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QUARTERLY REPORT ON OPERATIONS AT MARCH 31st 2013
Group
TOD’S Group – Quarterly Report
March 31 s t 2013
Table of contents
TABLE OF CONTENTS
Company’s data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Corporate Governance bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
TOD’S Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Group’s organizational chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Distribution network as of March 31s t
2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Key consolidated financial f igures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
REPORT ON OPERATIONS ................................................................ .......................... 8
Group’s activity .......................................................................................................... 9
Group’s brands ........................................................................................................... 9
Foreign currency markets .......................................................................................... 10
Main events and operations during the period .......................................................... 11
Group’s results in Q1 2013 ........................................................................................ 12
Significant events occurring after the end of the period ........................................... 18
Business outlook ........................................................................................................ 18
Guidelines for preparation of the Quarterly Report ................................................... 19
Accounting policies .................................................................................................... 19
Alternative indicators of performances ..................................................................... 20
Scope of consolidation ............................................................................................... 21
Declaration pursuant to Article 154bis (2) of the Consolidated Law on Financial
Intermediation ........................................................................................................... 21
TOD’S Group – Quarterly Report
March 31 s t 2013
1 Company’s data
Company’s data
Registered office
TOD’S S.p.A.
Via Fil ippo Della Valle, 1
63811 Sant'Elpidio a Mare (Fermo) - Italy
Tel. +39 0734 8661
Legal data Parent company
Share Capital resolved euro 61,218,802
Share Capital subscribed and paid euro 61,218,802
Fiscal Code and registration number on Compa ny Register of Court of Fermo: 01113570442
Registered with the Chamber of Commerce of Fermo under n. 114030 R.E.A.
Offices and Showrooms Dusseldorf – Kaistrasse, 2
Hong Kong – 35/F The Lee Gardens, 33 Hysan Avenue, Causeway Bay
London – Old Bond Street, 16
Milan - Corso Venezia, 30
Milan - Via Savona, 56
Milan - Via Serbelloni, 1-4
Milan - Via della Spiga, 22
New York - 450, West 15t h
Street
Paris – Rue Royale, 20
Seoul – 11/F, 609 Eonju-ro, Gangnam-Gu
Shanghai - 1717 Nanjing West Road, Wheelock Square 45/F
Tokyo – Omotesando Building, 5-1-5 Jingumae
Production facilities Comunanza (AP) - Via Merloni, 7
Comunanza (AP) - Via S.Maria, 2-4-6
Sant'Elpidio a Mare (FM) - Via Fil ippo Della Valle, 1
Bagno a Ripoli, Loc. Vallina (FI) - Via del Roseto, 60
Bagno a Ripoli, Loc. Vallina (FI) - Via del Roseto, 50
Tolentino (MC) - Via Sacharov, 41/43
TOD’S Group – Quarterly Report
March 31 s t 2013
2 Corporate Governance bodies
Corporate Governance bodies
Board of directors ( 1)
Diego Della Valle Chairman
Andrea Della Valle Vice - Chairman
Luigi Abete
Maurizio Boscarato
Luigi Cambri
Luca Cordero di Montezemolo
Emanuele Della Valle
Fabrizio Della Valle
Emilio Macellari
Pierfrancesco Saviotti
Stefano Sincini
Vito Varvaro
Executive Committee Diego Della Valle Chairman
Andrea Della Valle
Fabrizio Della Valle
Emilio Macellari
Stefano Sincini
Vito Varvaro
Compensation Luigi Abete Chairman
Committee Luigi Cambri
Pierfrancesco Saviotti
Control and Risk Luigi Cambri Chairman
Committee Maurizio Boscarato
Pierfrancesco Saviotti
Independent Directors Pierfrancesco Saviotti Chairman
Committee Luigi Abete
Luigi Cambri
Board of statutory ( 2 )
Giulia Pusterla Chairman
Auditors Enrico Colombo Acting stat. auditor
Fabrizio Redaelli Acting stat. auditor
Myriam Amato Substitute auditor
Gilfredo Gaetani Substitute auditor
Independent Auditors ( 3)
PricewaterhouseCoopers S.p.A.
Manager charged with preparing Rodolfo Ubaldi
a company’s financial report
( 1 ) Term of the off ice: 20 12-2014 (resolut ion of the Shareholders ’ meeting as of Apri l 19 t h , 2012)
( 2 ) Term of the off ice: 2013-2015 (resolut ion of the Shareholders ’ meeting as of Apri l 19 t h , 2013) ( 3 ) Term of the off ice: 2012 -2020 (resolut ion of the Shareholders ’ meeting as of Apri l 19 t h , 2012)
TOD’S Group – Quarterly Report
March 31 s t 2013
3 Tod’s Group
TOD’S Group
TOD’S S.p.A. Parent Company, owner of TOD’S, HOGAN and FAY brands and l icensee of ROGER VIVIER brand.
