Sharp Acceleration in Growth in the Second
Half
Record-High Recurring Operating
Income
Consolidated revenue: €12,385 million,
up 6.9% as reported, 8.1% on a comparable basis
Luxury activities: up 7.7% as reported, 7.8% on
a comparable basis
Sport & Lifestyle activities: up 5.5% as
reported, 9.0% on a comparable basis
Recurring operating income: €1,886 million,
up 14.5%
Net income, Group share: €814 million.
Recommended dividend of €4.60 per share
Regulatory News:
Kering: (Paris:KER)
"In a sector undergoing far-reaching transformation, our
foresight and the quality of execution of our strategy enabled us
to outperform our peers and deliver outstanding operating and
financial performances. Rewarding our vision of luxury, grounded in
powerful creative content and long-lasting stylistic codes, we
continue to gain market share, as witnessed by the spectacular
performances of Gucci and Yves Saint Laurent last year. In
2017, in an uncertain macroeconomic and geopolitical environment,
we will keep concentrating on the organic growth of our Houses and
on value creation, so as to intensify our current momentum."
François-Henri Pinault, Chairman and Chief Executive
Officer
Strongest year-on-year revenue increase since 2012, driven by
organic growth
- Growth accelerated sharply in the
second half, coming in at 10.5% on a comparable basis and
continuing the strong momentum that started in the first six
months, which saw a 5.5% comparable increase.
Significant market out-performance for Luxury
activities
- Yves Saint Laurent and Gucci posted
exceptional comparable growth (25.5% and 12.7%, respectively).
- Excellent fourth quarter, with revenue
up 11.3% comparable (Gucci up 21.4%).
Robust 10.4% comparable growth at Puma
Excellent operating and financial performances
- Recurring operating income jumped
14.5%, reaching a record high of €1,886 million.
- Free cash flow from operations nearly
doubled during the year, amounting to €1,189 million.
- Net income, Group share advanced 16.9%
to €814 million. Net income from continuing operations (excluding
non-recurring items) came to €1,282 million.
- Net debt down to 1.9x 2016 EBITDA.
- Recommended dividend of €4.60 per share
(15% year-on-year increase).
Key financial indicators
(in € millions)
2016 2015
Change(1)
Revenue 12,384.9 11,584.2
+6.9%
Recurring operating income
1,886.2
1,646.7
+14.5%
As a % of revenue 15.2% 14.2% +1.0 pt
Recurring operating income – Luxury
activities
1,936.0 1,708.0 +13.3%
Recurring operating income – Sport &
Lifestyle activities
123.2 94.8 +30.0%
Net income, Group share
813.5 696.0 +16.9% Recurring net
income, Group share(2) 1,281.9
1,017.3 +26.0%
(1) As reported.(2) Recurring net income, Group share: net
income from continuing operations, Group share, excluding
non-recurring items.
Consolidated revenue amounted to €12,385 million in 2016,
up 6.9% as reported and 8.1% on 2015 based on a comparable Group
structure and exchange rates, reflecting the priority given to
organic growth.
Western Europe and the Asia-Pacific region (excluding Japan)
posted double-digit revenue increases on a comparable basis,
whereas growth was more moderate in North America and even
lacklustre and Japan. Revenue generated outside the eurozone
accounted for 78% of the consolidated total in 2016.
The Group's gross margin for 2016 totalled €7,790
million, up 10.1% on the previous year as reported.
At €1,886 million, recurring operating income reached a
record high and was up 14.5% on 2015 as reported. Consolidated
recurring operating margin advanced 1 percentage point to
15.2%.
Consolidated EBITDA rose 12.7% to €2,318 million while
the EBITDA margin widened by 0.9 of a percentage point to
18.7%.
Net income, Group share climbed 16.9% to €814 million.
Net income from continuing operations (excluding non-recurring
items) came in at €1,282 million.
Earnings per share amounted to €6.46 in 2016 versus €5.52
for the previous year. Earnings per share from continuing
operations totalled €6.55 in 2016, compared with €5.20 for
2015.
