Excellent sales performance of B.zero1 & Serpenti - Bulgari

19 Nov '10

5 min read

Perfume sales began to rise again during October, recording an increase of 5%. Finally, accessories had an excellent sales performance, with a growth of 35.3% (+54.8% at current exchange rates). Particularly, leather accessories increased by 41%, also thanks to the success of the Leoni bag, effectively promoted by an impactful Fall/Winter advertising campaign, and the Isabella Rossellini bag, created together with the world renowned celebrity.

Turnover by geographical area
In the third quarter, geographical areas recorded varied performances. Europe rose by 11.1% (with Italy at +24.4%), while America registered a drop of 7.4%. The sales trend in America, however, adjusted to take into account the normal volatility of high-end jewellery, recorded a growth of 6.4%. In Asia, Japan (-1.1%) continues to show signs of weakness, in line with the last quarter, while the rest of Asia continues to grow (+15.4%) with the strong contribution of the Chinese market (Greater China: +24.3%). Finally, although the Middle East/Other recorded a slight drop (-1.5% at current exchange rates), this region is still improving compared to the second quarter of 2010, when sales decreased by 10.8%.

Profit & Loss Highlights
Thanks to the effective actions implemented to limit the impact of the strong increase in raw materials, and gold in particular, the gross margin grew from 147.9 million Euro in the third quarter of 2009 to 168.4 million Euro in 2010 (+13.9%), going from 63.4% to 62.9% in terms of impact on revenue; however, this is in line with the guidance provided to the market.

Total operating costs, before costs related to the restructuring and excluding those for advertising and promotion, increased from 101.7 million Euro in the third quarter of 2009 to 116.5 million Euro in the third quarter of 2010 (+14.5% at current exchange rates). It has to be underlined that, at constant exchange rates and adjusted for the effect caused by the incentive plan accruals misalignment between 2010 and 2009 , those costs have actually grown significantly less (+2%).

Advertising and promotional costs, equalling 23.6 million Euro, although on the rise compared to the third quarter of 2009 (+3.3%) following a different planning of activities from last year, however substantially maintained a stable percentage of incidence on turnover (8.8% vs. 9% in 2009).

Thanks to the cost containment and the positive trend in revenues, the operating profit was 26.8 million Euro compared to 18.6 million Euro in the third quarter of 2009 (+44.5%).

Finally, the net profit was 16.6 million Euro, a strong improvement (+137%) compared to 7 million Euro recorded in the third quarter of 2009.

Bulgari S.p.A.

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