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Bearish demand pulls down 2014 operating profit at Kering
23 Feb '15
3 min read
Reflecting lackluster demand, French luxury and lifestyle products marketer, Kering said its recurring operating profit fell around 5 per cent in 2014 from 2013.
In 2014, Kering reported a recurring operating profit of €1.66 billion as against €1.75 in 2013, down about 5 percent while its recurring net profit from operations fell 4.4 per cent to €1.2 billion.
Sales in the reporting grew 4 per cent to €10 billion driven by strong growth at its fashion brands Yves Saint Laurent and Bottega Veneta.
Revenues from the Yves Saint Laurent brand surged 27 per cent in 2014 from a year earlier, while profit zoomed 37 per cent year over year to €105 million.
However, earnings at its leather handbags brand, Bottega Veneta rose slower by 8 per cent to €357 million on sales of €1.1 billion.
2014 sales at the luxury goods marketer’s sportswear and lifestyle brands which accounted for a third of group sales climbed 3.5 per cent from the previous year to €3.2 billion.
At €1,991 million, EBITDA was 2.6 per cent lower than in 2013 at Kering and EBITDA margin inched down by 1.4 percentage points to 19.8 per cent in 2014 from 21.2 per cent in 2013.
Earnings per share from continuing operations touched €8.00 in 2014 as against €6.93 for the previous year.
Excluding non-recurring items, earnings per share from continuing operations amounted to €9.35, down 4.4 per cent from the 2013 figure.
In 2014, the cost of net debt amounted to €151 million, 13 per cent lower than in 2013, primarily due to a reduction in Kering's average cost of borrowing.
Due to the tax effect of a number of non-recurring operating income items recorded during the year, Kering's effective tax rate rose significantly in 2014 to 24 per cent, with recurring tax rate at 18.3 per cent.
In 2014, other non-recurring operating income and expenses represented a net expense of €112 million and primarily included the net gain on the disposal of a property complex and asset impairment losses.
CEO François-Henri Pinault said, “Sales growth and rise in operating income of the luxury division confirm the relevance of multi-brand model and demonstrates ability to unlock potential of each of our brands.”
“The transformations carried out in 2014 from both an organisational and operational standpoint has allowed us to step up our responsiveness, and achieve a greater degree of integration and specialisation,” he added.
“I am confident in the Group's ability to achieve sustainable profitable growth while focusing in the shorter term on our brands’ cash flow generation,” he observed. (AR)
In 2014, Kering reported a recurring operating profit of €1.66 billion as against €1.75 in 2013, down about 5 percent while its recurring net profit from operations fell 4.4 per cent to €1.2 billion.
Sales in the reporting grew 4 per cent to €10 billion driven by strong growth at its fashion brands Yves Saint Laurent and Bottega Veneta.
Revenues from the Yves Saint Laurent brand surged 27 per cent in 2014 from a year earlier, while profit zoomed 37 per cent year over year to €105 million.
However, earnings at its leather handbags brand, Bottega Veneta rose slower by 8 per cent to €357 million on sales of €1.1 billion.
2014 sales at the luxury goods marketer’s sportswear and lifestyle brands which accounted for a third of group sales climbed 3.5 per cent from the previous year to €3.2 billion.
At €1,991 million, EBITDA was 2.6 per cent lower than in 2013 at Kering and EBITDA margin inched down by 1.4 percentage points to 19.8 per cent in 2014 from 21.2 per cent in 2013.
Earnings per share from continuing operations touched €8.00 in 2014 as against €6.93 for the previous year.
Excluding non-recurring items, earnings per share from continuing operations amounted to €9.35, down 4.4 per cent from the 2013 figure.
In 2014, the cost of net debt amounted to €151 million, 13 per cent lower than in 2013, primarily due to a reduction in Kering's average cost of borrowing.
Due to the tax effect of a number of non-recurring operating income items recorded during the year, Kering's effective tax rate rose significantly in 2014 to 24 per cent, with recurring tax rate at 18.3 per cent.
In 2014, other non-recurring operating income and expenses represented a net expense of €112 million and primarily included the net gain on the disposal of a property complex and asset impairment losses.
CEO François-Henri Pinault said, “Sales growth and rise in operating income of the luxury division confirm the relevance of multi-brand model and demonstrates ability to unlock potential of each of our brands.”
“The transformations carried out in 2014 from both an organisational and operational standpoint has allowed us to step up our responsiveness, and achieve a greater degree of integration and specialisation,” he added.
“I am confident in the Group's ability to achieve sustainable profitable growth while focusing in the shorter term on our brands’ cash flow generation,” he observed. (AR)
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