Damiani Group at a Glance

Damiani Group
STAR CONFERENCE
Milan 23 March 2011
Damiani Group at a Glance
„
Founded in 1924 by Enrico Grassi Damiani and currently run by 3rd generation family
„
Personal production sites and established consolidated relations with the best goldsmiths in the world
„
22 Diamonds International Awards (unmatched record)
„
Italian Leader in the production and distribution of high-end jewellery
„
Global presence with 3 operative subsidiaries in New York, Tokyo and Lugano, a network of monobrand and
multibrand stores and a showroom in the heart of Milan
„
Vast brand portfolio: 5 complementary brands and 1 high-end retail chain
„
Listed on the Italian Stock Exchange
2
Our history: From Valenza to the Italian Stock Exchange
Enrico Grassi
Damiani began
creating diamond
jewellery in Valenza
Damiano Grassi
Damiani
increases the
brand recognition
Launch
of
Salvini
The Third
generation
International
expansion
of the Group
1924
1924
1960
1960
1986
1986
1996
1996
1997
1997
1998
1998
2000
2000
2007
2007
2008
2008
2009
2010
Acquisition of
Alfierii St
Alfi
St. John
J h
Launch of
Bli
Bliss
Listing on the
Italian Stock
Exchange
Rocca
acquisition
3
Licensing and
commercial
Agreements:
Ferrari
Maserati
Ducati
Ferrè
Jil Sander
MM Margiela
John Galliano
Complementary Brand Portfolio
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Price
range for
core sales
(€)
CORE VALUES
ƒ Traditional
6,000
ƒ Buccellati
ƒ Fabergé
ƒ Van Cleef&Arpels
l
luxury
5,500
5,000
ƒ Tiffany
ƒ Bulgari
ƒ Cartier
ƒ Heritage
ƒ Quality
ƒ Exclusivity
E l i it
4,500
4 000
4,000
MAIN COMPETITORS
3,500
3,000
ƒ Contemporary
2,500
classic luxury
2,000
ƒ Tiffany
ƒ Gucci
ƒ Montblanc
1,500
1,000
500
ƒ Multi-style
ƒ Domestic /
ƒ Aspirational
ƒ Folli Follie
ƒ Morellato
ƒ Breil
10
15
20
25
30
35
40
45
50
55
60
65
70
„
FERRARI
„
MASERATI
„
DUCATI
„
GIANFRANCO FERRE’
„
JIL SANDER
„
MARTIN MARGIELA
„
JOHN GALLIANO
unbranded players
luxury
0
Damiani Group’s Licensing
and commercial agreements
ƒ Young, active
and modern
Target Age
Range
4
Our brands: Damiani – Heritage and Quality
Core Values and Key
y Data
ƒ
Core values: elegance, exclusivity and
superior quality
ƒ
Products: jewellery set in precious
metals with diamonds, precious stones
and pearls
ƒ
Price positioning: entry price < € 1,000
€3,000-5,000 for core business
Masterpieces sold > €100,000
5
ƒ
Main Competitors:
p
Bulgari,
g
Cartier,
Chopard, Tiffany
ƒ
Retail network: 15 DOS, 39 franchised
stores
Our brands: Bliss - Accessible Luxury
Core Values and Key Data
ƒ
Core values: young,
young active and modern
ƒ
Products: precious metals and stones, and
non-traditional materials (steel, ebony, silver
etc.)
TAODG+
Always associated with at least a
diamond
Boutique Bliss
Turin
6
ƒ
Price positioning: €200-500 for core
b i
business.
