Sant'Elpidio a Mare - August 6th, 2015
TOD'S S.p.A. - Group's sales reached 515.3 million Euros in the first half of 2015 with a 20% EBITDA margin; solid double-digit growth of sales and profits in Q2 2015The Board of Directors approved Tod's Group 2015 Half-Year Report
Group's sales: 515.3 million Euros, +7.9% from H1 2014; +15% in Q2
EBITDA: 103 million Euros, equal to 20% of sales
EBIT: 77.5 million Euros, equal to 15% of sales
Group's Net Income: 50.4 million Euros, equal to 9.8% of sales
Positive Net Financial Position: 73.1 million Euros
The Board of Directors of Tod's S.p.A., the Italian company listed on the Milan Stock Exchange and holding of the luxury goods group of the same name operating in luxury and quality shoes, accessories and apparel with the Tod's, Hogan, Fay and Roger Vivier brands, today approved the Group's report for the first half of
2015 (January 1st - June 30th, 2015).
Diego Della Valle, Chairman and CEO of the Group, commented as follows:
"Our Group has performed well during the period, showing a solid double-digit growth in both sales and profits in the second quarter. These results confirm the correctness of our growth strategy; each brand is developing internationally with high quality products, recognizable and consistent with their own DNA. We are also working to a precise plan of marketing and communications, which will use the network, I addition to traditional instruments, with the aim of adding new customers. In a context that is not easy, especially on some important markets for luxury goods, such as China, considering the positive feedback received by the winter collections and our continued strong focus on cost control, I believe that our Group will achieve good results also in the second half of the year."
Consolidated sales were 515.3 million Euros in the first half of 2015, up 7.9% from H1 2014, showing a visible acceleration in the second quarter of the year (+15% in Q2 as compared to +1.5% in Q1), across all the geographical areas and product categories.
As expected, the impact of currencies fluctuations was positive: at constant exchange rates, meaning by using the average exchange rates of H1 2014, including the related effects of hedging contracts, sales would have been 486.1 million Euros, up 1.8% from H1 2014.
million Euros | H1 2015 | H1 2014 | % change at reported rates | % change at constant rates | FY 2014 |
Tod's | 304.4 | 290.2 | +4.9% | -2.1% | 568.0 |
Hogan | 108.8 | 104.5 | +4.2% | +2.7% | 212.3 |
Fay | 22.9 | 22.8 | +0.5% | +0.3% | 57.3 |
Roger Vivier | 78.6 | 59.8 | +31.3% | +19.2% | 126.9 |
Other | 0.6 | 0.4 | n.m. | n.m. | 1.0 |
TOTAL | 515.3 | 477.7 | +7.9% | +1.8% | 965.5 |
The Tod's brand totalled 304.4 million Euros in sales, up 4.9% from H1 2014 and registered a significant acceleration in the second quarter (+9.9%); positive results in all markets where the brand is distributed, with the exception of China, which continues to be affected by the overall weakness in consumer spending.
Hogan revenues were 108.8 million Euros, up 4.2% from H1 2014. Positive results in all regions; double- digit growth in Europe and in Asia.
The Fay brand registered sales of 22.9 million Euros, with a slight increase compared to the first half of
2014, also thanks to the contribution of foreign markets. The brand is in fact starting its international expansion process.
Finally, Roger Vivier revenues were 78.6 million Euros, up 31.3% from H1 2014; double-digit growth in all regions, despite the strategy of selective expansion, aimed at maintaining the unique positioning of the
brand.
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Breakdown of consolidated sales by product categorymillion Euros | H1 2015 | H1 2014 | % change at reported rates | % change at constant rates | FY 2014 |
Shoes | 410.7 | 373.7 | +9.9% | +3.5% | 743.5 |
Leather goods and accessories | 77.6 | 77.1 | +0.7% | -5.9% | 155.6 |
Apparel | 26.4 | 26.5 | -0.6% | -1.4% | 65.4 |
Other | 0.6 | 0.4 | n.m. | n.m. | 1.0 |
TOTAL | 515.3 | 477.7 | +7.9% | +1.8% | 965.5 |
Sales from shoes continued their growth, confirming the Group's leadership in this category. Revenues were 410.7 million Euros (up +9.9% from H1 2014; +16.1% only in Q2).
