PRESS RELEASE |
FIRST-HALF 2023 RESULTS
Group revenue: €10,135 million,
up 2% as reported and on a comparable basis
Recurring operating income: €2,739 million
Net income attributable to the Group: €1,785 million
"In the first half, we pursued our investments in our Houses’ desirability and exclusivity. While engaging in critical forward-looking initiatives, we maintained a high level of profitability. We also took some decisive steps to expand our footprint in the luxury universe, notably with the acquisition of the famed Creed fragrance house to accelerate the liftoff of
- Group revenue amounted to €10.1 billion in the first half of 2023, an increase of 2% both as reported and on a comparable basis.
- In the second quarter of 2023, sales rose 2% as reported and 3% on a comparable basis.
- Revenue from the directly operated retail network, which includes e-commerce sites, grew 4% on a comparable basis in the second quarter, with good performances in
Asia-Pacific andJapan . Growth inWestern Europe was solid, while sales fell inNorth America .
- Against a background of ongoing investments in the Group’s Houses, recurring operating income amounted to €2.7 billion in the first half. Recurring operating margin was 27.0%.
- Net income attributable to the Group was €1.8 billion in the first half of 2023.
- Free cash flow from operations, excluding real-estate acquisition and disposal, remained high at €2.1 billion during the first half, up 4%.
Operating performance
Revenue (in € millions) | H1 2023 | H1 2022 | Reported change | Comparable change (1) | |
Gucci | 5,128 | 5,173 | -1% | +1% | |
1,576 | 1,481 | +6% | +7% | ||
Bottega Veneta | 833 | 834 | -0% | +2% | |
Other Houses | 1,856 | 1,955 | -5% | -5% | |
869 | 591 | +47% | +16% | ||
Eliminations | (127) | (104) | - | - | |
10,135 | 9,930 | +2% | +2% |
(1) On a comparable scope and exchange rate basis.
Recurring operating income (in € millions) | H1 2023 | H1 2022 | Change | |
Gucci | 1,810 | 1,886 | -4% | |
481 | 438 | +10% | ||
Bottega Veneta | 169 | 168 | +1% | |
Other Houses | 224 | 337 | -34% | |
63 | (7) | - | ||
Eliminations | (8) | (2) | - | |
2,739 | 2,820 | -3% |
Gucci: further investment
Gucci’s first-half 2023 revenue amounted to €5.1 billion (down 1% as reported and up 1% on a comparable basis). Sales in the directly operated retail network grew 1% on a comparable basis. Wholesale revenue dropped 3% on a comparable basis compared to the first half of 2022.
In the second quarter of 2023, Gucci’s revenue rose 1% on a comparable basis. Sales from directly operated stores were also up 1%, driven by strong sales of Gucci’s most exclusive products and by its leather goods, travel, and women’s collections.
Gucci’s recurring operating income totaled €1.8 billion in the first half of 2023. This equates to recurring operating margin of 35.3% and reflects investments made to continue the House’s strategic initiatives.
Yves Saint Laurent’s first-half 2023 revenue amounted to €1.6 billion, up 6% as reported and up 7% on a comparable basis. Sales from the House’s directly operated retail network rose by 11% on a comparable basis, while wholesale revenue was down 10%, in line with the strategy of streamlining this channel.
In the second quarter of 2023, sales rose 7% on a comparable basis, thanks to good performance in the directly operated retail network (up 8%), driven by ready-to-wear and leather goods.
Yves Saint Laurent’s recurring operating income was €481 million in the first half and recurring operating margin was 30.5%.
Bottega Veneta: strengthened exclusivity
Bottega Veneta’s first-half 2023 revenue totaled €833 million, unchanged as reported and up 2% on a comparable basis. Sales from the directly operated retail network were buoyant (up 6% on a comparable basis), while wholesale revenue fell 13% on a comparable basis.
The House’s sales in the second quarter of 2023 rose by 3% on a comparable basis, driven by healthy growth in the directly operated retail network (up 7%).
Bottega Veneta’s recurring operating income in the first half of 2023 totaled €169 million, taking its recurring operating margin to 20.3%.
