Press Releases
Bulgari Group: revenues continue to grow in the first half of 2008
 |
Turnover: | 506 million Euro |
| (+8.3% at comparable exchange rates, +4.0% at current exchange rates) | ||
|
Gross margin: | 331 million Euro (+6.5%) |
|
Operating profit: | 51 million Euro (-18.0%) |
|
Net profit: | 54 million Euro (-7.1%) |
Rome, 1 August 2008 – The Board of
Directors of Bulgari S.p.A. today approved the Bulgari Group's
Half-Year Financial Report for the six months ended 30 June 2008,
which highlight a turnover of 506.4 million Euro,
representing an increase of 8.3% at comparable exchange rates
(+4.0% at current exchange rates) over the corresponding period of
2007.
Excluding extraordinary items as specified later in the release,
turnover rose by 12.1%. Operating profit and
net profit fell respectively over the
corresponding period of 2007 by 18.0% (compared to a base of +17.8%
over the first half of 2006) and 7.1% (compared to a base of +31.5%
over the first half of 2006).
All information provided in connection with changes in turnover for the previous year is presented at comparable exchange rates unless otherwise stated.
Revenues by geographical area
The Bulgari Group's sales results for the first half of 2008 were
very satisfactory despite being lower than budget due to an overall
negative macroeconomic situation which in some countries has
affected people's tendency to purchase. Considerable rates of
growth have been achieved in all geographical areas, excluding
Italy where sales fell by 9.3% in the half year (compared to
a base of +15.7% in the first half of 2007), although this was
limited to -4.5% in the second quarter, and the United
States (-4.8% in the half year and -9.5% in the second
quarter), where the comparison should actually be made with +50.2%
in the second quarter of 2007. Performance in the rest of
Europe was in double digits (+16.7% in the half year and +20.4%
in the second quarter), supported by brilliant results in France
and Germany. The Group's performance in Asia was extremely
positive, in line with expectations (+13.1% in the half year and
+14.7% in the second quarter), with growth accelerating in
Japan in the second quarter (+7.4%) and leading to an
overall rise of 4.6% in the half year, while aggressive growth
continued in the rest of Asia (+23.1% in the half year and
compared to a +55.0% in the corresponding period of 2007). Sales in
the Middle East/Other also rose by 11% in the half year (at current
exchange rates).
Revenues by product category
Sales of jewellery reached 212.6 million Euro in the first
half of the year (+7.7%), accelerating during the second quarter
(+10.3%), and despite the extraordinary sale of a piece of high
jewellery in April of last year for 13.5 million US dollars by the
renovated flagship store on Fifth Avenue in New York.
Excluding that sale this category grew by 12.7% in the half year
and by 20.4% in the second quarter.
Sales of watches fell (-1.5% in the half year and -7.9% in
the second quarter). This negative performance is due to production
problems connected with the late delivery of components and the
absence of the entry price line Carbongold whose sale was completed
in 2007.
If those events are excluded the division would have grown by 4.5%
in the half year and 1.2% in the second quarter.
The growth of accessories both continued and accelerated
(+6.8% in the second quarter), leading to a rise of +5.6% in the
half year. The excellent result achieved by the directly owned
stores requires highlighting in particular: +22% in the half
year.
In conclusion the performance of perfumes was outstanding
(+24.2% in the half year and +31.9% in the second quarter), driven
by the excellent results obtained from the launch of AQVA Pour
Homme Marine.
Profit & Loss highlights
Gross margin rose from 310.9 million Euro in the first half
of 2007 to 331.0 million Euro in the first half of 2008, an
increase of 6.5%, also showing a considerable rise as a percentage
ratio on turnover (65.4% in 2008 compared to 63.8% in 2007; +160
basis points). This is an especially positive result considering
the unfavourable trends in exchange rates and the increase in the
prices of raw materials, and was achieved thanks to the positive
effects arising from the increases in sales prices made during the
half year, confirming the enormous strength of the Bulgari brand,
and to the successful measures adopted to increase production and
distribution efficiency. In addition product mix made a positive
contribution, in jewellery in particular. The margin additionally
includes the economic effects of the hedging transactions on gold,
which have been restated also for the prior year for comparison
purposes.
Operating costs, excluding advertising and promotion
expenses, rose from 193.4 million Euro in the first half of
2007 to 217.9 million Euro in the first half of 2008 (+12.7%). This
increase, well within plans, is mostly connected with the Group's
programme for the development of sales activities (flagship stores,
emerging markets and the direct distribution of perfumes) and
production capacity (the verticalisation in the watch segment).
Advertising and promotion expenses also rose to 62.2 million
Euro (+12.4% over those of 55.3 million Euro in the first half of
2007), as the result of planning which concentrates a larger
portion of this spending in the first half of the year.