E
Entry
t price
i < € 50
ƒ
Main Competitors: Folli Follie, Tous,
Morellato and Breil
ƒ
Retail network: 3 DOS,
DOS 4 franchised stores
Our brands: Salvini Contemporary
p
y Classic Luxury
y
Core Values and Key Data
7
ƒ
Core values: contemporary
interpretations of classic jewellery
ƒ
Products: precious metals with
diamonds, precious stones and
pearls
ƒ
Price positioning: €1,000-3,000
for core business. Entry price: €
500
ƒ
Main Competitors: Tiffany, Gucci
and Montblanc
Our brands: Alfieri & St. John - Bridge
Core Values and Key Data
Boutique Alfieri
Kazakistan
8
ƒ
Core values: multi
multi-style
style, including a classic
line created in response to the demands of
the wholesale market
ƒ
Products: precious metals with diamonds,
precious stones and pearls
ƒ
Target customer: wholesale clients
ƒ
Price positioning: €500-2,000 for core
business
ƒ
Main competitors: domestic / unbranded
players
Our brands: Calderoni - Exclusivity
Core Values and Key Data
ƒ
C
Core
values: traditional luxury
ƒ
9
(4 International Diamond Awards)
ƒ
Products: unique
q collections of hand crafted p
pieces,,
inspired from the historical Calderoni drawings and
catalogues
ƒ
Price positioning: €5,000-6,000 for core business
ƒ
Main Competitors: Buccellati, Fabergé, Harry
Winston, Van Cleef&Arpels
Integrated value chain
ƒ
Total control of the value chain
ƒ
Extremely high level internal design team
ƒ
Efficient purchasing of raw materials
ƒ
Personal production sites and externalised
production with selected suppliers
ƒ
High
g q
quality
y control
ƒ
Selected and tailored distribution
ƒ
Effi i t and
Efficient
d innovative
i
ti communication
i ti
strategy
10
Unique tradition and consolidated expertise in jewellery
and watch production
„Consolidated presence in the Valenza district
(internationally renowned for excellence in
jewellery production)
„ Longstanding relations with local district
suppliers assuring maximum flexibility in terms
quantitative p
production
of time,, cost and q
„Possibility to benefit from the experience of
Valenza’s master goldsmiths
„Great attention to the
technologies and techniques
use
of
new
„High expertise also in the production of
accessible luxury jewels
11
Extremely high level design capability
ƒ
A long history in innovative and exclusive design
ƒ
Product design and development team accustomed to working different brands and able to
create unique pieces with different styles. Thus satisfying the requests of diverse consumer
t
targets
t with
ith jewellery
j
ll
products
d t from
f
accessible
ibl lluxury tto unique
i
masterpieces.
t i
ƒ
More than 85 years of prestigious recognition: 22 Diamonds International Awards
12
Experience in raw material purchasing
ƒConsolidated experience in selecting and purchasing raw materials
ƒHigh level and established long term relations with international suppliers
(Anversa, Tel Aviv, Hong Kong, etc.)
ƒThe Damiani Group has always purchased raw materials with extreme
attention to ethics (eg. the diamonds exclusively come from legitimate sources
not involved in conflictual financing, likewise the rubies do not come from
Burma)
13
Consolidated Know how and highly specialised
p
personnel
•
Renowned industrial competence and new techniques perfectly combined
with superior level artisan capacity
•
High control of the value chain: some key production stages are maintained
i t
internally
ll to
t preserve “core”
“
” quality
lit and
d competence
t
•
Products are always a synonym of tradition and high quality (“Made-in-Italy”)