Sales from leather goods and accessories totalled 77.6 million Euros, up 0.7% from H1 2014. As expected, revenues grew in double digits in the second quarter; we believe that this trend will continue during the year, also based on the positive feedback of the winter collections of some families of Tod's handbags.
Finally, sales from apparel were 26.4 million Euros, broadly stable compared to H1 2014.
million Euros | H1 2015 | H1 2014 | % change at reported rates | % change at constant rates | FY 2014 |
Italy | 152.9 | 148.5 | +3.0% | +3.0% | 311.1 |
Europe (excl. Italy) | 122.2 | 108.0 | +13.1% | +10.5% | 221.3 |
Americas (*) | 51.9 | 42.3 | +22.7% | +6.1% | 87.3 |
Greater China (**) | 118.2 | 117.8 | +0.3% | -12.6% | 225.7 |
Rest of World | 70.1 | 61.1 | +14.8% | +8.1% | 120.1 |
TOTAL | 515.3 | 477.7 | +7.9% | +1.8% | 965.5 |
(*) This line includes the whole American continent (Northern and Southern America). (**) This line includes: mainland China, Hong Kong, Macao and Taiwan.
In the first half of 2015, domestic sales were 152.9 million Euros, up 3% from H1 2014, which implies a visible acceleration in Q2 (+6.2%).
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In the rest of Europe, the Group's revenues totalled 122.2 million Euros, up 13.1% from H1 2014; also in this region, the performance improved in Q2.
In the Americas, sales were 51.9 million Euros, up 22.7% from H1 2014; the visible acceleration registered in the last few months of the period was also due to the more favourable weather conditions on the Eastern Coast (+32.4% sales growth in Q2).
In Greater China the Group's sales totalled 118.2 million Euros, equal to 22.9% of consolidated turnover. Mainland China, which represents approx. half of this region, registered positive results (at reported rates), while the performance in Hong Kong was still negative, due to the general reduction in traffic and consumption.
Finally, in the area "Rest of the World" the Group's revenues were 70.1 million Euros, up 14.8% from H1
2014 (+30.2% in Q2), mainly driven by the outstanding results of Japan and Korea.
million Euros | H1 2015 | H1 2014 | % change at reported rates | % change at constant rates | FY 2014 |
DOS | 327.1 | 301.1 | +8.6% | +0.5% | 616.0 |
Third parties (Franchised stores + Independent retailers) | 188.2 | 176.6 | +6.6% | +4.0% | 349.5 |
TOTAL | 515.3 | 477.7 | +7.9% | +1.8% | 965.5 |
Sales through DOS totalled 327.1 million Euros, up 8.6% from H1 2014; the 14.3% growth registered in Q2 was driven by the organic growth and by the widening of the retail network.
The Same Store Sales Growth (SSSG) rate, calculated as the worldwide average of sales growth rates at constant exchange rates registered by the DOS already existing as of January 1st, 2014, is -5.6% in the first
31 weeks of the year (from January 1st to August 2nd, 2015). This figure shows a significant improvement as
compared with the first three months of the year (it was -10.6% as of the end of March).
The SSSG would be positive at reported rates.
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As of June 30th, 2015 the Group's distribution network was composed by 251 DOS and 93 franchised stores, compared to 229 DOS and 87 franchised stores as of the end of June 2014.
Revenues to third parties globally amounted to 188.2 million Euros, up 6.6% from H1 2014; also the performance of this channel registered an acceleration in the second quarter, only partially due to the different timing of deliveries.
As already highlighted in our previous press releases, analyzing quarterly figures is not fully meaningful, due to the discrepancies in the flow of industrial revenues and costs on a monthly basis; therefore, annualizing quarterly figures would be misleading.
