The Armani Group today announces its financial results for the year ended December 31, 2002, which show an industry leading rate of growth in profitability with Earnings Before Tax (EBT) up 9.7% to Euro 199 million and Earnings Before Tax, Depreciation and Amortisation (EBITDA) up 7.2% to Euro 263 million. The Group also saw a steady increase in sales during 2002 with wholesale revenues up 6.4% to Euro 1,691 million and consolidated revenues up 2.3% to Euro 1,301 million. The significant ongoing programme of strategic investments continued with Euro 87 million of internally generated funds committed to projects including the further expansion of the Group's exclusive retail network, manufacturing acquisitions and head office enhancements. Today the value of the Armani Group's brands at a retail level worldwide can be estimated at over Euro 4 billion.
Giorgio Armani, President and Chief Executive of the Armani Group, said:
''The Armani Group has delivered another outstanding performance in the year 2002. I am pleased to report that at the end of a year when the fashion and luxury goods sector has seen a general decline in profitability, our Group has not only registered an industry leading growth in profitability, but has also been able to continue with its ongoing expansion through a Euro 87 million programme of investments through internally generated funds.
The Armani Group continues to grow steadily with a notable 6.4% increase in wholesale revenues. Our overall year on year apparel sales were up 4.7%, with AJ|Armani Jeans a particular highlight registering a 19% increase, while among our other product categories, sales of Emporio Armani Watches rose 24% and sales of Giorgio Armani and Emporio Armani fragrances and cosmetics were up 11%.
During 2002 the Armani Group once again demonstrated its commitment to future growth with the opening of 30 new retail stores and the renovation of 16 existing stores; with the decision to award Safilo a new license for the manufacture and distribution of Giorgio Armani and Emporio Armani Eyewear; with the launch of two new prestige fragrances, Armani Mania for men and Sensi for women; with the launch of Emporio Armani Jewellery; with the roll-out of AJ|Armani Jeans in the United States and Japan; and, with the expansion of the Armani Casa brand worldwide.
As always, throughout the year the Group committed significant resources to the worldwide promotion of its portfolio of brands through a comprehensive programme of advertising and other communications activities valued at over 10% of wholesale revenues, a level that surpassed the industry average for 2002.
Over the last five years, through a strategic investment programme totalling more than Euro 650 million of internally generated funds, representing a re-investment of 70% of the Group's cash flow, the company has achieved its objective of becoming vertically integrated, where the principal aspects of design, manufacturing, distribution and retail are under direct control. The success of this chosen strategy is clearly demonstrated by the Group's compound annual growth rate of 14% over this same five year period.
It sometimes goes unnoticed that the Armani Group has, over the last three decades, effectively established six lifestyle brands around the world represented by the labels: Giorgio Armani, Armani Collezioni, Emporio Armani, AJ|Armani Jeans, A/X Armani Exchange and Armani Casa, each with its own personality, positioning, distribution and retail strategy. Within the fashion and luxury goods sector the Armani Group has been uniquely successful in pursuing this approach to diversification and expansion.
Despite the difficulties facing the fashion and luxury goods sector at this time due to uncertainties in the world economic and political climate, I am confident that the Armani Group will once again demonstrate that the judicious approach it continues to adopt in the management of its business will ensure a positive outcome in the future.''
SUMMARY OF YEAR 2002 INITIATIVES
� Strategic investment programme totalled Euro 87 million: Euro 39 million on retail expansion and renovation programme; Euro 12 million on head office and group infrastructure; and, 8 million on expansion of manufacturing capacity
� Worldwide retail expansion programme continued with 30 new store openings comprising: 4 Giorgio Armani boutiques, 4 Armani Collezioni stores, 4 Emporio Armani stores, 2 Armani Junior stores, 1 Emporio Armani Caffe, 1 Armani Fiori store, 1 Armani Libri Store and 7 Armani Casa stores
� Worldwide retail renovation programme continued with 16 renovations
� Emporio Armani Jewellery launched with A/W 2002/3 collection
� Launch of two new Giorgio Armani prestige fragrances: Armani Mania for men and Sensi for women
� Expansion of AJ|Armani Jeans in USA and Japan
� Acquisition of Reggio Emilia-based specialist knitwear manufacturer Deanna S.p.A. completed with first production underway for S/S 2003 collection
� Acquisition of Guardi and four specialist shoe factories completed with production underway for S/S 2003 collections
� New strategy for the manufacture and distribution of the Giorgio Armani and Emporio Armani Eyewear collections initiated with the awarding of a new license to Safilo
The Armani Group is one of the leading fashion and luxury goods groups in the world today with 4,700 direct employees and 13 factories. It designs, manufactures, distributes and retails fashion and lifestyle products including apparel, accessories, eyewear, watches, jewellery, home interiors, and fragrances and cosmetics under a range of brand names: Giorgio Armani, Armani Collezioni, Mani, Emporio Armani, AJ|Armani Jeans, A/X Armani Exchange, Armani Junior and Armani Casa. The Group's exclusive retail network currently comprises: 56 Giorgio Armani boutiques, 12 Armani Collezioni stores, 118 Emporio Armani stores, 66 A/X Armani Exchange stores, 11 AJ|Armani Jeans stores, 5 Armani Junior, 1 Giorgio Armani Accessori and 12 Armani Casa stores in 34 countries.