As a consequence of these increases in costs, operating
profit was 50.9 million Euro in the first half of 2008 (-18.0%)
with respect to 62.1 million Euro in the first half of 2007
(compared to a base of +17.8% over the first half of 2006),
representing 10.1% in terms of percentage ratio on net revenues in
the first half of 2008 compared to 12.7% in the corresponding
period of 2007. This drop is in line with business plans, which
envisage an increase in operating profit starting only in the
fourth quarter of 2008. Once again hedging transactions on exchange
rates made a positive contribution to results, as did a one-off
positive effect on the tax charge in the second quarter arising
from the alignment by the Italian companies of the book and tax
values of their assets.
Net profit as a result closed at 54.2 million euros,
corresponding to 10.7% of turnover, a fall of 7.1% over the
corresponding period of 2007 when it rose by 31.5% over that for
the first half of 2006.
Balance sheet highlights
The Group had net financial indebtedness of 292.2 million
Euro at 30 June 2008 compared to 154.8 million Euro at 30 June 2007
and 140.9 million Euro at 31 December 2007. The following factors
contributed to the increase in debt compared to that at the end of
June 2007 (+137.4 million Euro) and December 2007 (+151.3 million
Euro): the increase in inventory (+115.4 million Euro and +129.4
million Euro respectively), the continuation of the investment
programme during the half year and the dividend distribution (96.1
million Euro in May 2008 compared to 86.9 million Euro the prior
year). Inventory rose by more than turnover in percentage terms as
the result of increased purchases of raw materials (stones and
precious metals), increased stocks of semi-finished goods, in
particular in watches due to the supply difficulties mentioned
earlier and, compared to the end of December 2007, the natural rise
in finished goods stocks to face the second half of the year when
sales traditionally reach their peak.
Investments in tangible and intangible assets during the
first six months of the year amounted to 31.5 million Euro, in line
with those made during the corresponding period of 2007 and
consistent with the budget of total spending in 2008 set at a
significantly lower level than that of 2007.
The Bulgari Group had an overall total of 252 stores at 30 June 2008, of which 155 are directly owned stores.
Francesco Trapani, Chief Executive Officer
of the Bulgari Group, thus commented: "In the half year just
ended which was characterised by a strongly unsettled macroeconomic
environment, Bulgari has once again shown the indisputable strength
of its brand and the power of its creativity in all of its product
categories. In particular I am very delighted with the performance
of jewellery, despite the high comparison base of the prior year,
and that of perfumes; I am also very pleased with the performance
of accessories, the youngest category of our product portfolio,
proving the validity of the investments we have made to create a
dedicated distribution network.
I am also confident that the production difficulties we
encountered in the watch segment will be at least partially
overcome in the second half of the year and that the sales
performance of this category will be positively affected by the new
lines which were a success when presented in Basel, for which
deliveries will begin in the second part of the year.
Despite this, given that difficult macroeconomic conditions in
key markets are continuing, I believe that it is both reasonable
and prudent to restrict the range of the increase in our revenues
(at comparable exchange rates), operating profit and net profit to
the lower band of the guidance already given to the
market."
Bulgari is one of the global players on the luxury market. In 2007 the Group posted a turnover of 1,091.0 million Euro. 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.