Operating performances by activity
LUXURY ACTIVITIES: SIGNIFICANT MARKET OUTPERFORMANCE
Revenue
(in € millions)
2016
2015
Reportedchange
Comparablechange(1)
Luxury
activities 8,469.4 7,865.3 +7.7%
+7.8% Gucci 4,378.3 3,898.0 +12.3% +12.7% Bottega Veneta
1,173.4 1,285.8 -8.7% -9.4% Yves Saint Laurent 1,220.2 973.6 +25.3%
+25.5% Other Luxury brands 1,697.5 1,707.9 -0.6%
-0.3%
(1) On a comparable Group structure and exchange rate basis.
Recurring operating income(in €
millions)
2016
2015
Change €m
Change %(1)
Luxury activities 1,936.0 1,708.0
+228.0 +13.3% Gucci 1,256.3 1,032.3
+224.0 +21.7% Bottega Veneta 297.4 374.5 -77.1 -20.6% Yves Saint
Laurent 268.5 168.5 +100.0 +59.3% Other Luxury brands 113.8
132.7 -18.9 -14.2%
(1) As reported.
Overall revenue generated by Luxury activities totalled
€8,469 million in 2016, up 7.7% as reported or 7.8% on a comparable
basis.
Growth accelerated significantly in the second half of the year,
reaching 11.3%, with the increases evenly balanced between the
third and fourth quarters.
The year-on-year revenue rise posted by Luxury activities was
driven by a 10.3% increase in sales in directly operated
stores, with Asia-Pacific and Western Europe turning in the
best performances (up 13.6% and 13.0% respectively). Online
sales were also a significant growth driver, advancing by more than
20% year on year. Altogether, sales generated in directly
operated stores and online represented 72.3% of the Luxury
activities' total revenue for 2016, compared with 70.6% in 2015.
Leather Goods, Ready-to-Wear and Shoes all registered solid revenue
increases.
Recurring operating income for Luxury activities advanced
sharply by 13.3% to €1,936 million.
Gucci – Sector-leading performances
The success of Gucci's recent reinvention is showing results,
and in 2016 the brand was one of the sector’s leading performers,
with revenue up 12.3% as reported and 12.7% year on year on a
comparable basis.
Sales in directly operated stores rose 14.8% – with all
geographic regions except Japan notching up growth of around, or
higher than, 10% – driven by demand for Alessandro Michele's
creative vision. Online sales jumped 19,0%, and wholesale sales
were up 5.7% year on year.
The growth trajectory experienced by Gucci in the third quarter
of 2016 continued into the fourth quarter, with revenue rising by a
sharp 21.4%. This excellent momentum was particularly apparent in
directly operated stores where sales climbed 28.2% in the fourth
quarter, with all regions delivering good showings. All of the
brand's main product categories helped to propel the faster pace of
revenue growth, especially handbags (both permanent and new lines)
and Shoes and Ready-to-Wear (women's and men's collections),
despite Gucci’s decision to terminate markdowns in stores.
In 2016, all signals – both qualitative and
quantitative – confirmed the brand's spectacular growth
trajectory, which is being driven by Alessandro Michele's highly
creative vision.
Bottega Veneta – Transition underway to consolidate the
brand's future development
With revenue declining 8.7% as reported or 9.4% on a comparable
basis in 2016, Bottega Veneta's sales were weighed down once again
by low tourist numbers, a phenomenon to which the brand is
particularly exposed. Sales in directly operated stores rose in
Mainland China and South Korea but the shift in demand to the
Asia-Pacific region did not fully offset the lower amount of
purchases made by Chinese tourists. The slowdown in sales in
directly operated stores was particularly marked in Western Europe,
although there was an improvement in the last quarter of the year.
Wholesale sales also retreated year on year, as the brand took
measures to strengthen its exclusive positioning. During 2016,
Bottega Veneta continued to develop its Shoes category, which
registered very robust sales growth and accounted for 7.1% of the
brand's total sales.
Revenue began to trend upwards slightly in the fourth quarter,
with a less marked decline for sales in directly operated stores
(particularly in Western Europe) as tourist numbers started to pick
up towards the end of the year and domestic sales recovered
well.
Bottega Veneta's identity is based on its strong values of
discreet luxury and undisputed quality. Its capital is intact and
it still has exceptional potential. Going forward, it intends to
pursue its strategy of re-energising the brand, especially in terms
of improving its visibility in order to foster loyalty amongst
existing customers and attract new ones.
