Press Releases
Bulgari Group: record results in 2006
 |
Turnover | 1,010.4 million Euro |
| (+ 12.0% at comparable exchange rates) |
|
Gross Margin | 649.1 million Euro (+8.7%) |
|
Operating profit | 155.9 million Euro (+9.2%) |
|
Net profit | 134.3 million Euro (+15.3%) |
|
Proposed dividend | 0.29 Euro per share (+16.0% and equal to a payout of 65%) |
Rome, March 22th 2007 - The Board of Directors of Bulgari S.p.A. approved today the draft financial statement for the Company and the draft consolidated financial statements for the Group for the full year 2006.
All the variations reported below and related to the revenues are expressed at comparable exchange rates unless noted otherwise.
Bulgari Group consolidated turnover for the full year 2006 reached 1,010.4 million Euro, compared to 918.5 million Euro in 2005 (+12.0% at comparable exchange rates and +10.0% at current exchange rates) and the financial year ended with excellent sales results for the Group in all product categories, thanks to the constant research and innovation carried out by the company and to the new product launches made during the year. Jewellery, in fact, increased by 11.2%, watches by 10.3% - also thanks to the excellent performance of the brands Daniel Roth and Gérald Genta – perfumes by 11.7% and accessories by 18.9%.
As far as geographical areas are concerned, Europe excluding Italy and United States led the revenues increase (+17.3% and +16.2% respectively) despite the strong comparison base in 2005. Sales in Japan rose by 13.6% while Far East (+6.6%) confirmed the turnaround already registered during the year. Middle East / Other (+7.0% at current exchange rates) showed an increase as well, while the performance of Italy was substantially stable in the year (+1.2%), compared to the challenging base of 2005 (+15.4%).
Gross margin – from 596.9 million Euro in 2005 to 649.1 million Euro in 2006 (+8.7%) –went from 65.0% to 64.2% in terms of percentage ratio on turnover. Despite the greater vertical integration reached by the Group in strategic sectors and the success of the measures adopted to increase productive efficiency, the margin improvement was eroded by the negative impact of exchange rates (yen and dollar in particular) and by the rise in prices of raw materials (mainly gold). It is worth underlining that, in line with the corporate policies, the Company made hedging transactions, whose positive results are reported in the Profit and Loss account as “financial incomes”, also for the amount related to commercial operations.
Operating costs went from 454.1 million Euro in 2005 to 493.2 million Euro in 2006 (+8.6%), mainly reflecting the important investments for the enlargement and upgrading of the distribution network. Advertising and promotional activities, in particular, were in line with the investment strategies of the Group and with the record levels of last year, and reached 112.9 million Euro, registering a slight decrease (-2.9%), mainly due to the effects of exchange rates. Operating profit was therefore 155.9 million Euro, increased by 9.2% compared to 142.8 million Euro of the previous year, with a percentage ratio on turnover substantially stable (15.4% in 2006 vs. 15.5% in 2005).
Net profit was 134.3 million Euro compared to 116.4 million Euro of last year (+15.3%) representing 13.3% of turnover (12.7% in 2005). This improvement, as mentioned above, was also due to the earnings from the hedging transactions on exchange rates and precious metals made by the Company and registered as financial income.
These excellent results have been achieved, once again, in the context of the important investments previously mentioned and made by the Group in the directly run distribution network both in Europe (Milan and Vienna among others) and in Asia (China, Thailand); the development of the accessory project with the opening of stores fully dedicated to this product category (Milan and Florence in Italy; Seoul in Asia).
As of 31st December 2006 the total number of Bulgari monobrand stores was 228, of which 133 were directly owned stores.
Financial net indebtedness of the Group as of 31.12.2006 was 47 million Euro compared to 50 million Euro as of 31.12.2005 while inventory increased by 5% (from 505.1 million Euro at the end of 2005 to 528.9 million Euro at the end of 2006), further increasing its rotation.
The Board of Directors has also approved the draft financial statement for the parent company Bulgari S.p.A., which highlighted a net profit of 79.9 million Euro (compared to 59.1 million Euro in 2005). The parent company’s total revenues were 73.4 million Euro (58.3 million Euro in 2005), with an increase of 25.8%.
Finally, the Board of Directors has also approved to propose the distribution of a unit dividend of 0.29 Euro compared to 0.25 Euro for the previous financial year (+16.0%). This proposal will be submitted to the approval of the Annual General Meeting taking place next April 24th, 2007 11.00 am on first call and on April 27th, 2007 11.00 am on second call. The Board also approved to submit to the Annual Meeting the date of May 24th, 2007 for the dividend payment by clipping coupon n. 13 on May 21st, 2007.
