François-Henri Pinault, Chairman and Chief Executive Officer, stated: “These excellent operating and financial results confirm the strength of our brands and companies as well as the soundness of our strategy, aimed at enhancing our growth and profitability profile. The first half was also marked by the successful acquisition of Puma, a move which is at the very core of our strategy. Our strong performance strengthens our determination to further improve the Group’s financial results and increase value creation in 2007.”

 

PPR recorded revenues of €9,240 million in H1 2007, up 11.4% on an actual basis or up 5.6% on a comparable basis, compared to H1 2006. Revenues include Puma sales fully consolidated from April 1, 2007.

Excluding Puma, Group revenues in the first half were up by 5.7% at comparable structure and exchange rates.

Recurring operating income

 

Group recurring operating income stood at €630 million, up 40% over H1 2006. Recurring operating income margin rose sharply, by 1.4 point, to 6.8% of revenues.

On a pro-forma basis (including Puma over six months), the Group’s recurring operating income margin would have been 7.7% in H1 2007.

 

Excluding Puma, recurring operating incomerose by 26.5% and recurring operating income margin stood at 6.5%. This sharp increase was driven by jumps in recurring operating incomeat Fnac (+22%), CFAO (+30%) and across all Gucci Group brands (+55%). The strongest increases in Luxury Goods were recorded by Bottega Veneta (recurring operating income more than doubled), Yves Saint Laurent (losses significantly reduced) and YSL Beauté.

 

 

Group share in net income from continuing operations totalled €290 million, up sharply by 53.5% over H1 2006.

Excluding Puma, Group share in net income from continuing operations stood at €278 million, up 47.1%. This increase reflects the continued strong improvement in the Group’s operating results, as well as lower financial expenses and tight control of tax charges.

 

Group share in net income stood at €326 million, up by nearly 143% over H1 2006 (€134 million).

 

Group share in net income from continuing operations excluding non-recurring items stood at €303 million, up by a sharp 54.4% over the first half of 2006.

Financial structure

 

Notwithstanding the seasonality of PPR’s activities, free cash flow from operations improved significantly to reach €278 million in H1 2007, up by €335 million from the prior year.

 

Capital employedrose significantly in the first half due to the integration of Puma. Excluding Puma, capital employed rose by only 1.2% over the June 30, 2006 level, reflecting tight control over working capital requirements.

 

Shareholders’ equity stood at €10,711 million at June 30, 2007, up €1,586 million on December 31, 2006. This sharp increase reflects the impact on minority interests of the consolidation of Puma.

Net indebtedness stood at €5,381 million at the end of the first half, up by 55.5% compared to 2006 year end, mainly reflecting the acquisition of a 33.4% stake in Puma at June 30, 2007.

 

 

At the expiry of the additional acceptance period regarding the tender offer for Puma, PPR announced on July 17, 2007 that it held 62.1% of Puma’s share capital. PPR has not purchased any additional Puma shares since that date.

 

 

 

In light of the solid activity levels achieved in July and August, which were in line with the trends recorded in Q2, PPR management expects favorable prospects for full year 2007.

 

 

Download the complete press release (.pdf - 70 Mo)

 

  

 

Contacts
Press:	Catherine Malek	+33 (0)1 45 64 61 20	cmalek@ppr.com
Analysts/Investors:	Alexandre de Brettes   Emmanuelle Marque	+33 (0)1 45 64 61 49    +33 (0)1 45 64 63 28	adebrettes@ppr.com   emarque@ppr.com
Website:	www.ppr.com