Yves Saint Laurent – Exceptional results
With annual revenue up by a very strong 25.3% as reported, or
25.5% on a comparable basis, in 2016, Yves Saint Laurent
registered comparable growth of over 20% for the sixth year in a
row.
Sales in directly operated stores advanced by a remarkable 32.4%
year on year, with all geographic regions and product categories
reporting double-digit growth. This excellent momentum was led by
the success of both the brand's new lines and its permanent
collections. Leather Goods once again proved extremely popular.
Yves Saint Laurent's recurring operating income surged by 60% in
2016, which drove its recurring operating margin over the 20%
mark.
Sales growth continued in the fourth quarter of 2016 with
revenue rising 20.5% year on year. Directly operated stores turned
in a spectacular performance during the period, with sales up 32.6%
overall, fuelled by growth in Western Europe, Asia-Pacific and
North America, which posted increases of 42.7%, 37.8% and 30.3%,
respectively.
Other Luxury brands – Stable performances for the year as a
whole
Total revenue generated by Other Luxury brands in 2016
amounted to €1,698 million, down just 0.6% on the previous year as
reported. On a comparable basis, however, revenue inched back
0.3%.
The Couture & Leather Goods brands posted
satisfactory revenue growth of 4.2%, with positive momentum from
Balenciaga, Alexander McQueen and Stella McCartney, whose
collections have proven very successful.
The Jewellery brands resisted well during the year, but
sales of Watches continued to be weighed down by the weak
timepieces market.
SPORT & LIFESTYLE ACTIVITIES: PUMA'S GROWTH TRAJECTORY
CONFIRMED
Revenue(in € millions)
2016
2015
Reportedchange
Comparablechange(1)
Sport
& Lifestyle activities 3,883.7 3,682.5
+5.5% +9.0% Puma 3,642.2 3,403.4 +7.0% +10.4% Other
Sport & Lifestyle brands 241.5 279.1 -13.5%
-8.4%
(1) On a comparable Group structure and exchange rate basis.
Recurring operating income(in €
millions)
2016 2015
Change €m
Change %(1)
Sport & Lifestyle activities 123.2
94.8 +28.4 +30.0% Puma 126.6
92.4 +34.2 +37.0% Other Sport & Lifestyle brands (3.4)
2.4 -5.8 -241.7%
(1) As reported.
Kering's Sport & Lifestyle activities generated revenue
of €3,884 million in 2016, up 5.5% as reported or 9.0% on a
comparable basis.
Puma cemented its successful repositioning and confirmed its
growth trajectory, with sales up 10.4% on a comparable basis.
The significant events of the year for Puma included the Euro 2016
football championship, Usain Bolt making Olympic history in Rio,
and the success of its collections designed with Rihanna. The brand
recorded very good performances across all of its geographic
regions, both for Shoes – its leading product category, which
posted a 12.7% sales increase – and for Apparel (up 9.6%). Trends
were favourable for all of the brand's distribution channels.
In the fourth quarter of 2016, Puma registered 9.8% revenue
growth, with an excellent showing from the Footwear category (up
17.7%) and a 67.5% surge in online sales.
Volcom's sales increased in directly operated stores in 2016,
but its overall revenue was once again held back by a persistently
difficult operating environment for US wholesalers.
Other 2016 financial performance indicators
Other non-recurring operating income and expenses
represented a net expense of €506 million.
The Group's cost of net debt was lower than in 2015,
amounting to €128 million.
Kering's effective tax rate was 25.1%.
Net income, Group share amounted to almost €814
million.
Cash flows and financial position
The generation of free cash flow from operations is still a key
financial objective for the Group.
In 2016, the Group's free cash flow from operations
totalled €1,189 million, almost double the 2015 figure.
As of December 31, 2016, Kering had a very solid financial
structure:
(in € millions)
2016 2015
Change Capital employed 16,334.6
16,302.5 +32.1 Total equity 11,963.9 11,623.1
+340.8
Net debt 4,370.7 4,679.4
-308.7
The Group's net debt totalled €4,371 million as of
December 31, 2016, representing a decrease of €309 million or
6.6% compared with the previous year-end. This corresponds to a
leverage ratio of 1.9x EBITDA.
