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Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
Benetton Group - 2011 Nine Months Results
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Benetton Group - 2011 Nine Months Results

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November 14th, 2011

November 14th, 2011

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  • 1. 9M 2011ResultsNovember 14th, 2011
  • 2. BusinessB iAnalysis
  • 3. 9M 2011 Highlights 3 €MRevenues Operating Profit Broad negative impact Ordinary from raw material. Ebit Ebit SG&A reduction;1,498 1,481 Performance reported: lower one-time costs -1.1%. compared with last year. 159 119 141 115 Performance currency Positive impact from neutral: -0.5% currency (~ 13€ mln). 9M 9M 9M 10 9M 11 10 11 10 11Net Income Net Debt Negative impact from currency hedging: -11€ mln in 9M 11 vs. Net Debt increase. +13€ mln last year year. 85 60 645 486 749 Lower tax-rate: Cash Flow absorption: 34% in 9M 11 vs. rise in NWC & 41% i 9M 10 in investments dedicated to 9M 10 FY 9M 11 the network. 9M 10 9M 11 2010
  • 4. Revenues 4 €M 9M 10 9M 11 Ch % Ch % CN Revenues 1,498 1,481 -1.1% -0.5% Textile 80 93 16.2% 16.3% Apparel 1,418 1,388 -2.1% -1.4% Apparel Segment - Wholesale 1,085 76% 1,076 77% -0.8% 0.8% -0.3% 0.3% - Direct Sales 333 24% 312 23% -6.3% -5.1%
  • 5. Geographical Revenues 5 Reported C.N. CN Asia Americas RoW 16% (16%) 4% (4%) 1% (1%) Overall Performance -1.1% -0.5% Italy Macro-Areas Europe -1.4% -1.6% Asia +0.6% +4.3% Americas +0.2% +5.4% Europe 79% (79%) Note: ( ) 9M 10 dataEurope AsiaThe Mediterranean India: rising revenues (+12%), driven by 3rd quarterItaly: revenues decline (-2 7%) ( 2.7%). performance. performanceGreece: double digit fall (-19%), confirming previous South Korea: double digit growth (+10%).negative trend. Ex-USSR Asian Countries: meaningful progress (+26%).Iberian Peninsula: negative performance in Portugal Greater China: positive LFL results and improvement of(-10%) and Spain (-2%); Trend worsening in the 3rd negative trend trend.quarter. Decreasing results in Japan and South East Asia.Other European CountriesOutstanding performance (+28%) in Russia and ex- AmericasUSSR European Countries (+16%) Continental (+16%). North America: revenues d li ( 9%) N th A i decline (-9%).Europe: growth in Germany, Switzerland and U.K. Mexico: major double digit growth (+26%).
  • 6. Geographical Revenues 6 Developing and Fast Growth Countries 26% (24%)Traditional WesternEconomies 74% (76%) Note: ( ) 9M 10 data Milan, Corso Vittorio Emanuele Reported C.N.Traditional -4% -4%Western EW t Economies iDeveloping and +8% +11%Fast Growth Countries Milan, Piazza San Babila
  • 7. Highlights – Asia 7 ex URSS-Asia Others 3% 10% Japan India 11% 22% Greater China 9% Turkey South Korea 16% 29% Revenues: 238€ mln New Delhi, South Extension Highlights India I di Turkey Performance increase: remarkable sales’ growth of A/W 11 collections: positive sell-out, driven by offer higher product range, with positive mix impact. focused on lighter weights. Entry-price point categories show positive trend. Dedicated collection, starting from A/W 11 season, Market opportunity, with meaningful potential: new includes best-seller items. Sisley store openings by partners. Positive LFL performance in 3rd quarter: results Kids proposal: accelerating sales, supported by offer improved against the first part of the year. strengthening.
