Moodie Davitt snapshot:
Kering 2017 financial results
– Operating income +56.3% to
– Consolidated EBITDA +49.4%
– Consolidated revenue +25% (reported) to €15.47 billion
– “Spectacular” Gucci sales topped €6 billion for first time
Source: The Moodie Davitt Report
FRANCE. Luxury group Kering registered a +56.3% increase in operating income to €2.95 billion in 2017, a record high for the company.
Consolidated EBITDA jumped +49.4% year-on-year to €3.46 billion and net income group share surged +119.5% to €1.78 billion. Consolidated revenue was €15.47 billion, up +25% as reported and +27.2% on a comparable basis.
“Gucci, whose performance was nothing short of spectacular, is amplifying its desirability across all markets” – Kering Chairman and CEO François-Henri Pinault
Mature markets and emerging countries recorded good growth. Western Europe and North America like-for-like sales grew +32.3% and +22.9% respectively. Asia Pacific, excluding Japan, posted a +32.7% rise, while Japan delivered double-digit growth (+10.9% on a comparable basis).
Kering Chairman and CEO François-Henri Pinault said: “Kering delivered a phenomenal year in 2017. We created over €3 billion in additional revenues in a single year, and generated more than a billion in additional EBIT.
“Gucci, whose performance was nothing short of spectacular, is amplifying its desirability across all markets. Saint Laurent is on a rapid growth track, while Bottega Veneta pursues its redeployment. Balenciaga is charting an impressive development trajectory, and our other Luxury brands are experiencing positive momentum.
“All of our Houses enjoy huge growth potential, rooted in their skills at reinventing codes, enhancing desirability through bold creative visions, and thereby creating value. We unequivocally demonstrated the strength of our business model.
“In a global environment that remains uncertain, we will not relax our vigilance, but we are confident that the complementarity of our Houses, our geographic footprint, the diversity of our customer base and the strengths of an integrated Luxury Group will enable us, this year again, to do much better than our markets.”
Revenue generated by Kering’s Luxury activities in 2017 passed the €10 billion mark for the first time, advancing +27.5% as reported and 29.9% on a comparable basis. The sharp increase was driven by +35.3% comparable growth in the directly operated store network and +16.7% comparable growth in the wholesale network.
Total like-for-like revenue rose +33.4% in Asia Pacific, +32.7% in Western Europe, +27.1% in North America and +15.5% in Japan. Online sales for Luxury activities surged by over +70% year-on-year.
Gucci outperformed the market in 2017 with revenue topping the €6 billion mark for the first time (up +41.9% as reported and +44.6% on a comparable basis). Sales in directly operated stores increased +47%, with Western Europe up +57.6% and North America +up 43.9%. All of the brand’s main product categories contributed to sales growth in the directly operated store network, said Kering.
Bottega Veneta’s 2017 sales amounted to €1.17 billion (+0.2% as reported and +2.4% like-for-like). Revenue in directly operated stores grew by +4%, led by the rise in sales in Western Europe (up +7.3%).
Yves Saint Laurent sales soared +23% (reported) and +25.3% like-for-like. Sales in directly operated stores climbed +27.3% on a comparable basis, propelled by revenue growth across all regions. “This excellent performance reflects increasing customer loyalty as well as the House’s cachet amongst tourists, particularly in Western Europe (up 27.1% on a comparable basis),” said Kering.
Other Luxury brands
Other Luxury brands saw robust growth in 2017 revenue, up +12.3% as reported and +14.1% based on comparable data to €1.9 billion.
Couture & Leather Goods brands sales increased +17.8% growth on a comparable basis, driven by an ‘excellent’ performance from Balenciaga in all regions and categories.
Watches & Jewellery brands delivered a +8.7% sales rise on a comparable basis.
Sport and Lifestyle
2017 revenue for the Sport & Lifestyle activities totalled €4.38 billion, a rise of +12.8% as reported and +14.7% like-for-like. Sales were up in all distribution channels and in all main regions. Sport & Lifestyle activities posted solid growth in all key product categories, especially Footwear.
Puma’s full-year revenue topped the €4 billion mark for the first time, up +14% as reported and +15.8% on a comparable basis.
Kering Eyewear posting sales of €352 million in 2017. It contributed €272 million to consolidated revenue during the period, after eliminating intra-group sales and royalties paid to the brands. Its contribution to organic growth at constant exchange rates for the Group was 2.2 percentage points.
The Gucci licence has been operative since January 2017.