Press Releases
Bulgari Group: excellent results in the first half 2006
- Turnover: 447.8 million Euro (+15.0% at comparable exchange rates)
- Gross margin: 286.5 million Euro (+14.3%)
- Operating profit: 52.7 million Euro (+36.9%)
- Net profit: 44.4 million Euro (+53.3%)
Rome, September 13th 2006 – The Board of Directors of Bulgari S.p.A. approved today the consolidated financial statements for the Bulgari Group as of June 30th 2006, which show a turnover of 447.8 million Euro, increased by 15.0% at comparable exchange rates in comparison with the same period of last year (+15.1% at current exchange rates).
All the variations reported below, unless noted otherwise, are expressed at comparable exchange rates.
The period January - June 2006 registered once again an increase in sales in the jewellery segment (+9.9%), core business of the company, also boosted by the launch of the new Parentesi collection. The watch segment - which benefited from the success of the new interpretation of the BVLGARI BVLGARI collection presented at the Basel Fair - registered a particularly positive performance in the half year (+17.9%), together with the perfumes (+12.0%). The extraordinary growth of accessories continued (+32.3%) thanks to the excellent success of the new collections with the clientele. As far as geographical areas are concerned, the sales growth in Japan was still very strong (+30.9%), supported by the more attentive policies of the company towards third party distributors. Sales performance was outstanding in Middle East /Other (+21.3% at current exchange rates) and in Europe excluding Italy (+21.3%). United States posted a positive sales trend in the half year (+10.6%) as well as Italy (+7.4%) thanks, among the other things, to the excellent sales results registered in the Bulgari’s owned stores. Far East excluding Japan (-8.3%), finally, despite the weakness of some local markets and the completion of the actions carried out towards third party distributors, showed signs of strong recovery in the second quarter of the year (+7.7%).
Gross margin went from 250.6 million Euro in the first half 2005 to 286.5 million Euro in the first half 2006, increasing by 14.3% and remaining substantially stable as a percentage on sales (64.0% in 2006 compared to 64.4% in 2005). This is the result on one hand of the main currencies evolution and the rise in prices of raw materials, gold in particular, while showing on the other hand the first positive effects of the price increase adopted by the Company and the achievement of production and distribution efficiencies generated by the greater verticalisation in these activities.
Operating profit was 52.7 million Euro (+36.9% compared to 38.5 million Euro in the first half 2005), thus moving from 9.9% on turnover in the corresponding period of last year to 11.8% in 2006. Operating costs, excluding advertising and promotional expenses, increased from 156.8 million Euro in the first half 2005 to 180.5 million Euro in the first half 2006 (+15.1%). This increase is essentially due to the ongoing important investments strengthening and enlarging the distribution network and the directly owned stores in the most relevant geographic areas, and, to a lesser extent, to the enlargement of the consolidation perimeter due to the inclusion of the verticalised activities. Advertising and promotional expenses registered a decrease at 53.2 million Euro (-3.7% compared to 55.3 million Euro in the first half 2005 and equal to 11.9% of turnover in comparison to 14.2% of turnover in the first half 2005).
Net profit was 44.4 million Euro, compared to 28.9 million Euro of last year (+53.3%) and represented 9.9% of turnover (7.4% in 2005).
Financial net indebtedness of the Group as of 06.30.2006 was 115.5 million Euro compared to 128.4 million Euro as of 06.30.2005 and to 49.9 million Euro as of 12.31.2005. The increase of the indebtedness in these first six months, compared to the end of 2005, is essentially attributed to 2006 dividend distribution for more than 74.5 million Euro, and to the physiological inventory increase in the new products in anticipation of the second part of the year, when sales normally reach their highest level. The increase of the inventory in comparison to June 30th 2005 was 23.4 million Euro (+4.4%, from 526.7 to 550.1 million Euro), with an improvement of the rotation indexes (203 days in June 2006 vs. 219 days in June 2005).
The Board of Directors also approved the financial statements of the parent company attached to the consolidated financial statements – prepared for the first time in accordance with the international accounting principles - which highlighted a net profit of 17.9 million Euro (29.2 million Euro in the first half 2005), including dividends from subsidiary companies for 30 million Euro. The parent company’s total revenues in the first half 2006, consisting almost entirely of royalties incomes from the Bulgari brand, amounted to 29.9 million Euro, with an increase of about 10.4% compared to 27.1 million Euro of last year. The Board approved also the reconciliation prospects of the parent company as provided by the paragraph n. 39 and n. 40 of the international accounting principle IFRS 1 – "First-time adoption of the International Financial Reporting Standard" and, as recommended by the Consob Communication n. DEM/6064313 of July 28th 2006, entrusted KPMG with the complete revision of the balances included in the reconciliations.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented: "I am very satisfied with the excellent results achieved in the first half of this year, which confirm the strength of the Bulgari brand and the efficacy of the production and distribution investments the Company is carrying out all over the world. Therefore I am confident that – in presence of a good sales performance in the year end holiday season and in absence of extraordinary events – the Bulgari Group can reach in 2006 a growth of 10% at comparable exchange rates for turnover and net profits".