  • 8. Highlights – Americas & Europe 8Americas Europe Others Mexico Others Russia & 27% 25% 36% ex-USSR Europe 7% USA & Italy Canada 57%Revenues: 54€ mln 48% Revenues: 1,180€ mlnMexico Russia & ex-USSR EuropeOutstanding sell-out results for A/W 11: traffic store Kids commercial proposal & product lineincrease and average consumer spending up. reinforcement: high potential segments targetedSuccessful price positioning strategies, differentiated through an increasing offer of dedicated products.by product range.LFL Performance : double digit growth (+15%). ItalyUSA Performance in 3rd quarter affected by deliveries in 2ndNetwork refocusing approach: closure of quarter, quarter in order to optimize response to commercialunderperforming stores. requests.
  • 9. Apparel Revenues 9Collections Trend PerformancePositive A/W 11 – improvement in performance trend (+2%), showing an ~ +2% increase in order collection compared with previous trend trend.Flat Positive impact of in-season product initiatives, adopted in S/S 11 ~ (2%) and re-proposed in A/W 11. ~ (4%)NegativeN i Drivers Di A/W 10 S/S 11 A/W 11 Recent collections trend confirmed: resilient volumes performance and improvement of price/mix. Apparel Revenues by channel Wholesale Results in line with previous year (-0.3% currency neutral),€M supported by favourable collections trend. 1,418 1,388 - 2.1% 333 312 D.O.S. Directly Operated Sales - 6.3% Negative performance (-5 1% currency neutral) affected by: ( 5.1% neutral), negative impact of network refocusing activities; 1,085 1,076 Wholesale DOS transfer in India to third parties management; - 0.8% negative LFL (-3%); third quarter results (-3%) in line with 1st half 2011, h lf 2011 negatively affected b poor sales i S t b ti l ff t d by l in September. 9M 10 9M 11
  • 10. Brands & Collections 10 UCB 51% (52%) Sisley 16% (16%) UCB Kids & Sisley Young Kids 31% (30%) Playlife 2% (2%) Note: ( ) 9M 10 data
  • 11. Brands: United Colors of Benetton 11UCB & Brand Values UCB & New Media UCB & ProductLana Sutra Project a a Sut a oject Dialogue with the world of art, New actions on social media: On-going roll-out of mini- combining traditional and new introduction of Benetton iPhone collections proposals: new values of Benetton. App, dedicated to UCB world. innovative total look deliveries for A/W 11. Art pieces, conceived as a Benetton.com launch, web homage to love, emphasizing two portal & platform, crossing a Product innovation and key elements of brand DNA: wool y new digital creativity border, research: new exclusive threads and bright colours. featuring web 2.0 and social knitwear technology “Pin Up”. networking. Itinerant installations in various stores throughout the world. … coming soon, the launch of new institutional worldwide communication campaign.
  • 12. Brands: New Store Concept Introduction 12UCB & Store concept Sisley & Store Concept Playlife & Store Concept Flagship Vittorio Emanuele Opening of the renovated Innovative shopping experience (Milan): i t d ti (Mil ) introduction of new f flagship store i S fl hi t in San B bil Babila Playlife: new concept store Pl lif t t “Lissoni” store concept, proposing (Milan), launching the new opened in Treviso. a different display approach. Sisley concept. On-going roll-out of “Lissoni” New lay-out: clarity of product Multi-brand store, emphasizing concept, adopted from 2H 10 and presentation, enhancing the different labels in the now present in more than 30 collections and suggesting new Playlife world (Playlife, Jean’s countries. looks. West, Anthology of Cotton, Killer Loop), and introducing complementary accessories.