Other Houses: growth in the directly operated retail network, excellent momentum in Jewelry
Sales by the Group’s Other Houses in the first half of 2023 totaled €1.9 billion (down 5% as reported and on a comparable basis), with a significant improvement between the first and second quarters. There was strong momentum in the directly operated retail network, with sales up 8% on a comparable basis. Wholesale revenue fell 27% as all Houses pursue their strategy of streamlining this channel, and reflecting the mixed American market.
In the second quarter of 2023, revenue from the directly operated retail network rose by 9% on a comparable basis, all Houses contributing to growth. Balenciaga began its recovery, driven in particular by the
Recurring operating income from the Other Houses in the first half of 2023 amounted to €224 million, and recurring operating margin was 12.1%.
Kering Eyewear’s first-half 2023 revenue hit a record €869 million, an increase of 51% as reported thanks to the significant contribution of
In the second quarter, sales growth was once again sustained, with growth of 21% on a comparable basis – driven by the successful development of its brand portfolio – and 58% as reported.
Kering Eyewear’s first-half recurring operating income rose sharply to €186 million.
After taking into account Corporate costs of €123 million during the period, the
Financial performance
Net financial expense totaled €204 million in the first half of 2023.
The effective tax rate on recurring income was 27.1%.
Net profit attributable to the Group was €1.8 billion.
Cash flow and financial position
The Group’s free cash flow from operations totaled €823 million in the first half of 2023. Excluding real estate activities, it was €2.1 billion.
At
Outlook
To achieve its long-term vision,
In an environment of ongoing economic and geopolitical uncertainty in the near term,
***
In its meeting on
WEBCAST
The presentation will be followed by a Q&A session for analysts and investors.
The slides (in PDF format) will be available ahead of the audiocast at https://www.kering.com.
A replay of the webcast will also be available at www.kering.com.
About
A global Luxury group,
Contacts
Press | ||
Emilie Gargatte | +33 (0)1 45 64 61 20 | emilie.gargatte@kering.com |
+33 (0)1 45 64 62 53 | marie.demontreynaud@kering.com | |
Analysts/investors | ||
Claire Roblet | +33 (0)1 45 64 61 49 | claire.roblet@kering.com |
Julien Brosillon | +33 (0)1 45 64 62 30 | julien.brosillon@kering.com |
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APPENDICES EXCERPT FROM THE CONSOLIDATED FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION RELATING TO THE FIRST-HALF 2023 RESULTS SITUATION AS OF | ||||
Contents | page | |||
Announcements since | 8 | |||
Consolidated income statement | 10 | |||
Consolidated statement of comprehensive income | 11 | |||
Consolidated balance sheet | 12 | |||
Consolidated statement of cash flow | 13 | |||
Breakdown of revenue | 14 | |||
Main definitions | 15 | |||
HIGHLIGHTS AND ANNOUNCEMENTS SINCE
Dual-tranche bond issue for a total amount of €1.5 billion
Gucci, supported by
Preliminary investigation by the
APPOINTMENTS AND NEW ROLES SINCE
Appointment of Sabato de Sarno as Gucci’s Creative Director
Appointment of Raffaella Cornaggia as Chief Executive Officer of
Departure of Daniela Riccardi from Kering’s Board of Directors
Appointment of Maureen Chiquet to Kering’s Board of Directors
Francesca Bellettini , President and CEO ofYves Saint Laurent since 2013, in addition to her current role, is appointed Kering Deputy CEO, in charge ofBrand Development .Marco Bizzarri , President and CEO of Gucci since 2015 and a member of Kering’s executive committee since 2012, will leave the company effectiveSeptember 23, 2023 .- Jean-François Palus, currently Kering Group Managing Director, is appointed President and CEO of Gucci for a transitional period.
Jean-Marc Duplaix , Chief Financial Officer since 2012, is appointed Kering Deputy CEO, in charge of Operations and Finance.
