Press Releases
Bulgari Group: excellent results in the fourth quarter 2005
- Turnover
Fourth Quarter 2005 311.2 million Euro (+12.6% at comparable ex. rates) Full Year 2005 918.5 million Euro (+ 10.6% at comparable ex. rates) - Gross Margin
Fourth Quarter 2005 66.1% vs. 65.1% in the fourth quarter 2004 Full Year 2005 65.0% vs. 63.6% in the full year 2004 - Operating profit (before promotional and advertising investments)
Fourth Quarter 2005 111.2 million Euro (+27.2%) Full Year 2005 259.1 million Euro (+13.5%) - Operating profit
Fourth Quarter 2005 72.4 million Euro (+31.9%) Full Year 2005 142.8 million Euro (+8.4%) - Net profit
Fourth Quarter 2005 61.2 million Euro (+32.3%) Full Year 2005 116.4 million Euro (+7.1%) - Proposed dividend: 0.25 Euro per share (+13.6%)
- Proposed date for coupon clipping: May 22nd 2006
Rome, March 27th 2006 - The Board of Directors of Bulgari S.p.A. approved today the draft of financial statement for the Company and the draft of consolidated financial statements for the Group in 2005. The consolidated financial statements for the Group in 2005 have been prepared in accordance with IAS/IFRS principles.
Bulgari Group consolidated turnover of the fourth quarter 2005 was 311.2 million Euro, compared to 275.0 million Euro of 2004 (+12.6% at comparable exchange rates and + 13.2% at current exchange rates). The quarter ended with positive sales results in all product categories: at comparable exchange rates, in fact, jewellery increased by 8.3%, watches by 16.2% - also thanks to the introduction in the last part of the year of the new model Assioma, which generated solid sales volumes and whose performance continues to be very positive – perfumes by 14.9% and accessories by 11.8%. As far as geographical areas are concerned, a strong recovery in Europe (+33.0% at current exchange rates), thanks to the good performance with local clientele and to a reasonable upturn of tourist flows, must be underlined, together with the outstanding sales results registered in Japan (+19.7% at comparable exchange rates) and in Middle East (+22.2% at current exchange rates). A positive sales trend in Italy (+9.4%) and the substantial stability in United States (+1.0% at comparable exchange rates and to be compared with the very challenging base of +21% posted in the fourth quarter of the two previous years) must be put in evidence, while Far East (-14.3% at comparable exchange rates) was penalised by a general weakness of the local market and by the stricter distribution policies carried out by the company towards third parties.
Gross margin of the quarter – from 179.0 million Euro in 2004 to 205.7 million Euro in 2005 (+14.9%) – went from 65.1% to 66.1%. The improvement is particularly significant in consideration of the rise in prices of the main raw materials and testifies, once again, the efficacy of the measures adopted to increase productive efficiency and to reach a greater vertical integration in strategic sectors.
Operating costs, excluding advertising and promotional expenses, went from 91.6 million Euro in the fourth quarter 2004 to 94.5 million Euro in the fourth quarter 2005 (+3.1%), and the operating profit before advertising and promotional expenses was therefore 111.2 million Euro, with an increase of 27.2% compared to 87.4 million Euro of the same quarter of last year, thus raising this operating margin from 31.8% to 35.7%.
In line with the investment strategies of the Group, advertising and promotional activities registered an increase of 19.2%, going from 32.5 million Euro in the fourth quarter 2004 (11.8% of turnover) to 38.8 million Euro in the fourth quarter 2005 (12.5% of turnover). Operating profit was therefore 72.4 million Euro (+31.9% compared to 54.9 million Euro in the fourth quarter 2004), with an impact on net revenues of 23.3% (20.0% in the same quarter of last year).
Net profit of the quarter was 61.2 million Euro compared to 46.2 million Euro of the fourth quarter 2004 (+32.3%), thus representing 19.7% of turnover (16.8% in the same quarter of last year).
As for full year 2005, consolidated revenues were 918.5 million Euro (+10.6% at comparable exchange rates) in comparison to 831.6 million Euro posted in the last financial year. Gross margin went from 529.1 million Euro to 596.9 million Euro (from 63.6% to 65.0%).
Operating costs , excluding advertising and promotional expenses, went from 301.0 million Euro in 2004 to 337.9 million Euro in 2005 (+12.3%). Operating profit before advertising and promotional expenses was therefore 259.1 million Euro with an increase of 13.5% compared to 228.2 million Euro of the previous year, with an increase of this operating margin from 27.4% to 28.2%. Advertising and promotional activities registered an extraordinary increase of 20.6%, from 96.4 million Euro in 2004 (11.6% of turnover) to 116.3 million Euro in 2005 (12.7% of turnover), in order to sustain the important launches made during the year in all product categories. Such investments should be under 12.0% in the financial year 2006. Operating profit was 142.8 million Euro (+8.4% compared to 131.8 million Euro in 2004), while net profit was 116.4 million Euro compared to 108.8 million Euro in the previous year (+7.1%).These results have been achieved in a context of relevant investments for the Bulgari Group in three main areas: the further enlargement and upgrading of the directly run distribution network with the opening of important flagship stores in London (New Bond Street in November 2004), Osaka (in November 2004) and Paris (Place Vendôme in December 2005); the implementation of the new accessories project, with the development of a wider product assortment, the study of a new store format and the opening of two stores fully dedicated to this product category (in Tokyo and Osaka in November 2005); the perfumes direct distribution in US.