  • 13. P&LAnalysis
  • 14. Profit & Loss 14 €M 9M 10 9M 11 Ch % Revenues 1,498 1,481 -1.1% Gross Profit 696 645 -7.3% % 46.5% 43.5% Contribution Margin 583 530 -9.0% % 38.9% 35.8% SGA -424 -411 -2.9% Ordinary EBIT 159 119 -25.2% % 10.6% 8.1% Non recurring items -18 -4 EBIT 141 115 -18.4% % 9.4% 7.8% Profit Before Taxation P fi B f T i 139 91 -35.2% 3 2% Net income 85 60 -29.8% % 5.7% 4.1% Ordinary EBITDA 235 195 -17.2% % 15.7% 13.2% EBITDA 224 193 -14.1% % 15.0% 13.0%
  • 15. Gross Profit Analysis 15 €M 9M 10 9M 11 Ch % Ch % CN Gross Profit 696 645 -7.3% -8.7% % on Revenues 46.5% 43.5% -300 bp -390 bp Apparel (7) (60) +10 +6 696 645 Gross Profit Commercial Industrial FX Impact Textile Gross Profit 9M 10 Side Side 9M 11
  • 16. Ebit Analysis 16 €M One-off Ordinary Ebit Reported EBIT % on revenues9M 10 (18) 159 141 9.4%9M 11 (4) 119 6 115 7.8% 141 (51) (2) +13 +14 115 EBIT Gross Selling Apparel Non EBIT 9M 10 Profit Costs SGA Recurring 9M 11
  • 17. Financial Cost & Net Income Analysis 17 €MFinancial expenses p (15) (14) Tax Rate 9M 10 41% 9M 11 34% 9M 10 9M 11Currency hedging +13 Minority Interests 9M 10 (3) 9M 11 (0) (11) 9M 10 9M 11 9M 10 9M 11 Ch % 9M 10 9M 11 Ch %P.B.T. 139 91 -35.2% Net Income 85 60 -29.8%% on Revenues 9.3% 6.1% % on Revenues 5.7% 4.1%
  • 18. Balance SheetB l Sh t& Cash FlowAnalysis y
  • 19. Net Capital Employed 19 €M 12.31.2010 09.30.2011 ChWorking Capital 622 889 267Asset to be sold 10 1 -9Tang. and Intang. fixed assets 1,314 1,306 -8Financial fixed assets 25 21 -4Other assets/(liabilities) 13 15 2Net Capital EN t C it l Employed l d 1,984 1 984 2,232 2 232 248financed byNet Indebtedness 486 749 263Total Shareholders Eq it Equity 1,498 1 498 1,483 1 483 -15 15Net Capital Employed Analysis (12) (7) +267 2,232 1,984 Net Capital Ch. in Working Ch. in T.I.F.* Ch. in Other Net Capital Employed 12.31.10 Capital Fixed Assets Liabilities Employed 09.30.11 (*) T.I.F.: Tangible, Intangible and Financial Fixed Assets
  • 20. Working Capital 20 €M 09.30.2010 09.30.2011 ChWorking CapitalW ki C i l 786 86 889 103Net trade receivables 879 950 71Inventories 291 348 57(Trade payables) -371 -391 -20Other credits/(debts) -13 -18 -5Working Capital Analysis
  • 21. Net Debt 21 €M 819 763 689 2009 678 749 589 556 2010 556 543 645 2011 534 486 486 508 Initial Q1 H1 9M Year End Net Debt Net DebtNet Debt & Cash Flow generation Free cash absorption in the first nine months of the year, due NWC increase, share buy-back programme and continued investments.
  • 22. Cash Flow 22 €MNet cash flow from operating activities Net cash flow from Investment activities +78 (101) (82) (131) 9M 10 9M 11 9M 10 9M 11Treasury Shares Dividends (46) (41) (18) 0 9M 10 9M 11 9M 10 9M 11
  • 23. Net Investments 23 €M + 101 + 82 Net Investments 38 Real Estate 13 + 91 53 Commercial 40 + 53 Commercial Operations + 10 + 14 Production + 17 + 14 Others (8) Disinvestments (12) (9) +13 Other changes 9M 10 9M 11
  • 24. Annex
  • 25. Breakdown by segment 25 €M Apparel 9M 10 9M 11 Ch % Revenues 1,421 1,390 -2.1% EBIT 146 107 -26.6% % 10.3% 7.7% EBITDA 223 179 -19.7% % 15.7% 12.9% Textile 9M 10 9M 11 Ch % Revenues R 144 159 10.4% 10 4% EBIT -5 8 n.s % -3.3% 5.3% EBITDA 1 14 n.s % 1.0% 8.7%
