2017奢侈品和化妆品行业财务概况（英文版）_82页-4mb

Summary of The Luxury and Cosmetics Financial Factbook 2017 Edition

Core Content

The 2017 edition of EY's Luxury and Cosmetics Financial Factbook provides an in-depth analysis of the luxury and cosmetics sectors, highlighting key financial metrics, market trends, and M&A dynamics. The report emphasizes the evolving nature of consumer behavior, the increasing role of digital transformation, and the importance of adapting to new market realities.

Main Financial Parameters

• Market Capitalization:
  The market capitalization of luxury companies increased by an average of 17% compared to 2016, with LVMH reaching nearly €100 billion.
  Cosmetics companies saw an average increase of 18% in market capitalization, with Natura as a notable outlier.

• Weighted Average Cost of Capital (WACC):
  WACC for luxury companies ranges from 7.0% to 9.2%, influenced by geographic exposure and debt levels.
  Cosmetics companies have a slightly higher average WACC, with Natura at 13.0%.

• Gearing:
  Gearing (net financial position / enterprise value) for luxury companies averages 1.0%, with Ralph Lauren at -12.9% and Chow Tai Fook at 3.0%.
  Cosmetics companies have an average gearing of 6.8%, with Coty at 30.7% and Natura at 32.8%.

• Long-Term Growth Rate (LTGR):
  The average LTGR for luxury companies is 2.7%, with Chow Tai Fook at 4.9% and Ralph Lauren at 2.0%.
  For cosmetics companies, the average LTGR is 2.4%, with Natura at 3.7% and Nu Skin at 1.5%.

• EBITDA Margin:
  The average EBITDA margin for luxury companies is 19.2%, while for cosmetics companies it is 16.8%.

• Capex Ratio:
  The average capex ratio for luxury companies is 5.3%, and for cosmetics companies, it is 3.8%.

Market Trends

• Growth Shifts:
  The high-end luxury segment, which drove growth in the past, is now showing slower growth.
  The premium and entry-to-luxury segments are expected to have the highest growth potential, with a projected CAGR of 6% (vs. 3-4% for high-end luxury).
  Accessories (bags, shoes, small leather goods) continue to be a key driver of growth in both segments.

• Consumer Behavior:
  Consumers are increasingly adopting a "mix and match" approach, especially among millennials.
  Shoes are expected to be the fastest-growing category, with a projected 11% growth in the high-end segment and 7% in the premium and entry-to-luxury segment by 2020.
  Bags are experiencing slower growth, but shoes are accelerating it, particularly in high-end luxury.

• Geographic Trends:
  Mainland China represents less than 10% of the luxury market but generates over 30% of the business.
  Asia-Pacific accounts for 37% of the cosmetics market, and e-commerce is a major growth channel.

• Digital Transformation:
  The retail industry is shifting from physical stores to e-commerce, with online sales growing by over 20% annually.
  Digital transformation is a key driver for companies to achieve customer centricity and improve EBITDA margins.

M&A Activities

• M&A Trends:
  The M&A market remains active, with a focus on middle-market companies and high-growth segments such as skin care, make-up, and fragrances.
  Digital-native companies and small accessible luxury brands are promising acquisition targets.

• Key M&A Insights:

  • Switzerland's watch component industry is consolidating due to the need to secure supply chains.
  • European premium beauty brands are seeing increased interest in the US market.
  • China's growing consumer sophistication is leading to a shift in purchasing behavior, favoring a mix-and-match approach.
  • Financial sponsors are playing an increasingly significant role in M&A transactions, now accounting for almost half of all deals.

• Top Countries for M&A:
  The US and Italy are the top countries attracting M&A interest in the fashion sector.

EY Insights

• Blockchain and Counterfeits:
  The use of blockchain technology is gaining traction in combating counterfeit goods in the luxury market.

• Digital Influence:
  60% of luxury purchases are digitally influenced, reflecting the growing importance of online channels and digital marketing.

• Strategic Acquisitions:
  Strategic buyers are focused on acquiring new products, expanding into emerging markets, and innovating distribution channels.

Index Evolution

• EY Luxury and Cosmetics Index:
  • The index has outperformed the market over the last eight years, with a total return of 110% and an average annual return of 8.1%.
  • In the last 12 months, the index saw a total return of 32%, with LVMH and Kering leading in the luxury segment, and L'Oréal and Shiseido in the cosmetics segment.

Key Challenges for Companies

• Managing new generations and structured finance.
• Reaching full retail potential with a focus on channel EBITDA, sustainable growth, and like-for-like performance.
• Creating true merchandising capabilities through rationalized collection structures and optimized retail buying.
• Growing internationally with a sustainable go-to-market strategy.
• Embracing digital transformation to enhance client engagement and sales performance.

Conclusion

The luxury and cosmetics sectors are undergoing significant transformation driven by consumer behavior changes, digital advancements, and global market dynamics. Companies must adapt to these shifts by focusing on digital transformation, international expansion, and strategic M&A to remain competitive. The report underscores the importance of data-driven decisions, innovation, and customer-centric approaches in navigating this evolving landscape.