The Board of Directors of Bulgari S.p.A. examined and approved the Annual Report on Corporate Governance and the adherence to the Code of Conduct for Listed Companies for FY 2006. The report was drafted taking into account the recommendations set forth in the Code of Conduct published in July 2002. It should be noted that the Company already started a process to comply with the specific recommendations set forth in the New Code of Conduct published by Borsa Italiana last March 2006.
The Board of Directors also resolved to put to the vote of the Shareholders at their next meeting the authorisation to buy and sell the Company’s 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, which is a common practice for listed companies, in accordance with the requirements of Art. 144-bis of the Consob Regulation for Issuers, concerns the purchase and/or sale of a maximum of 25,700,000 of 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 18 each.
As of today, the Company does not own any of its own shares. Within the powers granted by the shareholders, the Company sold in February 2006 n. 600.313 own shares held in its portfolio as of December 31st, 2006 at an average price of sale of 9,68 Euro.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented: “I am very satisfied with the record results, even higher than the Company’s expectations, that the Group reached in 2006 in all product categories and geographical areas. Like the year just ended, 2007 will be characterized for Bulgari by a relevant commitment for the advertising and promotional support to the important product launches that will follow one another during the year and by a further acceleration of the investments for the development of the retail network: among others, I would like to mention the re-opening of the flagship store on Fifth Avenue in New York, the inauguration of the Bulgari Tower in Ginza and of the new Omotesando complex in Tokyo in addition to the enlargement of the network of stores fully dedicated to accessories, where the new accessories flagship store of Via Condotti in Rome stands out.
In light of these important initiatives and thanks to the unceasing strive for excellence of the Group, I am confident that – in a stable macro-economic environment and despite the forecasted persistent weakness of the Japanese market and the volatility of the yen – in 2007 Bulgari will be able to achieve a further increase in sales (at comparable exchange rates) and in net profit in a range between 8% and 12%, consolidating at the same time its position of absolute prestige in the worldwide luxury market”.
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 |
For further technical details: http://ir.bulgari.com
BULGARI GROUP
| EUR M. | 2006 | 2004 |
|---|---|---|
| REVENUES | 1,010.4 | 918.5 |
| EBIT | 155.9 | 142.8 |
| EBIT On Sales | 15.4% | 15.5% |
| NET PROFIT | 134.3 | 116.4 |
| NET PROFIT On Sales | 13.3% | 12.7% |
| REVENUES by PRODUCT CATEGORY |
FY 2006 | Q4 2006 | Variation % 2006/2005 FULL YEAR |
Variation % 2006/2005 FOURTH QUARTER |
||
|---|---|---|---|---|---|---|
| M. Euro | REPORTED | At comparable exchange rates | REPORTED | At comparable exchange rates | ||
| Jewels | 401.8 | 129.7 | +9.1% | +11.2% | +9.1% | +12.9% |
| Watches | 289.0 | 89.0 | +7.9% | +10.3% | -7.5% | -3.5% |
| Perfumes | 201.6 | 69.9 | +10.5% | +11.7% | +3.8% | +6.1% |
| Accessories | 88.8 | 26.3 | +15.5% | +18.9% | +17.7% | +23.1% |
| Royalties/other | 29.2 | 8.7 | +26.6% | n.a. | +34.0% | n.a. |
| Total | 1,010.4 | 323.6 | +10.0% | +12.0% | +4.0% | +7.5% |
| REVENUES by GEOGRAPHICAL AREA |
FY 2006 | Q4 2006 | Variation % 2006/2005 FULL YEAR |
Variation % 2006/2005 FOURTH QUARTER |
||
|---|---|---|---|---|---|---|
| M. Euro | REPORTED | At comparable exchange rates | REPORTED | At comparable exchange rates | ||
| ITALY | 131.4 | 46.6 | +1.2% | - | +5.7% | - |
| EUROPE ex IT | 256.3 | 83.7 | +17.3% | - | +6.8% | - |
| AMERICAS | 159.1 | 51.4 | +15.1% | +16.2% | +9.6% | +15.0% |
| JAPAN | 256.6 | 76.6 | +7.4% | +13.6% | -8.4% | -1.2% |
| FAR EAST | 149.8 | 51.4 | +7.3% | +6.6% | +22.7% | +25.5% |
| M.EAST/OTHER | 57.2 | 13.9 | +7.0% | n.a. | -14.9% | n.a. |
| Total | 1,010.4 | 323.6 | +10.0% | +12.0% | +4.0% | +7.5% |
Source: Bulgari S.p.A. - Unaudited results.