Del.Com. S.r.l. Subholding for operation of national subs idiar ies and DOS in I taly . TOD’S International B.V. Subholding for operation of international subs idiar ies and DOS in The Netherlands. An.Del. Usa Inc. Subholding for operation of subs idiar ies in the United States. Del.Pav S.r.l. Company that operates DOS in I taly . Filangieri 29 S.r.l. Company that operates DOS in I taly . Gen.del. SA Company that operates DOS in Switzer land. TOD’S Belgique S.p.r.l. Company that operates DOS in Belg ium. TOD’S Deutschland Gmbh Company that distr ibutes and promotes products in Germany and manages DOS in Germany. TOD’S Espana SL Company that distr ibutes and promotes products in Spain and manages DOS in Spain . TOD’S France Sas Company that distr ibutes and promotes products in France and manages DOS in France. TOD’S Luxembourg S.A. Company that operates DOS in Luxembourg. TOD’S Hong Kong Ltd Company that distr ibutes and promotes products in Far East and South Pacif ic and manages DOS in Hong Kong. TOD’S Japan KK Company that operates DOS in Japan. TOD’S Korea Inc. Company that promotes products in Korea. TOD’S Macao Ltd Company that
operates DOS in Macao. TOD’S Retail India Private Ltd Company that operates DOS in India. TOD’S (Shanghai) Trading Co. Ltd
Company that operates DOS in China.
TOD’S Singapore Pte Ltd Company that operates DOS in S ingapore. TOD’S UK Ltd Company that distr ibutes and promotes products in Great Br itain and manages DOS in Great Br itain. Webcover Ltd Company that operates DOS in Great Br itain. Cal.Del. Usa Inc. Company that operates DOS in Cal ifornia (USA). Deva Inc. Company that distr ibutes and promotes products in North America, and manages DOS in the State of NY (USA). Flor. Del. Usa Inc. Company that operates DOS in F lor ida (USA). Hono. Del. Inc. Company that operates DOS in Hawai (USA). I l. Del. Usa Inc. Company that operates DOS in I ll inois (USA). Neva. Del. Inc. Company that operates DOS in Nevada (USA). Or. Del. Usa Inc. Company that operates DOS in Cal ifornia (USA). TOD’S Tex. Del. Usa Inc. Company that operates DOS in Texas (USA). E-TOD’S Inc. E-commerce company for US market . Holpaf B.V. Real estate company. Alban.Del Sh.p.k. Production company. Sandel SA Not operating company. Un.Del. Kft Production company. Re.Se.Del. S.r.l. Company for services. TOD’S Brasil Ltda Company that operates DOS in Brazi l .
TOD’S Group – Quarterly Report
March 31 s t 2013
4 Tod’s Group
Group’s organizational chart
TOD’S S.p.A.
TOD’S International BVAmsterdam – The Netherlands
S.C. - Euro 2,600,200
An.Del. USA Inc.New York U.S.A.
S.C. - Usd 3,700,000
Del.Com S.r.l.
S.Elpidio a Mare - ItalyS.C. - Euro 31,200
TOD’S Hong Kong Ltd
Hong KongS.C. - Usd 16,550,000
TOD’S UK Ltd
London – Great BritainS.C. - Gbp 350,000
TOD’S Belgique S.p.r.l.
Bruxelles - BelgiumS.C. - Euro 300,000
TOD’S Espana SL
Madrid – SpainS.C. - Euro 468,539.77
TOD’S Japan KK
Tokio - JapanS.C. - Jpy 100,000,000
TOD’S Korea Inc
Seoul - KoreaS.C. Won 1,600,000,000
TOD’S Singapore LtdSingapore
S.C. - Sgd 300,000
Un.Del KftTata - Hungary
S.C. - Huf 42,900,000
TOD’S Luxembourg S.A.Luxembourg
S.C. Euro 31,000
TOD’S France SasParis - France
S.C. - Euro 780,000
TOD’S Deutschland GmbhDusseldorf - GermanyS.C. - Euro 153,387.56
Cal.Del. USA Inc.
Beverly Hills, Ca U.S.A.S.C. - Usd 10,000
TOD’S Tex. Del. Inc.
Dallas, Tx U.S.AS.C. - Usd 10,000
Deva Inc.Wilmington, De U.S.A.
S.C. - Usd 500,000
Flor.Del. USA Inc.Tallahassee, Fl U.S.A.
S.C. - Usd 10,000
Hono.Del. Inc.Honolulu, Hi U.S.A.
S.C. - Usd 10,000
Del.Pav. S.r.l.
S.Elpidio a Mare - ItalyS.C. - Euro 50,000
Re.Se.Del. S.r.l.
S.Elpidio a Mare - ItalyS.C. - Euro 25,000
Filangieri 29 S.r.l.S.Epidio a Mare - Italy
S.C. - Euro 100,000
TOD’S (Shanghai) Trading Co. LtdShanghai- China
S.C. Usd 16,000,000
TOD’S India Retail Private LtdMumbai – India
S.C. Inr 193,900,000
Webcover LtdLondon – Great Britain
S.C. - Gbp 2
Il.Del. USA Inc.Springfield, Il U.S.A.
S.C. - Usd 10,000
Neva.Del. Inc.
Carson City, Nv U.S.A.S.C. - Usd 10,000
Or.Del. USA Inc.
