Press Releases
The Bulgari Group returns to profitability in the third quarter of 2009
- Turnover: 233.2 million Euro (-9% at current exchange rates compared to the third quarter of 2008)
- Gross margin: 63.9% (65.4% in the third quarter of 2008)
- Ebitda before restructuring costs: 39.9 million Euro (42.6 million Euro in the third quarter of 2008)
- Operating profit before restructuring costs: 24.4 million Euro (29.2 million Euro in the third quarter of 2008)
- Net profit: 7 million Euro (23 million Euro in the third quarter of 2008)
Rome, 12 November 2009 – The Board of Directors of Bulgari S.p.A. approved today the interim financial report of the Bulgari Group at 30 September 2009 which recorded in the third quarter a turnover of 233.2 million Euro (-9% at current exchange rates and -14.4% at comparable exchange rates), an operating profit before restructuring costs of 24.4 million Euro and a net profit of 7 million Euro.
It must be noted that sales in directly owned stores recorded a definitely stronger performance than the wholesale channel, and went up 2% at current exchange rates compared to the same period of the previous year. It is important to report that, despite a market that continues to be difficult, the quarter just ended showed a marked improvement compared to the two previous quarters and posted a profit at both the operating and the net levels.
All of the changes reported below which refer to the turnover are stated at comparable exchange rates unless otherwise indicated.
Turnover by product category
As a result of the continuation of the world financial market crisis and its effects on the demand for goods and services, all product categories continued to record a drop in sales during the third quarter though at a significantly more moderate level compared to the previous quarters: jewellery posted a 14% drop; watches 24%; accessories 7% and perfumes 5%.
As previously seen in the first half of the year, de-stocking in the wholesale channel which continued in the third quarter adversely affected sales performance of all product categories to a significant degree. It is noteworthy that the performance in directly owned stores was considerably better across all categories: jewellery curbed its fall to 4%; watches were down by 6% and accessories, which were supported mainly by bags, grew by 11% at the Bulgari stores dedicated to this category. Based on the orders and turnover, it is reasonable to assume that the de-stocking of perfumes is reaching its end.
Turnover by geographical area
In the third quarter Japan posted a drop of 30%, Europe 23% and the United States 20%, while the rest of Asia increased by 16% and the Middle East/Other by 53% (at current exchange rates).
Directly owned stores significantly outperformed wholesale in all geographical areas with several areas like the United States (+14%), China (+68%), South Korea (+45%) and Australia (+82%) performing especially well.
Profit & Loss highlights
The gross margin of the quarter – down from 167.5 million Euro in 2008 to 149 million Euro in 2009 (-11%) - also decreased in terms of impact on revenues (63.9% in the third quarter of 2009 versus 65.4% in the third quarter of 2008)
Total operating costs (before restructuring costs) of the quarter, excluding advertising and promotional activities, posted a 10% drop, down from 112.9 million Euro in the third quarter 2008 to 101.6 million Euro in the third quarter 2009. It should be emphasised that exchange rates being equal, these costs actually posted a steeper, -13.3% drop: this result is to be attributed to the attentive cost control policy initiated last year whose effects, as predicted, will augment during the second half of the year.
Advertising and promotional expenses, dropping sharply compared to the third quarter 2008 (-9.4%), remained stable in terms of percentage on turnover (9.9%).
Ebitda before restructuring costs was 39.9 million Euro, compared to 42.6 million Euro last year.
Operating profit (before restructuring costs) was 24.4 million Euro, compared to 29.2 million Euro last year.
Costs relating to the restructuring process in the third quarter 2009 were equal to 5.8 million Euro, which essentially involved voluntary redundancy schemes and the costs relating to the closure of certain stores.
Lastly, the net result was a profit of 7 million Euro compared to a net result of 23 million Euro in the third quarter of 2008.
Balance sheet highlights
The Group’s net financial indebtedness at 30 September 2009 totalled 328.4 million Euro, down compared to 351.6 million Euro at 30 June 2009 and 330.8 million Euro at 30 September 2008. It is covered 100% by long-term loans and committed lines of credit with expiry dates greater than 24 months. Shareholders’ equity at the end of September 2009 amounted to 782.4 million Euro, up from 748.4 million Euro as at 30 June 2009. The financial position benefited from the cautious inventory control policy and the selective investment strategy.
Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented:
"The sales results of the third quarter reflect the gradual improvement that Bulgari is achieving on all world markets, a general trend that is continuing in the current quarter and which we hope will continue in the months to come. However, the Group will continue to focus strongly on efficiency, i.e., the reduction of costs, investments and inventory and I am very satisfied with the initial results which exceeded expectations, thus contributing to making the company even more robust. At the same time, management is working hard to provide an even more competitive offer and stimulate demand further. To this end, I am pleased to announce that a series of important and particularly innovative projects in terms of strategic approach, product, communication and customer service will start from the first months of 2010."