2016 2015 Gearing (net
debt/equity) 36.5% 40.3% Solvency ratio
(net debt/EBITDA) 1.89 2.28
Dividend
The Board of Directors will ask the Annual General Meeting of
shareholders to be held to approve the financial statements for the
year ended December 31, 2016 to approve a €4.60 per-share cash
dividend for 2016.
An interim dividend of €1.50 per share was paid on January 18,
2017 pursuant to a decision by the Board on
December 15, 2016.
The cash dividend paid for 2015 amounted to €4.00 per share.
Outlook
Positioned in structurally high-growth markets, Kering enjoys
very solid fundamentals and has a balanced portfolio of
complementary, high-potential brands with clearly focused
priorities.
As in 2016, the Group’s Luxury activities in 2017 will focus on
achieving same-store revenue growth, while the expansion of the
store network will be targeted and selective, as well as on
extending work currently underway to durably strengthen operating
margins. In the Group's Sport & Lifestyle activities, Puma
expects to deliver another year of market improvement in revenue
and recurring operating margin.
The Group's operating environment remains unsettled – both from
economic and geopolitical standpoints – and is exposed to events
that could influence consumer trends and tourism flows.
Against this backdrop, in 2017 and as it did in 2016, Kering
plans to pursue its strategy of rigorously managing and allocating
its resources in order to further enhance its operating
performance, cash flow generation and return on capital
employed.
***
At its meeting on February 9, 2017, the Board of Directors,
under the chairmanship of François-Henri Pinault, approved the
consolidated financial statements for 2016. The audit of the
consolidated financial statements has been completed and the audit
report will be issued once the verification of the management
report has been finalised.
PRESENTATION
A live webcast of the presentation of the
2016 Annual Results will take place on Friday February 10,
2017 at 10:30am CET on www.kering.com. The presentation slides
and 2016 financial report (pdf) will be available
beforehand.
A replay will be available online later in the day.
You will also be able to listen to the presentation live or on
replay by dialling:
FrenchLive presentation: +33 (0)1 70 77 09 22Replay: +33
(0)1 72 00 15 01Replay passcode: 306104#
EnglishLive presentation: +44 (0) 203 367 9462Replay: +44
(0) 203 367 9460Replay passcode: 306106#
About Kering
A global Luxury group, Kering develops an ensemble of luxury
houses in fashion, leather goods, jewellery and watches: Gucci,
Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga,
Brioni, Christopher Kane, McQ, Stella McCartney, Tomas Maier,
Boucheron, Dodo, Girard-Perregaux, Pomellato, Qeelin and Ulysse
Nardin. Kering is also developing the Sport & Lifestyle brands
Puma, Volcom and Cobra. By ‘empowering imagination’, Kering
encourages its brands to reach their potential, in the most
sustainable manner.
The Group generated revenue of €12.385 billion in 2016 and had
more than 40,000 employees at year end. The Kering share is listed
on Euronext Paris (FR 0000121485, KER.PA, KER.FP).
www.kering.comTwitter: @KeringGroupLinkedIn:
KeringInstagram: @kering_officialYouTube: KeringGroup
DECEMBER 31, 2016 CONSOLIDATED FINANCIAL STATEMENTS
AND
ADDITIONAL INFORMATION
Contents page
Highlights and subsequent events 9 Consolidated
income statement 11 Consolidated statement of
financial position 12 Consolidated statement of cash
flows 13 Breakdown of revenue 14
Breakdown of recurring operating income 16 Main
definitions 17
2016 HIGHLIGHTS
Creative and managerial change in the Couture & Leather
Goods division
On March 23, 2016, Brioni announced the appointment of Justin
O'Shea as its Creative Director. He was responsible for Brioni's
collections as well as its image from April 1, 2016 to October 4,
2016. The strategy of re-energising the Brioni House that began in
early 2016 was pursued during the course of the year through
long-term action plans aimed at strengthening Brioni's positioning
in the men's high-end ready-to-wear market.