Sacramento, Ca U.S.A.S.C. - Usd 10,000
100%
100%
100%
99%
90%
100%
100%
100%
100%
50% 50%
Gen.Del. SAZurich – Switzerland
S.C. Chf 200,000
Sandel SASan Marino
S.C. - Euro 258,000
1%
E-TOD’S Inc.Wilmington, De U.S.A
S.C. - Usd 200100%
ALBAN.DEL Sh.p.kTirana – Albania
S.C. – Euro 720,000
100%
1% 99%
10%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
50%
100%
1%
100% 100%
Holpaf B.V.Amsterdam – The Netherlands
S.C. - Euro 5,000,000100%
TOD’S Macao Lda
MacaoS.C. Mop 20,000,000
TOD’S Brasil Ltda.
Sao Paulo - BrazilS.C. - Brl 8,500,000
90% 10%
TOD’S Group – Quarterly Report
March 31 s t 2013
5 Distr ibution network
Distribution network as of March 31s t
2013
Total
Greater China (**)
China
Hong Kong
Macau
Taiwan
Total
Rest of the World
Saudi Arabia
Bahrain
U.A.E.
Kuwait
Lebanon
(D)=DOS (F)=FRANCHISED STORES
Europe (D) (F)
Italy 44 4
Belgium 1
France 14 1
Germany 10
Great Britain 5
Greece 5
Luxembourg 1Netherlands 1
Portugal 1
Russia 3
Spain 2 1
Switzerland 3
Turkey 1
Total 81 16
Greater China (**) (D) (F)
China 45 1
Hong Kong 11 1Macau 1 1
Taiwan 19
Total 57 22
Americas (*) (D) (F)
U.S.A. 14 2Brazil 1
Total 15 2
Rest of the World (D) (F)
Saudi Arabia 2
Bahrain 2
U.A.E. 7
Kuwait 3
Lebanon 2
Qatar 1
Japan 28 1
Korea 14 6
Philippines 2India 1
Indonesia 4
Malaysia 3
Singapore 2 1
Thailand 3
Guam 1
Azerbaijan 1
Total 45 39
(*) Start ing with this quarter ly report on operations at March 31 s t , 2013 , the region “North America” has been replaced by “Americas”, inc luding the whole American continent (Northern and Southern America) . (**) Start ing with this quarter ly repo rt on operations at March 31 s t , 2013, we g ive separate disc losure of the region “Greater China”, which inc ludes: mainland China, Hong Kong, Macao and Taiwan.
DOS, 2013 new openings Greater China Chengdu (China) Ningbo (China) Shanghai (China)
Americas San Paolo (Brazi l) Europe Strasbourg (France) Paris (France )
Franchised stores, 2013 new openings
Rest of the World Bangkok (Thailand)
For a complete l ist of retail outlets operated by the DOS and franch ising network, reference should be made to the corporate web site: www.todsgroup.com
TOD’S Group – Quarterly Report
March 31 s t 2013
6 Key consolidated financial f igures
Key consolidated financial figures
P&L Key figures (euro millions)
Q1 2013 Q1 2012 Q1 2011 Q1 2010
Revenues 253.5 263.2 243.7 208.1
EBITDA 63.6 25.1% 66.7 25.3% 65.1 26.7% 48.7 23.4%
EBIT 53.4 21.1% 57.3 21.8% 55.9 23.0% 41.1 19.7%
Main Balance Sheet indicators (euro millions)
3.31.13 12.31.12 3.31.12
Net Working Capital (*) 300.3 278.5 273.9
Net financial position 131.7 103.7 110.3
Capital expenditures 9.4 49.9 14.7
(*) Trade receivable + inventories - trade payable
Stock performance (euro)
The Group's employees
3.31.13 12.31.12 3.31.12 3.31.11
Year to date 3,968 3,878 3,643 3,549
Legenda:
Execut. = Executive
White Col. = White Collar
Blue Col. = Blue Collar
Q1 2013 Revenues - % by Brand
Q1 2013 Revenues - % by market
Q1 2013 Revenues - % by Product
Employees 2013: composition
TOD'S55,8%
HOGAN
27,9%
FAY5,9%
ROGER VIVIER10,3%
Other0,1%
Italy39,0%
Europe19,9%
Ameri cas
7,7%Greater China22,5%
Rest of the
World 10,9%
Shoes78,2%
Leather goods14,9%
Apparel6,8%
Other0,1%
DIR1%
IMP67%
OP32%
90,00
95,00
100,00
105,00
110,00
115,00
120,00
January - March 2013
TOD’S Group – Quarterly Report
March 31 s t 2013
7 Highlights of results
Highlights of results
Revenues: revenues totalled 253.5 mill ion euros,
decreased by 3.7% from Q1 2012. Excellent sales
performance by DOS network (+16.8%).
EBITDA: amounting to 63.6 mill ion euros in Q1
2013, EBITDA represents 25.1% on Group sales ( in
Q1 2012: 66.7 mill ion euros).
EBIT: amounting to 53.4 mill ion euros ( in Q1 2012:
57.3 mill ion euros), EBIT represents 21.1% on
Group sales.
Net financial position (NFP): Group liquid assets
amount to 191.2 mill ion euro at March 31s t
, 2013.
Net financial position was 131.7 mill ion euros at
the same date (110.3 mill ion euros at March 31s t
2012).
