Press Releases
Bulgari Group: growing financial results in the first quarter 2005
- Turnover: 179.4 million Euro (+12.8% at comparable exchange rates)
- Contribution margin: 65.2% vs. 62.5% in 2004
- Operating profit (including advertising and promotional activities): 41.9 million Euro (+20%)
- Operating profit: 18.3 million Euro (-3%)
- Net profit: 14.7 million Euro (+9.1%)
Rome, May 12th 2005 - The Board of Directors of Bulgari S.p.A. approved today the consolidated financial statements for the Bulgari Group’s first quarter 2005, which highlight a turnover of 179.4 million Euro increased by 12.8% at comparable exchange rates (+11.9% at current exchange rates) in comparison with the same period of last year.
The period January - March 2005 registered, once again, a strong growth in jewellery sales (+ 10.2% compared to the first quarter 2004), which has to be compared to a similarly remarkable performance posted last year (+13.8%). Although it has been moderate, the increase for the watch segment sales in the quarter (+3.1%) - penalised by the anticipation of the Basel Fair, which induced the wholesale network to postpone the orders in view of the new product launches – confirms the recovery of this product category also testified by the sales performance of Bulgari directly-operated stores. The strong growth of perfumes sales (+19.8% in addiction to +10.1% posted last year) can be attributed to the extraordinary hail for the new men fragrance Aqva and to the continuative success of all the other Bulgari fragrances. Accessories registered an outstanding success as well (+28.3%), testifying the appeal of the Bulgari brand also in a quite new business segment for the company.
As far as geographical areas are concerned, great satisfaction comes from the sales performance in the United States (+33.7%) that has to be compared with an already very high comparison base (+21.6% in the first quarter 2004 vs. 2003) and in Japan (+19.9% and despite the comparison base of 23.1% in the first quarter 2004 vs. 2003). Sales were positive in the Far East (+8.6%) and it’s also to be underlined the encouraging recovery signs in countries like Italy (+21.4%), while the weak tourist flows and a general negative economic climate keep on penalising the rest of Europe (-0.8%).
All the variations reported above are expressed at comparable exchange rates.
The contribution margin went from 100.3 million Euro in first quarter 2004 to 117.1 million Euro in first quarter 2005, with an increase of 16.8%, and climbed from 62.5% to 65.2% in terms of impact on sales. This relevant increase is due not only to the accounting consolidation of 100% of Crova’s production activity and to the integration of 65% of the activities related to the Bulgari Hotel in Milan but also to the further optimisation of production processes.
The operating profit including advertising and promotional expenses was 41.9 million Euro with an increase of 20% compared to 34.8 million Euro of last year.
The operating profit was 18.3 million Euro (-3% compared to 18.9 million Euro in the same quarter 2004) and in terms of impact on net revenues it went from 11.8% in 2004 to 10.2% in 2005.
This reduction, despite the constant recovery of efficiency, should be attributed to the strong increase of operating costs (+21.4%), which went from 81.3 million Euro in the first quarter 2004 to 98.7 million Euro in the first quarter 2005 and which are mainly due to the exceptional communication investments, in addition to the daily management activities and to the consolidation of Crova and the Hotel’s activities. Promotional and advertising expenses went from 15.9 million Euro (9.9% of turnover) to 23.6 million Euro (13.2% of turnover) with an extraordinary increase of 48.3% to support the launch of the perfume Aqva and of other important new products presented in all categories through this quarter.
The net profit was 14.7 million Euro compared to 13.5 million Euro of last year (+9.1%) and represents 8.2% of turnover (vs. 8,4% of turnover in 2004). Taxes and not operating costs kept to register a positive trend thanks to the accurate monitoring activity of the Group.
Financial net indebtedness of the Group as of 03.31.2005 was 36.2 million Euro, compared to 72.9 million Euro as of 03.31.2004. This significant reduction is due to the high cash flow generated by the operative management and to an improvement of the logistics cycle. As a matter of fact, inventory increased of 6.3% only (from 464 million Euro at the end of March 2004 to 493 million Euro at the end of March 2005) and highlights a further optimisation of the rotation index.