CONSOLIDATED INCOME STATEMENT
(in € millions) | First half 2023 | First half 2022 | |
CONTINUING OPERATIONS | |||
Revenue | 10,135 | 9,930 | |
Cost of sales | (2,405) | (2,552) | |
Gross margin | 7,730 | 7,378 | |
Other personnel expenses | (1,505) | (1,376) | |
Other recurring operating income and expenses | (3,486) | (3,182) | |
Recurring operating income | 2,739 | 2,820 | |
Other non-recurring operating income and expenses | - | (13) | |
Operating income | 2,739 | 2,807 | |
Financial result | (204) | (19) | |
Income before tax | 2,535 | 2,788 | |
Income tax expense | (692) | (747) | |
Share in earnings (losses) of equity-accounted companies | 3 | 2 | |
Net income from continuing operations | 1,846 | 2,043 | |
o/w attributable to the Group | 1,785 | 1,987 | |
o/w attributable to minority interests | 61 | 56 | |
DISCONTINUED OPERATIONS | |||
Net income (loss) from discontinued operations | - | 1 | |
o/w attributable to the Group | - | 1 | |
o/w attributable to minority interests | - | - | |
GROUP TOTAL | |||
Net income of consolidated companies | 1,846 | 2,044 | |
o/w attributable to the Group | 1,785 | 1,988 | |
o/w attributable to minority interests | 61 | 56 |
(in € millions) | First half 2023 | First half 2022 | |
Net income attributable to the Group | 1,785 | 1,988 | |
Basic earnings per share (in €) | 14.60 | 16.09 | |
Diluted earnings per share (in €) | 14.59 | 16.08 | |
Net income from continuing operations attributable to the Group | 1,785 | 1,987 | |
Basic earnings per share (in €) | 14.60 | 16.08 | |
Diluted earnings per share (in €) | 14.59 | 16.07 | |
Net income from continuing operations (excluding non‑recurring items) attributable to the Group | 1,789 | 1,977 | |
Basic earnings per share (in €) | 14.63 | 15.99 | |
Diluted earnings per share (in €) | 14.62 | 15.99 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in € millions) | First half 2023 | First half 2022 | |
Net income | 1,846 | 2,044 | |
o/w attributable to the Group | 1,785 | 1,988 | |
o/w attributable to minority interests | 61 | 56 | |
Change in currency translation adjustments relating to consolidated subsidiaries | (95) | 142 | |
change in currency translation adjustments | (95) | 142 | |
amounts transferred to the income statement | - | - | |
Change in foreign currency cash flow hedges | 119 | (84) | |
change in fair value | 204 | (212) | |
amounts transferred to the income statement | (79) | 123 | |
tax effects | (6) | 5 | |
Change in other comprehensive income (loss) of equity‑accounted companies | - | - | |
change in fair value | - | - | |
amounts transferred to the income statement | - | - | |
Gains and losses recognized in equity, to be transferred to the income statement | 24 | 58 | |
Change in provisions for pensions and other post-employment benefits | (2) | 13 | |
change in actuarial gains and losses | (2) | 15 | |
tax effects | - | (2) | |
Change in financial assets measured at fair value | 16 | (207) | |
change in fair value | 22 | (249) | |
tax effects | (6) | 42 | |
Gains and losses recognized in equity, not to be transferred to the income statement | 14 | (194) | |
Total gains and losses recognized in equity | 38 | (136) | |
o/w attributable to the Group | 40 | (160) | |
o/w attributable to minority interests | (2) | 24 | |
COMPREHENSIVE INCOME | 1,884 | 1,908 | |
o/w attributable to the Group | 1,825 | 1,828 | |
o/w attributable to minority interests | 59 | 80 |
CONSOLIDATED BALANCE SHEET
Assets
(in € millions) | Dec. 31, 2022 | ||
3,574 | 4,053 | ||
Brands and other intangible assets | 8,053 | 7,357 | |
Lease right-of-use assets | 4,672 | 4,929 | |
Property, plant and equipment | 5,125 | 3,388 | |
Investments in equity-accounted companies | 51 | 49 | |
Non-current financial assets | 695 | 855 | |
Deferred tax assets | 1,600 | 1,640 | |
Other non-current assets | 8 | 8 | |
Non-current assets | 23,778 | 22,279 | |
Inventories | 4,569 | 4,465 | |
Trade receivables and accrued income | 1,204 | 1,180 | |
Current tax receivables | 491 | 378 | |
Current financial assets | 262 | 167 | |
Other current assets | 1,340 | 1,136 | |
Cash and cash equivalents | 3,328 | 4,336 | |