Financial net indebtedness of the Group as of 12.31.2005 was 49.9 million Euro compared to 13.0 million Euro as of 12.31.2004, while inventory increased by 9.0% (from 463.2 million Euro at the end of 2004 to 505.1 million Euro at the end of 2005), further increasing its rotation.
The Board of Directors has also approved the draft of financial statement for the parent company Bulgari S.p.A., which highlighted a net profit of 60.1 million Euro (compared to 56.6 million Euro of 2004). The parent company’s total revenues were 58.3 million Euro (51.7 million Euro in 2004), with an increase of 12.7%.
The Board of Directors has also approved to propose the distribution of a unit dividend of 0.25 Euro compared to 0.22 Euro of the last financial year (+13.6%). This proposal will be submitted to the approval of the the Annual General Meeting taking place next April 27th, 2006 11.00 am on first call and on May 2nd, 2006 11.00 am on second call. The Board also approved to submit to the Annual Meeting the date of May 25th, 2006 for the dividend payment by clipping coupon n. 12 on May 22nd, 2006.
The Board of Directors has approved the report to be presented to the shareholders' meeting relating to the resolution authorising the purchase and/or sale of its own shares, to be used to stabilise the stock price, to create the Company's own portfolio which may be used to service the issuance of convertible bonds or warrants or to allow a reduction of the share capital, if any, through cancellation of such shares. The authorisation concerns the purchase and/or sale of a maximum of 25,000,000 of its own shares. As of today, the Company does not own its own shares. The authorisation is requested for a maximum period of 18 months from the date of the shareholders meeting which will decide to authorise said purchase and/or sale. The corresponding minimum and maximum purchase and/or sale price shall not be less than Euro 5 and shall not exceed Euro 15.
The Board of Directors has approved the annual corporate governance report as well as the new Procedure for disclosure to the market of the transactions effected by Relevant Persons and by persons related to them.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented: “I am satisfied with the results achieved by the Group in the fourth quarter of the year and in the full year 2005, which are in line with our expectations and were reached in a general context of important investments for the future. In addition to the satisfaction for the sales performance of jewellery and perfumes, I am particularly enthusiastic about the sales of watches, whose excellent performance during the forth quarter proved the winning combination between product development and distribution strategies. With this significant premises and also thanks to the accessories project, which saw massive investments while giving us a great satisfaction, I am convinced that 2006 will confirm a further growth for the Group and the strengthening of the Bulgari brand all over the world.”
For further information:
| Media relations | Investor 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 |
For further technical details: http://ir.bulgari.com
BULGARI GROUP
| M.EURO | 2005 | 2004 |
|---|---|---|
| REVENUES | 918.5 | 831.6 |
| OPERATING PROFIT | 142.8 | 131.8 |
| % OP.PROF./TURNOVER | 15.5% | 15.8% |
| NET PROFIT | 116.4 | 108.8 |
| %NET PROF./TURNOVER | 12.7% | 13.1% |
| REVENUES by PRODUCT CATEGORY |
2005 | Q4 2005 | % growth 2005/2004 FULL YEAR |
% growth 2005/2004 FOURTH QUARTER |
||
|---|---|---|---|---|---|---|
| M. Euro | At current exchange rates REPORTED |
At comparable exchange rates | At current exchange rates REPORTED | At comparable exchange rates | ||
| Jewels | 368.2 | 118.9 | +7.5% | +7.6% | +9.0% | +8.3% |
| Watches | 267.9 | 96.2 | +4.5% | +4.5% | +17.6% | +16.2% |
| Perfumes | 182.4 | 67.3 | +18.3% | +18.5% | +14.6% | +14.9% |
| Accessories | 76.9 | 22.3 | +23.8% | +24.2% | +12.0% | +11.8% |
| Royalties/other | 23.1 | 6.5 | +42.3% | n.a. | +20.9% | n.a. |
| Total | 918.5 | 311.2 | +10.5% | +10.6% | +13.2% | +12.6% |
| REVENUES by GEOGRAPHICAL AREA |
2005 | Q4 2005 | % growth 2005/2004 FULL YEAR |
% growth 2005/2004 FOURTH QUARTER |
||
|---|---|---|---|---|---|---|
| M. Euro | At current exchange rates REPORTED |
At comparable exchange rates | At current exchange rates REPORTED |
At comparable exchange rates | ||
| ITALY | 129.9 | 44.0 | +15.4% | - | +9.4% | - |
| EUROPE ex IT | 218.6 | 78.4 | +15.2% | - | +33.0% | - |
| AMERICAS | 138.2 | 46.9 | +12.6% | +12.5% | +4.8% | +1.0% |
| JAPAN | 238.9 | 83.6 | +15.7% | +17.4% | +17.9% | +19.7% |
| FAR EAST | 139.6 | 41.9 | -4.7% | -6.6% | -10.3% | -14.3% |
| M.EAST/OTHER | 53.3 | 16.4 | -0.4% | n.a. | +22.2% | n.a. |
| Total | 918.5 | 311.2 | +10.5% | +10.6% | +13.2% | +12.6% |
Source: Bulgari S.p.A. - Non audited results.