Efficient combination of personal production sites and externalised production
Efficient and flexible productive process to satisfy demand
Superior system of quality control
Effective post sales service
14
Powerful focused communication
15
„
Communication leader and innovator in
the jewellery sector
„
International advertising campaigns
„
Established relations with international
celebrities
„
Centralised internal and international
PR office offering significant synergies
and advantages
„
V t media
Vast
di coverage
„
Presence in the principle sector fairs
Selected and tailored distribution
Damiani
International
Damiani USA
Hawaii
Damiani Japan
„
3 international operative subsidiaries
„
„
„
„
33 DOS
46 Franchising
2500 wholesale clients
Established relations with major department stores and jewellery chains globally
16
Rocca: an appropriate distribution channel
Rocca is a high-end watch and jewellery chain,
chain leader in Italy and is one of the very few
present globally
Founded in 1794 with more than 200 yyears of historyy in the high-end
g
watch and jjewellery
y
sector, Rocca is present in the most important cities and most prestigious streets
17
Rocca: a prestigious brand portfolio
18
Our strategic initiatives
Our Strategic Initiatives
1
Increase sales in
Italy
• Product mix ridefinition
• Marketing initiatives
• A&P investments
• Increase penetration of Damiani brands
in Rocca stores
2
Increase sales
abroad
•
•
New clients, new markets
Commercial
partners
3
•
Other initiatives
Licensing:
g Ferrari,, Maserati,,
Ferrè, Jil Sander, Maison
Margiela, John Galliano
Ducati
Martin
• New line of Damiani jewellery watches
20
agreements
with
Increase Sales in Italy and Abroad
ƒ Increase focus on collections:
ƒ Product mix rebalanced
ƒ Wider pprice ppoint
ƒ Improve retail network performance
ƒ Increase penetration for all Damiani Group’s brands in Rocca stores
ƒ Improve Wholesale
ƒ Trainings
ƒ Increase our presence in Retail chains
ƒ Maintain advertising investments as % in relation with sales
ƒ TV for Damiani and Salvini
ƒ New media for Bliss
ƒ New clients,
clients new markets
ƒ New Openings: franchising and dos
ƒ International commercial agreements with partners
Gwyneth Paltrow wearing Juliette
Bracelet and Sunset Boulevard
earrings at the Academy Awards
21
Other initiatives: licensing and commercial agreements
Jil Sander
Ferrari
Gianfranco
F è
Ferrè
John Galliano
Ducati
Martin Margiela
g
Maserati
ƒIncrease Group’s
p sales also leveraging
g g on co-marketing
g and customers’ sharing
g
initiatives in Italy and abroad
ƒ Exploit operating synergies, using the existing
Damiani’s platform.
22
ƒ “Safe” contracts
Moon Drops - The new collection designed by
Ludovica Andreoni Montezemolo for Damiani
Giorgio Damiani and Ludovica Andreoni at the presentation
of Moon Drops at the boutique in Rome
23
The new watch line
A new female elegant watch inspired by one of the iconic collections of the brand
Classic design
g with a contemporary
y touch
Precious watch: white gold with diamonds rubies and sapphires and refined in every detail
After the succes of last year Belle Epoque collection the offer was enlarged introducing new
watches in CERAMIC for a younger target, new price positioning and daily usage
24
The “Clean Water” project with Sharon Stone
Silvia Damiani, Sharon Stone and John Trevis
(Drop in the Bucket
Bucket))
Damiani worked with Sharon Stone to design an innovative jewellery line, that it is characterized by
concept based on the use of rough diamonds.
