1H 2009/2010 Results Presentation 23 November 2009 1
1H 2009/10 Results Key Facts Consolidated Sales of 56,3m, -14.8% YoY Retail Sales of 14.7m, +118.3% YoY Wholesale Sales of 41.4m, -29.7% YoY EBITDA of - 6.9m (-12.2% margin) EBIT of - 9.2m (-16.4% margin) Group net loss of - 9.6m Net debt of 54.0m (vs net Debt 51.5m as of June 09) Note: Fiscal year-end as of March 31 Advertising Campaign Sharon Stone for Damiani for the humanitarian project to help african people 2
Sales Breakdown by Channel m 1H 08/09 50 0 10 20 1H 09/10 30 40 50 60 m %Growth constant ex. rates %Growth current ex. rates Wholesale 58.9 Wholesale 41.4 (30.9%) (29.7%) Retail 6.7 Retail 14.7 115.6% 118.3% Retail & Wholesale 65.7 Retail & Wholesale 56.2 (15.8%) (14.5%) % on Core Sales of 65.7m* % on Core Sales of 56.2m Wholesale 89.7% Retail 10.3% Wholesale 73.8% Retail 26.2% Note: Fiscal year-end as of March 31 3
Sales Breakdown by Geographical Area 0 10 20 1H 08/09 30 40 50 60 0 10 20 1H 09/10 30 40 50 60 m m %Growth constant ex. rates %Growth current ex. rates Italy 43.6 Italy 43.0 (1.5%) (1.5%) Americas 4.2 Americas 2.5 (46.0%) (40.8%) Japan 4.5 Japan 3.3 (40.0%) (26.7%) Rest of the World 13.4 Rest of the World 7.4 (45.0%) (44.6%) Italy 66.4% % on Core Sales of 65.7m America 6.3% Japan 6.9% Rest of World 20.4% % on Core Sales of 56.2m Italy 76.5% America 4.4% Japan 5.9% Rest of World 13.2% Note: Fiscal year-end as of March 31 4
Sales Breakdown by Brand 0 10 20 1H 08/09 30 40 50 60 0 10 20 1H 09/10 30 40 50 60 m m % Growth constant ex. rates % Growth current ex. rates Damiani 36.3 Damiani 21.8 (42.4%) (40.0%) Other brands 29.4 Other brands 34.4 (16.9%) (16.9%) Total 65.7 Total 56.2 (15.8%) (14.5%) % on Core Sales of 65.7m % on Core Sales of 56.2m Other Brands 44,7% Damiani 55,3% Other Brands 61.2% Damiani 38.8% Note: Fiscal year-end as of March 31 5
Income Statement m 1H 2008/2009 1H 2009/2010 Total Revenues 66.1 56.3 % change (14.8%) % at constant exchange rates (16.1%) Raw materials and parts (25.9) (27.4) Service Costs (24.3) (20.9) Personnel Costs (13.0) (12.7) Other Operating Costs 1.7 (2.0) Total Operating Expenses (61.6) (63.2) EBITDA 4.5 (6.9) Margin (% of Revenues) 6.8% (12.2%) Depreciation and Amortisation (1.6) (2.3) EBIT (2.8) Margin (% of Revenues) 4.3% (16.4%) Net Financial Income / (Expenses) 1.2 (1.0) PBT 4.1 (10.2) Margin (% of Total Revenues) 6.1% (18.1%) Taxes (2.3) 0.7 (9.2) Minorities 0.0 0.03 Net Income/(loss) of the Group 1.8 (9.6) Margin (% of Total Revenues) 2.7% (16.9%) 6
Net Operating Working Capital ( m) 104.8 107.4 121.2 122.3 54.5 36.0 (70.9) (50.9) March 31, 2009 September 30, 2009 Accounts Receivables Accounts Payables Inventory Note: Fiscal year-end as of March 31 7
Balance Sheet ( m) March 31, 2009 September 30, 2009 Net Working Capital Net Tangible Assets Net Intangible Assets Net Financial Assets and Other Severance Staff, Provisions & Others Net Capital Employed Group Shareholders' Equity Minorities Shareholders' Equity & Minorities Net Debt Long term debt Short term debt/(cash) Net Financial Debt and Shareholders' Equity 115.2 26.6 14.2 4.8 7.4 168.2 128.3 1.5 129.8 38.4 22.0 25.9 168.2 117.2 25.8 13.7 4.9 9.8 171.4 115.9 1.5 117.5 54.0 42.5 17.5 171.4 Net debt recently restructured with long-term debt at fixed rate 8
