| PRESS RELEASE |
| Paris, April 25, 2012 |
First-quarter 2012 revenue
In the first quarter of 2012, PPR posted €3.3 billion in revenue from continuing operations, up 7.9% on a comparable basis(1) and 15.4% on a reported basis versus first quarter 2011. This strong start to the year was powered by the fast-paced growth of the Group's businesses in emerging countries which now represent around 37% of revenue for the Luxury and Sport & Lifestyle divisions.
Revenue for the Luxury Division surged 29.1% on a reported basis, with double-digit growth in all geographic areas. The Sport & Lifestyle Division also continued to advance, reporting a 14.6% increase in revenue on a reported basis. Overall, sales for the Luxury and Sport & Lifestyle businesses climbed 23.2% on a reported basis and 11.6% in comparable terms.
François-Henri Pinault, Chairman and Chief Executive Officer, commented: "PPR delivered a highly satisfactory performance overall in the first quarter of 2012. Our Luxury brands once again reported strong growth in all geographic areas, while our Sport & Lifestyle brands continued to move ahead. I would also like to highlight Fnac's significant market share gains. These performances bear witness to the Group's momentum, its successful multi-brand strategy, the remarkable geographic spread of its businesses and the strength of its business model. This reinforces our confidence in PPR's ability to deliver another year of brisk revenue growth, combined with gains in operating and financial performance, in 2012."
(in € million)
| Luxury Division |
| 1,458 |
| +29.1% |
| +17.8% |
| Sport & Lifestyle Division |
| +14.6% |
| +2.8% |
| Fnac |
| 916 |
| -0.7% |
| -0.8% |
Eliminations and other
PPR - Continuing operations
Constant Group structure and exchange rates.
In the first quarter of 2012, the Luxury Division reported stellar performances with revenue jumping 29% in reported terms and 18% on a comparable basis.
Double-digit growth across all geographic regions was powered by 20% sales growth in emerging countries, which now represent nearly 40% of the Luxury Division's sales.
Fashion and Leather Goods sales advanced 18% in the first three months of the year.
As of end-March 2012, the store network of the Luxury Division comprised 863 units.
Gucci had a good start to the year, with sales up 12% in comparable terms and 16% on a reported basis. Directly-operated stores once again improved their contribution to revenue, advancing 13% in the quarter, and now accounting for three-fourths of Gucci's total sales. Online sales surged 30%, continuing to increase as a proportion of total revenue.
All geographicareas reported growth, with Western Europe and North America up 10% and 9%, respectively, demonstrating the brand's unrivalled appeal in mature markets. Japan confirmed its recovery with a 16% jump in sales, while emerging markets continued to grow at a consistent pace, particularly Greater China which was up 15%.
All product categories achieved major gains during the first quarter of the year, including growth of over 20% in Timepieces. Sales of men's ready-to-wear and of the Children's collection also expanded significantly.
In March 2012, Gucci unveiled its new "Forever Now" advertising campaign starring Charlotte Casiraghi as the brand ambassador. It was very well received and attracted significant media attention, as did the recently presented Autumn/Winter 2012-2013 collections.
As of end-March 2012, the Gucci network comprised 390 stores, including 149 in emerging markets.
Bottega Veneta delivered another excellent performance in the first quarter of 2012, with revenue jumping 33% on a comparable basis and 39% in reported terms.
The brand's outstanding performance spanned all geographic areas: Western Europe (up 28%), North America (up 36%), Asia-Pacific (up 45%) and Japan (up 16%). All distribution channels contributed to growth, fuelled by the overwhelming success of the brand's iconic Leather Goods articles and its Cruise and Spring/Summer collections. Online sales more than doubled compared to the first quarter of 2011.
Bottega Veneta's fragrance line, launched in selected markets in the middle of last year, continued to enjoy a positive reception during the first three months of the year, in both directly-owned stores and third-party distributors.
As of end-March 2012, Bottega Veneta operated a network of 171 stores.
Yves Saint Laurent
Yves Saint Laurent put in a bumper performance in first-quarter 2012, with sales soaring 40% on a comparable basis and 43% in reported terms, on the back of the successful Autumn/Winter collections as well as the well-received Cruise and women's Spring/Summer collections.
Business was buoyant across the board with all regions and distribution channels reporting strong growth on a comparable basis: Western Europe (up 34%), North America (up 48%), Japan (up 53%) and Asia-Pacific (up 63%). In addition, royalties rose by around 15% compared to the first quarter of 2011, predominantly from fragrances and beauty.
Growth was sustained across all product categories. Leather Goods did particularly well, leaping on the strength of the new Cabas Chyc as well as carry-over lines such as Muse and Muse 2. Shoes were another stand-out category, with the ongoing success of the Tribute, TribToo and Palais lines.
As of end-March 2012, Yves Saint Laurent had a network of 86 stores.
Other Luxury Brands
In the first quarter, PPR's Other Luxury Brands posted comparable sales growth of 20% (71% in reported terms) with all brands and regions contributing to the performance: Western Europe (up 12%), North America (up 33%), Asia-Pacific (up 30% of which China up 28%) and Japan (up 10%).
Momentum remained especially strong for Fashion and Leather Goods, with growth coming in at more than 30% for the quarter, driven by sparkling performances at both Alexander McQueen and Stella McCartney, together with another strong showing at Balenciaga. Brioni, which was fully consolidated in January, also posted double-digit growth. Boucheron showed further improvement, driven by its retail business.