On April 1, 2016, Yves Saint Laurent announced the departure of
Hedi Slimane as its Creative and Image Director at the end of a
four-year mission which has led to the complete repositioning of
the brand. Subsequently, on April 4, 2016, Yves Saint Laurent
announced the appointment of Anthony Vaccarello as Creative
Director of Yves Saint Laurent.
2016 also saw the arrival of new CEOs within the Luxury –
Couture & Leather Goods division: Claus-Dietrich Lahrs at
Bottega Veneta (also appointed a member of the Group Executive
Committee), Emmanuel Gintzburger at Alexander McQueen, Nikolas
Talonpoika at Christopher Kane and Cédric Charbit at
Balenciaga.
Sport & Lifestyle activities – Sale of Electric
On March 16, 2016, Volcom announced that it had sold the
Electric brand via a management buyout to a group led by Eric
Crane, Electric's Chief Executive Officer. The transaction, which
included all the assets of Electric and its brand, did not have a
material impact in 2016 as the cost of the sale had already been
factored in at the end of 2015.
Appointments and corporate governance at Kering
In 2016, Kering announced the appointment of the following new
members of the Group Executive Committee: Béatrice Lazat, Human
Resources Director, Valérie Duport, Senior Vice President of
Communications and Image and Jean-Philippe Bailly, Chief Operating
Officer. Carlo Alberto Beretta, who was previously CEO of Bottega
Veneta, was appointed to the newly-created role of Chief Client
& Marketing Officer at Kering and remains a member of the Group
Executive Committee.
Since January 1, 2016, Kering has combined its Supply Chain,
Logistics and Industrial Operations under the worldwide leadership
of Jean-Philippe Bailly.
Bond issue
On May 10, 2016, Kering carried out a €500 million issue of
ten-year bonds with a fixed-rate coupon of 1.25%.
SUBSEQUENT EVENTS
No significant events occurred between December 31, 2016 and
February 9, 2017 – the date on which the Board of Directors
authorised the consolidated financial statements for issue.
SUSTAINABILITY INITIATIVES
Final report on 2012-2016 sustainability targets
On May 3, 2016, Kering published its final report on 2012-2016
sustainability targets, revealing the progress made and results
achieved as compared to the Group's ambitious targets. In addition
to commitments on strategic raw materials, the targets are framed
around reducing carbon emissions, water consumption, waste
production and gradually eliminating the use of hazardous chemicals
as well as boosting supply chain control.
Rankings and certifications
On September 20, 2016, the Arborus Fund, the leading provider of
funding support for gender equality in the workplace in Europe and
worldwide, and Bureau Veritas awarded Kering the Gender Equality
European & International Standard (GEEIS) label, in recognition
of the Group's actions to promote equality between women and men at
work.
On September 26, 2016, Kering was the top-ranking luxury group
in the Thomson Reuters Diversity & Inclusion (D&I) Index.
Overall, Kering featured in the index's top 25, ranking 22nd out of
the 4,255 international publicly traded companies surveyed.
Global parental policy
On December 14, 2016, Kering announced the launch of its
parental policy, with effect from January 1, 2017, for all the
Group's employees, whatever their personal circumstances or
location. The policy provides for a minimum of 14 weeks on full pay
for maternity and adoption leave and a minimum of five days on full
pay for paternity or partner leave.
Early 2017: Launch of the 2025 sustainability
strategy
On January 25, 2017, Kering launched its new sustainability
strategy for 2025. Its targets are divided into three themes:
- Environment: CARE for the planet, which includes initiatives
by which Kering aims to reduce its Environmental Profit and Loss
(EP&L) account by at least 40%, and carbon emissions from its
activities by 50%, among others.
- Social welfare: COLLABORATE with people, which comprises the
Group's social ambitions.
- Innovation: CREATE new business models, which primarily
involves investing in disruptive innovations that can transform
conventional processes in luxury, and influence the industry.
