07/25/2000 : 2000 First Quarter Sales
Strong organic growth in France and internationally Significant contribution by newly-acquired businesses Rising e-commerce sales (1) Sales for the six months ended June 30, 1999 are presented in accordance with the new French accounting standards (the main change concerns the full consolidation of the Credit and Financial Services business). (2)
Excluding the effect of changes in Group structure and changes in exchange rates. (3) Luxury Goods sales correspond to Gucci Group sales for the period from November 1999 to April 2000. Pinault-Printemps-Redoute's first-half 2000 sales surged by 25% to EUR 11.3 billion (FRF 74.2 billion). The trends observed in the first quarter kept up in the second quarter, with strong organic growth in France and internationally backed by a significant contribution from newly-acquired companies and rising e-commerce sales. Strong organic growth in France and internationally On a comparable structure and exchange rate basis, sales for the first half of 2000 expanded by 8.1%, compared with less than 4% growth in the same period of 1999. All divisions contributed to this solid performance, with Retail sales up 8.3%, Credit and Financial Services revenue up 9.3%, Business-to-Business sales up 5.6% and Luxury Goods sales up 15%.
Organic growth was especially strong in the Retail division, helped by healthy consumer demand in France, store openings by Fnac and Conforama outside France and the robust international performance of Redcats, in particular Brylane and Redoute.
Significant contribution by newly-acquired companies The difference between published sales (based on the new accounting standards applied as from 2000) and sales on a comparable structure and exchange rate basis includes the
EUR 1,007.4 million (FRF 6,608 million) effect of changes in Group structure and the
EUR 400.6 million (FRF 2,628 million) effect of changes in exchange rates.
Changes in Group structure correspond mainly to the consolidation of the Luxury Goods division built around Gucci, which includes the Gucci, Yves Saint Laurent and Sergio Rossi brands, and the results of the Business-to-Business division's active policy of external growth.
Rising e-commerce sales Internet division sales amounted to EUR 67.1 million (FRF 440 million), representing 0.6% of the Group's total first-half sales versus 0.2% for the same period of 1999. The 230.8% growth in e-commerce sales was driven by Redcats, especially in the United States, and Guilbert, with rises of 587.5% and 510% respectively. E-commerce sales by Fnac moved up a gear in the second quarter.
Commenting the first-half sales figures, Serge Weinberg, Chairman of the Management Board said: “The strong growth in sales achieved in the first-half 2000 reflects the underlying dynamism of all the Group's activities. It combines a sustained organic growth in France and internationally with an active policy of strategic acquisitions. Internet sales growth of our different brands demonstrates the validity of our development strategy complementary to our different distribution channels” RETAIL DIVISION Retail division sales climbed 13%. On a comparable structure and exchange rate basis, sales growth came to 8.3% versus 4.2% in first-half 1999. This robust performance was attributable to the continued high level of consumer spending in France, strong international sales of Fnac and Conforama stores and by the Brylane and Redoute catalogues and sustained demand for PCs.
Printemps ' first-half sales rose 4.5% or 4.6% on a comparable structure and exchange rate basis. Sales at the flagship Haussmann store expanded 8.1%, helped by 20% growth in sales at the revamped menswear store, Printemps de l'Homme, which was matched by a 20% increase in accessories sales reflecting strong demand for designer products. Combined sales by the other Printemps stores increased by a more restrained 1.6%, partly as a result of the disruption caused by the closure of one sales floor at the Place d'Italie store in Paris, which weighs two points of the total of the other Printemps stores.
Conforama 's sales rose by a very strong 16.5%, reflecting sustained demand, the rapid build-up of business at the stores opened in 1999, the consolidation of three affiliates – Lagane, Davaille and Georges – from January 1, 2000 and the contribution over the full six-month period of Rabineau, an affiliate acquired in the fourth quarter of 1999. Based on a comparable structure and at constant exchange rates, sales were 7.1% up on the same period of 1999. Sales by the French stores expanded by 5%. Outside France, sales in local currency were up 15.6% in Switzerland, 23.6% in Portugal and 16.5% in Spain. In early May 2000, Conforama strengthened its presence in Asia with the opening of a second store in Taiwan.
Fnac 's published first-half sales excluding Internet soared by 21.6%. This sustained growth reflects the organic growth for 18.3% and, to a lesser extent, the consolidation of Surcouf on a 3-months period. Growth was boosted by PC sales, up nearly 50% including Surcouf. French sales rose in excess of 15%, fueled by a sharp rise in demand for PCs and laptops as well as by a recovery in compact disk sales, which gained momentum in the second quarter.
International sales advanced 35.7%, reflecting the contribution of the new stores opened in 1999 in Brazil, Taiwan, Lisbon (Chiado) and Saragossa, coupled with strong sales momentum in Spain and Portugal.
Sales via Fnac's e-commerce sites doubled compared with the first half of 1999. Growth was driven by the addition of technical products to the web-based offering and the effect of the launches of Eveil & Jeux, Fnac Portugal and Fnac Brazil e-commerce sites. Internet sales at Fnac contributed 0.4% of the company's total sales and 1% of the cultural products (books and records).
Total sales (including Internet) grew by +21.8% and +18.6% on a comparable structure and exchange rate basis.
Redcats ' first-half 2000 sales (excluding Bernard and Internet activities) rose 8.8% and 4.5%, on a comparable structure and exchange rate basis.