Capital expenditures: amounting to 9.4 mill ion
euros in Q1 2013 (14.7 mill ion euros in Q1 2012).
Distribution network: at March 31s t
, the single
brand distribution network comprised 1 98 DOS
(increased by 19 units compared to March 31s t
,
2012) and 79 franchised stores.
Revenue (Euro mln)
EBITDA (Euro mln)
EBIT (Euro mln)
Net financial position (Euro mn)
248.8 253.5 263.2243.7
208.1
Q1 2013 comp. ex. rate basis
Q1 2013 Q1 2012 Q1 2011 Q1 2010
58.263.6
66.7 65.1
48.7
Q1 2013 comp. ex. rate basis
Q1 2013 Q1 2012 Q1 2011 Q1 2010
47.953.4
57.3 55.9
41.1
Q1 2013 comp. ex. rate basis
Q1 2013 Q1 2012 Q1 2011 Q1 2010
131.7
110.3
88.8
180.2
3.31.13 3.31.12 31.03.11 31.03.10
REPORT ON OPERATIONS
Group
TOD’S Group – Quarterly Report
March 31 s t 2013
9 Report on operations
Group’s activity
TOD’S Group operates in the luxury sector under its proprietary brands (TOD’S, HOGAN, and FAY)
and licensed brands (ROGER VIVIER). It actively creates, produces and distributes shoes, leather
goods and accessories, and apparel. The Company’s mission is to offer global customers top-
quality products that satisfy their functional requirements and aspirations.
Group’s brands
The TOD’S brand is known for shoes and luxury leather goods, with styles that have became icons
of modern living; Tod’s is known in the luxury goods sector as a symbol of the perfect
combination of tradition, quality and modernity. Each product is hand-crafted with highly-skil led
techniques, intended, after laborious reworking, to become an exclusive, recognisable, modern
and practical object. Some styles, l ike the Driving Shoe and the D-bag, are cherished by
celebrities and ordinary people worldwide, and have become icons and forerunners of a new
concept of elegance, for both women and men .
Begun in the 80s with shoe collections for wo men, men and children, the HOGAN brand now also
crafts various leather goods items. The H OGAN brand is distinctive for high quality, functionality
and design. Every product stems from a highly skil led design technique and is created using
quality materials with a particular passion for details and a search for perfection. H OGAN
products are the highest expression of a “new luxury” lifestyle. H OGAN is meant for someone
who cherishes the type of luxury associated with product excellence, innovative original desi gn
and consummate practicality. The Traditional and the Interactive shoe styles endure as
continuing “best sellers” .
TOD’S Group – Quarterly Report
March 31 s t 2013
10 Report on operations
FAY is a brand created in the mid 80s with a product range of high quality casual wear. The brand
is known for its quality craftsmanship, for the excellence of its materials, a meticulous attention
to craft details and its high functionality without s acrif icing style and quality. FAY products are
wearable everywhere: from the stadium to the office, in urban areas and in the countryside. The
l ine, which has seasonal men’s, women’s and junior’s collections, focuses on classic evergreen
styles, continuously modified and refreshed with innovative and recognisably eye -catching
design.
The Fabergé of shoes, and creator of the first stiletto heel in the 1950's, Roger Vivier designed
extravagant and luxuriously decorated shoes that he described as being “scu lptures.” Today, the
artistic heritage and excellent traditional roots of the Vivier fashion house have been revived .
Under the management of Creative Director Bruno Frisoni, Vivier’s work and vision endure. New
chapters are added to this unique life story every year, which goes beyond the world of footwear
to include handbags, small leather goods, jewellery and sunglasses .
Foreign currency markets
Average exchange rates for the first quarter of 2013, compared to figures for the same period of the
previous year, show a steady trend against the main currencies with which the Group operates, with
the exception of Japanese yen, weakened of 17.3% against the European currency.
TOD’S Group – Quarterly Report
March 31 s t 2013
11 Report on operations
-1.7-2.0
-0.7
-17.3
3.3
0.6 1.4
-0.7
(20)
(15)
(10)
(5)
0
5
CHF GBP HKD JPY KRW RMB SGD USD
Average exchange rateQ1 2013 vs 2012(change %)
Main events and operations during the period
The figures for 1Q 2013 were heavily influenc ed by the impact on sales resulting from the
strategy to streamline independent distribution initiated during the previous year, and especially
in Italy, given the difficult situation prevailing there. The principal aim of this strategic choice,
which has affected all brands, but whose effects were particularly noticeable on the revenue
performance of the HOGAN and FAY brands, the most heavily exposed to the Italian market and
the independent retailer channel, has been to maintain the exclusivity and positi oning of the
brands, as well as protection of the excellent quality of the receivables portfolio.
The effect was especially pronounced in the first quarter of the year, which is historically
characterised by the prevalence of the wholesale component on s ales, and reduced consolidated
revenue by 3.7% from the same period of the previous year.
Notwithstanding these factors, marginal income was not particularly impacted by revenue
performance, in consequence of the excellent results achieved on international markets, where
aggregate revenue grew by +20.5%, being driven by the excellent performance of Greater China
(+55.4%) and the Americas (+31%), and the positive sales results on the directly operated store
network, which reported high growth even in the fir st three months of 2013 (+16.8% compared
with the same period of 2012), again being driven by the Asian markets, on which all distributed
brands have posted double-digit growth rates.