  • 26. Consolidated Balance Sheet & Working Capital 26 €M 12.31.2010 09.30.2011 Ch 09.30.2010 Working Capital 622 889 267 786 Asset to be sold 10 1 -9 13 Tang. and Intang. fixed assets 1,314 1,306 -8 1,317 Financial fixed assets 25 21 -4 24 Other assets/(liabilities) 13 15 2 0 Net Capital Employed 1,984 2,232 248 2,140 financed by Net Indebtedness 486 749 263 645 Total Shareholders Equity 1,498 1,483 -15 1,495 12.31.2010 09.30.2011 Ch 09.30.2010 Working Capital 622 889 267 786 Net trade receivables 804 950 146 879 Inventories 293 348 55 291 ( (Trade p y payables) ) -442 -391 51 -371 Other credits/(debts) -33 -18 15 -13
  • 27. Net Book Value of Land & Building 27 €M Land and Building 09.30.2010 09.30.2011 Ch Commercial 645 647 2 Industrial 100 109 9 Other 19 19 0 Total 764 775 11 Commercial 09.30.2010 09.30.2011 Ch Italy 164 168 4 Russia Ex Russia-Ex USSR 140 145 5 France 104 104 0 Spain 66 66 0 Japan 40 43 3 Portugal 28 28 0 Belgium 18 17 -1 Turkey 19 15 -4 Austria 15 15 0 Iran 19 14 -5 USA 15 15 0 India 10 9 -1 Kosovo 4 4 0 Switzerland 2 2 0 Mongolia 1 2 1 Total 645 647 2
  • 28. Statement of Consolidated Cash Flow 28 €M 9M 10 9M 11 Cash from operating act. before changes in Working Capital 244 198 Change in Working Capital -146 -275 Interests paid/received - Foreign currency gains/(losses) -2 -26 Payment of taxes -18 -28 Net Cash Flow from operating activities 78 -131 Net Operating Assets -94 -86 Financial Fixed Assets -7 4 Net Cash Flow from investment activities -101 -82 Free Cash Flow -23 -213 Payment of dividends -41 -46 Purchase of treasury shares 0 -18 Surplus/(Deficit) -64 -277
  • 29. Credit Facilities available as of September 30th, 2011 29 Term loans 400€ m (2007-2012) Current Position 100€ m BNL 3 Term loans Fully drawn 150€ m Unicredit 150€ m Intesa S. Paolo Cost: Euribor 1/2/3/6 months +20/50 bp* Covenant** C t** H1 11 250€ m (2010-2015) Current Position 50€ m BNL EBITDA / Club Deal Fully drawn 50€ m Credit Agricole min 4 11.6 x Net Fin. Exp. 50€ m Cassa risp risp. del Veneto 50€ m Mediobanca N.D / max 3.5 1.8 x Cost: Euribor 1/2/3/6 months + 150/250 bp* 50€ m Unicredit EBITDA 5.000Jpy m (2011–2014) Current Position 5.000Jpy m Term loan Fully drawn Development Bank of Japan Cost: Libor Jpy 6 months + 65 bp* Depending on the ratio N.D./EBITDA ** Covenants calculated every six months
  • 30. Credit Facilities available as of September 30th, 2011 30 Revolving Credit Facilities 60€ m (2009-2014) ( ) Current Position 60€ m Covenant** Committed credit facility Drawn for 40€ m Banca Pop. Vicenza H1 11 Cost: Euribor 1/2/3/6 months +150/250 bp* EBITDA / min 4 11.6 x Net Fin. Exp. p 150€ m (2010-2015) Current Position 30€ m BNL N.D / max 3.5 1.8 x Committed credit facility Not drawn 30€ m Credit Agricole EBITDA 30€ m Unicredit 30€ m Cassa Risp Risp. del Veneto Cost: Euribor 1/2/3/6 months + 150/250 bp* 30€ m Mediobanca Uncommitted Credit Facilities 446€ m Current Position Uncommitted credit facilities Drawn for 83€ m Cost: Interbank (or prime) rate + spread ( p ) p* Depending on the ratio N.D./EBITDA ** Covenants calculated every six months
  • 31. Disclaimer 31This presentation contains forward looking statements which reflect Management’s current views andestimates. The forward looking statements involve certain risks and uncertainties that could cause actualresults to differ materially from those contained in the forward looking statements. Potential risks anduncertainties include such factors as general economic conditions, foreign exchange fluctuations,competitive product and pricing pressures and regulatory developments.

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