Consolidated income statement
(in € millions)
2016 2015
CONTINUING OPERATIONS Revenue 12,384.9
11,584.2 Cost of sales (4,595.3)
(4,510.0)
Gross margin 7,789.6
7,074.2 Payroll expenses (1,983.7) (1,820.6) Other
recurring operating income and expenses (3,919.7)
(3,606.9)
Recurring operating income
1,886.2 1,646.7 Other
non-recurring operating income and expenses (506.0)
(393.5)
Operating income 1,380.2
1,253.2 Finance costs, net
(201.8) (249.1)
Income before tax
1,178.4 1,004.1 Corporate
income tax (296.1) (321.7)
Share in earnings (losses) of
equity-accountedcompanies
(2.2) (2.2)
Net income from
continuing operations 880.1
680.2 o/w Group share 825.1 655.0 o/w attributable to
non-controlling interests 55.0 25.2
DISCONTINUED OPERATIONS
Net income (loss) from
discontinuedoperations
(11.6) 41.0 o/w Group
share (11.6) 41.0 o/w attributable to non-controlling interests
Net income of consolidated companies
868.5 721.2 o/w Group share
813.5 696.0 o/w attributable to non-controlling interests 55.0 25.2
Net income,
Group share 813.5 696.0 Earnings per share (in €)
6.46 5.52 Fully diluted earnings per share (in €) 6.46
5.52
Net income from continuing operations,
Groupshare
825.1 655.0 Earnings per share (in €) 6.55 5.20 Fully
diluted earnings per share (in €) 6.55
5.20
Net income from continuing
operations(excluding non-recurring items), Group
share
1,281.9 1,017.3 Earnings per share (in €) 10.17 8.07
Fully diluted earnings per share (in €) 10.17
8.07
Consolidated statement of financial
position
ASSETS (in € millions)
Dec. 31, 2016
Dec. 31, 2015 Goodwill 3,533.5 3,758.8 Brands and other
intangible assets 11,272.7 11,285.5 Property, plant and equipment
2,206.5 2,073.0 Investments in equity-accounted companies 48.3 20.9
Non-current financial assets 480.4 458.4 Deferred tax assets 927.0
849.6 Other non-current assets 30.4 39.9
Non-current assets 18,498.8
18,486.1 Inventories 2,432.2 2,191.2 Trade receivables
1,196.4 1,137.1 Current tax receivables 105.6 123.8 Other current
financial assets 131.0 81.2 Other current assets 725.4 685.0 Cash
and cash equivalents 1,049.6 1,146.4
Current
assets 5,640.2 5,364.7 Total
assets 24,139.0 23,850.8
EQUITY AND LIABILITIES (in € millions)
Dec. 31, 2016
Dec. 31, 2015 Share capital 505.2 505.2 Capital reserves
2,428.3 2,428.3 Treasury shares (5.1) Translation adjustments 87.8
63.6 Remeasurement of financial instruments 16.8 (9.9) Other
reserves 8,231.6 7,966.2
Equity, Group share
11,269.7 10,948.3 Non-controlling
interests 694.2 674.8
Total equity
11,963.9 11,623.1 Non-current borrowings
4,185.8 4,039.9 Other non-current financial liabilities 19.6 14.8
Provisions for pensions and other
post-employmentbenefits
142.6 133.4 Other non-current provisions 74.0 82.3 Deferred tax
liabilities 2,854.5 2,857.9
Non-current
liabilities 7,276.5 7,128.3 Current
borrowings 1,234.5 1,785.9 Other current financial liabilities
285.9 238.9 Trade payables 1,098.5 939.7
Provisions for pensions and other
post-employmentbenefits
8.2 8.9 Other current provisions 143.7 157.3 Current tax
liabilities 398.5 334.6 Other current liabilities 1,729.3
1,634.1
Current liabilities 4,898.6
5,099.4 Total equity and liabilities
24,139.0 23,850.8
Consolidated statement of cash flows
(in € millions)
2016 2015 Net income
from continuing operations 880.1 680.2
Net recurring charges to depreciation,
amortisation andprovisions on non-current operating assets
432.0 409.6 Other non-cash income and expenses 295.0
209.6