For further information
| Media Relations | Relations with analysts/investors |
| 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 |
BULGARI GROUP- P/L H1 2008
| EUR M. | H1 2008 | H1 2007 | H1 08/H1 07 | H1 07/H1 06 |
| REVENUES | 506.4 | 487.0 | 4.0% | 8.9% |
| EBIT | 50.9 | 62.1 | -18.0% | 17.8% |
| EBIT % ON REVENUES | 10.1% | 12.7% | – | – |
| NET PROFIT | 54.2 | 58.4 | -7.1% | 31.5% |
| NET % ON REVENUES | 10.7% | 12.0% | – | – |
BULGARI GROUP- P/L Q2 2008
| EUR M. | Q2 2008 | Q2 2007 | Q2 08/Q2 07 | Q2 07/Q2 06 |
| REVENUES | 274.7 | 262.2 | 4.8% | 7.7% |
| EBIT | 29.0 | 36.2 | -19.8% | 17.3% |
| EBIT % ON REVENUES | 10.6% | 13.8% | – | – |
| NET PROFIT | 31.4 | 34.4 | -8.8% | 31.5% |
| NET % ON REVENUES | 11.4% | 13.1% | – | – |
BULGARI GROUP – REVENUES BY PRODUCT CATEGORY H1 2008
| H1 2008 | H1 08/H1 07 | H1 07/H1 06 | ||||
| REVENUES BY PRODUCT CATEGORY |
EUR M. |
% On Revenues |
% REPORTED |
% COMP. FX |
% REPORTED |
% COMP. FX |
| Jewels | 212.6 | 42.0% | 3.0% | 7.7% | 14.9% | 20.8% |
| Watches | 125.8 | 24.8% | -4.9% | -1.5% | 3.3% | 10.2% |
| Accessories | 41.4 | 8.2% | 1.9% | 5.6% | -14.6% | -8.2% |
| Other (incl. FR royalties) | 3.6 | 0.7% | -3.2% | – | 11.1% | – |
| JWA Division | 383.4 | 75.7% | 0.1% | 4.2% | 6.8% | 13.0% |
| PARFUM Division | 108.3 | 21.4% | 18.3% | 24.2% | 17.3% | 21.7% |
| OTHER | 14.7 | 2.9% | 19.0% | – | 20.6% | – |
| TOTAL | 506.4 | 100% | 4.0% | 8.3% | 8.9% | 14.8% |
BULGARI GROUP – REVENUES BY GEO AREA H1 2008
| H1 2008 | H1 08/H1 07 | H1 07/H1 06 | ||||
| REVENUES BY GEO AREA |
EUR M. |
% On Revenues |
% REPORTED |
% COMP. FX |
% REPORTED |
% COMP. FX |
| EUROPE | 195.6 | 38.6% | 7.5% | – | 10.9% | – |
| of which Italy | 58.2 | 11.5% | -9.3% | – | 15.7% | – |
| AMERICAS | 68.9 | 13.6% | -16.2% | -4.8% | 18.9% | 26.7% |
| ASIA | 209.0 | 41.3% | 8.1% | 13.1% | 3.7% | 13.3% |
| of which Japan | 104.8 | 20.7% | 3.8% | 4.6% | -18.4% | -9.0% |
| of which Rest of Asia | 104.2 | 20.6% | 12.8% | 23.1% | 47.1% | 55.0% |
| MIDDLE EAST/OTHER | 32.9 | 6.5% | 11.0% | – | 7.8% | – |
| TOTAL | 506.4 | 100.0% | 4.0% | 8.3% | 8.9% | 14.8% |
BULGARI GROUP – REVENUES BY PRODUCT CATEGORY Q2 2008
| Q2 2008 | Q2 08/ Q2 07 | Q2 07/ Q2 06 | ||||
| REVENUES BY PRODUCT CATEGORY |
EUR M. |
% On Revenues |
% REPORTED |
% COMP. FX |
% REPORTED |
% COMP. FX |
| Jewels | 118.3 | 43.1% | 5.2% | 10.3% | 12.2% | 18.0% |
| Watches | 65.6 | 23.9% | -11.1% | -7.9% | 5.7% | 12.8% |
| Accessories | 20.0 | 7.3% | 2.1% | 6.8% | -11.6% | -4.6% |
| Other (incl. FR royalties) | 1.8 | 0.6% | -8.4% | – | 11.9% | – |
| JWA Division | 205.7 | 74.9% | -1.0% | 3.3% | 7.2% | 13.4% |
| PARFUM Division | 61.2 | 22.3% | 25.5% | 31.9% | 9.6% | 13.6% |
| OTHER | 7.8 | 2.8% | 39.1% | – | 9.9% | – |
| TOTAL | 274.7 | 100% | 4.8% | 9.4% | 7.7% | 13.5% |
BULGARI GROUP – REVENUES BY GEO AREA Q2 2008
| Q2 2008 | Q2 08/ Q2 07 | Q2 07/ Q2 06 | ||||
| REVENUES BY GEO AREA |
EUR M. |
% On Revenues |
% REPORTED |
% COMP. FX |
% REPORTED |
% COMP. FX |
| EUROPE | 108.9 | 39.6% | 11.7% | – | 6.9% | – |
| of which Italy | 32.6 | 11.9% | -4.5% | – | 10.9% | – |
| AMERICAS | 38.5 | 14.0% | -21.1% | -9.5% | 41.7% | 50.2% |
| ASIA | 109.5 | 39.9% | 9.8% | 14.7% | -3.1% | 6.1% |
| of which Japan | 55.8 | 20.3% | 6.7% | 7.4% | -20.4% | -10.6% |
| of which Rest of Asia | 53.7 | 19.6% | 13.2% | 23.5% | 27.6% | 33.6% |
| MIDDLE EAST/OTHER | 17.8 | 6.5% | 10.6% | – | 7.8% | – |
| TOTAL | 274.7 | 100% | 4.8% | 9.4% | 7.7% | 13.5% |
The audit of the Group’s financial statements is currently being completed and will be finalised within the deadlines set by law and accordingly by 29 August.
The manager in charge of preparing the corporate accounting records, Alberto Nathansohn, declares that pursuant to paragraph 2 of article 154 of the Consolidated Finance Law the accounting information contained in this release corresponds to the books, records and accounting entries.