P t off the
Part
th profits
fit will
ill be
b devolved
d
l d to
t build
b ild wells
ll for
f clean
l
water
t in
i African
Af i
villages
ill
and
d where
h
it is necessary thus contributing to reducing the very high rate of mortality, especially among children
25
Financials
9M 2010/11 Results Key Facts
„
Consolidated Sales of €111.5m, -5.9*% YoY
„
Retail Sales of €30.6m, +9.4*% YoY
„
Wholesale Sales of €80.7m, -10.5*% YoY
„
EBITDA of €0.5m (vs € -0.6m as of December 31, 2009)
„
EBIT of -€3.4m (vs € -4.2m as of December 31, 2009)
„
Group net loss of -€6.8m (vs € -7.4m as of December 31, 2009)
„
Net debt of €37.7m (vs net Debt €39.0m as of March 31, 2010)
Note:
Sharon Stone and Damiani presented the
new Maji Collection in Los Angeles
Fiscal year-end as of March 31
* at current exchange rates
27
Sales Breakdown by Channel
9M 09/10
50
0
€m
20 9M 10/11
30
40
50
60
% Change
current
ex. rates
% Change
constant
ex. rates
€m
Wholesale
90.2
Wholesale
Retail
10
80.7
Retail
28.0
Retail &
Wholesale
118.2
30.6
Retail &
Wholesale
111.3
% on Core Sales of € 118.2m
Wholesale
76.3%
% on Core Sales of € 111.3m
Wholesale
72.5%
Retail
23.7
Note: Fiscal year-end as of March 31
28
Retail
27.5%
(10.5%)
(12.0%)
9.4%
8.4%
(5.8%)
(7.2%)
Sales Breakdown by Geographical Area
9M 09/10
0
€m
Japan
Rest of the World
92.5
6.7
6.0
13.0
Italy
5.6
Japan
7.5
Rest of the World
America
5.7%
Italy
78.2%
83.9
Americas
% on Core Sales of € 118.2m
Note:
50
60
% Change
current
ex. rates
% Change
constant
ex. rates
€m
Italy
Americas
20 9M 10/11
30
40
10
14.3
% on Core Sales of € 111.3m
America
4.6%
Japan
5.0%
Japan
7.9%
Rest of
World
15.3%
Rest of
World
11.1%
Italy
72.2%
Fiscal year-end as of March 31
29
(9.3%)
(9.3%)
(16.7%)
(23.6%)
25.3%
6.7%
10.1%
9.6%
Sales Breakdown by Brand
0
20 9M 09/10
30
40
10
50
0
10
20 9M 10/11
30
40
50
€m
€m
Damiani
44.1
Other brands
47.1
Damiani
74.1
64.2
Other brands
Total
118.2
Total
111.3
% on Core Sales of € 118.2m
% on Core Sales of € 111.3m
Damiani
37.3%
Damiani
42.3%
Other
Brands
62.7%
Note:
60
Fiscal year-end as of March 31
30
Other
Brands
57.7%
% Change
current
ex. rates
% Change
constant
ex. rates
6.8%
3.5%
(13.4%)
(13.6%)
(5.8%)
(7.2%)
Income Statement
9M 2009/2010
€m
Total Revenues
Re en es
118 4
118.4
9M 2010/2011
111 5
111.5
% change
(5.9%)
% at constant exchange rates
(7.2%)
Raw materials and parts
(59.3)
(58.7)
Service Costs
((37.3))
((34.6))
Personnel Costs
(20.1)
(19.2)
(2.4)
1.4
(119.1)
(111.0)
(0.6)
0.5
(0.5%)
0.4%
(3.6)
(3.9)
(4.2)
(3.4)
Other Operating Costs
Total Operating Expenses
EBITDA
Margin (% of Revenues)
Depreciation and Amortisation
EBIT
Margin (% of Revenues)
Net Financial Income / (Expenses)
PBT
Margin (% of Total Revenues)
(3.5%)
(3.0%)
(1.9)
(2.1)
(6.2)
(5.5)
(5.2%)
(4.9%)
1.3
Taxes
Minorities
Net Income/(loss) of the Group
31
1.4
0.0
0.0
(7.4)
(6.9)
Net Operating Working Capital
(€m)
91.2
87.3
106.1
105.8
43.0
39.5
(57.9)
(58.0)
March 31, 2010
December 31, 2010
Accounts Receivables
Accounts Payables
Note: Fiscal year-end as of March 31
32
Inventory
Balance Sheet
(€m)
March 31, 2010
December 31, 2010
Net Working Capital
98.6
94.5
Net Tangible Assets
20.4
18.2
N t Intangible
Net
I t
ibl A
Assets
t
12.5
11.0
4.6
4.2
Severance Staff, Provisions & Others
11.9
13.6
Net Capital Employed
148.1
141.5
107.5
102.4
1.5
1.4
Shareholders' Equity & Minorities
109.0
103.8
Net Debt
39.0
37.7
34.4
27.6
4.6
10.1
148.1
141.5
Net Financial Assets and Other
Group Shareholders' Equity
Mi iti
Minorities
Long term debt
Short term debt/(cash)
Net Financial Debt and Shareholders' Equity
33
Cash Flow Statement
9M 2009/2010
9M 2010/2011
(11.9)
(2.5)
Capex
(1.5)
(0.7)
Other (Investments)/Disposals
(0.1)
2.1
(13.5)
(1.1)
11.3
(0.5)