Business development is sustained by the continued evolution of the Grou p e-commerce channel,
through the extension of the United States market, in addition to the Italian market and principal
European countries, while always taking a prudent approach to preserve brand integrity.
Group commitment to social responsibility is a lso continuing without interruption. The
Shareholders’ Meeting of the parent company TOD’S S.p.A. held on April 19t h
2013 resolved to
allocate about 1.5 mill ion euros, or 1% of the net profit realised by the Group in FY 2012, to a
special reserve to be used for promoting territorial solidarity projects .
TOD’S Group – Quarterly Report
March 31 s t 2013
12 Report on operations
Group’s results in Q1 2013
In the first quarter of 2013 , TOD’S Group generated sales totalling 253.5 mill ion euros, decreased
by 9.7 mill ion euros or 3.7% over figures for the same period of the previous yea r. Exchange-rate
effect was positive: maintaining cross rates constant, sales revenues would have a mounted to
248.8 mill ion euros.
EBITDA and EBIT amounted respectively to 63.6 mill ion euros and 53.4 mill ion euros and they
represent respectively 25.1% and 21.1% of total consolidated sales revenues . Operating margins
are substantially in l ine with the same period of the previous year, when EBITDA and EBIT were
25.3% and 21.8% of consolidated sales revenue.
Euro 000's
FY 12 Main economic indicators Q1 2013 Q1 2012 Change %
963,132 Sales revenues 253,519 263,174 (9,655) (3.7)
250,167 EBITDA 63,635 66,704 (3,069) (4.6)
(41,330) Deprec., amort., write-downs and adances (10,269) (9,440) (828) 8.8
208,837 EBIT 53,366 57,264 (3,898) (6.8)
Foreign exchange impact on revenues (4,767)
Adjusted ricavi 248,751 263,174 (14,422) (5.5)
Foreign exchange impact on operating costs (678)
Adjusted EBITDA 58,190 66,704 (8,514) (12.8)
Foreign exchange impact on deprec.& amort. (45)
Adjusted EBIT 47,876 57,264 (9,388) (16.4)
EBITDA % 25.1 25.3
EBIT % 21.1 21.8
Adjusted EBITDA % 23.4 25.3
Adjusted EBIT % 19.2 21.8
(Euro/000)
Euro 000's
3.31.12 Main Balance Sheet indicators 3.31.13 12.31.12 Change
273,891 Net Working Capital (*) 300,339 278,498 21,841
110,313 Net financial position 131,746 103,741 28,005
14,735 Capital expenditures for tangible and intangible 9,430 49,895 (40,465)
(*) Trade receivable + Inventories - Trade payable
Revenues. Consolidated sales were 253.5 mill ion euros in the first quarter of 2013, down 3.7%
from Q1 2012. At constant exchange rates, meaning by using Q1 2012 average exchange rates,
sales would have been 248.8 mill ion euros, down 5.5% from Q1 2012.
TOD’S Group – Quarterly Report
March 31 s t 2013
13 Report on operations
The DOS network posted very good results; revenues through DOS globally amounted to 132.3
mill ion euros in Q1 2013, up 16.8% from Q1 2012 (+13.5% at constant exchange rates), driven by
the solid organic growth and by the widening of the DOS network.
The Same Store Sales Growth (SSSG) rate, calculated as the worldwide average of sales growth
rates at constant exchange rates registered by the DOS already existing as of January 1st, 2012,
was 5.1% for the first 19 weeks of 2013 (from January 1st to May 12th, 2013).
As of March 31st, 2013 the Group’s distribu tion network was composed by 198 DOS and 79
franchised stores, compared to 179 DOS and 68 franchised stores as of the end of March 2012 .
In the first quarter of 2013, TOD’S sales were 141.6 mill ion euros, up 3% from Q1 2012 (+0.6% at
constant exchange rates). The HOGAN brand total led 70.8 mill ion euros of sales in Q1 2013,
compared to 89.6 mill ion euros of the same period of 2012. As already reminded, the brand’s
performance in Italy is negative, mostly due to the already commented rationalization of the
wholesale distribution; in the same time, the brand is achieving positive results abroad, mainly in
the Asian markets, where its international expansion is currently focused .
In Q1 2013, revenues
to third parties
totalled 121.2 mill ion
euros; the 19.1%
difference compared
to the same period of
2012 is due to the
already commented
rationalization of the
independent
distribution mainly in
Italy.
(Euro mn) Q1 2013 % Q1 2012 % var. ass. var. %DOS 132.3 52.2 113.3 43.1 19.0 16.8Third Parties (WS) 121.2 47.8 149.9 56.9 (28.7) (19.1)Totale 253.5 100.0 263.2 100.0 (9.7) (3.7)
DOS52,2%
Third Parties (WS)
47,8%
DOS DOS
Third Parties (WS)
Third Parties (WS)
020406080
100120140160180200220240260
Q1 2013 Q1 2012
TOD’S Group – Quarterly Report
March 31 s t 2013
14 Report on operations
results achieved in the last quarters, confirming its growth as one of the most prestigious brands
of luxury shoes and accessories in the more exclusive segment of luxury goods in the world. In Q1
2013, its sales totalled 26 mill ion euros, more than doubled compared to the same period of 2012
(+91.7% at constant exchange rates) .