In the first half of 2015, the Group's EBITDA reached 103 million Euros, with a 20% margin on sales and a visible improvement in the second quarter of the year.
The industrial margin slightly increased as compared to H1 2014, but even greater was the growth of the incidence on sales of: cost for services (equal to 24.4% in H1 2015, compared to 23.3% in H1 2014), costs of use of third party assets (equal to 12.2% in H1 2015, compared to 11.1% in H1 2014) and labour cost (equal to 17.7% in H1 2015, compared to 16.7% in H1 2014).
Also the Group's headcount continues to grow: 4,504 employees as of June 30th, 2015, compared to 4,254 as of June 2014.
In the first half of 2015, the Group's EBIT was 77.5 million Euros, with a 15% margin on sales; the incidence on sales of depreciation, amortisation and provisions increased slightly: 5% in H1 2015 compared to 4.6% in H1 2014.
At constant exchange rates, EBITDA and EBIT would have been, respectively, 90.2 million Euros (with a
18.6% margin on sales) and 66.4 million Euro (13.7% of sales).
The Group's profit before taxes was 74 million Euros; taxes for the period amounted to 24.2 million Euros, with a tax rate of 32.6%, significantly higher than the 29.1% of H1 2014, due to a different, and less favourable, mix of markets of generation of the result (a greater part of the profits has been obtained in countries with higher taxation).
Net of minority interests, the Group's net income amounted to 50.4 million Euros, with a margin on sales
of 9.8% .
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Comments on the Balance Sheet and Cash Flow key figures
In H1 2015, the Group invested 27.5 million Euros in tangible and intangible fixed assets, compared to 34 million Euro of H1 2014, which were mainly devoted to the widening and refurbishment of the DOS network; they include also the expenditures for the construction of the new building within the perimeter of the Group's headquarters in the Marche region. The remaining expenditures pertain the normal update of the industrial and production structures and the development of the Company's software.
The operating working capital totalled 323.4 million Euros as of June 30th, 2015; the growth, compared to the balance as of the end of June 2014, is mainly due to the physiological increase of inventories, linked to the widening of the DOS network.
As of June 30th, 2015, the Group's net financial position was positive and equal to 73.1 million Euros, with an approx. 40 million Euros difference, compared to the balance as of the end of June 2014, which is expected to be gradually attenuated during the year.
As of June 30th, 2015, consolidated shareholders' equity was 816.6 million Euros, which compares to 772.4 million Euros as June 30th, 2014.
The manager responsible for preparing the company's financial reports, Mr. Rodolfo Ubaldi, declares, pursuant to article 154 bis, paragraph 2, of Legislative Decree n. 58/98 (the "Unified Financial Act"), that the accounting information contained in this press release corresponds to the document results, books and accounting records.
Pursuant to article 154 ter, paragraph 5, of the "Unified Financial Act, the half-year report as at June 30th 2015, approved by the Board of Directors today, will be made available to the public at the registered office of the Company. The document will also be published under the Section "Financial Statements" on the website of the Company www.todsgroup.com.