Bulgari is one of the global players on the luxury market. In 2008 the Group posted a turnover of 1,075.4 million Euro. Bulgari relies on a stores network in the most exclusive shopping areas in the world and on selected distributors. As of 30.09.2009 the number of the Bulgari stores in the world was 273 of which 169 as directly owned stores. 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
| EUR M. | 9M 2009 | 9M 2008 |
| REVENUES | 629.5 | 762.5 |
| EBITDA before Rest & Other | 39.8 | 118.9 |
| EBITDA | 35.6 | 118.9 |
| EBIT before Rest & Other | (7.3) | 80.1 |
| EBIT | (13.4) | 80.1 |
| EBIT % ON REVENUES | -2.1% | 10.5% |
| NET PROFIT | (33.5) | 77.2 |
| NET % ON REVENUES | -5.3% | 10.1% |
BULGARI GROUP
| EUR M. | Q3 2009 | Q3 2008 |
| REVENUES | 233.2 | 256.2 |
| EBITDA before Rest & Other | 39.9 | 42.6 |
| EBITDA | 35.9 | 42.6 |
| EBIT before Rest&Other | 24.4 | 29.2 |
| EBIT | 18.6 | 29.2 |
| EBIT % ON REVENUES | 8.0% | 11.4% |
| NET PROFIT | 7.0 | 23.0 |
| NET % ON REVENUES | 3.0% | 9.0% |
BULGARI GROUP-REVENUES BY PRODUCT CATEGORY 9M 2009
| 9M 09 | 9M 09/9M 08 | 9M 08/9M 07 | ||||
| REVENUES BY PRODUCT CATEGORY | EUR M. | % On Revenues | % REPORTED | % COMP. FX | % REPORTED | % COMP. FX |
| Jewelry | 272.5 | 43.3% | -14.6% | -20.5% | 2.3% | 6.5% |
| Watches | 143.5 | 22.8% | -25.1% | -32.4% | -5.8% | -3.0% |
| Perfume & Cosmetics | 148.0 | 23.5% | -12.4% | -17.8% | 15.8% | 20.8% |
| Accessories | 45.4 | 7.2% | -20.9% | -31.7% | -4.1% | 1.6% |
| Hotel | 11.2 | 1.8% | -17.7% | - | 39.7% | - |
| Royalties & Other | 8.9 | 1.4% | -25.3% | - | -14.2% | - |
| TOTAL | 629.5 | 100% | -17.4% | -24.0% | 2.4% | 6.1% |
BULGARI GROUP-REVENUES BY GEO AREA 9M 2009
| 9M 09 | 9M 09/9M 08 | 9M 08/ 9M 07 | ||||
| REVENUES BY GEO AREA | EUR M. | % On Revenues | % REPORTED | % COMP. FX | % REPORTED | % COMP. FX |
| EUROPE | 230.8 | 36.7% | -23.5% | - | 6.4% | - |
| of which Italy | 74.0 | 11.7% | -15.6% | - | -8.0% | - |
| AMERICAS | 71.2 | 11.3% | -32.1% | -39.1% | -15.7% | -6.0% |
| ASIA | 275.7 | 43.8% | -11.5% | -24.0% | 5.4% | 9.1% |
| of which Japan | 125.8 | 20.0% | -21.4% | -36.7% | 1.7% | 2.0% |
| of which Rest of Asia | 149.9 | 23.8% | -1.0% | -8.6% | 9.6% | 17.8% |
| MIDDLE EAST/OTHER | 51.8 | 8.2% | 16.6% | - | 8.3% | - |
| TOTAL | 629.5 | 100% | -17.4% | -24.0% | 2.4% | 6.1% |
Source: Bulgari S.p.A. Unaudited results
BULGARI GROUP-REVENUES BY PRODUCT CATEGORY Q3 2009
| Q3 09 | Q3 09/ Q3 08 | Q3 08/ Q3 07 | ||||
| REVENUES BY PRODUCT CATEGORY | EUR M. | % On Revenues | %REPORTED | % COMP. FX | % REPORTED | % COMP. FX |
| Jewelry | 96.0 | 41.2% | -9.7% | -14.1% | 1.0% | 4.2% |
| Watches | 54.3 | 23.3% | -17.7% | -24.2% | -7.4% | -5.7% |
| Perfume & Cosmetics | 60.0 | 25.7% | -0.8% | -5.3% | 11.4% | 14.9% |
| Accessories | 16.6 | 7.1% | 2.9% | -7.3% | -16.7% | -16.2% |
| Hotel | 3.3 | 1.4% | -19.2% | - | 24.4% | - |
| Royalties & Other | 3.0 | 1.3% | -8.4% | - | -20.5% | - |
| TOTAL | 233.2 | 100% | -9.0% | -14.4% | -0.5% | 2.0% |
BULGARI GROUP-REVENUES BY GEO AREA Q3 2009
| Q3 09 | Q3 09/ Q3 08 | Q3 08/ Q3 07 | ||||
| REVENUES BY GEO AREA | EUR M. | % On Revenues | % REPORTED | % COMP. FX | % REPORTED | % COMP. FX |
| EUROPE | 82.2 | 35.2% | -22.7% | - | 4.5% | - |
| of which Italy | 25.2 | 10.8% | -14.4% | - | -5.1% | - |
| AMERICAS | 30.7 | 13.2% | -14.8% | -20.0% | -14.7% | -8.1% |
| ASIA | 102.7 | 44.1% | 0.4% | -10.7% | 0.2% | 1.7% |
| of which Japan | 46.0 | 19.8% | -16.4% | -30.2% | -2.2% | -2.6% |
| of which Rest of Asia | 56.7 | 24.3% | 20.0% | 15.5% | 3.1% | 7.3% |
| MIDDLE EAST/OTHER | 17.6 | 7.5% | 52.7% | - | 1.3% | - |
| TOTAL | 233.2 | 100% | -9.0% | -14.4% | -0.5% | 2.0% |
Source: Bulgari S.p.A. Unaudited results
The manager in charge of preparing the corporate accounting records, Flavia Spena, 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.
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 |