2011 Nine Months Results

8/3/2019 2011 Nine Months Results

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9M 2011

Results

November 14th

, 2011


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us nessAnalysis


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3

M

9M 2011 Highlights

Ordinary

Revenues Operating Profit

Broad negative impact

from raw material.

1,498 1,481 Performance reported:-1.1%.

SG&A reduction;

lower one-time costs

compared with last year.

9M 10 9M 1110

11 10 11

9M 9M

Performance currency

neutral: -0.5%

Positive impact from

currency (~ 13 mln).

Net Income Net Debt

Negative impact from

currency hedging:

-11 mln in 9M 11 vs. Net Debt increase.

85 749

60 486645

+ m n as year.

Lower tax-rate:

34% in 9M 11 vs.

Cash Flow absorption:

rise in NWC &

9M 10 9M 119M 10 9M 11FY

2010

41% n 9 10

the network.


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Revenues4

M

Revenues 1,498 1,481 -1.1% -0.5%

Textile 80 93 16.2% 16.3%

Apparel 1,418 1,388 -2.1% -1.4%

Apparel Segment

- Wholesale 1 085 76% 1 076 77% -0.8% -0.3%

- Direct Sales 333 24% 312 23% -6.3% -5.1%


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Geographical Revenues5

RoW1% (1%)

Asia16% (16%)

Americas4% (4%)

Overall Performance -1.1%

. .

-0.5%

Macro-Areas

Europe

Asia

Italy

-1.4%

+0.6%

-1.6%

+4.3%

Europe

79% (79%)Note: ( ) 9M 10 data

Americas +0.2% +5.4%

Europe

The Mediterranean

-

Asia

India: rising revenues (+12%), driven by 3rd quarter

. .

Greece: double digit fall (-19%), confirming previous

negative trend.

Iberian Peninsula: negative performance in Portugal- - rd

.

South Korea: double digit growth (+10%).

Ex-USSR Asian Countries: meaningful progress (+26%).

Greater China: positive LFL results and improvement of- -

quarter.

Other European Countries

Outstanding performance (+28%) in Russia and ex-

.

Decreasing results in Japan and South East Asia.

Americas

.

Europe: growth in Germany, Switzerland and U.K.

or mer ca: revenues ec ne - .

Mexico: major double digit growth (+26%).


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6Geographical Revenues

Developingand Fast

GrowthCountries

26% (24%)

ra onaWestern

Economies

74% (76%)Note: ( ) 9M 10 data

Milan, Corso Vittorio Emanuele

Reported C.N.

-4% -4%Traditional

+8% +11%

es ern conom es

Developing and

Milan, Piazza San Babila


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7Highlights Asia

India

22%

Others

10%

Japan

11%

ex URSS-Asia

3%

Greater

China9%

South Korea

29%

Turkey

16%

New Delhi, South Extension

Highlights

Turkey

A/W 11 collections: positive sell-out, driven by offer

focused on lighter weights.

n a

Performance increase: remarkable sales growth of

higher product range, with positive mix impact.

Dedicated collection, starting from A/W 11 season,

includes best-seller items.

Positive LFL performance in 3rd quarter: results

improved against the first part of the year.

Entry-price point categories show positive trend.

Market opportunity, with meaningful potential: new

Sisley store openings by partners.

Kids proposal: accelerating sales, supported by offer

strengthening.


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8Highlights Americas & Europe

mer cas

Mexico

25%

Others

27%

Russia &

ex-USSR EuropeOthers

36%

USA &

Canada

48%

Italy

57%

Revenues: 54 mln Revenues: 1,180 mln

Mexico Russia & ex-USSR Europe

Outstanding sell-out results for A/W 11: traffic store

increase and average consumer spending up.

Successful price positioning strategies, differentiated

b roduct ran e.

Kids commercial proposal & product line

reinforcement: high potential segments targeted

through an increasing offer of dedicated products.

LFL Performance : double digit growth (+15%).

USA

Italy

Performance in 3rd quarter affected by deliveries in 2nd

underperforming stores.

,

requests.


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9Apparel Revenues

Collections Trend

Positive

Performance

A/W 11 improvement in performance trend (+2%), showing an

Flat

~ (4%)

~ (2%)

~ .

Positive impact of in-season product initiatives, adopted in S/S 11

and re-proposed in A/W 11.

A/W 10 S/S 11 A/W 11

Negative r vers

Recent collections trend confirmed: resilient volumes

performance and improvement of price/mix.

Apparel Revenues by channel

M

Wholesale

Results in line with previous year (-0.3% currency neutral),

supported by favourable collections trend.

333

1,418 1,388

D.O.S.- 6.3%

- 2.1%

312Directly Operated Sales

-

1,085 1,076 Wholesale

- 0.8%

. ,

negative impact of network refocusing activities;DOS transfer in India to third parties management;

negative LFL (-3%); third quarter results (-3%) in line with 1st

9M 10 9M 11

a 2011, negat ve y a ecte y poor sa es n eptem er.


