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8/3/2019 Presentazione F&LI
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Fashion & Luxury Insight
FY 2010 Results
October 17, 2011
Armando Branchini - Paola Varacca CapelloG. Brandazza, E. Merlotti, B. Rovetta
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Companies in the sample (67) have been
identified according to four criteria:
1. Listed in a financial market and owners of
internationally renowned brands,
2. Consolidated sales higher than € 200 million,
SAMPLE AND METHODOLOGY
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3. Full financial and economic results available to the public,
4. Must operate in one or more of the following
businesses: Active, Apparel, Beauty,Department Store, Eyewear , Jewellery &
Watches, Fashion Retail, Leather Goods.
SAMPLE AND METHODOLOGY
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AGENDA
1. Performance (FY2010) - Total sample
2. Top performers
3. Performance by cluster
4. Highlights on selected clusters
5. A snapshot of S1 2011 (sub-sample analysis)
6. Key Findings
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KEY FINDINGS: GROWTH AND PROFITABILITY
Return to a positive trend in SALES (up to 10.9%)
Improvement in Assets Profitability (ROI up to 12.4%)
Significant improvement inROE (up to 16.5%)
Increase of EBITDA and EBIT Margin (up to 13.6% and 10.0%)
1. Performance - Total sample
(FY2010)
x
x
x
x
x
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KEY FINDINGS: FINANCIALS
NET CASH FLOW back to 2008 level (down to 8.1%)
Stable WORKING CAPITAL to SALES (down to 18.2%)
Strong growth inCORE INVESTMENT on DEPRECIATION (from 83.0% to 105.2%)
1. Performance - Total sample
(FY2010)
x
x
x
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INVESTMENTS TAKE OFF
1. Performance - Total sample
(FY2010)
Strong turn up of
Core (tangibleand intangibleassets) and TotalInvestments
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FEW RETAIL OPENINGS
Limited number of new stores (1,304: +2%)
Few new stores generate just limited additional sales
1. Performance - Total sample
(FY2010)
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RETAIL EXPOSURE BOOSTS SALES GROWTH
CAGR sales by channel
shows:
Retail sales confirm alimited but positive
growth in 2009;
registers a remarkable
growth in 2010
Wholesale sales
underperform in both
years
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1. Performance - Total sample
(FY2010)
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SIZE EFFECT STILL ON
Profitability (ROI and EBIT Margin) and cash flow performance are stronglycorrelated to company size
Growth rate becomes significantly positive in all segments, in particular in theMedium one (sales > 1 €B and < 5 €B)
Small companies show a bigger volatility in results
1. Performance - Total sample
(FY2010)
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TOP PERFORMERS:WHO?*
*Phillips Van Heusen has beenremoved as an outlier. It achieved
an increase in sales of 104% thanks
to the acquisition of Tommy Hilfiger
2. Top performers
(FY2010)
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2. Top performers
(FY2010)
Double digi t growth in sales
ROI high and stable Leather Goods are the most represented cluster
High End players back in the hit list
TOP PERFORMERS:WHO?
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BACK TO GROWTH!
All clusters show a substantial growth in sales
Apparel, Leather Goods and Jewels & Watches perform
significantly over the average
3. Performance by cluster
(FY2010)
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AND BACK TOMARGINS!
Growth of ROI in allclusters
Leather Goods stillbestperformingcluster
EBITMargin isthe keydriver for ROI
3. Performance by cluster
(FY2010)
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APPAREL: SUMMARY OF PERFORMANCE
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4. Highlights on selected
clusters – Apparel
Better EBITDA in line withSales Growth performance
A boom in Investments
An increase in Working Capital
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LEATHER GOODS: SUMMARY OF PERFORMANCE
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4. Highlights on selected
clusters – Leather Goods
The best performing cluster
Better EBITDA in line with strong Sales Growth
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APPAREL: RETAIL EXPOSURE DOES NOT GRANT HIGHER PROFIT
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4. Highlights on selected
clusters – Apparel
Great variety in distribution structure
Great dispersion in results
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LEATHER GOODS:RETAIL ORIENTED COMPANIES PERFORM BETTER
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4. Highlights on selected
clusters – Leather Goods
Higher profitabili ty due to higher margins
Better sales growth Wholesale oriented companies invest in new stores
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APPAREL: PERFORMANCES IN DIFFERENT SEGMENTS
4. Highlights on selected
clusters – Apparel
Strong improvement in sales growth for all segments
After a bad 2009, High End companies are again the leaders in profitability
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LEATHER GOODS: PERFORMANCES IN DIFFERENT SEGMENTS
4. Highlights on selected
clusters – Leather Goods
High end andMedium companies are back to good results after 2009
High end companies show lower Asset turnover
Mass market lags behind in profitability
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FASHION RETAILERS: SUMMARY OF PERFORMANCE
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4. Highlights on selected
clusters – Fashion Retailers
Negative trend since FY 2006 until 2009
Working capital slightly improving
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FASHION RETAILERS: TURNAROUND IN PERFORMANCE
4. Highlights on selected
clusters – Fashion Retailers
Strongimprovement inROI, from 9.8% to13.5%
Back to Sales growth
Growth drivesimprovement in EBIT
Focus on WC allows
improvement inWC/Sales
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S1 2011 PERFORMANCE: IMPROVING SCENARIO?