Should you need explanations, please contact: Investor Relations Office - tel. +39 02 77 22 51 e-mail: c.oglio@todsgroup.com
Corporate website: www.todsgroup.com
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ATTACHMENTS
TOD 'S Gr oup Co n s o lid a te d In c o m e S ta te m e n t U n a ud ite d d a taeuro 000's
Revenue
H1 15 H1 14 FY 14
Sa l es revenue 515,310 477,747 965,532
Other i ncome 4,959 4,909 10,476
Total revenue and income 520,269 482,656 976,008
Operating Costs
Cha nge i n i nventori es of work i n progres s a nd fi ni s hed goods 30,987 15,533 31,944
Cos t of ra w materi a l s , suppl i es a nd ma teri a l s for cons umpti on (151,026) (134,448) (278,912) Cos ts for s ervi ces (125,545) (111,174) (231,436) Cos ts of us e of thi rd pa rty a s s ets (63,106) (53,196) (109,665) Personnel cos ts (91,422) (79,584) (160,386) Other opera ti ng cha rges (17,112) (16,818) (34,005) Total operating costs (417,224) (379,687) (782,461)
EBITDA 103,045 102,969 193,547
Amortisation, depreciation and write-downs
Amorti s a ti on of i nta ngi bl e as s ets (4,271) (4,377) (8,792) Depreci ati on of ta ngi bl e a s sets (19,060) (16,444) (32,791) Other adj ustment (204) (2,339) Total amortisation, depreciation and write-downs (23,535) (20,821) (43,922) Provi s i ons (1,998) (1,045) (1,447) EBIT 77,512 81,103 148,179
Financial income and expenses
Fi na nci a l i ncome 19,920 6,979 23,403
Fi na nci a l expens es (23,384) (9,252) (27,202) Total financial income (expenses) (3,464) (2,273) (3,799) I ncome (l oss es) from equi ty i nves tments
Profit before taxes 74,048 78,830 144,380
I ncome ta xes (24,177) (22,976) (47,619)
Profit/(loss) for the period 49,870 55,854 96,761
Non-control l i ng i nteres ts 508 300 353
Profit/(loss) of the Group 50,379 56,154 97,114
EPS i n (euro) 1.65 1.83 3.17
EPS di l uted i n (euro) 1.65 1.83 3.17
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TOD 'S Gr oup Co n s o lid a te d s ta te m e n t o f c om p r e h e ns iv e in c o m e U n a ud ite d d a taeuro 000' s
H1 15 H1 14
Profit (loss) for the period (A) 49,870 55,854
Other comprehensive income that will be reclassified subsequently to profit and loss:
Gain/(Losses) on derivative financial instruments (cash flow hedge) 3,161 1,233
Gain/(Losses) on currency translation of foreign subsidi aries 10,291 (2,900)
Total other comprehensive income that will be reclassified subsequently to profit and
loss (B) 13,452 (1,667) Other comprehensive income that will not be reclassified subsequently to profit and
loss:
Cumulated actuarial gains/(losses) on defined benefit plans
Total other comprehensive income that will not be reclassified subsequently to profit and loss (C)
Total Comprehensive Income (A) + (B) + (C) 63,323 54,187
Of which:
Attributable to Shareholders of the Parent company 63,753 54,447
Attributable to non-controlling intere sts (430) (260)
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TOD 'S Gr oup Co n s o lid a te d s ta te m e n t o f f ina n c ia l p o s ition U n a ud ite d d a taeuro 000's
Non current assets
Intangible fixed assets
06.30.15 12.31.14 06.30.14As s ets wi th i ndefi ni te us eful l i fe 149,466 149,466 149,466
Key money 15,941 16,676 17,249
Other i ntangi bl e as s ets 26,470 27,411 27,414
Total Intagible fixed assets 191,878 193,553 194,129
Tangible fixed assets
Bui l di ngs and l and 107,546 95,111 98,198
Pl ant and ma chi nery 12,509 8,550 8,484
Equi pment 15,362 16,082 16,581
Leas ehol d i mprovement 46,765 43,361 40,386
Others 48,446 54,722 45,850
Total Tangible fixed assets 230,628 217,826 209,499
Other assets
Inves tment properti es 30 32 34
Equi ty i nves tments 20 20 20
Deferred tax as s ets 53,032 48,237 52,971
Others 20,718 18,535 16,372
