2011 nine months results
TRANSCRIPT
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9M 2011
Results
November 14th
, 2011
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us nessAnalysis
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3
M
9M 2011 Highlights
Ordinary
Revenues Operating Profit
Broad negative impact
from raw material.
1,498 1,481 Performance reported:-1.1%.
SG&A reduction;
lower one-time costs
compared with last year.
9M 10 9M 1110
11 10 11
9M 9M
Performance currency
neutral: -0.5%
Positive impact from
currency (~ 13 mln).
Net Income Net Debt
Negative impact from
currency hedging:
-11 mln in 9M 11 vs. Net Debt increase.
85 749
60 486645
+ m n as year.
Lower tax-rate:
34% in 9M 11 vs.
Cash Flow absorption:
rise in NWC &
9M 10 9M 119M 10 9M 11FY
2010
41% n 9 10
the network.
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Revenues4
M
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% -0.3%
- Direct Sales 333 24% 312 23% -6.3% -5.1%
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Geographical Revenues5
RoW1% (1%)
Asia16% (16%)
Americas4% (4%)
Overall Performance -1.1%
. .
-0.5%
Macro-Areas
Europe
Asia
Italy
-1.4%
+0.6%
-1.6%
+4.3%
Europe
79% (79%)Note: ( ) 9M 10 data
Americas +0.2% +5.4%
Europe
The Mediterranean
-
Asia
India: rising revenues (+12%), driven by 3rd quarter
. .
Greece: double digit fall (-19%), confirming previous
negative trend.
Iberian Peninsula: negative performance in Portugal- - rd
.
South Korea: double digit growth (+10%).
Ex-USSR Asian Countries: meaningful progress (+26%).
Greater China: positive LFL results and improvement of- -
quarter.
Other European Countries
Outstanding performance (+28%) in Russia and ex-
.
Decreasing results in Japan and South East Asia.
Americas
.
Europe: growth in Germany, Switzerland and U.K.
or mer ca: revenues ec ne - .
Mexico: major double digit growth (+26%).
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6Geographical Revenues
Developingand Fast
GrowthCountries
26% (24%)
ra onaWestern
Economies
74% (76%)Note: ( ) 9M 10 data
Milan, Corso Vittorio Emanuele
Reported C.N.
-4% -4%Traditional
+8% +11%
es ern conom es
Developing and
Milan, Piazza San Babila
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7Highlights Asia
India
22%
Others
10%
Japan
11%
ex URSS-Asia
3%
Greater
China9%
South Korea
29%
Turkey
16%
New Delhi, South Extension
Highlights
Turkey
A/W 11 collections: positive sell-out, driven by offer
focused on lighter weights.
n a
Performance increase: remarkable sales growth of
higher product range, with positive mix impact.
Dedicated collection, starting from A/W 11 season,
includes best-seller items.
Positive LFL performance in 3rd quarter: results
improved against the first part of the year.
Entry-price point categories show positive trend.
Market opportunity, with meaningful potential: new
Sisley store openings by partners.
Kids proposal: accelerating sales, supported by offer
strengthening.
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8Highlights Americas & Europe
mer cas
Mexico
25%
Others
27%
Russia &
ex-USSR EuropeOthers
36%
USA &
Canada
48%
Italy
57%
Revenues: 54 mln Revenues: 1,180 mln
Mexico Russia & ex-USSR Europe
Outstanding sell-out results for A/W 11: traffic store
increase and average consumer spending up.
Successful price positioning strategies, differentiated
b roduct ran e.
Kids commercial proposal & product line
reinforcement: high potential segments targeted
through an increasing offer of dedicated products.
LFL Performance : double digit growth (+15%).
USA
Italy
Performance in 3rd quarter affected by deliveries in 2nd
underperforming stores.
,
requests.
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9Apparel Revenues
Collections Trend
Positive
Performance
A/W 11 improvement in performance trend (+2%), showing an
Flat
~ (4%)
~ (2%)
~ .
Positive impact of in-season product initiatives, adopted in S/S 11
and re-proposed in A/W 11.
A/W 10 S/S 11 A/W 11
Negative r vers
Recent collections trend confirmed: resilient volumes
performance and improvement of price/mix.
Apparel Revenues by channel
M
Wholesale
Results in line with previous year (-0.3% currency neutral),
supported by favourable collections trend.