Sales of shoes tota lled 198.2 mill ion euros in Q1 2013, up 1.2% from Q1 2012 ( -0.8% at constant
exchange rates), thus confirming the undisputed Group’s leadership in the core business of
implemented on the wholesale channel; on the contrary, the performance of this product
category is positive in the DOS channel .
In Q1 2013, sales of apparel were 17.3 mill ion euros; the difference compared to the same period
of 2012 broadly reflects the already commented performance of the FAY brand.
In Q1 2013, sales of
the FAY brand, which
are mainly registered
in Italy and through
the wholesale channel,
were 14.9 mill ion
euros, compared to 23
mill ion euros of the
same period of 2012.
Finally, ROGER VIVIER
is repeating also this
year the excellent
(Euro mn) Q1 2013 % Q1 2012 % var. ass. var. %TOD'S 141.6 55.8 137.5 52.2 4.1 3.0HOGAN 70.8 27.9 89.6 34.1 (18.8) (21.0)FAY 14.9 5.9 23.0 8.7 (8.1) (35.2)RV 26.0 10.3 12.9 4.9 13.1 101.5Other 0.2 0.1 0.2 0.1 0.0 n.s.Totale 253.5 100.0 263.2 100.0 (9.7) (3.7)
TOD'S55,8%
HOGAN27,9%
FAY5,9%
RV10,3%
TOD'S TOD'S
HOGAN HOGAN
FAYFAY
RV RV
020406080
100120140160180200220240260
Q1 2013 Q1 2012
shoes. Sales of leather
goods and accessories
globally amounted to
37.7 mill ion euros in
Q1 2013. The 5.5%
difference compared
to the same period of
2012 (-7.6% at
constant exchange
rates) is mainly due to
the impact of the
rationalization
TOD’S Group – Quarterly Report
March 31 s t 2013
15 Report on operations
In the first quarter of 2013, domestic sales were 98.9 mill ion euros; the difference compared to
the same period of 2012 is mainly due to the already commented rationalization of the wholesale
2013, up 31% from Q1 2012 (+25.6% at constant exchange rates). Outs tanding results in both the
channels (DOS and wholesale), as a signal of the huge growth potential of this market for the
Group. Outstanding growth in Greater China during the first quarter of 2013: 55.4% or 44.2% at
constant exchange rates. T he Group’s sa les amounted to 57.2 mill ion euros in Q1 2013 and
represented 22.5% of consolidated sales as of March 31st, 2013. Finally, in the remaining area
“Rest of the World”, the Group’s sales tota l led 27.6 mill ion euros in Q1 2013, up 13.5% from Q1
2012 (+15% at constant exchange rates) .
O p e r a t i n g r e s u l t s . EBITDA was 63.6 million euros in Q1 2013, and represents 25.1 % of consolidated
revenues. The comparable figure for Q1 2012 was 66.7 million euros, or 25.3 % of sales. On a
comparable exchange rate basis, EBITDA would have been 58.2 million euros, or 23.4% of sales.
distribution. In the rest
of Europe, the Group’s
performance was slightly
negative; in this area
revenues totalled 50.4
mill ion euros in Q1 2013
(-3.8% compared to Q1
2012); The American
market confirmed its
solid double-digit
growth; sales total led
19.4 mill ion euros in Q1
(Euro mn) Q1 2013 % Q1 2012 % var. ass. var. %Italy 98.9 39.0 134.9 51.3 (36.0) (26.7)Europe 50.4 19.9 52.4 19.9 (2.0) (3.8)Americas 19.4 7.7 14.8 5.6 4.6 31.0Greater China 57.2 22.5 36.8 14.0 20.4 55.4Rest of the World 27.6 10.9 24.3 9.2 3.3 13.5Totale 253.5 100.0 263.2 100.0 (9.7) (3.7)
Italy39,0%
Europe19,9%
Americas
7,7%
Greater China22,5%
Rest of the
World10,9%
ItalyItaly
Europe
EuropeAmericas
AmericasGreater China
Greater China
Rest of the World
Rest of the World
020406080
100120140160180200220240260
Q1 2013 Q1 2012
TOD’S Group – Quarterly Report
March 31 s t 2013
16 Report on operations
Euro 000'sQ1 2013 Q1 2012 FY 12
Revenues
Sales Revenues 253,519 263,174 963,132
Other revenues and income 2,394 3,059 22,060
Total revenues and income 255,913 266,233 985,192
Operating Costs
Change in inventories of work in prog. and finis. goods 4,276 4,900 33,456
Cost of raw materials, supplies and materials for cons. (75,445) (77,292) (282,779)
Costs for services (53,466) (65,589) (226,049)
Costs for use of third party assets (23,538) (18,975) (85,747)
Costs of labour (37,320) (34,929) (143,004)
Other operating charges (6,785) (7,644) (30,902)Total Operating costs (192,278) (199,529) (735,025)
EBITDA 63,635 66,704 250,167
Amortisation, depreciation and write-downs
Amortisation of intangible assets (2,090) (2,229) (8,935)
Depreciation of tangible assets (7,462) (7,011) (29,154)
Other adjustment (246)
Total amortisation, depreciation and write-downs (9,552) (9,240) (38,335)
Provisions (717) (200) (2,995)
EBIT 53,366 57,264 208,837
After charging about 9.6 mill ion euros for depreciation and amortisa tion, EBIT in January-March
2013 was 53.4 mill ion euros and represents 21.1% of consolidated sales. In Q1 2012, EBIT was
57.3 mill ion euros, equal to 21.8% of consolidated sales. On a comparable exchange rate basis,
EBIT would have been 47.9 mill ion euros, or 19.2 % of sales.