Positive trend of
Sales growth
Slight worsening in
Profitability Strong cut of
Investments
5. A snapshot of S1 2011
(48 players)
All clusters 1S2011
12,1%11,5%
8,3% 7,8%
5,6%
3,2%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
9,0%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
1S2010 1S2011
EBITDA margin EBIT margin Investment to sales
G Sales*
All clusters
1S2010 8.9%
FY2010 9.5%
1S2011 12.4%
* In CAGR 2010 Salvatore Ferragamo is missing
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S1 2010 PERFORMANCE: APPAREL
5. A snapshot of S1 2011
Apparel(7 players*)
G Sales
Apparel
1S2010 5.4%
FY2010 9.1%
1S2011 14.7%
Apparel 1S2011
6,6%6,9%
3,1%
3,8%
4,3%
3,9%
3,7%
3,8%
3,9%
4,0%
4,1%
4,2%
4,3%
4,4%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
1S2010 1S2011
EBITDA margin EBIT margin Investment to sales
*In the main sample Apparel companies are 11
Positive trend in
Sales growth
Slight increase in
Profitability Strong cut of
Investments
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S1 2011 PERFORMANCE: LEATHER GOODS
5. A snapshot of S1 2011
Leather Goods(11 players*)
Starting drop of
Sales growth
Sensible decrease in
Profitability
Significant increase
on Investment * In the main sample Leather Goods companies are 13
Leather Goods 1S2011
14,3%
11,2%11,2%
8,5%
4,7%
8,1%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
9,0%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
1S2010 1S2011
EBITDA margin EBIT margin Investment to sales
G Sales
Leather G.
1S2010 13.0%
FY2010 16.7%
1S2011 14.2%
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S1 2011 PERFORMANCE: FASHION RETAILERS
5. A snapshot of S1 2011
Fashion Retailers(14 players*)
Positive trend of
Sales growth
Slight worsening in
Profitability Strong cut of
Investments*In the main sample Fashion Retailers companies are 17
Fashion Retail 1S2011
12,6%
11,7%
7,9%
6,9%
3,9%
-3,0%
-4,0%
-3,0%
-2,0%
-1,0%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
1S2010 1S2011
EBITDA margin EBIT margin Investment to sales
G Sales
Fashion R.
1S2010 5.8%
FY2010 3.9%
1S2011 6.7%
6 K Fi di
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KEY FINDINGS - 1
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The Industry experienced a new phase of growth in FY2010.
Sales grew 10.9% on average in our sample, with 56 companies out of 67 showing an increase in revenues.
Sales growth was especially strong for Apparel (17.7%), Jewels &
Watches (18.9%) and Leather Goods (16.7%), while Fashion Retail(3.9%) and Financial Conglomerates (3.7%) had the lowest growth rates.
6. Key Findings
6 K Fi di
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KEY FINDINGS - 2
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The Average ROI was 12.4%, up from 8.3% in FY2009.
Companies achieved such a result by combining sales growth and a reduction of
operating costs, as shown by EBITDA margin, which reached 13.6% in 2010 vs
11.1% in the previous year.Working capital was also kept under control (18.2% on sales in FY2010, vs. 18.6%
in FY2009)
The ROI of Beauty (13.2%), Fashion Retail (13.5%), Jewels and Watches
(12.6%), and Leather Goods (17.7%) was above average; the worst economicperformance was obtained by Active (5.1%) and Eyewear (6.7%).
As a whole, Leather goods sector emerges as the best performer of FY2010,
excelling both in sales growth and in profitability.
6. Key Findings
6 K Fi di
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KEY FINDINGS - 3
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Company size was crucial in explaining different level of
profitability.
The largest companies (sales above 5 billion €) outperformed the
rest of the sample in terms of ROI (15.6% vs 13.6% for companies
with sales between 1 and 5 billion € and 8.0% for companies with
sales lower than 1 billion €) and EBIT margin (13.3% vs 11.7% and
5.0%), even though the largest companies lagged behind medium
companies in terms of sales growth (9.9% vs 15.0% for companies
with sales between 1 and 5 billion €)
6. Key Findings
6 K Fi di
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KEY FINDINGS - 4
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Rates of investment went significantly up, reaching 6.1% in sales (thesame rate as in FY2007, the year before the crisis).Net cash flows were consequently impacted (8.1% on sales, down from
11.5% in FY2009
Retail presence remains a strong determinant of profi tabili ty in the Apparel and Leather Good businesses.Companies that focused on directly owned stores (Retail sales above 50%
of total sales) registered a 22.1% average ROI in Apparel and a 22.0% inLeather Goods, while companies focused on the wholesale channelachieved only a 13.8% ROI in Apparel and a 15.15 in Leather Goods.The growth of sales for the two groups were different (17.3% and 11.3% inApparel and 21.7% and 13.7% in Leather Goods.
6. Key Findings
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