Chairman's message

Philippe Benacin

Philippe Bénacin, After just publishing half-year results largely on track with forecasts, could you tell us a bit more?

To be even more precise, our results for the 2018 first half were fully in line with targets announced at the end of 2017.

With €218.7 million in revenue for the first six months, we are for that reason extremely confident about meeting our objectives and about the level of our operating margin which amounted to 15.9%.

Our brand portfolio delivered a satisfactory performance in the first half that was totally in line with targets, and despite a relatively uneventful year in terms of launches.

Still, the projections you issued in November 2017 for 2018 were considered conservative?

As I emphasized at the time, our guidance is always characterized as overly conservative… However, after a three-year period of robust revenue growth from €297 million to €422 million, to consolidate these gains, we considered it strategically wise, and even essential, to slow the pace of our launches.
While ensuring the success of a launch is relatively easy, the task of ensuring a line's sustainability over the longer-term is much more important and difficult. When we see that some of our top-performing lines are continuing to add market share several years after being launched, then we are certain that this strategy of consolidation is the best.

To move ahead in 2019 on an even stronger footing?

Our efforts are already focused on 2019 …While the 2018 program is relatively modest in terms of launches, despite a few noteworthy initiatives, in particular flankers for some of our brands, we have been preparing for some time for an extremely rich 2019 line-up of major launches. And for Montblanc, Coach, Lanvin and Rochas… And also in 2020, for Jimmy Choo in particular…

The following two years will thus be extremely eventful and our teams are already fully focused on preparations for these many projects.

That is also why it was necessary for us to slow the pace in 2018.

You still have substantial cash resources but have not completed an acquisition in nearly 3 years…

With a cash position of €176 million, we do indeed have the resources to seriously consider potential acquisition opportunities. We are constantly considering such options, though always based on the same criteria: Namely, it must make real sense!

The last two acquisitions completed in 2015, Coach and Rochas, accounted for a significant percentage of our first-half revenue, and reinforce our conviction every day in the relevance of our criteria. This means that while we will not make an acquisition simply to make an acquisition, we will continue to look very closely at the rare opportunities which emerge. The day we thus determine that an acquisition makes strategic sense, then we will act. And while I am unable to say precisely when this will be, I can however confirm that we intend to miss no opportunity. This is because our financial position gives us this option.

A word in closing?

Rather, a few words… For a number of years we have decided to support our launches and significantly increase our advertising investments. This strategy has paid off. Our sales are growing, we are continuing to add market share and our normalized operating margin has remained at a very high level of between 13.5% and 14%. We have a portfolio of very high quality and complementary brands which I am convinced will grow in the medium-term. It is thus an understatement if I say that we are very confident…

Philippe Benacin

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Market data on December 13th, 2018 at 17h35

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