Cash flow from operating activities
1,607.1 1,299.4 Interest paid/received 179.3
168.8 Dividends received (0.7) (1.4) Net income tax payable
386.1 378.5
Cash flow from operating activities
before tax,dividends and interest
2,171.8 1,845.3 Change in working
capital requirement (84.4) (219.3) Corporate income tax paid
(295.5) (330.4)
Net cash from operating activities
1,791.9 1,295.6
Purchases of property, plant and equipment
and intangibleassets
(611.0) (672.1)
Proceeds from disposals of property, plant
and equipmentand intangible assets
8.5 36.7 Acquisitions of subsidiaries, net of cash acquired (4.2)
(20.2)
Proceeds from disposals of subsidiaries
and associates, netof cash transferred
(6.0) (5.4) Purchases of other financial assets (87.4) (131.1)
Proceeds from disposals of other financial assets 16.4 21.0
Interest and dividends received 14.0 12.4
Net cash
used in investing activities (669.7)
(758.7)
Increase/decrease in share capital and
other transactionswith owners
(0.2) 2.1 Treasury share transactions 0.5 (7.3) Dividends paid to
owners of the parent company (504.9) (504.9) Dividends paid to
non-controlling interests (36.5) (56.6) Bond issues 570.5 1,070.4
Debt redemptions/repayments (51.9) (756.7) Increase/decrease in
other borrowings (1,054.7) 87.3 Interest paid and equivalent
(186.6) (178.8)
Net cash used in financing activities
(1,263.8) (344.5) Net cash from (used
in) discontinued operations (17.7) 3.5 Impact of exchange rate
variations 13.9 (98.4)
Net increase (decrease) in
cash and cash equivalents (145.4)
97.5 Cash and cash
equivalents at beginning of year 902.9 805.4
Cash and cash equivalents at end of year 757.5
902.9
Breakdown of revenue
(in € millions)
Q4 2016 Q4 2015
Reportedchange
Comparablechange(1)
2016 2015
Reportedchange
Comparablechange(1)
Luxury activities 2,476.6 2,214.8
+11.8% +11.3% 8,469.4
7,865.3 +7.7% +7.8% Gucci
1,342.5 1,099.7 +22.1% +21.4% 4,378.3 3,898.0 +12.3% +12.7% Bottega
Veneta 308.4 332.6 -7.3% -8.6% 1,173.4 1,285.8 -8.7% -9.4% Yves
Saint Laurent 346.2 287.1 +20.6% +20.5% 1,220.2 973.6 +25.3% +25.5%
Other Luxury brands 479.5 495.4 -3.2% -3.0% 1,697.5 1,707.9 -0.6%
-0.3%
Sport & Lifestyle activities 1,022.5
951.9 +7.4% +8.6% 3,883.7
3,682.5 +5.5% +9.0% Puma 961.7 884.0 +8.8%
+9.8% 3,642.2 3,403.4 +7.0% +10.4%
Other Sport & Lifestylebrands
60.8 67.9 -10.5% -8.3% 241.5 279.1 -13.5% -8.4% Corporate
and other 8.2 9.8 -16.3% -16.3% 31.8 36.4 -12.6% -12.4%
Kering –
Continuingactivities
3,507.3 3,176.5 +10.4%
+10.4% 12,384.9 11,584.2
+6.9% +8.1%
(1) On a comparable Group structure and
exchange rate basis.
(in € millions)
H2 2016 H2 2015
Reportedchange
Comparablechange(1)
H1 2016 H1 2015
Reportedchange
Comparablechange(1)
Luxury activities 4,591.5 4,103.3
+11.9% +11.3% 3,877.9
3,762.0 +3.1% +4.0% Gucci
2,430.8 2,023.8 +20.1% +19.4% 1,947.5 1,874.2 +3.9% +5.4% Bottega
Veneta 602.2 656.6 -8.3% -9.7% 571.2 629.2 -9.2% -9.1% Yves Saint
Laurent 672.3 530.5 +26.7% +26.6% 547.9 443.1 +23.7% +24.2% Other
Luxury brands 886.2 892.4 -0.7% -0.5% 811.3 815.5 -0.5% -0.0%
Sport & Lifestyle activities 2,086.9
1,951.5 +6.9% +8.9% 1,796.8
1,731.0 +3.8% +9.1% Puma 1,955.8 1,802.2 +8.5%
+10.3% 1,686.4 1,601.2 +5.3% +10.6%
Other Sport & Lifestylebrands
131.1 149.3 -12.2% -8.0% 110.4 129.8 -14.9% -8.9% Corporate
and other 13.6 16.9 -19.5% -19.0% 18.2 19.5 -6.7% -6.7%
Kering –
Continuingactivities
6,692.0 6,071.7 +10.2%
+10.5% 5,692.9 5,512.5
+3.3% +5.5%
(1) On a comparable Group structure and
exchange rate basis.