In the first quarter of the year the Sport & Lifestyle Division posted 15% revenue growth in reported terms and 3% on a comparable basis.
This reflected solid performances in emerging markets and in the Accessories and Apparel categories, which offset Puma's weaker performance in mature markets.
The integration of Volcom continued to progress in a highly satisfactory manner. In first-quarter 2012, Volcom reported a good performance with sales holding firm versus the same prior-year period, on top of a high basis of comparison.
Puma sales for the first quarter of 2012 moved up 6% on a reported basis and 3% in comparable terms.
Performance in mature markets was disappointing, with sales in Western Europe down 4% and North America reporting 4% growth, both regions being held back by sluggish sales in the Footwear category. This trend was offset by brisk demand in Apparel and other key categories, especially golf equipment, clothing and shoes. In addition, Puma achieved solid performances in emerging markets.
Puma's management is currently focusing on adjusting its organisation as well as its Lifestyle and Performance product offering to kick-start growth momentum. This includes capitalising on the promising results of the eagerly-awaited "Archive Bolt Lite" footwear line by expanding its ultralight range. To celebrate the "Year of Speed", Puma will also be launching a new Performance collection of ultralight footwear inspired by Usain Bolt which will encompass all sport categories.
In first-quarter 2012, Fnac saw sales retreat 0.8% on a comparable basis (down 0.7% in reported terms) compared to the same prior-year period, in tough market conditions.
In France, revenues were down just 2.1%, with business levels supported by a 15% advance in online sales and market share gains in technical and editorial products. Despite the tough economic environment, especially in Southern Europe, the international segment moved forward under the impetus of new store openings and a solid performance in technical products. Brazil reported excellent sales with revenue up 9.1% on a comparable basis.
For all geographic areas combined, online sales leapt 18% and represented 12% of Fnac's total sales for the period.
Fnac is continuing to work on its various store formats as well as on developing new product categories and online activities in order to accelerate the return to sustainable growth over the medium term.
Significant events since January 1, 2012
On January 11, 2012, PPR announced that it had completed the acquisition of the entire share capital of Brioni - one of the world's most reputable men's fashion houses - in accordance with the terms announced on November 8, 2011, after having received clearance from the competition authorities.
On January 13, 2012, Fnac announced an €80 million full-year cost-saving plan in an effort to combat the worsening economic environment, and confirmed the implementation of the Fnac 2015 strategic plan.
On March 7, 2012, Yves Saint Laurent and PPR announced the appointment of Hedi Slimane as Creative Director of Yves Saint Laurent. He will assume total creative responsibility for the brand image and all its collections.
On March 21, 2012, PPR announced the decision of its Board of Directors to submit the appointment of Jochen Zeitz as a director for a four-year term to the approval of the Annual General Meeting to be held on April 27, 2012. Until October, Jochen Zeitz will continue in his positions as CEO of the Sport & Lifestyle Division, Chief Sustainability Officer of PPR and Executive Committee member. As from that date, the Sport & Lifestyle Division will report directly to Jean-François Palus, PPR's Managing Director.
On March 23, 2012, Standard & Poor's Rating Services announced that it had raised its long-term rating on PPR to "BBB" from "BBB-" with a stable outlook, given the Group's solid operating performances.
On April 13, 2012, PPR issued a €500 million, 3.125% fixed-rate bond maturing in seven years.
PPR will hold a conference call for analysts and investors at 6:00pm (Continental Europe); 5:00pm (UK); 12:00pm (East Coast, USA), on Wednesday, April 25, 2012.
Conference call dial-in
France +33 (0)1 70 99 42 71
UK +44 (0)20 7784 1036
US +1 212 444 0895
Access code: 9864101
France +33 (0) 1 74 20 28 00
UK +44 (0) 20 7111 1244
US +1 347 366 9565
Replay access code: 9864101 (until May 16, 2012)
The slides (PDF) will be available ahead of the conference call at www.ppr.com
The PPR Group empowers a coherent ensemble of Luxury and Sport & Lifestyle premium brands, specializing in apparel and accessories, to reach their full growth potential. Distributed in more than 120 countries, PPR generated revenues of €12.2 billion in 2011 and had over 47,000 employees at year end. The PPR share is listed on Euronext Paris (FR 0000121485, PRTP.PA, PPFP).
Find out more on Gucci, Bottega Veneta, Yves Saint Laurent, Alexander McQueen, Balenciaga, Brioni, Stella McCartney, Sergio Rossi, Boucheron, Girard-Perregaux, JeanRichard, Puma, Volcom, Cobra, Electric, Tretorn and Fnac at www.ppr.com.
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Appendix : First-quarter 2012 revenue
(en € million)
| Gucci |
| 847.9 |
| 730.8 |
| +16.0% |
| +11.6% |
| Bottega Veneta |
| 218.0 |
| 156.9 |
| +39.0% |
| +33.0% |
| Yves Saint Laurent |
| 108.8 |
| 76.0 |
| +43.2% |
| +40.1% |
| Other brands |
| 283.2 |
| 165.5 |
| +71.0% |
| +20.0% |
Sport & Lifestyle Division
| Puma |
| 820.9 |
| 773.4 |
| +6.1% |
| +3.1% |
| Other brands |
| 65.6 |
| -0.8% |
PPR - Continuing activities
Other discontinued activities
PPR - Discontinued activities
Figures have been restated of Redcats and Fnac Italy (IFRS 5).
Comparable scope and exchange rates.
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Source: PPR via Thomson Reuters ONE