PPR, the Group that owns Stella McCartney, Balenciaga and Gucci, posted stable increase in 2008 profits. Commenting on the results, François-Henri Pinault, Chairman and Chief Executive Officer, noted: “PPR posted satisfactory operating and financial performances in 2008, despite deteriorating market conditions quarter after quarter. Our Group has thus demonstrated a remarkable ability to respond and adapt to sudden and profound changes in its environment. Having gauged the impact of the crisis early on, the Group’s brands and companies implemented initial action plans that started yielding results in the second half of the year. In 2009, we will continue to use all available means to meet the challenges of an economy that remains uncertain. PPR will capitalise on its many assets: brand strength, geographical complementarity, presence in the most promising emerging markets, web leadership, as well as financial solidity and budgetary discipline. In 2009, the Group will intensify its action plans so as to build on its competitive advantages and strengthen its business lines.”
In 2008, PPR generated revenues of €20.2 billion. Sales grew by nearly 6% in reported terms and over 2% on a comparable Group structure and foreign exchange basis, following a record performance in 2007. In a context of declining consumer demand, revenues for the fourth quarter of 2008 were roughly unchanged in reported terms and down slightly (-1.5%) on a comparable basis, versus the fourth quarter of 2007.
The weight of the Group’s international activities continued to grow, representing 61% of total revenues in 2008, compared to 59% in 2007.
In 2008, PPR achieved further growth in the strategic e-commerce sector, with revenues up by more than 10% on a comparable basis, to €1.9 billion.
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On a pro forma basis (consolidating Puma and United Retail over 12 months in 2007) and at comparable exchange rates, PPR operating expenses grew at a slower pace than gross margin in 2008. This deceleration was particularly pronounced in the second half, underscoring the Group’s ability to adapt swiftly to its environment.
Recurring operating income amounted to €1.7 billion in 2008, up by more than 5% compared to 2007 reported numbers. The recurring operating income margin was stable compared to the prior year, at 8.5% of revenues.
This increase was driven by growth in recurring operating income at CFAO (+19%) and at Gucci Group brands (over 9% in reported terms and nearly 26% on a comparable basis), which for the first time all posted positive recurring operating income.
About PPR, the company develops a portfolio of high-growth global brands. Through its Consumer and Luxury brands, PPR generated sales of €20.2 billion in 2008. The Group is present in 90 countries with approximately 88,000 employees.
To explore the universe of PPR brands go to www.ppr.com.
Image: Balenciaga SS09