333
1,418 1,388
D.O.S.- 6.3%
- 2.1%
312Directly Operated Sales
-
1,085 1,076 Wholesale
- 0.8%
. ,
negative impact of network refocusing activities;DOS transfer in India to third parties management;
negative LFL (-3%); third quarter results (-3%) in line with 1st
9M 10 9M 11
a 2011, negat ve y a ecte y poor sa es n eptem er.
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Brands & Collections10
Sisley 16% (16%)UCB 51% (52%)
UCB Kids& Sisle Youn
Playlife 2% (2%)Kids 31% (30%)
Note: ( ) 9M 10 data
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Brands: United Colors of Benetton11
UCB & Brand Values UCB & New Media UCB & Product
Lana Sutra Pro ect
Dialogue with the world of art,combining traditional and new
values of Benetton.
New actions on social media:introduction of Benetton iPhone
App, dedicated to UCB world.
On-going roll-out of mini-
collections proposals: new
innovative total look
Art pieces, conceived as a
homage to love, emphasizing two
ke elements of brand DNA: wool
Benetton.com launch, webportal & platform, crossing a
new digital creativity border,
deliveries for A/W 11.
Product innovation and
research: new exclusive
threads and bright colours.
Itinerant installations in various
featuring web 2.0 and social
networking.
knitwear technology Pin Up.
.
coming soon, the launch of new institutional worldwide communication campaign.
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12Brands: New Store Concept Introduction
UCB & Store concept Playlife & Store ConceptSisley & Store Concept
Opening of the renovated Innovative shopping experienceFlagship Vittorio Emanueleags p store n an a a
(Milan), launching the new
Sisley concept.
ay e: new concep s ore
opened in Treviso.
an : ntro uct on o new
Lissoni store concept, proposing
a different display approach.
New lay-out: clarity of productpresentation, enhancing
collections and suggesting new
looks.
Multi-brand store, emphasizing
the different labels in the
Playlife world (Playlife, Jeans
West, Anthology of Cotton,
On-going roll-out of Lissoni
concept, adopted from 2H 10 and
now present in more than 30
countries.
Killer Loop), and introducing
complementary accessories.
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Analysis
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Profit & Loss14
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 139 91 -35.2%
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%
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Gross Profit Analysis15
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
696
(7)
(60) +10 +6
645
Gross Profit Commercial Industrial FX Impact Textile Gross Profit
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Ebit Analysis16
M
One-off Ordinary Ebit Reported EBIT % on revenues
119 6
9M 11
141
115
9.4%
7.8%(4)
+ +
EBIT9M 10
ApparelSGA
NonRecurring
EBIT9M 11
GrossProfit
SellingCosts
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Financial Cost & Net Income Analysis17
Financial ex ensesM
Tax Rate
(15)(14)
41%
34%
9M 10
9M 11
9M 10 9M 11
Currency hedging
+13
Minority Interests
(3)9M 10
0
9M 10 9M 11
(11)
9M 10 9M 11 Ch % 9M 10 9M 11 Ch %
P.B.T. 139 91 -35.2%
% on Revenues 9.3% 6.1%
Net Income 85 60 -29.8%
% on Revenues 5.7% 4.1%
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a ance ee& Cash Flow
Anal sis
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Net Capital Employed19
M
12.31.2010 09.30.2011 Ch
Working Capital 622 889 267
Asset to be sold 10 1 -9
Tang. and Intang. fixed assets 1,314 1,306 -8
Financial fixed assets 25 21 -4
Other assets/(liabilities) 13 15 2
et ap ta mp oye 1,984 2,232 248
financed by
Net Indebtedness 486 749 263
Net Capital Employed Analysis
o a are o ers qu y , , -
(12) (7)
1,984
+2,232
(*) T.I.F.: Tangible, Intangible and Financial Fixed Assets
Net Capital
Employed 12.31.10
Ch. in Working
Capital
Ch. in T.I.F.*
Fixed Assets
Ch. in Other
Liabilities
Net Capital
Employed 09.30.11
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Working Capital20
M
09.30.2010 09.30.2011 Ch
Working Capital 786 889 103
Net trade receivables 879 950 71
Inventories 291 348 57
(Trade payables) -371 -391 -20
Other credits/(debts) -13 -18 -5
Working Capital Analysis
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Net Debt21
M
2009689
763
678
589749
2010
2011508
645
486486
534
543
InitialNet Debt
Q1 H1 9M Year EndNet Debt
Net Debt & Cash Flow generation
Free cash absorption in the first nine months of the year, due NWC increase, share buy-back programmeand continued investments.