Cash Flow Statement m 1H 2008/2009 1H 2009/2010 Operating Cash Flow (8.8) (11.6) Capex (3.2) (1.1) Other (Investments)/Disposals (5.0) (0.2) Free Cash Flow (17.0) (12.9) Cash Flow from Financing Activities (11.8) 9.3 Cash Flow of the Period (28.8) (3.5) Cash and Cash Equivalents at Beginning of Year 52.8 9.5 Cash and Cash Equivalents at End of Year 24.0 6.1 9
Stores Network 1H2008/09 1H2009/10 DOS Franchising Total Mono-brand stores DOS Franchising Total Mono-brand stores Italy 31 1 32 Italy 28 1 29 International 10 35 45 International 8 40 48 Total 41 36 77 Total 36 41 77 New Openings: London - Old Bond street (Damiani), Mumbai (Bliss) Bliss Mumbai Damiani Londra Bliss Panama Damiani Instanbul airport
Improving Group s efficiencies Strict control on variable costs Cost saving in 1Half 09/10: around 3 mln on service costs and personnel costs (1) Expected costs saving in FY09/10 around 5mln (1) Rationalisation of DOS network New markets openings New sales force and marketing organisation Strong committment of the Management Management stock option plan implemented with option paid by key managers Note: (1) Excluding Rocca 11
The Clean Water project with Sharon Stone to help african people The project revolves around the decision by the Damiani family and by Sharon Stone to build wells for clean water in African villages and where it is necessary thus contributing to reducing the very high rate of mortality, especially amongst children. Damiani worked with Sharon Stone to design the jewellery line Sharon Stone for Damiani, that includes several collections and that it is characterized by concept based on the use of rough diamonds. 12
Other initiatives: licensing and commercial agreements FERRARI Licensing agreement valid through 2012 for jewelry and luxury objects with the Ferrari logo. Available in multi-brand stores in the Rocca network, other selected jewelry stores and Ferrari Stores worldwide MASERATI Licensing agreement valid through 2012 GIANFRANCO FERRE Agreement for the production of a new line of fine jewellery under the label Gianfranco Ferré JIL SANDER Licensing agreement with Jil Sander Group to create a line of jewellery and watches MAISON MARTIN MARGIELA Production Agreement VICTORIA S SECRET Creation of the Harlequin Fantasy Bra for Victoria s Secret a masterpiece valued at $3 million with 2,355 diamonds for a total of nearly 150 carats All these projests will allow Damiani to: Increase Group s sales also leveraging on co-marketing and customers sharing initiatives in Italy and abroad Exploit operating synergies, given that all these projects will use the existing Damiani s platform. Furthermore they are all safe contracts 13
International sales: Birks & Mayors Birks & Mayors Inc is a leading North American high-end watches & jewellery retailer listed on the NYSE Amex which operates with a network of 67 stores Signed a 5 years distribution agreement with Birks & Mayors All Damiani Group s brands will enjoy a highly visible position within the Birks and Mayors stores The two companies will coordinate marketing plans 14
Company Information Share Information (*) Ownership Structure (*) Share Price: 1.03 Number of Shares: 82.6m Market Cap: 86m Silvia Damiani 5.7% Giorgio Damiani 6.1% Guido Damiani 5.0% Leading Jewels 56.4% Investor Relations Market 20.0% Paola Burzi Email: paolaburzi@damiani.it Tel: +39 02-46716340 Website: www.damiani.com Buyback Shares 6.8% Note: *as of 20 November 2009 **Post IPO Guido Damiani has the majority ***Includes purchase buyback shares of 5,619,609 shares 15
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