INTERNATIONAL ACCOUNTING STANDARDS
The Group is completing the transition to the International Accounting Standards (IAS). In this ambit, as provided by the CONSOB deliberation n. 14990 dated April 15th 2005, art. 82-bis, the present quarterly report has been drafted in accordance with the criteria indicated by Legislative decrees n. 127/91, n. 87/92 and n. 173/97, while the application of the dispositions established by the International Accounting Standard IAS 34 is expected as from next half-year 2005 report.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented: “The results achieved through this first quarter of the year and distinguished by the outstanding trend of jewellery, the growth of the watch segment and - even more - by the extraordinary business performance of perfumes and accessories make me optimistic also for the forthcoming months and confirm that we are going in the right direction according to the guidance previously given to the market. Furthermore, I would like to underline the constant and steady sales growth in Japan and United States - countries where the Bulgari brand continues to show all its strength and vitality - and the sales recovery in the Italian market, which allows me to hope for a wider economic upturn in Europe.”
Bulgari is one of the global players on the luxury market. In 2004 the Group posted a turnover of 828 million Euro, a net profit of 108 million Euro. With a market capitalization of about 2,49 million Euro (as of 05.11.2005), Bulgari relies on a distribution network of 194 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 perfumes. The Group is controlled by the Bulgari family, holding about 52.0% of the share capital. The remaining 48.0% is floating on the Milan Stock Exchange.
| PRODUCT CATEGORIES | Q1 05 M.EUR | % ON TOTAL REVENUES |
DELTA% Q1 05/Q1 04 |
|
|---|---|---|---|---|
| AT CURRENT FX REPORTED | AT COMP. FX RATES | |||
| JEWELS | 72.2 | 40.3% | +9.1% | +10.2% |
| WATCHES | 50.3 | 28.0% | +1.8% | +3.1% |
| PERFUMES | 34.1 | 19.0% | +20.3% | +19.8% |
| ACCESSORIES | 17.5 | 9.8% | +27.9% | +28.3% |
| ROYALTIES / OTHERS | 5.3 | 2.9% | +97.5% | N/A |
| Total | 179.4 | 100% | +11.9% | +12.8% |
| GEOGRAPHICAL AREAS | Q1 05 M.EUR | % ON TOTAL REVENUES | DELTA% Q1 05/Q1 04 |
|
|---|---|---|---|---|
| AT CURRENT FX REPORTED | AT COMP. FX RATES |
|||
| ITALY | 21.7 | 12.1% | +21.4% | |
| EUROPE EX IT. | 37.9 | 21.1% | -0.8% | |
| AMERICAS | 30.3 | 16.9% | +29.4% | +33.7% |
| JAPAN | 47.2 | 26.3% | +18.3% | +19.9% |
| FAR EAST | 32.1 | 17.9% | +7.7% | +8.6% |
| M.EAST/OTH | 10.2 | 5.7% | -8.2% | N/A |
| Total | 179.4 | 100% | +11.9% | +12.8% |
| M.EURO | Q1 05 | Q1 04 |
|---|---|---|
| REVENUES | 179.4 | 160.3 |
| OPERATING PROFIT | 18.3 | 18.9 |
| EBIT MARGIN | 10.2% | 11.8% |
| NET PROFIT | 14.7 | 13.5 |
| NET MARGIN | 8.2% | 8.4% |
For further information
| Media relations | Analysts / investors relations |
| Paolo Piantella | Renata Casaro |
| Corporate Financial Press Office Director | Investor Relations Director |
| tel. +39 06 68 810 593 | tel. +39 06 68 810 467 |
| e-mail paolo.piantella@bulgari.com | e-mail renata.casaro@bulgari.com |
| www.bulgari.com | http://ir.bulgari.com |