Cash Flow of the Period
(2.1)
(1.6)
Cash and Cash Equivalents at Beginning of Year
9.5
7.3
Cash and Cash Equivalents at End of Year
7.4
5.6
€m
Operating Cash Flow
Free Cash Flow
Cash Flow from Financing Activities
34
Stores Network
9M2009/10
9M2010/11
DOS
Franchising
Total
stores
30
1
31
Italy
International
8
43
51
International
Total
38
44
82
Total
Italy
DOS
Franchising
Total
stores
25
1
26
8
45
53
33
46
79
New Openings: Singapore - Beirut - Ning Bo - Macao
(Damiani),
Shanghai - Haerbin Quilin (Bliss)
Damiani Singapore
Damiani Ning Bo
Damiani Macao
Bliss Haerbin Quilin
Company Information
Share Information(*)
Ownership Structure(*)
Share Price: € 0.95
Giorgio
Damiani
6.1%
Number of Shares: 82.6m
Market Cap: € 78.5m
Silvia Damiani
5.7%
Market
19.4%
Investor Relations
P l B
Paola
Burzii
Email: [email protected]
Buyback
Shares***
6.8%
Tel: +39 02-46716340
Website: www.damiani.com
Note: *as of March 21 2011
**controlled by Guido Damiani
***Includes purchase buyback shares of 5,619,609 shares
36
Guido
Damiani
5.0%
Leading Jewels**
57.0%
Disclaimer
This presentation has been prepared by Damiani S.p.A. ("Damiani", and together with its subsidiaries and affiliates, the "Damiani Group") solely for institutional
investors. For the purposes of this disclaimer, this presentation (the "Presentation") comprises the attached slides, the speeches made by the presenter(s), the
question and answer session and any materials distributed at, or in connection with the Presentation. The information provided in this Presentation is being furnished
to you
o solely
solel for your
o r information on a confidential basis.
basis Neither this document
doc ment nor any
an copy
cop thereof may
ma be reproduced,
reprod ced redistributed
redistrib ted or passed on,
on in whole
hole or in
part, to any other person.
The Presentation does not constitute an offer to sell or the solicitation of an offer to purchase Damiani shares. Damiani shares have not been and will not be registered
under the Securities Act of 1933 and may not be offered or sold in the United States except pursuant to an exemption from, or transaction not subject to, the
registration requirements of the Securities Act. Damiani shares have not been and will not be registered under the applicable securities laws of any state or jurisdiction
of Australia, Canada or Japan, and subject to certain exceptions, may not be offered or sold within Australia, Canada or Japan or to or for the benefit of any national,
resident or citizen of Australia, Canada or Japan.
The information in this Presentation includes forward-looking statements that are based on current expectations, beliefs and predictions about future events. These
and any other forward-looking statements discussed during this Presentation are subject to known and unknown risks, uncertainties and assumptions. None of
Damiani its shareholders and affiliates or any of their respective directors,
Damiani,
directors officers,
officers employees,
employees advisers,
advisers agents or any other person undertakes to review or confirm
any expectations or estimates or to publicly update or revise any such forward-looking statement.
Damiani Group actual results and developments may differ materially from the ones expressed or implied by the above statements depending on a variety of factors.
Any reference to past performance of the Damiani Group shall not be taken as an indication of future performance. Therefore you should not place under reliance on
forward looking statements which speak only as of the date of this Presentation and are subject to change without notice.
By attending the Presentation you agree to be bound by the foregoing terms.
37