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Cash Flow22
M
Net cash flow from operating activities Net cash flow from Investment activities
+78
(101) (82)
9M 10 9M 11 9M 10 9M 11
(131)
DividendsTreasury Shares
(41)(46)
(18)
9M 10 9M 119M 10 9M 11
0
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Net Investments23
M
Net Investments+ 101 + 82
Real Estate
Commercial5
38 13
40
Commercial Operations
Production+ 10
+ 17
+ 14
+ 14
Others
Disinvestments(8) (12)
Other changes(9) +13
9M 10 9M 11
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nnex
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Breakdown by segment25
M
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 %
evenues .
EBIT -5 8 n.s
% -3.3% 5.3%
EBITDA 1 14 n.s
% 1.0% 8.7%
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Consolidated Balance Sheet & Working Capital26
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 b
Net Indebtedness 486 749 263 645Total Shareholders' Equity 1,498 1,483 -15 1,495
12.31.2010 09.30.2011 Ch 09.30.2010
Net trade receivables 804 950 146 879
Inventories 293 348 55 291
Trade a ables -442 -391 51 -371
Other credits/(debts) -33 -18 15 -13
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Net Book Value of Land & Building27
M
Land and Building 09.30.2010 09.30.2011 Ch
Commercial 645 647 2
Other 19 19 0
Total 764 775 11
Commercial 09.30.2010 09.30.2011 Ch
Italy 164 168 4
-
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 -5USA 15 15 0
India 10 9 -1
Kosovo 4 4 0
Switzerland 2 2 0
Total 645 647 2
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Statement of Consolidated Cash Flow28
M
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
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29Credit Facilities available as of September 30th, 2011
Term loansTerm loans
400 m (2007-2012)
3 Term loans
Current Position
Fully drawn
100 m BNL
150 m Unicredit
150 m Intesa S. Paolo
Cost: Euribor 1/2/3/6 months +20/50 bp*
H1 11
EBITDA /
Net Fin. Exp.min 4 11.6 x
ovenan
250 m (2010-2015)
Club Deal
Current Position
Fully drawn
50 m BNL
50 m Credit Agricole
N.D /
EBITDAmax 3.5 1.8 x
.
del Veneto
50 m Mediobanca
50 m UnicreditCost: Euribor 1/2/3/6 months + 150/250 bp*
5.000Jpy m (20112014)
Term loan
Current Position
Fully drawn5.000Jpy m
Development
Cost: Libor Jpy 6 months + 65 bp
** Covenants calculated every six months* Depending on the ratio N.D./EBITDA
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30Credit Facilities available as of September 30th, 2011
60 m 2009-2014 Current Position
Revolving Credit FacilitiesRevolving Credit Facilities
60 m
Committed credit facility Drawn for 40 m Banca Pop. Vicenza
Cost: Euribor 1/2/3/6 months +150/250 bp*H1 11
EBITDA /Net Fin. Ex .
min 4 11.6 x
Covenant**
150 m (2010-2015)
Committed credit facility
Current Position
Not drawn
30 m BNL
30 m Credit Agricole
30 m Unicredit
N.D /
EBITDAmax 3.5 1.8 x
.
del Veneto
30 m MediobancaCost: Euribor 1/2/3/6 months + 150/250 bp*
Uncommitted Credit FacilitiesUncommitted Credit Facilities
446 m
Uncommitted credit facilities
Current Position
Drawn for 83 m
Cost: Interbank or rime rate + s read
** Covenants calculated every six months* Depending on the ratio N.D./EBITDA
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31Disclaimer
This presentation contains forward looking statements which reflect Managements current views and
estimates. The forward looking statements involve certain risks and uncertainties that could cause actual
results to differ materially from those contained in the forward looking statements. Potential risks and
uncertainties include such factors as general economic conditions, foreign exchange fluctuations,
competitive product and pricing pressures and regulatory developments.