Current assets | 11,194 | 11,662 | |
Assets held for sale | - | - | |
TOTAL ASSETS | 34,972 | 33,941 |
Equity and liabilities
(in € millions) | Dec. 31, 2022 | ||
Equity attributable to the Group | 14,572 | 13,998 | |
Equity attributable to minority interests | 800 | 785 | |
Equity | 15,372 | 14,783 | |
Non-current borrowings | 5,441 | 4,347 | |
Non-current lease liabilities | 4,219 | 4,420 | |
Non-current financial liabilities | 3 | - | |
Non-current provisions for pensions and other post-employment benefits | 71 | 66 | |
Non-current provisions | 18 | 19 | |
Deferred tax liabilities | 1,746 | 1,572 | |
Other non-current liabilities | 442 | 228 | |
Non-current liabilities | 11,940 | 10,652 | |
Current borrowings | 1,741 | 2,295 | |
Current lease liabilities | 832 | 812 | |
Current financial liabilities | 83 | 663 | |
Trade payables and accrued expenses | 2,327 | 2,263 | |
Current provisions for pensions and other post-employment benefits | 12 | 12 | |
Current provisions | 134 | 168 | |
Current tax liabilities | 940 | 567 | |
Other current liabilities | 1,591 | 1,726 | |
Current liabilities | 7,660 | 8,506 | |
Liabilities associated with assets held for sale | - | - | |
TOTAL EQUITY AND LIABILITIES | 34,972 | 33,941 |
CONSOLIDATED STATEMENT OF CASH FLOWS
(in € millions) | First half 2023 | First half 2022 | |
Net income from continuing operations | 1,846 | 2,043 | |
Net recurring charges to depreciation, amortization and provisions on non-current operating assets | 878 | 797 | |
Other non-cash (income) expenses | (139) | (264) | |
Cash flow received from operating activities | 2,585 | 2,576 | |
Interest paid (received) | 173 | 127 | |
Dividends received | (7) | (4) | |
Current tax expense | 684 | 804 | |
Cash flow received from operating activities before tax, dividends and interest | 3,435 | 3,503 | |
Change in working capital requirement | (419) | (476) | |
Income tax paid | (419) | (617) | |
Net cash received from operating activities | 2,597 | 2,410 | |
Acquisitions of property, plant and equipment and intangible assets | (1,891) | (361) | |
Disposals of property, plant and equipment and intangible assets | 117 | - | |
Acquisitions of subsidiaries and associates, net of cash acquired | (55) | (11) | |
Disposals of subsidiaries and associates, net of cash transferred | - | - | |
Acquisitions of other financial assets | (24) | (119) | |
Disposals of other financial assets | 96 | 3 | |
Interest and dividends received | 14 | 6 | |
Net cash received from (used in) investing activities | (1,743) | (482) | |
Dividends paid to shareholders of | (1,712) | (1,483) | |
Dividends paid to minority interests in consolidated subsidiaries | (12) | (22) | |
Transactions with minority interests | (26) | (22) | |
(Acquisitions) disposals of | (7) | (648) | |
Issuance of bonds and bank debt | 1,508 | 1,708 | |
Redemption of bonds and bank debt | (658) | (348) | |
Issuance (redemption) of other borrowings | (408) | 223 | |
Repayment of lease liabilities | (419) | (395) | |
Interest paid and equivalent | (178) | (128) | |
Net cash received from (used in) financing activities | (1,912) | (1,115) | |
Net cash received from (used in) discontinued operations | - | (8) | |
Impact of exchange rates on cash and cash equivalents | 14 | (11) | |
Net increase (decrease) in cash and cash equivalents | (1,044) | 794 | |
Cash and cash equivalents at opening | 4,094 | 4,516 | |
Cash and cash equivalents at closing | 3,050 | 5,310 |
REVENUE FOR THE FIRST AND SECOND QUARTERS
(in € millions) | H1 2023 | H1 2022 | Reported change | Comparable change (1) | Q2 2023 | Q2 2022 | Reported change | Comparable change (1) | Q1 2023 | Q1 2022 | Reported change | Comparable change (1) | |
Gucci | 5,128 | 5,173 | -1% | +1% | 2,512 | 2,582 | -3% | +1% | 2,616 | 2,591 | +1% | +1% | |
1,576 | 1,481 | +6% | +7% | 770 | 742 | +4% | +7% | 806 | 739 | +9% | +8% | ||
Bottega Veneta | 833 | 834 | -0% | +2% | 438 | 438 | +0% | +3% | 395 | 396 | -0% | +0% | |
Other Houses | 1,856 | 1,955 | -5% | -5% | 966 | 982 | -2% | -1% | 890 | 973 | -9% | -9% | |
869 | 591 | +47% | +16% | 436 | 283 | +54% | +21% | 433 | 308 | +41% | +11% | ||