10/31

Brands & Collections10

Sisley 16% (16%)UCB 51% (52%)

UCB Kids& Sisle Youn

Playlife 2% (2%)Kids 31% (30%)

Note: ( ) 9M 10 data


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Brands: United Colors of Benetton11

UCB & Brand Values UCB & New Media UCB & Product

Lana Sutra Pro ect

Dialogue with the world of art,combining traditional and new

values of Benetton.

New actions on social media:introduction of Benetton iPhone

App, dedicated to UCB world.

On-going roll-out of mini-

collections proposals: new

innovative total look

Art pieces, conceived as a

homage to love, emphasizing two

ke elements of brand DNA: wool

Benetton.com launch, webportal & platform, crossing a

new digital creativity border,

deliveries for A/W 11.

Product innovation and

research: new exclusive

threads and bright colours.

Itinerant installations in various

featuring web 2.0 and social

networking.

knitwear technology Pin Up.

.

coming soon, the launch of new institutional worldwide communication campaign.


12/31

12Brands: New Store Concept Introduction

UCB & Store concept Playlife & Store ConceptSisley & Store Concept

Opening of the renovated Innovative shopping experienceFlagship Vittorio Emanueleags p store n an a a

(Milan), launching the new

Sisley concept.

ay e: new concep s ore

opened in Treviso.

an : ntro uct on o new

Lissoni store concept, proposing

a different display approach.

New lay-out: clarity of productpresentation, enhancing

collections and suggesting new

looks.

Multi-brand store, emphasizing

the different labels in the

Playlife world (Playlife, Jeans

West, Anthology of Cotton,

On-going roll-out of Lissoni

concept, adopted from 2H 10 and

now present in more than 30

countries.

Killer Loop), and introducing

complementary accessories.


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Analysis


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Profit & Loss14

M

9M 10 9M 11 Ch %

Revenues 1,498 1,481 -1.1%

Gross Profit 696 645 -7.3%% 46.5% 43.5%

Contribution Margin 583 530 -9.0%% 38.9% 35.8%

SGA -424 -411 -2.9%

Ordinary EBIT 159 119 -25.2%% 10.6% 8.1%

Non recurring items -18 -4

EBIT 141 115 -18.4%% 9.4% 7.8%

Profit Before Taxation 139 91 -35.2%

Net income 85 60 -29.8%% 5.7% 4.1%

Ordinary EBITDA 235 195 -17.2%% 15.7% 13.2%

EBITDA 224 193 -14.1%

% 15.0% 13.0%


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Gross Profit Analysis15

M

9M 10 9M 11 Ch % Ch % CN

Gross Profit 696 645 -7.3% -8.7%

% on Revenues 46.5% 43.5% -300 bp -390 bp

Apparel

696

(7)

(60) +10 +6

645

Gross Profit Commercial Industrial FX Impact Textile Gross Profit


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Ebit Analysis16

M

One-off Ordinary Ebit Reported EBIT % on revenues

119 6

9M 11

141

115

9.4%

7.8%(4)

+ +

EBIT9M 10

ApparelSGA

NonRecurring

EBIT9M 11

GrossProfit

SellingCosts


17/31

Financial Cost & Net Income Analysis17

Financial ex ensesM

Tax Rate

(15)(14)

41%

34%

9M 10

9M 11

9M 10 9M 11

Currency hedging

+13

Minority Interests

(3)9M 10

0

9M 10 9M 11

(11)

9M 10 9M 11 Ch % 9M 10 9M 11 Ch %

P.B.T. 139 91 -35.2%

% on Revenues 9.3% 6.1%

Net Income 85 60 -29.8%

% on Revenues 5.7% 4.1%


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a ance ee& Cash Flow

Anal sis


19/31

Net Capital Employed19

M

12.31.2010 09.30.2011 Ch

Working Capital 622 889 267

Asset to be sold 10 1 -9

Tang. and Intang. fixed assets 1,314 1,306 -8

Financial fixed assets 25 21 -4

Other assets/(liabilities) 13 15 2

et ap ta mp oye 1,984 2,232 248

financed by

Net Indebtedness 486 749 263

Net Capital Employed Analysis

o a are o ers qu y , , -

(12) (7)

1,984

+2,232

(*) T.I.F.: Tangible, Intangible and Financial Fixed Assets

Net Capital

Employed 12.31.10

Ch. in Working

Capital

Ch. in T.I.F.*

Fixed Assets

Ch. in Other

Liabilities

Net Capital

Employed 09.30.11


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Working Capital20

M

09.30.2010 09.30.2011 Ch

Working Capital 786 889 103

Net trade receivables 879 950 71

Inventories 291 348 57

(Trade payables) -371 -391 -20

Other credits/(debts) -13 -18 -5

Working Capital Analysis


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Net Debt21

M

2009689

763

678

589749

2010

2011508

645

486486

534

543

InitialNet Debt

Q1 H1 9M Year EndNet Debt

Net Debt & Cash Flow generation

Free cash absorption in the first nine months of the year, due NWC increase, share buy-back programmeand continued investments.


