Press Releases
Bulgari Group: excellent results in the first half 2007
- Turnover: 488 million Euro (+15% at comparable exchange rates, +9% at current exchange rates)
- Gross margin: 311 million Euro (+9%)
- Operating profit: 62 million Euro (+17%)
- Net profit: 58 million Euro (+32%)
Rome, September 13th 2007 The Board of Directors of Bulgari S.p.A. approved today the consolidated financial statements for the Bulgari Group as of 30th June 2007 which highlight a turnover of 487.8 million Euro increased by 14.8% at comparable exchange rates (+8.9% at current exchange rates) in comparison to the same period of last year.
Operating profit and net profit increased by 17.0% and 31.5% respectively in comparison to the same period of 2006.
Revenues by product category and geographical area
All the variations reported below are expressed at comparable exchange rates unless noted otherwise.
The period January June 2007 ended with outstanding sales results for the Group. The jewellery segment, core business of the Company, showed a significant growth (+20.8%), as well as watches (+10.2%), also thanks to the success of the new Assioma D model for women presented at the Basel Fair, and perfumes (+21.6%), whose performance is particularly brilliant considering the absence of relevant product launches in this first part of the year. Accessories registered a decrease (-8.2%) due both to the weakness of the Japanese market, where a very important part of the business for this product category is concentrated, and to the anticipation at the end of 2006 of the Spring-Summer 2007 collection deliveries. As far as geographical areas are concerned, the robust sales performance was very satisfying in the United States (+26.6%), in Europe (+10.9%), where the performance in Italy was particularly remarkable (+15.7%) and in Asia, excluding Japan, (+55.0%). Japan continued to post a weak performance (-9.0%), showing however a sales performance in the directly owned stores much better than in the third party distributors. Middle East/Other, finally, registered a 7.8% growth at current exchange rates despite the high comparison base (+21.3% in the first half 2006 at current exchange rates).
Profit & Loss highlights
Gross margin went from 286.5 million Euro in the first half 2006 to 311.5 million Euro in the first half 2007 increasing by 8.7% and remaining substantially stable in terms of percentage ratio on turnover (63.9% in 2007 compared to 64.0% in 2006). This result is remarkably positive considering the unfavourable currency trend and the rise in prices of raw materials - gold in particular - and it has been achieved thanks both to the selling price increases introduced at the beginning of the year and to the successful actions aiming to reach higher production and distribution efficiencies. The sales channel mix had a positive impact on the margin, since the directly owned stores posted an above-the-average turnover increase. Perfumes division had a positive impact on the margin as well, thanks to the enlargement of the direct distribution in an increasing number of markets. Operating costs, excluding advertising and promotional expenses, went from 180.5 million Euro in the first half 2006 to 194.4 million Euro in the first half 2007 (+7.7%). This increase must be essentially attributed to the important investments to strengthen and enlarge the network of the directly owned stores in all the main geographical areas and the direct distribution in the most important markets for the perfumes division. Advertising and promotional expenses rose to 55.3 million Euro (+3.9% compared to 53.2 million Euro in the first half 2006) and were 11.3% of turnover compared to 11.9% in the first half 2006.
Operating profit was 61.7 million Euro (+17.0% compared to 52.7 million Euro in the same period of 2006) moving, in terms of impact on net revenues, from 11.8% in the first half 2006 to 12.6% in the first half 2007.
Net profit, finally, includes the positive results of hedging transactions and reached the absolute value of 58.4 million Euro (+31.5% compared to 44.4 million Euro posted last year) with a 12.0% percentage ratio on turnover (9.9% in 2006).
Balance Sheet highlights
Financial net debt of the Group as of 30.06.2007 was 154.8 million Euro compared to 115.5 million Euro as of 30.06.2006 and to 46.9 million Euro as of 31.12.2006. The increase of the debt in the first six months of 2007, compared to the end of 2006, was due to: the May dividend distribution of 86.9 million Euro, the advance purchase of precious raw materials to seize interesting opportunities, and to the physiological stock increase in anticipation of the second part of the year when sales historically reach the highest levels. Inventory, in fact, increased by 15.3% corresponding to 81.2 million Euro compared to December 2006 (from 528.9 million Euro to 610.1 million Euro). Compared to June 2006, inventory registered a 60 million Euro increase (+10.9%), of which almost the half is attributed to the already mentioned purchase of precious stones and other raw materials.
In the first six months of the year investments in tangible and intangible assets were 31.5 million Euro, and registered an increase compared to 25.6 million Euro in the same period of last year in line with the expected higher investments for the whole year.
As of June 30th 2007 the total number of Bulgari Group stores was 232 of which 136 were directly owned stores.