In Q1 2013 Group operating profit benefits from the continuing increase of contribution margin,
caused by both the most favourable geographical composition of revenue and greater importanc e
of sales from DOS network in respect of last quarter, especially performed in geographical areas
with higher margins (Greater China and USA). Margins increase was absorbed by the evolution of
some type of costs related to the business develop ment. In particular, costs for the use of third
party assets (rents for locations and royalties for l icenses) increased from 19.0 mill ion euros,
registered during the first three months of 2012, to 23.5 mill ion euros of the current quarter,
achieving a percentage on revenue for the first three months of 2013 equal to 9.3% (last quarter
was 7.2%). This increase is mainly related to sales growth of direct distribution network in Asian
markets where the retail distribution model is mainly characterized by variable rents on sales.
Group headcount continued to grow, rising by 325 persons in respect to the previous period
(from 3,643 employees to 3,968 at March 31s t
, 2013). The total cost for personnel was 37.3
mill ion euros (34.9 mill ion euros in Q1 2012), growing by 6.8 %. The increase is mainly related to
headcount growth for the support of distribution network. Personnel costs as a percentage of
sales rose from 13.3% in Q1 2012 to 14.7% in Q1 2013 .
TOD’S Group – Quarterly Report
March 31 s t 2013
17 Report on operations
Capital expenditures. Capital expenditure totalled 9.4 mill ion euros in Q1 2013 (14.7 mill ion
euros in Q1 2012). Expenditures dedicated to the DOS network totalled about 4.6 mill ion euros,
and they relates to the sett ing up of new DOS. The
remaining capital expenditures made during the
period covered not only normal modernisation of
structures and industrial equipment (mainly forms,
lasts and moulds), but also acquisitions for
software development.
INVESTMENT BY ALLOCATION
DOS49%
Prod.20%
Other31%
The net financial position. At the end of the quarter under consideration, net f inancial position
totalled 131.7 mill ion euros, increased by 28,0 mill ion euros in respect of the beginning of the
year (103.7 mill ion euros at December 31s t
, 2012), and it is composed by cash for 191.2 mill ion
euros and financial l iabilities for 59.5 mill ion euros.
3.31.12 3.31.13 12.31.12 Change
Current financial assets
180,177 Cash and cash equivalents 191,202 168,329 22,873
180,177 Cash 191,202 168,329 22,873
Current financial liabilities
(28,069) Current account overdrafts (25,621) (27,025) 1,404
(5,261) Current share of medium-long term financing (5,132) (5,540) 408(33,330) Current financial liabilities (30,753) (32,565) 1,812
146,847 Current net financial position 160,449 135,764 24,685
Non-current financial liabilities
(36,534) Financing (28,703) (32,023) 3,320
(36,534) Non-current financial liabilities (28,703) (32,023) 3,320
110,313 Net financial position 131,746 103,741 28,005
Net financial position Euro 000's
Positive effects on cash have been generated by net working capital reduction especially
considering that the typical f inancial trend of the business for the first quarter is generally
characterized by an absorption of l iquid assets necessary for f inancing the temporary growth of
net working capital, mainly related to the exposure versus independent customers , directly
consequence of wholesale revenue component which generates cash during the second quarter.
TOD’S Group – Quarterly Report
March 31 s t 2013
18 Report on operations
This result has been achieved also thanks to the contribution of a careful supply chain process
management which produced efficiency along the entire production chain .
3.31.12 3.31.13 12.31.12 Change
242,328 Inventories 274,554 265,389 9,165
210,816 Trade receivables 174,701 152,345 22,356
(179,254) Trade payables (148,916) (139,236) (9,680)
273,890 Net working capital (300,339) 278,498 21,841
Net working capital Euro 000's
At the financial level, the FY 2012 dividend coupon is scheduled to be paid on May 20t h
, as
approved by the Shareholders’ Meeting of the parent company TOD’S S.p.A. o n April 19t h
, 2013.
The dividend, totalling 82.6 mill ion euros, at the rate of 2.70 (two/70) per each of the 30,609,401
shares comprising the share capital at the payment date, will be paid to all the shareholders
entered on the Register of Shareholders at the coupon payment date.
Significant events occurring after the end of the period
There have not been any significant operating events affecting the Group’s activities since March
31s t
, 2013.
Business outlook
As expected the first quarter results are the natural consequence of the strategy adopted by the
Group in response to the market situation. Extreme prudence and caution in Italy are
accompanied by rapid international expansion. Special attention has been dedicated to the
Chinese and American markets , where the brands are proving to have strong potential. The Group
is growing consistently with the DNA of its brands, without compromising their prestige and
integrity. Customer appreciation of the Group’s products continues to grow, in recognition of
their quality and exclusivity.