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Cash Flow22

M

Net cash flow from operating activities Net cash flow from Investment activities

+78

(101) (82)

9M 10 9M 11 9M 10 9M 11

(131)

DividendsTreasury Shares

(41)(46)

(18)

9M 10 9M 119M 10 9M 11

0


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Net Investments23

M

Net Investments+ 101 + 82

Real Estate

Commercial5

38 13

40

Commercial Operations

Production+ 10

+ 17

+ 14

+ 14

Others

Disinvestments(8) (12)

Other changes(9) +13

9M 10 9M 11


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nnex


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Breakdown by segment25

M

Revenues 1,421 1,390 -2.1%

EBIT 146 107 -26.6%

% 10.3% 7.7%

EBITDA 223 179 -19.7%

% 15.7% 12.9%

Textile 9M 10 9M 11 Ch %

evenues .

EBIT -5 8 n.s

% -3.3% 5.3%

EBITDA 1 14 n.s

% 1.0% 8.7%


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Consolidated Balance Sheet & Working Capital26

M

12.31.2010 09.30.2011 Ch 09.30.2010

Working Capital 622 889 267 786

Asset to be sold 10 1 -9 13

Tang. and Intang. fixed assets 1,314 1,306 -8 1,317

Financial fixed assets 25 21 -4 24

Other assets/(liabilities) 13 15 2 0

Net Capital Employed 1,984 2,232 248 2,140

financed b

Net Indebtedness 486 749 263 645Total Shareholders' Equity 1,498 1,483 -15 1,495

12.31.2010 09.30.2011 Ch 09.30.2010

Net trade receivables 804 950 146 879

Inventories 293 348 55 291

Trade a ables -442 -391 51 -371

Other credits/(debts) -33 -18 15 -13


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Net Book Value of Land & Building27

M

Land and Building 09.30.2010 09.30.2011 Ch

Commercial 645 647 2

Other 19 19 0

Total 764 775 11

Commercial 09.30.2010 09.30.2011 Ch

Italy 164 168 4

-

France 104 104 0

Spain 66 66 0

Japan 40 43 3

Portugal 28 28 0

Belgium 18 17 -1

Turkey 19 15 -4

Austria 15 15 0

Iran 19 14 -5USA 15 15 0

India 10 9 -1

Kosovo 4 4 0

Switzerland 2 2 0

Total 645 647 2


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Statement of Consolidated Cash Flow28

M

Cash from operating act. before changes in Working Capital 244 198

Change in Working Capital -146 -275

Interests paid/received - Foreign currency gains/(losses) -2 -26

Payment of taxes -18 -28

Net Cash Flow from operating activities 78 -131

Net Operating Assets -94 -86

Financial Fixed Assets -7 4

Net Cash Flow from investment activities -101 -82

Free Cash Flow -23 -213

Payment of dividends -41 -46

Purchase of treasury shares 0 -18

Surplus/(Deficit) -64 -277


29/31

29Credit Facilities available as of September 30th, 2011

Term loansTerm loans

400 m (2007-2012)

3 Term loans

Current Position

Fully drawn

100 m BNL

150 m Unicredit

150 m Intesa S. Paolo

Cost: Euribor 1/2/3/6 months +20/50 bp*

H1 11

EBITDA /

Net Fin. Exp.min 4 11.6 x

ovenan

250 m (2010-2015)

Club Deal

Current Position

Fully drawn

50 m BNL

50 m Credit Agricole

N.D /

EBITDAmax 3.5 1.8 x

.

del Veneto

50 m Mediobanca

50 m UnicreditCost: Euribor 1/2/3/6 months + 150/250 bp*

5.000Jpy m (20112014)

Term loan

Current Position

Fully drawn5.000Jpy m

Development

Cost: Libor Jpy 6 months + 65 bp

** Covenants calculated every six months* Depending on the ratio N.D./EBITDA


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30Credit Facilities available as of September 30th, 2011

60 m 2009-2014 Current Position

Revolving Credit FacilitiesRevolving Credit Facilities

60 m

Committed credit facility Drawn for 40 m Banca Pop. Vicenza

Cost: Euribor 1/2/3/6 months +150/250 bp*H1 11

EBITDA /Net Fin. Ex .

min 4 11.6 x

Covenant**

150 m (2010-2015)

Committed credit facility

Current Position

Not drawn

30 m BNL

30 m Credit Agricole

30 m Unicredit

N.D /

EBITDAmax 3.5 1.8 x

.

del Veneto

30 m MediobancaCost: Euribor 1/2/3/6 months + 150/250 bp*

Uncommitted Credit FacilitiesUncommitted Credit Facilities

446 m

Uncommitted credit facilities

Current Position

Drawn for 83 m

Cost: Interbank or rime rate + s read

** Covenants calculated every six months* Depending on the ratio N.D./EBITDA


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31Disclaimer

This presentation contains forward looking statements which reflect Managements current views and

estimates. The forward looking statements involve certain risks and uncertainties that could cause actual

results to differ materially from those contained in the forward looking statements. Potential risks and

uncertainties include such factors as general economic conditions, foreign exchange fluctuations,

competitive product and pricing pressures and regulatory developments.

Documents

2011 Nine Months Results