The Board of Directors also approved the financial statements of the parent company attached to the consolidated financial statements which highlighted a net profit of 9.9 million Euro (17.9 million Euro in the first half 2006), including dividends from subsidiary companies for 9.1 million Euro. The parent companys total revenues in the first half 2007, consisting almost entirely of royalties incomes from the Bulgari brand, amounted to 39.8 million Euro, with a 33% increase compared to 29.9 million Euro of last year.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented: I am very satisfied with the excellent results of the first half of the year and with the positive sales trend registered in the months of July and August which together with the investments the Company is making all over the world - make me confident in a brilliant second part of the year. Therefore I think that in absence of extraordinary events and in presence of a good sales performance in the year-end holiday season - in 2007 it is reasonable to expect for Bulgari a double-digit growth for revenues at comparable exchange rates and net profits in the higher portion of the range already given as a guidance to the market.
Bulgari is one of the global players on the luxury market. In 2006 the Group posted a turnover of 1,010.4 million Euro. With a market capitalization of about 3,013 million Euro (as of 12.09.2007), Bulgari relies on a stores network 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.
BULGARI GROUP PROFIT&LOSS FIRST HALF
| EUR M. | H1 2007 | H1 2006 | DELTA H1 06/H1 05 |
|---|---|---|---|
| REVENUES | 487.8 | 447.8 | 8.9% |
| EBIT | 61.7 | 52.7 | 17.0% |
| EBIT ON SALE | 12.6% | 11.8% | - |
| NET PROFIT | 58.4 | 44.4 | 31.5% |
| NET PROFIT ON SALE | 12.0% | 9.9% | - |
BULGARI GROUP PROFIT&LOSS 2 QUARTER
| EUR M. | Q2 2007 | Q2 2006 | DELTA Q2 07/Q2 06 |
|---|---|---|---|
| REVENUES | 262.6 | 243.9 | 7.7% |
| EBIT | 35.4 | 30.9 | 14.6% |
| EBIT ON SALE | 13.5% | 12.7% | |
| NET PROFIT | 34.4 | 26.2 | 31.5% |
| NET PROFIT ON SALE | 13.1% | 10.7% |
BULGARI GROUP REVENUES BY PRODUCT CATEGORY- H1 2007
| REVENUES BY PRODUCT CATEGORY |
H1 2007 | H1 07/ H1 06 | H1 06/ H1 05 | |||
|---|---|---|---|---|---|---|
| EUR M. | % ON REVENUES |
% REPORTED |
% COMP. FX |
% REPORTED | % COMP. FX | |
| Jewels | 206.5 | 42.3% | 14.9% | 20.8% | 9.9% | 9.9% |
| Watches | 132.4 | 27.2% | 3.3% | 10.2% | 18.5% | 17.9% |
| Accessories | 40.6 | 8.3% | -14.6% | -8.2% | 31.2% | 32.3% |
| Other (incl. FR royalties) | 3.6 | 0.8% | 11.1% | - | 14.7% | - |
| JWA Division | 383.1 | 78.6% | 6.8% | 13.0% | 15.4% | 15.2% |
| PARFUM Division | 92.3 | 18.9% | 17.2% | 21.6% | 11.8% | 11.9% |
| OTHER | 12.4 | 2.5% | 20.6% | - | 30.7% | - |
| TOTALE | 487.8 | 100% | 8.9% | 14.8% | 15.1% | 15.0% |
BULGARI GROUP REVENUES BY GEO AREA H1 2007
| REVENUES BY GEOGRAPHICAL AREA |
H1 2007 | H1 07/ H1 06 | H1 06/ H1 05 | |||
|---|---|---|---|---|---|---|
| EUR M. | % ON REVENUES | % REPORTED | % COMP. FX | % REPORTED | % COMP. FX | |
| EUROPE | 181.9 | 37.3% | 10.9% | - | 16.2% | - |
| Of which Italy | 64.1 | 13.2% | 15.7% | - | 7.4% | - |
| AMERICAS | 82.9 | 17.0% | 18.8% | 26.6% | 14.0% | 10.6% |
| ASIA | 193.3 | 39.6% | 3.7% | 13.3% | 13.6% | 14.4% |
| Of which Japan | 101.0 | 20.7% | -18.4% | -9.0% | 26.7% | 30.9% |
| Of which rest of Asia | 92.3 | 18.9% | 47.1% | 55.0% | -5.6% | -8.3% |
| MIDDLE EAST/OTHER | 29.7 | 6.1% | 7.8% | - | 21.3% | - |
| TOTAL | 487.8 | 100.0% | 8.9% | 14.8% | 15.1% | 15.0% |
Source: Bulgari S.p.A. Not audited preliminary results.
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 |