Bulgari is one of the global players on the luxury market. In 2005 the Group posted a turnover of 919 million Euro, a net profit of 116.4 million Euro (IAS/IFRS restated). With a market capitalization of about 2,995 million Euro (as of 09.12.2006), Bulgari relies on a distribution network of more than 200 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. As of June 30th 2006, the share capital of Bulgari S.p.A. consists of 298,266,460 shares each of par value 0.07 Euro.
BULGARI GROUP PROFIT AND LOSS
| M.EURO | H1 06 | H1 05 | DELTA H1 06 vs H1 05 |
|---|---|---|---|
| REVENUES | 447.8 | 389.2 | +15.1% |
| GROSS PROFIT | 286.5 | 250.6 | +14.3% |
| GROSS MARGIN | 64.0% | 64.4% | - |
| OPERATING PROFIT BEFORE ADVERTISING AND PROMOTION | 106.0 | 93.8 | +12.9% |
| OPERATING PROFIT | 52.7 | 38.5 | +36.9% |
| EBIT MARGIN | 11.8% | 9.9% | - |
| NET PROFIT | 44.4 | 28.9 | +53.5% |
| NET MARGIN | 9.9% | 7.4% | - |
BULGARI GROUP - REVENUES BY GEOGRAPHICAL AREA
| M.EURO | 2006 | GROWTH 2006 vs 2005 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | H1 | Q1 2006/ Q1 2005 | Q2 2006/ Q2 2005 | H1 2006/ H1 2005 | ||||
reported |
at comp fx |
reported |
at comp fx |
reported |
at comp fx |
||||
| Italy | 24,679 |
30,751 |
55,430 |
13.9% |
- |
2.7% |
- |
7.4% |
- |
| Europe ex Italy | 48,149 |
60,412 |
108,561 |
27.1% |
- |
17.0% |
- |
21.3% |
- |
| Americas | 34,975 |
34,846 |
69,821 |
15.3% |
8.4% |
12.7% |
12.9% |
14.0% |
10.6% |
| Japan | 57,974 |
65,730 |
123,704 |
22.8% |
25.3% |
30.3% |
36.3% |
26.7% |
30.9% |
| Far East | 25,572 |
37,186 |
62,758 |
(20.3%) |
8.2% |
7.7% |
(5.6%) |
-8.3% |
|
| M.East and Oth | 12,534 |
14,966 |
27,500 |
22.5% |
N.A. |
20.3% |
N.A. |
21.3% |
N.A. |
| Total | 203,883 |
243,891 |
447,774 |
13.6% |
11.9% |
16.3% |
16.9% |
15.1% |
15.0% |
BULGARI GROUP - REVENUES BY PRODUCT CATEGORY
| M.EURO | 2006 |
GROWTH 2006 vs 2005 |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | H1 |
Q1 2006/ Q1 2005 | Q2 2006/ Q2 2005 |
H1 2006/ H1 2005 | ||||
reported |
at comp fx |
reported |
at comp fx |
reported |
at comp fx |
||||
| Jewels | 79,440 |
100,154 |
179,594 |
10.0% |
8.2% |
9.8% |
10.4% |
9.9% |
9.9% |
| Watches | 58,306 |
69,829 |
128,135 |
15.9%
| 13.1% |
20.7% |
21.2% |
18.5% |
17.9% |
| Perfume | 33,695 |
45,124 |
78,819 |
(1.2%) |
-1.9% |
24.2% |
24.8% |
11.9% |
12.0% |
| Accessories | 25,417 |
22,084 |
47,501 |
44.8% |
44.2% |
18.4% |
20.1% |
31.2% |
32.3% |
| Other | 7,025 |
6,700 |
13,725 |
33.9% |
N.A. |
18.1% |
N.A. |
25.7% |
N.A. |
| Total | 203,883 |
243,891 |
447,774 |
13.6% |
11.9% |
16.3% |
16.9% |
15.1% |
15.0% |
Source: Bulgari S.p.A. – Not audited results.
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 |