Breakdown of recurring operating
income
(in € millions)
2016 2015
Change€m
Change%(1)
Luxury
activities 1,936.0 1,708.0
+228.0 +13.3% Gucci 1,256.3 1,032.3 +224.0
+21.7% Bottega Veneta 297.4 374.5 -77.1 -20.6% Yves Saint Laurent
268.5 168.5 +100.0 +59.3% Other Luxury brands 113.8 132.7 -18.9
-14.2%
Sport & Lifestyle activities 123.2
94.8 +28.4 +30.0% Puma 126.6 92.4 +34.2 +37.0%
Other Sport & Lifestylebrands
(3.4) 2.4 -5.8 -241.7% Corporate and other (173.0) (156.1)
-16.9 -10.8%
Recurring operating income 1,886.2
1,646.7 +239.5 +14.5%
(1) As reported.
MAIN DEFINITIONS
Definition of "reported" and "comparable" revenue
The Group's "reported" revenue corresponds to published revenue.
The Group also uses "comparable" revenue to measure organic growth.
"Comparable" revenue refers to 2015 revenue adjusted as follows
by:
- neutralising the portion of revenue
corresponding to entities divested in 2015;
- including the portion of revenue
corresponding to entities acquired in 2016;
- remeasuring 2015 revenue at 2016
exchange rates.
These adjustments give rise to comparative data at constant
scope and exchange rates, which serves to measure organic
growth.
Definition of recurring operating income
The Group's total operating income includes all revenues and
expenses directly related to Group activities, whether these
revenues and expenses are recurring or arise from non-recurring
decisions or transactions.
"Other non-recurring operating income and expenses" consists of
unusual items, notably as concerns the nature or frequency, that
could distort the assessment of Group entities' economic
performance. Other non-recurring operating income and expenses
include impairment of goodwill and other intangible assets, gains
or losses on disposals of non-current assets, restructuring costs
and costs relating to employee adaptation measures.
Consequently, Kering monitors its operating performance using
"Recurring operating income", defined as the difference between
total operating income and other non-recurring operating income and
expenses.
Recurring operating income is an intermediate line item intended
to facilitate the understanding of the Group's operating
performance and which can be used as a way to estimate recurring
performance. This indicator 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.
Recurring operating income at comparable exchange rates for 2015
takes into account the currency impact on revenue and Group
acquisitions, the effective portion of currency hedges and the
impact of changes in exchange rates on the translation of the
recurring operating income of consolidated entities located outside
the eurozone.
Definition of EBITDA
The Group uses EBITDA to monitor its operating performance. This
financial indicator corresponds to recurring operating income plus
net charges to depreciation, amortisation and impairment of
non-current operating assets recognised in recurring operating
income.
EBITDA at comparable exchange rates is defined using the same
principles as for recurring operating income at comparable exchange
rates.
Definition of free cash flow from operations and available
cash flow
The Group also 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 purchases and sales of property,
plant and equipment and intangible assets).
"Available cash flow" corresponds to free cash flow from
operations plus interest and dividends received less interest paid
and equivalent.
Definition of net debt
As defined by CNC recommendation No. 2009-R-03 of July 2, 2009,
net debt comprises gross borrowings, including accrued interest,
less net cash.
Net debt includes fair value hedging instruments recorded in the
statement of financial position relating to bank borrowings and
bonds whose interest rate risk is fully or partly hedged as part of
a fair value relationship.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170209006323/en/
KeringPressEmilie Gargatte, +33 (0)1 45 64 61
20emilie.gargatte@kering.comorAstrid Wernert, +33 (0)1 45 64 61
57astrid.wernert@kering.comorAnalysts/investorsClaire
Roblet, +33 (0)1 45 64 61 49claire.roblet@kering.comorAndrea
Beneventi, +33 (0)1 45 64 63 28andrea.beneventi@kering.com