Considering the good results of the DOS network and the trend of the orders’ backlog, the Group
may register growth in revenue and profits again this year .
TOD’S Group – Quarterly Report
March 31 s t 2013
19 Report on operations
Guidelines for preparation of the Quarterly Report
TOD’S Group Quarterly Report on Operations at March 31s t
, 2013 was prepared pursuant to
Article 154 ter (5) of the Consolidated Law on Financial Intermediation (“TUF”) introduced by
Legislative Decree 195/2007, in implementation of Directive 2004/109/EC (the “Transpare ncy
Directive”).
Quarterly report were approved by the Board of Directors of TOD’S S.p.A. on May 1 4t h
, 2013, and
on the same date that body authorized its publication.
Accounting policies
The accounting policies applied to prepare the financial f igures re ported on the Quarterly Report
at March 31s t
, 2013 was prepared by applying IAS/IFRS, issued by IASB and approved by the
European Union at the reporting date. IAS/IFRS refers to the International Accounting Standards
( IAS), International Financial Reporting Standards ( IFRS), and all interpretative documents issued
by the IFRIC (previously called the Standing Interpretations Committee).
The same accounting standards used to prepare the consolidated financial statements at
December 31s t
, 2012 were used to prepare this Report.
Preparation of the financial f igures reported on the Quarterly Report at March 31s t
, 2013 entails
making estimates and assumptions based on the management’s best valuation. If these estimates
and assumptions should change in future fr om the actual circumstances, they will obviously be
modified for the period in which those circumstances changed.
Specifically in regard to determination of eventual impairment losses affecting fixed assets,
complete tests are performed only when the annua l report is prepared, when all information as
might be necessary is available, unless there are indications that require immediate valuation of
eventual impairment losses or the occurrence of events that required repetition of the
procedure.
The rates appl ied for translation of the financial statements of subsidiaries using a functional
currency other than the currency used for consolidation, are il lustrated in the following table and
compared with those used in the previous period :
TOD’S Group – Quarterly Report
March 31 s t 2013
20 Report on operations
Exch. rates at
period end
Average
exch. rate
Exch. rates at
period end
Average
exch. rate
U.S. dollar 1,281 1,320 1,336 1,311
UK pound sterling 0,846 0,851 0,834 0,834
Swiss franc 1,220 1,228 1,205 1,208
Hong Kong dollar 9,942 10,238 10,371 10,172
Japanese yen 120,870 121,810 109,560 103,810
Hungarian forint 304,420 296,490 294,920 296,490
Singapor dollar 1,590 1,634 1,678 1,657
Korean WON 1.425,03 1.433,15 1.512,98 1.482,65
Macao Pataca 10,240 10,545 10,676 10,472
Chinese Renminbi 7,960 8,217 8,409 8,269
Indian Rupia 69,566 71,511 68,042 65,864
Brazilian Real 2,570 2,633 n.a. n.a.
Jan. - Mar. 2013 Jan. - Mar. 2012
Alternative indicators of performances
In order to strip the effects of changes in exchange rate s in respect to the average values o f the
first three months of 2012 from the results for the three months of 2013, the typical economic
indicators (Revenues, EBITDA, EBIT) have been recalculated by applying the average exchange
rates for the three months of 2012, thereby rendering them fully comparable with those of the
previous period.
However, it should be pointed out that these principles for measuring corporate performance
represent a method of interpreting results that is not envisaged in IAS/IFRS, w hile they must not
be considered substitutes for the results calculated according to those principles.
TOD’S Group engages in a business that, despite the effects related to monthly differences in the
f lows of revenues and costs generated by its industria l activity over the course of the year, it
does not manifest significant seasonal or cyclical changes in overall annual sales .
For this reason, analysis of the interim operating results and financial indicators (revenues,
EBITDA, EBIT, f inancial position a nd working capital) cannot be considered fully representative,
and it would be incorrect to consider the period indicators referred to in this report as
proportionate to the whole year’s results .
TOD’S Group – Quarterly Report
March 31 s t 2013
21 Report on operations
Scope of consolidation
The scope of consolidation at March 31s t
, 2013 changed in respect to March 31s t
, 2012 due to the
deconsolidation of Formapura in connection with the merger by incorporation into TOD’S S.p.A.
occurred on August 1s t
, 2012 and the consolidation of TOD’S Brasil Comércio de Artigos de Couro
Ltda, created on May 4t h
, 2012. Compared with December 31s t
, 2012 there are no changes in the
scope of consolidation.
Sant’Elpidio a Mare , May 14t h
, 2013
The Chairman of the Board of Directors
Diego Della Valle
Declaration pursuant to Article 154bis (2) of Consolidated Law on Finance - TUF
The manager charged with preparing the company’s f inancial reports certif ies, pursuant to Article
154bis (2) of the Consolidated Law on Finance - TUF, that the accounting information presented
in this document corresponds to the accounting documents, books, and ledger entries.
The manager charged with preparing the company’s f inancial reports
Rodolfo Ubaldi