DCF and valuation parameters Ha_e )) B Operating aggregates The sales outlook of luxury companies points to limited growth opportunities due to underperformance of key markets and a shift to global pricing YOOX Net–A–Porter notably outperformed the Pricing growth has become a challenge for the luxury peers that have historically achieved ~25% growth through price increases. The popularity of the digital channel has made maintaining price divergence in average growth levels. different marcets difficmlt. >mtmre grooth is expected thromgh2 s er • Introduction of new products at lower price points to drive volumes, addressing the lower end segment aluationt ame ar • Improved volumes due to robust tourist–related demand p DCF and v Sales CAGR, *Kering sales for FY14A–FY18E CAGR >Q)-9'=Ç>Q)0= È lmpmjy cgepanies exclude numbers for Redcats, Sales FY14A FY15A/E FY16E FY17E FY18E Sergio Rossi and Groupe Fnac. (in €m) (FY15A/E–FY18E) YOOX Net-A-Porter 20.4% Notes: LVMH +($.+0 35,664 +/$+)0 +1$+// ,)$.), -&+ Egnclej 11.3% • *()- figmres are estimated Kering* )($(+0 ))$-0, )*$)(+ )*$0/- )+$-// -&, Jimmy Choo 10.3% (“E“) or actual (“A“) , depending Richemont )($,)( ))$,*/ ))$1++ )*$)1- )*$1*/ ,&* :jmnellg ;mcinelli 10.1% on their availability as of the Luxottica 7,652 0$0+/ 1$.)0 )($*./ ))$).- 0&) Dmpgllica 8.1% date of this study. Swatch /$1/0 7,742 0$*-( 0$./0 0$00, ,&/ • Figures are converted into ;`go Lai >ggc 7,276 .$00* /$(,, /$.)1 0$,0* /&* Eic`ael Cgjs 8.0% euros, using exchange rates Ralph Lauren .$.1) .$.-0 .$1(( 7,276 7,654 ,&0 Hermès 7.5% as of 31 March 2016 (Source: Hermès ,$))1 ,$0,) 5,245 5,652 .$()0 /&- ;`go Lai >ggc Capital IQ). 7.2% • Figures for YOOX Net–A– Michael Kors +$0+0 ,$(01 ,$*00 ,$-)) -$)-. 0&( 9neja_e 6.6% Porter for FY14 and FY15 are Coach ,$**( +$.0( +$1(( ,$(-, 4,252 ,&1 Tumi 6.1% presented on a pro forma basis, Li^^any 3,732 +$.(, +$/-1 +$1.- ,$).1 -&( i.e., assuming the merger was Prada 3,552 +$-,0 3,553 3,664 +$0// +&( Kering 5.4% effective at the start of FY14. :mjZejjy +$)1) +$)1, +$+), +$,1( 3,722 -&* DNE@ 5.3% • Hengdeli is not represented Hugo Boss 2,572 *$0(1 *$0/( *$1/, *$10. *&) Burberry 5.2% in the graphic at left because FY18E data was not available. Hengdeli *$((1 )$0)( )$1.+ *$(.( n/a n/a Tiffany 5.0% YOOX Net–A–Porter )$*/* )$..- )$1.* 2,357 *$1(0 *(&, Coach 4.9% Salvatore Ferragamo )$+*) )$,)/ )$-(* )$-0* )$.)1 ,&- Jalp` Damjen 4.8% Kafilg )$)/1 )$*/1 )$+0- )$*1- )$,** +&. Swatch 4.7% Tod's 1.. )$(+/ )$(0. )$)+1 )$)0) ,&, Kalnalgje >ejja_aeg 4.5% Moncler .1, 00( )$((+ )$))1 )$*)+ ))&+ Tod's 4.4% Tumi 463 ,0) -)) -+) 575 .&) Brunello Cucinelli 356 ,), 454 -() 552 )(&) Richemont 4.2% Bieey ;`gg +/1 ,(* 443 ,0) -+1 )(&+ Kafilg 3.6% Average 6.6% Prada 3.0% Median 5.3% Hugo Boss 2.1% Maximum 20.4% Source: Data based on consensus of several brokers reports for each company. Minimum 2.1% Estimated data have not been derived from internal insights. The luxury and cosmetics financial factbook 2016