Eliminations | (127) | (104) | - | - | (64) | (53) | - | - | (63) | (51) | - | - | |
10,135 | 9,930 | +2% | +2% | 5,058 | 4,974 | +2% | +3% | 5,077 | 4,956 | +2% | +1% |
(1) Change on a comparable scope and exchange rate basis.
MAIN DEFINITIONS
“Reported” and “comparable” growth
The Group’s “reported” growth corresponds to the change in reported revenue between two periods.
The Group measures "comparable" growth (also referred to as “organic” growth) in its business by comparing revenue between two periods at constant scope and exchange rates. Changes in scope are dealt with as follows for the periods concerned:
• the portion of revenue relating to acquired entities is excluded from the current period;
• the portion relating to entities divested or in the process of being divested is excluded from the previous period.
Currency effects are calculated by applying the average exchange rates for the current period to amounts in the previous period.
Recurring operating income
The Group’s operating income includes all revenues and expenses directly related to its activities, whether these revenues and expenses are recurring or arise from nonrecurring decisions or transactions.
Other non-recurring operating income and expenses consist of items that, by their nature, amount or frequency, could distort the assessment of the Group’s operating performance as reflected in its recurring operating income. They include changes in scope, the impairment of goodwill and brands and, where material, of property, plant and equipment and intangible assets, capital gains and losses on disposals of non-current assets, restructuring costs and disputes.
“Recurring operating income” is therefore an alternative performance indicator for the Group, defined as the difference between operating income and other non-recurring operating income and expenses. This indicator is intended to facilitate the understanding of the operating performance of the Group and its Houses and can therefore be used as a way to estimate recurring performance. It is presented in a manner that is consistent and stable over the long term in order to ensure the continuity and relevance of financial information.
EBITDA
The Group uses EBITDA as an alternative performance indicator to monitor its operating performance. This financial indicator corresponds to recurring operating income plus net charges to depreciation, amortization and provisions on non-current operating assets recognized in recurring operating income.
Free cash flow from operations, available cash flow from operations and available cash flow
The Group uses an intermediate line item, “Free cash flow from operations”, to monitor its financial performance. This financial indicator measures net operating cash flow less net operating investments (defined as acquisitions and disposals of property, plant and equipment and intangible assets).
The Group has also defined a new indicator, “Available cash flow from operations”, in order to take into account capitalized fixed lease payments (repayments of principal and interest) pursuant to IFRS 16, and thereby reflect all of its operating cash flows.
"Available cash flow" therefore corresponds to available cash flow from operations plus interest and dividends received, less interest paid and equivalent (excluding leases).
Net debt
Net debt is one of the Group’s main financial indicators, and is defined as borrowings less cash and cash equivalents. Lease liabilities are not included in the calculation of this indicator. Borrowings include put options granted to minority interests.
The cost of net debt corresponds to all financial income and expenses associated with these items, including the impact of derivative instruments used to hedge the fair value of borrowings.
Effective tax rate on recurring income
The effective tax rate on recurring income corresponds to the effective tax rate excluding tax effects relating to other non-recurring operating income and expenses.
Attachment
- Press release - Résultats Semestriels 2023 27 07 23
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