Total others assets 73,800 66,824 69,397
Total non current assets 496,306 478,203 473,025
Current assets
Inventori es 357,346 327,085 304,000
Trade recei vabl es 112,569 99,445 98,871
Tax recei vabl es 23,227 30,698 11,939
Deri vati ve fi nanci al i ns truments 925 1,751 429
Others 39,505 37,229 39,111
Cas h and ca s h equi va l ents 159,434 165,949 155,295
Total current assets 693,006 662,159 609,645
Total assets 1,189,312 1,140,362 1,082,670
T o b e c o n t i n u ed
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TOD 'S Gr oup Co n s o lid a te d s ta te m e n t o f f ina n c ia l p o s ition U n a ud ite d d a ta10
TOD 'S Gr oup Co n s o lid a te d S ta te m e n t o f Ca sh F lo ws U n a ud ite d d a taeuro 000's
Jan. - Jun. 15 Jan. - Jun. 14
Profit/(Loss) for the period 49,870 55,854
Non-cash adjustments:
Amortiza t., deprec., reva l ua t., a nd wri te-downs 24,947 23,374
Cha nge i n empl oyee benefi ts 106 272
Cha nge i n deferred ta x/l i a bi l i ti es (4,906) (2,092) Other non moneta ry expens es /(i ncome) 3,800 4,780
Cash flow (A) 73,817 82,188
Change in current assets and liabilities:
Tra de recei va bl es (13,291) (4,286) Other current a s s ets (2,276) (4,317) I nventori es (31,709) (24,464)
Ta x recei va bl es 7,471 4,920
Tra de pa ya bl es (13,700) (5,903)
Other current l i a bi l iti es 4,229 5,566
Ta x paya bl es 6,299 849
Change in operating working capital (B) (42,976) (27,635) Cash flow from operations (C) = (A)+(B) 30,841 54,553
Net i nves tments i n i nta ngi bl e a nd ta ngi bl e a s s ets (26,647) (33,360) (I ncreas e) decrea s e of equi ty i nvestments
Other cha nges i n fi xed a s s ets
Reducti on (i ncrea s e) of other non-current a s s ets (2,183) (1,010) Cash flow generated (used) in investing activities (D) (28,830) (34,370) Di vi dends pa i d (61,319) (82,895)
Others cha nge i n Equi ty 2 (8)
Cha nges i n l ong term l oa ns /other non-current l ia bi l i ti es | 47,457 | 2,048 |
Ca pi tal i ncrea s e | ||
Cha nges i n non control l i ng-i nterests | ||
Cash flow generated (used) in financing (E) | (13,859) | (80,855) |
Tra ns la ti on di fferences (F) | 3,696 | (4,245) |
Cash flow from continuing operations (G)=(C)+(D)+(E)+(F) | (8,151) | (64,917) |
Cash flow from assets held for sale (H) | ||
Cash flow generated (used) (I)=(G)+(H) | (8,151) | (64,917) |
Net ca sh a nd ca s h equi va l ents a t the begi nni ng of the peri od | 154,961 | 207,101 |
Net ca sh a nd ca s h equi va l ents a t the end of the peri od | 146,810 | 142,184 |
Change in net cash and cash equivalents | (8,151) | (64,917) |
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TOD 'S Gr oup Co n s o lid a te d S ta te m e n t o f Ch an g e s in Eq u ity U n a ud ite d d a taHedging and
Non-
January - June 2015 euro 000 | 's Share | Capital | reserve for | Retained c | ontrolling | |
January - June 2015 euro 000 | capital | reserves | translation | earnings Group interests | interests | Total |
Balances as of 01.01.15 | 61,219 | 214,055 | (8,747) | 543,003 809,531 | 5,078 | 814,609 |
Profit & Loss account 50,379 50,379 (508) 49,870 Direct in Equity 13,374 13,374 78 13,452
Total Comprehensive Income 13,374 50,379 63,753 (430) 63,323
Dividend paid (61,219) (61,219) (100) (61,319)
Other 2 2 2
Capital increase Share based payments
Balances as of 06.30.15 61,219 214,055 4,627 532,166 812,068 4,549 816,616
Profit & Loss account 56,154 56,154 (300) 55,854 Direct in Equity (1,707) (1,707) 40 (1,667)
Total Comprehensive Income (1,707) 56,154 54,447 (260) 54,187
Dividend paid (82,645) (82,645) (250) (82,895)
Other (8) (8) (8)
Capital increase Share based payments
Balances as of 06.30.14 61,219 214,055 (12,609) 504,584 767,250 5,139 772,389
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