Q3 2003 |
||
|---|---|---|---|---|
| M.Euro | REPORTED | AT COMPARABLE FX RATES |
||
| ITALY | 25.6 | 21.8 | +17.8% | - |
| EUROPE ex IT | 46.3 | 50.5 | -8.3% | N/A |
| AMERICAS | 28.8 | 26.4 | +9.2% | +17.3% |
| JAPAN | 51.2 | 39.4 | +29.9% | +31.7% |
| FAR EAST | 36.4 | 33.3 | +9.3% | +13.9% |
| M.EAST+Oth | 13.3 | 10.5 | +26.7% | N/A |
| TOTAL | 201.6 | 181.9 | +10.9% | +13.1% |
BULGARI GROUP REVENUES BY GEOGRAPHICAL AREA NINE MONTHS
| 9M 2004 | 9M 2003 | % growth 9M 2004/9M 2003 |
||
|---|---|---|---|---|
| M.Euro | REPORTED | AT COMPARABLE FX RATES |
||
| ITALY | 70.1 | 70.8 | -0.9% | - |
| EUROPE ex IT | 130.7 | 134.3 | -2.7% | N/A |
| AMERICAS | 78.1 | 69.0 | +13.1% | +22.5% |
| JAPAN | 135.6 | 109.6 | +23.7% | +25.8% |
| FAR EAST | 99.7 | 96.0 | +3.9% | +9.6% |
| M.EAST+Oth | 40.2 | 32.3 | +24.4% | N/A |
| TOTAL | 554.4 | 512.0 | +8.3% | +11.5% |
Source: Bulgari S.p.A. Not yet audited results.
For further information
Paolo Piantella
Corporate Financial Press Office Director
tel. +39 06 68 810 593
email: paolo.piantella@bulgari.com