The 1.9% increase in Redoute sales was attributable to an 11% rise in sales by foreign subsidiaries, driven by sustained demand in the United Kingdom and Belgium and the good results obtained by new developments in Switzerland and Austria. In France, mail order sales stabilized after declining in the first quarter as a result of mail strikes, while sales at the Redoute stores are not strictly comparable, owing to renovation work and the launch of the new "800 sq.m." concept.
Specialist catalog sales grew 5.2%, reflecting rises of 3.1% in France and 14% in international markets. The largest gains were achieved by Movitex and Cyrillus.
Brylane's sales climbed by a healthy 11.1% excluding Internet and 13.9% including Internet. The Chadwick's catalogs turned the page on a difficult 1999, with sales up 13%. The recently-launched Brylane Home and Redoute catalogs continued to expand their customer-base.
Redcats' e-commerce sales increased sevenfold in first-half 2000 compared with the year-earlier period, accounting for 1.5% of total sales by the company. All the sites contributed to this strong growth, especially those in the United States.
Total sales (including Internet) grew by +10.2% and +5.8% on a comparable structure and exchange rate basis.
First-half sales by the Concept Boutiques business surged 34.3%.
Orcanta continued to perform well, while
Made in Sport sales climbed strongly on the back of store openings and the successful launch of a life-style offering (shoes ...).
CREDIT AND FINANCIAL SERVICES DIVISION Credit and Financial Services revenue now includes that of Banque Générale du Commerce. Revenue for first-half 2000 totaled EUR 382.2 million (FRF 2,507 million), up 9.3% On a comparable structure and exchange rate basis on the same period of 1999. Average interest-bearing Consumer Loans at June 30, 2000 were 11.6% above the year-earlier figure, based on a comparable structure and constant exchange rates.
BUSINESS-TO-BUSINESS DIVISION Business-to-Business sales grew 21.2% , reflecting the positive effects of the active external growth policies applied throughout the division. Organic growth stood at 5.6% versus 2.3% in first-half 1999.
Rexel 's first-half 2000 sales surged 24.8%, thanks in part to the contribution over the full six-month period of the companies acquired in 1999 and the first-time consolidation of newly-acquired companies, including mainly Branch Electric in the United States, Maverick in Texas and the Chilean companies. On a comparable structure and exchange rate basis, sales climbed 6.9% versus 1.5% in the first half of 1999, testifying to sustained organic growth across all markets.
Pinault Bois & Matériaux 's published sales expanded 18.1%. The bulk of the increase was attributable to the acquisitions made in 1999 and 2000, including the François and Mullet groups. Organic growth came to 6% compared with 3.3% in first-half 1999. The late December 1999 storms in France fueled a sharp rise in first quarter sales by the Distribution business. The growth rate came progressively back to a more normal level in the second quarter, but sales for the full six-month period were nevertheless 6.8% up on the same period of 1999. Import-Transformation sales increased by 5.6%.
Combined sales by
Guilbert & Bernard climbed 14.5% excluding e-commerce. Including e-commerce, the increase was 17.2%, reflecting 17% growth at Guilbert and 22.3% at Bernard. These performances were partly attributable to external growth and the strength of sterling. Organic growth came to 4.8%, including 4.1% at Guilbert, reflecting the good performance of the business in France and double-digit rises in new office supplies markets, with the exception of the United Kingdom where sales declined slightly.
E-commerce sales by Guilbert and Bernard accounted for 2.8% of total sales in first-half 2000.
CFAO 's first-half sales expanded by 13.3%, primarily reflecting the consolidation of Howse and Mac George in Kenya as from January 1, 2000 and the full consolidation of operations in Nigeria which were previously accounted for by the equity method. Based on a comparable structure and constant exchange rates, sales advanced 1.8% against a backdrop of difficult economic and political conditions in certain African countries. Revenues from the distribution of capital goods in Africa contracted by 2.4%, due to the continuation of the downward trend observed in the first quarter of 2000, mainly in Côte d'Ivoire and Burkina Faso. By contrast, revenues in the French overseas departments and territories expanded by a further 3% after two years of strong growth. The decline in capital goods distribution revenues was more than offset by the strong 11.9% increase in revenues from the distribution of pharmaceuticals.
LUXURY GOODS DIVISION Luxury Goods sales for the six months from November 1999 to April 2000
- corresponding to fourth and first quarter sales published by the Gucci Group –
expanded 15% on a comparable structure and exchange rate basis. During the period, the Luxury Goods division moved up a gear in the United States, Europe and Japan. Gucci posted an outstanding growth in its core leather goods categories (handbags, small leather goods and luggage). Continued growth in Ready-to-wear sales reflects the increase selling space dedicated to the product, better customer service and Gucci's growing reputation. Published sales include sales by Yves Saint Laurent and by Sergio Rossi consolidated in Q4 1999, representing a total of USD 237 million, in H1 2000. Boucheron, which was acquired in May, was not consolidated.
(1) Sales for the six months ended June 30, 1999 are presented in accordance with the new French accounting standards (the main change concerns the full consolidation of the Credit and Financial Services business). (2)
Excluding the effect of changes in Group structure and changes in exchange rates. (3) Luxury Goods sales correspond to Gucci Group sales for the period from November 1999 to April 2000. Contacts Press : Laetitia Olivier
+ 33 (0) 1 44 90 63 80
Analysts/Investors : David Newhouse
+ 33 (0) 1 44 90 63 23